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LendingClub Reports 93% Growth in Sequential Revenue in Q2; Raises FY Outlook

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Shares of LendingClub Corp. traded 55% higher after the company reported triple-digit growth in sequential net income due to increases in origination fees and its consumer loan portfolio.

After U.S. markets closed for trading yesterday afternoon, digital online financial services marketplace company LendingClub Corp. (LC:NYSE), parent company of LendingClub Bank, which connects borrowers and investors, announced financial results for the second quarter of 2021 ended June 30, 2021.

The firm's CEO Scott Sanborn commented, "Our first full quarter operating a digital bank was the most profitable quarter in LendingClub's history…This is the beginning of a dramatically enhanced earnings trajectory for the business. Our transformation is fueled by our competitive advantages, which include our 3.5 million-plus members, deep data capabilities, marketplace model as well as our more efficient operating platform. Our earnings are being bolstered by our bank, which is generating a new stream of recurring net interest income that is only beginning to contribute to our bottom line results."

LendingClub stated that it enjoyed strong sequential revenue growth in Q2/21 and is quickly returning to profitability having effectively executed on its strategic priorities.

The company reported that total sequential revenue in Q2/21 increased by 93% to $294.4 million, compared to $105.8 million in Q1/21 and $40.4 million in Q2/20. The firm indicated that the increase reflected strong growth in its marketplace revenue and a rise in net interest income from its consumer loan portfolio.

LendingClub advised that the marketplace segment registered an 86% sequential increase in revenue as loans sold through the marketplace doubled resulting in a 105% growth in origination fees and a 132% increase in gains from loan sales.

The company posted net interest income of $45.9 million in Q2/21, which it noted represents a 148% increase over the $18.5 million posted in Q1/21.

The firm stated that in Q2/21 the LendingClub Bank's loan portfolio (excluding PPP loans) grew by 27% to $795 million fuel by increases in consumer loans booked versus Q1/21. The company listed that total deposits also grew to $2.5 billion, which provided a solid base and source of funds for growing the bank's loan portfolio.

The company explained that as it disclosed previously it entered into a settlement agreement for consumer remediation with the Federal Trade Commission (FTC) and agreed to make an $18 million payment to resolve the matter, noting that it already had accrued the amount in prior reporting periods.

The company offered some forward guidance and stated that "it is raising its FY/21 revenue target by +45% with net income guidance of $25-35 million for H2/21."

The firm indicated that it expects that loan originations will be in the range of $2.8-3.0 billion in Q3/21 and will range from $9.8-10.2 billion for FY/21. The company added that for Q3/21, it expects total revenue of $215-230 million and estimates that FY/21 total revenue will come in around $750-780 million.

LendingClub Corp. is headquartered in San Francisco and is the parent company of LendingClub Bank, N.A. (Member FDIC). The company listed that is technology-driven marketplace banking platform allows borrows to pay less overall in borrowing costs and provides them with higher-interest deposit options for their realized savings. The company said that to date over 3 million members have "joined the Club" in order to achieve their own individual financial goals.

LendingClub started off the day with a market cap of around $1.6 billion with approximately 97.23 million shares outstanding and a short interest of about 4.7%. LC shares opened 37.5% higher today at $22.35 (+$6.10, +37.54%) over yesterday's $16.25 closing price and reached a new 52-week high price this morning of $25.70. The stock has traded today between $21.59 to $25.70 per share and is currently trading at $25.18 (+$8.93, +54.95%).


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