PR Newswire | Nov 4, 2020 04:06PM EST

11/04 15:06 CST

LendingClub Reports Third Quarter 2020 ResultsQuarterly growth in originations of 79% driven by strong loan performance. Grew cash and cash equivalents significantly to $445 million from $338 million at the end of Q2. Well-positioned for the acquisition of Radius Bank. SAN FRANCISCO, Nov. 4, 2020

SAN FRANCISCO, Nov. 4, 2020 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), America's leading online lending marketplace connecting borrowers and investors, today announced financial results for the third quarter ended September 30, 2020.

Commenting on the quarter, LendingClub CEO Scott Sanborn said, "While there is uncertainty about the economic outlook in the near-term, we are managing LendingClub for long term success and the actions we are taking to strengthen our business post-COVID are bearing fruit. Our loans are performing well, investor confidence is returning, we have improved cost efficiency, and have built a substantial amount of liquidity as we work towards completing the acquisition of Radius, which remains our top strategic priority."

We are navigating through this challenging environment by following five key guiding principles.

* Keep our employees safe, effective and engaged - Our employees have been working remotely since March with no plans to fully open the office at least until the summer of 2021. Employees remain engaged and they continue to serve our members effectively. * Preserve liquidity - We grew cash and cash equivalents to $445.2 million from $338.4 million at the end of the second quarter through a combination of cash flows from operations and additional loan sales. During the third quarter, we also fully paid off our $70.0 million revolving credit facility and paid down other debt facilities by approximately $290 million, significantly reducing leverage and further strengthening our balance sheet. This positions the Company well for completing the acquisition of Radius and also for navigating through the current economic environment. * Support our members - Since the onset of the pandemic, we have helped more than 217,000 of our members with forbearance relief and offered several hardship plans to support them. Forbearance usage is tapering off, with new requests down significantly and approximately 2% of our loans remaining on these plans at the end of Q3. * Protect investor returns - Delinquencies are coming in lower than we had anticipated, and the strong performance of our loans is contributing to increased investor demand. Both our pre- and post-COVID loans are delivering attractive returns. * Pre-COVID vintages - Internal Rates of Return (IRRs) on our more recently originated pre-COVID vintages, which are the most impacted by the weaker economy, are trending toward 4% and in-line with our historical pre-COVID portfolio performance. The strong performance reflects the effectiveness of our underwriting data and analytics capabilities, increased servicing capacity and the relatively high ranking that personal loans have in the consumer payment hierarchy. As the outstanding balances on our loans continue to pay down, the exposure for our loan investors continues to recede. * Post-COVID vintages - Early data on our post-COVID vintages indicates IRRs of 5 to 6% reflecting our focus on marketing to our large base of existing members, tighter underwriting and increased loan pricing. Acquisition costs for these loans are significantly lower compared to loans made to new members and they also generate lower credit losses in general.

* Stay on track for the acquisition of Radius - We filed our Y-3 application with the Federal Reserve in September, deployed cross-functional teams across both organizations and announced the first deposit product we intend to offer as a bank. We are continuing to work closely with regulators during this process. Post-acquisition, we will be the first US public neobank and the only full spectrum fintech marketplace bank operating nationwide in the US. Acquiring Radius will enable us to help borrowers and depositors, build deeper relationships with customers and realize better economics.

Quarter-over-quarter results reflected an expected increase in origination volume and related transaction fees, as well as lower restructuring expenses, partially offset by lower net interest income.

GAAP Consolidated Net Loss for the quarter of $(34.3) million was an improvement of $44.2 million. The improvement was partly driven by growth in transaction fees, with about half of the increase reflecting higher origination volume and the rest due to an increase in the transaction fee refund reserve in the second quarter as borrower prepayments normalized. In addition, results for the third quarter benefited from lower fair value adjustments, higher investor fees, higher gains on sale related to the loans sold and lower restructuring expenses. These benefits were partially offset by lower net interest income due to loan sales.

Year-over-year results reflected an expected decline in origination volume and lower transaction fees, partially offset by higher net investor revenue and lower expenses.

GAAP Consolidated Net Loss of $(34.3) million primarily reflected an 83% year-over-year decrease in loan origination volumes, which was in line with our expectations. This primarily drove an 85% decline in transaction fees year over year. The impact of lower transaction fees was partly offset by higher net investor revenue and lower expenses. The increase in net investor revenue was primarily due to lower fair value adjustments reflecting a reduction in the volume of loans issued and sold at a discount in the third quarter of 2020. Lower expenses year over year primarily reflected a significant decrease in sales and marketing expense, consistent with the reduction in origination volume. The decrease in expenses also reflected actions taken by the Company in the second quarter to improve efficiency and mitigate the impact of COVID.

