• Fourth Quarter and Full Year 2019 Results

February 18, 2020

Disclaimer

Some of the statements in this presentation, including statements regarding future product initiatives, borrower and investor demand, anticipated future financial results, and our ability to obtain a bank charter and the impact it would have on our business are "forward-looking statements." The words "anticipate," "believe," "estimate," "expect," "intend," "may," "outlook," "plan," "predict," "project," "will," "would" and similar expressions may identify forward-looking statements, although not all forward- looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include: the outcomes of pending governmental investigations and pending or threatened litigation, which are inherently uncertain; the impact of management changes and the ability to continue to retain key personnel; our ability to achieve cost savings from restructurings; our ability to continue to attract and retain new and existing borrowers and investors; our ability to obtain or add bank functionality and a bank charter; competition; overall economic conditions; demand for the types of loans facilitated by us; default rates and those factors set forth in the section titled "Risk Factors" in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K, each as filed with the SEC. We may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This presentation contains non-GAAP measures relating to our performance. We have included certain pro forma adjustments in our presentation of non-GAAP Operating Expenses, non-GAAP Sales and Marketing expense, non-GAAP Origination and Servicing expense, non-GAAP Engineering and Product Development expense, non-GAAP Other General and Administrative expense, non-GAAP Adjusted Net Income (Loss), non-GAAP Adjusted Earnings Per Diluted Share, non-GAAP Contribution, non-GAAP Contribution Margin, non-GAAP Adjusted EBITDA, non-GAAP Adjusted EBITDA Margin, and non-GAAP Net cash and other financial assets. We believe these non-GAAP measures provide management and investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar non-GAAP financial measures.

These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with generally accepted accounting principles. You can find the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in the Appendix at the end of this presentation.

Information in this presentation is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

2

Agenda

  • 4Q and Full Year 2019 Results
  • 2020 Outlook and Guidance

3

4Q and Full Year 2019 Results

4Q 2019 Results

Achieves GAAP Net Income profitability

4Q19 Guidance

4Q19 Results

YoY

Range

Net Revenue

$190M - $200M

$188.5M

+4%

GAAP Consolidated

$0M - $5M

$0.2M

+$13.6M

Net Loss

Adjusted EBITDA

$34M - $39M

$39.0M

+37%

Adjusted EBITDA Margin

17.9% -19.5%

20.7%

+5.0pts

Adjusted Net Income1

$0M - $5M

$7.0M

+$11.1M

  1. Excludes certain items thatareeithernon-recurring,do notcontribute directly to management's evaluationofits operating results,ornon-cash items,such as$4.5 millionoflegal,regulatory and otherexpense related to legacy issues, $0.3 million ofexpensesrelated to ourcoststructure simplification,$0.9 million ofacquisition and related expenses,and $1.0 million ofotheritems.Referto the Appendix atthe end of this presentation foradditional information.

5

Full Year 2019 Results

Record Contribution Margin and Adjusted EBITDA

Full Year Guidance

Full Year

YoY

Range

2019 Results

Net Revenue

$760M - $770M

$758.6M

+9%

GAAP Consolidated

($31M) - ($26M)

($30.7M)

+$97.5M

Net Income

Adjusted EBITDA

$130M - $135M

$134.8M

+38%

Adjusted EBITDA Margin

17.1% -17.5%

17.8%

+3.8pts

Adjusted Net Income (Loss)1

($5M) - $0M

$2.2M

+$34.6M

  1. Excludes certain items thatareeithernon-recurring,do notcontribute directly to management's evaluationofits operating results,ornon-cash items,such as$19.6 million oflegal,regulatory and otherexpenserelated to legacy issues, $9.9 million ofexpensesrelated to ourcoststructure simplification,$0.9 million ofacquisition and related expenses,and $2.5 million ofotheritems.Referto the Appendix atthe end of this presentation foradditional information.

6

2020 Outlook and Guidance

2020 Outlook and Guidance

Macro assumptions

  • Economy continues to grow, but more slowly, and recession concerns remain elevated given the late stages of the economic cycle.
  • Consumer demand remains strong but continued credit tightening across the market will slow overall personal loan market growth.
  • Lower interest rates may be offset by volatile credit spreads.
  • Radius acquisition expected to close in 12 to 15 months.

8

2020 Outlook and Guidance

Our priorities

  • Focus on profitable growth as we prepare for bank charter.
  • Investment in our infrastructure to prepare for a bank charter.
  • Investment in customer engagement functionality which will enable us to serve our members across a broader spectrum of products and services.
  • Investment in our distribution platforms to further increase the breadth and depth of liquidity in the marketplace.

9

2020 Outlook and Guidance

Focus on contribution margin dollars as a % of origination leverages our scale and drives profitable growth

($ in millions)

Q1 2020

FY 2020

Notes

Total Net

$170 - $180

$790 - $820

Revenue

GAAP

Actual results for GAAP Consolidated Net

($5) - $0

$17 - $37

Income (Loss) and Adjusted Net Income

Consolidated

(Loss) will differ as financial information

Net Income (Loss)

related to our legacy issues, cost structure

simplification, acquisition and related

Adjusted

expenses, and other items become available.

($5) - $0

$17 - $37

Such items will not impact Adjusted Net

Net Income (Loss)

Income (Loss) but will impact GAAP

Consolidated Net Income (Loss).

Adjusted

$25 - $30

$150 - $170

EBITDA

10

Financial Metrics

Diverse investor channels provide breadth LendingClub Platform Investorsof credit appetite and flexibility to adapt to

various market conditions.

Originations Mix by Funding Source

(as a % of total platform originations)

19%

18%

21%

20%

25%

41%

38%

32%

49%

45%

16%

15%

17%

17%

16%

4%

3%

6%

6%

5%

23%

18%

23%

10%

13%

4Q18

1Q19

2Q19

3Q19

4Q19

Platform Originations by Funding Source1

($ in millions)

$3,350

$3,130

$3,083

$2,871

$2,728

$676

$630

$765

$538

$489

$1,282

$1,183

$1,415

$970

$1,345

$491

$528

$461

$512

$146

$103

$458

$162

$155

$169

$755

$718

$527

$419

$267

4Q18

1Q19

2Q19

3Q19

4Q19

Other Institutional

Investors

Banks

Managed Accounts

Self-directed Investors

LendingClub Inventory2

  1. There may be differences between the sumofthe quarterly resultsdue to rounding.
  2. Represents the percentage ofloan originationsin the periodthatwere purchasedorpending purchase by the Company during the period,excluding loansheld by the Company through consolidated trusts,and notyetsold as ofthe period end.LendingClubinventory percentage also includesthe portion ofsecuritiesnotsold to third parties forourstructured programtransactionsduring the period.Itis the Company's expectation thatmostofthese loanswill be included in future structured program transactionsorsold in whole loan formatin subsequentperiods.

12

Originations & Revenue

Quarterly Originations1

Personal loans - standard

($ in millions)

Personal loans - custom 2

Other 3

3,350

3,130

3,083

2,871

2,728

2,174

2,343

2,088

2,051

1,928

611

586

750

821

816

209

214

205

186

179

4Q18

1Q19

2Q19

3Q19

4Q19

Grew quarterly originations by 7% and net revenue by 4% year-over-year.

Quarterly Total Net Revenue1

Net Investor Revenue

($ in millions)

Other Revenue

Transaction Fee Revenue

204.9

181.5

190.8

188.5

174.4

39.7

38.0

35.8

33.5

37.0

4.0

2.8

5.0

1.5

2.1

142.1

152.2

161.2

150.0

135.4

4Q18

1Q19

2Q19

3Q19

4Q19

Growth (%)Growth (%)

YoY

18%

18%

11%

16%

7%

YoY

16%

15%

8%

11%

4%

1) There may be differences between the sumofthe quarterly resultsdue to rounding.

Yield

6.32%

6.39%

6.10%

6.12%

6.11%

2)

Includes loansmade to near-primeandsuper-prime borrowers,as well astestingprogramoriginations.

3)

In the second quarterof2019,the Company sold certain assets related to its smallbusinessoperating segmentand announced thatitwill connectapplicants looking fora small businessloanwith strategic partnersand earn referral feesinstead

of facilitating these loanson its platform.As a result,beginning in the third quarterof2019 the "Otherloans"category presented in the chartabove no longer includessmallbusinessloans.

