Greetings,

The unemployment rate dropped to a near five decades low of 3.8% even as nonfarm payrolls only rose by 20K. Average hourly earnings rose by 3.4%, above economists’ expectations. The Fed is on hold and is watching incoming data to determine the timing of the next rate hike.

The tightening labor market is also leading economist to trot out the controversial Phillips Curve indicating the potential for inflation ahead:

Source: WSJ

US credit card balances reached their highest level of $870 Bn at the end of 2018. Available credit limits also reached their highest level of nearly $3 Tn. Overall debt outstanding also reached a record $13.5 Tn, although debt burdens remain near low on a per-capita and on a percentage of disposable income basis. Borrowers, however, are paying higher interest rates as a share of household spending:

Source: Deutsche Bank Research, WSJ

In securitization news, KBRA has rated the senior tranche on Avant’s first deal of 2019 A. AVNT 2019-A is a $284 Mn securitization. The pool consists of ~55 k loans with an average loan balance of $5.6 k. The weighted average loan term is 36 months and the borrowers’ weighted average FICO score is 649.

Kabbage is out with its 2nd securitization. KBRA has rated the senior tranche on KABB 2019-1 AA. KABB 2019-1 is a $610 Mn securitization with a 36-month revolving period, similar to that on the KABB 2017-1 deal. The pool consists of 91 k loans with an average balance of $7.3 k. The weighted average term of the loans is 10 months and the borrowers’ weighted average FICO score is 702. KABB 2017-1 is still within its revolving period and is currently passing all triggers.

PeerIQ has been nominated for the “Most Promising Partnership” award at LendIt for our partnership with TransUnion.

Reach out – we hope to see you at LendIt!

GreenSky’s Strong 4Q2018 Earnings

GreenSky’s 4Q revenue grew by 22% YoY to $109 Mn, although net income fell by nearly 43% YoY to $23 Mn. The stock rose by ~6% post earnings.

  • Transaction volume increased by 23% YoY to $1.3 Bn.
  • Loan servicing portfolio increased by 36% YoY to $7.3 Bn.
  • GSKY had aggregate commitments of $11.8 Bn from its nine bank partners, of which $4.8 Bn were unused.
  • 30+ DQ rates rose slightly YoY from 145 bps to 148 bps.
  • GreenSky now has nearly 12 k home improvement merchant partners and nearly 3 k elective healthcare partners.

Source: GreenSky, PeerIQ

Industry Update:

Lighter Fare: