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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 June 30, 2024
Commission File Number: 001-36771
 
LendingClub Corporation
(Exact name of registrant as specified in its charter)
Delaware51-0605731
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
595 Market Street, Suite 200,
San Francisco,CA94105
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (415) 930-7440
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, par value $0.01 per shareLCNew 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 July 19, 2024, there were 111,816,791 shares of the registrant’s common stock outstanding.


LENDINGCLUB CORPORATION
TABLE OF CONTENTS

1

Glossary

The following is a list of common acronyms and terms LendingClub Corporation regularly uses in its financial reporting:
ACL
Allowance for Credit Losses (includes the allowance for loan and lease losses, allowance for securities available for sale and reserve for unfunded lending commitments)
AcquisitionAcquisition of Radius Bancorp, Inc.
AFSAvailable for Sale
ALLLAllowance for Loan and Lease Losses
Annual Report
Annual Report on Form 10-K for the year ended December 31, 2023
ASUAccounting 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 SheetCondensed Consolidated Balance Sheets
CECLCurrent Expected Credit Losses (Accounting Standards Update 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments)
CET1Common Equity Tier 1
CET1 Capital Ratio
Common Equity Tier 1 capital divided by total risk-weighted assets as defined under the Basel III capital framework
DCFDiscounted Cash Flow
EPSEarnings Per Share
Exchange ActSecurities Exchange Act of 1934, as amended
FRB or Federal ReserveBoard of Governors of the Federal Reserve System and, as applicable, Federal Reserve Bank(s)
GAAPAccounting Principles Generally Accepted in the United States of America
HFILoans which are retained by the Company and held for investment
HFSHeld for sale loans expected to be sold to investors, including Marketplace Loans
Income StatementCondensed Consolidated Statements of Income
LC Bank or LendingClub BankLendingClub Bank, National Association
LendingClub, LC, the Company, we, us, or ourLendingClub 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 LoansLoan Originations designated as HFS and subsequently sold to investors
N/MNot meaningful
OCCOffice of the Comptroller of the Currency
Parent
LendingClub Corporation (the Parent Company of LendingClub Bank, National Association and other subsidiaries)
PPNR or Pre-Provision Net Revenue
PPNR, or Pre-Provision Net Revenue, is a non-GAAP financial measure calculated by subtracting the provision for credit losses and income tax benefit/expense from net income
RadiusRadius Bancorp, Inc.
SECUnited States Securities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
Statement of Cash Flow
Condensed Consolidated Statements of Cash Flows
2

Structured Certificates
Asset-backed securitization transaction where the Company retains the senior note security and sells the residual certificate on a pool of loans to a marketplace investor at a predetermined price
Structured Program transactions
Asset-backed securitization transactions, including Structured Certificate 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
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 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 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 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
VIEVariable Interest Entity
3

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 LendingClub Bank, National Association (LC Bank), and various entities established to facilitate loan sale transactions under LendingClub’s Structured Program.

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, 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:

•The impact of, and our ability to successfully navigate, the current interest rate and economic climate;
•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 accounting standards or policies, including the Current Expected Credit Losses (CECL) standard;
•the results of examinations of us by regulatory authorities and the possibility that any such regulatory authority may, among other things, require us to 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 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;
•the impact of changes to our deposit base;
•the impact of the continuation of, or changes in, the short-term and long-term interest rate environment and economic climate;
•the ability and willingness of borrowers to repay loans;
•our belief that certain loans and leases in our commercial loan portfolio will be fully repaid in accordance with the contractual loan terms;
•our ability to maintain investor confidence in the operation of our platform;
•the performance of our loan products and expected rates of return for investors;
•the impact of, and our ability to resolve, pending litigation and governmental inquiries and investigations;
•the use of our own capital to purchase loans;
•our intention not to sell our available for sale (AFS) investment portfolio;
•our financial condition and performance, including the impact that management’s estimates have on our financial performance and the relationship between interim period and full year results;
•the fair value estimates used in the valuation of our financial instruments;
•our estimate of our interest rate sensitivity;
•our calculation of expected credit losses for our collateral-dependent loans;
•our estimated maximum exposure to losses;
•our expectation of loan servicing fee revenue based on forecasted prepayments and estimated market rate of servicing at the time of loan sale;
•capital expenditures;
•our compliance with contractual obligations or restrictions;
•our ability to develop and maintain effective internal controls;
•our ability to continue to realize the financial and strategic benefits of our digital marketplace bank business model; and
4

LENDINGCLUB CORPORATION

•other risk factors listed from time to time in reports we file with the 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, 2023, 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.

5

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LENDINGCLUB CORPORATION
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
June 30,
2024		December 31,
2023
Assets
Cash and due from banks$19,099 $14,993 
Interest-bearing deposits in banks919,020 1,237,511 
Total cash and cash equivalents938,119 1,252,504 
Restricted cash (1)
31,332 41,644 
Securities available for sale at fair value ($2,869,880 and $1,663,990 at amortized cost, respectively)
2,814,383 1,620,262 
Loans held for sale at fair value791,059 407,773 
Loans and leases held for investment4,228,391 4,850,302 
Allowance for loan and lease losses(228,909)(310,387)
Loans and leases held for investment, net3,999,482 4,539,915 
Loans held for investment at fair value (1)(2)
339,222 272,678 
Property, equipment and software, net166,150 161,517 
Goodwill75,717 75,717 
Other assets (1)
430,586 455,453 
Total assets$9,586,050 $8,827,463 
Liabilities and Equity
Deposits:
Interest-bearing$7,759,632 $7,001,680 
Noninterest-bearing335,696 331,806 
Total deposits8,095,328 7,333,486 
Borrowings (1)(2)
5,474 19,354 
Other liabilities (1)
197,303 222,801 
Total liabilities8,298,105 7,575,641 
Equity
Common stock, $0.01 par value; 180,000,000 shares authorized; 111,812,215 and 110,410,602 shares issued and outstanding, respectively
1,118 1,104 
Additional paid-in capital
1,685,865 1,669,828 
Accumulated deficit(361,653)(388,806)
Accumulated other comprehensive loss(37,385)(30,304)
Total equity1,287,945 1,251,822 
Total liabilities and equity$9,586,050 $8,827,463 
(1)    Includes amounts in consolidated VIEs. See “Notes to Condensed Consolidated Financial Statements – Note 6. Securitizations and Variable Interest Entities.”
(2)    Prior period amounts have been reclassified to conform to the current period presentation.

See Notes to Condensed Consolidated Financial Statements.
6

LENDINGCLUB CORPORATION
Condensed Consolidated Statements of Income
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
 2024202320242023
Non-interest income:
Marketplace revenue$56,353 $82,783 $112,244 $178,417 
Other non-interest income2,360 3,035 4,269 6,391 
Total non-interest income58,713 85,818 116,513 184,808 
Interest income:
Interest on loans held for sale26,721 4,433 41,420 10,190 
Interest and fees on loans and leases held for investment124,819 162,085 257,212 312,552 
Interest on loans held for investment at fair value (1)
12,047 22,886 20,456 51,461 
Interest on securities available for sale42,879 5,948 78,226 9,848 
Other interest income13,168 19,134 29,671 32,848 
Total interest income219,634 214,486 426,985 416,899 
Interest expense:
Interest on deposits90,193 66,521 174,156 119,794 
Other interest expense (1)
913 1,313 1,413 3,749 
Total interest expense91,106 67,834 175,569 123,543 
Net interest income128,528 146,652 251,416 293,356 
Total net revenue187,241 232,470 367,929 478,164 
Provision for credit losses35,561 66,595 67,488 137,179 
Non-interest expense:
Compensation and benefits56,540 71,553 116,094 144,860 
Marketing26,665 23,940 50,801 50,820 
Equipment and software12,360 13,968 25,044 27,664 
Depreciation and amortization13,072 11,638 25,745 23,992 
Professional services7,804 9,974 14,895 19,032 
Occupancy3,941 4,684 7,802 8,994 
Other non-interest expense11,876 15,322 24,110 33,025 
Total non-interest expense132,258 151,079 264,491 308,387 
Income before income tax expense
19,422 14,796 35,950 32,598 
Income tax expense
(4,519)(4,686)(8,797)(8,822)
Net income$14,903 $10,110 $27,153 $23,776 
Earnings per share: (2)
Basic EPS$0.13 $0.09 $0.24 $0.22 
Diluted EPS$0.13 $0.09 $0.24 $0.22 
Weighted-average common shares – Basic111,395,025 107,892,590 111,040,410 107,405,072 
Weighted-average common shares – Diluted111,466,497 107,895,072 111,076,938 107,409,129 
(1)    Prior period amounts have been reclassified to conform to the current period presentation.
(2)    See “Notes to Condensed Consolidated Financial Statements – Note 3. Earnings Per Share” for additional information.

See Notes to Condensed Consolidated Financial Statements.
7

LENDINGCLUB CORPORATION
Condensed Consolidated Statements of Comprehensive Income
(In Thousands)
(Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Net income$14,903 $10,110 $27,153 $23,776 
Other comprehensive loss:
Change in net unrealized loss on securities available for sale
(256)(7,758)(9,686)(2,159)
Other comprehensive loss, before tax
(256)(7,758)(9,686)(2,159)
Income tax effect
68 2,107 2,605 587 
Other comprehensive loss, net of tax
(188)(5,651)(7,081)(1,572)
Total comprehensive income
$14,715 $4,459 $20,072 $22,204 

See Notes to Condensed Consolidated Financial Statements.
8

LENDINGCLUB CORPORATION
Condensed Consolidated Statements of Changes in Equity
(In Thousands, Except Share Data)
(Unaudited)
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Loss
Accumulated
Deficit		Total
Equity
 SharesAmount
Balance at March 31, 2024
111,120,415 $1,111 $1,678,928 $(37,197)$(376,556)$1,266,286 
Stock-based compensation— — 11,315 — — 11,315 
Net issuances under equity incentive plans691,800 7 (4,378)— — (4,371)
Net unrealized loss on securities available for sale, net of tax— — — (188)— (188)
Net income— — — — 14,903 14,903 
Balance at June 30, 2024
111,812,215 $1,118 $1,685,865 $(37,385)$(361,653)$1,287,945 
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Loss
Accumulated
Deficit		Total
Equity
SharesAmount
Balance at December 31, 2023
110,410,602 $1,104 $1,669,828 $(30,304)$(388,806)$1,251,822 
Stock-based compensation— — 24,914 — — 24,914 
Net issuances under equity incentive plans1,401,613 14 (8,877)— — (8,863)
Net unrealized loss on securities available for sale, net of tax
— — — (7,081)— (7,081)
Net income
— — — — 27,153 27,153 
Balance at June 30, 2024
111,812,215 $1,118 $1,685,865 $(37,385)$(361,653)$1,287,945 
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Loss
Accumulated
Deficit		Total
Equity
SharesAmount
Balance at March 31, 2023
107,460,734 $1,075 $1,637,283 $(33,537)$(414,079)$1,190,742 
Stock-based compensation— — 18,021 — — 18,021 
Net issuances under equity incentive plans1,233,386 12 (7,711)— — (7,699)
Net unrealized loss on securities available for sale, net of tax
— — — (5,651)— (5,651)
Net income— — — — 10,110 10,110 
Balance at June 30, 2023
108,694,120 $1,087 $1,647,593 $(39,188)$(403,969)$1,205,523 
 Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Loss
Accumulated
Deficit		Total
Equity
 SharesAmount
Balance at December 31, 2022
106,546,995 $1,065 $1,628,590 $(37,616)$(427,745)$1,164,294 
Stock-based compensation— — 32,091 — — 32,091 
Net issuances under equity incentive plans2,147,125 22 (13,088)— — (13,066)
Net unrealized loss on securities available for sale, net of tax
— — — (1,572)— (1,572)
Net income— — — — 23,776 23,776 
Balance at June 30, 2023
108,694,120 $1,087 $1,647,593 $(39,188)$(403,969)$1,205,523 

See Notes to Condensed Consolidated Financial Statements.
9

LENDINGCLUB CORPORATION
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
Six Months Ended
June 30,
 20242023
Cash Flows from Operating Activities:
Net income$27,153 $23,776 
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
Net fair value adjustments96,084 38,856 
Change in fair value of loan servicing assets35,296 29,650 
Gain on sales of loans(21,657)(27,346)
Provision for credit losses67,488 137,179 
Accretion of loan deferred fees and costs(36,686)(50,292)
Stock-based compensation, net20,993 27,716 
Depreciation and amortization25,745 23,992 
Other, net1,258 (6,363)
Net change to loans held for sale(1,980,860)(138,347)
Net change in operating assets and liabilities:
Other assets8,257 14,065 
Other liabilities(22,044)(49,751)
Net cash (used for) provided by operating activities(1,778,973)23,135 
Cash Flows from Investing Activities:
Net change in loans and leases (1)
435,152 (191,945)
Purchases of securities available for sale(15,341)(45,120)
Proceeds from maturities and paydowns of securities available for sale309,956 19,022 
Purchases of property, equipment and software, net(24,646)(32,255)
Other investing activities(1,271)(7,600)
Net cash provided by (used for) investing activities703,850 (257,898)
Cash Flows from Financing Activities:
Net change in deposits773,171 450,559 
Principal payments on borrowings (1)
(14,211)(88,498)
Other financing activities(8,534)(13,066)
Net cash provided by financing activities750,426 348,995 
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash
$(324,697)$114,232 
Cash, Cash Equivalents and Restricted Cash, Beginning of Period$1,294,148 $1,124,484 
Cash, Cash Equivalents and Restricted Cash, End of Period$969,451 $1,238,716 
Supplemental Cash Flow Information:
Cash paid for interest$178,261 $115,112 
Cash paid for taxes$52 $7,245 
Cash paid for operating leases included in the measurement of lease liabilities$6,360 $6,364 
Supplemental Non-cash Investing Activity:
Net securities retained from Structured Program transactions$1,498,125 $153,229 
(1)    Prior period amounts have been reclassified to conform to the current period presentation.

10

LENDINGCLUB CORPORATION
Condensed Consolidated Statements of Cash Flows (Continued)
(In Thousands)
(Unaudited)
The following presents cash, cash equivalents and restricted cash by category within the Balance Sheet:
 June 30,
2024		December 31,
2023
Cash and cash equivalents$938,119 $1,252,504 
Restricted cash31,332 41,644 
Total cash, cash equivalents and restricted cash
$969,451 $1,294,148 

See Notes to Condensed Consolidated Financial Statements.

11

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 and brought a traditional credit product – the installment loan – into the digital age by leveraging technology, data science, and a unique marketplace model. In February 2021, LendingClub completed the acquisition of Radius, becoming a bank holding company and forming LC Bank as its wholly-owned subsidiary. The Company operates the vast majority of its business through LC Bank, as a lender and originator of loans and as a regulated bank in the United States.

All intercompany balances and transactions have been eliminated in consolidation. 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, including 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 Company made the following presentation changes in the condensed consolidated financial statements and accompanying notes during the first half of 2024:
•Condensed Consolidated Balance Sheets (Balance Sheet) – “Retail and certificate loans held for investment at fair value” were combined within “Loans held for investment at fair value” and “Retail notes and certificates at fair value” were combined within “Borrowings”;
•Condensed Consolidated Statements of Income (Income Statement) – “Interest on retail and certificate loans held for investment at fair value” was combined within “Interest on loans held for investment at fair value” and “Interest on retail notes and certificates at fair value” was combined within “Other interest expense”; and
•Condensed Consolidated Statements of Cash Flows – “Net decrease in retail and certificate loans” was combined within “Net change in loans and leases” and “Principal payments on retail notes and certificates” were combined within “Principal payments on borrowings.”

In all instances, the respective prior period amounts have been reclassified to conform to the current period 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, 2023 (Annual Report) filed on February 16, 2024.

Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Part II – Item 8. Financial Statements and Supplementary Data – Note 1. Summary of Significant Accounting Policies” in the Annual Report. There have been no changes to these significant accounting policies for the six months ended June 30, 2024.

12

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Adoption of New Accounting Standards

The Company did not adopt new accounting standards during the six months ended June 30, 2024.

New Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The new standard is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024. The amendments of this standard should be applied retrospectively, with early adoption permitted. The Company is evaluating the impact of this ASU but does not expect it to be material.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which improves income tax disclosure requirements, primarily through enhanced disclosures surrounding rate reconciliation and income taxes paid. The new standard is effective for annual periods beginning after December 15, 2024. The amendments of this standard should be applied prospectively, with retrospective application permitted. Early adoption is also permitted. The Company is evaluating the impact of this ASU but does not expect it to be material.

2. Marketplace Revenue

Marketplace revenue consists of (i) origination fees, (ii) servicing fees, (iii) gain 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 (HFS).

Servicing Fees: The Company receives servicing fees to compensate it for servicing loans on behalf of investors, including managing payments and collections from borrowers 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 serviced for investors. Servicing fee revenue related to loans sold also includes the associated change in the fair value of servicing assets.

Gain 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 loss on sale of loans.

Net Fair Value Adjustments: The Company records 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.

