EXHIBIT 99.1
LendingClub Reports First Quarter 2023 Results
Net Income of $13.7M, Driven by 7% Sequential Increase in Pre-Provision Net Revenue (PPNR)
Deposits Up 13% Sequentially to $7.2B; $1.6B in Cash
SAN FRANCISCO – April 26, 2023 – LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America’s leading digital marketplace bank, today announced financial results for the first quarter ended March 31, 2023.
“We delivered a solid quarter driven by our strategic advantages, including over 15 years of cycle-tested data, prudent and agile underwriting, and our digital marketplace bank model,” said Scott Sanborn, LendingClub CEO. “While we expect continued industry and macro headwinds, these significant advantages, along with our growing online consumer deposit franchise and high-yielding short duration assets, provide us with a range of options to navigate the current macro environment while we build toward an ambitious future for the company and our growing membership base.”
First Quarter 2023 Results
Balance Sheet:
•Total assets grew 10% sequentially to $8.8 billion from $8.0 billion at December 31, 2022.
•Deposits up 13% sequentially to $7.2 billion; FDIC-insured deposits represent approximately 86% of total deposits.
◦Cash of $1.6 billion increased 55% from December 31, 2022.
◦Available aggregate borrowing capacity of $4.1 billion as of April 26, 2023.
•Loans and leases held for investment portfolio grew 4.6% sequentially from $5.6 billion to $5.9 billion.
•Substantial capital with a consolidated Tier 1 leverage ratio of 12.8% and consolidated Common Equity Tier 1 capital ratio of 15.6%.
•Book value per common share of $11.08, up 1.4% from $10.93 at December 31, 2022.
•Tangible book value per common share of $10.23, up 1.7% from $10.06 at December 31, 2022.
Financial Performance:
•Loan originations were $2.3 billion compared to $2.5 billion in the prior quarter.
•Total net revenue was $245.7 million compared to $262.7 million in the prior quarter, as growth in net interest income was offset by lower marketplace revenue.
◦Net interest income increased 8% from the prior quarter to $146.7 million, primarily due to higher balance sheet growth and partially offset by lower net interest margin due to higher cost of deposits.
◦Marketplace revenue was $95.6 million compared to $123.4 million in the prior quarter, reflecting a reduction in sold marketplace volumes.
•Net income of $13.7 million, or diluted EPS of $0.13, compared to $23.6 million, or diluted EPS of $0.22, in the prior quarter, reflecting higher credit provisioning due to growth in the held-for-investment portfolio as well as higher tax expense.
•Pre-provision net revenue (PPNR) of $88.4 million grew 7% over the prior quarter, driven by the Company’s cost reduction actions and a $9.0 million one-time revenue benefit primarily due to slower prepayments.
•Credit quality of the held-for-investment prime loan portfolio performing in-line with expectations as portfolio seasons; provision for credit losses of $70.6 million primarily reflects $1.0 billion of quarterly loan originations held for investment.
•Efficiency ratio improved to 64.0% from 68.5% in the prior quarter due to cost reduction actions and marketing efficiency.
1
| Three Months Ended | |||||||||||||||||
| ($ in millions, except per share amounts) | March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||||||
| Total net revenue | $ | 245.7 | $ | 262.7 | $ | 289.5 | |||||||||||
| Non-interest expense | 157.3 | 180.0 | 191.2 | ||||||||||||||
Pre-provision net revenue (1) | 88.4 | 82.7 | 98.3 | ||||||||||||||
| Provision for credit losses | 70.6 | 61.5 | 52.5 | ||||||||||||||
| Income before income tax benefit (expense) | 17.8 | 21.2 | 45.8 | ||||||||||||||
| Income tax benefit (expense) | (4.1) | 2.4 | (5.0) | ||||||||||||||
| Net income | $ | 13.7 | $ | 23.6 | $ | 40.8 | |||||||||||
| Diluted EPS | $ | 0.13 | $ | 0.22 | $ | 0.39 | |||||||||||
| Income tax benefit from release of tax valuation allowance | $ | — | $ | 3.2 | $ | — | |||||||||||
Net income excluding income tax benefit (1) | $ | 13.7 | $ | 20.4 | $ | 40.8 | |||||||||||
Diluted EPS excluding income tax benefit (1) | $ | 0.13 | $ | 0.19 | $ | 0.39 | |||||||||||
(1) See page 3 of this release for additional information on our use of non-GAAP financial measures.
For a calculation of Pre-Provision Net Revenue, Net Income Excluding Income Tax Benefit, Diluted EPS Excluding Income Tax Benefit, and Tangible Book Value Per Common Share, refer to the “Reconciliation of GAAP to Non-GAAP Financial Measures” tables at the end of this release.
Financial Outlook
| Second Quarter 2023 | |||||
| Loan Originations | $1.9B to $2.1B | ||||
| Pre-Provision Net Revenue (PPNR) | $60M to $70M | ||||
2
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 4.7 million members have joined the Club to help reach their financial goals. For more information about LendingClub, visit https://www.lendingclub.com.
