LendingClub Reports Second Quarter 2021 Results

Rhea-AI Summary

LendingClub Corporation (NYSE: LC) reported record financial results for Q2 2021, marking its most profitable quarter ever since operating as a digital bank. The company achieved a 93% sequential revenue growth, driven by an 86% rise in marketplace revenue and a 148% increase in net interest income, totaling $45.9 million. Loan originations reached $2.72 billion, while consolidated net income surged to $9.4 million. The outlook for 2021 is optimistic, with revised targets raising loan origination estimates to between $9.8 billion to $10.2 billion.

Positive

• 93% sequential revenue growth
• Record net income of $9.4 million
• 148% growth in net interest income to $45.9 million
• Loan originations reached $2.72 billion
• Raising full year targets for loan originations to $9.8 to $10.2 billion
• Effective execution on strategic priorities

Negative

• Consolidated net income impacted by $56.7 million of notable items
• Provision for credit losses resulted in $34.6 million deduction from earnings

SAN FRANCISCO, July 28, 2021 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the second quarter ended June 30, 2021.

"Our first full quarter operating a digital bank was the most profitable quarter in LendingClub's history," said Scott Sanborn, LendingClub's CEO. "This is the beginning of a dramatically enhanced earnings trajectory for the business. Our transformation is fueled by our competitive advantages, which include our 3.5 million-plus members, deep data capabilities, marketplace model as well as our more efficient operating platform. Our earnings are being bolstered by our bank, which is generating a new stream of recurring net interest income that is only beginning to contribute to our bottom line results."

Strong Revenue Growth and Accelerated Return to Profitability Reflects Effective Execution on Strategic Priorities.

• Total sequential revenue growth of 93%, reflecting growth in marketplace revenue and increased net interest income from the retained portfolio of consumer loans.
• Marketplace revenue grew 86% sequentially, primarily reflecting 105% growth in origination fees and a 132% increase in gains on loan sales as loans sold through the marketplace doubled.
• Net interest income grew 148% sequentially to $45.9 million, as the bank's loan portfolio (excluding PPP loans) grew 27% sequentially, propelled by growth in the consumer loan portfolio of 145% to $795M.
• Deposits grew to $2.5 billion, helping fund growth in the bank's loan portfolio.
• Sequential origination growth of 84% as we returned to market leadership and leveraged our expanded predictive science and credit decisioning capabilities, which drove a substantial increase in our end-to-end application conversion rate.
• Strong revenue growth and positive operating leverage drove record earnings and an accelerated return to profitability.
• Consolidated net income of $9.4 million included $56.7 million of notable items: $34.6 million of Current Expected Credit Loss (CECL) provisioning which reduced reported earnings and reflects rapid growth in the bank's loan portfolio, $19.6 million of net revenue deferrals on retained loans, and $2.5 million of non-recurring expenses.
• Entered into a settlement agreement with the Federal Trade Commission (FTC), which concludes the agency's previously disclosed investigation and litigation. Pursuant to the terms of the settlement, LendingClub will make an $18 million payment for consumer remediation, an amount already accrued for in prior periods.

	Three Months Ended
($ in millions)	June 30, 2021				March 31, 2021				QoQ Change
Loan originations(1)	$	2,722.4			$	1,483.2			$	1,239.2
Total revenue	$	204.4			$	105.8			$	98.6
Consolidated net income (loss)	$	9.4			$	(47.1)			$	56.5

(1)	Includes unsecured personal loans, auto loans, and education and patient finance loans only.

 

Financial Outlook – Raising Full Year Targets
(millions)	Third Quarter 2021	Full Year 2021	Versus Prior Full Year 2021 Guidance
Loan originations(1)	$2.8B to $3.0B	$9.8B to $10.2B	+$2.9B to +$3.0B
Total revenue	$215M to $230M	$750M to $780M	+$240M to +$250M
Consolidated net income (loss)	$10M to $15M	($13M) to ($3M)	+$139M to +$154M

(1)	Includes unsecured personal loans, auto loans, and education and patient finance loans only.

