LendingClub Corp - Quarter Report: 2022 September (Form 10-Q)

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 September 30, 2022

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) 632-5600

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 October 27, 2022, there were 105,088,696 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	3
	Condensed Consolidated Statements of Income	5
	Condensed Consolidated Statements of Comprehensive Income (Loss)	7
	Condensed Consolidated Statements of Changes in Equity	8
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	82
Item 4.	Controls and Procedures	82

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	82
Item 1A.	Risk Factors	82
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	83
Item 3.	Defaults Upon Senior Securities	83
Item 4.	Mine Safety Disclosures	83
Item 5.	Other Information	84
Item 6.	Exhibits	85
Signatures		86

Glossary

The following is a list of common acronyms and terms LendingClub Corporation regularly uses in its financial reporting:



Acquisition			Acquisition of Radius Bancorp, Inc.
AFS			Available for Sale
ACL			Allowance for Credit Losses (includes both the allowance for loan and lease losses and the reserve for unfunded lending commitments)
ALLL			Allowance for Loan and Lease Losses
Annual Report			Annual Report on Form 10-K for the year ended December 31, 2021
ASU			Accounting Standards Update
AUM			Assets Under Management (outstanding balances of Loan Originations serviced by the Company including loans serviced for others as well as loans held for investment and held for sale by the Company)
Balance Sheet			Condensed Consolidated Balance Sheets
LC Bank or LendingClub Bank			LendingClub Bank, National Association
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 U.S. Basel III capital framework
DCF			Discounted Cash Flow

EPS			Net Income (Loss) 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
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
Parent			LendingClub Corporation (the parent company of LendingClub Bank, National Association and other subsidiaries)

PPP Loans			Loans originated pursuant to the U.S. Small Business Administration’s Paycheck Protection Program

Radius			Radius Bancorp, Inc.


ROA			Return on Average Total Assets
ROE			Return on Average Equity

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

Structured Program transactions			Asset-backed securitization transactions and Certificate Program transactions (CLUB and Levered certificates), 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 U.S. 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 U.S. 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 U.S. 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:

•our ability to integrate LC Bank and the timing and ability to realize the expected financial and strategic benefits of the acquisition of Radius Bancorp, Inc.;

•our ability to attract new members, to expand our product offerings and services, to improve revenue and generate recurring earnings, to capture expense benefits, to increase resiliency, and to enhance regulatory clarity;

•our ability, and that of third-party partners or providers, to address stricter or heightened regulatory or supervisory requirements and expectations;

•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 COVID-19 and our ability to effectuate, and the effectiveness of, certain operational and strategic initiatives in light of COVID-19;

•our ability to successfully navigate the current economic climate;

•our ability to sustain the business under adverse circumstances;

•the effects of natural disasters, public health crises, acts of war or terrorism and other external events on our customers and business, including the Ukrainian-Russian conflict;

•the impact of changes in laws or the regulatory or supervisory environment, including as a result of legislation, regulation, policies or changes in government officials or other personnel;

•the impact of changes in monetary, fiscal, or trade laws or policies, including as a result of actions by governmental agencies, central banks, or supranational authorities;

•the impact of new 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, 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, and that of third-party partners or providers, to maintain an enterprise risk management framework that is effective in mitigating risk;

•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;

•our ability to attract and retain loan borrowers;

•our ability to develop and maintain a strong core deposit base or other low-cost funding sources necessary to fund our activities;

•the impact of changes in consumer spending, borrowing and saving habits;

•the impact of the continuation of or changes in the short-term and long-term interest rate environment;

•our expectations on the interplay among origination volume, underwriting standards and interest rates;

LENDINGCLUB CORPORATION

•the ability of borrowers to repay loans and the plans of borrowers;

•our ability to maintain investor confidence in the operation of our platform;

•our ability to retain existing sources and secure new or additional sources of investor commitments for our platform;

•the performance of our loan products and expected rates of return for investors;

•platform volume, pricing and balance;

•the effectiveness of our platform’s credit scoring models;

•our ability to innovate and the adoption and success of new products and services;

•the adequacy of our corporate governance, risk-management framework and compliance programs;

•the impact of, and our ability to resolve, pending litigation and governmental inquiries and investigations;

•the use of our own capital to purchase loans and the impact of holding loans on and our ability to sell loans off our balance sheet;

•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;

•our ability, and that of third-party partners and providers, to maintain service and quality expectations;

•capital expenditures;

•our compliance with contractual obligations or restrictions;

•the potential impact of macro-economic developments, including recessions, inflation or other adverse circumstances;

•our ability to develop and maintain effective internal controls;

•our ability to recruit and retain quality employees to support current operations and future growth;

•changes in the effectiveness and reliability of our information technology and computer systems, including the impact of any security or privacy breach;

•the impact of expense initiatives and our ability to control our cost structure;

•our ability to manage and repay our indebtedness; and

•other risk factors listed from time to time in reports we file with the United States Securities and Exchange Commission (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, 2021, 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)


	September 30, 2022		December 31, 2021
Assets
Cash and due from banks	$	23,211	$	35,670
Interest-bearing deposits in banks	929,630		651,456
Total cash and cash equivalents	952,841		687,126
Restricted cash (1)	66,285		76,460
Securities available for sale at fair value ($415,726 and $256,170 at amortized cost, respectively)	359,157		263,530
Loans held for sale (includes $90,058 and $142,370 at fair value, respectively) (1)	90,058		391,248
Loans and leases held for investment	4,806,927		2,899,126
Allowance for loan and lease losses	(303,201)		(144,389)
Loans and leases held for investment, net	4,503,726		2,754,737
Retail and certificate loans held for investment at fair value (1)	87,144		229,719
Other loans held for investment at fair value (1)	15,057		21,240
Property, equipment and software, net	129,957		97,996
Goodwill	75,717		75,717
Other assets (1)	495,132		302,546
Total assets	$	6,775,074	$	4,900,319
Liabilities and Equity
Deposits:
Interest-bearing	$	4,868,132	$	2,919,203
Noninterest-bearing	255,374		216,585
Total deposits	5,123,506		3,135,788
Short-term borrowings	4,803		27,780
Advances from Paycheck Protection Program Liquidity Facility (PPPLF)	91,671		271,933
Retail notes, certificates and secured borrowings at fair value (1)	87,144		229,719
Payable on Structured Program borrowings (1)	11,185		65,451
Other long-term debt	15,300		15,455
Other liabilities (1)	320,055		303,951
Total liabilities	5,653,664		4,050,077
Equity
Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, $0.01 par value; 180,000,000 shares authorized; 105,088,761 and 101,043,924 shares issued and outstanding, respectively	1,051		1,010
Additional paid-in capital	1,611,627		1,559,616
Accumulated deficit	(451,336)		(717,430)
Treasury stock, at cost; 7,751 and 0 shares, respectively	(98)		—
Accumulated other comprehensive income (loss)	(39,834)		7,046


Total equity	1,121,410		850,242
Total liabilities and equity	$	6,775,074	$	4,900,319

(1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below.

LENDINGCLUB CORPORATION

Condensed Consolidated Balance Sheets (Continued)

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)

The following table presents the assets and liabilities of consolidated VIEs, which are included in the Condensed Consolidated Balance Sheets (Balance Sheet) above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation.


	September 30, 2022		December 31, 2021
Assets of consolidated VIEs, included in total assets above
Restricted cash	$	8,600	$	13,462
Loans held for sale at fair value	—		41,734
Retail and certificate loans held for investment at fair value	2,940		10,281
Other loans held for investment at fair value	6,375		20,929
Other assets	218		584
Total assets of consolidated VIEs	$	18,133	$	86,990
Liabilities of consolidated VIEs, included in total liabilities above
Retail notes, certificates and secured borrowings at fair value	$	2,940	$	10,281
Payable on Structured Program borrowings	11,185		65,451
Other liabilities	39		467
Total liabilities of consolidated VIEs	$	14,164	$	76,199

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Non-interest income:
Marketplace revenue	$	173,837	$	174,556	$	560,187	$	408,018
Other non-interest income	7,400		6,322		24,739		18,670
Total non-interest income	181,237		180,878		584,926		426,688

Interest income:
Interest on loans held for sale	5,879		8,536		20,459		22,387
Interest and fees on loans and leases held for investment	124,028		57,644		324,381		112,013
Interest on retail and certificate loans held for investment at fair value	3,685		12,172		15,745		48,448
Interest on other loans held for investment at fair value	791		973		2,015		3,674
Interest on securities available for sale	3,820		3,180		12,757		7,954
Other interest income	5,017		355		7,984		701
Total interest income	143,220		82,860		383,341		195,177

Interest expense:
Interest on deposits	15,184		1,899		24,700		4,612
Interest on short-term borrowings	87		849		939		3,116
Interest on retail notes, certificates and secured borrowings	3,685		12,172		15,745		48,448
Interest on Structured Program borrowings	225		2,120		1,349		7,996
Interest on other long-term debt	363		532		1,026		1,306
Total interest expense	19,544		17,572		43,759		65,478

Net interest income	123,676		65,288		339,582		129,699

Total net revenue	304,913		246,166		924,508		556,387

Provision for credit losses	82,739		37,524		205,814		93,651

Non-interest expense:
Compensation and benefits	84,916		73,304		251,629		209,649
Marketing	46,031		50,782		162,608		105,434
Equipment and software	12,491		10,297		35,998		27,471
Occupancy	5,051		6,486		17,279		19,543
Depreciation and amortization	10,681		10,549		32,277		33,823
Professional services	11,943		11,750		40,487		34,873
Other non-interest expense	15,106		15,607		46,531		42,373
Total non-interest expense	186,219		178,775		586,809		473,166

Income (Loss) before income tax benefit (expense)	35,955		29,867		131,885		(10,430)
Income tax benefit (expense)	7,243		(2,682)		134,209		(98)
Net income (loss)	$	43,198	$	27,185	$	266,094	$	(10,528)

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Income (Continued)

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss)	$	43,198	$	27,185	$	266,094	$	(10,528)
Net income (loss) per share: (1)
Basic EPS – common stockholders	$	0.41	$	0.27	$	2.59	$	(0.11)
Diluted EPS – common stockholders	$	0.41	$	0.26	$	2.56	$	(0.11)
Weighted-average common shares – Basic	104,215,594		99,073,507		102,838,645		96,531,725
Weighted-average common shares – Diluted	105,853,938		106,108,662		104,116,240		96,531,725

Basic EPS – preferred stockholders	$	—	$	—	$	—	$	(0.11)
Diluted EPS – preferred stockholders	$	—	$	—	$	—	$	(0.11)
Weighted-average common shares, as converted – Basic	—		—		—		873,217
Weighted-average common shares, as converted – Diluted	—		—		—		873,217

(1) See “Notes to Condensed Consolidated Financial Statements – Note 3. Net Income (Loss) Per Share” for additional information.

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In Thousands)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss)	$	43,198	$	27,185	$	266,094	$	(10,528)
Other comprehensive income (loss):
Net unrealized gain (loss) on securities available for sale	(24,112)		1,106		(63,929)		4,496
Other comprehensive income (loss), before tax	(24,112)		1,106		(63,929)		4,496
Income tax effect (1)	(6,121)		—		(17,049)		—
Other comprehensive income (loss), net of tax	(17,991)		1,106		(46,880)		4,496
Total comprehensive income (loss)	$	25,207	$	28,291	$	219,214	$	(6,032)

(1) Income tax effect for the three and nine months ended September 30, 2022 after the release in the second quarter of 2022 of the valuation allowance against the deferred tax asset on available for sale securities.

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Changes in Equity

(In Thousands, Except Share Data)

(Unaudited)



	Preferred Stock			Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Equity
	Shares	Amount		Shares	Amount				Shares	Amount
Balance at June 30, 2022	—	$	—	103,630,776	$	1,036	$	1,594,458	—	$	—	$	(21,843)	$	(494,534)	$	1,079,117
Stock-based compensation	—	—		—	—		18,757		—	—		—		—		18,757
Net issuances under equity incentive plans, net of tax (1)	—	—		1,457,985	15		(1,588)		7,751	(98)		—		—		(1,671)



Net unrealized loss on securities available for sale, net of tax	—	—		—	—		—		—	—		(17,991)		—		(17,991)

Net income	—	—		—	—		—		—	—		—		43,198		43,198
Balance at September 30, 2022	—	$	—	105,088,761	$	1,051	$	1,611,627	7,751	$	(98)	$	(39,834)	$	(451,336)	1,121,410


	Preferred Stock			Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Equity
	Shares	Amount		Shares	Amount				Shares	Amount
Balance at December 31, 2021	—	$	—	101,043,924	$	1,010	$	1,559,616	—	$	—	$	7,046	$	(717,430)	$	850,242
Stock-based compensation	—	—		—	—		55,608		—	—		—		—		55,608
Net issuances under equity incentive plans, net of tax (1)	—	—		4,044,837	41		(3,597)		7,751	(98)		—		—		(3,654)



Net unrealized loss on securities available for sale, net of tax	—	—		—	—		—		—	—		(46,880)		—		(46,880)

Net income	—	—		—	—		—		—	—		—		266,094		266,094
Balance at September 30, 2022	—	$	—	105,088,761	$	1,051	$	1,611,627	7,751	$	(98)	$	(39,834)	$	(451,336)	$	1,121,410

	Preferred Stock			Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Income		Accumulated Deficit		Total Equity
	Shares	Amount		Shares	Amount				Shares	Amount
Balance at June 30, 2021	—	$	—	98,601,148	$	986	$	1,530,314	4,251	$	(92)	$	4,874	$	(773,723)	$	762,359
Stock-based compensation	—	—		—	—		17,971		—	—		—		—		17,971
Net issuances under equity incentive plans, net of tax	—	—		1,181,044	12		(3,843)		—	—		—		—		(3,831)



Net unrealized gain on securities available for sale, net of tax	—	—		—	—		—		—	—		1,106		—		1,106
Net income	—	—		—	—		—		—	—		—		27,185		27,185
Balance at September 30, 2021	—	$	—	99,782,192	$	998	$	1,544,442	4,251	$	(92)	$	5,980	$	(746,538)	$	804,790

	Preferred Stock			Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Income		Accumulated Deficit		Total Equity
	Shares	Amount		Shares	Amount				Shares	Amount
Balance at December 31, 2020	43,000	$	—	88,149,510	$	881	$	1,457,816	—	$	—	$	1,484	$	(736,010)	$	724,171
Stock-based compensation	—	—		—	—		52,637		—	—		—		—		52,637
Net issuances under equity incentive plans, net of tax (1)	—	—		3,571,568	36		(7,392)		4,251	(92)		—		—		(7,448)
Net issuances of stock related to acquisition (2)	—	—		3,761,114	38		41,424		—	—		—		—		41,462
Exchange of preferred stock for common stock	(43,000)	—		4,300,000	43		(43)		—	—		—		—		—

Net unrealized gain on securities available for sale, net of tax	—	—		—	—		—		—	—		4,496		—		4,496
Net loss	—	—		—	—		—		—	—		—		(10,528)		(10,528)
Balance at September 30, 2021	—	$	—	99,782,192	$	998	$	1,544,442	4,251	$	(92)	$	5,980	$	(746,538)	$	804,790

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Changes in Equity (Continued)

(In Thousands, Except Share Data)

(Unaudited)


	Preferred Stock			Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Equity
	Shares	Amount		Shares	Amount				Shares	Amount
Balance at December 31, 2019	—	$	—	88,757,406	$	892	$	1,467,882	461,391	$	(19,550)	$	(565)	$	(548,472)	$	900,187
Stock-based compensation	—	—		—	—		51,492		—	—		—		—		51,492
Net issuances under equity incentive plans, net of tax (1)	—	—		2,744,469	27		(6,067)		5,658	(71)		—		—		(6,111)
Issuance of preferred stock in exchange for common stock	149,904	1		(14,990,481)	(150)		(50,055)		—	—		—		—		(50,204)
Retirement of treasury stock	—	—		—	(4)		(19,617)		(467,049)	19,621		—		—		—
Net unrealized loss on securities available for sale, net of tax	—	—		—	—		—		—	—		(589)		—		(589)
Net loss	—	—		—	—		—		—	—		—		(160,883)		(160,883)
Balance at September 30, 2020 (3)	149,904	$	1	76,511,394	$	765	$	1,443,635	—	$	—	$	(1,154)	$	(709,355)	$	733,892

(1) Includes shares that were transferred to the Company to satisfy payment of all or a portion of the exercise price in connection with the exercise of stock options.

(2) Stock issued as part of the consideration paid related to the Acquisition.

(3) The first nine months of 2020 is presented to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2020-06. See “Note 1. Summary of Significant Accounting Policies” for additional information.

