Lendingclub Corporation · NYSE:LC
Lendingclub — Q1 2023 Earnings Presentation
21 slides from Lendingclub's earnings presentation, Apr 26, 2023
Slide 1: First Quarter 2023 Results
First Quarter 2023 Results April 26, 2023
Slide 2: Disclaimer
Disclaimer Some of the statements in this presentation, including statements regarding our competitive advantages, macroeconomic and business outlook, loan and financial performance, are “forward-looking statements.” The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “outlook,
Slide 3: Award-Winning Member-Focused Digital Marketplace Bank
Award-Winning Member-Focused Digital Marketplace Bank Members1 Originations1 Vision Mission Promise Become To champion the 4.7+ $85+ America’s Empower Our Members financial success of our members Million Billion Financial Health Club. on Their Path to Financial with fairness, simplicity, and Health.
Slide 4: The Problem We're Solving
The Problem We’re Solving 40% of American households carry over LendingClub’s 4.7+ million Our direct-to-consumer digital $1 trillion of revolving debt, paying an members have already come to us to marketplace bank features a estimated $111 billion in fees and access lower-cost credit. While we vert
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; Feb. 2008 to Feb. 2023, seasonally adjusted) (Feb. 2008 to Feb. 2023) 21 $1,250 $1,150 $1.2T Total outstanding 20 19
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; 4.7M+ members ✓ ✓ ✗ Capital-light, high-ROE marketplace earnings stream $99.0M Non-Interest Income (Q1 2023) ✓ ✓ ✗ Economics Highly profitabl
Slide 7: 1Q23 Highlights: Exceeded Financial Targets
1Q23 Highlights: Exceeded Financial Targets 1Q23 Guidance Targets Actuals Commentary Total originations above high end of guidance driven by increased loan retention enabled by strong earnings: Q1 Total Originations $1.9B to $2.2B $2.3B ▪ Marketplace loan originations of $1.3B ▪ Retained loan origin
Slide 8: Strong Capital & Liquidity Position
Strong Capital & Liquidity Position STRONG DEPOSIT GROWTH MAJORITY INSURED DEPOSITS AMPLE CASH ON HAND 13% 86% $1.6B Total Deposits growth of $826M, $6.2B of $7.2B total deposits are insured, Cash represents 19% of Total Assets; provides up to $7.2B up from 78% at 12/31/22 compared to 52% 160% cover
Slide 9: Resiliency of Business Model Evident in 1Q23 QoQ Results
Resiliency of Business Model Evident in 1Q23 QoQ Results NET REVENUE NET INTEREST INCOME ENDING HFI LOAN PORTFOLIO 6% 8% 5% Net Revenue decline due to Net Interest income of $146.7M, Held for Investment (HFI) loan portfolio marketplace revenue (-23%), partially driven by average HFI loan portfolio o
Slide 10: Higher Net Interest Income Growth Partially Mitigates Non-Interest Income Pressure
Higher Net Interest Income Growth Partially Mitigates Non-Interest Income Pressure Total Net Revenue1 ($ in millions) $289.5 $262.7 $245.7 NON-INTEREST INCOME Declined QoQ on lower sold loans as marketplace loan $189.9 $127.5 $99.0 investors face rapidly increasing cost of capital and liquidity cons
Slide 11: Net Interest Income up 8% Sequentially as Consumer Loan Portfolio Balances Continue to Grow
Net Interest Income up 8% Sequentially as Consumer Loan Portfolio Balances Continue to Grow Average Held for Investment Balances1,2 Net Interest Income ($ in millions) ($ in millions) Consumer Loans $6,079 Commercial / PPP Loans $5,299 $836 Loans Held for Investment at Fair Value $309 $794 $800 $3,1
Slide 12: Ongoing Balance Sheet Remix to High-Yielding Consumer Loans Supports Strong Net Interest Margin
Ongoing Balance Sheet Remix to High-Yielding Consumer Loans Supports Strong Net Interest Margin Average Balances Average Yield 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Yield compression has ended Unsecured consumer loans $2,060 $2,692 $3,269 $3,826 $4,067 15.22% 14.19% 13.52% 13.16% 13.15%
Slide 13: Marketplace Revenue Impacted by Lower Marketplace Sold Loans
Marketplace Revenue Impacted by Lower Marketplace Sold Loans Quarterly Loan Originations1,2 Marketplace Sold Loans Quarterly Marketplace Revenue ($ in millions) Retained Loans ($ in millions) $3,217 $2,524 $2,288 $2,360 $1,824 $1,286 $180.0 $123.4 $95.6 $856 $1,002 $701 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23
Slide 14: Cost Reductions and Marketing Efficiency Helping to Offset Revenue Pressure
Cost Reductions and Marketing Efficiency Helping to Offset Revenue Pressure Efficiency Ratio Total Non-Interest Expense1 (Non-Interest Expense as a % of Net Revenue1) ($ in millions) Efficiency Ratio Non-Interest Expense Less Marketing 1Q22 2Q22 3Q22 4Q22 1Q23 Marketing % Revenue Compensation & Bene
Slide 15: Pre-Provision Net Revenue Increased QoQ from Continued Expense Management & Non-recurring Revenue Benefits
Pre-Provision Net Revenue Increased QoQ from Continued Expense Management & Non-recurring Revenue Benefits Net Income impacted by higher provision due to higher retained loans in the quarter and normalizing tax rate Pre-Provision Net Revenue (PPNR)1 Net Income ($ in millions) ($ in millions) $40.8 $
Slide 16: Held for Investment Portfolio Credit Performance In Line with Expectations
Held for Investment Portfolio Credit Performance In Line with Expectations Expected Personal Loans Lifetime Net Loss Rate* 2021 Vintage 2022 Vintage ▪ Lifetime Net Loss Rates translate to Annualized 8.2 - 8.7% 8.2 - 8.7% Net Credit Losses of approximately 5% Future 7.7 - 8.0% 7.7 - 8.0% Provision Es
Slide 17: Targeting High Marginal ROEs on Personal Loans in 2023
Targeting High Marginal ROEs on Personal Loans in 2023 2023 HFI Vintage Estimated Outlook Marginal Return on Equity Higher Loss Loss (Personal Loans) Estimate Estimate ▪ Attractive marginal ROE opportunity on personal loans; targeting levered PL Net Interest Margin1 10.1% 10.1% returns between 30% a
Slide 18: 2Q23 Guidance
2Q23 Guidance Outlook Assumptions ▪ Originations reflect continued focus on disciplined 2Q23 Guidance credit underwriting combined with impact of rising rates on marketplace demand Total Originations $1.9B to $2.1B ▪ Expect ongoing pressure in marketplace unit economics given current macroeconomic c
Slide 19: Reconciliation of GAAP to Non-GAAP Measures: Tangible Book Value Per Common Share
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. March 31, 2023 December 31, 2022 March 31, 2022
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 March 31, 2023 December 31, 2022 March 31, 2022 GAAP Net
Slide 21: LendingClub
-: LendingClub