LendingClub Corp
For the period ended Dec 31, 2025. Filed Feb 12, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 12, 2026
HAPN$15.96-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-13.
0001409970-25-000009
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-12.
0001409970-26-000018
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 166 previous paragraphs and 176 current paragraphs.
86 unchanged; 64 reworded; 24 added; 16 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 32 previous and 32 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
Election of Fair Value Option
Current report
Effective January 1, 2026, we elected the fair value option to account for held for investment (HFI) loans that were originated on or after that date. Prior to this election, loans that were originated as HFI were, and we expect will continue to be, accounted for at amortized cost, which required the initial recognition of an allowance for lifetime expected credit losses under the CECL methodology, recognized within “Provision for credit losses” on the Income Statement. We believe that applying the fair value option, rather than the CECL methodology, to HFI loans more accurately reflects the in-period economic performance of the loans by better aligning the value of the loan to its then fair value. Under the fair value option, origination fee revenue and marketing costs are recognized in earnings at the time of loan origination, rather than being deferred, and changes in fair value of loans are recognized in current period earnings within “Net fair value adjustments” on the Income Statement. Further, by applying the fair value option to HFI loans, we are applying the same accounting methodology to all loans we originate after January 1, 2026, as both HFI and held for sale (HFS) loans will be measured at fair value.
Current report
◦Marketplace loan originations increased $1.7 billion, or 30%, for the year ended December 31, 2025 compared to the same period in 2024, driven by a higher retention of HFS loans and an increase in marketplace investor demand. Loan originations HFS as a percentage of loan originations was 74% and 76% for the years ended December 31, 2025 and 2024, respectively.
Current report
◦Loan originations HFI at amortized cost increased $719.3 million, or 41%, for the year ended December 31, 2025 compared to the same period in 2024. Loan originations HFI at amortized cost as a percentage of loan originations was 26% and 24% for the years ended December 31, 2025 and 2024, respectively.
Current report
◦Marketplace revenue: Marketplace revenue increased $113.2 million, or 47%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to higher origination volume of marketplace loans and improved loan sales prices.
Current report
◦Net interest income: Net interest income increased $91.6 million, or 17%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarilydue to an increase in total interest-earning assets and lower deposit funding costs.
Current report
•Total non-interest expense: Total non-interest expense increased $86.9 million, or 16%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in marketing expense based on higher origination volume and the resumption of certain marketing initiatives, as well as increases in professional services expense and compensation and benefit expense.
Current report
•Total assets: Total assets were $11.6 billion as of December 31, 2025 compared to $10.6 billion in the prior year. Total assets increased year-over-year primarily driven by an increase in loans on our balance sheet.
Current report
•Deposits: Total deposits were $9.8 billion as of December 31, 2025 compared to $9.1 billion in the prior year. The increase was primarily due to growth in our high-yield savings deposits.
Current report
Origination fees were $372.8 million and $283.4 million for the years ended December 31, 2025 and 2024, respectively, an increase of 32%. The increase was primarily due to higher origination volumes of marketplace loans.
Current report
Net fair value adjustments were $(134.9) million and $(154.7) million for the years ended December 31, 2025 and 2024, respectively, a decreased loss of $19.7 million. The reduction was primarily due to higher loan sale prices as well as a fair value benefit recognized in the second quarter of 2025 based on improved credit performance, partially offset by an increase in the origination volume of marketplace loans.
Current report
Other Non-interest Income
Current report
Other non-interest income primarily consists of (i) rental income earned from third-party tenants under operating lease agreements and (ii) referral revenue that relates to fees earned from third-party companies when customers referred by us consider or purchase products or services from such third-party companies. The tables below illustrate the composition of other non-interest income for each period presented:
Current report
Other non-interest income increased $7.1 million, or 69%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to rental income earned from third-party tenants under operating lease agreements associated with the building purchased in the second quarter of 2025.
Current report
(1)The first quarter of 2025 included an $8.0 million charge-off related to one office loan within our CRE portfolio, which was fully reserved for in prior periods. The CRE office loan portfolio balance was under $35 million as of December 31, 2025.
Current report
Compensation and benefits expense increased $9.7 million, or 4%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in headcount.
Current report
Professional services expense increased $10.3 million, or 32%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in business consulting services.
Current report
Occupancy expense increased $4.0 million, or 26%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily related to operating expenses associated with the office building purchased during the second quarter of 2025.
