Loans Held For Investment, Loans Held For Sale, Notes, Certificates and Secured Borrowings and Loan Servicing Rights

Loans Held For Investment, Loans Held For Sale, Notes, Certificates and Secured Borrowings

The Company sells loans and issues notes and the Trust issues certificates as a means to allow investors to invest in the corresponding loans. At December 31, 2017 and 2016, loans held for investment, notes, certificates and secured borrowings measured at fair value on a recurring basis were as follows:



	Loans Held For Investment						Notes, Certificates and Secured Borrowings
December 31,	2017			2016			2017			2016
Aggregate principal balance outstanding	$	3,141,391		$	4,547,138		$	3,161,080		$	4,572,912
Net fair value adjustments	(209,066		)	(252,017		)	(206,312		)	(252,017		)
Fair value	$	2,932,325		$	4,295,121		$	2,954,768		$	4,320,895

In October 2017, LCAM initiated the full wind down of six funds by redeeming the Certificates issued by the funds and transferring the loan participations underlying the redeemed Certificates to third party investors. The Company received $384.7 million in proceeds from the sale of loan participations with a fair value of $103.8 million and issued secured borrowings with a fair value of $282.5 million. The secured borrowings are collateralized by loan participations with a fair value of $280.9 million . The Company paid $386.1 million to certificate holders with a $1.4 million net cash outflow recorded in “Net fair value adjustments” in the Consolidated Statements of Operations. At December 31, 2017, $242.7 million of the aggregate principal balance outstanding and a fair value of $228.1 million included in “Loans held for investment” were pledged as collateral for secured borrowings. See “Note 14. Secured Borrowings” for additional information.

At December 31, 2017 and 2016, loans invested in by the Company for which there were no associated notes, certificates or secured borrowings were as follows:



	Loans Invested in by the Company
	Loans Held For Investment					Loans Held For Sale						Total
	December 31, 2017			December 31, 2016		December 31, 2017			December 31, 2016			December 31, 2017			December 31, 2016
Aggregate principal balance outstanding	$	371,379		18,515		$	242,273		$	9,345		$	613,652		$	27,860
Net fair value adjustments	(10,149		)	(1,652	)	(6,448		)	(297		)	(16,597		)	(1,949		)
Fair value	$	361,230		16,863		$	235,825		$	9,048		$	597,055		$	25,911

The net change in fair value recorded in earnings on loans invested in by the Company was $(25.8) million during the year ended December 31, 2017. This change was offset by $35.7 million in interest income earned on the loans held by the Company during the year ended December 31, 2017.

The Company used its own capital to purchase $1.6 billion in loans during 2017 and sold $990.3 million in loans during 2017, of which $198.5 million was securitized or contributed to CLUB Certificates and sold and $791.8 million was sold to whole loan investors. The aggregate principal balance outstanding of loans invested in by the Company was $613.7 million at December 31, 2017, of which $242.3 million was held for sale primarily to support upcoming securitization initiatives and sales to whole loan investors. See “Note 7. Fair Value of Assets and Liabilities” for a fair value rollforward of loans invested in by the Company for the years ended December 31, 2017 and 2016.

At December 31, 2017, $359.4 million of the aggregate principal balance outstanding included in “Loans held for investment” were pledged as collateral for payables to securitization note and residual certificate holders. Additionally, $62.1 million of the aggregate principal balance outstanding included in “Loans held for sale” were pledged as collateral for the Warehouse credit facility. See “Note 13. Debt” for additional information related to these debt obligations.

The Company continues to evaluate the impact of natural disasters on loans held by LendingClub and investors. Temporary relief measures on payment obligations have been provided to borrowers who reside in the affected areas. At December 31, 2017, $14.0 million of loans invested in by the Company were to borrowers who reside in the affected areas. The Company has reviewed its portfolio for potential losses from these recent natural disasters and reflected additional expected credit losses for these loans in the valuation of loans invested in by the Company. The Company continues to monitor performance of these loans.

Loans that were 90 days or more past due (including non-accrual loans) were as follows:



	December 31, 2017						December 31, 2016
	> 90 days past due			Non-accrual loans			> 90 days past due			Non-accrual loans
Loans held for investment and loans held for sale:
Outstanding principal balance	$	36,588		$	3,289		$	45,207		$	4,965
Net fair value adjustments	(30,071		)	(2,675		)	(39,734		)	(4,312		)
Fair value	$	6,517		$	614		$	5,473		$	653
Number of loans (not in thousands)	3,779			591			3,887			465

Loans invested in by the Company:
Outstanding principal balance	$	1,015		$	122		$	511		$	90
Net fair value adjustments	(861		)	(107		)	(449		)	(80		)
Fair value	$	154		$	15		$	62		$	10
Number of loans (not in thousands)	257			34			154			18

Loan Servicing Rights

Loans underlying loan servicing rights had a total outstanding principal balance of $8.18 billion and $6.54 billion as of December 31, 2017 and 2016, respectively.