LendingClub Reports Third Quarter 2023 Results
LendingClub Reports Third Quarter 2023 Results
October 25, 2023
Continued GAAP Profitability With Strong Capital & Liquidity Levels
Doubles Issuance of Structured Certificates With New Buyers Added to Platform
SAN FRANCISCO, Oct. 25, 2023 /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, 2023.
"Our disciplined execution has resulted in our tenth consecutive quarter of GAAP profitability. We are successfully leveraging our proprietary structured certificates program to drive marketplace issuance, while also taking difficult but necessary actions to align our expense base to current market conditions," said Scott Sanborn, LendingClub CEO. "Looking ahead, these actions combined with our strong foundation and capital base have us well positioned to capture a historic refinance opportunity as market conditions stabilize."
Third Quarter 2023 Results
Balance Sheet:
- Total assets of $8.5 billion compared to $8.3 billion in the prior quarter, primarily reflecting growth in securities related to the structured certificate program.
- Deposits of $7.0 billion compared to $6.8 billion in the prior quarter, primarily due to an increase in customer certificates of deposit.
- FDIC-insured deposits represent approximately 86% of total deposits.
- Loans and leases held for investment of $5.2 billion compared to $5.6 billion in the prior quarter as the Company grew the structured certificate and extended seasoning programs while retaining fewer held for investment loans.
- Strong capital position with a consolidated Tier 1 leverage ratio of 13.2% and consolidated Common Equity Tier 1 capital ratio of 16.9%.
- Book value per common share of $11.02 compared to $11.09 in the prior quarter.
- Tangible book value per common share of $10.21 compared to $10.26 in the prior quarter.
Financial Performance:
- Loan originations of $1.5 billion compared to $2.0 billion in the prior quarter as a result of reduced purchases by bank loan investors.
- Total net revenue of $200.8 million compared to $232.5 million in the prior quarter due to:
- Marketplace revenue of $60.9 million compared to $82.8 million in the prior quarter, primarily reflecting lower pricing on sold marketplace volumes, partially offset by a one-time benefit related to recouping volume-based purchase incentives from the bank investor channel.
- Net interest income of $137.0 million compared to $146.7 million in the prior quarter reflecting a lower balance of held for investment loans and higher deposit funding costs.
- Net income of $5.0 million, or diluted EPS of $0.05, compared to $10.1 million, or diluted EPS of $0.09, in the prior quarter.
- Pre-provision net revenue (PPNR) of $72.8 million compared to $81.4 million in the prior quarter. PPNR in the third quarter of 2023 is inclusive of:
- A non-recurring $10.4 million revenue benefit related to customer forfeitures of purchase incentives from the bank investor channel
- A non-recurring $8.9 million benefit from lower accrued variable compensation
- Severance charges of $5.4 million, partially offset by a $4.0 million reversal of previously accrued compensation
- Provision for credit losses of $64.5 million compared to $66.6 million in the prior quarter driven by lower volume of retained loans, offset by an increase in provision on the Held for Investment loan portfolio.
- Efficiency ratio improved to 63.7% compared to 65.0% in the prior quarter, driven by lower non-interest expense.
| Three Months Ended | |||
|---|---|---|---|
| ($ in millions, except per share amounts) | September 30,2023 | June 30,2023 | September 30,2022 |
| Total net revenue | $200.8 | $232.5 | $304.9 |
| Non-interest expense | 128.0 | 151.1 | 186.2 |
| Pre-provision net revenue(1) | 72.8 | 81.4 | 118.7 |
| Provision for credit losses | 64.5 | 66.6 | 82.7 |
| Income before income tax benefit (expense) | 8.3 | 14.8 | 36.0 |
| Income tax benefit (expense) | (3.3) | (4.7) | 7.2 |
| Net income | $5.0 | $10.1 | $43.2 |
| Diluted EPS | $0.05 | $0.09 | $0.41 |
| Income tax benefit from release of tax valuation allowance | — | — | 5.0 |
| Net income excluding income tax benefit(1) | $5.0 | $10.1 | $38.2 |
| Diluted EPS excluding income tax benefit(1) | $0.05 | $0.09 | $0.36 |
(1) See page 3 of this release for additional information on our use of non-GAAP financial measures.
