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.

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.

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. 

Whalen Global Advisors LLC (WGA) has published the latest edition of the WGA Top 50 Banks, the fifty top performing large commercial banks in the US. Drawn from the members of Peer Group 1 and other sources, WGA screens the group based upon five proprietary measures of financial and market performance.

We have little conviction behind our long positions in AXP and the SPX, thus the defensive recommendation in terms of sell orders.

The intriguing thing about private coin empires is that they are obviously not a positive for existing payment systems, yet neither are they dependent upon crypto. Larger sponsors may be able to create exclusive coin ecosystems without actually touching crypto assets at all. Fiat to AMZN coin, “ZON,” is really all that the sponsor needs.

When Elizabeth Warren and Maxine Waters spoke publicly against the CapitalOne-Discover transaction, they were actually supporting the monopoly position of JPMorgan and other large banks. By opposing CapitalOne-Discover and, indirectly, supporting JPM, Warren, Waters and other progressives are actually hurting low income consumers.

Many voices in the media and elsewhere have been predicting an economic slump since 2023. Didn’t happen, but 2025 is very different.

If we consider the larger picture, we already have years of pent-up credit expenses awaiting realization, but add to the sauce Donald Trump.

Like 2023 and 2024, the year 2025 may end up being relatively stable, yet investors remain worried about stealth externalities.

Yes, net loss rates in percentage terms post default are back up to 2010 levels, but the dollar volume of net charge-offs remains very low.

Indeed, if President Trump wants to be rid of Jerome Powell he can simply impeach him for violations of the Federal Reserve Act

Axos continues to rebound after the bear raid by Hindenburg Research. AX ranked 18th in the WGA Bank Top Index in Q3 2024 vs 98th for SOFI

The first comment to make is that consumer defaults are rising across the board. The only question we need to consider is the rate of change

So what makes the WGA Bank Top 10 unique? Below we provide some quantitative and qualitative comments on each of the ten best US banks

What can SYF tell us about the bleeding edge of unsecured consumer credit?