13

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 components of marketplace revenue for the periods presented:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Origination fees$77,131 $70,989 $147,210 $141,532 
Servicing fees19,869 22,015 39,461 48,395 
Gain on sales of loans10,748 13,221 21,657 27,346 
Net fair value adjustments(51,395)(23,442)(96,084)(38,856)
Total marketplace revenue$56,353 $82,783 $112,244 $178,417 

3. Earnings Per Share

The following table details the computation of the Company’s Basic and Diluted EPS:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Basic EPS:
Net income attributable to stockholders$14,903 $10,110 $27,153 $23,776 
Weighted-average common shares – Basic111,395,025 107,892,590 111,040,410 107,405,072 
Basic EPS$0.13 $0.09 $0.24 $0.22 
Diluted EPS:
Net income attributable to stockholders$14,903 $10,110 $27,153 $23,776 
Weighted-average common shares – Diluted111,466,497 107,895,072 111,076,938 107,409,129 
Diluted EPS$0.13 $0.09 $0.24 $0.22 

14

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

4. Securities Available for Sale

The amortized cost, gross unrealized gains and losses, and fair value of available for sale (AFS) securities were as follows:
June 30, 2024Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses
Allowance
for Credit Losses
Fair
Value
Senior asset-backed securities related to Structured Program transactions$2,300,892 $11,369 $(147)$— $2,312,114 
U.S. agency residential mortgage-backed securities258,894 42 (42,600)— 216,336 
Other asset-backed securities related to Structured Program transactions (1)
137,910 3 (285)(2,083)135,545 
U.S. agency securities93,455 — (14,388)— 79,067 
Mortgage-backed securities51,356 8 (6,093)— 45,271 
Other asset-backed securities24,126 30 (601)— 23,555 
Municipal securities3,247 — (752)— 2,495 
Total securities available for sale (2)
$2,869,880 $11,452 $(64,866)$(2,083)$2,814,383 
December 31, 2023Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
Senior asset-backed securities related to Structured Program transactions
$1,165,513 $10,932 $(42)$1,176,403 
U.S. agency residential mortgage-backed securities261,885 208 (37,497)224,596 
U.S. agency securities93,452 — (13,348)80,104 
Other asset-backed securities related to Structured Program transactions (1)
70,662 2,731 — 73,393 
Mortgage-backed securities42,511 — (5,435)37,076 
Other asset-backed securities26,710 25 (634)26,101 
Municipal securities3,257 — (668)2,589 
Total securities available for sale (2)
$1,663,990 $13,896 $(57,624)$1,620,262 
(1)    As of June 30, 2024 and December 31, 2023, $135.5 million and $70.1 million, respectively, of the other 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 June 30, 2024 and December 31, 2023, includes $356.6 million and $359.5 million, respectively, of securities pledged as collateral at fair value.

15

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

A summary of AFS securities with unrealized losses, aggregated by period of continuous unrealized loss, is as follows:
Less than
12 months		12 months
or longer		Total
June 30, 2024Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Senior asset-backed securities related to Structured Program transactions$134,085 $(147)$— $— $134,085 $(147)
U.S. agency residential mortgage-backed securities15,321 (182)194,767 (42,418)210,088 (42,600)
Other asset-backed securities related to Structured Program transactions32,936 (285)— — 32,936 (285)
U.S. agency securities2,994 (6)76,073 (14,382)79,067 (14,388)
Mortgage-backed securities9,704 (129)33,066 (5,964)42,770 (6,093)
Other asset-backed securities1,045 — 13,624 (601)14,669 (601)
Municipal securities— — 2,495 (752)2,495 (752)
Total securities with unrealized losses$196,085 $(749)$320,025 $(64,117)$516,110 $(64,866)
Less than
12 months		12 months
or longer		Total
December 31, 2023Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Senior asset-backed securities related to Structured Program transactions
$38,359 $(42)$— $— $38,359 $(42)
U.S. agency residential mortgage-backed securities6,497 (149)201,426 (37,348)207,923 (37,497)
U.S. agency securities— — 80,104 (13,348)80,104 (13,348)
Mortgage-backed securities13,973 (740)23,103 (4,695)37,076 (5,435)
Other asset-backed securities12,911 (50)8,538 (584)21,449 (634)
Municipal securities— — 2,589 (668)2,589 (668)
Total securities with unrealized losses$71,740 $(981)$315,760 $(56,643)$387,500 $(57,624)

At June 30, 2024, the majority of the Company’s AFS investment portfolio was comprised of senior asset-backed securities related to Structured Program transactions and U.S. agency-backed securities. Management considers U.S. agency-backed securities to be of the highest credit quality and rating given the guarantee of principal and interest by certain U.S. government agencies. Most of the remaining securities in an unrealized loss position in the Company’s AFS investment portfolio at June 30, 2024, were rated investment grade. Substantially all of these unrealized losses in the AFS investment portfolio were caused by interest rate increases. The Company does not intend to sell the investment portfolio, and it is not more likely than not that it will be required to sell any investment before recovery of its amortized cost basis. For a description of management’s quarterly evaluation of AFS securities in an unrealized loss position, see “Part II – Item 8. Financial Statements and Supplementary Data – Note 1. Summary of Significant Accounting Policies” in our Annual Report.

16

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, by security type:
Other asset-backed securities related to Structured Program transactions

Three Months Ended June 30, 2024Six Months Ended June 30, 2024
Allowance for credit losses at beginning of period
$2,892 $— 
Credit loss expense (benefit) for securities available for sale
(809)2,083 
Allowance for credit losses at end of period
$2,083 $2,083 

There was no activity in the allowance for credit losses for AFS securities during the second quarter and first half of 2023.

17

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 were as follows:
June 30, 2024Amortized CostFair Value
Weighted-
average
Yield (1)
Due within 1 year:
U.S. agency securities$3,000 $2,955 
Total due within 1 year3,000 2,955 3.50 %
Due after 1 year through 5 years:
Senior asset-backed securities related to Structured Program transactions$2,300,892 $2,312,114 
Other asset-backed securities related to Structured Program transactions137,910 135,545 
U.S. agency securities7,850 7,520 
Mortgage-backed securities1,649 1,496 
Other asset-backed securities380 381 
Municipal securities
154 135 
U.S. agency residential mortgage-backed securities2 2 
Total due after 1 year through 5 years2,448,837 2,457,193 7.82 %
Due after 5 years through 10 years:
U.S. agency securities21,998 19,854 
Other asset-backed securities13,821 13,811 
U.S. agency residential mortgage-backed securities4,313 4,055 
Mortgage-backed securities2,001 1,678 
Municipal securities465 393 
Total due after 5 years through 10 years42,598 39,791 4.17 %
Due after 10 years:
U.S. agency residential mortgage-backed securities254,579 212,279 
U.S. agency securities60,607 48,738 
Mortgage-backed securities47,706 42,097 
Other asset-backed securities9,925 9,363 
Municipal securities2,628 1,967 
Total due after 10 years375,445 314,444 2.81 %
Total securities available for sale$2,869,880 $2,814,383 6.92 %
(1)    The weighted-average yield is computed using the average month-end amortized cost during the six months ended June 30, 2024.

There were no sales of AFS securities during the second quarters and first halves of 2024 and 2023.

18

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

5. Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses

LendingClub records certain loans and leases held for investment (HFI) at amortized cost. Other HFI and all HFS loans are recorded at fair value with the Company’s election of the fair value option. 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. Net accrued interest receivable related to loans and leases HFI at amortized cost was $30.7 million and $32.2 million as of June 30, 2024 and December 31, 2023, respectively.

Loans and Leases Held for Investment at Amortized Cost

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:
June 30, 2024December 31, 2023
Unsecured personal$3,144,504 $3,726,830 
Residential mortgages178,290 183,050 
Secured consumer244,288 250,039 
Total consumer loans held for investment3,567,082 4,159,919 
Equipment finance (1)
83,770 110,992 
Commercial real estate381,873 380,322 
Commercial and industrial195,666 199,069 
Total commercial loans and leases held for investment661,309 690,383 
Total loans and leases held for investment4,228,391 4,850,302 
Allowance for loan and lease losses(228,909)(310,387)
Loans and leases held for investment, net (2)
$3,999,482 $4,539,915 
(1)    Comprised of sales-type leases for equipment. See “Note 17. Leases” for additional information.
(2)    As of June 30, 2024 and December 31, 2023, the Company had $3.3 billion and $4.0 billion in loans pledged as collateral. This was comprised of $2.8 billion and $3.5 billion in loans pledged as collateral under the Federal Reserve Bank (FRB) Discount Window and $475.9 million and $479.0 million in loans pledged to the Federal Home Loan Bank (FHLB) of Des Moines as of June 30, 2024 and December 31, 2023, respectively.

The following table presents the components of the allowance for loan and lease losses (ALLL):
June 30, 2024December 31, 2023
Gross allowance for loan and lease losses (1)
$285,368 $355,773 
Recovery asset value (2)
(56,459)(45,386)
Allowance for loan and lease losses$228,909 $310,387 
(1)    Represents the allowance for future estimated net charge-offs on existing portfolio balances.
(2)    Represents the negative allowance for expected recoveries of amounts previously charged-off.

June 30, 2024ConsumerCommercialTotal
Loans and leases held for investment
$3,567,082 $661,309 $4,228,391 
Allowance for loan and lease losses
$210,729 $18,180 $228,909 
Allowance ratio (1)
5.9 %2.7 %5.4 %
Gross allowance for loan and lease losses
$267,188 $18,180 $285,368 
Gross allowance ratio (1)
7.5 %2.7 %6.7 %
19

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, 2023ConsumerCommercialTotal
Loans and leases held for investment
$4,159,919 $690,383 $4,850,302 
Allowance for loan and lease losses
$298,061 $12,326 $310,387 
Allowance ratio (1)
7.2 %1.8 %6.4 %
Gross allowance for loan and lease losses
$343,447 $12,326 $355,773 
Gross allowance ratio (1)
8.3 %1.8 %7.3 %
(1)    Calculated as ALLL or gross ALLL, where applicable, to the corresponding portfolio segment balance of loans and leases held for investment at amortized cost.

20

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 credit losses by portfolio segment was as follows:
Three Months Ended June 30,
20242023
ConsumerCommercialTotalConsumerCommercialTotal
Allowance for loan and lease losses, beginning of period$246,280 $12,870 $259,150 $333,546 $15,311 $348,857 
Credit loss expense (benefit) for loans and leases held for investment
30,760 5,817 36,577 66,874 (684)66,190 
Charge-offs (1)
(77,494)(594)(78,088)(63,345)(924)(64,269)
Recoveries11,183 87 11,270 4,086 299 4,385 
Allowance for loan and lease losses, end of period$210,729 $18,180 $228,909 $341,161 $14,002 $355,163 
Reserve for unfunded lending commitments, beginning of period$— $1,662 $1,662 $67 $1,545 $1,612 
Credit loss expense (benefit) for unfunded lending commitments
— (207)(207)(67)472 405 
Reserve for unfunded lending commitments, end of period (2)
$— $1,455 $1,455 $— $2,017 $2,017 

Six Months Ended June 30,
20242023
ConsumerCommercialTotalConsumerCommercialTotal
Allowance for loan and lease losses, beginning of period$298,061 $12,326 $310,387 $312,489 $15,363 $327,852 
Credit loss expense (benefit) for loans and leases held for investment
58,446 7,377 65,823 137,558 (518)137,040 
Charge-offs (1)
(166,604)(1,826)(168,430)(115,557)(1,275)(116,832)
Recoveries20,826 303 21,129 6,671 432 7,103 
Allowance for loan and lease losses, end of period$210,729 $18,180 $228,909 $341,161 $14,002 $355,163 
Reserve for unfunded lending commitments, beginning of period$— $1,873 $1,873 $18 $1,860 $1,878 
Credit loss expense (benefit) for unfunded lending commitments
— (418)(418)(18)157 139 
Reserve for unfunded lending commitments, end of period (2)
$— $1,455 $1,455 $— $2,017 $2,017 
(1)    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.
(2)    Relates to $91.5 million and $108.9 million of unfunded commitments as of June 30, 2024 and 2023, respectively. As of June 30, 2024, $8.3 million of the $91.5 million of unfunded commitments is unconditionally cancellable and therefore has no associated reserve.

21

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 charge-offs by origination year for the first half of 2024:
Gross Charge-Offs by Origination Year
20242023202220212020PriorTotal
Unsecured personal$284 $48,127 $86,555 $30,540 $— $— $165,506 
Residential mortgages— — — — — — — 
Secured consumer— 263 529 306 — — 1,098 
Total consumer loans held for investment284 48,390 87,084 30,846 — — 166,604 
Equipment finance— — — — — — — 
Commercial real estate— — — — — — — 
Commercial and industrial— 421 99 403 — 903 1,826 
Total commercial loans and leases held for investment— 421 99 403 — 903 1,826 
Total loans and leases held for investment$284 $48,811 $87,183 $31,249 $— $903 $168,430 

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 tables present the classes of financing receivables within the consumer portfolio segment by credit quality indicator based on delinquency status and origination year:
June 30, 2024 Term Loans and Leases by Origination Year
20242023202220212020PriorTotal
Unsecured personal
Current $497,390 $1,138,471 $1,185,700 $252,988 $— $— $3,074,549 
30-59 days past due 1,156 8,634 11,549 3,498 — — 24,837 
60-89 days past due 506 7,481 11,675 3,207 — — 22,869 
90 or more days past due 322 8,609 11,080 3,814 — — 23,825 
Total unsecured personal (1)
499,374 1,163,195 1,220,004 263,507 — — 3,146,080 
Residential mortgages
Current — — 47,442 53,460 29,369 47,872 178,143 
30-59 days past due — — — — — — — 
60-89 days past due — — — — — 147 147 
90 or more days past due — — — — — — — 
Total residential mortgages — — 47,442 53,460 29,369 48,019 178,290 
Secured consumer
Current45,213 102,201 75,981 15,771 — 2,417 241,583 
30-59 days past due— 439 1,107 279 — — 1,825 
60-89 days past due— 142 395 85 — — 622 
90 or more days past due— 75 129 54 — — 258 
Total secured consumer45,213 102,857 77,612 16,189 — 2,417 244,288 
Total consumer loans held for investment$544,587 $1,266,052 $1,345,058 $333,156 $29,369 $50,436 $3,568,658 
(1)    Excludes cumulative basis adjustment for loans designated in fair value hedges under the portfolio layer method. As of June 30, 2024, the basis adjustment totaled $1.6 million and represents a decrease to the amortized cost of the hedged loans. See “Note 8. Derivative Instruments and Hedging Activities” for additional information.
22

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, 2023 Term Loans and Leases by Origination Year
2023
2022202120202019PriorTotal
Unsecured personal
Current $1,498,737 $1,688,512 $438,296 $— $— $— $3,625,545 
30-59 days past due 9,034 17,017 6,665 — — — 32,716 
60-89 days past due 7,767 15,538 6,251 — — — 29,556 
90 or more days past due 6,924 16,564 6,644 — — — 30,132 
Total unsecured personal (1)
1,522,462 1,737,631 457,856 — — — 3,717,949 
Residential mortgages
Current 53 48,473 54,855 29,960 18,917 29,041 181,299 
30-59 days past due — — — — 1,331 420 1,751 
60-89 days past due — — — — — — — 
90 or more days past due — — — — — — — 
Total residential mortgages 53 48,473 54,855 29,960 20,248 29,461 183,050 
Secured consumer
Current125,618 97,084 21,949 — 2,460 — 247,111 
30-59 days past due364 1,295 417 — — — 2,076 
60-89 days past due94 373 168 — — — 635 
90 or more days past due— 153 64 — — — 217 
Total secured consumer126,076 98,905 22,598 — 2,460 — 250,039 
Total consumer loans held for investment$1,648,591 $1,885,009 $535,309 $29,960 $22,708 $29,461 $4,151,038 
(1)    Excludes cumulative basis adjustment for loans designated in fair value hedges under the portfolio layer method. As of December 31, 2023, the basis adjustment totaled $8.9 million and represents an increase to the amortized cost of the hedged loans. See “Note 8. Derivative Instruments and Hedging Activities” for additional information.

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 obligors 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 deserve 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 obligor 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.
23

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)


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 tables present the classes of financing receivables within the commercial portfolio segment by risk rating and origination year:
June 30, 2024 Term Loans and Leases by Origination Year
20242023202220212020PriorTotal
Guaranteed Amount (1)
Equipment finance
Pass $— $2,238 $37,916 $16,691 $11,158 $12,621 $80,624 $— 
Special mention— — 413 783 — — 1,196 — 
Substandard — — 1,339 611 — — 1,950 — 
Doubtful — — — — — — — — 
Loss— — — — — — — — 
Total equipment finance— 2,238 39,668 18,085 11,158 12,621 83,770 — 
Commercial real estate
Pass 13,288 56,543 90,377 24,878 31,182 121,961 338,229 30,413 
Special mention— — 1,996 — 562 5,009 7,567 2,122 
Substandard — — 444 8,490 9,190 13,247 31,371 7,247 
Doubtful — — — — — — — — 
Loss— — 2,703 1,515 — 488 4,706 3,980 
Total commercial real estate13,288 56,543 95,520 34,883 40,934 140,705 381,873 43,762 
Commercial and industrial
Pass 13,752 39,318 47,418 33,457 7,900 19,283 161,128 100,789 
Special mention— 3,407 1,295 — — 135 4,837 3,632 
Substandard — — 12,789 2,392 709 1,918 17,808 9,811 
Doubtful — — 3,279 1,559 504 285 5,627 4,703 
Loss— — 1,442 3,575 — 1,249 6,266 6,279 
Total commercial and industrial13,752 42,725 66,223 40,983 9,113 22,870 195,666 125,214 
Total commercial loans and leases held for investment$27,040 $101,506 $201,411 $93,951 $61,205 $176,196 $661,309 $168,976 
(1)    Represents loan balances guaranteed by the Small Business Association (SBA).

24

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, 2023 Term Loans and Leases by Origination Year
2023
2022202120202019PriorTotal
Guaranteed Amount (1)
Equipment finance
Pass $2,945 $33,430 $26,311 $7,754 $9,411 $6,288 $86,139 $— 
Special mention— 15,235 1,962 5,873 1,335 — 24,405 — 
Substandard — — — 448 — — 448 — 
Doubtful — — — — — — — — 
Loss— — — — — — — — 
Total equipment finance2,945 48,665 28,273 14,075 10,746 6,288 110,992 — 
Commercial real estate
Pass 49,067 94,247 34,535 43,058 52,160 78,062 351,129 33,423 
Special mention— — — — — 13,706 13,706 — 
Substandard — 3,598 7,716 — — 2,139 13,453 9,425 
Doubtful — — — — — — — — 
Loss— — 1,515 — — 519 2,034 1,471 
Total commercial real estate49,067 97,845 43,766 43,058 52,160 94,426 380,322 44,319 
Commercial and industrial
Pass 40,636 60,352 39,304 9,525 10,282 11,626 171,725 104,928 
Special mention— 10,881 1,532 729 137 444 13,723 9,384 
Substandard — 2,304 5,426 673 1,045 1,434 10,882 6,908 
Doubtful — 649 — 548 — 286 1,483 1,214 
Loss— — — — — 1,256 1,256 1,229 
Total commercial and industrial40,636 74,186 46,262 11,475 11,464 15,046 199,069 123,663 
Total commercial loans and leases held for investment$92,648 $220,696 $118,301 $68,608 $74,370 $115,760 $690,383 $167,982 
(1)    Represents loan balances guaranteed by the SBA.

