PeerIQ by Cross River

JPMorganChase reported earnings this morning. Below for quick takeaways on their consumer division: ⤵⤵⤵ ➡ Average loans of $571,727Mn for the quarter, up 10.3% YoY and 0.1% QoQ ➡ ➡ Driven by increases in Card Services and Home Lending ➡ Average deposits of $1,073,544Mn, down (7.2)% YoY and (0.5)% QoQ ➡ Period-end deposits were down (8.8)% YoY, and down (3.2)% QoQ ➡ Net charge-off rate of 1.47% for the quarter, up from 0.98% in 2Q23 and 1.33% in 1Q24, with the increase in charge-offs driven by card services ➡ ➡ Card services NCO rate of 3.50% for the quarter, from 2.41% a year prior and 3.32% a quarter prior ➡ Debit and credit card sales volume of $453.7Bn a 7.0% increase YoY and 7.8% increase QoQ ➡ Home lending originations of $10.7n were down (4.5)% YoY, but rose 62.1% QoQ ➡ Auto loan and lease originations of $10.8Bn, a (10.0)% decline YoY but 21.3% increase QoQ ➡ Jamie Dimon, CEO, “In CCB, we opened over 450 thousand net new checking accounts, our 50th consecutive quarter of net new account growth. Client investment assets were up 14% to $1.0 trillion, and we also had a record number of first-time investors. Additionally, Card loans were up 12% on continued robust customer acquisition of 2.4 million.” ➡ Jeremy Barnum, CFO, “Card outstandings were up 12% due to strong account acquisition and the continued normalization of revolve. And in auto, originations were $10.8 billion, down 10%, coming off strong originations from a year ago while continuing to maintain healthy margins.” ➡ ➡ “I still feel like when it comes to Card charge-offs and delinquencies, there's just not much to see there. It's still -- it's normalization, not deterioration. It's in line with expectations. As I say, we always look quite closely inside the cohort, inside the income cohorts. And when you look in there, specifically, for example, on spend patterns, you can see a little bit of evidence of behavior that's consistent with a little bit of weakness in the lower-income segments, where you see a little bit of rotation of the spend out of discretionary into non-discretionary.” If you found value in this post, please like 👍 and share for visibility Looking for more fintech and consumer lending coverage? ➡ Follow/connect with me here for earnings updates, join my Discord server (for the full breakdown + archives), and remember to subscribe to the Cross River IQ (fka PeerIQ by Cross River) weekly newsletter #consumerlending #fintech #earnings

Good morning, catch up on this week's Cross River IQ (fka PeerIQ by Cross River) newsletter. Here are the highlights: ⤵⤵⤵ ➡ Mixed economic indicators ➡ Fed pleased with improving inflation data points ➡ Supreme Court allows swipe fee challenge to proceed ➡ Thread Bank latest to receive enforcement action ➡ Synapse saga continues Link to this week's edition in comments: ⤵⤵⤵ #consumerlending #fintech #baas

Good morning, catch up on this week's Cross River IQ (fka PeerIQ by Cross River) newsletter. Here are the highlights: ⤵⤵⤵ ➡ Consumer confidence drops ➡ Fed presidents still debating what’s next for rates ➡ Judge scuttles Visa/Mastercard settlement ➡ VERITUITY, Rainforest, and Payabli announced funding ➡ Chime makes an acquisition ➡ Klarna sells its checkout business ➡ Evolve Bank & Trust gets hacked ➡ TransUnion consumer credit data ➡ ➡ ➡ Special announcement: we have now rebranded the newsletter as Cross River IQ. Please make sure to whitelist iq@email.crossriverbank.com to ensure you don’t miss out on future editions of the newsletter! Link to this week's edition in comments: ⤵⤵⤵ #consumerlending #fintech #baas

