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Loans and Leases Held for Investment, Net of Allowance For Loan and Lease Losses
 12 Months Ended
Dec. 31, 2021
Loans and Leases Receivable Disclosure [Abstract]  
Loans and Leases Held for Investment, Net of Allowance For Loan and Lease Losses Loans and Leases Held for Investment, Net of Allowance for Loan and Lease LossesLendingClub records certain loans and leases HFI at amortized cost, whereas loans initially classified as HFS are recorded at fair value. Prior to the Acquisition and becoming a bank holding company, all loans were recorded at fair value. Therefore, the following disclosures apply to loans and leases HFI at amortized cost.
Accrued interest receivable is excluded from the amortized cost basis of loans and leases HFI and is reported within “Other assets” on the Balance Sheet. Accrued interest within that caption related to loans and leases HFI was $15.6 million as of December 31, 2021.

Loans and Leases Held for Investment

The Company defines its loans and leases HFI portfolio segments as (i) consumer and (ii) commercial. The following table presents the components of each portfolio segment by class of financing receivable:
December 31, 2021
Unsecured personal$1,804,578 
Residential mortgages151,362 
Secured consumer65,976 
Total consumer loans held for investment2,021,916 
Equipment finance (1)
149,155 
Commercial real estate310,399 
Commercial and industrial (2)
417,656 
Total commercial loans and leases held for investment877,210 
Total loans and leases held for investment2,899,126 
Allowance for loan and lease losses(144,389)
Loans and leases held for investment, net (3)
$2,754,737 
(1)    Comprised of sales-type leases for equipment. See “Note 18. Leases” for additional information.
(2)    Includes $268.3 million of pledged loans under the Paycheck Protection Program (PPP).
(3)    As of December 31, 2021, the Company had $149.2 million in loans pledged as collateral under the FRB Discount Window.

December 31, 2021GrossALLLNet
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 allowance for loan and lease losses (ALLL) to loans and leases HFI.
(2)    Excluding the $268.3 million of PPP loans, the ALLL represented 2.6% of commercial loans and leases HFI and 5.5% of total loans and leases HFI. PPP loans are guaranteed by the Small Business Administration (SBA) and, therefore, the Company determined no ACL is required on these loans.
The activity in the ACL by portfolio segment was as follows:
Year Ended December 31, 2021ConsumerCommercialTotal
Allowance for loan and lease losses, beginning of period$— $— $— 
Credit loss expense for loans and leases held for investment (1)
136,789 4,162 140,951 
Initial allowance for PCD loans acquired during the period (2)
603 11,837 12,440 
Charge-offs (3)
(8,789)(1,663)(10,452)
Recoveries209 1,241 1,450 
Allowance for loan and lease losses, end of period$128,812 $15,577 $144,389 
Reserve for unfunded lending commitments, beginning of period$— $— $— 
Credit loss expense for unfunded lending commitments — 1,231 1,231 
Reserve for unfunded lending commitments, end of period (4)
$— $1,231 $1,231 
(1)    Includes $6.9 million of credit loss expense for Radius loans at acquisition.
(2)    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 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. The net impact to the allowance for PCD assets on the acquisition date was $12.4 million.
(3)    Unsecured personal loans are charged-off when a 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 $110.8 million of unfunded commitments.
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 the classes of financing receivables within the consumer portfolio segment by credit quality indicator based on delinquency status and origination year:
December 31, 2021 Term Loans and Leases by Origination Year
20212020201920182017PriorWithin Revolving PeriodTotal
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 personal1,804,578 — — — — — — 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
Current62,731 — — — — — 10 62,741 
30-59 days past due171 — — — — — — 171 
60-89 days past due53 — — — — — — 53 
90 or more days past due— — — 2,629 382 — — 3,011 
Total secured consumer62,955 — — 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.

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.

Loss – Loans and leases that are considered uncollectible and of little value.

The following table presents the classes of financing receivables within the commercial portfolio segment by risk rating and origination year:
December 31, 2021 Term Loans and Leases by Origination Year
20212020201920182017PriorWithin Revolving PeriodTotal
Equipment finance
Pass $52,440 $35,398 $26,918 $15,457 $6,184 $8,814 $— $145,211 
Special mention1,531 — 1,810 — — — — 3,341 
Substandard — — — 603 — — — 603 
Doubtful — — — — — — — — 
Loss— — — — — — — — 
Total equipment finance53,971 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 estate55,613 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 table presents an analysis of the past due loans and leases HFI within the commercial portfolio segment (1):
December 31, 202130-59
Days		60-89
Days		90 or More
Days		Total Days Past Due
Equipment finance$— $— $— $— 
Commercial real estate104 — 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 table.
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 believes that the probability of collection does not warrant further accrual.

The following table presents nonaccrual loans and leases:
December 31, 2021
Nonaccrual(1)
Nonaccrual with no related ACL(2)
Unsecured personal$1,676 $— 
Residential mortgages1,373 1,373 
Secured consumer3,011 3,011 
Total nonaccrual consumer loans held for investment6,060 4,384 
Equipment finance603 — 
Commercial real estate989 989 
Commercial and industrial2,333 1,061 
Total nonaccrual commercial loans and leases held for investment3,925 2,050 
Total nonaccrual loans and leases held for investment$9,985 $6,434 
(1)     There were no loans that were 90 days or more past due and accruing as of December 31, 2021.
(2)     Subset of total nonaccrual loans and leases.

December 31, 2021Nonaccrual
Nonaccrual Ratios (1)
Total nonaccrual consumer loans held for investment$6,060 0.3 %
Total nonaccrual commercial loans and leases held for investment3,925 0.4 %
Total nonaccrual loans and leases held for investment (2)(3)
$9,985 0.3 %
(1)     Calculated as the ratio of nonaccruing loans and leases to loans and leases HFI.
(2)     The ALLL represented 1446% of nonaccrual loans and leases as of December 31, 2021.
(3)     Nonaccruing loans and leases represented 0.4% of total loans and leases HFI, excluding PPP loans.

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.

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 ACL. Subsequent changes to the ACL are recorded as additions to or reversals of credit losses on the Income Statement.
Acquired PCD loans were as follows:
December 31, 2021
Purchase price$337,118 
Allowance for credit losses (1)
30,378 
Discount attributable to other factors12,204 
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 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. The net impact to the allowance for PCD assets on the acquisition date was $12.4 million.