Three superregionals-First Union Corp., NationsBank Corp., and Norwest Corp.-ranked among the top five bank holding companies in mortgage investments as of Sept. 30.
First Union ranked third with holdings of $45.1 billion of whole loans, mortgage-backed securities, and collateralized mortgage obligations. NationsBank was fourth with $43.9 billion and Norwest was fifth with $29.1 billion.
A table in the Jan. 24 American Banker understated the role of these players by ranking the mortgage investments of individual banks, rather than holding companies.
Chase Manhattan Corp., with $59.3 billion, and BankAmerica Corp., with $54.1 billion, were the two largest mortgage investors among bank holding companies.
Randy I. Prindle, assistant treasurer at Norwest, said only about half of his company's total consisted of mortgage securities held for investment. About $10 billion were whole loans originated by Norwest Mortgage, but waiting to be securitized and sold to investors. The rest included foreclosed mortgages and some investments of the mortgage company, he said.
The proportion of mortgage securities in Norwest's securities investment portfolio has held steady for years, Mr. Prindle said. He said the extra yield over Treasury bonds provided by mortgage-backed securities is used to buy "floors"-hedges against margin compression when interest rates are low.
When mortgage investments are aggregated at the holding company levels, some players slip in the rankings. Whereas Wells Fargo Bank ranked third among individual banks with $22.1 billion in mortgage investments, the parent Wells Fargo & Co. is just sixth among holding companies, at $23.2 billion.