The following tables present an analysis of the past due loans and leases HFI at amortized cost within the commercial portfolio segment:
June 30, 202430-59
Days		60-89
Days		90 or More
Days
Total Days Past Due
Guaranteed Amount (1)
Equipment finance$18 $— $8 $26 $— 
Commercial real estate7,422 384 8,569 16,375 10,894 
Commercial and industrial
8,715 774 5,869 15,358 12,736 
Total commercial loans and leases held for investment$16,155 $1,158 $14,446 $31,759 $23,630 
December 31, 202330-59
Days		60-89
Days		90 or More
Days
Total Days Past Due
Guaranteed Amount (1)
Equipment finance$1,265 $— $— $1,265 $— 
Commercial real estate— 3,566 1,618 5,184 4,047 
Commercial and industrial
12,261 1,632 1,515 15,408 11,260 
Total commercial loans and leases held for investment$13,526 $5,198 $3,133 $21,857 $15,307 
(1)    Represents loan balances guaranteed by the SBA.

25

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Loan Modifications

The Company has loan modification programs to assist borrowers experiencing financial difficulty and to mitigate losses and maximize collections for loans serviced by the Company. The table below presents the amortized cost of loans that were modified during the periods presented, by modification type:
Three Months Ended June 30,
Six Months Ended June 30,
2024202320242023
Short-term payment reduction
$10,926 $206 $22,445 $367 
Permanent loan modification
1,778 897 3,092 1,287 
Debt settlement
6,153 6,504 6,264 6,616 
Total loan modifications – unsecured personal loans
$18,857 $7,607 $31,801 $8,270 
% of unsecured personal loans at amortized cost as of period end
0.6 %0.2 %1.0 %0.2 %

During the third quarter of 2023, the Company expanded its digital channels to enable borrowers experiencing financial difficulty to qualify for a short-term payment reduction modification program. Under this program, borrowers may receive a temporary payment reduction for three months. If the borrower meets the temporary payment reduction requirements during the first three-month term, they may qualify for a payment reduction for an additional three months. Receiving an additional three months of payment reduction is considered an other-than-insignificant payment delay and becomes a short-term payment reduction modification. The short-term payment reduction modification results in a term extension of five to eight months compared to the original maturity date of the loan and does not include any principal or interest forgiveness. At the time of receiving a payment reduction, a delinquent loan resets to current status. However, if a borrower fails to comply with the modified terms, the delinquency status returns to the original contractual terms of the loan. Borrowers who were in their first three months of temporary payment reduction had a total of $17.6 million of loan balances at amortized cost outstanding as of June 30, 2024, and may subsequently be eligible for a short-term payment reduction modification.

Permanent loan modifications include both a reduction in contractual interest rates and an extension to the contractual maturity date of up to twelve months and do not include any principal forgiveness. To qualify for this modification, borrowers must meet the Company’s debt-to-income ratio requirements. During the second quarter and first half of 2024, the weighted-average interest rate reduction under this program was approximately 7.5% and 7.9%, respectively. During the second quarter and first half of 2023, the weighted-average interest rate reduction under this program was approximately 8.1% and 8.7%, respectively. The weighted-average maturity date extension was approximately twelve months for all periods.

Debt settlement modifications, which include engaging with third-party debt settlement companies, reduce the principal and interest amounts owed by borrowers. The Company typically charges-off such loans within a few months following the modification, as payments under the modified agreement are less than the original contractual amounts.

26

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 delinquency status of the amortized cost of loan modifications as of the periods presented below that were modified during the preceding twelve months:
June 30, 2024
June 30, 2023(1)
Short-term Payment ReductionPermanent Loan ModificationDebt SettlementShort-term Payment ReductionPermanent Loan ModificationDebt Settlement
Unsecured personal loans
Current$21,215 $4,317 $161 $354 $1,221 $10 
30-59 days1,850 177 23 9 36 11 
60-89 days1,526 281 616 4 30 1,829 
90 or more days896 148 5,622 — — 4,766 
Total loan modifications$25,487 $4,923 $6,422 $367 $1,287 $6,616 
(1)     Reflects the delinquency status of the amortized cost of loan modifications that were modified during the preceding six months, as the associated ASU 2022-02 was adopted prospectively on January 1, 2023.

In the event of a borrower defaulting at 120 days past due, the modified loan is charged-off at the time of default. The table below presents the total amount of charge-offs during the period for loan modifications that were entered into within the preceding twelve months of charge-off:
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023(1)
2024
2023(1)
Short-term payment reduction
$1,367 $14 $1,560 $14 
Permanent loan modification
489 51 928 78 
Debt settlement
20,197 12,756 41,972 18,463 
Total loan modifications – unsecured personal loans
$22,053 $12,821 $44,460 $18,555 
(1)     Reflects total amount of charge-offs during the period for loan modifications that were entered into within the preceding six months of charge-off, as the associated ASU 2022-02 was adopted prospectively on January 1, 2023.

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, and are charged-off no later than 120 days past due.

Certain loans on nonaccrual status 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.
27

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 nonaccrual loans and leases:
June 30, 2024December 31, 2023
Nonaccrual
Nonaccrual with no related ACL (1)
Nonaccrual
Nonaccrual with no related ACL (1)
Unsecured personal$23,825 $— $30,132 $— 
Residential mortgages305 305 312 312 
Secured consumer257 — 217 — 
Total nonaccrual consumer loans held for investment24,387 305 30,661 312 
Equipment finance— — — — 
Commercial real estate20,443 6,304 9,663 2,187 
Commercial and industrial20,316 7,512 4,058 1,590 
Total nonaccrual commercial loans and leases held for investment (2)
40,759 13,816 13,721 3,777 
Total nonaccrual loans and leases held for investment$65,146 $14,121 $44,382 $4,089 
(1)     Subset of total nonaccrual loans and leases.
(2)     Includes $24.5 million and $10.4 million in loan balances guaranteed by the SBA as of June 30, 2024 and December 31, 2023, respectively.

June 30, 2024December 31, 2023
Nonaccrual
Nonaccrual Ratios (1)
Nonaccrual
Nonaccrual Ratios (1)
Total nonaccrual consumer loans held for investment$24,387 0.7 %$30,661 0.7 %
Total nonaccrual commercial loans and leases held for investment40,759 6.2 %13,721 2.0 %
Total nonaccrual loans and leases held for investment$65,146 1.5 %$44,382 0.9 %
(1)     Calculated as the ratio of nonaccruing loans and leases to loans and leases HFI at amortized cost.




28

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

6. Securitizations and Variable Interest Entities

VIE Assets and Liabilities

The following table presents the classifications of assets and liabilities on the Company’s Balance Sheet for its transactions with consolidated and unconsolidated VIEs. The Company’s transactions with VIEs include Structured Program transactions. The Company has also various forms of involvement with VIEs, including servicing loans and holding senior asset-backed securities or subordinated interests in the VIEs. Additionally, the carrying amount of assets and liabilities in the table below exclude intercompany balances that were eliminated in consolidation.
June 30, 2024December 31, 2023
Consolidated Unconsolidated TotalConsolidatedUnconsolidatedTotal
Assets
Restricted cash$2,818 $— $2,818 $3,454 $— $3,454 
Securities available for sale at fair value— 2,447,660 2,447,660 — 1,249,796 1,249,796 
Loans held for investment at fair value (1)
155 — 155 970 — 970 
Other assets7 48,048 48,055 14 31,531 31,545 
Total assets$2,980 $2,495,708 $2,498,688 $4,438 $1,281,327 $1,285,765 
Liabilities
Borrowings (1)
1,511 — 1,511 2,888 — 2,888 
Other liabilities— 5,407 5,407 4 3,301 3,305 
Total liabilities$1,511 $5,407 $6,918 $2,892 $3,301 $6,193 
Total net assets (maximum loss exposure)$1,469 $2,490,301 $2,491,770 $1,546 $1,278,026 $1,279,572 
(1)    Prior period amounts have been reclassified to conform to the current period presentation.

Maximum loss exposure 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.

29

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Unconsolidated VIEs

The following table summarizes activity related to unconsolidated VIEs where the transfers were accounted for as a sale on the Company’s financial statements:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Fair value of consideration received:
Cash$97,246 $18,051 $190,890 $18,051 
Securities retained from Structured Program transactions
759,149 153,229 1,498,125 153,229 
Other assets, net
9,906 2,299 19,639 2,299 
Total consideration866,301 173,579 1,708,654 173,579 
Fair value of loans sold(857,434)(171,559)(1,691,210)(171,559)
Gain on sales of loans (1)
$8,867 $2,020 $17,444 $2,020 
Cash proceeds from continuing involvement:
Servicing and other administrative fees$5,982 $862 $10,705 $1,876 
Interest received on securities retained from Structured Program transactions
$37,390 $2,406 $67,053 $3,594 
(1)    Consists primarily of servicing assets recognized at the time of sale, less any transaction costs, and excludes origination fees and fair value adjustments recognized prior to the sale.

Beginning in the second quarter of 2023, the Company resumed its Structured Program transactions with its newly launched Structured Certificates, where it retains the senior securities at a fixed rate, in addition to the amount required pursuant to the U.S. Risk Retention Rules, and sells the residual certificates. See “Note 4. Securities Available for Sale” for the securities retained in the Company’s investment portfolio related to such transactions.

There is no direct recourse to the Company’s assets, and holders of the securities can look only to those assets of the VIEs that issued their securities for payment. The residual certificates are subject principally to the credit and prepayment risk stemming from the underlying unsecured personal loans.

As of June 30, 2024, the aggregate unpaid principal balance held by unconsolidated VIEs was $2.8 billion, of which $22.1 million was attributable to off-balance sheet loans that were 30 days or more past due. As of December 31, 2023, the aggregate unpaid principal balance held by unconsolidated VIEs was $1.6 billion, of which $9.5 million was attributable to off-balance sheet loans that were 30 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.

7. Fair Value Measurements

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 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.

30

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Recurring Fair Value Measurements

The following tables present, by level within the fair value hierarchy, the Company’s assets and liabilities measured at fair value on a recurring basis:
June 30, 2024
Level 1
Level 2
Level 3
Balance at
Fair Value
Assets:
Loans held for sale at fair value$— $— $791,059 $791,059 
Loans held for investment at fair value
— — 339,222 339,222 
Securities available for sale:
Senior asset-backed securities related to Structured Program transactions— — 2,312,114 2,312,114 
U.S. agency residential mortgage-backed securities— 216,336 — 216,336 
Other asset-backed securities related to Structured Program transactions— — 135,545 135,545 
U.S. agency securities— 79,067 — 79,067 
Mortgage-backed securities— 45,271 — 45,271 
Other asset-backed securities— 23,555 — 23,555 
Municipal securities— 2,495 — 2,495 
Total securities available for sale— 366,724 2,447,659 2,814,383 
Servicing assets— — 69,709 69,709 
Other assets— 5,841 — 5,841 
Total assets$— $372,565 $3,647,649 $4,020,214 
Liabilities:
Borrowings
— — 5,474 5,474 
Other liabilities— 4,070 10,700 14,770 
Total liabilities$— $4,070 $16,174 $20,244 

31

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, 2023
Level 1
Level 2
Level 3
Balance at
Fair Value
Assets:
Loans held for sale at fair value$— $— $407,773 $407,773 
Loans held for investment at fair value (1)
— — 272,678 272,678 
Securities available for sale:
Senior asset-backed securities related to Structured Program transactions— — 1,176,403 1,176,403 
U.S. agency residential mortgage-backed securities— 224,596 — 224,596 
U.S. agency securities— 80,104 — 80,104 
Other asset-backed securities related to Structured Program transactions
— — 73,393 73,393 
Mortgage-backed securities
— 37,076 — 37,076 
Other asset-backed securities— 26,101 — 26,101 
Municipal securities— 2,589 — 2,589 
Total securities available for sale— 370,466 1,249,796 1,620,262 
Servicing assets— — 77,680 77,680 
Other assets— 3,525 — 3,525 
Total assets$— $373,991 $2,007,927 $2,381,918 
Liabilities:
Borrowings (1)
— — 12,956 12,956
Other liabilities— 12,072 7,655 19,727
Total liabilities$— $12,072 $20,611 $32,683 
(1)    Prior period amounts have been reclassified to conform to the current period presentation.

Financial instruments are categorized in the valuation hierarchy based on the significance of observable or unobservable factors in the overall fair value measurement. 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. The Company did not transfer any assets or liabilities in or out of Level 3 during the second quarters and first halves of 2024 or 2023.

The following significant unobservable inputs were used in the fair value measurement of the Company’s Level 3 assets:
•Discount rate – The weighted-average rate at which the expected cash flows are discounted to arrive at the net present value of the loan. The discount rate is primarily determined based on marketplace investor return expectations.
•Annualized net charge-off rate – The annualized rate of average charge-offs, net of recoveries, expressed as a percentage of the average principal balance of loan pools with similar risk characteristics. The calculation of this annualized rate also incorporates a qualitative estimate of credit losses based on the Company’s current macroeconomic outlook.
32

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

•Annualized prepayment rate – The annualized rate of prepayments expressed as a percentage of the average principal balance of loan pools with similar risk characteristics.

An increase in each of the inputs above, in isolation, would result in a decrease in the fair value measurement.

The sensitivity calculations are hypothetical and should not be considered to be predictive of future performance. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Changes in one factor may lead to changes in other factors, which could impact the hypothetical results.

Loans Held for Sale at Fair Value

Significant Unobservable Inputs

The following significant unobservable inputs were used in the fair value measurement of loans HFS:
June 30, 2024December 31, 2023
Minimum
Maximum
Weighted-
Average
Minimum
Maximum
Weighted-
Average
Discount rate
7.7 %12.3 %8.9 %8.1 %10.3 %9.0 %
Annualized net charge-off rate (1)
2.1 %21.6 %6.2 %2.7 %12.9 %6.5 %
Annualized prepayment rate (1)
15.0 %21.4 %18.7 %15.7 %22.5 %19.9 %
(1)    The weighted-average rate is calculated using the original principal balance of each loan pool.

Fair Value Sensitivity

The sensitivity of loans HFS at fair value to adverse changes in key assumptions was as follows:
June 30, 2024December 31, 2023
Loans held for sale at fair value
$791,059 $407,773 
Expected remaining weighted-average life (in years)
1.51.5
Discount rate:
100 basis point increase$(10,237)$(5,093)
200 basis point increase$(19,908)$(10,051)
Annualized net charge-off rate:
10% increase$(9,363)$(5,102)
20% increase$(18,694)$(10,184)
Annualized prepayment rate:
10% increase$(1,596)$(851)
20% increase$(3,111)$(1,628)

33

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 loans HFS at fair value activity:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Fair value at beginning of period$550,415 $44,647 $407,773 $110,400 
Originations and purchases1,397,930 1,272,118 2,680,180 2,477,147 
Sales(1,042,166)(1,238,252)(2,101,814)(2,485,498)
Principal payments(63,605)(5,135)(97,877)(11,600)
Transfers— 191,807 — 191,807 
Realized charge-offs, net of recoveries, recorded in earnings
(4,205)(2,107)(8,436)(7,720)
Fair value adjustments recorded in earnings(47,310)(12,717)(88,767)(24,175)
Fair value at end of period$791,059 $250,361 $791,059 $250,361 

The following table summarizes the aggregate fair value of the Company’s HFS loans, as well as the amount that was 90 days or more past due:
June 30, 2024December 31, 2023
Total90 or more
days past due		Total90 or more
days past due
Aggregate unpaid principal balance$829,090 $1,521 $431,955 $1,395 
Cumulative fair value adjustments(38,031)(1,224)(24,182)(1,102)
Fair value of loans held for sale
$791,059 $297 $407,773 $293 

Loans Held for Investment at Fair Value

The 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. As such, the tables presented below exclude retail and certificate loans held for investment at fair value, which were $4.6 million and $10.5 million at June 30, 2024 and December 31, 2023, respectively.

Significant Unobservable Inputs

The following significant unobservable inputs were used in the fair value measurement of loans HFI:
June 30, 2024December 31, 2023
Minimum
Maximum
Weighted-
Average
Minimum
Maximum
Weighted-
Average
Discount rate
6.3 %22.8 %12.4 %8.4 %16.2 %12.8 %
Annualized net charge-off rate (1)
2.1 %20.8 %7.0 %1.9 %5.9 %3.7 %
Annualized prepayment rate (1)
16.1 %24.9 %20.4 %18.6 %27.7 %22.6 %
(1)    The weighted-average rate is calculated using the original principal balance of each the loan pool.

