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LendingClub Reports Third Quarter 2022 Results

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October 26, 2022 4:06 PM EDT

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.

LC) is the parent company of LendingClub Bank, National Association, Member FDIC. LendingClub Bank is the leading digital marketplace bank in the U.S." alt="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." />

"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

(1)   

Third and second quarters of 2022 include income tax benefit of $5.0 million and $135.3 million, respectively, due to the release of a deferred tax asset valuation allowance. See page 3 of this release for additional information on our use of non-GAAP financial measures.

For a calculation of 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

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.

Conference Call and Webcast Information

The LendingClub third quarter 2022 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, October 26, 2022. 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 (844) 200-6205, or outside the U.S. +1 (929) 526-1599, with Access Code 659586, 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 2, 2022, by calling +1 (866) 813-9403 or outside the U.S. +44 (204) 525-0658, with Access Code 037801. LendingClub has used, and intends to use, its investor relations website, blog (http://blog.lendingclub.com), Twitter handle (@LendingClub) and Facebook page (https://www.facebook.com/LendingClubTeam) as a means of disclosing material non-public information and to comply with its disclosure obligations under Regulation FD.

ContactsFor Investors:[email protected]

Media Contact:[email protected]

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: 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 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. Net Income Excluding Income Tax Benefit adjusts for the release of a deferred tax asset valuation allowance in the third and second quarters of 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.

We believe Tangible Book Value (TBV) Per Common Share is an important measure used to evaluate the company's use of equity. TBV Per Common Share is a non-GAAP financial measure representing common equity reduced by goodwill and intangible assets, divided by ending common shares issued and outstanding.

For a reconciliation of such measures to the nearest GAAP measures, please refer to the tables on page 16 of this release.

Safe Harbor Statement

Some of the statements above, including statements regarding our competitive advantages, macroeconomic outlook, anticipated future performance and financial results, are "forward-looking statements." The words "anticipate," "believe," "estimate," "expect," "intend," "may," "outlook," "plan," "predict," "project," "will," "would" and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include: our ability to continue to attract and retain new and existing customers; competition; overall economic conditions; the regulatory environment; demand for the types of loans facilitated by us; default rates and those factors set forth in the section titled "Risk Factors" in our most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, as well as in our subsequent filings with the Securities and Exchange Commission. We may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

LENDINGCLUB CORPORATIONOPERATING HIGHLIGHTS(In thousands, except percentages or as noted)(Unaudited)

As of and for the three months ended

% Change

September 30,2022

June 30,2022

March 31,

2022

December 31,

2021

September 30,2021

Q/Q

Y/Y

Operating Highlights:

Non-interest income

$      181,237

$  213,832

$  189,857

$     179,111

$      180,878

(15) %

— %

Net interest income

123,676

116,226

99,680

83,132

65,288

6 %

89 %

Total net revenue

304,913

330,058

289,537

262,243

246,166

(8) %

24 %

Non-interest expense

186,219

209,386

191,204

188,220

178,775

(11) %

4 %

Pre-tax, pre-provision income

118,694

120,672

98,333

74,023

67,391

(2) %

76 %

Provision for credit losses

82,739

70,566

52,509

45,149

37,524

17 %

120 %

Income before income tax benefit (expense)

35,955

50,106

45,824

28,874

29,867

(28) %

20 %

Income tax benefit (expense)

7,243

131,954

(4,988)

234

(2,682)

N/M

N/M

Net income

43,198

182,060

40,836

29,108

27,185

(76) %

59 %

Income tax benefit from release of tax valuation allowance

5,015

135,300

—

—

—

N/M

N/M

Net income excluding income tax benefit(1)(2)

$        38,183

$    46,760

$    40,836

$       29,108

$        27,185

(18) %

40 %

Basic EPS – common stockholders

$            0.41

$        1.77

$        0.40

$           0.29

$            0.27

(77) %

52 %

Diluted EPS – common stockholders

$            0.41

$        1.73

$        0.39

$           0.27

$            0.26

(76) %

58 %

Diluted EPS excluding income tax benefit(1)(2)

