Declining interest rates battered the income statements of most of the Federal Home Loan Banks last year as the system overall reported a hefty 17 percent drop in net income for 2002, the FHLBanks’ Office of Finance reported this week. According to the new annual financial report, the FHLBanks reported $1.80 billion in net income last year. Not only was that down from 2001’s $2.15 billion in net income, but it was the lowest