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TREASURY DEPARTMENT MONTHLY LENDING AND INTERMEDIATION SNAPSHOT

Summary Analysis for October 2009

Summary Analysis

Economic Environment

Treasury’s eleventh survey of banks’ activities was conducted as economic and financial

conditions continued to improve, though from very low levels.  After declining for four straight

quarters, the economy began to grow again in the third quarter, with real GDP rising by 2.8

percent at an annual rate.   Early data on the fourth quarter suggest the recovery remains on

track.  Consumer spending rose in October and the housing sector showed additional signs of

improvement as home sales rose and the stock of homes for sale continued to shrink.  Just one

year ago, consumers were curtailing their spending and housing activity was declining sharply.  

Labor market conditions – though still weak – have also improved notably recently, but remain

below year‐earlier levels.  Job losses have moderated significantly and the November

employment decline was the smallest since the recession began in December 2007.  The

economy lost 4.8 million jobs over the year ending in November, and, though the

unemployment rate eased to 10 percent in November, it was up more than 3 percentage points

from November 2008.  Measures of financial risk have declined substantially, short‐term credit

spreads have narrowed, and the extreme volatility that characterized financial markets a year

ago has subsided.   The LIBOR‐OIS spread narrowed from a peak of 365 basis points on October

10, 2008 to around 14 basis points in October 2009.  The spread between Baa corporate bonds

and the 10‐year Treasury note was around 290 basis points in October 2009, nearly half its level

of a year earlier.  The VIX, which hit an all‐time high in October 2008, has returned to pre‐crisis

norms.  Private forecasters expect moderate economic growth going forward, although the

unemployment rate will likely remain elevated well into 2010.

October Survey Results

Beginning with this month’s analysis, year over year changes will be presented in addition to

month over month changes.   

Annual Results1

The total average outstanding balance of all loans increased 5 percent from October 2008 to

October 2009 and total originations decreased 9 percent from October 2008.

                                                           

1 Year over year changes will be calculated only for the original Top 21 CPP recipients and will exclude data from

Hartford Financial Services Group as data begin in June 2009.  Year over year increases may in part be reflective of

acquisition activity (namely Bank of America’s acquisition of Merrill Lynch, PNC Financial Services Group’s

acquisition of National City Corporation and Wells Fargo & Company’s acquisition of Wachovia Corporation) as

data are not merger adjusted.
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Compared to October 2008, the total outstanding mortgage balance increased 22 percent.  

Total mortgage originations increased 32 percent from October 2008 to October 2009.  

Refinancing originations drove the increase, rising 75 percent over the year, while new home

purchases rose 36 percent.  Low interest rates over the past year contributed to the dramatic

increases.  The total outstanding balance of home equity lines of credit (HELOCs) increased 9

percent from October 2008 to October 2009.  Respondents noted however that through 2009

demand for new HELOC lines and loans was below 2008 levels.  Accordingly, HELOC originations

declined 46 percent from October 2008 to October 2009.   Since October 2008, the total

outstanding balance of credit card loans decreased 8 percent and total originations of credit

card loans decreased 41 percent.   In other consumer lending products, the total outstanding

balance increased 15 percent from October 2008 to October 2009, and total originations

increased 7 percent.  

Respondents consistently indicated that demand in the commercial sector was muted during

the past year.  The total outstanding balance of commercial and industrial (C&I) loans fell 6

percent from October 2008 to October 2009, while renewals decreased 13 percent and new

commitments decreased 26 percent.  The total outstanding balance of commercial real estate

(CRE) loans increased 17 percent from October 2008 to October 2009.  Total renewals of CRE

loans increased 20 percent from October 2008 to October 2009, while new CRE commitments

decreased 64 percent.

Monthly Results

The overall outstanding loan balance (of all respondents) decreased 1 percent from September

to October at the top 22 participants in the Capital Purchase Program (CPP), while total

originations of new loans were flat from September to October.  In October, the 22 surveyed

institutions originated approximately $240 billion in new loans.  Total originations of loans by all

respondents rose in 2 categories (mortgages and C&I new commitments) and fell in 6 loan

categories (HELOCs, credit cards, other consumer lending products, C&I renewals of existing

accounts, commercial real estate (CRE) renewals of existing accounts and CRE new

commitments).  