$            0.36

$        0.45

$        0.39

$           0.27

$            0.26

(20) %

38 %

LendingClub Corporation Performance Metrics:

Net interest margin

8.3 %

8.5 %

8.3 %

7.6 %

6.3 %

Efficiency ratio(3)

61.1 %

63.4 %

66.0 %

71.8 %

72.6 %

Return on average equity (ROE)

14.2 %

33.8 %

18.7 %

14.1 %

13.8 %

Return on average total assets (ROA)

2.5 %

5.5 %

3.1 %

2.4 %

2.4 %

Marketing expense as a % of loan originations

1.3 %

1.6 %

1.7 %

1.7 %

1.6 %

LendingClub Corporation Capital Metrics:

Common Equity Tier 1 Capital Ratio

18.3 %

20.0 %

20.6 %

21.3 %

22.8 %

Tier 1 Leverage Ratio

15.7 %

16.2 %

15.6 %

16.5 %

16.2 %

Book Value per Common Share

$          10.67

$      10.41

$        8.68

$           8.41

$            8.07

2 %

32 %

Tangible Book Value per Common Share(2)

$            9.78

$        9.50

$        7.75

$           7.46

$            7.08

3 %

38 %

Loan originations (in millions)(4):

Total loan originations

$          3,539

$      3,840

$      3,217

$         3,069

$          3,107

(8) %

14 %

Marketplace loans

$          2,386

$      2,819

$      2,360

$         2,308

$          2,471

(15) %

(3) %

Loan originations held for investment

$          1,153

$      1,021

$         856

$            761

$             636

13 %

81 %

Loan originations held for investment as a % of total loan originations

33 %

27 %

27 %

25 %

20 %

Servicing portfolio AUM (in millions)(5):

Total servicing portfolio

$          15,929

$    14,783

$    13,341

$         12,463

$          11,592

8 %

37 %

Loans serviced for others

$          11,807

$    11,382

$    10,475

$         10,124

$            9,744

4 %

21 %

Balance Sheet Data:

Loans and leases held for investment, net, excluding PPP loans

$   4,414,347

$  3,692,667

$  3,049,325

$  2,486,440

$   2,235,698

20 %

97 %

PPP loans

$        89,379

$  118,794

$  184,986

$     268,297

$      367,558

(25) %

(76) %

Total loans and leases held for investment, net

$   4,503,726

$  3,811,461

$  3,234,311

$  2,754,737

$   2,603,256

18 %

73 %

Total assets

$   6,775,074

$  6,186,765

$  5,574,425

$  4,900,319

$   4,750,760

10 %

43 %

Total deposits

$   5,123,506

$  4,527,672

$  3,977,477

$  3,135,788

$   2,838,719

13 %

80 %

Total liabilities

$   5,653,664

$  5,107,648

$  4,686,991

$  4,050,077

$   3,945,970

11 %

43 %

Total equity

$   1,121,410

$  1,079,117

$  887,434

$     850,242

$      804,790

4 %

39 %

Allowance Ratios:

Allowance for loan and lease losses to total loans and leases held for investment

6.3 %

6.0 %

5.5 %

5.0 %

3.9 %

Allowance for loan and lease losses to total loans and leases held for investment, excluding PPP loans

6.4 %

6.2 %

5.8 %

5.5 %

4.5 %

Allowance for loan and lease losses to consumer loans and leases held for investment

7.2 %

6.9 %

6.6 %

6.4 %

5.2 %

Allowance for loan and lease losses to commercial loans and leases held for investment

1.9 %

2.0 %

1.8 %

1.8 %

1.6 %

Allowance for loan and lease losses to commercial loans and leases held forinvestment, excluding PPP loans

2.2 %

2.3 %

2.3 %

2.6 %

2.6 %

N/M

– Not meaningful

N/A

– Not applicable

(1)

Excludes third and second quarter 2022 income tax benefit of $5.0 million and $135.3 million, respectively, due to the release of a deferred tax asset valuation allowance.

(2)

Represents a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures."

(3)

Calculated as the ratio of non-interest expense to total net revenue.

(4)

Includes unsecured personal loans, auto loans, and education and patient finance loans only.

(5)

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.

