III LendingClub EXHIBIT 99.1 LendingClub Reports Second Quarter 2024 Results 10% Sequential Originations Growth Strong Balance Sheet Growth with Stable Net Interest Margin Drives Increase in Revenue SAN FRANCISCO – July 30, 2024 – LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the second quarter ended June 30, 2024. "Our second quarter results mark an inflection point, with our business calibrated ...

10% Sequential Originations GrowthStrong Balance Sheet Growth with Stable Net Interest Margin Drives Increase in RevenueSAN FRANCISCO, July 30, 2024 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, today announced financial results for the second quarter ended June 30, 2024."Our second quarter results mark an inflection point, with our business calibrated to the current rate environment and positioned to accelerate as con ...

SAN FRANCISCO, July 11, 2024 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading digital marketplace bank, announced that it will report earnings for the second quarter 2024 after the market closes on Tuesday, July 30, 2024. LendingClub will host a conference call to discuss the second quarter 2024 financial results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on the same day. Submission of Conference Call Questions In addition to questions ask ...

LendingClub has sold more than $3 billion in loans through its Structured LendingClub Loan Certificate program since the launch of that program in April 2023.In this program, LendingClub retains the senior note and sells the residual certificate on a pool of loans to a marketplace investor at a predetermined price, the company said in a Monday (June 17) press release.“Our structured certificates program is gaining strong momentum among our loan investors because they recognize the value of consumer credit a ...

SAN FRANCISCO, June 17, 2024 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank ("LendingClub"), America's leading digital marketplace bank, today announced that it has surpassed $3 billion in loans sold through its Structured LendingClub Loan Certificates program, which launched in April 2023."Our structured certificates program is gaining strong momentum among our loan investors because they recognize the value of consumer credit as an asset class, the quality of ou ...

In the current financial environment, those who want to reduce risks and maximize profits must be able to recognize good possibilities among market swings. These three exceptional businesses each provide unique opportunities for portfolio development and stability.The first shows a notable rise in the amount of ore extracted and the daily mining rates, indicating amazing operational efficiency. These operational enhancements demonstrate the company’s ability to scale production effectively, which is essenti ...

Core Insights - LendingClub Corporation, the parent company of LendingClub Bank, is participating in a fireside chat at the TD Financial Services & Fintech Summit on June 7, 2024 [1] - The event will feature CEO Scott Sanborn and CFO Drew LaBenne discussing the company's strategies and performance [1] Company Overview - LendingClub Corporation (NYSE: LC) is recognized as America's leading digital marketplace bank, providing a wide range of financial products and services [4] - The bank utilizes advanced credit decisioning and machine-learning models based on over 150 billion cells of data and more than $90 billion in loans to enhance access to credit [4] - Since its inception in 2007, LendingClub has attracted over 4.9 million members aiming to achieve their financial goals [4]

Group 1: Company Performance and Growth - Talkspace (TALK) achieved consolidated sales of $45.4 million in Q1 2024, reflecting a 36% year-over-year growth, with a notable 92% increase in the payer category revenue [3][4] - LendingClub (LC) reported a net income increase to $12.3 million in Q1 2024, up from $10.2 million in Q4 2023, with diluted EPS rising to $0.11 [6] - SilverCrest (SILV) sold 10.25 million ounces of silver equivalent in 2023, surpassing sales projections, and achieved operating margins of 61% [7][8] Group 2: Financial Management and Cost Control - Talkspace increased its gross profit by 30% year-over-year, demonstrating effective management of revenue mix despite lower gross margins in the payer category [4] - LendingClub's provision for credit losses decreased from $41.9 million to $31.9 million, indicating improved credit quality and efficient risk management [5] - SilverCrest's average cost for sustaining expenses was $12.58 per ounce, which was below the lower end of its cost guidance range, showcasing effective cost control [7] Group 3: Strategic Initiatives - Talkspace focused on streamlining its cost structure and boosting revenue growth, achieving its first profitable quarter with an adjusted EBITDA of $800K [3] - LendingClub expects a decrease in dollar net charge-offs as its loan portfolio continues to season, enhancing profitability and risk-adjusted returns [5] - SilverCrest strategically repaid $50 million in loans, achieving debt-free status and allocating $37.2 million for projects including exploration and share buybacks [7]

[Glossary](index=3&type=section&id=Glossary) The glossary defines common acronyms and terms used in LendingClub Corporation's financial reporting - The glossary provides definitions for common acronyms and terms used in LendingClub Corporation's financial reporting, such as ACL (Allowance for Credit Losses), AUM (Assets Under Management), CECL (Current Expected Credit Losses), EPS (Earnings Per Share), HFI (Held for Investment), HFS (Held for Sale), and VIE (Variable Interest Entity)[7](index=7&type=chunk)[9](index=9&type=chunk) [Forward-looking Statements](index=5&type=section&id=Forward-looking%20Statements) This section outlines forward-looking statements, highlighting inherent risks and uncertainties that could impact actual financial results - This report contains forward-looking statements regarding future operations, financial position, revenue, costs, and market growth, identifiable by words like 'anticipate,' 'expect,' and 'will.' These statements are subject to risks and uncertainties, including the impact of interest rates, economic climate, regulatory compliance, and investor demand, which could cause actual results to differ materially[12](index=12&type=chunk)[13](index=13&type=chunk)[15](index=15&type=chunk) [PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents LendingClub Corporation's comprehensive financial data, including statements, notes, and management's analysis of operations [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents LendingClub Corporation's condensed consolidated financial statements for Q1 2024, with detailed notes on policies and valuations [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and equity as of March 31, 2024, and December 31, 2023 Table: Condensed Consolidated Balance Sheets | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:------------------------------------------------------------------------------|:------------------------------|:---------------------------------| | Total cash and cash equivalents | $1,066,279 | $1,252,504 | | Securities available for sale at fair value | $2,228,500 | $1,620,262 | | Loans held for sale at fair value | $550,415 | $407,773 | | Loans and leases held for investment, net | $4,246,666 | $4,539,915 | | Total assets | $9,244,828 | $8,827,463 | | Total deposits | $7,521,655 | $7,333,486 | | Total liabilities | $7,978,542 | $7,575,641 | | Total equity | $1,266,286 | $1,251,822 | - Total assets increased by **$417.4 million (5%)** from December 31, 2023, to March 31, 2024, primarily driven by growth in securities available for sale and loans held for sale. Total liabilities also increased, mainly due to higher deposits and borrowings, while total equity saw a modest increase[18](index=18&type=chunk) [Condensed Consolidated Statements of Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This statement details the company's revenues, expenses, and