Author Topic: LC daily loan volume  (Read 8845 times)

Fred93

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LC daily loan volume
« on: June 21, 2016, 03:40:57 PM »
I got tired of reading news reports about the Morgan Stanley report where they processed all LC's SEC form 424's to calculate loan volume vs time, and yet not seeing the data, so I decided to do it myself.  Isn't easy.  You have to parse these huge reports, sometimes as many as 10 per day, to extract the info, and the 424's list some loans many times, so you have to deduplicate.  Anyway, I now have s/w that does it.  Here's my first plot.  The horizontal axis is the date of the form 424 where the loan first appears.  I haven't analyzed whether this is the same exact day each loan appears on the web site.  Has to be within a few days, per SEC regulations.  I added a 7-day moving average (red dotted line), which lets you see the trend.  Note: Each loan is counted only once, on the day it first appears.

« Last Edit: June 21, 2016, 06:31:26 PM by Fred93 »

jz451

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Re: LC daily loan volume
« Reply #1 on: June 21, 2016, 04:10:53 PM »
Looks like the number of loans might be ticking upward after the drop from 5/1 to 6/1. The average of the moving average looks to be in the 1400-1600 range. Hopefully there will be a continued recovery in loan volume.

lascott

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Re: LC daily loan volume
« Reply #2 on: June 21, 2016, 05:57:57 PM »
graph from NSRInvest and Emerald presentation today:

http://www.lendacademy.com/forum/index.php?topic=3950.msg36219#msg36219
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fliphusker

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Re: LC daily loan volume
« Reply #3 on: June 21, 2016, 06:31:25 PM »
graph from NSRInvest and Emerald presentation today:

http://www.lendacademy.com/forum/index.php?topic=3950.msg36219#msg36219
The first part of their presentation was fairly good, sorta poorly ran, but still pretty good.  Was going to watch the first half again, but can not find it.  Thanks for the chart though. 

brycemason

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Re: LC daily loan volume
« Reply #4 on: June 22, 2016, 01:53:31 PM »
Very nice work, Fred. I appreciate your effort.

rawraw

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LC daily loan volume
« Reply #5 on: June 22, 2016, 03:10:25 PM »
Very good work.  Thanks for sharing.

Bet some of those analysts would love to have this. Hopefully you don't get ripped off.

Publish to Seeking Alpha quick! Ha

Sent from my SAMSUNG-SM-G935A using Tapatalk

SLCPaladin

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Re: LC daily loan volume
« Reply #6 on: June 22, 2016, 03:20:10 PM »
Wow, this is excellent data. Kudos for spending the time to gather it and for making it available to us on the forum. I certainly see this as an encouraging sign. I feel like there is a sense of normalcy returning to LC.

rawraw

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Re: LC daily loan volume
« Reply #7 on: June 22, 2016, 06:05:11 PM »
Wow, this is excellent data. Kudos for spending the time to gather it and for making it available to us on the forum. I certainly see this as an encouraging sign. I feel like there is a sense of normalcy returning to LC.
Remember this is only one funding source.  but let's hope normalcy comes (after another brief panic so I can buy more folio notes)

nonattender

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Re: LC daily loan volume
« Reply #8 on: June 22, 2016, 07:03:45 PM »
Break out % funded by LC and you'll be up to analyst-speed.
A little nonsense now and then is relished by the wisest men.

Fred

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Re: LC daily loan volume
« Reply #9 on: June 23, 2016, 03:13:23 AM »
Isn't easy.  You have to parse these huge reports, sometimes as many as 10 per day, to extract the info, and the 424's list some loans many times, so you have to deduplicate.  Anyway, I now have s/w that does it.  Here's my first plot. 

Agreed with what people said, this is a very useful exercise.  Thanks for sharing.

You just did what perhaps a team of Morgan Stanley data analysts did in weeks.  Watch your inbox for messages from interested institutionals.

Good to see the post June-1 numbers are back to near normal levels.  I wonder how much of those loans were funded (fully or partially) by LC.
 

Rob L

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Re: LC daily loan volume
« Reply #10 on: June 23, 2016, 10:16:10 AM »
Very nice. Just to make sure I understand, the 424's include all the fractional notes originated and none of the whole loans originated.
These are  fractional notes purchased by retail, LC advisors, banks, other institutions and now LC itself. LC has provided information on the percentages of each group in the past. Correct?

Fred93

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Re: LC daily loan volume
« Reply #11 on: June 23, 2016, 01:38:05 PM »
Very nice. Just to make sure I understand, the 424's include all the fractional notes originated and none of the whole loans originated.

There is no distinction made about whether notes are sold whole vs fractional.   LC generates notes, which are either representative of an entire loan, or a piece of a loan.  The 424 provides information about each each "series" of notes, ie each loan.

