FHLBanks Quarterly Numbers Show Strong Capital

Stress Tests Demonstrate Strength

FHLBanks Quarterly Numbers Show Strong Capital and Profits for Safety and Soundness -- Continued Service to Members and Local Communities

WASHINGTON, July 30, 2014 (GLOBE NEWSWIRE) -- The results reported in today's preliminary unaudited second quarter 2014 combined operating highlights for the Federal Home Loan Banks (FHLBanks) indicate that the 12 regional cooperatives are fulfilling their publicly mandated role to provide reliable funding and liquidity to  member institutions nationwide, according to John von Seggern, President and CEO of the Council of FHLBanks.
"The FHLBanks continue to work very well for local lenders of all sizes and many types who are serving the credit needs of families, farms and businesses everywhere in the U.S.," von Seggern said.

"On the housing front, FHLBanks provide their members with fair and equal access to secondary mortgage markets," added von Seggern. "And they help protect the ability of their member institutions to make mortgage loans for their own portfolios."

These quarterly results show that the system remains strong and well-capitalized, keeping it safe and sound for taxpayers, the chief executive said.

The FHLBanks receive no congressional appropriations.  During the nation's financial crisis, they did not need nor took any government bailouts. In the early stages of the crisis, the FHLBanks were a critical source of liquidity for the entire U.S. banking system.

Earlier this month, the FHLBanks disclosed the results of stress tests that were mandated by the Dodd-Frank Act and overseen by the Federal Housing Finance Agency (FHFA).

"The stress tests were based on severely adverse economic scenarios defined by the FHFA," von Seggern said. "The test results demonstrated the strength and capital adequacy of each FHLBank and the FHLBank System as a whole."

The FHLBanks raise money for approximately 7,500 member financial institutions to lend for community needs  by selling bonds to institutional investors worldwide. They funnel those funds to their members in the form of secured loans which they call "advances." FHLBank members lend those funds in their communities to support housing, jobs, and economic growth.