FORM
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10-K
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
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LendingClub Corporation
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(Exact name of registrant as specified in its charter)
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Delaware
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51-0605731
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(State or other jurisdiction of
incorporation or organization)
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|
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(I.R.S. Employer
Identification No.)
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595 Market Street, Suite 200,
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||
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San Francisco,
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CA
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94105
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(Address of principal executive offices and zip code)
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Title of each class:
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Trading Symbol
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Name of each exchange on which registered:
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Common Stock, par value $0.01 per share
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LC
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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•
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Various wholly-owned Delaware limited liability companies established to enter into warehouse credit agreements with certain lenders for secured credit facilities.
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•
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Various entities established to facilitate loan sale transactions under LendingClub’s Structured Program, including sponsoring asset-backed securities transactions and Certificate Program transactions, where certain accredited investors and qualified institutional buyers have the opportunity to invest in senior and subordinated securities backed by a pool of unsecured personal whole loans.
|
•
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LC Trust I (the LC Trust), an independent Delaware business trust that acquires loans from LendingClub and holds them for the sole benefit of certain investors that have purchased trust certificates issued by the LC Trust and that are related to specific underlying loans for the benefit of the investor.
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•
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Springstone Financial, LLC (Springstone), a wholly-owned Delaware limited liability company that facilitates the origination of education and patient finance loans by third-party issuing banks.
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•
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our ability to attract and retain borrowers;
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•
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the ability of borrowers to repay loans and the plans of borrowers;
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•
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our ability to maintain investor confidence in the operation of our platform;
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•
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the likelihood of investors to continue to, directly or indirectly, invest through our platform;
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•
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our ability to secure new or additional sources of investor commitments for our platform;
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•
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expected rates of return for investors;
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•
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the effectiveness of our platform’s credit scoring models;
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•
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our ability to innovate and the success of new product initiatives;
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•
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our ability to obtain or add bank functionality and a bank charter;
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•
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the impact on the business from obtaining or adding bank functionality and a bank charter;
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•
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our ability to resolve pending governmental inquiries and private litigation, and the terms of such resolution(s);
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•
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the use of our own capital to purchase loans;
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•
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maintaining liquidity and capital availability to support purchase of loans, contractual commitments and obligations (including repurchase obligations or other commitments to purchase loans), regulatory obligations to fund loans, and general strategic directives (such as with respect to product testing or supporting our Structured Program transactions, which include sponsoring asset-backed securitization transactions and Certificate Program transactions), and to support marketplace equilibrium across our platform;
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•
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the impact of holding loans on and our ability to sell loans off our balance sheet;
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•
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transaction fees or other revenue we expect to recognize after loans are issued by the issuing banks who originate loans facilitated through our platform;
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•
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interest income on our loans invested in by the Company and the negative fair value adjustments on associated loans;
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•
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our financial condition and performance, including the impact that management’s estimates have on our financial performance and the relationship between the interim period and full year results;
|
•
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our ability, and that of third-party vendors, to maintain service and quality expectations;
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•
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capital expenditures;
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•
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interest rate risk and credit performance associated with the outstanding principal balance of loans and other securities and their impact to investor returns and demand for our products;
|
•
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the impact of new accounting standards;
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•
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the impact of pending litigation and regulatory investigations and inquiries;
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•
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our compliance with applicable local, state and Federal laws, regulations and regulatory developments or court decisions affecting our business;
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•
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our compliance with contractual obligations or restrictions;
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•
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investor, borrower, platform and loan performance-related factors that may affect our revenue;
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•
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the potential adoption rates and returns related to new products and services;
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•
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the potential impact of macro-economic developments that could impact the credit performance of our loans, notes, certificates and secured borrowings, and influence borrower and investor behavior;
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•
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the effectiveness of our cost structure simplification efforts and ability to control our cost structure;
|
•
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our ability to develop and maintain effective internal controls;
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•
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our ability to recruit and retain quality employees to support current operations and future growth;
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•
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our ability to successfully relocate people and services;
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•
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the impact of expense initiatives;
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•
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our ability to manage and repay our indebtedness; and
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•
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other risk factors listed from time to time in reports we file with the SEC.
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•
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Visitor to Member: aims to increase member engagement with LendingClub through a member center, which is intended to give members current data on their financial health.
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•
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Product to Platform: aims to leverage member engagement by presenting offers from LendingClub and its partners that may save members money.
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•
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Price efficiency: our marketplace model generates savings for borrowers by matching them with the lowest available cost of capital provided by investors.
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•
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Marketing efficiency: our broad spectrum of investors, innovation and returning members enable us to serve more borrowers and enhance our marketing efficiency.
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•
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Scale, data and innovative technology: our innovative technology and online platform enables us to generate and convert demand efficiently and at scale, while managing price and credit risk effectively.
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•
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Generating competitive risk-adjusted returns efficiently: the nature of the asset class available through, and the scale of, our marketplace platform enables us to efficiently generate competitive risk-adjusted returns for investors.
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•
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Portfolio diversification: unsecured personal loans can offer duration, geographic and/or asset diversification to investors.
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1.
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Members
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2.
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Institutional Investors
|
•
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record-keeping requirements;
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•
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restrictions on servicing practices, including limits on finance charges and fees;
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•
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restrictions on collections;
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•
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usury rate caps;
|
•
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disclosure requirements;
|
•
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examination requirements;
|
•
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surety bond and minimum net worth requirements;
|
•
|
financial reporting requirements;
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•
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notification requirements for changes in principal officers, stock ownership or corporate control;
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•
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restrictions on marketing and advertising;
|
•
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data security and privacy requirements; and
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•
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review requirements for loan forms.
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•
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Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC;
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•
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Press releases, including with respect to our quarterly earnings;
|
•
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Announcements of public conference calls and webcasts;
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•
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Corporate governance information, including our certificate of incorporation, bylaws, governance guidelines, committee charters, business conduct and ethics policy, and other governance-related policies;
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•
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Other news and market data that we may post from time to time that investors might find useful or interesting; and
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•
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Opportunity to sign up for email notifications.
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•
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become delinquent in the payment of an outstanding obligation;
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•
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defaulted on a pre-existing debt obligation;
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•
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taken on additional debt; or
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•
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sustained other adverse financial events.
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•
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difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business;
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•
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inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits;
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•
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difficulties in retaining, training, motivating and integrating key personnel;
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•
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diversion of management’s time and resources from our normal daily operations;
|
•
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difficulties in successfully incorporating licensed or acquired technology and rights into our platform;
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•
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difficulties in maintaining uniform standards, controls, procedures and policies within the combined organizations;
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•
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difficulties in retaining relationships with customers, employees and suppliers of the acquired business;
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•
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risks of entering markets in which we have no or limited direct prior experience;
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•
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regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business;
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•
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assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability;
|
•
|
failure to successfully further develop the acquired technology;
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•
|
liability for activities of the acquired or disposed of business before the acquisition or disposition, including patent and trademark infringement claims, violations of laws, regulatory actions, commercial disputes, tax liabilities and other known and unknown liabilities;
|
•
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difficulty in separating assets and replacing shared services;
|
•
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assumption of exposure to performance of any acquired loan portfolios;
|
•
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potential disruptions to our ongoing businesses; and
|
•
|
unexpected costs and unknown risks and liabilities associated with the acquisition.
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•
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establish a classified board of directors so that not all members of our board of directors are elected at one time;
|
•
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permit only our board of directors to establish the number of directors and fill vacancies on the board;
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•
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provide that directors may only be removed “for cause” and only with the approval of two-thirds of our stockholders;
|
•
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require two-thirds vote to amend some provisions in our restated Certificate of Incorporation and restated Bylaws;
|
•
|
authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan (also known as a “poison pill”);
|
•
|
eliminate the ability of our stockholders to call special meetings of stockholders;
|
•
|
prohibit stockholder action by written consent, which will require that all stockholder actions must be taken at a stockholder meeting;
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•
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do not provide for cumulative voting; and
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•
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establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
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Month
|
|
Total Number of Shares Purchased
|
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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
|
||||||
October 1 - October 31
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
November 1 - November 30
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
December 1 - December 31(1)
|
|
957
|
|
|
$
|
12.31
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
957
|
|
|
$
|
12.31
|
|
|
—
|
|
|
$
|
—
|
|
(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, and not as part of a publicly announced plan or program.
|
|
December 31, 2014
|
|
December 31, 2015
|
|
December 30, 2016
|
|
December 29, 2017
|
|
December 31, 2018
|
|
December 31, 2019
|
||||||||||||
LendingClub Corporation
|
$
|
100
|
|
|
$
|
43.68
|
|
|
$
|
20.75
|
|
|
$
|
16.32
|
|
|
$
|
10.40
|
|
|
$
|
9.98
|
|
Standard & Poor’s 500 Index
|
$
|
100
|
|
|
$
|
99.27
|
|
|
$
|
108.74
|
|
|
$
|
129.86
|
|
|
$
|
121.76
|
|
|
$
|
156.92
|
|
Dow Jones Internet Composite Index
|
$
|
100
|
|
|
$
|
122.11
|
|
|
$
|
130.99
|
|
|
$
|
180.87
|
|
|
$
|
192.64
|
|
|
$
|
230.49
|
|
As of and for the Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Transaction fees
|
$
|
598,760
|
|
|
$
|
526,942
|
|
|
$
|
448,608
|
|
|
$
|
423,494
|
|
|
$
|
373,508
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
345,345
|
|
|
487,462
|
|
|
611,259
|
|
|
696,662
|
|
|
552,972
|
|
|||||
Interest expense
|
(246,587
|
)
|
|
(385,605
|
)
|
|
(571,424
|
)
|
|
(688,368
|
)
|
|
(549,740
|
)
|
|||||
Net fair value adjustments
|
(144,990
|
)
|
|
(100,688
|
)
|
|
(30,817
|
)
|
|
(2,949
|
)
|
|
14
|
|
|||||
Net interest income and fair value adjustments
|
(46,232
|
)
|
|
1,169
|
|
|
9,018
|
|
|
5,345
|
|
|
3,246
|
|
|||||
Investor fees
|
124,532
|
|
|
114,883
|
|
|
87,108
|
|
|
79,647
|
|
|
43,787
|
|
|||||
Gain (Loss) on sales of loans
|
67,716
|
|
|
45,979
|
|
|
23,370
|
|
|
(17,152
|
)
|
|
4,885
|
|
|||||
Net investor revenue
|
146,016
|
|
|
162,031
|
|
|
119,496
|
|
|
67,840
|
|
|
51,918
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other revenue
|
13,831
|
|
|
5,839
|
|
|
6,436
|
|
|
9,478
|
|
|
4,517
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net revenue
|
758,607
|
|
|
694,812
|
|
|
574,540
|
|
|
500,812
|
|
|
429,943
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and marketing
|
279,423
|
|
|
268,517
|
|
|
229,865
|
|
|
216,670
|
|
|
171,526
|
|
|||||
Origination and servicing
|
103,403
|
|
|
99,376
|
|
|
86,891
|
|
|
74,760
|
|
|
61,335
|
|
|||||
Engineering and product development
|
168,380
|
|
|
155,255
|
|
|
142,264
|
|
|
115,357
|
|
|
77,062
|
|
|||||
Other general and administrative
|
238,292
|
|
|
228,641
|
|
|
191,683
|
|
|
207,172
|
|
|
122,182
|
|
|||||
Goodwill impairment
|
—
|
|
|
35,633
|
|
|
—
|
|
|
37,050
|
|
|
—
|
|
|||||
Class action and regulatory litigation expense
|
—
|
|
|
35,500
|
|
|
77,250
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
789,498
|
|
|
822,922
|
|
|
727,953
|
|
|
651,009
|
|
|
432,105
|
|
|||||
Loss before income tax expense
|
(30,891
|
)
|
|
(128,110
|
)
|
|
(153,413
|
)
|
|
(150,197
|
)
|
|
(2,162
|
)
|
|||||
Income tax expense (benefit)
|
(201
|
)
|
|
43
|
|
|
632
|
|
|
(4,228
|
)
|
|
2,833
|
|
|||||
Consolidated net loss
|
(30,690
|
)
|
|
(128,153
|
)
|
|
(154,045
|
)
|
|
(145,969
|
)
|
|
(4,995
|
)
|
|||||
Less: Income (Loss) attributable to noncontrolling interests
|
55
|
|
|
155
|
|
|
(210
|
)
|
|
—
|
|
|
—
|
|
|||||
LendingClub net loss
|
$
|
(30,745
|
)
|
|
$
|
(128,308
|
)
|
|
$
|
(153,835
|
)
|
|
$
|
(145,969
|
)
|
|
$
|
(4,995
|
)
|
Net loss per share attributable to LendingClub:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.35
|
)
|
|
$
|
(1.52
|
)
|
|
$
|
(1.88
|
)
|
|
$
|
(1.88
|
)
|
|
$
|
(0.07
|
)
|
Diluted
|
$
|
(0.35
|
)
|
|
$
|
(1.52
|
)
|
|
$
|
(1.88
|
)
|
|
$
|
(1.88
|
)
|
|
$
|
(0.07
|
)
|
Weighted-average common shares – Basic
|
87,278,596
|
|
|
84,583,461
|
|
|
81,799,189
|
|
|
77,552,414
|
|
|
74,974,423
|
|
|||||
Weighted-average common shares – Diluted
|
87,278,596
|
|
|
84,583,461
|
|
|
81,799,189
|
|
|
77,552,414
|
|
|
74,974,423
|
|
As of and for the Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
243,779
|
|
|
$
|
372,974
|
|
|
$
|
401,719
|
|
|
$
|
515,602
|
|
|
$
|
623,531
|
|
Securities available for sale
|
270,927
|
|
|
170,469
|
|
|
117,573
|
|
|
287,137
|
|
|
297,211
|
|
|||||
Loans held for investment at fair value
|
1,079,315
|
|
|
1,883,251
|
|
|
2,932,325
|
|
|
4,295,121
|
|
|
4,552,623
|
|
|||||
Loans held for investment by the Company at fair value
|
43,693
|
|
|
2,583
|
|
|
361,230
|
|
|
16,863
|
|
|
3,458
|
|
|||||
Loans held for sale by the Company at fair value
|
722,355
|
|
|
840,021
|
|
|
235,825
|
|
|
9,048
|
|
|
—
|
|
|||||
Total assets
|
2,982,341
|
|
|
3,819,527
|
|
|
4,640,831
|
|
|
5,562,631
|
|
|
5,793,634
|
|
|||||
Notes, certificates and secured borrowings at
fair value
|
1,081,466
|
|
|
1,905,875
|
|
|
2,954,768
|
|
|
4,320,895
|
|
|
4,571,583
|
|
|||||
Payable to securitization note and certificate holders
|
40,610
|
|
|
256,354
|
|
|
312,123
|
|
|
—
|
|
|
—
|
|
|||||
Credit facilities and securities sold under repurchase agreements
|
587,453
|
|
|
458,802
|
|
|
32,100
|
|
|
—
|
|
|
—
|
|
|||||
Total liabilities
|
2,082,154
|
|
|
2,948,546
|
|
|
3,713,074
|
|
|
4,586,861
|
|
|
4,751,774
|
|
|||||
Total LendingClub stockholders’ equity
|
$
|
900,187
|
|
|
$
|
869,201
|
|
|
$
|
927,757
|
|
|
$
|
975,770
|
|
|
$
|
1,041,860
|
|
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
||||||
Loan originations
|
$
|
3,083.1
|
|
|
$
|
3,349.6
|
|
|
$
|
3,129.5
|
|
Loans purchased or pending purchase by the Company during the quarter
|
$
|
1,749.2
|
|
|
$
|
1,543.5
|
|
|
$
|
1,182.4
|
|
LendingClub inventory (1)
|
$
|
718.2
|
|
|
$
|
755.2
|
|
|
$
|
419.1
|
|
LendingClub inventory as a percentage of loan originations (1)
|
23
|
%
|
|
23
|
%
|
|
13
|
%
|
(1)
|
LendingClub inventory reflects loans purchased or pending purchase by the Company during the period, excluding loans held by the Company through consolidated trusts, if applicable, and not yet sold as of the period end.
|
•
|
investor demand for our loans;
|
•
|
loan performance and return on investment;
|
•
|
market confidence in our data, controls, and processes;
|
•
|
announcements and terms of resolution of governmental inquiries or private litigation;
|
•
|
our ability to obtain or add bank functionality and a bank charter;
|
•
|
the impact on the business from obtaining or adding bank functionality and a bank charter;
|
•
|
the mix of borrower products and corresponding transaction fees;
|
•
|
regulatory or market factors which limit products on our platform or loan interest rates borrowers can pay;
|
•
|
availability or the timing of the deployment of investment capital by investors;
|
•
|
the availability and amount of new capital from pooled investment vehicles and managed accounts that typically deploy their capital at the start of a period;
|
•
|
the amount of purchase limitations we can impose on larger investors as a way to maintain investor balance and fairness;
|
•
|
the attractiveness of alternative opportunities for borrowers or investors, through changes in interest rates, transaction fees, terms, or risk profile;
|
•
|
the responsiveness of applicants to our marketing efforts;
|
•
|
expenditures on marketing initiatives in a period;
|
•
|
the sufficiency of operational staff to process any manual portion of the loan applications in a timely manner;
|
•
|
the responsiveness of borrowers to satisfy additional income or employment verification requirements related to their application;
|
•
|
borrower withdrawal rates;
|
•
|
the percentage distribution of loans between the whole and fractional loan platforms;
|
•
|
platform system performance;
|
•
|
seasonality in demand for our platform and services, which is generally lowest in the first quarter and also impacts the fourth quarter;
|
•
|
determination to hold loans for purposes of subsequently distributing the loans through sale or Structured Program transactions;
|
•
|
changes in the credit performance of loans or market interest rates;
|
•
|
the success of our models to predict borrower risk levels and related investor demand; and
|
•
|
other factors.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Loan originations
|
$
|
12,290,093
|
|
|
$
|
10,881,815
|
|
|
$
|
8,987,218
|
|
Sales and marketing expense as a percent of loan originations
|
2.27
|
%
|
|
2.47
|
%
|
|
2.56
|
%
|
|||
Net revenue
|
$
|
758,607
|
|
|
$
|
694,812
|
|
|
$
|
574,540
|
|
Consolidated net loss
|
$
|
(30,690
|
)
|
|
$
|
(128,153
|
)
|
|
$
|
(154,045
|
)
|
EPS – diluted (1)
|
$
|
(0.35
|
)
|
|
$
|
(1.52
|
)
|
|
$
|
(1.88
|
)
|
Contribution (2)
|
$
|
392,294
|
|
|
$
|
339,328
|
|
|
$
|
270,452
|
|
Contribution margin (2)
|
51.7
|
%
|
|
48.8
|
%
|
|
47.1
|
%
|
|||
Adjusted EBITDA (2)
|
$
|
134,772
|
|
|
$
|
97,519
|
|
|
$
|
44,587
|
|
Adjusted EBITDA margin (2)
|
17.8
|
%
|
|
14.0
|
%
|
|
7.8
|
%
|
|||
Adjusted net income (loss) (2)
|
$
|
2,182
|
|
|
$
|
(32,375
|
)
|
|
$
|
(73,236
|
)
|
Adjusted EPS – diluted (1)(2)
|
$
|
0.02
|
|
|
$
|
(0.38
|
)
|
|
$
|
(0.90
|
)
|
(1)
|
All share and per share information has been retroactively adjusted to reflect a reverse stock split. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 4. Net Loss Per Share” for additional information.
