LendingClub Reports Second Quarter 2024 Results
LendingClub Reports Second Quarter 2024 Results
July 30, 2024
10% Sequential Originations Growth
Strong Balance Sheet Growth with Stable Net Interest Margin Drives Increase in Revenue
SAN FRANCISCO, July 30, 2024 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the second quarter ended June 30, 2024.
"Our second quarter results mark an inflection point, with our business calibrated to the current rate environment and positioned to accelerate as conditions improve," said Scott Sanborn, LendingClub CEO. "Thanks to our unique product innovations, we were able to capture strong borrower and marketplace investor demand, delivering growth in originations, revenue, and profitability. I look forward to building on our momentum in the quarters ahead."
Second Quarter 2024 Results
Balance Sheet:
Total assets of $9.6 billion compared to $9.2 billion in the prior quarter, primarily due to growth in securities related to the structured certificates program and growth in the extended seasoning portfolio.
Securities available for sale of $2.8 billion, compared to $2.2 billion in the prior quarter, primarily reflecting growth in the structured certificates program.
Whole loans held on the balance sheet of $5.1 billion, which consists of loans and leases held for investment and loans held for sale, were roughly flat compared to the prior quarter.
Deposits of $8.1 billion compared to $7.5 billion in the prior quarter, primarily due to an increase in high-yield savings and certificates of deposit.
87% of total deposits are FDIC-insured.
Strong liquidity profile with $3.0 billion in readily available liquidity.
Strong capital position with a consolidated Tier 1 leverage ratio of 12.1% and consolidated Common Equity Tier 1 capital ratio of 17.9%.
Book value per common share increased to $11.52, compared to $11.40 in the prior quarter.
Tangible book value per common share increased to $10.75, compared to $10.61 in the prior quarter.
Financial Performance:
Loan originations of $1.8 billion, compared to $1.6 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 of $187.2 million, compared to $180.7 million in the prior quarter, driven by:
Marketplace revenue of $56.4 million, compared to $55.9 million in the prior quarter, primarily reflecting higher marketplace loan originations and improved loan sale pricing partially offset by the expected fair value adjustments on the maturing Held for Sale portfolio.
Net interest income of $128.5 million, compared to $122.9 million in the prior quarter, primarily reflecting growth in total interest-earning assets at a stable net interest margin of 5.75%.
Provision for credit losses of $35.6 million, compared to $31.9 million in the prior quarter.
Net income increased to $14.9 million, with diluted EPS of $0.13, compared to $12.3 million, with diluted EPS of $0.11, in the prior quarter. The increase was primarily driven by higher net interest income from growth in the balance sheet.
Pre-Provision Net Revenue (PPNR) of $55.0 million, compared to $48.5 million in the prior quarter, primarily driven by higher total net revenue while maintaining stable expenses.
| ($ in millions, except per share amounts) | June 30,2024 | March 31,2024 | June 30,2023 |
|---|---|---|---|
| Total net revenue | $187.2 | $180.7 | 232.5 |
| Non-interest expense | 132.3 | 132.2 | 151.1 |
| Pre-provision net revenue(1) | 55.0 | 48.5 | 81.4 |
| Provision for credit losses | 35.6 | 31.9 | 66.6 |
| Income before income tax expense | 19.4 | 16.5 | 14.8 |
| Income tax expense | (4.5) | (4.3) | (4.7) |
| Net income | $14.9 | $12.3 | 10.1 |
| Diluted EPS | $0.13 | 0.11 | 0.09 |
(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 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
| Third Quarter 2024 | |
|---|---|
| Loan originations | $1.8B to $1.9B |
| Pre-provision net revenue (PPNR) | $40M to $50M |
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 4.9 million members have joined the Club to help reach their financial goals. For more information about LendingClub, visit https://www.lendingclub.com.
