FHLBanks Fare Well in 2Q

The Federal Home Loans Banks are doing a fairly good job of retaining their mortgage customers and building their mortgage portfolios, despite the record-setting pace of refinancings during the first half of this year.The FHLBank System's second-quarter financial report shows that mortgage purchases by the banks totaled $46.3 billion for the first half, while prepayments totaled $16.3 billion. As a result, the FHLBanks held $90.4 billion in residential mortgage loans on their books as of June 30, up from $60.6 billion at the beginning of the year. Residential mortgage loans constitute 11.2% of total system assets. The financial report also shows that FHLBanks' earnings and lending activity (advances) were flat when comparing the first and second quarters. Earnings declined by $5 million to $451.0 million in the second quarter and advances rose by $7 billion to $506.3 billion.