The Institutional Risk Analyst

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

Half of COF assets are allocated to consumer loans, with single digits in real estate and C&I exposures. The bank was in the 94th percentile of Peer Group 1 on nonaccrual real estate loans in Q3, the 97th percentile in 90+ day past due C&I loans and the 94th percentile in 90+ day past due for other loans and leases, which includes loans to nonbanks. We expect COF to have high levels of delinquency in its consumer book, but these other credit metrics are a little troubling.

As we have said consistently, it is better to own the shares of stronger crypto enablers like HOOD and SOFI than the tokens themselves. It is the enablers who profit at the expense of the remaining true greater. We were watching a fascinating conversation with independent technology analyst and advisor Benedict Evans earlier this week and he made the point that serious technologists have largely abandoned crypto as an area of study.

We have published the latest edition of The IRA Bank Book for Q4 2025. Entitled "Defaults Fall, Market Risk Grows," the report details how indicators of consumer credit risk are falling even as risk to financial markets from institutional and commercial credit, crypto tokens and market exposures grow. Bank income has reached record levels in Q3 2025, but what happens in Q4 2025 and 2026?

SOFI is up almost 300% while the Bitcoin futures traded on the Chicago Mercantile Exchange are up less than 100%.  Below we provide some thoughts on the banking group as we head into September. 

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? 

At one point last year, HOOD was up several hundred percent, but has given back much of those gains. Yet the leaders of our finance group have outperformed the broad market.

Regulatory skepticism about mortgage assets could effect financing rates for lenders, which means higher mortgage rates for consumers.

A number of readers have asked us to talk about the winners and losers among large banks in the current interest rate environment.

While the progress in machine learning is impressive, horsepower in terms of computational capacity does not translate into intelligence.