The Federal Home Loan Bank Office of Finance announced late last week that preliminary combined net income for the FHLBanks fell 64 percent to $251 million in the second quarter, down from $698 million at the end of the fourth quarter 2010 and a drop of 23 percent from the same period last year.The FHLBank system’s lower profitability, which has been dwindling each quarter since the third quarter 2010 high of $732 million, was driven by a decline in yields on interest-bearing liabilities, as well as lower average balances of interest-earning assets and interest-bearing liabilities, said the Office of Finance.