UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM			10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2021~~March 31, 2022

Commission File Number: 001-36771


LendingClub Corporation
(Exact name of registrant as specified in its charter)


Delaware			51-0605731
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

595 Market Street, Suite 200,

San Francisco,

94105

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (415) 632-5600

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.01 per share	LC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer

☐☒

Accelerated filer

☒☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October~~April 29, ~~2021,~~2022, there were ~~99,872,853~~102,194,037 shares of the registrant’s common stock outstanding.

LENDINGCLUB CORPORATION

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income (Loss)	7
	Condensed Consolidated Statements of Changes in Equity	8
	Condensed Consolidated Statements of Cash Flows	109
	Notes to Condensed Consolidated Financial Statements	1211

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7547
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~113~~68
Item 4.	Controls and Procedures	~~113~~68

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	~~113~~68
Item 1A.	Risk Factors	~~113~~68
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~114~~69
Item 3.	Defaults Upon Senior Securities	~~114~~69
Item 4.	Mine Safety Disclosures	~~114~~69
Item 5.	Other Information	~~114~~69
Item 6.	Exhibits	~~115~~70
Signatures		~~116~~71

Glossary

The following is a list of common acronyms and terms LendingClub Corporation regularly uses in its financial reporting:



Acquisition			Acquisition of Radius Bancorp, Inc.
AFS			Available for Sale
ACL			Allowance for Credit Losses (includes both the allowance for loan and lease losses and the reserve for unfunded lending commitments)
ALLL			Allowance for Loan and Lease Losses
Annual Report			Annual Report on Form 10-K for the year ended December 31, 2021
ASU			Accounting Standards Update
AUM			Assets Under Management (outstanding balances of Loan Originations serviced by the Company including loans sold to investors as well as loans held for investment and held for sale by the Company)
Balance Sheet			Condensed Consolidated Balance Sheets
LC Bank or LendingClub Bank			LendingClub Bank, National Association
CECL			Current Expected Credit Losses (Accounting Standards Update 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments)
CET1			Common Equity Tier 1
CET1 Capital Ratio			Common Equity Tier 1 capital divided by total risk-weighted assets as defined under the U.S. Basel III capital framework
DCF			Discounted Cash Flow

EPS			Net Income (Loss) Per Share
Exchange Act			Securities Exchange Act of 1934, as amended
FRB or Federal Reserve			Board of Governors of the Federal Reserve System and, as applicable, Federal Reserve Bank(s)
GAAP			Accounting Principles Generally Accepted in the United States of America
HFI			Loans which are retained by the Company and held for investment
HFS			Held for sale loans expected to be sold to investors, including Marketplace Loans
Income Statement			Condensed Consolidated Statements of Operations
LendingClub, LC, the Company, we, us, or our			LendingClub Corporation and its subsidiaries
Loan Originations			Unsecured personal loans and auto refinance loans originated by the Company or facilitated by third-party issuing banks
Marketplace Loans			Loan Originations designated as HFS and subsequently sold to investors

N/M			Not meaningful
Parent			LendingClub Corporation (the parent company of LendingClub Bank, National Association and other subsidiaries)

PPP Loans			Loans originated pursuant to the U.S. Small Business Administration’s Paycheck Protection Program

Radius			Radius Bancorp, Inc.


ROA			Return on Average Total Assets
ROE			Return on Average Equity

SEC			United States Securities and Exchange Commission
Securities Act			Securities Act of 1933, as amended

Structured Program transactions			Asset-backed securitization transactions and Certificate Program transactions (CLUB and Levered certificates), where certain accredited investors and qualified institutional buyers have the opportunity to invest in securities backed by a pool of unsecured personal whole loans.


Tier 1 Capital Ratio			Tier 1 capital, which includes Common Equity Tier 1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under the U.S. Basel III capital framework.
Tier 1 Leverage Ratio			Tier 1 capital, which includes Common Equity Tier 1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by quarterly adjusted average assets as defined under the U.S. Basel III capital framework.
Total Capital Ratio			Total capital, which includes Common Equity Tier 1 capital, Tier 1 capital and allowance for credit losses and qualifying subordinated debt that qualifies as Tier 2 capital, divided by total risk-weighted assets as defined under the U.S. Basel III capital framework.
Unsecured personal loans			Unsecured personal loans originated on the Company’s platforms, including an online direct to consumer platform and a platform connected with a network of education and patient finance providers.
VIE			Variable Interest Entity

LENDINGCLUB CORPORATION

Except as the context requires otherwise, as used herein, “LendingClub,” “Company,” “we,” “us,” and “our,” refer to LendingClub Corporation, a Delaware corporation, and, where appropriate, its consolidated subsidiaries and consolidated variable interest entities (VIEs), ~~including:~~

•including LendingClub Bank, National Association ~~(the~~(LC Bank)

•~~Various~~, and various entities established to facilitate loan sale transactions under LendingClub’s Structured Program, including sponsoring asset-backed securities transactions and Certificate Program transactions, where certain accredited investors and qualified institutional buyers have the opportunity to invest in securities backed by a pool of unsecured personal whole loans.

•LC Trust I (the LC Trust), an independent Delaware business trust that acquires loans from LendingClub and holds them for the sole benefit of certain investors that have purchased trust certificates issued by the LC Trust and that are related to specific underlying loans for the benefit of the investor.Program.

~~Forward-Looking~~Forward-looking Statements

This Quarterly Report on Form 10-Q (Report) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of ~~1934.~~1934, as amended (Exchange Act). Forward-looking statements in this Report include, without limitation, statements regarding borrowers, credit scoring, our strategy, future operations, expected losses, future financial position, future revenue, projected costs, prospects, plans, objectives of management, expected market growth and the impact on our business. You can identify these forward-looking statements by words such as “anticipate,” “appear,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “may,” “opportunity,” “plan,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or similar expressions.

These forward-looking statements include, among other things, statements about:

•our ability to integrate ~~the~~LC Bank and the timing and ability to realize the expected financial and strategic benefits of the ~~acquisition;~~acquisition of Radius Bancorp, Inc.;

•our ability to attract new members, to expand our product offerings and services, to improve revenue and generate recurring earnings, to capture expense benefits, to increase resiliency, and to enhance regulatory clarity;

•our ability, and that of third-party partners or providers, to address stricter or heightened regulatory or supervisory requirements and expectations;

•our compliance, and that of third-party partners or providers, with applicable local, state and federal laws, regulations and regulatory developments or court decisions affecting our business;

•the impact of COVID-19 and our ability to effectuate, and the effectiveness of, certain operational and ~~strategy~~strategic initiatives in light of COVID-19;

•our ability to successfully navigate the current economic climate;

•our ability to sustain the business under adverse circumstances;

•the effects of natural disasters, public health crises, acts of war or terrorism and other external events on our customers and ~~business;~~business, including the Ukrainian-Russian conflict;

•the impact of changes in laws or the regulatory or supervisory environment, including as a result of legislation, regulation, policies or changes in government officials or other personnel;

•the impact of changes in monetary, fiscal, or trade laws or policies, including as a result of actions by governmental agencies, central banks, or supranational authorities;

•the impact of new accounting standards or policies, including the Current Expected Credit ~~Loss~~Losses (CECL) standard;

•the results of examinations of us by regulatory authorities and the possibility that any such regulatory authority may, among other things, limit our business activities, increase our allowance for loan losses, increase our capital levels, or affect our ability to borrow funds or maintain or increase deposits;

•our ability, and that of third-party partners or providers, to maintain an enterprise risk management framework that is effective in mitigating risk;

~~LENDINGCLUB CORPORATION~~

•our ability to effectively manage capital or liquidity to support our evolving business or operational needs, while remaining compliant with regulatory or supervisory requirements and appropriate risk-management standards;

•our ability to attract and retain loan borrowers;

•our ability to develop and maintain a strong core deposit base or other low cost funding sources necessary to fund our activities;

•the impact of changes in consumer spending, borrowing and saving habits;

•the impact of the continuation of or changes in the short-term and long-term interest rate environment;

•the ability of borrowers to repay loans and the plans of borrowers;

LENDINGCLUB CORPORATION

•our ability to maintain investor confidence in the operation of our platform;

•our ability to retain existing sources and secure new or additional sources of investor commitments for our platform;

•the performance of our loan products and expected rates of return for investors;

•platform volume, pricing and balance;

•the effectiveness of our platform’s credit scoring models;

•our ability to innovate and the adoption and success of new products and services;

•the adequacy of our corporate governance, risk-management framework and compliance programs;

•the impact of, and our ability to resolve, pending litigation and governmental inquiries and investigations;

•the use of our own capital to purchase loans and the impact of holding loans on and our ability to sell loans off our balance sheet;

•our financial condition and performance, including the impact that management’s estimates have on our financial performance and the relationship between ~~the~~ interim period and full year results;

•our ability, and that of third-party ~~vendors,~~partners and providers, to maintain service and quality expectations;

•capital expenditures;

•our compliance with contractual obligations or restrictions;

•the potential impact of macro-economic developments, including recessions, inflation or other adverse circumstances;

•our ability to develop and maintain effective internal controls;

•our ability to recruit and retain quality employees to support current operations and future growth;

•changes in the effectiveness and reliability of our information technology and computer systems, including the impact of any security or privacy breach; the impact of expense initiatives and our ability to control our cost structure;

•our ability to manage and repay our indebtedness; and

•other risk factors listed from time to time in reports we file with the United States Securities and Exchange Commission (SEC).

We caution you that the foregoing list may not contain all of the forward-looking statements in this Report. We may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. We have included important factors in the “Risk Factors” section of this Report and our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, as well as in our condensed consolidated financial statements, related notes, and other information appearing elsewhere in this Report and our other filings with the SEC that could, among other things, cause actual results or events to differ materially from forward-looking statements contained in this Report. Forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this Report carefully and completely and with the understanding that actual future results may be materially different from what we expect. We do not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, actual results, future events or otherwise, other than as required by law.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

LENDINGCLUB CORPORATION

Condensed Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	22,604	$	5,197	Cash and due from banks	$	30,986	$	35,670
Interest-bearing deposits in banks	Interest-bearing deposits in banks	839,547		519,766		Interest-bearing deposits in banks	1,022,239		651,456
Total cash and cash equivalents	Total cash and cash equivalents	862,151		524,963		Total cash and cash equivalents	1,053,225		687,126
Restricted cash (1)	Restricted cash (1)	77,577		103,522		Restricted cash (1)	60,507		76,460
Securities available for sale at fair value (includes $268,732 and $159,164 at amortized cost, respectively)		274,930		142,226
Loans held for sale at fair value (1)		152,160		121,902
Securities available for sale at fair value ($402,944 and $256,170 at amortized cost, respectively)						Securities available for sale at fair value ($402,944 and $256,170 at amortized cost, respectively)	390,317		263,530
Loans held for sale (includes $156,730 and $142,370 at fair value, respectively) (1)						Loans held for sale (includes $156,730 and $142,370 at fair value, respectively) (1)	156,730		391,248
Loans and leases held for investment	Loans and leases held for investment	2,707,992		—		Loans and leases held for investment	3,422,296		2,899,126
Allowance for loan and lease losses	Allowance for loan and lease losses	(104,736)		—		Allowance for loan and lease losses	(187,985)		(144,389)
Loans and leases held for investment, net	Loans and leases held for investment, net	2,603,256		—		Loans and leases held for investment, net	3,234,311		2,754,737
Retail and certificate loans held for investment at fair value (1)	Retail and certificate loans held for investment at fair value (1)	298,541		636,686		Retail and certificate loans held for investment at fair value (1)	168,906		229,719
Other loans held for investment at fair value (1)	Other loans held for investment at fair value (1)	27,229		49,954		Other loans held for investment at fair value (1)	15,384		21,240
Property, equipment and software, net	Property, equipment and software, net	96,073		96,641		Property, equipment and software, net	111,503		97,996
Goodwill	Goodwill	75,717		—		Goodwill	75,717		75,717
Other assets (1)	Other assets (1)	283,126		187,399		Other assets (1)	307,825		302,546
Total assets	Total assets	$	4,750,760	$	1,863,293	Total assets	$	5,574,425	$	4,900,319
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Deposits:	Deposits:					Deposits:
Interest-bearing	Interest-bearing	2,614,663		—		Interest-bearing	$	3,715,847	$	2,919,203
Noninterest-bearing	Noninterest-bearing	224,056		—		Noninterest-bearing	261,630		216,585
Total deposits	Total deposits	2,838,719		—		Total deposits	3,977,477		3,135,788
Short-term borrowings	Short-term borrowings	46,110		104,989		Short-term borrowings	13,188		27,780
Advances from Paycheck Protection Program Liquidity Facility (PPPLF)	Advances from Paycheck Protection Program Liquidity Facility (PPPLF)	391,945		—		Advances from Paycheck Protection Program Liquidity Facility (PPPLF)	193,371		271,933
Retail notes, certificates and secured borrowings at fair value (1)	Retail notes, certificates and secured borrowings at fair value (1)	298,541		636,774		Retail notes, certificates and secured borrowings at fair value (1)	168,906		229,719
Payable on Structured Program borrowings (1)	Payable on Structured Program borrowings (1)	89,252		152,808		Payable on Structured Program borrowings (1)	20,347		65,451
Other long-term debt	Other long-term debt	15,563		—		Other long-term debt	15,388		15,455
Other liabilities (1)	Other liabilities (1)	265,840		244,551		Other liabilities (1)	298,314		303,951
Total liabilities	Total liabilities	3,945,970		1,139,122		Total liabilities	4,686,991		4,050,077
Equity	Equity					Equity
Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 0 and 43,000 shares issued and outstanding, respectively		—		—
Common stock, $0.01 par value; 180,000,000 shares authorized; 99,782,192 and 88,149,510 shares issued and outstanding, respectively		998		881
Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 0 shares issued and outstanding						Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, $0.01 par value; 180,000,000 shares authorized; 102,194,037 and 101,043,924 shares issued and outstanding, respectively						Common stock, $0.01 par value; 180,000,000 shares authorized; 102,194,037 and 101,043,924 shares issued and outstanding, respectively	1,022		1,010
Additional paid-in capital	Additional paid-in capital	1,594,646		1,508,020		Additional paid-in capital	1,576,147		1,559,616
Accumulated deficit	Accumulated deficit	(796,742)		(786,214)		Accumulated deficit	(676,594)		(717,430)
Treasury stock, at cost; 4,251 and 0 shares, respectively		(92)		—
Accumulated other comprehensive income		5,980		1,484

Accumulated other comprehensive income (loss)						Accumulated other comprehensive income (loss)	(13,141)		7,046

Total equity	Total equity	804,790		724,171		Total equity	887,434		850,242
Total liabilities and equity	Total liabilities and equity	$	4,750,760	$	1,863,293	Total liabilities and equity	$	5,574,425	$	4,900,319

(1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below.

The following table presents the assets and liabilities of consolidated VIEs, which are included in the Condensed Consolidated Balance Sheets (Balance Sheet) above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation.


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Assets of consolidated VIEs, included in total assets above	Assets of consolidated VIEs, included in total assets above					Assets of consolidated VIEs, included in total assets above
Restricted cash	Restricted cash	$	14,827	$	15,983	Restricted cash	$	9,602	$	13,462
Loans held for sale at fair value	Loans held for sale at fair value	55,172		98,190		Loans held for sale at fair value	—		41,734
Retail and certificate loans held for investment at fair value	Retail and certificate loans held for investment at fair value	15,388		52,620		Retail and certificate loans held for investment at fair value	6,733		10,281
Other loans held for investment at fair value	Other loans held for investment at fair value	27,033		50,102		Other loans held for investment at fair value	15,014		20,929
Other assets	Other assets	649		1,270		Other assets	322		584
Total assets of consolidated variable interest entities		$	113,069	$	218,165
Total assets of consolidated VIEs						Total assets of consolidated VIEs	$	31,671	$	86,990
Liabilities of consolidated VIEs, included in total liabilities above	Liabilities of consolidated VIEs, included in total liabilities above					Liabilities of consolidated VIEs, included in total liabilities above
Retail notes, certificates and secured borrowings at fair value	Retail notes, certificates and secured borrowings at fair value	$	15,388	$	52,620	Retail notes, certificates and secured borrowings at fair value	$	6,733	$	10,281
Payable on Structured Program borrowings	Payable on Structured Program borrowings	89,252		152,808		Payable on Structured Program borrowings	20,347		65,451
Other liabilities	Other liabilities	284		729		Other liabilities	83		467
Total liabilities of consolidated variable interest entities		$	104,924	$	206,157
Total liabilities of consolidated VIEs						Total liabilities of consolidated VIEs	$	27,163	$	76,199

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Non-interest income (1):
Non-interest income:										Non-interest income:
Marketplace revenue	Marketplace revenue	$	174,556	$	54,635	$	408,018	$	175,993	Marketplace revenue	$	179,966	$	81,727
Other non-interest income	Other non-interest income	6,322		3,115		18,670		10,166		Other non-interest income	9,891		5,607
Total non-interest income	Total non-interest income	180,878		57,750		426,688		186,159		Total non-interest income	189,857		87,334

Interest income (1):
Interest income:										Interest income:
Interest on loans held for sale	Interest on loans held for sale	8,536		14,916		22,387		67,579		Interest on loans held for sale	7,450		5,157
Interest and fees on loans and leases held for investment	Interest and fees on loans and leases held for investment	57,644		—		112,013		—		Interest and fees on loans and leases held for investment	91,442		15,301
Interest on retail and certificate loans held for investment at fair value	Interest on retail and certificate loans held for investment at fair value	12,172		27,117		48,448		92,193		Interest on retail and certificate loans held for investment at fair value	6,969		20,262
Interest on other loans held for investment at fair value	Interest on other loans held for investment at fair value	973		1,948		3,674		6,021		Interest on other loans held for investment at fair value	593		1,479
Interest on securities available for sale	Interest on securities available for sale	3,180		2,754		7,954		9,930		Interest on securities available for sale	4,511		2,235
Other interest income	Other interest income	355		38		701		1,021		Other interest income	688		156
Total interest income	Total interest income	82,860		46,773		195,177		176,744		Total interest income	111,653		44,590

Interest expense (1):
Interest expense:										Interest expense:
Interest on deposits	Interest on deposits	1,899		—		4,612		—		Interest on deposits	3,438		1,014
Interest on short-term borrowings	Interest on short-term borrowings	849		3,179		3,116		16,332		Interest on short-term borrowings	435		1,264
Interest on retail notes, certificates and secured borrowings	Interest on retail notes, certificates and secured borrowings	12,172		27,117		48,448		92,193		Interest on retail notes, certificates and secured borrowings	6,969		20,262
Interest on Structured Program borrowings	Interest on Structured Program borrowings	2,120		3,046		7,996		11,418		Interest on Structured Program borrowings	764		3,208
Interest on other long-term debt	Interest on other long-term debt	532		137		1,306		372		Interest on other long-term debt	367		336
Total interest expense	Total interest expense	17,572		33,479		65,478		120,315		Total interest expense	11,973		26,084

Net interest income ~~(1)~~	Net interest income ~~(1)~~	65,288		13,294		129,699		56,429		Net interest income ~~(1)~~	99,680		18,506

Total net revenue ~~(1)~~	Total net revenue ~~(1)~~	246,166		71,044		556,387		242,588		Total net revenue ~~(1)~~	289,537		105,840

Provision for (reversal of) credit losses (1)		37,524		(3,669)		93,651		3,800
Provision for credit losses										Provision for credit losses	52,509		21,493

Non-interest expense (1):
Non-interest expense:										Non-interest expense:
Compensation and benefits	Compensation and benefits	73,304		58,649		209,649		199,991		Compensation and benefits	81,610		64,420
Marketing	Marketing	50,782		2,135		105,434		43,030		Marketing	55,080		19,545
Equipment and software	Equipment and software	10,297		6,430		27,471		20,931		Equipment and software	11,046		7,893
Occupancy	Occupancy	6,486		6,466		19,543		22,241		Occupancy	6,019		6,900
Depreciation and amortization	Depreciation and amortization	10,549		12,348		33,823		41,832		Depreciation and amortization	11,039		11,766
Professional services	Professional services	11,750		8,817		34,873		32,723		Professional services	12,406		11,603
Other non-interest expense	Other non-interest expense	15,607		14,267		42,373		38,678		Other non-interest expense	14,004		12,125
Total non-interest expense	Total non-interest expense	178,775		109,112		473,166		399,426		Total non-interest expense	191,204		134,252

Income (Loss) before income tax expense		29,867		(34,399)		(10,430)		(160,638)
Income tax expense (benefit)		2,682		(74)		98		245
Income (Loss) before income tax benefit (expense)										Income (Loss) before income tax benefit (expense)	45,824		(49,905)
Income tax benefit (expense)										Income tax benefit (expense)	(4,988)		2,821
Consolidated net income (loss)	Consolidated net income (loss)	$	27,185	$	(34,325)	$	(10,528)	$	(160,883)	Consolidated net income (loss)	$	40,836	$	(47,084)

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Operations (Continued)

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Consolidated net income (loss) $ 27,185 $ (34,325) $ (10,528) $ (160,883)
Net income (loss) per share attributable to common stockholders – Basic (2)
$ 0.27 $ (0.38) $ (0.11) $ (2.35)
Net income (loss) per share attributable to common stockholders – Diluted (2)
$ 0.26 $ (0.38) $ (0.11) $ (2.35)
Weighted-average common shares – Basic (2)
99,073,507 73,566,385 96,531,725 76,781,157
Weighted-average common shares – Diluted (2)
106,108,662 73,566,385 96,531,725 76,781,157
Net income (loss) per share attributable to preferred stockholders – Basic (2)
$ 0.00 $ (0.38) $ (0.11) $ 1.46
Net income (loss) per share attributable to preferred stockholders – Diluted (2)
$ 0.00 $ (0.38) $ (0.11) $ 1.46
Weighted-average common shares, as converted – Basic (2)
— 17,335,485 873,217 13,174,545
Weighted-average common shares, as converted – Diluted (2)
— 17,335,485 873,217 13,174,545


	Three Months Ended March 31,
	2022		2021
Consolidated net income (loss)	$	40,836	$	(47,084)
Net income (loss) per share: (1)
Basic EPS – common stockholders	$	0.40	$	(0.49)
Diluted EPS – common stockholders	$	0.39	$	(0.49)
Weighted-average common shares – Basic	101,493,561		92,666,169
Weighted-average common shares – Diluted	105,052,904		92,666,169

Basic EPS – preferred stockholders	$	0.00	$	(0.49)
Diluted EPS – preferred stockholders	$	0.00	$	(0.49)
Weighted-average common shares, as converted – Basic	—		2,648,758
Weighted-average common shares, as converted – Diluted	—		2,648,758

(1)~~Prior period amounts have been reclassified to conform to the current period presentation. See “Notes to Condensed Consolidated Financial Statements~~ – ~~Note 1. Summary of Significant Accounting Policies” for additional information.~~

~~(2)~~ See “Notes to Condensed Consolidated Financial Statements – Note 4.3. Net Income (Loss) Per Share” for additional information.

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In Thousands)

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Consolidated net income (loss)	Consolidated net income (loss)	$	27,185	$	(34,325)	$	(10,528)	$	(160,883)	Consolidated net income (loss)	$	40,836	$	(47,084)
Other comprehensive income (loss), before tax:
Other comprehensive income (loss):										Other comprehensive income (loss):
Net unrealized gain (loss) on securities available for sale	Net unrealized gain (loss) on securities available for sale	1,106		6,502		4,496		(834)		Net unrealized gain (loss) on securities available for sale	(19,987)		204
Other comprehensive income (loss), before tax	Other comprehensive income (loss), before tax	1,106		6,502		4,496		(834)		Other comprehensive income (loss), before tax	(19,987)		204
Income tax effect	Income tax effect	—		74		—		(245)		Income tax effect	200		—
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	1,106		6,428		4,496		(589)		Other comprehensive income (loss), net of tax	(20,187)		204

Total comprehensive income (loss)	Total comprehensive income (loss)	$	28,291	$	(27,897)	$	(6,032)	$	(161,472)	Total comprehensive income (loss)	$	20,649	$	(46,880)

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Changes in Equity

(In Thousands, Except Share Data)

(Unaudited)


		Preferred Stock			Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Income					Accumulated Deficit			Total Equity			Preferred Stock							Common Stock						Additional Paid-in Capital			Treasury Stock					Accumulated Other Comprehensive Income (Loss)					Accumulated Deficit					Total Equity
		Shares	Amount		Shares	Amount				Shares	Amount						Shares								Amount				Shares			Amount			Shares					Amount
Balance at June 30, 2021		—	$	—	98,601,148	$	986	$	1,580,518	4,251	$	(92)			$	4,874				$	(823,927)			$	762,359
Balance at December 31, 2021																							Balance at December 31, 2021	—				$	—		101,043,924			$	1,010			$	1,559,616		—		$	—		$	7,046				$	(717,430)				$	850,242
Stock-based compensation	Stock-based compensation	—	—		—	—		17,971		—	—		—					—			17,971		Stock-based compensation	—				—			—			—			17,187			—		—			—					—					17,187
Net issuances under equity incentive plans, net of tax		—	—		1,181,044	12		(3,843)		—	—		—					—			(3,831)
Net issuances under equity incentive plans, net of tax (1)																							Net issuances under equity incentive plans, net of tax (1)	—				—			1,150,113			12			(656)			—		—			—					—					(644)

Net unrealized gain on securities available for sale, net of tax		—	—		—	—		—		—	—		1,106					—			1,106
Net unrealized loss on securities available for sale, net of tax																							Net unrealized loss on securities available for sale, net of tax	—				—			—			—			—			—		—			(20,187)					—					(20,187)
Net income	Net income	—	—		—	—		—		—	—		—					27,185			27,185		Net income	—				—			—			—			—			—		—			—					40,836					40,836
Balance at September 30, 2021		—	$	—	99,782,192	$	998	$	1,594,646	4,251	$	(92)	$	5,980				$	(796,742)		$	804,790
Balance at March 31, 2022																							Balance at March 31, 2022	—				$	—		102,194,037			$	1,022		$	1,576,147		—		$	—		$	(13,141)				$	(676,594)				$	887,434

		Preferred Stock			Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Income					Accumulated Deficit			Total Equity			Preferred Stock							Common Stock						Additional Paid-in Capital			Treasury Stock					Accumulated Other Comprehensive Income					Accumulated Deficit					Total Equity
		Shares	Amount		Shares	Amount				Shares	Amount						Shares								Amount				Shares			Amount			Shares					Amount
Balance at December 31, 2020	Balance at December 31, 2020	43,000	$	—	88,149,510	$	881	$	1,508,020	—	$	—			$	1,484				$	(786,214)			$	724,171	Balance at December 31, 2020	43,000			$	—		88,149,510			$		881		$	1,457,816	—			$	—				$	1,484				$	(736,010)				$	724,171
Stock-based compensation	Stock-based compensation	—	—		—	—		52,637		—	—		—					—			52,637		Stock-based compensation	—				—			—			—			15,765			—		—			—					—					15,765
Net issuances under equity incentive plans, net of tax (1)	Net issuances under equity incentive plans, net of tax (1)	—	—		3,571,568	36		(7,392)		4,251	(92)		—					—			(7,448)		Net issuances under equity incentive plans, net of tax (1)	—				—			1,017,502			10			(1,301)			4,251		(92)			—					—					(1,383)
Net issuances of stock related to acquisition (2)	Net issuances of stock related to acquisition (2)	—	—		3,761,114	38		41,424		—	—		—					—			41,462		Net issuances of stock related to acquisition (2)	—				—			3,761,114			38			41,424			—		—			—					—					41,462
Exchange of preferred stock for common stock	Exchange of preferred stock for common stock	(43,000)	—		4,300,000	43		(43)		—	—		—					—			—		Exchange of preferred stock for common stock	(43,000)				—			4,300,000			43			(43)			—		—			—					—					—

Net unrealized gain on securities available for sale, net of tax	Net unrealized gain on securities available for sale, net of tax	—	—		—	—		—		—	—		4,496					—			4,496		Net unrealized gain on securities available for sale, net of tax	—				—			—			—			—			—		—			204					—					204
Net loss	Net loss	—	—		—	—		—		—	—		—					(10,528)			(10,528)		Net loss	—				—			—			—			—			—		—			—					(47,084)					(47,084)
Balance at September 30, 2021		—	$	—	99,782,192	$	998	$	1,594,646	4,251	$	(92)	$	5,980				$	(796,742)		$	804,790
Balance at March 31, 2021																							Balance at March 31, 2021	—				$	—		97,228,126			$	972		$	1,513,661		4,251		$	(92)		$	1,688				$	(783,094)				$	733,135

																								Preferred Stock							Common Stock						Additional Paid-in Capital			Treasury Stock					Accumulated Other Comprehensive Loss					Accumulated Deficit					Total Equity
																								Shares				Amount			Shares			Amount						Shares		Amount
Balance at December 31, 2019																							Balance at December 31, 2019	—				$	—		88,757,406			$	892		$	1,467,882		461,391		$	(19,550)					$	(565)				$	(548,472)				$	900,187
Stock-based compensation																							Stock-based compensation	—				—			—			—			19,699			—		—			—					—					19,699
Net issuances under equity incentive plans, net of tax (1)																							Net issuances under equity incentive plans, net of tax (1)	—				—			674,689			7			(4,623)			5,658		(71)			—					—					(4,687)
Issuance of preferred stock in exchange for common stock																							Issuance of preferred stock in exchange for common stock	195,628				2			(19,562,881)			(196)			(50,010)			—		—			—					—					(50,204)
Retirement of treasury stock																							Retirement of treasury stock	—				—			—			(4)			(19,617)			(467,049)		19,621			—					—					—
Net unrealized loss on securities available for sale, net of tax																							Net unrealized loss on securities available for sale, net of tax	—				—			—			—			—			—		—			(20,362)					—					(20,362)
Net loss																							Net loss	—				—			—			—			—			—		—			—					(48,087)					(48,087)
Balance at March 31, 2020 (3)																							Balance at March 31, 2020 (3)	195,628				$	2		69,869,214			$	699		$	1,413,331		—		$	—		$	(20,927)				$	(596,559)				$	796,546

(1) Includes shares that were transferred to the Company to satisfy payment of all or a portion of the exercise price in connection with the exercise of stock options.

(2) Stock issued as part of the consideration paid related to the ~~acquisition~~Acquisition.

(3) The first quarter of ~~Radius.~~2020 is presented to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2020-06. See “Note ~~2. Business Acquisition.~~1. Summary of Significant Accounting Policies”

~~LENDINGCLUB CORPORATION~~

~~Condensed Consolidated Statements of Changes in Equity (Continued)~~

~~(In Thousands, Except Share Data)~~

~~(Unaudited)~~

Preferred Stock Common Stock Additional
Paid-in
Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated
Deficit Total
Equity
Shares Amount Shares Amount Shares Amount
Balance at
June 30, 2020 195,627 $ 2 70,938,835 $ 709 $ 1,478,247 — $ — $ (7,582) $ (725,234) $ 746,142
Stock-based compensation — — — — 16,281 — — — — 16,281
Net issuances under equity incentive plans, net of tax (1)
— — 1,000,259 10 (644) — — — — (634)
Net issuances of preferred stock in exchange for common stock (45,723) (1) 4,572,300 46 (45) — — — — —
Net unrealized gain on securities available for sale, net of tax — — — — — — — 6,428 — 6,428
Net loss — — — — — — — — (34,325) (34,325)
Balance at
September 30, 2020 149,904 $ 1 76,511,394 $ 765 $ 1,493,839 — $ — $ (1,154) $ (759,559) $ 733,892
Preferred Stock Common Stock Additional
Paid-in
Capital Treasury Stock Accumulated Other Comprehensive Loss Accumulated
Deficit Total
Equity
Shares Amount Shares Amount Shares Amount
Balance at
December 31, 2019 — $ — 88,757,406 $ 892 $ 1,467,882 461,391 $ (19,550) $ (565) $ (548,472) $ 900,187
Stock-based compensation — — — — 51,492 — — — — 51,492
Net issuances under equity incentive plans, net of tax (1)
— — 2,744,469 27 (6,067) 5,658 (71) — — (6,111)
Net issuances of preferred stock in exchange for common stock (2)
149,904 1 (14,990,481) (150) 149 — — — (50,204) (50,204)
Retirement of treasury stock — — — (4) (19,617) (467,049) 19,621 — — —
Net unrealized loss on securities available for sale, net of tax — — — — — — — (589) — (589)
Net loss — — — — — — — — (160,883) (160,883)
Balance at
September 30, 2020 149,904 $ 1 76,511,394 $ 765 $ 1,493,839 — $ — $ (1,154) $ (759,559) $ 733,892

~~(1)~~ ~~Includes shares that were transferred to the Company to satisfy payment of all or a portion of the exercise price in connection with the exercise of stock options.~~

~~(2)~~ Includes a payment of $50.2 million that was recorded as a deemed dividend within accumulated deficit related to the beneficial conversion feature of the Series A Preferred Stock issued on March 20, 2020, which would convert into common stock upon a sale by the preferred stockholder to a third party.

for additional information.

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020			2022		2021
Cash Flows from Operating Activities(1):
Consolidated net loss		$	(10,528)	$	(160,883)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:
Cash Flows from Operating Activities:						Cash Flows from Operating Activities:
Consolidated net income (loss)						Consolidated net income (loss)	$	40,836	$	(47,084)
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used for) operating activities:						Adjustments to reconcile consolidated net income (loss) to net cash provided by (used for) operating activities:
Net fair value adjustments	Net fair value adjustments	6,714		99,144		Net fair value adjustments	(15,249)		5,321
Provision for credit losses	Provision for credit losses	93,651		3,800		Provision for credit losses	52,509		21,493
Change in fair value of loan servicing assets	Change in fair value of loan servicing assets	39,584		48,046		Change in fair value of loan servicing assets	16,979		11,837

Accretion of loan deferred fees and costs(1)						Accretion of loan deferred fees and costs(1)	(19,252)		(3,273)
Stock-based compensation, net	Stock-based compensation, net	49,321		47,455		Stock-based compensation, net	15,694		14,801

Depreciation, amortization, and accretion		9,273		44,055
Depreciation and amortization(1)						Depreciation and amortization(1)	11,039		11,766
Gain on sales of loans	Gain on sales of loans	(49,547)		(23,724)		Gain on sales of loans	(24,110)		(8,323)
Other, net(1)	Other, net(1)	8,185		9,259		Other, net(1)	1,559		5,505

Net change to loans held for sale	Net change to loans held for sale	(14,756)		375,782		Net change to loans held for sale	(29,601)		(42,786)

Net change in operating assets and liabilities:	Net change in operating assets and liabilities:					Net change in operating assets and liabilities:

Other assets	Other assets	(7,610)		55,035		Other assets	443		(10,290)

Other liabilities	Other liabilities	(6,000)		(133,012)		Other liabilities	(10,174)		(10,333)

Net cash provided by operating activities		118,287		364,957
Cash Flows from Investing Activities(1):
Net cash provided by (used for) operating activities						Net cash provided by (used for) operating activities	40,673		(51,366)
Cash Flows from Investing Activities:						Cash Flows from Investing Activities:
Acquisition of company	Acquisition of company	(145,344)		—		Acquisition of company	—		(145,344)
Cash received from acquisition	Cash received from acquisition	668,236		—		Cash received from acquisition	—		668,236
Net change in loans and leases	Net change in loans and leases	(1,072,274)		5,987		Net change in loans and leases	(258,829)		(502,387)
Net decrease in retail and certificate loans	Net decrease in retail and certificate loans	362,005		340,853		Net decrease in retail and certificate loans	64,280		138,288

Purchases of securities available for sale	Purchases of securities available for sale	(78,914)		(53,536)		Purchases of securities available for sale	(166,123)		(9,911)
Proceeds from sales of securities available for sale	Proceeds from sales of securities available for sale	106,192		2,396		Proceeds from sales of securities available for sale	—		106,192
Proceeds from maturities and paydowns of securities available for sale	Proceeds from maturities and paydowns of securities available for sale	108,640		179,174		Proceeds from maturities and paydowns of securities available for sale	24,990		34,239
Purchases of property, equipment and software, net	Purchases of property, equipment and software, net	(24,435)		(24,583)		Purchases of property, equipment and software, net	(21,575)		(6,365)

Other investing activities	Other investing activities	480		300		Other investing activities	(2,967)		4,960

Net cash (used for) provided by investing activities	Net cash (used for) provided by investing activities	(75,414)		450,591		Net cash (used for) provided by investing activities	(360,224)		287,908
Cash Flows from Financing Activities(1):
Cash Flows from Financing Activities:						Cash Flows from Financing Activities:
Net change in demand deposits and savings accounts	Net change in demand deposits and savings accounts	809,488		—		Net change in demand deposits and savings accounts	841,689		343,787
Proceeds from PPPLF		325,194		0

Repayment on PPPLF	Repayment on PPPLF	(354,211)		—		Repayment on PPPLF	(78,562)		(50,876)
Proceeds from issuance of retail notes and certificates		—		237,283

Net decrease in retail notes and certificates		(362,160)		(580,841)

Principal payments on retail notes and certificates						Principal payments on retail notes and certificates	(64,358)		(138,376)

Principal payments on Structured Program borrowings	Principal payments on Structured Program borrowings	(70,496)		(51,635)		Principal payments on Structured Program borrowings	(9,356)		(22,391)
Proceeds from issuance of notes and certificates from Structured Program transactions		—		186,190

Principal payments on short-term borrowings	Principal payments on short-term borrowings	(69,163)		(1,558,150)		Principal payments on short-term borrowings	(14,732)		(24,908)
Principal payments on long-term debt		(2,834)		(14,419)
Proceeds from short-term borrowings		—		1,105,051

Deemed dividend paid to preferred stockholder		—		(50,204)

Other financing activities						Other financing activities	(4,984)		(1,383)
Net cash provided by financing activities						Net cash provided by financing activities	669,697		105,853
Net Increase in Cash, Cash Equivalents and Restricted Cash						Net Increase in Cash, Cash Equivalents and Restricted Cash	350,146		342,395
Cash, Cash Equivalents and Restricted Cash, Beginning of Period						Cash, Cash Equivalents and Restricted Cash, Beginning of Period	763,586		628,485
Cash, Cash Equivalents and Restricted Cash, End of Period						Cash, Cash Equivalents and Restricted Cash, End of Period	$	1,113,732	$	970,880

109

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Cash Flows (Continued)

(In Thousands)

(Unaudited)

Nine Months Ended
September 30,
2021 2020
Other financing activities (7,448) (31,978)
Net cash provided by (used for) financing activities 268,370 (758,703)
Net Increase in Cash, Cash Equivalents and Restricted Cash $ 311,243 $ 56,845
Cash, Cash Equivalents and Restricted Cash, Beginning of Period $ 628,485 $ 487,122
Cash, Cash Equivalents and Restricted Cash, End of Period $ 939,728 $ 543,967
Supplemental Cash Flow Information:
Cash paid for interest $ 62,926 $ 115,639
Cash paid for operating leases included in the measurement of lease liabilities $ 15,895 $ 12,086
Non-cash investing activity(2):
Loans and leases held for investment transferred to loans held for sale $ 154,082 $ —
Net securities retained from Structured Program transactions $ — $ 43,458
Accruals for property, equipment and software $ — $ 1,260
Non-cash investing and financing activity:
Transfer of whole loans to redeem certificates $ — $ 17,414
Net issuances of stock related to acquisition $ 41,462 $ —
Non-cash financing activity:
Exchange of common stock for preferred stock $ — $ 207,244


	Three Months Ended March 31,
	2022		2021
Supplemental Cash Flow Information:
Cash paid for interest	$	10,223	$	22,645
Cash paid for operating leases included in the measurement of lease liabilities	$	4,895	$	4,291





Non-cash investing and financing activity:

Net issuances of stock related to acquisition	$	—	$	41,462
Non-cash financing activity:
Derecognition of payable to securitization note and residual certificate holders held in consolidated VIE	$	36,072	$	—

(1)Prior period amounts have been reclassified to conform to the current period presentation.~~See “Notes to Condensed Consolidated Financial Statements~~ – ~~Note 1. Summary of Significant Accounting Policies” for additional information.~~

~~(2)~~ ~~See “Notes to Condensed Consolidated Financial Statements~~ – ~~Note 8. Fair Value of Assets and Liabilities”~~ ~~for other non-cash investing activity.~~

The following presents cash, cash equivalents and restricted cash by category within the ~~Condensed Consolidated~~ Balance ~~Sheets:~~Sheet:


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Cash and cash equivalents	Cash and cash equivalents	$	862,151	$	524,963	Cash and cash equivalents	$	1,053,225	$	687,126
Restricted cash	Restricted cash	77,577		103,522		Restricted cash	60,507		76,460
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	939,728	$	628,485	Total cash, cash equivalents and restricted cash	$	1,113,732	$	763,586

See Notes to Condensed Consolidated Financial Statements.

1110

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

1. Summary of Significant Accounting Policies

Basis of Presentation

LendingClub Corporation (LendingClub) was founded in 2006 to transform the banking industry by leveraging technology, data science and a marketplace model. LendingClub started by bringing a traditional credit product, the installment loan, into the digital age and became the largest provider of unsecured personal loans in the United States. On February 1, 2021, LendingClub Corporation (LendingClub) completed the acquisition (the Acquisition) of Radius Bancorp, Inc. (Radius), whereby LendingClub became a bank holding company and formed LendingClub Bank, National Association ~~(the~~(LC Bank) as its wholly-owned ~~subsidiary, through which it now~~subsidiary. The Company operates the vast majority of its ~~business. With~~business through LC Bank, as a lender and originator of loans and as a regulated bank in the ~~acquisition, LendingClub combined the complementary strengths of its digital lending capabilities with an award-winning digital bank.~~United States.

The accompanying unaudited condensed consolidated financial statements include LendingClub, its subsidiaries (collectively referred to as the Company, we, or us) and consolidated variable interest entities (VIEs). All intercompany balances and transactions have been eliminated. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and, in the opinion of management, contain all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the results and financial position for the periods presented. These accounting principles require management to make certain estimates and assumptions that affect the amounts in the accompanying financial statements. These estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions, and the differences could be material. Results reported in interim periods are not necessarily indicative of results for the full year or any other interim period.

The acquisition significantly changed the presentation of the Company’s financial statements, which are now structured according to the presentation requirements for bank holding companies under Article 9 of the SEC’s Regulation S-X. Prior period amounts in the financial statements and related footnotes have been reclassified to conform to the current period presentation. See “~~Note 2. Business Acquisition” for detail illustrating the reclassification adjustments made to align with the current presentation.~~

The accompanying interim condensed consolidated financial statements and these related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (Annual Report) filed on ~~March~~February 11, ~~2021.~~2022.

Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Part II – Item ~~8 –~~8. Financial Statements and Supplementary Data – Note 2.1. Summary of Significant Accounting Policies” in the Annual Report. There have been no changes to these significant accounting policies for the ~~nine~~three month period ended ~~September 30, 2021, except as noted below.~~March 31, 2022.

~~Loans and Leases~~

The Company initially classifies loans and leases as either loans held for sale or loans held for investment based on management’s assessment of the Company’s intent and ability to hold the loans for the foreseeable future or until maturity. Management’s intent and ability with respect to certain loans may change from time to time depending on a number of factors, for example economic, liquidity, and capital levels. In order to reclassify loans to held for sale, management must have the intent to sell the loans and reasonably identify the specific loans to be sold.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Loans classified as held for investment are reported at their amortized cost basis, which includes the principal amount outstanding, net of unamortized deferred fees and costs on originated loans, unamortized premiums and discounts on purchased loans, unless the fair value option was elected, in which case those loans are carried at fair value. Leases are reported at their net investment in the lease which includes the gross lease receivable and residual value, net of unearned income, unamortized deferred fees and costs on originated leases, and unamortized premiums and discounts on purchased leases. Deferred origination fees and costs, and premiums and discounts on purchased loans, are amortized over the contractual life of the related loan and leases as interest income using the effective interest method. Accrued interest receivable on loans and leases is included in “Other assets” on the Company’s Condensed Consolidated Balance Sheets.

For loans and leases held for investment at amortized cost, accrued interest income is calculated based on the contractual interest rate of the loan and recorded as interest income as earned. The accrual of interest and amortization of net deferred origination costs and fees is discontinued and the loan or lease is placed on nonaccrual status when the collectability of principal, interest or lease receivable is uncertain or payments of principal, interest or lease receivables have become past due 90 days or more. Past due status is based on the contractual terms. When a loan or lease held for investment is placed on nonaccrual status, all income previously accrued but not collected is reversed against the current period’s income. Because the Company has a nonaccrual policy which results in the timely reversal of past-due accrued interest, it does not record an allowance for expected credit losses on accrued interest receivable. Interest received on nonaccrual loans and leases is either applied against the principal balance or reported as income depending on management’s judgment as to the collectability of principal. Nonaccrual loans and leases are returned to accrual status when there no longer exists concern over collectability, the borrower has demonstrated, over time, both the intent and ability to repay and the loan or lease has been brought current and future payments are reasonably assured.

The Company has elected the fair value option for loans originated and initially classified as held for sale. Changes in the fair value of loans held for sale are recorded in “Marketplace revenue” in the Condensed Consolidated Statements of Operations in the period of the fair value changes. Origination fees are recognized in earnings within “Marketplace revenue” in the Condensed Consolidated Statements of Operations when received from the borrower at the time of origination. In certain circumstances, the Company may transfer loans from held for investment to loans held for sale. At the time of transfer, these loans are valued at the lower of amortized cost or market. Accrued interest income on loans held for sale is calculated based on the contractual interest rate of the loan and recorded as interest income as earned. The Company places loans held for sale on nonaccrual status at 90 days past due. When a loan held for sale is placed on nonaccrual status, the Company stops accruing interest and reverses all accrued but unpaid interest as of such date. The Company charges off loans held for sale no later than 120 days past due.

~~Allowance for Expected Credit Losses~~

The allowance for expected credit losses for loans and leases, and reserve for unfunded lending commitments (collectively the allowance for expected credit losses (ACL)), are valuation reserves that represent the Company’s estimate of expected credit losses (ECL) on the Company’s assets measured at amortized cost and unfunded lending commitments. The allowance for expected credit losses is measured based on a lifetime expected loss model, which does not require a loss event to occur before a credit loss is recognized. Under the lifetime expected credit loss model, the Company estimates the allowance based on relevant available information related to past events, current conditions, and reasonable and supportable forecasts of future economic conditions.

The Company evaluates its estimate of expected credit losses each reporting period and records any additions to the allowance on the Condensed Consolidated Statements of Operations as a provision for credit losses. Amounts determined to be uncollectible are charged-off to the allowance. Estimates of expected credit losses include expected recoveries of amounts previously charged-off and amounts expected to be charged-off. There could be instances where including expected recoveries of previously charged-off loans in the estimate of expected credit losses may result in a negative allowance.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

The allowance for expected credit losses is measured on a collective basis when loans share similar risk characteristics. Relevant risk characteristics for the consumer portfolio include product type, loan term, and monthly vintage. Relevant risk characteristics for the commercial portfolio include product type and purchased credit deteriorated (PCD) status. Loans measured on a collective basis generally have an allowance for expected credit losses which are made up of a quantitative, or modeled, component, and a qualitative component.

The Company will continue to monitor its loan pools on an ongoing basis and adjust accordingly as the risk characteristics of the financial assets may change over time. If a given financial asset does not share similar risk characteristics with other financial assets, the Company shall measure ECL on an individual, rather than on a collective basis. Loans measured on an individual basis generally have an allowance for expected credit losses which is measured in reference to any collateral securing the loan and/or expected cash flows which are specific to the borrower.

