The wholesale lending business of 12 Federal Home Loan Banks picked up last year although it doesn’t show up in the top-line figures.
Outstanding advances increased by just 2% in 2012 or $7.6 billion to end the year at $425.8 billion, according to the FHLB Office of Finance.
However, the FHLBs originated $2.92 trillion in advances in 2012, up 93% from the year prior. Advance repayments were also up—totaling $2.9 trillion, according to the FHLBs combined 2012 annual financial report released March 29.
“The demand for advances has shown some signs of regional stabilization and certain FHLBank members increased their use of advances,” the new Office of Finance report says.
The largest advance borrower—JPMorgan Chase & Co.—had $42 billion in outstanding advances at yearend, up from $17.8 billion in 2011.
Bank of America was the largest FHLB borrower in 2011, but it pulled back and now it’s the fifth largest borrower. B of A reduced its advances by 87% from 2011 to $14.4 billion in 2012.
Capital One Financial Corp. was not even in the top 10 last year. But now it is the second largest borrower with $21 billion in advances.
The combined earnings of the 12
