FORM 8-K |
CURRENT REPORT |
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
LendingClub Corporation (Exact name of registrant as specified in its charter) |
Commission File Number: 001-36771 | |
Delaware | 51-0605731 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
595 Market Street, Suite 200, San Francisco, CA 94105 | |
(Address of principal executive offices and zip code) | |
(415) 632-5600 (Registrant's telephone number, including area code) | |
N/A (Former name or former address, if changed since last report) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company | ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
Title of each class | Trading Symbol | Name of each exchange on which registered |
Common stock, par value $0.01 per share | LC | New York Stock Exchange |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits | |
(d) | Exhibits |
Exhibit Number | Exhibit Title or Description | |
LendingClub Corporation | |||
Date: | May 7, 2019 | By: | /s/ Thomas W. Casey |
Thomas W. Casey | |||
Chief Financial Officer | |||
(duly authorized officer) |
• | LendingClub’s innovation, simplification program and focus on partnerships are transforming the company and enabling it to sustain strong operational and financial momentum. |
• | Loan originations of $2.7 billion, up 18% year-over-year with application growth of 31%. |
• | Net Revenue of $174.4 million, up 15% year-over-year. |
• | GAAP Consolidated Net Loss of $(19.9) million compared to $(31.2) million in the first quarter of 2018. |
• | Adjusted EBITDA of $22.6 million, up 47% year-over-year. |
• | Adjusted EBITDA Margin of 13.0%, up 2.9 percentage points year-over-year due to our ongoing initiatives to grow G&A and technology costs slower than revenue. |
• | Adjusted Net Loss of $(11.5) million compared to $(14.2) million in the first quarter of 2018. |
• | Data driven improvements in demand generation helped grow applications 31% in the first quarter of 2019 compared to the same quarter last year. 73% of customers went from application to approval within 24 hours, up from 57% in the first quarter of 2018, helping to increase conversion rates. |
• | Almost 40% of loans purchased by investors in the first quarter of 2019 were through structured program channels developed by LendingClub over the last 18 months. |
• | Geolocation: 76 Full Time Equivalent (FTE) employees at our new site in the Salt Lake City area, with most of the 550 capacity filled by year end. |
• | Business process outsourcing: 400+ operations support personnel at quarter end. Swapping fixed cost for variable cost and increasing our capacity and capabilities. |
• | Better serving small businesses through partnership with Opportunity Fund and Funding Circle, which leverages LendingClub’s world class demand generation and conversion capabilities. |
• | Further initiatives underway to leverage LendingClub’s scale will benefit Adjusted EBITDA Margins in the second half of 2019. |
• | Expect full year 2019 Net Revenue to be in the range of $765 million to $795 million; GAAP Consolidated Net Loss in the range of ($37) million to ($17) million (which now reflects $8 million of expenses related to legacy issues and our cost structure simplification program recognized during the first quarter of 2019); Adjusted Net Loss in the range of ($29) million to ($9) million; and Adjusted EBITDA in the range of $115 million to $135 million. |
• | Expect second quarter 2019 Net Revenue to be in the range of $185 million to $195 million; GAAP Consolidated Net Loss and Adjusted Net Loss both in the range of $(11) million to $(6) million; and Adjusted EBITDA in the range of $25 million to $30 million. |
• | Targeting Adjusted Net Income profitability over the second half of 2019, supported by our cost structure simplification program. |
• | LendingClub provides tools that help Americans on their path to financial health through lower borrowing costs and a seamless user experience. |
