The Institutional Risk Analyst

The average of non-interest income to assets for the more than 100 large banks in Peer Group One is 1% of assets. AXP’s non-interest income was equal to 18% of total assets at the end of 2025, putting the $290 billion asset bank in the 99th percentile of all US banks based on this measure. Add this to astute management and high asset turns and AXP is the premier bank in the US based upon market valuation.

LC is clearly succeeding where the larger banks are not in terms of both loan originations and loan sales, which are shown in the chart below. If LC can continue to create assets and also sell loans to investors, that is an indication of a healthy business. But the big question for us is how much of the consumer lending opportunity can LC capture and retain? The table below shows the gross loan yield, net loss rate and net income vs average assets for LC and its bank competi

With the FOMC cutting the target for fed funds one quarter point last week, we expect to see funding costs for banks continue to fall, part of the larger narrative that has seen bank loan demand and share repurchases leaving a great deal of dry powder.  Deposits are growing 2x loans, meaning that the balance must go into securities. One of the reasons that lenders of all sorts have been pushing down loan yields is to capture assets in a market that is short quality duration.

If we told you that large cap financials are outperforming both the S&P 500 and bitcoin over the past month, what would you say?