Group 1: Market Performance - The Connected Economy 100 index experienced a decline of 4.2%, with significant drops in companies like Xero, iRobot, and United Healthcare, while the "eat" pillar remained stable [1] - The index's performance over different time frames shows a year-to-date increase of 10.04% and a one-year increase of 30.85% [3] Group 2: LendingClub Performance - LendingClub's stock rose by 21% due to strong earnings, with personal-loan originations increasing by 32% year-on-year to $2.4 billion [2] - The net charge-off ratio for loans decreased to 3%, about half of the previous year's level, indicating improved credit trends [2] - Total revenue increased by 33% to $248 million, with GAAP profit reaching $38 million [2] Group 3: Cognex Performance - Cognex reported a 19% increase in stock value, with second-quarter revenue rising 4% to $249 million, marking its fourth consecutive quarter of organic growth [5] - The adjusted EBITDA margin improved to 20.7%, the highest in two years, driven by broad-based demand across various sectors [5][6] - Free cash flow reached $40 million, with management projecting up to 9% sales growth in the current quarter [5] Group 4: CyberArk Acquisition - CyberArk's stock surged following the announcement of its acquisition by Palo Alto Networks in a deal valued at approximately $25 billion [7] - Shareholders will receive $45 in cash and 2.2005 shares of Palo Alto for each share of CyberArk, representing a 26% premium to the stock's 10-day average [7] - The acquisition is positioned as a strategic move to enhance Palo Alto's identity protection capabilities in the AI-driven market [8]

Group 1 - LendingClub (NYSE: LC) was added to a value portfolio at the end of September 2024, and the stock has shown strong performance since then [1] - The individual behind the analysis has a background in engineering and has been involved in trading for over 20 years, applying analytical skills to investment strategies [2] - The analyst holds a beneficial long position in LendingClub shares through various means, indicating confidence in the stock's potential [3]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents LendingClub's unaudited condensed consolidated financial statements and detailed notes on accounting policies, revenue, EPS, and asset/liability categories [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (Thousands) | December 31, 2024 (Thousands) | | :------------------------------------ | :-------------------------- | :---------------------------- | | **Assets** | | | | Total cash and cash equivalents | $752,562 | $954,058 | | Securities available for sale | $3,527,142 | $3,452,648 | | Loans held for sale at fair value | $1,008,168 | $636,352 | | Loans and leases held for investment, net | $4,133,332 | $3,889,084 | | Total assets | $10,775,333 | $10,630,509 | | **Liabilities & Equity** | | | | Total deposits | $9,136,124 | $9,068,237 | | Total liabilities | $9,369,298 | $9,288,778 | | Total equity | $1,406,035 | $1,341,731 | - Total assets increased by **$144.8 million** (**1.4%**) from December 31, 2024, to June 30, 2025, reaching **$10,775,333 thousand**. Total equity increased by **$64.3 million** (**4.8%**) over the same period[18](index=18&type=chunk) [Condensed Consolidated Statements of Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) | Metric (Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total net revenue | $248,435 | $187,241 | $466,146 | $367,929 | | Provision for credit losses | $39,733 | $35,561 | $97,882 | $67,488 | | Total non-interest expense | $154,718 | $132,258 | $298,585 | $264,491 | | Net income | $38,178 | $14,903 | $49,849 | $27,153 | | Basic EPS | $0.33 | $0.13 | $0.44 | $0.24 | | Diluted EPS | $0.33 | $0.13 | $0.43 | $0.24 | - Net income for Q2 2025 increased by **156%** YoY to **$38,178 thousand**, and for the first half of 2025, it increased by **84%** YoY to **$49,849 thousand**. Total net revenue also saw significant growth, up **33%** YoY for Q2 2025 and **27%** YoY for the first half of 2025[21](index=21&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric (Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $38,178 | $14,903 | $49,849 | $27,153 | | Other comprehensive loss, net of tax | $(3,756) | $(188) | $(1,762) | $(7,081) | | Total comprehensive income | $34,422 | $14,715 | $48,087 | $20,072 | - Total comprehensive income for Q2 2025 was **$34,422 thousand**, a **134%** increase from Q2 2024. For the six months ended June 30, 2025, it was **$48,087 thousand**, a **140%** increase from the same period in 2024[23](index=23&type=chunk) [Condensed Consolidated Statements of Changes in Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) | Metric (Thousands) | Balance at December 31, 2024 | Stock-based Compensation | Net Issuances under Equity Incentive Plans | Net Unrealized Loss on AFS Securities, net of tax | Net Income | Balance at June 30, 2025 | | :------------------------------------ | :--------------------------- | :----------------------- | :----------------------------------------- | :------------------------------------------------ | :--------- | :----------------------- | | Common Stock Amount | $1,134 | — | $13 | — | — | $1,147 | | Additional Paid-in Capital | $1,702,316 | $20,427 | $(4,223) | — | — | $1,718,520 | | Accumulated Other Comprehensive Loss | $(24,243) | — | — | $(1,762) | — | $(26,005) | | Accumulated Deficit | $(337,476) | — | — | — | $49,849 | $(287,627) | | Total Equity | $1,341,731 | $20,427 | $(4,210) | $(1,762) | $49,849 | $1,406,035 | - Total equity increased from **$1,341,731 thousand** at December 31, 2024, to **$1,406,035 thousand** at June 30, 2025, primarily driven by net income of **$49,849 thousand** and stock-based compensation of **$20,427 thousand**[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric (Thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used for operating activities | $(1,052,350) | $(1,778,973) | | Net cash provided by investing activities | $787,483 | $703,850 | | Net cash provided by financing activities | $61,792 | $750,426 | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | $(203,075) | $(324,697) | | Cash, Cash Equivalents and Restricted Cash, End of Period | $774,321 | $969,451 | - Net cash used for operating activities decreased by **$726,623 thousand** (**40.9%**) in the first half of 2025 compared to the same period in 2024. Net cash provided by investing activities increased by **$83,633 thousand** (**11.9%**) in the first half of 2025[29](index=29&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Summary of Significant Accounting Policies](index=13&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) - LendingClub Corporation operates as a nationally chartered digital marketplace bank, leveraging data and technology to enhance credit access and improve savings returns. The company conducts most of its business through its wholly-owned subsidiary, LendingClub Bank, National Association (LC Bank)[32](index=32&type=chunk) - The company acquired an office building in April 2025, which is now included in Property, Equipment and Software, Net. The building is depreciated over **35 years**, while the land is not depreciated[35](index=35&type=chunk)[36](index=36&type=chunk) - LendingClub leases office space to third-party tenants, recognizing rental income under 'Other non-interest income'. The company applies the lessor practical expedient under ASC 842 to treat lease and nonlease components as a single component[37](index=37&type=chunk) - The company is evaluating the impact of new accounting standards ASU 2024-03 (Expense Disaggregation Disclosures) and ASU 2023-09 (Improvements to Income Tax Disclosures), effective for annual periods beginning after December 15, 2026 and 2024, respectively, but does not expect a material impact[39](index=39&type=chunk)[40](index=40&type=chunk) [Note 2. Marketplace Revenue](index=14&type=section&id=Note%202.