Happen (HAPN) TD Financial Services & Fintech Summit summary

Consumer credit trends and behavior

• Delinquencies have stabilized or improved, now about 40% below fintech competitors.

• Early detection of inflation-driven consumer stress led to proactive tightening of credit standards.

• Consumers initially caught off guard by inflation, but are now adjusting spending habits and categories.

• Inflation is easing, and the pace of consumer behavioral change has slowed.

Product demand, competition, and innovation

• Demand for core personal loan products is at record highs, driven by high credit card balances and rates.

• Competitive landscape has shifted, with more banks and credit unions targeting high-prime customers.

• Marketing acquisition costs are at historic lows, supporting efficient growth.

• New products like TopUp and Clean Sweep address evolving customer needs and are exceeding expectations.

• DebtIQ platform in beta aims to help customers manage and optimize credit card debt.

Funding structure and balance sheet strategy

• Acquisition of a bank transformed funding, enabling deposit-based funding and recurring net interest income.

• Structured certificate program has issued nearly $3 billion, improving asset manager engagement and pricing.

• Holding loans on balance sheet yields three times the income versus selling, enhancing profitability.

• Four loan disposition methods provide flexibility: whole loan sales, balance sheet retention, extended seasoning, and structured certificates.

• Loan allocation is random across grades, ensuring alignment with investor pools.