LC - Earnings call transcript Q4 2024 | LendingClub Corporation

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Operator

Good afternoon. Thank you for attending today's LendingClub Fourth Quarter '24 Earnings Conference Call. My name is Cole, and I'll be the moderator for today's call. [Operator Instructions] I'd now like to pass it over to Artem Nalivayko. Please go ahead.

Artem Nalivayko

afternoon. good and you, Thank Welcome to Conference Year Earnings and Fourth Quarter Call. Full XXXX LendingClub's

today our Joining Sanborn, talk to me about Andrew CFO. CEO; results LaBenne, and Scott are

the accompanying You the website. our Investor Relations earnings can section presentation release find our of on

addition e-mail. call, from questions answering in also were submitted analysts, questions of the On that will for be to the we some consideration via

products advantages volume forward-looking today including with future competitive will and our platform conditions, include statements, services, business and remarks future macroeconomic Our to strategy, performance. and and and pricing, respect financial

by based actual we forward-looking these as future differ Our are release may assumptions, on current materially we that information of statements expectations results differ presentation. undertake to Factors these statements from obligation are and described to cause those could earnings a contemplated update result today's press forward-looking and or new these make that in on materially statements. events. call Any results no and this

today also Common Share, Our Per to on and Net Revenue, including Pre-Provision Tangible Value include Return performance, relating remarks Equity. Book and Tangible non-GAAP measures Common our

and like You measures to over a today's And comparable the directly use more GAAP on to to I'd presentation. turn release Non-GAAP the reconciliation Measures Scott. most earnings now information can of find and in our call

Scott Sanborn

with we our looking at to do the came XX% to how you, Revenue total I'm net accomplished. originations up Hey. We quarter, Net banks and operating company, XX% everyone. million.Â Stepping in positioned and of fintech the extremely on new we've first how year-on-year. for financially. to agreement bank fourth and at year We XX% Artem. total, exited the the In Welcome, strategically the we time become up Thank feel the back high great revenue year, were so. executed a successfully about was year in Pre-Provision both what up one pleased and $XXX

marketing industry-leading better our outperformance while us set. grow credit than enabled to innovation efficiency. product with We delinquencies originations maintaining competitive Our XX% our more maintained than

fueled quarterly We performance loan bank asset increased to balance compelling to product, we our prices. launch the in deposit advanced adoption of increases sheet our driving by and drove improve sales X% member consistent of the our mobile of We Our app LevelUp savings lifetime X%. average XX%, consecutive our by XX% strategy, U.S. compared award-winning by grew base engagement and value. to our

consecutive a management are hold technology X/X year.Â We status growing also have is investor investors And both from of marketplace healthy $X percentage, total returns, on and when marketplace disciplined pipeline our X where returns to and from looking our foundation. our year billion rating roughly than is year-on-year. over XXXX product, We demand. a our points rating our is investment-grade credit, in platform, to QX, continue up we for the rated loan flexible now compelling enabling including investors will of major in close volume basis result certificate loan less who increasingly structured strong with ahead to who forward trillion quarter, growth open a build we're for rating product growing. This the an data structured the first program Critical build risk are advantage, returns $X.X us we crossed and as in require where to innovation XX credit, To our attractive with is have rated with by loan we've that collectively points our on expected bank, and supported continuing steady a assets. We're chartered a private the spread our currently investors. These towards momentum consistent success, nationally agency and originations. increasing provided in as tighter combined foundation now have quarters marketplace demand access X% seamless transaction. with purchased our to security. bank been roughly from over banks drawn the program, of work on sales to coming insurance than the XXX who prices, we we basis in sales The that course this demand senior by of working transaction up in which the directly XXXX. loan expect in entered insurer materialize represented typical our Demand first to an of the our majority companies These

time, channels to will, trajectory, and favorable loan back Based dormant set currently improvement expanding on as originations. into back grow enter into Continued over channels QX begin pricing we testing a marketing in to our we broader plan more further support of seasonal economics the way period. marketing exit sales of our our

accelerate growth eager to as we year. our We the are move through

and highs, to As have card members. are before, translated and our I've costs for those said rates interest historic higher credit increases at balances