 

Items Impacting Q2'21 Consolidated Net Income
(millions)	Consolidated Net Income Impact	Per Diluted Share Impact	Commentary
Revenue deferrals, net of amortization	$(19.6)	$0.19	Revenue deferrals, net of deferred costs and amortization during the period
Provision for credit losses	$(34.6)	$0.34	Primarily for consumer loans originated and retained in the quarter
Non-recurring expenses	$(2.5)	$0.02	Non-recurring expenses primarily related to the acquisition of Radius Bank
Total	$(56.7)	$0.56

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 US. Members can gain access to a broad range of financial products and services through a technology-driven platform, designed to help them pay less when borrowing and earn more when saving. Since 2007, more than 3 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 second quarter 2021 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, July 28, 2021. 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 (888) 317-6003, or outside the U.S. +1 (412) 317-6061, with conference ID 4824215, 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 August 4, 2021, by calling +1 (877) 344-7529 or outside the U.S. +1 (412) 317-0088, with Conference ID 10158362. 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

Safe Harbor Statement
Some of the statements above, including statements regarding the benefits of our bank acquisition, 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; competition; overall economic conditions; 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 Quarterly Report on Form 10-Q and Annual Report on Form 10-K, each as filed with the Securities and Exchange Commission, as well as our subsequent reports on Form 10-Q and 10-K each as filed 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)
The information in the following tables is presented for the consolidated LendingClub Corporation, unless specifically noted for LendingClub Bank, the company's wholly-owned subsidiary:
	As of and for the three months ended																				% Change
	June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020				June 30, 2020				Q/Q			Y/Y
Operating Highlights:
Noninterest income	$	158,476			$	87,334			$	72,597			$	57,750			$	21,421			81	%		640	%
Net interest income	$	45,905			$	18,506			$	2,899			$	13,294			18,937				148	%		142	%
Total net revenue (1)	$	204,381			$	105,840			$	75,496			$	71,044			$	40,358			93	%		406	%
Consolidated net income (loss)	$	9,371			$	(47,084)			$	(26,655)			$	(34,325)			$	(78,471)			N/M			N/M
EPS – basic	$	0.10			$	(0.49)			$	(0.29)			$	(0.38)			$	(0.87)			N/M			N/M
EPS – diluted	$	0.09			$	(0.49)			$	(0.29)			$	(0.38)			$	(0.87)			N/M			N/M
LendingClub Bank net interest margin	5.51		%		3.33		%		N/A				N/A				N/A
Servicing portfolio AUM
(in millions) (2)	$	10,741			$	10,271			$	11,002			$	12,267			$	13,962			5	%		(23)	%
Loan originations (in millions) (3):
Marketplace loans	$	2,182			$	1,139			$	912			$	584			$	326			92	%		569	%
Loan originations held for investment	$	541			$	344			$	—			$	—			$	—			57	%		N/M
Total loan originations	$	2,722			$	1,483			$	912			$	584			$	326			84	%		735	%
Balance Sheet Data:
Loans and leases held for investment, net, excluding PPP loans	$	1,791,492			$	1,414,900			$	—			$	—			$	—			27	%		N/M
PPP loans	$	507,553			$	664,400			$	—			$	—			$	—			(24)	%		N/M
Total loans and leases held for investment, net	$	2,299,045			$	2,079,300			$	—			$	—			$	—			11	%		N/M
Total assets	$	4,370,101			$	4,491,089			$	1,863,293			$	1,979,457			$	2,452,599			(3)	%		78	%
Total deposits	$	2,539,704			$	2,373,437			$	—			$	—			$	—			7	%		N/M
Total liabilities	$	3,607,742			$	3,757,954			$	1,139,122			$	1,245,565			$	1,706,457			(4)	%		111	%
Total equity	$	762,359			$	733,135			$	724,171			$	733,892			$	746,142			4	%		2	%
Asset Quality Ratios:
Allowance for loan and lease losses to loans and leases held for investment	3.00		%		1.71		%		N/A				N/A				N/A
Allowance for loan and lease losses to loans and leases held for investment, excluding PPP loans	3.82		%		2.49		%		N/A				N/A				N/A
Allowance for loan and lease losses to nonaccruing loans and leases held for investment	417.78		%		302.69		%		N/A				N/A				N/A
Nonaccruing loans and leases to loans and leases held for investment	0.72		%		0.56		%		N/A				N/A				N/A
Nonaccruing loans and leases to loans and leases held for investment, excluding PPP loans	0.91		%		0.82		%		N/A				N/A				N/A
LendingClub Bank Capital Ratios:
Common Equity Tier 1 Capital Ratio	18.7		%		20.9		%		N/A				N/A				N/A
Tier 1 Leverage Ratio	13.5		%		12.9		%		N/A				N/A				N/A

N/M – Not meaningful
N/A – Not applicable
(1)	Prior period total net revenue balances have been recast related to credit valuation adjustments on securities available for sale being reclassified from net fair value adjustments to provision for credit losses.
(2)	Includes unsecured personal loans and auto loans only.
(3)	Includes unsecured personal loans, auto loans, and education and patient finance loans only.

