Top banks still fans of home equity loans.

Home equity lines of credit aren't as hot as they used to be, but the top banks in the field still swear by the products.

First Fidelity Bank, for example, increased its holdings of the lines by a sharp 34% in the year through March 31, to $1.6 billion.

"We like |em," said Donald C. Parcells, executive vice president of consumer banking at the Newark, N.J., powerhouse. The loans have strong consumer appeal because of tax advantages, he said, and they usually perform superbly.

A 7% Increase

As a group, the top 25 banks in home equity lending increased their holdings by 7% in the year through March 31, an American Banker survey has found. Though off from the double-digit growth of the 1980s, that handily topped the 2.3% growth for all bank assets.

The 25 now account for some 35% of all the home equity lines held by banks. And the leaders are steadily tightening their grip.

"Consolidation, that's the story here," said David Olson, a Columbia, Md., consultant.

Portfolio Purchases

The growth of home equity portfolios has been hurt somewhat by the recession and the boom in first-mortgage refinancings. As homeowners refinance, they often pay off their home equity loans.

Nonetheless, most of the top top banks have been managing to post significant gains, the result of both aggressive marketing and acquisitions of other banks. Some also have been buying separate portfolios of home equity lines.

"We haven't done any portfolio purchases yet but we're interested in doing some," said Mr. Parcells of First Fidelity. "We're looking at some right now, as a matter of fact."

Not all the leaders are growing, however, No. 1-ranked Bank of America, for instance, actually suffered a 4.3% decrease in its home equity holdings since mid-1992, the study found.

Bank of America officials could not be reached for comment.

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