Conference Call and Webcast Information
The LendingClub first quarter 2023 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, April 26, 2023. A live webcast of the call will be available at http://ir.lendingclub.com under the Filings & Financials menu in Quarterly Results. To access the call, please dial +1 (404) 975-4839, or outside the U.S. +1 (929) 526-1599, with Access Code 900462, 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 May 3, 2023, by calling +1 (929) 458-6194 or outside the U.S. +44 (204) 525-0658, with Access Code 850910. 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: Pre-Provision Net Revenue, Net Income Excluding Income Tax Benefit, Diluted EPS Excluding Income Tax Benefit, and Tangible Book Value Per Common Share. Our non-GAAP financial measures do have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP.
We believe these non-GAAP financial measures provide management and investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies.
We believe Pre-Provision Net Revenue, Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit are important measures because they reflect the financial performance of our business operations. Pre-Provision Net Revenue is a non-GAAP financial measure calculated by subtracting the provision for credit losses and income tax benefit/expense from net income. Net Income Excluding Income Tax Benefit adjusts for the release of a deferred tax asset valuation allowance in 2022. Diluted EPS Excluding Income Tax Benefit is a non-GAAP financial measure calculated by dividing Net Income Excluding Income Tax Benefit by the weighted-average diluted common shares outstanding.
We believe Tangible Book Value (TBV) Per Common Share is an important measure used to evaluate the company’s use of equity. TBV Per Common Share is a non-GAAP financial measure representing common equity reduced by goodwill and intangible assets, divided by ending common shares issued and outstanding.
3
For a reconciliation of such measures to the nearest GAAP measures, please refer to the tables beginning on page 13 of this release.
Safe Harbor Statement
Some of the statements above, including statements regarding our competitive advantages, macroeconomic outlook, anticipated future performance and financial results, are “forward-looking statements.” The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “predict,” “project,” “will,” “would” and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include: our ability to continue to attract and retain new and existing customers; our ability to realize the expected benefits from recent initiatives, including our cost reduction plan and the acquisition of a $1 billion loan portfolio; competition; overall economic conditions; the interest rate environment; 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.
*****
4
LENDINGCLUB CORPORATION
OPERATING HIGHLIGHTS
(In thousands, except percentages or as noted)
(Unaudited)
| As of and for the three months ended | % Change | ||||||||||||||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | Q/Q | Y/Y | |||||||||||||||||||||||||||||||||||
| Operating Highlights: | |||||||||||||||||||||||||||||||||||||||||
| Non-interest income | $ | 98,990 | $ | 127,465 | $ | 181,237 | $ | 213,832 | $ | 189,857 | (22) | % | (48) | % | |||||||||||||||||||||||||||
| Net interest income | 146,704 | 135,243 | 123,676 | 116,226 | 99,680 | 8 | % | 47 | % | ||||||||||||||||||||||||||||||||
| Total net revenue | 245,694 | 262,708 | 304,913 | 330,058 | 289,537 | (6) | % | (15) | % | ||||||||||||||||||||||||||||||||
| Non-interest expense | 157,308 | 180,044 | 186,219 | 209,386 | 191,204 | (13) | % | (18) | % | ||||||||||||||||||||||||||||||||
Pre-provision net revenue(1) | 88,386 | 82,664 | 118,694 | 120,672 | 98,333 | 7 | % | (10) | % | ||||||||||||||||||||||||||||||||
| Provision for credit losses | 70,584 | 61,512 | 82,739 | 70,566 | 52,509 | 15 | % | 34 | % | ||||||||||||||||||||||||||||||||
| Income before income tax benefit (expense) | 17,802 | 21,152 | 35,955 | 50,106 | 45,824 | (16) | % | (61) | % | ||||||||||||||||||||||||||||||||
| Income tax benefit (expense) | (4,136) | 2,439 | 7,243 | 131,954 | (4,988) | N/M | (17) | % | |||||||||||||||||||||||||||||||||
| Net income | 13,666 | 23,591 | 43,198 | 182,060 | 40,836 | (42) | % | (67) | % | ||||||||||||||||||||||||||||||||
| Income tax benefit from release of tax valuation allowance | — | 3,180 | 5,015 | 135,300 | — | N/M | N/M | ||||||||||||||||||||||||||||||||||
Net income excluding income tax benefit(1)(2) | $ | 13,666 | $ | 20,411 | $ | 38,183 | $ | 46,760 | $ | 40,836 | (33) | % | (67) | % | |||||||||||||||||||||||||||