%20Marketplace%20Revenue) - Marketplace revenue comprises origination fees, servicing fees, gain on sales of loans, and net fair value adjustments[41](index=41&type=chunk) | Metric (Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Origination fees | $87,578 | $77,131 | $157,522 | $147,210 | | Servicing fees | $16,395 | $19,869 | $29,143 | $39,461 | | Gain on sales of loans | $13,540 | $10,748 | $25,742 | $21,657 | | Net fair value adjustments | $(27,869) | $(51,395) | $(57,120) | $(96,084) | | Total marketplace revenue | $89,644 | $56,353 | $155,287 | $112,244 | - Total marketplace revenue increased by **59%** YoY to **$89,644 thousand** for Q2 2025 and by **38%** YoY to **$155,287 thousand** for the first half of 2025. Net fair value adjustments showed a decreased loss of **$23,526 thousand** (**46%**) for Q2 2025 YoY and **$38,964 thousand** (**41%**) for the first half of 2025 YoY[46](index=46&type=chunk) [Note 3. Earnings Per Share](index=15&type=section&id=Note%203.%20Earnings%20Per%20Share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to stockholders | $38,178 | $14,903 | $49,849 | $27,153 | | Basic EPS | $0.33 | $0.13 | $0.44 | $0.24 | | Diluted EPS | $0.33 | $0.13 | $0.43 | $0.24 | | Weighted-average common shares – Basic | 114,409,231 | 111,395,025 | 114,053,292 | 111,040,410 | | Weighted-average common shares – Diluted | 115,692,969 | 111,466,497 | 115,936,910 | 111,076,938 | - Basic and Diluted EPS for Q2 2025 increased to **$0.33**, up from **$0.13** in Q2 2024, reflecting a **154%** YoY increase. For the first half of 2025, Basic EPS was **$0.44** and Diluted EPS was **$0.43**, compared to **$0.24** for both in the prior year[47](index=47&type=chunk) [Note 4. Securities Available for Sale](index=16&type=section&id=Note%204.%20Securities%20Available%20for%20Sale) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Amortized Cost | $3,565,829 | $3,492,264 | | Gross Unrealized Gains | $22,768 | $30,469 | | Gross Unrealized Losses | $(57,426) | $(66,558) | | Fair Value | $3,527,142 | $3,452,648 | - The fair value of AFS securities increased by **$74,494 thousand** (**2.2%**) from December 31, 2024, to June 30, 2025. Gross unrealized losses decreased by **$9,132 thousand** (**13.7%**) over the same period[48](index=48&type=chunk) - The majority of unrealized losses in AFS securities are in U.S. agency-backed and mortgage-backed securities, considered high credit quality. These losses are primarily due to interest rate increases, and the company does not intend to sell these securities prior to recovery of amortized cost[49](index=49&type=chunk) | Maturity | Amortized Cost (Thousands) | Fair Value (Thousands) | Weighted Average Yield | | :------------------------------------ | :------------------------- | :--------------------- | :--------------------- | | Due after 1 year through 5 years | $3,139,758 | $3,157,085 | 6.85% | | Due after 5 years through 10 years | $45,782 | $42,702 | 3.77% | | Due after 10 years | $380,289 | $327,355 | 3.05% | | Total securities available for sale | $3,565,829 | $3,527,142 | 6.39% | [Note 5. Loans and Leases Held for Investment at Amortized Cost, Net of Allowance for Loan and Lease Losses](index=18&type=section&id=Note%205.%20Loans%20and%20Leases%20Held%20for%20Investment%20at%20Amortized%20Cost%2C%20Net%20of%20Allowance%20for%20Loan%20and%20Lease%20Losses) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Unsecured personal | $3,314,978 | $3,106,472 | | Residential mortgages | $166,568 | $172,711 | | Secured consumer | $242,517 | $230,232 | | Total consumer loans HFI | $3,724,063 | $3,509,415 | | Equipment finance | $49,891 | $64,232 | | Commercial real estate | $449,604 | $373,785 | | Commercial and industrial | $162,763 | $178,386 | | Total commercial loans and leases HFI | $662,258 | $616,403 | | Total loans and leases HFI | $4,386,321 | $4,125,818 | | Allowance for loan and lease losses | $(252,989) | $(236,734) | | Loans and leases HFI, net | $4,133,332 | $3,889,084 | - Total loans and leases held for investment (HFI) increased by **$260,503 thousand** (**6.3%**) from December 31, 2024, to June 30, 2025. Consumer loans HFI grew by **$214,648 thousand** (**6.1%**), while commercial loans and leases HFI increased by **$45,855 thousand** (**7.4%**)[53](index=53&type=chunk) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Gross allowance for loan and lease losses | $293,707 | $285,686 | | Recovery asset value | $(40,718) | $(48,952) | | Allowance for loan and lease losses | $252,989 | $236,734 | - The Allowance for Loan and Lease Losses (ALLL) increased by **$16,255 thousand** (**6.9%**) from December 31, 2024, to June 30, 2025. The ALLL ratio for total loans and leases HFI was **5.8%** at June 30, 2025, up from **5.7%** at December 31, 2024[53](index=53&type=chunk)[55](index=55&type=chunk) | Delinquency Status (Thousands) | Unsecured Personal | Residential Mortgages | Secured Consumer | Total Consumer Loans HFI | | :------------------------------- | :----------------- | :-------------------- | :--------------- | :----------------------- | | Current | $3,261,895 | $166,496 | $239,151 | $3,722,344 | | 30-59 days past due | $18,657 | — | $2,187 | $20,844 | | 60-89 days past due | $17,189 | — | $851 | $18,040 | | 90 or more days past due | $15,518 | $72 | $328 | $15,918 | - Total nonaccrual loans and leases held for investment decreased by **$15,340 thousand** (**21.2%**) from December 31, 2024, to June 30, 2025, reaching **$56,964 thousand**. The nonaccrual ratio decreased from **1.8%** to **1.3%** over the same period[76](index=76&type=chunk) [Note 6. Securitizations and Variable Interest Entities](index=26&type=section&id=Note%206.%20Securitizations%20and%20Variable%20Interest%20Entities) - LendingClub engages in Structured Program transactions with unconsolidated Variable Interest Entities (VIEs), where the company has no direct recourse to its assets[77](index=77&type=chunk) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Securities available for sale at fair value | $3,146,507 | $3,069,771 | | Other assets | $46,883 | $46,269 | | Total assets | $3,193,390 | $3,116,040 | | Total liabilities | $3,748 | $6,313 | | Total net assets (maximum loss exposure) | $3,189,642 | $3,109,727 | - The aggregate unpaid principal balance of off-balance sheet loans held by unconsolidated VIEs was **$3.7 billion** as of June 30, 2025, with **$51.7 million** being **30 days** or more past due. This represents an increase from **$3.5 billion** and **$44.7 million**, respectively, at December 31, 2024[79](index=79&type=chunk) [Note 7. Fair Value Measurements](index=29&type=section&id=Note%207.%20Fair%20Value%20Measurements) | Asset/Liability (Thousands) | Level 1 | Level 2 | Level 3 | Fair Value | | :------------------------------------ | :------ | :------ | :------ | :--------- | | **Assets (June 30, 2025)** | | | | | | Loans held for sale at fair value | — | — | $1,008,168 | $1,008,168 | | Loans held for investment at fair value | — | — | $631,736 | $631,736 | | Securities available for sale | — | $380,635 | $3,146,507 | $3,527,142 | | Servicing assets | — | — | $57,909 | $57,909 | | Total assets | — | $382,603 | $4,844,320 | $5,226,923 | | **Liabilities (June 30, 2025)** | | | | | | Other liabilities | — | $3,513 | $5,851 | $9,364 | - The company primarily uses a discounted cash flow (DCF) model with significant unobservable inputs (Level 3) to estimate fair value for instruments like loans held for sale/investment and certain asset-backed securities. Key inputs include discount rate, annualized net charge-off rate, and annualized prepayment rate[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) | Asset (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Loans held for sale at fair value | $1,008,168 | $636,352 | | Expected remaining weighted-average life (years) | 1.3 | 1.4 | | Sensitivity to 100 bps increase in Discount rate | $(11,709) | $(7,663) | | Sensitivity to 10% increase in Annualized net charge-off rate | $(9,276) | $(6,436) | | Sensitivity to 10% increase in Annualized prepayment rate | $(2,231) | $(1,274) | | Asset (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Loans held for investment at fair value | $631,736 | $1,027,798 | | Expected remaining weighted-average life (years) | 0.8 | 0.9 | | Sensitivity to 100 bps increase in Discount rate | $(4,137) | $(7,832) | | Sensitivity to 10% increase in Annualized net charge-off rate | $(6,350) | $(11,821) | | Sensitivity to 10% increase in Annualized prepayment rate | $(2,700) | $(4,813) | [Note 8. Derivative Instruments and Hedging Activities](index=40&type=section&id=Note%208.