Summary of Q3 Results

* Loan originations of $584.1 million, down 83% year-over-year and improving 79% sequentially. * Net Revenue of $74.7 million, down 64% year-over-year and improving 70% sequentially. * GAAP Consolidated Net Loss of $(34.3) million ($(0.38) per share attributable to common stockholders), compared to a loss of $(0.4) million ($0.00 per share attributable to common stockholders) in the third quarter of 2019 and a loss of $(78.5) million ($(0.87) per share attributable to common stockholders) in the second quarter of 2020. * Adjusted EBITDA of $4.3 million, down 89% year-over-year and improving 116% sequentially. * Adjusted EBITDA Margin of 5.8%, down 13.7 percentage points year-over-year and up 68.8 percentage points sequentially. * Adjusted Net Loss of $(23.1) million ($(0.25) adjusted net loss per share), compared to Adjusted Net Income of $8.0 million ($0.09 adjusted net income per share) in the third quarter of 2019 and an Adjusted Net Loss of $(54.3) million ($(0.60) adjusted net loss per share) in the second quarter of 2020.

Third Quarter 2020 Financial Highlights

Commenting on financial results, Tom Casey, CFO of LendingClub, said "As anticipated, we are seeing a recovery in originations from a low point in Q2 and a corresponding growth in revenue." He continued, "We also ended the quarter with a substantial increase in cash and cash equivalents as we executed on a strategic decision to sell loans and generate additional liquidity while paying down a significant amount of debt and de-risking the balance sheet."

Three Months Ended Nine Months Ended September 30,

($ in millions) 9/30/2020 6/30/2020 9/30/2019 2020 2019

Loan Originations $ 584.1 $ 325.8 $ 3,349.6 $ 3,431.4 $ 9,207.0

Net Revenue $ 74.7 $ 43.9 $ 204.9 $ 238.8 $ 570.1

GAAP Consolidated Net Loss $ (34.3) $ (78.5) $ (0.4) $ (160.9) $ (30.9)

Adjusted EBITDA $ 4.3 $ (27.6) $ 40.0 $ (31.1) $ 95.8

Adjusted Net Income (Loss) $ (23.1) $ (54.3) $ 8.0 $ (116.5) $ (4.8)

Loan Originations - Loan originations in the third quarter of 2020 were $584.1 million, down 83% compared to the same quarter last year and improving 79% sequentially.

Net Revenue -Net Revenue in the third quarter of 2020 was $74.7 million, down 64% compared to the same quarter last year and improving 70% sequentially.

GAAP Consolidated Net Loss -GAAP Consolidated Net Loss was $(34.3) million for the third quarter of 2020, compared to $(0.4) million in the same quarter last year and $(78.5) million in the second quarter of 2020.

Adjusted EBITDA- Adjusted EBITDA was $4.3 million in the third quarter of 2020, compared to $40.0 million in the same quarter last year and $(27.6) million in the second quarter of 2020.

Adjusted Net Income (Loss)-Adjusted Net Loss was $(23.1) million in the third quarter of 2020, compared to Adjusted Net Income of $8.0 million in the same quarter last year and Adjusted Net Loss of $(54.3) million in the second quarter of 2020.

Contribution-Contribution was $53.4 million in the third quarter of 2020, compared to $105.8 million in the same quarter last year and $21.4 million in the second quarter of 2020, with Contribution Margin of 71.5% compared to 51.6% in the same quarter last year and 48.8 % in the second quarter of 2020.

Earnings Per Share (EPS) -Basic and diluted EPS attributable to common stockholders was $(0.38) in the third quarter of 2020, compared to basic and diluted EPS attributable to common stockholders of $0.00 in the same quarter last year and $(0.87) in the second quarter of 2020.

Adjusted EPS - Adjusted EPS was $(0.25) in the third quarter of 2020, compared to Adjusted EPS of $0.09 in the same quarter last year and $(0.60) in the second quarter of 2020.

Net Cash and Other Financial Assets - As of September 30, 2020, Net Cash and Other Financial Assets totaled $579.6 million compared to $704.5 million as of September 30, 2019 and $564.1 million as of June 30, 2020.

For a calculation of Adjusted EBITDA, Adjusted Net Income (Loss), Contribution, Adjusted EPS and Net Cash and Other Financial Assets, refer to the "Reconciliation of GAAP to Non-GAAP Measures" tables at the end of this release.

About LendingClub

LendingClub was founded to transform the banking system to make credit more affordable and investing more rewarding. Today, LendingClub's online credit marketplace connects borrowers and investors to deliver more efficient and affordable access to credit. Through its technology platform, LendingClub is able to create cost efficiencies and passes those savings onto borrowers in the form of lower rates and to investors in the form of risk-adjusted returns. LendingClub is based in San Francisco, California. All loans are made by federally regulated issuing bank partners. More information is available at https://www.lendingclub.com.

Conference Call and Webcast Information

The LendingClub third quarter 2020 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time) on Wednesday, November 4, 2020. A live webcast of the call will be available at http://ir.lendingclub.com under the Filings & Financials menu in Quarterly Results. To access the call, please dial +1 (888) 317-6003, or outside the U.S. +1 (412) 317-6061, with conference ID 9448496, ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time). An audio archive of the call will be available at http://ir.lendingclub.com. An audio replay will also be available 1 hour after the end of the call until August 11, 2020, by calling +1 (877) 344-7529 or outside the U.S. +1 (412) 317-0088, with Conference ID 10146417. LendingClub has used, and intends to use, its investor relations website, blog ( http://blog.lendingclub.com), Twitter handle (@LendingClub) and Facebook page ( https://www.facebook.com/LendingClubTeam) as a means of disclosing material non-public information and to comply with its disclosure obligations under Regulation FD.

Contacts

For Investors:IR@lendingclub.com

Media Contact:Press@lendingclub.com

Non-GAAP Financial Measures and Supplemental Financial Statement Information

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: Contribution, Contribution Margin, Adjusted Net Income (Loss), Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Earnings (Loss) Per Share (Adjusted EPS) and Net Cash and Other Financial Assets. Our non-GAAP measures do have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP.

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.

In particular, we believe Contribution and Contribution Margin are useful measures of overall direct product profitability because the measures illustrate the relationship between costs most directly associated with revenue generating activities and the related revenue, and the effectiveness of the direct costs in obtaining revenue. Contribution is calculated 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, restructuring costs, other items (related to one-time expenses resulting from COVID-19) and non-cash stock-based compensation expenses within these captions and income or loss attributable to noncontrolling interests. The adjustment for cost structure simplification expense relates to a review of our cost structure and a number of expense initiatives underway, including the establishment of a site in the Salt Lake City area. The expense includes incremental and excess personnel-related expenses associated with establishing our Salt Lake City area site and external advisory fees. The adjustment for restructuring costs included severance and other personnel-related expenses, lease-related expenses and software impairment related to the impact of COVID-19 on the Company's business. Contribution Margin is a non-GAAP financial measure calculated by dividing Contribution by total net revenue.

We believe Adjusted Net Income (Loss) is an important measure because it directly reflects the financial performance of our business. Adjusted Net Income (Loss) adjusts for 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, as discussed above, (2) goodwill impairment, (3) legal, regulatory and other expense related to legacy issues, (4) acquisition and related expenses, (5) restructuring costs and (6) other items (including certain non-legacy litigation and/or regulatory settlement expenses, gains on disposal of certain assets and expenses resulting from COVID-19), net of tax. Legacy items are generally those expenses that arose from the decisions of legacy management prior to the board review initiated in 2016 and resulted in the resignation of our former CEO, including legal and other costs associated with ongoing regulatory and government investigations, indemnification obligations, litigation, and termination of certain legacy contracts. In the second quarter of 2020, we added an adjustment to Adjusted Net Income (Loss) for "Restructuring costs" to adjust for severance and other personnel-related expenses, lease-related expenses and software impairment related to the impact of COVID-19 on the Company's business. In the fourth quarter of 2019, we added an adjustment to Adjusted Net Income (Loss) for "Acquisition and related expenses" to adjust for costs related to the acquisition of Radius. In the second quarter of 2019, we added an adjustment to Adjusted Net Income (Loss) and Adjusted EBITDA for Other items to adjust for expenses or gains that are not part of our core operating results.

We believe that Adjusted EBITDA and Adjusted EBITDA Margin are important measures of operating performance because they allow for the comparison of our core operating results, including our return on capital and operating efficiencies, from period to period. Adjusted EBITDA adjusts for 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) cost structure simplification expense, (2) goodwill impairment, (3) legal, regulatory and other expense related to legacy issues, (4) acquisition and related expenses, (5) restructuring costs, (6) other items, as discussed above, (7) depreciation, impairment and amortization expense, (8) stock-based compensation expense and (9) income tax expense (benefit). Additionally, we utilize Adjusted EBITDA as an input into the Company's calculation of the annual bonus plan. Adjusted EBITDA Margin is a non-GAAP financial measure calculated by dividing Adjusted EBITDA by total net revenue.

We believe Adjusted EPS is an important measure because it directly reflects the financial performance of our business. Adjusted EPS is a non-GAAP financial measure calculated by dividing Adjusted Net Income (Loss) attributable to both common and preferred stockholders by the weighted-average diluted common and preferred shares outstanding.

We believe Net Cash and Other Financial Assets is a useful measure because it illustrates the overall financial stability and operating leverage of the Company. This measure 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.

There are a number of limitations related to the use of these non-GAAP financial measures versus their most comparable GAAP measure. In particular, many of the adjustments to derive the non-GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future. Other companies, including companies in our industry, may calculate these measures differently, which may reduce their usefulness as a comparative measure.

For more information on our non-GAAP financial measures and a reconciliation of such measures to the nearest GAAP measure, please see the "Reconciliation of GAAP to Non-GAAP Measures" tables at the end of this release.

Safe Harbor Statement

Some of the statements above, including statements regarding the ability and timing to satisfy the closing conditions for the Radius acquisition (including obtaining regulatory approval), our ability to effectuate and the effectiveness of certain strategy initiatives, borrower behavior and platform investor demand, anticipated future financial results, the impact of the coronavirus, our ability to navigate the current economic environment, and the impact of a bank charter 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 Securities and Exchange Commission, as well as our subsequent reports on Form 10-Q and 10-K each as filed with the Securities and Exchange Commission. 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.

Information in this press release 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.

LENDINGCLUB CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Net revenue:

Transaction fees $ 24,372 $ 161,205 $ 164,489 $ 448,809

Interest income 46,773 77,820 176,744 270,554

Interest expense (32,440) (55,060) (114,447) (197,336)

Net fair value adjustments (696) (31,628) (108,812) (102,331)

Net interest income and fair value adjustments 13,637 (8,868) (46,515) (29,113)

Investor fees 25,850 30,271 86,924 94,274

Gain on sales of loans 7,739 18,305 23,724 47,343

Net investor revenue 47,226 39,708 64,133 112,504

Other revenue 3,115 3,983 10,166 8,808

Total net revenue 74,713 204,896 238,788 570,121

Operating expenses:^ (1)

Sales and marketing 7,201 76,255 65,708 212,201

Origination and servicing 15,595 27,996 54,419 81,200

Engineering and product development 31,984 41,455 109,861 127,300

Other general and administrative 54,332 59,485 169,438 180,685

Total operating expenses 109,112 205,191 399,426 601,386

Loss before income tax expense (34,399) (295) (160,638) (31,265)

Income tax expense (benefit) (74) 97 245 (341)

Consolidated net loss (34,325) (392) (160,883) (30,924)

Less: Income attributable to noncontrolling interests - (9) - 55

LendingClub net loss $ (34,325) $ (383) $ (160,883) $ (30,979)

Net loss per share attributable to common stockholders - Basic and Diluted^ (2) $ (0.38) $ 0.00 $ (2.35) $ (0.36)

Weighted-average common shares - Basic and Diluted 73,566,385 87,588,495 76,781,157 86,849,388

Net income (loss) per share attributable to preferred stockholders - Basic and $ (0.38) $ 0.00 $ 1.46 $ 0.00Diluted^ (2)

Weighted-average common shares, as converted - Basic and Diluted 17,335,485 - 13,174,545 -

(1) Includes stock-based compensation expense as follows:

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Sales and marketing $ 880 $ 1,505 $ 3,274 $ 4,616

Origination and servicing 721 852 2,079 2,622

Engineering and product development 3,295 4,737 10,578 15,443

Other general and administrative 10,226 11,001 31,524 34,217

Total stock-based compensation expense $ 15,122 $ 18,095 $ 47,455 $ 56,898

^ The following table details the computation of the Company's basic and(2) diluted net loss per share of common stock and preferred stock (presented on an as-converted basis):

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Common Preferred Common Common Preferred Common Stock Stock Stock Stock Stock Stock

Allocation of undistributed LendingClub net loss $ (27,779) $ (6,546) $ (383) $ (129,968) $ (30,915) $ (30,979)

Deemed dividend - - - (50,204) 50,204 -

Net income (loss) attributable to stockholders^ (3) $ (27,779) $ (6,546) $ (383) $ (180,172) $ 19,289 $ (30,979)

Weighted-average common shares - Basic and Diluted 73,566,385 17,335,485 87,588,495 76,781,157 13,174,545 86,849,388

Net income (loss) per share attributable to stockholders - Basic and Diluted $ (0.38) $ (0.38) $ - $ (2.35) $ 1.46 $ (0.36)

For the first nine months of 2020, reflects a deemed dividend paid to our^ largest stockholder in the first quarter of 2020 upon the exchange of all(3) shares of LendingClub common stock held by it for newly issued shares of mandatorily convertible, non-voting, LendingClub Series A preferred stock.

LENDINGCLUB CORPORATION

OPERATING HIGHLIGHTS

(In thousands, except percentages and number of employees, or as noted)

(Unaudited)

Three Months Ended % Change

September 30, June 30, March 31, December 31, September 30, Q/Q Y/Y 2020 2020 2020 2019 2019

Operating Highlights:

Loan originations (in millions) $ 584 $ 326 $ 2,521 $ 3,083 $ 3,350 79 % (83) %

Net revenue $ 74,713 $ 43,869 $ 120,206 $ 188,486 $ 204,896 70 % (64) %

Consolidated net income (loss) $ (34,325) $ (78,471) $ (48,087) $ 234 $ (392) 56 % N/M