| Basic EPS – common stockholders | $ | 0.13 | $ | 0.22 | $ | 0.41 | $ | 1.77 | $ | 0.40 | (41) | % | (68) | % | |||||||||||||||||||||||||||
| Diluted EPS – common stockholders | $ | 0.13 | $ | 0.22 | $ | 0.41 | $ | 1.73 | $ | 0.39 | (41) | % | (67) | % | |||||||||||||||||||||||||||
Diluted EPS excluding income tax benefit(1)(2) | $ | 0.13 | $ | 0.19 | $ | 0.36 | $ | 0.45 | $ | 0.39 | (32) | % | (67) | % | |||||||||||||||||||||||||||
| LendingClub Corporation Performance Metrics: | |||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 7.5 | % | 7.8 | % | 8.3 | % | 8.5 | % | 8.3 | % | |||||||||||||||||||||||||||||||
Efficiency ratio(3) | 64.0 | % | 68.5 | % | 61.1 | % | 63.4 | % | 66.0 | % | |||||||||||||||||||||||||||||||
Return on average equity (ROE)(4) | 4.6 | % | 7.2 | % | 14.2 | % | 33.8 | % | 18.7 | % | |||||||||||||||||||||||||||||||
Return on average total assets (ROA)(5) | 0.7 | % | 1.1 | % | 2.5 | % | 5.5 | % | 3.1 | % | |||||||||||||||||||||||||||||||
| Marketing expense as a % of loan originations | 1.2 | % | 1.4 | % | 1.3 | % | 1.6 | % | 1.7 | % | |||||||||||||||||||||||||||||||
| LendingClub Corporation Capital Metrics: | |||||||||||||||||||||||||||||||||||||||||
| Common equity Tier 1 capital ratio | 15.6 | % | 15.8 | % | 18.3 | % | 20.0 | % | 20.6 | % | |||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 12.8 | % | 14.1 | % | 15.7 | % | 16.2 | % | 15.6 | % | |||||||||||||||||||||||||||||||
| Book value per common share | $ | 11.08 | $ | 10.93 | $ | 10.67 | $ | 10.41 | $ | 8.68 | 1 | % | 28 | % | |||||||||||||||||||||||||||
Tangible book value per common share(1) | $ | 10.23 | $ | 10.06 | $ | 9.78 | $ | 9.50 | $ | 7.75 | 2 | % | 32 | % | |||||||||||||||||||||||||||
Loan Originations (in millions)(6): | |||||||||||||||||||||||||||||||||||||||||
| Total loan originations | $ | 2,288 | $ | 2,524 | $ | 3,539 | $ | 3,840 | $ | 3,217 | (9) | % | (29) | % | |||||||||||||||||||||||||||
| Marketplace loans | $ | 1,286 | $ | 1,824 | $ | 2,386 | $ | 2,819 | $ | 2,360 | (29) | % | (46) | % | |||||||||||||||||||||||||||
| Loan originations held for investment | $ | 1,002 | $ | 701 | $ | 1,153 | $ | 1,021 | $ | 856 | 43 | % | 17 | % | |||||||||||||||||||||||||||
| Loan originations held for investment as a % of total loan originations | 44 | % | 28 | % | 33 | % | 27 | % | 27 | % | |||||||||||||||||||||||||||||||
Servicing Portfolio AUM (in millions)(7): | |||||||||||||||||||||||||||||||||||||||||
| Total servicing portfolio | $ | 16,060 | $ | 16,157 | $ | 15,929 | $ | 14,783 | $ | 13,341 | (1) | % | 20 | % | |||||||||||||||||||||||||||
| Loans serviced for others | $ | 10,504 | $ | 10,819 | $ | 11,807 | $ | 11,382 | $ | 10,475 | (3) | % | — | % | |||||||||||||||||||||||||||
5
LENDINGCLUB CORPORATION
OPERATING HIGHLIGHTS (Continued)
(In thousands, except percentages or as noted)
(Unaudited)
| As of and for the three months ended | % Change | ||||||||||||||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | Q/Q | Y/Y | |||||||||||||||||||||||||||||||||||
| Balance Sheet Data: | |||||||||||||||||||||||||||||||||||||||||
| Loans and leases held for investment at amortized cost, net, excluding PPP loans | $ | 5,091,969 | $ | 4,638,331 | $ | 4,414,347 | $ | 3,692,667 | $ | 3,049,325 | 10 | % | 67 | % | |||||||||||||||||||||||||||
| PPP loans | $ | 51,112 | $ | 66,971 | $ | 89,379 | $ | 118,794 | $ | 184,986 | (24) | % | (72) | % | |||||||||||||||||||||||||||
Total loans and leases held for investment at amortized cost, net(8) | $ | 5,143,081 | $ | 4,705,302 | $ | 4,503,726 | $ | 3,811,461 | $ | 3,234,311 | 9 | % | 59 | % | |||||||||||||||||||||||||||
| Loans held for investment at fair value | $ | 748,618 | $ | 925,938 | $ | 15,057 | $ | 20,583 | $ | 15,384 | (19) | % | 4,766 | % | |||||||||||||||||||||||||||
| Total loans and leases held for investment | $ | 5,891,699 | $ | 5,631,240 | $ | 4,518,783 | $ | 3,832,044 | $ | 3,249,695 | 5 | % | 81 | % | |||||||||||||||||||||||||||
| Total assets | $ | 8,754,018 | $ | 7,979,747 | $ | 6,775,074 | $ | 6,186,765 | $ | 5,574,425 | 10 | % | 57 | % | |||||||||||||||||||||||||||
| Total deposits | $ | 7,218,854 | $ | 6,392,553 | $ | 5,123,506 | $ | 4,527,672 | $ | 3,977,477 | 13 | % | 81 | % | |||||||||||||||||||||||||||
| Total liabilities | $ | 7,563,276 | $ | 6,815,453 | $ | 5,653,664 | $ | 5,107,648 | $ | 4,686,991 | 11 | % | 61 | % | |||||||||||||||||||||||||||
| Total equity | $ | 1,190,742 | $ | 1,164,294 | $ | 1,121,410 | $ | 1,079,117 | $ | 887,434 | 2 | % | 34 | % | |||||||||||||||||||||||||||
N/M – Not meaningful
(1) Represents a non-GAAP financial measure. See “Reconciliation of GAAP to Non-GAAP Financial Measures.”