%20Derivative%20Instruments%20and%20Hedging%20Activities) - LendingClub uses derivative instruments, including interest rate swaps and interest rate caps, to manage interest rate risk on fixed-rate assets. Credit support agreements with strategic investors are accounted for as credit derivative liabilities[104](index=104&type=chunk) | Derivative Type | Notional (Thousands) June 30, 2025 | Derivative Liability (Thousands) June 30, 2025 | Notional (Thousands) December 31, 2024 | Derivative Liability (Thousands) December 31, 2024 | | :------------------------------------ | :--------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Credit derivatives | $8,360 | $(5,013) | $12,484 | $(10,930) | | Interest rate caps | $200,000 | — | $200,000 | — | - The company recognized total gains of **$947 thousand** on derivatives not designated as accounting hedges for Q2 2025, compared to losses of **$2,071 thousand** in Q2 2024. For the first half of 2025, total gains were **$2,046 thousand**, compared to losses of **$3,505 thousand** in the prior year[106](index=106&type=chunk) - Interest rate swaps are used as fair value hedges to manage exposure to SOFR changes on fixed-rate assets. Total gains on fair value hedges were **$758 thousand** for Q2 2025 and **$740 thousand** for the first half of 2025[107](index=107&type=chunk)[108](index=108&type=chunk) [Note 9. Property, Equipment and Software, net](index=42&type=section&id=Note%209.%20Property%2C%20Equipment%20and%20Software%2C%20net) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Software | $239,698 | $222,000 | | Land and building | $75,573 | — | | Total property, equipment and software | $357,237 | $280,469 | | Accumulated depreciation and amortization | $(110,953) | $(112,937) | | Total property, equipment and software, net | $246,284 | $167,532 | - Net property, equipment and software increased by **$78,752 thousand** (**47%**) from December 31, 2024, to June 30, 2025, primarily due to the acquisition of an office building in April 2025. Depreciation and amortization expense was **$14.8 million** for Q2 2025 and **$27.9 million** for the first half of 2025[110](index=110&type=chunk) [Note 10. Goodwill and Intangible Assets](index=42&type=section&id=Note%2010.%20Goodwill%20and%20Intangible%20Assets) - Goodwill remained stable at **$75.7 million** as of June 30, 2025, and December 31, 2024, with no impairment expense recorded. Intangible assets, primarily customer relationships, had a net carrying value of **$7,068 thousand** at June 30, 2025, down from **$8,586 thousand** at December 31, 2024[111](index=111&type=chunk)[113](index=113&type=chunk) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Gross carrying value | $54,500 | $54,500 | | Accumulated amortization | $(47,432) | $(45,914) | | Net carrying value | $7,068 | $8,586 | - Amortization expense for intangible assets was **$0.7 million** for Q2 2025 and **$1.5 million** for the first half of 2025, a decrease from **$0.9 million** and **$1.8 million**, respectively, in the prior year periods[113](index=113&type=chunk) [Note 11. Other Assets](index=43&type=section&id=Note%2011.%20Other%20Assets) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Deferred tax assets, net | $121,793 | $137,155 | | Servicing assets | $58,131 | $61,020 | | Nonmarketable equity investments | $47,203 | $44,114 | | Accrued interest receivable | $39,958 | $40,388 | | Operating lease assets | $17,194 | $21,304 | | Intangible assets, net | $7,068 | $8,586 | | Other | $87,286 | $91,415 | | Total other assets | $378,633 | $403,982 | - Total other assets decreased by **$25,349 thousand** (**6.3%**) from December 31, 2024, to June 30, 2025, primarily due to a decrease in deferred tax assets, net, and servicing assets[115](index=115&type=chunk) [Note 12. Deposits](index=44&type=section&id=Note%2012.%20Deposits) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Savings and money market accounts | $6,429,234 | $5,903,869 | | Certificates of deposit | $1,898,714 | $2,294,214 | | Checking accounts | $457,779 | $478,036 | | Total interest-bearing deposits | $8,785,727 | $8,676,119 | | Noninterest-bearing deposits | $350,397 | $392,118 | | Total deposits | $9,136,124 | $9,068,237 | - Total deposits increased by **$67,887 thousand** (**0.7%**) from December 31, 2024, to June 30, 2025. Savings and money market accounts grew by **$525,365 thousand** (**8.9%**), while certificates of deposit decreased by **$395,500 thousand** (**17.2%**)[116](index=116&type=chunk) | Maturity Year | Certificates of Deposit (Thousands) | | :-------------- | :---------------------------------- | | 2025 | $920,711 | | 2026 | $945,164 | | 2027 | $19,769 | | 2028 | $2,454 | | 2029 | $10,189 | | Thereafter | $427 | | Total | $1,898,714 | [Note 13. Borrowings](index=44&type=section&id=Note%2013.%20Borrowings) - The Company had no debt outstanding as of June 30, 2025, or December 31, 2024[117](index=117&type=chunk) | Borrowing Source | Available Borrowing Capacity (Thousands) June 30, 2025 | Pledged Collateral (Thousands) June 30, 2025 | Available Borrowing Capacity (Thousands) December 31, 2024 | Pledged Collateral (Thousands) December 31, 2024 | | :------------------------------------ | :--------------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | FRB Discount Window | $3,147,467 | $4,040,978 | $2,635,034 | $3,245,547 | | FHLB of Des Moines | $604,991 | $799,732 | $626,117 | $829,885 | | Total available borrowing capacity | $3,752,458 | $4,840,710 | $3,261,151 | $4,075,432 | [Note 14. Other Liabilities](index=45&type=section&id=Note%2014.%20Other%20Liabilities) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Accounts payable and accrued expenses | $67,509 | $78,131 | | Due to borrowers | $61,614 | $24,449 | | Operating lease liabilities | $22,389 | $28,502 | | Payable to investors | $21,089 | $22,833 | | Other | $60,573 | $66,626 | | Total other liabilities | $233,174 | $220,541 | - Total other liabilities increased by **$12,633 thousand** (**5.7%**) from December 31, 2024, to June 30, 2025, primarily driven by a significant increase in amounts due to borrowers (**$61,614 thousand** vs. **$24,449 thousand**)[119](index=119&type=chunk) [Note 15. Employee Incentive Plans](index=45&type=section&id=Note%2015.%20Employee%20Incentive%20Plans) | Metric (Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | RSUs | $9,236 | $11,573 | $18,310 | $23,555 | | PBRSUs | $1,270 | $(258) | $2,117 | $1,359 | | Stock-based compensation expense, net | $9,065 | $9,449 | $17,584 | $20,993 | - Net stock-based compensation expense decreased by **$384 thousand** (**4.1%**) for Q2 2025 YoY and by **$3,409 thousand** (**16.2%**) for the first half of 2025 YoY. Unrecognized compensation cost for unvested RSUs was **$50.0 million**, expected to be recognized over **1.7 years**[121](index=121&type=chunk)[124](index=124&type=chunk) - Unrecognized compensation cost for unvested PBRSUs was **$5.9 million**, expected to be recognized over **1.3 years**[127](index=127&type=chunk) [Note 16. Income Taxes](index=46&type=section&id=Note%2016.