Strong Originations and Credit Performance Drives 12th Consecutive Quarter of GAAP Profitability SAN FRANCISCO, April 30, 2024 /PRNewswire/ -- LendingClub Corporation (NYSE:LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the first quarter ended March 31, 2024. "We're pleased to have started 2024 with another strong quarter, executing well against the factors we can control," said Scott Sanborn, LendingClub CEO. "Our operating discipline, strong credit performance, and continued innovation are resulting in a sustainable operating rhythm that is delivering real value to our members and has us well positioned to seize the historic opportunity in front of us." First Quarter 2024 Results Balance Sheet: Total assets of $9.2 billion compared to $8.8 billion in the prior quarter, primarily reflecting growth in securities related to the structured certificate program. Deposits of $7.5 billion compared to $7.3 billion in the prior quarter, primarily due to an increase in high yield savings and certificates of deposit, partially offset by a decrease in brokered deposits. FDIC-insured deposits represent approximately 87% of total deposits. Securities available for sale of $2.2 billion, compared to $1.6 billion in the prior quarter, primarily reflecting growth in the structured certificate program. Whole loans held on the balance sheet, which consists of loans and leases held for investment and loans held for sale, remained flat at $5.2 billion compared to the prior quarter, as the company increased loan retention and repurchased a portfolio of LendingClub-originated loans, largely offsetting amortization of the existing portfolio. Strong capital position with a consolidated Tier 1 leverage ratio of 12.5% and consolidated Common Equity Tier 1 capital ratio of 17.6%. Book value per common share increased to $11.40, compared to $11.34 in the prior quarter. Tangible book value per common share increased to $10.61, compared to $10.54 in the prior quarter. Financial Performance: Loan originations of $1.6 billion, comparable to the prior quarter driven by promising initial results from new borrower initiatives, offsetting typical seasonal pressures. Total net revenue of $180.7 million, compared to $185.6 million in the prior quarter, driven by: Marketplace revenue of $55.9 million, compared to $52.2 million in the prior quarter, primarily reflecting improved loan pricing of marketplace loans. Net interest income of $122.9 million, compared to $131.5 million in the prior quarter, reflecting a shift in asset mix from held for investment loans to senior securities and higher deposit funding costs. Provision for credit losses of $31.9 million, compared to $41.9 million in the prior quarter due to lower incremental provision on seasoned vintages. Net income increased to $12.3 million, with diluted EPS of $0.11, compared to $10.2 million, or diluted EPS of $0.09, in the prior quarter. Net income was driven by strong execution, better-than-expected benchmark rates supporting loan sales pricing, and continued expense management combined with delays in expected expense increases. Pre-provision net revenue (PPNR) of $48.5 million, compared to $55.6 million in the prior quarter.   Three Months Ended ($ in millions, except per share amounts) March 31,2024 December 31,2023 March 31,2023 Total net revenue $                    180.7 $                    185.6 $                    245.7 Non-interest expense 132.2 130.0 157.3 Pre-provision net revenue (1) 48.5 55.6 88.4 Provision for credit losses 31.9 41.9 70.6 Income before income tax expense 16.5 13.7 17.8 Income tax expense (4.3) (3.5) (4.1) Net income $                       12.3 $                       10.2 $                       13.7 Diluted EPS $                       0.11 $                       0.09 $                       0.13 (1) See page 3 of this release for additional information on our use of non-GAAP financial measures. For a calculation of Pre-Provision Net Revenue 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 Second Quarter 2024 Loan Originations $1.6B to $1.8B Pre-Provision Net Revenue (PPNR) $30M to $40M 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 $90 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 4.9 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 2024 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Tuesday, April 30, 2024. 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 904235, 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 May 7, 2024, by calling +1 (929) 458-6194 or outside the U.S. +1 (866) 813-9403, with Access Code 972670. LendingClub has used, and intends to use, its investor relations website, blog (http://blog.lendingclub.com), X (formerly 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. ContactsFor Media 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 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 is an important measure because it reflects 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. 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 on page 14 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; 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. *****   LENDINGCLUB CORPORATION OPERATING HIGHLIGHTS (In thousands, except percentages or as noted) (Unaudited) As of and for the three months ended % Change March 31,2024 December 31,2023 September 30, 2023 June 30, 2023 March 31,2023 Q/Q Y/Y Operating Highlights: Non-interest income $       57,800 $        54,129 $         63,844 $      85,818 $       98,990 7 % (42) % Net interest income 122,888 131,477 137,005 146,652 146,704 (7) % (16) % Total net revenue 180,688 185,606 200,849 232,470 245,694 (3) % (26) % Non-interest expense 132,233 130,015 128,035 151,079 157,308 2 % (16) % Pre-provision net revenue(1) 48,455 55,591 72,814 81,391 88,386 (13) % (45) % Provision for credit losses 31,927 41,907 64,479 66,595 70,584 (24) % (55) % Income before income tax expense 16,528 13,684 8,335 14,796 17,802 21 % (7) % Income tax expense (4,278) (3,529) (3,327) (4,686) (4,136) 21 % 3 % Net income $       12,250 $        10,155 $           5,008 $      10,110 $       13,666 21 % (10) % Basic EPS $           0.11 $            0.09 $             0.05 $          0.09 $           0.13 22 % (15) % Diluted EPS $           0.11 $            0.09 $             0.05 $          0.09 $           0.13 22 % (15) % LendingClub Corporation Performance Metrics: Net interest margin 5.8 % 6.4 % 6.9 % 7.1 % 7.5 % Efficiency ratio(2) 73.2 % 70.0 % 63.7 % 65.0 % 64.0 % Return on average equity (ROE)(3) 3.9 % 3.3 % 1.7 % 3.4 % 4.6 % Return on average total assets (ROA)(4) 0.5 % 0.5 % 0.2 % 0.5 % 0.7 % Marketing expense as a % of loan originations 1.47 % 1.44 % 1.30 % 1.19 % 1.18 % LendingClub Corporation Capital Metrics: Common equity Tier 1 capital ratio 17.6 % 17.9 % 16.9 % 16.1 % 15.6 % Tier 1 leverage ratio 12.5 % 12.9 % 13.2 % 12.4 % 12.8 % Book value per common share $         11.40 $          11.34 $           11.02 $        11.09 $         11.08 1 % 3 % Tangible book value per common share(1) $         10.61 $          10.54 $           10.21 $        10.26 $         10.23 1 % 4 % Loan Originations (in millions)(5): Total loan originations $         1,646 $          1,630 $           1,508 $        2,011 $         2,288 1 % (28) % Marketplace loans $         1,361 $          1,432 $           1,182 $        1,353 $         1,286 (5) % 6 % Loan originations held for investment $            285 $             198 $              326 $           657 $         1,002 44 % (72) % Loan originations held for investment as a % of total loan originations 17 % 12 % 22 % 33 % 44 % Servicing Portfolio AUM (in millions)(6): Total servicing portfolio $       13,437 $         14,122 $         14,818 $       15,669 $       16,060 (5) % (16) % Loans serviced for others $         8,671 $           9,336 $           9,601 $       10,204 $       10,504 (7) % (17) % (1) Represents a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures." (2) Calculated as the ratio of non-interest expense to total net revenue. (3) Calculated as annualized net income divided by average equity for the period presented. (4) Calculated as annualized net income divided by average total assets for the period presented. (5) Includes unsecured personal loans and auto loans only. (6) Loans serviced on our platform, which includes unsecured personal loans, auto loans and education and patient finance loans serviced for others and held for investment by the company.   LENDINGCLUB CORPORATION OPERATING HIGHLIGHTS (Continued) (In thousands, except percentages or as noted) (Unaudited) As of and for the three months ended % Change March 31,2024 December 31,2023 September 30, 2023 June 30, 2023 March 31,2023 Q/Q Y/Y Balance Sheet Data: Securities available for sale $     2,228,500 $      1,620,262 $          795,669 $       523,579 $        380,028 38 % 486 % Loans held for sale at fair value $        550,415 $         407,773 $          362,789 $       250,361 $          44,647 35 % N/M Loans and leases held for investment at amortized cost $     4,505,816 $      4,850,302 $       5,237,277 $    5,533,349 $     5,491,938 (7) % (18) % Gross allowance for loan and lease losses (1) $       (311,794) $        (355,773) $         (388,156) $      (383,960) $       (368,698) (12) % (15) % Recovery asset value (2) $          52,644 $           45,386 $            37,661 $         28,797 $          19,841 16 % 165 % Allowance for loan and lease losses $       (259,150) $        (310,387) $         (350,495) $      (355,163) $       (348,857) (17) % (26) % Loans and leases held for investment at amortized cost, net $     4,246,666 $      4,539,915 $       4,886,782 $    5,178,186 $     5,143,081 (6) % (17) % Loans held for investment at fair value (3) $        427,396 $         272,678 $          344,417 $       430,956 $        787,473 57 % (46) % Total loans and leases held for investment (3) $     4,674,062 $      4,812,593 $       5,231,199 $    5,609,142 $     5,930,554 (3) % (21) % Whole loans held on balance sheet (4) $     5,224,477 $      5,220,366 $       5,593,988