(2) Excludes fourth, third and second quarter 2022 income tax benefit of $3.2 million, $5.0 million and $135.3 million, respectively, due to the release of a deferred tax asset valuation allowance.
(3) Calculated as the ratio of non-interest expense to total net revenue.
(4) Calculated as annualized net income (which excludes the income tax benefit from the release of the deferred tax asset valuation allowance in the periods it did not occur) divided by average equity for the period presented.
(5) Calculated as annualized net income (which excludes the income tax benefit from the release of the deferred tax asset valuation allowance in the periods it did not occur) divided by average total assets for the period presented.
(6) Includes unsecured personal loans and auto loans only.
(7) Loans serviced on our platform, which includes unsecured personal loans, auto loans and education and patient finance loans serviced for others and held for investment by the company.
(8) Excludes loans held for investment at fair value, which primarily consists of a loan portfolio that was acquired in the fourth quarter of 2022.
The asset quality metrics presented in the following table are for loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:
| As of and for the three months ended | |||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |||||||||||||||||||||||||
| Asset Quality Metrics: | |||||||||||||||||||||||||||||
| Allowance for loan and lease losses to total loans and leases held for investment | 6.4 | % | 6.5 | % | 6.3 | % | 6.0 | % | 5.5 | % | |||||||||||||||||||
| Allowance for loan and lease losses to consumer loans and leases held for investment | 7.1 | % | 7.3 | % | 7.2 | % | 6.9 | % | 6.6 | % | |||||||||||||||||||
| Allowance for loan and lease losses to commercial loans and leases held for investment | 2.0 | % | 2.0 | % | 1.9 | % | 2.0 | % | 1.8 | % | |||||||||||||||||||
| Net charge-offs | $ | 49,845 | $ | 37,148 | $ | 22,658 | $ | 14,778 | $ | 8,632 | |||||||||||||||||||
Net charge-off ratio(1) | 3.8 | % | 3.0 | % | 2.1 | % | 1.6 | % | 1.2 | % | |||||||||||||||||||
(1) Net charge-off ratio is calculated as annualized net charge-offs divided by average outstanding loans and leases held for investment during the period, excluding PPP loans.
6
LENDINGCLUB CORPORATION
LOANS AND LEASES HELD FOR INVESTMENT
(In thousands)
(Unaudited)
The following table presents loans and leases held for investment at amortized cost and loans held for investment at fair value:
| March 31, 2023 | December 31, 2022 | ||||||||||
| Unsecured personal | $ | 4,319,148 | $ | 3,866,373 | |||||||
| Residential mortgages | 197,728 | 199,601 | |||||||||
| Secured consumer | 212,748 | 194,634 | |||||||||
| Total consumer loans held for investment | 4,729,624 | 4,260,608 | |||||||||
Equipment finance (1) | 153,905 | 160,319 | |||||||||
| Commercial real estate | 372,770 | 373,501 | |||||||||
Commercial and industrial (2) | 235,639 | 238,726 | |||||||||
| Total commercial loans and leases held for investment | 762,314 | 772,546 | |||||||||
| Total loans and leases held for investment at amortized cost | 5,491,938 | 5,033,154 | |||||||||
| Allowance for loan and lease losses | (348,857) | (327,852) | |||||||||
| Loans and leases held for investment at amortized cost, net | $ | 5,143,081 | $ | 4,705,302 | |||||||
| Loans held for investment at fair value | 748,618 | 925,938 | |||||||||
| Total loans and leases held for investment | $ | 5,891,699 | $ | 5,631,240 | |||||||
(1) Comprised of sales-type leases for equipment.
(2) Includes $51.1 million and $67.0 million of Paycheck Protection Program (PPP) loans as of March 31, 2023 and December 31, 2022, respectively. Such loans are guaranteed by the Small Business Association and, therefore, the company determined no allowance for expected credit losses is required on these loans.
