CINCINNATI, Aug. 25, 2005 (PRIMEZONE) -- The Federal Home Loan Bank of Cincinnati (FHLBank Cincinnati) continues to work diligently toward registering its capital stock with the Securities and Exchange Commission and remains committed to effective registration as soon as practicable. Because there are ongoing discussions with the SEC regarding certain accounting practices related to SFAS 133 (Accounting for Derivative Instruments and Hedging Activities), the FHLBank Cincinnati's board of directors decided to ask the SEC to withdraw the FHLBank's application to register its capital stock, pending resolution of these accounting issues.
David Hehman, president and CEO of FHLBank Cincinnati, said: "We have discussed a number of issues and questions with the SEC related to our filing. We have made excellent progress in resolving these matters, but it has become evident that an SFAS 133 issue will not be settled with certainty before our target effective date of August 29."
The FHLBank Cincinnati faced a deadline of registering its stock by August 29, as directed by its regulator, the Federal Housing Finance Board. After the FHLBank filed its Form 10 registration on June 30, the SEC inquired about certain accounting practices for derivatives related to SFAS 133.
"Our board of directors felt it was inappropriate to allow our registration to become effective until this matter is settled with the SEC. Accordingly, our board decided to ask the SEC to withdraw our application to register our capital stock, pending resolution of these accounting issues. We will continue to work with the SEC, our auditors and our legal counsel to resolve these issues quickly and to become registered in a timely manner," Mr. Hehman said.
The FHLBank Cincinnati will address these accounting issues soon to determine whether it will be necessary to restate earnings. Regardless, resolving these issues should not affect the operations or financial soundness of the FHLBank. "The hedges under discussion with the SEC are highly effective economically, and as a result, we believe the outcome should not have a material impact on the operations of the FHLBank, nor its ability to serve its members," said Sandra Bell, chief financial officer of the FHLBank Cincinnati.
The FHLBank Cincinnati is an $81 billion, AAA-rated regional wholesale bank providing financial services for residential housing and economic development to 740 member financial institutions located in the Fifth FHLBank District of Kentucky, Ohio and Tennessee. The FHLBank Cincinnati has contributed $199 million for the creation of 32,827 units of lower-income housing through its Affordable Housing Program since 1990. The FHLBank System, which includes 12 district Banks, was chartered in 1932 by the U.S. Congress to promote housing finance but is wholly owned by its 8,000 member institution stockholders and does not use taxpayer dollars.
The press release contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, the effects of economic market conditions on demand for the FHLBank's products, legislative or regulatory development concerning the FHLBank System, competitive forces and other risks detailed from time to time in the FHLBank's financial disclosures. The forward-looking statements speak of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements and the FHLBank undertakes no obligation to update any such statements.