Contribution ^(1) $ 53,384 $ 21,395 $ 51,902 $ 101,261 $ 105,789 150 % (50) %

Contribution margin ^(1) 71.5 % 48.8 % 43.2 % 53.7 % 51.6 % 47 % 39 %

Adjusted EBITDA ^(1) $ 4,313 $ (27,619) $ (7,831) $ 38,981 $ 40,021 116 % (89) %

Adjusted EBITDA margin ^(1) 5.8 % (63.0) % (6.5) % 20.7 % 19.5 % 109 % (70) %

Adjusted net income (loss) ^(1) $ (23,079) $ (54,252) $ (39,151) $ 6,981 $ 7,951 57 % N/M

EPS (common stockholders) - diluted^ (2) $ (0.38) $ (0.87) $ (1.10) $ 0.00 $ 0.00 56 % N/M

Adjusted EPS - diluted ^(1) $ (0.25) $ (0.60) $ (0.44) $ 0.08 $ 0.09 58 % N/M

Loan Originations by Investor Type:

Banks 41 % 68 % 43 % 32 % 38 %

Managed accounts 44 % 10 % 16 % 17 % 15 %

Self-directed retail investors 13 % 17 % 4 % 3 % 4 %

LendingClub inventory 2 % 5 % 20 % 23 % 23 %

Other institutional investors - % - % 17 % 25 % 20 %

Total 100 % 100 % 100 % 100 % 100 %

Loan Originations by Program:

Personal loans - standard program 68 % 68 % 70 % 68 % 70 %

Personal loans - custom program 8 % 3 % 23 % 26 % 24 %

Other - custom program ^(3) 24 % 29 % 7 % 6 % 6 %

Total 100 % 100 % 100 % 100 % 100 %

Personal Loan Originations by Loan Grade - Standard Loan Program (in millions):

A $ 214.4 $ 105.7 $ 620.0 $ 654.1 $ 757.4 103 % (72) %

B 114.0 74.5 544.6 644.7 738.3 53 % (85) %

C 69.8 38.4 357.3 479.6 523.3 82 % (87) %

D - 3.0 249.1 309.1 324.2 (100) % (100) %

Total $ 398.2 $ 221.6 $ 1,771.0 $ 2,087.5 $ 2,343.2 80 % (83) %

N/M - Not meaningful

^ Represents a non-GAAP measure. See "Reconciliation of GAAP to Non-GAAP(1) Measures."

For the first quarter of 2020, reflects a $50.2 million deemed dividend^ paid to our largest stockholder upon the exchange of all shares of(2) LendingClub common stock held by it for newly issued shares of mandatorily convertible, non-voting, LendingClub Series A preferred stock.

^ Comprised of education and patient finance loans, auto refinance loans, and(3) small business loans. Beginning in the third quarter of 2019, this category no longer includes small business loans.

LENDINGCLUB CORPORATION

OPERATING HIGHLIGHTS (Continued)

(In thousands, except percentages and number of employees, or as noted)

(Unaudited)

Three Months Ended % Change

September 30, June 30, March 31, December 31, September 30, Q/Q Y/Y 2020 2020 2020 2019 2019

Servicing Portfolio by Method Financed (in millions, at end of period):

Whole loans sold $ 11,249 $ 12,421 $ 14,118 $ 14,118 $ 13,509 (9) % (17) %

Notes 674 736 833 919 1,016 (8) % (34) %

Certificates 79 109 147 211 272 (28) % (71) %

Secured borrowings 3 6 11 19 29 (50) % (90) %

Loans invested in by the Company 262 690 866 744 696 (62) % (62) %

Total $ 12,267 $ 13,962 $ 15,975 $ 16,011 $ 15,522 (12) % (21) %

Employees and contractors ^(4) 998 1,008 1,542 1,538 1,726 (1) % (42) %

^(4) As of the end of each respective period.

LENDINGCLUB CORPORATION

Condensed Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)

September December 31, 30, 2019 2020

Assets

Cash and cash equivalents $ 445,180 $ 243,779

Restricted cash 98,787 243,343

Securities available for sale (includes $205,997 and $271,173 at amortizedcost, $17,542 and $0 in allowance for credit losses, and $127,376 and $174,849 187,375 270,927pledged as collateral at fair value, respectively)

Loans held for investment at fair value 708,274 1,079,315

Loans held for investment by the Company at fair value 59,099 43,693

Loans held for sale by the Company at fair value 180,801 722,355

Accrued interest receivable 6,865 12,857

Property, equipment and software, net 101,045 114,370

Operating lease assets 76,226 93,485

Intangible assets, net 12,180 14,549

Other assets 103,625 143,668

Total assets $ 1,979,457 $ 2,982,341

Liabilities and Equity

Accounts payable $ 3,382 $ 10,855

Accrued interest payable 5,829 9,260

Operating lease liabilities 98,204 112,344

Accrued expenses and other liabilities 100,916 142,636

Payable to investors 35,068 97,530

Notes, certificates and secured borrowings at fair value 708,597 1,081,466

Payable to Structured Program note and certificate holders at fair value 173,410 40,610

Credit facilities and securities sold under repurchase agreements 120,159 587,453

Total liabilities 1,245,565 2,082,154

Equity

Series A Preferred stock, $0.01 par value; 1,200,000 shares authorized; 149,904and 0 shares issued, respectively; 149,904 and 0 shares outstanding, 1 -respectively

Common stock, $0.01 par value; 180,000,000 shares authorized; 76,511,394 and89,218,797 shares issued, respectively; 76,511,394 and 88,757,406 shares 765 892outstanding, respectively

Additional paid-in capital 1,493,839 1,467,882

Accumulated deficit (759,559) (548,472)

Treasury stock, at cost; 0 and 461,391 shares, respectively - (19,550)

Accumulated other comprehensive loss (1,154) (565)

Total equity 733,892 900,187

Total liabilities and equity $ 1,979,457 $ 2,982,341

LENDINGCLUB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(In thousands, except percentages and per share data)

(Unaudited)

Three Months Ended Nine Months Ended

September 30, June 30, March 31, December September 30, September 30, September 30, 2020 2020 2020 31, 2019 2020 2019 2019

GAAP LendingClub net income (loss) $ (34,325) $ (78,471) $ (48,087) $ 234 $ (383) $ (160,883) $ (30,979)

Engineering and product development expense 31,984 39,167 38,710 41,080 41,455 109,861 127,300

Other general and administrative expense 54,332 56,620 58,486 57,607 59,485 169,438 180,685

Cost structure simplification expense ^(1) - - 175 188 2,778 175 7,130

Restructuring costs ^(2) (142) 2,285 - - - 2,143 -

Other items ^(2) 8 341 - - - 349 -

Stock-based compensation expense ^(2) 1,601 1,453 2,299 2,012 2,357 5,353 7,238

Income tax expense (benefit) (74) - 319 140 97 245 (341)

Contribution $ 53,384 $ 21,395 $ 51,902 $ 101,261 $ 105,789 $ 126,681 $ 291,033

Total net revenue $ 74,713 $ 43,869 $ 120,206 $ 188,486 $ 204,896 $ 238,788 $ 570,121

Contribution margin 71.5 % 48.8 % 43.2 % 53.7 % 51.6 % 53.1 % 51.0 %

Contribution excludes the portion of personnel-related expenses associated^ with establishing a site in the Salt Lake City area that are included in(1) the "Sales and marketing" and "Origination and servicing" expense categories.

^ Contribution excludes the portion of expenses included in the "Sales and(2) marketing" and "Origination and servicing" expense categories.

LENDINGCLUB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (Continued)

(In thousands, except percentages and per share data)

(Unaudited)

Three Months Ended Nine Months Ended

September 30, June 30, March 31, December 31, September 30, September 30, September 30, 2020 2020 2020 2019 2019 2020 2019

GAAP LendingClub net income (loss) $ (34,325) $ (78,471) $ (48,087) $ 234 $ (383) $ (160,883) $ (30,979)

Cost structure simplification expense ^(1) - - 228 284 3,443 228 9,649

Legal, regulatory and other expense related to legacy issues^ (2) 6,120 4,354 4,476 4,531 4,142 14,950 15,078

Acquisition and related expenses ^(3) 4,373 456 3,611 932 - 8,440 -

Restructuring costs^ (4) 753 17,036 - - - 17,789 -

Other items ^(5) - 2,373 621 1,000 749 2,994 1,453

Adjusted net income (loss) $ (23,079) $ (54,252) $ (39,151) $ 6,981 $ 7,951 $ (116,482) $ (4,799)

Depreciation and impairment expense:

Engineering and product development 10,198 10,177 10,423 12,532 11,464 30,798 36,675

Other general and administrative 1,394 1,480 1,603 1,739 1,569 4,477 4,707

Amortization of intangible assets 752 772 846 848 845 2,370 2,651

Stock-based compensation expense 15,122 14,204 18,129 16,741 18,095 47,455 56,898

Income tax expense (benefit) (74) - 319 140 97 245 (341)

Adjusted EBITDA $ 4,313 $ (27,619) $ (7,831) $ 38,981 $ 40,021 $ (31,137) $ 95,791

Total net revenue $ 74,713 $ 43,869 $ 120,206 $ 188,486 $ 204,896 $ 238,788 $ 570,121

Adjusted EBITDA margin 5.8 % (63.0) % (6.5) % 20.7 % 19.5 % (13.0) % 16.8 %

Includes personnel-related expenses associated with establishing a site in the Salt Lake City area. These expenses are included in "Sales and^ marketing," "Origination and servicing," "Engineering and product(1) development" and "Other general and administrative" expense on the Company's Condensed Consolidated Statements of Operations. In the first nine months 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.

Consists of legal legacy expenses, which are included in "Other general and administrative" expense on the Company's Condensed Consolidated Statements of Operations and expense related to the dissolution of certain private^ funds managed by LCAM, which is included in "Net fair value adjustments" on(2) the Company's Condensed Consolidated Statements of Operations. For the first nine months of 2019, also includes expense related 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.

