LendingClub Reports First Quarter 2023 Results

Rhea-AI Summary

LendingClub Corporation (NYSE: LC) reported Q1 2023 financial results, highlighting a net income of $13.7 million and a diluted EPS of $0.13, both down from the previous quarter's $23.6 million and $0.22 respectively. Total net revenue decreased to $245.7 million, a drop from $262.7 million in the prior quarter, attributed to lower marketplace revenue despite an 8% increase in net interest income. Deposits surged 13% sequentially to $7.2 billion. The company’s balance sheet showed total assets up 10% to $8.8 billion. Loans and leases held for investment grew by 4.6% to $5.9 billion. Pre-Provision Net Revenue (PPNR) rose 7% to $88.4 million, bolstered by cost reduction initiatives. Looking ahead, LendingClub projects loan originations between $1.9 billion and $2.1 billion for Q2 2023.

Positive

• Deposits increased by 13% to $7.2 billion.
• Total assets grew by 10% to $8.8 billion.
• Pre-Provision Net Revenue (PPNR) rose by 7% to $88.4 million.

Negative

• Net income declined from $23.6 million in Q4 2022 to $13.7 million.
• Total net revenue decreased from $262.7 million in Q4 2022 to $245.7 million.
• Marketplace revenue dropped significantly from $123.4 million to $95.6 million.

Net Income of $13.7M, Driven by 7% Sequential Increase in Pre-Provision Net Revenue (PPNR)

Deposits Up 13% Sequentially to $7.2B; $1.6B in Cash

SAN FRANCISCO, April 26, 2023 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the first quarter ended March 31, 2023.

"We delivered a solid quarter driven by our strategic advantages, including over 15 years of cycle-tested data, prudent and agile underwriting, and our digital marketplace bank model," said Scott Sanborn, LendingClub CEO. "While we expect continued industry and macro headwinds, these significant advantages, along with our growing online consumer deposit franchise and high-yielding short duration assets, provide us with a range of options to navigate the current macro environment while we build toward an ambitious future for the company and our growing membership base."

First Quarter 2023 Results

Balance Sheet:

• Total assets grew 10% sequentially to $8.8 billion from $8.0 billion at December 31, 2022.
• Deposits up 13% sequentially to $7.2 billion; FDIC-insured deposits represent approximately 86% of total deposits.
• Cash of $1.6 billion increased 55% from December 31, 2022.
• Available aggregate borrowing capacity of $4.1 billion as of April 26, 2023.
• Loans and leases held for investment portfolio grew 4.6% sequentially from $5.6 billion to $5.9 billion.
• Substantial capital with a consolidated Tier 1 leverage ratio of 12.8% and consolidated Common Equity Tier 1 capital ratio of 15.6%.
• Book value per common share of $11.08, up 1.4% from $10.93 at December 31, 2022.
• Tangible book value per common share of $10.23, up 1.7% from $10.06 at December 31, 2022.

Financial Performance:

• Loan originations were $2.3 billion compared to $2.5 billion in the prior quarter.
• Total net revenue was $245.7 million compared to $262.7 million in the prior quarter, as growth in net interest income was offset by lower marketplace revenue.
• Net interest income increased 8% from the prior quarter to $146.7 million, primarily due to higher balance sheet growth and partially offset by lower net interest margin due to higher cost of deposits.
• Marketplace revenue was $95.6 million compared to $123.4 million in the prior quarter, reflecting a reduction in sold marketplace volumes.
• Net income of $13.7 million, or diluted EPS of $0.13, compared to $23.6 million, or diluted EPS of $0.22, in the prior quarter, reflecting higher credit provisioning due to growth in the held-for-investment portfolio as well as higher tax expense.
• Pre-provision net revenue (PPNR) of $88.4 million grew 7% over the prior quarter, driven by the Company's cost reduction actions and a $9.0 million one-time revenue benefit primarily due to slower prepayments.
• Credit quality of the held-for-investment prime loan portfolio performing in-line with expectations as portfolio seasons; provision for credit losses of $70.6 million primarily reflects $1.0 billion of quarterly loan originations held for investment.
• Efficiency ratio improved to 64.0% from 68.5% in the prior quarter due to cost reduction actions and marketing efficiency.

