LendingClub Corp Q4 FY2024 earnings call

• Successfully exited the new bank operating agreement on time. - Product innovation enabled growth in originations while maintaining industry-leading marketing efficiency. - Maintained credit outperformance with delinquencies over 40% better than the competitive set. - Balance sheet grew 20% vs US Bank average 3%-4%, deposit base up 24% from LevelUp Savings launch. - Advanced mobile app adoption to improve engagement and member lifetime value. - Loan sales prices up 170 basis points YOY, with banks buying ~1/3 of Q4 volume. - Structured certificate program crossed $4B in originations, working on rated senior security. - Launched TopUp with 80% lift in issuance dollars per member and net promoter score 82. - DebtIQ tool driving 50% member engagement lift, with acquisition of Tally's technology to enhance it.

In the fourth quarter, originations were up 13% year-on-year. Pre-provision net revenue (PPNR) was $74 million, up 34% from the prior year. Total net revenue was $217 million, up 17% year-on-year. The balance sheet grew by 20% compared to the US Bank average of 3% to 4%, and the deposit base increased by 24% fueled by the LevelUp Savings product. Loan sales prices have increased for four consecutive quarters, up by 170 basis points year-on-year. Marketplace loan demand from banks was roughly one-third of volume in Q4, up from less than 5% at the start of the year.

• Anticipates Q1 originations of $1.8 billion to $1.9 billion, up 12% YOY midpoint. - PPNR expected in range of $60 million to $70 million in Q1, up 34% YOY midpoint. - Plans to exit Q4 2025 with originations at or above $2.3 billion, aiming for ROTCE >8% in Q4.

• Factors that could cause actual results to differ from forward-looking statements, including macroeconomic conditions, competitive landscape changes, credit risk fluctuations, and funding cost variations.

Q: Vincent Caintic on first quarter volume guidance and pricing A: Scott mentioned Q1 is typically a challenging seasonal quarter, with originations likely to be in line with Q4, and Drew noted sales prices expected to continue increasing despite rate environment.

Q: Brad Capuzzi on loan performance across consumer cohorts A: Scott stated loan performance is stable across prime, near prime, and lower end, with some outperformance in near prime.

Q: Tim Switzer on deposit costs and held for investment loans A: Drew discussed exit of a large commercial deposit customer and plans to retain loans on balance sheet, with held for sale portfolio to be replenished.

Q: Giuliano Bologna on seasonality and marketing programs A: Drew explained typical seasonality with Q2 and Q3 as strongest, and Scott talked about reactivating marketing channels and marketing expense trade-offs.

Q: Bill Ryan on PPNR guidance and competition A: Scott noted higher marketing spend in Q1 as a key driver for lower PPNR vs Q4, and both Scott and Drew discussed stable competitive landscape.

Q: John Hecht on funding channels and balance sheet growth A: Scott and Drew talked about prioritizing funding channels for returns and expected balance sheet growth above industry average.

Q: Reggie Smith on marketing channels and rejections A: Drew discussed shift to efficient channels, trade-offs in different channels, and maintaining credit criteria while considering price sensitivities.

Q: Artem Nalivayko on company name change and acquisitions A: Scott mentioned consideration of rebranding due to current name not reflecting scope, and both Scott and Drew discussed openness to acquisitions but disciplined approach.