 

LENDINGCLUB CORPORATIONLOANS AND LEASES HELD FOR INVESTMENT(In thousands)(Unaudited)

September 30,2022

December 31, 2021

Unsecured personal

$         3,642,254

$         1,804,578

Residential mortgages

197,776

151,362

Secured consumer

180,768

65,976

Total consumer loans held for investment

4,020,798

2,021,916

Equipment finance (1)

167,447

149,155

Commercial real estate

372,406

310,399

Commercial and industrial (2)

246,276

417,656

Total commercial loans and leases held for investment

786,129

877,210

Total loans and leases held for investment

4,806,927

2,899,126

Allowance for loan and lease losses

(303,201)

(144,389)

Loans and leases held for investment, net

$         4,503,726

$         2,754,737

(1)

Comprised of sales-type leases for equipment.

(2)

Includes $89.4 million and $268.3 million of Paycheck Protection Program (PPP) loans as of September 30, 2022 and December 31, 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.

 

LENDINGCLUB CORPORATIONALLOWANCE FOR LOAN AND LEASE LOSSES(In thousands)(Unaudited)

Three Months Ended

September 30, 2022

June 30, 2022

Consumer

Commercial

Total

Consumer

Commercial

Total

Allowance for loan and lease losses, beginning of period

$    228,184

$        15,076

$ 243,260

$    173,857

$        14,128

$ 187,985

Credit loss expense for loans and leases held for investment

81,935

664

82,599

68,314

1,739

70,053

Charge-offs

(22,944)

(784)

(23,728)

(14,707)

(1,145)

(15,852)

Recoveries

963

107

1,070

720

354

1,074

Allowance for loan and lease losses, end of period

$    288,138

$        15,063

$ 303,201

$    228,184

$        15,076

$ 243,260

 

Three Months Ended

September 30, 2021

Consumer

Commercial

Total

Allowance for loan and lease losses, beginning of period

$      54,058

$        17,023

$   71,081

Credit loss expense for loans and leases held for investment

37,695

(562)

37,133

Charge-offs

(3,142)

(1,194)

(4,336)

Recoveries

20

838

858

Allowance for loan and lease losses, end of period

$      88,631

$        16,105

$ 104,736

 

LENDINGCLUB CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands, except share and per share data)(Unaudited)

Three Months Ended

Change (%)

September 30,2022

June 30,2022

September 30,2021

Q3 2022

vs

Q3 2021

Q3 2022

vs

Q2 2022

Non-interest income:

Marketplace revenue (1)

$        173,837

$      206,384

$        174,556

— %

(16) %

Other non-interest income

7,400

7,448

6,322

17 %

(1) %

Total non-interest income

181,237

213,832

180,878

— %

(15) %

Interest income:

Interest on loans held for sale

5,879

7,130

8,536

(31) %

(18) %

Interest and fees on loans and leases heldfor investment

124,028

108,911

57,644

115 %

14 %

Interest on retail and certificate loans held for investment at fair value

3,685

5,091

12,172

(70) %

(28) %

Interest on other loans held for investment at fair value

791

631

973

(19) %

25 %

Interest on securities available for sale

3,820

4,426

3,180

20 %

(14) %

Other interest income

5,017

2,279

355

N/M

120 %

Total interest income

143,220

128,468

82,860

73 %

11 %

Interest expense:

Interest on deposits

15,184

6,078

1,899

700 %

150 %

Interest on short-term borrowings

87

417

849

(90) %

(79) %

Interest on retail notes, certificates and secured borrowings

3,685

5,091

12,172

(70) %

(28) %

Interest on Structured Program borrowings

225

360

2,120

(89) %

(38) %

Interest on other long-term debt

363

296

532

(32) %

23 %

Total interest expense

19,544

12,242

17,572

11 %

60 %

Net interest income

123,676

116,226

65,288

89 %

6 %

Total net revenue

304,913

330,058

246,166

24 %

(8) %

Provision for credit losses

82,739

70,566

37,524

120 %

17 %

Non-interest expense:

Compensation and benefits

84,916

85,103

73,304

16 %

— %

Marketing

46,031

61,497

50,782

(9) %

(25) %

Equipment and software

12,491

12,461

10,297

21 %

— %

Occupancy

5,051

6,209

6,486

(22) %

(19) %

Depreciation and amortization

10,681

10,557

10,549

1 %

1 %

Professional services

11,943

16,138

11,750

2 %

(26) %

Other non-interest expense

15,106

17,421

15,607

(3) %

(13) %

Total non-interest expense

186,219

209,386

178,775

4 %

(11) %

Income before income tax benefit (expense)

35,955

50,106

29,867

20 %

(28) %

Income tax benefit (expense)

7,243

131,954

(2,682)

N/M

N/M

Net income

$          43,198

$      182,060

$          27,185

59 %

(76) %

Net income per share: 

Basic EPS – common stockholders

$              0.41

$           1.77

$             0.27

52 %

(77) %

Diluted EPS – common stockholders

$              0.41

$           1.73

$             0.26

58 %

(76) %

Weighted-average common shares – Basic

104,215,594

102,776,867

99,073,507

5 %

1 %

Weighted-average common shares – Diluted

105,853,938

105,042,626

106,108,662

— %

1 %

N/M

– Not meaningful

(1)

Marketplace revenue consists of the following:

 

Three Months Ended

Change (%)

September 30,2022

June 30,2022

September 30,2021

Q3 2022

vs

Q3 2021

Q3 2022

vs

Q2 2022

Origination fees

$        127,142

$     149,252

$       129,125

(2) %

(15) %

Servicing fees

23,760

18,166

20,819

14 %

31 %

Gain on sales of loans

23,554

29,319

21,907

8 %

(20) %

Net fair value adjustments

(619)

9,647

2,705

(123) %

(106) %

Total marketplace revenue

$        173,837

$     206,384

$       174,556

— %

(16) %

 

LENDINGCLUB CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS BY SEGMENT(In Thousands)(Unaudited)

LendingClub

Bank

LendingClub

Corporation

(Parent only)

Intercompany

Eliminations

Total

September 30,2022

December 31, 2021

September 30,2022

December 31, 2021

September 30,2022

December 31, 2021

September 30,2022

December 31, 2021

Assets

Total cash and cash equivalents

$        896,519

$       659,919

$        109,200

$         88,268

$        (52,878)

$        (61,061)

$        952,841

$       687,126

Restricted cash

—

—

78,746

76,540

(12,461)

(80)

66,285

76,460

Securities available for sale at fair value

338,096

205,730

21,061

57,800

—

—

359,157

263,530

Loans held for sale

90,058

335,449

—

55,799

—

—

90,058

391,248

Loans and leases held for investment, net

4,503,726

2,754,737

—

—

—

—

4,503,726

2,754,737

Retail and certificate loans held for investment at fair value

—

—

87,144

229,719

—

—

87,144

229,719

Other loans held for investment at fair value

—

—

15,057

21,240

—

—

15,057

21,240

Property, equipment and software, net

89,576

36,424

40,381

61,572

—

—

129,957

97,996

Investment in subsidiary

—

—

671,574

557,577

(671,574)

(557,577)

—

—

Goodwill

75,717

75,717

—

—

—

—

75,717

75,717

Other assets

305,456

254,075

207,556

168,042

(17,880)

(119,571)

495,132

302,546

Total assets

6,299,148

4,322,051

1,230,719

1,316,557

(754,793)

(738,289)

6,775,074

4,900,319

Liabilities and Equity

Total deposits

5,188,845

3,196,929

—

—

(65,339)

(61,141)

5,123,506

3,135,788

Short-term borrowings

165

165

4,638

27,615

—

—

4,803

27,780

Advances from PPPLF

91,671

271,933

—

—

—

—

91,671

271,933

Retail notes, certificates and secured borrowings at fair value

—

—

87,144

229,719

—

—

87,144

229,719

Payable on Structured Program borrowings

—

—

11,185

65,451

—

—

11,185

65,451

Other long-term debt

—

—

15,300

15,455

—

—

15,300

15,455

Other liabilities

205,814

218,775

132,121

150,727

(17,880)

(65,551)