	Three Months Ended
($ in millions, except per share amounts)	March 31, 2023		December 31, 2022		March 31, 2022
Total net revenue	$           245.7		$            262.7		$            289.5
Non-interest expense	157.3		180.0		191.2
Pre-provision net revenue (1)	88.4		82.7		98.3
Provision for credit losses	70.6		61.5		52.5
Income before income tax benefit (expense)	17.8		21.2		45.8
Income tax benefit (expense)	(4.1)		2.4		(5.0)
Net income	$             13.7		$              23.6		$              40.8
Diluted EPS	$             0.13		$              0.22		$              0.39
Income tax benefit from release of tax valuation allowance	$                —		$                3.2		$                 —
Net income excluding income tax benefit (1)	$             13.7		$              20.4		$              40.8
Diluted EPS excluding income tax benefit (1)	$             0.13		$              0.19		$              0.39

(1)    See page 3 of this release for additional information on our use of non-GAAP financial measures.

 

For a calculation of Pre-Provision Net Revenue, Net Income Excluding Income Tax Benefit, Diluted EPS Excluding Income Tax Benefit, and Tangible Book Value Per Common Share, refer to the "Reconciliation of GAAP to Non-GAAP Financial Measures" tables at the end of this release.

Financial Outlook

	Second Quarter 2023
Loan Originations	$1.9B to $2.1B
Pre-Provision Net Revenue (PPNR)	$60M to $70M

 

About LendingClub

LendingClub Corporation (NYSE: LC) is the parent company of LendingClub Bank, National Association, Member FDIC. LendingClub Bank is the leading digital marketplace bank in the U.S., where members can access a broad range of financial products and services designed to help them pay less when borrowing and earn more when saving. Based on more than 150 billion cells of data and over $80 billion in loans, our advanced credit decisioning and machine-learning models are used across the customer lifecycle to expand seamless access to credit for our members, while generating compelling risk-adjusted returns for our loan investors. Since 2007, more than 4.7 million members have joined the Club to help reach their financial goals. For more information about LendingClub, visit https://www.lendingclub.com.

Conference Call and Webcast Information

The LendingClub first quarter 2023 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, April 26, 2023. A live webcast of the call will be available at http://ir.lendingclub.com under the Filings & Financials menu in Quarterly Results. To access the call, please dial +1 (404) 975-4839, or outside the U.S. +1 (929) 526-1599, with Access Code 900462, ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time). An audio archive of the call will be available at http://ir.lendingclub.com. An audio replay will also be available 1 hour after the end of the call until May 3, 2023, by calling +1 (929) 458-6194 or outside the U.S. +44 (204) 525-0658, with Access Code 850910. LendingClub has used, and intends to use, its investor relations website, blog (http://blog.lendingclub.com), Twitter handle (@LendingClub) and Facebook page (https://www.facebook.com/LendingClubTeam) as a means of disclosing material non-public information and to comply with its disclosure obligations under Regulation FD.

Contacts
For Investors:
IR@lendingclub.com

Media Contact:
Press@lendingclub.com

Non-GAAP Financial Measures

To supplement our financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: Pre-Provision Net Revenue, Net Income Excluding Income Tax Benefit, Diluted EPS Excluding Income Tax Benefit, and Tangible Book Value Per Common Share. Our non-GAAP financial measures do have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP.

We believe these non-GAAP financial measures provide management and investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies.

We believe Pre-Provision Net Revenue, Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit are important measures because they reflect the financial performance of our business operations. Pre-Provision Net Revenue is a non-GAAP financial measure calculated by subtracting the provision for credit losses and income tax benefit/expense from net income. Net Income Excluding Income Tax Benefit adjusts for the release of a deferred tax asset valuation allowance in 2022. Diluted EPS Excluding Income Tax Benefit is a non-GAAP financial measure calculated by dividing Net Income Excluding Income Tax Benefit by the weighted-average diluted common shares outstanding.

