LendingClub Reports Q1 Net Loss of $41 Million, Looks to Move Forward as Digital Bank with Radius Acquisition

LendingClub Corporation (NYSE: LC), has announced Q1 2021 earnings delivering a net loss of $41 million for the quarter. Loan originations were $1,483.2 billion for the quarter. In Q1 2020 that number was $2,521 billion. Loan originations in Q4 of 2020 were $912.0 million. LendingClub touted the 63% sequential growth in origination volume following a challenging year impacted by the ongoing COVID-19 health crisis.

Scott Sanborn, CEO of LendingClub, issued the following statement on the results:

“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. 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.”

At the beginning of 2021, LendingClub announced that it had closed on its acquisition of Radius Bank as it prepares to transition to a digital bank platform while maintaining its lending business. The company added that it had successfully transitioned to all new personal loan originations being issued through LendingClub Bank as they exited the quarter thus saving on issuing fees previously paid to a third-party issuing bank partner. LendingClub now benefits from a deposit base of over $2 billion from the Radius acquisition. Importantly having access to inexpensive capital will dramatically reduce overall funding costs – expected to be approximately 300 basis points savings as compared to 2020.

LendingClub said that it had retained $344 million of personal loans generating revenue that is reportedly 3x the earnings of loans sold through the marketplace.

LendingClub provided both Q2 and full-year guidance. For Q2 2021, LendingClub anticipates loan originations of between $1.7 billion and $1.9 billion. For the fiscal year, LendingClub expects $6.8 billion to $7.3 billion in lending. LendingClub expects a loss in Q2 of between $40 million to $30 million. For the full year, the loss should be between $167 million to $142 million.

Key to the Fintech’s performance will be how it leverages its 3+ million borrowers, and affiliated data, with its new digital banking operation.

The earnings call is scheduled to take place at 5PM ET today and executives should provide some additional color on what the integration with Radius will mean going forward.

Shares in LendingClub moved higher in after-hours trading.


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