LendingClub Reports Third Quarter 2021 Results

Rhea-AI Summary

LendingClub Corporation (NYSE: LC) reported strong financial results for Q3 2021, with record revenue of $246.2 million, a 20% increase sequentially, and net income of $27.2 million, up 190% from the previous quarter. The bank's loan portfolio grew 25%, while deposits rose 12% to $2.8 billion. Notably, net income was negatively impacted by $51.5 million in notable items, primarily due to credit loss provisioning and revenue deferrals. The company has raised its full-year guidance for both revenue and loan originations, reflecting continued momentum in the digital banking sector.

Positive

• Record revenue of $246.2 million, up 20% QoQ.
• Net income increased 190% sequentially to $27.2 million.
• Loan portfolio grew 25% from the previous quarter.
• Deposits grew 12% sequentially to $2.8 billion.
• Full-year guidance raised for both revenue and loan originations.

Negative

• Net income impacted by $51.5 million of notable items.
• Earnings per share reduced by $0.49 due to credit loss provisioning.

SAN FRANCISCO, Oct. 27, 2021 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the third quarter ended September 30, 2021.

"Our strong revenue and earnings growth trajectory has become evident following our transformation into a digital marketplace bank," said Scott Sanborn, LendingClub's CEO. "Our success continues to be driven by our competitive advantages, including our growing base of 3.8 million members, our exceptional data science capabilities, and our proven marketplace model. With our enhanced operating leverage, digital first infrastructure, and the ongoing move of consumers toward online banking, there's no better time to grow a next generation digital bank like LendingClub."

Record Revenue and Net Income Reflects Strong Execution and Business Model Transformation.

• Record revenue of $246.2 million with total sequential revenue growth of 20% outpacing origination growth of 14%.
• New recurring stream of net interest income grew 42% sequentially to $65.3 million, as the bank's loan portfolio (excluding PPP loans) grew 25% from June 30, 2021.
• Marketplace revenue grew 15% sequentially, reflecting higher origination fees associated with loan origination growth.
• Deposits grew 12% sequentially to $2.8 billion, in line with growth in our loans held for investment.
• Record net income of $27.2 million, up 190% sequentially, highlighting positive operating leverage in the fully integrated digital bank business model.
• Net income of $27.2 million and earnings per share of $0.26 were negatively impacted by $51.5 million of notable items: $34.0 million of Current Expected Credit Loss (CECL) provisioning and $17.5 million of net revenue deferrals both driven by strong retained loan growth. These items reduced our earnings per share by $0.49 in the third quarter of 2021.

 

	Three Months Ended
($ in millions)	September 30, 2021				June 30, 2021				QoQ $ Change				QoQ % Change
Loan originations(1)	$	3,106.7			$	2,722.4			$	384.3			14	%
Total revenue	$	246.2			$	204.4			$	41.8			20	%
Consolidated net income	$	27.2			$	9.4			$	17.8			190	%

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

 

Financial Outlook – Raising Full Year Targets

(millions)	Fourth Quarter 2021	Full Year 2021	Versus Prior Full Year 2021 Guidance
Loan originations(1)	$2.8B to $3.0B	$10.1B to $10.3B	+$100M to +$300M
Total revenue	$240M to $250M	$796M to $806M	+$26M to +$46M
Consolidated net income	$20M to $25M	$9M to $14M	+$17M to +$22M

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

 

Notable Items Impacting Q3'21 Consolidated Net Income

(millions)	Consolidated Net Income Impact(1)	Per Diluted Share Impact	Commentary
Revenue deferrals, net of amortization	$(17.5)	$0.17	Origination fee and cost deferrals, net of interest income amortization during the period
Provision for credit losses, less net charge-offs	$(34.0)	$0.32	Primarily for consumer loans originated and retained in the quarter
Total	$(51.5)	$0.49

(1)	Amounts presented net of tax.

 

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 $65 billion in loans, our artificial intelligence-driven 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 3.8 million members have joined the Club to help reach their financial goals. For more information about LendingClub, visit https://www.lendingclub.com.

