Chairman andCEO Renaud Laplanche has resigned following an internal review of sales of $22 million in near-primeloans to a single investor.
The company said the sale directlycontravened the investor's instructions.
ScottSanborn will continue in his role of president and will become acting CEO,assuming additional managerial responsibilities. Sanborn will be supported bydirector Hans Morris, who has assumed the newly created role of executivechairman.
Theinternal review also discovered another matter unrelated to the sale of theloans, involving a failure to inform the board's risk committee of personalinterests held in a third-party fund while the company was contemplating aninvestment in the same fund. The lack of disclosure had no impact onfirst-quarter financial results.
LendingClubsaid it is taking remediation steps to resolve the material weaknesses ininternal control over financial reporting identified in the first quarter. Theremediation steps included the termination or resignation of three seniormanagers involved in the sales of the $22 million of near-prime loans.
Forthe first quarter, LendingClub reported GAAP net income of $4.1 million, or 1cent per share, compared to a net loss of $6.4 million, or 2 cents per share,in the year-ago period.
GAAPnet income included $15.0 million of stock-based compensation expense in thefirst quarter, compared to $11.6 million in the first quarter of 2015.
Adjustednet income for the quarter was $20.9 million, or 5 cents per share, compared to$7.7 million, or 2 cents per share, in the prior-year quarter.
The S&P Capital IQ consensusnormalized EPS estimate for the quarter was 5 cents.
The company's operating revenuegrew 87% year over year to $151.3 million from $81.0 million.
Adjusted EBITDA was $25.2 millionin the quarter, up from $10.6 million in the year-ago period.
Loan originations in the firstquarter increased 68% year over year to $2.75 billion from $1.64 billion in theprior-year quarter.
LendingClubplans to file an extension request with the SEC to file its quarterly report onForm 10-Q for the first quarter on or prior to May 16.
Thecompany intends to provide financial guidance as soon as appropriate.