v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
For a description of the fair value hierarchy and the Company’s fair value methodologies, see “Part II – Item 8. Financial Statements and Supplementary Data – Note 1. Summary of Significant Accounting Policies” in the Annual Report. The Company records certain assets and liabilities at fair value as listed in the following tables.
Recurring Fair Value Measurements

The following tables present, by level within the fair value hierarchy, the Company’s assets and liabilities measured at fair value on a recurring basis:
June 30, 2025
Level 1
Level 2
Level 3
Balance at
Fair Value
Assets:
Loans held for sale at fair value$— $— $1,008,168 $1,008,168 
Loans held for investment at fair value
— — 631,736 631,736 
Securities available for sale:
Senior asset-backed securities related to Structured Program transactions— — 2,962,475 2,962,475 
U.S. agency residential mortgage-backed securities— 227,617 — 227,617 
Other asset-backed securities related to Structured Program transactions— — 184,032 184,032 
U.S. agency securities— 75,134 — 75,134 
Mortgage-backed securities— 56,553 — 56,553 
Other asset-backed securities— 18,871 — 18,871 
Municipal securities— 2,460 — 2,460 
Total securities available for sale— 380,635 3,146,507 3,527,142 
Servicing assets— — 57,909 57,909 
Other assets— 1,968 — 1,968 
Total assets$— $382,603 $4,844,320 $5,226,923 
Liabilities:
Other liabilities$— $3,513 $5,851 $9,364 
Total liabilities$— $3,513 $5,851 $9,364 
December 31, 2024
Level 1
Level 2
Level 3
Balance at
Fair Value
Assets:
Loans held for sale at fair value$— $— $636,352 $636,352 
Loans held for investment at fair value
— — 1,027,798 1,027,798 
Securities available for sale:
Senior asset-backed securities related to Structured Program transactions— — 2,899,824 2,899,824 
U.S. agency residential mortgage-backed securities— 226,925 — 226,925 
Other asset-backed securities related to Structured Program transactions
— — 169,948 169,948 
U.S. agency securities— 75,946 — 75,946 
Mortgage-backed securities
— 56,674 — 56,674 
Other asset-backed securities— 20,792 — 20,792 
Municipal securities— 2,539 — 2,539 
Total securities available for sale— 382,876 3,069,772 3,452,648 
Servicing assets— — 60,697 60,697 
Other assets— 5,820 — 5,820 
Total assets$— $388,696 $4,794,619 $5,183,315 
Liabilities:
Other liabilities$— $5,019 $11,799 $16,818 
Total liabilities$— $5,019 $11,799 $16,818 

Financial instruments are categorized in the valuation hierarchy based on the significance of observable or unobservable factors in the overall fair value measurement. For the financial instruments listed in the tables above that do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of these assets and liabilities. The Company primarily uses a discounted cash flow (DCF) model to estimate the fair value of Level 3 instruments based on the present value of estimated future cash flows. This model uses inputs that are inherently judgmental and reflect the Company’s best estimates of the assumptions a market participant would use to calculate fair value. The Company did not transfer any assets or liabilities in or out of Level 3 during the second quarters and first halves of 2025 or 2024.

The following significant unobservable inputs, as applicable, were used in the fair value measurement of the Company’s Level 3 assets:
•Discount rate – The weighted-average rate at which the expected cash flows are discounted to arrive at the net present value of the loan. The discount rate is primarily determined based on marketplace investor return expectations.
•Annualized net charge-off rate – The annualized rate of average charge-offs, net of recoveries, expressed as a percentage of the average principal balance of loan pools with similar risk characteristics. The calculation of this annualized rate also incorporates a qualitative estimate of credit losses based on the Company’s current macroeconomic outlook.
•Annualized prepayment rate – The annualized rate of prepayments expressed as a percentage of the average principal balance of loan pools with similar risk characteristics.

An increase in each of the inputs above, in isolation, would result in a decrease in the fair value measurement.
The sensitivity calculations are hypothetical and should not be considered to be predictive of future performance. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Changes in one factor may lead to changes in other factors, which could impact the hypothetical results.

Loans Held for Sale at Fair Value

Significant Unobservable Inputs

The following significant unobservable inputs were used in the fair value measurement of loans HFS:
June 30, 2025December 31, 2024
MinimumMaximumWeighted-
Average		MinimumMaximumWeighted-
Average
Discount rate6.8 %13.9 %7.8 %7.1 %11.9 %7.9 %
Annualized net charge-off rate (1)
1.5 %17.3 %4.9 %1.8 %21.2 %5.4 %
Annualized prepayment rate (1)
18.0 %33.3 %24.0 %15.0 %27.6 %20.4 %
(1)    The weighted-average rate is calculated using the original principal balance of each loan pool.

Fair Value Sensitivity

The sensitivity of loans HFS at fair value to adverse changes in key assumptions was as follows:
June 30, 2025December 31, 2024
Loans held for sale at fair value
$1,008,168 $636,352 
Expected remaining weighted-average life (in years)
1.31.4
Discount rate:
100 basis point increase$(11,709)$(7,663)
200 basis point increase$(23,189)$(15,174)
Annualized net charge-off rate:
10% increase$(9,276)$(6,436)
20% increase$(18,585)$(12,937)
Annualized prepayment rate:
10% increase$(2,231)$(1,274)
20% increase$(4,058)$(2,444)
Fair Value Reconciliation

The following table presents loans HFS at fair value activity:
Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Fair value at beginning of period$703,378 $550,415 $636,352 $407,773 
Originations and purchases1,654,313 1,397,930 2,918,045 2,680,180 
Sales(1,217,166)(1,042,166)(2,314,095)(2,101,814)
Principal payments(101,107)(63,605)(169,662)(97,877)
Realized charge-offs, net of recoveries, recorded in earnings
(4,663)(4,205)(11,367)(8,436)
Fair value adjustments recorded in earnings(26,587)(47,310)(51,105)(88,767)
Fair value at end of period$1,008,168 $791,059 $1,008,168 $791,059 

The following table summarizes the aggregate fair value of the Company’s HFS loans, as well as the amount that was 90 days or more past due:
June 30, 2025December 31, 2024
Total90 or more
days past due		Total90 or more
days past due
Aggregate unpaid principal balance$1,034,287 $1,758 $657,984 $3,719 
Cumulative fair value adjustments(26,119)(1,426)(21,632)(3,012)
Fair value of loans held for sale
$1,008,168 $332 $636,352 $707 

Loans Held for Investment at Fair Value

Loans HFI at fair value consists primarily of purchased loan portfolios comprised of loans that the Company previously originated and sold. Due to the short remaining duration of the acquired loan portfolios, the Company has elected to account for them under the fair value option.

Significant Unobservable Inputs

The following significant unobservable inputs were used in the fair value measurement of loans HFI:
June 30, 2025December 31, 2024
MinimumMaximumWeighted-
Average		MinimumMaximumWeighted-
Average
Discount rate10.1 %12.8 %10.6 %7.2 %21.8 %10.5 %
Annualized net charge-off rate (1)
2.0 %19.8 %6.6 %3.0 %20.2 %6.6 %
Annualized prepayment rate (1)
13.4 %27.2 %19.8 %15.6 %21.4 %19.3 %
(1)    The weighted-average rate is calculated using the original principal balance of each loan pool.
Fair Value Sensitivity

The sensitivity of loans HFI at fair value to adverse changes in key assumptions was as follows:
June 30, 2025December 31, 2024
Loans held for investment at fair value$631,736 $1,027,798 
Expected remaining weighted-average life (in years)
0.80.9
Discount rate:
100 basis point increase$(4,137)$(7,832)
200 basis point increase$(8,224)$(15,557)
Annualized net charge-off rate:
10% increase$(6,350)$(11,821)
20% increase$(14,268)$(25,428)
Annualized prepayment rate:
10% increase$(2,700)$(4,813)
20% increase$(4,030)$(9,854)

Fair Value Reconciliation

The following table presents loans HFI at fair value activity:
Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Fair value at beginning of period$818,882 $420,393 $1,027,798 $262,190 
Purchases— 12,220 12,744 232,784 
Principal payments(184,327)(96,004)(402,787)(159,930)
Interest income accretion and fair value adjustments recorded in earnings
(2,819)(1,967)(6,019)(402)
Fair value at end of period$631,736 $334,642 $631,736 $334,642 

The following table summarizes the aggregate fair value of the Company’s HFI loans held at fair value, as well as the amount that was 90 days or more past due:
June 30, 2025December 31, 2024
Total90 or more
days past due		Total90 or more
days past due
Aggregate unpaid principal balance$667,444 $8,411 $1,097,511 $14,616 
Cumulative fair value adjustments(35,708)(6,821)(69,713)(11,836)
Fair value of loans held for investment$631,736 $1,590 $1,027,798 $2,780 
Asset-Backed Securities Related to Structured Program Transactions

Senior Asset-Backed Securities Related to Structured Program Transactions

Significant Unobservable Inputs

The following significant unobservable input, which includes credit spreads, was used in the fair value measurement of senior asset-backed securities related to Structured Program transactions:
June 30, 2025December 31, 2024
MinimumMaximumWeighted-
Average		MinimumMaximumWeighted-
Average
Discount rate5.7 %6.0 %5.8 %6.0 %6.0 %6.0 %

Fair Value Sensitivity

The sensitivity in the fair value of senior asset-backed securities related to Structured Program transactions to adverse changes in key assumptions was as follows:
June 30, 2025December 31, 2024
Fair value of interests held$2,962,475 $2,899,824 
Expected remaining weighted-average life (in years)
1.11.2
Discount rate:
100 basis point increase$(32,798)$(37,315)
200 basis point increase$(65,597)$(74,630)

Fair Value Reconciliation

The following table presents senior asset-backed securities related to Structured Program transactions activity:
Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Fair value at beginning of period$2,869,281 $1,765,259 $2,899,824 $1,176,403 
Additions495,771 716,299 819,887 1,413,646 
Cash received(398,286)(171,793)(749,951)(278,267)
Change in unrealized gain (loss)
(4,291)2,349 (7,285)332 
Fair value at end of period$2,962,475 $2,312,114 $2,962,475 $2,312,114 
Other Asset-Backed Securities Related to Structured Program Transactions

Significant Unobservable Inputs

The following significant unobservable inputs were used in the fair value measurement of other asset-backed securities related to Structured Program transactions:
June 30, 2025December 31, 2024
MinimumMaximumWeighted-
Average		MinimumMaximumWeighted-
Average
Discount rate6.8 %10.4 %7.7 %7.1 %11.0 %7.9 %
Annualized net charge-off rate (1)
4.2 %5.4 %4.8 %3.4 %7.4 %5.0 %
Annualized prepayment rate (1)
22.8 %24.8 %24.2 %18.7 %20.9 %20.5 %
(1)    The weighted-average rate is calculated using the original principal balance of each security.

Fair Value Sensitivity

The sensitivity in the fair value of other asset-backed securities related to Structured Program transactions to adverse changes in key assumptions was as follows:
June 30, 2025December 31, 2024
Fair value of interests held$184,032 $169,948 
Expected remaining weighted-average life (in years)
1.21.3
Discount rate:
100 basis point increase$(1,924)$(1,909)
200 basis point increase$(3,812)$(3,783)
Annualized net charge-off rate:
10% increase$(1,633)$(1,778)
20% increase$(3,280)$(3,567)
Annualized prepayment rate:
10% increase$(494)$(432)
20% increase$(885)$(835)

Fair Value Reconciliation

The following table presents other asset-backed securities related to Structured Program transactions activity:
Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Fair value at beginning of period$172,544 $103,866 $169,948 $73,393 
Additions35,738 43,887 60,624 86,625 
Cash received(24,622)(12,735)(45,925)(22,066)
Credit loss expense (benefit) for securities available for sale
819 809 (502)(2,083)
Change in unrealized gain (loss)
(447)(282)(113)(324)
Fair value at end of period$184,032 $135,545 $184,032 $135,545 
Servicing Assets

Significant Unobservable Inputs

The following significant unobservable inputs were used in the fair value measurement for servicing assets related to loans sold to investors:
June 30, 2025December 31, 2024
MinimumMaximumWeighted-
Average		MinimumMaximumWeighted-
Average
Discount rate8.7 %17.3 %10.7 %8.7 %17.3 %10.8 %
Annualized net charge-off rate (1)
1.5 %20.1 %6.7 %1.8 %21.2 %8.2 %
Annualized prepayment rate (1)
16.9 %32.8 %21.7 %14.8 %27.5 %20.0 %
Market servicing rate (2)
0.62 %0.62 %0.62 %0.62 %0.62 %0.62 %
(1)    The weighted-average rate is calculated using the original principal balance of each loan pool.
(2)    The fees a willing market participant would require for the servicing of loans with similar characteristics as those in the Company’s serviced portfolio.

Fair Value Sensitivity

The sensitivity of the fair value of servicing assets to adverse changes in key assumptions was as follows:
June 30, 2025December 31, 2024
Fair value of servicing assets$57,909 $60,697 
Expected remaining weighted-average life (in years)
1.21.2
Discount rate:
100 basis point increase$(546)$(519)
200 basis point increase$(1,092)$(1,038)
Annualized net charge-off rate:
10% increase$(504)$(551)
20% increase$(1,008)$(1,102)
Annualized prepayment rate:
10% increase$(1,612)$(1,359)
20% increase$(3,224)$(2,718)

The Company’s selection of the most representative market servicing rates for servicing assets is inherently judgmental. The Company reviews third-party servicing rates for its loans, loans in similar credit sectors, and market servicing benchmarking analyses provided by third-party valuation firms, when available. The table below shows the impact on the estimated fair value of servicing assets, calculated using different market servicing rate assumptions:
June 30, 2025December 31, 2024
Weighted-average market servicing rate assumptions
0.62 %0.62 %
Change in fair value from:
Market servicing rate increase by 0.10%
$(6,788)$(6,940)
Market servicing rate decrease by 0.10%
$6,788 $6,940 
Fair Value Reconciliation

The following table presents servicing assets activity:
Three Months Ended
June 30,		Six Months Ended
June 30,
2025202420252024
Fair value at beginning of period$56,904 $71,830 $60,697 $77,680 
Issuances (1)
14,670 13,759 27,935 27,337 
Change in fair value, included in Marketplace revenue(13,665)(15,868)(30,723)(35,296)
Other net changes— (12)— (12)
Fair value at end of period$57,909 $69,709 $57,909 $69,709 
(1)    Represents the servicing assets recorded when the loans are sold. Included in “Gain on sales of loans” within “Marketplace revenue” on the Income Statement.

Financial Instruments Not Recorded at Fair Value

The following tables present the carrying amount and estimated fair values, by level within the fair value hierarchy, of the Company’s assets, and liabilities that are not recorded at fair value on a recurring basis:
June 30, 2025Carrying Amount
Level 1
Level 2
Level 3
Balance at
Fair Value
Assets:
Loans and leases held for investment, net$4,133,332 $— $— $4,342,825 $4,342,825 
Other assets42,299 — 42,077 541 42,618 
Total assets$4,175,631 $— $42,077 $4,343,366 $4,385,443 
Liabilities:
Deposits (1)
$1,898,714 $— $— $1,898,699 $1,898,699 
Other liabilities45,646 — 21,089 24,557 45,646 
Total liabilities$1,944,360 $— $21,089 $1,923,256 $1,944,345 
December 31, 2024Carrying Amount
Level 1
Level 2
Level 3
Balance at
Fair Value
Assets:
Loans and leases held for investment, net$3,889,084 $— $— $4,051,497 $4,051,497 
Other assets40,466 — 40,143 661 40,804 
Total assets$3,929,550 $— $40,143 $4,052,158 $4,092,301 
Liabilities:
Deposits (1)
$2,294,214 $— $— $2,306,373 $2,306,373 
Other liabilities44,801 — 22,833 21,968 44,801 
Total liabilities$2,339,015 $— $22,833 $2,328,341 $2,351,174 
(1)    Excludes deposit liabilities with no defined or contractual maturities.