LendingClub Reports Fourth Quarter and Full Year 2023 Results

Rhea-AI Summary

LendingClub Corporation (NYSE: LC) reported a 21% increase in marketplace originations in the fourth quarter of 2023, with $1 billion of structured certificates sold. The company maintained GAAP profitability and strong capital levels, positioning itself for future growth. Total net revenue was $185.6 million, and the company's balance sheet showed growth in assets, deposits, and securities. Despite a decrease in net revenue, the company's financial performance remained stable with a net income of $10.2 million. LendingClub aims to capture the multi-billion-dollar refinance opportunity and deliver long-term shareholder value.

Insights

Financial Analyst

The reported increase in marketplace originations by 21% quarter-over-quarter is a significant indicator of LendingClub's growth trajectory in the competitive fintech sector. The sale of $1 billion in structured certificates suggests a robust demand for the company's financial products, which may enhance investor confidence. The strong capital and liquidity levels, evidenced by a consolidated Tier 1 leverage ratio of 12.9% and a Common Equity Tier 1 capital ratio of 17.9%, exceed typical regulatory requirements, which usually hover around 4-6% for Tier 1 and 4.5% for Common Equity Tier 1. This positions LendingClub well above the industry norm, providing a buffer against potential economic downturns.

However, a slight dip in total net revenue from $200.8 million to $185.6 million quarter-over-quarter, driven by a decrease in marketplace revenue and net interest income, reflects the challenges of a shifting asset mix and rising deposit funding costs. The efficiency ratio worsening from 63.7% to 70.0% also signals an increase in operating expenses relative to revenue, which may concern investors looking for operational efficiency improvements.

Market Research Analyst

The digital marketplace banking sector is becoming increasingly crowded, with fintech companies vying for market share through innovation and customer experience enhancements. LendingClub's focus on a multi-product mobile-first experience and the significant growth in deposits (almost 4X) aligns with the industry's shift towards digital banking solutions. The historic multi-billion-dollar refinance opportunity mentioned by the CEO indicates a strategic focus on capturing market share in a high-demand segment, which could be a long-term growth driver.

However, it's important to note the year-over-year decline in net income from $289.7 million to $38.9 million, which could raise questions about the sustainability of profitability amidst aggressive growth strategies. The company's performance in the upcoming quarters will be critical for stakeholders to assess the effectiveness of its business model in a dynamic financial environment.

Economist

LendingClub's sustained GAAP profitability throughout a turbulent macroeconomic environment may indicate a resilient business model, especially noteworthy given the broader fintech industry's struggles with profitability. The continued innovation and expansion into structured certificates, which are debt securities backed by loan pools, can be seen as a diversification strategy that leverages the company's data advantage. This move could potentially open up new revenue streams and mitigate risks associated with loan originations.

However, the macroeconomic outlook, including interest rate trends and economic growth projections, will be crucial in assessing the future performance of LendingClub's loan portfolios and the demand for its financial products. The company's ability to navigate these macroeconomic challenges while maintaining profitability and capital adequacy will be a key factor for long-term success.

Increased Marketplace Originations 21% QoQ with $1B of Structured Certificates Sold

Continued GAAP Profitability with Strong Capital & Liquidity Levels

SAN FRANCISCO, Jan. 30, 2024 /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, 2023.

"Thanks to our differentiated business model, strong execution, data advantage, and ongoing innovation, we have remained one of the few fintechs to sustain GAAP profitability throughout this turbulent macro environment, which positions us well for future acceleration," said Scott Sanborn, LendingClub CEO. "Since acquiring our bank charter three years ago, we have transformed our financial profile and business – tripling our balance sheet, building tangible book value by approximately 2X, growing deposits by almost 4X, and delivering 12 straight quarters of credit out performance. Furthermore, we continue to innovate with offerings like our structured certificates and we've made tangible progress towards a multi-product mobile-first experience. This foundation will enable us to capture the ongoing historic multi-billion-dollar refinance opportunity, engage our members in entirely new ways, and build long-term shareholder value." 

