# GROUP 3 Unsecured Loans Amanda Ackman Amanda Hayward

• Slides: 17

GROUP 3 - Unsecured Loans Amanda Ackman Amanda Hayward Said Ngobi Allison Venable

Delinquency Rates n n Calculated percent delinquent for each month by tier and delinquency category Constructed a scatter plot for each tier and category and fitted a curve Noticed the curves have peaked and are now decreasing Concluded that the delinquency rates are falling

Loan Prepayments n n n Found the percentage of prepayments for each month in each tier Created a scatter plot for each tier to show the prepayments change over time Noticed that the percent prepaying is staying around 2 -3 percent while loan amounts are steadily increasing A-tier prepayments stay a little higher, around 3 percent while B and C stay around 2 percent D-tier and Mergers are higher and very inconsistent

A -Tier Prepayments

B and C Tier Prepayments

D-Tier and Merger Prepayments

Loan Originations n n Calculated percentage of loan originations for each tier Created a scatter plot for each tier Noticed a significant increase in A-Tier loans with decreases in Mergers and C-Tier loans C and D Tiers and Mergers each make up less than 10% of the originations after quarter 3

Charge-offs n n Calculated percent of charge-offs for each quarter since origination for each month Created a graph for each tier and month, then fitted a curve Noticed this data was not very consistent from month to month Decided to compile data into two groups for analysis: the first two quarters and the second two quarters

Months 24 and 25 B-Tier Month 24 B-Tier Month 25

§A-Tier seemed to peak a little later than the others §Peak about 5 -7 quarters from origination A-Tier Average of first two quarters A-Tier Average of second two quarters

§C-Tier was very similar to B, D, and Merger §Seemed to peak around 3 -4 quarters after origination C-Tier Average of first two quarters C-Tier Average of second two quarters

§The biggest jump in percentages from one tier to the next is from B to C §There seems to be a definite distinction between the customers in these two tiers

Overall Charge-offs n n We noticed that between the first two and second two quarters of data there was a decrease in the percentages of charge-offs for all tiers except Ctier which remained constant It is evident that the bank is accurately rating customers because of the trend differences between A and B tiers and the percentage differences between B and C tiers

Conclusion n n Delinquency rates seem to be improving. Prepayment percentages appear to be steady. Loan mix is becoming less risky. Percent of charge-offs seems to be lowering slightly. As the total amount loaned has increased, the analysis of our data has shown that the quality of loans has also increased; therefore, we recommend that the bank continues expanding loan volume to maximize profit.