320,055

303,951

Total liabilities

5,486,495

3,687,802

250,388

488,967

(83,219)

(126,692)

5,653,664

4,050,077

Total equity

812,653

634,249

980,331

827,590

(671,574)

(611,597)

1,121,410

850,242

Total liabilities and equity

$     6,299,148

$     4,322,051

$     1,230,719

$     1,316,557

$      (754,793)

$      (738,289)

$     6,775,074

$     4,900,319

 

LENDINGCLUB CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF INCOME BY SEGMENT(In thousands)(Unaudited)

Three Months Ended September 30, 2022

LendingClub

Bank

LendingClub

Corporation

(Parent only)

Intercompany

Eliminations

Total

Non-interest income:

Marketplace revenue

$           153,504

$              9,015

$             11,318

$           173,837

Other non-interest income

25,240

4,794

(22,634)

7,400

Total non-interest income

178,744

13,809

(11,316)

181,237

Interest income:

Interest income

137,142

6,078

—

143,220

Interest expense

(15,277)

(4,267)

—

(19,544)

Net interest income

121,865

1,811

—

123,676

Total net revenue

300,609

15,620

(11,316)

304,913

Provision for credit losses

(82,739)

—

—

(82,739)

Non-interest expense

(177,714)

(19,821)

11,316

(186,219)

Income (Loss) before income tax benefit (expense)

40,156

(4,201)

—

35,955

Income tax benefit (expense)

(9,440)

16,683

—

7,243

Net income

$             30,716

$             12,482

$                   —

$             43,198

Three Months Ended June 30, 2022

LendingClub

Bank

LendingClub

Corporation

(Parent only)

Intercompany

Eliminations

Total

Non-interest income:

Marketplace revenue

$           191,087

$             11,167

$              4,130

$           206,384

Other non-interest income

20,041

3,914

(16,507)

7,448

Total non-interest income

211,128

15,081

(12,377)

213,832

Interest income:

Interest income

120,152

8,316

—

128,468

Interest expense

(6,213)

(6,029)

—

(12,242)

Net interest income

113,939

2,287

—

116,226

Total net revenue

325,067

17,368

(12,377)

330,058

Provision for credit losses

(70,566)

—

—

(70,566)

Non-interest expense

(196,636)

(25,127)

12,377

(209,386)

Income (Loss) before income tax benefit (expense)

57,865

(7,759)

—

50,106

Income tax benefit (expense)

(17,318)

85,864

63,408

131,954

Net income

$             40,547

$             78,105

$             63,408

$           182,060

Three Months Ended September 30, 2021

LendingClub

Bank

LendingClub

Corporation

(Parent only)

Intercompany

Eliminations

Total

Non-interest income:

Marketplace revenue

$           151,109

$             23,447

$                   —

$           174,556

Other non-interest income

25,393

4,140

(23,211)

6,322

Total non-interest income

176,502

27,587

(23,211)

180,878

Interest income:

Interest income

64,606

18,254

—

82,860

Interest expense

(2,270)

(15,302)

—

(17,572)

Net interest income

62,336

2,952

—

65,288

Total net revenue

238,838

30,539

(23,211)

246,166

(Provision for) reversal of credit losses

(38,019)

495

—

(37,524)

Non-interest expense

(161,101)

(40,885)

23,211

(178,775)

Income (Loss) before income tax benefit (expense)

39,718

(9,851)

—

29,867

Income tax benefit (expense)

(4,670)

12,607

(10,619)

(2,682)

Net income

$             35,048

$              2,756

$            (10,619)

$             27,185

 

LENDINGCLUB CORPORATIONNET INTEREST INCOME(In thousands, except percentages or as noted)(Unaudited)

Consolidated LendingClub Corporation (1)

Three Months Ended

September 30, 2022

Three Months Ended

June 30, 2022

Three Months Ended

September 30, 2021

AverageBalance

Interest Income/Expense

Average Yield/Rate

AverageBalance

Interest Income/Expense

Average Yield/Rate

AverageBalance

Interest Income/Expense

Average Yield/Rate

Interest-earning assets (2)