• | The company is the market leader in personal loans, a $130 billion+ industry and the fastest growing segment of consumer credit in the United States, and has an estimated addressable revolving debt market opportunity of more than $1 trillion. |
• | The company's marketplace gives it unique strengths which enable it to expand its market opportunity, competitive advantage, and growth potential: |
◦ | Our marketplace model generates savings for borrowers by finding and matching the lowest cost of capital with the right borrower and attracts investors with the lowest cost of capital by efficiently generating targeted returns and duration diversification; |
◦ | Our broad spectrum of borrowers and investors enables us to serve more customers and to enhance our marketing efficiency; and |
◦ | Scale, data and innovation enable us to generate and convert demand efficiently while managing price and credit risk effectively (3 million customers). |
• | The company is enhancing its operating leverage and capacity to generate cash with efficiency initiatives. |
Three Months Ended March 31, | |||||||
($ in millions) | 2019 | 2018 | |||||
Loan Originations | $ | 2,727.8 | $ | 2,306.0 | |||
Net Revenue | $ | 174.4 | $ | 151.7 | |||
GAAP Consolidated Net Loss | $ | (19.9 | ) | $ | (31.2 | ) | |
Adjusted EBITDA | $ | 22.6 | $ | 15.3 | |||
Adjusted Net Loss | $ | (11.5 | ) | $ | (14.2 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net revenue: | |||||||
Transaction fees | $ | 135,397 | $ | 111,182 | |||
Interest income | 100,172 | 138,018 | |||||
Interest expense | (75,360 | ) | (110,843 | ) | |||
Net fair value adjustments | (34,729 | ) | (28,713 | ) | |||
Net interest income and fair value adjustments | (9,917 | ) | (1,538 | ) | |||
Investor fees | 31,731 | 27,895 | |||||
Gain on sales of loans | 15,152 | 12,671 | |||||
Net investor revenue | 36,966 | 39,028 | |||||
Other revenue | 2,055 | 1,457 | |||||
Total net revenue | 174,418 | 151,667 | |||||
Operating expenses: (1) | |||||||
Sales and marketing | 66,623 | 57,517 | |||||
Origination and servicing | 28,273 | 22,645 | |||||
Engineering and product development | 42,546 | 36,837 | |||||
Other general and administrative | 56,876 | 52,309 | |||||
Class action and regulatory litigation expense | — | 13,500 | |||||
Total operating expenses | 194,318 | 182,808 | |||||
Loss before income tax expense | (19,900 | ) | (31,141 | ) | |||
Income tax expense | — | 39 | |||||
Consolidated net loss | (19,900 | ) | (31,180 | ) | |||
Less: Income attributable to noncontrolling interests | 35 | 1 | |||||
LendingClub net loss | $ | (19,935 | ) | $ | (31,181 | ) | |
Net loss per share attributable to LendingClub: | |||||||
Basic | $ | (0.05 | ) | $ | (0.07 | ) | |
Diluted | $ | (0.05 | ) | $ | (0.07 | ) | |
Weighted-average common shares - Basic | 430,544,355 | 418,299,301 | |||||
Weighted-average common shares - Diluted | 430,544,355 | 418,299,301 |
(1) | Includes stock-based compensation expense as follows: |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Sales and marketing | $ | 1,571 | $ | 1,860 | |||
Origination and servicing | 924 | 1,072 | |||||
Engineering and product development | 5,231 | 5,279 | |||||
Other general and administrative | 10,526 | 9,590 | |||||
Total stock-based compensation expense | $ | 18,252 | $ | 17,801 |
Three Months Ended | % Change | |||||||||||||||||||||
March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | Y/Y | |||||||||||||||||
Operating Highlights: | ||||||||||||||||||||||
Loan originations (in millions) | $ | 2,728 | $ | 2,871 | $ | 2,886 | $ | 2,818 | $ | 2,306 | 18 | % | ||||||||||
Net revenue | $ | 174,418 | $ | 181,521 | $ | 184,645 | $ | 176,979 | $ | 151,667 | 15 | % | ||||||||||
Consolidated net loss | $ | (19,900 | ) | $ | (13,412 | ) | $ | (22,749 | ) | $ | (60,812 | ) | $ | (31,180 | ) | 36 | % | |||||
Contribution (1) | $ | 85,688 | $ | 91,023 | $ | 88,453 | $ | 85,416 | $ | 74,436 | 15 | % | ||||||||||
Contribution margin (1) | 49.1 | % | 50.1 | % | 47.9 | % | 48.3 | % | 49.1 | % | — | % | ||||||||||
Adjusted EBITDA (1) | $ | 22,589 | $ | 28,464 | $ | 28,052 | $ | 25,670 | $ | 15,333 | 47 | % | ||||||||||
Adjusted EBITDA margin (1) | 13.0 | % | 15.7 | % | 15.2 | % | 14.5 | % | 10.1 | % | 29 | % | ||||||||||
Adjusted net loss (1) (2) | $ | (11,518 | ) | $ | (4,110 | ) | $ | (7,330 | ) | $ | (6,727 | ) | $ | (14,208 | ) | 19 | % | |||||
EPS – diluted | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.05 | ) | $ | (0.14 | ) | $ | (0.07 | ) | 29 | % | |||||
Adjusted EPS – diluted (1) (2) | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.03 | ) | — | % | |||||
Loan Originations by Investor Type: | ||||||||||||||||||||||
Banks | 49 | % | 41 | % | 38 | % | 40 | % | 48 | % | ||||||||||||
Other institutional investors | 18 | % | 19 | % | 19 | % | 16 | % | 13 | % | ||||||||||||
Managed accounts | 17 | % | 16 | % | 21 | % | 19 | % | 20 | % | ||||||||||||
LendingClub inventory | 10 | % | 18 | % | 15 | % | 18 | % | 9 | % | ||||||||||||
Self-directed investors | 6 | % | 6 | % | 7 | % | 7 | % | 10 | % | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||
Loan Originations by Program: | ||||||||||||||||||||||
Personal loans – standard program | 71 | % | 72 | % | 71 | % | 74 | % | 76 | % | ||||||||||||
Personal loans – custom program | 21 | % | 21 | % | 22 | % | 18 | % | 15 | % | ||||||||||||
Other – custom program (3) | 8 | % | 7 | % | 7 | % | 8 | % | 9 | % | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||
Personal Loan Originations by Loan Grade – Standard Loan Program (in millions): | ||||||||||||||||||||||
A | $ | 608.3 | $ | 604.9 | $ | 607.0 | $ | 506.0 | $ | 414.6 | 47 | % | ||||||||||
B | 574.5 | 591.6 | 563.3 | 610.2 | 524.5 | 10 | % | |||||||||||||||
C | 452.5 | 495.9 | 506.1 | 575.4 | 474.8 | (5 | )% | |||||||||||||||
D | 243.5 | 267.1 | 286.9 | 296.3 | 248.0 | (2 | )% | |||||||||||||||
E | 49.4 | 83.8 | 72.7 | 70.3 | 63.3 | (22 | )% | |||||||||||||||
F | 0.2 | 6.3 | 21.7 | 18.4 | 14.0 | (99 | )% | |||||||||||||||
G | — | 1.3 | 5.4 | 3.9 | 2.6 | (100 | )% | |||||||||||||||
Total | $ | 1,928.4 | $ | 2,050.9 | $ | 2,063.1 | $ | 2,080.5 | $ | 1,741.8 | 11 | % |
(1) | Represents a non-GAAP measure. See “Reconciliation of GAAP to Non-GAAP Measures.” |
(2) | In the fourth quarter of 2018, we revised the calculation of Adjusted Net Income (Loss) and Adjusted EPS to adjust for certain expenses that are either non-recurring or unusual in nature, such as expenses related to our cost structure simplification, goodwill impairment and legal, regulatory and other expense related to legacy issues, net of tax. Prior period amounts have been reclassified to conform to the current period presentation. |
(3) | Comprised of education and patient finance loans, auto refinance loans, and small business loans. |
Three Months Ended | % Change | |||||||||||||||||||||
March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | Y/Y | |||||||||||||||||
Servicing Portfolio by Method Financed (in millions, at end of period): | ||||||||||||||||||||||
Whole loans sold | $ | 11,761 | $ | 10,890 | $ | 10,475 | $ | 9,512 | $ | 8,571 | 37 | % | ||||||||||
Notes | 1,169 | 1,243 | 1,347 | 1,428 | 1,518 | (23 | )% | |||||||||||||||
Certificates | 577 | 689 | 830 | 967 | 1,125 | (49 | )% | |||||||||||||||
Secured borrowings | 59 | 81 | 108 | 143 | 187 | (68 | )% | |||||||||||||||
Loans invested in by the Company | 565 | 843 | 464 | 523 | 581 | (3 | )% | |||||||||||||||
Total | $ | 14,131 | $ | 13,746 | $ | 13,224 | $ | 12,573 | $ | 11,982 | 18 | % | ||||||||||
Employees and contractors (4) | 1,621 | 1,687 | 1,762 | 1,722 | 1,756 | (8 | )% |
