Form 10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of April 30, 2013, there were 12,500,217 shares of the registrant’s common stock outstanding.

This Quarterly Report on Form 10-Q (“Report”) contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this Report on Form 10-Q regarding LendingClub borrower members, credit scoring, Fair Isaac Corporation (“FICO”) scores, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:

We may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. We have included important factors in the cautionary statements included in this Report, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from forward-looking statements contained in this report. Forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this Report completely and with the understanding that actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The accompanying notes are an integral part of these consolidated financial statements.

The consolidated balance sheets as of March 31, 2013 and December 31, 2012, the consolidated statements of operations for the three months ended March 31, 2013 and 2012, respectively, and the consolidated statements of cash flows for the three months ended March 31, 2013 and 2012, respectively, have been prepared by LendingClub Corporation (“LendingClub”, “we”, “our” the “Company” and “us”) in conformity with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. The Company did not have any items of other comprehensive income (loss) during any of the periods presented in the financial statements as of and for the three month periods ended March 31, 2013 and 2012, and therefore, the Company is not currently required to report comprehensive income. In the opinion of management, all necessary adjustments (which include only normal recurring adjustments) have been made for a fair presentation of the financial position, results of operations, and cash flows for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full fiscal year.

On December 19, 2012, our Board of Directors approved a change in our fiscal year-end from March 31^stto December 31^st. The change was effective as of December 31, 2012 and we filed a transition report with the Securities and Exchange Commission (“SEC”) which covered the nine month period ending December 31, 2012. The accompanying condensed consolidated financial statements cover the period from January 1, 2013 through March 31, 2013, representing the first quarter of our newly adopted fiscal year period and should be read in conjunction with our annual financial statements.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, LC Advisors, LLC (“LCA”), a registered investment adviser, and LC Trust I (the “Trust”), a Delaware business trust. As the Company is the primary beneficiary of the Trust, we have determined that the Trust is a variable interest entity (“VIE”) and therefore should be consolidated.

To determine whether we qualify as the primary beneficiary, the Company considers both qualitative and quantitative factors regarding the nature, size and form of the Company’s involvement with the VIE. The Company assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis.

The Trust acquires and holds Member Loans from the Company for the sole benefit of investors that purchase through Global Master Trust Certificates (“Certificates”) issued by the Trust and which are related to the underlying Member Loans. The Certificates may only be settled with cash flows from the underlying Member Loans held by the Trust consistent with the member payment dependent design of the Notes; Certificate holders do not have recourse to the general credit of the Trust, Company, borrower members, or other investors.

The Company’s capital contributions to the Trust have been insufficient to allow the Trust to finance its purchase of any significant amount of Member Loans without the issuance of Certificates to investors. The Trust’s low capitalization levels and structure, wherein investors’ hold beneficial interests in Member Loans via the Certificates, qualifies the Trust as a VIE. The Company believes it is the primary beneficiary of the Trust because of its controlling financial interest in the Trust. The Company performs or directs activities that significantly affect the Trust’s economic performance via (i) operation of the platform that enables borrowers to apply for Member Loans purchased by the Trust; (ii) credit underwriting and servicing of Member Loans purchased by the Trust and, (iii) LCA’s role to source investors that ultimately purchase Certificates that supply the funds for the Trust to purchase Member Loans. Collectively, the activities of the Company, LCA and Trust described above allow the Company to fund more Member Loans and to collect the related loan origination fees, and for LCA to collect the management fees on the investors’ capital used to purchase Trust Certificates, than would be the case without the existence of the Trust. Therefore, the Company receives significant economic benefits from the existence and activities conducted by the Trust. The Company has determined that the Trust meets the consolidation requirements. All intercompany transactions and accounts between the Company, the Trust, and LCA have been eliminated.

We have incurred operating losses from inception through December 31, 2012. For the three months ended March 31, 2013, we had net income of approximately $40,000. We have an accumulated deficit of $57.6 million and a total stockholders’ deficit of $49.8 million, each as of March 31, 2013.

Historically, we have financed our operations through debt and equity financing from various sources. For the three months ended March 31, 2013 we had positive cash flows from operations of $3.0 million. As of March 31, 2013, we had $51.3 million of cash and cash equivalents. Our current operating plan calls for continued investments in technology, development, security infrastructure, underwriting, credit processing and marketing. If our assumptions regarding growth and operating plan are incorrect, we may need to slow our investment spending, which could slow our rate of growth, and we may consume our current liquidity resources.

The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires our management to make judgments and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. Our most significant judgments, assumptions and estimates and which we believe are critical in understanding and evaluating our reported financial results include: (i) revenue recognition; (ii) fair value determinations; (iii) share-based compensation; and (iv) provision for income taxes, net of valuation allowance for deferred tax assets. These estimates and assumptions are inherently subjective in nature, actual results may differ from these estimates and assumptions, and the differences could be material.

Cash and cash equivalents include various unrestricted deposits with financial institutions in checking, money market and short-term certificate of deposit accounts. We consider all highly liquid investments with original maturity dates of three months or less to be cash equivalents.

Restricted cash consists of the Company’s funds in certain checking, certificate of deposit, and money market accounts that are: 1) pledged to or held in escrow by our correspondent banks as security for transactions processed on or related to our platform and 2) received from Member investors but not yet applied to their accounts.

All Member Loans purchased from April 7, 2008 through November 2012, have been held for investment on our balance sheet based on management’s intent and ability to hold such loans for the foreseeable future or to maturity. In addition to Member Loans originated to be held for investment, beginning December 2012, certain Member Loans have been purchased and sold to third parties.

Beginning October 13, 2008, Member Loans were able to be financed by Notes issued by us to investors, and the majority of Member Loans originated since that date have been financed in that manner. These Notes are special limited recourse obligations of LendingClub, in that LendingClub has no obligation to make a payment on a Note until LendingClub receives a payment from the underlying member borrower. Each series of Notes corresponds to a single Member Loan facilitated through our platform and the payments to investors in the Notes are directly dependent on the timing and amounts of payments received on the related Member Loan. If we do not receive a payment on the Member Loan, we are not obligated to and will not make any payments on the corresponding Notes. In conjunction with this financing structure effective as of October 13, 2008, we adopted the provisions of FASB ASC 825-10, which permits companies to choose to measure certain financial instruments and certain other items at fair value. Accordingly, we have elected the fair value option for Member Loan originations that were financed by Notes (“Member Loans at fair value”) and also for the related Notes. Since March 2011, we have also elected the fair value option for all Member Loan originations financed by Certificates and the related Certificates. The estimated unrealized gains and losses on financial instruments for which the fair value option has been elected are reported in earnings.

We facilitate the origination of some Member Loans and purchase them ourselves, with sources of funds other than Notes and Certificates, to ensure sufficient financing for loans desired by our borrower members. We receive the same terms on Member Loans that we finance as the terms received by other Note investors. Funds to finance such Member Loan purchases historically were

obtained through our borrowings under loan facilities with various entities and issuance of various series of preferred stock (see Note 7 – Preferred Stock). Member Loan originations through September 30, 2011, that were purchased by us with sources of funds other than Notes and Certificates were carried at amortized cost, reduced by a valuation allowance for loan losses incurred as of the balance sheet date (“Member Loans at amortized cost”). The amortized cost of such Member Loans included their unpaid principal balance net of unearned income, which was comprised of origination fees charged to borrower members and offset by our incremental direct origination costs for the loans. Unearned income was amortized ratably over the Member Loan’s contractual life using a method that approximated the effective interest method. All Member Loan originations after September 30, 2011, that were purchased by us with sources of funds other than Notes and Certificates have been accounted for at fair value. The balance of Member Loans at amortized cost was zero at both March 31, 2013 and December 31, 2012, respectively.

The aggregate fair values of the Member Loans at fair value and Notes and Certificates at fair value are reported as separate line items in the assets and liabilities sections of our consolidated balance sheets using the methods and disclosures related to fair value accounting that are described in FASB ASC 820.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Changes in the fair value of the Member Loans at fair value and Notes and Certificates at fair value are recognized, on a gross basis, in earnings.

We determine the fair value of the Member Loans at fair value and Notes and Certificates at fair value in accordance with the fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs, which generally requires significant management judgment, when measuring fair value. FASB ASC 820 establishes the following hierarchy for categorizing these inputs:

Since observable market prices and inputs are not available for similar assets and liabilities, the Member Loans at fair value and Notes and Certificates at fair value are considered Level 3 financial instruments. We estimated the fair values of Member Loans and their related Notes and Certificates using a discounted cash flow valuation methodology. The estimated fair value of Member Loans is computed by projecting the future contractual cash flows to be received on the loans, adjusting those cash flows for our expectations of prepayments (if significant) and defaults and losses over the life of the loans, and recoveries, if any. We then discount those projected net cash flows to a present value, which is the estimated fair value. Our expectation of future defaults and losses on loans is based on analyses of actual defaults and losses that occurred on the various credit grades of Member Loans over the past several years. Expected recoveries reflect actual historical recovery experience for the various types of defaulted loans and the contractual arrangements with collection agencies. The discount rates for the projected net cash flows of the Member Loans are our estimates of the rates of return that investors in unsecured consumer credit obligations would require when investing in the various credit grades of Member Loans.

LendingClub’s and the Trust’s obligation to pay principal and interest on any Note or Certificate (as applicable) is equal to the pro-rata portion of the payments, if any, received on the related Member Loan. The gross effective interest rate associated with a Note or a Certificate is the same as the interest rate earned on the related Member Loan. At March 31, 2013, the discounted cash flow methodology used to estimate the Notes’ and Certificates’ fair values uses the same projected net cash flows as their related Member Loans. The discount rates for the projected net cash flows of the Notes and Certificates are our estimates of the rates of return, including risk premiums (if significant) that investors in unsecured consumer credit obligations would require when investing in Notes issued by LendingClub and Certificates issued by the Trust with cash flows dependent on specific credit grades of Member Loans.

For additional discussion on this topic, including the adjustments to the estimated fair values of Loans at fair value and Notes at fair value, as discussed above, see Note 4 – Member Loans at Fair Value and Notes and Certificates at Fair Value.

Accrued interest receivable on Member Loans is reversed for any loan reaching 120 days of delinquency. Receivables arising in the ordinary course of operations are charged-off when deemed to be uncollectible.

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is provided over the estimated useful life of each class of depreciable assets (generally three to five years), and is computed using the straight-line method.

In accordance with FASB ASC 360, “Property, Plant, and Equipment,” the Company evaluates potential impairments of its long-lived assets, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Events or changes in circumstances that could result in impairment include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for the Company’s overall business and significant negative industry or economic trends. Determination of recoverability of long-lived assets is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the fair value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value. For the three months ended March 31, 2013 and 2012, there was no impairment of long-lived assets.

Software and website development costs are accounted for in accordance with FASB ASC 350, “Intangibles – Goodwill and Other.” The Company capitalizes costs related to internal use software and website application, infrastructure development and content development costs. Costs related to preliminary project activities and post implementation activities were expensed as incurred. Internal-use software is amortized on a straight line basis over its estimated useful life, generally three years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The capitalized costs are included in “Property and equipment” in the consolidated balance sheets. For the three months ended March 31, 2013, the Company capitalized approximately $0.4 million of internal software and website development costs. For the three months ended March 31, 2012, the Company did not capitalize any software and website development costs.

Pursuant to an agreement, we have placed a deposit with a payment service provider that processes investor payment transactions on an ongoing basis and is restricted as to withdrawal throughout the contract term and the amount of the deposit depends on the volume of payment transactions processed. The deposit is required to be returned to us when payment transaction volumes decline and upon termination or expiration of the agreement.

Payables to member investors primarily represent payments-in-process received from member investors that, as of the last day of the period, have not been credited to their accounts on the platform and transferred to the separate bank account that holds investors’ uninvested funds in trust for them.

Advertising costs are expensed as incurred. Advertising expenses are included in sales, marketing and customer service operating expenses.

Revenues primarily result from fees earned and net interest income. Fees include loan origination fees (paid by borrower members), servicing fees (paid by investor members and third party Member Loan purchasers) and management fees (paid by certain Certificate holders).