We believe Tangible Book Value (TBV) Per Common Share is an important measure used to evaluate the company's use of equity. TBV Per Common Share is a non-GAAP financial measure representing common equity reduced by goodwill and intangible assets, divided by ending common shares issued and outstanding.

For a reconciliation of such measures to the nearest GAAP measures, please refer to the tables beginning on page 13 of this release.

Safe Harbor Statement

Some of the statements above, including statements regarding our competitive advantages, macroeconomic outlook, anticipated future performance and financial results, are "forward-looking statements." The words "anticipate," "believe," "estimate," "expect," "intend," "may," "outlook," "plan," "predict," "project," "will," "would" and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include: our ability to continue to attract and retain new and existing customers; our ability to realize the expected benefits from recent initiatives, including our cost reduction plan and the acquisition of a $1 billion loan portfolio; competition; overall economic conditions; the interest rate environment; the regulatory environment; demand for the types of loans facilitated by us; default rates and those factors set forth in the section titled "Risk Factors" in our most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, as well as in our subsequent filings with the Securities and Exchange Commission. We may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

LENDINGCLUB CORPORATION OPERATING HIGHLIGHTS (In thousands, except percentages or as noted) (Unaudited)
	As of and for the three months ended										% Change
	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		Q/Q		Y/Y
Operating Highlights:
Non-interest income	$      98,990		$      127,465		$      181,237		$   213,832		$    189,857		(22) %		(48) %
Net interest income	146,704		135,243		123,676		116,226		99,680		8 %		47 %
Total net revenue	245,694		262,708		304,913		330,058		289,537		(6) %		(15) %
Non-interest expense	157,308		180,044		186,219		209,386		191,204		(13) %		(18) %
Pre-provision net revenue(1)	88,386		82,664		118,694		120,672		98,333		7 %		(10) %
Provision for credit losses	70,584		61,512		82,739		70,566		52,509		15 %		34 %
Income before income tax benefit (expense)	17,802		21,152		35,955		50,106		45,824		(16) %		(61) %
Income tax benefit (expense)	(4,136)		2,439		7,243		131,954		(4,988)		N/M		(17) %
Net income	13,666		23,591		43,198		182,060		40,836		(42) %		(67) %
Income tax benefit from release of tax valuation allowance	—		3,180		5,015		135,300		—		N/M		N/M
Net income excluding income tax benefit(1)(2)	$      13,666		$        20,411		$        38,183		$     46,760		$      40,836		(33) %		(67) %
Basic EPS – common stockholders	$          0.13		$            0.22		$            0.41		$         1.77		$          0.40		(41) %		(68) %
Diluted EPS – common stockholders	$          0.13		$            0.22		$            0.41		$         1.73		$          0.39		(41) %		(67) %
Diluted EPS excluding income tax benefit(1)(2)	$          0.13		$            0.19		$            0.36		$         0.45		$          0.39		(32) %		(67) %
LendingClub Corporation Performance Metrics:
Net interest margin	7.5 %		7.8 %		8.3 %		8.5 %		8.3 %
Efficiency ratio(3)	64.0 %		68.5 %		61.1 %		63.4 %		66.0 %
Return on average equity (ROE)(4)	4.6 %		7.2 %		14.2 %		33.8 %		18.7 %
Return on average total assets (ROA)(5)	0.7 %		1.1 %		2.5 %		5.5 %		3.1 %
Marketing expense as a % of loan originations	1.2 %		1.4 %		1.3 %		1.6 %		1.7 %
LendingClub Corporation Capital Metrics:
Common equity Tier 1 capital ratio	15.6 %		15.8 %		18.3 %		20.0 %		20.6 %
Tier 1 leverage ratio	12.8 %		14.1 %		15.7 %		16.2 %		15.6 %
Book value per common share	$        11.08		$          10.93		$          10.67		$       10.41		$          8.68		1 %		28 %
Tangible book value per common share(1)	$        10.23		$          10.06		$            9.78		$         9.50		$          7.75		2 %		32 %
Loan Originations (in millions)(6):
Total loan originations	$        2,288		$          2,524		$          3,539		$       3,840		$        3,217		(9) %		(29) %
Marketplace loans	$        1,286		$          1,824		$          2,386		$       2,819		$        2,360		(29) %		(46) %
Loan originations held for investment	$        1,002		$             701		$          1,153		$       1,021		$           856		43 %		17 %
Loan originations held for investment as a % of total loan originations	44 %		28 %		33 %		27 %		27 %
Servicing Portfolio AUM (in millions)(7):
Total servicing portfolio	$       16,060		$         16,157		$         15,929		$      14,783		$       13,341		(1) %		20 %
Loans serviced for others	$       10,504		$         10,819		$         11,807		$      11,382		$       10,475		(3) %		— %

