A look through LendingClub’s Q4 2020 earnings
- LendingClub’s latest earnings report revealed an originations increase of 56 percent which surpassed the high end of its guidance range.
- Last month, Lending Club officially repositioned itself as a marketplace bank through its acquisition of Radius Bank.

LendingClub’s Q4 earnings showed a 56 percent increase in origination volumes to $912 million, exceeding the high end of the fintech’s previously provided guidance range.
The release also depicted a 77 percent increase in related transaction fees and a reduction in expenses from the third quarter of 2020. Last month, LendingClub completed its acquisition of Radius Bank and officially launched itself as a marketplace bank. A marketplace bank uses APIs to offer customers homegrown and partner products through transaction integration and processing capabilities.
The deal marks the first acquisition of a bank by an online lender. Increasingly more fintechs have started pursuing national bank charters. Earlier this month Square announced its industrial bank Square Financial Services. Personal finance platform SoFi also announced its upcoming acquisition of Golden Pacific Bancorp.
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“I am proud of our accomplishments in 2020, which led us to complete the groundbreaking acquisition of Radius Bank,” said Scott Sanborn, chief executive officer of LendingClub.
“Combining the award-winning digital bank with LendingClub’s leading online marketplace provides us with substantial advantages over both traditional banks and fintech marketplace lenders.”
According to Sanborn, LendingClub’s marketplace bank model has an edge over incumbents through its potential for rapid growth from revenue sources, greater customer acquisition capabilities and low operation costs as a digital first bank.
In comparison to fintechs, LendingClub benefits from access to stable funding, a recurring revenue stream and an established regulatory framework.
“Adding deposit capabilities builds on our tech and data advantages as it allows us to better serve our more than 3 million loyal and highly motivated members and digitally manage their lending, spending, and savings,” said Sanborn. “We are fully aligned with both our customers and shareholders to realize incremental long-term value for decades to come.”
For the year, the firm also posted a 6.5 percent drop in net interest income over 2019, reflecting the sale of $470 million of loans in the second half of 2020 to accumulate capital in preparation for the company’s acquisition of Radius. The improvement in expenses year-over-year primarily reflected significantly lower sales and marketing expenses.
According to LendingClub’s earnings call, the company shifted focus by originating loans to existing customers, which resulted in increased efficiency and a simultaneous reduction in marketing costs. The improvement in expenses also reflected actions taken to cut costs and mitigate the repercussions of the pandemic.
“2020 was a year of repositioning as we navigated the pandemic, reduced our fixed cost by 30 percent and prepared for the acquisition of Radius,” said LendingClub’s chief financial officer, Tom Casey.
“2021 will be the year in which we prime the pump as we begin to build our consumer loan portfolio, integrate the bank and accelerate our origination growth. All this will set the Company up to generate strong multi year earnings growth.”