LendingClub (NYSE:LC) executives highlighted strong growth, improving profitability, and continued credit outperformance on the company’s fourth-quarter 2025 earnings call, while also providing detailed commentary on an accounting shift to the fair value option and 2026 guidance.
Q4 and full-year performance
CEO Scott Sanborn said the company “had a strong close” to what he described as “one of the best years in LendingClub’s history,” citing a combination of growth, profitability, and shareholder returns. In the fourth quarter, LendingClub grew loan originations 40% year over year to $2.6 billion, with management noting that all product lines contributed to the increase. Sanborn also said return on tangible common equity (ROTCE) “more than tripled” to nearly 12% in the quarter.
LaBenne said fourth-quarter revenue reflected strength in both marketplace and bank-related income streams. Non-interest income increased 38% year over year to $103 million, which he attributed to higher marketplace sales volumes, improved loan sales prices, and strong credit performance. Net interest income rose 14% to $163 million, which he called “another all-time high,” supported by growth in interest-earning assets and “continued funding cost optimization.” Net interest margin was 6%, up 56 basis points year over year, though LaBenne noted it declined sequentially due to higher cash balances held to enable accelerated growth in 2026.
Marketplace demand and investor developments
Management emphasized improved marketplace conditions alongside credit performance. Sanborn said marketplace revenue increased 36% year over year, driven by higher marketplace volumes and loan sales pricing “improving back towards our historical range.” He also pointed to the launch of a rated Structured Certificates product in 2025 intended to meet the needs of insurance capital.
Sanborn said LendingClub signed its first direct forward flow agreement with a “top U.S. insurance company” in the fourth quarter, describing it as additive to previously announced agreements with BlackRock and Blue Owl. In Q&A, LaBenne characterized the marketplace environment as “very healthy,” citing “a lot of capital out there to be deployed” and calling insurance capital a “great addition” to the investor base.
Balance sheet growth, deposits, and expenses
LendingClub’s bank balance sheet continued to expand. LaBenne said the company ended the quarter with $11.6 billion of total assets, up 9% year over year. Deposits totaled $9.8 billion, an 8% increase from the prior year, with management citing “healthy deposit trends across our product offerings.”
Sanborn highlighted engagement from deposit products, describing double-digit growth in LevelUp Savings and LevelUp Checking. He said LevelUp Savings is driving “20%-30% more logins per month” than the legacy savings product, and that personal loan borrowers accounted for “over 15% of new accounts.” He added that borrowers who have paid off their loans are accumulating average balances “of over $15,000.” For LevelUp Checking, Sanborn said 60% of new accounts come from personal loan borrowers, and 84% of those borrowers said they are more likely to consider a LendingClub loan in the future.
On expenses, LaBenne reported non-interest expense of $169 million, up 19% year over year, with the increase “due to planned higher marketing spend” as the company invests in paid channels. In response to an analyst question, management said marketing was the “vast majority” of the quarter-over-quarter increase and framed the spending as investment intended to support 2026 performance. Executives also referenced expected investments tied to building the home improvement finance business and costs related to a planned rebrand in the first half of 2026, both included in guidance.
Credit performance and provisioning
Management said credit remained strong. LaBenne stated LendingClub’s delinquency and charge-off metrics were “well below our competitive set,” and provision for credit losses was $47 million, reflecting “disciplined underwriting and stable consumer credit performance.” He noted that a higher percentage of held-for-investment loans came from major purchase finance, which carries a higher day-one provision under the prior accounting framework because of longer duration.
LaBenne said the net charge-off ratio improved by 80 basis points year over year, while acknowledging an “expected sequential increase as more recent vintages mature.” In Q&A, management reiterated it was assuming a stable macro environment through 2026 and said it was not expecting a major shift in annualized net charge-off loss estimates due to product mix, even as duration increases with major purchase finance growth and the planned home improvement rollout.
Accounting shift, capital actions, and 2026 outlook
A key topic on the call was the move to the fair value option for all new held-for-investment loan originations. LaBenne said the change is intended to simplify financials, align timing of revenue recognition and losses, and create a more consistent framework across marketplace and bank businesses. He also said the company expects this to remove the “front-loaded CECL impact” as held-for-investment loans grow.
LaBenne provided several modeling points for the transition, including that under fair value there will be “no day one provision” for loan losses on new originations, though the legacy CECL portfolio is expected to generate approximately $10 million of CECL expense in Q1 2026 (subject to variability). He also said loan origination fee revenue and marketing expense will no longer be deferred for held-for-investment loans, meaning both line items should rise from Q4 2025 to Q1 2026 independent of origination volume changes. Management said total fair value adjustments in Q1 are expected to be roughly double Q4 2025 levels, driven by higher volume under fair value, mix toward longer-duration major purchase finance loans, and a higher average balance carried under fair value.
Separately, LaBenne updated investors on the company’s $100 million share repurchase and acquisition program announced in November, saying LendingClub deployed about $12 million in Q4 at an average share price of $17.65 and expects to continue deploying excess capital through the program.
For guidance, LendingClub said it assumes a healthy economy and stable macro conditions throughout 2026. The company guided to:
- Q1 2026 originations: $2.55 billion to $2.65 billion (28% to 33% year-over-year growth)
- Full-year 2026 originations: $11.6 billion to $12.6 billion (21% to 31% year-over-year growth)
- Q1 2026 diluted EPS: $0.34 to $0.39 (up 240% to 290% year over year)
- Full-year 2026 diluted EPS: $1.65 to $1.80 (up 42% to 55% year over year)
LaBenne also said Q4’s effective tax rate was 16.9%, reflecting a non-recurring benefit from research and development tax credits and beneficial state law changes, and that the company expects a normalized effective tax rate of about 24% going forward.
On strategy, Sanborn reiterated LendingClub’s plans to enter the home improvement financing market, saying the company has acquired foundational technology, hired leadership and key talent, and signed its first distribution partnership. He said the company is integrating the acquired code base and remains on track to launch the partnership mid-year, with additional inbound partner interest.
Sanborn also addressed a planned rebrand, saying the LendingClub name was tied to peer-to-peer lending, which is “no longer part of the model,” and that the company wants branding that reflects broader offerings as a bank with savings and checking products. He said the company will put “some weight” behind the new brand later in 2026, while emphasizing it will remain a data-driven marketer rather than shifting immediately into broad, high-profile advertising.
About LendingClub (NYSE:LC)
LendingClub Corporation operates an online lending marketplace that connects borrowers seeking personal and small business credit with individual and institutional investors. The platform leverages technology to streamline the loan application and underwriting process, offering unsecured personal loans, auto refinancing, and small business loans. In addition to lending products, LendingClub provides high-yield savings accounts and certificates of deposit through its banking charter, following its acquisition of Radius Bank in 2021.
Founded in 2006 by Renaud Laplanche, LendingClub pioneered peer-to-peer lending in the United States, helping to democratize access to credit and investment opportunities.
