LendingClub Reports Third Quarter 2022 Results
LendingClub Reports Third Quarter 2022 Results
October 26, 2022
Revenue Increased 24% Year Over Year to $304.9 Million
Diluted Earnings Per Share Increased 58% Year Over Year to $0.41
Total Assets Grew 43% Year Over Year to $6.8 Billion
SAN FRANCISCO, Oct. 26, 2022 /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, 2022.
"We delivered solid results as we leaned into the strategic advantages of our digital bank in the face of a less favorable economic environment. We drove growth in recurring interest income supported by strong credit performance of our retained high-quality prime loan portfolio," said Scott Sanborn, LendingClub CEO. "As we anticipated, marketplace volumes were impacted by higher funding costs for certain loan investors, driven by rapidly increasing interest rates. Over time, as rates stabilize and we continue to reprice personal loans, we expect this impact to gradually moderate. Our digital bank and other strategic advantages position us to continue to effectively navigate the evolving economy and to capitalize on attractive growth opportunities as they emerge."
Third Quarter 2022 Results
- Loan originations were $3.5 billion, up 14% year over year.
- Total net revenue of $304.9 million grew 24% year over year, driven by growth in net interest income.
- Net interest income, a recurring stream of earnings for the company, increased 89% year over year to $123.7 million.
- Total loans held for investment (excluding PPP) grew 97% to $4.4 billion from September 30, 2021, reflecting growth in personal loan originations held for investment in the quarter of $1.2 billion, or 33% of total originations.
- Net interest margin expanded to 8.3% from 6.3% a year earlier, primarily reflecting a greater mix of personal loans which generate a higher yield than the rest of the loans held for investment.
- Marketplace revenue of $173.8 million remained flat year over year, roughly in line with marketplace sales as the company retained a higher percentage of loan originations to drive growth in recurring revenue.
- Deposits of $5.1 billion were up 80% from September 30, 2021, primarily reflecting growth in online savings deposits.
- Credit quality of the company's held-for-investment loan portfolio remained strong, with delinquency rates gradually normalizing as the portfolio seasons. The strong credit performance of the held-for-investment portfolio reflects the high quality credit profile of our borrowers with an average FICO of 730.
- Provision for credit losses of $82.7 million primarily reflects $1.2 billion of quarterly loan originations held for investment and loan portfolio growth of 97% year over year.
- The efficiency ratio improved to 61% from 73% in the third quarter of 2021 due to improved marketing efficiency, prudent management of non-marketing expenses and strong growth in net interest income.
- Net income of $43.2 million increased $16.0 million year over year. Net income for the third quarter of 2022 included an income tax benefit of $7.2 million. The earnings from the tax benefit enabled higher loan retention.
- Diluted earnings per share of $0.41 grew 58% year over year. The improvement from a year earlier primarily reflected revenue growth and improved operating efficiency, as well as a $0.05 per share benefit from the reversal of the deferred tax asset valuation allowance.
- Total equity of $1.1 billion was up $316.6 million, or 39%, from September 30, 2021, primarily reflecting net income generated over the period and the release of the deferred tax asset valuation allowance.
- Book value per common share of $10.67 increased 32% from September 30, 2021. Tangible book value per common share of $9.78 increased 38% from September 30, 2021.
- Substantial capital with a consolidated Tier 1 leverage ratio of 15.7% and consolidated Common Equity Tier 1 capital ratio of 18.3%.
- Pre-tax, pre-provision income of $118.7 million increased 76% year over year, driven by revenue growth and improved operating efficiency.
| Three Months Ended | |||
|---|---|---|---|
| ($ in millions, except per share amounts) | September 30,2022 | June 30,2022 | September 30,2021 |
| Total net revenue | $304.9 | $330.1 | $246.2 |
| Non-interest expense | 186.2 | 209.4 | 178.8 |
| Pre-tax, pre-provision income | 118.7 | 120.7 | 67.4 |
| Provision for credit losses | 82.7 | 70.6 | 37.5 |
| Income before income tax benefit (expense) | 36.0 | 50.1 | 29.9 |
| Income tax benefit (expense) | 7.2 | 132.0 | (2.7) |
| Net income | $43.2 | $182.1 | $27.2 |
| Diluted EPS | $0.41 | $1.73 | $0.26 |
| Income tax benefit from release of tax valuation allowance | $5.0 | $135.3 | — |
| Net income excluding income tax benefit(1) | $38.2 | $46.8 | $27.2 |
| Diluted EPS excluding income tax benefit(1) | $0.36 | $0.45 | $0.26 |
Financial Outlook
The company provided full year net revenue and net income guidance for 2022.
| Fourth Quarter 2022 | Full Year 2022 | |
|---|---|---|
| Total net revenue | $255M to $265M | $1,180M to $1,190M |
| Net income | $15M to $25M | $280M to $290M |
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 million members have joined the Club to help reach their financial goals. For more information about LendingClub, visit https://www.lendingclub.com.