LendingClub Reports Second Quarter 2022 Results
LendingClub Corporation (NYSE: LC) reported record revenue of $330.1 million for Q2 2022, a 61% increase year-over-year. Net income reached $182.1 million, boosted by a $135.3 million income tax benefit. Excluding this, net income was $46.8 million, a 399% increase compared to the previous year. The company’s net interest income surged 153% to $116.2 million, with a strong net interest margin of 8.7%. LendingClub reaffirmed its full-year guidance, projecting revenue between $1.15 billion and $1.25 billion.
- Revenue increased 61% year-over-year to $330.1 million.
- Net interest income grew 153% year-over-year to $116.2 million.
- Net income, excluding tax benefits, rose 399% to $46.8 million.
- Total loans held for investment grew 106% year-over-year.
- Deposits increased 78% to $4.5 billion.
- Provision for credit losses increased to $70.6 million from $34.6 million year-over-year.
Record Revenue of
Reported Net Income of
Record Net Income of
SAN FRANCISCO, July 27, 2022 /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, 2022.
"Our strong execution, marketplace bank model, member and data advantages, and our continued focus on prudent underwriting have all contributed to an incredible first half of the year with records set for both revenue and profitability," said Scott Sanborn, LendingClub CEO. "Despite the more challenging economic backdrop and increased uncertainty, we are well positioned to navigate through this dynamic environment."
Record Second Quarter 2022 Results
- Revenue of
$330.1 million grew61% year-over-year, driven by growth in net interest income and marketplace revenue. - Recurring stream of net interest income increased
153% year-over-year to$116.2 million . - LendingClub Bank's net interest margin expanded to
8.7% from5.5% a year earlier, primarily reflecting growth in consumer loans which generate a higher yield. - Total loans held for investment (excluding PPP) grew
106% from June 30, 2021, reflecting growth in personal loan originations and an increase in originations retained in the held for investment portfolio. The percentage of originations held for investment increased to27% from20% a year earlier as the company reinvested earnings into loan retention to drive growth in recurring revenue. - Marketplace revenue of
$206.4 million grew36% year-over-year, reflecting growth in marketplace originations. - Deposits of
$4.5 billion were up78% from June 30, 2021, supporting growth in loans held for investment. - The efficiency ratio improved to
63% from78% a year earlier as the company continued to manage expenses prudently while generating strong revenue growth. - LendingClub's credit quality remained better than the industry, with delinquency rates remaining below pre-pandemic levels. Credit quality of the company's held for investment personal loan portfolio also remained strong reflecting the prime credit profile of its borrowers with an average FICO of 730.
- Provision for credit losses increased to
$70.6 million from$34.6 million in the second quarter of 2021, primarily reflecting growth of106% in loans held for investment (excluding PPP) from June 30, 2021. - Net income of
$182.1 million increased$172.7 million year-over-year. Net income for the second quarter of 2022 included an income tax benefit of$132.0 million , reflecting the release of a$135.3 million valuation allowance against the company's deferred tax assets, partially offset by a$3.3 million state income tax expense, due to the company's business model transition and resulting increase in profitability and the expectation of continued profitability. - Net income excluding the income tax benefit was
$46.8 million , up399% year-over-year. - Total equity was up
$316.7 million or42% from June 30, 2021 primarily reflecting net income generated over the period and the release of a deferred tax asset valuation allowance. - Diluted earnings per share of
$1.73 compared to earnings of$0.09 per share in the second quarter of 2021. Results in the second quarter of 2022 included an income tax benefit of$1.28 per share due to the release of a deferred tax asset valuation allowance. - The improvement in diluted earnings per share from a year earlier reflected revenue growth and increased operating efficiency, as well as the benefit from the release of the deferred tax asset valuation allowance.
- Excluding the income tax benefit, diluted earnings per share of
$0.45 was up400% year-over-year. - Pre-tax, pre-provision income of
$120.7 million increased173% year-over-year, consistent with revenue growth and improved operating efficiency which drove growth in net income.
Three Months Ended | |||||
($ in millions) | June 30, | March 31, | June 30, | ||
Total net revenue | $ 330.1 | $ 289.5 | $ 204.4 | ||
Non-interest expense | 209.4 | 191.2 | 160.1 | ||
Pre-tax, pre-provision income | 120.7 | 98.3 | 44.3 | ||
Provision for credit losses | 70.6 | 52.5 | 34.6 | ||
Income before income tax benefit (expense) | 50.1 | 45.8 | 9.6 | ||
Income tax benefit (expense) | 132.0 | (5.0) | (0.2) | ||
Net income | $ 182.1 | $ 40.8 | $ 9.4 | ||
Diluted EPS | $ 1.73 | $ 0.39 | $ 0.09 | ||
Income tax benefit from release of tax valuation allowance | $ 135.3 | $ — | $ — | ||
Net income excluding income tax benefit (1) | $ 46.8 | $ 40.8 | $ 9.4 | ||
Diluted EPS excluding income tax benefit (1) | $ 0.45 | $ 0.39 | $ 0.09 | ||
(1) | Second quarter 2022 income tax benefit of |
Financial Outlook
The company reaffirmed full year revenue and net income guidance for 2022 (excluding the income tax benefit from release of a deferred tax asset valuation allowance).
(millions) | Third Quarter 2022 | Full Year 2022 |
Total revenue | ||
Net income | ||
Income tax benefit from release of tax valuation allowance | — | |
Net income excluding income tax benefit |
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
Conference Call and Webcast Information
The LendingClub second 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, July 27, 2022. 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 696569, 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 3, 2022, by calling +1 (866) 813-9403 or outside the U.S. +44 (204) 525-0658, with Access Code 945301. 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: Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit. Our non-GAAP 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 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 Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit are important measures because they directly reflect the financial performance of our business operations. Net Income Excluding Income Tax Benefit adjusts for the release of a deferred tax asset valuation allowance in the second quarter 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.
For a reconciliation of such measures to the nearest GAAP measure, please refer to the table on page 2 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; 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 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) | |||||||||||||
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, | March 31, | December 31, 2021 | September 30, 2021 | June 30, | Q/Q | Y/Y | |||||||
Operating Highlights: | |||||||||||||
Non-interest income | $ 213,832 | $ 189,857 | $ 179,111 | $ 180,878 | $ 158,476 | 13 % | 35 % | ||||||
Net interest income | 116,226 | 99,680 | 83,132 | 65,288 | 45,905 | 17 % | 153 % | ||||||
Total net revenue | 330,058 | 289,537 | 262,243 | 246,166 | 204,381 | 14 % | 61 % | ||||||
Non-interest expense | 209,386 | 191,204 | 188,220 | 178,775 | 160,139 | 10 % | 31 % | ||||||
Pre-tax, pre-provision income | 120,672 | 98,333 | 74,023 | 67,391 | 44,242 | 23 % | 173 % | ||||||
Provision for credit losses | 70,566 | 52,509 | 45,149 | 37,524 | 34,634 | 34 % | 104 % | ||||||
Income before income tax benefit | 50,106 | 45,824 | 28,874 | 29,867 | 9,608 | 9 % | 422 % | ||||||
Income tax benefit (expense) | 131,954 | (4,988) | 234 | (2,682) | (237) | N/M | N/M | ||||||
Net income | 182,060 | 40,836 | 29,108 | 27,185 | 9,371 | N/M | N/M | ||||||
Income tax benefit from release of tax valuation allowance | 135,300 | — | — | — | — | N/M | N/M | ||||||
Net income excluding income tax benefit (1) | $ 46,760 | $ 40,836 | $ 29,108 | $ 27,185 | $ 9,371 | 15 % | 399 % | ||||||
Basic EPS – common stockholders | $ 1.77 | $ 0.40 | $ 0.29 | $ 0.27 | $ 0.10 | N/M | N/M | ||||||
Diluted EPS – common stockholders | $ 1.73 | $ 0.39 | $ 0.27 | $ 0.26 | $ 0.09 | N/M | N/M | ||||||
Diluted EPS excluding income tax benefit (1) | $ 0.45 | $ 0.39 | $ 0.27 | $ 0.26 | $ 0.09 | 15 % | 400 % | ||||||
LendingClub Bank Performance Metrics: | |||||||||||||
Net interest margin | 8.7 % | 8.6 % | 8.3 % | 7.1 % | 5.5 % | ||||||||
Efficiency ratio (2) | 60.5 % | 63.6 % | 69.5 % | 67.5 % | 69.0 % | ||||||||
Return on average equity (ROE) | 21.5 % | 22.5 % | 21.7 % | 26.5 % | 34.7 % | ||||||||
Return on average total assets (ROA) | 3.0 % | 3.1 % | 3.1 % | 3.7 % | 4.7 % | ||||||||
LendingClub Bank Capital Ratios: | |||||||||||||
Common Equity Tier 1 Capital Ratio | 16.7 % | 16.0 % | 16.7 % | 18.0 % | 18.7 % | ||||||||
Tier 1 Leverage Ratio | 13.4 % | 13.2 % | 14.3 % | 14.1 % | 13.5 % | ||||||||
Consolidated LendingClub Corporation Performance Metrics: | |||||||||||||
Net interest margin | 8.5 % | 8.3 % | 7.6 % | 6.3 % | 4.7 % | ||||||||
Efficiency ratio (2) | 63.4 % | 66.0 % | 71.8 % | 72.6 % | 78.4 % | ||||||||
Return on average equity (ROE) | 33.8 % | 18.7 % | 14.1 % | 13.8 % | 5.0 % | ||||||||
