Federal Home Loan Bank of Topeka

05/07/2026 | Press release | Distributed by Public on 05/07/2026 12:29

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to assist the reader in understanding our business and assessing our operations both historically and prospectively. This discussion should be read in conjunction with our interim financial statements and related notes presented under Part I, Item 1 of this quarterly report on Form 10-Q and the annual report on Form 10-K for the year ended December 31, 2025, which includes audited financial statements and related notes for the year ended December 31, 2025. Our MD&A includes the following sections:
•Selected Financial Data - a tabular summary of selected balances, financial ratios and other financial information;
•Executive Level Overview - a general description of our business and financial highlights;
•Financial Market Trends - a discussion of current trends in the financial markets and overall economic environment, including the related impact on our operations;
•Critical Accounting Policies and Estimates - a discussion of accounting policies that require critical estimates and assumptions;
•Results of Operations - an analysis of our operating results, including disclosures about the sustainability of our earnings;
•Financial Condition - an analysis of our financial position;
•Liquidity and Capital Resources - an analysis of our cash flows and capital position;
•Risk Management - a discussion of our risk management strategies;
•Recently Issued Accounting Standards; and
•Legislative and Regulatory Developments.
Executive Level Overview
Table 1 presents selected financial data for the periods indicated (dollar amounts in thousands):
Table 1
03/31/2026 12/31/2025 09/30/2025 06/30/2025 03/31/2025
Statement of Condition (as of period end):
Total assets $ 81,254,233 $ 77,505,029 $ 79,872,254 $ 80,012,268 $ 74,721,503
Advances 47,314,100 43,667,540 44,029,112 45,040,514 41,440,764
Mortgage loans, net 9,423,774 9,351,305 9,284,317 9,180,578 9,016,747
Short-term liquidity investments1
8,736,707 8,910,137 10,910,963 10,593,805 9,288,627
Investment securities
15,055,808 14,834,298 14,908,747 14,475,992 14,266,884
Total liabilities 76,826,416 73,317,391 75,724,983 75,917,039 70,668,605
Deposits 1,410,778 909,553 1,046,036 1,035,255 1,002,036
Consolidated obligations, net2
74,893,362 71,857,035 74,106,526 74,262,535 69,075,542
Total capital 4,427,817 4,187,638 4,147,271 4,095,229 4,052,898
Capital stock 2,713,586 2,510,362 2,555,364 2,587,064 2,525,475
Retained earnings 1,806,347 1,763,624 1,726,021 1,689,316 1,651,894
Statement of Income (for the quarterly period ended):
Net interest income 132,492 136,317 131,714 139,516 132,727
Other income (loss) 4,496 3,095 4,977 2,816 3,520
Voluntary housing and community investment program contributions3
383 9,730 7,364 10,965 1,045
Other expenses 26,357 28,027 25,831 25,255 24,763
Income before assessments 109,337 101,693 104,346 105,360 110,331
AHP assessments
10,945 10,181 10,447 10,543 11,039
Net income 98,392 91,512 93,899 94,817 99,292
Selected Financial Ratios and Other Financial Data (for the quarterly period ended):
Total average interest-earning assets
81,891,203 78,660,346 81,750,993 81,282,584 77,807,034
Average advances
46,594,106 43,561,465 46,770,546 47,245,357 44,182,977
Total average interest-bearing liabilities
77,059,821 74,075,557 76,979,163 76,489,318 73,169,661
Dividends paid 55,668 53,909 57,194 57,395 55,484
Weighted average dividend rate4
8.57 % 8.55 % 8.65 % 8.59 % 8.81 %
Dividend payout ratio5
56.58 % 58.91 % 60.91 % 60.53 % 55.88 %
Return on average equity 9.12 % 8.74 % 8.89 % 9.03 % 9.86 %
Return on average assets
0.49 % 0.46 % 0.45 % 0.47 % 0.52 %
Average equity to average assets 5.32 % 5.26 % 5.11 % 5.16 % 5.23 %
Net interest margin6
0.66 % 0.69 % 0.64 % 0.69 % 0.69 %
Total capital ratio7
5.45 % 5.40 % 5.19 % 5.12 % 5.42 %
Regulatory capital ratio8
5.57 % 5.52 % 5.37 % 5.35 % 5.59 %
1 Includes interest-bearing deposits, securities purchased under agreements to resell, and Federal funds sold.
2 Consolidated obligations are bonds and discount notes that we are primarily liable to repay. See Note 12 to the financial statements for a description of the par amount of consolidated obligations of all FHLBanks for which we are jointly and severally liable.