net income for the three months ended March 31, 2024, and 2023 Table: Condensed Consolidated Statements of Income | Metric | Three Months Ended March 31, 2024 (in Thousands) | Three Months Ended March 31, 2023 (in Thousands) | |:------------------------------------------|:-------------------------------------------------|:-------------------------------------------------| | Marketplace revenue | $55,891 | $95,634 | | Total non-interest income | $57,800 | $98,990 | | Total interest income | $207,351 | $202,413 | | Total interest expense | $84,463 | $55,709 | | Net interest income | $122,888 | $146,704 | | Total net revenue | $180,688 | $245,694 | | Provision for credit losses | $31,927 | $70,584 | | Total non-interest expense | $132,233 | $157,308 | | Net income | $12,250 | $13,666 | | Basic EPS | $0.11 | $0.13 | | Diluted EPS | $0.11 | $0.13 | - Net income decreased by **10% year-over-year to $12.25 million**, with diluted EPS at **$0.11**. Total net revenue declined by **26% YoY**, primarily due to a **42% decrease in marketplace revenue** and a **16% decrease in net interest income**. However, provision for credit losses decreased by **55% YoY**, and total non-interest expense decreased by **16% YoY**[21](index=21&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement presents net income and other comprehensive income components, reflecting changes in equity not from owner transactions Table: Condensed Consolidated Statements of Comprehensive Income | Metric | Three Months Ended March 31, 2024 (in Thousands) | Three Months Ended March 31, 2023 (in Thousands) | |:--------------------------------------------------------------------|:-------------------------------------------------|:-------------------------------------------------| | Net income | $12,250 | $13,666 | | Change in net unrealized gain (loss) on securities available for sale | $(9,430) | $5,599 | | Other comprehensive income (loss), net of tax | $(6,893) | $4,079 | | Total comprehensive income | $5,357 | $17,745 | - Total comprehensive income significantly decreased to **$5.36 million** in Q1 2024 from **$17.75 million** in Q1 2023, primarily driven by a net unrealized loss of **$9.43 million** on available-for-sale securities in the current quarter, compared to a gain of **$5.60 million** in the prior year[24](index=24&type=chunk) [Condensed Consolidated Statements of Changes in Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) This statement outlines the changes in each component of equity over the reporting period, including net income and other transactions Table: Condensed Consolidated Statements of Changes in Equity | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:--------------------------------------------------------------------|:------------------------------|:---------------------------------| | Common Shares Outstanding | 111,120,415 | 110,410,602 | | Common Stock Amount | $1,111 | $1,104 | | Additional Paid-in Capital | $1,678,928 | $1,669,828 | | Accumulated Other Comprehensive Loss | $(37,197) | $(30,304) | | Accumulated Deficit | $(376,556) | $(388,806) | | Total Equity | $1,266,286 | $1,251,822 | - Total equity increased by **$14.46 million** from December 31, 2023, to March 31, 2024, primarily due to net income of **$12.25 million** and stock-based compensation of **$13.60 million**, partially offset by a net unrealized loss on available-for-sale securities of **$6.89 million**[27](index=27&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities for the reporting periods Table: Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2024 (in Thousands) | Three Months Ended March 31, 2023 (in Thousands) | |:--------------------------------------------------|:-------------------------------------------------|:-------------------------------------------------| | Net cash (used for) provided by operating activities | $(846,516) | $114,492 | | Net cash provided by (used for) investing activities | $216,882 | $(336,414) | | Net cash provided by financing activities | $437,846 | $781,777 | | Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | $(191,788) | $559,855 | | Cash, Cash Equivalents and Restricted Cash, End of Period | $1,102,360 | $1,684,339 | - The company experienced a net decrease in cash, cash equivalents, and restricted cash of **$191.79 million** in Q1 2024, a significant shift from a net increase of **$559.86 million** in Q1 2023. This was primarily driven by a substantial net cash outflow from operating activities (**$846.52 million**) in Q1 2024, compared to an inflow in Q1 2023, despite increased cash from investing and financing activities[31](index=31&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the accounting policies, significant estimates, and specific financial statement line items [Note 1. Summary of Significant Accounting Policies](index=13&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's operational model, GAAP conformity, and reclassification of certain financial statement items - LendingClub operates as a digital marketplace bank through its wholly-owned subsidiary, LC Bank, leveraging technology and data science. The condensed consolidated financial statements are prepared in conformity with GAAP, involving management estimates and assumptions[37](index=37&type=chunk)[38](index=38&type=chunk) - During Q1 2024, the Company reclassified certain balance sheet, income statement, and cash flow items for clearer presentation, such as combining 'Retail and certificate loans held for investment at fair value' into 'Loans held for investment at fair value' and 'Retail notes and certificates at fair value' into 'Borrowings'[39](index=39&type=chunk) - The Company is evaluating the impact of new accounting standards ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Taxes), effective for annual periods beginning after December 15, 2023, and December 15, 2024, respectively, but does not expect them to be material[44](index=44&type=chunk)[45](index=45&type=chunk) [Note 2. Marketplace Revenue](index=14&type=section&id=Note%202.%20Marketplace%20Revenue) This note details the components of marketplace revenue, including origination fees, servicing fees, and fair value adjustments - Marketplace revenue comprises origination fees, servicing fees, gain on sales of loans, and net fair value adjustments. Origination fees are from originating HFS unsecured personal loans, servicing fees compensate for managing payments and collections, gain on sales of loans reflects the difference between contractual and market servicing rates, and net fair value adjustments are recorded on loans at fair value[46](index=46&type=chunk)[47](index=47&type=chunk) Table: Marketplace Revenue Components | Component | Three Months Ended March 31, 2024 (in Thousands) | Three Months Ended March 31, 2023 (in Thousands) | |:-------------------------|:-------------------------------------------------|:-------------------------------------------------| | Origination fees | $70,079 | $70,543 | | Servicing fees | $19,592 | $26,380 | | Gain on sales of loans | $10,909 | $14,125 | | Net fair value adjustments | $(44,689) | $(15,414) | | Total marketplace revenue | $55,891 | $95,634 | - Total marketplace revenue decreased by **42% year-over-year**, primarily due to a significant increase in net fair value adjustments (from a loss of **$15.41 million to $44.69 million**) and a decrease in servicing fees and gain on sales of loans[50](index=50&type=chunk) [Note 3. Earnings Per Share](index=15&type=section&id=Note%203.%20Earnings%20Per%20Share) This note provides a breakdown of basic and diluted earnings per share calculations for the reporting periods Table: Earnings Per Share | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |:-------------------------------------|:----------------------------------|:----------------------------------|\ | Net income attributable to stockholders | $12,250 | $13,666 | | Weighted-average common shares – Basic | 110,685,796 | 106,912,139 | | Basic EPS | $0.11 | $0.13 | | Weighted-average common shares – Diluted | 110,687,380 | 106,917,770 | | Diluted EPS | $0.11 | $0.13 | - Both basic and diluted EPS decreased to **$0.11** in Q1 2024 from **$0.13** in Q1 2023, reflecting a decrease in net income attributable to stockholders despite an increase in weighted-average common shares outstanding[51](index=51&type=chunk) [Note 4. Securities Available for Sale](index=16&type=section&id=Note%204.