 

LENDINGCLUB CORPORATION OPERATING HIGHLIGHTS (Continued) (In thousands, except percentages or as noted) (Unaudited)
	As of and for the three months ended										% Change
	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		Q/Q		Y/Y
Balance Sheet Data:
Loans and leases held for investment at amortized cost, net, excluding PPP loans	$ 5,091,969		$   4,638,331		$   4,414,347		$  3,692,667		$ 3,049,325		10 %		67 %
PPP loans	$      51,112		$        66,971		$        89,379		$   118,794		$    184,986		(24) %		(72) %
Total loans and leases held for investment at amortized cost, net(8)	$ 5,143,081		$   4,705,302		$   4,503,726		$  3,811,461		$ 3,234,311		9 %		59 %
Loans held for investment at fair value	$    748,618		$      925,938		$        15,057		$     20,583		$      15,384		(19) %		4,766 %
Total loans and leases held for investment	$ 5,891,699		$   5,631,240		$   4,518,783		$  3,832,044		$ 3,249,695		5 %		81 %
Total assets	$ 8,754,018		$   7,979,747		$   6,775,074		$  6,186,765		$ 5,574,425		10 %		57 %
Total deposits	$ 7,218,854		$   6,392,553		$   5,123,506		$  4,527,672		$ 3,977,477		13 %		81 %
Total liabilities	$ 7,563,276		$   6,815,453		$   5,653,664		$  5,107,648		$ 4,686,991		11 %		61 %
Total equity	$ 1,190,742		$   1,164,294		$   1,121,410		$  1,079,117		$    887,434		2 %		34 %

N/M – Not meaningful
(1)	Represents a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures."
(2)	Excludes fourth, third and second quarter 2022 income tax benefit of $3.2 million, $5.0 million and $135.3 million, respectively, due to the release of a deferred tax asset valuation allowance.
(3)	Calculated as the ratio of non-interest expense to total net revenue.
(4)	Calculated as annualized net income (which excludes the income tax benefit from the release of the deferred tax asset valuation allowance in the periods it did not occur) divided by average equity for the period presented.
(5)	Calculated as annualized net income (which excludes the income tax benefit from the release of the deferred tax asset valuation allowance in the periods it did not occur) divided by average total assets for the period presented.
(6)	Includes unsecured personal loans and auto loans only.
(7)	Loans serviced on our platform, which includes unsecured personal loans, auto loans and education and patient finance loans serviced for others and held for investment by the company.
(8)	Excludes loans held for investment at fair value, which primarily consists of a loan portfolio that was acquired in the fourth quarter of 2022.

 

The asset quality metrics presented in the following table are for loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:

	As of and for the three months ended
	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
Asset Quality Metrics:
Allowance for loan and lease losses to total loans and leases held for investment	6.4 %		6.5 %		6.3 %		6.0 %		5.5 %
Allowance for loan and lease losses to consumer loans and leases held for investment	7.1 %		7.3 %		7.2 %		6.9 %		6.6 %
Allowance for loan and lease losses to commercial loans and leases held for investment	2.0 %		2.0 %		1.9 %		2.0 %		1.8 %
Net charge-offs	$          49,845		$          37,148		$          22,658		$          14,778		$            8,632
Net charge-off ratio(1)	3.8 %		3.0 %		2.1 %		1.6 %		1.2 %

(1)	Net charge-off ratio is calculated as annualized net charge-offs divided by average outstanding loans and leases held for investment during the period, excluding PPP loans.

 

LENDINGCLUB CORPORATION LOANS AND LEASES HELD FOR INVESTMENT (In thousands) (Unaudited)
The following table presents loans and leases held for investment at amortized cost and loans held for investment at fair value:
	March 31, 2023		December 31, 2022
Unsecured personal	$       4,319,148		$       3,866,373
Residential mortgages	197,728		199,601
Secured consumer	212,748		194,634
Total consumer loans held for investment	4,729,624		4,260,608
Equipment finance (1)	153,905		160,319
Commercial real estate	372,770		373,501
Commercial and industrial (2)	235,639		238,726
Total commercial loans and leases held for investment	762,314		772,546
Total loans and leases held for investment at amortized cost	5,491,938		5,033,154
Allowance for loan and lease losses	(348,857)		(327,852)
Loans and leases held for investment at amortized cost, net	$       5,143,081		$       4,705,302
Loans held for investment at fair value	748,618		925,938
Total loans and leases held for investment	$       5,891,699		$       5,631,240

(1)	Comprised of sales-type leases for equipment.
(2)	Includes $51.1 million and $67.0 million of Paycheck Protection Program (PPP) loans as of March 31, 2023 and December 31, 2022, respectively. Such loans are guaranteed by the Small Business Association and, therefore, the company determined no allowance for expected credit losses is required on these loans.

 

LENDINGCLUB CORPORATION ALLOWANCE FOR LOAN AND LEASE LOSSES (In thousands) (Unaudited)
The following tables present the allowance for loan and lease losses on loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:
	Three Months Ended
	March 31, 2023						December 31, 2022
	Consumer		Commercial		Total		Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$    312,489		$        15,363		$ 327,852		$    288,138		$        15,063		$ 303,201
Credit loss expense for loans and leases held for investment	70,684		166		70,850		61,392		407		61,799
Charge-offs	(52,212)		(351)		(52,563)		(38,579)		(225)		(38,804)
Recoveries	2,585		133		2,718		1,538		118		1,656
Allowance for loan and lease losses, end of period	$    333,546		$        15,311		$ 348,857		$    312,489		$        15,363		$ 327,852

 

	Three Months Ended
	March 31, 2022
	Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$    128,812		$        15,577		$ 144,389
Credit loss expense for loans and leases held for investment	53,718		(1,490)		52,228
Charge-offs	(9,017)		(72)		(9,089)
Recoveries	344		113		457
Allowance for loan and lease losses, end of period	$    173,857		$        14,128		$ 187,985

 

LENDINGCLUB CORPORATION PAST DUE LOANS AND LEASES HELD FOR INVESTMENT (In thousands) (Unaudited)

The following tables present past due loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:

March 31, 2023	30-59 Days		60-89 Days		90 or More Days		Total Days Past Due
Unsecured personal	$      26,941		$      19,759		$      18,984		$             65,684
Residential mortgages	230		—		167		397
Secured consumer	1,922		260		187		2,369
Total consumer loans held for investment	$      29,093		$      20,019		$      19,338		$             68,450
Equipment finance	$        3,020		$              —		$           771		$               3,791
Commercial real estate	8,251		2,112		103		10,466
Commercial and industrial (1)	941		—		1,608		2,549
Total commercial loans and leases held for investment (1)	$      12,212		$        2,112		$         2,482		$             16,806
Total loans and leases held for investment at amortized cost (1)	$      41,305		$      22,131		$       21,820		$             85,256

 

December 31, 2022	30-59 Days		60-89 Days		90 or More Days			Total Days Past Due
Unsecured personal	$      21,016		$      16,418		$      16,255			$             53,689
Residential mortgages	—		254		331			585
Secured consumer	1,720		382		188			2,290
Total consumer loans held for investment	$      22,736		$      17,054		$       16,774			$             56,564
Equipment finance	$        3,172		$              —		$            859			$               4,031
Commercial real estate	—		102		—			102
Commercial and industrial (1)	—		—		1,643			1,643
Total commercial loans and leases held for investment (1)	$        3,172		$            102		$         2,502			$               5,776
Total loans and leases held for investment at amortized cost (1)	$      25,908		$       17,156		$       19,276			$             62,340

(1)    Past due PPP loans are excluded from the tables.