Fourth Quarter 2023 Results

Balance Sheet:

• Total assets of $8.8 billion compared to $8.5 billion in the prior quarter, primarily reflecting growth in securities related to the structured certificate program.
• Deposits of $7.3 billion compared to $7.0 billion in the prior quarter, primarily due to an increase in customer certificates of deposit.
  • FDIC-insured deposits represent approximately 87% of total deposits.
• Securities available for sale of $1.6 billion compared to $0.8 billion in the prior quarter, primarily reflecting growth in the structured certificate program.
• Loans and leases held for investment of $4.8 billion compared to $5.2 billion in the prior quarter as the Company grew the structured certificate and extended seasoning programs while retaining fewer held for investment loans.
• Strong capital position with a consolidated Tier 1 leverage ratio of 12.9% and consolidated Common Equity Tier 1 capital ratio of 17.9%.
• Book value per common share of $11.34 compared to $11.02 in the prior quarter.
• Tangible book value per common share of $10.54 compared to $10.21 in the prior quarter.

Financial Performance:

• Loan originations of $1.6 billion compared to $1.5 billion in the prior quarter as a result of increased purchases by loan investors; Marketplace originations of $1.4 billion grew 21% compared to the prior quarter.
• Total net revenue of $185.6 million compared to $200.8 million in the prior quarter driven by:
  • Marketplace revenue of $52.2 million compared to $60.9 million in the prior quarter, primarily reflecting a $10.4 million one-time benefit in the prior quarter related to recouping volume-based purchase incentives from the bank investor channel.
  • Net interest income of $131.5 million compared to $137.0 million in the prior quarter reflecting a shift in asset mix from held for investment loans to senior securities and higher deposit funding costs.
• Provision for credit losses of $41.9 million compared to $64.5 million in the prior quarter driven by lower volume of retained loans and lower incremental provision on older vintages.
• Net income of $10.2 million, or diluted EPS of $0.09, compared to $5.0 million, or diluted EPS of $0.05, in the prior quarter.
• Pre-provision net revenue (PPNR) of $55.6 million compared to $72.8 million in the prior quarter.
• Efficiency ratio of 70.0% compared to 63.7% in the prior quarter.

	Three Months Ended						Year Ended
($ in millions, except per share amounts)	December 31, 2023		September 30, 2023		December 31, 2022		December 31, 2023		December 31, 2022
Total net revenue	$             185.6		$               200.8		$             262.7		$             864.6		$          1,187.2
Non-interest expense	130.0		128.0		180.0		566.4		766.9
Pre-provision net revenue (1)	55.6		72.8		82.7		298.2		420.3
Provision for credit losses	41.9		64.5		61.5		243.6		267.3
Income before income tax benefit (expense)	13.7		8.3		21.2		54.6		153.0
Income tax benefit (expense)	(3.5)		(3.3)		2.4		(15.7)		136.6
Net income	$               10.2		$                   5.0		$               23.6		$               38.9		$             289.7
Diluted EPS	$               0.09		$                 0.05		$               0.22		$               0.36		$               2.79
Income tax benefit from release of tax valuation allowance	$                   —		$                     —		$                 3.2		$                   —		$             143.5
Net income excluding income tax benefit(1)(2)	$               10.2		$                   5.0		$               20.4		$               38.9		$             146.2
Diluted EPS excluding income tax benefit(1)(2)	$               0.09		$                 0.05		$               0.19		$               0.36		$               1.41

(1)	See page 3 of this release for additional information on our use of non-GAAP financial measures.
(2)	Fourth quarter of 2022 and the year ended December 31, 2022 exclude income tax benefit of $3.2 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

	First Quarter 2024
Loan Originations	$1.5B to $1.7B
Pre-Provision Net Revenue (PPNR)	$30M to $40M

