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TREASURY DEPARTMENT MONTHLY LENDING AND INTERMEDIATION 

SNAPSHOT 

Summary Analysis for May 2009 

Summary Analysis 

Economic Environment

The economic environment against which banks reported their lending and intermediation 

activities deteriorated further May; the economy continued to contract and unemployment 

continued to rise. The unemployment rate reached 9.5 percent June, the highest level since 

August 1983. Job losses increased in June, though during the second quarter job losses averaged 

less than 450,000 per month, down from nearly 700,000 in the first quarter of 2009. The 

housing market remains weak and while single-family housing starts increased for the fourth 

straight month in May, that level was still down nearly 80 percent from the peak in 2006. 

Consumer optimism in June moved higher according to the University of Michigan survey, 

although increase was small and preliminary data showed optimism retreating in early July. 

Financial market strains continued to ease in May and June as reflected by shrinking short-term 

credit spreads and improvements in the securitization market. In sum, the overall economy 

remains very weak despite modest improvement in a number of indicators. That weakness is 

feeding into the financial system and credit markets and weakening overall demand for credit by 

consumers and businesses. 

May Survey Results

The overall outstanding loan balance (of all respondents) was flat from April to May at the top 

21 participants in the Capital Purchase Program (CPP). Total origination of new loans at the 21 

surveyed institutions increased 1 percent from April to May. In May, the 21 surveyed 

institutions originated approximately $277 billion in new loans. Total originations of loans by 

all respondents rose in four categories, specifically: mortgages, credit card loans, commercial 

real estate renewals and commercial real estate new commitments. Total originations fell in the 

following three loan categories: home equity lines of credit, other consumer lending products, 

and commercial and industrial renewals, and were flat in one loan category, commercial and 

industrial new commitments. Attractive rates continued to drive the growth in mortgages, a 

trend noted in prior surveys. However, low demand for loans from borrowers contributed to 

decreased volume in originations in home equity lines of credit (HELOC), other consumer 

lending products, and commercial and industrial (C&I) loans. 

Many respondents reported high mortgage application volume through the month of May, but 

indicated that pipelines decreased as rates began to rise toward the end of May. Home equity 

lines of credit saw a decrease in total originations. Many homeowners are electing to refinance 

their first lien mortgages and not to take on any additional debt via home equity lines of credit. 

Declining home values also contributed to lower home equity demand. Households are facing 

growing pressures from a weakening labor market and further declines in their wealth. In this 

context, overall consumer spending fell and outstanding credit card balances held by the 

surveyed institutions continued to fall, down 1 percent in May. Total credit card originations by 
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all of the respondents, however, saw an increase in May. Other consumer lending saw mixed 

growth in May; seasonal increases in student lending were generally offset by decreased auto 

lending. 

Banks again reported in May that demand for credit in both the commercial real estate (CRE) 

market and the C&I market is well below normal levels. As firms continue to downsize, cut 

costs, and reduce inventories, banks predict that lower demand will persist through the end of the 

second quarter of 2009. 

• The total average outstanding balance of all loans was flat from April to May. The 

median change in total average outstanding balances was also flat. Of the 21 

respondents, 5 reported increases in total outstanding balances from April to May (the 

largest increase was 12 percent), while 16 respondents experienced decreases in total 

outstanding balances (the largest decrease was 2 percent). 

Total originations of all loans increased by 1 percent from April to May. Across all 

institutions, the median change in total originations was an increase of 3 percent. Of the 

21 respondents, two thirds experienced increases in total originations from April to May, 

and one third experienced decreases in total originations.

• In general, mortgage lending increased April to May. The total outstanding mortgage 

balance was flat, while total mortgage originations (by all respondents) increased at 15 

banks and decreased at 3 banks. Total mortgage originations by all respondents 

increased by 7 percent. The median change in total mortgage originations was an 

increase of 10 percent. All respondents indicated that low interest rates were sustaining 

high levels in mortgage refinancing and new home purchases, but that the rise in rates 

during the end of May contributed to lower pipelines for the coming months. Pipelines 

remained well above planned levels. The median percentage change in mortgage 

refinancing was an increase of 8 percent between April and May. For new home 

purchases, the median percentage change from April to May was an increase of 13 

percent. Banks noted that increases in new home purchases are typical in May as the 

summer is the peak season for home buyers. 