Conference Call and Webcast Information

The LendingClub third 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, October 27, 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 3514635, 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 November 3, 2021, by calling +1 (877) 344-7529 or outside the U.S. +1 (412) 317-0088, with Conference ID 10160701. 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 our competitive advantages, ability to grow our business, 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
	September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020				Q/Q			Y/Y
Operating Highlights:
Non-interest income	$	180,878			$	158,476			$	87,334			$	72,597			$	57,750			14	%		213	%
Net interest income	$	65,288			$	45,905			$	18,506			$	2,899			13,294				42	%		391	%
Total net revenue	$	246,166			$	204,381			$	105,840			$	75,496			$	71,044			20	%		246	%
Consolidated net income (loss)	$	27,185			$	9,371			$	(47,084)			$	(26,655)			$	(34,325)			190	%		N/M
EPS – basic	$	0.27			$	0.10			$	(0.49)			$	(0.29)			$	(0.38)			170	%		N/M
EPS – diluted	$	0.26			$	0.09			$	(0.49)			$	(0.29)			$	(0.38)			189	%		N/M
LendingClub Bank Performance Metrics:
Net interest margin	7.1		%		5.5		%		3.3		%		N/A				N/A
Efficiency ratio (1)	67.5		%		69.0		%		104.8		%		N/A				N/A
Return on average equity (ROE)	26.5		%		34.7		%		N/A				N/A				N/A
Return on average total assets (ROA)	3.7		%		4.7		%		N/A				N/A				N/A
LendingClub Bank Capital Ratios:
Common Equity Tier 1 Capital Ratio	18.0		%		18.7		%		20.9		%		N/A				N/A
Tier 1 Leverage Ratio	14.1		%		13.5		%		12.9		%		N/A				N/A
Consolidated LendingClub Corporation Performance Metrics:
Net interest margin	6.3		%		4.7		%		1.8		%		0.7		%		2.9		%
Efficiency ratio (1)	72.6		%		78.4		%		126.8		%		N/A				N/A
Return on average equity (ROE)	13.8		%		5.0		%		N/A				N/A				N/A
Return on average total assets (ROA)	2.4		%		0.8		%		N/A				N/A				N/A
Marketing expense as a % of loan originations	1.6		%		1.3		%		1.3		%		0.9		%		0.4		%
Loan originations (in millions) (2):
Marketplace loans	$	2,471			$	2,182			$	1,139			$	912			$	584			13	%		323	%
Loan originations held for investment	$	636			$	541			$	344			$	—			$	—			18	%		N/A
Total loan originations	$	3,107			$	2,722			$	1,483			$	912			$	584			14	%		432	%
Servicing portfolio AUM (in millions) (3)	$	11,592			$	10,741			$	10,271			$	11,002			$	12,267			8	%		(6)	%
Balance Sheet Data:
Loans and leases held for investment, net, excluding PPP loans	$	2,235,698			$	1,791,492			$	1,414,900			$	—			$	—			25	%		N/A
PPP loans	$	367,558			$	507,553			$	664,400			$	—			$	—			(28)	%		N/A
Total loans and leases held for investment, net	$	2,603,256			$	2,299,045			$	2,079,300			$	—			$	—			13	%		N/A
Total assets	$	4,750,760			$	4,370,101			$	4,491,089			$	1,863,293			$	1,979,457			9	%		140	%
Total deposits	$	2,838,719			$	2,539,704			$	2,373,437			$	—			$	—			12	%		N/A
Total liabilities	$	3,945,970			$	3,607,742			$	3,757,954			$	1,139,122			$	1,245,565			9	%		217	%
Total equity	$	804,790			$	762,359			$	733,135			$	724,171			$	733,892			6	%		10	%
Allowance Ratios:
Allowance for loan and lease losses to total loans and leases held for investment	3.9		%		3.0		%		1.7		%		N/A				N/A
Allowance for loan and lease losses to total loans and leases held for investment, excluding PPP loans	4.5		%		3.8		%		2.5		%		N/A				N/A
Allowance for loan and lease losses to consumer loans and leases held for investment	5.2		%		4.3		%		2.3		%		N/A				N/A
Allowance for loan and lease losses to commercial loans and leases held for investment	1.6		%		1.5		%		1.3		%		N/A				N/A
Allowance for loan and lease losses to commercial loans and leases held for investment, excluding PPP loans	2.6		%		2.8		%		1.7		%		N/A				N/A

N/M – Not meaningful
N/A – Not applicable
(1)	Calculated as the ratio of non-interest expense to total net revenue.
(2)	Includes unsecured personal loans, auto loans, and education and patient finance loans only.
(3)	Loans serviced on our platform, which includes personal and auto loans serviced for others and retained for investment by the Company.