(4) | As of the end of each respective period. In the first quarter of 2019, the Company reclassified certain third-party contractors as outsourced service providers and excluded them in the balance provided. Prior period balances have been reclassified to conform to the current period presentation. |
March 31, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 402,311 | $ | 372,974 | |||
Restricted cash | 167,954 | 271,084 | |||||
Securities available for sale (includes $45,203 and $53,611 pledged as collateral at fair value, respectively) | 197,509 | 170,469 | |||||
Loans held for investment at fair value | 1,698,198 | 1,883,251 | |||||
Loans held for investment by the Company at fair value | 8,757 | 2,583 | |||||
Loans held for sale by the Company at fair value | 552,166 | 840,021 | |||||
Accrued interest receivable | 19,657 | 22,255 | |||||
Property, equipment and software, net | 118,157 | 113,875 | |||||
Intangible assets, net | 17,108 | 18,048 | |||||
Other assets | 235,264 | 124,967 | |||||
Total assets | $ | 3,417,081 | $ | 3,819,527 | |||
Liabilities and Equity | |||||||
Accounts payable | $ | 24,804 | $ | 7,104 | |||
Accrued interest payable | 14,929 | 19,241 | |||||
Accrued expenses and other liabilities | 238,941 | 152,118 | |||||
Payable to investors | 72,175 | 149,052 | |||||
Notes, certificates and secured borrowings at fair value | 1,703,226 | 1,905,875 | |||||
Payable to securitization note holders | 233,269 | 256,354 | |||||
Credit facilities and securities sold under repurchase agreements | 263,863 | 458,802 | |||||
Total liabilities | 2,551,207 | 2,948,546 | |||||
Equity | |||||||
Common stock, $0.01 par value; 900,000,000 shares authorized; 434,202,951 and 431,923,335 shares issued, respectively; 431,920,251 and 429,640,635 shares outstanding, respectively | 4,342 | 4,319 | |||||
Additional paid-in capital | 1,417,364 | 1,401,937 | |||||
Accumulated deficit | (537,662 | ) | (517,727 | ) | |||
Treasury stock, at cost; 2,282,700 shares | (19,485 | ) | (19,485 | ) | |||
Accumulated other comprehensive income | 225 | 157 | |||||
Total LendingClub stockholders’ equity | 864,784 | 869,201 | |||||
Noncontrolling interests | 1,090 | 1,780 | |||||
Total equity | 865,874 | 870,981 | |||||
Total liabilities and equity | $ | 3,417,081 | $ | 3,819,527 |
Three Months Ended | |||||||||||||||||||
March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
Contribution reconciliation: | |||||||||||||||||||
GAAP consolidated net loss | $ | (19,900 | ) | $ | (13,412 | ) | $ | (22,749 | ) | $ | (60,812 | ) | $ | (31,180 | ) | ||||
Engineering and product development expense | 42,546 | 39,552 | 41,216 | 37,650 | 36,837 | ||||||||||||||
Other general and administrative expense | 56,876 | 61,303 | 57,446 | 57,583 | 52,309 | ||||||||||||||
Cost structure simplification expense (1) | 3,706 | 880 | — | — | — | ||||||||||||||
Goodwill impairment | — | — | — | 35,633 | — | ||||||||||||||
Class action and regulatory litigation expense | — | — | 9,738 | 12,262 | 13,500 | ||||||||||||||
Stock-based compensation expense | 2,495 | 2,732 | 2,895 | 3,125 | 2,932 | ||||||||||||||
Income tax expense (benefit) | — | 18 | (38 | ) | 24 | 39 | |||||||||||||
Income attributable to noncontrolling interests | (35 | ) | (50 | ) | (55 | ) | (49 | ) | (1 | ) | |||||||||
Contribution | $ | 85,688 | $ | 91,023 | $ | 88,453 | $ | 85,416 | $ | 74,436 | |||||||||
Total net revenue | $ | 174,418 | $ | 181,521 | $ | 184,645 | $ | 176,979 | $ | 151,667 | |||||||||
Contribution margin | 49.1 | % | 50.1 | % | 47.9 | % | 48.3 | % | 49.1 | % | |||||||||
Adjusted EBITDA reconciliation: | |||||||||||||||||||
GAAP consolidated net loss | $ | (19,900 | ) | $ | (13,412 | ) | $ | (22,749 | ) | $ | (60,812 | ) | $ | (31,180 | ) | ||||
Depreciation and impairment expense: | |||||||||||||||||||
Engineering and product development | 13,373 | 12,372 | 13,221 | 10,197 | 9,247 | ||||||||||||||
Other general and administrative | 1,542 | 1,525 | 1,488 | 1,420 | 1,419 | ||||||||||||||
