| Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements The following table summarizes, by level within the fair value hierarchy, the estimated fair values of our assets and liabilities measured at fair value on a recurring basis in the unaudited condensed consolidated balance sheets: September 30, 2022 December 31, 2021 Fair Value Fair Value Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Investments in AFS debt securities (1) $ 136,116 $ 59,017 $ — $ 195,133 $ 129,835 $ 65,072 $ — $ 194,907 Loans at fair value — — 10,924,056 10,924,056 — — 5,952,972 5,952,972 Servicing rights — — 168,438 168,438 — — 168,259 168,259 Asset-backed bonds (2) — 174,838 — 174,838 — 253,669 — 253,669 Residual investments (2) — — 86,834 86,834 — — 121,019 121,019 Non-securitization investments – ETFs — — — — 1,486 — — 1,486 Third party warrants (3) — — 630 630 — — 1,369 1,369 Derivative assets (4)(5) — 5,953 — 5,953 — 5,444 — 5,444 Purchase price earn-out (6) — — 124 124 — — 4,272 4,272 IRLCs (7) — — — — — — 3,759 3,759 Student loan commitments (7) — — — — — — 2,220 2,220 Interest rate caps (5) — 8,060 — 8,060 — 493 — 493 Digital assets safeguarding asset (8) — 132,456 — 132,456 — — — — Total assets $ 136,116 $ 380,324 $ 11,180,082 $ 11,696,522 $ 131,321 $ 324,678 $ 6,253,870 $ 6,709,869 Liabilities Residual interests classified as debt $ — $ — $ 45,734 $ 45,734 $ — $ — $ 93,682 $ 93,682 Derivative liabilities (4)(5) — 21,746 — 21,746 196 668 — 864 IRLCs (7) — — 927 927 — — — — Student loan commitments (7) — — 1,409 1,409 — — — — Digital assets safeguarding liability (8) — 132,456 — 132,456 — — — — Total liabilities $ — $ 154,202 $ 48,070 $ 202,272 $ 196 $ 668 $ 93,682 $ 94,546 _____________________ (1) The investments in AFS debt securities that were classified as Level 2 rely upon observable inputs other than quoted prices, dealer quotes in markets that are not active and implied pricing derived from new issuances of similar securities. See Note 3 for additional information. (2) These assets represent the carrying value of our holdings in VIEs wherein we were not deemed the primary beneficiary. See Note 5 for additional information. (3) The key unobservable assumption used in the fair value measurement of the third party warrants was the price of the stock underlying the warrants. The fair value was measured as the difference between the stock price and the strike price of the warrants. As the strike price was insignificant, we concluded that the impact of time value on the fair value measure was immaterial. (4) For certain derivative instruments for which an enforceable master netting agreement exists, we elected to net derivative assets and derivative liabilities by counterparty. These instruments are presented on a gross basis herein. See Note 1 for additional information. (5) Mortgage pipeline hedges represent TBAs used as economic hedges of loan fair values and are classified as Level 2, as we rely on quoted market prices from similar loan pools that transact in the marketplace. Interest rate swaps and interest rate caps are classified as Level 2, because these financial instruments do not trade in active markets with observable prices, but rely on observable inputs other than quoted prices. As of September 30, 2022, interest rate swaps and interest rate caps were valued using the overnight Secured Overnight Financing Rate (“SOFR”) curve and the implied volatilities suggested by the SOFR rate curve. As of December 31, 2021, interest rate swaps were valued using the three-month LIBOR swap yield curve. These were determined to be observable inputs from active markets. (6) The purchase price earn-out provision is classified as Level 3 because of our reliance on unobservable inputs, such as conditional prepayment rates, annual default rates and discount rates. (7) IRLCs and student loan commitments are classified as Level 3 because of our reliance on assumed loan funding probabilities. The assumed probabilities are based on our internal historical experience with home loans and student loans similar to those in the funding pipelines on the measurement date. (8) The digital assets safeguarding liability and corresponding safeguarding asset are classified as Level 2, because they do not trade in active markets, and are valued using quoted prices on an active exchange that has been identified as the principal market for the underlying digital assets