 

LENDINGCLUB CORPORATION
LOANS AND LEASES HELD FOR INVESTMENT
(In thousands, except percentages or as noted)
(Unaudited)
	June 30, 2021				March 31, 2021
Unsecured personal	$	776,338			$	321,104
Residential mortgages	152,528				164,002
Secured consumer	326,318				387,244
Other consumer	157				34
Total consumer loans held for investment	1,255,341				872,384
Equipment finance (1)	161,465				145,885
Commercial real estate	294,954				302,445
Commercial and industrial (2)	658,366				794,718
Total commercial loans and leases held for investment	1,114,785				1,243,048
Total loans and leases held for investment	2,370,126				2,115,432
Allowance for loan and lease losses	(71,081)				(36,132)
Loans and leases held for investment, net	$	2,299,045			$	2,079,300

(1)	Comprised of sales-type leases for equipment.
(2)	Includes $507.6 million of Paycheck Protection Program (PPP) loans. The Company determined no allowance for expected credit losses is needed on these loans.

 

LENDINGCLUB CORPORATION
ALLOWANCE FOR LOAN AND LEASE LOSSES
(In thousands, except percentages or as noted)
(Unaudited)
	Three Months Ended
	June 30, 2021												March 31, 2021
	Consumer				Commercial				Total				Consumer				Commercial				Total
Allowance for loan and lease losses, beginning of period	$	19,785			$	16,347			$	36,132			$	—			$	—			$	—
Credit loss expense for loans and leases held for investment	34,317				659				34,976				19,182				4,371				23,553
Initial allowance for PCD loans acquired during the period	—				—				—				603				11,837				12,440
Charge-offs	(90)				(156)				(246)				—				—				—
Recoveries	46				173				219				—				139				139
Allowance for loan and lease losses, end of period	$	54,058			$	17,023			$	71,081			$	19,785			$	16,347			$	36,132

 

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited)
	Three Months Ended
	June 30,				March 31,
	2021				2021				Change (%)
Non-interest income:
Marketplace revenue (1)	$	151,735			$	81,727			86	%
Other non-interest income	6,741				5,607				20	%
Total non-interest income	158,476				87,334				81	%
Interest income:
Interest on loans held for sale	8,694				5,157				69	%
Interest and fees on loans and leases held for investment	39,068				15,301				155	%
Interest on retail and certificate loans held for investment at fair value	16,014				20,262				(21)	%
Interest on other loans held for investment at fair value	1,222				1,479				(17)	%
Interest on securities available for sale	2,539				2,235				14	%
Other interest income	190				156				22	%
Total interest income	67,727				44,590				52	%
Interest expense:
Interest on deposits	1,699				1,014				68	%
Interest on short-term borrowings	1,003				1,264				(21)	%
Interest on retail notes, certificates and secured borrowings	16,014				20,262				(21)	%
Interest on Structured Program borrowings	2,668				3,208				(17)	%
Interest on other long-term debt	438				336				30	%
Total interest expense	21,822				26,084				(16)	%
Net interest income	45,905				18,506				148	%
Total net revenue	204,381				105,840				93	%
Provision for credit losses	34,634				21,493				61	%
Non-interest expense:
Compensation and benefits	71,925				64,420				12	%
Marketing	35,107				19,545				80	%
Equipment and software	9,281				7,893				18	%
Occupancy	6,157				6,900				(11)	%
Depreciation and amortization	11,508				11,766				(2)	%
Professional services	11,520				11,603				(1)	%
Other non-interest expense	14,641				12,125				21	%
Total non-interest expense	160,139				134,252				19	%
Income (Loss) before income tax expense	9,608				(49,905)				N/M
Income tax expense (benefit)	237				(2,821)				N/M
Consolidated net income (loss)	$	9,371			$	(47,084)			N/M
Net income (loss) per share attributable to common stockholders – Basic	$	0.10			$	(0.49)
Net income (loss) per share attributable to common stockholders – Diluted	$	0.09			$	(0.49)
Weighted-average common shares – Basic	97,785,089				92,666,169
Weighted-average common shares – Diluted	102,031,088				92,666,169
Net income (loss) per share attributable to preferred stockholders – Basic and Diluted	$	—			$	(0.49)
Weighted-average common shares, as converted – Basic and Diluted	—				2,648,758

N/M	– Not meaningful
(1)	Marketplace revenue consists of the following:

	Three Months Ended
	June 30, 2021				March 31, 2021				Change (%)
Origination fees	$	113,802			$	55,559			105	%
Servicing fees	22,714				23,166				(2)	%
Gain on sales of loans	19,317				8,323				132	%
Net fair value adjustments	(4,098)				(5,321)				(23)	%
Total marketplace revenue	$	151,735			$	81,727			86	%

