Good afternoon. Thank you for attending today's LendingClub Fourth Quarter 2022 Earnings Conference Call. My name is Megan, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to our host, Sameer Gulati, with LendingClub. Please go ahead. Thank you and good afternoon. Welcome to LendingClub's Fourth Quarter and Full year 2022 Earnings Conference Call. Joining me today to talk about our results and recent events are Scott Sanborn, CEO, and Drew LaBenne, CFO. You can find the presentation accompanying our earnings release on the investor relations section of our website. On the call, in addition to questions from analysts, we will also be answering some of the questions that were submitted for consideration via email. Our remarks today will include forward-looking statements that are based on our current expectations and forecasts and involve risks and uncertainties. These statements include, but are not limited to our competitive advantages and strategy, macroeconomic conditions and outlook, platform volume, future products and services, and future business loan and financial performance. Our actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are described in today's press release and our most recent Forms 10-K and 10-Q as filed with the SEC, as well as our subsequent filings made with the Securities and Exchange Commission, including our upcoming Form 10-K. Any forward-looking statements that we make on this call are based on assumptions as of today. We undertake no obligation to update these statements as a result of new information or future events. Our remarks also include non-GAAP measures relating to our performance, including tangible book value per common share and pre-provision net revenue. We believe these non-GAAP measures provide useful supplemental information. You can find more information on our use of non-GAAP measures and a reconciliation to the most directly comparable GAAP measures in the presentation accompanying our earnings release. Now I'd like to turn the call over to Scott. All right. Thanks, Sameer. Welcome, everyone. We closed out 2022 with solid results. Both revenue and earnings were near the high end of our guidance range. Importantly, we took action to position the company well to navigate current headwinds. The power of our evolving model is evident in our numbers. Our growing stream of net interest income offset the anticipated decline in marketplace revenue and enabled us to deliver total revenue in line with fourth quarter of 2021, despite a decline in loan originations. For the full year, we generated 45% revenue growth and a record $290 million in net income, or $146 million after you exclude tax benefits from the release of our valuation allowance. We invested our strong marketplace earnings back into our balance sheet, doubling the size of our held for investment loan portfolio, which allowed us to more than double our net interest income. These results begin to provide a sense of the power of this business over the long term. Our goal, when the environment stabilizes, is to continue to grow the bank balance sheet and the corresponding interest income revenue stream, with marketplace revenue acting as a capital-light earnings complement as well as a compelling membership growth driver. To reach this destination, we first need to navigate through the current environment. We have plans to do just that. While it's unclear where exactly the Fed and the U.S. economy would land, we remain focused on what we can control and are positioning ourselves to best manage through the uncertainty. Our focus is on three key areas. One, continuing to prudently manage credit quality through the cycle. Two, preserving profitability and maintaining a strong balance sheet. Three, being practical and focused in our products and technology investments. Starting with credit, where we will remain laser-focused on managing credit risk for both our marketplace investors and ourselves. I note the loans we hold on our balance sheet representing prime and high prime customers are continuing to perform well, as you'll see on pages 16 and 17 in our presentation. For loans sold through the marketplace, we are pursuing quality over quantity. As we have spoken about for several quarters, the rate environment is putting pressure on marketplace volumes as the relative value we can provide is compressed until we can reprice our loans to reflect the dramatic increase in cost of funds for especially our non-bank investors. In this higher rate, lower volume environment, we have both the responsibility and the opportunity to be selective on credit. Our delinquencies have outperformed industry averages, but we need to remain vigilant and proactive. We anticipated and have seen pressure on our members, most notably in near-prime, and especially among those consumers with lower incomes. We are also seeing a dynamic pace of change in areas like savings rates and prepayment speeds. A core strength for LendingClub is our ability to use our data advantage and our technology infrastructure to