Financial Outlook
| Fourth Quarter 2023 | |
|---|---|
| Loan Originations | $1.5B to $1.7B |
| Pre-Provision Net Revenue (PPNR) | $35M to $45M |
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 $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 4.7 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 third 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, October 25, 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 (833) 470-1428, with Access Code 896211, 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 1, 2023, by calling +1 (929) 458-6194 or outside the U.S. +1 (833) 470-1428, with Access Code 963754.
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.
LendingClub Corporation Operating Highlights (In thousands, except percentages or as noted) (Unaudited)
| As of and for the three months ended | % Change | ||||||
|---|---|---|---|---|---|---|---|
| September30,2023 | June 30,2023 | March31,2023 | December31,2022 | September30,2022 | Q/Q | Y/Y |
| $ | $ | $ | $ | (26) % | (65) % | ||
|---|---|---|---|---|---|---|---|
| Non-interest income | $ 63,844 | 85,818 | 98,990 | 127,465 | 181,237 | (26) % | (65) % |
| Net interest income | 137,005 | 146,652 | 146,704 | 135,243 | 123,676 | (7) % | 11 % |
| Total net revenue | 200,849 | 232,470 | 245,694 | 262,708 | 304,913 | (14) % | (34) % |
| Non-interest expense | 128,035 | 151,079 | 157,308 | 180,044 | 186,219 | (15) % | (31) % |
| Pre-provision net revenue^{(1)}$ | $72,814 | 81,391 | 88,386 | 82,664 | 118,694 | (11) % | (39) % |
| Provision for credit losses | 64,479 | 66,595 | 70,584 | 61,512 | 82,739 | (3) % | (22) % |
| Income before income tax benefit (expense) | 8,335 | 14,796 | 17,802 | 21,152 | 35,955 | (44) % | (77) % |
| Income tax benefit (expense) | (3,327) | (4,686) | (4,136) | 2,439 | 7,243 | (29) % | N/M |
| Net income | 5,008 | 10,110 | 13,666 | 23,591 | 43,198 | (50) % | (88) % |
| Income tax benefit from release of tax valuation allowance | — | — | — | 3,180 | 5,015 | N/M | N/M |
| Net income excluding income tax benefit^{(1)(2)}$ | $ 5,008 | 10,110 | 13,666 | 20,411 | 38,183 | (50) % | (87) % |
| $ | $ | $ | $ | $ | |||
| Basic EPS | 0.05 | 0.09 | 0.13 | 0.22 | 0.41 | (44) % | (88) % |
| Diluted EPS | 0.05 | 0.09 | 0.13 | 0.22 | 0.41 | (44) % | (88) % |
| Diluted EPS excluding income tax benefit^{(1)(2)}$ | $ 0.05 | 0.09 | 0.13 | 0.19 | 0.36 | (44) % | (86) % |
| LendingClub Corporation Performance Metrics: | |||||||
| Net interest margin | 6.9 % | 7.1 % | 7.5 % | 7.8 % | 8.3 % | ||
| Efficiency ratio^{(3)}$ | $63.7 % | 65.0 % | 64.0 % | 68.5 % | 61.1 % | ||
| Return on average equity (ROE)^{(4)}$ | 1.7 % | 3.4 % | 4.6 % | 7.2 % | 14.2 % | ||
| Return on average total assets (ROA)^{(5)}$ | 0.2 % | 0.5 % | 0.7 % | 1.1 % | 2.5 % | ||