 

LENDINGCLUB CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT
(In thousands, except share and per share data)
(Unaudited)
	Three Months Ended June 30, 2021
	LendingClub Corporation (Parent only)				LendingClub Bank				Intercompany Eliminations				Total
Non-interest income:
Marketplace revenue	$	23,021			$	128,714			$	—			$	151,735
Other non-interest income	4,281				28,340				(25,880)				6,741
Total non-interest income	27,302				157,054				(25,880)				158,476
Interest income:
Interest income	22,402				45,325				—				67,727
Interest expense	(19,850)				(1,972)				—				(21,822)
Net interest income	2,552				43,353				—				45,905
Total net revenue	29,854				200,407				(25,880)				204,381
Reversal of (provision for) credit losses	322				(34,956)				—				(34,634)
Non-interest expense	(47,837)				(138,182)				25,880				(160,139)
Income (Loss) before income tax benefit (expense)	(17,661)				27,269				—				9,608
Income tax benefit (expense)	8,922				12,513				(21,672)				(237)
Consolidated net income (loss)	$	(8,739)			$	39,782			$	(21,672)			$	9,371

 

	Three Months Ended March 31, 2021
	LendingClub Corporation (Parent only)				LendingClub Bank (1)				Intercompany Eliminations				Total
Non-interest income:
Marketplace revenue	$	45,665			$	36,062			$	—			$	81,727
Other non-interest income	4,098				19,700				(18,191)				5,607
Total non-interest income	49,763				55,762				(18,191)				87,334
Interest income:
Interest income	27,092				17,498				—				44,590
Interest expense	(24,837)				(1,247)				—				(26,084)
Net interest income	2,255				16,251				—				18,506
Total net revenue	52,018				72,013				(18,191)				105,840
Reversal of (provision for) credit losses	2,470				(23,963)				—				(21,493)
Non-interest expense	(76,944)				(75,499)				18,191				(134,252)
Loss before income tax benefit	(22,456)				(27,449)				—				(49,905)
Income tax benefit	2,292				23				506				2,821
Consolidated net loss	$	(20,164)			$	(27,426)			$	506			$	(47,084)

(1)	For the two month period from February 1, 2021 through March 31, 2021, for LendingClub Bank.

 

LENDINGCLUB BANK NET INTEREST INCOME (In thousands, except percentages or as noted) (Unaudited)
	LendingClub Bank
	Three Months Ended June 30, 2021											Two Months Ended March 31, 2021(1)
	Average Balance				Interest Income/ Expense				Average Yield/ Rate			Average Balance				Interest Income/ Expense				Average Yield/ Rate
Interest-earning assets (2)
Cash, cash equivalents and restricted cash	$	551,895			$	186			0.13	%		$	737,555			$	138			0.11	%
Securities available for sale at fair value	165,579				348				0.84	%		232,001				444				1.15	%
Loans held for sale	144,037				5,723				15.89	%		64,720				1,615				14.97	%
Loans and leases held for investment:
Unsecured personal loans	511,787				19,499				15.24	%		146,925				3,392				13.85	%
Secured consumer loans	532,426				5,173				3.89	%		521,399				3,215				3.70	%
Commercial loans and leases	623,735				9,062				5.81	%		605,495				5,119				5.07	%
PPP loans	615,942				5,334				3.46	%		621,292				3,575				3.45	%
Loans and leases held for investment	2,283,890				39,068				6.84	%		1,895,111				15,301				4.84	%
Total interest-earning assets	3,145,401				45,325				5.76	%		2,929,387				17,498				3.58	%
Cash and due from banks	34,612											42,683
Allowance for loan and lease losses	(51,109)											(30,357)
Other non-interest earning assets	221,870											187,785
Total assets	$	3,350,774										$	3,129,498
Interest-bearing liabilities
Interest-bearing deposits
Checking and money market accounts	$	2,071,112			$	1,618			0.31	%		$	1,735,274			$	913			0.33	%
Savings accounts and certificates of deposit	301,939				81				0.11	%		323,800				101				0.19	%
Interest-bearing deposits	2,373,051				1,699				0.29	%		2,059,074				1,014				0.30	%
Short-term borrowings	2,138				1				0.06	%		1,829				0.3				0.09	%
Advances from PPPLF	312,168				272				0.35	%		405,989				233				0.35	%
Other long-term debt	708				—				—	%		2,834				—				—	%
Total interest-bearing liabilities	2,688,065				1,972				0.29	%		2,469,726				1,247				0.31	%
Non-interest bearing deposits	102,709											156,034
Other liabilities	100,835											68,510
Total liabilities	$	2,891,609										$	2,694,270
Total equity	$	459,165										$	435,228
Total liabilities and equity	$	3,350,774										$	3,129,498
Interest rate spread									5.47	%										3.27	%
Net interest income and net interest margin					$	43,353			5.51	%						$	16,251			3.33	%

(1)	Prior period amounts have been reclassified to include non-interest earning assets, non-interest bearing liabilities and equity to conform to current period presentation.
(2)	Nonaccrual loans and any related income are included in their respective loan categories.