13

Contribution2

Quarterly expenses impacting Contribution Margin1

($ in millions)

99.1

90.4

88.7

91.2

87.2

Origination &

24.8

23.9

24.1

23.9

21.5

Servicing (O&S)

Sales &

66.5

67.3

74.3

Marketing (M&S)

64.6

65.7

4Q18

1Q19

2Q19

3Q19

4Q19

Achieved record quarterly Contribution Margin of 53.7% - driven by efficiencies in marketing and operations.

Quarterly Contribution Margin1,2

($ in millions)

105.8

99.6

101.3

91.0

85.7

O&S % of

0.83%

0.88%

0.76%

0.74%

0.70%

Originations

M&S % of

2.32%

2.37%

2.15%

2.22%

2.13%

Originations

Total % of

3.15%

3.25%

2.91%

2.96%

2.83%

Originations

Total % of

49.8%

50.9%

47.8%

48.4%

46.3%

Revenues

1) There may be differences between the sumofthe quarterly resultsdue to rounding.

4Q18

1Q19

2Q19

3Q19

4Q19

Margin % of

50.1%

49.1%

52.2%

51.6%

53.7%

Revenue

  1. Contribution is calculated asnetrevenue less"Salesand marketing"and "Origination and servicing"expenseson the Company'sStatementsofOperations,adjusted to exclude coststructure simplification andnon-cashstock-based compensation expenses within these captions and income orlossattributable to noncontrolling interests.Contribution Margin isa non-GAAPfinancial measure calculated by dividing Contribution by total netrevenue.See Appendix for a reconciliation ofthis non-GAAP measure.

14

Adjusted EBITDA Margin2

Quarterly Expenses impacting Adjusted EBITDA Margin1

($ in millions)

66.4

65.8

62.6

63.1

62.3

Engineering &

26.0

25.2

Product

22.8

23.9

24.1

Development

Other G&A

39.8

39.2

40.4

40.5

38.1

4Q18

1Q19

2Q19

3Q19

4Q19

Adjusted EBITDA up 37% year-over-year, with 5pts of margin improvement delivered through operating leverage.

Quarterly Adjusted EBITDA1, 2

($ in millions)

40.039.0

33.2

28.5

22.6

Eng. & PD

12.5%

13.7%

13.6%

12.3%

12.8%

4Q18

1Q19

2Q19

3Q19

4Q19

(% of Rev .)

Other G&A

21.9%

22.5%

21.2%

19.8%

20.2%

(% of Rev .)

Margin %

Total % of

34.5%

36.2%

34.8%

32.1%

33.0%

15.7%

13.0%

17.4%

19.5%

20.7%

Rev enue

of Revenue

  1. There may be differences between the sumofthe quarterly resultsdue to rounding.
  2. Adjusted EBITDA is anon-GAAP financial measuredefined asnetincome(loss)attributable to LendingClubadjusted to exclude (1)coststructure simplification expense,(2)goodwill impairment,(3)legal,regulatory and otherexpense related to legacy issues,
    (4)acquisition and related expenses,(5)otheritems,(6)depreciation,impairmentand amortization expense,(7)stock-based compensation expense,and (8)income tax expense (benefit).Adjusted EBITDA Margin is a non-GAAP financial measure calculated by dividing Adjusted EBITDA by total netrevenue.

15

Adjusted Net Income (Loss)2

Quarterly Expenses impacting Adjusted Net Income (Loss)1

($ in millions)

34.134.4

32.6

32.1

32.0

Depreciation,

amortization, &

14.9

15.9

13.9

other net

14.0

15.3

adjustments

Delivered Adjusted Net Income of $7M for the quarter, and $2.2M for the full year.

Quarterly Adjusted Net Income (Loss)1, 2

($ in millions)

8.0

7.0

(1.2)

Stock-based

17.7

18.3

20.6

18.1

16.7

(4.1)

compensation

4Q18

1Q19

2Q19

3Q19

4Q19

(11.5)

D&A + other

8.2%

9.1%

7.3%

6.8%

8.0%

(% of Rev .)

4Q18

1Q19

2Q19

3Q19

4Q19

SBC

9.8%

10.5%

10.8%

8.8%

8.9%

(% of Rev .)

Margin %

Total % of

17.9%

19.6%

18.0%

15.7%

17.0%

(2.3%)

(6.6%)

(0.6%)

3.9%

3.7%

Rev enue

of Revenue

  1. There may be differences between the sumofthe quarterly resultsdue to rounding.
  2. Adjusted NetIncome (Loss)isanon-GAAPfinancial measure defined asnetincome (loss)attributable to LendingClub adjusted to exclude certain items thatare either non-recurring,do notcontribute directly to management's evaluation ofits operating results, ornon-cash items,such as(1)expensesrelated to ourcoststructure simplification,(2)goodwill impairment,(3)legal,regulatory and otherexpense related to legacy issues,and (4)acquisition and related expenses,and (5)otheritems,netoftax.

16

Servicing Portfolio Recurring Revenue

Total portfolio grew 16% YoY to a record $16B.

Servicing Portfolio Balance1

($ in millions)

$16,011

$15,522

$14,808

$14,131

$13,746

Growth (%)

4Q18

1Q19

2Q19

3Q19

4Q19

YoY

15%

18%

18%

17%

16%

  1. Servicing Portfolio Balance represents outstanding principal balanceofloansthatwe serviced atthe end ofthe periods indicated,and financedwith notes,certificates &secured borrowings,and whole loans sold (including loansinvested in by the Company).

17

Appendix:

Financial Reconciliations

GAAP to Non-GAAP Reconciliation: Operating Expenses

Year Ended Dec. 31,

Three Months Ended

(in thousands, except percentages) (unaudited)

2017

2018

2019

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

Total net rev enue

$

574,540

$

694,812

$

758,607

$

151,667

$

176,979

$

184,645

$

181,521

$

174,418

$

190,807

$

204,896

$

188,486

GAAP sales and marketing

$

229,865

$

268,517

$

279,423

$

57,517

$

69,046

$

73,601

$

68,353

$

66,623

$

69,323

$

76,255

$

67,222

Stock-based compensation expense

7,654

7,362

6,095

1,860

2,023

1,791

1,688

1,571

1,540

1,505

1,479

Cost structure simplification expense (1)

-

131

1,410

-

-

-

131

468

445

454

43

Non-GAAP sales and marketing

$

222,211

$

261,024

$

271,918

$

55,657

$

67,023

$

71,810

$

66,534

$

64,584

$

67,338

$

74,296

$

65,700

% Total net revenue

38.7%

37.6%

35.8%

36.7%

37.9%

38.9%

36.7%

37.0%

35.3%

36.3%

34.9%

GAAP origination and servicing

$

86,891

$

99,376

$

103,403

$

22,645

$

25,593

$

25,431

$

25,707

$

28,273

$

24,931

$

27,996

$

22,203

Stock-based compensation expense

4,804

4,322

3,155

1,072

1,102

1,104

1,044

924

846

852

533

Cost structure simplification expense (1)

-

749

5,908

-

-

-

749

3,238

201

2,324

145

Non-GAAP origination and serv icing

$

82,087

$

94,305

$

94,340

$

21,573

$

24,491

$

24,327

$

23,914

$

24,111

$

23,884

$

24,820

$

21,525

% Total net revenue

14.3%

13.6%

12.4%

14.2%

13.8%

13.2%

13.2%

13.8%

12.5%

12.1%

11.4%

GAAP engineering and product development

$

142,264

$

155,255

$

168,380

$

36,837

$

37,650

$

41,216

$

39,552

$

42,546

$

43,299

$

41,455

$

41,080

Stock-based compensation expense

22,047

20,478

19,860

5,279

5,464

5,332

4,403

5,231

5,475

4,737

4,417

Depreciation and amortization

36,790

45,037

49,207

9,247

10,197

13,221

12,372

13,373

11,838

11,464

12,532

Cost structure simplification expense (1)

-

-

15

-

-

-

-

7

8

10

(10)

Non-GAAP engineering and product dev elopment

$

83,427

$

89,740

$

99,298

$

22,311

$

21,989

$

22,663

$

22,777

$

23,935

$

25,978

$

25,244

$

24,141

% Total net revenue

14.5%

12.9%

13.1%

14.7%

12.4%

12.3%

12.5%

13.7%

13.6%

12.3%

12.8%

GAAP other general and administrative, legal, regulatory and other expense related to

