With most banks still flush with deposits and reluctant to lend, the need for advances from the Federal Home Loan Banks continued to drop sharply during the third quarter, according to a report released Friday by the Office of Finance.

Overall advances have declined 13.2% since yearend, falling to $415.4 billion. Only 2 of the 12 Home Loan Banks saw an increase in advances during the third quarter, with the Federal Home Loan Bank of Cincinnati reporting a 0.5% uptick while the Indianapolis Home Loan Bank reported a 1.6% increase.

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