If banks were reluctant to deploy excess liquidity in securities earlier this year, investment yields are even less attractive now. But with deposits continuing to pile up and loan growth lagging, there is growing pressure to put money to work.

Most of the publicly traded U.S. banks with more than $50 billion in assets — 16 out of 26 — increased their securities holdings by a greater amount than their cash and equivalents, according to S&P Global Market Intelligence data. That is a shift from the first quarter, when increases in securities exceeded cash growth at just 10 of the banks.

Executives at institutions that have swung sharply toward bond allocations over the course of the pandemic said that excess liquidity is unlikely to dissipate anytime soon. Some banks are still holding the line, but those management teams said during second-quarter earnings season that the unexpected persistence of large deposit inflows could change their thinking even after 10-year Treasury yields tumbled from 1.74% at March 31 to 1.31% in mid-July.

Still, the buildup in cash since the onset of the COVID-19 crisis continues to overshadow growth in securities portfolios. Across the big banks, the median ratio of cash and equivalents to assets jumped to 15.1% at June 30 from 4.2% at the end of 2019. The median ratio of securities to assets increased more modestly over the same time, to 19.6% from 18.6%. Balance sheets and executive commentary continue to show a wide variety of views on what to do with all the cash, and some banks remain emphatic that they won't move until yields increase.

Bank of America Corp.'s balance sheet has made one of the largest swings toward securities among big banks. Its securities portfolio represented 42.0% of assets at June 30, up from 39.7% at March 31 and 30.5% at the end of 2019, and the bank said it might keep deploying liquidity into fixed-rate holdings.

"We're not timing the market or betting," Chairman and CEO Brian Moynihan said during a conference call on second-quarter results. "Deposits have crossed $1.9 trillion, and the loans are $900 billion and change, and that difference has got to be put to work."

CFO Paul Donofrio said the bank continues to maintain a massive liquidity portfolio of more than $1 trillion, including cash and equivalents and about $150 billion of bonds with fixed-to-floating hedges that earn a bit more than cash.

Despite the securities investment, deposit growth helped keep BofA's asset sensitivity at a similar level as the first quarter. "We have a lot of dry powder as we sit here today, and more deposits are coming," Donofrio said. He added that the bank has been seeking opportunities more attractive than securities, including retaining about $6 billion of collateralized loans that it might have otherwise packaged into bonds and sold to investors.

Truist Financial Corp.'s shift toward bonds has been comparable to BofA's, with its securities portfolio representing 28.4% of its assets at June 30, up from 25.4% at March 31 and 17.7% at the end of 2019. Truist also said that its asset sensitivity increased a bit in the second quarter from the first quarter since deposit growth outweighed the increase in investments.

On the other end of the spectrum, Fifth Third Bancorp's securities holdings fell to 19.0% at June 30 from 21.8% at the end of 2019, though the most recent figure is a bit higher than the 18.7% at March 31, 2021.

"We certainly are an outlier in terms of being, I think, more prudent and more cautious at deploying at these low rates," CFO James Leonard said during a conference call on second-quarter results. "Our goal is, let's maximize our [net interest income] over the next five years, not over the next 12 months."

Leonard said Fifth Third would increase its cash deployment when yields move above 2%, though the bank did "leg into" securities in the first quarter, when the rate on 10-year Treasurys topped out at 1.74%, by "pre-investing" about $1 billion of cash flows.

Regions Financial Corp. has also been reluctant to put cash into bonds. Its ratio of securities to assets fell from 19.0% at the end of 2019 to 18.4% at March 31 this year. However, it added $2.13 billion of securities in the second quarter, pushing the ratio to 19.4% at June 30.

On the company's second-quarter earnings call, CFO David Jackson Turner Jr. said the securities increase boosted net interest income at the expense of Regions' net interest margin and that the bank does not believe that investment opportunities are attractive. He said that Regions is keeping an average of about $23 billion of cash at the Federal Reserve earning 15 basis points, compared with about $1 billion to $2 billion in "normal times."

"We'd love to redeploy that in a more meaningful manner," he said. "But sitting here where we are with the 10-year and trying to invest in mortgage-backed securities is probably ill-advised."

M&T Bank Corp. allowed its investment portfolio to continue to run off in the second quarter, with its securities-to-assets ratio dropping to 4.6% at June 30, down from 4.9% at March 31 and 8.3% at the end of 2019.

But CFO Darren King said the bank's securities holdings would probably level off and that its pending merger with People's United Financial Inc., which has larger relative holdings of securities and mortgages, "will balance us out a little bit."

He added that M&T's evolving views on the durability of deposit growth will impact how it manages its balance sheet after the acquisition. "Our belief is that the deposits are probably going to stick around a little bit longer than we might have anticipated," he said. That "is affecting our thinking about deploying and the duration that we want to assume and what percentage of the cash we want to put to work."