New home purchases and refinancing originations rose in October.  Respondents reported that

favorable rates at the tail end of September and through October boosted application volumes.  

HELOCs saw a decrease in total originations, and institutions indicated that demand remains

below 2008 levels.  Outstanding credit card balances held by the surveyed institutions

decreased 1 percent in October, which is consistent with low consumer spending patterns and

a higher savings rate.  Other consumer lending declined in October as seasonal student loan

disbursements fell again.  Residual effects of the sunset of the government’s “Cash for

Clunkers” program accounted for a decline in originations of auto loans, which contributed to

the decline in other consumer originations. Banks reported that demand in the CRE market and

the C&I market continued to be well below normal levels, which was reflected in declines in C&I

renewals, CRE new commitments, and CRE renewals.  Small business loan originations,

however, increased in October.
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• The total average outstanding balance of all loans decreased 1 percent from September

to October. The median change in total average outstanding balances was a decrease of

1 percent.  Of the 22 respondents, 3 reported increases in total outstanding balances

from September to October (the largest increase was 7 percent) while 19 respondents

experienced decreases in total outstanding balances (the largest decrease was 3

percent).  Total originations of all loans were flat from September to October.   Across

all institutions, the median change in total originations was a decrease of 7 percent.  Of

the 22 respondents, 7 experienced increases in total originations from September to

October and 15 experienced decreases in total originations.  

• The total outstanding mortgage balance of all respondents fell 1 percent.  Total

mortgage originations by all respondents increased by 4 percent, driven by increases in

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

increase of 1 percent.  Refinancing mortgage originations rose 5 percent from

September to October.  New home purchase originations increased to a lesser extent,

rising 2 percent from September to October.  Respondents reported that favorable rates

at the end of September and throughout October increased demand for mortgages.   

• The total outstanding balance of HELOCs fell by 1 percent from September to October.  

Total HELOC originations fell 3 percent in October.  The median change in originations

was a decrease of 8 percent from September to October.  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, 4 experienced increases in originations and

12 experienced declines in originations.  Most respondents noted that demand

remained below 2008 levels.   

• The total credit card outstanding balance of all respondents fell 1 percent in October.  

Of the 14 respondents active in the credit card business, 6 experienced increases in

outstanding balances, 7 experienced decreases in outstanding balances, and 1

experienced no change.  Total credit card originations by all respondents decreased by 5

percent in October, though the median change in credit card originations was an

increase of 2 percent.   

• The total outstanding balance of other consumer lending products was flat in October.  

Of the 19 institutions active in other consumer lending, 6 institutions experienced

increases in outstanding balances, while 13 institutions experienced decreases in

outstanding balances.  Total other consumer loan originations decreased by 8 percent

from September to October.  The median percentage change in other consumer loan

originations was a decrease of 20 percent.  Of the 18 respondents making other

consumer loan originations, 4 experienced increases in originations and 14 experienced

decreases in originations.  The fall in seasonal student loan disbursements contributed

to the decline in other consumer loan originations.  Residual effects of the sunset of the
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government’s “Cash for Clunkers” program factored into the decline in originations of

auto loans, which also drove the decline in other consumer loan originations.   

• The total outstanding balance of C&I loans2 fell 1 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 11 percent in October, and the

median change in renewals was a decrease of 16 percent.  Total new C&I commitments

increased 21 percent in October, with 10 banks reporting increases in new

commitments, 10 banks reporting decreases, and 1 experiencing no change.  The

median change in new commitments was a decrease of 2 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 and forecasters expect weakness in the CRE market to continue.  The

outstanding balance of CRE loans of all respondents decreased by 1 percent in October,

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

Total renewals of existing CRE accounts decreased 7 percent from September to

October.  The median change in CRE renewals from September to October was a

decrease of 26 percent.  Total new CRE commitments decreased 7 percent from

September to October, and the median change in new commitments was a decrease of

16 percent.    