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)


	Nine Months Ended September 30,
	2022		2021
Cash Flows from Operating Activities:
Net income (loss)	$	266,094	$	(10,528)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net fair value adjustments	(24,277)		6,714
Provision for credit losses	205,814		93,651
Change in fair value of loan servicing assets	53,928		39,584
Accretion of loan deferred fees and costs(1)	(63,486)		(24,996)
Stock-based compensation, net	50,210		49,321


Depreciation and amortization(1)	32,277		33,823
Gain on sales of loans	(76,983)		(49,547)
Income tax benefit from release of tax valuation allowance	(140,315)		—
Other, net(1)	515		8,631

Net change to loans held for sale	42,991		(14,756)






Net change in operating assets and liabilities:

Other assets	(11,152)		(7,610)

Other liabilities	6,602		(6,000)




Net cash provided by operating activities	342,218		118,287
Cash Flows from Investing Activities:
Acquisition of company	—		(145,344)
Cash received from acquisition	—		668,236
Net change in loans and leases	(1,630,858)		(1,072,274)
Net decrease in retail and certificate loans	148,963		362,005




Purchases of securities available for sale	(222,534)		(78,914)
Proceeds from sales of securities available for sale	—		106,192
Proceeds from maturities and paydowns of securities available for sale	69,776		108,640
Purchases of property, equipment and software, net	(54,659)		(24,435)

Other investing activities	(5,704)		480

Net cash used for investing activities	(1,695,016)		(75,414)
Cash Flows from Financing Activities:
Net change in demand deposits and savings accounts	1,987,718		809,488
Proceeds from PPPLF	—		325,194
Repayment on PPPLF	(180,262)		(354,211)



Principal payments on retail notes and certificates	(149,115)		(362,160)


Principal payments on Structured Program borrowings	(18,613)		(70,496)


Principal payments on short-term borrowings	(23,396)		(69,163)
Principal payments on long-term debt	—		(2,834)














Other financing activities	(7,994)		(7,448)
Net cash provided by financing activities	1,608,338		268,370
Net Increase in Cash, Cash Equivalents and Restricted Cash	$	255,540	$	311,243
Cash, Cash Equivalents and Restricted Cash, Beginning of Period	$	763,586	$	628,485
Cash, Cash Equivalents and Restricted Cash, End of Period	$	1,019,126	$	939,728

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Cash Flows (Continued)

(In Thousands)

(Unaudited)


	Nine Months Ended September 30,
	2022		2021

Supplemental Cash Flow Information:
Cash paid for interest	$	43,623	$	62,926
Cash paid for income taxes	$	14,003	$	3,295
Cash paid for operating leases included in the measurement of lease liabilities	$	12,394	$	15,895
Non-cash investing activity:
Loans and leases held for investment transferred to loans held for sale	$	—	$	154,082



Non-cash investing and financing activity:

Net issuances of stock related to acquisition	$	—	$	41,462
Non-cash financing activity:
Derecognition of payable to securitization note and residual certificate holders held in consolidated VIE	$	36,072	$	—

(1) Prior period amounts have been reclassified to conform to the current period presentation.

The following presents cash, cash equivalents and restricted cash by category within the Balance Sheet:


	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	952,841	$	687,126
Restricted cash	66,285		76,460
Total cash, cash equivalents and restricted cash	$	1,019,126	$	763,586

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

On February 1, 2021, LendingClub Corporation (LendingClub) completed the acquisition (the Acquisition) of Radius Bancorp, Inc. (Radius), whereby LendingClub became a bank holding company and formed LendingClub Bank, National Association (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. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes 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, 2021 (Annual Report) filed on February 11, 2022.

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 nine-month period ended September 30, 2022.

Adoption of New Accounting Standards

The Company did not adopt any new accounting standards during the nine-month period ended September 30, 2022, except as noted below.

In August 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity including convertible instruments and contracts on an entity’s own equity. The guidance allows for either full or modified retrospective adoption for fiscal periods beginning after December 15, 2021. The Company adopted this ASU on January 1, 2022 under the full retrospective approach. As a result of the adoption, the deemed dividend recorded in the first quarter of 2020 related to the beneficial conversion feature of the convertible Series A Preferred Stock, was reclassified from Accumulated Deficit to Additional Paid-in Capital within Equity, as shown in the following table:


Nine Months Ended September 30, 2020	Additional Paid-in Capital		Accumulated Deficit
Issuance of preferred stock in exchange for common stock, as originally reported	$	149	$	(50,204)
Adoption of ASU 2020-06	(50,204)		50,204
Issuance of preferred stock in exchange for common stock, as adjusted	$	(50,055)	$	—

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

In addition, since the beneficial conversion feature is no longer recorded as a deemed dividend, the allocation of net income (loss) attributable to stockholders and the related Basic and Diluted net income (loss) per share (EPS) has been adjusted, as shown in the following table:


Nine Months Ended September 30, 2020	Common Stock		Preferred Stock
Net income (loss) attributable to stockholders, as originally reported	$	(180,172)	$	19,289
Adoption of ASU 2020-06	42,851		(42,851)
Net loss attributable to stockholders, as adjusted	$	(137,321)	$	(23,562)

Basic and Diluted EPS, as originally reported	$	(2.35)	$	1.46
Adoption of ASU 2020-06	0.56		(3.25)
Basic and Diluted EPS, as adjusted	$	(1.79)	$	(1.79)

The adoption of this ASU did not impact the Company’s financial position and cash flows in the first nine months of 2020, nor did it change net loss reported in the period.

New Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which, if certain criteria are met, provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform. These transactions include contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. The provisions of the new standard are elective and may be applied prospectively upon adoption to reporting periods through December 31, 2022. The FASB has issued an exposure draft that would extend the sunset of the adoption period through December 31, 2024. The Company has not made an election to adopt this ASU and does not expect its impact would be material to the financial statements if adopted in future reporting periods.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors that have adopted the CECL model and amends the guidance on “vintage disclosures” to require disclosure of current period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under Accounting Standards Codification 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. The provisions of this standard are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact of this ASU.

2. Marketplace Revenue

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

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 fair value of servicing assets.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Gain (Loss) 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.

The following table presents components of marketplace revenue for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Origination fees	$	127,142	$	129,125	$	398,487	$	298,486
Servicing fees	23,760		20,819		60,440		66,699
Gain on sales of loans	23,554		21,907		76,983		49,547
Net fair value adjustments	(619)		2,705		24,277		(6,714)
Total marketplace revenue	$	173,837	$	174,556	$	560,187	$	408,018

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

3. Net Income (Loss) Per Share

The following tables detail the computation of the Company’s Basic and Diluted EPS of common stock and Series A Preferred Stock:


Three Months Ended September 30,	2022		2021
	Common Stock			Common Stock
Basic EPS:
Net income attributable to stockholders	$	43,198		$	27,185
Weighted-average common shares – Basic	104,215,594			99,073,507
Basic EPS	$	0.41		$	0.27

Diluted EPS:
Net income attributable to stockholders	$	43,198		$	27,185
Weighted-average common shares – Diluted	105,853,938			106,108,662
Diluted EPS	$	0.41		$	0.26


Nine Months Ended September 30,	2022		2021
	Common Stock			Common Stock		Preferred Stock (1)
Basic EPS:
Net income (loss) attributable to stockholders	$	266,094		$	(10,434)	$	(94)
Weighted-average common shares – Basic	102,838,645			96,531,725		873,217
Basic EPS	$	2.59		$	(0.11)	$	(0.11)

Diluted EPS:
Net income (loss) attributable to stockholders	$	266,094		$	(10,434)	$	(94)
Weighted-average common shares – Diluted	104,116,240			96,531,725		873,217
Diluted EPS	$	2.56		$	(0.11)	$	(0.11)

(1) Presented on an as-converted basis.

There were no weighted-average common shares that were excluded from the Company’s Diluted EPS computation during the third quarters of 2022 and 2021 or during the first nine months of 2022. The following table summarizes the weighted-average common shares that were excluded from the Company’s Diluted EPS computation because their effect would have been anti-dilutive during the first nine months of 2021:




Restricted Stock Units (RSUs) and Performance-based RSUs (PBRSUs)																					3,076,073
Preferred stock																					873,217
Stock options																					139,868
Total																					4,089,158

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, credit valuation allowance, and fair value of available for sale (AFS) securities were as follows:


September 30, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. agency residential mortgage-backed securities	$	260,286	$	—	$	(43,576)	$	216,710
U.S. agency securities	90,445		—		(15,060)		75,385
Commercial mortgage-backed securities	28,007		—		(4,275)		23,732
Other asset-backed securities	19,313		38		(818)		18,533
Asset-backed senior securities	9,154		—		—		9,154
Asset-backed subordinated securities	2,221		5,223		—		7,444
CLUB Certificate asset-backed securities	3,018		2,830		—		5,848
Municipal securities	3,282		—		(931)		2,351

Total securities available for sale (1)	$	415,726	$	8,091	$	(64,660)	$	359,157


December 31, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. agency residential mortgage-backed securities	$	125,985	$	—	$	(2,286)	$	123,699
Asset-backed senior securities	28,057		72		—		28,129
U.S. agency securities	26,902		1		(731)		26,172
Other asset-backed securities	26,112		151		(130)		26,133
Commercial mortgage-backed securities	26,649		1		(552)		26,098
CLUB Certificate asset-backed securities	15,049		3,236		—		18,285
Asset-backed subordinated securities	4,119		7,643		—		11,762






Municipal securities	3,297		—		(45)		3,252
Total securities available for sale (1)	$	256,170	$	11,104	$	(3,744)	$	263,530

(1) As of September 30, 2022 and December 31, 2021, includes $325.9 million and $236.8 million, respectively, of fair value securities pledged as collateral.

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 for which a credit valuation allowance has not been recorded, aggregated by period of continuous unrealized loss, is as follows:


	Less than 12 months				12 months or longer				Total
September 30, 2022	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. agency residential mortgage-backed securities	$	142,629	$	(23,204)	$	74,081	$	(20,372)	$	216,710	$	(43,576)
U.S. agency securities	61,949		(9,608)		13,436		(5,452)		75,385		(15,060)
Commercial mortgage-backed securities	6,388		(1,013)		17,344		(3,262)		23,732		(4,275)
Other asset-backed securities	8,973		(156)		5,388		(662)		14,361		(818)

Municipal securities	—		—		2,351		(931)		2,351		(931)
Total securities with unrealized losses	$	219,939	$	(33,981)	$	112,600	$	(30,679)	$	332,539	$	(64,660)


	Less than 12 months				12 months or longer				Total
December 31, 2021	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. agency residential mortgage-backed securities	$	123,668	$	(2,286)	$	—	$	—	$	123,668	$	(2,286)
U.S. agency securities	24,175		(731)		—		—		24,175		(731)
Other asset-backed securities	13,224		(130)		—		—		13,224		(130)
Commercial mortgage-backed securities	25,927		(552)		—		—		25,927		(552)
Municipal securities	3,252		(45)		—		—		3,252		(45)
Total securities with unrealized losses	$	190,246	$	(3,744)	$	—	$	—	$	190,246	$	(3,744)

There was no activity in the allowance for AFS securities during the third quarter and first nine months of 2022. The following table presents the activity in the allowance for AFS securities, by major security type, during the third quarter and first nine months of 2021:








Credit Valuation Allowance	CLUB Certificate asset-backed securities		Asset-backed subordinated securities		Total
Balance at June 30, 2021	$	(40)	$	(552)	$	(592)

Reversal of credit loss expense	40		456		496
Balance at September 30, 2021	$	—	$	(96)	$	(96)








Credit Valuation Allowance	CLUB Certificate asset-backed securities		Asset-backed subordinated securities		Total
Balance at December 31, 2020	$	(4,190)	$	(14,546)	$	(18,736)
Reversal of credit loss expense	236		3,052		3,288
Reversal of allowance arising from PCD financial assets	3,954		11,398		15,352
Balance at September 30, 2021	$	—	$	(96)	$	(96)

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:


September 30, 2022	Amortized Cost		Fair Value		Weighted- average Yield(1)











Due after 1 year through 5 years:
U.S. agency securities	9,000		8,640
Commercial mortgage-backed securities	1,042		919
Total due after 1 year through 5 years	10,042		9,559		3.33	%
Due after 5 years through 10 years:
U.S. agency residential mortgage-backed securities	6,604		6,093
U.S. agency securities	12,847		11,287
Commercial mortgage-backed securities	2,871		2,367
Other asset-backed securities	649		656
Municipal securities	625		516
Total due after 5 years through 10 years	23,596		20,919		2.63	%
Due after 10 years:
U.S. agency residential mortgage-backed securities	253,682		210,617
U.S. agency securities	68,598		55,458
Commercial mortgage-backed securities	24,094		20,446
Other asset-backed securities	18,664		17,877
Municipal securities	2,657		1,835
Total due after 10 years	367,695		306,233		2.44	%
Asset-backed securities related to Structured Program transactions	14,393		22,446		56.16	%
Total securities available for sale	$	415,726	$	359,157	4.33	%

(1) The weighted-average yield is computed using the amortized cost at September 30, 2022.

There were no sales of AFS securities during the third quarters of 2022 and 2021 or the first nine months of 2022. Proceeds and gross realized gains and losses from sales of AFS securities during the first nine months of 2021 were as follows:


Proceeds	$	106,192
Gross realized gains	$	708
Gross realized losses	$	(952)

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, Net of Allowance For Loan and Lease Losses

LendingClub records certain loans and leases held for investment (HFI) at amortized cost, whereas loans initially classified as held for sale (HFS) are recorded at fair value. Accrued interest receivable is excluded from the amortized cost basis of loans and leases HFI and is reported within “Other assets” on the Balance Sheet. Accrued interest within that caption related to loans and leases HFI was $27.0 million and $15.6 million as of September 30, 2022 and December 31, 2021, respectively.

Loans and Leases Held for Investment

The Company defines its loans and leases HFI portfolio segments as (i) consumer and (ii) commercial. The following tables present the components of each portfolio segment by class of financing receivable:


	September 30, 2022		December 31, 2021
Unsecured personal	$	3,642,254	$	1,804,578
Residential mortgages	197,776		151,362
Secured consumer	180,768		65,976

Total consumer loans held for investment	4,020,798		2,021,916
Equipment finance (1)	167,447		149,155
Commercial real estate	372,406		310,399
Commercial and industrial (2)	246,276		417,656
Total commercial loans and leases held for investment	786,129		877,210
Total loans and leases held for investment	4,806,927		2,899,126
Allowance for loan and lease losses	(303,201)		(144,389)
Loans and leases held for investment, net (3)	$	4,503,726	$	2,754,737

(1) Comprised of sales-type leases for equipment. See “Note 16. Leases” for additional information.

(2) Includes $89.4 million and $268.3 million of pledged loans under the Paycheck Protection Program (PPP) as of September 30, 2022 and December 31, 2021, respectively.

(3) As of September 30, 2022 and December 31, 2021, the Company had $278.4 million and $149.2 million in loans pledged as collateral under the Federal Reserve Bank (FRB) Discount Window, respectively.


September 30, 2022	Gross		ALLL		Net		Allowance Ratios (1)
Total consumer loans held for investment	$	4,020,798	$	288,138	$	3,732,660	7.2	%
Total commercial loans and leases held for investment (2)	786,129		15,063		771,066		1.9	%
Total loans and leases held for investment (2)	$	4,806,927	$	303,201	$	4,503,726	6.3	%


December 31, 2021	Gross		ALLL		Net		Allowance Ratios (1)
Total consumer loans held for investment	$	2,021,916	$	128,812	$	1,893,104	6.4	%
Total commercial loans and leases held for investment (2)	877,210		15,577		861,633		1.8	%
Total loans and leases held for investment (2)	$	2,899,126	$	144,389	$	2,754,737	5.0	%

(1) Calculated as the ratio of allowance for loan and lease losses (ALLL) to loans and leases HFI.

(2) As of September 30, 2022, excluding the $89.4 million of PPP loans, the ALLL represented 2.2% of commercial loans and leases HFI and 6.4% of total loans and leases HFI. As of December 31, 2021, excluding $268.3 million of PPP loans, the ALLL represented 2.6% of commercial loans and leases HFI and 5.5% of total loans and leases HFI. PPP loans are guaranteed by the Small Business Administration (SBA) and, therefore, the Company determined no ACL is required on these loans.

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 ACL by portfolio segment was as follows:


	Three Months Ended September 30,
	2022						2021
	Consumer		Commercial		Total		Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$	228,184	$	15,076	$	243,260	$	54,058	$	17,023	$	71,081
Credit loss expense for loans and leases held for investment	81,935		664		82,599		37,695		(562)		37,133

Charge-offs (1)	(22,944)		(784)		(23,728)		(3,142)		(1,194)		(4,336)
Recoveries	963		107		1,070		20		838		858
Allowance for loan and lease losses, end of period	$	288,138	$	15,063	$	303,201	$	88,631	$	16,105	$	104,736

Reserve for unfunded lending commitments, beginning of period	$	136	$	1,889	$	2,025	$	—	$	390	$	390
Credit loss expense for unfunded lending commitments	(78)		218		140		50		837		887
Reserve for unfunded lending commitments, end of period (2)	$	58	$	2,107	$	2,165	$	50	$	1,227	$	1,277


	Nine Months Ended September 30,
	2022						2021
	Consumer		Commercial		Total		Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$	128,812	$	15,577	$	144,389	$	—	$	—	$	—
Credit loss expense for loans and leases held for investment (3)	203,967		913		204,880		91,194		4,468		95,662
Initial allowance for PCD loans acquired during the period (4)	—		—		—		603		11,837		12,440
Charge-offs (1)	(46,668)		(2,001)		(48,669)		(3,232)		(1,350)		(4,582)
Recoveries	2,027		574		2,601		66		1,150		1,216
Allowance for loan and lease losses, end of period	$	288,138	$	15,063	$	303,201	$	88,631	$	16,105	$	104,736

Reserve for unfunded lending commitments, beginning of period	$	—	$	1,231	$	1,231	$	—	$	—	$	—
Credit loss expense for unfunded lending commitments	58		876		934		50		1,227		1,277
Reserve for unfunded lending commitments, end of period (2)	$	58	$	2,107	$	2,165	$	50	$	1,227	$	1,277

(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 $144.0 million and $115.5 million of unfunded commitments as of September 30, 2022 and 2021, respectively.

(3) Includes $6.9 million of credit loss expense for Radius loans at Acquisition for the first quarter of 2021.

(4) For acquired PCD loans, an ACL of $30.4 million was required with a corresponding increase to the amortized cost basis as of the acquisition date for the first quarter of 2021. For PCD loans where all or a portion of the loan balance had been previously written-off, or would be subject to write-off under the Company’s charge-off

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

policy, an ACL of $18.0 million included as part of the grossed-up loan balance at Acquisition was immediately written-off during the first quarter of 2021. The net impact to the allowance for PCD assets on the acquisition date was $12.4 million for the first quarter of 2021.

