LendingClub Reports Fourth Quarter and Full Year 2021 Results
LendingClub Reports Fourth Quarter and Full Year 2021 Results
January 26, 2022
Record Q4 Revenue and Net Income Exceed High End of Guidance and Drive Full Year Profitability 2022 Outlook Reflects Revenue Growth of approximately 40% and Net Income Growth of $100+ Million
SAN FRANCISCO, Jan. 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 fourth quarter and full year ended December 31, 2021.
"We have closed out a transformative year at LC by delivering the growth, innovation, and efficiency of a fintech along with the funding advantages, revenue diversity, and regulatory clarity of a bank," said Scott Sanborn, LendingClub's CEO. "We expect our transformed business model and data and membership advantages to help drive more than $100 million in incremental earnings in 2022 as we continue to evolve our member-focused business into a multi-product, digital marketplace bank."
Record Full Year 2021 Results Driven by Return to Growth, Transformed Business Economics and Increased Operational Efficiency
- Revenue of $818.6 million, up 157% compared to 2020, with marketplace revenue 136% higher and the new recurring stream of net interest income 259% higher year-over-year.
- Achieved GAAP profitability during 2021, with net income of $18.6 million for the year ended December 31, 2021, compared to a net loss of $187.5 million in 2020.
- Results driven by initiatives undertaken in 2021 and in prior years to improve efficiency, as well as the transformational business model changes with the bank acquisition, both of which position LendingClub well to generate continued strong revenue and earnings growth.
- Key achievements for the year include acquiring and integrating the bank, consolidating the personal, auto refinance and purchase finance loans onto one origination platform, and accelerating membership acquisition.
Record Fourth Quarter 2021 Results Exceed Expectations
- Revenue of $262.2 million, with sequential growth of 7% outpacing growth in originations.
- New recurring stream of net interest income grew 27% sequentially to $83.1 million, as the bank's loan portfolio (excluding PPP loans and including $248.9 million of yacht loans transferred to held for sale) grew 22% from September 30, 2021.
- Marketplace revenue of $170.6 million declined 2% sequentially, primarily reflecting a reduction in loans sold through the marketplace as loan retention increased from 20% in the third quarter of 2021 to 25% of total originations in the fourth quarter of 2021, driving 43% growth in the personal loan portfolio retained on the balance sheet at period end.
- Deposits grew 10% sequentially to $3.1 billion, in line with growth in our loans held for investment.
- Net income of $29.1 million, up 7% sequentially, and diluted earnings per share of $0.27 as strong revenue growth exceeded the impact of investments in loan retention, marketing and technology.
| Three Months Ended | Year Ended | ||||
|---|---|---|---|---|---|
| ($ in millions) | December 31,2021 | September 30,2021 | December 31,2020 | December 31,2021 | December 31,2020 |
| Loan originations(1) | $3069.1 | $3106.7 | $912.0 | $10381.3 | $4343.4 |
| Total revenue | $262.2 | $246.2 | $75.9 | $818.6 | $318.1 |
| Consolidated net income (loss) | 29.1 | 27.2 | (26.7) | 18.6 | (187.5) |
(1) Includes unsecured personal loans, auto loans, and education and patient finance loans only.
Financial Outlook
| (millions) | First Quarter 2022 | Full Year 2022 |
|---|---|---|
| Total revenue | $255M to $265M | $1.1B to $1.2B |
| Consolidated net income | $25M to $30M | $130M to $150M |
Notable Items Impacting Fourth Quarter 2021 Consolidated Net Income
| (millions) | Consolidated Net Income Impact(1) | Per Diluted Share Impact | Commentary |
|---|---|---|---|
| Revenue deferrals, net of amortization | $(17.1) | $0.16 | Origination fee and cost deferrals, net of interest income amortization during the period |
| Provision for credit losses, less net charge-offs | $(39.5) | $0.37 | Primarily for consumer loans originated and retained in the quarter |
| Total | $(56.6) | $0.53 |
(1) Amounts presented net of tax.
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 $70 billion in loans, our artificial intelligence-driven 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 3.9 million members have joined the Club to help reach their financial goals. For more information about LendingClub, visit LendingClub.