~~Allowance Calculation Methodology~~

The Company generally estimates ECL over the contractual term of its loans. The contractual term is adjusted for estimated prepayments when appropriate. Expected renewals and extensions do not adjust the contractual term unless the extension or renewal option is through a troubled debt restructuring (TDR) that is reasonably expected to occur or represents an unconditionally cancellable option held by the borrower.

The quantitative, or modeled, component of the ACL is primarily based on statistical models that use known or estimated data as of the balance sheet date and forecasted data over the reasonable and supportable period. Known and estimated data include current probability of default, loss given default and exposure at default, timing and amount of estimated prepayments, timing and amount of expected draws (for unfunded lending commitments), and relevant risk characteristics. Certain of the Company’s portfolios have limited historical loss data available internally. For these portfolios, the Company uses external credit loss information from the FDIC Call Report and Small Business Administration (SBA) data, which includes historical charge-off and balance data for peer banking institutions.

The Company obtains historical macroeconomic data dating back to 2004 from the St. Louis Federal Reserve Economic Database (FRED) and Moody’s Analytics to inform its view of the long-term condition of the economy. Forward-looking macroeconomic factors considered in the Company’s statistical models include Gross Domestic Product (GDP), unemployment rate, housing prices, and retail sales. Forward-looking macroeconomic factors are incorporated into the Company’s models for a two-year reasonable and supportable economic forecast period followed by a one-year reversion period during which expected credit losses are expected to revert back on a straight-line basis to historical losses unadjusted for economic conditions. The reasonable and supportable economic forecast period and reversion methodology are accounting estimates which may change in future periods as a result of changes to the current macroeconomic environment.

The Company’s statistical models produce expected cash flows, which are then discounted at the effective interest rate to derive net present value. This net present value is then compared to the amortized cost basis to derive the expected credit losses. As a result, the quantitative, or modeled, portion of ACL is estimated using a discounted cash flow (DCF) approach.

The Company also considers the need for qualitative adjustments to the modeled estimate of expected credit losses. For this purpose, the Company established a qualitative factor framework to periodically assess qualitative adjustments to address certain identified elements that are not directly captured by the expected credit loss models. These factors may include the impact of risk rating downgrades, changes in credit policies, problem loan trends,

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~identification of new risks not incorporated into the modeling framework, credit concentrations, changes in lending management and other external factors.~~

~~Zero Credit Loss Expectation Exception~~

The Company has a zero loss expectation when the loans, or portions thereof, are issued or guaranteed by certain U.S. government entities or agencies, and those entities or agencies have a long history of no defaults and the highest credit ratings issued by rating agencies. Loans held for investment, or portions thereof, which meet this criterion do not have an allowance for expected credit losses.

~~Reserve for Unfunded Lending Commitments~~

The Company also estimates expected credit losses associated with off-balance sheet commitments such as commitments to extend credit and unused lines of credit. The Company estimates these expected credit losses for the unfunded portion of the commitments that are not unconditionally cancellable depending on the likelihood that funding will occur. The reserve for unfunded lending commitments is reported as a liability within “Other liabilities” on the Company’s Condensed Consolidated Balance Sheets.

~~Individually Assessed Loans~~

Loans whose terms have been modified in a TDR and collateral-dependent financial assets are individually assessed for purposes of measuring expected credit losses. The allowance for expected credit losses on loans modified in a TDR is calculated using the discounted cash flow approach and is recorded as the difference between the amortized cost basis and the expected future cash flows. For purposes of discounting, the Company uses the original effective interest rate of the TDR loan.

For loans that are determined to be collateral dependent, the allowance for expected credit losses is determined using the fair value of the collateral method. Loans are considered collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be substantially through sale or operation of the collateral. For such loans, the allowance is calculated as the difference between the amortized cost basis and the fair value of the underlying collateral less costs to sell, if applicable.

~~Purchased Credit Deteriorated Assets~~

PCD assets are acquired financial assets (or groups of financial assets with similar risk characteristics) that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer’s assessment. The Company considers indicators such as loan rating, FICO score, days past due status, nonaccrual status, TDR status, charge-off status, bankruptcy, purchased credit impaired (PCI) status from prior acquisition, COVID-19 modification or industry risk rating to determine whether an acquired asset meets the definition of PCD.

PCD assets are recorded on the acquisition date at their purchase price plus any related initial ACL, which results in a “gross-up” of the asset’s initial amortized cost basis. Recognition of the initial ACL upon acquisition for PCD assets does not impact net income. Subsequent to the acquisition date, any changes in the ACL are recorded through the provision for credit losses on the income statement. Acquired non-PCD assets are accounted for in a manner similar to originated financial assets, whereby any initial ACL is recorded through the provision for credit losses in the income statement.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~Radius Acquisition~~

In connection with the Radius acquisition, the Company was required to record an allowance for non-PCD assets with a corresponding increase to the provision for credit losses. For acquired PCD loans, an allowance was required with a corresponding increase to the amortized cost basis as of the acquisition date. For PCD loans where all or a portion of the loan balance had been previously written-off, or would be subject to write-off under the Company’s charge-off policy, the CECL allowance included as part of the grossed-up loan balance at acquisition was immediately written-off, resulting in a zero period-end allowance balance and no impact on the ACL rollforward. See “~~Note 2. Business Acquisition” for additional detail.~~

~~Charge-Offs~~

Charge-offs are recorded when the Company determines that a loan balance is uncollectible or a loss-confirming event has occurred. Loss confirming events usually involve the receipt of specific adverse information about the borrower and may include borrower delinquency status, bankruptcy, foreclosure, or receipt of an asset valuation indicating a shortfall between the value of the collateral and the book value of the loan when that collateral asset is the sole source of repayment. A full or partial charge-off reduces the amortized cost basis of the loan and the related ACL.

For acquired PCD loans where all or a portion of the loan balance had been charged off prior to acquisition, and for which active collection efforts are still underway, the CECL allowance included as part of the grossed-up loan balance at acquisition is immediately charged off if required by the Company’s existing charge off policy. Additionally, the Company is required to consider its existing policies in determining whether to charge off any financial assets, regardless of whether a charge-off was recorded by the predecessor company. The initial ACL recognized on PCD assets includes the gross-up of the loan balance reduced by immediate charge-offs for loans previously charged off by the predecessor company or which meet the Company’s charge-off policy on the date of acquisition. Charge-offs against the allowance related to such acquired PCD loans do not result in an income statement impact. See “~~Note 6. Loans and Leases Held for Investment, Net of Allowance For Loan and Lease Losses” for additional detail.~~

~~Business Combinations~~

The Company accounts for business combinations using the acquisition method. The accounts of an acquired entity are included as of the date of acquisition, and any excess of purchase price over the fair value of the net assets acquired is capitalized as goodwill. See“~~Note 2. Business Acquisition” for further discussion of the acquisition of Radius and its impact on the Company’s consolidated financial statements.~~

~~Goodwill and Other Intangible Assets~~

Goodwill is the purchase consideration of an acquired business in excess of the aggregate fair value of the identified net assets acquired. The Company allocates goodwill to the reporting unit(s) (generally defined as an operating segment or one level below an operating segment for which financial information is available and reviewed regularly by management) that are expected to benefit from the synergies of the business combination.

The goodwill of each reporting unit is reviewed for impairment annually or whenever events or circumstances indicate that it is more likely than not that the estimated fair value of a reporting unit is below its carrying value. The Company’s annual impairment testing is completed in the fourth quarter. Impairment exists whenever the carrying value of goodwill exceeds its estimated fair value. Adverse changes in impairment indicators such as lower than forecast financial performance, increased competition, increased regulatory oversight, or unplanned changes in operations could result in impairment.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Intangible assets with a defined life are amortized over their useful lives in a manner that best reflects their economic benefit, which may include straight-line or accelerated methods of amortization. Intangible assets are reviewed for impairment quarterly and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable and its carrying amount exceeds its fair value. The Company does not have indefinite-lived intangible assets other than goodwill.

Adoption of New Accounting Standards

The Company did not adopt any new accounting standards during the ~~nine~~three month period ended ~~September 30,~~March 31, 2022, except as noted below.

In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity including convertible instruments and contracts on an entity’s own equity. The guidance allows for either full or modified retrospective adoption for fiscal periods beginning after December 15, 2021. The Company adopted this ASU on January 1, 2022 under the full retrospective approach. As a result of the adoption, the deemed dividend recorded in the first quarter of 2020 related to the beneficial conversion feature of the convertible Series A Preferred Stock, was reclassified from Accumulated Deficit to Additional Paid-in Capital within Equity, as shown in the following table:


Three Months Ended March 31, 2020	Additional Paid-in Capital		Accumulated Deficit
Issuance of preferred stock in exchange for common stock, as originally reported	$	194	$	(50,204)
Adoption of ASU 2020-06	(50,204)		50,204
Issuance of preferred stock in exchange for common stock, as adjusted	$	(50,010)	$	—

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

In addition, since the beneficial conversion feature is no longer recorded as a deemed dividend the allocation of net income (loss) attributable to stockholders and the related Basic and Diluted net income (loss) per share (EPS) has been adjusted, as shown in the following table:


Three Months Ended March 31, 2020	Common Stock		Preferred Stock
Net income (loss) attributable to stockholders, as originally reported	$	(95,444)	$	47,357
Adoption of ASU 2020-06	48,750		(48,750)
Net loss attributable to stockholders, as adjusted	$	(46,694)	$	(1,393)

Basic and Diluted EPS, as originally reported	$	(1.10)	$	18.36
Adoption of ASU 2020-06	0.56		(18.90)
Basic and Diluted EPS, as adjusted	$	(0.54)	$	(0.54)

The adoption of this ASU did not impact the Company’s financial position and cash flows in the first quarter of 2020, nor did it change net loss reported in the period.

New Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which, if certain criteria are met, provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform. These transactions include contract modifications, hedging relationships, and ~~the~~ sale or transfer of debt securities classified as held-to-maturity. The provisions of the new standard may be adopted as of the beginning of the reporting period when the election is made until December 31, 2022. The Company is evaluating the impact of this ASU ~~will~~and does not expect it to have a material impact on ~~its~~the Company’s financial position, results of operations, cash flows and disclosures. The Company has not elected an adoption date.

In ~~August 2020,~~March 2022, the FASB issued ASU ~~2020-06,~~2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt ~~with Conversion~~Restructurings and ~~Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,~~ Vintage Disclosures,which ~~simplifies~~eliminates the accounting guidance on troubled debt restructurings (TDRs) for ~~certain~~creditors that have adopted the CECL model and amends the guidance on “vintage disclosures” to require disclosure of current period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under Accounting Standards Codification 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial ~~instruments with characteristics~~difficulty. The provisions of ~~liabilities and equity including convertible instruments and contracts in an entity’s own equity. The guidance allows for either full or modified retrospective adoption~~this standard are effective for fiscal ~~periods~~years beginning after December 15, ~~2021~~2022, including interim periods within those fiscal years, with early adoption ~~permitted for fiscal periods beginning after December 15, 2020.~~permitted. The Company is evaluating the impact of this ~~ASU will have on its financial position, results of operations, cash flows, and disclosures.~~ASU.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

2. ~~Business Acquisition~~

On February 1, 2021, the Company completed the acquisition of Radius Bancorp, Inc. (Radius) in accordance with the Plan of Merger previously disclosed. The acquisition combined the Company’s complementary digital lending capabilities with those of a digital bank. Upon closing, LendingClub acquired all outstanding voting equity interests of Radius in exchange for total consideration as follows:


~~Cash paid~~	$	~~140,256~~
~~Fair value of common stock issued~~ ~~(1)~~	~~40,808~~
~~Consideration related to share-based payments~~ ~~(2)~~	~~5,742~~
~~Total consideration paid~~	$	~~186,806~~

~~(1)~~ ~~Calculated using the closing stock price of $10.85 on January 29, 2021, the most recent trading day preceding the acquisition, multiplied by 3,761,114 shares issued pursuant to the Plan of Merger.~~

~~(2)~~ ~~In connection with the acquisition, LendingClub agreed to convert equity awards held by Radius employees into cash and LendingClub awards pursuant to the Plan of Merger.~~

The acquisition was accounted for as a purchase business combination. Accordingly, the assets acquired and liabilities assumed are presented at their fair values determined as of the acquisition date. The determination of fair value requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. Fair value estimates related to the acquired assets and liabilities are subject to adjustment for up to one year after the closing date of the acquisition as additional information becomes available.

~~The following table presents an allocation of the total consideration paid to the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed:~~


~~Assets acquired:~~
~~Cash and due from banks~~	$	~~18,184~~
~~Interest-bearing deposits in banks~~	~~650,052~~
~~Total cash and cash equivalents~~	~~668,236~~
~~Securities available for sale at fair value~~	~~259,037~~
~~Loans and leases held for investment~~	~~1,610,054~~
~~Allowance for loan and lease losses~~	~~(12,440)~~
~~Loans and leases held for investment, net~~	~~1,597,614~~
~~Property, equipment and software, net~~	~~1,926~~
~~Goodwill~~	~~75,717~~
~~Other assets~~	~~86,482~~
~~Total assets~~	~~2,689,012~~

~~Liabilities assumed:~~
~~Non-interest bearing deposits~~	~~167,187~~
~~Interest-bearing deposits~~	~~1,862,272~~
~~Total deposits~~	~~2,029,459~~
~~Short-term borrowings~~	~~9,870~~
~~Advances from PPPLF~~	~~420,962~~
~~Other long-term debt~~	~~18,630~~
~~Other liabilities~~	~~23,285~~
~~Total liabilities~~	~~2,502,206~~

~~Total consideration paid~~	$	~~186,806~~

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

The purchase price exceeded the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed and, as a result of the purchase allocation, the Company recorded goodwill of $75.7 million, which is not deductible for tax purposes. The goodwill recognized is attributable primarily to strategic and financial benefits of the acquisition, including increased resiliency with access to stable, low-cost deposit funding replacing higher-cost and more volatile third-party warehouse funding; increased and more stable revenue driven by increased net interest income from loans held for investment; expense benefits by capturing the fees that were historically paid to our third-party issuing banks; and the ability to attract new members and deepen relationships with existing members through the addition of banking services.

The carrying amounts of cash, securities available for sale, short-term borrowings, advances from PPPLF, and certain other assets and liabilities were determined to be a reasonable estimate of the fair value of such items. The following is a description of the methods used to determine the fair values of significant assets and liabilities.

~~Securities available for sale~~: The Company acquired a debt securities portfolio containing U.S. agency residential mortgage-backed securities, municipal securities, U.S. agency securities, commercial mortgage-backed securities and other asset-backed securities. The acquisition date fair value of the securities was based on third-party dealer quotes which reflect exit prices pursuant to the guidance on fair value measurement.

~~Loans and leases held for investment~~: Fair values for loans and leases were primarily based on a discounted cash flow methodology that considered contractual terms, credit loss expectations, market interest rates, and other market factors such as liquidity from the perspective of a market participant. Loan portfolios were pooled together according to similar characteristics such as product type, lien position, risk grade, credit deterioration status, FICO score, and collateral type. Loan pools were treated in the aggregate when applying various valuation techniques. The contractual terms, default rates, loss given default rates, loss severity and recovery lag, and prepayment rates were the key assumptions embedded into the estimated cash flow valuation. These assumptions were informed by internal data on loan characteristics, historical loss experience, and current and forecasted economic conditions. The discount rates used are based on current market rates for new originations of comparable loans and include adjustments for liquidity. All of the merged loans were marked to fair value as of the acquisition date and, therefore, there was no carryover of the allowance for expected credit losses that had previously been recorded by Radius. Immediately following the acquisition, the Company recorded an ACL on non-PCD loans of $6.9 million through an increase to the provision for credit losses. The initial ACL for PCD loans of $12.4 million was recorded through an adjustment to the amortized cost basis of the loans.

~~Core deposit intangible (CDI)~~: This intangible asset represents the value of the relationships with certain deposit clients and is included in “Other assets” in the Company’s Condensed Consolidated Balance Sheets. The fair value was estimated based on an after-tax cost savings method of the income approach. Under this method, fair value is equal to the present value of the after-tax cost savings or differential cash flows generated by the acquired deposit base. Cost savings is defined as the difference between the effective cost of funds on deposits and the cost of an equal amount of funds from an alternative source. Deposits were pooled by product type and channel. The discount rates used for CDI assets are based on current market participant rates. The CDI is being amortized over 10 years based upon the estimated economic benefits received.

~~Other Investments:~~ The fair value of an investment in a private entity that was sold after the acquisition was determined based upon the price expected to be received in the subsequent sale. This investment was included in “Other assets” in the Company’s Condensed Consolidated Balance Sheets.

~~Interest-bearing deposits~~: In determining the fair value of certificates of deposit, the cash flows of the contractual interest payments during the specific period of the certificates of deposit and scheduled principal payout were discounted to present value at market-based interest rates.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~Subordinated debt~~: The fair value of subordinated debt was determined by using a discounted cash flow method using a market participant discount rate for similar instruments. Subordinated debt is included in “Other long-term debt” in the Company’s Condensed Consolidated Balance Sheets.

~~The Company incurred approximately $16 million of expenses in connection with the acquisition.~~

The table below presents certain unaudited pro forma financial information for illustrative purposes only, for the third quarters and first nine months of 2021 and 2020, as if the acquisition took place on January 1, 2020. The pro forma information combines the historical results of Radius with the Company’s, adjusting for the estimated impact of certain fair value adjustments for the respective periods. The pro forma information does not reflect changes to the provision for credit losses resulting from recording loan assets as fair value, cost savings, or business synergies. As a result, actual amounts would have differed from the unaudited pro forma information presented and the differences could be significant.

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Total net revenue $ 246,166 $ 120,359 $ 563,458 $ 335,355
Consolidated net income (loss) $ 27,185 $ (31,954) $ (17,464) $ (165,071)

For the third quarter and first nine months of 2021, total net revenue of $19.6 million and $56.4 million, respectively, from the Radius acquisition is included in the Company’s Condensed Consolidated Statements of Operations.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~Summary of Reclassification Adjustments~~

The classification of the items presented by the Company in its consolidated financial statements under GAAP has been adjusted to align with the presentation requirements under Article 9 of the SEC’s Regulation S-X for bank holding companies. The presentation shown below is reflective of what is generally expected to be used by the combined company under GAAP.

As of December 31, 2020
LendingClub Historical Presentation Reclassification Adjustments LendingClub Reclassified Amounts
Assets
Cash and cash equivalents $ 524,963 $ (524,963) $ —
Cash and due from banks — 5,197 5,197
Interest bearing deposits in banks — 519,766 519,766
Total cash and cash equivalents — 524,963 524,963
Restricted cash 103,522 — 103,522
Securities available for sale at fair value 142,226 — 142,226
Loans held for investment at fair value 636,686 (636,686) —
Loans held for investment by the Company at fair value 49,954 (49,954) —
Loans held for sale by the Company at fair value 121,902 (121,902) —
Loans held for sale at fair value — 121,902 121,902
Retail and certificate loans held for investment at fair value — 636,686 636,686
Other loans held for investment at fair value — 49,954 49,954
Accrued interest receivable 5,205 (5,205) —
Property, equipment and software, net 96,641 — 96,641
Operating lease assets 74,037 (74,037) —
Intangible assets, net 11,427 (11,427) —
Other assets 96,730 90,669 187,399
Total assets $ 1,863,293 $ — $ 1,863,293
Liabilities and Equity
Accounts payable $ 3,698 $ (3,698) $ —
Accrued interest payable 4,572 (4,572) —
Operating lease liabilities 94,538 (94,538) —
Accrued expenses and other liabilities 101,457 (101,457) —
Payable to investors 40,286 (40,286) —
Credit facilities and securities sold under repurchase agreements 104,989 (104,989) —
Short-term borrowings — 104,989 104,989
Retail notes, certificates and secured borrowings at fair value 636,774 — 636,774
Payable on Structured Program borrowings 152,808 — 152,808
Other liabilities — 244,551 244,551
Total liabilities 1,139,122 — 1,139,122
Equity
Common stock 881 — 881
Additional paid-in capital 1,508,020 — 1,508,020
Accumulated deficit (786,214) — (786,214)
Accumulated other comprehensive income 1,484 — 1,484
Total equity 724,171 — 724,171
Total liabilities and equity $ 1,863,293 $ — $ 1,863,293

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Three months ended September 30, 2020
LendingClub Historical Presentation Reclassification Adjustments LendingClub Reclassified Amounts
Net Revenue
Transaction fees $ 24,372 $ (24,372) $ —
Interest income 46,773 (46,773) —
Interest expense (32,440) 32,440 —
Net fair value adjustments (696) 696 —
Net interest income and fair value adjustments 13,637 (13,637) —
Investor fees 25,850 (25,850) —
Gain on sales of loans 7,739 (7,739) —
Net investor revenue 47,226 (47,226) —
Other revenue 3,115 (3,115) —
Total net revenue 74,713 (74,713) —
Non-interest income
Marketplace revenue (1)
— 54,635 54,635
Other non-interest income — 3,115 3,115
Total non-interest income — 57,750 57,750
Interest income
Interest on loans held for sale — 14,916 14,916
Interest on retail and certificate loans held for investment at fair value — 27,117 27,117
Interest on other loans held for investment at fair value — 1,948 1,948
Interest on securities available for sale — 2,754 2,754
Other interest income — 38 38
Total interest income — 46,773 46,773
Interest expense
Interest on short-term borrowings — 3,179 3,179
Interest on retail notes, certificates and secured borrowings — 27,117 27,117
Interest on Structured Program borrowings — 3,046 3,046
Interest on other long-term debt — 137 137
Total interest expense (2)
— 33,479 33,479
Net interest income — 13,294 13,294
Total net revenue (3)
— 71,044 71,044
Reversal of credit losses (3)
— (3,669) (3,669)
Operating expenses
Sales and marketing 7,201 (7,201) —
Origination and servicing 15,595 (15,595) —
Engineering and product development 31,984 (31,984) —
Other general and administrative 54,332 (54,332) —
Total operating expenses 109,112 (109,112) —
Non-interest expense
Compensation and benefits — 58,649 58,649
Marketing — 2,135 2,135
Equipment and software — 6,430 6,430
Occupancy — 6,466 6,466
Depreciation and amortization — 12,348 12,348
Professional services — 8,817 8,817
Other non-interest expense — 14,267 14,267
Total non-interest expense — 109,112 109,112
Loss before income tax expense (34,399) — (34,399)
Income tax benefit (74) — (74)
Consolidated net loss $ (34,325) $ — $ (34,325)

~~(1)~~ ~~See “Note 3. Marketplace Revenue” for additional detail.~~

~~(2)~~ ~~The increase in total interest expense relates to valuation adjustments on Structured Program borrowings reclassified from net fair value adjustments to interest expense.~~

~~(3)~~ The decrease in total net revenue from the historical presentation relates to the reversal of credit valuation adjustments on securities available for sale reclassified from net fair value adjustments to reversal of credit losses.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Nine months ended September 30, 2020
LendingClub Historical Presentation Reclassification Adjustments LendingClub Reclassified Amounts
Net Revenue
Transaction fees $ 164,489 $ (164,489) $ —
Interest income 176,744 (176,744) —
Interest expense (114,447) 114,447 —
Net fair value adjustments (108,812) 108,812 —
Net interest income and fair value adjustments (46,515) 46,515 —
Investor fees 86,924 (86,924) —
Gain on sales of loans 23,724 (23,724) —
Net investor revenue 64,133 (64,133) —
Other revenue 10,166 (10,166) —
Total net revenue 238,788 (238,788) —
Non-interest income
Marketplace revenue (1)
— 175,993 175,993
Other non-interest income — 10,166 10,166
Total non-interest income — 186,159 186,159
Interest income
Interest on loans held for sale — 67,579 67,579
Interest on retail and certificate loans held for investment at fair value — 92,193 92,193
Interest on other loans held for investment at fair value — 6,021 6,021
Interest on securities available for sale — 9,930 9,930
Other interest income — 1,021 1,021
Total interest income — 176,744 176,744
Interest expense
Interest on short-term borrowings — 16,332 16,332
Interest on retail notes, certificates and secured borrowings — 92,193 92,193
Interest on Structured Program borrowings — 11,418 11,418
Interest on other long-term debt — 372 372
Total interest expense (2)
— 120,315 120,315
Net interest income — 56,429 56,429
Total net revenue (3)
— 242,588 242,588
Provision for credit losses (3)
— 3,800 3,800
Operating expenses
Sales and marketing 65,708 (65,708) —
Origination and servicing 54,419 (54,419) —
Engineering and product development 109,861 (109,861) —
Other general and administrative 169,438 (169,438) —
Total operating expenses 399,426 (399,426) —
Non-interest expense
Compensation and benefits — 199,991 199,991
Marketing — 43,030 43,030
Equipment and software — 20,931 20,931
Occupancy — 22,241 22,241
Depreciation and amortization — 41,832 41,832
Professional services — 32,723 32,723
Other non-interest expense — 38,678 38,678
Total non-interest expense — 399,426 399,426
Loss before income tax expense (160,638) — (160,638)
Income tax expense 245 — 245
Consolidated net loss $ (160,883) $ — $ (160,883)

~~(1)~~ ~~See “Note 3. Marketplace Revenue” for additional detail.~~

~~(2)~~ ~~The increase in total interest expense relates to valuation adjustments on Structured Program borrowings reclassified from net fair value adjustments to interest expense.~~

~~(3)~~ The increase in total net revenue from the historical presentation relates to credit valuation adjustments on securities available for sale reclassified from net fair value adjustments to provision for credit losses.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

3. Marketplace Revenue

Marketplace revenue consists of (i) origination fees, (ii) servicing fees, (iii) gain (loss) on sales of loans and (iv) net fair value adjustments, as described below.

Origination Fees: Origination fees are primarily fees earned related to originating and issuing unsecured personal loans that are held for sale. ~~Origination fees are paid directly to the Company by borrowers upon the origination of the loan.~~

In addition, origination fees include transaction fees that are paid to the Company by issuing bank partners or education and patient service providers for the work performed in facilitating the origination of loans by the issuing banks. Prior to the acquisition of Radius, the Company relied on third-party issuing banks to originate and fund loans initiated by borrowers. Following the acquisition, the Company became the originator and lender for all unsecured personal and auto loans. However, the Company continues to utilize issuing bank partners to fund education and patient finance loans, which originate and service such loans and from whom the Company receives transaction fees.

Servicing Fees: The Company receives servicing fees to compensate it for ~~the costs incurred in~~ servicing ~~a loan,~~loans on behalf of investors, including managing payments and collections from borrowers ~~collections~~ and payments to those investors. The amount of servicing fee revenue earned is predominantly affected by the servicing rates paid by investors and the outstanding principal balance of ~~loans.~~loans serviced for investors. Servicing fee revenue related to ~~whole~~ loans sold also includes the associated change in fair value of servicing assets and liabilities associated with the loans. Servicing rights are recorded as either an asset or liability depending on the degree to which the contractual loan servicing fee is above or below an estimated market rate loan servicing fee.assets.

~~Gain (Loss) on Sales of Loans:~~ In connection with loan sales and in addition to servicing fees earned with respect to the corresponding loan, the Company recognizes a gain or loss on the sale of that loan based on the level to which the contractual loan servicing fee is above or below an estimated market rate loan servicing fee. Additionally, the Company recognizes transaction costs as a loss on sale of loans.

~~Net Fair Value Adjustments:~~ ~~The Company records fair value adjustments on loans that are recorded at fair value.~~

~~The following table presents components of marketplace revenue for the periods presented:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Origination fees $ 129,125 $ 24,372 $ 298,486 $ 164,489
Servicing fees 20,819 25,850 66,699 86,924
Gain on sales of loans 21,907 7,739 49,547 23,724
Net fair value adjustments (1)
2,705 (3,326) (6,714) (99,144)
Total marketplace revenue $ 174,556 $ 54,635 $ 408,018 $ 175,993

~~(1)~~ Certain prior period valuation adjustments on securities available for sale and Structured Program borrowings were reclassified from net fair value adjustments to provision for credit losses and interest expense, respectively, to conform to the current period presentation.

~~Revenue from Contracts with Customers~~

The Company’s revenue from contracts with customers includes i) transaction fees received from issuing bank partners and ii) referral fees from third-party companies. Transaction fees are presented as a component of

2412

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

~~origination fees in “Marketplace revenue” and referral fees are presented~~Gain (Loss) on Sales of Loans: In connection with loan sales, the Company recognizes a gain or loss on the sale of loans based on the level to which the contractual servicing fee is above or below an estimated market rate of servicing. Additionally, the Company recognizes transaction costs, if any, as a ~~component~~loss on sale of ~~“Other non-interest income” in the Condensed Consolidated Statements of Operations.~~loans.

~~Upon the acquisition of Radius, the Company’s principal sources of revenue are marketplace revenue and interest income~~Net Fair Value Adjustments: The Company records fair value adjustments on loans ~~which~~that are ~~outside~~recorded at fair value, including gains or losses from sale prices in excess of or less than the ~~scope of~~ ~~ASC 606, Revenue from Contracts with Customers~~. The remainder of the Company’s revenue is classified as non-interest income and is earned from a variety of sources, such as custodial and other fees, service charges, gains and losses and other non-interest income.loan principal amount sold.

The following table presents ~~the Company’s~~components of marketplace revenue ~~from contracts with customers, disaggregated by revenue source for services transferred over time,~~ for the ~~third quarters and first nine months of 2021 and 2020:~~periods presented:

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Transaction fees $ 3,677 $ 24,372 $ 29,453 $ 164,489
Referral fees 4,293 1,264 9,649 3,503
Total revenue from contracts with customers $ 7,970 $ 25,636 $ 39,102 $ 167,992


	Three Months Ended March 31,
	2022		2021
Origination fees	$	122,093	$	55,559
Servicing fees	18,514		23,166
Gain on sales of loans	24,110		8,323
Net fair value adjustments	15,249		(5,321)
Total marketplace revenue	$	179,966	$	81,727

3. Net Income (Loss) Per Share

The ~~Company recognizes transaction~~following table details the computation of the Company’s Basic and ~~referral fees at each distinct instance after~~Diluted EPS of common stock and Series A Preferred Stock:


Three Months Ended March 31,	2022		2021
	Common Stock			Common Stock		Preferred Stock (1)
Basic EPS:
Net income (loss) attributable to stockholders	$	40,836		$	(45,776)	$	(1,308)
Weighted-average common shares – Basic	101,493,561			92,666,169		2,648,758
Basic EPS	$	0.40		$	(0.49)	$	(0.49)

Diluted EPS:
Net income (loss) attributable to stockholders	$	40,836		$	(45,776)	$	(1,308)
Weighted-average common shares – Diluted	105,052,904			92,666,169		2,648,758
Diluted EPS	$	0.39		$	(0.49)	$	(0.49)

(1) Presented on an as-converted basis.

The following table summarizes the ~~Company satisfies its performance obligations. The Company had no bad debt expense~~weighted-average common shares that were excluded from the Company’s Diluted EPS computation because their effect would have been anti-dilutive for the ~~third quarters and~~ first ~~nine months~~quarter of ~~2021 and 2020. Because revenue is recognized at~~2021:




Preferred stock									2,648,758
RSUs and PBRSUs									1,468,191
Stock options									371,367
Total									4,488,316

There were no weighted-average common shares that were excluded from the same time that payments are received, the Company had no contract assets, contract liabilities, or deferred contract costs recorded as of both September 30, 2021 and December 31, 2020. Additionally, the Company did not recognize any revenue from performance obligations related to prior periods (for example, due to changes in transaction price)Company’s Diluted EPS computation for the ~~third quarters and~~ first ~~nine months~~quarter of ~~2021 and 2020. For additional detail on the Company’s accounting policy regarding revenue recognition, see “Part II – Item 8. Financial Statements and Supplementary Data – Note 2. Summary of Significant Accounting Policies~~”~~in theAnnual Report.~~2022.

2513

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

4. ~~Net Income (Loss) Per Share~~

~~The following tables detail the computation of the Company’s basic and diluted net income (loss) per share of common stock and Series A preferred stock:~~

Three Months Ended September 30, 2021 2020
Common Stock
Preferred Stock (1)
Common Stock
Preferred Stock (1)
Net income (loss) attributable to stockholders $ 27,185 $ — $ (27,779) $ (6,546)
Weighted-average common shares – Basic 99,073,507 — 73,566,385 17,335,485
Weighted-average common shares – Diluted 106,108,662 — 73,566,385 17,335,485
Net income (loss) per share attributable to stockholders – Basic $ 0.27 $ 0.00 $ (0.38) $ (0.38)
Net income (loss) per share attributable to stockholders – Diluted $ 0.26 $ 0.00 $ (0.38) $ (0.38)

Nine Months Ended September 30, 2021 2020
Common Stock
Preferred Stock (1)
Common Stock
Preferred Stock (1)
Allocation of undistributed consolidated net loss $ (10,434) $ (94) $ (129,968) $ (30,915)
Deemed dividend — — (50,204) 50,204
Net income (loss) attributable to stockholders $ (10,434) $ (94) $ (180,172) $ 19,289
Weighted-average common shares – Basic and Diluted 96,531,725 873,217 76,781,157 13,174,545
Net income (loss) per share attributable to stockholders – Basic and Diluted $ (0.11) $ (0.11) $ (2.35) $ 1.46

~~(1)~~ ~~Presented on an as-converted basis.~~

In February 2020, the Company entered into an exchange agreement with its largest stockholder, Shanda Asset Management Holdings Limited and its affiliates (Shanda), pursuant to which, on March 20, 2020, Shanda exchanged all of 19,562,881 shares of LendingClub common stock, par value of $0.01 per share, held by it for (i) 195,628 newly issued shares of mandatorily convertible, non-voting, LendingClub preferred stock, series A (Series A Preferred Stock), par value of $0.01 per share, and (ii) a one-time cash payment of $50.2 million. The Series A Preferred Stock is considered a separate class of common shares for purposes of calculating net income (loss) per share because it participates in earnings similar to common stock and does not receive any significant preferences over the common stock. As a result of the preferred stock outstanding during 2020 and the first quarter of 2021, Basic and Diluted EPS were computed using the two-class method, which is a net income (loss) allocation that determines EPS for each class of common stock according to dividends declared and participation rights in undistributed income (loss). Shanda sold the remainder of its preferred stock during the first quarter of 2021 and, therefore, there were no shares of preferred stock outstanding as of March 31, 2021.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

The following table summarizes the weighted-average common stock that were excluded from the Company’s diluted net income (loss) per share computation because their effect would have been anti-dilutive for the periods presented:

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Preferred stock — 17,335,485 873,217 13,174,545
RSUs and PBRSUs — 761,077 3,076,073 184,832
Stock options — 160,382 139,868 228,066
Total — 18,256,944 4,089,158 13,587,443

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

5. Securities Available for Sale

The amortized cost, gross unrealized gains and losses, ~~allowance for~~ credit ~~losses,~~valuation allowance, and fair value of ~~securities~~ available for sale ~~as of September 30, 2021 and December 31, 2020,~~(AFS) securities were as follows:


September 30, 2021		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
March 31, 2022												March 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. agency residential mortgage-backed securities	U.S. agency residential mortgage-backed securities	$	115,691	$	80	$	(1,877)	$	—	$	113,894	U.S. agency residential mortgage-backed securities	$	242,359	$	—	$	(15,224)	$	227,135
Asset-backed senior securities(1)		37,635		73		—		—		37,708
U.S. agency securities												U.S. agency securities	66,455		—		(4,530)		61,925
Commercial mortgage-backed securities	Commercial mortgage-backed securities	28,963		48		(367)		—		28,644		Commercial mortgage-backed securities	30,360		—		(1,942)		28,418
Other asset-backed securities	Other asset-backed securities	27,642		244		(40)		—		27,846		Other asset-backed securities	25,008		78		(489)		24,597
U.S. agency securities		27,943		15		(548)		—		27,410
Asset-backed senior securities												Asset-backed senior securities	21,868		36		—		21,904
CLUB Certificate asset-backed securities~~(1)~~	CLUB Certificate asset-backed securities~~(1)~~	21,520		2,672		(16)		—		24,176		CLUB Certificate asset-backed securities~~(1)~~	10,016		3,418		—		13,434
Asset-backed subordinated securities~~(1)~~	Asset-backed subordinated securities~~(1)~~	5,836		6,070		—		(96)		11,810		Asset-backed subordinated securities~~(1)~~	3,586		6,446		—		10,032
Municipal securities	Municipal securities	3,302		—		(60)		—		3,242		Municipal securities	3,292		—		(420)		2,872
Other securities		200		—		—		—		200
Total securities available for sale(2)		$	268,732	$	9,202	$	(2,908)	$	(96)	$	274,930

Total securities available for sale (1)(2)												Total securities available for sale (1)(2)	$	402,944	$	9,978	$	(22,605)	$	390,317

December 31, 2020 Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Allowance for Credit Losses Fair
Value
Asset-backed senior securities(1)
$ 75,332 $ 67 $ (27) $ — $ 75,372
CLUB Certificate asset-backed securities(1)
54,525 576 (772) (4,190) 50,139
Asset-backed subordinated securities(1)
29,107 2,128 (174) (14,546) 16,515
Other securities 200 — — — 200
Total securities available for sale(2)
$ 159,164 $ 2,771 $ (973) $ (18,736) $ 142,226


December 31, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. agency residential mortgage-backed securities	$	125,985	$	—	$	(2,286)	$	123,699
Asset-backed senior securities	28,057		72		—		28,129
U.S. agency securities	26,902		1		(731)		26,172
Other asset-backed securities	26,112		151		(130)		26,133
Commercial mortgage-backed securities	26,649		1		(552)		26,098
CLUB Certificate asset-backed securities	15,049		3,236		—		18,285
Asset-backed subordinated securities	4,119		7,643		—		11,762






Municipal securities	3,297		—		(45)		3,252
Total securities available for sale (1)(2)	$	256,170	$	11,104	$	(3,744)	$	263,530

(1) As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, $39.0~~2021, $0.7 million and ~~$119.3~~$13.3 million, respectively, of the asset-backed securities related to Structured Program transactions at fair value are subject to restrictions on transfer pursuant to the Company's obligations as a “sponsor” under the U.S. Risk Retention Rules.

(2) As of ~~September 30, 2021,~~March 31, 2022 and December 31, ~~2020,~~2021, includes ~~$248.9~~$361.7 million and ~~$133.5~~$236.8 million, respectively, of securities pledged as collateral at fair value.

The Company’s securities available for sale portfolio includes debt securities primarily obtained in the first quarter of 2021 upon its acquisition of Radius and asset-backed securities related to the Company’s Structured Program transactions. The Company’s Structured Program transactions included (i) asset-backed securitization transactions and (ii) Certificate Program transactions. Certificate Program transactions included CLUB Certificate and Levered Certificate transactions.

The Company sponsored the sale of unsecured personal loans through the issuance of certificate securities under its Certificate Program. The CLUB Certificate issued securities retained by the Company are presented as “CLUB Certificate asset-backed securities” in the securities available for sale tables below. The Levered Certificate issued senior and subordinated securities retained by the Company are presented in aggregate with securities from asset-

2814

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

backed securitizations as “Asset-backed senior securities” and “Asset-backed subordinated securities,” respectively, in the tables below. The “Other asset-backed securities” caption in the tables below primarily includes investment-grade rated bonds that are collateralized by student loan receivables and small business association loans.

A summary of AFS securities ~~available for sale~~ with unrealized losses for which ana credit valuation allowance ~~for credit losses~~ has not been recorded, ~~as of September 30, 2021 and December 31, 2020,~~ aggregated by period of continuous unrealized loss, is as follows:


		Less than 12 months				12 months or longer				Total					Less than 12 months				12 months or longer				Total
September 30, 2021		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2022														March 31, 2022	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. agency residential mortgage-backed securities	U.S. agency residential mortgage-backed securities	$	100,063	$	(1,877)	$	—	$	—	$	100,063	$	(1,877)	U.S. agency residential mortgage-backed securities	$	190,822	$	(11,168)	$	36,313	$	(4,056)	$	227,135	$	(15,224)
Asset-backed securities related to Structured Program transactions		—		—		1,583		(16)		1,583		(16)
U.S. agency securities														U.S. agency securities	49,880		(2,674)		9,045		(1,856)		58,925		(4,530)

Commercial mortgage-backed securities														Commercial mortgage-backed securities	12,823		(928)		12,609		(1,014)		25,432		(1,942)
Other asset-backed securities	Other asset-backed securities	6,142		(40)		—		—		6,142		(40)		Other asset-backed securities	16,552		(382)		2,743		(107)		19,295		(489)
Commercial mortgage-backed securities		25,783		(367)		—		—		25,783		(367)
U.S. agency securities		14,377		(548)		—		—		14,377		(548)
Municipal securities	Municipal securities	3,242		(60)		—		—		3,242		(60)		Municipal securities	2,730		(404)		142		(16)		2,872		(420)
Total securities with unrealized losses(1)	Total securities with unrealized losses(1)	$	149,607	$	(2,892)	$	1,583	$	(16)	$	151,190	$	(2,908)	Total securities with unrealized losses(1)	$	272,807	$	(15,556)	$	60,852	$	(7,049)	$	333,659	$	(22,605)

		Less than 12 months				12 months or longer				Total					Less than 12 months				12 months or longer				Total
December 31, 2020		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Asset-backed securities related to Structured Program transactions		$	26,678	$	(855)	$	6,052	$	(118)	$	32,730	$	(973)
December 31, 2021														December 31, 2021	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. agency residential mortgage-backed securities														U.S. agency residential mortgage-backed securities	$	123,668	$	(2,286)	$	—	$	—	$	123,668	$	(2,286)
U.S. agency securities														U.S. agency securities	24,175		(731)		—		—		24,175		(731)
Other asset-backed securities														Other asset-backed securities	13,224		(130)		—		—		13,224		(130)
Commercial mortgage-backed securities														Commercial mortgage-backed securities	25,927		(552)		—		—		25,927		(552)
Municipal securities														Municipal securities	3,252		(45)		—		—		3,252		(45)
Total securities with unrealized losses(1)	Total securities with unrealized losses(1)	$	26,678	$	(855)	$	6,052	$	(118)	$	32,730	$	(973)	Total securities with unrealized losses(1)	$	190,246	$	(3,744)	$	—	$	—	$	190,246	$	(3,744)

(1) The number of investment positions with unrealized losses at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 totaled ~~118~~206 and ~~55,~~145, respectively.

During the third quarter and first nine months of 2020, the Company recorded an allowance for credit loss on those securities where there was a deterioration in future estimated cash flows. The Company also recorded unrealized losses on securities with fair value price reductions due to higher liquidity premiums observed due to the market dislocation related to COVID-19. In the third quarter and first nine months of 2021, the Company deemed it not necessary to record unrealized losses as an allowance for credit loss for certain securities due to the nature of those securities and their investment grade quality.

During the third quarter and first nine months of 2021, the Company recognized $0.5 million and $3.3 million in credit recovery, respectively. During the third quarter and first nine months of 2020, the Company recognized $3.7 million in credit recovery and $3.8 million in credit loss expense, respectively.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

The following table presents the activity in the allowance for ~~credit losses for~~AFS securities, ~~available for sale,~~ by major security type, ~~for the third quarters and first nine months of 2021 and 2020:~~

Allowance for Credit Losses CLUB Certificate asset-backed securities Asset-backed subordinated securities Total
Beginning balance as of June 30, 2021 $ (40) $ (552) $ (592)
Reversal of credit loss expense 40 456 496
Ending balance as of September 30, 2021 $ — $ (96) $ (96)
Allowance for Credit Losses CLUB Certificate asset-backed securities Asset-backed subordinated securities Total
Beginning balance as of December 31, 2020 $ (4,190) $ (14,546) $ (18,736)
Reversal of credit loss expense 236 3,052 3,288
Reversal of allowance from PCD financial assets 3,954 11,398 15,352
Ending balance as of September 30, 2021 $ — $ (96) $ (96)

Allowance for Credit Losses CLUB Certificate asset-backed securities Asset-backed subordinated securities Total
Beginning balance as of June 30, 2020 $ (6,587) $ (8,984) $ (15,571)
Reversal of credit loss expense 2,087 1,582 3,669
Allowance arising from PCD financial assets — (5,640) (5,640)
Ending balance as of September 30, 2020 $ (4,500) $ (13,042) $ (17,542)
Allowance for Credit Losses CLUB Certificate asset-backed securities Asset-backed subordinated securities Total
Beginning balance as of January 1, 2020 $ — $ — $ —
Provision for credit loss expense (546) (3,254) (3,800)
Allowance arising from PCD financial assets (3,954) (9,788) (13,742)
Ending balance as of September 30, 2020 $ (4,500) $ (13,042) $ (17,542)

~~Securities available for sale purchased with credit deterioration~~ during the ~~third~~first quarter ~~and first nine months~~ of ~~2020 were as follows:~~2021:

Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020
Purchase price of PCD securities at acquisition $ 446 $ 25,915
Allowance for credit losses on PCD securities at acquisition 5,640 13,742
Par value of acquired PCD securities at acquisition $ 6,086 $ 39,657








Credit Valuation Allowance	CLUB Certificate asset-backed securities		Asset-backed subordinated securities		Total
Balance at December 31, 2020	$	(4,190)	$	(14,546)	$	(18,736)
Reversal of credit loss expense	188		2,282		2,470
Reversal of allowance arising from PCD financial assets	3,954		11,398		15,352
Balance at March 31, 2021	$	(48)	$	(866)	$	(914)

There ~~were~~was no ~~securities available~~activity in the allowance for ~~sale purchased with credit deterioration~~AFS securities during the ~~third~~first quarter ~~and first nine months~~ of ~~2021.~~

2022.

3015

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

The contractual maturities of AFS securities ~~available for sale at September 30, 2021,~~ were as follows:


March 31, 2022								March 31, 2022	Amortized Cost		Fair Value		Weighted- average Yield(1)

		Amortized Cost		Fair Value		Weighted- average Yield(1)

Due within 1 year:
Other securities		$	200	$	200
Total due within 1 year		200		200		0.02	%

Due after 5 years through 10 years:	Due after 5 years through 10 years:							Due after 5 years through 10 years:
U.S. agency residential mortgage-backed securities	U.S. agency residential mortgage-backed securities	394		394				U.S. agency residential mortgage-backed securities	$	682	$	643
Other asset-backed securities	Other asset-backed securities	926		944				Other asset-backed securities	923		936
Commercial mortgage-backed securities	Commercial mortgage-backed securities	4,273		4,185				Commercial mortgage-backed securities	4,136		3,778
U.S. agency securities	U.S. agency securities	4,023		4,024				U.S. agency securities	6,848		6,527
Municipal securities	Municipal securities	470		462				Municipal securities	627		562
Total due after 5 years through 10 years	Total due after 5 years through 10 years	10,086		10,009		0.99	%	Total due after 5 years through 10 years	13,216		12,446		2.00	%
Due after 10 years:	Due after 10 years:							Due after 10 years:
U.S. agency residential mortgage-backed securities	U.S. agency residential mortgage-backed securities	115,297		113,500				U.S. agency residential mortgage-backed securities	241,677		226,492
Other asset-backed securities	Other asset-backed securities	26,716		26,902				Other asset-backed securities	24,085		23,661
Commercial mortgage-backed securities	Commercial mortgage-backed securities	24,690		24,459				Commercial mortgage-backed securities	26,224		24,640
U.S. agency securities	U.S. agency securities	23,920		23,386				U.S. agency securities	59,607		55,398
Municipal securities	Municipal securities	2,832		2,780				Municipal securities	2,665		2,310
Total due after 10 years	Total due after 10 years	193,455		191,027		1.54	%	Total due after 10 years	354,258		332,501		2.11	%
Asset-backed securities related to Structured Program transactions	Asset-backed securities related to Structured Program transactions	64,991		73,694		13.40	%	Asset-backed securities related to Structured Program transactions	35,470		45,370		29.34	%
Total securities available for sale	Total securities available for sale	$	268,732	$	274,930	4.39	%	Total securities available for sale	$	402,944	$	390,317	4.50	%

(1) The weighted-average yield is computed using the amortized cost at ~~September 30, 2021.~~March 31, 2022.