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:


September 30, 2022	Term Loans and Leases by Origination Year
	2022		2021		2020		2019		2018		Prior		Total
Unsecured personal
Current	$	2,458,166	$	1,146,225	$	—	$	—	$	—	$	—	$	3,604,391
30-59 days past due	5,758		9,041		—		—		—		—		14,799
60-89 days past due	4,038		8,425		—		—		—		—		12,463
90 or more days past due	2,520		8,081		—		—		—		—		10,601
Total unsecured personal	2,470,482		1,171,772		—		—		—		—		3,642,254
Residential mortgages
Current	43,130		59,682		33,680		21,835		4,573		34,539		197,439
30-59 days past due	—		—		—		—		—		—		—
60-89 days past due	—		—		—		—		—		—		—
90 or more days past due	—		—		—		—		4		333		337
Total residential mortgages	43,130		59,682		33,680		21,835		4,577		34,872		197,776
Secured consumer
Current	133,644		42,910		—		2,563		—		—		179,117
30-59 days past due	596		389		—		—		—		—		985
60-89 days past due	270		234		—		—		—		—		504
90 or more days past due	67		95		—		—		—		—		162
Total secured consumer	134,577		43,628		—		2,563		—		—		180,768






Total consumer loans held for investment	$	2,648,189	$	1,275,082	$	33,680	$	24,398	$	4,577	$	34,872	$	4,020,798

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, 2021	Term Loans and Leases by Origination Year
	2021		2020		2019		2018		2017		Prior		Within Revolving Period		Total
Unsecured personal
Current	$	1,796,678	$	—	$	—	$	—	$	—	$	—	$	—	$	1,796,678
30-59 days past due	3,624		—		—		—		—		—		—		3,624
60-89 days past due	2,600		—		—		—		—		—		—		2,600
90 or more days past due	1,676		—		—		—		—		—		—		1,676
Total unsecured personal	1,804,578		—		—		—		—		—		—		1,804,578
Residential mortgages
Current	36,732		37,620		26,798		7,277		2,682		37,685		1,265		150,059
30-59 days past due	—		—		—		—		—		142		—		142
60-89 days past due	—		—		—		—		92		—		—		92
90 or more days past due	—		—		—		—		251		818		—		1,069
Total residential mortgages	36,732		37,620		26,798		7,277		3,025		38,645		1,265		151,362
Secured consumer
Current	62,731		—		—		—		—		—		10		62,741
30-59 days past due	171		—		—		—		—		—		—		171
60-89 days past due	53		—		—		—		—		—		—		53
90 or more days past due	—		—		—		2,629		382		—		—		3,011
Total secured consumer	62,955		—		—		2,629		382		—		10		65,976






Total consumer loans held for investment	$	1,904,265	$	37,620	$	26,798	$	9,906	$	3,407	$	38,645	$	1,275	$	2,021,916

Commercial Lending Credit Quality Indicators

The Company evaluates the credit quality of its commercial loan portfolio based on regulatory risk ratings. The Company categorizes loans and leases into risk ratings based on relevant information about the quality and realizable value of collateral, if any, and the ability of borrowers to service their debts, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans and leases individually by classifying the loans and leases based on their associated credit risk and performs this analysis whenever credit is extended, renewed or modified, or when an observable event occurs indicating a potential decline in credit quality, and no less than annually for large balance loans. Risk rating classifications consist of the following:

Pass – Loans and leases that the Company believes will fully repay in accordance with the contractual loan terms.

Special Mention – Loans and leases with a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the Company’s credit position at some future date.

Substandard – Loans and leases that are inadequately protected by the current sound worth and paying capacity of the obligator or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or weaknesses that jeopardize the repayment and liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Normal payment from the borrower is in jeopardy, although loss of principal, while still possible, is not imminent.

Doubtful – Loans and leases that have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

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

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 tables present the classes of financing receivables within the commercial portfolio segment by risk rating and origination year:


September 30, 2022	Term Loans and Leases by Origination Year
	2022		2021		2020		2019		2018		Prior		Total
Equipment finance
Pass	$	55,947	$	42,853	$	28,066	$	20,145	$	12,751	$	3,704	$	163,466
Special mention	—		2,198		—		1,603		—		—		3,801
Substandard	—		—		—		—		180		—		180
Doubtful	—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—
Total equipment finance	55,947		45,051		28,066		21,748		12,931		3,704		167,447
Commercial real estate
Pass	84,608		56,575		50,985		52,967		38,941		63,589		347,665
Special mention	—		—		8,415		262		1,242		842		10,761
Substandard	—		—		—		658		2,403		10,364		13,425
Doubtful	—		—		—		—		—		—		—
Loss	—		—		—		—		—		555		555
Total commercial real estate	84,608		56,575		59,400		53,887		42,586		75,350		372,406
Commercial and industrial
Pass	37,626		126,661		26,382		15,190		4,702		12,710		223,271
Special mention	—		176		1,962		1,852		166		473		4,629
Substandard	—		4,746		4,678		3,812		1,668		1,839		16,743
Doubtful	—		—		111		—		—		287		398
Loss	—		—		—		—		6		1,229		1,235
Total commercial and industrial (1)	37,626		131,583		33,133		20,854		6,542		16,538		246,276
Total commercial loans and leases held for investment	$	178,181	$	233,209	$	120,599	$	96,489	$	62,059	$	95,592	$	786,129

(1) Includes $89.4 million of PPP loans.

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, 2021	Term Loans and Leases by Origination Year
	2021		2020		2019		2018		2017		Prior		Within Revolving Period		Total
Equipment finance
Pass	$	52,440	$	35,398	$	26,918	$	15,457	$	6,184	$	8,814	$	—	$	145,211
Special mention	1,531		—		1,810		—		—		—		—		3,341
Substandard	—		—		—		603		—		—		—		603
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total equipment finance	53,971		35,398		28,728		16,060		6,184		8,814		—		149,155
Commercial real estate
Pass	55,613		55,202		54,460		39,981		22,366		57,235		—		284,857
Special mention	—		8,397		—		1,366		1,018		7,242		—		18,023
Substandard	—		—		277		2,496		—		4,179		—		6,952
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		567		—		567
Total commercial real estate	55,613		63,599		54,737		43,843		23,384		69,223		—		310,399
Commercial and industrial
Pass	241,368		108,574		24,106		7,874		14,756		8,058		599		405,335
Special mention	—		—		2,207		463		1,467		40		—		4,177
Substandard	—		1,122		862		1,858		1,525		1,571		87		7,025
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		52		4		1,063		—		1,119
Total commercial and industrial (1)	241,368		109,696		27,175		10,247		17,752		10,732		686		417,656
Total commercial loans and leases held for investment	$	350,952	$	208,693	$	110,640	$	70,150	$	47,320	$	88,769	$	686	$	877,210

(1) Includes $268.3 million of PPP loans.

The following tables present an analysis of the past due loans and leases HFI within the commercial portfolio segment:


September 30, 2022	30-59 Days		60-89 Days		90 or More Days		Total
Equipment finance	$	—	$	—	$	—	$	—
Commercial real estate	—		101		452		553
Commercial and industrial (1)	—		—		1,650		1,650
Total commercial loans and leases held for investment	$	—	$	101	$	2,102	$	2,203


December 31, 2021	30-59 Days		60-89 Days		90 or More Days		Total
Equipment finance	$	—	$	—	$	—	$	—
Commercial real estate	104		—		609		713
Commercial and industrial (1)	—		—		1,410		1,410
Total commercial loans and leases held for investment	$	104	$	—	$	2,019	$	2,123

(1) Past due PPP loans are excluded from the tables.

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

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

believes that the probability of collection does not warrant further accrual, and are charged-off no later than 120 days past due.

The following table presents nonaccrual loans and leases:


	September 30, 2022				December 31, 2021
	Nonaccrual(1)		Nonaccrual with no related ACL(2)		Nonaccrual(1)		Nonaccrual with no related ACL(2)
Unsecured personal	$	10,601	$	—	$	1,676	$	—
Residential mortgages	337		337		1,373		1,373
Secured consumer	162		—		3,011		3,011

Total nonaccrual consumer loans held for investment	11,100		337		6,060		4,384

Equipment finance	180		—		603		—
Commercial real estate	1,013		1,013		989		989
Commercial and industrial	12,214		1,338		2,333		1,061
Total nonaccrual commercial loans and leases held for investment	13,407		2,351		3,925		2,050

Total nonaccrual loans and leases held for investment	$	24,507	$	2,688	$	9,985	$	6,434

(1) Excluding PPP loans, there were no loans and leases that were 90 days or more past due and accruing as of both September 30, 2022 and December 31, 2021.

(2) Subset of total nonaccrual loans and leases.


	September 30, 2022				December 31, 2021
	Nonaccrual		Nonaccrual Ratios (1)		Nonaccrual		Nonaccrual Ratios (1)
Total nonaccrual consumer loans held for investment	$	11,100	0.28	%	$	6,060	0.30	%
Total nonaccrual commercial loans and leases held for investment	13,407		1.71	%	3,925		0.45	%
Total nonaccrual loans and leases held for investment (2)	$	24,507	0.51	%	$	9,985	0.34	%

(1) Calculated as the ratio of nonaccruing loans and leases to loans and leases HFI.

(2) Nonaccruing loans and leases represented 0.52% and 0.38% of total loans and leases HFI, excluding PPP loans, as of September 30, 2022 and December 31, 2021, respectively.

Collateral-Dependent Assets

Certain loans on non-accrual status and certain TDR loans may be considered collateral-dependent loans if the borrower is experiencing financial difficulty and repayment of the loan is expected to be substantially through sale or operation of the collateral. Expected credit losses for the Company’s collateral-dependent loans are calculated as the difference between the amortized cost basis and the fair value of the underlying collateral less costs to sell, if applicable.

Purchased Financial Assets with Credit Deterioration

Acquired loans are recorded at their fair value, which may result in the recognition of a discount or premium. In addition, the purchase price of PCD loans is grossed-up upon acquisition for the initial estimate of ACL. Subsequent changes to the ACLs are recorded as additions to or reversals of credit losses on the Condensed Consolidated Statements of Income (Income Statement).

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

There were no acquired PCD loans during the third quarter and first nine months of 2022 or the third quarter of 2021. Acquired PCD loans during the first nine months of 2021 were as follows:



Purchase price	$	337,118
Allowance for expected credit losses (1)	30,378
Discount attributable to other factors	12,204
Par value	$	379,700

(1) For acquired PCD loans, an ACL of $30.4 million was required with a corresponding increase to the amortized cost basis as of the acquisition date for the first quarter of 2021. For PCD loans where all or a portion of the loan balance had been previously written-off, or would be subject to write-off under the Company’s charge-off policy, an ACL of $18.0 million included as part of the grossed-up loan balance at acquisition was immediately written-off during the first quarter of 2021. The net impact to the allowance for PCD assets on the acquisition date was $12.4 million for the first quarter of 2021.

6. Securitizations and Variable Interest Entities

VIE Assets and Liabilities

The following tables provide the classifications of assets and liabilities on the Balance Sheet for the Company’s transactions with consolidated and unconsolidated VIEs. Additionally, the assets and liabilities in the tables below exclude intercompany balances that eliminate in consolidation:


September 30, 2022	Consolidated VIEs		Unconsolidated VIEs		Total
Assets

Restricted cash	$	8,600	$	—	$	8,600
Securities available for sale at fair value	—		22,445		22,445

Retail and certificate loans held for investment at fair value	2,940		—		2,940
Other loans held for investment at fair value	6,375		—		6,375
Other assets	218		11,351		11,569
Total assets	$	18,133	$	33,796	$	51,929
Liabilities
Retail notes, certificates and secured borrowings at fair value	$	2,940	$	—	$	2,940
Payable on Structured Program borrowings	11,185		—		11,185
Other liabilities	39		—		39
Total liabilities	14,164		—		14,164
Total net assets	$	3,969	$	33,796	$	37,765

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, 2021	Consolidated VIEs		Unconsolidated VIEs		Total
Assets
Restricted cash	$	13,462	$	—	$	13,462
Securities available for sale at fair value	—		58,177		58,177
Loans held for sale at fair value	41,734		—		41,734
Retail and certificate loans held for investment at fair value	10,281		—		10,281
Other loans held for investment at fair value	20,929		—		20,929
Other assets	584		17,156		17,740
Total assets	$	86,990	$	75,333	$	162,323
Liabilities

Retail notes, certificates and secured borrowings at fair value	$	10,281	$	—	$	10,281
Payable on Structured Program borrowings	65,451		—		65,451
Other liabilities	467		—		467
Total liabilities	76,199		—		76,199
Total net assets	$	10,791	$	75,333	$	86,124

Unconsolidated VIEs

The Company’s transactions with unconsolidated VIEs include Structured Program transactions. The Company has various forms of involvement with VIEs, including servicing of loans and holding senior or subordinated residual interests in the VIEs.

The following tables present total unconsolidated VIEs with which the Company has significant continuing involvement, but is not the primary beneficiary:


September 30, 2022	Total VIE Assets		Securities Available for Sale		Other Assets		Net Assets



Carrying value	$	625,017	$	22,445	$	11,351	$	33,796
Total exposure	N/A		$	22,445	$	11,351	$	33,796


December 31, 2021	Total VIE Assets		Securities Available for Sale		Other Assets		Net Assets
Carrying value	$	1,386,279	$	58,177	$	17,156	$	75,333
Total exposure	N/A		$	58,177	$	17,156	$	75,333

N/A – Not applicable

“Total VIE Assets” represents the remaining principal balance of loans held by unconsolidated VIEs. “Net Assets” continue to decline due to the ongoing paydown of loan balances from prior Structured Program transactions. “Securities Available for Sale” and “Other Assets” are the balances on the Balance Sheet related to its involvement with the unconsolidated VIEs. “Other Assets” primarily includes the Company’s servicing assets and servicing receivables. “Total Exposure” refers to the Company’s maximum exposure to loss from its involvement with unconsolidated VIEs. It 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)

The following table summarizes activity related to the Unconsolidated Trusts and Certificate Program trusts, with the transfers accounted for as a sale on the Company’s financial statements:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Principal derecognized from loans securitized or sold	$	—	$	—	$	41,023	$	—
Net gains recognized from loans securitized or sold	$	—	$	—	$	259	$	—
Fair value of asset-backed senior and subordinated securities, and CLUB Certificate asset-backed securities retained upon settlement	$	—	$	—	$	2,180	$	—

Cash proceeds from servicing and other administrative fees on loans securitized or sold	$	1,782	$	5,152	$	7,294	$	19,600
Proceeds from sale of securities by consolidated VIE	$	—	$	—	$	5,320	$	—
Cash proceeds for interest received on senior securities and subordinated securities	$	1,294	$	975	$	6,373	$	6,586

The Company and other investors in the subordinated interests issued by trusts and Certificate Program trusts have rights to cash flows only after the investors holding the senior securities issued by the trusts have first received their contractual cash flows. The investors and the trusts have no direct recourse to the Company’s assets, and holders of the securities issued by the trusts can look only to the assets of the securitization trusts that issued their securities for payment. The beneficial interests held by the Company are subject principally to the credit and prepayment risk stemming from the underlying unsecured personal loans.

Off-Balance Sheet Loans

Off-balance sheet loans pursuant to unconsolidated VIE’s primarily relate to Structured Program transactions for which the Company has some form of continuing involvement, including as servicer.

As of September 30, 2022, the aggregate unpaid principal balance of the off-balance sheet loans related to Structured Program transactions was $574.7 million, of which $16.9 million was attributable to off-balance sheet loans that were 31 days or more past due. As of December 31, 2021, the aggregate unpaid principal balance of the off-balance sheet loans related to Structured Program transactions was $1.3 billion, of which $35.0 million was attributable to off-balance sheet loans that were 31 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.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

7. Fair Value of Assets and Liabilities

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.

Financial Instruments, Assets and Liabilities Recorded at Fair Value

The following tables present the fair value hierarchy for assets and liabilities measured at fair value:


September 30, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Loans held for sale at fair value	$	—	$	—	$	90,058	$	90,058
Retail and certificate loans held for investment at fair value	—		—		87,144		87,144
Other loans held for investment at fair value	—		—		15,057		15,057
Securities available for sale:
U.S. agency residential mortgage-backed securities	—		216,710		—		216,710
U.S. agency securities	—		75,385		—		75,385
Commercial mortgage-backed securities	—		23,732		—		23,732
Asset-backed senior securities and subordinated securities	—		9,154		7,444		16,598
Other asset-backed securities	—		18,533		—		18,533
CLUB Certificate asset-backed securities	—		—		5,848		5,848
Municipal securities	—		2,351		—		2,351

Total securities available for sale	—		345,865		13,292		359,157
Servicing assets	—		—		86,518		86,518
Other assets	—		—		5,437		5,437
Total assets	$	—	$	345,865	$	297,506	$	643,371

Liabilities:
Retail notes, certificates and secured borrowings	$	—	$	—	$	87,144	$	87,144
Payable on Structured Program borrowings	—		—		11,185		11,185
Other liabilities	—		—		11,042		11,042
Total liabilities	$	—	$	—	$	109,371	$	109,371

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, 2021	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Loans held for sale at fair value	$	—	$	—	$	142,370	$	142,370
Retail and certificate loans held for investment at fair value	—		—		229,719		229,719
Other loans held for investment at fair value	—		—		21,240		21,240
Securities available for sale:
U.S. agency residential mortgage-backed securities	—		123,699		—		123,699
Asset-backed senior securities and subordinated securities	—		28,129		11,762		39,891
U.S. agency securities	—		26,172		—		26,172
Other asset-backed securities	—		26,133		—		26,133
Commercial mortgaged-backed securities	—		26,098		—		26,098
CLUB Certificate asset-backed securities	—		—		18,285		18,285
Municipal securities	—		3,252		—		3,252

Total securities available for sale	—		233,483		30,047		263,530
Servicing assets	—		—		67,726		67,726
Other assets	—		2,812		3,312		6,124
Total assets	$	—	$	236,295	$	494,414	$	730,709

Liabilities:
Retail notes, certificates and secured borrowings	$	—	$	—	$	229,719	$	229,719
Payable on Structured Program borrowings	—		—		65,451		65,451
Other liabilities	—		—		12,911		12,911
Total liabilities	$	—	$	—	$	308,081	$	308,081

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 third quarters and first nine months of 2022 or 2021.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Loans Held for Sale at Fair Value

As of both September 30, 2022 and December 31, 2021, the majority of loans HFS were sold shortly after origination and at committed prices. Therefore, the Company is generally not exposed to fair value fluctuations as a result of adverse changes in key assumptions.

Fair Value Reconciliation

The following tables present additional information about Level 3 loans HFS on a recurring basis:


	Outstanding Principal Balance		Valuation Adjustment		Fair Value
Balance at June 30, 2022	$	62,761	$	50	$	62,811
Originations and purchases	2,298,086		—		2,298,086

Sales	(2,264,859)		(188)		(2,265,047)
Principal payments and retirements	(4,592)		—		(4,592)
Charge-offs, net of recoveries	(17)		17		—
Change in fair value recorded in earnings	—		(1,200)		(1,200)
Balance at September 30, 2022	$	91,379	$	(1,321)	$	90,058

	Outstanding Principal Balance		Valuation Adjustment		Fair Value
Balance at December 31, 2021	$	147,193	$	(4,823)	$	142,370
Originations and purchases	7,297,510		—		7,297,510
Transfers to loans held for investment	(11,888)		—		(11,888)
Sales	(7,315,612)		(18,979)		(7,334,591)
Principal payments and retirements	(24,990)		—		(24,990)
Charge-offs, net of recoveries	(834)		(628)		(1,462)
Change in fair value recorded in earnings	—		23,109		23,109
Balance at September 30, 2022	$	91,379	$	(1,321)	$	90,058

	Outstanding Principal Balance		Valuation Adjustment		Fair Value
Balance at June 30, 2021	$	186,988	$	(6,927)	$	180,061
Originations and purchases	2,339,869		—		2,339,869

Sales	(2,342,158)		(85)		(2,342,243)
Principal payments and retirements	(27,211)		—		(27,211)
Charge-offs, net of recoveries	(1,138)		(209)		(1,347)
Change in fair value recorded in earnings	—		3,031		3,031
Balance at September 30, 2021	$	156,350	$	(4,190)	$	152,160

	Outstanding Principal Balance		Valuation Adjustment		Fair Value
Balance at December 31, 2020	$	132,600	$	(10,698)	$	121,902
Originations and purchases	5,320,264		(1,629)		5,318,635

Sales	(5,210,803)		10,568		(5,200,235)
Principal payments and retirements	(78,946)		—		(78,946)
Charge-offs, net of recoveries	(6,765)		3,711		(3,054)
Change in fair value recorded in earnings	—		(6,142)		(6,142)
Balance at September 30, 2021	$	156,350	$	(4,190)	$	152,160

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Retail and Certificate Loans and Related Notes, Certificates and Secured Borrowings

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. At September 30, 2022 and December 31, 2021, the DCF methodology used to estimate the retail note, certificate and secured borrowings’ fair values used the same projected net cash flows as their related loans. Therefore, the fair value adjustments for retail loans held for investment were largely offset by the corresponding fair value adjustments due to the payment dependent design of the retail notes, certificates and secured borrowings.

Servicing Assets

Significant Unobservable Inputs

The following table presents quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for servicing assets relating to loans sold to investors:


	September 30, 2022						December 31, 2021
	Minimum		Maximum		Weighted- Average		Minimum		Maximum		Weighted- Average
Discount rates	7.5	%	16.4	%	10.0	%	7.5	%	16.4	%	10.0	%
Net cumulative expected loss rates (1)	1.0	%	29.8	%	12.7	%	2.4	%	26.4	%	10.2	%
Cumulative expected prepayment rates (1)	30.6	%	47.0	%	39.1	%	32.1	%	45.9	%	38.4	%
Total market servicing rates (% per annum on outstanding principal balance) (2)	0.62	%	0.62	%	0.62	%	0.62	%	0.62	%	0.62	%

(1) Expressed as a percentage of the original principal balance of the loan.

(2) Includes collection fees estimated to be paid to a hypothetical third-party servicer.

Significant Recurring Level 3 Fair Value Input Sensitivity

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:


	September 30, 2022			December 31, 2021
Weighted-average market servicing rate assumptions	0.62		%	0.62		%
Change in fair value from:
Servicing rate increase by 0.10%	$	(11,563)		$	(9,495)
Servicing rate decrease by 0.10%	$	11,563		$	9,495

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 fair value sensitivity of servicing assets to adverse changes in key assumptions:


	September 30, 2022		December 31, 2021
Fair value of Servicing Assets	$	86,518	$	67,726
Discount rates
100 basis point increase	$	(745)	$	(558)
200 basis point increase	$	(1,489)	$	(1,115)
Expected loss rates
10% adverse change	$	(837)	$	(693)
20% adverse change	$	(1,673)	$	(1,386)
Expected prepayment rates
10% adverse change	$	(2,178)	$	(2,401)
20% adverse change	$	(4,356)	$	(4,802)

Fair Value Reconciliation

The following table presents additional information about Level 3 servicing assets measured at fair value on a recurring basis:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Fair value at beginning of period	$	79,427	$	58,728	$	67,726	$	56,347
Issuances (1)	22,319		21,071		73,774		46,274
Change in fair value, included in Marketplace revenue	(14,689)		(14,984)		(52,702)		(39,584)
Other net changes included in Deferred revenue	(539)		(1,242)		(2,280)		536
Fair value at end of period	$	86,518	$	63,573	$	86,518	$	63,573

(1) Represents the gains or losses on sales of the related loans.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Financial Instruments, Assets and Liabilities Not Recorded at Fair Value

The following tables present the fair value hierarchy for financial instruments, assets, and liabilities not recorded at fair value:


September 30, 2022	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Loans and leases held for investment, net	$	4,503,726	$	—	$	—	$	4,786,152	$	4,786,152


Other assets	28,638		—		27,018		1,649		28,667
Total assets	$	4,532,364	$	—	$	27,018	$	4,787,801	$	4,814,819
Liabilities:
Deposits (1)	$	242,126	$	—	$	—	$	242,126	$	242,126




Short-term borrowings	4,803		—		4,803		—		4,803
Advances from PPPLF	91,671		—		—		91,671		91,671
Other long-term debt	15,300		—		—		15,300		15,300


Other liabilities	63,758		—		28,310		35,448		63,758
Total liabilities	$	417,658	$	—	$	33,113	$	384,545	$	417,658


December 31, 2021	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Loans held for sale	$	248,878	$	—	$	—	$	251,101	$	251,101
Loans and leases held for investment, net	2,754,737		—		—		2,964,691		2,964,691
Other assets	18,274		—		15,630		2,644		18,274

Total assets	$	3,021,889	$	—	$	15,630	$	3,218,436	$	3,234,066
Liabilities:
Deposits (1)	$	68,405	$	—	$	—	$	68,405	$	68,405
Short-term borrowings	27,780		—		17,595		10,185		27,780
Advances from PPPLF	271,933		—		—		271,933		271,933
Other long-term debt	15,455		—		—		15,455		15,455
Other liabilities	51,655		—		22,187		29,468		51,655
Total liabilities	$	435,228	$	—	$	39,782	$	395,446	$	435,228

(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. Property, Equipment and Software, Net

Property, equipment and software, net, consist of the following:


	September 30, 2022		December 31, 2021
Software (1)	$	168,545	$	121,102
Leasehold improvements	31,213		37,347
Computer equipment	27,660		29,598
Furniture and fixtures	6,064		8,346
Total property, equipment and software	233,482		196,393
Accumulated depreciation and amortization	(103,525)		(98,397)
Total property, equipment and software, net	$	129,957	$	97,996

(1) Includes $44.9 million and $14.7 million of development in progress for internally-developed software and $10.1 million and $2.5 million of development in progress to customize purchased software as of September 30, 2022 and December 31, 2021, respectively.

Depreciation and amortization expense on property, equipment and software was $9.5 million and $28.3 million for the third quarter and first nine months of 2022, respectively. Depreciation and amortization expense on property, equipment and software was $9.0 million and $29.1 million for the third quarter and first nine months of 2021, respectively.

The Company records the above expenses in “Depreciation and amortization” expense on the Income Statement.

9. Goodwill and Intangible Assets

Goodwill

The Company’s goodwill balance was $75.7 million as of both September 30, 2022 and December 31, 2021. The Company did not record any goodwill impairment expense for the third quarters and first nine months of 2022 and 2021. 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:


	September 30, 2022		December 31, 2021
Gross carrying value	$	54,500	$	54,500
Accumulated amortization	(36,988)		(33,319)
Net carrying value	$	17,512	$	21,181

The customer relationship intangible assets are amortized on an accelerated basis from ten to fourteen years. Amortization expense associated with intangible assets for the third quarter and first nine months of 2022 was $1.2 million and $3.7 million, respectively. Amortization expense associated with intangible assets for the third

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

quarter and first nine months of 2021 was $1.3 million and $3.9 million, respectively. There was no impairment loss for the third quarters and first nine months of 2022 and 2021.

The expected future amortization expense for intangible assets as of September 30, 2022, is as follows:


2022	$	1,178
2023	4,198
2024	3,549
2025	2,901
2026	2,252
Thereafter	3,434
Total	$	17,512

10. Other Assets

Other assets consist of the following:


	September 30, 2022		December 31, 2021
Deferred tax asset, net (1)	$	171,206	$	—
Servicing assets (2)	88,138		70,370
Operating lease assets	69,936		77,316
Nonmarketable equity investments	39,569		31,726
Intangible assets, net (3)	17,512		21,181
Other	108,771		101,953
Total other assets	$	495,132	$	302,546

(1) See “Note 15. Income Taxes” for additional detail.

(2) Loans underlying servicing assets had a total outstanding principal balance of $12.0 billion and $10.3 billion as of September 30, 2022 and December 31, 2021, respectively.

(3) See “Note 9. Goodwill and Intangible Assets” for additional detail.

11. Deposits

Deposits consist of the following:


	September 30, 2022		December 31, 2021
Interest-bearing deposits:
Savings and money market accounts	$	2,486,469	$	856,989
Checking accounts	2,139,537		1,993,809
Certificates of deposit (1)	242,126		68,405
Total	$	4,868,132	$	2,919,203
Noninterest-bearing deposits	255,374		216,585
Total deposits	$	5,123,506	$	3,135,788

(1) Includes $9.7 million and $14.0 million in denominations exceeding the Federal Deposit Insurance Corporation (FDIC) limit of $250 thousand as of September 30, 2022 and December 31, 2021, respectively.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Total certificates of deposit at September 30, 2022 are scheduled to mature as follows:


2022	$	10,496
2023	137,586
2024	75,236
2025	9,336
2026	945
Thereafter	8,527
Total certificates of deposit	$	242,126

12. Short-term Borrowings and Long-term Debt

Short-term Borrowings:

Repurchase Agreements

The Company entered into repurchase agreements pursuant to which the Company sold securities (subject to an obligation to repurchase such securities at a specified future date and price) in exchange for cash. As of September 30, 2022 and December 31, 2021, the Company had $4.8 million and $27.8 million, respectively, in aggregate debt outstanding under its repurchase agreements which is amortized over time through regular principal and interest payments collected from the pledged securities. At September 30, 2022, a majority of the Company’s repurchase agreements have contractual repurchase dates ranging from October 2025 to March 2028. These contractual repurchase dates correspond to either a set repurchase schedule or to the maturity dates of the underlying securities, which have a remaining weighted-average estimated life of less than one year. At September 30, 2022 and December 31, 2021, the repurchase agreements bore interest rates ranging from 4.04% to 6.70% and 3.12% to 6.72%, respectively, which are either fixed or based on a benchmark of the weighted-average interest rate of the securities sold plus a spread. Underlying securities retained and pledged as collateral under repurchase agreements were $5.0 million and $50.5 million at September 30, 2022 and December 31, 2021, respectively.

Long-term Debt:

Advances from PPPLF

As of September 30, 2022 and December 31, 2021, outstanding PPPLF borrowings were $91.7 million and $271.9 million, respectively, and are collateralized by SBA PPP loans originated by the Company. The maturity date of the PPPLF borrowings matches the maturity date of the SBA PPP loans. When loans are forgiven by the SBA, the corresponding PPPLF advance is paid by the Company. The interest rate on the PPPLF borrowings is fixed at 0.35%.

Retail Notes, Certificates, and Secured Borrowings

The Company issued member payment-dependent notes, or retail notes, and certificates as a means to allow investors to invest in the corresponding loans. Investors were able to purchase these retail notes and certificates, where the cash flows to investors were dependent upon principal and interest payments made by borrowers of the underlying unsecured personal loans. As of December 31, 2020, LendingClub ceased offering and selling retail notes and certificates. The total balance of outstanding retail notes and certificates will continue to decline as underlying borrower payments are made. The Company does not assume principal or interest rate risk on loans that were funded by retail notes and certificates because loan balances, interest rates and maturities were matched and offset by an equal balance of notes and certificates with the exact same interest rates and maturities.

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 provides the balances of retail notes, certificates and secured borrowings at fair value as of the periods presented:


	September 30, 2022		December 31, 2021
Retail notes	$	84,203	$	219,435
Certificates and secured borrowings	2,941		10,284

Total retail notes, certificates and secured borrowings	$	87,144	$	229,719

Payable on Structured Program Borrowings

Certificate participations and securities of certain consolidated VIEs held by third-party investors are included in “Payable on Structured Program borrowings” on the Balance Sheet. As of September 30, 2022, these certificate participations and securities totaled $11.2 million and were secured by “Other loans held for investment at fair value” of $6.4 million and restricted cash of $6.2 million. As of December 31, 2021, these certificate participations and securities totaled $65.5 million and were secured by “Other loans held for investment at fair value” and “Loans held for sale” of $62.7 million and restricted cash of $11.2 million.

Other Long-term Debt

The Company has subordinated notes with an outstanding amount of $15.3 million as of both September 30, 2022 and December 31, 2021, which are due June 30, 2027. The rate resets quarterly at a rate equal to 3-month London Interbank Offered Rate (LIBOR) plus 4.64%, with interest payments due quarterly in arrears. The subordinated notes are junior in right to the repayment in full of all existing claims of creditors and depositors of the Company. The subordinated notes may be redeemed quarterly, in whole or in part, at par plus accrued unpaid interest at the option of the Company.

13. Other Liabilities

Other liabilities consist of the following:


	September 30, 2022		December 31, 2021
Accounts payable and accrued expenses	$	92,796	$	100,972

Operating lease liabilities	83,561		91,588
Payable to investors	28,310		22,187


Other	115,388		89,204
Total other liabilities	$	320,055	$	303,951

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

14. Employee Incentive Plans

The Company’s equity incentive plans provide for granting awards, including RSUs, 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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
RSUs and PBRSUs	$	16,737	$	16,691	$	50,164	$	49,130
Stock options	6		118		46		582



Total stock-based compensation expense	$	16,743	$	16,809	$	50,210	$	49,712

The Company capitalized $2.2 million and $5.9 million of stock-based compensation expense associated with developing software for internal use during the third quarter and first nine months of 2022, respectively. The Company capitalized $1.2 million and $3.3 million of stock-based compensation expense associated with developing software for internal use during the third quarter and first nine months of 2021, respectively.

Restricted Stock Units

The following table summarizes the activities for the Company’s RSUs:


	Number of Units	Weighted- Average Grant Date Fair Value
Unvested at December 31, 2021	9,703,751	$	12.44
Granted	5,216,789	$	14.26
Vested	(3,773,222)	$	12.59
Forfeited/expired	(1,351,990)	$	14.09
Unvested at September 30, 2022	9,795,328	$	13.09

During the first nine months of 2022, the Company granted 5,216,789 RSUs with an aggregate fair value of $74.4 million.

As of September 30, 2022, there was $114.5 million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over the next 1.9 years.

Performance-based Restricted Stock Units

PBRSUs are restricted stock unit awards that are earned and eligible for vesting (if applicable) based upon the achievement of certain pre-established performance metrics over a specific performance period. The Company’s outstanding PBRSU awards have a multi-year market-based performance metric with no additional time-based vesting for any earned shares. For PBRSU awards with market-based metrics, the compensation expense of the award is fixed at the time of grant (incorporating the probability of achieving the market-based metrics) and expensed over the performance period.

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 summarizes the activities for the Company’s PBRSUs:


	Number of Units	Weighted- Average Grant Date Fair Value
Unvested at December 31, 2021	1,771,869	$	9.72
Granted	743,074	$	8.83
Vested	(506,696)	$	5.48


Unvested at September 30, 2022	2,008,247	$	10.47

During the first nine months of 2022, the Company granted 743,074 PBRSUs with an aggregate fair value of $6.6 million.

As of September 30, 2022, there was $9.6 million of unrecognized compensation cost related to unvested PBRSUs, which is expected to be recognized over the next 1.2 years.

15. Income Taxes

For the third quarter of 2022, the Company recorded an income tax benefit of $7.2 million, primarily due to the release of a $5.0 million valuation allowance against the Company’s deferred tax assets and a $4.6 million tax credit, partially offset by a $2.4 million state income tax expense. For the first nine months of 2022, the Company recorded an income tax benefit of $134.2 million, primarily due to the release of a $140.3 million valuation allowance against the Company’s deferred tax assets.

For the third quarter of 2021, the Company recorded an income tax expense of $2.7 million, primarily related to income tax expense for state jurisdictions that limit net operating loss utilization. For the first nine months of 2021, the Company recorded an income tax expense of $0.1 million, primarily related to income tax expense for state jurisdictions that limit net operating loss utilization, partially offset by changes in the deferred tax asset valuation allowance resulting from a deferred tax liability assumed with the Acquisition.

The Company has evaluated both positive and negative evidence when assessing the recoverability of its net deferred tax assets. Several factors were considered, which primarily included the Company’s business model transition and resulting increase in profitability and the expectation of continued profitability. These factors resulted in the release of the majority of the Company’s valuation allowance against its deferred tax assets during the second quarter of 2022.