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 $90 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 4.8 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 2023 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Tuesday, January 30, 2024. 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 (833) 470-1428, with Access Code 634284, 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 6, 2024, by calling +1 (929) 458-6194 or outside the U.S. +1 (866) 813-9403, with Access Code 705298. LendingClub has used, and intends to use, its investor relations website, blog (http://blog.lendingclub.com), X (formerly Twitter) handles (@LendingClub and @LendingClubIR) 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 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 borrowers and platform investors; competition; overall economic conditions; the interest rate environment; the regulatory environment; 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
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		Q/Q		Y/Y
Operating Highlights:
Non-interest income	$        54,129		$        63,844		$     85,818		$      98,990		$      127,465		(15) %		(58) %
Net interest income	131,477		137,005		146,652		146,704		135,243		(4) %		(3) %
Total net revenue	185,606		200,849		232,470		245,694		262,708		(8) %		(29) %
Non-interest expense	130,015		128,035		151,079		157,308		180,044		2 %		(28) %
Pre-provision net revenue(1)	55,591		72,814		81,391		88,386		82,664		(24) %		(33) %
Provision for credit losses	41,907		64,479		66,595		70,584		61,512		(35) %		(32) %
Income before income tax benefit (expense)	13,684		8,335		14,796		17,802		21,152		64 %		(35) %
Income tax benefit (expense)	(3,529)		(3,327)		(4,686)		(4,136)		2,439		6 %		(245) %
Net income	10,155		5,008		10,110		13,666		23,591		103 %		(57) %
Income tax benefit from release of tax valuation allowance	—		—		—		—		3,180		N/M		N/M
Net income excluding income tax benefit(1)(2)	$        10,155		$          5,008		$     10,110		$      13,666		$        20,411		103 %		(50) %
Basic EPS	$            0.09		$            0.05		$         0.09		$          0.13		$            0.22		80 %		(59) %
Diluted EPS	$            0.09		$            0.05		$         0.09		$          0.13		$            0.22		80 %		(59) %
Diluted EPS excluding income tax benefit(1)(2)	$            0.09		$            0.05		$         0.09		$          0.13		$            0.19		80 %		(53) %
LendingClub Corporation Performance Metrics:
Net interest margin	6.4 %		6.9 %		7.1 %		7.5 %		7.8 %
Efficiency ratio(3)	70.0 %		63.7 %		65.0 %		64.0 %		68.5 %
Return on average equity (ROE)(4)	3.3 %		1.7 %		3.4 %		4.6 %		7.2 %
Return on average total assets (ROA)(5)	0.5 %		0.2 %		0.5 %		0.7 %		1.1 %
Marketing expense as a % of loan originations	1.4 %		1.3 %		1.2 %		1.2 %		1.4 %
LendingClub Corporation Capital Metrics:
Common equity Tier 1 capital ratio	17.9 %		16.9 %		16.1 %		15.6 %		15.8 %
Tier 1 leverage ratio	12.9 %		13.2 %		12.4 %		12.8 %		14.1 %
Book value per common share	$          11.34		$          11.02		$       11.09		$        11.08		$          10.93		3 %		4 %
Tangible book value per common share(1)	$          10.54		$          10.21		$       10.26		$        10.23		$          10.06		3 %		5 %
Loan Originations (in millions)(6):
Total loan originations	$          1,630		$          1,508		$       2,011		$        2,288		$          2,524		8 %		(35) %
Marketplace loans	$          1,432		$          1,182		$       1,353		$        1,286		$          1,824		21 %		(21) %
Loan originations held for investment	$             198		$             326		$          657		$        1,002		$             701		(39) %		(72) %
Loan originations held for investment as a % of total loan originations	12 %		22 %		33 %		44 %		28 %
Servicing Portfolio AUM (in millions)(7):
Total servicing portfolio	$         14,122		$         14,818		$      15,669		$       16,060		$         16,157		(5) %		(13) %
Loans serviced for others	$           9,336		$           9,601		$      10,204		$       10,504		$         10,819		(3) %		(14) %

 

LENDINGCLUB CORPORATION OPERATING HIGHLIGHTS (Continued) (In thousands, except percentages or as noted) (Unaudited)
Balance Sheet Data:
Loans and leases held for investment at amortized cost, net, excluding PPP loans	$   4,533,523		$   4,879,222		$  5,160,546		$ 5,091,969		$   4,638,331		(7) %		(2) %
PPP loans	$          6,392		$          7,560		$       17,640		$      51,112		$        66,971		(15) %		(90) %
Total loans and leases held for investment at amortized cost, net(8)	$   4,539,915		$   4,886,782		$  5,178,186		$ 5,143,081		$   4,705,302		(7) %		(4) %
Loans held for investment at fair value	$      262,190		$      326,299		$     404,119		$    748,618		$      925,938		(20) %		(72) %
Total loans and leases held for investment	$   4,802,105		$   5,213,081		$  5,582,305		$ 5,891,699		$   5,631,240		(8) %		(15) %
Total assets	$   8,827,463		$   8,472,351		$  8,342,506		$ 8,754,018		$   7,979,747		4 %		11 %
Total deposits	$   7,333,486		$   7,000,263		$  6,843,535		$ 7,218,854		$   6,392,553		5 %		15 %
Total liabilities	$   7,575,641		$   7,264,132		$  7,136,983		$ 7,563,276		$   6,815,453		4 %		11 %
Total equity	$   1,251,822		$   1,208,219		$  1,205,523		$ 1,190,742		$   1,164,294		4 %		8 %

N/M – Not meaningful
(1)	Represents a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures."
(2)	Excludes fourth quarter 2022 income tax benefit of $3.2 million 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
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Asset Quality Metrics:
Allowance for loan and lease losses to total loans and leases held for investment	6.7 %		6.7 %		6.4 %		6.4 %		6.5 %
Allowance for loan and lease losses to consumer loans and leases held for investment	7.2 %		7.4 %		7.1 %		7.1 %		7.3 %
Allowance for loan and lease losses to commercial loans and leases held for investment	1.8 %		2.0 %		1.9 %		2.0 %		2.0 %
Net charge-offs	$          82,511		$          68,795		$          59,884		$          49,845		$          37,148
Net charge-off ratio(1)	6.6 %		5.1 %		4.4 %		3.8 %		3.0 %

(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, 2023		December 31, 2022
Unsecured personal	$       3,726,830		$       3,866,373
Residential mortgages	183,050		199,601
Secured consumer	250,039		194,634
Total consumer loans held for investment	4,159,919		4,260,608
Equipment finance (1)	110,992		160,319
Commercial real estate	380,322		373,501
Commercial and industrial (2)	199,069		238,726
Total commercial loans and leases held for investment	690,383		772,546
Total loans and leases held for investment at amortized cost	4,850,302		5,033,154
Allowance for loan and lease losses	(310,387)		(327,852)
Loans and leases held for investment at amortized cost, net	$       4,539,915		$       4,705,302
Loans held for investment at fair value	262,190		925,938
Total loans and leases held for investment	$       4,802,105		$       5,631,240

(1)	Comprised of sales-type leases for equipment.
(2)	Includes $6.4 million and $67.0 million of Paycheck Protection Program (PPP) loans as of December 31, 2023 and 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
	December 31, 2023						September 30, 2023
	Consumer		Commercial		Total		Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$    336,288		$        14,207		$ 350,495		$    341,161		$        14,002		$ 355,163
Credit loss expense for loans and leases held for investment	43,227		(824)		42,403		63,733		394		64,127
Charge-offs	(88,904)		(1,193)		(90,097)		(73,644)		(534)		(74,178)
Recoveries	7,450		136		7,586		5,038		345		5,383
Allowance for loan and lease losses, end of period	$    298,061		$        12,326		$ 310,387		$    336,288		$        14,207		$ 350,495

 

LENDINGCLUB CORPORATION PAST DUE LOANS AND LEASES HELD FOR INVESTMENT (In thousands) (Unaudited)
	Three Months Ended
	December 31, 2022
	Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$    288,138		$        15,063		$ 303,201
Credit loss expense for loans and leases held for investment	61,392		407		61,799
Charge-offs	(38,579)		(225)		(38,804)
Recoveries	1,538		118		1,656
Allowance for loan and lease losses, end of period	$    312,489		$        15,363		$ 327,852

 

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, 2023	30-59 Days		60-89 Days		90 or More Days		Total Days Past Due
Unsecured personal	$      32,716		$      29,556		$       30,132		$             92,404
Residential mortgages	1,751		—		—		1,751
Secured consumer	2,076		635		217		2,928
Total consumer loans held for investment	$      36,543		$      30,191		$       30,349		$             97,083
Equipment finance	$        1,265		$             —		$              —		$               1,265
Commercial real estate	—		3,566		1,618		5,184
Commercial and industrial (1)	12,261		1,632		1,515		15,408
Total commercial loans and leases held for investment (1)	$      13,526		$        5,198		$        3,133		$             21,857
Total loans and leases held for investment at amortized cost (1)	$      50,069		$      35,389		$      33,482		$           118,940

 