 

 

LENDINGCLUB CORPORATION NET INTEREST INCOME (Continued) (In thousands, except percentages or as noted) (Unaudited)
	Three Months Ended June 30, 2021
	LendingClub Bank											LendingClub Corporation (Parent only)											Consolidated LendingClub Corporation(1)
	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 and restricted cash	$	551,895			$	186			0.13	%		$	99,419			$	4			0.02	%		$	642,182			$	190			0.12	%
Securities available for sale at fair value	165,579				348				0.84	%		108,377				2,191				8.09	%		273,956				2,539				3.71	%
Loans held for sale	144,037				5,723				15.89	%		99,408				2,971				11.96	%		243,445				8,694				14.29	%
Loans and leases held for investment:
Unsecured personal loans	511,787				19,499				15.24	%		—				—				—	%		511,787				19,499				15.24	%
Secured consumer loans	532,426				5,173				3.89	%		—				—				—	%		532,426				5,173				3.89	%
Commercial loans and leases	623,735				9,062				5.81	%		—				—				—	%		623,735				9,062				5.81	%
PPP loans	615,942				5,334				3.46	%		—				—				—	%		615,942				5,334				3.46	%
Loans and leases held for investment	2,283,890				39,068				6.84	%		—				—				—	%		2,283,890				39,068				6.84	%
Retail and certificate loans held for investment at fair value	—				—				—	%		448,822				16,014				14.27	%		448,822				16,014				14.27	%
Other loans held for investment at fair value	—				—				—	%		38,662				1,222				12.64	%		38,662				1,222				12.64	%
Total interest-earning assets	3,145,401				45,325				5.76	%		794,688				22,402				11.28	%		3,930,957				67,727				6.89	%
Cash and due from banks and restricted cash	34,612											111,274											144,897
Allowance for loan and lease losses	(51,109)											—											(51,109)
Other non-interest earning assets	221,870											749,674											447,826
Total assets	$	3,350,774										$	1,655,636										$	4,472,571
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$	2,071,112			$	1,618			0.31	%		$	—			$	—			—	%		$	2,071,112			$	1,618			0.31	%
Savings accounts and certificates of deposit	301,939				81				0.11	%		—				—				—	%		301,939				81				0.11	%
Interest-bearing deposits	2,373,051				1,699				0.29	%		—				—				—	%		2,373,051				1,699				0.29	%
Short-term borrowings	2,138				1				0.06	%		77,373				1,002				5.19	%		79,511				1,003				5.05	%
Advances from PPPLF	312,168				272				0.35	%		—				—				—	%		312,168				272				0.35	%
Retail notes, certificates and secured borrowings	—				—				—	%		449,057				16,014				14.27	%		449,057				16,014				14.27	%
Structured Program borrowings	—				—				—	%		121,738				2,668				8.77	%		121,738				2,668				8.77	%
Other long-term debt	708				—				—	%		15,696				166				4.22	%		16,404				166				4.04	%
Total interest-bearing liabilities	2,688,065				1,972				0.29	%		663,864				19,850				11.96	%		3,351,929				21,822				2.61	%
Non-interest bearing deposits	102,709											—											92,588
Other liabilities	100,835											225,521											276,723
Total liabilities	$	2,891,609										$	889,385										$	3,721,240
Total equity	$	459,165										$	766,251										$	751,331
Total liabilities and equity	$	3,350,774										$	1,655,636										$	4,472,571
Interest rate spread									5.47	%										(0.68)	%										4.29	%
Net interest income and net interest margin					$	43,353			5.51	%						$	2,552			1.28	%						$	45,905			4.67	%

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

 

 