Current report
For the year ending December 31, 2023, we recorded a tax expense of $15.7 million representing an effective tax rate of 28.7%. The decrease in effective tax rate for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to favorable changes related to windfalls and shortfalls related to equity compensation.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. For the year ended December 31, 2025, OBBBA did not impact our effective tax rate; however, certain OBBBA provisions, including enhanced expensing, reduced current taxes payable. OBBBA has multiple effective dates, and we will continue to monitor developments and evaluate potential impacts on future periods.
Current report
Loans initially classified as HFS are reported at their fair value with our election of the fair value option and are classified as Level 3 instruments. We use a DCF approach to calculate the NPV of expected cash flows. This model uses significant unobservable inputs that inherently require judgment and reflect our best estimates of the assumptions a market participant would use to calculate fair value. Those significant unobservable inputs used in the fair value measurement of HFS loans include:
Current report
•Discount Rate – The weighted-average rate at which the expected cash flows are discounted to arrive at the net present value of the loan. The discount rate is primarily determined based on marketplace investor return expectations.
Current report
•Annualized net credit loss rate– The annualized rate of lifetime charge-offs, net of recoveries, expressed as a percentage of the average lifetime principal balance of loan pools with similar characteristics.
Current report
•Annualized prepayment rate – The annualized rate of lifetime prepayments expressed as a percentage of the average principal balance of loan pools with similar characteristics.
Removed paragraphs (16)
Previous report
◦Loan originations held for investment (HFI) at amortized cost decreased $0.4 billion, or 21%, for the year ended December 31, 2024 compared to the prior year.
Previous report
◦Loan originations HFI at amortized cost as a percentage of loan originations was 24% and 29% for the years ended December 31, 2024 and 2023, respectively. The percentage of loan originations HFI in any period is dependent on many factors, including quarterly loan origination volume, risk-adjusted returns, liquidity and general regulatory capital considerations.
Previous report
◦Marketplace revenue: Marketplace revenue decreased $48.7 million, or 17%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in servicing fees due to lower loan balances serviced for others as well as a $7.7 million servicing asset write-off related to a loan portfolio purchase in the third quarter of 2024 of loans that we previously originated and sold. In addition, the decrease was also driven by an increased loss in net fair value adjustments due to the increase in the origination volume of marketplace loans, partially offset by higher loan sales prices.
Previous report
◦Net interest income: Net interest income decreased $27.8 million, or 5%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily driven bylower interest income due to a lower average balance of loans retained as HFI in the current period. In addition, the decrease was also driven byan increase in interest expense associated with growth in interest-bearing deposits and an increase in interest rates. This was partially offset byhigher interest income due to a higher average balance of securities retained associated with our Structured Certificates and a higher average balance of loans held for sale (HFS).
Previous report
•Total non-interest expense: Total non-interest expense decreased $22.8, or 4%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in headcount as a result of the workforce reduction plans we implemented in 2023.
Previous report
•Total assets: Total assets as of December 31, 2024 increased $1.8 billion, or 20%, compared to the prior year, primarily reflecting growth in securities related to our Structured Certificates program and loans held for investment at fair value, including the purchase of a $1.3 billion outstanding principal balance loan portfolio during the third quarter of 2024. This portfolio consisted of loans that we previously originated and sold. This increase was partially offset by a decrease in loans retained as HFI.
Previous report
(2) The year ended December 31, 2022 excludes an income tax benefit of $143.5 million due to the release of our deferred tax asset valuation allowance.
Previous report
(4)The balance at December 31, 2024 includes a loan portfolio that was purchased with a $1.3 billion outstanding principal balance during the third quarter of 2024. This portfolio consisted of loans which we previously originated and sold.
Previous report
Origination fees were $283.4 million and $279.1 million for the years ended December 31, 2024 and 2023, respectively, an increase of 2%. The increase was primarily due to the increase in the origination volume of marketplace loans.
Previous report
Net fair value adjustments were $(154.7) million and $(134.1) million for the years ended December 31, 2024 and 2023, respectively, an increased loss of $20.5 million. The increased loss was primarily driven by the increase in the origination volume of marketplace loans. This was partially offset by higher loan sales prices compared to the prior year, resulting primarily from a decrease in interest rates.
Previous report
Compensation and benefits expense decreased $29.8 million, or 11%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in headcount as a result of the workforce reduction plans we implemented in 2023.
Previous report
Professional services expense decreased $3.1 million, or 9%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in consulting fees.