%20Income%20Taxes) - Income tax expense for Q2 2025 was **$15.8 million** (**29.3%** effective rate), and for the first half of 2025, it was **$19.8 million** (**28.5%** effective rate). This is a significant increase from Q2 2024 (**$4.5 million**, **23.3%**) and H1 2024 (**$8.8 million**, **24.5%**)[128](index=128&type=chunk) - The increase in the effective tax rate is partly due to a discrete tax expense recognized in Q2 2025, resulting from the revaluation of deferred tax assets following California Senate Bill 132, which changed the state's apportionment formula[128](index=128&type=chunk) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Deferred tax assets, net of liabilities | $168,118 | $183,480 | | Valuation allowance | $(46,325) | $(46,325) | | Deferred tax assets, net of valuation allowance | $121,793 | $137,155 | - The company maintains a valuation allowance of **$46.3 million** related to certain state net operating loss carryforwards and state tax credit carryforwards[129](index=129&type=chunk) [Note 17. Leases](index=47&type=section&id=Note%2017.%20Leases) - LendingClub acquired an office building in San Francisco in April 2025, which will become its headquarters in Q2 2026. Remaining operating leases have terms of **3-4 years**[130](index=130&type=chunk) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Operating lease assets | $17,194 | $21,304 | | Operating lease liabilities | $22,389 | $28,502 | - Net lease costs were **$2.7 million** for Q2 2025 and **$5.5 million** for the first half of 2025. The weighted-average remaining lease term is **2.71 years** with a discount rate of **4.76%** as of June 30, 2025[131](index=131&type=chunk)[132](index=132&type=chunk) - The company also acts as a lessor, leasing space in its office building to third-party tenants, generating **$1.9 million** in rental income for both Q2 and H1 2025[133](index=133&type=chunk)[134](index=134&type=chunk) - Sales-type leases for equipment (Equipment Finance) generated **$0.7 million** in interest for Q2 2025 and **$1.6 million** for H1 2025, a decrease from **$1.4 million** and **$3.1 million** respectively in the prior year periods[135](index=135&type=chunk) [Note 18. Commitments and Contingencies](index=49&type=section&id=Note%2018.%20Commitments%20and%20Contingencies) - Unfunded loan commitments totaled **$103.4 million** as of June 30, 2025, a slight decrease from **$105.0 million** at December 31, 2024[139](index=139&type=chunk) - The company is subject to various legal claims, regulatory exams, investigations, and enforcement actions. It accrues for probable losses that can be reasonably estimated[140](index=140&type=chunk)[141](index=141&type=chunk) - Historically, such matters have been resolved without material adverse effects on financial operations or business conduct, but no assurances can be given for future outcomes[142](index=142&type=chunk) [Note 19. Regulatory Requirements](index=50&type=section&id=Note%2019.%20Regulatory%20Requirements) - LendingClub and LC Bank are subject to comprehensive supervision and capital adequacy requirements by the FRB and OCC, respectively, under the Basel III capital framework[143](index=143&type=chunk)[144](index=144&type=chunk) | Capital Ratio | LendingClub Corporation June 30, 2025 | LendingClub Corporation December 31, 2024 | LC Bank June 30, 2025 | LC Bank December 31, 2024 | Required Minimum | Well Capitalized Minimum | | :------------------------------------ | :------------------------------------ | :---------------------------------------- | :-------------------- | :------------------------ | :--------------- | :----------------------- | | CET1 capital ratio | 17.5% | 17.3% | 15.5% | 16.1% | 7.0% | 6.5% | | Tier 1 capital ratio | 17.5% | 17.3% | 15.5% | 16.1% | 8.5% | 8.0% | | Total capital ratio | 18.8% | 18.5% | 16.8% | 17.4% | 10.5% | 10.0% | | Tier 1 leverage ratio | 12.2% | 11.0% | 10.8% | 10.3% | 4.0% | 5.0% | - Both LendingClub Corporation and LC Bank exceeded the 'well-capitalized' thresholds as of June 30, 2025, and December 31, 2024, meeting all applicable capital adequacy requirements[145](index=145&type=chunk)[147](index=147&type=chunk) - LC Bank paid a **$50 million** cash dividend to LendingClub Corporation in Q1 2025, returning a capital contribution made in H2 2024[148](index=148&type=chunk) [Note 20. Segment Reporting](index=52&type=section&id=Note%2020.%20Segment%20Reporting) - LendingClub operates two reportable segments: LendingClub Bank (LC Bank) and LendingClub Corporation (Parent Only). LC Bank handles core banking activities like loan origination, investment, sales, and deposit management. The Parent Only segment reflects pre-LC Bank formation operations, including servicing fee revenue and interest income/expense from legacy programs[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) | Metric (Thousands) | LC Bank Q2 2025 | LC Bank Q2 2024 | Parent Only Q2 2025 | Parent Only Q2 2024 | Total Segments Q2 2025 | Total Segments Q2 2024 | | :------------------------------------ | :-------------- | :-------------- | :------------------ | :------------------ | :--------------------- | :--------------------- | | Total net revenue | $241,629 | $178,846 | $11,917 | $14,451 | $253,546 | $193,297 | | Provision for credit losses | $(39,733) | $(35,561) | — | — | $(39,733) | $(35,561) | | Total non-interest expense | $(150,933) | $(126,857) | $(8,896) | $(11,457) | $(159,829) | $(138,314) | | Net income | $37,429 | $12,556 | $749 | $2,347 | $38,178 | $14,903 | - LC Bank's net income for Q2 2025 increased by **198%** YoY to **$37,429 thousand**, while the Parent Only segment's net income decreased by **68%** YoY to **$749 thousand**. Total net revenue for LC Bank increased by **35%** YoY[155](index=155&type=chunk) - No individual borrower or marketplace investor accounted for **10%** or more of total net revenue. All revenue and long-lived assets are based in the United States[161](index=161&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of LendingClub's financial performance, including an executive summary, key highlights, and detailed analysis [Overview](index=57&type=section&id=Overview) - LendingClub operates a nationally chartered digital marketplace bank focused on providing members with financial tools and guidance through a data- and technology-driven digital experience to increase credit access, lower borrowing costs, and improve savings returns[166](index=166&type=chunk) [Executive Summary](index=57&type=section&id=Executive%20Summary) - Loan originations for Q2 2025 increased by **$578.6 million** (**32%**) YoY, driven by unsecured personal loan volume. HFI originations increased by **105%** YoY, while HFS originations increased by **15%** YoY[167](index=167&type=chunk) - Total net revenue increased by **$61.2 million** (**33%**) YoY for Q2 2025, with marketplace revenue up **59%** and net interest income up **20%**. Net interest margin improved to **6.14%** from **5.75%** YoY[167](index=167&type=chunk) - Net income for Q2 2025 increased by **$23.3 million** (**156%**) YoY to **$38,178 thousand**, resulting in diluted EPS of **$0.33**, up from **$0.13**[167](index=167&type=chunk) - Total assets increased by **$1.2 billion** (**12%**) YoY to **$10.775 billion**, and total deposits increased by **$1.0 billion** (**13%**) YoY to **$9.136 billion**, with FDIC-insured deposits representing approximately **86%** of the total[169](index=169&type=chunk) [Financial Highlights](index=59&type=section&id=Financial%20Highlights) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Total net revenue (Thousands) | $248,435 | $217,711 | $187,241 | $466,146 | $367,929 | | Net income (Thousands) | $38,178 | $11,671 | $14,903 | $49,849 | $27,153 | | Diluted EPS | $0.33 | $0.10 | $0.13 | $0.43 | $0.24 | | Net interest margin | 6.14% | 5.97% | 5.75% | 6.05% | 5.75% | | Efficiency ratio | 62.3% | 66.1% | 70.6% | 64.1% | 71.9% | | Return on average equity (ROE) | 11.1% | 3.5% | 4.7% | 7.3% | 4.3% | | Total loan originations (Millions) | $2,391 | $1,989 | $1,813 | $4,380 | $3,459 | | Total servicing portfolio AUM (Millions) | $12,524 | $12,241 | $12,999 | | | - The efficiency ratio improved to **62.3%** in Q2 2025 from **70.6%** in Q2 2024, indicating better cost management relative to revenue. Return on average equity (ROE) significantly increased to **11.1%** in Q2 2025 from **4.7%** in Q2 2024[171](index=171&type=chunk) | Balance Sheet Data (Thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :------------ | | Total assets | $10,775,333 | $10,483,096 | $9,586,050 | | Total deposits | $9,136,124 | $8,905,902 | $8,095,328 | | Total equity | $1,406,035 | $1,364,517 | $1,287,945 | | ALLL to total loans HFI at amortized cost | 5.8% | 5.8% | 5.4% | | Net charge-off ratio | 3.0% | 4.8% | 6.2% | - The net charge-off ratio decreased to **3.0%** in Q2 2025 from **6.2%** in Q2 2024, indicating improved credit performance[174](index=174&type=chunk) [Results of Operations](index=61&type=section&id=Results%20of%20Operations) [Marketplace Revenue](index=63&type=section&id=Marketplace%20Revenue) | Metric (Thousands) | Q2 2025 | Q1 2025 | Q2 2024 | Change Q2 2025 vs Q1 2025 (%) | Change Q2 2025 vs Q2 2024 (%) | | :-------------------- | :------ | :------ | :------ | :---------------------------- | :---------------------------- | | Origination fees | $87,578 | $69,944 | $77,131 | 25% | 14% | | Servicing fees | $16,395 | $12,748 | $19,869 | 29% | (17)% | | Gain on sales of loans | $13,540 | $12,202 | $10,748 | 11% | 26% | | Net fair value adjustments | $(27,869) | $(29,251) | $(51,395) | 5% | 46% | | Total marketplace revenue | $89,644 | $65,643 | $56,353 | 37% | 59% | - Origination fees increased by **14%** YoY in Q2 2025 due to higher marketplace loan origination volumes. Servicing fees decreased by **17%** YoY due to a lower principal balance of loans serviced and reduced fees on delinquent loan collections[185](index=185&type=chunk)[192](index=192&type=chunk) - Gain on sales of loans increased by **26%** YoY in Q2 2025, driven by higher marketplace loan sales volume and lower Structured Program transaction expenses in the prior year. Net fair value adjustments showed a decreased loss of **$23.5 million** (**46%**) YoY, primarily due to improved loan sale prices and better credit performance[197](index=197&type=chunk)[202](index=202&type=chunk) [Net Interest Income](index=68&type=section&id=Net%20Interest%20Income) | Metric (Thousands) | Q2 2025 | Q1 2025 | Q2 2024 | Change Q2 2025 vs Q1 2025 (%) | Change Q2 2025 vs Q2 2024 (%) | | :------------------------------------ | :------ | :------ | :------ | :---------------------------- | :---------------------------- | | Total interest income | $237,097 | $232,059 | $219,634 | 2% | 8% | | Total interest expense | $82,848 | $82,102 | $91,106 | 1% | (9)% | | Net interest income | $154,249 | $149,957 | $128,528 | 3% | 20% | | Net interest margin | 6.14% | 5.97% | 5.75% | | | - Net interest income increased by **$25.7 million** (**20%**) YoY in Q2 2025, driven by a **$17.5 million** increase in interest income and an **$8.3 million** decrease in interest expense. The net interest margin improved from **5.75%** to **6.14%** YoY[177](index=177&type=chunk)[212](index=212&type=chunk) - The increase in net interest income was primarily due to growth in total interest-earning assets and a decrease in interest expense from a lower average rate on interest-bearing deposits[167](index=167&type=chunk) | Metric (Thousands) | H1 2025 | H1 2024 | Change H1 2025 vs H1 2024 (%) | | :------------------------------------ | :------ | :------ | :---------------------------- | | Total interest income | $469,156 | $426,985 | 10% | | Total interest expense | $164,950 | $175,569 | (6)% | | Net interest income | $304,206 | $251,416 | 21% | | Net interest margin | 6.05% | 5.75% | | [Provision for Credit Losses](index=74&type=section&id=Provision%20for%20Credit%20Losses) | Metric (Thousands) | Q2 2025 | Q1 2025 | Q2 2024 | Change Q2 2025 vs Q1 2025 (%) | Change Q2 2025 vs Q2 2024 (%) | | :------------------------------------ | :------ | :------ | :------ | :---------------------------- | :---------------------------- | | Credit loss expense for loans and leases HFI | $40,596 | $56,382 | $36,577 | (28)% | 11% | | Credit loss (benefit) expense for AFS securities | $(819) | $1,321 | $(809) | (162)% | 1% | | Credit loss (benefit) expense for unfunded lending commitments | $(44) | $446 | $(207) | (110)% | (79)% | | Total provision for credit losses | $39,733 | $58,149 | $35,561 | (32)% | 12% | | Loan originations held for investment | $689,232 | $674,673 | $335,646 | 2% | 105% | - Total provision for credit losses decreased by **32%** QoQ in Q2 2025, primarily due to improved credit performance. However, it increased by **12%** YoY, driven by higher initial provision from increased HFI loan originations, partially offset by improved credit performance[220](index=220&type=chunk)[221](index=221&type=chunk) - For the first half of 2025, the provision for credit losses increased by **45%** YoY to **$97.9 million**, mainly due to higher HFI loan originations and an additional economic qualitative allowance in Q1 2025[222](index=222&type=chunk) [Allowance for Credit Losses](index=75&type=section&id=Allowance%20for%20Credit%20Losses) | Metric (Thousands) | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | ALLL, beginning of period | $244,193 | $236,734 | $259,150 | $236,734 | $310,387 | | Credit loss expense for loans and leases HFI | $40,596 | $56,382 | $36,577 | $96,978 | $65,823 | | Charge-offs | $(49,854) | $(66,576) | $(78,088) | $(116,430) | $(168,430) | | Recoveries | $18,054 | $17,653 | $11,270 | $35,707 | $21,129 | | ALLL, end of period | $252,989 | $244,193 | $228,909 | $252,989 | $228,909 | | ALLL ratio | 5.8% | 5.8% | 5.4% | | | - The Allowance for Loan and Lease Losses (ALLL) increased to **$252,989 thousand** at June 30, 2025, from **$228,909 thousand** at June 30, 2024. The ALLL ratio for total loans and leases HFI increased from **5.4%** to **5.8%** YoY[224](index=224&type=chunk)[227](index=227&type=chunk) - Gross allowance for loan and lease losses increased to **$293,707 thousand** at June 30, 2025, from **$285,368 thousand** at June 30, 2024, maintaining a gross allowance ratio of **6.7%**[224](index=224&type=chunk)[227](index=227&type=chunk) [Net Charge-Offs](index=76&type=section&id=Net%20Charge-Offs) | Metric (Thousands) | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Average loans and leases HFI at amortized cost | $4,176,587 | $4,109,196 | $4,341,007 | $4,142,706 | $4,487,519 | | Net charge-offs | $31,800 | $48,923 | $66,818 | $80,723 | $147,301 | | Net charge-off ratio | 3.0% | 4.8% | 6.2% | 3.9% | 6.6% | - Net charge-offs decreased by **$35,018 thousand** (**52.4%**) YoY in Q2 2025, and by **$66,578 thousand** (**45.2%**) for the first half of 2025 YoY. The net charge-off ratio improved significantly to **3.0%** in Q2 2025 from **6.2%** in Q2 2024[229](index=229&type=chunk) [Nonaccrual](index=76&type=section&id=Nonaccrual) | Metric (Thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :------------ | | Nonaccrual loans and leases HFI at amortized cost | $56,964 | $59,706 | $65,146 | | % of total loans and leases HFI at amortized cost | 1.3% | 1.4% | 1.5% | - Nonaccrual loans and leases held for investment at amortized cost decreased by **$8,182 thousand** (**12.6%**) YoY in Q2 2025. The percentage of nonaccrual loans to total HFI loans decreased from **1.5%** in Q2 2024 to **1.3%** in Q2 2025[231](index=231&type=chunk) [Non-Interest