Chief Marketing Officer
Assistant Director of Corporate Communications
ATLANTA, May 15, 2009 - Federal Home Loan Bank of Atlanta (the Bank) today released the results for the quarter ended March. 31, 2009.
As of March 31, 2009, the Bank had total assets of $189.4 billion, a decrease of $19.1 billion, or 9.17 percent, from Dec. 31, 2008. This decrease was primarily a result of a $17.8 billion, or 10.7 percent decrease, in advances during the first quarter of 2009. Advances, the largest asset on the Bank’s balance sheet, decreased during the period due to maturing advances, decreased demand for advances by the Bank’s members, and government programs that provide members with alternate sources of funding.
The Bank reported a net loss of $1.5 million for the first quarter of 2009, a decrease of $118.1 million, or 101.3 percent, from net income of $116.6 million for the first quarter of 2008. The decrease in net income during the period was due primarily to a $172 million decrease in net interest income and the recording of net impairment losses recognized in earnings of $88.9 million, offset by a $101.1 million in net gain on derivatives and hedging activities and trading securities, and a $42.5 million decrease in total assessments.
“The performance for the quarter largely reflects recent changes in the way the Bank accounts for the other-than-temporary impairment of its mortgage-backed securities as well as de-leveraging that is prevalent in the broader market,” said Richard A. Dorfman, the Bank’s President and Chief Executive Officer. “The Bank remains a solid and stable funding source for member institutions, and while we continue to take measures to protect capital in the short-term, the Bank also is focused on taking steps that, in the longer-term, we believe will allow us to return to offering a competitive return on members’ investment in the Bank.”
The 2009 first quarter performance resulted in an annualized return on equity (ROE) of negative 0.08 percent for the Bank as compared to a positive 5.72 percent for the first quarter of 2008. The ROE spread to three-month average LIBOR decreased between the periods, equaling negative 1.32 percent for the first quarter of 2009 as compared to positive 2.43 percent for the first quarter of 2008. The decrease in this spread was due primarily to a $118.1 million decrease in net income during the period, resulting in a decrease in ROE and ROE spread to three-month average LIBOR.
The Bank’s retained earnings balance was $611.9 million as of March 31, 2009, an increase of $177 million, or 40.7 percent, from Dec. 31, 2008. The increase in retained earnings was due to the adoption of new accounting standards related to the determination of other-than-temporary impairment of debt securities as of Jan. 1, 2009, which resulted in a $178.5 million cumulative effect adjustment to retained earnings and other comprehensive income (loss) as of the date of adoption, and the recording of $609.3 million related to the noncredit portion of other-than-temporary impairment losses in other comprehensive income (loss) as of the date of adoption.
The Bank filed its full financial report on Form 10-Q on May 15, 2009.
About FHLBank Atlanta
FHLBank Atlanta offers competitively-priced financing, community development grants, and other banking services to help more than 1,200 member financial institutions make affordable home mortgages and provide economic development credit to neighborhoods and communities. The Bank’s members—its shareholders and customers—are commercial banks, credit unions, savings institutions, thrift and loans, and insurance companies headquartered in Alabama, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and the District of Columbia. FHLBank Atlanta is one of 12 district banks in the Federal Home Loan Bank System which since 1990 has contributed more than $3 billion to the Affordable Housing Program.
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Some of the statements made in this announcement, including, without limitation, those statements that relate to the Bank’s financial results, are “forward-looking statements,” which include statements with respect to the Bank’s beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, many of which may be beyond the Bank’s control, and which may cause the Bank’s actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by the forward-looking statements.
The forward-looking statements may not be realized due to a variety of factors, including, without limitation: legislative and regulatory actions, changes or approvals; future economic and market conditions (including the housing market and the market for mortgage-backed securities); changes in demand for advances or consolidated obligations of the Bank and/or the FHLBank System; changes in interest rates and prepayment speeds, default rates, delinquencies and losses on mortgage-backed securities; political, national and world events; and adverse developments or events affecting or involving other Federal Home Loan Banks or the FHLBank System in general. Additional factors that might cause the Bank’s results to differ from these forward-looking statements are provided in detail in our filings with the Securities and Exchange Commission, which are available at www.sec.gov.
New factors may emerge from time to time, and it is not possible for us to predict the nature, or assess the potential impact, of each new factor on our business and financial condition. Given these uncertainties, we caution you not to place undue reliance on forward-looking statements. These statements speak only as of the date that they are made, and the Bank has no obligation and does not undertake to publicly update, revise or correct any of the forward-looking statements after the date of this announcement, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events or otherwise, except as may be required by law.
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