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What changed in LendingClub Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LendingClub Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+370 added−327 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-13)

Top changes in LendingClub Corp's 2025 10-K

370 paragraphs added · 327 removed · 243 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

65 edited+65 added−8 removed103 unchanged
Biggest changeHowever, any acquisition, disposition or other strategic transaction involves risks, including: • difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business, which may require ongoing investment in development and enhancement of additional operational and reporting processes and controls; • inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; • difficulties in retaining, training, motivating and integrating key personnel; • diversion of management’s time and resources from our normal daily operations; • difficulties in successfully incorporating licensed or acquired technology and rights into our platform; • difficulties in maintaining uniform standards, controls, procedures and policies within the combined organization; • difficulties in retaining relationships with customers, employees and suppliers of the acquired business; • risks of entering markets in which we have no or limited direct prior experience; • regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; • assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability; • failure to successfully further develop any acquired technology; • liability for activities of the acquired or disposed of business before the acquisition or disposition, including patent and trademark infringement claims, violations of laws, regulatory actions, commercial disputes, tax liabilities and other known and unknown liabilities; • difficulty in separating assets and replacing shared services; • assumption of exposure to performance of any acquired loan portfolios; • potential disruptions to our ongoing businesses; and • unexpected costs and unknown risks and liabilities associated with the acquisition.
Biggest changeIf we are able to identify an appropriate business opportunity, we may not be successful in negotiating favorable terms and/or consummating the transaction and, even if we do consummate such a transaction, we may be unable to obtain the benefits or avoid the difficulties and risks of such transaction. 29 LENDINGCLUB CORPORATION However, any acquisition, disposition or other strategic transaction involves risks, including: • difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business, which may require ongoing investment in development and enhancement of additional operational and reporting processes and controls; • inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; • difficulties in retaining, training, motivating and integrating key personnel; • diversion of management’s time and resources from our normal daily operations; • difficulties in successfully incorporating licensed or acquired technology and rights into our platform; • difficulties in implementing and maintaining uniform standards, controls, procedures and policies within the combined organization, including if the acquired business does not have adequate controls, procedures and policies; • difficulties in retaining relationships with customers, employees and suppliers of the acquired business; • risks of entering markets in which we have no or limited direct prior experience; • regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; • assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability; • failure to successfully further develop any acquired technology; • liability for activities of the acquired or disposed of business before the acquisition or disposition, including patent and trademark infringement claims, violations of laws, regulatory actions, commercial disputes, tax liabilities and other known and unknown liabilities; • difficulty in separating assets and replacing shared services; • assumption of exposure to performance of any acquired loan portfolios; • potential disruptions to our ongoing businesses; and • unexpected costs and unknown risks and liabilities associated with the acquisition.
We may also experience significant concentration on our marketplace bank platform, where a limited number of investors purchase a large volume of loans from our platform.
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.
These claims, lawsuits, proceedings, exams, investigations, and requests could also: (i) result in reputational harm, criminal sanctions, consent decrees, 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.
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.
Any challenge to or adverse consequence from our use of the issuing bank partnership model (or litigation or legislation aimed at thwarting certain transactions based on this model) may harm our business. Prior to becoming a bank holding company, we utilized an issuing bank partnership model.
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. Prior to becoming a bank holding company, we utilized an issuing bank partnership model.
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 U.S. presidential administration and the composition of the U.S.
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 changes in the U.S. presidential administration and the composition of the U.S.
If investors do not believe their demand can be met on our platform, they may seek alternative investments from ours and our business may suffer. Our acquisitions and other strategic transactions may not yield the intended benefits. We have historically and may continue to evaluate and consider strategic transactions, combinations, acquisitions, dispositions or alliances.
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. Our acquisitions and other strategic transactions may not yield the intended benefits. We have historically and may continue to evaluate and consider strategic transactions, combinations, acquisitions, dispositions or alliances.
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 investor capital on reasonable terms may result in a reduction in origination volume.
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.
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 adversely affect our financial performance.
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.
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.
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 LendingClub Corporation and/or LC Bank.
In the event that borrower demand at a given credit rate exceeds 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.
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.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 19. 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.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 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.
Changes to the legal and regulatory regime, such as through amendments to laws and regulations, legal challenges to new and existing agency regulations and interpretations, imposition of supervisory action, or shifts in governmental or regulatory policies, practices or priorities may have a material adverse impact on our operations, including the cost to conduct business, our results of operations and what products and services we can offer.
Changes to the legal and regulatory framework, such as through amendments to laws and regulations, legal challenges to new and existing agency regulations and interpretations, imposition of supervisory action, or shifts in governmental or regulatory policies, practices or priorities may have a material adverse impact on our operations, including the cost to conduct business, our results of operations and what products and services we can offer.
Additionally, investors may exert significant influence over us, our management and our operations. For example, if 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.
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.
Federal Deposit Insurance Corporation , 29 LENDINGCLUB CORPORATION No. 4:20-cv-05860-JSW (N.D. Cal.)).While we believe that our 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.
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.
Changes in economic conditions affecting borrowers, revisions to accounting rules and related guidance, new qualitative or quantitative information about existing loans, identification of additional problem loans, changes in the size or composition of our finance receivables and loan portfolio, changes to our loss estimation techniques including consideration of forecasted economic assumptions, and other factors, both within and outside of our control, may require an increase in the allowance for loan losses.
Changes in economic conditions affecting borrowers, revisions to accounting rules and related guidance, new qualitative or quantitative information about existing loans, identification of additional problem loans, changes in the size or composition of our finance receivables and loan portfolio, changes to our loss estimation techniques including consideration of forecasted economic assumptions, and other factors, both within and outside of our 21 LENDINGCLUB CORPORATION control, may require an increase in the allowance for loan losses.
In addition to the discussion in this section, see the risk factor “ The current economic environment, including related uncertainties, could negatively affect our business and operating results . ” If we do not maintain or continue to increase loan originations, or expand our marketplace bank to new markets, we may not succeed in maintaining and/or growing our business, and as a result our business and results of operations could be adversely affected.
In addition to the discussion in this section, see the risk factor “ The current economic environment, including related uncertainties, could negatively affect our business and operating results . ” 24 LENDINGCLUB CORPORATION If we do not maintain or continue to increase loan originations, or expand our marketplace bank to new markets, we may not succeed in maintaining and/or growing our business, and as a result our business and results of operations could be adversely affected.
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, 24 LENDINGCLUB CORPORATION 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.
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.
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 25 LENDINGCLUB CORPORATION expense for indemnification for any such individual or entity until such matters may be resolved.
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.
We cannot predict what other changes, if any, will be made to the legal and regulatory regime, whether the changes will be retained or the effect that such changes may have on our future business and earnings prospects.
We cannot predict what other changes, if any, will be made to the legal and regulatory framework, whether the changes will be retained or the effect that such changes may have on our future business and earnings prospects.
Changes to the legal, regulatory or political regime may require material modifications to our products, services and operations, require significant investments of management attention and resources, or expose us to potential liability for past practices.
Changes to the legal, regulatory or political environment may require material modifications to our products, services and operations, require significant investments of management attention and resources, or expose us to potential liability for past practices.
We also may not be able to refinance our indebtedness or take such other actions, if necessary, on commercially reasonable terms, or at all. 30 LENDINGCLUB CORPORATION RISKS RELATED TO MACROECONOMIC CONDITIONS OR OTHER EXTERNAL FACTORS The current economic environment, including related uncertainties, could negatively affect our business and operating results.
We also may not be able to refinance our indebtedness or take such other actions, if necessary, on commercially reasonable terms, or at all. RISKS RELATED TO MACROECONOMIC CONDITIONS OR OTHER EXTERNAL FACTORS The current economic environment, including related uncertainties, could negatively affect our business and operating results.
We believe the technology platform that powers our marketplace bank enables us to deliver solutions to customers and marketplace investors, and provides a significant time and cost advantage over traditional banks. The satisfactory performance, reliability and availability of our technology and our underlying network infrastructure are critical to our operations, customer service and reputation.
We believe the technology platform that powers our marketplace bank enables us to deliver solutions to customers and marketplace investors, and provides a significant time and cost advantage over traditional banks. The 27 LENDINGCLUB CORPORATION satisfactory performance, reliability and availability of our technology and our underlying network infrastructure are critical to our operations, customer service and reputation.
For example, as the FRB increased interest rates in 2022 and 2023, we made corresponding increases to the rates we offer depositors, which increased our funding cost and reduced the net interest margin on loans held on our balance sheet. 23 LENDINGCLUB CORPORATION Changes we make to the rates offered on our deposit products may affect our finances and liquidity.
For example, as the FRB increased interest rates in 2022 and 2023, we made corresponding increases to the rates we offer depositors, which increased our funding cost and reduced the net interest margin on loans held on our balance sheet. Changes we make to the rates offered on our deposit products may affect our finances and liquidity.
In addition, our ability to maintain existing or obtain additional deposits may be impacted by factors, including factors beyond our control, including perceptions about the stability of the banking industry, our reputation or financial strength, or branchless banking generally, which could reduce the number of consumers choosing to place deposits with us.
In addition, our ability to maintain existing or obtain additional deposits may be impacted by factors, including factors beyond our control, including perceptions about the stability of the banking industry, our reputation or financial strength, or branchless 25 LENDINGCLUB CORPORATION banking generally, which could reduce the number of consumers choosing to place deposits with us.
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. 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.
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, 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.
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.
LC Bank is subject to various legal, regulatory and other restrictions on its ability to make distributions and payments to the Company. 26 LENDINGCLUB CORPORATION Any inability to maintain an adequate liquidity position could adversely affect our operations, our compliance with applicable regulations and the performance of our business.
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. ” 27 LENDINGCLUB CORPORATION Alternatively, in the event that investor demand at a given return exceeds borrower demand for that product for a given period, there may be insufficient inventory to satisfy investor demand.
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.
As of December 31, 2024, we had approximately $9.1 billion in deposits. Our future growth and strategy depend on our ability to maintain deposits to provide a less costly and stable source of funding. The deposit markets are competitive, and therefore it may prove difficult and/or costly to grow our deposit base.
As of December 31, 2025, we had approximately $9.8 billion in deposits. Our future growth and strategy depend on our ability to maintain deposits to provide a less costly and stable source of funding. The deposit markets are competitive, and therefore it may prove difficult and/or costly to grow our deposit base.
Such concentration exposes us disproportionately to 22 LENDINGCLUB CORPORATION 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.
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.
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 of a decline or volatility in the credit profile and/or delinquency rates of these borrowers, the value of these held loans may decline.
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 these borrowers experience a decline or volatility in their credit profile and/or an increase or volatility in their delinquency rates, the value of these held loans may decline.
Among other things, as inflation and interest rates are 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, (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.
Among other things, as inflation and interest rates increase 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.
Item 1. Business – Regulation and Supervision ” for information on the regulation and supervision framework which governs our Company and its activities. 18 LENDINGCLUB CORPORATION We are regularly examined and inspected by our regulators, including the FRB and OCC.
Item 1. Business – Regulation and Supervision ” for information on the regulation and supervision framework which governs our Company and its activities. 19 LENDINGCLUB CORPORATION We are supervised and regularly examined and inspected by our regulators, including the FRB, OCC and CFPB.
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 single revenue stream and vulnerable to competitors offering a suite of products and services.
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 limited number of revenue streams and vulnerable to competitors offering a suite of products and services.
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 those subsidiaries to the parent company or other affiliates.
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 a subsidiary to their parent company or other affiliates.
It could also result in the Company being required to take steps to increase its regulatory capital that may be dilutive or adverse to stockholders, including 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.
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.
Additionally, in an elevated interest rate environment the return expectations of our marketplace investors will likely be elevated, and we may be unable to meet those expectations, which could prompt certain marketplace investors to reduce or cease their loan purchases or investments.
This may increase default rates, which could adversely affect marketplace investor returns. Additionally, in an elevated interest rate environment the return expectations of our marketplace investors will likely be elevated, and we may be unable to meet those expectations, which could prompt certain marketplace investors to reduce or cease their loan purchases or investments.
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.
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 and net interest income earned from retaining loans on our balance sheet.
Further, as a result of changes in priorities and/or leadership at federal, state and/or local levels, we may become subject to different and potentially conflicting requirements and expectations in the jurisdictions in which we operate or that may attempt to exercise jurisdiction over us, which may have an adverse effect on our business and results of operations.
Further, as a result of changes in priorities and/or leadership at federal, state and/or local levels, we may become subject to different and potentially conflicting requirements and expectations in the jurisdictions in which we operate or that may attempt to exercise jurisdiction over us, which may make it more challenging and/or resource intensive to comply with applicable laws and could have an adverse effect on our business and results of operations.
For example, inflation and/or natural disasters may cause borrowers to allocate their income to necessities, such as housing and food, thereby potentially increasing their risk of default by reducing their ability to make loan payments. This may increase default rates, which could adversely affect marketplace investor returns.
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.
Further, through its adoption of the CECL model, the Financial Accounting Standards Board (FASB) implemented an accounting model to measure credit losses for financial assets measured at amortized cost, which includes the vast majority of our loan portfolio.
Through its adoption of the CECL methodology, the Financial Accounting Standards Board (FASB) implemented an accounting model to measure credit losses for financial assets measured at amortized cost.
Finally, we may also choose to divest certain businesses or product lines that no longer fit with our strategic objectives. If we decide to sell assets or a business, we may have difficulty obtaining terms acceptable to us in a timely manner, or at all. Additionally, the terms of such potential transactions may expose us to ongoing obligations and liabilities.
Finally, we may also choose to divest certain businesses or product lines that no longer fit with our strategic objectives. If we decide to sell assets or a business, we may have difficulty obtaining terms acceptable to us in a 30 LENDINGCLUB CORPORATION timely manner, or at all.
Governments could pass legislation or adopt policies based on changes in leadership, shifting priorities, the stability of the banking system or in response to current financial conditions. Further, the recent change in U.S. presidential administration and the composition of the U.S.
Laws, regulations and supervisory expectations, and the manner in which they are interpreted and enforced, are constantly changing. Governments could pass legislation, regulations or adopt policies based on changes in leadership, shifting priorities, the stability of the banking system or in response to current financial conditions. Further, the change in U.S. presidential administration and the composition of the U.S.
If we are unable to offer marketplace investors a satisfactory breadth and volume of investment opportunities, our business and results of operations may be materially harmed.
Additionally, the terms of such potential transactions may expose us to ongoing obligations and liabilities. If we are unable to offer marketplace investors a satisfactory breadth and volume of investment opportunities, our business and results of operations may be materially harmed.
We are not experts with respect to all applicable laws in the various foreign jurisdictions from which an investor may be located, and we cannot be sure that we are complying with all applicable foreign laws.
From time to time, non-U.S. residents invest in loans directly through our marketplace bank platform. We are not experts with respect to all applicable laws in the various foreign jurisdictions from which an investor may be located, and we cannot be sure that we are complying with all applicable foreign laws.
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, LC Bank is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the OCC. Moreover, we currently anticipate becoming subject to supervision and enforcement by the CFPB in 2025.
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 with assets over $10 billion, LC Bank is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the OCC and the CFPB.
Additionally, it may take us longer than expected to fully realize the anticipated benefits and synergies of these transactions, and those benefits and synergies may ultimately be smaller than anticipated or may not be realized at all, which could adversely affect our business and operating results. 28 LENDINGCLUB CORPORATION Any transactions, combinations, acquisitions, dispositions or alliances may also require us to issue additional equity securities, spend our cash, or incur debt (and increased interest expense), liabilities and amortization expenses related to intangible assets or write-offs of goodwill, which could adversely affect our results of operations and dilute the economic and voting rights of our stockholders and the interests of holders of our indebtedness.
Any transactions, combinations, acquisitions, dispositions or alliances may also require us to issue additional equity securities, spend our cash, or incur debt (and increased interest expense), liabilities and amortization expenses related to intangible assets or write-offs of goodwill, which could adversely affect our results of operations and dilute the economic and voting rights of our stockholders and the interests of holders of our indebtedness.
However, we may not assign the appropriate level of resources, priority or expertise to the development and commercialization of these new products, services or enhancements. We also could utilize and invest in technologies, products and services that ultimately do not achieve widespread adoption and, therefore, are not as attractive or useful to our customers as we anticipate.
We also could utilize and invest in technologies, products and services that ultimately do not achieve widespread adoption and, therefore, are not as attractive or useful to our customers as we anticipate.
Congress is expected to lead to potentially significant changes in governing ideology and style, legislative, regulatory or policy priorities and/or the existence, priorities, scope, practices and/or staffing levels of regulatory agencies. For example, in February 2025, the Trump administration directed the CFPB to, among other things, suspend rule implementations and cease supervision activities.
Congress are leading to 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.
Additionally, compliance with applicable laws, regulations and commitments requires significant investment of management attention and resources. Any failure to comply with applicable laws, regulations or commitments could have an adverse effect on our business, financial condition and results of operations. Our allowance for loan losses may not be adequate to cover actual losses.
