Financial Data and Key Metrics Changes - The company achieved a 32% year-on-year growth in originations and a 33% increase in revenue, generating $248 million in total revenue for the quarter [5][15] - GAAP net income was $38 million, compared to $15 million in the same quarter last year, resulting in a return on tangible common equity (ROTCE) of nearly 12% [5][25] - Non-interest income increased by 60% year-on-year to $94 million, driven by higher originations sold through the marketplace and improved loan sales pricing [19] - Net interest income reached $154 million, up 20% from the previous year, with a net interest margin of 6.1% [20] Business Line Data and Key Metrics Changes - The company originated $2.4 billion in loans during the quarter, a 32% increase year-on-year, with significant contributions from paid marketing initiatives and new product enhancements [14] - The capital-light marketplace business generated the majority of non-interest income, while net interest income from loans held on the balance sheet provided a stable revenue stream [16][18] - The company has quadrupled its balance sheet size since the bank acquisition in 2021, now totaling nearly $11 billion in assets [17] Market Data and Key Metrics Changes - The company extended its forward flow agreement with Blue Owl for up to $3.4 billion in new originations, indicating strong investor demand [6][8] - The marketplace business is expected to continue growing, with a focus on both fulfilling balance sheet growth and meeting investor demand for loans [70] Company Strategy and Development Direction - The company is focused on product innovation and marketing efficiency to drive growth, including the launch of LevelUp checking and LevelUp savings products [11][12] - The strategic goal is to enhance customer engagement and build multi-product relationships, which are expected to lead to better credit outcomes and higher lifetime value [9][10] - The company plans to increase its ROTCE target to a range of 10% to 11.5% for the third quarter, reflecting strong top-line momentum [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to compete effectively in a competitive environment, citing strong growth in originations and marketing efficiency [32][35] - The company has proactively reduced exposure to the student loan population and has not seen any negative impacts from the resumption of student loan payments [44][45] - Management expects to maintain double-digit ROTCE targets into the fourth quarter, with guidance indicating continued financial momentum [46][47] Other Important Information - The company is working on a rebranding initiative to better reflect its expanded product offerings beyond lending [108] - The mobile-first platform is designed to enhance customer experience and streamline interactions, contributing to higher customer engagement [110] Q&A Session Summary Question: What are the competitive dynamics in the market? - Management noted that despite increased competition, the company has maintained strong growth in volume and marketing efficiency, indicating confidence in its competitive positioning [32][35] Question: How should marketing efficiency be modeled going forward? - Management indicated that while marketing efficiency may not remain at current levels, they expect originations to continue to grow, which will influence marketing costs [36][38] Question: What are the trends in credit quality? - Management reported strong credit performance and a lower provision for credit losses, with no significant changes expected from the end of the student loan moratorium [41][44] Question: How does the company view its guidance philosophy? - Management explained that guidance reflects a cautious approach due to macroeconomic uncertainties, but they expect to continue growing volumes and profitability [52][56] Question: What is the outlook for the CET1 ratio and capital deployment? - Management emphasized a focus on growth while being mindful of shareholder dilution, indicating a preference for using existing capital for growth rather than raising new capital [61][63]

Financial Data and Key Metrics Changes - The company generated $2 billion in loan volume, a 21% increase year over year, reflecting strong demand from borrowers and loan buyers [5] - Total net revenue grew 20% to $218 million, while pre-provision net revenue increased 52% year over year to $74 million [6][18] - Net interest income reached an all-time high of $150 million, up 22% from the same quarter last year, driven by growth in the balance sheet and optimized funding costs [19] - The net interest margin improved to 6%, primarily due to reduced deposit funding costs [20] Business Line Data and Key Metrics Changes - Non-interest income was $68 million, up 17% year over year, driven by better loan sales pricing [19] - The provision for credit losses was $58 million, compared to $32 million in the same quarter last year, reflecting increased qualitative reserves [23][24] - The net charge-off ratio for the held-for-investment loan portfolio improved to 4.8%, down from 6.9% in the same quarter last year [25] Market Data and Key Metrics Changes - The company secured an investment-grade rating from Fitch for its first rated structured certificate deal, closing a $100 million transaction with a top insurance company [6][10] - The structured certificates program has crossed $5 billion since launch, supporting higher loan sales pricing [9] Company Strategy and Development Direction - The company is focusing on penetrating the large credit card refinance opportunity and expanding marketing channels to accelerate growth [11][12] - The acquisition of Cushion, an AI-powered spending intelligence app, aims to enhance the mobile experience and feature set [7][14] - The company is investing in a new headquarters, taking advantage of lower real estate prices [7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties but expressed confidence in the company's strong fundamentals and ability to deliver value [15] - The company anticipates originations of $2.1 billion to $2.3 billion in Q2, representing a year-over-year increase of 16% to 27% [26] - Management expects pre-provision net revenue in the range of $70 million to $80 million for Q2, up 27% to 46% year over year [26] Other Important Information - The company has created significant operating leverage, with revenue growth of 20% compared to a 9% increase in non-interest expenses [22] - The company is carefully monitoring the macro environment and has increased its qualitative provision in preparation for potential economic downturns [8][16] Q&A Session Summary Question: Update on investor demand and marketplace pricing - Management indicated that despite broader market noise, they are maintaining pricing discipline and have a pipeline of new buyers [29][30] Question: Clarification on PPNR guidance for Q2 - Management confirmed that the guidance reflects increased marketing investments and potential offsets on the provision line [33][36] Question: Insights on loan demand and consumer behavior - Management noted that Q2 typically sees a seasonal uptick in originations, with positive responses to new marketing initiatives [81] Question: Discussion on the insurance market as a buyer of loans - Management highlighted the massive opportunity in the insurance market, emphasizing the need for rated products to attract insurance capital [86][87]

Financial Data and Key Metrics Changes - The company generated $2 billion in loan volume, a 21% increase year over year, reflecting strong demand from borrowers and loan buyers [5] - Total net revenue grew 20% to $218 million, while pre-provision net revenue increased 52% year over year to $74 million [6][18] - Net interest income reached an all-time high of $150 million, up 22% from the same quarter last year, driven by growth in the balance sheet and optimization of funding costs [19] - The net interest margin improved to 6%, primarily due to reduced deposit funding costs [20] Business Line Data and Key Metrics Changes - Non-interest income was $68 million, up 17% year over year, driven by better loan sales pricing [19] - The company saw a significant improvement in credit performance, with the net charge-off ratio for the held-for-investment loan portfolio decreasing to 4.8%, down from 6.9% in the same quarter last year [25] Market Data and Key Metrics Changes - The company secured an investment-grade rating from Fitch for its first rated structured certificate deal, closing a $100 million transaction with a top insurance company [6] - The structured certificates program has crossed $5 billion since its launch, supporting higher loan sales pricing [9] Company Strategy and Development Direction - The company is focusing on penetrating the historically large credit card refinance opportunity through product and experience innovation [10] - The acquisition of Cushion, an AI-powered spending intelligence app, aims to enhance the mobile experience and feature set [7][13] - The company is strategically investing in marketing channels to accelerate growth, with initial results aligning with expectations [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties but expressed confidence in the company's strong fundamentals and ability to deliver value [14] - The company anticipates originations of $2.1 billion to $2.3 billion in Q2, representing a year-over-year increase of 16% to 27% [26] - Management indicated that the underlying momentum of the business is strong and expected to continue into the second quarter [16] Other Important Information - The company increased its provision for credit losses to $58 million, compared to $32 million in the same quarter last year, due to higher day one CECL [24] - The company is monitoring the macro environment closely and has increased its qualitative provision in preparation for potential economic downturns [8] Q&A Session Summary Question: Update on investor demand and marketplace pricing - Management feels good about current pricing and maintains discipline on credit and structure, with transactions in April proceeding as planned [29][30] Question: Clarification on PPNR guidance for Q2 - The guidance reflects expected revenue increases and higher marketing expenses, with credit performance looking strong [33][34] Question: Insights on origination volume guidance - Management believes the guidance is not overly conservative and reflects a broader range due to newer marketing vehicles [58] Question: Discussion on capital levels and share repurchase appetite - Capital levels remain strong, with room for growth, and share repurchase is an option but not currently prioritized [64][66] Question: Loan demand from consumers in Q2 - Management noted a typical seasonal increase in Q2, with positive responses to new marketing initiatives [81] Question: Insurance market opportunity for loan buyers - The company sees a massive opportunity in the insurance market, particularly with rated products that meet capital efficiency needs [85][86]