%20Securities%20Available%20for%20Sale) This note details the amortized cost, fair value, and unrealized gains/losses of available-for-sale securities Table: Securities Available for Sale | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:--------------------------------------------------------------------|:------------------------------|:---------------------------------| | Amortized Cost | $2,284,550 | $1,663,990 | | Gross Unrealized Gains | $10,478 | $13,896 | | Gross Unrealized Losses | $(63,636) | $(57,624) | | Allowance for Credit Losses | $(2,892) | $— | | Fair Value | $2,228,500 | $1,620,262 | - The fair value of AFS securities increased by **$608.24 million** from December 31, 2023, to March 31, 2024, primarily driven by an increase in senior asset-backed securities related to Structured Program transactions. Gross unrealized losses increased to **$63.64 million**, mainly due to interest rate increases, and an allowance for credit losses of **$2.89 million** was recorded for other asset-backed securities[55](index=55&type=chunk)[56](index=56&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk) Table: Securities Available for Sale by Maturity | Maturity Period (March 31, 2024) | Amortized Cost (in Thousands) | Fair Value (in Thousands) | Weighted-average Yield | |:---------------------------------|:------------------------------|:--------------------------|:-----------------------| | Due after 1 year through 5 years | $1,875,144 | $1,881,649 | 8.07% | | Due after 5 years through 10 years | $41,202 | $38,636 | 4.23% | | Due after 10 years | $368,204 | $308,215 | 2.83% | | Total | $2,284,550 | $2,228,500 | 7.02% | [Note 5. Loans and Leases Held for Investment at Amortized Cost, Net of Allowance For Loan and Lease Losses](index=19&type=section&id=Note%205.%20Loans%20and%20Leases%20Held%20for%20Investment%20at%20Amortized%20Cost%2C%20Net%20of%20Allowance%20For%20Loan%20and%20Lease%20Losses) This note provides details on the company's loan and lease portfolio held for investment, including allowance for credit losses Table: Loans and Leases Held for Investment | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:--------------------------------------------------------------------|:------------------------------|:---------------------------------| | Total loans and leases held for investment | $4,505,816 | $4,850,302 | | Allowance for loan and lease losses (ALLL) | $(259,150) | $(310,387) | | Loans and leases held for investment, net | $4,246,666 | $4,539,915 | | Gross allowance for loan and lease losses | $311,794 | $355,773 | | ALLL ratio (Total) | 5.8% | 6.4% | | Gross ALLL ratio (Total) | 6.9% | 7.3% | - Loans and leases held for investment (HFI) at amortized cost, net, decreased by **$293.25 million (6.5%)** from December 31, 2023, to March 31, 2024. The Allowance for Loan and Lease Losses (ALLL) decreased by **$51.24 million**, with the ALLL ratio declining from **6.4% to 5.8%**[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[73](index=73&type=chunk) - Loan modifications for unsecured personal loans increased significantly to **$22.20 million** in Q1 2024 from **$5.44 million** in Q1 2023, with short-term payment reductions being the primary modification type. Nonaccrual loans and leases held for investment increased slightly to **$45.31 million (1.0% of total HFI)** from **$44.38 million (0.9%)** at year-end 2023[93](index=93&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) [Note 6. Securitizations and Variable Interest Entities](index=28&type=section&id=Note%206.%20Securitizations%20and%20Variable%20Interest%20Entities) This note discusses the company's involvement with securitizations and variable interest entities, including loss exposure Table: Securitizations and Variable Interest Entities | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:--------------------------------------|:------------------------------|:---------------------------------| | Total assets (Consolidated VIEs) | $3,408 | $4,438 | | Total assets (Unconsolidated VIEs) | $1,909,169 | $1,281,327 | | Total liabilities (Consolidated VIEs) | $1,896 | $2,892 | | Total liabilities (Unconsolidated VIEs) | $4,049 | $3,301 | | Total net assets (maximum loss exposure) | $1,906,632 | $1,279,572 | - The Company's maximum loss exposure from Variable Interest Entities (VIEs) increased to **$1.91 billion** as of March 31, 2024, from **$1.28 billion** at December 31, 2023. This increase is primarily driven by a significant rise in unconsolidated VIE assets, particularly securities available for sale[107](index=107&type=chunk)[108](index=108&type=chunk) - Beginning in Q2 2023, the Company resumed Structured Program transactions with newly launched Structured Certificates, retaining senior securities and selling residual certificates. As of March 31, 2024, the aggregate unpaid principal balance held by unconsolidated VIEs was **$2.2 billion**, with **$14.6 million** attributable to off-balance sheet loans 30 days or more past due[110](index=110&type=chunk)[111](index=111&type=chunk) [Note 7. Fair Value Measurements](index=30&type=section&id=Note%207.%20Fair%20Value%20Measurements) This note details assets and liabilities measured at fair value, categorized by valuation input levels, and sensitivity analysis Table: Assets Measured at Fair Value | Asset Category | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:----------------------------------------------------------------------------|:------------------------------|:---------------------------------| | Loans held for sale at fair value (Level 3) | $550,415 | $407,773 | | Loans held for investment at fair value (Level 3) | $427,396 | $272,678 | | Securities available for sale (Level 2) | $359,375 | $370,466 | | Securities available for sale (Level 3) | $1,869,125 | $1,249,796 | | Servicing assets (Level 3) | $71,830 | $77,680 | | Total assets measured at fair value | $3,282,297 | $2,381,918 | - The Company's total assets measured at fair value increased by **$900.38 million** from December 31, 2023, to March 31, 2024, primarily driven by a significant increase in Level 3 securities available for sale and loans held for sale. Key unobservable inputs for Level 3 assets include discount rates, annualized net charge-off rates, and annualized prepayment rates, where an increase in any of these inputs would decrease fair value[116](index=116&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) Table: Fair Value Sensitivity Analysis | Fair Value Sensitivity (March 31, 2024) | Loans HFS (in Thousands) | Loans HFI (in Thousands) | Senior ABS (in Thousands) | Other ABS (in Thousands) | Servicing Assets (in Thousands) | |:----------------------------------------|:-------------------------|:-------------------------|:--------------------------|:-------------------------|:--------------------------------| | 100 bps increase in Discount rate | $(7,305) | $(3,201) | $(26,006) | $(1,300) | $(625) | | 10% increase in Net charge-off rate | $(6,628) | $(3,275) | N/A | $(1,169) | $(755) | | 10% increase in Prepayment rate | $(1,339) | $(1,343) | N/A | $(236) | $(1,459) | [Note 8. Derivative Instruments and Hedging Activities](index=40&type=section&id=Note%208.