The loan origination fee charged to each borrower member is determined by the term and credit grade of that borrower’s Member Loan and, as of March 31, 2013 and March 31, 2012, ranged from 1.11% to 5.00% of the aggregate Member Loan amount. The Member Loan origination fees are included in the annual percentage rate calculation provided to the borrower member and is

subtracted from the gross loan proceeds prior to disbursement of the loan funds to the borrower member. A Member Loan is considered issued when we record the transfer of funds to the borrower member’s account on our platform, following which we initiate an ACH transaction to transfer funds from our platform’s correspondent bank account to the borrower member’s bank account.

The recognition of fee revenue and interest income is determined by the accounting method applied to each Member Loan, which include:

The recognition of fee revenue and interest income for Member Loans under the two accounting methods is described below.

Because of the election to account for Member Loans at fair value, origination fees on Member Loans at fair value are recognized upon origination of the loan and included as a component of non-interest revenue (see Note 11 – Non Interest Revenue). Direct costs to originate Member Loans at fair value are recognized as operating expenses as incurred.

We record interest income on Member Loans at fair value as earned. Loans reaching 120 days delinquent are classified as nonaccrual loans, and we stop accruing interest and reverse all accrued but unpaid interest as of such date.

Loans issued that are subsequently sold to third party purchasers, and which meet the accounting requirements for a sale of loans are classified as “held for sale”. The related origination fees and direct loan origination costs for loans classified as “held for sale” are deferred and included in the “overall net investment in the loans” originated. Accordingly, the origination fees for such loans are not included in origination fee revenue and the direct loan origination costs for such loans are not included in operating expenses. A sale of loans to third party investors requires sale terms whereby the Company does not retain certain financial interests in, or obligations related to, the loans that require the transaction to be accounted for as a borrowing by the Company.

Loans are sold by the Company after the loan is issued by WebBank and then purchased by us. A gain or loss on the sale of loans with servicing retained is recorded on the sale date. In order to calculate the gain or loss on the sale of the loans with servicing retained, the Company first determines whether the terms of the servicing arrangement with the investor result in a net servicing asset (i.e., when contractual/expected servicing revenues adequately compensate the Company) or a net servicing liability (i.e., when contractual/expected servicing revenues do not adequately compensate the Company). When contractual/expected servicing revenues do not adequately compensate the Company, a portion of the gross proceeds of the loans sold with servicing retained are allocated to the recording of a net servicing liability. The gain or loss on the sale of loans sold with servicing retained equals the net remaining proceeds from the sale of loans, after allocation of proceeds toward the recording of any net servicing liability, minus the net investment in the loans being sold.

Additionally, the Company will record a liability for significant estimated post-sale obligations or contingent obligations to the purchaser of the loans, if any, such as delinquent/fraudulent loan repurchase obligations or excess loss indemnification obligations.

At each period-end, the Company estimates the current fair value of the loan servicing asset or loan servicing liability considering the contractual servicing fee revenue, adequate compensation for the Company’s servicing obligations, current principal balances of the loans and projected defaults and prepayments over the remaining lives of the loans.

The remaining principal balance of loans sold to and serviced for third party investors was $49.7 million at March 31, 2013. We recorded $7,000 of servicing revenue for loans sold to third party investors for the three months ended March 31, 2013. We recognized a $1.2 million gain on the sales of these loans for the three months ended March 31, 2013. Deferred servicing revenue as of March 31, 2013 was $0.2 million. No loans were sold to third parties during the three months ended March 31, 2012.

We record the servicing fees paid by Note holders, which are based on the payments serviced on the related Member Loans at fair value, as a component of non-interest revenue when received.

For loans sold to third party purchasers, the Company estimates the current fair value of the loan servicing asset or loan servicing liability considering the contractual servicing fee revenue, adequate compensation for the Company’s servicing obligations, the current principal balances of the loans and projected defaults and prepayments over the remaining lives of the loans.

LCA acts as the general partner for certain private funds (the “Funds”) in which it has made no capital contributions and does not receive any allocation of the Funds’ income, expenses, gains, losses nor any carried interest. Each Fund invests in a Certificate issued by the Trust pursuant to a set investment strategy. LCA charges limited partners in the Funds a monthly management fee, payable monthly in arrears, based on a limited partner’s capital account. These management fees can be modified or waived at the discretion of LCA.

LCA also earns management fees paid by separately managed account (“SMA”) investors, paid monthly in arrears, based on the month-end balances in the SMA accounts. These management fees are classified as a component of non-interest revenue in the consolidated statements of operations and are recorded as earned.

Fair Valuation Adjustments of Member Loans at Fair Value and Notes and Certificates at Fair Value

We include in earnings the estimated unrealized fair value gains or losses during the period of Member Loans at fair value, and the offsetting estimated unrealized fair value losses or gains on related Notes and Certificates at fair value. As discussed earlier in this Note 2, at March 31, 2013, we estimated the fair values of Member Loans at fair value and related Notes and Certificates using a discounted cash flow valuation methodology. At each reporting period, we recognize fair valuation adjustments for the Member Loans at fair value and for the Notes and Certificates. The fair valuation adjustment for a given principal amount of a Member Loan at fair value will be approximately equal to the corresponding estimated fair valuation adjustment on the combined principal amounts of related Notes and Certificates because the same net cash flows of the Member Loan and the related Notes and/or Certificates are used in the discounted cash flow valuation methodology.

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, Member Loans financed directly by LendingClub and the related accrued interest receivable, and deposits with service providers. We hold our cash and cash equivalents and restricted cash in accounts at quality regulated domestic financial institutions. We are exposed to credit risk in the event of default by these institutions to the extent the amount recorded on the balance sheet exceeds the FDIC insured amounts. As of March 31, 2013, the Company has net credit risk exposure on $0.5 million fair value of Member Loans held that were financed with sources of funds other than Notes or Certificates.

We obtain third-party credit reports and perform other evaluations of our borrower members’ financial condition, as needed, and do not allow borrower members to have more than two Member Loans outstanding at any one time. All of our loans are unsecured but we maintain a fair value allowance for Member Loans. Additionally, the potential gross credit risk to the Company from Member Loans is significantly mitigated to the extent that loans are financed by Notes or Certificates which absorb the loans’ credit losses pursuant to the member payment dependency provision.

The deposit placed with the payment service provider is short-term and generally may be applied toward amounts due to the provider as services are rendered. The deposit is ongoing throughout the contract term and is required to be returned to us when payment transaction volumes decline and upon termination or expiration of the agreement. The payments services agreement is cancelable by us at any time.

All share-based awards made to employees, including grants of employee stock options, restricted stock and employee stock purchase rights, are recognized in the consolidated financial statements based on their respective grant date fair values. Any benefits of tax deductions in excess of recognized compensation cost are reported as a financing cash inflow and cash outflow from operating activities.

The fair value of share-option awards is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model considers, among other factors, the expected term of the option award, expected volatility of our stock price and expected future dividends, if any.

Forfeitures of awards are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock-based compensation expense is recorded net of estimated forfeitures, such that expense is recorded only for those stock-based awards that are expected to vest.

Share-based awards issued to non-employees are accounted for in accordance with provisions of ASC 718-505-50, Equity-Based Payments to Non-Employees, which requires that equity awards be recorded at their fair value. We use the Black-Scholes model to estimate the value of options granted to non-employees at each vesting date to determine the appropriate charge to stock-based compensation. The assumed volatility of the price of our common stock was based on comparative public-company stock price volatility.

Certain prior period amounts have been reclassified to conform to the current presentation for accrued interest receivable, prepaid and other assets, accrued interest payable, and accrued expenses and other liabilities. These reclassifications had no impact on previously reported results of consolidated operations or consolidated stockholders’ equity.

The Company does not expect the adoption of recently issued accounting pronouncements to have any impact on the Company’s results of operations, financial position, or cash flow.

Basic net income (loss) per share attributable to common stockholders is computed by dividing income (loss) per share attributable to common stockholders by the weighted average number of common shares outstanding for the period. We compute income (loss) per share of common stock using the two-class method required for participating securities. We consider all series of our convertible preferred stock to be participating securities due to their non-cumulative dividend rights. In accordance with the two-class method, earnings allocated to these participating securities, which include participation rights in undistributed earnings (see Note 7 – Preferred Stock to the consolidated financial statements for a description), are subtracted from net income to determine total undistributed earnings to be allocated to common stockholders. All participating securities are excluded from basic weighted-average common shares outstanding.

Diluted earnings per share includes the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. Diluted earnings per share attributable to common stockholders, if presented, would be calculated by taking undistributed earnings and reallocating them to reflect the potential impact of dilutive securities. Diluted income (loss) per share is computed by dividing income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for the effects of potentially dilutive common shares, which are comprised of outstanding stock options, warrants, and convertible preferred stock. The effects of outstanding stock options, warrants and convertible preferred stock are excluded from the computation of diluted net income (loss) per common share in periods in which the effect would be antidilutive.

The following table details the computation of the basic and diluted income (loss) per share for the three months ended March 31, 2013 and 2012 (in thousands, except shares and per share data):

At March 31, 2013 and December 31, 2012, we had the following assets and liabilities measured at fair value on a recurring basis (in thousands):

We determined the fair values of Member Loans at fair value and Notes and Certificates at fair value using inputs and methods that are categorized in the fair value hierarchy of ASC 820, as follows (in thousands):

Instruments in the Level 3 valuation hierarchy are based on significance of the unobservable factors to the overall fair value measurement. Our fair value approach for Level 3 instruments primarily uses unobservable inputs, but may also include observable, actively quoted components derived from external sources. As a result, the realized and unrealized gains and losses for assets and liabilities within the Level 3 category presented in the tables below may include changes in fair value that were attributable to both observable and unobservable inputs. The following table presents additional information about Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2013 (in thousands):

At March 31, 2013, the Notes have terms of 36 months or 60 months and are paid monthly with fixed interest rates ranging from 5.42% to 24.89% and various maturity dates through March 2018.

As discussed previously in Note 2 – Summary of Significant Accounting Policies, fair values for Member Loans at fair value and the related Notes and Certificates are determined using a discounted cash flow model utilizing estimates for credit losses, prepayments, changes in the interest rate environment, and other factors. For Notes and Certificates, we also consider risk factors such as the Company’s liquidity position. The majority of fair valuation adjustments included in earnings is attributable to changes in estimated instrument-specific future credit losses. All fair valuation adjustments were related to Level 3 instruments for the three

months ended March 31, 2013. A specific loan that is projected to have higher future default losses than previously estimated lowers the expected future cash flows of the Member Loan over its remaining life, which reduces its estimated fair value. Conversely, a specific loan that is projected to have lower future default losses than previously estimated increases the expected future cash flows of the Member Loan over its remaining life, which increases its fair value. Because the payments to holders of Notes and Certificates directly reflect the payments received on Member Loans at fair value, a reduction or increase of the expected future payments on Member Loans at fair value decreases or increases the estimated fair values of the related Notes and Certificates. Expected losses and actual loan charge-offs on Member Loans at fair value are offset to the extent that the loans are financed by Notes and Certificates that absorb the related loan losses.

Fair value adjustment gains/(losses) for Member Loans at fair value were $(9.2 million) and $(4.8 million) for the three months ended March 31, 2013 and 2012, respectively. The fair value adjustment gains/(losses) for Notes and Certificates were $9.2 million and $4.8 million for the three months ended March 31, 2013 and 2012, respectively. The fair value adjustments for Member Loans at fair value were largely offset by the fair value adjustments of the Notes and Certificates due to the member-payment-dependent design of the Notes and Certificates and because the principal balances of the Member Loans at fair value were very close to the combined principal balances of the Notes and Certificates. Accordingly, the net fair value adjustment gains/(losses) for Member Loans at fair value, and Notes and Certificates was approximately $(31,000) and $(40,000) for the three months ended March 31, 2013 and 2012, respectively.

At March 31, 2013, we had 671 Member Loans at fair value that were 90 days or more past due or where the borrower has filed for bankruptcy or is deceased, which had a total outstanding principal balance of $7.0 million, aggregate adverse fair value adjustments totaling $6.2 million and an aggregate fair value of $0.8 million. At December 31, 2012, we had 576 Member Loans at fair value that were 90 days or more past due or where the borrower has filed for bankruptcy or is deceased, which had a total outstanding principal balance of $6.4 million, aggregate adverse fair value adjustments totaling $5.7 million and an aggregate fair value of $0.7 million.

