In part one of this series we explored the interest rate movements at Lending Club over the past year. In this post we’ll review the actual performance of loans to get an idea on how the recent vintages are trending since the first quarter of 2014.
Delinquency Rates with Lending Club
To begin with we’ll take a broad look at the vintages using delinquency rates which helps paint a picture of what’s going on with all loans originated by Lending Club. Lending Club club shares delinquency rates on their additional statistics page. The below charts are courtesy of NSR Invest and include the most recent data from Lending Club as of Q3 2016.
36 month Delinquency rates from Q3 2013 are shown below. The light blue shaded area represents Q3 2013 36 month loans which are now fully mature. Vintages through Q2 2014 remained pretty stable, but you can start seeing noticeable increases in delinquencies in notes originated in Q3 2014 and Q4 2014. Starting in 2015, delinquencies had a much steeper slope which has continued into the 2016 vintages. Delinquency rates break 2% for many vintages compared to the peak of 1.5% for Q3 2013. What will be interesting to see is how Q3 2016 delinquencies trend once we receive 3 more months of Lending Club data on February 14, 2017 when Lending Club announces their Q4 earnings.
The chart below also tracks delinquency rates, but only includes 2015 and 2016 vintages. It is also easier to compare the vintages with the line chart. It’s clear that early delinquency rates have been increasing in recent quarters.