LendingClub Reports Second Quarter 2023 Results

Rhea-AI Summary

LendingClub Corporation announces financial results for Q2 2023, with total assets of $8.3 billion, deposits of $6.8 billion, and loans held for investment of $5.6 billion. Net revenue was $232.5 million, net income was $10.1 million, and diluted EPS was $0.09. The company maintains strong liquidity and capital and expects loan originations of $1.4B to $1.7B in Q3 2023.

Continued Profitability with Strong Capital & Liquidity Levels

Successful Launch of Structured Certificates Program

SAN FRANCISCO, July 26, 2023 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the second quarter ended June 30, 2023.

"We're leaning into our data, membership, and business model advantages to deliver continued profitability in a difficult environment," said Scott Sanborn, LendingClub CEO. "While we expect the headwinds in the marketplace to persist, we're managing the business prudently, continuing our disciplined credit underwriting, and developing new structures to meet the evolving needs of loan investors. We are maintaining strong liquidity and capital and remain positioned to capture the massive long-term growth opportunities to help our members keep more of what they earn and earn more on what they save."

Second Quarter 2023 Results

Balance Sheet:

• Total assets of $8.3 billion compared to $8.8 billion in the prior quarter, reflecting a lower cash position due to the planned maturity of brokered deposits.
• Deposits of $6.8 billion compared to $7.2 billion in the prior quarter primarily due to the planned maturity of brokered deposits.
• FDIC-insured deposits represent approximately 85% of total deposits.
• Loans and leases held for investment of $5.6 billion compared to $5.9 billion in the prior quarter as we moved $200 million in loans into a held for sale designation.
• Substantial capital position with a consolidated Tier 1 leverage ratio of 12.4% and consolidated Common Equity Tier 1 capital ratio of 16.1%.
• Book value per common share of $11.09, up from $11.08 in the prior quarter.
• Tangible book value per common share of $10.26, up from $10.23 in the prior quarter.

Financial Performance:

• Loan originations of $2.0 billion compared to $2.3 billion in the prior quarter with sold loan volume up modestly, offset by reduced loan retention.
• Total net revenue of $232.5 million compared to $245.7 million in the prior quarter, driven by lower marketplace revenue.
• Net interest income of $146.7 million remained flat from the prior quarter as higher interest income was offset by higher cost of interest-bearing deposits.
• Marketplace revenue of $82.8 million compared to $95.6 million in the prior quarter, reflecting lower price on sold marketplace volumes.
• Net income of $10.1 million, or diluted EPS of $0.09, compared to $13.7 million, or diluted EPS of $0.13, in the prior quarter.
• Pre-provision net revenue (PPNR) of $81.4 million compared to $88.4 million in the prior quarter, reflecting lower marketplace revenue, partially offset by lower non-interest expense.
• Provision for credit losses of $66.6 million compared to $70.6 million in the prior quarter driven by lower volume of retained loans, offset by a modest increase in provision for the portfolio.
• Efficiency ratio of 65.0% compared to 64.0% in the prior quarter due to a decline in marketplace revenue, partially offset by lower non-interest expense.

	Three Months Ended
($ in millions, except per share amounts)	June 30, 2023		March 31, 2023		June 30, 2022
Total net revenue	$           232.5		$            245.7		$            330.1
Non-interest expense	151.1		157.3		209.4
Pre-provision net revenue (1)	81.4		88.4		120.7
Provision for credit losses	66.6		70.6		70.6
Income before income tax benefit (expense)	14.8		17.8		50.1
Income tax benefit (expense)	(4.7)		(4.1)		132.0
Net income	$             10.1		$              13.7		$            182.1
Diluted EPS	$             0.09		$              0.13		$              1.73
Income tax benefit from release of tax valuation allowance	$                —		$                 —		$            135.3
Net income excluding income tax benefit (1)	$             10.1		$              13.7		$              46.8
Diluted EPS excluding income tax benefit (1)	$             0.09		$              0.13		$              0.45

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

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

Financial Outlook

	Third Quarter 2023
Loan Originations	$1.4B to $1.7B
Pre-Provision Net Revenue (PPNR)	$40M to $50M

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 $85 billion in loans, our advanced credit decisioning and machine-learning models are used across the customer lifecycle to expand seamless access to credit for our members, while generating compelling risk-adjusted returns for our loan investors. Since 2007, more than 4.7 million members have joined the Club to help reach their financial goals. For more information about LendingClub, visit https://www.lendingclub.com.

Conference Call and Webcast Information

The LendingClub second quarter 2023 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, July 26, 2023. A live webcast of the call will be available at http://ir.lendingclub.com under the Filings & Financials menu in Quarterly Results. To access the call, please dial +1 (404) 975-4839, or outside the U.S. +1 (833) 470-1428, with Access Code 447049, 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 2, 2023, by calling +1 (929) 458-6194 or outside the U.S. +1 (866) 813-9403, with Access Code 653185. LendingClub has used, and intends to use, its investor relations website, blog (http://blog.lendingclub.com), 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 13 of this release.

Safe Harbor Statement

Some of the statements above, including statements regarding our competitive advantages, macroeconomic outlook, anticipated future performance and financial results, are "forward-looking statements." The words "anticipate," "believe," "estimate," "expect," "intend," "may," "outlook," "plan," "predict," "project," "will," "would" and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include: our ability to continue to attract and retain new and existing borrowers and platform investors; our ability to realize the expected benefits from recent initiatives; 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
	June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		Q/Q		Y/Y
Operating Highlights:
Non-interest income	$     85,818		$      98,990		$       127,465		$       181,237		$   213,832		(13) %		(60) %
Net interest income	146,652		146,704		135,243		123,676		116,226		— %		26 %
Total net revenue	232,470		245,694		262,708		304,913		330,058		(5) %		(30) %
Non-interest expense	151,079		157,308		180,044		186,219		209,386		(4) %		(28) %
Pre-provision net revenue(1)	81,391		88,386		82,664		118,694		120,672		(8) %		(33) %
Provision for credit losses	66,595		70,584		61,512		82,739		70,566		(6) %		(6) %
Income before income tax benefit (expense)	14,796		17,802		21,152		35,955		50,106		(17) %		(70) %
Income tax benefit (expense)	(4,686)		(4,136)		2,439		7,243		131,954		13 %		N/M
Net income	10,110		13,666		23,591		43,198		182,060		(26) %		(94) %
Income tax benefit from release of tax valuation allowance	—		—		3,180		5,015		135,300		N/M		N/M
Net income excluding income tax benefit(1)(2)	$     10,110		$      13,666		$         20,411		$         38,183		$     46,760		(26) %		(78) %
Basic EPS	$         0.09		$          0.13		$             0.22		$             0.41		$         1.77		(31) %		(95) %
Diluted EPS	$         0.09		$          0.13		$             0.22		$             0.41		$         1.73		(31) %		(95) %
Diluted EPS excluding income tax benefit(1)(2)	$         0.09		$          0.13		$             0.19		$             0.36		$         0.45		(31) %		(80) %
LendingClub Corporation Performance Metrics:
Net interest margin	7.1 %		7.5 %		7.8 %		8.3 %		8.5 %
Efficiency ratio(3)	65.0 %		64.0 %		68.5 %		61.1 %		63.4 %
Return on average equity (ROE)(4)	3.4 %		4.6 %		7.2 %		14.2 %		33.8 %
Return on average total assets (ROA)(5)	0.5 %		0.7 %		1.1 %		2.5 %		5.5 %
Marketing expense as a % of loan originations	1.2 %		1.2 %		1.4 %		1.3 %		1.6 %
LendingClub Corporation Capital Metrics:
Common equity Tier 1 capital ratio	16.1 %		15.6 %		15.8 %		18.3 %		20.0 %
Tier 1 leverage ratio	12.4 %		12.8 %		14.1 %		15.7 %		16.2 %
Book value per common share	$       11.09		$        11.08		$           10.93		$           10.67		$       10.41		— %		7 %
Tangible book value per common share(1)	$       10.26		$        10.23		$           10.06		$             9.78		$         9.50		— %		8 %
Loan Originations (in millions)(6):
Total loan originations	$       2,011		$        2,288		$           2,524		$           3,539		$       3,840		(12) %		(48) %
Marketplace loans	$       1,353		$        1,286		$           1,824		$           2,386		$       2,819		5 %		(52) %
Loan originations held for investment	$          657		$        1,002		$              701		$           1,153		$       1,021		(34) %		(36) %
Loan originations held for investment as a % of total loan originations	33 %		44 %		28 %		33 %		27 %
Servicing Portfolio AUM (in millions)(7):
Total servicing portfolio	$      15,669		$       16,060		$         16,157		$         15,929		$      14,783		(2) %		6 %
Loans serviced for others	$      10,204		$       10,504		$         10,819		$         11,807		$      11,382		(3) %		(10) %