| Marketing expense as a % of loan originations | 1.3 % | 1.2 % | 1.2 % | 1.4 % | 1.3 % | ||
| LendingClub Corporation Capital Metrics: | |||||||
| Common equity Tier 1 capital ratio | 16.9 % | 16.1 % | 15.6 % | 15.8 % | 18.3 % | ||
| Tier 1 leverage ratio | 13.2 % | 12.4 % | 12.8 % | 14.1 % | 15.7 % | ||
| Book value per common share | $ 11.02 | 11.09 | 11.08 | 10.93 | 10.67 | (1) % | 3 % |
| Tangible book value per common share^{(1)}$ | $ 10.21 | 10.26 | 10.23 | 10.06 | 9.78 | — % | 4 % |
| Loan Originations (in millions)^{(6)} | |||||||
| Total loan originations | $ 1,508 | 2,011 | 2,288 | 2,524 | 3,539 | (25) % | (57) % |
| $ | $ | $ | $ | (13)% | (50)% | ||
|---|---|---|---|---|---|---|---|
| Marketplace loans | $1,182 | 1,353 | 1,286 | 1,824 | 2,386 | ||
| Marketplace loans | $ | $ | $ | $ | $ | ||
| Loan originations held for investment | 326 | 657 | 1,002 | 701 | 1,153 | (50)% | (72)% |
| Loan originations held for investment as a % of total loan originations | 22% | 33% | 44% | 28% | 33% | ||
| Servicing Portfolio AUM(in millions)(7): | |||||||
| $ | $ | $ | $ | $ | |||
| --- | --- | --- | --- | --- | --- | --- | --- |
| Total servicing portfolio | 14,818 | 15,669 | 16,060 | 16,157 | 15,929 | (5)% | (7)% |
| Total servicing portfolio | $ | $ | $ | $ | $ | ||
| Loans serviced for others | 9,601 | 10,204 | 10,504 | 10,819 | 11,807 | (6)% | (19)% |
| Balance Sheet Data: | |||||||
| Loans and leases held for investment at amortized cost, net, excluding PPP loans | $4,879,222 | 5,160,546 | 5,091,969 | 4,638,331 | 4,414,347 | (5)% | 11% |
| Loans and leases held for investment at amortized cost, net, excluding PPP loans | $ | $ | $ | $ | $ | ||
| PPP loans | $7,560 | 17,640 | 51,112 | 66,971 | 89,379 | (57)% | (92)% |
| Total loans and leases held for investment at amortized cost, net(8) | $4,886,782 | 5,178,186 | 5,143,081 | 4,705,302 | 4,503,726 | (6)% | 9% |
| Total loans and leases held for investment at amortized cost, net(8) | $ | $ | $ | $ | $ | ||
| Loans held for investment at fair value | $326,299 | 404,119 | 748,618 | 925,938 | 15,057 | (19)% | N/M |
| Total loans and leases held for investment | $5,213,081 | 5,582,305 | 5,891,699 | 5,631,240 | 4,518,783 | (7)% | 15% |
| Total loans and leases held for investment | $ | $ | $ | $ | $ | ||
| Total assets | $8,472,351 | 8,342,506 | 8,754,018 | 7,979,747 | 6,775,074 | 2% | 25% |
| Total deposits | $7,000,263 | 6,843,535 | 7,218,854 | 6,392,553 | 5,123,506 | 2% | 37% |
| Total deposits | $ | $ | $ | $ | $ | ||
| Total liabilities | $7,264,132 | 7,136,983 | 7,563,276 | 6,815,453 | 5,653,664 | 2% | 28% |
| Total liabilities | $ | $ | $ | $ | $ | ||
| Total equity | $1,208,219 | 1,205,523 | 1,190,742 | 1,164,294 | 1,121,410 | - | 8% |
N/M – Not meaningful
(1) Represents a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures."
