LendingClub Reports Third Quarter 2022 Results

Rhea-AI Summary

LendingClub Corporation (NYSE: LC) reported strong Q3 2022 results, with revenue growing 24% year-over-year to $304.9 million and diluted EPS increasing 58% to $0.41. Total assets rose 43% to $6.8 billion.

Loan originations were $3.5 billion, up 14%, while net interest income surged 89% to $123.7 million. The efficiency ratio improved to 61% from 73%, highlighting better operational efficiency.

Positive

• Revenue increased 24% year-over-year to $304.9 million.
• Diluted EPS grew 58% year-over-year to $0.41.
• Total assets rose 43% year-over-year to $6.8 billion.
• Loan originations increased 14% year-over-year to $3.5 billion.
• Net interest income surged 89% year-over-year to $123.7 million.
• Deposits increased 80% year-over-year to $5.1 billion.
• Efficiency ratio improved to 61% from 73% in the previous year.

Negative

• Marketplace revenue remained flat year-over-year at $173.8 million.
• Provision for credit losses increased to $82.7 million, reflecting growth in loan originations.

Revenue Increased 24% Year Over Year to $304.9 Million

Diluted Earnings Per Share Increased 58% Year Over Year to $0.41

Total Assets Grew 43% Year Over Year to $6.8 Billion

SAN FRANCISCO, Oct. 26, 2022  /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, 2022.

"We delivered solid results as we leaned into the strategic advantages of our digital bank in the face of a less favorable economic environment. We drove growth in recurring interest income supported by strong credit performance of our retained high-quality prime loan portfolio," said Scott Sanborn, LendingClub CEO. "As we anticipated, marketplace volumes were impacted by higher funding costs for certain loan investors, driven by rapidly increasing interest rates. Over time, as rates stabilize and we continue to reprice personal loans, we expect this impact to gradually moderate. Our digital bank and other strategic advantages position us to continue to effectively navigate the evolving economy and to capitalize on attractive growth opportunities as they emerge."

Third Quarter 2022 Results

	Loan originations were $3.5 billion, up 14% year over year.
	Total net revenue of $304.9 million grew 24% year over year, driven by growth in net interest income.
	Net interest income, a recurring stream of earnings for the company, increased 89% year over year to $123.7 million.
	Total loans held for investment (excluding PPP) grew 97% to $4.4 billion from September 30, 2021, reflecting growth in personal loan originations held for investment in the quarter of $1.2 billion, or 33% of total originations.
	Net interest margin expanded to 8.3% from 6.3% a year earlier, primarily reflecting a greater mix of personal loans which generate a higher yield than the rest of the loans held for investment.
	Marketplace revenue of $173.8 million remained flat year over year, roughly in line with marketplace sales as the company retained a higher percentage of loan originations to drive growth in recurring revenue.
	Deposits of $5.1 billion were up 80% from September 30, 2021, primarily reflecting growth in online savings deposits.
	Credit quality of the company's held-for-investment loan portfolio remained strong, with delinquency rates gradually normalizing as the portfolio seasons. The strong credit performance of the held-for-investment portfolio reflects the high quality credit profile of our borrowers with an average FICO of 730.
	Provision for credit losses of $82.7 million primarily reflects $1.2 billion of quarterly loan originations held for investment and loan portfolio growth of 97% year over year.
	The efficiency ratio improved to 61% from 73% in the third quarter of 2021 due to improved marketing efficiency, prudent management of non-marketing expenses and strong growth in net interest income.
	Net income of $43.2 million increased $16.0 million year over year. Net income for the third quarter of 2022 included an income tax benefit of $7.2 million. The earnings from the tax benefit enabled higher loan retention.
	Diluted earnings per share of $0.41 grew 58% year over year. The improvement from a year earlier primarily reflected revenue growth and improved operating efficiency, as well as a $0.05 per share benefit from the reversal of the deferred tax asset valuation allowance.
	Total equity of $1.1 billion was up $316.6 million, or 39%, from September 30, 2021, primarily reflecting net income generated over the period and the release of the deferred tax asset valuation allowance.
	Book value per common share of $10.67 increased 32% from September 30, 2021. Tangible book value per common share of $9.78 increased 38% from September 30, 2021.
	Substantial capital with a consolidated Tier 1 leverage ratio of 15.7% and consolidated Common Equity Tier 1 capital ratio of 18.3%.
	Pre-tax, pre-provision income of $118.7 million increased 76% year over year, driven by revenue growth and improved operating efficiency.