Additionally, compliance with applicable laws, regulations and commitments requires significant investment of management attention and resources. Any failure to comply with applicable laws, regulations or commitments could have an adverse effect on our business, financial condition and results of operations. Changes in the legal, regulatory or political environment could adversely affect our business, financial condition, and results of operations.
Fraudulent activity associated with our marketplace bank could negatively impact our operating results, brand and reputation and cause the use of our products and services to decrease and our fraud losses to increase. 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 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.
Additionally, there may be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated. 20 LENDINGCLUB CORPORATION 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 adversely impacted our ability to operate our business until the revised framework is deemed sufficient and adequate by our regulators.
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 impacted, and may in the future impact, our ability to operate our business until the revised framework is deemed sufficient and adequate by our regulators. 22 LENDINGCLUB CORPORATION Participation by non-U.S. residents on our marketplace bank platform may result in non-compliance with foreign laws.
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 use of the issuing bank partnership model could adversely affect our business, financial condition and results of operations.
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.
If we breach representations or warranties in connection with our marketplace investor transactions, including whole loan sales, structured products or securitization transactions, or if we suffer a direct or indirect loss in our retained interests in these transactions, our financial condition could be harmed.
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. 31 LENDINGCLUB CORPORATION If we breach representations or warranties in connection with our marketplace investor transactions, including whole loan sales, structured products or securitization transactions, or if we suffer a direct or indirect loss in our retained interests in these transactions, our financial condition could be harmed.
Congress are expected to lead to potentially significant changes to the priorities, scope, practices and/or staffing levels of various governmental agencies. However, what 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.
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.
Our success depends in significant part on marketplace investors purchasing loans through our marketplace bank platform. Investors may have financial conditions or limitations that adversely impact their ability to continue to participate on our platform. Further, investors may choose to deploy their capital elsewhere for any reason, including if financial returns on loans we offer prove to be unsatisfactory.
Our success depends in significant part on marketplace investors purchasing loans through our marketplace bank platform. Investors may have financial conditions or limitations that adversely impact their ability to continue to 23 LENDINGCLUB CORPORATION participate on our platform.
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 or in connection with new product offerings. Under our agreements with investors, we are obligated to repurchase loans in cases of confirmed identity theft.
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.
Elevated inflation and interest rates, and uncertainty with respect to future interest rate decreases, are changing lending and spending 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, changes in the inflation and interest rate environment.
Uncertainty with respect to tariffs, and the potential of elevated inflation and interest rates on U.S. consumers, are also changing spending patterns and thereby prompting concern that the U.S. could experience an economic downturn or prolonged period of slow economic growth.
While the FRB has since reduced rates to a range of 4.25% to 4.5% as of December 2024, 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.
While the FRB has since reduced rates to a range of 3.50% to 3.75% as of December 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.
Under this model, the allowance is established to reserve for management’s best estimate of expected lifetime losses inherent in our finance receivables and loan portfolio. 19 LENDINGCLUB CORPORATION The process for determining the amount of the allowance requires subjective and complex judgments about the future, including forecasts of economic or market conditions that might impair the ability of borrowers to repay their loans.
The process for determining the amount of the allowance requires subjective and complex judgments about the future, including forecasts of economic or market conditions that might impair the ability of borrowers to repay their loans.
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. 26 LENDINGCLUB CORPORATION Many of our stakeholders are becoming increasingly interested in our environmental, social, governance and other sustainability responsibilities, strategy and related disclosures.
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.
If we do not successfully maintain, protect and promote our brand we may be unable to maintain and/or expand our base of customers and investors, which may materially harm our business.
If we do not successfully maintain, protect and promote our brand we may be unable to maintain and/or expand our base of customers and investors, which may materially harm our business. 28 LENDINGCLUB CORPORATION Fraudulent activity associated with our marketplace bank could negatively impact our operating results, brand and reputation and cause the use of our products and services to decrease and our fraud losses to increase.
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.
Under CECL, we maintain an allowance for loan losses to provide for loan defaults and non-performance that reflects management’s best estimate of expected lifetime losses inherent in our finance receivables and loan portfolio.
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. 21 LENDINGCLUB CORPORATION From time to time, we also sponsor the sale of loans through Structured Program transactions, and we may be required to and/or otherwise decide to retain a portion of the interests in these securitization transactions (Securitization Interests).
From time to time, we also sponsor the sale of loans through Structured Program transactions, and we may be required to and/or otherwise decide to retain a portion of the interests in these securitization transactions (Securitization Interests).
The current economic environment, and its impact, may also have the effect of heightening many of the other risks described in “
The current economic environment, and its impact, may also have the effect of heightening many of the other risks described in “ Item 1A. Risk Factors ” and elsewhere in our Annual Report, such as our exposure to the credit and default risk of borrowers, maintaining and increasing loan originations, maintaining our deposit base and retaining our marketplace investors.
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. We incur expenses and expend resources to develop and commercialize new products and services and enhancements to existing products and services.
We incur expenses and expend resources to develop and commercialize new products and services and enhancements to existing products and services. However, we may not assign the appropriate level of resources, priority or expertise to the development and commercialization of these new products, services or enhancements.
Removed
Further, we currently anticipate that we will also be regulated by, and thereby subject to supervision and enforcement by, the CFPB in 2025.
Added
Congress is resulting in significant changes in governing ideology and style, legislative, regulatory or policy priorities and/or the existence, 20 LENDINGCLUB CORPORATION priorities, scope, practices and/or staffing levels of regulatory agencies.
Removed
Changes in the legal, regulatory or political regime could adversely affect our business, financial condition, and results of operations. Laws, regulations and supervisory expectations, and the manner in which they are interpreted and enforced, are constantly changing.
Added
For example, in February 2025, the current presidential administration directed the CFPB to, among other things, suspend rule implementations and cease supervision activities; and while the CFPB is still operating, it has rescinded rules set under the prior U.S. presidential administration.
Removed
Participation by non-U.S. residents on our marketplace bank platform may result in non-compliance with foreign laws. From time to time, non-U.S. residents invest in loans directly through our marketplace bank platform.
Added
Additionally, changes in the leadership of federal banking agencies may impact supervision, examination and enforcement priorities and rulemaking of such agencies and may result in changes to interpretations of existing rules and guidance.
Removed
For example, certain of our marketplace investors and equity investors have inquired about our progress and disclosures on this topic. Further, this area of disclosure is subject to state legislation and pending rules from the SEC, which the Company continues to monitor and will comply with as applicable.
Added
Further, in January 2026, the current presidential administration proposed a 10% interest rate cap for credit cards which, if implemented, and depending on how it is implemented, could have an adverse effect on our business and results of operations, including reducing borrower demand for our loans given a significant portion of loan customers use our personal loan product to refinance existing higher interest rate credit card debt into a lower interest rate personal loan with us.
Removed
For example, in October 2023, California adopted the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act, which, among other things, will require certain companies doing business in California to disclose their direct and indirect greenhouse gas emissions and their climate-related financial risks and measures being taken to reduce such risks.
Added
Additionally, if the proposal for an interest rate cap (and any related legislation or executive order) extends to other forms of consumer credit such as personal loans, and, depending on how that would be implemented, our business and financial results could be materially and adversely impacted as we would be unable to offer our current personal loan product to many customers that we currently are able to serve.
Removed
As regulations regarding these reporting obligations are still in development, we cannot yet predict the full impact of these laws and their corresponding regulations and future enforcement activity on our business, financial condition, results of operations, brand or reputation.
Added
For example, in March 2025, the SEC voted to abandon its defense of its 2024 climate-related disclosure rules, effectively pausing, and likely reversing, the mandate for issuer companies to report greenhouse gas emissions and climate risks.
Removed
Our absolute and relative progress and disclosures, or lack thereof, on environmental, social, governance and other sustainability matters could impact our reputation, brand and the willingness of certain platform and equity investors to hold our loans or common stock, respectively.
Added
However, California and other states are continuing forward with, or contemplating, their own climate-related disclosure rules; though the California rules are being legally challenged and the outcome of such challenges is currently unknown. Our allowance for loan losses may not be adequate to cover actual losses.
Removed
If we are able to identify an appropriate business opportunity, we may not be successful in negotiating favorable terms and/or consummating the transaction and, even if we do consummate such a transaction, we may be unable to obtain the benefits or avoid the difficulties and risks of such transaction.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditionally, the CFPB recently issued a final rule to implement Section 1033 of the Dodd-Frank Act (the Open Banking Rule) on “open banking” and protection of personal financial data rights that would give consumers certain rights regarding the use and transfer of their personal financial data. 41 LENDINGCLUB CORPORATION We cannot yet predict the full impact of the CCPA, CPRA, Open Banking Rule or any other proposed or enacted state, U.S. or international data privacy legislation on our business or operations, but such laws may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
Biggest changeWe cannot yet predict the full impact of the CCPA, CPRA, Open Banking Rule or any other proposed or enacted state, U.S. or international data privacy legislation on our business or operations, but such laws may restrict our ability to provide certain products and services or may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
The ability to collect on the loans is dependent on the borrower’s continuing financial stability and willingness to make loan payments, and consequently, collections can be adversely affected by a number of factors, including job loss, divorce, death, illness, bankruptcy or the economic and/or social factors referenced above in the risk factor “ A decline in social and economic conditions may adversely affect our customers, which may negatively impact our business and results of operations .” Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on these loans.
The ability to collect on the loans is dependent on the borrower’s continuing financial stability and willingness to make loan payments, and consequently, collections can be adversely affected by a number of factors, including job loss, divorce, death, illness, bankruptcy or the economic and/or social factors referenced above in the risk factor “ A decline in social and economic conditions may adversely affect our customers, which may negatively impact our business and results of operations .” Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount that can be recovered on these loans.
Our stock price may continue to fluctuate in response to a number of events and factors, such as quarterly operating results; changes in our financial projections provided to the public or our failure to meet those projections; changes in the credit performance of our loans; the public’s reaction to our press releases, other public announcements and filings with the SEC; progress and resolution with respect to litigation and regulatory inquiries; our operation of LC Bank; significant transactions or acquisitions; new features, products or services offered by us or our competitors; changes in financial estimates and recommendations by securities analysts; media coverage of our business and financial performance; the operating and stock price performance of, or other developments involving, other companies that stockholders may deem comparable to us; trends in our industry; any significant change in our management; and general economic conditions.
Our stock price may continue to fluctuate in response to a number of events and factors, such as quarterly operating results; changes in our financial projections provided to the public or our failure to meet those projections; changes in the credit performance of our loans; the public’s reaction to our filings with the SEC, press releases, other public announcements; progress and resolution with respect to litigation and regulatory inquiries; our operation of LC Bank; significant transactions or acquisitions; new features, products or services offered by us or our competitors; changes in financial estimates and recommendations by securities analysts; media coverage of our business and financial performance; the operating and stock price performance of, or other developments involving, other companies that stockholders may deem comparable to us; trends in our industry; any significant change in our management; and general economic conditions.
Fluctuations in our tax obligations may differ materially from amounts recorded in our financial statements and could adversely affect our business, financial condition and results of operations in the periods for which such determination is made. We have incurred net losses in the past and may incur net losses in the future.
Further, fluctuations in our tax obligations may differ materially from amounts recorded in our financial statements and could adversely affect our business, financial condition and results of operations in the periods for which such determination is made. We have incurred net losses in the past and may incur net losses in the future.
In addition, events or perceptions with respect to liquidity, defaults and other markers of stability, performance and/or strength within the financial services industry have, and may in the future, lead to market-wide liquidity concerns, erosion of confidence in the banking system, the closure of financial services institutions and other adverse consequences.
In addition, events or perceptions with respect to liquidity, defaults and other markers of stability, performance and/or strength within the financial services industry have led, and may in the future lead, to market-wide liquidity concerns, erosion of confidence in the banking system, the closure of financial services institutions and other adverse consequences.
We may be required to alter our models for compliance purposes, which could impact the interest rates offered to borrowers, the risk-adjusted returns offered to investors, result in higher losses or otherwise impact our results of operations.
We may be required to alter our models for compliance purposes, which could impact the interest rates offered to borrowers, the risk-adjusted returns offered to marketplace investors, result in higher losses or otherwise impact our results of operations.
Our failure, real or perceived, to comply with applicable privacy policies or federal, state or foreign laws and regulations or any compromise of security that results in the unauthorized release of personal information or other user data could damage our reputation, discourage potential borrowers or investors from using our marketplace bank or result in fines or proceedings brought against us, our issuing banks or other third parties by governmental agencies, borrowers, investors or other third parties, one or all of which could materially adversely affect our business, financial condition and results of operations.
Our failure, real or perceived, to comply with applicable privacy policies or federal, state or foreign laws and regulations or any compromise of security that results in the unauthorized release of personal information or other user data could damage our reputation, discourage potential borrowers or investors from using our marketplace bank or result in fines or proceedings brought against us or other third parties by governmental agencies, borrowers, investors or other third parties, one or all of which could materially and adversely affect our business, financial condition and results of operations.
Additionally, if borrowers default on loans that are not priced correctly because the information provided by the borrowers or third parties is inaccurate, investors may try to rescind their affected investments in these loans or the loans may not perform as expected and our reputation may be harmed. 36 LENDINGCLUB CORPORATION RISKS RELATED TO OUR INDUSTRY Substantial and increasing competition in our industry may harm our business.
Additionally, if borrowers default on loans that are not priced correctly because the information provided by the borrowers or third parties is inaccurate, investors may try to rescind their affected investments in these loans or the loans may not perform as expected and our reputation may be harmed. 38 LENDINGCLUB CORPORATION RISKS RELATED TO OUR INDUSTRY Substantial and increasing competition in our industry may harm our business.
LC Bank is also subject to various legal, 46 LENDINGCLUB CORPORATION regulatory and other restrictions on its ability to make distributions and payments to the Company. In addition, in the future, we may enter into borrowing or other contractual arrangements that restrict our ability to pay dividends.
LC Bank is also subject to various legal, 49 LENDINGCLUB CORPORATION regulatory and other restrictions on its ability to make distributions and payments to the Company. In addition, in the future, we may enter into borrowing or other contractual arrangements that restrict our ability to pay dividends.
Although in 2024 we did not suffer material costs or disruption to our business from any such incident, unauthorized access to our marketplace bank and servicing systems can result in confidential borrower and investor information being stolen and potentially used for criminal purposes.
Although in 2025 we did not suffer material costs or disruption to our business from any such incident, unauthorized access to our marketplace bank and servicing systems can result in confidential borrower and investor information being stolen and potentially used for criminal purposes.
Third parties who are contractually obligated to protect our intellectual property may be the target of data breaches or may breach their obligations and disseminate, misappropriate or otherwise misuse our proprietary technology, underwriting and data, processes and other intellectual property.
Third parties who are contractually obligated to protect our intellectual property may be the target of data breaches or may breach their obligations and disseminate, misappropriate or otherwise misuse our proprietary technology, underwriting and credit decisioning data, processes and other intellectual property.
Further, if we are unsuccessful in establishing or 38 LENDINGCLUB CORPORATION maintaining our relationships with third parties, or realizing the anticipated benefits from such partnerships, our ability to compete and to grow our revenue could be impaired and our operating results may suffer. A disruption or failure in services provided by third parties could materially and adversely affect our business.
Further, if we are unsuccessful in establishing or maintaining our relationships with third parties, or realizing the anticipated benefits from such partnerships, our ability to compete and to grow our revenue could be impaired and our operating results may suffer. A disruption or failure in services provided by third parties could materially and adversely affect our business.
These factors could prevent us from processing or posting payments on loans, impact our bank operations, damage our brand and reputation, divert our employees’ attention, reduce our revenue, subject us to liability and 40 LENDINGCLUB CORPORATION cause customers to abandon our marketplace bank platform, any of which could adversely affect our business, financial condition and results of operations.
These factors could prevent us from processing or posting payments on loans, impact our bank operations, damage our brand and reputation, divert our employees’ attention, reduce our revenue, subject us to liability and cause customers to abandon our marketplace bank platform, any of which could adversely affect our business, financial condition and results of operations.
Similarly, the returns to investors may be impacted by declines in market rates for sales of charged-off loans to third-party purchasers. Ultimately, if delinquencies impair our ability to offer competitive risk-adjusted returns for marketplace investors, they may seek alternative investments and our business may suffer.
Similarly, the returns to investors may be impacted by declines in market rates for sales of charged-off loans to third-party purchasers. Ultimately, if delinquencies impair 37 LENDINGCLUB CORPORATION our ability to offer competitive risk-adjusted returns for marketplace investors, they may seek alternative investments and our business may suffer.
The highly automated nature of our marketplace bank, our reliance on digital technologies and the types and amount of data collected, stored and processed on our systems make us an attractive 39 LENDINGCLUB CORPORATION target and subject to cyber-attacks, computer viruses, ransomware, physical or electronic break-ins and similar disruptions.
The highly automated nature of our marketplace bank, our reliance on digital technologies and the types and amount of data collected, stored and processed on our systems make us an attractive target and subject to cyber-attacks, computer viruses, ransomware, physical or electronic break-ins and similar disruptions.