Previous report
Occupancy expense decreased $1.7 million, or 10%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in rent expense.
Previous report
In 2022, we evaluated both positive and negative evidence when assessing the recoverability of our net deferred tax assets. Several factors were considered, which primarily included our business model transition and the resulting increase in profitability and the expectation of continued profitability. These factors resulted in the release of the majority of our valuation allowance against our deferred tax assets in 2022.
Previous report
The following table provides a reconciliation of Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit to the nearest GAAP measures:
Previous report
In response to the COVID-19 pandemic, the FRB, OCC, and FDIC adopted a final rule related to the regulatory capital treatment of the allowance for credit losses under CECL. As permitted by the rule, the Company elected to delay the estimated impact of CECL on regulatory capital resulting in a CET1 capital benefit of $35 million at December 31, 2021. This benefit was phased out over a three-year transition period that commenced on January 1, 2022 at a rate of 25% each year through January 1, 2025.
Reworded paragraphs (64)
Previous wording
LendingClub operates a leading, nationally chartered, digital marketplace bank that aims to advantage our members with the information, tools, and guidance needed to achieve their own version of financial success. We do this through a smart, simple, and rewarding digital experience that leverages data and technology to increase access to credit, lower borrowing costs, and improve returns on savings.
Current wording
LendingClub operates a leading, nationally chartered, digital marketplace bank that leverages data and technology to increase access to credit, reduce borrowing costs, and improve returns on savings for our members.
Previous wording
The following results for the year ended December 31, 2024, compared to thesame period in 2023, reflect growth in our Balance Sheet as well as an increase in net income.
Current wording
The following is a summary of our results for the year ended December 31, 2025 compared to thesame period in 2024, reflecting growth in loan originations, total net revenue and net income.
Previous wording
•Loan originations: Loan originations decreased $0.2 billion, or 3%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily driven by a decrease in unsecured personal loan origination volume.
Current wording
•Loan originations: Loan originations increased $2.4 billion, or 33%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was driven by an increase in unsecured personal loan origination volume.
Previous wording
•Total net revenue: Total net revenue decreased $77.6 million, or 9.0%, for the year ended December 31, 2024 compared to the same period in 2023.
Current wording
•Total net revenue: Total net revenue increased $211.8 million, or 27%, for the year ended December 31, 2025 compared to the same period in 2024.
Previous wording
◦Net interest margin: Net interest margin for the year ended December 31, 2024 was 5.6%, decreasing from 7.0% in the prior year.
Current wording
◦Net interest margin: Net interest margin for the year ended December 31, 2025 was 6.07%, increasing from 5.62% in the prior year.
Previous wording
•Provision for credit losses: Provision for credit losses decreased $65.3 million, or 27%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily driven by a decrease in the initial provision for credit losses from a lower volume of originated loans retained as HFI at amortized cost. In addition, the provision for credit losses in 2023 included a higher quantitative and qualitative allowance as a result of an increase in expected losses and a less favorable economic outlook. The year over year decrease was partially offset by the impact of a $8.0 million provision in our Commercial Real Estate (CRE) portfolio due to one legacy office loan, which was recognized in 2024. Excluding this one office loan, the CRE office loan portfolio balance was under $35 million as of December 31, 2024.
Current wording
•Provision for credit losses: Provision for credit losses increased $13.1 million, or 7%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily driven by a higher volume of originated loans retained as HFI at amortized cost, partially offset by a shift in the mix of loans toward types with lower expected credit losses and the impact of an $8.0 million provision recognized in 2024 related to one legacy office loan within our commercial real estate (CRE) portfolio.
Previous wording
•Net income: Net income increased $12.4 million, or 32%, for the year ended December 31, 2024 compared to the same period in 2023.
Current wording
•Net income: Net income increased $84.3 million, or 164%, for the year ended December 31, 2025 compared to the same period in 2024.
Previous wording
•Diluted earnings per share (Diluted EPS): Diluted EPS was $0.45 for the year ended December 31, 2024, compared to $0.36 in the prior year.
Current wording
•Diluted earnings per share (EPS): Diluted EPS increased to $1.16 for the year ended December 31, 2025, compared to $0.45 for the prior year.
Previous wording
•Pre-provision net revenue (PPNR): PPNR for the year ended December 31, 2024 decreased $54.8 million, or 18%, compared to the same period in 2023.
