Shares of LendingClub (LC 2.27%) were moving higher today after the consumer lending and banking platform posted better-than-expected results in its first-quarter earnings report, easily beating estimates on the bottom line.
As of 11:48 a.m. ET Wednesday, the stock was up 12.7%.
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LendingClub shines in Q1
In a difficult environment for lenders, LendingClub delivered a solid round of results as its balance sheet grew from $8.8 billion in the prior quarter to $9.2 billion.
Book value per share also rose from $11.34 to $11.40, showing that the stock still trades at a substantial discount to its share price. Provision for credit losses also fell from $41.9 million to $31.9 million, showing its loan book is getting less risky. Loan originations were flat from the previous quarter at $1.6 billion.
As for financial results, LendingClub's revenue fell 26.5% from the quarter a year ago to $180.7 million, but the company substantially cut its credit loss provision from a year ago, finishing the quarter with earnings per share of $0.11, down from $0.13 in the prior-year quarter, but better than $0.09 per share in the the fourth quarter of 2023.
That result was much better than the analyst consensus of $0.03.
CEO Scott Sanborn said, "Our operating discipline, strong credit performance, and continued innovation are resulting in a sustainable operating rhythm that is delivering real value to our members."
What's next for LendingClub
LendingClub's guidance for the second quarter called for $1.6 billion to $1.8 billion in loan originations, an improvement from the first quarter, and pre-provision net revenue of $30 million to $40 million, which represents a substantial decline from the first quarter.
Higher interest rates have squeezed operators like LendingClub for the last several quarters, but investors should take comfort in the better-than-expected results and the discount to book value, which should eventually improve if the business executes effectively.