Proceeds and gross realized gains and losses from ~~sales~~AFS securities during the first quarter of ~~securities available for sale~~2021 were as follows:

Nine Months Ended
September 30,
2021 2020
Proceeds $ 106,192 $ 2,396
Gross realized gains $ 708 $ 3
Gross realized losses $ (952) $ (4)


Proceeds	$	106,192
Gross realized gains	$	708
Gross realized losses	$	(952)

~~The~~There were no sales of AFS securities ~~available for sale~~ during the ~~third quarters~~first quarter of 2021 and 2020. There were no Structured Program transactions in the third quarter and first nine months of 2021. During the third quarter and first nine months of 2020, the Company and Consumer Loan Underlying Bond Depositor LLC (Depositor), a subsidiary of the Company, sold a combined $0.2 billion and $1.3 billion, respectively, in asset-backed securities related to Structured Program transactions. There were no realized gains or losses related to such sales. For further information, see “~~Note 8. Fair Value of Assets and Liabilities~~.”

2022.

3116

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

6.5. Loans and Leases Held for Investment, Net of Allowance For Loan and Lease Losses

~~As a result of the acquisition of Radius and becoming a bank holding company,~~ LendingClub ~~now~~ records certain loans and leases held for investment (HFI) at amortized cost, ~~and,~~whereas loans initially classified as held for sale ~~at fair value. Prior to the acquisition, all loans were~~(HFS) are recorded at fair value. ~~Therefore, the following disclosures apply to loans and leases held for investment at amortized cost.~~

Accrued interest receivable is excluded from the amortized cost basis of loans and leases ~~held for investment~~HFI and is reported within “Other assets” on the ~~Company’s Condensed Consolidated~~ Balance ~~Sheets.~~Sheet. Accrued interest within that caption related to loans and leases ~~held for investment~~HFI was ~~$12.2~~$17.0 million and $15.6 million as of ~~September 30, 2021.~~March 31, 2022 and December 31, 2021, respectively.

Loans and Leases Held for Investment

The Company defines its loans and leases ~~held for investment~~HFI portfolio segments as (i) consumer and (ii) commercial. The following ~~table presents~~tables present the components of each portfolio segment by class of financing receivable:


	~~September 30, 2021~~
~~Unsecured personal~~	$	~~1,258,279~~
~~Residential mortgages~~	~~141,200~~
~~Secured consumer~~	~~314,539~~
~~Other consumer~~	~~1,220~~
~~Total consumer loans held for investment~~	~~1,715,238~~
~~Equipment finance~~ ~~(1)~~	~~157,457~~
~~Commercial real estate~~	~~316,135~~
~~Commercial and industrial~~ ~~(2)~~	~~519,162~~
~~Total commercial loans and leases held for investment~~	~~992,754~~
~~Total loans and leases held for investment~~	~~2,707,992~~
~~Allowance for loan and lease losses (ALLL)~~	~~(104,736)~~
~~Loans and leases held for investment, net~~ ~~(3)~~	$	~~2,603,256~~


	March 31, 2022		December 31, 2021
Unsecured personal	$	2,358,792	$	1,804,578
Residential mortgages	169,117		151,362
Secured consumer	93,600		65,976

Total consumer loans held for investment	2,621,509		2,021,916
Equipment finance (1)	143,780		149,155
Commercial real estate	313,710		310,399
Commercial and industrial (2)	343,297		417,656
Total commercial loans and leases held for investment	800,787		877,210
Total loans and leases held for investment	3,422,296		2,899,126
Allowance for loan and lease losses	(187,985)		(144,389)
Loans and leases held for investment, net (3)	$	3,234,311	$	2,754,737

(1) Comprised of sales-type leases for equipment. See “Note ~~17.~~16. Leases” for additional information.

(2) Includes ~~$367.6~~$185.0 million and $268.3 million of pledged loans under the Paycheck Protection Program (PPP)~~. PPP loans are guaranteed by the SBA~~ as of March 31, 2022 and ~~therefore, the Company determined no allowance for expected credit losses is required on these loans.~~December 31, 2021, respectively.

(3) As of ~~September 30,~~March 31, 2022 and December 31, 2021, the Company had ~~$391.5~~$164.1 million and $149.2 million in loans pledged as collateral under the ~~FRB~~Federal Reserve Bank (FRB) Discount ~~Window.~~Window, respectively.


		September 30, 2021
		Gross		ALLL		Net		Allowance Ratios (1)
March 31, 2022										March 31, 2022	Gross		ALLL		Net		Allowance Ratios (1)
Total consumer loans held for investment	Total consumer loans held for investment	$	1,715,238	$	88,631	$	1,626,607	5.2	%	Total consumer loans held for investment	$	2,621,509	$	173,857	$	2,447,652	6.6	%
Total commercial loans and leases held for investment (2)	Total commercial loans and leases held for investment (2)	992,754		16,105		976,649		1.6	%	Total commercial loans and leases held for investment (2)	800,787		14,128		786,659		1.8	%
Total loans and leases held for investment (2)	Total loans and leases held for investment (2)	$	2,707,992	$	104,736	$	2,603,256	3.9	%	Total loans and leases held for investment (2)	$	3,422,296	$	187,985	$	3,234,311	5.5	%


December 31, 2021	Gross		ALLL		Net		Allowance Ratios (1)
Total consumer loans held for investment	$	2,021,916	$	128,812	$	1,893,104	6.4	%
Total commercial loans and leases held for investment (2)	877,210		15,577		861,633		1.8	%
Total loans and leases held for investment (2)	$	2,899,126	$	144,389	$	2,754,737	5.0	%

(1) Calculated as the ratio of ~~ALLL~~allowance for loan and lease losses (ALLL) to loans and leases ~~held for investment.~~HFI.

(2) ~~Excluding~~As of March 31, 2022, excluding the $185.0 million of PPP loans, ~~mentioned above,~~the ALLL represented 2.3% of commercial loans and leases HFI and 5.8% of total loans and leases HFI. As of December 31, 2021, excluding $268.3 million of PPP loans, the ALLL represented 2.6% of commercial loans and leases ~~held for investment~~HFI and ~~4.5%~~5.5% of total loans and leases ~~held for investment.~~

HFI. PPP loans are guaranteed by the Small Business Administration (SBA) and, therefore, the Company determined no ACL is required on these loans.

3217

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

The activity in the ~~allowance for expected credit losses~~ACL by portfolio segment ~~for the third quarter and first nine months of 2021~~ was as follows:


															Three Months Ended March 31,
		Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021							2022						2021
		Consumer		Commercial		Total		Consumer		Commercial		Total			Consumer		Commercial		Total		Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	Allowance for loan and lease losses, beginning of period	$	54,058	$	17,023	$	71,081	$	—	$	—	$	—	Allowance for loan and lease losses, beginning of period	$	128,812	$	15,577	$	144,389	$	—	$	—	$	—
Credit loss expense for loans and leases held for investment		37,695		(562)		37,133		91,194		4,468		95,662
Initial allowance for PCD loans acquired during the period (1)		—		—		—		603		11,837		12,440
Charge-offs		(3,142)		(1,194)		(4,336)		(3,232)		(1,350)		(4,582)
Credit loss expense for loans and leases held for investment (1)														Credit loss expense for loans and leases held for investment (1)	53,718		(1,490)		52,228		19,182		4,371		23,553
Initial allowance for PCD loans acquired during the period (2)														Initial allowance for PCD loans acquired during the period (2)	—		—		—		603		11,837		12,440
Charge-offs (3)														Charge-offs (3)	(9,017)		(72)		(9,089)		—		—		—
Recoveries	Recoveries	20		838		858		66		1,150		1,216		Recoveries	344		113		457		—		139		139
Allowance for loan and lease losses, end of period	Allowance for loan and lease losses, end of period	$	88,631	$	16,105	$	104,736	$	88,631	$	16,105	$	104,736	Allowance for loan and lease losses, end of period	$	173,857	$	14,128	$	187,985	$	19,785	$	16,347	$	36,132

Reserve for unfunded lending commitments, beginning of period	Reserve for unfunded lending commitments, beginning of period	$	—	$	390	$	390	$	—	$	—	$	—	Reserve for unfunded lending commitments, beginning of period	$	—	$	1,231	$	1,231	$	—	$	—	$	—
Credit loss expense for unfunded lending commitments	Credit loss expense for unfunded lending commitments	50		837		887		50		1,227		1,277		Credit loss expense for unfunded lending commitments	—		281		281		6		404		410
Reserve for unfunded lending commitments, end of period (2)		$	50	$	1,227	$	1,277	$	50	$	1,227	$	1,277
Reserve for unfunded lending commitments, end of period (4)														Reserve for unfunded lending commitments, end of period (4)	$	—	$	1,512	$	1,512	$	6	$	404	$	410

(1)Includes $6.9 million of credit loss expense for Radius loans at Acquisition for the first quarter of 2021.

(2) For acquired PCD loans, an ~~allowance~~ACL of $30.4 million was required with a corresponding increase to the amortized cost basis as of the acquisition ~~date.~~date for the first quarter of 2021. For PCD loans where all or a portion of the loan balance had been previously written-off, or would be subject to write-off under the Company’s charge-off policy, ~~a CECL allowance~~an ACL of $18.0 million included as part of the grossed-up loan balance at ~~acquisition~~Acquisition was immediately ~~written-off.~~written-off during the first quarter of 2021. The net impact to the allowance for PCD assets on the acquisition date was $12.4 ~~million.~~

~~(2)~~ ~~Relates to $115.5~~ million ~~of unfunded commitments.~~

~~The Company did not recognize an allowance~~ for ~~loan and lease losses as of December 31, 2020 because it did not carry loans held for investment at amortized cost as of that date. During~~ the first quarter of ~~2021, as~~2021.

(3) Unsecured personal loans are charged-off when a ~~result~~borrower is (i) contractually 120 days past due or (ii) two payments past due and has filed for bankruptcy or is deceased.

(4) Relates to $109.5 million and $98.3 million of ~~the Radius acquisition, the Company acquired and began originating loans held for investment at amortized cost. The allowance for loan and lease losses balance~~unfunded commitments as of ~~September 30,~~March 31, 2022 and 2021, ~~relates to the recognition of expected credit losses on these purchased and originated loans.~~respectively.

3318

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Consumer Lending Credit Quality Indicators

The Company evaluates the credit quality of its consumer loan portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is based upon borrower payment activity relative to the contractual terms of the loan. The following ~~table presents~~tables present the classes of financing receivables within the consumer portfolio segment by credit quality indicator based on delinquency status ~~as of September 30, 2021~~ and origination year:


September 30, 2021		Term Loans and Leases by Origination Year
March 31, 2022																		March 31, 2022	Term Loans and Leases by Origination Year
		2021		2020		2019		2018		2017		Prior		Within Revolving Period		Total			2022		2021		2020		2019		2018		Prior		Within Revolving Period		Total
Unsecured personal	Unsecured personal																	Unsecured personal
Current	Current	$	1,255,020	$	—	$	—	$	—	$	—	$	—	$	—	$	1,255,020	Current	$	777,710	$	1,566,687	$	—	$	—	$	—	$	—	$	—	$	2,344,397
30-59 days past due	30-59 days past due	1,806		—		—		—		—		—		—		1,806		30-59 days past due	617		5,902		—		—		—		—		—		6,519
60-89 days past due	60-89 days past due	849		—		—		—		—		—		—		849		60-89 days past due	—		4,783		—		—		—		—		—		4,783
90 or more days past due	90 or more days past due	604		—		—		—		—		—		—		604		90 or more days past due	—		3,093		—		—		—		—		—		3,093
Total unsecured personal	Total unsecured personal	1,258,279		—		—		—		—		—		—		1,258,279		Total unsecured personal	778,327		1,580,465		—		—		—		—		—		2,358,792
Residential mortgages	Residential mortgages																	Residential mortgages
Current	Current	17,210		40,108		28,246		7,848		2,700		41,889		1,266		139,267		Current	4,730		60,715		34,104		24,031		5,024		38,573		1,264		168,441
30-59 days past due	30-59 days past due	—		—		—		—		—		—		—		—		30-59 days past due	—		—		—		—		—		—		—		—
60-89 days past due	60-89 days past due	—		—		—		—		93		—		—		93		60-89 days past due	—		—		—		—		—		92		—		92
90 or more days past due	90 or more days past due	—		—		—		674		251		915		—		1,840		90 or more days past due	—		—		—		—		—		584		—		584
Total residential mortgages	Total residential mortgages	17,210		40,108		28,246		8,522		3,044		42,804		1,266		141,200		Total residential mortgages	4,730		60,715		34,104		24,031		5,024		39,249		1,264		169,117
Secured consumer	Secured consumer																	Secured consumer
Current	Current	163,820		49,328		36,903		37,062		5,008		16,483		—		308,604		Current	27,301		56,289		—		2,602		—		4,005		11		90,208
30-59 days past due	30-59 days past due	46		—		—		—		—		—		—		46		30-59 days past due	—		293		—		—		—		—		—		293
60-89 days past due	60-89 days past due	—		—		—		2,401		—		—		—		2,401		60-89 days past due	—		74		—		—		—		—		—		74
90 or more days past due	90 or more days past due	—		—		—		3,106		382		—		—		3,488		90 or more days past due	—		17		—		—		2,627		381		—		3,025
Total secured consumer	Total secured consumer	163,866		49,328		36,903		42,569		5,390		16,483		—		314,539		Total secured consumer	27,301		56,673		—		2,602		2,627		4,386		11		93,600
Other consumer
Current		1,208		—		—		—		—		—		12		1,220
30-59 days past due		—		—		—		—		—		—		—		—
60-89 days past due		—		—		—		—		—		—		—		—
90 or more days past due		—		—		—		—		—		—		—		—
Total other consumer		1,208		—		—		—		—		—		12		1,220

Total consumer loans held for investment	Total consumer loans held for investment	$	1,440,563	$	89,436	$	65,149	$	51,091	$	8,434	$	59,287	$	1,278	$	1,715,238	Total consumer loans held for investment	$	810,358	$	1,697,853	$	34,104	$	26,633	$	7,651	$	43,635	$	1,275	$	2,621,509

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)


December 31, 2021	Term Loans and Leases by Origination Year
	2021		2020		2019		2018		2017		Prior		Within Revolving Period		Total
Unsecured personal
Current	$	1,796,678	$	—	$	—	$	—	$	—	$	—	$	—	$	1,796,678
30-59 days past due	3,624		—		—		—		—		—		—		3,624
60-89 days past due	2,600		—		—		—		—		—		—		2,600
90 or more days past due	1,676		—		—		—		—		—		—		1,676
Total unsecured personal	1,804,578		—		—		—		—		—		—		1,804,578
Residential mortgages
Current	36,732		37,620		26,798		7,277		2,682		37,685		1,265		150,059
30-59 days past due	—		—		—		—		—		142		—		142
60-89 days past due	—		—		—		—		92		—		—		92
90 or more days past due	—		—		—		—		251		818		—		1,069
Total residential mortgages	36,732		37,620		26,798		7,277		3,025		38,645		1,265		151,362
Secured consumer
Current	62,731		—		—		—		—		—		10		62,741
30-59 days past due	171		—		—		—		—		—		—		171
60-89 days past due	53		—		—		—		—		—		—		53
90 or more days past due	—		—		—		2,629		382		—		—		3,011
Total secured consumer	62,955		—		—		2,629		382		—		10		65,976






Total consumer loans held for investment	$	1,904,265	$	37,620	$	26,798	$	9,906	$	3,407	$	38,645	$	1,275	$	2,021,916

Commercial Lending Credit Quality Indicators

The Company evaluates the credit quality of its commercial loan portfolio based on regulatory risk ratings. The Company categorizes loans and leases into risk ratings based on relevant information about the quality and realizable value of collateral, if any, and the ability of borrowers to service their debts, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans and leases individually by classifying the loans and leases based on their associated credit risk and performs this analysis whenever credit is extended, renewed or modified, or when an observable event occurs indicating a potential decline in credit quality, and no less than annually for large balance loans. Risk rating classifications consist of the following:

Pass – Loans and leases that the Company believes will fully repay in accordance with the contractual loan terms.

Special Mention – Loans and leases with a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the Company’s credit position at some future date.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Substandard – Loans and leases that are inadequately protected by the current sound worth and paying capacity of the obligator or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or weaknesses that jeopardize the repayment and liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Normal payment from the borrower is in jeopardy, although loss of principal, while still possible, is not imminent.

Doubtful – Loans and leases that have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

~~The following table presents the classes of financing receivables within the commercial portfolio segment by risk rating as of September 30, 2021 and origination year:~~

September 30, 2021 Term Loans and Leases by Origination Year
2021 2020 2019 2018 2017 Prior Within Revolving Period Total
Equipment finance
Pass $ 45,557 $ 38,074 $ 31,501 $ 18,807 $ 7,069 $ 12,245 $ — $ 153,253
Special mention 1,583 — 1,877 — — — — 3,460
Substandard — — — 744 — — — 744
Doubtful — — — — — — — —
Loss — — — — — — — —
Total equipment finance 47,140 38,074 33,378 19,551 7,069 12,245 — 157,457
Commercial real estate
Pass 39,315 56,981 67,376 43,745 23,042 52,324 3,682 286,465
Special mention — 8,372 — 1,369 1,032 10,506 — 21,279
Substandard — — 278 2,488 651 4,397 — 7,814
Doubtful — — — — — — — —
Loss — — — — — 577 — 577
Total commercial real estate 39,315 65,353 67,654 47,602 24,725 67,804 3,682 316,135
Commercial and industrial
Pass 277,968 166,667 26,858 8,283 17,604 8,431 628 506,439
Special mention — — 2,256 650 554 40 — 3,500
Substandard — 1,121 999 2,590 1,579 1,722 93 8,104
Doubtful — — — — — — — —
Loss — — — 52 4 1,063 — 1,119
Total commercial and industrial (1)
277,968 167,788 30,113 11,575 19,741 11,256 721 519,162
Total commercial loans and leases held for investment 364,423 271,215 131,145 78,728 51,535 91,305 4,403 992,754

~~(1)~~ Loss~~Includes $367.6 million of PPP loans.~~

~~The following table presents an analysis of the past-due loans~~ – Loans and leases ~~held for investment within the commercial portfolio segment at September 30, 2021:~~

September 30, 2021 Days Past Due
Current-29 30-59 60-89 90 or more Total
Equipment finance $ 157,457 $ — $ — $ — $ 157,457
Commercial real estate 315,355 163 143 474 316,135
Commercial and industrial (1)
440,932 222 76,645 1,363 519,162
Total commercial loans and leases held for investment $ 913,744 $ 385 $ 76,788 $ 1,837 $ 992,754

~~(1)~~ ~~Includes $367.6 million~~that are considered uncollectible and of ~~PPP loans. The past due loans consist of PPP loans and are guaranteed by the SBA.~~little value.

3520

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

The following tables present the classes of financing receivables within the commercial portfolio segment by risk rating and origination year:


March 31, 2022	Term Loans and Leases by Origination Year
	2022		2021		2020		2019		2018		Prior		Within Revolving Period		Total
Equipment finance
Pass	$	6,913	$	51,075	$	33,129	$	26,302	$	14,550	$	11,349	$	—	$	143,318
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		462		—		—		462
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total equipment finance	6,913		51,075		33,129		26,302		15,012		11,349		—		143,780
Commercial real estate
Pass	14,191		51,307		55,126		53,599		39,446		74,275		—		287,944
Special mention	—		—		8,458		—		1,362		2,265		—		12,085
Substandard	—		—		—		271		2,503		10,350		—		13,124
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		557		—		557
Total commercial real estate	14,191		51,307		63,584		53,870		43,311		87,447		—		313,710
Commercial and industrial
Pass	12,402		199,717		67,396		19,613		6,568		20,262		641		326,599
Special mention	—		200		2,257		2,287		171		1,243		—		6,158
Substandard	—		—		1,123		3,796		2,052		2,121		80		9,172
Doubtful	—		—		—		—		—		293		—		293
Loss	—		—		—		—		7		1,068		—		1,075
Total commercial and industrial (1)	12,402		199,917		70,776		25,696		8,798		24,987		721		343,297
Total commercial loans and leases held for investment	$	33,506	$	302,299	$	167,489	$	105,868	$	67,121	$	123,783	$	721	$	800,787

(1) Includes $185.0 million of PPP loans.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)


December 31, 2021	Term Loans and Leases by Origination Year
	2021		2020		2019		2018		2017		Prior		Within Revolving Period		Total
Equipment finance
Pass	$	52,440	$	35,398	$	26,918	$	15,457	$	6,184	$	8,814	$	—	$	145,211
Special mention	1,531		—		1,810		—		—		—		—		3,341
Substandard	—		—		—		603		—		—		—		603
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total equipment finance	53,971		35,398		28,728		16,060		6,184		8,814		—		149,155
Commercial real estate
Pass	55,613		55,202		54,460		39,981		22,366		57,235		—		284,857
Special mention	—		8,397		—		1,366		1,018		7,242		—		18,023
Substandard	—		—		277		2,496		—		4,179		—		6,952
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		��		—		—		567		—		567
Total commercial real estate	55,613		63,599		54,737		43,843		23,384		69,223		—		310,399
Commercial and industrial
Pass	241,368		108,574		24,106		7,874		14,756		8,058		599		405,335
Special mention	—		—		2,207		463		1,467		40		—		4,177
Substandard	—		1,122		862		1,858		1,525		1,571		87		7,025
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		52		4		1,063		—		1,119
Total commercial and industrial (1)	241,368		109,696		27,175		10,247		17,752		10,732		686		417,656
Total commercial loans and leases held for investment	$	350,952	$	208,693	$	110,640	$	70,150	$	47,320	$	88,769	$	686	$	877,210

(1) Includes $268.3 million of PPP loans.

The following tables present an analysis of the past due loans and leases HFI within the commercial portfolio segment:


March 31, 2022	30-59 Days		60-89 Days		90 or More Days		Total Days Past Due
Equipment finance	$	3,223	$	—	$	—	$	3,223
Commercial real estate	—		104		600		704
Commercial and industrial (1)	—		3		1,361		1,364
Total commercial loans and leases held for investment	$	3,223	$	107	$	1,961	$	5,291


December 31, 2021	30-59 Days		60-89 Days		90 or More Days		Total Days Past Due
Equipment finance	$	—	$	—	$	—	$	—
Commercial real estate	104		—		609		713
Commercial and industrial (1)	—		—		1,410		1,410
Total commercial loans and leases held for investment	$	104	$	—	$	2,019	$	2,123

(1) Past due PPP loans are excluded from the tables.

Nonaccrual Assets

Nonaccrual loans and leases are those for which accrual of interest has been suspended. Loans and leases are generally placed on nonaccrual status when contractually past due 90 days or more, or earlier if management

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

believes that the probability of collection does not warrant further ~~accrual.~~accrual, and are charged-off no later than 120 days past due.

The following table presents nonaccrual loans and ~~leases as of September 30, 2021:~~leases:


		September 30, 2021				March 31, 2022	December 31, 2021
		Nonaccrual(1)		Nonaccrual with no related ACL(2)					Nonaccrual(1)		Nonaccrual with no related ACL(2)		Nonaccrual(1)		Nonaccrual with no related ACL(2)
Unsecured personal	Unsecured personal	$	604	$	—			Unsecured personal	$	3,093	$	—	$	1,676	$	—
Residential mortgages	Residential mortgages	2,106		2,106				Residential mortgages	875		875		1,373		1,373
Secured consumer	Secured consumer	5,888		382				Secured consumer	3,025		3,008		3,011		3,011
Other consumer		—		—

Total nonaccrual consumer loans held for investment	Total nonaccrual consumer loans held for investment	8,598		2,488				Total nonaccrual consumer loans held for investment	6,993		3,883		6,060		4,384

Equipment finance	Equipment finance	744		—				Equipment finance	462		—		603		—
Commercial real estate	Commercial real estate	1,219		1,219				Commercial real estate	1,079		975		989		989
Commercial and industrial	Commercial and industrial	1,415		1,067				Commercial and industrial	2,726		1,062		2,333		1,061
Total nonaccrual commercial loans and leases held for investment	Total nonaccrual commercial loans and leases held for investment	3,378		2,286				Total nonaccrual commercial loans and leases held for investment	4,267		2,037		3,925		2,050

Total nonaccrual loans and leases held for investment	Total nonaccrual loans and leases held for investment	$	11,976	$	4,774			Total nonaccrual loans and leases held for investment	$	11,260	$	5,920	$	9,985	$	6,434

(1) ~~There~~Excluding PPP loans, there were no loans and leases that were 90 days or more past due and accruing as of ~~September 30,~~both March 31, 2022 and December 31, 2021.

(2) Subset of total nonaccrual loans and leases.


		September 30, 2021				March 31, 2022		December 31, 2021
		Nonaccrual		Nonaccrual Ratios (1)				Nonaccrual		Nonaccrual Ratios (1)		Nonaccrual		Nonaccrual Ratios (1)
Total nonaccrual consumer loans held for investment	Total nonaccrual consumer loans held for investment	$	8,598	0.5	%		Total nonaccrual consumer loans held for investment	$	6,993	0.27	%	$	6,060	0.30	%
Total nonaccrual commercial loans and leases held for investment	Total nonaccrual commercial loans and leases held for investment	3,378		0.3	%		Total nonaccrual commercial loans and leases held for investment	4,267		0.53	%	3,925		0.45	%
Total nonaccrual loans and leases held for investment ~~(3)~~(2)	Total nonaccrual loans and leases held for investment ~~(3)~~(2)	$	11,976	0.4	%		Total nonaccrual loans and leases held for investment ~~(3)~~(2)	$	11,260	0.33	%	$	9,985	0.34	%

(1) Calculated as the ratio of nonaccruing loans and leases to loans and leases ~~held for investment.~~HFI.

(2)~~The allowance for loan and lease losses represented 875% of nonaccrual loans and leases as of September 30, 2021.~~

~~(3)~~ Nonaccruing loans and leases represented ~~0.5%~~0.35% and 0.38% of total loans and leases ~~held for investment,~~HFI, excluding PPP ~~loans.~~loans, as of March 31, 2022 and December 31, 2021, respectively.

Collateral-Dependent Assets

Certain loans on non-accrual status and certain TDR loans may be considered collateral-dependent loans if the borrower is experiencing financial difficulty and repayment of the loan is expected to be substantially through sale or operation of the collateral. Expected credit losses for the Company’s collateral-dependent loans are calculated as the difference between the amortized cost basis and the fair value of the underlying collateral less costs to sell, if applicable. ~~See “Note 1. Summary of Significant Accounting Policies” for further detail.~~

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Purchased Financial Assets with Credit Deterioration

Acquired loans are recorded at their fair value, which may result in the recognition of a discount or premium. In addition, the purchase price of PCD loans is grossed-up upon acquisition for the initial estimate of expected credit losses. For acquired PCD loans for which all or a portion of the balance was previously written off, or was required to be written off under LendingClub’s charge-off policy upon acquisition, the expected credit loss included in the grossed-up loan balance was immediately charged off.ACL. Subsequent changes to the ~~allowance for expected credit losses~~ACLs are recorded as additions to or reversals of credit losses on the ~~Company’s~~ Condensed Consolidated Statements of ~~Operations.~~

~~Acquired PCD loans during the first nine months of 2021 were as follows:~~


	~~Nine Months Ended September 30, 2021~~
~~Purchase price~~	$	~~337,118~~
~~Allowance for expected credit losses~~ ~~(1)~~	~~30,378~~
~~Discount attributable to other factors~~	~~12,204~~
~~Par value~~	$	~~379,700~~

~~(1)~~ For acquired PCD loans, an allowance of $30.4 million was required with a corresponding increase to the amortized cost basis as of the acquisition date. For PCD loans where all or a portion of the loan balance had been previously written-off, or would be subject to write-off under the Company’s charge-off policy, a CECL allowance of $18.0 million included as part of the grossed-up loan balance at acquisition was immediately written-off. The net impact to the allowance for PCD assets on the acquisition date was $12.4 million.Operations (Income Statement).

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~7. Securitizations and Variable Interest Entities~~

~~VIE Assets and Liabilities~~

The following tables provide the classifications of assets and liabilities on the Company’s Condensed Consolidated Balance Sheets for its transactions with consolidated and unconsolidated VIEs at September 30, 2021 and December 31, 2020. Additionally, the assets and liabilities in the table below exclude intercompany balances that eliminate in consolidation:

September 30, 2021 Consolidated VIEs Unconsolidated VIEs Total
Assets
Restricted cash $ 14,827 $ — $ 14,827
Securities available for sale at fair value — 73,694 73,694
Loans held for sale at fair value 55,172 — 55,172
Retail and certificate loans held for investment at fair value 15,388 — 15,388
Other loans held for investment at fair value 27,033 — 27,033
Other assets 649 19,732 20,381
Total assets $ 113,069 $ 93,426 $ 206,495
Liabilities
Retail notes, certificates and secured borrowings at fair value $ 15,388 $ — $ 15,388
Payable on Structured Program borrowings 89,252 — 89,252
Other liabilities 284 — 284
Total liabilities 104,924 — 104,924
Total net assets $ 8,145 $ 93,426 $ 101,571

December 31, 2020 Consolidated VIEs Unconsolidated VIEs Total
Assets
Restricted cash $ 15,983 $ — $ 15,983
Securities available for sale at fair value — 142,026 142,026
Loans held for sale at fair value 98,190 — 98,190
Retail and certificate loans held for investment at fair value 52,620 — 52,620
Other loans held for investment at fair value 50,102 — 50,102
Other assets 1,270 32,865 34,135
Total assets $ 218,165 $ 174,891 $ 393,056
Liabilities
Retail notes, certificates and secured borrowings at fair value $ 52,620 $ — $ 52,620
Payable on Structured Program borrowings 152,808 — 152,808
Other liabilities 729 — 729
Total liabilities 206,157 — 206,157
Total net assets $ 12,008 $ 174,891 $ 186,899

3823

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

~~Consolidated VIEs~~There were no acquired PCD loans during the first quarter of 2022. Acquired PCD loans during the first quarter of 2021 were as follows:



Purchase price	$	337,118
Allowance for expected credit losses (1)	30,378
Discount attributable to other factors	12,204
Par value	$	379,700

(1)

For acquired PCD loans, an ACL of $30.4 million was required with a corresponding increase to the amortized cost basis as of the acquisition date for the first quarter of 2021. For PCD loans where all or a portion of the loan balance had been previously written-off, or would be subject to write-off under the Company’s charge-off policy, an ACL of $18.0 million included as part of the grossed-up loan balance at acquisition was immediately written-off during the first quarter of 2021. The ~~Company consolidates VIEs when it is deemed~~net impact to be the ~~primary beneficiary. See “Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1. Summary~~allowance for PCD assets on the acquisition date was $12.4 million for the first quarter of ~~Significant Accounting Policies~~”~~in theAnnual Report for additional information.~~2021.

~~LC Trust~~

6. Securitizations and Variable Interest Entities

~~The Company established the LC Trust for the purpose of acquiring~~VIE Assets and holding loans for the sole benefit of certain investors that have purchased trust certificates issued by the LC Trust. The Company is obligated to ensure that the LC Trust meets minimum capital requirements with respect to funding the administrative activities and maintaining the operations of the LC Trust.

~~Consolidated Trusts~~

The Company established trusts to facilitate the sale of loans and issuance of senior and subordinated securities. If the Company is the primary beneficiary of the trust, it is a consolidated VIE and will reflect senior and subordinated securities held by third parties within “Payable on Structured Program borrowings” in the Company’s Condensed Consolidated Balance Sheets. If subsequently the Company is not the primary beneficiary of the trust, the Company will deconsolidate the VIE. See “~~Note 13. Short-term Borrowings and Long-term Debt” for additional information.~~

~~Warehouse Credit Facilities~~

Prior to the acquisition of Radius, the Company established certain entities (deemed to be VIEs) to enter into warehouse credit facilities for the purpose of purchasing loans from LendingClub. In the fourth quarter of 2020, the Company fully repaid and terminated its credit facilities.Liabilities

The following tables ~~present a summary~~provide the classifications of ~~financial~~ assets and liabilities ~~from~~on the ~~Company’s involvement~~Balance Sheet for its transactions with consolidated ~~VIEs at September 30, 2021~~ and ~~December 31, 2020:~~unconsolidated VIEs. Additionally, the assets and liabilities in the tables below exclude intercompany balances that eliminate in consolidation:

September 30, 2021 Assets Liabilities Net Assets
LC Trust $ 17,953 $ (15,505) $ 2,448
Consolidated trusts 95,116 (89,419) 5,697
Total consolidated VIEs $ 113,069 $ (104,924) $ 8,145

December 31, 2020 Assets Liabilities Net Assets
LC Trust $ 55,447 $ (53,068) $ 2,379
Consolidated trusts 162,460 (153,089) 9,371
Warehouse credit facility 258 — 258
Total consolidated VIEs $ 218,165 $ (206,157) $ 12,008

The creditors of the VIEs above have no recourse to the general credit of the Company as the primary beneficiary of the VIEs and the liabilities of the VIEs can only be settled by the respective VIE’s assets.

~~Unconsolidated VIEs~~

The Company’s transactions with unconsolidated VIEs include asset-backed securitizations, Certificate Program transactions and loan sale transactions of unsecured personal loans. The Company has various forms of involvement


March 31, 2022	Consolidated VIEs		Unconsolidated VIEs		Total
Assets

Restricted cash	$	9,602	$	—	$	9,602
Securities available for sale at fair value	—		45,371		45,371

Retail and certificate loans held for investment at fair value	6,733		—		6,733
Other loans held for investment at fair value	15,014		—		15,014
Other assets	322		14,989		15,311
Total assets	$	31,671	$	60,360	$	92,031
Liabilities
Retail notes, certificates and secured borrowings at fair value	$	6,733	$	—	$	6,733
Payable on Structured Program borrowings	20,347		—		20,347
Other liabilities	83		—		83
Total liabilities	27,163		—		27,163
Total net assets	$	4,508	$	60,360	$	64,868

3924

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)


December 31, 2021	Consolidated VIEs		Unconsolidated VIEs		Total
Assets
Restricted cash	$	13,462	$	—	$	13,462
Securities available for sale at fair value	—		58,177		58,177
Loans held for sale at fair value	41,734		—		41,734
Retail and certificate loans held for investment at fair value	10,281		—		10,281
Other loans held for investment at fair value	20,929		—		20,929
Other assets	584		17,156		17,740
Total assets	$	86,990	$	75,333	$	162,323
Liabilities

Retail notes, certificates and secured borrowings at fair value	$	10,281	$	—	$	10,281
Payable on Structured Program borrowings	65,451		—		65,451
Other liabilities	467		—		467
Total liabilities	76,199		—		76,199
Total net assets	$	10,791	$	75,333��	$	86,124

Unconsolidated VIEs

The Company’s transactions with unconsolidated VIEs include Structured Program transactions. The Company has various forms of involvement with VIEs, including servicing of loans and holding senior or subordinated residual interests in the VIEs. The accounting for these transactions is based on a primary beneficiary analysis to determine whether the underlying VIEs should be consolidated. If the VIEs are not consolidated and the transfer of the loans from the Company to the VIE meets sale accounting criteria, then the Company will recognize a gain or loss on sales of loans. The Company considers continued involvement in an unconsolidated VIE insignificant if it is the sponsor and servicer and does not hold other significant variable interests. In these instances, the Company’s involvement with the VIE is in the role as an agent and without significant participation in the economics of the VIE. The Company enters into separate servicing agreements with the VIEs and holds at least 5% of the beneficial interests issued by the VIEs to comply with regulatory risk retention rules. The beneficial interests retained by the Company consist of senior securities and subordinated securities and are accounted for as securities available for sale. In connection with these transactions, we make certain customary representations, warranties and covenants. See “~~Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1. Summary of Significant Accounting Policies~~”~~in theAnnual Report for additional information.~~

~~Investment Fund~~

The Company has an equity investment in a private fund (Investment Fund) that participates in a family of funds with other unrelated third parties. This family of funds purchases assets from third parties unrelated to the Company and historically purchased whole loans and interests in loans from the Company. As of September 30, 2021, the Company had an ownership interest of approximately 21% in the Investment Fund. The Company’s investment is deemed to be a variable interest in the Investment Fund because the Company shares in the expected returns and losses of the Investment Fund. The Company has requested a full redemption of its investment in the Investment Fund. At September 30, 2021, the Company’s investment was $7.7 million, which is recognized in “Other assets” on the Company’s Condensed Consolidated Balance Sheets.

The following tables ~~summarize~~present total unconsolidated VIEs with which the Company has significant continuing involvement, but is not the primary ~~beneficiary at September 30, 2021 and December 31, 2020:~~beneficiary:

September 30, 2021 Carrying Value
Total VIE Assets Securities Available for Sale Other Assets Net Assets
Unconsolidated Trusts $ 763,992 $ 31,253 $ 5,517 $ 36,770
Certificate Program 929,742 42,441 6,490 48,931
Investment Fund 37,533 — 7,725 7,725
Total unconsolidated VIEs $ 1,731,267 $ 73,694 $ 19,732 $ 93,426


March 31, 2022	Total VIE Assets		Securities Available for Sale		Other Assets		Net Assets



Carrying value	$	1,094,857	$	45,371	$	14,989	$	60,360
Total exposure	N/A		$	45,371	$	14,989	$	60,360


December 31, 2021	Total VIE Assets		Securities Available for Sale		Other Assets		Net Assets
Carrying value	$	1,386,279	$	58,177	$	17,156	$	75,333
Total exposure	N/A		$	58,177	$	17,156	$	75,333

N/A – Not applicable

September 30, 2021 Maximum Exposure to Loss
Securities Available for Sale Other Assets Net Assets
Unconsolidated Trusts $ 31,253 $ 5,517 $ 36,770
Certificate Program 42,441 6,490 48,931
Investment Fund — 7,725 7,725
Total unconsolidated VIEs $ 73,694 $ 19,732 $ 93,426

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

December 31, 2020 Carrying Value
Total VIE Assets Securities Available for Sale Other Assets Net Assets
Unconsolidated Trusts $ 1,267,611 $ 57,511 $ 9,654 $ 67,165
Certificate Program 1,931,429 84,515 15,436 99,951
Investment Fund 34,376 — 7,775 7,775
Total unconsolidated VIEs $ 3,233,416 $ 142,026 $ 32,865 $ 174,891

December 31, 2020 Maximum Exposure to Loss
Securities Available for Sale Other Assets Total Exposure
Unconsolidated Trusts $ 57,511 $ 9,654 $ 67,165
Certificate Program 84,515 15,436 99,951
Investment Fund — 7,775 7,775
Total unconsolidated VIEs $ 142,026 $ 32,865 $ 174,891

“Total VIE Assets” represents the remaining principal balance of loans held by unconsolidated ~~VIEs with respect~~VIEs. “Net Assets” continue to ~~Unconsolidated Trusts, Certificate~~decline due to the ongoing paydown of loan balances from prior Structured Program ~~transactions, and the net assets held by the Investment Fund using the most current information available. “Securities~~transactions.“Securities Available for Sale” and “Other Assets” are the balances inon the ~~Company’s Condensed Consolidated~~ Balance ~~Sheets~~Sheet related to its involvement with the unconsolidated VIEs. “Other Assets” primarily includes the Company’s servicing assets and servicing ~~receivables and the Company’s equity investment with respect to the Investment Fund.~~receivables. “Total Exposure” refers to the Company’s maximum exposure to loss from its involvement with unconsolidated VIEs. It represents estimated loss that would be incurred under severe, hypothetical circumstances, for which the Company believes the possibility is extremely remote, such as where the value of interests and any associated collateral declines to zero. Accordingly, this required disclosure is not an indication of expected losses.

The following tables summarize activity related to the Unconsolidated Trusts and Certificate Program trusts, with the transfers accounted for as a sale on the Company’s financial statements for the third quarters and first nine months of 2021 and 2020:

Three Months Ended September 30, 2021 2020
Unconsolidated Trusts Unconsolidated Certificate Program
Trusts Unconsolidated Trusts Unconsolidated Certificate Program
Trusts
Principal derecognized from loans securitized or sold (1)
$ — $ — $ — $ 233,852
Net gains recognized from loans securitized or sold $ — $ — $ — $ 1,563
Cash proceeds from servicing and other administrative fees on loans securitized or sold $ 2,021 $ 3,131 $ 4,176 $ 6,697
Cash proceeds for interest received on senior securities and subordinated securities $ 377 $ 598 $ 983 $ 1,847

~~(1)~~ ~~Includes non-cash purchase and sale of loans requested by investors to facilitate a Structured Program transaction during the third quarter of 2020.~~

4125

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Nine Months Ended September 30, 2021 2020
Unconsolidated Trusts Unconsolidated Certificate Program
Trusts Unconsolidated Trusts Unconsolidated Certificate Program
Trusts
Principal derecognized from loans securitized or sold (1)
$ — $ — $ 255,203 $ 871,489
Net gains (losses) recognized from loans securitized or sold $ — $ — $ (20) $ 7,159
Fair value of asset-backed senior and subordinated securities, and CLUB Certificate asset-backed securities retained upon settlement (2)
$ — $ — $ 12,707 $ 31,423
Cash proceeds from loans securitized or sold $ — $ — $ 237,764 $ 598,515
Cash proceeds from servicing and other administrative fees on loans securitized or sold $ 7,546 $ 12,054 $ 14,118 $ 20,919
Cash proceeds for interest received on senior securities and subordinated securities $ 2,198 $ 4,388 $ 3,792 $ 6,740

~~(1)~~ ~~Includes non-cash purchase and sale of loans requested by investors to facilitate a Structured Program transaction during the third quarter of 2020.~~

~~(2)~~ For Structured Program transactions, the Company retained asset-backed senior securities of $23.0 million, CLUB Certificate asset-backed securities of $18.3 million, and asset-backed subordinated securities of $2.9 million for the first nine months of 2020. The ~~Company did not retain asset-backed securities~~following table summarizes activity related to ~~Structured~~the Unconsolidated Trusts and Certificate Program ~~transactions during~~trusts, with the ~~first nine months of 2021.~~transfers accounted for as a sale on the Company’s financial statements:


Three Months Ended March 31,	2022				2021
	Unconsolidated Trusts		Unconsolidated Certificate Program Trusts			Unconsolidated Trusts		Unconsolidated Certificate Program Trusts
Principal derecognized from loans securitized or sold	$	—	$	41,023		$	—	$	—
Net gains recognized from loans securitized or sold	$	—	$	259		$	—	$	—
Fair value of asset-backed senior and subordinated securities, and CLUB Certificate asset-backed securities retained upon settlement	$	—	$	2,180		$	—	$	—

Cash proceeds from servicing and other administrative fees on loans securitized or sold	$	1,259	$	1,846		$	3,017	$	4,918
Proceeds from sale of securities by consolidated VIE	$	—	$	5,320		$	—	$	—
Cash proceeds for interest received on senior securities and subordinated securities	$	828	$	1,867		$	608	$	1,258

The Company and other investors in the subordinated interests issued by trusts and Certificate Program trusts have rights to cash flows only after the investors holding the senior securities issued by the trusts have first received their contractual cash flows. The investors and the trusts have no direct recourse to the Company’s assets, and holders of the securities issued by the trusts can look only to the assets of the securitization trusts that issued their securities for payment. The beneficial interests held by the Company are subject principally to the credit and prepayment risk stemming from the underlying unsecured personal loans.

Off-Balance Sheet Loans

Off-balance sheet loans pursuant to unconsolidated VIE’s primarily relate to Structured Program transactions for which the Company has some form of continuing involvement, including as servicer. ~~For~~

As of March 31, 2022, the aggregate unpaid principal balance of the off-balance sheet loans related to Structured Program transactions ~~where servicing is~~was $1.0 billion, of which $25.5 million was attributable to off-balance sheet loans that were 31 days or more past due. As of December 31, 2021, the ~~only form~~aggregate unpaid principal balance of ~~continuing involvement,~~the off-balance sheet loans related to Structured Program transactions was $1.3 billion, of which $35.0 million was attributable to off-balance sheet loans that were 31 days or more past due. For such loans, the Company would only experience a loss if it was required to repurchase a loan due to a breach in representations and warranties associated with its loan sale or servicing contracts.

As of September 30, 2021, the aggregate unpaid principal balance of the off-balance sheet loans related to Structured Program transactions was $1.7 billion, of which $42.4 million was attributable to off-balance sheet loans that were 31 days or more past due. As of December 31, 2020, the aggregate unpaid principal balance of the off-balance sheet loans related to Structured Program transactions was $3.2 billion, of which $94.8 million was attributable to off-balance sheet loans that were 31 days or more past due.

~~Retained Interests from Unconsolidated VIEs~~

~~See “Note 8. Fair Value of Assets and Liabilities” for additional information on the fair value sensitivity of asset-backed securities related to Structured Program transactions.~~

4226

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

8.7. Fair Value of Assets and Liabilities

For a description of the fair value hierarchy and the Company’s fair value methodologies, see “Part II – Item 8. Financial Statements and Supplementary Data – Note 2.1. Summary of Significant Accounting Policies” in the Annual Report. The Company records certain assets and liabilities at fair value as listed in the following tables.