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share data) (Unaudited)
	Three Months Ended						Change (%)
	March 31, 2023		December 31, 2022		March 31, 2022		Q1 2023 vs Q4 2022		Q1 2023 vs Q1 2022
Non-interest income:
Origination fees	$         70,543		$        100,692		$       122,093		(30) %		(42) %
Servicing fees	26,380		20,169		18,514		31 %		42 %
Gain on sales of loans	14,125		18,352		24,110		(23) %		(41) %
Net fair value adjustments	(15,414)		(15,774)		15,249		(2) %		(201) %
Marketplace revenue	95,634		123,439		179,966		(23) %		(47) %
Other non-interest income	3,356		4,026		9,891		(17) %		(66) %
Total non-interest income	98,990		127,465		189,857		(22) %		(48) %
Total interest income	202,413		173,999		111,653		16 %		81 %
Total interest expense	55,709		38,756		11,973		44 %		365 %
Net interest income	146,704		135,243		99,680		8 %		47 %
Total net revenue	245,694		262,708		289,537		(6) %		(15) %
Provision for credit losses	70,584		61,512		52,509		15 %		34 %
Non-interest expense:
Compensation and benefits	73,307		87,768		81,610		(16) %		(10) %
Marketing	26,880		35,139		55,080		(24) %		(51) %
Equipment and software	13,696		13,200		11,046		4 %		24 %
Depreciation and amortization	12,354		11,554		11,039		7 %		12 %
Professional services	9,058		10,029		12,406		(10) %		(27) %
Occupancy	4,310		4,698		6,019		(8) %		(28) %
Other non-interest expense	17,703		17,656		14,004		— %		26 %
Total non-interest expense	157,308		180,044		191,204		(13) %		(18) %
Income before income tax benefit (expense)	17,802		21,152		45,824		(16) %		(61) %
Income tax benefit (expense)	(4,136)		2,439		(4,988)		N/M		(17) %
Net income	$         13,666		$          23,591		$         40,836		(42) %		(67) %
Net income per share:
Basic EPS – common stockholders	$            0.13		$              0.22		$            0.40		(41) %		(68) %
Diluted EPS – common stockholders	$            0.13		$              0.22		$            0.39		(41) %		(67) %
Weighted-average common shares – Basic	106,912,139		105,650,177		101,493,561		1 %		5 %
Weighted-average common shares – Diluted	106,917,770		105,984,612		105,052,904		1 %		2 %

N/M – Not meaningful

 