In addition, any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our products or operating our platform 42 LENDINGCLUB CORPORATION or require that we comply with other unfavorable terms.
In addition, any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our products or operating our platform or require that we comply with other unfavorable terms.
Business – Competition. ” Many of our competitors have significantly greater financial resources and may have access to less expensive capital than we do, and may offer a broader range of products, services or features, assume a greater level of risk, have lower operating or financing costs, or have different profitability expectations than us.
Many of our competitors have significantly greater financial resources and may have access to less expensive capital than we do, and may offer a broader range of products, services or features, assume a greater level of risk, have lower operating or financing costs, or have different profitability expectations than us.
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.
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.
Price volatility over a given period may cause the price of any repurchase of our own stock to exceed the stock’s price at a given point in time. Volatility in our stock price also impacts the value of our equity compensation, which affects our ability to recruit and retain employees.
Price volatility over a given period may cause the price of any repurchase of our own stock to exceed the stock’s price at a given point in time. Volatility in our stock price also impacts the value of our 47 LENDINGCLUB CORPORATION equity compensation, which affects our ability to recruit and retain employees.
Our models are based on algorithms that 34 LENDINGCLUB CORPORATION evaluate a number of factors, including behavioral data, transactional data, bank data and employment information, which may not effectively predict future loan losses.
Our models are based on algorithms that evaluate a number of factors, including behavioral data, transactional data, bank data and employment information, which may not effectively predict future loan losses.
If we, or third parties on our behalf, cannot adequately perform collection services on the loans, the marketplace investor will not be entitled to any remittances under the terms of 35 LENDINGCLUB CORPORATION the investment.
If we, or third parties on our behalf, cannot adequately perform collection services on the loans, the marketplace investor will not be entitled to any remittances under the terms of the investment.
On the basis of this evaluation, a valuation allowance has been recorded to recognize only deferred tax assets that are more likely than not to be realized. Our ability to accurately forecast net income (loss) is in part a function of our ability to use our NOLs and, more generally, forecast our tax liability.
On the basis of this evaluation, a valuation allowance has been recorded to recognize only deferred tax assets that are more likely than not to be realized. 46 LENDINGCLUB CORPORATION Our ability to accurately forecast net income (loss) is in part a function of our ability to use our net operating loss carryforwards (NOLs) and, more generally, forecast our tax liability.
Further, the use of these models, algorithms and artificial intelligence for determining loan grades and corresponding interest rates may also heighten the risk of legal or regulatory scrutiny.
Further, the use of these models, algorithms and AI for determining loan grades and corresponding interest rates may also heighten the risk of legal or regulatory scrutiny.
There are federal, state and foreign laws regarding privacy and the storing, sharing, use, disclosure, protection and other processing of personal information and other user data.
There are federal, state and foreign laws regarding privacy and the storing, 43 LENDINGCLUB CORPORATION sharing, use, disclosure, protection and other processing of personal information and other user data.
Similarly, if any of these models contain programming or other errors, are ineffective 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.
Similarly, if any of these models contain programming or other errors, are ineffective, 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.
AI models may produce output or take action that is incorrect, infringe on the intellectual property rights of others or is otherwise harmful. In addition, the complexity of AI models may make it challenging to understand why they generate particular outputs.
AI models may produce output or take action that is inaccurate or incomplete, infringes on the intellectual property rights of others or is otherwise harmful. In addition, the complexity of AI models may make it challenging to understand why they generate particular outputs.
We, or our third-party service providers, may develop or incorporate artificial intelligence (AI) technology in certain business processes, products or services. The development and use of AI presents a number of risks and challenges.
We are incorporating AI technology in certain business processes and we or our third-party service providers may develop or incorporate AI in additional business processes, products or services. The development and use of AI presents a number of risks and challenges.
The legal and regulatory environment relating to AI is uncertain and rapidly evolving, which could require changes in our potential use and implementation of AI technology, limit our ability to integrate AI and increase our compliance costs and the risk of non-compliance.
The legal and regulatory environment relating to AI is uncertain and rapidly evolving, with states proposing and adopting laws and regulations on the use of AI, which could require changes in our potential use and implementation of AI technology, limit our ability to integrate AI and increase our compliance costs and the risk of non-compliance.
Additionally, competition may drive us to take actions that we might otherwise avoid, such as lowering interest rates or fees on loans or raising interest rates on deposits, and that may adversely affect our business and results of operations. We could be adversely affected by the soundness of other financial institutions.
Additionally, competition may drive us to take actions that we might otherwise avoid, such as lowering interest rates or fees on loans or raising interest rates on deposits, and that may adversely affect our business and results of operations.
These laws include the BHCA and the Change in Bank Control Act. These laws could delay or prevent an acquisition. See “ Item 1. Business – Regulation and Supervision – Acquisition of a Significant Interest in the Company ” for additional information. We do not intend to pay dividends for the foreseeable future.
These laws include the BHCA and the Change in Bank Control Act. These laws could delay or prevent an acquisition. See “ Item 1. Business – Regulation and Supervision – Acquisition of a Significant Interest in the Company ” for additional information.
For example, the use of machine learning and AI can implicate potential fair lending issues, which may raise concerns for regulators or consumer advocacy groups. Additionally, we may integrate AI into our operations, technology, products and services in the future.
For example, the use of machine learning and AI can implicate potential fair lending issues, which may raise concerns for regulators or consumer advocacy groups and could result in litigation. We are integrating AI into certain aspects of our business and may further integrate AI into our operations, technology, products and services in the future.
If we are unable to effectively segment borrowers into relative risk profiles, we may be unable to offer attractive interest rates for borrowers and risk-adjusted returns for marketplace investors. Additionally, if these models fail to adequately assess the creditworthiness of our borrowers, we may experience higher than forecasted losses. Furthermore, as stated above, we hold loans on our balance sheet.
If we are unable to effectively segment borrowers into relative risk profiles, we may be unable to offer attractive interest rates for borrowers and risk-adjusted returns for marketplace investors. 36 LENDINGCLUB CORPORATION Additionally, if these models fail to adequately assess the creditworthiness of our borrowers, we may experience higher than forecasted losses.
Certain competitors may be able to offer lower rates to borrowers than we are able to offer and/or structure their products in a manner that is more attractive to potential customers. Additionally, some of our competitors may also be subject to less burdensome licensing and other regulatory requirements.
Certain competitors may be able to offer lower rates to borrowers than we are able to offer and/or structure their products in a manner that is more attractive to potential customers. Additionally, some of our competitors have less regulatory oversight and/or lower cost structures than us.
The CCPA and CPRA, among other things, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how certain personal information is used and shared.
For example, California adopted the California Consumer Privacy Act (CCPA), which was modified by the California Privacy Rights Act (CPRA). The CCPA and CPRA, among other things, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how certain personal information is used and shared.
We continually refine these algorithms based on new data and changing macroeconomic conditions. However, there is no guarantee that the credit decisioning, pricing, loss forecasting and scoring models that we use have accurately assessed the creditworthiness of our borrowers, or will be effective in assessing creditworthiness in the future.
However, there is no guarantee that the credit decisioning, pricing, loss forecasting and scoring models that we use have accurately assessed the creditworthiness of our borrowers, or will be effective in assessing creditworthiness in the future.
The collection, processing, storage, use, and disclosure of personal information could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing views of personal privacy rights. We receive, transmit, store and process a large volume of personal information and other user data.
The collection, processing, storage, use, and disclosure of personal information could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing views of personal privacy rights.
We may, however, be unaware of the intellectual property rights that others may claim cover some or all of our technology or services. In order to protect our intellectual property rights, we may be required to spend significant resources.
We may, however, be unaware of the intellectual property rights that others may claim cover some or all of our technology or services. Additionally, the use of AI may complicate our ability to obtain intellectual property rights with respect to the AI generated content. In order to protect our intellectual property rights, we may be required to spend significant resources.
While we base our estimates and assumptions on historical experience and other assumptions that we believe to be reasonable under the circumstances, our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions. 44 LENDINGCLUB CORPORATION RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK Our stock price has been and may continue to be volatile.
While we base our estimates and assumptions on historical experience and other assumptions that we believe to be reasonable under the circumstances, our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions.
Fluctuation in quarterly results and how we perform relative to guidance may adversely affect the price of our common stock. Anti-takeover provisions in our charter documents and Delaware law may delay or prevent an acquisition of our company.
Fluctuation in quarterly results and how we perform relative to guidance may adversely affect the price of our common stock, and our quarterly financial results and historical trends may not be a reliable indicator of future performance, results or trends. 48 LENDINGCLUB CORPORATION Anti-takeover provisions in our charter documents and Delaware law may delay or prevent an acquisition of our company.
Although we were profitable for the years ended December 31, 2024 and 2023, and expect to remain profitable for the year ending December 31, 2025, we have incurred net losses in the past.
Although we expect to remain profitable for the year ending December 31, 2026, we have incurred net losses in the past.
We periodically make adjustments to our compensation levels and structures as our business and the competitive market for talent evolves. Further, many of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment.
Further, many of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment.
Any inability to adequately address privacy concerns, even if unfounded, or to comply with applicable privacy or data protection laws, regulations and privacy standards, could result in additional cost and liability for us, damage our reputation, inhibit use of our marketplace bank and harm our business.
Any inability to adequately address privacy concerns, even if unfounded, or to comply with applicable privacy or data protection laws, regulations and privacy standards, could result in additional cost and liability for us, damage our reputation, inhibit use of our marketplace bank and harm our business. 44 LENDINGCLUB CORPORATION Any failure to protect our own intellectual property rights could impair our brand, or subject us to claims for alleged infringement by third parties, which could harm our business.
Our operating and financial results have varied on a quarterly basis during our operating history and may continue to fluctuate significantly. These fluctuations may be due to a variety of factors, some of which are outside of our control and may not fully reflect the underlying performance of our business.
Our quarterly results may fluctuate significantly and may not fully reflect the longer-term underlying performance of our business. Our operating and financial results have varied on a quarterly basis during our operating history and may continue to fluctuate significantly.
For example, the Tax Cuts and Jobs Act (the Tax Act) enacted on December 22, 2017, made broad and complex changes to the U.S. tax code and the Tax Act’s reduction of the federal corporate income tax rate from 35% to 21%, effective January 1, 2018, has reduced our deferred tax asset associated with net operating loss carryforwards (NOLs).
For example, the Tax Cuts and Jobs Act (the Tax Act) enacted on December 22, 2017, made broad and complex changes to the U.S. tax code and the Tax Act’s reduction of the federal corporate income tax rate from 35% to 21%.
We may be subject to examination by the tax authorities and such authorities may disagree with our tax positions, which could adversely affect our financial condition. 43 LENDINGCLUB CORPORATION Further, the amount of tax payable in a given financial statement period may be impacted by sudden or unforeseen changes in tax laws, changes in the mix and level of earnings by taxing jurisdictions, or changes to existing accounting rules or regulations.
Further, the amount of tax payable in a given financial statement period may be impacted by sudden or unforeseen changes in tax laws, changes in the mix and level of earnings by taxing jurisdictions, or changes to existing accounting rules or regulations.
We expect that our regulators will hold us responsible for deficiencies in our oversight and control of our third-party relationships and in the performance of the parties with which we have these relationships.
Regulations require us to perform due diligence of, perform ongoing monitoring of and exercise certain controls over our third-party vendors and other ongoing third-party business relationships. We expect that our regulators will hold us responsible for deficiencies in our oversight and control of our third-party relationships and in the performance of the parties with which we have these relationships.
The financial services and banking industry is increasingly competitive. We compete with financial products and companies that attract borrowers, investors or both, as described in “ Item 1.
The financial services and banking industry is highly competitive. We compete with financial products and companies that attract borrowers, depositors, and/or marketplace investors.
We periodically assess the value of these loans and in doing so we review and incorporate a number of factors including forecasted losses. Accordingly, if we fail to adequately assess the creditworthiness of borrowers such that we experience higher than forecasted losses, the value of the loans held on our balance sheet may be adversely affected.
Accordingly, if we fail to adequately assess the creditworthiness of borrowers such that we experience higher than forecasted losses, the value of the loans held on our balance sheet may be adversely affected. We continually refine these algorithms based on new data and changing macroeconomic conditions.
RISKS RELATED TO DATA, INTELLECTUAL PROPERTY AND PRIVACY Security incidents, system failures, bugs in our system, and similar disruptions could impair our operations, compromise the confidential information of our borrowers and our investors, damage our reputation, and harm our business and financial performance.
We could also become subject to investigations by the NYSE, the SEC, our banking regulators, or state agencies which could require additional financial and management resources. 41 LENDINGCLUB CORPORATION RISKS RELATED TO DATA, INTELLECTUAL PROPERTY AND PRIVACY Security incidents, system failures, bugs in our system, and similar disruptions could impair our operations, compromise the confidential information of our borrowers and our investors, damage our reputation, and harm our business and financial performance.
Additionally, changes in U.S. immigration policy may make it difficult to renew or obtain visas for certain highly skilled employees that we have hired or are recruiting.
Additionally, changes in U.S. immigration policy may make it difficult to renew or obtain visas for certain highly skilled employees that we have hired or are recruiting. For example, in September 2025, the current presidential administration issued a proclamation requiring a $100,000 fee for new H-1B visa applications.
Such negative publicity may lead to additional public scrutiny or may cause further volatility in our stock price, a decline in the value of a stockholder’s investment in us or reputational harm. Any stock price decline could have a material adverse impact on stockholder confidence and employee retention.
Such negative publicity may lead to additional public scrutiny or may cause further volatility in our stock price, a decline in the value of a stockholder’s investment in us or reputational harm. We also use equity-based compensation to recruit and retain our employees.
We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, a stockholder may only receive a return on their investment in our common stock if the trading price of our common stock increases.
We do not intend to pay dividends for the foreseeable future. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.
RISKS RELATED TO PERSONNEL AND THIRD PARTIES If we fail to attract and retain our highly skilled employees needed to support our business, we may not be able to achieve our anticipated level of growth and our business could suffer.
Further, increases in our FDIC insurance premiums in connection with bank failures, or other events, may adversely affect our results of operations and financial condition. 39 LENDINGCLUB CORPORATION RISKS RELATED TO PERSONNEL AND THIRD PARTIES If we fail to attract and retain highly skilled employees needed to support our business, we may not be able to achieve our anticipated level of growth and our business could suffer.
Our tax attributes as of December 31, 2024 may expire unutilized or underutilized, which could prevent us from offsetting future taxable income. We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize certain deferred tax assets.
We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize certain deferred tax assets.
Additionally, others may use AI to increase the frequency and severity of cybersecurity attacks against us or our third-party service providers, which could adversely impact our business and results of operations. Some aspects of our platform include open-source software, and any failure to comply with the terms of one or more of these open-source licenses could negatively affect our business.
For example, others may use AI to increase the frequency, sophistication and severity of cybersecurity attacks against us or our third-party service providers, which could adversely impact our business and results of operations.
Aspects of our platform include software covered by open-source licenses, which may include, by way of example, GNU General Public License and the Apache License. Open-source license terms are often ambiguous, and there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses.
Open-source license terms are often ambiguous, and there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses. Therefore, the potential impact of such terms on our business is somewhat unknown.
Dilution to existing holders of our common stock from equity-based compensation and other additional issuances could be substantial and may place downward pressure on our stock price. 45 LENDINGCLUB CORPORATION Our quarterly results may fluctuate significantly and may not fully reflect the longer-term underlying performance of our business.
Additional issuances of our stock may be made pursuant to the exercise or vesting of stock options or restricted stock units, respectively. Dilution to existing holders of our common stock from equity-based compensation and other additional issuances could be substantial and may place downward pressure on our stock price.
There can be no assurance that any products or services that utilize AI will be successful or that we will keep pace with the rapid evolution of AI.
There can be no assurance that any products or services that utilize AI will be successful nor is there any assurance that our use of AI will enhance our business or that the anticipated benefits of AI will materialize.
Competition for highly skilled technical and financial personnel, particularly in the San Francisco Bay Area, is extremely intense.
Competition for highly skilled technical and financial personnel, particularly in the San Francisco Bay Area, is extremely intense. Building and maintaining a positive culture and work environment that reinforces our values is also critical to attracting and retaining employees.
Because there are many different cybercrime and hacking techniques and such techniques continue to evolve, we may be unable to anticipate attempted security breaches, react in a timely manner or implement adequate preventative measures.
Any security breach, whether actual or perceived, would harm our reputation, could cause us to lose borrowers, investors and ecosystem partners and could adversely affect our business and operations. 42 LENDINGCLUB CORPORATION Because there are many different cybercrime and hacking techniques and such techniques continue to evolve, including from cyber-attacks using AI, we may be unable to anticipate attempted security breaches, react in a timely manner or implement adequate preventative or remediation measures.
The governing tax laws and applicable tax rates vary by jurisdiction and are subject to interpretation and changes.