Return on average total assets (ROA) | 5.5 % | 3.1 % | 2.4 % | 2.4 % | 0.8 % | ||||||||
Marketing expense as a % of loan originations | 1.6 % | 1.7 % | 1.7 % | 1.6 % | 1.3 % | ||||||||
Loan originations (in millions) (3): | |||||||||||||
Total loan originations | $ 3,840 | $ 3,217 | $ 3,069 | $ 3,107 | $ 2,722 | 19 % | 41 % | ||||||
Marketplace loans | $ 2,819 | $ 2,360 | $ 2,308 | $ 2,471 | $ 2,182 | 19 % | 29 % | ||||||
Loan originations held for investment | $ 1,021 | $ 856 | $ 761 | $ 636 | $ 541 | 19 % | 89 % | ||||||
Loan originations held for investment as a % of total loan originations | 27 % | 27 % | 25 % | 20 % | 20 % | ||||||||
Servicing portfolio AUM (in millions) (4) | $ 14,783 | $ 13,341 | $ 12,463 | $ 11,592 | $ 10,741 | 11 % | 38 % | ||||||
Balance Sheet Data: | |||||||||||||
Loans and leases held for investment, net, excluding PPP loans | $ 3,692,667 | $ 3,049,325 | $ 2,486,440 | $ 2,235,698 | $ 1,791,492 | 21 % | 106 % | ||||||
PPP loans | $ 118,794 | $ 184,986 | $ 268,297 | $ 367,558 | $ 507,553 | (36) % | (77) % | ||||||
Total loans and leases held for investment, net | $ 3,811,461 | $ 3,234,311 | $ 2,754,737 | $ 2,603,256 | $ 2,299,045 | 18 % | 66 % | ||||||
Total assets | $ 6,186,765 | $ 5,574,425 | $ 4,900,319 | $ 4,750,760 | $ 4,370,101 | 11 % | 42 % | ||||||
Total deposits | $ 4,527,672 | $ 3,977,477 | $ 3,135,788 | $ 2,838,719 | $ 2,539,704 | 14 % | 78 % | ||||||
Total liabilities | $ 5,107,648 | $ 4,686,991 | $ 4,050,077 | $ 3,945,970 | $ 3,607,742 | 9 % | 42 % | ||||||
Total equity | $ 1,079,117 | $ 887,434 | $ 850,242 | $ 804,790 | $ 762,359 | 22 % | 42 % | ||||||
Allowance Ratios: | |||||||||||||
Allowance for loan and lease losses to total loans and leases held for investment | 6.0 % | 5.5 % | 5.0 % | 3.9 % | 3.0 % | ||||||||
Allowance for loan and lease losses to total loans and leases held for investment, excluding PPP loans | 6.2 % | 5.8 % | 5.5 % | 4.5 % | 3.8 % | ||||||||
Allowance for loan and lease losses to consumer loans and leases held for investment | 6.9 % | 6.6 % | 6.4 % | 5.2 % | 4.3 % | ||||||||
Allowance for loan and lease losses to commercial loans and leases held for investment | 2.0 % | 1.8 % | 1.8 % | 1.6 % | 1.5 % | ||||||||
Allowance for loan and lease losses to commercial loans and leases held for investment, excluding PPP loans | 2.3 % | 2.3 % | 2.6 % | 2.6 % | 2.8 % | ||||||||
N/M – Not meaningful | |
N/A – Not applicable | |
(1) | Second quarter 2022 income tax benefit of |
(2) | Calculated as the ratio of non-interest expense to total net revenue. |
(3) | Includes unsecured personal loans, auto loans, and education and patient finance loans only. |
(4) | 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. |
LENDINGCLUB CORPORATION | |||
LOANS AND LEASES HELD FOR INVESTMENT | |||
(In thousands, except percentages or as noted) | |||
(Unaudited) | |||
June 30, | December 31, | ||
Unsecured personal | $ 2,964,950 | $ 1,804,578 | |
Residential mortgages | 176,900 | 151,362 | |
Secured consumer | 142,824 | 65,976 | |
Total consumer loans held for investment | 3,284,674 | 2,021,916 | |
Equipment finance (1) | 164,104 | 149,155 | |
Commercial real estate | 339,524 | 310,399 | |
Commercial and industrial (2) | 266,419 | 417,656 | |
Total commercial loans and leases held for investment | 770,047 | 877,210 | |
Total loans and leases held for investment | 4,054,721 | 2,899,126 | |
Allowance for loan and lease losses | (243,260) | (144,389) | |
Loans and leases held for investment, net | $ 3,811,461 | $ 2,754,737 | |
(1) | Comprised of sales-type leases for equipment. |
(2) | Includes |
LENDINGCLUB CORPORATION | |||||||||||
ALLOWANCE FOR LOAN AND LEASE LOSSES | |||||||||||
(In thousands, except percentages or as noted) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
Consumer | Commercial | Total | Consumer | Commercial | Total | ||||||
Allowance for loan and lease losses, beginning of period | $ 173,857 | $ 14,128 | $ 88,631 | $ 16,105 | |||||||