The following table summarizes the Company’s net deferred tax assets:


	September 30, 2022		December 31, 2021
Deferred tax assets (liabilities), net	$	229,269	$	223,367
Valuation allowance	(58,063)		(223,367)
Deferred tax assets, net of valuation allowance	$	171,206	$	—

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

16. 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 third quarter and first nine months of 2022, interest earned on Equipment Finance was $2.5 million and $7.7 million, respectively, and is included in “Interest and fees on loans and leases held for investment” on the Income Statement. For the third quarter and first nine months of 2021, interest earned on Equipment Finance was $2.9 million and $8.1 million, respectively.

The components of Equipment Finance assets are as follows:


	September 30, 2022		December 31, 2021
Lease receivables	$	144,433	$	122,927
Unguaranteed residual asset values	40,375		36,837
Unearned income	(18,253)		(10,989)
Deferred fees	892		380
Total	$	167,447	$	149,155

Future minimum lease payments based on maturity of the Company’s lessor arrangements as of September 30, 2022 were as follows:


2022	$	12,639
2023	47,231
2024	39,093
2025	26,387
2026	15,988
Thereafter	12,412
Total lease payments	$	153,750
Discount effect	(9,317)
Present value of future minimum lease payments	$	144,433

Lessee Arrangements

The Company has operating leases for its headquarters in San Francisco, California, as well as additional office space in the Salt Lake City, Utah, and Boston, Massachusetts areas. As of September 30, 2022, the lease agreements have remaining lease terms ranging from approximately one year to nine years. Some of the lease agreements include options to extend the lease term for up to an additional fifteen years. The Company was the sublessor of a portion of its office space in San Francisco for which lease terms have expired as of June 30, 2022. As of September 30, 2022, the Company pledged $0.4 million of cash and $3.9 million in letters of credit as security deposits in connection with its lease agreements.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Balance sheet information related to leases was as follows:


ROU Assets and Lease Liabilities	Balance Sheet Classification	September 30, 2022		December 31, 2021
Operating lease assets	Other assets	$	69,936	$	77,316
Operating lease liabilities (1)	Other liabilities	$	83,561	$	91,588

(1) The difference between operating lease assets and operating lease liabilities is the unamortized balance of deferred rent.

Components of net lease costs were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
Net Lease Costs	Income Statement Classification	2022		2021		2022		2021
Operating lease costs (1)	Occupancy	$	(3,195)	$	(4,561)	$	(12,041)	$	(14,315)
Sublease revenue	Other non-interest income	—		1,538		2,847		4,612
Net lease costs		$	(3,195)	$	(3,023)	$	(9,194)	$	(9,703)

(1) Includes variable lease costs of $0.2 million and $0.4 million for the third quarters of 2022 and 2021, respectively. Includes variable lease costs of $0.9 million for both the first nine months of 2022 and 2021.

Supplemental cash flow information related to the Company’s operating leases was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Non-cash operating activity:
Leased assets obtained in exchange for new and amended operating lease liabilities (1)	$	—	$	—	$	—	$	12,914

(1) Represents non-cash activity and, accordingly, is not reflected in the Condensed Consolidated Statements of Cash Flows. Amount includes noncash remeasurements of the operating lease ROU asset.

The Company’s future minimum undiscounted lease payments under operating leases as of September 30, 2022 were as follows:


	Operating Lease Payments
2022	$	3,143
2023	12,798
2024	13,054
2025	13,184
2026	13,375
Thereafter	48,974
Total lease payments	$	104,528
Discount effect	(20,967)
Present value of future minimum lease payments	$	83,561

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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	September 30, 2022
Weighted-average remaining lease term (in years)	7.93
Weighted-average discount rate	5.42	%

17. Commitments and Contingencies

Operating Lease Commitments

For discussion regarding the Company’s operating lease commitments, see “Note 16. 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 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 September 30, 2022 and December 31, 2021, the contractual amount of unfunded loan commitments was $144.0 million and $110.8 million, respectively. See “Note 5. Loans and Leases Held for Investment, 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 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. Except as otherwise specifically noted below, at this time, the Company does not believe that it is possible to estimate the reasonably possible losses or a range of reasonably possible losses related to the matters described below.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

Regulatory Examinations and Actions Relating to the Company’s Business Practices and Licensing

The Company is and has been subject to periodic inquiries 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 its manner of operating in accordance with the requirements of its licenses and the regulatory framework applicable to its business.

The Company is routinely subject to examination for compliance with applicable laws and regulations in the states in which it is licensed. The Company is subject to examination by the New York Department of Financial Services (NYDFS) and other regulators. The Company periodically has discussions with various regulatory agencies regarding its business model and has engaged in similar discussions with the NYDFS. During the course of such discussions with the NYDFS, the Company decided to voluntarily comply with certain rules and regulations of the NYDFS while it was not a bank holding company operating a national bank.

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.

In addition to the foregoing, the Company is subject to, and may continue to be subject to, legal proceedings and regulatory actions in the ordinary course of business. No assurances can be given as to the timing, outcome or consequences of any of these matters.

18. 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.

The minimum capital requirements under the Basel Committee on Banking Supervision standardized approach for U.S. banking organizations (U.S. 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 U.S. Basel III capital framework. In this regard, and unless otherwise directed by the FRB and the OCC, we have made commitments for the Company and LC Bank (until February 2024) to maintain a CET1 risk-based capital ratio of 11.0%, a Tier 1 risk-based capital ratio above 11.0%, a total risk-based capital ratio above 13.0%, and a Tier 1 leverage ratio of 11.0%.

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 summarizes LC Bank’s regulatory capital amounts and ratios (in millions):


LendingClub Bank	September 30, 2022				December 31, 2021				Required Minimum plus Required CCB for Non-Leverage Ratios
	Amount		Ratio		Amount		Ratio
CET1 capital (1)	$	760.4	15.2	%	$	523.7	16.7	%	7.0	%
Tier 1 capital	$	760.4	15.2	%	$	523.7	16.7	%	8.5	%
Total capital	$	825.8	16.5	%	$	563.7	18.0	%	10.5	%
Tier 1 leverage	$	760.4	13.4	%	$	523.7	14.3	%	4.0	%
Risk-weighted assets	$	5,018.3	N/A		$	3,130.4	N/A		N/A
Quarterly adjusted average assets	$	5,692.0	N/A		$	3,667.7	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.

The following table presents the regulatory capital and ratios of the Company (in millions):


LendingClub	September 30, 2022				December 31, 2021				Required Minimum plus Required CCB for Non-Leverage Ratios
	Amount		Ratio		Amount		Ratio
CET1 capital (1)	$	953.2	18.3	%	$	710.0	21.3	%	7.0	%
Tier 1 capital	$	953.2	18.3	%	$	710.0	21.3	%	8.5	%
Total capital	$	1,033.2	19.8	%	$	767.9	23.0	%	10.5	%
Tier 1 leverage	$	953.2	15.7	%	$	710.0	16.5	%	4.0	%
Risk-weighted assets	$	5,210.2	N/A		$	3,333.2	N/A		N/A
Quarterly adjusted average assets	$	6,061.4	N/A		$	4,301.7	N/A		N/A

N/A – Not applicable

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 September 30, 2022 and December 31, 2021, the Company’s and LC Bank’s regulatory capital ratios exceeded the thresholds required to be regarded as well-capitalized institutions and met all capital adequacy requirements to which they are subject. There have been no events or conditions since September 30, 2022 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

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

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. Additionally, under the OCC Operating Agreement, LC Bank is required to obtain a written determination of non-objection from the OCC before declaring any dividend. No dividends were declared by LC Bank during the first nine months of 2022 or during 2021. See “Part I – Item 1. Business – Regulation and Supervision – Broad Powers to Ensure Safety and Soundness” in our Annual Report for further discussion regarding the OCC Operating Agreement.

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 ACL 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.

19. Other Non-interest Income and Non-interest Expense

Other non-interest income consists of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Referral revenue	$	3,144	$	4,293	$	10,860	$	9,649
Realized gains (losses) on sales of securities available for sale and other investments	—		—		36		(96)
Other	4,256		2,029		13,843		9,117
Total other non-interest income	$	7,400	$	6,322	$	24,739	$	18,670

Other non-interest expense consists of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Consumer credit services	$	4,610	$	4,266	$	15,804	$	11,798
Other	10,496		11,341		30,727		30,575
Total other non-interest expense	$	15,106	$	15,607	$	46,531	$	42,373

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. Differences between separate entity and consolidated tax returns are eliminated upon consolidation.

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

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.

All of the Company’s revenue is generated in the United States. No individual borrower or investor accounted for 10% or more of consolidated net revenue for any of the periods presented.

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 loans serviced prior to the Acquisition, and interest income and interest expense related to the Retail Program and Structured Program transactions.

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 September 30,				Three Months Ended September 30,				Three Months Ended September 30,				Three Months Ended September 30,
	2022		2021		2022		2021		2022		2021		2022		2021
Non-interest income:
Marketplace revenue	$	153,504	$	151,109	$	9,015	$	23,447	$	11,318	$	—	$	173,837	$	174,556
Other non-interest income	25,240		25,393		4,794		4,140		(22,634)		(23,211)		7,400		6,322
Total non-interest income	178,744		176,502		13,809		27,587		(11,316)		(23,211)		181,237		180,878

Interest income:
Interest income	137,142		64,606		6,078		18,254		—		—		143,220		82,860
Interest expense	(15,277)		(2,270)		(4,267)		(15,302)		—		—		(19,544)		(17,572)
Net interest income	121,865		62,336		1,811		2,952		—		—		123,676		65,288

Total net revenue	300,609		238,838		15,620		30,539		(11,316)		(23,211)		304,913		246,166

(Provision for) reversal of credit losses	(82,739)		(38,019)		—		495		—		—		(82,739)		(37,524)
Non-interest expense	(177,714)		(161,101)		(19,821)		(40,885)		11,316		23,211		(186,219)		(178,775)
Income (Loss) before income tax benefit (expense)	40,156		39,718		(4,201)		(9,851)		—		—		35,955		29,867
Income tax benefit (expense)	(9,440)		(4,670)		16,683		12,607		—		(10,619)		7,243		(2,682)
Net income	$	30,716	$	35,048	$	12,482	$	2,756	$	—	$	(10,619)	$	43,198	$	27,185
Capital expenditures	$	17,301	$	9,451	$	—	$	—	$	—	$	—	$	17,301	$	9,451
Depreciation and amortization	$	4,099	$	1,220	$	6,582	$	9,329	$	—	$	—	$	10,681	$	10,549

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
	Nine Months Ended September 30,		Eight Months Ended September 30,		Nine Months Ended September 30,				Nine Months Ended September 30,		Eight Months Ended September 30,		Nine Months Ended September 30,
	2022		2021		2022		2021		2022		2021		2022		2021
Non-interest income:
Marketplace revenue	$	509,426	$	315,885	$	35,313	$	92,133	$	15,448	$	—	$	560,187	$	408,018
Other non-interest income	64,779		73,433		12,931		12,519		(52,971)		(67,282)		24,739		18,670
Total non-interest income	574,205		389,318		48,244		104,652		(37,523)		(67,282)		584,926		426,688

Interest income:
Interest income	357,117		127,429		26,224		67,748		—		—		383,341		195,177
Interest expense	(25,134)		(5,489)		(18,625)		(59,989)		—		—		(43,759)		(65,478)
Net interest income	331,983		121,940		7,599		7,759		—		—		339,582		129,699

Total net revenue	906,188		511,258		55,843		112,411		(37,523)		(67,282)		924,508		556,387

(Provision for) reversal of credit losses	(205,814)		(96,938)		—		3,287		—		—		(205,814)		(93,651)
Non-interest expense	(552,809)		(374,782)		(71,523)		(165,666)		37,523		67,282		(586,809)		(473,166)
Income (Loss) before income tax benefit (expense)	147,565		39,538		(15,680)		(49,968)		—		—		131,885		(10,430)
Income tax benefit (expense)	(39,113)		7,866		120,274		23,821		53,048		(31,785)		134,209		(98)
Net income (loss)	$	108,452	$	47,404	$	104,594	$	(26,147)	$	53,048	$	(31,785)	$	266,094	$	(10,528)
Capital expenditures	$	54,659	$	22,624	$	—	$	1,811	$	—	$	—	$	54,659	$	24,435
Depreciation and amortization	$	11,109	$	2,810	$	21,168	$	31,013	$	—	$	—	$	32,277	$	33,823

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
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Assets
Total cash and cash equivalents	$	896,519	$	659,919	$	109,200	$	88,268	$	(52,878)	$	(61,061)	$	952,841	$	687,126
Restricted cash	—		—		78,746		76,540		(12,461)		(80)		66,285		76,460
Securities available for sale at fair value	338,096		205,730		21,061		57,800		—		—		359,157		263,530
Loans held for sale	90,058		335,449		—		55,799		—		—		90,058		391,248
Loans and leases held for investment, net	4,503,726		2,754,737		—		—		—		—		4,503,726		2,754,737
Retail and certificate loans held for investment at fair value	—		—		87,144		229,719		—		—		87,144		229,719
Other loans held for investment at fair value	—		—		15,057		21,240		—		—		15,057		21,240
Property, equipment and software, net	89,576		36,424		40,381		61,572		—		—		129,957		97,996
Investment in subsidiary	—		—		671,574		557,577		(671,574)		(557,577)		—		—
Goodwill	75,717		75,717		—		—		—		—		75,717		75,717
Other assets	305,456		254,075		207,556		168,042		(17,880)		(119,571)		495,132		302,546
Total assets	6,299,148		4,322,051		1,230,719		1,316,557		(754,793)		(738,289)		6,775,074		4,900,319
Liabilities and Equity
Total deposits	5,188,845		3,196,929		—		—		(65,339)		(61,141)		5,123,506		3,135,788
Short-term borrowings	165		165		4,638		27,615		—		—		4,803		27,780
Advances from PPPLF	91,671		271,933		—		—		—		—		91,671		271,933
Retail notes, certificates and secured borrowings at fair value	—		—		87,144		229,719		—		—		87,144		229,719
Payable on Structured Program borrowings	—		—		11,185		65,451		—		—		11,185		65,451
Other long-term debt	—		—		15,300		15,455		—		—		15,300		15,455
Other liabilities	205,814		218,775		132,121		150,727		(17,880)		(65,551)		320,055		303,951
Total liabilities	5,486,495		3,687,802		250,388		488,967		(83,219)		(126,692)		5,653,664		4,050,077
Total equity	812,653		634,249		980,331		827,590		(671,574)		(611,597)		1,121,410		850,242
Total liabilities and equity	$	6,299,148	$	4,322,051	$	1,230,719	$	1,316,557	$	(754,793)	$	(738,289)	$	6,775,074	$	4,900,319

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, 2021 (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.

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 is America’s leading digital marketplace bank. The Company 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 doing so, we became one of the largest providers of unsecured personal loans in the United States. In February 2021, LendingClub completed the acquisition (the Acquisition) of an award-winning digital bank, Radius, becoming a bank holding company and forming LC Bank as its wholly-owned subsidiary. We operate the vast majority of our business through LC Bank, as a lender and originator of loans and as a regulated bank in the United States.

Executive Summary

We delivered the following results as we leaned into the strategic advantages of our digital bank in the face of a less favorable economic environment. We drove growth in recurring interest income supported by strong credit performance of our retained high-quality prime loan portfolio. Marketplace volumes were impacted by higher funding costs for certain loan investors, driven by rapidly increasing interest rates. Over time, as rates stabilize and we continue to reprice personal loans, we expect this impact to gradually moderate.

•Loan originations: Total loan originations for the third quarter of 2022 were $3.5 billion, decreasing 8% sequentially, primarily driven by a decrease in unsecured personal loan origination volume, reflecting rapidly rising rates, tightening of underwriting standards and the corresponding impact on investor returns. We expect this market dynamic to continue in the near term, but moderate over time as we increase interest rates on loans and continue to modify underwriting to enhance investor returns. Total loan originations increased 14% year over year, primarily driven by an increase in unsecured personal loan origination volume.

◦Loan originations held for investment (HFI) were $1.2 billion, increasing 13% sequentially and 81% year over year.

◦Loan originations HFI as a percentage of total loan originations was 33% and 27% for the third and second quarters of 2022, respectively, and 20% for the third quarter of 2021. 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 third quarter of 2022 was $304.9 million, decreasing 8% sequentially and increasing 24% year over year.

◦Marketplace revenue: Marketplace revenue for the third quarter of 2022 was $173.8 million, decreasing 16% sequentially and remained flat year over year, in line with loan origination volume.

◦Net interest income: Net interest income for the third quarter of 2022 was $123.7 million, improving 6% sequentially and 89% year over year. The increase was primarily due to an increase in unsecured personal loans retained in current and prior periods as HFI.

◦Net interest margin: Net interest margin for the third quarter of 2022 was 8.3%, decreasing from 8.5% in the second quarter of 2022, primarily due to higher interest rates on deposits offset by an increase in unsecured personal loans HFI, and increasing from 6.3% in the third quarter of 2021, primarily reflecting a greater mix of personal loans which generate a higher yield than the rest of the loans HFI.

•Provision for credit losses: Provision for credit losses for the third quarter of 2022 was $82.7 million, increasing 17% sequentially and 120% year over year. The increase was primarily due to growth in loans HFI, allowance net present value amortization on prior loan vintages and additional qualitative allowance reflecting a less favorable economic outlook.

•Total non-interest expense: Total non-interest expense for the third quarter of 2022 was $186.2 million, decreasing 11% sequentially, primarily driven by a decrease in variable marketing expenses based on lower

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)

origination volume and prudent management of expenses. Total non-interest expense increased 4% year over year, primarily driven by an increase in variable marketing expenses based on higher origination volume.

•Net income: Net income for the third quarter of 2022 was $43.2 million, decreasing by $138.9 million sequentially and increasing $16.0 million year over year. Net income for the third and second quarters of 2022 included a tax benefit of $5.0 million and $135.3 million, respectively, due to the reversal of our valuation allowance against our deferred tax assets.

