# Participation Desk ยท What it means how to read participation flows, 701.22, and the risks the filing cannot show. Live page: https://getbookiq.com/participation-desk/#meaning --- READING THE DESK Every figure here is something an institution filed about itself on the 5300. The desk lines those filings up so a market with no tape starts to look like one. This tab says what each figure means, where our thresholds sit, and where the data stops. Purchased vs sold flow, annualized Accounts 690 and 691, year-to-date, scaled to a full year by cycle. MEANS How much participation paper the institution bought and how much it sold, expressed as a yearly run rate. WHEN HIGH A large buy figure is a balance-sheet strategy: the CU cannot originate enough and is renting other lenders' production. A large sell figure is a funding or concentration strategy: it originates more than it can hold. WHEN LOW Zero on both sides is the norm. Roughly 2,300 of 4,250 insured filers show no participation activity at all. VS PEERS Compare inside the asset band. A $500M CU buying $50M a year is at 10% of assets, which is aggressive; the same figure at a $5B CU is routine. OUR LINE Q1 figures are x4 The 2026-03 run rate is a first quarter multiplied by four. One large trade in January reads as four. Treat Q1 rates as direction, not size, until the Q2 filing halves the multiplier. LIMITS Year-to-date resets every January, so a CU that sold heavily in Q4 and paused in Q1 appears to have stopped. The 8-quarter activity count (bq, sq) on each CU page is the steadier habit signal. Outstanding purchased as % of net worth Account 691L divided by net worth (997). MEANS How much of the institution's capital is exposed to loans it did not originate and does not service. WHEN HIGH Above 100% of net worth, the purchased book alone could consume all capital in a severe loss scenario. Above 25% at a small CU, the 701.22 due-diligence obligation (independent credit review of every pool, ongoing monitoring of the originator) exceeds what a two- or three-person lending staff can actually perform. WHEN LOW Small or zero: the CU is either a seller, inactive, or has let purchased pools run off. VS PEERS The median active buyer carries roughly 57% of net worth in purchased paper. The stressed-books sheet is the tail above that, weighted by loss rate and the cu-intel score. OUR LINE 25% of NW at a small CU is a flag; 100% anywhere is hot The cell turns hot at 100%. The stressed sheet weights % of NW alongside participation NCO and the cu-intel score. LIMITS 691L excludes some commercial construction-and-development categories, so the true purchased exposure can be higher than shown. It is a floor. Sold, retained servicing Account 691N: participations sold where the CU still services the loan. MEANS The stock of loans the institution originated, sold pieces of, and continues to collect on. It is the footprint of a seller's program. WHEN HIGH A large retained-servicing balance means selling is a program, not an event. The CU has counterparty relationships, a pool-assembly routine, and probably a standing appetite for buyers. WHEN LOW Near zero with a nonzero sell figure means the CU sold servicing-released or sold once. The habit is unproven. VS PEERS Retained servicing at 5% to 10% of assets marks a committed seller in most bands. OUR LINE Retained servicing plus sold in 6+ of last 8 quarters = habitual seller This pairing is the core of the likely-sellers sheet. Pressure signals (loans/shares, share decline) rank sellers within it. LIMITS The field does not say what collateral was sold or to how many buyers. A single-counterparty program and a ten-buyer program look identical. Participation NCO, annualized Accounts 550F less 551F, over the purchased balance. MEANS Net charge-offs on purchased participations as a yearly rate on the purchased book. WHEN HIGH Above 2% the cell turns red. The system rate is 0.56% at 2026-03, and participation losses have run above the overall loan book through 2025. A buyer well above system is holding pools whose originator underwrote worse than the buyer's own members. WHEN LOW Zero or negative (recoveries exceed charge-offs) on a large book is a clean read, or a book too young to have seasoned. VS PEERS System 0.56% is the yardstick. Indirect auto and unsecured consumer pools carry most of the excess. OUR LINE Above 2% is bad; above system on a book over 