SAN FRANCISCO, Feb. 18, 2020 /PRNewswire/ -- LendingClub
Corporation (NYSE:LC), America's largest online lending
marketplace connecting borrowers and investors, today announced
that it has signed a definitive agreement to acquire Radius
Bancorp, and its wholly owned subsidiary Radius Bank, (together
"Radius") recently voted the nation's best online
bank1 in a cash and stock transaction valued
at $185 million. Combining Radius and LendingClub will create
a digitally native marketplace bank at scale with the power to
deliver an integrated customer experience, enabling consumers to
both pay less when borrowing and earn more when saving.
Radius is a leading online bank founded in 1987 and based in
Boston, MA, with more than
$1.4 billion in diversified assets.
It is known for its award-winning, branchless digital banking
platform that combines state-of-the-art technology with the best
checking and savings account features to provide a superior banking
experience for consumers and small businesses. Its platform
provides convenient features such as check deposit, bill pay, card
management, and a personal financial management dashboard, as well
as open APIs to offer "banking-as-a-service" (BaaS) functionality
to leading fintechs. In addition, the company offers commercial
lending options for businesses, and treasury management services
for pension funds, unions, municipalities, and non-profit
organizations.
LendingClub is the number one provider of personal loans in
the country, facilitating more than $12.3
billion in loans in 2019. With a proven 14-year track record
of improving customers' financial health, the company has helped
its over three million members to save money versus their high
interest credit card debt.
"This is a transformational transaction that allows us to
reimagine banking in a way that is free from legacy practices and
systems and where the success of LendingClub is aligned with the
success of our customers," said Scott
Sanborn, CEO of LendingClub. "By combining with Radius, we
will create a category-defining experience for our members that
will dramatically enhance the resilience and earnings trajectory of
our business."
"LendingClub has always been a fintech innovator, and I look
forward to leveraging the strengths of both of our talented teams
as we usher in a new era in banking," said Mike Butler, Radius' President and CEO. "We are
excited for our employees to operate our virtual banking platform
with more resources and for our clients to gain access to an
industry-leading lending product. This is a perfect marriage, with
LendingClub bringing the leading digital asset generation platform,
and Radius contributing a leading online deposit gathering
platform, to position the combined company for long-term
success."
Additional compelling strategic and financial benefits of the
transaction include that it will:
- Diversify and increase earnings by capturing the
sizeable revenue opportunity that is currently being absorbed by
issuing banks, reducing the use of high-cost warehouse lines, and
generating additional and recurring net interest income;
- Enhance resiliency over the economic cycle by
offering a source of low-cost, stable funding;
- Deliver regulatory clarity through a direct
relationship with a primary regulator;
- Attract new members through the addition of banking
services that leverage LendingClub's marketing strength;
- Offer new products, services and resources through an
expanded BaaS offering to better serve partners; while increasing
the cross-sell power for Radius clients to gain access to lending
products; and
- Increase engagement with existing LendingClub
members to help them manage their cash flow and earn savings,
while generating more data to inform underwriting and help
consumers progress on a path to better financial health.
The combined entity expects to be substantially accretive with a
cash payback of the purchase price premium and all costs in two
years. The purchase price is subject to certain adjustments set
forth in the definitive agreement, and the transaction is subject
to regulatory approval and other customary closing conditions and
is expected to close in the next twelve to fifteen months with
benefits starting to materialize immediately after close.
Further, to facilitate compliance with federal banking
regulations and prevent closing of the Radius acquisition being
delayed or disrupted, the LendingClub Board of Directors has
adopted a Temporary Bank Charter Protection Agreement, also known
as a stockholder rights agreement, and approved a dividend
distribution of one purchase right for each outstanding share of
the Company's stock as of March 19,
2020. The agreement is intended to deter stock positions in
excess of certain thresholds set forth by the Federal Reserve under
the Bank Holding Company Act. Specifically, it provides for the
dilution of any person or group of persons who acquire:
(i) 25 percent or more equity interest in LendingClub
or
(ii) 7.5 percent or more of any class of
LendingClub's voting securities. This threshold automatically
increases to 10 percent as set forth in the agreement.
Anyone already above such thresholds is grandfathered in at
their current levels. The agreement is effective immediately and
will automatically expire on either the closing of the Radius
acquisition or after 18 months, whichever is earlier.
Additional details on acquisition of Radius, including the
Temporary Bank Charter Protection Agreement, will be contained in a
Current Report on Form 8-K that LendingClub will be filing with the
Securities and Exchange Commission on Wednesday, February 19, 2020 - available on the
SEC's website at www.sec.gov.
