One of the biggest winners on New Year’s Eve was a well-known online lender that, in addition, has been trying to turn itself into a digital bank of sorts as well. LendingClub (NYSE: LC) saw its stock surge just prior to New Year when the company confirmed that it’s long-anticipated bank merger would be going through after all.
While this piece of news ended up getting brushed to the side a little in anticipation of the holiday, LendingClub ended up being one of the best-performing stocks on New Year’s Eve. The reason for this is that the company’s pending acquisition of Radius Bank was approved by the Office of the Comptroller of the Currency (OCC), a major supervisor and regulator of all national banks in the country. The company first announced it intended to go through with this merger back in February but said that it needed to receive approval before it could move ahead.
“The Office of the Comptroller of the Currency (OCC) hereby approves the applications by Radius Bank, Boston, Massachusetts, to convert (the Conversion) to a national banking association operate under the title of LendingClub Bank,” read an official statement from the OCC announcing this approval. “These approvals are granted after a thorough review of the application, other materials you have supplied, and other information available to the OCC, including commitments and representations made by the applicant’s representatives during the application process.”
Most analysts covering the news are calling this announcement a game-changer for LendingClub. Wedbush analyst Henry Coffey went on to say that this announcement from the OCC was quicker than expected, although the deal still needs to be finalized by both parties before moving forward. LendingClub announced its plan to buy Radius Bank earlier in 2020.
Shares of LendingClub shot up around 26.2% on Thursday in response to the news, making it one of the better-performing stocks of the day, and it wouldn’t be surprising if shares continued to rise on Monday morning.
Despite the good news, most analysts covering LendingClub right now are still quite neutral on the company. Six out of seven Wall Street analysts have a “neutral” rating on the stock, while just one has an optimistic “buy.” Shares have been on a rising streak since November, more than doubling over the past couple of months and making up for most of the losses seen earlier in 2020.
LendingClub Company Profile
LendingClub Corp is a United States-based company engaged in operating an online lending marketplace platform that connects borrowers and investors for the provision of the loan facility. It offers investors access to an asset class that has generally been closed to many investors and only available on a limited basis to institutional investors. The company through the platform offer loan products such as personal, education and patient finance, small business and auto to interested investors. It generates a majority of the revenue from the transaction fees received from the platform’s role in accepting and decisioning applications on behalf of the bank partners to enable loan originations. – Warrior Trading News
