The FHLBank System’s outstanding advances fell to $479 billion in the third quarter, down from $557.55 billion in 2Q and $806.94 billion in 1Q. Borrowings by insurance companies were unchanged. (Includes two data charts.)

The third-quarter gain in combined FHLBank profits came despite a slightly lower net interest income, which fell to $1.17 billion from $1.25 billion in the second quarter. (Includes data chart.)

As of the end of August, eight individuals had either been indicted or charged in criminal complaints related to PPP fraud.

An economist finds that, when community banks gain access to FHLB advances, competition in local markets increases significantly, with mortgage rates in the market falling by an average of 8 bps.

As funding sources dried up late in the first quarter, members sharply increased their FHLB advances. But when financial markets stabilized in the second quarter, these short-term loans weren’t replaced. (Includes two data charts.)

The bright spot in the FHLBanks’ earnings report was net interest income, which climbed to $1.25 billion 2Q20, a 36.4% sequential increase, despite the fact that advances declined by almost 31%. (Includes data chart.)

Although the FHLBanks market themselves as local lenders, this image doesn’t match their operations. Ten of the nation’s largest commercial banks account for about 30% of FHLBank advances.

The MBA argues that FHLB advances would offer REITs a cheap alternative to repo financing. One way to offset the added risk posed by REITs would be to increase the haircuts on their collateral requirements.

The final rule sets the goal for prospective mortgage purchases at 20% of each FHLBank’s Acquired Member Assets program.

Borrowings by members of the Federal Home Loan Bank System increased 25.8% in the first quarter driven by COVID-19-related volatility. On the other end, the FHLBanks reported a huge drop in combined earnings with the San Francisco FHLB incurring a first-quarter loss.