Lending Club’s 3rd Quarter Earnings

The industry bellweather Lending Club announced its earnings this morning before the opening bell of the stock market for the week. The consensus of 6 analysts that cover the stock, according to Zacks Investment Research is an EPS (earnings per share) of -$0.10.

Let's see how they actually did.

By now you know about what happened with LC this summer, the management shakeup, the loss of confidence in the platform (which we hoped was temporary) and the appointment of Scott Sanborn as new CEO. His job has been to restore confidence and right the ship.

It appears to be working.


EPS came in a penny better than estimates with a loss of -$0.09 per share or a net loss of -$36 million. This is better than the 21c per share loss in Q2 but worse than last year's Q3. This same quarter last year was LC's first profitable quarter where they earned $11 million.


There is reason to think that the worst of these spring/summer incidents is behind the company now based on new loans originated on the platform. Originations are up by 1% from Q2 to 1.97 billion although they are down 12% from the 2.24 billion originated in Q3 last year.

Operating Revenue

Operating Revenue is up from Q2 by 10% to $112.6 million and down only 2% from Q3 last year, a good sign with originations down from the comparable quarter last year.

Also in the earnings report Lending Club  talks about other news like an agreement with United Airlines, a $1.3 billion platform purchase by a division of the National Bank of Canada, and its venture into auto refinancing.

In the Operating Highlights, there's some really good info here. One of the most interesting pieces is the Originations by Investor type.

Managed Accounts are buying up more loans from 35% to Q2 to 55% in Q3.

Us retail investors are holding steady at 17% and 14%.

Banks and other institutional investors, the area of concern after the summer, have come back from a combined 48% to 41% in the current quarter.

Check out the press release for yourself and see how Lending Club is regaining investor trust.

About the author

Stu Stu Lustman, the author of this post, is a Credit Analyst by trade trying to bring Commercial Credit Analysis techniques to the world of Peer to Peer Lending. Check me out on Twitter, LinkedIn and Google+

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