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 (%)
	December 31, 2023		September 30, 2023		December 31, 2022		Q4 2023 vs Q3 2023		Q4 2023 vs Q4 2022
Non-interest income:
Origination fees	$         76,702		$          60,912		$       100,692		26 %		(24) %
Servicing fees	17,450		32,768		20,169		(47) %		(13) %
Gain on sales of loans	11,921		8,572		18,352		39 %		(35) %
Net fair value adjustments	(53,892)		(41,366)		(15,774)		30 %		242 %
Marketplace revenue	52,181		60,886		123,439		(14) %		(58) %
Other non-interest income	1,948		2,958		4,026		(34) %		(52) %
Total non-interest income	54,129		63,844		127,465		(15) %		(58) %
Total interest income	208,319		207,412		173,999		— %		20 %
Total interest expense	76,842		70,407		38,756		9 %		98 %
Net interest income	131,477		137,005		135,243		(4) %		(3) %
Total net revenue	185,606		200,849		262,708		(8) %		(29) %
Provision for credit losses	41,907		64,479		61,512		(35) %		(32) %
Non-interest expense:
Compensation and benefits	58,591		58,497		87,768		— %		(33) %
Marketing	23,465		19,555		35,139		20 %		(33) %
Equipment and software	13,190		12,631		13,200		4 %		— %
Depreciation and amortization	11,953		11,250		11,554		6 %		3 %
Professional services	7,727		8,414		10,029		(8) %		(23) %
Occupancy	3,926		4,612		4,698		(15) %		(16) %
Other non-interest expense	11,163		13,076		17,656		(15) %		(37) %
Total non-interest expense	130,015		128,035		180,044		2 %		(28) %
Income before income tax benefit (expense)	13,684		8,335		21,152		64 %		(35) %
Income tax benefit (expense)	(3,529)		(3,327)		2,439		6 %		(245) %
Net income	$         10,155		$            5,008		$         23,591		103 %		(57) %
Net income per share:
Basic EPS	$             0.09		$              0.05		$             0.22		80 %		(59) %
Diluted EPS	$             0.09		$              0.05		$             0.22		80 %		(59) %
Weighted-average common shares – Basic	109,948,785		109,071,180		105,650,177		1 %		4 %
Weighted-average common shares – Diluted	109,949,371		109,073,194		105,984,612		1 %		4 %

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued) (In thousands, except share and per share data) (Unaudited)
	Year Ended December 31,
	2023		2022		Change (%)
Non-interest income:
Origination fees	$       279,146		$        499,179		(44) %
Servicing fees	98,613		80,609		22 %
Gain on sales of loans	47,839		95,335		(50) %
Net fair value adjustments	(134,114)		8,503		N/M
Marketplace revenue	291,484		683,626		(57) %
Other non-interest income	11,297		28,765		(61) %
Total non-interest income	302,781		712,391		(57) %
Total interest income	832,630		557,340		49 %
Total interest expense	270,792		82,515		228 %
Net interest income	561,838		474,825		18 %
Total net revenue	864,619		1,187,216		(27) %
Provision for credit losses	243,565		267,326		(9) %
Non-interest expense:
Compensation and benefits	261,948		339,397		(23) %
Marketing	93,840		197,747		(53) %
Equipment and software	53,485		49,198		9 %
Depreciation and amortization	47,195		43,831		8 %
Professional services	35,173		50,516		(30) %
Occupancy	17,532		21,977		(20) %
Other non-interest expense	57,264		64,187		(11) %
Total non-interest expense	566,437		766,853		(26) %
Income before income tax benefit (expense)	54,617		153,037		(64) %
Income tax benefit (expense)	(15,678)		136,648		(111) %
Net income	$         38,939		$        289,685		(87) %
Net income per share:
Basic EPS	$             0.36		$              2.80		(87) %
Diluted EPS	$             0.36		$              2.79		(87) %
Weighted-average common shares – Basic	108,466,179		103,547,305		5 %
Weighted-average common shares – Diluted	108,468,857		104,001,288		4 %

