LendingClub Reports Second Quarter 2023 Results

Continued Profitability with Strong Capital & Liquidity Levels

Successful Launch of Structured Certificates Program

SAN FRANCISCO, July 26, 2023 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the second quarter ended June 30, 2023.

"We're leaning into our data, membership, and business model advantages to deliver continued profitability in a difficult environment," said Scott Sanborn, LendingClub CEO. "While we expect the headwinds in the marketplace to persist, we're managing the business prudently, continuing our disciplined credit underwriting, and developing new structures to meet the evolving needs of loan investors. We are maintaining strong liquidity and capital and remain positioned to capture the massive long-term growth opportunities to help our members keep more of what they earn and earn more on what they save."

Second Quarter 2023 Results

Balance Sheet:

• Total assets of $8.3 billion compared to $8.8 billion in the prior quarter, reflecting a lower cash position due to the planned maturity of brokered deposits.
• Deposits of $6.8 billion compared to $7.2 billion in the prior quarter primarily due to the planned maturity of brokered deposits.
  • FDIC-insured deposits represent approximately 85% of total deposits.
• Loans and leases held for investment of $5.6 billion compared to $5.9 billion in the prior quarter as we moved $200 million in loans into a held for sale designation.
• Substantial capital position with a consolidated Tier 1 leverage ratio of 12.4% and consolidated Common Equity Tier 1 capital ratio of 16.1%.
• Book value per common share of $11.09, up from $11.08 in the prior quarter.
• Tangible book value per common share of $10.26, up from $10.23 in the prior quarter.

Financial Performance:

• Loan originations of $2.0 billion compared to $2.3 billion in the prior quarter with sold loan volume up modestly, offset by reduced loan retention.
• Total net revenue of $232.5 million compared to $245.7 million in the prior quarter, driven by lower marketplace revenue.
  • Net interest income of $146.7 million remained flat from the prior quarter as higher interest income was offset by higher cost of interest-bearing deposits.
  • Marketplace revenue of $82.8 million compared to $95.6 million in the prior quarter, reflecting lower price on sold marketplace volumes.
• Net income of $10.1 million, or diluted EPS of $0.09, compared to $13.7 million, or diluted EPS of $0.13, in the prior quarter.
• Pre-provision net revenue (PPNR) of $81.4 million compared to $88.4 million in the prior quarter, reflecting lower marketplace revenue, partially offset by lower non-interest expense.
• Provision for credit losses of $66.6 million compared to $70.6 million in the prior quarter driven by lower volume of retained loans, offset by a modest increase in provision for the portfolio.
• Efficiency ratio of 65.0% compared to 64.0% in the prior quarter due to a decline in marketplace revenue, partially offset by lower non-interest expense.

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

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 $85 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 4.7 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 second quarter 2023 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, July 26, 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 (404) 975-4839, or outside the U.S. +1 (833) 470-1428, with Access Code 447049, 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 August 2, 2023, by calling +1 (929) 458-6194 or outside the U.S. +1 (866) 813-9403, with Access Code 653185. LendingClub has used, and intends to use, its investor relations website, blog (http://blog.lendingclub.com), Twitter handles (@LendingClub and @LendingClubIR) 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:
[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: 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 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 13 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 borrowers and platform investors; our ability to realize the expected benefits from recent initiatives; competition; overall economic conditions; the interest rate environment; the regulatory environment; 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.

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