Financial Instruments, Assets and Liabilities Recorded at Fair Value

The following tables present the fair value hierarchy for assets and liabilities measured at fair ~~value at September 30, 2021 and December 31, 2020:~~value:


September 30, 2021		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
March 31, 2022										March 31, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:	Assets:									Assets:
Loans held for sale at fair value	Loans held for sale at fair value	$	—	$	—	$	152,160	$	152,160	Loans held for sale at fair value	$	—	$	—	$	156,730	$	156,730
Retail and certificate loans held for investment at fair value	Retail and certificate loans held for investment at fair value	—		—		298,541		298,541		Retail and certificate loans held for investment at fair value	—		—		168,906		168,906
Other loans held for investment at fair value	Other loans held for investment at fair value	—		—		27,229		27,229		Other loans held for investment at fair value	—		—		15,384		15,384
Securities available for sale:	Securities available for sale:									Securities available for sale:
U.S. agency residential mortgage-backed securities	U.S. agency residential mortgage-backed securities	—		113,894		—		113,894		U.S. agency residential mortgage-backed securities	—		227,135		—		227,135
U.S. agency securities										U.S. agency securities	—		61,925		—		61,925
Asset-backed senior securities and subordinated securities	Asset-backed senior securities and subordinated securities	—		37,708		11,810		49,518		Asset-backed senior securities and subordinated securities	—		21,904		10,032		31,936
Commercial mortgage-backed securities	Commercial mortgage-backed securities	—		28,644		—		28,644		Commercial mortgage-backed securities	—		28,418		—		28,418
Other asset-backed securities	Other asset-backed securities	—		27,846		—		27,846		Other asset-backed securities	—		24,597		—		24,597
U.S. agency securities		—		27,410		—		27,410
CLUB Certificate asset-backed securities	CLUB Certificate asset-backed securities	—		—		24,176		24,176		CLUB Certificate asset-backed securities	—		—		13,434		13,434
Municipal securities	Municipal securities	—		3,242		—		3,242		Municipal securities	—		2,872		—		2,872
Other securities		—		200		—		200

Total securities available for sale	Total securities available for sale	—		238,944		35,986		274,930		Total securities available for sale	—		366,851		23,466		390,317
Servicing assets	Servicing assets	—		—		63,573		63,573		Servicing assets	—		—		72,112		72,112
Other assets	Other assets	—		3,235		5,357		8,592		Other assets	—		2,550		2,408		4,958
Total assets	Total assets	$	—	$	242,179	$	582,846	$	825,025	Total assets	$	—	$	369,401	$	439,006	$	808,407

Liabilities:	Liabilities:									Liabilities:
Retail notes, certificates and secured borrowings	Retail notes, certificates and secured borrowings	$	—	$	—	$	298,541	$	298,541	Retail notes, certificates and secured borrowings	$	—	$	—	$	168,906	$	168,906
Payable on Structured Program borrowings	Payable on Structured Program borrowings	—		—		89,252		89,252		Payable on Structured Program borrowings	—		—		20,347		20,347
Other liabilities	Other liabilities	—		—		17,941		17,941		Other liabilities	—		—		10,024		10,024
Total liabilities	Total liabilities	$	—	$	—	$	405,734	$	405,734	Total liabilities	$	—	$	—	$	199,277	$	199,277

4327

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at
Fair Value
Assets:
Loans held for sale at fair value $ — $ — $ 121,902 $ 121,902
Retail and certificate loans held for investment at fair value — — 636,686 636,686
Other loans held for investment at fair value — — 49,954 49,954
Securities available for sale:
Asset-backed senior securities and subordinated securities — 75,372 16,515 91,887
CLUB Certificate asset-backed securities — — 50,139 50,139
Other securities — 200 — 200
Total securities available for sale — 75,572 66,654 142,226
Servicing assets — — 56,347 56,347
Total assets $ — $ 75,572 $ 931,543 $ 1,007,115
Liabilities:
Retail notes, certificates and secured borrowings $ — $ — $ 636,774 $ 636,774
Payable on Structured Program borrowings — — 152,808 152,808
Other liabilities — — 12,270 12,270
Total liabilities $ — $ — $ 801,852 $ 801,852

Changes in the fair value of financial liabilities presented in the tables above, caused by a change in the Company’s risk are reported in other comprehensive income (OCI). For the third quarters and first nine months of 2021 and 2020, the amount reported in OCI is zero because these financial liabilities are either payable only upon receipt of cash flows from underlying loans or secured by cash collateral.


December 31, 2021	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Loans held for sale at fair value	$	—	$	—	$	142,370	$	142,370
Retail and certificate loans held for investment at fair value	—		—		229,719		229,719
Other loans held for investment at fair value	—		—		21,240		21,240
Securities available for sale:
U.S. agency residential mortgage-backed securities	—		123,699		—		123,699
Asset-backed senior securities and subordinated securities	—		28,129		11,762		39,891
U.S. agency securities	—		26,172		—		26,172
Other asset-backed securities	—		26,133		—		26,133
Commercial mortgaged-backed securities	—		26,098		—		26,098
CLUB Certificate asset-backed securities	—		—		18,285		18,285
Municipal securities	—		3,252		—		3,252

Total securities available for sale	—		233,483		30,047		263,530
Servicing assets	—		—		67,726		67,726
Other assets	—		2,812		3,312		6,124
Total assets	$	—	$	236,295	$	494,414	$	730,709

Liabilities:
Retail notes, certificates and secured borrowings	$	—	$	—	$	229,719	$	229,719
Payable on Structured Program borrowings	—		—		65,451		65,451
Other liabilities	—		—		12,911		12,911
Total liabilities	$	—	$	—	$	308,081	$	308,081

Financial instruments are categorized in the valuation hierarchy based on the significance of observable or unobservable factors in the overall fair value measurement. ~~Since~~For the financial instruments listed in the tables above that do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of these assets and liabilities. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, changes in fair value for assets and liabilities within the Level 2 or Level 3 categories may include changes in fair value that were attributable to observable and unobservable inputs, respectively. The Company primarily uses a discounted cash flow (DCF) model to estimate the fair value of Level 3 instruments based on the present value of estimated future cash flows. This model uses inputs that are inherently judgmental and reflect the Company’s best estimates of the assumptions a market participant would use to calculate fair value. Due to changes in the availability of market observable inputs, the Company transferred $517 thousand of asset-backed securities related to Structured Program transactions out of Level 3 during the first nine months of 2020. The Company did not transfer any ~~other~~ assets or liabilities in or out of Level 3 during the ~~third~~first quarters ~~and first nine months~~ of 2022 or 2021.

Fair valuation adjustments are recorded through earnings related to Level 3 instruments for the third quarters and first nine months of 2021 and 2020. Certain unobservable inputs may (in isolation) have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input. When multiple inputs are used within the valuation techniques, a change in one input in a certain direction may be offset by an opposite change from another input.

4428

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Loans Held for Sale at Fair Value

~~Significant Unobservable Inputs~~As of both March 31, 2022 and December 31, 2021, the majority of loans HFS were sold shortly after origination and at committed prices. Therefore, the Company is generally not exposed to fair value fluctuations as a result of adverse changes in key assumptions.

Fair Value Reconciliation

The following ~~table presents quantitative~~tables present additional information about ~~the significant unobservable inputs used for the Company’s~~ Level 3 loans ~~held for sale at fair value at September 30, 2021 and December 31, 2020:~~HFS on a recurring basis:

Loans Held for Sale at Fair Value
September 30, 2021 December 31, 2020
Minimum Maximum Weighted-
Average Minimum Maximum Weighted-
Average
Discount rates 5.2 % 11.6 % 9.1 % 7.6 % 16.0 % 8.5 %
Net cumulative expected loss rates (1)
2.5 % 25.6 % 9.8 % 5.0 % 28.0 % 8.2 %
Cumulative expected prepayment rates (1)
30.6 % 44.8 % 36.0 % 27.2 % 41.2 % 30.4 %

~~(1)~~ ~~Expressed as a percentage of the original principal balance of the loan.~~


	Outstanding Principal Balance		Valuation Adjustment		Fair Value
Balance at December 31, 2021	$	147,193	$	(4,823)	$	142,370
Originations and purchases	2,270,925		—		2,270,925

Sales	(2,247,648)		(10,053)		(2,257,701)
Principal payments and retirements	(12,286)		—		(12,286)
Charge-offs, net of recoveries	(532)		(518)		(1,050)
Change in fair value recorded in earnings	—		14,472		14,472
Balance at March 31, 2022	$	157,652	$	(922)	$	156,730




	Outstanding Principal Balance		Valuation Adjustment		Fair Value
Balance at December 31, 2020	$	132,600	$	(10,698)	$	121,902
Originations and purchases	941,945		(1,629)		940,316
Transfers to loans held for investment	(63)		—		(63)
Sales	(873,672)		7,037		(866,635)
Principal payments and retirements	(22,821)		—		(22,821)
Charge-offs, net of recoveries	(3,859)		3,186		(673)
Change in fair value recorded in earnings	—		(5,403)		(5,403)
Balance at March 31, 2021	$	174,130	$	(7,507)	$	166,623

~~Significant Recurring Level 3 Fair Value Input Sensitivity~~Retail and Certificate Loans and Related Notes, Certificates and Secured Borrowings

The ~~sensitivity~~Company does not assume principal or interest rate risk on loans that were funded by its member payment- dependent self-directed retail program (Retail Program) because loan balances, interest rates and maturities are matched and offset by an equal balance of notes with the exact same interest rates and maturities. At March 31, 2022 and December 31, 2021, the DCF methodology used to estimate the retail note, certificate and secured borrowings’ fair values used the same projected net cash flows as their related loans. Therefore, the fair value adjustments for retail loans held for ~~sale at~~investment were largely offset by the corresponding fair value adjustments due to ~~adverse changes in key assumptions as~~the payment dependent design of ~~September 30, 2021~~the retail notes, certificates and ~~December 31, 2020, are as follows:~~

September 30, 2021 December 31, 2020
Loans held for sale at fair value $ 152,160 $ 121,902
Expected weighted-average life (in years) 1.2 1.1
Discount rates
100 basis point increase $ (1,572) $ (1,151)
200 basis point increase $ (3,119) $ (2,282)
Expected credit loss rates on underlying loans
10% adverse change $ (675) $ (1,099)
20% adverse change $ (1,371) $ (2,220)
Expected prepayment rates
10% adverse change $ (1,568) $ (273)
20% adverse change $ (3,242) $ (556)

secured borrowings.

4529

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

~~Fair Value Reconciliation~~

~~The following tables present additional information about Level 3 loans held for sale at fair value on a recurring basis for the third quarters and first nine months of 2021 and 2020:~~

Loans Held for Sale at Fair Value
Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at June 30, 2021 $ 186,988 $ (6,927) $ 180,061
Originations and purchases 2,339,869 — 2,339,869
Sales (2,342,158) (85) (2,342,243)
Principal payments and retirements (27,211) — (27,211)
Charge-offs, net of recoveries (1,138) (209) (1,347)
Change in fair value recorded in earnings — 3,031 3,031
Balance at September 30, 2021 $ 156,350 $ (4,190) $ 152,160
Loans Held for Sale at Fair Value
Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at June 30, 2020 $ 668,262 $ (81,169) $ 587,093
Purchases 27,756 (6) 27,750
Transfers from loans held for investment and/or loans held for sale (1)
479 — 479
Sales (442,744) 51,220 (391,524)
Principal payments and retirements (44,439) — (44,439)
Charge-offs, net of recoveries (6,565) 6,148 (417)
Change in fair value recorded in earnings — 1,859 1,859
Balance at September 30, 2020 $ 202,749 $ (21,948) $ 180,801

Loans Held for Sale at Fair Value
Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at December 31, 2020 $ 132,600 $ (10,698) $ 121,902
Originations and purchases 5,320,264 (1,629) 5,318,635
Transfers from loans and leases held for investment at amortized cost (1)
1,181 — 1,181
Sales (5,211,984) 10,568 (5,201,416)
Principal payments and retirements (78,946) — (78,946)
Charge-offs, net of recoveries (6,765) 3,711 (3,054)
Change in fair value recorded in earnings — (6,142) (6,142)
Balance at September 30, 2021 $ 156,350 $ (4,190) $ 152,160
Loans Held for Sale at Fair Value
Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at December 31, 2019 $ 747,394 $ (25,039) $ 722,355
Purchases 1,430,213 (6) 1,430,207
Transfers to loans held for investment and/or loans held for sale (1)
(42,680) — (42,680)
Sales (1,726,678) 82,076 (1,644,602)
Principal payments and retirements (186,130) — (186,130)
Charge-offs, net of recoveries (19,370) 17,945 (1,425)
Change in fair value recorded in earnings — (96,924) (96,924)
Balance at September 30, 2020 $ 202,749 $ (21,948) $ 180,801

~~(1)~~ ~~Represents non-cash activity.~~

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~Retail and Certificate Loans Held for Investment at Fair Value and Retail Notes, Certificates and Secured Borrowings~~

~~Significant Unobservable Inputs~~

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for retail and certificate loans held for investment at fair value and the related retail notes, certificates and secured borrowings at September 30, 2021 and December 31, 2020:

Retail and Certificate Loans Held for Investment at Fair Value,
and Retail Notes, Certificates and Secured Borrowings
September 30, 2021 December 31, 2020
Minimum Maximum Weighted-
Average Minimum Maximum Weighted-
Average
Discount rates 7.9 % 15.8 % 10.0 % 7.6 % 15.0 % 9.4 %
Net cumulative expected loss rates (1)
3.0 % 18.7 % 8.7 % 4.3 % 28.1 % 11.2 %
Cumulative expected prepayment rates (1)
32.0 % 41.0 % 37.5 % 27.3 % 35.7 % 30.4 %

~~(1)~~ ~~Expressed as a percentage of the original principal balance of the loan, note, certificate or secured borrowing.~~

~~Significant Recurring Level 3 Fair Value Input Sensitivity~~

At September 30, 2021 and December 31, 2020, the discounted cash flow methodology used to estimate the retail note, certificate and secured borrowings’ fair values used the same projected net cash flows as their related retail loans. As demonstrated by the following tables, the fair value adjustments for retail and certificate loans held for investment were largely offset by the corresponding fair value adjustments due to the payment dependent design of the retail notes, certificates and secured borrowings.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~Fair Value Reconciliation~~

The following tables present additional information about Level 3 retail and certificate loans held for investment at fair value and retail notes, certificates and secured borrowings measured at fair value on a recurring basis for the third quarters and first nine months of 2021 and 2020:

Retail and Certificate Loans Held for
Investment at Fair Value Retail Notes, Certificates and Secured Borrowings
Outstanding Principal Balance Valuation Adjustment Fair Value Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at June 30, 2021 $ 413,935 $ (22,573) $ 391,362 $ 413,935 $ (22,551) $ 391,384
Principal payments and retirements (94,152) — (94,152) (94,152) — (94,152)
Charge-offs, net of recoveries (5,775) (3,293) (9,068) (5,775) (3,315) (9,090)
Change in fair value recorded in earnings — 10,399 10,399 — 10,399 10,399
Balance at September 30, 2021 $ 314,008 $ (15,467) $ 298,541 $ 314,008 $ (15,467) $ 298,541

Retail and Certificate Loans Held for
Investment at Fair Value Retail Notes, Certificates and Secured Borrowings
Outstanding Principal Balance Valuation Adjustment Fair Value Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at June 30, 2020 $ 851,476 $ (66,248) $ 785,228 $ 851,476 $ (65,548) $ 785,928
Purchases 77,389 — 77,389 — — —
Transfers to retail and certificate loans held for investment and/or loans held for sale (1)
(324) — (324) — — —
Issuances — — — 77,389 — 77,389
Principal payments and retirements (159,753) — (159,753) (160,077) — (160,077)
Charge-offs, net of recoveries (12,218) 2,049 (10,169) (12,218) 1,358 (10,860)
Change in fair value recorded in earnings — 15,903 15,903 — 16,217 16,217
Balance at September 30, 2020 $ 756,570 $ (48,296) $ 708,274 $ 756,570 $ (47,973) $ 708,597

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Retail and Certificate Loans Held for
Investment at Fair Value Retail Notes, Certificates and Secured Borrowings
Outstanding Principal Balance Valuation Adjustment Fair Value Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at December 31, 2020 $ 679,903 $ (43,217) $ 636,686 $ 679,903 $ (43,129) $ 636,774
Principal payments and retirements (339,911) — (339,911) (339,911) — (339,911)
Charge-offs, net of recoveries (25,984) 3,890 (22,094) (25,984) 3,735 (22,249)
Change in fair value recorded in earnings — 23,860 23,860 — 23,927 23,927
Balance at September 30, 2021 $ 314,008 $ (15,467) $ 298,541 $ 314,008 $ (15,467) $ 298,541

Retail and Certificate Loans Held for
Investment at Fair Value Retail Notes, Certificates and Secured Borrowings
Outstanding Principal Balance Valuation Adjustment Fair Value Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at December 31, 2019 $ 1,148,888 $ (69,573) $ 1,079,315 $ 1,148,888 $ (67,422) $ 1,081,466
Purchases 237,283 — 237,283 — — —
Transfers to retail and certificate loans held for investment and/or loans held for sale (1)
(17,903) — (17,903) — — —
Issuances — — — 237,283 — 237,283
Principal payments and retirements (547,042) — (547,042) (564,945) — (564,945)
Charge-offs, net of recoveries (64,656) 33,562 (31,094) (64,656) 31,345 (33,311)
Change in fair value recorded in earnings — (12,285) (12,285) — (11,896) (11,896)
Balance at September 30, 2020 $ 756,570 $ (48,296) $ 708,274 $ 756,570 $ (47,973) $ 708,597

~~(1)~~ ~~Represents non-cash activity.~~

~~Other Loans Held for Investment at Fair Value~~

~~Significant Unobservable Inputs~~

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 other loans held for investment at fair value at September 30, 2021 and December 31, 2020:

Other Loans Held for Investment at Fair Value
September 30, 2021 December 31, 2020
Minimum Maximum Weighted-
Average Minimum Maximum Weighted-
Average
Discount rates 7.7 % 11.0 % 9.4 % 7.5 % 16.1 % 8.8 %
Net cumulative expected loss rates (1)
2.9 % 12.3 % 7.3 % 5.0 % 26.3 % 10.3 %
Cumulative expected prepayment rates (1)
30.6 % 40.2 % 35.2 % 26.8 % 39.7 % 30.7 %

~~(1)~~ ~~Expressed as a percentage of the original principal balance of the loan.~~

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~Significant Recurring Level 3 Fair Value Input Sensitivity~~

~~The sensitivity of other loans held for investment at fair value to adverse changes in key assumptions as of September 30, 2021 and December 31, 2020, are as follows:~~

September 30, 2021 December 31, 2020
Other loans held for investment at fair value $ 27,229 $ 49,954
Expected weighted-average life (in years) 1.0 1.1
Discount rates
100 basis point increase $ (229) $ (541)
200 basis point increase $ (453) $ (1,073)
Expected credit loss rates on underlying loans
10% adverse change $ (135) $ (640)
20% adverse change $ (275) $ (1,295)
Expected prepayment rates
10% adverse change $ (223) $ (181)
20% adverse change $ (461) $ (368)

~~Fair Value Reconciliation~~

~~The following tables present additional information about Level 3 other loans held for investment at fair value on a recurring basis for the third quarters and first nine months of 2021 and 2020:~~

Other Loans Held for Investment at Fair Value
Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at June 30, 2021 $ 38,137 $ (3,614) $ 34,523
Purchases 6 2 8
Principal payments and retirements (7,654) — (7,654)
Charge-offs, net of recoveries (395) 324 (71)
Change in fair value recorded in earnings — 423 423
Balance at September 30, 2021 $ 30,094 $ (2,865) $ 27,229
Other Loans Held for Investment at Fair Value
Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at June 30, 2020 $ 75,159 $ (9,602) $ 65,557
Purchases 201 (189) 12
Transfers to other loans held for investment and/or loans held for sale (1)
(155) — (155)
Principal payments and retirements (8,205) — (8,205)
Charge-offs, net of recoveries (768) 245 (523)
Change in fair value recorded in earnings — 2,413 2,413
Balance at September 30, 2020 $ 66,232 $ (7,133) $ 59,099

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Other Loans Held for Investment at Fair Value
Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at December 31, 2020 $ 56,388 $ (6,434) $ 49,954
Purchases 161 (69) 92
Principal payments and retirements (24,224) — (24,224)
Charge-offs, net of recoveries (2,231) 1,653 (578)
Change in fair value recorded in earnings — 1,985 1,985
Balance at September 30, 2021 $ 30,094 $ (2,865) $ 27,229
Other Loans Held for Investment at Fair Value
Outstanding Principal Balance Valuation Adjustment Fair Value
Balance at December 31, 2019 $ 47,042 $ (3,349) $ 43,693
Purchases 1,314 (1,194) 120
Transfers from other loans held for investment and/or loans held for sale (1)
43,170 — 43,170
Principal payments and retirements (21,838) — (21,838)
Charge-offs, net of recoveries (3,456) 756 (2,700)
Change in fair value recorded in earnings — (3,346) (3,346)
Balance at September 30, 2020 $ 66,232 $ (7,133) $ 59,099

~~(1)~~ ~~Represents non-cash activity.~~

~~Asset-Backed Securities Related to Structured Program Transactions~~

~~Significant Unobservable Inputs~~

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for asset-backed securities related to Structured Program transactions at September 30, 2021 and December 31, 2020:

Asset-Backed Securities Related to Structured Program Transactions
September 30, 2021 December 31, 2020
Minimum Maximum Weighted-
Average Minimum Maximum Weighted-
Average
Discount rates 6.0 % 38.0 % 25.0 % 2.2 % 25.1 % 8.4 %
Net cumulative expected loss rates (1)
3.3 % 19.2 % 12.0 % 5.4 % 28.9 % 18.8 %
Cumulative expected prepayment rates (1)
15.4 % 35.1 % 28.9 % 6.3 % 30.5 % 24.8 %

~~(1)~~ ~~Expressed as a percentage of the outstanding collateral balance.~~

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~Significant Recurring Fair Value Input Sensitivity~~

The following tables present adverse changes to the fair value sensitivity of Level 2 and Level 3 asset-backed securities related to Structured Program transactions to changes in key assumptions at September 30, 2021 and December 31, 2020:

September 30, 2021
Asset-Backed Securities Related to
Structured Program Transactions
Senior Securities Subordinated Securities CLUB Certificates
Fair value of interests held $ 37,708 $ 11,810 $ 24,176
Expected weighted-average life (in years) 0.7 1.3 0.8
Discount rates
100 basis point increase $ (260) $ (109) $ (187)
200 basis point increase $ (515) $ (232) $ (370)
Expected credit loss rates on underlying loans
10% adverse change $ — $ (854) $ (587)
20% adverse change $ — $ (1,746) $ (1,204)
Expected prepayment rates
10% adverse change $ — $ (473) $ (323)
20% adverse change $ — $ (1,106) $ (673)

December 31, 2020
Asset-Backed Securities Related to
Structured Program Transactions
Senior Securities Subordinated Securities CLUB Certificates
Fair value of interests held $ 75,372 $ 16,515 $ 50,139
Expected weighted-average life (in years) 0.9 1.4 0.9
Discount rates
100 basis point increase $ (579) $ (161) $ (405)
200 basis point increase $ (1,145) $ (343) $ (800)
Expected credit loss rates on underlying loans
10% adverse change $ — $ (1,831) $ (1,528)
20% adverse change $ — $ (3,718) $ (3,095)
Expected prepayment rates
10% adverse change $ — $ (791) $ (659)
20% adverse change $ — $ (1,736) $ (1,343)

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~Fair Value Reconciliation~~

The following table presents additional information about Level 3 asset-backed securities related to Structured Program transactions measured at fair value on a recurring basis for the third quarters and first nine months of 2021 and 2020:

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Fair value at beginning of period $ 45,918 $ 95,590 $ 66,654 $ 110,796
Additions 488 446 1,445 26,458
Redemptions (1,525) (426) (3,749) (802)
Transfers — (517) — (517)
Cash received (12,869) (20,297) (42,683) (54,371)
Change in unrealized gain 2,110 3,413 6,968 288
Accrued interest 1,369 1,823 4,064 5,649
Reversal of (impairment on) securities available for sale 495 3,669 3,287 (3,800)
Fair value at end of period $ 35,986 $ 83,701 $ 35,986 $ 83,701

Servicing Assets

Significant Unobservable Inputs

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for servicing assets ~~at September 30, 2021 and December 31, 2020:~~relating to loans sold to investors:


		Servicing Assets
		September 30, 2021						December 31, 2020							March 31, 2022						December 31, 2021
		Minimum		Maximum		Weighted- Average		Minimum		Maximum		Weighted- Average			Minimum		Maximum		Weighted- Average		Minimum		Maximum		Weighted- Average
Discount rates	Discount rates	7.5	%	15.1	%	10.0	%	4.8	%	16.4	%	9.9	%	Discount rates	7.5	%	16.4	%	10.0	%	7.5	%	16.4	%	10.0	%
Net cumulative expected loss rates (1)	Net cumulative expected loss rates (1)	2.5	%	25.5	%	10.0	%	4.5	%	26.3	%	12.5	%	Net cumulative expected loss rates (1)	2.3	%	26.8	%	10.9	%	2.4	%	26.4	%	10.2	%
Cumulative expected prepayment rates (1)	Cumulative expected prepayment rates (1)	32.3	%	45.5	%	37.1	%	27.0	%	38.9	%	31.2	%	Cumulative expected prepayment rates (1)	32.1	%	46.2	%	39.8	%	32.1	%	45.9	%	38.4	%
Total market servicing rates (% per annum on outstanding principal balance) (2)	Total market servicing rates (% per annum on outstanding principal balance) (2)	0.62	%	0.62	%	0.62	%	0.62	%	0.62	%	0.62	%	Total market servicing rates (% per annum on outstanding principal balance) (2)	0.62	%	0.62	%	0.62	%	0.62	%	0.62	%	0.62	%

(1) Expressed as a percentage of the original principal balance of the loan.

(2) Includes collection fees estimated to be paid to a hypothetical third-party servicer.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Significant Recurring Level 3 Fair Value Input Sensitivity

The Company’s selection of the most representative market servicing rates for servicing assets is inherently judgmental. The Company reviews third-party servicing rates for its loans, loans in similar credit sectors, and market servicing benchmarking analyses provided by third-party valuation firms, when available. The table below shows the impact on the estimated fair value of servicing assets, calculated using different market servicing rate ~~assumptions as of September 30, 2021 and December 31, 2020:~~assumptions:


		Servicing Assets
		September 30, 2021			December 31, 2020				March 31, 2022			December 31, 2021
Weighted-average market servicing rate assumptions	Weighted-average market servicing rate assumptions	0.62		%	0.62		%	Weighted-average market servicing rate assumptions	0.62		%	0.62		%
Change in fair value from:	Change in fair value from:							Change in fair value from:
Servicing rate increase by 0.10%	Servicing rate increase by 0.10%	$	(8,904)		$	(7,379)		Servicing rate increase by 0.10%	$	(9,852)		$	(9,495)
Servicing rate decrease by 0.10%	Servicing rate decrease by 0.10%	$	8,904		$	7,379		Servicing rate decrease by 0.10%	$	9,852		$	9,495

The following table presents the fair value sensitivity of servicing assets to adverse changes in key ~~assumptions as of September 30, 2021 and December 31, 2020:~~assumptions:


		Servicing Assets					March 31, 2022		December 31, 2021
		September 30, 2021		December 31, 2020
Fair value of servicing assets		$	63,573	$	56,347
Fair value of Servicing Assets						Fair value of Servicing Assets	$	72,112	$	67,726
Discount rates	Discount rates					Discount rates
100 basis point increase	100 basis point increase	$	(523)	$	(455)	100 basis point increase	$	(594)	$	(558)
200 basis point increase	200 basis point increase	$	(1,047)	$	(911)	200 basis point increase	$	(1,187)	$	(1,115)
Expected loss rates	Expected loss rates					Expected loss rates
10% adverse change	10% adverse change	$	(442)	$	(346)	10% adverse change	$	(560)	$	(693)
20% adverse change	20% adverse change	$	(884)	$	(691)	20% adverse change	$	(1,121)	$	(1,386)
Expected prepayment rates	Expected prepayment rates					Expected prepayment rates
10% adverse change	10% adverse change	$	(2,681)	$	(1,596)	10% adverse change	$	(1,935)	$	(2,401)
20% adverse change	20% adverse change	$	(5,362)	$	(3,192)	20% adverse change	$	(3,870)	$	(4,802)

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Fair Value Reconciliation

The following table presents additional information about Level 3 servicing assets measured at fair value on a recurring ~~basis for the third quarters and first nine months of 2021 and 2020:~~basis:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Fair value at beginning of period	Fair value at beginning of period	$	58,728	$	65,515	$	56,347	$	89,680	Fair value at beginning of period	$	67,726	$	56,347
Issuances (1)	Issuances (1)	21,071		7,783		46,274		27,119		Issuances (1)	22,365		7,235
Change in fair value, included in Marketplace revenue	Change in fair value, included in Marketplace revenue	(14,984)		(13,376)		(39,584)		(48,046)		Change in fair value, included in Marketplace revenue	(16,979)		(11,837)
Other net changes included in Deferred revenue	Other net changes included in Deferred revenue	(1,242)		(384)		536		(9,215)		Other net changes included in Deferred revenue	(1,000)		2,368
Fair value at end of period	Fair value at end of period	$	63,573	$	59,538	$	63,573	$	59,538	Fair value at end of period	$	72,112	$	54,113

(1) Represents the gains or losses on sales of the related loans.

Financial Instruments, Assets and Liabilities Not Recorded at Fair Value

The following tables present the fair value hierarchy for financial instruments, assets, and liabilities not recorded at fair value:


March 31, 2022	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Loans and leases held for investment, net	$	3,234,311	$	—	$	—	$	3,469,527	$	3,469,527


Other assets	19,118		—		17,036		2,082		19,118
Total assets	$	3,253,429	$	—	$	17,036	$	3,471,609	$	3,488,645
Liabilities:
Deposits (1)	$	218,801	$	—	$	—	$	218,801	$	218,801




Short-term borrowings	13,188		—		12,417		771		13,188
Advances from PPPLF	193,371		—		—		193,371		193,371
Other long-term debt	15,388		—		—		15,388		15,388


Other liabilities	51,297		—		20,146		31,151		51,297
Total liabilities	$	492,045	$	—	$	32,563	$	459,482	$	492,045

(1) Excludes deposit liabilities with no defined or contractual maturities.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)


December 31, 2021	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Loans held for sale	$	248,878	$	—	$	—	$	251,101	$	251,101
Loans and leases held for investment, net	2,754,737		—		—		2,964,691		2,964,691
Other assets	18,274		—		15,630		2,644		18,274

Total assets	$	3,021,889	$	—	$	15,630	$	3,218,436	$	3,234,066
Liabilities:
Deposits (1)	$	68,405	$	—	$	—	$	68,405	$	68,405
Short-term borrowings	27,780		—		17,595		10,185		27,780
Advances from PPPLF	271,933		—		—		271,933		271,933
Other long-term debt	15,455		—		—		15,455		15,455
Other liabilities	51,655		—		22,187		29,468		51,655
Total liabilities	$	435,228	$	—	$	39,782	$	395,446	$	435,228

(1) Excludes deposit liabilities with no defined or contractual maturities.

8. Property, Equipment and Software, Net

Property, equipment and software, net, consist of the following:


	March 31, 2022		December 31, 2021
Software (1)	$	143,174	$	121,102
Leasehold improvements	37,284		37,347
Computer equipment	29,614		29,598
Furniture and fixtures	7,342		8,346
Total property, equipment and software	217,414		196,393
Accumulated depreciation and amortization	(105,911)		(98,397)
Total property, equipment and software, net	$	111,503	$	97,996

(1) Includes $25.5 million and $14.7 million of development in progress for internally-developed software and $10.9 million and $2.5 million of development in progress to customize purchased software as of March 31, 2022 and December 31, 2021, respectively.

Depreciation and amortization expense on property, equipment and software was $9.5 million and $10.2 million for the first quarters of 2022 and 2021, respectively.

The Company recorded impairment expense on its internal-use software of $0.3 million for both of the first quarters of 2022 and 2021.

The Company records the above expenses in “Depreciation and amortization” expense on the Income Statement.

9. Goodwill and Intangible Assets

Goodwill

The Company’s goodwill balance was $75.7 million as of both March 31, 2022 and December 31, 2021. The Company did not record any goodwill impairment expense for the first quarters of 2022 and 2021. Goodwill is not

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

~~Financial Instruments, Assets, and Liabilities Not Recorded at Fair Value~~

~~The following tables present the fair value hierarchy for financial instruments, assets, and liabilities not recorded at fair value at September 30, 2021 and December 31, 2020:~~

September 30, 2021 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at
Fair Value
Assets:
Loans and leases held for investment, net $ 2,603,256 $ — $ — $ 2,741,859 $ 2,741,859
Other assets 2,717 — 12,246 2,717 14,963
Total assets $ 2,605,973 $ — $ 12,246 $ 2,744,576 $ 2,756,822
Liabilities:
Deposits $ 73,065 $ — $ — $ 73,065 $ 73,065
Short-term borrowings 46,110 — 25,563 20,547 46,110
Advances from PPPLF 391,945 — — 391,945 391,945
Other long-term debt 15,563 — — 15,563 15,563
Other liabilities 45,457 — 20,910 24,547 45,457
Total liabilities $ 572,140 $ — $ 46,473 $ 525,667 $ 572,140

December 31, 2020 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at
Fair Value
Assets:
Total cash and cash equivalents (1)
$ 524,963 $ — $ 524,963 $ — $ 524,963
Restricted cash (1)
103,522 — 103,522 — 103,522
Other assets 914 — 914 — 914
Total assets $ 629,399 $ — $ 629,399 $ — $ 629,399
Liabilities:
Short-term borrowings $ 104,989 $ — $ 65,121 $ 39,868 $ 104,989
Other liabilities 57,536 — 43,984 13,552 57,536
Total liabilities $ 162,525 $ — $ 109,105 $ 53,420 $ 162,525

~~(1)~~ ~~Carrying amount approximates fair value due to the short maturity of these financial instruments.~~

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~9. Property, Equipment and Software, Net~~

~~Property, equipment and software, net, consist of the following:~~

September 30, 2021 December 31, 2020
Internally developed software (1)
$ 105,978 $ 101,953
Leasehold improvements 36,053 35,140
Computer equipment 29,240 27,030
Purchased software 19,515 19,004
Furniture and fixtures 8,105 8,203
Construction in progress 4,782 2,761
Total property, equipment and software 203,673 194,091
Accumulated depreciation and amortization (107,600) (97,450)
Total property, equipment and software, net $ 96,073 $ 96,641

~~(1)~~ ~~Includes $27.3 million and $13.9 million of development in progress as of September 30, 2021 and December 31, 2020, respectively.~~

Depreciation and amortization expense on property, equipment and software was $9.0 million and $29.1 million for the third quarter and first nine months of 2021, respectively. Depreciation and amortization expense on property, equipment and software was $11.4 million and $34.8 million for the third quarter and first nine months of 2020, respectively.

The Company recorded impairment expense on its leasehold improvements and furniture and fixtures of $0.4 million and $1.9 million for the third quarter and first nine months of 2020, respectively. No impairment expense was recorded in the third quarter and first nine months of 2021.

The Company recorded impairment expense on its internally developed software of $0.2 million and $0.8 million for the third quarter and first nine months of 2021, respectively. The Company recorded impairment expense on its internally developed software of $0.2 million and $4.7 million for the third quarter and first nine months of 2020, respectively.

~~The Company records the above expenses in “Depreciation and amortization” expense in the Condensed Consolidated Statements of Operations.~~

~~10. Goodwill and Intangible Assets~~

~~Goodwill~~

In connection with its acquisition of Radius in the first quarter of 2021, the Company recognized Goodwill of $75.7 million, which is fully allocated to the LendingClub Bank operating segment. Goodwill is not amortized, but ~~will be~~is subject to annual impairment ~~tests. See~~tests that are performed in the fourth quarter of each calendar year. For additional detail, see “Part II – Item 8. Financial Statements and Supplementary Data – Note ~~2. Business Acquisition.~~1. Summary of Significant Accounting Policies” in the Annual Report.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Intangible Assets

Intangible assets consist of customer ~~relationships, which include the core deposit intangible acquired during the first quarter of 2021 as part of the acquisition of Radius.~~relationships. Intangible assets, net of accumulated amortization, are included in “Other assets” on the ~~Company’s Condensed Consolidated~~ Balance ~~Sheets.~~Sheet. The gross and net carrying values and accumulated amortization ~~are~~were as ~~follows for the periods presented:~~follows:


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Gross carrying value	Gross carrying value	$	54,500	$	39,500	Gross carrying value	$	54,500	$	54,500
Accumulated amortization	Accumulated amortization	(31,979)		(28,073)		Accumulated amortization	(34,614)		(33,319)
Net carrying value	Net carrying value	$	22,521	$	11,427	Net carrying value	$	19,886	$	21,181

The customer relationship intangible assets are amortized on an accelerated basis from ten to fourteen years. Amortization expense associated with intangible assets for the ~~third quarter~~first quarters of 2022 and ~~first nine months of~~ 2021 was $1.3 million and ~~$3.9 million, respectively. Amortization expense associated with intangible assets for the third quarter and first nine months of 2020 was $0.8 million and $2.4~~$1.2 million, respectively. There was no impairment loss for the ~~third~~first quarters of 2022 and ~~first nine months of 2021 and 2020.~~2021.

The expected future amortization expense for intangible assets as of ~~September 30, 2021,~~March 31, 2022, is as follows:


2021		$	1,340
2022	2022	4,847		2022	$	3,553
2023	2023	4,198		2023	4,198
2024	2024	3,549		2024	3,549
2025	2025	2,901		2025	2,901
2026				2026	2,252
Thereafter	Thereafter	5,686		Thereafter	3,433
Total	Total	$	22,521	Total	$	19,886

~~11.~~10. Other Assets

Other assets consist of the following:


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Operating lease assets	Operating lease assets	$	79,862	$	74,037	Operating lease assets	$	74,882	$	77,316
Servicing assets (1)	Servicing assets (1)	66,290		56,347		Servicing assets (1)	74,195		70,370
Nonmarketable equity investments						Nonmarketable equity investments	34,694		31,726
Intangible assets, net (2)	Intangible assets, net (2)	22,521		11,427		Intangible assets, net (2)	19,886		21,181
Other investments		18,497		8,275
Other	Other	95,956		37,313		Other	104,168		101,953
Total other assets	Total other assets	$	283,126	$	187,399	Total other assets	$	307,825	$	302,546

(1) Loans underlying ~~loan~~ servicing ~~rights~~assets had a total outstanding principal balance of ~~$10.0~~$10.7 billion and ~~$10.1~~$10.3 billion as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

(2) See “Note ~~10.~~9. Goodwill and Intangible Assets” for additional detail.

5733

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

~~12.~~11. Deposits

Deposits consist of the following:


	~~September 30, 2021~~
~~Interest-bearing deposits:~~
~~Checking accounts~~	$	~~1,987,845~~
~~Savings and money market accounts~~	~~553,753~~
~~Certificates of deposit~~ ~~(1)~~	~~73,065~~
~~Total~~	$	~~2,614,663~~
~~Noninterest-bearing deposits~~	~~224,056~~
~~Total deposits~~	$	~~2,838,719~~


	March 31, 2022		December 31, 2021
Interest-bearing deposits:
Checking accounts	$	2,108,231	$	1,993,809
Savings and money market accounts	1,388,815		856,989
Certificates of deposit (1)	218,801		68,405
Total	$	3,715,847	$	2,919,203
Noninterest-bearing deposits	261,630		216,585
Total deposits	$	3,977,477	$	3,135,788

(1)Includes ~~$69.7~~$16.9 million and $14.0 million in denominations ~~of $100 thousand or more and $14.2 million in denominations in excess~~exceeding the Federal Deposit Insurance Corporation (FDIC) limit of $250 thousand ~~federal insurance limits.~~as of March 31, 2022 and December 31, 2021, respectively.

Total certificates of deposit at ~~September 30, 2021~~March 31, 2022 are scheduled to mature as follows:


2021		$	16,093
2022	2022	44,960		2022	$	46,338
2023	2023	10,708		2023	109,851
2024	2024	627		2024	61,050
2025	2025	231		2025	618
Thereafter		446
2026				2026	944

Total certificates of deposit	Total certificates of deposit	$	73,065	Total certificates of deposit	$	218,801

~~13.~~12. Short-term Borrowings and Long-term Debt

Short-term Borrowings:

Repurchase Agreements

The Company entered into repurchase agreements pursuant to which the Company sold securities (subject to an obligation to repurchase such securities at a specified future date and price) in exchange for cash. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company had ~~$46.1~~$13.2 million and ~~$105.0~~$27.8 million in aggregate debt outstanding under its repurchase agreements, respectively, which is ~~primarily~~ amortized over time through regular principal and interest payments collected from the pledged securities. At ~~September 30, 2021,~~March 31, 2022, a majority of the Company’s repurchase agreements have contractual repurchase dates ranging from September 2022 to March 2028. These contractual repurchase dates correspond to either a set repurchase schedule or to the maturity dates of the underlying securities, which have a remaining weighted-average estimated life ~~from 0.7 to 1.3 years.~~of less than one year. At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, these~~2021, the repurchase agreements bore interest rates ranging from ~~2.51%~~3.2% to ~~6.72%~~6.91% and ~~3.05%~~3.12% to ~~4.00%~~6.72%, respectively, which are either fixed or based on a benchmark of ~~either the three-month LIBOR rate or~~ the weighted-average interest rate of the securities sold plus a spread. Underlying securities retained and pledged as collateral under repurchase agreements were ~~$66.4~~$39.3 million and ~~$133.5~~$50.5 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

5834

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Long-term Debt:

Advances from PPPLF

As of ~~September 30,~~March 31, 2022 and December 31, 2021, outstanding PPPLF borrowings were ~~$391.9~~$193.4 million and $271.9 million, respectively, and are collateralized by SBA PPP loans originated by the Company. The maturity date of the PPPLF borrowings matches the maturity date of the SBA PPP loans. When loans are forgiven by the SBA, the corresponding PPPLF advance is paid by the Company. The interest rate on the PPPLF borrowings is fixed at 0.35%.

Retail Notes, Certificates, and Secured Borrowings

The Company issued member ~~payment dependent~~payment-dependent notes, ~~(Retail Notes)~~or retail notes, and ~~the LC Trust issued~~ certificates as a means to allow investors to invest in the corresponding loans. ~~Prior to the acquisition of Radius, investors~~Investors were able to purchase ~~Retail Notes, which were securities for which~~these retail notes and certificates, where the cash flows to investors were dependent upon principal and interest payments made by borrowers of ~~certain~~the underlying unsecured personal loans. As of December 31, 2020, LendingClub ceased offering and selling ~~Retail Notes.~~retail notes and certificates. The total balance of outstanding ~~Retail Notes~~retail notes and certificates will continue to decline as underlying borrower payments are made. The Company does not assume principal or interest rate risk on loans that were funded by ~~Retail Notes~~retail notes and certificates because loan balances, interest rates and maturities were matched and offset by an equal balance of notes and certificates with the exact same interest rates and maturities.~~See “Note 8. Fair Value of Assets and Liabilities” for information about the outstanding principal balance and net fair value adjustments for retail notes, certificates, and secured borrowings.~~

The following table provides the balances of retail notes, certificates and secured borrowings at fair value ~~at the end~~as of the periods ~~indicated:~~presented:

September 30, 2021 December 31, 2020
Retail notes $ 283,141 $ 583,219
Certificates 15,388 52,620
Secured borrowings (1)
12 935
Total retail notes, certificates and secured borrowings $ 298,541 $ 636,774

~~(1)~~ At December 31, 2020, a fair value of $0.8 million included in “Retail and certificate loans held for investment at fair value” was pledged as collateral for secured borrowings. There were no retail and certificate loans held for investment at fair value pledged as collateral for secured borrowings at September 30, 2021.


	March 31, 2022		December 31, 2021
Retail notes	$	162,171	$	219,435
Certificates and secured borrowings	6,735		10,284

Total retail notes, certificates and secured borrowings	$	168,906	$	229,719

Payable on Structured Program Borrowings

The Company consolidated certain sponsored Structured Program transactions through master trusts comprised of unsecured personal whole loans. The Company is the primary beneficiary of the trusts, which are consolidated. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the certificate participations and securities of certain consolidated VIEs held by third-party investors of ~~$89.3~~$20.3 million and ~~$152.8~~$65.5 million, respectively, are included in “Payable on Structured Program borrowings” inon the ~~Condensed Consolidated~~ Balance ~~Sheets~~Sheet and were secured by “Other loans held for investment at fair value” and “Loans held for sale” of ~~$82.2~~$15.0 million and ~~$148.3~~$62.7 million and restricted cash of ~~$12.5~~$7.3 million and ~~$13.5~~$11.2 million, respectively.

Other Long-term Debt

~~With the acquisition of Radius, the~~The Company ~~assumed~~has subordinated notes with an outstanding amount of $15.3 million as of ~~September 30,~~both March 31, 2022 and December 31, 2021. The subordinated notes are at a 6.5% fixed to floating rate and are due June 30, 2027. Fixed interest payments are due semiannually in arrears on June 30 and December ~~30 through~~

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~June 30, 2022.~~30. Subsequent to June 30, 2022, the rate resets quarterly at a rate equal to 3-month ~~LIBOR~~London Interbank Offered Rate (LIBOR) plus 4.64%. The subordinated notes are junior in right to the repayment in full of all existing claims of creditors and depositors of the Company. The subordinated notes may be redeemed, in whole or in part, at par plus accrued unpaid interest after June ~~27,~~ 2022 at the option of the Company.

~~14.~~

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

13. Other Liabilities

Other liabilities consist of the following:

September 30, 2021 December 31, 2020
Operating lease liabilities $ 95,543 $ 94,538
Accrued expenses 48,514 14,382
Accrued compensation 33,167 28,805
Payable to investors 20,910 40,286
Accounts payable 7,866 3,698
Contingent liabilities (1)
2,540 21,592
Other 57,300 41,250
Total other liabilities $ 265,840 $ 244,551

~~(1)~~ ~~See “Note 18. Commitments and Contingencies” for further information.~~


	March 31, 2022		December 31, 2021
Accounts payable and accrued expenses	$	92,737	$	100,972

Operating lease liabilities	88,180		91,588
Payable to investors	20,146		22,187


Other	97,251		89,204
Total other liabilities	$	298,314	$	303,951

~~15.~~14. Employee Incentive Plans

The Company’s ~~2014 Equity Incentive Plan (EIP) provides~~equity incentive plans provide for granting awards, including ~~restricted stock units (RSUs), performance-based restricted stock units (PBRSUs)~~RSUs, PBRSUs, cash awards and stock options to employees, officers and directors.

Stock-based Compensation

Stock-based compensation expense, included in “Compensation and benefits” expense on the ~~Company’s Condensed Consolidated Statements of Operations,~~Income Statement, was as follows for the periods presented:


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
RSUs and PBRSUs	RSUs and PBRSUs	$	16,691	$	14,986	$	49,130	$	46,667		RSUs and PBRSUs	$	15,674	$	14,743
Stock options	Stock options	118		136		582		788			Stock options	20		450

Total stock-based compensation expense	Total stock-based compensation expense	$	16,809	$	15,122	$	49,712	$	47,455		Total stock-based compensation expense	$	15,694	$	15,193

The Company capitalized ~~$1.2~~$1.7 million and ~~$3.3~~$1.0 million of stock-based compensation expense associated with developing software for internal use during the ~~third quarter~~first quarters of 2022 and ~~first nine months of~~ 2021, respectively. The Company capitalized $1.2 million and $4.0 million of stock-based compensation expense associated with developing software for internal use during the third quarter and first nine months of 2020, respectively.

Restricted Stock Units

The following table summarizes the activities for the Company’s RSUs:


	Number of Units	Weighted- Average Grant Date Fair Value
Unvested at December 31, 2021	9,703,751	$	12.44
Granted	3,784,854	$	14.24
Vested	(1,199,296)	$	11.88
Forfeited/expired	(540,695)	$	14.42
Unvested at March 31, 2022	11,748,614	$	12.98

During the first quarter of 2022, the Company granted 3,784,854 RSUs with an aggregate fair value of $53.9 million.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

~~Restricted Stock Units~~

~~The following table summarizes the activities for the Company’s RSUs during the first nine months of 2021:~~

Number
of Units Weighted-
Average
Grant Date
Fair Value
Unvested at December 31, 2020 11,395,112 $ 11.26
Granted 5,494,222 $ 13.47
Vested (3,800,624) $ 12.06
Forfeited/expired (2,082,511) $ 11.94
Unvested at September 30, 2021 11,006,199 $ 11.97

During the first ~~nine months~~quarters of 2022 and 2021, the Company ~~granted 5,494,222~~recognized $13.8 million and $13.5 million in stock-based compensation expense related to RSUs, ~~with an aggregate fair value of $74.0 million.~~respectively.