Credit loss expense for loans and leases held for investment | 68,314 | 1,739 | 70,053 | 45,595 | (306) | 45,289 | |||||
Charge-offs | (14,707) | (1,145) | (15,852) | (5,557) | (313) | (5,870) | |||||
Recoveries | 720 | 354 | 1,074 | 143 | 91 | 234 | |||||
Allowance for loan and lease losses, end of period | $ 228,184 | $ 15,076 | $ 128,812 | $ 15,577 | |||||||
LENDINGCLUB CORPORATION | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||
(In thousands, except share and per share data) | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Change (%) | ||||||||
June 30, | March 31, | June 30, | Q2 2022 vs Q2 2021 | Q2 2022 vs Q1 2022 | |||||
Non-interest income: | |||||||||
Marketplace revenue (1) | $ 206,384 | $ 179,966 | $ 151,735 | 36 % | 15 % | ||||
Other non-interest income | 7,448 | 9,891 | 6,741 | 10 % | (25) % | ||||
Total non-interest income | 213,832 | 189,857 | 158,476 | 35 % | 13 % | ||||
Interest income: | |||||||||
Interest on loans held for sale | 7,130 | 7,450 | 8,694 | (18) % | (4) % | ||||
Interest and fees on loans and leases held for investment | 108,911 | 91,442 | 39,068 | 179 % | 19 % | ||||
Interest on retail and certificate loans held for investment at fair value | 5,091 | 6,969 | 16,014 | (68) % | (27) % | ||||
Interest on other loans held for investment at fair value | 631 | 593 | 1,222 | (48) % | 6 % | ||||
Interest on securities available for sale | 4,426 | 4,511 | 2,539 | 74 % | (2) % | ||||
Other interest income | 2,279 | 688 | 190 | N/M | 231 % | ||||
Total interest income | 128,468 | 111,653 | 67,727 | 90 % | 15 % | ||||
Interest expense: | |||||||||
Interest on deposits | 6,078 | 3,438 | 1,699 | 258 % | 77 % | ||||
Interest on short-term borrowings | 417 | 435 | 1,003 | (58) % | (4) % | ||||
Interest on retail notes, certificates and secured borrowings | 5,091 | 6,969 | 16,014 | (68) % | (27) % | ||||
Interest on Structured Program borrowings | 360 | 764 | 2,668 | (87) % | (53) % | ||||
Interest on other long-term debt | 296 | 367 | 438 | (32) % | (19) % | ||||
Total interest expense | 12,242 | 11,973 | 21,822 | (44) % | 2 % | ||||
Net interest income | 116,226 | 99,680 | 45,905 | 153 % | 17 % | ||||
Total net revenue | 330,058 | 289,537 | 204,381 | 61 % | 14 % | ||||
Provision for credit losses | 70,566 | 52,509 | 34,634 | 104 % | 34 % | ||||
Non-interest expense: | |||||||||
Compensation and benefits | 85,103 | 81,610 | 71,925 | 18 % | 4 % | ||||
Marketing | 61,497 | 55,080 | 35,107 | 75 % | 12 % | ||||
Equipment and software | 12,461 | 11,046 | 9,281 | 34 % | 13 % | ||||
Occupancy | 6,209 | 6,019 | 6,157 | 1 % | 3 % | ||||
Depreciation and amortization | 10,557 | 11,039 | 11,508 | (8) % | (4) % | ||||
Professional services | 16,138 | 12,406 | 11,520 | 40 % | 30 % | ||||
Other non-interest expense | 17,421 | 14,004 | 14,641 | 19 % | 24 % | ||||
Total non-interest expense | 209,386 | 191,204 | 160,139 | 31 % | 10 % | ||||
Income before income tax benefit (expense) | 50,106 | 45,824 | 9,608 | 422 % | 9 % | ||||
Income tax benefit (expense) | 131,954 | (4,988) | (237) | N/M | N/M | ||||
Net income | $ 182,060 | $ 40,836 | $ 9,371 | N/M | N/M | ||||
Net income per share: | |||||||||
Basic EPS – common stockholders | $ 1.77 | $ 0.40 | $ 0.10 | N/M | N/M | ||||
Diluted EPS – common stockholders | $ 1.73 | $ 0.39 | $ 0.09 | N/M | N/M | ||||
Weighted-average common shares – Basic | 102,776,867 | 101,493,561 | 97,785,089 | 5 % | 1 % | ||||
Weighted-average common shares – Diluted | 105,042,626 | 105,052,904 | 102,031,088 | 3 % | — % | ||||
N/M – Not meaningful | |
(1) | Marketplace revenue consists of the following: |
LENDINGCLUB CORPORATION | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued) | |||||||||
(In thousands, except share and per share data) | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Change (%) | ||||||||
June 30, | March 31, | June 30, | Q2 2022 vs Q2 2021 | Q2 2022 vs Q1 2022 | |||||