LENDINGCLUB CORPORATION
ALLOWANCE FOR LOAN AND LEASE LOSSES
(In thousands)
(Unaudited)
The following tables present the allowance for loan and lease losses on loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
| Consumer | Commercial | Total | Consumer | Commercial | Total | ||||||||||||||||||||||||||||||
| Allowance for loan and lease losses, beginning of period | $ | 312,489 | $ | 15,363 | $ | 327,852 | $ | 288,138 | $ | 15,063 | $ | 303,201 | |||||||||||||||||||||||
| Credit loss expense for loans and leases held for investment | 70,684 | 166 | 70,850 | 61,392 | 407 | 61,799 | |||||||||||||||||||||||||||||
| Charge-offs | (52,212) | (351) | (52,563) | (38,579) | (225) | (38,804) | |||||||||||||||||||||||||||||
| Recoveries | 2,585 | 133 | 2,718 | 1,538 | 118 | 1,656 | |||||||||||||||||||||||||||||
| Allowance for loan and lease losses, end of period | $ | 333,546 | $ | 15,311 | $ | 348,857 | $ | 312,489 | $ | 15,363 | $ | 327,852 | |||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||
| March 31, 2022 | |||||||||||||||||
| Consumer | Commercial | Total | |||||||||||||||
| Allowance for loan and lease losses, beginning of period | $ | 128,812 | $ | 15,577 | $ | 144,389 | |||||||||||
| Credit loss expense for loans and leases held for investment | 53,718 | (1,490) | 52,228 | ||||||||||||||
| Charge-offs | (9,017) | (72) | (9,089) | ||||||||||||||
| Recoveries | 344 | 113 | 457 | ||||||||||||||
| Allowance for loan and lease losses, end of period | $ | 173,857 | $ | 14,128 | $ | 187,985 | |||||||||||
7
LENDINGCLUB CORPORATION
PAST DUE LOANS AND LEASES HELD FOR INVESTMENT
(In thousands)
(Unaudited)
The following tables present past due loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:
| March 31, 2023 | 30-59 Days | 60-89 Days | 90 or More Days | Total Days Past Due | |||||||||||||||||||
| Unsecured personal | $ | 26,941 | $ | 19,759 | $ | 18,984 | $ | 65,684 | |||||||||||||||
| Residential mortgages | 230 | — | 167 | 397 | |||||||||||||||||||
| Secured consumer | 1,922 | 260 | 187 | 2,369 | |||||||||||||||||||
| Total consumer loans held for investment | $ | 29,093 | $ | 20,019 | $ | 19,338 | $ | 68,450 | |||||||||||||||
| Equipment finance | $ | 3,020 | $ | — | $ | 771 | $ | 3,791 | |||||||||||||||
| Commercial real estate | 8,251 | 2,112 | 103 | 10,466 | |||||||||||||||||||
Commercial and industrial (1) | 941 | — | 1,608 | 2,549 | |||||||||||||||||||
Total commercial loans and leases held for investment (1) | $ | 12,212 | $ | 2,112 | $ | 2,482 | $ | 16,806 | |||||||||||||||
Total loans and leases held for investment at amortized cost (1) | $ | 41,305 | $ | 22,131 | $ | 21,820 | $ | 85,256 | |||||||||||||||
| December 31, 2022 | 30-59 Days | 60-89 Days | 90 or More Days | Total Days Past Due | |||||||||||||||||||
| Unsecured personal | $ | 21,016 | $ | 16,418 | $ | 16,255 | $ | 53,689 | |||||||||||||||
| Residential mortgages | — | 254 | 331 | 585 | |||||||||||||||||||
| Secured consumer | 1,720 | 382 | 188 | 2,290 | |||||||||||||||||||
| Total consumer loans held for investment | $ | 22,736 | $ | 17,054 | $ | 16,774 | $ | 56,564 | |||||||||||||||
| Equipment finance | $ | 3,172 | $ | — | $ | 859 | $ | 4,031 | |||||||||||||||
| Commercial real estate | — | 102 | — | 102 | |||||||||||||||||||
Commercial and industrial (1) | — | — | 1,643 | 1,643 | |||||||||||||||||||
Total commercial loans and leases held for investment (1) | $ | 3,172 | $ | 102 | $ | 2,502 | $ | 5,776 | |||||||||||||||
Total loans and leases held for investment at amortized cost (1) | $ | 25,908 | $ | 17,156 | $ | 19,276 | $ | 62,340 | |||||||||||||||
(1) Past due PPP loans are excluded from the tables.
8
LENDINGCLUB CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
(Unaudited)
| Three Months Ended | Change (%) | ||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | Q1 2023 vs Q4 2022 | Q1 2023 vs Q1 2022 | |||||||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||
| Origination fees | $ | 70,543 | $ | 100,692 | $ | 122,093 | (30) | % | (42) | % | |||||||||||||||||||
| Servicing fees | 26,380 | 20,169 | 18,514 | 31 | % | 42 | % | ||||||||||||||||||||||
| Gain on sales of loans | 14,125 | 18,352 | 24,110 | (23) | % | (41) | % | ||||||||||||||||||||||
| Net fair value adjustments | (15,414) | (15,774) | 15,249 | (2) | % | (201) | % | ||||||||||||||||||||||
| Marketplace revenue | 95,634 | 123,439 | 179,966 | (23) | % | (47) | % | ||||||||||||||||||||||
| Other non-interest income | 3,356 | 4,026 | 9,891 | (17) | % | (66) | % | ||||||||||||||||||||||