%20Derivative%20Instruments%20and%20Hedging%20Activities) This note describes the company's use of derivative instruments for managing credit loss and interest rate risks Table: Derivative Instruments | Derivative Type | Notional (March 31, 2024, in Thousands) | Gross Derivative Liability Fair Value (March 31, 2024, in Thousands) | |:----------------|:----------------------------------------|:---------------------------------------------------------------------| | Credit derivatives | $8,748 | $(7,786) | | Interest rate swaps | $1,500,000 | $(195) | - The Company uses credit derivatives to manage loan sale-related credit loss exposure and interest rate swaps for fair value hedging of fixed-rate loans against SOFR changes. In Q1 2024, a **$1.4 million loss** was recognized from credit derivatives, while fair value hedges generated a total gain of **$1.05 million**[164](index=164&type=chunk)[165](index=165&type=chunk)[169](index=169&type=chunk) [Note 9. Property, Equipment and Software, net](index=41&type=section&id=Note%209.%20Property%2C%20Equipment%20and%20Software%2C%20net) This note details the net carrying value of property, equipment, and software, including depreciation and amortization Table: Property, Equipment and Software, net | Component | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:----------------------------------------|:------------------------------|:---------------------------------| | Total property, equipment and software | $280,588 | $267,523 | | Accumulated depreciation and amortization | $(116,956) | $(106,006) | | Total property, equipment and software, net | $163,632 | $161,517 | - Net property, equipment, and software increased slightly to **$163.63 million** as of March 31, 2024, from **$161.52 million** at year-end 2023. Software, including internally-developed and customized purchased software, constitutes the largest component. Depreciation and amortization expense for Q1 2024 was **$11.7 million**, up from **$11.2 million** in Q1 2023[172](index=172&type=chunk)[173](index=173&type=chunk) [Note 10. Goodwill and Intangible Assets](index=42&type=section&id=Note%2010.%20Goodwill%20and%20Intangible%20Assets) This note provides information on goodwill and intangible assets, including their carrying values and amortization expenses - Goodwill remained constant at **$75.7 million** as of March 31, 2024, with no impairment expense recorded in Q1 2024 or Q1 2023. Intangible assets, primarily customer relationships, had a net carrying value of **$11.17 million**, amortized over ten to fourteen years, with **$1.0 million** in amortization expense for Q1 2024[176](index=176&type=chunk)[178](index=178&type=chunk) Table: Goodwill and Intangible Assets | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:---------------------------|:------------------------------|:---------------------------------| | Goodwill | $75,717 | $75,717 | | Intangible assets, net | $11,165 | $12,135 | | Amortization expense (Q1) | $1,000 | $1,100 | [Note 11. Other Assets](index=43&type=section&id=Note%2011.%20Other%20Assets) This note details the composition of other assets, including deferred tax assets, servicing assets, and equity investments Table: Other Assets | Component | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:-------------------------------|:------------------------------|:---------------------------------| | Deferred tax assets, net | $149,669 | $151,411 | | Servicing assets | $72,440 | $78,401 | | Nonmarketable equity investments | $55,047 | $42,891 | | Accrued interest receivable | $38,153 | $35,793 | | Operating lease assets | $24,824 | $26,611 | | Intangible assets, net | $11,165 | $12,135 | | Other | $98,844 | $108,211 | | Total other assets | $450,142 | $455,453 | - Total other assets decreased slightly to **$450.14 million** as of March 31, 2024, from **$455.45 million** at year-end 2023. Deferred tax assets remain the largest component, while nonmarketable equity investments saw an increase[182](index=182&type=chunk) [Note 12. Deposits](index=43&type=section&id=Note%2012.%20Deposits) This note provides a breakdown of deposit types, including interest-bearing and noninterest-bearing accounts, and their maturities Table: Deposits by Type | Deposit Type | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:----------------------------------|:------------------------------|:---------------------------------| | Savings and money market accounts | $4,695,523 | $4,349,239 | | Certificates of deposit | $1,544,037 | $1,714,889 | | Checking accounts | $974,469 | $937,552 | | Total interest-bearing deposits | $7,214,029 | $7,001,680 | | Noninterest-bearing deposits | $307,626 | $331,806 | | Total deposits | $7,521,655 | $7,333,486 | - Total deposits increased by **$188.17 million (2.6%)** from December 31, 2023, to March 31, 2024, primarily driven by growth in savings and money market accounts, partially offset by a decrease in certificates of deposit and noninterest-bearing deposits[183](index=183&type=chunk) Table: Certificate of Deposit Maturity | Certificate of Deposit Maturity (March 31, 2024) | Amount (in Thousands) | |:-------------------------------------------------|:----------------------| | 2024 | $1,248,282 | | 2025 | $278,179 | | 2026 | $3,544 | | 2027 | $10,099 | | 2028 | $2,019 | | Thereafter | $1,914 | | Total certificates of deposit | $1,544,037 | [Note 13. Borrowings](index=44&type=section&id=Note%2013.%20Borrowings) This note details the company's borrowing sources, pledged collateral, available capacity, and long-term debt components Table: Borrowing Capacity | Borrowing Source (March 31, 2024) | Pledged Collateral (in Thousands) | Available Borrowing Capacity (in Thousands) | |:----------------------------------|:----------------------------------|:--------------------------------------------| | FRB Discount Window | $3,028,916 | $2,816,501 | | FHLB of Des Moines | $828,432 | $661,337 | | Total | $3,857,348 | $3,477,838 | - The Company's total available borrowing capacity decreased to **$3.48 billion** as of March 31, 2024, from **$4.35 billion** at December 31, 2023, primarily due to a **$250 million** short-term borrowing from the FHLB of Des Moines in March 2024, which was repaid in April[188](index=188&type=chunk)[189](index=189&type=chunk) Table: Long-term Debt Components | Long-term Debt Component (March 31, 2024) | Aggregate Debt Outstanding (in Thousands) | |:------------------------------------------|:------------------------------------------| | Advances from PPPLF | $3,907 | | Retail notes and certificates | $7,003 | | Payable on Structured Program borrowings | $1,640 | [Note 14. Other Liabilities](index=45&type=section&id=Note%2014.%20Other%20Liabilities) This note outlines the various components of other liabilities, including accounts payable, lease liabilities, and amounts payable to investors Table: Other Liabilities | Component | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:--------------------------------------|:------------------------------|:---------------------------------| | Accounts payable and accrued expenses | $46,306 | $54,619 | | Operating lease liabilities | $35,138 | $37,869 | | Payable to investors | $31,855 | $36,823 | | Other | $81,038 | $93,490 | | Total other liabilities | $194,337 | $222,801 | - Total other liabilities decreased to **$194.34 million** as of March 31, 2024, from **$222.80 million** at year-end 2023, with reductions across accounts payable, operating lease liabilities, and amounts payable to investors[193](index=193&type=chunk) [Note 15. Employee Incentive Plans](index=45&type=section&id=Note%2015.%20Employee%20Incentive%20Plans) This note details stock-based compensation expense and unrecognized compensation costs related to employee incentive plans Table: Employee Incentive Plan Metrics | Metric | Three Months Ended March 31, 2024 (in Thousands) | Three Months Ended March 31, 2023 (in Thousands) | |:-------------------------------------------|:-------------------------------------------------|:-------------------------------------------------| | Stock-based compensation expense, net | $11,544 | $11,888 | | Unrecognized compensation cost (RSUs) | $76,700 | N/A | | Unrecognized compensation cost (PBRSUs) | $8,300 | N/A | - Net stock-based compensation expense for Q1 2024 was **$11.54 million**, slightly down from **$11.89 million** in Q1 2023. As of March 31, 2024, there was **$76.7 million** of unrecognized compensation cost for RSUs (expected over **2.1 years**) and **$8.3 million** for PBRSUs (expected over **1.8 years**)[196](index=196&type=chunk)[200](index=200&type=chunk)[203](index=203&type=chunk) [Note 16. Income Taxes](index=47&type=section&id=Note%2016.