LENDINGCLUB CORPORATION NET INTEREST INCOME (In thousands, except percentages or as noted) (Unaudited)
	Consolidated LendingClub Corporation (1)
	Three Months Ended March 31, 2023						Three Months Ended December 31, 2022						Three Months Ended March 31, 2022
	Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate		Average Balance		Interest Income/ Expense		Average Yield/ Rate
Interest-earning assets (2)
Cash, cash equivalents, restricted cash and other	$ 1,220,677		$  13,714		4.49 %		$ 1,139,887		$   10,595		3.72 %		$    892,921		$       688		0.31 %
Securities available for sale at fair value	362,960		3,900		4.30 %		349,512		3,359		3.84 %		325,155		4,511		5.55 %
Loans held for sale at fair value	110,580		5,757		20.83 %		114,851		5,724		19.93 %		255,139		7,450		11.68 %
Loans and leases held for investment:
Unsecured personal loans	4,066,713		133,687		13.15 %		3,825,808		125,872		13.16 %		2,060,323		78,376		15.22 %
Commercial and other consumer loans	1,175,504		16,780		5.71 %		1,164,326		15,197		5.22 %		1,075,412		13,066		4.86 %
Loans and leases held for investment at amortized cost	5,242,217		150,467		11.48 %		4,990,134		141,069		11.31 %		3,135,735		91,442		11.66 %
Loans held for investment at fair value	836,313		26,892		12.86 %		308,570		10,862		14.08 %		18,523		593		12.80 %
Total loans and leases held for investment	6,078,530		177,359		11.67 %		5,298,704		151,931		11.47 %		3,154,258		92,035		11.67 %
Retail and certificate loans held for investment at fair value	46,525		1,683		14.47 %		66,469		2,390		14.38 %		198,813		6,969		14.02 %
Total interest-earning assets	7,819,272		202,413		10.35 %		6,969,423		173,999		9.99 %		4,826,286		111,653		9.25 %
Cash and due from banks and restricted cash	71,878						64,907						92,683
Allowance for loan and lease losses	(338,359)						(314,861)						(163,631)
Other non-interest earning assets	666,650						613,664						486,363
Total assets	$ 8,219,441						$ 7,333,133						$ 5,241,701
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$ 1,633,691		$    7,568		1.88 %		$ 1,929,260		$     7,500		1.54 %		$ 2,240,450		$    1,724		0.31 %
Savings accounts and certificates of deposit	4,747,478		45,705		3.90 %		3,576,205		28,251		3.13 %		1,071,133		1,714		0.64 %
Interest-bearing deposits	6,381,169		53,273		3.39 %		5,505,465		35,751		2.58 %		3,311,583		3,438		0.42 %
Retail notes, certificates and secured borrowings	46,525		1,683		14.47 %		66,469		2,390		14.38 %		198,813		6,969		14.02 %
Other interest-bearing liabilities	107,520		753		2.80 %		105,834		615		2.33 %		312,690		1,566		2.00 %
Total interest-bearing liabilities	6,535,214		55,709		3.46 %		5,677,768		38,756		2.71 %		3,823,086		11,973		1.25 %
Non-interest bearing deposits	241,954						251,686						227,337
Other liabilities	263,868						266,558						319,241
Total liabilities	$ 7,041,036						$ 6,196,012						$ 4,369,664
Total equity	$ 1,178,405						$ 1,137,121						$    872,037
Total liabilities and equity	$ 8,219,441						$ 7,333,133						$ 5,241,701
Interest rate spread					6.90 %						7.28 %						8.00 %
Net interest income and net interest margin			$  146,704		7.50 %				$ 135,243		7.76 %				$  99,680		8.26 %

(1)	Consolidated presentation reflects intercompany eliminations.
(2)	Nonaccrual loans and any related income are included in their respective loan categories.

 

LENDINGCLUB CORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts) (Unaudited)
	March 31, 2023		December 31, 2022
Assets
Cash and due from banks	$            22,732		$         23,125
Interest-bearing deposits in banks	1,614,265		1,033,905
Total cash and cash equivalents	1,636,997		1,057,030
Restricted cash	47,342		67,454
Securities available for sale at fair value ($428,395 and $399,668 at amortized cost, respectively)	380,028		345,702
Loans held for sale at fair value	44,647		110,400
Loans and leases held for investment	5,491,938		5,033,154
Allowance for loan and lease losses	(348,857)		(327,852)
Loans and leases held for investment, net	5,143,081		4,705,302
Loans held for investment at fair value	748,618		925,938
Retail and certificate loans held for investment at fair value	38,855		55,425
Property, equipment and software, net	144,041		136,473
Goodwill	75,717		75,717
Other assets	494,692		500,306
Total assets	$        8,754,018		$     7,979,747
Liabilities and Equity
Deposits:
Interest-bearing	$        7,018,014		$     6,158,560
Noninterest-bearing	200,840		233,993
Total deposits	7,218,854		6,392,553
Borrowings	52,980		74,858
Retail notes, certificates and secured borrowings at fair value	38,855		55,425
Other liabilities	252,587		292,617
Total liabilities	7,563,276		6,815,453
Equity
Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, $0.01 par value; 180,000,000 shares authorized; 107,460,734 and 106,546,995 shares issued and outstanding, respectively	1,075		1,065
Additional paid-in capital	1,637,283		1,628,590
Accumulated deficit	(414,079)		(427,745)
Accumulated other comprehensive loss	(33,537)		(37,616)
Total equity	1,190,742		1,164,294
Total liabilities and equity	$        8,754,018		$     7,979,747

 