|
(2)
|
Represents non-GAAP financial measures. For more information regarding these measures and a reconciliation of these measures to the most comparable GAAP measures, see “Non-GAAP Financial Measures” below.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||||||||
(in millions, except percentages)
|
Origination Volume
|
Weighted-Average Transaction Fees
|
|
Origination Volume
|
Weighted-Average Transaction Fees
|
|
Origination Volume
|
Weighted-Average Transaction Fees
|
|||||||||
Personal loans – standard program
|
$
|
8,533.4
|
|
5.03
|
%
|
|
$
|
7,936.3
|
|
4.87
|
%
|
|
$
|
6,585.0
|
|
4.93
|
%
|
Personal loans – custom program
|
2,972.6
|
|
4.80
|
|
|
2,096.3
|
|
4.98
|
|
|
1,546.1
|
|
5.57
|
|
|||
Total personal loans
|
11,506.0
|
|
4.97
|
|
|
10,032.6
|
|
4.89
|
|
|
8,131.1
|
|
5.05
|
|
|||
Other loans
|
784.1
|
|
3.44
|
|
|
849.2
|
|
4.29
|
|
|
856.1
|
|
4.42
|
|
|||
Total
|
$
|
12,290.1
|
|
4.87
|
%
|
|
$
|
10,881.8
|
|
4.84
|
%
|
|
$
|
8,987.2
|
|
4.99
|
%
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Personal loan originations by loan grade – standard loan program:
|
Amount
|
% of Total
|
|
Amount
|
% of Total
|
|
Amount
|
% of Total
|
|||||||||
A
|
$
|
2,725.4
|
|
32
|
%
|
|
$
|
2,132.5
|
|
27
|
%
|
|
$
|
1,096.9
|
|
17
|
%
|
B
|
2,608.3
|
|
31
|
%
|
|
2,289.6
|
|
29
|
%
|
|
1,839.7
|
|
28
|
%
|
|||
C
|
1,964.6
|
|
23
|
%
|
|
2,052.2
|
|
26
|
%
|
|
2,224.9
|
|
34
|
%
|
|||
D
|
1,184.9
|
|
14
|
%
|
|
1,098.3
|
|
14
|
%
|
|
891.9
|
|
13
|
%
|
|||
E
|
50.0
|
|
—
|
%
|
|
290.1
|
|
3
|
%
|
|
340.7
|
|
5
|
%
|
|||
F
|
0.2
|
|
—
|
%
|
|
60.4
|
|
1
|
%
|
|
118.6
|
|
2
|
%
|
|||
G
|
—
|
|
—
|
%
|
|
13.2
|
|
N/M
|
|
|
72.3
|
|
1
|
%
|
|||
Total
|
$
|
8,533.4
|
|
100
|
%
|
|
$
|
7,936.3
|
|
100
|
%
|
|
$
|
6,585.0
|
|
100
|
%
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Net revenue:
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Transaction fees
|
$
|
598,760
|
|
|
$
|
526,942
|
|
|
$
|
448,608
|
|
|
|
|
|
|
|
||||||
Interest income
|
345,345
|
|
|
487,462
|
|
|
611,259
|
|
|||
Interest expense
|
(246,587
|
)
|
|
(385,605
|
)
|
|
(571,424
|
)
|
|||
Net fair value adjustments
|
(144,990
|
)
|
|
(100,688
|
)
|
|
(30,817
|
)
|
|||
Net interest income and fair value adjustments
|
(46,232
|
)
|
|
1,169
|
|
|
9,018
|
|
|||
Investor fees
|
124,532
|
|
|
114,883
|
|
|
87,108
|
|
|||
Gain on sales of loans
|
67,716
|
|
|
45,979
|
|
|
23,370
|
|
|||
Net investor revenue (1)
|
146,016
|
|
|
162,031
|
|
|
119,496
|
|
|||
|
|
|
|
|
|
||||||
Other revenue
|
13,831
|
|
|
5,839
|
|
|
6,436
|
|
|||
|
|
|
|
|
|
||||||
Total net revenue
|
758,607
|
|
|
694,812
|
|
|
574,540
|
|
|||
Operating expenses: (2)
|
|
|
|
|
|
||||||
Sales and marketing
|
279,423
|
|
|
268,517
|
|
|
229,865
|
|
|||
Origination and servicing
|
103,403
|
|
|
99,376
|
|
|
86,891
|
|
|||
Engineering and product development
|
168,380
|
|
|
155,255
|
|
|
142,264
|
|
|||
Other general and administrative
|
238,292
|
|
|
228,641
|
|
|
191,683
|
|
|||
Goodwill impairment
|
—
|
|
|
35,633
|
|
|
—
|
|
|||
Class action and regulatory litigation expense
|
—
|
|
|
35,500
|
|
|
77,250
|
|
|||
Total operating expenses
|
789,498
|
|
|
822,922
|
|
|
727,953
|
|
|||
Loss before income tax expense
|
(30,891
|
)
|
|
(128,110
|
)
|
|
(153,413
|
)
|
|||
Income tax expense (benefit)
|
(201
|
)
|
|
43
|
|
|
632
|
|
|||
Consolidated net loss
|
(30,690
|
)
|
|
(128,153
|
)
|
|
(154,045
|
)
|
|||
Less: Income (Loss) attributable to noncontrolling interests
|
55
|
|
|
155
|
|
|
(210
|
)
|
|||
LendingClub net loss
|
$
|
(30,745
|
)
|
|
$
|
(128,308
|
)
|
|
$
|
(153,835
|
)
|
(1)
|
See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1. Basis of Presentation” for additional information.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Sales and marketing
|
$
|
6,095
|
|
|
$
|
7,362
|
|
|
$
|
7,654
|
|
Origination and servicing
|
3,155
|
|
|
4,322
|
|
|
4,804
|
|
|||
Engineering and product development
|
19,860
|
|
|
20,478
|
|
|
22,047
|
|
|||
Other general and administrative
|
44,529
|
|
|
42,925
|
|
|
36,478
|
|
|||
Total stock-based compensation expense
|
$
|
73,639
|
|
|
$
|
75,087
|
|
|
$
|
70,983
|
|
Year Ended December 31,
|
2019
|
|
2018
|
|
Change ($)
|
|
Change (%)
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Transaction fees
|
$
|
598,760
|
|
|
$
|
526,942
|
|
|
$
|
71,818
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|||||||
Interest income
|
345,345
|
|
|
487,462
|
|
|
(142,117
|
)
|
|
(29
|
)%
|
|||
Interest expense
|
(246,587
|
)
|
|
(385,605
|
)
|
|
139,018
|
|
|
(36
|
)%
|
|||
Net fair value adjustments
|
(144,990
|
)
|
|
(100,688
|
)
|
|
(44,302
|
)
|
|
44
|
%
|
|||
Net interest income and fair value adjustments
|
(46,232
|
)
|
|
1,169
|
|
|
(47,401
|
)
|
|
N/M
|
|
|||
Investor fees
|
124,532
|
|
|
114,883
|
|
|
9,649
|
|
|
8
|
%
|
|||
Gain on sales of loans
|
67,716
|
|
|
45,979
|
|
|
21,737
|
|
|
47
|
%
|
|||
Net investor revenue
|
146,016
|
|
|
162,031
|
|
|
(16,015
|
)
|
|
(10
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other revenue
|
13,831
|
|
|
5,839
|
|
|
7,992
|
|
|
137
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Total net revenue
|
$
|
758,607
|
|
|
$
|
694,812
|
|
|
$
|
63,795
|
|
|
9
|
%
|
Year Ended December 31,
|
2018
|
|
2017
|
|
Change ($)
|
|
Change (%)
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Transaction fees
|
$
|
526,942
|
|
|
$
|
448,608
|
|
|
$
|
78,334
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|||||||
Interest income
|
487,462
|
|
|
611,259
|
|
|
(123,797
|
)
|
|
(20
|
)%
|
|||
Interest expense
|
(385,605
|
)
|
|
(571,424
|
)
|
|
185,819
|
|
|
(33
|
)%
|
|||
Net fair value adjustments
|
(100,688
|
)
|
|
(30,817
|
)
|
|
(69,871
|
)
|
|
N/M
|
|
|||
Net interest income and fair value adjustments
|
1,169
|
|
|
9,018
|
|
|
(7,849
|
)
|
|
(87
|
)%
|
|||
Investor fees
|
114,883
|
|
|
87,108
|
|
|
27,775
|
|
|
32
|
%
|
|||
Gain on sales of loans
|
45,979
|
|
|
23,370
|
|
|
22,609
|
|
|
97
|
%
|
|||
Net investor revenue
|
162,031
|
|
|
119,496
|
|
|
42,535
|
|
|
36
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other revenue
|
5,839
|
|
|
6,436
|
|
|
(597
|
)
|
|
(9
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Total net revenue
|
$
|
694,812
|
|
|
$
|
574,540
|
|
|
$
|
120,272
|
|
|
21
|
%
|
|
Outstanding Average Balances
|
|||||||||||||
Year Ended December 31,
|
2019
|
|
2018
|
|
Change ($)
|
|
Change (%)
|
|||||||
Loans held for investment by the Company
|
$
|
12,474
|
|
|
$
|
140,551
|
|
|
$
|
(128,077
|
)
|
|
(91
|
)%
|
Loans held for sale by the Company
|
$
|
754,693
|
|
|
$
|
546,959
|
|
|
$
|
207,734
|
|
|
38
|
%
|
Securities available for sale
|
$
|
221,166
|
|
|
$
|
144,046
|
|
|
$
|
77,120
|
|
|
54
|
%
|
Credit facilities and securities sold under repurchase agreements
|
$
|
481,960
|
|
|
$
|
299,419
|
|
|
$
|
182,541
|
|
|
61
|
%
|
Securitization notes and certificates
|
$
|
100,747
|
|
|
$
|
131,894
|
|
|
$
|
(31,147
|
)
|
|
(24
|
)%
|
Loans held for investment
|
$
|
1,574,271
|
|
|
$
|
2,557,575
|
|
|
$
|
(983,304
|
)
|
|
(38
|
)%
|
Notes, certificates and secured borrowings
|
$
|
1,576,877
|
|
|
$
|
2,599,676
|
|
|
$
|
(1,022,799
|
)
|
|
(39
|
)%
|
|
Outstanding Average Balances
|
|||||||||||||
Year Ended December 31,
|
2018
|
|
2017
|
|
Change ($)
|
|
Change (%)
|
|||||||
Loans held for investment by the Company
|
$
|
140,551
|
|
|
$
|
44,340
|
|
|
$
|
96,211
|
|
|
N/M
|
|
Loans held for sale by the Company
|
$
|
546,959
|
|
|
$
|
152,805
|
|
|
$
|
394,154
|
|
|
N/M
|
|
Securities available for sale
|
$
|
144,046
|
|
|
$
|
211,740
|
|
|
$
|
(67,694
|
)
|
|
(32
|
)%
|
Credit facilities and securities sold under repurchase agreements
|
$
|
299,419
|
|
|
$
|
32,008
|
|
|
$
|
267,411
|
|
|
N/M
|
|
Securitization notes and certificates
|
$
|
131,894
|
|
|
$
|
24,009
|
|
|
$
|
107,885
|
|
|
N/M
|
|
Loans held for investment
|
$
|
2,557,575
|
|
|
$
|
3,936,957
|
|
|
$
|
(1,379,382
|
)
|
|
(35
|
)%
|
Notes, certificates and secured borrowings
|
$
|
2,599,676
|
|
|
$
|
3,971,992
|
|
|
$
|
(1,372,316
|
)
|
|
(35
|
)%
|
Year Ended December 31,
|
2019
|
|
2018
|
|
Change ($)
|
|
Change (%)
|
|||||||
Investors Fees:
|
||||||||||||||
Whole loans sold
|
$
|
100,123
|
|
|
$
|
82,824
|
|
|
$
|
17,299
|
|
|
21
|
%
|
Notes, certificates and secured borrowings
|
24,409
|
|
|
31,955
|
|
|
(7,546
|
)
|
|
(24
|
)%
|
|||
Funds and separately managed accounts (1)
|
—
|
|
|
104
|
|
|
(104
|
)
|
|
(100
|
)%
|
|||
Total
|
$
|
124,532
|
|
|
$
|
114,883
|
|
|
$
|
9,649
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Outstanding Principal Balance of Loans Serviced On Our Platform (in millions) (2):
|
||||||||||||||
Whole loans sold
|
$
|
14,118
|
|
|
$
|
10,890
|
|
|
$
|
3,228
|
|
|
30
|
%
|
Notes, certificates and secured borrowings
|
1,149
|
|
|
2,013
|
|
|
(864
|
)
|
|
(43
|
)%
|
|||
Total excluding loans invested in by the Company
|
$
|
15,267
|
|
|
$
|
12,903
|
|
|
$
|
2,364
|
|
|
18
|
%
|
Loans invested in by the Company
|
744
|
|
|
843
|
|
|
(99
|
)
|
|
(12
|
)%
|
|||
Total
|
$
|
16,011
|
|
|
$
|
13,746
|
|
|
$
|
2,265
|
|
|
16
|
%
|
(1)
|
Funds are the private funds for which LendingClub Asset Management, LLC (LCAM), or its subsidiaries acted as general partner. In March 2019, we completed the dissolution of those funds. The Company does not expect to earn investor fees from private funds and separately managed accounts in the future.
|
(2)
|
As of the end of each respective period.
|
Year Ended December 31,
|
2018
|
|
2017
|
|
Change ($)
|
|
Change (%)
|
|||||||
Investor Fees:
|
|
|
|
|
|
|
|
|||||||
Whole loans sold
|
$
|
82,824
|
|
|
$
|
52,049
|
|
|
$
|
30,775
|
|
|
59
|
%
|
Notes, certificates and secured borrowings
|
31,955
|
|
|
32,504
|
|
|
(549
|
)
|
|
(2
|
)%
|
|||
Funds and separately managed accounts (1)
|
104
|
|
|
2,555
|
|
|
(2,451
|
)
|
|
(96
|
)%
|
|||
Total
|
$
|
114,883
|
|
|
$
|
87,108
|
|
|
$
|
27,775
|
|
|
32
|
%
|
|
|
|
|
|
|
|
|
|||||||
Outstanding Principal Balance of Loans Serviced On Our Platform (in millions) (2):
|
||||||||||||||
Whole loans sold
|
$
|
10,890
|
|
|
$
|
8,178
|
|
|
$
|
2,712
|
|
|
33
|
%
|
Notes, certificates and secured borrowings
|
2,013
|
|
|
3,142
|
|
|
(1,129
|
)
|
|
(36
|
)%
|
|||
Total excluding loans invested in by the Company
|
$
|
12,903
|
|
|
$
|
11,320
|
|
|
$
|
1,583
|
|
|
14
|
%
|
Loans invested in by the Company
|
843
|
|
|
593
|
|
|
250
|
|
|
42
|
%
|
|||
Total
|
$
|
13,746
|
|
|
$
|
11,913
|
|
|
$
|
1,833
|
|
|
15
|
%
|
(1)
|
Funds are the private funds for which LendingClub Asset Management, LLC (LCAM), or its subsidiaries acted as general partner. In March 2019, we completed the dissolution of those funds. The Company does not expect to earn investor fees from private funds and separately managed accounts in the future.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
Change ($)
|
|
Change (%)
|
|||||||
Referral revenue
|
$
|
5,474
|
|
|
$
|
3,645
|
|
|
$
|
1,829
|
|
|
50
|
%
|
Sublease revenue
|
4,637
|
|
|
397
|
|
|
4,240
|
|
|
N/M
|
|
|||
Other (1)
|
3,720
|
|
|
1,797
|
|
|
1,923
|
|
|
107
|
%
|
|||
Other revenue
|
$
|
13,831
|
|
|
$
|
5,839
|
|
|
$
|
7,992
|
|
|
137
|
%
|
Year Ended December 31,
|
2018
|
|
2017
|
|
Change ($)
|
|
Change (%)
|
|||||||
Referral revenue
|
$
|
3,645
|
|
|
$
|
5,258
|
|
|
$
|
(1,613
|
)
|
|
(31
|
)%
|
Sublease revenue
|
397
|
|
|
391
|
|
|
6
|
|
|
2
|
%
|
|||
Other (1)
|
1,797
|
|
|
787
|
|
|
1,010
|
|
|
128
|
%
|
|||
Other revenue
|
$
|
5,839
|
|
|
$
|
6,436
|
|
|
$
|
(597
|
)
|
|
(9
|
)%
|
(1)
|
Beginning in the first quarter of 2019, the Company separately reported “Sublease revenue” from “Other” in the tables above. Prior period amounts have been reclassified to conform to the current period presentation.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
Change ($)
|
|
Change (%)
|
|||||||
Sales and marketing
|
$
|
279,423
|
|
|
$
|
268,517
|
|
|
$
|
10,906
|
|
|
4
|
%
|
Origination and servicing
|
103,403
|
|
|
99,376
|
|
|
4,027
|
|
|
4
|
%
|
|||
Engineering and product development
|
168,380
|
|
|
155,255
|
|
|
13,125
|
|
|
8
|
%
|
|||
Other general and administrative
|
238,292
|
|
|
228,641
|
|
|
9,651
|
|
|
4
|
%
|
|||
Goodwill impairment
|
—
|
|
|
35,633
|
|
|
(35,633
|
)
|
|
(100
|
)%
|
|||
Class action and regulatory litigation expense
|
—
|
|
|
35,500
|
|
|
(35,500
|
)
|
|
(100
|
)%
|
|||
Total operating expenses
|
$
|
789,498
|
|
|
$
|
822,922
|
|
|
$
|
(33,424
|
)
|
|
(4
|
)%
|
Year Ended December 31,
|
2018
|
|
2017
|
|
Change ($)
|
|
Change (%)
|
|||||||
Sales and marketing
|
$
|
268,517
|
|
|
$
|
229,865
|
|
|
$
|
38,652
|
|
|
17
|
%
|
Origination and servicing
|
99,376
|
|
|
86,891
|
|
|
12,485
|
|
|
14
|
%
|
|||
Engineering and product development
|
155,255
|
|
|
142,264
|
|
|
12,991
|
|
|
9
|
%
|
|||
Other general and administrative
|
228,641
|
|
|
191,683
|
|
|
36,958
|
|
|
19
|
%
|
|||
Goodwill impairment
|
35,633
|
|
|
—
|
|
|
35,633
|
|
|
N/M
|
|
|||
Class action and regulatory litigation expense
|
35,500
|
|
|
77,250
|
|
|
(41,750
|
)
|
|
(54
|
)%
|
|||
Total operating expenses
|
$
|
822,922
|
|
|
$
|
727,953
|
|
|
$
|
94,969
|
|
|
13
|
%
|
•
|
Other companies, including companies in our industry, may calculate these measures differently, which may reduce their usefulness as a comparative measure.
|
•
|
Although depreciation, impairment and amortization are non-cash charges, the assets being depreciated, impaired and amortized may have to be replaced in the future and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements.
|
•
|
These measures do not reflect tax payments that may represent a reduction in cash available to us.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Total net revenue
|
$
|
758,607
|
|
|
$
|
694,812
|
|
|
$
|
574,540
|
|
Sales and marketing expense
|
(279,423
|
)
|
|
(268,517
|
)
|
|
(229,865
|
)
|
|||
Origination and servicing expense
|
(103,403
|
)
|
|
(99,376
|
)
|
|
(86,891
|
)
|
|||
Total direct expenses
|
(382,826
|
)
|
|
(367,893
|
)
|
|
(316,756
|
)
|
|||
Cost structure simplification expense (1)
|
7,318
|
|
|
880
|
|
|
—
|
|
|||
Stock-based compensation (2)
|
9,250
|
|
|
11,684
|
|
|
12,458
|
|
|||
(Income) Loss attributable to noncontrolling interests
|
(55
|
)
|
|
(155
|
)
|
|
210
|
|
|||
Contribution
|
$
|
392,294
|
|
|
$
|
339,328
|
|
|
$
|
270,452
|
|
Contribution margin
|
51.7
|
%
|
|
48.8
|
%
|
|
47.1
|
%
|
(1)
|
Contribution excludes the portion of personnel-related expense associated with establishing a site in the Salt Lake City area that is included in the “Sales and marketing” and “Origination and servicing” expense categories.
|
(2)
|
Contribution excludes stock-based compensation expense included in the “Sales and marketing” and “Origination and servicing” expense categories.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
LendingClub net loss
|
$
|
(30,745
|
)
|
|
$
|
(128,308
|
)
|
|
$
|
(153,835
|
)
|
Engineering and product development expense
|
168,380
|
|
|
155,255
|
|
|
142,264
|
|
|||
Other general and administrative expense
|
238,292
|
|
|
228,641
|
|
|
191,683
|
|
|||
Cost structure simplification expense (1)
|
7,318
|
|
|
880
|
|
|
—
|
|
|||
Goodwill impairment expense
|
—
|
|
|
35,633
|
|
|
—
|
|
|||
Class action and regulatory litigation expense
|
—
|
|
|
35,500
|
|
|
77,250
|
|
|||
Stock-based compensation expense (2)
|
9,250
|
|
|
11,684
|
|
|
12,458
|
|
|||
Income tax expense (benefit)
|
(201
|
)
|
|
43
|
|
|
632
|
|
|||
Contribution
|
$
|
392,294
|
|
|
$
|
339,328
|
|
|
$
|
270,452
|
|
Total net revenue
|
$
|
758,607
|
|
|
$
|
694,812
|
|
|
$
|
574,540
|
|
Contribution margin
|
51.7
|
%
|
|
48.8
|
%
|
|
47.1
|
%
|
(1)
|
Contribution excludes the portion of personnel-related expenses associated with establishing a site in the Salt Lake City area that are included in the “Sales and marketing” and “Origination and servicing” expense categories.
|
(2)
|
Contribution excludes stock-based compensation expense included in the “Sales and marketing” and “Origination and servicing” expense categories.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
LendingClub net loss
|
$
|
(30,745
|
)
|
|
$
|
(128,308
|
)
|
|
$
|
(153,835
|
)
|
Cost structure simplification expense (1)
|
9,933
|
|
|
6,782
|
|
|
—
|
|
|||
Goodwill impairment
|
—
|
|
|
35,633
|
|
|
—
|
|
|||
Legal, regulatory and other expense related to legacy issues (2)
|
19,609
|
|
|
53,518
|
|
|
80,250
|
|
|||
Acquisition and related expenses (3)
|
932
|
|
|
—
|
|
|
349
|
|
|||
Other items (4)
|
2,453
|
|
|
—
|
|
|
—
|
|
|||
Adjusted net income (loss)
|
$
|
2,182
|
|
|
$
|
(32,375
|
)
|
|
$
|
(73,236
|
)
|
Depreciation and impairment expense:
|
|
|
|
|
|
||||||
Engineering and product development
|
49,207
|
|
|
45,037
|
|
|
36,790
|
|
|||
Other general and administrative
|
6,446
|
|
|
5,852
|
|
|
5,130
|
|
|||
Amortization of intangible assets
|
3,499
|
|
|
3,875
|
|
|
4,288
|
|
|||
Stock-based compensation expense
|
73,639
|
|
|
75,087
|
|
|
70,983
|
|
|||
Income tax expense (benefit)
|
(201
|
)
|
|
43
|
|
|
632
|
|
|||
Adjusted EBITDA
|
$
|
134,772
|
|
|
$
|
97,519
|
|
|
$
|
44,587
|
|
Total net revenue
|
$
|
758,607
|
|
|
$
|
694,812
|
|
|
$
|
574,540
|
|
Adjusted EBITDA margin
|
17.8
|
%
|
|
14.0
|
%
|
|
7.8
|
%
|
|||
|
|
|
|
|
|
||||||
Weighted-average common shares – diluted (5)
|
87,278,596
|
|
|
84,583,461
|
|
|
81,799,189
|
|
|||
Weighted-average other dilutive equity awards
|
515,439
|
|
|
—
|
|
|
—
|
|
|||
Non-GAAP diluted shares (5)
|
87,794,035
|
|
|
84,583,461
|
|
|
81,799,189
|
|
|||
|
|
|
|
|
|
||||||
Adjusted EPS – diluted (5)
|
$
|
0.02
|
|
|
$
|
(0.38
|
)
|
|
$
|
(0.90
|
)
|
(1)
|
Includes personnel-related expenses associated with establishing a site in the Salt Lake City area and external advisory fees. These expenses are included in “Sales and marketing,” “Origination and servicing,” “Engineering and product development” and “Other general and administrative” expense on the Company’s Consolidated Statements of Operations. In the fourth quarter of 2018 and first quarter of 2019, also includes external advisory fees which are included in “Other general and administrative” expense on the Company’s Consolidated Statements of Operations.
|
(2)
|
In 2019, includes legacy legal expenses, expense related to the dissolution of certain private funds previously managed by LCAM, and expense related to the termination of a legacy contract, which are included in “Other general and administrative” expense, “Net fair value adjustments,” and “Other general and administrative” expense on the Company’s Consolidated Statements of Operations, respectively. Includes class action and regulatory litigation expense of $35.5 million and $77.3 million for the years ended December 31, 2018 and 2017, respectively, which is included in “Class action and regulatory litigation expense” on the Company’s Consolidated Statements of Operations. In 2018 and 2017, also includes legacy legal expenses which are included in “Other general and administrative” expense on the Company’s Consolidated Statements of Operations.
|
(3)
|
In 2019, represents costs related to the acquisition of Radius. In 2017, represents incremental compensation expense required to be paid under the purchase agreement to retain key former shareholder employees of an acquired business.
|
(4)
|
In 2019, consists of expenses related to certain non-legacy litigation and regulatory matters, which are included in “Other general and administrative” expense on the Company’s Consolidated Statements of Operations. Also includes a gain on the sale of our small business operating segment.
|
(5)
|
All share and per share information has been retroactively adjusted to reflect a reverse stock split. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 4. Net Loss Per Share” for additional information.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Retail Program (1)
|
Consolidated VIEs (2) (4)
|
All Other LendingClub (3)
|
Consolidated Balance Sheet
|
|
Retail Program (1)
|
Consolidated VIEs (2)
|
All Other LendingClub (3)
|
Consolidated Balance Sheet
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
$
|
—
|
|
$
|
243,779
|
|
$
|
243,779
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
372,974
|
|
$
|
372,974
|
|
Restricted cash
|
—
|
|
2,894
|
|
240,449
|
|
243,343
|
|
|
15,551
|
|
17,660
|
|
237,873
|
|
271,084
|
|
||||||||
Securities available for sale
|
—
|
|
—
|
|
270,927
|
|
270,927
|
|
|
—
|
|
—
|
|
170,469
|
|
170,469
|
|
||||||||
Loans held for investment at fair value
|
881,473
|
|
197,842
|
|
—
|
|
1,079,315
|
|
|
1,241,157
|
|
642,094
|
|
—
|
|
1,883,251
|
|
||||||||
Loans held for investment by the Company at fair value (4)
|
—
|
|
37,638
|
|
6,055
|
|
43,693
|
|
|
—
|
|
—
|
|
2,583
|
|
2,583
|
|
||||||||
Loans held for sale by the Company at fair value
|
—
|
|
—
|
|
722,355
|
|
722,355
|
|
|
—
|
|
245,345
|
|
594,676
|
|
840,021
|
|
||||||||
Accrued interest receivable
|
5,930
|
|
1,815
|
|
5,112
|
|
12,857
|
|
|
8,914
|
|
7,242
|
|
6,099
|
|
22,255
|
|
||||||||
Property, equipment and software, net
|
—
|
|
—
|
|
114,370
|
|
114,370
|
|
|
—
|
|
—
|
|
113,875
|
|
113,875
|
|
||||||||
Operating lease assets
|
—
|
|
—
|
|
93,485
|
|
93,485
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Intangible assets, net
|
—
|
|
—
|
|
14,549
|
|
14,549
|
|
|
—
|
|
—
|
|
18,048
|
|
18,048
|
|
||||||||
Other assets (5)
|
—
|
|
—
|
|
143,668
|
|
143,668
|
|
|
—
|
|
530
|
|
124,437
|
|
124,967
|
|
||||||||
Total assets
|
$
|
887,403
|
|
$
|
240,189
|
|
$
|
1,854,749
|
|
$
|
2,982,341
|
|
|
$
|
1,265,622
|
|
$
|
912,871
|
|
$
|
1,641,034
|
|
$
|
3,819,527
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Accounts payable
|
$
|
—
|
|
$
|
—
|
|
$
|
10,855
|
|
$
|
10,855
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7,104
|
|
$
|
7,104
|
|
Accrued interest payable
|
5,930
|
|
1,737
|
|
1,593
|
|
9,260
|
|
|
11,484
|
|
7,594
|
|
163
|
|
19,241
|
|
||||||||
Operating lease liabilities
|
—
|
|
—
|
|
112,344
|
|
112,344
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Accrued expenses and other liabilities (5)
|
—
|
|
—
|
|
142,636
|
|
142,636
|
|
|
—
|
|
15
|
|
152,103
|
|
152,118
|
|
||||||||
Payable to investors
|
—
|
|
—
|
|
97,530
|
|
97,530
|
|
|
—
|
|
—
|
|
149,052
|
|
149,052
|
|
||||||||
Notes, certificates and secured borrowings at fair value
|
881,473
|
|
197,842
|
|
2,151
|
|
1,081,466
|
|
|
1,254,138
|
|
648,908
|
|
2,829
|
|
1,905,875
|
|
||||||||
Payable to securitization note and certificate holders (4)
|
—
|
|
40,610
|
|
—
|
|
40,610
|
|
|
—
|
|
256,354
|
|
—
|
|
256,354
|
|
||||||||
Credit facilities and securities sold under repurchase agreements
|
—
|
|
—
|
|
587,453
|
|
587,453
|
|
|
—
|
|
—
|
|
458,802
|
|
458,802
|
|
||||||||
Total liabilities
|
887,403
|
|
240,189
|
|
954,562
|
|
2,082,154
|
|
|
1,265,622
|
|
912,871
|
|
770,053
|
|
2,948,546
|
|
||||||||
Total equity
|
—
|
|
—
|
|
900,187
|
|
900,187
|
|
|
—
|
|
—
|
|
870,981
|
|
870,981
|
|
||||||||
Total liabilities and equity
|
$
|
887,403
|
|
$
|
240,189
|
|
$
|
1,854,749
|
|
$
|
2,982,341
|
|
|
$
|
1,265,622
|
|
$
|
912,871
|
|
$
|
1,641,034
|
|
$
|
3,819,527
|
|
(4)
|
In the fourth quarter of 2019, the Company sponsored a new Structured Program transaction that was consolidated, resulting in an increase to “Loans held for investment by the Company at fair value” and the related “Payable to securitization note and certificate holders.” See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 14. Debt” for additional information.
|
(5)
|
In the fourth quarter of 2019, the Company presented operating lease assets and operating lease liabilities separately from “Other assets” and “Accrued expenses and other liabilities,” respectively, on its Consolidated Balance Sheets. This change in presentation had no impact on prior period amounts presented.
