Earnings

Happen Lifts 2026 Diluted Earnings Outlook After Record Pre-Tax Income

The Tip Desk · November 8, 2026 · 4 min read

The digital bank posted record pre-tax income of $76.8 million and raised full-year 2026 diluted EPS guidance to $1.87-$1.92.

Happen, Inc. (HAPN), parent of Happen Bank, a digital lender and marketplace bank, reported record pre-tax income of $76.8 million for the third quarter ended September 30, 2026, up 34% from $57.2 million a year earlier, and raised its full-year 2026 diluted earnings outlook.

Net income was $59.3 million, up 34% from $44.3 million a year earlier. Diluted EPS rose 35% to $0.50 from $0.37 a year earlier. The pre-tax profit margin was 29.2%. Return on equity was 15.0% and return on tangible common equity was 15.8%.

Chief executive Scott Sanborn said the company was “effectively navigating the dynamic rate environment” and that the new brand was taking root, the core business was performing well, credit continued to outperform, and marketplace demand remained strong. He also said the company was starting to scale into the $500 billion home improvement market.

Total loan originations were $3.34 billion, up 26% from $2.66 billion a year earlier. The company said the increase reflected product and marketing initiatives. Current-period originations held for investment were $1.19 billion, up 90% from $629 million. Current-period originations sold or held for sale were $2.15 billion. Beginning in the first quarter of 2026, originations include small business loans; third-quarter small business originations were $54 million.

Total net revenue was $263.2 million, down 1% from $266.2 million a year earlier. The company attributed the decline to the 2026 election of fair value option accounting for all new originations. Net interest income was $183.1 million. Non-interest income was $80.1 million, including origination fees of $173.2 million, servicing fees of $13.6 million, a gain on sales of loans of $19.6 million, and net fair value adjustments of a $131.4 million loss. Net interest margin was 6.05%.

The provision for credit losses was a $15.9 million benefit, versus a $46.3 million expense a year earlier. The company attributed the swing to strong credit performance and the 2026 FVO election. The net charge-off ratio on total loans and leases held for investment was 3.1%. The company said delinquencies were about 40% lower than a competitor set.

Non-interest expense was $202.3 million. Marketing expense was $72.8 million, and marketing as a percentage of loan originations was 2.18%. The company said it increased investments in paid social and display to build attribution models for the full-year 2026 growth plan.

Starting January 1, 2026, Happen Bank adopted fair value option accounting for all new originations of loans held for investment. Under FVO, new loans are marked to fair value at origination, subsequent fair-value changes flow through non-interest income, and the company will no longer record a CECL provision on new originations. The company said the transition is expected, over time, to result in higher return on invested capital.

As of September 30, 2026, total assets were $13.3 billion and total deposits were $11.5 billion, with 89% of deposits FDIC-insured. Loans held for sale were $2.06 billion. Loans and leases held for investment were $5.73 billion. Available liquidity was $4.2 billion. Hedging notional balances were $2.5 billion. The consolidated Tier 1 leverage ratio was 12.0% and the CET1 capital ratio was 15.7%. Book value per common share was $13.81 and tangible book value per common share was $13.11.

Happen Bank began underwriting and originating home improvement loans after acquiring foundational technology and talent, and said it added distribution partners with a pipeline of additional interest. AI-powered agent support tools produced a greater than 90% automation rate on originations. Loans sold through proprietary structured certificates programs crossed $10 billion. Cumulative utilization of the Stock Repurchase and Acquisition Program was $59 million through September.

The company raised full-year 2026 diluted EPS guidance to $1.87-$1.92 from $1.80-$1.90, reflecting 61%-66% annual growth, and narrowed full-year 2026 originations guidance to $12.3 billion-$12.4 billion while targeting 26%-27% annual growth. Guidance assumes a stable consumer and interest rate environment, with a 25 basis point increase in the Fed funds rate in December. Fourth-quarter 2026 guidance is $3.1 billion-$3.2 billion of loan originations and $0.43-$0.48 of diluted EPS.