Cash, cash equivalents, restricted cash and other

$    893,655

$    5,017

2.25 %

$ 1,023,192

$     2,279

0.89 %

$    778,667

$       355

0.18 %

Securities available for sale at fair value

396,556

3,820

3.85 %

409,327

4,426

4.32 %

266,686

3,180

4.77 %

Loans held for sale

126,487

5,879

18.59 %

156,503

7,130

18.22 %

226,422

8,536

15.08 %

Loans and leases held for investment:

Unsecured personal loans

3,268,649

110,446

13.52 %

2,692,148

95,529

14.19 %

991,297

39,532

15.95 %

Secured consumer loans

337,191

3,039

3.60 %

268,091

2,351

3.51 %

464,194

4,688

4.04 %

Commercial loans and leases

692,783

9,262

5.35 %

644,002

8,732

5.42 %

616,823

7,887

5.11 %

PPP loans

105,500

1,281

4.86 %

149,454

2,299

6.15 %

436,785

5,537

5.07 %

Loans and leases held for investment

4,404,123

124,028

11.26 %

3,753,695

108,911

11.61 %

2,509,099

57,644

9.19 %

Retail and certificate loans held for investment at fair value

104,010

3,685

14.17 %

144,613

5,091

14.08 %

344,205

12,172

14.15 %

Other loans held for investment at fair value

17,763

791

17.83 %

16,991

631

14.85 %

30,981

973

12.58 %

Total interest-earning assets

5,942,594

143,220

9.64 %

5,504,321

128,468

9.34 %

4,156,060

82,860

7.97 %

Cash and due from banks and restricted cash

58,411

75,517

96,733

Allowance for loan and lease losses

(254,849)

(202,904)

(86,686)

Other non-interest earning assets

597,169

490,412

449,964

Total assets

$ 6,343,325

$ 5,867,346

$ 4,616,071

Interest-bearing liabilities

Interest-bearing deposits:

Checking and money market accounts

$ 2,192,904

$    4,575

0.83 %

$ 2,463,710

$     2,664

0.43 %

$ 2,221,365

$    1,707

0.30 %

Savings accounts and certificates of deposit

2,260,170

10,609

1.86 %

1,555,607

3,414

0.88 %

307,807

192

0.25 %

Interest-bearing deposits

4,453,074

15,184

1.35 %

4,019,317

6,078

0.61 %

2,529,172

1,899

0.30 %

Short-term borrowings

6,848

87

5.09 %

10,874

417

15.35 %

57,224

849

5.93 %

Advances from PPPLF

104,897

93

0.36 %

151,278

135

0.36 %

416,748

371

0.36 %

Retail notes, certificates and secured borrowings

104,010

3,685

14.17 %

144,613

5,091

14.08 %

344,087

12,172

14.15 %

Structured Program borrowings

13,859

225

6.50 %

18,439

360

7.81 %

100,178

2,120

8.46 %

Other long-term debt

15,300

270

7.04 %

15,357

161

4.20 %

15,606

161

4.13 %

Total interest-bearing liabilities

4,697,988

19,544

1.65 %

4,359,878

12,242

1.12 %

3,463,015

17,572

2.03 %

Non-interest bearing deposits

284,134

292,750

81,491

Other liabilities

250,086

261,796

285,292

Total liabilities

$ 5,232,208

$ 4,914,424

$ 3,829,798

Total equity

$ 1,111,117

$    952,922

$    786,273

Total liabilities and equity

$ 6,343,325

$ 5,867,346

$ 4,616,071

Interest rate spread

7.99 %

8.21 %

5.95 %

Net interest income and net interest margin

$  123,676

8.32 %

$ 116,226

8.45 %

$  65,288

6.28 %

(1)

Consolidated presentation reflects intercompany eliminations.

(2)

Nonaccrual loans and any related income are included in their respective loan categories.

