Insights
Case studies from our founder's twenty years of running credit, and analysis of consumer credit, banking, private credit and ABS, most of it worked out from public filings.
What SoFi's fair-value marks say about prime personal loan pricing
SoFi carries its personal loan book at fair value, one of the few public windows into how prime unsecured paper is priced. Q3 shows strong growth, lower losses, and a discount rate that rose less than rates did.
LightStream to Carlyle: working backwards to the deal math
$7.7B of prime personal loans sold for roughly 93.5 cents. Using only public disclosures, here is what the price implies about losses, duration and Carlyle's return, and why Truist was willing to take it.
A mark isn't a fact: what BDC loan marks reveal when they disagree
The same syndicated loan often sits on a dozen BDC balance sheets. If value were a fact, every lender would mark it at the same price. They don't, and how the marks converge carries information.
Up on safety, down on price: the K-shape comes to direct lending
Consumer credit has been splitting into a K for two years. Looking for the same shape in ~$300B of BDC direct-lending data turns up a flight to quality, and a question about how stable fair-value marks really are.
Rebuilding credit, pricing and modeling to support 4x origination growth
A BlackRock- and TruStage-backed personal lender with $6B+ originated since inception, funded through credit union and institutional partners, needed credit infrastructure built for growth and investor scrutiny.
Tripling profit through fraud automation, acquisition economics and cheaper funding
A mission-driven lender serving more than a million underserved customers needed to scale profitably while handling a million applications a month.
Restructuring bank partnerships and building a valuation business for PE buyers
A Carlyle-backed student lending platform needed better unit economics from its bank partnerships, and saw an opening as banks sold student loan portfolios to private equity.
Are banks outsourcing lending to fintechs?
During the pandemic, the fastest-growing loan category at large US banks was loans to non-bank financial institutions, which mostly means warehouse lines to fintechs. Banks increasingly grow in assets where they don't own the customer.
Reading Goldman's Apple Card loss expectations from its CECL reserve
With almost no loss history on Apple Card, how do you estimate its risk? CECL adoption made reserves comparable across issuers, and Goldman's 11.5% reserve implied about a 6% annual loss rate, closer to Citi than Amex.
Is there such a thing as too much deposit?
Deposit growth outpaced loan growth, loan-to-deposit ratios fell, and NIM compressed. The loans that did grow came from fintech warehouse lending and riskier unsecured consumer credit. Then the pandemic turned the trend into a flood.
Making the case for a bank's push into unsecured lending
A super-regional bank weighing more unsecured consumer lending needed a quantitative answer on through-the-cycle returns, and a way to grow quickly.
The dilemma in lending
The best credit comes from borrowers who don't need the money. That's an oxymoron, and yet true. The opportunity is in borrowers with an urgent need today and strong income prospects tomorrow.
Credit frameworks for new products and loss forecasting for a $50B+ consumer book
Launching new consumer products, including education refinance and point-of-sale financing for the Apple iPhone Upgrade Program, while owning CCAR and loss forecasting across the consumer portfolio.
Cutting charge-offs by $10MM a year through collections strategy
Building a centralized credit analytics function across all US consumer products and using it to rethink collections.
Running risk-based pricing for a $50B credit card portfolio
Overseeing the risk-based pricing program for a $50B card portfolio, and the segmentation and valuation behind balance-build strategy for 16 million subprime accounts.
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