(2) Excludes fourth and third quarter 2022 income tax benefit of $3.2 million and $5.0 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:
| September30,2023 | June 30,2023 | March 31,2023 | December31,2022 | September30,2022 | |
|---|---|---|---|---|---|
| Asset Quality Metrics: | |||||
| Allowance for loan and lease losses to total loans and leases held for investment | 6.7% | 6.4% | 6.4% | 6.5% | 6.3% |
| Allowance for loan and lease losses to consumer loans and leases held for investment | 7.4% | 7.1% | 7.1% | 7.3% | 7.2% |
| Allowance for loan and lease losses to commercial loans and leases held for investment | 2.0% | 1.9% | 2.0% | 2.0% | 1.9% |
| $ | $ | $ | $ | $ | |
| Net charge-offs | 68795 | 59884 | 49845 | 37148 | 22658 |
| Net charge-off ratio(1) | 5.1% | 4.4% | 3.8% | 3.0% | 2.1% |
(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.
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:
| September 30,2023 | December 31,2022 | |||
|---|---|---|---|---|
| Unsecured personal | $ | 4,094,748 | $ | 3,866,373 |
| Residential mortgages | 186,510 | 199,601 | ||
| Secured consumer | 254,105 | 194,634 | ||
| Total consumer loans held for investment | 4,535,363 | 4,260,608 | ||
| Equipment finance(1) | 125,289 | 160,319 | ||
| Commercial real estate | 373,246 | 373,501 | ||
| Commercial and industrial(2) | 203,379 | 238,726 | ||
| Total commercial loans and leases held for investment | 701,914 | 772,546 | ||
| Total loans and leases held for investment at amortized cost | 5,237,277 | 5,033,154 | ||
| Allowance for loan and lease losses | (350,495) | (327,852) | ||
| Loans and leases held for investment at amortized cost, net | $ | 4,886,782 | $ | 4,705,302 |
| Loans held for investment at fair value | 326,299 | 925,938 | ||
| Total loans and leases held for investment | $ | 5,213,081 | $ | 5,631,240 |
(1) Comprised of sales-type leases for equipment.
(2) Includes $7.6 million and $67.0 million of Paycheck Protection Program (PPP) loans as of September 30, 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.
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 | |||||||
|---|---|---|---|---|---|---|---|
| September 30,2023 | June 30,2023 | ||||||
| Consumer | Commercial | Total | Consumer | Commercial | Total | ||
| Allowance for loan and lease losses, beginning of period | $341,161 | $14,002 | $355,163 | $333,546 | $15,311 | $348,857 | |
| Credit loss expense for loans and leases held for investment | 63,733 | 394 | 64,127 | 66,874 | (684) | 66,190 | |
| Charge-offs | (73,644) | (534) | (74,178) | (63,345) | (924) | (64,269) | |
| Recoveries | 5,038 | 345 | 5,383 | 4,086 | 299 | 4,385 | |
| Allowance for loan and lease losses, end of period | $336,288 | $14,207 | $350,495 | $341,161 | $14,002 | $355,163 |
| Three Months Ended | ||||
|---|---|---|---|---|
| September 30,2022 | ||||
| Consumer | Commercial | Total | ||
| Allowance for loan and lease losses, beginning of period | $228,184 | $15,076 | $243,260 | |
| Credit loss expense for loans and leases held for investment | 81,935 | 664 | 82,599 | |
| Charge-offs | (22,944) | (784) | (23,728) | |
| Recoveries | 963 | 107 | 1,070 | |
| Allowance for loan and lease losses, end of period | 288,138 | 15,063 | 303,201 |
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:
| September 30,2023 | 30-59 Days | 60-89 Days | 90 or More Days | Total Days Past Due | |||
|---|---|---|---|---|---|---|---|
| Unsecured personal | $ | 33,476 | $ | 26,668 | $ | 29,398 | $89,542 |
| Residential mortgages | - | - | 163 | 163 | |||
| Secured consumer | 1,678 | 790 | 209 | 2,677 | |||
| Total consumer loans held for investment | $ | 35,154 | $ | 27,458 | $ | 29,770 | $92,382 |
| Equipment finance | $ | - | $ | 3,150 | $ | - | $3,150 |
| Commercial real estate | 4,493 | 434 | 1,618 | 6,545 | |||
| Commercial and industrial(1) | 1,514 | 29 | 1,515 | 3,058 | |||
| Total commercial loans and leases held for investment(1) | $ | 6,007 | $ | 3,613 | $ | 3,133 | $12,753 |
| Total loans and leases held for investment at amortized cost(1) | $ | 41,161 | $ | 31,071 | $ | 32,903 | $105,135 |
| December 31,2022 | 30-59Days | 60-89Days | 90 or MoreDays | 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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share data) (Unaudited)
| September 30,2023 | June 30,2023 | September 30,2022 | Q3 2023vsQ2 2023 | Q3 2023vsQ3 2022 | ||
|---|---|---|---|---|---|---|
| Non-interest income: | ||||||
| Origination fees | $ | 60,912 | $70,989 | $127,142 | (14)% | (52)% |
| Servicing fees | 32,768 | 22,015 | 23,760 | 49% | 38% | |
| Gain on sales of loans | 8,572 | 13,221 | 23,554 | (35)% | (64)% | |
| Net fair value adjustments | (41,366) | (23,442) | (619) | 76% | N/M | |
| Marketplace revenue | 60,886 | 82,783 | 173,837 | (26)% | (65)% | |
| Other non-interest income | 2,958 | 3,035 | 7,400 | (3)% | (60)% | |
| Total non-interest income | 63,844 | 85,818 | 181,237 | (26)% | (65)% | |
| Total interest income | 207,412 | 214,486 | 143,220 | (3)% | 45% | |
| Total interest expense | 70,407 | 67,834 | 19,544 | 4% | 260% | |
| Net interest income | 137,005 | 146,652 | 123,676 | (7)% | 11% | |
| Total net revenue | 200,849 | 232,470 | 304,913 | (14)% | (34)% | |
| Provision for credit losses | 64,479 | 66,595 | 82,739 | (3)% | (22)% | |
| Non-interest expense: | ||||||
| Compensation and benefits | 58,497 | 71,553 | 84,916 | (18)% | (31)% | |
| Marketing | 19,555 | 23,940 | 46,031 | (18)% | (58)% | |
| Equipment and software | 12,631 | 13,968 | 12,491 | (10)% | 1% | |
| Depreciation and amortization | 11,250 | 11,638 | 10,681 | (3)% | 5% | |
| Professional services | 8,414 | 9,974 | 11,943 | (16)% | (30)% | |
| Occupancy | 4,612 | 4,684 | 5,051 | (2)% | (9)% | |
| Other non-interest expense | 13,076 | 15,322 | 15,106 | (15)% | (13)% | |
| Total non-interest expense | 128,035 | 151,079 | 186,219 | (15)% | (31)% | |
| Income before income tax benefit (expense) | 8,335 | 14,796 | 35,955 | (44)% | (77)% | |
| Income tax benefit (expense) | (3,327) | (4,686) | 7,243 | (29)% | N/M |
Net income per share:
| Basic EPS | $ | 0.05 | $ | 0.09 | $ | 0.41 | (44)% | (88)% |
|---|---|---|---|---|---|---|---|---|
| Diluted EPS | $ | 0.05 | $ | 0.09 | $ | 0.41 | (44)% | (88)% |
| Weighted-average common shares-Basic | 109,071,180 | 107,892,590 | 104,215,594 | 1% | 5% | |||
| Weighted-average common shares-Diluted | 109,073,194 | 107,895,072 | 105,853,938 | 1% | 3% |
N/M – Not meaningful
NET INTEREST INCOME (In thousands, except percentages or as noted) (Unaudited)
