LendingClub Reports Second Quarter 2023 Results
LendingClub Reports Second Quarter 2023 Results
July 26, 2023
Continued Profitability with Strong Capital & Liquidity Levels
Successful Launch of Structured Certificates Program
SAN FRANCISCO, July 26, 2023 /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, 2023.
"We're leaning into our data, membership, and business model advantages to deliver continued profitability in a difficult environment," said Scott Sanborn, LendingClub CEO. "While we expect the headwinds in the marketplace to persist, we're managing the business prudently, continuing our disciplined credit underwriting, and developing new structures to meet the evolving needs of loan investors. We are maintaining strong liquidity and capital and remain positioned to capture the massive long-term growth opportunities to help our members keep more of what they earn and earn more on what they save."
Second Quarter 2023 Results
Balance Sheet:
- Total assets of $8.3 billion compared to $8.8 billion in the prior quarter, reflecting a lower cash position due to the planned maturity of brokered deposits.
- Deposits of $6.8 billion compared to $7.2 billion in the prior quarter primarily due to the planned maturity of brokered deposits.
- FDIC-insured deposits represent approximately 85% of total deposits.
- Loans and leases held for investment of $5.6 billion compared to $5.9 billion in the prior quarter as we moved $200 million in loans into a held for sale designation.
- Substantial capital position with a consolidated Tier 1 leverage ratio of 12.4% and consolidated Common Equity Tier 1 capital ratio of 16.1%.
- Book value per common share of $11.09, up from $11.08 in the prior quarter.
- Tangible book value per common share of $10.26, up from $10.23 in the prior quarter.
Financial Performance:
- Loan originations of $2.0 billion compared to $2.3 billion in the prior quarter with sold loan volume up modestly, offset by reduced loan retention.
- Total net revenue of $232.5 million compared to $245.7 million in the prior quarter, driven by lower marketplace revenue.
- Net interest income of $146.7 million remained flat from the prior quarter as higher interest income was offset by higher cost of interest-bearing deposits.
- Marketplace revenue of $82.8 million compared to $95.6 million in the prior quarter, reflecting lower price on sold marketplace volumes.
- Net income of $10.1 million, or diluted EPS of $0.09, compared to $13.7 million, or diluted EPS of $0.13, in the prior quarter.
- Pre-provision net revenue (PPNR) of $81.4 million compared to $88.4 million in the prior quarter, reflecting lower marketplace revenue, partially offset by lower non-interest expense.
- Provision for credit losses of $66.6 million compared to $70.6 million in the prior quarter driven by lower volume of retained loans, offset by a modest increase in provision for the portfolio.
- Efficiency ratio of 65.0% compared to 64.0% in the prior quarter due to a decline in marketplace revenue, partially offset by lower non-interest expense.
| ($ in millions, except per share amounts) | June 30,2023 | March 31,2023 | June 30,2022 | ||
|---|---|---|---|---|---|
| Total net revenue | $ | 232.5 | $ | 245.7 | $330.1 |
| Non-interest expense | 151.1 | 157.3 | 209.4 | ||
| Pre-provision net revenue(1) | 81.4 | 88.4 | 120.7 | ||
| Provision for credit losses | 66.6 | 70.6 | 70.6 | ||
| Income before income tax benefit (expense) | 14.8 | 17.8 | 50.1 | ||
| Income tax benefit (expense) | (4.7) | (4.1) | 132.0 | ||
| Net income | $ | 10.1 | $ | 13.7 | 182.1 |
| Diluted EPS | $ | 0.09 | $ | 0.13 | 1.73 |
| Income tax benefit from release of tax valuation allowance | $ | - | $ | - | 135.3 |
| Net income excluding income tax benefit(1) | $ | 10.1 | $ | 13.7 | 46.8 |
| Diluted EPS excluding income tax benefit(1) | $ | 0.09 | $ | 0.13 | 0.45 |
(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
| Third Quarter 2023 | |
|---|---|
| Loan Originations | $1.4B to $1.7B |
| 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 more than 150 billion cells of data and over $85 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 second 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, July 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 (833) 470-1428, with Access Code 447049, 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 August 2, 2023, by calling +1 (929) 458-6194 or outside the U.S. +1 (866) 813-9403, with Access Code 653185.