LendingClub Reports Fourth Quarter and Full Year 2022 Results

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PR Newswire

Delivers Record Full Year Revenue and Earnings Growth Despite Challenging Environment

SAN FRANCISCO, Jan. 25, 2023 /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, 2022.

"Our fourth quarter results clearly demonstrated the benefits of our evolution into a marketplace bank. We significantly grew recurring revenue to offset the expected reduction in marketplace volumes," said Scott Sanborn, LendingClub CEO. "Looking ahead, in anticipation of a more challenging environment, we have streamlined our operations and will maintain our underwriting discipline. We also intend to remain profitable, while investing in-period earnings into loan retention to support future earnings. These actions will allow us to capitalize on growth opportunities as economic pressures abate."

Full Year 2022 Results Reflect Ongoing Transformation and Positioning for Long-Term Sustained Success

  • Total assets increased 63% year over year to $8.0 billion, primarily reflecting growth in loans held for investment, including the acquisition of a $1.05 billion outstanding principal loan portfolio in the fourth quarter of 2022.
  • Deposits of $6.4 billion more than doubled, primarily due to growth in online savings deposits.
  • Total net revenue of $1.2 billion up 45% year over year
    • Net interest income, a recurring stream of earnings, increased over 100% to $474.8 million.
    • Marketplace revenue grew 18% year over year to $683.6 million.
  • Pre-tax income of $153.0 million compared to $18.4 million in the prior year, reflecting solid revenue growth combined with improved operating efficiency.
  • Implemented significant cost reduction plan to more closely align the company's expense base with anticipated loan volume in 2023.

Fourth Quarter 2022 Results

  • Total net revenue of $262.7 million was comparable to the prior-year period, as strong growth in net interest income offset lower marketplace revenue.
    • Net interest income increased 63% year over year to $135.2 million.
      • Total loans and leases held for investment grew 104%, primarily reflecting growth in personal loan originations held for investment and the acquisition of a $1.05 billion loan portfolio in the fourth quarter of 2022.
      • Net interest margin expanded to 7.8% from 7.6% in the prior-year period, primarily reflecting a greater mix of personal loans which generate a higher yield than the other loans held for investment.
    • Marketplace revenue was $123.4 million compared to $170.6 million year over year, reflecting a reduction in volumes consistent with the change in total origination volume due to the pace of Federal Reserve interest rate increases and tighter underwriting standards implemented by the company.
  • Loan originations were $2.5 billion, compared to $3.1 billion in the prior-year period.
  • Credit quality of the held-for-investment prime loan portfolio remained strong, with delinquency rates continuing to normalize as the portfolio seasons.
  • Provision for credit losses of $61.5 million primarily reflects $700.8 million of quarterly loan originations held for investment and ongoing recognition of provision expense for discounted lifetime losses at origination.
  • Efficiency ratio improved to 69% from 72% in the prior-year period due to better marketing efficiency.
  • Pre-provision net revenue of $82.7 million grew 12% year over year, driven by improved operating efficiency.
  • Net income of $23.6 million compared to $29.1 million year over year, reflecting higher credit provisioning due to growth in the held-for-investment portfolio, partially offset by favorable marketing efficiency.
  • Total equity of $1.2 billion grew $314.1 million from December 31, 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 $10.93 increased 30% from December 31, 2021. Tangible book value per common share of $10.06 increased 35% from December 31, 2021. The increases in book value and tangible book value per share were consistent with the growth in total equity.
  • Substantial capital with a consolidated Tier 1 leverage ratio of 14.1% and consolidated Common Equity Tier 1 capital ratio of 15.8%.


Three Months Ended


Year Ended


($ in millions, except per share amounts)

December 31,
2022


September 30,
2022


December 31,
2021


December 31,
2022


December 31,
2021


Total net revenue

$ 262.7


$ 304.9


$ 262.2


$ 1,187.2


$ 818.6


Non-interest expense

180.0


186.2


188.2


766.9


661.4


Pre-provision net revenue (1)

82.7


118.7


74.0


420.3


157.2













Provision for credit losses

61.5


82.7


45.1


267.3


138.8


Income before income tax benefit

21.2


36.0


28.9


153.0


18.4


Income tax benefit

2.4


7.2


0.2


136.6


0.1


Net income

$ 23.6


$ 43.2


$ 29.1


$ 289.7


$ 18.6


Diluted EPS

$ 0.22


$ 0.41


$ 0.27


$ 2.79


$ 0.18













Income tax benefit from release of tax valuation allowance

$ 3.2


$ 5.0


$ —


$ 143.5


$ —


Net income excluding income tax benefit (1,2)

$ 20.4


$ 38.2


$ 29.1


$ 146.2


$ 18.6


Diluted EPS excluding income tax benefit (1,2)

$ 0.19


$ 0.36


$ 0.27


$ 1.41


$ 0.18




(1)

See page 3 of this release for additional information on our use of non-GAAP financial measures.

(2)

Fourth and third quarters of 2022 and the year ended December 31, 2022, include income tax benefit of $3.2 million, $5.0 million, and $143.5 million, respectively, due to the release of a deferred tax asset valuation allowance.

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

Given the rapid change in the economic environment, the company is currently providing guidance for the first quarter of 2023 and expects loan originations and pre-provision net revenue to be in the ranges below. The outlook for loan originations reflects the impact of rising rates on marketplace demand combined with continued prudent underwriting. The company plans to maintain held-for-investment loan balances in line with the fourth quarter of 2022. For 2023, the company intends to remain profitable, while investing in-period earnings into loan retention to support future earnings.



First Quarter 2023

Loan Originations


$1.9B to $2.2B

Pre-Provision Net Revenue


$55M to $70M

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 4.5 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 fourth 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, January 25, 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 (844) 200-6205, or outside the U.S. +1 (929) 526-1599, with Access Code 786729, 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 February 1, 2023, by calling +1 (866) 813-9403 or outside the U.S. +44 (204) 525-0658, with Access Code 636433. 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.

Contacts
For Investors:
IR@lendingclub.com

Media Contact:
Press@lendingclub.com

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: Pre-Provision Net Revenue, 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 Pre-Provision Net Revenue, 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. Pre-Provision Net Revenue is a non-GAAP financial measure calculated by subtracting the provision for credit losses and income tax benefit/expense from net income. Net Income Excluding Income Tax Benefit adjusts for the release of a deferred tax asset valuation allowance in the fourth, 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 beginning on page 14 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; our ability to realize the expected benefits from recent initiatives, including our cost reduction plan and the acquisition of a $1 billion loan portfolio; competition; overall economic conditions; the interest rate environment; 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 and Quarterly Report on Form 10-Q, each 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 CORPORATION

OPERATING HIGHLIGHTS

(In thousands, except percentages or as noted)

(Unaudited)



As of and for the three months ended


% Change



December 31,
2022


September 30,
2022


June 30,

2022


March 31,

2022


December 31,
2021


Q/Q


Y/Y


Operating Highlights:


Non-interest income

$ 127,465


$ 181,237


$ 213,832


$ 189,857


$ 179,111


(30) %


(29) %


Net interest income

135,243


123,676


116,226


99,680


83,132


9 %


63 %


Total net revenue

262,708


304,913


330,058


289,537


262,243


(14) %


— %


Non-interest expense

180,044


186,219


209,386


191,204


188,220


(3) %


(4) %


Pre-provision net revenue(1)

82,664


118,694


120,672


98,333


74,023


(30) %


12 %


Provision for credit losses

61,512


82,739


70,566


52,509


45,149


(26) %


36 %


Income before income tax benefit (expense)

21,152


35,955


50,106


45,824


28,874


(41) %


(27) %


Income tax benefit (expense)

2,439


7,243


131,954


(4,988)


234


N/M


NM


Net income

23,591


43,198


182,060


40,836


29,108


N/M


N/M


Income tax benefit from release of tax valuation allowance

3,180


5,015


135,300




N/M


N/M


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

$ 20,411


$ 38,183


$ 46,760


$ 40,836


$ 29,108


(47) %


(30) %

















Basic EPS – common stockholders

$ 0.22


$ 0.41


$ 1.77


$ 0.40


$ 0.29


(46) %


(24) %


Diluted EPS – common stockholders

$ 0.22


$ 0.41


$ 1.73


$ 0.39


$ 0.27


(46) %


(19) %


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

$ 0.19


$ 0.36


$ 0.45


$ 0.39


$ 0.27


(47) %


(30) %

















LendingClub Corporation Performance Metrics:


Net interest margin

7.8 %


8.3 %


8.5 %


8.3 %


7.6 %






Efficiency ratio(3)

68.5 %


61.1 %


63.4 %


66.0 %


71.8 %






Return on average equity (ROE)

7.2 %


14.2 %


33.8 %


18.7 %


14.1 %






Return on average total assets (ROA)

1.1 %


2.5 %


5.5 %


3.1 %


2.4 %






Marketing expense as a % of loan originations

1.4 %


1.3 %


1.6 %


1.7 %


1.7 %





















LendingClub Corporation Capital Metrics:


Common Equity Tier 1 Capital Ratio

15.8 %


18.3 %


20.0 %


20.6 %


21.3 %






Tier 1 Leverage Ratio

14.1 %


15.7 %


16.2 %


15.6 %


16.5 %






Book Value per Common Share

$ 10.93


$ 10.67


$ 10.41


$ 8.68


$ 8.41


2 %


30 %


Tangible Book Value per Common Share(1)

$ 10.06


$ 9.78


$ 9.50


$ 7.75


$ 7.46


3 %


35 %

















Loan Originations (in millions)(4):















Total loan originations

$ 2,524


$ 3,539


$ 3,840


$ 3,217


$ 3,069


(29) %


(18) %


Marketplace loans

$ 1,824


$ 2,386


$ 2,819


$ 2,360


$ 2,308


(24) %


(21) %


Loan originations held for investment

$ 701


$ 1,153


$ 1,021


$ 856


$ 761


(39) %


(8) %


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

28 %


33 %


27 %


27 %


25 %





















Servicing Portfolio AUM (in millions)(5):


Total servicing portfolio

$ 16,157


$ 15,929


$ 14,783


$ 13,341


$ 12,463


1 %


30 %


Loans serviced for others

$ 10,819


$ 11,807


$ 11,382


$ 10,475


$ 10,124


(8) %


7 %

















Balance Sheet Data:


Loans and leases held for investment at amortized cost, net, excluding PPP loans

$ 4,638,331


$ 4,414,347


$ 3,692,667


$ 3,049,325


$ 2,486,440


5 %


87 %


PPP loans

$ 66,971


$ 89,379


$ 118,794


$ 184,986


$ 268,297


(25) %


(75) %


Total loans and leases held for investment at amortized cost, net(6)

$ 4,705,302


$ 4,503,726


$ 3,811,461


$ 3,234,311


$ 2,754,737


4 %


71 %


Loans held for investment at fair value

$ 925,938


$ 15,057


$ 20,583


$ 15,384


$ 21


N/M


N/M


Total loans and leases held for investment

$ 5,631,240


$ 4,518,783


$ 3,832,044


$ 3,249,695


$ 2,754,758


25 %


104 %


Total assets

$ 7,979,747


$ 6,775,074


$ 6,186,765


$ 5,574,425


$ 4,900,319


18 %


63 %


Total deposits

$ 6,392,553


$ 5,123,506


$ 4,527,672


$ 3,977,477


$ 3,135,788


25 %


104 %


Total liabilities

$ 6,815,453


$ 5,653,664


$ 5,107,648


$ 4,686,991


$ 4,050,077


21 %


68 %


Total equity

$ 1,164,294


$ 1,121,410


$ 1,079,117


$ 887,434


$ 850,242


4 %


37 %



N/M – Not meaningful

(1)

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

(2)

Excludes fourth, third and second quarter 2022 income tax benefit of $3.2 million, $5.0 million and $135.3 million, respectively, due to the release of a deferred tax asset valuation allowance.

(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.

(6)

Excludes loans held for investment at fair value, which primarily consists of a loan portfolio that was acquired in the fourth quarter of 2022.

