SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE

Fed Data Points To An Overall Improved Lending Environment

Yesterday afternoon the quarterly Federal Reserve Senior Loan Officer Survey was released. Across all asset classes banks are now more willing to make loans. This is evident both in the net percentage of banks easing/relaxing standards and in the net percentage of banks increasing/reducing spreads on loans. 

 

Borrowers are also emerging from the woodwork as demand for all loan types, save one, rose in the most recent survey. The sole exception being residential mortgage, where banks reported that demand fell yet again this quarter. Roughly 75% of the bankers surveyed predicted that 2H11 mortgage origination volume would be flat with volume seen in 1H11. The remaining 25% was split between expecting it to be up or down.

 

C&I Loans Continue to Move in the Right Direction 

All trends are positive in C&I lending. More banks reported strengthening C&I loan demand again in 3Q.  Lending standards are easing and spreads are contracting in C&I loans.  

 

SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE - C I TIGHTENING

 

SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE - C I SPREADS

 

SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE - C I DEMAND

 

CRE Loans Also Now Moving in the Right Direction

CRE loan demand rose again in the 3Q survey coming on the heels of last quarter's strongest advance in years.  Meanwhile, lending standards eased again this quarter - the second month in a row.

 

SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE - CRE TIGHTENING

 

SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE - CRE demand 

 

Residential Real Estate - Standards Finally Ease (Slightly) but Demand Continues to Fall

The residential real estate segment finally caught a break this quarter as banks reported a net easing of standards in 3Q11 for both prime and nontraditional loans. That said, the net easing was minimal with just 1.9% (net) of respondents easing standards on prime residential real estate loans and 4.2% (net) easing standards on nontraditional residential loans. 

 

Also of interest is the fact that in spite of the modest easing of standards, demand continued to decline. Bankers reported lower demand (-1.9%) for prime residential real estate loans and home equity lines of credit. Nontraditional loan demand fell at 12.5% of banks surveyed (net).

 

SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE - RESI TIGHTENING

 

SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE - RESI demand

 

Consumer Loans Show Improvement

On the non-mortgage consumer side, the percentage of banks expressing increased willingness to lend increased from Q2. Beyond this, the demand for these loans rose while lending standards eased.   

 

SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE - CONSUMER TIGHTENING

 

SENIOR LOAN OFFICER SURVEY: RESI DEMAND FALLS BUT STANDARDS FINALLY EASE - cons new

 

Joshua Steiner, CFA

 

Allison Kaptur

 


Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more