Lendingclub Corporation · NYSE:LC
Lendingclub — Q2 2024 Earnings Presentation
20 slides from Lendingclub's earnings presentation, Jul 30, 2024
Slide 1: Second Quarter 2024 Results
Second Quarter 2024 Results July 30, 2024
Slide 2: Disclaimer
Disclaimer Some of the statements in this presentation, including statements regarding our competitive advantages, loan and financial performance, business outlook, and demand for our loan programs, are “forward-looking statements.” The words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
Slide 3: Award-Winning Member-Focused Digital Marketplace Bank
Award-Winning Member-Focused Digital Marketplace Bank Members1 Originations1 4.9+ $90+ Million Billion Best Overall Checking Best Checking Account Account Overall Average Customer Net Promoter Review2 Score (NPS)3 4.83 80 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 4.9+ million Our direct-to-consumer digital $1.3 trillion of revolving debt, paying an members have already come to us marketplace bank features a estimated $133 billion in fees and to access lower-cost credit. While ve
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; May 2009 to May 2024, seasonally adjusted) (May 2009 to May 2024) $1,350 $1,250 $1.3T Total outstanding 23% 21% 21.5%
Slide 6: Strategically Positioned for Long-term Success
Strategically Positioned for Long-term Success 1 Traditional Fintechs Banks Ability to efficiently serve a broad range of customers Industry-leading marketing efficiency; 4.9M+ members ✓ ✓ ✗ Capital-light, high-ROE marketplace earnings stream $58.7M Non-Interest Income ✓ ✓ ✗ Economics Profitable ear
Slide 7: 2Q24 Highlights: Achieved Financial Targets
2Q24 Highlights: Achieved Financial Targets 2Q24 Guidance Targets Actuals Commentary2 Total originations of $1.8B consisting of approximately: Q2 Total ▪ $885M through the structured certificate program Originations $1.6B to $1.8B $1.8B ▪ $270M of marketplace whole loan sales ▪ $335M of Held for Inv
Slide 8: Ongoing Credit Outperformance vs. Competitive Set
Ongoing Credit Outperformance vs. Competitive Set LendingClub vs. Competitive Set: 30-day+ Delinquencies & Hardships at Month on Book 9 by Quarterly Vintage1,2 LendingClub Competitive Set3 FICO 660-719 FICO 720-779 FICO 780-850 7% 7% 7% 6% 5.6% 5.9% 6% 6% 4.7% 5% 5% 5% 45% 4% 4% Lower 4% 3.1% 3.5% 2
Slide 9: Multiple Loan Disposition Channels Available to Optimize In-Period Earnings and Return on Capital
Multiple Loan Disposition Channels Available to Optimize In-Period Earnings and Return on Capital HIGHER Day-1 Contribution LOWER Day-1 Contribution LOWER lifetime value, capital usage, and credit risk HIGHER lifetime value, capital usage, and credit risk WHOLE LOAN STRUCTURED EXTENDED HELD FOR SALE
Slide 10: Continued Origination Growth
Continued Origination Growth Higher amount of loans and senior securities growing the balance sheet Consumer Loan Originations1 ($ in millions) $2,011 $1,813 $1,800 - $1,900 $1,630 $1,646 Whole Loan Sales $1,508 15% Whole Loan Sales Whole Loan Sales Whole Loan Sales 20% 58% 22% Whole Loan Sales + Wh
Slide 11: Revenue Growth Driven Primarily by Net Interest Income
Revenue Growth Driven Primarily by Net Interest Income Total Net Revenue ($ in millions) $232.5 $180.7 $187.2 $85.8 NON-INTEREST INCOME Sequential growth primarily due to higher marketplace $57.8 $58.7 loans sold and loan sale pricing improvement, partially offset by the expected fair value adjustme
Slide 12: Growing Balance Sheet with Stable Net Interest Margin
Growing Balance Sheet with Stable Net Interest Margin Average Balances3 Average Yield3 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 Cash and Other Interest-earning Assets1 $1,513 $1,249 $1,191 $1,217 $976 5.06% 5.38% 5.47% 5.42% 5.40% Growing balance sheet via low-risk Securities Available for
Slide 13: Disciplined Expense Management
Disciplined Expense Management Efficiency Ratio Total Non-Interest Expense1 (Non-Interest Expense as a % of Net Revenue) ($ in millions) Efficiency Ratio 2Q23 3Q23 4Q23 1Q24 2Q24 Non-Interest Expense Less Marketing Marketing as % of Net Revenue 73.2% 70.0% 70.6% Compensation & Benefits $71.6 $58.5 $
Slide 14: Continued Profitability Driving TBV per Common Share
Continued Profitability Driving TBV per Common Share Pre-Provision Net Revenue (PPNR)1 Net Income ($ in millions) ($ in millions) $14.9 $81.4 $12.3 $10.1 $48.5 $55.0 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 Diluted Provision for ($66.6) ($31.9) ($35.6) EPS $0.09 $0.11 $0.13 Credit Losses Book Value Per Income
Slide 15: Held for Investment Personal Loan Credit Performance by Vintage
Held for Investment Personal Loan Credit Performance by Vintage Expected lifetime net loss rates stable to improving compared to prior quarter Expected Personal Loans Lifetime Net Loss Rate1,3 2021 Vintage 2022 Vintage 2023 Vintage LEGEND ▪ 2023 vintage incorporates higher 8.9% 8.9% 8.9% 8.5% - 8.8%
Slide 16: 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 $0.5 Metric ($M) Year 1 Year 2 Year 3 Year 4+ Total $100 Average age of $ Ending UPB 65.3 31.8 10.6 0.0 na PL HFI Portfolio (as of 6/30/24) $ Provisio
Slide 17: 3Q24 Guidance
3Q24 Guidance Outlook Context 3Q24 Guidance ▪ Increasing origination range from prior quarter reflecting continued expansion of new initiatives Total Originations $1.8B to $1.9B ▪ PPNR assumes current rate environment continues to evolve towards a cut in September as well as increasing marketing and
Slide 18: Reconciliation of GAAP to Non-GAAP Measures: Pre-Provision Net Revenue
Reconciliation of GAAP to Non-GAAP Measures: Pre-Provision Net Revenue1 For the three months ended In thousands June 30, 2024 March 31, 2024 June 30, 2023 GAAP Net income $ 14,903 $ 12,250 $ 10,110 Less: Provision for credit losses (35,561) (31,927) (66,595) Less: Income tax expense (4,519) (4,278)
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 Share1 In thousands, except share and per share data. June 30, 2024 March 31, 2024 June 30, 2023 GAAP common equity $ 1,287,945 $ 1,266,286 $ 1,205,523 Less: Goodwill (75,717) (75,717) (75,717) Less: Intangible assets (10,29
Slide 20: LendingClub
-: LendingClub