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LendingClub
3Q 2021 Results & Financial Metrics
The Problem We’re Solving
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Many American households have turned to credit cards to manage their finances, which has resulted in 40% of American households carrying over $1 trillion of revolving debt. Much of this debt is overpriced and LendingClub exists to provide Americans with a better way to access affordable credit.
LendingClub’s 3.8+ million members have already come to us to access lower-cost credit. Our members are generally high income ($100K avg.) and high FICO (700 avg.), but they also have high debt.
And 83% tell us they want to do more!
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Our direct-to-consumer digital marketplace bank features a vertically integrated model that allows us to reimagine banking, including lending, spending, and savings for our members.
Award-Winning Member-Focused Digital Marketplace Bank
Customers¹
3.8+ Million
Originations¹
$68+ Billion
Vision
Become America’s Financial Health Club.
Mission
Empower Our Members on Their Path to Financial Health.
Promise
To champion the financial success of our members with fairness, simplicity, and heart.
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Best Overall Checking Account, April 2021
Best of Both Worlds
Positioned well against both the fintech and bank competitive sets
| LendingClub | Fintechs | Banks | ||
|---|---|---|---|---|
| Economics | Ability to efficiently serve a broad range of customers | √ | √ | X |
| Economics | Capital-light, high-ROE marketplace earnings stream | √ | √ | X |
| Economics | Highly profitable earnings via loan portfolio | √ | X | √ |
| Economics | Lower-cost deposit funding | √ | X | √ |
| Economics | Fully integrated originations and deposit model | √ | X | √ |
| Economics | National digital-first consumer footprint | √ | √ | X |
| Scale&Scalability | Vast data advantage from serving millions of personal loan customers | √ | X | X |
| Scale&Scalability | Unencumbered by high-cost branch network and legacy systems | √ | √ | X |
| Scale&Scalability | Strong growth trajectory | √ | √ | X |
| Resiliency | Recurring revenue stream | √ | X | √ |
| Resiliency | Stability of funding | √ | X | √ |
| Resiliency | Clear and consistent regulatory framework | √ | X | √ |
3Q21 Highlights: Exceeded All Targets
| 3Q21 Guidance Targets | Actuals | Commentary | |
|---|---|---|---|
| Originations | $2.8B to $3.0B | ✔$3.1B(14% QoQ) | Leveraged our competitive advantages and data science capabilities to drive existing and new member response and conversion rates |
| Revenue | $215M to $230M | ✔$246.2M(20% QoQ) | Revenue growth outpacing originations growth as: |
| Growth in marketplace revenue of 15% driven by growth in origination volumes | |||
| Rapidly building recurring net interest income growth of 42% driven by growth in consumer loan portfolio and low-cost deposit funding | |||
| GAAP Net Income | $10M to $15M | ✔$27.2M(190% QoQ) | Achieved record GAAP Net Income |
| Net Income driven by revenue growth, fixed expense management, and positive operating leverage |
Growth Driven by Accelerating Recurring Revenue
Net Interest Income reflects recurring revenue stream driven by growing consumer portfolio of 39% QoQ
Non-interest Income driven by marketplace revenue from new loan originations in the period
Origination Growth & Marketplace Revenue Driven by New Customer Acquisition & Data Advantages
Quarterly Loan Originations and Quarterly Marketplace Revenue
($ in millions)
$3,107
$2,722 Held for Investment
$174.6 Marketplace Originations
Marketplace Drive Revenue
$2,471 Marketplace
$1,483 Revenue
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Interest Income from HFI Portfolio Grew 48% QoQ as Consumer Loan Portfolio Momentum Builds
Bank Average Held for Investment Balances¹
($ in millions)
| Consumer Loans | $2,509M | $1,240 | $39.1M |
| Commercial/PPP Loans | $57.6M | $1,895M | $1,054 |
Growing Consumer Loan Portfolio Drives Yield Expansion
Key Bank Balance Sheet Data
| Average Balances | Average Yield | |||
|---|---|---|---|---|
| Unsecured personal loans | $147 | $991 | 13.85% | 15.95% |
| Secured consumer loans | $521 | $464 | 3.70% | 4.04% |
| Commercial loans and leases | $605 | $617 | 5.07% | 5.11% |
| PPP loans | $621 | $437 | 3.45% | 5.07% |
| HFI Loans | $1,895 | $2,509 | 4.84% | 9.19% |
| Other interest-earning assets² | $1,034 | $1,023 | 1.27% | 2.72% |
| Total Interest-earning Assets | $2,929 | $3,533 | 3.58% | 7.32% |
Operating Leverage Continues to Increase
Driving further efficiency while investing in membership growth
| Total Non-interest Expense ($ in millions) | |
|---|---|
| Compensation&Benefits | 73.3 |
| Marketing | 50.8 |
| Equipment&Software | 10.3 |
| Occupancy | 6.5 |
| Depreciation&Amortization | 10.5 |
| Professional Services | 11.7 |
| Other Non-interest Expense | 15.6 |
| Total Non-Interest Expense | 178.8 |
Vertically Integrated Marketplace Bank
| Marketplace Only(4Q19) | Marketplace Bank(3Q21) | Variance | ||
|---|---|---|---|---|
| Originations | $3.1B | $3.1B | $0 | |
| Revenue | $188.5M | $246.2M | +$57.7M | |
| GAAP Net Income | $0.2M | $27.2M | +$27M |
Significantly Lower Delinquency Rates Across the Credit Cycle
Q4 2019 Prime Vintage 30-Day Delinquency Rates (TransUnion Data)
Credit Performance
Personal loans impacted most by pandemic (Q4’19 vintage) outperformed overall industry and other fintechs, driven by timely and proactive use of forbearance and payment plans combined with our:
Raising Full Year Outlook
| As of 10/27/21 | As of 07/28/21 | ||
|---|---|---|---|
| 4Q21 Guidance | FY21 Guidance | Prior FY21 Guidance | |
| Originations | $2.8B to $3.0B | $10.1B to $10.3B | $9.8B to $10.2B |
| Revenue | $240M to $250M | $796M to $806M | $750M to $780M |
| GAAP Net Income | $20M to $25M | $9M to $14M | ($13M) to ($3M) |