Chief Financial Officer Carrie Dolan is leaving for a new opportunity.
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In the interim, LendingClub corporate controller Bradley Coleman will act as CFO until a permanent replacement is announced.
The second-quarter earnings report follows a tumultuous period for LendingClub, once considered the standard bearer in a new generation of online lenders but which has been pummeled by revelations of lending improprieties, a U.S. Department of Justice investigation, the departure of loan investors and layoffs of 179 employees. “We have accomplished quite a bit since the events of May 9”.
According to an update released by analysts at Credit Suisse the broker has now set a “Neutral” rating on shares of LendingClub Corporation (NYSE:LC) with a price target of 7. The firm has a market cap of $1.83 billion and a price-to-earnings ratio of 319.33.
Loan originations, a key metric indicating the volume of loans processed by the company, rose 2.3 percent to $1.96 billion.
The fall reflects the industry’s struggles with faltering investor appetite for loans, rising defaults and the threat of heightened regulation. For the fiscal year, the company is expected to earn 8 cents per share, while revenue of $477.71 million is expected to rise 11% year over year.
For the three months that ended in June, analysts expect LendingClub to lose 2 cents per share on revenue of $100.51 million, according to Thomson Reuters.
The company posted a wider loss of $81.4 million for the second quarter, at least twenty times more than the loss recorded in the quarter a year ago.
The company’s troubled quarter included a goodwill impairment charge of $35.4 million related a 2014 acquisition; an increase in professional service fees of $14.9 million primarily related to the review of Laplanche’s actions; approximately $14 million in incentives paid to investors; and an increase in compensation related costs of $6.5 million associated with severance costs and a retention program. These loans can be invested in through the purchase of notes issued pursuant to a Note Registration Statement, and are available through the Companys Website.
The company posted a loss of $17.9 million, or 25 cents a share, versus a year-earlier profit of $4.98 million, or 7 cents a share.
LendingClub in May said it had altered documentation when selling $22 million of loans.
LendingClub has been aiming to restore confidence since its former chief executive, Renaud Laplanche, resigned in May amid questions about lending practices.
“Our efforts to reengage investors are working, with 15 of our Top 20 largest investors back on the platform today”, Sanborn said.
Jefferies, the investment bank that had been a major buyer of LendingClub loans, has resumed its purchases, completing the securitization of $134 million of LendingClub personal loans this month. Their due diligence process is lengthier.
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“People are showing a willingness to test the pipes a little bit”, Sanborn said.