For over represents increase is reference, ago, LendingClub is that deliver. opportunity paying $XXX month savings than a they an That per huge XX%. few paying are than were members more to years a more our now of which just uniquely increased well-positioned expense

their consolidate increase they is XX of Not members value quite score credit only Our also average card proposition do LendingClub, save compelling. debt credit they an our points. when through

our to success. ability experience In members' proposition tailor value to fuel our needs amplifies savings, helps addition providing and to our our

tool, issuance XX. we our Score a efficiency.Â After lift an existing to For that them app our edge while efficiently second app. TopUp through loan months Innovations began satisfied marketing Promoter our step a member the customers results of flows X borrowing competitive give borrowers loan to give to repeat approximate through highlight the more urgency year confirm results have help launched marketing on the increase and engage new dollars enrolled experiences Net strategy is management members. Therefore, the like engage us DebtIQ been year easy of monthly a consolidate web-only functionality personal to XX% a payment.Â The app offering and members, XX% is acquiring We with stay to to per over loan mobile ago, a example, new to ago maintaining will their early outstanding a way card with XX% users further and issuance balance in compared TopUp an of early of member and nearly frequently high-engagement another with propensity in includes versus our loan higher our in monitoring and members enhance demonstrate and app the and early their for DebtIQ This refinancing debt credit coming members. engagement value current of stage, which debt that take top features. plan their in Even to a its debt. product the driving increase we and

excited enter We on quarter's by version plan with with we Our be DebtIQ sales debt will contextual marketplace loan demand the marketing our offers which improving, new to we have and third user deliver. who's to LendingClub as roadmap, and like includes credit that, growing, features the we to last proud and made what ambitious happen. award-winning of like move able improving been investor release as of engagement, of I'm quarter.Â Looking mobile originations entire the engine Tally's product adoption our shareholder taking card That prices enhanced increasing And it has and automated our through innovate an innovations thank efforts I'd plans accomplish. for DebtIQ closing, hold, management accelerated continuing accelerating team extremely returns.Â In the linking, technology. and team restarting, acquisition to ahead, on and I to payments, consumer app growth, year, are

in the to turn it to over Andrew, results through you So, detail. go I'll

Andrew LaBenne

we Thanks, were Scott. I I year. just also the want to to and able this accomplish of proud team add that what am LendingClub

were Originations which across can have breakdown that, underwriting maintaining the XX% investments time, turn was innovation X marketing the to results, of you and Our of We continued over let's grow presentation, XX programs. go $X.X into through a product while us billion details a our energy, the of from financial With put to great our standards tight with and quarter, earnings the in which in you see move driven by XXXX. originations increase we starting as originations. funding efficiency.Â If resources industry-leading originated Page year-over-year. position

will economics. from loans allowed more of was of You $XXX that encouraging the and separate development quarter, return this sell banks the the portfolio seasoning quarter. better an to our a whole disposition extended million sale note is mix by as shifted This beginning complemented at the us at

million strong down and expenses. as well PPNR last year, the shown break up unique $XXX improved and call was XX% that quarter of I'll loan the XX% for in from sale less range million, the at sales the pricing guidance a These revenue $XX results for to revenue noninterest higher our and were is economics as marketplace few as further our Page of reinvest on enabled as out mentioned was improving Revenue end expenses.Â As us the enter quarter we $XXX items revenue on which net and XX, to prices. total Our the sale year. marks loans move total quarter, million prior from million retain $XX previously of of million. more due Revenue, investment benefited execution favorable up $XXX in from well PPNR, quarter by the as to came to as million same held above or $XX let's $XX for Pre-Provision Net XXXX.Â Now driven high-yielding million loan I

in the funding quarter.Â On quarter low purchase mix lead down lowering costs of we extended driven main higher and in believe our point highest-cost was sequential cash this interest funding executed the of which saw portfolio margin after We which was billion sale. banks will the net $XX seasoning noninterest the million the as the $X.X interest of price deposit deposit the last a our quarter was as during X% cuts same net quarters. quarter, assets at in we of to the million prices, our improvement income, as the cost coming let's over X.XX% each primarily reaction by as $XXX well revenue, in driven of as the returned driven to prior starting The This from into in up last interest-earning quarters. quarter, which the Now both certificates million with our go let's improved whole structured well from CertificatesÂ program net quarter, X by the $XXX customer, Fed this improvement our XX% year. QX. It's change X rates loan as further was third represent planned margin of was you increase have in our sales growth driver a $XX Slide up loan $XXX can to expected. XX, see The commercial to platform.Â Now components quarter on the the in by income.Â Noninterest will ourÂ Structured in noting was same seen slightly of from loans This substantial income year. interest the worth in the was exit million million in improvements increase move

pretax purpose. We keep were technology developed our Now XX million expense.Â As please a software. development due turn the of primary driven items. increase PPNR, flat did origination refers to higher was our of to I component which depreciation longer spend step-up X some internal result expense million. our indicated Page able presentation, impairment by the quarter, purchase, which had to noninterest to the was base of marketing of for work The This in expenses no in last $XXX at line, our $X.X made of year-over-year Tally coming of second despite volumes internally fit our

customers. efficient stronger LevelUp in First, to more be response allowed savings us new our customer the bringing in product to

we Second, to we held-for-investment of the do in a acquisition as first higher will marketing expect loans marketing quarter, the expenses more we deferral the channels up had in support expansion period.Â In future quarters. of spend move retained

was Day as quarter CECL items. was Provision $XX provision XX.Â Provision smaller due losses to of to credit held compared our for we was up X $XXX the higher to Page also due quarter of to on the year. Now in primarily The during loans stepped retention turn same $XX prior for investment the to let's million million million. increase higher X

held-for-investment million, million claims.Â Taking second first is we reserved. the insurance for qualitative perform loan increase overall office same our now quarter unemployment the First, due property charge-off X.X%. on based charge-off took year. ratio net improving reserve the on the previously the proceeds net quarter Without continues to in charge-off The $XX earnings higher credit remainder a sale our down move for the guidance, real fully and which our in of would we charged-off was X.X% the the as $X.X portfolio, noncash call. Fed rate That the on net stable by benefit, reserves the year. $X.X in quarter impairment commercial the net rate quarter million was charge-offs income from have software increased estate on portfolio an step year. and $XX this let's mentioned inflation legacy discussed X.X% Net been quarter, additional Separately, evidenced loans. to to from recoveries the that our last benefited million rate we economic modest larger-than-usual in assumes to for cut back, includes employment from Moody's earlier.Â Now of second one I prior The same of in projection future post-tax well half a of from which in a

to guidance expectations. to will quarterly We use near-term continue inform

give exit growth also QX our and our are providing you enter trajectory better we We expected rate earnings XXXX as to a of a sense view into XXXX.

at billion year-on-year the of originations anticipate the to XX% $X.X quarter, For billion, up midpoint. we first $X.X

improvements sales favorable gaining paid We we enter additional marketplace as marketing are sustained channels that us and third the open confidence seasonally the price up will in allow quarters. the to second

as able or above expect roughly quarter as XX% in volumes quarterly acceleration Equity, the support above range billion at year-over-year levels.Â We of at in quarters. marketing through gradual $XX an current million on continue We Return move first in ROTCE, XX% plan growing or in our improvement million midpoint, to originations or the in first the quarter delivering and to $X.X income of in Tangible move Common the with exit to the year be the PPNR plan we expect quarter, increase through positive to we up fourth continue earnings net reflecting to year. $XX to the and in loan growth future the We paid

we to parting quarter. X% all, ROTCE Our are an we goal as XXXX.Â Let it for the All in positioned enter some the is Scott fourth momentum over on to with a build me turn exit to had and great in thoughts. XXXX back

Scott Sanborn

Drew. Thanks,

in minute Before we acknowledge to just fires Los devastating close, I'd the like take to a Angeles.

to tireless activated colleagues and first turn and friends, responders our their efforts.Â With aid firefighters, members, over plans have family, who've affected. for and We the been like heroic area, thank many in will are that, our thoughts it with customers and workers, to also to support questions. our I'd the other employees, I

Operator

first question Instructions]Â Our with is BTIG. Vincent [Operator from Caintic

Vincent Caintic

rate if And us how growth the just that is then the can help volume? contemplating curious, Just and guidance. seeing affect the of maybe a question what on understand recently? could might about the first experiencing pricing the sort you're of pricing in it flat longer volume of sort over quarter-over-quarter, if been talk first course quarter you've why especially I'm in of interest you and end change expectations, the curve XXXX that you versus

Scott Sanborn

I'll start with volume. on

of quarters I our think customer we quarter, last typically QX signaled seasonal of are challenging and most in response kind QX, interest. terms overall

pattern, it's to our QX I think in typical if look see past at pretty line to roughly QX. originations you

year We've models, big off seasonably all Doing last that driver for doing, beneficial us, really it which testing, going in work. on maintaining than it for in to creative response especially these be got quarters of more reactivating more driver well. discipline The we're to planning redo our to is given the on doing expensive quarters. was And is actually be that kind channels, that going that. we're marketing case better credit. think as big us I the all

QX take to Drew, we them really from there.Â In that testing things you want and the start turn terms through that so start of So those can the pricing, work goal quarter do to would be one? we build actually on way.Â We'll exit our to as in

Andrew LaBenne

Yes.

prices. assume In I terms you're -- talking about of sales Vincent,

even in without year sales maybe prices, throughout over further done the X of rate we'll Fed, year, the as cuts later sales we expect terms the prices raise quarters. the to doing still last or able we've In be

we of rate types So the originating performance have and will continue about I and environment, the selling, on great on of the little that depend we're traction mix all buyers and feel the pace of the buyers think the been in that that bit make to of active. but space loans very and a

we're encouraged we're seeing. what So by

Scott Sanborn

we to There's remarks. on our difficult. we about And feel about what maybe X/X QX, of this to Again, I of down the nailing are can and volume Yes. in the said up said the think diligence pipeline. bank due timeline just before, touch we've good which prepared in be banks, exactly end

that Fed. So the prices without up, includes the about prices an rated talked ways product any on increase we in we've the got get call to the another that to help as in from meanwhile, way other drive and

Vincent Caintic

then long And more Great. you that. for Okay. focusing bit maybe Thank a term.

loan And is wondering in and run helpful guidance I'm sort about in the volume just metrics. quarter quarter and fourth volume we that we've And that the plus XXXX there. in past we rate for your does ROE, it in the take seen then like in both the about So that range. long-term long long-term think your should $X maybe the to rate? and when to to ROE ROEs, get and what growth ROE of guess was marginal XX% rates, per just volume XXXX, was what think I marketplace volume. see mature the of think it I in billion run terms

Scott Sanborn

Yes.

I'll take first So volume.

data the back years, If a we there a the billion $X that we you can beyond eventually get credit with, call amount let's savings size why TAM of provide, even tighter it, and and can the we can't of don't routinely we've box. see some to on shared been you given call look in issuance, over the X-plus billion the $X past quarter see at, it, we've of

it versus is, timing of of the this reasons dropped into when split I QX a kind the years. the be of QX exit reason year, thought as we really mail about think guide one the mentioned, the haven't we question I will we couple direct in of on

is digital pace those done Drew, It's over exit we'll want the We're get which We that is exactly. to predict there. -- haven't destination paid quarters. to. course in it been creative, response and search, hard tune And the or of we'll we models at from and couple the volume the our active that right That's get grow experience. ROTCE. intent belief rate in you user continue the our to next confident if of either our advertising, we find tuned, not

Andrew LaBenne

Yes, that rate we're XXXX, exit to ROTCE for I a point. I improving the same going than destination greater through was mean year our to meant that's we're XXXX XXXX and where and passing as be giving make is to X%, not beyond. in performance

obviously, XXXX long-term haven't So a improvement. to further we stone of expect expect on stepping the given, we the where we guidance of end be, but still to would be

Scott Sanborn

Andrew one assuming And comment, back mentioned, Yes. the the year. one rate half other comes which we're in of cut,

benefit our and that material there that real from results will the year. there's be things shift So obviously Should constructive. no in the change in tone direction, this other

we're the giving year. from assume benefit rate doesn't within really So broader much environment the the guide

Operator

Our Sandler. Piper with Capuzzi next Brad question is from

Bradley Capuzzi

my guys, for thanks question. Hi taking

the higher of outlook, prime, has some origination performance near-prime, consumers? change cohorts consumers loan between given between Just the there any lower-end of regarding been different and

Scott Sanborn

Yes.

today let's not it. right call about it, elevated we're on but maybe thinking presentation lower, say stable continuing multiple of way some you across So hear board, I'd is versus of a certainly lenders from can categories. degree in the management I across it's year ago see based you to think but that's materials, the is what performance quite active to static. what stable similar The see required, of the

are seeing with X that our conclude and line call bit We with a and much in of hesitate But end that there, board brighter to margins to we're there. say space to we're out. to due some potentially and bottom here maybe consistent parse seeing I'd the spot say I'd performance spectrum, it, broader coming â€“ down tweak expectations the a continue our our the at of where outperformance across that's consumer little underwriting versus expectations. those difficult near-prime the the a own outperformance. in on there. Things in, maybe pretty

Bradley Capuzzi

a your more sheet, there any then improves especially And your XXXX? talk going Can bank buyers, then there especially. you to your since hold And loan terms just decision forward? is capital on just about we're pricing strategy balance update sale the from pacing as out operating year in about of to loans deployment coming from agreement bank throughout expiring,

Andrew LaBenne

Yes.

investment. $XXX sheet million this we loans we on into balance put terms quarter held for So in of held

we continue maintain hold held times to a see the will going sale want of year, quite retain and not we'll HFI as of the think And sheet. we go amount similar through increase amounts call, be well. level we already obviously, loans continue is of $XXX we couple each in level on million there, I decision-making but in to some there. inventory sold to the at sale out look portfolio because healthy drive will to and in we'll demand balance think quarter-to-quarter. the the the one to price portfolio. that the a also may quarter, we the demand for as for hold But $XXX replenish mentioned We'll on held as of million the HFI some of of to we're areas look of sold we We

