This is my first-time post to Saul’s board and I hope it is of benefit to the other members. I have been observing this board for about 9 months and want to thank Saul and the other long-term members for their wisdom, insights and wonderful analysis of various stocks. I have learned much over this time.
For my background, I have been in the retail/commercial banking market for over 35 years, half that time as a banker and the other half working for major vendors in this space. I have managed technology/operations groups at various banks and have had responsibility for lending operations.
Upstart has a current install base of about 25 banks and credit unions. It appears one of their larger clients is Associated bank with an asset size of $35B.
One of the proxies in looking at the opportunity for Upstart’s lending solutions is to look at bank asset sizes. The larger the bank, the larger their customer base and the larger number of loans. The same is true with Credit Unions.
Here are statistics regarding the asset size of the banks and credit unions in the U.S. Take this as directionally correct because you will find slightly different numbers depending on the source leveraged.
Banks – 4,983 banks and savings institutions in the U.S.
4,011 have assets less than $1B
707 have assets of $1B-$5B
104 have assets of $5B-$10B
64 have assets of $10B – $20B
64 have assets of $20B-$100B
33 have assets greater than $100B
Credit Unions – 6,293 credit unions in the U.S.
5,961 have assets less than $1B
322 have assets of $1B - $10B
10 have assets greater than $10B
Given Upstart’s current install base of about 25 clients, which likely tends to be smaller size firms, there is a very significant upside opportunity for market expansion. Also, as they move up market to larger size clients, their loans per bank or credit union will increase.
I am sure in the months/years ahead they will bring on many more banks and credit unions (both domestic and international) as well as expand their offerings into different loan types. All signs are very positive.
Long on UPST