The governing tax laws and applicable tax rates vary by jurisdiction and are subject to interpretation and changes. We may be subject to examination by the tax authorities and such authorities may disagree with our tax positions, which could adversely affect our financial condition.
Building and maintaining a positive culture and work environment that reinforces our values is also critical to attracting and retaining employees. 37 LENDINGCLUB CORPORATION We have previously experienced a high attrition rate from employees and while attrition rates have materially reduced recently, they may again become elevated.
We have previously experienced a high attrition rate from employees and while attrition rates have materially reduced recently, they may again become elevated. We periodically make adjustments to our compensation levels and structures as our business and the competitive market for talent evolves.
Removed
Item 1A. Risk Factors ” and elsewhere in our Annual Report, such as our exposure to the credit and default risk of borrowers, maintaining and increasing loan originations, maintaining our deposit base and retaining our marketplace investors. Fluctuations in interest rates could negatively affect transaction volume and our net interest income.
Added
Furthermore, as stated above, we hold loans on our balance sheet. We periodically assess the value of these loans and in doing so we review and incorporate a number of factors including forecasted losses.
Removed
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.
Added
Further, competition within the financial services industry is increasing as technology (such as artificial intelligence) enables efficiencies and innovations, additional companies obtain bank charters, and non-banks expand the scope of their products and services.
Removed
If interest rates decrease after a loan is made, existing borrowers may prepay their loans to take advantage of the lower 31 LENDINGCLUB CORPORATION rates. Furthermore, investors would lose the opportunity to collect the higher interest rate payable on the corresponding loan and may delay or reduce future loan investments.
Added
For example, in response to the proposal for a 10% cap on credit card interest rates, and as of the date of this Annual Report, certain companies or financial institutions are offering or are reported to be considering offering credit card products with a 10% promotional interest rate.
Removed
Our net interest income is the interest we earn on loans and investments less the interest we pay on our deposits and borrowings. Our net interest margin is the difference between the yield we earn on our assets and the interest rate we pay for deposits and our other sources of funding.
Added
A significant portion of loan customers use our personal loan product to refinance existing higher interest rate credit card debt into a lower interest rate personal loan with us.
Removed
Changes in interest rates will cause our net interest income and margin to increase or decrease. To the extent that we hold loans for sale on our balance sheet, we will be at risk to rising interest rates between origination and sale.
Added
Lower interest rates on credit cards could be accompanied by a reduction in credit availability, which may present an opportunity for us to offer our personal loan product to customers unable to obtain credit through credit cards.
Removed
In order to sell such loans, we may need to reduce the sale price in order to satisfy the yield expectations of our marketplace investors.
Added
However, the impact of a reduction in credit card interest rates, net of any potential opportunities we may have as a result, especially a sustained, a broad-based and/or retroactively applied reduction, is uncertain and could materially and adversely impact our origination volume, financial condition and results of operations. We could be adversely affected by the soundness of other financial institutions.
Removed
Further, we are exposed to interest rate risk because our interest-earning assets and interest-bearing sources of funding do not react uniformly or concurrently to changes in interest rates, as the two have different time periods for adjustment and can be tied to different measures of rates.
Added
We cannot predict what other changes, if any, will be made to U.S. immigration policy, whether the changes will be retained or the effect that such changes may have on our business and earnings prospects or our ability to recruit or hire highly skilled employees.
Removed
Fluctuations in the interest rate environment may impact our net interest income, net interest margin and/or discourage investors and borrowers from participating on our marketplace bank platform and may reduce our loan originations, any of which may adversely affect our business.
Added
Additionally, while we have a third-party risk management program, we do not control our third-party service providers and there can be no assurance that they will notify us of any potential risks or incidents in a timely manner or that our risk management program will mitigate the negative impact of a third-party service provider on our business. 40 LENDINGCLUB CORPORATION Additionally, our use of third-party vendors is subject to increasingly demanding regulatory requirements and attention by our regulators.
Removed
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.
Added
We receive, transmit, store and process a large volume of personal information and other user data, and as our products and services are mobile and internet-based, the amount of data we store for our customers has been increasing and will continue to increase.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, we cannot eliminate all risks from cybersecurity threats or provide assurances that we have not experienced undetected cybersecurity incidents of a material nature.
Biggest changeIn 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, we cannot eliminate all risks from cybersecurity threats or provide assurances that we have not experienced undetected cybersecurity incidents of a material nature.
A key part of our strategy for managing risks from cybersecurity threats is the assessment and testing of our processes and practices through auditing, assessments, tabletop exercises, threat modeling, vulnerability scanning 47 LENDINGCLUB CORPORATION and other exercises focused on evaluating the effectiveness of our cybersecurity measures.
A key part of our strategy for managing risks from cybersecurity threats is the assessment and testing of our processes and practices through auditing, assessments, tabletop exercises, threat modeling, vulnerability scanning 50 LENDINGCLUB CORPORATION and other exercises focused on evaluating the effectiveness of our cybersecurity measures.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters are located in San Francisco, California and consist of approximately 115,000 square feet of office space under a lease that expires in 2026.
Biggest changeItem 2. Properties In April 2025, we acquired a 233,887 square foot office building located in San Francisco, California. Approximately 100,000 square feet will be used as our headquarters beginning in the second quarter of 2026, following the expiration of our current San Francisco headquarters office lease.
With the exception of New York, we have renewal options to extend the terms of all of our leases. We believe our current leased properties are adequate for our immediate business needs. For more information regarding our leases, see “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 18.
We believe our current leased properties are adequate for our immediate business needs. 51 LENDINGCLUB CORPORATION For more information regarding our leases, see “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 17. Leases ” of this Annual Report.
Removed
Leases ” of this Annual Report. 48 LENDINGCLUB CORPORATION

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information set forth under “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 19. Commitments and Contingencies ” of this Annual Report is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 49 LENDINGCLUB CORPORATION PART II
Biggest changeItem 3. Legal Proceedings The information set forth under “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 18. Commitments and Contingencies ” of this Annual Report is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 52 LENDINGCLUB CORPORATION PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 49 PART II 50 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 50 Item 6. [Reserved] 52 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53
Biggest changeItem 4. Mine Safety Disclosures 52 PART II 53 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 Item 6. [Reserved] 55 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 56

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities None. 50 LENDINGCLUB CORPORATION Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of LendingClub under the Securities Act, or the Exchange Act.
Biggest changeInclusive of the Q4 Holdback and as of December 31, 2025, we have utilized a total of $11.9 million of the $100 million authorization under the Repurchase and Acquisition Program to acquire a total of 676,712 shares of our common stock at an average per share price of $17.65. 54 LENDINGCLUB CORPORATION Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of LendingClub under the Securities Act, or the Exchange Act.
An investment of $100 (with reinvestment of all dividends, when applicable) is assumed to have been made in LendingClub’s common stock and in each index at market close on December 31, 2019 and its relative performance is tracked through December 31, 2024. The returns shown are based on historical results and are not intended to suggest future performance.
An investment of $100 (with reinvestment of all dividends, when applicable) is assumed to have been made in LendingClub’s common stock and in each index at market close on December 31, 2020 and its relative performance is tracked through December 31, 2025. The returns shown are based on historical results and are not intended to suggest future performance.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock LendingClub’s common stock is listed on the New York Stock Exchange (NYSE) under the ticker symbol “LC.” Holders of Record As of January 31, 2025, there were 33 holders of record of LendingClub’s common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock LendingClub’s common stock is listed on the New York Stock Exchange (NYSE) under the ticker symbol “LC.” Holders of Record As of January 30, 2026, there were 32 holders of record of LendingClub’s common stock.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 20. Regulatory Requirements ” for a summary of certain rules and regulations that limit the ability of the Company or LC Bank to pay dividends. Sales of Unregistered Securities None.
Regulatory Requirements ” for a summary of certain rules and regulations that limit the ability of the Company or LC Bank to pay dividends.
Because many of LendingClub’s shares of common stock are held by brokers and other institutions on behalf of stockholders, the Company is unable to estimate the total number of stockholders represented by these record holders.
Because many of LendingClub’s shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. Dividend Policy We have not paid cash or other dividends since our inception and do not anticipate paying cash or other dividends in the foreseeable future.
Dividend Policy LendingClub has not paid cash or other dividends since its inception and does not anticipate paying cash or other dividends in the foreseeable future. Further, see “ Part I – Item 1. Business – Regulation and Supervision – Regulatory Limits on Dividends and Distributions ” and “Item 8.
Further, see “ Part I – Item 1. Business – Regulation and Supervision – Regulatory Limits on Dividends and Distributions ” and “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 19.
Removed
December 31, 2019 December 31, 2020 December 31, 2021 December 30, 2022 December 29, 2023 December 31, 2024 LendingClub Corporation $ 100 $ 83.68 $ 191.60 $ 69.73 $ 69.26 $ 128.29 KBW Nasdaq Bank Index $ 100 $ 86.37 $ 116.64 $ 88.96 $ 84.70 $ 112.45 Standard & Poor’s 500 Index $ 100 $ 116.26 $ 147.52 $ 118.84 $ 147.64 $ 182.05 51 LENDINGCLUB CORPORATION
Added
Sales of Unregistered Securities None. 53 LENDINGCLUB CORPORATION Issuer Purchases of Equity Securities On November 4, 2025, our Board of Directors approved a program to repurchase and acquire up to $100 million of our common stock through December 31, 2026 (the Repurchase and Acquisition Program).
Added
The Repurchase and Acquisition Program is inclusive of the anticipated fair market value of shares of our common stock acquired by holding back a portion of vesting restricted stock units held by our employees to satisfy applicable tax withholding obligations.
Added
The timing, amount and methodology of shares acquired through the Repurchase and Acquisition Program are discretionary and will depend on our stock price, business and market conditions, and other factors.
Added
The following table sets forth information on LendingClub’s share repurchase activity for the fourth quarter of 2025 (dollars in millions, except per share data): Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) October 1 – October 31, 2025 — $ — — $ — November 1 – November 30, 2025 234,685 $ 17.33 234,685 $ 91.1 December 1 – December 31, 2025 154,939 $ 19.70 154,939 $ 88.1 Total 389,624 $ 18.27 389,624 (1) In November 2025, we utilized $4.8 million to hold back 287,088 shares of our common stock at an average per share price of $16.80 to satisfy applicable tax withholding obligations in connection with the vesting of restricted units held by our employees (the Q4 Holdback).
Added
December 31, 2020 December 31, 2021 December 30, 2022 December 29, 2023 December 31, 2024 December 31, 2025 LendingClub Corporation $ 100 $ 228.98 $ 83.33 $ 82.77 $ 153.31 $ 179.36 KBW Nasdaq Bank Index $ 100 $ 135.04 $ 103.00 $ 98.07 $ 130.19 $ 167.68 Standard & Poor’s 500 Index $ 100 $ 126.89 $ 102.22 $ 126.99 $ 156.59 $ 182.25

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following tables provide a reconciliation of PPNR to the nearest GAAP measure: For the year ended December 31, 2024 2023 2022 GAAP Net income $ 51,330 $ 38,939 $ 289,685 Less: Provision for credit losses (178,267) (243,565) (267,326) Less: Income tax (expense) benefit (13,736) (15,678) 136,648 Pre-provision net revenue $ 243,333 $ 298,182 $ 420,363 69 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) For the year ended December 31, 2024 2023 2022 Non-interest income $ 252,970 $ 302,781 $ 712,391 Net interest income 534,041 561,838 474,825 Total net revenue 787,011 864,619 1,187,216 Non-interest expense (543,678) (566,437) (766,853) Pre-provision net revenue 243,333 298,182 420,363 Provision for credit losses (178,267) (243,565) (267,326) Income before income tax (expense) benefit 65,066 54,617 153,037 Income tax (expense) benefit (13,736) (15,678) 136,648 GAAP Net income $ 51,330 $ 38,939 $ 289,685 The following table provides a reconciliation of TBV Per Common Share to the nearest GAAP measure: As of December 31, 2024 2023 2022 GAAP common equity $ 1,341,731 $ 1,251,822 $ 1,164,294 Less: Goodwill (75,717) (75,717) (75,717) Less: Customer relationship intangible assets (8,586) (12,135) (16,334) Tangible common equity $ 1,257,428 $ 1,163,970 $ 1,072,243 Book value per common share GAAP common equity $ 1,341,731 $ 1,251,822 $ 1,164,294 Common shares issued and outstanding 113,383,917 110,410,602 106,546,995 Book value per common share $ 11.83 $ 11.34 $ 10.93 Tangible book value per common share Tangible common equity $ 1,257,428 $ 1,163,970 $ 1,072,243 Common shares issued and outstanding 113,383,917 110,410,602 106,546,995 Tangible book value per common share $ 11.09 $ 10.54 $ 10.06 The following table provides a reconciliation of ROTCE to the nearest GAAP measure: As of and For The Year Ended December 31, 2024 2023 2022 Average GAAP common equity $ 1,291,938 $ 1,204,050 $ 1,019,280 Less: Average goodwill (75,717) (75,717) (75,717) Less: Average customer relationship intangible assets (10,324) (14,198) (18,721) Average tangible common equity $ 1,205,897 $ 1,114,135 $ 924,842 Return on average equity GAAP net income $ 51,330 $ 38,939 $ 289,685 Average GAAP common equity 1,291,938 1,204,050 1,019,280 Return on average equity 4.0 % 3.2 % 28.4 % Return on tangible common equity GAAP net income $ 51,330 $ 38,939 $ 289,685 Average tangible common equity 1,205,897 1,114,135 924,842 Return on tangible common equity 4.3 % 3.5 % 31.3 % 70 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) The following table provides a reconciliation of Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit to the nearest GAAP measures: As of and For The Year Ended December 31, 2024 2023 2022 GAAP Net income $ 51,330 $ 38,939 $ 289,685 Income tax benefit from release of tax valuation allowance — — 143,495 Net income excluding income tax benefit $ 51,330 $ 38,939 $ 146,190 GAAP Diluted EPS – common stockholders $ 0.45 $ 0.36 $ 2.79 (A) Income tax benefit from release of tax valuation allowance N/A N/A $ 143,495 (B) Weighted-average common shares – Diluted N/A N/A 104,001,288 (A/B) Diluted EPS impact of income tax benefit N/A N/A $ 1.38 Diluted EPS excluding income tax benefit $ 0.45 $ 0.36 $ 1.41 N/A – Not applicable Supervision and Regulatory Environment We are subject to periodic exams, investigations, inquiries or requests, enforcement actions and other proceedings from federal and state regulatory and/or law enforcement agencies, including the federal banking regulators that directly regulate the Company and/or LC Bank.
Biggest changeThe following tables provide a reconciliation of PPNR to the nearest GAAP measure: For the year ended December 31, 2025 2024 2023 GAAP Net income $ 135,677 $ 51,330 $ 38,939 Less: Provision for credit losses (191,320) (178,267) (243,565) Less: Income tax expense (41,269) (13,736) (15,678) Pre-provision net revenue $ 368,266 $ 243,333 $ 298,182 For the year ended December 31, 2025 2024 2023 Non-interest income $ 373,176 $ 252,970 $ 302,781 Net interest income 625,672 534,041 561,838 Total net revenue 998,848 787,011 864,619 Non-interest expense (630,582) (543,678) (566,437) Pre-provision net revenue 368,266 243,333 298,182 Provision for credit losses (191,320) (178,267) (243,565) Income before income tax expense 176,946 65,066 54,617 Income tax expense (41,269) (13,736) (15,678) GAAP Net income $ 135,677 $ 51,330 $ 38,939 73 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) The following table provides a reconciliation of TBV Per Common Share to the nearest GAAP measure: As of December 31, 2025 2024 2023 GAAP common equity $ 1,500,428 $ 1,341,731 $ 1,251,822 Less: Goodwill (75,717) (75,717) (75,717) Less: Customer relationship intangible assets (5,685) (8,586) (12,135) Tangible common equity $ 1,419,026 $ 1,257,428 $ 1,163,970 Book value per common share GAAP common equity $ 1,500,428 $ 1,341,731 $ 1,251,822 Common shares issued and outstanding 115,368,987 113,383,917 110,410,602 Book value per common share $ 13.01 $ 11.83 $ 11.34 Tangible book value per common share Tangible common equity $ 1,419,026 $ 1,257,428 $ 1,163,970 Common shares issued and outstanding 115,368,987 113,383,917 110,410,602 Tangible book value per common share $ 12.30 $ 11.09 $ 10.54 The following table provides a reconciliation of ROTCE to the nearest GAAP measure: As of and for the year ended December 31, 2025 2024 2023 Average GAAP common equity $ 1,407,528 $ 1,291,938 $ 1,204,050 Less: Average goodwill (75,717) (75,717) (75,717) Less: Average customer relationship intangible assets (7,099) (10,324) (14,198) Average tangible common equity $ 1,324,712 $ 1,205,897 $ 1,114,135 Return on average equity GAAP net income $ 135,677 $ 51,330 $ 38,939 Average GAAP common equity 1,407,528 1,291,938 1,204,050 Return on average equity 9.6 % 4.0 % 3.2 % Return on tangible common equity GAAP net income $ 135,677 $ 51,330 $ 38,939 Average tangible common equity 1,324,712 1,205,897 1,114,135 Return on tangible common equity 10.2 % 4.3 % 3.5 % 74 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Supervision and Regulatory Environment We are subject to supervision, regulation, examination, enforcement and other proceedings by multiple federal banking regulatory bodies.
