LendingClub 10Q 2024 Q2 Quarterly report

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






Municipal securities	3,257		—		(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.

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, 2024	Fair 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 securities	15,321		(182)		194,767		(42,418)		210,088		(42,600)
Other asset-backed securities related to Structured Program transactions	32,936		(285)		—		—		32,936		(285)
U.S. agency securities	2,994		(6)		76,073		(14,382)		79,067		(14,388)
Mortgage-backed securities	9,704		(129)		33,066		(5,964)		42,770		(6,093)
Other asset-backed securities	1,045		—		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, 2023	Fair 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 securities	6,497		(149)		201,426		(37,348)		207,923		(37,497)
U.S. agency securities	—		—		80,104		(13,348)		80,104		(13,348)
Mortgage-backed securities	13,973		(740)		23,103		(4,695)		37,076		(5,435)
Other asset-backed securities	12,911		(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.

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, 2024		Six 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.

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, 2024	Amortized Cost		Fair Value		Weighted- average Yield (1)
Due within 1 year:


U.S. agency securities	$	3,000	$	2,955
Total due within 1 year	3,000		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 transactions	137,910		135,545
U.S. agency securities	7,850		7,520
Mortgage-backed securities	1,649		1,496
Other asset-backed securities	380		381
Municipal securities	154		135
U.S. agency residential mortgage-backed securities	2		2
Total due after 1 year through 5 years	2,448,837		2,457,193		7.82	%
Due after 5 years through 10 years:
U.S. agency securities	21,998		19,854
Other asset-backed securities	13,821		13,811

U.S. agency residential mortgage-backed securities	4,313		4,055
Mortgage-backed securities	2,001		1,678
Municipal securities	465		393
Total due after 5 years through 10 years	42,598		39,791		4.17	%
Due after 10 years:
U.S. agency residential mortgage-backed securities	254,579		212,279
U.S. agency securities	60,607		48,738
Mortgage-backed securities	47,706		42,097
Other asset-backed securities	9,925		9,363
Municipal securities	2,628		1,967
Total due after 10 years	375,445		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.

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, 2024		December 31, 2023
Unsecured personal	$	3,144,504	$	3,726,830
Residential mortgages	178,290		183,050
Secured consumer	244,288		250,039

Total consumer loans held for investment	3,567,082		4,159,919
Equipment finance (1)	83,770		110,992
Commercial real estate	381,873		380,322
Commercial and industrial	195,666		199,069
Total commercial loans and leases held for investment	661,309		690,383
Total 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 (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, 2024		December 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, 2024	Consumer			Commercial			Total
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		%

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	Consumer			Commercial			Total
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.

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,
	2024						2023
	Consumer		Commercial		Total		Consumer		Commercial		Total
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)
Recoveries	11,183		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,
	2024						2023
	Consumer		Commercial		Total		Consumer		Commercial		Total
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)
Recoveries	20,826		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.

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
	2024		2023		2022		2021		2020		Prior		Total
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 investment	284		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
	2024		2023		2022		2021		2020		Prior		Total
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
Current	45,213		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 consumer	45,213		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.

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		2022		2021		2020		2019		Prior		Total
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
Current	125,618		97,084		21,949		—		2,460		—		247,111
30-59 days past due	364		1,295		417		—		—		—		2,076
60-89 days past due	94		373		168		—		—		—		635
90 or more days past due	—		153		64		—		—		—		217
Total secured consumer	126,076		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.

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
	2024		2023		2022		2021		2020		Prior		Total		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 estate	13,288		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 industrial	13,752		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).

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		2022		2021		2020		2019		Prior		Total		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 finance	2,945		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 estate	49,067		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 industrial	40,636		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, 2024	30-59 Days		60-89 Days		90 or More Days		Total Days Past Due		Guaranteed Amount (1)
Equipment finance	$	18	$	—	$	8	$	26	$	—
Commercial real estate	7,422		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, 2023	30-59 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.

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,
	2024			2023			2024			2023





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.

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 Reduction		Permanent Loan Modification		Debt Settlement		Short-term Payment Reduction		Permanent Loan Modification		Debt Settlement
Unsecured personal loans
Current	$	21,215	$	4,317	$	161	$	354	$	1,221	$	10
30-59 days	1,850		177		23		9		36		11
60-89 days	1,526		281		616		4		30		1,829
90 or more days	896		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.

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, 2024				December 31, 2023
	Nonaccrual		Nonaccrual with no related ACL (1)		Nonaccrual		Nonaccrual with no related ACL (1)
Unsecured personal	$	23,825	$	—	$	30,132	$	—
Residential mortgages	305		305		312		312
Secured consumer	257		—		217		—

Total nonaccrual consumer loans held for investment	24,387		305		30,661		312

Equipment finance	—		—		—		—
Commercial real estate	20,443		6,304		9,663		2,187
Commercial and industrial	20,316		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, 2024				December 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 investment	40,759		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.

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, 2024						December 31, 2023
	Consolidated		Unconsolidated		Total		Consolidated		Unconsolidated		Total
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 assets	7		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.

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,

	2024		2023		2024		2023


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 consideration	866,301		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.

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

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.

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, 2024						December 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, 2024		December 31, 2023
Loans held for sale at fair value	$	791,059	$	407,773
Expected remaining weighted-average life (in years)	1.5		1.5
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)

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,
	2024		2023		2024		2023
Fair value at beginning of period	$	550,415	$	44,647	$	407,773	$	110,400
Originations and purchases	1,397,930		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, 2024				December 31, 2023
	Total		90 or more days past due		Total		90 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, 2024						December 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.

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, 2024		December 31, 2023
Loans held for investment at fair value	$	334,642	$	262,190
Expected remaining weighted-average life (in years)	0.9		0.9
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,
	2024		2023		2024		2023
Fair value at beginning of period	$	420,393	$	748,618	$	262,190	$	925,938
Purchases	12,220		—		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, 2024				December 31, 2023
	Total		90 or more days past due		Total		90 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

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, 2024						December 31, 2023
	Minimum		Maximum		Weighted- Average		Minimum		Maximum		Weighted- 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, 2024		December 31, 2023
Fair value of interests held	$	2,312,114	$	1,176,403
Expected remaining weighted-average life (in years)	1.4		1.5
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,
	2024		2023		2024		2023
Fair value at beginning of period	$	1,765,259	$	—	$	1,176,403	$	—
Additions	716,299		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

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, 2024						December 31, 2023
	Minimum		Maximum		Weighted- Average		Minimum		Maximum		Weighted- 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, 2024		December 31, 2023
Fair value of interests held	$	135,545	$	73,393
Expected remaining weighted-average life (in years)	1.4		1.5
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,
	2024		2023		2024		2023
Fair value at beginning of period	$	103,866	$	10,397	$	73,393	$	12,469
Additions	43,887		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

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, 2024						December 31, 2023
	Minimum		Maximum		Weighted- Average		Minimum		Maximum		Weighted- 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, 2024		December 31, 2023
Fair value of servicing assets	$	69,709	$	77,680
Expected remaining weighted-average life (in years)	1.2		1.2
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, 2024			December 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

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,
	2024		2023		2024		2023
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, 2024	Carrying 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 assets	39,329		—		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 liabilities	48,123		—		27,609		20,514		48,123
Total liabilities	$	1,841,066	$	—	$	27,609	$	1,812,202	$	1,839,811


December 31, 2023	Carrying 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 assets	37,605		—		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
Borrowings	6,398		—		—		6,398		6,398

Other liabilities	59,015		—		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.

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, 2024						December 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 caps	200,000		—		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,
	2024		2023		2024		2023
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.

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, 2024				December 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, 2024		Six Months Ended June 30, 2024

Hedged item	$	(1,785)	$	(10,457)
Derivatives used for hedging	1,563		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, 2024				December 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, 2024		December 31, 2023
Software (1)	$	230,752	$	209,260
Leasehold improvements	30,699		30,764
Computer equipment	21,655		21,654
Furniture and fixtures	5,554		5,845
Total property, equipment and software	288,660		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.

