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TREASURY DEPARTMENT MONTHLY LENDING AND INTERMEDIATION 

SNAPSHOT 

Summary Analysis for August 2009 

Summary Analysis 

Economic Environment

Treasury’s ninth survey of banks’ activities was conducted as the economy showed more signs 

that the pace of contraction was easing. Job losses continued to slow in August, with the average 

monthly decline in payroll employment during July and August about half that recorded in the 

second quarter. The unemployment rate moved higher, however, and at 9.7 percent was more 

than four percentage points above what economists believe to be full employment. The housing 

sector showed further signs of improvement, with housing starts, building permits and new home 

sales all rising in August. Even so, the August level of both sales and starts remained near 

historical lows. Consumer spending strengthened in August, boosted in large part by a surge in 

auto sales related to the Cash for Clunkers program, but has not yet returned to the level reached 

before the financial crisis intensified last fall. Financial conditions continued to show solid 

improvement. Short-term credit spreads narrowed further and the VIX continued to ease, 

moving closer to pre-crisis norms. Despite recent modest gains, the economy remains weak and 

forecasters continue to see the unemployment rate rising to 10 percent by the end of the year. 

August Survey Results

The overall outstanding loan balance (of all respondents) fell 1 percent from July to August at 

the top 22 participants in the Capital Purchase Program (CPP), due mainly to decreased demand 

from borrowers, payment of outstanding debt, charge-offs by banks, and some seasonal patterns. 

Total origination of new loans at the 22 surveyed institutions decreased 17 percent from July to 

August. In August, the 22 surveyed institutions originated approximately $235 billion in new 

loans. Total originations of loans by all respondents rose in 1 category (other consumer lending 

products) and fell in 7 loan categories (mortgages, home equity lines of credit (HELOCs), credit 

cards, commercial and industrial (C&I) renewals and new commitments, and commercial real 

estate (CRE) renewals and new commitments). 

New home purchases and refinancing originations fell in August. Respondents reported that 

both the number of fundings and the number of mortgage refinancing applications declined in 

August as interest rates were higher than in previous months, providing less incentive for 

homeowners to refinance. HELOCs saw a decrease in total originations, and institutions 

indicated that demand is below 2008 levels. Outstanding credit card balances held by the 

surveyed institutions were flat in August, indicating that consumers are spending conservatively 

and paying down existing debt. Other consumer lending was the only consumer category in 

which originations increased in August, as the onset of the academic year spurred student loan 

disbursements and the “Cash for Clunkers” program increased demand for auto loans. Banks 

again reported that demand in both the commercial real estate (CRE) market and the C&I market 

is well below normal levels 
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• The total average outstanding balance of all loans decreased 1 percent from July to 

August. The median change in total average outstanding balances was a decrease of 1 

percent. Of the 22 respondents, 4 reported increases in total outstanding balances from 

July to August (the largest increase was 4 percent) while 18 respondents experienced 

decreases in total outstanding balances (the largest decrease was 6 percent). Total 

originations of all loans decreased by 17 percent from July to August. Across all 

institutions, the median change in total originations was a decrease of 17 percent. Of the 

22 respondents, 20 experienced decreases in total originations from July to August, 1 

experienced an increase in total originations, and 1 experienced no change in total 

originations.

• The total outstanding mortgage balance of all respondents fell 2 percent. Total mortgage 

originations by all respondents decreased by 22 percent, driven largely by decreases in 

refinancing originations. The median change in total mortgage originations was a 

decrease of 26 percent. There was a decline in demand for refinancing mortgages as rates 

were higher in August than in previous months, thereby decreasing the incentive to 

refinance. Refinancing mortgage originations fell 32 percent from July to August, which 

is the largest decrease in refinancing originations since the beginning of this survey. New 

home purchase originations declined to a lesser extent, decreasing 5 percent from July to 

August. 

• The total outstanding balance of HELOCs fell by 1 percent from July to August. Total 

HELOC originations decreased by 11 percent in August. The median change in 

originations was a decrease of 14 percent from July to August. Respondents noted that 

the pool of qualified HELOC borrowers has declined as home values have depreciated. 

Of the 16 entities active in the HELOC market, 1 experienced an increase in originations 

and 15 experienced declines in originations. Most respondents noted that demand was 

below 2008 levels. 

• The total credit card outstanding balance of all respondents was flat in August, indicating 

that consumers are spending conservatively and paying down existing debt. Job losses, 

generally low levels of consumer spending, a higher savings rates, and a general 

reluctance to take on more debt contributed to stagnant credit card balances. Of the 14 

respondents active in the credit card business, 9 experienced increases in outstanding 

balances, 4 experienced decreases in outstanding balances, and 1 experienced no change 

in its outstanding balance. Origination activity was split; 3 of the respondents making 

originations experienced increases, and 10 of the respondents making originations 

experienced decreases. Total credit card originations by all respondents decreased by 5 

percent in August. The median change in credit card originations was a decrease of 9 

percent. 

• The total outstanding balance of other consumer lending products increased 1 percent in 

August. Of the 19 institutions active in other consumer lending, 10 institutions 

experienced decreases in outstanding balances, while 9 institutions experienced increases 

in outstanding balances. Total other consumer loan originations increased by 32 percent 

from July to August, as the onset of the academic year accounted for increased student 
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loan disbursements. Increased demand for auto loans, due largely to the “Cash for 

Clunkers” program, also fueled growth in the other consumer lending sector. The median 

percentage change in other consumer loan originations was an increase of 38 percent. Of 

the 17 respondents making other consumer loan originations, 12 experienced increases in 

originations and 5 experienced decreases in originations. 

• The total outstanding balance of C&I loans fell 2 percent; the median change in average 

outstanding C&I balances was a decrease of 2 percent. Economic uncertainty has caused 

businesses to downsize, cut costs, reduce inventories, and delay capital expenditures. 

Lower overall merger and acquisition activity further contributed to the decreased 

demand for C&I credit. Nearly all respondents indicated that, throughout the recession, 

demand in C&I lending has remained well below pre-recession levels. Companies 

continued to focus on preserving liquidity, strengthening their balance sheets, building 

cash reserves and paying down existing debt rather than taking on new debt. 

Total renewals of existing C&I accounts decreased 21 percent in August, and the median 

change in renewals was a decrease of 23 percent. Total new C&I commitments 

decreased 16 percent in August, with 5 banks reporting increases in new commitments 

and 15 banks reporting decreases. The median change in new commitments was a 

decrease of 22 percent. 

• Demand for new CRE loans remains low due to the lack of new construction activity. 

Real estate developers are reluctant to begin new projects or purchase existing projects 

under current poor economic conditions, which include a surplus of office space as firms 

downsize and vacancies rise. Finally, nearly all respondents indicated that they are 

actively reducing their exposure to CRE loans, as banks expect CRE loan delinquencies 

to persist. The outstanding balance of CRE loans of all respondents was flat in August, 

and the median change in outstanding balances was a decrease of 1 percent. 

Total renewals of existing CRE accounts decreased 16 percent from July to August. The 

median change in CRE renewals from July to August was a decrease of 9 percent. Total 

new CRE commitments decreased 1 percent from July to August, and the median change 

in new commitments was a decrease of 16 percent. Of the 16 institutions that made new 

CRE commitments, 4 experienced increases in new commitments and 12 experienced 

decreases in new commitments. 

• In August, total small business outstanding balances decreased by 1 percent, and the 

median change in small business outstanding balances was a decrease of 1 percent. Total 

small business originations decreased by 8 percent. The median change in small business 

originations was a decrease of 7 percent. As most small business originations are 

included in either C&I or CRE originations (renewals plus new commitments), this trend 

is in line with overall declining trends in C&I and CRE originations in August. 

• Equity underwriting was down in August compared to July, but respondents indicated 

that in general, the market exhibited overall stability in August. Debt underwriting 

decreased from July, but respondents reported that markets continued to be favorable to 

new debt issuance. 
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• The chart on page 6 (“Change in Loan Originations, August 2009 vs. July 2009”) 

illustrates the range of changes in loan originations among the 22 institutions. The bar on 

the far right, for example, indicates that the median change of loan originations of all 

types was a decrease of 17 percent in from July to August; originations of all types fell by 

22 percent for the institution at the 25th percentile, and originations of all types fell by 14 

percent for the institution at the 75th percentile. There was considerable variability in 

lending activity by category across banks, especially in other consumer lending products, 

