v3.25.2
Fair Values (Notes)
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Values FAIR VALUES
The fair value amounts recorded on the Statements of Condition and presented in the note disclosures have been determined by FHLBank using available market and other pertinent information and reflect FHLBank’s best judgment of appropriate valuation methods. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., an exit price). Although FHLBank uses its best judgment in estimating the fair value of its financial instruments, there are inherent limitations in any valuation technique. Therefore, the fair values may not be indicative of the amounts that would have been realized in market transactions as of June 30, 2025 and December 31, 2024. Additionally, these values do not represent an estimate of the overall market value of FHLBank as a going concern, which would take into account future business opportunities and the net profitability of assets and liabilities.

Subjectivity of Estimates: Estimates of the fair value of advances with options, mortgage instruments, and derivatives with embedded options are subjective and require judgments regarding significant matters such as the amount and timing of future cash flows, prepayment speed assumptions, expected interest rate volatility, methods to determine possible distributions of future interest rates used to value options, and the selection of discount rates that appropriately reflect market and credit risks. The use of different assumptions could have a material effect on the fair value estimates.

Fair Value Hierarchy: The fair value hierarchy requires FHLBank to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The inputs are evaluated and an overall level for the fair value measurement is determined. This overall level is an indication of the market observability of the fair value measurement for the asset or liability. FHLBank must disclose the level within the fair value hierarchy in which the measurements are classified for all assets and liabilities.

The fair value hierarchy prioritizes the inputs used to measure fair value into three broad levels:
•Level 1 Inputs – Quoted prices (unadjusted) for identical assets or liabilities in active markets that FHLBank can access on the measurement date. An active market for the asset or liability is a market in which the transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
•Level 2 Inputs – Inputs other than quoted prices within Level 1 that are observable inputs for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 2 inputs include the following: (1) quoted prices for similar assets and liabilities in active markets; (2) quoted prices for similar assets and liabilities in markets that are not active; (3) inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves that are observable at commonly quoted intervals and implied volatilities); and (4) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
•Level 3 Inputs – Unobservable inputs for the asset or liability. Valuations are derived from techniques that use significant assumptions not observable in the market, which include pricing models, discounted cash flow models using an unobservable discount rate, or similar techniques.

FHLBank reviews its fair value hierarchy classifications on a quarterly basis. Changes in the observability of the valuation inputs may result in a reclassification of certain assets or liabilities. There were no transfers of assets or liabilities between fair value levels during the three and six months ended June 30, 2025 and 2024.

Tables 12.1 and 12.2 present the carrying value, fair value and fair value hierarchy of financial assets and liabilities as of June 30, 2025 and December 31, 2024. FHLBank records trading securities, available-for-sale securities, derivative assets, and derivative liabilities at fair value on a recurring basis, and on occasion certain mortgage loans held for portfolio and certain other assets at fair value on a nonrecurring basis. FHLBank measures all other financial assets and liabilities at amortized cost. Further details about the financial assets and liabilities held at fair value on either a recurring or non-recurring basis are presented in Tables 12.3 and 12.4.
The carrying value, fair value and fair value hierarchy of FHLBank’s financial assets and liabilities as of June 30, 2025 and December 31, 2024 are summarized in Tables 12.1 and 12.2 (in thousands):

Table 12.1
 06/30/2025
 Carrying
Value		Total
Fair
Value		Level 1Level 2Level 3
Netting
Adjustment and Cash
Collateral1
Assets:      
Cash and due from banks$25,078 $25,078 $25,078 $— $— $— 
Interest-bearing deposits2,287,805 2,287,805 — 2,287,805 — — 
Securities purchased under agreements to resell
4,400,000 4,400,000 — 4,400,000 — — 
Federal funds sold3,906,000 3,906,000 — 3,906,000 — — 
Trading securities153,520 153,520 — 153,520 — — 
Available-for-sale securities14,118,577 14,118,577 — 14,070,339 48,238 — 
Held-to-maturity securities203,895 202,124 — 172,746 29,378 — 
Advances45,040,514 45,075,357 — 45,075,357 — — 
Mortgage loans held for portfolio, net of allowance
9,180,578 8,405,889 — 8,399,747 6,142 — 
Accrued interest receivable262,750 262,750 — 262,750 — — 
Derivative assets351,738 351,738 — 127,094 — 224,644 
Liabilities:      
Deposits1,035,255 1,035,254 — 1,035,254 — — 
Consolidated obligation discount notes
9,530,052 9,529,409 — 9,529,409 — — 
Consolidated obligation bonds64,732,483 64,073,019 — 64,073,019 — — 
Mandatorily redeemable capital stock
6,081 6,081 6,081 — — — 
Accrued interest payable437,246 437,246 — 437,246 — — 
Derivative liabilities2,407 2,407 — 176,624 — (174,217)
Other Asset (Liability):      
Industrial revenue bonds35,000 33,803 — 33,803 — — 
Financing obligation payable(35,000)(33,803)— (33,803)— — 
                   