LENDINGCLUB CORPORATION NET INTEREST INCOME (Continued) (In thousands, except percentages or as noted) (Unaudited)
Three Months Ended March 31, 2021(1)(2)
	LendingClub Bank											LendingClub Corporation (Parent only)											Consolidated LendingClub Corporation(3)
	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 (4)
Cash, cash equivalents and restricted cash	$	737,555			$	138			0.11	%		$	216,698			$	18			0.03	%		$	918,148			$	156			0.10	%
Securities available for sale at fair value	232,001				444				1.15	%		130,620				1,791				5.48	%		362,621				2,235				2.71	%
Loans held for sale	64,720				1,615				14.97	%		133,872				3,542				10.58	%		198,592				5,157				12.01	%
Loans and leases held for investment:
Unsecured personal loans	146,925				3,392				13.85	%		—				—				—	%		146,925				3,392				13.85	%
Secured consumer loans	521,399				3,215				3.70	%		—				—				—	%		521,399				3,215				3.70	%
Commercial loans and leases	605,495				5,119				5.07	%		—				—				—	%		605,495				5,119				5.07	%
PPP loans	621,292				3,575				3.45	%		—				—				—	%		621,292				3,575				3.45	%
Loans and leases held for investment	1,895,111				15,301				4.84	%		—				—				—	%		1,895,111				15,301				4.84	%
Retail and certificate loans held for investment at fair value	—				—				—	%		574,158				20,262				14.12	%		574,158				20,262				14.12	%
Other loans held for investment at fair value	—				—				—	%		46,212				1,479				12.80	%		46,212				1,479				12.80	%
Total interest-earning assets	2,929,387				17,498				3.58	%		1,101,560				27,092				9.84	%		3,994,842				44,590				5.34	%
Cash and due from banks and restricted cash	42,683											95,190											137,216
Allowance for loan and lease losses	(30,357)											—											(30,357)
Other non-interest earning assets	187,785											618,194											326,040
Total assets	$	3,129,498										$	1,814,944										$	4,427,741
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$	1,735,274			$	913			0.33	%		$	—			$	—			—	%		$	1,735,274			$	913			0.33	%
Savings accounts and certificates of deposit	323,800				101				0.19	%		—				—				—	%		323,800				101				0.19	%
Interest-bearing deposits	2,059,074				1,014				0.30	%		—				—				—	%		2,059,074				1,014				0.30	%
Short-term borrowings	1,829				0.3				0.09	%		96,989				1,264				5.21	%		98,818				1,264				5.12	%
Advances from PPPLF	405,989				233				0.35	%		—				—				—	%		405,989				233				0.35	%
Retail notes, certificates and secured borrowings	—				—				—	%		574,192				20,262				14.12	%		574,192				20,262				14.12	%
Structured Program borrowings	—				—				—	%		143,045				3,208				8.97	%		143,045				3,208				8.97	%
Other long-term debt	2,834				—				—	%		15,771				103				2.61	%		18,605				103				2.21	%
Total interest-bearing liabilities	2,469,726				1,247				0.31	%		829,997				24,837				11.97	%		3,299,723				26,084				3.24	%
Non-interest bearing deposits	156,034											—											119,272
Other liabilities	68,510											245,177											286,907
Total liabilities	$	2,694,270										$	1,075,174										$	3,705,902
Total equity	$	435,228										$	739,770										$	721,839
Total liabilities and equity	$	3,129,498										$	1,814,944										$	4,427,741
Interest rate spread									3.27	%										(2.13)	%										2.11	%
Net interest income and net interest margin					$	16,251			3.33	%						$	2,255			0.82	%						$	18,506			2.67	%

(1)	For the two month period from February 1, 2021 through March 31, 2021, for LendingClub Bank.
(2)	Prior period amounts have been reclassified to include non-interest earning assets, non-interest bearing liabilities and equity to conform to current period presentation.
(3)	Consolidated presentation reflects intercompany eliminations.
(4)	Nonaccrual loans and any related income are included in their respective loan categories.

 

 