%20Income%20Taxes) This note provides details on income tax expense, effective tax rates, and factors influencing tax rate differences Table: Income Tax Metrics | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |:--------------------------------------------|:----------------------------------|:----------------------------------| | Income tax expense | $4,278 | $4,136 | | Effective tax rate | 25.9% | 23.2% | | Deferred tax assets, net of valuation allowance | $149,669 | $151,411 | | Valuation allowance | $46,108 | $46,108 | - Income tax expense for Q1 2024 was **$4.28 million**, with an effective tax rate of **25.9%**, up from **23.2%** in Q1 2023. The effective tax rate differs from the statutory rate due to tax credits and non-deductible executive compensation[206](index=206&type=chunk)[207](index=207&type=chunk) - The Company maintained a valuation allowance of **$46.11 million** related to state net operating loss and tax credit carryforwards[206](index=206&type=chunk)[207](index=207&type=chunk) [Note 17. Leases](index=47&type=section&id=Note%2017.%20Leases) This note details the company's lessor and lessee arrangements, including assets, liabilities, and associated costs Table: Lease Metrics | Lease Type / Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:--------------------------------------------------|:------------------------------|:---------------------------------| | Equipment Finance assets (Lessor) | $101,902 | $110,992 | | Operating lease assets (Lessee) | $24,824 | $26,611 | | Operating lease liabilities (Lessee) | $35,138 | $37,869 | | Net lease costs (Q1) | $2,600 | $2,900 | | Weighted-average remaining lease term (in years) | 3.51 | 3.72 | | Weighted-average discount rate | 5.02% | 5.04% | - The Company's lessor arrangements (Equipment Finance) had total assets of **$101.90 million** as of March 31, 2024, with future minimum lease payments of **$85.37 million**. For lessee arrangements (operating leases), ROU assets were **$24.82 million** and liabilities were **$35.14 million**, with net lease costs of **$2.6 million** for Q1 2024[209](index=209&type=chunk)[210](index=210&type=chunk)[213](index=213&type=chunk) [Note 18. Commitments and Contingencies](index=49&type=section&id=Note%2018.%20Commitments%20and%20Contingencies) This note outlines the company's unfunded loan commitments, repurchase obligations, and legal and regulatory proceedings - The Company has unfunded loan commitments of **$72.1 million** as of March 31, 2024, down from **$78.1 million** at year-end 2023. It is also subject to loan repurchase obligations for fraud or breaches of representations and warranties, and various legal and regulatory proceedings, for which it accrues costs when a loss is probable and estimable[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) [Note 19. Regulatory Requirements](index=50&type=section&id=Note%2019.%20Regulatory%20Requirements) This note details the company's compliance with regulatory capital requirements and dividend restrictions Table: Regulatory Capital Ratios | Capital Ratio (March 31, 2024) | LendingClub Corporation | LendingClub Bank | Required Minimum plus CCB | |:-------------------------------|:------------------------|:-----------------|:--------------------------| | CET1 capital ratio | 17.6% | 15.4% | 7.0% | | Tier 1 capital ratio | 17.6% | 15.4% | 8.5% | | Total capital ratio | 18.9% | 16.6% | 10.5% | | Tier 1 leverage ratio | 12.5% | 11.0% | 4.0% | - Both LendingClub Corporation and LC Bank exceeded all 'well-capitalized' regulatory capital requirements under Basel III as of March 31, 2024. The Company elected to delay the CECL impact on regulatory capital, with the benefit phasing out by **25% annually** through January 1, 2025[229](index=229&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - Federal laws limit dividends a national bank can pay and restrict credit and non-credit transactions with nonbank affiliates to **10% of capital and surplus** for a single affiliate and **20% for all affiliates**[235](index=235&type=chunk)[237](index=237&type=chunk) [Note 20. Segment Reporting](index=52&type=section&id=Note%2020.%20Segment%20Reporting) This note provides financial information by operating segment, distinguishing between LC Bank and LendingClub Corporation (Parent only) operations - The Company operates through two segments: LC Bank (national bank entity, post-Acquisition activities) and LendingClub Corporation (Parent only, pre-Acquisition activities). LC Bank provides financial products, originates/sells loans, and manages deposits, while the Parent segment primarily handles servicing fee revenue and interest income/expense from pre-Acquisition programs[240](index=240&type=chunk) Table: Segment Performance | Segment / Metric (Three Months Ended March 31, 2024, in Thousands) | LendingClub Bank | LendingClub Corporation (Parent only) | Consolidated Total | |:-------------------------------------------------------------------|:-----------------|:--------------------------------------|:-------------------| | Total net revenue | $172,894 | $13,978 | $180,688 | | Net income | $10,786 | $1,464 | $12,250 | | Capital expenditures | $11,781 | $— | $11,781 | | Depreciation and amortization | $10,166 | $2,507 | $12,673 | - LC Bank generated the majority of the consolidated total net revenue (**$172.89 million**) and net income (**$10.79 million**) for Q1 2024. No single borrower or marketplace investor accounted for **10% or more** of total net revenue in Q1 2024, a change from Q1 2023 where one marketplace bank investor accounted for **15%**[239](index=239&type=chunk)[243](index=243&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes LendingClub's financial condition and operational results for Q1 2024, covering revenue, expenses, and risk management [Overview](index=56&type=section&id=Overview) This overview introduces LendingClub's business model as a digital marketplace bank, leveraging technology for financial products - LendingClub, founded in 2006, operates as a digital marketplace bank through its wholly-owned subsidiary, LC Bank, since acquiring Radius in 2021. The company leverages data and technology to provide financial products, increase credit access, lower borrowing costs, and improve savings returns for its members[252](index=252&type=chunk) [Executive Summary](index=56&type=section&id=Executive%20Summary) This summary highlights LendingClub's Q1 2024 GAAP profitability, strategic execution, and key financial and operational metrics - Despite challenging interest rate and economic conditions, LendingClub sustained GAAP profitability in Q1 2024 due to its differentiated business model and strategic execution. The company is leveraging its Structured Certificates program to drive marketplace originations and prudently managing expenses[253](index=253&type=chunk) Table: Executive Summary Financials | Metric | Q1 2024 (in Millions) | Q4 2023 (in Millions) | Q1 2023 (in Millions) | Sequential Change (%) | YoY Change (%) | |:----------------------------------------------|:----------------------|:----------------------|:----------------------|:----------------------|:---------------| | Loan originations | $1,646 | $1,630 | $2,288 | 1% | (28)% | | Total net revenue | $180.7 | $185.6 | $245.7 | (3)% | (26)% | | Net income | $12.25 | $10.16 | $13.67 | 21% | (10)% | | Diluted EPS | $0.11 | $0.09 | $0.13 | 22% | (15)% | | Net interest margin | 5.8% | 6.4% | 7.5% | (9)% | (23)% | | Total assets | $9,244.8 | $8,827.5 | $8,754.0 | 5% | 6% | | Total deposits | $7,521.7 | $7,333.5 | $7,218.9 | 3% | 4% | [Financial Highlights](index=58&type=section&id=Financial%20Highlights) This section presents key financial performance indicators, including profitability, efficiency, capital, and credit quality metrics Table: Financial Highlights | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | |:----------------------------------------------|:---------------|:------------------|:---------------| | Pre-provision