At March 31, 2013, we had 250 Member Loans at fair value which were on non-accrual status that represented $2.4 million of outstanding principal and $0.3 million of fair value, and Notes and Certificates with $2.4 million of outstanding principal balance and a fair value of $0.3 million. At December 31, 2012, we had 222 Member Loans at fair value representing $2.4 million of outstanding principal and $0.3 million of fair value, and Notes and Certificates with $2.4 million of outstanding principal balance and a fair value of $0.3 million that were on nonaccrual status.

The following table presents quantitative information about the significant unobservable inputs used for certain of our Level 3 fair value measurements at March 31, 2013 (in thousands):

The valuation technique used for our Level 3 assets and liabilities, as presented in the previous table, is described as follows:

Discounted cash flow – Discounted cash flow valuation techniques generally consist of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounting those cash flows at a rate of return that results in the fair value amount.

Significant unobservable inputs presented in the previous table are those we consider significant to the estimated fair values of the Level 3 assets and liabilities. We consider unobservable inputs to be significant, if by their exclusion, the estimated fair value of the Level 3 asset or liability would be impacted by a significant percentage change, or based on qualitative factors such as nature of the instrument and the significance of the unobservable inputs relative to other inputs used within the valuation. Following is a description of the significant unobservable inputs provided in the table.

Discount rate – Discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, the fair value, of a financial instrument. The discount rates for the projected net cash flows of Member Loans are our estimates of the rates of return that investors in unsecured consumer credit obligations would require when investing in the various credit grades of Member Loans. The discount rates for the projected net cash flows of the Notes and Certificates are our estimates of the rates of return that investors in

unsecured consumer credit obligations would require when investing in Notes issued by LendingClub and Certificates issued by the Trust with cash flows dependent on specific grades of Member Loans. Discount rates for existing Member Loans, Notes and Certificates are adjusted to reflect the time value of money. A risk premium component is implicitly included in the discount rates to reflect the amount of compensation market participants require due to the uncertainty inherent in the instruments’ cash flows resulting from risks such as credit and liquidity.

Net cumulative expected loss – Net cumulative expected loss is an estimate of the net cumulative principal payments that will not be repaid over the entire life of a new Member Loan, Note or Certificate, expressed as a percentage of the original principal amount of the Member Loan, Note or Certificate. The estimated net cumulative loss is the sum of the net losses estimated to occur each month of the life of a new Member Loan, Note or Certificate. Therefore, the total net losses estimated to occur though the remaining maturity of existing Member Loans, Notes and Certificates are less than the estimated net cumulative losses of comparable new Member Loans, Notes and Certificates. A given month’s estimated net losses are a function of two variables:

Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity

We use a discounted cash flow technique to determine the fair value of our Level 3 Member Loans, Notes and Certificates at fair value. Use of this technique requires determination of relevant inputs and assumptions, some of which represent significant unobservable inputs as indicated in the preceding table. Accordingly, changes in these unobservable inputs may have a significant impact on fair value. Certain of these unobservable inputs will (in isolation) have a directionally consistent impact on the fair value of the instrument for a given change in that input. Alternatively, the fair value of the instrument may move in an opposite direction for a given change in another input. For example, increases in the discount rate and estimated net cumulative loss rates will reduce the estimated fair value of Member Loans, Notes and Certificates. When multiple inputs are used within the valuation technique of a Loan, Note or Certificate at fair value, a change in one input in a certain direction may be offset by an opposite change in another input.

We had deposits of $1.1 and $0.7 million as of March 31, 2013 and December 31, 2012, respectively. Of the $1.1 million, $0.9 million was a deposit with a payment service provider. This deposit is used for transactions related to our platform and is required pursuant to the agreement with the payment services provider, serves as collateral for the protection of the payment services provider and our members, and is restricted as to withdrawal. The deposit is ongoing throughout the term of the contract and the amount of the deposit depends on the volume of payment transactions processed. The deposit is required to be returned to us when payment transaction volumes decline and upon termination or expiration of the agreement.

Our executive officers, directors (including immediate family members) and certain affiliates, have opened investor member accounts with LendingClub and have made deposits and withdrawals to their accounts, and funded portions of borrowers’ loan requests from time to time in the past via purchases of Notes and Certificates, and may do so in the future.

For the three months ended March 31, 2013 and 2012 these related parties made LendingClub Platform deposits, Platform withdrawals, and invested in Notes and Certificates, as follows (in thousands):

As of March 31, 2013 and December 31, 2012, these related parties had outstanding principal invested balances as follows (in thousands):

The outstanding shares of convertible preferred stock are not mandatorily redeemable. The sale of all, or substantially all, of the Company’s assets, a consolidation or merger with another company, or a transfer of voting control in excess of fifty percent (50%) of the Company’s voting power are all events which are deemed to be a liquidation and would trigger the payment of liquidation preferences under the preferred stock agreements. All such events require approval of the Board. Therefore, based on the guidance of SEC Accounting Series Release No. 268, “Presentation in Financial Statements of Redeemable Preferred Stocks,” the contingently redeemable convertible preferred stock has been classified outside of the stockholders’ equity section as certain of these factors are outside the control of the Company. The significant terms of outstanding Series A, Series B, Series C, Series D and Series E convertible preferred stock are as follows:

Conversion – Each share of convertible preferred stock is convertible, at the option of the holder, initially, into one share of common stock (subject to adjustments for events of dilution). Each share of convertible preferred stock will automatically be converted upon the earlier of: (i) the closing of an underwritten public offering of our common stock with aggregate gross proceeds that are at least $30.0 million; or (ii) the consent of the holders of a 55% majority of outstanding shares of convertible preferred stock, voting together as a single class, on an as-converted to common stock basis. The Company’s preferred stock agreements contain certain anti-dilution provisions, whereby if the Company issues additional shares of capital stock for an effective price lower than the conversion price for a series of preferred stock immediately prior to such issue, then the existing conversion price of such series of preferred stock will be reduced. The Company determined that while its convertible preferred stock contains certain anti-dilution features, the conversion feature embedded within its convertible preferred stock does not require bifurcation under the guidance of FASB ASC 815, Derivatives and Hedging Activities.

Liquidation preference – Upon any liquidation, winding up or dissolution of us, whether voluntary or involuntary (a “Liquidation Event”), before any distribution or payment shall be made to the holders of any common stock, the holders of convertible preferred stock shall, on a pari passu basis, be entitled to receive by reason of their ownership of such stock, an amount per share of Series A convertible preferred stock equal to $1.065 (as adjusted for stock splits, recapitalizations and the like) plus all declared and unpaid dividends (the “Series A Preferred Liquidation Preference”), an amount per share of Series B convertible preferred stock equal

to $0.7483 (as adjusted for stock splits, recapitalizations and the like) plus all declared and unpaid dividends (the “Series B Preferred Liquidation Preference”), an amount per share of Series C convertible preferred stock equal to $1.5677 (as adjusted for stock splits, recapitalizations and the like), an amount per share of Series D convertible preferred stock equal to $3.557 and an amount per share of Series E convertible preferred stock equal to $7.00 (as adjusted for stock splits, recapitalizations and the like). However, if upon any such Liquidation Event, our assets shall be insufficient to make payment in full to all holders of convertible preferred stock of their respective liquidation preferences, then the entire assets of ours legally available for distribution shall be distributed with equal priority between the preferred holders based upon the amounts such series was to receive. Any excess assets, after payment in full of the liquidation preferences to the convertible preferred stockholders, are then allocated to the holders of common and preferred stockholders, pro-rata, on an as-if-converted to common stock basis.

Dividends – If and when declared by the Board, the holders of Series A, Series B, Series C, Series D and Series E convertible preferred stock, on a pari passu basis, will be entitled to receive non-cumulative dividends at a rate of 6% per annum in preference to any dividends on common stock (subject to adjustment for certain events). The holders of Series A, Series B, Series C, Series D and Series E convertible preferred stock are also entitled to receive with common stockholders, on an as-if-converted basis, any additional dividends issued by us.

Voting rights – Generally, preferred stockholders have one vote for each share of common stock that would be issuable upon conversion of preferred stock. Voting as a separate class, and on an as-if-converted to common stock basis, the Series A convertible preferred stockholders are entitled to elect two members of the Board, the holders of Series B convertible preferred stockholders are entitled to elect one member of the Board. The Series C and Series D convertible preferred stockholders are not entitled to elect a member of the Board. The Series E convertible preferred stockholders are entitled to nominate members to the Board, this nominee is subject to the vote of all convertible preferred stockholders. The holders of common stock, voting as a separate class, are entitled to elect one member of the Board. The remaining directors are elected by the preferred stockholders and common stockholders voting together as a single class on an as-if-converted to common stock basis.

At March 31, 2013, we have shares of common stock authorized and reserved for future issuance as follows:

During the three months ended March 31, 2013, we issued 1,208,744 shares of common stock in exchange for proceeds of $0.5 million upon the exercise of employee stock options.

Convertible preferred Series A stock warrants are fully exercisable with an exercise price of $1.065 per share. The warrants may be exercised at any time on or before January 2018.

Common stock warrants are fully exercisable with exercise prices of $0.01 and $1.5677 per share. The warrants may be exercised at any time on or before February 2021.

We have incurred operating losses since our inception through December 31, 2012. For the three months ended March 31, 2013, we had net income of approximately $40,000 and a net loss of $2.6 million for the three months ended March 31, 2012. We have an accumulated deficit of $57.6 million and a stockholders’ deficit of $49.8 million, at March 31, 2013.

Under our 2007 Stock Incentive Plan, or the Option Plan, we may grant options to purchase shares of common stock to employees, executives, directors and consultants at exercise prices not less than the fair market value at date of grant for incentive stock options and not less than 85% of the fair market value at the date of grant for non-statutory options. An aggregate of 14,059,948 shares have been authorized for issuance under the Option Plan. The options granted through March 31, 2013 are stock options that

generally expire ten years from the date of grant and generally vest 25% twelve months from the date of grant, and ratably over the next 12 quarters thereafter, provided the grantee remains continuously employed by the Company through each vesting date (“service-based options”).

For the three months ended March 31, 2013, we granted stock options to purchase 378,000 shares of common stock with a weighted average exercise price of $2.78 per share, a weighted average grant date fair value of $1.63 per share and a total estimated fair value of approximately $0.6 million.

We used the Black-Scholes option pricing model to estimate the fair value of stock options granted with the following assumptions:

Options activity under the Option Plan for the three month period ended March 31, 2013 is summarized as follows:

A summary of outstanding options, options vested and options vested and expected to vest as of March 31, 2013, is as follows:

A summary by weighted average exercise price of outstanding options, options vested, and options expected to vest at March 31, 2013, is as follows:

The aggregate intrinsic value of the options outstanding, vested options and options expected to vest was $12.9 million at March 31, 2013.

The Company recognized $0.5 million and $0.3 of stock based compensation expense related to stock options for the three months ended March 31, 2013 and 2012, respectively. As of March 31, 2013, total unrecognized compensation cost was $5.5 million and these costs are expected to be recognized over the next 3.2 years.

No net income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options.

The Company accounts for income taxes using the asset and liability method as codified in Topic 740 (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized. A full valuation allowance has been recorded against net deferred tax assets of $23.9 million at March 31, 2013 and December 31, 2012, respectively.

The Company recorded no net provision for income taxes in any of the three month periods ended March 31, 2013 or 2012 due to the full valuation allowance for deferred tax assets recorded in all of the periods then ended. Payments of minimum amounts due to state taxing authorities upon the filing of state tax returns are recorded as operating expenses instead of income tax expense.

Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We did not have any material changes in unrecognized tax benefits and there were no interest expense or penalties on any unrecognized tax benefits during the three months ended March 31, 2013 and 2012.

In general, a corporation’s ability to utilize its net operating loss (NOL) and research and development (R&D) credit carryforwards may be substantially limited due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the capital (as defined) of a company by certain stockholders or public groups.