 

	Three Months Ended
($ in millions, except per share amounts)	September 30, 2022		June 30, 2022		September 30, 2021
Total net revenue	$            304.9		$          330.1		$            246.2
Non-interest expense	186.2		209.4		178.8
Pre-tax, pre-provision income	118.7		120.7		67.4
Provision for credit losses	82.7		70.6		37.5
Income before income tax benefit (expense)	36.0		50.1		29.9
Income tax benefit (expense)	7.2		132.0		(2.7)
Net income	$              43.2		$          182.1		$              27.2
Diluted EPS	$              0.41		$            1.73		$              0.26
Income tax benefit from release of tax valuation allowance	$               5.0		$          135.3		$                —
Net income excluding income tax benefit (1)	$              38.2		$            46.8		$              27.2
Diluted EPS excluding income tax benefit (1)	$              0.36		$            0.45		$              0.26

(1)	Third and second quarters of 2022 include income tax benefit of $5.0 million and $135.3 million, respectively, due to the release of a deferred tax asset valuation allowance. See page 3 of this release for additional information on our use of non-GAAP financial measures.

For a calculation of 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

The company provided full year net revenue and net income guidance for 2022.

	Fourth Quarter 2022	Full Year 2022
Total net revenue	$255M to $265M	$1,180M to $1,190M
Net income	$15M to $25M	$280M to $290M

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 $80 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 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 2022 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, October 26, 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 659586, 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 2, 2022, by calling +1 (866) 813-9403 or outside the U.S. +44 (204) 525-0658, with Access Code 037801. 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, 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 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. Net Income Excluding Income Tax Benefit adjusts for the release of a deferred tax asset valuation allowance in the third and second quarters 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.

