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Catalyst Corporate Surpasses $1.5B in Loan Participation Sales
Thursday, June 22, 2017 6:45 AM

Catalyst Corporate Federal Credit Union has surpassed $1.5 billion in loan participation sales for its member/client credit unions.

"Credit unions have found loan participations to be an effective balance sheet management tool," said Jeff Hamilton, Catalyst Corporate’s vice president of member credit and director of the loan participation program. "They can offset liquidity challenges and concentration risk and help credit unions meet members' loan needs without exceeding policy limits or pressuring capital ratios."

As of May 25, 2017, Catalyst Corporate has helped 136 credit unions in 38 buy/sell transactions amounting to $1.6 billion. Catalyst Corporate works with credit unions of all sizes across the country.

Catalyst Corporate's program provides a comprehensive one-stop-shop for all aspects of the loan participation process, employing a straightforward, “standardized” process for managing the buying and selling steps.

Catalyst Corporate packages and markets the loan pools, hosts due diligence information on a secure online platform, and performs monthly remittance and reporting services after the transaction is completed.

“The process is easy and convenient for all parties and allows these valuable assets to remain in the credit union system,” Hamilton said.

Service 1st Credit Union in Greenville, Texas, is a repeat buyer in Catalyst Corporate loan participations. “Catalyst Corporate’s loan participation program has helped us increase our annual earnings to a level that allows us to manage our continued relentless deposit growth, while maintaining our key ratios,” said Mike Bailey, president of the $58-million-in-assets Service 1st. “For that, we are very thankful.”

Catalyst Corporate loan pools are comprised of consumer loans, Hamilton said, such as auto loans and first-lien mortgages. "Compared to other investment alternatives, credit unions have access to high-quality assets at attractive yields that can enhance their financial performance," he said.

Denali Federal Credit Union in Anchorage, Alaska, is a repeat seller in Catalyst Corporate's loan participation program. Over the past three years, Denali has completed nine deals, totaling around $500 million.

“About 60 percent of Denali's loan portfolio is auto loans. We found ourselves outstripping our concentration limits and needed liquidity in order to make new loans," said Eric Bingham, CFO of the credit union whose assets are $664 million. "We needed an outlet to help us manage our balance sheet.”

Open to all credit unions, Catalyst Corporate's loan participation program fills an important need in the management of balance sheet liquidity, risk, and key regulatory ratios.

For more information, contact Jeff Hamilton at 214-703-7870 or visit catalystcorp.org/r/participations.