$

268,933

$

299,774

$

238,292

$

65,809

$

105,478

$

67,184

$

61,303

$

56,876

$

64,324

$

59,485

$

57,607

legacy issues and goodwill impairment

Stock-based compensation expense

36,478

42,925

44,529

9,590

11,208

11,544

10,583

10,526

12,690

11,001

10,312

Depreciation

5,130

5,852

6,446

1,419

1,420

1,488

1,525

1,542

1,596

1,569

1,739

Acquisition and related expenses (2)

349

-

932

-

-

-

-

-

-

-

932

Amortization of intangibles

4,288

3,875

3,499

1,035

959

940

941

940

866

845

848

Cost structure simplification expense (1)

-

5,902

2,600

-

-

-

5,902

559

1,280

655

106

Goodwill impairment

-

35,633

-

-

35,633

-

-

-

-

-

-

Legal, regulatory and other expense related to legacy issues (3)

80,250

53,518

19,609

16,973

18,501

15,474

2,570

4,145

6,791

4,142

4,531

Other items (4)

-

-

2,453

-

-

-

-

-

704

749

1,000

Non-GAAP other general and administrativ e

$

142,438

$

152,069

$

158,224

$

36,792

$

37,757

$

37,738

$

39,782

$

39,164

$

40,397

$

40,524

$

38,139

% Total net revenue

24.8%

21.9%

20.9%

24.3%

21.3%

20.4%

21.9%

22.5%

21.2%

19.8%

20.2%

  1. Includes personnel-related expenses associated with establishing a site in the Salt Lake City area, which are included in "Sale s and marketing," "Origination and servicing," "Engineering and product development" and "Other general and administrative" expense on the Company's Condensed Consolidated Statements of Operations. In the fourth quarter of 2018 and first quarter of 2019, also includes external advisory fees, which are included in "Other general and administrative" expense on the Company's
    Condensed Consolidated Statements of Operations.
  2. In 2019, includes costs related to the acquisition of Radius. In 2017, represents incremental compensation expense required t o be paid under the purchase agreement to retain key former shareholder employees of an acquired business.
  3. Includes class action and regulatory litigation expense and legal and other expenses related to legacy issues, which are incl uded in "Class action and regulatory litigation expense" and "Other general and administrative" expense, respectively, on the Company's Condensed Consolidated Statements of Operations. For the second quarter and full year 2019, includes expense relate d to the termination of a legacy contract, which is included in "Other general and administrative" expense on the Company's
    Condensed Consolidated Statements of Operations. For the each of the quarters in 2019, also includes expense related to the d issolution of certain private funds managed by LCAM, which is included in "Net fair value adjustments" on the Company's Condensed Consolidated Statements of Operations.
  4. Includes expenses related to certainnon-legacy litigation and regulatory matters which are included in "Other general and administrative" expense on the Company's Consolidated Statements of Operations. For the second quarter of 2019, also includes a g ain

on the sale of our small business operating segment.

19

Contribution Reconciliation & Definition

Contribution is a non-GAAP financial measure that we calculate as net revenue less "Sales and marketing" and "Origination and servicing" expenses on the Company's

Statements of Operations, adjusted to exclude cost structure simplification and non-cashstock-based compensation expenses within these captions and income or loss attributable to noncontrolling interests. Contribution Margin is a non-GAAP financial measure calculated by dividing contribution by total net revenue.

Year Ended Dec. 31,

Three Months Ended

(in thousands, except percentages) (unaudited)

2017

2018

2019

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

GAAP LendingClub net income (loss)

$

(153,835)

$

(128,308)

$

(30,745)

$

(31,181)

$

(60,861)

$

(22,804

)

$

(13,462

)

$

(19,935)

$

(10,661)

$

(383)

$

234

GAAP general and administrative expense:

Engineering and product development

142,264

155,255

168,380

36,837

37,650

41,216

39,552

42,546

43,299

41,455

41,080

Other general and administrative

191,683

228,641

238,292

52,309

57,583

57,446

61,303

56,876

64,324

59,485

57,607

Cost structure simplification expense (1)

-

880

7,318

-

-

-

880

3,706

646

2,778

188

Goodw ill impairment

-

35,633

-

-

35,633

-

-

-

-

-

-

Class action and regulatory litigation expense

77,250

35,500

-

13,500

12,262

9,738

-

-

-

-

-

Stock-based compensation expense: (2)

Sales and marketing

7,654

7,362

6,095

1,860

2,023

1,791

1,688

1,571

1,540

1,505

1,479

Origination and servicing

4,804

4,322

3,155

1,072

1,102

1,104

1,044

924

846

852

533

Income tax expense (benefit)

632

43

(201)

39

24

(38)

18

-

(438)

97

140

Contribution

$

270,452

$

339,328

$

392,294

$

74,436

$

85,416

$

88,453

$

91,023

$

85,688

$

99,556

$

105,789

$

101,261

Total net revenue

$

574,540

$

694,812

$

758,607

$

151,667

$

176,979

$

184,645

$

181,521

$

174,418

$

190,807

$

204,896

$

188,486

Contribution margin

47.1%

48.8%

51.7%

49.1%

48.3%

47.9%

50.1%

49.1%

52.2%

51.6%

53.7%

  1. Excludes the portion ofpersonnel-related expense associated with establishing a site in the Salt Lake City area that are inclu ded in the "Sales and marketing" and "Origination and servicing" expense categories.
  2. Excludesstock-based compensation expense included in the "Sales and marketing" and "Origination and servicing" expense categori es.

20

Contribution as a Percent of Originations

Year Ended Dec. 31,

(in thousands, except percentages or as noted) (unaudited) (1)

2017

2018

2019

Loan originations ($ mm)

$

8,987

$

10,882

$

12,290

Total net revenue

$

574,540

$

694,812

$

758,607

% of loan originations

6.39%

6.38%

6.17%

Non-GAAP sales and marketing

$

222,211

$

261,024

$

271,918

Non-GAAP origination and servicing

$

82,087

$

94,305

$

94,340

Total non-GAAP sales and marketing & origination and servicing (1)

$

304,298

$

355,329

$

366,258

% of loan originations

3.39%

3.27%

2.98%

(Income) Loss attributable to noncontrolling interests

$

210

$

(155)

$

(55)

Three Months Ended

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

$

2,306

$

2,818

$

2,886

$

2,871

$

2,728

$

3,130

$

3,350

$

3,083

$

151,667

$

176,979

$

184,645

$

181,521

$

174,418

$

190,807

$

204,896

$

188,486

6.58%

6.28%

6.40%

6.32%

6.39%

6.10%

6.12%

6.11%

$

55,657

$

67,023

$

71,810

$

66,534

$

64,584

$

67,338

$

74,296

$

65,700

$

21,573

$

24,491

$

24,327

$

23,914

$

24,111

$

23,884

$

24,820

$

21,525

$

77,230

$

91,514

$

96,137

$

90,448

$

88,695

$

91,222

$

99,116

$

87,225

3.35%

3.25%

3.33%

3.15%

3.25%

2.91%

2.96%

2.83%

$

(1)

$

(49)

$

(55)

$

(50)

$

(35)

$

(29)

$

9

$

-

Contribution

$ 270,452

$ 339,328

$ 392,294

$ 74,436

$ 85,416

$ 88,453

$ 91,023

$ 85,688

$ 99,556

$ 105,789

$ 101,261

% of loan originations

3.01%

3.12%

3.19%

3.23%

3.03%

3.06%

3.17%

3.14%

3.18%

3.16%

3.28%

(1)There maybe differences between the sum of the quarterlyresults and the total annual results due to rounding.

21

Adjusted Net Income (Loss), Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS Reconciliation

Adjusted Net Income (Loss) is a non-GAAP financial measure defined as net income (loss) attributable to LendingClub adjusted to exclude certain items that are either non-recurring, do not contribute directly to management's evaluation of its operating results, or non-cash items, such as (1) expenses related to our cost structure simplification, (2) goodwill impairment, (3) legal, regulatory and other expense related to legacy issues, (4) acquisition and related expenses and (5) other items, net of tax. Adjusted EBITDA is a non-GAAP financial measure defined as net income (loss) attributable to LendingClub adjusted to exclude (1) cost structure simplification expense, (2) goodwill impairment, (3) legal, regulatory and other expense related to legacy issues, (4) acquisition and related expenses, (5) other items, (6) depreciation, impairment and amortization expense, (7) stock-based compensation expense and (8) income tax expense (benefit). Adjusted EBITDA Margin is a non -GAAP financial measure calculated by dividing Adjusted EBITDA by total net revenue. Adjusted EPS is a non -GAAP financial measure calculated by dividing Adjusted Net Income (Loss) by the weighted -average diluted common shares outstanding.

