v3.23.2
Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses
 6 Months Ended
Jun. 30, 2023
Loans and Leases Receivable Disclosure [Abstract]  
Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses
LendingClub records certain loans and leases held for investment (HFI) at amortized cost. Other HFI and all held for sale (HFS) loans are recorded at fair value with the Company’s election of the fair value option. Net accrued interest receivable is excluded from the amortized cost basis of loans and leases HFI and is reported within “Other assets” on the Balance Sheet. Net accrued interest receivable related to loans and leases HFI at amortized cost was $32.2 million and $27.9 million as of June 30, 2023 and December 31, 2022, respectively.

Loans and Leases Held for Investment at Amortized Cost

The Company defines its loans and leases HFI portfolio segments as (i) consumer and (ii) commercial. The following table presents the components of each portfolio segment by class of financing receivable:
June 30, 2023December 31, 2022
Unsecured personal$4,371,330 $3,866,373 
Residential mortgages192,256 199,601 
Secured consumer237,372 194,634 
Total consumer loans held for investment4,800,958 4,260,608 
Equipment finance (1)
142,073 160,319 
Commercial real estate382,738 373,501 
Commercial and industrial (2)
207,580 238,726 
Total commercial loans and leases held for investment732,391 772,546 
Total loans and leases held for investment5,533,349 5,033,154 
Allowance for loan and lease losses(355,163)(327,852)
Loans and leases held for investment, net (3)
$5,178,186 $4,705,302 
(1)    Comprised of sales-type leases for equipment. See “Note 16. Leases” for additional information.
(2)    Includes $17.6 million and $67.0 million of pledged loans under the Paycheck Protection Program (PPP) as of June 30, 2023 and December 31, 2022, respectively.
(3)    As of June 30, 2023 and December 31, 2022, the Company had $4.8 billion and $283.6 million in loans pledged as collateral under the Federal Reserve Bank (FRB) Discount Window, respectively. In addition, as of June 30, 2023 and December 31, 2022, the Company had $151.2 million and $156.2 million in loans pledged to the Federal Home Loan Bank (FHLB) of Des Moines, respectively.

June 30, 2023GrossALLLNet
Allowance Ratios (1)
Total consumer loans held for investment$4,800,958 $341,161 $4,459,797 7.1 %
Total commercial loans and leases held for investment732,391 14,002 718,389 1.9 %
Total loans and leases held for investment$5,533,349 $355,163 $5,178,186 6.4 %
December 31, 2022GrossALLLNet
Allowance Ratios (1)
Total consumer loans held for investment$4,260,608 $312,489 $3,948,119 7.3 %
Total commercial loans and leases held for investment772,546 15,363 757,183 2.0 %
Total loans and leases held for investment$5,033,154 $327,852 $4,705,302 6.5 %
(1)    Calculated as the ratio of allowance for loan and lease losses (ALLL) to loans and leases HFI at amortized cost.
The activity in the ACL by portfolio segment was as follows:
Three Months Ended June 30,
20232022
ConsumerCommercialTotalConsumerCommercialTotal
Allowance for loan and lease losses, beginning of period$333,546 $15,311 $348,857 $173,857 $14,128 $187,985 
Credit loss expense for loans and leases held for investment
66,874 (684)66,190 68,314 1,739 70,053 
Charge-offs (1)
(63,345)(924)(64,269)(14,707)(1,145)(15,852)
Recoveries4,086 299 4,385 720 354 1,074 
Allowance for loan and lease losses, end of period$341,161 $14,002 $355,163 $228,184 $15,076 $243,260 
Reserve for unfunded lending commitments, beginning of period$67 $1,545 $1,612 $— $1,512 $1,512 
Credit loss expense for unfunded lending commitments (67)472 405 136 377 513 
Reserve for unfunded lending commitments, end of period (2)
$— $2,017 $2,017 $136 $1,889 $2,025 
Six Months Ended June 30,
20232022
ConsumerCommercialTotalConsumerCommercialTotal
Allowance for loan and lease losses, beginning of period$312,489 $15,363 $327,852 $128,812 $15,577 $144,389 
Credit loss expense for loans and leases held for investment
137,558 (518)137,040 122,032 249 122,281 
Charge-offs (1)
(115,557)(1,275)(116,832)(23,724)(1,217)(24,941)
Recoveries6,671 432 7,103 1,064 467 1,531 
Allowance for loan and lease losses, end of period$341,161 $14,002 $355,163 $228,184 $15,076 $243,260 
Reserve for unfunded lending commitments, beginning of period$18 $1,860 $1,878 $— $1,231 $1,231 
Credit loss expense for unfunded lending commitments(18)157 139 136 658 794 
Reserve for unfunded lending commitments, end of period (2)
$— $2,017 $2,017 $136 $1,889 $2,025 
(1)    Unsecured personal loans are charged-off when a borrower is (i) contractually 120 days past due or (ii) two payments past due and has filed for bankruptcy or is deceased.
(2)    Relates to $108.9 million and $132.6 million of unfunded commitments, associated primarily with the commercial loan portfolio, as of June 30, 2023 and 2022, respectively.
The following table presents year-to-date gross charge-offs by origination year for the period presented:
Six Months Ended June 30, 2023
Gross Charge-Offs by Origination Year
20232022202120202019PriorTotal
Unsecured personal$1,596 $63,295 $49,331 $— $— $— $114,222 
Residential mortgages— — — — — — — 
Secured consumer19 1,026 290 — — — 1,335 
Total consumer loans held for investment1,615 64,321 49,621 — — — 115,557 
Equipment finance— — — — — — — 
Commercial real estate— — — — — — — 
Commercial and industrial— — 923 — 318 34 1,275 
Total commercial loans and leases held for investment— — 923 — 318 34 1,275 
Total loans and leases held for investment$1,615 $64,321 $50,544 $— $318 $34 $116,832 

The Company has programs to modify loans for borrowers experiencing financial difficulty. Such modifications primarily include principal forgiveness, term extensions and/or interest rate reductions. Given that unsecured personal loans typically charge-off within a few months following modification, the total amortized cost balances are not significant for the period presented.
Consumer Lending Credit Quality Indicators

The Company evaluates the credit quality of its consumer loan portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is based upon borrower payment activity relative to the contractual terms of the loan. The following tables present the classes of financing receivables within the consumer portfolio segment by credit quality indicator based on delinquency status and origination year:
June 30, 2023 Term Loans and Leases by Origination Year
20232022202120202019PriorTotal
Unsecured personal
Current $1,374,603 $2,240,402 $679,211 $— $— $— $4,294,216 
30-59 days past due 3,279 17,474 9,013 — — — 29,766 
60-89 days past due 1,865 14,153 7,933 — — — 23,951 
90 or more days past due 1,213 13,852 8,332 — — — 23,397 
Total unsecured personal1,380,960 2,285,881 704,489 — — — 4,371,330 
Residential mortgages
Current 5 49,346 56,510 30,442 21,358 34,430 192,091 
30-59 days past due — — — — — — — 
60-89 days past due — — — — — — — 
90 or more days past due — — — — — 165 165 
Total residential mortgages 5 49,346 56,510 30,442 21,358 34,595 192,256 
Secured consumer
Current80,331 124,585 29,849 — 2,502 — 237,267 
30-59 days past due— 35 19 — — — 54 
60-89 days past due— 51 — — — — 51 
90 or more days past due— — — — — — — 
Total secured consumer80,331 124,671 29,868 — 2,502 — 237,372 
Total consumer loans held for investment$1,461,296 $2,459,898 $790,867 $30,442 $23,860 $34,595 $4,800,958 
December 31, 2022 Term Loans and Leases by Origination Year
20222021202020192018PriorTotal
Unsecured personal
Current $2,835,460 $977,224 $— $— $— $— $3,812,684 
30-59 days past due 11,149 9,867 — — — — 21,016 
60-89 days past due 7,785 8,633 — — — — 16,418 
90 or more days past due 6,813 9,442 — — — — 16,255 
Total unsecured personal2,861,207 1,005,166 — — — — 3,866,373 
Residential mortgages
Current 49,721 58,353 31,465 21,683 4,546 33,248 199,016 
30-59 days past due — — — — — — — 
60-89 days past due — — — — — 254 254 
90 or more days past due — — — — — 331 331 
Total residential mortgages 49,721 58,353 31,465 21,683 4,546 33,833 199,601 
Secured consumer
Current151,725 38,076 — 2,543 — — 192,344 
30-59 days past due1,017 703 — — — — 1,720 
60-89 days past due235 147 — — — — 382 
90 or more days past due116 72 — — — — 188 
Total secured consumer153,093 38,998 — 2,543 — — 194,634 
Total consumer loans held for investment$3,064,021 $1,102,517 $31,465 $24,226 $4,546 $33,833 $4,260,608 