| Total non-interest income | 98,990 | 127,465 | 189,857 | (22) | % | (48) | % | ||||||||||||||||||||||
| Total interest income | 202,413 | 173,999 | 111,653 | 16 | % | 81 | % | ||||||||||||||||||||||
| Total interest expense | 55,709 | 38,756 | 11,973 | 44 | % | 365 | % | ||||||||||||||||||||||
| Net interest income | 146,704 | 135,243 | 99,680 | 8 | % | 47 | % | ||||||||||||||||||||||
| Total net revenue | 245,694 | 262,708 | 289,537 | (6) | % | (15) | % | ||||||||||||||||||||||
| Provision for credit losses | 70,584 | 61,512 | 52,509 | 15 | % | 34 | % | ||||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||
| Compensation and benefits | 73,307 | 87,768 | 81,610 | (16) | % | (10) | % | ||||||||||||||||||||||
| Marketing | 26,880 | 35,139 | 55,080 | (24) | % | (51) | % | ||||||||||||||||||||||
| Equipment and software | 13,696 | 13,200 | 11,046 | 4 | % | 24 | % | ||||||||||||||||||||||
| Depreciation and amortization | 12,354 | 11,554 | 11,039 | 7 | % | 12 | % | ||||||||||||||||||||||
| Professional services | 9,058 | 10,029 | 12,406 | (10) | % | (27) | % | ||||||||||||||||||||||
| Occupancy | 4,310 | 4,698 | 6,019 | (8) | % | (28) | % | ||||||||||||||||||||||
| Other non-interest expense | 17,703 | 17,656 | 14,004 | — | % | 26 | % | ||||||||||||||||||||||
| Total non-interest expense | 157,308 | 180,044 | 191,204 | (13) | % | (18) | % | ||||||||||||||||||||||
| Income before income tax benefit (expense) | 17,802 | 21,152 | 45,824 | (16) | % | (61) | % | ||||||||||||||||||||||
| Income tax benefit (expense) | (4,136) | 2,439 | (4,988) | N/M | (17) | % | |||||||||||||||||||||||
| Net income | $ | 13,666 | $ | 23,591 | $ | 40,836 | (42) | % | (67) | % | |||||||||||||||||||
Net income per share: | |||||||||||||||||||||||||||||
| Basic EPS – common stockholders | $ | 0.13 | $ | 0.22 | $ | 0.40 | (41) | % | (68) | % | |||||||||||||||||||
| Diluted EPS – common stockholders | $ | 0.13 | $ | 0.22 | $ | 0.39 | (41) | % | (67) | % | |||||||||||||||||||
| Weighted-average common shares – Basic | 106,912,139 | 105,650,177 | 101,493,561 | 1 | % | 5 | % | ||||||||||||||||||||||
| Weighted-average common shares – Diluted | 106,917,770 | 105,984,612 | 105,052,904 | 1 | % | 2 | % | ||||||||||||||||||||||
N/M – Not meaningful
9
LENDINGCLUB CORPORATION
NET INTEREST INCOME
(In thousands, except percentages or as noted)
(Unaudited)
Consolidated LendingClub Corporation (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2023 | Three Months Ended December 31, 2022 | Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | |||||||||||||||||||||||||||||||||||||||||||||
Interest-earning assets (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents, restricted cash and other | $ | 1,220,677 | $ | 13,714 | 4.49 | % | $ | 1,139,887 | $ | 10,595 | 3.72 | % | $ | 892,921 | $ | 688 | 0.31 | % | |||||||||||||||||||||||||||||||||||
| Securities available for sale at fair value | 362,960 | 3,900 | 4.30 | % | 349,512 | 3,359 | 3.84 | % | 325,155 | 4,511 | 5.55 | % | |||||||||||||||||||||||||||||||||||||||||
| Loans held for sale at fair value | 110,580 | 5,757 | 20.83 | % | 114,851 | 5,724 | 19.93 | % | 255,139 | 7,450 | 11.68 | % | |||||||||||||||||||||||||||||||||||||||||
| Loans and leases held for investment: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unsecured personal loans | 4,066,713 | 133,687 | 13.15 | % | 3,825,808 | 125,872 | 13.16 | % | 2,060,323 | 78,376 | 15.22 | % | |||||||||||||||||||||||||||||||||||||||||
| Commercial and other consumer loans | 1,175,504 | 16,780 | 5.71 | % | 1,164,326 | 15,197 | 5.22 | % | 1,075,412 | 13,066 | 4.86 | % | |||||||||||||||||||||||||||||||||||||||||
| Loans and leases held for investment at amortized cost | 5,242,217 | 150,467 | 11.48 | % | 4,990,134 | 141,069 | 11.31 | % | 3,135,735 | 91,442 | 11.66 | % | |||||||||||||||||||||||||||||||||||||||||
| Loans held for investment at fair value | 836,313 | 26,892 | 12.86 | % | 308,570 | 10,862 | 14.08 | % | 18,523 | 593 | 12.80 | % | |||||||||||||||||||||||||||||||||||||||||
| Total loans and leases held for investment | 6,078,530 | 177,359 | 11.67 | % | 5,298,704 | 151,931 | 11.47 | % | 3,154,258 | 92,035 | 11.67 | % | |||||||||||||||||||||||||||||||||||||||||