• In October, total small business outstanding balances3 were flat, and the median change

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

business originations increased by 7 percent.  The median change in small business

originations was a decrease of 8 percent.  

2 Bank of America restated their September 2009 C&I balance from approximately $235 billion to approximately

$216 billion. 3 Small business loan data was first reported in April 2009 data and are not included in the year over year

reporting.
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• The chart on page 7 (“Change in Loan Originations, October 2009 vs. September 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 7 percent in from September to October; originations of all

types fell by 16 percent for the institution at the 25th percentile, and originations of all

types rose by 7 percent for the institution at the 75th percentile.  There was considerable

variability in lending activity across most sectors, particularly in the commercial sector

(C&I and CRE).
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Name 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 Small Busin

American Express N/A N/A $1,187 N/A N/A N/A N/A N/A 

Bank ofAmerica $29,008 $1,064 $1,402 $3,821 $13,788 $4,696 $2,947 $144 $1

Bank ofNew York Mellon $60 $3 N/A $0 $218 $1 $19 $17 

BB&T $1,813 $44 $185 $271 $515 $1,138 $1,410 $356 

Capital One $89 $15 $244 $367 $189 $302 $41 $261 

CIT N/A N/A N/A $0 $2,589 $373 $0 $0 

Citigroup $3,297 $93 $5,672 $822 $880 $1,171 $407 $158 Comerica $30 $18 $23 $37 $2,032 $333 $225 $21 

Fifth Third $1,668 $94 $125 $304 $1,750 $830 $443 $153 Goldman Sachs $33 $0 $0 $164 $319 $917 $0 $400 Hartford $0 $0 N/A $0 $1 $0 $0 $0 

JPMorgan Chase $10,980 $159 $2,995 $3,089 $13,897 $16,977 $410 $320 

KeyCorp $135 $71 $0 $34 $778 $366 $457 $56 

Marshall & Ilsley $192 $61 $5 $43 $151 $98 $51 $88 

Morgan Stanley $10 $0 N/A $336 $2,084 $10,265 $0 $0 

Northern Trust $89 $58 N/A $61 $548 $414 $8 $48 

PNC $824 $301 $176 $265 $3,587 $1,903 $772 $182 

Regions $619 $87 N/A $123 $1,502 $681 $1,612 $194 

State Street N/A N/A N/A N/A $589 $278 $0 $0 

SunTrust $2,828 $100 $4 $381 $982 $945 $186 $202 U.S. Bancorp $3,794 $358 $610 $791 $4,866 $2,038 $979 $559 

Wells Fargo $28,001 $529 $1,313 $2,006 $9,472 $5,393 $2,441 $1,422 $2

Total (All Institutions) $83,470 $3,056 $13,941 $12,915 $60,736 $49,120 $12,407 $4,581 $8

Monthly change in Total (All Institutions) 3 4% ‐3% ‐5% ‐8% ‐11% 21% ‐7% ‐7% 

Annual change in Total (All Institutions) 4 32% ‐46% ‐41% 7% ‐13% ‐26% 20% ‐64% 

First MortgagesHELOCUS Card (Managed)

C & I

CRESmall Business

N/A

Commercial real estate

Denotes 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 BusinessOriginations" column.3 Monthly percentage changes are calculated versus September 2009 figures.3 Annual percentage changes are calculated versusOctober 2008 figures. Annual changes will be calculated only for the original Top 21 CPP recipients and will exclude data from Hartford Financial ServicesGrou

Loan Originations, October 2009

($ Millions)

Loan Category Key

NOTE: Reliance on internal reporting means that aggregation by loan category varies for each

reporting bank. Because ofthe 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 estate

Home equity lines of creditCommercial and industrial
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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

Sma

Orig

75th Percentile 10% ‐3% 13% ‐4% 4% 29% 5% 14% 25th Percentile ‐3% ‐18% ‐15% ‐34% ‐28% ‐18% ‐45% ‐45% 