Current wording
•Pre-provision net revenue (PPNR): PPNR for the year ended December 31, 2025 increased $124.9 million, or 51%, compared to the same period in 2024, driven by an increase in total net revenue, partially offset by an increase in non-interest expense.
Previous wording
•Deposits: Total deposits as of December 31, 2024 increased $1.7 billion, or 24%, compared to the same period in 2023, primarily reflecting growth in our high-yield savings and certificates of deposit. Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 87% of total deposits as of December 31, 2024.
Current wording
◦Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 88% of total deposits as of December 31, 2025.
Previous wording
(5) Assets under management (AUM) reflects loans serviced on our platform, which includes outstanding balances of unsecured personal loans, auto refinance loans and education and patient finance loans serviced for others and retained by the Company.
Current wording
(4) Assets under management (AUM) reflects loans serviced on our platform, which includes outstanding balances of unsecured personal loans and auto refinance loans serviced for others and retained by the Company as of the end of the periods presented.
Previous wording
(5)Calculated as ALLL or gross ALLL, where applicable, to the corresponding portfolio segment balance of loans and leases held for investment at amortized cost.
Current wording
(3)Calculated as ALLL or gross ALLL, where applicable, to the corresponding portfolio segment balance of loans and leases held for investment at amortized cost.
Previous wording
(6)Calculated as annualized net charge-offs divided by average outstanding loans and leases HFI at amortized cost, net, during the period.
Current wording
(4)Calculated as net charge-offs divided by average outstanding loans and leases HFI at amortized cost, net, during the period.
Previous wording
We elected to account for HFS loans under the fair value option. With the election of the fair value option, origination fees, net fair value adjustments prior to sale of the loans, and servicing asset gains on the sales of the loans, are reported as separate components within “Marketplace revenue.”
Current wording
We elected to account for HFS loans under the fair value option. With the election of the fair value option, origination fees, net fair value adjustments prior to the sale of the loans, and servicing asset gains on the sales of the loans, are reported as separate components within “Marketplace revenue.”
Previous wording
Origination fees recorded as a component of marketplace revenue are primarily fees earned related to originating and issuing unsecured personal loans that are HFS.
Current wording
Origination fees recorded as a component of marketplace revenue are fees charged to borrowers in connection with the origination of loans that are HFS.
Previous wording
We receive servicing fees to compensate us for servicing loans on behalf of investors, including managing payments from borrowers, collections and payments to those investors. Servicing fee revenue related to loans sold also includes the change in fair value of servicing assets associated with the loans.
Current wording
We receive servicing fees to compensate us for servicing loans on behalf of marketplace investors, including managing payments from borrowers and remittances to those investors. Servicing fee revenue related to loans sold also includes the change in fair value of servicing assets associated with the loans.
Previous wording
The tables below illustrate AUM serviced on our platform by the method in which the loans were financed as of the periods presented. Loans sold and subsequently serviced on behalf of the investor represent a key driver of our servicing fee revenue.
Current wording
The table below illustrates the average balance of loans sold and subsequently serviced on behalf of the investor on our marketplace platform (in millions):
Previous wording
In addition to the loans serviced on our marketplace platform, we serviced $102.0 million, $133.2 million and $167.0 million in outstanding principal balance of commercial loans sold as of December 31, 2024, 2023 and 2022, respectively.
Current wording
In addition to the loans serviced on our marketplace platform, we serviced $42.7 million, $102.0 million and $133.2 million in outstanding principal balance of commercial loans sold as of December 31, 2025, 2024 and 2023, respectively.
Previous wording
Servicing fees were $64.9 million and $98.6 million for the years ended December 31, 2024 and 2023, respectively, a decrease of 34%. The decrease was primarily due to a decrease in loan balances serviced for others as well as a $7.7 million servicing asset write-off related to the loan portfolio purchase during the third quarter of 2024 of loans that we previously originated and sold. In addition, the decrease was also driven by a one-time benefit related to recouping volume-based purchase incentives during the third quarter of 2023 as well as an increase in the fair value of the servicing asset based on higher expected servicing fee revenue in 2023.
Current wording
Servicing fees were $59.0 million and $64.9 million for the years ended December 31, 2025 and 2024, respectively, a decrease of 9%. The decrease was primarily due to a lower average principal balance of loans serviced and reduction in servicing fees on delinquent loan collections. This was partially offset by a decrease in fair value amortization on the servicing asset, which included a $7.7 million servicing asset write-off in the third quarter of 2024 related to a loan portfolio purchase.
Previous wording
In connection with loan sales, we recognize a gain or loss on the sale of loans based on the level to which the contractual servicing fee is above or below an estimated market rate of servicing at the time of sale. Additionally, we recognize transaction costs, if any, as a loss on sale of loans.
Current wording
In connection with loan sales to marketplace investors, we capitalize the initial fair value of servicing rights. A gain or loss is recorded based on the level to which the contractual servicing fee is above or below an estimated market rate of servicing at the time of sale. Additionally, we recognize transaction costs, if any, as a loss on sale of loans.
Previous wording
Gain on sales of loans was $49.1 million and $47.8 million for the years ended December 31, 2024 and 2023, respectively, an increase of 3%. The increase was primarily due to a decrease in the volume of loans sold with credit support agreements compared to the prior year.
Current wording
Gain on sales of loans was $59.1 million and $49.1 million for the years ended December 31, 2025 and 2024, respectively, an increase of 20%. The increase was primarily driven by the increase in the volume of marketplace loans sold as well as higher Structured Program transaction expenses in 2024.
Previous wording
We record fair value adjustments on loans that are recorded at fair value, which include gains or losses from sale prices in excess of or less than the loan principal amount sold and realized net charge-offs. In addition, as loans are held on the Balance Sheet, incremental fair value adjustments on the loans are recorded in “Net fair value adjustments” within “Marketplace revenue,” whereas the associated interest income is recorded within “Net interest income.”
Current wording
We record adjustments to the carrying value of loans, for which we have elected to account for under the fair value option, to reflect their fair value. These adjustments include gains or losses from sale prices in excess of or less than the loan principal amount sold and realized net charge-offs. In addition, as loans are held on the Balance Sheet, incremental fair value adjustments on the loans are recorded in “Net fair value adjustments” within “Marketplace revenue,” whereas the associated interest income is recorded within “Net interest income.”
Previous wording
Net fair value adjustments primarily consist of fair value adjustments on our loans HFS portfolio. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 7. Fair Value Measurements” for additional information related to the significant unobservable inputs used in the fair value measurement of loans HFS and activity within the loans HFS portfolio.
Current wording
Net fair value adjustments primarily consist of fair value adjustments on our HFS loan portfolio. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 7. Fair Value
Previous wording
(3)Prior period amounts have been reclassified to conform to the current period presentation.
Current wording
(2) Prior period amounts have been reclassified to conform to the current period presentation.
Previous wording
An analysis of the year-over-year changes in the categories of interest revenue and interest expense resulting from changes in volume and rate is as follows:
Current wording
An analysis of the year-over-year changes in the categories of interest income and interest expense resulting from changes in volume and rate is as follows:
Previous wording
The allowance for loan and lease losses (ALLL) for lifetime expected losses under CECL on HFI loans and leases at amortized cost is initially recognized as “Provision for credit losses” at the time of origination. The ALLL is estimated using a discounted cash flow (DCF) approach, where effective interest rates are used to calculate the net present value (NPV) of expected cash flows. Theeffective interest rates are calculated based on the periodic interest income received from the loan’s contractual cash flows and the net investment in the loan, which includes deferred origination fees and costs, to provide a constant rate of return over the loan term. The NPV from the DCF approach is then compared to the amortized cost basis of the loans and leases to derive expected credit losses. Under the DCF approach, the provision for credit losses in subsequent periods includes a credit loss expense related to the discounting effect due to the passage of time after the initial recognition of ALLL on originated HFI loans at amortized cost.
Current wording
The allowance for loan and lease losses (ALLL) for lifetime expected losses under CECL on loans and leases HFI at amortized cost is initially recognized as “Provision for credit losses” at the time of origination. The ALLL is estimated using a discounted cash flow (DCF) approach, where effective interest rates are used to calculate the net present value (NPV) of expected cash flows. Theeffective interest rates are calculated based on the periodic interest income received from the loan’s contractual cash flows and the net investment in the loan, which includes deferred origination fees and marketing costs, to provide a constant rate of return over the loan term. The NPV from the DCF approach is then compared to the amortized cost basis of the loans and leases to determine the ALLL. Under the DCF approach, the provision for credit losses in subsequent periods includes a credit loss expense related to the discounting effect due to the passage of time after the initial recognition of the ALLL on originated loans and leases HFI at amortized cost.