^(3) Represents costs related to the acquisition of Radius.

^ Includes severance and other personnel-related expenses, lease-related(4) expenses and software impairment related to the impact of COVID-19 on the Company's business.

In the second quarter and first nine months of 2020, includes expenses related to certain non-legacy litigation and regulatory matters, which are included in "Other general and administrative" expense on the Company's Condensed Consolidated Statements of Operations . and one-time expenses resulting from COVID-19, which are included in "Sales and marketing,"^ "Origination and servicing," "Engineering and product development" and(5) "Other general and administrative" expense on the Company's Condensed Consolidated Statements of Operations. In 2019, includes expenses related to certain non-legacy litigation and regulatory matters. For the first nine months of 2019, also includes a gain on the sale of our small business operating segment. Both of these are included in "Other general and administrative" expense on the Company's Condensed Consolidated Statements of Operations.

LENDINGCLUB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (Continued)

(In thousands, except percentages and per share data)

(Unaudited)

Three Months Ended Nine Months Ended

September 30, June 30, March 31, December 31, September 30, September 30, September 30, 2020 2020 2020 2019 2019 2020 2019

Common and Common and Common and Common Common Common and Common Preferred Preferred Preferred Stock Stock Preferred Stock Stock^ (1) Stock^ (1) Stock^ (1) Stock^ (1)

Adjusted net income (loss) attributable to stockholders $ (23,079) $ (54,252) $ (39,151) $ 6,981 $ 7,951 $ (116,482) $ (4,799)

Weighted-average GAAP diluted shares ^(2) 90,901,870 89,866,880 89,085,270 88,912,677 87,588,495 89,955,702 86,849,388

Non-GAAP diluted shares ^(2) 90,901,870 89,866,880 89,085,270 88,912,677 87,588,495 89,955,702 86,849,388

Adjusted EPS - diluted ^(3) $ (0.25) $ (0.60) $ (0.44) $ 0.08 $ 0.09 $ (1.29) $ (0.06)

^ Presented on an as-converted basis, as the preferred stock is considered(1) common shares because it participates in earnings similar to common stock and does not receive any significant preferences over the common stock.

^ Beginning in the first quarter of 2020, includes the total weighted-average(2) shares outstanding of both common and preferred stock on an as-converted basis.

LENDINGCLUB CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands)

(Unaudited)

The following table is provided to delineate between the assets and liabilitiesbelonging to our member payment dependent self-directed retail program (RetailProgram) note holders and certain VIEs that we are required to consolidate inaccordance with GAAP. Such assets are not legally ours and the associatedliabilities are payable only from the cash flows generated by those assets(i.e. Pass-throughs). As such, these debt holders do not have a securedinterest in any other assets of LendingClub. We believe this is a usefulmeasure because it illustrates the overall financial stability and operatingleverage of the Company.

September 30, 2020 December 31, 2019

Retail Consolidated All Other Condensed Retail Consolidated All Other Condensed Program ^(1) VIEs ^(2) (4) LendingClub ^(3) Consolidated Program ^(1) VIEs ^(2)(4) LendingClub ^(3) Consolidated Balance Sheet Balance Sheet

Assets

Cash and cash equivalents $ - $ - $ 445,180 $ 445,180 $ - $ - $ 243,779 $ 243,779

Restricted cash - 13,465 85,322 98,787 - 2,894 240,449 243,343

Securities available for sale - - 187,375 187,375 - - 270,927 270,927

Loans held for investment at fair value 633,787 74,487 - 708,274 881,473 197,842 - 1,079,315

Loans held for investment by the Company at fair value ^(4) - 53,336 5,763 59,099 - 37,638 6,055 43,693

Loans held for sale by the Company at fair value ^(4) - 106,086 74,715 180,801 - - 722,355 722,355

Accrued interest receivable 4,483 1,499 883 6,865 5,930 1,815 5,112 12,857

Property, equipment and software, net - - 101,045 101,045 - - 114,370 114,370

Operating lease assets - - 76,226 76,226 - - 93,485 93,485

Intangible assets, net - - 12,180 12,180 - - 14,549 14,549

Other assets - - 103,625 103,625 - - 143,668 143,668

Total assets $ 638,270 $ 248,873 $ 1,092,314 $ 1,979,457 $ 887,403 $ 240,189 $ 1,854,749 $ 2,982,341

Liabilities and Equity

Accounts payable $ - $ - $ 3,382 $ 3,382 $ - $ - $ 10,855 $ 10,855

Accrued interest payable 4,483 976 370 5,829 5,930 1,737 1,593 9,260

Operating lease liabilities - - 98,204 98,204 - - 112,344 112,344

Accrued expenses and other liabilities - - 100,916 100,916 - - 142,636 142,636

Payable to investors - - 35,068 35,068 - - 97,530 97,530

Notes, certificates and secured borrowings at fair value 633,787 74,487 323 708,597 881,473 197,842 2,151 1,081,466