The asset quality metrics presented in the following table are for loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:


As of and for the three months ended



December 31,
2022


September 30,
2022


June 30,

2022


March 31,

2022


December 31,
2021


Asset Quality Metrics:


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

6.5 %


6.3 %


6.0 %


5.5 %


5.0 %


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

6.6 %


6.4 %


6.2 %


5.8 %


5.5 %


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

7.3 %


7.2 %


6.9 %


6.6 %


6.4 %


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

2.0 %


1.9 %


2.0 %


1.8 %


1.8 %


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

2.2 %


2.2 %


2.3 %


2.6 %


2.6 %


Net charge-offs

$ 37,148


$ 22,658


$ 13,987


$ 8,673


$ 5,636


Net charge-off ratio(1)

3.0 %


2.1 %


1.6 %


1.2 %


0.9 %




(1)

Net charge-off ratio is calculated as annualized net charge-offs divided by average outstanding loans and leases held for investment during the period, excluding PPP loans.

LENDINGCLUB CORPORATION

LOANS AND LEASES HELD FOR INVESTMENT

(In thousands)

(Unaudited)


The following table presents loans and leases held for investment at amortized cost and loans held for investment at fair value:





December 31,
2022


September 30,
2022


December 31,
2021


Unsecured personal

$ 3,866,373


$ 3,642,254


$ 1,804,578


Residential mortgages

199,601


197,776


151,362


Secured consumer

194,634


180,768


65,976


Total consumer loans held for investment

4,260,608


4,020,798


2,021,916


Equipment finance (1)

160,319


167,447


149,155


Commercial real estate

373,501


372,406


310,399


Commercial and industrial (2)

238,726


246,276


417,656


Total commercial loans and leases held for investment

772,546


786,129


877,210


Total loans and leases held for investment at amortized cost

5,033,154


4,806,927


2,899,126


Allowance for loan and lease losses

(327,852)


(303,201)


(144,389)


Loans and leases held for investment at amortized cost, net

$ 4,705,302


$ 4,503,726


$ 2,754,737


Loans held for investment at fair value

$ 925,938


$ 15,057


$ 21


Total loans and leases held for investment

$ 5,631,240


$ 4,518,783


$ 2,754,758


(1)

Comprised of sales-type leases for equipment.

(2)

Includes $67.0 million, $89.4 million, and $268.3 million of Paycheck Protection Program (PPP) loans as of December 31, 2022, 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 CORPORATION

ALLOWANCE FOR LOAN AND LEASE LOSSES

(In thousands)

(Unaudited)


The following tables present the allowance for loan and lease losses on loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:







Three Months Ended



December 31, 2022


September 30, 2022



Consumer


Commercial


Total


Consumer


Commercial


Total


Allowance for loan and lease losses, beginning of period

$ 288,138


$ 15,063


$ 303,201


$ 228,184


$ 15,076


$ 243,260


Credit loss expense for loans and leases held for investment

61,392


407


61,799


81,935


664


82,599


Charge-offs

(38,579)


(225)


(38,804)


(22,944)


(784)


(23,728)


Recoveries

1,538


118


1,656


963


107


1,070


Allowance for loan and lease losses, end of period

$ 312,489


$ 15,363


$ 327,852


$ 288,138


$ 15,063


$ 303,201



Three Months Ended



December 31, 2021



Consumer


Commercial


Total


Allowance for loan and lease losses, beginning of period

$ 88,631


$ 16,105


$ 104,736


Credit loss expense for loans and leases held for investment

45,595


(306)


45,289


Charge-offs

(5,557)


(313)


(5,870)


Recoveries

143


91


234


Allowance for loan and lease losses, end of period

$ 128,812


$ 15,577


$ 144,389


LENDINGCLUB CORPORATION

PAST DUE LOANS AND LEASES HELD FOR INVESTMENT

(In thousands)

(Unaudited)


The following tables present past due loans and leases held for investment at amortized cost and do not reflect loans held for investment at fair value:






December 31, 2022

30-59
Days


60-89
Days


90 or More
Days


Total Days
Past Due


Unsecured personal

$ 21,016


$ 16,418


$ 16,255


$ 53,689


Residential mortgages


254


331


585


Secured consumer

1,720


382


188


2,290


Total consumer loans held for investment

$ 22,736


$ 17,054


$ 16,774


$ 56,564











Equipment finance

$ 3,172


$ —


$ 859


$ 4,031


Commercial real estate


102



102


Commercial and industrial (1)



1,643


1,643


Total commercial loans and leases held for investment (1)

$ 3,172


$ 102


$ 2,502


$ 5,776


Total loans and leases held for investment at amortized cost (1)