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 on page 16 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)
	As of and for the three months ended										% Change
	September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021		Q/Q		Y/Y
Operating Highlights:
Non-interest income	$      181,237		$  213,832		$  189,857		$     179,111		$      180,878		(15) %		— %
Net interest income	123,676		116,226		99,680		83,132		65,288		6 %		89 %
Total net revenue	304,913		330,058		289,537		262,243		246,166		(8) %		24 %
Non-interest expense	186,219		209,386		191,204		188,220		178,775		(11) %		4 %
Pre-tax, pre-provision income	118,694		120,672		98,333		74,023		67,391		(2) %		76 %
Provision for credit losses	82,739		70,566		52,509		45,149		37,524		17 %		120 %
Income before income tax benefit (expense)	35,955		50,106		45,824		28,874		29,867		(28) %		20 %
Income tax benefit (expense)	7,243		131,954		(4,988)		234		(2,682)		N/M		N/M
Net income	43,198		182,060		40,836		29,108		27,185		(76) %		59 %
Income tax benefit from release of tax valuation allowance	5,015		135,300		—		—		—		N/M		N/M
Net income excluding income tax benefit(1)(2)	$        38,183		$    46,760		$    40,836		$       29,108		$        27,185		(18) %		40 %
Basic EPS – common stockholders	$            0.41		$        1.77		$        0.40		$           0.29		$            0.27		(77) %		52 %
Diluted EPS – common stockholders	$            0.41		$        1.73		$        0.39		$           0.27		$            0.26		(76) %		58 %
Diluted EPS excluding income tax benefit(1)(2)	$            0.36		$        0.45		$        0.39		$           0.27		$            0.26		(20) %		38 %
LendingClub Corporation Performance Metrics:
Net interest margin	8.3 %		8.5 %		8.3 %		7.6 %		6.3 %
Efficiency ratio(3)	61.1 %		63.4 %		66.0 %		71.8 %		72.6 %
Return on average equity (ROE)	14.2 %		33.8 %		18.7 %		14.1 %		13.8 %
Return on average total assets (ROA)	2.5 %		5.5 %		3.1 %		2.4 %		2.4 %
Marketing expense as a % of loan originations	1.3 %		1.6 %		1.7 %		1.7 %		1.6 %
LendingClub Corporation Capital Metrics:
Common Equity Tier 1 Capital Ratio	18.3 %		20.0 %		20.6 %		21.3 %		22.8 %
Tier 1 Leverage Ratio	15.7 %		16.2 %		15.6 %		16.5 %		16.2 %
Book Value per Common Share	$          10.67		$      10.41		$        8.68		$           8.41		$            8.07		2 %		32 %
Tangible Book Value per Common Share(2)	$            9.78		$        9.50		$        7.75		$           7.46		$            7.08		3 %		38 %
Loan originations (in millions)(4):
Total loan originations	$          3,539		$      3,840		$      3,217		$         3,069		$          3,107		(8) %		14 %
Marketplace loans	$          2,386		$      2,819		$      2,360		$         2,308		$          2,471		(15) %		(3) %
Loan originations held for investment	$          1,153		$      1,021		$         856		$            761		$             636		13 %		81 %
Loan originations held for investment as a % of total loan originations	33 %		27 %		27 %		25 %		20 %
Servicing portfolio AUM (in millions)(5):
Total servicing portfolio	$          15,929		$    14,783		$    13,341		$         12,463		$          11,592		8 %		37 %
Loans serviced for others	$          11,807		$    11,382		$    10,475		$         10,124		$            9,744		4 %		21 %
Balance Sheet Data:
Loans and leases held for investment, net, excluding PPP loans	$   4,414,347		$  3,692,667		$  3,049,325		$  2,486,440		$   2,235,698		20 %		97 %
PPP loans	$        89,379		$  118,794		$  184,986		$     268,297		$      367,558		(25) %		(76) %
Total loans and leases held for investment, net	$   4,503,726		$  3,811,461		$  3,234,311		$  2,754,737		$   2,603,256		18 %		73 %
Total assets	$   6,775,074		$  6,186,765		$  5,574,425		$  4,900,319		$   4,750,760		10 %		43 %
Total deposits	$   5,123,506		$  4,527,672		$  3,977,477		$  3,135,788		$   2,838,719		13 %		80 %
Total liabilities	$   5,653,664		$  5,107,648		$  4,686,991		$  4,050,077		$   3,945,970		11 %		43 %
Total equity	$   1,121,410		$  1,079,117		$  887,434		$     850,242		$      804,790		4 %		39 %
Allowance Ratios:
Allowance for loan and lease losses to total loans and leases held for investment	6.3 %		6.0 %		5.5 %		5.0 %		3.9 %
Allowance for loan and lease losses to total loans and leases held for investment, excluding PPP loans	6.4 %		6.2 %		5.8 %		5.5 %		4.5 %
Allowance for loan and lease losses to consumer loans and leases held for investment	7.2 %		6.9 %		6.6 %		6.4 %		5.2 %
Allowance for loan and lease losses to commercial loans and leases held for investment	1.9 %		2.0 %		1.8 %		1.8 %		1.6 %
Allowance for loan and lease losses to commercial loans and leases held for investment, excluding PPP loans	2.2 %		2.3 %		2.3 %		2.6 %		2.6 %

N/M	– Not meaningful
N/A	– Not applicable
(1)	Excludes third and second quarter 2022 income tax benefit of $5.0 million and $135.3 million, respectively, due to the release of a deferred tax asset valuation allowance.
(2)	Represents a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures."
(3)	Calculated as the ratio of non-interest expense to total net revenue.
(4)	Includes unsecured personal loans, auto loans, and education and patient finance loans only.
(5)	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) (Unaudited)
	September 30, 2022		December 31, 2021
Unsecured personal	$         3,642,254		$         1,804,578
Residential mortgages	197,776		151,362
Secured consumer	180,768		65,976
Total consumer loans held for investment	4,020,798		2,021,916
Equipment finance (1)	167,447		149,155
Commercial real estate	372,406		310,399
Commercial and industrial (2)	246,276		417,656
Total commercial loans and leases held for investment	786,129		877,210
Total loans and leases held for investment	4,806,927		2,899,126
Allowance for loan and lease losses	(303,201)		(144,389)
Loans and leases held for investment, net	$         4,503,726		$         2,754,737