The provision for credit losses includes the credit loss expense for HFI loans and leases at amortized cost, available for sale (AFS) securities and unfunded lending commitments.
The provision for credit losses includes the credit loss expense for loans and leases HFI at amortized cost, available for sale (AFS) securities and unfunded lending commitments.
Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses .” 65 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Non-interest Expense 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 fees and (vi) occupancy, which includes rent expense and all other costs related to occupying our office spaces.
Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses .” 68 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Non-Interest Expense 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 fees, and (vi) occupancy, which includes rent expense and all other costs related to occupying our office spaces.
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 costs, to provide a constant rate of return over the loan term.
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 effective interest rate is 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 costs, to provide a constant rate of return over the contractual loan term.
The effective interest rate is 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 contractual loan term.
(2) Prior period amounts have been reclassified to conform to the current period presentation. 62 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Provision for Credit Losses The allowance for loan and lease losses (ALLL) for lifetime expected losses under CECL on HFI loans and leases at amortized cost is initially recognized as “Provision for credit losses” at the time of origination.
(2) Prior period amounts have been reclassified to conform to the current period presentation. 65 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Provision for Credit Losses The allowance for loan and lease losses (ALLL) for lifetime expected losses under CECL on loans and leases HFI at amortized cost is initially recognized as “Provision for credit losses” at the time of origination.
This segment provides a full complement of financial products and solutions, including loans and deposits. It originates loans to individuals and businesses, retains loans for investment, sells loans to investors and manages relationships with deposit holders.
This segment provides a full complement of financial products and solutions, including loans and deposits. It originates loans to individuals and businesses, retains loans for investment, sells loans to marketplace investors and manages relationships with deposit holders.
Our non-GAAP financial measures do have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP.
Our non-GAAP financial measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP.
Further, we are subject to claims, individual and class action lawsuits, and lawsuits alleging regulatory violations. Although historically the Company has generally resolved these matters in a manner that was not materially adverse to its financial results or business operations, no assurance can be given as to the timing, outcome or consequences of any of these matters in the future.
Additionally, we are subject to claims, individual and class action lawsuits, and lawsuits alleging regulatory violations. Although historically the Company has generally resolved these matters in a manner that was not materially adverse to its financial results or business operations, no assurance can be given as to the timing, outcome or consequences of any of these matters in the future.
Uses of cash at the holding company include the routine cash flow requirements as a bank holding company, such as interest and expenses (including those associated with our office leases), the needs of LC Bank for additional equity and, as required, its need for debt financing and support for extraordinary funding requirements when necessary.
Uses of cash at the holding company include the routine cash flow requirements as a bank holding company, such as interest and expenses (including those associated with our office leases), share repurchases, the needs of LC Bank for additional equity and, as required, its need for debt financing and support for extraordinary funding requirements when necessary.
Principal payments on our loans HFI continue to reduce the outstanding balance of this portfolio, and, as a result, the fair value impact from changes in interest rates continues to diminish. Contingencies For a comprehensive discussion of contingencies as of December 31, 2024, see “ Item 8.
Principal payments on our HFI loans continue to reduce the outstanding balance of this portfolio, and, as a result, the fair value impact from changes in interest rates continues to diminish. Contingencies For a comprehensive discussion of contingencies as of December 31, 2025, see “ Item 8.
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 ALLL on originated HFI loans at amortized cost.
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 at amortized cost.
This information is reviewed according to the legal organizational structure of the Company’s operations with products and services presented separately for the parent bank holding company and its wholly-owned subsidiary, LC Bank, which are both considered reportable segments.
This information is reviewed according to the legal organizational structure of our operations with products and services presented separately for the parent bank holding company and its wholly-owned subsidiary, LC Bank, which are both considered reportable segments.
Additionally, a capital conservation buffer of 2.5% must be maintained above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases, and certain discretionary bonus payments.
Additionally, a capital conservation buffer of 2.5% must be maintained above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, share repurchases, and certain discretionary bonus payments.
Factors Impacting Liquidity The Company’s liquidity could be adversely impacted by deteriorating financial and market conditions, the inability or unwillingness of a creditor to provide funding, an idiosyncratic event (e.g., a major loss, causing a perceived or actual deterioration in its financial condition), an adverse systemic event (e.g., default or bankruptcy of a significant capital markets participant), or others.
Factors Impacting Liquidity Our liquidity could be adversely impacted by deteriorating financial and market conditions, the inability or unwillingness of a creditor to provide funding, an idiosyncratic event (e.g., a major loss, causing a perceived or actual deterioration in our financial condition), an adverse systemic event (e.g., default or bankruptcy of a significant capital markets participant), or others.
Results of Operations This section of this Form 10-K generally discusses 2024 and 2023 items and year-over-year comparisons between 2024 and 2023. For discussion related to 2022 items and year-over-year comparisons between 2023 and 2022, see “ Part II – Item 7.
Results of Operations This section of this Form 10-K generally discusses 2025 and 2024 items and year-over-year comparisons between 2025 and 2024. For discussion related to 2023 items and year-over-year comparisons between 2024 and 2023, see “ Part II – Item 7.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 19. Commitments and Contingencies. ” Critical Accounting Estimates Our significant accounting policies are described in “ Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 18. Commitments and Contingencies. ” Critical Accounting Estimates Our significant accounting policies are described in “ Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1.
The following table presents the change in projected net interest income for the next twelve months due to a hypothetical instantaneous parallel change in interest rates relative to current rates: December 31, 2024 December 31, 2023 Instantaneous Change in Interest Rates: + 200 basis points (7.1) % (4.8) % + 100 basis points (3.5) % (2.2) % - 100 basis points 1.1 % — % - 200 basis points 1.6 % (0.4) % As illustrated in the table above, net interest income is projected to decrease over the next twelve months during hypothetical rising interest rate environments primarily as a result of higher rates paid on interest-bearing deposits, partially offset by higher rates earned on new loans, security purchases, and cash and cash equivalents as well as by the impact of our hedging activity.
The following table presents the change in projected net interest income for the next twelve months due to a hypothetical instantaneous parallel change in interest rates relative to current rates: December 31, 2025 December 31, 2024 Instantaneous Change in Interest Rates: + 200 basis points (7.8) % (7.1) % + 100 basis points (3.8) % (3.5) % - 100 basis points 3.2 % 1.1 % - 200 basis points 5.9 % 1.6 % As illustrated in the table above, net interest income is projected to decrease over the next twelve months during hypothetical rising interest rate environments primarily as a result of higher rates paid on interest-bearing deposits, partially offset by higher rates earned on new loans, security purchases, and cash and cash equivalents, offset by the impact of our hedging activity.
The measure of segment profit used by the CODM in this evaluation is net income. The CODM consists of the Company’s Chief Executive Officer and Chief Financial Officer.
The measure of segment profit used by the CODM in this evaluation is net income. The CODM consists of our Chief Executive Officer and Chief Financial Officer.
Furthermore, during fluctuating interest rate environments, the increased sensitivity of repricing interest-bearing deposits is more impactful than that of repricing fixed-rate loans.
Furthermore, during fluctuating interest rate environments, the repricing of interest-bearing deposits is more impactful than that of repricing fixed-rate loans.
Servicing Fees We receive servicing fees to compensate us for servicing loans on behalf of investors, including managing payments from borrowers, collections and payments to those investors.
Servicing Fees We receive servicing fees to compensate us for servicing loans on behalf of marketplace investors, including managing payments from borrowers and remittances to those investors.
Management may make adjustments as the assumptions in the underlying analyses change to reflect an estimate of expected lifetime loan losses and prepayments at the reporting date, based on the best information available at that time. 77 LENDINGCLUB CORPORATION Item 7A.
Management may make adjustments as the assumptions in the underlying analyses change to reflect an estimate of expected lifetime loan losses and prepayments at the reporting date, based on the best information available at that time.
Gain on Sales of Loans In connection with loan sales, we recognize a gain or loss on the sale of loans 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.
A gain or loss is recorded 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.
The following tables present the unpaid principal balance of the volume of marketplace loans sold, which is a key driver of our gain on sales revenue, during each of the periods set forth below: Year Ended December 31, 2024 2023 2022 2024 vs. 2023 Change (%) 2023 vs. 2022 Change (%) Marketplace loans sold (1) $ 4,716,173 $ 4,749,411 $ 9,034,583 (1) % (47) % (1) Includes unsecured personal loans and auto loans only.
The following tables present the unpaid principal balance of the volume of marketplace loans sold, which is a key driver of our gain on sales revenue, during each of the periods set forth below: Year Ended December 31, 2025 2024 2023 2025 vs. 2024 Change (%) 2024 vs. 2023 Change (%) Marketplace loans sold (1) $ 5,377,856 $ 4,716,173 $ 4,749,411 14 % (1) % (1) Includes unsecured personal loans and auto loans only.
We actively review capital through a process that continuously assesses and monitors the Company’s overall capital adequacy. Our objective is to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to meet both regulatory and market expectations.
Capital Management The prudent management of capital is fundamental to the successful achievement of our business initiatives. We actively review capital through a process that continuously assesses and monitors the Company’s overall capital adequacy. Our objective is to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to meet both regulatory and market expectations.
Although we believe that these measurements provide an estimate of our interest rate sensitivity, they do not account for potential changes in credit quality, balance sheet mix, size of our balance sheet, or other business developments that could affect net income.
Although we believe that these measurements provide an estimate of our interest rate sensitivity, they do not account for potential changes in credit quality, balance sheet mix, size of our balance sheet, or other business developments that could affect net income. Actual results could differ materially from the estimated outcomes of our simulations.
Income Taxes For the years ended December 31, 2024 and 2023, we recorded an income tax expense of $13.7 million and $15.7 million, representing an effective tax rate of 21.1% and 28.7%, respectively.
Income Taxes For the years ended December 31, 2025 and 2024, we recorded an income tax expense of $41.3 million and $13.7 million, representing an effective tax rate of 23.3% and 21.1%, respectively.
The following table presents nonaccrual loans and leases: As of December 31, 2024 2023 Nonaccrual loans and leases held for investment at amortized cost $ 72,304 $ 44,382 % of total loans and leases held for investment 1.8 % 0.9 % For additional information on the ACL and nonaccrual loans and leases, see “ Item 8.
The following table presents nonaccrual loans and leases: As of December 31, 2025 2024 Nonaccrual loans and leases held for investment at amortized cost $ 60,432 $ 72,304 % of total loans and leases held for investment 1.4 % 1.8 % For additional information on the ACL and nonaccrual loans and leases, see “ Item 8.
(2) As of December 31, 2024 and 2023 , the Company had $3.2 billion and $3.5 billion in loans pledged under the FRB Discount Window, respectively. (3) As of December 31, 2024 , the Company had $456.4 million in loans and $373.5 million in securities pledged to the FHLB of Des Moines.
(2) As of December 31, 2025 and 2024, the Company had $4.2 billion and $3.2 billion in loans pledged under the FRB Discount Window, respectively. (3) As of December 31, 2025 , the Company had $486.2 million in loans and $375.7 million in securities pledged to the FHLB of Des Moines.
Estimates of expected future loan losses are determined by using statistical models and management’s judgement. The models are designed to forecast probability and timing of default, loss rate exposure at default, recovery expectations, and timing and amount of estimated prepayments by correlating certain macroeconomic unemployment forecast data to historical experience.
Estimates of expected future loan losses are determined by using statistical models and management’s judgment. The models are designed to forecast probability and timing of default, loss rate exposure at default, recovery expectations, and timing and amount of estimated prepayments.
With the election of the fair value option, origination fees, net fair value adjustments prior to sale of the loans, and servicing asset gains on the sales of the loans, are reported as separate components within “Marketplace revenue.” Origination Fees Origination fees recorded as a component of marketplace revenue are primarily fees earned related to originating and issuing unsecured personal loans that are HFS.
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 Origination fees recorded as a component of marketplace revenue are fees charged to borrowers in connection with the origination of loans that are HFS.
The following table presents the components of the allowance for loan and lease losses: Year Ended December 31, 2024 2023 2022 Gross allowance for loan and lease losses (1) $ 285,686 $ 355,773 $ 340,369 Recovery asset value (2) (48,952) (45,386) (12,517) Allowance for loan and lease losses $ 236,734 $ 310,387 $ 327,852 (1) Represents the allowance for future estimated net charge-offs on existing portfolio balances.
The following table presents the components of the ALLL: Year Ended December 31, 2025 2024 2023 Gross allowance for loan and lease losses (1) $ 312,667 $ 285,686 $ 355,773 Recovery asset value (2) (36,924) (48,952) (45,386) Allowance for loan and lease losses $ 275,743 $ 236,734 $ 310,387 (1) Represents the allowance for future estimated net charge-offs on existing portfolio balances.
The following table presents loan origination volume during each of the periods set forth below: Year Ended December 31, 2024 2023 2022 2024 vs. 2023 Change (%) 2023 vs. 2022 Change (%) Marketplace loans $ 5,482,339 $ 5,252,668 $ 9,389,445 4 % (44) % Loan originations held for investment 1,735,409 2,184,095 3,731,057 (21) % (41) % Total loan originations (1) $ 7,217,748 $ 7,436,763 $ 13,120,502 (3) % (43) % (1) Includes unsecured personal loans and auto loans only.
The following table presents loan origination volume during each of the periods set forth below: Year Ended December 31, 2025 2024 2023 2025 vs. 2024 Change (%) 2024 vs. 2023 Change (%) Marketplace loans $ 7,134,117 $ 5,482,339 $ 5,252,668 30 % 4 % Loan originations held for investment 2,454,743 1,735,409 2,184,095 41 % (21) % Total loan originations (1) $ 9,588,860 $ 7,217,748 $ 7,436,763 33 % (3) % (1) Includes unsecured personal loans and auto loans only.
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. 60 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Net Interest Income The table below presents net interest income information corresponding to interest-earning assets and interest-bearing funding sources.
Fair Value 62 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Measurements ” for additional information related to the significant unobservable inputs used in the fair value measurement of HFS loans and activity within the HFS loan portfolio.
We believe TBV Per Common Share is an important measure used to evaluate the Company’s use of equity. TBV Per Common Share is a non-GAAP financial measure representing tangible common equity for the period (common equity reduced by goodwill and customer relationship intangible assets), divided by the ending number of common shares issued and outstanding.
TBV Per Common Share is a non-GAAP financial measure representing tangible common equity for the period (common equity reduced by goodwill and customer relationship intangible assets), divided by the ending number of common shares issued and outstanding. We believe ROTCE is an important measure because it reflects the Company's ability to generate income from its core assets.
The table below illustrates the composition of the provision for credit losses for each period presented, as well as the loan originations held for investment in each period, which is a key driver for credit loss expense: Year Ended December 31, 2024 2023 2022 Credit loss expense for loans and leases held for investment $ 175,430 $ 243,570 $ 266,679 Credit loss expense for securities available for sale 3,527 — — Credit loss expense (benefit) for unfunded lending commitments (690) (5) 647 Total provision for credit losses $ 178,267 $ 243,565 $ 267,326 Loan originations held for investment $ 1,735,409 $ 2,184,095 $ 3,731,057 The provision for credit losses was $178.3 million and $243.6 million for the years ended December 31, 2024 and 2023, respectively, a decrease of 27%.
The table below illustrates the composition of the provision for credit losses for each period presented, as well as the loan originations HFI in each period, which is a key driver for credit loss expense: Year Ended December 31, 2025 2024 2023 Credit loss expense for loans and leases held for investment $ 190,928 $ 175,430 $ 243,570 Credit loss expense for securities available for sale 566 3,527 — Credit loss benefit for unfunded lending commitments (174) (690) (5) Total provision for credit losses $ 191,320 $ 178,267 $243,565 Loan originations held for investment $ 2,454,743 $ 1,735,409 $2,184,095 The provision for credit losses was $191.3 million and $178.3 million for the years ended December 31, 2025 and 2024, respectively, an increase of 7%.
The NPV from the DCF approach is then compared to the amortized cost basis of the loans and leases to derive expected credit losses.
The NPV from the DCF approach is then compared to the amortized cost basis of the loans and leases to determine the ALLL.
Further, as a national bank, LC Bank is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the Office of the Comptroller of the Currency (OCC).
Specifically, as a bank holding company, the Company is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the Board of Governors of the Federal Reserve System (FRB). Further, as a national bank, LC Bank is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the Office of the Comptroller of the Currency (OCC).
Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 87% of total deposits as of December 31, 2024. The above summary should be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations in its entirety.
