San Francisco-based FinTech LendingClub said it had its most profitable quarter in company history Wednesday (July 28) as the newly minted lender completed its first full quarter operating as a digital bank following its $185 million purchase of Radius in January.
In announcing its second-quarter results for the three months ended June 30, LendingClub said its revenues grew 93 percent as loan origination fees more than doubled.
“This is the beginning of a dramatically enhanced earnings trajectory for the business. Our transformation is fueled by our competitive advantages, which include our 3.5 million-plus members, deep data capabilities, marketplace model as well as our more efficient operating platform,” LendingClub CEO Scott Sanborn said in the announcement.
Officially, the 14-year old FinTech said quarter-on-quarter loans originations were up 84 percent as the company “returned to market leadership and leveraged our expanded predictive science and credit decisioning capabilities, which drove a substantial increase in our end-to-end application conversion rate,” according to management.
Its marketplace revenue surged by 86 percent sequentially, mainly reflecting 105 percent growth in origination fees and a 132 percent jump in gains on loan sales as loans sold via the marketplace doubled.
Moreover, LendingClub reported that deposits increased to $2.5 billion, helping fund expansion in the bank’s loan portfolio.
As for its overall financial results, LendingClub posted $9.4 million in consolidated net income on $204.4 million in total revenue for the three months concluding on June 30.
Management said that LendingClub’s $9.4 million in consolidated net income included notable items of $56.7 million, which encompassed “$34.6 million of Current Expected Credit Loss (CECL) provisioning which reduced reported earnings and reflects rapid growth in the bank’s loan portfolio, $19.6 million of net revenue deferrals on retained loans, and $2.5 million of non-recurring expenses.”
The news comes as LendingClub reported as part of its first-quarter earnings in April that loan originations increased by 63 percent quarter over quarter.
“We had a great start to the year, accelerating personal loan origination growth by leveraging our strategic advantages including our customer base of 3 million members, our data and technology capabilities, and our newly acquired digital bank,” Sanborn said as the firm announced its first-quarter results.
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