that are being held by our third-party custodians for the benefit of our members. Significant Inputs and Fair Value Rollforwards Loans The following key unobservable assumptions were used in the fair value measurement of our loans: September 30, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Student loans Conditional prepayment rate 16.0% – 23.7% 20.2% 16.5% – 26.3% 19.2% Annual default rate 0.2% – 5.2% 0.5% 0.2% – 4.2% 0.4% Discount rate 3.5% – 9.1% 4.1% 1.9% – 7.1% 2.9% Home loans Conditional prepayment rate 2.3% – 8.1% 6.9% 4.8% – 16.4% 12.4% Annual default rate 0.1% – 0.5% 0.1% 0.1% – 0.2% 0.1% Discount rate 4.5% – 13.0% 5.6% 2.5% – 13.0% 2.6% Personal loans Conditional prepayment rate 17.5% – 46.0% 19.3% 18.4% – 37.7% 20.5% Annual default rate 4.5% – 33.7% 5.0% 4.2% – 30.0% 4.4% Discount rate 5.5% – 10.4% 6.1% 3.9% – 7.0% 4.0% The key assumptions are defined as follows: • Conditional prepayment rate — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate — The annualized rate of borrowers who do not make loan payments on time. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the loans. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. See Note 4 for additional loan fair value disclosures. Servicing Rights Servicing rights for student loans and personal loans do not trade in an active market with readily observable prices. Similarly, home loan servicing rights infrequently trade in an active market. At the time of the underlying loan sale or the assumption of servicing rights, the fair value of servicing rights is determined using a discounted cash flow methodology based on observable and unobservable inputs. Management classifies servicing rights as Level 3 due to the use of significant unobservable inputs in the fair value measurement. The following key unobservable inputs were used in the fair value measurement of our classes of servicing rights: September 30, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Student loans Market servicing costs 0.1% – 0.2% 0.1% 0.1% – 0.2% 0.1% Conditional prepayment rate 15.4% – 23.0% 18.9% 15.2% – 25.6% 20.4% Annual default rate 0.3% – 4.3% 0.4% 0.2% – 4.3% 0.4% Discount rate 7.5% – 7.5% 7.5% 7.3% – 7.3% 7.3% Home loans Market servicing costs 0.1% – 0.1% 0.1% 0.1% – 0.1% 0.1% Conditional prepayment rate 4.9% – 11.0% 5.2% 10.0% – 16.4% 11.5% Annual default rate 0.1% – 0.1% 0.1% 0.1% – 0.2% 0.1% Discount rate 9.0% – 9.0% 9.0% 7.5% – 7.5% 7.5% Personal loans Market servicing costs 0.2% – 0.8% 0.3% 0.2% – 1.1% 0.2% Conditional prepayment rate 17.2% – 44.7% 24.1% 22.5% – 41.4% 26.0% Annual default rate 3.4% – 7.7% 4.7% 3.2% – 7.0% 4.4% Discount rate 7.5% – 7.5% 7.5% 7.3% – 7.3% 7.3% The key assumptions are defined as follows: • Market servicing costs — The fee a willing market participant, which we validate through actual third-party bids for our servicing, would require for the servicing of student loans, home loans and personal loans with similar characteristics as those in our serviced portfolio. An increase in the market servicing cost, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Conditional prepayment rate — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate — The annualized rate of default within the total serviced loan balance. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the servicing rights. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. The following table presents the estimated decrease to the fair value of our servicing rights if the key assumptions had each of the below adverse changes: September 30, 2022 December 31, 2021 Market servicing costs 2.5 basis points increase $ (10,797) $ (10,822) 5.0 basis points increase (21,629) (21,644) Conditional prepayment rate 10% increase $ (4,875) $ (6,260) 20% increase (9,446) (12,031) Annual default rate 10% increase $ (188) $ (205) 20% increase (374) (408) Discount rate 100 basis points increase $ (4,505) $ (3,782) 200 basis points increase (8,716) (7,349) The sensitivity calculations above 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. Additionally, the effect of an adverse variation in a particular assumption on the fair value of our servicing rights is calculated while holding the other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. The following table presents the changes in the Company’s servicing rights: Student Loans Home Loans Personal Loans Total Three Months Ended September 30, 