U.S. Markets closed
  • S&P 500

    4,411.79
    +44.31 (+1.01%)
     
  • Dow 30

    35,061.55
    +238.20 (+0.68%)
     
  • Nasdaq

    14,836.99
    +152.39 (+1.04%)
     
  • Russell 2000

    2,209.65
    +10.17 (+0.46%)
     
  • Crude Oil

    72.17
    +0.26 (+0.36%)
     
  • Gold

    1,802.10
    -3.30 (-0.18%)
     
  • Silver

    25.24
    -0.14 (-0.56%)
     
  • EUR/USD

    1.1770
    -0.0003 (-0.0235%)
     
  • 10-Yr Bond

    1.2860
    +0.0210 (+1.66%)
     
  • Vix

    17.20
    -0.49 (-2.77%)
     
  • GBP/USD

    1.3754
    -0.0013 (-0.0977%)
     
  • USD/JPY

    110.5100
    +0.3950 (+0.3587%)
     
  • BTC-USD

    33,422.97
    +1,128.70 (+3.50%)
     
  • CMC Crypto 200

    786.33
    -7.40 (-0.93%)
     
  • FTSE 100

    7,027.58
    +59.28 (+0.85%)
     
  • Nikkei 225

    27,548.00
    +159.80 (+0.58%)
     

LendingClub Reports First Quarter 2021 Results

  • Oops!
    Something went wrong.
    Please try again later.
·12 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Sequential Revenue Growth of 40% Exceeds High End of Guidance Raising Full Year Outlook

SAN FRANCISCO, April 28, 2021 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), America's leading digital marketplace bank, today announced financial results for the first quarter ended March 31, 2021.

Lending Club, the world's largest online marketplace connecting borrowers and investors. (PRNewsFoto/Lending Club) (PRNewsFoto/Lending Club)
Lending Club, the world's largest online marketplace connecting borrowers and investors. (PRNewsFoto/Lending Club) (PRNewsFoto/Lending Club)

"We had a great start to the year, accelerating personal loan origination growth by leveraging our strategic advantages including our customer base of 3 million members, our data and technology capabilities, and our newly acquired digital bank," said Scott Sanborn, CEO of LendingClub. "Personal loans are paving the road to our broader ambitions as our vertically integrated model delivers a new and recurring revenue stream, lowers our issuance costs and generates strong and sustained growth."

Results Reflect Completed Acquisition of Radius (now LendingClub Bank) and Strong Sequential Growth

  • 63% sequential growth in origination volume.

  • 40% sequential growth in total revenue, driven by growth in originations, partially offset by revenue deferrals on originations retained on the balance sheet.

  • Stronger first quarter revenue growth improved bottom line results versus our guidance.

  • First quarter 2021 net loss of $47 million included $44 million of the following notable items: $21 million of Current Expected Credit Loss (CECL) expenses related to acquired loans and loan growth, $14 million of net revenue deferrals on retained loans, and $9 million of non-recurring expenses related to the acquisition of Radius.


Three Months Ended


($ in millions)

March 31,
2021


December 31,
2020


QoQ %


Loan originations

$

1,483.2



$

912.0



63

%


Total revenue

$

105.8



$

75.5



40

%


Consolidated net loss

$

(47.1)



$

(26.7)



76

%


Strategic and Financial Benefits of Digital Bank Acquisition Are Being Realized Immediately

  • Successfully transitioned to all new personal loan originations being issued through LendingClub Bank as we exited the quarter, saving on issuing fees previously paid to a third-party issuing bank partner.

  • Retained $344 million of personal loans, building an attractive and recurring revenue stream which generates approximately 3x the earnings of loans sold through the marketplace.

  • Benefited from a core deposit base of over $2 billion from the acquisition, reducing overall funding costs by approximately 300 basis points compared to 2020.

  • Leveraged new digital banking capabilities and extended support of the Paycheck Protection Program (PPP), which has cumulatively facilitated over $870 million of loans to help small businesses keep over 75,000 people employed.

