Lendingclub Corporation · NYSE:LC
Lendingclub — Q3 2023 Earnings Presentation
19 slides from Lendingclub's earnings presentation, Oct 25, 2023
Slide 1: Third Quarter 2023 Results
Third Quarter 2023 Results October 25, 2023
Slide 2: Disclaimer
Disclaimer Some of the statements in this presentation, including statements regarding our competitive advantages, macroeconomic and business outlook, participation in the SLCLC program, loan and financial performance, are “forward-looking statements.” The words “anticipate,” “believe,” “estimate,”
Slide 3: Award-Winning Member-Focused Digital Marketplace Bank
Award-Winning Member-Focused Digital Marketplace Bank Members1 Originations1 4.7+ $90+ Million Billion Best Overall Checking Account Best Checking Account Overall Average Customer Net Promoter Review2 Score (NPS)3 4.83 Out of 5 stars 73 1) Total members and originations based on lifetime volume acro
Slide 4: The Problem We're Solving
The Problem We’re Solving 43% of American households carry over LendingClub’s 4.7+ 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 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; August 2008 to August 2023, seasonally adjusted) (August 2008 to August 2023) 21.2% $1,350 $1,250 $1.3T Total outstan
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 $63.8M Non-Interest Income ✓ ✓ ✗ Economics Profitable earnings via lo
Slide 7: 3Q23 Highlights: Achieved Financial Targets
3Q23 Highlights: Achieved Financial Targets 3Q23 Guidance Targets Actuals Commentary Total originations of $1.5B within guidance range driven by approximately: Q3 Total § $500M of marketplace whole loans Originations $1.4B to $1.7B $1.5B § $450M for structured certificate program § $250M Held for sa
Slide 8: Strong Capital & Liquidity Position
Strong Capital & Liquidity Position MAJORITY INSURED DEPOSITS AMPLE CASH ON HAND BORROWING CAPACITY 86% $1.3B $3.8B $6.1B of $7.1B total deposits are Cash represents 15% of Total Assets; Includes loans and securities pledged insured compared to 57% average for provides 134% coverage of uninsured as
Slide 9: Revenue Driven by Loan Investor Mix Shift and Asset Mix
Revenue Driven by Loan Investor Mix Shift and Asset Mix Total Net Revenue1 ($ in millions) $304.9 $232.5 $200.8 NON-INTEREST INCOME $181.2 Sequential change due to lower price of loans sold through the $85.8 marketplace as loan investor mix has shifted toward a higher $63.8 concentration of asset ma
Slide 10: Leveraging Bank Capabilities to Evolve Issuance Mix and Transition Balance Sheet
Leveraging Bank Capabilities to Evolve Issuance Mix and Transition Balance Sheet Towards Lower Risk, High Yield Securities Average Balances Average Yield 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Cash & Other Interest-earning Assets1 $998 $1,206 $1,267 $1,545 $1,271 3.49% 4.31% 4.86% 5.26% 5
Slide 11: Disciplined Expense Management Supporting Efficiency Ratio
Disciplined Expense Management Supporting Efficiency Ratio Efficiency Ratio Total Non-Interest Expense1 (Non-Interest Expense as a % of Net Revenue) ($ in millions) Efficiency Ratio Non-Interest Expense Less Marketing Ma rketing as % of Net Revenue 3Q22 4Q22 1Q23 2Q23 3Q23 68.5% 64.0% 61.1% 65.0% 63
Slide 12: Continue to Deliver Profitability
Continue to Deliver Profitability Pre-Provision Net Revenue (PPNR)1 Net Income ($ in millions) ($ in millions) $118.7 $43.2 $81.4 $72.8 $10.1 $5.0 3Q22 2Q23 3Q23 3Q22 2Q23 3Q23 Diluted Provision for ($82.7) ($66.6) ($64.5) EPS $0.41 $0.09 $0.05 Credit Losses Book Value Per Common Share $10.67 $11.09
Slide 13: Held for Investment Credit Performance by Vintage
Held for Investment Credit Performance by Vintage Expected Personal Loans Lifetime Net Loss Rate* 2021 Vintage 2022 Vintage 8.5 - 9.0% § 2021 vintage maturing with expected 8.8% lifetime net loss rates reflecting post- Future 7.9 - 8.2% 8.1% 0.5% Provision Estimate 0.0 - 0.3% 0.9% - 1.4% pandemic ou
Slide 14: Targeting High Marginal ROEs for Balance Sheet Usage
Targeting High Marginal ROEs for Balance Sheet Usage 2023 HFI Vintage Estimated Outlook Structured Personal Loans Marginal Return on Equity Higher Loss Loss Certificates (Personal Loans) Estimate Estimate (SLCLC) § Attractive marginal ROE opportunity on personal loans Net Interest Margin1 9.0% 9.0%
Slide 15: Increasing Structured Certificate Originations on Balance Sheet
Increasing Structured Certificate Originations on Balance Sheet to Enhance Flexibility on Capital and Future Sales Consumer Originations $1,000 - $1,200 Held on Balance Sheet1 ($ in millions) $1,002 $878 $811 Structured Structured Certificates Structured Certificates 19% Certificates 60-70% 34% Reta
Slide 16: 4Q23 Guidance
4Q23 Guidance Outlook Context 4Q23 Guidance § Originations reflect strong demand for the structured certificates program Total Originations $1.5B to $1.7B § PPNR reflects: § Expense actions taken in Q3 § Removal of a combined ~$19.3M non-recurring benefit realized in Q3 Pre-Provision Net Revenue $35
Slide 17: 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. September 30, 2023 June 30, 2023 September 30,
Slide 18: 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 September 30, 2023 June 30, 2023 September 30, 2022 GAAP
Slide 19: LendingClub
= LendingClub