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, 2024		December 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
2025	2,901
2026	2,252
2027	1,603
2028	945
Thereafter	885
Total	$	10,293

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, 2024		December 31, 2023
Deferred tax assets, net (1)	$	145,220	$	151,411
Servicing assets (2)	70,152		78,401
Nonmarketable equity investments	44,161		42,891
Accrued interest receivable	39,493		35,793
Operating lease assets	23,027		26,611
Intangible assets, net (3)	10,293		12,135
Other	98,240		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, 2024		December 31, 2023
Interest-bearing deposits:
Savings and money market accounts	$	4,968,644	$	4,349,239
Certificates of deposit	1,792,943		1,714,889
Checking accounts	998,045		937,552
Total	7,759,632		7,001,680
Noninterest-bearing deposits	335,696		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
2025	537,720
2026	4,637
2027	11,099
2028	2,021
Thereafter	3,317
Total certificates of deposit	$	1,792,943

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 less		Over 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, 2024				December 31, 2023
	Available Borrowing Capacity		Pledged Collateral		Available Borrowing Capacity		Pledged 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, 2024		December 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.

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, 2024		December 31, 2023
Accounts payable and accrued expenses	$	60,896	$	54,619
Operating lease liabilities	32,308		37,869
Payable to investors (1)	27,609		36,823


Other	76,490		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,
	2024		2023		2024		2023
RSUs	$	11,573	$	16,383	$	23,555	$	29,973
PBRSUs	(258)		1,762		1,359		2,464

Stock-based compensation expense, gross	11,315		18,145		24,914		32,437
Less: Capitalized stock-based compensation expense	1,866		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
Granted	3,837,787	$	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.

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
Granted	462,060	$	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, 2024		December 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

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, 2024		December 31, 2023
Lease receivables	$	68,006	$	92,546
Unguaranteed residual asset values	23,204		28,913
Unearned income	(7,897)		(11,072)
Deferred fees	457		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
2025	24,919
2026	15,009
2027	7,603
2028	4,044
Thereafter	1,542
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 Liabilities	Balance Sheet Classification	June 30, 2024		December 31, 2023
Operating lease assets	Other assets	$	23,027	$	26,611
Operating lease liabilities	Other liabilities	$	32,308	$	37,869

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,
	2024		2023		2024		2023
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
2025	13,129
2026	7,228
2027	4,265
2028	3,922
Thereafter	909
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 Rate	June 30, 2024		December 31, 2023
Weighted-average remaining lease term (in years)	3.32		3.72
Weighted-average discount rate	4.99	%	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

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.

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, 2024				December 31, 2023				Required Minimum plus Required CCB for Non-Leverage Ratios
	Amount		Ratio		Amount		Ratio
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/A		N/A
Quarterly adjusted average assets	$	9,252.6	N/A		$	8,476.1	N/A		N/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/A		N/A
Quarterly adjusted average assets	$	9,142.1	N/A		$	8,337.4	N/A		N/A

N/A – Not applicable

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

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-

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.

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,
	2024		2023		2024		2023		2024		2023		2024		2023
Non-interest income:
Marketplace revenue	$	39,533	$	62,006	$	10,946	$	7,772	$	5,874	$	13,005	$	56,353	$	82,783
Other non-interest income	12,387		21,743		1,903		2,431		(11,930)		(21,139)		2,360		3,035
Total non-interest income	51,920		83,749		12,849		10,203		(6,056)		(8,134)		58,713		85,818

Interest income:
Interest income	217,814		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 income	126,926		143,968		1,602		2,684		—		—		128,528		146,652

Total net revenue	178,846		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

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,
	2024		2023		2024		2023		2024		2023		2024		2023
Non-interest income:
Marketplace revenue	$	78,048	$	134,694	$	20,774	$	20,880	$	13,422	$	22,843	$	112,244	$	178,417
Other non-interest income	26,082		40,904		3,849		4,984		(25,662)		(39,497)		4,269		6,391
Total non-interest income	104,130		175,598		24,623		25,864		(12,240)		(16,654)		116,513		184,808

Interest income:
Interest income	422,621		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 income	247,610		288,402		3,806		4,954		—		—		251,416		293,356

Total net revenue	351,740		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

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
	June 30, 2024		December 31, 2023		June 30, 2024		December 31, 2023		June 30, 2024		December 31, 2023		June 30, 2024		December 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 value	2,814,383		1,617,309		—		2,953		—		—		2,814,383		1,620,262
Loans held for sale at fair value	791,059		407,773		—		—		—		—		791,059		407,773
Loans and leases held for investment, net	3,999,482		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, net	153,772		144,439		12,378		17,078		—		—		166,150		161,517
Investment in subsidiary	—		—		839,334		816,703		(839,334)		(816,703)		—		—
Goodwill	75,717		75,717		—		—		—		—		75,717		75,717
Other assets	341,643		341,680		107,297		131,135		(18,354)		(17,362)		430,586		455,453
Total assets	9,424,574		8,610,839		1,139,648		1,143,648		(978,172)		(927,024)		9,586,050		8,827,463
Liabilities and Equity
Total deposits	8,215,812		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 liabilities	143,986		154,077		71,671		86,086		(18,354)		(17,362)		197,303		222,801
Total liabilities	8,359,798		7,586,920		77,145		99,042		(138,838)		(110,321)		8,298,105		7,575,641
Total equity	1,064,776		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.