LENDINGCLUB CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except share and per share data) (Unaudited)
Pre-Provision Net Revenue
		For the three months ended
		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
GAAP Net income		$          13,666		$           23,591		$             43,198		$     182,060		$          40,836
Less: Provision for credit losses		(70,584)		(61,512)		(82,739)		(70,566)		(52,509)
Less: Income tax benefit (expense)		(4,136)		2,439		7,243		131,954		(4,988)
Pre-provision net revenue		$          88,386		$           82,664		$           118,694		$     120,672		$          98,333

 

		For the three months ended
		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
Non-interest income		$          98,990		$         127,465		$           181,237		$     213,832		$        189,857
Net interest income		146,704		135,243		123,676		116,226		99,680
Total net revenue		245,694		262,708		304,913		330,058		289,537
Non-interest expense		(157,308)		(180,044)		(186,219)		(209,386)		(191,204)
Pre-provision net revenue		88,386		82,664		118,694		120,672		98,333
Provision for credit losses		(70,584)		(61,512)		(82,739)		(70,566)		(52,509)
Income before income tax benefit (expense)		17,802		21,152		35,955		50,106		45,824
Income tax benefit (expense)		(4,136)		2,439		7,243		131,954		(4,988)
GAAP Net income		$          13,666		$           23,591		$             43,198		$     182,060		$          40,836

 

Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit

		For the three months ended
		December 31, 2022		September 30, 2022		June 30, 2022
GAAP Net income		$            23,591		$            43,198		$           182,060
Less: Income tax benefit from release of tax valuation allowance		3,180		5,015		135,300
Net income excluding income tax benefit		$            20,411		$            38,183		$             46,760
GAAP Diluted EPS – common stockholders		$                0.22		$                0.41		$                 1.73
(A)	Income tax benefit from release of tax valuation allowance	$              3,180		$              5,015		$           135,300
(B)	Weighted-average common shares – Diluted	105,984,612		105,853,938		105,042,626
(A/B)	Diluted EPS impact of income tax benefit	$                0.03		$                0.05		$                 1.29
Diluted EPS excluding income tax benefit		$                0.19		$                0.36		$                 0.44

 

LENDINGCLUB CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Continued) (In thousands, except share and per share data) (Unaudited)
Tangible Book Value Per Common Share
	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
GAAP common equity	$     1,190,742		$     1,164,294		$       1,121,410		$  1,079,117		$        887,434
Less: Goodwill	(75,717)		(75,717)		(75,717)		(75,717)		(75,717)
Less: Intangible assets	(15,201)		(16,334)		(17,512)		(18,690)		(19,886)
Tangible common equity	$     1,099,824		$     1,072,243		$       1,028,181		$     984,710		$        791,831
Book value per common share
GAAP common equity	$     1,190,742		$     1,164,294		$       1,121,410		$  1,079,117		$        887,434
Common shares issued and outstanding	107,460,734		106,546,995		105,088,761		103,630,776		102,194,037
Book value per common share	$            11.08		$             10.93		$               10.67		$          10.41		$               8.68
Tangible book value per common share
Tangible common equity	$     1,099,824		$     1,072,243		$       1,028,181		$     984,710		$        791,831
Common shares issued and outstanding	107,460,734		106,546,995		105,088,761		103,630,776		102,194,037
Tangible book value per common share	$            10.23		$             10.06		$                 9.78		$            9.50		$               7.75

 

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SOURCE LendingClub Corporation

FAQ

What were the Q1 2023 earnings for LendingClub Corporation (LC)?

LendingClub reported a net income of $13.7 million and a diluted EPS of $0.13 for Q1 2023.

How did LendingClub's deposits perform in Q1 2023?

Deposits increased by 13% sequentially to $7.2 billion.

What is LendingClub's financial outlook for Q2 2023?

LendingClub projects loan originations between $1.9 billion and $2.1 billion for Q2 2023.

How much did LendingClub's net revenue decrease in Q1 2023?

Net revenue decreased from $262.7 million in Q4 2022 to $245.7 million in Q1 2023.

What contributed to the increase in LendingClub's PPNR in Q1 2023?

PPNR rose by 7% to $88.4 million, driven by cost reduction actions and a one-time revenue benefit.