|
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2019 |
|
December 31,
2018 |
||||||||||
Cash and cash equivalents (1)
|
$
|
243,779
|
|
|
$
|
199,950
|
|
|
$
|
334,713
|
|
|
$
|
402,311
|
|
|
$
|
372,974
|
|
Restricted cash committed for loan purchases (2)
|
68,001
|
|
|
84,536
|
|
|
31,945
|
|
|
24,632
|
|
|
31,118
|
|
|||||
Securities available for sale
|
270,927
|
|
|
246,559
|
|
|
220,449
|
|
|
197,509
|
|
|
170,469
|
|
|||||
Loans held for investment by the Company at fair value (3)
|
43,693
|
|
|
4,211
|
|
|
5,027
|
|
|
8,757
|
|
|
2,583
|
|
|||||
Loans held for sale by the Company at fair value
|
722,355
|
|
|
710,170
|
|
|
435,083
|
|
|
552,166
|
|
|
840,021
|
|
|||||
Payable to securitization note and certificate holders (3)
|
(40,610
|
)
|
|
—
|
|
|
—
|
|
|
(233,269
|
)
|
|
(256,354
|
)
|
|||||
Credit facilities and securities sold under repurchase agreements
|
(587,453
|
)
|
|
(509,107
|
)
|
|
(324,426
|
)
|
|
(263,863
|
)
|
|
(458,802
|
)
|
|||||
Other assets and liabilities (2)
|
(6,226
|
)
|
|
(31,795
|
)
|
|
(12,089
|
)
|
|
(8,541
|
)
|
|
(31,241
|
)
|
|||||
Net cash and other financial assets (4)
|
$
|
714,466
|
|
|
$
|
704,524
|
|
|
$
|
690,702
|
|
|
$
|
679,702
|
|
|
$
|
670,768
|
|
(3)
|
In the fourth quarter of 2019, the Company sponsored a new Structured Program transaction that was consolidated, resulting in an increase to “Loans held for investment by the Company at fair value” and the related “Payable to securitization note and certificate holders.” See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 14. Debt” for additional information.
|
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2019 |
|
December 31,
2018 |
|||||
Investor Type:
|
|
|
|
|
|
|
|
|
|
|||||
Banks
|
32
|
%
|
|
38
|
%
|
|
45
|
%
|
|
49
|
%
|
|
41
|
%
|
Other institutional investors
|
25
|
%
|
|
20
|
%
|
|
21
|
%
|
|
18
|
%
|
|
19
|
%
|
LendingClub inventory (1)
|
23
|
%
|
|
23
|
%
|
|
13
|
%
|
|
10
|
%
|
|
18
|
%
|
Managed accounts
|
17
|
%
|
|
15
|
%
|
|
16
|
%
|
|
17
|
%
|
|
16
|
%
|
Self-directed retail investors
|
3
|
%
|
|
4
|
%
|
|
5
|
%
|
|
6
|
%
|
|
6
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(1)
|
LendingClub inventory reflects loans purchased or pending purchase by the Company during the period, excluding loans held by the Company through consolidated trusts, if applicable, and not yet sold as of the period end.
|
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2019 |
|
December 31,
2018 |
|||||
Percentage of loans invested in by ten largest investors
|
51
|
%
|
|
55
|
%
|
|
62
|
%
|
|
65
|
%
|
|
58
|
%
|
Percentage of loans invested in by largest single investor
|
19
|
%
|
|
29
|
%
|
|
33
|
%
|
|
36
|
%
|
|
29
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
(in millions, except percentages)
|
Outstanding Principal Balance
|
Fair
Value (2)
|
Delinquent Loans (2)
|
|
Outstanding Principal Balance
|
Fair
Value (2)
|
Delinquent Loans (2)
|
||||||||
Personal loans – standard program
|
$
|
1,144.8
|
|
93.9
|
%
|
3.1
|
%
|
|
$
|
1,994.1
|
|
93.5
|
%
|
3.5
|
%
|
Personal loans – custom program
|
4.1
|
|
94.8
|
|
5.7
|
|
|
19.2
|
|
92.8
|
|
7.1
|
|
||
Other loans (1)
|
—
|
|
—
|
|
—
|
|
|
0.1
|
|
96.0
|
|
10.6
|
|
||
Total
|
$
|
1,148.9
|
|
93.9
|
%
|
3.1
|
%
|
|
$
|
2,013.4
|
|
93.5
|
%
|
3.5
|
%
|
(1)
|
Components of other loans are less than 10% of the outstanding principal balance presented individually.
|
(2)
|
Expressed as a percent of outstanding principal balance.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
(in millions, except percentages)
|
Outstanding
Principal
Balance (2)
|
Fair
Value (3)
|
Delinquent
Loans (3)
|
|
Outstanding
Principal
Balance (2)
|
Fair
Value (3)
|
Delinquent
Loans (3)
|
||||||||
Personal loans – standard program
|
$
|
597.9
|
|
96.5
|
%
|
0.8
|
%
|
|
$
|
706.1
|
|
96.5
|
%
|
0.7
|
%
|
Personal loans – custom program
|
92.8
|
|
98.1
|
|
0.4
|
|
|
89.4
|
|
98.5
|
|
0.7
|
|
||
Other loans (1)
|
103.7
|
|
94.7
|
|
3.9
|
|
|
77.7
|
|
93.9
|
|
0.2
|
|
||
Total
|
$
|
794.4
|
|
96.4
|
%
|
1.2
|
%
|
|
$
|
873.2
|
|
96.5
|
%
|
0.7
|
%
|
(1)
|
Components of other loans are less than 10% of the outstanding principal balance if presented individually.
|
(2)
|
Includes both loans held for investment and loans held for sale.
|
(3)
|
Expressed as a percent of outstanding principal balance.
|
Total Platform (1)
|
December 31,
2019 |
September 30,
2019 |
June 30,
2019 |
March 31,
2019 |
December 31,
2018 |
|||||
Personal loans – standard program:
|
|
|
|
|
|
|||||
Annualized net charge-off rate
|
7.0
|
%
|
6.4
|
%
|
6.4
|
%
|
7.0
|
%
|
7.0
|
%
|
Weighted-average age in months
|
12.5
|
|
12.3
|
|
12.3
|
|
12.4
|
|
12.3
|
|
|
|
|
|
|
|
|||||
Personal loans – custom program:
|
|
|
|
|
|
|||||
Annualized net charge-off rate
|
11.5
|
%
|
10.9
|
%
|
10.8
|
%
|
12.8
|
%
|
12.4
|
%
|
Weighted-average age in months
|
9.4
|
|
9.3
|
|
9.9
|
|
9.7
|
|
9.5
|
|
(1)
|
Total platform comprises all loans facilitated through our lending marketplace, including whole loans sold and loans financed by notes, certificates and secured borrowings, but excluding education and patient finance loans, auto refinance loans and small business loans.
|
Loans Retained on Balance Sheet (1)
|
December 31,
2019 |
September 30,
2019 |
June 30,
2019 |
March 31,
2019 |
December 31,
2018 |
|||||
Personal loans – standard program:
|
|
|
|
|
|
|||||
Annualized net charge-off rate
|
7.1
|
%
|
6.8
|
%
|
7.1
|
%
|
8.2
|
%
|
9.0
|
%
|
Weighted-average age in months
|
12.4
|
|
12.7
|
|
15.9
|
|
15.5
|
|
14.3
|
|
|
|
|
|
|
|
|||||
Personal loans – custom program:
|
|
|
|
|
|
|||||
Annualized net charge-off rate
|
1.6
|
%
|
2.5
|
%
|
1.6
|
%
|
4.9
|
%
|
5.9
|
%
|
Weighted-average age in months
|
3.9
|
|
6.9
|
|
6.4
|
|
13.4
|
|
6.9
|
|
(1)
|
Loans retained on balance sheet include loans invested in by the Company as well as loans held for investment that are funded directly by member payment dependent notes related to our Retail Program and certificates.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Cash used for loan operating activities
|
$
|
(440,192
|
)
|
|
$
|
(701,623
|
)
|
|
$
|
(634,110
|
)
|
Cash provided by all other operating activities
|
169,548
|
|
|
61,882
|
|
|
60,722
|
|
|||
Net cash used for operating activities (1)
|
$
|
(270,644
|
)
|
|
$
|
(639,741
|
)
|
|
$
|
(573,388
|
)
|
|
|
|
|
|
|
||||||
Cash provided by loan investing activities (2)
|
$
|
611,828
|
|
|
$
|
865,707
|
|
|
$
|
819,878
|
|
Cash provided by all other investing activities
|
41,940
|
|
|
13,029
|
|
|
178,695
|
|
|||
Net cash provided by investing activities
|
$
|
653,768
|
|
|
$
|
878,736
|
|
|
$
|
998,573
|
|
|
|
|
|
|
|
||||||
Cash used for note, certificate and secured borrowings financing (2)
|
$
|
(626,241
|
)
|
|
$
|
(863,596
|
)
|
|
$
|
(826,398
|
)
|
Cash provided by issuance of securitization notes and certificates, credit facilities and securities sold under repurchase agreements
|
112,948
|
|
|
640,332
|
|
|
345,586
|
|
|||
Cash (used for) provided by all other financing activities
|
(26,767
|
)
|
|
(15,962
|
)
|
|
6,504
|
|
|||
Net cash used for financing activities
|
(540,060
|
)
|
|
(239,226
|
)
|
|
(474,308
|
)
|
|||
Net decrease in cash, cash equivalents and restricted cash
|
$
|
(156,936
|
)
|
|
$
|
(231
|
)
|
|
$
|
(49,123
|
)
|
(1)
|
Cash used for operating activities primarily includes the purchase and sale of loans held for sale by the Company.
|
(2)
|
Cash provided by loan investing activities includes the purchase of and repayment of loans held for investment. Cash used for note, certificate and secured borrowings financing activities includes the issuance of notes, certificates and secured borrowings to investors and the repayment of those notes, certificates and secured borrowings. These amounts generally correspond to and offset each other.
|
|
Less than
1 Year
|
|
1 to 3 Years
|
|
3 to 5 Years
|
|
More than
5 Years
|
|
Total
|
||||||||||
Direct mail purchase commitment (1)
|
$
|
3,807
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,807
|
|
Long-term debt obligations (2)
|
147,575
|
|
|
387,251
|
|
|
107
|
|
|
52,520
|
|
|
587,453
|
|
|||||
Operating lease obligations (3)
|
18,219
|
|
|
33,659
|
|
|
23,665
|
|
|
74,497
|
|
|
150,040
|
|
|||||
WebBank loan purchase obligation
|
91,338
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91,338
|
|
|||||
Purchase obligations
|
8,265
|
|
|
8,473
|
|
|
208
|
|
|
—
|
|
|
16,946
|
|
|||||
Total contractual obligations (4)
|
$
|
269,204
|
|
|
$
|
429,383
|
|
|
$
|
23,980
|
|
|
$
|
127,017
|
|
|
$
|
849,584
|
|
(1)
|
Represents loans as of December 31, 2019, the Company could have been required to purchase resulting from direct mail marketing efforts if such loans were not otherwise invested in by investors on the platform. As of the date of this report, no loans remained without investor commitments and the Company was not required to purchase any of these loans.
|
(2)
|
Amounts based on contractual maturity dates. The amounts presented in the “3 to 5 Years” and “More than 5 Years” columns above represent the Company’s long-term debt obligations under repurchase agreements, which are paid down based on cash flows received from the underlying securities sold. The Company expects these long-term debt obligations to be satisfied within three years.
|
(3)
|
As of December 31, 2019, the Company entered into an additional operating lease which has not yet commenced and is therefore not part of the table above nor included in the lease right-of-use asset and liability. This lease will commence when the Company obtains possession of the underlying asset, which is expected to be on April 1, 2020. The lease term is nine years and has an undiscounted future rent payment of approximately $8.7 million.
|
(4)
|
The notes and certificates issued by LendingClub and the LC Trust, respectively, have been excluded from the table above because payments on those liabilities are only required to be made by us if and when we receive the related loan payments from borrowers. Our own liquidity resources are not required to make any contractual payments on the notes or certificates, except in limited instances of proven identity fraud on a related loan.
|
|
Loans Invested in by the Company
|
||||||
December 31,
|
2019
|
|
2018
|
||||
Fair value
|
$
|
766,048
|
|
|
$
|
842,604
|
|
Discount rates
|
|
|
|
||||
100 basis point increase
|
$
|
(9,806
|
)
|
|
$
|
(10,487
|
)
|
100 basis point decrease
|
$
|
10,014
|
|
|
$
|
10,749
|
|
|
Servicing Assets
|
||||||
December 31,
|
2019
|
|
2018
|
||||
Fair value
|
$
|
89,680
|
|
|
$
|
64,006
|
|
Weighted-average market servicing rate assumption
|
0.66
|
%
|
|
0.66
|
%
|
||
Change in fair value from:
|
|
|
|
||||
Servicing rate increase by 10 basis points
|
$
|
(13,978
|
)
|
|
$
|
(10,878
|
)
|
Servicing rate decrease by 10 basis points
|
$
|
13,979
|
|
|
$
|
10,886
|
|
|
Loans Invested in by the Company
|
||||||
December 31,
|
2019
|
|
2018
|
||||
Fair value
|
$
|
766,048
|
|
|
$
|
842,604
|
|
Interest rates
|
|
|
|
||||
100 basis point increase
|
$
|
(9,806
|
)
|
|
$
|
(9,945
|
)
|
100 basis point decrease
|
$
|
10,014
|
|
|
$
|
10,163
|
|
|
Securities Available for Sale
|
||||||
December 31,
|
2019
|
|
2018
|
||||
Fair value
|
$
|
270,927
|
|
|
$
|
170,469
|
|
Interest rates
|
|
|
|
||||
100 basis point increase
|
$
|
(2,313
|
)
|
|
$
|
(1,259
|
)
|
100 basis point decrease
|
$
|
2,301
|
|
|
$
|
1,259
|
|
|
Credit Facilities and Securities Sold Under Repurchase Agreements
|
||||||
December 31,
|
2019
|
|
2018
|
||||
Carrying value
|
$
|
587,453
|
|
|
$
|
458,802
|
|
One-month LIBOR
|
|
|
|
||||
100 basis point increase
|
$
|
5,875
|
|
|
$
|
4,588
|
|
100 basis point decrease
|
$
|
(5,875
|
)
|
|
$
|
(4,588
|
)
|
|
Asset-backed Securities Related to Structured Program Transactions
|
||||||
December 31,
|
2019
|
|
2018
|
||||
Fair value
|
$
|
220,135
|
|
|
$
|
116,768
|
|
Credit loss rates
|
|
|
|
||||
10 percent increase
|
$
|
(4,326
|
)
|
|
$
|
(2,643
|
)
|
10 percent decrease
|
$
|
4,285
|
|
|
$
|
2,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
–
|
Securities Available for Sale – See Note 5. Securities Available for Sale
|
–
|
Loans Held for Investment by the Company at Fair Value – See Note 6. Loans Held for Investment, Loans Held for Sale, Notes, Certificates and Secured Borrowings
|
–
|
Loans Held for Sale by the Company at Fair Value – See Note 6. Loans Held for Investment, Loans Held for Sale, Notes, Certificates and Secured Borrowings
|
–
|
Fair Value of Assets and Liabilities – See Note 8. Fair Value of Assets and Liabilities
|
•
|
We tested the effectiveness of controls, including those related to model validation, price calibration, discount rate, loss curves, and prepayment curves.
|
•
|
We evaluated management’s ability to accurately estimate fair value by comparing management’s historical price calibration and projected prepayment and loss curves to actual results.
|
•
|
We compared management’s assumptions to external sources, including the Company’s comparable market transaction data, where available.
|
•
|
With the assistance of our fair value specialists, we developed independent estimates of fair values and compared our estimates to the Company’s estimates.
|
–
|
Commitments and Contingencies – See Note 19. Commitments and Contingencies
|
•
|
We tested the effectiveness of controls over the valuation of contingent liabilities related to outstanding and anticipated litigation and regulatory matters, including the evaluation of whether such exposures are probable or reasonably possible.
|
•
|
We tested the effectiveness of controls over the presentation and disclosure of litigation and regulatory matters.
|
•
|
We inspected board and committee meeting materials and minutes and attended meetings with General Counsel, Executives and the Audit Committee for updates on litigation and regulatory matters.
|
•
|
We sent independent third-party confirmations to external counsel and ascertained completeness of the litigation matters brought to our attention by internal counsel.
|
•
|
We evaluated the reasonableness of management’s estimates of loss contingencies by holding meetings with management and the Company’s internal counsel, reviewing the Company’s responses to regulators where applicable, and reviewing correspondence between the Company’s attorneys and the plaintiffs’ attorneys where applicable.
|
•
|
We evaluated management’s ability to estimate loss contingencies by comparing actual settlements for matters existing at the end of prior periods with their historical forecasts.
|
•
|
We obtained a legal letter from the Company’s internal counsel detailing the status of all material current litigation and regulatory matters commensurate with the date of our reports.
|
December 31,
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
243,779
|
|
|
$
|
372,974
|
|
Restricted cash (1)
|
243,343
|
|
|
271,084
|
|
||
Securities available for sale (includes $174,849 and $53,611 pledged as collateral at fair value, respectively)
|
270,927
|
|
|
170,469
|
|
||
Loans held for investment at fair value (1)
|
1,079,315
|
|
|
1,883,251
|
|
||
Loans held for investment by the Company at fair value (1)
|
43,693
|
|
|
2,583
|
|
||
Loans held for sale by the Company at fair value (1)
|
722,355
|
|
|
840,021
|
|
||
Accrued interest receivable (1)
|
12,857
|
|
|
22,255
|
|
||
Property, equipment and software, net
|
114,370
|
|
|
113,875
|
|
||
Operating lease assets (2)
|
93,485
|
|
|
—
|
|
||
Intangible assets, net
|
14,549
|
|
|
18,048
|
|
||
Other assets (1)
|
143,668
|
|
|
124,967
|
|
||
Total assets
|
$
|
2,982,341
|
|
|
$
|
3,819,527
|
|
Liabilities and Equity
|
|
|
|
||||
Accounts payable
|
$
|
10,855
|
|
|
$
|
7,104
|
|
Accrued interest payable (1)
|
9,260
|
|
|
19,241
|
|
||
Operating lease liabilities (2)
|
112,344
|
|
|
—
|
|
||
Accrued expenses and other liabilities (1)
|
142,636
|
|
|
152,118
|
|
||
Payable to investors
|
97,530
|
|
|
149,052
|
|
||
Notes, certificates and secured borrowings at fair value (1)
|
1,081,466
|
|
|
1,905,875
|
|
||
Payable to securitization note and certificate holders (includes $40,610 and $0 at fair value, respectively) (1)
|
40,610
|
|
|
256,354
|
|
||
Credit facilities and securities sold under repurchase agreements (1)
|
587,453
|
|
|
458,802
|
|
||
Total liabilities
|
2,082,154
|
|
|
2,948,546
|
|
||
Equity
|
|
|
|
||||
Common stock, $0.01 par value; 180,000,000 shares authorized; 89,218,797 and 86,384,667 shares issued, respectively; 88,757,406 and 85,928,127 shares outstanding, respectively (3)
|
892
|
|
|
864
|
|
||
Additional paid-in capital (3)
|
1,467,882
|
|
|
1,405,392
|
|
||
Accumulated deficit
|
(548,472
|
)
|
|
(517,727
|
)
|
||
Treasury stock, at cost; 461,391 and 456,540 shares, respectively (3)
|
(19,550
|
)
|
|
(19,485
|
)
|
||
Accumulated other comprehensive income (loss)
|
(565
|
)
|
|
157
|
|
||
Total LendingClub stockholders’ equity
|
900,187
|
|
|
869,201
|
|
||
Noncontrolling interests
|
—
|
|
|
1,780
|
|
||
Total equity
|
900,187
|
|
|
870,981
|
|
||
Total liabilities and equity
|
$
|
2,982,341
|
|
|
$
|
3,819,527
|
|
(1)
|
Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below.
|
(2)
|
The Company adopted ASU 2016-02, Leases, as of January 1, 2019, and has elected not to restate comparative periods presented in the consolidated financial statements. For additional information, see “Notes to Consolidated Financial Statements – Note 2. Summary of Significant Accounting Policies” and “Notes to Consolidated Financial Statements – Note 18. Leases.”
|
(3)
|
Prior period share information and balances have been retroactively adjusted to reflect a reverse stock split. See “Notes to Consolidated Financial Statements – Note 4. Net Loss Per Share” for additional information.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Net revenue:
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Transaction fees
|
$
|
598,760
|
|
|
$
|
526,942
|
|
|
$
|
448,608
|
|
|
|
|
|
|
|
||||||
Interest income
|
345,345
|
|
|
487,462
|
|
|
611,259
|
|
|||
Interest expense
|
(246,587
|
)
|
|
(385,605
|
)
|
|
(571,424
|
)
|
|||
Net fair value adjustments
|
(144,990
|
)
|
|
(100,688
|
)
|
|
(30,817
|
)
|
|||
Net interest income and fair value adjustments
|
(46,232
|
)
|
|
1,169
|
|
|
9,018
|
|
|||
Investor fees
|
124,532
|
|
|
114,883
|
|
|
87,108
|
|
|||
Gain on sales of loans
|
67,716
|
|
|
45,979
|
|
|
23,370
|
|
|||
Net investor revenue (1)
|
146,016
|
|
|
162,031
|
|
|
119,496
|
|
|||
|
|
|
|
|
|
||||||
Other revenue
|
13,831
|
|
|
5,839
|
|
|
6,436
|
|
|||
|
|
|
|
|
|
||||||
Total net revenue
|
758,607
|
|
|
694,812
|
|
|
574,540
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
279,423
|
|
|
268,517
|
|
|
229,865
|
|
|||
Origination and servicing
|
103,403
|
|
|
99,376
|
|
|
86,891
|
|
|||
Engineering and product development
|
168,380
|
|
|
155,255
|
|
|
142,264
|
|
|||
Other general and administrative
|
238,292
|
|
|
228,641
|
|
|
191,683
|
|
|||
Goodwill impairment
|
—
|
|
|
35,633
|
|
|
—
|
|
|||
Class action and regulatory litigation expense
|
—
|
|
|
35,500
|
|
|
77,250
|
|
|||
Total operating expenses
|
789,498
|
|
|
822,922
|
|
|
727,953
|
|
|||
Loss before income tax expense
|
(30,891
|
)
|
|
(128,110
|
)
|
|
(153,413
|
)
|
|||
Income tax expense (benefit)
|
(201
|
)
|
|
43
|
|
|
632
|
|
|||
Consolidated net loss
|
(30,690
|
)
|
|
(128,153
|
)
|
|
(154,045
|
)
|
|||
Less: Income (Loss) attributable to noncontrolling interests
|
55
|
|
|
155
|
|
|
(210
|
)
|
|||
LendingClub net loss
|
$
|
(30,745
|
)
|
|
$
|
(128,308
|
)
|
|
$
|
(153,835
|
)
|
Net loss per share attributable to LendingClub: (2)
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.35
|
)
|
|
$
|
(1.52
|
)
|
|
$
|
(1.88
|
)
|
Diluted
|
$
|
(0.35
|
)
|
|
$
|
(1.52
|
)
|
|
$
|
(1.88
|
)
|
Weighted-average common shares – Basic (2)
|
87,278,596
|
|
|
84,583,461
|
|
|
81,799,189
|
|
|||
Weighted-average common shares – Diluted (2)
|
87,278,596
|
|
|
84,583,461
|
|
|
81,799,189
|
|
(1)
|
See “Notes to Consolidated Financial Statements – Note 1. Basis of Presentation” for additional information.