C&I new commitments, and CRE new commitments.
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Name First Mortgage HELO C (Lines and Increases)

US Card 

(Managed): 

Initial Line 

Amount

O ther 

Consumer 

Lending

C & I: 

Renewal of 

Existing 

Accounts

C & I: New 

Commitments

CRE: Renewal 

of Existing 

Accounts

CRE: New 

Commitments

Small 

Business

American Express N/A N/A $1,379 N/A N/A N/A N/A N/A 

Bank of America $30,578 $814 $1,577 $1,910 $12,973 $6,870 $1,871 $526 $1,Bank of New York Mellon $55 $3 N/A $0 $348 $18 $20 $0 

BB&T $2,063 $57 $180 $400 $474 $820 $1,319 $297 $

Capital O ne $112 $23 $389 $617 $163 $226 $39 $78 

CIT N/A N/A N/A $0 $2,398 $293 $0 $0 

Citigroup $4,845 $175 $6,359 $1,804 $736 $124 $192 $403 $

Comerica $24 $11 $18 $33 $2,734 $619 $374 $13 $

Fifth Third $1,518 $101 $107 $499 $1,602 $780 $417 $76 $

Goldman Sachs $55 $0 $0 $68 $172 $325 $0 $0 

Hartford $0 $0 N/A $0 $0 $0 $3 $0 

JPMorgan Chase $12,319 $156 $3,058 $4,069 $13,105 $10,265 $370 $459 $

KeyCorp $137 $78 $0 $131 $1,115 $516 $613 $61 

Marshall & Ilsley $194 $68 $6 $88 $109 $85 $57 $71 

Morgan Stanley $12 $0 N/A $302 $343 $1,300 $0 $0 $

Northern Trust $93 $47 N/A $66 $562 $404 $9 $33 

PNC $1,138 $403 $205 $734 $3,451 $1,987 $605 $235 $

Regions $575 $102 N/A $222 $1,514 $787 $1,586 $365 $State Street N/A N/A N/A N/A $692 $75 $0 $0 SunTrust $3,636 $121 $5 $576 $1,266 $656 $283 $132 U.S. Bancorp $4,966 $460 $589 $1,209 $3,842 $2,270 $1,093 $468 $2,

Wells Fargo $28,727 $557 $1,358 $3,608 $10,966 $5,999 $2,537 $1,282 $2,

Total (All Institutions) $91,046 $3,176 $15,230 $16,336 $58,565 $34,417 $11,388 $4,499 $10,

Change in Total (All Institutions) 3 -22% -11% -5% 32% -21% -16% -16% -1% -

First MortgagesHELO CUS Card (Managed)C & ICRESmall Business

N/A 

Loan Originations, August 2009

($ Millions)

Loan Category Key

NO TE: Reliance on internal reporting means that aggregation by loan category varies for each reporting bank. Because of the differences in loan category definitions, comparisons of origination levels across firms may be imperfect. 

US credit cards (managed)Loans secured by first liens on residential real estateHome equity lines of creditCommercial and industrial Commercial real estateDenotes recipient is not active in this category Loans to small businesses

1 These loans are already accounted for in either consumer lending, commercial lending, or a combination of both.2 Total Originations does not include the "Small Business Originations" column.3 Percentage changes are calculated versus July 2009 figures.
First Mortgage HELOC (Lines and Increases)

US Card

(Managed):

Initial Line

Amount

Other

Consumer

Lending

C & I: Renewal

of Existing

Accounts

C & I: New

Commitments

CRE: Renewal

of Existing

Accounts

CRE: New

Commitments

Smal

Orig

75th Percentile ‐15% ‐7% 0% 65% ‐12% ‐7% 0% 5% 25th Percentile ‐33% ‐25% ‐15% ‐4% ‐35% ‐43% ‐28% ‐42% 

Median ‐26% ‐14% ‐9% 38% ‐23% ‐22% ‐9% ‐16% 

Total (Across All Institutions) ‐22% ‐11% ‐5% 32% ‐21% ‐16% ‐16% ‐1% 

‐60%‐40%‐20%

0%

20%40%60%80%

Change in Loan Originations

August 2009 vs. July 2009

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