As of ~~September 30, 2021,~~March 31, 2022, there was ~~$122.2~~$140.4 million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over the next ~~2.3~~2.2 years.

Performance-based Restricted Stock Units

PBRSUs are restricted stock unit awards that are earned and eligible for vesting (if applicable) based upon the achievement of certain pre-established performance metrics over a specific performance period. The Company’s PBRSU awards have a separate market-based component and/or a performance-based component. Certain of the Company’s PBRSU awards have additional time-based vesting for any earned shares. With respect to PBRSU awards with market-based metrics, the compensation expense of the award is fixed at the time of grant (incorporating the probability of achieving the market-based metrics)~~, not adjusted for actual performance~~ and expensed over the performance and vesting period. With respect to PBRSU awards with performance-based metrics, the compensation expense of the award is set at the time of grant (assuming a target level of achievement), adjusted for actual performance during the performance period and expensed over the performance and vesting period.

The following table summarizes the activities for the Company’s ~~PBRSUs during the first nine months of 2021:~~PBRSUs:

Number
of Units Weighted-
Average
Grant Date
Fair Value
Unvested at December 31, 2020 1,441,311 $ 5.31
Granted 568,285 $ 22.54
Vested (60,848) $ 22.59
Forfeited/expired (158,123) $ 12.41
Unvested at September 30, 2021 1,790,625 $ 9.86


	Number of Units	Weighted- Average Grant Date Fair Value
Unvested at December 31, 2021	1,771,869	$	9.72
Granted	510,911	$	8.26


Unvested at March 31, 2022	2,282,780	$	9.40

During the ~~third~~first quarter ~~and~~of 2022, the Company granted 510,911 PBRSUs with an aggregate fair value of $4.2 million.

During the first ~~nine months~~quarters of 2022 and 2021, the Company recognized ~~$1.6~~$1.9 million and ~~$5.1 million in stock-based compensation expense related to PBRSUs, respectively. During the third quarter and first nine months of 2020, the Company recognized $0.7 million and $1.8~~$1.2 million in stock-based compensation expense related to PBRSUs, respectively.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

As of ~~September 30, 2021,~~March 31, 2022, there was ~~$12.4~~$11.7 million of unrecognized compensation cost related to unvested PBRSUs, which is expected to be recognized over the next ~~1.7~~1.6 years.

~~16.~~15. Income Taxes

For the ~~third~~first quarter of ~~2021,~~2022, the Company recorded an income tax expense of ~~$2.7~~$5.0 million primarily related to income tax expense for state jurisdictions that limit net operating loss utilization. For the first ~~nine months of~~quarter 2021, the Company recorded an income tax ~~expense~~benefit of ~~$0.1~~$2.8 million primarily related to ~~income tax expense for state jurisdictions that limit net operating loss utilization, partially offset by~~ changes in the deferred tax asset valuation allowance resulting from a deferred tax liability assumed with the acquisition of Radius. For the third quarter and first nine months of 2020, the Company recorded an income tax expense (benefit) of $(0.1) million and $0.2 million, respectively, primarily attributable to the tax effects of other comprehensive income associated with the Company’s available for sale portfolio.Acquisition.

The Company continues to recognize a full valuation allowance against net deferred tax assets. This determination was based on the assessment of the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets.

~~17.~~

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

16. Leases

Lessor Arrangements

~~Upon the acquisition of Radius, the~~The Company ~~assumed~~has lessor arrangements which consist of sales-type leases for equipment (Equipment Finance). Such arrangements may include options to renew or to purchase the leased equipment at the end of the lease term. For the ~~third quarter~~first quarters of 2022 and ~~first nine months of~~ 2021, interest earned on Equipment Finance was ~~$2.9~~$2.6 million and ~~$8.1~~$1.9 million, respectively, and is included in “Interest and fees on loans and leases held for investment” inon the ~~Company’s Condensed Consolidated Statements of Operations.~~Income Statement.

The components of Equipment Finance assets are as follows:


	~~September 30, 2021~~
~~Lease receivables~~	$	~~125,767~~
~~Unguaranteed residual asset values~~	~~41,923~~
~~Unearned income~~	~~(10,568)~~
~~Deferred fees~~	~~335~~
~~Total~~ ~~(1)~~	$	~~157,457~~

~~(1)~~ ~~See “Note 6. Loans and Leases Held for Investment, Net of Allowance For Loan and Lease Losses” for additional information.~~


	March 31, 2022		December 31, 2021
Lease receivables	$	118,512	$	122,927
Unguaranteed residual asset values	35,916		36,837
Unearned income	(11,206)		(10,989)
Deferred fees	558		380
Total	$	143,780	$	149,155

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

Future minimum lease payments based on maturity of the Company’s lessor arrangements ~~at September 30, 2021~~as of March 31, 2022 were as follows:

2021 $ 11,590
2022 43,075
2023 34,338
2024 25,975
2025 15,126
Thereafter 12,194
Total lease payments $ 142,298
Discount effect (16,531)
Present value of future minimum lease payments $ 125,767

~~The Company did not have any lessor arrangements with related parties or any deferred selling profits as of September 30, 2021.~~


2022	$	32,709
2023	36,881
2024	28,710
2025	17,570
2026	10,100
Thereafter	4,541
Total lease payments	$	130,511
Discount effect	(11,999)
Present value of future minimum lease payments	$	118,512

Lessee Arrangements

The Company has operating leases for its headquarters in San Francisco, California, as well as additional office space ~~for its origination and servicing operations~~ in the Salt Lake City, ~~area,~~ Utah, and ~~Westborough, Massachusetts. In addition, the Company assumed operating leases in~~ Boston, Massachusetts ~~upon the acquisition of Radius.~~areas. As of ~~September 30, 2021,~~March 31, 2022, the lease agreements have remaining lease terms ranging from approximately ~~one year~~two years to ~~ten~~nine years. Some of the lease agreements include options to extend the lease term for up to an additional fifteen years. In addition, the Company is the sublessor of a portion of its office space in San Francisco, with remaining lease terms of ~~approximately~~less than one year. As of ~~September 30, 2021,~~March 31, 2022, the Company pledged ~~$0.8~~$0.9 million of cash and $5.5 million in letters of credit as security deposits in connection with its lease agreements.

The right-of-use (ROU) assets and related liabilities recorded for the leases assumed upon acquisition were both approximately $5.0 million. The ROU assets were adjusted to reflect favorable terms of the lease, when compared to market terms, which resulted in an increase to the acquired ROU of $1.7 million. Lease liabilities assumed were measured based on the net present value of remaining future lease payments on the date of acquisition, with consideration given for options to extend or renew each lease. Remaining future lease payments were discounted at the Company’s estimated incremental borrowing rate on the date of acquisition.

~~The~~ Company reviewed operating lease ~~ROU~~right-of-use (ROU) assets for impairment. For the first ~~nine months~~quarter of 2021, the Company recognized ~~a net~~an impairment expense of $1.0 million on operating lease assets, included in ~~“Occupancy expense”~~Occupancy expense on the ~~Company’s Condensed Consolidated Statement of Operations.~~Income Statement. The Company did not recognize an impairment expense ~~on operating lease assets~~ during the ~~third~~first quarter of ~~2021. For the third quarter and first nine months of 2020, the Company recognized a net impairment expense of $0.9 million and $3.6 million, respectively, on operating lease assets.~~2022.

~~Balance sheet information as of September 30, 2021 and December 31, 2020 related to leases was as follows:~~

ROU Assets and Lease Liabilities Balance Sheet Classification September 30, 2021 December 31, 2020
Operating lease assets Other assets $ 79,862 $ 74,037
Operating lease liabilities (1)
Other liabilities $ 95,543 $ 94,538

~~(1)~~ ~~The difference between operating lease assets and operating lease liabilities is the unamortized balance of deferred rent.~~

6338

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Balance sheet information related to leases was as follows:


ROU Assets and Lease Liabilities	Balance Sheet Classification	March 31, 2022		December 31, 2021
Operating lease assets	Other assets	$	74,882	$	77,316
Operating lease liabilities (1)	Other liabilities	$	88,180	$	91,588

(1) The difference between operating lease assets and operating lease liabilities is the unamortized balance of deferred rent.

Components of net lease costs ~~for the third quarters and first nine months of 2021 and 2020~~ were as follows:


			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended March 31,
Net Lease Costs	Net Lease Costs	Income Statement Classification	2021		2020		2021		2020		Net Lease Costs	Income Statement Classification	2022		2021
Operating lease costs (1)	Operating lease costs (1)	Occupancy	$	(4,561)	$	(4,140)	$	(14,315)	$	(13,333)	Operating lease costs (1)	Occupancy	$	(4,480)	$	(4,977)
Sublease revenue	Sublease revenue	Other non-interest income	1,538		1,538		4,612		4,609		Sublease revenue	Other non-interest income	1,537		1,537
Net lease costs	Net lease costs		$	(3,023)	$	(2,602)	$	(9,703)	$	(8,724)	Net lease costs		$	(2,943)	$	(3,440)

(1) Includes variable lease costs of $0.4 million and ~~$0.4 million for the third quarters of 2021 and 2020, respectively. Includes variable lease costs of $0.9 million and $1.1~~$0.1 million for the first ~~nine months~~quarters of ~~2021~~2022 and ~~2020,~~2021, respectively.

Supplemental cash flow information related to the Company’s operating leases ~~for the third quarters and first nine months of 2021 and 2020~~ was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Non-cash operating activity:	Non-cash operating activity:									Non-cash operating activity:
Leased assets obtained in exchange for new and amended operating lease liabilities (1)	Leased assets obtained in exchange for new and amended operating lease liabilities (1)	$	—	$	—	$	12,914	$	84	Leased assets obtained in exchange for new and amended operating lease liabilities (1)	$	—	$	12,914

(1) Represents non-cash activity and, accordingly, is not reflected in the Condensed Consolidated Statements of Cash Flows. Amount includes noncash remeasurements of the operating lease ROU asset.

The Company’s future minimum undiscounted lease payments under operating leases and anticipated sublease revenue as of ~~September 30, 2021~~March 31, 2022 were as follows:


		Operating Lease Payments		Sublease Revenue		Net			Operating Lease Payments		Sublease Revenue		Net
2021		$	5,209	$	(1,699)	$	3,510
2022	2022	15,947		(2,918)		13,029		2022	$	11,135	$	(1,229)	$	9,906
2023	2023	12,465		—		12,465		2023	12,554		—		12,554
2024	2024	12,810		—		12,810		2024	12,810		—		12,810
2025	2025	13,163		—		13,163		2025	13,163		—		13,163
2026								2026	13,375		—		13,375
Thereafter	Thereafter	62,350		—		62,350		Thereafter	48,975		—		48,975
Total lease payments	Total lease payments	$	121,944	$	(4,617)	$	117,327	Total lease payments	$	112,012	$	(1,229)	$	110,783
Discount effect	Discount effect	26,401						Discount effect	(23,832)
Present value of future minimum lease payments	Present value of future minimum lease payments	$	95,543					Present value of future minimum lease payments	$	88,180

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

The weighted-average remaining lease term and discount rate used in the calculation of the Company’s operating lease assets and liabilities were as follows:

Lease Term and Discount Rate

~~September 30, 2021~~March 31, 2022

Weighted-average remaining lease term (in years)

~~8.52~~8.33

Weighted-average discount rate

~~5.41~~5.43

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~18.~~17. Commitments and Contingencies

Operating Lease Commitments

For discussion regarding the Company’s operating lease commitments, see “Note ~~17.~~16. Leases.”

~~Loan Purchase Obligation~~

Prior to the acquisition of Radius, under the Company’s loan account program with WebBank, which served as the Company’s primary issuing bank for loans facilitated through the Company’s platform, WebBank retained ownership of the loans it originated for two business days after origination. As part of this arrangement, the Company was committed to purchase any loans that have been fully approved at par plus accrued interest, at the conclusion of the ~~two~~ business days. As of December 31, 2020, the Company was committed to purchase loans with an outstanding principal balance of $13.8 million at par. The Company was not committed to purchase any such loans as of September 30, 2021 as it now originates loans and no longer has a loan account program with WebBank.

Loan Repurchase Obligations

The Company is generally required to repurchase loans or interests therein in the event of identity theft or certain other types of fraud on the part of the borrower or education and patient service providers. The Company may also repurchase loans or interests therein in connection with certain customer accommodations. In connection with certain ~~whole~~ loan ~~and Certificate Program~~ sales, ~~as well as to facilitate access to securitization markets,~~ the Company agreed to repurchase loans if representations and warranties made with respect to such loans were breached under certain circumstances. ~~In the case of certain securitization transactions, the Company also agreed to repurchase or substitute loans for which a borrower failed to make the first payment due under a loan.~~ The Company believes such provisions are customary and consistent with institutional loan and securitization market standards.

In addition to and distinct from the repurchase obligations described in the preceding paragraph, the Company performed certain administrative functions for a variety of retail and institutional investors, including executing, without discretion, loan investments as directed by the investor. To the extent loans did not meet the investor’s investment criteria at the time of issuance, or were transferred to the investor as a result of a system error by the Company, the Company repurchased such loans or interests therein at par.

As a result of the loan repurchase obligations described above, the Company repurchased $0.9 million and $2.8 million in loans or interests therein during the first nine months of 2021 and 2020, respectively.

Unfunded Loan Commitments

As of ~~September 30,~~March 31, 2022 and December 31, 2021, the contractual amount of unfunded loan commitments was ~~$115.5 million.~~$109.5 million and $110.8 million, respectively. See “Note 6.5. Loans and Leases Held for Investment, Net of Allowance For Loan and Lease Losses” for additional detail related to the reserve for unfunded lending commitments.

~~Purchase Commitments~~

If the Company could not arrange for other investors to invest in or purchase loans that the Company facilitated and that were originated by an issuing bank partner but did not meet the credit criteria for purchase by the issuing bank partner, the Company was contractually committed to purchase those loans. As of both September 30, 2021 and December 31, 2020, the Company had a $9.0 million deposit in a bank account to secure potential future purchases of these loans, if necessary. The funds are recorded as restricted cash on the Company’s Condensed Consolidated Balance Sheets.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

During the first nine months of 2021 and 2020, the Company was required to purchase $18.9 million and $28.9 million of loans facilitated by the Company or Springstone Financial LLC (a previously held wholly-owned subsidiary of LendingClub), respectively. These purchased loans are held on the Company’s Condensed Consolidated Balance Sheets and have a fair value of $7.3 million and $4.5 million as of September 30, 2021 and December 31, 2020, respectively.

Legal

The Company is subject to various claims brought in a litigation or regulatory context. These matters include lawsuits, including but not limited to, putative class action lawsuits and routine litigation matters arising in the ordinary course of business. In addition, the Company, and its business practices and compliance with licensing and other regulatory requirements, is subject to periodic exams, investigations, inquiries or requests, enforcement actions and other proceedings from federal orand state regulatory ~~examinations, investigations,~~ agencies, including from the federal banking regulators that directly regulate the Company and/or ~~actions relating to the Company’s business practices or licensing.~~LC Bank. The majority of these claims and proceedings relate to or arise from alleged state or federal law and regulatory violations, or are alleged commercial disputes or consumer complaints. The Company accrues for costs related to contingencies when a loss from such claims is probable and the amount of loss can be reasonably estimated. In determining whether a loss from a claim is probable and the loss can be reasonably estimated, the Company reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If the Company determines an unfavorable outcome is not probable or the amount of loss cannot be reasonably estimated, the Company does not accrue for a potential litigation loss. In those situations, the Company discloses an estimate or range of the reasonably possible losses, if such estimates can be made. Except as otherwise specifically noted below, at this time, the Company does not believe that it is possible to estimate the reasonably possible losses or a range of reasonably possible losses related to the matters described below.

~~FTC Lawsuit~~

In 2016, the Company received a formal request for information from the Federal Trade Commission (FTC). The FTC commenced an investigation concerning certain of the Company’s policies and practices and related legal compliance.

~~On April 25, 2018, the FTC filed a complaint in the Northern District of California (FTC v. LendingClub Corporation~~, No. 3:18-cv-02454) alleging causes of action for violations of the FTC Act, including claims of deception in connection with disclosures related to the origination fee associated with loans available through the Company’s platform, and in connection with communications relating to the likelihood of loan approval during the application process, and a claim of unfairness relating to certain unauthorized charges to borrowers’ bank accounts. The FTC’s complaint also alleged a violation of the Gramm-Leach-Bliley Act regarding the Company’s practices in delivering its privacy notice. Following the Court’s ruling on a motion to dismiss filed by the Company, the FTC filed an amended complaint on October 22, 2018, which reasserted the same causes of action from the original complaint. On November 13, 2018, the Company filed an answer to the amended complaint. Following a motion by the FTC to strike certain affirmative defenses in the answer, the Company filed an amended answer in the case on May 29, 2019. The discovery period in the case is closed.

On February 27, 2020, both the Company and the FTC filed various motions with the Court, including motions to exclude expert testimony and motions for summary judgment as to some or all of the claims in the case. The FTC also filed a motion for partial judgment on the pleadings in the case. These motions were heard by the Court on April 27, 2020. On June 1, 2020, the Court issued an order granting in part and denying in part both the Company’s and the FTC’s motions for summary judgment. The Court also denied the motions to exclude expert testimony and granted in part and denied in part the FTC’s motion for partial judgment on the pleadings. The FTC’s Gramm-Leach-Bliley Act claim has been dismissed from the case, but issues relating to the FTC’s three other claims will need to be tried. On July 30, 2020, the Company filed a motion to stay the litigation pending the U.S. Supreme Court’s decisions in two cases (F.T.C. v. Credit Bureau Center and AMG Capital Management, LLC v. F.T.C.) that

6640

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

raise the issue whether the FTC is entitled to seek monetary relief under Section 13(b) of the FTC Act. On August 20, 2020, the Court issued an order granting the Company’s motion to stay proceedings in the case until the U.S. Supreme Court issues its decision in the Credit Bureau Center and AMG Capital Management cases. As a result of this order, the trial that was scheduled for October 19, 2020 will need to be rescheduled at a later date following the Supreme Court’s ruling. The Supreme Court has vacated its prior grant of review in the Credit Bureau Center case but heard oral argument in the AMG Capital Management case on January 13, 2021. The impact of the Supreme Court decision could impact the Company’s case which is why the trial was stayed pending the Supreme Court decision. On April 22, 2021, the Supreme Court ruled in favor of AMG Capital Management ordering that the FTC does not currently have the authority to obtain equitable monetary relief under the statute that is also applicable in the Company’s matter with the FTC. On July 14, 2021, the Company entered into an agreement with the FTC to conclude the FTC’s investigation and litigation (the Settlement). Pursuant to the terms of the Settlement, LendingClub made an $18 million payment for consumer remediation. The Settlement does not include any admission of liability, and LendingClub does not expect that the Settlement will impact its current operations. On July 19, 2021, the Court approved the Settlement and this matter is now concluded.

~~Class Action Lawsuit Following Announcement of FTC Litigation~~

In May 2018, following the announcement of litigation by the FTC against the Company, putative shareholder class action litigation was filed in the U.S. District Court of the Northern District of California (~~Veal v. LendingClub Corporation et.al.,~~ No. 5:18-cv-02599) against the Company and certain of its current and former officers and directors alleging violations of federal securities laws in connection with the Company’s description of fees and compliance with federal privacy law in securities filings. On January 7, 2019, the lead plaintiffs filed a consolidated amended class action complaint which asserted the same causes of action as the original complaint and added additional allegations. That complaint was subsequently dismissed by the District Court with leave to amend. The lead plaintiffs filed a Second Amended Complaint on December 19, 2019, which modified and added certain allegations and dropped one of the former officer defendants as a defendant in the case, but otherwise advanced the same causes of action. On June 12, 2020, the District Court issued an order granting a motion to dismiss by the defendants without leave to amend, in part, and with leave to amend, in part. On July 27, 2020, the lead plaintiffs filed a notice with the District Court indicating their intention not to file a Third Amended Complaint and requesting that the District Court enter judgment. The District Court entered judgment and dismissed all claims in the case the same day. The lead plaintiffs appealed the judgment to the U.S. Court of Appeals for the Ninth Circuit (~~Veal et al. v. LendingClub Corporation, et al.~~, No. 20-16603). The Court of Appeals held oral arguments for the appeal on September 2, 2021. On September 21, 2021, the Court of Appeals affirmed the District Court’s dismissal of all claims against the defendants and, pending expiration of the period for the U.S. Supreme Court to grant certiorari in December 2021, this matter is now concluded.

Regulatory Examinations and Actions Relating to the Company’s Business Practices and Licensing

The Company is and has been subject to periodic inquiries and enforcement actions brought by federal and state regulatory agencies relating to the Company’s business practices, the required licenses to operate its business, and its manner of operating in accordance with the requirements of its ~~licenses. In~~licenses and the ~~past, the Company has successfully resolved inquiries in a manner that was not material~~regulatory framework applicable to ~~its results of financial operations in any period and that did not materially limit the Company’s ability to conduct~~ its business.

The Company is routinely subject to examination for compliance with applicable laws and regulations in the states in which it is licensed. ~~As of the date of this Report, the~~The Company is subject to examination by the New York Department of Financial Services (NYDFS) and other regulators. The Company periodically has discussions with various regulatory agencies regarding its business model and has engaged in similar discussions with the NYDFS. During the course of such discussions with the NYDFS, which remain ongoing, the Company decided to voluntarily comply with certain rules and regulations of the NYDFS while it was not a bank holding company operating a national bank.

~~LENDINGCLUB CORPORATION~~

~~Notes~~In the past, the Company has successfully resolved such matters in a manner that was not material to ~~Condensed Consolidated Financial Statements~~

~~(Tabular Amounts~~its results of financial operations in ~~Thousands, Except Share~~any period and ~~Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~national bank. No~~that did not materially limit the Company’s ability to conduct its business. However, no assurances can be given as to the timing, outcome or consequences of ~~this matter~~these matters or ~~others~~other similar matters if or as they arise.

Putative Class Actions

In February 2020, a putative class action lawsuit was filed against the Company in the U.S. District Court for the Northern District of California (Erceg v. LendingClub Corporation, No. 4:20-cv-01153). The lawsuit ~~alleges~~alleged violations of California and Massachusetts law based on allegations that the Company recorded a call with plaintiff without notifying him that it would be recorded. Plaintiff ~~seeks~~sought to represent a purported class of similarly situated individuals who had phone calls recorded by the Company without their knowledge and consent. The Company filed a motion to dismiss certain of plaintiff’s claims, strike nationwide class allegations, and, alternatively, to stay the litigation. Rather than oppose that motion, plaintiff filed an amended complaint. The Company again filed a motion to stay, or alternatively to dismiss certain of the claims in the amended complaint and to strike nationwide class allegations. That motion was heard by the Court on July 9, 2020. On July 28, 2020, the Court entered an order granting the Company’s motion to stay plaintiff’s California claims pending a decision by the California Supreme Court in a case involving the California Invasion of Privacy Act (Smith v. LoanMe, Inc.), dismissing with prejudice plaintiff’s claim under Massachusetts law, and denying the Company’s motion to strike plaintiff’s nationwide class allegations. In April 2021, the California Supreme Court issued a decision in the LoanMe case in a manner that ~~permits~~permitted plaintiff’s claims in the Company’s case to continue. The Company then filed its answer to plaintiff’s complaint and discovery began. The parties have since reached a ~~tentative~~ settlement, the terms of which are not material to the Company. ~~No assurances can be given as to the timing, outcome or consequences of this matter.~~This matter is now concluded.

In February 2021, a putative class action lawsuit was filed against the Company in the U.S. District Court for the Southern District of Texas (Bradford v. Lending Club Corporation, No. 4:21-cv-00588). The lawsuit ~~asserts~~asserted a cause of action under the Fair Credit Reporting Act (FCRA) based on allegations that the Company obtained plaintiff’s credit report without his consent or authorization and without a permissible purpose under the FCRA. Plaintiff ~~seeks~~sought to represent a class of allegedly similarly situated persons in the case and ~~seeks~~sought monetary, injunctive, and declaratory relief, among other relief. Plaintiff ~~has~~ amended the complaint to assert additional allegations regarding the Company’s purported requests for plaintiff’s credit report from another credit reporting agency. The Company has since filed its answer to plaintiff’s complaint and discovery ~~has begun.~~began. The Court ~~has~~ scheduled this matter for trial in September 2022. ~~No assurances can be given as~~The parties have since reached a settlement, the terms of which are not material to the ~~timing, outcome or consequences of this matter.~~Company. This matter is now concluded.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Certain Financial Considerations Relating to Litigation and Investigations

The Company had $2.5 million ~~and $21.6 million~~ in accrued contingent liabilities at ~~September 30, 2021~~both March 31, 2022 and December 31, ~~2020, respectively.~~2021.

In addition to the foregoing, the Company is subject to, and may continue to be subject to, legal proceedings and regulatory actions in the ordinary course of business. No assurances can be given as to the timing, outcome or consequences of any of these matters.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

~~19.~~18. Regulatory Requirements

LendingClub ~~a bank holding company,~~ and ~~LendingClub~~LC Bank ~~a nationally chartered association,~~ are subject to comprehensive supervision, examination and enforcement, and regulation by the FRB and the Office of the Comptroller of the Currency (OCC)~~. The Company and the Bank are each subject to~~, including generally similar capital adequacy requirements adopted by the FRB and the OCC, respectively. These requirements establish required minimum ratios for Common Equity Tier 1 (CET1) risk-based capital, Tier 1 risk-based capital, total risk-based capital and a Tier 1 leverage ratio; set risk-weighting for assets and certain other items for purposes of the risk-based capital ratios; and define what qualifies as capital for purposes of meeting the capital requirements. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the ~~Company’s financial statements.~~Company.

The minimum capital requirements under the Basel Committee on Banking Supervision standardized approach for U.S. banking organizations (U.S. Basel ~~III~~III) capital framework are: a CET1 risk-based capital ratio of 4.5%, a Tier 1 risk-based capital ratio of 6.0%, a total risk-based capital ratio of 8.0%, and a Tier 1 leverage ratio of 4.0%. Additionally, a ~~capital conservation buffer~~Capital Conservation Buffer (CCB) of 2.5% must be maintained above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases, and certain discretionary bonus payments. In addition to these guidelines, the regulators assess any particular institution’s capital adequacy based on numerous factors and may require a particular banking organization to maintain capital at levels higher than the generally applicable minimums prescribed under the U.S. Basel III capital framework. In this regard, and unless otherwise directed by the FRB and the OCC, we have made commitments for the Company and ~~the~~LC Bank ~~(for a minimum of three years following its formation)~~(until February 2024) to maintain a CET1 risk-based capital ratio of 11.0%, a Tier 1 risk-based capital ratio above 11.0%, a total risk-based capital ratio above 13.0%, and a Tier 1 leverage ratio of 11.0%.

The following table summarizes LC Bank’s regulatory capital amounts and ratios (in millions):


LendingClub Bank	March 31, 2022				December 31, 2021				Required Minimum plus Required CCB for Non-Leverage Ratios
	Amount		Ratio		Amount		Ratio
CET1 capital (1)	$	577.6	16.0	%	$	523.7	16.7	%	7.0	%
Tier 1 capital	$	577.6	16.0	%	$	523.7	16.7	%	8.5	%
Total capital	$	623.8	17.3	%	$	563.7	18.0	%	10.5	%
Tier 1 leverage	$	577.6	13.2	%	$	523.7	14.3	%	4.0	%
Risk-weighted assets	$	3,606.6	N/A		$	3,130.4	N/A		N/A
Quarterly adjusted average assets	$	4,379.8	N/A		$	3,667.7	N/A		N/A

N/A – Not applicable

(1) Consists of common stockholders’ equity as defined under U.S. GAAP and certain adjustments made in accordance with regulatory capital guidelines, including the addition of the CECL transitional benefit and deductions for goodwill and other intangible assets.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

The following table presents the regulatory capital and ratios of the Company (in millions):


LendingClub	March 31, 2022				December 31, 2021				Required Minimum plus Required CCB for Non-Leverage Ratios
	Amount		Ratio		Amount		Ratio
CET1 capital (1)	$	756.0	20.6	%	$	710.0	21.3	%	7.0	%
Tier 1 capital	$	756.0	20.6	%	$	710.0	21.3	%	8.5	%
Total capital	$	818.7	22.3	%	$	767.9	23.0	%	10.5	%
Tier 1 leverage	$	756.0	15.6	%	$	710.0	16.5	%	4.0	%
Risk-weighted assets	$	3,668.1	N/A		$	3,333.2	N/A		N/A
Quarterly adjusted average assets	$	4,859.8	N/A		$	4,301.7	N/A		N/A

N/A – Not applicable

In response to the COVID-19 pandemic, the FRB, OCC, and FDIC adopted a final rule related to the regulatory capital treatment of the allowance for credit losses under CECL. As permitted by the rule, the Company elected to delay the estimated impact of CECL on regulatory capital, resulting in a CET1 capital benefit of $35.5 million at December 31, 2021. This benefit is phased out over a three-year transition period that commenced on January 1, 2022 at a rate of 25% each year through January 1, 2025. Accordingly, the capital benefit included in CET1 capital was reduced to $26.7 million at March 31, 2022.

The Federal Deposit Insurance Act provides for a system of “prompt corrective action” (PCA). The PCA regime provides for capitalization categories ranging from “well-capitalized” to “critically undercapitalized.” An institution’s PCA category is determined primarily by its regulatory capital ratios. The PCA requires remedial actions and imposes limitations that become increasingly stringent as ~~an institution’s condition deteriorates and~~ its PCA capitalization category ~~declines. Among other things, institutions that are less than well-capitalized become~~

~~subject to increasingly stringent restrictions on their~~declines, including the ability to accept and/or rollover brokered deposits. At ~~September 30,~~March 31, 2022 and December 31, 2021, the Company’s and ~~the~~LC Bank’s regulatory capital ratios exceeded the thresholds required to be regarded as well-capitalized institutions and met all capital adequacy requirements to which they are subject. There have been no events or conditions since ~~September 30, 2021~~March 31, 2022 that management believes would change the Company’s categorization.

~~The following table summarizes~~Federal laws and regulations limit the ~~Bank’s regulatory~~dividends that a national bank may pay. Dividends that may be paid by a national bank without the express approval of the OCC are limited to that bank’s retained net profits for the preceding two calendar years plus retained net profits up to the date of any dividend declaration in the current calendar year. Retained net profits, as defined by the OCC, consist of net income less dividends declared during the period. Additionally, under the OCC Operating Agreement, LC Bank is required to obtain a written determination of non-objection from the OCC before declaring any dividend. No dividends were declared by LC Bank during the first quarters of 2022 and 2021.

Federal law restricts the amount and the terms of both credit and non-credit transactions between a bank and its nonbank affiliates. These covered transactions may not exceed 10% of the bank’s capital ~~amounts~~ and ~~ratios at September 30, 2021 (in millions):~~surplus (which for this purpose represents tier 1 and tier 2 capital, as calculated under the risk-based capital rules, plus the balance of the ACL excluded from tier 2 capital) with any single nonbank affiliate and 20% of the bank’s capital and surplus with all its nonbank affiliates. Covered transactions that are extensions of credit may require collateral to be pledged to provide added security to the bank.

LendingClub Bank
Required Minimum plus Required CCB for
Non-Leverage Ratios
September 30, 2021 Amount Ratio
CET1 capital $ 453.5 18.0 % 7.0 %
Tier 1 capital $ 453.5 18.0 % 8.5 %
Total capital $ 485.4 19.3 % 10.5 %
Tier 1 leverage $ 453.5 14.1 % 4.0 %
Risk-weighted assets $ 2,514.0 N/A N/A
Quarterly adjusted average assets $ 3,223.9 N/A N/A

~~N/A – Not applicable~~

6943

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

~~The following table presents the regulatory capital and ratios of the Company at September 30, 2021 (in millions):~~

LendingClub
Required Minimum plus Required CCB for
Non-Leverage Ratios
September 30, 2021 Amount Ratio
CET1 capital $ 656.2 22.8 % 7.0 %
Tier 1 capital $ 656.2 22.8 % 8.5 %
Total capital $ 708.2 24.6 % 10.5 %
Tier 1 leverage $ 656.2 16.2 % 4.0 %
Risk-weighted assets $ 2,881.1 N/A N/A
Quarterly adjusted average assets $ 4,049.8 N/A N/A

~~N/A – Not applicable~~

~~At September 30, 2021, $24.2 million of this capital benefit was applied to the computation of the Company’s common equity Tier 1 capital.~~

~~20.~~19. Other Non-interest Income and Non-interest Expense

Other non-interest income consists of the following:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Referral revenue	Referral revenue	$	4,293	$	1,264	$	9,649	$	3,503	Referral revenue	$	3,691	$	2,594
Realized losses on sales of securities available for sale and other investments		—		—		(96)		(1)
Realized gains (losses) on sales of securities available for sale and other investments										Realized gains (losses) on sales of securities available for sale and other investments	36		(244)
Other	Other	2,029		1,851		9,117		6,664		Other	6,164		3,257
Total other non-interest income	Total other non-interest income	$	6,322	$	3,115	$	18,670	$	10,166	Total other non-interest income	$	9,891	$	5,607

Other non-interest expense consists of the following:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Consumer credit services	Consumer credit services	$	4,266	$	2,413	$	11,798	$	10,082	Consumer credit services	$	5,524	$	3,292
Other	Other	11,341		11,854		30,575		28,596		Other	8,480		8,833
Total other non-interest expense	Total other non-interest expense	$	15,607	$	14,267	$	42,373	$	38,678	Total other non-interest expense	$	14,004	$	12,125

~~21.~~20. Segment Reporting

The Company defines operating segments to be components of the Company for which discrete financial information is evaluated regularly by the Company’s chief executive officer and chief financial officer to allocate resources and evaluate financial performance. This information is reviewed according to the legal organizational structure of the Company’s operations with products and services presented separately for the parent bank holding company and its wholly-owned subsidiary, ~~LendingClub~~LC Bank. Taxes are recorded on a separate entity basis whereby each operating segment determines income tax expense or benefit as if it filed a separate tax return. Differences between separate entity and consolidated tax returns are eliminated upon consolidation.

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

LendingClub Bank

The ~~LendingClub~~LC Bank operating segment represents the national bank legal entity and reflects ~~post-acquisition~~post-Acquisition operating activities. This segment provides a full complement of financial products and solutions, including loans, leases and deposits. It originates loans to individuals and businesses, retains loans for investment, sells loans to investors and manages ~~the acquired business~~ relationships with deposit holders.

All of the Company’s revenue is generated in the United States. No individual borrower or investor accounted for 10% or more of consolidated net revenue for any of the periods presented.

LendingClub Corporation (Parent Only)

The LendingClub Corporation ~~(parent~~(Parent only) operating segment represents the holding company legal entity and predominately reflects the ~~historical~~ operations of the ~~Company.~~Company prior to the Acquisition. This activity includes, but is not limited to, ~~the purchase and sale of~~servicing fee revenue for loans serviced prior to ~~February 1, 2021~~the Acquisition, and ~~ongoing issuances of education~~interest income and ~~patient finance loans that are originated by banking partners.~~

~~Financial information for~~interest expense related to the ~~segments is presented in the following tables:~~

LendingClub
Bank LendingClub
Corporation
(Parent only) Intercompany
Eliminations Total
Three Months Ended September 30, Three Months Ended September 30, Three Months Ended September 30, Three Months Ended September 30,
2021 2020 2021 2020 2021 2020 2021 2020
Non-interest income:
Marketplace revenue $ 151,109 $ — $ 23,447 $ 54,635 $ — $ — $ 174,556 $ 54,635
Other non-interest income 25,393 — 4,140 3,115 (23,211) — 6,322 3,115
Total non-interest income 176,502 — 27,587 57,750 (23,211) — 180,878 57,750
Interest income:
Interest income 64,606 — 18,254 46,773 — — 82,860 46,773
Interest expense (2,270) — (15,302) (33,479) — — (17,572) (33,479)
Net interest income 62,336 — 2,952 13,294 — — 65,288 13,294
Total net revenue 238,838 — 30,539 71,044 (23,211) — 246,166 71,044
Reversal of (provision for) credit losses (38,019) — 495 3,669 — — (37,524) 3,669
Non-interest expense (161,101) — (40,885) (109,112) 23,211 — (178,775) (109,112)
Income (Loss) before income tax benefit (expense) 39,718 — (9,851) (34,399) — — 29,867 (34,399)
Income tax benefit (expense) (4,670) — 12,607 74 (10,619) — (2,682) 74
Consolidated net income (loss) $ 35,048 $ — $ 2,756 $ (34,325) $ (10,619) $ — $ 27,185 $ (34,325)
Capital expenditures $ 9,451 $ — $ — $ 5,000 $ — $ — $ 9,451 $ 5,000
Depreciation and amortization $ 1,220 $ — $ 9,329 $ 12,348 $ — $ — $ 10,549 $ 12,348
Retail Program and Structured Program transactions.

7144

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

LendingClub
Bank LendingClub
Corporation
(Parent only) Intercompany
Eliminations Total
Eight Months Ended September 30, Nine Months Ended September 30, Nine Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020 2021 2020 2021 2020
Non-interest income:
Marketplace revenue $ 315,885 $ — $ 92,133 $ 175,993 $ — $ — $ 408,018 $ 175,993
Other non-interest income 73,433 — 12,519 10,166 (67,282) — 18,670 10,166
Total non-interest income 389,318 — 104,652 186,159 (67,282) — 426,688 186,159
Interest income:
Interest income 127,429 — 67,748 176,744 — — 195,177 176,744
Interest expense (5,489) — (59,989) (120,315) — — (65,478) (120,315)
Net interest income 121,940 — 7,759 56,429 — — 129,699 56,429
Total net revenue 511,258 — 112,411 242,588 (67,282) — 556,387 242,588
Reversal of (provision for) credit losses (96,938) — 3,287 (3,800) — — (93,651) (3,800)
Non-interest expense (374,782) — (165,666) (399,426) 67,282 — (473,166) (399,426)
Loss before income tax benefit (expense) 39,538 — (49,968) (160,638) — — (10,430) (160,638)
Income tax benefit (expense) 7,866 — 23,821 (245) (31,785) — (98) (245)
Consolidated net income (loss) $ 47,404 $ — $ (26,147) $ (160,883) $ (31,785) $ — $ (10,528) $ (160,883)
Capital expenditures $ 22,624 $ — $ 1,811 $ 24,583 $ — $ — $ 24,435 $ 24,583
Depreciation and amortization $ 2,810 $ — $ 31,013 $ 41,832 $ — $ — $ 33,823 $ 41,832
Financial information for the segments is presented in the following tables:


	LendingClub Bank				LendingClub Corporation (Parent only)				Intercompany Eliminations				Consolidated Total
	Three Months Ended March 31,		Two Months Ended March 31,		Three Months Ended March 31,				Three Months Ended March 31,		Two Months Ended March 31,		Three Months Ended March 31,
	2022		2021		2022		2021		2022		2021		2022		2021
Non-interest income:
Marketplace revenue	$	164,835	$	36,062	$	15,131	$	45,665	$	—	$	—	$	179,966	$	81,727
Other non-interest income	19,498		19,700		4,223		4,098		(13,830)		(18,191)		9,891		5,607
Total non-interest income	184,333		55,762		19,354		49,763		(13,830)		(18,191)		189,857		87,334

Interest income:
Interest income	99,823		17,498		11,830		27,092		—		—		111,653		44,590
Interest expense	(3,644)		(1,247)		(8,329)		(24,837)		—		—		(11,973)		(26,084)
Net interest income	96,179		16,251		3,501		2,255		—		—		99,680		18,506

Total net revenue	280,512		72,013		22,855		52,018		(13,830)		(18,191)		289,537		105,840

(Provision for) reversal of credit losses	(52,509)		(23,963)		—		2,470		—		—		(52,509)		(21,493)
Non-interest expense	(178,459)		(75,499)		(26,575)		(76,944)		13,830		18,191		(191,204)		(134,252)
Income (Loss) before income tax benefit (expense)	49,544		(27,449)		(3,720)		(22,456)		—		—		45,824		(49,905)
Income tax benefit (expense)	(12,355)		23		17,727		2,292		(10,360)		506		(4,988)		2,821
Consolidated net income (loss)	$	37,189	$	(27,426)	$	14,007	$	(20,164)	$	(10,360)	$	506	$	40,836	$	(47,084)
Capital expenditures	$	21,575	$	4,554	$	—	$	1,811	$	—	$	—	$	21,575	$	6,365
Depreciation and amortization	$	3,500	$	616	$	7,539	$	11,150	$	—	$	—	$	11,039	$	11,766

7245

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

LendingClub Bank LendingClub Corporation
(Parent only) Intercompany
Eliminations Total
September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020
Assets
Total cash and cash equivalents $ 825,538 $ — $ 100,815 $ 524,963 $ (64,202) $ — $ 862,151 $ 524,963
Restricted cash — — 84,827 103,522 (7,250) — 77,577 103,522
Securities available for sale at fair value 201,438 — 73,492 142,226 — — 274,930 142,226
Loans held for sale at fair value 82,483 — 69,677 121,902 — — 152,160 121,902
Loans and leases held for investment, net 2,603,256 — — — — — 2,603,256 —
Retail and certificate loans held for investment at fair value — — 298,541 636,686 — — 298,541 636,686
Other loans held for investment at fair value — — 27,229 49,954 — — 27,229 49,954
Property, equipment and software, net 26,457 — 69,616 96,641 — — 96,073 96,641
Investment in subsidiary — — 511,394 — (511,394) — — —
Goodwill 75,717 — — — — — 75,717 —
Other assets 199,050 — 176,994 187,399 (92,918) — 283,126 187,399
Total assets 4,013,939 — 1,412,585 1,863,293 (675,764) — 4,750,760 1,863,293
Liabilities and Equity
Total deposits 2,910,171 — — — (71,452) — 2,838,719 —
Short-term borrowings 321 — 45,789 104,989 — — 46,110 104,989
Advances from PPPLF 391,945 — — — — — 391,945 —
Retail notes, certificates and secured borrowings at fair value — — 298,541 636,774 — — 298,541 636,774
Payable on Structured Program borrowings — — 89,252 152,808 — — 89,252 152,808
Other long-term debt — — 15,563 — — — 15,563 —
Other liabilities 154,521 — 171,764 244,551 (60,445) — 265,840 244,551
Total liabilities 3,456,958 — 620,909 1,139,122 (131,897) — 3,945,970 1,139,122
Total equity 556,981 — 791,676 724,171 (543,867) — 804,790 724,171
Total liabilities and equity $ 4,013,939 $ — $ 1,412,585 $ 1,863,293 $ (675,764) $ — $ 4,750,760 $ 1,863,293

~~22. Related Party Transactions~~

Related party transactions must be reviewed and approved by the Audit Committee of the Company’s board of directors when not conducted in the ordinary course of business subject to the standard terms of the Company’s lending marketplace or certificate investment program. Any material amendment or modification to an existing

~~LENDINGCLUB CORPORATION~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)~~

~~(Unaudited)~~

related party transaction is also subject to the review and approval of the Audit Committee. Related party transactions may include any transaction between entities under common control or with a related person that has occurred since the beginning of the Company’s latest fiscal year or is currently proposed. The Company has defined related persons as members of the board of directors, executive officers, principal owners of the Company’s outstanding stock and any immediate family members of each such related person, as well as any other person or entity with significant influence over the Company’s management or operations.

Several of the Company’s executive officers and directors (including immediate family members) have made deposits and withdrawals to their investor accounts and purchased loans or interests therein. The Company believes all such transactions by related persons were made in the ordinary course of business and were transacted on terms and conditions that were not more favorable than those obtained by similarly situated third-party investors.

As of September 30, 2021, the Company had a $7.7 million investment and an approximate 21% ownership interest in an Investment Fund, a private fund that participates in a family of funds with other unrelated third parties. This family of funds purchases assets from third parties unrelated to the Company and, prior to 2020, purchased whole loans and interests in loans from the Company. The Company has requested a full redemption of its investment in the Investment Fund. The Company’s investment in the Investment Fund is recorded in “Other assets” on the Company’s Condensed Consolidated Balance Sheets. The Company believes all arrangements were on terms and conditions that were not more favorable than those obtained by other third-party investors. The Investment Fund provides audited financial statements annually and periodic investment statements throughout each calendar year on a delayed basis, which are used by the Company to evaluate performance and recoverability of its investment.

~~23. Subsequent Events~~

The Company has evaluated the impact of events that have occurred subsequent to September 30, 2021, through the date the condensed consolidated financial statements were filed with the SEC. Based on this evaluation, other than as recorded or disclosed within these condensed consolidated financial statements and related notes, the Company has determined no additional subsequent events were required to be recognized or disclosed.


	LendingClub Bank				LendingClub Corporation (Parent only)				Intercompany Eliminations				Consolidated Total
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Assets
Total cash and cash equivalents	$	1,014,464	$	659,919	$	119,711	$	88,268	$	(80,950)	$	(61,061)	$	1,053,225	$	687,126
Restricted cash	—		—		64,165		76,540		(3,658)		(80)		60,507		76,460
Securities available for sale at fair value	345,964		205,730		44,353		57,800		—		—		390,317		263,530
Loans held for sale	145,117		335,449		11,613		55,799		—		—		156,730		391,248
Loans and leases held for investment, net	3,234,311		2,754,737		—		—		—		—		3,234,311		2,754,737
Retail and certificate loans held for investment at fair value	—		—		168,906		229,719		—		—		168,906		229,719
Other loans held for investment at fair value	—		—		15,384		21,240		—		—		15,384		21,240
Property, equipment and software, net	57,482		36,424		54,021		61,572		—		—		111,503		97,996
Investment in subsidiary	—		—		591,051		557,577		(591,051)		(557,577)		—		—
Goodwill	75,717		75,717		—		—		—		—		75,717		75,717
Other assets	292,043		254,075		149,099		168,042		(133,317)		(119,571)		307,825		302,546
Total assets	5,165,098		4,322,051		1,218,303		1,316,557		(808,976)		(738,289)		5,574,425		4,900,319
Liabilities and Equity
Total deposits	4,062,084		3,196,929		—		—		(84,607)		(61,141)		3,977,477		3,135,788
Short-term borrowings	164		165		13,024		27,615		—		—		13,188		27,780
Advances from PPPLF	193,371		271,933		—		—		—		—		193,371		271,933
Retail notes, certificates and secured borrowings at fair value	—		—		168,906		229,719		—		—		168,906		229,719
Payable on Structured Program borrowings	—		—		20,347		65,451		—		—		20,347		65,451
Other long-term debt	—		—		15,388		15,455		—		—		15,388		15,455
Other liabilities	218,365		218,775		143,701		150,727		(63,752)		(65,551)		298,314		303,951
Total liabilities	4,473,984		3,687,802		361,366		488,967		(148,359)		(126,692)		4,686,991		4,050,077
Total equity	691,114		634,249		856,937		827,590		(660,617)		(611,597)		887,434		850,242
Total liabilities and equity	$	5,165,098	$	4,322,051	$	1,218,303	$	1,316,557	$	(808,976)	$	(738,289)	$	5,574,425	$	4,900,319

7446

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes that appear in this Quarterly Report on Form 10-Q (Report). In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, and in “Part I – Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (Annual Report) as modified by “Part II – Item 1A. Risk Factors” in this Report. The forward-looking statements included in this Report are made only as of the date hereof.

