LendingClub Reports Fourth Quarter and Full Year 2022 Results

Rhea-AI Summary

LendingClub Corporation (NYSE: LC) reported record revenue and earnings for the fiscal year 2022, with total net revenue soaring to $1.2 billion, up 45% year over year. Net interest income exceeded $474 million, an increase of over 100%. The total assets grew 63% to $8 billion, primarily due to a $1.05 billion loan portfolio acquisition. Despite a reduction in marketplace revenue, which fell 28% year over year, the company implemented significant cost reductions and maintained a strong equity position with a Tier 1 capital ratio of 15.8%. For Q1 2023, LendingClub expects loan originations between $1.9 billion and $2.2 billion.

Positive

• Total assets increased 63% year over year to $8.0 billion.
• Total net revenue grew 45% year over year to $1.2 billion.
• Net interest income soared over 100% to $474.8 million.
• Pre-tax income surged to $153 million, up from $18.4 million year over year.
• Total equity rose by $314.1 million, reflecting solid net income generation.

Negative

• Marketplace revenue decreased by 28% year over year to $683.6 million.
• Loan originations fell from $3.1 billion to $2.5 billion year over year.
• Net income dropped to $23.6 million compared to $29.1 million in the prior year.

Delivers Record Full Year Revenue and Earnings Growth Despite Challenging Environment

SAN FRANCISCO, Jan. 25, 2023 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the fourth quarter and full year ended December 31, 2022.

"Our fourth quarter results clearly demonstrated the benefits of our evolution into a marketplace bank. We significantly grew recurring revenue to offset the expected reduction in marketplace volumes," said Scott Sanborn, LendingClub CEO. "Looking ahead, in anticipation of a more challenging environment, we have streamlined our operations and will maintain our underwriting discipline. We also intend to remain profitable, while investing in-period earnings into loan retention to support future earnings. These actions will allow us to capitalize on growth opportunities as economic pressures abate."

Full Year 2022 Results Reflect Ongoing Transformation and Positioning for Long-Term Sustained Success

• Total assets increased 63% year over year to $8.0 billion, primarily reflecting growth in loans held for investment, including the acquisition of a $1.05 billion outstanding principal loan portfolio in the fourth quarter of 2022.
• Deposits of $6.4 billion more than doubled, primarily due to growth in online savings deposits.
• Total net revenue of $1.2 billion up 45% year over year
• Net interest income, a recurring stream of earnings, increased over 100% to $474.8 million.
• Marketplace revenue grew 18% year over year to $683.6 million.
• Pre-tax income of $153.0 million compared to $18.4 million in the prior year, reflecting solid revenue growth combined with improved operating efficiency.
• Implemented significant cost reduction plan to more closely align the company's expense base with anticipated loan volume in 2023.

Fourth Quarter 2022 Results

• Total net revenue of $262.7 million was comparable to the prior-year period, as strong growth in net interest income offset lower marketplace revenue.
• Net interest income increased 63% year over year to $135.2 million.
• Total loans and leases held for investment grew 104%, primarily reflecting growth in personal loan originations held for investment and the acquisition of a $1.05 billion loan portfolio in the fourth quarter of 2022.
• Net interest margin expanded to 7.8% from 7.6% in the prior-year period, primarily reflecting a greater mix of personal loans which generate a higher yield than the other loans held for investment.
• Marketplace revenue was $123.4 million compared to $170.6 million year over year, reflecting a reduction in volumes consistent with the change in total origination volume due to the pace of Federal Reserve interest rate increases and tighter underwriting standards implemented by the company.
• Loan originations were $2.5 billion, compared to $3.1 billion in the prior-year period.
• Credit quality of the held-for-investment prime loan portfolio remained strong, with delinquency rates continuing to normalize as the portfolio seasons.
• Provision for credit losses of $61.5 million primarily reflects $700.8 million of quarterly loan originations held for investment and ongoing recognition of provision expense for discounted lifetime losses at origination.
• Efficiency ratio improved to 69% from 72% in the prior-year period due to better marketing efficiency.
• Pre-provision net revenue of $82.7 million grew 12% year over year, driven by improved operating efficiency.
• Net income of $23.6 million compared to $29.1 million year over year, reflecting higher credit provisioning due to growth in the held-for-investment portfolio, partially offset by favorable marketing efficiency.
• Total equity of $1.2 billion grew $314.1 million from December 31, 2021, primarily reflecting net income generated over the period and the release of the deferred tax asset valuation allowance.
• Book value per common share of $10.93 increased 30% from December 31, 2021. Tangible book value per common share of $10.06 increased 35% from December 31, 2021. The increases in book value and tangible book value per share were consistent with the growth in total equity.
• Substantial capital with a consolidated Tier 1 leverage ratio of 14.1% and consolidated Common Equity Tier 1 capital ratio of 15.8%.

 

	Three Months Ended						Year Ended
($ in millions, except per share amounts)	December 31, 2022		September 30, 2022		December 31, 2021		December 31, 2022		December 31, 2021
Total net revenue	$            262.7		$             304.9		$            262.2		$         1,187.2		$            818.6
Non-interest expense	180.0		186.2		188.2		766.9		661.4
Pre-provision net revenue (1)	82.7		118.7		74.0		420.3		157.2
Provision for credit losses	61.5		82.7		45.1		267.3		138.8
Income before income tax benefit	21.2		36.0		28.9		153.0		18.4
Income tax benefit	2.4		7.2		0.2		136.6		0.1
Net income	$             23.6		$              43.2		$              29.1		$           289.7		$             18.6
Diluted EPS	$             0.22		$              0.41		$              0.27		$             2.79		$             0.18
Income tax benefit from release of tax valuation allowance	$               3.2		$                5.0		$                 —		$           143.5		$                —
Net income excluding income tax benefit (1,2)	$             20.4		$              38.2		$              29.1		$           146.2		$             18.6
Diluted EPS excluding income tax benefit (1,2)	$             0.19		$              0.36		$              0.27		$             1.41		$             0.18

(1)	See page 3 of this release for additional information on our use of non-GAAP financial measures.
(2)	Fourth and third quarters of 2022 and the year ended December 31, 2022, include income tax benefit of $3.2 million, $5.0 million, and $143.5 million, respectively, due to the release of a deferred tax asset valuation allowance.

 

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

Given the rapid change in the economic environment, the company is currently providing guidance for the first quarter of 2023 and expects loan originations and pre-provision net revenue to be in the ranges below. The outlook for loan originations reflects the impact of rising rates on marketplace demand combined with continued prudent underwriting. The company plans to maintain held-for-investment loan balances in line with the fourth quarter of 2022. For 2023, the company intends to remain profitable, while investing in-period earnings into loan retention to support future earnings.