Origination fees | $ 149,252 | $ 122,093 | $ 113,802 | 31 % | 22 % | ||||
Servicing fees | 18,166 | 18,514 | 22,714 | (20) % | (2) % | ||||
Gain on sales of loans | 29,319 | 24,110 | 19,317 | 52 % | 22 % | ||||
Net fair value adjustments | 9,647 | 15,249 | (4,098) | N/M | (37) % | ||||
Total marketplace revenue | $ 206,384 | $ 179,966 | $ 151,735 | 36 % | 15 % | ||||
LENDINGCLUB CORPORATION | |||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS BY SEGMENT | |||||||||||||||
(In Thousands, Except Share and Per Share Amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
LendingClub Bank | LendingClub Corporation (Parent only) | Intercompany Eliminations | Total | ||||||||||||
June 30, | December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | December 31, | ||||||||
Assets | |||||||||||||||
Total cash and cash equivalents | $ 1,004,602 | $ 659,919 | $ 95,755 | $ 88,268 | $ (58,377) | $ (61,061) | $ 1,041,980 | $ 687,126 | |||||||
Restricted cash | — | — | 66,044 | 76,540 | (5,792) | (80) | 60,252 | 76,460 | |||||||
Securities available for sale at fair value | 370,567 | 205,730 | 32,427 | 57,800 | — | — | 402,994 | 263,530 | |||||||
Loans held for sale | 62,811 | 335,449 | — | 55,799 | — | — | 62,811 | 391,248 | |||||||
Loans and leases held for investment, net | 3,811,461 | 2,754,737 | — | — | — | — | 3,811,461 | 2,754,737 | |||||||
Retail and certificate loans held for investment at fair value | — | — | 122,078 | 229,719 | — | — | 122,078 | 229,719 | |||||||
Other loans held for investment at fair value | — | — | 20,583 | 21,240 | — | — | 20,583 | 21,240 | |||||||
Property, equipment and software, net | 73,002 | 36,424 | 46,974 | 61,572 | — | — | 119,976 | 97,996 | |||||||
Investment in subsidiary | — | — | 634,102 | 557,577 | (634,102) | (557,577) | — | — | |||||||
Goodwill | 75,717 | 75,717 | — | — | — | — | 75,717 | 75,717 | |||||||
Other assets | 264,600 | 254,075 | 230,379 | 168,042 | (26,066) | (119,571) | 468,913 | 302,546 | |||||||
Total assets | 5,662,760 | 4,322,051 | 1,248,342 | 1,316,557 | (724,337) | (738,289) | 6,186,765 | 4,900,319 | |||||||
Liabilities and Equity | |||||||||||||||
Total deposits | 4,591,841 | 3,196,929 | — | — | (64,169) | (61,141) | 4,527,672 | 3,135,788 | |||||||
Short-term borrowings | 165 | 165 | 7,818 | 27,615 | — | — | 7,983 | 27,780 | |||||||
Advances from PPPLF | 123,444 | 271,933 | — | — | — | — | 123,444 | 271,933 | |||||||
Retail notes, certificates and secured borrowings at fair value | — | — | 122,078 | 229,719 | — | — | 122,078 | 229,719 | |||||||
Payable on Structured Program borrowings | — | — | 15,274 | 65,451 | — | — | 15,274 | 65,451 | |||||||
Other long-term debt | — | — | 15,300 | 15,455 | — | — | 15,300 | 15,455 | |||||||
Other liabilities | 187,089 | 218,775 | 134,874 | 150,727 | (26,066) | (65,551) | 295,897 | 303,951 | |||||||
Total liabilities | 4,902,539 | 3,687,802 | 295,344 | 488,967 | (90,235) | (126,692) | 5,107,648 | 4,050,077 | |||||||
Total equity | 760,221 | 634,249 | 952,998 | 827,590 | (634,102) | (611,597) | 1,079,117 | 850,242 | |||||||
Total liabilities and equity | $ 5,662,760 | $ 4,322,051 | $ 1,248,342 | $ 1,316,557 | $ (724,337) | $ (738,289) | $ 6,186,765 | $ 4,900,319 | |||||||
LENDINGCLUB CORPORATION | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME BY SEGMENT | |||||||
(In thousands, except share and per share data) | |||||||
(Unaudited) | |||||||
Three Months Ended June 30, 2022 | |||||||
LendingClub Bank | LendingClub Corporation (Parent only) | Intercompany Eliminations | Total | ||||
Non-interest income: | |||||||
Marketplace revenue | $ 191,087 | $ 11,167 | $ 4,130 | $ 206,384 | |||
Other non-interest income | 20,041 | 3,914 | (16,507) | 7,448 | |||
Total non-interest income | 211,128 | 15,081 | (12,377) | 213,832 | |||
Interest income: | |||||||
Interest income | 120,152 | 8,316 | — | 128,468 | |||