(1)	Comprised of sales-type leases for equipment.
(2)	Includes $89.4 million and $268.3 million of Paycheck Protection Program (PPP) loans as of September 30, 2022 and December 31, 2021, 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)
	Three Months Ended
	September 30, 2022						June 30, 2022
	Consumer		Commercial		Total		Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$    228,184		$        15,076		$ 243,260		$    173,857		$        14,128		$ 187,985
Credit loss expense for loans and leases held for investment	81,935		664		82,599		68,314		1,739		70,053
Charge-offs	(22,944)		(784)		(23,728)		(14,707)		(1,145)		(15,852)
Recoveries	963		107		1,070		720		354		1,074
Allowance for loan and lease losses, end of period	$    288,138		$        15,063		$ 303,201		$    228,184		$        15,076		$ 243,260

 

	Three Months Ended
	September 30, 2021
	Consumer		Commercial		Total
Allowance for loan and lease losses, beginning of period	$      54,058		$        17,023		$   71,081
Credit loss expense for loans and leases held for investment	37,695		(562)		37,133
Charge-offs	(3,142)		(1,194)		(4,336)
Recoveries	20		838		858
Allowance for loan and lease losses, end of period	$      88,631		$        16,105		$ 104,736

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share data) (Unaudited)
	Three Months Ended						Change (%)
	September 30, 2022		June 30, 2022		September 30, 2021		Q3 2022 vs Q3 2021		Q3 2022 vs Q2 2022
Non-interest income:
Marketplace revenue (1)	$        173,837		$      206,384		$        174,556		— %		(16) %
Other non-interest income	7,400		7,448		6,322		17 %		(1) %
Total non-interest income	181,237		213,832		180,878		— %		(15) %
Interest income:
Interest on loans held for sale	5,879		7,130		8,536		(31) %		(18) %
Interest and fees on loans and leases held for investment	124,028		108,911		57,644		115 %		14 %
Interest on retail and certificate loans held for investment at fair value	3,685		5,091		12,172		(70) %		(28) %
Interest on other loans held for investment at fair value	791		631		973		(19) %		25 %
Interest on securities available for sale	3,820		4,426		3,180		20 %		(14) %
Other interest income	5,017		2,279		355		N/M		120 %
Total interest income	143,220		128,468		82,860		73 %		11 %
Interest expense:
Interest on deposits	15,184		6,078		1,899		700 %		150 %
Interest on short-term borrowings	87		417		849		(90) %		(79) %
Interest on retail notes, certificates and secured borrowings	3,685		5,091		12,172		(70) %		(28) %
Interest on Structured Program borrowings	225		360		2,120		(89) %		(38) %
Interest on other long-term debt	363		296		532		(32) %		23 %
Total interest expense	19,544		12,242		17,572		11 %		60 %
Net interest income	123,676		116,226		65,288		89 %		6 %
Total net revenue	304,913		330,058		246,166		24 %		(8) %
Provision for credit losses	82,739		70,566		37,524		120 %		17 %
Non-interest expense:
Compensation and benefits	84,916		85,103		73,304		16 %		— %
Marketing	46,031		61,497		50,782		(9) %		(25) %
Equipment and software	12,491		12,461		10,297		21 %		— %
Occupancy	5,051		6,209		6,486		(22) %		(19) %
Depreciation and amortization	10,681		10,557		10,549		1 %		1 %
Professional services	11,943		16,138		11,750		2 %		(26) %
Other non-interest expense	15,106		17,421		15,607		(3) %		(13) %
Total non-interest expense	186,219		209,386		178,775		4 %		(11) %
Income before income tax benefit (expense)	35,955		50,106		29,867		20 %		(28) %
Income tax benefit (expense)	7,243		131,954		(2,682)		N/M		N/M
Net income	$          43,198		$      182,060		$          27,185		59 %		(76) %
Net income per share:
Basic EPS – common stockholders	$              0.41		$           1.77		$             0.27		52 %		(77) %
Diluted EPS – common stockholders	$              0.41		$           1.73		$             0.26		58 %		(76) %
Weighted-average common shares – Basic	104,215,594		102,776,867		99,073,507		5 %		1 %
Weighted-average common shares – Diluted	105,853,938		105,042,626		106,108,662		— %		1 %

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

 

	Three Months Ended						Change (%)
	September 30, 2022		June 30, 2022		September 30, 2021		Q3 2022 vs Q3 2021		Q3 2022 vs Q2 2022
Origination fees	$        127,142		$     149,252		$       129,125		(2) %		(15) %
Servicing fees	23,760		18,166		20,819		14 %		31 %
Gain on sales of loans	23,554		29,319		21,907		8 %		(20) %
Net fair value adjustments	(619)		9,647		2,705		(123) %		(106) %
Total marketplace revenue	$        173,837		$     206,384		$       174,556		— %		(16) %