net revenue (PPNR) | $48,455 | $55,591 | $88,386 | | Efficiency ratio | 73.2% | 70.0% | 64.0% | | Return on average equity (ROE) | 3.9% | 3.3% | 4.6% | | Return on average total assets (ROA) | 0.5% | 0.5% | 0.7% | | Common equity tier 1 capital ratio | 17.6% | 17.9% | 15.6% | | Tier 1 leverage ratio | 12.5% | 12.9% | 12.8% | | Book value per common share | $11.40 | $11.34 | $11.08 | | Tangible book value per common share | $10.61 | $10.54 | $10.23 | | Total loan originations (in millions) | $1,646 | $1,630 | $2,288 | | Servicing portfolio AUM (in millions) | $13,437 | $14,122 | $16,060 | | ALLL to total loans and leases HFI | 5.8% | 6.4% | 6.4% | | Net charge-off ratio | 6.9% | 6.6% | 3.8% | - PPNR decreased by **13% sequentially** and **45% year-over-year**, reflecting pressure on profitability. The efficiency ratio worsened to **73.2%** from **70.0% sequentially** and **64.0% YoY**. While capital ratios remained strong, the net charge-off ratio increased to **6.9%** from **6.6% sequentially** and **3.8% YoY**, indicating deteriorating credit quality[263](index=263&type=chunk)[265](index=265&type=chunk) [Results of Operations](index=60&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance across key revenue and expense categories for the reporting periods [Marketplace Revenue](index=61&type=section&id=Marketplace%20Revenue) This subsection examines the trends and components of marketplace revenue, including origination fees and fair value adjustments Table: Marketplace Revenue Trends | Component | Q1 2024 (in Thousands) | Q4 2023 (in Thousands) | Q1 2023 (in Thousands) | Sequential Change (%) | YoY Change (%) | |:-------------------------|:-----------------------|:-----------------------|:-----------------------|:----------------------|:---------------| | Origination fees | $70,079 | $76,702 | $70,543 | (9)% | (1)% | | Servicing fees | $19,592 | $17,450 | $26,380 | 12% | (26)% | | Gain on sales of loans | $10,909 | $11,921 | $14,125 | (8)% | (23)% | | Net fair value adjustments | $(44,689) | $(53,892) | $(15,414) | (17)% | 190% | | Total marketplace revenue | $55,891 | $52,181 | $95,634 | 7% | (42)% | - Total marketplace revenue increased **7% sequentially** but decreased **42% year-over-year**. The sequential increase was driven by a decreased loss in net fair value adjustments, while the YoY decline was primarily due to a significant increase in net fair value adjustment losses and lower servicing fees[272](index=272&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk) Table: Loan Origination Volume | Loan Origination Volume (in Thousands) | Q1 2024 | Q4 2023 | Q1 2023 | Sequential Change (%) | YoY Change (%) | |:---------------------------------------|:------------|:------------|:------------|:----------------------|:---------------| | Marketplace loans | $1,361,177 | $1,432,028 | $1,285,648 | (5)% | 6% | | Loan originations held for investment | $285,322 | $198,436 | $1,001,989 | 44% | (72)% | | Total loan originations | $1,646,499 | $1,630,464 | $2,287,637 | 1% | (28)% | [Net Interest Income](index=64&type=section&id=Net%20Interest%20Income) This subsection analyzes net interest income, interest expense, and net interest margin, highlighting the impact of interest rates Table: Net Interest Income Trends | Metric | Q1 2024 (in Thousands) | Q4 2023 (in Thousands) | Q1 2023 (in Thousands) | Sequential Change (%) | YoY Change (%) | |:----------------------------------------------|:-----------------------|:-----------------------|:-----------------------|:----------------------|:---------------| | Total interest income | $207,351 | $208,319 | $202,413 | 0% | 2% | | Total interest expense | $84,463 | $76,842 | $55,709 | 10% | 52% | | Net interest income | $122,888 | $131,477 | $146,704 | (7)% | (16)% | | Net interest margin | 5.75% | 6.40% | 7.50% | (10)% | (23)% | - Net interest income decreased **7% sequentially** and **16% year-over-year**, primarily due to a **10% sequential** and **52% YoY increase** in total interest expense, driven by higher deposit funding costs. Net interest margin declined to **5.75%** in Q1 2024 from **6.40%** in Q4 2023 and **7.50%** in Q1 2023[270](index=270&type=chunk)[288](index=288&type=chunk) - The average rate for interest-bearing deposits increased both sequentially and year-over-year due to the elevated interest rate environment and an increasing concentration of online deposits. Pressure on net interest margin is expected to continue, but at a slower pace[288](index=288&type=chunk) [Provision for Credit Losses](index=67&type=section&id=Provision%20for%20Credit%20Losses) This subsection details the provision for credit losses, including components for HFI loans, AFS securities, and unfunded commitments Table: Provision for Credit Losses | Component | Q1 2024 (in Thousands) | Q4 2023 (in Thousands) | Q1 2023 (in Thousands) | Sequential Change (%) | YoY Change (%) | |:-------------------------------------------------|:-----------------------|:-----------------------|:-----------------------|:----------------------|:---------------| | Credit loss expense for loans and leases HFI | $29,246 | $42,403 | $70,850 | (31)% | (59)% | | Credit loss expense for securities AFS | $2,892 | $— | $— | N/A | N/A | | Credit loss expense for unfunded commitments | $(211) | $(496) | $(266) | (57)% | (21)% | | Total provision for credit losses | $31,927 | $41,907 | $70,584 | (24)% | (55)% | | Loan originations held for investment (in Thousands) | $285,322 | $198,436 | $1,001,989 | 44% | (72)% | - Total provision for credit losses decreased **24% sequentially** and **55% year-over-year**, primarily due to lower balances of HFI loans and a lower volume of originated loans retained as HFI. However, a new credit loss expense of **$2.89 million** was recognized for AFS securities in Q1 2024[297](index=297&type=chunk)[298](index=298&type=chunk) [Allowance for Credit Losses](index=68&type=section&id=Allowance%20for%20Credit%20Losses) This subsection analyzes the changes in the Allowance for Loan and Lease Losses (ALLL), including charge-offs and recoveries Table: Allowance for Loan and Lease Losses | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | March 31, 2023 (in Thousands) | |:----------------------------------------------|:------------------------------|:---------------------------------|:------------------------------| | ALLL, beginning of period | $310,387 | $350,495 | $327,852 | | Credit loss expense for loans and leases HFI | $29,246 | $42,403 | $70,850 | | Charge-offs | $(90,342) | $(90,097) | $(52,563) | | Recoveries | $9,859 | $7,586 | $2,718 | | ALLL, end of period | $259,150 | $310,387 | $348,857 | | Gross allowance for loan and lease losses | $311,794 | $355,773 | $368,698 | | Recovery asset value | $(52,644) | $(45,386) | $(19,841) | - The Allowance for Loan and Lease Losses (ALLL) decreased to **$259.15 million** at March 31, 2024, from **$310.39 million** at December 31, 2023, primarily due to charge-offs exceeding credit loss expense and recoveries. The gross ALLL also decreased, while the recovery asset value (negative allowance for expected recoveries) increased[301](index=301&type=chunk)[303](index=303&type=chunk) [Net Charge-Offs](index=69&type=section&id=Net%20Charge-Offs) This subsection examines net charge-offs and the net charge-off ratio, indicating trends in credit performance Table: Net Charge-Offs | Metric | Q1 2024 (in Thousands) | Q4 2023 (in Thousands) | Q1 2023 (in Thousands) | |:----------------------------------------------|:-----------------------|:-----------------------|:-----------------------| | Average loans and leases HFI at amortized cost | $4,634,032 | $5,016,051 | $5,242,217 | | Net charge-offs | $80,483 | $82,511 | $49,845 | | Net charge-off ratio | 6.9% | 6.6% | 3.8% | - Net charge-offs for Q1 2024 were **$80.48 million**, a slight decrease from **$82.51 million** in Q4 2023, but a significant increase from **$49.85 million** in Q1 2023. The annualized net charge-off ratio increased to **6.9%** in Q1 2024 from **6.6%** in Q4 2023 and **3.8%** in Q1 2023, indicating