Amortization of intangible assets | 940 | 941 | 940 | 959 | 1,035 | ||||||||||||||
Cost structure simplification expense (2) | 4,272 | 6,782 | — | — | — | ||||||||||||||
Goodwill impairment | — | — | — | 35,633 | — | ||||||||||||||
Legal, regulatory and other expense related to legacy issues (3) | 4,145 | 2,570 | 15,474 | 18,501 | 16,973 | ||||||||||||||
Stock-based compensation expense | 18,252 | 17,718 | 19,771 | 19,797 | 17,801 | ||||||||||||||
Income tax expense (benefit) | — | 18 | (38 | ) | 24 | 39 | |||||||||||||
Income attributable to noncontrolling interests | (35 | ) | (50 | ) | (55 | ) | (49 | ) | (1 | ) | |||||||||
Adjusted EBITDA | $ | 22,589 | $ | 28,464 | $ | 28,052 | $ | 25,670 | $ | 15,333 | |||||||||
Total net revenue | $ | 174,418 | $ | 181,521 | $ | 184,645 | $ | 176,979 | $ | 151,667 | |||||||||
Adjusted EBITDA margin | 13.0 | % | 15.7 | % | 15.2 | % | 14.5 | % | 10.1 | % |
(1) | Contribution excludes the portion of personnel-related expenses associated with establishing a site in the Salt Lake City area that are included in the “Sales and marketing” and “Origination and servicing” expense categories. |
(2) | Includes personnel-related expenses associated with establishing a site in the Salt Lake City area and external advisory fees. These expenses are included in “Sales and marketing,” “Origination and servicing,” “Engineering and product development” and “Other general and administrative” expense on the Company’s Condensed Consolidated Statements of Operations. |
(3) | Includes class action and regulatory litigation expense and legal and other expenses related to legacy issues, which are included in “Class action and regulatory litigation expense” and “Other general and administrative” expense, respectively, on the Company’s Condensed Consolidated Statements of Operations. For the first quarter of 2019, also includes expense related to the dissolution of certain private funds managed by LCAM, which is included in “Net fair value adjustments” on the Company’s Condensed Consolidated Statements of Operations. |
Three Months Ended | |||||||||||||||||||
March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
Adjusted net loss reconciliation: | |||||||||||||||||||
GAAP LendingClub net loss | $ | (19,935 | ) | $ | (13,462 | ) | $ | (22,804 | ) | $ | (60,861 | ) | $ | (31,181 | ) | ||||
Cost structure simplification expense (1) | 4,272 | 6,782 | — | — | — | ||||||||||||||
Goodwill impairment | — | — | — | 35,633 | — | ||||||||||||||
Legal, regulatory and other expense related to legacy issues (2) | 4,145 | 2,570 | 15,474 | 18,501 | 16,973 | ||||||||||||||
Adjusted net loss (3) | $ | (11,518 | ) | $ | (4,110 | ) | $ | (7,330 | ) | $ | (6,727 | ) | $ | (14,208 | ) | ||||
Adjusted EPS - diluted (3) | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.03 | ) | ||||
Non-GAAP diluted shares reconciliation: | |||||||||||||||||||
GAAP diluted shares (4) | 430,544 | 427,697 | 424,359 | 421,194 | 418,299 | ||||||||||||||
Other dilutive equity awards (5) | — | — | — | — | — | ||||||||||||||
Non-GAAP diluted shares | 430,544 | 427,697 | 424,359 | 421,194 | 418,299 |
(1) | Includes personnel-related expenses associated with establishing a site in the Salt Lake City area and external advisory fees. These expenses are included in “Sales and marketing,” “Origination and servicing,” “Engineering and product development” and “Other general and administrative” expense on the Company’s Condensed Consolidated Statements of Operations. |
(2) | Includes class action and regulatory litigation expense and legal and other expenses related to legacy issues, which are included in “Class action and regulatory litigation expense” and “Other general and administrative” expense, respectively, on the Company’s Condensed Consolidated Statements of Operations. For the first quarter of 2019, also includes expense related to the dissolution of certain private funds managed by LCAM, which is included in “Net fair value adjustments” on the Company’s Condensed Consolidated Statements of Operations. |