 

LENDINGCLUB CORPORATION LOANS AND LEASES HELD FOR INVESTMENT (In thousands, except percentages or as noted) (Unaudited)
	September 30, 2021				June 30, 2021
Unsecured personal	$	1,258,279			$	776,338
Residential mortgages	141,200				152,528
Secured consumer	314,539				326,318
Other consumer	1,220				157
Total consumer loans held for investment	1,715,238				1,255,341
Equipment finance (1)	157,457				161,465
Commercial real estate	316,135				294,954
Commercial and industrial (2)	519,162				658,366
Total commercial loans and leases held for investment	992,754				1,114,785
Total loans and leases held for investment	2,707,992				2,370,126
Allowance for loan and lease losses	(104,736)				(71,081)
Loans and leases held for investment, net	$	2,603,256			$	2,299,045

(1)	Comprised of sales-type leases for equipment.
(2)	Includes $367.6 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
	September 30, 2021												June 30, 2021
	Consumer				Commercial				Total				Consumer				Commercial				Total
Allowance for loan and lease losses, beginning of period	$	54,058			$	17,023			$	71,081			$	19,785			$	16,347			$	36,132
Credit loss expense for loans and leases held for investment	37,695				(562)				37,133				34,317				659				34,976
Charge-offs	(3,142)				(1,194)				(4,336)				(90)				(156)				(246)
Recoveries	20				838				858				46				173				219
Allowance for loan and lease losses, end of period	$	88,631			$	16,105			$	104,736			$	54,058			$	17,023			$	71,081

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited)
	Three Months Ended
	September 30, 2021				June 30, 2021				Change (%)
Non-interest income:
Marketplace revenue (1)	$	174,556			$	151,735			15	%
Other non-interest income	6,322				6,741				(6)	%
Total non-interest income	180,878				158,476				14	%
Interest income:
Interest on loans held for sale	8,536				8,694				(2)	%
Interest and fees on loans and leases held for investment	57,644				39,068				48	%
Interest on retail and certificate loans held for investment at fair value	12,172				16,014				(24)	%
Interest on other loans held for investment at fair value	973				1,222				(20)	%
Interest on securities available for sale	3,180				2,539				25	%
Other interest income	355				190				87	%
Total interest income	82,860				67,727				22	%
Interest expense:
Interest on deposits	1,899				1,699				12	%
Interest on short-term borrowings	849				1,003				(15)	%
Interest on retail notes, certificates and secured borrowings	12,172				16,014				(24)	%
Interest on Structured Program borrowings	2,120				2,668				(21)	%
Interest on other long-term debt	532				438				21	%
Total interest expense	17,572				21,822				(19)	%
Net interest income	65,288				45,905				42	%
Total net revenue	246,166				204,381				20	%
Provision for credit losses	37,524				34,634				8	%
Non-interest expense:
Compensation and benefits	73,304				71,925				2	%
Marketing	50,782				35,107				45	%
Equipment and software	10,297				9,281				11	%
Occupancy	6,486				6,157				5	%
Depreciation and amortization	10,549				11,508				(8)	%
Professional services	11,750				11,520				2	%
Other non-interest expense	15,607				14,641				7	%
Total non-interest expense	178,775				160,139				12	%
Income before income tax expense	29,867				9,608				211	%
Income tax expense	2,682				237				N/M
Consolidated net income	$	27,185			$	9,371			190	%
Net income per share attributable to common stockholders – Basic	$	0.27			$	0.10
Net income per share attributable to common stockholders – Diluted	$	0.26			$	0.09
Weighted-average common shares – Basic	99,073,507				97,785,089
Weighted-average common shares – Diluted	106,108,662				102,031,088

N/M – Not meaningful

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued) (In thousands, except share and per share data) (Unaudited)
(1) Marketplace revenue consists of the following:
	Three Months Ended
	September 30, 2021				June 30, 2021				Change (%)
Origination fees	$	129,125			$	113,802			13	%
Servicing fees	20,819				22,714				(8)	%
Gain on sales of loans	21,907				19,317				13	%
Net fair value adjustments	2,705				(4,098)				N/M
Total marketplace revenue	$	174,556			$	151,735			15	%

