Loan Originations: Over $1.6 billion in line with the previous quarter.
Pre-Provision Net Revenue (PPNR): $48 million, above the high end of the guidance range.
Net Income: $12 million, marking the 12th consecutive quarter of GAAP profitability.
Total Revenue: $181 million, slightly down from $186 million in the prior quarter.
Non-Interest Income: Increased to $58 million from $54 million in the prior quarter.
Net Interest Income: $123 million, down from $131 million in the prior quarter.
Non-Interest Expense: $132 million, up from $130 million in the prior quarter.
Tangible Book Value Per Common Share: Increased to $10.61.
Future Guidance
Originations: Expected to step up to a range of $1.6 billion to $1.8 billion.
PPNR for Q2: Guidance range of $30 million to $40 million.
Operational Focus: Continued positive net income expected, though not at the level of Q1.
Balance Sheet Management: Plan to maintain higher levels of whole loan retention.
Tax Rate: Long-term tax rate expectation is 27%.
Trends, Market Conditions, Sentiment
Credit Outperformance: 13 consecutive quarters of material outperformance versus the competitive set.
Structured Certificate Program: Continued strong demand with over $785 million of new issuance.
Marketplace Pricing: Improved due to both strong demand and lower interest rates, with a discount rate decrease from 9% to 8.5%.
Bank Partnerships: Optimism about engaging with select banks in the back half of the year for loan purchases.
Technological Initiatives: Developing a robust set of credit monitoring and management tools to differentiate the marketplace offering.
Asset Management and Pricing: The dynamic market with the Fed’s possible rate policy easing being an accelerant for growth.
Seasoning Program: The focus on extended seasoned loans to meet future marketplace investor demand.
Notable Quotes
Scott Sanborn: “We kicked off the year with another solid quarter, and we’re pleased with how well we’re executing against the factors we can control.”
Scott Sanborn: “Our operating discipline, credit outperformance, and continued innovation are resulting in a sustainable operating rhythm.”
Andrew LaBenne: “We plan to maintain these higher levels of whole loan retention to offset the maturation of our existing portfolio.”
Scott Sanborn: “Our TAM has never been larger and our value to consumers has never been more compelling.”
Andrew LaBenne: “We introduced this metric last quarter as we believe it illustrates the lower risk nature of the assets we have been using to grow the balance sheet.”
Scott Sanborn: “Thanks to their hard work, we’re well positioned to capture the incredible opportunity in front of us.”