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Loans | 6 Months Ended
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Jun. 30, 2022
Receivables [Abstract] |
Loans | Loans As of June 30, 2022, our loan portfolio consisted of personal loans, student loans and home loans, which are measured at fair value under the fair value option election, and loans measured at amortized cost, including credit card, and commercial and consumer banking loans. Below is a disaggregated presentation of our loans, inclusive of fair market value adjustments and accrued interest income and net of the allowance for credit losses, as applicable, as of the dates indicated:
| June 30, |  | December 31,
| 2022 |  | 2021
Loans at fair value |  |  |
Securitized student loans | $ | 466,865 |  |  | $ | 574,328 |
Securitized personal loans | 132,133 |  |  | 234,576 |
Student loans | 3,247,510 |  |  | 2,876,509 |
Home loans | 135,262 |  |  | 212,709 |
Personal loans | 3,977,612 |  |  | 2,054,850 |
Total loans at fair value | 7,959,382 |  |  | 5,952,972 |
Loans at amortized cost(1) |  |  |
Credit card | 173,867 |  |  | 115,912 |
Commercial and consumer banking: |  |  |
Commercial real estate | 67,742 |  |  | — |
Commercial and industrial | 8,097 |  |  | — |
Residential real estate and other consumer | 3,406 |  |  | — |
Total commercial and consumer banking | 79,245 |  |  | — |
Total loans at amortized cost | 253,112 |  |  | 115,912 |
Total loans | $ | 8,212,494 |  |  | $ | 6,068,884 |
_____________________ (1) Amounts are presented net of the allowance for credit losses. See Note 1 for additional information on our loans at amortized cost as it pertains to the allowance for credit losses pursuant to ASC 326. Loans Measured at Fair Value The following table summarizes the aggregate fair value of our loans measured at fair value on a recurring basis as of the dates indicated:
| Student Loans |  | Home Loans |  | Personal Loans |  | Total
June 30, 2022 |  |  |  |  |  |  |
Unpaid principal(1) | $ | 3,657,693 |  |  | $ | 142,118 |  |  | $ | 3,943,768 |  |  | $ | 7,743,579 |
Accumulated interest | 9,601 |  |  | 159 |  |  | 23,055 |  |  | 32,815 |
Cumulative fair value adjustments(1) | 47,081 |  |  | (7,015) |  |  | 142,922 |  |  | 182,988 |
Total fair value of loans | $ | 3,714,375 |  |  | $ | 135,262 |  |  | $ | 4,109,745 |  |  | $ | 7,959,382 |
December 31, 2021 |  |  |  |  |  |  |
Unpaid principal(1) | $ | 3,356,344 |  |  | $ | 210,111 |  |  | $ | 2,188,773 |  |  | $ | 5,755,228 |
Accumulated interest | 9,990 |  |  | 190 |  |  | 12,310 |  |  | 22,490 |
Cumulative fair value adjustments(1) | 84,503 |  |  | 2,408 |  |  | 88,343 |  |  | 175,254 |
Total fair value of loans | $ | 3,450,837 |  |  | $ | 212,709 |  |  | $ | 2,289,426 |  |  | $ | 5,952,972 |
__________________ (1) These items are impacted by charge-offs during the period. The following table summarizes the aggregate fair value of loans 90 days or more delinquent as of the dates indicated. As delinquent personal loans and student loans are charged off after 120 days of delinquency, amounts presented below represent the fair value of loans that are 90 to 120 days delinquent. There were no home loans that were 90 days or more delinquent as of the dates presented.
| Student Loans |  |  |  | Personal Loans |  | Total
June 30, 2022 |  |  |  |  |  |  |
Unpaid principal | $ | 1,372 |  |  |  |  | $ | 8,260 |  |  | $ | 9,632 |
Accumulated interest | 18 |  |  |  |  | 304 |  |  | 322 |
Cumulative fair value adjustments | (733) |  |  |  |  | (7,266) |  |  | (7,999) |
Fair value of loans 90 days or more delinquent | $ | 657 |  |  |  |  | $ | 1,298 |  |  | $ | 1,955 |
December 31, 2021 |  |  |  |  |  |  |
Unpaid principal | $ | 1,589 |  |  |  |  | $ | 4,765 |  |  | $ | 6,354 |
Accumulated interest | 32 |  |  |  |  | 149 |  |  | 181 |
Cumulative fair value adjustments | (865) |  |  |  |  | (4,189) |  |  | (5,054) |
Fair value of loans 90 days or more delinquent | $ | 756 |  |  |  |  | $ | 725 |  |  | $ | 1,481 |
The following table presents the changes in our loans measured at fair value on a recurring basis:
| Student Loans |  | Home Loans |  | Personal Loans |  | Total
Three Months Ended June 30, 2022 |  |  |  |  |  |  |
Fair value as of March 31, 2022 | $ | 3,737,439 |  |  | $ | 146,658 |  |  | $ | 3,118,788 |  |  | $ | 7,002,885 |
Origination of loans | 398,722 |  |  | 332,047 |  |  | 2,471,849 |  |  | 3,202,618 |
Principal payments | (167,049) |  |  | (701) |  |  | (461,178) |  |  | (628,928) |
Sales of loans | (259,690) |  |  | (342,780) |  |  | (1,123,898) |  |  | (1,726,368) |
Purchases(1) | 5,274 |  |  | 330 |  |  | 67,189 |  |  | 72,793 |
Change in accumulated interest | (139) |  |  | (23) |  |  | 5,162 |  |  | 5,000 |
Change in fair value(2) | (182) |  |  | (269) |  |  | 31,833 |  |  | 31,382 |
Fair value as of June 30, 2022 | $ | 3,714,375 |  |  | $ | 135,262 |  |  | $ | 4,109,745 |  |  | $ | 7,959,382 |
Three Months Ended June 30, 2021 |  |  |  |  |  |  |
Fair value as of March 31, 2021 | $ | 2,666,793 |  |  | $ | 231,903 |  |  | $ | 1,573,908 |  |  | $ | 4,472,604 |
Origination of loans | 859,497 |  |  | 792,228 |  |  | 1,294,384 |  |  | 2,946,109 |
Principal payments | (235,889) |  |  | (1,280) |  |  | (247,808) |  |  | (484,977) |
Sales of loans | (610,941) |  |  | (841,642) |  |  | (970,135) |  |  | (2,422,718) |
Purchases(1) | 44,779 |  |  | 422 |  |  | 103,538 |  |  | 148,739 |
Change in accumulated interest | (403) |  |  | 17 |  |  | (153) |  |  | (539) |
Change in fair value(2) | 15,657 |  |  | 665 |  |  | 9,808 |  |  | 26,130 |
Fair value as of June 30, 2021 | $ | 2,739,493 |  |  | $ | 182,313 |  |  | $ | 1,763,542 |  |  | $ | 4,685,348 |
Six Months Ended June 30, 2022 |  |  |  |  |  |  |
Fair value as of January 1, 2022 | $ | 3,450,837 |  |  | $ | 212,709 |  |  | $ | 2,289,426 |  |  | $ | 5,952,972 |
Origination of loans | 1,382,526 |  |  | 644,430 |  |  | 4,497,853 |  |  | 6,524,809 |
Principal payments | (394,164) |  |  | (5,101) |  |  | (833,632) |  |  | (1,232,897) |
Sales of loans | (803,840) |  |  | (708,150) |  |  | (2,101,818) |  |  | (3,613,808) |
Purchases(1) | 121,707 |  |  | 828 |  |  | 227,937 |  |  | 350,472 |
Change in accumulated interest | (389) |  |  | (31) |  |  | 10,745 |  |  | 10,325 |
Change in fair value(2) | (42,302) |  |  | (9,423) |  |  | 19,234 |  |  | (32,491) |
Fair value as of June 30, 2022 | $ | 3,714,375 |  |  | $ | 135,262 |  |  | $ | 4,109,745 |  |  | $ | 7,959,382 |
Six Months Ended June 30, 2021 |  |  |  |  |  |  |
Fair value as of January 1, 2021 | $ | 2,866,459 |  |  | $ | 179,689 |  |  | $ | 1,812,920 |  |  | $ | 4,859,068 |
Origination of loans | 1,864,182 |  |  | 1,527,832 |  |  | 2,100,073 |  |  | 5,492,087 |
Principal payments | (486,108) |  |  | (2,759) |  |  | (506,007) |  |  | (994,874) |
Sales of loans | (1,547,101) |  |  | (1,519,208) |  |  | (1,749,576) |  |  | (4,815,885) |
Purchases(1) | 44,850 |  |  | 541 |  |  | 104,539 |  |  | 149,930 |
Change in accumulated interest | (1,652) |  |  | (18) |  |  | (2,340) |  |  | (4,010) |
Change in fair value(2) | (1,137) |  |  | (3,764) |  |  | 3,933 |  |  | (968) |
Fair value as of June 30, 2021 | $ | 2,739,493 |  |  | $ | 182,313 |  |  | $ | 1,763,542 |  |  | $ | 4,685,348 |
__________________ (1) Purchases reflect unpaid principal balance and relate to previously transferred loans. Purchase activity during the three and six months ended June 30, 2022 included securitization clean-up calls of $60,240 and $335,739, respectively. Additionally, during the three and six months ended June 30, 2022, the Company elected to purchase $7,290 and $7,290, respectively, of previously sold loans from certain investors. Purchase activity during the three and six months ended June 30, 2021 included securitization clean-up calls of $131,372 and $131,372, respectively. Additionally, during the three and six months ended June 30, 2021, the Company elected to purchase $15,185 and $15,185, respectively, of previously sold loans from certain investors. The Company was not required to buy back these loans. The remaining purchases during the periods presented related to standard representations and warranties pursuant to our various loan sale agreements. (2) Changes in fair value of loans are recorded in the unaudited condensed consolidated statements of operations and comprehensive income (loss) within noninterest income—loan origination and sales for loans held on the balance sheet prior to transfer to a third party through a sale or to a VIE and within noninterest income—securitizations for loans in a consolidated VIE. Changes in fair value are impacted by valuation assumption changes, as well as sales price execution and amount of time the loans are held prior to sale. The estimated amount of losses included in earnings attributable to changes in instrument-specific credit risk were $23,221 and $16,725 during the three and six months ended June 30, 2022, respectively, and $9,038 and $2,111 during the three and six months ended June 30, 2021, respectively. The losses attributable to instrument-specific credit risk were estimated by incorporating our current default and loss severity assumptions for the loans. These assumptions are based on historical performance, market trends and performance expectations over the term of the underlying instrument. Loans Measured at Amortized Cost Loan Portfolio Composition and Aging The following table presents the amortized cost basis of our credit card and commercial and consumer banking portfolios (excluding accrued interest and before the allowance for credit losses) by either current status or delinquency status as of the dates indicated:
|  |  | Delinquent Loans |  |
| Current |  | 30–59 Days |  | 60–89 Days |  | ≥ 90 Days(1) |  | Total Delinquent Loans |  | Total Loans(2)
June 30, 2022 |  |  |  |  |  |  |  |  |  |  |
Credit card | $ | 177,732 |  |  | $ | 3,570 |  |  | $ | 3,105 |  |  | $ | 8,417 |  |  | $ | 15,092 |  |  | $ | 192,824 |
Commercial and consumer banking: |  |  |  |  |  |  |  |  |  |  |
Commercial real estate | 68,479 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 68,479 |
Commercial and industrial | 8,299 |  |  | 7 |  |  | — |  |  | — |  |  | 7 |  |  | 8,306 |
Residential real estate and other consumer(3) | 3,417 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,417 |
Total commercial and consumer banking | 80,195 |  |  | 7 |  |  | — |  |  | — |  |  | 7 |  |  | 80,202 |
Total loans | $ | 257,927 |  |  | $ | 3,577 |  |  | $ | 3,105 |  |  | $ | 8,417 |  |  | $ | 15,099 |  |  | $ | 273,026 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
Credit card | $ | 115,356 |  |  | $ | 1,893 |  |  | $ | 1,683 |  |  | $ | 2,658 |  |  | $ | 6,234 |  |  | $ | 121,590 |
_______________ (1)All of the credit card loans ≥ 90 days past due continued to accrue interest. As of June 30, 2022 and December 31, 2021, there were no credit card loans on nonaccrual status. As of June 30, 2022, commercial and consumer banking loans on nonaccrual status were immaterial, and there were no loans that were 90 days or more past due. (2)For credit card, the balance is presented before allowance for credit losses of $21,974 and $7,037 as of June 30, 2022 and December 31, 2021, respectively, and accrued interest of $3,017 and $1,359, respectively. For commercial and consumer banking, the balance is presented before allowance for credit losses of $1,204 and accrued interest of $247 as of June 30, 2022. (3)Includes residential real estate loans acquired in the Bank Merger, for which we did not elect the fair value option. Credit Quality Indicators Credit Card The following table presents the amortized cost basis of our credit card portfolio (excluding accrued interest and before the allowance for credit losses) as of the dates indicated based on FICO scores, which are obtained at the origination of the account, and are updated as new credit information is available. The pools estimate the likelihood of borrowers with similar FICO scores to pay credit obligations based on aggregate credit performance data.