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS BY SEGMENT (In Thousands) (Unaudited)
	LendingClub Bank				LendingClub Corporation (Parent only)				Intercompany Eliminations				Total
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Assets
Total cash and cash equivalents	$        896,519		$       659,919		$        109,200		$         88,268		$        (52,878)		$        (61,061)		$        952,841		$       687,126
Restricted cash	—		—		78,746		76,540		(12,461)		(80)		66,285		76,460
Securities available for sale at fair value	338,096		205,730		21,061		57,800		—		—		359,157		263,530
Loans held for sale	90,058		335,449		—		55,799		—		—		90,058		391,248
Loans and leases held for investment, net	4,503,726		2,754,737		—		—		—		—		4,503,726		2,754,737
Retail and certificate loans held for investment at fair value	—		—		87,144		229,719		—		—		87,144		229,719
Other loans held for investment at fair value	—		—		15,057		21,240		—		—		15,057		21,240
Property, equipment and software, net	89,576		36,424		40,381		61,572		—		—		129,957		97,996
Investment in subsidiary	—		—		671,574		557,577		(671,574)		(557,577)		—		—
Goodwill	75,717		75,717		—		—		—		—		75,717		75,717
Other assets	305,456		254,075		207,556		168,042		(17,880)		(119,571)		495,132		302,546
Total assets	6,299,148		4,322,051		1,230,719		1,316,557		(754,793)		(738,289)		6,775,074		4,900,319
Liabilities and Equity
Total deposits	5,188,845		3,196,929		—		—		(65,339)		(61,141)		5,123,506		3,135,788
Short-term borrowings	165		165		4,638		27,615		—		—		4,803		27,780
Advances from PPPLF	91,671		271,933		—		—		—		—		91,671		271,933
Retail notes, certificates and secured borrowings at fair value	—		—		87,144		229,719		—		—		87,144		229,719
Payable on Structured Program borrowings	—		—		11,185		65,451		—		—		11,185		65,451
Other long-term debt	—		—		15,300		15,455		—		—		15,300		15,455
Other liabilities	205,814		218,775		132,121		150,727		(17,880)		(65,551)		320,055		303,951
Total liabilities	5,486,495		3,687,802		250,388		488,967		(83,219)		(126,692)		5,653,664		4,050,077
Total equity	812,653		634,249		980,331		827,590		(671,574)		(611,597)		1,121,410		850,242
Total liabilities and equity	$     6,299,148		$     4,322,051		$     1,230,719		$     1,316,557		$      (754,793)		$      (738,289)		$     6,775,074		$     4,900,319

 

LENDINGCLUB CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME BY SEGMENT (In thousands) (Unaudited)
	Three Months Ended September 30, 2022
	LendingClub Bank		LendingClub Corporation (Parent only)		Intercompany Eliminations		Total
Non-interest income:
Marketplace revenue	$           153,504		$              9,015		$             11,318		$           173,837
Other non-interest income	25,240		4,794		(22,634)		7,400
Total non-interest income	178,744		13,809		(11,316)		181,237
Interest income:
Interest income	137,142		6,078		—		143,220
Interest expense	(15,277)		(4,267)		—		(19,544)
Net interest income	121,865		1,811		—		123,676
Total net revenue	300,609		15,620		(11,316)		304,913
Provision for credit losses	(82,739)		—		—		(82,739)
Non-interest expense	(177,714)		(19,821)		11,316		(186,219)
Income (Loss) before income tax benefit (expense)	40,156		(4,201)		—		35,955
Income tax benefit (expense)	(9,440)		16,683		—		7,243
Net income	$             30,716		$             12,482		$                   —		$             43,198
	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 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
(Provision for) reversal of 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)
Net income	$             35,048		$              2,756		$            (10,619)		$             27,185

 