|
(2)
|
All share and per share information has been retroactively adjusted to reflect a reverse stock split. See “Notes to Consolidated Financial Statements – Note 4. Net Loss Per Share” for additional information.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
LendingClub net loss
|
$
|
(30,745
|
)
|
|
$
|
(128,308
|
)
|
|
$
|
(153,835
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
Net unrealized gain (loss) on securities available for sale
|
(526
|
)
|
|
252
|
|
|
184
|
|
|||
Other comprehensive income (loss), before tax
|
(526
|
)
|
|
252
|
|
|
184
|
|
|||
Income tax effect
|
216
|
|
|
83
|
|
|
(591
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(742
|
)
|
|
169
|
|
|
775
|
|
|||
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
(20
|
)
|
|
7
|
|
|
13
|
|
|||
LendingClub other comprehensive income (loss), net of tax
|
(722
|
)
|
|
162
|
|
|
762
|
|
|||
LendingClub comprehensive income (loss)
|
(31,467
|
)
|
|
(128,146
|
)
|
|
(153,073
|
)
|
|||
Comprehensive income (loss) attributable to noncontrolling interests
|
(20
|
)
|
|
7
|
|
|
13
|
|
|||
Total comprehensive income (loss)
|
$
|
(31,487
|
)
|
|
$
|
(128,139
|
)
|
|
$
|
(153,060
|
)
|
LendingClub Corporation Stockholders
|
|||||||||||||||||||||||||||||||||||||
|
Common Stock (1)
|
|
Additional
Paid-in
Capital (1)
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
LendingClub Stockholders’
Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
||||||||||||||||||||||||||||
Balance at
December 31, 2016 |
79,595,954
|
|
|
$
|
801
|
|
|
$
|
1,229,408
|
|
|
456,540
|
|
|
$
|
(19,485
|
)
|
|
$
|
(767
|
)
|
|
$
|
(234,187
|
)
|
|
$
|
975,770
|
|
|
$
|
—
|
|
|
$
|
975,770
|
|
Stock-based compensation and related tax effects
|
—
|
|
|
—
|
|
|
81,599
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,397
|
)
|
|
80,202
|
|
|
—
|
|
|
80,202
|
|
||||||||
Net issuances under equity incentive plans, net of tax
|
3,634,908
|
|
|
36
|
|
|
13,949
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,985
|
|
|
—
|
|
|
13,985
|
|
||||||||
Employee stock purchase plan (ESPP) purchase shares
|
263,907
|
|
|
3
|
|
|
5,608
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,611
|
|
|
—
|
|
|
5,611
|
|
||||||||
Net unrealized gain on securities available for sale, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
762
|
|
|
—
|
|
|
762
|
|
|
13
|
|
|
775
|
|
||||||||
Contribution of interests in consolidated VIE
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,722
|
|
|
7,722
|
|
||||||||
Dividends paid and return of capital to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,263
|
)
|
|
(2,263
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(153,835
|
)
|
|
(153,835
|
)
|
|
(210
|
)
|
|
(154,045
|
)
|
||||||||
Balance at
December 31, 2017 |
83,494,769
|
|
|
$
|
840
|
|
|
$
|
1,330,564
|
|
|
456,540
|
|
|
$
|
(19,485
|
)
|
|
$
|
(5
|
)
|
|
$
|
(389,419
|
)
|
|
$
|
922,495
|
|
|
$
|
5,262
|
|
|
$
|
927,757
|
|
Stock-based compensation and related tax effects
|
—
|
|
|
—
|
|
|
84,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84,150
|
|
|
—
|
|
|
84,150
|
|
||||||||
Net issuances under equity incentive plans, net of tax
|
2,071,518
|
|
|
21
|
|
|
(14,552
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,531
|
)
|
|
—
|
|
|
(14,531
|
)
|
||||||||
ESPP purchase shares
|
361,840
|
|
|
3
|
|
|
5,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,233
|
|
|
—
|
|
|
5,233
|
|
||||||||
Net unrealized gain on securities available for sale, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|
—
|
|
|
162
|
|
|
7
|
|
|
169
|
|
||||||||
Dividends paid and return of capital to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,644
|
)
|
|
(3,644
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128,308
|
)
|
|
(128,308
|
)
|
|
155
|
|
|
(128,153
|
)
|
||||||||
Balance at
December 31, 2018 |
85,928,127
|
|
|
$
|
864
|
|
|
$
|
1,405,392
|
|
|
456,540
|
|
|
$
|
(19,485
|
)
|
|
$
|
157
|
|
|
$
|
(517,727
|
)
|
|
$
|
869,201
|
|
|
$
|
1,780
|
|
|
$
|
870,981
|
|
Stock-based compensation and related tax effects
|
—
|
|
|
—
|
|
|
79,944
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79,944
|
|
|
—
|
|
|
79,944
|
|
||||||||
Net issuances under equity incentive plans, net of tax (2)
|
2,665,309
|
|
|
26
|
|
|
(19,864
|
)
|
|
4,851
|
|
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
(19,903
|
)
|
|
—
|
|
|
(19,903
|
)
|
||||||||
ESPP purchase shares
|
163,970
|
|
|
2
|
|
|
2,410
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,412
|
|
|
—
|
|
|
2,412
|
|
||||||||
Net unrealized loss on securities available for sale, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(722
|
)
|
|
—
|
|
|
(722
|
)
|
|
(20
|
)
|
|
(742
|
)
|
||||||||
Dividends paid and return of capital to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,815
|
)
|
|
(1,815
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,745
|
)
|
|
(30,745
|
)
|
|
55
|
|
|
(30,690
|
)
|
||||||||
Balance at
December 31, 2019
|
88,757,406
|
|
|
$
|
892
|
|
|
$
|
1,467,882
|
|
|
461,391
|
|
|
$
|
(19,550
|
)
|
|
$
|
(565
|
)
|
|
$
|
(548,472
|
)
|
|
$
|
900,187
|
|
|
$
|
—
|
|
|
$
|
900,187
|
|
(1)
|
All share information and balances have been retroactively adjusted to reflect a reverse stock split. See “Notes to Consolidated Financial Statements – Note 4. Net Loss Per Share” for additional information.
|
(2)
|
Includes shares purchased by the Company in lieu of issuing fractional shares in connection with a 1-for-5 reverse stock split effective on July 5, 2019 and 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.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Consolidated net loss
|
$
|
(30,690
|
)
|
|
$
|
(128,153
|
)
|
|
$
|
(154,045
|
)
|
Adjustments to reconcile consolidated net loss to net cash used for operating activities:
|
|
|
|
|
|
||||||
Net fair value adjustments
|
144,990
|
|
|
100,688
|
|
|
30,817
|
|
|||
Change in fair value of loan servicing assets and liabilities
|
58,095
|
|
|
30,482
|
|
|
20,826
|
|
|||
Stock-based compensation, net
|
73,639
|
|
|
75,087
|
|
|
70,983
|
|
|||
Goodwill impairment charge
|
—
|
|
|
35,633
|
|
|
—
|
|
|||
Depreciation and amortization
|
59,152
|
|
|
54,764
|
|
|
46,208
|
|
|||
Gain on sales of loans
|
(67,716
|
)
|
|
(50,421
|
)
|
|
(38,850
|
)
|
|||
Other, net
|
7,483
|
|
|
5,471
|
|
|
2,744
|
|
|||
Purchase of loans held for sale
|
(7,643,996
|
)
|
|
(7,397,886
|
)
|
|
(6,714,946
|
)
|
|||
Principal payments received on loans held for sale
|
265,820
|
|
|
210,831
|
|
|
54,107
|
|
|||
Proceeds from whole loan sales and Structured Program transactions, net of underwriting fees and costs
|
6,937,984
|
|
|
6,485,432
|
|
|
6,026,729
|
|
|||
Net change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accrued interest receivable, net
|
(16,298
|
)
|
|
(3,785
|
)
|
|
6,293
|
|
|||
Other assets
|
6,609
|
|
|
52,708
|
|
|
(71,205
|
)
|
|||
Accounts payable
|
4,158
|
|
|
(3,005
|
)
|
|
(1,913
|
)
|
|||
Accrued interest payable
|
(9,843
|
)
|
|
(13,372
|
)
|
|
(10,582
|
)
|
|||
Accrued expenses and other liabilities
|
326
|
|
|
(93,424
|
)
|
|
142,020
|
|
|||
Change in payable to investors (1)
|
(60,357
|
)
|
|
(791
|
)
|
|
17,426
|
|
|||
Net cash used for operating activities
|
(270,644
|
)
|
|
(639,741
|
)
|
|
(573,388
|
)
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Purchase of loans
|
(633,632
|
)
|
|
(960,881
|
)
|
|
(1,738,710
|
)
|
|||
Principal payments received on loans
|
1,191,428
|
|
|
1,763,348
|
|
|
2,397,565
|
|
|||
Proceeds from recoveries and sales of charged-off loans
|
54,032
|
|
|
63,240
|
|
|
48,256
|
|
|||
Proceeds from sales of whole loans
|
—
|
|
|
—
|
|
|
112,767
|
|
|||
Purchases of securities available for sale
|
(144,481
|
)
|
|
(136,445
|
)
|
|
(139,770
|
)
|
|||
Proceeds from sales, maturities, redemptions and paydowns of securities available for sale
|
145,880
|
|
|
153,468
|
|
|
356,608
|
|
|||
Proceeds from paydowns of asset-backed securities related to Structured Program transactions
|
90,648
|
|
|
47,235
|
|
|
6,472
|
|
|||
Other investing activities
|
561
|
|
|
1,747
|
|
|
—
|
|
|||
Purchases of property, equipment and software, net
|
(50,668
|
)
|
|
(52,976
|
)
|
|
(44,615
|
)
|
|||
Net cash provided by investing activities
|
653,768
|
|
|
878,736
|
|
|
998,573
|
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of notes and certificates
|
632,962
|
|
|
953,904
|
|
|
1,720,884
|
|
|||
Proceeds from secured borrowings
|
—
|
|
|
—
|
|
|
280,495
|
|
|||
Repayments of secured borrowings
|
(56,884
|
)
|
|
(139,206
|
)
|
|
(42,834
|
)
|
|||
Principal payments on and retirements of notes and certificates
|
(1,147,297
|
)
|
|
(1,615,800
|
)
|
|
(2,737,029
|
)
|
|||
Payments on notes and certificates from recoveries/sales of related charged-off loans
|
(55,022
|
)
|
|
(62,494
|
)
|
|
(47,914
|
)
|
|||
Principal payments on securitization notes
|
(58,025
|
)
|
|
(45,709
|
)
|
|
—
|
|
|||
Proceeds from issuance of securitization notes and certificates
|
42,500
|
|
|
258,767
|
|
|
313,486
|
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Proceeds from credit facilities and securities sold under repurchase agreements
|
2,943,948
|
|
|
2,125,488
|
|
|
283,100
|
|
|||
Principal payments on credit facilities and securities sold under repurchase agreements
|
(2,815,475
|
)
|
|
(1,698,214
|
)
|
|
(251,000
|
)
|
|||
Payment for debt issuance costs
|
(1,419
|
)
|
|
(4,494
|
)
|
|
(5,099
|
)
|
|||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuances under equity incentive plans, net of tax
|
820
|
|
|
1,956
|
|
|
14,562
|
|
|||
Proceeds from issuance of common stock for ESPP
|
2,411
|
|
|
5,233
|
|
|
5,611
|
|
|||
Net cash inflow (outflow) from consolidation (deconsolidation) of VIE
|
(5,951
|
)
|
|
(15,013
|
)
|
|
—
|
|
|||
Purchase of noncontrolling interests in consolidated VIE
|
—
|
|
|
—
|
|
|
(6,307
|
)
|
|||
Other financing activities
|
(22,628
|
)
|
|
(3,644
|
)
|
|
(2,263
|
)
|
|||
Net cash used for financing activities
|
(540,060
|
)
|
|
(239,226
|
)
|
|
(474,308
|
)
|
|||
Net Decrease in Cash, Cash Equivalents and Restricted Cash
|
(156,936
|
)
|
|
(231
|
)
|
|
(49,123
|
)
|
|||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period
|
644,058
|
|
|
644,289
|
|
|
693,412
|
|
|||
Cash, Cash Equivalents and Restricted Cash, End of Period
|
$
|
487,122
|
|
|
$
|
644,058
|
|
|
$
|
644,289
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
254,585
|
|
|
$
|
394,459
|
|
|
$
|
581,435
|
|
Cash paid for operating leases included in the measurement of lease liabilities
|
$
|
16,816
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investing activity:
|
|
|
|
|
|
||||||
Accruals for property, equipment and software
|
$
|
1,745
|
|
|
$
|
2,256
|
|
|
$
|
710
|
|
Securities retained (sold) from Structured Program transactions
|
$
|
197,267
|
|
|
$
|
106,609
|
|
|
$
|
54,955
|
|
Non-cash investing and financing activity:
|
|
|
|
|
|
||||||
Transfer of whole loans to redeem certificates
|
$
|
122,330
|
|
|
$
|
1,095
|
|
|
$
|
130,223
|
|
Non-cash financing activity:
|
|
|
|
|
|
||||||
Derecognition of payable to securitization note and residual certificate holders held in consolidated VIE
|
$
|
200,881
|
|
|
$
|
269,151
|
|
|
$
|
—
|
|
Noncontrolling interests’ contribution of beneficial interests in consolidated VIE
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,722
|
|
Issuance of payable to securitization residual certificate holders
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,549
|
|
(1)
|
Change in payable to investors was previously presented as cash flows from financing activities. Prior period amounts have been reclassified to conform to the current period presentation.
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Cash and cash equivalents
|
$
|
243,779
|
|
|
$
|
372,974
|
|
Restricted cash
|
243,343
|
|
|
271,084
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
487,122
|
|
|
$
|
644,058
|
|
Level 1
|
—
|
Quoted market prices in active markets for identical assets or liabilities.
|
|
|
|
Level 2
|
—
|
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly.
|
|
|
|
Level 3
|
—
|
Unobservable inputs.
|
Year Ended December 31,
|
2019
|
|
2018
|
||||
Transaction fees
|
$
|
598,760
|
|
|
$
|
526,942
|
|
Referral fees
|
5,474
|
|
|
3,645
|
|
||
Total revenue from contracts with customers
|
$
|
604,234
|
|
|
$
|
530,587
|
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
LendingClub net loss
|
$
|
(30,745
|
)
|
|
$
|
(128,308
|
)
|
|
$
|
(153,835
|
)
|
Weighted-average common shares – Basic (1)
|
87,278,596
|
|
|
84,583,461
|
|
|
81,799,189
|
|
|||
Weighted-average common shares – Diluted (1)
|
87,278,596
|
|
|
84,583,461
|
|
|
81,799,189
|
|
|||
Net loss per share attributable to LendingClub: (1)
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.35
|
)
|
|
$
|
(1.52
|
)
|
|
$
|
(1.88
|
)
|
Diluted
|
$
|
(0.35
|
)
|
|
$
|
(1.52
|
)
|
|
$
|
(1.88
|
)
|
(1)
|
All share and per share information has been retroactively adjusted to reflect the reverse stock split discussed below.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
|||
Stock options
|
455,627
|
|
|
893,425
|
|
|
1,176,534
|
|
RSUs and PBRSUs
|
59,812
|
|
|
63,959
|
|
|
10,363
|
|
Total (1)
|
515,439
|
|
|
957,384
|
|
|
1,186,897
|
|
(1)
|
All share information has been retroactively adjusted to reflect the reverse stock split discussed below.
|
December 31, 2019
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Asset-backed senior securities (1)
|
$
|
108,780
|
|
|
$
|
597
|
|
|
$
|
(38
|
)
|
|
$
|
109,339
|
|
CLUB Certificate asset-backed securities (1)
|
90,728
|
|
|
41
|
|
|
(1,063
|
)
|
|
89,706
|
|
||||
Asset-backed subordinated securities (1)
|
20,888
|
|
|
423
|
|
|
(221
|
)
|
|
21,090
|
|
||||
Corporate debt securities
|
14,333
|
|
|
11
|
|
|
(1
|
)
|
|
14,343
|
|
||||
Certificates of deposit
|
13,100
|
|
|
—
|
|
|
—
|
|
|
13,100
|
|
||||
Other asset-backed securities
|
12,075
|
|
|
6
|
|
|
(1
|
)
|
|
12,080
|
|
||||
Commercial paper
|
9,274
|
|
|
—
|
|
|
—
|
|
|
9,274
|
|
||||
U.S. agency securities
|
1,995
|
|
|
—
|
|
|
—
|
|
|
1,995
|
|
||||
Total securities available for sale (2)
|
$
|
271,173
|
|
|
$
|
1,078
|
|
|
$
|
(1,324
|
)
|
|
$
|
270,927
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Asset-backed senior securities (1)(2)
|
$
|
56,363
|
|
|
$
|
188
|
|
|
$
|
(62
|
)
|
|
$
|
56,489
|
|
CLUB Certificate asset-backed securities (1)
|
48,505
|
|
|
150
|
|
|
(225
|
)
|
|
48,430
|
|
||||
Corporate debt securities
|
17,339
|
|
|
1
|
|
|
(12
|
)
|
|
17,328
|
|
||||
Certificates of deposit
|
14,929
|
|
|
—
|
|
|
—
|
|
|
14,929
|
|
||||
Asset-backed subordinated securities (1)
|
11,602
|
|
|
249
|
|
|
(2
|
)
|
|
11,849
|
|
||||
Other asset-backed securities
|
11,232
|
|
|
—
|
|
|
(7
|
)
|
|
11,225
|
|
||||
Commercial paper
|
9,720
|
|
|
—
|
|
|
—
|
|
|
9,720
|
|
||||
Other securities
|
499
|
|
|
—
|
|
|
—
|
|
|
499
|
|
||||
Total securities available for sale
|
$
|
170,189
|
|
|
$
|
588
|
|
|
$
|
(308
|
)
|
|
$
|
170,469
|
|
(1)
|
As of December 31, 2019 and 2018, $219.0 million and $115.1 million, respectively, of the asset-backed securities related to Structured Program transactions at fair value are subject to restrictions on transfer pursuant to the Company’s obligations as a “sponsor” under the U.S. Risk Retention Rules (as more fully described in “Part I – Item 1A. Risk Factors – Risk retention rules may increase our compliance costs, impair our liquidity and otherwise adversely affect our operating results.”)
|
(2)
|
As of December 31, 2019 and 2018, includes $174.8 million and $53.6 million, respectively, of securities pledged as collateral at fair value.
|
|
Less than
12 months
|
|
12 months
or longer
|
|
Total
|
||||||||||||||||||
December 31, 2019
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
Asset-backed securities related to Structured Program transactions
|
$
|
91,350
|
|
|
$
|
(1,287
|
)
|
|
$
|
1,875
|
|
|
$
|
(35
|
)
|
|
$
|
93,225
|
|
|
$
|
(1,322
|
)
|
Corporate debt securities
|
4,613
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
4,613
|
|
|
(1
|
)
|
||||||
Other asset-backed securities
|
3,062
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
3,062
|
|
|
(1
|
)
|
||||||
Total securities with unrealized losses (1)
|
$
|
99,025
|
|
|
$
|
(1,289
|
)
|
|
$
|
1,875
|
|
|
$
|
(35
|
)
|
|
$
|
100,900
|
|
|
$
|
(1,324
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Less than
12 months |
|
12 months
or longer |
|
Total
|
||||||||||||||||||
December 31, 2018
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
||||||||||||
Asset-backed securities related to Structured Program transactions
|
$
|
49,047
|
|
|
$
|
(285
|
)
|
|
$
|
1,745
|
|
|
$
|
(4
|
)
|
|
$
|
50,792
|
|
|
$
|
(289
|
)
|
Corporate debt securities
|
14,538
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
14,538
|
|
|
(12
|
)
|
||||||
Other asset-backed securities
|
11,208
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
11,208
|
|
|
(7
|
)
|
||||||
Total securities with unrealized losses (1)
|
$
|
74,793
|
|
|
$
|
(304
|
)
|
|
$
|
1,745
|
|
|
$
|
(4
|
)
|
|
$
|
76,538
|
|
|
$
|
(308
|
)
|
(1)
|
The number of investment positions with unrealized losses at December 31, 2019 and 2018 totaled 70 and 56, respectively.
|
|
Amortized Cost
|
|
Fair Value
|
||||
Within 1 year:
|
|
|
|
||||
Corporate debt securities
|
$
|
14,333
|
|
|
$
|
14,343
|
|
Certificates of deposit
|
13,100
|
|
|
13,100
|
|
||
Other asset-backed securities
|
7,756
|
|
|
7,758
|
|
||
Commercial paper
|
9,274
|
|
|
9,274
|
|
||
U.S. agency securities
|
1,995
|
|
|
1,995
|
|
||
Total
|
46,458
|
|
|
46,470
|
|
||
After 1 year through 5 years:
|
|
|
|
||||
Other asset-backed securities
|
4,319
|
|
|
4,322
|
|
||
Total
|
4,319
|
|
|
4,322
|
|
||
Asset-backed securities related to Structured Program transactions
|
220,396
|
|
|
220,135
|
|
||
Total securities available for sale
|
$
|
271,173
|
|
|
$
|
270,927
|
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Proceeds
|
$
|
12,548
|
|
|
$
|
497
|
|
|
$
|
125,522
|
|
Gross realized gains
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
196
|
|
Gross realized losses
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
(26
|
)
|
|
Loans Held for Investment
|
|
Notes, Certificates and Secured Borrowings
|
||||||||||||
December 31,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Aggregate principal balance outstanding
|
$
|
1,148,888
|
|
|
$
|
2,013,438
|
|
|
$
|
1,148,888
|
|
|
$
|
2,033,258
|
|
Net fair value adjustments
|
(69,573
|
)
|
|
(130,187
|
)
|
|
(67,422
|
)
|
|
(127,383
|
)
|
||||
Fair value
|
$
|
1,079,315
|
|
|
$
|
1,883,251
|
|
|
$
|
1,081,466
|
|
|
$
|
1,905,875
|
|
December 31,
|
2019
|
|
2018
|
||||
Notes
|
$
|
863,488
|
|
|
$
|
1,176,333
|
|
Certificates
|
197,842
|
|
|
648,908
|
|
||
Secured borrowings
|
20,136
|
|
|
80,634
|
|
||
Total notes, certificates and secured borrowings
|
$
|
1,081,466
|
|
|
$
|
1,905,875
|
|
|
Loans Invested in by the Company
|
||||||||||||||||||||||
|
Loans Held for Investment
|
|
Loans Held for Sale
|
|
Total
|
||||||||||||||||||
December 31,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Aggregate principal balance outstanding
|
$
|
47,042
|
|
|
$
|
3,518
|
|
|
$
|
747,394
|
|
|
$
|
869,715
|
|
|
$
|
794,436
|
|
|
$
|
873,233
|
|
Net fair value adjustments
|
(3,349
|
)
|
|
(935
|
)
|
|
(25,039
|
)
|
|
(29,694
|
)
|
|
(28,388
|
)
|
|
(30,629
|
)
|
||||||
Fair value
|
$
|
43,693
|
|
|
$
|
2,583
|
|
|
$
|
722,355
|
|
|
$
|
840,021
|
|
|
$
|
766,048
|
|
|
$
|
842,604
|
|
December 31,
|
2019
|
|
2018
|
||||
Loans held for investment:
|
|
|
|
||||
Outstanding principal balance
|
$
|
10,755
|
|
|
$
|
19,707
|
|
Net fair value adjustments
|
(9,663
|
)
|
|
(16,166
|
)
|
||
Fair value
|
$
|
1,092
|
|
|
$
|
3,541
|
|
Number of loans (not in thousands)
|
1,428
|
|
|
2,309
|
|
||
|
|
|
|
||||
Loans invested in by the Company:
|
|
|
|
||||
Outstanding principal balance
|
$
|
2,315
|
|
|
$
|
2,060
|
|
Net fair value adjustments
|
(2,016
|
)
|
|
(1,710
|
)
|
||
Fair value
|
$
|
299
|
|
|
$
|
350
|
|
Number of loans (not in thousands)
|
338
|
|
|
356
|
|
December 31, 2019
|
Consolidated VIEs
|
|
Unconsolidated VIEs
|
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Restricted cash
|
$
|
30,046
|
|
|
$
|
—
|
|
|
$
|
30,046
|
|
Securities available for sale at fair value
|
—
|
|
|
220,135
|
|
|
220,135
|
|
|||
Loans held for investment at fair value
|
197,842
|
|
|
—
|
|
|
197,842
|
|
|||
Loans held for investment by the Company at fair value
|
40,251
|
|
|
—
|
|
|
40,251
|
|
|||
Loans held for sale by the Company at fair value
|
551,455
|
|
|
—
|
|
|
551,455
|
|
|||
Accrued interest receivable
|
4,431
|
|
|
877
|
|
|
5,308
|
|
|||
Other assets
|
1,359
|
|
|
52,098
|
|
|
53,457
|
|
|||
Total assets
|
$
|
825,384
|
|
|
$
|
273,110
|
|
|
$
|
1,098,494
|
|
Liabilities
|
|
|
|
|
|
||||||
Accrued interest payable
|
$
|
3,185
|
|
|
$
|
—
|
|
|
$
|
3,185
|
|
Accrued expenses and other liabilities
|
244
|
|
|
—
|
|
|
244
|
|
|||
Notes, certificates and secured borrowings at fair value
|
197,842
|
|
|
—
|
|
|
197,842
|
|
|||
Credit facilities and securities sold under repurchase agreements
|
387,251
|
|
|
—
|
|
|
387,251
|
|
|||
Payable to securitization note and certificate holders at fair value
|
40,610
|
|
|
—
|
|
|
40,610
|
|
|||
Total liabilities
|
629,132
|
|
|
—
|
|
|
629,132
|
|
|||
Total net assets
|
$
|
196,252
|
|
|
$
|
273,110
|
|
|
$
|
469,362
|
|
December 31, 2018
|
Consolidated VIEs
|
|
Unconsolidated VIEs
|
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Restricted cash
|
$
|
43,918
|
|
|
$
|
—
|
|
|
$
|
43,918
|
|
Securities available for sale at fair value
|
—
|
|
|
116,768
|
|
|
116,768
|
|
|||
Loans held for investment at fair value
|
642,094
|
|
|
—
|
|
|
642,094
|
|
|||
Loans held for sale by the Company at fair value
|
739,216
|
|
|
—
|
|
|
739,216
|
|
|||
Accrued interest receivable
|
10,438
|
|
|
1,214
|
|
|
11,652
|
|
|||
Other assets
|
2,498
|
|
|
29,206
|
|
|
31,704
|
|
|||
Total assets
|
$
|
1,438,164
|
|
|
$
|
147,188
|
|
|
$
|
1,585,352
|
|
Liabilities
|
|
|
|
|
|
||||||
Accrued interest payable
|
$
|
7,594
|
|
|
$
|
—
|
|
|
$
|
7,594
|
|
Accrued expenses and other liabilities
|
1,627
|
|
|
—
|
|
|
1,627
|
|
|||
Notes, certificates and secured borrowings at fair value
|
648,908
|
|
|
—
|
|
|
648,908
|
|
|||
Payable to securitization note and certificate holders
|
256,354
|
|
|
—
|
|
|
256,354
|
|
|||
Credit facilities and securities sold under repurchase agreements
|
306,790
|
|
|
57,012
|
|
|
363,802
|
|
|||
Total liabilities
|
1,221,273
|
|
|
57,012
|
|
|
1,278,285
|
|
|||
Total net assets
|
$
|
216,891
|
|
|
$
|
90,176
|
|
|
$
|
307,067
|
|
December 31, 2019
|
Assets
|
|
Liabilities
|
|
Net Assets
|
||||||
LC Trust
|
$
|
201,696
|
|
|
$
|
(199,520
|
)
|
|
$
|
2,176
|
|
Consolidated Trusts
|
43,300
|
|
|
(40,687
|
)
|
|
2,613
|
|
|||
Warehouse credit facilities
|
580,388
|
|
|
(388,925
|
)
|
|
191,463
|
|
|||
Total consolidated VIEs
|
$
|
825,384
|
|
|
$
|
(629,132
|
)
|
|
$
|
196,252
|
|
December 31, 2018
|
Assets
|
|
Liabilities
|
|
Net Assets
|
||||||
LC Trust
|
$
|
657,339
|
|
|
$
|
(656,088
|
)
|
|
$
|
1,251
|
|
Consolidated Trusts
|
297,821
|
|
|
(256,901
|
)
|
|
40,920
|
|
|||
Warehouse credit facility
|
483,004
|
|
|
(308,284
|
)
|
|
174,720
|
|
|||
Total consolidated VIEs
|
$
|
1,438,164
|
|
|
$
|
(1,221,273
|
)
|
|
$
|
216,891
|
|
December 31, 2019
|
|
Carrying Value
|
|||||||||||||||||||||||||
|
Total VIE Assets
|
|
Securities Available for Sale
|
|
Accrued Interest Receivable
|
|
Other Assets
|
|
Accrued Expenses and Other Liabilities
|
|
Securities Sold Under Repurchase Agreements
|
|
Net Assets
|
||||||||||||||
Unconsolidated Trusts
|
$
|
1,909,219
|
|
|
$
|
93,881
|
|
|
$
|
362
|
|
|
$
|
18,768
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
113,011
|
|
Certificate Program
|
2,585,957
|
|
|
126,254
|
|
|
515
|
|
|
25,588
|
|
|
—
|
|
|
—
|
|
|
152,357
|
|
|||||||
Investment Fund
|
34,170
|
|
|
—
|
|
|
—
|
|
|
7,742
|
|
|
—
|
|
|
—
|
|
|
7,742
|
|
|||||||
Total unconsolidated VIEs
|
$
|
4,529,346
|
|
|
$
|
220,135
|
|
|
$
|
877
|
|
|
$
|
52,098
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
273,110
|
|
December 31, 2019
|
Maximum Exposure to Loss
|
||||||||||||||||||||||
|
Securities Available for Sale
|
|
Accrued Interest Receivable
|
|
Other Assets
|
|
Accrued Expenses and Other Liabilities
|
|
Securities Sold Under Repurchase Agreements
|
|
Total Exposure
|
||||||||||||
Unconsolidated Trusts
|
$
|
93,881
|
|
|
$
|
362
|
|
|
$
|
18,768
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
113,011
|
|
Certificate Program
|
126,254
|
|
|
515
|
|
|
25,588
|
|
|
—
|
|
|
—
|
|
|
152,357
|
|
||||||
Investment Fund
|
—
|
|
|
—
|
|
|
7,742
|
|
|
—
|
|
|
—
|
|
|
7,742
|
|
||||||
Total unconsolidated VIEs
|
$
|
220,135
|
|
|
$
|
877
|
|
|
$
|
52,098
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
273,110
|
|
December 31, 2018
|
Carrying Value
|
||||||||||||||||||||||||||
|
Total VIE Assets
|
|
Securities Available for Sale
|
|
Accrued Interest Receivable
|
|
Other Assets
|
|
Accrued Expenses and Other Liabilities
|
|
Securities Sold Under Repurchase Agreements
|
|
Net Assets
|
||||||||||||||
Unconsolidated Trusts
|
$
|
1,359,367
|
|
|
$
|
68,338
|
|
|
$
|
958
|
|
|
$
|
11,838
|
|
|
$
|
—
|
|
|
$
|
(57,012
|
)
|
|
$
|
24,122
|
|
Certificate Program
|
973,815
|
|
|
48,430
|
|
|
256
|
|
|
9,115
|
|
|
—
|
|
|
—
|
|
|
57,801
|
|
|||||||
Investment Fund
|
35,157
|
|
|
—
|
|
|
—
|
|
|
8,253
|
|
|
—
|
|
|
—
|
|
|
8,253
|
|
|||||||
Total unconsolidated VIEs
|
$
|
2,368,339
|
|
|
$
|
116,768
|
|
|
$
|
1,214
|
|
|
$
|
29,206
|
|
|
$
|
—
|
|
|
$
|
(57,012
|
)
|
|
$
|
90,176
|
|
December 31, 2018
|
Maximum Exposure to Loss
|
||||||||||||||||||||||
|
Securities Available for Sale
|
|
Accrued Interest Receivable
|
|
Other Assets
|
|
Accrued Expenses and Other Liabilities
|
|
Securities Sold Under Repurchase Agreements
|
|
Total Exposure
|
||||||||||||
Unconsolidated Trusts
|
$
|
68,339
|
|
|
$
|
958
|
|
|
$
|
11,838
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81,135
|
|
Certificate Program
|
48,431
|
|
|
256
|
|
|
9,115
|
|
|
—
|
|
|
—
|
|
|
57,802
|
|
||||||
Investment Fund
|
—
|
|
|
—
|
|
|
8,253
|
|
|
—
|
|
|
—
|
|
|
8,253
|
|
||||||
Total unconsolidated VIEs
|
$
|
116,770
|
|
|
$
|
1,214
|
|
|
$
|
29,206
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
147,190
|
|
Year Ended December 31,
|
2019
|
|
2018
|
||||||||||||
|
Unconsolidated Trusts
|
|
Unconsolidated Certificate
Program Trusts |
|
Unconsolidated Trusts
|
|
Unconsolidated Certificate
Program Trusts |
||||||||
Principal derecognized from loans securitized or sold
|
$
|
1,553,847
|
|
|
$
|
2,868,709
|
|
|
$
|
1,300,838
|
|
|
$
|
1,145,616
|
|
Net gains (losses) recognized from loans securitized or sold
|
$
|
4,809
|
|
|
$
|
32,417
|
|
|
$
|
6,039
|
|
|
$
|
10,483
|
|
Fair value of asset-backed senior and subordinated securities, and CLUB Certificate asset-backed securities retained upon settlement (1)
|
$
|
75,924
|
|
|
$
|
140,825
|
|
|
$
|
65,653
|
|
|
$
|
56,764
|
|
Cash proceeds from loans securitized or sold
|
$
|
1,212,521
|
|
|
$
|
2,555,713
|
|
|
$
|
867,875
|
|
|
$
|
1,088,212
|
|
Cash proceeds from servicing and other administrative fees on loans securitized or sold
|
$
|
16,961
|
|
|
$
|
17,071
|
|
|
$
|
13,725
|
|
|
$
|
3,650
|
|
Cash proceeds for interest received on senior securities and subordinated securities
|
$
|
5,022
|
|
|
$
|
7,717
|
|
|
$
|
3,049
|
|
|
$
|
1,747
|
|
(1)
|
For Structured Program transactions, the Company retained asset-backed senior securities of $98.7 million and $57.3 million, CLUB Certificate asset-backed securities of $101.3 million and $56.8 million, and asset-backed subordinated securities of $16.8 million and $8.3 million for the years ended December 31, 2019 and 2018, respectively.
|
December 31, 2019
|
Level 1 Inputs
|
|
Level 2 Inputs
|
|
Level 3 Inputs
|
|
Balance at Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Loans held for investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,079,315
|
|
|
$
|
1,079,315
|
|
Loans held for investment by the Company
|
—
|
|
|
—
|
|
|
43,693
|
|
|
43,693
|
|
||||
Loans held for sale by the Company
|
—
|
|
|
—
|
|
|
722,355
|
|
|
722,355
|
|
||||
Securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Asset-backed senior securities and subordinated securities
|
—
|
|
|
109,339
|
|
|
21,090
|
|
|
130,429
|
|
||||
CLUB Certificate asset-backed securities
|
—
|
|
|
—
|
|
|
89,706
|
|
|
89,706
|
|
||||
Corporate debt securities
|
—
|
|
|
14,343
|
|
|
—
|
|
|
14,343
|
|
||||
Certificates of deposit
|
|
|
|
13,100
|
|
|
—
|
|
|
13,100
|
|
||||
Other asset-backed securities
|
—
|
|
|
12,080
|
|
|
—
|
|
|
12,080
|
|
||||
Commercial paper
|
—
|
|
|
9,274
|
|
|
—
|
|
|
9,274
|
|
||||
U.S. agency securities
|
—
|
|
|
1,995
|
|
|
—
|
|
|
1,995
|
|
||||
Total securities available for sale
|
—
|
|
|
160,131
|
|
|
110,796
|
|
|
270,927
|
|
||||
Servicing assets
|
—
|
|
|
—
|
|
|
89,680
|
|
|
89,680
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
160,131
|
|
|
$
|
2,045,839
|
|
|
$
|
2,205,970
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Notes, certificates and secured borrowings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,081,466
|
|
|
$
|
1,081,466
|
|
Payable to securitization note and certificate holders
|
—
|
|
|
—
|
|
|
40,610
|
|
|
40,610
|
|
||||
Loan trailing fee liability
|
—
|
|
|
—
|
|
|
11,099
|
|
|
11,099
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,133,175
|
|
|
$
|
1,133,175
|
|
December 31, 2018
|
Level 1 Inputs
|
|
Level 2 Inputs
|
|
Level 3 Inputs
|
|
Balance at
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Loans held for investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,883,251
|
|
|
$
|
1,883,251
|
|
Loans held for investment by the Company
|
—
|
|
|
—
|
|
|
2,583
|
|
|
2,583
|
|
||||
Loans held for sale by the Company
|
—
|
|
|
—
|
|
|
840,021
|
|
|
840,021
|
|
||||
Securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Asset-backed senior securities and subordinated securities
|
—
|
|
|
56,489
|
|
|
11,849
|
|
|
68,338
|
|
||||
Certificates of deposit
|
—
|
|
|
14,929
|
|
|
—
|
|
|
14,929
|
|
||||
Corporate debt securities
|
—
|
|
|
17,328
|
|
|
—
|
|
|
17,328
|
|
||||
Other asset-backed securities
|
—
|
|
|
11,225
|
|
|
—
|
|
|
11,225
|
|
||||
Commercial paper
|
—
|
|
|
9,720
|
|
|
—
|
|
|
9,720
|
|
||||
CLUB Certificate asset-backed securities
|
—
|
|
|
—
|
|
|
48,430
|
|
|
48,430
|
|
||||
Other securities
|
—
|
|
|
499
|
|
|
—
|
|
|
499
|
|
||||
Total securities available for sale
|
—
|
|
|
110,190
|
|
|
60,279
|
|
|
170,469
|
|
||||
Servicing assets
|
—
|
|
|
—
|
|
|
64,006
|
|
|
64,006
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
110,190
|
|
|
$
|
2,850,140
|
|
|
$
|
2,960,330
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Note, certificates and secured borrowings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,905,875
|
|
|
$
|
1,905,875
|
|
Loan trailing fee liability
|
—
|
|
|
—
|
|
|
10,010
|
|
|
10,010
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,915,885
|
|
|
$
|
1,915,885
|
|
|
|
|
Loans Held for Investment, Notes, Certificates and Secured Borrowings
|
||||||||||||||||||||
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||
|
|
|
|
|
|
|
Minimum
|
|
Maximum
|
|
Weighted-
Average
|
|
Minimum
|
|
Maximum
|
|
Weighted-
Average
|
||||||
Discount rates
|
|
6.0
|
%
|
|
12.0
|
%
|
|
7.9
|
%
|
|
6.3
|
%
|
|
16.4
|
%
|
|
9.1
|
%
|
|||||
Net cumulative expected loss rates (1)
|
|
3.6
|
%
|
|
34.9
|
%
|
|
11.9
|
%
|
|
2.8
|
%
|
|
36.9
|
%
|
|
12.8
|
%
|
|||||
Cumulative expected prepayment rates (1)
|
|
28.7
|
%
|
|
38.6
|
%
|
|
31.7
|
%
|
|
27.8
|
%
|
|
40.3
|
%
|
|
31.2
|
%
|
(1)
|
Expressed as a percentage of the original principal balance of the loan, note, certificate or secured borrowing.
|
|
Loans Held For Investment
|
|
Loans Held for Sale
|
|
Notes, Certificates
and Secured Borrowings
|
||||||||||||||||||||||||||||||
|
Outstanding Principal Balance
|
|
Valuation Adjustment
|
|
Fair Value
|
|
Outstanding Principal Balance
|
|
Valuation Adjustment
|
|
Fair Value
|
|
Outstanding Principal Balance
|
|
Valuation Adjustment
|
|
Fair Value
|
||||||||||||||||||
Balance at December 31, 2017
|
$
|
3,141,391
|
|
|
$
|
(209,066
|
)
|
|
$
|
2,932,325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,161,080
|
|
|
$
|
(206,312
|
)
|
|
$
|
2,954,768
|
|
Purchases
|
953,034
|
|
|
26
|
|
|
953,060
|
|
|
3,141,891
|
|
|
(5,714
|
)
|
|
3,136,177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Transfers (to) from loans held for investment and/or loans held for sale
|
(1,180
|
)
|
|
(22,152
|
)
|
|
(23,332
|
)
|
|
1,180
|
|
|
22,152
|
|
|
23,332
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
953,904
|
|
|
—
|
|
|
953,904
|
|
|||||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,143,071
|
)
|
|
1,548
|
|
|
(3,141,523
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Principal payments and retirements
|
(1,754,293
|
)
|
|
—
|
|
|
(1,754,293
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,756,212
|
)
|
|
111
|
|
|
(1,756,101
|
)
|
|||||||||
Charge-offs, net of recoveries
|
(325,514
|
)
|
|
263,022
|
|
|
(62,492
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(325,514
|
)
|
|
263,020
|
|
|
(62,494
|
)
|
|||||||||
Change in fair value recorded in earnings
|
—
|
|
|
(162,017
|
)
|
|
(162,017
|
)
|
|
—
|
|
|
(17,986
|
)
|
|
(17,986
|
)
|
|
—
|
|
|
(184,202
|
)
|
|
(184,202
|
)
|
|||||||||
Balance at December 31, 2018
|
$
|
2,013,438
|
|
|
$
|
(130,187
|
)
|
|
$
|
1,883,251
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,033,258
|
|
|
$
|
(127,383
|
)
|
|
$
|
1,905,875
|
|
Purchases
|
632,962
|
|
|
(21
|
)
|
|
632,941
|
|
|
2,490,734
|
|
|
(26,560
|
)
|
|
2,464,174
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Transfers (to) from loans held for investment and/or loans held for sale
|
(123,036
|
)
|
|
—
|
|
|
(123,036
|
)
|
|
122,330
|
|
|
—
|
|
|
122,330
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
632,962
|
|
|
—
|
|
|
632,962
|
|
|||||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,613,064
|
)
|
|
24,789
|
|
|
(2,588,275
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Principal payments and retirements
|
(1,183,670
|
)
|
|
—
|
|
|
(1,183,670
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,326,526
|
)
|
|
14
|
|
|
(1,326,512
|
)
|
|||||||||
Charge-offs, net of recoveries
|
(190,806
|
)
|
|
138,857
|
|
|
(51,949
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(190,806
|
)
|
|
135,785
|
|
|
(55,021
|
)
|
|||||||||
Change in fair value recorded in earnings
|
—
|
|
|
(78,222
|
)
|
|
(78,222
|
)
|
|
—
|
|
|
1,771
|
|
|
1,771
|
|
|
—
|
|
|
(75,838
|
)
|
|
(75,838
|
)
|
|||||||||
Balance at December 31, 2019
|
$
|
1,148,888
|
|
|
$
|
(69,573
|
)
|
|
$
|
1,079,315
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,148,888
|
|
|
$
|
(67,422
|
)
|
|
$
|
1,081,466
|
|
|
|
|
|
Loans Invested in by the Company
|
|||||||||||||||||||
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||
|
|
|
|
|
|
|
Minimum
|
|
Maximum
|
|
Weighted-
Average |
|
Minimum
|
|
Maximum
|
|
Weighted-
Average |
||||||
Discount rates
|
|
6.0
|
%
|
|
11.5
|
%
|
|
7.8
|
%
|
|
5.9
|
%
|
|
16.7
|
%
|
|
9.4
|
%
|
|||||
Net cumulative expected loss rates (1)
|
|
3.6
|
%
|
|
36.6
|
%
|
|
10.9
|
%
|
|
2.6
|
%
|
|
36.8
|
%
|
|
13.2
|
%
|
|||||
Cumulative expected prepayment rates (1)
|
|
27.3
|
%
|
|
41.0
|
%
|
|
31.6
|
%
|
|
27.0
|
%
|
|
45.5
|
%
|
|
32.5
|
%
|
(1)
|
Expressed as a percentage of the original principal balance of the loan.
|
|
December 31, 2019
|
December 31, 2018
|
||||
Fair value of loans invested in by the Company
|
$
|
766,048
|
|
$
|
842,604
|
|
Expected weighted-average life (in years)
|
1.5
|
|
1.4
|
|
||
Discount rates
|
|
|
||||
100 basis point increase
|
$
|
(9,806
|
)
|
$
|
(10,487
|
)
|
200 basis point increase
|
$
|
(19,410
|
)
|
$
|
(20,720
|
)
|
Expected credit loss rates on underlying loans
|
|
|
||||
10% adverse change
|
$
|
(9,558
|
)
|
$
|
(11,304
|
)
|
20% adverse change
|
$
|
(19,136
|
)
|
$
|
(22,504
|
)
|
Expected prepayment rates
|
|
|
||||
10% adverse change
|
$
|
(2,429
|
)
|
$
|
(2,422
|
)
|
20% adverse change
|
$
|
(4,740
|
)
|
$
|
(4,785
|
)
|
|
Loans Held For Investment
by the Company
|
|
Loans Held For Sale
by the Company
|
|
Total Loans Invested
in by the Company
|
||||||||||||||||||||||||||||||
|
Outstanding Principal Balance
|
|
Valuation Adjustment
|
|
Fair Value
|
|
Outstanding Principal Balance
|
|
Valuation Adjustment
|
|
Fair Value
|
|
Outstanding Principal Balance
|
|
Valuation Adjustment
|
|
Fair Value
|
||||||||||||||||||
Balance at
December 31, 2017
|
$
|
371,379
|
|
|
$
|
(10,149
|
)
|
|
$
|
361,230
|
|
|
$
|
242,273
|
|
|
$
|
(6,448
|
)
|
|
$
|
235,825
|
|
|
$
|
613,652
|
|
|
$
|
(16,597
|
)
|
|
$
|
597,055
|
|
Purchases
|
8,697
|
|
|
(876
|
)
|
|
7,821
|
|
|
4,353,458
|
|
|
(2,739
|
)
|
|
4,350,719
|
|
|
4,362,155
|
|
|
(3,615
|
)
|
|
4,358,540
|
|
|||||||||
Transfers (to) from loans held for investment and/or loans held for sale
|
(324,626
|
)
|
|
22,152
|
|
|
(302,474
|
)
|
|
324,626
|
|
|
(22,152
|
)
|
|
302,474
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,862,910
|
)
|
|
72,742
|
|
|
(3,790,168
|
)
|
|
(3,862,910
|
)
|
|
72,742
|
|
|
(3,790,168
|
)
|
|||||||||
Principal payments and retirements
|
(47,552
|
)
|
|
—
|
|
|
(47,552
|
)
|
|
(172,334
|
)
|
|
—
|
|
|
(172,334
|
)
|
|
(219,886
|
)
|
|
—
|
|
|
(219,886
|
)
|
|||||||||
Charge-offs, net of recoveries
|
(4,380
|
)
|
|
3,633
|
|
|
(747
|
)
|
|
(15,398
|
)
|
|
15,223
|
|
|
(175
|
)
|
|
(19,778
|
)
|
|
18,856
|
|
|
(922
|
)
|
|||||||||
Change in fair value recorded in earnings
|
—
|
|
|
(15,695
|
)
|
|
(15,695
|
)
|
|
—
|
|
|
(86,320
|
)
|
|
(86,320
|
)
|
|
—
|
|
|
(102,015
|
)
|
|
(102,015
|
)
|
|||||||||
Balance at
December 31, 2018
|
$
|
3,518
|
|
|
$
|
(935
|
)
|
|
$
|
2,583
|
|
|
$
|
869,715
|
|
|
$
|
(29,694
|
)
|
|
$
|
840,021
|
|
|
$
|
873,233
|
|
|
$
|
(30,629
|
)
|
|
$
|
842,604
|
|
Purchases
|
2,993
|
|
|
(2,303
|
)
|
|
690
|
|
|
5,343,146
|
|
|
1
|
|
|
5,343,147
|
|
|
5,346,139
|
|
|
(2,302
|
)
|
|
5,343,837
|
|
|||||||||
Transfers (to) from loans held for investment and/or loans held for sale
|
49,996
|
|
|
(1,471
|
)
|
|
48,525
|
|
|
(49,290
|
)
|
|
1,471
|
|
|
(47,819
|
)
|
|
706
|
|
|
—
|
|
|
706
|
|
|||||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,122,450
|
)
|
|
119,369
|
|
|
(5,003,081
|
)
|
|
(5,122,450
|
)
|
|
119,369
|
|
|
(5,003,081
|
)
|
|||||||||
Principal payments and retirements
|
(5,214
|
)
|
|
—
|
|
|
(5,214
|
)
|
|
(268,366
|
)
|
|
—
|
|
|
(268,366
|
)
|
|
(273,580
|
)
|
|
—
|
|
|
(273,580
|
)
|
|||||||||
Charge-offs, net of recoveries
|
(4,251
|
)
|
|
2,169
|
|
|
(2,082
|
)
|
|
(25,361
|
)
|
|
23,973
|
|
|
(1,388
|
)
|
|
(29,612
|
)
|
|
26,142
|
|
|
(3,470
|
)
|
|||||||||
Change in fair value recorded in earnings
|
—
|
|
|
(809
|
)
|
|
(809
|
)
|
|
—
|
|
|
(140,159
|
)
|
|
(140,159
|
)
|
|
—
|
|
|
(140,968
|
)
|
|
(140,968
|
)
|
|||||||||
Balance at
December 31, 2019
|
$
|
47,042
|
|
|
$
|
(3,349
|
)
|
|
$
|
43,693
|
|
|
$
|
747,394
|
|
|
$
|
(25,039
|
)
|
|
$
|
722,355
|
|
|
$
|
794,436
|
|
|
$
|
(28,388
|
)
|
|
$
|
766,048
|
|
|
|
|
|
Asset-Backed Securities Related to Structured Program Transactions
|
|||||||||||||||||||
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||
|
|
|
|
|
|
|
Minimum
|
|
Maximum
|
|
Weighted-
Average |
|
Minimum
|
|
Maximum
|
|
Weighted-
Average |
||||||
Discount rates
|
|
3.4
|
%
|
|
20.7
|
%
|
|
8.8
|
%
|
|
3.2
|
%
|
|
19.6
|
%
|
|
8.8
|
%
|
|||||
Net cumulative expected loss rates (1)
|
|
4.5
|
%
|
|
37.9
|
%
|
|
19.2
|
%
|
|
6.3
|
%
|
|
43.9
|
%
|
|
18.4
|
%
|
|||||
Cumulative expected prepayment rate (1)
|
|
17.3
|
%
|
|
35.1
|
%
|
|
29.4
|
%
|
|
21.0
|
%
|
|
33.0
|
%
|
|
30.1
|
%
|
(1)
|
Expressed as a percentage of the outstanding collateral balance.
|
|
December 31, 2019
|
||||||||||
|
Asset-Backed Securities Related to
Structured Program Transactions |
||||||||||
|
Senior
Securities |
|
Subordinated Securities
|
|
CLUB Certificates
|
||||||
Fair value of interests held
|
$
|
109,339
|
|
|
$
|
21,090
|
|
|
$
|
89,706
|
|
Expected weighted-average life (in years)
|
1.1
|
|
|
1.4
|
|
|
1.1
|
|
|||
Discount rates
|
|
|
|
|
|
||||||
100 basis point increase
|
$
|
(1,050
|
)
|
|
$
|
(300
|
)
|
|
$
|
(823
|
)
|
200 basis point increase
|
$
|
(2,076
|
)
|
|
$
|
(513
|
)
|
|
$
|
(1,627
|
)
|
Expected credit loss rates on underlying loans
|
|
|
|
|
|
||||||
10% adverse change
|
$
|
—
|
|
|
$
|
(2,162
|
)
|
|
$
|
(2,163
|
)
|
20% adverse change
|
$
|
—
|
|
|
$
|
(4,273
|
)
|
|
$
|
(4,311
|
)
|
Expected prepayment rates
|
|
|
|
|
|
||||||
10% adverse change
|
$
|
—
|
|
|
$
|
(814
|
)
|
|
$
|
(654
|
)
|
20% adverse change
|
$
|
—
|
|
|
$
|
(1,495
|
)
|
|
$
|
(1,279
|
)
|
|
December 31, 2018
|
||||||||||
|
Asset-Backed Securities Related to
Structured Program Transactions |
||||||||||
|
Senior
Securities |
|
Subordinated Securities
|
|
CLUB Certificates
|
||||||
Fair value of interests held
|
$
|
56,489
|
|
|
$
|
11,849
|
|
|
$
|
48,430
|
|
Expected weighted-average life (in years)
|
1.0
|
|
|
1.3
|
|
|
1.2
|
|
|||
Discount rates
|
|
|
|
|
|
||||||
100 basis point increase
|
$
|
(526
|
)
|
|
$
|
(149
|
)
|
|
$
|
(472
|
)
|
200 basis point increase
|
$
|
(1,032
|
)
|
|
$
|
(293
|
)
|
|
$
|
(932
|
)
|
Expected credit loss rates on underlying loans
|
|
|
|
|
|
||||||
10% adverse change
|
$
|
—
|
|
|
$
|
(1,573
|
)
|
|
$
|
(1,070
|
)
|
20% adverse change
|
$
|
—
|
|
|
$
|
(3,159
|
)
|
|
$
|
(2,112
|
)
|
Expected prepayment rates
|
|
|
|
|
|
||||||
10% adverse change
|
$
|
—
|
|
|
$
|
(786
|
)
|
|
$
|
(291
|
)
|
20% adverse change
|
$
|
—
|
|
|
$
|
(1,599
|
)
|
|
$
|
(562
|
)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Fair value at beginning of period
|
$
|
60,279
|
|
|
$
|
10,029
|
|
Additions
|
118,721
|
|
|
65,098
|
|
||
Redemptions
|
(17,900
|
)
|
|
(2,742
|
)
|
||
Cash received
|
(45,701
|
)
|
|
(9,329
|
)
|
||
Change in unrealized gain (loss)
|
(992
|
)
|
|
201
|
|
||
Other-than-temporary impairment
|
(3,611
|
)
|
|
(2,978
|
)
|
||
Fair value at end of period
|
$
|
110,796
|
|
|
$
|
60,279
|
|
|
|
|
|
Servicing Assets
|
|||||||||||||||||||
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||
|
|
|
|
|
|
|
Minimum
|
|
Maximum
|
|
Weighted-
Average |
|
Minimum
|
|
Maximum
|
|
Weighted-Average
|
||||||
Discount rates
|
|
2.9
|
%
|
|
14.8
|
%
|
|
8.6
|
%
|
|
4.8
|
%
|
|
16.7
|
%
|
|
9.0
|
%
|
|||||
Net cumulative expected loss rates (1)
|
|
3.7
|
%
|
|
36.1
|
%
|
|
12.4
|
%
|
|
2.8
|
%
|
|
38.7
|
%
|
|
12.5
|
%
|
|||||
Cumulative expected prepayment rates (1)
|
|
27.5
|
%
|
|
41.8
|
%
|
|
32.5
|
%
|
|
13.9
|
%
|
|
42.9
|
%
|
|
31.9
|
%
|
|||||
Total market servicing rates (% per annum on outstanding principal balance) (2)
|
|
0.66
|
%
|
|
0.66
|
%
|
|
0.66
|
%
|
|
0.66
|
%
|
|
0.66
|
%
|
|
0.66
|
%
|
(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.
|
|
Servicing Assets
|
||||||
|
December 31, 2019
|
|
December 31, 2018
|
||||
Weighted-average market servicing rate assumptions
|
0.66
|
%
|
|
0.66
|
%
|
||
Change in fair value from:
|
|
|
|
||||
Servicing rate increase by 0.10%
|
$
|
(13,978
|
)
|
|
$
|
(10,878
|
)
|
Servicing rate decrease by 0.10%
|
$
|
13,979
|
|
|
$
|
10,886
|
|
|
Servicing Assets
|
||
Fair value at December 31, 2017
|
$
|
33,676
|
|
Issuances (1)
|
55,403
|
|
|
Change in fair value, included in investor fees
|
(31,233
|
)
|
|
Other net changes included in deferred revenue
|
6,160
|
|
|
Fair value at December 31, 2018
|
$
|
64,006
|
|
Issuances (1)
|
79,692
|
|
|
Change in fair value, included in investor fees
|
(58,172
|
)
|
|
Other net changes included in deferred revenue
|
4,154
|
|
|
Fair value at December 31, 2019
|
$
|
89,680
|
|
(1)
|
Represents the gains or losses on sales of the related loans.
|
|
|
|
|
Loan Trailing Fee Liability
|
|||||||||||||||||||
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||
|
|
|
|
|
|
|
Minimum
|
|
Maximum
|
|
Weighted
Average- |
|
Minimum
|
|
Maximum
|
|
Weighted
Average- |
||||||
Discount rates
|
|
2.9
|
%
|
|
14.8
|
%
|
|
9.3
|
%
|
|
4.8
|
%
|
|
16.7
|
%
|
|
9.5
|
%
|
|||||
Net cumulative expected loss rates (1)
|
|
3.7
|
%
|
|
36.0
|
%
|
|
14.4
|
%
|
|
2.8
|
%
|
|
38.7
|
%
|
|
14.0
|
%
|
|||||
Cumulative expected prepayment rates (1)
|
|
28.5
|
%
|
|
41.7
|
%
|
|
33.0
|
%
|
|
16.5
|
%
|
|
43.1
|
%
|
|
32.2
|
%
|
(1)
|
Expressed as a percentage of the original principal balance of the loan.
|
Year Ended December 31,
|
2019
|
|
2018
|
||||
Fair value at beginning of period
|
$
|
10,010
|
|
|
$
|
8,432
|
|
Issuances
|
7,815
|
|
|
7,614
|
|
||
Cash payment of Loan Trailing Fee
|
(7,908
|
)
|
|
(6,803
|
)
|
||
Change in fair value, included in Origination and Servicing
|
1,182
|
|
|
767
|
|
||
Fair value at end of period
|
$
|
11,099
|
|
|
$
|
10,010
|
|
December 31, 2019
|
Carrying Amount
|
|
Level 1 Inputs
|
|
Level 2 Inputs
|
|
Level 3 Inputs
|
|
Balance at
Fair Value
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents (1)
|
$
|
243,779
|
|
|
$
|
—
|
|
|
$
|
243,779
|
|
|
$
|
—
|
|
|
$
|
243,779
|
|
Restricted cash (1)
|
243,343
|
|
|
—
|
|
|
243,343
|
|
|
—
|
|
|
243,343
|
|
|||||
Servicer reserve receivable
|
73
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|||||
Deposits
|
953
|
|
|
—
|
|
|
953
|
|
|
—
|
|
|
953
|
|
|||||
Total assets
|
$
|
488,148
|
|
|
$
|
—
|
|
|
$
|
488,148
|
|
|
$
|
—
|
|
|
$
|
488,148
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued expenses and other liabilities
|
$
|
24,899
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,899
|
|
|
$
|
24,899
|
|
Accounts payable
|
10,855
|
|
|
—
|
|
|
10,855
|
|
|
—
|
|
|
10,855
|
|
|||||
Payable to investors
|
97,530
|
|
|
—
|
|
|
97,530
|
|
|
—
|
|
|
97,530
|
|
|||||
Credit facilities and securities sold under repurchase agreements
|
587,453
|
|
|
—
|
|
|
77,143
|
|
|
510,310
|
|
|
587,453
|
|
|||||
Total liabilities
|
$
|
720,737
|
|
|
$
|
—
|
|
|
$
|
185,528
|
|
|
$
|
535,209
|
|
|
$
|
720,737
|
|
(1)
|
Carrying amount approximates fair value due to the short maturity of these financial instruments.
|
December 31, 2018
|
Carrying Amount
|
|
Level 1 Inputs
|
|
Level 2 Inputs
|
|
Level 3 Inputs
|
|
Balance at
Fair Value
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents (1)
|
$
|
372,974
|
|
|
$
|
—
|
|
|
$
|
372,974
|
|
|
$
|
—
|
|
|
$
|
372,974
|
|
Restricted cash (1)
|
271,084
|
|
|
—
|
|
|
271,084
|
|
|
—
|
|
|
271,084
|
|
|||||
Servicer reserve receivable
|
669
|
|
|
—
|
|
|
669
|
|
|
—
|
|
|
669
|
|
|||||
Deposits
|
1,093
|
|
|
—
|
|
|
1,093
|
|
|
—
|
|
|
1,093
|
|
|||||
Total assets
|
$
|
645,820
|
|
|
$
|
—
|
|
|
$
|
645,820
|
|
|
$
|
—
|
|
|
$
|
645,820
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued expenses and other liabilities
|
$
|
18,483
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,483
|
|
|
$
|
18,483
|
|
Accounts payable
|
7,104
|
|
|
—
|
|
|
7,104
|
|
|
—
|
|
|
7,104
|
|
|||||
Payable to investors
|
149,052
|
|
|
—
|
|
|
149,052
|
|
|
—
|
|
|
149,052
|
|
|||||
Payable to securitization note and certificate holders
|
256,354
|
|
|
—
|
|
|
256,354
|
|
|
—
|
|
|
256,354
|
|
|||||
Credit facilities and securities sold under repurchase agreements
|
458,802
|
|
|
—
|
|
|
57,012
|
|
|
401,790
|
|
|
458,802
|
|
|||||
Total liabilities
|
$
|
889,795
|
|
|
$
|
—
|
|
|
$
|
469,522
|
|
|
$
|
420,273
|
|
|
$
|
889,795
|
|
(1)
|
Carrying amount approximates fair value due to the short maturity of these financial instruments.
|
December 31,
|
2019
|
|
2018
|
||||
Internally developed software (1)
|
$
|
117,510
|
|
|
$
|
141,233
|
|
Leasehold improvements
|
39,315
|
|
|
31,109
|
|
||
Computer equipment
|
26,669
|
|
|
24,204
|
|
||
Purchased software
|
11,846
|
|
|
10,139
|
|
||
Furniture and fixtures
|
9,406
|
|
|
8,468
|
|
||
Construction in progress
|
4,937
|
|
|
4,106
|
|
||
Total property, equipment and software
|
209,683
|
|
|
219,259
|
|
||
Accumulated depreciation and amortization
|
(95,313
|
)
|
|
(105,384
|
)
|
||
Total property, equipment and software, net
|
$
|
114,370
|
|
|
$
|
113,875
|
|
(1)
|
Includes $21.3 million and $10.3 million in development in progress as of December 31, 2019 and 2018, respectively.
|
December 31,
|
2019
|
|
2018
|
||||
Loan servicing assets, at fair value (1)
|
$
|
89,680
|
|
|
$
|
64,006
|
|
Accounts receivable
|
19,017
|
|
|
19,322
|
|
||
Prepaid expenses
|
14,862
|
|
|
25,598
|
|
||
Other investments
|
8,242
|
|
|
8,503
|
|
||
Deferred financing costs
|
1,484
|
|
|
2,117
|
|
||
Other
|
10,383
|
|
|
5,421
|
|
||
Total other assets
|
$
|
143,668
|
|
|
$
|
124,967
|
|
(1)
|
Loans underlying loan servicing rights had a total outstanding principal balance of $14.1 billion and $10.9 billion as of December 31, 2019 and 2018, respectively.
|
December 31,
|
2019
|
|
2018
|
||||
Gross Carrying Value
|
$
|
39,500
|
|
|
$
|
39,500
|
|
Accumulated Amortization
|
(24,951
|
)
|
|
(21,452
|
)
|
||
Net Carrying Value
|
$
|
14,549
|
|
|
$
|
18,048
|
|
Year Ending December 31,
|
|
||
2020
|
$
|
3,122
|
|
2021
|
2,746
|
|
|
2022
|
2,370
|
|
|
2023
|
1,994
|
|
|
2024
|
1,618
|
|
|
Thereafter
|
2,699
|
|
|
Total
|
$
|
14,549
|
|
Balance at December 31, 2017
|
$
|
35,633
|
|
Goodwill impairment
|
35,633
|
|
|
Balance at December 31, 2018
|
$
|
—
|
|
Goodwill impairment
|
—
|
|
|
Balance at December 31, 2019
|
$
|
—
|
|
December 31,
|
2019
|
|
2018
|
||||
Accrued expenses
|
$
|
36,797
|
|
|
$
|
42,507
|
|
Accrued compensation
|
30,484
|
|
|
36,105
|
|
||
Transaction fee refund reserve
|
25,541
|
|
|
19,543
|
|
||
Contingent liabilities (1)
|
16,000
|
|
|
12,750
|
|
||
Deferred revenue
|
13,688
|
|
|
9,420
|
|
||
Loan trailing fee liability, at fair value
|
11,099
|
|
|
10,010
|
|
||
Payable to issuing banks
|
1,332
|
|
|
1,182
|
|
||
Deferred rent (2)
|
—
|
|
|
16,211
|
|
||
Other
|
7,695
|
|
|
4,390
|
|
||
Total accrued expenses and other liabilities
|
$
|
142,636
|
|
|
$
|
152,118
|
|
(1)
|
See “Note 19. Commitments and Contingencies” for further information.
|
(2)
|
The Company adopted ASU 2016-02, Leases, as of January 1, 2019. As such, effective January 1, 2019, deferred rent is included within operating lease liabilities on the Company’s consolidated balance sheets. For additional information, see “Note 2. Summary of Significant Accounting Policies” and “Note 18. Leases.”
|
Year Ended December 31,
|
2019
|
||||||||||
|
Before Tax
|
|
Tax Effect
|
|
Net of Tax
|
||||||
Change in net unrealized gain (loss) on securities available for sale
|
$
|
(526
|
)
|
|
$
|
216
|
|
|
$
|
(742
|
)
|
Other comprehensive income (loss)
|
$
|
(526
|
)
|
|
$
|
216
|
|
|
$
|
(742
|
)
|
Year Ended December 31,
|
2018
|
||||||||||
|
Before Tax
|
|
Tax Effect
|
|
Net of Tax
|
||||||
Change in net unrealized gain (loss) on securities available for sale
|
$
|
252
|
|
|
$
|
83
|
|
|
$
|
169
|
|
Other comprehensive income (loss)
|
$
|
252
|
|
|
$
|
83
|
|
|
$
|
169
|
|
Year Ended December 31,
|
2017
|
||||||||||
|
Before Tax
|
|
Tax Effect
|
|
Net of Tax
|
||||||
Change in net unrealized gain (loss) on securities available for sale
|
$
|
184
|
|
|
$
|
(591
|
)
|
|
$
|
775
|
|
Other comprehensive income (loss)
|
$
|
184
|
|
|
$
|
(591
|
)
|
|
$
|
775
|
|
|
Total
Accumulated Other Comprehensive Income (Loss)
|
||
Balance at December 31, 2017
|
$
|
(5
|
)
|
Change in net unrealized gain (loss) on securities available for sale
|
169
|
|
|
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
7
|
|
|
Balance at December 31, 2018
|
$
|
157
|
|
Change in net unrealized gain (loss) on securities available for sale
|
(742
|
)
|
|
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
(20
|
)
|
|
Balance at December 31, 2019
|
$
|
(565
|
)
|
December 31,
|
2019
|
|
2018
|
||
Unvested RSUs, PBRSUs and stock options outstanding
|
12,323,868
|
|
|
12,047,376
|
|
Available for future RSU, PBRSU and stock option grants
|
12,861,058
|
|
|
10,387,200
|
|
Available for ESPP
|
3,123,203
|
|
|
2,307,400
|
|
Total reserved for future issuance (1)
|
28,308,129
|
|
|
24,741,976
|
|
(1)
|
All share information has been retroactively adjusted to reflect a reverse stock split. See “Note 4. Net Loss Per Share” for additional information.
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
RSUs and PBRSUs
|
$
|
70,772
|
|
|
$
|
66,005
|
|
|
$
|
54,116
|
|
Stock options
|
2,383
|
|
|
7,387
|
|
|
15,103
|
|
|||
ESPP
|
484
|
|
|
1,695
|
|
|
1,605
|
|
|||
Stock issued related to acquisition
|
—
|
|
|
—
|
|
|
159
|
|
|||
Total stock-based compensation expense
|
$
|
73,639
|
|
|
$
|
75,087
|
|
|
$
|
70,983
|
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Sales and marketing
|
$
|
6,095
|
|
|
$
|
7,362
|
|
|
$
|
7,654
|
|
Origination and servicing
|
3,155
|
|
|
4,322
|
|
|
4,804
|
|
|||
Engineering and product development
|
19,860
|
|
|
20,478
|
|
|
22,047
|
|
|||
Other general and administrative
|
44,529
|
|
|
42,925
|
|
|
36,478
|
|
|||
Total stock-based compensation expense
|
$
|
73,639
|
|
|
$
|
75,087
|
|
|
$
|
70,983
|
|
|
Number
of Units (1)
|
|
Weighted-
Average
Grant Date
Fair Value (1)
|
|||
Unvested at December 31, 2018
|
8,639,802
|
|
|
$
|
20.23
|
|
Granted
|
7,531,283
|
|
|
$
|
15.23
|
|
Vested
|
(3,545,198
|
)
|
|
$
|
20.43
|
|
Forfeited/expired
|
(3,028,483
|
)
|
|
$
|
18.49
|
|
Unvested at December 31, 2019
|
9,597,404
|
|
|
$
|
16.78
|
|
(1)
|
Amounts have been retroactively adjusted to reflect a reverse stock split. See “Note 4. Net Loss Per Share” for additional information.
|
|
Number
of Units (1)
|
|
Weighted-
Average
Grant Date
Fair Value (1)
|
|||
Unvested at December 31, 2018
|
254,643
|
|
|
$
|
18.54
|
|
Granted
|
373,810
|
|
|
$
|
16.42
|
|
Vested
|
(97,776
|
)
|
|
$
|
18.91
|
|
Forfeited/expired (2)
|
(59,088
|
)
|
|
$
|
17.32
|
|
Unvested at December 31, 2019
|
471,589
|
|
|
$
|
16.94
|
|
(1)
|
Amounts have been retroactively adjusted to reflect a reverse stock split. See “Note 4. Net Loss Per Share” for additional information.
|
(2)
|
Represents the portion of PBRSUs granted in 2018 that were unearned as a result of not achieving certain pre-established performance metrics during the performance period.
|
|
Number of
Options (1)
|
|
Weighted-Average
Exercise
Price Per
Share (1)
|
|
Weighted-Average
Remaining
Contractual Life (in years)
|
|
Aggregate
Intrinsic
Value (2)
(in thousands)
|
|||||
Outstanding at December 31, 2018
|
3,152,929
|
|
|
$
|
25.80
|
|
|
|
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
(470,666
|
)
|
|
$
|
1.85
|
|
|
|
|
|
||
Forfeited/Expired
|
(427,375
|
)
|
|
$
|
33.74
|
|
|
|
|
|
||
Outstanding at December 31, 2019
|
2,254,888
|
|
|
$
|
29.27
|
|
|
4.2
|
|
$
|
5,528
|
|
Exercisable at December 31, 2019
|
2,193,730
|
|
|
$
|
29.16
|
|
|
4.1
|
|
$
|
5,528
|
|
(1)
|
Amounts have been retroactively adjusted to reflect a reverse stock split. See “Note 4. Net Loss Per Share” for additional information.
|
(2)
|
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company’s closing stock price of $12.62 as reported on the New York Stock Exchange on December 31, 2019.
|
Year Ended December 31,
|
2018
|
|
2017
|
||
Expected dividend yield
|
—
|
|
|
—
|
|
Weighted-average assumed stock price volatility
|
54.6
|
%
|
|
45.1
|
%
|
Weighted-average risk-free interest rate
|
2.29
|
%
|
|
1.21
|
%
|
Weighted-average expected life (in years)
|
0.50
|
|
|
0.50
|
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(141
|
)
|
|
$
|
(57
|
)
|
|
$
|
498
|
|
State
|
(60
|
)
|
|
100
|
|
|
134
|
|
|||
Total current tax expense (benefit)
|
$
|
(201
|
)
|
|
$
|
43
|
|
|
$
|
632
|
|
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total deferred tax expense (benefit)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income tax expense (benefit)
|
$
|
(201
|
)
|
|
$
|
43
|
|
|
$
|
632
|
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Tax at federal statutory rate
|
$
|
(6,499
|
)
|
|
$
|
(26,936
|
)
|
|
$
|
(52,089
|
)
|
State tax, net of federal tax benefit
|
(60
|
)
|
|
100
|
|
|
42
|
|
|||
Stock-based compensation expense
|
4,773
|
|
|
6,559
|
|
|
3,171
|
|
|||
Research and development tax credits
|
(2,336
|
)
|
|
(7,839
|
)
|
|
(5,022
|
)
|
|||
Change in valuation allowance
|
(802
|
)
|
|
19,140
|
|
|
(3,532
|
)
|
|||
Change in unrecognized tax benefit
|
1,168
|
|
|
3,920
|
|
|
2,922
|
|
|||
Tax rate change
|
—
|
|
|
—
|
|
|
53,048
|
|
|||
Non-deductible expenses
|
3,250
|
|
|
5,143
|
|
|
2,212
|
|
|||
Other
|
305
|
|
|
(44
|
)
|
|
(120
|
)
|
|||
Income tax expense (benefit)
|
$
|
(201
|
)
|
|
$
|
43
|
|
|
$
|
632
|
|
December 31,
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
118,090
|
|
|
$
|
128,193
|
|
Stock-based compensation
|
11,480
|
|
|
11,434
|
|
||
Reserves and accruals
|
23,008
|
|
|
25,373
|
|
||
Operating lease liabilities
|
33,824
|
|
|
—
|
|
||
Goodwill
|
19,818
|
|
|
21,580
|
|
||
Intangible assets
|
3,074
|
|
|
2,782
|
|
||
Tax credit carryforwards
|
16,679
|
|
|
14,363
|
|
||
Other
|
498
|
|
|
908
|
|
||
Total deferred tax assets
|
226,471
|
|
|
204,633
|
|
||
Valuation allowance
|
(169,526
|
)
|
|
(169,291
|
)
|
||
Deferred tax assets – net of valuation allowance
|
$
|
56,945
|
|
|
$
|
35,342
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Internally developed software
|
$
|
(20,225
|
)
|
|
$
|
(21,813
|
)
|
Servicing fees
|
(4,389
|
)
|
|
—
|
|
||
Depreciation and amortization
|
—
|
|
|
(4,137
|
)
|
||
Operating lease assets
|
(28,224
|
)
|
|
—
|
|
||
Change in tax method
|
(3,988
|
)
|
|
(7,349
|
)
|
||
Other
|
(119
|
)
|
|
(2,043
|
)
|
||
Total deferred tax liabilities
|
$
|
(56,945
|
)
|
|
$
|
(35,342
|
)
|
Deferred tax asset (liability) – net
|
$
|
—
|
|
|
$
|
—
|
|
Year Ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
$
|
13,377
|
|
|
$
|
7,784
|
|
|
$
|
3,246
|
|
Gross increase for tax positions related to prior years
|
—
|
|
|
2,744
|
|
|
2,330
|
|
|||
Gross increase for tax positions related to the current year
|
2,621
|
|
|
2,849
|
|
|
2,208
|
|
|||
Ending balance
|
$
|
15,998
|
|
|
$
|
13,377
|
|
|
$
|
7,784
|
|
ROU Assets and Lease Liabilities
|
December 31, 2019
|
||
Operating lease assets
|
$
|
93,485
|
|
Operating lease liabilities (1)
|
$
|
112,344
|
|
(1)
|
The difference between operating lease assets and operating lease liabilities is the unamortized balance of deferred rent, which prior to January 1, 2019 was included as a separate liability within “Accrued expenses and other liabilities.”
|
|
Year Ended December 31,
|
|||||||||||
Net Lease Costs
|
Income Statement Classification
|
2019
|
|
2018
|
|
2017
|
||||||
Operating lease costs (1)
|
Other general and administrative expense
|
$
|
(19,502
|
)
|
|
$
|
(17,183
|
)
|
|
$
|
(15,780
|
)
|
Sublease revenue
|
Other revenue
|
4,637
|
|
|
397
|
|
|
391
|
|
|||
Net lease costs
|
|
$
|
(14,865
|
)
|
|
$
|
(16,786
|
)
|
|
$
|
(15,389
|
)
|
(1)
|
Includes variable lease costs of $1.6 million, $0.6 million and $0.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.
|
Year Ended December 31,
|
2019
|
||
Non-cash operating activity:
|
|
||
Leased assets obtained in exchange for new operating lease liabilities (1)
|
$
|
15,277
|
|
(1)
|
Represents non-cash activity and, accordingly, is not reflected in the Consolidated Statements of Cash Flows.
|
|
Operating Lease
Payments
|
|
Sublease
Revenue
|
|
Net
|
||||||
2020
|
$
|
18,219
|
|
|
$
|
(6,369
|
)
|
|
$
|
11,850
|
|
2021
|
18,649
|
|
|
(6,560
|
)
|
|
12,089
|
|
|||
2022
|
15,010
|
|
|
(2,906
|
)
|
|
12,104
|
|
|||
2023
|
11,663
|
|
|
—
|
|
|
11,663
|
|
|||
2024
|
12,002
|
|
|
—
|
|
|
12,002
|
|
|||
Thereafter
|
74,497
|
|
|
—
|
|
|
74,497
|
|
|||
Total lease payments (1)
|
$
|
150,040
|
|
|
$
|
(15,835
|
)
|
|
$
|
134,205
|
|
Discount effect
|
37,696
|
|
|
|
|
|
|||||
Present value of future minimum lease payments
|
$
|
112,344
|
|
|
|
|
|
(1)
|
As of December 31, 2019, the Company entered into an additional operating lease which has not yet commenced and is therefore not part of the table above nor included in the lease right-of-use asset and liability. This lease will commence when the Company obtains possession of the underlying asset, which is expected to be on April 1, 2020. The lease term is nine years and has an undiscounted future rent payment of approximately $8.7 million.