LENDINGCLUB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
	June 30, 2021				December 31, 2020
Assets
Cash and due from banks	$	55,773			$	5,197
Interest-bearing deposits in banks	512,873				519,766
Total cash and cash equivalents	568,646				524,963
Restricted cash	123,896				103,522
Securities available for sale at fair value (includes $272,869 and $159,164 at amortized cost, respectively)	277,505				142,226
Loans held for sale (includes $180,061 and $121,902 at fair value, respectively)	226,328				121,902
Loans and leases held for investment	2,370,126				—
Allowance for loan and lease losses	(71,081)				—
Loans and leases held for investment, net	2,299,045				—
Retail and certificate loans held for investment at fair value	391,362				636,686
Other loans held for investment at fair value	34,523				49,954
Property, equipment and software, net	94,676				96,641
Goodwill	75,717				—
Other assets	278,403				187,399
Total assets	$	4,370,101			$	1,863,293
Liabilities and Equity
Deposits:
Interest-bearing	$	2,445,518			$	—
Noninterest-bearing	94,186				—
Total deposits	2,539,704				—
Short-term borrowings	68,781				104,989
Advances from Paycheck Protection Program Liquidity Facility (PPPLF)	195,481				370,086
Retail notes, certificates and secured borrowings at fair value	391,384				507,203
Payable on Structured Program borrowings	110,871				133,499
Other long-term debt	15,650				—
Other liabilities	285,871				244,551
Total liabilities	3,607,742				1,139,122
Equity
Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 0 and 43,000 shares issued and outstanding, respectively	—				—
Common stock, $0.01 par value; 180,000,000 shares authorized; 98,601,148 and 88,149,510 shares issued and outstanding, respectively	986				881
Additional paid-in capital	1,580,518				1,508,020
Accumulated deficit	(823,927)				(786,214)
Treasury stock, at cost; 4,251 and 0 shares, respectively	(92)				—
Accumulated other comprehensive income	4,874				1,484
Total equity	762,359				724,171
Total liabilities and equity	$	4,370,101			$	1,863,293

 

 

LENDINGCLUB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS BY SEGMENT
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
	LendingClub Corporation (Parent only)								LendingClub Bank								Intercompany Eliminations								Total
	June 30, 2021				December 31, 2020				June 30, 2021				December 31, 2020				June 30, 2021				December 31, 2020				June 30, 2021				December 31, 2020
Assets
Total cash and cash equivalents	$	72,458			$	524,963			$	493,915			$	—			$	2,273			$	—			$	568,646			$	524,963
Restricted cash	127,781				103,522				—				—				(3,885)				—				123,896				103,522
Securities available for sale at fair value	95,378				142,226				182,127				—				—				—				277,505				142,226
Loans held for sale	92,509				121,902				133,819				—				—				—				226,328				121,902
Loans and leases held for investment, net	—				—				2,299,045				—				—				—				2,299,045				—
Retail and certificate loans held for investment at fair value	391,362				636,686				—				—				—				—				391,362				636,686
Other loans held for investment at fair value	34,523				49,954				—				—				—				—				34,523				49,954
Property, equipment and software, net	78,288				96,641				16,388				—				—				—				94,676				96,641
Investment in subsidiary	483,696				—				—				—				(483,696)				—				—				—
Goodwill	—				—				75,717				—				—				—				75,717				—
Other assets	189,567				187,399				156,886				—				(68,050)				—				278,403				187,399
Total assets	1,565,562				1,863,293				3,357,897				—				(553,358)				—				4,370,101				1,863,293
Liabilities and Equity
Total deposits	—				—				2,541,317				—				(1,613)				—				2,539,704				—
Short-term borrowings	68,460				104,989				321				—				—				—				68,781				104,989
Advances from PPPLF	—				—				195,481				—				—				—				195,481				—
Retail notes, certificates and secured borrowings at fair value	391,384				636,774				—				—				—				—				391,384				636,774
Payable on Structured Program borrowings	110,871				152,808				—				—				—				—				110,871				152,808
Other long-term debt	15,650				—				—				—				—				—				15,650				—
Other liabilities	206,525				244,551				125,790				—				(46,444)				—				285,871				244,551
Total liabilities	792,890				1,139,122				2,862,909				—				(48,057)				—				3,607,742				1,139,122
Total equity	772,672				724,171				494,988				—				(505,301)				—				762,359				724,171
Total liabilities and equity	$	1,565,562			$	1,863,293			$	3,357,897			$	—			$	(553,358)			$	—			$	4,370,101			$	1,863,293

 

 