3 Voluntary housing and community investment program contributions are expensed in the period they are approved by the board of directors and/or awarded.
4 Dividends paid in cash and stock on both classes of stock as a percentage of average capital stock eligible for dividends.
5 Ratio disclosed represents dividends declared and paid during the period as a percentage of net income for the period presented. FHFA regulation requires that dividends be paid out of known income prior to declaration date.
6 Net interest income as a percentage of average earning assets.
7 GAAP capital stock, which excludes mandatorily redeemable capital stock, plus retained earnings and accumulated other comprehensive income as a percentage of total assets.
8 Regulatory capital (i.e., permanent capital and Class A Common Stock) as a percentage of total assets.
Performance Highlights:
•Total Assets: Total assets increased to $81.3 billion driven by a $3.6 billion increase in advances.
•Primary Mission Assets: The Primary Mission Asset ratio measures year-to-date average advances and mortgage loans relative to consolidated obligations (excluding certain U.S. Treasury securities). The ratio was 77 percent at both March 31, 2026 and December 31, 2025.
•Advances: Advances increased to $47.3 billion driven by increased utilization among large depository and insurance company members, with the majority of the growth in adjustable and line of credit products. Advances represented 58.2 percent of total assets, compared to 56.3 percent at prior year end.
•Mortgage loans: Mortgage loans increased to $9.4 billion, representing 11.6 percent of total assets, compared to 12.1 percent at prior year end.
•Investment securities: Investment securities increased to $15.1 billion, driven by purchases of multifamily mortgage-backed securities. Investment securities represented 18.5 percent of total assets compared to 19.1 percent at prior year end.
•Net Income: Net income was relatively flat year over year despite the increase in assets, decreasing $0.9 million to $98.4 million for the quarter ended March 31, 2026 compared to $99.3 million for the prior year quarter.
•Net interest income/margin: Net interest income was $132.5 million for the quarter ended March 31, 2026, $0.2 million lower than the prior year quarter. The decline in net interest income was driven by the impact of lower short-term interest rates on fair value hedges and variable rate instruments, almost entirely offset by higher average balances of interest-earning assets. Net interest margin decreased three basis points to 0.66 percent for the quarter, while net interest spread remained unchanged at 0.44 percent between quarterly periods. The margin decline reflects the increase in lower-spread assets during the quarter.
•Performance ratios: Return on average equity decreased to 9.1 percent for the current quarter compared to 9.9 percent for the prior year quarter. The decrease reflects lower net income and higher average balance of capital stock resulting from increased advance utilization.
Financial Market Trends
The primary external factors that affect net interest income are market interest rates and the general state of the economy, as discussed in greater detail below.
General discussion of the level of market interest rates:
Table 2 presents selected market interest rates as of the dates or for the periods shown.
Table 2
03/31/2026 03/31/2025 03/31/2026 12/31/2025
Market Instrument Three-month Three-month Ending Ending
Average Average Rate Rate
SOFR1
3.66 % 4.33 % 3.68 % 3.87 %
Federal funds effective rate1
3.64 4.33 3.64 3.64
Federal Reserve interest rate on reserve balances1
3.65 4.40 3.65 3.65
3-month U.S. Treasury bill1
3.67 4.30 3.68 3.63
2-year U.S. Treasury note1
3.58 4.16 3.79 3.47
5-year U.S. Treasury note1
3.77 4.26 3.94 3.73
10-year U.S. Treasury note1
4.19 4.46 4.32 4.17
30-year residential mortgage note rate1,2
6.24 6.88 6.57 6.32
1 Source is Bloomberg.
2 Mortgage Bankers Association weekly 30-year fixed-rate mortgage contract rate.
At the April 2026 meeting, the Federal Open Market Committee (FOMC) of the Federal Reserve held steady the target range for the federal funds rate at the range of 3.50 percent to 3.75 percent, noting elevated inflation and uncertainty about the implications of the conflict in Iran on the economic outlook. Future adjustments to the target range for the Federal funds rate will depend on incoming data, the evolving outlook, and the balance of risks associated with adjustments to interest rates. Geopolitical tensions and market uncertainty have intensified during the first quarter of 2026, driving concerns over oil prices and supply, and contributing to heightened volatility across rates. Market access for the FHLBank System was not negatively affected by these events during the first quarter of 2026. In January 2026, the Trump administration directed Fannie Mae and Freddie Mac to purchase $200 billion of Agency MBS to help lower mortgage rates. These MBS purchases could affect our yields and spreads on mortgage loans and MBS.
