KBRA assigns a senior unsecured debt rating of BBB, a subordinated debt rating of BBB-, and a short-term debt rating of K3 to Luna Parent, Inc. ("Luna"). Additionally, KBRA assigns deposit and senior unsecured debt ratings of BBB+, a subordinated debt rating of BBB, and short-term deposit and debt ratings of K2 to its subsidiary, Lead Bank ("Lead"). The Outlook for all long-term ratings is Stable.

The ratings are supported by the execution of Lead’s distinct strategy, with three scalable business segments, generating strong returns, particularly on a risk-adjusted basis (RoRWA between 4.5% - 5.0% for 1H25 & FY24). KBRA holds a very favorable view of Luna’s executive team, given their experience and track record within the fintech and more broadly, the financial sector. Lead’s revenue mix contains a more significant component of noninterest income (~40% of total adjusted revenues) than similarly sized and even most larger KBRA rated peers, largely consisting of highly durable payments and other account service fees, as well as GoS revenues from its various BaaS lending programs. With that said, Lead’s revenues are highly concentrated, particularly within the BaaS segment, where the top two partners comprised 62% of BaaS revenues in 2024. However, this was expected to fall to 45% in 2025, reflective of the strong growth in new partnerships.

Acknowledging some historic industry risk associated with Digital Currency-related deposits, KBRA considers Lead’s risk management of this segment to be extremely comprehensive, with robust monitoring systems and practices, as well as strict limitations as to who it will accept these deposits from, with maximum related balance limits and reinvestment of deposits only into highly liquid instruments. The resultant risk management framework incorporates the maintenance of high levels of on-balance sheet liquidity, totaling ~$450 million, or 26% of total assets at 2Q25. Lead and Luna’s risk-based capital ratios benefit from a much lower level of RWAs-to-assets, with loans comprising <60% of assets. Luna reflected a CET1 ratio of 22.9% at 2Q25 and completed a $70 million common equity raise in 3Q25 ($30 million contributed to Lead), further increasing core capital.

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Methodologies

• Financial Institutions: Bank & Bank Holding Company Global Rating Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1011079

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