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H.S. junior Avg
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New words:
Aaa, acknowledge, AIG, Alliance, Anavajjala, Annavajjala, Aon, arrive, Automobile, blueprint, bolster, break, Brett, bridge, Casualty, CBGG, CDSFP, CFI, Charterholder, CIO, circumvent, CISO, CODM, configuration, contagion, CRO, cybersecurity, dashboard, deceptive, Deloitte, departure, destabilizing, devastated, devastation, Digital, dissipated, double, drought, easier, emanating, expended, exploitation, Garrison, haircut, HPP, incident, Indemnity, Infrastructure, intelligence, involuntarily, Karuna, landscape, lender, maker, malware, modest, Netmap, NIST, nondepository, OROC, patch, patching, penetration, persisted, phishing, pilot, plc, realignment, recalculated, redefined, Reinsurance, resort, safeguard, sea, seamlessly, secondarily, semiannually, Seybold, Silicon, SOC, Sol, TIAA, tool, Topeka, Transformation, unduly, unfair, upcoming, user, viability, weather, wholly, withstand
Removed:
accommodate, Aid, Akin, Alumni, ARM, Belen, Birdville, bound, broader, CAA, capitalization, categorized, Ceverha, close, collectibility, commodity, compelling, complied, conform, considerable, Dickason, directed, disadvantage, dissolution, dissolve, dramatically, Equality, excellence, Expander, Export, FICO, forbearance, formed, Forum, GAHP, hardship, harmed, Hispano, Industrial, ISD, junior, KIMO, land, leg, Legend, lost, lowered, Mary, meaningful, moderately, modernization, noting, outbreak, outreach, partial, passage, persuading, phase, posed, positioned, predominately, Princeton, proforma, publishing, reactivated, reactivating, redesignated, rehypothecated, replaced, restore, Richland, Robb, Rodey, Ron, satisfying, SecureConnect, securitization, sexual, Sloan, standardized, stop, TDR, Tech, tested, townhall, tutoring, unchanged, undertaken, union, unrated, unscheduled, violence, volatile, waiver, wealth, Weatherford, Wiser, working
Financial report summary
?Risks
- A prolonged downturn in the economy, including the U.S. housing market, and related U.S. government monetary policies, could adversely affect our business activities and results of operations.
- Our profitability is vulnerable to interest rate fluctuations.
- Our profitability may be adversely affected if we are not successful in managing our interest rate risk.
- Exposure to credit risk from our customers could have a negative impact on our profitability and financial condition.
- Exposure to credit risk on our investments and MPF loans could have a negative impact on our profitability and financial condition.
- Defaults by or the insolvency of one or more of our derivative counterparties could adversely affect our profitability and financial condition.
- Changes in overall credit market conditions and/or competition for funding may adversely affect our cost of funds and our access to the capital markets.
- Our inability to issue consolidated obligations for a relatively short period of time could jeopardize our ability to continue operating.
- An interruption in our access to the capital markets would limit our ability to obtain funds.
- Changes in investors’ perceptions of the creditworthiness of the FHLBanks may adversely affect our ability to issue consolidated obligations on favorable terms.
- Changes in our access to the interest rate derivatives market on acceptable terms may adversely affect our ability to maintain our current hedging strategies.
- Loss of members or borrowers could adversely affect our earnings, which could result in lower investment returns and/or higher borrowing rates for remaining members.
- Members’ funding needs may decline, which could reduce loan demand and adversely affect our earnings.
- We face competition for loan demand, which could adversely affect our earnings.
- Changes in the regulatory environment could negatively impact our operations and financial results and condition.
- Finance Agency authority to approve changes to our capital plan and to impose other restrictions and limitations on us and our capital management may adversely affect members.
- Limitations on our ability to pay dividends could result in lower investment returns for members.
- Lack of a public market and restrictions on transferring our stock could result in an illiquid investment for the holder.
- Failure by a member to comply with our minimum investment requirement could result in substantial penalties to that member and could cause us to fail to meet our capital requirements.
- An increase in our AHP contribution rate could adversely affect our ability to grow our retained earnings and/or pay dividends to our shareholders.
- The terms of any liquidation, merger or consolidation involving us may have an adverse impact on members’ investments in us.
- A failure or interruption in our information systems or other technology may adversely affect our ability to conduct and manage our business effectively.
- Failures of critical vendors or other third parties could disrupt our ability to conduct and manage our business
- Our inability to attract and retain skilled labor could adversely affect our business and operations
- A natural or man-made disaster or a pandemic, especially one affecting our region, could adversely affect our profitability and/or financial condition.
Management Discussion
- Net income for 2023, 2022 and 2021 was $874.5 million, $317.2 million and $164.4 million, respectively. The Bank’s net income for 2023 represented a return on average capital stock (“ROCS”) of 15.42 percent. In comparison, the Bank’s ROCS was 11.02 percent in 2022 and 7.72 percent in 2021. To derive the Bank’s ROCS, net income is divided by average capital stock outstanding excluding stock that is classified as mandatorily redeemable capital stock. The factors contributing to the changes in the Bank's net income from 2022 to 2023 are discussed below. The factors contributing to the changes in the Bank's net income from 2021 to 2022 are discussed in the 2022 10-K.
- While the Bank is exempt from all federal, state and local income taxes, it is obligated to set aside 10 percent of its income before assessments (adjusted for interest expense on mandatorily redeemable capital stock) for its AHP. The AHP provides grants that members can use to support affordable housing projects in their communities. Generally, the Bank’s AHP assessment is derived by adding interest expense on mandatorily redeemable capital stock to income before assessments; the result of this calculation is then multiplied by 10 percent. For the years ended December 31, 2023 and 2022, the Bank’s AHP assessments totaled $97.2 million and $35.3 million, respectively. In each of these years, the effective assessment rate closely approximated 10 percent. Because interest expense on mandatorily redeemable capital stock is not deductible for purposes of computing the Bank’s AHP assessment, the effective assessment rate could exceed 10 percent in future periods.
- During 2023 and 2022, the Bank’s income before assessments was $971.7 million and $352.5 million, respectively. The $619.2 million increase in income before assessments for 2023 as compared to 2022 was attributable to a $538.2 million increase in net interest income after provision/reversal for mortgage loan losses and a $117.2 million favorable change in other income (loss) partially offset by a $36.3 million increase in other expenses. The components of income before assessments (net interest income after provision/reversal for mortgage loan losses, other income/loss and other expense) are discussed in more detail in the following sections.