 

LENDINGCLUB CORPORATIONCONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts)(Unaudited)

September 30,2022

December 31, 2021

Assets

Cash and due from banks

$            23,211

$         35,670

Interest-bearing deposits in banks

929,630

651,456

Total cash and cash equivalents

952,841

687,126

Restricted cash

66,285

76,460

Securities available for sale at fair value ($415,726 and $256,170 at amortized cost, respectively)

359,157

263,530

Loans held for sale (includes $90,058 and $142,370 at fair value, respectively)

90,058

391,248

Loans and leases held for investment

4,806,927

2,899,126

Allowance for loan and lease losses

(303,201)

(144,389)

Loans and leases held for investment, net

4,503,726

2,754,737

Retail and certificate loans held for investment at fair value

87,144

229,719

Other loans held for investment at fair value

15,057

21,240

Property, equipment and software, net

129,957

97,996

Goodwill

75,717

75,717

Other assets

495,132

302,546

Total assets

$        6,775,074

$     4,900,319

Liabilities and Equity

Deposits:

Interest-bearing

$        4,868,132

$     2,919,203

Noninterest-bearing

255,374

216,585

Total deposits

5,123,506

3,135,788

Short-term borrowings

4,803

27,780

Advances from Paycheck Protection Program Liquidity Facility (PPPLF)

91,671

271,933

Retail notes, certificates and secured borrowings at fair value

87,144

229,719

Payable on Structured Program borrowings

11,185

65,451

Other long-term debt

15,300

15,455

Other liabilities

320,055

303,951

Total liabilities

5,653,664

4,050,077

Equity

Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 0 shares issued and outstanding

—

—

Common stock, $0.01 par value; 180,000,000 shares authorized; 105,088,761 and 101,043,924 shares issued and outstanding, respectively

1,051

1,010

Additional paid-in capital

1,611,627

1,559,616

Accumulated deficit

(451,336)

(717,430)

Treasury stock, at cost; 7,751 and 0 shares, respectively

(98)

—

Accumulated other comprehensive income (loss)

(39,834)

7,046

Total equity

1,121,410

850,242

Total liabilities and equity

$        6,775,074

$     4,900,319

 

LENDINGCLUB CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands, except share and per share data)(Unaudited)

As of and for the three months ended

September 30,2022

June 30,2022

March 31,

2022

December 31,

2021

September 30,2021

GAAP Net income

$            43,198

$     182,060

$       40,836

$            29,108

$            27,185

Income tax benefit from release of tax valuation allowance

5,015

135,300

—

—

—

Net income excluding income tax benefit

$            38,183

$       46,760

$       40,836

$            29,108

$            27,185

GAAP Diluted EPS – common stockholders

$                 0.41

$            1.73

$            0.39

$                 0.27

$                 0.26

(A)

Income tax benefit from release of tax valuation allowance

$              5,015

$     135,300

(B)

Weighted-average common shares – Diluted

105,853,938

105,042,626

(A/B)

Diluted EPS impact of income tax benefit

$                 0.05

$            1.29

Diluted EPS excluding income tax benefit

$                 0.36

$            0.44

$            0.39

$                 0.27

$                 0.26

September 30,2022

June 30,2022

March 31,

2022

December 31,

2021

September 30,2021

GAAP common equity

$       1,121,410

$  1,079,117

$     887,434

$          850,242

$          804,790

Less: Goodwill

(75,717)

(75,717)

(75,717)

(75,717)

(75,717)

Less: Intangible assets

(17,512)

(18,690)

(19,886)

(21,181)

(22,521)

 

Tangible common equity

$       1,028,181

$     984,710

$     791,831

$          753,344

$          706,552

 

Book value per common share

 

GAAP common equity

$       1,121,410

$  1,079,117

$     887,434

$          850,242

$          804,790

Common shares issued and outstanding

105,088,761

103,630,776

102,194,037

101,043,924

99,782,192

 

Book value per common share

$              10.67

$          10.41

$            8.68

$                 8.41

$                 8.07

 

Tangible book value per common share

Tangible common equity

$       1,028,181

$     984,710

$     791,831

$          753,344

$          706,552

Common shares issued and outstanding

105,088,761

103,630,776

102,194,037

101,043,924

99,782,192

 

Tangible book value per common share

$                 9.78

$            9.50

$            7.75

$                 7.46

$                 7.08

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/lendingclub-reports-third-quarter-2022-results-301660372.html

SOURCE LendingClub Corporation


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