 

LENDINGCLUB CORPORATION OPERATING HIGHLIGHTS (Continued) (In thousands, except percentages or as noted) (Unaudited)
	As of and for the three months ended										% Change
	June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		Q/Q		Y/Y
Balance Sheet Data:
Loans and leases held for investment at amortized cost, net, excluding PPP loans	$ 5,160,546		$ 5,091,969		$    4,638,331		$    4,414,347		$ 3,692,667		1 %		40 %
PPP loans	$      17,640		$      51,112		$         66,971		$         89,379		$    118,794		(65) %		(85) %
Total loans and leases held for investment at amortized cost, net(8)	$ 5,178,186		$ 5,143,081		$    4,705,302		$    4,503,726		$ 3,811,461		1 %		36 %
Loans held for investment at fair value	$    404,119		$    748,618		$       925,938		$         15,057		$      20,583		(46) %		N/M
Total loans and leases held for investment	$ 5,582,305		$ 5,891,699		$    5,631,240		$    4,518,783		$ 3,832,044		(5) %		46 %
Total assets	$ 8,342,506		$ 8,754,018		$    7,979,747		$    6,775,074		$ 6,186,765		(5) %		35 %
Total deposits	$ 6,843,535		$ 7,218,854		$    6,392,553		$    5,123,506		$ 4,527,672		(5) %		51 %
Total liabilities	$ 7,136,983		$ 7,563,276		$    6,815,453		$    5,653,664		$ 5,107,648		(6) %		40 %
Total equity	$ 1,205,523		$ 1,190,742		$    1,164,294		$    1,121,410		$ 1,079,117		1 %		12 %

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

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

	As of and for the three months ended
	June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022
Asset Quality Metrics:
Allowance for loan and lease losses to total loans and leases held for investment	6.4 %		6.4 %		6.5 %		6.3 %		6.0 %
Allowance for loan and lease losses to consumer loans and leases held for investment	7.1 %		7.1 %		7.3 %		7.2 %		6.9 %
Allowance for loan and lease losses to commercial loans and leases held for investment	1.9 %		2.0 %		2.0 %		1.9 %		2.0 %
Net charge-offs	$         59,884		$          49,845		$          37,148		$          22,658		$          14,778
Net charge-off ratio(1)	4.4 %		3.8 %		3.0 %		2.1 %		1.6 %

(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:
	June 30, 2023		December 31, 2022
Unsecured personal	$       4,371,330		$       3,866,373
Residential mortgages	192,256		199,601
Secured consumer	237,372		194,634
Total consumer loans held for investment	4,800,958		4,260,608
Equipment finance (1)	142,073		160,319
Commercial real estate	382,738		373,501
Commercial and industrial (2)	207,580		238,726
Total commercial loans and leases held for investment	732,391		772,546
Total loans and leases held for investment at amortized cost	5,533,349		5,033,154
Allowance for loan and lease losses	(355,163)		(327,852)
Loans and leases held for investment at amortized cost, net	$       5,178,186		$       4,705,302
Loans held for investment at fair value	404,119		925,938
Total loans and leases held for investment	$       5,582,305		$       5,631,240

(1)	Comprised of sales-type leases for equipment.
(2)	Includes $17.6 million and $67.0 million of Paycheck Protection Program (PPP) loans as of June 30, 2023 and December 31, 2022, respectively. Such loans are guaranteed by the Small Business Association and, therefore, the company determined no allowance for expected credit losses is required on these loans.

 

LENDINGCLUB CORPORATION ALLOWANCE FOR LOAN AND LEASE LOSSES (In thousands) (Unaudited)
The following tables present the allowance for loan and lease losses on loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:
	Three Months Ended
	June 30, 2023						March 31, 2023
	Consumer		Commercial		Total		Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$    333,546		$        15,311		$ 348,857		$    312,489		$        15,363		$ 327,852
Credit loss expense for loans and leases held for investment	66,874		(684)		66,190		70,684		166		70,850
Charge-offs	(63,345)		(924)		(64,269)		(52,212)		(351)		(52,563)
Recoveries	4,086		299		4,385		2,585		133		2,718
Allowance for loan and lease losses, end of period	$    341,161		$        14,002		$ 355,163		$    333,546		$        15,311		$ 348,857