Median 1% ‐8% 2% ‐20% ‐16% ‐2% ‐26% ‐16% 

Total (Across All Institutions) 4% ‐3% ‐5% ‐8% ‐11% 21% ‐7% ‐7% 

‐50%‐40%‐30%‐20%‐10%

0%

10%20%30%40%

Change in Loan Originations

October 2009 vs. September 2009
October 2008 October 2009 Change

First Mortgage $719.0 $874.8 21.7%

HELOC $507.9 $553.9 9.1%

US Card (Managed) $645.6 $596.3 ‐7.6%

Other Consumer Lending $415.2 $476.3 14.7%

C & I $1,169.5 $1,094.7 ‐6.4%

CRE $446.9 $521.1 16.6%

Small Business1 N/A $8.4 ‐‐‐

Total Outstanding Loan Balances $3,904.1 $4,117.1 5.5%

Total Outstanding Loan Balances, Top 21 CPP Participants

October 2008 vs. October 2009

$ Billions

October 2008 October 2009 Change

First Mortgage $63.3 $83.5 31.8%

HELOC (Lines and Increases) $5.6 $3.1 ‐45.6%

US Card (Managed): Initial Line Amount $23.6 $13.9 ‐41.0%

Other Consumer Lending $12.1 $12.9 6.8%

C & I: Renewal of Existing Accounts $70.2 $60.7 ‐13.4%

C & I: New Commitments $66.8 $49.1 ‐26.4%

CRE: Renewal of Existing Accounts $10.3 $12.4 20.1%

CRE: New Commitments $12.6 $4.6 ‐63.7%

Small Business1 N/A $8.4 ‐‐‐

Total Originations $264.5 $240.2 ‐9.2%

First Mortgages

HELOC

US Card (Managed)

C & I

CRE

Small Business

Total Loan Originations, Top 21 CPP Participants

October 2008 vs. October 2009

$ Billions

Loans to small businesses

Loan Category Key

Loans secured by first liens on residential real estate

Home equity lines of credit

US credit cards (managed)

Commercial and industrial

Commercial real estate

Notes:

All totals exclude data from Hartford Financial Services, which began reporting in June 2009.

Because ofthe differencesin loan category definitions, comparisons offigures acrossfirmsmay be

imperfect.  

1 These loans are already accounted for in either consumer lending, commercial lending, or a combination

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$2,288 $2,501

$1,616 $1,616

$3,904 $4,117

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

$ Billions

Average Outstanding LoanBalance, Top 21 CPP Participants

October 2008 ‐October 2009

Total Consumer Loans Total Commercial Loans Total Loans

Total consumer loans are defined as first mortgages, home equity lines of credit, credit card loans, and other consumer loans.  Total commercial loans are defined as commercial & industrial loans and commercial real estate loans.  

Total loans are defined as the sum of total consumer loans and total commercial loans.  All totals exclude data from Hartford Financial Services, which began reporting in June 2009.

Data are not merger adjusted.  Large increases  from December 2008 to January 2009 may in part be reflective of acquisitions (Bank of America's acquisition of Merrill Lynch, PNC Financial Services Group's acquisition of National City

Corporation, and Wells Fargo & Company's acquisition of Wachovia Corporation).  

$105

$113

$160

$127

$265

$240

$0

$50

$100

$150

$200

$250

$300

$350

$ Billions

Total Originations, Top 21 CPP Participants

October 2008 ‐October 2009

Total Consumer Loans Total Commercial Loans Total Loans

Total consumer loans are defined as first mortgages, home equity lines of credit, credit card loans, and other consumer loans.  Total commercial loans are defined as commercial & industrial loans and commercial real estate loans.  

Total loans are defined as the sum of total consumer loans and total commercial loans.

All totals exclude data from Hartford Financial Services, which began reporting in June 2009.

Data are not merger adjusted.  Large increases  from December 2008 to January 2009 may in part be reflective of acquisitions (Bank of America's acquisition of Merrill Lynch, PNC Financial Services Group's acquisition of National City

Corporation, and Wells Fargo & Company's acquisition of Wachovia Corporation).  

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