LENDINGCLUB CORPORATION OPERATING HIGHLIGHTS
| As of and for the three months ended | % Change | ||||||
|---|---|---|---|---|---|---|---|
| June 30,2024 | March 31,2024 | December 31,2023 | September 30,2023 | June 30,2023 | Q/Q | Y/Y | |
| Operating Highlights: | |||||||
| Non-interest income | 58,713 | 57,800 | 54,129 | 63,844 | 85,818 | 2% | (32)% |
| Net interest income | 128,528 | 122,888 | 131,477 | 137,005 | 146,652 | 5% | (12)% |
| Total net revenue | 187,241 | 180,688 | 185,606 | 200,849 | 232,470 | 4% | (19)% |
| Non-interest expense | 132,258 | 132,233 | 130,015 | 128,035 | 151,079 | 0% | (12)% |
| Pre-provision net revenue(1) | 54,983 | 48,455 | 55,591 | 72,814 | 81,391 | 13% | (32)% |
| Provision for credit losses | 35,561 | 31,927 | 41,907 | 64,479 | 66,595 | 11% | (47)% |
| Income before income tax expense | 19,422 | 16,528 | 13,684 | 8,335 | 14,796 | 18% | 31% |
| Income tax expense | (4,519) | (4,278) | (3,529) | (3,327) | (4,686) | 6% | (4)% |
| Net income | 14,903 | 12,250 | 10,155 | 5,008 | 10,110 | 22% | 47% |
| Basic EPS | 0.13 | 0.11 | 0.09 | 0.05 | 0.09 | 18% | 44% |
| Diluted EPS | 0.13 | 0.11 | 0.09 | 0.05 | 0.09 | 18% | 44% |
| LendingClub Corporation Performance Metrics: | |||||||
| Net interest margin | 5.75% | 5.75% | 6.40% | 6.91% | 7.09% | ||
| Efficiency ratio(2) | 70.6% | 73.2% | 70.0% | 63.7% | 65.0% | ||
| Return on average equity (ROE)(3) | 4.7% | 3.9% | 3.3% | 1.7% | 3.4% | ||
| Return on average total assets (ROA)(4) | 0.6% | 0.5% | 0.5% | 0.2% | 0.5% | ||
| Marketing expense as a % of loan originations | 1.47% | 1.47% | 1.44% | 1.30% | 1.19% | ||
| LendingClub Corporation Capital Metrics: | |||||||
| Common equity Tier 1 capital ratio | 17.9% | 17.6% | 17.9% | 16.9% | 16.1% |
| Tier 1 leverage ratio | 12.1% | 12.5% | 12.9% | 13.2% | 12.4% | ||
|---|---|---|---|---|---|---|---|
| Book value per common share | $ | 11.52 | 11.40 | 11.34 | 11.02 | 11.09 | 1%4% |
| Tangible book value per common share(1) | $ | 10.75 | 10.61 | 10.54 | 10.21 | 10.26 | 1%5% |
| Loan Originations(in millions)(5): | |||||||
| Total loan originations | $ | 1,813 | 1,646 | 1,630 | 1,508 | 2,011 | 10%(10)% |
| Marketplace loans | $ | 1,477 | 1,361 | 1,432 | 1,182 | 1,353 | 9%9% |
| Loan originations held for investment | $ | 336 | 285 | 198 | 326 | 657 | 18%(49)% |
| Loan originations held for investment as a % of total loan originations | 19% | 17% | 12% | 22% | 33% | ||
| Servicing Portfolio AUM(in millions)(6): | |||||||
| Total servicing portfolio | 12,999 | 13,437 | 14,122 | 14,818 | 15,669 | (3%) (17%) | |
| Loans serviced for others | $ | 8,337 | 8,671 | 9,336 | 9,601 | 10,204 | (4%) (18%) |
(1) Represents a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures."
(2) Calculated as the ratio of non-interest expense to total net revenue.
(3) Calculated as annualized net income divided by average equity for the period presented.
(4) Calculated as annualized net income divided by average total assets for the period presented.
(5) Includes unsecured personal loans and auto loans only.
(6) 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 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 | |||||
|---|---|---|---|---|---|
| June 30,2024 | March 31,2024 | December 31,2023 | September 30,2023 | June 30,2023 | |
| GAAP Net income | $14903 | 12250 | 10155 | 5008 | 10110 |
| Less: Provision for credit losses | (35561) | (31927) | (41907) | (64479) | (66595) |
| Less: Income tax expense | (4519) | (4278) | (3529) | (3327) | (4686) |
| Pre-provision net revenue | 54983 | 48455 | 55591 | 72814 | 81391 |
| | June 30,2024 | March 31,2024 | December 31,2023 | September 30,2023 | June 30,2023 | | Non-interest income | $58,713 | 57,800 | 54,129 | 63,844 | 85,818 | | Net interest income | 128,528 | 122,888 | 131,477 | 137,005 | 146,652 | | Total net revenue | 187,241 | 180,688 | 185,606 | 200,849 | 232,470 | | Non-interest expense | (132,258) | (132,233) | (130,015) | (128,035) | (151,079) | | Pre-provision net revenue | 54,983 | 48,455 | 55,591 | 72,814 | 81,391 | | Provision for credit losses | (35,561) | (31,927) | (41,907) | (64,479) | (66,595) | | Income before income tax expense | 19,422 | 16,528 | 13,684 | 8,335 | 14,796 | | Income tax expense | (4,519) | (4,278) | (3,529) | (3,327) | (4,686) | | GAAP Net income | 14,903 | 12,250 | 10,155 | 5,008 | 10,110 |