		First Quarter 2023
Loan Originations		$1.9B to $2.2B
Pre-Provision Net Revenue		$55M 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 4.5 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 fourth quarter 2022 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, January 25, 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 (844) 200-6205, or outside the U.S. +1 (929) 526-1599, with Access Code 786729, 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 February 1, 2023, by calling +1 (866) 813-9403 or outside the U.S. +44 (204) 525-0658, with Access Code 636433. 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 the fourth, third and second quarters of 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 14 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 and Quarterly Report on Form 10-Q, each 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
	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		Q/Q		Y/Y
Operating Highlights:
Non-interest income	$       127,465		$      181,237		$    213,832		$    189,857		$       179,111		(30) %		(29) %
Net interest income	135,243		123,676		116,226		99,680		83,132		9 %		63 %
Total net revenue	262,708		304,913		330,058		289,537		262,243		(14) %		— %
Non-interest expense	180,044		186,219		209,386		191,204		188,220		(3) %		(4) %
Pre-provision net revenue(1)	82,664		118,694		120,672		98,333		74,023		(30) %		12 %
Provision for credit losses	61,512		82,739		70,566		52,509		45,149		(26) %		36 %
Income before income tax benefit (expense)	21,152		35,955		50,106		45,824		28,874		(41) %		(27) %
Income tax benefit (expense)	2,439		7,243		131,954		(4,988)		234		N/M		NM
Net income	23,591		43,198		182,060		40,836		29,108		N/M		N/M
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)	$        20,411		$        38,183		$     46,760		$     40,836		$        29,108		(47) %		(30) %
Basic EPS – common stockholders	$            0.22		$            0.41		$         1.77		$         0.40		$            0.29		(46) %		(24) %
Diluted EPS – common stockholders	$            0.22		$            0.41		$         1.73		$         0.39		$            0.27		(46) %		(19) %
Diluted EPS excluding income tax benefit(1)(2)	$            0.19		$            0.36		$         0.45		$         0.39		$            0.27		(47) %		(30) %
LendingClub Corporation Performance Metrics:
Net interest margin	7.8 %		8.3 %		8.5 %		8.3 %		7.6 %
Efficiency ratio(3)	68.5 %		61.1 %		63.4 %		66.0 %		71.8 %
Return on average equity (ROE)	7.2 %		14.2 %		33.8 %		18.7 %		14.1 %
Return on average total assets (ROA)	1.1 %		2.5 %		5.5 %		3.1 %		2.4 %
Marketing expense as a % of loan originations	1.4 %		1.3 %		1.6 %		1.7 %		1.7 %
LendingClub Corporation Capital Metrics:
Common Equity Tier 1 Capital Ratio	15.8 %		18.3 %		20.0 %		20.6 %		21.3 %
Tier 1 Leverage Ratio	14.1 %		15.7 %		16.2 %		15.6 %		16.5 %
Book Value per Common Share	$           10.93		$           10.67		$        10.41		$          8.68		$            8.41		2 %		30 %
Tangible Book Value per Common Share(1)	$           10.06		$             9.78		$          9.50		$          7.75		$            7.46		3 %		35 %
Loan Originations (in millions)(4):
Total loan originations	$           2,524		$           3,539		$        3,840		$        3,217		$          3,069		(29) %		(18) %
Marketplace loans	$           1,824		$           2,386		$        2,819		$        2,360		$          2,308		(24) %		(21) %
Loan originations held for investment	$              701		$           1,153		$        1,021		$           856		$             761		(39) %		(8) %
Loan originations held for investment as a % of total loan originations	28 %		33 %		27 %		27 %		25 %
Servicing Portfolio AUM (in millions)(5):
Total servicing portfolio	$        16,157		$         15,929		$      14,783		$      13,341		$        12,463		1 %		30 %
Loans serviced for others	$        10,819		$         11,807		$      11,382		$      10,475		$        10,124		(8) %		7 %
Balance Sheet Data:
Loans and leases held for investment at amortized cost, net, excluding PPP loans	$   4,638,331		$   4,414,347		$  3,692,667		$  3,049,325		$   2,486,440		5 %		87 %
PPP loans	$        66,971		$        89,379		$   118,794		$   184,986		$      268,297		(25) %		(75) %
Total loans and leases held for investment at amortized cost, net(6)	$   4,705,302		$   4,503,726		$  3,811,461		$  3,234,311		$   2,754,737		4 %		71 %
Loans held for investment at fair value	$      925,938		$        15,057		$     20,583		$     15,384		$               21		N/M		N/M
Total loans and leases held for investment	$   5,631,240		$   4,518,783		$  3,832,044		$  3,249,695		$   2,754,758		25 %		104 %
Total assets	$   7,979,747		$   6,775,074		$  6,186,765		$  5,574,425		$   4,900,319		18 %		63 %
Total deposits	$   6,392,553		$   5,123,506		$  4,527,672		$  3,977,477		$   3,135,788		25 %		104 %
Total liabilities	$   6,815,453		$   5,653,664		$  5,107,648		$  4,686,991		$   4,050,077		21 %		68 %
Total equity	$   1,164,294		$   1,121,410		$  1,079,117		$   887,434		$      850,242		4 %		37 %

