LendingTree CEO Doug Lebda, left, says his Charlotte company is “finally through the worst part of the cycle” as the financial services provider leaves 2018 state incentive agreement.
dlaird@charlotteobserver.com
In 2017, Fortune magazine placed the Charlotte-based financial services provider LendingTree No. 3 on its list of fastest-growing U.S. companies.
The following year, LendingTree’s stock surpassed $370 a share and the company entered an incentive agreement with North Carolina to add 436 jobs in Mecklenburg County at an average wage of more than $100,000. The deal offered LendingTree up to $8.3 million in future payroll tax benefits if it met hiring and investment commitments.
Since 2021, however, LendingTree’s stock has plummeted amid declining annual revenues.
And on Tuesday, at LendingTree’s request, the state terminated its 2018 jobs deal as the company looks to rebound from a rough few years financially.
Founded in 1996, LendingTree offers online tools to connect borrowers with lenders on financial services, like credit cards, mortgages or personal loans. Its founder, Doug Lebda, serves as CEO.
In 2016, LendingTree got its first job development investment grant, or JDIG, from the state to create 314 more jobs at its Charlotte headquarters. Two years later, the company received its second JDIG.
LendingTree requested the 2018 incentive be canceled in an April 11 letter to N.C. Secretary of Commerce Machelle Baker Sanders.
“Our business, and the mortgage lending industry as a whole, is facing significant challenges/strong headwinds and a difficult operating environment,” the company’s chief human resources officer Jill Olmstead wrote.
She cited “significantly higher interest rates and persistent inflation, coupled with the lingering effects of the pandemic on in-office hiring,” as reasons for the move.
LendingTree created no jobs through the 2018 JDIG and received neither state nor local incentive dollars for this project.
Despite the cancellation, Olmstead wrote that LendingTree remains “committed” to the Queen City. In 2021, the company relocated its headquarter offices from the Ballantyne neighborhood to the city’s South End, and today, this site supports 325 full-time employees.
LendingTree, finances and NC incentives
It is not uncommon for the state to end incentive deals before a single job is added.
Since the JDIG program launched in 2003, roughly one in five projects have concluded this way. State officials say they only distribute JDIG benefits after recipients reach hiring and investment targets.
LendingTree’s 2016 grant deal is still active. So far, the company has created 260 jobs through this JDIG at an average annual wage of $116,617.
On Tuesday, the state Commerce Department approved a partial incentive payment to LendingTree under the active grant for $430,553, and extended the time the company has to meet its overall hiring and investment goals.
Lebda believes his Charlotte financial company has turned a corner.
After reporting significant staff cuts and falling revenue in the fall, LendingTree shared positive news during last month’s earnings report. Revenue was up. The lending environment was “stable,” Lebda said in a statement at the time.
And the company’s stock, while a far cry from its heights from 2018 to 2021, had risen 57% since Jan. 1.
In a letter to shareholders in late April detailing first-quarter financial results, the company stated, “It is becoming increasingly clear that the worst of this economic cycle is behind us, and the actions we have taken over the last year have positioned the company to deliver profitable and accelerating growth as we progress through the remainder of 2024.”
Still, by market close Tuesday, a LendingTree share sold for around $46.50 — down 85% from its last peak three years ago.
Brian Gordon is the Technology & Innovation reporter for The News & Observer and The Herald-Sun. He writes about jobs, start-ups and all the big tech things transforming the Triangle. Brian previously worked as a senior statewide reporter for the USA Today Network and covered education for the Asheville Citizen-Times.