Interest expense | (6,213) | (6,029) | — | (12,242) | |||
Net interest income | 113,939 | 2,287 | — | 116,226 | |||
Total net revenue | 325,067 | 17,368 | (12,377) | 330,058 | |||
Provision for credit losses | (70,566) | — | — | (70,566) | |||
Non-interest expense | (196,636) | (25,127) | 12,377 | (209,386) | |||
Income (Loss) before income tax benefit (expense) | 57,865 | (7,759) | — | 50,106 | |||
Income tax benefit (expense) | (17,318) | 85,864 | 63,408 | 131,954 | |||
Net income | $ 40,547 | $ 78,105 | $ 63,408 | $ 182,060 | |||
Three Months Ended March 31, 2022 | |||||||
LendingClub Bank | LendingClub Corporation (Parent only) | Intercompany Eliminations | Total | ||||
Non-interest income: | |||||||
Marketplace revenue | $ 164,835 | $ 15,131 | $ — | $ 179,966 | |||
Other non-interest income | 19,498 | 4,223 | (13,830) | 9,891 | |||
Total non-interest income | 184,333 | 19,354 | (13,830) | 189,857 | |||
Interest income: | |||||||
Interest income | 99,823 | 11,830 | — | 111,653 | |||
Interest expense | (3,644) | (8,329) | — | (11,973) | |||
Net interest income | 96,179 | 3,501 | — | 99,680 | |||
Total net revenue | 280,512 | 22,855 | (13,830) | 289,537 | |||
Provision for credit losses | (52,509) | — | — | (52,509) | |||
Non-interest expense | (178,459) | (26,575) | 13,830 | (191,204) | |||
Income (Loss) before income tax benefit (expense) | 49,544 | (3,720) | — | 45,824 | |||
Income tax benefit (expense) | (12,355) | 17,727 | (10,360) | (4,988) | |||
Net income | $ 37,189 | $ 14,007 | $ (10,360) | $ 40,836 | |||
Three Months Ended June 30, 2021 | |||||||
LendingClub Bank | LendingClub Corporation (Parent only) | Intercompany Eliminations | Total | ||||
Non-interest income: | |||||||
Marketplace revenue | $ 128,714 | $ 23,021 | $ — | $ 151,735 | |||
Other non-interest income | 28,340 | 4,281 | (25,880) | 6,741 | |||
Total non-interest income | 157,054 | 27,302 | (25,880) | 158,476 | |||
Interest income: | |||||||
Interest income | 45,325 | 22,402 | — | 67,727 | |||
Interest expense | (1,972) | (19,850) | — | (21,822) | |||
Net interest income | 43,353 | 2,552 | — | 45,905 | |||
Total net revenue | 200,407 | 29,854 | (25,880) | 204,381 | |||
Reversal of (Provision for) credit losses | (34,956) | 322 | — | (34,634) | |||
Non-interest expense | (138,182) | (47,837) | 25,880 | (160,139) | |||
Income (Loss) before income tax benefit (expense) | 27,269 | (17,661) | — | 9,608 | |||
Income tax benefit (expense) | 12,513 | 8,922 | (21,672) | (237) | |||
Net income (loss) | $ 39,782 | $ (8,739) | $ (21,672) | $ 9,371 | |||
LENDINGCLUB BANK | |||||||||||||||||
NET INTEREST INCOME | |||||||||||||||||
(In thousands, except percentages or as noted) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
LendingClub Bank | |||||||||||||||||
Three Months Ended June 30, 2022 | Three Months Ended March 31, 2022 | Three Months Ended June 30, 2021 | |||||||||||||||
Average | Interest | Average Yield/ | Average | Interest | Average Yield/ | Average | Interest | Average Yield/ | |||||||||
Interest-earning assets (1) | |||||||||||||||||
Cash, cash equivalents, restricted cash and other | $ 964,161 | $ 2,214 | 0.92 % | $ 829,707 | $ 683 | 0.33 % | $ 551,895 | $ 186 | 0.13 % | ||||||||
Securities available for sale at fair value | 369,012 | 2,259 | 2.45 % | 274,089 | 1,276 | 1.86 % | 165,579 | 348 | 0.84 % | ||||||||
Loans held for sale | 149,506 | 6,768 | 18.11 % | 228,529 | 6,422 | 11.24 % | 144,037 | 5,723 | 15.89 % | ||||||||
Loans and leases held for investment: | |||||||||||||||||
Unsecured personal loans | 2,692,148 | 95,529 | 14.19 % | 2,060,323 | 78,376 | 15.22 % | 511,787 | 19,499 | 15.24 % | ||||||||
Secured consumer loans | 268,091 | 2,351 | 3.51 % | 232,235 | 2,275 | 3.92 % | 532,426 | 5,173 | 3.89 % | ||||||||
Commercial loans and leases | 644,002 | 8,732 | 5.42 % | 620,660 | 7,588 | 4.89 % | 623,735 | 9,062 | 5.81 % | ||||||||
PPP loans | 149,454 | 2,299 | 6.15 % | 222,517 | 3,203 | 5.76 % | 615,942 | 5,334 | 3.46 % | ||||||||
