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Strong Bank Earnings, LendIt Update, PeerIQ’s Valuation Report

By Vy Phan

April 15, 2018

Greetings, The US economy registered a strong inflation print with core CPI rising 2.1% YoY in March. The inflation reading bolsters the Fed’s case for raising rates twice more in 2018. With the first quarter earnings season underway, Citi, JPM and Wells Fargo reported earnings that either met or beat expectations, as financial market volatility boosted trading revenues. JPM posted all-time high profits as revenues increased across most businesses. JPMorgan said that it expects 2018 net interest income of $54 Bn - $55 Bn and average core loan growth of 6%-7%, and CEO Dimon said that "the environment is intensely competitive and lending was flat for the quarter”. Wells Fargo’s earnings also beat analyst expectations, but the bank cautioned that these results could change due to the ongoing CFPB investigations. Consumer loans decreased $9.5 Bn QoQ – more than LendingClub or SoFi originate in a year – driven by a $3.8 Bn decline in auto loans, $1.9 Bn seasonal decline in credit card balances, and a $1.8 Bn decline in the junior lien mortgage portfolio. LendIt 2018 Update LendIt 2018 concluded recently in San Francisco and we take a look at some of the highlights of the conference. Overall, the turnout this year of ~6,500 was below its peak, even as the conference has expanded to the crypto and blockchain sector. Upgrade and LendingClub were the main sponsors. Upgrade made its presence felt with extensive banners and a large contingent in attendance. Upgrade is arguably the fastest-growing non-bank lender (Marcus had several years to build out its servicing before offering loans…) and the conference provided them with an opportunity to introduce themselves to the broader market. LendIt Keynotes and Talks LendingClub’s Scott Sanborn, Upgrade’s Renaud Laplanche, SoFi’s Anthony Noto and Affirm’s Max Levchin were some of the main keynote speakers. PeerIQ CEO Ram Ahluwalia delivered a standing-room only talk on “What is Happening with Personal Loan Losses”. Bloomberg’s Emily Chang pressed Noto with tough questions and SoFi’s plans for the future. Noto remained disciplined, stayed on message, and shared the promise of SoFi’s brand. Noto artfully deflected the question when asked if viewed Marcus as competition. SoFi’s CEO and new CFO, structured finance veteran Michelle Gil (announcement here), are ex-GS alum – which makes the question somewhere between ironic and entertaining. Sanborn focused on the deteriorating financial health of US consumer with rising debt levels, stagnant median wages, and a low personal savings rate. Sanborn emphasized the need for regulatory innovation (for instance, enabling lenders to use tax data to improve underwriting) to improve financial health. Sanborn also shared LendingClub’s new “direct pay” feature which increases the likelihood that personal loans are used to pay down higher rate credit card debt. We have received strong follow-on PeerIQ CEO’s Ram Ahluwalia’s talk on “What is Happening with Personal Loan Losses”. We will be conducting a webinar on Wednesday April 25th at 2 pm ET. Mark your calendars, and stay tuned! Below is an excerpt from the opening slide in talk:   LendIt News and Announcements Below are some of the notable announcements from LendIt: Heard at LendIt PeerIQ’s Valuation Report  PeerIQ is pleased to share excerpts from PeerIQ’s newly redesigned Valuation Report below. The valuation report delivers accurate, transparent, and daily pricing: Reach out to learn more! Portfolio Summary The report also shows the interest rate sensitivity of your portfolio by mapping a portfolio’s WAL to the yield curve.     Source: PeerIQ  Upcoming WebinarWhat is Happening with Personal Loan Losses on Wednesday April 25th at 2 p.m. Details to follow, stay tuned! PeerIQ Mentions: PeerIQ is profiled in Evolve Capital Partners’ 2Q18 issue. Industry Update:   Lighter Fare: