LendingClub Corp [LC] Filings

10-Q 1 lc-20240630.htm 10-Q lc-20240630

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)


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

595 Market Street, Suite 200,

San Francisco,

94105

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (415) 930-7440

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


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

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

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

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

☐

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

As of July 19, 2024, there were 111,816,791 shares of the registrant’s common stock outstanding.

LENDINGCLUB CORPORATION

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Income	7
	Condensed Consolidated Statements of Comprehensive Income	8
	Condensed Consolidated Statements of Changes in Equity	9
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Condensed Consolidated Financial Statements	12
	Note 1. Summary of Significant Accounting Policies	12
	Note 2. Marketplace Revenue	13
	Note 3. Earnings Per Share	14
	Note 4. Securities Available for Sale	15
	Note 5. Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses	19
	Note 6. Securitizations and Variable Interest Entities	29
	Note 7. Fair Value Measurements	30
	Note 8. Derivative Instruments and Hedging Activities	40
	Note 9. Property, Equipment and Software, net	41
	Note 10. Goodwill and Intangible Assets	42
	Note 11. Other Assets	43
	Note 12. Deposits	43
	Note 13. Borrowings	44
	Note 14. Other Liabilities	45
	Note 15. Employee Incentive Plans	45
	Note 16. Income Taxes	46
	Note 17. Leases	47
	Note 18. Commitments and Contingencies	48
	Note 19. Regulatory Requirements	49
	Note 20. Segment Reporting	51
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	55
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	85
Item 4.	Controls and Procedures	85

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	85
Item 1A.	Risk Factors	85
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	86
Item 3.	Defaults Upon Senior Securities	86
Item 4.	Mine Safety Disclosures	86
Item 5.	Other Information	86
Item 6.	Exhibits	87
Signatures		88

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)
Acquisition			Acquisition of Radius Bancorp, Inc.
AFS			Available for Sale
ALLL			Allowance for Loan and Lease Losses
Annual Report			Annual Report on Form 10-K for the year ended December 31, 2023
ASU			Accounting Standards Update
AUM			Assets Under Management (outstanding balances of Loan Originations serviced by the Company including loans sold to investors as well as loans held for investment and held for sale by the Company)
Balance Sheet			Condensed Consolidated Balance Sheets
CECL			Current Expected Credit Losses (Accounting Standards Update 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments)
CET1			Common Equity Tier 1
CET1 Capital Ratio			Common Equity Tier 1 capital divided by total risk-weighted assets as defined under the Basel III capital framework
DCF			Discounted Cash Flow

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

N/M			Not meaningful
OCC			Office 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


Radius			Radius Bancorp, Inc.





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

Statement of Cash Flow			Condensed Consolidated Statements of Cash Flows


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
VIE			Variable Interest Entity

LENDINGCLUB CORPORATION

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

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.

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 banks	919,020		1,237,511
Total cash and cash equivalents	938,119		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 value	791,059		407,773
Loans and leases held for investment	4,228,391		4,850,302
Allowance for loan and lease losses	(228,909)		(310,387)
Loans and leases held for investment, net	3,999,482		4,539,915
Loans held for investment at fair value (1)(2)	339,222		272,678
Property, equipment and software, net	166,150		161,517
Goodwill	75,717		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-bearing	335,696		331,806
Total deposits	8,095,328		7,333,486
Borrowings (1)(2)	5,474		19,354

Other liabilities (1)	197,303		222,801
Total liabilities	8,298,105		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 equity	1,287,945		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.

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,
	2024		2023		2024		2023
Non-interest income:
Marketplace revenue	$	56,353	$	82,783	$	112,244	$	178,417
Other non-interest income	2,360		3,035		4,269		6,391
Total non-interest income	58,713		85,818		116,513		184,808

Interest income:
Interest on loans held for sale	26,721		4,433		41,420		10,190
Interest and fees on loans and leases held for investment	124,819		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 sale	42,879		5,948		78,226		9,848
Other interest income	13,168		19,134		29,671		32,848
Total interest income	219,634		214,486		426,985		416,899

Interest expense:
Interest on deposits	90,193		66,521		174,156		119,794
Other interest expense (1)	913		1,313		1,413		3,749
Total interest expense	91,106		67,834		175,569		123,543

Net interest income	128,528		146,652		251,416		293,356

Total net revenue	187,241		232,470		367,929		478,164

Provision for credit losses	35,561		66,595		67,488		137,179

Non-interest expense:
Compensation and benefits	56,540		71,553		116,094		144,860
Marketing	26,665		23,940		50,801		50,820
Equipment and software	12,360		13,968		25,044		27,664
Depreciation and amortization	13,072		11,638		25,745		23,992
Professional services	7,804		9,974		14,895		19,032
Occupancy	3,941		4,684		7,802		8,994
Other non-interest expense	11,876		15,322		24,110		33,025
Total non-interest expense	132,258		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 – Basic	111,395,025		107,892,590		111,040,410		107,405,072
Weighted-average common shares – Diluted	111,466,497		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.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(In Thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
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.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Changes in Equity