Previous wording
The provision for credit losses includes the credit loss expense for HFI loans and leases at amortized cost, available for sale (AFS) securities and unfunded lending commitments. The table below illustrates the composition of the provision for credit losses for each period presented, as well as the loan originations held for investment in each period, which is a key driver for credit loss expense:
Current wording
The provision for credit losses includes the credit loss expense for loans and leases HFI at amortized cost, available for sale (AFS) securities and unfunded lending commitments. The table below illustrates the composition of the provision for credit losses for each period presented, as well as the loan originations HFI in each period, which is a key driver for credit loss expense:
Previous wording
The provision for credit losses was $178.3 million and $243.6 million for the years ended December 31, 2024 and 2023, respectively, a decrease of 27%. The decrease was primarily driven by a decrease in the initial provision for credit losses from a lower volume of originated loans retained as HFI at amortized cost. In addition, the provision for credit losses in 2023 included a higher quantitative and qualitative allowance as a result of an increase in expected losses and a less favorable economic outlook. The year over year decrease was partially offset by the impact of a $8.0 million provision in our CRE portfolio due to one legacy office loan, which was recognized in 2024. Excluding this one loan, the CRE office loan portfolio balance was under $35 million as of December 31, 2024.
Current wording
The provision for credit losses was $191.3 million and $178.3 million for the years ended December 31, 2025 and 2024, respectively, an increase of 7%. The increase was primarily driven by a higher volume of originated loans retained as HFI at amortized cost, partially offset by a shift in the mix of loans toward types with lower expected losses and the impact of an $8.0 million provision recognized in 2024 related to one legacy office loan within our CRE portfolio.
Previous wording
(1)Relates to $105.0 million, $78.1 million and $138.0 million of unfunded commitments as of December 31, 2024, 2023 and 2022, respectively.
Current wording
(2)Relates to $52.0 million, $105.0 million and $78.1 million of unfunded commitments as of December 31, 2025, 2024 and 2023, respectively.
Previous wording
The following table presents the components of the allowance for loan and lease losses:
Current wording
The following table presents the components of the ALLL:
Previous wording
The following table presents information regarding average loan and lease balances, net charge-offs and the ratio of net charge-offs to average outstanding loans and leases HFI at amortized cost, net, during the period:
Current wording
The following table presents information regarding average loan and lease balances, net charge-offs and the ratio of net charge-offs to average outstanding loans and leases HFI at amortized cost, net, during the period. Net charge-offs are impacted by the expected timing of the charge-offs, anticipated recoveries and the age of the overall portfolio.
Previous wording
Loans and leases are generally placed on nonaccrual status when contractually past due 90 days or more, or earlier if management believes that the probability of collection does not warrant further accrual. Unsecured personal loans are generally charged-off no later than 120 days past due.
Current wording
Loans and leases are generally placed on nonaccrual status when contractually past due 90 days or more, or earlier if management believes that the probability of collection does not warrant further accrual. Unsecured personal loans are generally charged-off when a borrower is contractually 120 days past due.
Previous wording
Marketing expense increased $6.6 million, or 7%, for the year ended December 31, 2024 compared to the same period in 2023. The increase was primarily due to an increase in variable marketing expenses based on higher origination volume of marketplace loans.
Current wording
Marketing expense increased $48.8 million, or 49%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in variable marketing expenses based on higher origination volume as well as the resumption of certain marketing initiatives.
Previous wording
Equipment and software expense decreased $2.3 million, or 4%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in software license expense.
Current wording
Equipment and software expense increased $5.8 million, or 11%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in software license expense and cloud services.
Previous wording
Depreciation and amortization expense increased $11.6 million, or 25%, for the year ended December 31, 2024 compared to the same period in 2023. The increase was primarily due to an increase in the amortization of internally-developed software as well as a $5.5 million impairment expense for internally-developed software recorded in 2024.
Current wording
Depreciation and amortization expense increased $4.1 million, or 7%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in the amortization of internally-developed software placed into service in 2025, partially offset by a decrease in impairment expense for internally-developed software compared to the prior year.
Previous wording
Other non-interest expense decreased $4.0 million, or 7%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in miscellaneous operating expenses.
Current wording
Other non-interest expense increased $4.2 million, or 8%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in miscellaneous operating expenses.
