LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America’s digital marketplace bank, recently announced financial results for the first quarter ended March 31, 2023.
Scott Sanborn, LendingClub CEO, said:
“We delivered a solid quarter driven by our strategic advantages, including over 15 years of cycle-tested data, prudent and agile underwriting, and our digital marketplace bank model. While we expect continued industry and macro headwinds, these significant advantages, along with our growing online consumer deposit franchise and high-yielding short duration assets, provide us with a range of options to navigate the current macro environment while we build toward an ambitious future for the company and our growing membership base.”
First Quarter 2023 Results
Balance Sheet:
- Total assets grew 10% sequentially to $8.8 billion from $8.0 billion at December 31, 2022.
- Deposits up 13% sequentially to $7.2 billion; FDIC-insured deposits represent approximately 86% of total deposits.
- Cash of $1.6 billion increased 55% from December 31, 2022.
- Available aggregate borrowing capacity of $4.1 billion as of April 26, 2023.
- Loans and leases held for investment portfolio grew 4.6% sequentially from $5.6 billion to $5.9 billion.
- Substantial capital with a consolidated Tier 1 leverage ratio of 12.8% and consolidated Common Equity Tier 1 capital ratio of 15.6%.
- Book value per common share of $11.08, up 1.4% from $10.93 at December 31, 2022.
- Tangible book value per common share of $10.23, up 1.7% from $10.06 at December 31, 2022.
Financial Performance:
- Loan originations were $2.3 billion compared to $2.5 billion in the prior quarter.
- Total net revenue was $245.7 million compared to $262.7 million in the prior quarter, as growth in net interest income was offset by lower marketplace revenue.
- Net interest income increased 8% from the prior quarter to $146.7 million, primarily due to higher balance sheet growth and partially offset by lower net interest margin due to higher cost of deposits.
- Marketplace revenue was $95.6 million compared to $123.4 million in the prior quarter, reflecting a reduction in sold marketplace volumes.
- Net income of $13.7 million, or diluted EPS of $0.13, compared to $23.6 million, or diluted EPS of $0.22, in the prior quarter, reflecting higher credit provisioning due to growth in the held-for-investment portfolio as well as higher tax expense.
- Pre-provision net revenue (PPNR) of $88.4 million grew 7% over the prior quarter, driven by the Company’s cost reduction actions and a $9.0 million one-time revenue benefit primarily due to slower prepayments.
- Credit quality of the held-for-investment prime loan portfolio performing in-line with expectations as portfolio seasons; provision for credit losses of $70.6 million primarily reflects $1.0 billion of quarterly loan originations held for investment.
- Efficiency ratio improved to 64.0% from 68.5% in the prior quarter due to cost reduction actions and marketing efficiency.
As covered, LendingClub Corporation is the parent company of LendingClub Bank, National Association, Member FDIC.
LendingClub Bank claims it 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, their advanced credit decisioning and machine-learning models “are used across the customer lifecycle to expand seamless access to credit for their 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.”