Banks are holding more mortgage-backed securities in their portfolios now than they did during the second quarter of 2014, according to a client note from Barclays.
The note from Barclays, based on data from the National Information Center release of the consolidated financial statements for bank holding companies for the third quarter, shows banks’ agency MBS holdings increased by $13.6 billion for the top 50 banks by assets in their HTM and AFS portfolios.
That’s a reversal of the second quarter’s data, which saw agency MBS holdings fall by $4 billion from the first quarter to the second quarter.
According to Barclays, the majority of the increase came in the form of conventional agency MBS holdings, which increased by $11.9 billion in the third quarter. Agency collateralized mortgage obligations increased $5.4 billion, while Ginnie Mae holdings were down by $3.7 billion.
Per Barclays’ report, U.S. Bancorp had the largest increase in agency MBS holdings, adding $5.1 billion in the third quarter. On the other hand, Wells Fargo reduced its holdings by $4.3 billion. Bank of America added $6.4 billion of conventional agency MBS and reduced its Ginnie Mae holdings by $7.4 billion.
For the top 50 banks, holdings of non-agency MBS decreased by $8.3 billion, Treasury holdings increased $72 billion, while agency debt holdings fell by $4.3 billion from the second quarter to the third quarter.
Barclays also reported that in the top 50 banks’ loan books, one-to-four family first-lien residential loans decreased $14.7 billion in the third quarter.
Barclays notes that the data in the National Information Center report is not as comprehensive as the Quarterly Banking Profile from the Federal Deposit Insurance Corporation, but states that the report does provide a “good early estimate” of changes in bank assets and liabilities.