LENDINGCLUB CORPORATION OPERATING HIGHLIGHTS (In thousands, except percentages or as noted) (Unaudited)
| As of and for the three months ended | % Change | ||||||
|---|---|---|---|---|---|---|---|
| December 31,2021 | September 30,2021 | June 30,2021 | March 31,2021 | December 31,2020 | Q/Q | Y/Y | |
| Operating Highlights: | |||||||
| Non-interest income | $179,111 | 180,878 | 158,476 | 87,334 | 72,597 | (1)% | 147% |
| Net interest income | $83,132 | 65,288 | 45,905 | 18,506 | 2,899 | 27% | N/M |
| Total net revenue | 262,243 | 246,166 | 204,381 | 105,840 | 75,496 | 7% | 247% |
| Consolidated net income (loss) | $29,108 | 27,185 | 9,371 | (47,084) | (26,655) | 7% | N/M |
| Basic EPS – common stockholders | $0.29 | 0.27 | 0.10 | (0.49) | (0.29) | 7% | N/M |
| Diluted EPS – common stockholders | 0.27 | 0.26 | 0.09 | (0.49) | (0.29) | 4% | N/M |
N/M – Not meaningful
(1) Includes unsecured personal loans, auto loans, and education and patient finance loans only.
N/M – Not meaningful
N/A – Not applicable
(1) Calculated as the ratio of non-interest expense to total net revenue.
(2) Includes unsecured personal loans, auto loans, and education and patient finance loans only.
Loans serviced on our platform, which includes personal and auto loans serviced for others and retained for investment by the (3) Company.
LENDINGCLUB CORPORATION LOANS AND LEASES HELD FOR INVESTMENT (In thousands, except percentages or as noted) (Unaudited)
| December 31,2021 | September 30,2021 | |
|---|---|---|
| Unsecured personal | $1,804,578 | 1,258,279 |
| Residential mortgages | 151,362 | 141,200 |
| Secured consumer | 65,976 | 314,539 |
| Other consumer | — | 1,220 |
| Total consumer loans held for investment | 2,021,916 | 1,715,238 |
| Equipment finance(1) | 149,155 | 157,457 |
| Commercial real estate | 310,399 | 316,135 |
| Commercial and industrial(2) | 417,656 | 519,162 |
| Total commercial loans and leases held for investment | 877,210 | 992,754 |
| Total loans and leases held for investment | 2,899,126 | 2,707,992 |
| Allowance for loan and lease losses | (144,389) | (104,736) |
| Loans and leases held for investment, net | 2,754,737 | 2,603,256 |
(1) Comprised of sales-type leases for equipment.
(2) Includes $268.3 million and $367.6 million of Paycheck Protection Program (PPP) loans as of December 31, 2021 and September 30, 2021, 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.
N/M – Not meaningful
(1) Calculated as the ratio of non-interest expense to total net revenue.
(2) Includes unsecured personal loans, auto loans, and education and patient finance loans only.
Loans serviced on our platform, which includes personal and auto loans serviced for others and retained for investment by the Company.
N/M – Not meaningful
(1) Calculated as the ratio of non-interest expense to total net revenue.
(2) Marketplace revenue consists of the following:
| Year Ended December 31, | ||
|---|---|---|
| 2021 | 2020 | |
| Non-interest income: | ||
| Marketplace revenue(2) | $578,580 | $245,314 |
| Other non-interest income | 27,219 | 13,442 |
| Total non-interest income | $605,799 | $258,756 |
| Interest income: | ||
| Interest on loans held for sale | 29,540 | 72,876 |
| Interest and fees on loans and leases held for investment | 188,977 | - |
| Interest on retail and certificate loans held for investment at fair value | 57,684 | 115,952 |
| Interest on other loans held for investment at fair value | 4,436 | 7,688 |
| Interest on securities available for sale | 11,025 | 12,125 |
| Other interest income | 1,170 | 1,053 |
| Total interest income | 292,832 | 209,694 |
| Interest expense: | ||
| Interest on deposits | 7,228 | - |
| Interest on short-term borrowings | 3,677 | 17,837 |
| Interest on retail notes, certificates and secured borrowings | 57,684 | 115,952 |
| Interest on Structured Program borrowings | 9,638 | 16,204 |
| Interest on other long-term debt | 1,774 | 373 |
| Total interest expense | 80,001 | 150,366 |
| Net interest income | 212,831 | 59,328 |
Produced by LendingClub Corporation for consolidated reporting.
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