Year Ended Dec. 31,

Three Months Ended

(in thousands, except per share data) (unaudited)

2017

2018

2019

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

GAAP LendingClub net income (loss)

$

(153,835

)

$

(128,308

)

$

(30,745)

$

(31,181)

$

(60,861)

$

(22,804)

$

(13,462)

$

(19,935)

$

(10,661)

$

(383)

$

234

Cost structure simplification expense (1)

-

6,782

9,933

-

-

-

6,782

4,272

1,934

3,443

284

Goodwill impairment

-

35,633

-

-

35,633

-

-

-

-

-

-

Legal, regulatory and other expense related to legacy issues (2)

80,250

53,518

19,609

16,973

18,501

15,474

2,570

4,145

6,791

4,142

4,531

Acquisition and related expense (3)

349

-

932

-

-

-

-

-

-

-

932

Other items (4)

-

-

2,453

-

-

-

-

-

704

749

1,000

Adj usted net income (loss)

$

(73,236)

$

(32,375)

$

2,182

$

(14,208)

$

(6,727)

$

(7,330)

$

(4,110)

$

(11,518)

$

(1,232)

$

7,951

$

6,981

Depreciation and impairment expense:

Engineering and product development

36,790

45,037

49,207

9,247

10,197

13,221

12,372

13,373

11,838

11,464

12,532

Other general and administrative

5,130

5,852

6,446

1,419

1,420

1,488

1,525

1,542

1,596

1,569

1,739

Amortization of intangible assets

4,288

3,875

3,499

1,035

959

940

941

940

866

845

848

Stock-based compensation expense

70,983

75,087

73,639

17,801

19,797

19,771

17,718

18,252

20,551

18,095

16,741

Income tax expense (benefit)

632

43

(201)

39

24

(38)

18

-

(438)

97

140

Adj usted EBITDA

$

44,587

$

97,519

$

134,772

$

15,333

$

25,670

$

28,052

$

28,464

$

22,589

$

33,181

$

40,021

$

38,981

Total net revenue

$

574,540

$

694,812

$

758,607

$

151,667

$

176,979

$

184,645

$

181,521

$

174,418

$

190,807

$

204,896

$

188,486

Adj usted EBITDA Margin

7.8%

14.0%

17.8%

10.1%

14.5%

15.2%

15.7%

13.0%

17.4%

19.5%

20.7

%

Weighted-average GAAP diluted shares (5)

81,799,189

84,583,461

87,278,596

83,659,860

84,238,897

84,871,828

85,539,436

86,108,871

86,719,049

87,588,495

88,912,677

Non-GAAP diluted shares (5)

81,799,189

84,583,461

87,794,035

83,659,860

84,238,897

84,871,828

85,539,436

86,108,871

86,719,049

87,588,495

88,912,677

Adj usted EPS - diluted (5)

$

(0.90)

$

(0.38)

$

0.02

$

(0.17)

$

(0.08)

$

(0.09)

$

(0.05)

$

(0.13)

$

(0.01)

$

0.09

$

0.00

  1. Includes personnel-related expenses associated with establishing a site in the Salt Lake City area, which are included in "Sale s and marketing," "Origination and servicing," "Engineering and product development" and "Other general and administrative" expense on the Company's Condensed Consolidated Statements of Operations. In the fourth quarter of 2018 and first quarter of 2019, also includes external advisory fees, which are included in "Other general and administrative" expense on the Company's Condensed Consolidated Statements of Operations.
  2. Includes class action and regulatory litigation expense and legal and other expenses related to legacy issues, which are incl uded in "Class action and regulatory litigation expense" and "Other general and administrative" expense, respectively, on the Company's Condensed Consolidated Statements of Operations. For the second quarter and year ended 2019, includes expense relat ed to the termination of a legacy contract and legacy legal expenses, which are included in "Other general and administrative" expense on the Company's Condensed Consolidated Statements of Operations. For each of the quarters in 2019, a lso includes expense related to the dissolution of certain private funds managed by LCAM, which is included in "Net fair value adjustments" on the Company's Condensed Consolidated Statements of Operations.
  3. In 2019, includes costs related to the acquisition of Radius. In 2017, represents incremental compensation expense required t o be paid under the purchase agreement to retain key former shareholder employees of an acquired business.
  4. Includes expenses related to certainnon-legacy litigation and regulatory matters which are included in "Other general and administrative" expense on the Company's Consolidated Statements of Operations. For the second quarter of 2019, also includes a gain on the sale of our small business operating segment.
  5. All share information and balances have been retroactively adjusted to reflect a 1-for-5 reverse stock split effective as of July 5, 2019.

