According to PYMNTS.com, LendingClub reported fourth-quarter 2025 earnings showing loan originations surged 40% year-over-year to $2.6 billion, with growth across all product lines. CEO Scott Sanborn credited product changes, marketing expansion, and improved marketplace pricing, alongside sustained credit outperformance. Marketplace revenue jumped 36%, and the company’s LevelUp savings and checking platform saw massive engagement, with savings growing at double-digit rates and generating 20-30% more monthly logins. Personal loan borrowers made up over 15% of new deposit accounts, and customers who repaid loans had average savings balances above $15,000. Total deposits reached $9.8 billion, funding loan growth. Despite issuing strong 2026 guidance forecasting $11.6 to $12.6 billion in originations, LendingClub shares fell 7% in after-hours trading.
The LevelUp Gambit
Here’s the thing: the real story isn’t the loan growth. It’s the banking side. LendingClub is desperately trying to prove its “digital marketplace bank” model works, and LevelUp is the centerpiece. They’re not just lending money anymore; they’re trying to keep customers for life. The stats are compelling—borrowers paying off loans and then parking over $15k in savings? That’s a huge behavioral shift. It suggests they’re succeeding in becoming a primary financial hub, not just a one-time loan vendor. CEO Sanborn’s line about combining “the speed of a FinTech and the resiliency of a bank” is the core pitch. They want the high margins of lending with the stable, cheap funding of a bank. And based on these deposit numbers, it seems to be working on paper.
Why The Stock Drop?
So why did the stock tank 7% on what looks like great news? Investors are a skeptical bunch. They’re looking past the top-line growth and focusing on costs and margins. CFO Drew LaBenne basically admitted they’re spending heavily, talking about ramping marketing channels and improving capabilities for “2026 performance.” That means near-term profits are being plowed back into growth. Plus, a net interest margin of 6%, while up year-over-year, might not be blowing anyone away given the risks in the unsecured personal loan market. The market’s reaction says, “Show me the sustained profitability, not just the user growth.” It’s a classic growth-versus-profitability tension.
Credit: The Big Question
Everything hinges on credit quality. LendingClub can talk all day about login stats and deposit growth, but if loan defaults spike, the whole model crumbles. They’re boasting about charge-offs declining and metrics being below competitors, which is crucial. But we’re in a relatively stable economic period. The real test for any lender is a downturn. They’ve built a $1.8 billion “held-for-sale extended seasoning portfolio” and kept nearly $500 million in a held-for-investment book. That’s a lot of exposure. Their provision for credit losses was $47 million this quarter. The moment consumer behavior shifts from “stable,” as LaBenne described it, those provisions will balloon, and the narrative changes instantly.
The 2026 Outlook
The guidance is aggressive—21% to 31% full-year loan growth. That’s a bet on both continued demand for debt and their ability to keep acquiring quality borrowers efficiently. But it also requires the LevelUp engine to keep humming, turning more borrowers into sticky banking customers. The risk? They’re spending more on marketing to chase this growth, which could squeeze those all-important margins. I think the investor skepticism is healthy. LendingClub is trying to execute a very complex pivot from a pure marketplace lender to a hybrid bank. The Q4 numbers show promising traction, but the after-hours stock price tells you the market isn’t ready to declare victory just yet. They need to prove this model can be consistently profitable, not just consistently growing.