TransUnion just released its monthly credit snapshot for May, below for my breakdown (with a focus on bankcard and unsecured credit): ⤵⤵⤵ ➡ In May, 60+ DPDs declined (MoM) for Bankcard (14)bps and Unsecured Personal Loans ("UPLs") (2)bps, but 60+ DPDs rose for Auto +4bps and Mortgage +1bp. This marks the 2nd month of declines for Bankcard after 7 consecutive months of DPD increases and 4th month of declines for UPL 60+ DPDs in the past 10 ➡ Looking at bankcard, 90+ DPDs fell (12)bps MoM, for a 3rd straight month, and 30+ DPDs fell for a 4th straight month, down (3)bps MoM. Despite the improvements, Q2 2023 vintage DPDs continue to track higher than Q2 2022 and well above Q2 2018-2021 vintages (see image) ➡ Avg bankcard balances grew 0.5% MoM, to $6,229 ➡ Turning to originations, we got information on UPL origination volume for the Feb 2024 – Mar 2024 period (lag due to reporting time) ➡ Mar fintech UPL originations rose for super prime +13.3% and prime plus +3.4%, while prime (1.1)%, near prime (3.4)% and subprime (13.5)% fell on a MoM basis. Super prime originations rose +101.9% YoY and prime plus +2.3% while all other risk tiers remained below Mar 2023 levels, with prime (23.0)%, near prime (41.9)%, and subprime (43.1)% ➡ Credit unions reported MoM increases across the board with super prime +14.9%, prime plus +12.2%, prime +2.7%, near prime +5.9% and subprime +22.5%. On a YoY basis, all risk tiers remained below 2023 levels, with super prime (2.1)%, prime plus (10.8)%, prime (10.2)%, near prime (14.4)% and subprime (5.0)%. ➡ Finance companies MoM UPL originations increased across the board with super prime +22.4%, prime plus +1.2%, prime +1.5%, near prime +6.5% and subprime +11.0%. On a YoY basis, originations were also up across the board, with super prime +39.3%, prime plus +44.0%, +prime 41.8%, near prime +31.1% and subprime +9.8% all above 2023 levels ➡ Banks reported MoM increases across super prime 26.9%, prime plus +6.8%, near prime 5.3% and subprime +15.6%, while prime was the only risk tier to report a decline of (0.4)% in Mar. Bank originations were lower than Mar 2023 levels for super prime (30.8)%, prime plus (35.5)%, prime (38.8)%, and near prime (19.9)%. Subprime +1.2% was the only tier above 2023 levels ➡ In Mar, finance companies maintained their lead in UPL balances, with 29.2% of the total, compared to 28.3% for fintechs, 22.2% for banks and 20.2% for credit unions ➡ In May, average UPL balances per consumer fell (0.2)% on a MoM basis, to $11,817 (Initial takeaways in comments ⤵⤵⤵) Thanks again to Dan Simmons and the TransUnion team for the great data! If you found value in this post, please like 👍 and share for visibility For more fintech and consumer lending coverage: ➡ Follow/connect with me here and join my discord server (link in bio) #consumerlending #consumercredit #fintech

Good morning, catch up on this week's PeerIQ by Cross River newsletter. Here are the highlights: ⤵⤵⤵ ➡ Both inflation and interest rates held steady ➡ Consumer optimism on stocks edges up ➡ Pipe bags a $100Mn debt facility ➡ InScope raises $4.3Mn to automate accounting ➡ Synapse drama continues ➡ U.S. Bank partners with Greenlight ➡ Apple launches “Tap to Cash,” Affirm partnership ➡ PingPong Payments announces embedded lending ➡ ➡ ➡ Special announcement: we are rebranding the newsletter as Cross River IQ. In the coming weeks, you will see updates to our branding (don’t worry, the content will remain the same!). Please make sure to whitelist iq@email.crossriverbank.com to ensure you don’t miss out on future editions of the newsletter! Link to this week's edition in comments: ⤵⤵⤵ #consumerlending #fintech #baas

Good morning, catch up on this week's PeerIQ by Cross River newsletter. Here are the highlights: ⤵⤵⤵ ➡ The job market tightens somewhat ➡ FDIC warns consumers on fintech apps ➡ Senate hearing on Zelle® scams ➡ Synapse end users still can’t access funds ➡ LoanPro announces Visa DPS integration ➡ LoanSnap faces legal problems ➡ eBay to drop American Express as payment option Link to this week's edition in comments: ⤵⤵⤵ #consumerlending #fintech #baas

Good morning, catch up on this week's PeerIQ by Cross River newsletter. Here are the highlights: ⤵⤵⤵ ➡ More rate hikes possible ➡ Numisma gets Fed master account ➡ Relay raises $32.2Mn ➡ Texting platform raises $110Mn ➡ PayPal to launch ads business ➡ Paze℠ wallet rollout continues. ➡ Jelena McWilliams appointed Synapse bankruptcy trustee Link to this week's edition in comments: ⤵⤵⤵ #consumerlending #fintech #baas