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT (In thousands, except share and per share data) (Unaudited)
	Three months ended September 30, 2021
	LendingClub Bank				LendingClub Corporation (Parent only)				Intercompany Eliminations				Total
Non-interest income:
Marketplace revenue	$	151,109			$	23,447			$	—			$	174,556
Other non-interest income	25,393				4,140				(23,211)				6,322
Total non-interest income	176,502				27,587				(23,211)				180,878
Interest income:
Interest income	64,606				18,254				—				82,860
Interest expense	(2,270)				(15,302)				—				(17,572)
Net interest income	62,336				2,952				—				65,288
Total net revenue	238,838				30,539				(23,211)				246,166
Reversal of (provision for) credit losses	(38,019)				495				—				(37,524)
Non-interest expense	(161,101)				(40,885)				23,211				(178,775)
Income (Loss) before income tax benefit (expense)	39,718				(9,851)				—				29,867
Income tax benefit (expense)	(4,670)				12,607				(10,619)				(2,682)
Consolidated net income (loss)	$	35,048			$	2,756			$	(10,619)			$	27,185

 

	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	27,269			(17,661)				—				9,608
Income tax benefit (expense)	12,513			8,922				(21,672)				(237)
Consolidated 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 September 30, 2021											Three Months Ended June 30, 2021
	Average Balance				Interest Income/ Expense				Average Yield/ Rate			Average Balance				Interest Income/ Expense				Average Yield/ Rate
Interest-earning assets (1)
Cash, cash equivalents and restricted cash	$	695,294			$	352			0.20	%		$	551,895			$	186			0.13	%
Securities available for sale at fair value	182,882				632				1.38	%		165,579				348				0.84	%
Loans held for sale	145,262				5,978				16.46	%		144,037				5,723				15.89	%
Loans and leases held for investment:
Unsecured personal loans	991,297				39,532				15.95	%		511,787				19,499				15.24	%
Secured consumer loans	464,194				4,688				4.04	%		532,426				5,173				3.89	%
Commercial loans and leases	616,823				7,887				5.11	%		623,735				9,062				5.81	%
PPP loans	436,785				5,537				5.07	%		615,942				5,334				3.46	%
Loans and leases held for investment	2,509,099				57,644				9.19	%		2,283,890				39,068				6.84	%
Total interest-earning assets	3,532,537				64,606				7.32	%		3,145,401				45,325				5.76	%
Cash and due from banks	29,290											34,612
Allowance for loan and lease losses	(86,686)											(51,109)
Other non-interest earning assets	270,594											221,870
Total assets	$	3,745,735										$	3,350,774
Interest-bearing liabilities
Interest-bearing deposits
Checking and money market accounts	$	2,221,365			$	1,707			0.30	%		$	2,071,112			$	1,618			0.31	%
Savings accounts and certificates of deposit	307,807				192				0.25	%		301,939				81				0.11	%
Interest-bearing deposits	2,529,172				1,899				0.30	%		2,373,051				1,699				0.29	%
Short-term borrowings	321				—				—	%		2,138				1				0.06	%
Advances from PPPLF	416,748				371				0.36	%		312,168				272				0.35	%
Other long-term debt	—				—				—	%		708				—				—	%
Total interest-bearing liabilities	2,946,241				2,270				0.31	%		2,688,065				1,972				0.29	%
Non-interest bearing deposits	114,065											102,709
Other liabilities	155,806											100,835
Total liabilities	$	3,216,112										$	2,891,609
Total equity	$	529,623										$	459,165
Total liabilities and equity	$	3,745,735										$	3,350,774
Interest rate spread									7.01	%										5.47	%
Net interest income and net interest margin					$	62,336			7.06	%						$	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)
	Three Months Ended September 30, 2021
	LendingClub Bank											LendingClub Corporation (Parent only)											Consolidated LendingClub Corporation
	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 (1)
Cash, cash equivalents and restricted cash	$	695,294			$	352			0.20	%		$	83,405			$	3			0.01	%		$	778,667			$	355			0.18	%
Securities available for sale at fair value	182,882				632				1.38	%		83,804				2,548				12.16	%		266,686				3,180				4.77	%
Loans held for sale at fair value	145,262				5,978				16.46	%		81,160				2,558				12.60	%		226,422				8,536				15.08	%
Loans and leases held for investment:
Unsecured personal loans	991,297				39,532				15.95	%		—				—				—	%		991,297				39,532				15.95	%
Secured consumer loans	464,194				4,688				4.04	%		—				—				—	%		464,194				4,688				4.04	%
Commercial loans and leases	616,823				7,887				5.11	%		—				—				—	%		616,823				7,887				5.11	%
PPP loans	436,785				5,537				5.07	%		—				—				—	%		436,785				5,537				5.07	%
Loans and leases held for investment	2,509,099				57,644				9.19	%		—				—				—	%		2,509,099				57,644				9.19	%
Retail and certificate loans held for investment at fair value	—				—				—	%		344,205				12,172				14.15	%		344,205				12,172				14.15	%
Other loans held for investment at fair value	—				—				—	%		30,981				973				12.58	%		30,981				973				12.58	%
Total interest-earning assets	3,532,537				64,606				7.32	%		623,555				18,254				11.71	%		4,156,060				82,860				7.97	%
Cash and due from banks and restricted cash	29,290											99,985											96,733
Allowance for loan and lease losses	(86,686)											—											(86,686)
Other non-interest earning assets	270,594											760,131											449,964
Total assets	$	3,745,735										$	1,483,671										$	4,616,071
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$	2,221,365			$	1,707			0.30	%		$	—			$	—			—	%		$	2,221,365			$	1,707			0.30	%
Savings accounts and certificates of deposit	307,807				192				0.25	%		—				—				—	%		307,807				192				0.25	%
Interest-bearing deposits	2,529,172				1,899				0.30	%		—				—				—	%		2,529,172				1,899				0.30	%
Short-term borrowings	321				—				—	%		56,903				849				5.97	%		57,224				849				5.93	%
Advances from PPPLF	416,748				371				0.36	%		—				—				—	%		416,748				371				0.36	%
Retail notes, certificates and secured borrowings	—				—				—	%		344,087				12,173				14.15	%		344,087				12,173				14.15	%
Structured Program borrowings	—				—				—	%		100,178				2,119				8.46	%		100,178				2,119				8.46	%
Other long-term debt	—				—				—	%		15,606				161				4.13	%		15,606				161				4.13	%
Total interest-bearing liabilities	2,946,241				2,270				0.31	%		516,774				15,302				11.84	%		3,463,015				17,572				2.03	%
Non-interest bearing deposits	114,065											—											81,491
Other liabilities	155,806											183,962											285,292
Total liabilities	$	3,216,112										$	700,736										$	3,829,798
Total equity	$	529,623										$	782,935										$	786,273
Total liabilities and equity	$	3,745,735										$	1,483,671										$	4,616,071
Interest rate spread									7.01	%										(0.13)	%										5.95	%
Net interest income and net interest margin					$	62,336			7.06	%						$	2,952			1.89	%						$	65,288			6.28	%