Commercial Lending Credit Quality Indicators

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

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

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

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

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

Loss – Loans and leases that are considered uncollectible and of little value.
The following tables present the classes of financing receivables within the commercial portfolio segment by risk rating and origination year:
June 30, 2023 Term Loans and Leases by Origination Year
20232022202120202019PriorTotal
Equipment finance
Pass $3,596 $38,634 $32,754 $13,836 $13,458 $12,394 $114,672 
Special mention— 15,369 1,881 6,295 3,173 — 26,718 
Substandard — — — 683 — — 683 
Doubtful — — — — — — — 
Loss— — — — — — — 
Total equipment finance3,596 54,003 34,635 20,814 16,631 12,394 142,073 
Commercial real estate
Pass 32,401 94,456 38,291 44,179 52,001 79,403 340,731 
Special mention— — — — 259 9,389 9,648 
Substandard — 3,761 6,785 8,415 231 10,577 29,769 
Doubtful — — 2,043 — — — 2,043 
Loss— — — — — 547 547 
Total commercial real estate32,401 98,217 47,119 52,594 52,491 99,916 382,738 
Commercial and industrial
Pass 24,054 76,240 48,898 19,968 9,959 12,337 191,456 
Special mention— 770 29 96 214 558 1,667 
Substandard — — 4,634 713 3,780 3,688 12,815 
Doubtful — — — — — 286 286 
Loss— — — — — 1,356 1,356 
Total commercial and industrial24,054 77,010 53,561 20,777 13,953 18,225 207,580 
Total commercial loans and leases held for investment$60,051 $229,230 $135,315 $94,185 $83,075 $130,535 $732,391 
December 31, 2022 Term Loans and Leases by Origination Year
20222021202020192018PriorTotal
Equipment finance
Pass $59,227 $38,218 $25,014 $15,785 $11,880 $3,444 $153,568 
Special mention— 2,094 — 3,759 — — 5,853 
Substandard — — 859 — 39 — 898 
Doubtful — — — — — — — 
Loss— — — — — — — 
Total equipment finance59,227 40,312 25,873 19,544 11,919 3,444 160,319 
Commercial real estate
Pass 100,602 53,445 47,497 52,834 35,992 60,976 351,346 
Special mention— — 8,415 260 1,237 405 10,317 
Substandard — — — 643 2,404 8,215 11,262 
Doubtful — — — — — — — 
Loss— — — — — 576 576 
Total commercial real estate100,602 53,445 55,912 53,737 39,633 70,172 373,501 
Commercial and industrial
Pass 61,076 99,264 24,726 13,866 5,174 10,831 214,937 
Special mention— — — 483 163 455 1,101 
Substandard — 9,361 4,529 3,623 797 2,820 21,130 
Doubtful — — — — — 286 286 
Loss— — — — 1 1,271 1,272 
Total commercial and industrial61,076 108,625 29,255 17,972 6,135 15,663 238,726 
Total commercial loans and leases held for investment$220,905 $202,382 $111,040 $91,253 $57,687 $89,279 $772,546 

The following tables present an analysis of the past due loans and leases HFI within the commercial portfolio segment:
June 30, 202330-59
Days		60-89
Days		90 or More DaysTotal
Equipment finance$485 $— $683 $1,168 
Commercial real estate2,115 — 10,561 12,676 
Commercial and industrial (1)
184 358 1,608 2,150 
Total commercial loans and leases held for investment$2,784 $358 $12,852 $15,994 
December 31, 202230-59
Days		60-89
Days		90 or More
Days		Total
Equipment finance$3,172 $— $859 $4,031 
Commercial real estate— 102 — 102 
Commercial and industrial (1)
— — 1,643 1,643 
Total commercial loans and leases held for investment$3,172 $102 $2,502 $5,776 
(1)    Past due PPP loans are excluded from the tables.

Nonaccrual Assets

Nonaccrual loans and leases are those for which accrual of interest has been suspended. Loans and leases are generally placed on nonaccrual status when contractually past due 90 days or more, or earlier if management believes that the probability of collection does not warrant further accrual, and are charged-off no later than 120 days past due.
The following table presents nonaccrual loans and leases:
June 30, 2023December 31, 2022
Nonaccrual (1)
Nonaccrual with no related ACL (2)
Nonaccrual (1)
Nonaccrual with no related ACL (2)
Unsecured personal$23,397 $— $16,255 $— 
Residential mortgages322 322 331 331 
Secured consumer— — 188 — 
Total nonaccrual consumer loans held for investment23,719 322 16,774 331 
Equipment finance683 — 898 39 
Commercial real estate19,298 9,360 1,018 1,018 
Commercial and industrial7,683 2,043 16,137 1,229 
Total nonaccrual commercial loans and leases held for investment27,664 11,403 18,053 2,286 
Total nonaccrual loans and leases held for investment$51,383 $11,725 $34,827 $2,617 
(1)     Excluding PPP loans, there were no loans and leases that were 90 days or more past due and accruing as of both June 30, 2023 and December 31, 2022.
(2)     Subset of total nonaccrual loans and leases.

June 30, 2023December 31, 2022
Nonaccrual
Nonaccrual Ratios (1)
Nonaccrual
Nonaccrual Ratios (1)
Total nonaccrual consumer loans held for investment$23,719 0.5 %$16,774 0.4 %
Total nonaccrual commercial loans and leases held for investment27,664 3.8 %18,053 2.3 %
Total nonaccrual loans and leases held for investment$51,383 0.9 %$34,827 0.7 %
(1)     Calculated as the ratio of nonaccruing loans and leases to loans and leases HFI at amortized cost.

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