LENDINGCLUB CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION (In thousands) (Unaudited)
The following table is provided to delineate between the assets and liabilities belonging to our member payment dependent self-directed retail program (Retail Program) note holders and certain VIEs that we are required to consolidate in accordance with GAAP. Such assets are not legally ours and the associated liabilities are payable only from the cash flows generated by those assets (i.e. Pass-throughs). As such, these debt holders do not have a secured interest in any other assets of LendingClub. We believe this is a useful measure because it illustrates the overall financial stability and operating leverage of the Company.
	June 30, 2021													December 31, 2020
	Retail Program (1)			Consolidated VIEs (2)(4)			All Other LendingClub (3)			Condensed Consolidated Balance Sheet				Retail Program (1)			Consolidated VIEs (2)(4)			All Other LendingClub (3)			Condensed Consolidated Balance Sheet
Assets
Total cash and cash equivalents	$	—		$	—		$	568,646		$	568,646			$	—		$	—		$	524,963		$	524,963
Restricted cash	—			14,156			109,740			123,896				—			13,473			90,049			103,522
Securities available for sale at fair value	—			—			277,505			277,505				—			—			142,226			142,226
Loans held for sale (4)	—			65,305			161,023			226,328				—			92,802			29,100			121,902
Loans and leases held for investment, net	—			—			2,299,045			2,299,045				—			—			—			—
Retail and certificate loans held for investment at fair value	367,552			23,810			—			391,362				584,066			52,620			—			636,686
Other loans held for investment at fair value (4)	—			31,149			3,374			34,523				—			46,120			3,834			49,954
Property, equipment and software, net	—			—			94,676			94,676				—			—			96,641			96,641
Goodwill	—			—			75,717			75,717				—			—			—			—
Other assets	2,323			647			275,433			278,403				3,797			1,134			182,468			187,399
Total assets	$	369,875		$	135,067		$	3,865,159		$	4,370,101			$	587,863		$	206,149		$	1,069,281		$	1,863,293
Liabilities and Equity
Total deposits	$	—		$	—		$	2,539,704		$	2,539,704			$	—		$	—		$	—		$	—
Short-term borrowings	—			—			68,781			68,781				—			—			104,989			104,989
Advances from PPPLF	—			—			195,481			195,481				—			—			—			—
Retail notes, certificates and secured borrowings at fair value	367,552			23,810			22			391,384				584,066			52,620			88			636,774
Payable on Structured Program borrowings (4)	—			110,871			—			110,871				—			152,808			—			152,808
Other long-term debt	—			—			15,650			15,650				—			—			—			—
Other liabilities	2,323			386			283,162			285,871				3,797			721			240,033			244,551
Total liabilities	369,875			135,067			3,102,800			3,607,742				587,863			206,149			345,110			1,139,122
Total equity	—			—			762,359			762,359				—			—			724,171			724,171
Total liabilities and equity	$	369,875		$	135,067		$	3,865,159		$	4,370,101			$	587,863		$	206,149		$	1,069,281		$	1,863,293

(1)	Represents loans held for investment at fair value that are funded directly by our Retail Program notes. The liabilities are only payable from the cash flows generated by the associated assets. We do not assume principal or interest rate risk on loans facilitated through our lending marketplace that are funded by our Retail Program because loan balances, interest rates and maturities are matched and offset by an equal balance of notes with the exact same interest rates and maturities. We do not retain any economic interests from our Retail Program. Interest expense on Retail Program notes of $33.2 million and $53.8 million was equally matched and offset by interest income from the related loans of $33.2 million and $53.8 million for the first halves of 2021 and 2020, respectively, resulting in no net effect on our net interest income.
(2)	Represents assets and equal and offsetting liabilities of certain VIEs that we are required to consolidate in accordance with GAAP, but which are not legally ours. The liabilities are only payable from the cash flows generated by the associated assets. The creditors of the VIEs have no recourse to the general credit of the Company. Interest expense on these liabilities owned by third parties of $9.0 million and $20.6 million was equally matched and offset by interest income on the loans of $9.0 million and $20.6 million for the first halves of 2021 and 2020, respectively, resulting in no net effect on our net interest income. Economic interests held by LendingClub, including retained interests, residuals and equity of the VIEs, are reflected in "Loans held for sale," "Other loans held for investment at fair value" and "Restricted cash," respectively, within the "All Other LendingClub" column.
(3)	Represents all other assets and liabilities of LendingClub, other than those related to our Retail Program and certain consolidated VIEs, but includes any economic interests held by LendingClub, including retained interests, residuals and equity of those consolidated VIEs.
(4)	The Company has sponsored Structured Program transactions that have been consolidated, resulting in an increase to "Other loans held for investment at fair value," "Loans held for sale" and the related "Payable on Structured Program borrowings."

 

 

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SOURCE LendingClub Corporation

FAQ

What were LendingClub Corporation's Q2 2021 revenues?

LendingClub Corporation reported total revenues of $204.4 million for Q2 2021.

What is the loan origination figure for LendingClub in Q2 2021?

Loan originations for LendingClub in Q2 2021 were $2.72 billion.

How much did LendingClub's net income increase in Q2 2021?

LendingClub's consolidated net income increased to $9.4 million in Q2 2021.

What are LendingClub's updated financial targets for 2021?

LendingClub has raised its full-year loan origination target to between $9.8 billion to $10.2 billion.

What notable items impacted LendingClub's Q2 2021 net income?

Notable items impacting Q2 2021 net income included $34.6 million in credit loss provisioning.