Dear FHLBank Atlanta Shareholders:

Thank you for your business and partnership in 2016. FHLBank Atlanta continued to advance its mission by delivering products and services that enabled our shareholder institutions to meet the credit and financial services needs of their communities.

Our commitment to contributing to our shareholders’ success as a trusted advisor remains at the forefront of everything we do. Central to this commitment is providing reliable access to funding in all market environments and offering tools and strategic counsel to help shareholders address complex business challenges. We also are focused on returning value to shareholders through consistent dividends and maintaining the cooperative’s financial strength for the long term.

From a core products perspective, the Bank continued to serve shareholders’ business needs with customized advance structures, letters of credit, secondary market mortgage solutions, and affordable housing products. Importantly, the Bank delivered advances at consistent pricing levels in a volatile interest rate market in 2016, helping shareholders preserve net interest margins and manage their balance sheets effectively.

Beyond our core products, in 2016, shareholders increasingly leveraged the Bank’s in-house expertise to help address other challenges in their businesses. Enterprise risk management, cybersecurity incident management planning, collateral stress testing, and Community Reinvestment Act compliance were some of the key areas where the Bank provided tools to help shareholders manage top-of-mind issues.

2016 Financial Results

Through this consistent focus on serving shareholders’ business needs, the Bank delivered solid financial results in 2016. The Bank reported net income of $278 million for 2016, a decrease of $23 million from net income of $301 million in 2015. The Bank’s 2016 performance resulted in a return on equity of 4.08 percent as compared to 4.63 percent for 2015. The ROE spread to average three-month LIBOR equaled 334 basis points for 2016 as compared to 431 basis points for 2015.

Total assets as of December 31, 2016, were $138.7 billion, a decrease of $3.6 billion or 2.51 percent, from December 31, 2015. Advances outstanding ended the year at $99.1 billion, a decrease of $5.1 billon or 4.89 percent from December 31, 2015. The Bank’s retained earnings balance was $1.9 billion as of December 31, 2016, an increase of $52 million, or 2.86 percent, from December 31, 2015.

The Bank returned $226 million in dividends to shareholders at an annualized dividend rate of 4.62 percent.

Supporting Growth through Community Investment

Each year, the Bank contributes 10 percent of its annual earnings to its Affordable Housing Program (AHP). We are pleased that shareholders are including the AHP as a component of their core business strategies and leveraging it to achieve both business development and community lending compliance goals.

In 2016, the Bank announced awards of nearly $22 million from its AHP Competitive program. Shareholders will use these funds to help finance the construction or rehabilitation of 3,553 units of affordable housing with a total development cost of $646 million. These projects will provide much needed housing for low- to moderate-income families and individuals while stimulating growth in jobs and the local tax base.

Shareholders also delivered more than $16.4 million in AHP Set-aside funds to assist over 2,300 homebuyers and homeowners with down payments, closing costs, and rehabilitation costs. Over one hundred of the Bank’s shareholders participated in AHP Set-aside products in 2016, using the funds to help grow their residential lending businesses and originate more than $306 million in first mortgages.

Results like these demonstrate just part of the value that FHLBank Atlanta delivers to help our shareholders achieve profitable growth. In 2017, we will seek every opportunity to continue building on our relationships with shareholders and help them maximize the value of their ownership in FHLBank Atlanta. Through our shareholders’ success, the entire cooperative thrives. Thank you again for your partnership with FHLBank Atlanta.

Wes McMullan

W. Wesley McMullan
President and Chief Executive Officer