50% of NW is the surveillance pitch Independent pool-level surveillance is the second product this data supports, and this cell is where the conversation starts. LIMITS Small purchased books produce noisy rates: one charged-off pool on a $2M balance reads as a catastrophe. Read the dollar figure alongside the rate. Loans / shares Account 025B over 018, the standard liquidity ratio. MEANS How fully member deposits are already lent out. It is the seller pressure line on this desk. WHEN HIGH Above 90% the CU has little room to fund new loans from deposits. Above 100% it is borrowing or selling to fund production. Paired with a share decline, it is the profile of an institution that needs to sell paper soon. WHEN LOW Below 70% the CU is deposit-rich and loan-poor, which is the buyer profile: it has liquidity to deploy and nowhere internal to put it. VS PEERS The median participation-active CU runs about 76%. A CU 15 points above its band median is under pressure; 15 below is a natural buyer. OUR LINE Loans/shares above 90% plus shares falling YoY = seller pressure Habitual sellers under pressure rank highest on the sellers sheet. Buyers below 70% rank highest on the buyers sheet. LIMITS A high ratio can be deliberate at a well-capitalized CU with wholesale funding. The ratio says pressure exists, not that management feels it. Buyer : seller imbalance Count of institutions filing any purchase vs any sale in the cycle. MEANS How many active buyers there are for each active seller. At 2026-03: 747 buyers, 263 sellers, 2.8 to 1. WHEN HIGH A wide ratio means supply is the scarce side. Sellers set terms; buyers compete for pools and accept thinner due diligence to win them. That is the condition that produces the stressed-books tail. WHEN LOW A ratio near 1:1 would mean a balanced market. It has not been near 1:1 in the filings we hold. VS PEERS The Q1 count is smaller on both sides than the Q4 count (1079 vs 435 at 2025-12) because a quarter of activity is a shorter window; the ratio is the stable read. OUR LINE 2.8:1 means the seller is the call to make Anyone with access to sellers has the scarce product. That is why the likely-sellers sheet leads. LIMITS Counts, not dollars. A CU buying $1M once counts the same as VyStar. The dollar flows above give the size. THREE CALL-SHEET ROWS YOU WILL MEET THE HABITUAL SELLER Sells every quarter, retains servicing, buys nothing. Liberty (Evansville, IN) sold at a $1.32B annualized rate at 2026-03, in 8 of the last 8 quarters, with $373M of sold-retained servicing and loans/shares at 101%. This could be a production engine that funds itself through the participation market. What the row supports: a buyer introduction, or pool surveillance for the buyers already taking its paper. THE TWO-SIDED INSTITUTION Buys and sells in size in the same year. VyStar (Jacksonville, FL) bought $876M and sold $646M annualized, and carries $1.15B of purchased paper outstanding, 93.7% of net worth. It is reshaping its book by collateral type, not raising liquidity. What the row supports: the outstanding-to-net-worth figure is where the surveillance conversation starts, and the two-sided flow means it knows the market from both chairs. THE HEAVY SMALL HOLDER Under $250M in assets, no sales, a purchased book above 25% of net worth, bought in bursts rather than every quarter. The 701.22 obligation to review and monitor every pool sits on a lending staff of two or three. The participation NCO on these books is usually zero, which means unseasoned rather than clean. What the row supports: this is the stressed-books sheet, and the pitch is outsourced pool review rather than more paper. WHAT THE DESK CANNOT SAY Counterparties are never disclosed. No 5300 field names who bought from whom. A seller and a buyer in the same state with matching collateral and matching quarter is a coincidence until someone confirms it. The desk never draws that line and neither should a call script. Intent is not observable. A "likely seller" is an institution whose filings show habit or pressure. Whether management wants to sell next quarter, at what price, or to whom, is not in the data. The sheets rank the probability that a call is worth making, nothing more. Timing is coarse. Quarterly filings arrive roughly two months after quarter end. A pool sold in April appears in the Q2 filing in late August. Anything the desk shows is at least one trade cycle old.