$ 25,908


$ 17,156


$ 19,276


$ 62,340











September 30, 2022

30-59
Days


60-89
Days


90 or More
Days


Total Days
Past Due


Unsecured personal

$ 14,799


$ 12,463


$ 10,601


$ 37,863


Residential mortgages



337


337


Secured consumer

985


504


162


1,651


Total consumer loans held for investment

$ 15,784


$ 12,967


$ 11,100


$ 39,851











Equipment finance

$ —


$ —


$ —


$ —


Commercial real estate


101


452


553


Commercial and industrial (1)



1,650


1,650


Total commercial loans and leases held for investment (1)

$ —


$ 101


$ 2,102


$ 2,203


Total loans and leases held for investment at amortized cost (1)

$ 15,784


$ 13,068


$ 13,202


$ 42,054











December 31, 2021

30-59
Days


60-89
Days


90 or More
Days


Total Days
Past Due


Unsecured personal

$ 3,624


$ 2,600


$ 1,676


$ 7,900


Residential mortgages

142


92


1,069


1,303


Secured consumer

171


53


3,011


3,235


Total consumer loans held for investment

$ 3,937


$ 2,745


$ 5,756


$ 12,438











Equipment finance

$ —


$ —


$ —


$ —


Commercial real estate

104



609


713


Commercial and industrial (1)



1,410


1,410


Total commercial loans and leases held for investment (1)

$ 104


$ —


$ 2,019


$ 2,123


Total loans and leases held for investment at amortized cost (1)

$ 4,041


$ 2,745


$ 7,775


$ 14,561




(1)

Past due PPP loans are excluded from the tables.

LENDINGCLUB CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share data)

(Unaudited)





Three Months Ended


Change (%)



December 31,
2022


September 30,
2022


December 31,
2021


Q4 2022

vs

Q4 2021


Q4 2022

vs

Q3 2022


Non-interest income:











Origination fees

$ 100,692


$ 127,142


$ 118,353


(15) %


(21) %


Servicing fees

20,169


23,760


20,940


(4) %


(15) %


Gain on sales of loans

18,352


23,554


20,569


(11) %


(22) %


Net fair value adjustments

(15,774)


(619)


10,700


(247) %


N/M


Marketplace revenue

123,439


173,837


170,562


(28) %


(29) %


Other non-interest income

4,026


7,400


8,549


(53) %


(46) %


Total non-interest income

127,465


181,237


179,111


(29) %


(30) %













Total interest income

173,999


143,220


97,655


78 %


21 %


Total interest expense

38,756


19,544


14,523


167 %


98 %


Net interest income

135,243


123,676


83,132


63 %


9 %













Total net revenue

262,708


304,913


262,243


— %


(14) %













Provision for credit losses

61,512


82,739


45,149


36 %


(26) %













Non-interest expense:











Compensation and benefits

87,768


84,916


78,741


11 %


3 %


Marketing

35,139


46,031


50,708


(31) %


(24) %


Equipment and software

13,200


12,491


12,019


10 %


6 %


Occupancy

4,698


5,051


4,706


— %


(7) %


Depreciation and amortization

11,554


10,681


10,462


10 %


8 %


Professional services

10,029


11,943


12,699


(21) %


(16) %


Other non-interest expense

17,656


15,106


18,885


(7) %


17 %


Total non-interest expense

180,044


186,219


188,220


(4) %


(3) %













Income before income tax benefit

21,152


35,955


28,874


(27) %


(41) %


Income tax benefit

2,439


7,243


234


N/M


N/M


Net income

$ 23,591


$ 43,198


$ 29,108


(19) %


(45) %













Net income per share:











Net income per share attributable to common stockholders – Basic

$ 0.22


$ 0.41


$ 0.29


(24) %


(46) %


Net income per share attributable to common stockholders – Diluted

$ 0.22


$ 0.41


$ 0.27


(19) %


(46) %


Weighted-average common shares – Basic

105,650,177


104,215,594


100,320,691


5 %


1 %


Weighted-average common shares – Diluted

105,984,612


105,853,938


108,096,823


(2) %


— %



N/M – Not meaningful

LENDINGCLUB CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share data)

(Unaudited)





Year Ended December 31,





2022


2021


Change (%)