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)	Includes unsecured personal loans, auto loans, and education and patient finance loans only.
(5)	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.
(6)	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
	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
Asset Quality Metrics:
Allowance for loan and lease losses to total loans and leases held for investment	6.5 %		6.3 %		6.0 %		5.5 %		5.0 %
Allowance for loan and lease losses to total loans and leases held for investment, excluding PPP loans	6.6 %		6.4 %		6.2 %		5.8 %		5.5 %
Allowance for loan and lease losses to consumer loans and leases held for investment	7.3 %		7.2 %		6.9 %		6.6 %		6.4 %
Allowance for loan and lease losses to commercial loans and leases held for investment	2.0 %		1.9 %		2.0 %		1.8 %		1.8 %
Allowance for loan and lease losses to commercial loans and leases held for investment, excluding PPP loans	2.2 %		2.2 %		2.3 %		2.6 %		2.6 %
Net charge-offs	$          37,148		$          22,658		$          13,987		$            8,673		$            5,636
Net charge-off ratio(1)	3.0 %		2.1 %		1.6 %		1.2 %		0.9 %

(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:
	December 31, 2022		September 30, 2022		December 31, 2021
Unsecured personal	$       3,866,373		$       3,642,254		$       1,804,578
Residential mortgages	199,601		197,776		151,362
Secured consumer	194,634		180,768		65,976
Total consumer loans held for investment	4,260,608		4,020,798		2,021,916
Equipment finance (1)	160,319		167,447		149,155
Commercial real estate	373,501		372,406		310,399
Commercial and industrial (2)	238,726		246,276		417,656
Total commercial loans and leases held for investment	772,546		786,129		877,210
Total loans and leases held for investment at amortized cost	5,033,154		4,806,927		2,899,126
Allowance for loan and lease losses	(327,852)		(303,201)		(144,389)
Loans and leases held for investment at amortized cost, net	$       4,705,302		$       4,503,726		$       2,754,737
Loans held for investment at fair value	$          925,938		$            15,057		$                   21
Total loans and leases held for investment	$       5,631,240		$       4,518,783		$       2,754,758

(1)	Comprised of sales-type leases for equipment.
(2)	Includes $67.0 million, $89.4 million, and $268.3 million of Paycheck Protection Program (PPP) loans as of December 31, 2022, September 30, 2022, and December 31, 2021, 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
	December 31, 2022						September 30, 2022
	Consumer		Commercial		Total		Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$     288,138		$          15,063		$ 303,201		$     228,184		$          15,076		$ 243,260
Credit loss expense for loans and leases held for investment	61,392		407		61,799		81,935		664		82,599
Charge-offs	(38,579)		(225)		(38,804)		(22,944)		(784)		(23,728)
Recoveries	1,538		118		1,656		963		107		1,070
Allowance for loan and lease losses, end of period	$     312,489		$          15,363		$ 327,852		$     288,138		$          15,063		$ 303,201

 

	Three Months Ended
	December 31, 2021
	Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$        88,631		$          16,105		$ 104,736
Credit loss expense for loans and leases held for investment	45,595		(306)		45,289
Charge-offs	(5,557)		(313)		(5,870)
Recoveries	143		91		234
Allowance for loan and lease losses, end of period	$     128,812		$          15,577		$ 144,389

 

