Servicing Rights

9 Months Ended

Sep. 30, 2016

As of September 30, 2016 and December 31, 2015, we serviced for others term loans with a remaining unpaid principal balance of $233.6 million and $345.9 million, respectively. During the three months ended September 30, 2016 and 2015, we sold through OnDeck Marketplace loans with an unpaid principal balance of $87.5 million and $169.0 million, respectively, and during the nine months ended September 30, 2016 and 2015, we sold loans with an unpaid principal balance of $284.9 million and $404.1 million, respectively.

For the three months ended September 30, 2016 and 2015, we earned servicing revenue of $0.3 million and $1.3 million, respectively. For the nine months ended September 30, 2016 and 2015, we earned servicing revenue of $0.9 million and $2.7 million, respectively.

The following table summarizes the activity related to the fair value of our servicing assets for the three and nine months ended September 30, 2016 and September 30, 2015:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Fair value at the beginning of period	$	1,989		$	78		$	3,489		$	—
Addition:
Servicing resulting from transfers of financial assets	717			1,466			2,272			1,544
Changes in fair value:
Change in inputs or assumptions used in the valuation model	—			972			—			972
Changes in fair value ⁽¹⁾	(1,019		)	(264		)	(4,074		)	(264		)
Fair value at the end of period (Level 3)	$	1,687		$	2,252		$	1,687		$	2,252

___________

⁽¹⁾ Represents changes due to collection of expected cash flows through September 30, 2016 and 2015 recognized through other income on the unaudited condensed consolidated statement of operations

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

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