For further discussion of FHLBank debt, see this Item 2 - "Financial Condition - Consolidated Obligations."
Critical Accounting Policies and Estimates
The preparation of our financial statements in accordance with GAAP requires management to make a number of judgments, estimates, and assumptions that affect our reported results and disclosures.
The accounting policies that management believes are the most critical to an understanding of our financial results and condition and require complex management judgment are described under Part II, Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in our annual report on Form 10-K for the year ended December 31, 2025, incorporated by reference herein. There were no material changes to our critical accounting policies and estimates during the quarter ended March 31, 2026.
Results of Operations
Table 3 presents changes in the major components of our net income (dollar amounts in thousands):
Table 3
Increase (Decrease) in Earnings Components
Three Months Ended
03/31/2026 vs. 03/31/2025
Dollar Change Percentage Change
Total interest income $ (67,762) (7.6) %
Total interest expense (67,527) (8.9)
Net interest income (235) (0.2)
Provision (reversal) for credit losses on mortgage loans 803 743.5
Net interest income after mortgage loan loss provision (1,038) (0.8)
Net gains (losses) on trading securities (2,533) (99.8)
Net gains (losses) on derivatives 3,197 127.0
Other non-interest income 312 8.9
Total other income (loss) 976 27.7
Operating expenses 2,045 10.5
Voluntary housing and community investment program contributions
(662) (63.3)
Other non-interest expenses (451) (8.5)
Total other expenses 932 3.6
AHP assessments (94) (0.9)
NET INCOME $ (900) (0.9) %
Net income decreased $0.9 million to $98.4 million for the quarter ended March 31, 2026 compared to $99.3 million for the quarter ended March 31, 2025 primarily attributed to a decrease in net interest income, as discussed in greater detail below.
Net Interest Income: Net interest income decreased $0.2 million, or 0.2 percent, to $132.5 million for the quarter ended March 31, 2026 compared to $132.7 million for the quarter ended March 31, 2025. Net interest income and net interest margin are impacted by balance sheet composition, market interest rates and trends, and net interest spread.
The decline in net interest income was driven by the impact of lower short-term interest rates on fair value hedges and adjustable rate instruments, almost entirely offset by a $4.1 billion increase in the average balances of interest-earning assets between quarterly periods. The average balance of advances increased $2.4 billion, primarily in adjustable rate advance products. The average balance of short- and long-term investments also increased, but yields and spreads generally declined due to lower short-term interest rates, hedging adjustments, and increased premium amortization, combined with tightening asset spreads on purchases. The average balance of mortgage loans increased between periods, and the average yield and spread improved due to purchases of loans at rates higher than the existing portfolio. Advantageous funding spreads from the fourth quarter of 2025 partially offset the impact of lower rates and tightened investment spreads.
Net interest margin decreased three basis points during the quarter, from 0.69 percent for the quarter ended March 31, 2025 to 0.66 percent for the quarter ended March 31, 2026 (see Table 6). Net interest spread, which represents the difference between the yield on interest-earning assets and the average cost of funding, was unchanged between periods at 0.44 percent despite changes in asset and debt composition and individual asset spreads. For further discussion of investments, advances and mortgage loans, see "Financial Condition" under this Item 2.
Net interest income and net interest margin are also impacted by derivative and hedging activities, as net interest settlements on derivatives, amortization/accretion of hedging activities. and the changes in fair values of hedged items and the corresponding derivative instruments designated in fair value hedging relationships are recorded in net interest income. The impact of fair value hedges on net interest income for the quarter ended March 31, 2026 was $25.3 million lower than the prior year due to declines in short-term interest rates between periods. We expect additional declines in net interest income in the remaining quarters of 2026 due to hedging adjustments on maturing swapped Treasury securities. Tables 4 and 5 present the impact of derivatives and hedging activities recorded in net interest income (in thousands):
Table 4
Three Months Ended 03/31/2026
Advances Investments Mortgage Loans Consolidated Obligation Discount Notes Consolidated Obligation Bonds Total
Unrealized gains (losses) due to fair value changes
$ 260 $ 5,505 $ - $ 370 $ 223 $ 6,358
Net amortization/accretion of hedging activities
579 - 80 - 102 761
Net interest received (paid) 14,126 16,118 - 1,049 (14,122) 17,171
Price alignment amount1
(333) (665) - 14 (11) (995)
TOTAL $ 14,632 $ 20,958 $ 80 $ 1,433 $ (13,808) $ 23,295
1 Represents the interest amount on derivative collateral for which variation margin is characterized as a daily settled contract.