The amount of such limitations on the Company’s total federal net operating losses of approximately $53.0 million incurred since the Company’s inception in October 2006 through the fiscal year-ended December 31, 2012 has been analyzed, and the Company believes limitations exist only on the future annual deductibility of approximately $2.5 million of the Company’s total net operating loss carryforwards. Additionally, the Company had certain capital transactions during the three months ended March 31, 2013, that trigger a testing date and the Company has completed a preliminary study to assess whether one or more ownership changes have occurred since December 31, 2012. The Company believes it has not experienced an ownership change of more than 50 percent as a result of the capital transactions in the three months ended March 31, 2013. Therefore, utilization of certain NOL or tax credit carryforwards are believed not to be subject to additional annual limitations beyond the limitation discussed above.

The annual limitations on a Company’s NOL or tax credit carryforwards is determined by first multiplying the value of the Company’s capital at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. In the most adverse case, such limitation may result in the expiration of a portion of the NOL or tax credit carryforwards before utilization. Any carryforwards that expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance. Due to the Company’s full valuation allowance for deferred tax assets, it is not expected that any possible limitation on the future deductibility of NOL or tax credit carryforwards will have an impact on the results of operations of the Company. As of March 31, 2013, we continued to have a full valuation allowance against our net deferred tax assets. Although there was operating income for the three months ended March 31, 2013, and we have expectations for business growth, uncertainty regarding profitability in the coming years, and the impact of that uncertainty on the future realization of the net operating loss carryforwards remain, therefore, we believe it is more likely than not that all of our deferred tax assets will not be realized.

Non-interest revenue consists of loan origination fees collected upon origination of Member Loans at fair value, servicing fees collected as payments are made to investors in Notes, management fees earned from investors in Certificates and other revenue.

The following table summarizes the components of non-interest revenue for the three months ended March 31, 2013, and 2012 (in thousands):

12. Fair Value of Financial Instruments Not Measured at Fair Value on a Recurring Basis in the Balance Sheet

Following are descriptions of the valuation methodologies used for estimating the fair values of financial instruments not recorded at fair value on a recurring basis in the balance sheet; these financial instruments are carried at historical cost or amortized cost in the balance sheets.

Short-Term Financial Assets: Short-term financial assets include cash and cash equivalents, restricted cash, accrued interest and other receivables and deposits with service providers. These assets are carried at historical cost. The carrying amount approximates fair value due to the short term nature of the instruments.

Short-Term Financial Liabilities: Short-term financial liabilities include accrued interest payable and other accrued expenses, and payables to member investors. These liabilities are carried at historical cost. The carrying amount approximates fair value due to the short term nature of the instruments.

In July 2012, we entered into a lease agreement for additional space in our corporate headquarters. The lease commenced on September 15, 2012 and expires in June 2015. The Company has a renewal option on the lease that extends the lease two years to June 2017. The average monthly rent expense for the additional space in our corporate headquarters is approximately $0.1 million and we pledged $0.1 million as a security deposit.

In April 2011, we entered into a lease agreement for a space in San Francisco, CA for our corporate headquarters, which includes our principal administrative, marketing, technical support and technology functions. The lease began on May 1, 2011 and expires in June 2017. We can terminate the lease upon nine months’ notice prior to the third anniversary of the lease. The average monthly rent expense for this space in our corporate headquarters is approximately $40,000 and we pledged $0.2 million as a security deposit.

Since July 2010, we entered into several month-to-month or short-term lease agreements for the lease of office space, ranging from 250 to 400 square feet, in New York City. In December 2012, we renewed a lease for a New York City office for a one year term that expires on January 31, 2014. The average monthly rent for this space is approximately $3,000.

Facilities rental expense for the three months ended March 31, 2013 and 2012 was $0.4 million and $0.1 million, respectively.

In regards to loans listed on the platform as a result of direct marketing efforts, we have committed to invest in such loans in order for these loans to have investment commitments equal to the lesser of the amount approved and $10,000 at the time of issuance. Based upon our platform’s performance to date we have not had to commit any material capital amounts to these loans and as such we have not recorded a contingent obligation on our balance sheet as of March 31, 2013 or December 31, 2012.

The Company is subject to a Credit Support Agreement with a Certificate investor. The Credit Support Agreement requires the Company to pledge and restrict cash in support of its contingent obligation to reimburse the investor for credit losses on Member Loans underlying the investor’s Certificate, that are in excess of a specified, aggregate loss threshold. The Company is contingently obligated to pledge cash, not to exceed $3.0 million, to support this contingent obligation and which cash balance is premised upon the investor’s Certificate purchase volume. As of March 31, 2013, approximately $2.9 million was pledged and restricted to support this contingent obligation.

As of March 31, 2013, the credit losses pertaining to the investor’s Certificate have not exceeded the specified threshold, nor are future credit losses expected to exceed the specified threshold, and thus no expense or liability has been recorded. The Company currently does not anticipate recording losses resulting from its contingent obligation under this Credit Support Agreement. If losses related to the Credit Support Agreement are later determined to be likely to occur and are estimable, results of operations could be affected in the period in which such losses are recorded.

The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. After consultation with legal counsel, the Company does not anticipate that the ultimate liability, if any, arising out of any such matter will have a material effect on its financial condition or results of operations.

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Report. In addition to historical information, this Report contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in Part II Item 1A, “Risk Factors.” Actual results could differ materially. Important factors that could cause actual results to differ materially include, but are not limited to; the level of demand for our products and services; the intensity of competition; our ability to effectively expand and improve internal infrastructure; maintenance of positive cash flows from operations, and adverse financial, customer and employee consequences that might result to us if litigation were to be initiated and resolved in an adverse manner to us. Readers are cautioned not to place undue reliance on the forward-looking statements, including statements regarding our expectations, beliefs, intentions or strategies regarding the future, which speak only as of the date of this Report. We assume no obligation to update these forward-looking statements.

We are an online marketplace that facilitates loans to qualified borrowers and investments from qualified investors. We were incorporated in Delaware in October 2006, and in May 2007, we began operations. We expanded our operations in August 2007 with the launch of our public website, www.lendingclub.com. Pursuant to a prospectus that describes a public offering of Member Payment Dependent Notes (“Notes”), self-directed investors have the opportunity to purchase, directly on our website, Notes issued by us, with each series of Notes corresponding to an individual Member Loan facilitated through our platform. The Notes are unsecured, are dependent for payment on the related Member Loan and offer interest rates and credit characteristics that the investors find attractive.

In addition to the public offering, we offer private placements to accredited investors and qualified purchasers. These private placements are managed by the Company’s wholly-owned subsidiary, LC Advisors, LLC (“LCA”), a registered investment adviser that acts as the general partner for certain private funds (the “Funds”) and separately managed accounts (“SMAs”). The Company established LC Trust I (“Trust”), a Delaware business trust in February 2011 to acquire and hold Member Loans for the sole benefit of investors that purchase through Trust Certificates (“Certificates”) issued by the Trust and which are related to the underlying Member Loans. The Funds each purchase a Certificate from the Trust and the Trust uses these proceeds to acquire and hold Member Loans for the sole benefit of the Certificate holder. The Certificates can only be settled with cash flows from the underlying Member Loans and Certificate holder does not have recourse to the general credit or other assets of the Trust, Company, borrower members or other investors.

We aim to use technology and a more efficient funding process to lower costs so we may provide borrower members with rates that are generally lower, on average, than the rates they obtain from unsecured credit provided through credit cards or traditional banks, and offer interest rates to investors that they find attractive. Our customer acquisition process, registration, underwriting, processing and payment systems are highly automated and electronic. We encourage the use of electronic payments as the preferred means to disburse member loan proceeds, receive payments on outstanding Member Loans, receive funds from investor members, and to disburse payments to applicable investors. We have no physical branches for loan application or payment-taking activities.

All Member Loans are unsecured obligations of individual borrower members with fixed interest rates, three-year or five-year maturities, minimum amounts of $1,000 and maximum amounts up to $35,000. The Member Loans are posted on our website pursuant to a program agreement with WebBank, an FDIC-insured, state-chartered industrial bank organized under the laws of the state of Utah, approved loans are funded and issued by WebBank and sold to us after closing. As a part of operating our platform, we verify the identity of members, obtain borrower members’ credit characteristics from consumer reporting agencies such as TransUnion, Experian or Equifax and screen borrower members for eligibility to participate in the platform and facilitate the posting of Member Loans. Also, after acquiring the Member Loans from WebBank, we service the Member Loans on an ongoing basis.

As of March 31, 2013, the platform facilitated 118,608 Member Loans totaling approximately $1.5 billion since the platform’s inception. Our agreement with WebBank enables us to make our platform available to borrower members on a uniform basis nationwide, except that as of March 31, 2013, we do not currently offer Member Loans in Idaho, Indiana, Iowa, Maine, Mississippi, Nebraska and North Dakota. We pay WebBank a monthly service fee based on the amount of loans issued by WebBank in each month, subject to a minimum monthly fee.

To date, we have funded our operations primarily with proceeds from our debt financing, preferred stock issuances and common stock issuances and now with the operations of the Company, which are described under “Liquidity and Capital Resources” in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. From inception of the Company through March 31, 2013, we have raised approximately $102.5 million (net) through preferred equity financings.

We have incurred net losses since our inception through December 31, 2012. Our net income was $40,000 for the three months ended March 31, 2013. For the three months ended March 31, 2013, we were cash-flow positive on an operating basis. We expect that will continue operating at or near breakeven during the remainder of 2013. If our assumptions regarding continued growth and operating plan are incorrect, we may need to slow our investment spending, which could slow our rate of growth or ability to continue operating on a cash-flow positive basis, and our current liquidity resources may be consumed.

We earn revenues from fees, primarily loan fees charged to borrower members, investor servicing fees and management fees charged by LCA. We expect that the number of borrower and investor members and the volume of Member Loans facilitated through our platform will continue to increase, and that we will generate increased revenue from these fees.

The preparation of our consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions, and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We believe that the judgments, assumptions and estimates upon which we rely are reasonable based upon information available to us at the time that these judgments, assumptions and estimates are made. However, any differences between these judgments, assumptions and estimates and actual results could have a material impact on our statement of operations and financial condition. The accounting policies which are more fully described in Note 2 to our consolidated financial statements reflect our most significant judgments, assumptions and estimates and which we believe are critical in understanding and evaluating our reported financial results include: (1) revenue recognition; (2) fair value determination; (3) share-based compensation; and (4) provision for income taxes, net of valuation allowances for deferred tax assets. These estimates and assumptions are inherently subjective in nature, actual results may differ from these estimates and assumptions, and the differences could be material.

We have elected fair value accounting for the vast majority of Member Loans facilitated through the platform since October 13, 2008, including all Member Loans originated since October 1, 2011, and all related Notes and Certificates. The fair value election for these Member Loans, Notes and Certificates allows symmetrical accounting for the timing and amounts recognized for both expected unrealized losses and realized losses on the Member Loans and the related Notes and Certificates, consistent with the member payment dependent design of the Notes and Certificates. All of our Member Loans are unsecured but the gross potential credit risk to the Company from Member Loans is significantly mitigated to the extent that loans are financed by Notes or Certificates that absorb the loans’ credit losses pursuant to the member payment dependency provision.

Absent the fair value elections for both Member Loans and the related Notes and Certificates, Member Loans held for investment would be accounted for at amortized cost and would record loan loss provisions for estimated expected losses, but the related Notes and Certificates also accounted for at amortized cost would recognize the losses passed-through by the related loans only when and in amounts of the loans actually charged-off, thereby resulting in a mismatch in the timing and amounts of loss recognition between a Member Loan and related Notes and Certificates, which is not an appropriate representation for instruments that are designed to have linked cash flows and loss realization. The loan origination fees for Member Loans at fair value are recognized as a component of non-interest revenue at the time of the loan origination. The costs to originate Member Loans at fair value are recognized in operating expenses as incurred. Interest income on Member Loans at fair value is recorded as earned.

When we receive payments of principal and interest on Member Loans, we remit principal and interest payments on related Notes and/or Certificates, net of any applicable servicing fee on the payments received on the Member Loans at fair value. The principal payments reduce the carrying values of both the Member Loans at fair value and the related Notes and Certificates. Servicing fees withheld from payments made to Note investors are recorded as a component of non-interest revenue when received. Management fees from Certificate investors are recognized as a component of non-interest revenue when earned.

We include in earnings the estimated unrealized fair value gains or losses during the period of Member Loans at fair value, and the offsetting estimated fair value losses or gains attributable to the expected changes in future payments on Notes and Certificates.

