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©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks ofExperian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners.No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public.
Quarterly Business Credit Review
Presented by Joel Pruis
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Small Business Credit Index
Increase of 2.8 points and highest reading since inception!
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National PerspectiveExperian Metro Business Pulse
Q1 2013 Q2 2013 Change
Delinquency 15.26% 13.43% 1.83%
Days Beyond Terms 7.69 5.71 1.98
Bankruptcy Rate 1.03% 0.99% 0.04%
Fewer businesses paying late + Faster payments = More Money faster for Creditors!
Source: Experian Metro Business Pulse
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Performance by Industry
Industry Delinquency Days Beyond Terms Bankruptcy Rate
Top
Health Services 8.36% 3.98 0.68%
Hospitality 9.08% 5.31 1.55%
Forestry 11.16% 3.79 1.03%
Mining 11.37% 5.00 1.92%
Education Services 11.68% 4.47 0.69%
Bottom
Manufacturing 16.04% 6.59 1.93%
Transportation 19.59% 8.24 2.09%
Communications 19.71% 8.17 1.65%
Finance 20.13% 10.01 1.29%
Construction 22.90% 11.94 2.41%
Source: Experian Metro Business Pulse
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Small Business Credit Quality
Source: Experian Metro Business Pulse
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BankruptcyRate
DaysBeyondTerms
Delinquency
Top & Worst by Geography
Top0.92% - 5.05%
Worst20.11% - 44.72%
Top3.79 – 12.18
Worst7.78 – 10.58
Worst0.43% - 0.71%
Top0.77% - 1.57%
Source: Experian Metro Business Pulse
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Top/Bottom 10 - Delinquency
Source: Experian Metro Business Pulse
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Top/Bottom 10 – Days Beyond Terms
Source: Experian Metro Business Pulse
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Top/Bottom 10 – Bankruptcy Rate
Source: Experian Metro Business Pulse
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Small businesses are improving their credit profile
Performance differs:
► By Industry
● Health Services vs. Construction
► By Geography
● Delinquencies vs. Bankruptcy Rates
What Does This Mean To You?
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Decision strategies must adjust to:
► Attract new customers
► Retain existing customers
Credit Performance must be monitored by:
► Geography
► Industry
► Other?
Key Take-Away’s:
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©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks ofExperian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners.No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public.
Macro Outlook: The Right Pieces Are Falling Into Place
Cristian deRitisMoody’s Analytics
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05 06 07 08 09 10 11 12 13F 14F 15F-6-5-4-3-2-1012345
GDP Growth Remains Lackluster…
Source: Moody’s Analytics
Real GDP growth, %
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8080:02:0080:03:0080:04:0081:01:0081:02:0081:03:0081:04:0082:01:0082:02:0082:03:0082:04:0083:01:0083:02:0083:03:0083:04:0084:01:0084:02:0084:03:0084:04:008585:02:0085:03:0085:04:0086:01:0086:02:0086:03:0086:04:0087:01:0087:02:0087:03:0087:04:0088:01:0088:02:0088:03:0088:04:0089:01:0089:02:0089:03:0089:04:009090:02:0090:03:0090:04:0091:01:0091:02:0091:03:0091:04:0092:01:0092:02:0092:03:0092:04:0093:01:0093:02:0093:03:0093:04:0094:01:0094:02:0094:03:0094:04:009595:02:0095:03:0095:04:0096:01:0096:02:0096:03:0096:04:0097:01:0097:02:0097:03:0097:04:0098:01:0098:02:0098:03:0098:04:0099:01:0099:02:0099:03:0099:04:000001020304050607080910'11'120
10
20
30
40
50
60
Interest coverage ratio
Quick ratio
Corporate Balance Sheets Are Strong
Nonfinancial corporate businesses
Sources: Federal Reserve, Moody’s Analytics
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'90
90:02:00
90:03:00
90:04:00
91:01:00
91:02:00
91:03:00
91:04:00
'92
92:02:00
92:03:00
92:04:00
93:01:00
93:02:00
93:03:00
93:04:00
'94
94:02:00
94:03:00
94:04:00
95:01:00
95:02:00
95:03:00
95:04:00
'96
96:02:00
96:03:00
96:04:00
97:01:00
97:02:00
97:03:00
97:04:00
'98
98:02:00
98:03:00
98:04:00
99:01:00
99:02:00
99:03:00
99:04:00
'00
0:02
0:03
0:04
1:01
1:02
1:03
1:04
'02
2:02
2:03
2:04
3:01
3:02
3:03
3:04
'04
4:02
4:03
4:04
5:01
5:02
5:03
5:04
'06
6:02
6:03
6:04
7:01
7:02
7:03
7:04
'08
8:02
8:03
8:04
9:01
9:02
9:03
9:04
'10
'11
'12
'13
6.25
6.75
7.25
7.75
8.25
8.75
9.25
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Core Capital Ratio (L)
Return on Assets (R )
Banks are Well Capitalized and More Willing to Lend
Commercial banks
Source: FDIC
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Household Debt Service Ratios Near Record Lows
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 1210.0
10.5
11.0
11.5
12.0
12.5
13.0
13.5
14.0
14.5
15.0
15.5
16.0
16.5
17.0
17.5
18.0
18.5
19.0Debt service (L)Financial obligations (R)
% of disposable income
Sources: Federal Reserve, BEA, Moody’s Analytics
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Home Equity Is Being Restored And…
Case-Shiller Index, average annual growth, %, 2013-2016
Sources: CoreLogic, Moody’s Analytics
U.S. = 5.9
≥7.1
5.1 to 7
3.1 to 5
≤3.0
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18©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
0202020203030303040404040505050506060606070707070808080809090909101010101111111112121212131313131414141415151515
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
Trend
Housing Construction Is Steadily Improving…
Sources: Census, Moody’s Analytics
Single-family and multifamily starts, mil
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'05
5-Feb
5-Mar
5-Apr
5-May
5-Jun
5-Jul
5-Aug
5-Sep
5-Oct
5-Nov
5-Dec
'06
6-Feb
6-Mar
6-Apr
6-May
6-Jun
6-Jul
6-Aug
6-Sep
6-Oct
6-Nov
6-Dec
'07
7-Feb
7-Mar
7-Apr
7-May
7-Jun
7-Jul
7-Aug
7-Sep
7-Oct
7-Nov
7-Dec
'08
8-Feb
8-Mar
8-Apr
8-May
8-Jun
8-Jul
8-Aug
8-Sep
8-Oct
8-Nov
8-Dec
'09
9-Feb
9-Mar
9-Apr
9-May
9-Jun
9-Jul
9-Aug
9-Sep
9-Oct
9-Nov
9-Dec
'10
10-Feb
10-Mar
10-Apr
10-May
10-Jun
10-Jul
10-Aug
10-Sep
10-Oct
10-Nov
10-Dec
'11
11-Feb
11-Mar
11-Apr
11-May
11-Jun
11-Jul
11-Aug
11-Sep
11-Oct
11-Nov
11-Dec
'12
12-Feb
12-Mar
12-Apr
12-May
12-Jun
12-Jul
12-Aug
12-Sep
12-Oct
12-Nov
12-Dec
'13
13-Feb
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
122,000
124,000
126,000
128,000
130,000Housing-Related (L)
Non Housing-Related (R )
…Supporting More Jobs and Small Businesses
Source: Wall Street Journal, Moody’s Analytics
Thousands of jobs
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©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks ofExperian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners.No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public.
HOT TOPIC:
The Regional Divide
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The Regional Divide
Source: Experian/Moody’s Small Business Credit Index Q2 2013
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Leaders vs. LaggardsDelinquency
Source: Experian Metro Business Pulse
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Leaders vs. LaggardsDays Beyond Terms
Source: Experian Metro Business Pulse
Page 24
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Leaders vs. LaggardsBankruptcy Rate
Source: Experian Metro Business Pulse
Page 25
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©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks ofExperian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners.No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public.
Is the Sun Rising in the West and Setting in the East?
Why the regional divide may be a long-term phenomenon.
Nathan KelleyMoody’s Analytics
Page 26
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Regional Jobs Recoveries Diverge Noticeably
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
2.3NortheastMidwestSouthWest
Sources: BLS, Moody’s Analytics
Payroll employment, % change yr ago, 3-mo moving avg
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Wages are growing.
► This is leading shoppers out to spend.
► The support to revenues is helping small companies stay current on debt.
The mix of jobs in major Mountain West cities has been concentrated in higher paying professions.
Housing-related industries are in better financial shape, making them a safer bet for lenders.
What Does This Mean To You?
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Residents Heading to Where the Jobs Are
% change in population, 2012
0.54% to 1.38%
-0.09% to 0.54%
1.38% to 2.17%
Sources: Census Bureau, Moody’s Analytics
U.S.=0.96%
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West is the Clear Winner for Price Gains
0.0% to 4.0%
Prices falling
4.0% to 14.3%
Sources: FHFA, Moody’s Analytics
FHFA home price index, % change yr ago
U.S.=4.0%
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Business Creation Concentrated in the West
Establishment births, % change yr ago, 4-qtr MA, 2012Q4
-5.5% to 2.6%
-16.8% to -5.5%
2.6% to 24.1%
Sources: BLS: Business Employment Dynamics Survey, Moody’s Analytics
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Foreclosures a Big Problem for FL, IL, and NV
Sources: RealtyTrac, Moody’s Analytics
-6.72 to 6.726.72 to 29.95
-10.60 to -6.72
Foreclosed properties per 1,000 households, diff from U.S., Aug 2013
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Migration to the South and West Will Continue
0.54% to 1.19%-0.13% to 0.54%
1.19% to 2.90%
Source: Moody’s Analytics forecast
Annualized % change in population, avg from 2013 to 2018
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Essential insight serving global financial markets
www.moodysanalytics.com
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www.experian.com/b2b
www.experian.com/b2b