quickly adapt to emerging signals. Accordingly, we were proactive to begin tightening early in 2022 and have continued to tighten our underwriting throughout the year. For reference, our 4th quarter near-prime volumes are down more than 50% from their peak. Longer term, the opportunity to grow personal loans remains significant. With credit card balances building at an over 20% average APR, even more consumers will benefit by refinancing their high-cost credit card debt into a fixed-rate installment loan. As interest rates stabilize and the U.S. economy regains its footing, we expect our marketplace volumes to rebound. Our second key objective is to maintain profitability and a strong balance sheet. We recently announced the difficult decision to streamline our operations to better align our expense base to our outlook. We also bolstered our net interest income by acquiring a large portfolio of seasoned, high-quality loans from one of our marketplace investors. In the near term, we expect marketplace revenue to be under pressure until the Fed slows or ideally stops with rate hikes. At the same time, we plan to maintain a stable interest income revenue stream by keeping the balance sheet at roughly its current size. Our final area of focus is to continue to prudently invest in the core product and technology capabilities that will create more value for our 4.5 million members. While we remain committed to our long-term vision, we are slowing down the pace of our investment. Our intent in 2023 is to put the building blocks in place that will support future growth opportunities as we come out of the current environment. Certainly, we will remain mindful of the macroeconomy and will continue to adjust the pace of our investment as needed. I'm going to turn it over to Drew now to walk you through the detailed financial results and our outlook. Thanks, Scott. Hello, everyone. Let me take you through our financials in greater detail, starting with originations and our balance sheet. Originations for the quarter were $2.5 billion compared to $3.1 billion in the prior year and $3.5 billion in the third quarter of 2022. As Scott discussed earlier, originations were impacted by a combination of higher interest rates curtailing investor demand for loan purchases and our continued discipline in underwriting to maintain strong credit quality. As we deployed capital to retain more of our highly profitable personal loans, we showed significant growth in the balance sheet compared to the previous quarter and over the course of 2022. Total assets increased 63% year-over-year to $8 billion in Q4, with our held-for-investment loan portfolio up 104% over the same period, primarily due to growth in personal loans. We also grew deposits 104% year-over-year now that we have scaled the online banking platform that we acquired. Since the closing of the Radius acquisition in the first quarter of 2021, we have grown the bank from $2.7 billion in assets to $7.6 billion in assets, which is a compounded annual growth rate of over 70% and firmly highlights the benefits of bringing LendingClub's strength of loan originations together with the digital banking model. Earlier, Scott mentioned the portfolio we acquired in December. We are accounting for the portfolio under the fair value option as the short remaining duration and high credit quality should limit volatility around its expected performance. We expect this portfolio to generate very attractive returns and have broken it out separately in the net interest margin table in our earnings materials. On to revenue. Total revenue was essentially flat year-over-year as net interest income growth of 63% was offset by a 29% decline in non-interest income. Revenue decreased sequentially by $42 million, reflecting lower originations sold through the marketplace and the price on those sales. Our decision to increase loan retention in 2022 has enhanced the resiliency of our franchise during a more difficult environment for the marketplace. Net interest margin increased to 7.8% from 7.6% in the prior year period due to an increase in the proportion of higher-yielding consumer loans on the balance sheet. As expected, we saw a sequential drop from 8.3% in the third quarter of 2022, primarily due to the current lag between our ability to pass along higher interest rates on new personal loans relative to the repricing of online deposits. We expect the net interest margin to decline again in the first quarter of 2023 as these trends continue and for the pressure to abate should the Fed slow rate increases or stop them altogether. Total non-interest expense for the quarter improved $8 million compared to the same quarter in 2021 and was a reduction of $6 million from the previous quarter. Compensation and benefits expense included $4.4 million in severance charges from the previously announced expense reduction plan. Marketing efficiency was better than expected given the use of more efficient channels and lower competitive pressure. Marketing expenses improved by $11 million compared to the third quarter, primarily reflecting lower origination volumes. Our consolidated efficiency ratio moved to 68.5% from 61% in the third quarter as revenues decreased sequentially. As Scott discussed, the reduction in staff was a difficult decision, but necessary given the more challenging near-term outlook. The reductions will generate $25 million-$30 million of annual run rate savings in compensation and benefits. These savings came primarily from an improved efficiency in our management structure, a slowdown in some strategic initiatives, and ceasing originations in two commercial businesses, commercial real estate and equipment finance, that we acquired from Radius. We will take the remaining severance charge of $1.3 million in the first quarter. Slide 15 shows the pre-provision net revenue for PPNR and the net income for the quarter, along with other metrics. In 2023, we will move to PPNR as the key metric, which provides a better gauge on income statement performance. PPNR is a useful measure for evaluating the underlying performance of our company without the quarterly volatility caused by credit loss provisioning. For the fourth quarter, we had PPNR of $82.7 million, which increased 12% compared to the same quarter in 2021. We remain pleased with the performance of credit in our portfolio. Our provision for credit losses was $62 million, $21 million lower than the previous quarter, primarily due to a decrease in the dollar amount of loan originations held off-balance sheet. Our allowance coverage ratio, excluding PPP loans, increased to 6.6% from 6.4% in the previous quarter due to the effect of ongoing recognition of provision expense for discounted lifetime losses at origination. In the fourth quarter, our tax rate again benefited from a reversal of our remaining valuation allowance as well as R&D tax credits. For the quarter, we had a tax benefit of $2.4 million. As we enter 2023, we expect less volatility in taxes, and the tax rate is expected to be approximately 28%. Other factors such as share price movement will continue to impact our reported tax rate going forward on a quarter-to-quarter basis. Tangible book value per common share grew 35% year-over-year to $10.06 per share at the end of the fourth quarter. We have maintained strong capital ratios on top of a significant allowance for credit losses. This positions us to better navigate through the current environment and provide the ability to strategically deploy capital as opportunities arise. Please turn to page 16, where we have provided you with an update to the 30-plus day delinquencies of our prime personal loan servicing portfolio, as well as our held-for-investment personal loan portfolio. You will see that credit quality in the prime servicing portfolio continues to normalize as the portfolio seasons and new origination growth slows in the marketplace. The same effect is also true of our own HFI portfolio. We expect this trend will continue given the lower level of originations in the near term. Given that changing growth trends and seasoning are creating comparability issues with historical data, we are now planning to provide this slide in the future. On the next page, we have provided more detailed disclosure on our loss expectations, which we believe provides a cleaner view of performance. On slide 17, you can see credit performance of personal loans on our balance sheet by vintage. We expect the lifetime loss of the 2021 and 2022 vintages to be up to 8% and 8.7% respectively. The estimate for both vintages includes qualitative provisions for the uncertain economic environment. The 2021 vintage delivered very strong credit performance given the effect of government stimulus during the pandemic. The 2022 vintage reflects a move to a higher quality mix of credit, but also a normalization of credit trends. We expect annualized net credit losses to be approximately 5% over the life of the 2022 vintage, but that could vary if economic conditions deteriorate significantly. For each vintage, we are providing the breakout of how much in charge-offs have been realized as of the end of 2022, how much of future losses have already been reserved for in our allowance for credit losses, and how much remaining provision we estimate we will take through the income statement, which mainly represents the day one CECL discounting coming through the provision expense over time. If we look at the net interest margin and factor in variable expenses and annualized credit losses, we expect post-tax levered returns in the low to mid-30% range. These returns are the reason we plan to invest our available earnings into growing the balance sheet. Now let's move to guidance and how we're thinking about 2023. Given the broader macroeconomic uncertainty, we are moving to quarterly guidance. For the first quarter, our origination outlook is $1.9 billion-$2.2 billion, reflecting prudent underwriting and the rate-driven pressure on marketplace demands. We plan to maintain the size of our HFI balance sheet. Therefore, we expect to retain 30%-40% of our loan originations for the quarter. For marketplace originations we sell, we expect unit economics in line with the fourth quarter. We plan to maintain positive net income levels and invest in period earnings into loan retention to support future earnings. As we reinvest our capital, we will maintain a disciplined approach to underwriting to drive credit performance and required returns. In 2023, we want to maintain flexibility to grow the balance sheet when we generate excess earnings available for investment. The impact of the day one CECL charge on loan retention can have a significant impact on earnings. With this in mind, we have evolved our focus to pre-provision net revenue, which is a more relevant guidance metric for financial services companies using CECL accounting. Our outlook using PPNR is $55 million-$70 million for the first quarter. With that, let me turn it back to Scott for closing comments. Thank you, Drew. Clearly, the multiple economic variables that are at play here have affected our near-term outlook. I do believe we've positioned the company well, and that we have strategic and structural advantages that will help us outperform over time. As we finish off the year, I just wanted to take a step back to recap the progress we've made since we acquired the bank. In two years, we have completely transformed the financial profile of the business. We've more than doubled the balance sheet, cut tens of millions in issuance costs. Added a new recurring revenue stream that represents almost half of our quarterly revenue, and we've significantly grown our equity. These strong fundamentals will help us manage through what will ultimately be temporary headwinds. As interest rates stabilize and credit card balances and APRs remain at or near record highs, we believe that our core business of credit card refinancing will be well-positioned to quickly resume growth and drive marketplace revenue. With that, I wanted to say a sincere thanks to all of my fellow LendingClubbers, both those who are with us today and those who we recently had to say goodbye to for their contributions to our company and to our customers. That's it. Thanks again for your time, and I'll open it up for questions. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. Our first question comes from the line of Bill Ryan with Seaport Research. Your line is now open. Thanks for taking my question. Starting with kind of the guidance I was looking at it, you have PPNR of $55 million-$70 million, and you look at it with your originations of $1.9 billion-$2.2 billion. You take a midpoint. Your reserve on the consumer portfolio was, I believe, provision was 8.8% of retained origination. You know, assuming that math, it looks like you might be break even ± in Q1. Is the 8.8% correct? Is that kind of a good number to use or is there something incremental in the provision? Kind of tying with that, the expenses, you know, the charge that you took to reduce the fixed cost, and then you've got a 50% variable cost structure. How long before the cost reductions start to kick in? Is there any of it really in the Q1 guidance, or does that kind of spill over more into Q2? Yeah, great. Thanks, Bill, for the question. Let me start with the provision question first. You're correct on that ratio. Keep in mind that the components that go into the provision are the day one CECL, the accretion of the discount we have on day one, and then other qualitative factors as well. One thing about that accretion of the discount is it really hits more heavily in the first and second quarter after origination. If you look back at our origination trends, this quarter had a higher amount of that back book accretion coming in. As we look forward to Q1, I don't want to talk about the ratio as much, but if you think about it in terms of dollar amounts, we're remixing to higher quality credit. We should probably have less accretion just because of the recent trends in originations. Right now, we would expect that provision to actually come down quarter-over-quarter. Obviously, as I just said, it's a very volatile measure. You know, there are a lot of different outcomes that are possible on the provision line in any given quarter. Second, on expenses. On the 50% variable cost, Sorry, just Drew. Just one other thing to add, Bill, is another important part of the message we want to make sure you hear is, you know, our intention is to, you know, maintain the balance sheet, given the details we've shared on the attractiveness of the loans we're planning to continue to add. To the extent that we've got available earnings, you know, we would put those into the balance sheet. That's one of the other reasons why we're not guiding to that. There's both the volatility of the provision and also just the intent to, you know, be able to continue to grow the balance sheet should the earnings permit it. Yeah. In Q1, I should have added just back on the provision as well. In Q1, as we're going to higher quality loans, you know, we expect that sort of the upfront charge will be lower on the higher quality loans that we're putting on the balance sheet which also benefits the provision. On expenses, the vast majority of the annualized savings that we reported are fixed costs. There is some portion, less than 10%, which is variable cost of that reduction. The biggest reduction you'll see in our variable cost base as originations comes down is marketing. You, you know, you've obviously already seen that come down each quarter as originations have also declined. As in terms of timing of when those expenses come through. Yeah. Sorry. The savings that we're getting from the reduction in force, those will come through in Q1. We will get almost the full impact of those, except for the remaining severance charge that I mentioned. There's a little bit of variable cost that may still come down over time that's a little more lagged in from the reductions in originations. I wouldn't call that meaningful compared to the, you know, $25 million-$30 million that we're citing in the overall reductions. Okay. Thank you. Thank you. Our next question comes from the line of David Chiaverini with Wedbush Securities. Your line is now open. Hi. Thanks for taking the questions. I wanted to follow up on that question about the provision. I would imagine that with the loan portfolio essentially being flat, that the provision going forward would basically be the loss content of the loans with minimal reserve building. Since the loan portfolio isn't growing, you don't have to necessarily set aside additional reserves that have already been taken, so to speak. I would think it would essentially the provision would match the net charge-offs in the quarter. Is that the right way to think of it, that you basically don't have to reserve much with a flat loan portfolio? No, that's not quite correct because in order to keep a flat loan portfolio, we need to keep originating loans to offset the runoff. Those new loans we originate are going to have a day 1 CECL charge that we need to take as well. Then you will still have accretion that occurs on the back book. As I said, that's more loaded to the first couple. That's more front-loaded to the first couple quarters after origination, but there's still a tail on that as well. I see. Okay, then shifting over to, you mentioned about kind of reinvesting capital to grow the balance sheet. So is the right way to think of your kind of comfort level on capital ratios is where they ended in the fourth quarter? Is there any other kind of constraint on growing the balance sheet? When I, you know, look at your deposit growth over the past, you know, several quarters, you've had significant success in garnering deposits. Could you talk about what's constraining your balance sheet growth? Sure. Yeah. If we think about the ingredients that go into growing the balance sheet, I would say capital, liquidity, and earnings, right? The third one is maybe debatable, but not really for us with our, with, you know, the guidance we're giving. We still have capital to grow. Our Tier 1 leverage was 12.5%, and we're generating capital each quarter. We had. Sorry, that was at the bank level, 12.5%. In liquidity, we have ample liquidity, and the online deposit space has been, you know, is large enough to continue to fund our growth for the foreseeable future. No concerns there. If we want to grow the balance sheet and originate more loans for the balance sheet, that means more CECL charge that we take, which goes against profitability. As much as we have the goal of remaining profitable on a net income basis every quarter, we do still need to balance against that. We just haven't used that as the guidance we're giving you any longer. That gives us some more flexibility. Got it. The last one for me, on slide 17, you mentioned about your net credit loss rate of approximately, you know, 5%. Can you talk about how this 5%, how that compares to what your kind of long-term expectation was for these vintages and on a go-forward basis? Yes. Go ahead, Scott. Yeah. You know, if you look at that page, you can see 2021 and 2022. You know, 20 21, given that, you know, you still had some of the stimulus benefits from the pandemic was better, marginally better than our expectation, 2022 was marginally below. You put the 2 together, we're pretty much on expectation across those two vintages as a total, which is roughly in line with what our expectation is for the year end. Yeah. I would just add the 2022 vintage made maybe marginally less than we expected, but still highly accretive in terms of value created for shareholders by putting it on the balance sheet, at least as it's performing thus far. Got it. Thanks very much. Thank you. The next question comes from the line of Giuliano Bologna with Compass Point. Your line is now open. Thank you for taking my questions. Starting off, one thing I'd be curious about is thinking about, you know, how pricing is evolving and kind of thinking about the marketplace, because with the way, you know, you seem to have talked about in previous quarters is that there's kind of a couple-month lag on pricing. Now that we're kind of getting closer to kind of a, you know, at least a slowdown in the Fed, you know, rate trajectory and hopefully very soon, you know, an end to the hike cycle, you know, is that really what you're what you think will drive, you know, a return to volume as pricing catches up once that happens on the marketplace and just in general for, you know, for the platform as a whole? Then when I think about the pricing that you're getting, it looks like pricing was still a little bit lower in 4Q versus 3Q. You know, as we go forward, has pricing moved up? Kind of going back to the commentary last quarter where you've been dialing pricing higher on different loan categories during the quarter. I'm curious if we think about the yields are going to increase on new originations versus the current HFI book on a go-forward basis. I'll start, Giuliano. Hey, I'll see if I can remember all the questions that were in there. If I miss one, let me know. You know, the step back, the rate-driven pressure is the biggest driver of the volume reduction for especially the non-bank investors who've seen their cost of capital really, you know, significantly increase. That's where we're seeing the pressure. Those buyers are primarily the non-buyers of the non-prime and of the lower prime. We are both curtailing volume there due to that rate-driven pressure, and, you know, having to, until we can get the price up, share some economics in that same space. You know, we're now, the last quarter, you know, including us, the percentage of loans sold to banks is where we ought to be in the 70s%. It's really shifted to the bank buyers right now. We have continued to move prices up. We mentioned, we're testing at all times price points across all of our risk cells. We think it's important in an environment that is in and of itself is stable, making sure we maintain take rates and understand the profile of the borrowers coming through. We are being deliberate about that. We've moved prices up another, I want to say roughly 40 basis points or so over the quarter. We're gonna continue to push on that. You know, we would expect as the Fed slows down, again, ideally stops, there's a lag. You know, as we mentioned before, Fed, the Fed moves, then credit cards move, then the market moves, and we move. We, we would expect as that pressure abates, there's the opportunity for the marketplace to begin to reignite. As we've shown, you know, as recently as last year, the marketplace can rebound pretty quickly. You know, that all assumes that the credit environment, the unemployment environment is solid. You know, obviously that is, that is a factor that I'm sure is, you know, certainly on our minds, and it's on the minds of our investors. That's one of the reasons why we're continuing our focus on being proactive and prudent on credit. I'll just jump in, Giuliano. Just on the HFI portfolio, if you look at the NIM table, unsecured consumer loans went from 13.52% in Q3, 13.16% in Q4. The vast majority of that decline was actually the deferred items, fees, and expense, the yield coming down from that because prepayments have slowed as expected. I think in terms of the actual coupon pricing coming into the book, you know, the back book has mostly run its course now, and that pressure is abating. That makes a lot of sense. you know, from there, when I look at that table and the build up to kind of the 30%-36%, you know, marginal ROE on the 2023 originations, you're looking at, you know, any kind of implied NIM of 10.1%. the footnote says you're using, you know, brokered and, you know, CDs as the benchmark just for your cost capital. Looks like that's currently in the 4% ZIP code at the moment, even your high yield savings are at 4% at the moment. So does that kind of imply that you think you're going to be getting, you know, on the incremental loans, you know, somewhere in the, you know, 14% or higher yield on the loan portfolio? Is that kind of, you know, thinking more about 1Q, or is that something that, you know, you think or the way it'll blend for the full year? Yeah, I think you have the math mostly right. It's actually a little better because the proxy, the brokered proxy we're using is closer to five than four. We're not using our actual high yield savings. We're saying if we go out use a match duration brokered CD, we're applying that rate right now. We're taking sort of the interest rate risk component out of the equation here. That's very helpful. Thank you. Thank you. Basically, we're going back to... Go ahead, sorry. Oh, that's fine. You got it. Go ahead. Sounds good. The, you know, one thing that I wanted to bring up was just maybe just as kind of a clarifying question, was that you guys are talking about keeping the balance sheet relatively flat and then maybe potentially growing a little bit based on where, you know, earnings and capital shake out? I'm assuming that you mean that inclusive of the acquired portfolio that doesn't have CECL reserves. So you're still mixing into more of a portfolio with CECL reserves as you kind of replace the runoff in that portfolio this year. Is that a good way of thinking of it? Yes. Yeah, that's correct. We don't we've had great balance sheet growth. We're clearly going to be slowing down in the near term, but we don't want to lose ground. That includes replacing the runoff of that portfolio. It's good that you called that out because that portfolio, given that it's already, you know, fairly seasoned, is going to run off pretty quickly. It was a big addition that will pay down more quickly than our newer originations. That's great. Thank you for answering my questions, and I will jump back in the queue. Thank you. Our next question comes from the line of John Rowan with Janney Montgomery. Your line is now open. Good afternoon. I want to make sure I understood your answer to the prior question correct. The flat loan portfolio, that includes the acquired portfolio as well, or that, you know, on an average basis, would the earning assets in 1Q look higher than the fourth quarter, obviously, given the timing of the deal? Yes. On, on loans, it should because we only had one month of, as I'm sure you're picking up, we only had one month of average balances for that quarter. We will get the full quarter's worth in Q1. The portfolio does run off quick, so it won't be, you know, about the $900 million the end of the year at. It will come down from there over the course of Q1. Okay. Just, you know, you mentioned obviously bank demand in the marketplace. I'm wondering if, you know, obviously, you know, when U.S. Bank acquired, you know, made the acquisition and then turned around and sold the portfolio, I mean, was, you know, the predecessor that bought those from the marketplace, were they a big component of your bank demand? I'm just curious if, you know, that change, you know, indicates there'll be any, you know. Or were they a big client? Does that make a material impact in, you know, bank demand going forward, assuming they're not, they're not in the market anymore? That was a, you know, billion-dollar portfolio. It represents a large client. They were a long, very long-term, significant partner of ours. When the acquisition was announced, or the intended acquisition was announced, we did work with them to begin reducing their overall participation in the mix in anticipation that the new owner may not continue the relationship. I won't say that there was no impact, but their purchases drew down, and we worked to draw them down materially, between when the deal was announced and when it was approved. Okay. All right. Thank you. Thank you. Our next question comes from the line of Michael Perito with KBW. Your line is now open. Hey, good afternoon, guys. Thanks for taking my questions. Sure, Nate. I wanted to ask on the OpEx side, maybe a question for you, Drew. If we look at the fourth quarter, you were about $180 million. I think that included about $4 million of the restructuring charges, so maybe call it $176 million. I mean, 'cause there's kind of two components, right? I mean, if you annualize that, and then you take out the $25 million-$30 million, but you guys still sound like you're investing, so I'm assuming there's gonna be some growth on that. Just the question is, how much? I was wondering if you can give maybe some thoughts around that. I'm assuming it's gonna be a lot less than what we saw last year, but not nothing, and just was hoping for some more context there. Yeah. Marketing, I think you probably understand the trend on marketing. It's just going to tie- Yeah largely to volume with some rate differences, right? The reason we specifically talked about comp and then gave, I think, a pretty precise number or somewhat precise ranges so that you could you and all the investors could do the math on it. You should take that $88 million, you should subtract out the one-time charge, and then apply the run rate savings that we're going to get. Just don't forget we have a little more severance to take in Q1. All the other line items, I mean, there's some puts and takes there, but we're not expecting dramatic changes. We are gonna be working, you know, we'll be working to be efficient, and spend where we need to, and make some investments. There's a little bit of, you know, drag we'll get, for example, on depreciation and amortization because new projects will come into production. Nothing that should, I think, majorly alter your modeling from where we're at today. Okay. Is that helpful? Yeah. No, it is. Thanks for that. Yeah, I guess kind of a big picture question, Scott. I mean, obviously, it's a tough environment just to make kind of definitive statements. You know, I guess one element that's kind of coming to my mind here as I think of other banks, you know, in my coverage universe, you know, like diversity can often help. Obviously, you guys are pretty heavily tied to the personal lending asset class, which is, you know, obviously what you do so well. Just curious what your kind-of high-level thoughts around that are. I mean, does it make sense longer term to diversify the business more? I mean, just kind of more of a philosophical question, just curious how you think about it. I mean, We are certainly thinking about this in a couple of phases that we'll be pursuing in parallel, but some will reach fruition more quickly, you know. One is transitioning the model, as we've talked about, from 100% marketplace revenue to, you know, where we are now, call it 50/50 interest income to marketplace to more on balance, more of the revenue coming off the balance sheet because it is, you know, it is a more resilient income stream than the marketplace revenue is. You know, the marketplace has real value. It's a capital light way to grow. We can serve customers we wouldn't serve with the bank balance sheet. You know, as we're seeing, it is less resilient in the face of, you know, market shocks like we have today. That's one part of the transition that we are eager to continue. I think last year shows you the, you know, the power when that is working together and, you know, you can think for yourself as the balance sheet gets bigger and you maintain the marketplace. We think that'll be pretty powerful as an earnings generator. Then, yeah, the second piece, which we are committed to but are slowing down this year is really, you know, finding other ways we can help our consumers. We know it's a very valuable consumer. They are strong credit, high income, and they like us. So we are eager to do more for them and, you know, that is our plan. It's just that I think this year is, you know, getting new credit products off the ground and services off the ground is a, you know, that takes a bit of time, and it requires investment. We are slowing it down, but we are not stopping it. Yeah. Okay. Then just one last one for me. I wanna make sure I heard this correctly. Did you guys say that the commercial lending team from the stay over from the Radius Bank was kind of no longer with you guys? Therefore, if so, would we be safe to assume that the commercial balances will kind of run down to nothing from this point forward, or did I misinterpret that? There are three pieces to commercial. There's the GGL piece, the SBA lending, commercial real estate, and equipment finance. The GGL business, which, you know, is closer in what we do in terms of, you know, those smaller businesses that are closer to the consumer. It's also a variable rate product. It has similar dynamics where you know, there's a robust market should you choose to sell it, but you can also hold it. I'd say that we are the set, that piece, that government guaranteed lending piece, we are continuing to grow. Commercial real estate and equipment finance. You know, in this environment, just, you know, not as attractive returns for the bank or for shareholders, so we aren't originating new loans there. Yeah, over time, you could expect those balances to go down. They pay down, more slowly than. Yeah, that was gonna be my follow-up maybe for Drew. Just what's the amortization there? Because it's correct to assume that those will be replaced with more profitable personal loans if you're keeping the balance sheet flat, correct? I think we will grow the SBA Government Guaranteed lending business faster. That is part of our intention as well. They should run off slower than PL, but they're also less predictable, right? We may have customers who decide to refinance or diversify their banking relationships, but we're expecting it to be slower over the course of 2023. Okay. perfect. Thank you, guys. Thank you. There are no additional questions waiting at this time, so I'll pass the conference back over to Sameer. Thanks, Megan. We do have a question from one of our retail investors. The question is: with credit card rates and balances at all-time highs, how do you see this affecting your business? I mean, we tried to touch on that in the prepared remarks. I think, we believe there is a very, very material opportunity for us on the other side, which is, you know, the balances are massive, and these things that are acting as headwinds for us now, should turn into tailwinds, which is investor cost of capital will come down based on forward expectations. Credit card the Fed will not have moved yet. Credit cards will not have moved yet. We will be able to offer real value to our loan buyers. We'll be able to offer even more compelling value to our borrowers. You know, it is our intention to be in a position to take advantage of that opportunity, and use the earnings that that generates to really, continue the evolution we talked about earlier, which is, you know, growing the bank balance sheet and diversifying our overall set of products and services we offer our borrowers. Great. Well, thank you all for joining us for the earnings call. If you have any follow-up questions, please contact Investor Relations. Thank you. That concludes the LendingClub Fourth Quarter 2022 Earnings Conference Call. Thank you for your participation. Have a wonderful evening