Dear Members:
The Federal Home Loan Bank of Atlanta performed its mission with strength and consistency during a year of continuing challenges in the housing market, the mortgage finance industry, and the broader banking sector. As the economy struggled through an unsteady recovery, we remained flexible and responsive to the funding needs of our members while successfully managing the risks and impacts of a volatile mortgage market and numerous member failures. We also balanced our goals of delivering competitively-priced funding and consistent dividends to members while building our retained earnings and maintaining a strong capital position.
Like most participants in the housing finance and banking industries, we have felt the impact of this challenging environment, primarily through the overall reduction of member funding requests and provisioning for possible losses in a portion of our mortgage-backed securities portfolio. Still, our overall performance is indicative of our resilience, well-structured balance sheet, and the soundness of the FHLBank cooperative business model. Contraction of our balance sheet over the past two years was manageable given our capital structure and risk level, and we instituted a number of prudent steps to ensure members' investments in the Bank remain well protected.
As the financial services industry begins to stabilize, we are encouraged by the long-term economic outlook for the region the Bank serves. As the economy continues to grow and loan demand picks up at member institutions, we anticipate demand for funding will stabilize. The Bank has performed well through a variety of business cycles, and we are confident that we can continue to address the funding needs of a revitalized banking and housing finance industry that will emerge from the financial crisis.
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