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GreenSky, Amex to roll out partnership in five cities

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Quarterly revenue at GreenSky rose by 22%, but the company’s profits continue to be hurt by the sagging market for solar-energy loans.

The Atlanta fintech reported net income of $22.8 million during the fourth quarter, down from $39.9 million in the same period a year earlier. The company also reaffirmed its financial guidance for 2019, which calls for revenue growth of between 30% and 38%.

GreenSky’s steady outlook for the coming year seemed to reassure investors, many of whom sold off shares in November after the company sharply reduced its earnings estimate. Shares in GreenSky were up 8% to $12.30 in midday trading on Tuesday.

GreenSky also said Tuesday that it plans to plans to launch a pilot program with American Express in Atlanta, Chicago, Dallas, Los Angeles and Tampa within the next 60 days. The program will offer installment loans for home improvements directly to consumers.

“Additional future growth lies in entering new industry verticals, including specialty retail and e-commerce, each with a focus on large-ticket purchases,” GreenSky CEO David Zalik said Tuesday during the company’s earnings call.

GreenSky offers point-of-sale loans to consumers through partnerships with thousands of merchants, including medical firms and home improvement contractors. In the latter case, the company’s installment loans may appeal to consumers who are looking for a faster and easier approval process than is available through home equity loans.

GreenSky’s bank partners, which take the loans onto their books, include Regions Financial, Fifth Third Bancorp, SunTrust Banks and Synovus Financial.

During the fourth quarter, originations of loans for solar panels accounted for less than 4% of GreenSky’s $1.28 billion in loan volume, down from 12% a year earlier. That decline has been biting into GreenSky’s margins because transaction fees on the company’s solar loans are typically higher than they are in other lending segments.

Demand for solar energy in the U.S. has been hurt by President Trump’s decision to impose a 30% tariff on imported solar cells.

GreenSky has been taking steps in recent months to diversify its business further. In January the company announced the launch of a revolving credit line that is seen as a good fit for elective medical providers that rely heavily on repeat business.

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Point-of-sale Consumer lending Home equity loans Marketplace lending Regions Bank Synovus Financial SunTrust Fifth Third
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