|
Lease Term and Discount Rate
|
December 31, 2019
|
|
Weighted-average remaining lease term (in years)
|
9.67
|
|
Weighted-average discount rate
|
5.75
|
%
|
Quarter Ended
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2019 |
||||||||
Net revenue:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Transaction fees
|
$
|
149,951
|
|
|
$
|
161,205
|
|
|
$
|
152,207
|
|
|
$
|
135,397
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
74,791
|
|
|
77,820
|
|
|
92,562
|
|
|
100,172
|
|
||||
Interest expense
|
(49,251
|
)
|
|
(55,060
|
)
|
|
(66,916
|
)
|
|
(75,360
|
)
|
||||
Net fair value adjustments
|
(42,659
|
)
|
|
(31,628
|
)
|
|
(35,974
|
)
|
|
(34,729
|
)
|
||||
Net interest income and fair value adjustments
|
(17,119
|
)
|
|
(8,868
|
)
|
|
(10,328
|
)
|
|
(9,917
|
)
|
||||
Investor fees
|
30,258
|
|
|
30,271
|
|
|
32,272
|
|
|
31,731
|
|
||||
Gain on sales of loans
|
20,373
|
|
|
18,305
|
|
|
13,886
|
|
|
15,152
|
|
||||
Net investor revenue (1)
|
33,512
|
|
|
39,708
|
|
|
35,830
|
|
|
36,966
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other revenue
|
5,023
|
|
|
3,983
|
|
|
2,770
|
|
|
2,055
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total net revenue
|
188,486
|
|
|
204,896
|
|
|
190,807
|
|
|
174,418
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
67,222
|
|
|
76,255
|
|
|
69,323
|
|
|
66,623
|
|
||||
Origination and servicing
|
22,203
|
|
|
27,996
|
|
|
24,931
|
|
|
28,273
|
|
||||
Engineering and product development
|
41,080
|
|
|
41,455
|
|
|
43,299
|
|
|
42,546
|
|
||||
Other general and administrative
|
57,607
|
|
|
59,485
|
|
|
64,324
|
|
|
56,876
|
|
||||
Total operating expenses
|
188,112
|
|
|
205,191
|
|
|
201,877
|
|
|
194,318
|
|
||||
Income (Loss) before income tax expense
|
374
|
|
|
(295
|
)
|
|
(11,070
|
)
|
|
(19,900
|
)
|
||||
Income tax expense (benefit)
|
140
|
|
|
97
|
|
|
(438
|
)
|
|
—
|
|
||||
Consolidated net income (loss)
|
234
|
|
|
(392
|
)
|
|
(10,632
|
)
|
|
(19,900
|
)
|
||||
Less: (Loss) Income attributable to noncontrolling interests
|
—
|
|
|
(9
|
)
|
|
29
|
|
|
35
|
|
||||
LendingClub net income (loss)
|
$
|
234
|
|
|
$
|
(383
|
)
|
|
$
|
(10,661
|
)
|
|
$
|
(19,935
|
)
|
Other data:
|
|
|
|
|
|
|
|
||||||||
Loan originations (2)
|
$
|
3,083,129
|
|
|
$
|
3,349,613
|
|
|
$
|
3,129,520
|
|
|
$
|
2,727,831
|
|
Weighted-average common shares – Basic (3)
|
88,371,672
|
|
|
87,588,495
|
|
|
86,719,049
|
|
|
86,108,871
|
|
||||
Weighted-average common shares – Diluted (3)
|
88,912,677
|
|
|
87,588,495
|
|
|
86,719,049
|
|
|
86,108,871
|
|
||||
Net income (loss) per share attributable to LendingClub: (3)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
(0.12
|
)
|
|
$
|
(0.23
|
)
|
Diluted
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
(0.12
|
)
|
|
$
|
(0.23
|
)
|
(1)
|
See “Note 1. Basis of Presentation” for additional information.
|
(2)
|
Loan originations include loans facilitated through the platform plus outstanding purchase commitments at period end. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Operating and Financial Metrics” for additional information.
|
(3)
|
All share and per share information has been retroactively adjusted to reflect a reverse stock split. See “Note 4. Net Loss Per Share” for additional information.
|
Quarter Ended
|
December 31,
2018 |
|
September 30,
2018 |
|
June 30,
2018 |
|
March 31,
2018 |
||||||||
Net revenue:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Transaction fees
|
$
|
142,053
|
|
|
$
|
137,781
|
|
|
$
|
135,926
|
|
|
$
|
111,182
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
106,170
|
|
|
115,514
|
|
|
127,760
|
|
|
138,018
|
|
||||
Interest expense
|
(83,222
|
)
|
|
(90,642
|
)
|
|
(100,898
|
)
|
|
(110,843
|
)
|
||||
Net fair value adjustments
|
(25,865
|
)
|
|
(19,554
|
)
|
|
(26,556
|
)
|
|
(28,713
|
)
|
||||
Net interest income and fair value adjustments
|
(2,917
|
)
|
|
5,318
|
|
|
306
|
|
|
(1,538
|
)
|
||||
Investor fees
|
30,419
|
|
|
29,169
|
|
|
27,400
|
|
|
27,895
|
|
||||
Gain on sales of loans
|
10,509
|
|
|
10,919
|
|
|
11,880
|
|
|
12,671
|
|
||||
Net investor revenue (1)
|
38,011
|
|
|
45,406
|
|
|
39,586
|
|
|
39,028
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other revenue
|
1,457
|
|
|
1,458
|
|
|
1,467
|
|
|
1,457
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total net revenue
|
181,521
|
|
|
184,645
|
|
|
176,979
|
|
|
151,667
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
68,353
|
|
|
73,601
|
|
|
69,046
|
|
|
57,517
|
|
||||
Origination and servicing
|
25,707
|
|
|
25,431
|
|
|
25,593
|
|
|
22,645
|
|
||||
Engineering and product development
|
39,552
|
|
|
41,216
|
|
|
37,650
|
|
|
36,837
|
|
||||
Other general and administrative
|
61,303
|
|
|
57,446
|
|
|
57,583
|
|
|
52,309
|
|
||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
35,633
|
|
|
—
|
|
||||
Class action and regulatory litigation expense
|
—
|
|
|
9,738
|
|
|
12,262
|
|
|
13,500
|
|
||||
Total operating expenses
|
194,915
|
|
|
207,432
|
|
|
237,767
|
|
|
182,808
|
|
||||
Loss before income tax expense
|
(13,394
|
)
|
|
(22,787
|
)
|
|
(60,788
|
)
|
|
(31,141
|
)
|
||||
Income tax expense (benefit)
|
18
|
|
|
(38
|
)
|
|
24
|
|
|
39
|
|
||||
Consolidated net loss
|
(13,412
|
)
|
|
(22,749
|
)
|
|
(60,812
|
)
|
|
(31,180
|
)
|
||||
Less: Income attributable to noncontrolling interests
|
50
|
|
|
55
|
|
|
49
|
|
|
1
|
|
||||
LendingClub net loss
|
$
|
(13,462
|
)
|
|
$
|
(22,804
|
)
|
|
$
|
(60,861
|
)
|
|
$
|
(31,181
|
)
|
Other data:
|
|
|
|
|
|
|
|
||||||||
Loan originations (2)
|
$
|
2,871,019
|
|
|
$
|
2,886,462
|
|
|
$
|
2,818,331
|
|
|
$
|
2,306,003
|
|
Weighted-average common shares – Basic (3)
|
85,539,436
|
|
|
84,871,828
|
|
|
84,238,897
|
|
|
83,659,860
|
|
||||
Weighted-average common shares – Diluted (3)
|
85,539,436
|
|
|
84,871,828
|
|
|
84,238,897
|
|
|
83,659,860
|
|
||||
Net loss per share attributable to LendingClub: (3)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.16
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.37
|
)
|
Diluted
|
$
|
(0.16
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.37
|
)
|
(1)
|
See “Note 1. Basis of Presentation” for additional information.
|
(2)
|
Loan originations include loans facilitated through the platform plus outstanding purchase commitments at period end. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Operating and Financial Metrics” for additional information.
|
(3)
|
All share and per share information has been retroactively adjusted to reflect a reverse stock split. See “Note 4. Net Loss Per Share” for additional information.
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedule
|
3.
|
Exhibits
|
|
|
Incorporated by Reference
|
|
|||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing
Date
|
Filed
Herewith
|
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
|
|
|
|||
|
||||||
|
|
|
|
|||
|
|
|
|
|||
|
||||||
|
||||||
|
|
|
Incorporated by Reference
|
|
|||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing
Date
|
Filed
Herewith
|
|
||||||
|
|
|
|
|||
|
||||||
|
||||||
|
||||||
|
|
|
|
|||
|
|
|
|
|||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
|
|
|
|||
|
|
|
|
|||
|
|
|
|
|||
|
|
|
|
|
|
Incorporated by Reference
|
|
|||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing
Date
|
Filed
Herewith
|
|
|
|
|
|||
101
|
The following financial information from LendingClub Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements.
|
|
|
|
|
X
|
104
|
Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101)
|
|
|
|
|
|
*
|
Confidential treatment has been requested for certain portions of this Exhibit. The omitted material has been filed separately with the SEC.
|
**
|
Certain information in the exhibit was omitted pursuant to Item 601(b)(2) of Regulation S-K because it is both not material and would be competitively harmful if publicly disclosed. The Company undertakes to furnish, supplementally, a copy of the unredacted exhibit to the SEC upon request.
|
†
|
Schedules have been omitted as they are not material, not applicable or not required. They will be furnished supplementally to the SEC upon request.
|
|
LENDINGCLUB CORPORATION
|
||
|
|
|
|
|
By:
|
|
/s/ Scott Sanborn
|
|
Scott Sanborn
|
||
|
Chief Executive Officer
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Scott Sanborn
|
|
Chief Executive Officer
|
|
February 19, 2020
|
Scott Sanborn
|
|
|
|
|
|
|
|
|
|
/s/ Thomas W. Casey
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Chief Financial Officer
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February 19, 2020
|
Thomas W. Casey
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/s/ Fergal Stack
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Principal Accounting Officer
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February 19, 2020
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Fergal Stack
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/s/ Susan Athey
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Director
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February 19, 2020
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Susan Athey
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/s/ Daniel T. Ciporin
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Director
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February 19, 2020
|
Daniel T. Ciporin
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/s/ Kenneth Denman
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Director
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February 19, 2020
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Kenneth Denman
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/s/ Timothy J. Mayopoulos
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Director
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February 19, 2020
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Timothy J. Mayopoulos
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/s/ Patricia McCord
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Director
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February 19, 2020
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Patricia McCord
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/s/ John C. Morris
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Director
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February 19, 2020
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John C. Morris
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/s/ Simon Williams
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Director
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February 19, 2020
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Simon Williams
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/s/ Michael Zeisser
|
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Director
|
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February 19, 2020
|
Michael Zeisser
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|
•
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the transaction is approved by the board of directors prior to the time that the interested stockholder became an interested stockholder;
|
•
|
upon consummation of the transaction that resulted in the stockholder’s becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or
|
•
|
at or subsequent to such time that the stockholder became an interested stockholder, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
|
•
|
Board of Directors Vacancies. Our restated certificate of incorporation and amended and restated bylaws authorize only our board of directors to fill vacant directorships, including newly created seats. In addition, the number of directors constituting our board of directors may be set only by a resolution adopted by a majority vote of our entire board of directors. These provisions prevent a stockholder from increasing the size of our board of directors and then gaining control of our board of directors by filling the resulting vacancies with its own nominees. This makes it more difficult to change the composition of our board of directors but promotes continuity of management.
|
•
|
Classified Board. Our restated certificate of incorporation and amended and restated bylaws provide that our board of directors is classified into three classes of directors, each with staggered three-year terms. A third party may be discouraged from making a tender offer or otherwise attempting to obtain control of us as it is more difficult and time consuming for stockholders to replace a majority of the directors on a classified board of directors.
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•
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Stockholder Action; Special Meetings of Stockholders. Our restated certificate of incorporation provides that our stockholders may not take action by written consent, but may only take action at annual or special meetings of our stockholders. As a result, a holder controlling a majority of our capital stock is unable to amend our amended and restated bylaws or remove directors without holding a meeting of our stockholders called in accordance with our amended and restated bylaws. Further, our amended and restated bylaws and restated certificate of incorporation provide that special meetings of our stockholders may be called only by a majority of our board of directors, the chairman of our board of directors, our Chief Executive Officer or our President, thus prohibiting a stockholder from calling a
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•
|
Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our amended and restated bylaws provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders or to nominate candidates for election as directors at our annual meeting of stockholders. Our amended and restated bylaws also specify certain requirements regarding the form and content of a stockholder’s notice. These provisions might preclude our stockholders from bringing matters before our annual meeting of stockholders or from nominating directors at our annual meeting of stockholders if the proper procedures are not followed. These provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.
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•
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No Cumulative Voting. The Delaware General Corporation Law provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless a corporation’s restated certificate of incorporation provides otherwise. Neither our restated certificate of incorporation nor amended and restated bylaws provide for cumulative voting.
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•
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Directors Removed Only for Cause. Our restated certificate of incorporation provides that stockholders may remove directors only for cause and only by the affirmative vote of the holders of at least two-thirds of our outstanding common stock.
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•
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Amendment of Charter Provisions. Any amendment of the provisions in our restated certificate of incorporation described above would require approval by holders of at least two-thirds of our outstanding common stock.
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•
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Issuance of Undesignated Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock would enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or other means. Subsequent to December 31, 2019, our board of directors approved the designation of 200,000 shares of Series A Preferred Stock, par value $0.01 per share, and 600,000 shares of Series B Preferred Stock, par value $0.01 per share. As of the date hereof, no such shares of preferred stock have been issued.
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I.
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General Financial Criteria
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II.
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Operational Criteria
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If to the Company:
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LendingClub Corporation
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71 Stevenson Street, Suite 300
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San Francisco, CA 94105
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Attn: President
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If to the Optionee:
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At the address set forth in the Notice of Grant
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Optionee:
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_______________
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Grant Date:
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Vesting Commencement Date:
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||
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Exercise Price:
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Number of Option Shares:
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shares of Common Stock
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Termination Date:
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Type of Option:
|
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Incentive Stock Option
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Non-Statutory Stock Option
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Vesting Schedule:
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||||||||||
DATED: , 20
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||||||||||||||
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|||||||||||||||||
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LENDINGCLUB CORPORATION
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||||||||||||||
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||||||||||||||||
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By:
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||||||||||||
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Name:
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||||||||||
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Title:
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||||||||||
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||||||||||||||||
OPTIONEE
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||||||||||||
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|||||||||||||||
By:
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||||||||||
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|||||||||||||||
Address:
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TO:
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LendingClub Corporation (the “Company”)
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||
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||
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|
|||
Please issue the stock certificate for the Option Shares (check one):
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||
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||
¨
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to me; or
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¨
|
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to me and , as joint tenants with right of survivorship.
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|
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and mail the certificate to me at the following address:
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Very truly yours,
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Optionee
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Print Name
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Date
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Social Security Number
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|||||||||
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PARTICIPANT
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LENDINGCLUB CORPORATION
|
|||||
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|||||
Signature:
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By:
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|||||
Print Name:
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Name:
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|||||
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Its:
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Name:
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Address:
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Date of Grant:
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Vesting Commencement Date:
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Fair Market Value on Date of Grant:
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Total Number of Shares:
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Expiration Date:
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Vesting Schedule:
|
|
The SAR becomes exercisable with respect to the first 25% of the Shares subject to the SAR when you complete 12 months of continuous Service from the Vesting Commencement Date. Thereafter, the SAR becomes exercisable with respect to an additional 1/48th of the Shares subject to the SAR when you complete each month of Service.
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|
|||||||||
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PARTICIPANT:
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LENDINGCLUB CORPORATION
|
|||||
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|||||
Signature:
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By:
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|||||
Print Name:
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Name:
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|||||
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Its:
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Name:
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Address:
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Number of Shares:
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Date of Grant:
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Vesting Commencement Date:
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Vesting Schedule:
|
|
[Subject to the limitations set forth in this Notice, the Plan and the Stock Bonus Agreement, 25% of the total number of Shares subject to the Stock Bonus Award will vest on the 12 month anniversary of the Vesting Commencement Date and 12.5% of the total number of Shares will vest on each six month anniversary thereafter so long as your Service continues.]
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|||||||||
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PARTICIPANT
|
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LENDINGCLUB CORPORATION
|
|||||
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|
|||||
Signature:
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By:
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|||||
Print Name:
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Name:
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|||||
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Its:
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|||||||||
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PARTICIPANT
|
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LENDINGCLUB CORPORATION
|
|||||
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|
|||||
Signature:
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By:
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|||||
Print Name:
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Name:
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|||||
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Its:
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|
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1.
|
The Committee shall have the authority to adjust the Full Career Vesting Period and Full Career Vesting Benefit in accordance with the terms of the Plan to take into account any extraordinary or unusual items, event or circumstances to avoid windfalls or hardships.
|
|
|
2.
|
To the extent that earning or vesting in your award is subject to the achievement of any performance factors (a “Performance Based RSU”), then the Full Career Vesting Benefit shall apply only after the applicable performance period is completed and the extent of performance achievement is determined and only to any Service based vesting applicable to the earned portion of the Performance Based RSU.
|
|
|
|||
1.
|
[You provided at least [#] days prior written notice (“Notice”) to the Company’s then Chief Executive Officer of your intention to voluntarily terminate Service with the Company due to your good faith intention to cease all full-time employment, with the Company or otherwise, and during which Notice period you provided such services as requested by the Company in a cooperative and professional manner;
|
|||
|
|
|
||
2.
|
On the date immediately prior to the termination of your Service, you are at least [#] years of age and have completed at least [#] years of continuous Service with the Company;
|
|
||
|
|
|
|
|
3.
|
You have signed and not revoked a release of claims against the Company in a form reasonably acceptable to the Company, in each case, within the time periods specified in such release of claims and such release of claims has become effective; and
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|
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|
4.
|
[ANY ADDITIONAL CRITERIA LISTED HERE]]
|
|
|
|
•
|
Your acknowledgement (i) that the updated Prospectus is publicly available on EDGAR, (ii) that you have read and understand the updated Prospectus and (iii) that any Notes you purchase thereafter, regardless of whether such purchase is through LendingClub or any Third Party, are issued pursuant and subject to the terms of the updated Prospectus; and
|
•
|
Your acceptance of and agreement to the terms of the updated Investor Agreement Package, which shall supersede and replace the terms of any previous Investor Agreement Package.
|
•
|
Review requests for loans (upon issuance, “Member Loans”) that LendingClub has received from borrower applicants and approved for listing; and
|
•
|
Place orders for Notes, each such Note corresponding to and dependent for payment upon a pro rata portion of a specific Member Loan.
|
•
|
A servicing fee of up to one percent (1.00%) on any Borrower payments we receive by the payment due date or during applicable grace periods; and
|
•
|
A collection fee of (i) up to 40% on all amounts collected on a delinquent Member Loan (net of legal fees and expenses) to the extent any litigation has been initiated against the Borrower; or (ii) up to 30% on all amounts collected on a delinquent Member Loan in all cases not involving litigation.
|
•
|
If you are purchasing or acquiring a Note through a Third Party, the amount you receive on your Note, if any, may also be net of additional service or transaction fees charged by such Third Party.
|
•
|
You represent and warrant that as of each date that you purchase a Note (either directly or through a Third Party), that:
|
o
|
You are a resident of a state where Notes are offered for purchase, as set forth on our website, as updated from time to time;
|
o
|
You satisfy the minimum financial suitability standards applicable to the state in which you reside, as set forth on our website, as updated from time to time;
|
o
|
You have made your decision to purchase such Note without discrimination on the basis of race, color, religion, national origin, sex or marital status, age, or whether a Borrower applicant receives any income from any public assistance program;
|
o
|
The funds used to purchase such Note(s) were not obtained via a Member Loan issued to you or any other person or entity; and
|
o
|
You have not charged, attempted to charge, or accepted from any Borrower any fee, bonus, interest, kickback or thing of value of any kind in exchange for your purchase or recommendation of any Note(s).
|
•
|
You understand and acknowledge that Borrowers may default on their payment obligations under the Member Loans and that such defaults will reduce the amounts, if any, you may receive under any corresponding Note(s). You understand and acknowledge that Notes are not guaranteed or insured and you may lose all amounts invested in Notes, regardless of whether you purchase the Notes through LendingClub or any Third Party.
|
•
|
You understand and acknowledge that the Notes have no or limited liquidity and will not be listed on any securities exchange, that there may be no or only a limited secondary market for the Notes, that any secondary sales or trading of Notes must be conducted in accordance with federal and applicable state securities laws, and that Note purchasers should be prepared to hold the Notes they purchase until the Notes mature.
|
•
|
Due to the nature of LendingClub operating entirely electronically and online, you acknowledge that each investor may not experience the same functionality, speed, or access to information, services, and Note purchasing ability as other investors on the LendingClub platform and that LendingClub does not warrant that the operation of the LendingClub platform will be uninterrupted or entirely error-free. Service quality and availability may be subject to delay, error or failure due to service connectivity, internet connection difficulties or other factors. You acknowledge that the above may result in (1) an inability or delay in placing orders; (2) varying processing times for transactions; (3) inaccurate information; (4) delay in receipt of information by us from you; (5) your failure to receive any messages from LendingClub; (6) you erroneously believing that you have initiated a transaction or placed an order for a Note when our records show that we have not accepted such an action from you.
|
•
|
You understand and acknowledge that order programs, features, and tools on the LendingClub platform, including the automated investing tool, may be modified, unavailable, or removed from time to time at LendingClub’s sole discretion.
|
•
|
You represent and warrant that your activity on the LendingClub platform, including registration for an Account, any Account activity, and any Note purchase(s), is in compliance with all applicable laws, including anti-terrorism laws, anti-money laundering law, and any laws administered by the United States Department of the Treasury's Office of Foreign Assets Control or any other governmental entity imposing economic sanctions and trade embargoes.
|
•
|
You represent and warrant that you have the power to enter into and perform your obligations under the Investor Agreement Package, and that the Investor Agreement Package has been duly authorized, executed and delivered by you.
|
•
|
You acknowledge and agree that you are purchasing Notes only for your own account and are not acquiring Notes for the account of any other person or entity, whether directly or indirectly.
|
•
|
You represent and warrant that all personal information you have provided or will provide to LendingClub in connection with your Account, including but not limited to your name, current address and Social Security number or taxpayer identification number, is true, accurate, and complete.
|
•
|
You agree that to the extent that any Note(s) were purchased through a Third Party, you are bound by the terms of the Investor Agreement Package as if you had purchased such Note(s) directly through LendingClub.
|
•
|
You acknowledge and agree that LendingClub has not provided you with any legal, accounting, regulatory, financial, or tax advice and that you have had the opportunity to consult and have consulted with your legal, financial, and tax advisers, if and to the extent you deem necessary or appropriate.
|
•
|
You acknowledge and agree that LendingClub bears no responsibility or liability for any actions taken with respect to your Account if you give a third party access to or control over your Account.
|
•
|
You acknowledge and agree that you have no right, and shall not, make any attempt, directly or through any other party, to contact or collect any payments from any Borrower.
|
•
|
You acknowledge and agree that the Notes are intended to be indebtedness of LendingClub for U.S. federal income tax purposes. You agree that you will not take any position inconsistent with such treatment of the Notes for tax, accounting or other purposes, unless required by law. You further acknowledge that the Notes will be subject to the original issue discount rules of the Internal Revenue Code of 1986, as amended, as described in the Prospectus. LendingClub reserves the right to change how it reports income, gains, losses, deductions and any other items for U.S. federal and other income tax purposes at any time to the extent it determines necessary or appropriate. Except as set forth herein, neither party makes any representation or warranty to the other regarding the effect that this Agreement may have upon the foreign, federal, state or local tax liability of the other party.
|
•
|
You acknowledge and agree that any personal data and information that you may provide to a Third Party may be shared with us in accordance with the terms of our agreements with such Third Parties, and such personal data and information may also be used by us in accordance with the terms of the Privacy Policy.
|
•
|
You acknowledge and agree that LendingClub is entitled to act upon any instrument, certificate or form we believe is genuine and signed or presented by the proper person or persons and we need not investigate or inquire as to any statement contained in any such document, but may accept it as true and accurate.
|
•
|
You agree not to represent yourself to any person, as a director, officer, employee or affiliated person of LendingClub, unless you are such a director, officer or employee.
|
•
|
You shall provide any additional documentation reasonably requested directly by or on behalf of LendingClub (including requests made through a Third Party) to demonstrate your compliance with this section.