Expense](index=77&type=section&id=Non-Interest%20Expense) | Metric (Thousands) | Q2 2025 | Q1 2025 | Q2 2024 | Change Q2 2025 vs Q1 2025 (%) | Change Q2 2025 vs Q2 2024 (%) | | :------------------------------------ | :------ | :------ | :------ | :---------------------------- | :---------------------------- | | Compensation and benefits | $61,989 | $58,389 | $56,540 | 6% | 10% | | Marketing | $33,580 | $29,239 | $26,665 | 15% | 26% | | Equipment and software | $14,495 | $14,644 | $12,360 | (1)% | 17% | | Depreciation and amortization | $15,460 | $13,909 | $13,072 | 11% | 18% | | Professional services | $10,300 | $9,764 | $7,804 | 5% | 32% | | Occupancy | $4,787 | $4,345 | $3,941 | 10% | 21% | | Other non-interest expense | $14,107 | $13,577 | $11,876 | 4% | 19% | | Total non-interest expense | $154,718 | $143,867 | $132,258 | 8% | 17% | - Total non-interest expense increased by **$22.5 million** (**17%**) YoY in Q2 2025. Marketing expense saw a **26%** YoY increase due to higher origination volume and resumed marketing initiatives. Compensation and benefits increased by **10%** YoY due to higher variable compensation and headcount[167](index=167&type=chunk)[236](index=236&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) - Professional services increased by **32%** YoY, and occupancy expense increased by **21%** YoY, primarily due to operating expenses associated with the newly acquired office building[244](index=244&type=chunk)[247](index=247&type=chunk)[249](index=249&type=chunk) [Income Taxes](index=79&type=section&id=Income%20Taxes) - Income tax expense for Q2 2025 was **$15.8 million** (**29.3%** effective rate), a **250%** increase YoY. For the first half of 2025, it was **$19.8 million** (**28.5%** effective rate), a **125%** increase YoY[252](index=252&type=chunk) - The higher effective tax rate in 2025 is partly due to a discrete tax expense recognized in Q2 2025, resulting from the revaluation of deferred tax assets following California Senate Bill 132, which changed the state's apportionment formula[252](index=252&type=chunk) - The company is evaluating the impact of the One Big Beautiful Bill Act (OBBBA) but does not expect a significant impact on the effective tax rate, though it anticipates a reduction in current taxes payable[257](index=257&type=chunk) [Segment Information](index=80&type=section&id=Segment%20Information) - LendingClub's operating segments are LendingClub Bank (LC Bank) and LendingClub Corporation (Parent Only), with net income as the key performance metric for resource allocation and evaluation[258](index=258&type=chunk) - LC Bank handles core banking activities, including loan origination, investment, sales, and deposit management. The Parent Only segment reflects pre-LC Bank formation operations, such as servicing fee revenue and interest income/expense from legacy programs[259](index=259&type=chunk)[260](index=260&type=chunk) | Metric (Thousands) | LC Bank Q2 2025 | LC Bank Q2 2024 | Parent Only Q2 2025 | Parent Only Q2 2024 | Total Segments Q2 2025 | Total Segments Q2 2024 | | :------------------------------------ | :-------------- | :-------------- | :------------------ | :------------------ | :--------------------- | :--------------------- | | Total net revenue | $241,629 | $178,846 | $11,917 | $14,451 | $253,546 | $193,297 | | Net income | $37,429 | $12,556 | $749 | $2,347 | $38,178 | $14,903 | - LC Bank's net income for Q2 2025 increased by **198%** YoY to **$37,429 thousand**, while the Parent Only segment's net income decreased by **68%** YoY to **$749 thousand**[264](index=264&type=chunk) [Non-GAAP Financial Measures](index=82&type=section&id=Non-GAAP%20Financial%20Measures) - LendingClub uses non-GAAP financial measures like Pre-Provision Net Revenue (PPNR), Tangible Book Value (TBV) Per Common Share, and Return on Tangible Common Equity (ROTCE) to supplement GAAP financial statements, providing insights into underlying financial performance and enabling comparisons[268](index=268&type=chunk)[269](index=269&type=chunk) | Metric (Thousands) | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | GAAP Net income | $38,178 | $11,671 | $14,903 | $49,849 | $27,153 | | Pre-provision net revenue | $93,717 | $73,844 | $54,983 | $167,561 | $103,438 | | Return on tangible common equity | 11.8% | 3.7% | 5.1% | 7.8% | 4.6% | - PPNR for Q2 2025 was **$93.7 million**, a **70%** increase YoY, reflecting improved underlying business performance. ROTCE for Q2 2025 was **11.8%**, up from **5.1%** in Q2 2024[169](index=169&type=chunk)[276](index=276&type=chunk) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :------------ | | GAAP common equity (Thousands) | $1,406,035 | $1,364,517 | $1,287,945 | | Tangible common equity (Thousands) | $1,323,250 | $1,281,022 | $1,201,935 | | Book value per common share | $12.25 | $11.95 | $11.52 | | Tangible book value per common share | $11.53 | $11.22 | $10.75 | [Supervision and Regulatory Environment](index=84&type=section&id=Supervision%20and%20Regulatory%20Environment) - LendingClub is subject to comprehensive supervision, examination, and enforcement by federal and state regulatory agencies, including the FRB, OCC, and now the CFPB (as LC Bank's assets exceeded **$10 billion** for four consecutive quarters)[277](index=277&type=chunk)[280](index=280&type=chunk) - Non-compliance with regulations could lead to license loss, enforcement actions, lawsuits, penalties, contract breaches, or business practice modifications, adversely affecting operations and financial results[281](index=281&type=chunk) [Capital Management](index=86&type=section&id=Capital%20Management) - LendingClub actively manages capital to align with its risk profile, risk tolerance, and regulatory/market expectations, adhering to Basel III capital adequacy guidelines set by the OCC and FRB[283](index=283&type=chunk)[284](index=284&type=chunk) | Capital Ratio | LendingClub Corporation June 30, 2025 | LC Bank June 30, 2025 | Required Minimum | Well Capitalized Minimum | | :------------------------------------ | :------------------------------------ | :-------------------- | :--------------- | :----------------------- | | CET1 capital ratio | 17.5% | 15.5% | 7.0% | 6.5% | | Tier 1 capital ratio | 17.5% | 15.5% | 8.5% | 8.0% | | Total capital ratio | 18.8% | 16.8% | 10.5% | 10.0% | | Tier 1 leverage ratio | 12.2% | 10.8% | 4.0% | 5.0% | - Both LendingClub Corporation and LC Bank maintained capital ratios well above the 'well-capitalized' minimums as of June 30, 2025[286](index=286&type=chunk) [Liquidity](index=87&type=section&id=Liquidity) - LendingClub manages liquidity to meet daily and forecasted cash flow requirements, as well as unexpected funding needs, ensuring timely access to funds for customers and supporting operational expenses[287](index=287&type=chunk)[288](index=288&type=chunk) | LC Bank Liquidity Source (Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $731,078 | $932,463 | | Securities available for sale | $380,635 | $382,876 | | Deposits | $9,258,380 | $9,116,821 | | Total available borrowing capacity | $3,752,458 | $3,261,151 | - Uninsured deposits totaled **$1.3 billion** (**14%** of total deposits) at June 30, 2025, up from **$1.2 billion** (**13%**) at December 31, 2024. Uninsured time deposits maturing within **3 months** were **$25.996 million**[292](index=292&type=chunk) - Net capital expenditures were **$103.8 million** for the first half of 2025, primarily driven by the **$74.5 million** acquisition of an office building and related improvements[293](index=293&type=chunk) - The holding company's primary liquidity source is cash and cash equivalents, which increased to **$136.6 million** at June 30, 2025, from **$66.0 million** at December 31, 2024, partly due to a **$50 million** dividend from LC Bank[295](index=295&type=chunk) [Market