HAPN 10-K & 10-Q changes, risk factors and insider trading

•operating within the bank regulatory regimeframework and to the satisfaction of the banking regulators;

•our compliance with applicable laws and regulations (including applicable foreign laws);

•operating within capital and liquidity regulations and requirements; and

•the adequacy and effectiveness of our risk management framework; andframework.

•our prior use of the issuing bank partnership model;

•our anti-takeover provisions and restrictions in accumulating a position in the Company; and

We are subject to extensive regulation, supervision and legal requirements that affect virtually all aspects of our operations. The regulatory regimeframework governing banking organizations is generally intended to protect customers, depositors, the Deposit Insurance Fund and the overall financial stability of the United States, not our stockholders or creditors. See “Item 1. Business – Regulation and Supervision” for information on the regulation and supervision framework which governs our Company and its activities.

We are supervised and regularly examined and inspected by our regulators, including the FRBFRB, OCC and OCC. Further, we currently anticipate that we will also be regulated by, and thereby subject to supervision and enforcement by, the CFPB in 2025.CFPB. Our regulators have extensive authority and discretion in their interpretation, implementation, supervision and enforcement of the regulatory regime, including on matters related to:

We maintain an allowance for loan losses to provide for loan defaults and non-performance. We reserve for loan losses by establishing an allowance that is based on our assessment of loan losses in our loan portfolio. Further, throughThrough its adoption of the CECL model,methodology, the Financial Accounting Standards Board (FASB) implemented an accounting model to measure credit losses for financial assets measured at amortized cost,cost. whichEffective includesJanuary 1, 2026, we elected the vastfair value option accounting methodology, in lieu of CECL, to account for newly originated HFI loans and therefore all newly originated loans are being accounted for under the fair value option methodology. However, as of the date of this Annual Report, the majority of our loan portfolio.portfolio reflects HFI loans originated prior to January 1, 2026, which are being, and we expect will continue to be, accounted for under the CECL methodology. Under thisCECL, model,we themaintain an allowance isfor establishedloan losses to reserveprovide for loan defaults and non-performance that reflects management’s best estimate of expected lifetime losses inherent in our finance receivables and loan portfolio.

LendingClub Corporation is the parent company of and a separate and distinct legal entity from LC Bank. Legal entity liquidity is an important consideration as there are legal, regulatory and other limitations on our ability to utilize liquidity from one legal entity to satisfy the liquidity requirements of another, which could result in adverse liquidity events at either LendingClub Corporation and/or LC Bank. In particular, LC Bank is subject to laws that restrict dividend payments or authorize regulatory bodies to block or reduce the flow of funds from thosea subsidiariessubsidiary to thetheir parent company or other affiliates. Applicable laws and regulations, including capital and liquidity requirements, could restrict our ability to transfer funds between LC Bank and LendingClub Corporation, which could adversely affect our cash flow and financial condition. Additionally, applicable laws and regulations may restrict what LendingClub Corporation is able to do with the liquidity it does possess, which may adversely affect our business and results of operations.

Bank holding companies, including the Company, are subject to capital and liquidity standards. From time to time, regulators may implement changes to these capital adequacy and liquidity requirements. If the Company fails to meet these minimum capital adequacy and liquidity guidelines and other regulatory requirements, its business activities, including lending, and its ability to expand could be limited. It could also result in the Company being required to take steps to increase its regulatory capital that may not otherwise be in the best interest of the Company or may be dilutive or adverse to stockholders, including issuing equity or borrowing funds to increase capital, limiting the Company’s ability to pay dividends to stockholders or limiting the Company’s ability to invest in assets even if deemed more desirable from a financial and business perspective.

Finally, our risk management framework may be deemed insufficient or inadequate by our regulators, which has in the past required, and may in the future require, that we invest additional resources into remediating any deficiencies and which has adversely impactedimpacted, and may in the future impact, our ability to operate our business until the revised framework is deemed sufficient and adequate by our regulators.

We hold loans purchased and/or issued by the Company or LC Bank. While these loans are on our balance sheet we earn interest on the loans, but we have exposure to the credit risk of the borrowers. In the event ofthese borrowers experience a decline or volatility in thetheir credit profile and/or an increase or volatility in their delinquency rates of these borrowers,rates, the value of these held loans may decline. For example, inflation and/or natural disasters may cause borrowers to allocate more of their income to necessities such as housing and food, thereby potentially increasing their risk of default by reducing their ability to make loan payments.

Volatility or a decline in the value of the loans and/or Securitization Interests held on our balance sheet may adversely impact the liquidity of these loans/interests, which could produce losses if we are unable to realize their fair value or manage declines in their value, each of which may materially and adversely affect our financial performance. Further, increases in delinquency rates may require that we take additional allowances for losses, which may adversely affect our financial performance and our ability to allocate sufficient financial resources for other purposes, such as advancing our products and services, which could impact our results of operations.

Additionally, marketplace investors may exert significant influence over us, our management and our operations. For example, if these investors pause or discontinue their investment activity, we may need to provide incentives or discounts and/or enter into alternative structures or terms to attract investor capital to the platform, such as our Structured Certificates. Any new arrangements or programs may: (i) increase the complexity of our business, (ii) require allocation of personnel and other resources to create and operate such arrangements or programs, and/or (iii) have new and/or different structures and terms, including alternative fee arrangements, purchase price rebates or other incentives. There is also no assurance that we will be able to enter into any of these arrangements or programs with interested parties, or if we do, what the final terms will be. Failure to attract marketplace investor capital on reasonable terms may result in a reduction in origination volume.