At March 31, 2013, we estimated the fair values of Member Loans at fair value and their related Notes and Certificates using a discounted cash flow valuation methodology. The estimated fair values of Member Loans are computed by projecting the future contractual cash flows to be received on the loans, adjusting those cash flows for our expectations of prepayments (if significant), defaults and losses over the life of the loans, and expected net recoveries, if any. We then discount those projected net cash flows to a

present value, which is the estimated fair value. Our expectation of future defaults and losses on loans is based on analyses of actual defaults and losses that occurred on the various credit grades of Member Loans over the past several years. The expected net recovery reflects the actual historical recovery experience for the various types of defaulted loans and the contractual arrangements with collection agencies. The discount rates for the projected net cash flows of the Member Loans are our estimates of the rates of return that investors in unsecured consumer credit obligations would require when investing in the various credit grades of Member Loans.

Our obligation to pay principal and interest on any Note and Certificate is equal to the pro-rata portion of the payments, if any, received on the related Member Loan at fair value, net of any applicable servicing fee. The gross effective interest rate associated with a Note or a Certificate is the same as the interest rate earned on the related Member Loan at fair value. At March 31, 2013, the discounted cash flow methodology used to estimate the Notes’ and Certificates’ fair values uses the same projected net cash flows as their related Member Loans. The discount rates for the projected net cash flows of the Notes and Certificates are our estimates of the rates of return, including any applicable risk premiums, if significant, that investors in unsecured consumer credit obligations would require when investing in Notes issued by LendingClub or Certificates issued by the Trust, with cash flows dependent on specific credit grades of Member Loans.

For additional discussion on this topic, including the adjustments to the estimated fair values of Loans at fair value and Notes at fair value as of March 31, 2013, as discussed above, see Results of Operations and Note 4 – Member Loans at Fair Value and Notes and Certificates at Fair Value.

Our business model consists primarily of charging fees to both borrower members and investor members for transactions through or related to our platform. During the three months ended March 31, 2013 and 2012, we facilitated $352.9 million and $109.6 million of loans, respectively, on our platform.

Upon issuance of a loan, WebBank pays a fee to us for providing the service of arranging the Member Loan. The loan origination fee charged to each borrower member is determined by the term and credit grade of that borrower member’s loan and as of March 31, 2013 and 2012 ranged from 1.11% to 5.00% of the aggregate Member Loan amount. The loan origination fees are included in the annual percentage rate calculation provided to the borrower member and is subtracted from the gross loan proceeds prior to disbursement of the loan funds to the borrower member.

Investor members that purchase Notes pay servicing fees to us on the payments for the related Member Loans and maintaining account portfolios. We charge other investors that invest through the Trust a monthly management fee that is based on their account balances. These management fees, which are charged in lieu of servicing fees on the payments for principal, interest and late fees and are recorded in other revenue.

The following table summarizes the components of non-interest revenue for the three months ended March 31, 2013 and 2012 (in thousands):

Our borrower members pay a one-time origination fee upon issuance of a Member Loan. This fee is determined by the term and loan grade of the Member Loan.

From September 8, 2011 to February 1, 2012, our origination fees for three year loans are as set forth below:

Beginning February 2, 2012, our loan origination fees for the three year loans are as set forth below:

Beginning January 7, 2011, our origination fees for five year loans are as set forth below:

Loan fees received on Member Loans at fair value are recognized as a component of non-interest revenues at the time of loan origination and were $13.6 million and $4.6 million for the three months ended March 31, 2013 and 2012, respectively, an increase of 196%. The increase in these loan fees was primarily due to an increase in origination volumes of Member Loans at fair value during the three months ended March 31, 2013, to $312.8 million (excluding $40.1 million of loans sold to third party investors) versus originations of $109.6 million for the three months ended March 31, 2012, an increase of 185%. The average loan origination fees were 4.3% and 4.2% of the principal amount of Member Loans at fair value originated for the three months ended March 31, 2013 and 2012, respectively. The increase in the average loan origination fee in the current period was primarily due to changes in the mix of Member Loans between three and five year loans and also between the various loan grades from the prior year period.

We charge investor members an ongoing service fee for Notes. The servicing fee offsets the costs we incur in servicing the related Member Loans at fair value, including managing payments from borrower members, payments to the investor members and maintaining investors’ account portfolios. This service fee is charged based on payment amounts serviced by us on behalf of a Note investor in respect of a Member Loan.

The servicing fees earned from Note holders that relate to cash flows serviced on related Member Loans at fair value were $0.7 million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively, an increase of 75%. The increase in the servicing fees earned from Note holders were primarily due to increased balances of Notes outstanding during the three months ended March 31, 2013, versus the three months ended March 31, 2012.

The remaining principal balance of loans sold to and serviced for third party investors was $49.7 million at March 31, 2013. We recorded $7,000 of servicing revenue for loans sold to third party investors for the three months ended March 31, 2013. Deferred servicing revenue as of March 31, 2013 was $0.2 million. No loans were sold to third parties during the three months ended March 31, 2012.

LCA charges Certificate holders a management fee based on their capital account balances in lieu of paying a servicing fee. LCA earned management fees from investors in Certificates totaling $0.5 million and $0.1 million for the three months ended March 31, 2013 and 2012, respectively. The increase in management fees earned during the three months ended March 31, 2013 versus the prior fiscal year was due primarily to an increase in total assets under management, which were $445.3 million at March 31, 2013 ($378.6 million in five investment funds and $66.7 million in certain SMAs) and $99.0 million at March 31, 2012.

The following table summarizes interest income, interest expense and net interest income for the three months ended March 31, 2013 and 2012, as follows (in thousands):

We had net interest income of $39,000 and $0.1 million for the three months ended March 31, 2013 and 2012, respectively. Net interest income decreased in the three months ended March 31, 2013, when compared to the same period in the prior year primarily due to the reduction in loans funded by us and recorded as Member Loans at amortized cost which was zero at March 31, 2013 and December 31, 2012.

We record interest income from Member Loans. For the three months ended March 31, 2013 and 2012, we recorded interest income from Member Loans at fair value, excluding loan origination fees, of $32.4 million and $12.7 million, respectively. The increase in interest income in the three months ended March 31, 2013, compared to the comparable period in the prior year is primarily due to the significant increase in the outstanding balances of Member Loans at fair value. The average balance of Member Loans at fair value outstanding during the three months ended March 31, 2013, was $888.6 million as compared to an estimated average balance of $326.9 million during the three months ended March 31, 2012, an increase of 172%.

Interest income from cash and cash equivalents is recognized as it is earned. For the three months ended March 31, 2013 and 2012, we recognized $6,000 and $9,000 of interest income earned on cash and cash equivalents, respectively.

We record interest expense on Notes and Certificates. We recorded interest expense for Notes and Certificates of $32.3 million and $12.5 million, respectively, for the three months ended March 31, 2013 and 2012, respectively. The increase in interest expense in the three months ended March 31, 2013, compared to the comparable period in the prior year was primarily due to the significant increase in the outstanding balances of Notes and Certificates. The estimated average balance of Notes and Certificates outstanding during the three months ended March 31, 2013, was $892.7 million as compared to an estimated average balance of $325.8 million in the prior year, an increase of 174%.

We recorded interest expense for loans payable of zero and $31,000 respectively, for the three months ended March 31, 2013 and 2012, respectively. The decrease was due to the remaining loans payable balance being paid in full in July 2012.

Fair Value Adjustments on Member Loans at Fair Value and Notes and Certificates at Fair Value

At March 31, 2013, we estimated the fair values of Member Loans and their related Notes and Certificates using a discounted cash flow valuation methodology. The fair valuation methodology considers projected prepayments, if significant, and uses the historical actual defaults, losses and recoveries on our loans over the past several years to project future losses and net cash flows on loans.

Fair value adjustment gains/(losses) for Member Loans at fair value were $(9.2 million) and $(4.8 million) for the three months ended March 31, 2013 and 2012, respectively. Fair value adjustment gains/(losses) for Notes and Certificates were $9.2 million and $4.8 million for the three months ended March 31, 2013 and 2012, respectively.

The fair value adjustments for Member Loans at fair value were largely offset by the fair value adjustments of the Notes and Certificates at fair value due to the member payment dependent design of the Notes and Certificates, and because the principal balances of the Member Loans at fair value were very close to the combined principal balances of the Notes and Certificates. Accordingly, the net fair value adjustment gains/(losses) for Member Loans and Notes and Certificates were $(31,000) and $(40,000) for the three months ended March 31, 2013 and 2012, respectively.

Loan loss provisions were zero and $(8,000) for the three months ended March 31, 2013 and 2012, respectively. Loan loss provisions arise only for Member Loans at amortized cost. The decline in the loan loss provisions for Member Loans at amortized cost was due to the zero balance of Member Loans at amortized cost during the three months ended March 31, 2013.

The following tables summarize our operating expenses for the three months ended March 31, 2013 and 2012, respectively (in thousands).

Sales, marketing and customer service expense consists primarily of salaries, benefits and stock-based compensation expense related to sales, marketing, customer service, credit and collections personnel, costs of marketing campaigns and costs of borrower acquisitions such as credit scoring and screening. Sales, marketing and customer service expenses for the three months ended March 31, 2013 and 2012, were $10.3 million and $4.9 million, respectively, an increase of approximately 110%. The increase in spending during the three month period ended March 31, 2013 compared to the same period of the prior year was primarily due to a $2.1 million increase in personnel related expenses resulting from increased headcount and a $3.0 million increase in spending on new and ongoing marketing programs to attract borrowers on the platform.

Technology expense consists primarily of salaries, benefits and stock-based compensation expense of technology personnel, and the cost of subcontractors who work on the development and maintenance of our platform and software enhancements that run our platform. Technology expenses for the three months ended March 31, 2013 and 2012 were $2.2 million and $0.9 million, respectively, an increase of 161%. The increase for the three month period ended March 31, 2013 versus the same periods in the prior year were primarily due to a $1.0 million increase in personnel related expenses resulting from increased headcount and contract labor expenses.

During the three months ended March 31, 2013, we capitalized $0.4 million of software development costs compared to zero costs capitalized for the three months ended March 31, 2012.

General and administrative expense consists primarily of salaries, benefits and stock-based compensation expense related to general and administrative personnel, professional fees primarily related to legal and accounting fees, facilities expenses and the related overhead, and expenses related to platform fraud prevention and remediation. General and administrative expenses for the three months ended March 31, 2013 and 2012, were $3.6 million and $2.1 million, respectively, an increase of approximately 77%. The increase was primarily due to a $0.6 million increase in personnel related expenses resulting from increased headcount, a $0.3 million increase in contract labor expenses and a $0.3 million increase in professional fees.

We expect that general and administrative expenses will increase as we continue to expand our business.

The following table summarizes our cash flows for the three months ended March 31, 2013 and 2012 (in thousands).

Net cash provided by (used in) operating activities was $3.0 million and $(1.6 million) for the three months ended March 31, 2013 and 2012, respectively. Net cash provided by operating activities was positive for the three months ended March 31, 2013, due to increases in accounts payable, accrued interest payable, accrued expenses and liabilities and payable to member borrowers and investors. Cash used in operating activities was used to fund ongoing operations such as compensation and benefits, legal and accounting services, marketing expenses and cost of service expenses.

Net cash used in investing activities for the three months ended March 31, 2013 and 2012 were $228.7 million and $72.3 million, respectively. Net cash used for the three months ended March 31, 2013 primarily represents originations of Member Loans at fair value of $352.9 million and a net increase in restricted cash of $4.3 million, partially offset by the repayment of Member Loans at fair value of $88.8 million and proceeds from sale of Member Loans of $41.2 million.

Net cash provided by financing activities for the three months ended March 31, 2013 and 2012 were $224.4 million and $80.5 million, respectively. Net cash provided for the three months ended March 31, 2013 primarily represents proceeds from the issuance of Notes and Certificates at fair value of $312.8 million partially offset by payments on Notes and Certificates at fair value of $88.9 million.

At March 31, 2013 we had $11.7 million in restricted cash. Restricted cash at March 31, 2013 consists primarily of approximately $3.4 million of member investors cash received but not yet applied to their accounts, pledges of $3.0 million of our funds as security for WebBank, approximately $2.9 million for an investor as part of a credit support agreement, and approximately $1.7 million as security for Wells Fargo Bank that clears our borrowers’ and investors’ cash transactions. We primarily hold our excess cash in short-term interest-bearing money market funds at highly-rated financial institutions.

As of March 31, 2013, deposits were $1.1 million. This includes a deposit of $0.9 million placed with a nationally-recognized payment services provider we use for transactions related to our platform. The deposit is required pursuant to the agreement with the payment services provider, serves as collateral for the protection of the payment services provider and our members, and is restricted as to withdrawal. The deposit is ongoing throughout the term of the contract and the amount of the deposit depends on the volume of payment transactions processed. The deposit with the payment services provider is required to be returned to us when payment transaction volumes decline and upon termination or expiration of the agreement.

As of March 31, 2013, our accumulated deficit was $57.6 million and our total stockholders’ deficit was $49.8 million. Our net income for the three months ended March 31, 2013 was $40,000. For the three months ended March 31, 2013, we were able to generate a positive cash flow from operations on an operating basis. We expect to continue to generate positive cash flows from operations through the end of calendar year 2013. If our assumptions regarding continued growth and operating plan are incorrect, we may need to slow our investment spending, which could slow our rate of growth or ability to continue operating on a cash-flow positive basis, and our current liquidity resources may be consumed. To date, we have funded our cash requirements with proceeds from the sale of our equity securities and issuance of loans payable.

As of March 31, 2013, LCA was the general partner to five private investment funds for accredited investors and qualified purchasers with differing investment strategies. These private investment funds are: Broad Based Consumer Credit Fund, L.P. (“BBF”), Broad Based Consumer Credit (Q) Fund, L.P. (“BBF-QP”), Broad Based Consumer Credit Fund, L.P. (“BBF II”), Conservative Consumer Credit Fund, L.P. (“CCF”), and Conservative Consumer Credit (Q) Fund, L.P. (“CCF-QP”). In connection with the funds, we formed LC Trust I (the “Trust), a Delaware business trust, to act as a bankruptcy remote for holding portions of Member Loans related to Certificates purchased by the funds separate and apart from the Member Loans and other assets of ours. We and the Trust have entered into a loan purchase agreement and a servicing agreement whereby we service the loans acquired by the Trust in a manner identical to other loans; the Trust earns a servicing fee equal to 40 basis points, which is paid by each of the funds.

As of March 31, 2013, the funds had approximately $378.6 million in assets with $43.3 million in escrow, which was contributed to the funds on the first business day of April 2013. LCA earns a management fee paid by the limited partners of the funds, paid monthly in arrears, that ranges from 0.60% to 1.25% (annualized) of the month-end balances of partners’ capital accounts. These management fees can be modified or waived for individual limited partners at the discretion of the general partner.

Beginning January 2012, LCA also began offering SMAs to individual accredited investors or qualified purchasers. Funds in the SMAs are invested in Certificates issued by the Trust. As of March 31, 2013, the SMAs had approximately $66.7 million in assets. LCA earns management fees paid by SMA investors, monthly in arrears, based on balances in the SMA accounts.

The table below presents a summary of changes in total assets under management for LCA stated at amortized cost except for appreciation / (depreciation) which includes fair value adjustments for investments, for the three month periods ended March 31, 2013 (in millions).

We incurred no net tax provision or benefit related to our pre-tax income for the three month ended March 31, 2013. Accounting Standards Codification Topic 740, “Income Taxes,” provides for the recognition of deferred tax assets, such as the future benefit of net operating loss deductions against future taxable income, if realization of such tax-related assets is more likely than not. However, given our history of operating losses, it is difficult to accurately forecast when and in what amounts future results will be affected by the realization, if any, of the tax benefits of future deductions for our net operating loss carry forwards. Based upon the weight of available evidence, which includes our historical operating performance and the reported cumulative net losses in all prior years, we have provided a full valuation allowance against our net deferred tax assets. Such valuation allowance against the deferred tax assets fully offsets the current periods’ tax benefits attributable to the pre-tax losses.

As of March 31, 2013 we had federal and state net operating loss (NOL) carryforwards of $53.0 million and $54.5 million, respectively. As of March 31, 2013, we also had federal and state research and development (R&D) tax credit carry forwards of $0.3 million and $0.4 million, respectively. In general, a corporation’s ability to utilize its NOL’s and R&D credit carryforwards may be substantially limited due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. The amount of such limitations on the Company’s total federal net operating losses of approximately $53.0 million incurred since the Company’s inception in October 2006 through March 31, 2013 has been analyzed, and the Company believes limitations exist only on the future annual deductibility of approximately $2.5 million of the Company’s total net operating loss carryforwards.

The Company is the primary beneficiary of the Trust and we have determined that the Trust is a variable interest entity (“VIE”).

The Trust acquires and holds Member Loans from the Company for the sole benefit of investors that purchase through Global Certificates issued by the Trust and which are related to the underlying Member Loans. The Certificates may only be settled with cash flows from the underlying Member Loans held by the Trust consistent with the member payment dependent design of the Notes; Certificate holders do not have recourse to the general credit of the Trust, Company, borrower members, or other investors.

In regards to the following historical information, prior performance is no guarantee of future results or outcomes.

From inception to March 31, 2013, we had facilitated Member Loans with an average original principal amount of $12,909 and an aggregate original principal amount of $1.5 billion. Out of 118,608 facilitated Member Loans, 19,843 Member Loans with an aggregate original principal amount of $208.2 million, or 13.60%, are fully paid. Including loans that are fully paid, 110,336 loans, representing $1.4 billion of the original principal balance of loans facilitated through the platform through March 31, 2013, had been through at least one billing cycle.

Of this $1.4 billion of original principal balance, $35.0 million of outstanding principal balance less interest and fees received, or 2.50%, was either in default $1.1 million (0.08%) or had been charged off $33.9 million (2.42%). The defaulted or charged off loans were comprised of 4,757 Member Loans, of which 3,453 loans representing $24.4 million in outstanding principal balance less interest and fees received, were defaults and charge offs due to delinquency, while the remaining 1,304 loans were loans in which the borrower members filed for a Chapter 7 bankruptcy seeking liquidation. A Member Loan is considered defaulted when at least one payment is more than 120 days late. A loan is charged-off no later than when it reaches 150 days late.

Of the remaining loans that had been through at least one billing cycle as of March 31, 2013, $931.8 million of principal remained outstanding of which $908.2 million (98.13%) was current, $6.1 million (0.28%) was 16 to 30 days late, $12.9 million (1.38%) was between 31 and 120 days late and $1.9 million (0.21%) was on a performing payment plan. During the three months ended March 31, 2013, of the 68,364 Member Loans which were not delinquent prior to the start of the year, 1,935 Member Loans became delinquent for some amount of time during the three months, excluding those that entered the 0 to 15 day grace period.

The following table presents aggregated information about loans for the period from inception to March 31, 2013, grouped by the loan grade assigned by us:

The following table presents aggregated information for the period from inception to March 31, 2013, reported by a consumer reporting agency about our borrower members at the time of their loan applications, grouped by the loan grade assigned by us. As used in this table, “Delinquencies in the Last Two Years” means the number of 30+ days past-due incidences of delinquency in the borrower member’s credit file for the past two years. We do not independently verify this information. All figures other than loan grade are agency reported:

The following table presents additional aggregated information for the period from inception to March 31, 2013, about borrower current and paid off loans, grouped by the loan grade assigned by us.

The following table presents aggregated information for the period from inception to March 31, 2013, about delinquencies and default loans, grouped by the loan grade assigned by us. The default and delinquency information presented in the table includes data only for Member Loans that had been through at least one billing cycle as of March 31, 2013. With respect to late Member Loans, the following table shows the entire amount of the principal remaining due, not just that particular payment. The third and fifth columns show the late Member Loan amounts as a percentage of Member Loans that have been through at least one billing cycle. Member Loans are placed on nonaccrual status and considered as defaulted when they become 120 days late.

The data in the following table regarding loss experience may not be representative of the loss experience that will develop over time as additional Member Loans are facilitated through our platform and the Member Loans already facilitated through our platform have longer payment histories.

The following table presents aggregated information for the period from inception to March 31, 2013, on the results of our collection efforts for all corresponding Member Loans that became more than 30 days past due at any time, grouped by credit grade. For purposes of this inception-to-date analysis, we have excluded 64 loans that we classified as identity fraud. In these cases, we wrote-off the uncollectible loan and repaid holders of any related Notes an amount equal to the unpaid principal balances due on the Notes less any applicable servicing fees.

The following graph presents the dollar weighted average interest rate for Member Loans originated from inception to March 31, 2013, by grade.

Loan performance is reviewed on a monthly basis to determine how loss rate estimates compare to the actual performance of loans. As part of our monthly review, the processes for calculating and assigning loss rates and LendingClub grades are reassessed to ensure continued accuracy. The graph below shows the actual cumulative net charge-offs by LendingClub grades for Member Loans booked from January 1, 2008 through March 31, 2013, as a percentage of originations. The loss performance is tracked by vintage, meaning each line represents all loans originated in a given period.

The graphs below show cumulative net charge-offs for Member Loans as a percentage of originations for each LendingClub grade presented by vintage from January 1, 2008 to March 31, 2013.

We establish and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we are required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by the Exchange Act Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective.

There has been no adverse change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

The discussion in this Report should be read together with the risk factors contained in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the transitional period ended December 31, 2012. These risk factors describe various risks and uncertainties. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies or prospects in a material and adverse manner. In addition, these risks could have a material adverse effect on the value of the Notes you purchase and could cause you to lose all or part of your initial purchase price or future principal and interest payments you expect to receive.

We have incurred net losses in the past and have only recently generate net income and become cash flow positive. If we are unable to sustain our positive growth and become insolvent or bankrupt, you may lose your investment.

As of March 31, 2013, our accumulated deficit was $57.6 million and our total stockholders’ deficit was $49.8 million. Our net income for the three months ended March 31, 2013 was $40,000. For the three month ended March 31, 2012 net loss was $2.6 million. For the quarter ended March 31, 2013, we were cash-flow positive and we believe that we will continue operating at or near breakeven for the remainder of 2013. However, if our assumptions regarding our growth and operating plan are incorrect, we may need to slow our investment spending and/or find new funding to continue to operate our business. We currently believe that such funding would be available to us on terms that we would find acceptable. Any delay in securing, or failing to secure, any necessary funding could result in delays and operational slowdowns that could adversely affect the regularity of our processing payments, the cash flows on your investment and ultimately the value of your investment.

On October 13, 2008, we commenced a public offering of up to $600,000,000 in principal amount of the Notes pursuant to the Registration Statement (Registration Statement No. 333-151827) that was declared effective by the SEC on October 10, 2008. The offering was a continuous offering. On October 7, 2011, we filed a new Registration Statement registering $1,000,000,000 in principal amount of Notes (Registration Statement No. 333-177230) that was declared effective by the SEC on July 31, 2012. From October 13, 2008 to March 31, 2013, we sold $823.8 million in total principal amount of Notes at 100% of their principal amount. The Notes were offered only through our website, and there were no underwriters or underwriting discounts. In connection with the offering, we incurred estimated expenses of approximately $6.0 million, none of which were paid by us to our directors, officers, persons owning 10% or more of any class of our equity securities or affiliates. As set forth in the prospectus for the offering, we are using the proceeds of each series of Notes to fund a corresponding Member Loan at fair value through the LendingClub platform designated by the lender members purchasing such series of Notes. None of the proceeds from the Notes are paid by us to our directors, officers, persons owning 10% or more of any class of our equity securities or affiliates.