34

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 Sensitivity

The sensitivity of loans HFI at fair value to adverse changes in key assumptions was as follows:
June 30, 2024December 31, 2023
Loans held for investment at fair value$334,642 $262,190 
Expected remaining weighted-average life (in years)
0.90.9
Discount rate:
100 basis point increase$(2,548)$(1,957)
200 basis point increase$(5,062)$(3,888)
Annualized net charge-off rate:
10% increase$(2,840)$(1,753)
20% increase$(6,063)$(3,595)
Annualized prepayment rate:
10% increase$(1,057)$(857)
20% increase$(2,131)$(1,675)

Fair Value Reconciliation

The following table presents loans HFI at fair value activity:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Fair value at beginning of period$420,393 $748,618 $262,190 $925,938 
Purchases12,220 — 232,784 4,037 
Principal payments(96,004)(156,287)(159,930)(342,738)
Transfers— (191,634)— (191,634)
Interest income accretion and fair value adjustments recorded in earnings(1,967)3,422 (402)8,516 
Fair value at end of period$334,642 $404,119 $334,642 $404,119 

The following table summarizes the aggregate fair value of the Company’s HFI loans held at fair value, as well as the amount that was 90 days or more past due:
June 30, 2024December 31, 2023
Total90 or more
days past due		Total90 or more
days past due
Aggregate unpaid principal balance$362,823 $5,843 $281,031 $3,774 
Cumulative fair value adjustments(28,181)(4,701)(18,841)(3,037)
Fair value of loans held for investment$334,642 $1,142 $262,190 $737 

35

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Asset-Backed Securities Related to Structured Program Transactions

Senior Asset-Backed Securities Related to Structured Program Transactions

Significant Unobservable Inputs

The following significant unobservable input, which includes credit spreads, was used in the fair value measurement of senior asset-backed securities related to Structured Program transactions:
June 30, 2024December 31, 2023
MinimumMaximumWeighted-
Average		MinimumMaximumWeighted-
Average
Discount rate
6.9 %7.1 %7.0 %7.0 %7.0 %7.0 %

Fair Value Sensitivity

The sensitivity in the fair value of senior asset-backed securities related to Structured Program transactions to adverse changes in key assumptions was as follows:
June 30, 2024December 31, 2023
Fair value of interests held$2,312,114 $1,176,403 
Expected remaining weighted-average life (in years)
1.41.5
Discount rate:
100 basis point increase$(31,714)$(18,016)
200 basis point increase$(63,429)$(36,033)

Fair Value Reconciliation

The following table presents senior asset-backed securities related to Structured Program transactions activity:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Fair value at beginning of period$1,765,259 $— $1,176,403 $— 
Additions716,299 144,680 1,413,646 144,680 
Cash received(171,793)(1,290)(278,267)(1,290)
Change in unrealized gain (loss)
2,349 (605)332 (605)
Fair value at end of period$2,312,114 $142,785 $2,312,114 $142,785 

36

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Other Asset-Backed Securities Related to Structured Program Transactions

Significant Unobservable Inputs

The following significant unobservable inputs were used in the fair value measurement of other asset-backed securities related to Structured Program transactions:
June 30, 2024December 31, 2023
MinimumMaximumWeighted-
Average		MinimumMaximumWeighted-
Average
Discount rate
6.9 %11.4 %8.7 %8.1 %10.3 %9.0 %
Annualized net charge-off rate (1)
4.4 %6.0 %5.3 %4.9 %5.9 %5.5 %
Annualized prepayment rate (1)
17.4 %19.7 %18.8 %19.2 %21.0 %20.1 %
(1)    The weighted-average rate is calculated using the original principal balance of each security.

Fair Value Sensitivity

The sensitivity in the fair value of other asset-backed securities related to Structured Program transactions to adverse changes in key assumptions was as follows:
June 30, 2024December 31, 2023
Fair value of interests held$135,545 $73,393 
Expected remaining weighted-average life (in years)
1.41.5
Discount rate:
100 basis point increase$(1,685)$(927)
200 basis point increase$(3,302)$(1,836)
Annualized net charge-off rate:
10% increase$(1,405)$(882)
20% increase$(2,817)$(1,771)
Annualized prepayment rate:
10% increase$(241)$(203)
20% increase$(476)$(430)

Fair Value Reconciliation

The following table presents other asset-backed securities related to Structured Program transactions activity:
Three Months Ended
June 30,		Six Months Ended June 30,
2024202320242023
Fair value at beginning of period$103,866 $10,397 $73,393 $12,469 
Additions43,887 8,667 86,625 8,780 
Cash received(12,735)(2,084)(22,066)(4,269)
Credit loss (expense) benefit for securities available for sale
809 — (2,083)— 
Change in unrealized gain (loss)
(282)— (324)— 
Fair value at end of period$135,545 $16,980 $135,545 $16,980 

37

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Servicing Assets

Significant Unobservable Inputs

The following significant unobservable inputs were used in the fair value measurement for servicing assets related to loans sold to investors:
June 30, 2024December 31, 2023
MinimumMaximumWeighted-
Average		MinimumMaximumWeighted-
Average
Discount rate
8.7 %17.3 %10.9 %8.7 %17.3 %11.3 %
Annualized net charge-off rate (1)
1.9 %23.5 %8.1 %1.9 %24.0 %8.7 %
Annualized prepayment rate (1)
15.2 %24.8 %19.2 %15.6 %25.7 %20.3 %
Market servicing rate (2)
0.62 %0.62 %0.62 %0.62 %0.62 %0.62 %
(1)    The weighted-average rate is calculated using the original principal balance of each loan pool.
(2)    The fees a willing market participant would require for the servicing of loans with similar characteristics as those in the Company’s serviced portfolio.

Fair Value Sensitivity

The sensitivity of the fair value of servicing assets to adverse changes in key assumptions was as follows:
June 30, 2024December 31, 2023
Fair value of servicing assets$69,709 $77,680 
Expected remaining weighted-average life (in years)
1.21.2
Discount rate:
100 basis point increase$(618)$(675)
200 basis point increase$(1,236)$(1,349)
Annualized net charge-off rate:
10% increase$(679)$(878)
20% increase$(1,357)$(1,756)
Annualized prepayment rate:
10% increase$(1,386)$(1,550)
20% increase$(2,772)$(3,100)

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:
June 30, 2024December 31, 2023
Weighted-average market servicing rate assumptions
0.62 %0.62 %
Change in fair value from:
Servicing rate increase by 0.10%
$(7,956)$(8,719)
Servicing rate decrease by 0.10%
$7,956 $8,719 
38

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 servicing assets activity:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Fair value at beginning of period$71,830 $89,241 $77,680 $84,308 
Issuances (1)
13,759 13,576 27,337 27,701 
Change in fair value, included in Marketplace revenue(15,868)(17,074)(35,296)(29,650)
Other net changes(12)(356)(12)3,028 
Fair value at end of period$69,709 $85,387 $69,709 $85,387 
(1)    Represents the servicing assets recorded when the loans are sold. Included in “Gains on sales of loans” within “Marketplace revenue” on the Income Statement.

Financial Instruments Not Recorded at Fair Value

The following tables present the carrying amount and estimated fair values, by level within the fair value hierarchy, of the Company’s assets, and liabilities that are not recorded at fair value on a recurring basis:
June 30, 2024Carrying Amount
Level 1
Level 2
Level 3
Balance at
Fair Value
Assets:
Loans and leases held for investment, net$3,999,482 $— $— $4,124,236 $4,124,236 
Other assets39,329 — 38,886 823 39,709 
Total assets$4,038,811 $— $38,886 $4,125,059 $4,163,945 
Liabilities:
Deposits (1)
$1,792,943 $— $— $1,791,688 $1,791,688 
Other liabilities48,123 — 27,609 20,514 48,123 
Total liabilities$1,841,066 $— $27,609 $1,812,202 $1,839,811 
December 31, 2023Carrying Amount
Level 1
Level 2
Level 3
Balance at
Fair Value
Assets:
Loans and leases held for investment, net$4,539,915 $— $— $4,675,354 $4,675,354 
Other assets37,605 — 36,884 1,017 37,901 
Total assets$4,577,520 $— $36,884 $4,676,371 $4,713,255 
Liabilities:
Deposits (1)
$1,714,889 $— $— $1,714,203 $1,714,203 
Borrowings6,398 — — 6,398 6,398 
Other liabilities59,015 — 36,823 22,192 59,015 
Total liabilities$1,780,302 $— $36,823 $1,742,793 $1,779,616 
(1)    Excludes deposit liabilities with no defined or contractual maturities.

39

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

8. Derivative Instruments and Hedging Activities

The Company enters into derivative instruments, including interest rate swaps and interest rate caps, to manage exposure to interest rate risk associated with its fixed-rate assets. In addition, the Company provides credit support agreements to a limited number of strategic investors which are accounted for as credit derivative liabilities.

Derivatives Not Designated as Accounting Hedges

The table below presents the notional and gross fair value amounts of the Company’s derivatives that are not designated as accounting hedges:
June 30, 2024December 31, 2023
Notional
Derivative Liability (1)
Derivative Asset (1)
Notional
Derivative Liability (1)
Credit derivatives (2)
$10,763 $(9,814)$— $7,307 $(6,372)
Interest rate caps200,000 — 403 — — 
Total
$210,763 $(9,814)$403 $7,307 $(6,372)
(1)    Recorded in “Other liabilities” or “Other assets,” as applicable, on the Balance Sheet and in “Operating activities” on the Statement of Cash Flow.
(2)    Represent credit support agreements related to loan sales, whereby the Company is obligated to make payments to a limited number of strategic investors approximately 18 months after sale if credit losses exceed certain initial agreed-upon thresholds, subject to a maximum dollar amount. The notional amount represents the Company’s maximum dollar exposure. The fair value of the credit derivatives is based on the combined impact of both the quantitative and qualitative credit loss forecast.

The table below presents the losses recognized on the Company’s derivatives that are not designated as accounting hedges:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Credit derivatives (1)
$(2,008)$(945)$(3,442)$(945)
Interest rate caps (2)
(63)— (63)— 
Total losses
$(2,071)$(945)$(3,505)$(945)
(1)    The initial fair value of the credit derivative liabilities is recorded in “Gain on sales of loans” with changes in the fair value recorded in “Net fair value adjustments,” both within “Marketplace revenue” on the Income Statement.
(2)    Changes in the fair value of the interest rate cap are recorded in “Net fair value adjustments” within “Marketplace revenue” on the Income Statement.

Derivatives Designated as Accounting Hedges

The Company is exposed to changes in the fair value of its fixed-rate loans due to changes in benchmark interest rates. Beginning in the third quarter of 2023, the Company entered into interest rate swaps to manage its exposure to changes in fair value of these loans attributable to changes in the Secured Overnight Financing Rate (SOFR). The interest rate swaps qualify as fair value hedges and involve the payment of fixed-rate amounts to a counterparty in exchange for the receipt of variable-rate payments over the life of the agreements, ranging from approximately one to three years.

40

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

The table below presents the notional and gross fair value amounts of the Company’s fair value hedges:
June 30, 2024December 31, 2023
Notional
Derivative Asset (1)
Notional
Derivative Liability (1)
Interest rate swaps$1,300,000 $1,368 $1,500,000 $(8,547)
(1)    Recorded in “Other assets” or “Other liabilities,” as applicable, on the Balance Sheet and in “Operating activities” on the Statement of Cash Flow.

The following table summarizes the gains recognized on the Company’s fair value hedges:
Three Months Ended June 30, 2024Six Months Ended June 30, 2024
Hedged item$(1,785)$(10,457)
Derivatives used for hedging1,563 9,915 
Interest settlement on derivative (1)
1,396 2,769 
Total gains on fair value hedges (2)
$1,174 $2,227 
(1)    Includes accrued interest receivable and accrued interest payable.
(2)    Recorded in “Interest and fees on loans held for investment” on the Income Statement.

The following table presents the cumulative basis adjustments for fair value hedges:
June 30, 2024December 31, 2023
Balance Sheet Line Item
Carrying Amount of Closed Portfolio (1)
Cumulative Fair Value Adjustment to Hedged Item
Carrying Amount of Closed Portfolio (1)
Cumulative Fair Value Adjustment to Hedged Item
Loans and leases held for investment at amortized cost$2,156,120 $(1,576)$3,109,854 $8,881 
(1)    Represents the amortized cost of the total closed portfolio of loans designated in a portfolio method hedge relationship in which the hedged item is a stated layer that is expected to be remaining at the end of the hedging relationship. At June 30, 2024 and December 31, 2023, the amortized cost of loans designated as the hedged item in the portfolio layer hedging relationship was $1.3 billion and $1.5 billion, respectively.

9. Property, Equipment and Software, Net

Property, equipment and software, net, consist of the following:
June 30, 2024December 31, 2023
Software (1)
$230,752 $209,260 
Leasehold improvements30,699 30,764 
Computer equipment21,655 21,654 
Furniture and fixtures5,554 5,845 
Total property, equipment and software288,660 267,523 
Accumulated depreciation and amortization(122,510)(106,006)
Total property, equipment and software, net$166,150 $161,517 
(1)    Includes $67.9 million and $66.9 million of development in progress for internally-developed software and $4.7 million and $4.6 million of development in progress to customize purchased software as of June 30, 2024 and December 31, 2023, respectively.

41

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Depreciation and amortization expense on property, equipment and software was $12.2 million and $23.9 million for the second quarter and first half of 2024, respectively. Depreciation and amortization expense on property, equipment and software was $10.6 million and $21.8 million for the second quarter and first half of 2023, respectively.

10. Goodwill and Intangible Assets

Goodwill

The Company’s goodwill balance was $75.7 million as of both June 30, 2024 and December 31, 2023. The Company did not record any goodwill impairment expense for the second quarters and first halves of 2024 and 2023. Goodwill is not amortized, but is subject to annual impairment 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 1. Summary of Significant Accounting Policies” in the Annual Report.

Intangible Assets

Intangible assets consist of customer relationships. Intangible assets, net of accumulated amortization, are included in “Other assets” on the Balance Sheet. The gross and net carrying values and accumulated amortization were as follows:
June 30, 2024December 31, 2023
Gross carrying value$54,500 $54,500 
Accumulated amortization(44,207)(42,365)
Net carrying value$10,293 $12,135 

The customer relationship intangible assets are amortized on an accelerated basis from ten to fourteen years. Amortization expense associated with intangible assets for the second quarter and first half of 2024 was $0.9 million and $1.8 million, respectively. Amortization expense associated with intangible assets for the second quarter and first half of 2023 was $1.0 million and $2.2 million, respectively. There was no impairment loss for the second quarters and first halves of 2024 and 2023.

The expected future amortization expense for intangible assets as of June 30, 2024, is as follows:
2024$1,707 
20252,901 
20262,252 
20271,603 
2028945 
Thereafter885 
Total$10,293 

42

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

11. Other Assets

Other assets consist of the following:
June 30, 2024December 31, 2023
Deferred tax assets, net (1)
$145,220 $151,411 
Servicing assets (2)
70,152 78,401 
Nonmarketable equity investments44,161 42,891 
Accrued interest receivable
39,493 35,793 
Operating lease assets23,027 26,611 
Intangible assets, net (3)
10,293 12,135 
Other98,240 108,211 
Total other assets$430,586 $455,453 
(1)    See “Note 16. Income Taxes” for additional detail.
(2)    Loans underlying servicing assets had a total outstanding principal balance of $8.4 billion and $9.5 billion as of June 30, 2024 and December 31, 2023, respectively.
(3)    See “Note 10. Goodwill and Intangible Assets” for additional detail.

12. Deposits

Deposits consist of the following:
June 30, 2024December 31, 2023
Interest-bearing deposits:
Savings and money market accounts$4,968,644 $4,349,239 
Certificates of deposit1,792,943 1,714,889 
Checking accounts998,045 937,552 
Total7,759,632 7,001,680 
Noninterest-bearing deposits335,696 331,806 
Total deposits$8,095,328 $7,333,486 

Total certificates of deposit at June 30, 2024 are scheduled to mature as follows:
2024$1,234,149 
2025537,720 
20264,637 
202711,099 
20282,021 
Thereafter3,317 
Total certificates of deposit$1,792,943 

43

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 amount of certificates of deposit with denominations exceeding the Federal Deposit Insurance Corporation (FDIC) limit of $250 thousand, segregated by time remaining until maturity, as of June 30, 2024:
Three months or lessOver 3 months through
6 months		Over 6 months through
12 months		Over
12 months		Total
Certificates of deposit$50,894 $96,095 $55,258 $10,632 $212,879 

13. Borrowings

Borrowing Capacity

The following table summarizes the Company’s available borrowing capacity and the related pledged collateral:
June 30, 2024December 31, 2023
Available Borrowing Capacity
Pledged Collateral
Available Borrowing CapacityPledged Collateral
FRB Discount Window
$2,345,668 $2,802,549 $2,816,501 $3,507,541 
FHLB of Des Moines
649,783 832,414 661,337 838,511 
Total
$2,995,451 $3,634,963 $3,477,838 $4,346,052 

Long-term Debt

The following table summarizes the components of the Company’s long-term debt, as of the dates indicated:
June 30, 2024December 31, 2023
Advances from PPPLF (1):
Aggregate debt outstanding (fixed interest rate of 0.35%)
$— $6,398 
Pledged collateral
$— $6,392 
Retail notes and certificates (2):
Aggregate debt outstanding
$4,580 $10,488 
Payable on Structured Program borrowings (3):
Aggregate debt outstanding
$894 $2,468 
Pledged collateral
$2,755 $3,930 
(1)    Collateralized by SBA Paycheck Protection Program (PPP) loans originated by the Company. The maturity date of the PPPLF borrowings matches the maturity date of the pledged SBA PPP loans. When loans are forgiven by the SBA, the corresponding PPPLF advance is paid by the Company.
(2)    The Company does not assume principal or interest rate risk on loans that were funded by Retail Notes because loan balances, interest rates and maturities were matched and offset by an equal balance of notes with the exact same interest rates and maturities. As of December 31, 2020, LendingClub ceased offering and selling Retail Notes. The total balance of outstanding Retail Notes will continue to decline as underlying borrower payments are made.
(3)    Consists of certificate participations and securities of certain consolidated VIEs held by third-party investors and secured by “Restricted cash” of $2.8 million as of June 30, 2024 and by “Loans held for investment at fair value” of $0.5 million and “Restricted cash” of $3.4 million as of December 31, 2023.

44

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

14. Other Liabilities

Other liabilities consist of the following:
June 30, 2024December 31, 2023
Accounts payable and accrued expenses$60,896 $54,619 
Operating lease liabilities32,308 37,869 
Payable to investors (1)
27,609 36,823 
Other76,490 93,490 
Total other liabilities$197,303 $222,801 
(1)    Represents principal and interest on loans collected by the Company and pending disbursement to investors.

15. Employee Incentive Plans

The Company’s equity incentive plans provide for granting awards, including restricted stock units (RSUs), performance-based restricted stock units (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 Income Statement, was as follows for the periods presented:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
RSUs
$11,573 $16,383 $23,555 $29,973 
PBRSUs(258)1,762 1,359 2,464 
Stock-based compensation expense, gross11,315 18,145 24,914 32,437 
Less: Capitalized stock-based compensation expense1,866 2,317 3,921 4,721 
Stock-based compensation expense, net$9,449 $15,828 $20,993 $27,716 

Restricted Stock Units

The following table summarizes the Company’s RSU activity:
Number
of Units		Weighted-
Average
Grant Date
Fair Value
Unvested at December 31, 2023
6,999,831 $9.42 
Granted3,837,787 $8.53 
Vested(2,435,039)$10.17 
Forfeited/expired(874,797)$9.14 
Unvested at June 30, 2024
7,527,782 $8.76 

During the first half of 2024, the Company granted 3,837,787 RSUs with an aggregate fair value of $32.8 million.

