LendingClub Corporation

Good afternoon. Thank you for attending today's Lending Club first quarter 25 earnings conference call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to queue for a question on today's call, you can do so by dialing star one on your telephone keypad. I'll now hand the call over to Artem Analovaiko, head of investor relations, to begin. You may proceed.

Thank you and good afternoon. Welcome to LendingClub's first quarter 2025 earnings conference call. Joining me today to talk about our results are Scott Sanborn, CEO, and Drew Laben, CFO. You can find the presentation accompanying our earnings release on the investor relations section of our website. On the call, in addition to questions from analysts, we will also be answering some of the questions that were submitted for consideration via email. Our remarks today will include forward-looking statements, including with respect to our competitive advantages and strategy, macroeconomic conditions, platform volume and pricing, future products and services, and future business and financial performance. Our actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results differ materially are described in today's press release and earnings presentation. Any forward-looking statements that we make on this call are based on current expectations and assumptions, and we undertake no obligation to update these statements as a result of new information or future events. Our remarks also include non-GAAP measures relating to our performance, including tangible book value per common share, pre-provision net revenue, and return on tangible common equity. You can find more information on our use of non-GAAP measures and a reconciliation to the most directly comparable gap measures in today's earnings release and presentation. And now I'd like to turn the call over to Scott.

Thank you, Artem. Welcome, everyone. We delivered a strong start to the year. We generated $2 billion in loan volume, a 21% increase over last year, reflecting continued demand from borrowers and loan buyers and positive initial results from our marketing channel expansion. We've now crossed $100 billion in lifetime loan originations with over 40% of that realized in the past five years. Total net revenue grew 20% to $218 million, and pre-provision net revenue grew 52% year-over-year to $74 million. This financial outperformance came from both parts of our business. In our marketplace, we further improved loan sales pricing thanks to our consistent and continued credit outperformance, unique structures, and ongoing purchases by banks. In our own bank, we continue to grow our average interest earning assets and are now benefiting from lower deposit costs thanks to the success of our new level up savings product combined with the more favorable rate environment. Beyond the strength of these results, we also secured an investment grade rating from Fitch for our first rated certificate deal, closing $100 million transaction with a top insurance company We acquired the intellectual property and select talent behind Cushion, an AI-powered spending intelligence app that will further enhance our mobile experience and feature set. And we took advantage of depressed San Francisco real estate prices and our bank balance sheet to invest in the new headquarters at a fraction of the pre-pandemic cost. This was another strong quarter where we grew, executed well, and made meaningful progress against our vision. Let's get into the details starting with credit. We saw outstanding performance in our portfolio with year-over-year delinquency and charge-up rates significantly improving. We've remained disciplined on underwriting with a credit box significantly tighter than pre-COVID and a continued focus on higher quality borrowers. We are, of course, carefully monitoring the macro environment and we increased our qualitative provision this quarter to be prepared for a scenario where unemployment rates increase to 5.3%. Our track record on credit through multiple environments, our status as a profitable, nationally regulated bank that is the largest holder of our own loans, along with our ability to deliver innovative loan investment structures, all continue to drive investor demand. This has translated to a fifth straight quarter of improved loan sales pricing, which were up over 200 basis points year over year. Our structured certificates program, which has crossed $5 billion since launch, has clear benefits for private credit managers. These benefits help support higher loan sales pricing while providing Lending Club with a risk-remote security without the need for CECL provisioning. We closed multiple new certificate transactions in April at stable prices, and we maintain a pipeline of additional interest from new buyers. In Q1, we built on the success of the program by obtaining an investment grade rating from Fitch for our first rated structured certificate deal. The rating supports higher loan sales prices with Lending Club continuing to earn origination and servicing fees. This first transaction closed with a top insurance company unlocking access to the industry's more than $8 trillion in assets. Bank purchases in the first quarter remain consistent, and we continue to develop a pipeline of new buyers in search of a return to historic bank participation levels. As we move through this period of broader economic uncertainty, we are uniquely positioned to leverage our many tools, along with our status as a preferred counterparty, to deliver profitable originations through a combination of marketplace sales and our own balance sheet capacity. I'll now turn to how we're growing in this environment. And while a personal loan can be used for more than debt consolidation, there is a historically large credit card refinance opportunity that we are especially focused on penetrating. Through a combination of product and experience innovation and marketing, we're making great progress against our strategy with compelling proof points that it's working. We have begun testing our way back into a number of marketing channels to accelerate our growth. Initial results are in line with our expectations, and we plan to continue to optimize and expand over the coming quarters. New members we acquire have an amazing experience. We save them money, improve their credit score, and simplify their financial life through a seamless process that requires no human intervention 86% of the time. It's no surprise that our MPS score for this experience is an extremely high 81 points and that 83% of our members say they want to do more with us. That's where our mobile app comes into play, where we're not only reducing servicing costs, but also increasing interaction and issuance. Our Debt IQ offering, still early in its evolution, is already driving nearly 60% higher logins for those enrolled. What's more, enrolled members are driving a 30% increase in loan issuance. We're currently working on new Debt IQ features to drive wider adoption, deeper engagement, and even more issuance. That includes incorporating the card tracking and payments technology we acquired with Tally at the end of last year. Next up will be to incorporate the AI-powered spending intelligence functionality we gained through the acquisition of the intellectual property behind Cushion, an app that helped members track bills, payments, and subscriptions. We're also continuing to improve and differentiate our core personal loan offering and functionality. For example, we launched Top Up last year to allow our members to easily refinance their existing Lending Club loan and add an additional balance to it. We've now enhanced the product to allow members to top up their non-Lending Club loans, making it easy to refinance out from the competition. So as you can hear, we have multiple tools to drive continued efficient growth. While we don't have a crystal ball and we acknowledge the uncertainty around the environment, we are confident that Lending Club is fundamentally strong and well-positioned to deliver value to customers, loan investors, and shareholders alike, thanks to a historically large addressable market, a balance sheet at scale generating attractive returns, a strong capital and liquidity position, leading credit performance enabled by our distinct data advantage and technology platform, and a reputation as a partner of choice in our asset class, and an incredibly talented team dedicated to delivering real value to our more than 5 million members. With that, I'll turn it over to you, Drew, for more details on the results and on our outlook.