Non-interest income:







Origination fees

$ 499,179


$ 416,839


20 %


Servicing fees

80,609


87,639


(8) %


Gain on sales of loans

95,335


70,116


36 %


Net fair value adjustments

8,503


3,986


113 %


Marketplace revenue

683,626


578,580


18 %


Other non-interest income

28,765


27,219


6 %


Total non-interest income

712,391


605,799


18 %









Total interest income

557,340


292,832


90 %


Total interest expense

82,515


80,001


3 %


Net interest income

474,825


212,831


123 %









Total net revenue

1,187,216


818,630


45 %









Provision for credit losses

267,326


138,800


93 %









Non-interest expense:







Compensation and benefits

339,397


288,390


18 %


Marketing

197,747


156,142


27 %


Equipment and software

49,198


39,490


25 %


Occupancy

21,977


24,249


(9) %


Depreciation and amortization

43,831


44,285


(1) %


Professional services

50,516


47,572


6 %


Other non-interest expense

64,187


61,258


5 %


Total non-interest expense

766,853


661,386


16 %









Income before income tax benefit

153,037


18,444


730 %


Income tax benefit

136,648


136


N/M


Net income

$ 289,685


$ 18,580


N/M









Net income per share:







Net income per share attributable to common stockholders – Basic

$ 2.80


$ 0.19


N/M


Net income per share attributable to common stockholders – Diluted

$ 2.79


$ 0.18


N/M


Weighted-average common shares – Basic

103,547,305


97,486,754


6 %


Weighted-average common shares – Diluted

104,001,288


102,147,353


2 %



N/M – Not meaningful

LENDINGCLUB CORPORATION

NET INTEREST INCOME

(In thousands, except percentages or as noted)

(Unaudited)





Consolidated LendingClub Corporation (1)



Three Months Ended

December 31, 2022


Three Months Ended

September 30, 2022


Three Months Ended

December 31, 2021



Average
Balance


Interest Income/
Expense


Average Yield/
Rate


Average
Balance


Interest Income/
Expense


Average Yield/
Rate


Average
Balance


Interest Income/
Expense


Average Yield/
Rate


Interest-earning assets (2)



















Cash, cash equivalents, restricted cash and other

$ 1,139,887


$ 10,595


3.72 %


$ 893,655


$ 5,017


2.25 %


$ 710,472


$ 469


0.26 %


Securities available for sale at fair value

349,512


3,359


3.84 %


396,556


3,820


3.85 %


265,140


3,071


4.63 %


Loans held for sale

114,851


5,724


19.93 %


126,487


5,879


18.59 %


184,708


7,153


15.49 %


Loans and leases held for investment:



















Unsecured personal loans

3,825,808


125,872


13.16 %


3,268,649


110,446


13.52 %


1,542,285


60,384


15.66 %


Commercial and other consumer loans

1,164,326


15,197


5.22 %


1,135,474


13,582


4.78 %


1,381,041


16,580


4.80 %


Loans and leases held for investment at amortized cost

4,990,134


141,069


11.31 %


4,404,123


124,028


11.26 %


2,923,326


76,964


10.53 %


Loans held for investment at fair value (3)

308,570


10,862


14.08 %


17,763


791


17.83 %


24,184


762


12.60 %


Total loans and leases held for investment

5,298,704


151,931


11.47 %


4,421,886


124,819


11.29 %


2,947,510


77,726


10.55 %


Retail and certificate loans held for investment at fair value

66,469


2,390


14.38 %


104,010


3,685


14.17 %


262,548


9,236


14.07 %


Total interest-earning assets

6,969,423


173,999


9.99 %


5,942,594


143,220


9.64 %


4,370,378


97,655


8.94 %





















Cash and due from banks and restricted cash

64,907






58,411






73,258






Allowance for loan and lease losses

(314,861)






(254,849)






(125,120)






Other non-interest earning assets

613,664






597,169






465,010






Total assets

$ 7,333,133






$ 6,343,325






$ 4,783,526

























Interest-bearing liabilities



















Interest-bearing deposits:



















Checking and money market accounts

$ 1,929,260


$ 7,500


1.54 %


$ 2,192,904


$ 4,575


0.83 %


$ 2,146,687


$ 1,716


0.32 %


Savings accounts and certificates of deposit

3,576,205


28,251


3.13 %


2,260,170


10,609


1.86 %


580,361


900


0.62 %


Interest-bearing deposits

5,505,465


35,751


2.58 %


4,453,074


15,184


1.35 %


2,727,048


2,616


0.38 %


Short-term borrowings

3,875


63


6.52 %


6,848


87


5.09 %


36,823


561


6.08 %


Advances from PPPLF

77,199


69


0.36 %


104,897


93


0.36 %


342,335


307


0.36 %


Retail notes, certificates and secured borrowings

66,469


2,390


14.38 %


104,010


3,685


14.17 %


262,548


9,236


14.07 %


Structured Program borrowings

9,956


159


6.39 %


13,859


225


6.50 %


77,354


1,642


8.49 %


Other long-term debt

14,804


324


8.76 %


15,300


270


7.04 %


15,514


161


4.15 %


Total interest-bearing liabilities

5,677,768


38,756


2.71 %


4,697,988


19,544


1.65 %


3,461,622


14,523


1.68 %





















Non-interest bearing deposits

251,686






284,134






211,692






Other liabilities

266,558






250,086






282,339






Total liabilities

$ 6,196,012






$ 5,232,208






$ 3,955,653

























Total equity

$ 1,137,121






$ 1,111,117






$ 827,873






Total liabilities and equity

$ 7,333,133






$ 6,343,325






$ 4,783,526

























Interest rate spread





7.28 %






7.99 %






7.26 %





















Net interest income and net interest margin



$ 135,243


7.76 %




$ 123,676


8.32 %




$ 83,132


7.61 %




(1)

Consolidated presentation reflects intercompany eliminations.

(2)

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

(3)

Fourth quarter 2022 average balance includes the acquisition of a $1.05 billion outstanding principal loan portfolio in December 2022.

LENDINGCLUB CORPORATION

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)





December 31,
2022


December 31,
2021


Assets





Cash and due from banks

$ 23,125


$ 35,670


Interest-bearing deposits in banks

1,033,905


651,456


Total cash and cash equivalents

1,057,030


687,126


Restricted cash

67,454


76,460


Securities available for sale at fair value ($399,668 and $256,170 at amortized cost, respectively)

345,702


263,530


Loans held for sale (includes $110,400 and $142,370 at fair value, respectively)

110,400


391,248


Loans and leases held for investment

5,033,154


2,899,126


Allowance for loan and lease losses

(327,852)


(144,389)


Loans and leases held for investment, net

4,705,302


2,754,737


Loans held for investment at fair value

925,938


21,240


Retail and certificate loans held for investment at fair value

55,425


229,719


Property, equipment and software, net

136,473


97,996


Goodwill

75,717


75,717


Other assets

500,306


302,546


Total assets

$ 7,979,747


$ 4,900,319


Liabilities and Equity





Deposits:





Interest-bearing

$ 6,158,560


$ 2,919,203


Noninterest-bearing

233,993


216,585


Total deposits

6,392,553


3,135,788


Short-term borrowings

2,619


27,780


Advances from Paycheck Protection Program Liquidity Facility (PPPLF)

64,154


271,933


Retail notes, certificates and secured borrowings at fair value

55,425


229,719


Payable on Structured Program borrowings

8,085


65,451


Other long-term debt


15,455


Other liabilities

292,617


303,951


Total liabilities

6,815,453


4,050,077


Equity





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



Common stock, $0.01 par value; 180,000,000 shares authorized; 106,546,995 and 101,043,924 shares issued and outstanding, respectively

1,065


1,010


Additional paid-in capital

1,628,590


1,559,616


Accumulated deficit

(427,745)


(717,430)


Accumulated other comprehensive income (loss)

(37,616)


7,046


Total equity

1,164,294


850,242


Total liabilities and equity

$ 7,979,747


$ 4,900,319


LENDINGCLUB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except share and per share data)

(Unaudited)




Pre-Provision Net Revenue






For the three months ended






For the year ended




December 31,

2022


September 30,
2022


June 30,
2022


March 31,

2022


December 31,
2021


December 31,

2022


December 31,

2021


GAAP Net income

$ 23,591


$ 43,198


$ 182,060


$ 40,836


$ 29,108


$ 289,685


$ 18,580


Less: Provision for credit losses

(61,512)