Quote
...retail, LC advisors, banks, other institutions and now LC itself. LC has provided information on the percentages of each group in the past. Correct?

There is a viewgraph in the Q1 presentation materials which shows the relative fractions of various customer classes (bank, institutions, etc).

The 424 documents the product, not who the product was sold to.

AnilG

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Re: LC daily loan volume
« Reply #12 on: June 23, 2016, 01:47:19 PM »
Does 424 document loans "issued/originated" or "listed for funding"? My understanding is 424 documents loans that were listed for funding, not necessarily all the loans listed in 424 are issued/originated.

There is a viewgraph in the Q1 presentation materials which shows the relative fractions of various customer classes (bank, institutions, etc).

The 424 documents the product, not who the product was sold to.
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Fred93

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Re: LC daily loan volume
« Reply #13 on: June 23, 2016, 02:27:47 PM »
Does 424 document loans "issued/originated" or "listed for funding"? My understanding is 424 documents loans that were listed for funding, not necessarily all the loans listed in 424 are issued/originated.

Right.

My understanding is that the 424B3 are supplements to the prospectus, documenting securities offered, which in this case means series of notes listed.

The wording in the LC 424B3 is "The following standard program member loan is currently available for investing in through Notes."

These filings are meant to be an archival documentation of the characteristics of individual series of notes offered by LC, not a source of business statistics on LC's loan origination, so they lack information about whether the underlying loan was cancelled by LC, or whether there were enough investors to actually issue the loan, etc.

When loans are "sold", no notes are generated.  Only one class of customer can buy "loans" rather than notes or certificates.  Those are banks.  I do not know whether loans sold to banks appear in the 424B3.  There are simply no words about this in the forms themselves.  I suspect that they do not appear.  There is no legal reason why they should appear, as the SEC is interested only in securities ISSUED by LC, and loans that are sold are simply products  being sold, not securities issued by LC.  On the other hand, I don't see any legal issue prohibiting them from appearing.  I tried reading the regulations which governs form 424, and all I can say is that effort was not helpful.

Interestingly, although the information contained seems extremely minimal to those of us interested in loan origination, these forms do "leak" information to us which LC has censored thru other routes.  For example: LC long ago censored the dates in the historical data file by quantizing them to the month.  All the historical file listing dates are now of the form XX/01/XXXX.  However, we can see the exact date that the loan first appeared in a 424B3, so information LC has censored leaks out to us thru the SEC.  I used to compute stats from the historical file showing how quickly loans funded.  Can't do that any more since LC censored the dates.  However, now that I look at the 424B3's I see that one can extract that information from them, by noting the first and last day in which a particular loan appears in a 424B3.

Fred93

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Re: LC daily loan volume
« Reply #14 on: June 25, 2016, 05:28:08 PM »
Chart updated thru Friday 6/24/16.  I've also included more history. 



This data comes from Lendingclub's SEC form 424B3 filings.  Each loan is counted only once, on the date where it first appears in a form 424B3 filing.  This should roughly correspond to the date the loan appears on LC's web site, although the SEC regulations allow a few days difference.

I've added several moving averages (red, green, yellow), and then dimmed out the actual data points (blue dots).  The blue dots jump around so much that you can't immediately see the trend.  I suggest you look at the moving averages instead.  Red is the past one week.  Green is the past 4 weeks.  Yellow is the past quarter.

In this time scale, you can clearly see the big dips at the ends of certain past quarters.  Look at the red line, just before 1/1/2015, or 7/1/2015, or the really big one just before 10/1/2015.  These were caused by something very different than the  current difficulties.  LC had nearly unlimited demand for its product back then, and ran "too hot" during the first parts of these quarters, and then severely limited supply at the end of the quarter to make the quarter's originations end up almost exactly 16% higher than the quarter before.  You can tell that this restriction was artificial, because right after the end of the quarter, supply would spring back up in an amazing way.  The nicest example of such a springback was when 10,000 loans were posted on 10/1/2015, which is amazing by itself, but was followed by huge numbers the next two days!

2016Q1 was the first quarter in a long time where we did not see that end of quarter restriction.  Perhaps this was the first sign of stress.  Because of slowing demand from institutional investors, LC wasn't able to run hot during the early part of the quarter as they had before, and in fact ended the quarter up only 6.6% over the prior quarter, rather than the usual 16%. 

Back to the present, some stock market "analysts" touted an increase in LC loan postings a few days back, and we can now see that this is looking more like a bump, rather than a sustained increase.  Had these "analysts" been involved with LC over a longer time, they would have understood how much these numbers bounce around.  Of course whether you think the data shows us a tend heading up or down depends on your time scale, as you can see from the different directions that the three curves are pointing at the right edge of the chart.
« Last Edit: June 25, 2016, 05:33:20 PM by Fred93 »