Risk](index=89&type=section&id=Market%20Risk) - LendingClub's primary market risk is interest rate risk, arising from fixed-rate loans, securities, and deposits. The company uses sensitivity analysis and interest rate hedging instruments to manage this exposure[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk) | Hypothetical Change in Interest Rates | Projected Change in Net Interest Income (June 30, 2025) | | :------------------------------------ | :------------------------------------------------------ | | +200 basis points | (7.6)% | | +100 basis points | (3.8)% | | -100 basis points | 1.3% | | -200 basis points | 2.1% | - Net interest income is projected to decrease in rising interest rate environments due to higher rates on interest-bearing deposits, partially offset by higher rates on new loans and hedging activities. Conversely, it is projected to increase in declining rate environments[303](index=303&type=chunk) [Contingencies](index=90&type=section&id=Contingencies) - For a comprehensive discussion of contingencies, refer to Note 18. Commitments and Contingencies in the financial statements[306](index=306&type=chunk) [Critical Accounting Estimates](index=90&type=section&id=Critical%20Accounting%20Estimates) - There have been no significant changes to the company's critical accounting estimates during the first half of 2025[308](index=308&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=92&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the detailed discussion on market risk provided in Management's Discussion and Analysis of Financial Condition and Results of Operations - For a comprehensive discussion regarding quantitative and qualitative disclosures about market risk, refer to 'Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – Market Risk'[311](index=311&type=chunk) [Item 4. Controls and Procedures](index=92&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were designed and functioned effectively as of June 30, 2025, providing reasonable assurance for timely and accurate financial reporting[312](index=312&type=chunk) - No material changes occurred in the company's internal control over financial reporting during Q2 2025[313](index=313&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=86&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed discussion on legal proceedings provided in the Notes to Condensed Consolidated Financial Statements - For a comprehensive discussion of legal proceedings, refer to 'Part I. Financial Information – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 18. Commitments and Contingencies – Legal'[314](index=314&type=chunk) [Item 1A. Risk Factors](index=86&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, emphasizing the negative impact of the current economic environment, inflation, interest rate changes, and evolving government policies - The U.S. economy faces significant uncertainty due to changing inflation and interest rates, evolving government policies, and shifting consumer spending patterns. The FRB has adjusted rates multiple times, and future adjustments are possible[317](index=317&type=chunk) - Increased inflation and interest rates can adversely impact the business by increasing borrower default risk, elevating funding costs, reducing marketplace investor demand, and necessitating tighter credit standards for new originations[318](index=318&type=chunk) - Rapid interest rate increases in **2022-2023** challenged the company's ability to meet investor return expectations for fixed-interest rate consumer loans, impacting marketplace volume and revenue[318](index=318&type=chunk) - Economic uncertainty may heighten other risks, such as exposure to credit risk, maintaining loan originations, and retaining the deposit base and marketplace investors[320](index=320&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=94&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report - There were no unregistered sales of equity securities or use of proceeds to report[322](index=322&type=chunk) [Item 3. Defaults Upon Senior Securities](index=94&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report - There were no defaults upon senior securities to report[323](index=323&type=chunk) [Item 4. Mine Safety Disclosures](index=94&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[324](index=324&type=chunk) [Item 5. Other Information](index=94&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading plans adopted by the company's CEO and Chief Risk Officer during Q2 2025 - CEO Scott Sanborn adopted a Rule 10b5-1 sales plan in June 2025, allowing for the sale of up to **90,000 shares**, representing **3.5%** of his current equity interest[325](index=325&type=chunk)[326](index=326&type=chunk) - Chief Risk Officer Annie Armstrong also adopted a Rule 10b5-1 sales plan in May 2025, allowing for the sale of up to **86,658 shares**[326](index=326&type=chunk) [Item 6. Exhibits](index=95&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or incorporated by reference as part of the report, including certifications and XBRL documents - The exhibit index includes certifications from the CEO and CFO (Sections **302** and **906** of Sarbanes-Oxley Act of 2002) and various XBRL taxonomy extension documents[328](index=328&type=chunk)[329](index=329&type=chunk)

Group 1: Barclays - Barclays stock reached a 52-week high of $20 after reporting Q2 EPS of $0.62, exceeding estimates by 24% [2] - Year-over-year, Barclays' Q2 earnings increased by 47% from $0.42, driven by a 20% sales growth to $9.59 billion [2][3] - The bank's valuation remains attractive, trading at 8.9X forward earnings and under 2X forward sales, compared to European peers [3] Group 2: Cincinnati Financial - Cincinnati Financial reported Q2 EPS of $1.97, surpassing estimates by nearly 42% and reflecting a 53% increase from $1.29 in Q2 2024 [4] - The company has a 2.28% annual dividend yield, significantly higher than the S&P 500's average of 1.16% and the industry average of 0.27% [5] - Cincinnati Financial is recognized as a Dividend King, having increased its dividend for over 50 consecutive years with an annualized growth rate of 8.39% [5] Group 3: LendingClub - LendingClub posted Q2 earnings of $0.33, exceeding estimates by 120% and increasing from $0.13 in the prior year [8] - The company achieved Q2 sales of $248.43 million, which was 10% above expectations and a 32% increase from $187.24 million a year ago [8] - LendingClub has consistently surpassed EPS estimates for 10 consecutive quarters, with an average earnings surprise of 53.93% in the last four reports [9]

Core Insights - LendingClub Corp (NYSE: LC) is highlighted as a top stock pick for 2025, experiencing a significant increase of 19.7% to $15.69 following strong second-quarter earnings results [1] - The company reported earnings of 33 cents per share on revenue of $248.4 million, surpassing estimates of 15 cents per share on revenue of $228 million, prompting analysts to raise their price targets, including J.P. Morgan Securities increasing theirs from $14 to $17 [1] Stock Performance - The recent surge in LendingClub's stock has brought it to its highest levels since January, marking its largest daily percentage gain since October 2021, although the stock is still down 4.4% year-to-date [2] - The stock has been on a steady upward trend since early April, aiming for its third consecutive monthly gain [2] Options Activity and Short Interest - Options trading for LendingClub has seen a significant increase, with 7.8 times the average daily options volume recorded today, particularly in September 19 and October 19 call options [3] - Despite the stock's rally, short interest has been rising, now accounting for 4.4% of the available float, which may lead to short covering providing additional support for the stock [3]