LENDINGCLUB CORPORATION NET INTEREST INCOME (In thousands, except percentages or as noted) (Unaudited)
	Consolidated LendingClub Corporation (1)
	Three Months Ended September 30, 2022						Three Months Ended June 30, 2022						Three Months Ended September 30, 2021
	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	$    893,655		$    5,017		2.25 %		$ 1,023,192		$     2,279		0.89 %		$    778,667		$       355		0.18 %
Securities available for sale at fair value	396,556		3,820		3.85 %		409,327		4,426		4.32 %		266,686		3,180		4.77 %
Loans held for sale	126,487		5,879		18.59 %		156,503		7,130		18.22 %		226,422		8,536		15.08 %
Loans and leases held for investment:
Unsecured personal loans	3,268,649		110,446		13.52 %		2,692,148		95,529		14.19 %		991,297		39,532		15.95 %
Secured consumer loans	337,191		3,039		3.60 %		268,091		2,351		3.51 %		464,194		4,688		4.04 %
Commercial loans and leases	692,783		9,262		5.35 %		644,002		8,732		5.42 %		616,823		7,887		5.11 %
PPP loans	105,500		1,281		4.86 %		149,454		2,299		6.15 %		436,785		5,537		5.07 %
Loans and leases held for investment	4,404,123		124,028		11.26 %		3,753,695		108,911		11.61 %		2,509,099		57,644		9.19 %
Retail and certificate loans held for investment at fair value	104,010		3,685		14.17 %		144,613		5,091		14.08 %		344,205		12,172		14.15 %
Other loans held for investment at fair value	17,763		791		17.83 %		16,991		631		14.85 %		30,981		973		12.58 %
Total interest-earning assets	5,942,594		143,220		9.64 %		5,504,321		128,468		9.34 %		4,156,060		82,860		7.97 %
Cash and due from banks and restricted cash	58,411						75,517						96,733
Allowance for loan and lease losses	(254,849)						(202,904)						(86,686)
Other non-interest earning assets	597,169						490,412						449,964
Total assets	$ 6,343,325						$ 5,867,346						$ 4,616,071
Interest-bearing liabilities
Interest-bearing deposits:
Checking and money market accounts	$ 2,192,904		$    4,575		0.83 %		$ 2,463,710		$     2,664		0.43 %		$ 2,221,365		$    1,707		0.30 %
Savings accounts and certificates of deposit	2,260,170		10,609		1.86 %		1,555,607		3,414		0.88 %		307,807		192		0.25 %
Interest-bearing deposits	4,453,074		15,184		1.35 %		4,019,317		6,078		0.61 %		2,529,172		1,899		0.30 %
Short-term borrowings	6,848		87		5.09 %		10,874		417		15.35 %		57,224		849		5.93 %
Advances from PPPLF	104,897		93		0.36 %		151,278		135		0.36 %		416,748		371		0.36 %
Retail notes, certificates and secured borrowings	104,010		3,685		14.17 %		144,613		5,091		14.08 %		344,087		12,172		14.15 %
Structured Program borrowings	13,859		225		6.50 %		18,439		360		7.81 %		100,178		2,120		8.46 %
Other long-term debt	15,300		270		7.04 %		15,357		161		4.20 %		15,606		161		4.13 %
Total interest-bearing liabilities	4,697,988		19,544		1.65 %		4,359,878		12,242		1.12 %		3,463,015		17,572		2.03 %
Non-interest bearing deposits	284,134						292,750						81,491
Other liabilities	250,086						261,796						285,292
Total liabilities	$ 5,232,208						$ 4,914,424						$ 3,829,798
Total equity	$ 1,111,117						$    952,922						$    786,273
Total liabilities and equity	$ 6,343,325						$ 5,867,346						$ 4,616,071
Interest rate spread					7.99 %						8.21 %						5.95 %
Net interest income and net interest margin			$  123,676		8.32 %				$ 116,226		8.45 %				$  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 CONSOLIDATED BALANCE SHEETS  (In Thousands, Except Share and Per Share Amounts) (Unaudited)
	September 30, 2022		December 31, 2021
Assets
Cash and due from banks	$            23,211		$         35,670
Interest-bearing deposits in banks	929,630		651,456
Total cash and cash equivalents	952,841		687,126
Restricted cash	66,285		76,460
Securities available for sale at fair value ($415,726 and $256,170 at amortized cost, respectively)	359,157		263,530
Loans held for sale (includes $90,058 and $142,370 at fair value, respectively)	90,058		391,248
Loans and leases held for investment	4,806,927		2,899,126
Allowance for loan and lease losses	(303,201)		(144,389)
Loans and leases held for investment, net	4,503,726		2,754,737
Retail and certificate loans held for investment at fair value	87,144		229,719
Other loans held for investment at fair value	15,057		21,240
Property, equipment and software, net	129,957		97,996
Goodwill	75,717		75,717
Other assets	495,132		302,546
Total assets	$        6,775,074		$     4,900,319
Liabilities and Equity
Deposits:
Interest-bearing	$        4,868,132		$     2,919,203
Noninterest-bearing	255,374		216,585
Total deposits	5,123,506		3,135,788
Short-term borrowings	4,803		27,780
Advances from Paycheck Protection Program Liquidity Facility (PPPLF)	91,671		271,933
Retail notes, certificates and secured borrowings at fair value	87,144		229,719
Payable on Structured Program borrowings	11,185		65,451
Other long-term debt	15,300		15,455
Other liabilities	320,055		303,951
Total liabilities	5,653,664		4,050,077
Equity
Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, $0.01 par value; 180,000,000 shares authorized; 105,088,761 and 101,043,924 shares issued and outstanding, respectively	1,051		1,010
Additional paid-in capital	1,611,627		1,559,616
Accumulated deficit	(451,336)		(717,430)
Treasury stock, at cost; 7,751 and 0 shares, respectively	(98)		—
Accumulated other comprehensive income (loss)	(39,834)		7,046
Total equity	1,121,410		850,242
Total liabilities and equity	$        6,775,074		$     4,900,319