(82,739)


(70,566)


(52,509)


(45,149)


(267,326)


(138,800)


Less: Income tax benefit (expense)

2,439


7,243


131,954


(4,988)


234


136,648


136


Pre-provision net revenue

$ 82,664


$ 118,694


$ 120,672


$ 98,333


$ 74,023


$ 420,363


$ 157,244














For the three months ended






For the year ended




December 31,

2022


September 30,
2022


June 30,
2022


March 31,

2022


December 31,
2021


December 31,

2022


December 31,

2021


Non-interest income

$ 127,465


$ 181,237


$ 213,832


$ 189,857


$ 179,111


$ 712,391


$ 605,799


Net interest income

135,243


123,676


116,226


99,680


83,132


474,825


212,831


Total net revenue

262,708


304,913


330,058


289,537


262,243


1,187,216


818,630


Non-interest expense

(180,044)


(186,219)


(209,386)


(191,204)


(188,220)


(766,853)


(661,386)


Pre-provision net revenue

82,664


118,694


120,672


98,333


74,023


420,363


157,244


Provision for credit losses

(61,512)


(82,739)


(70,566)


(52,509)


(45,149)


(267,326)


(138,800)


Income before income tax benefit

21,152


35,955


50,106


45,824


28,874


153,037


18,444


Income tax benefit

2,439


7,243


131,954


(4,988)


234


136,648


136


GAAP Net income

$ 23,591


$ 43,198


$ 182,060


$ 40,836


$ 29,108


$ 289,685


$ 18,580


Net Income Excluding Income Tax Benefit and Diluted EPS Excluding Income Tax Benefit






For the three months ended


For the

year ended




December 31,

2022


September 30,
2022


June 30,
2022


December 31,

2022


GAAP Net income

$ 23,591


$ 43,198


$ 182,060


$ 289,685


Less: Income tax benefit from release of tax valuation allowance

3,180


5,015


135,300


143,495


Net income excluding income tax benefit

$ 20,411


$ 38,183


$ 46,760


$ 146,190












GAAP Diluted EPS – common stockholders

$ 0.22


$ 0.41


$ 1.73


$ 2.79












(A)

Income tax benefit from release of tax valuation allowance

$ 3,180


$ 5,015


$ 135,300


$ 143,495


(B)

Weighted-average common shares – Diluted

105,984,612


105,853,938


105,042,626


104,001,288


(A/B)

Diluted EPS impact of income tax benefit

$ 0.03


$ 0.05


$ 1.29


$ 1.38












Diluted EPS excluding income tax benefit

$ 0.19


$ 0.36


$ 0.44


$ 1.41


LENDINGCLUB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Continued)

(In thousands, except share and per share data)

(Unaudited)




Tangible Book Value Per Common Share





December 31,

2022


September 30,
2022


June 30,
2022


March 31,

2022


December 31,

2021


GAAP common equity

$ 1,164,294


$ 1,121,410


$ 1,079,117


$ 887,434


$ 850,242


Less: Goodwill

(75,717)


(75,717)


(75,717)


(75,717)


(75,717)


Less: Intangible assets

(16,334)


(17,512)


(18,690)


(19,886)


(21,181)


Tangible common equity

$ 1,072,243


$ 1,028,181


$ 984,710


$ 791,831


$ 753,344













Book value per common share











GAAP common equity

$ 1,164,294


$ 1,121,410


$ 1,079,117


$ 887,434


$ 850,242


Common shares issued and outstanding

106,546,995


105,088,761


103,630,776


102,194,037


101,043,924


Book value per common share

$ 10.93


$ 10.67


$ 10.41


$ 8.68


$ 8.41













Tangible book value per common share











Tangible common equity

$ 1,072,243


$ 1,028,181


$ 984,710


$ 791,831


$ 753,344


Common shares issued and outstanding

106,546,995


105,088,761


103,630,776


102,194,037


101,043,924


Tangible book value per common share

$ 10.06


$ 9.78


$ 9.50


$ 7.75


$ 7.46


Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/lendingclub-reports-fourth-quarter-and-full-year-2022-results-301730874.html

SOURCE LendingClub Corporation

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