1. INDUSTRY TRENDS FROM A CREDIT PERSPECTIVE
October 2017

2. Agenda Delinquency / Default Lending Activity Outlook Background
Fed Statistics
Delinquency / Default
Lending Activity
Outlook

3. Background Financial Services for 25+ years
CBOT - 30 Year Treasury Pit
PayNet

4. CBOT

5. Fed Statistics GDP – Q216 1.8% Q217 2.2%
Unemployment – Q % Q %
Participation Rate – Q Q %
Non – Farm Payrolls – Q Q
Inflation – Q % Q %

6. The PayNet “Real-Time” Database
The largest database of small business loans, leases & lines of credit
Collecting real-time lease/loan info from lenders
> $1.5 trillion in commercial debt originations
> 24 million term debt/lease contracts
200+ unique data points driving performance
Services
Manufacturing
Retail Trade
Transportation
Wholesale Trade
Agriculture
Construction
Finance
Public Administration
Mining

7. Delinquency & Default

8. PayNet SBDI
PayNet Small Business Delinquency Index July2017
July 2017

9. Loans Past Due – National
Delinquency had been rising through the spring but
August SBDI is 1.33% down 2 basis points from July

10. Loans Past Due – National
Month over Month change

11. Loans Past Due – National
Loans past Due by Industry
Big news was the spike in transportation in the last year, though it has moderated a bit 2017
Agriculture rising though still lower than other industries
Construction rising as well.

12. PayNet SBDFI July 2017 Default by state
Texas, Louisiana , and the southeast are the most stressed.
July 2017

13. Defaults – National
August 1.84 Up 9bps from July

14. Defaults - National
YOY change

15. 91+ Day % by Year of Origination (Vintage)
At Quarter 8 on the Books – All Equipment
91+ Day delinquency by Vintage. 8 quarters on the books
Rise in 2015

16. Default Rates by Vintage & Score Tier
Default Within 24 Months of Origination

17. Lending Activity

18. PayNet SBLI
Pick out Growth States and Weak states
July 2017

19. Lending Activity – National
August up to 1.34

20. Lending Activity – National
YOY Change

21. SBLI vs. SBDI 91-180 Days Past Due

22. Average Transaction Term of New Originations
Months, Seasonally Adjusted
We have seen transaction terms steadily increase since 2009 and that has continued.

23. Industries with Strongest SBLI Growth:
Originations:
Strongest -Food, Admin, Construction, and Information
Food
Admin
Arts
Construction
Info
Source: SBInsights.com

24. Industries with Weakest SBLI Growth
Originations – Weakest Industries
AG, Finance, Health Care, Mining, Transportation
Agriculture
Finance
Health Care
Mining
Transportation
Source: SBInsights.com

25. Growth Sectors

26. Lagging Sectors

27. Forecast

28. Default Rates – National

29. Actual & Predicted Default Rates
By Industry Segments

30. Actual & Predicted Default Rates
By Industry Segments

31. Default Rates – National by Industry

32. Defaults – National
Mining and Transportation

33. Defaults – FDIC Regions

34. Projected 12-Month Default Rates by County
July 2017

35. Default Rates – National

36. Where are Defaults Headed?

37. PayNet Stress Test SimulatorSM
Historical & Projected Defaults – CCAR Scenarios

38. THANK YOU Barry Ripes bripes@paynet.com (847) 745-6062