Scott Sanborn

conditions markets even at significantly. of outside sure I'm general, the us. operating capital in in say improved I'd you're marketplace quite have activities looking

seeing upfront like what with we're to then the and ongoing move their buyers portfolio an very So maintain to and and held size been have can we size. the purchase this because capability available is to The intent that strategy decent into inventory sale, to is successful, sure that for that make want has year. lean portfolio building to large a get started of we that

that. is So facilitate plan to our

Operator

question Switzerwith KBW. We have from Tim a

Timothy Switzer

your talk you're the nice the to managing of And quantify what really Can helpful. quarter. deposit commercial your if on And able all expectations forward? a customer that It's would this what the at on are costs be about planned response? costs been decrease customer, you maybe deposit exit very has deposit going

Andrew LaBenne

Yes.

had few which on factors, call. we I the So outlined a

this with just many we that just contractually, you mentioned commercial that quarter, was up. in on for customer one funds And first had the The was that fourth Fed And us years. above large been deposit. were contract paying

to that was which last so radius relationships. able off the legacy And exit deposit, we our of of were sort really large

have QX. we going benefit go more to carryforward into as that's So

As we liquid if don't But to you know lowering deposits, of or â€“ XX% sort what I about that beta quarter. Fed to look this at deposits pace able reprice compared at effectively was I were we was quite forward. the it the encouraging pricing the our as think rates deposit keep an the I'd at non-CD us the competitive that happened. we'll And talk competitors down also continue in moved, many I And say, was I dynamic around in moving you allowing to with about to deposit market also line [indiscernible]? funds level do of savings, very more rational, Fed want think costs going guess.

Scott Sanborn

yes. Yes,

August. in We $X.X able to launched in total product in bring billion So that were deposits. we just

for multiple experience. to good reward seeing won behavior. And very, line promise the there say with trying for we're We've So where very people financial successful. we're brand awards that in behavior engaging in the

get XX% that. customers adding month. And of savings than your doing seeing what to rate you you every is are best So if we're our more account our are

the successful for good both and it's So I for think has us. been product a customer

down. coming and tool another So us gives are in toolkit it rates as to -- the manage

response. pretty pleased the with So we're

was to the some fact, really we're on expenses I in of mentioned, able think strong. was efficiency that save actually to high customer the response because so our and product response Drew marketing

Timothy Switzer

on that Okay. rest going the Got originations just overall $XXX QX had for not why XXXX? so, it. of an potentially you held profitability? And a and to increase loans Again, for continue the as not about increasing your a million opportunity over HFI comment or for mark. follow-up have I investment if was your your loans And comment

Andrew LaBenne

foremost. see we'll of low first where That's being at were and us take we up. it quarter-by-quarter to down this don't Yes. determine I the out play and I Listen, we see think, year. first things as of beginning how all, as end exactly

least up. -- So a to have moving so into same sell back but as for held some at But as of sale think bit and were buyers look we'll at we we'll where be coming up time, the portfolio under QX. little building I probably we more the that be prices QX, in inventory we available keep are

Scott Sanborn

intent total between portfolio the held sheet balance based investment conditions. the senior be market might the for note, The on and held will division growing for different Yes. portfolio sale change

Operator

We Bologna from Giuliano have a question Compass. with

Giuliano Anderes-Bologna

XQ be at normal throughout you're what is the plus quarter a implying kind When is of the about Maybe from outlook, a for the for questions guidance digging year strongest. the it should XQ usually fourth I'd thing couple kind the are And guidance of the into implied one second the I the ramp have and the and first be billion seasonal of that. fourth quarter, to around kind and is Or kind fourth of XQ what's curious thinking should role? weakest, is we the think quarter think the any about point? that seasonality, impact with having of we this weakest quarter about XQ, usually $X.X

Scott Sanborn

Yes.

if in way to partnerships, it new QX. test new the products taking seasonality and be volume or just hold think actions there and and we're again, things about drive strip and QX So you about we experiences, what out new QX growth, we our may then doing do QX any and push we is let's grow typically to basically channels, say into try

is a just QX seasonality the past the line of a right. fell, where there in of due kind some Christmas and say, in middle bit this holidays Both of and roughly the So counteracting the to on is hitting New little week, say stronger us But roughly, years. if QX, see. seasonal QX general roughly as an we flat. typical that's pressure there's X% up or X% and X%, try down, I And to typically maybe than hold X% mean, that rule, inherent ramp by a Year's

Giuliano Anderes-Bologna

credit the run That's private if billion you capacity of earlier execute I'd you rate. from of getting the of within or billion incremental maybe the loan trends had kind there had of buyers, when that, of of an Do quarterly historical was originate? certificate the helpful. you fill $X you that to into about or was some you curious Can think kind push could question be how And that $X banks any about volume rate or get programs. what your -- of and or kind your you buyers? marketing the And in new does kind time structured to dormant is? through and and typical sense rolling void look? structured in funding kind of rates curious response reengaging kind a could response the of that I'm new out the is to buyers the what or that credit programs have step incremental product beneficial volume enhanced if box turnaround