Loans and leases held for investment | 3,753,695 | 108,911 | 11.61 % | 3,135,735 | 91,442 | 11.66 % | 2,283,890 | 39,068 | 6.84 % | ||||||||
Total interest-earning assets | 5,236,374 | 120,152 | 9.18 % | 4,468,060 | 99,823 | 8.94 % | 3,145,401 | 45,325 | 5.76 % | ||||||||
Cash and due from banks | 31,142 | 46,117 | 34,612 | ||||||||||||||
Allowance for loan and lease losses | (202,904) | (163,631) | (51,109) | ||||||||||||||
Other non-interest earning assets | 424,586 | 390,066 | 221,870 | ||||||||||||||
Total assets | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||
Interest-bearing deposits | |||||||||||||||||
Checking and money market accounts | $ 2,664 | 0.43 % | $ 1,724 | 0.31 % | $ 1,618 | 0.31 % | |||||||||||
Savings accounts and certificates of deposit | 1,555,607 | 3,414 | 0.88 % | 1,071,133 | 1,714 | 0.65 % | 301,939 | 81 | 0.11 % | ||||||||
Interest-bearing deposits | 4,019,317 | 6,078 | 0.61 % | 3,311,583 | 3,438 | 0.42 % | 2,373,051 | 1,699 | 0.29 % | ||||||||
Short-term borrowings | 164 | — | — % | 165 | — | — % | 2,138 | 1 | 0.06 % | ||||||||
Advances from PPPLF | 151,278 | 135 | 0.36 % | 234,872 | 206 | 0.35 % | 312,168 | 272 | 0.35 % | ||||||||
Other long-term debt | — | — | — % | — | — | — % | 708 | — | — % | ||||||||
Total interest-bearing liabilities | 4,170,759 | 6,213 | 0.60 % | 3,546,620 | 3,644 | 0.42 % | 2,688,065 | 1,972 | 0.29 % | ||||||||
Non-interest bearing deposits | 399,949 | 300,218 | 102,709 | ||||||||||||||
Other liabilities | 163,095 | 232,018 | 100,835 | ||||||||||||||
Total liabilities | |||||||||||||||||
Total equity | $ 755,395 | $ 661,756 | $ 459,165 | ||||||||||||||
Total liabilities and equity | |||||||||||||||||
Interest rate spread | 8.58 % | 8.52 % | 5.47 % | ||||||||||||||
Net interest income and net interest margin | $ 113,939 | 8.70 % | $ 96,179 | 8.61 % | $ 43,353 | 5.51 % | |||||||||||
(1) | 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) | |||||||||||||||||
Consolidated LendingClub Corporation (1) | |||||||||||||||||
Three Months Ended June 30, 2022 | Three Months Ended March 31, 2022 | Three Months Ended June 30, 2021 | |||||||||||||||
Average | Interest | Average Yield/ | Average | Interest | Average Yield/ | Average | Interest | Average Yield/ | |||||||||
Interest-earning assets (2) | |||||||||||||||||
Cash, cash equivalents, restricted cash and other | $ 2,279 | 0.89 % | $ 892,921 | $ 688 | 0.31 % | $ 642,182 | $ 190 | 0.12 % | |||||||||
Securities available for sale at fair value | 409,327 | 4,426 | 4.32 % | 325,155 | 4,511 | 5.55 % | 273,956 | 2,539 | 3.71 % | ||||||||
Loans held for sale | 156,503 | 7,130 | 18.22 % | 255,139 | 7,450 | 11.68 % | 243,445 | 8,694 | 14.29 % | ||||||||
Loans and leases held for investment: | |||||||||||||||||
Unsecured personal loans | 2,692,148 | 95,529 | 14.19 % | 2,060,323 | 78,376 | 15.22 % | 511,787 | 19,499 | 15.24 % | ||||||||
Secured consumer loans | 268,091 | 2,351 | 3.51 % | 232,235 | 2,275 | 3.92 % | 532,426 | 5,173 | 3.89 % | ||||||||
Commercial loans and leases | 644,002 | 8,732 | 5.42 % | 620,660 | 7,588 | 4.89 % | 623,735 | 9,062 | 5.81 % | ||||||||
PPP loans | 149,454 | 2,299 | 6.15 % | 222,517 | 3,203 | 5.76 % | 615,942 | 5,334 | 3.46 % | ||||||||
Loans and leases held for investment | 3,753,695 | 108,911 | 11.61 % | 3,135,735 | 91,442 | 11.66 % | 2,283,890 | 39,068 | 6.84 % | ||||||||
Retail and certificate loans held for investment at fair value | 144,613 | 5,091 | 14.08 % | 198,813 | 6,969 | 14.02 % | 448,822 | 16,014 | 14.27 % | ||||||||
Other loans held for investment at fair value | 16,991 | 631 | 14.85 % | 18,523 | 593 | 12.80 % | 38,662 | 1,222 | 12.64 % | ||||||||
Total interest-earning assets | 5,504,321 | 128,468 | 9.34 % | 4,826,286 | 111,653 | 9.25 % | 3,930,957 | 67,727 | 6.89 % | ||||||||
Cash and due from banks and restricted cash | 75,517 | 92,683 | 144,897 | ||||||||||||||