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, 2023						Three Months Ended September 30, 2023						Three Months Ended December 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	$ 1,190,539		$  16,271		5.47 %		$ 1,249,087		$   16,798		5.38 %		$ 1,139,887		$  10,595		3.72 %
Securities available for sale at fair value	1,197,625		20,920		6.99 %		601,512		9,467		6.30 %		349,512		3,359		3.84 %
Loans held for sale at fair value	501,850		15,883		12.66 %		286,111		9,582		13.40 %		114,851		5,724		19.93 %
Loans and leases held for investment:
Unsecured personal loans	3,890,041		128,190		13.18 %		4,257,360		142,118		13.35 %		3,825,808		125,872		13.16 %
Commercial and other consumer loans	1,126,010		17,033		6.05 %		1,147,130		16,842		5.87 %		1,164,326		15,197		5.22 %
Loans and leases held for investment at amortized cost	5,016,051		145,223		11.58 %		5,404,490		158,960		11.76 %		4,990,134		141,069		11.31 %
Loans held for investment at fair value	292,101		9,494		13.00 %		362,837		11,788		13.00 %		308,570		10,862		14.08 %
Total loans and leases held for investment	5,308,152		154,717		11.66 %		5,767,327		170,748		11.84 %		5,298,704		151,931		11.47 %
Retail and certificate loans held for investment at fair value	14,535		528		14.54 %		22,311		817		14.65 %		66,469		2,390		14.38 %
Total interest-earning assets	8,212,701		208,319		10.15 %		7,926,348		207,412		10.47 %		6,969,423		173,999		9.99 %
Cash and due from banks and restricted cash	63,181						69,442						64,907
Allowance for loan and lease losses	(334,711)						(354,263)						(314,861)
Other non-interest earning assets	659,995						691,641						613,664
Total assets	$ 8,601,166						$ 8,333,168						$ 7,333,133
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$ 1,081,875		$    9,593		3.52 %		$ 1,271,720		$     9,541		2.98 %		$ 1,929,260		$    7,500		1.54 %
Savings accounts and certificates of deposit	5,720,058		66,660		4.62 %		5,357,717		59,968		4.44 %		3,576,205		28,251		3.13 %
Interest-bearing deposits	6,801,933		76,253		4.45 %		6,629,437		69,509		4.16 %		5,505,465		35,751		2.58 %
Retail notes and certificates	14,535		528		14.54 %		22,311		817		14.65 %		66,469		2,390		14.38 %
Other interest-bearing liabilities	9,645		61		2.51 %		13,567		81		2.42 %		105,834		615		2.33 %
Total interest-bearing liabilities	6,826,113		76,842		4.47 %		6,665,315		70,407		4.19 %		5,677,768		38,756		2.71 %
Non-interest bearing deposits	314,822						183,728						251,686
Other liabilities	238,806						271,118						266,558
Total liabilities	$ 7,379,741						$ 7,120,161						$ 6,196,012
Total equity	$ 1,221,425						$ 1,213,007						$ 1,137,121
Total liabilities and equity	$ 8,601,166						$ 8,333,168						$ 7,333,133
Interest rate spread					5.68 %						6.28 %						7.28 %
Net interest income and net interest margin			$  131,477		6.40 %				$ 137,005		6.91 %				$  135,243		7.76 %

(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)
	December 31, 2023		December 31, 2022
Assets
Cash and due from banks	$            14,993		$         23,125
Interest-bearing deposits in banks	1,237,511		1,033,905
Total cash and cash equivalents	1,252,504		1,057,030
Restricted cash	41,644		67,454
Securities available for sale at fair value ($1,663,990 and $399,668 at amortized cost, respectively)	1,620,262		345,702
Loans held for sale at fair value	407,773		110,400
Loans and leases held for investment	4,850,302		5,033,154
Allowance for loan and lease losses	(310,387)		(327,852)
Loans and leases held for investment, net	4,539,915		4,705,302
Loans held for investment at fair value	262,190		925,938
Retail and certificate loans held for investment at fair value	10,488		55,425
Property, equipment and software, net	161,517		136,473
Goodwill	75,717		75,717
Other assets	455,453		500,306
Total assets	$        8,827,463		$     7,979,747
Liabilities and Equity
Deposits:
Interest-bearing	$        7,001,680		$     6,158,560
Noninterest-bearing	331,806		233,993
Total deposits	7,333,486		6,392,553
Borrowings	8,866		74,858
Retail notes and certificates at fair value	10,488		55,425
Other liabilities	222,801		292,617
Total liabilities	7,575,641		6,815,453
Equity
Common stock, $0.01 par value; 180,000,000 shares authorized; 110,410,602 and 106,546,995 shares issued and outstanding, respectively	1,104		1,065
Additional paid-in capital	1,669,828		1,628,590
Accumulated deficit	(388,806)		(427,745)
Accumulated other comprehensive loss	(30,304)		(37,616)
Total equity	1,251,822		1,164,294
Total liabilities and equity	$        8,827,463		$     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										For the year ended
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		December 31, 2023		December 31, 2022
GAAP Net income	$          10,155		$             5,008		$      10,110		$       13,666		$          23,591		$          38,939		$        289,685
Less: Provision for credit losses	(41,907)		(64,479)		(66,595)		(70,584)		(61,512)		(243,565)		(267,326)
Less: Income tax benefit (expense)	(3,529)		(3,327)		(4,686)		(4,136)		2,439		(15,678)		136,648
Pre-provision net revenue	$          55,591		$           72,814		$      81,391		$       88,386		$          82,664		$        298,182		$        420,363