(3) | In the fourth quarter of 2018, we revised the calculation of Adjusted Net Income (Loss) and Adjusted EPS to adjust for certain expenses that are either non-recurring or unusual in nature, such as expenses related to our cost structure simplification, goodwill impairment and legal, regulatory and other expense related to legacy issues, net of tax. Prior period amounts have been reclassified to conform to the current period presentation. |
(4) | Equivalent to the basic and diluted shares reflected in the quarterly EPS calculations. |
(5) | Other dilutive equity awards include assumed exercises of unvested stock options, net of assumed repurchases computed under the treasury method, which were excluded from GAAP net loss per share as their impact would have been anti-dilutive. |
March 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||
Retail Program (1) | ConsolidatedVIEs (2) | All Other LendingClub (3) | Condensed Consolidated Balance Sheet | Retail Program (1) | ConsolidatedVIEs (2) | All Other LendingClub (3) | Condensed Consolidated Balance Sheet | ||||||||||||||||||
Assets | |||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | 402,311 | $ | 402,311 | $ | — | $ | — | $ | 372,974 | $ | 372,974 | |||||||||
Restricted cash | — | 14,665 | 153,289 | 167,954 | 15,551 | 17,660 | 237,873 | 271,084 | |||||||||||||||||
Securities available for sale | — | — | 197,509 | 197,509 | — | — | 170,469 | 170,469 | |||||||||||||||||
Loans held for investment at fair value | 1,158,504 | 539,694 | — | 1,698,198 | 1,241,157 | 642,094 | — | 1,883,251 | |||||||||||||||||
Loans held for investment by the Company at fair value | — | — | 8,757 | 8,757 | — | — | 2,583 | 2,583 | |||||||||||||||||
Loans held for sale by the Company at fair value | — | 216,753 | 335,413 | 552,166 | — | 245,345 | 594,676 | 840,021 | |||||||||||||||||
Accrued interest receivable | 8,855 | 6,972 | 3,830 | 19,657 | 8,914 | 7,242 | 6,099 | 22,255 | |||||||||||||||||
Property, equipment and software, net | — | — | 118,157 | 118,157 | — | — | 113,875 | 113,875 | |||||||||||||||||
Intangible assets, net | — | — | 17,108 | 17,108 | — | — | 18,048 | 18,048 | |||||||||||||||||
Other assets | — | 254 | 235,010 | 235,264 | — | 530 | 124,437 | 124,967 | |||||||||||||||||
Total assets | $ | 1,167,359 | $ | 778,338 | $ | 1,471,384 | $ | 3,417,081 | $ | 1,265,622 | $ | 912,871 | $ | 1,641,034 | $ | 3,819,527 | |||||||||
Liabilities and Equity | |||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 24,804 | $ | 24,804 | $ | — | $ | — | $ | 7,104 | $ | 7,104 | |||||||||
Accrued interest payable | 8,855 | 5,375 | 699 | 14,929 | 11,484 | 7,594 | 163 | 19,241 | |||||||||||||||||
Accrued expenses and other liabilities | — | — | 238,941 | 238,941 | — | 15 | 152,103 | 152,118 | |||||||||||||||||
Payable to investors | — | — | 72,175 | 72,175 | — | — | 149,052 | 149,052 | |||||||||||||||||
Notes, certificates and secured borrowings at fair value | 1,158,504 | 539,694 | 5,028 | 1,703,226 | 1,254,138 | 648,908 | 2,829 | 1,905,875 | |||||||||||||||||
Payable to securitization note holders | — | 233,269 | — | 233,269 | — | 256,354 | — | 256,354 | |||||||||||||||||
Credit facilities and securities sold under repurchase agreements | — | — | 263,863 | 263,863 | — | — | 458,802 | 458,802 | |||||||||||||||||
Total liabilities | 1,167,359 | 778,338 | 605,510 | 2,551,207 | 1,265,622 | 912,871 | 770,053 | 2,948,546 | |||||||||||||||||
Total equity | — | — | 865,874 | 865,874 | — | — | 870,981 | 870,981 | |||||||||||||||||
Total liabilities and equity | $ | 1,167,359 | $ | 778,338 | $ | 1,471,384 | $ | 3,417,081 | $ | 1,265,622 | $ | 912,871 | $ | 1,641,034 | $ | 3,819,527 |
(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 $42.0 million was equally matched and offset by interest income from the related loans of $42.0 million for the first quarter of 2019, resulting in no net effect on our Net interest income and fair value adjustments. |