Advisors
J.P. Morgan Securities LLC served as
exclusive financial advisor to LendingClub in connection with the
transaction and Sullivan and Cromwell LLP served as its legal
counsel. Additionally, Broadhaven Capital Partners and
Piper Sandler served as financial
advisors to Radius Bancorp and Hogan Lovells US LLP served as its
legal counsel in connection with the transaction.
Conference Call and Webcast
LendingClub will host a
conference call to discuss the fourth quarter and full year 2019
financial results at 2:00 p.m. Pacific
Time (5:00 p.m. Eastern Time)
today.
Webcast information
A live webcast of the call will be
available at http://ir.lendingclub.com under the Filings
& Financials menu in Quarterly Results. To access the call
please dial +1 (888) 317-6003 or outside the U.S. +1 (412) 317-6061
with Conference ID 7474063 ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time).
Replay
An audio archive of the call will be available
at http://ir.lendingclub.com. An audio replay will also be
available 1 hour after the end of the call until February 25, 2020 by calling +1 (877) 344-7529 or
outside the U.S. +1 (412) 317-0088 with Conference ID 10138523.
About LendingClub
LendingClub was founded to transform
the banking system to make credit more affordable and investing
more rewarding. Today, LendingClub's online credit marketplace
connects borrowers and investors to deliver more efficient and
affordable access to credit. Through its technology platform,
LendingClub is able to create cost efficiencies and passes those
savings onto borrowers in the form of lower rates and to investors
in the form of risk-adjusted returns. LendingClub is based in
San Francisco, California. All
loans are made by federally regulated issuing bank partners. More
information is available at https://www.lendingclub.com.
About Radius Bank
With assets of approximately $1.4
billion, Radius Bank is a forward-thinking digital bank
committed to providing a full complement of accounts and services
to meet the banking needs of consumers and businesses nationwide.
Radius provides the product depth of a national brand, the
technology of a fintech, and the personalized attention typically
reserved for a local bank to consumers, small and middle market
businesses, unions, government entities and non-profit
organizations. The Bank's award-winning digital banking platform
allows consumer clients to bank from anywhere with a computer or
mobile device and provides convenient features such as check
deposit, bill pay, card management, and a personal financial
management dashboard. Business clients enjoy a wide array of
award-winning deposit products, advanced treasury management
services, and loan and payment solutions. In addition, Radius'
suite of open APIs delivers a robust banking-as-a-service (Baas)
platform for fintechs to quickly access core banking features and
build best-in-class financial solutions. Radius specializes in
partnering with forward-thinking fintechs to provide white-label
deposit products, cards, digital onboarding, and account
management. Radius Bank is a member of the Federal Deposit
Insurance Corporation and is an Equal Housing/Equal Opportunity
Lender. For further information, visit the Bank's website
at radiusbank.com, or follow the Bank
on Twitter, LinkedIn, Facebook,
and Instagram.
Safe Harbor Statement
Some of the statements above,
including statements regarding our ability to close the pending
transaction with Radius, the timing and ability to realize certain
financial and strategic benefits from the transaction and the
impact of a bank charter on our business, are "forward-looking
statements." The words "anticipate," "believe," "estimate,"
"expect," "intend," "may," "outlook," "plan," "predict," "project,"
"will," "would" and similar expressions may identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Factors that could
cause actual results to differ materially from those contemplated
by these forward-looking statements include: the outcomes of
pending governmental investigations and pending or threatened
litigation, which are inherently uncertain; the impact of
management changes and the ability to continue to retain key
personnel; our ability to achieve cost savings from restructurings;
our ability to continue to attract and retain new and existing
borrowers and investors; our ability to obtain or add bank
functionality and a bank charter; competition; overall economic
conditions; demand for the types of loans facilitated by us;
default rates and those factors set forth in the section titled
"Risk Factors" in our most recent Quarterly Report on
Form 10-Q and Annual Report on Form 10-K, each as filed
with the SEC, as well as LendingClub's subsequent filings made with
the Securities and Exchange Commission, including subsequent
reports on Form 10-Q and 10-K. We may not actually achieve the
plans, intentions or expectations disclosed in forward-looking
statements, and you should not place undue reliance on
forward-looking statements. Actual results or events could differ
materially from the plans, intentions and expectations disclosed in
forward-looking statements. We do not assume any obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Information in this press release is not an offer to sell
securities or the solicitation of an offer to buy securities, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such
jurisdiction.
Media and Investor Contacts
LendingClub
For Investors: IR@lendingclub.com
Media Contact: Press@lendingclub.com
Radius Bank
Sarah
Sturba
Matter Communications
radiusbankpr@matternow.com
1
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SOURCE LendingClub Corporation