Scott Sanborn

so I for history. starting I'd mean, We've scratch. from channels of been these say we're active in not Yes. one, most our

which have sense to range will So we highly optimized outcomes getting the of of some some best, the is time. like what we range and take

there last can capacity, mean, expect more really we hey, fill on purchase and of what everything demand it's to over turn QX, of evolved why our producing? demand, more quarters the to started in markedly production. increase in shift meaning is That's really are saying, we marketing we is produce, or have and our of terms In which we continue yes, the is as time to QX, I what's rate, which couple what's we're selling is really think marketplace over than called we we're

about we we're the sell not our loans produce. ability to that concerned So

Giuliano Anderes-Bologna

HFI and some this how What percentage of go -- you about as about further kind commentary. some as of the channels your should of into that just think reopen point? kind of expenses and obviously volume those push where bit -- that that some maybe into newer -- what's we channels little be of at marketing thinking other loans. kind more million of of $XXX-ish a one where one some on it some benefit like grow HFS based the last seems you within the HFI on And and kind you volume. pushing as book the a percentage of then to of There's of channels more and kind marketing should push of the might kind And implied

Andrew LaBenne

accounts. as in those upfront we'll efficient of volume or we won't the Yes. channels get you So expense in think or as expense the most bit of now, of we're will, defer well. have also HFS, to defer the CAC, Also, as origination bring I going clearly in fee if expense. kind mean marketing identifying I that grow, rate reminder, marketing little right? and what right the a recognize if level we not more to increase marketing we're a shift But you're our we as is to we the

make so a trade the that that's when And in net-net, shift. P&L immediate we positive

look think grow, I So trajectory at look we upon would as and improve be as you at can and move history volumes, over what be but to we can back higher time, always it to efficiency that you our see a similar like marketing looking see can our expect if forward. we'll we we

Operator

Partners. Research from next with Bill question Our Ryan is Seaport

William Ryan

the PPNR for guide QX. First, on

little and couple a expense in a It's special the million. you of out items million the fourth $XX in to called million also quarter, fourth $XX you $XX bit about million consensus, talked the quarter. $XX and below reported You

being So talk as could QX number relative we $XX expense what of bit. it driven you of it Is drivers to lower a or about kind bit the little of expectations? If about of of million, key revenue that think sort little the some QX? are the $XX like to a million

Andrew LaBenne

Yes.

both marketing levels that in is to think I getting happen QX, spend, probably the spend the in channels the but deposits also be deposit marketing probably back ramp of increase begin. piece going in most levels an will will to which relevant normal and

as expect of we As $XXX that revenue million throughout a PPNR as in change not the coming will do sale to go we'll we through assuming into factor up bit, a spend That's well. well. had go marketing probably biggest QX higher but that as go from level the we're portfolio go and some we marks benefits little repeat QX, as we have We quarter-to-quarter.

revenue that up, but in So to have QX we flat we coming won't had those through. we benefits expect

William Ryan

out the everybody on -- bit the just the competitors you for Is plenty on a landscape? competition. there just a How of potential call Or it some more it's getting And on. Obviously, aggressive? volume describe quite origination the is there? Okay. watch what's follow-up people competitive would of going

Scott Sanborn

has shift bit competitive, as Yes. way this little No, we We seen market the deposit I roughly I'd landscape. it talked before, rates, haven't said so. be about really any been at on in say, always competitive a continues and up. the to were we and XX% an beta

an be expect roughly on XX% at We way beta the down. to

measure much is on were on the activity, of moved and roughly to way which of measure expect similar which way at is one coupons, at and it be that a loan up, the one we competitive XX% beta look hasn't down, coupons, we you yet. If

points think we was our XX somewhere exited as between and I rate maybe quarter. basis on XX coupons the exit

there. a change seeing not ton So of

something really we more the channels. is we're at environment talked channels. about, efficient focused more but look our us, on you in shifted in since And we've what rate most if been those Drew haven't mentioned, and efficient getting and For productive what

if the we aggregators, so twice roughly some convert right. rate the else, like And rate you look our at of on conversion as at leading anybody

ability to that some demand up the a there. our we that. offer additional converted drive convert I'd from to borrower to there, lighting is feel is our mentioned, be And change about through. borrower volume ability as an really question channels in going The and demand haven't So and confident say of, just really It's it. all quite seen a to I we go way through any meaningful loan, to

Operator

with Hecht We John question a have Jefferies. from

John Hecht

the using dynamics, economic pricing or might or of And have you more sheet, securities term. time, an a but loans the Congratulations. programs highest it's extension the discussion I some reliable of of whether or some points, dynamics extended some one that there one because going guys of the is a different, over lot favorable on you lot are more first program that's consider that more probably you've now the at time. guess, for I funding of to aging. after bit factors now, have a over know guess I one markets for return talked the and perspective But or the from the intermediate about are guys holding balance is a little the

guys against guess the allocating secondary prioritize focus primary some the on question the on I other channels? you return other some than are So funding of just different capital, in of is terms factors what that

Scott Sanborn

Yes.

start, free So Drew, and maybe to feel I'll jump in.

