Today we are sharing performance data from the Prosper portfolio for July 2017.
Our risk team implemented a credit tightening in July aimed at removing certain populations of borrowers from originations on a go-forward basis. As a result of this credit tightening, the overall distribution of the book shifted slightly towards lower risk loans. This slight shift resulted in an overall portfolio coupon decrease of 45bps and an overall return estimate decrease of 26bps.
Additional highlights from the July Update include:
- Charge-off levels in 2016H2 vintages continue to show meaningful improvement compared to 2016H1 vintages. We believe this is a result of a number of credit policy changes and tightening implemented in response to incremental stress that had been observed in the late 2015 and early 2016 vintages.
- Periodic delinquencies moved higher for 2016 and 2017 vintages. While this is expected for the younger vintages as they move towards peak delinquency months, this was a reversal of the trend for 2016Q2 and 2016Q3 vintages. We believe this is due, at least in part, to the overall consumer credit environment returning to more normalized levels of delinquency following years of below average delinquency and stress. We continue to keep a close watch on broader trends and are proactively changing credit policy in an effort to address future consumer stress as well as any incremental stress observed in prior vintages.
The Prosper Performance Updates are designed to help our investor community better understand performance trends and to provide them important insights into the trends we are seeing and the information needed to invest through the Prosper platform.
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Actual performance may differ from estimated performance, and the information presented is not intended to be investment advice or a guarantee of the performance of any Note or loan.
The data, statements and figures in this post are based on Prosper’s analysis and calculations which, in turn, are based on various data sources compiled and analyzed by Prosper with all reasonable care to ensure they contain no omission likely to affect their import. Neither the analysis nor the underlying data sources have been verified by an independent third party.
This post includes forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management and is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. All forward-looking statements speak only as of the date of this post and are expressly qualified in their entirety by the cautionary statements above. We undertake no obligation to update or revise forward-looking statements that may be made in this post to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.
All personal loans are made by WebBank, a Utah-chartered Industrial Bank, Member FDIC. All personal loans through Prosper are unsecured, fully amortized personal loans. Neither Prosper Funding LLC nor Prosper Marketplace, Inc. are registered as an investment adviser with any federal or state regulatory agency. The information contained in this presentation is for informational purposes, and should not be construed as individually tailored investment advice or as a recommendation with respect to any security or investment approach. This presentation has been prepared without regard to the circumstances and objectives of its participants and should not be relied upon as authoritative or taken in substitution for the exercise of judgment by any individual. Each individual should consider the appropriateness of any investment decision having regard to his or her own circumstances, the full range of information available and appropriate professional advice. Prosper Funding LLC and Prosper Marketplace, Inc. recommend that each individual seek independent investment and financial advice concerning any services or investments discussed in this presentation.