| Three Months Ended September 30,2023 | Three Months Ended June 30,2023 | Three Months Ended September 30,2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 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 | $ | $ | $ | $ | |||||
| Securities available for sale at fair value | 1,249,087 | $16,798 | 5.38% | 1,512,700 | 19,134 | 5.06% | 893,655 | $5,017 | 2.25% |
| Loans held for sale at fair value | 601,512 | 9,467 | 6.30% | 437,473 | 5,948 | 5.44% | 396,556 | 3,820 | 3.85% |
| Loans and leases held for investment: | 286,111 | 9,582 | 13.40% | 106,865 | 4,433 | 16.59% | 126,487 | 5,879 | 18.59% |
| Unsecured personal loansCommercial and other consumer loans | 4,257,3601,147,130 | 142,11816,842 | 13.35%5.87% | 4,360,5061,156,751 | 145,26216,823 | 13.33%5.82% | 3,268,6491,135,474 | 110,44613,582 | 13.52%4.78% |
| Loans and leases held for investment at amortized cost | 5,404,490 | 158,960 | 11.76% | 5,517,257 | 162,085 | 11.75% | 4,404,123 | 124,028 | 11.26% |
| Loans held for investment at fair value | 362,837 | 11,788 | 13.00% | 670,969 | 21,692 | 12.93% | 17,763 | 791 | 17.83% |
| Total loans and leases held for investment | 5,767,327 | 170,748 | 11.84% | 6,188,226 | 183,777 | 11.88% | 4,421,886 | 124,819 | 11.29% |
| Retail and certificate loans held for investment at fair value | 22,311 | 817 | 14.65% | 32,760 | 1,194 | 14.57% | 104,010 | 3,685 | 14.17% |
| Total interest-earning assets | 7,926,348 | 207,412 | 10.47% | 8,278,024 | 214,486 | 10.36% | 5,942,594 | 143,220 | 9.64% |
| Allowance for loan and lease losses | (354,263) | (354,348) | (254,849) | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Other non-interest earning assets | 691,641 | 686,956 | 597,169 | ||||||
| $ | $ | $ | |||||||
| Total assets | 8,333,168 | 8,688,853 | 6,343,325 | ||||||
| Interest-bearing liabilities | |||||||||
| Interest-bearing deposits: | |||||||||
| Checking and money market accounts | $1,271,720 | $9,541 | 2.98% | $1,397,302 | 7,760 | 2.23% | $2,192,904 | $4,575 | 0.83% |
| Savings accounts and certificates of deposit | 5,357,717 | 59,968 | 4.44% | 5,546,862 | 58,761 | 4.25% | 2,260,170 | 10,609 | 1.86% |
| Interest-bearing deposits | 6,629,437 | 69,509 | 4.16% | 6,944,164 | 66,521 | 3.84% | 4,453,074 | 15,184 | 1.35% |
| Retail notes, certificates and secured borrowings | 22,311 | 817 | 14.65% | 32,760 | 1,194 | 14.57% | 104,010 | 3,685 | 14.17% |
| Other interest-bearing liabilities | 13,567 | 81 | 2.42% | 31,409 | 119 | 1.51% | 140,904 | 675 | 1.92% |
| Total interest-bearing liabilities | 6,665,315 | 70,407 | 4.19% | 7,008,333 | 67,834 | 3.88% | 4,697,988 | 19,544 | 1.65% |
| Non-interest bearing deposits | 183,728 | 205,750 | 284,134 | ||||||
| Other liabilities | 271,118 | 272,142 | 250,086 | ||||||
| Total liabilities | 7,120,161 | 7,486,225 | 5,232,208 | ||||||
| $ | $ | $ | |||||||
| Total equity | 1,213,007 | 1,202,628 | 1,111,117 | ||||||
| Total liabilities and equity | 8,333,168 | 8,688,853 | 6,343,325 | ||||||
| Interest rate spread | 6.28% | 6.48% | 7.99% | ||||||
| Net interest income and net interest margin | $137,005 | 6.91% | $146,652 | 7.09% | $123,676 | 8.32% |
(1) Consolidated presentation reflects intercompany eliminations.
(2) Nonaccrual loans and any related income are included in their respective loan categories.