a worsening trend in credit performance[308](index=308&type=chunk) [Nonaccrual](index=69&type=section&id=Nonaccrual) This subsection reports on nonaccrual loans and leases held for investment and the criteria for their classification Table: Nonaccrual Loans and Leases HFI | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | |:----------------------------------------------|:------------------------------|:---------------------------------| | Nonaccrual loans and leases HFI at amortized cost | $45,307 | $44,382 | | % of total loans and leases HFI | 1.0% | 0.9% | - Nonaccrual loans and leases held for investment at amortized cost increased slightly to **$45.31 million (1.0% of total HFI)** as of March 31, 2024, from **$44.38 million (0.9%)** at December 31, 2023. Loans are generally placed on nonaccrual status when **90 days or more past due** and charged-off no later than **120 days past due** for unsecured personal loans[309](index=309&type=chunk)[310](index=310&type=chunk) [Non-Interest Expense](index=70&type=section&id=Non-Interest%20Expense) This subsection details the components of non-interest expense, including compensation, marketing, and depreciation Table: Non-Interest Expense | Component | Q1 2024 (in Thousands) | Q4 2023 (in Thousands) | Q1 2023 (in Thousands) | Sequential Change (%) | YoY Change (%) | |:------------------------------|:-----------------------|:-----------------------|:-----------------------|:----------------------|:---------------| | Compensation and benefits | $59,554 | $58,591 | $73,307 | 2% | (19)% | | Marketing | $24,136 | $23,465 | $26,880 | 3% | (10)% | | Equipment and software | $12,684 | $13,190 | $13,696 | (4)% | (7)% | | Depreciation and amortization | $12,673 | $11,953 | $12,354 | 6% | 3% | | Professional services | $7,091 | $7,727 | $9,058 | (8)% | (22)% | | Occupancy | $3,861 | $3,926 | $4,310 | (2)% | (10)% | | Other non-interest expense | $12,234 | $11,163 | $17,703 | 10% | (31)% | | Total non-interest expense | $132,233 | $130,015 | $157,308 | 2% | (16)% | - Total non-interest expense increased **2% sequentially** but decreased **16% year-over-year**. The YoY decrease was primarily driven by a **$13.8 million (19%) reduction** in compensation and benefits due to workforce reductions in 2023, and a **$2.7 million (10%) decrease** in marketing expenses due to lower origination volume[314](index=314&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk) [Income Taxes](index=71&type=section&id=Income%20Taxes) This subsection reports on income tax expense, effective tax rates, and factors influencing tax rate differences Table: Income Tax Metrics | Metric | Q1 2024 (in Thousands) | Q1 2023 (in Thousands) | |:-------------------|:-----------------------|:-----------------------| | Income tax expense | $4,278 | $4,136 | | Effective tax rate | 25.9% | 23.2% | - Income tax expense for Q1 2024 was **$4.28 million**, resulting in an effective tax rate of **25.9%**, up from **23.2%** in Q1 2023. The rate difference is attributed to tax credits, non-deductible executive compensation, and stock-based compensation[320](index=320&type=chunk) - As of March 31, 2024, the Company maintained a **$46.1 million** valuation allowance for certain state net operating loss and tax credit carryforwards, reflecting uncertainty in their realization[321](index=321&type=chunk) [Segment Information](index=72&type=section&id=Segment%20Information) This section provides financial data segmented by LC Bank and LendingClub Corporation (Parent only) operations - LendingClub operates two segments: LC Bank, which handles post-acquisition banking activities including loans, leases, and deposits, and LendingClub Corporation (Parent only), which reflects pre-acquisition operations like servicing fee revenue and interest income/expense from legacy programs[323](index=323&type=chunk)[324](index=324&type=chunk) Table: Segment Performance | Segment / Metric (Three Months Ended March 31, 2024, in Thousands) | LendingClub Bank | LendingClub Corporation (Parent only) | Intercompany Eliminations | Consolidated Total | |:-------------------------------------------------------------------|:-----------------|:--------------------------------------|:--------------------------|:-------------------| | Total net revenue | $172,894 | $13,978 | $(6,184) | $180,688 | | Net income | $10,786 | $1,464 | $— | $12,250 | | Capital expenditures | $11,781 | $— | $— | $11,781 | | Depreciation and amortization | $10,166 | $2,507 | $— | $12,673 | - LC Bank is the primary revenue and income driver, contributing **$172.89 million** to total net revenue and **$10.79 million** to net income in Q1 2024. The Parent segment contributed **$13.98 million** to total net revenue and **$1.46 million** to net income[328](index=328&type=chunk) [Non-GAAP Financial Measures](index=73&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the use of non-GAAP measures like PPNR and TBV per common share for supplemental financial analysis - The Company uses non-GAAP financial measures, Pre-Provision Net Revenue (PPNR) and Tangible Book Value (TBV) Per Common Share, to provide supplemental information on financial performance and enable comparisons. PPNR reflects underlying business operations, while TBV Per Common Share evaluates equity usage[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk) Table: Non-GAAP Financial Measures Reconciliation | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | March 31, 2023 (in Thousands) | |:--------------------------------------|:------------------------------|:---------------------------------|:------------------------------| | GAAP Net income | $12,250 | $10,155 | $13,666 | | Pre-provision net revenue (PPNR) | $48,455 | $55,591 | $88,386 | | GAAP common equity | $1,266,286 | $1,251,822 | $1,190,742 | | Tangible common equity | $1,179,404 | $1,163,970 | $1,099,824 | | Book value per common share | $11.40 | $11.34 | $11.08 | | Tangible book value per common share | $10.61 | $10.54 | $10.23 | [Supervision and Regulatory Environment](index=75&type=section&id=Supervision%20and%20Regulatory%20Environment) This section outlines the extensive regulatory oversight LendingClub faces and the potential impacts of non-compliance - LendingClub is subject to comprehensive supervision, regulation, examination, and enforcement by federal and state agencies, including the FRB and OCC. Non-compliance could lead to license loss, enforcement actions, lawsuits, penalties, and business modifications, adversely impacting operations and financial results[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk) [Capital Management](index=75&type=section&id=Capital%20Management) This section describes the company's approach to managing capital, ensuring compliance with regulatory requirements and risk alignment - The Company actively manages capital to align with its risk profile, meet regulatory and market expectations, and comply with Basel III capital adequacy guidelines. It maintains regulatory capital ratios above minimum requirements, including a Capital Conservation Buffer (CCB) of **2.5%**[339](index=339&type=chunk)[340](index=340&type=chunk) Table: Regulatory Capital Ratios | Capital Ratio (March 31, 2024) | LendingClub Corporation | LendingClub Bank | Required Minimum plus CCB | |:-------------------------------|:------------------------|:-----------------|:--------------------------| | CET1 capital ratio | 17.6% | 15.4% | 7.0% | | Tier 1 capital ratio | 17.6% | 15.4% | 8.5% | | Total capital ratio | 18.9% | 16.6% | 10.5% | | Tier 1 leverage ratio | 12.5% | 11.0% | 4.0% | - The Company elected to delay the estimated impact of CECL on regulatory capital, with a **$35 million benefit** at December 31, 2021, phasing out at **25% annually** through January 1, 2025[344](index=344&type=chunk) [Liquidity](index=76&type=section&id=Liquidity) This section details LendingClub's liquidity management strategies, sources of funds, and projected capital expenditures - LendingClub manages liquidity to meet cash flow and collateral obligations, ensuring timely access to funds for