• Home equity lines of credit (HELOCs) decreased in volume, as respondents indicated 

that customers elected to refinance first lien mortgages instead of taking on additional 

debt via home equity loans. Depreciating home values and overall economic conditions 

also contributed to lower levels of lending in May. Banks noted that application volumes 

were at lower than expected levels. A number of respondents reported that they 

experienced run-offs in HELOCs during May, which contributed to decreases in 

outstanding HELOC balances. The total outstanding balance of HELOC loans (of all 

respondents) decreased 1 percent in May. Total HELOC originations by all respondents 

decreased by 12 percent. The median change in originations was a decrease of 14 percent 

from April to May. Only 2 of the 16 entities active in the HELOC market experienced 

increases in originations; 14 experienced declines in originations. 
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• The total credit card outstanding balance of all respondents decreased by 1 percent in 

May, as many customers focused on paying down debt. The economic slowdown and 

generally lower levels of consumer spending contributed to decreases in outstanding 

credit card lending balances. Of the 13 respondents actively engaged in the credit card 

business, 7 experienced increases in outstanding balances, while 6 experienced decreases. 

Similarly, origination activity was split across institutions: 7 of the respondents 

experienced increases in originations, while 6 of the respondents experienced decreases 

in originations. Total credit card originations by all respondents, however, increased by 

13 percent in May. The uptick in total originations was largely driven by one 

institution’s increase in originations. The median change in credit card originations was 

an increase of 2 percent. 

• The total outstanding balance of other consumer lending products, including auto, 

student, and other consumer loans, decreased by 1 percent in May. Fourteen institutions 

experienced decreases in outstanding balances, while 4 institutions experience increases 

in outstanding balances. Total loan originations decreased by 4 percent from April to 

May. The median percentage change in consumer loan originations was a decrease of 8 

percent. The changes in originations at the institution level, however, were split; 9 of the 

18 respondents active in other consumer lending experienced increases in originations 

while the same number experienced decreases in originations. Some institutions noted 

that auto demand picked up in May (despite being below normal levels), while others 

indicated that auto loan demand was down. Nearly all respondents indicated that student 

loan originations picked up due to seasonality as funding for the summer term occurred in 

May. 

• The total outstanding balance of C&I loans was flat: the median change in average 

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

borrowers 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, and paying 

down existing debt rather than taking on new debt. Despite these conditions, some 

respondents indicated that the middle market sector showed signs of improvement in 

May. Additionally some respondents noted that as market pricing has dropped, some 

firms in stronger capital positions have shown signs of interest in potential acquisitions, 

which may lead to an increase in the demand for acquisition financing demand. 

Total renewals of existing C&I accounts decreased by 9 percent in May, and the median 

change in renewals was a decrease of 11 percent. The decrease in renewals can be 

attributed to seasonal factors. Many business clients submit annual audit results in April, 

which contributed to elevated levels in April and a drop in renewals in May. Total new 

C&I commitments were flat in May, with 10 banks reporting increases in new 

commitments and 10 banks reporting decreases. The median change in new 

commitments was an increase of 5 percent. 
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• In commercial real estate (CRE), new loan demand remains low due to the lack of new 

construction activity. The survey results continue to convey similar sentiment reported in 

the past several months, notably that real estate developers are reluctant to begin new 

projects or purchase existing projects under the current deteriorating economic 

conditions, which include a rising supply 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 increase over 

the coming year. The outstanding balance of CRE loans of all respondents decreased by 

1 percent, and the median change in outstanding balances was flat. 

Both total renewals of existing accounts and total new commitments in CRE increased 

from April to May. The changes in renewals and new commitments on the institution 

level, however, were mixed; 10 of the 17 institutions active in the CRE renewals reported 

increases in renewals, while 7 reported decreases; 9 of the 16 institutions actively making 

new commitments market reported increases in new commitments, while 7 reported 

decreases in new commitments. The median change in renewals of existing accounts was 

an increase of 2 percent, and the median change in new commitments was an increase of 

11 percent. 

