LendingClub Corporation

Good afternoon. Thank you for attending today's Lending Club Q2 2025 earnings conference call. My name is Tamia and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to your host, Artem Malaviko, head of investor relations. You may proceed.

Thank you and good afternoon. Welcome to LendingClub's second 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 contemplating by these forward-looking statements. Factors that could cause these results to 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 the non-GAAP measures and the reconciliation to the most directly comparable GAAP 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 had a fantastic quarter, delivering 32% year-on-year growth in originations and 33% growth in revenue. We more than doubled our earnings, generating 38 million in GAAP net income, compared to 15 million last year. And as a result, we achieved an ROTC of nearly 12%, well north of the 8% target we set at the beginning of the year and delivered well ahead of schedule. Beyond the strength of our financial performance, we continue to outperform on prime credit, sustaining our 40% improvement versus the competitive set. We extended our forward flow agreement with Blue Owl for up to $3.4 billion of new originations. We closed our first transaction with BlackRock, enabled by our recently launched Fitch-rated structure certificate program, and we introduced Level Up Checking, a first-of-its-kind checking product offering cashback rewards for on-time loan payments. Let me hit on a few of the highlights of our performance across the business. I'll start with originations volumes. We said we were going to drive growth through marketing and product innovation, and we did just that, generating meaningful originations growth both sequentially and year-on-year, while realizing better-than-expected marketing efficiency as we returned to channels including direct mail and online advertising. We also delivered strong credit performance thanks to our vast datasets, advanced models, and decades of experience. We're not only consistently beating our competition, But we're also beating our own expectations. And while we continue to closely monitor the macro environment, our data is demonstrating the effectiveness of our underwriting and the resilience of our borrower base. Our consistent credit performance and status as a provider of choice continues to generate strong loan investor demand, which over time leads to higher loan sales prices and increased marketplace revenue. We just announced the extension of our funding partnership with Blue Owl for up to $3.4 billion in structured certificate transactions over two years, with up to $600 million closing within the next several months. And last quarter, we launched our Fitch-rated structured certificate program to enable improved loan sales prices by attracting lower cost pools of capital, including insurance. We successfully closed the first of these transactions with a top global insurance company in Q1, And I'm happy to announce today that we recently completed an inaugural $100 million transaction with funds and accounts managed by BlackRock. And we hope to partner with them on more transactions like this in the future. Now I want to spend some time talking about our innovation efforts built on our mobile first platform. Each designed to more regularly engage our members and build multi-product relationships. That's because engaged multi-product members have better credit outcomes and higher lifetime value. We launched Level Up Savings last year, offering a higher rate to depositors who make a regular habit of savings. To date, we've reached $2.7 billion in Level Up Savings deposits, with almost 80% of those accounts meeting the threshold to earn the highest rate. It's also driving engagement, with these members logging in 30% more often than those with our prior savings product. Now, Level Up Savings was designed specifically for savers who have cash to put to work. And even so, we're finding that over 10% of new accounts are being opened by our borrowers who are coming to us for loans, which is indicative of their desire to engage more deeply with us. Building on the success of Level Up Savings, we recently launched Level Up Checking specifically for our borrowers. Along with paying 1% interest on qualifying balances, it has two key features. First is 1% unlimited cash back on everyday purchases like gas and groceries. Here, we're rewarding our members for using money that they have versus money that they borrow, thereby incenting good financial behavior. Second, and this is unique to us, we're offering 2% cash back for on-time personal loan payments from a level-up checking account. We're rewarding borrowers for their financial discipline while allowing us to benefit from a stickier relationship. While it's still early, the initial results are encouraging. We're now opening six times more checking accounts per day than prior to launch, with nearly 60% of these accounts being opened by borrowers. Next up on our product roadmap is an enhanced version of DebtIQ, which will move beyond credit monitoring to include card linking, in-app payments, and automated payment strategies. DebtIQ will give our members transparency and control over their debt in an easy to use command center. We're currently in beta testing in a limited fashion as we work towards a broader rollout later this fall. In closing, this quarter marks an inflection point in both our strategic and our financial trajectory, where the work we've been doing over the past several years is translating into tangible results for both our members and our shareholders. I'm energized by the momentum we have going into the back half of the year and the many opportunities in front of us. I want to close by thanking the Lending Club team for their continued outstanding work and focus. And with that, I'll hand it over to you, Drew.