LendingClub (NYSE: LC), one of the few federally chartered digital banks, has reported Q3 2022 earnings. The Fintech states that total net revenue during the quarter came in at $304.9 million, growing by 24% year over year, driven by growth in net interest income. Alongside the top-line growth, LendingClub booked a net income of $43.2 million, an increase of $16.0 million year over year.
LendingClub adds that net income for Q3 included an income tax benefit of $7.2 million. Diluted earnings per share (EPS) were $0.41 or a 58% increase year over year. The EPS gained from a $0.05 per share benefit due to a reversal of a deferred tax asset valuation allowance.
LendingClub results topped their guidance targets.
Scott Sanborn, LendingClub CEO, said they delivered solid results due to the “strategic advantages of their digital bank in a time of economic challenges:
“We drove growth in recurring interest income supported by strong credit performance of our retained high-quality prime loan portfolio. 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 moderate gradually. 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.”
LendingClub is still largely a digital lender as it builds out its digital banking services. Total loan originations during the quarter increased by 14% to $3.5 billion. The company aims to help consumers better manage their money, serving mid to mid-high income earners. The company wants to become “America’s Financial Health Club.”
Deposits were up a whopping 8-% to $5.1 billion from September of 2021.
LendingClub said the credit quality of its held for investment loans remained strong.
The company’s provision for credit losses of $82.7 million reflects $1.2 billion of quarterly loan originations held for investment and loan portfolio growth of 97% year over year.
LendingClub provided both Q4 and full-year guidance. Net income for Q4 is predicted to land at $15 to $25 million, and full-year net income at $280 to $290 million.
Shares in LendingClub declined in after-hours trading, down by around 9% as of this writing – at a 52-week low. Markets have been choppy in recent weeks as the economy has struggled to discern when inflation will halt its march higher and when the Fed will pause, and when they do, will the economy be dead in its tracks.
LendingClub reports over 4 million customers, having originated more than $80 billion in loans since inception.