| Retail and certificate loans held for investment at fair value | 46,525 | 1,683 | 14.47 | % | 66,469 | 2,390 | 14.38 | % | 198,813 | 6,969 | 14.02 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 7,819,272 | 202,413 | 10.35 | % | 6,969,423 | 173,999 | 9.99 | % | 4,826,286 | 111,653 | 9.25 | % | |||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks and restricted cash | 71,878 | 64,907 | 92,683 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for loan and lease losses | (338,359) | (314,861) | (163,631) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-interest earning assets | 666,650 | 613,664 | 486,363 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 8,219,441 | $ | 7,333,133 | $ | 5,241,701 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Checking and money market accounts | $ | 1,633,691 | $ | 7,568 | 1.88 | % | $ | 1,929,260 | $ | 7,500 | 1.54 | % | $ | 2,240,450 | $ | 1,724 | 0.31 | % | |||||||||||||||||||||||||||||||||||
| Savings accounts and certificates of deposit | 4,747,478 | 45,705 | 3.90 | % | 3,576,205 | 28,251 | 3.13 | % | 1,071,133 | 1,714 | 0.64 | % | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | 6,381,169 | 53,273 | 3.39 | % | 5,505,465 | 35,751 | 2.58 | % | 3,311,583 | 3,438 | 0.42 | % | |||||||||||||||||||||||||||||||||||||||||
| Retail notes, certificates and secured borrowings | 46,525 | 1,683 | 14.47 | % | 66,469 | 2,390 | 14.38 | % | 198,813 | 6,969 | 14.02 | % | |||||||||||||||||||||||||||||||||||||||||
| Other interest-bearing liabilities | 107,520 | 753 | 2.80 | % | 105,834 | 615 | 2.33 | % | 312,690 | 1,566 | 2.00 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 6,535,214 | 55,709 | 3.46 | % | 5,677,768 | 38,756 | 2.71 | % | 3,823,086 | 11,973 | 1.25 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-interest bearing deposits | 241,954 | 251,686 | 227,337 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 263,868 | 266,558 | 319,241 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | 7,041,036 | $ | 6,196,012 | $ | 4,369,664 | |||||||||||||||||||||||||||||||||||||||||||||||
10
LENDINGCLUB CORPORATION
NET INTEREST INCOME (Continued)
(In thousands, except percentages or as noted)
(Unaudited)
Consolidated LendingClub Corporation (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2023 | Three Months Ended December 31, 2022 | Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | |||||||||||||||||||||||||||||||||||||||||||||
| Total equity | $ | 1,178,405 | $ | 1,137,121 | $ | 872,037 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 8,219,441 | $ | 7,333,133 | $ | 5,241,701 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate spread | 6.90 | % | 7.28 | % | 8.00 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income and net interest margin | $ | 146,704 | 7.50 | % | $ | 135,243 | 7.76 | % | $ | 99,680 | 8.26 | % | |||||||||||||||||||||||||||||||||||||||||
(1) Consolidated presentation reflects intercompany eliminations.
(2) Nonaccrual loans and any related income are included in their respective loan categories.
11
LENDINGCLUB CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
| March 31, 2023 | December 31, 2022 | ||||||||||
| Assets | |||||||||||
| Cash and due from banks | $ | 22,732 | $ | 23,125 | |||||||
| Interest-bearing deposits in banks | 1,614,265 | 1,033,905 | |||||||||
| Total cash and cash equivalents | 1,636,997 | 1,057,030 | |||||||||
| Restricted cash | 47,342 | 67,454 | |||||||||
Securities available for sale at fair value ($428,395 and $399,668 at amortized cost, respectively) | 380,028 | 345,702 | |||||||||
| Loans held for sale at fair value | 44,647 | 110,400 | |||||||||
| Loans and leases held for investment | 5,491,938 | 5,033,154 | |||||||||
| Allowance for loan and lease losses | (348,857) | (327,852) | |||||||||
| Loans and leases held for investment, net | 5,143,081 | 4,705,302 | |||||||||
| Loans held for investment at fair value | 748,618 | 925,938 | |||||||||
| Retail and certificate loans held for investment at fair value | 38,855 | 55,425 | |||||||||
| Property, equipment and software, net | 144,041 | 136,473 | |||||||||
| Goodwill | 75,717 | 75,717 | |||||||||
| Other assets | 494,692 | 500,306 | |||||||||
| Total assets | $ | 8,754,018 | $ | 7,979,747 | |||||||
| Liabilities and Equity | |||||||||||
| Deposits: | |||||||||||
| Interest-bearing | $ | 7,018,014 | $ | 6,158,560 | |||||||
| Noninterest-bearing | 200,840 | 233,993 | |||||||||
| Total deposits | 7,218,854 | 6,392,553 | |||||||||
| Borrowings | 52,980 | 74,858 | |||||||||
| Retail notes, certificates and secured borrowings at fair value | 38,855 | 55,425 | |||||||||
| Other liabilities | 252,587 | 292,617 | |||||||||
| Total liabilities | 7,563,276 | 6,815,453 | |||||||||
| 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; 107,460,734 and 106,546,995 shares issued and outstanding, respectively | 1,075 | 1,065 | |||||||||
| Additional paid-in capital | 1,637,283 | 1,628,590 | |||||||||