We may also experience significant concentration on our marketplace bank platform, where a limited number of marketplace investors purchase a large volume of loans from our platform. Such concentration exposes us disproportionately to any of those investors choosing to cease participation on our platform or choosing to deploy their capital elsewhere, to the economic performance of those investors or to any events, circumstances or risks affecting such investors.

The financial services and banking industry is evolving and changing with disruptive technologies and the introduction of new products and services. We derive a significant portion of our revenue from transaction-based fees we collect in connection with the origination of unsecured personal loans.loans and net interest income earned from retaining loans on our balance sheet. To enhance customer engagement and diversify our revenue streams, we are undertaking a strategy to broaden the scope of our products and services we offer. Failure to broaden the scope of our products and services leaves us dependent on a singlelimited number of revenue streamstreams and vulnerable to competitors offering a suite of products and services. Accordingly, a key part of our success depends on our ability to develop and commercialize new products and services and enhancements to existing products and services. For example, we recently announced an expansion into home improvement financing and failure to meet objectives with respect to this initiative may adversely impact our medium- and/or long-term business and financial results.

Liquidity is essential to our business. Although we believe that we currently have an adequate amount of liquidity to support our business, there are a number of factors that could reduce and/or deplete our existing liquidity position, including results of operations that are reduced relative to our projections, costs related to existing or future litigation or regulatory matters, the pursuit of strategic business opportunities (whether through acquisition or organic) and unanticipated liabilities. Additionally, as noted above, we are subject to stringent capital and liquidity regulations and requirements and need to manage our liquidity position at both LendingClub Corporation and LC Bank within the parameters and terms set forth by applicable regulations and regulators. LC Bank is subject to various legal, regulatory and other restrictions on its ability to make distributions and payments to the Company. Any inability to maintain an adequate liquidity position could adversely affect our operations, our compliance with applicable regulations and the performance of our business.

We are regularly subject to claims, individual and class action lawsuits, lawsuits alleging regulatory violations such as the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Unfair and Deceptive Acts and Practices (UDAP) or Unfair, Deceptive or Abusive Acts or Practices (UDAAP) violations, government and regulatory exams, investigations, inquiries or requests, and other proceedings involving consumer protection, privacy, labor and employment, intellectual property, privacy, data protection, cybersecurity, anti-money laundering, securities, tax, commercial disputes, record retention and other matters. The number and/or significance of these claims, lawsuits, exams, investigations, inquiries and requests have increased as our business has expanded in scope and geographic reach, and our products and services have increased in complexity. For example, we are subject to supervision, regulation, examination and enforcement by multiple federal banking regulatory bodies. Specifically, as a bank holding company, the Company is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the FRB. Further, as a national bank,bank with assets over $10 billion, LC Bank is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the OCC. Moreover, we currently anticipate becoming subject to supervisionOCC and enforcement by the CFPB in 2025.CFPB. Accordingly, we have been and continue to invest in regulatory compliance and to be subject to certain parameters, obligations and/or limitations set forth by the banking regulations and regulators with respect to the operation of our business. We are also subject to significant litigation and regulatory inquiries, as discussed more fully in “Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 19.18. Commitments and Contingencies,” below.

The scope, timing, outcome, consequences and impact of claims, lawsuits, proceedings, investigations, inquiries and requests that we are subject to cannot be predicted with certainty. Determining reserves for our pending litigation is a complex, fact-intensive process that requires significant judgment. Furthermore, resolution of such claims, lawsuits, proceedings, investigations, inquiries and requests could result in substantial fines, penalties or other monetary, injunctive or declaratory relief, which may materially and adversely affect our business. These claims, lawsuits, proceedings, exams, investigations, and requests could also: (i) result in reputational harm, criminal sanctions, consent decrees, and/or orders preventing us from offering certain features, functionalities, products or services, (ii) limit our access to credit, (iii) result in a modification or suspension of our business practices, (iv) require certain parameters, obligations and/or limitations with respect to the operation of our business, (v) require us to develop non-infringing or otherwise altered products or technologies, (vi) prompt ancillary claims, lawsuits, proceedings, investigations, inquiries and requests, (vii) consume financial and other resources which may otherwise be utilized for other purposes, such as advancing our products and services, (viii) cause a breach or cancellation of certain contracts, or (ix) result in a loss of customers, investors and/or ecosystem partners, any of which may adversely affect our business and operations. Furthermore, even following the resolution of any claims, lawsuits, proceedings, exams, investigations, inquiries and requests against us, a regulatory enforcement agency could take action against one or more individuals or entities, which may require us to continue to incur significant expense for indemnification for any such individual or entity until such matters may be resolved. Any of these consequences could materially and adversely affect our business.

We depend on our technology infrastructure to conduct and grow our business and operations and accordingly we invest in system upgrades, new solutions and other technology initiatives.initiatives, including artificial intelligence. Many of these initiatives take a significant amount of time to develop and implement, are tied to critical systems and require significant human and financial resources. While we take steps to mitigate the risks and uncertainties associated with these initiatives, these initiatives may not be implemented on time (or at all), within budget or without negative financial, operational or customer impact. Further, if and when implemented, these initiatives may not perform as we or our customers, marketplace investors and other stakeholders expect. We also may not succeed in anticipating or keeping pace with future technology needs, technology demands of our customers or the competitive landscape for technology. The failure to implement new and maintain existing technologies could adversely affect our business, financial condition and results of operations.

