January 17, 2017

Prosper Performance Update: December 2016

By Brad Pennington

Today we are sharing performance data for the Prosper portfolio for December 2016.

As you will see, the estimated return on December 2016 production is 6.45%*, with the platform distribution continuing to increase in the higher Prosper ratings. We believe this is the result of pricing updates that were made in October 2016 to match the competitive landscape.

In late December we implemented PMI7, our new custom underwriting/risk model. This update is part of our standard risk model update which takes place every 12-18 months. The PMI6 model which was replaced was implemented August 2015.

Additional highlights from the December update include:

  • FICO remains approximately 10 points higher than its lowest point in 2015 and early 2016. As a result of PMI7 we anticipate that FICO will remain relatively consistent within each Prosper rating grade but that we will begin to book a higher proportion of assets in the lower rating grades; this mix shift is expected to decrease the average FICO of the booked portfolio in January 2017.
  • Prepayment rates continue to track higher than those for 2014 and 2015 vintages, which we believe may be a result of pricing increases made throughout 2016.
  • Early delinquency rates in Q3 2016 and October 2016 vintages have shown improvement over 2016 H1, and have returned to early 2015 levels. We believe that this is attributable to policy tightening introduced in 2016.
  • Cumulative gross charge-offs in 2015 and 2016 continue to track higher than 2013 and 2014. Policy tightening and pricing changes have been introduced in response to these charge-off trends.

Portfolio insights and key charts can be found here.

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.

If you wish to add your name to the monthly performance update list please email [email protected].

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.