Core Insights - LendingClub reported revenue of $248.44 million for the quarter ended June 2025, reflecting a year-over-year increase of 32.7% [1] - The company's EPS was $0.33, significantly higher than $0.13 in the same quarter last year, indicating strong earnings growth [1] - Revenue exceeded the Zacks Consensus Estimate of $225.75 million by 10.05%, and the EPS surpassed the consensus estimate of $0.15 by 120% [1] Key Performance Metrics - Net Interest Margin was reported at 6.1%, above the estimated 5.8% [4] - The net charge-off ratio was 3%, better than the average estimate of 4.8% [4] - Efficiency Ratio stood at 62.3%, lower than the estimated 65.9% [4] - Average Balance of Total interest-earning assets was $10.05 billion, slightly below the estimated $10.24 billion [4] - Total Interest Income reached $237.1 million, exceeding the average estimate of $231.29 million [4] - Net Interest Income was $154.25 million, compared to the average estimate of $147.78 million [4] - Total non-interest income was $94.19 million, surpassing the average estimate of $79.54 million [4] - Marketplace revenue contributed $89.64 million, exceeding the estimated $77.21 million [4] - Other non-interest income was $4.54 million, significantly higher than the estimated $2.32 million [4] - Interest on loans held for sale was $32.49 million, above the estimated $27.89 million [4] - Interest on securities available for sale was reported at $55.34 million, closely matching the estimate of $55.32 million [4] Stock Performance - LendingClub shares have returned +7.7% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - LendingClub reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.15 per share, and up from $0.13 per share a year ago, representing an earnings surprise of +120.00% [1] - The company posted revenues of $248.44 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 10.05%, compared to year-ago revenues of $187.24 million [2] - Over the last four quarters, LendingClub has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance and Outlook - LendingClub shares have declined approximately 20% since the beginning of the year, while the S&P 500 has gained 8.6% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the sustainability of the stock's immediate price movement based on the recently released numbers [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $234.85 million, and for the current fiscal year, it is $0.65 on revenues of $920.37 million [7] - The estimate revisions trend for LendingClub was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Financial - Miscellaneous Services industry, to which LendingClub belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8]

Financial Data and Key Metrics Changes - The company achieved a 32% year-on-year growth in originations and a 33% increase in revenue, generating $248 million in total revenue for the quarter [5][15] - GAAP net income was $38 million, compared to $15 million in the same quarter last year, resulting in a return on tangible common equity (ROTCE) of nearly 12% [5][25] - Non-interest income increased by 60% year-on-year to $94 million, driven by higher originations sold through the marketplace and improved loan sales pricing [19] - Net interest income reached $154 million, up 20% from the previous year, with a net interest margin of 6.1% [20] Business Line Data and Key Metrics Changes - The company originated $2.4 billion in loans during the quarter, a 32% increase year-on-year, with significant contributions from paid marketing initiatives and new product enhancements [14] - The capital-light marketplace business generated the majority of non-interest income, while net interest income from loans held on the balance sheet provided a stable revenue stream [16][18] - The company has quadrupled its balance sheet size since the bank acquisition in 2021, now totaling nearly $11 billion in assets [17] Market Data and Key Metrics Changes - The company extended its forward flow agreement with Blue Owl for up to $3.4 billion in new originations, indicating strong investor demand [6][8] - The marketplace business is expected to continue growing, with a focus on both fulfilling balance sheet growth and meeting investor demand for loans [70] Company Strategy and Development Direction - The company is focused on product innovation and marketing efficiency to drive growth, including the launch of LevelUp checking and LevelUp savings products [11][12] - The strategic goal is to enhance customer engagement and build multi-product relationships, which are expected to lead to better credit outcomes and higher lifetime value [9][10] - The company plans to increase its ROTCE target to a range of 10% to 11.5% for the third quarter, reflecting strong top-line momentum [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to compete effectively in a competitive environment, citing strong growth in originations and marketing efficiency [32][35] - The company has proactively reduced exposure to the student loan population and has not seen any negative impacts from the resumption of student loan payments [44][45] - Management expects to maintain double-digit ROTCE targets into the fourth quarter, with guidance indicating continued financial momentum [46][47] Other Important Information - The company is working on a rebranding initiative to better reflect its expanded product offerings beyond lending [108] - The mobile-first platform is designed to enhance customer experience and streamline interactions, contributing to higher customer engagement [110] Q&A Session Summary Question: What are the competitive dynamics in the market? - Management noted that despite increased competition, the company has maintained strong growth in volume and marketing efficiency, indicating confidence in its competitive positioning [32][35] Question: How should marketing efficiency be modeled going forward? - Management indicated that while marketing efficiency may not remain at current levels, they expect originations to continue to grow, which will influence marketing costs [36][38] Question: What are the trends in credit quality? - Management reported strong credit performance and a lower provision for credit losses, with no significant changes expected from the end of the student loan moratorium [41][44] Question: How does the company view its guidance philosophy? - Management explained that guidance reflects a cautious approach due to macroeconomic uncertainties, but they expect to continue growing volumes and profitability [52][56] Question: What is the outlook for the CET1 ratio and capital deployment? - Management emphasized a focus on growth while being mindful of shareholder dilution, indicating a preference for using existing capital for growth rather than raising new capital [61][63]

Second Quarter 2025 Results July 29, 2025 Disclaimer Some of the statements in this presentation, including statements regarding our competitive advantages, loan and financial performance, business outlook, and demand for our loan programs, are "forward-looking statements." The words "anticipate," "believe," "estimate," "expect," "intend," "may," "outlook," "plan," "predict," "project," "will," "would" and similar expressions may identify forward-looking statements, although not all forward-looking statemen ...

EXHIBIT 99.1 LendingClub Reports Second Quarter 2025 Results Grew Originations +32%, Revenue +33%, and Net Income +156% Compared to Prior Year Revenue growth combined with expense discipline delivers 11% ROE and 12% ROTCE Announced up to $3.4 billion loan funding partnership extension with Blue Owl SAN FRANCISCO – July 29, 2025 – LendingClub Corporation (NYSE: LC) today announced financial results for the second quarter ended June 30, 2025. "We had an exceptional quarter with year-over-year originations and ...