FICO |  | June 30, 2022 |  | December 31, 2021
≥ 800 |  | $ | 9,560 |  |  | $ | 10,016 |
780 – 799 |  | 8,388 |  |  | 8,624 |
760 – 779 |  | 9,882 |  |  | 9,976 |
740 – 759 |  | 12,289 |  |  | 13,581 |
720 – 739 |  | 16,471 |  |  | 18,358 |
700 – 719 |  | 22,579 |  |  | 22,579 |
680 – 699 |  | 26,430 |  |  | 21,736 |
660 – 679 |  | 26,513 |  |  | 14,044 |
640 – 659 |  | 19,889 |  |  | 1,969 |
< 640 |  | 40,823 |  |  | 707 |
Total credit card |  | $ | 192,824 |  |  | $ | 121,590 |
Commercial and Consumer Banking We evaluate the credit quality of our commercial and consumer banking loan portfolio on a quarterly basis based on regulatory risk ratings. Loans are categorized into risk ratings based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. We analyze loans individually by classification based on their associated credit risk, and perform an analysis on an ongoing basis as new information is obtained. Risk rating classifications are further described below. Loans with a lower expectation of credit losses are classified as Pass, while loans with a higher expectation of credit losses are classified as Substandard. •Pass — Loans that management believes will fully repay in accordance with the contractual loan terms. •Watch —  Loans that management believes will fully repay in accordance with the contractual loan terms, but for which certain credit attributes have changed from origination and warrant further monitoring. •Special mention — Loans with a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or our credit position at some future date. •Substandard — Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the full repayment. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. The following table presents the amortized cost basis of our commercial and consumer banking portfolio (excluding accrued interest and before the allowance for credit losses) by origination year and credit quality indicator as of June 30, 2022:
| Term Loans by Origination Year |  |
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Total Term Loans |  | Revolving Loans
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 8,987 |  |  | $ | 5,811 |  |  | $ | 7,680 |  |  | $ | 9,413 |  |  | $ | 5,692 |  |  | $ | 16,364 |  |  | $ | 53,947 |  |  | $ | 206 |
Watch | 1,246 |  |  | 1,703 |  |  | — |  |  | 2,064 |  |  | 2,146 |  |  | 2,959 |  |  | 10,118 |  |  | — |
Special mention | — |  |  | — |  |  | — |  |  | 687 |  |  | 2,263 |  |  | 413 |  |  | 3,363 |  |  | — |
Substandard | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 845 |  |  | 845 |  |  | — |
Total commercial real estate | $ | 10,233 |  |  | $ | 7,514 |  |  | $ | 7,680 |  |  | $ | 12,164 |  |  | $ | 10,101 |  |  | $ | 20,581 |  |  | $ | 68,273 |  |  | $ | 206 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | — |  |  | $ | 15 |  |  | $ | 113 |  |  | $ | — |  |  | $ | 103 |  |  | $ | 5,093 |  |  | $ | 5,324 |  |  | $ | 367 |
Watch | — |  |  | — |  |  | — |  |  | 136 |  |  | — |  |  | 355 |  |  | 491 |  |  | 26 |
Special mention | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 757 |  |  | 757 |  |  | — |
Substandard | — |  |  | — |  |  | — |  |  | 234 |  |  | 165 |  |  | 942 |  |  | 1,341 |  |  | — |
Total commercial and industrial | $ | — |  |  | $ | 15 |  |  | $ | 113 |  |  | $ | 370 |  |  | $ | 268 |  |  | $ | 7,147 |  |  | $ | 7,913 |  |  | $ | 393 |
Residential real estate and other consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,307 |  |  | $ | 3,307 |  |  | $ | 69 |
Watch | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 41 |  |  | 41 |  |  | — |
Total residential real estate and other consumer | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,348 |  |  | $ | 3,348 |  |  | $ | 69 |
Total commercial and consumer banking | $ | 10,233 |  |  | $ | 7,529 |  |  | $ | 7,793 |  |  | $ | 12,534 |  |  | $ | 10,369 |  |  | $ | 31,076 |  |  | $ | 79,534 |  |  | $ | 668 |

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- Definition The entire disclosure for financing receivable. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI https://asc.fasb.org/subtopic&trid=2196772 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2196816 + Details
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