LendingClub won over debt investors with algorithms that quickly assess borrowers' creditworthiness, making it easy for banks, hedge funds and others to snap up billions of dollars of consumer loans arranged through its online platform. Those algorithms still have some kinks.

LC Advisors, an investment adviser owned by LendingClub that helps people buy loans arranged by the company, said last week in a presentation that some of the debt is "underperforming vs. expectations." A chart on one of the slides shows that write-off rates for a portion of five-year LendingClub loans were roughly 7 percent to 8 percent, compared with a forecast range of around 4 percent to 6 percent. A similar trend is happening for three-year obligations.

The presentation doesn't give data around the number, credit grade or value of loans that were "under-priced." That makes it hard to tell how significant the trend is, said Michael Tarkan, an analyst at Compass Point Research & Trading LLC who spotted the document on LendingClub's website and flagged it to clients on Thursday.

"Their business is to take data and use that to underwrite risk," Tarkan, who recommends that investors sell the stock, said in a phone interview. "If you're an investor in the loans on the platform, this would create a concern around that underwriting model."

LendingClub declined 7.8 percent to $7 on Friday in New York.

LendingClub constantly monitors and reports to investors the performance of its loans, Sid Jajodia, the San Francisco- based company's chief investment officer, said in an e-mailed statement. The charts -- while new -- were meant to illustrate how underperforming segments have been cut or repriced, he said. LendingClub's algorithms also overprice some loans.

"This is nothing out of the ordinary," Jajodia said.

A spokesman pointed to spreadsheets on the company's website detailing past write-off rates on different vintages and charts showing projected loss rates for certain grades of loans.

LendingClub has routinely tweaked the rates it charges borrowers. After the Federal Reserve adjusted its benchmark interest rate in December, for instance, the company said it would raise borrowing costs by an average of 0.25 percentage point.

Last week, the company made a fresh round of changes. Rates on loans deemed higher quality by the company ticked down 3 basis points on average, while those for lower-quality borrowers rose by about 67 basis points. A basis point is one-hundredth of one percent.

LC Advisors noted the December and January rate changes and said that LendingClub had made two "risk adjustments." The higher rates were meant to prepare for a potential slowdown in the U.S. economy, according to the presentation. Yet another slide highlights how the world's largest economy remains "resilient," with low unemployment and high consumer net worth.

In the long term, performance of the loans should be driven by the health of the U.S. economy and employment rates, LC Advisors added. In the short term, it's "closely monitoring credit performance."

LendingClub makes money primarily by charging fees to originate and service loans. Increasing defaults would impact the company's servicing revenue, said Tarkan. There's also a risk that higher-than-expected write-offs could turn off some investors from funding debt in the future, he said.

Another class of investors already seems to have soured on LendingClub. The company's stock trades for less than half its December 2014 initial public offering price.

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