(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 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 CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts) (Unaudited)
	September 30, 2021				December 31, 2020
Assets
Cash and due from banks	$	22,604			$	5,197
Interest-bearing deposits in banks	839,547				519,766
Total cash and cash equivalents	862,151				524,963
Restricted cash	77,577				103,522
Securities available for sale at fair value (includes $268,732 and $159,164 at amortized cost, respectively)	274,930				142,226
Loans held for sale at fair value	152,160				121,902
Loans and leases held for investment	2,707,992				—
Allowance for loan and lease losses	(104,736)				—
Loans and leases held for investment, net	2,603,256				—
Retail and certificate loans held for investment at fair value	298,541				636,686
Other loans held for investment at fair value	27,229				49,954
Property, equipment and software, net	96,073				96,641
Goodwill	75,717				—
Other assets	283,126				187,399
Total assets	$	4,750,760			$	1,863,293
Liabilities and Equity
Deposits:
Interest-bearing	$	2,614,663			$	—
Noninterest-bearing	224,056				—
Total deposits	2,838,719				—
Short-term borrowings	46,110				104,989
Advances from Paycheck Protection Program Liquidity Facility (PPPLF)	391,945				—
Retail notes, certificates and secured borrowings at fair value	298,541				636,774
Payable on Structured Program borrowings	89,252				152,808
Other long-term debt	15,563				—
Other liabilities	265,840				244,551
Total liabilities	3,945,970				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; 99,782,192 and 88,149,510 shares issued and outstanding, respectively	998				881
Additional paid-in capital	1,594,646				1,508,020
Accumulated deficit	(796,742)				(786,214)
Treasury stock, at cost; 4,251 and 0 shares, respectively	(92)				—
Accumulated other comprehensive income	5,980				1,484
Total equity	804,790				724,171
Total liabilities and equity	$	4,750,760			$	1,863,293

 

