LendingClub Reports Third Quarter 2024 Results
LendingClub Reports Third Quarter 2024 Results
October 23, 2024
Originations and Revenue Growth Supported by Return of Bank Buyers
Total Assets Grew 25% Year to Date Driven by $1.3 Billion Purchase of LendingClub Loans
Acquired Tally's Technology in October to Accelerate Product Roadmap
SAN FRANCISCO, Oct. 23, 2024 /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, 2024.
"We had a standout quarter, with credit outperformance and the return of bank buyers driving improved loan sales pricing, our capital strategy delivering a 25% larger balance sheet year to date, and strong financial performance translating to a meaningful improvement in book value per common share over the past 12 months," said Scott Sanborn, LendingClub CEO. "Looking ahead, our acquisition of Tally's award-winning credit card debt monitoring and management technology will allow us to accelerate our product roadmap and further seize on the historically large $1.3 trillion credit card refinance opportunity."
Third Quarter 2024 Results
Balance Sheet:
- Total assets of $11.0 billion compared to $9.6 billion in the prior quarter, primarily due to growth in whole loans held on the balance sheet and securities related to the structured certificates program.
- Whole loans held on the balance sheet of $6.0 billion, compared to $5.1 billion in the prior quarter, primarily reflecting the purchase of a $1.3 billion LendingClub-issued loan portfolio.
- Securities available for sale of $3.3 billion, compared to $2.8 billion in the prior quarter, primarily reflecting growth in structured certificate securities.
- Deposits of $9.5 billion compared to $8.1 billion in the prior quarter, primarily due to an increase in consumer deposits and brokered certificates of deposit to fund the loan portfolio purchase.
- Launched new direct-to-consumer LevelUp Savings product and seeing positive consumer response.
- 88% of total deposits are FDIC-insured.
- Strong liquidity profile with $3.6 billion in readily available liquidity.
- Strong capital position with a consolidated Tier 1 leverage ratio of 11.3% and consolidated Common Equity Tier 1 capital ratio of 15.9%.
- Book value per common share increased to $11.95, compared to $11.52 in the prior quarter.
- Tangible book value per common share increased to $11.19, compared to $10.75 in the prior quarter.
Financial Performance:
- Loan originations grew to $1.9 billion, compared to $1.8 billion in the prior quarter, driven by the successful execution of new consumer loan initiatives, combined with marketplace investor demand for structured certificates and higher whole loan retention.
- Total net revenue increased to $201.9 million, compared to $187.2 million in the prior quarter, driven by higher net interest income from a larger balance sheet and improved marketplace loan sales pricing.
- Provision for credit losses of $47.5 million, compared to $35.6 million in the prior quarter, driven by higher held-for-investment whole loan retention during the quarter.
- Decline in net charge-offs in the held-for-investment at amortized cost loan portfolio to $55.8 million, down from $66.8 million in the prior quarter; net charge-off ratio of 5.4% compared to 6.2% in the prior quarter.
- Net income was $14.5 million, compared to $14.9 million in the prior quarter, with diluted EPS of $0.13 in both periods.
- Pre-Provision Net Revenue (PPNR) increased to $65.5 million, compared to $55.0 million in the prior quarter, driven by a $14.7 million increase in total net revenue partially offset by a $4.0 million increase in non-interest expense.
| Three Months Ended | |||
|---|---|---|---|
| ($ in millions, except per share amounts) | September 30,2024 | June 30,2024 | September 30,2023 |
| Total net revenue | $201.9 | 187.2 | 200.8 |
| Non-interest expense | 136.3 | 132.3 | 128.0 |
| Pre-provision net revenue(1) | 65.5 | 55.0 | 72.8 |
| Provision for credit losses | 47.5 | 35.6 | 64.5 |
| Income before income tax expense | 18.0 | 19.4 | 8.3 |
| Income tax expense | (3.6) | (4.5) | (3.3) |
| Net income | 14.5 | 14.9 | 5.0 |
| Diluted EPS | 0.13 | 0.13 | 0.05 |
(1)See page 3 of this release for additional information on our use of non-GAAP financial measures.
Financial Outlook
| Fourth Quarter 2024 | |
|---|---|
| Loan originations | $1.8B to $1.9B |
| Pre-provision net revenue (PPNR) | $60M to $70M |
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 hundreds of billions of cells of data and over $90 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 5 million members have joined the Club to help reach their financial goals. For more information about LendingClub, visit LendingClub.
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 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.
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.
LENDINGCLUB CORPORATION OPERATING HIGHLIGHTS
(In thousands, except percentages or as noted)
(Unaudited)
| As of and for the three months ended | % Change | ||||||
|---|---|---|---|---|---|---|---|
| September30,2024 | June 30,2024 | March 31,2024 | December31,2023 | September30,2023 | Q/Q | Y/Y | |
| Operating Highlights: | |||||||
| Non-interest income | $61,640 | $58,713 | $57,800 | $54,129 | $63,844 | 5% | (3)% |
| Net interest income | 140,241 | 128,528 | 122,888 | 131,477 | 137,005 | 9% | 2% |
| Total net revenue | 201,881 | 187,241 | 180,688 | 185,606 | 200,849 | 8% | 1% |
| Non-interest expense | 136,332 | 132,258 | 132,233 | 130,015 | 128,035 | 3% | 6% |
| Pre-provision net revenue(1) | 65,549 | 54,983 | 48,455 | 55,591 | 72,814 | 19% | (10)% |
| Provision for credit losses | 47,541 | 35,561 | 31,927 | 41,907 | 64,479 | 34% | (26)% |
| Income before income tax expense | 18,008 | 19,422 | 16,528 | 13,684 | 8,335 | (7)% | 116% |
| Income tax expense | (3,551) | (4,519) | (4,278) | (3,529) | (3,327) | (21)% | 7% |
| Net income | $14,457 | $14,903 | $12,250 | $10,155 | $5,008 | (3)% | 189% |
| Basic EPS | $0.13 | $0.13 | $0.11 | $0.09 | $0.05 | —% | 160% |
| Diluted EPS | $0.13 | $0.13 | $0.11 | $0.09 | $0.05 | —% | 160% |
LendingClub Corporation Performance Metrics:
| September30,2024 | June 30,2024 | March 31,2024 | December31,2023 | September30,2023 | Q/Q | Y/Y | |
|---|---|---|---|---|---|---|---|
| Net interest margin | 5.63% | 5.75% | 5.75% | 6.40% | 6.91% | ||
| Efficiency ratio(2) | 67.5% | 70.6% | 73.2% | 70.0% | 63.7% | ||
| Return on average equity (ROE)(3) | 4.4% | 4.7% | 3.9% | 3.3% | 1.7% | ||
| Return on average total assets (ROA)(4) | 0.6% | 0.6% | 0.5% | 0.5% | 0.2% | ||
| Marketing expense as a % of loan originations | 1.37% | 1.47% | 1.47% | 1.44% | 1.30% |
LendingClub Corporation Capital Metrics:
| September30,2024 | June 30,2024 | March 31,2024 | December31,2023 | September30,2023 | Q/Q | Y/Y | |
|---|---|---|---|---|---|---|---|
| Common equity Tier 1 capital ratio | 15.9% | 17.9% | 17.6% | 17.9% | 16.9% | ||
| Tier 1 leverage ratio | 11.3% | 12.1% | 12.5% | 12.9% | 13.2% | ||
| Book value per common share | $11.95 | $11.52 | $11.40 | $11.34 | $11.02 | 4% | 8% |
| Tangible book value per common share(1) | $11.19 | $10.75 | $10.61 | $10.54 | $10.21 | 4% | 10% |