•Net income excluding income tax benefit: Net income excluding income tax benefit (related to the reversal of our valuation allowance against our deferred tax assets) for the third quarter of 2022 was $38.2 million, decreasing by $8.6 million sequentially and increasing by $11.0 million year over year.

•Diluted earnings per share: Diluted EPS for the third quarter of 2022 was $0.41, compared to $1.73 for the second quarter of 2022 and $0.26 for the same quarter last year. Diluted EPS for the second quarter of 2022 included a $1.29 per share benefit from the reversal of the deferred tax valuation allowance. The improvement during the third quarter of 2022 from a year earlier primarily reflected revenue growth and improved operating efficiency, as well as a $0.05 per share benefit from the reversal of the deferred tax asset valuation allowance.

•Pre-tax, pre-provision income: Pre-tax, pre-provision income for the third quarter of 2022 was $118.7 million, decreasing by $2.0 million sequentially and increasing by $51.3 million year over year, consistent with revenue growth and improved operating efficiency.

•Loans and leases held for investment: Loans and leases held for investment, net of allowance for loan and lease losses, were $4.5 billion at September 30, 2022, growing 18% sequentially and 73% year over year, reflecting growth in personal loan originations and an increase in loan originations retained as HFI.

•Deposits: Total deposits at September 30, 2022 were $5.1 billion, growing 13% sequentially and 80% year over year, primarily reflecting growth in online savings deposits.

•Total equity: Total equity at September 30, 2022 was $1.1 billion, up $42.3 million sequentially and $316.6 million year over year, primarily reflecting net income generated over the period and the release of the deferred tax asset valuation allowance.

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									Nine Months Ended September 30,
	September 30, 2022			June 30, 2022			September 30, 2021			2022			2021
Non-interest income	$	181,237		$	213,832		$	180,878		$	584,926		$	426,688
Net interest income	123,676			116,226			65,288			339,582			129,699
Total net revenue	304,913			330,058			246,166			924,508			556,387
Non-interest expense	186,219			209,386			178,775			586,809			473,166
Pre-tax, pre-provision income	118,694			120,672			67,391			337,699			83,221
Provision for credit losses	82,739			70,566			37,524			205,814			93,651
Income (Loss) before income tax benefit (expense)	35,955			50,106			29,867			131,885			(10,430)
Income tax benefit (expense)	7,243			131,954			(2,682)			134,209			(98)
Net income (loss)	43,198			182,060			27,185			266,094			(10,528)
Income tax benefit from release of tax valuation allowance	5,015			135,300			—			140,315			—
Net income (loss) excluding income tax benefit (1)(3)	$	38,183		$	46,760		$	27,185		$	125,779		$	(10,528)

Basic EPS	$	0.41		$	1.77		$	0.27		$	2.59		$	(0.11)
Diluted EPS	$	0.41		$	1.73		$	0.26		$	2.56		$	(0.11)
Diluted EPS impact of income tax benefit from release of tax valuation allowance	$	0.05		$	1.28		—			$	1.35		—
Diluted EPS excluding income tax benefit (1)(3)	$	0.36		$	0.45		$	0.26		$	1.21		$	(0.11)











LendingClub Corporation Performance Metrics:
Net interest margin	8.3		%	8.5		%	6.3		%	8.3		%	4.8		%
Efficiency ratio (2)	61.1		%	63.4		%	72.6		%	63.5		%	85.0		%
Return on average equity (ROE)	14.2		%	33.8		%	13.8		%	40.6		%	N/A
Return on average total assets (ROA)	2.5		%	5.5		%	2.4		%	6.8		%	N/A
Marketing as a % of loan originations	1.3		%	1.6		%	1.6		%	1.5		%	1.4		%

LendingClub Corporation Capital Metrics:
Common Equity Tier 1 Capital Ratio	18.3		%	20.0		%	22.8		%
Tier 1 Leverage Ratio	15.7		%	16.2		%	16.2		%
Book Value per Common Share	$	10.67		$	10.41		$	8.07
Tangible Book Value per Common Share(3)	$	9.78		$	9.50		$	7.08

Loan Originations (in millions):
Marketplace loans	$	2,386		$	2,819		$	2,471		$	7,566		$	5,792
Loan originations held for investment	1,153			1,021			636			3,030			1,521
Total loan originations	$	3,539		$	3,840		$	3,107		$	10,596		$	7,312
Loan originations held for investment as % of total loan originations	33		%	27		%	20		%	29		%	21		%

Servicing portfolio AUM (in millions) (4):
Total servicing portfolio	$	15,929		$	14,783		$	11,592
Loans serviced for others	$	11,807		$	11,382		$	9,744

N/A – Not applicable

(1) The third and second quarters of 2022 and first nine months of 2022 include an income tax benefit of $5.0 million, $135.3 million and $140.3 million, respectively, due to the release of our deferred tax asset valuation allowance.

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)

(2) Calculated as the ratio of non-interest expense to total net revenue.

(3) Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” for additional information.

(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.


	As of the Three Months Ended
	September 30, 2022			June 30, 2022			September 30, 2021


















Balance Sheet Data:
Loans and leases held for investment, net, excluding PPP loans	$	4,414,347		$	3,692,667		$	2,235,698
PPP loans	$	89,379		$	118,794		$	367,558
Total loans and leases held for investment, net	$	4,503,726		$	3,811,461		$	2,603,256
Total assets	$	6,775,074		$	6,186,765		$	4,750,760
Total deposits	$	5,123,506		$	4,527,672		$	2,838,719
Total liabilities	$	5,653,664		$	5,107,648		$	3,945,970
Total equity	$	1,121,410		$	1,079,117		$	804,790

Allowance Ratios:
ALLL to total loans and leases held for investment	6.3		%	6.0		%	3.9		%
ALLL to total loans and leases held for investment, excluding PPP loans	6.4		%	6.2		%	4.5		%
ALLL to consumer loans and leases held for investment	7.2		%	6.9		%	5.2		%
ALLL to commercial loans and leases held for investment	1.9		%	2.0		%	1.6		%
ALLL to commercial loans and leases held for investment, excluding PPP loans	2.2		%	2.3		%	2.6		%

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 tables set forth the Condensed Consolidated Statements of Income (Income Statement) data for each of the periods presented:


	Three Months Ended						Change (%)
	September 30, 2022		June 30, 2022		September 30, 2021		Q3 2022 vs Q2 2022		Q3 2022 vs Q3 2021
Non-interest income:
Marketplace revenue	$	173,837	$	206,384	$	174,556	(16)	%	—	%
Other non-interest income	7,400		7,448		6,322		(1)	%	17	%
Total non-interest income	181,237		213,832		180,878		(15)	%	—	%

Interest income:
Interest on loans held for sale	5,879		7,130		8,536		(18)	%	(31)	%
Interest and fees on loans and leases held for investment	124,028		108,911		57,644		14	%	115	%
Interest on retail and certificate loans held for investment at fair value	3,685		5,091		12,172		(28)	%	(70)	%
Interest on other loans held for investment at fair value	791		631		973		25	%	(19)	%
Interest on securities available for sale	3,820		4,426		3,180		(14)	%	20	%
Other	5,017		2,279		355		120	%	N/M
Total interest income	143,220		128,468		82,860		11	%	73	%

Interest expense:
Interest on deposits	15,184		6,078		1,899		150	%	700	%
Interest on short-term borrowings	87		417		849		(79)	%	(90)	%
Interest on retail notes, certificates and secured borrowings	3,685		5,091		12,172		(28)	%	(70)	%
Interest on Structured Program borrowings	225		360		2,120		(38)	%	(89)	%
Interest on other long-term debt	363		296		532		23	%	(32)	%
Total interest expense	19,544		12,242		17,572		60	%	11	%

Net interest income	123,676		116,226		65,288		6	%	89	%

Total net revenue	304,913		330,058		246,166		(8)	%	24	%

Provision for credit losses	82,739		70,566		37,524		17	%	120	%

Non-interest expense:
Compensation and benefits	84,916		85,103		73,304		—	%	16	%
Marketing	46,031		61,497		50,782		(25)	%	(9)	%
Equipment and software	12,491		12,461		10,297		—	%	21	%
Occupancy	5,051		6,209		6,486		(19)	%	(22)	%
Depreciation and amortization	10,681		10,557		10,549		1	%	1	%
Professional services	11,943		16,138		11,750		(26)	%	2	%
Other non-interest expense	15,106		17,421		15,607		(13)	%	(3)	%
Total non-interest expense	186,219		209,386		178,775		(11)	%	4	%

Income before income tax benefit (expense)	35,955		50,106		29,867		(28)	%	20	%
Income tax benefit (expense)	7,243		131,954		(2,682)		N/M		N/M
Net income	$	43,198	$	182,060	$	27,185	(76)	%	59	%

LENDINGCLUB CORPORATION

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

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


	Nine Months Ended September 30,
	2022		2021		Change (%)
Non-interest income:
Marketplace revenue	$	560,187	$	408,018	37	%
Other non-interest income	24,739		18,670		33	%
Total non-interest income	584,926		426,688		37	%

Interest income:
Interest on loans held for sale	20,459		22,387		(9)	%
Interest and fees on loans and leases held for investment	324,381		112,013		190	%
Interest on retail and certificate loans held for investment at fair value	15,745		48,448		(68)	%
Interest on other loans held for investment at fair value	2,015		3,674		(45)	%
Interest on securities available for sale	12,757		7,954		60	%
Other	7,984		701		N/M
Total interest income	383,341		195,177		96	%

Interest expense:
Interest on deposits	24,700		4,612		436	%
Interest on short-term borrowings	939		3,116		(70)	%
Interest on retail notes, certificates and secured borrowings	15,745		48,448		(68)	%
Interest on Structured Program borrowings	1,349		7,996		(83)	%
Interest on other long-term debt	1,026		1,306		(21)	%
Total interest expense	43,759		65,478		(33)	%

Net interest income	339,582		129,699		162	%

Total net revenue	924,508		556,387		66	%

Provision for credit losses	205,814		93,651		120	%

Non-interest expense:
Compensation and benefits	251,629		209,649		20	%
Marketing	162,608		105,434		54	%
Equipment and software	35,998		27,471		31	%
Occupancy	17,279		19,543		(12)	%
Depreciation and amortization	32,277		33,823		(5)	%
Professional services	40,487		34,873		16	%
Other non-interest expense	46,531		42,373		10	%
Total non-interest expense	586,809		473,166		24	%

Income (Loss) before income tax benefit (expense)	131,885		(10,430)		N/M
Income tax benefit (expense)	134,209		(98)		N/M
Net income (loss)	$	266,094	$	(10,528)	N/M

The analysis below is presented for the following periods: Third quarter of 2022 compared to the second quarter of 2022 (sequential), third quarter of 2022 compared to the third quarter of 2021 (year over year) and the first nine months of 2022 compared to the first nine months of 2021 (nine months over nine months). As a result of the timing of the Company’s acquisition of Radius on February 1, 2021, our results of operations discussed below for the nine- month period ended September 30, 2021 only reflect the revenue and expenses generated by LendingClub Bank for eight months of such 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)

Marketplace Revenue

Marketplace revenue consists of the following:


	Three Months Ended						Change (%)
	September 30, 2022		June 30, 2022		September 30, 2021		Q3 2022 vs Q2 2022		Q3 2022 vs Q3 2021
Origination fees	$	127,142	$	149,252	$	129,125	(15)	%	(2)	%
Servicing fees	23,760		18,166		20,819		31	%	14	%
Gain on sales of loans	23,554		29,319		21,907		(20)	%	8	%
Net fair value adjustments	(619)		9,647		2,705		N/M		N/M
Total marketplace revenue	$	173,837	$	206,384	$	174,556	(16)	%	—	%


	Nine Months Ended September 30,
	2022		2021		Change (%)
Origination fees	$	398,487	$	298,486	34	%
Servicing fees	60,440		66,699		(9)	%
Gain on sales of loans	76,983		49,547		55	%
Net fair value adjustments	24,277		(6,714)		N/M
Total marketplace revenue	$	560,187	$	408,018	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 sale of the loans, and servicing asset gains on the sales of the loans, are reported as separate components of “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 held for sale. In addition, origination fees include transaction fees that were paid to us by issuing bank partners or education and patient service providers for the work performed in facilitating the origination of loans by the issuing banks. Following the Acquisition, LC Bank became the originator and lender for all unsecured personal and auto refinance loans and the majority of education and patient finance loans.

The following table presents loan origination volume during each of the periods set forth below:


	Three Months Ended						Nine Months Ended
	September 30, 2022		June 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Marketplace loans	$	2,386,319	$	2,819,263	$	2,471,152	$	7,565,820	$	5,791,508
Loan originations held for investment	1,152,870		1,021,110		635,514		3,030,292		1,520,751
Total loan originations	$	3,539,189	$	3,840,373	$	3,106,666	$	10,596,112	$	7,312,259

Origination fees were $127.1 million and $149.3 million for the third and second quarters of 2022, respectively, a decrease of 15%. The decrease was due to lower origination volume of marketplace loans. Loan origination volume of marketplace loans decreased to $2.4 billion for the third quarter of 2022 compared to $2.8 billion for the second quarter of 2022, a decrease of 15%.

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)

Origination fees were $127.1 million and $129.1 million for the third quarters of 2022 and 2021, respectively, a decrease of 2%. The decrease was due to lower origination volume of marketplace loans. Loan origination volume of marketplace loans decreased to $2.4 billion for the third quarter of 2022 compared to $2.5 billion for the third quarter of 2021, a decrease of 3%.

Origination fees were $398.5 million and $298.5 million for the first nine months of 2022 and 2021, respectively, an increase of 34%. The increase was due to higher origination volume of marketplace loans. Loan origination volume of marketplace loans increased to $7.6 billion for the first nine months of 2022 compared to $5.8 billion for the first nine months of 2021, an increase of 31%.

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 end of each period presented. Loans sold and subsequently serviced on behalf of the investor represent a key driver of our servicing fee revenue.


	Three Months Ended						Change (%)
	September 30, 2022		June 30, 2022		September 30, 2021		Q3 2022 vs Q2 2022		Q3 2022 vs Q3 2021
AUM (in millions):
Loans serviced for others	$	11,807	$	11,382	$	9,744	4	%	21	%
Loans held by LendingClub Bank	4,019		3,258		1,438		23	%	179	%
Retail notes, certificates and secured borrowings	92		127		314		(28)	%	(71)	%
Other loans invested in by the Company	11		16		96		(31)	%	(89)	%
Total	$	15,929	$	14,783	$	11,592	8	%	37	%

In addition to the loans serviced on our marketplace platform, we earned servicing fee revenue on $174.1 million, $183.6 million and $243.6 million in outstanding principal balance of commercial loans sold as of September 30, 2022, June 30, 2022 and September 30, 2021, respectively.

Servicing fees were $23.8 million and $18.2 million for the third and second quarters of 2022, respectively, an increase of 31%. This was primarily due to a higher principal balance of loans serviced and less changes in the fair value of our servicing asset.

Servicing fees were $23.8 million and $20.8 million for the third quarters of 2022 and 2021, respectively, an increase of 14%. The increase in revenue was primarily due to a higher principal balance of loans serviced.

Servicing fees were $60.4 million and $66.7 million for the first nine months of 2022 and 2021, respectively, a decrease of 9%. The decrease in revenue was primarily due to more changes in the fair value of our servicing asset, partially offset by a higher principal balance of loans serviced.

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)

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.

Gain on sales of loans was $23.6 million and $29.3 million for the third and second quarters of 2022, respectively, a decrease of 20%. The decrease was due to a decrease in the volume of marketplace loans sold.

Gain on sales of loans was $23.6 million and $21.9 million for the third quarters of 2022 and 2021, respectively, an increase of 8%. The increase was primarily due to an increase in the average contractual servicing fee, partially offset by a decrease in the volume of marketplace loans sold.

Gain on sales of loans was $77.0 million and $49.5 million for the first nine months of 2022 and 2021, respectively, an increase of 55%. The increase was primarily due to an increase 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.

Net fair value adjustments were $(0.6) million and $9.6 million for the third and second quarters of 2022, respectively, a decrease of $10.3 million. The decrease was primarily due to lower loan sale prices and a decrease in the volume of marketplace loans sold.

Net fair value adjustments were $(0.6) million and $2.7 million for the third quarters of 2022 and 2021, respectively, a decrease of $3.3 million. The decrease was primarily due to lower loan sale prices and a decrease in the volume of marketplace loans sold.

Net fair value adjustments were $24.3 million and $(6.7) million for the first nine months of 2022 and 2021, respectively, an increase of $31.0 million. The increase was primarily due to higher loan sale prices and an increase in the volume of marketplace loans sold.

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)

Other Non-interest Income

Other non-interest income primarily consists of referral revenue that relates to fees earned from third-party companies when customers referred by us consider or purchase products or services from such third-party companies. The tables below illustrate the composition of other non-interest income for each period presented:


	Three Months Ended						Change (%)
	September 30, 2022		June 30, 2022		September 30, 2021		Q3 2022 vs Q2 2022		Q3 2022 vs Q3 2021
Referral revenue	$	3,144	$	4,025	$	4,293	(22)	%	(27)	%

Other	4,256		3,423		2,029		24	%	110	%
Other non-interest income	$	7,400	$	7,448	$	6,322	(1)	%	17	%


	Nine Months Ended September 30,
	2022		2021		Change (%)
Referral revenue	$	10,860	$	9,649	13	%
Realized gains (losses) on sales of securities available for sale and other investments	36		(96)		N/M
Other	13,843		9,117		52	%
Other non-interest income	$	24,739	$	18,670	33	%

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 tables below present net interest income information corresponding to interest-earning assets and interest-bearing funding sources on a consolidated basis for the Company. The average yield/rate is calculated by dividing the annualized period-end interest income/expense by the average balance.