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
	September 30, 2021				December 31, 2020				September 30, 2021				December 31, 2020				September 30, 2021				December 31, 2020				September 30, 2021				December 31, 2020
Assets
Total cash and cash equivalents	$	825,538			$	—			$	100,815			$	524,963			$	(64,202)			$	—			$	862,151			$	524,963
Restricted cash	—				—				84,827				103,522				(7,250)				—				77,577				103,522
Securities available for sale at fair value	201,438				—				73,492				142,226				—				—				274,930				142,226
Loans held for sale at fair value	82,483				—				69,677				121,902				—				—				152,160				121,902
Loans and leases held for investment, net	2,603,256				—				—				—				—				—				2,603,256				—
Retail and certificate loans held for investment at fair value	—				—				298,541				636,686				—				—				298,541				636,686
Other loans held for investment at fair value	—				—				27,229				49,954				—				—				27,229				49,954
Property, equipment and software, net	26,457				—				69,616				96,641				—				—				96,073				96,641
Investment in subsidiary	—				—				511,394				—				(511,394)				—				—				—
Goodwill	75,717				—				—				—				—				—				75,717				—
Other assets	199,050				—				176,994				187,399				(92,918)				—				283,126				187,399
Total assets	4,013,939				—				1,412,585				1,863,293				(675,764)				—				4,750,760				1,863,293
Liabilities and Equity
Total deposits	2,910,171				—				—				—				(71,452)				—				2,838,719				—
Short-term borrowings	321				—				45,789				104,989				—				—				46,110				104,989
Advances from PPPLF	391,945				—				—				—				—				—				391,945				—
Retail notes, certificates and secured borrowings at fair value	—				—				298,541				636,774				—				—				298,541				636,774
Payable on Structured Program borrowings	—				—				89,252				152,808				—				—				89,252				152,808
Other long-term debt	—				—				15,563				—				—				—				15,563				—
Other liabilities	154,521				—				171,764				244,551				(60,445)				—				265,840				244,551
Total liabilities	3,456,958				—				620,909				1,139,122				(131,897)				—				3,945,970				1,139,122
Total equity	556,981				—				791,676				724,171				(543,867)				—				804,790				724,171
Total liabilities and equity	$	4,013,939			$	—			$	1,412,585			$	1,863,293			$	(675,764)			$	—			$	4,750,760			$	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.
	September 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	$	—		$	—		$	862,151		$	862,151			$	—		$	—		$	524,963		$	524,963
Restricted cash	—			12,537			65,040			77,577				—			13,473			90,049			103,522
Securities available for sale at fair value	—			—			274,930			274,930				—			—			142,226			142,226
Loans held for sale at fair value (4)	—			52,175			99,985			152,160				—			92,802			29,100			121,902
Loans and leases held for investment, net	—			—			2,603,256			2,603,256				—			—			—			—
Retail and certificate loans held for investment at fair value	283,153			15,388			—			298,541				584,066			52,620			—			636,686
Other loans held for investment at fair value (4)	—			24,333			2,896			27,229				—			46,120			3,834			49,954
Property, equipment and software, net	—			—			96,073			96,073				—			—			96,641			96,641
Goodwill	—			—			75,717			75,717				—			—			—			—
Other assets	1,761			491			280,874			283,126				3,797			1,134			182,468			187,399
Total assets	$	284,914		$	104,924		$	4,360,922		$	4,750,760			$	587,863		$	206,149		$	1,069,281		$	1,863,293
Liabilities and Equity
Total deposits	$	—		$	—		$	2,838,719		$	2,838,719			$	—		$	—		$	—		$	—
Short-term borrowings	—			—			46,110			46,110				—			—			104,989			104,989
Advances from PPPLF	—			—			391,945			391,945				—			—			—			—
Retail notes, certificates and secured borrowings at fair value	283,153			15,388			—			298,541				584,066			52,620			88			636,774
Payable on Structured Program borrowings (4)	—			89,252			—			89,252				—			152,808			—			152,808
Other long-term debt	—			—			15,563			15,563				—			—			—			—
Other liabilities	1,761			284			263,795			265,840				3,797			721			240,033			244,551
Total liabilities	284,914			104,924			3,556,132			3,945,970				587,863			206,149			345,110			1,139,122
Total equity	—			—			804,790			804,790				—			—			724,171			724,171
Total liabilities and equity	$	284,914		$	104,924		$	4,360,922		$	4,750,760			$	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 $44.5 million and $77.2 million was equally matched and offset by interest income from the related loans of $44.5 million and $77.2 million for the first nine months 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 $11.9 million and $106.4 million was equally matched and offset by interest income on the loans of $11.9 million and $106.4 million for the first nine months 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 at fair value," "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 at fair value" and the related "Payable on Structured Program borrowings."

 

 

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SOURCE LendingClub Corporation