| Accumulated deficit | (414,079) | (427,745) | |||||||||
| Accumulated other comprehensive loss | (33,537) | (37,616) | |||||||||
| Total equity | 1,190,742 | 1,164,294 | |||||||||
| Total liabilities and equity | $ | 8,754,018 | $ | 7,979,747 | |||||||
12
LENDINGCLUB CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except share and per share data)
(Unaudited)
Pre-Provision Net Revenue
| For the three months ended | ||||||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | ||||||||||||||||||||||||||||
| GAAP Net income | $ | 13,666 | $ | 23,591 | $ | 43,198 | $ | 182,060 | $ | 40,836 | ||||||||||||||||||||||
| Less: Provision for credit losses | (70,584) | (61,512) | (82,739) | (70,566) | (52,509) | |||||||||||||||||||||||||||
| Less: Income tax benefit (expense) | (4,136) | 2,439 | 7,243 | 131,954 | (4,988) | |||||||||||||||||||||||||||
| Pre-provision net revenue | $ | 88,386 | $ | 82,664 | $ | 118,694 | $ | 120,672 | $ | 98,333 | ||||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | ||||||||||||||||||||||||||||
| Non-interest income | $ | 98,990 | $ | 127,465 | $ | 181,237 | $ | 213,832 | $ | 189,857 | ||||||||||||||||||||||
| Net interest income | 146,704 | 135,243 | 123,676 | 116,226 | 99,680 | |||||||||||||||||||||||||||
| Total net revenue | 245,694 | 262,708 | 304,913 | 330,058 | 289,537 | |||||||||||||||||||||||||||
| Non-interest expense | (157,308) | (180,044) | (186,219) | (209,386) | (191,204) | |||||||||||||||||||||||||||
| Pre-provision net revenue | 88,386 | 82,664 | 118,694 | 120,672 | 98,333 | |||||||||||||||||||||||||||
| Provision for credit losses | (70,584) | (61,512) | (82,739) | (70,566) | (52,509) | |||||||||||||||||||||||||||
| Income before income tax benefit (expense) | 17,802 | 21,152 | 35,955 | 50,106 | 45,824 | |||||||||||||||||||||||||||
| Income tax benefit (expense) | (4,136) | 2,439 | 7,243 | 131,954 | (4,988) | |||||||||||||||||||||||||||
| GAAP Net income | $ | 13,666 | $ | 23,591 | $ | 43,198 | $ | 182,060 | $ | 40,836 | ||||||||||||||||||||||
Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit
| For the three months ended | ||||||||||||||||||||
| December 31, 2022 | September 30, 2022 | June 30, 2022 | ||||||||||||||||||
| GAAP Net income | $ | 23,591 | $ | 43,198 | $ | 182,060 | ||||||||||||||
| Less: Income tax benefit from release of tax valuation allowance | 3,180 | 5,015 | 135,300 | |||||||||||||||||
| Net income excluding income tax benefit | $ | 20,411 | $ | 38,183 | $ | 46,760 | ||||||||||||||
| GAAP Diluted EPS – common stockholders | $ | 0.22 | $ | 0.41 | $ | 1.73 | ||||||||||||||
| (A) | Income tax benefit from release of tax valuation allowance | $ | 3,180 | $ | 5,015 | $ | 135,300 | |||||||||||||
| (B) | Weighted-average common shares – Diluted | 105,984,612 | 105,853,938 | 105,042,626 | ||||||||||||||||
| (A/B) | Diluted EPS impact of income tax benefit | $ | 0.03 | $ | 0.05 | $ | 1.29 | |||||||||||||
| Diluted EPS excluding income tax benefit | $ | 0.19 | $ | 0.36 | $ | 0.44 | ||||||||||||||
13
LENDINGCLUB CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Continued)
(In thousands, except share and per share data)
(Unaudited)
Tangible Book Value Per Common Share
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |||||||||||||||||||||||||
| GAAP common equity | $ | 1,190,742 | $ | 1,164,294 | $ | 1,121,410 | $ | 1,079,117 | $ | 887,434 | |||||||||||||||||||
| Less: Goodwill | (75,717) | (75,717) | (75,717) | (75,717) | (75,717) | ||||||||||||||||||||||||
| Less: Intangible assets | (15,201) | (16,334) | (17,512) | (18,690) | (19,886) | ||||||||||||||||||||||||
| Tangible common equity | $ | 1,099,824 | $ | 1,072,243 | $ | 1,028,181 | $ | 984,710 | $ | 791,831 | |||||||||||||||||||
| Book value per common share | |||||||||||||||||||||||||||||
| GAAP common equity | $ | 1,190,742 | $ | 1,164,294 | $ | 1,121,410 | $ | 1,079,117 | $ | 887,434 | |||||||||||||||||||
| Common shares issued and outstanding | 107,460,734 | 106,546,995 | 105,088,761 | 103,630,776 | 102,194,037 | ||||||||||||||||||||||||
| Book value per common share | $ | 11.08 | $ | 10.93 | $ | 10.67 | $ | 10.41 | $ | 8.68 | |||||||||||||||||||
| Tangible book value per common share | |||||||||||||||||||||||||||||
| Tangible common equity | $ | 1,099,824 | $ | 1,072,243 | $ | 1,028,181 | $ | 984,710 | $ | 791,831 | |||||||||||||||||||
| Common shares issued and outstanding | 107,460,734 | 106,546,995 | 105,088,761 | 103,630,776 | 102,194,037 | ||||||||||||||||||||||||
| Tangible book value per common share | $ | 10.23 | $ | 10.06 | $ | 9.78 | $ | 9.50 | $ | 7.75 | |||||||||||||||||||
14