22

Net Cash and Other Financial Assets

Net cash and other financial assets is calculated as cash and certain other assets and liabilities, including loans and securities available for sale, which are partially secured and offset by related credit facilities, and working capital.

Three Months Ended

(in thousands) (unaudited)

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

Cash and cash equivalents (1)

$

405,078

$

434,179

$

348,018

$

372,974

$

402,311

$

334,713

$

199,950

$

243,779

Restricted cash committed for loan purchases (2)

25,687

26,820

27,778

31,118

24,632

31,945

84,536

68,001

Securities available for sale

128,424

149,804

165,442

170,469

197,509

220,449

246,559

270,927

Loans held for investment by the Company at fair value (3)

317,458

9,621

12,198

2,583

8,757

5,027

4,211

43,693

Loans held for sale by the Company at fair value

248,344

515,307

459,283

840,021

552,166

435,083

710,170

722,355

Payable to securitization note and certificate holders (3)

(280,915)

-

-

(256,354)

(233,269)

-

-

(40,610)

Credit facilities and securities sold under repurchase agreements

(74,000)

(349,232)

(305,336)

(458,802)

(263,863)

(324,426)

(509,107)

(587,453)

Other assets and liabilities (2)

(91,534)

(108,517)

(29,015)

(31,241)

(8,541)

(12,089)

(31,795)

(6,226)

Net cash and other financial assets (4)

$

678,542

$

677,982

$

678,368

$

670,768

$

679,702

$

690,702

$

704,524

$

714,466

  1. Variations in cash and cash equivalents are primarilydue to variations in the amount and timing of loan purchases invested i n bythe Company.
  2. In the fourth quarter of 2019, we added a new line item called "Other assets and liabilities" which is a total of "Accrued in terest receivable," "Other assets," "Accounts payable," "Accrued interest payable" and "Accrued expenses and other liabilities," included on our Condensed Consolidated Balance Sheets. This line item represents ce rtain assets and liabilities that impact working capital and are affected bytiming differences between revenue and expense recognition and related cash activity. In the third quarter of 2019, we added a new l ine item called "Restricted cash committed for loan purchases," which represents cash and cash equivalents that are transferred to restricted cash for loans that are pending purchase bythe Company. We beli eve this is a more complete representation of the Company's net cash and other financial assets position as of each period presented in the table above. Prior period amounts have been reclassified to conform to the current period presentation.
  3. In the fourth quarter of 2019, the Companysponsored a new Structured Program transaction that was consolidated, resulting in an increase to "Loans held for investment bythe Companyat fair value" and the related "Payable to securitization note and certificate holders."
  4. Comparable GAAP measure cannot be provided as not practicable.

23

Reconciliation of GAAP to Non-GAAP Financial Guidance (1)

Three Months Ended

Year Ended

(in millions) (unaudited)

1Q 2020

2020

GAAP Consolidated net income (loss) (2)

$(5) - $0

$17 - $37

Adjusted net income (loss) (2)

$(5) - $0

$17 - $37

Stock-based compensation expense

19

79

Depreciation, amortization and other net adjustments

11

54

Adjusted EBITDA (2)

$25 - $30

$150 - $170

  1. For the second half of 2020, reconciliation of comparable GAAP Consolidated Net Income (Loss) to Adjusted Net Income (Loss) cannot be provided as not practicable.
  2. Guidance excludes certain items that are eithernon-recurring, do not contribute directlyto management's evaluation of its operating results, or non-cash items, such as expenses related to our cost structure simplification, legal, regulatoryand other expense related to legacyissues, acquisition and related expenses, and other ite ms (including certain non-legacylitigation and/or regulatorysettlement expenses and gains on disposal of certain assets).

24

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Lending Club Corp. published this content on 18 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 February 2020 09:02:27 UTC