7547

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Overview

LendingClub is America’s leading digital marketplace bank. The Company was founded in 2006 ~~to transform~~and brought a traditional credit product – the ~~banking industry~~installment loan – into the digital age by leveraging technology, data science, and a unique marketplace model. ~~We started by bringing a traditional credit product, the installment loan, into the digital age and~~In doing so, we became one of the largest ~~provider~~providers of unsecured personal loans in the United States. OnIn February 1, 2021, LendingClub completed the acquisition (the Acquisition) of an award-winning digital bank, Radius, ~~Bancorp, Inc. (Radius), whereby LendingClub became~~becoming a bank holding company and ~~formed LendingClub~~forming LC Bank ~~National Association (the Bank)~~ as its wholly-owned ~~subsidiary, through which we now~~subsidiary. We operate the vast majority of our ~~business. With~~business through LC Bank, as a lender and originator of loans and as a regulated bank in the ~~acquisition, we combined the complementary strengths of the Company’s digital lending capabilities with an award-winning digital bank.~~United States.

Executive Summary

•Loan originations: Total loan originations for the ~~third~~first quarter of ~~2021~~2022 were ~~$3.1~~$3.2 billion, improving ~~14%~~117% year-over-year and 5% sequentially. The increase was primarily driven by the growth in unsecured personal loan origination volume.

•Total net revenue: Total net revenue for the ~~third~~first quarter of ~~2021~~2022 was ~~$246.2~~$289.5 million, improving ~~20%~~174% year-over-year and 10% sequentially, ~~and~~ outpacing origination growth of ~~14%.~~117% and 5%, respectively. The increase was primarily due to the growth in marketplace revenue and increased net interest ~~income from the retained portfolio of consumer loans.~~income.

◦Marketplace revenue: Marketplace revenue for the ~~third~~first quarter of ~~2021~~2022 was ~~$174.6~~$180.0 million, improving ~~15%~~120% year-over-year and 6% sequentially. The increase was primarily driven by a higher volume of marketplace loans sold.

◦Net interest income: Net interest income for the ~~third~~first quarter of ~~2021~~2022 was ~~$65.3~~$99.7 million, improving ~~42%~~439% year-over-year and 20% sequentially. The increase was primarily ~~driven~~due to an increase in unsecured personal loans retained in ~~the~~current and prior periods as held for investment ~~loan portfolio.~~(HFI).

•Provision for credit losses: Provision for credit losses for the ~~third~~first quarter of ~~2021~~2022 was ~~$37.5~~$52.5 million, increasing 8%144% year-over-year and 16% sequentially. The increase was primarily ~~driven by~~due to an increase in unsecured personal loans retained ~~in the held for investment loan portfolio.~~as HFI.

•Total non-interest expense: Total non-interest expense for the ~~third~~first quarter of ~~2021~~2022 was ~~$178.8~~$191.2 million, increasing ~~12%~~42% year-over-year and 2% sequentially. The increase was primarily driven by an increase in variable marketing expenses based on higher origination volume.

•Consolidated net income: Consolidated net income for the ~~third~~first quarter of ~~2021~~2022 was ~~$27.2~~$40.8 million, improving ~~190%~~by $87.9 million year-over-year and 40% sequentially.

•Loans and leases held for investment:Loans and leases held for investment, net of allowance for loan and lease losses, were $3.2 billion at March 31, 2022, growing 56% year-over-year and 17% sequentially.

•Deposits: Total deposits at ~~September 30, 2021~~March 31, 2022 were ~~$2.8~~$4.0 billion, growing ~~12%~~68% year-over-year and 27% sequentially, ~~in line with~~supporting growth in ~~our~~ loans ~~held for investment.~~

•~~Notable items:~~ ~~In the third quarter of 2021~~, net income of $27.2 million and diluted earnings per share of $0.26 were negatively impacted by $51.5 million of notable items (net of tax): $34.0 million of Current Expected Credit Loss (CECL) provisioning and $17.5 million of net revenue deferrals, both driven by strong retained loan growth. These items reduced our diluted earnings per share by $0.49 in the ~~third quarter~~ of ~~2021~~.HFI.

The above summary should be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations in its entirety. For additional discussion related to our operating segments, see “Segment Information.”

7648

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Financial Highlights

We regularly review several metrics to evaluate our business, measure our performance, identify trends, formulate financial projections and make strategic decisions. The following presents our ~~selected~~select financial ~~data:~~metrics for the periods presented:


		Three Months Ended									Nine Months Ended September 30,							Three Months Ended
		September 30, 2021			June 30, 2021			September 30, 2020			2021			2020				March 31, 2022			December 31, 2021			March 31, 2021
Noninterest income		$	180,878		$	158,476		$	57,750		$	426,688		$	186,159
Non-interest income																	Non-interest income	$	189,857		$	179,111		$	87,334
Net interest income	Net interest income	$	65,288		$	45,905		13,294			$	129,699		56,429			Net interest income	$	99,680		$	83,132		$	18,506
Total net revenue	Total net revenue	$	246,166		$	204,381		$	71,044		$	556,387		$	242,588		Total net revenue	$	289,537		$	262,243		$	105,840

Consolidated net income (loss)	Consolidated net income (loss)	$	27,185		$	9,371		$	(34,325)		$	(10,528)		$	(160,883)		Consolidated net income (loss)	$	40,836		$	29,108		$	(47,084)

EPS – basic		$	0.27		$	0.10		$	(0.38)		$	(0.11)		$	(2.35)
EPS – diluted		$	0.26		$	0.09		$	(0.38)		$	(0.11)		$	(2.35)
Basic EPS																	Basic EPS	$	0.40		$	0.29		$	(0.49)
Diluted EPS																	Diluted EPS	$	0.39		$	0.27		$	(0.49)

LendingClub Bank Performance Metrics:	LendingClub Bank Performance Metrics:																LendingClub Bank Performance Metrics:
Net interest margin		7.1		%	5.5		%	N/A			5.7		%	N/A

Efficiency ratio (1)	Efficiency ratio (1)	67.5		%	69.0		%	N/A			73.3		%	N/A			Efficiency ratio (1)	63.6		%	69.5		%	104.8		%
Return on average equity (ROE)	Return on average equity (ROE)	26.5%			34.7		%	N/A			14.8		%	N/A			Return on average equity (ROE)	22.5		%	21.7		%	N/A
Return on average total assets (ROA)	Return on average total assets (ROA)	3.7%			4.7		%	N/A			2.1		%	N/A			Return on average total assets (ROA)	3.1		%	3.1		%	N/A

LendingClub Bank Capital Ratios:	LendingClub Bank Capital Ratios:																LendingClub Bank Capital Ratios:
Common Equity Tier 1 Capital Ratio		18.0		%	18.7		%	N/A			18.0		%	N/A
CET1 1 Capital Ratio																	CET1 1 Capital Ratio	16.0		%	16.7		%	20.9		%
Tier 1 Leverage Ratio	Tier 1 Leverage Ratio	14.1		%	13.5		%	N/A			14.1		%	N/A			Tier 1 Leverage Ratio	13.2		%	14.3		%	12.9		%

Consolidated LendingClub Corporation Performance Metrics:	Consolidated LendingClub Corporation Performance Metrics:																Consolidated LendingClub Corporation Performance Metrics:
Net interest margin	Net interest margin	6.3		%	4.7		%	N/A			4.8		%	N/A			Net interest margin	8.3		%	7.6		%	1.8		%
Efficiency ratio (1)	Efficiency ratio (1)	72.6		%	78.4		%	N/A			85.0		%	N/A			Efficiency ratio (1)	66.0		%	71.8		%	126.8		%
Return on average equity (ROE)	Return on average equity (ROE)	13.8		%	5.0		%	N/A			N/A			N/A			Return on average equity (ROE)	18.7		%	14.1		%	N/A
Return on average total assets (ROA)	Return on average total assets (ROA)	2.4%			0.8		%	N/A			N/A			N/A			Return on average total assets (ROA)	3.1		%	2.4		%	N/A
Marketing as a % of loan originations	Marketing as a % of loan originations	1.6%			1.3		%	0.4		%	1.4		%	1.3		%	Marketing as a % of loan originations	1.7		%	1.7		%	1.3		%

Loan Originations (in millions)(2):
Loan Originations (in millions):																	Loan Originations (in millions):
Marketplace loans	Marketplace loans	$	2,471		$	2,182		$	584		$	5,792		$	3,431		Marketplace loans	$	2,360		$	2,308		$	1,139
Loan originations held for investment	Loan originations held for investment	636			541			—			1,521			—			Loan originations held for investment	856			761			344
Total loan originations	Total loan originations	$	3,107		$	2,722		$	584		$	7,312		$	3,431		Total loan originations	$	3,217		$	3,069		$	1,483

Servicing portfolio AUM (in millions) (3)		$	11,592		$	10,741		$	12,267		$	11,592		$	12,267
AUM (in millions) (2)																	AUM (in millions) (2)	$	13,341		$	12,463		$	10,271

N/A – Not applicable

(1) Calculated as the ratio of non-interest expense to total net revenue.

(2) ~~Includes~~Assets under management (AUM) reflects loans serviced on our platform, which includes outstanding balances of unsecured personal loans, auto refinance loans and education and patient finance loans ~~only.~~

~~(3)~~ ~~Loans serviced on our marketplace platform, which includes personal and auto loans~~ serviced for others and ~~those~~ retained for investment by the Company.

7749

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)


		As of the Three Months Ended								As of the Three Months Ended
		September 30, 2021			June 30, 2021			September 30, 2020				March 31, 2022			December 31, 2021			March 31, 2021

Balance Sheet Data:	Balance Sheet Data:										Balance Sheet Data:
Loans and leases held for investment, net, excluding PPP loans	Loans and leases held for investment, net, excluding PPP loans	$	2,235,698		$	1,791,492		$	—		Loans and leases held for investment, net, excluding PPP loans	$	3,049,325		$	2,486,440		$	1,414,900
PPP loans	PPP loans	$	367,558		$	507,553		$	—		PPP loans	$	184,986		$	268,297		$	664,400
Total loans and leases held for investment, net	Total loans and leases held for investment, net	$	2,603,256		$	2,299,045		$	—		Total loans and leases held for investment, net	$	3,234,311		$	2,754,737		$	2,079,300
Total assets	Total assets	$	4,750,760		$	4,370,101		$	1,979,457		Total assets	$	5,574,425		$	4,900,319		$	4,491,089
Total deposits	Total deposits	$	2,838,719		$	2,539,704		$	—		Total deposits	$	3,977,477		$	3,135,788		$	2,373,437
Total liabilities	Total liabilities	$	3,945,970		$	3,607,742		$	1,245,565		Total liabilities	$	4,686,991		$	4,050,077		$	3,757,954
Total equity	Total equity	$	804,790		$	762,359		$	733,892		Total equity	$	887,434		$	850,242		$	733,135

Allowance Ratios:	Allowance Ratios:										Allowance Ratios:
Allowance for loan and lease losses to total loans and leases held for investment		3.9		%	3.0		%	N/A
Allowance for loan and lease losses to total loans and leases held for investment, excluding PPP loans		4.5		%	3.8		%	N/A
Allowance for loan and lease losses to consumer loans and leases held for investment		5.2		%	4.3		%	N/A
Allowance for loan and lease losses to commercial loans and leases held for investment		1.6		%	1.5		%	N/A
Allowance for loan and lease losses to commercial loans and leases held for investment, excluding PPP loans		2.6		%	2.8		%	N/A
ALLL to total loans and leases held for investment											ALLL to total loans and leases held for investment	5.5		%	5.0		%	1.7		%
ALLL to total loans and leases held for investment, excluding PPP loans											ALLL to total loans and leases held for investment, excluding PPP loans	5.8		%	5.5		%	2.5		%
ALLL to consumer loans and leases held for investment											ALLL to consumer loans and leases held for investment	6.6		%	6.4		%	2.3		%
ALLL to commercial loans and leases held for investment											ALLL to commercial loans and leases held for investment	1.8		%	1.8		%	1.3		%
ALLL to commercial loans and leases held for investment, excluding PPP loans											ALLL to commercial loans and leases held for investment, excluding PPP loans	2.3		%	2.6		%	1.7		%

~~N/A – Not applicable~~

7850

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Results of Operations

The following ~~tables set~~table sets forth the Condensed Consolidated Statements of Operations (Income Statement) data for each of the periods presented:
Three Months Ended Change (%)
September 30, 2021 June 30,
2021 September 30, 2020 Q3 2021
vs
Q3 2020 Q3 2021
vs
Q2 2021
Non-interest income:
Marketplace revenue $ 174,556 $ 151,735 $ 54,635 N/M 15 %
Other non-interest income 6,322 6,741 3,115 103 % (6) %
Total non-interest income 180,878 158,476 57,750 N/M 14 %
Interest income:
Interest on loans held for sale 8,536 8,694 14,916 (43) % (2) %
Interest and fees on loans and leases held for investment 57,644 39,068 — N/M 48 %
Interest on retail and certificate loans held for investment at fair value 12,172 16,014 27,117 (55) % (24) %
Interest on other loans held for investment at fair value 973 1,222 1,948 (50) % (20) %
Interest on securities available for sale 3,180 2,539 2,754 15 % 25 %
Other 355 190 38 N/M 87 %
Total interest income 82,860 67,727 46,773 77 % 22 %
Interest expense:
Interest on deposits 1,899 1,699 — N/M 12 %
Interest on short-term borrowings 849 1,003 3,179 (73) % (15) %
Interest on retail notes, certificates and secured borrowings 12,172 16,014 27,117 (55) % (24) %
Interest on Structured Program borrowings 2,120 2,668 3,046 (30) % (21) %
Interest on other long-term debt 532 438 137 N/M 21 %
Total interest expense 17,572 21,822 33,479 (48) % (19) %
Net interest income 65,288 45,905 13,294 N/M 42 %
Total net revenue 246,166 204,381 71,044 N/M 20 %
Provision for (reversal of) credit losses 37,524 34,634 (3,669) N/M 8 %
Non-interest expense:
Compensation and benefits 73,304 71,925 58,649 25 % 2 %
Marketing 50,782 35,107 2,135 N/M 45 %
Equipment and software 10,297 9,281 6,430 60 % 11 %
Occupancy 6,486 6,157 6,466 — % 5 %
Depreciation and amortization 10,549 11,508 12,348 (15) % (8) %
Professional services 11,750 11,520 8,817 33 % 2 %
Other non-interest expense 15,607 14,641 14,267 9 % 7 %
Total non-interest expense 178,775 160,139 109,112 64 % 12 %
Income (Loss) before income tax expense 29,867 9,608 (34,399) 187 % N/M
Income tax expense (benefit) 2,682 237 (74) N/M N/M
Consolidated net income (loss) $ 27,185 $ 9,371 $ (34,325) 179 % 190 %

~~N/M – Not meaningful~~


	Three Months Ended						Change (%)
	March 31, 2022		December 31, 2021		March 31, 2021		Q1 2022 vs Q1 2021		Q1 2022 vs Q4 2021
Non-interest income:
Marketplace revenue	$	179,966	$	170,562	$	81,727	120	%	6	%
Other non-interest income	9,891		8,549		5,607		76	%	16	%
Total non-interest income	189,857		179,111		87,334		117	%	6	%

Interest income:
Interest on loans held for sale	7,450		7,153		5,157		44	%	4	%
Interest and fees on loans and leases held for investment	91,442		76,964		15,301		498	%	19	%
Interest on retail and certificate loans held for investment at fair value	6,969		9,236		20,262		(66)	%	(25)	%
Interest on other loans held for investment at fair value	593		762		1,479		(60)	%	(22)	%
Interest on securities available for sale	4,511		3,071		2,235		102	%	47	%
Other	688		469		156		N/M		47	%
Total interest income	111,653		97,655		44,590		150	%	14	%

Interest expense:
Interest on deposits	3,438		2,616		1,014		239	%	31	%
Interest on short-term borrowings	435		561		1,264		(66)	%	(22)	%
Interest on retail notes, certificates and secured borrowings	6,969		9,236		20,262		(66)	%	(25)	%
Interest on Structured Program borrowings	764		1,642		3,208		(76)	%	(53)	%
Interest on other long-term debt	367		468		336		9	%	(22)	%
Total interest expense	11,973		14,523		26,084		(54)	%	(18)	%

Net interest income	99,680		83,132		18,506		439	%	20	%

Total net revenue	289,537		262,243		105,840		174	%	10	%

Provision for credit losses	52,509		45,149		21,493		144	%	16	%

Non-interest expense:
Compensation and benefits	81,610		78,741		64,420		27	%	4	%
Marketing	55,080		50,708		19,545		182	%	9	%
Equipment and software	11,046		12,019		7,893		40	%	(8)	%
Occupancy	6,019		4,706		6,900		(13)	%	28	%
Depreciation and amortization	11,039		10,462		11,766		(6)	%	6	%
Professional services	12,406		12,699		11,603		7	%	(2)	%
Other non-interest expense	14,004		18,885		12,125		15	%	(26)	%
Total non-interest expense	191,204		188,220		134,252		42	%	2	%

Income (Loss) before income tax benefit (expense)	45,824		28,874		(49,905)		N/M		59	%
Income tax benefit (expense)	(4,988)		234		2,821		N/M		N/M
Consolidated net income (loss)	$	40,836	$	29,108	$	(47,084)	N/M		40	%

The analysis below is presented for the following periods: First quarter of 2022 compared to the first quarter of

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Nine Months Ended September 30,
2021 2020 Change (%)
Non-interest income:
Marketplace revenue $ 408,018 $ 175,993 132 %
Other non-interest income 18,670 10,166 84 %
Total non-interest income 426,688 186,159 129 %
Interest income:
Interest on loans held for sale 22,387 67,579 (67) %
Interest and fees on loans and leases held for investment 112,013 — N/M
Interest on retail and certificate loans held for investment at fair value 48,448 92,193 (47) %
Interest on other loans held for investment at fair value 3,674 6,021 (39) %
Interest on securities available for sale 7,954 9,930 (20) %
Other 701 1,021 (31) %
Total interest income 195,177 176,744 10 %
Interest expense:
Interest on deposits 4,612 — N/M
Interest on short-term borrowings 3,116 16,332 (81) %
Interest on retail notes, certificates and secured borrowings 48,448 92,193 (47) %
Interest on Structured Program borrowings 7,996 11,418 (30) %
Interest on other long-term debt 1,306 372 N/M
Total interest expense 65,478 120,315 (46) %
Net interest income 129,699 56,429 130 %
Total net revenue 556,387 242,588 129 %
Provision for credit losses 93,651 3,800 N/M
Non-interest expense:
Compensation and benefits 209,649 199,991 5 %
Marketing 105,434 43,030 145 %
Equipment and software 27,471 20,931 31 %
Occupancy 19,543 22,241 (12) %
Depreciation and amortization 33,823 41,832 (19) %
Professional services 34,873 32,723 7 %
Other non-interest expense 42,373 38,678 10 %
Total non-interest expense 473,166 399,426 18 %
Loss before income tax expense (10,430) (160,638) (94) %
Income tax expense 98 245 (60) %
Consolidated net loss $ (10,528) $ (160,883) (93) %

~~N/M – Not meaningful~~

~~The analysis below is presented for the following periods: Third quarter of~~ 2021 ~~compared to the second quarter of 2021 (Sequential), third quarter of 2021 compared to the third quarter of 2020~~ (Quarter Over Quarter) and ~~the~~ first ~~nine months~~quarter of ~~2021~~2022 compared to the ~~first nine months~~fourth quarter of ~~2020 (Nine Months Over Nine Months)~~2021 (Sequential). ~~Given that~~As a result of the timing of the Company’s acquisition of Radius ~~occurred~~ on February 1, 2021, ~~the~~our results of operations discussed below for the ~~first nine~~three month period ended March 31, 2021 only reflect the revenue and expenses generated by LendingClub Bank for two months of ~~2021 reflect results of the Bank since the date of acquisition.~~such period.

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

Marketplace Revenue

Marketplace revenue consists of the following:

Three Months Ended Change (%)
September 30, 2021 June 30,
2021 September 30, 2020 Q3 2021
vs
Q3 2020 Q3 2021
vs
Q2 2021
Origination fees (1)
$ 129,125 $ 113,802 $ 24,372 N/M 13 %
Servicing fees 20,819 22,714 25,850 (19) % (8) %
Gain on sales of loans 21,907 19,317 7,739 183 % 13 %
Net fair value adjustments (2)
2,705 (4,098) (3,326) 181 % (166) %
Total marketplace revenue $ 174,556 $ 151,735 $ 54,635 N/M 15 %

Nine Months Ended September 30,
2021 2020 Change (%)
Origination fees (1)
$ 298,486 $ 164,489 81 %
Servicing fees 66,699 86,924 (23) %
Gain on sales of loans 49,547 23,724 109 %
Net fair value adjustments (2)
(6,714) (99,144) (93) %
Total marketplace revenue $ 408,018 $ 175,993 132 %

~~N/M – Not meaningful~~

~~(1)~~ ~~Include transaction fees from issuing bank partners in connection with the Company’s role in facilitating certain loan originations.~~

~~(2)~~ Certain prior period valuation adjustments on securities available for sale and Structured Program borrowings were reclassified from net fair value adjustments to provision for credit losses and interest expense, respectively, to conform to the current period presentation.


	Three Months Ended						Change (%)
	March 31, 2022		December 31, 2021		March 31, 2021		Q1 2022 vs Q1 2021		Q1 2022 vs Q4 2021
Origination fees	$	122,093	$	118,353	$	55,559	120	%	3	%
Servicing fees	18,514		20,940		23,166		(20)	%	(12)	%
Gain on sales of loans	24,110		20,569		8,323		190	%	17	%
Net fair value adjustments	15,249		10,700		(5,321)		N/M		43	%
Total marketplace revenue	$	179,966	$	170,562	$	81,727	120	%	6	%

Origination Fees

Origination fees recorded as a component of marketplace revenue are primarily fees earned related to originating and issuing unsecured personal loans that are held for sale. In addition, origination fees include transaction fees that ~~are~~were paid to ~~the Company~~us by issuing bank partners or education and patient service providers for the work performed in facilitating the origination of loans by the issuing banks. ~~During~~Following the ~~first quarter of 2021,~~Acquisition, LC Bank became the ~~Company ceased using issuing bank partners to originate~~originator and lender for all unsecured personal and auto refinance loans and ~~auto~~the majority of education and patient finance loans.

The following table presents loan origination volume during each of the periods set forth below:


		Three Months Ended						Nine Months Ended					Three Months Ended
		September 30, 2021		June 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			March 31, 2022		December 31, 2021		March 31, 2021
Marketplace loans	Marketplace loans	$	2,471,152	$	2,181,620	$	584,127	$	5,791,508	$	3,431,389	Marketplace loans	$	2,360,238	$	2,307,601	$	1,138,736
Loan originations held for investment	Loan originations held for investment	635,514		540,823		—		1,520,751		—		Loan originations held for investment	856,312		761,455		344,414
Total loan originations ~~(1)~~	Total loan originations ~~(1)~~	$	3,106,666	$	2,722,443	$	584,127	$	7,312,259	$	3,431,389	Total loan originations ~~(1)~~	$	3,216,550	$	3,069,056	$	1,483,150

~~(1)~~ ~~Includes unsecured personal loans, auto loans, and education and patient finance loans only.~~

Origination fees ~~recorded as a component of marketplace revenue~~ were ~~$129.1~~$122.1 million and ~~$113.8~~$55.6 million for the ~~third and second~~first quarters of 2022 and 2021, respectively, an increase of ~~13%~~120%. The increase was due to higher origination volume of marketplace loans. Loan origination volume of marketplace loans increased to $2.4 billion for the first quarter of 2022 compared to $1.1 billion for the first quarter of 2021, an increase of 107%.

Origination fees were $122.1 million and $118.4 million for the first quarter of 2022 and fourth quarter of 2021, respectively, an increase of 3%. The increase was due to higher origination volume of marketplace loans. Loan origination volume of marketplace loans increased to $2.4 billion for the first quarter of 2022 compared to $2.3 billion for the fourth quarter of 2021, an increase of 2%.

8152

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

volume of marketplace loans. Loan origination volume of marketplace loans increased to $2.47 billion for the third quarter of 2021 compared to $2.18 billion for the second quarter of 2021, an increase of 13%.

Origination fees were $129.1 million and $24.4 million for the third quarters of 2021 and 2020, respectively. The increase was primarily due to higher origination volume of marketplace loans. Loan origination volume of marketplace loans increased to $2.47 billion for the third quarter of 2021 compared to $584.1 million for the third quarter of 2020.

Origination fees were $298.5 million and $164.5 million for the first nine months of 2021 and 2020, respectively, an increase of 81%. The increase was due to higher origination volume of marketplace loans, partially offset by the deferral of origination fees and costs on loans held for investment. Loan origination volume of marketplace loans increased to $5.8 billion for the first nine months of 2021 compared to $3.4 billion for the first nine months of 2020, an increase of 69%.

Servicing Fees

~~The Company receives~~We receive servicing fees to compensate itus for ~~the costs incurred in~~ servicing ~~a loan,~~loans on behalf of investors, including managing payments from borrowers, collections and payments to those investors. Servicing fee revenue related to ~~whole~~ loans sold also includes the change in fair value of servicing assets ~~and liabilities~~ associated with the loans.

The table below illustrates ~~the outstanding principal balance of loans~~AUM serviced ~~which is a key driver of servicing fees,~~on our platform by the method in which the loans were ~~financed at~~financed. Loans sold and subsequently serviced on behalf of the ~~end~~investor represent a key driver of ~~each period presented:~~our servicing fee revenue.

Change (%)
September 30, 2021 June 30,
2021 September 30, 2020 Q3 2021
vs
Q3 2020 Q3 2021
vs
Q2 2021
Outstanding Principal Balance of Loans Serviced On Our Marketplace Platform (in millions):
Whole loans sold $ 9,744 $ 9,289 $ 11,249 (13) % 5 %
Retail notes, certificates and secured borrowings 314 414 756 (58) % (24) %
LendingClub Bank 1,438 917 — N/M 57 %
Other loans invested in by the Company 96 121 262 (63) % (21) %
Total $ 11,592 $ 10,741 $ 12,267 (6) % 8 %

~~N/M – Not meaningful~~


	Three Months Ended						Change (%)
	March 31, 2022		December 31, 2021		March 31, 2021		Q1 2022 vs Q1 2021		Q1 2022 vs Q4 2021
AUM (in millions):
Loans sold	$	10,475	$	10,124	$	9,185	14	%	3	%
Loans held by LendingClub Bank	2,669		2,026		399		N/M		32	%
Retail notes, certificates and secured borrowings	175		238		537		(67)	%	(26)	%
Other loans invested in by the Company	22		75		150		(85)	%	(71)	%
Total	$	13,341	$	12,463	$	10,271	30	%	7	%

In addition to the loans serviced on our marketplace platform, ~~the Company earns~~we earned servicing fee revenue on ~~$243.6~~$197.4 million, $214.0 million and $259.6 million in outstanding principal balance of commercial loans sold as of ~~September 30, 2021.~~March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

Servicing fees were ~~$20.8~~$18.5 million and ~~$22.7~~$23.2 million for the ~~third and second~~first quarters of 2022 and 2021, respectively, a decrease of 8%20%. The decrease in revenue was primarily due to ~~negative~~changes in the fair value ~~adjustments~~ of our servicing asset ~~in the second quarter of 2021.~~

~~Servicing fees were $20.8 million~~ and ~~$25.9 million for the third quarters of 2021 and 2020, respectively,~~higher expected prepayment rates, partially offset by a ~~decrease of 19%. The decrease in revenue was primarily due to a lower~~higher principal balance of loans serviced.

Servicing fees were ~~$66.7~~$18.5 million and ~~$86.9~~$20.9 million for the first ~~nine months~~quarter of ~~2021~~2022 and ~~2020,~~fourth quarter of 2021, respectively, a decrease of ~~23%~~12%. The decrease in revenue was primarily due to changes in the fair value of our servicing asset and higher expected prepayment rates, partially offset by a ~~lower~~higher principal balance of loans serviced.

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

Gain on Sales of Loans

In connection with loan sales, ~~and in addition to servicing fees earned with respect to the corresponding loan, the Company recognizes~~we recognize a gain or loss on the sale of ~~that loan~~loans based on the level to which the contractual ~~loan~~ servicing fee is above or below an estimated market rate ~~loan servicing fee.~~of servicing. Additionally, ~~the Company recognizes~~we recognize transaction costs, if any, as a loss on sale of loans.

Gain on sales of loans was ~~$21.9~~$24.1 million and ~~$19.3~~$8.3 million for the ~~third and second~~first quarters of 2022 and 2021, respectively, an increase of ~~13%~~190%. The increase was primarily due to an increase in the volume of marketplace loans sold.

Gain on sales of loans was ~~$21.9~~$24.1 million and ~~$7.7~~$20.6 million for the ~~third quarters~~first quarter of ~~2021~~2022 and ~~2020,~~fourth quarter of 2021, respectively, an increase of ~~183%~~17%. The increase was primarily due to an increase in the volume of marketplace loans sold.

Gain on sales of loans was $49.5 million and $23.7 million for the first nine months of 2021 and 2020, respectively, an increase of 109%. The increase was primarily due to an increase in the volume of marketplace loans sold.

~~Net Fair Value Adjustments~~

~~The Company records fair value adjustments on loans that are recorded at fair value.~~

Net fair value adjustments were $2.7 million and $(4.1) million for the third and second quarters of 2021, respectively, an improvement of $6.8 million. The increase was primarily due to higher loan sale prices.

Net fair value adjustments were $2.7 million and $(3.3) million for the third quarters of 2021 and 2020, respectively, an improvement of $6.0 million. The increase was primarily due to higher loan sale prices and a decrease in estimated expected credit losses.

Net fair value adjustments were $(6.7) million and $(99.1) million for the first nine months of 2021 and 2020, respectively, an improvement of $92.4 million. The improvement was primarily associated with fair value adjustments recorded in the first quarter of 2020 due to COVID-19, which included an increase in estimated expected credit losses and an increase in liquidity premiums.

8353

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Net Fair Value Adjustments

We record fair value adjustments on loans that are recorded at fair value, including gains or losses from sale prices in excess of or less than the loan principal amount sold.

Net fair value adjustments were $15.2 million and $(5.3) million for the first quarters of 2022 and 2021, respectively, an increase of $20.5 million. The increase was primarily due to higher loan sale prices and an increase in the volume of marketplace loans sold.

Net fair value adjustments were $15.2 million and $10.7 million for the first quarter of 2022 and fourth quarter of 2021, respectively, an increase of $4.5 million. The increase was primarily due to higher loan sale prices and an increase in the volume of marketplace loans sold.

Other Non-Interest Income

Other non-interest income primarily consists of referral revenue that relates to fees earned from third-party companies when customers referred by us consider or purchase products or services from such third-party companies. The table below illustrates the composition of other non-interest income for each period presented:

Three Months Ended Change (%)
September 30, 2021 June 30,
2021 September 30, 2020 Q3 2021
vs
Q3 2020 Q3 2021
vs
Q2 2021
Referral revenue $ 4,293 $ 2,762 $ 1,264 N/M 55 %
Realized gains on sales of securities available for sale and other investments — 148 — N/M (100) %
Other 2,029 3,831 1,851 10 % (47) %
Other non-interest income $ 6,322 $ 6,741 $ 3,115 103 % (6) %

~~N/M – Not meaningful~~

Nine Months Ended September 30,
2021 2020 Change (%)
Referral revenue $ 9,649 $ 3,503 175 %
Realized losses on sales of securities available for sale and other investments (96) (1) N/M
Other 9,117 6,664 37 %
Other non-interest income $ 18,670 $ 10,166 84 %

~~N/M – Not meaningful~~


	Three Months Ended						Change (%)
	March 31, 2022		December 31, 2021		March 31, 2021		Q1 2022 vs Q1 2021		Q1 2022 vs Q4 2021
Referral revenue	$	3,691	$	4,585	$	2,594	42	%	(19)	%
Realized gains (losses) on sales of securities available for sale and other investments	36		3		(244)		(115)	%	N/M
Other	6,164		3,961		3,257		89	%	56	%
Other non-interest income	$	9,891	$	8,549	$	5,607	76	%	16	%

8454

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Net Interest Income

The tables below present net interest income information corresponding to interest-earning assets and interest-bearing funding sources on a ~~standalone basis for LendingClub Bank and LendingClub Corporation (Parent only), and on a~~ consolidated basis for the Company.


		Three Months Ended September 30, 2021																			Consolidated LendingClub Corporation (1)
		LendingClub Bank						LendingClub Corporation (Parent only)						Consolidated LendingClub Corporation(1)							Three Months Ended March 31, 2022						Three Months Ended December 31, 2021						Three Months Ended March 31, 2021
		Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate
Interest-earning assets(2)	Interest-earning assets(2)																			Interest-earning assets (2)
Cash, cash equivalents and restricted cash		$	695,294	$	352	0.20	%	$	83,405	$	3	0.01	%	$	778,667	$	355	0.18	%
Cash, cash equivalents, restricted cash and other																				Cash, cash equivalents, restricted cash and other	$	892,921	$	688	0.31	%	$	710,472	$	469	0.26	%	$	918,148	$	156	0.10	%
Securities available for sale at fair value	Securities available for sale at fair value	182,882		632		1.38	%	83,804		2,548		12.16	%	266,686		3,180		4.77	%	Securities available for sale at fair value	325,155		4,511		5.55	%	265,140		3,071		4.63	%	362,621		2,235		2.71	%
Loans held for sale at fair value		145,262		5,978		16.46	%	81,160		2,558		12.60	%	226,422		8,536		15.08	%
Loans held for sale																				Loans held for sale	255,139		7,450		11.68	%	184,708		7,153		15.49	%	198,592		5,157		12.01	%
Loans and leases held for investment:	Loans and leases held for investment:																			Loans and leases held for investment:
Unsecured personal loans	Unsecured personal loans	991,297		39,532		15.95	%	—		—		—	%	991,297		39,532		15.95	%	Unsecured personal loans	2,060,323		78,376		15.22	%	1,542,285		60,384		15.66	%	146,925		3,392		13.85	%
Secured consumer loans	Secured consumer loans	464,194		4,688		4.04	%	—		—		—	%	464,194		4,688		4.04	%	Secured consumer loans	232,235		2,275		3.92	%	436,260		4,029		3.69	%	521,399		3,215		3.70	%
Commercial loans and leases	Commercial loans and leases	616,823		7,887		5.11	%	—		—		—	%	616,823		7,887		5.11	%	Commercial loans and leases	620,660		7,588		4.89	%	619,648		8,663		5.59	%	605,495		5,119		5.07	%
PPP loans	PPP loans	436,785		5,537		5.07	%	—		—		—	%	436,785		5,537		5.07	%	PPP loans	222,517		3,203		5.76	%	325,133		3,888		4.78	%	621,292		3,575		3.45	%
Loans and leases held for investment	Loans and leases held for investment	2,509,099		57,644		9.19	%	—		—		—	%	2,509,099		57,644		9.19	%	Loans and leases held for investment	3,135,735		91,442		11.66	%	2,923,326		76,964		10.53	%	1,895,111		15,301		4.84	%
Retail and certificate loans held for investment at fair value	Retail and certificate loans held for investment at fair value	—		—		—	%	344,205		12,172		14.15	%	344,205		12,172		14.15	%	Retail and certificate loans held for investment at fair value	198,813		6,969		14.02	%	262,548		9,236		14.07	%	574,158		20,262		14.12	%
Other loans held for investment at fair value	Other loans held for investment at fair value	—		—		—	%	30,981		973		12.58	%	30,981		973		12.58	%	Other loans held for investment at fair value	18,523		593		12.80	%	24,184		762		12.60	%	46,212		1,479		12.80	%
Total interest-earning assets	Total interest-earning assets	3,532,537		64,606		7.32	%	623,555		18,254		11.71	%	4,156,060		82,860		7.97	%	Total interest-earning assets	4,826,286		111,653		9.25	%	4,370,378		97,655		8.94	%	3,994,842		44,590		5.34	%

Cash and due from banks and restricted cash	Cash and due from banks and restricted cash	29,290						99,985						96,733						Cash and due from banks and restricted cash	92,683						73,258						137,216
Allowance for loan and lease losses	Allowance for loan and lease losses	(86,686)						—						(86,686)						Allowance for loan and lease losses	(163,631)						(125,120)						(30,357)
Other non-interest earning assets	Other non-interest earning assets	270,594						760,131						449,964						Other non-interest earning assets	486,363						465,010						326,040
Total assets	Total assets	$	3,745,735					$	1,483,671					$	4,616,071					Total assets	$	5,241,701					$	4,783,526					$	4,427,741

Interest-bearing liabilities	Interest-bearing liabilities																			Interest-bearing liabilities
Interest-bearing deposits:	Interest-bearing deposits:																			Interest-bearing deposits:
Checking and money market accounts	Checking and money market accounts	$	2,221,365	$	1,707	0.30	%	$	—	$	—	—	%	$	2,221,365	$	1,707	0.30	%	Checking and money market accounts	$	2,240,450	$	1,724	0.31	%	$	2,146,687	$	1,716	0.32	%	$	1,735,274	$	913	0.33	%
Savings accounts and certificates of deposit	Savings accounts and certificates of deposit	307,807		192		0.25	%	—		—		—	%	307,807		192		0.25	%	Savings accounts and certificates of deposit	1,071,133		1,714		0.64	%	580,361		900		0.62	%	323,800		101		0.19	%
Interest-bearing deposits	Interest-bearing deposits	2,529,172		1,899		0.30	%	—		—		—	%	2,529,172		1,899		0.30	%	Interest-bearing deposits	3,311,583		3,438		0.42	%	2,727,048		2,616		0.38	%	2,059,074		1,014		0.30	%
Short-term borrowings	Short-term borrowings	321		—		—	%	56,903		849		5.97	%	57,224		849		5.93	%	Short-term borrowings	20,371		435		8.56	%	36,823		561		6.08	%	98,818		1,264		5.12	%
Advances from PPPLF	Advances from PPPLF	416,748		371		0.36	%	—		—		—	%	416,748		371		0.36	%	Advances from PPPLF	234,872		206		0.35	%	342,335		307		0.36	%	405,989		233		0.35	%
Retail notes, certificates and secured borrowings	Retail notes, certificates and secured borrowings	—		—		—	%	344,087		12,172		14.15	%	344,087		12,172		14.15	%	Retail notes, certificates and secured borrowings	198,813		6,969		14.02	%	262,548		9,236		14.07	%	574,192		20,262		14.12	%
Structured Program borrowings	Structured Program borrowings	—		—		—	%	100,178		2,120		8.46	%	100,178		2,120		8.46	%	Structured Program borrowings	42,026		764		7.29	%	77,354		1,642		8.49	%	143,045		3,208		8.97	%
Other long-term debt	Other long-term debt	—		—		—	%	15,606		161		4.13	%	15,606		161		4.13	%	Other long-term debt	15,421		161		4.19	%	15,514		161		4.15	%	18,605		103		2.21	%
Total interest-bearing liabilities	Total interest-bearing liabilities	2,946,241		2,270		0.31	%	516,774		15,302		11.84	%	3,463,015		17,572		2.03	%	Total interest-bearing liabilities	3,823,086		11,973		1.25	%	3,461,622		14,523		1.68	%	3,299,723		26,084		3.24	%

8555

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)


		Three Months Ended September 30, 2021																			Consolidated LendingClub Corporation (1)
		LendingClub Bank						LendingClub Corporation (Parent only)						Consolidated LendingClub Corporation(1)							Three Months Ended March 31, 2022						Three Months Ended December 31, 2021						Three Months Ended March 31, 2021
		Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate
Non-interest bearing deposits	Non-interest bearing deposits	114,065						—						81,491						Non-interest bearing deposits	227,337						211,692						119,272
Other liabilities	Other liabilities	155,806						183,962						285,292						Other liabilities	319,241						282,339						286,907
Total liabilities	Total liabilities	$	3,216,112					$	700,736					$	3,829,798					Total liabilities	$	4,369,664					$	3,955,653					$	3,705,902

Total equity	Total equity	$	529,623					$	782,935					$	786,273					Total equity	$	872,037					$	827,873					$	721,839
Total liabilities and equity	Total liabilities and equity	$	3,745,735					$	1,483,671					$	4,616,071					Total liabilities and equity	$	5,241,701					$	4,783,526					$	4,427,741

Interest rate spread	Interest rate spread					7.01	%					(0.13)	%					5.95	%	Interest rate spread					8.00	%					7.26	%					2.11	%

Net interest income and net interest margin	Net interest income and net interest margin			$	62,336	7.06	%			$	2,952	1.89	%			$	65,288	6.28	%	Net interest income and net interest margin			$	99,680	8.26	%			$	83,132	7.61	%			$	18,506	2.67	%

(1) Consolidated presentation reflects intercompany eliminations.

(2) Nonaccrual loans and any related income are included in their respective loan categories.

An analysis of the year-to-year changes in the categories of interest revenue and interest expense resulting from changes in volume and rate is as follows:


	Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021
	Increase (Decrease) Due to Change in:
	Average Volume(1)		Average Rate(1)		Total
Interest-earning assets
Cash, cash equivalents, restricted cash and other	$	(5)	$	537	$	532
Securities available for sale at fair value	(258)		2,534		2,276
Loans held for sale	2,391		(98)		2,293
Loans and leases held for investment	24,167		51,974		76,141
Retail and certificate loans held for investment at fair value	(13,157)		(136)		(13,293)
Other loans held for investment at fair value	(886)		—		(886)
Total increase in interest income on interest-earning assets	$	12,252	$	54,811	$	67,063
Interest-bearing liabilities
Checking and money market accounts	$	813	$	(2)	$	811
Savings accounts and certificates of deposit	803		810		1,613
Interest-bearing deposits	1,616		808		2,424
Short-term borrowings	(1,369)		540		(829)
Advances from PPPLF	(28)		1		(27)
Retail notes, certificates and secured borrowings	(13,158)		(135)		(13,293)
Structured Program borrowings	(1,931)		(513)		(2,444)
Other long-term debt	(20)		78		58
Total increase (decrease) in interest expense on interest-bearing liabilities	$	(14,890)	$	779	$	(14,111)

Increase in net interest income	$	27,142	$	54,032	$	81,174

(1) Volume and rate changes have been allocated on a consistent basis using the respective percentage changes in average balances and average rates.

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Three Months Ended June 30, 2021
LendingClub Bank LendingClub Corporation
(Parent only)
Consolidated
LendingClub Corporation(1)
Average
Balance Interest Income/
Expense Average Yield/
Rate Average
Balance Interest Income/
Expense Average Yield/
Rate Average
Balance Interest Income/
Expense Average Yield/
Rate
Interest-earning assets(2)
Cash, cash equivalents and restricted cash $ 551,895 $ 186 0.13 % $ 99,419 $ 4 0.02 % $ 642,182 $ 190 0.12 %
Securities available for sale at fair value 165,579 348 0.84 % 108,377 2,191 8.09 % 273,956 2,539 3.71 %
Loans held for sale 144,037 5,723 15.89 % 99,408 2,971 11.96 % 243,445 8,694 14.29 %
Loans and leases held for investment:
Unsecured personal loans 511,787 19,499 15.24 % — — — % 511,787 19,499 15.24 %
Secured consumer loans 532,426 5,173 3.89 % — — — % 532,426 5,173 3.89 %
Commercial loans and leases 623,735 9,062 5.81 % — — — % 623,735 9,062 5.81 %
PPP loans 615,942 5,334 3.46 % — — — % 615,942 5,334 3.46 %
Loans and leases held for investment 2,283,890 39,068 6.84 % — — — % 2,283,890 39,068 6.84 %
Retail and certificate loans held for investment at fair value — — — % 448,822 16,014 14.27 % 448,822 16,014 14.27 %
Other loans held for investment at fair value — — — % 38,662 1,222 12.64 % 38,662 1,222 12.64 %
Total interest-earning assets 3,145,401 45,325 5.76 % 794,688 22,402 11.28 % 3,930,957 67,727 6.89 %
Cash and due from banks and restricted cash 34,612 111,274 144,897
Allowance for loan and lease losses (51,109) — (51,109)
Other non-interest earning assets 221,870 749,674 447,826
Total assets $ 3,350,774 $ 1,655,636 $ 4,472,571
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts $ 2,071,112 $ 1,618 0.31 % $ — $ — — % $ 2,071,112 $ 1,618 0.31 %
Savings accounts and certificates of deposit 301,939 81 0.11 % — — — % 301,939 81 0.11 %
Interest-bearing deposits 2,373,051 1,699 0.29 % — — — % 2,373,051 1,699 0.29 %
Short-term borrowings 2,138 1 0.06 % 77,373 1,002 5.19 % 79,511 1,003 5.05 %
Advances from PPPLF 312,168 272 0.35 % — — — % 312,168 272 0.35 %
Retail notes, certificates and secured borrowings — — — % 449,057 16,014 14.27 % 449,057 16,014 14.27 %
Structured Program borrowings — — — % 121,738 2,668 8.77 % 121,738 2,668 8.77 %
Other long-term debt 708 — — % 15,696 166 4.22 % 16,404 166 4.05 %
Total interest-bearing liabilities 2,688,065 1,972 0.29 % 663,864 19,850 11.96 % 3,351,929 21,822 2.61 %

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~


	Three Months Ended March 31, 2022 Compared to Three Months Ended December 31, 2021
	Increase (Decrease) Due to Change in:
	Average Volume(1)		Average Rate(1)		Total
Interest-earning assets
Cash, cash equivalents, restricted cash and other	$	127	$	92	$	219
Securities available for sale at fair value	767		673		1,440
Loans held for sale	2,320		(2,023)		297
Loans and leases held for investment	5,831		8,647		14,478
Retail and certificate loans held for investment at fair value	(2,235)		(32)		(2,267)
Other loans held for investment at fair value	(181)		12		(169)
Total increase in interest income on interest-earning assets	$	6,629	$	7,369	$	13,998
Interest-bearing liabilities
Checking and money market accounts	$	72	$	(64)	$	8
Savings accounts and certificates of deposit	781		33		814
Interest-bearing deposits	853		(31)		822
Short-term borrowings	(304)		178		(126)
Advances from PPPLF	(94)		(7)		(101)
Retail notes, certificates and secured borrowings	(2,235)		(32)		(2,267)
Structured Program borrowings	(670)		(208)		(878)
Other long-term debt	(1)		1		—
Total decrease in interest expense on interest-bearing liabilities	$	(2,451)	$	(99)	$	(2,550)

Increase in net interest income	$	9,080	$	7,468	$	16,548

(1) ~~Consolidated presentation reflects intercompany eliminations.~~

~~(2)~~ ~~Nonaccrual loans~~Volume and ~~any related income are included~~rate changes have been allocated on a consistent basis using the respective percentage changes in ~~their respective loan categories.~~

~~Interest on securities available for sale was $3.2 million~~average balances and ~~$2.5 million for the third and second quarters of 2021, respectively, an increase of 25%. The increase was primarily due to an increase in the~~ average ~~outstanding balance of securities available for sale.~~

Interest on loans held for sale was $8.5 million and $8.7 million for the third and second quarters of 2021, respectively, a decrease of 2%. The decrease was primarily due to a decrease in the average outstanding balances of loans held for sale.

Interest and fees on loans and leases held for investment were $57.6 million and $39.1 million for the third and second quarters of 2021, respectively, and increase of 48%. The increase was primarily due to an increase in the mix of personal loan balances retained as held for investment at higher interest rates and resulting in an overall increase in net interest margin.