 

LENDINGCLUB CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except share and per share data) (Unaudited)
		As of and for the three months ended
		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
GAAP Net income		$            43,198		$     182,060		$       40,836		$            29,108		$            27,185
Income tax benefit from release of tax valuation allowance		5,015		135,300		—		—		—
Net income excluding income tax benefit		$            38,183		$       46,760		$       40,836		$            29,108		$            27,185
GAAP Diluted EPS – common stockholders		$                 0.41		$            1.73		$            0.39		$                 0.27		$                 0.26
(A)	Income tax benefit from release of tax valuation allowance	$              5,015		$     135,300
(B)	Weighted-average common shares – Diluted	105,853,938		105,042,626
(A/B)	Diluted EPS impact of income tax benefit	$                 0.05		$            1.29
Diluted EPS excluding income tax benefit		$                 0.36		$            0.44		$            0.39		$                 0.27		$                 0.26
		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
GAAP common equity		$       1,121,410		$  1,079,117		$     887,434		$          850,242		$          804,790
Less: Goodwill		(75,717)		(75,717)		(75,717)		(75,717)		(75,717)
Less: Intangible assets		(17,512)		(18,690)		(19,886)		(21,181)		(22,521)
Tangible common equity		$       1,028,181		$     984,710		$     791,831		$          753,344		$          706,552
Book value per common share
GAAP common equity		$       1,121,410		$  1,079,117		$     887,434		$          850,242		$          804,790
Common shares issued and outstanding		105,088,761		103,630,776		102,194,037		101,043,924		99,782,192
Book value per common share		$              10.67		$          10.41		$            8.68		$                 8.41		$                 8.07
Tangible book value per common share
Tangible common equity		$       1,028,181		$     984,710		$     791,831		$          753,344		$          706,552
Common shares issued and outstanding		105,088,761		103,630,776		102,194,037		101,043,924		99,782,192
Tangible book value per common share		$                 9.78		$            9.50		$            7.75		$                 7.46		$                 7.08

 

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SOURCE LendingClub Corporation

FAQ

What were LendingClub's Q3 2022 financial results?

LendingClub reported a 24% increase in revenue to $304.9 million and a 58% rise in diluted EPS to $0.41 for Q3 2022.

How much did LendingClub's assets grow year-over-year?

Total assets grew by 43% year-over-year to $6.8 billion.

What was the loan origination amount for LendingClub in Q3 2022?

Loan originations amounted to $3.5 billion, up 14% year-over-year.

What is LendingClub's net interest income for Q3 2022?

Net interest income increased 89% year-over-year to $123.7 million.

How much did LendingClub's deposits increase from last year?

Deposits rose by 80% year-over-year to $5.1 billion.

What is LendingClub's efficiency ratio improvement?

The efficiency ratio improved to 61% in Q3 2022, down from 73% a year ago.