	Three Months Ended September 30, 2022						Three Months Ended June 30, 2022						Three Months Ended September 30, 2021
	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	$	893,655	$	5,017	2.25	%	$	1,023,192	$	2,279	0.89	%	$	778,667	$	355	0.18	%
Securities available for sale at fair value	396,556		3,820		3.85	%	409,327		4,426		4.32	%	266,686		3,180		4.77	%
Loans held for sale	126,487		5,879		18.59	%	156,503		7,130		18.22	%	226,422		8,536		15.08	%
Loans and leases held for investment:
Unsecured personal loans (2)	3,268,649		110,446		13.52	%	2,692,148		95,529		14.19	%	991,297		39,532		15.95	%
Secured consumer loans	337,191		3,039		3.60	%	268,091		2,351		3.51	%	464,194		4,688		4.04	%
Commercial loans and leases	692,783		9,262		5.35	%	644,002		8,732		5.42	%	616,823		7,887		5.11	%
PPP loans	105,500		1,281		4.86	%	149,454		2,299		6.15	%	436,785		5,537		5.07	%
Loans and leases held for investment	4,404,123		124,028		11.26	%	3,753,695		108,911		11.61	%	2,509,099		57,644		9.19	%
Retail and certificate loans held for investment at fair value	104,010		3,685		14.17	%	144,613		5,091		14.08	%	344,205		12,172		14.15	%
Other loans held for investment at fair value	17,763		791		17.83	%	16,991		631		14.85	%	30,981		973		12.58	%
Total interest-earning assets	5,942,594		143,220		9.64	%	5,504,321		128,468		9.34	%	4,156,060		82,860		7.97	%

Cash and due from banks and restricted cash	58,411						75,517						96,733
Allowance for loan and lease losses	(254,849)						(202,904)						(86,686)
Other non-interest earning assets	597,169						490,412						449,964
Total assets	$	6,343,325					$	5,867,346					$	4,616,071

Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$	2,192,904	$	4,575	0.83	%	$	2,463,710	$	2,664	0.43%		$	2,221,365	$	1,707	0.30	%
Savings accounts and certificates of deposit	2,260,170		10,609		1.86	%	1,555,607		3,414		0.88%		307,807		192		0.25	%
Interest-bearing deposits (2)	4,453,074		15,184		1.35	%	4,019,317		6,078		0.61%		2,529,172		1,899		0.30	%
Short-term borrowings	6,848		87		5.09	%	10,874		417		15.35%		57,224		849		5.93	%
Advances from PPPLF	104,897		93		0.36	%	151,278		135		0.36%		416,748		371		0.36	%
Retail notes, certificates and secured borrowings	104,010		3,685		14.17	%	144,613		5,091		14.08	%	344,087		12,172		14.15	%
Structured Program borrowings	13,859		225		6.50	%	18,439		360		7.81	%	100,178		2,120		8.46	%
Other long-term debt	15,300		270		7.04	%	15,357		161		4.20	%	15,606		161		4.13	%
Total interest-bearing liabilities	4,697,988		19,544		1.65	%	4,359,878		12,242		1.12	%	3,463,015		17,572		2.03	%

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 September 30, 2022						Three Months Ended June 30, 2022						Three Months Ended September 30, 2021
	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)
Non-interest bearing deposits	284,134						292,750						81,491
Other liabilities	250,086						261,796						285,292
Total liabilities	$	5,232,208					$	4,914,424					$	3,829,798

Total equity	$	1,111,117					$	952,922					$	786,273
Total liabilities and equity	$	6,343,325					$	5,867,346					$	4,616,071

Interest rate spread					7.99	%					8.21	%					5.95	%

Net interest income and net interest margin			$	123,676	8.32	%			$	116,226	8.45	%			$	65,288	6.28	%

(1) Nonaccrual loans and any related income are included in their respective loan categories.

(2) The average yield/rate for unsecured personal loans decreased both sequentially and year over year primarily due to a shift in the mix toward higher credit quality loans. The average yield/rate for interest-bearing deposits increased due to a higher federal funds rate and an increasing concentration of online deposits. We expect the decrease in net interest margin to continue in the fourth quarter of 2022.

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)

An analysis of the sequential and year-to-year changes in the categories of interest revenue and interest expense resulting from changes in volume and rate is as follows:


	Three Months Ended September 30, 2022 Compared to Three Months Ended June 30, 2022
	Increase (Decrease) Due to Change in:
	Average Volume(1)		Average Rate(1)		Total
Interest-earning assets
Cash, cash equivalents, restricted cash and other	$	(322)	$	3,060	$	2,738
Securities available for sale at fair value	(135)		(471)		(606)
Loans held for sale	(1,392)		141		(1,251)
Loans and leases held for investment	18,398		(3,281)		15,117
Retail and certificate loans held for investment at fair value	(1,438)		32		(1,406)
Other loans held for investment at fair value	30		130		160
Total increase (decrease) in interest income on interest-earning assets	$	15,141	$	(389)	$	14,752
Interest-bearing liabilities
Checking and money market accounts	$	(318)	$	2,229	$	1,911
Savings accounts and certificates of deposit	2,078		5,117		7,195
Interest-bearing deposits	1,760		7,346		9,106
Short-term borrowings	(118)		(212)		(330)
Advances from PPPLF	(42)		—		(42)
Retail notes, certificates and secured borrowings	(1,438)		32		(1,406)
Structured Program borrowings	(81)		(54)		(135)
Other long-term debt	(1)		110		109
Total increase in interest expense on interest-bearing liabilities	$	80	$	7,222	$	7,302

Increase (decrease) in net interest income	$	15,061	$	(7,611)	$	7,450

(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 September 30, 2022 Compared to Three Months Ended September 30, 2021
	Increase (Decrease) Due to Change in:
	Average Volume(1)		Average Rate(1)		Total
Interest-earning assets
Cash, cash equivalents, restricted cash and other	$	60	$	4,602	$	4,662
Securities available for sale at fair value	1,335		(695)		640
Loans held for sale	(4,342)		1,685		(2,657)
Loans and leases held for investment	51,105		15,279		66,384
Retail and certificate loans held for investment at fair value	(8,510)		23		(8,487)
Other loans held for investment at fair value	(503)		321		(182)
Total increase in interest income on interest-earning assets	$	39,145	$	21,215	$	60,360
Interest-bearing liabilities
Checking and money market accounts	$	(22)	$	2,890	$	2,868
Savings accounts and certificates of deposit	5,135		5,282		10,417
Interest-bearing deposits	5,113		8,172		13,285
Short-term borrowings	(656)		(106)		(762)
Advances from PPPLF	(278)		—		(278)
Retail notes, certificates and secured borrowings	(8,506)		19		(8,487)
Structured Program borrowings	(1,493)		(402)		(1,895)
Other long-term debt	(3)		112		109
Total increase (decrease) in interest expense on interest-bearing liabilities	$	(5,823)	$	7,795	$	1,972

Increase in net interest income	$	44,968	$	13,420	$	58,388

(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)


	Nine Months Ended September 30,
	2022						2021
	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	$	936,592	$	7,984	1.14	%	$	769,759	$	701	0.12	%
Securities available for sale at fair value	377,274		12,757		4.51	%	295,949		7,954		3.58	%
Loans held for sale	178,905		20,459		15.25	%	229,785		22,387		12.99	%
Loans and leases held for investment:
Unsecured personal loans (2)	2,678,133		284,350		14.16	%	605,126		62,423		15.47	%
Secured consumer loans	279,556		7,665		3.66	%	503,798		13,076		3.89	%
Commercial loans and leases	652,745		25,583		5.23	%	616,660		22,068		5.37	%
PPP loans	158,729		6,783		5.70	%	549,137		14,446		3.95	%
Loans and leases held for investment	3,769,163		324,381		11.47	%	2,274,721		112,013		7.39	%
Retail and certificate loans held for investment at fair value	148,798		15,745		14.11	%	454,886		48,448		14.20	%
Other loans held for investment at fair value	17,756		2,015		15.13	%	38,563		3,674		12.71	%
Total interest-earning assets	5,428,488		383,341		9.42	%	4,063,663		195,177		6.86	%

Cash and due from banks and restricted cash	75,412						125,310
Allowance for loan and lease losses	(207,462)						(59,262)
Other non-interest earning assets	525,053						413,309
Total assets	$	5,821,491					$	4,543,020

Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$	2,298,847	$	8,964	0.52	%	$	2,046,355	$	4,238	0.31	%
Savings accounts and certificates of deposit	1,633,325		15,736		1.29	%	309,500		374		0.18	%
Interest-bearing deposits (2)	3,932,172		24,700		0.84	%	2,355,855		4,612		0.30	%
Short-term borrowings	12,648		939		9.90	%	78,467		3,116		5.30	%
Advances from PPPLF	163,206		434		0.35	%	374,841		876		0.35	%
Retail notes, certificates and secured borrowings	148,798		15,745		14.11	%	455,779		48,448		14.18	%
Structured Program borrowings	24,671		1,349		7.29	%	121,654		7,996		8.76	%
Other long-term debt	15,359		592		5.14	%	16,665		430		3.44	%
Total interest-bearing liabilities	4,296,854		43,759		1.36	%	3,403,261		65,478		2.59	%

Non-interest bearing deposits	268,281						93,813
Other liabilities	276,788						287,868
Total liabilities	$	4,841,923					$	3,784,942

Total equity	$	979,568					$	758,078
Total liabilities and equity	$	5,821,491					$	4,543,020

Interest rate spread					8.06	%					4.27	%

Net interest income and net interest margin			$	339,582	8.34	%			$	129,699	4.76	%

(1) Nonaccrual loans and any related income are included in their respective loan categories.

(2) The average yield/rate for unsecured personal loans decreased nine months over nine months primarily due to a shift in the mix toward higher credit quality loans. The average yield/rate for interest-bearing deposits increased due to a higher federal funds rate and an increasing concentration of online deposits.

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 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 net present value of expected cash flows. The net present value from the DCF approach is then compared to the amortized cost basis of the loans and leases to derive expected credit losses. The provision for credit losses includes the credit loss expense for HFI loans and leases, 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:


	Three Months Ended						Nine Months Ended September 30,
	September 30, 2022		June 30, 2022		September 30, 2021		2022		2021
Credit loss expense for Radius loans at acquisition	$	—	$	—	$	—	$	—	$	6,929
Credit loss expense for loans and leases held for investment	82,599		70,053		37,133		204,880		88,733
Credit loss expense for unfunded lending commitments	140		513		887		934		1,277
Total credit loss expense	82,739		70,566		38,020		205,814		96,939
Reversal of credit loss expense on securities available for sale	—		—		(496)		—		(3,288)
Total provision for credit losses	$	82,739	$	70,566	$	37,524	$	205,814	$	93,651

The provision for credit losses was $82.7 million and $70.6 million for the third and second quarters of 2022, respectively. The increase was primarily due to growth in the volume of loans HFI, allowance net present value amortization on prior loan vintages and additional qualitative allowance reflecting a less favorable economic outlook. Total volume of loans HFI was $1.2 billion and $1.0 billion for the third and second quarters of 2022, respectively.

The provision for credit losses was $82.7 million and $37.5 million for the third quarters of 2022 and 2021, respectively. The increase was primarily due to growth in the volume of loans HFI, allowance net present value amortization on prior loan vintages and additional qualitative allowance reflecting a less favorable economic outlook. Total volume of loans HFI was $1.2 billion and $635.5 million for the third quarters of 2022 and 2021, respectively.

The provision for credit losses was $205.8 million and $93.7 million for the first nine months of 2022 and 2021, respectively. The increase was primarily due to growth in the volume of loans HFI, allowance net present value amortization on prior loan vintages and additional qualitative allowance reflecting a less favorable economic outlook. Total volume of loans HFI was $3.0 billion and $1.5 billion for the first nine months of 2022 and 2021, respectively.

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 activity in the ACL was as follows:


	Three Months Ended						Nine Months Ended September 30,
	September 30, 2022		June 30, 2022		September 30, 2021		2022		2021
Allowance for loan and lease losses, beginning of period	$	243,260	$	187,985	$	71,081	$	144,389	$	—
Credit loss expense for loans and leases held for investment	82,599		70,053		37,133		204,880		95,662
Initial allowance for purchased credit deteriorated (PCD) loans acquired during the period (1)	—		—		—		—		12,440
Charge-offs	(23,728)		(15,852)		(4,336)		(48,669)		(4,582)
Recoveries	1,070		1,074		858		2,601		1,216
Allowance for loan and lease losses, end of period	$	303,201	$	243,260	$	104,736	$	303,201	$	104,736

Reserve for unfunded lending commitments, beginning of period	$	2,025	$	1,512	$	390	$	1,231	$	—
Credit loss expense for unfunded lending commitments	140		513		887		934		1,277
Reserve for unfunded lending commitments, end of period (2)	$	2,165	$	2,025	$	1,277	$	2,165	$	1,277

(1) For acquired PCD loans, an ACL of $30.4 million was required with a corresponding increase to the amortized cost basis as of the acquisition date. For PCD loans where all or a portion of the loan balance had been previously written-off, or would be subject to write-off under the Company’s charge-off policy, an ACL of $18.0 million included as part of the grossed-up loan balance at acquisition was immediately written-off. The net impact to the allowance for PCD assets on the acquisition date was $12.4 million.

(2) Relates to $144.0 million, $132.6 million and $115.5 million of unfunded commitments as of September 30, 2022, June 30, 2022 and September 30, 2021, respectively.


	Three Months Ended									Nine Months Ended September 30,
	September 30, 2022			June 30, 2022			September 30, 2021			2022			2021
Ratio of allowance for loan and lease losses to total loans and leases held for investment	6.31		%	6.00		%	3.87		%	6.31		%	3.87		%
Ratio of allowance for loan and lease losses to total loans and leases held for investment, excluding PPP loans	6.43		%	6.18		%	4.48		%	6.43		%	4.48		%

Average loans and leases held for investment	$	4,404,123		$	3,753,695		$	2,509,099		$	3,769,163		$	2,274,721
Ratio of net charge-offs to average loans and leases held for investment	0.51		%	0.39		%	0.14		%	1.22		%	0.15		%

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)

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 nonaccrual loans and leases as of the periods presented (1):


	September 30, 2022			December 31, 2021











Total nonaccrual loans and leases held for investment	$	24,507		$	9,985
Ratio of total nonaccrual loans and leases held for investment to total loans and leases held for investment	0.51		%	0.34		%
Ratio of total nonaccrual loans and leases held for investment to total loans and leases held for investment, excluding PPP loans	0.52		%	0.38		%

(1) Excluding PPP loans, there were no loans that were 90 days or more past due and accruing as of both September 30, 2022 and December 31, 2021.

For additional information on the ACL and nonaccrual loans and leases, see “Notes to Consolidated Financial Statements – Note 1. Summary of Significant Accounting Policies” of our Annual Report and “Note 5. Loans and Leases Held for Investment, 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 acquisition efforts and building general brand awareness, (iii) equipment and software, (iv) occupancy, which includes rent expense and all other costs related to occupying our office spaces, (v) depreciation and amortization and (vi) professional services, which primarily consist of legal and accounting fees.


	Three Months Ended						Change (%)
	September 30, 2022		June 30, 2022		September 30, 2021		Q3 2022 vs Q2 2022		Q3 2022 vs Q3 2021
Non-interest expense:
Compensation and benefits	$	84,916	$	85,103	$	73,304	—	%	16	%
Marketing	46,031		61,497		50,782		(25)	%	(9)	%
Equipment and software	12,491		12,461		10,297		—	%	21	%
Occupancy	5,051		6,209		6,486		(19)	%	(22)	%
Depreciation and amortization	10,681		10,557		10,549		1	%	1	%
Professional services	11,943		16,138		11,750		(26)	%	2	%
Other non-interest expense	15,106		17,421		15,607		(13)	%	(3)	%
Total non-interest expense	$	186,219	$	209,386	$	178,775	(11)	%	4	%


	Nine Months Ended September 30,
	2022		2021		Change (%)
Non-interest expense:
Compensation and benefits	$	251,629	$	209,649	20	%
Marketing	162,608		105,434		54	%
Equipment and software	35,998		27,471		31	%
Occupancy	17,279		19,543		(12)	%
Depreciation and amortization	32,277		33,823		(5)	%
Professional services	40,487		34,873		16	%
Other non-interest expense	46,531		42,373		10	%
Total non-interest expense	$	586,809	$	473,166	24	%

Compensation and benefits expense remained flat for the third quarter of 2022 compared to the second quarter of 2022.

Compensation and benefits expense increased $11.6 million, or 16%, and $42.0 million, or 20%, for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021. The increases were primarily due to an increase in headcount.

Marketing expense decreased $15.5 million, or 25%, for the third quarter of 2022 compared to the second quarter of 2022. The decrease was primarily due to a decrease in variable marketing expenses based on lower origination volume, as well as the deferral of applicable marketing expenses for HFI loans.

Marketing expense decreased $4.8 million, or 9%, for the third quarter of 2022 compared to the third quarter of 2021. The decrease was primarily due to the deferral of applicable marketing expenses for HFI loans, partially offset by an increase in variable marketing expenses based on higher origination volume.

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 expense increased $57.2 million, or 54%, for the first nine months of 2022 compared to the same period in 2021. The increase was primarily due to an increase in variable marketing expenses based on higher origination volume, partially offset by the deferral of applicable marketing expenses for HFI loans.

Equipment and software expense remained flat for the third quarter of 2022 compared to the second quarter of 2022.

Equipment and software expense increased $2.2 million, or 21%, and $8.5 million, or 31%, for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021. The increases were primarily due to an increase in hosting fees and subscription costs.

Occupancy expense was $5.1 million, $6.2 million, and $6.5 million for the third quarter of 2022, second quarter of 2022, and third quarter of 2021, respectively.

Occupancy expense was $17.3 million and $19.5 million for the first nine months of 2022 and 2021, respectively.

Depreciation and amortization expense remained relatively flat for the third quarter of 2022 compared to the second quarter of 2022 and third quarter of 2021.