 

	For the three months ended										For the year ended
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		December 31, 2023		December 31, 2022
Non-interest income	$          54,129		$           63,844		$     85,818		$       98,990		$        127,465		$        302,781		$        712,391
Net interest income	131,477		137,005		146,652		146,704		135,243		561,838		474,825
Total net revenue	185,606		200,849		232,470		245,694		262,708		864,619		1,187,216
Non-interest expense	(130,015)		(128,035)		(151,079)		(157,308)		(180,044)		(566,437)		(766,853)
Pre-provision net revenue	55,591		72,814		81,391		88,386		82,664		298,182		420,363
Provision for credit losses	(41,907)		(64,479)		(66,595)		(70,584)		(61,512)		(243,565)		(267,326)
Income before income tax benefit (expense)	13,684		8,335		14,796		17,802		21,152		54,617		153,037
Income tax benefit (expense)	(3,529)		(3,327)		(4,686)		(4,136)		2,439		(15,678)		136,648
GAAP Net income	$          10,155		$             5,008		$     10,110		$       13,666		$          23,591		$          38,939		$        289,685

 

Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit
		For the three months ended December 31, 2022		For the year ended December 31, 2022
GAAP Net income		$                                       23,591		$                      289,685
Less: Income tax benefit from release of tax valuation allowance		3,180		143,495
Net income excluding income tax benefit		$                                       20,411		$                      146,190
GAAP Diluted EPS		$                                           0.22		$                            2.79
(A)	Income tax benefit from release of tax valuation allowance	$                                         3,180		$                      143,495
(B)	Weighted-average common shares – Diluted	105,984,612		104,001,288
(A/B)	Diluted EPS impact of income tax benefit	$                                           0.03		$                            1.38
Diluted EPS excluding income tax benefit		$                                           0.19		$                            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, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
GAAP common equity	$       1,251,822		$        1,208,219		$    1,205,523		$    1,190,742		$      1,164,294
Less: Goodwill	(75,717)		(75,717)		(75,717)		(75,717)		(75,717)
Less: Intangible assets	(12,135)		(13,151)		(14,167)		(15,201)		(16,334)
Tangible common equity	$       1,163,970		$        1,119,351		$    1,115,639		$    1,099,824		$      1,072,243
Book value per common share
GAAP common equity	$       1,251,822		$        1,208,219		$    1,205,523		$    1,190,742		$      1,164,294
Common shares issued and outstanding	110,410,602		109,648,769		108,694,120		107,460,734		106,546,995
Book value per common share	$              11.34		$               11.02		$           11.09		$           11.08		$             10.93
Tangible book value per common share
Tangible common equity	$       1,163,970		$        1,119,351		$    1,115,639		$    1,099,824		$      1,072,243
Common shares issued and outstanding	110,410,602		109,648,769		108,694,120		107,460,734		106,546,995
Tangible book value per common share	$              10.54		$               10.21		$           10.26		$           10.23		$             10.06

 

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SOURCE LendingClub Corporation

FAQ

What was LendingClub's (LC) marketplace originations growth in Q4 2023?

LendingClub reported a 21% increase in marketplace originations in the fourth quarter of 2023, totaling $1.4 billion.

What was the total net revenue for LendingClub in Q4 2023?

LendingClub's total net revenue in the fourth quarter of 2023 was $185.6 million.

What was LendingClub's net income in Q4 2023?

LendingClub's net income in the fourth quarter of 2023 was $10.2 million.

What is LendingClub's financial outlook for Q1 2024?

LendingClub's financial outlook for the first quarter of 2024 includes loan originations of $1.5B to $1.7B and a pre-provision net revenue (PPNR) of $30M to $40M.