Chief Marketing Officer
Assistant Director of Corporate Communications
ATLANTA, August 12, 2009 - Federal Home Loan Bank of Atlanta (the Bank) today released the results for the quarter ended June 30, 2009.
The Bank reported net income of $191.7 million for the second quarter of 2009, an increase of $83.0 million, or 76.4 percent, from net income of $108.7 million for the second quarter of 2008. The increase in net income during the period was due primarily to a $181.8 million increase in net gains on derivatives and hedging activities and a $114.6 million decrease in net losses on trading securities, offset by a $136.7 million decrease in net interest income, the recording of net impairment losses in earnings of $46.2 million, and a $29.9 million increase in total assessments.
As of June 30, 2009, the Bank had total assets of $170.2 billion, a decrease of $38.4 billion, or 18.4 percent, from Dec. 31, 2008. This decrease was primarily a result of a $31.4 billion, or 18.9 percent, decrease in advances and a $4.7 billion, or 20.2 percent, decrease in held-to-maturity securities during the period. Advances, the largest asset on the Bank’s balance sheet, decreased during the period due to maturing advances and decreased demand for advances by the Bank’s members.
The decrease in held-to-maturity securities during the period was due primarily to $2.5 billion in proceeds received for principal repayments and maturities, the Bank’s continued decline in its purchase of mortgage-backed securities, and total other-than-temporary-impairment losses of $865.0 million recorded on held-to-maturity securities.
“The quarterly performance reflects positive operating results with lower other-than-temporary-impairment losses on the Bank’s mortgage securities investments and improved funding costs,” said Richard A. Dorfman, the Bank’s President and Chief Executive Officer.
The Bank recorded net income of $190.2 million for the first six months of 2009, a decrease of $35.1 million, or 15.6 percent, from net income of $225.3 million for the same period in 2008. The decrease in net income during the period was due primarily to a $308.7 million decrease in net interest income, the recording of net impairment losses on private-label MBS recognized in earnings of $135.1 million, and a $25.6 million increase in net losses on trading securities, offset by a $423.2 million increase in net gains on derivatives and hedging activities, and a $12.6 million decrease in total assessments.
The 2009 second quarter performance resulted in an annualized return on equity (ROE) of 10.3 percent for the Bank as compared to 5.13 percent for the second quarter of 2008, primarily as a result of increased net income and decreased capital. The ROE spread to three-month average LIBOR increased between the periods, equaling 9.50 percent for the second quarter of 2009 as compared to 2.38 percent for the second quarter of 2008. The increase in this spread was due primarily to the increased ROE during the period. The Bank’s retained earnings balance was $803.6 million as of June 30, 2009, an increase of $368.7 million, or 84.8 percent, from Dec. 31, 2008. The increase in retained earnings was due to the adoption of FSP FAS 115-2 and FAS 124-2 as of Jan. 1, 2009, which resulted in a $178.5 million cumulative effect adjustment to retained earnings (increase) and the recording of $190.2 million in net income for the first six months of 2009.
The Bank filed its full financial report on Form 10-Q on Aug. 12, 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 $3.6 billion to the Affordable Housing Program.
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