Interest income on retail and certificate loans held for investment was $12.2 million and $16.0 million for the third and second quarters of 2021, respectively, a decrease of 24%. The decrease was primarily due to a decrease in the average outstanding balances of retail and certificate loans held for investment. We do not assume principal or interest rate risk on loans facilitated through our lending marketplace that were funded by notes, certificates and certain secured borrowings because loan balances, interest rates and maturities are matched and offset by an equal balance of notes, certificates or secured borrowings with the exact same interest rates and maturities. Interest expense on retail notes, certificates and secured borrowings was $12.2 million and $16.0 million for the third and second quarters of 2021, respectively, a decrease of 24%. The decrease was primarily due to a decrease in the average outstanding balance of retail notes, certificates and secured borrowings. We ceased offering and selling Retail Notes at December 31, 2020, therefore, this balance will continue to decline as underlying borrower payments are made.

Interest on other loans held for investment was $1.0 million and $1.2 million for the third and second quarters of 2021, respectively, a decrease of 20%. The decrease was primarily due to a decrease in the average outstanding balance of other loans held for investment.

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

Interest on deposits was $1.9 million and $1.7 million for the third and second quarters of 2021, respectively, an increase of 12%. The increase was primarily related to an increase in the average outstanding balance of deposits.

Interest on short-term borrowings was $0.8 million and $1.0 million for the third and second quarters of 2021, respectively, a decrease of 15%. The decrease was primarily due to a decrease in the average outstanding balance of short-term borrowings.

Interest on Structured Program borrowings was $2.1 million and $2.7 million for the third and second quarters of 2021, respectively, a decrease of 21%. The decrease was primarily due to a decrease in the average outstanding balance of Structured Program borrowings.

rates.

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

Three Months Ended September 30, 2020(1)
Consolidated LendingClub Corporation(2)
Average
Balance Interest Income/
Expense Average Yield/
Rate
Interest-earning assets (3)
Cash, cash equivalents and restricted cash $ 427,110 $ 38 0.04 %
Securities available for sale at fair value 203,246 2,754 5.42 %
Loans held for sale at fair value 374,827 14,916 15.92 %
Retail and certificate loans held for investment at fair value 745,339 27,117 14.55 %
Other loans held for investment at fair value 61,988 1,948 12.57 %
Total interest-earning assets 1,812,510 46,773 10.32 %
Cash and cash equivalents and restricted cash 95,810
Other non-interest earning assets 311,269
Total assets $ 2,219,589
Interest-bearing liabilities
Short-term borrowings 299,613 3,179 4.24 %
Retail notes, certificates and secured borrowings 745,842 27,117 14.55 %
Structured Program borrowings 183,122 3,046 6.65 %
Other long-term debt 4,276 137 12.91 %
Total interest-bearing liabilities 1,232,853 33,479 10.87 %
Other liabilities 244,032
Total liabilities $ 1,476,885
Total equity $ 742,704
Total liabilities and equity $ 2,219,589
Interest rate spread (0.55) %
Net interest income and net interest margin $ 13,294 2.93 %

~~(1)~~ ~~Prior period amounts have been reclassified to conform to current period presentation and methodology, which includes non-interest earning assets, non-interest bearing liabilities and equity.~~

~~(2)~~ ~~Consolidated presentation reflects intercompany eliminations.~~

~~(3)~~ ~~Nonaccrual loans and any related income are included in their respective loan categories.~~

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

Interest on securities available for sale was $3.2 million and $2.8 million for the third quarters of 2021 and 2020, respectively, an increase of 15%. The increase was primarily due to an increase in the average outstanding balance of securities available for sale.

Interest on loans held for sale was $8.5 million and $14.9 million for the third quarters of 2021 and 2020, respectively, a decrease of 43%. The decrease was primarily due to a decrease in the average outstanding balances of loans held for sale.

Interest and fees on loans and leases held for investment of $57.6 million for the third quarter of 2021 were related to the loans and leases acquired from Radius and $1.52 billion of originated personal and auto loans retained for investment during the first three quarters of 2021. There were no loans and leases held for investment at amortized cost for the third quarter of 2020.

Interest income on retail and certificate loans held for investment was $12.2 million and $27.1 million for the third quarters of 2021 and 2020, respectively, a decrease of 55%. The decrease was primarily due to a decrease in the average outstanding balances of retail and certificate loans held for investment. Interest expense on retail notes, certificates and secured borrowings was $12.2 million and $27.1 million for the third quarters of 2021 and 2020, respectively, a decrease of 55%. The decrease was primarily due to a decrease in the average outstanding balance of retail notes, certificates and secured borrowings.

Interest on other loans held for investment was $1.0 million and $1.9 million for the third quarters of 2021 and 2020, respectively, a decrease of 50%. The decrease was primarily due to a decrease in the average outstanding balance of other loans held for investment.

~~Interest on deposits of $1.9 million for the third quarter of 2021 was primarily related to the deposits assumed from Radius. There were no deposits held by the Company for the third quarter of 2020.~~

Interest on short-term borrowings was $0.8 million and $3.2 million for the third quarters of 2021 and 2020, respectively, a decrease of 73%. The decrease was primarily due to a decrease in the average outstanding balance of short-term borrowings.

Interest on Structured Program borrowings was $2.1 million and $3.0 million for the third quarters of 2021 and 2020, respectively, a decrease of 30%. The decrease was primarily due to a decrease in the average outstanding balance of Structured Program borrowings.

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

Nine Months Ended September 30, 2021(1)
LendingClub Bank LendingClub Corporation
(Parent only)
Consolidated
LendingClub Corporation(2)
Average
Balance Interest Income/
Expense Average Yield/
Rate Average
Balance Interest Income/
Expense Average Yield/
Rate Average
Balance Interest Income/
Expense Average Yield/
Rate
Interest-earning assets (3)
Cash, cash equivalents and restricted cash $ 651,675 $ 676 0.16 % $ 133,174 $ 25 0.03 % $ 769,759 $ 701 0.12 %
Securities available for sale at fair value 188,349 1,424 1.13 % 107,600 6,530 8.09 % 295,949 7,954 3.58 %
Loans held for sale at fair value 125,165 13,316 15.96 % 104,620 9,071 11.56 % 229,785 22,387 12.99 %
Loans and leases held for investment:
Unsecured personal loans 605,126 62,423 15.47 % — — — % 605,126 62,423 15.47 %
Secured consumer loans 503,798 13,076 3.89 % — — — % 503,798 13,076 3.89 %
Commercial loans and leases 616,660 22,068 5.37 % — — — % 616,660 22,068 5.37 %
PPP loans 549,137 14,446 3.95 % — — — % 549,137 14,446 3.95 %
Loans and leases held for investment 2,274,721 112,013 7.39 % — — — % 2,274,721 112,013 7.39 %
Retail and certificate loans held for investment at fair value — — — % 454,886 48,448 14.20 % 454,886 48,448 14.20 %
Other loans held for investment at fair value — — — % 38,563 3,674 12.71 % 38,563 3,674 12.71 %
Total interest-earning assets 3,239,910 127,429 5.90 % 838,843 67,748 10.77 % 4,063,663 195,177 6.86 %
Cash and due from banks and restricted cash 34,556 102,150 125,310
Allowance for loan and lease losses (59,262) — (59,262)
Other non-interest earning assets 231,281 710,167 413,309
Total assets $ 3,446,485 $ 1,651,160 $ 4,543,020
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts 2,046,355 4,238 0.31 % — — — % 2,046,355 4,238 0.31 %
Savings accounts and certificates of deposit 309,500 374 0.18 % — — — % 309,500 374 0.18 %
Interest-bearing deposits 2,355,855 4,612 0.30 % — — — % 2,355,855 4,612 0.30 %
Short-term borrowings 1,379 1 0.14 % 77,088 3,115 5.39 % 78,467 3,116 5.30 %
Advances from PPPLF 374,841 876 0.35 % — — — % 374,841 876 0.35 %
Retail notes, certificates and secured borrowings — — — % 455,779 48,449 14.18 % 455,779 48,448 14.18 %
Structured Program borrowings — — — % 121,654 7,995 8.76 % 121,654 7,996 8.76 %
Other long-term debt 974 — — % 15,691 430 3.65 % 16,665 430 3.44 %
Total interest-bearing liabilities 2,733,049 5,489 0.30 % 670,212 59,989 11.94 % 3,403,261 65,478 2.59 %

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

~~(1)~~ ~~For the eight month period from February 1, 2021 through September 30, 2021, for LendingClub Bank.~~

~~(2)~~ ~~Consolidated presentation reflects intercompany eliminations.~~

~~(3)~~ ~~Nonaccrual loans and any related income are included in their respective loan categories.~~

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

Nine Months Ended September 30, 2020(1)
Consolidated LendingClub Corporation(2)
Average
Balance Interest Income/
Expense Average Yield/
Rate
Interest-earning assets (3)
Cash, cash equivalents and restricted cash $ 360,588 $ 1,021 0.38 %
Securities available for sale at fair value 237,154 9,930 5.58 %
Loans held for sale at fair value 603,272 67,579 14.94 %
Retail and certificate loans held for investment at fair value 856,695 92,193 14.35 %
Other loans held for investment at fair value 63,099 6,021 12.72 %
Total interest-earning assets 2,120,808 176,744 11.11 %
Cash and due from banks and restricted cash 121,801
Other non-interest earning assets 356,071
Total assets $ 2,598,680
Interest-bearing liabilities
Short-term borrowings $ 485,692 $ 16,332 4.48 %
Retail notes, certificates and secured borrowings 857,672 92,193 14.33 %
Structured Program borrowings 169,487 11,418 8.98 %
Other long-term debt 9,104 372 5.46 %
Total interest-bearing liabilities 1,521,955 120,315 10.54 %
Other liabilities 277,673
Total liabilities $ 1,799,628
Total equity $ 799,052
Total liabilities and equity $ 2,598,680
Interest rate spread 0.57 %
Net interest income and net interest margin $ 56,429 5.32 %

~~(2)~~ ~~Consolidated presentation reflects intercompany eliminations.~~

~~(3)~~ ~~Nonaccrual loans and any related income are included in their respective loan categories.~~

Interest on securities available for sale was $8.0 million and $9.9 million for the first nine months of 2021 and 2020, respectively, a decrease of 20%. The decrease was primarily due to a decrease in the average yield earned on securities available for sale, partially offset by an increase in the average outstanding balance of securities available for sale.

Interest on loans held for sale was $22.4 million and $67.6 million for the first nine months of 2021 and 2020, respectively, a decrease of 67%. The decrease was primarily due to a decrease in the average outstanding balances of loans held for sale.

Interest and fees on loans and leases held for investment of $112.0 million for the first nine months of 2021 were primarily related to the loans and leases acquired from Radius and $1.52 billion of originated personal and auto loans retained for investment during the first nine months of 2021. There were no loans and leases held for investment at amortized cost for the first nine months of 2020.

Interest income on retail and certificate loans held for investment was $48.4 million and $92.2 million for the first nine months of 2021 and 2020, respectively, a decrease of 47%. The decrease was primarily due to a decrease in the average outstanding balances of retail and certificate loans held for investment. Interest expense on retail notes, certificates and secured borrowings was $48.4 million and $92.2 million for the first nine months of 2021 and 2020,

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

~~respectively, a decrease of 47%. The decrease was primarily due to a decrease in the average outstanding balance of retail notes, certificates and secured borrowings.~~

Interest on other loans held for investment was $3.7 million and $6.0 million for the first nine months of 2021 and 2020, respectively, a decrease of 39%. The decrease was primarily due to a decrease in the average outstanding balance of other loans held for investment.

Interest on deposits of $4.6 million for the first nine months of 2021 was primarily related to the deposits assumed from Radius. There were no deposits held by the Company for the first nine months of 2020.

Interest on short-term borrowings was $3.1 million and $16.3 million for the first nine months of 2021 and 2020, respectively, a decrease of 81%. The decrease was primarily due to a decrease in the average outstanding balance of short-term borrowings.

Interest on Structured Program borrowings was $8.0 million and $11.4 million for the first nine months of 2021 and 2020, respectively, a decrease of 30%. The decrease was primarily due to a decrease in the average outstanding balance of Structured Program borrowings.

9557

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Provision for Credit Losses

The allowance for loan and lease losses (ALLL) for lifetime expected losses under CECL on HFI loans and leases is initially recognized as “Provision for credit losses” at the time of origination. The ALLL is estimated using a discounted cash flow (DCF) approach, where effective interest rates are used to calculate the net present value of expected cash flows. The net present value from the DCF approach is then compared to the amortized cost basis of the loans and leases to derive expected credit losses. The provision for credit losses includes the credit loss expense for HFI loans and leases, ~~held for investment, credit impairments recorded on securities~~ available for sale (AFS) securities and ~~the credit loss expense for~~ unfunded lending commitments. The table below illustrates the composition of the provision for credit losses for each period presented:


		Three Months Ended						Nine Months Ended September 30,					Three Months Ended
		September 30, 2021		June 30, 2021		September 30, 2020		2021		2020			March 31, 2022		December 31, 2021		March 31, 2021
Credit loss expense for Radius loans at acquisition	Credit loss expense for Radius loans at acquisition	$	—	$	—	$	—	$	6,929	$	—	Credit loss expense for Radius loans at acquisition	$	—	$	—	$	6,929
Credit loss expense for loans and leases held for investment	Credit loss expense for loans and leases held for investment	37,133		34,976		—		88,733		—		Credit loss expense for loans and leases held for investment	52,228		45,289		16,624
Credit loss expense (recovery) for unfunded lending commitments		887		(20)		—		1,277		—
Credit loss (reversal of) expense for unfunded lending commitments												Credit loss (reversal of) expense for unfunded lending commitments	281		(46)		410
Total credit loss expense	Total credit loss expense	38,020		34,956		—		96,939		—		Total credit loss expense	52,509		45,243		23,963
(Reversal of) impairment on securities available for sale		(496)		(322)		(3,669)		(3,288)		3,800
Total provision for (reversal of) credit losses		$	37,524	$	34,634	$	(3,669)	$	93,651	$	3,800
Reversal of credit loss expense on securities available for sale												Reversal of credit loss expense on securities available for sale	—		(94)		(2,470)
Total provision for credit losses												Total provision for credit losses	$	52,509	$	45,149	$	21,493

The provision for credit losses was ~~$37.5~~$52.5 million and ~~$34.6~~$21.5 million for the ~~third~~first quarters of 2022 and ~~second~~2021, respectively. The increase was primarily due to higher balances of unsecured personal loans retained as HFI. Total volume of loans retained as HFI was $856.3 million and $344.4 million for the first quarters of 2022 and 2021, respectively.

The provision for credit losses was $52.5 million and $45.1 million for the first quarter of 2022 and fourth quarter of 2021, respectively. The increase was primarily due to ~~an increase in the origination~~higher balances of unsecured personal loans retained as ~~held for investment.~~

~~The provision for (reversal of) credit losses was $37.5 million and $(3.7) million for the third quarters~~HFI. Total volume of ~~2021 and 2020, respectively. The increase was primarily due to the origination of personal~~ loans retained as ~~held for investment.~~

~~The provision for credit losses~~HFI was ~~$93.7~~$856.3 million and ~~$3.8~~$761.5 million for the first ~~nine months~~quarter of 2022 and fourth quarter of 2021, ~~and 2020,~~ respectively. The increase was primarily due to the origination of personal loans retained as held for investment and the impact from applying CECL to the Radius loans upon their acquisition, partially offset by impairment originally recorded in the securities available for sale portfolio in the first nine months of 2020.

The allowance for expected credit losses totaled $106.0 million at September 30, 2021, comprised of an allowance for loan and lease losses of $104.7 million and a reserve for unfunded lending commitments of $1.3 million. The allowance for loan and lease losses of $104.7 million includes $12.4 million related to the initial allowance measured on acquired Radius loans that were determined to have experienced a more-than-insignificant deterioration in credit quality since their origination date, and were therefore recorded as Purchased Credit Deteriorated (PCD) loans. Upon acquisition, the amortized cost of PCD loans was increased by the amount of the allowance, resulting in no impact to the provision for credit losses for the initial allowance.

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

The activity in the ~~allowance for expected credit losses for the third quarter and first nine months of 2021~~ACL was as follows:


							Three Months Ended
		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021			March 31, 2022		December 31, 2021		March 31, 2021
Allowance for loan and lease losses, beginning of period	Allowance for loan and lease losses, beginning of period	$	71,081	$	—	Allowance for loan and lease losses, beginning of period	$	144,389	$	104,736	$	—
Credit loss expense for loans and leases held for investment (1)		37,133		95,662
Initial allowance for PCD loans acquired during the period (2)		—		12,440
Credit loss expense for loans and leases held for investment						Credit loss expense for loans and leases held for investment	52,228		45,289		23,553
Initial allowance for purchased credit deteriorated (PCD) loans acquired during the period (1)						Initial allowance for purchased credit deteriorated (PCD) loans acquired during the period (1)	—		—		12,440
Charge-offs	Charge-offs	(4,336)		(4,582)		Charge-offs	(9,089)		(5,870)		—
Recoveries	Recoveries	858		1,216		Recoveries	457		234		139
Allowance for loan and lease losses, end of period	Allowance for loan and lease losses, end of period	$	104,736	$	104,736	Allowance for loan and lease losses, end of period	$	187,985	$	144,389	$	36,132

Reserve for unfunded lending commitments, beginning of period	Reserve for unfunded lending commitments, beginning of period	$	390	$	—	Reserve for unfunded lending commitments, beginning of period	$	1,231	$	1,277	$	—
Credit loss expense for unfunded lending commitments	Credit loss expense for unfunded lending commitments	887		1,277		Credit loss expense for unfunded lending commitments	281		(46)		410
Reserve for unfunded lending commitments, end of period		$	1,277	$	1,277
Reserve for unfunded lending commitments, end of period (2)						Reserve for unfunded lending commitments, end of period (2)	$	1,512	$	1,231	$	410

(1)~~Includes credit loss expense for Radius loans at acquisition.~~

~~(2)~~ For acquired PCD loans, an ~~allowance~~ACL of $30.4 million was required with a corresponding increase to the amortized cost basis as of the acquisition date. For PCD loans where all or a portion of the loan balance had been previously written-off, or would be subject to write-off under the Company’s charge-off policy, ~~a CECL allowance~~an ACL of $18.0 million included as part of the grossed-up loan balance at acquisition was immediately written-off. The net impact to the allowance for PCD assets on the acquisition date was $12.4 million.

(2)

~~The allowance for loan~~Relates to $109.5 million, $110.8 million and ~~lease losses represented 3.9%~~$98.3 million of ~~total loans and leases held for investment~~unfunded commitments as of ~~September 30,~~March 31, 2022, December 31, 2021 ~~or 4.5% of total loans~~ and leases held for investment excluding Paycheck Protection Program (PPP) loans. Average loans and leases held for investment were $2.5 billion and $2.3 billion during the three and nine month periods ended September 30,March 31, 2021, respectively. ~~Net charge-offs represented 0.1% of average loans and leases held for investment during both the three and nine months ended September 30, 2021.~~

The allowance for expected credit losses for financing receivables and leases, and reserve for unfunded lending commitments (collectively the allowance for expected credit losses (ACL)), are valuation reserves that represent our estimate of expected credit losses (ECL) on the assets measured at amortized cost and unfunded lending commitments. The allowance for expected credit losses is measured based on a lifetime expected loss model, which does not require a loss event to occur before a credit loss is recognized. Under the lifetime expected credit loss model, we estimate the allowance based on relevant available information related to past events, current conditions, and reasonable and supportable forecasts of future economic conditions.

We generally estimate ECL over the contractual term of its loans. The contractual term is adjusted for estimated prepayments when appropriate. Expected renewals and extensions do not adjust the contractual term unless the extension or renewal option is through a troubled debt restructuring (TDR) that is reasonably expected to occur or represents an unconditionally cancellable option held by the borrower.

The quantitative, or modeled, component of the ACL is primarily based on statistical models that use known or estimated data as of the balance sheet date and forecasted data over the reasonable and supportable period. Known and estimated data include current probability of default, loss given default and exposure at default, timing and amount of estimated prepayments, timing and amount of expected draws (for unfunded lending commitments), and relevant risk characteristics. Certain of our portfolios have limited historical loss data available internally. For these portfolios, we use external credit loss information from the FDIC Call Report and Small Business Administration (SBA) data, which includes historical charge-off and balance data for peer banking institutions.

9758

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

We obtain historical macroeconomic data dating back to 2004 from the St. Louis Federal Reserve Economic Database (FRED) and Moody’s Analytics to inform our view of the long-term condition of the economy. Forward-looking macroeconomic factors considered in our statistical models include Gross Domestic Product (GDP), unemployment rate, housing prices, and retail sales. Forward-looking macroeconomic factors are incorporated into our models for a two-year reasonable and supportable economic forecast period followed by a one-year reversion period during which expected credit losses are expected to revert back on a straight-line basis to historical losses unadjusted for economic conditions. The reasonable and supportable economic forecast period and reversion methodology are accounting estimates which may change in future periods as a result of changes to the current macroeconomic environment.


	Three Months Ended
	March 31, 2022			December 31, 2021			March 31, 2021
Ratio of allowance for loan and lease losses to total loans and leases held for investment	5.49		%	4.98		%	1.71		%
Ratio of allowance for loan and lease losses to total loans and leases held for investment, excluding PPP loans	5.81		%	5.49		%	2.49		%

Average loans and leases held for investment	$	3,135,735		$	2,923,326		$	1,895,111
Ratio of net charge-offs to average loans and leases held for investment	0.28		%	0.19		%	—		%

~~Our statistical models produce expected cash flows, which~~Loans and leases are ~~then discounted at~~generally placed on nonaccrual status when contractually past due 90 days or more, or earlier if management believes that the ~~effective interest rate to derive net present value. This net present value is then compared to~~probability of collection does not warrant further accrual, and are charged-off no later than 120 days past due. The following table presents nonaccrual loans and leases as of the ~~amortized cost basis to derive the expected credit losses. As a result, the quantitative,~~periods presented (1):


	March 31, 2022		December 31, 2021
Unsecured personal	$	3,093	$	1,676
Residential mortgages	875		1,373
Secured consumer	3,025		3,011

Total nonaccrual consumer loans held for investment	6,993		6,060

Equipment finance	462		603
Commercial real estate	1,079		989
Commercial and industrial	2,726		2,333
Total nonaccrual commercial loans and leases held for investment	4,267		3,925

Total nonaccrual loans and leases held for investment	$	11,260	$	9,985

(1) Excluding PPP loans, there were no loans that were 90 days or ~~modeled, portion~~more past due and accruing as of ~~ACL is estimated using a discounted cash flow (DCF) approach.~~both March 31, 2022 and December 31, 2021.

~~We also consider the need for qualitative adjustments to the modeled estimate~~As of expected credit losses. For this purpose, we established a qualitative factor framework to periodically assess qualitative adjustments to address certain identified elements that are not directly captured by the expected credit loss models. These factors may include the impactMarch 31, 2022, nonaccrual loans and leases represented 0.33% of ~~risk rating downgrades, changes in credit policies, problem loan trends, identification~~total loans and leases HFI, or 0.35% of ~~new risks not incorporated into the modeling framework, credit concentrations, changes in lending management~~total loans and ~~other external factors.~~

~~Loans that do not share common risk characteristics are evaluated individually to determine the allowance balance. Loans assessed individually include TDRs, reasonably expected TDRs~~leases HFI excluding PPP loans. As of December 31, 2021, nonaccrual loans and ~~collateral-dependent~~leases represented 0.34% of total loans and leases HFI, or 0.38% of total loans and leases HFI excluding PPP loans. ~~The allowance for individually assessed loans is generally determined using either DCF analyses or collateral valuations to determine if loan carrying values exceed what we expect to collect.~~

For additional information on the allowance for expected credit losses and nonaccrual loans and leases, see “~~Critical Accounting Estimates~~,” “ Notes to ~~Condensed~~ Consolidated Financial Statements – Note 1. Summary of Significant Accounting Policies,” of our Annual Report and “~~Notes to Condensed Consolidated Financial Statements~~ – Note 6.5. Loans and Leases Held for Investment, Net of Allowance For Loan and Lease Losses.”

~~The following table presents nonaccrual loans and leases as of September 30, 2021:~~


~~September 30, 2021~~	~~Nonaccrual Loans and Leases~~ ~~(1)~~
~~Unsecured personal~~	$	~~604~~
~~Residential mortgages~~	~~2,106~~
~~Secured consumer~~	~~5,888~~
~~Other consumer~~	—
~~Total nonaccrual consumer loans held for investment~~	~~8,598~~

~~Equipment finance~~	~~744~~
~~Commercial real estate~~	~~1,219~~
~~Commercial and industrial~~	~~1,415~~
~~Total nonaccrual commercial loans and leases held for investment~~	~~3,378~~

~~Total nonaccrual loans and leases held for investment~~	$	~~11,976~~

~~(1)~~ ~~There were no loans or leases that were 90 days or more past due and accruing as of September 30, 2021.~~ in this Report.

9859

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Nonaccrual loans and leases represented 0.4% of total loans and leases held for investment, or 0.5% of total loans and leases held for investment excluding PPP loans, as of September 30, 2021. The allowance for loan and lease losses represented 875% of nonaccrual loans and leases as of September 30, 2021.

Non-Interest Expense

Non-interest expense primarily consists of (i) compensation and benefits, which include salaries and wages, benefits and stock-based compensation expense, (ii) marketing, which includes costs attributable to borrower acquisition efforts and building general brand awareness, (iii) equipment and software, (iv) occupancy, which includes rent expense and all other costs related to occupying our office spaces, (v) depreciation and amortization and (vi) professional services, which primarily consist of legal and accounting fees.

Three Months Ended Change (%)
September 30, 2021 June 30,
2021 September 30, 2020 Q3 2021
vs
Q3 2020 Q3 2021
vs
Q2 2021
Non-interest expense:
Compensation and benefits $ 73,304 $ 71,925 $ 58,649 25 % 2 %
Marketing 50,782 35,107 2,135 N/M 45 %
Equipment and software 10,297 9,281 6,430 60 % 11 %
Occupancy 6,486 6,157 6,466 — % 5 %
Depreciation and amortization 10,549 11,508 12,348 (15) % (8) %
Professional services 11,750 11,520 8,817 33 % 2 %
Other non-interest expense 15,607 14,641 14,267 9 % 7 %
Total non-interest expense $ 178,775 $ 160,139 $ 109,112 64 % 12 %

~~N/M – Not meaningful~~


		Nine Months Ended September 30,							Three Months Ended						Change (%)
		2021		2020		Change (%)			March 31, 2022		December 31, 2021		March 31, 2021		Q1 2022 vs Q1 2021		Q1 2022 vs Q4 2021
Non-interest expense:	Non-interest expense:							Non-interest expense:
Compensation and benefits	Compensation and benefits	$	209,649	$	199,991	5	%	Compensation and benefits	$	81,610	$	78,741	$	64,420	27	%	4	%
Marketing	Marketing	105,434		43,030		145	%	Marketing	55,080		50,708		19,545		182	%	9	%
Equipment and software	Equipment and software	27,471		20,931		31	%	Equipment and software	11,046		12,019		7,893		40	%	(8)	%
Occupancy	Occupancy	19,543		22,241		(12)	%	Occupancy	6,019		4,706		6,900		(13)	%	28	%
Depreciation and amortization	Depreciation and amortization	33,823		41,832		(19)	%	Depreciation and amortization	11,039		10,462		11,766		(6)	%	6	%
Professional services	Professional services	34,873		32,723		7	%	Professional services	12,406		12,699		11,603		7	%	(2)	%
Other non-interest expense	Other non-interest expense	42,373		38,678		10	%	Other non-interest expense	14,004		18,885		12,125		15	%	(26)	%
Total non-interest expense	Total non-interest expense	$	473,166	$	399,426	18	%	Total non-interest expense	$	191,204	$	188,220	$	134,252	42	%	2	%

Compensation and benefits expense ~~remained relatively flat at $73.3~~was $81.6 million and ~~$71.9~~$64.4 million for ~~the third and second~~first quarters of 2022 and 2021, respectively, an increase of 2%27%. The increase was primarily due to an increase in headcount.

Compensation and benefits expense was ~~$73.3~~$81.6 million and ~~$58.6~~$78.7 million for ~~third quarters~~the first quarter of ~~2021~~2022 and ~~2020,~~fourth quarter of 2021, respectively, an increase of ~~25%~~4%. The increase was primarily due to an increase in ~~headcount related~~headcount.

Marketing expense was $55.1 million and $19.5 million for the first quarters of 2022 and 2021, respectively, an increase of 182%. The increase was primarily due to an increase in variable marketing expenses based on higher origination volume, partially offset by the ~~acquisition~~deferral of ~~Radius.~~applicable marketing expenses for HFI loans.

Marketing expense was $55.1 million and $50.7 million for the first quarter of 2022 and fourth quarter of 2021, respectively, an increase of 9%. The increase was primarily due to an increase in variable marketing expenses based on higher origination volume and an increase in deposits, partially offset by the deferral of applicable marketing expenses for HFI loans.

Equipment and software expense was $11.0 million and $7.9 million for the first quarters of 2022 and 2021, respectively, an increase of 40%. The increase was primarily due to an increase in hosting fees and subscription costs.

Equipment and software expense was $11.0 million and $12.0 million for the first quarter of 2022 and fourth quarter of 2021, respectively, a decrease of 8%. The decrease was primarily due to a decrease in equipment purchases and lower cloud hosting fees.

Occupancy expense was $6.0 million, $4.7 million, and $6.9 million for the first quarter of 2022, fourth quarter of 2021, and first quarter of 2021, respectively.

9960

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Compensation and benefits expense was $209.6 million and $200.0 million for the first nine months of 2021 and 2020, respectively, an increase of 5%. The increase was primarily due to an increase in headcount related to the acquisition of Radius.

Marketing expense was $50.8 million and $35.1 million for the third and second quarters of 2021, respectively, an increase of 45%. The increase was primarily due to an increase in variable marketing expenses based on higher origination volume.

Marketing expense was $50.8 million and $2.1 million for the third quarters of 2021 and 2020, respectively. The increase was primarily due to an increase in variable marketing expenses based on higher origination volume.

Marketing expense was $105.4 million and $43.0 million for the first nine months of 2021 and 2020, respectively, an increase of 145%. The increase was primarily due to an increase in variable marketing expenses based on higher origination volume.

Equipment and software expense was $10.3 million and $9.3 million for the third and second quarters of 2021, respectively, an increase of 11%. The increase was primarily due to an increase in technology support and maintenance and expenses associated with the integration of Radius.

Equipment and software expense was $10.3 million and $6.4 million for the third quarters of 2021 and 2020, respectively, an increase of 60%. The increase was primarily due to an increase in expenses associated with the integration of Radius.

Equipment and software expense was $27.5 million and $20.9 million for the first nine months of 2021 and 2020, respectively, an increase of 31%. The increase was primarily due to an increase in expenses associated with the integration of Radius, partially offset by one-time expenses in the first nine months of 2020 resulting from COVID-19.

~~Occupancy expense remained relatively flat at $6.5 million and $6.2 million for the third and second quarters of 2021, respectively.~~

~~Occupancy expense remained relatively flat at $6.5 million for the third quarters of 2021 and 2020.~~

Occupancy expense was $19.5 million and $22.2 million for the first nine months of 2021 and 2020, respectively, a decrease of 12%. The decrease was primarily due to lease impairment expenses in the second quarter of 2020 resulting from the impact of COVID-19.

Depreciation and amortization expense was ~~$10.5~~$11.0 million and ~~$11.5~~$11.8 million for the ~~third and second~~first quarters of 2022 and 2021, respectively, a decrease of 8%6%. The decrease was primarily due to an increase in fully depreciated assets, partially offset by an increase in the amortization of intangible assets resulting from the ~~acquisition of Radius.~~Acquisition.

Depreciation and amortization expense ~~was $10.5~~remained relatively flat at $11.0 million and $12.3 million for the third quarters of 2021 and 2020, respectively, a decrease of 15%. The decrease was primarily due to an increase in fully depreciated assets, partially offset by an increase in the amortization of intangible assets resulting from the acquisition of Radius.

~~Depreciation and amortization expense was $33.8 million and $41.8~~$10.5 million for the first ~~nine months~~quarter of ~~2021~~2022 and 2020, respectively, a decrease of 19%. The decrease was primarily due to an increase in fully depreciated assets, partially offset by an increase in the amortization of intangible assets resulting from the acquisition of Radius.

~~100~~

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

~~Professional services remained relatively flat at $11.8 million and $11.5 million for the third and second quarters~~fourth quarter of 2021, respectively.

Professional services were ~~$11.8~~$12.4 million and $8.8 million for the third quarters of 2021 and 2020, respectively, an increase of 33%. The increase was primarily due to a $2.5 million increase in professional fees associated with the acquisition of Radius.

~~Professional services were $34.9 million and $32.7~~$11.6 million for the first ~~nine months~~quarters of ~~2021~~2022 and ~~2020,~~2021, respectively, an increase of 7%. The increase was primarily due to an increase in ~~professional fees associated with~~consulting fees.

Professional services remained relatively flat at $12.4 million and $12.7 million for the ~~acquisition~~first quarter of ~~Radius.~~2022 and fourth quarter of 2021, respectively.

Income Taxes

For the ~~third~~first quarter of ~~2021,~~2022, we recorded an income tax expense of ~~$2.7~~$5.0 million primarily related to income tax expense for state jurisdictions that limit net operating loss utilization. For the first ~~nine months of~~quarter 2021, we recorded an income tax ~~expense~~benefit of ~~$0.1~~$2.8 million primarily related to ~~income tax expense for state jurisdictions that limit net operating loss utilization, partially offset by~~ changes in the deferred tax asset valuation allowance resulting from a deferred tax liability assumed with the acquisition of Radius. For the third quarter and first nine months of 2020, we recorded an income tax expense (benefit) of $(0.1) million and $0.2 million, respectively, primarily attributable to the tax effects of other comprehensive income associated with our available for sale portfolio.Acquisition.

We continue to recognize a full valuation allowance against net deferred tax assets. This determination was based on the assessment of the available positive and negative evidence. Our improved and accelerated profitability are examples of positive evidence ~~to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. We intend to continue maintaining~~that there is a ~~full~~reasonable possibility that a portion of our valuation allowance ~~on our deferred~~is no longer needed in 2022. A release of the valuation allowance will result in a material tax ~~assets until there is sufficient evidence to support~~benefit recognized in the ~~future realization~~quarter of ~~all or some portion of these deferred tax assets. Changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions~~release.

Income taxes are recorded ~~as current period~~on a separate entity basis whereby each operating segment determines income tax ~~expense.~~expense or benefit as if it filed a separate tax return. Differences between separate entity and consolidated tax returns are eliminated upon consolidation.

Segment Information

LendingClub Bank

LendingClub Corporation (Parent Only)

~~101~~61

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

~~purchase and sale of~~limited to, servicing fee revenue for loans serviced prior to ~~February 1, 2021~~the Acquisition, and ~~ongoing issuances of education~~interest income and ~~patient finance loans that are originated by banking partners.~~interest expense related to the Retail Program and Structured Program transactions.

Financial information for the segments is presented in the following ~~tables:~~table:

LendingClub
Bank LendingClub
Corporation
(Parent only) Intercompany
Eliminations Total
Three Months Ended September 30, Three Months Ended September 30, Three Months Ended September 30, Three Months Ended September 30,
2021 2020 2021 2020 2021 2020 2021 2020
Non-interest income:
Marketplace revenue $ 151,109 $ — $ 23,447 $ 54,635 $ — $ — $ 174,556 $ 54,635
Other non-interest income 25,393 — 4,140 3,115 (23,211) — 6,322 3,115
Total non-interest income 176,502 — 27,587 57,750 (23,211) — 180,878 57,750
Interest income:
Interest income 64,606 — 18,254 46,773 — — 82,860 46,773
Interest expense (2,270) — (15,302) (33,479) — — (17,572) (33,479)
Net interest income 62,336 — 2,952 13,294 — — 65,288 13,294
Total net revenue 238,838 — 30,539 71,044 (23,211) — 246,166 71,044
(Provision for) reversal of credit losses (38,019) — 495 3,669 — — (37,524) 3,669
Non-interest expense (161,101) — (40,885) (109,112) 23,211 — (178,775) (109,112)
Income (Loss) before income tax benefit (expense) 39,718 — (9,851) (34,399) — — 29,867 (34,399)
Income tax benefit (expense) (4,670) — 12,607 74 (10,619) — (2,682) 74
Consolidated net income (loss) $ 35,048 $ — $ 2,756 $ (34,325) $ (10,619) $ — $ 27,185 $ (34,325)

~~102~~

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~


		LendingClub Bank				LendingClub Corporation (Parent only)				Intercompany Eliminations				Total					LendingClub Bank				LendingClub Corporation (Parent only)				Intercompany Eliminations				Consolidated Total
		Eight Months Ended September 30,				Nine Months Ended September 30,				Nine Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,		Two Months Ended March 31,		Three Months Ended March 31,				Three Months Ended March 31,		Two Months Ended March 31,		Three Months Ended March 31,
		2021		2020		2021		2020		2021		2020		2021		2020			2022		2021		2022		2021		2022		2021		2022		2021
Non-interest income:	Non-interest income:																	Non-interest income:
Marketplace revenue	Marketplace revenue	$	315,885	$	—	$	92,133	$	175,993	$	—	$	—	$	408,018	$	175,993	Marketplace revenue	$	164,835	$	36,062	$	15,131	$	45,665	$	—	$	—	$	179,966	$	81,727
Other non-interest income	Other non-interest income	73,433		—		12,519		10,166		(67,282)		—		18,670		10,166		Other non-interest income	19,498		19,700		4,223		4,098		(13,830)		(18,191)		9,891		5,607
Total non-interest income	Total non-interest income	389,318		—		104,652		186,159		(67,282)		—		426,688		186,159		Total non-interest income	184,333		55,762		19,354		49,763		(13,830)		(18,191)		189,857		87,334

Interest income:	Interest income:																	Interest income:
Interest income	Interest income	127,429		—		67,748		176,744		—		—		195,177		176,744		Interest income	99,823		17,498		11,830		27,092		—		—		111,653		44,590
Interest expense	Interest expense	(5,489)		—		(59,989)		(120,315)		—		—		(65,478)		(120,315)		Interest expense	(3,644)		(1,247)		(8,329)		(24,837)		—		—		(11,973)		(26,084)
Net interest income	Net interest income	121,940		—		7,759		56,429		—		—		129,699		56,429		Net interest income	96,179		16,251		3,501		2,255		—		—		99,680		18,506

Total net revenue	Total net revenue	511,258		—		112,411		242,588		(67,282)		—		556,387		242,588		Total net revenue	280,512		72,013		22,855		52,018		(13,830)		(18,191)		289,537		105,840

(Provision for) reversal of credit losses	(Provision for) reversal of credit losses	(96,938)		—		3,287		(3,800)		—		—		(93,651)		(3,800)		(Provision for) reversal of credit losses	(52,509)		(23,963)		—		2,470		—		—		(52,509)		(21,493)
Non-interest expense	Non-interest expense	(374,782)		—		(165,666)		(399,426)		67,282		—		(473,166)		(399,426)		Non-interest expense	(178,459)		(75,499)		(26,575)		(76,944)		13,830		18,191		(191,204)		(134,252)
Income (Loss) before income tax benefit (expense)	Income (Loss) before income tax benefit (expense)	39,538		—		(49,968)		(160,638)		—		—		(10,430)		(160,638)		Income (Loss) before income tax benefit (expense)	49,544		(27,449)		(3,720)		(22,456)		—		—		45,824		(49,905)
Income tax benefit (expense)	Income tax benefit (expense)	7,866		—		23,821		(245)		(31,785)		—		(98)		(245)		Income tax benefit (expense)	(12,355)		23		17,727		2,292		(10,360)		506		(4,988)		2,821
Consolidated net income (loss)	Consolidated net income (loss)	$	47,404	$	—	$	(26,147)	$	(160,883)	$	(31,785)	$	—	$	(10,528)	$	(160,883)	Consolidated net income (loss)	$	37,189	$	(27,426)	$	14,007	$	(20,164)	$	(10,360)	$	506	$	40,836	$	(47,084)

The Company integrated ~~its business acquisition of Radius~~the Acquisition into its reportable segments in the first quarter of 2021. As the Company’s reportable segments are based on legal organizational structure and ~~LendingClub~~LC Bank was formed upon the ~~acquisition,~~Acquisition, an analysis of the Company’s results of operations and material trends for the ~~third~~first quarter ~~and first nine months~~ of ~~2021~~2022 compared to the ~~third~~first quarter ~~and first nine months~~ of ~~2020~~2021 is provided on a consolidated basis in “Results of Operations.”

Supervision and Regulatory Environment

We are regularly subject to claims, individual and class action lawsuits, and lawsuits alleging regulatory ~~violations, government (including state agencies) and regulatory~~violations. Further, we are subject to periodic exams, investigations, inquiries or requests, enforcement actions and other ~~proceedings.~~proceedings from federal and state regulatory agencies, including the federal banking regulators that directly regulate the Company and/or LC Bank. The number and significance of these claims, lawsuits, exams, investigations, inquiries, requests and proceedings have been increasing in part because our ~~business expanded~~products and services have been increasing in scope and ~~geographic reach,~~complexity and ~~our products and services increased~~ in ~~complexity. At this time, the Company is not able to project the impact of becoming~~part because we have become a bank holding company operating a national ~~bank on~~bank. Although historically the ~~number~~Company has generally resolved these matters in a manner that was not materially adverse to its financial results or ~~significance of such matters.~~

~~State Inquiries and Licensing~~

~~We have historically conducted~~ business ~~through nonbank entities, some of which maintain or maintained various financial services licenses in numerous jurisdictions. Much of our business activity is now conducted through the Bank pursuant~~operations, no assurance can be given as to the laws applicable to national banks and accordingly our nonbank entities have returned, and are continuing to return, certain state financial services licenses. Nevertheless, even after state financial services licenses are returned, we may continue to be subject totiming, outcome or consequences of any of these matters in the ~~regulation, supervision and enforcement of various state regulatory authorities with respect to the legacy or residual activities. Furthermore, our nonbank entities continue to~~future.

~~103~~62

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

~~maintain certain state licenses, which continue to subject us to the regulation, supervision and enforcement of some state regulatory authorities.~~

We are subject to examination by the New York Department of Financial Services (NYDFS) and regulators in other states with respect to the period prior to our acquisition of Radius and becoming a bank holding company operating a national bank. These exams have included the application of state usury rates and lending arrangements where a bank or other third party has made a loan and then sells and assigns it to an entity that is engaged in assisting with the origination or servicing of a loan. For example, in July 2018, the NYDFS issued an Online Lending Report (Lending Report). The Lending Report included, among other things, an analysis of the online lenders operating in New York including their methods of operations, lending practices, interest rates and costs, products offered and complaints and investigations relating to online lenders. The Lending Report also included information and recommendations regarding protecting New York’s markets and consumers. Although the Lending Report noted that the rapid growth of online lending demonstrates there is value to new technologies that allow financial institutions to connect with borrowers in new ways, it noted that in many cases an online lender is the “true lender” and that lending in New York, whether through banks, credit unions or online lenders, should be subject to applicable usury limits. We have periodically had discussions with various regulatory agencies regarding our historical business model and engaged in similar discussions with the NYDFS and other regulators. During the course of such discussions, we decided to voluntarily comply with certain rules and regulations while we were not a bank holding company operating a national bank.

Prior to discontinuing the offer and sale of Retail Notes in December 2020, the Company undertook a review of its portfolio of licenses and had discussions with regulators in Texas, Arizona, New York, Florida and North Dakota concerning the registrations required for the Company’s issuance of Retail Notes to investors in these states and applied for registrations in these states to facilitate these operations. The Company had discussions with certain of these regulators to resolve concerns regarding the Company’s historical licensing/registration status in connection with Retail Notes issued and reached resolutions with Texas, Arizona and North Dakota to resolve their concerns, the outcome of which is not material to the Company’s operations or financial position. The Company is not able to predict with certainty the timing, outcome, or consequence of discussions, with the remaining states, including in relation to whether and how any concerns those states have will be resolved. Discussions with these remaining states could result in fines or other penalties, which are not expected to have a material adverse impact on the Company’s operations or results of operations.

Regulatory Actions Taken in Relation to COVID-19

Regulators and government officials at the federal government level and in states across the country have issued orders, passed laws or otherwise issued guidance in connection with COVID-19. Some of these orders and laws have placed restrictions on debt collection activity, all or certain types of communications with delinquent borrowers or others, required that borrowers be allowed to defer payments on outstanding debt, ~~govern~~governed credit reporting and the use of credit reporting, and placed certain restrictions and requirements on operations in the workplace. We have taken steps to monitor regulatory developments relating to COVID-19 and to comply with orders and laws applicable to our business. Given the ongoing nature of the pandemic, it is possible that additional orders, laws, or regulatory guidance may still be issued. ~~The Company is~~We are not able to predict the extent of the impact on ~~its~~our business from any regulatory activity relating to or resulting from COVID-19.

Federal Banking Regulator Supervision

Since the Acquisition, we are subject to supervision, regulation, examination and enforcement by multiple federal banking regulatory bodies. Specifically, as a bank holding company, the Company is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the Board of Governors of the Federal Reserve System (FRB). Further, as a national bank, LC Bank is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the OCC. Accordingly, we have been and continue to invest in regulatory compliance and be subject to certain parameters, obligations and/or limitations set forth by the banking regulations and regulators with respect to the operation of our business.

Consequences

If we are found to not have complied with applicable laws, regulations or requirements, we could: (i) lose one or more of our licenses or authorizations, (ii) become subject to a consent order or administrative enforcement action, (iii) face lawsuits (including class action lawsuits), sanctions, penalties, or other monetary losses due to judgments, orders, or settlements, (iv) be in breach of certain contracts, which may void or cancel such contracts, (v) decide or

~~104~~

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

be compelled to modify or suspend certain of our business practices, (vi) be unable to execute on certain Company initiatives, or (vii) be required to obtain a license in such jurisdiction, which may have an adverse effect on our ability to operate and/or evolve our lending marketplace and other products and/or services; any of which may harm our business or financial results.

See “Part I – Item 1. Business – Regulation and Supervision,” “Part I – Item 1A. Risk Factors – Risks Related to Regulation, Supervision and Compliance,” and “Part I – Item 1A. Risk Factors – Risks Related to Operating Our Business” in our Annual Report for further discussion regarding our supervision and regulatory environment.

Capital Management

The prudent management of capital is fundamental to the successful achievement of our business initiatives. We actively manage capital through a process that continuously assesses and monitors the Company’s overall capital adequacy. Our objective is to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to meet both regulatory and market expectations.

The formation of ~~the~~LC Bank as a nationally chartered association and the organization of the Company as a bank holding company subjects us to various capital adequacy guidelines issued by the OCC and the FRB, including the requirement to maintain regulatory capital ratios in accordance with the Basel Committee on Banking Supervision standardized approach for U.S. banking organizations (U.S. Basel III). As a U.S. Basel III standardized approach institution, we selected the one-time election to opt-out of the requirements to include all the components of accumulated other comprehensive income included in common stockholder’s equity. The minimum capital

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

requirements under the U.S. Basel III capital framework are: a ~~common equity Tier 1 (CET1)~~CET1 risk-based capital ratio of 4.5%, a Tier 1 risk-based capital ratio of 6.0%, a total risk-based capital ratio of 8.0%, and a Tier 1 leverage ratio of 4.0%. Additionally, a ~~capital conservation buffer~~Capital Conservation Buffer (CCB) of 2.5% must be maintained above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases, and certain discretionary bonus payments.

