Based on reporting by St. Louis Fed FRED Economic Research. Research, structure, and fact-checking by Groundwork.
FDIC-insured banks hold a significant amount of mortgage-backed securities in their portfolios, making up more than half of their total assets.
Based on reporting by St. Louis Fed FRED Economic Research. Research, structure, and fact-checking by Groundwork.
“The changing mix of securities held by FDIC-insured banks is a reflection of their evolving risk preferences and regulatory environment. As banks become more risk-averse, they are holding onto securities for longer periods, which can have implications for their investment returns and capital requirements.”
You may be wondering what types of securities FDIC-insured banks hold in their portfolios. The answer lies in the quarterly banking profiles of these institutions, which provide an overview of their aggregate financial condition. According to these profiles, mortgage-backed securities make up more than half of the total assets held on their balance sheets.
The FRED graph above shows the makeup of these institutions' balance sheets between the first quarter of 1984 and the first quarter of 2026. The asset classes are as follows, in descending order of relative shares:
Mortgage-backed securities are bonds backed by pools of home mortgages. These securities are a significant portion of the assets held by FDIC-insured banks, making up 60.7% of their total assets.
U.S. Treasury securities are debt issued by the US federal government. These securities are a stable and low-risk investment option, making up 33.5% of the assets held by FDIC-insured banks.
State and municipal securities are bonds issued by states and local governments to fund public projects. These securities are a smaller portion of the assets held by FDIC-insured banks, making up 5.8% of their total assets.
Equity securities are shares of ownership in a corporation. These securities are not held by FDIC-insured banks, making up 0.0% of their total assets.
We can see that mortgage-backed securities consistently represent the lion's share of assets. However, between 2008 and the time of this writing, the share of those securities has decreased while the share of US Treasury and state and municipal securities has increased. Researchers at the Kansas City Fed point to changes in the regulatory environment and evolving preferences for risk to explain this changing mix.
These assets can also be classified as either trading securities or investment securities. Trading securities are intended to generate short-term financial gains and typically make up a small share of a bank's total assets. Investment securities, on the other hand, make up the larger share of a bank's total assets and typically have longer holding periods. Their type is reported on the balance sheet as either "held to maturity" (HTM) or "available for sale" (AFS).
David Sterling (2026). What Securities Do FDIC-Insured Banks Hold? A Closer Look. Groundwork. Retrieved from https://gworky.com/article/fdic-insured-banks-securities-holdings
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Groundwork enforces a strict, independent verification standard. Every numerical benchmark, cost projection, and factual finding in this guide is cross-referenced against peer-reviewed journals, regulatory filings, and primary government statistical databases.
David Sterling is a personal finance writer covering mortgages, banking, insurance, and investing for Groundwork. He turns complex financial research into practical decisions.
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Our second FRED graph below shows the proportions of HTM (blue area) and AFS securities (green area) held in FDIC-insured banks between the first quarter of 1994 and the first quarter of 2025.
Since 1996, most of the investment securities are available for sale, meaning they are held for an indefinite period of time and could be sold before maturity. This indicates that FDIC-insured banks are taking a more conservative approach to their investment portfolios.
However, since 2010, the proportion of investment securities that banks intend to hold until expiration, or maturity, has increased. At the time of this writing, they amount to 39.8% of all investment assets. This suggests that FDIC-insured banks are becoming more risk-averse and are holding onto securities for longer periods.
in summary, FDIC-insured banks hold a significant amount of mortgage-backed securities in their portfolios, making up more than half of their total assets. However, the mix of securities has changed over time, with a decrease in mortgage-backed securities and an increase in US Treasury and state and municipal securities. Additionally, the proportion of investment securities that are available for sale has decreased, while the proportion of those held to maturity has increased.
You can analyze FDIC-insured banks' securities holdings by following these steps:
Access the FRED database and navigate to the "Federal Deposit Insurance Corporation" source.
Select the release "FDIC Quarterly Banking Profile" and the release table "Assets and Liabilities of FDIC-Insured Commercial Banks and Savings Institutions."
Scroll to the section labeled "Securities" and check the boxes next to the series labeled "U.S. Treasury Securities,
FDIC-insured banks hold a variety of securities, including mortgage-backed securities, U.S. Treasury securities, state and municipal securities, and equity securities.
Mortgage-backed securities make up 60.7% of the total assets held by FDIC-insured banks.
Trading securities are intended to generate short-term financial gains and typically make up a small share of a bank's total assets. Investment securities, on the other hand, make up the larger share of a bank's total assets and typically have longer holding periods.
At the time of this writing, 39.8% of all investment assets are held to maturity.
The changing mix of securities held by FDIC-insured banks reflects their evolving risk preferences and regulatory environment. As banks become more risk-averse, they are holding onto securities for longer periods, which can have implications for their investment returns and capital requirements.
You can analyze FDIC-insured banks' securities holdings by accessing the FRED database, selecting the release and release table, scrolling to the section labeled 'Securities,' checking the boxes next to the series, adding the series to the graph, and editing the graph to choose the desired format.
The key takeaways from this article are that FDIC-insured banks hold a significant amount of mortgage-backed securities in their portfolios, making up more than half of their total assets. However, the mix of securities has changed over time, with a decrease in mortgage-backed securities and an increase in US Treasury and state and municipal securities.
The implications of the changing mix of securities held by FDIC-insured banks are that they are becoming more risk-averse and are holding onto securities for longer periods, which can have implications for their investment returns and capital requirements.
You can access the FRED database by visiting the Federal Reserve Economic Data website and selecting the 'Federal Deposit Insurance Corporation' source.
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