Non-agency MBS Weekly: Banks hit MTGE, Float your way through Rate Vol; Q1 2026 Bank Holdings Update

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Non-agency MBS Weekly: Banks hit MTGE, Float your way through Rate Vol; Q1 2026 Bank Holdings Update

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Non-agency MBS Weekly

Banks hit MTGE, Float your way through

Rate Vol; Q1 2026 Bank Holdings Update

Market Overview: 15 May 2026

Issuance for the week was around $5bn, YTD at $99bn. Spreads tightened 5bps for NQM Securitized Products Strategy

across the stack with Non-QM AAAs now at 120bps, HELOC/CES at 125bps, Jumbo 2.0 United States

PT at 140bps with 6 cap floaters around 155-160bps.

Pratik K. Gupta

We looming uncertainty and a 10y yield that just peaked above 4.5%, we recommend CLO/MBSBofAS Strategist

looking at floaters. CLO AAA spreads at 120bps for new issue and 155-160bps for 6% +1 646 855 9146

pratik.gupta@bofa.com

cap Jumbo 2.0 PLS floaters offer meaningful pickup vs corporate fixed-rate IG at 70-75

Chris Flanagan

bps. FI/MBS/CLO Strategist

BofAS

Bank Holdings as of 2026Q1 +1christopher.flanagan@bofa.com646 855 6119

US banks residential real estate loan holdings is at $2.67tn as of May 2026. Credit Union Jeana Curro

junior lien holdings increased by about $3bn QoQ. Credit Unions junior lien holdings MBS Strategist

increased by $23bn YoY compared to an increase of $9bn YoY for banks, demonstrating jeana.curro@bofa.com

increased interest in junior liens. Andy Fan

CLO/MBS Strategist

Important activities for the quarter include (a) Huntington acquired Cadence in Q1 2026, BofAS +1 646 855 9145

leading to significant increases/decreases to their resi balance sheet, (b) JPMorgan andy.fan3@bofa.com

securitized away their 2nd liens acquired from Discovery as mentioned previously (c) Akash Bhairav Gupta

Fifth Third bank acquired Comerica, which increased the C&I loans significantly of the MBS/CLO Strategist BofAS

former, and reduced the latter.