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 | |||||
|---|---|---|---|---|---|
| September 30,2023 | June 30,2023 | March 31,2023 | December 31,2022 | September 30,2022 | |
| GAAP Net income | $5,008 | 10,110 | 13,666 | 23,591 | 43,198 |
| Less: Provision for credit losses | (64,479) | (66,595) | (70,584) | (61,512) | (82,739) |
| Less: Income tax benefit (expense) | (3,327) | (4,686) | (4,136) | 2,439 | 7,243 |
| Pre-provision net revenue | 72,814 | 81,391 | 88,386 | 82,664 | 118,694 |
| For the three months ended | |||||
|---|---|---|---|---|---|
| September 30,2023 | June 30,2023 | March 31,2023 | December 31,2022 | September 30,2022 | |
| $ | $ | $ | $ | $ | |
| Non-interest income | 63,844 | 85,818 | 98,990 | 127,465 | 181,237 |
| Net interest income | 137,005 | 146,652 | 146,704 | 135,243 | 123,676 |
| Total net revenue | 200,849 | 232,470 | 245,694 | 262,708 | 304,913 |
| Non-interest expense | (128,035) | (151,079) | (157,308) | (180,044) | (186,219) |
| Pre-provision net revenue | 72,814 | 81,391 | 88,386 | 82,664 | 118,694 |
| Provision for credit losses | (64,479) | (66,595) | (70,584) | (61,512) | (82,739) |
| Income before income tax benefit (expense) | 8,335 | 14,796 | 17,802 | 21,152 | 35,955 |
| Income tax benefit (expense) | (3,327) | (4,686) | (4,136) | 2,439 | 7,243 |
| $ | $ | $ | $ | $ | |
| GAAP Net income | 5,008 | 10,110 | 13,666 | 23,591 | 43,198 |
Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit
| For the three months ended | ||
|---|---|---|
| December 31,2022 | September 30,2022 |
| GAAP Net income | $ | 23,591 | $ | 43,198 | | Less: Income tax benefit from release of tax valuation allowance(1) | | 3,180 | | 5,015 | | Net income excluding income tax benefit | $ | 20,411 | $ | 38,183 | | | | | | | | GAAP Diluted EPS | $ | 0.22 | $ | 0.41 | | (A) Income tax benefit from release of tax valuation allowance | $ | 3,180 | $ | 5,015 | | (B) Weighted-average common shares-Diluted | | 105,984,612 | | 105,853,938 | | (A/B) Diluted EPS impact of income tax benefit | $ | 0.03 | $ | 0.05 | | Diluted EPS excluding income tax benefit | $ | 0.19 | $ | 0.36 |
(1) There was no income tax benefit from the release of a tax valuation allowance during the nine months ended September 30, 2023.
Tangible Book Value Per Common Share
| September 30,2023 | June 30,2023 | March 31,2023 | December 31,2022 | September 30,2022 | |
|---|---|---|---|---|---|
| GAAP common equity | $1,208,219 | $1,205,523 | $1,190,742 | $1,164,294 | $1,121,410 |
| Less: Goodwill | (75,717) | (75,717) | (75,717) | (75,717) | (75,717) |
| Less: Intangible assets | (13,151) | (14,167) | (15,201) | (16,334) | (17,512) |
| Tangible common equity | $1,119,351 | $1,115,639 | $1,099,824 | $1,072,243 | $1,028,181 |
| Book value per common share | |||||
| GAAP common equity | $1,208,219 | $1,205,523 | $1,190,742 | $1,164,294 | $1,121,410 |
| Common shares issued and outstanding | 109,648,769 | 108,694,120 | 107,460,734 | 106,546,995 | 105,088,761 |
| $ | $ | $ | $ | ||
| Book value per common share | 11.02 | 11.09 | 11.08 | 10.93 | 10.67 |
Tangible book value per common share
| Tangible common equity | $1,119,351 | $1,115,639 | $1,099,824 | $1,072,243 | $1,028,181 |
|---|---|---|---|---|---|
| Common shares issued and outstanding | 109,648,769 | 108,694,120 | 107,460,734 | 106,546,995 | 105,088,761 |
| Tangible book value per common share | $10.21 | 10.26 | 10.23 | 10.06 | 9.78 |