The increase was primarily due to growth in our high-yield savings deposits. ◦ Federal Deposit Insurance Corporation (FDIC)-insured deposits represent approximately 88% of total deposits as of December 31, 2025. The above summary should be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations in its entirety.
GAAP and certain adjustments made in accordance with regulatory capital guidelines, including the addition of the CECL transitional benefit and deductions for goodwill and other intangible assets. The higher risk-based capital ratios for the Company reflect higher capital at LendingClub Corporation as compared with LC Bank.
(2) CET1 capital consists of common stockholders’ equity as defined under U.S. GAAP and certain adjustments made in accordance with regulatory capital guidelines, including deductions for goodwill and other intangible assets. The higher risk-based capital ratios for the Company reflect higher capital at LendingClub Corporation as compared with LC Bank.
Professional services expense decreased $3.1 million, or 9%, for the year ended December 31, 2024 compared to the same period in 2023.
Professional services expense increased $10.3 million, or 32%, for the year ended December 31, 2025 compared to the same period in 2024.
The effective tax rate for the year ended December 31, 2024 differs from the statutory rate due to the favorable impact of recurring tax credits and the unfavorable impact of the non-deductible portions of executive compensation and stock-based compensation.
The effective tax rate for the year ended December 31, 2025 differs from the statutory rate due to state taxes, the favorable impact of recurring tax credits, changes in unrecognized tax benefits related to prior year tax credits, equity-based compensation, and the unfavorable impact of the non-deductible portions of executive compensation.
As of December 31, 2023 , the Company had $479.0 million in loans and $359.5 million in securities pledged to the FHLB of Des Moines.
As of December 31, 2024, the Company had $456.4 million in loans and $373.5 million in securities pledged to the FHLB of Des Moines.
The decrease was primarily due to a decrease in consulting fees. 66 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Occupancy expense decreased $1.7 million, or 10%, for the year ended December 31, 2024 compared to the same period in 2023.
The increase was primarily due to an increase in business consulting services. 69 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Occupancy expense increased $4.0 million, or 26%, for the year ended December 31, 2025 compared to the same period in 2024.
Accordingly, we have been and continue to invest in regulatory compliance and 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.
Accordingly, we have been and continue to invest in regulatory compliance and 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. Further, we are subject to periodic supervision, regulation, examination, enforcement and other proceedings from various other federal and state regulatory and/or law enforcement agencies.
(5) Assets under management (AUM) reflects loans serviced on our platform, which includes outstanding balances of unsecured personal loans, auto refinance loans and education and patient finance loans serviced for others and retained by the Company. 55 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) As of December 31, 2024 2023 Balance Sheet Data: Securities available for sale $ 3,452,648 $ 1,620,262 Loans held for sale at fair value $ 636,352 $ 407,773 Loans and leases held for investment at amortized cost $ 4,125,818 $ 4,850,302 Gross allowance for loan and lease losses (1) $ (285,686) $ (355,773) Recovery asset value (2) $ 48,952 $ 45,386 Allowance for loan and lease losses $ (236,734) $ (310,387) Loans and leases held for investment at amortized cost, net $ 3,889,084 $ 4,539,915 Loans held for investment at fair value (3)(4) $ 1,027,798 $ 272,678 Total loans and leases held for investment (3)(4) $ 4,916,882 $ 4,812,593 Total assets $ 10,630,509 $ 8,827,463 Total deposits $ 9,068,237 $ 7,333,486 Total liabilities $ 9,288,778 $ 7,575,641 Total equity $ 1,341,731 $ 1,251,822 Allowance Ratios (5) : ALLL to total loans and leases held for investment at amortized cost 5.7 % 6.4 % ALLL to commercial loans and leases held for investment at amortized cost 3.9 % 1.8 % ALLL to consumer loans and leases held for investment at amortized cost 6.1 % 7.2 % Gross ALLL to consumer loans and leases held for investment at amortized cost 7.5 % 8.3 % Net charge-offs $ 249,083 $ 261,035 Net charge-off ratio (6) 5.8 % 4.9 % (1) Represents the allowance for future estimated net charge-offs on existing portfolio balances.
(4) Assets under management (AUM) reflects loans serviced on our platform, which includes outstanding balances of unsecured personal loans and auto refinance loans serviced for others and retained by the Company as of the end of the periods presented. 58 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) As of December 31, 2025 2024 Balance Sheet Data: Securities available for sale $ 3,706,709 $ 3,452,648 Loans held for sale at fair value $ 1,762,396 $ 636,352 Loans and leases held for investment at amortized cost $ 4,272,812 $ 4,125,818 Gross allowance for loan and lease losses (1) $ (312,667) $ (285,686) Recovery asset value (2) $ 36,924 $ 48,952 Allowance for loan and lease losses $ (275,743) $ (236,734) Loans and leases held for investment at amortized cost, net $ 3,997,069 $ 3,889,084 Loans held for investment at fair value $ 473,314 $ 1,027,798 Total loans and leases held for investment $ 4,470,383 $ 4,916,882 Total assets $ 11,567,816 $ 10,630,509 Total deposits $ 9,833,870 $ 9,068,237 Total liabilities $ 10,067,388 $ 9,288,778 Total equity $ 1,500,428 $ 1,341,731 Allowance Ratios (3) : ALLL to total loans and leases held for investment at amortized cost 6.5 % 5.7 % ALLL to commercial loans and leases held for investment at amortized cost 2.5 % 3.9 % ALLL to consumer loans and leases held for investment at amortized cost 7.2 % 6.1 % Gross ALLL to consumer loans and leases held for investment at amortized cost 8.2 % 7.5 % Net charge-offs $ 151,919 $ 249,083 Net charge-off ratio (4) 3.6 % 5.8 % (1) Represents the allowance for future estimated net charge-offs on existing portfolio balances.
Origination fees were $283.4 million and $279.1 million for the years ended December 31, 2024 and 2023, respectively, an increase of 2%. The increase was primarily due to the increase in the origination volume of marketplace loans.
Origination fees were $372.8 million and $283.4 million for the years ended December 31, 2025 and 2024, respectively, an increase of 32%. The increase was primarily due to higher origination volumes of marketplace loans.
We must maintain operating liquidity to meet our expected daily and forecasted cash flow requirements, as well as contingent liquidity to meet unexpected funding requirements. As our primary business at LC Bank involves taking deposits and originating loans, a key role of liquidity management is to ensure that customers have timely access to funds from deposits and for loans.
As our primary business at LC Bank involves taking deposits and originating loans, a key role of liquidity management is to ensure that customers have timely access to funds from deposits and for loans.
We offer deposit accounts to our members, which include both interest-bearing and noninterest-bearing deposits. As of December 31, 2024 and 2023, the amount of uninsured deposits totaled $1.2 billion and $0.9 billion, respectively, or 13% of total deposits as of both periods.
Deposits Deposits represent an important source of funding for LC Bank. We offer deposit accounts to our members, which include both interest-bearing and noninterest-bearing deposits. As of both December 31, 2025 and 2024, the amount of uninsured deposits totaled $1.2 billion, or 12% and 13%, respectively.
The following table presents the actual capital amounts and ratios of the Company and LC Bank as well as the regulatory minimum and “well-capitalized” requirements (dollars in millions): December 31, 2024 December 31, 2023 Required Minimum (1) Well-Capitalized Minimum Amount Ratio Amount Ratio LendingClub Corporation: CET1 capital (2) $ 1,188.6 17.3 % $ 1,090.2 17.9 % 7.0 % N/A Tier 1 capital $ 1,188.6 17.3 % $ 1,090.2 17.9 % 8.5 % 6.0 % Total capital $ 1,276.5 18.5 % $ 1,169.2 19.2 % 10.5 % 10.0 % Tier 1 leverage $ 1,188.6 11.0 % $ 1,090.2 12.9 % 4.0 % N/A Risk-weighted assets $ 6,887.1 N/A $ 6,104.5 N/A N/A N/A Quarterly adjusted average assets $ 10,814.0 N/A $ 8,476.1 N/A N/A N/A LendingClub Bank: CET1 capital (2) $ 1,101.4 16.1 % $ 949.4 15.8 % 7.0 % 6.5 % Tier 1 capital $ 1,101.4 16.1 % $ 949.4 15.8 % 8.5 % 8.0 % Total capital $ 1,188.5 17.4 % $ 1,027.4 17.1 % 10.5 % 10.0 % Tier 1 leverage $ 1,101.4 10.3 % $ 949.4 11.4 % 4.0 % 5.0 % Risk-weighted assets $ 6,823.1 N/A $ 6,022.2 N/A N/A N/A Quarterly adjusted average assets $ 10,696.7 N/A $ 8,337.4 N/A N/A N/A N/A – Not applicable (1) Required minimums presented for risk-based capital ratios include the required capital conservation buffer of 2.5%. 72 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) (2) CET1 capital consists of common stockholders’ equity as defined under U.S.
The following table presents the actual capital amounts and ratios of the Company and LC Bank as well as LC Bank’s regulatory capital minimum and “well-capitalized” requirements (dollars in millions): December 31, 2025 December 31, 2024 Required Minimum (1) Well-Capitalized Minimum Amount Ratio Amount Ratio LendingClub Corporation: CET1 capital (2) $ 1,342.6 17.4 % $ 1,188.6 17.3 % 7.0 % N/A Tier 1 capital $ 1,342.6 17.4 % $ 1,188.6 17.3 % 8.5 % 6.0 % Total capital $ 1,441.0 18.7 % $ 1,276.5 18.5 % 10.5 % 10.0 % Tier 1 leverage $ 1,342.6 12.0 % $ 1,188.6 11.0 % 4.0 % N/A Risk-weighted assets $ 7,696.1 N/A $ 6,887.1 N/A N/A N/A Quarterly adjusted average assets $ 11,174.0 N/A $ 10,814.0 N/A N/A N/A LendingClub Bank: CET1 capital (2) $ 1,183.9 15.5 % $ 1,101.4 16.1 % 7.0 % 6.5 % Tier 1 capital $ 1,183.9 15.5 % $ 1,101.4 16.1 % 8.5 % 8.0 % Total capital $ 1,281.8 16.8 % $ 1,188.5 17.4 % 10.5 % 10.0 % Tier 1 leverage $ 1,183.9 10.7 % $ 1,101.4 10.3 % 4.0 % 5.0 % Risk-weighted assets $ 7,652.0 N/A $ 6,823.1 N/A N/A N/A Quarterly adjusted average assets $ 11,090.4 N/A $ 10,696.7 N/A N/A N/A N/A – Not applicable (1) Required minimums presented for risk-based capital ratios include the required capital conservation buffer of 2.5%.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in the Annual Report on Form 10-K for the year ended December 31, 2023. 56 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) The following table sets forth the Income Statement data for each of the periods presented: Year Ended December 31, 2024 2023 2022 2024 vs. 2023 Change (%) 2023 vs. 2022 Change (%) Non-interest income: Marketplace revenue $ 242,791 $ 291,484 $ 683,626 (17) % (57) % Other non-interest income 10,179 11,297 28,765 (10) % (61) % Total non-interest income 252,970 302,781 712,391 (16) % (57) % Interest income: Interest on loans held for sale 92,442 35,655 26,183 159 % 36 % Interest and fees on loans and leases held for investment 494,214 616,735 465,450 (20) % 33 % Interest on loans held for investment at fair value (1) 77,034 74,088 31,012 4 % 139 % Interest on securities available for sale 187,961 40,235 16,116 367 % 150 % Other interest income 56,307 65,917 18,579 (15) % 255 % Total interest income 907,958 832,630 557,340 9 % 49 % Interest expense: Interest on deposits 369,219 265,556 60,451 39 % 339 % Other interest expense (1) 4,698 5,236 22,064 (10) % (76) % Total interest expense 373,917 270,792 82,515 38 % 228 % Net interest income 534,041 561,838 474,825 (5) % 18 % Total net revenue 787,011 864,619 1,187,216 (9) % (27) % Provision for credit losses 178,267 243,565 267,326 (27) % (9) % Non-interest expense: Compensation and benefits 232,158 261,948 339,397 (11) % (23) % Marketing 100,402 93,840 197,747 7 % (53) % Equipment and software 51,194 53,485 49,198 (4) % 9 % Depreciation and amortization 58,834 47,195 43,831 25 % 8 % Professional services 32,045 35,173 50,516 (9) % (30) % Occupancy 15,798 17,532 21,977 (10) % (20) % Other non-interest expense 53,247 57,264 64,187 (7) % (11) % Total non-interest expense 543,678 566,437 766,853 (4) % (26) % Income before income tax (expense) benefit 65,066 54,617 153,037 19 % (64) % Income tax (expense) benefit (13,736) (15,678) 136,648 (12) % (111) % Net income $ 51,330 $ 38,939 $ 289,685 32 % (87) % (1) Prior period amounts have been reclassified to conform to the current period presentation. 57 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Marketplace Revenue Marketplace revenue consists of the following: Year Ended December 31, 2024 2023 Change ($) Change (%) Origination fees $ 283,420 $ 279,146 $ 4,274 2 % Servicing fees 64,933 98,613 (33,680) (34) % Gain on sales of loans 49,097 47,839 1,258 3 % Net fair value adjustments (154,659) (134,114) (20,545) (15) % Total marketplace revenue $ 242,791 $ 291,484 $ (48,693) (17) % Year Ended December 31, 2023 2022 Change ($) Change (%) Origination fees $ 279,146 $ 499,179 $ (220,033) (44) % Servicing fees 98,613 80,609 18,004 22 % Gain on sales of loans 47,839 95,335 (47,496) (50) % Net fair value adjustments (134,114) 8,503 (142,617) N/M Total marketplace revenue $ 291,484 $ 683,626 $ (392,142) (57) % We elected to account for HFS loans under the fair value option.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in the Annual Report on Form 10-K for the year ended December 31, 2024. 59 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) The following table sets forth the Income Statement data for each of the periods presented: Year Ended December 31, 2025 2024 2023 2025 vs. 2024 Change (%) 2024 vs. 2023 Change (%) Non-interest income: Marketplace revenue $ 355,944 $ 242,791 $ 291,484 47 % (17) % Other non-interest income 17,232 10,179 11,297 69 % (10) % Total non-interest income 373,176 252,970 302,781 48 % (16) % Interest income: Interest on loans held for sale 142,937 92,442 35,655 55 % 159 % Interest and fees on loans and leases held for investment 490,071 494,214 616,735 (1) % (20) % Interest on loans held for investment at fair value 72,782 77,034 74,088 (6) % 4 % Interest on securities available for sale 223,820 187,961 40,235 19 % 367 % Other interest income 31,933 56,307 65,917 (43) % (15) % Total interest income 961,543 907,958 832,630 6 % 9 % Interest expense: Interest on deposits 335,724 369,219 265,556 (9) % 39 % Other interest expense 147 4,698 5,236 (97) % (10) % Total interest expense 335,871 373,917 270,792 (10) % 38 % Net interest income 625,672 534,041 561,838 17 % (5) % Total net revenue 998,848 787,011 864,619 27 % (9) % Provision for credit losses 191,320 178,267 243,565 7 % (27) % Non-interest expense: Compensation and benefits 241,846 232,158 261,948 4 % (11) % Marketing 149,211 100,402 93,840 49 % 7 % Equipment and software 57,014 51,194 53,485 11 % (4) % Depreciation and amortization 62,889 58,834 47,195 7 % 25 % Professional services 42,339 32,045 35,173 32 % (9) % Occupancy 19,834 15,798 17,532 26 % (10) % Other non-interest expense 57,449 53,247 57,264 8 % (7) % Total non-interest expense 630,582 543,678 566,437 16 % (4) % Income before income tax expense 176,946 65,066 54,617 172 % 19 % Income tax expense (41,269) (13,736) (15,678) 200 % (12) % Net income $ 135,677 $ 51,330 $ 38,939 164 % 32 % 60 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Marketplace Revenue Marketplace revenue consists of the following: Year Ended December 31, 2025 2024 Change ($) Change (%) Origination fees $ 372,815 $ 283,420 $ 89,395 32 % Servicing fees 58,988 64,933 (5,945) (9) % Gain on sales of loans 59,087 49,097 9,990 20 % Net fair value adjustments (134,946) (154,659) 19,713 13 % Total marketplace revenue $ 355,944 $ 242,791 $ 113,153 47 % Year Ended December 31, 2024 2023 Change ($) Change (%) Origination fees $ 283,420 $ 279,146 $ 4,274 2 % Servicing fees 64,933 98,613 (33,680) (34) % Gain on sales of loans 49,097 47,839 1,258 3 % Net fair value adjustments (154,659) (134,114) (20,545) 15 % Total marketplace revenue $ 242,791 $ 291,484 $ (48,693) (17) % We elected to account for HFS loans under the fair value option.
Uninsured time deposits as of December 31, 2024, by remaining time to maturity, were as follows: 3 months or less $ 39,180 Over 3 months through 6 months 84,511 Over 6 months through 12 months 105,535 Over 12 months 46,783 Total uninsured time deposits (1) $ 276,009 (1) Consist of certificates of deposit accounts that are in excess of the FDIC insurance limit of $250 thousand per account holder.