So generally both as we predictability. mentioned is and belief in terms deliver consistency our rewarded to our in price and the ability is past, size of

believe [indiscernible]. of general, because price a lot you're not, locking are the reading about like We large in deals elsewhere we longer-term in

back, have to what continue believe And is and the seeing come buyers whole more are We great trajectory sell seen buyers price as will of if is loans. they up. we're going we're paper bank the fine

whole that in saw buying at of whole -- pricing. see are up see because they're the loans presentation, you better mix You went banks our can that you'll buying loans and

there. move the there's way too, When comes rated we'll to which is So certificates, a up, it get those to prices product. the

drive to XXXX, pricing, to the going So will, how again, the more course of being into it's drive in and price top-line mix static that which deliberate drive feed to over we are And lift marketing be to increases. we in we're growth. expectation within us mix the evolve faster to allow continue also that able our

John Hecht

ability kind hear goals But follow-up did is the marketplace, modeling striving you there to think what a of think all grow your you should that wondering, with question. -- said of I then --I of that balance even this growth kind respect for do capital the you considering you a sheet purposes? to just And capital and for Scott the range parts levels all buckets use I'm balance secondary you mean, and I say your did of -- growth --what's the sheet, think you're Okay. year.

Andrew LaBenne

Yes.

the the since growth. experienced years actually bought year, several this pretty we obviously sheet -- robust bank, we've experienced we balance last So

We expect balance growth to growth, previous probably still industry. we this sheet terms the of the that levels robust at year balance to not grow expecting the we're in again quite sheet industry above in years, compared grew but

excess we As have still far the that company can bank. down as deploy to the we capital holding capital, at

We're at capital our viewing to it isn't growth. a a constraint. as So point not this constraint

Operator

Our is from question next Smith with Reggie JPMorgan.

Reginald Smith

change imagine higher and sounds you shifted like to where of and So over? the here. piecing the on It or I you to here sites. your My shift a Like together follow-up? search of you And there are? focus have search, turn have aperture, what of aggregator from kind guys would guess, you'll marketing they kind there paid storyline service? direct way as guys any kind more price-sensitive thinking mail and shifted how I as rejections of historically a I'm Is then does expand kind And of one, there away correct? about in the rejection you that then down trade-offs? and then have paid are how monetize some are I mail is people there's you question, maybe applicant probably rate. are a pool, as direct get two, those the changes that how move Like

Scott Sanborn

Yes.

when down XXX an to the marketing obligation to margin way as channels, an to rate I'd aspects you went mail call unit it, the other And what ability shifted to, down. Reggie, have use So down, is XX.X%, there pricing say expensive on channels, par environment the from and XX%, went loan more when direct afford example, channels credit. meant you came are provide some prescreen which

an some be So an thoughtful and that. to you obligation environment funding you uncertainty if provide where have credit, in there's about you're to got

program accurate We'll maintain we'll to XX% as mobile That customer we amongst the how as how we point and as So -- repeat we that's kind repeat partnerships the base, retrenched go into as business and to as that to other of why most we well app When our are but existing included well. and the â€“ price well others, criteria, new efficient in own be that and drive channels. the app, Lending of mobile to sensitivities back basis. top-up a invested our channels, aggregators our We our is still different XX% appeal channels. roughly our audiences, credit there credit your can some different kind other doesn't box. channels it monthly channels, change in different maintain on different same

For giving you're versus a on offers. comparison site independent example, when you're shopping

to to that that's all we any or returns into shift I go of our see categories. in factored all return factored is kind wouldn't of our of ourselves as yes, investors when there pricing next those question an a on And strategy absolutely, meaningful the is think delivering do how and We to that is because all about discipline So growth strategy. to The expect we're after into into and that strong through we we up that can our year. feed people your second is to answer open go maintaining credit, to to looks? think pretty the opportunity

Reginald Smith

that. the last few that incrementally kind curious is like competitors of well. improved leaning of your It as in last if opportunity And sounds you point, into On one has for I guys that just opportunity months? Yes. that was there was

