LendingClub’s (NYSE:LC) stock gapped down as much as 10.2% in Wednesday after-hours trading after the fintech firm issued a quarterly outlook for loan originations that was weaker than expected. Still its Q4 earnings and revenue both topped Wall Street expectations as net interest income surged from a year ago, offsetting lower marketplace revenue stemmed from a reduction in volumes.
“Looking ahead, in anticipation of a more challenging environment, we have streamlined our operations and will maintain our underwriting discipline,” said CEO Scott Sanborn. “We also intend to remain profitable, while investing in-period earnings into loan retention to support future earnings.”
The company expects its loan originations for Q1 2023 to range between $1.9B-$2.2B, compared with the $2.57B Visible Alpha consensus, reflecting the negative impact of rising interest rates on marketplace demand. Pre-provision net revenue is anticipated to be $55M-$70M.
Also, it plans to keep held-for-investment loan balances in line with Q4 2022.
Turning to Q4 2022 results, EPS of $0.22, topping the $0.20 average analyst estimate, slid from $0.41 in Q3 and from $0.27 in the year-ago quarter. Net revenue of $262.7M, surpassing the $258.4M consensus, dipped from $304.9M in the prior quarter and ticked up from $262.2M a year earlier.
Pre-provision net revenue was $82.7M for the three months ended Dec. 31, 2022, compared with $118.7M for the quarter ended Sept. 30, 2022, and $74.0M for the quarter ended Dec. 31, 2021.
Net interest income came in at $135.24M, up from $123.68M in Q3 and from $83.13M a year before. Net interest margin of 7.8% vs. 8.3% in Q3 and 7.6% in Q4 2021.
Noninterest expense of $180.04M slipped from $186.22M in the previous quarter and from $188.22M in Q4 2021.
Provision for credit losses was $61.5M vs. $82.7M in Q3 and $45.1M in Q4 2021.
Total loan originations stood at $2.52B, down from $3.54B in Q3 and from $3.07B a year ago. Loan originations held for investment as a percentage of total loan originations were 28% vs. 33% in Q3 and 25% in the year-ago quarter.
Conference call at 2:00 p.m. PT (5:00 p.m. ET).
Earlier, LendingClub Q4 GAAP EPS, revenue beats.