Depreciation and amortization expense decreased $1.5 million, or 5%, for the first nine months of 2022 compared to the same period in 2021. The decrease was primarily due to an increase in fully depreciated assets, partially offset by an increase in the amortization of intangible assets resulting from the Acquisition.

Professional services decreased $4.2 million, or 26%, for the third quarter of 2022 compared to the second quarter of 2022. The decrease was primarily due to a decrease in consulting fees.

Professional services increased $0.2 million, or 2%, and $5.6 million, or 16%, for the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021. The increases were primarily due to an increase in consulting fees.

Income Taxes

For the third quarter of 2022, we recorded an income tax benefit of $7.2 million, primarily due to the release of a $5.0 million valuation allowance against our deferred tax assets and a $4.6 million tax credit, partially offset by a $2.4 million state income tax expense. For the first nine months of 2022, we recorded an income tax benefit of $134.2 million, primarily due to the release of a $140.3 million valuation allowance against our deferred tax assets.

For the third quarter of 2021, we recorded an income tax expense of $2.7 million, primarily related to income tax expense for state jurisdictions that limit net operating loss utilization. For the first nine months of 2021, we recorded an income tax expense of $0.1 million, primarily related to income tax expense for state jurisdictions that limit net operating loss utilization, partially offset by changes in the deferred tax asset valuation allowance resulting from a deferred tax liability assumed with the Acquisition.

We have evaluated both positive and negative evidence when assessing the recoverability of our net deferred tax assets. Several factors were considered, which primarily included our business model transition and resulting increase in profitability and the expectation of continued profitability. These factors resulted in the release of the majority of our valuation allowance against our deferred tax assets during the second quarter of 2022.

As of September 30, 2022, we maintained a valuation allowance of $58.1 million related to NOLs and tax credit carryforwards, of which certain NOLs’ tax benefit will be realized through our effective tax rate during the fourth quarter of 2022. The realization and timing of any remaining state NOLs and tax credit carryforwards, based on the

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)

allocation of taxable income to the Parent, is uncertain and may expire before being utilized. We expect that our effective tax rate in 2023 will approximate our statutory tax rate of 28%.

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 tables:


	LendingClub Bank				LendingClub Corporation (Parent only)				Intercompany Eliminations				Consolidated Total
	Three Months Ended September 30,				Three Months Ended September 30,				Three Months Ended September 30,				Three Months Ended September 30,
	2022		2021		2022		2021		2022		2021		2022		2021
Non-interest income:
Marketplace revenue	$	153,504	$	151,109	$	9,015	$	23,447	$	11,318	$	—	$	173,837	$	174,556
Other non-interest income	25,240		25,393		4,794		4,140		(22,634)		(23,211)		7,400		6,322
Total non-interest income	178,744		176,502		13,809		27,587		(11,316)		(23,211)		181,237		180,878

Interest income:
Interest income	137,142		64,606		6,078		18,254		—		—		143,220		82,860
Interest expense	(15,277)		(2,270)		(4,267)		(15,302)		—		—		(19,544)		(17,572)
Net interest income	121,865		62,336		1,811		2,952		—		—		123,676		65,288

Total net revenue	300,609		238,838		15,620		30,539		(11,316)		(23,211)		304,913		246,166

(Provision for) reversal of credit losses	(82,739)		(38,019)		—		495		—		—		(82,739)		(37,524)
Non-interest expense	(177,714)		(161,101)		(19,821)		(40,885)		11,316		23,211		(186,219)		(178,775)
Income (Loss) before income tax benefit (expense)	40,156		39,718		(4,201)		(9,851)		—		—		35,955		29,867
Income tax benefit (expense)	(9,440)		(4,670)		16,683		12,607		—		(10,619)		7,243		(2,682)
Net income	$	30,716	$	35,048	$	12,482	$	2,756	$	—	$	(10,619)	$	43,198	$	27,185

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
	Nine Months Ended September 30,		Eight Months Ended September 30,		Nine Months Ended September 30,				Nine Months Ended September 30,		Eight Months Ended September 30,		Nine Months Ended September 30,
	2022		2021		2022		2021		2022		2021		2022		2021
Non-interest income:
Marketplace revenue	$	509,426	$	315,885	$	35,313	$	92,133	$	15,448	$	—	$	560,187	$	408,018
Other non-interest income	64,779		73,433		12,931		12,519		(52,971)		(67,282)		24,739		18,670
Total non-interest income	574,205		389,318		48,244		104,652		(37,523)		(67,282)		584,926		426,688

Interest income:
Interest income	357,117		127,429		26,224		67,748		—		—		383,341		195,177
Interest expense	(25,134)		(5,489)		(18,625)		(59,989)		—		—		(43,759)		(65,478)
Net interest income	331,983		121,940		7,599		7,759		—		—		339,582		129,699

Total net revenue	906,188		511,258		55,843		112,411		(37,523)		(67,282)		924,508		556,387

(Provision for) reversal of credit losses	(205,814)		(96,938)		—		3,287		—		—		(205,814)		(93,651)
Non-interest expense	(552,809)		(374,782)		(71,523)		(165,666)		37,523		67,282		(586,809)		(473,166)
Income (Loss) before income tax benefit (expense)	147,565		39,538		(15,680)		(49,968)		—		—		131,885		(10,430)
Income tax benefit (expense)	(39,113)		7,866		120,274		23,821		53,048		(31,785)		134,209		(98)
Net income (loss)	$	108,452	$	47,404	$	104,594	$	(26,147)	$	53,048	$	(31,785)	$	266,094	$	(10,528)

The Company integrated the Acquisition into its reportable segments in the first quarter of 2021. As the Company’s reportable segments are based on legal organizational structure and LC Bank was formed upon the Acquisition, an analysis of the Company’s results of operations and material trends for the third quarter and first nine months of 2022 compared to the second quarter of 2022 and the third quarter and first nine months of 2021 is 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: Net Income (Loss) Excluding Income Tax Benefit, Diluted EPS Excluding Income Tax Benefit, 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.

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)

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 Net Income (Loss) Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit are important measures because they reflect the financial performance of our business operations. Net Income (Loss) Excluding Income Tax Benefit adjusts for the release of a deferred tax asset valuation allowance in the third and second quarters of 2022. Diluted EPS Excluding Income Tax Benefit is a non-GAAP financial measure calculated by dividing Net Income (Loss) Excluding Income Tax Benefit by the weighted-average diluted common shares outstanding. 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.

The following tables provide a reconciliation of such measures to the nearest GAAP measures:


		As of and For The Three Months Ended						As of and For The Nine Months Ended
		September 30, 2022		June 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
GAAP Net income (loss)		$	43,198	$	182,060	$	27,185	$	266,094	$	(10,528)
Income tax benefit from release of tax valuation allowance		5,015		135,300		—		140,315		—
Net income (loss) excluding income tax benefit		$	38,183	$	46,760	$	27,185	$	125,779	$	(10,528)

GAAP Diluted EPS – common stockholders		$	0.41	$	1.73	$	0.26	$	2.56	$	(0.11)

(A)	Income tax benefit from release of tax valuation allowance	$	5,015	$	135,300	N/A		140,315		N/A
(B)	Weighted-average common shares – Diluted	105,853,938		105,042,626		N/A		$	104,116,240	N/A
(A/B)	Diluted EPS impact of income tax benefit	$	0.05	$	1.29	N/A		$	1.35	N/A

Diluted EPS excluding income tax benefit		$	0.36	$	0.44	$	0.26	$	1.21	$	(0.11)

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)


	September 30, 2022		June 30, 2022		December 31, 2021		September 30, 2021
GAAP common equity	$	1,121,410	$	1,079,117	$	850,242	$	804,790
Less: Goodwill	(75,717)		(75,717)		(75,717)		(75,717)
Less: Intangible assets	(17,512)		(18,690)		(21,181)		(22,521)
Tangible common equity	$	1,028,181	$	984,710	$	753,344	$	706,552

Book value per common share
GAAP common equity	$	1,121,410	$	1,079,117	$	850,242	$	804,790
Common shares issued and outstanding	105,088,761		103,630,776		101,043,924		99,782,192
Book value per common share	$	10.67	$	10.41	$	8.41	$	8.07

Tangible book value per common share
Tangible common equity	$	1,028,181	$	984,710	$	753,344	$	706,552
Common shares issued and outstanding	105,088,761		103,630,776		101,043,924		99,782,192
Tangible book value per common share	$	9.78	$	9.50	$	7.46	$	7.08

Supervision and Regulatory Environment

We are regularly subject to claims, individual and class action lawsuits, and lawsuits alleging regulatory violations. Further, we are subject to periodic exams, investigations, inquiries or requests, enforcement actions and other proceedings from federal and state regulatory agencies, including the federal banking regulators that directly regulate the Company and/or LC Bank. The number and/or significance of these claims, lawsuits, exams, investigations, inquiries, requests and proceedings have been increasing in part because our products and services have been increasing in scope and complexity and in part because we have become a bank holding company operating a national bank. Although historically the Company has generally resolved 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.

Regulatory Actions Taken in Relation to COVID-19

Regulators and government officials at the federal government level and in states across the country have issued orders, passed laws or otherwise issued guidance in connection with COVID-19. Some of these orders and laws have placed restrictions on debt collection activity, all or certain types of communications with delinquent borrowers or others, required that borrowers be allowed to defer payments on outstanding debt, governed credit reporting and the use of credit reporting, and placed certain restrictions and requirements on operations in the workplace. We have taken steps to monitor regulatory developments relating to COVID-19 and to comply with orders and laws applicable to our business. Given the ongoing nature of the pandemic, it is possible that additional orders, laws, or regulatory guidance may still be issued. We are not able to predict the extent of the impact on our business from any regulatory activity relating to or resulting from COVID-19.

Federal Banking Regulator Supervision

Since the Acquisition, 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 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.

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)

Consequences

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, (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, (vi) be unable to execute on certain Company initiatives, or (vii) be required to obtain a license in such jurisdiction, 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 manage 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 (U.S. Basel III). As a U.S. 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 U.S. 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 banking regulators may require a banking organization to maintain capital at levels higher than the minimum ratios prescribed under the U.S. Basel III capital framework. In this regard, and unless otherwise directed by the FRB and the OCC, we have made commitments for the Company and LC Bank (until February 2024) to maintain a CET1 risk-based capital ratio of 11.0%, a Tier 1 risk-based capital ratio above 11.0%, a total risk-based capital ratio above 13.0%, and a Tier 1 leverage ratio of 11.0%. See “Part I – Item 1. Business – Regulation and Supervision – Regulatory Capital Requirements and Prompt Corrective Action” in our Annual Report and “Notes to Condensed Consolidated Financial Statements – Note 18. 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 LC Bank’s regulatory capital amounts and ratios (in millions):


LendingClub Bank	September 30, 2022				December 31, 2021				Required Minimum plus Required CCB for Non-Leverage Ratios
	Amount		Ratio		Amount		Ratio
CET1 capital (1)	$	760.4	15.2	%	$	523.7	16.7	%	7.0	%
Tier 1 capital	$	760.4	15.2	%	$	523.7	16.7	%	8.5	%
Total capital	$	825.8	16.5	%	$	563.7	18.0	%	10.5	%
Tier 1 leverage	$	760.4	13.4	%	$	523.7	14.3	%	4.0	%
Risk-weighted assets	$	5,018.3	N/A		$	3,130.4	N/A		N/A
Quarterly adjusted average assets	$	5,692.0	N/A		$	3,667.7	N/A		N/A

N/A – Not applicable

The following table presents the regulatory capital and ratios of the Company (in millions):


	September 30, 2022				December 31, 2021				Required Minimum plus Required CCB for Non-Leverage Ratios
LendingClub	Amount		Ratio		Amount		Ratio
CET1 capital (1)	$	953.2	18.3	%	$	710.0	21.3	%	7.0	%
Tier 1 capital	$	953.2	18.3	%	$	710.0	21.3	%	8.5	%
Total capital	$	1,033.2	19.8	%	$	767.9	23.0	%	10.5	%
Tier 1 leverage	$	953.2	15.7	%	$	710.0	16.5	%	4.0	%
Risk-weighted assets	$	5,210.2	N/A		$	3,333.2	N/A		N/A
Quarterly adjusted average assets	$	6,061.4	N/A		$	4,301.7	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.

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

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)

management also involves maintaining sufficient liquidity to repay wholesale borrowings, pay operating expenses and support extraordinary funding requirements when necessary.

LendingClub Bank Liquidity

The primary sources of LC Bank short-term liquidity include cash, unencumbered AFS debt securities, and unused borrowing capacity with the Federal Home Loan Bank (FHLB). Additionally, customer deposits provide LC Bank with a significant source of relatively low-cost funds. 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 $54.7 million, or 6.0% of total net revenue, and $22.6 million, or 4.4% of total net revenue, for the first nine months of 2022 and 2021, respectively. Capital expenditures in 2022 are expected to be approximately $70 million, primarily related to costs associated with the continued development and support of our online lending marketplace platform, including regulatory compliance costs.

As of September 30, 2022 and December 31, 2021, cash and cash equivalents at LC Bank were $896.5 million and $659.9 million, respectively, reflecting the continued growth in LC Bank deposits during the first nine months of 2022. Outstanding PPPLF borrowings were $91.7 million and $271.9 million at September 30, 2022 and December 31, 2021, respectively, and are collateralized by PPP loans originated by the Company. In addition, LC Bank has available Federal Home Loan Bank of Des Moines secured borrowing capacity totaling $297.8 million and $173.4 million at September 30, 2022 and December 31, 2021, respectively. As of September 30, 2022 and December 31, 2021, LC Bank also has secured borrowing capacity available under the FRB Discount Window totaling $187.6 million and $75.2 million, respectively.

LendingClub Holding Company Liquidity

The primary source of liquidity at the holding company is $109.2 million and $88.3 million in cash and cash equivalents as of September 30, 2022 and December 31, 2021, 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, AFS securities, available funds, and cash flow from operations 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.

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

Interest Rate Sensitivity

LendingClub Bank

Loans HFI at LC Bank are funded primarily through our deposit base, and the majority of loans on LC Bank’s balance sheet, at any point in time, are retained in the HFI portfolio and accounted for at amortized cost. 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 measure this sensitivity by assessing the impact of hypothetical changes in interest rates on our net interest income results.

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 as of September 30, 2022:




200 basis point increase	(3.9)	%
100 basis point decrease	0.5	%

The impact of these projected instantaneous interest rate changes would not have a significant impact to LC Bank’s net interest income. In the 200 basis point increase simulation, net interest income would slightly decline as deposit costs reset to market prices more quickly than interest-earning assets. However, in the 100 basis point decrease simulation, the benefit from lower deposit rates would more than offset the downward repricing of interest-earning assets.

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 weighted-average yields on our 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 at fair value 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 September 30, 2022, see “Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 17. Commitments and Contingencies.”

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)

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 nine months of 2022.

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 September 30, 2022. 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 September 30, 2022, 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 third quarter of 2022, 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 17. 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, with the exception of the below.

LENDINGCLUB CORPORATION

Our business operations may be adversely impacted by political events, terrorism, military conflict or acts of war, cyber-attacks, public health issues, natural disasters, severe weather, climate change, infrastructure failure or outages, labor disputes and other business interruptions.

Our business operations are subject to interruption by, among other things, political events, terrorism, military conflict or acts of war (including the war in Ukraine), cyber-attacks, public health issues, natural disasters, severe weather, climate change, infrastructure failure or outages, labor disputes and other events which could: (i) decrease demand for our products and services, (ii) adversely affect the macroeconomy and/or our customers, or (iii) make it difficult or impossible for us to deliver a satisfactory experience to our customers. Any such events could also affect the Company by impacting the stability of our deposit base, impairing the ability of our borrowers to repay their outstanding loans, causing significant property damage or otherwise impair the value of collateral securing our loans, and/or resulting in loss of revenue and/or cause us to incur additional expenses. Furthermore, in the event of any disruption to our operations or those of the companies with whom we do business with, we could incur significant losses, require substantial recovery time and experience significant expenditures in order to resume or maintain operations, any of which could have a material adverse impact on our business, financial condition and results of operations.

For example, the Ukrainian-Russian conflict, the responses thereto (such as sanctions imposed by the United States and other countries) and any expansion thereof is likely to have unpredictable and/or adverse effects on the domestic and global economy and financial markets. Although we have not yet experienced any material direct impact from the Ukrainian-Russian conflict, in part because our business is conducted exclusively in the United States, our business, financial condition or results of operations may be impacted if the conflict prolongs and/or its impact exacerbates. Further, the Ukrainian-Russian conflict and its impact may also have the effect of heightening many of the other risks described in “Item 1A. Risk Factors” and elsewhere in our Annual Report, such as escalating inflation, elevating the possibility of a decline in economic conditions and increasing cybersecurity risk.

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

Issuer Purchases of Equity Securities

The following table summarizes purchases made by or on behalf of LendingClub of its common stock for each calendar month in the third quarter of 2022:


Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
July 1 - July 31 (1)	3,326	$	14.70	—	$	—
August 1 - August 31	—	$	—	—	$	—
September 1 - September 30 (1)	4,425	$	11.05	—	$	—
Total	7,751	$	12.62	—	$	—

(1) Represents shares that were transferred to the Company to satisfy payment of all or a portion of the exercise price in connection with the exercise of stock options.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

LENDINGCLUB CORPORATION

Item 5. Other Information

Not applicable.

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

Restated Certificate of Incorporation of LendingClub Corporation

Certificate of Amendment of Restated Certificate of Incorporation of LendingClub Corporation, effective July 5, 2019

Second Certificate of Amendment of Restated Certificate of Incorporation of LendingClub Corporation, effective June 7, 2022

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

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:

November 1, 2022

/s/ SCOTT SANBORN

Scott Sanborn

Chief Executive Officer

Date:

November 1, 2022

/s/ ANDREW LABENNE

Andrew LaBenne

Chief Financial Officer