A quick apology to my readers. I have three huge projects winding down by the end of the year at my 9-5 job. I’ve been putting in much longer and more focused hours there over the past couple months and it’s only going to get worse between now and Christmas. I try to write at least every two weeks, but I do not know if that will be possible in December. Once the new year rolls around I should get back to a more steady cadence. Hopefully you are all ok bearing with me during this time. I would also really like to launch a YouTube channel at the beginning of the year, but have not reached the paid subscriber level I think would justify the time necessary. If you want to see more content from me, that’s how you can make it happen. 100% voluntary as always and I share all my content either way.
Thanks for sharing the very positive information from Chris LaPointe. Also, the Capital Ratio ("risk-basked"?) chart is very helpful. From your comments, it seems the upper bounds are moving at about the same rate as their assets. That's also very encouraging. Once analysts understand the situation better, it could be interesting to see what unfolds.
Not quite the same rate. Adding $100M to their capital increases the top of the green bar by ~$800M, but they are growing their assets by ~$2.5B every quarter. They'd need to add like $300M of capital every quarter to keep growing at the current rate.
However, the larger their book gets, the more gets paid down every quarter, they have the $2B forward flow agreement, and SoFi has never hit below the midpoint of it's guidance on anything, ever. In fact, they almost always overshoot the top of their guidance.
I think if they guide for $300-$500M of TBV growth next year, we are going to see around $600M at least. That means next year you have at least $2B rolling off every quarter from payments, $500M/qtr from forward flow, and ~$1.2B quarterly from TBV addition. That's about $3.7B per quarter at a minimum they can originate. In 3Q23 they originated $5.16B, of which $355M were home loans that they sell almost immediately, so call it $4.8B in PL+SL. So they need to sell an additional $1.1B in PL and SL loans next year per quarter to keep originations flat from where they were last quarter.
Thanks for sharing the very positive information from Chris LaPointe. Also, the Capital Ratio ("risk-basked"?) chart is very helpful. From your comments, it seems the upper bounds are moving at about the same rate as their assets. That's also very encouraging. Once analysts understand the situation better, it could be interesting to see what unfolds.
Not quite the same rate. Adding $100M to their capital increases the top of the green bar by ~$800M, but they are growing their assets by ~$2.5B every quarter. They'd need to add like $300M of capital every quarter to keep growing at the current rate.
However, the larger their book gets, the more gets paid down every quarter, they have the $2B forward flow agreement, and SoFi has never hit below the midpoint of it's guidance on anything, ever. In fact, they almost always overshoot the top of their guidance.
I think if they guide for $300-$500M of TBV growth next year, we are going to see around $600M at least. That means next year you have at least $2B rolling off every quarter from payments, $500M/qtr from forward flow, and ~$1.2B quarterly from TBV addition. That's about $3.7B per quarter at a minimum they can originate. In 3Q23 they originated $5.16B, of which $355M were home loans that they sell almost immediately, so call it $4.8B in PL+SL. So they need to sell an additional $1.1B in PL and SL loans next year per quarter to keep originations flat from where they were last quarter.