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.

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

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.”

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			2024			2023
Non-interest income	$	58,713		$	57,800		$	85,818		$	116,513		$	184,808
Net interest income	128,528			122,888			146,652			251,416			293,356
Total net revenue	187,241			180,688			232,470			367,929			478,164
Non-interest expense	132,258			132,233			151,079			264,491			308,387
Pre-provision net revenue (1)	54,983			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)
Net income	14,903			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 margin	5.75		%	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 originations	1.47		%	1.47		%	1.19		%	1.47		%	1.18		%

LendingClub Corporation Capital Metrics:
Common equity tier 1 capital ratio	17.9		%	17.6		%	16.1		%
Tier 1 leverage ratio	12.1		%	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 investment	336			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 originations	19		%	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.

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.

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 Ended						Change (%)
	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 income	2,360		1,909		3,035		24	%	(22)	%
Total non-interest income	58,713		57,800		85,818		2	%	(32)	%

Interest income:
Interest on loans held for sale	26,721		14,699		4,433		82	%	503	%
Interest and fees on loans and leases held for investment	124,819		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 sale	42,879		35,347		5,948		21	%	621	%
Other interest income	13,168		16,503		19,134		(20)	%	(31)	%
Total interest income	219,634		207,351		214,486		6	%	2	%

Interest expense:
Interest on deposits	90,193		83,963		66,521		7	%	36	%
Other interest expense (1)	913		500		1,313		83	%	(30)	%
Total interest expense	91,106		84,463		67,834		8	%	34	%

Net interest income	128,528		122,888		146,652		5	%	(12)	%

Total net revenue	187,241		180,688		232,470		4	%	(19)	%

Provision for credit losses	35,561		31,927		66,595		11	%	(47)	%

Non-interest expense:
Compensation and benefits	56,540		59,554		71,553		(5)	%	(21)	%
Marketing	26,665		24,136		23,940		10	%	11	%
Equipment and software	12,360		12,684		13,968		(3)	%	(12)	%
Depreciation and amortization	13,072		12,673		11,638		3	%	12	%
Professional services	7,804		7,091		9,974		10	%	(22)	%
Occupancy	3,941		3,861		4,684		2	%	(16)	%
Other non-interest expense	11,876		12,234		15,322		(3)	%	(22)	%
Total non-interest expense	132,258		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	%

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		2023		Change (%)
Non-interest income:
Marketplace revenue	$	112,244	$	178,417	(37)	%
Other non-interest income	4,269		6,391		(33)	%
Total non-interest income	116,513		184,808		(37)	%

Interest income:
Interest on loans held for sale	41,420		10,190		306	%
Interest and fees on loans and leases held for investment	257,212		312,552		(18)	%
Interest on loans held for investment at fair value (1)	20,456		51,461		(60)	%
Interest on securities available for sale	78,226		9,848		694	%
Other	29,671		32,848		(10)	%
Total interest income	426,985		416,899		2	%

Interest expense:
Interest on deposits	174,156		119,794		45	%
Other interest expense (1)	1,413		3,749		(62)	%
Total interest expense	175,569		123,543		42	%

Net interest income	251,416		293,356		(14)	%

Total net revenue	367,929		478,164		(23)	%

Provision for credit losses	67,488		137,179		(51)	%

Non-interest expense:
Compensation and benefits	116,094		144,860		(20)	%
Marketing	50,801		50,820		—	%
Equipment and software	25,044		27,664		(9)	%
Depreciation and amortization	25,745		23,992		7	%
Professional services	14,895		19,032		(22)	%
Occupancy	7,802		8,994		(13)	%
Other non-interest expense	24,110		33,025		(27)	%
Total non-interest expense	264,491		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).