45

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 June 30, 2024, there was $60.5 million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 1.9 years, subject to any forfeitures.

Performance-based Restricted Stock Units

The Company’s outstanding PBRSU awards have a market-based metric and/or a performance-based metric, each with a three-year performance period, following which any earned portion is immediately vested. With respect to PBRSU awards with a market-based metric, the compensation expense of the award is fixed at the time of grant (incorporating the probability of achieving the market-based metric) and expensed over the performance period. With respect to PBRSU awards with a performance-based metric, the compensation expense of the award is set at the time of grant (assuming a target level of achievement), subsequently adjusted for actual performance during the performance period and expensed over the performance/vesting period.

The following table summarizes the Company’s PBRSU activity:
Number
of Units		Weighted-
Average
Grant Date
Fair Value
Unvested at December 31, 2023
1,469,813 $12.60 
Granted462,060 $8.59 
Forfeited/expired(719,664)$16.64 
Unvested at June 30, 2024
1,212,209 $8.68 

During the first half of 2024, the Company granted 462,060 PBRSUs with an aggregate fair value of $4.0 million.

As of June 30, 2024, there was $5.5 million of unrecognized compensation cost related to unvested PBRSUs, which is expected to be recognized over a weighted-average period of approximately 1.6 years, subject to any forfeitures.

16. Income Taxes

For the second quarter and first half of 2024, the Company recorded an income tax expense of $4.5 million and $8.8 million, respectively, representing an effective tax rate of 23.3% and 24.5%, respectively. For the second quarter and first half of 2023, the Company recorded an income tax expense of $4.7 million and $8.8 million, respectively, representing an effective tax rate of 31.7% and 27.1%, respectively. The effective tax rate differs from the statutory rate due to the favorable impact of recurring items such as tax credits, the unfavorable impact of the non-deductible portions of executive compensation, and the unfavorable impact of stock-based compensation. The decrease in effective tax rates for 2024 compared to the same periods in 2023 is primarily due to a decrease in the unfavorable impact of stock-based compensation.

The following table summarizes the Company’s net deferred tax assets:
June 30, 2024December 31, 2023
Deferred tax assets, net of liabilities$191,328 $197,519 
Valuation allowance(46,108)(46,108)
Deferred tax assets, net of valuation allowance$145,220 $151,411 

46

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

17. Leases

Lessor Arrangements

The Company 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 second quarter and first half of 2024, interest earned on Equipment Finance was $1.4 million and $3.1 million, respectively, and is included in “Interest and fees on loans and leases held for investment” on the Income Statement. For the second quarter and first half of 2023, interest earned on Equipment Finance was $2.3 million and $5.2 million, respectively.

The components of Equipment Finance assets are as follows:
June 30, 2024December 31, 2023
Lease receivables$68,006 $92,546 
Unguaranteed residual asset values23,204 28,913 
Unearned income(7,897)(11,072)
Deferred fees457 605 
Total$83,770 $110,992 

Future minimum lease payments based on maturity of the Company’s lessor arrangements as of June 30, 2024 were as follows:
2024$17,138 
202524,919 
202615,009 
20277,603 
20284,044 
Thereafter1,542 
Total lease payments$70,255 
Discount effect(2,249)
Present value of future minimum lease payments$68,006 

Lessee Arrangements

The Company has various operating leases, including with respect to its headquarters in San Francisco, California, and office spaces in the Salt Lake City, Utah, and Boston, Massachusetts areas. As of June 30, 2024, the lease agreements have remaining lease terms ranging from approximately two years to five years. Some of the lease agreements include options to extend the lease term for up to an additional fifteen years. As of June 30, 2024, the Company pledged $0.4 million of cash and $1.1 million in letters of credit as security deposits in connection with its lease agreements.

Balance sheet information related to leases was as follows:
ROU Assets and Lease LiabilitiesBalance Sheet ClassificationJune 30, 2024December 31, 2023
Operating lease assetsOther assets$23,027 $26,611 
Operating lease liabilitiesOther liabilities$32,308 $37,869 

47

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Net lease costs were $2.7 million and $5.2 million during the second quarter and first half of 2024, respectively. Such costs are recorded within “Occupancy” expense on the Income Statement. Net lease costs were $3.3 million and $6.3 million during the second quarter and first half of 2023, respectively.

Supplemental cash flow information related to the Company’s operating leases was as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Non-cash operating activity:
Leased assets obtained or adjusted in exchange for new, amended, and modified operating lease liabilities (1)
$— $— $— $(4,664)
(1)    Amounts include noncash remeasurements of the operating lease ROU asset.

The Company’s future minimum undiscounted lease payments under operating leases as of June 30, 2024 were as follows:
Operating Lease
Payments
2024$6,441 
202513,129 
20267,228 
20274,265 
20283,922 
Thereafter909 
Total lease payments$35,894 
Discount effect(3,586)
Present value of future minimum lease payments$32,308 

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 RateJune 30, 2024December 31, 2023
Weighted-average remaining lease term (in years)3.323.72
Weighted-average discount rate4.99 %5.04 %

18. Commitments and Contingencies

Operating Lease Commitments

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

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 loan sales, the Company agreed to repurchase loans if representations and warranties made with respect to
48

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

such loans were breached under certain circumstances. The Company believes such provisions are customary and consistent with institutional loan and securitization market standards.

Unfunded Loan Commitments

As of June 30, 2024 and December 31, 2023, the contractual amount of unfunded loan commitments was $91.5 million and $78.1 million, respectively. See “Note 5. Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses” for additional detail related to the reserve for unfunded lending commitments.

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 and state regulatory and/or law enforcement agencies, including from the federal banking regulators that directly regulate the Company and/or 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.

Regulatory Examinations and Actions Relating to the Company’s Business Practices, Licensing and Compliance with Applicable Laws

The Company is and has been subject to periodic inquiries, exams 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 operating in compliance with applicable laws, including the requirements of its licenses and the regulatory framework applicable to its business.

In the past, the Company has successfully resolved such matters in a manner that was not material to its results of financial operations in any period and 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 these matters or other similar matters if or as they arise.

19. Regulatory Requirements

LendingClub and LC Bank are subject to comprehensive supervision, examination and enforcement, and regulation by the FRB and the Office of the Comptroller of the Currency (OCC), 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.
49

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)


The minimum capital requirements under the Basel Committee on Banking Supervision standardized approach for U.S. banking organizations (Basel 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 (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 Basel III capital framework.

The following table summarizes the Company’s and LC Bank’s regulatory capital amounts (in millions) and ratios:
June 30, 2024December 31, 2023
Required Minimum plus Required CCB for
Non-Leverage Ratios
AmountRatioAmountRatio
LendingClub Corporation:
CET1 capital (1)
$1,123.0 17.9 %$1,090.2 17.9 %7.0 %
Tier 1 capital$1,123.0 17.9 %$1,090.2 17.9 %8.5 %
Total capital$1,203.2 19.2 %$1,169.2 19.2 %10.5 %
Tier 1 leverage$1,123.0 12.1 %$1,090.2 12.9 %4.0 %
Risk-weighted assets$6,274.8 N/A$6,104.5 N/AN/A
Quarterly adjusted average assets$9,252.6 N/A$8,476.1 N/AN/A
LendingClub Bank:
CET1 capital (1)
$964.2 15.5 %$949.4 15.8 %7.0 %
Tier 1 capital$964.2 15.5 %$949.4 15.8 %8.5 %
Total capital$1,043.6 16.8 %$1,027.4 17.1 %10.5 %
Tier 1 leverage$964.2 10.5 %$949.4 11.4 %4.0 %
Risk-weighted assets$6,206.4 N/A$6,022.2 N/AN/A
Quarterly adjusted average assets$9,142.1 N/A$8,337.4 N/AN/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.

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 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.

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 its PCA capitalization category declines, including the ability to accept and/or rollover brokered deposits. At June 30, 2024 and December 31, 2023, the Company’s and LC Bank’s regulatory capital ratios exceeded the thresholds required to be regarded as well-
50

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

capitalized institutions and met all capital adequacy requirements to which they are subject. There have been no events or conditions since June 30, 2024 that management believes would change the Company’s categorization.

Federal laws and regulations limit the 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. No dividends were declared by LC Bank during the first half of 2024 or during 2023.

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 and 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 allowance for credit losses 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.

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, LC Bank. Income 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.

All of the Company’s revenue is generated in the United States. The Company has experienced reductions in marketplace investor demand in connection with increases in interest rates and volatility in the macro economy. However, no individual borrower or marketplace investor accounted for 10% or more of total net revenue during the second quarter and first half of 2024. During both the second quarter and first half of 2023, one marketplace bank investor accounted for 14% of total net revenue. No other individual borrower or marketplace investor accounted for 10% or more of total net revenue for any of the periods presented.

LendingClub Bank

The LC Bank operating segment represents the national bank legal entity and reflects 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 relationships with deposit holders.

LendingClub Corporation (Parent Only)

The LendingClub Corporation (Parent only) operating segment represents the holding company legal entity and predominately reflects the operations of the Company prior to the Acquisition. This activity includes, but is not limited to, servicing fee revenue for loan servicing retained prior to the Acquisition, and interest income and interest expense related to the Retail Program and Structured Program transactions entered into prior to the Acquisition.

51

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

Financial information for the segments is presented in the following tables:
LendingClub
Bank		LendingClub
Corporation
(Parent only)		Intercompany
Eliminations		Consolidated Total
Three Months Ended June 30,Three Months Ended June 30,Three Months Ended June 30,Three Months Ended June 30,
20242023202420232024202320242023
Non-interest income:
Marketplace revenue$39,533 $62,006 $10,946 $7,772 $5,874 $13,005 $56,353 $82,783 
Other non-interest income12,387 21,743 1,903 2,431 (11,930)(21,139)2,360 3,035 
Total non-interest income51,920 83,749 12,849 10,203 (6,056)(8,134)58,713 85,818 
Interest income:
Interest income217,814 210,514 1,820 3,972 — — 219,634 214,486 
Interest expense(90,888)(66,546)(218)(1,288)— — (91,106)(67,834)
Net interest income126,926 143,968 1,602 2,684 — — 128,528 146,652 
Total net revenue178,846 227,717 14,451 12,887 (6,056)(8,134)187,241 232,470 
Provision for credit losses(35,561)(66,611)— 16 — — (35,561)(66,595)
Non-interest expense(126,857)(142,563)(11,457)(16,650)6,056 8,134 (132,258)(151,079)
Income (Loss) before income tax benefit (expense)
16,428 18,543 2,994 (3,747)— — 19,422 14,796 
Income tax benefit (expense)(3,872)(5,429)(647)743 — — (4,519)(4,686)
Net income (loss)
$12,556 $13,114 $2,347 $(3,004)$— $— $14,903 $10,110 
Capital expenditures$12,865 $15,857 $— $— $— $— $12,865 $15,857 
Depreciation and amortization$10,896 $7,073 $2,176 $4,565 $— $— $13,072 $11,638 
52

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		Consolidated Total
Six Months Ended June 30,Six Months Ended June 30,Six Months Ended June 30,Six Months Ended June 30,
20242023202420232024202320242023
Non-interest income:
Marketplace revenue$78,048 $134,694 $20,774 $20,880 $13,422 $22,843 $112,244 $178,417 
Other non-interest income26,082 40,904 3,849 4,984 (25,662)(39,497)4,269 6,391 
Total non-interest income104,130 175,598 24,623 25,864 (12,240)(16,654)116,513 184,808 
Interest income:
Interest income422,621 408,844 4,364 8,055 — — 426,985 416,899 
Interest expense(175,011)(120,442)(558)(3,101)— — (175,569)(123,543)
Net interest income247,610 288,402 3,806 4,954 — — 251,416 293,356 
Total net revenue351,740 464,000 28,429 30,818 (12,240)(16,654)367,929 478,164 
Provision for credit losses(67,488)(137,195)— 16 — — (67,488)(137,179)
Non-interest expense(253,353)(290,946)(23,378)(34,095)12,240 16,654 (264,491)(308,387)
Income (Loss) before income tax benefit (expense)30,899 35,859 5,051 (3,261)— — 35,950 32,598 
Income tax benefit (expense)(7,557)(9,685)(1,240)863 — — (8,797)(8,822)
Net income (loss)$23,342 $26,174 $3,811 $(2,398)$— $— $27,153 $23,776 
Capital expenditures$24,646 $32,255 $— $— $— $— $24,646 $32,255 
Depreciation and amortization$21,062 $13,967 $4,683 $10,025 $— $— $25,745 $23,992 
53

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)

LendingClub BankLendingClub Corporation
(Parent only)		Intercompany
Eliminations		Consolidated Total
 June 30, 2024December 31, 2023June 30, 2024December 31, 2023June 30, 2024December 31, 2023June 30, 2024December 31, 2023
Assets
Total cash and cash equivalents$917,693 $1,230,206 $136,318 $110,273 $(115,892)$(87,975)$938,119 $1,252,504 
Restricted cash— — 35,924 46,628 (4,592)(4,984)31,332 41,644 
Securities available for sale at fair value2,814,383 1,617,309 — 2,953 — — 2,814,383 1,620,262 
Loans held for sale at fair value791,059 407,773 — — — — 791,059 407,773 
Loans and leases held for investment, net3,999,482 4,539,915 — — — — 3,999,482 4,539,915 
Loans held for investment at fair value (1)
330,825 253,800 8,397 18,878 — — 339,222 272,678 
Property, equipment and software, net153,772 144,439 12,378 17,078 — — 166,150 161,517 
Investment in subsidiary— — 839,334 816,703 (839,334)(816,703)— — 
Goodwill75,717 75,717 — — — — 75,717 75,717 
Other assets341,643 341,680 107,297 131,135 (18,354)(17,362)430,586 455,453 
Total assets9,424,574 8,610,839 1,139,648 1,143,648 (978,172)(927,024)9,586,050 8,827,463 
Liabilities and Equity
Total deposits8,215,812 7,426,445 — — (120,484)(92,959)8,095,328 7,333,486 
Borrowings (1)
— 6,398 5,474 12,956 — — 5,474 19,354 
Other liabilities143,986 154,077 71,671 86,086 (18,354)(17,362)197,303 222,801 
Total liabilities8,359,798 7,586,920 77,145 99,042 (138,838)(110,321)8,298,105 7,575,641 
Total equity1,064,776 1,023,919 1,062,503 1,044,606 (839,334)(816,703)1,287,945 1,251,822 
Total liabilities and equity$9,424,574 $8,610,839 $1,139,648 $1,143,648 $(978,172)$(927,024)$9,586,050 $8,827,463 
(1)    Prior period amounts have been reclassified to conform to the current period presentation.

54

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, 2023 (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 and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

55

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 was founded in 2006 and brought a traditional credit product – the installment loan – into the digital age by leveraging technology, data science, and a unique marketplace model. In February 2021, LendingClub completed the acquisition of Radius, becoming a bank holding company and forming LC Bank as its wholly-owned subsidiary. LendingClub now operates a leading digital marketplace bank and is one of a small number of fintech companies with a national bank charter. We are building a new of kind of bank, one that aims to advantage our members with the information, tools, and guidance they need to achieve their own version of financial success. We do this by leveraging data and technology to increase access to credit, lower borrowing costs, and improve the return on savings – all through a smart, simple, and rewarding digital experience.

Executive Summary

Despite the interest rate environment and broader economic volatility adversely impacting our business, predominantly through investor demand and pricing for marketplace loans, we have been able to sustain GAAP profitability as a result of our loan credit performance, expense discipline, strong execution and continued innovation. Furthermore, we maintained strong liquidity and capital levels and delivered the following results.

•Loan originations: Loan originations for the second quarter of 2024 increased $166.3 million, or 10%, sequentially and decreased $197.8 million, or 10%, year over year. The sequential increase was driven by an increase in unsecured personal loan origination volume combined with investor demand for Structured Certificates. The year-over-year decrease was primarily driven by a decrease in unsecured personal loan origination volume. We attribute the decrease in volume and investor demand to the elevated interest rate environment.
◦Loan originations held for investment (HFI) at amortized cost for the second quarter of 2024 increased $50.3 million, or 18%, sequentially and decreased $321.7 million, or 49%, year over year.
◦Loan originations HFI at amortized cost as a percentage of loan originations was 19% and 17% for the second and first quarters of 2024, respectively, and 33% for the second quarter of 2023. The percentage of loan originations HFI in any period is dependent on many factors, including quarterly loan origination volume, risk-adjusted returns, liquidity and general regulatory capital considerations.

•Total net revenue: Total net revenue for the second quarter of 2024 increased $6.6 million, or 4%, sequentially and decreased $45.2 million, or 19%, year over year.
◦Marketplace revenue: Marketplace revenue for the second quarter of 2024 increased $0.5 million, or 1%, sequentially and decreased $26.4 million, or 32%, year over year. The year-over-year decrease was primarily due to a decrease in marketplace loan origination volume and lower loan sale prices resulting from a shift in investor demand from banks to asset managers.
◦Net interest income: Net interest income for the second quarter of 2024 increased $5.6 million, or 5%, sequentially and decreased $18.1 million, or 12%, year over year. The sequential increase was primarily due to growth in total interest-earning assets, offset by an increase in interest expense associated with higher deposit funding costs. The year-over-year decrease was primarily driven by a shift in asset mix from loans to senior securities and an increase in interest expense associated with higher deposit funding costs.
◦Net interest margin: Net interest margin for the second quarter of 2024 was 5.75%, remaining flat compared to the first quarter of 2024 and decreasing from 7.09% in the second quarter of 2023.

•Provision for credit losses: Provision for credit losses for the second quarter of 2024 increased $3.6 million, or 11%, sequentially and decreased $31.0 million, or 47%, year over year. The sequential increase was primarily driven by an increase in initial provision from a higher volume of originated loans retained as HFI at amortized cost, offset by a lower discounting effect of the net present value (NPV) on prior loan vintages, and the impact
56

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)
of a $5.3 million provision in our Commercial Real Estate (CRE) portfolio due to one office loan. Excluding this one office loan, the CRE office loan portfolio balance was under $40 million as of June 30, 2024. The majority of office loans were originated prior to the Acquisition. The year-over-year decrease reflects a decrease in the initial provision for credit losses from a lower volume of originated loans retained as HFI at amortized cost.

•Total non-interest expense: Total non-interest expense for the second quarter of 2024 remained relatively flat sequentially and decreased $18.8 million, or 12%, year over year. The year-over-year decrease was primarily driven by a decrease in compensation and benefits expense due to a decrease in headcount as a result of the workforce reduction plans we implemented in 2023.

•Net income: Net income for the second quarter of 2024 increased $2.7 million, or 22%, sequentially and $4.8 million, or 47%, year over year.

•Diluted earnings per share (EPS): Diluted EPS for the second quarter of 2024 was $0.13, compared to $0.11 for the first quarter of 2024 and $0.09 for the same quarter last year.

•Pre-provision net revenue (PPNR): Pre-provision net revenue for the second quarter of 2024 increased $6.5 million, or 13%, sequentially and decreased $26.4 million, or 32%, year over year.

•Total assets: Total assets as of June 30, 2024 increased $341.2 million, or 4%, sequentially and $1.2 billion, or 15%, year over year. The increases primarily reflect growth in securities related to our Structured Certificates program and growth in loans held for sale (HFS) related to our extended seasoning program, partially offset by decreases in loans HFI.

•Deposits: Total deposits as of June 30, 2024 increased $573.7 million, or 8%, sequentially, and $1.3 billion, or 18%, year over year. The increases primarily reflect growth in high-yield savings and certificates of deposit. Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 87% of total deposits as of June 30, 2024.

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.”

57

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 select financial metrics for the periods presented:
As of and for the Three Months Ended
As of and for the Six Months Ended June 30,
June 30,
2024		March 31,
2024		June 30,
2023		20242023
Non-interest income$58,713 $57,800 $85,818 $116,513 $184,808 
Net interest income128,528 122,888 146,652 251,416 293,356 
Total net revenue187,241 180,688 232,470 367,929 478,164 
Non-interest expense132,258 132,233 151,079 264,491 308,387 
Pre-provision net revenue (1)
54,983 48,455 81,391 103,438 169,777 
Provision for credit losses35,561 31,927 66,595 67,488 137,179 
Income before income tax expense
19,422 16,528 14,796 35,950 32,598 
Income tax expense
(4,519)(4,278)(4,686)(8,797)(8,822)
Net income14,903 12,250 10,110 27,153 23,776 
Basic EPS$0.13 $0.11 $0.09 $0.24 $0.22 
Diluted EPS$0.13 $0.11 $0.09 $0.24 $0.22 
LendingClub Corporation Performance Metrics:
Net interest margin5.75 %5.75 %7.09 %5.75 %7.29 %
Efficiency ratio (2)
70.6 %73.2 %65.0 %71.9 %64.5 %
Return on average equity (ROE)4.7 %3.9 %3.4 %4.3 %4.0 %
Return on average total assets (ROA)0.6 %0.5 %0.5 %0.6 %0.6 %
Marketing as a % of loan originations1.47 %1.47 %1.19 %1.47 %1.18 %
LendingClub Corporation Capital Metrics:
Common equity tier 1 capital ratio17.9 %17.6 %16.1 %
Tier 1 leverage ratio12.1 %12.5 %12.4 %
Book value per common share$11.52 $11.40 $11.09 
Tangible book value per common share (1)
$10.75 $10.61 $10.26 
Loan Originations (in millions) (3):
Marketplace loans$1,477 $1,361 $1,353 $2,838 $2,639 
Loan originations held for investment336 285 657 621 1,659 
Total loan originations$1,813 $1,646 $2,011 $3,459 $4,298 
Loan originations held for investment as % of total loan originations19 %17 %33 %18 %39 %
Servicing portfolio AUM (in millions) (4):
Total servicing portfolio$12,999 $13,437 $15,669 
Loans serviced for others$8,337 $8,671 $10,204 
(1)    Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” for additional information.
(2)    Calculated as the ratio of non-interest expense to total net revenue.
(3)    Includes unsecured personal loans and auto loans only.
(4)    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 serviced for others and retained for investment by the Company.

58

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 and for the Three Months Ended
June 30,
2024		March 31,
2024		June 30,
2023
Balance Sheet Data:
Securities available for sale
$2,814,383 $2,228,500 $523,579 
Loans held for sale at fair value
$791,059 $550,415 $250,361 
Loans and leases held for investment at amortized cost
$4,228,391 $4,505,816 $5,533,349 
Gross allowance for loan and lease losses (1)
$(285,368)$(311,794)$(383,960)
Recovery asset value (2)
$56,459 $52,644 $28,797 
Allowance for loan and lease losses
$(228,909)$(259,150)$(355,163)
Loans and leases held for investment at amortized cost, net
$3,999,482 $4,246,666 $5,178,186 
Loans held for investment at fair value (3)
$339,222 $427,396 $430,956 
Total loans and leases held for investment (3)
$4,338,704 $4,674,062 $5,609,142 
Total assets$9,586,050 $9,244,828 $8,342,506 
Total deposits$8,095,328 $7,521,655 $6,843,535 
Total liabilities$8,298,105 $7,978,542 $7,136,983 
Total equity$1,287,945 $1,266,286 $1,205,523 
Allowance Ratios (4):
ALLL to total loans and leases held for investment at amortized cost
5.4 %5.8 %6.4 %
ALLL to commercial loans and leases held for investment at amortized cost
2.7 %1.9 %1.9 %
ALLL to consumer loans and leases held for investment at amortized cost
5.9 %6.4 %7.1 %
Gross ALLL to consumer loans and leases held for investment at amortized cost
7.5 %7.8 %7.7 %
Net charge-offs$66,818 $80,483 $59,884 
Net charge-off ratio (5)
6.2 %6.9 %4.4 %
(1)    Represents the allowance for future estimated net charge-offs on existing portfolio balances.
(2)    Represents the negative allowance for expected recoveries of amounts previously charged-off.
(3)    Prior period amounts have been reclassified to conform to the current period presentation.
(4)    Calculated as ALLL or gross ALLL, where applicable, to the corresponding portfolio segment balance of loans and leases held for investment at amortized cost.
(5)    Calculated as annualized net charge-offs divided by average outstanding loans and leases HFI at amortized cost, net, during the period.
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)
Results of Operations
The following table sets forth the Condensed Consolidated Statements of Income (Income Statement) data for each of the periods presented:
Three Months EndedChange (%)
June 30,
2024		March 31,
2024		June 30,
2023
Q2 2024
vs
Q1 2024
Q2 2024
vs
Q2 2023
Non-interest income:
Marketplace revenue$56,353 $55,891 $82,783 1 %(32)%
Other non-interest income2,360 1,909 3,035 24 %(22)%
Total non-interest income58,713 57,800 85,818 2 %(32)%
Interest income:
Interest on loans held for sale26,721 14,699 4,433 82 %503 %
Interest and fees on loans and leases held for investment124,819 132,393 162,085 (6)%(23)%
Interest on loans held for investment at fair value (1)
12,047 8,409 22,886 43 %(47)%
Interest on securities available for sale42,879 35,347 5,948 21 %621 %
Other interest income
13,168 16,503 19,134 (20)%(31)%
Total interest income219,634 207,351 214,486 6 %2 %
Interest expense:
Interest on deposits90,193 83,963 66,521 7 %36 %
Other interest expense (1)
913 500 1,313 83 %(30)%
Total interest expense91,106 84,463 67,834 8 %34 %
Net interest income128,528 122,888 146,652 5 %(12)%
Total net revenue187,241 180,688 232,470 4 %(19)%
Provision for credit losses35,561 31,927 66,595 11 %(47)%
Non-interest expense:
Compensation and benefits56,540 59,554 71,553 (5)%(21)%
Marketing26,665 24,136 23,940 10 %11 %
Equipment and software12,360 12,684 13,968 (3)%(12)%
Depreciation and amortization13,072 12,673 11,638 3 %12 %
Professional services7,804 7,091 9,974 10 %(22)%
Occupancy3,941 3,861 4,684 2 %(16)%
Other non-interest expense11,876 12,234 15,322 (3)%(22)%
Total non-interest expense132,258 132,233 151,079 — %(12)%
Income before income tax expense
19,422 16,528 14,796 18 %31 %
Income tax expense
(4,519)(4,278)(4,686)6 %(4)%
Net income$14,903 $12,250 $10,110 22 %47 %
60

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)
Six Months Ended June 30,
20242023Change (%)
Non-interest income:
Marketplace revenue$112,244 $178,417 (37)%
Other non-interest income4,269 6,391 (33)%
Total non-interest income116,513 184,808 (37)%
Interest income:
Interest on loans held for sale41,420 10,190 306 %
Interest and fees on loans and leases held for investment257,212 312,552 (18)%
Interest on loans held for investment at fair value (1)
20,456 51,461 (60)%
Interest on securities available for sale78,226 9,848 694 %
Other29,671 32,848 (10)%
Total interest income426,985 416,899 2 %
Interest expense:
Interest on deposits174,156 119,794 45 %
Other interest expense (1)
1,413 3,749 (62)%
Total interest expense175,569 123,543 42 %
Net interest income251,416 293,356 (14)%
Total net revenue367,929 478,164 (23)%
Provision for credit losses67,488 137,179 (51)%
Non-interest expense:
Compensation and benefits116,094 144,860 (20)%
Marketing50,801 50,820 — %
Equipment and software25,044 27,664 (9)%
Depreciation and amortization25,745 23,992 7 %
Professional services14,895 19,032 (22)%
Occupancy7,802 8,994 (13)%
Other non-interest expense24,110 33,025 (27)%
Total non-interest expense264,491 308,387 (14)%
Income before income tax expense
35,950 32,598 10 %
Income tax expense
(8,797)(8,822)— %
Net income$27,153 $23,776 14 %
(1)    Prior period amounts have been reclassified to conform to the current period presentation.

The analysis below is presented for the following periods: Second quarter of 2024 compared to the first quarter of 2024 (sequential), second quarter of 2024 compared to the second quarter of 2023 (year over year) and first half of 2024 compared to the first half of 2023 (six months over six months).

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)
Marketplace Revenue

Marketplace revenue consists of the following:
Three Months EndedChange (%)
June 30,
2024		March 31,
2024		June 30,
2023
Q2 2024
vs
Q1 2024
Q2 2024
vs
Q2 2023
Origination fees$77,131 $70,079 $70,989 10 %9 %
Servicing fees19,869 19,592 22,015 1 %(10)%
Gain on sales of loans10,748 10,909 13,221 (1)%(19)%
Net fair value adjustments(51,395)(44,689)(23,442)15 %119 %
Total marketplace revenue$56,353 $55,891 $82,783 1 %(32)%

Six Months Ended June 30,
20242023Change (%)
Origination fees$147,210 $141,532 4 %
Servicing fees39,461 48,395 (18)%
Gain on sales of loans21,657 27,346 (21)%
Net fair value adjustments(96,084)(38,856)147 %
Total marketplace revenue$112,244 $178,417 (37)%

We elected to account for HFS loans under the fair value option. With the election of the fair value option, origination fees, net fair value adjustments prior to the sales of the loans, and servicing asset gains on the sales of the loans, are reported as separate components within “Marketplace revenue.”

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 HFS.

The following table presents loan origination volume during each of the periods set forth below:
Three Months EndedChange (%)
June 30,
2024		March 31,
2024		June 30,
2023
Q2 2024
vs
Q1 2024
Q2 2024
vs
Q2 2023
Marketplace loans$1,477,116 $1,361,177 $1,353,134 9 %9 %
Loan originations held for investment335,646 285,322657,380 18 %(49)%
Total loan originations (1)
$1,812,762 $1,646,499 $2,010,514 10 %(10)%

Six Months Ended June 30,
20242023Change (%)
Marketplace loans$2,838,293 $2,638,782 8 %
Loan originations held for investment620,968 1,659,369 (63)%
Total loan originations (1)
$3,459,261 $4,298,151 (20)%
(1)    Includes unsecured personal loans and auto loans only.

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)
Sequential: Origination fees were $77.1 million and $70.1 million for the second and first quarters of 2024, respectively, an increase of 10%.

Year Over Year: Origination fees were $77.1 million and $71.0 million for the second quarters of 2024 and 2023, respectively, an increase of 9%.

Six Months Over Six Months: Origination fees were $147.2 million and $141.5 million for the first halves of 2024 and 2023, respectively, an increase of 4%.

The increases in origination fees were primarily due to higher origination volumes of marketplace loans.

Servicing Fees

We receive servicing fees to compensate us for servicing loans on behalf of investors, including managing payments from borrowers, collections and payments to those investors. Servicing fee revenue related to loans sold also includes the change in fair value of servicing assets associated with the loans.

The table below illustrates AUM serviced on our platform by the method in which the loans were financed as of the periods presented. Loans sold and subsequently serviced on behalf of the investor represent a key driver of our servicing fee revenue.
As of the period ended,
Change (%)
June 30,
2024		March 31,
2024		June 30,
2023
Q2 2024
vs
Q1 2024
Q2 2024
vs
Q2 2023
AUM (in millions):
Loans sold$8,345 $8,683 $10,244 (4)%(19)%
Loans held by LendingClub Bank4,654 4,754 5,425 (2)%(14)%
Total$12,999 $13,437 $15,669 (3)%(17)%

In addition to the loans serviced on our marketplace platform, we serviced $111.6 million, $124.4 million and $146.9 million in outstanding principal balance of commercial loans sold as of June 30, 2024, March 31, 2024 and June 30, 2023, respectively.

Sequential: Servicing fees were $19.9 million and $19.6 million for the second and first quarters of 2024, respectively, an increase of 1%.

Year Over Year: Servicing fees were $19.9 million and $22.0 million for the second quarters of 2024 and 2023, respectively, a decrease of 10%.

Six Months Over Six Months: Servicing fees were $39.5 million and $48.4 million for the first halves of 2024 and 2023, respectively, a decrease of 18%.
63

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 decreases in servicing fees year over year and six months over six months were primarily due to a decrease in loan balances serviced for others.

Gain on Sales of Loans

In connection with loan sales, we recognize 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 at the time of sale. Additionally, we recognize transaction costs, if any, as a loss on sale of loans.

Sequential: Gain on sales of loans was $10.7 million and $10.9 million for the second and first quarters of 2024, respectively, a decrease of 1%.

Year Over Year: Gain on sales of loans was $10.7 million and $13.2 million for the second quarters of 2024 and 2023, respectively, a decrease of 19%.

Six Months Over Six Months: Gain on sales of loans was $21.7 million and $27.3 million for the first halves of 2024 and 2023, respectively, a decrease of 21%.

The decreases in the gain on sales of loans were primarily due to a decrease in the volume of marketplace loans sold.

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.

Sequential: Net fair value adjustments were $(51.4) million and $(44.7) million for the second and first quarters of 2024, respectively, an increased loss of $6.7 million.

Year Over Year: Net fair value adjustments were $(51.4) million and $(23.4) million for the second quarters of 2024 and 2023, respectively, an increased loss of $28.0 million.

Six Months Over Six Months: Net fair value adjustments were $(96.1) million and $(38.9) million for the first halves of 2024 and 2023, respectively, an increased loss of $57.2 million.

The increased losses were primarily due to a higher origination volume of marketplace loans. Additionally, the increased losses year over year and six months over six months were also attributable to lower loan sales prices.

Net fair value adjustments primarily consist of fair value adjustments on our loans HFS portfolio. See “Notes to Condensed Consolidated Financial Statements – Note 7. Fair Value Measurements” for additional information related to the significant unobservable inputs used in the fair value measurement of loans HFS and activity within the loans HFS portfolio.
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)

Net Interest Income

The table below presents net interest income information corresponding to interest-earning assets and interest-bearing funding sources. The average yield/rate is calculated by dividing the annualized period-end interest income/expense by the average balance.
Three Months Ended
June 30, 2024
Three Months Ended
March 31, 2024
Three Months Ended
June 30, 2023
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 (1)
Cash, cash equivalents, restricted cash and other$976,330 $13,168 5.40 %$1,217,395 $16,503 5.42 %$1,512,700 $19,134 5.06 %
Securities available for sale at fair value2,406,767 42,879 7.13 %1,972,561 35,347 7.17 %437,473 5,948 5.44 %
Loans held for sale at fair value838,143 26,721 12.75 %467,275 14,699 12.58 %106,865 4,433 16.59 %
Loans and leases held for investment at amortized cost:
Unsecured personal loans
3,243,161 108,425 13.37 %3,518,101 116,055 13.20 %4,360,506 145,262 13.33 %
Commercial and other consumer loans (2)
1,097,846 16,394 5.97 %1,115,931 16,338 5.86 %1,156,751 16,823 5.82 %
Loans and leases held for investment at amortized cost4,341,007 124,819 11.50 %4,634,032 132,393 11.43 %5,517,257 162,085 11.75 %
Loans held for investment at fair value (2)
383,872 12,047 12.55 %256,335 8,409 13.12 %703,729 22,886 13.01 %
Total loans and leases held for investment (2)
4,724,879 136,866 11.59 %4,890,367 140,802 11.52 %6,220,986 184,971 11.89 %
Total interest-earning assets8,946,119 219,634 9.82 %8,547,598 207,351 9.70 %8,278,024 214,486 10.36 %
Cash and due from banks and restricted cash55,906 58,440 78,221 
Allowance for loan and lease losses(245,478)(291,168)(354,348)
Other non-interest earning assets632,253 631,468 686,956 
Total assets$9,388,800 $8,946,338 $8,688,853 
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts$1,097,696 $10,084 3.69 %$1,054,614 $9,410 3.59 %$1,397,302 $7,760 2.23 %
Savings accounts and certificates of deposit6,449,061 80,109 5.00 %6,069,942 74,553 4.94 %5,546,862 58,761 4.25 %
Interest-bearing deposits
7,546,757 90,193 4.81 %7,124,556 83,963 4.74 %6,944,164 66,521 3.84 %
Other interest-bearing liabilities (2)
56,628 913 6.45 %26,571 500 7.53 %64,169 1,313 8.18 %
Total interest-bearing liabilities7,603,385 91,106 4.82 %7,151,127 84,463 4.75 %7,008,333 67,834 3.88 %
65

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, 2024
Three Months Ended
March 31, 2024
Three Months Ended
June 30, 2023
Average
Balance		Interest Income/
Expense		Average Yield/
Rate		Average
Balance		Interest Income/
Expense		Average Yield/
Rate		Average
Balance		Interest Income/
Expense		Average Yield/
Rate
Noninterest-bearing deposits
303,199 317,430 205,750 
Other liabilities215,608 220,544 272,142 
Total liabilities$8,122,192 $7,689,101 $7,486,225 
Total equity$1,266,608 $1,257,237 $1,202,628 
Total liabilities and equity$9,388,800 $8,946,338 $8,688,853 
Interest rate spread5.00 %4.95 %6.48 %
Net interest income and net interest margin$128,528 5.75 %$122,888 5.75 %$146,652 7.09 %
(1)    Nonaccrual loans and any related income are included in their respective loan categories.
(2)    Prior period amounts have been reclassified to conform to the current period presentation.

