Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Carter Malloy – Stephens Inc.
Carter Malloy – Stephens Inc.
On your scoring revenues, I'm trying to get a sense for exactly what it was in the quarter that, I know you talked a little around it, but more specifically what it was in the quarter that pushed it sequentially. I'm not really, with the weakness in the credit card industry and some of your competitors not doing that well, I just wanted to get more color around that.
Mark Greene
Two primary drivers. One, a lot of that is normal seasonality. The quarter just ended is typically stronger than the quarter before and second, within that we saw more than usual improvement in the mortgage space due to refi activity as interest rates fell below 5%. You know there was a big spike in refi activity at that time.
Carter Malloy – Stephens Inc.
Your expectations are that you'll at least hold the line there, assuming the economy.
Mark Greene
The last part on the mortgage refi, is your guess. We see strong indications that 5% is the magic threshold. When rates are above that, refi could fade away as it did for the last couple weeks of the quarter, so your guess as to where rates are going and that will tell you where the mortgage part of our business is going, although it's not a huge lever. Mortgage is between 10% and 15% of our scoring business. We're much more based in the credit card segment where there are ongoing challenges.
Carter Malloy – Stephens Inc.
So with card issuance down where it is now, there is a lag effect there. I would kind of expect it to have an effect on that segment going forward, right?
Mark Greene
I think that's right although there are puts and takes there. Clearly the diminished level of credit activity is negative. What's a modest positive in the card space is the movement by many banks to more frequently FICO scores to reflect closer to real time to help their consumers, so that's helping the scores as the [inaudible].
Carter Malloy – Stephens Inc.
And have you identified how big an opportunity you think it is, the direct consumer piece within the banking side?
Mark Greene
We have big hopes but I'd rather not comment on those hopes until we see some traction as the product rolls out. So a significant market opportunity, we need to get a couple of months of experience under our belt to see what kind of penetration we get in that opportunity.
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