(In Thousands, Except Share Data)

(Unaudited)



	Common Stock		Additional Paid-in Capital				Accumulated Other Comprehensive Loss	Accumulated Deficit	Total Equity
		Shares			Amount
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 plans		691,800	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 Stock		Additional Paid-in Capital				Accumulated Other Comprehensive Loss	Accumulated Deficit	Total Equity
		Shares			Amount
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 plans		1,401,613	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 Stock		Additional Paid-in Capital				Accumulated Other Comprehensive Loss	Accumulated Deficit	Total Equity
		Shares			Amount
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 plans		1,233,386	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 Stock		Additional Paid-in Capital				Accumulated Other Comprehensive Loss	Accumulated Deficit	Total Equity
		Shares			Amount
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 plans		2,147,125	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.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023
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 adjustments	96,084		38,856
Change in fair value of loan servicing assets	35,296		29,650
Gain on sales of loans	(21,657)		(27,346)
Provision for credit losses	67,488		137,179
Accretion of loan deferred fees and costs	(36,686)		(50,292)
Stock-based compensation, net	20,993		27,716


Depreciation and amortization	25,745		23,992

Other, net	1,258		(6,363)

Net change to loans held for sale	(1,980,860)		(138,347)






Net change in operating assets and liabilities:

Other assets	8,257		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 sale	309,956		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 activities	703,850		(257,898)
Cash Flows from Financing Activities:
Net change in deposits	773,171		450,559






Principal payments on borrowings (1)	(14,211)		(88,498)





















Other financing activities	(8,534)		(13,066)
Net cash provided by financing activities	750,426		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.

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 cash	31,332		41,644
Total cash, cash equivalents and restricted cash	$	969,451	$	1,294,148

See Notes to Condensed Consolidated Financial Statements.

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.

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.

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,
	2024		2023		2024		2023
Origination fees	$	77,131	$	70,989	$	147,210	$	141,532
Servicing fees	19,869		22,015		39,461		48,395
Gain on sales of loans	10,748		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,
	2024		2023		2024		2023
Basic EPS:
Net income attributable to stockholders	$	14,903	$	10,110	$	27,153	$	23,776
Weighted-average common shares – Basic	111,395,025		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 – Diluted	111,466,497		107,895,072		111,076,938		107,409,129
Diluted EPS	$	0.13	$	0.09	$	0.24	$	0.22

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, 2024	Amortized 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 securities	258,894		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 securities	93,455		—		(14,388)		—		79,067
Mortgage-backed securities	51,356		8		(6,093)		—		45,271
Other asset-backed securities	24,126		30		(601)		—		23,555
Municipal securities	3,247		—		(752)		—		2,495

Total securities available for sale (2)	$	2,869,880	$	11,452	$	(64,866)	$	(2,083)	$	2,814,383


December 31, 2023	Amortized 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 securities	261,885		208		(37,497)		224,596
U.S. agency securities	93,452		—		(13,348)		80,104
Other asset-backed securities related to Structured Program transactions (1)	70,662		2,731		—		73,393
Mortgage-backed securities	42,511		—		(5,435)		37,076
Other asset-backed securities	26,710		25		(634)		26,101

LendingClub Corp [LC] Filings
10-Q	[2024-08-01]
10-Q	[2024-05-01]
10-K	[2024-02-16]
10-Q	[2023-10-30]
10-Q	[2023-07-31]
10-Q	[2023-05-02]
10-K	[2023-02-09]
10-Q	[2022-11-01]
10-Q	[2022-08-01]
10-Q	[2022-05-04]
10-K	[2022-02-11]
10-Q	[2021-11-03]
10-Q	[2021-08-04]
10-Q	[2021-05-07]
10-K	[2021-03-11]
10-Q	[2020-11-05]
10-Q	[2020-08-05]
10-Q	[2020-05-06]
10-K	[2020-02-19]
10-Q	[2019-11-06]
10-Q	[2019-08-07]
10-Q	[2019-05-08]
10-K	[2019-02-20]
10-Q	[2018-11-07]
10-Q	[2018-08-08]
10-Q	[2018-05-09]
10-K	[2018-02-22]
10-Q	[2017-11-08]
10-Q	[2017-08-08]
10-Q	[2017-05-05]
10-K	[2017-02-28]
10-Q	[2016-11-09]
10-Q	[2016-08-09]
10-Q	[2016-05-16]
10-K	[2016-02-22]
10-Q	[2015-11-03]
10-Q	[2015-08-05]
10-Q	[2015-05-05]
10-K	[2015-02-27]
10-Q	[2014-11-05]
S-1	[2014-08-27]
10-Q	[2014-08-14]
S-1	[2014-05-29]
10-Q	[2014-05-15]
10-K	[2014-03-31]
10-Q	[2013-11-14]
10-Q	[2013-08-09]
10-Q	[2013-05-15]
10-K	[2013-04-01]
10-Q	[2012-11-14]
10-Q	[2012-08-14]
10-K	[2012-06-29]
10-Q	[2012-02-14]