An analysis of the sequential and year-over-year changes in the categories of interest revenue and interest expense resulting from changes in volume and rate is as follows:
Three Months Ended June 30, 2024
Compared to
Three Months Ended March 31, 2024
Increase (Decrease) Due to Change in:
Average Volume(1)
Average
Yield/Rate(1)
Total
Interest-earning assets
Cash, cash equivalents, restricted cash and other$(3,255)$(80)$(3,335)
Securities available for sale at fair value7,737 (205)7,532 
Loans held for sale at fair value11,822 200 12,022 
Loans and leases held for investment at amortized cost(8,420)846 (7,574)
Loans and leases held for investment at fair value
4,017 (379)3,638 
Total increase in interest income on interest-earning assets
$11,901 $382 $12,283 
Interest-bearing liabilities
Checking and money market accounts$391 $283 $674 
Savings accounts and certificates of deposit4,701 855 5,556 
Interest-bearing deposits5,092 1,138 6,230 
Other interest-bearing liabilities
493 (80)413 
Total increase in interest expense on interest-bearing liabilities
$5,585 $1,058 $6,643 
Increase (decrease) in net interest income
$6,316 $(676)$5,640 
(1)    Volume and rate changes have been allocated on a consistent basis using the respective percentage changes in average balances and average rates.
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)
Three Months Ended June 30, 2024
Compared to
Three Months Ended June 30, 2023
Increase (Decrease) Due to Change in:
Average Volume(1)
Average
Yield/Rate(1)
Total
Interest-earning assets
Cash, cash equivalents, restricted cash and other$(7,164)$1,198 $(5,966)
Securities available for sale at fair value34,549 2,382 36,931 
Loans held for sale at fair value23,543 (1,255)22,288 
Loans and leases held for investment at amortized cost(33,888)(3,378)(37,266)
Loans and leases held for investment at fair value (2)
(10,064)(775)(10,839)
Total increase (decrease) in interest income on interest-earning assets
$6,976 $(1,828)$5,148 
Interest-bearing liabilities
Checking and money market accounts$(1,947)$4,271 $2,324 
Savings accounts and certificates of deposit10,259 11,089 21,348 
Interest-bearing deposits8,312 15,360 23,672 
Other interest-bearing liabilities (2)
(143)(257)(400)
Total increase in interest expense on interest-bearing liabilities
$8,169 $15,103 $23,272 
Decrease in net interest income
$(1,193)$(16,931)$(18,124)
(1)    Volume and rate changes have been allocated on a consistent basis using the respective percentage changes in average balances and average rates.
(2)    Prior period amounts have been reclassified to conform to the current period presentation.

67

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)
Six Months Ended
June 30, 2024		Six Months Ended
June 30, 2023
Average
Balance		Interest Income/
Expense		Average Yield/
Rate		Average
Balance		Interest Income/
Expense		Average Yield/
Rate
Interest-earning assets (1)
Cash, cash equivalents, restricted cash and other$1,096,862 $29,671 5.41 %$1,367,495 $32,848 4.80 %
Securities available for sale at fair value2,189,664 78,226 7.15 %400,422 9,848 4.92 %
Loans held for sale at fair value652,709 41,420 12.69 %108,712 10,190 18.75 %
Loans and leases held for investment at amortized cost:
Unsecured personal loans
3,380,631 224,480 13.28 %4,214,421 278,949 13.24 %
Commercial and other consumer loans (2)
1,106,888 32,732 5.91 %1,166,075 33,603 5.76 %
Loans and leases held for investment at amortized cost4,487,519 257,212 11.46 %5,380,496 312,552 11.62 %
Loans held for investment at fair value (2)
320,105 20,456 12.78 %792,788 51,461 12.98 %
Total loans and leases held for investment (2)
4,807,624 277,668 11.55 %6,173,284 364,013 11.79 %
Total interest-earning assets8,746,859 426,985 9.76 %8,049,913 416,899 10.36 %
Cash and due from banks and restricted cash57,173 75,067 
Allowance for loan and lease losses(268,323)(346,398)
Other non-interest earning assets631,860 676,861 
Total assets$9,167,569 $8,455,443 
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts$1,076,155 $19,494 3.64 %$1,514,843 $15,328 2.04 %
Savings accounts and certificates of deposit6,259,502 154,662 4.97 %5,149,379 104,466 4.09 %
Interest-bearing deposits
7,335,657 174,156 4.77 %6,664,222 119,794 3.62 %
Other interest-bearing liabilities (2)
41,599 1,413 6.80 %108,858 3,749 6.89 %
Total interest-bearing liabilities7,377,256 175,569 4.79 %6,773,080 123,543 3.68 %
Noninterest-bearing deposits
310,315 223,752 
Other liabilities218,076 268,028 
Total liabilities$7,905,647 $7,264,860 
Total equity$1,261,922 $1,190,583 
Total liabilities and equity$9,167,569 $8,455,443 
Interest rate spread4.98 %6.68 %
Net interest income and net interest margin$251,416 5.75 %$293,356 7.29 %
(1)    Nonaccrual loans and any related income are included in their respective loan categories.
(2)    Prior period amounts have been reclassified to conform to the current period presentation.

68

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)
Six Months Ended June 30, 2024
Compared to
Six Months Ended June 30, 2023
Increase (Decrease) Due to Change in:
Average Volume(1)
Average
Yield/Rate(1)
Total
Interest-earning assets
Cash, cash equivalents, restricted cash and other$(7,002)$3,825 $(3,177)
Securities available for sale at fair value62,089 6,289 68,378 
Loans held for sale at fair value35,520 (4,290)31,230 
Loans and leases held for investment at amortized cost(51,234)(4,106)(55,340)
Loans and leases held for investment at fair value (2)
(30,218)(787)(31,005)
Total increase in interest income on interest-earning assets
$9,155 $931 $10,086 
Interest-bearing liabilities
Checking and money market accounts$(5,417)$9,583 $4,166 
Savings accounts and certificates of deposit25,159 25,037 50,196 
Interest-bearing deposits19,742 34,620 54,362 
Other interest-bearing liabilities (2)
(2,288)(48)(2,336)
Total increase in interest expense on interest-bearing liabilities
$17,454 $34,572 $52,026 
Decrease in net interest income
$(8,299)$(33,641)$(41,940)
(1)    Volume and rate changes have been allocated on a consistent basis using the respective percentage changes in average balances and average rates.
(2)    Prior period amounts have been reclassified to conform to the current period presentation.
69

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 at amortized cost 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 NPV of expected cash flows. The effective interest rates are calculated based on the periodic interest income received from the loan’s contractual cash flows and the net investment in the loan, which includes deferred origination fees and costs, to provide a constant rate of return over the loan term. The NPV from the DCF approach is then compared to the amortized cost basis of the loans and leases to derive expected credit losses. Under the DCF approach, the provision for credit losses in subsequent periods includes a credit loss expense related to the discounting effect due to the passage of time after the initial recognition of ALLL on originated HFI loans at amortized cost.

The provision for credit losses includes the credit loss expense for HFI loans and leases at amortized cost, available for sale (AFS) securities and unfunded lending commitments. The table below illustrates the composition of the provision for credit losses for each period presented, as well as the loan originations held for investment in each period, which is a key driver for credit loss expense:
Three Months EndedSix Months Ended June 30,
June 30,
2024		March 31,
2024		June 30,
2023		20242023
Credit loss expense for loans and leases held for investment$36,577 $29,246 $66,190 $65,823 $137,040 
Credit loss expense (benefit) for securities available for sale
(809)2,892 — 2,083 — 
Credit loss expense (benefit) for unfunded lending commitments
(207)(211)405 (418)139 
Total provision for credit losses$35,561 $31,927 $66,595 $67,488 $137,179 
Loan originations held for investment$335,646 $285,322 $657,380 $620,968 $1,659,369 

Sequential: The provision for credit losses was $35.6 million and $31.9 million for the second and first quarters of 2024, respectively, an increase of 11%.

Year Over Year: The provision for credit losses was $35.6 million and $66.6 million for the second quarters of 2024 and 2023, respectively, a decrease of 47%.

Six Months Over Six Months: The provision for credit losses was $67.5 million and $137.2 million for the first halves of 2024 and 2023, respectively, a decrease of 51%.

The changes in the provision for credit losses primarily reflect the change in the initial provision based on the volume of originated loans retained as HFI at amortized cost, offset by a lower discounting effect of the NPV on prior loan vintages. In addition, the sequential increase was due to the impact of a $5.3 million provision in our CRE portfolio due to one office loan. Excluding this one office loan, the CRE office loan portfolio balance was under $40 million as of June 30, 2024. The majority of office loans were originated prior to the Acquisition.
70

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)
Allowance for Credit Losses

The activity in the allowance for credit losses (ACL) was as follows:
Three Months EndedSix Months Ended June 30,
June 30,
2024		March 31,
2024		June 30,
2023		20242023
Allowance for loan and lease losses, beginning of period$259,150 $310,387 $348,857 $310,387 $327,852 
Credit loss expense for loans and leases held for investment36,577 29,246 66,190 65,823 137,040 
Charge-offs(78,088)(90,342)(64,269)(168,430)(116,832)
Recoveries11,270 9,859 4,385 21,129 7,103 
Allowance for loan and lease losses, end of period
$228,909 $259,150 $355,163 $228,909 $355,163 
Allowance for securities available for sale, beginning of period$2,892 $— $— $— $— 
Credit loss expense (benefit) for securities available for sale
(809)2,892 — 2,083 — 
Allowance for securities available for sale, end of period$2,083 $2,892 $— $2,083 $— 
Reserve for unfunded lending commitments, beginning of period$1,662 $1,873 $1,612 $1,873 $1,878 
Credit loss expense (benefit) for unfunded lending commitments
(207)(211)405 (418)139 
Reserve for unfunded lending commitments, end of period (1)
$1,455 $1,662 $2,017 $1,455 $2,017 
(1)    Relates to $91.5 million, $72.1 million and $108.9 million of unfunded commitments as of June 30, 2024, March 31, 2024 and June 30, 2023, respectively. As of June 30, 2024, $8.3 million of the $91.5 million of unfunded commitments is unconditionally cancellable and therefore has no associated reserve.

The following table presents the components of the allowance for loan and lease losses:
June 30,
2024		March 31,
2024		June 30,
2023
Gross allowance for loan and lease losses (1)
$285,368 $311,794 $383,960 
Recovery asset value (2)
(56,459)(52,644)(28,797)
Allowance for loan and lease losses$228,909 $259,150 $355,163 
(1)    Represents the allowance for future estimated net charge-offs on existing portfolio balances.
(2)    Represents a negative allowance for expected recoveries of amounts previously charged-off.

71

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)
June 30,
2024		March 31,
2024		June 30,
2023
Total loans and leases held for investment$4,228,391 $4,505,816 $5,533,349 
Allowance for loan and lease losses
$228,909 $259,150 $355,163 
Allowance ratio (1)
5.4 %5.8 %6.4 %
Gross allowance for loan and lease losses
$285,368 $311,794 $383,960 
Gross allowance ratio (1)
6.7 %6.9 %6.9 %
(1)    Calculated as ALLL or gross ALLL, where applicable, to total loans and leases held for investment at amortized cost.

Net Charge-Offs

The following table presents information regarding average loan and lease balances, net charge-offs and the annualized ratio of net charge-offs to average outstanding loans and leases HFI at amortized cost, net, during the period:
Three Months EndedSix Months Ended June 30,
June 30,
2024		March 31,
2024		June 30,
2023		20242023
Average loans and leases held for investment at amortized cost
$4,341,007$4,634,032$5,517,257$4,487,519$5,380,496
Net charge-offs
$66,818$80,483$59,884$147,301$109,729
Net charge-off ratio
6.2 %6.9 %4.4 %6.6 %4.1 %

Nonaccrual

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. Unsecured personal loans are charged-off no later than 120 days past due.

The following table presents information regarding total nonaccrual loans and leases:
June 30,
2024		March 31,
2024		June 30,
2023
Nonaccrual loans and leases held for investment at amortized cost
$65,146 $45,307 $51,383 
% of total loans and leases held for investment
1.5 %1.0 %0.9 %

For additional information on the ACL and nonaccrual loans and leases, see “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1. Summary of Significant Accounting Policies” in our Annual Report and “Note 5. Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses” in this Report.

72

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)
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 and deposit customer acquisition efforts and building general brand awareness, (iii) equipment and software, (iv) depreciation and amortization, (v) professional services, which primarily consist of consulting fees, and (vi) occupancy, which includes rent expense and all other costs related to occupying our office spaces.
Three Months EndedChange (%)
June 30,
2024		March 31,
2024		June 30,
2023		Q2 2024
vs
Q1 2024
Q2 2024
vs
Q2 2023
Non-interest expense:
Compensation and benefits$56,540 $59,554 $71,553 (5)%(21)%
Marketing26,665 24,136 23,940 10 %11 %
Equipment and software12,360 12,684 13,968 (3)%(12)%
Depreciation and amortization13,072 12,673 11,638 3 %12 %
Professional services7,804 7,091 9,974 10 %(22)%
Occupancy3,941 3,861 4,684 2 %(16)%
Other non-interest expense11,876 12,234 15,322 (3)%(22)%
Total non-interest expense$132,258 $132,233 $151,079 — %(12)%

Six Months Ended June 30,
20242023Change (%)
Non-interest expense:
Compensation and benefits$116,094 $144,860 (20)%
Marketing50,801 50,820 — %
Equipment and software25,044 27,664 (9)%
Depreciation and amortization25,745 23,992 7 %
Professional services14,895 19,032 (22)%
Occupancy7,802 8,994 (13)%
Other non-interest expense24,110 33,025 (27)%
Total non-interest expense$264,491 $308,387 (14)%

Compensation and Benefits

Sequential: Compensation and benefits expense decreased $3.0 million, or 5%, for the second quarter of 2024 compared to the first quarter of 2024. The decrease was primarily due to a change in the composition of the executive team.

Year Over Year: Compensation and benefits expense decreased $15.0 million, or 21%, for the second quarter of 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in headcount as a result of the workforce reduction plans we implemented in 2023.

Six Months Over Six Months: Compensation and benefits expense decreased $28.8 million, or 20%, for the first half of 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in headcount as a result of the workforce reduction plans we implemented in 2023.

73

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)
Marketing

Sequential: Marketing expense increased $2.5 million, or 10%, for the second quarter of 2024 compared to the first quarter of 2024.

Year Over Year: Marketing expense increased $2.7 million, or 11%, for the second quarter of 2024 compared to the same period in 2023.

Six Months Over Six Months: Marketing expense remained relatively flat for the first half of 2024 compared to the same period in 2023.

The increases in marketing expense were primarily due to an increase in variable marketing expenses based on higher origination volume of marketplace loans.

Equipment and Software

Sequential: Equipment and software expense decreased $0.3 million, or 3%, for the second quarter of 2024 compared to the first quarter of 2024.

Year Over Year: Equipment and software expense decreased $1.6 million, or 12%, for the second quarter of 2024 compared to the same period in 2023.

Six Months Over Six Months: Equipment and software expense decreased $2.6 million, or 9%, for the first half of 2024 compared to the same period in 2023.

The decreases in equipment and software expense were primarily due to a decrease in subscription costs.

Depreciation and Amortization

Sequential: Depreciation and amortization expense increased $0.4 million, or 3%, for the second quarter of 2024 compared to the first quarter of 2024.

Year Over Year: Depreciation and amortization expense increased $1.4 million, or 12%, for the second quarter of 2024 compared to the same period in 2023.

Six Months Over Six Months: Depreciation and amortization expense increased $1.8 million, or 7%, for the first half of 2024 compared to the same period in 2023.

The increases in depreciation and amortization expense were primarily due to an increase in the amortization of internally-developed software.

Professional Services

Sequential: Professional services increased $0.7 million, or 10%, for the second quarter of 2024 compared to the first quarter of 2024.

Year Over Year: Professional services decreased $2.2 million, or 22%, for the second quarter of 2024 compared to the same period in 2023.

74

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)
Six Months Over Six Months: Professional services decreased $4.1 million, or 22%, for the first half of 2024 compared to the same period in 2023.

The changes in professional services expense were primarily due to an increase or decrease in consulting fees.

Occupancy

Sequential: Occupancy expense remained relatively flat for the second quarter of 2024 compared to the first quarter of 2024.

Year Over Year: Occupancy expense decreased $0.7 million, or 16%, for the second quarter of 2024 compared to the same period in 2023.

Six Months Over Six Months: Occupancy expense decreased $1.2 million, or 13%, for the first half of 2024 compared to the same period in 2023.

The decreases in occupancy expense were primarily due to a decrease in rent expense.

Other non-interest expense

Sequential: Other non-interest expense decreased $0.4 million, or 3%, for the second quarter of 2024 compared to the first quarter of 2024.

