Big banks cut their holdings of state and local-government bonds during the last three months of 2018 as the corporate tax cut reduced the benefit of owning the securities, signaling the industry’s biggest annual pullback from the market on record and its first in more than two decades.

State Street Corp., JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc. together reduced their holdings of municipal debt during the fourth quarter by $5 billion, according to filings with the Securities and Exchange Commission. While some, including Wells Fargo & Co. and Citigroup Inc., stepped up their purchases at the end of the year, it wasn’t enough to make up for the cutbacks by other lenders.

The fourth-quarter reduction comes after banks slashed nearly $40 billion from their state and local-government bond holdings from January through September, according to Federal Reserve Board figures, marking a stark reversal for an industry that had been a steadily growing source of demand. The filings indicate that banks’ holdings declined overall last year for the first time since 1995 and eclipsed the record drop of $29 billion in 1987.

Following are the changes in holdings of major banks, according to SEC filings:

The retreat was propelled by President Donald Trump’s corporate tax cut, which reduced the advantages of holding municipal bonds instead of higher-yielding securities like corporate debt.

Spokespeople for the banks declined to comment. The Fed is set to release its figures Thursday.

While U.S. banks are one of the biggest owners of municipal securities, their pullback hasn’t had a dramatic impact on prices, in part because the pace of new debt sales plunged last year and analysts say individual investors have been buying the securities to shelter their income after being hit by the $10,000 cap on state and local tax deductions.

Even with the diminished demand from banks, the overall municipal market gained 1.28 percent last year, including a 0.34 percent advance for debt maturing in at least 22 years, a corner of the market where banks are a key source of demand, according to Bloomberg Barclays indexes.