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Weekly Orchard Online Lending Recap: New Entrant, Investments And Competition

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Weekly Orchard Online Lending Recap: New Entrant, Investments And Competition
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Orchard Platform, a technology and data provider for the online lending space, publishes a weekly review of the online lending sector.

Last week's report focused on all the notable new developments that occurred within the online industry throughout October and previewed several future events Orchard's leadership will be attending.

The latest report, dated November 4, focused on the latest entrant to the online lending space. Cross River Bank received a $28 million investment from Battery Ventures last week; Andreessen Horowitz and Ribbit Capital also participated.

Cross River Bank will compete head on against Wall Street banks, including Goldman Sachs Group Inc (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM).

Orchard noted that Goldman, JPMorgan and Cross River Bank each bring their own unique strategy to the market. Goldman built its own lending platform, JPMorgan prefers partnering with fintech firms and Cross River Bank is "focusing on improving the "plumbing."

In other news, Earnest announced its fourth securitization of student loans closed and was oversubscribed. The firm also announced a new $125 million credit facility from Deutsche Bank.

Finally, On Deck Capital Inc (NYSE: ONDK) reported its third-quarter results on Thursday and highlighted a 44 percent increase in loans under management on a year-over-year basis to $1.1 billion.

Here is a summary of the some of the major indicators the report follows:

  • The Orchard Index, an index designed to measure the performance of direct online lending to U.S. consumers, last read 1,478.22, up from 1,474.72 a month ago. The index tracks the performance of the aggregate amount of loans to consumers originated and funded on U.S.-based online lending platforms.
  • The KBW/Nasdaq Fintech Index, an index that tracks the performance of companies that specialize in combining technology with financial products and services, last read 989.62, down from 1,034.56 a month ago. The index was just launched in July of this year.
  • The Liberum/AltFi Financial Disruptors Index (LAFDI) tracks companies that are considered to be disrupting banks and financial services by using new approaches. The index last read 2,070.40, which is down from 2,041.70 a month ago.

Below are the five stocks Orchard tracks and their recent closes:

  • LendingClub Corp (NYSE: LC) closed at $5.13 on Friday and is lower by 53 percent since the start of 2016.
  • OnDeck Capital hit a new 52-week low of $3.98 on Friday and closed the session at $4.02, down 1.71 percent on the day.
  • Yirendai Ltd - ADR (NYSE: YRD) gained nearly 3 percent on Friday to close at $27.53. The stock has gained more than 200 percent over the past year.
  • Lendingtree Inc (NASDAQ: TREE) gained more than 2 percent on Friday to close at $81.55. Shares are still however lower by nearly 35 percent over the past year.
  • Square Inc (NYSE: SQ) gained more than 1.50 percent to close at $12.18 on Friday. The stock is higher by nearly 10 percent over the past five trading sessions following its earnings report, which was announced Wednesday.

Latest Ratings for GS

DateFirmActionFromTo
Aug 2017HSBCDowngradesBuyHold
Aug 2017Wells FargoReinstatesOutperform
Jul 2017UBSDowngradesBuyNeutral

View More Analyst Ratings for GS
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