PLANO, Texas–Three years after launch, Catalyst Corporate is reporting its loan participation program has surpassed the $2-billion mark.
“The amount of growth and the momentum of this growth are truly a testament to the power and success of this service,” said Bruce Fox, Catalyst Corporate Executive VP and Chief Investment Officer.
Catalyst Corporate said its Loan Participation Program allows credit unions to have some diversification in their loan portfolio, but also serves as a conduit between credit unions that need liquidity and credit unions that have excess liquidity.
“Through Catalyst’s program, credit unions can diversify by way of underwriter, geography and actual loan portfolio,” said Fox. “I think that’s one reason this service is attractive to many credit unions. They’re able to allocate a certain amount to each portfolio and avoid putting all their eggs in one basket.”
That draw certainly resonates with Diane Ward, CFO of Bossier Federal Credit Union, according to Catalyst Corporate.
“Geographic diversification and loan growth are two reasons why Bossier FCU participates in this service,” she said. “Our area of the country is not doing as well economically as other areas, so we want to expand our geographic footprint. Additionally, we have a low loan-to-share ratio. Our loan participation program has become an important aspect of our ALM strategies.”
Through the Catalyst Corporate Loan Participation Program, Bossier FCU has expanded its loan concentrations beyond its geographic footprint in pursuit of quality loan growth. “In doing so, we have mitigated some risk on our balance sheet, increased our loan-to-share ratio and improved our earning potential over investment strategies we would otherwise deploy in the absence of loan demand,” added Ward.
Catalyst Corporate said another advantage participants cite is the level of due diligence built into the process.
“We provide a more detailed due diligence package for the buying credit union than most programs in the marketplace,” said Fox. “We deal with high-quality sellers who must meet certain internal standards. We offer to provide servicing on the loan participation, calculate the pro-rata P&I payments and get a remittance report to credit unions on a timely basis.”
For info: Catalyst Corporate’s Loan Participation Program, or email loanparticipations@catalystcorp.org or call 800.442.5763, option 6.