• The May survey collected the second month of memoranda information on small 

business lending. In May, total small business outstanding balances increased by 1 

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

small business outstanding balances was a decrease of 1 percent and the median change 

in small business originations was an increase of 3 percent. 

• Equity underwriting had a particularly strong month, with 10 of the 11 entities active in 

the equity underwriting market posting increases, and only 1 institution posting a 

decrease. The general increases indicate stability returning to the equity underwriting 

market. Debt issuances also increased modestly, as improving market conditions 

supported attractive debt pricing for issuers. 

• The chart on page 6 (“Growth in Loan Originations, May 2009 vs. April 2009”) 

illustrates the range of changes in lending activity among the 21 institutions. The bar on 

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

types was an increase of 3 percent in from April to May; originations of all types fell by 2 

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 banks, especially within C&I new commitments, CRE renewals, 

and CRE new commitments. 
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 Business1 

American Express N/A N/A $979 N/A N/A N/A N/A N/A N/A 

Bank of America $35,923 $1,239 $1,294 $2,134 $15,334 $10,162 $2,459 $523 $1,27BB&T $3,114 $66 $204 $348 $595 $1,193 $1,144 $429 $1,07

Bank of New York Mellon $160 $3 N/A $4 $54 $50 $196 $21 N/A 

Capital One $197 $29 $521 $424 $340 $334 $100 $83 $9

CIT N/A N/A N/A $0 $2,683 $746 $0 $0 $Citigroup $9,701 $147 $8,331 $1,237 $593 $444 $73 $102 $13

Comerica $40 $10 $24 $74 $2,108 $287 $432 $95 $33

Fifth Third $2,493 $105 $185 $309 $1,486 $993 $393 $113 $38

Goldman Sachs $19 $0 $0 $102 $250 $640 $13 $40 $

JPMorgan Chase $13,777 $183 $3,378 $2,183 $17,069 $9,972 $419 $531 $75

KeyCorp $159 $114 $0 $25 $802 $429 $593 $31 $3

Marshall & Ilsley $420 $65 $6 $95 $219 $124 $56 $33 $3

Morgan Stanley $81 $0 N/A $444 $1,320 $2,066 $0 $0 $3

Northern Trust $99 $74 N/A $153 $630 $490 $3 $66 $3

PNC $2,166 $432 $234 $203 $3,070 $1,740 $661 $266 $37

Regions $1,037 $100 N/A $98 $1,352 $1,189 $1,590 $327 $62

State Street N/A N/A N/A N/A $672 $396 $0 $0 N/A 

SunTrust $5,471 $144 $10 $345 $1,061 $1,147 $340 $251 $7

U.S. Bancorp $5,102 $499 $851 $751 $3,513 $2,820 $874 $327 $50

Wells Fargo $42,091 $576 $1,221 $1,721 $10,292 $6,865 $2,592 $2,325 $2,37

Total (All Institutions) $122,049 $3,787 $17,238 $10,648 $63,444 $42,087 $11,938 $5,562 $8,12

Change in Total (All Institutions) 3 7% -12% 13% -4% -9% 0% 3% 11% 7% 

First MortgagesHELOCUS Card (Managed)C & ICRESmall Business

N/A 

Loan Originations, May 2009

($ Millions)

Loan Category Key

NOTE: 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 Small Business Originations.3 Percentage changes are calculated versus April 2009 figures.

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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

Smal

Orig

25th Percentile 2% ‐20% ‐7% ‐7% ‐22% ‐11% ‐36% ‐32% ‐

75th Percentile 18% ‐7% 26% 19% 3% 49% 20% 30% 

Median 10% ‐14% 2% ‐0.2% ‐11% 5% 2% 11% 

Total (Across All Institutions) 7% ‐12% 13% ‐4% ‐9% 0% 3% 11% 

‐50%‐40%‐30%‐20%‐10%

0%

10%20%30%40%50%60%

Growth in Loan Originations

May 2009 vs. April 2009

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