(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. This includes LC Trust (which issues certificates backed by loans held by the trust) and any consolidated LendingClub securitization trusts. Interest expense on these liabilities owned by third-parties of $27.1 million and net fair value adjustments of $7.7 million for the first quarter of 2019 were equally matched and offset by interest income on the loans of $34.8 million, resulting in no net effect on our Net interest income and fair value adjustments. Economic interests held by LendingClub, including retained interests, residuals and equity of the VIEs, are reflected in “Loans held for sale by the Company at fair value” and “Restricted cash,” respectively, within the “All Other LendingClub” column. |
(3) | Represents all other assets and liabilities of the Company other than those related to our Retail Program and certain consolidated VIEs but includes any retained interests, residuals and equity of those consolidated VIEs. |
March 31, 2019 | December 31, 2018 | ||||||
Cash and loans held for investment by the Company | |||||||
Cash and cash equivalents | $ | 402,311 | $ | 372,974 | |||
Loans held for investment by the Company at fair value | 8,757 | 2,583 | |||||
Total | $ | 411,068 | $ | 375,557 | |||
Other financial assets partially secured by credit facilities | |||||||
Securities available for sale | $ | 197,509 | $ | 170,469 | |||
Loans held for sale by the Company at fair value | 552,166 | 840,021 | |||||
Payable to securitization note holders | (233,269 | ) | (256,354 | ) | |||
Credit facilities and securities sold under repurchase agreements | (263,863 | ) | (458,802 | ) | |||
Total | $ | 252,543 | $ | 295,334 | |||
Net cash and other financial assets (1) | $ | 663,611 | $ | 670,891 |
(1) | Comparable GAAP measure cannot be provided as not practicable. |
Three Months Ended | Year Ended | ||||
June 30, 2019 | December 31, 2019 | ||||
GAAP Consolidated net loss (2) | $(11) - $(6) | $(37) - $(17) | |||
Cost structure simplification expense (3) | — | 4 | |||
Legal, regulatory and other expense related to legacy issues (4) | — | 4 | |||
Adjusted net loss (2) | $(11) - $(6) | $(29) - $(9) | |||
Stock-based compensation expense | 21 | 81 | |||
Depreciation, amortization and other net adjustments | 15 | 63 | |||
Adjusted EBITDA (2) | $25 - $30 | $115 - $135 |
(1) | For the second half of 2019, reconciliation of comparable GAAP Consolidated Net Income (Loss) to Adjusted Net Income (Loss) cannot be provided as not practicable. |
(2) | Guidance excludes certain expenses that are either non-recurring or unusual in nature, such as expenses related to our cost structure simplification and legal, regulatory and other expense related to legacy issues. Full year guidance now reflects such expenses that have been recognized during the first quarter of 2019. |
(3) | Includes personnel-related expenses associated with establishing a site in the Salt Lake City area and external advisory fees. These expenses are included in “Sales and marketing,” “Origination and servicing,” “Engineering and product development” and “Other general and administrative” expense on the Company’s Condensed Consolidated Statements of Operations. |
(4) | Includes class action and regulatory litigation expense and legal and other expenses related to legacy issues, which are included in “Class action and regulatory litigation expense” and “Other general and administrative” expense, respectively, on the Company’s Condensed Consolidated Statements of Operations. For the first quarter of 2019, also includes expense related to the dissolution of certain private funds managed by LCAM, which is included in “Net fair value adjustments” on the Company’s Condensed Consolidated Statements of Operations. |