Just released my Q1 Consumer Lending Review covering personal loan and auto/bankcard trends, takeaways from fintech/bank earnings, and an increase in MPL new issue volume: ⤵⤵⤵ ➡ Despite an overall decline in unsecured consumer originations from the peak 21/22 era, it has not been due to a lack of consumer demand. Consumers are still seeking credit; some have turned to credit cards, cash advance products, and higher-APR (higher than 36% APR-capped loans) credit products to fulfill those needs. ➡ Higher-APR lenders like Enova leaned in on marketing, capitalizing on the demand. Enova increased its marketing spend and consumer originations rose by +43.3% YoY ➡ Fintechs that offer shorter-term cash advance products capitalized on major demand from consumers. MoneyLion (+41.7% YoY) and Dave (+31.6% YoY) reported double-digit increases in originations from the prior year. Facing high inflation, consumers have turned to these products to mitigate cash flow problems ➡ Consumer lenders LendingClub (28.1)%, Oportun (17.1)%, and OneMain Financial (10.4)% all reported YoY declines in originations, driven by continued credit tightening actions ➡ Oportun and Upstart have expanded into secured personal loans, expanding potential customer bases as they can extend larger loans at lower APRs   ➡ With consumer lenders maintaining tight credit boxes, TransUnion data showed delinquencies improve on a YoY basis, with 30+ DPDs (40) bps lower, 60+ DPDs (26) bps lower, and 90+ DPDs (27) bps lower ➡ Consumer spending remained strong, with spend volumes +8.6% at JPMorgan, +8.6% at Mastercard, +7.1% at Visa, +6.0% at Capital One (credit cards), +5.1% at Amex, +4.5% at Bank of America, but (1.6)% at Discover from the year prior ➡ With “excess pandemic savings” tapped out, consumers have turned to credit to finance their spending. TransUnion data showed that bankcard balances rose to $1,020.4Bn, up +11.3% YoY ➡ ➡ At the same time, data showed that serious bankcard delinquencies (90+ DPD) have continued rising to their highest level since the Great Recession era (1Q10) ➡ The cost of deposits has continued to rise, despite the Fed pausing its rate hikes, with LendingClub +29 bps, Synchrony +23 bps, Wells Fargo +16 bps, Capital One – Consumer +9 bps, and Citizens 9 bps on a QoQ basis ➡ In the first quarter, we saw a resurgence in demand in the consumer unsecured MPL market, with new issue volume +52.4% higher on a YoY basis and 48.1% higher on a QoQ basis (per Finsight Group Inc (FINSIGHT) data) Link in comments to the full report: ⤵⤵⤵ ➡ If you found value in this post (and/or the report), please like 👍 and share for visibility For more fintech and consumer lending coverage: ➡ Follow/connect with me here, join my Discord server (link in bio), and remember to subscribe to the PeerIQ by Cross River weekly newsletter #consumerlending #consumercredit #fintech

Fitch Ratings subprime auto delinquency data, to be featured in my upcoming Q1 Consumer Lending Review: ⤵⤵⤵ ➡ Fitch data showed that subprime auto delinquency rates remain elevated with 60+ day delinquency rates at 5.23% as of April 2024 ➡ While this marks a decline from the peak 6.39% rate we saw in February 2024, much of the decline may be explained by seasonality ➡ However, April 2024 60+ day delinquency rates were +56 bps higher than April 2023 and +88 bps higher than pre-pandemic (April 2019) levels ➡ Similarly, NY Fed data showed that 30+ day auto loan delinquencies continued to rise above pre-pandemic levels ➡ The trend continues when looking at more serious delinquencies, with 90+ day auto loan delinquencies above pre-pandemic levels ➡ According to NY Fed data, auto loan 90+ day delinquencies first breached pre-pandemic rates in 4Q23 and have since continued to rise If you found value in this post, please like 👍 and share for visibility Looking for more fintech and consumer lending coverage? ➡ ➡ ➡ Follow/connect with me here, join my Discord server (link in bio), and subscribe to the PeerIQ by Cross River newsletter to receive my upcoming Q1 Consumer Lending Review #consumerlending #fintech #consumercredit

Fintech NCO data, to be featured in my upcoming Q1 Consumer Lending Review: ⤵⤵⤵ ➡ Despite credit tightening efforts driving lower YoY origination volumes, LendingClub +310 bps and OneMain +86 bps reported YoY increases in NCO ratios ➡ LendingClub CFO Drew LaBenne explained that management expects NCOs to decline, stating, “As we indicated last quarter, we believe delinquencies and net charge-offs on our held for investment portfolio have peaked and are beginning to decline as the portfolio ages past the point of peak dollar net charge-offs.” ➡ OneMain CEO Doug Shulman noted, “We remain confident that the credit performance of the overall portfolio is moving in the right direction and continue to expect that losses will peak in the first half of 2024.” ➡ On the other hand, we saw slight YoY improvements in NCO ratios from Enova’s Consumer division (30) bps and Oportun (10) bps ➡ Oportun expects further improvements to its NCO ratio, as a greater % of loans come from its “front book” (post-July 2022 tightening actions) ➡ ➡ CEO Raul Vazquez explained, “The loss rates 12 or more months post–disbursement for our front book of loans continue to run approximately 400 basis points lower when compared to our back book of loans, with our Q1 2023 vintage now joining that group.” ➡ Fintechs have largely eclipsed pre-pandemic (1Q19) NCO ratios, with Enova International - Consumer +230 bps, OneMain Financial +148 bps, Ally +82 bps and Navient +70 bps If you found value in this post, please like 👍 and share for visibility Looking for more fintech and consumer lending coverage? ➡ ➡ ➡ Follow/connect with me here, join my Discord server (link in bio), and subscribe to the PeerIQ by Cross River newsletter to receive my upcoming Q1 Consumer Lending Review #consumerlending #fintech #consumercredit