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:
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
September 30, 2022	30-59 Days		60-89 Days		90 or More Days		Total Days Past Due
Unsecured personal	$       14,799		$       12,463		$       10,601		$             37,863
Residential mortgages	—		—		337		337
Secured consumer	985		504		162		1,651
Total consumer loans held for investment	$       15,784		$       12,967		$       11,100		$             39,851
Equipment finance	$              —		$              —		$              —		$                     —
Commercial real estate	—		101		452		553
Commercial and industrial (1)	—		—		1,650		1,650
Total commercial loans and leases held for investment (1)	$              —		$            101		$         2,102		$               2,203
Total loans and leases held for investment at amortized cost (1)	$       15,784		$       13,068		$       13,202		$             42,054
December 31, 2021	30-59 Days		60-89 Days		90 or More Days		Total Days Past Due
Unsecured personal	$         3,624		$         2,600		$         1,676		$               7,900
Residential mortgages	142		92		1,069		1,303
Secured consumer	171		53		3,011		3,235
Total consumer loans held for investment	$         3,937		$         2,745		$         5,756		$             12,438
Equipment finance	$              —		$              —		$              —		$                     —
Commercial real estate	104		—		609		713
Commercial and industrial (1)	—		—		1,410		1,410
Total commercial loans and leases held for investment (1)	$            104		$              —		$         2,019		$               2,123
Total loans and leases held for investment at amortized cost (1)	$         4,041		$         2,745		$         7,775		$             14,561

(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 (%)
	December 31, 2022		September 30, 2022		December 31, 2021		Q4 2022 vs Q4 2021		Q4 2022 vs Q3 2022
Non-interest income:
Origination fees	$       100,692		$        127,142		$       118,353		(15) %		(21) %
Servicing fees	20,169		23,760		20,940		(4) %		(15) %
Gain on sales of loans	18,352		23,554		20,569		(11) %		(22) %
Net fair value adjustments	(15,774)		(619)		10,700		(247) %		N/M
Marketplace revenue	123,439		173,837		170,562		(28) %		(29) %
Other non-interest income	4,026		7,400		8,549		(53) %		(46) %
Total non-interest income	127,465		181,237		179,111		(29) %		(30) %
Total interest income	173,999		143,220		97,655		78 %		21 %
Total interest expense	38,756		19,544		14,523		167 %		98 %
Net interest income	135,243		123,676		83,132		63 %		9 %
Total net revenue	262,708		304,913		262,243		— %		(14) %
Provision for credit losses	61,512		82,739		45,149		36 %		(26) %
Non-interest expense:
Compensation and benefits	87,768		84,916		78,741		11 %		3 %
Marketing	35,139		46,031		50,708		(31) %		(24) %
Equipment and software	13,200		12,491		12,019		10 %		6 %
Occupancy	4,698		5,051		4,706		— %		(7) %
Depreciation and amortization	11,554		10,681		10,462		10 %		8 %
Professional services	10,029		11,943		12,699		(21) %		(16) %
Other non-interest expense	17,656		15,106		18,885		(7) %		17 %
Total non-interest expense	180,044		186,219		188,220		(4) %		(3) %
Income before income tax benefit	21,152		35,955		28,874		(27) %		(41) %
Income tax benefit	2,439		7,243		234		N/M		N/M
Net income	$         23,591		$          43,198		$         29,108		(19) %		(45) %
Net income per share:
Net income per share attributable to common stockholders – Basic	$             0.22		$              0.41		$             0.29		(24) %		(46) %
Net income per share attributable to common stockholders – Diluted	$             0.22		$              0.41		$             0.27		(19) %		(46) %
Weighted-average common shares – Basic	105,650,177		104,215,594		100,320,691		5 %		1 %
Weighted-average common shares – Diluted	105,984,612		105,853,938		108,096,823		(2) %		— %

N/M – Not meaningful

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share data) (Unaudited)
	Year Ended December 31,
	2022		2021		Change (%)
Non-interest income:
Origination fees	$       499,179		$       416,839		20 %
Servicing fees	80,609		87,639		(8) %
Gain on sales of loans	95,335		70,116		36 %
Net fair value adjustments	8,503		3,986		113 %
Marketplace revenue	683,626		578,580		18 %
Other non-interest income	28,765		27,219		6 %
Total non-interest income	712,391		605,799		18 %
Total interest income	557,340		292,832		90 %
Total interest expense	82,515		80,001		3 %
Net interest income	474,825		212,831		123 %
Total net revenue	1,187,216		818,630		45 %
Provision for credit losses	267,326		138,800		93 %
Non-interest expense:
Compensation and benefits	339,397		288,390		18 %
Marketing	197,747		156,142		27 %
Equipment and software	49,198		39,490		25 %
Occupancy	21,977		24,249		(9) %
Depreciation and amortization	43,831		44,285		(1) %
Professional services	50,516		47,572		6 %
Other non-interest expense	64,187		61,258		5 %
Total non-interest expense	766,853		661,386		16 %
Income before income tax benefit	153,037		18,444		730 %
Income tax benefit	136,648		136		N/M
Net income	$       289,685		$         18,580		N/M
Net income per share:
Net income per share attributable to common stockholders – Basic	$             2.80		$             0.19		N/M
Net income per share attributable to common stockholders – Diluted	$             2.79		$             0.18		N/M
Weighted-average common shares – Basic	103,547,305		97,486,754		6 %
Weighted-average common shares – Diluted	104,001,288		102,147,353		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 December 31, 2022						Three Months Ended September 30, 2022						Three Months Ended December 31, 2021
	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	$ 1,139,887		$   10,595		3.72 %		$    893,655		$      5,017		2.25 %		$    710,472		$       469		0.26 %
Securities available for sale at fair value	349,512		3,359		3.84 %		396,556		3,820		3.85 %		265,140		3,071		4.63 %
Loans held for sale	114,851		5,724		19.93 %		126,487		5,879		18.59 %		184,708		7,153		15.49 %
Loans and leases held for investment:
Unsecured personal loans	3,825,808		125,872		13.16 %		3,268,649		110,446		13.52 %		1,542,285		60,384		15.66 %
Commercial and other consumer loans	1,164,326		15,197		5.22 %		1,135,474		13,582		4.78 %		1,381,041		16,580		4.80 %
Loans and leases held for investment at amortized cost	4,990,134		141,069		11.31 %		4,404,123		124,028		11.26 %		2,923,326		76,964		10.53 %
Loans held for investment at fair value (3)	308,570		10,862		14.08 %		17,763		791		17.83 %		24,184		762		12.60 %
Total loans and leases held for investment	5,298,704		151,931		11.47 %		4,421,886		124,819		11.29 %		2,947,510		77,726		10.55 %
Retail and certificate loans held for investment at fair value	66,469		2,390		14.38 %		104,010		3,685		14.17 %		262,548		9,236		14.07 %
Total interest-earning assets	6,969,423		173,999		9.99 %		5,942,594		143,220		9.64 %		4,370,378		97,655		8.94 %
Cash and due from banks and restricted cash	64,907						58,411						73,258
Allowance for loan and lease losses	(314,861)						(254,849)						(125,120)
Other non-interest earning assets	613,664						597,169						465,010
Total assets	$ 7,333,133						$ 6,343,325						$ 4,783,526
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$ 1,929,260		$     7,500		1.54 %		$ 2,192,904		$      4,575		0.83 %		$ 2,146,687		$    1,716		0.32 %
Savings accounts and certificates of deposit	3,576,205		28,251		3.13 %		2,260,170		10,609		1.86 %		580,361		900		0.62 %
Interest-bearing deposits	5,505,465		35,751		2.58 %		4,453,074		15,184		1.35 %		2,727,048		2,616		0.38 %
Short-term borrowings	3,875		63		6.52 %		6,848		87		5.09 %		36,823		561		6.08 %
Advances from PPPLF	77,199		69		0.36 %		104,897		93		0.36 %		342,335		307		0.36 %
Retail notes, certificates and secured borrowings	66,469		2,390		14.38 %		104,010		3,685		14.17 %		262,548		9,236		14.07 %
Structured Program borrowings	9,956		159		6.39 %		13,859		225		6.50 %		77,354		1,642		8.49 %
Other long-term debt	14,804		324		8.76 %		15,300		270		7.04 %		15,514		161		4.15 %
Total interest-bearing liabilities	5,677,768		38,756		2.71 %		4,697,988		19,544		1.65 %		3,461,622		14,523		1.68 %
Non-interest bearing deposits	251,686						284,134						211,692
Other liabilities	266,558						250,086						282,339
Total liabilities	$ 6,196,012						$ 5,232,208						$ 3,955,653
Total equity	$ 1,137,121						$  1,111,117						$    827,873
Total liabilities and equity	$ 7,333,133						$ 6,343,325						$ 4,783,526
Interest rate spread					7.28 %						7.99 %						7.26 %
Net interest income and net interest margin			$  135,243		7.76 %				$ 123,676		8.32 %				$  83,132		7.61 %

(1)	Consolidated presentation reflects intercompany eliminations.
(2)	Nonaccrual loans and any related income are included in their respective loan categories.
(3)	Fourth quarter 2022 average balance includes the acquisition of a $1.05 billion outstanding principal loan portfolio in December 2022.

 

LENDINGCLUB CORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts) (Unaudited)
	December 31, 2022		December 31, 2021
Assets
Cash and due from banks	$            23,125		$          35,670
Interest-bearing deposits in banks	1,033,905		651,456
Total cash and cash equivalents	1,057,030		687,126
Restricted cash	67,454		76,460
Securities available for sale at fair value ($399,668 and $256,170 at amortized cost, respectively)	345,702		263,530
Loans held for sale (includes $110,400 and $142,370 at fair value, respectively)	110,400		391,248
Loans and leases held for investment	5,033,154		2,899,126
Allowance for loan and lease losses	(327,852)		(144,389)
Loans and leases held for investment, net	4,705,302		2,754,737
Loans held for investment at fair value	925,938		21,240
Retail and certificate loans held for investment at fair value	55,425		229,719
Property, equipment and software, net	136,473		97,996
Goodwill	75,717		75,717
Other assets	500,306		302,546
Total assets	$        7,979,747		$     4,900,319
Liabilities and Equity
Deposits:
Interest-bearing	$        6,158,560		$     2,919,203
Noninterest-bearing	233,993		216,585
Total deposits	6,392,553		3,135,788
Short-term borrowings	2,619		27,780
Advances from Paycheck Protection Program Liquidity Facility (PPPLF)	64,154		271,933
Retail notes, certificates and secured borrowings at fair value	55,425		229,719
Payable on Structured Program borrowings	8,085		65,451
Other long-term debt	—		15,455
Other liabilities	292,617		303,951
Total liabilities	6,815,453		4,050,077
Equity
Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; — shares issued and outstanding	—		—
Common stock, $0.01 par value; 180,000,000 shares authorized; 106,546,995 and 101,043,924 shares issued and outstanding, respectively	1,065		1,010
Additional paid-in capital	1,628,590		1,559,616
Accumulated deficit	(427,745)		(717,430)
Accumulated other comprehensive income (loss)	(37,616)		7,046
Total equity	1,164,294		850,242
Total liabilities and equity	$        7,979,747		$     4,900,319

 

