Happen (HAPN) Q1 2026 earnings summary

Executive summary

• Achieved 31% year-over-year growth in loan originations to $2.7 billion, surpassing guidance and delivering record pre-tax income of $67.3 million, net income of $51.6 million, and diluted EPS of $0.44, up 340% year-over-year.

• Announced rebranding to Happen Bank, reflecting expanded banking capabilities, with transition expected by summer 2026.

• Expanded into the $500B home improvement loan market and launched new products, leveraging AI-powered automation for operational efficiency and >90% automation rate for issued loans.

• Maintained strong credit outperformance, with delinquencies over 40% lower than competitors and robust demand from loan buyers.

• Major purchase finance business delivered its third consecutive quarter of record issuance, and new partnerships are expected to accelerate growth.

Financial highlights

• Net interest income rose 18% year-over-year to $176.2 million, with net interest margin expanding to 6.3% and total net revenue up 16% to $266.5 million.

• Non-interest income was $76 million, up 12% year-over-year, with origination fees up 86% and gain on loan sales up 33%.

• Risk-adjusted revenue grew 58% to $252 million, and provision for credit losses dropped to $0.4 million, reflecting fair value option adoption.

• Non-interest expense rose 28% year-over-year to $184.5 million, mainly due to higher marketing and rebrand costs.

• Total assets reached $11.94 billion and deposits $10.2 billion, both up 14% year-over-year.

Outlook and guidance

• Full-year 2026 guidance: loan originations of $11.6–$12.6 billion and diluted EPS of $1.65–$1.80; Q2 2026 guidance: loan originations of $3.0–$3.1 billion and diluted EPS of $0.40–$0.45.

• Guidance assumes a stable consumer and rate environment, with no Fed rate cuts expected for the remainder of the year.

• Capital expenditures for 2026 expected to be $95 million, focused on digital bank development and office improvements.