MichaelVi – stock.adobe.com
LendingClub Corp.’s earnings fell short of Wall Street’s expectations in the first quarter, thanks in large part to increased provisions because of what the company called “macroeconomic uncertainty.”
In the first three months of 2025, net income for the San Francisco-based lender was $11.7 million, below analysts’ average estimate of $12.3 million, according to S&P. Earnings per share came out to 10 cents, shy of the 11 cents analysts predicted, per S&P.
LendingClub set aside $58.1 million during the quarter in provisions for credit losses — up from $31.9 million in the same period of 2024.
In a conference call with analysts on Tuesday, CEO Scott Sanborn said this increase was designed to account for “uncertainty in the environment” and prepare for a possible recession.
“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%,” Sanborn said.
The U.S. unemployment rate is currently 4.2%, according to the
When asked why LendingClub was anticipating such a scenario, Chief Financial Officer Drew LaBenne pointed to the Trump administration’s trade policies. On April 2, which President Trump called “Liberation Day,” he announced steep new tariffs on close to 90 countries — though he later paused or made exemptions to many of them.
“It was the very end of the quarter when we made this decision, right as the Liberation Day announcements were happening,” LaBenne said. “So it does include the — for lack of a better term, I’ll call it the uncertainty created by Liberation Day.”
In better news for the online lending specialist, total net revenue for the quarter reached $217.7 million, beating Wall Street’s expectation of $214.3 million, according to S&P. And pre-provision net revenue was $73.8 million, beating LendingClub’s own guidance from last quarter, when it predicted $60 million to $70 million.
“We believed it prudent to increase reserves in the face of macroeconomic uncertainty,” LaBenne said. “But having said that, the underlying momentum of the business is strong and expected to continue in the second quarter.”
Also on Tuesday, LendingClub announced its acquisition of Cushion, an AI-powered app that helps customers track bills, make payments and monitor loans, among other tasks. During LendingClub’s earnings call, Sanborn said the technology “will further enhance our mobile experience and feature set.” LendingClub’s products include personal loans, which are often used to refinance credit card debt, as well as checking accounts, savings accounts and certificates of deposit.
Earlier this month, LendingClub announced that it was buying a large new property in San Francisco, where it planned to locate its headquarters starting next year. The company has operated in the Northern California city since 2012, but it also has offices in New York, Boston and Lehi, Utah.
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“The expiration of our lease coincided with historically low San Francisco commercial real estate pricing, allowing us to acquire an institutional quality asset at a fraction of pre-pandemic cost,” he said.
LendingClub said it won a bidding process to buy the property, located on Kearny Street near the city’s Financial District, for $74.5 million. The sale is expected to close in the second quarter.
LendingClub got its start in 2006 as a peer-to-peer lending platform on Facebook. The business drew attention as a high-tech new way to connect lenders with borrowers, attracting sizable investments from Google and other powerful stakeholders. In 2014, LendingClub went public,
The company later struggled with a mix of financial challenges and scandals. LendingClub’s founding CEO, Renaud Laplanche,
Since then, the company has turned to more conventional sources of funding for its loans. In February 2021, LendingClub acquired Boston-based bank