The 12 Federal Home Loan Banks reported combined earnings of $530 million in the second quarter, up 17.5% from the level recorded in the second quarter of 2003.The FHLBanks attributed the earnings increase to higher volumes of mortgage loans held in portfolio and increased borrowing or advance activity. Advances increased by 9.7% during the first six months of this year, to $564.0 billion. However, the mortgage portfolios grew by only 1.9%, to $115.6 billion, as of June 30. "During the first six months of 2004, repayments and prepayments were approximately $13.4 billion, while purchases/originations were approximately $15.9 billion," according to the second-quarter report by the FHLBank System's Office of Finance.

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