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										For the year ended
		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
GAAP Net income		$          23,591		$            43,198		$     182,060		$       40,836		$          29,108		$        289,685		$          18,580
Less: Provision for credit losses		(61,512)		(82,739)		(70,566)		(52,509)		(45,149)		(267,326)		(138,800)
Less: Income tax benefit (expense)		2,439		7,243		131,954		(4,988)		234		136,648		136
Pre-provision net revenue		$          82,664		$          118,694		$     120,672		$       98,333		$          74,023		$        420,363		$        157,244
		For the three months ended										For the year ended
		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
Non-interest income		$        127,465		$         181,237		$     213,832		$     189,857		$        179,111		$        712,391		$        605,799
Net interest income		135,243		123,676		116,226		99,680		83,132		474,825		212,831
Total net revenue		262,708		304,913		330,058		289,537		262,243		1,187,216		818,630
Non-interest expense		(180,044)		(186,219)		(209,386)		(191,204)		(188,220)		(766,853)		(661,386)
Pre-provision net revenue		82,664		118,694		120,672		98,333		74,023		420,363		157,244
Provision for credit losses		(61,512)		(82,739)		(70,566)		(52,509)		(45,149)		(267,326)		(138,800)
Income before income tax benefit		21,152		35,955		50,106		45,824		28,874		153,037		18,444
Income tax benefit		2,439		7,243		131,954		(4,988)		234		136,648		136
GAAP Net income		$          23,591		$            43,198		$     182,060		$       40,836		$          29,108		$        289,685		$          18,580

 

Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit
		For the three months ended						For the year ended
		December 31, 2022		September 30, 2022		June 30, 2022		December 31, 2022
GAAP Net income		$             23,591		$             43,198		$           182,060		$           289,685
Less: Income tax benefit from release of tax valuation allowance		3,180		5,015		135,300		143,495
Net income excluding income tax benefit		$             20,411		$             38,183		$             46,760		$           146,190
GAAP Diluted EPS – common stockholders		$                 0.22		$                 0.41		$                 1.73		$                 2.79
(A)	Income tax benefit from release of tax valuation allowance	$               3,180		$               5,015		$           135,300		$           143,495
(B)	Weighted-average common shares – Diluted	105,984,612		105,853,938		105,042,626		104,001,288
(A/B)	Diluted EPS impact of income tax benefit	$                 0.03		$                 0.05		$                 1.29		$                 1.38
Diluted EPS excluding income tax benefit		$                 0.19		$                 0.36		$                 0.44		$                 1.41

 

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
	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
GAAP common equity	$       1,164,294		$       1,121,410		$  1,079,117		$     887,434		$          850,242
Less: Goodwill	(75,717)		(75,717)		(75,717)		(75,717)		(75,717)
Less: Intangible assets	(16,334)		(17,512)		(18,690)		(19,886)		(21,181)
Tangible common equity	$       1,072,243		$       1,028,181		$     984,710		$     791,831		$          753,344
Book value per common share
GAAP common equity	$       1,164,294		$       1,121,410		$  1,079,117		$     887,434		$          850,242
Common shares issued and outstanding	106,546,995		105,088,761		103,630,776		102,194,037		101,043,924
Book value per common share	$              10.93		$              10.67		$         10.41		$           8.68		$                8.41
Tangible book value per common share
Tangible common equity	$       1,072,243		$       1,028,181		$     984,710		$     791,831		$          753,344
Common shares issued and outstanding	106,546,995		105,088,761		103,630,776		102,194,037		101,043,924
Tangible book value per common share	$              10.06		$                9.78		$           9.50		$           7.75		$                7.46

 

 

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SOURCE LendingClub Corporation

FAQ

What were LendingClub's total net revenue and growth for 2022?

LendingClub's total net revenue for 2022 was $1.2 billion, reflecting a 45% growth year over year.

How much did LendingClub's total assets increase in 2022?

LendingClub's total assets increased by 63% year over year to reach $8.0 billion.

What is LendingClub's expected loan origination range for Q1 2023?

For Q1 2023, LendingClub expects loan originations to be between $1.9 billion and $2.2 billion.

What was the change in LendingClub's marketplace revenue for 2022?

LendingClub's marketplace revenue decreased by 28% year over year, from $170.6 million to $123.4 million.

How did LendingClub's net interest income perform in 2022?

LendingClub's net interest income increased over 100% in 2022, totaling $474.8 million.