Now that GSY has reached a loan book of $4bill. & has a $6bill. target for the end of 2026, can you make a guess as to what that might mean for earnings? Has there been a relationship on their journey from $1bill. to $4bill.?
Jason D. mentioned whispers CSU is getting set to do another spinoff. Hear anything? Maybe that accounts for current weakness in LMN.
PRL does use AI to help determine risks. Its system takes a more holistic look at each consumer and can pull from over 5,000 data points to better understand a consumer's financial circumstances. This allows it to price risk differently for each customer. Each loan (and performance thereof) adds to its database, and it has 12 years of data. On GSY, there is a correlation between earnings and loan book, but it is not direct as loan rates and losses play a bigger overall role than just loan growth. For example, with the government capping loan rates, subsequent loans (on average) were less profitable. But only about 7% on loans were captured under the new rules, and year-over-year comparisons are now cleaner. As long as there is no dramatic change in rates and/or loss rates, and no dramatic change in cost structure, earnings should reasonable track loan growth.
CSU is likely very happy with its spin offs, and another would not surprise us, but we do not have any specific insight here. But we would not necessarily see a new spin off as negative to LMN or the cause of recent minor weakness.