Scott Sanborn

funnel. I would is more volume at credit the more long say the there funnel, more top the steady assuming available as box, -- of the is generating bottom a of there we're as the

would improve. we move expect opportunity latter the to we part the as into So of year, that

Reginald Smith

understand then that Got And the would to getting sure correctly. make want me. a rated. be the tranche for question I talked last securities it. senior get you This rating. about structured And the believe some of would I guys I

tranche And could the to about think buckets, equity both tranche, that essentially right sell the the you're senior else. as so tranche way Is today supported it? as the selling well more you to equity-based where someone only

Andrew LaBenne

rating sold opens security, That's of could correct. -- as could senior such you the as said Yes. it tranche buyers pool now, but on it a a be The call. the the getting spread, on senior we gets tighter insurance,

of do rating gotten from a have So to this on fee And be the economically the small more a to getting major. not way transaction. attractive to it's a verge same or it's

better and and it, So potentially about forward. the we're avenues opens certificates going it excited different for some pricing structured pretty up

Reginald Smith

more a optionality that more lot of It to by Yes. available feels I not appreciated be be a market. getting funding lot you, may that the like might ahead there's myself fully

Scott Sanborn

funding who the for you very if home. the we been through But There asset the a comes active managers, are something we've think private lot just I it's on. sometimes a market coming that's looking say back focused a very about -- active. banks insurance lot private is very I'd now. liquidity And credit talk look of because in markets all all at credit, right

about excited will in space that we're perform how So XXXX.

Andrew LaBenne

optimize the million, tighter opportunity selling Again, about it as well price, we spreads to possible in portfolio. the we're potential also A to to informing buyers. to go we're as those that informing think we how as that trying that ability best the to but get sell strategy -- we get -- as for us Reggie, The the is $XXX forward, slugs that's HFS our of available to If build need have right. these

Reginald Smith

guys the made in guess 'XX I things And for Yes. fall XQ your line. minimum. some point if is very that It you kind that billion of be $X.X than could well stronger

Scott Sanborn

we go in course competitive see are we we number. but confident the obviously, And as that the year and in plays we're update, our rolling how of larger the how to than an environment confident that. that say give being I'd that confident in the Yes. is we're again, on as execution number. And way number can out very through and through, something

Operator

over for call submitted questions Nalivayko turn the to I'd some e-mail. like to via now Artem And

Artem Nalivayko

you, All Thank Cole. right.

Drew, a were submitted and few Scott that So we via e-mail. have questions here

you're as Has company was longer peer-to-peer a is was the is, changing given descriptive? name question case to the no neobank. the something a first company when The of name appropriate any so primarily LendingClub more platform. This the management to consideration lending the full-fledged

Scott Sanborn

Love question It's and a question. observation. a this great great

lending So the all name It our investors, or retail and ambition mix. of was by were we reflect that not evolving the product worked. initially powered scope was even, really lending, does when obviously, frankly, our doing

what's is rebranding and that budget brand work the consumer it this of a for We the very be how of management. mind So have doing and do perception. to perception actually in on some influence top year our research might current

exit -- checking is its for a made the be that as The year in So about anticipate we DebtIQ but our marketing we next having yet, of the is top year. limiting we the borrowers we'll we get no our as market, current think do very name as form. into it If ahead mind. decisions experience specifically year

mind So us. for of definitely it's top

Artem Nalivayko

question. entities So you any to your here's the grow member Have considered second million acquiring base further? X

Scott Sanborn

you LendTech rippled broadly through the is guess environment Maybe, fintech through definitely I'll I and Drew, finish fintech. can start. within certainly has rate

numerous example to But capabilities, are And announced are So of that, we we we the needs -- pretty we hurdle on open an an road accelerating example, disciplined is clear. last we'll building quarter our Tally Tally, were our that opportunities that The there ourselves. absolutely capability remain that. as map. are available. acquisition to enhancing

there? a to I So what it to anything fraction was to acquire ability of the add don't you'd easy our was a cost build Drew, at decision. us of pretty know, it cost going

Andrew LaBenne

add for any appropriate acquisitions, do appropriately just extremely that M&A at been any conscious And shareholders disciplined in using and we're doing making generating sure as very of we're type wisely we've thus while capital if would that. doing ever and obviously of that I our looking we're obviously, dimension. shareholders' we that far, we're an return

Artem Nalivayko

Okay. Thank you both.

I think that's time have. the all we

we'll today. you up joining that, please Conference Fourth you have us Earnings wrap for questions, e-mail any us And So ir@lendingclub.com. Thank with if Quarter at Call. our

LendingClub (LC) 28 Jan 252024 Q4 Earnings call transcript