 

	Three Months Ended
	June 30, 2022
	Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$    173,857		$        14,128		$ 187,985
Credit loss expense for loans and leases held for investment	68,314		1,739		70,053
Charge-offs	(14,707)		(1,145)		(15,852)
Recoveries	720		354		1,074
Allowance for loan and lease losses, end of period	$    228,184		$        15,076		$ 243,260

 

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:

June 30, 2023	30-59 Days		60-89 Days		90 or More Days		Total Days Past Due
Unsecured personal	$      29,768		$      23,951		$      23,397		$             77,116
Residential mortgages	—		—		165		165
Secured consumer	54		51		—		105
Total consumer loans held for investment	$      29,822		$      24,002		$      23,562		$             77,386
Equipment finance	$           485		$              —		$           683		$               1,168
Commercial real estate	2,115		—		10,561		12,676
Commercial and industrial (1)	184		358		1,608		2,150
Total commercial loans and leases held for investment (1)	$         2,784		$            358		$      12,852		$             15,994
Total loans and leases held for investment at amortized cost (1)	$       32,606		$       24,360		$      36,414		$             93,380

 

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 (%)
	June 30, 2023		March 31, 2023		June 30, 2022		Q2 2023 vs Q1 2023		Q2 2023 vs Q2 2022
Non-interest income:
Origination fees	$         70,989		$          70,543		$       149,252		1 %		(52) %
Servicing fees	22,015		26,380		18,166		(17) %		21 %
Gain on sales of loans	13,221		14,125		29,319		(6) %		(55) %
Net fair value adjustments	(23,442)		(15,414)		9,647		52 %		N/M
Marketplace revenue	82,783		95,634		206,384		(13) %		(60) %
Other non-interest income	3,035		3,356		7,448		(10) %		(59) %
Total non-interest income	85,818		98,990		213,832		(13) %		(60) %
Total interest income	214,486		202,413		128,468		6 %		67 %
Total interest expense	67,834		55,709		12,242		22 %		454 %
Net interest income	146,652		146,704		116,226		— %		26 %
Total net revenue	232,470		245,694		330,058		(5) %		(30) %
Provision for credit losses	66,595		70,584		70,566		(6) %		(6) %
Non-interest expense:
Compensation and benefits	71,553		73,307		85,103		(2) %		(16) %
Marketing	23,940		26,880		61,497		(11) %		(61) %
Equipment and software	13,968		13,696		12,461		2 %		12 %
Depreciation and amortization	11,638		12,354		10,557		(6) %		10 %
Professional services	9,974		9,058		16,138		10 %		(38) %
Occupancy	4,684		4,310		6,209		9 %		(25) %
Other non-interest expense	15,322		17,703		17,421		(13) %		(12) %
Total non-interest expense	151,079		157,308		209,386		(4) %		(28) %
Income before income tax benefit (expense)	14,796		17,802		50,106		(17) %		(70) %
Income tax benefit (expense)	(4,686)		(4,136)		131,954		13 %		N/M
Net income	$         10,110		$          13,666		$       182,060		(26) %		(94) %
Net income per share:
Basic EPS	$            0.09		$              0.13		$            1.77		(31) %		(95) %
Diluted EPS	$            0.09		$              0.13		$            1.73		(31) %		(95) %
Weighted-average common shares – Basic	107,892,590		106,912,139		102,776,867		1 %		5 %
Weighted-average common shares – Diluted	107,895,072		106,917,770		105,042,626		1 %		3 %

N/M – Not meaningful

 

LENDINGCLUB CORPORATION NET INTEREST INCOME (In thousands, except percentages or as noted) (Unaudited)
	Consolidated LendingClub Corporation (1)
	Three Months Ended June 30, 2023						Three Months Ended March 31, 2023						Three Months Ended June 30, 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	$ 1,512,700		$  19,134		5.06 %		$ 1,220,677		$   13,714		4.49 %		$ 1,023,192		$    2,279		0.89 %
Securities available for sale at fair value	437,473		5,948		5.44 %		362,960		3,900		4.30 %		409,327		4,426		4.32 %
Loans held for sale at fair value	106,865		4,433		16.59 %		110,580		5,757		20.83 %		156,503		7,130		18.22 %
Loans and leases held for investment:
Unsecured personal loans	4,360,506		145,262		13.33 %		4,066,713		133,687		13.15 %		2,692,148		95,529		14.19 %
Commercial and other consumer loans	1,156,751		16,823		5.82 %		1,175,504		16,780		5.71 %		1,061,547		13,382		5.04 %
Loans and leases held for investment at amortized cost	5,517,257		162,085		11.75 %		5,242,217		150,467		11.48 %		3,753,695		108,911		11.61 %
Loans held for investment at fair value	670,969		21,692		12.93 %		836,313		26,892		12.86 %		16,991		631		14.85 %
Total loans and leases held for investment	6,188,226		183,777		11.88 %		6,078,530		177,359		11.67 %		3,770,686		109,542		11.62 %
Retail and certificate loans held for investment at fair value	32,760		1,194		14.57 %		46,525		1,683		14.47 %		144,613		5,091		14.08 %
Total interest-earning assets	8,278,024		214,486		10.36 %		7,819,272		202,413		10.35 %		5,504,321		128,468		9.34 %
Cash and due from banks and restricted cash	78,221						71,878						75,517
Allowance for loan and lease losses	(354,348)						(338,359)						(202,904)
Other non-interest earning assets	686,956						666,650						490,412
Total assets	$ 8,688,853						$ 8,219,441						$ 5,867,346
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$ 1,397,302		$    7,760		2.23 %		$ 1,633,691		$     7,568		1.88 %		$ 2,463,710		$    2,664		0.43 %
Savings accounts and certificates of deposit	5,546,862		58,761		4.25 %		4,747,478		45,705		3.90 %		1,555,607		3,414		0.88 %
Interest-bearing deposits	6,944,164		66,521		3.84 %		6,381,169		53,273		3.39 %		4,019,317		6,078		0.61 %
Retail notes, certificates and secured borrowings	32,760		1,194		14.57 %		46,525		1,683		14.47 %		144,613		5,091		14.08 %
Other interest-bearing liabilities	31,409		119		1.51 %		107,520		753		2.80 %		195,948		1,073		2.19 %
Total interest-bearing liabilities	7,008,333		67,834		3.88 %		6,535,214		55,709		3.46 %		4,359,878		12,242		1.12 %
Non-interest bearing deposits	205,750						241,954						292,750
Other liabilities	272,142						263,868						261,795
Total liabilities	$ 7,486,225						$ 7,041,036						$ 4,914,423

 

LENDINGCLUB CORPORATION NET INTEREST INCOME (Continued) (In thousands, except percentages or as noted) (Unaudited)
	Consolidated LendingClub Corporation (1)
	Three Months Ended June 30, 2023						Three Months Ended March 31, 2023						Three Months Ended June 30, 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
Total equity	$ 1,202,628						$ 1,178,405						$    952,922
Total liabilities and equity	$ 8,688,853						$ 8,219,441						$ 5,867,345
Interest rate spread					6.48 %						6.90 %						8.21 %
Net interest income and net interest margin			$  146,652		7.09 %				$ 146,704		7.50 %				$  116,226		8.45 %

(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, 2023		December 31, 2022
Assets
Cash and due from banks	$            20,950		$         23,125
Interest-bearing deposits in banks	1,182,974		1,033,905
Total cash and cash equivalents	1,203,924		1,057,030
Restricted cash	34,792		67,454
Securities available for sale at fair value ($579,704 and $399,668 at amortized cost, respectively)	523,579		345,702
Loans held for sale at fair value	250,361		110,400
Loans and leases held for investment	5,533,349		5,033,154
Allowance for loan and lease losses	(355,163)		(327,852)
Loans and leases held for investment, net	5,178,186		4,705,302
Loans held for investment at fair value	404,119		925,938
Retail and certificate loans held for investment at fair value	26,837		55,425
Property, equipment and software, net	151,608		136,473
Goodwill	75,717		75,717
Other assets	493,383		500,306
Total assets	$        8,342,506		$     7,979,747
Liabilities and Equity
Deposits:
Interest-bearing	$        6,653,749		$     6,158,560
Noninterest-bearing	189,786		233,993
Total deposits	6,843,535		6,392,553
Borrowings	15,675		74,858
Retail notes, certificates and secured borrowings at fair value	26,837		55,425
Other liabilities	250,936		292,617
Total liabilities	7,136,983		6,815,453
Equity
Common stock, $0.01 par value; 180,000,000 shares authorized; 108,694,120 and 106,546,995 shares issued and outstanding, respectively	1,087		1,065
Additional paid-in capital	1,647,593		1,628,590
Accumulated deficit	(403,969)		(427,745)
Accumulated other comprehensive loss	(39,188)		(37,616)
Total equity	1,205,523		1,164,294
Total liabilities and equity	$        8,342,506		$     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
		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022
GAAP Net income		$            10,110		$            13,666		$               23,591		$               43,198		$          182,060
Less: Provision for credit losses		(66,595)		(70,584)		(61,512)		(82,739)		(70,566)
Less: Income tax benefit (expense)		(4,686)		(4,136)		2,439		7,243		131,954
Pre-provision net revenue		$            81,391		$            88,386		$               82,664		$             118,694		$          120,672