Financial Outlook – Raising Full Year Targets


(millions)

Second Quarter

2021

Full Year

2021

Versus Prior

Full Year 2021 Guidance


Loan originations

$1.7B to $1.9B

$6.8B to $7.3B

+$500M to +$1B


Total revenue

$130M to $140M

$500M to $530M

+$12M to +$42M


Consolidated net loss

($40M) to ($30M)

($167M) to ($142M)

+$33M


Items Impacting Q1'21 Consolidated Net Loss


(millions)

Consolidated Net
Loss Impact

Per Share
Impact

Commentary


Revenue deferrals, net of amortization

$(14.0)

$(0.14)

Deferred revenue, net of deferred expense and amortization during the period


Provision for credit losses

$(21.5)

$(0.22)

Includes $6.9 million Day 1 CECL adjustment for legacy Radius assets


Non-recurring expenses

$(8.9)

$(0.09)

Non-recurring expenses primarily related to the acquisition of Radius


Total

$(44.4)

$(0.46)



About LendingClub

LendingClub Corporation (NYSE: LC) is the parent company of LendingClub Bank, National Association, Member FDIC. It is the leading digital marketplace bank in the US. Members can gain access to a broad range of financial products and services through a technology-driven platform, designed to help them pay less when borrowing and earn more when saving. Since 2007, more than 3 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 first quarter 2021 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, April 28, 2021. 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 (888) 317-6003, or outside the U.S. +1 (412) 317-6061, with conference ID 0419659, 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 March 17, 2021, by calling +1 (877) 344-7529 or outside the U.S. +1 (412) 317-0088, with Conference ID 10151870. 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

Safe Harbor Statement

Some of the statements above, including statements regarding future products and services, our ability to effectuate and the effectiveness of certain strategy initiatives, anticipated future financial results, value delivery for customers and stockholders, and the impact of the Radius acquisition and resulting bank charter on our business 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: the outcomes of pending governmental investigations and pending or threatened litigation, which are inherently uncertain; the impact of management changes and the ability to continue to retain key personnel; our ability to achieve cost savings from restructurings; our ability to continue to attract and retain new and existing borrowers and investors; our ability to obtain or add bank functionality and a bank charter; competition; overall economic conditions; 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 Quarterly Report on Form 10-Q and Annual Report on Form 10-K, each as filed with the Securities and Exchange Commission, as well as our subsequent reports on Form 10-Q and 10-K each as filed 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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)



Three Months Ended



March 31,


December 31,


March 31,



2021


2020


2020


Non-interest income (1):







Marketplace revenue

$

81,727



$

69,322



$

102,477



Other non-interest income

5,607



3,276



4,511



Total non-interest income

87,334



72,598



106,988










Interest income (1):







Interest on loans held for sale

5,157



5,297



27,376



Interest and fees on loans and leases held for investment

15,301







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

20,262



23,759



35,376



Interest on other loans held for investment at fair value

1,479



1,666



1,999



Interest on securities available for sale

2,235



2,194



3,779



Other interest income

156



34



881



Total interest income

44,590



32,950



69,411










Interest expense (1):







Interest on deposits

1,014







Interest on short-term borrowings

1,264



1,506



7,398



Interest on retail notes, certificates and secured borrowings

20,262



23,759



35,376



Interest on Structured Program borrowings

3,208



4,786



2,299



Interest on other long-term debt

336





140



Total interest expense

26,084



30,051



45,213










Net interest income (1)

18,506



2,899



24,198










Total net revenue (1)

105,840



75,497



131,186










Provision for credit losses (1)

21,493



(417)



10,980










Non-interest expense (1):







Compensation and benefits

64,420



52,527



75,545



Marketing

19,545



8,488



39,081



Equipment and software

7,893



5,911



6,490



Occupancy

6,900



5,629



6,813



Depreciation and amortization

11,766



12,198



12,873



Professional services

11,603



9,057



14,141



Other non-interest expense

12,125



9,083



13,031



Total non-interest expense

134,252



102,893



167,974










Loss before income tax expense

(49,905)



(26,979)



(47,768)



Income tax expense (benefit)

(2,821)



(324)



319



Consolidated net loss

$

(47,084)



$

(26,655)



$

(48,087)










Net loss per share attributable to common stockholders – Basic and Diluted (2)

$

(0.49)



$

(0.29)



$

(1.10)



Weighted-average common shares – Basic and Diluted (2)

92,666,169



81,368,674



86,505,560



Net income (loss) per share attributable to preferred stockholders – Basic and Diluted (2)

$

(0.49)



$

(0.29)



$

18.36



Weighted-average common shares, as converted – Basic and Diluted (2)

2,648,758



10,512,486



2,579,710





(1)

Prior period amounts have been reclassified to conform to the current period presentation.

(2)

The following table details the computation of the Company's basic and diluted net income (loss) per share of common stock and preferred stock (presented on an as-converted basis):


Three Months Ended



March 31, 2021


December 31, 2021


March 31, 2020



Common
Stock


Preferred
Stock


Common
Stock


Preferred
Stock


Common
Stock


Preferred
Stock


Allocation of undistributed consolidated net loss

$

(45,776)



$

(1,308)



$

(23,605)



$

(3,050)



$

(45,240)



$

(2,847)



Deemed dividend









(50,204)



50,204



Net income (loss) attributable to stockholders (3)

$

(45,776)



$

(1,308)



$

(23,605)



$

(3,050)



$

(95,444)



$

47,357



Weighted-average common shares – Basic and Diluted

92,666,169



2,648,758



81,368,674



10,512,486



86,505,560



2,579,710



Net income (loss) per share attributable to stockholders – Basic and Diluted

$

(0.49)



$

(0.49)



$

(0.29)



$

(0.29)



$

(1.10)



$

18.36





(3)

For the first quarter of 2020, reflects a deemed dividend paid to our largest stockholder upon the exchange of all shares of LendingClub common stock held by it for newly issued shares of mandatorily convertible, non-voting, LendingClub Series A preferred stock.

LENDINGCLUB CORPORATION

OPERATING HIGHLIGHTS

(In thousands, except percentages and number of employees, or as noted)

(Unaudited)



Three Months Ended


% Change



March 31,
2021


December 31,
2020


September 30,
2020


June 30,
2020


March 31,
2020


Q/Q


Y/Y


Operating Highlights:


Loan originations (in millions) (1)

$

1,483



$

912



$

584



$

326



$

2,521



63

%


(41)

%


Total revenue (2)

$

105,840



$

75,497



$

71,043



$

40,357



$

131,187



40

%


(19)

%


Consolidated net loss

$

(47,084)



$

(26,655)



$

(34,325)



$

(78,471)



$

(48,087)



(77)

%


(2)

%


EPS (common stockholders) – diluted (3)

$

(0.49)



$

(0.29)



$

(0.38)



$

(0.87)



$

(1.10)



(69)

%


(55)

%

















Loan Originations by Investor Type:


Banks

29

%


33

%


41

%


68

%


43

%






Self-directed retail investors

%


8

%


13

%


17

%


4

%






LendingClub Bank

23

%


%


%


%


%






LendingClub inventory (4)

5

%


1

%


2

%


5

%


20

%






Managed accounts and other institutional

43

%


58

%


44

%


10

%


33

%






Total

100

%


100

%


100

%


100

%


100

%





















Servicing Portfolio by Method Financed (in millions, at end of period):


Whole loans sold

$

9,185



$

10,139



$

11,249



$

12,421



$

14,118



(9)

%


(35)

%


Retail notes, certificates and secured borrowings

537



680



756



851



991



(21)

%


(46)

%


LendingClub Bank

399



57



79



109



147



N/M


171

%


Other loans invested in by the Company

150



183



262



690



866



(18)

%


(83)

%


Total

$

10,271



$

11,002



$

12,267



$

13,962



$

15,975



(7)

%


(36)

%


Employees and contractors (5)

1,192



1,030



998



1,008



1,542



16

%


(23)

%



N/M – Not meaningful

(1)

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

(2)

Prior period total net revenue balances have been recast related to credit valuation adjustments on securities available for sale being reclassified from net fair value adjustments to provision for credit losses.

(3)

For the first quarter of 2020, reflects a $50.2 million deemed dividend paid to our largest stockholder upon the exchange of all shares of LendingClub common stock held by it for newly issued shares of mandatorily convertible, non-voting, LendingClub Series A preferred stock.

(4)

LendingClub inventory reflects loans purchased or pending purchase by the Company during the period, excluding loans held by the Company through consolidated trusts, if applicable, and not yet sold as of the period end.

(5)

As of the end of each respective period.

LENDINGCLUB CORPORATION

ALLOWANCE FOR LOAN AND LEASE LOSSES

(In thousands, except percentages or as noted)

(Unaudited)




The activity in the allowance for expected credit losses for the quarter ended March 31, 2021 was as follows:



March 31, 2021


Allowance for loan and lease losses, beginning of period

$



Credit loss expense for loans and leases held for investment

23,553



Initial allowance for PCD assets acquired during the period

12,440



Charge-offs



Recoveries

139



Allowance for loan and lease losses, end of period

$

36,132






Reserve for unfunded lending commitments, beginning of period

$



Credit loss expense for unfunded lending commitments

410



Reserve for unfunded lending commitments, end of period

$

410



LENDINGCLUB CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)



March 31,
2021


December 31,
2020


Assets (1)





Cash and due from banks

$

34,261



$

5,197



Interest-bearing deposits in banks

797,539



519,766



Total cash and cash equivalents

831,800



524,963



Restricted cash

139,080



103,522



Securities available for sale at fair value (includes $273,331 and $159,164 at amortized cost, respectively)

274,419



142,226



Loans held for sale at fair value

166,623



121,902



Loans and leases held for investment

2,115,432





Allowance for loan and lease losses

(36,132)





Loans and leases held for investment, net

2,079,300





Retail and certificate loans held for investment at fair value

507,157



636,686



Other loans held for investment at fair value

42,485



49,954



Property, equipment and software, net

95,313



96,641



Goodwill

75,717





Other assets

279,195



187,399



Total assets

$

4,491,089



$

1,863,293



Liabilities and Equity (1)

...



Deposits:





Interest-bearing

$

2,229,827



$



Noninterest-bearing

143,610





Total deposits

2,373,437





Short-term borrowings

90,091



104,989



Advances from Paycheck Protection Program Liquidity Facility (PPPLF)

370,086





Retail notes, certificates and secured borrowings at fair value

507,203



636,774



Payable on Structured Program borrowings

133,499



152,808



Other long-term debt

18,572





Other liabilities

265,066



244,551



Total liabilities

3,757,954



1,139,122



Equity





Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 0 and 43,000 shares issued and outstanding, respectively





Common stock, $0.01 par value; 180,000,000 shares authorized; 97,228,126 and 88,149,510 shares issued and outstanding, respectively

972



881



Additional paid-in capital

1,563,865



1,508,020



Accumulated deficit

(833,298)



(786,214)



Treasury stock, at cost; 4,251 and 0 shares, respectively

(92)





Accumulated other comprehensive income

1,688



1,484



Total equity

733,135



724,171



Total liabilities and equity

$

4,491,089



$

1,863,293





(1)

Prior period amounts have been reclassified to conform to the current period presentation.

LENDINGCLUB CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS BY SEGMENT

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)



LendingClub

Corporation

(Parent only)


LendingClub

Bank


Intercompany

Eliminations


Total



March 31,
2021


December 31,
2020


March 31,
2021


December 31,
2020


March 31,
2021


December 31,
2020


March 31,
2021


December 31,
2020


Assets

















Total cash and cash equivalents

$

75,950



$

524,963



$

792,701



$



$

(36,851)



$



$

831,800



$

524,963



Restricted cash

139,080



103,522











139,080



103,522



Securities available for sale at fair value

122,766



142,226



151,653









274,419



142,226



Loans held for sale at fair value

105,792



121,902



60,831









166,623



121,902



Loans and leases held for investment, net





2,079,300









2,079,300





Retail and certificate loans held for investment at fair value

507,157



636,686











507,157



636,686



Other loans held for investment at fair value

42,485



49,954











42,485



49,954



Property, equipment and software, net

88,364



96,641



6,949









95,313



96,641



Goodwill





75,717









75,717





Other assets

206,756



187,399



123,227





(50,788)





279,195



187,399



Total assets

1,747,267



1,863,293



3,290,378





(546,556)





4,491,089



1,863,293



Liabilities and Equity

















Total deposits





2,410,288





(36,851)





2,373,437





Short-term borrowings

87,347



104,989



2,744









90,091



104,989



Advances from PPPLF





370,086









370,086





Retail notes, certificates and secured borrowings at fair value

507,203



636,774











507,203



636,774



Payable on Structured Program borrowings

133,499



152,808











133,499



152,808



Other long-term debt

15,738





2,834









18,572





Other liabilities

240,486



244,551



75,875





(51,295)





265,066



244,551



Total liabilities

984,273



1,139,122



2,861,827





(88,146)





3,757,954



1,139,122



Total equity

762,994



724,171



428,551





(458,410)





733,135



724,171



Total liabilities and equity

$

1,747,267



$

1,863,293



$

3,290,378



$



$

(546,556)



$



$

4,491,089



$

1,863,293



LENDINGCLUB CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands)

(Unaudited)




The following table is provided to delineate between the assets and liabilities belonging to our member payment dependent self-directed retail program (Retail Program) note holders and certain VIEs that we are required to consolidate in accordance with GAAP. Such assets are not legally ours and the associated liabilities are payable only from the cash flows generated by those assets (i.e. Pass-throughs). As such, these debt holders do not have a secured interest in any other assets of LendingClub. We believe this is a useful measure because it illustrates the overall financial stability and operating leverage of the Company.



March 31, 2021


December 31, 2020



Retail
Program (1)

Consolidated
VIEs (2)(4)

All Other
LendingClub (3)

Condensed
Consolidated
Balance Sheet


Retail
Program (1)

Consolidated
VIEs (2)(4)

All Other
LendingClub (3)

Condensed
Consolidated
Balance Sheet


Assets (5)











Total cash and cash equivalents

$


$


$

831,800


$

831,800



$


$


$

524,963


$

524,963



Restricted cash


15,229


123,851


139,080




13,473


90,049


103,522



Securities available for sale at fair value



274,419


274,419





142,226


142,226



Loans held for sale at fair value (4)


79,281


87,342


166,623




92,802


29,100


121,902



Loans and leases held for investment, net



2,079,300


2,079,300








Retail and certificate loans held for investment at fair value

470,880


36,277



507,157



584,066


52,620



636,686



Other loans held for investment at fair value (4)


38,680


3,805


42,485




46,120


3,834


49,954



Property, equipment and software, net



95,313


95,313





96,641


96,641



Goodwill



75,717


75,717








Other assets

2,879


828


275,488


279,195



3,797


1,134


182,468


187,399



Total assets

$

473,759


$

170,295


$

3,847,035


$

4,491,089



$

587,863


$

206,149


$

1,069,281


$

1,863,293



Liabilities and Equity(5)











Total deposits

$


$


$

2,373,437


$

2,373,437



$


$


$


$



Short-term borrowings



90,091


90,091





104,989


104,989



Advances from PPPLF



370,086


370,086








Retail notes, certificates and secured borrowings at fair value

470,880


36,277


46


507,203



584,066


52,620


88


636,774



Payable on Structured Program borrowings (4)


133,499



133,499




152,808



152,808



Other long-term debt



18,572


18,572








Other liabilities

2,879


519


261,668


265,066



3,797


721


240,033


244,551



Total liabilities

473,759


170,295


3,113,900


3,757,954



587,863


206,149


345,110


1,139,122



Total equity



733,135


733,135





724,171


724,171



Total liabilities and equity

$

473,759


$

170,295


$

3,847,035


$

4,491,089



$

587,863


$

206,149


$

1,069,281


$

1,863,293





(1)

Represents loans held for investment at fair value that are funded directly by our Retail Program notes. The liabilities are only payable from the cash flows generated by the associated assets. We do not assume principal or interest rate risk on loans facilitated through our lending marketplace that are funded by our Retail Program because loan balances, interest rates and maturities are matched and offset by an equal balance of notes with the exact same interest rates and maturities. We do not retain any economic interests from our Retail Program. Interest expense on Retail Program notes of $18.4 million and $28.9 million was equally matched and offset by interest income from the related loans of $18.4 million and $28.9 million for the first quarters of 2021 and 2020, respectively, resulting in no net effect on our net interest income.

(2)

Represents assets and equal and offsetting liabilities of certain VIEs that we are required to consolidate in accordance with GAAP, but which are not legally ours. The liabilities are only payable from the cash flows generated by the associated assets. The creditors of the VIEs have no recourse to the general credit of the Company. Interest expense on these liabilities owned by third parties of $5.1 million and $10.5 million was equally matched and offset by interest income on the loans of $5.1 million and $10.5 million for the first quarters of 2021 and 2020, respectively, resulting in no net effect on our net interest income. Economic interests held by LendingClub, including retained interests, residuals and equity of the VIEs, are reflected in "Loans held for sale at fair value," "Other loans held for investment at fair value" and "Restricted cash," respectively, within the "All Other LendingClub" column.

(3)

Represents all other assets and liabilities of LendingClub, other than those related to our Retail Program and certain consolidated VIEs, but includes any economic interests held by LendingClub, including retained interests, residuals and equity of those consolidated VIEs.

(4)

The Company has sponsored Structured Program transactions that have been consolidated, resulting in an increase to "Other loans held for investment at fair value," "Loans held for sale at fair value" and the related "Payable on Structured Program borrowings."

(5)

Prior period amounts have been reclassified to conform to the current period presentation.

Cision
Cision

View original content to download multimedia:http://www.prnewswire.com/news-releases/lendingclub-reports-first-quarter-2021-results-301279449.html

SOURCE LendingClub Corporation