1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.
Table 12.2
 12/31/2024
 Carrying
Value		Total
Fair
Value		Level 1Level 2Level 3
Netting
Adjustment
and Cash
Collateral1
Assets:      
Cash and due from banks$25,575 $25,575 $25,575 $— $— $— 
Interest-bearing deposits2,142,423 2,142,423 — 2,142,423 — — 
Securities purchased under agreements to resell
5,150,000 5,150,000 — 5,150,000 — — 
Federal funds sold3,575,000 3,575,000 — 3,575,000 — — 
Trading securities439,963 439,963 — 439,963 — — 
Available-for-sale securities13,057,619 13,057,619 — 13,033,440 24,179 — 
Held-to-maturity securities219,826 217,476 — 187,027 30,449 — 
Advances41,652,081 41,678,915 — 41,678,915 — — 
Mortgage loans held for portfolio, net of allowance
8,949,433 8,003,324 — 8,001,989 1,335 — 
Accrued interest receivable249,199 249,199 — 249,199 — — 
Derivative assets357,314 357,314 — 95,683 — 261,631 
Liabilities:
Deposits989,021 989,023 — 989,023 — — 
Consolidated obligation discount notes
14,417,047 14,419,420 — 14,419,420 — — 
Consolidated obligation bonds55,864,506 55,000,797 — 55,000,797 — — 
Mandatorily redeemable capital stock
3,225 3,225 3,225 — — — 
Accrued interest payable347,843 347,843 — 347,843 — — 
Derivative liabilities6,131 6,131 — 226,367 — (220,236)
Other Asset (Liability):
Industrial revenue bonds35,000 33,112 — 33,112 — — 
Financing obligation payable(35,000)(33,112)— (33,112)— — 
                   
1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.
Fair Value Measurements: Tables 12.3 and 12.4 present, for each hierarchy level, FHLBank’s assets and liabilities that are measured at fair value on a recurring or nonrecurring basis on the Statements of Condition as of or for the periods ended June 30, 2025 and December 31, 2024 (in thousands).

Table 12.3
06/30/2025
TotalLevel 1Level 2Level 3
Netting
Adjustment and Cash
Collateral1
Recurring fair value measurements - Assets:
Trading securities:
GSE MBS
$153,520 $— $153,520 $— $— 
Total trading securities153,520 — 153,520 — — 
Available-for-sale securities:
U.S. Treasury obligations3,301,912 — 3,301,912 — — 
U.S. obligation MBS67,487 — 67,487 — — 
GSE MBS10,700,940 — 10,700,940 — — 
State or local housing agency obligations
48,238 — — 48,238 — 
Total available-for-sale securities14,118,577 — 14,070,339 48,238 — 
Derivative assets:     
Interest-rate related351,171 — 126,527 — 224,644 
Mortgage delivery commitments567 — 567 — — 
Total derivative assets351,738 — 127,094 — 224,644 
TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS
$14,623,835 $— $14,350,953 $48,238 $224,644 
Recurring fair value measurements - Liabilities:
Derivative liabilities:
Interest-rate related$2,406 $— $176,623 $— $(174,217)
Mortgage delivery commitments1 — 1 — — 
Total derivative liabilities2,407 — 176,624 — (174,217)
TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES
$2,407 $— $176,624 $— $(174,217)
Nonrecurring fair value measurements - Assets2:
Impaired mortgage loans$6,214 $— $— $6,214 $— 
Real estate owned72 — — 72 — 
TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS
$6,286 $— $— $6,286 $— 
                   
1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.
2    Includes assets adjusted to fair value during the six months ended June 30, 2025 and still outstanding as of June 30, 2025.
Table 12.4
12/31/2024
TotalLevel 1Level 2Level 3
Netting
Adjustment
and Cash
Collateral1
Recurring fair value measurements - Assets:
Trading securities:
GSE debentures$17,884 $— $17,884 $— $— 
GSE MBS
422,079 — 422,079 — — 
Total trading securities439,963 — 439,963 — — 
Available-for-sale securities:
U.S. Treasury obligations3,237,223 — 3,237,223 — — 
U.S. obligation MBS77,263 — 77,263 — — 
GSE MBS9,718,954 — 9,718,954 — — 
State or local housing agency obligations
24,179 — — 24,179 — 
Total available-for-sale securities13,057,619 — 13,033,440 24,179 — 
Derivative assets:
Interest-rate related357,284 — 95,653 — 261,631 
Mortgage delivery commitments30 — 30 — — 
Total derivative assets357,314 — 95,683 — 261,631 
TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS
$13,854,896 $— $13,569,086 $24,179 $261,631 
Recurring fair value measurements - Liabilities:
Derivative liabilities:
Interest-rate related$6,058 $— $226,294 $— $(220,236)
Mortgage delivery commitments73 — 73 — — 
Total derivative liabilities6,131 — 226,367 — (220,236)
TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES
$6,131 $— $226,367 $— $(220,236)
Nonrecurring fair value measurements - Assets2:
Impaired mortgage loans$1,350 $— $— $1,350 $— 
TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS
$1,350 $— $— $1,350 $— 
                   
1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.
2    Includes assets adjusted to fair value during the year ended December 31, 2024 and still outstanding as of December 31, 2024.
Level 3 Disclosure for Assets Measured at Fair Value on a Recurring Basis: Table 12.5 presents a rollforward of assets and liabilities measured at fair value on a recurring basis and classified as Level 3 during the three and six months ended June 30, 2025 and 2024 (in thousands).

Table 12.5

Available-for-sale securities - State or local housing agency obligationsThree Months EndedSix Months Ended
06/30/202506/30/202406/30/202506/30/2024
Balance, beginning of the period
$48,719 $— $24,179 $— 
Included in net unrealized gains (losses) on available-for-sale securities in OCI
(481)— 314 — 
Purchases
— — 23,860 — 
Settlements— — (115)— 
Balance, end of the period
$48,238 $— $48,238 $— 
Total amount of unrealized gains (losses) for the period included in OCI relating to assets held at period end
$28 $— $28 $—