Allowance for loan and lease losses | (202,904) | (163,631) | (51,109) | ||||||||||||||
Other non-interest earning assets | 490,412 | 486,363 | 447,826 | ||||||||||||||
Total assets | |||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||
Checking and money market accounts | $ 2,664 | 0.43 % | $ 1,724 | 0.31 % | $ 1,618 | 0.31 % | |||||||||||
Savings accounts and certificates of deposit | 1,555,607 | 3,414 | 0.88 % | 1,071,133 | 1,714 | 0.64 % | 301,939 | 81 | 0.11 % | ||||||||
Interest-bearing deposits | 4,019,317 | 6,078 | 0.61 % | 3,311,583 | 3,438 | 0.42 % | 2,373,051 | 1,699 | 0.29 % | ||||||||
Short-term borrowings | 10,874 | 417 | 15.35 % | 20,371 | 435 | 8.56 % | 79,511 | 1,003 | 5.05 % | ||||||||
Advances from PPPLF | 151,278 | 135 | 0.36 % | 234,872 | 206 | 0.35 % | 312,168 | 272 | 0.35 % | ||||||||
Retail notes, certificates and secured borrowings | 144,613 | 5,091 | 14.08 % | 198,813 | 6,969 | 14.02 % | 449,057 | 16,014 | 14.27 % | ||||||||
Structured Program borrowings | 18,439 | 360 | 7.81 % | 42,026 | 764 | 7.29 % | 121,738 | 2,668 | 8.77 % | ||||||||
Other long-term debt | 15,357 | 161 | 4.20 % | 15,421 | 161 | 4.19 % | 16,404 | 166 | 4.04 % | ||||||||
Total interest-bearing liabilities | 4,359,878 | 12,242 | 1.12 % | 3,823,086 | 11,973 | 1.25 % | 3,351,929 | 21,822 | 2.61 % | ||||||||
Non-interest bearing deposits | 292,750 | 227,337 | 92,588 | ||||||||||||||
Other liabilities | 261,795 | 319,241 | 276,723 | ||||||||||||||
Total liabilities | |||||||||||||||||
Total equity | $ 952,922 | $ 872,037 | $ 751,331 | ||||||||||||||
Total liabilities and equity | |||||||||||||||||
Interest rate spread | 8.21 % | 8.00 % | 4.29 % | ||||||||||||||
Net interest income and net interest margin | $ 116,226 | 8.45 % | $ 99,680 | 8.26 % | $ 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 | |||
CONSOLIDATED BALANCE SHEETS | |||
(In Thousands, Except Share and Per Share Amounts) | |||
(Unaudited) | |||
June 30, | December 31, | ||
Assets | |||
Cash and due from banks | $ 26,415 | $ 35,670 | |
Interest-bearing deposits in banks | 1,015,565 | 651,456 | |
Total cash and cash equivalents | 1,041,980 | 687,126 | |
Restricted cash | 60,252 | 76,460 | |
Securities available for sale at fair value ( | 402,994 | 263,530 | |
Loans held for sale (includes | 62,811 | 391,248 | |
Loans and leases held for investment | 4,054,721 | 2,899,126 | |
Allowance for loan and lease losses | (243,260) | (144,389) | |
Loans and leases held for investment, net | 3,811,461 | 2,754,737 | |
Retail and certificate loans held for investment at fair value | 122,078 | 229,719 | |
Other loans held for investment at fair value | 20,583 | 21,240 | |
Property, equipment and software, net | 119,976 | 97,996 | |
Goodwill | 75,717 | 75,717 | |
Other assets | 468,913 | 302,546 | |
Total assets | $ 6,186,765 | $ 4,900,319 | |
Liabilities and Equity | |||
Deposits: | |||
Interest-bearing | $ 4,261,651 | $ 2,919,203 | |
Noninterest-bearing | 266,021 | 216,585 | |
Total deposits | 4,527,672 | 3,135,788 | |
Short-term borrowings | 7,983 | 27,780 | |
Advances from Paycheck Protection Program Liquidity Facility (PPPLF) | 123,444 | 271,933 | |
Retail notes, certificates and secured borrowings at fair value | 122,078 | 229,719 | |
Payable on Structured Program borrowings | 15,274 | 65,451 | |
Other long-term debt | 15,300 | 15,455 | |
Other liabilities | 295,897 | 303,951 | |
Total liabilities | 5,107,648 | 4,050,077 | |
Equity | |||
Series A Preferred stock, | — | — | |
Common stock, | 1,036 | 1,010 | |
Additional paid-in capital | 1,594,458 | 1,559,616 | |
Accumulated deficit | (494,534) | (717,430) | |
Accumulated other comprehensive income (loss) | (21,843) | 7,046 | |
Total equity | 1,079,117 | 850,242 | |
Total liabilities and equity | $ 6,186,765 | $ 4,900,319 | |
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SOURCE LendingClub Corporation
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