LENDINGCLUB CORPORATION

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

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

Marketplace Revenue

Marketplace revenue consists of the following:


	Three Months Ended						Change (%)
	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 fees	19,869		19,592		22,015		1	%	(10)	%
Gain on sales of loans	10,748		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,
	2024		2023		Change (%)
Origination fees	$	147,210	$	141,532	4	%
Servicing fees	39,461		48,395		(18)	%
Gain on sales of loans	21,657		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 Ended						Change (%)
	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 investment	335,646		285,322		657,380		18	%	(49)	%
Total loan originations (1)	$	1,812,762	$	1,646,499	$	2,010,514	10	%	(10)	%


	Six Months Ended June 30,
	2024		2023		Change (%)
Marketplace loans	$	2,838,293	$	2,638,782	8	%
Loan originations held for investment	620,968		1,659,369		(63)	%
Total loan originations (1)	$	3,459,261	$	4,298,151	(20)	%

(1) Includes unsecured personal loans and auto loans only.

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 Bank	4,654		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%.

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.

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 value	2,406,767		42,879		7.13	%	1,972,561		35,347		7.17	%	437,473		5,948		5.44	%
Loans held for sale at fair value	838,143		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 cost	4,341,007		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 assets	8,946,119		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 cash	55,906						58,440						78,221
Allowance for loan and lease losses	(245,478)						(291,168)						(354,348)
Other non-interest earning assets	632,253						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 deposit	6,449,061		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 liabilities	7,603,385		91,106		4.82	%	7,151,127		84,463		4.75	%	7,008,333		67,834		3.88	%

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 liabilities	215,608						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 spread					5.00	%					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 value	7,737		(205)		7,532
Loans held for sale at fair value	11,822		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 deposit	4,701		855		5,556
Interest-bearing deposits	5,092		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.

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 value	34,549		2,382		36,931
Loans held for sale at fair value	23,543		(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 deposit	10,259		11,089		21,348
Interest-bearing deposits	8,312		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.

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 value	2,189,664		78,226		7.15	%	400,422		9,848		4.92	%
Loans held for sale at fair value	652,709		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 cost	4,487,519		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 assets	8,746,859		426,985		9.76	%	8,049,913		416,899		10.36	%

Cash and due from banks and restricted cash	57,173						75,067
Allowance for loan and lease losses	(268,323)						(346,398)
Other non-interest earning assets	631,860						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 deposit	6,259,502		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 liabilities	7,377,256		175,569		4.79	%	6,773,080		123,543		3.68	%

Noninterest-bearing deposits	310,315						223,752
Other liabilities	218,076						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 spread					4.98	%					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.

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 value	62,089		6,289		68,378
Loans held for sale at fair value	35,520		(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 deposit	25,159		25,037		50,196
Interest-bearing deposits	19,742		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.

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 Ended						Six Months Ended June 30,
	June 30, 2024		March 31, 2024		June 30, 2023		2024		2023

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.

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 Ended						Six Months Ended June 30,
	June 30, 2024		March 31, 2024		June 30, 2023		2024		2023
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 investment	36,577		29,246		66,190		65,823		137,040

Charge-offs	(78,088)		(90,342)		(64,269)		(168,430)		(116,832)
Recoveries	11,270		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.

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 Ended									Six Months Ended June 30,
	June 30, 2024			March 31, 2024			June 30, 2023			2024			2023


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.

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 Ended						Change (%)
	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)	%
Marketing	26,665		24,136		23,940		10	%	11	%
Equipment and software	12,360		12,684		13,968		(3)	%	(12)	%
Depreciation and amortization	13,072		12,673		11,638		3	%	12	%
Professional services	7,804		7,091		9,974		10	%	(22)	%
Occupancy	3,941		3,861		4,684		2	%	(16)	%
Other non-interest expense	11,876		12,234		15,322		(3)	%	(22)	%
Total non-interest expense	$	132,258	$	132,233	$	151,079	—	%	(12)	%


	Six Months Ended June 30,
	2024		2023		Change (%)
Non-interest expense:
Compensation and benefits	$	116,094	$	144,860	(20)	%
Marketing	50,801		50,820		—	%
Equipment and software	25,044		27,664		(9)	%
Depreciation and amortization	25,745		23,992		7	%
Professional services	14,895		19,032		(22)	%
Occupancy	7,802		8,994		(13)	%
Other non-interest expense	24,110		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.