 

		For the three months ended
		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022
Non-interest income		$            85,818		$            98,990		$            127,465		$             181,237		$          213,832
Net interest income		146,652		146,704		135,243		123,676		116,226
Total net revenue		232,470		245,694		262,708		304,913		330,058
Non-interest expense		(151,079)		(157,308)		(180,044)		(186,219)		(209,386)
Pre-provision net revenue		81,391		88,386		82,664		118,694		120,672
Provision for credit losses		(66,595)		(70,584)		(61,512)		(82,739)		(70,566)
Income before income tax benefit (expense)		14,796		17,802		21,152		35,955		50,106
Income tax benefit (expense)		(4,686)		(4,136)		2,439		7,243		131,954
GAAP Net income		$            10,110		$            13,666		$              23,591		$               43,198		$          182,060

 

Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit
		For the three months ended
		December 31, 2022		September 30, 2022		June 30, 2022
GAAP Net income		$             23,591		$             43,198		$           182,060
Less: Income tax benefit from release of tax valuation allowance		3,180		5,015		135,300
Net income excluding income tax benefit		$             20,411		$             38,183		$             46,760
GAAP Diluted EPS		$                 0.22		$                 0.41		$                 1.73
(A)	Income tax benefit from release of tax valuation allowance	$               3,180		$               5,015		$           135,300
(B)	Weighted-average common shares – Diluted	105,984,612		105,853,938		105,042,626
(A/B)	Diluted EPS impact of income tax benefit	$                 0.03		$                 0.05		$                 1.28
Diluted EPS excluding income tax benefit		$                 0.19		$                 0.36		$                 0.45

 

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
	June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022
GAAP common equity	$     1,205,523		$     1,190,742		$       1,164,294		$       1,121,410		$     1,079,117
Less: Goodwill	(75,717)		(75,717)		(75,717)		(75,717)		(75,717)
Less: Intangible assets	(14,167)		(15,201)		(16,334)		(17,512)		(18,690)
Tangible common equity	$     1,115,639		$     1,099,824		$       1,072,243		$       1,028,181		$        984,710
Book value per common share
GAAP common equity	$     1,205,523		$     1,190,742		$       1,164,294		$       1,121,410		$     1,079,117
Common shares issued and outstanding	108,694,120		107,460,734		106,546,995		105,088,761		103,630,776
Book value per common share	$            11.09		$            11.08		$              10.93		$              10.67		$            10.41
Tangible book value per common share
Tangible common equity	$     1,115,639		$     1,099,824		$       1,072,243		$       1,028,181		$        984,710
Common shares issued and outstanding	108,694,120		107,460,734		106,546,995		105,088,761		103,630,776
Tangible book value per common share	$            10.26		$            10.23		$              10.06		$                9.78		$              9.50

 

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SOURCE LendingClub Corporation

FAQ

What are LendingClub Corporation's financial results for Q2 2023?

LendingClub Corporation reported total assets of $8.3 billion, deposits of $6.8 billion, loans held for investment of $5.6 billion, net revenue of $232.5 million, net income of $10.1 million, and diluted EPS of $0.09 in Q2 2023.

What is LendingClub Corporation's liquidity and capital position?

LendingClub Corporation maintains strong liquidity and capital with a consolidated Tier 1 leverage ratio of 12.4% and a consolidated Common Equity Tier 1 capital ratio of 16.1%.

What is LendingClub Corporation's financial outlook for Q3 2023?

LendingClub Corporation expects loan originations of $1.4B to $1.7B and a Pre-Provision Net Revenue (PPNR) of $40M to $50M in Q3 2023.