Our brand can be harmed in many ways, including failure by us or our partners to satisfy expectations of service and quality, inadequate protection of sensitive information, failure to maintain or provide adequate or accurate documentation and/or disclosures, compliance failures, failure to comply with contractual obligations, regulatory requests, inquiries or proceedings, litigation and other claims, employee misconduct and misconduct by our partners. We have also been, and may in the future be, the target of incomplete, inaccurate and/or misleading statements about our company, our business, and/or our products and services. Furthermore, our ability to maintain, protect and promote our brand is partially dependent on visibility and customer reviews on third-party platforms. Changes in the way these platforms operate could make the maintenance, protection and promotion of our products and services and our brand more expensive or more difficult. Further, as we pursue a potential rebranding initiative, it is possible that the rebrand may not resonate, and/or create confusion, with our customers and other stakeholders and thereby adversely impact our reputation, brand and/or the willingness of customers to do business with us.

We are subject to the risk of fraudulent activity associated with our marketplace bank, borrowers, depositors, investors and third parties handling borrower, depositor and investor information. We have taken measures to detect and reduce the risk of fraud, but these measures need to be continually improved and may not be effective against new and continually evolving forms of fraud, including fraud using artificial intelligence (AI), which may make fraud detection more difficult, or in connection with new product offerings. Further, the increasing use of near real-time money movement solutions increases the complexity of preventing, detecting and recovering fraudulent transactions. Under our agreements with marketplace investors, we are obligated to repurchase loans in cases of confirmed identity theft. The level of our fraud charge-offs and our results of operations could be materially and adversely affected if fraudulent activity were to significantly increase. High profile fraudulent activity or significant increases in fraudulent activity could lead to regulatory intervention, negatively impact our operating results, brand and reputation and lead us to take steps to reduce fraud risk, which could increase our costs.

We operate a marketplace bank platform for consumer credit, balancing borrower demand for loans against investor demand for risk-adjusted returns. We offer credit to borrowers across a range of credit profiles and rates, and we offer loan purchase and investment opportunities across a range of risk-adjusted returns. Investor demand on our platform is sensitive to a variety of factors including loan performance, alternative investment opportunities and macroeconomic conditions. To aid our ability to forecast investor demand, from time to time, we may enter into agreements with marketplace investors that outline expected purchases. However, these order agreements are generally non-binding or contain provisions that allow for modification and/or cancellation of the order. Therefore, it is challenging to precisely forecast investor demand. In the event that borrower demand at a given credit rate exceeds marketplace investor demand for that product for a given period, we may fund the loans and hold them on our balance sheet, which carries certain risks. See the risk factor “Holding loans on our balance sheet exposes us to credit, default and liquidity risks, which may adversely affect our financial performance.”

Alternatively, in the event that marketplace investor demand at a given return exceeds borrower demand for that product for a given period, there may be insufficient inventory to satisfy the investor demand. If marketplace investors do not believe their demand can be met on our platform, they may seek alternative investments from ours and our business may suffer.

•difficulties in implementing and maintaining uniform standards, controls, procedures and policies within the combined organizationorganization, including if the acquired business does not have adequate controls, procedures and policies;

Any challenge to or adverse consequence from our prior use of the issuing bank partnership model (or litigation or legislation aimed at thwarting certain transactions based on this model) may harm our business.

For example, in May 2015, the U.S. Court of Appeals for the Second Circuit issued its decision in Madden v. Midland Funding, LLC that interpreted the scope of federal preemption under the National Bank Act and held that a nonbank assignee of a loan originated by a national bank may not be entitled to the benefits of federal preemption of claims of usury. The Second Circuit’s decision is binding on federal courts located in Connecticut, New York, and Vermont, but the decision could also be adopted by other courts. However, in 2020, the OCC issued a final rule clarifying that interest on a loan that is lawful under federal law for national banks and federal savings associations remains lawful upon the sale, assignment or other transfer of the loan (the OCC Rule). The FDIC issued a similar final rule in 2020 applicable to FDIC-insured state-chartered banks (the FDIC Rule). Since these final rules, several federal district courts have declined to follow the decision of the U.S. Court of Appeals for the Second Circuit in Madden v. Midland Funding, LLC, including in Colorado, Massachusetts and New York. On February 8, 2022, a federal district court granted summary judgment in favor of the OCC and FDIC in lawsuits brought by multiple states seeking to invalidate the OCC Rule and FDIC Rule (California, et al. v. The Office of the Comptroller of the Currency, et al., No. 4:20-cv-05200-JSW (N.D. Cal.); California, et al. v. Federal Deposit Insurance Corporation, No. 4:20-cv-05860-JSW (N.D. Cal.)).While we believe that our prior use of the issuing bank model was appropriate and factually distinguishable from the decision of the U.S. Court of Appeals for the Second Circuit in Madden v. Midland Funding, LLC, the case could create potential liability under state statutes such as usury statutes. Further, state legislatures may enact new laws or amend existing laws aimed at undermining the ability of non-bank purchasers of loans to realize the outcome of a bank’s ability to export interest rates.

Any challenge to or adverse consequence of our prior use of the issuing bank partnership model could adversely affect our business, financial condition and results of operations.