We have no publicly traded equity securities. At March 31, 2013, there were 78 holders of record of our common stock. We have not paid cash dividends since our inception, and we do not anticipate paying cash dividends in the foreseeable future.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


LENDINGCLUB CORPORATION

By:		/s/ RENAUD LAPLANCHE
Name:		Renaud Laplanche
Title:		Chief Executive Officer
		(principal executive officer)

By:		/s/ CARRIE DOLAN
Name:		Carrie Dolan
Title:		Chief Financial Officer
		(principal financial officer and principal accounting officer)


Delaware		51-0605731
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

71 Stevenson St., Suite 300 San Francisco, California		94105
(Address of principal executive offices)		(Zip Code)


Contents

PART I FINANCIAL INFORMATION			2
Item 1. Financial Statements			2
Consolidated Balance Sheets			2

Consolidated Statements of Operations			3

Consolidated Statements of Cash Flows			4

Notes to Consolidated Financial Statements			5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures about Market Risk			40
Item 4. Controls and Procedures			40

PART II. OTHER INFORMATION			41
Item 1. Legal Proceedings			41
Item 1A. Risk Factors			41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			41
Item 3. Defaults Upon Senior Securities			41
Item 4. Mine Safety Disclosures			41
Item 5. Other Information			41
Item 6. Exhibits			41

SIGNATURES			42

EXHIBIT INDEX			43


	March 31, 2013			December 31, 2012
	(unaudited)
ASSETS
Cash and cash equivalents	$	51,305		$	52,551
Restricted cash		11,747			7,484
Member Loans at fair value (includes $554,042 and $396,081 from consolidated Trust, respectively)		995,983			781,215
Accrued interest receivable (includes $2,540 and $2,023 from consolidated Trust, respectively)		7,530			5,521
Prepaid expenses and other assets		2,111			1,785
Property and equipment, net		2,971			1,578
Deposits		1,077			696

Total Assets	$	1,072,724		$	850,830

LIABILITIES
Accounts payable	$	2,238		$	1,210
Accrued interest payable (includes $2,540 and $2,023 from consolidated Trust, respectively)		8,781			6,678
Accrued expenses and other liabilities		4,483			3,366
Payable to member investors		3,885			2,050
Notes and Certificates, at fair value (includes $554,042 and $396,081 from consolidated Trust, respectively)		1,000,059			785,316

Total Liabilities		1,019,446			798,620

Commitments and contingencies (see Note 13)

PREFERRED STOCK
Preferred stock	$	103,043		$	103,023

STOCKHOLDERS’ DEFICIT
Common stock, $0.01 par value; 90,000,000 shares authorized at March 31, 2013 and December 31, 2012, respectively; 12,482,966 and 11,291,862 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively	$	125		$	123
Additional paid-in capital		7,718			6,713
Treasury stock (17,640 shares held at March 31, 2013 and December 31, 2012)		(12	)		(12	)
Accumulated deficit		(57,596	)		(57,637	)

Total Stockholders’ Deficit		(49,765	)		(50,813	)

Total Liabilities, Preferred Stock and Stockholders’ Deficit	$	1,072,724		$	850,830


	Three Months Ended March 31,
	2013			2012
Non-Interest Revenue:
Origination fees	$	13,587		$	4,579
Servicing fees		710			439
Other revenue		1,946			100

Total Non-Interest Revenue		16,243			5,118

Interest income:
Member Loans		32,358			12,651
Cash and cash equivalents		6			9

Total interest income		32,364			12,660

Interest expense:
Notes and Certificates at fair value		(32,325	)		(12,485	)
Loans payable		—			(31	)

Total interest expense		(32,325	)		(12,516	)

Net Interest Income		39			144
Provision for loan losses on Member Loans at amortized cost		—			(8	)
Fair valuation adjustments, Member Loans at fair value		(9,217	)		(4,794	)
Fair valuation adjustments, Notes and Certificates		9,186			4,754

Net Interest Income after provision for loan losses and fair value adjustments		8			96

Total Net Revenue		16,251			5,214

Operating expenses:
Sales, marketing and customer service		(10,341	)		(4,932	)
Technology		(2,248	)		(862	)
General and administrative		(3,622	)		(2,044	)

Total Operating Expenses		(16,211	)		(7,838	)

Income (loss) before provision for income taxes		40			(2,624	)
Provision for income taxes		—			—

Net income (loss)	$	40		$	(2,624	)

Net income (loss) attributable to common stockholders	$	40		$	(2,624	)

Basic and diluted net income (loss) per share	$	0.00		$	(0.29	)
Weighted-average shares of common stock used in computing basic and diluted net income (loss) per share		11,909,129			8,957,563


Level 1 –		Quoted market prices in active markets for identical assets or liabilities;

Level 2 –		Significant other observable inputs (e.g. quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs); and

Level 3 –		Valuation is generated from model-based techniques that use inputs that are significant and unobservable in the market. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.


	Member Loans at Fair Value						Notes and Certificates at Fair Value
	March 31, 2013			December 31, 2012			March 31, 2013			December 31, 2012
Aggregate principal balance outstanding	$	1,006,776		$	791,774		$	1,010,826		$	795,842
Fair valuation adjustments		(10,793	)		(10,559	)		(10,767	)		(10,526	)

Fair Value	$	995,983		$	781,215		$	1,000,059		$	785,316


	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Fair Value
March 31, 2013
Assets
Member Loans at fair value	$	—	$	—	$	995,983	$	995,983
Liabilities
Notes and Certificates	$	—	$	—	$	1,000,059	$	1,000,059
December 31, 2012
Assets
Member Loans at fair value	$	—	$	—	$	781,215	$	781,215
Liabilities
Notes and Certificates	$	—	$	—	$	785,316	$	785,316


	Member Loans At fair value			Notes and Certificates
Fair value at December 31, 2012	$	781,215		$	785,316
Originations/Issuances		352,896			312,812
Loans sold to third parties		(40,066	)		—
Principal repayments		(88,845	)		(88,883	)

Carrying value before fair value adjustments		1,005,200			1,009,245
Fair valuation adjustments, included in earnings		(9,217	)		(9,186	)

Fair value at March 31, 2013	$	995,983		$	1,000,059


					Range of Inputs
	Fair Value		Valuation Techniques	Unobservable Input	Minimum			Maximum
Member Loans	$	995,983	Discounted cash flow	Discount rate		5.8	%		15.0	%
				Net cumulative expected loss		2.1	%		26.4	%
Notes & Certificates	$	1,000,059	Discounted cash flow	Discount rate		5.8	%		15.0	%
				Net cumulative expected loss		2.1	%		26.4	%


	Three Months Ended March 31, 2013
Related Party	Platform Deposits		Platform Withdrawals		Investments
Executive Officers	$	—	$	6	$	—
Directors		968		105		968

	$	968	$	111	$	968


	Three Months Ended March 31, 2012
Related Party	Platform Deposits		Platform Withdrawals		Investments
Executive Officers	$	—	$	15	$	2
Directors		200		81		117

	$	200	$	96	$	119


	As of March 31, 2013				As of December 31, 2012
Related Party	Notes and Certificates Outstanding		Total Funds Committed		Notes and Certificates Outstanding		Total Funds Committed
Executive Officers	$	26	$	40	$	30	$	39
Directors		3,982		4,040		3,061		3,105

	$	4,008	$	4,080	$	3,091	$	3,144


	March 31, 2013		December 31, 2012
Preferred stock, $0.01 par value; 61,617,516 total shares authorized at March 31, 2013 and December 31, 2012:
Series A convertible preferred stock, 17,006,275 shares designated at March 31, 2013 and December 31, 2012; 16,336,524 and 16,317,747 shares issued and outstanding at March 31, 2013 and December 31, 2012; aggregate liquidation preference of $17,398 and $17,371 at March 31, 2013 and December 31, 2012.	$	17,201	$	17,181
Series B convertible preferred stock, 16,410,526 shares designated at March 31, 2013 and December 31, 2012; 16,410,526 and 16,394,324 shares issued and outstanding at March 31, 2013 and December 31, 2012; aggregate liquidation preference of $12,167 at March 31, 2013 and December 31, 2012.		12,164		12,164
Series C convertible preferred stock, 15,621,609 shares designated at March 31, 2013 and December 31, 2012; 15,621,609 shares issued and outstanding at March 31, 2013 and December 31, 2012, aggregate liquidation preference of $24,490 at March 31, 2013 and December 31, 2012.		24,388		24,388
Series D convertible preferred stock, 9,007,678 shares designated at March 31, 2013 and December 31, 2012; 9,007,678 shares issued and outstanding at March 31, 2013 and December 31, 2012; aggregate liquidation preference of $32,044 at March 31, 2013 and December 31, 2012.		31,943		31,943
Series E convertible preferred stock, 3,571,428 shares designated at March 31, 2013 and December 31, 2012; 2,500,000 shares issued and outstanding at March 31, 2013 and December 31, 2012; aggregate liquidation preference of $17,500 at March 31, 2013 and December 31, 2012.		17,347		17,347

	$	103,043	$	103,023


Options to purchase common stock			9,992,030
Options available for future issuance			614,928
Convertible preferred Series A stock warrants			669,751
Common stock warrants			237,794

Total common stock authorized and reserved for future issuance			11,514,503


	Three Months Ended March 31, 2013
Assumed forfeiture rate (annual %)		5.0	%
Expected dividend yield		0.0	%
Assumed stock price volatility		63.5	%
Risk-free interest rates		1.12	%
Expected life (years)		6.25


	Stock Options Issued and Outstanding			Weighted Average Exercise Price
Balances, at December 31, 2012		10,255,222		$	1.19
Options Granted		378,000			2.78
Options Exercised		(1,208,744	)		0.40
Options Forfeited/Expired		(47,376	)		0.61

Balances, March 31, 2013		9,377,102		$	1.36


	Stock Options Issued and Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
Options Outstanding		9,377,102		8.58	$	1.36
Options Vested		2,347,124		7.42	$	0.52
Options Vested and Expected to Vest		8,919,265		8.54	$	1.33


Weighted Average Exercise Price	Stock Options Outstanding		Weighted Average Remaining Contractual Life of Outstanding Stock Options (Years)		Number of Stock Options Vested		Number of Stock Options Vested and Expected to Vest
$0.23		391,688		6.66		303,249		390,499
$0.40		2,932,633		7.28		1,587,055		2,887,211
$0.71		2,586,993		8.93		365,980		2,448,523
$2.78		3,465,788		9.63		90,840		3,193,032

$1.36		9,377,102		8.58		2,347,124		8,919,265


	Three Months Ended March 31,
	2013		2012
Origination fees	$	13,587	$	4,579
Servicing fees		710		439
Management fees from Certificate investors		494		100
Gain from sales of Member Loans		1,160		—
Other revenue		292		—

Total Non-Interest Revenue	$	16,243	$	5,118


Loan Grade	A1			A2			A3-A5			B			C			D			E			F			G
Fee		1.11	%		2.00	%		3.00	%		4.00	%		5.00	%		5.00	%		5.00	%		5.00	%		5.00	%


Balance at December 31, 2012	$	288.8
Net capital contributions		149.3
Appreciation (depreciation)		7.2

Balance at March 31, 2013	$	445.3


Loan Grade	Number of Loans		Average Interest Rate			Total Amount Issued
A1		3,373		5.96	%	$	32,815,075
A2		3,573		6.52	%		33,317,175
A3		4,142		7.42	%		43,902,825
A4		6,765		7.80	%		76,005,700
A5		6,529		8.63	%		77,130,775
B1		5,536		10.04	%		62,374,150
B2		7,263		10.88	%		88,611,350
B3		10,382		11.78	%		125,179,375
B4		8,672		12.58	%		109,386,300
B5		7,159		13.07	%		85,899,400
C1		7,140		13.77	%		88,236,700
C2		6,675		14.53	%		85,194,150
C3		4,885		14.98	%		63,793,925
C4		4,460		15.51	%		58,879,200
C5		4,084		16.24	%		55,202,525
D1		3,689		16.80	%		45,422,025
D2		3,811		17.11	%		46,900,225
D3		3,227		17.36	%		44,072,775
D4		3,001		17.76	%		45,869,775
D5		2,571		18.31	%		42,462,125
E1		1,858		18.60	%		32,066,150
E2		1,818		19.18	%		31,901,675
E3		1,535		19.61	%		27,383,150
E4		1,402		20.18	%		26,848,400
E5		1,116		20.48	%		21,728,050
F1		942		21.08	%		19,035,425
F2		770		21.42	%		15,520,950
F3		576		21.80	%		11,641,225
F4		459		21.86	%		9,522,425
F5		366		22.15	%		8,271,675
G1		287		22.38	%		6,219,100
G2		189		22.22	%		3,888,225
G3		122		22.08	%		2,445,525
G4		125		21.44	%		2,393,800
G5		106		21.14	%		1,602,850