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.

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.

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

LendingClub Bank

LendingClub Corporation (Parent Only)

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,
	2024		2023		2024		2023		2024		2023		2024		2023
Non-interest income:
Marketplace revenue	$	39,533	$	62,006	$	10,946	$	7,772	$	5,874	$	13,005	$	56,353	$	82,783
Other non-interest income	12,387		21,743		1,903		2,431		(11,930)		(21,139)		2,360		3,035
Total non-interest income	51,920		83,749		12,849		10,203		(6,056)		(8,134)		58,713		85,818

Interest income:
Interest income	217,814		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 income	126,926		143,968		1,602		2,684		—		—		128,528		146,652

Total net revenue	178,846		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

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,
	2024		2023		2024		2023		2024		2023		2024		2023
Non-interest income:
Marketplace revenue	$	78,048	$	134,694	$	20,774	$	20,880	$	13,422	$	22,843	$	112,244	$	178,417
Other non-interest income	26,082		40,904		3,849		4,984		(25,662)		(39,497)		4,269		6,391
Total non-interest income	104,130		175,598		24,623		25,864		(12,240)		(16,654)		116,513		184,808

Interest income:
Interest income	422,621		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 income	247,610		288,402		3,806		4,954		—		—		251,416		293,356

Total net revenue	351,740		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.

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 Ended						Six Months Ended
	June 30, 2024		March 31, 2024		June 30, 2023		June 30, 2024		June 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 Ended						Six Months Ended
	June 30, 2024		March 31, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Non-interest income	$	58,713	$	57,800	$	85,818	$	116,513	$	184,808
Net interest income	128,528		122,888		146,652		251,416		293,356
Total net revenue	187,241		180,688		232,470		367,929		478,164
Non-interest expense	(132,258)		(132,233)		(151,079)		(264,491)		(308,387)
Pre-provision net revenue	54,983		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 of	June 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 outstanding	111,812,215		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 outstanding	111,812,215		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

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.

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, 2024				December 31, 2023				Required Minimum plus Required CCB for Non-Leverage Ratios
	Amount		Ratio		Amount		Ratio
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/A		N/A
Quarterly adjusted average assets	$	9,252.6	N/A		$	8,476.1	N/A		N/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/A		N/A
Quarterly adjusted average assets	$	9,142.1	N/A		$	8,337.4	N/A		N/A

N/A – Not applicable

The higher risk-based capital ratios for the Company reflect generally lower risk-weights for assets held by LendingClub Corporation as compared with LC Bank.

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.

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, 2024		December 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.

LENDINGCLUB CORPORATION

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

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

Market Risk

Market risk represents the risk of potential losses arising from changes in interest rates, foreign exchange rates, equity prices, commodity prices, and/or other relevant market rates or prices. The primary market risk to which we are exposed is interest rate risk. Interest rate risk arises from financial instruments including loans, securities and borrowings, all entered into for purposes other than trading.

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, 2024		December 31, 2023
Instantaneous Change in Interest Rates:
+ 200 basis points	(7.3)	%	(4.8)	%
+ 100 basis points	(3.5)	%	(2.2)	%
– 100 basis points	1.4	%	—	%
– 200 basis points	2.4	%	(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.

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.

LENDINGCLUB CORPORATION

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a comprehensive discussion regarding quantitative and qualitative disclosures about market risk, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Risk.”

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management evaluated, with the participation of the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the 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.

LENDINGCLUB CORPORATION

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.

LENDINGCLUB CORPORATION

Item 6. Exhibits

Exhibit Index

The exhibits noted in the accompanying Exhibit Index are filed or incorporated by reference as a part of this Report and such Exhibit Index is incorporated herein by reference.

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing
Date

Filed Herewith

3 .1

Eighth Amended and Restated Certificate of Incorporation of LendingClub Corporation, effective July 3 0 , 2024

3.2

Amended and Restated Bylaws of the Company, effective March 22, 2018

2014 Employee Stock Purchase Plan, as amended and restated on June 11, 2024

31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document‡

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

‡ The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

LENDINGCLUB CORPORATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LENDINGCLUB CORPORATION

(Registrant)

Date:

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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LendingClub (LC) 10-Q2024 Q2 Quarterly report

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