2022 Fair value as of June 30, 2022 $ 84,919 $ 62,166 $ 29,879 $ 176,964 Recognition of servicing from transfers of financial assets 460 3,432 6,789 10,681 Servicing rights assumed from third parties — — 1,062 1,062 Derecognition of servicing — (57) (3,908) (3,965) Change in valuation inputs or other assumptions 4,780 (1,448) 2,850 6,182 Realization of expected cash flows and other changes (9,293) (3,387) (9,806) (22,486) Fair value as of September 30, 2022 $ 80,866 $ 60,706 $ 26,866 $ 168,438 Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 99,601 $ 37,557 $ 22,609 $ 159,767 Recognition of servicing from transfers of financial assets 9,421 8,386 7,529 25,336 Servicing rights assumed from third parties — — 49 49 Derecognition of servicing — — (168) (168) Change in valuation inputs or other assumptions (1,698) 600 1,507 409 Realization of expected cash flows and other changes (11,305) (2,398) (8,216) (21,919) Fair value as of September 30, 2021 $ 96,019 $ 44,145 $ 23,310 $ 163,474 Nine Months Ended September 30, 2022 Fair value as of January 1, 2022 $ 90,003 $ 50,533 $ 27,723 $ 168,259 Recognition of servicing from transfers of financial assets 9,275 12,152 20,872 42,299 Servicing rights assumed from third parties — — 3,008 3,008 Derecognition of servicing (1,072) (57) (4,423) (5,552) Change in valuation inputs or other assumptions 11,779 7,494 7,587 26,860 Realization of expected cash flows and other changes (29,119) (9,416) (27,901) (66,436) Fair value as of September 30, 2022 $ 80,866 $ 60,706 $ 26,866 $ 168,438 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 100,637 $ 23,914 $ 25,046 $ 149,597 Recognition of servicing from transfers of financial assets 49,120 24,292 19,848 93,260 Servicing rights assumed from third parties — — 49 49 Derecognition of servicing (392) — (356) (748) Change in valuation inputs or other assumptions (17,813) 2,146 3,743 (11,924) Realization of expected cash flows and other changes (35,533) (6,207) (25,020) (66,760) Fair value as of September 30, 2021 $ 96,019 $ 44,145 $ 23,310 $ 163,474 Asset-Backed Bonds The fair value of asset-backed bonds is determined using a discounted cash flow methodology. Management classifies asset-backed bonds as Level 2 due to the use of quoted prices for similar assets in markets that are not active, as well as certain factors specific to us. The following key inputs were used in the fair value measurement of our asset-backed bonds: September 30, 2022 December 31, 2021 Discount rate (range) 3.3% – 6.1% 0.6% – 3.7% Conditional prepayment rate (range) 18.7% – 35.6% 19.5% – 32.2% As of the dates indicated, the fair value of our asset-backed bonds was not materially impacted by default assumptions on the underlying securitization loans, as the subordinate residual interests are expected to absorb all estimated losses based on our default assumptions for the respective periods. Residual Investments and Residual Interests Classified as Debt Residual investments and residual interests classified as debt do not trade in active markets with readily observable prices, and there is limited observable market data for reference. The fair values of residual investments and residual interests classified as debt are determined using a discounted cash flow methodology. Management classifies residual investments and residual interests classified as debt as Level 3 due to the use of significant unobservable inputs in the fair value measurements. The following key unobservable inputs were used in the fair value measurements of our residual investments and residual interests classified as debt: September 30, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Residual investments Conditional prepayment rate 18.7% – 36.9% 21.3% 19.5% – 33.6% 23.0% Annual default rate 0.3% – 5.3% 0.8% 0.3% – 5.7% 0.9% Discount rate 4.3% – 10.5% 5.6% 2.6% – 10.5% 4.4% Residual interests classified as debt Conditional prepayment rate 19.0% – 54.7% 27.9% 20.0% – 41.8% 31.5% Annual default rate 0.5% – 6.0% 2.4% 0.5% – 5.6% 3.2% Discount rate 6.5% – 9.5% 7.0% 5.0% – 9.5% 5.7% The key assumptions are defined as follows: • Conditional prepayment rate — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period for the pool of loans in the securitization. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate — The annualized rate of borrowers who fail to remain current on their loans for the pool of loans in the securitization. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the residual investments and residual interests classified as debt. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. The following table presents the changes in the residual investments and residual interests classified as debt. We record changes in fair value within noninterest income—securitizations in the unaudited condensed consolidated statements of operations and comprehensive income (loss), a portion of which is subsequently reclassified to interest expense—securitizations and warehouses for residual interests classified as debt and to interest income—securitizations for residual investments, but does not impact the liability or asset balance, respectively. Residual Investments Residual Interests Classified as Debt Three Months Ended September 30, 2022 Fair value as of June 30, 2022 $ 94,978 $ 54,436 Change in valuation inputs or other assumptions (1) 664 1,453 Payments (2) (8,808) (10,155) Fair value as of September 30, 2022 $ 86,834 $ 45,734 Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 143,100 $ 112,545 Additions 6,360 — Change in valuation inputs or other assumptions (1) 2,230 5,593 Payments (2) (20,189) (14,240) Fair value as of September 30, 2021 $ 131,501 $ 103,898 Nine Months Ended September 30, 2022 Fair value as of January 1, 2022 $ 121,019 $ 93,682 Change in valuation inputs or other assumptions (1) 1,716 7,078 Payments (2) (35,901) (55,026) Fair value as of September 30, 2022 $ 86,834 $ 45,734 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 139,524 $ 118,298 Additions 44,528 2,170 Change in valuation inputs or other assumptions (1) 9,082 19,261 Payments (2) (61,633) (35,831) Fair value as of September 30, 2021 $ 131,501 $ 103,898 ___________________ (1) For residual investments, the estimated amounts of gains and losses included in earnings attributable to changes in instrument-specific credit risk were immaterial during the periods presented. (2) Payments of residual investments included residual investment sales of $490 and $710 during the three and nine months ended September 30, 2022, respectively, and $1,615 and $4,291 during the three and nine months ended September 30, 2021, respectively. Loan Commitments We classify student loan commitments as Level 3 because the assets do not trade in an active market with readily observable prices and, as such, our valuations utilize significant unobservable inputs. Additionally, we classify IRLCs as Level 3, as our IRLCs are inherently uncertain and unobservable given that a home loan origination is contingent on a plethora of factors. The following key unobservable inputs were used in the fair value measurements of our IRLCs and student loan commitments: September 30, 2022 December 31, 2021 Range Weighted Average Range Weighted Average IRLCs Loan funding probability (1) 26.0% – 56.0% 42.7% 75.0% – 75.0% 75.0% Student loan commitments Loan funding probability (1) 95.0% – 95.0% 95.0% 95.0% – 95.0% 95.0% ___________________ (1) The aggregate amount of student loans we committed to fund was $69,977 as of September 30, 2022. See Note 1 under “Derivative Financial Instruments” for the aggregate notional amount associated with IRLCs. The key assumption is defined as follows: • Loan funding probability — Our expectation of the percentage of IRLCs or student loan commitments which will become funded loans. A significant difference between the actual funded rate and the assumed funded rate at the measurement date could result in a significantly higher or lower fair value measurement of our IRLCs and student loan commitments. An increase in the loan funding probabilities, in isolation, would result in an increase in a fair value measurement. The weighted average assumptions were weighted based on relative fair values. The following table presents the changes in our IRLCs and student loan commitments. Changes in the fair values are recorded within noninterest income—loan origination and sales in the unaudited condensed consolidated statements of operations and comprehensive income (loss). IRLCs Student Loan Commitments Three Months Ended September 30, 2022 Fair value as of June 30, 2022 $ 1,120 $ (254) Revaluation adjustments (927) (1,409) Funded loans (1) (477) 22 Unfunded loans (1) (643) 232 Fair value as of September 30, 2022 $ (927) $ (1,409) Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 7,760 $ — Revaluation adjustments 4,569 4,190 Funded loans (1) (5,458) — Unfunded loans (1) (2,302) — Fair value as of September 30, 2021 $ 4,569 $ 4,190 Nine Months Ended September 30, 2022 Fair value as of January 1, 2022 $ 3,759 $ 2,220 Revaluation adjustments (2,846) (1,640) Funded loans (1) (1,042) (2,118) Unfunded loans (1) (798) 129 Fair value as of September 30, 2022 $ (927) $ (1,409) Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 15,620 $ — Revaluation adjustments 19,447 4,190 Funded loans (1) (20,943) — Unfunded loans (1) (9,555) — Fair value as of September 30, 2021 $ 4,569 $ 4,190 ___________________ (1) For the quarter-to-date periods presented, funded and unfunded loan fair value adjustments represent the unpaid principal balance of funded and unfunded loans, respectively, during the quarter multiplied by the IRLC or student loan commitment price in effect at the beginning of the quarter. For the year-to-date periods presented, amounts represent the summation of the per-quarter effects. Purchase Price Earn-Out We recognize a derivative asset for a purchase price earn-out in conjunction with a loan sale agreement we entered in 2018. We receive a capped contractual payout based on the respective loan pool internal rate of return over a certain hurdle rate, which is adjusted for the loan purchaser’s expenses, which are generally immaterial. The fair value of the purchase price earn-out is determined using a discounted cash flow methodology. Management classifies the purchase price earn-out as Level 3 due to the use of significant unobservable inputs in the fair value measurement. A significant difference between the expected performance of the loans included in the loan sale agreement and the actual results as of the measurement date could result in a higher or lower fair value measurement. Our key valuation inputs were as follows: Purchase Price Earn-Out September 30, 2022 December 31, 2021 Conditional prepayment rate 21.6% 22.9% Annual default rate 33.7% 30.0% Discount rate 25.0% 25.0% The key assumptions are defined as follows: • Conditional prepayment rate — The monthly annualized proportion of the principal of the pool of loans included in the loan sale agreement that is assumed to be paid off prematurely. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. • Annual default rate — The annualized rate of borrowers who fail to remain current on their loans for the pool of loans included in the loan sale agreement. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. • Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the purchase price earn-out derivative. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The following table presents the changes in our purchase price earn-out. Changes in the fair value are recorded within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Purchase Price Earn-Out Three Months Ended September 30, 2022 Fair value as of June 30, 2022 $ 625 Payments (553) Changes in valuation inputs or assumptions (1) 52 Fair value as of September 30, 2022 $ 124 Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ — Initial recognition 7,165 Payments (1,754) Fair value as of September 30, 2021 $ 5,411 Nine Months Ended September 30, 2022 Fair value as of January 1, 2022 $ 4,272 Payments (5,242) Changes in valuation inputs or assumptions (1) 1,094 Fair value as of September 30, 2022 $ 124 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ — Initial recognition 7,165 Payments (1,754) Fair value as of September 30, 2021 $ 5,411 ___________________ (1) The estimated amount of losses included in earnings attributable to changes in instrument-specific credit risk were immaterial during all periods presented. The losses attributable to instrument-specific credit risk were estimated by incorporating our current default and loss severity assumptions for the purchase price earn-out. These assumptions are based on historical performance and performance expectations over the term of the underlying instrument. Safeguarding Assets and Liabilities The following table presents the significant digital assets held by our third-party custodians on behalf of our members: September 30, 2022 Bitcoin (BTC) $ 51,834 Ethereum (ETH) 45,707 Cardano (ADA) 8,949 Solana (SOL) 4,305 Ethereum Classic (ETC) 4,063 Dogecoin (DOGE) 4,060 Litecoin (LTC) 1,982 All other (1) 11,556 Digital assets safeguarding liability and corresponding