|
•
|
It is duly organized and is validly existing as a corporation in good standing under the laws of Delaware and has corporate power to enter into and perform its obligations under this Agreement;
|
•
|
This Agreement has been duly authorized, executed and delivered by LendingClub;
|
•
|
The Indenture has been duly authorized by LendingClub and qualified under the Trust Indenture Act of 1939 and constitutes a valid and binding agreement of LendingClub, enforceable against LendingClub in accordance with its terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency or similar laws; and
|
•
|
The Notes have been duly authorized and, following your payment of the purchase price and the execution, authentication, issuance, and delivery to you, will constitute valid and binding obligations of LendingClub, enforceable against LendingClub in accordance with their terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency or similar laws.
|
1.2
|
Rules of Construction.
|
2.1
|
Loan Products, Loan Programs, Purchaser Online Accounts and Addenda.
|
2.2
|
Purchase Procedures for Offer, Commitment and Funding of Purchased Loans.
|
2.3
|
Conditions Precedent to Purchases.
|
2.4
|
Payment of Purchase Price and Confirmation.
|
2.5
|
Modification of Loan Document Package.
|
2.6
|
Limitation on Purchase Obligation.
|
3.1
|
True Sale.
|
3.2
|
Grant of Security Interest.
|
3.3
|
Purchaser Rights.
|
3.4
|
Servicing Arrangements.
|
4.1
|
Seller Representations, Warranties and Covenants.
|
4.2
|
Purchased Loan Representations, Warranties and Covenants.
|
4.3
|
Purchaser Representations, Warranties and Covenants.
|
(i)
|
(A) will not violate any Applicable Laws in the consummation of the transactions contemplated hereby, including but not limited to, the Equal Credit Opportunity Act and other fair lending laws, the Truth in Lending Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act and state unfair and deceptive trade practices statutes; (B) is in compliance in all material respects with all Applicable Law, including all AML-BSA Laws; (C) is not in violation of any order of any Regulatory Authority or other board or tribunal except where such violation would not reasonably be expected to have or result in a Material Adverse Effect with respect to Purchaser; and (D) has not received any notice that Purchaser is not in material compliance in any respect with any of the requirements of any of the foregoing;
|
(ii)
|
has maintained in all material respects all records required to be maintained by any applicable Regulatory Authority; and
|
(iii)
|
shall promptly provide to Seller upon Seller’s reasonable request (A) identifying information and/or documentation about its directors, officers, employees, signors and/or beneficial owners as required by Seller, including no less than annual updates to such information or annual confirmations that the information provided in the previous year remains true and correct; and (B) any additional information or documentation as is reasonably required for Seller to comply with Applicable Laws, including but not limited to any identifying information or documentation required with respect to AML-BSA Laws.
|
5.1
|
Seller’s Indemnification.
|
5.2
|
Purchaser’s Indemnification.
|
5.3
|
Notice of Claims.
|
6.1
|
Confidentiality
|
(i)
|
During the term of this Agreement, a Party (the “Recipient”) may receive or have access to certain information of the other Party (the “Discloser”) including, though not limited to, records, documents, proprietary information, technology, software, trade secrets, financial and business information, or data related to such other Party’s products (including the
|
(ii)
|
Prior to the termination of this Agreement, if Purchaser is, becomes, has or hereafter acquires a [___] percent ([___]%) or greater equity interest (including in the form of convertible debt, warrants or options) in, an entity that could reasonably be determined to compete with LendingClub in facilitating, providing and acquiring loans, securitizing, selling or servicing loans or investing in companies that do the foregoing or otherwise engages in businesses similar to LendingClub, then Purchaser shall provide prompt written notice to LendingClub of such interest.
|
(1)
|
the Purchaser shall maintain at all times an Information Security Program.
|
(2)
|
the Purchaser shall assess, manage, and control risks relating to the security and confidentiality of Borrower Information, and shall implement the standards relating to such risks in the manner set forth in the applicable provisions of the Privacy Requirements.
|
(3)
|
Without limiting the scope of the above, the Purchaser shall use at least the same physical and other security measures to protect all Borrower Information in the Purchaser’s possession or control, as the Purchaser uses for its own confidential and proprietary information.
|
(4)
|
At Seller’s reasonable request, Seller may review and request details with respect to Purchaser’s Information Security Program.
|
(ii)
|
Compliance With Privacy Requirements. The Purchaser shall comply with all applicable Privacy Requirements.
|
(iii)
|
Unauthorized Access to Borrower Information. Purchaser will provide Seller with notice of any violation of the GLB Act by Purchaser or any actual
|
6.2
|
No Use of Borrower Information
|
7.1
|
Repurchase for Verified ID Fraud.
|
(i)
|
Obtaining an identity theft report (“ID Theft Report”) from law enforcement; and
|
(ii)
|
preparation of a completed Federal Trade Commission or company-specific equivalent ID Theft Affidavit,
|
7.3
|
Repurchase Procedures.
|
8.1
|
Term.
|
8.2
|
Termination.
|
(i)
|
Seller shall fail to perform or observe any material obligation, covenant or agreement contained in this Agreement and such failure shall continue for
|
(ii)
|
Seller shall become Insolvent, or there is a substantial cessation of its regular course of business, or a receiver or trustee of Seller’s assets is appointed;
|
(iii)
|
(x) any material representation or warranty of Seller contained in this Agreement shall prove to have been materially false or misleading when made (and such misstatement, if with respect to Section 4.2, has a Material Adverse Effect on the applicable Purchased Loans), and (y) such misstatement shall not be cured within thirty (30) days after Seller’s receipt of Purchaser’s written demand that Seller cure such misstatement; provided, that (A) such misstatements with respect to Section 4.1 or 4.2 for which Seller shall have complied with Section 5.1 and/or (B) such misstatements with respect to Section 4.2 for which Seller shall have complied with Section 7.2, shall each not apply for purposes of this clause (iii);
|
(iv)
|
Seller shall cease to be in good standing with any Regulatory Authority having oversight over the operations of Seller, or Seller shall become subject to any regulatory action, in each case in a manner that would materially restrict or prohibit Seller from meeting its obligations under the terms of this Agreement;
|
(v)
|
there shall occur any change in any federal, state or local law, statute, regulation or order or in any requirement of any Regulatory Authority, which change makes it illegal or impractical for Purchaser to purchase or own, or for Seller to sell, Loans in any jurisdiction; or
|
(vi)
|
the Servicing Agreement is terminated, or the arrangements under which Seller acquires Loans from all Banks are cancelled, suspended, prohibited or otherwise terminated. Seller shall provide Purchaser with written notice within three (3) Business Days of the occurrence of an Event of Default pursuant to this clause (vi).
|
(i)
|
Seller is required, or a requirement has been imposed upon Seller, to comply with any risk retention rule (or other similar rule of similar effect) in connection with the transactions contemplated by this Agreement or any Multi-Party Agreement;
|
(ii)
|
Purchaser fails to fund a Purchaser Online Account in the amount and by the time required under Section 2.2 hereof;
|
(iii)
|
Purchaser shall fail to perform or observe any material obligation, covenant or agreement, contained in this Agreement or the Servicing Agreement and such failure shall continue for more than thirty (30) days after Purchaser’s receipt of Seller’s or Servicer’s written demand that Purchaser cure such failure;
|
(iv)
|
any material representation or warranty of Purchaser contained in this Agreement or the Servicing Agreement, shall prove to have been materially false or misleading when made, and such misstatement shall not be cured within thirty (30) days after Purchaser’s receipt of Seller’s or Servicer’s written demand that Purchaser cure such misstatement;
|
(v)
|
Purchaser shall cease to be in good standing with any Regulatory Authority having oversight over the operations of Purchaser or Purchaser shall become subject to any regulatory action that would materially restrict or prohibit Purchaser from meeting its obligations under the terms of this Agreement;
|
(vi)
|
Purchaser shall become Insolvent, or Purchaser ceases to do business as a going concern, or there is a substantial cessation of its regular course of business, or a receiver or trustee of Purchaser’s assets is appointed;
|
(vii)
|
the arrangements under which Seller acquires Loans from a Bank are cancelled, suspended, prohibited or otherwise terminated by a Bank for reason other than an event of default or action of Seller;
|
(viii)
|
there shall occur any change in any federal, state or local law, statute, regulation or order or in any requirement of any Regulatory Authority, which change makes it illegal or impractical for Purchaser to purchase or own, or for Seller to sell, Loans in any jurisdiction; or
|
(ix)
|
the Servicing Agreement is terminated, LendingClub is terminated as Servicer, or the arrangements under which Seller acquires Loans from any Bank is cancelled, suspended, prohibited or otherwise terminated.
|
8.3
|
Effect of Termination.
|
9.1
|
Notices.
|
9.2
|
Amendment; Waiver.
|
9.3
|
Cumulative Rights.
|
9.4
|
Assignment.
|
9.6
|
Place of Delivery, Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
|
9.7
|
Limitation of Liability.
|
9.10
|
Entire Agreement.
|
9.12
|
No Joint Venture or Partnership.
|
PURCHASER:
[______________]
By: __________________________
|
Name:
|
Title:
|
|
SELLER:
LENDINGCLUB CORPORATION
By: _____________________________
|
Name:
|
Title:
|
|
I. Defined Terms
|
II. Loan Documents
|
1.
|
Truth in Lending Disclosure
|
2.
|
Credit Profile Authorization
|
3.
|
Borrower Agreement
|
4.
|
Loan Agreement and Promissory Note (Note: form is included as Exhibit A to Borrower Agreement)
|
5.
|
Applicable Privacy Notice (Note: form is included as Exhibit B to Borrower Agreement)
|
6.
|
Terms of Use
|
III. Purchase Instructions
|
(i)
|
If Purchaser provides Scale Program Purchase Instructions to Seller, Seller and Purchaser shall agree in writing (via email or mail) to the Scale Program Monthly Purchase Amount (i) no later than the twenty-first (21st) day (or such other date as agreed in writing by the Seller and Purchaser) of each calendar month prior to a calendar month occurring during the term of this Addendum No. 1 (each, a “Month”), Purchaser shall submit to Seller in writing the maximum monthly aggregate initial principal balance of Scale Program Loans that it would like to purchase in the Scale Program during the following Month (each, an “Order”); and (ii) upon receipt of each Order, and no later than the last day of the calendar month prior to the applicable Month, Seller shall deliver to Purchaser in writing its Scale Program Monthly Purchase Amount for such Month, which shall, for the avoidance of doubt, be equal to or less than the Order amount delivered by Purchaser for such Month. Any Scale Program Monthly Purchase Amount and Scale Program Purchase Instructions provided by Purchaser to Seller shall be effective on the first day of the next calendar month and will apply for each subsequent calendar month during the term of this Addendum No. 1, until canceled by either Party or superseded by a new Scale Program Monthly Purchase Amount or Scale Program Purchase Instructions.
|
(ii)
|
If Purchaser provides Select Program Purchase Instructions to Seller, Purchaser shall also notify Seller in writing (via email or mail) of the related Maximum Purchase Amount. Any Maximum Purchase Amount with respect to Select Loans and Select Program Purchase Instructions provided by Purchaser to Seller shall be effective as of the date they are accepted by Seller in writing (by email or mail) in its sole discretion and will apply for each subsequent calendar month during the term of this Addendum No. 1, until canceled by either Party or superseded by a new properly delivered Maximum Purchase Amount with respect to Select Loans or Select Program Purchase Instructions.
|
(iii)
|
With respect to both Scale Program Loans and Select Program Loans, Purchaser hereby delegates to Seller the authority to make Purchase Commitments and purchase Eligible Loans on behalf of Purchaser through the applicable Purchaser Online Account up to the applicable Maximum Purchase Amount in accordance with any then-current applicable Purchase Instructions. Upon selection of an Eligible Loan in accordance with the Purchase Instructions, Seller commits to offer Purchaser, and Purchaser hereby commits to purchase such Eligible Loan; provided, however, that any Non-Offered Loans shall be released and removed from any Purchase Commitment. All purchases pursuant to any Purchase Instructions shall be deemed to be in Purchaser’s sole discretion. Purchaser acknowledges that Seller makes no guaranty or warranty that Eligible Loans meeting the characteristics set forth in the Purchase Instructions will be available in any given month. For the avoidance of doubt, (A) Scale Program Purchase Instructions shall apply only to Scale Program Loans, and Select Purchase Instructions shall apply only to Select Program Loans,
|
IV. Representations, Warranties and Covenants
|
V. Termination
|
I. Defined Terms
|
II. Loan Documents
|
1.
|
Truth in Lending Disclosure
|
2.
|
Credit Profile Authorization
|
3.
|
Borrower Agreement
|
4.
|
Loan Agreement and Promissory Note (Note: form is included as Exhibit A to Borrower Agreement)
|
5.
|
Applicable Privacy Notice (Note: form is included as Exhibit B to Borrower Agreement)
|
6.
|
Terms of Use
|
III. Purchase Instructions
|
IV. Representations, Warranties and Covenants
|
V. Termination
|
I. Defined Terms
|
II. Loan Documents
|
1.
|
Truth in Lending Disclosure
|
2.
|
Credit Profile Authorization
|
3.
|
Borrower Agreement
|
4.
|
Loan Agreement and Promissory Note (Note: form is included as Exhibit A to Borrower Agreement)
|
5.
|
Applicable Privacy Notice (Note: form is included as Exhibit B to Borrower Agreement)
|
6.
|
Terms of Use
|
III. Purchase Requirement
|
IV. Representations, Warranties and Covenants
|
V. Termination
|
I. Product-Specific Defined Terms
|
II. Loan Documents
|
1.
|
Commercial Borrower Agreement
|
2.
|
Commercial Loan Agreement and Promissory Note (Note: form is included as Exhibit A to Commercial Borrower Agreement)
|
3.
|
Applicable Privacy Notice (Note: form is included as Exhibit B to Commercial Borrower Agreement
|
4.
|
Terms of Use
|
5.
|
Personal Guaranty
|
6.
|
Security Agreement (if applicable)
|
7.
|
UCC Financing Statements(s) (if applicable)
|
III. Purchase Requirement
|
IV. Representations, Warranties and Covenants
|
V. Termination
|
Grade AA
(Not available in 5yr term)
|
Grade A
|
Grade B
|
Grade C
|
Grade D
|
Grade E
|
____%
|
____%
|
____%
|
____%
|
____%
|
____%
|
____ % 24-Month + ____ % 36-Month + ____% 60-Month + ____% 84-Month = 100%
(AA and A product only) (AA product only)
|
•
|
__________________________________________________________
|
•
|
__________________________________________________________
|
Grade A
|
Grade B
|
Grade C
|
Grade D
|
Grade E
|
____%
|
____%
|
____%
|
____%
|
____%
|
36-month
|
60-month
|
____%
|
____%
|
1.1
|
Defined Terms.
|
1.2
|
Rules of Construction.
|
2.1
|
Contract for Servicing; Possession of Servicing Files.
|
2.2
|
Assignment and Delegation of Duties.
|
(A)
|
Purchaser is the sole legal, beneficial and equitable owner of such Loan and has good and marketable title thereto, and has the right to assign, sell and transfer such Loan free and clear of any lien, pledge, charge, claim, security interest or other encumbrance, and Purchaser has not sold, assigned or otherwise transferred any right or interest in or to such Loan and has not pledged such Loan as collateral for any debt or other purpose, except as contemplated under this Agreement or the Purchase Agreement; and
|
(B)
|
Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is in good standing with every regulatory body having jurisdiction over its activities of Purchaser, except
|
(i)
|
all payments on account of principal on the Loans, including all Principal Prepayments;
|
(ii)
|
all payments on account of interest and fees (excluding Ancillary Fees) on the Loans;
|
(iii)
|
all Liquidation Proceeds;
|
(iv)
|
to the extent not otherwise included in any other clauses of this Section 3.2(e), any net proceeds from the Loans whether by any Subcontractor or Collection Agent; and
|
(v)
|
any other collections from the Loans and any other amounts required to be deposited or transferred into the applicable Purchaser Online Account pursuant to this Agreement;
|
(i)
|
to pay itself the earned and unpaid Servicing Compensation on such dates as determined by Servicer, subject to providing prior notice as described below; or
|
(ii)
|
to remove funds transferred in error or funds that are required to be returned for any reason (including for the avoidance of doubt, a Borrower’s failed automated clearing house (“ACH”) payment or a Borrower’s ACH payment that is returned after settlement), subject in each case to providing information regarding the offset or withdrawal as described below.
|
(i)
|
a monthly statement with respect to the previous month that includes a list of all Loans and the delinquency status of all Loans, including a list of any Loans that were fully repaid or became Charged Off Loans during such month, which statement will be delivered within the first fifteen (15) days of each month;
|
(ii)
|
a daily report listing certain characteristics of any Loans; and
|
(iii)
|
such other information as may be reasonably agreed to by the Parties.
|
(i)
|
During the term of this Agreement, a Party (the “Recipient”) may receive or have access to certain information of the other Party (the “Discloser”) including, though not limited to, records, documents, proprietary information, technology, software, trade secrets, financial and business information, or data related to such other Party’s products (including the discovery, invention, research, improvement, development, manufacture, or sale thereof), processes, or general business operations (including sales,
|
(ii)
|
For so long as LendingClub (or an Affiliate or other designee of LendingClub) is Servicer, prior to the termination of this Agreement, if Purchaser is, becomes, or has or hereafter acquires a [___] percent ([___]%) or greater equity interest (including in the form of convertible debt, warrants or options) interest in, an entity that could reasonably be determined to compete with LendingClub in facilitating, providing and acquiring loans, securitizing, selling or servicing loans or investing in companies that do the foregoing or otherwise engages in businesses similar to LendingClub then Purchaser shall provide prompt written notice to LendingClub of such interest.
|
(1)
|
the Purchaser shall maintain at all times an Information Security Program.
|
(2)
|
the Purchaser shall assess, manage, and control risks relating to the security and confidentiality of Borrower Information, and shall implement the standards relating to such risks in the manner set forth in the applicable provisions of the Privacy Requirements.
|
(3)
|
Without limiting the scope of the above, the Purchaser shall use at least the same physical and other security measures to protect all Borrower Information in the Purchaser’s possession or control, as the Purchaser uses for its own confidential and proprietary information.
|
(4)
|
At Servicer’s reasonable request, Servicer may review and request details with respect to Purchaser’s Information Security Program.
|
(ii)
|
Compliance With Privacy Requirements. The Purchaser shall comply with all applicable Privacy Requirements.
|
(iii)
|
Unauthorized Access to Borrower Information. Purchaser will provide Servicer with notice of any violation of the GLB Act by Purchaser or any
|
3.4
|
No Use of Borrower Information.
|
(i)
|
(A) is in material compliance with all Applicable Laws, including all applicable AML-BSA Laws; (B) is not in violation of any order of any Regulatory Authority or other board or tribunal except where such violation would not reasonably be expected to have or result in a Material Adverse Effect with respect to Purchaser; and (C) has not received any notice that Purchaser is not in material compliance in any respect with any of the requirements of any of the foregoing;
|
(ii)
|
has maintained in all material respects all records required to be maintained by any applicable Regulatory Authority; and
|
(iii)
|
shall promptly provide to Servicer upon Servicer’s reasonable request (A) identifying information and/or documentation about its directors, officers, employees, signors and/or beneficial owners as required by Servicer, including no less than annual updates to such information or annual confirmations that the information provided in the previous year remains true and correct; and (B) any additional information or documentation as is reasonably required for Servicer to comply with Applicable Laws, including but not limited to any identifying information or documentation required with respect to AML-BSA Laws.
|
6.1.
|
Limitation on Liability of Servicer and Others.
|
(i)
|
failure by Servicer to duly observe or perform in any material respect any of its covenants, obligations or agreements set forth in this Agreement (but not any representations or warranties, which are addressed in clause (iv) below) that continues unremedied for a period of thirty (30) days after the earlier of the date upon which Servicer knew of such failure or its receipt of written
|
(ii)
|
a decree or order of a court or agency or supervisory authority or Regulatory Authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, including bankruptcy, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of thirty (30) days; or
|
(iii)
|
Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to Servicer or of or relating to all or substantially all of its property; or
|
(iv)
|
any representation or warranty made by Servicer shall prove to be untrue or incomplete in any material respect when made such as to create a Material Adverse Effect with respect to Servicer on a consolidated basis (or, with respect to the representations and warranties in Sections 5.1(d) and (e), a Material Adverse Effect with respect to Servicer or the Loans (but only with respect to the Loans as to which Servicer is not able to service as a result of such failure, determination or ruling, as applicable)), which continues unremedied for a period of thirty (30) days after receipt by Servicer of written notice of such failure, requiring the same to be remedied, from Purchaser; or
|
(v)
|
any failure by Servicer to make any undisputed payment, transfer or deposit into the Purchaser Online Account(s) as required by this Agreement which continues unremedied for a period of five (5) Business Days after Servicer’s receipt of notice of such failure from Purchaser; or
|
(vi)
|
any Regulatory Authority shall have condemned, seized or appropriated, or to have assumed custody or control of, all or any substantial part of the property of Servicer, or shall have taken any action to displace the management of Servicer or to curtail its authority in the conduct of the business of Servicer, or takes any action in the nature of enforcement to remove or prohibit Servicer from acting as a servicer of loans;
|
(vii)
|
failure by Purchaser to duly observe or perform in any material respect any of its covenants, obligations or agreements set forth in this Agreement that continues unremedied for a period of thirty (30) days after the earlier of the date upon which Purchaser knew of such failure or its receipt of written notice of such failure, requiring the same to be remedied, from Servicer;
|
(viii)
|
failure by Purchaser to satisfy its obligations to compensate Servicer for its servicing activities as set forth in this Agreement that continues unremedied for a period of thirty (30) days after the earlier of the date upon which Purchaser knew of such failure or its receipt of written notice of such failure, requiring the same to be remedied, from Servicer;
|
(ix)
|
a decree or order of a court or agency or supervisory authority or Regulatory Authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, including bankruptcy, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against Purchaser and such decree or order shall have remained in force undischarged or unstayed for a period of thirty (30) days; or
|
(x)
|
any representation or warranty made by Purchaser shall prove to be untrue or incomplete in any material respect when made such as to create a Material Adverse Effect with respect to Purchaser on a consolidated basis, which continues unremedied for a period of thirty (30) days after receipt by Purchaser of written notice of such failure, requiring the same to be remedied, from Servicer; or
|
(xi)
|
Purchaser shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to Purchaser or of or relating to all or substantially all of its property; or
|
(xii)
|
(A) Purchaser shall make an offer or assignment or compromise for the benefit of its creditors, or (B) there shall be commenced by or against Purchaser any voluntary or involuntary bankruptcy, insolvency or similar proceedings and, in the case of an involuntary proceeding, either such proceedings remain undismissed or unstayed for a period of sixty (60) days or any of the actions sought in such proceedings shall occur. Purchaser shall provide Servicer with written notice immediately upon the occurrence of a Purchaser Event of Default pursuant to this clause (vi) (without regard for the sixty (60) day cure period with respect to involuntary proceedings under clause (B)).
|
8.1.
|
Notices.
|
8.2.
|
Severability.
|
8.3.
|
Place of Delivery and Governing Law.
|
8.4.
|
Submission to Jurisdiction; Waiver of Jury Trial.
|
8.5.
|
LIMITATION OF LIABILITY.
|
8.6.
|
Further Agreements.
|
8.7.
|
Successors and Assigns; Assignment of Servicing Agreement.
|
8.8.
|
Amendment; Waiver.
|
8.9.
|
Exhibits.
|
8.10.
|
Costs.
|
8.11.
|
Counterparts.
|
8.12.
|
No Joint Venture or Partnership.
|
8.13.
|
Entire Agreement.
|
8.14.
|
No Petition.
|
8.15.
|
Force Majeure.
|
By:
|
_____________________________
|
Name: |
_______________________
|
Title: |
_______________________
|
By:
|
_______________________________
Name: _________________________ Title: __________________________ |
•
|
(1) Reinvest principal and interest*
|
•
|
(2) Distribute principal and interest
|
(a)
|
¨ Monthly ACH**
|
(b)
|
¨ Monthly Wire**
|
(c)
|
¨ Daily Wire
|
Subsidiaries (a wholly owned subsidiary)
|
|
State of Incorporation
|
Consumer Loan Underlying Bond (CLUB) Depositor, LLC
|
|
Delaware
|
Consumer Loan Underlying Bond (CLUB) Certificate Issuer Trust I
|
|
Delaware
|
LC Trust I
|
|
Delaware
|
The Lending Club Members Trust
|
|
Delaware
|
LendingClub Receivables Trust
|
|
Delaware
|
Performance Trust LPP
|
|
Delaware
|
LendingClub Asset Management, LLC
|
|
Delaware
|
LendingClub Operated Aggregator Note (LOAN) NP I, LLC
|
|
Delaware
|
LendingClub Warehouse I LLC
|
|
Delaware
|
LendingClub Warehouse II LLC
|
|
Delaware
|
LendingClub Warehouse III LLC
|
|
Delaware
|
Rincon Point LLC
|
|
Delaware
|
Desert Point LLC
|
|
Delaware
|
Springstone Financial, LLC
|
|
Delaware
|
1.
|
I have reviewed this Annual Report on Form 10-K of LendingClub Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ SCOTT SANBORN
|
Scott Sanborn
|
Chief Executive Officer
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of LendingClub Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ THOMAS W. CASEY
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Thomas W. Casey
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Chief Financial Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ SCOTT SANBORN
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Scott Sanborn
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Chief Executive Officer
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(Principal Executive Officer)
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/s/ THOMAS W. CASEY
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Thomas W. Casey
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Chief Financial Officer
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Dated:
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February 19, 2020
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