Year Over Year: Other non-interest expense decreased $3.4 million, or 22%, for the second quarter of 2024 compared to the same period in 2023.

Six Months Over Six Months: Other non-interest expense decreased $8.9 million, or 27%, for the first half of 2024 compared to the same period in 2023.

The decreases in other non-interest expense were primarily due to decreases in miscellaneous operating expenses.

Income Taxes

For the second quarter and first half of 2024, we recorded an income tax expense of $4.5 million and $8.8 million, respectively, representing an effective tax rate of 23.3% and 24.5%, respectively. For the second quarter and first half of 2023, we recorded an income tax expense of $4.7 million and $8.8 million, respectively, representing an effective tax rate of 31.7% and 27.1%, respectively. The effective tax rate differs from the statutory rate due to the favorable impact of recurring items such as tax credits, the unfavorable impact of the non-deductible portions of executive compensation, and the unfavorable impact of stock-based compensation. The decrease in effective tax rates for 2024 compared to the same periods in 2023 is primarily due to a decrease in the unfavorable impact of stock-based compensation.

As of June 30, 2024, we maintained a valuation allowance of $46.1 million related to certain state net operating loss carryforwards (NOLs) and state tax credit carryforwards. The realization and timing of any remaining state NOLs and state tax credit carryforwards is uncertain and may expire before being utilized, based primarily on the allocation of taxable income constraints to the Parent and not related to the earnings of the Company. Changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions are recorded as current period income tax expense or benefit.

75

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)
Income 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.

Segment Information

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, LC Bank.

LendingClub Bank

The LC Bank operating segment represents the national bank legal entity and reflects 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 relationships with deposit holders.

LendingClub Corporation (Parent Only)

The LendingClub Corporation (Parent only) operating segment represents the holding company legal entity and predominately reflects the operations of the Company prior to the Acquisition. This activity includes, but is not limited to, servicing fee revenue for loan servicing retained prior to the Acquisition, and interest income and interest expense related to the Retail Program and Structured Program transactions entered into prior to the Acquisition.

76

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 information for the segments is presented in the following table:
LendingClub
Bank		LendingClub
Corporation
(Parent only)		Intercompany
Eliminations		Consolidated Total
Three Months Ended June 30,Three Months Ended June 30,Three Months Ended June 30,Three Months Ended June 30,
 20242023202420232024202320242023
Non-interest income:
Marketplace revenue$39,533 $62,006 $10,946 $7,772 $5,874 $13,005 $56,353 $82,783 
Other non-interest income12,387 21,743 1,903 2,431 (11,930)(21,139)2,360 3,035 
Total non-interest income51,920 83,749 12,849 10,203 (6,056)(8,134)58,713 85,818 
Interest income:
Interest income217,814 210,514 1,820 3,972 — — 219,634 214,486 
Interest expense(90,888)(66,546)(218)(1,288)— — (91,106)(67,834)
Net interest income126,926 143,968 1,602 2,684 — — 128,528 146,652 
Total net revenue178,846 227,717 14,451 12,887 (6,056)(8,134)187,241 232,470 
Provision for credit losses(35,561)(66,611)— 16 — — (35,561)(66,595)
Non-interest expense(126,857)(142,563)(11,457)(16,650)6,056 8,134 (132,258)(151,079)
Income (Loss) before income tax benefit (expense)
16,428 18,543 2,994 (3,747)— — 19,422 14,796 
Income tax benefit (expense) (3,872)(5,429)(647)743 — — (4,519)(4,686)
Net income (loss)
$12,556 $13,114 $2,347 $(3,004)$— $— $14,903 $10,110 
Capital expenditures$12,865 $15,857 $— $— $— $— $12,865 $15,857 
Depreciation and amortization$10,896 $7,073 $2,176 $4,565 $— $— $13,072 $11,638 
77

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		Consolidated Total
Six Months Ended June 30,Six Months Ended June 30,Six Months Ended June 30,Six Months Ended June 30,
20242023202420232024202320242023
Non-interest income:
Marketplace revenue$78,048 $134,694 $20,774 $20,880 $13,422 $22,843 $112,244 $178,417 
Other non-interest income26,082 40,904 3,849 4,984 (25,662)(39,497)4,269 6,391 
Total non-interest income104,130 175,598 24,623 25,864 (12,240)(16,654)116,513 184,808 
Interest income:
Interest income422,621 408,844 4,364 8,055 — — 426,985 416,899 
Interest expense(175,011)(120,442)(558)(3,101)— — (175,569)(123,543)
Net interest income247,610 288,402 3,806 4,954 — — 251,416 293,356 
Total net revenue351,740 464,000 28,429 30,818 (12,240)(16,654)367,929 478,164 
Provision for credit losses(67,488)(137,195)— 16 — — (67,488)(137,179)
Non-interest expense(253,353)(290,946)(23,378)(34,095)12,240 16,654 (264,491)(308,387)
Income (Loss) before income tax benefit (expense)30,899 35,859 5,051 (3,261)— — 35,950 32,598 
Income tax benefit (expense)(7,557)(9,685)(1,240)863 — — (8,797)(8,822)
Net income (loss)
$23,342 $26,174 $3,811 $(2,398)$— $— $27,153 $23,776 
Capital expenditures$24,646 $32,255 $— $— $— $— $24,646 $32,255 
Depreciation and amortization$21,062 $13,967 $4,683 $10,025 $— $— $25,745 $23,992 

The material drivers and trends of the financial results of the segments presented above are consistent with those provided on a consolidated basis in "Results of Operations."

Non-GAAP Financial Measures

To supplement our financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: Pre-Provision Net Revenue (PPNR) and Tangible Book Value (TBV) Per Common Share. Our non-GAAP financial measures do have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP.

We believe these non-GAAP financial measures provide management and investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies.

We believe PPNR is an important measure because it reflects the underlying financial performance of our business operations. PPNR is a non-GAAP financial measure calculated by subtracting the provision for credit losses and income tax benefit/expense from net income.

We believe TBV Per Common Share is an important measure used to evaluate the Company’s use of equity. TBV Per Common Share is a non-GAAP financial measure representing the book value of common equity reduced by goodwill and intangible assets, divided by ending number of common shares issued and outstanding.
78

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 tables provide a reconciliation of PPNR to the nearest GAAP measure:
Three Months EndedSix Months Ended
June 30, 2024March 31, 2024June 30, 2023June 30, 2024June 30, 2023
GAAP Net income$14,903 $12,250 $10,110 $27,153 $23,776 
Less: Provision for credit losses(35,561)(31,927)(66,595)(67,488)(137,179)
Less: Income tax expense
(4,519)(4,278)(4,686)(8,797)(8,822)
Pre-provision net revenue$54,983 $48,455 $81,391 $103,438 $169,777 

Three Months EndedSix Months Ended
June 30, 2024March 31, 2024June 30, 2023June 30, 2024June 30, 2023
Non-interest income$58,713 $57,800 $85,818 $116,513 $184,808 
Net interest income128,528 122,888 146,652 251,416 293,356 
Total net revenue187,241 180,688 232,470 367,929 478,164 
Non-interest expense(132,258)(132,233)(151,079)(264,491)(308,387)
Pre-provision net revenue54,983 48,455 81,391 103,438 169,777 
Provision for credit losses(35,561)(31,927)(66,595)(67,488)(137,179)
Income before income tax expense
19,422 16,528 14,796 35,950 32,598 
Income tax expense
(4,519)(4,278)(4,686)(8,797)(8,822)
GAAP Net income$14,903 $12,250 $10,110 $27,153 $23,776 

The following table provides a reconciliation of TBV Per Common Share to the nearest GAAP measure:
As ofJune 30,
2024		March 31,
2024		June 30,
2023
GAAP common equity$1,287,945 $1,266,286 $1,205,523 
Less: Goodwill(75,717)(75,717)(75,717)
Less: Intangible assets(10,293)(11,165)(14,167)
Tangible common equity$1,201,935 $1,179,404 $1,115,639 
Book value per common share
GAAP common equity$1,287,945 $1,266,286 $1,205,523 
Common shares issued and outstanding111,812,215 111,120,415 108,694,120 
Book value per common share$11.52 $11.40 $11.09 
Tangible book value per common share
Tangible common equity$1,201,935 $1,179,404 $1,115,639 
Common shares issued and outstanding111,812,215 111,120,415 108,694,120 
Tangible book value per common share$10.75 $10.61 $10.26 

Supervision and Regulatory Environment

We are subject to periodic exams, investigations, inquiries or requests, enforcement actions and other proceedings from federal and state regulatory and/or law enforcement agencies, including the federal banking regulators that directly regulate the Company and/or LC Bank. Further, we are subject to claims, individual and class action lawsuits, and lawsuits alleging regulatory violations. Although historically the Company has generally resolved
79

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)
these matters in a manner that was not materially adverse to its financial results or business operations, no assurance can be given as to the timing, outcome or consequences of any of these matters in the future.

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 Office of the Comptroller of the Currency (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.

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, or be required to obtain a new license or authorization, (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 be compelled to modify or suspend certain of our business practices and/or (vi) be unable to execute on certain Company initiatives, 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 review 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 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 (Basel III). As a 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 requirements under the Basel III capital framework are: a Common Equity Tier 1 (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 (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 banking regulators may require a banking organization to maintain capital at levels higher than the minimum ratios prescribed under the Basel III capital framework. See “Part I – Item 1. Business – Regulation and Supervision – Capital and Liquidity Requirements and Prompt Corrective Action” in our Annual Report and “Notes to Condensed Consolidated Financial Statements – Note 19. Regulatory Requirements” in this Report for additional information.

80

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 summarizes the Company’s and LC Bank’s regulatory capital amounts (in millions) and ratios:
June 30, 2024December 31, 2023
Required Minimum plus Required CCB for
Non-Leverage Ratios
AmountRatioAmountRatio
LendingClub Corporation:
CET1 capital (1)
$1,123.0 17.9 %$1,090.2 17.9 %7.0 %
Tier 1 capital$1,123.0 17.9 %$1,090.2 17.9 %8.5 %
Total capital$1,203.2 19.2 %$1,169.2 19.2 %10.5 %
Tier 1 leverage$1,123.0 12.1 %$1,090.2 12.9 %4.0 %
Risk-weighted assets$6,274.8 N/A$6,104.5 N/AN/A
Quarterly adjusted average assets$9,252.6 N/A$8,476.1 N/AN/A
LendingClub Bank:
CET1 capital (1)
$964.2 15.5 %$949.4 15.8 %7.0 %
Tier 1 capital$964.2 15.5 %$949.4 15.8 %8.5 %
Total capital$1,043.6 16.8 %$1,027.4 17.1 %10.5 %
Tier 1 leverage$964.2 10.5 %$949.4 11.4 %4.0 %
Risk-weighted assets$6,206.4 N/A$6,022.2 N/AN/A
Quarterly adjusted average assets$9,142.1 N/A$8,337.4 N/AN/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.

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.

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 capital benefit of $35 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.

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 LC Bank involves taking deposits and originating 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 borrowings, pay operating expenses and support extraordinary funding requirements when necessary.

81

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 Liquidity

The following table summarizes LC Bank’s primary sources of short-term liquidity as of the periods presented:
June 30, 2024December 31, 2023
Cash and cash equivalents$917,693 $1,230,206 
Securities available for sale (1)
$366,724 $370,466 
Deposits$8,215,812 $7,426,445 
Available borrowing capacity:
FHLB of Des Moines borrowing capacity (2)
$649,783 $661,337 
FRB Discount Window borrowing capacity
$2,345,668 $2,816,501 
Total available borrowing capacity$2,995,451 $3,477,838 
(1)    Excludes illiquid securities available for sale.
(2)    Includes both loans and securities available for sale pledged as collateral.

The primary uses of LC Bank liquidity include the funding/acquisition of loans and securities purchases; withdrawals, maturities and the payment of interest on deposits; compensation and benefits expense; taxes; capital expenditures, including internally developed software, leasehold improvements and computer equipment; and costs associated with the continued development and support of our online lending marketplace platform.

Net capital expenditures were $24.6 million, or 7.0% of total net revenue, and $32.3 million, or 7.0% of total net revenue, for the first halves of 2024 and 2023, respectively. Capital expenditures in 2024 are expected to be approximately $50 million, primarily related to costs associated with the continued development and support of our online lending marketplace platform.

LendingClub Holding Company Liquidity

The primary source of liquidity at the holding company is $136.3 million and $110.3 million in cash and cash equivalents as of June 30, 2024 and December 31, 2023, 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 (including those associated with our office leases), the needs of LC Bank for additional equity and, as required, its need for debt 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, liquid AFS securities, available borrowing capacity, and net cash flows from operating, investing and financing activities are 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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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.

Interest Rate Sensitivity

LendingClub Bank

Our net interest income is affected by changes in the level of interest rates, the impact of interest rate fluctuations on asset prepayments, and the level and composition of deposits and liabilities, among other factors.

Loans HFI at LC Bank are funded primarily through our deposit base. The majority of loans HFI are fixed-rate instruments over the term of the loans. As a result, the primary component of interest rate risk on our financial instruments at LC Bank arises from the impact of fluctuations in loan and deposit rates on our net interest income. Therefore, we use a sensitivity analysis to assess the impact of hypothetical changes in interest rates on our net interest income results. The outcome of the analysis is influenced by a variety of assumptions, including the maturity profile and prepayment level of our unsecured consumer loans and expected consumer responses to changes in rates paid on non-maturity deposit products. Our assumptions are periodically calibrated to observed data and/or expected outcomes. We actively monitor the level of exposure to movements in interest rates and have entered into interest rate hedging instruments, some of which qualify for hedge accounting treatment, to manage such risk. See “Note 8. Derivative Instruments and Hedging Activities” for additional information.

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:
 June 30, 2024December 31, 2023
Instantaneous Change in Interest Rates:
 + 200 basis points(7.3)%(4.8)%
 + 100 basis points(3.5)%(2.2)%
 – 100 basis points1.4 %— %
 – 200 basis points2.4 %(0.4)%

As illustrated in the table above, net interest income is projected to decrease over the next twelve months during hypothetical rising interest rate environments primarily as a result of higher rates paid on interest-bearing deposits, partially offset by higher rates earned on new loans, investment purchases, and cash and cash equivalents as well as by the impact of our hedging activity. Conversely, net interest income is projected to increase over the next twelve months during hypothetical declining interest rate environments. The increase in sensitivity as of June 30, 2024 relative to December 31, 2023 is primarily due to the composition of our loans, deposits and hedging instruments and assumes no replacement of maturing interest rate hedges. Furthermore, during fluctuating interest rate environments, the increased sensitivity of repricing interest-bearing deposits is more impactful than that of repricing fixed-rate loans.

Although we believe that these measurements provide an estimate of our interest rate sensitivity, they do not account for potential changes in credit quality, balance sheet mix, size of our balance sheet, or other business developments that could affect net income. Actual results could differ materially from the estimated outcomes of our simulations.

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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)
For additional details regarding maturities of loans and leases HFI, see “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Risk” in our Annual Report.

For the contractual maturities and weighted-average yields on the Company’s AFS securities portfolio, see “Notes to Condensed Consolidated Financial Statements – Note 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 HFI 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.

Contingencies

For a comprehensive discussion of contingencies as of June 30, 2024, see “Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 18. Commitments and Contingencies.”

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 half of 2024.

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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 Exchange Act) as of June 30, 2024. 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 June 30, 2024, were designed and functioned effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Exchange Act 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

No change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the second quarter of 2024, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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. 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 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.


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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Trading Plans

To diversify his assets, Scott Sanborn, the Company’s Chief Executive Officer, entered into a sales plan in May 2024 that is intended to comply with Rule 10b5-1(c) under the Exchange Act (the Plan). The maximum number of shares that can be sold under the Plan represents 4.2% of Mr. Sanborn’s current equity interest in the Company including his unvested time-based RSUs and unearned PBRSUs at target performance. Any sale(s) executed under the Plan would represent the first sale(s) of Company stock by Mr. Sanborn during his eight years as the Company’s Chief Executive Officer, other than sales in connection with equity related tax obligations.

The following table shows the trading arrangements, including the Plan, intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) adopted by the Company’s directors and executive officers during the second quarter of 2024:
Name and Title
Adoption
Date
Expiration
Date
Aggregate Number of Shares to be Sold
Scott Sanborn, Chief Executive Officer and Director
May 8, 2024
February 7, 2025
Up to 119,000

Other than disclosed above, during the second quarter of 2024, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

Eighth Amended and Restated Certificate of Incorporation

On June 11, 2024, the Company convened its annual meeting of stockholders (the Annual Meeting). At the Annual Meeting, the Company’s stockholders approved an amendment and restatement of the Company’s Restated Certificate of Incorporation, as amended, to limit the personal liability of certain officers of the Company to the extent permitted by Delaware law (the Officer Exculpation Amendment). The Officer Exculpation Amendment had previously been approved, subject to stockholder approval, by the Company’s Board of Directors.

On July 30, 2024, the Company filed an Eighth Amended and Restated Certificate of Incorporation (the Eighth Amended and Restated Certificate) with the Secretary of State of Delaware to, effective immediately, effectuate the Officer Exculpation Amendment and incorporate previous amendments to the Company’s Restated Certificate of Incorporation.

The foregoing description is qualified in its entirety by reference to the Eighth Amended and Restated Certificate, which is filed as Exhibit 3.1 to this Report and is incorporated herein by reference.
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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 DescriptionFormFile No.ExhibitFiling
Date		Filed Herewith
101.INSXBRL Instance Document‡X
101.SCHXBRL Taxonomy Extension Schema DocumentX
101.CALXBRL Taxonomy Extension Calculation LinkbaseX
101.DEFXBRL Taxonomy Extension Definition LinkbaseX
101.LABXBRL Taxonomy Extension Label LinkbaseX
101.PREXBRL Taxonomy Extension Presentation LinkbaseX
104Cover 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.

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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:August 1, 2024/s/ SCOTT SANBORN
Scott Sanborn
Chief Executive Officer
Date:August 1, 2024/s/ ANDREW LABENNE
Andrew LaBenne
Chief Financial Officer

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