Previous wording
For the years ended December 31, 2024 and 2023, we recorded an income tax expense of $13.7 million and $15.7 million, representing an effective tax rate of 21.1% and 28.7%, respectively. The effective tax rate for the year ended December 31, 2024 differs from the statutory rate due to the favorable impact of recurring tax credits and the unfavorable impact of the non-deductible portions of executive compensation and stock-based compensation. The decrease in effective tax rate for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to a decrease in the unfavorable impact of the non-deductible portions of executive compensation and stock-based compensation. For the year ended December 31, 2022, we recorded an income tax benefit of $136.6 million primarily due to the release of a $175.6 million valuation allowance against our deferred tax assets, of which $143.5 million was primarily based on our reassessment of the future realizability of our deferred tax assets.
Current wording
For the years ended December 31, 2025 and 2024, we recorded an income tax expense of $41.3 million and $13.7 million, representing an effective tax rate of 23.3% and 21.1%, respectively. The effective tax rate for the year ended December 31, 2025 differs from the statutory rate due to state taxes, the favorable impact of recurring tax credits, changes in unrecognized tax benefits related to prior year tax credits, equity-based compensation, and the unfavorable impact of the non-deductible portions of executive compensation. The increase in effective tax rate for the year ended December 31, 2025 compared to the same period in 2024 was primarily due to the remeasurement of deferred tax assets because of the decrease in combined state tax rate. On June 27, 2025, California Senate Bill 132 was signed into law, requiring that banks and financial companies transition from an equally weighted three-factor apportionment formula to a single-sales-factor apportionment formula, effective for tax years beginning in 2025. Other year-over-year changes in rate reconciliation items largely offset each other.
Previous wording
As of December 31, 2024, we maintained a valuation allowance of $46.3 million related to certain state net operating loss carryforwards (NOLs) and state tax credit carryforwards. The realization and timing of any remaining state NOLs and state tax credit carryforwards is uncertain and may expire before being utilized, based primarily on the allocation of taxable income constraints to the Parent and not related to the earnings of the Company. Changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions are recorded as current period income tax expense or benefit.
Current wording
As of December 31, 2025, we maintained a valuation allowance of $48.0 million related to certain state net operating loss carryforwards (NOLs) and state tax credit carryforwards. The realization and timing of any remaining state NOLs and state tax credit carryforwards is uncertain and may expire before being utilized, based primarily on the allocation of taxable income constraints to the Parent and not related to the earnings of the Company. Changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions are recorded as current period income tax expense or benefit.
Previous wording
The Company defines operating segments to be components of the Company for which discrete financial information is evaluated regularly by the Chief Operating Decision Maker (CODM) to allocate resources and evaluate financial performance. The measure of segment profit used by the CODM in this evaluation is net income. The CODM consists of the Company’s Chief Executive Officer and Chief Financial Officer. This information is reviewed according to the legal organizational structure of the Company’s operations with products and services presented separately for the parent bank holding company and its wholly-owned subsidiary, LC Bank, which are both considered reportable segments. Income taxes are recorded on a separate entity basis whereby each operating segment determines income tax expense or benefit as if it filed a separate tax return.
Current wording
We define operating segments to be components of the Company for which discrete financial information is evaluated regularly by the Chief Operating Decision Maker (CODM) to allocate resources and evaluate financial performance. The measure of segment profit used by the CODM in this evaluation is net income. The CODM consists of our Chief Executive Officer and Chief Financial Officer. This information is reviewed according to the legal organizational structure of our operations with products and services presented separately for the parent bank holding company and its wholly-owned subsidiary, LC Bank, which are both considered reportable segments. Income taxes are recorded on a separate entity basis whereby each operating segment determines income tax expense or benefit as if it filed a separate tax return.
Previous wording
The LC Bank operating segment represents the national bank legal entity and reflects operating activities after its formation. This segment provides a full complement of financial products and solutions, including loans and deposits. It originates loans to individuals and businesses, retains loans for investment, sells loans to investors and manages relationships with deposit holders.
Current wording
The LC Bank operating segment represents the national bank legal entity and reflects operating activities after its formation. This segment provides a full complement of financial products and solutions, including loans and deposits. It originates loans to individuals and businesses, retains loans for investment, sells loans to marketplace investors and manages relationships with deposit holders.
Showing the first 40 of 64 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Measurements” for additional information related to the significant unobservable inputs used in the fair value measurement of HFS loans and activity within the HFS loan portfolio.
Current report — wording carried from elsewhere
(2) Prior period amounts have been reclassified to conform to the current period presentation.