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A Message to Investors from our President and Acting CEO

Today, our President and acting CEO, Scott Sanborn, sent an update to our individual investors on the Lending Club platform.  We’ve posted it here so you can hear the latest.

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Hello,

I’m Scott Sanborn, President and acting CEO of Lending Club.  I’ve been on Lending Club’s leadership team for the past six years as Chief Marketing Officer and Chief Operating Officer, and I wanted to take a moment to introduce myself and describe our current focus.

Individual investors like you are – and will always be – the foundation of our marketplace.

Given recent events, my immediate focus is on how Lending Club can best serve you – our investors.  We’ve talked to hundreds of our investors – spanning individuals to financial advisors to banks to large institutions – over the past week about the strength of our business, our operations, our people, and our data integrity.  Let me assure you that we are in a strong financial position with a substantial amount of cash and securities on our balance sheet – $868 million.  We plan to be around for many years to come.

The performance of loans facilitated through the platform remains robust.  We continue to service and process borrower payments just like we always have, and the interest and principal payments that borrowers make will continue to be passed on to you just as they were before.

We’re extremely proud of the products we’re providing to both borrowers and investors, and I look forward to sharing more with you in the coming months and years about our company and our results.

I’m not working alone.  Our Executive Team has been working together for the past six years and has deep expertise in credit, operations, marketing, finance, human resources and technology. We’re also supported by one of the strongest Board of Directors in the industry.  It includes Hans Morris (former President of Visa and now our Executive Chairman), Larry Summers (former US Treasury Secretary), John Mack (former CEO of Morgan Stanley), Mary Meeker (a Partner at Kleiner Perkins Caufield & Byers) and other experienced executives.

Thank you for investing with us.  I look forward to having you as an investor for years to come.

Sincerely,
Scott Sanborn
Lending Club President & Acting CEO

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As a follow up, here are a few answers to questions platform investors may have:

  • What’s happening with my assets?   Your investments are still yours.  The performance of loans facilitated through the platform remains robust.  We are servicing and processing borrower payments like we always have, and the interest and principal payments that borrowers make will continue to be passed on to you as they were before.
  • What’s the status of Lending Club’s business? We reported strong financial results for Q1 2016. We had solid originations, operating revenue, and adjusted EBITDA, despite a difficult economic environment.  We facilitated $2.75 billion in loans and also reported a substantial amount of cash and securities – $868 million.
  • What happens to my investments if Lending Club goes out of business? First and foremost, Lending Club has a strong business, a large balance sheet and we are here to stay. We have $868 million in cash and securities, which could cover our costs for a long time.  Second, Lending Club has no claim to the payments you receive from borrowers, since each Note is tied to a loan, and loan payments are passed on to Note holders.  Third, with a $10.2 billion loan portfolio that generated over $18 million in revenue in the first quarter of 2016 alone, we could profitably service the existing Lending Club platform as a standalone business, even if we didn’t facilitate a single new loan.  Finally, and we are only mentioning this because some have asked, if all else failed we would transfer our loan servicing obligations to a third party backup servicer.  We have a longstanding contract with a third party to service loans in the event Lending Club can’t, so that you’d continue to receive borrower payments (regardless of LendingClub Corporation’s status).  See our prospectus for more detail.
  • Why the Department of Justice subpoena? The Department of Justice often issues subpoenas in response to public disclosures such as ours, especially in light of the department’s focus on financial services. The company is fully cooperating with the department’s investigation.
  • Are you confident in Lending Club’s management?   Our Executive Team has been working together for the past six years and has deep expertise in credit, operations, marketing, finance, human resources and technology. We’re also supported by one of the strongest Board of Directors in the industry.  It includes Hans Morris (the former President of Visa and now our Executive Chairman), Larry Summers (former US Treasury Secretary), John Mack (former CEO of Morgan Stanley), Mary Meeker (a Partner at Kleiner Perkins Caufield & Byers) and other experienced executives.
  • Where is Lending Club going from here? We’re intensely focused on restoring our investors’ confidence. We’ve talked to hundreds of our investors – spanning individuals to financial advisors to banks to large institutions – including some who are new to Lending Club. While some investors have paused, others have reiterated their interest. We remain committed to both our borrowers and investors, and are working day and night to prove to you that we deserve your trust.

We will continue to keep our platform investors informed as we move ahead.  We’re confident in our business and look forward to serving our investors for years to come.

 

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