Total Portfolio		118,608		13.21	%	$	1,531,124,175


Loan Grade	Average FICO		Average Open Credit Lines		Average Total Credit Lines		Average Revolving Credit Balance		Average Revolving Line Utilization			Average Inquiries in the Last Six Months		Average Delinquencies in the Last Two Years		Average Months Since Last Delinquency
A1		776		11		26	$	12,556		22.08	%		0		0		40
A2		760		10		25		12,364		27.67	%		1		0		40
A3		750		10		24		14,252		32.95	%		1		0		39
A4		739		10		23		14,443		39.57	%		1		0		39
A5		730		10		24		16,455		44.49	%		1		0		38
B1		722		10		23		15,146		48.81	%		1		0		38
B2		715		10		24		16,092		51.93	%		1		0		38
B3		708		10		23		15,173		55.80	%		1		0		37
B4		703		10		23		15,530		56.41	%		1		0		37
B5		701		10		22		14,694		58.33	%		1		0		37
C1		696		10		23		15,027		60.38	%		1		0		36
C2		693		10		23		15,244		61.71	%		1		0		36
C3		692		10		23		16,024		60.65	%		1		0		35
C4		688		11		23		15,877		62.83	%		1		0		35
C5		686		11		23		15,249		63.25	%		1		0		34
D1		679		10		22		15,026		67.03	%		1		0		34
D2		683		10		22		14,454		65.67	%		1		0		35
D3		685		10		22		15,520		65.42	%		1		0		35
D4		684		10		23		15,666		66.46	%		1		0		35
D5		684		11		24		17,448		66.85	%		1		0		34
E1		684		10		24		16,597		67.90	%		1		0		35
E2		683		11		24		17,450		68.30	%		1		0		34
E3		681		11		24		18,351		69.55	%		1		0		33
E4		679		11		25		18,851		69.55	%		1		0		34
E5		678		11		25		18,874		70.09	%		1		0		33
F1		678		11		26		18,744		69.59	%		1		0		32
F2		676		11		25		19,474		72.82	%		1		0		33
F3		675		11		26		19,816		71.99	%		1		0		32
F4		672		11		26		18,877		71.20	%		2		0		31
F5		671		12		26		21,009		73.63	%		1		0		32
G1		669		12		27		18,174		70.65	%		2		1		30
G2		670		12		27		24,751		75.13	%		2		0		30
G3		668		11		25		18,557		77.73	%		2		0		27
G4		666		14		30		29,657		73.67	%		2		0		30
G5		664		15		32		40,370		71.06	%		3		0		28
Total Portfolio		706		10		23	$	15,518		55.43	%		1		0		36


Loan Grade	Number of Current loans		Current loan ($)		Number of Loans Fully Paid		Fully Paid ($)		Fully Paid (%) of all loans			Number of All Issued Loans		Total Origination Amount for All Issued Loans
A1		2,609	$	19,493,410		492	$	3,396,125		10.35	%		3,373	$	32,815,075
A2		2,572		18,319,948		766		4,995,475		14.99	%		3,573		33,317,175
A3		2,811		23,391,140		991		7,200,850		16.40	%		4,142		43,902,825
A4		4,918		42,327,725		1,397		11,926,750		15.69	%		6,765		76,005,700
A5		4,381		40,214,849		1,465		13,897,600		18.02	%		6,529		77,130,775
B1		3,989		36,014,365		963		9,496,175		15.22	%		5,536		62,374,150
B2		5,234		53,207,058		1,084		11,465,775		12.94	%		7,263		88,611,350
B3		7,949		77,072,909		1,337		15,449,375		12.34	%		10,382		125,179,375
B4		6,381		67,287,375		1,176		13,029,550		11.91	%		8,672		109,386,300
B5		5,241		50,826,295		1,274		13,531,175		15.75	%		7,159		85,899,400
C1		5,200		54,073,780		1,051		10,934,700		12.39	%		7,140		88,236,700
C2		4,815		52,301,035		995		10,497,525		12.32	%		6,675		85,194,150
C3		3,178		36,753,074		819		8,501,625		13.33	%		4,885		63,793,925
C4		2,969		35,349,912		761		7,934,150		13.48	%		4,460		58,879,200
C5		2,683		32,473,286		635		6,487,250		11.75	%		4,084		55,202,525
D1		2,511		26,236,166		565		5,884,850		12.96	%		3,689		45,422,025
D2		2,599		27,444,471		648		7,454,725		15.89	%		3,811		46,900,225
D3		2,159		25,645,913		574		6,989,000		15.86	%		3,227		44,072,775
D4		2,004		27,805,803		497		6,029,775		13.15	%		3,001		45,869,775
D5		1,701		25,573,620		438		5,772,825		13.60	%		2,571		42,462,125
E1		1,244		19,584,524		327		4,551,675		14.19	%		1,858		32,066,150
E2		1,211		20,087,550		303		3,896,475		12.21	%		1,818		31,901,675
E3		1,021		17,275,217		250		3,447,750		12.59	%		1,535		27,383,150
E4		939		17,293,998		209		3,050,850		11.36	%		1,402		26,848,400
E5		740		13,567,498		188		2,754,300		12.68	%		1,116		21,728,050
F1		638		12,331,919		130		1,796,700		9.44	%		942		19,035,425
F2		514		9,752,351		105		1,593,800		10.27	%		770		15,520,950
F3		370		7,200,174		85		1,305,225		11.21	%		576		11,641,225
F4		286		5,804,349		69		966,450		10.15	%		459		9,522,425
F5		225		4,945,024		54		938,125		11.34	%		366		8,271,675
G1		182		3,879,515		54		989,075		15.90	%		287		6,219,100
G2		112		2,159,632		30		406,775		10.46	%		189		3,888,225
G3		55		1,089,516		28		425,675		17.41	%		122		2,445,525
G4		50		911,348		38		651,725		27.23	%		125		2,393,800
G5		28		485,310		45		529,350		33.03	%		106		1,602,850

Total		83,519	$	908,180,058		19,843	$	208,179,225		13.60	%		118,608	$	1,531,124,175


Loan Grade	16-30 Days Late ($)		16-30 Days Late (%)			31+ Days Late ($)		31+ Days Late (%)			Charged-Off / Default ($)		Charged-Off / Default of Through At Least One Billing Cycle (%)			Number of Loans excl Issued / Fully Paid		Number of All Issued Loans		Total Origination Amount for All Issued Loans		Charged- Off / Default of All Issued (%)
A1	$	—		0.00	%	$	81,827		0.41	%	$	134,331		0.46	%		2,651		3,373	$	32,815,075		0.41	%
A2		33,249		0.18	%		28,500		0.15	%		276,645		0.90	%		2,649		3,573		33,317,175		0.83	%
A3		34,933		0.15	%		155,232		0.65	%		367,859		0.93	%		2,933		4,142		43,902,825		0.84	%
A4		78,126		0.18	%		290,927		0.67	%		690,201		0.96	%		5,123		6,765		76,005,700		0.91	%
A5		67,986		0.16	%		341,268		0.82	%		809,858		1.17	%		4,606		6,529		77,130,775		1.05	%
B1		40,069		0.11	%		223,202		0.60	%		900,544		1.57	%		4,209		5,536		62,374,150		1.44	%
B2		104,498		0.19	%		545,169		0.99	%		990,065		1.26	%		5,505		7,263		88,611,350		1.12	%
B3		178,976		0.22	%		473,109		0.59	%		2,045,372		1.78	%		8,344		10,382		125,179,375		1.63	%
B4		112,496		0.16	%		664,491		0.94	%		1,683,532		1.71	%		6,763		8,672		109,386,300		1.54	%
B5		136,835		0.25	%		655,103		1.21	%		1,778,978		2.15	%		5,649		7,159		85,899,400		2.07	%
C1		126,020		0.22	%		744,757		1.29	%		1,874,975		2.30	%		5,611		7,140		88,236,700		2.12	%
C2		123,182		0.22	%		570,926		1.03	%		1,834,190		2.34	%		5,219		6,675		85,194,150		2.15	%
C3		94,716		0.24	%		347,121		0.88	%		1,650,348		2.99	%		3,514		4,885		63,793,925		2.59	%
C4		83,290		0.22	%		486,143		1.30	%		1,215,069		2.37	%		3,237		4,460		58,879,200		2.06	%
C5		125,067		0.36	%		434,452		1.25	%		1,236,120		2.62	%		2,970		4,084		55,202,525		2.24	%
D1		125,771		0.44	%		512,708		1.80	%		1,054,464		2.62	%		2,786		3,689		45,422,025		2.32	%
D2		113,549		0.37	%		661,445		2.17	%		1,621,704		3.61	%		2,954		3,811		46,900,225		3.46	%
D3		117,489		0.40	%		828,405		2.86	%		1,783,275		4.22	%		2,474		3,227		44,072,775		4.05	%
D4		238,427		0.77	%		643,642		2.09	%		1,489,770		3.49	%		2,292		3,001		45,869,775		3.25	%
D5		99,393		0.35	%		431,229		1.53	%		1,352,734		3.49	%		1,929		2,571		42,462,125		3.19	%
E1		99,059		0.45	%		504,664		2.28	%		1,452,613		4.70	%		1,470		1,858		32,066,150		4.53	%
E2		57,661		0.26	%		430,305		1.92	%		1,137,255		3.79	%		1,398		1,818		31,901,675		3.56	%
E3		89,793		0.47	%		217,525		1.15	%		941,546		3.72	%		1,168		1,535		27,383,150		3.44	%
E4		88,098		0.46	%		294,469		1.53	%		1,042,194		4.16	%		1,100		1,402		26,848,400		3.88	%
E5		76,349		0.49	%		454,926		2.94	%		967,639		4.65	%		874		1,116		21,728,050		4.45	%
F1		32,262		0.23	%		328,369		2.33	%		1,007,950		5.62	%		746		942		19,035,425		5.30	%
F2		64,770		0.58	%		245,644		2.21	%		761,582		5.30	%		610		770		15,520,950		4.91	%
F3		9,722		0.11	%		385,363		4.53	%		528,095		4.82	%		451		576		11,641,225		4.54	%
F4		17,539		0.25	%		219,647		3.19	%		576,499		6.57	%		357		459		9,522,425		6.05	%
F5		29,645		0.50	%		160,471		2.71	%		526,495		6.81	%		289		366		8,271,675		6.37	%
G1		15,704		0.36	%		117,277		2.67	%		264,620		4.40	%		222		287		6,219,100		4.25	%
G2		—		0.00	%		244,520		8.53	%		354,938		9.29	%		155		189		3,888,225		9.13	%
G3		—		0.00	%		72,438		4.46	%		291,778		12.46	%		89		122		2,445,525		11.93	%
G4		19,676		1.50	%		46,520		3.55	%		188,021		7.92	%		86		125		2,393,800		7.85	%
G5		11,760		1.42	%		37,526		4.55	%		206,148		12.89	%		60		106		1,602,850		12.86	%

Total	$	2,646,108		0.27	%	$	12,879,321		1.32	%	$	35,037,406		2.50	%		90,493		118,608	$	1,531,124,175		2.29	%


Loan Grade	Number of Loans In Collection (1)		Total Origination Amount (1)		Aggregate Amount Sent to Collections (1)		Gross Amount Collected on Accounts Sent to Collections (2)		Number of Loans Charged- Off Due to Delinquency (3)		Aggregate Principal Balance of Loans Charged- Off Due to Delinquency (3)		Gross Amount Recovered on Loans Charged-Off (4)
A		1,312	$	9,772,100	$	893,221	$	317,356		308	$	1,482,182	$	47,573
B		2,304		22,775,475		2,650,143		1,052,881		708		4,543,213		107,769
C		2,387		23,003,425		2,999,196		1,212,692		833		5,106,670		122,744
D		1,882		20,790,500		2,846,696		1,144,129		710		4,992,081		118,850
E		1,052		13,540,500		1,876,445		807,202		435		3,862,043		79,971
F		461		7,634,400		1,117,489		434,497		223		2,446,128		72,932
G		231		3,529,725		581,013		268,449		99		904,610		23,364

Total		9,629	$	101,046,125	$	12,964,203	$	5,237,207		3,316	$	23,336,926	$	573,203


Exhibit No.		Description

31.1		Certification of Chief Executive Officer, Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer, Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer and Chief Financial Officer, Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase