Lendingclub Corporation · NYSE:LC
Lendingclub — Q3 2024 Earnings Presentation
22 slides from Lendingclub's earnings presentation, Oct 23, 2024
Slide 1: Third Quarter 2024 Results
Third Quarter 2024 Results October 23, 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 5+ $90+ Million Billion Best Overall Checking Best Checking Account Account Overall Average Customer Net Promoter Review2 Score (NPS)3 4.83 83 Out of 5 stars 1) Total members and originations based on lifetime volume acros
Slide 4: 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 2009 to August 2024, seasonally adjusted) (August 2009 to August 2024) 23% $1,350 $1,250 $1.36T Total outstand
Slide 5: Our Core Credit Card Refinance Use Case
Our Core Credit Card Refinance Use Case Historically High & LendingClub Delivers And Our Members Costly Credit Card Debt Compelling Value Love Us for It 47% of American households carry Members save on average over 30% Our Net Promoter Score (NPS) is over $1.3 trillion of revolving debt1,2 when they
Slide 6: Our Consumer Strategy: Building Lifetime Lending Relationships
Our Consumer Strategy: Building Lifetime Lending Relationships 1 2 3 Acquire new Drive member Offer additional members through engagement with products and our core personal compelling products, features to meet loans franchise tools, and features their evolving needs ▪ Competitive rates / terms ▪ M
Slide 7: DebtIQ + Tally: Powerful Member Engagement Platform
DebtIQ + Tally: Powerful Member Engagement Platform Highlighting Personal Loan Value Proposition LendingClub members have high incomes (over $100K) and high FICOs (700+ average), but also have high Will provide members with unmatched visibility credit card debt1 into their credit card debt and offer
Slide 8: 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; 5M members ✓ ✓ ✗ Capital-light, high-ROE marketplace earnings stream $61.6M Non-Interest Income ✓ ✓ ✗ Economics Profitable earnin
Slide 9: 3Q24 Highlights: Exceeded Financial Targets
3Q24 Highlights: Exceeded Financial Targets 2Q24 Guidance Targets Actuals Commentary2 Total originations of $1.9B consisting of approximately: Q3 Total ▪ $830M through the structured certificate program Originations $1.8B to $1.9B $1.9B ▪ $335M of marketplace whole loan sales ▪ $510M of Held for Inv
Slide 10: Ongoing Credit Outperformance vs. Competitive Set
Ongoing Credit Outperformance vs. Competitive Set LendingClub vs. Competitive Set: 30-day+ Delinquencies & Hardships at Month on Book 9 by Quarterly Vintage1,2 LendingClub Competitive Set3 FICO 660-719 FICO 720-779 FICO 780-850 7% 7% 7% 6% 5.9% 6% 6% 5% 4.7% 5% 5% 4.4% 4% 4% 4% 48% Lower 3.1% 3% 3%
Slide 11: Multiple Loan Disposition Channels Available to Optimize Earnings and Return on Capital
Multiple Loan Disposition Channels Available to Optimize In-Period Earnings and Return on Capital HIGHER Day-1 Contribution LOWER Day-1 Contribution LOWER lifetime value, capital usage, and credit risk HIGHER lifetime value, capital usage, and credit risk WHOLE LOAN STRUCTURED EXTENDED HELD FOR SALE
Slide 12: Continued Origination Growth
Continued Origination Growth Higher retention of loans and senior securities contributing to balance sheet growth Consumer Loan Originations1 ($ in millions) $1,913 $1,800 - $1,900 $1,813 Whole Loan Sales $1,630 $1,646 Whole Loan Sales 17% 15% $1,508 Whole Loan Sales Whole Loan Sales WholeLoan LoanS
Slide 13: Acquired $1.3B Seasoned Portfolio of Previously Sold LendingClub-Issued Loans
Acquired $1.3B Seasoned Portfolio of Previously Sold LendingClub-Issued Loans Whole Loan Portfolio (in $M) ▪ Strategically deployed excess capital to Loans Held for Investment at Fair Value generate attractive returns Loans Held for Sale ▪ High-confidence returns in a seasoned, high- Loans Held for
Slide 14: Revenue Increase Driven by Improved Loan Pricing and Balance Sheet Growth
Revenue Increase Driven by Improved Loan Pricing and Balance Sheet Growth Total Net Revenue ($ in millions) $200.8 $201.9 $187.2 NON-INTEREST INCOME Sequential growth primarily due to loan sale pricing improvement, $63.8 $61.6 $58.7 partially offset by a reduction in servicing revenue driven by loan
Slide 15: Growing Balance Sheet with Attractive Net Interest Margin
Growing Balance Sheet with Attractive Net Interest Margin Average Balances3 Average Yield3 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 Cash and Other Interest-Earning Assets1 $1,249 $1,191 $1,217 $976 $940 5.38% 5.47% 5.42% 5.40% 5.30% Securities Available for Sale at Fair Value $602 $1,198 $1
Slide 16: Disciplined Expense Management Driving Improved Efficiency Ratio
Disciplined Expense Management and Revenue Growth Driving Improved Efficiency Ratio Efficiency Ratio Total Non-Interest Expense1 (Non-Interest Expense as a % of Net Revenue) ($ in millions) Efficiency Ratio 3Q23 4Q23 1Q24 2Q24 3Q24 Non-Interest Expense Less Marketing Marketing as % of Net Revenue Co
Slide 17: Continued Profitability Driving Growth in Book Value and Tangible Book Value
Continued Profitability Driving 8% and 10% YoY Growth in Book Value and Tangible Book Value per Common Share, Respectively Pre-Provision Net Revenue (PPNR)1 Net Income ($ in millions) ($ in millions) $14.9 $14.5 $72.8 $65.5 $55.0 $5.0 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 YoY Diluted Provision for ($64.5) (
Slide 18: Held for Investment Personal Loan Credit Performance by Vintage
Held for Investment Personal Loan Credit Performance by Vintage 2023 Vintage Continues to Demonstrate Stability Expected Personal Loans Lifetime Net Loss Rate1,3 2022 Vintage 2023 Vintage LEGEND 8.91% 9.15% 8.5% - 8.8% 8.5% - 8.8% ▪ 2023 vintage incorporates higher level of 1.2% 0.4% - 0.7% 0.3% - 0
Slide 19: 4Q24 Guidance
4Q24 Guidance Outlook Context 4Q24 Guidance ▪ Origination range consistent with prior quarter, reflecting continued expansion of new initiatives Total offset by expected seasonality Originations $1.8B to $1.9B ▪ PPNR assumes revenue and expense increases as well as 50bps in additional rate cuts befo
Slide 20: 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 September 30, 2024 June 30, 2024 September 30, 2023 GAAP Net income $ 14,457 $ 14,903 $ 5,008 Less: Provision for credit losses (47,541) (35,561) (64,479) Less: Income tax expense (3,551)
Slide 21: 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. September 30, 2024 June 30, 2024 September 30, 2023 GAAP common equity $ 1,342,895 $ 1,287,945 $ 1,208,219 Less: Goodwill (75,717) (75,717) (75,717) Less: Intangible asse
Slide 22: LendingClub
-: LendingClub