safeguarding asset $ 132,456 ___________________ (1) Includes 24 digital assets, none of which were determined to be individually significant. Financial Instruments Not Measured at Fair Value The following table summarizes the carrying values and estimated fair values, by level within the fair value hierarchy, of our assets and liabilities that are not measured at fair value on a recurring basis in the unaudited condensed consolidated balance sheets: Fair Value Carrying Value Level 1 Level 2 Level 3 Total September 30, 2022 Assets Cash and cash equivalents (1) $ 935,159 $ 935,159 $ — $ — $ 935,159 Restricted cash and restricted cash equivalents (1) 326,274 326,274 — — 326,274 Loans at amortized cost (2) 280,347 — — 293,620 293,620 Total assets $ 1,541,780 $ 1,261,433 $ — $ 293,620 $ 1,555,053 Liabilities Time deposits (3) $ 512,515 $ — $ 512,412 $ — $ 512,412 Debt (4) 4,568,523 815,400 3,390,506 — 4,205,906 Total liabilities $ 5,081,038 $ 815,400 $ 3,902,918 $ — $ 4,718,318 December 31, 2021 Assets Cash and cash equivalents (1) $ 494,711 $ 494,711 $ — $ — $ 494,711 Restricted cash and restricted cash equivalents (1) 273,726 273,726 — — 273,726 Loans at amortized cost (2) 115,912 — — 118,412 118,412 Total assets $ 884,349 $ 768,437 $ — $ 118,412 $ 886,849 Liabilities Debt (4) $ 3,947,983 $ 1,240,560 $ 2,807,253 $ — $ 4,047,813 Total liabilities $ 3,947,983 $ 1,240,560 $ 2,807,253 $ — $ 4,047,813 ___________________ (1) The carrying amounts of our cash and cash equivalents and restricted cash and restricted cash equivalents approximate their fair values due to the short-term maturities and highly liquid nature of these accounts. (2) The fair value of our credit card loans was based on market factors and credit factors specific to our portfolio. The fair value of our commercial and consumer banking loans was determined using a discounted cash flow model with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults. (3) The fair value of our time-based deposits is estimated by a discounted cash flow method using rates currently offered for deposits of similar remaining maturities. (4) The carrying value of our debt is net of unamortized discounts and debt issuance costs. The fair value of our convertible notes was classified as Level 1, as it was based on an observable market quote. The fair values of our warehouse facility debt and revolving credit facility debt were classified as Level 2 and based on market factors and credit factors specific to these financial instruments. The fair value of our securitization debt was classified as Level 2 and valued using a discounted cash flow model, with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults and prepayments. Nonrecurring Fair Value Measurements Non-securitization investments — Other of $22,798 and $6,054 as of September 30, 2022 and December 31, 2021, respectively, include investments for which fair values are not readily determinable, which we elect to measure using the measurement alternative method of accounting. The fair value measurements are classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs in the fair value measurements. Adjustments to the carrying value, such as impairments and unrealized gains, are recognized within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). In the first quarter of 2022, we measured a former equity method investment under the measurement alternative method, which primarily drove the increase in the balance from year end. The fair value of this investment was $19,739 as of September 30, 2022. In the second quarter of 2022, we wrote off an investment with a carrying value of $2,168 for a loss, which reflected the impact of observable market changes. We had previously recognized a gain of $3,967 on this investment during the second quarter of 2021, which reflected a value based on the investee’s latest round of financing in an orderly transaction in an issuance similar to our investment holding. In that same quarter in 2021, we sold a portion of our investment for $2,000 at the same valuation. In the nine months ended September 30, 2022, we made net downward adjustments of $827 to an investment with a fair value of $1,059 as of September 30, 2022 and $1,886 as of December 31, 2021. We also had another investment with a fair value of $2,000 as of both September 30, 2022 and December 31, 2021 for which no adjustments were made during 2022. |
