Commercial banks reported 25% growth on an annualized basis in their loan portfolios for the week ending June 6, led by a 75% annualized increase in single-family mortgages ($22 billion), according to a Keefe, Bruyette & Woods report based on Federal Reserve data.
At the larger commercial banks, real estate lending continues to be driven by single family activity, which expanded 70% annualized over the prior week.
On a dollar basis, single-family lending increased by $14 billion when compared with the week prior. Home equity lines of credit balances fell by 9% on an annualized basis, while commercial real estate lending fell by 1%.
Meanwhile, the report notes large banks sold Treasuries and MBS during the week, cutting their holdings by 38% (annualized) or $8.1 billion.
For smaller commercial banks, single-family lending was up 89%, annualized, or $8.6 billion. This group's holdings of Treasury securities and MBS increased by 10% from week-to-week.
HELOC and CRE balances remained slightly unchanged from the previous week.
The KBW analysts noted, “On the asset side, small banks have shown greater reluctance than their larger peers to expand holdings of securities, and as a result have reduced excess cash and liquidity.”
Total securities balances are only $2.8 billion higher than their 1Q12 levels, representing a very modest 2% annualized growth quarter to date.