Payable to Structured Program note and certificate holders at fair value ^(4) - 173,410 - 173,410 - 40,610 - 40,610

Credit facilities and securities sold under repurchase agreements - - 120,159 120,159 - - 587,453 587,453

Total liabilities 638,270 248,873 358,422 1,245,565 887,403 240,189 954,562 2,082,154

Total equity - - 733,892 733,892 - - 900,187 900,187

Total liabilities and equity $ 638,270 $ 248,873 $ 1,092,314 $ 1,979,457 $ 887,403 $ 240,189 $ 1,854,749 $ 2,982,341

Represents loans held for investment at fair value that are funded directly by our Retail Program notes. The liabilities are only payable from the cash flows generated by the associated assets. We do not assume principal or interest rate risk on loans facilitated through our lending marketplace that are funded by our Retail Program because loan balances, interest rates and maturities are matched and offset by an equal balance of notes with the^ exact same interest rates and maturities. We do not retain any economic(1) interests from our Retail Program. Interest expense on Retail Program notes of $77.2 million and $116.2 million was equally matched and offset by interest income from the related loans of $77.2 million and $116.2 million for the first nine months of 2020 and 2019, respectively, resulting in no net effect on our Net interest income and fair value adjustments. As previously disclosed, LendingClub will cease offering and selling Member Payment Dependent Notes (Retail Notes) on or around December 31, 2020.

Represents assets and equal and offsetting liabilities of certain VIEs that we are required to consolidate in accordance with GAAP, but which are not legally ours. The liabilities are only payable from the cash flows generated by the associated assets. The creditors of the VIEs have no recourse to the general credit of the Company. Interest expense on these liabilities owned by third parties of $97.8 million and net fair value adjustments of $8.6 million for the first nine months of 2020 were equally matched and offset by interest income on the loans of $106.4 million,^ resulting in no net effect on our Net interest income and fair value(2) adjustments. Interest expense on these liabilities owned by third parties of $61.5 million and net fair value adjustments of $12.7 million for the first nine months of 2019 were equally matched and offset by interest income on the loans of $74.2 million, resulting in no net effect on our Net interest income and fair value adjustments. Economic interests held by LendingClub, including retained interests, residuals and equity of the VIEs, are reflected in "Loans held for sale by the Company at fair value," "Loans held for investment by the Company at fair value" and "Restricted cash," respectively, within the "All Other LendingClub" column.

Represents all other assets and liabilities of LendingClub, other than^ those related to our Retail Program and certain consolidated VIEs, but(3) includes any economic interests held by LendingClub, including retained interests, residuals and equity of those consolidated VIEs.

The Company has sponsored Structured Program transactions that have been^ consolidated, resulting in an increase to "Loans held for investment by the(4) Company at fair value," "Loans held for sale by the Company at fair value" and the related "Payable to Structured Program note and certificate holders at fair value."

LENDINGCLUB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (Continued)

NET CASH AND OTHER FINANCIAL ASSETS

(In thousands)

(Unaudited)

September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019

Cash and cash equivalents ^(1) $ 445,180 $ 338,394 $ 294,345 $ 243,779 $ 199,950

Restricted cash committed for loan purchases ^(2) 308 290 4,572 68,001 84,536

Securities available for sale 187,375 221,930 256,554 270,927 246,559

Loans held for investment by the Company at fair value ^(3) 59,099 65,557 71,003 43,693 4,211

Loans held for sale by the Company at fair value ^(3) 180,801 587,093 741,704 722,355 710,170

Payable to Structured Program note and certificate holders at fair value ^(3) (173,410) (193,034) (206,092) (40,610) -

Credit facilities and securities sold under repurchase agreements (120,159) (480,079) (621,020) (587,453) (509,107)

Other assets and liabilities^ (2) 363 23,916 61,107 (6,226) (31,795)

Net cash and other financial assets ^(4) $ 579,557 $ 564,067 $ 602,173 $ 714,466 $ 704,524

^ Variations in cash and cash equivalents are primarily due to variations in(1) the amount and timing of loan purchases invested in by the Company.

In the fourth quarter of 2019, we added a new line item called "Other assets and liabilities" which is a total of "Accrued interest receivable," "Other assets," "Accounts payable," "Accrued interest payable" and "Accrued expenses and other liabilities," included on our Consolidated Balance Sheets. This line item represents certain assets and liabilities that impact working capital and are affected by timing differences between^ revenue and expense recognition and related cash activity. In the third(2) quarter of 2019, we added a new line 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 by the Company. We believe 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.

The Company has sponsored Structured Program transactions that have been^ consolidated, resulting in an increase to "Loans held for investment by the(3) Company at fair value," "Loans held for sale by the Company at fair value" and the related "Payable to Structured Program note and certificate holders at fair value."

^ Comparable GAAP measure cannot be provided as not practicable.(4)

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SOURCE LendingClub Corporation