v3.26.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2026
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
Joint and several liability. The Bank is jointly and severally liable with the other 10 FHLBanks for the payment of principal and interest on all of the consolidated obligations issued by the FHLBanks. At March 31, 2026, the par amount of the other 10 FHLBanks’ outstanding consolidated obligations was approximately $1.116 trillion. The Finance Agency, in its discretion, may require any FHLBank to make principal or interest payments due on any consolidated obligation, regardless of whether there has been a default by a FHLBank having primary liability. To the extent that a FHLBank makes any consolidated obligation payment on behalf of another FHLBank, the paying FHLBank is entitled to reimbursement from the FHLBank with primary liability. However, if the Finance Agency determines that the primary obligor is unable to satisfy its obligations, then the Finance Agency may allocate the outstanding liability among the remaining FHLBanks on a pro rata basis in proportion to each FHLBank’s participation in all consolidated obligations outstanding, or on any other basis that the Finance Agency may determine. No FHLBank has ever failed to make any payment on a consolidated obligation for which it was the primary obligor; as a result, the regulatory provisions for directing other FHLBanks to make payments on behalf of another FHLBank or allocating the liability among other FHLBanks have never been invoked. If the Bank expected that it would be required to pay any amounts on behalf of its co-obligors under its joint and several liability, the Bank would charge to income the amount of
the expected payment. Based upon the creditworthiness of the other FHLBanks, the Bank currently believes that the likelihood that it would have to pay any amounts beyond those for which it is primarily liable is remote.
Other commitments and contingencies. At March 31, 2026 and December 31, 2025, the Bank had commitments to make additional advances totaling approximately $37,507,000 and $2,336,000, respectively. In addition, outstanding standby letters of credit totaled $30,853,503,000 and $33,099,489,000 at March 31, 2026 and December 31, 2025, respectively. Based on management’s credit analyses and collateral requirements, the Bank does not deem it necessary to have any provision for credit losses on these letters of credit (see Note 9).
The Bank has entered into standby bond purchase agreements with a state housing finance agency within its district. Each standby bond purchase agreement includes the provisions under which the Bank would be required to purchase the bonds. At both March 31, 2026 and December 31, 2025, the Bank had outstanding standby bond purchase agreements totaling $929,869,000. At March 31, 2026, standby bond purchase agreements totaling $127,801,000, $139,107,000, $329,303,000, $253,088,000 and $80,570,000 expire in 2027, 2028, 2029, 2030 and 2031, respectively. The Bank was not required to purchase any bonds under these agreements during the three months ended March 31, 2026.
At March 31, 2026 and December 31, 2025, the Bank had commitments to purchase conventional mortgage loans totaling $42,890,000 and $25,952,000, respectively, from certain of its members that participate in the MPF program.
At March 31, 2026 and December 31, 2025, the Bank had commitments to issue $125,000,000 and $530,000,000 (par value), respectively, of consolidated obligation bonds. In addition, at March 31, 2026 and December 31, 2025, the Bank had commitments to issue $1,362,620,000 and $1,008,320,000 (par value), of consolidated obligation discount notes, respectively.
The Bank has transacted interest rate exchange agreements with large financial institutions and third-party clearinghouses that are subject to collateral exchange arrangements. As of March 31, 2026 and December 31, 2025, the Bank had pledged cash collateral of $256,981,000 and $335,802,000, respectively, to those parties that had credit risk exposure to the Bank related to interest rate exchange agreements. The pledged cash collateral (i.e., interest-bearing deposit asset) is netted against derivative assets and liabilities in the statements of condition. In addition, as of March 31, 2026 and December 31, 2025, the Bank had pledged securities with carrying values (and fair values) of $347,962,000 and $475,374,000, respectively, to parties that had credit risk exposure to the Bank related to interest rate exchange agreements. None of the pledged securities are netted against derivative assets and liabilities in the statements of condition.
In the ordinary course of its business, the Bank is subject to the risk that litigation may arise. Currently, the Bank is not a party to any material pending legal proceedings.