LendingClub reported another quarterly loss because of an impairment tied to a business it acquired in 2014 and costs stemming from lingering regulatory and legal matters.
Its second-quarter loss widened to $60.8 million, or 14 cents per share, compared with a loss of $25.5 million in the same period last year, the marketplace lender said in a news release Tuesday.
The results included $35.6 million of goodwill impairment related to LendingClub’s health care and education finance unit.
In April 2014, LendingClub paid $140 million to acquire Springstone Financial, which offers private student loans and financing for elective medical procedures. LendingClub did not provide details about why it recorded a goodwill impairment for the business. This year, the Massachusetts banking regulator found that Springstone had engaged in unlicensed lending activity in the state.
The second-quarter results also included $18.5 million of legal and regulatory expenses connected to the events that led to then-CEO Renaud Laplanche’s departure in May 2016. Laplanche's ouster was prompted in part by the discovery that certain loan information that the firm provided to a loan buyer had been falsified.
The marketplace lender is facing fresh regulatory issues, too. In April, the Federal Trade Commission sued the company, claiming it assessed fees on borrowers without telling them.
Without the one-time items, LendingClub’s quarterly loss would have been $6.7 million.
In spite of the elevated expenses, CEO Scott Sanborn touted LendingClub’s overall loan growth. Total revenue rose 27% to $177 million. Loan originations increased 31% to $2.8 billion.
“Our core business is firing on all cylinders,” Sanborn said in the news release. “We are laser-focused on the direct-to-consumer opportunity as we help our members on the path to financial success.”
Total operating expenses rose 44% to $237.8 million on the one-time charges, as well as higher sales and marketing costs and loan origination and servicing expenses.
LendingClub on Tuesday estimated that it will lose between $10 million and $15 million in the third quarter, on net revenue of between $175 million and $185 million. For the full year, LendingClub expects to record a loss of between $109 million and $124 million, on revenue of $680 million to $705 million.