The U.S. economy has been undergoing a period of rapid change and significant uncertainty. A number of factors have been causing this change and uncertainty, including changing inflation and interest rates, evolving government policies and changing U.S. consumer spending patterns. Inflation reached a 40-year high of 9.1% in June 2022, and in response the FRB increased interest rates eleven times since early 2022, from a federal funds rate range of 0.00% to 0.25% in early 2022 to 5.25% to 5.50% in July 2023. While the FRB has since reduced rates to a range of 4.25%3.50% to 4.5%3.75% as of December 2024,2025, it has indicated a willingness to adjust rates, including slowing the pace of rate decreases or increasing rates, as it deems necessary to combat inflation. ElevatedFurther, Federal economic policy is rapidly evolving and thereby creating uncertainty. For example, the establishment of, and subsequent revision(s) to, the Federal global tariff policy in 2025 was followed by market volatility and uncertainty in part due to the potential for tariffs to raise prices and thereby fuel increasing inflation and, subsequently, interest rates. Uncertainty with respect to tariffs, and the potential of elevated inflation and interest rates,rates andon uncertaintyU.S. with respect to future interest rate decreases,consumers, are also changing lending and spending patterns,patterns and thereby prompting some concern that the U.S. could experience an economic downturn or prolonged period of slow economic growth.

Our business is sensitive to, and may be adversely impacted by, uncertainty with respect to and changes in the inflation and interest rate environment. Among other things, as inflation and interest rates areincrease and/or remain elevated: (i) existing borrowers may allocate more of their income to necessities such as housing and food, thereby potentially increasing their risk of default by reducing their ability to make loan payments, which may warrant, and has in the past warranted, that we take additional provision for credit losses, (ii) the rate we offer on our deposit products may be elevated to remain competitive, thereby increasing our cost of funding and reducing our net interest margin, (iii) the return our loan products generate may be less attractive relative to other investment options, thereby reducing marketplace investor demand in our loan products, and (iv) we may need to increase interest rates and/or tighten credit standards for new originations, thereby potentially making it more challenging to source enough interested and qualified borrowers to enable sufficient origination volume. Further, the pace of changes in inflation and interest rates can create unique challenges in our ability to operate our business. For example, the rapid increase in interest rates in 2022 and 2023 quickly increased the cost of capital for our non-bank marketplace investors and thereby increased their return expectations. However, because our consumer loans are fixed interest rate products, we were unable to re-price existing loans, and with respect to new originations, we needed to re-price methodically to remain competitive and mitigate the adverse impacts of doing so. Therefore, until the interest rate environment stabilized, we were temporarily challenged to fully meet the return expectations for certain of our marketplace investors which adversely impacted our marketplace volume and related revenue.

Additionally, uncertainty regarding the economic environment could adversely impact borrower or marketplace investor interest in our products, adversely impact our third-party vendors, cause us to change, postpone or cancel our strategic initiatives, or otherwise negatively affect our business, financial condition and results of operations. Notably, the recent changes in the U.S. presidential administration and the composition of the U.S. Congress are expectedleading to lead to potentially significant changes to the priorities, scope, practices and/or staffing levels of various governmental agencies. For example, in February 2025, the current presidential administration directed the CFPB to, among other things, suspend rule implementations and cease supervision activities. However, what additional changes will be made, whether the changes will be retained and the effect of the changes on the economic environment are currently uncertain and therefore the impact of the changes on our customers and business remains uncertain.

We offer loan products with both fixed and variable interest rates, depending on the type of loan. If interest rates rise, potential borrowers could seek to defer taking new loans as they wait for interest rates to decrease and/or settle, and borrowers of variable rate loans may be subject to increased interest rates, which could increase default risk. If interest rates decrease after a loan is made, existing borrowers may prepay their loans to take advantage of the lower rates and we may have to redeploy the proceeds into new loans at lower interest rates. Furthermore, marketplace investors would lose the opportunity to collect the higher interest rate payable on the corresponding loan and may delay or reduce future loan investments.

Notwithstanding the above, we monitor interest rates and have certain avenues to manage our interest rate risk exposure, including changing the interest rate offered on deposits and the interest rate on our loan products. If our interest rate risk management strategies are not appropriately monitored or executed, or if borrower or depositor behavior or overall economic conditions are significantly different than we expect, then these activities may not effectively mitigate our interest rate sensitivity or have the desired impact on our results of operations or financial condition.

As a marketplace bank, we believe our customers are highly susceptible to uncertainties and negative trends in the markets driven by, among other factors, general social and economic conditions in the United States, abroad and the regional areas where our customers reside. Economic factors include interest rates, unemployment levels, tax and tariff rates, the impact of a federal government shutdown, natural disasters, public health emergencies, pandemics, gasoline prices, adjustments in monthly payments, adjustable-rate mortgages and other debt payments, the rate of inflation, relative returns available from competing investment productsproducts, economic downturns, periods of slow economic growth and consumer perceptions of economic conditions. Social factors include changes in consumer confidence levels and changes in attitudes with respect to incurring debt and the stigma of personal bankruptcy.

These social and economic factors may impact demand for our products and services, including our loans, and may affect the ability or willingness of borrowers to make payments on their loans. Because we pass through collected borrower payments to marketplace investors or we make payments to these investors ratably only to the extent we receive the borrower’s payments on the corresponding loan, if we do not receive payment(s) on the corresponding loan, the investor will not be entitled to the corresponding amount(s) or payment(s) under the terms of the investment or whole loan purchase agreement. For example, elevated inflation and/or interest rates may cause borrowers to allocate more of their income to necessities, such as housing and food, thereby potentially increasing their risk of default by reducing their ability to make loan payments.