Uninsured time deposits as of December 31, 2025 , by remaining time to maturity, were as follows: 3 months or less $ 27,444 Over 3 months through 6 months 44,284 Over 6 months through 12 months 42,460 Over 12 months 2,385 Total uninsured time deposits (1) $ 116,573 (1) Consist of certificates of deposit accounts that are in excess of the FDIC insurance limit of $250 thousand per account holder.
Net Fair Value Adjustments We record fair value adjustments on loans that are recorded at fair value, which include gains or losses from sale prices in excess of or less than the loan principal amount sold and realized net charge-offs.
Net Fair Value Adjustments We record adjustments to the carrying value of loans, for which we have elected to account for under the fair value option, to reflect their fair value. These adjustments include gains or losses from sale prices in excess of or less than the loan principal amount sold and realized net charge-offs.
Income taxes are recorded on a separate entity basis whereby each operating segment determines income tax expense or benefit as if it filed a separate tax return. 67 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) LendingClub Bank The LC Bank operating segment represents the national bank legal entity and reflects operating activities after its formation.
Income taxes are recorded on a separate entity basis whereby each operating segment determines income tax expense or benefit as if it filed a separate tax return. LendingClub Bank The LC Bank operating segment represents the national bank legal entity and reflects operating activities after its formation.
The outcome of the analysis is influenced by a variety of assumptions, including the maturity profile and prepayment level of our unsecured consumer loans and expected consumer responses to changes in rates paid on non-maturity deposit products. Our assumptions are periodically calibrated to observed data and/or expected outcomes.
Therefore, we use a sensitivity analysis to assess the impact of hypothetical changes in interest rates on our net interest income results. The outcome of the analysis is influenced by a variety of assumptions, including the maturity profile and prepayment level of our unsecured consumer loans and expected consumer responses to changes in rates paid on non-maturity deposit products.
This portfolio consisted of loans which we previously originated and sold. (5) Calculated as ALLL or gross ALLL, where applicable, to the corresponding portfolio segment balance of loans and leases held for investment at amortized cost. (6) Calculated as annualized net charge-offs divided by average outstanding loans and leases HFI at amortized cost, net, during the period.
(2) Represents the negative allowance for expected recoveries of amounts previously charged-off. (3) Calculated as ALLL or gross ALLL, where applicable, to the corresponding portfolio segment balance of loans and leases held for investment at amortized cost. (4) Calculated as net charge-offs divided by average outstanding loans and leases HFI at amortized cost, net, during the period.
Year Ended December 31, 2024 2023 2022 Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Interest-earning assets (1) Cash, cash equivalents, restricted cash and other $ 1,081,644 $ 56,307 5.21 % $ 1,293,047 $ 65,917 5.10 % $ 987,833 $ 18,579 1.88 % Securities available for sale at fair value 2,707,049 187,961 6.94 % 652,047 40,235 6.17 % 370,277 16,116 4.35 % Loans held for sale at fair value 719,898 92,442 12.84 % 252,519 35,655 14.12 % 162,760 26,183 16.09 % Loans and leases held for investment at amortized cost: Unsecured personal loans 3,220,969 431,782 13.41 % 4,143,482 549,256 13.26 % 2,967,410 410,222 13.82 % Commercial and other consumer loans (2) 1,073,445 62,432 5.82 % 1,151,201 67,479 5.86 % 1,109,505 55,228 4.98 % Loans and leases held for investment at amortized cost 4,294,414 494,214 11.51 % 5,294,683 616,735 11.65 % 4,076,915 465,450 11.42 % Loans held for investment at fair value (2) 693,557 77,034 11.11 % 567,504 74,088 13.06 % 219,104 31,012 14.15 % Total loans and leases held for investment (2) 4,987,971 571,248 11.45 % 5,862,187 690,823 11.78 % 4,296,019 496,462 11.56 % Total interest-earning assets 9,496,562 907,958 9.56 % 8,059,800 832,630 10.33 % 5,816,889 557,340 9.58 % Cash and due from banks and restricted cash 51,732 70,653 72,764 Allowance for loan and lease losses (247,458) (345,434) (234,532) Other noninterest-earning assets 621,324 676,335 547,388 Total assets $ 9,922,160 $ 8,461,354 $ 6,202,509 Interest-bearing liabilities Interest-bearing deposits: Checking and money market accounts $ 1,012,164 $ 35,143 3.47 % $ 1,344,431 $ 34,462 2.56 % $ 2,205,691 $ 16,464 0.75 % Savings accounts and certificates of deposit 6,923,221 334,076 4.83 % 5,345,734 231,094 4.32 % 2,123,037 43,987 2.07 % Interest-bearing deposits 7,935,385 369,219 4.65 % 6,690,165 265,556 3.97 % 4,328,728 60,451 1.40 % Other interest-bearing liabilities (2) 143,189 4,698 3.28 % 69,120 5,236 7.58 % 316,193 22,064 6.98 % Total interest-bearing liabilities 8,078,574 373,917 4.63 % 6,759,285 270,792 4.01 % 4,644,921 82,515 1.78 % Noninterest-bearing deposits 323,378 236,618 264,099 Other liabilities 228,270 261,401 274,209 Total liabilities $ 8,630,222 $ 7,257,304 $ 5,183,229 Total equity $ 1,291,938 $ 1,204,050 $ 1,019,280 Total liabilities and equity $ 9,922,160 $ 8,461,354 $ 6,202,509 61 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Year Ended December 31, 2024 2023 2022 Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Interest rate spread 4.93 % 6.32 % 7.80 % Net interest income and net interest margin $ 534,041 5.62 % $ 561,838 6.97 % $ 474,825 8.16 % (1) Nonaccrual loans and any related income are included in their respective loan categories.
Year Ended December 31, 2025 2024 2023 Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Interest-earning assets (1) Cash, cash equivalents, restricted cash and other $ 770,044 $ 31,933 4.15 % $ 1,081,644 $ 56,307 5.21 % $ 1,293,047 $ 65,917 5.10 % Securities available for sale at fair value 3,518,310 223,820 6.36 % 2,707,049 187,961 6.94 % 652,047 40,235 6.17 % Loans held for sale at fair value 1,131,157 142,937 12.64 % 719,898 92,442 12.84 % 252,519 35,655 14.12 % Loans and leases held for investment at amortized cost: Unsecured personal loans 3,199,345 429,419 13.42 % 3,220,969 431,782 13.41 % 4,143,482 549,256 13.26 % Commercial and other consumer loans 1,035,486 60,652 5.86 % 1,073,445 62,432 5.82 % 1,151,201 67,479 5.86 % Loans and leases held for investment at amortized cost 4,234,831 490,071 11.57 % 4,294,414 494,214 11.51 % 5,294,683 616,735 11.65 % Loans held for investment at fair value 661,349 72,782 11.01 % 693,557 77,034 11.11 % 567,504 74,088 13.06 % Total loans and leases held for investment 4,896,180 562,853 11.50 % 4,987,971 571,248 11.45 % 5,862,187 690,823 11.78 % Total interest-earning assets 10,315,691 961,543 9.32 % 9,496,562 907,958 9.56 % 8,059,800 832,630 10.33 % Cash and due from banks and restricted cash 32,696 51,732 70,653 Allowance for loan and lease losses (255,779) (247,458) (345,434) Other non-interest earning assets 627,791 621,324 676,335 Total assets $ 10,720,399 $ 9,922,160 $ 8,461,354 Interest-bearing liabilities Interest-bearing deposits: Savings and money market accounts (2) $ 6,250,152 $ 237,557 3.80 % $ 5,022,106 $ 234,046 4.66 % $ 4,438,916 $ 186,305 4.20 % Certificates of deposit (2) 2,105,408 92,701 4.40 % 2,044,776 104,850 5.13 % 1,051,378 48,988 4.66 % Checking accounts (2) 414,754 5,466 1.32 % 868,503 30,323 3.49 % 1,199,871 30,263 2.52 % Interest-bearing deposits 8,770,314 335,724 3.83 % 7,935,385 369,219 4.65 % 6,690,165 265,556 3.97 % Other interest-bearing liabilities 3,205 147 4.57 % 143,189 4,698 3.28 % 69,120 5,236 7.58 % Total interest-bearing liabilities 8,773,519 335,871 3.83 % 8,078,574 373,917 4.63 % 6,759,285 270,792 4.01 % Noninterest-bearing deposits 301,510 323,378 236,618 Other liabilities 237,842 228,270 261,401 Total liabilities $ 9,312,871 $ 8,630,222 $ 7,257,304 Total equity $ 1,407,528 $ 1,291,938 $ 1,204,050 64 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Year Ended December 31, 2025 2024 2023 Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Total liabilities and equity $ 10,720,399 $ 9,922,160 $ 8,461,354 Interest rate spread 5.49 % 4.93 % 6.32 % Net interest income and net interest margin $ 625,672 6.07 % $ 534,041 5.62 % $ 561,838 6.97 % (1) Nonaccrual loans and any related income are included in their respective loan categories.
The following presents our select financial metrics for the periods presented: 54 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) As Of and For The Year Ended December 31, 2024 2023 2022 Non-interest income $ 252,970 $ 302,781 $ 712,391 Net interest income 534,041 561,838 474,825 Total net revenue 787,011 864,619 1,187,216 Non-interest expense 543,678 566,437 766,853 Pre-provision net revenue (1) 243,333 298,182 420,363 Provision for credit losses 178,267 243,565 267,326 Income before income tax (expense) benefit 65,066 54,617 153,037 Income tax (expense) benefit (13,736) (15,678) 136,648 Net income $ 51,330 $ 38,939 $ 289,685 Income tax benefit from release of tax valuation allowance — — 143,495 Net income excluding income tax benefit (1)(2) $ 51,330 $ 38,939 $ 146,190 Basic EPS – common stockholders $ 0.46 $ 0.36 $ 2.80 Diluted EPS – common stockholders $ 0.45 $ 0.36 $ 2.79 Diluted EPS excluding income tax benefit (1)(2) $ 0.45 $ 0.36 $ 1.41 LendingClub Corporation Performance Metrics: Net interest margin 5.6 % 7.0 % 8.2 % Efficiency ratio (3) 69.1 % 65.5 % 64.6 % Return on average equity (ROE) 4.0 % 3.2 % 28.4 % Return on tangible common equity (ROTCE) (1) 4.3 % 3.5 % 31.3 % Return on average total assets (ROA) 0.5 % 0.5 % 4.7 % Marketing as a % of loan originations 1.4 % 1.3 % 1.5 % LendingClub Corporation Capital Metrics: Common equity tier 1 capital ratio 17.3 % 17.9 % 15.8 % Tier 1 leverage ratio 11.0 % 12.9 % 14.1 % Book value per common share $ 11.83 $ 11.34 $ 10.93 Tangible book value per common share (1) $ 11.09 $ 10.54 $ 10.06 Loan Originations (in millions) (4) : Marketplace loans $ 5,482 $ 5,253 $ 9,389 Loan originations held for investment 1,735 2,184 3,731 Total loan originations $ 7,218 $ 7,437 $ 13,121 Loan originations held for investment as a % of total loan originations 24 % 29 % 28 % Servicing Portfolio AUM (in millions) (5) : Total servicing portfolio $ 12,371 $ 14,122 $ 16,157 Loans serviced for others $ 7,207 $ 9,336 $ 10,819 (1) Represents a non-GAAP financial measure.
The following presents our select financial metrics for the periods presented: As of and for the year ended December 31, 2025 2024 2023 Non-interest income $ 373,176 $ 252,970 $ 302,781 Net interest income 625,672 534,041 561,838 Total net revenue 998,848 787,011 864,619 Non-interest expense 630,582 543,678 566,437 Pre-provision net revenue (1) 368,266 243,333 298,182 Provision for credit losses 191,320 178,267 243,565 Income before income tax expense 176,946 65,066 54,617 Income tax expense (41,269) (13,736) (15,678) Net income $ 135,677 $ 51,330 $ 38,939 Basic EPS $ 1.18 $ 0.46 $ 0.36 Diluted EPS $ 1.16 $ 0.45 $ 0.36 LendingClub Corporation Performance Metrics: Net interest margin 6.07 % 5.62 % 6.97 % Efficiency ratio (2) 63.1 % 69.1 % 65.5 % Return on average equity (ROE) 9.6 % 4.0 % 3.2 % Return on tangible common equity (ROTCE) (1) 10.2 % 4.3 % 3.5 % Return on average total assets (ROA) 1.3 % 0.5 % 0.5 % Marketing as a % of loan originations 1.56 % 1.39 % 1.26 % LendingClub Corporation Capital Metrics: Common equity tier 1 capital ratio 17.4 % 17.3 % 17.9 % Tier 1 leverage ratio 12.0 % 11.0 % 12.9 % Book value per common share $ 13.01 $ 11.83 $ 11.34 Tangible book value per common share (1) $ 12.30 $ 11.09 $ 10.54 Loan Originations (in millions) (3) : Marketplace loans $ 7,134 $ 5,482 $ 5,253 Loan originations held for investment 2,455 1,735 2,184 Total loan originations $ 9,589 $ 7,218 $ 7,437 Loan originations held for investment as a % of total loan originations 26 % 24 % 29 % Servicing Portfolio AUM (in millions) (4) : Total servicing portfolio $ 13,423 $ 12,371 $ 14,122 Loans serviced for others $ 7,601 $ 7,207 $ 9,336 (1) Represents a non-GAAP financial measure.
Year Ended December 31, 2024 2023 Change ($) Change (%) Non-interest expense: Compensation and benefits $ 232,158 $ 261,948 $ (29,790) (11) % Marketing 100,402 93,840 6,562 7 % Equipment and software 51,194 53,485 (2,291) (4) % Depreciation and amortization 58,834 47,195 11,639 25 % Professional services 32,045 35,173 (3,128) (9) % Occupancy 15,798 17,532 (1,734) (10) % Other non-interest expense 53,247 57,264 (4,017) (7) % Total non-interest expense $ 543,678 $ 566,437 $ (22,759) (4) % Year Ended December 31, 2023 2022 Change ($) Change (%) Non-interest expense: Compensation and benefits $ 261,948 $ 339,397 $ (77,449) (23) % Marketing 93,840 197,747 (103,907) (53) % Equipment and software 53,485 49,198 4,287 9 % Depreciation and amortization 47,195 43,831 3,364 8 % Professional services 35,173 50,516 (15,343) (30) % Occupancy 17,532 21,977 (4,445) (20) % Other non-interest expense 57,264 64,187 (6,923) (11) % Total non-interest expense $ 566,437 $ 766,853 $ (200,416) (26) % Compensation and benefits expense decreased $29.8 million, or 11%, for the year ended December 31, 2024 compared to the same period in 2023.
Year Ended December 31, 2025 2024 Change ($) Change (%) Non-interest expense: Compensation and benefits $ 241,846 $ 232,158 $ 9,688 4 % Marketing 149,211 100,402 48,809 49 % Equipment and software 57,014 51,194 5,820 11 % Depreciation and amortization 62,889 58,834 4,055 7 % Professional services 42,339 32,045 10,294 32 % Occupancy 19,834 15,798 4,036 26 % Other non-interest expense 57,449 53,247 4,202 8 % Total non-interest expense $ 630,582 $ 543,678 $ 86,904 16 % Year Ended December 31, 2024 2023 Change ($) Change (%) Non-interest expense: Compensation and benefits $ 232,158 $ 261,948 $ (29,790) (11) % Marketing 100,402 93,840 6,562 7 % Equipment and software 51,194 53,485 (2,291) (4) % Depreciation and amortization 58,834 47,195 11,639 25 % Professional services 32,045 35,173 (3,128) (9) % Occupancy 15,798 17,532 (1,734) (10) % Other non-interest expense 53,247 57,264 (4,017) (7) % Total non-interest expense $ 543,678 $ 566,437 $ (22,759) (4) % Compensation and benefits expense increased $9.7 million, or 4%, for the year ended December 31, 2025 compared to the same period in 2024.
Allowance for Loan and Lease Losses Under the CECL model, we reserve for expected credit losses on our loan and lease portfolio when loans are initially recorded as HFI at amortized cost through the ALLL by using a DCF approach to calculate the NPV of 76 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) expected cash flows.
Allowance for Loan and Lease Losses Under the CECL methodology, we reserve for expected credit losses on our loan and lease portfolio when they are initially recorded as HFI at amortized cost through the ALLL by using a DCF approach to calculate the NPV of expected cash flows.
Depreciation and amortization expense increased $11.6 million, or 25%, for the year ended December 31, 2024 compared to the same period in 2023. The increase was primarily due to an increase in the amortization of internally-developed software as well as a $5.5 million impairment expense for internally-developed software recorded in 2024.
Depreciation and amortization expense increased $4.1 million, or 7%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in the amortization of internally-developed software placed into service in 2025, partially offset by a decrease in impairment expense for internally-developed software compared to the prior year.
