Lendingclub Corporation · NYSE:LC
Lendingclub — Q4 2023 Earnings Presentation
21 slides from Lendingclub's earnings presentation, Jan 30, 2024
Slide 1: Fourth Quarter 2023 Results
Fourth Quarter 2023 Results January 30, 2024
Slide 2: Disclaimer
Disclaimer Some of the statements in this presentation, including statements regarding our competitive advantages, loan and financial performance, macroeconomic and business outlook, and demand for our loan programs, are “forward-looking statements.” The words “anticipate,” “believe,” “estimate,” “e
Slide 3: Award-Winning Member-Focused Digital Marketplace Bank
Award-Winning Member-Focused Digital Marketplace Bank Members1 Originations1 4.8+ $90+ Million Billion Best Overall Checking Best Checking Account Account Overall Average Customer Net Promoter Review2 Score (NPS)3 4.83 74 Out of 5 stars 1) Total members and originations based on lifetime volume acro
Slide 4: The Solution We're Providing
The Solution We’re Providing 47% of American households carry over LendingClub’s 4.8+ million Our direct-to-consumer digital $1.3 trillion of revolving debt, paying an members have already come to us to marketplace bank features a estimated $133 billion in fees and access lower-cost credit. While we
Slide 5: Total Addressable Market & Customer Value Proposition Has Never Been Greater
Total Addressable Market & Customer Value Proposition Has Never Been Greater Record High Outstanding Record High Credit Card Revolving Consumer Credit1 Interest Rates2 (in thousands; Nov. 2008 to Nov. 2023, seasonally adjusted) (Nov. 2008 to Nov. 2023) $1,350 23% $1,250 $1.3T Total outstanding 21% 2
Slide 6: Strategically Positioned for Long-term Success
Strategically Positioned for Long-term Success 1 Fintechs Banks Ability to efficiently serve a broad range of customers Industry-leading marketing efficiency; 4.8M+ members ✓ ✓ ✗ Capital-light, high-ROE marketplace earnings stream $54.1M Non-Interest Income ✓ ✓ ✗ Economics Profitable earnings via lo
Slide 7: 4Q23 Highlights: Achieved Financial Targets
4Q23 Highlights: Achieved Financial Targets 4Q23 Guidance Targets Actuals Commentary Total originations of $1.6B within guidance range driven by approximately: Q4 Total ▪ $1.0B for structured certificate program Originations $1.5B to $1.7B $1.6B ▪ $350M of marketplace whole loans ▪ $200M of Held for
Slide 8: 12 Quarters of Credit Outperformance vs. Competitive Set
Proactive, Prudent Decisioning Results in 12 Quarters of Credit Outperformance vs. Competitive Set LendingClub vs. Competitive Set: 30-day+ Delinquencies & Hardships at Month on Book 9 by Quarterly Vintage1,2 LendingClub Competitive Set3 FICO 660-719 FICO 720-779 FICO 780-850 7% 7% 7% 6% 5.6% 6% 6%
Slide 9: Strong Capital & Liquidity Position
Strong Capital & Liquidity Position MAJORITY INSURED DEPOSITS AMPLE CASH ON HAND BORROWING CAPACITY 87% $1.3B $3.5B $6.4B of $7.3B total deposits are insured Cash represents 14% of Total Assets; Includes loans and securities pledged compared to 57% average for all FDIC- provides 135% coverage of uni
Slide 10: Multiple Loan Disposition Channels Available to Optimize Earnings
Multiple Loan Disposition Channels Available to Optimize In-Period Earnings and Return on Capital HIGHER Day-1 Contribution LOWER to negative Day-1 Contribution LOWER lifetime value, capital usage, and credit risk HIGHER lifetime value, capital usage, and credit risk WHOLE LOAN STRUCTURED EXTENDED H
Slide 11: Further Diversifying Balance Sheet with Assets Driving Strong Marginal ROE
Further Diversifying Balance Sheet with Assets Driving Strong Marginal Return on Equity Consumer Assets Retained on Balance Sheet1,2 ($ in millions) $1,127 $1,002 MARGINAL $878 ROE TARGET3 $811 Structured 20% Structured Certificates Structured Certificates RISK WEIGHT Certificates ~60% 19% 34% Struc
Slide 12: Net Interest Margin Reflecting Lower-Risk Balance Sheet
Net Interest Margin Reflecting Lower-Risk Balance Sheet Average Balances Average Yield 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Cash and other interest-earning assets1 $1,206 $1,267 $1,545 $1,271 $1,205 4.31% 4.86% 5.26% 5.54% 5.58% Growing balance sheet via low-risk Securities available fo
Slide 13: Structured Certificates Improving Risk-Adjusted Revenue
Structured Certificates Improving Risk-Adjusted Revenue Total Net Revenue ($ in millions) $262.7 $200.8 $127.5 $185.6 NON-INTEREST INCOME $63.8 Sequential change primarily due to a 3Q23 non-recurring $54.1 $10M benefit from a purchase incentive forfeiture. NET INTEREST INCOME $135.2 $137.0 $131.5 Se
Slide 14: Disciplined Expense Management
Disciplined Expense Management Efficiency Ratio Total Non-Interest Expense1 (Non-Interest Expense as a % of Net Revenue) ($ in millions) Efficiency Ratio 4Q22 1Q23 2Q23 3Q23 4Q23 Non-Interest Expense Less Marketing Marketing as % of Net Revenue Compensation & Benefits 87.8 73.3 71.6 58.5 58.6 70.0%
Slide 15: Continued Profitability Driving TBV per Common Share to $10.54
Continued Profitability Driving TBV per Common Share to $10.54 at Year End Pre-Provision Net Revenue (PPNR)1 Net Income ($ in millions) ($ in millions) $82.7 $23.6 $72.8 $55.6 $10.2 $5.0 4Q22 3Q23 4Q23 4Q22 3Q23 4Q23 Diluted Provision for ($61.5) ($64.5) ($41.9) EPS $0.22 $0.05 $0.09 Credit Losses B
Slide 16: Held for Investment Personal Loan Credit Performance by Vintage
Held for Investment Personal Loan Credit Performance by Vintage Expected Personal Loans Lifetime Net Loss Rate1 2021 Vintage 2022 Vintage 2023 Vintage Future ▪ 2023 vintage incorporates higher Provision Estimate2 8.9% 8.9% level of qualitative reserves for (to be recognized 8.8% 0.1% in future perio
Slide 17: Illustrative Lifecycle of a $100M Personal Loan Portfolio
Illustrative Lifecycle of a $100M Personal Loan Portfolio Charge-offs ($) Peak at Approximately Six Quarters of Seasoning Portfolio Vintage Dynamics1 $0.5 Average age of Metric ($M) Year 1 Year 2 Year 3 Year 4+ Total $100 PL HFI Portfolio $ Ending UPB 65.3 31.8 10.6 0.0 na (as of 12/31/23) $ Provisi
Slide 18: 1Q24 Guidance
1Q24 Guidance Outlook Context 1Q24 Guidance ▪ Maintaining origination range from prior quarter reflecting stabilizing environment Total $1.5B to $1.7B ▪ PPNR assumes: Originations ▪ Similar loan sales prices to 4Q23 ▪ Lower Net Interest Margin due to balance sheet growth of lower risk structured Pre
Slide 19: Reconciliation of GAAP to Non-GAAP Measures: Tangible Book Value
Reconciliation of GAAP to Non-GAAP Measures: Tangible Book Value Per Common Share We believe Tangible Book Value (TBV) Per Common Share is an important measure used to evaluate the company’s use of equity. In thousands, except share and per share data. December 31, 2023 September 30, 2023 December 3
Slide 20: Reconciliation of GAAP to Non-GAAP Measures: Pre-Provision Net Revenue
Reconciliation of GAAP to Non-GAAP Measures: Pre-Provision Net Revenue We believe Pre-Provision Net Revenue (PPNR) is an important measure reflecting the financial performance of our business operations. For the three months ended In thousands December 31, 2023 September 30, 2023 December 31, 2022 G
Slide 21: LendingClub
-: LendingClub