Q2 2024 LendingClub Corp Earnings Call Transcript
Key Points
- LendingClub Corp (LC) reported a 10% sequential increase in originations, reaching $1.8 billion.
- Pre-provision net revenue grew by 13% to $55 million, and GAAP net income increased by 21% to nearly $15 million.
- The company continues to outperform its competitors with 40% better delinquency rates across all core segments.
- LendingClub's structured certificate program crossed $3 billion in lifetime originations, providing an attractive alternative to warehouse lines or securitization.
- The company has successfully lowered the operational cost to originate a personal loan by one-third over the past year.
- Despite improvements, loan sales pricing is still down more than 300 basis points compared to three years ago.
- The company anticipates a step-up in expenses in the third quarter related to continued volume growth and higher depreciation.
- Provision for credit losses increased to $36 million, driven by higher day one CECL provision and a $5.3 million reserve on a downgraded office loan.
- LendingClub's net interest margin is expected to be flat to slightly down in the third quarter.
- The company is still facing challenges in reengaging banks to purchase loans, with expectations for bank participation more likely in Q4.
Good afternoon. Thank you for attending today's LendingClub 2Q '24 earnings conference call. My name is Sheila, and I will be your moderator for today. (Operator Instructions)
I would now like to pass the conference over to our host, Artem Nalivayko, Head of Investor Relations. Artem, you may proceed.
Thank you, and good afternoon, and welcome to LendingClub's second quarter earnings conference call. Joining me today to talk about our results are Scott Sanborn, CEO; Drew LaBenne, CFO. You can find the presentation accompanying our earnings release on the Investor Relations section of our website. On the call in addition to questions from analysts, we will also be answering some of the questions that were submitted for consideration via e-mail.
Our remarks today will include forward-looking statements, including with respect to our competitive advantages and strategy, macroeconomic conditions, platform volume, future products and services and future business and financial
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