The primary uses of LC Bank liquidity include (i) the funding/acquisition of loans and securities purchases, (ii) withdrawals, maturities and the payment of interest on deposits, (iii) compensation and benefits expense, (iv) taxes, (v) capital expenditures, including internally developed software, leasehold improvements and computer equipment, and (vi) costs associated with the continued development and support of our digital marketplace bank. 73 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Deposits Deposits represent an important source of funding for LC Bank.
The primary uses of LC Bank liquidity include (i) the funding/acquisition of loans and securities purchases, (ii) withdrawals, maturities and the payment of interest on deposits, (iii) compensation and benefits expense, (iv) taxes, (v) capital expenditures, including the purchase of an office building in 2025, as well as the related building improvements, and internally developed software, and (vi) costs associated with the continued development and support of our digital marketplace bank.
Year Ended December 31, 2024 2023 2022 Total loans and leases held for investment $ 4,125,818 $ 4,850,302 $ 5,033,154 Allowance for loan and lease losses $ 236,734 $ 310,387 $ 327,852 Allowance ratio (1) 5.7 % 6.4 % 6.5 % Gross allowance for loan and lease losses $ 285,686 $ 355,773 $ 340,369 Gross allowance ratio (1) 6.9 % 7.3 % 6.8 % (1) Calculated as ALLL or gross ALLL, where applicable, to total loans and leases held for investment at amortized cost. 64 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Net Charge-Offs 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: Year Ended December 31, 2024 2023 2022 Average loans and leases held for investment at amortized cost $ 4,294,414 $ 5,294,683 $ 4,076,915 Net charge-offs 249,083 261,035 83,216 Net charge-off ratio 5.8 % 4.9 % 2.0 % Nonaccrual 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.
Year Ended December 31, 2025 2024 2023 Total loans and leases held for investment $ 4,272,812 $ 4,125,818 $ 4,850,302 Allowance for loan and lease losses $ 275,743 $ 236,734 $ 310,387 Allowance ratio (1) 6.5 % 5.7 % 6.4 % Gross allowance for loan and lease losses $ 312,667 $ 285,686 $ 355,773 Gross allowance ratio (1) 7.3 % 6.9 % 7.3 % (1) Calculated as ALLL or gross ALLL, where applicable, to total loans and leases held for investment at amortized cost. 67 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Net Charge-Offs 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.
For additional discussion related to our operating segments, see “ Segment Information .” Financial Highlights We regularly review several metrics to evaluate our business, measure our performance, identify trends, formulate financial projections and make strategic decisions.
For additional discussion related to our operating segments, see “ Segment Information .” 57 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Financial Highlights We regularly review several metrics to evaluate our business, measure our performance, identify trends, formulate financial projections and make strategic decisions.
We believe PPNR, Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit are important measures because they reflect the financial performance of our business operations. PPNR is a non-GAAP financial measure calculated by subtracting the provision for credit losses and income tax benefit/expense from net income.
We believe PPNR, is an important measure because it reflects the underlying financial performance of our business operations. PPNR is a non-GAAP financial measure calculated by subtracting the provision for credit losses and income tax benefit/expense from net income. We believe TBV Per Common Share is an important measure used to evaluate the Company’s use of equity.
See “ Part I – Item 1. Business – Regulation and Supervision, ” “ Part I – Item 1A. Risk Factors – Risks Related to Regulation, Supervision and Compliance, ” and “ Part I – Item 1A.
See “ Part I – Item 1. Business – Regulation and Supervision, ” “ Part I – Item 1A. Risk Factors – Risks Related to Regulation, Supervision and Compliance, ” and “ Part I – Item 1A. Risk Factors – Risks Related to Operating Our Business ” of this Annual Report for further discussion regarding our supervision and regulatory environment.
See “ Non-GAAP Financial Measures ” for additional information. (2) The year ended December 31, 2022 excludes an income tax benefit of $143.5 million due to the release of our deferred tax asset valuation allowance. (3) Calculated as the ratio of non-interest expense to total net revenue. (4) Includes unsecured personal loans and auto loans only.
See “ Non-GAAP Financial Measures ” for additional information. (2) Calculated as the ratio of non-interest expense to total net revenue. (3) Includes unsecured personal loans and auto loans only.
Unsecured personal loans are generally charged-off no later than 120 days past due.
Unsecured personal loans are generally charged-off when a borrower is contractually 120 days past due.
In addition, as loans are held on the Balance Sheet, incremental fair value adjustments on the loans are recorded in “Net fair value 59 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) adjustments” within “Marketplace revenue,” whereas the associated interest income is recorded within “Net interest income.” Net fair value adjustments were $(154.7) million and $(134.1) million for the years ended December 31, 2024 and 2023, respectively, an increased loss of $20.5 million.
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 $(134.9) million and $(154.7) million for the years ended December 31, 2025 and 2024, respectively, a decreased loss of $19.7 million.
We believe ROTCE is an important measure because it reflects the Company's ability to generate income from its core assets. ROTCE is a non-GAAP financial measure calculated by dividing net income by the average tangible common equity for the applicable period.
ROTCE is a non-GAAP financial measure calculated by dividing net income by the average tangible common equity for the applicable period.
Business – Regulation and Supervision – Capital and Liquidity Requirements and Prompt Corrective Action ” of this Annual Report for additional information regarding regulatory capital requirements.
See “ Part I – Item 1. Business – Regulation and Supervision – Capital and Liquidity Requirements and Prompt Corrective Action ” and “ Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 19. Regulatory Requirements ” of this Annual Report for additional information regarding regulatory capital requirements.
Financial information for the segments is presented in the following table: LendingClub Bank LendingClub Corporation (Parent only) Total Reportable Segments Year ended 2024 2023 2022 2024 2023 2022 2024 2023 2022 Non-interest income: Marketplace revenue $ 176,921 $ 206,381 $ 610,536 $ 36,595 $ 41,817 $ 48,231 $ 213,516 $ 248,198 $ 658,767 Other non-interest income 53,643 74,684 85,208 9,038 9,503 15,628 62,681 84,187 100,836 Total non-interest income 230,564 281,065 695,744 45,633 51,320 63,859 276,197 332,385 759,603 Interest income: Interest income 902,741 818,206 526,471 5,217 14,424 30,869 907,958 832,630 557,340 Interest expense (373,219) (266,218) (60,954) (698) (4,574) (21,561) (373,917) (270,792) (82,515) Net interest income 529,522 551,988 465,517 4,519 9,850 9,308 534,041 561,838 474,825 Total net revenue 760,086 833,053 1,161,261 50,152 61,170 73,167 810,238 894,223 1,234,428 Provision for credit losses (178,267) (243,565) (267,326) — — — (178,267) (243,565) (267,326) Non-interest expense: Compensation and benefits (225,620) (255,428) (331,627) (6,538) (6,520) (7,770) (232,158) (261,948) (339,397) Marketing (100,400) (93,840) (197,559) (2) — (188) (100,402) (93,840) (197,747) Equipment and Software (51,068) (53,239) (49,004) (126) (246) (194) (51,194) (53,485) (49,198) Depreciation and Amortization (50,309) (30,216) (16,489) (8,525) (16,979) (27,342) (58,834) (47,195) (43,831) Professional Services (31,376) (33,963) (49,993) (669) (1,210) (523) (32,045) (35,173) (50,516) Occupancy (7,582) (7,980) (8,631) (8,216) (9,552) (13,346) (15,798) (17,532) (21,977) Other non-interest expense (54,963) (62,360) (71,001) (21,511) (24,508) (40,398) (76,474) (86,868) (111,399) Total non-interest expense (521,318) (537,026) (724,304) (45,587) (59,015) (89,761) (566,905) (596,041) (814,065) Income tax (expense) benefit (12,824) (17,881) (42,354) (912) 2,203 125,954 (13,736) (15,678) 83,600 Net income (1) $ 47,677 $ 34,581 $ 127,277 $ 3,653 $ 4,358 $ 109,360 $ 51,330 $ 38,939 $ 236,637 Capital expenditures $ 54,302 $ 59,509 $ 69,481 $ — $ — $ — $ 54,302 $ 59,509 $ 69,481 (1) Total net income from reportable segments reflects net income on a consolidated basis. 68 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Year Ended December 31, 2024 2023 2022 Total net revenue – reportable segments $ 810,238 $ 894,223 $ 1,234,428 Intercompany eliminations (23,227) (29,604) (47,212) Total net revenue – consolidated $ 787,011 $ 864,619 $ 1,187,216 An analysis of the Company’s results of operations and material drivers and trends of the financial results of the segments presented above are consistent with those provided on a consolidated basis in “ Results of Operations .” Non-GAAP Financial Measures To supplement our financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: Pre-Provision Net Revenue (PPNR), Tangible Book Value (TBV) Per Common Share, Return on Tangible Common Equity (ROTCE), Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit.
This activity includes, but is not limited to, servicing fee revenue on purchased servicing assets, and interest income and interest expense related to transactions entered into prior to LC Bank’s formation. 71 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Financial information for the segments is presented in the following table: LendingClub Bank LendingClub Corporation (Parent only) Total Reportable Segments Year ended 2025 2024 2023 2025 2024 2023 2025 2024 2023 Non-interest income: Marketplace revenue $ 303,930 $ 176,921 $ 206,381 $ 29,613 $ 36,595 $ 41,817 $ 333,543 $ 213,516 $ 248,198 Other non-interest income 52,050 53,643 74,684 7,472 9,038 9,503 59,522 62,681 84,187 Total non-interest income 355,980 230,564 281,065 37,085 45,633 51,320 393,065 276,197 332,385 Interest income: Interest income 960,714 902,741 818,206 829 5,217 14,424 961,543 907,958 832,630 Interest expense (335,871) (373,219) (266,218) — (698) (4,574) (335,871) (373,917) (270,792) Net interest income 624,843 529,522 551,988 829 4,519 9,850 625,672 534,041 561,838 Total net revenue 980,823 760,086 833,053 37,914 50,152 61,170 1,018,737 810,238 894,223 Provision for credit losses (191,320) (178,267) (243,565) — — — (191,320) (178,267) (243,565) Non-interest expense: Compensation and benefits (235,289) (225,620) (255,428) (6,557) (6,538) (6,520) (241,846) (232,158) (261,948) Marketing (149,211) (100,400) (93,840) — (2) — (149,211) (100,402) (93,840) Equipment and software (56,963) (51,068) (53,239) (51) (126) (246) (57,014) (51,194) (53,485) Depreciation and amortization (58,277) (50,309) (30,216) (4,612) (8,525) (16,979) (62,889) (58,834) (47,195) Professional services (41,689) (31,376) (33,963) (650) (669) (1,210) (42,339) (32,045) (35,173) Occupancy (12,068) (7,582) (7,980) (7,766) (8,216) (9,552) (19,834) (15,798) (17,532) Other non-interest expense (62,854) (54,963) (62,360) (14,484) (21,511) (24,508) (77,338) (76,474) (86,868) Total non-interest expense (616,351) (521,318) (537,026) (34,120) (45,587) (59,015) (650,471) (566,905) (596,041) Income tax (expense) benefit (41,502) (12,824) (17,881) 233 (912) 2,203 (41,269) (13,736) (15,678) Net income (1) $ 131,650 $ 47,677 $ 34,581 $ 4,027 $ 3,653 $ 4,358 $ 135,677 $ 51,330 $ 38,939 Capital expenditures $ 143,566 $ 54,302 $ 59,509 $ — $ — $ — $ 143,566 $ 54,302 $ 59,509 (1) Total net income from reportable segments reflects net income on a consolidated basis.
As a result, the primary component of interest rate risk on our financial instruments arises from the impact of fluctuations in loan, security, and deposit rates on our net interest income. Therefore, we use a sensitivity analysis to assess the impact of hypothetical changes in interest rates on our net interest income results.
The majority of HFI loans and AFS securities are fixed-rate instruments over the term of the loan or security. As a result, the primary component of interest rate risk on our financial instruments arises from the impact of fluctuations in loan, security, and deposit rates on our net interest income.
Interest rate risk arises from financial instruments including loans, securities and borrowings, all entered into for purposes other than trading. Interest Rate Sensitivity LendingClub Bank Our net interest income is affected by changes in the level of interest rates, the impact of interest rate fluctuations on asset prepayments, and the level and composition of deposits and liabilities, among other factors.
Interest Rate Sensitivity LendingClub Bank Our net interest income is affected by changes in the level of interest rates, the impact of interest rate fluctuations on asset prepayments, and the level and composition of deposits and liabilities, among other factors. HFI loans and AFS securities at LC Bank are funded primarily through our deposit base.
Excluding this one loan, the CRE office loan portfolio balance was under $35 million as of December 31, 2024. 63 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Allowance for Credit Losses The activity in the allowance for credit losses (ACL) was as follows: Year Ended December 31, 2024 2023 2022 Allowance for loan and lease losses: Beginning of period $ 310,387 $ 327,852 $ 144,389 Credit loss expense for loans and leases held for investment 175,430 243,570 266,679 Charge-offs (303,593) (281,107) (87,473) Recoveries 54,510 20,072 4,257 End of period $ 236,734 $ 310,387 $ 327,852 Allowance for securities available for sale: Beginning of period $ — $ — $ — Credit loss expense for securities available for sale 3,527 — — End of period $ 3,527 $ — $ — Reserve for unfunded lending commitments: Beginning of period $ 1,873 $ 1,878 $ 1,231 Credit loss expense (benefit) for unfunded lending commitments (690) (5) 647 End of period (1) $ 1,183 $ 1,873 $ 1,878 (1) Relates to $105.0 million, $78.1 million and $138.0 million of unfunded commitments as of December 31, 2024, 2023 and 2022, respectively .
The increase was primarily driven by a higher volume of originated loans retained as HFI at amortized cost, partially offset by a shift in the mix of loans toward types with lower expected losses and the impact of an $8.0 million provision recognized in 2024 related to one legacy office loan within our CRE portfolio. 66 LENDINGCLUB CORPORATION Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted) Allowance for Credit Losses The activity in the allowance for credit losses (ACL) was as follows: Year Ended December 31, 2025 2024 2023 Allowance for loan and lease losses: Beginning of period $ 236,734 $ 310,387 $ 327,852 Credit loss expense for loans and leases held for investment 190,928 175,430 243,570 Charge-offs (1) (218,874) (303,593) (281,107) Recoveries 66,955 54,510 20,072 End of period $ 275,743 $ 236,734 $ 310,387 Allowance for securities available for sale: Beginning of period $ 3,527 $ — $ — Credit loss expense for securities available for sale 566 3,527 — End of period $ 4,093 $ 3,527 $ — Reserve for unfunded lending commitments: Beginning of period $ 1,183 $ 1,873 $ 1,878 Credit loss benefit for unfunded lending commitments (174) (690) (5) End of period (2) $ 1,009 $ 1,183 $ 1,873 (1) The first quarter of 2025 included an $8.0 million charge-off related to one office loan within our CRE portfolio, which was fully reserved for in prior periods.
In addition, the decrease was also driven by an increased loss in net fair value adjustments due to the increase in the origination volume of marketplace loans, partially offset by higher loan sales prices. ◦ Net interest income: Net interest income decreased $27.8 million, or 5%, for the year ended December 31, 2024 compared to the same period in 2023.
The increase was primarily due to higher origination volume of marketplace loans and improved loan sales prices. ◦ Net interest income: Net interest income increased $91.6 million, or 17%, for the year ended December 31, 2025 compared to the same period in 2024.
These factors resulted in the release of the majority of our valuation allowance against our deferred tax assets in 2022. As of December 31, 2024, we maintained a valuation allowance of $46.3 million related to certain state net operating loss carryforwards (NOLs) and state tax credit carryforwards.
As of December 31, 2025, we maintained a valuation allowance of $48.0 million related to certain state net operating loss carryforwards (NOLs) and state tax credit carryforwards.
The increase was primarily due to an increase in variable marketing expenses based on higher origination volume of marketplace loans. Equipment and software expense decreased $2.3 million, or 4%, for the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily due to a decrease in software license expense.
The increase was primarily due to an increase in headcount. Marketing expense increased $48.8 million, or 49%, for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in variable marketing expenses based on higher origination volume as well as the resumption of certain marketing initiatives.
Our qualitative allowance is primarily based on macroeconomic unemployment forecast information provided by an external third-party economist, incorporating management’s judgement, and is included in the estimation of expected future expected credit losses. In addition, the qualitative allowance includes adjustments in circumstances where the statistical model output is inconsistent with management’s expectations relating to economic conditions and expected credit losses.
In addition, the qualitative allowance includes adjustments in circumstances where the statistical model output is inconsistent with management’s expectations relating to economic conditions and expected credit losses.
LendingClub Holding Company Liquidity The primary source of liquidity at the holding company is $66.0 million and $110.3 million in cash and cash equivalents as of December 31, 2024 and 2023, respectively. Additionally, the holding company has the ability to access the capital markets through additional registrations and public equity offerings.
LendingClub Holding Company Liquidity The primary source of liquidity at the holding company is $127.1 million and $66.0 million in cash and cash equivalents as of December 31, 2025 and 2024, respectively.

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