customers and supporting operational and extraordinary funding needs. Primary sources of short-term liquidity for LC Bank include cash, liquid AFS securities, deposits, and available borrowing capacity from FHLB and FRB[345](index=345&type=chunk)[348](index=348&type=chunk) Table: LC Bank Liquidity Sources | LC Bank Liquidity Source (March 31, 2024, in Thousands) | Amount | |:--------------------------------------------------------|:-------| | Cash and cash equivalents | $1,044,809 | | Securities available for sale (liquid) | $359,375 | | Deposits | $7,630,455 | | Total available borrowing capacity | $2,891,322 | - Capital expenditures for 2024 are projected at approximately **$50 million**, primarily for developing and supporting the online lending marketplace platform. The Company believes its current liquidity sources are sufficient for the next twelve months and beyond[349](index=349&type=chunk)[351](index=351&type=chunk) [Market Risk](index=78&type=section&id=Market%20Risk) This section identifies interest rate risk as the primary market risk and discusses management strategies and sensitivity analysis - The primary market risk for LendingClub is interest rate risk, affecting net interest income through changes in interest rates, asset prepayments, and deposit/liability composition. The Company uses sensitivity analysis and interest rate swaps to manage this risk[353](index=353&type=chunk)[354](index=354&type=chunk)[355](index=355&type=chunk) Table: Net Interest Income Sensitivity to Interest Rate Changes | Instantaneous Change in Interest Rates | Projected Change in Net Interest Income (Next 12 Months) | |:---------------------------------------|:---------------------------------------------------------| | + 200 basis points | (6.3)% | | + 100 basis points | (2.9)% | | – 100 basis points | 0.6% | | – 200 basis points | 0.6% | - Net interest income is projected to decrease in hypothetical rising interest rate environments due to higher deposit rates, partially offset by higher rates on new loans and investments. Conversely, it is projected to increase in declining rate environments. The sensitivity increased as of March 31, 2024, primarily due to the composition of loans and deposits[357](index=357&type=chunk) [Contingencies](index=79&type=section&id=Contingencies) This section refers to Note 18 for a detailed discussion of the company's commitments and contingencies - For a comprehensive discussion of contingencies as of March 31, 2024, refer to Note 18. Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements[360](index=360&type=chunk) [Critical Accounting Estimates](index=79&type=section&id=Critical%20Accounting%20Estimates) This section confirms no significant changes to critical accounting estimates during Q1 2024, as previously disclosed - There have been no significant changes to the Company's critical accounting estimates during the first quarter of 2024, as discussed in the Annual Report on Form 10-K for the year ended December 31, 2023[361](index=361&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=80&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the detailed discussion on market risk provided in Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations - For a comprehensive discussion regarding quantitative and qualitative disclosures about market risk, refer to 'Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – Market Risk' within this report[363](index=363&type=chunk) [Item 4. Controls and Procedures](index=80&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - The Company's CEO and CFO concluded that disclosure controls and procedures were designed and functioned effectively as of March 31, 2024, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[364](index=364&type=chunk)[365](index=365&type=chunk) - No change in the Company's internal control over financial reporting occurred during the first quarter of 2024 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting[366](index=366&type=chunk) [PART II. OTHER INFORMATION](index=80&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, and other miscellaneous information [Item 1. Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed discussion on legal proceedings provided in the Notes to Condensed Consolidated Financial Statements - For a comprehensive discussion of legal proceedings, refer to 'Part I. Financial Information – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 18. Commitments and Contingencies – Legal,' which is incorporated herein by reference[367](index=367&type=chunk) [Item 1A. Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) This section states that the risk factors from the Annual Report on Form 10-K remain current and could materially affect the business - The risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2023, remain current in all material respects and could materially and adversely affect the Company's business, financial condition, operating results, and stock price[368](index=368&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities and use of proceeds during the reporting period[370](index=370&type=chunk) [Item 3. Defaults Upon Senior Securities](index=81&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section reports that there were no defaults upon senior securities during the period - There were no defaults upon senior securities during the reporting period[370](index=370&type=chunk) [Item 4. Mine Safety Disclosures](index=81&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to LendingClub Corporation[370](index=370&type=chunk) [Item 5. Other Information](index=81&type=section&id=Item%205.%20Other%20Information) This section provides disclosures on Rule 10b5-1 trading plans and an amendment to the CEO's equity awards [Rule 10b5-1 Trading Plans](index=81&type=section&id=Rule%2010b5-1%20Trading%20Plans) This subsection details the adoption of a Rule 10b5-1 trading plan by a director for share sales - Director Erin Selleck adopted a Rule 10b5-1 trading plan on March 1, 2024, expiring January 31, 2025, for the sale of up to **8,869 shares**, including those from outstanding restricted stock units subject to vesting conditions[371](index=371&type=chunk)[372](index=372&type=chunk) - No other directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the first quarter of 2024[373](index=373&type=chunk) [Awards Amendment](index=81&type=section&id=Awards%20Amendment) This subsection reports an amendment to the CEO's restricted stock unit awards for cash settlement - On April 30, 2024, the Company and CEO Scott Sanborn amended certain restricted stock unit awards from 2022 and 2024 to provide for cash settlement of **72,463 restricted stock units**[374](index=374&type=chunk) [Item 6. Exhibits](index=82&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or incorporated by reference as part of this report - The report includes an Exhibit Index listing various documents filed or incorporated by reference, such as the Restated Certificate of Incorporation, Amended and Restated Bylaws, Awards Amendment, and Certifications of CEO and CFO[376](index=376&type=chunk)[377](index=377&type=chunk) [Signatures](index=83&type=section&id=Signatures) This section contains the official signatures of the Company's Chief Executive Officer and Chief Financial Officer, certifying the report - The report is duly signed on behalf of LendingClub Corporation by Scott Sanborn, Chief Executive Officer, and Andrew LaBenne, Chief Financial Officer, both dated May 1, 2024[379](index=379&type=chunk)[380](index=380&type=chunk)

Shares of the lending platform gained on a better-than-expected earnings report.Shares of LendingClub (LC 19.02%) were moving higher today after the consumer lending and banking platform posted better-than-expected results in its first-quarter earnings report, easily beating estimates on the bottom line.As of 11:48 a.m. ET Wednesday, the stock was up 12.7%. LendingClub shines in Q1In a difficult environment for lenders, LendingClub delivered a solid round of results as its balance sheet grew from $8.8 billi ...