~~The following table summarizes the Bank’s regulatory capital amounts and ratios at September 30, 2021 (in millions):~~

~~N/A – Not applicable~~

In addition to these guidelines, the banking regulators may require a banking organization to maintain capital at levels higher than the minimum ratios prescribed under the U.S. Basel III capital framework. In this regard, and unless otherwise directed by the FRB and the OCC, we have made commitments for the Company and ~~the~~LC Bank ~~(for a minimum of three years following its formation)~~(until February 2024) to maintain a CET1 risk-based capital ratio of 11.0%, a Tier 1 risk-based capital ratio above 11.0%, a total risk-based capital ratio above 13.0%, and a Tier 1 leverage ratio of 11.0%. ~~For further information on the U.S. Basel III framework, see~~See “Part I – Item 1. Business – Regulation and Supervision – Regulatory Capital Requirements and Prompt Corrective Action” in our Annual ~~Report.~~Report and “Notes to Condensed Consolidated Financial Statements– Note 18. Regulatory Requirements” in this Reportfor additional information.

The following table summarizes LC Bank’s regulatory capital amounts and ratios (in millions):


LendingClub Bank	March 31, 2022				December 31, 2021				Required Minimum plus Required CCB for Non-Leverage Ratios
	Amount		Ratio		Amount		Ratio
CET1 capital (1)	$	577.6	16.0	%	$	523.7	16.7	%	7.0	%
Tier 1 capital	$	577.6	16.0	%	$	523.7	16.7	%	8.5	%
Total capital	$	623.8	17.3	%	$	563.7	18.0	%	10.5	%
Tier 1 leverage	$	577.6	13.2	%	$	523.7	14.3	%	4.0	%
Risk-weighted assets	$	3,606.6	N/A		$	3,130.4	N/A		N/A
Quarterly adjusted average assets	$	4,379.8	N/A		$	3,667.7	N/A		N/A

N/A – Not applicable

The following table presents the regulatory capital and ratios of the Company (in millions):


	March 31, 2022				December 31, 2021				Required Minimum plus Required CCB for Non-Leverage Ratios
LendingClub	Amount		Ratio		Amount		Ratio
CET1 capital (1)	$	756.0	20.6	%	$	710.0	21.3	%	7.0	%
Tier 1 capital	$	756.0	20.6	%	$	710.0	21.3	%	8.5	%
Total capital	$	818.7	22.3	%	$	767.9	23.0	%	10.5	%
Tier 1 leverage	$	756.0	15.6	%	$	710.0	16.5	%	4.0	%
Risk-weighted assets	$	3,668.1	N/A		$	3,333.2	N/A		N/A
Quarterly adjusted average assets	$	4,859.8	N/A		$	4,301.7	N/A		N/A

N/A – Not applicable

The higher risk-based capital ratios for the Company reflect generally lower risk-weights for assets held by LendingClub Corporation as compared with LC Bank.

~~105~~64

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

~~The following table presents the regulatory capital and ratios of the Company as of September 30, 2021 (in millions):~~

~~N/A – Not applicable~~

In response to the COVID-19 pandemic, the FRB, OCC, and FDIC adopted a final rule related to the regulatory capital treatment of the allowance for credit losses under CECL. ~~This~~As permitted by the rule, ~~allowed electing banking organizations~~the Company elected to delay the estimated impact of CECL on regulatory capital, ~~through 2021, followed by~~resulting in a CET1 capital benefit of $35.5 million at December 31, 2021. This benefit is phased out over a three-year transition period ~~ending~~that commenced on January 1, ~~2025 to phase-in~~2022 at a rate of 25% each year through January 1, 2025. Accordingly, the ~~aggregate amount of~~ capital benefit ~~provided by the delay. The Company has elected this relief. At September 30, 2021, $24.2~~included in CET1 capital was reduced to $26.7 million ~~of this capital benefit was applied to the computation of CET1 capital.~~at March 31, 2022.

Liquidity

We manage liquidity to meet our cash flow and collateral obligations in a timely manner at a reasonable cost. We must maintain operating liquidity to meet our expected daily and forecasted cash flow requirements, as well as contingent liquidity to meet unexpected funding requirements.

As our primary business at ~~the~~LC Bank involves taking deposits and making loans, a key role of liquidity management is to ensure that customers have timely access to funds from deposits and for loans. Liquidity management also involves maintaining sufficient liquidity to repay wholesale borrowings, pay operating expenses and support extraordinary funding requirements when necessary.

LendingClub Bank Liquidity

The primary sources of LC Bank short-term liquidity include ~~cash;~~cash, unencumbered ~~available-for-sale~~AFS debt ~~securities;~~securities, and unused borrowing capacity with the Federal Home Loan Bank (FHLB). ~~The~~Additionally, customer deposits provide LC Bank ~~also relies on our stable and~~with a significant source of relatively low-cost ~~deposit base to generate liquidity over time.~~funds. The primary uses of LC Bank liquidity include the funding of loans and securities purchases; withdrawals, maturities and ~~maturities of deposits;~~the payment of interest on deposits; compensation and ~~funding~~benefits expense; taxes; capital expenditures, including internally developed software, leasehold improvements and computer equipment; and costs associated with the continued development and support of ~~loans~~our online lending marketplace platform.

Net capital expenditures were $21.6 million, or 7.7% of total net revenue and ~~securities purchases.~~$4.6 million or 6.3% of total net revenue, for the first quarters of 2022 and 2021, respectively. Capital expenditures in 2022 are expected to be approximately $65 million, primarily related to costs associated with the continued development and support of our online lending marketplace platform, including regulatory compliance costs.

As of ~~September 30,~~March 31, 2022 and December 31, 2021, cash and cash equivalents at ~~the~~LC Bank were ~~$825.5~~$1.0 billion and $659.9 million, ~~and~~respectively, reflecting the continued growth in LC Bank deposits ~~were $2.9 billion.~~during the first quarter of 2022. Outstanding PPPLF borrowings were ~~$391.9~~$193.4 million and $271.9 million at ~~September 30,~~March 31, 2022 and December 31, 2021, respectively, and are collateralized by ~~SBA~~ PPP loans originated by the Company. In addition, ~~the~~LC Bank has available Federal Home Loan Bank of Des Moines secured borrowing capacity totaling ~~$169.8 million. The~~$299.6 million and $173.4 million at March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, LC Bank also has secured borrowing capacity available under the FRB Discount Window totaling ~~$179.8 million.~~$105.0 million and $75.2 million, respectively.

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~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

LendingClub Holding Company Liquidity

The primary source of liquidity at the holding company is ~~$100.8~~$119.7 million and $88.3 million in cash and cash equivalents as of ~~September 30, 2021.~~March 31, 2022 and December 31, 2021, respectively. Additionally, the holding company has the ability to access the capital markets through additional registrations and public equity offerings.

Uses of cash at the holding company include the routine cash flow requirements as a bank holding company, such as interest and ~~expenses;~~expenses (including those associated with our office leases), the needs of ~~subsidiaries~~LC Bank for additional

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

equity and, as required, its need for debt ~~financing;~~financing and support for extraordinary funding requirements when necessary.

Factors Impacting Liquidity

The Company’s liquidity could be adversely impacted by deteriorating financial and market conditions, the inability or unwillingness of a creditor to provide funding, an idiosyncratic event (e.g., a major loss, causing a perceived or actual deterioration in its financial condition), an adverse systemic event (e.g., default or bankruptcy of a significant capital markets participant), or others.

We believe, based on our projections, that our cash on hand, AFS securities, ~~available for sale,~~ available funds, and cash flow from operations is sufficient to meet our liquidity needs for the next twelve months, as well as beyond the next twelve months. See “Item 1. Financial Statements – Condensed Consolidated Statements of Cash Flows” for additional detail regarding our cash flows.

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~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

Market Risk

Market risk represents the risk of potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices, and/or other relevant market rates or prices. The primary market risk to which we are exposed is interest rate risk. Interest rate risk arises from financial instruments including loans, securities and borrowings, all entered into for purposes other than trading.

Our net interest income is affected by changes in the level of interest rates, the relationship between rates, the impact of interest rate fluctuations on asset prepayments, and the level and composition of deposits and liabilities.

Interest Rate Sensitivity

LendingClub Bank

~~We measure interest rate sensitivity as the change in fair value of certain assets and liabilities due to a hypothetical change in interest rates.~~ Loans ~~held for investment~~HFI at ~~LendingClub~~LC Bank are funded primarily through our deposit base, and the majority of loans on ~~the~~LC Bank’s balance sheet, at any point in time, are retained in the ~~held-for-investment~~HFI portfolio and accounted for at amortized cost. As a result, the primary component of interest rate risk on our financial instruments at ~~the~~LC Bank arises from the impact of fluctuations in loan and deposit rates on our net interest income. Therefore, we measure this sensitivity by assessing the impact of hypothetical changes in interest rates on our net interest income results.

The following table presents the change in projected net interest income for the next twelve months due to a hypothetical instantaneous parallel change in interest rates relative to current rates as of ~~September 30, 2021:~~March 31, 2022:



	~~September 30, 2021~~
200 basis point increase	~~3.6~~ (0.4)	%
100 basis point decrease	~~(0.5)~~(0.3)	%

~~As the above table illustrates, our balance sheet is asset-sensitive;~~The impact of these hypothetical interest rate changes are not significant to LC Bank’s net interest ~~income would benefit from~~income. Non-maturity deposit rates at March 31, 2022 are below the 100 basis point hypothetical interest rate reduction which results in an ~~increase in interest rates, while a decline in interest rates would result in a decrease in~~insignificant negative impact to net interest income.

~~The following table presents the maturities of loans and leases held for investment as of September 30, 2021:~~

Due in
1 Year or Less Due After
1 Year Through
5 Years Due After
5 Years
Through
15 Years September 30, 2021
Unsecured personal $ — $ 1,258,279 $ — $ 1,258,279
Residential mortgages 1,285 2,324 137,591 141,200
Secured consumer — 21,175 293,364 314,539
Other consumer 1,220 — — 1,220
Total consumer loans held for investment 2,505 1,281,778 430,955 1,715,238
Equipment finance 13,257 111,103 33,097 157,457
Commercial real estate 27,497 68,936 219,702 316,135
Commercial and industrial 86,403 323,043 109,716 519,162
Total commercial loans and leases held for investment 127,157 503,082 362,515 992,754
Total loans and leases held for investment $ 129,662 $ 1,784,860 $ 793,470 $ 2,707,992
Loans and leases due after one year at fixed interest rates $ — $ 1,727,322 $ 387,265 $ 2,114,587
Loans and leases due after one year at variable interest rates $ — $ 57,538 $ 406,204 $ 463,742

~~108~~66

LENDINGCLUB CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

The following table presents the maturities of loans and leases HFI as of March 31, 2022:


	Due in 1 Year or Less		Due After 1 Year Through 5 Years		Due After 5 Years Through 15 Years		March 31, 2022
Unsecured personal	$	—	$	2,335,146	$	23,646	$	2,358,792
Residential mortgages	1,574		743		166,800		169,117
Secured consumer	12		45,471		48,117		93,600

Total consumer loans held for investment	1,586		2,381,360		238,563		2,621,509
Equipment finance	11,355		105,983		26,442		143,780
Commercial real estate	18,812		70,844		224,054		313,710
Commercial and industrial	19,589		199,103		124,605		343,297
Total commercial loans and leases held for investment	49,756		375,930		375,101		800,787
Total loans and leases held for investment	$	51,342	$	2,757,290	$	613,664	$	3,422,296
Loans and leases due after one year at fixed interest rates			$	2,701,715	$	256,786	$	2,958,501
Loans and leases due after one year at variable interest rates			$	55,575	$	356,878	$	412,453

For the weighted-average yields on ~~the Company’s~~our AFS securities ~~available for sale~~ portfolio, see “Notes to Condensed Consolidated Financial Statements – Note 5.4. Securities Available for Sale.”

LendingClub Holding Company

At the holding company level, we continue to measure interest rate sensitivity by evaluating the change in fair value of certain assets and liabilities due to a hypothetical change in interest rates. Principal payments on our loans ~~held for investment~~HFI at fair value continue to reduce the outstanding balance of this portfolio, and, as a result, the fair value impact from changes in interest rates continues to diminish. ~~For additional detail regarding interest rate sensitivity on our legacy loan portfolio as well as our securities available for sale, servicing asset, and borrowings, see “Part II –Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report.~~

Contingencies

For a comprehensive discussion of contingencies as of ~~September 30, 2021,~~March 31, 2022, see “Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note ~~18.~~17. Commitments and Contingencies.”

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~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

~~Supplemental Financial Information~~

The following table is provided to delineate between the assets and liabilities belonging to our member payment dependent self-directed retail program (Retail Program) note holders and certain VIEs that we are required to consolidate in accordance with GAAP. Such assets are not legally ours and the associated liabilities are payable only from the cash flows generated by those assets (i.e. Pass-throughs). As such, these debt holders do not have a secured interest in any other assets of LendingClub. We believe this is a useful measure because it illustrates the overall financial stability and operating leverage of the Company.
September 30, 2021 December 31, 2020
Retail Program (1)
Consolidated VIEs (2)(4)
All Other LendingClub (3)
Condensed Consolidated Balance Sheet
Retail Program (1)
Consolidated VIEs (2)(4)
All Other LendingClub (3)
Condensed Consolidated Balance Sheet
Assets
Total cash and cash equivalents $ — $ — $ 862,151 $ 862,151 $ — $ — $ 524,963 $ 524,963
Restricted cash — 12,537 65,040 77,577 — 13,473 90,049 103,522
Securities available for sale at fair value — — 274,930 274,930 — — 142,226 142,226
Loans held for sale at fair value (4)
— 52,175 99,985 152,160 — 92,802 29,100 121,902
Loans and leases held for investment, net — — 2,603,256 2,603,256 — — — —
Retail and certificate loans held for investment at fair value 283,153 15,388 — 298,541 584,066 52,620 — 636,686
Other loans held for investment at fair
value (4)
— 24,333 2,896 27,229 — 46,120 3,834 49,954
Property, equipment and software, net — — 96,073 96,073 — — 96,641 96,641
Goodwill — — 75,717 75,717 — — — —
Other assets
1,761 491 280,874 283,126 3,797 1,134 182,468 187,399
Total assets $ 284,914 $ 104,924 $ 4,360,922 $ 4,750,760 $ 587,863 $ 206,149 $ 1,069,281 $ 1,863,293
Liabilities and Equity
Total deposits $ — $ — $ 2,838,719 $ 2,838,719 $ — $ — $ — $ —
Short-term borrowings — — 46,110 46,110 — — 104,989 104,989
Advances from PPPLF — — 391,945 391,945 — — — —
Retail notes, certificates and secured borrowings at fair value 283,153 15,388 — 298,541 584,066 52,620 88 636,774
Payable on Structured Program borrowings (4)
— 89,252 — 89,252 — 152,808 — 152,808
Other long-term debt — — 15,563 15,563 — — — —
Other liabilities 1,761 284 263,795 265,840 3,797 721 240,033 244,551
Total liabilities 284,914 104,924 3,556,132 3,945,970 587,863 206,149 345,110 1,139,122
Total equity — — 804,790 804,790 — — 724,171 724,171
Total liabilities and equity $ 284,914 $ 104,924 $ 4,360,922 $ 4,750,760 $ 587,863 $ 206,149 $ 1,069,281 $ 1,863,293

~~(1)~~Represents loans held for investment at fair value that are funded directly by our Retail Program notes. The liabilities are only payable from the cash flows generated by the associated assets. We do not assume principal or interest rate risk on loans facilitated through our lending marketplace that are funded by our Retail Program because loan balances, interest rates and maturities are matched and offset by an equal balance of notes with the exact same interest rates and maturities. We do not retain any economic interests from our Retail Program. Interest expense on Retail Program notes of $44.5 million and $77.2 million was equally matched and offset by interest income from the related loans of $44.5 million and $77.2 million for the first nine months of 2021 and 2020, respectively, resulting in no net effect on our net interest income.

~~(2)~~ ~~Represents assets and equal and offsetting liabilities of certain VIEs that we are required to consolidate in~~

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~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

accordance with GAAP, but which are not legally ours. The liabilities are only payable from the cash flows generated by the associated assets. The creditors of the VIEs have no recourse to the general credit of the Company. Interest expense on these liabilities owned by third parties of $11.9 million and $106.4 million was equally matched and offset by interest income on the loans of $11.9 million and $106.4 million for the first nine months of 2021 and 2020, respectively, resulting in no net effect on our net interest income. Economic interests held by LendingClub, including retained interests, residuals and equity of the VIEs, are reflected in “Loans held for sale at fair value,” “Other loans held for investment at fair value” and “Restricted cash,” respectively, within the “All Other LendingClub” column.

~~(3)~~ Represents all other assets and liabilities of LendingClub, other than those related to our Retail Program and certain consolidated VIEs, but includes any economic interests held by LendingClub, including retained interests, residuals and equity of those consolidated VIEs.

~~(4)~~ The Company has sponsored Structured Program transactions that have been consolidated, resulting in an increase to “Other loans held for investment at fair value,” “Loans held for sale at fair value” and the related “Payable on Structured Program borrowings.” See “~~Notes to Condensed Consolidated Financial Statements – Note 13. Short-term Borrowings and Long-term Debt” for additional information.~~

Critical Accounting Estimates

Certain of the Company’s accounting policies that involve a higher degree of judgment and complexity are discussed in “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” in our Annual Report. There have been no significant changes to these critical accounting estimates during the first ~~nine months~~quarter of ~~2021, except as noted below.~~

~~Allowance for Expected Credit Losses~~

We reserve for expected credit losses on our loan and lease portfolio through the allowance for loan and lease losses (ALLL) and for expected credit losses in our unfunded lending commitments through other liabilities. Collectively, the ALLL and reserves for expected credit losses in unfunded lending commitments are referred to as the allowance for credit losses (ACL). Changes in the ACL are reflected in net income through provision for credit losses. Changes in the credit risk profile of our loans and leases result in changes in provision expense with a resulting change, net of charge-offs and recoveries, in the ACL balance.

The ACL represents our estimate of expected lifetime credit losses over the contractual life of the loan and lease portfolios and on the unfunded lending commitments. Our determination of the ACL is based on periodic evaluation of the loan and lease portfolios and unfunded lending commitments that are not unconditionally cancellable considering a number of relevant underlying factors, including key assumptions and evaluation of quantitative and qualitative information. Estimates of expected future loan and lease losses are determined by using statistical models and management’s judgement. The models are designed to forecast probability of default, exposure at default and loss given default by correlating certain macroeconomic forecast data to historical experience. The models are generally applied at the portfolio level to pools of loans with similar risk characteristics. The macroeconomic data used in the models is based on forecasted variables for the reasonable and supportable period of two years. Beyond this forecast period the models gradually revert to long-term historical loss conditions over a one year period. Expected losses are estimated through contractual maturity, giving appropriate consideration to estimated prepayments unless the borrower has a right to renew that is not cancellable or it is reasonably expected that the loan will be modified as a TDR.

A qualitative allowance which incorporates management’s judgement is also included in the estimation of expected future loan and lease losses, including qualitative adjustments in circumstances where the model output is inconsistent with management’s expectations with respect to expected credit losses. This allowance is used to adjust for limitations in modeled results related to the current economic conditions and capture risks in the portfolio such

~~111~~

~~LENDINGCLUB CORPORATION~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)~~

as considerations with respect to the impact of current economic events, the outcomes of which are uncertain. These events may include, but are not limited to, political conditions, legislation that may directly or indirectly affect the banking industry and economic conditions affecting specific geographical areas and industries in which the Company conducts business.

Loans and leases that do not share common risk characteristics and significant loans that are considered collateral-dependent are individually evaluated. For these loans, the ALLL is determined through review of data specific to the borrower and related collateral, if any. For TDRs, default expectations and estimated prepayment speeds that are specific to each of the restructured loan populations are incorporated in the determination of the ALLL. The evaluation of quantitative and qualitative information is performed through assessments of groups of assets that share similar risk characteristics and certain individual loans and leases that do not share similar risk characteristics with the collective group. Loans are grouped generally by product type and significant loan portfolios are assessed for credit losses using statistical models. The evaluation process is inherently imprecise and subjective as it requires significant management judgment based on underlying factors that are susceptible to change, sometimes materially and rapidly.

The methodology used to determine an estimate for the reserve for unfunded commitments is similar to that used to determine the funded component of the ALLL and is measured over the period there is a contractual obligation to extend credit that is not unconditionally cancellable. The reserve for unfunded commitments is adjusted for factors specific to binding commitments, including the probability of funding and exposure at default. A detailed discussion of the methodology used in determining the ACL is included in “~~Note 1. Summary of Significant Accounting Policies~~.”2022.

~~112~~67

LENDINGCLUB CORPORATION

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a comprehensive discussion regarding quantitative and qualitative disclosures about market risk, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Risk.”

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management evaluated, with the participation of the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the ~~Securities~~ Exchange ~~Act of 1934, as amended)~~Act) as of ~~September 30, 2021. As~~

~~permitted by SEC guidance for newly acquired businesses, this evaluation did not include an assessment of those~~

~~disclosure controls and procedures that are subsumed by, and did not include an assessment of internal control over~~

~~financial reporting as it relates to Radius which was acquired on February 1, 2021.~~March 31, 2022. In designing and evaluating its disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance, not absolute assurance, of achieving the desired control objectives, and is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures as of ~~September 30, 2021,~~March 31, 2022, were designed and functioned effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the ~~Securities and~~ Exchange Act ~~of 1934, as amended,~~ is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including the principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

~~Except as described below, no~~No change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the ~~Securities~~ Exchange ~~Act of 1934)~~Act) occurred during the ~~third~~first quarter of ~~2021,~~2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

As part of our ongoing integration of Radius, we are continuing to incorporate Radius into our enterprise controls and procedures and to augment our enterprise-wide controls to reflect the risks inherent in this acquisition. See “~~Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 2. Business Acquisition”~~ ~~for detail regarding the significance of the acquisition of Radius to the Company’s Condensed Consolidated Financial Statements.~~

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For a comprehensive discussion of legal proceedings, see “Part I. Financial Information – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note ~~18.~~17. Commitments and Contingencies – Legal,” which is incorporated herein by reference.

Item 1A. Risk Factors

The risks described in “Part I – Item 1A. Risk Factors” in our Annual Report, could materially and adversely affect our business, financial condition, operating results and prospects, and the trading price of our common stock could decline. While we believe the risks and uncertainties described therein include all material risks currently known by

~~113~~

~~LENDINGCLUB CORPORATION~~

us, it is possible that these may not be the only ones we face. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. The Risk Factors section of our Annual Report remains current in all material ~~respects.~~respects, with the exception of the below.

LENDINGCLUB CORPORATION

Our business operations may be adversely impacted by political events, terrorism, military conflict or acts of war, cyber-attacks, public health issues, natural disasters, severe weather, climate change, infrastructure failure or outages, labor disputes and other business interruptions.

Our business operations are subject to interruption by, among other things, political events, terrorism, military conflict or acts of war (including the war in Ukraine), cyber-attacks, public health issues, natural disasters, severe weather, climate change, infrastructure failure or outages, labor disputes and other events which could: (i) decrease demand for our products and services, (ii) adversely affect the macroeconomy and/or our customers, or (iii) make it difficult or impossible for us to deliver a satisfactory experience to our customers. Any such events could also affect the Company by impacting the stability of our deposit base, impairing the ability of our borrowers to repay their outstanding loans, causing significant property damage or otherwise impair the value of collateral securing our loans, and/or resulting in loss of revenue and/or cause us to incur additional expenses. Furthermore, in the event of any disruption to our operations or those of the companies with whom we do business with, we could incur significant losses, require substantial recovery time and experience significant expenditures in order to resume or maintain operations, any of which could have a material adverse impact on our business, financial condition and results of operations.

For example, the Ukrainian-Russian conflict, the responses thereto (such as sanctions imposed by the United States and other countries) and any expansion thereof is likely to have unpredictable and/or adverse effects on the domestic and global economy and financial markets. Although we have not yet experienced any material direct impact from the Ukrainian-Russian conflict, in part because our business is conducted exclusively in the United States, our business, financial condition or results of operations may be impacted if the conflict prolongs and/or its impact exacerbates. Further, the Ukrainian-Russian conflict and its impact may also have the effect of heightening many of the other risks described in “Item 1A. Risk Factors” and elsewhere in our Annual Report, such as escalating inflation, elevating the possibility of a decline in economic conditions and increasing cybersecurity risk.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

~~None.~~Not applicable.

Item 5. Other Information

~~None.~~Not applicable.

~~114~~69

LENDINGCLUB CORPORATION

Item 6. Exhibits

Exhibit Index

The exhibits noted in the accompanying Exhibit Index are filed or incorporated by reference as a part of this Report and such Exhibit Index is incorporated herein by reference.

Incorporated by Reference
Exhibit
Number Exhibit Description Form File No. Exhibit Filing
Date Filed Herewith
3.1
Restated Certificate of Incorporation of LendingClub Corporation
8-K
000-54752
3.1
December 16, 2014
3.2
Certificate of Amendment of Restated Certificate of Incorporation of LendingClub Corporation, effective July 5, 2019
10-Q
001-36771
3.1
August 7, 2019
3.3
Amended and Restated Bylaws of the Company, effective March 22, 2018
8-K/A
001-36771
3.1
June 22, 2018
10.1
Non-Employee Director Compensation Policy
X
31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101.INS XBRL Instance Document‡ X
101.SCH XBRL Taxonomy Extension Schema Document X
101.CAL XBRL Taxonomy Extension Calculation Linkbase X
101.DEF XBRL Taxonomy Extension Definition Linkbase X
101.LAB XBRL Taxonomy Extension Label Linkbase X
101.PRE XBRL Taxonomy Extension Presentation Linkbase X
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing
Date

Filed Herewith

3.1

Restated Certificate of Incorporation of LendingClub Corporation

Certificate of Amendment of Restated Certificate of Incorporation of LendingClub Corporation, effective July 5, 2019

Amended and Restated Bylaws of the Company, effective March 22, 2018

Non-Employee Director Compensation Policy, effective March 31, 2022

31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document‡

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

‡ The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

~~115~~70

LENDINGCLUB CORPORATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LENDINGCLUB CORPORATION

(Registrant)

Date:

~~November 3, 2021~~May 4, 2022

/s/ SCOTT SANBORN

Scott Sanborn

Chief Executive Officer

Date:

~~November 3, 2021~~May 4, 2022

/s/ THOMAS W. CASEY

Thomas W. Casey

Chief Financial Officer

~~116~~71


	As of December 31, 2020
	LendingClub Historical Presentation		Reclassification Adjustments		LendingClub Reclassified Amounts
Assets
Cash and cash equivalents	$	524,963	$	(524,963)	$	—
Cash and due from banks	—		5,197		5,197
Interest bearing deposits in banks	—		519,766		519,766
Total cash and cash equivalents	—		524,963		524,963
Restricted cash	103,522		—		103,522
Securities available for sale at fair value	142,226		—		142,226
Loans held for investment at fair value	636,686		(636,686)		—
Loans held for investment by the Company at fair value	49,954		(49,954)		—
Loans held for sale by the Company at fair value	121,902		(121,902)		—
Loans held for sale at fair value	—		121,902		121,902
Retail and certificate loans held for investment at fair value	—		636,686		636,686
Other loans held for investment at fair value	—		49,954		49,954
Accrued interest receivable	5,205		(5,205)		—
Property, equipment and software, net	96,641		—		96,641
Operating lease assets	74,037		(74,037)		—
Intangible assets, net	11,427		(11,427)		—
Other assets	96,730		90,669		187,399
Total assets	$	1,863,293	$	—	$	1,863,293
Liabilities and Equity
Accounts payable	$	3,698	$	(3,698)	$	—
Accrued interest payable	4,572		(4,572)		—
Operating lease liabilities	94,538		(94,538)		—
Accrued expenses and other liabilities	101,457		(101,457)		—
Payable to investors	40,286		(40,286)		—
Credit facilities and securities sold under repurchase agreements	104,989		(104,989)		—
Short-term borrowings	—		104,989		104,989
Retail notes, certificates and secured borrowings at fair value	636,774		—		636,774
Payable on Structured Program borrowings	152,808		—		152,808
Other liabilities	—		244,551		244,551
Total liabilities	1,139,122		—		1,139,122
Equity
Common stock	881		—		881
Additional paid-in capital	1,508,020		—		1,508,020
Accumulated deficit	(786,214)		—		(786,214)
Accumulated other comprehensive income	1,484		—		1,484
Total equity	724,171		—		724,171
Total liabilities and equity	$	1,863,293	$	—	$	1,863,293


	Three months ended September 30, 2020
	LendingClub Historical Presentation		Reclassification Adjustments		LendingClub Reclassified Amounts
Net Revenue
Transaction fees	$	24,372	$	(24,372)	$	—
Interest income	46,773		(46,773)		—
Interest expense	(32,440)		32,440		—
Net fair value adjustments	(696)		696		—
Net interest income and fair value adjustments	13,637		(13,637)		—
Investor fees	25,850		(25,850)		—
Gain on sales of loans	7,739		(7,739)		—
Net investor revenue	47,226		(47,226)		—
Other revenue	3,115		(3,115)		—
Total net revenue	74,713		(74,713)		—
Non-interest income
Marketplace revenue (1)	—		54,635		54,635
Other non-interest income	—		3,115		3,115
Total non-interest income	—		57,750		57,750
Interest income
Interest on loans held for sale	—		14,916		14,916

Interest on retail and certificate loans held for investment at fair value	—		27,117		27,117
Interest on other loans held for investment at fair value	—		1,948		1,948
Interest on securities available for sale	—		2,754		2,754
Other interest income	—		38		38
Total interest income	—		46,773		46,773
Interest expense

Interest on short-term borrowings	—		3,179		3,179
Interest on retail notes, certificates and secured borrowings	—		27,117		27,117
Interest on Structured Program borrowings	—		3,046		3,046
Interest on other long-term debt	—		137		137
Total interest expense (2)	—		33,479		33,479
Net interest income	—		13,294		13,294
Total net revenue (3)	—		71,044		71,044
Reversal of credit losses (3)	—		(3,669)		(3,669)
Operating expenses
Sales and marketing	7,201		(7,201)		—
Origination and servicing	15,595		(15,595)		—
Engineering and product development	31,984		(31,984)		—
Other general and administrative	54,332		(54,332)		—
Total operating expenses	109,112		(109,112)		—
Non-interest expense
Compensation and benefits	—		58,649		58,649
Marketing	—		2,135		2,135
Equipment and software	—		6,430		6,430
Occupancy	—		6,466		6,466
Depreciation and amortization	—		12,348		12,348
Professional services	—		8,817		8,817
Other non-interest expense	—		14,267		14,267
Total non-interest expense	—		109,112		109,112
Loss before income tax expense	(34,399)		—		(34,399)
Income tax benefit	(74)		—		(74)
Consolidated net loss	$	(34,325)	$	—	$	(34,325)


	Nine months ended September 30, 2020
	LendingClub Historical Presentation		Reclassification Adjustments		LendingClub Reclassified Amounts
Net Revenue
Transaction fees	$	164,489	$	(164,489)	$	—
Interest income	176,744		(176,744)		—
Interest expense	(114,447)		114,447		—
Net fair value adjustments	(108,812)		108,812		—
Net interest income and fair value adjustments	(46,515)		46,515		—
Investor fees	86,924		(86,924)		—
Gain on sales of loans	23,724		(23,724)		—
Net investor revenue	64,133		(64,133)		—
Other revenue	10,166		(10,166)		—
Total net revenue	238,788		(238,788)		—
Non-interest income
Marketplace revenue (1)	—		175,993		175,993
Other non-interest income	—		10,166		10,166
Total non-interest income	—		186,159		186,159
Interest income
Interest on loans held for sale	—		67,579		67,579

Interest on retail and certificate loans held for investment at fair value	—		92,193		92,193
Interest on other loans held for investment at fair value	—		6,021		6,021
Interest on securities available for sale	—		9,930		9,930
Other interest income	—		1,021		1,021
Total interest income	—		176,744		176,744
Interest expense

Interest on short-term borrowings	—		16,332		16,332
Interest on retail notes, certificates and secured borrowings	—		92,193		92,193
Interest on Structured Program borrowings	—		11,418		11,418
Interest on other long-term debt	—		372		372
Total interest expense (2)	—		120,315		120,315
Net interest income	—		56,429		56,429
Total net revenue (3)	—		242,588		242,588
Provision for credit losses (3)	—		3,800		3,800
Operating expenses
Sales and marketing	65,708		(65,708)		—
Origination and servicing	54,419		(54,419)		—
Engineering and product development	109,861		(109,861)		—
Other general and administrative	169,438		(169,438)		—
Total operating expenses	399,426		(399,426)		—
Non-interest expense
Compensation and benefits	—		199,991		199,991
Marketing	—		43,030		43,030
Equipment and software	—		20,931		20,931
Occupancy	—		22,241		22,241
Depreciation and amortization	—		41,832		41,832
Professional services	—		32,723		32,723
Other non-interest expense	—		38,678		38,678
Total non-interest expense	—		399,426		399,426
Loss before income tax expense	(160,638)		—		(160,638)
Income tax expense	245		—		245
Consolidated net loss	$	(160,883)	$	—	$	(160,883)


Three Months Ended September 30,	2021				2020
	Common Stock		Preferred Stock (1)		Common Stock		Preferred Stock (1)




Net income (loss) attributable to stockholders	$	27,185	$	—	$	(27,779)	$	(6,546)
Weighted-average common shares – Basic	99,073,507		—		73,566,385		17,335,485
Weighted-average common shares – Diluted	106,108,662		—		73,566,385		17,335,485
Net income (loss) per share attributable to stockholders – Basic	$	0.27	$	0.00	$	(0.38)	$	(0.38)
Net income (loss) per share attributable to stockholders – Diluted	$	0.26	$	0.00	$	(0.38)	$	(0.38)


	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Purchase price of PCD securities at acquisition	$	446	$	25,915
Allowance for credit losses on PCD securities at acquisition	5,640		13,742
Par value of acquired PCD securities at acquisition	$	6,086	$	39,657


September 30, 2021	Days Past Due
	Current-29		30-59		60-89		90 or more		Total
Equipment finance	$	157,457	$	—	$	—	$	—	$	157,457
Commercial real estate	315,355		163		143		474		316,135
Commercial and industrial (1)	440,932		222		76,645		1,363		519,162
Total commercial loans and leases held for investment	$	913,744	$	385	$	76,788	$	1,837	$	992,754


September 30, 2021	Maximum Exposure to Loss
	Securities Available for Sale		Other Assets		Net Assets
Unconsolidated Trusts	$	31,253	$	5,517	$	36,770
Certificate Program	42,441		6,490		48,931
Investment Fund	—		7,725		7,725
Total unconsolidated VIEs	$	73,694	$	19,732	$	93,426


	September 30, 2021
	Asset-Backed Securities Related to Structured Program Transactions
	Senior Securities		Subordinated Securities		CLUB Certificates
Fair value of interests held	$	37,708	$	11,810	$	24,176
Expected weighted-average life (in years)	0.7		1.3		0.8
Discount rates
100 basis point increase	$	(260)	$	(109)	$	(187)
200 basis point increase	$	(515)	$	(232)	$	(370)
Expected credit loss rates on underlying loans
10% adverse change	$	—	$	(854)	$	(587)
20% adverse change	$	—	$	(1,746)	$	(1,204)
Expected prepayment rates
10% adverse change	$	—	$	(473)	$	(323)
20% adverse change	$	—	$	(1,106)	$	(673)


	September 30, 2021		December 31, 2020
Internally developed software (1)	$	105,978	$	101,953
Leasehold improvements	36,053		35,140
Computer equipment	29,240		27,030
Purchased software	19,515		19,004
Furniture and fixtures	8,105		8,203
Construction in progress	4,782		2,761
Total property, equipment and software	203,673		194,091
Accumulated depreciation and amortization	(107,600)		(97,450)
Total property, equipment and software, net	$	96,073	$	96,641


	Number of Units	Weighted- Average Grant Date Fair Value
Unvested at December 31, 2020	11,395,112	$	11.26
Granted	5,494,222	$	13.47
Vested	(3,800,624)	$	12.06
Forfeited/expired	(2,082,511)	$	11.94
Unvested at September 30, 2021	11,006,199	$	11.97


2021	$	11,590
2022	43,075
2023	34,338
2024	25,975
2025	15,126
Thereafter	12,194
Total lease payments	$	142,298
Discount effect	(16,531)
Present value of future minimum lease payments	$	125,767


	Three Months Ended June 30, 2021
	LendingClub Bank						LendingClub Corporation (Parent only)						Consolidated LendingClub Corporation(1)
	Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate
Interest-earning assets(2)
Cash, cash equivalents and restricted cash	$	551,895	$	186	0.13	%	$	99,419	$	4	0.02	%	$	642,182	$	190	0.12	%
Securities available for sale at fair value	165,579		348		0.84	%	108,377		2,191		8.09	%	273,956		2,539		3.71	%
Loans held for sale	144,037		5,723		15.89	%	99,408		2,971		11.96	%	243,445		8,694		14.29	%
Loans and leases held for investment:
Unsecured personal loans	511,787		19,499		15.24	%	—		—		—	%	511,787		19,499		15.24	%
Secured consumer loans	532,426		5,173		3.89	%	—		—		—	%	532,426		5,173		3.89	%
Commercial loans and leases	623,735		9,062		5.81	%	—		—		—	%	623,735		9,062		5.81	%
PPP loans	615,942		5,334		3.46	%	—		—		—	%	615,942		5,334		3.46	%
Loans and leases held for investment	2,283,890		39,068		6.84	%	—		—		—	%	2,283,890		39,068		6.84	%
Retail and certificate loans held for investment at fair value	—		—		—	%	448,822		16,014		14.27	%	448,822		16,014		14.27	%
Other loans held for investment at fair value	—		—		—	%	38,662		1,222		12.64	%	38,662		1,222		12.64	%
Total interest-earning assets	3,145,401		45,325		5.76	%	794,688		22,402		11.28	%	3,930,957		67,727		6.89	%

Cash and due from banks and restricted cash	34,612						111,274						144,897
Allowance for loan and lease losses	(51,109)						—						(51,109)
Other non-interest earning assets	221,870						749,674						447,826
Total assets	$	3,350,774					$	1,655,636					$	4,472,571

Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$	2,071,112	$	1,618	0.31	%	$	—	$	—	—	%	$	2,071,112	$	1,618	0.31	%
Savings accounts and certificates of deposit	301,939		81		0.11	%	—		—		—	%	301,939		81		0.11	%
Interest-bearing deposits	2,373,051		1,699		0.29	%	—		—		—	%	2,373,051		1,699		0.29	%
Short-term borrowings	2,138		1		0.06	%	77,373		1,002		5.19	%	79,511		1,003		5.05	%
Advances from PPPLF	312,168		272		0.35	%	—		—		—	%	312,168		272		0.35	%
Retail notes, certificates and secured borrowings	—		—		—	%	449,057		16,014		14.27	%	449,057		16,014		14.27	%
Structured Program borrowings	—		—		—	%	121,738		2,668		8.77	%	121,738		2,668		8.77	%
Other long-term debt	708		—		—	%	15,696		166		4.22	%	16,404		166		4.05	%
Total interest-bearing liabilities	2,688,065		1,972		0.29	%	663,864		19,850		11.96	%	3,351,929		21,822		2.61	%


		Three Months Ended September 30, 2020(1)
	Consolidated LendingClub Corporation(2)
		Average Balance		Interest Income/ Expense		Average Yield/ Rate
Interest-earning assets (3)
Cash, cash equivalents and restricted cash		$	427,110	$	38	0.04	%
Securities available for sale at fair value		203,246		2,754		5.42	%
Loans held for sale at fair value		374,827		14,916		15.92	%






Retail and certificate loans held for investment at fair value		745,339		27,117		14.55	%
Other loans held for investment at fair value		61,988		1,948		12.57	%
Total interest-earning assets		1,812,510		46,773		10.32	%

Cash and cash equivalents and restricted cash		95,810
Other non-interest earning assets		311,269
Total assets		$	2,219,589

Interest-bearing liabilities




Short-term borrowings		299,613		3,179		4.24	%

Retail notes, certificates and secured borrowings		745,842		27,117		14.55	%
Structured Program borrowings		183,122		3,046		6.65	%
Other long-term debt		4,276		137		12.91	%
Total interest-bearing liabilities		1,232,853		33,479		10.87	%


Other liabilities		244,032
Total liabilities		$	1,476,885

Total equity		$	742,704
Total liabilities and equity		$	2,219,589

Interest rate spread						(0.55)	%

Net interest income and net interest margin				$	13,294	2.93	%


	Nine Months Ended September 30, 2021(1)
	LendingClub Bank						LendingClub Corporation (Parent only)						Consolidated LendingClub Corporation(2)
	Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate
Interest-earning assets (3)
Cash, cash equivalents and restricted cash	$	651,675	$	676	0.16	%	$	133,174	$	25	0.03	%	$	769,759	$	701	0.12	%
Securities available for sale at fair value	188,349		1,424		1.13	%	107,600		6,530		8.09	%	295,949		7,954		3.58	%
Loans held for sale at fair value	125,165		13,316		15.96	%	104,620		9,071		11.56	%	229,785		22,387		12.99	%
Loans and leases held for investment:
Unsecured personal loans	605,126		62,423		15.47	%	—		—		—	%	605,126		62,423		15.47	%
Secured consumer loans	503,798		13,076		3.89	%	—		—		—	%	503,798		13,076		3.89	%
Commercial loans and leases	616,660		22,068		5.37	%	—		—		—	%	616,660		22,068		5.37	%
PPP loans	549,137		14,446		3.95	%	—		—		—	%	549,137		14,446		3.95	%
Loans and leases held for investment	2,274,721		112,013		7.39	%	—		—		—	%	2,274,721		112,013		7.39	%
Retail and certificate loans held for investment at fair value	—		—		—	%	454,886		48,448		14.20	%	454,886		48,448		14.20	%
Other loans held for investment at fair value	—		—		—	%	38,563		3,674		12.71	%	38,563		3,674		12.71	%
Total interest-earning assets	3,239,910		127,429		5.90	%	838,843		67,748		10.77	%	4,063,663		195,177		6.86	%

Cash and due from banks and restricted cash	34,556						102,150						125,310
Allowance for loan and lease losses	(59,262)						—						(59,262)
Other non-interest earning assets	231,281						710,167						413,309
Total assets	$	3,446,485					$	1,651,160					$	4,543,020

Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	2,046,355		4,238		0.31	%	—		—		—	%	2,046,355		4,238		0.31	%
Savings accounts and certificates of deposit	309,500		374		0.18	%	—		—		—	%	309,500		374		0.18	%
Interest-bearing deposits	2,355,855		4,612		0.30	%	—		—		—	%	2,355,855		4,612		0.30	%
Short-term borrowings	1,379		1		0.14	%	77,088		3,115		5.39	%	78,467		3,116		5.30	%
Advances from PPPLF	374,841		876		0.35	%	—		—		—	%	374,841		876		0.35	%
Retail notes, certificates and secured borrowings	—		—		—	%	455,779		48,449		14.18	%	455,779		48,448		14.18	%
Structured Program borrowings	—		—		—	%	121,654		7,995		8.76	%	121,654		7,996		8.76	%
Other long-term debt	974		—		—	%	15,691		430		3.65	%	16,665		430		3.44	%
Total interest-bearing liabilities	2,733,049		5,489		0.30	%	670,212		59,989		11.94	%	3,403,261		65,478		2.59	%


		Nine Months Ended September 30, 2020(1)
	Consolidated LendingClub Corporation(2)
		Average Balance		Interest Income/ Expense		Average Yield/ Rate
Interest-earning assets (3)
Cash, cash equivalents and restricted cash		$	360,588	$	1,021	0.38	%
Securities available for sale at fair value		237,154		9,930		5.58	%
Loans held for sale at fair value		603,272		67,579		14.94	%






Retail and certificate loans held for investment at fair value		856,695		92,193		14.35	%
Other loans held for investment at fair value		63,099		6,021		12.72	%
Total interest-earning assets		2,120,808		176,744		11.11	%

Cash and due from banks and restricted cash		121,801

Other non-interest earning assets		356,071
Total assets		$	2,598,680

Interest-bearing liabilities




Short-term borrowings		$	485,692	$	16,332	4.48	%

Retail notes, certificates and secured borrowings		857,672		92,193		14.33	%
Structured Program borrowings		169,487		11,418		8.98	%
Other long-term debt		9,104		372		5.46	%
Total interest-bearing liabilities		1,521,955		120,315		10.54	%


Other liabilities		277,673
Total liabilities		$	1,799,628

Total equity		$	799,052
Total liabilities and equity		$	2,598,680

Interest rate spread						0.57	%

Net interest income and net interest margin				$	56,429	5.32	%


	September 30, 2021								December 31, 2020
	Retail Program (1)		Consolidated VIEs (2)(4)		All Other LendingClub (3)		Condensed Consolidated Balance Sheet		Retail Program (1)		Consolidated VIEs (2)(4)		All Other LendingClub (3)		Condensed Consolidated Balance Sheet
Assets
Total cash and cash equivalents	$	—	$	—	$	862,151	$	862,151	$	—	$	—	$	524,963	$	524,963
Restricted cash	—		12,537		65,040		77,577		—		13,473		90,049		103,522
Securities available for sale at fair value	—		—		274,930		274,930		—		—		142,226		142,226
Loans held for sale at fair value (4)	—		52,175		99,985		152,160		—		92,802		29,100		121,902
Loans and leases held for investment, net	—		—		2,603,256		2,603,256		—		—		—		—
Retail and certificate loans held for investment at fair value	283,153		15,388		—		298,541		584,066		52,620		—		636,686
Other loans held for investment at fair value (4)	—		24,333		2,896		27,229		—		46,120		3,834		49,954
Property, equipment and software, net	—		—		96,073		96,073		—		—		96,641		96,641
Goodwill	—		—		75,717		75,717		—		—		—		—
Other assets	1,761		491		280,874		283,126		3,797		1,134		182,468		187,399
Total assets	$	284,914	$	104,924	$	4,360,922	$	4,750,760	$	587,863	$	206,149	$	1,069,281	$	1,863,293
Liabilities and Equity
Total deposits	$	—	$	—	$	2,838,719	$	2,838,719	$	—	$	—	$	—	$	—
Short-term borrowings	—		—		46,110		46,110		—		—		104,989		104,989
Advances from PPPLF	—		—		391,945		391,945		—		—		—		—
Retail notes, certificates and secured borrowings at fair value	283,153		15,388		—		298,541		584,066		52,620		88		636,774
Payable on Structured Program borrowings (4)	—		89,252		—		89,252		—		152,808		—		152,808
Other long-term debt	—		—		15,563		15,563		—		—		—		—
Other liabilities	1,761		284		263,795		265,840		3,797		721		240,033		244,551
Total liabilities	284,914		104,924		3,556,132		3,945,970		587,863		206,149		345,110		1,139,122
Total equity	—		—		804,790		804,790		—		—		724,171		724,171
Total liabilities and equity	$	284,914	$	104,924	$	4,360,922	$	4,750,760	$	587,863	$	206,149	$	1,069,281	$	1,863,293