In some circumstances, economic and/or social factors could lead a borrower to pre-payprepay their loan obligations. In the event of a prepayment, while the marketplace investor would receive the return of principal, interest would no longer accrue on the loan. Accordingly, the return for the investor would decline as compared to a loan that was timely paid in accordance with its amortization schedule. There is no penalty to borrowers if they choose to pay their loan early.

Similarly, any adverse impact on the ability of borrowers to make loan payments and/or material increase in pre-paymentprepayment rates may also have a material impact on the net interest income we earn for loans held on our balance sheet.

Our business and financial results are also significantly affected by the fiscal and monetary policies of the U.S. government and its agencies. We are particularly affected by the policies of the FRB, which regulates the supply of money and credit in the United States in pursuit of maximum employment, stable prices, and moderate long-term interest rates. The FRB and its policies influence the availability and demand for loans and deposits, the rates and other terms for loans and deposits, the conditions in equity, fixed-income, currency, and other markets, and the value of securities and other financial instruments. For example, in response to elevated inflation, the FRB increased interest rates eleven times since early 2022, from a federal funds rate range of 0.00% to 0.25% in early 2022 to 5.25% to 5.50% in July 2023. While the FRB has since reduced rates to a range of 4.25%3.50% to 4.5%3.75% as of December 2024,2025, it has indicated a willingness to adjust rates, including slowing the pace of rate decreases or increasing rates, as it deems necessary to combat inflation. Further, it is difficult to predict changes to fiscal and monetary policies by the current U.S. Congress and presidential administration. New appointments to the FRB could affect monetary policy and interest rates. Further, future legislation, regulation and changes in trade and fiscal policy could affect the banking industry and our business and financial results in ways that are difficult to predict.

Our business operations are subject to interruption by, among other things, political events, terrorism, military conflict or acts of war (including the conflicts in Ukraine and the Gaza Strip),war, cyber-attacks, public health issues, natural disasters, severe weather, climate change (including longer-term shifts in climate patterns, such as extreme heat, sea level rise and more frequent and prolonged drought), infrastructure failure or outages (including power outages), labor disputes and other events which could: (i) decrease demand for our products and services, (ii) adversely affect the macroeconomy and/or our customers, or (iii) make it difficult or impossible for us to deliver a satisfactory experience to our customers. Any such events could also affect the Company by impacting the stability of our deposit base, impairing the ability of our borrowers to repay their outstanding loans, causing significant property damage or otherwise impair the value of collateral securing our loans, and/or resulting in loss of revenue and/or causecausing us to incur additional expenses. While we may undertake measures indicated to mitigate the adverse impacts of such events, there are no assurances that any of the measures we take will be sufficient or successful.

Furthermore, in the event of any disruption to our operations or those of the companies with whom we do business with,business, we could experience delays in product development, marketing, operations and customer service efforts, incur significant losses, require substantial recovery time and experience significant expenditures in order to resume or maintain operations, any of which could have a material adverse impact on our business, financial condition and results of operations.

Finally, geopolitical conflicts such as the Ukrainian-Russian conflict and the conflict in the Gaza Strip as well as natural disasters such as the 2025 Los Angeles area wildfires, and their impacts, have had, and may continue to have, the effect of heightening many of the other risks described in “Item 1A. Risk Factors” and elsewhere in our Annual Report, such as escalating inflation, elevating the possibility of a decline in economic conditions and increasing cybersecurity risk.

Similarly, if any of these models contain programming or other errors, are ineffectiveineffective, or include misunderstood or incorrectly set assumptions or limitations, or the data provided by borrowers or third parties is incorrect or stale, our loan pricing and approval process could be negatively affected, resulting in mispriced or misclassified loans or incorrect approvals or denials of loans. If these errors were to occur, we may be obligated to repurchase the affected loans, marketplace investors may try to rescind their affected purchases or investments or decide not to purchase or invest in loans in the future or borrowers may seek to revise the terms of their loans or reduce the use of our marketplace bank platform for loans.

LendingClub operates a leading, nationally chartered, digital marketplace bank that aims to advantage our members with the information, tools, and guidance needed to achieve their own version of financial success. We do this through a smart, simple, and rewarding digital experience that leverages data and technology to increase access to credit, lowerreduce borrowing costs, and improve returns on savings.savings for our members.

The following is a summary of our results for the year ended December 31, 2024,2025 compared to the same period in 2023,2024, reflectreflecting growth in ourloan Balanceoriginations, Sheettotal asnet wellrevenue as an increase inand net income.

•Loan originations: Loan originations decreasedincreased $0.2$2.4 billion, or 3%,33%, for the year ended December 31, 20242025 compared to the same period in 2023.2024. The decreaseincrease was primarily driven by aan decreaseincrease in unsecured personal loan origination volume.

◦Loan originations held for investment (HFI) at amortized cost decreasedincreased $0.4$719.3 billion,million, or 21%,41%, for the year ended December 31, 20242025 compared to the priorsame year.period in 2024. Loan originations HFI at amortized cost as a percentage of loan originations was 26% and 24% for the years ended December 31, 2025 and 2024, respectively.

•Total net revenue: Total net revenue decreasedincreased $77.6$211.8 million, or 9.0%,27%, for the year ended December 31, 20242025 compared to the same period in 2023.2024.

•Total◦Marketplace non-interest expenserevenue: TotalMarketplace non-interestrevenue expenseincreased decreased$113.2 $22.8,million, or 4%,47%, for the year ended December 31, 20242025 compared to the same period in 2023.2024. The decreaseincrease was primarily due to ahigher decreaseorigination in headcount as a resultvolume of themarketplace workforceloans reductionand plansimproved weloan implementedsales in 2023.prices.

•◦Net interest income: Net interest income increased $12.4$91.6 million, or 32%,17%, for the year ended December 31, 20242025 compared to the same period in 2023.2024. The increase was primarily due to an increase in total interest-earning assets and lower deposit funding costs.

•Diluted◦Net earningsinterest per share (Diluted EPS)margin: DilutedNet EPSinterest was $0.45margin for the year ended December 31, 2024,2025 comparedwas to6.07%, $0.36increasing from 5.62% in the prior year.

•Pre-provisionNet net revenue (PPNR)income: PPNRNet income increased $84.3 million, or 164%, for the year ended December 31, 2024 decreased $54.8 million, or 18%,2025 compared to the same period in 2023.2024.

•Deposits: Total deposits as of December 31, 2024 increased $1.7 billion, or 24%, compared to the same period in 2023, primarily reflecting growth in our high-yield savings and certificates of deposit. ◦Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 87%88% of total deposits as of December 31, 2024.2025.

(54) Assets under management (AUM) reflects loans serviced on our platform, which includes outstanding balances of unsecured personal loans,loans and auto refinance loans and education and patient finance loans serviced for others and retained by the Company.Company as of the end of the periods presented.

(64) Calculated as annualized net charge-offs divided by average outstanding loans and leases HFI at amortized cost, net, during the period.

We elected to account for HFS loans under the fair value option. With the election of the fair value option, origination fees, net fair value adjustments prior to the sale of the loans, and servicing asset gains on the sales of the loans, are reported as separate components within “Marketplace revenue.”

Origination fees recorded as a component of marketplace revenue are primarily fees earned relatedcharged to originatingborrowers andin issuingconnection unsecuredwith personalthe origination of loans that are HFS.

Origination fees were $283.4$372.8 million and $279.1$283.4 million for the years ended December 31, 20242025 and 2023,2024, respectively, an increase of 2%.32%. The increase was primarily due to the increase in thehigher origination volumevolumes of marketplace loans.

We receive servicing fees to compensate us for servicing loans on behalf of marketplace investors, including managing payments from borrowers, collectionsborrowers and paymentsremittances to those investors. Servicing fee revenue related to loans sold also includes the change in fair value of servicing assets associated with the loans.

The tablestable below illustrate AUM serviced on our platform byillustrates the methodaverage in which the loans were financed asbalance of the periods presented. Loansloans sold and subsequently serviced on behalf of the investor represent a key driver ofon our servicingmarketplace feeplatform revenue.(in millions):

In connection with loan sales,sales to marketplace investors, we recognizecapitalize athe initial fair value of servicing rights. A gain or loss onis the sale of loansrecorded based on the level to which the contractual servicing fee is above or below an estimated market rate of servicing at the time of sale. Additionally, we recognize transaction costs, if any, as a loss on sale of loans.

Gain on sales of loans was $49.1$59.1 million and $47.8$49.1 million for the years ended December 31, 20242025 and 2023,2024, respectively, an increase of 3%.20%. The increase was primarily duedriven toby athe decreaseincrease in the volume of marketplace loans sold withas creditwell supportas agreementshigher comparedStructured toProgram thetransaction priorexpenses year.in 2024.

We record adjustments to the carrying value of loans, for which we have elected to account for under the fair value adjustmentsoption, onto loansreflect that are recorded attheir fair value,value. whichThese adjustments include gains or losses from sale prices in excess of or less than the loan principal amount sold and realized net charge-offs. In addition, as loans are held on the Balance Sheet, incremental fair value adjustments on the loans are recorded in “Net fair value adjustments” within “Marketplace revenue,” whereas the associated interest income is recorded within “Net interest income.”

Net fair value adjustments were $(154.7134.9) million and $(134.1154.7) million for the years ended December 31, 20242025 and 2023,2024, respectively, ana increaseddecreased loss of $20.5$19.7 million. The increased lossreduction was primarily drivendue to higher loan sale prices as well as a fair value benefit recognized in the second quarter of 2025 based on improved credit performance, partially offset by thean increase in the origination volume of marketplace loans. This was partially offset by higher loan sales prices compared to the prior year, resulting primarily from a decrease in interest rates.

Net fair value adjustments primarily consist of fair value adjustments on our loansHFS HFSloan portfolio. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 7. Fair Value Measurements” for additional information related to the significant unobservable inputs used in the fair value measurement of loans HFS and activity within the loans HFS portfolio.

An analysis of the year-over-year changes in the categories of interest revenueincome and interest expense resulting from changes in volume and rate is as follows:

The allowance for loan and lease losses (ALLL) for lifetime expected losses under CECL on HFI loans and leases HFI at amortized cost is initially recognized as “Provision for credit losses” at the time of origination. The ALLL is estimated using a discounted cash flow (DCF) approach, where effective interest rates are used to calculate the net present value (NPV) of expected cash flows. The effective interest rates are calculated based on the periodic interest income received from the loan’s contractual cash flows and the net investment in the loan, which includes deferred origination fees and marketing costs, to provide a constant rate of return over the loan term. The NPV from the DCF approach is then compared to the amortized cost basis of the loans and leases to derivedetermine expectedthe credit losses.ALLL. Under the DCF approach, the provision for credit losses in subsequent periods includes a credit loss expense related to the discounting effect due to the passage of time after the initial recognition of the ALLL on originated loans and leases HFI loans at amortized cost.

The provision for credit losses includes the credit loss expense for HFI loans and leases HFI at amortized cost, available for sale (AFS) securities and unfunded lending commitments. The table below illustrates the composition of the provision for credit losses for each period presented, as well as the loan originations held for investmentHFI in each period, which is a key driver for credit loss expense:

The provision for credit losses was $178.3$191.3 million and $243.6$178.3 million for the years ended December 31, 20242025 and 2023,2024, respectively, aan decreaseincrease of 27%.7%. The decreaseincrease was primarily driven by a decrease in the initial provision for credit losses from a lowerhigher volume of originated loans retained as HFI at amortized cost.cost, Inpartially addition,offset by a shift in the provision for credit losses in 2023 included a higher quantitative and qualitative allowance as a resultmix of anloans increasetoward intypes with lower expected losses and a less favorable economic outlook. The year over year decrease was partially offset by the impact of aan $8.0 million provision recognized in our2024 CRE portfolio duerelated to one legacy office loan,loan whichwithin was recognized in 2024. Excluding this one loan, theour CRE office loan portfolio balance was under $35 million as of December 31, 2024.portfolio.

The following table presents the components of the allowance for loan and lease lossesALLL:

The following table presents information regarding average loan and lease balances, net charge-offs and the ratio of net charge-offs to average outstanding loans and leases HFI at amortized cost, net, during the period:period. Net charge-offs are impacted by the expected timing of the charge-offs, anticipated recoveries and the age of the overall portfolio.

Loans and leases are generally placed on nonaccrual status when contractually past due 90 days or more, or earlier if management believes that the probability of collection does not warrant further accrual. Unsecured personal loans are generally charged-off nowhen latera thanborrower is contractually 120 days past due.

Non-interest expense primarily consists of (i) compensation and benefits, which include salaries and wages, benefits and stock-based compensation expense, (ii) marketing, which includes costs attributable to borrower and deposit customer acquisition efforts and building general brand awareness, (iii) equipment and software, (iv) depreciation and amortization, (v) professional services, which primarily consist of consulting feesfees, and (vi) occupancy, which includes rent expense and all other costs related to occupying our office spaces.

ProfessionalCompensation servicesand benefits expense decreasedincreased $3.1$9.7 million, or 9%,4%, for the year ended December 31, 20242025 compared to the same period in 2023.2024. The decreaseincrease was primarily due to aan decreaseincrease in consulting fees.headcount.

On June 22, 2026, we changed our corporate name from LendingClub Corporation to Happen, Inc., and the name of our wholly-owned banking subsidiary from LendingClub Bank, National Association to Happen Bank, National Association (Happen Bank). Happen, Inc. operates a leading, nationally chartered, digital marketplace bank that leverages data and technology to increase access to credit, reduce borrowing costs, and improve returns on savings for our members. Happen, Inc. is registered as a bank holding company and operates the vast majority of its business through its wholly-owned subsidiary, Happen Bank.

We delivered several financial achievements in the firstsecond quarter of 2026, including total net revenue of $252.3$262.9 million, an increase of 16%6% compared to the same period in the prior year. This growth was primarily driven by an increase in loan origination volumevolume, alongan withincrease higherin loan sales,sales improvedand loan sale pricing, andas awell as higher net interest margin.income due to an increase in total interest-earning assets. Net income grew to $51.6$58.1 million, with diluted EPS of $0.44,$0.50, compared to $11.7$38.2 million, with diluted EPS of $0.10,$0.33, in the prior year.

(1) Beginning in the first quarter of 2026, includes all loans originated during the respective periods (unsecured consumer loans, auto loans and small business loans). Previously this included unsecured consumer loans and auto loans only. In the first quarter of 2026, this update included $15 million of small business loan originations. Prior periods have been reclassified to conform to the current period presentation. See “Non-Interest Income” for additional information.

(2) Reflects loans serviced on our platform, which includes outstanding balances of unsecured consumer loans and auto loans serviced for others for which servicing rights are retained by the Company.

(1) As of MarchJune 31,30, 2026, Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 88% of total deposits.

(2) Excludes basis adjustment for loans previously designated in fair value hedges under the portfolio layer method of $0.8$0.4 million and $1.6 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

(4) Includes $307.0$309.9 million and $286.8 million in loans originated through the SBA as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

The following tabletables setsset forth the Income Statement data for each of the periods presented:

The analysis below is presented for the following periods: First quarter of 2026 compared to the fourth quarter of 2025 (sequential) and firstSecond quarter of 2026 compared to the first quarter of 2026 (sequential), second quarter of 2026 compared to the second quarter of 2025 (year over year) and first half of 2026 compared to the first half of 2025 (six months over six months).

The tablefollowing belowtables presentspresent net interest income information corresponding tofor interest-earning assets and interest-bearing funding sources.sources for the periods presented, as well as an analysis of changes in interest income and interest expense resulting from changes in volume and rate. The average yield/rate is calculated by dividing the annualized period-end interest income/expense by the average balance.

Origination fees are fees charged to borrowers in connection with the origination of a loan. As a result of our fair value option election, origination fees for newly originated HFI loans are now recognized in earnings at the time of origination, rather than being deferred and recognized over time under amortized cost accounting. Accordingly, origination fee revenue forbeginning in the first quarter of 2026 includes revenue from both HFI and HFS loan originations, whereas prior periods reflect HFS loan originations only.

The following tabletables presentspresent loan origination volume during each of the periods set forth below, as well as the volume of loans originated under the fair value option, which is a key driver of origination fee revenue:

Sequential: Origination fees were $130.1$164.0 million and $109.6$130.1 million for the second and first quarterquarters of 2026 and fourth quarter of 2025,2026, respectively, an increase of 19%.26%.

Year Over Year: Origination fees were $130.1$164.0 million and $69.9$87.6 million for the firstsecond quarter of 2026 and 2025, respectively, an increase of 86%.87%.

The increases in origination fees were primarily driven by higher HFI loan origination volume, including HFI loan originations which now contributescontribute to origination fee revenue following our election of the fair value option.

The tabletables below illustratesillustrate the average balance of loans sold and subsequently serviced on behalf of the investors on our marketplace platform (in millions):

In addition to the loans serviced on our marketplace platform, we serviced $38.3$37.2 million, $42.7$38.3 million and $93.1$52.8 million in outstanding principal balance of commercial loans sold as of MarchJune 31,30, 2026, December 31, 2025 and March 31, 2026 and June 30, 2025, respectively.

Year Over YearSequential: Servicing fees were $13.1$12.9 million and $12.7$13.1 million for the second and first quarterquarters of 2026 and 2025,2026, respectively, a decrease of 2%. The decrease was primarily driven by an increase of 3%. The increase was primarily due to the prior-year decrease in the fair value amortization of the servicing assetasset, basedpartially onoffset by higher futureservicing expected borrower prepayments, as wellfees as a higherresult of an increase in the average principal balance of loans serviced in the current period. This was partially offset by a reduction in servicing fees on delinquent loan collections.serviced.

The following tabletables presentspresent the unpaid principal balance of the volume of loans sold, which is a key driver of our gain on sales revenue, during each of the periods set forth below:

Sequential: Gain on sales of loans was $16.3$21.5 million and $15.5$16.3 million for the second and first quarterquarters of 2026 and fourth quarter of 2025,2026, respectively, an increase of 5%.32%.

Year Over Year: Gain on sales of loans was $16.3$21.5 million and $12.2$13.5 million for the firstsecond quarter of 2026 and 2025, respectively, an increase of 33%.59%.

The following tabletables presentspresent the volume of loans originated under the fair value option, which is a key driver of the initial recognition of fair value adjustments:

Sequential: Net fair value adjustments were $(88.9121.1) million and $(39.588.9) million for the second and first quarterquarters of 2026 and fourth quarter of 2025,2026, respectively, an increased negative fair value adjustment of $49.5$32.2 million.

Year Over Year: Net fair value adjustments were $(88.9121.1) million and $(29.327.9) million for the firstsecond quarter of 2026 and 2025, respectively, an increased negative fair value adjustment of $59.7$93.3 million.

The increases in net fair value adjustments were primarily driven by a higher volume of loans originated under the fair value option in the first quarter of 2026,option, resulting in greater initial fair value marks, as well as recurring fair value adjustments on a higher balance of loans measured at fair value.

Other non-interest income primarily consists of (i) rental income earned from third-party tenants under operating lease agreements and (ii) referral revenue that relates to fees earned from third-party companies when customers referred by us consider or purchase products or services from such third-party companies. The tabletables below illustratesillustrate the composition of other non-interest income for each period presented:

The activity in the allowance for credit losses (ACL) was as follows:

(21) Relates to $44.1$35.2 million, $52.0$44.1 million and $96.3$103.4 million of unfunded commitments as of MarchJune 31,30, 2026, December 31, 2025 and March 31, 2026 and June 30, 2025, respectively.

Year Over YearSequential: Compensation and benefits expense increased $7.1$2.7 million, or 12%,4%, for the firstsecond quarter of 2026 compared to the samefirst periodquarter inof 2025.2026. The increase in compensation and benefits expense was primarily due to an increase in headcount and variable compensation expense.

As a result of our fair value option election, marketing expenses associated with newly originated HFI loans are now recognized in current period earnings at the time of origination, rather than being deferred and recognized over time under amortized cost accounting. Accordingly, marketing expense for the first quarterhalf of 2026 includes costs associated with the origination of both HFI and HFS loans, whereas prior periods reflect only marketing expenses related to the origination of HFS loans.

Sequential: Marketing expense increased $9.7$7.2 million, or 21%,13%, for the firstsecond quarter of 2026 compared to the fourthfirst quarter of 2025.2026.

Year Over Year: Marketing expense increased $26.2$29.0 million, or 90%,86%, for the firstsecond quarter of 2026 compared to the same period in 2025.

The increases in marketing expense were primarily due to an increase in variable marketing expenses based on higher origination volume. In addition, marketing expense for 2026 includes the immediate recognition of marketing costs for newly originated HFI loans under the fair value option and an increase in variable marketing expenses based on higher origination volume.option.

Sequential: Equipment and software expense increasedremained $0.9relatively million, or 6%,flat for the firstsecond quarter of 2026 compared to the fourthfirst quarter of 2025.2026.

Year Over Year: Equipment and software expense increased $0.6$1.4 million, or 4%,9%, for the firstsecond quarter of 2026 compared to the same period in 2025.