Table 5
Three Months Ended 03/31/2025
Advances Investments Mortgage Loans Consolidated Obligation Discount Notes Consolidated Obligation Bonds Total
Unrealized gains (losses) due to fair value changes
$ (1,237) $ 9,526 $ - $ (116) $ (74) $ 8,099
Net amortization/accretion of hedging activities
898 - 179 - 98 1,175
Net interest received (paid) 41,069 33,502 - 642 (30,675) 44,538
Price alignment amount1
(2,153) (2,933) - 8 (93) (5,171)
TOTAL $ 38,577 $ 40,095 $ 179 $ 534 $ (30,744) $ 48,641
1 Represents the interest amount on derivative collateral for which variation margin is characterized as a daily settled contract.
Average Balances and Yields: Table 6 presents average balances and annualized yields of major earning asset categories and the sources funding those earning assets (dollar amounts in thousands):
Table 6
Three Months Ended
03/31/2026 03/31/2025
Average
Balance 		Interest
Income/
Expense 		Yield Average
Balance 		Interest
Income/
Expense 		Yield
Interest-earning assets:
Interest-bearing deposits $ 2,675,799 $ 24,212 3.67 % $ 2,754,451 $ 29,666 4.37 %
Securities purchased under agreements to resell
3,630,567 33,395 3.73 2,973,033 32,437 4.42
Federal funds sold 4,628,722 42,126 3.69 4,702,000 50,994 4.40
Investment securities1,2
14,953,314 165,911 4.50 14,174,509 182,221 5.21
Advances1,2
46,594,106 461,550 4.02 44,182,977 508,088 4.66
Mortgage loans3,4
9,373,695 96,986 4.20 8,982,286 88,506 4.00
Other interest-earning assets 35,000 175 2.03 37,778 205 2.20
Total earning assets 81,891,203 824,355 4.08 77,807,034 892,117 4.65
Other non-interest-earning assets 251,071 236,465
Total assets $ 82,142,274 $ 78,043,499
Interest-bearing liabilities:
Deposits $ 1,164,279 $ 9,710 3.38 % $ 867,812 $ 8,805 4.11 %
Consolidated obligations1:
Discount Notes 22,185,718 201,478 3.68 10,797,714 117,175 4.40
Bonds 53,656,231 480,183 3.63 61,458,385 633,018 4.18
Other borrowings 53,593 492 3.72 45,750 392 3.47
Total interest-bearing liabilities 77,059,821 691,863 3.64 73,169,661 759,390 4.21
Capital and other non-interest-bearing funds
5,082,453 4,873,838
Total funding $ 82,142,274 $ 78,043,499
Net interest income and net interest spread5
$ 132,492 0.44 % $ 132,727 0.44 %
Net interest margin6
0.66 % 0.69 %
1 Interest income/expense and average rates include the effect of associated derivatives that qualify for fair value hedge accounting treatment.
2 Interest income includes prepayment/yield maintenance fees.
3 Credit enhancement income payments made to PFIs are netted against interest earnings on the mortgage loans. The expense related to these payments was $2.0 million and $1.9 million for the three months ended March 31, 2026 and 2025, respectively.
4 Mortgage loans average balance includes outstanding principal for non-performing conventional loans. However, these loans no longer accrue interest.
5 Net interest spread is the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
6 Net interest margin is defined as net interest income as a percentage of average interest-earning assets.
Changes in the volume of interest-earning assets and the level of interest rates influence changes in net interest income, net interest spread and net interest margin. Table 7 summarizes changes in interest income and interest expense (in thousands):
Table 7
Three Months Ended
03/31/2026 vs. 03/31/2025
Increase (Decrease) Due to
Volume1,2
Rate1,2
Total
Interest Income3:
Interest-bearing deposits $ (827) $ (4,627) $ (5,454)
Securities purchased under agreements to resell 6,515 (5,557) 958
Federal funds sold (783) (8,085) (8,868)
Investment securities 9,619 (25,929) (16,310)
Advances 26,641 (73,179) (46,538)
Mortgage loans 3,947 4,533 8,480
Other assets (15) (15) (30)
Total interest-earning assets 45,097 (112,859) (67,762)
Interest Expense3:
Deposits 2,656 (1,751) 905
Consolidated obligations:
Discount notes 106,115 (21,812) 84,303
Bonds (75,177) (77,658) (152,835)
Other borrowings 70 30 100
Total interest-bearing liabilities 33,664 (101,191) (67,527)
Change in net interest income $ 11,433 $ (11,668) $ (235)
1 Changes in interest income and interest expense not identifiable as either volume-related or rate-related have been allocated to volume and rate based upon the proportion of the absolute value of the volume and rate changes.
2 Amounts used to calculate volume and rate changes are based on numbers in dollars. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same results.
3 Interest income/expense and average rates include the effect of associated derivatives that qualify for fair value hedge accounting treatment.
Net Gains (Losses) on Derivatives: Tables 8 and 9 present the earnings impact of derivatives by financial instrument as recorded in other non-interest income (in thousands):
Table 8
Three Months Ended 03/31/2026
Advances Investments Mortgage Loans Consolidated Obligation Discount Notes Consolidated Obligation Bonds
Balance Sheet
Total
Derivatives not designated as hedging instruments:
Economic hedges - unrealized gains (losses) due to fair value changes
$ 561 $ 107 $ - $ (1,919) $ 144 $ 964 $ (143)
Mortgage delivery commitments - - (1,142) - - - (1,142)
Economic hedges - net interest received (paid)
118 275 - 1,643 (72) - 1,964
Price alignment amount1
(1) - - 1 1 (1) -
Net gains (losses) on derivatives 678 382 (1,142) (275) 73 963 679
Net gains (losses) on trading securities hedged on an economic basis with derivatives
- (2) - - - (2)
TOTAL $ 678 $ 380 $ (1,142) $ (275) $ 73 $ 963 $ 677
1 Represents the interest amount on derivative collateral for which variation margin is characterized as a daily settled contract.
Table 9
Three Months Ended 03/31/2025
Advances Investments Mortgage Loans Consolidated
Obligation Discount Notes 		Consolidated
Obligation Bonds
Balance Sheet
Total
Derivatives not designated as hedging instruments:
Economic hedges - unrealized gains (losses) due to fair value changes
$ (1,661) $ (2,684) $ - $ (1,417) $ 571 $ (1,690) $ (6,881)
Mortgage delivery commitments - - 748 - - - 748
Economic hedges - net interest received (paid)
576 2,353 - 964 (208) (8) 3,677
Price alignment amount (29) (2) - 1 (33) 1 (62)
Net gains (losses) on derivatives (1,114) (333) 748 (452) 330 (1,697) (2,518)
Net gains (losses) on trading securities hedged on an economic basis with derivatives
- 2,507 - - - 2,507
TOTAL $ (1,114) $ 2,174 $ 748 $ (452) $ 330 $ (1,697) $ (11)
1 Represents the interest amount on derivative collateral for which variation margin is characterized as a daily settled contract.
Other Expenses: Other expenses, which includes compensation and benefits, other operating expenses and voluntary housing and community investment program contributions, increased $0.9 million for the three months ended March 31, 2026 compared to the prior year quarter. The increase is due primarily to increases in compensation and benefits, partially offset by timing-related declines in voluntary housing contributions. For 2026, FHLBank has voluntarily committed an additional $25.5 million, or five percent of its 2025 net income before assessments and voluntary contributions, to support housing and community development programs.
Financial Condition
Overall: Table 10 presents the percentage concentration of the major components of our Statements of Condition:
Table 10
Component Concentration
03/31/2026 12/31/2025
Assets:
Cash and due from banks - % - %
Interest-bearing deposits, securities purchased under agreements to resell and Federal funds sold 10.7 11.6
Investment securities 18.5 19.1
Advances 58.2 56.3
Mortgage loans, net 11.6 12.1
Other assets 1.0 0.9
Total assets 100.0 % 100.0 %
Liabilities:
Deposits 1.8 % 1.3 %
Consolidated obligation discount notes, net 24.7 27.5
Consolidated obligation bonds, net 67.5 65.2
Other liabilities 0.6 0.6
Total liabilities 94.6 94.6
Capital:
Capital stock outstanding 3.3 3.2
Retained earnings 2.2 2.3
Accumulated other comprehensive income (loss) (0.1) (0.2)
Total capital 5.4 5.4
Total liabilities and capital 100.0 % 100.0 %
Table 11 presents changes in the major components of our Statements of Condition (dollar amounts in thousands):
Table 11
Increase (Decrease)
in Components
03/31/2026 vs. 12/31/2025
Dollar
Change 		Percent
Change
Assets:
Cash and due from banks $ 2,818 13.0 %
Interest-bearing deposits, securities purchased under agreements to resell and Federal funds sold (173,430) (1.9)
Investment securities 221,510 1.5
Advances 3,646,560 8.4
Mortgage loans, net 72,469 0.8
Other assets (20,723) (2.9)
Total assets $ 3,749,204 4.8 %
Liabilities:
Deposits $ 501,225 55.1 %
Consolidated obligation discount notes, net (1,227,125) (5.8)
Consolidated obligation bonds, net 4,263,452 8.4
Other liabilities (28,527) (5.2)
Total liabilities 3,509,025 4.8
Capital:
Capital stock outstanding 203,224 8.1
Retained earnings 42,723 2.4
Accumulated other comprehensive income (loss) (5,768) 6.7
Total capital 240,179 5.7
Total liabilities and capital $ 3,749,204 4.8 %
Total assets increased $3.8 billion between periods, from $77.5 billion at December 31, 2025 to $81.3 billion at March 31, 2026. The increase was driven by a $3.6 billion increase in advances, with smaller increases in long-term investment securities and mortgage loans. Asset composition remained relatively consistent between years, with advances continuing to comprise the largest asset on the balance sheet, increasing from 56.3 percent of total assets at December 31, 2025 to 58.2 percent at March 31, 2026.
Total liabilities increased $3.5 billion over the same period, consistent with the growth in assets, but the composition of debt shifted. Consolidated obligation bonds and discount notes represented 70.3 percent and 29.7 percent of total consolidated obligations, respectively, at December 31, 2025 compared to 73.2 percent and 26.8 percent at March 31, 2026. This shift reflects an increase in variable-rate and swapped fixed-rate callable bonds.
Total capital increased $240.2 million, or 5.7 percent, from December 31, 2025 to March 31, 2026 due to an increase in capital stock resulting from increased advance utilization and growth in retained earnings in excess of dividends paid, partially offset by fair value fluctuations on available-for-sale securities (see Table 16).
Advances: Advances are one of the primary ways we fulfill our mission of providing liquidity to our members and constituted the largest asset on our balance sheet at March 31, 2026 and December 31, 2025. Advance par value increased by $3.7 billion, or 8.5 percent, from $43.7 billion at December 31, 2025 to $47.4 billion at March 31, 2026 (see Table 12). Advance demand has remained strong among FHLBank membership, especially among large depository institutions and insurance companies, which comprised the majority of the growth in the first quarter of 2026. Increasing deposit balances and/or declining loan demand at depository members could soften advance demand in future periods. The composition of the advance portfolio remains concentrated in advances that either reprice or mature on a relatively short-term basis; overnight line of credit, adjustable-rate advances, and short-term fixed-rate advances were 64.8 percent of the portfolio at March 31, 2026 compared to 61.2 percent as of December 31, 2025. This increase is attributed primarily to growth of $4.2 billion, or 29.5 percent, in regular adjustable-rate advances and $3.2 billion in overnight line of credit, partially offset by a decrease of $3.5 billion, or 85.2 percent, in short-term fixed-rate advances. SOFR spreads tightened during the first quarter, which made overnight line of credit advance pricing more competitive relative to other wholesale funding sources.
We elect to swap a significant portion of fixed-rate advances with longer maturities to short-term indices to synthetically create adjustable-rate advances to manage interest rate risk. When coupled with the volume of our short-term fixed-rate and adjustable-rate advances, advances that effectively reprice at least every three months represented 97.8 percent of our total advance portfolio as of March 31, 2026 and December 31, 2025.
As of March 31, 2026 and December 31, 2025, 56.0 percent and 59.3 percent, respectively, of our members carried outstanding advance balances. This shift in member activity began in 2025 with losses of members to mergers and acquisitions resulting in fewer total members borrowing, combined with an increase in large member borrowing. This is typically a countercyclical occurrence seen in periods of economic uncertainty, tightening liquidity, and/or an upward sloping yield curve. We have also lost members with outstanding credit obligations to out-of-district merger and acquisition activity. Members have access to other wholesale funding sources, which may impact the demand for advances on the basis of relative cost.
Table 12 summarizes advances outstanding by product (dollar amounts in thousands). An individual advance may be reclassified between periods (e.g., from fixed-rate callable advance to regular fixed-rate advance) due to the occurrence of a triggering event such as the passing of a call date.
Table 12
03/31/2026 12/31/2025
Dollar Percent Dollar Percent
Line of Credit:
Overnight line of credit1
$ 10,391,559 21.9 % $ 7,190,659 16.5 %
Adjustable-rate:
Standard advance products:
Regular adjustable-rate advances 18,633,400 39.3 14,391,900 33.0
Adjustable-rate callable advances
1,095,350 2.3 974,350 2.2
Standard housing and community development advances:
Adjustable-rate callable advances 15,535 - 18,535 -
Total adjustable-rate term advances 19,744,285 41.6 15,384,785 35.2
Fixed-rate:
Standard advance products:
Short-term fixed-rate advances2
612,061 1.3 4,130,111 9.5
Regular fixed-rate advances 12,225,182 25.8 12,514,440 28.7
Fixed-rate callable advances
43,102 0.1 52,572 0.1
Fixed-rate putable advances
3,391,600 7.2 3,362,100 7.7
Fixed-rate convertible advances
- - - -
Standard housing and community development advances:
Regular fixed-rate advances 185,097 0.4 184,270 0.4
Fixed-rate callable advances
458 - 458 -
Total fixed-rate term advances 16,457,500 34.8 20,243,951 46.4
Amortizing:
Standard advance products:
Fixed-rate amortizing advances 605,115 1.3 663,998 1.5
Fixed-rate callable amortizing advances 16,180 0.1 16,080 -
Standard housing and community development advances:
Fixed-rate amortizing advances 153,462 0.3 159,289 0.4
Fixed-rate callable amortizing advances 13,622 - 12,249 -
Total amortizing advances 788,379 1.7 851,616 1.9
TOTAL PAR VALUE $ 47,381,723 100.0 % $ 43,671,011 100.0 %
1 Represents fixed-rate line of credit advances with daily maturities.
2 Represents non-amortizing, non-prepayable loans with terms to maturity from 3 to 93 days.
Table 13 presents information on our five largest borrowers (dollar amounts in thousands). If the borrower was not one of our top five borrowers for one of the periods presented, the applicable columns are left blank.
Table 13
Borrower Name 03/31/2026 12/31/2025
Advance
Par Value
Percent of Total
Advance Par
Advance
Par Value
Percent of Total
Advance Par
MidFirst Bank $ 13,085,000 27.6 % $ 12,620,000 28.9 %
BOKF, NA
5,700,000 12.0 2,700,000 6.2
Pacific Life Insurance Co.
3,439,976 7.3 2,289,976 5.2
United of Omaha Life Ins. Co.
3,382,200 7.1 3,204,117 7.3
Security Life of Denver Ins. 1,840,000 3.9 1,840,000 4.2
TOTAL $ 27,447,176 57.9 % $ 22,654,093 51.8 %
Interest income from our five largest borrowers represented 56.8 percent and 54.1 percent advance interest income for the three months ended March 31, 2026 and 2025, respectively.
MPF Program: The MPF Program is a secondary mortgage market alternative for our members, predominately utilized by the smaller institutions in our district. We participate in the MPF Program through the MPF Provider, a division of FHLBank Chicago. Under the MPF Program, participating members can sell us fixed-rate conventional and government residential mortgage loans.
The mortgage loan portfolio was relatively unchanged at $9.4 billion at both December 31, 2025 and March 31, 2026. As mortgage interest rates decline, we generally expect increases in prepayments and new originations of mortgage loans. When rates increase, repayments and originations typically decline. Acquisition activity has slightly outpaced prepayments since the end of the year, despite prepayment speed acceleration, due to origination activity at larger average loan amounts and refinance activity. Net mortgage loans as a percentage of total assets decreased from 12.1 percent as of December 31, 2025 to 11.6 percent as of March 31, 2026 due to an increase in advance balances. The principal amount of new mortgage loans acquired and held on our balance sheet from our PFIs during the three months ended March 31, 2026 was $0.4 billion.
Investments: Investments are used to manage interest rate and duration risk, enhance income, and provide liquidity and primary and secondary market support for the U.S. housing securities market. Long-term investment securities increased $0.2 billion from December 31, 2025 to March 31, 2026 due to an increase in multifamily agency commercial MBS. The liquidity portfolio decreased $0.2 billion from December 31, 2025 to March 31, 2026 relative to elevated liquidity balances in the prior year. All investments are rated single A or higher by nationally recognized statistical rating organizations (NRSRO).
Liquidity Portfolio - Our liquidity portfolio is used to provide funds for our members, maintain liquidity, meet other financial obligations such as debt servicing, and enhance income. It is comprised of short-term investments, primarily interest-bearing deposits, reverse repurchase agreements, Federal funds sold, and certificates of deposit. Fluctuations in the liquidity portfolio reflect the impact of regulatory requirements, anticipated member liquidity needs, and the timing of paydowns, maturities, and investment opportunities on liquidity management practices.
Table 14 presents the carrying value of our unsecured credit exposure with private counterparties by investment type (in thousands). This exposure is generally to U.S. branches and agency offices of foreign commercial banks on an overnight basis. The unsecured investment credit exposure presented may not reflect the average or maximum exposure during the period as the balances presented reflect the balances at period end.
Table 14
03/31/2026 12/31/2025
Interest-bearing deposits $ 2,286,090 $ 1,910,110
Federal funds sold 2,850,000 2,850,000
TOTAL UNSECURED INVESTMENT CREDIT EXPOSURE1
$ 5,136,090 $ 4,760,110
1 Excludes unsecured investment credit exposure to U.S. government, U.S. government agencies, instrumentalities, GSEs and supranational entities and does not include related accrued interest.
We actively monitor our credit exposures and the credit quality of our counterparties, including an assessment of each counterparty's financial performance, capital adequacy, sovereign support, and the current market perceptions of the counterparties. General macro-economic, political, and market conditions may also be considered when deciding on unsecured exposure. As a result, we may further limit existing exposures.
We manage our credit risk by conducting pre-purchase credit due diligence and ongoing surveillance described previously and generally investing in unsecured investments of highly-rated counterparties. We may extend unsecured credit to qualified members by investing in overnight Federal funds issued by them. As of March 31, 2026, all unsecured investments were rated as investment grade based on NRSROs.
Major Security Types - See Note 3 of the Notes to Financial Statements under Part I, Item 1 of this quarterly report for additional information on our different investment classifications including the types of securities held under each classification. The carrying values by contractual maturities of our investments as of March 31, 2026 are summarized by security type in Table 15 (dollar amounts in thousands) with certain weighted average yield metrics along with carrying values as of December 31, 2025. Expected maturities of MBS will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or yield maintenance fees. At March 31, 2026 and December 31, 2025, 27.5 percent and 29.3 percent of our investment securities were variable-rate investment securities and were primarily indexed to SOFR.
Table 15
03/31/2026 12/31/2025
Due in
one year
or less
Due after
one year
through five years
Due after
five years
through 10 years
Due after
10 years 		Carrying
Value 		Carrying
Value
Trading securities:
GSE MBS $ - $ 72,910 $ 4,042 $ 2,982 $ 79,934 $ 80,741
Total trading securities - 72,910 4,042 2,982 79,934 80,741
Available-for-sale securities:
U.S. Treasury obligations 1,336,888 1,815,031 - - 3,151,919 3,149,986
U.S. obligation MBS - - - 56,733 56,733 60,428
GSE MBS 177,379 2,879,451 5,756,247 2,698,832 11,511,909 11,302,381
State or local housing agency obligations - - 57,143 22,743 79,886 57,956
Total available-for-sale securities 1,514,267 4,694,482 5,813,390 2,778,308 14,800,447 14,570,751
Held-to-maturity securities:
State or local housing agency obligations - 25,615 - - 25,615 25,615
GSE MBS - 17,151 6,339 126,322 149,812 157,191
Total held-to-maturity securities - 42,766 6,339 126,322 175,427 182,806
Total securities 1,514,267 4,810,158 5,823,771 2,907,612 15,055,808 14,834,298
Interest-bearing deposits 2,286,707 - - - 2,286,707 1,910,137
Federal funds sold 2,850,000 - - - 2,850,000 2,850,000
Securities purchased under agreements to resell
3,600,000 - - - 3,600,000 4,150,000
TOTAL INVESTMENTS $ 10,250,974 $ 4,810,158 $ 5,823,771 $ 2,907,612 $ 23,792,515 $ 23,744,435
Weighted average yields1:
Available-for-sale securities 2.42 % 3.36 % 4.42 % 4.66 %
Held-to-maturity securities - % 2.87 % 2.30 % 1.68 %
1 The weighted average yields are calculated as the sum of each debt security using the period end balances multiplied by the coupon rate adjusted by the impact of amortization and accretion of premiums and discounts, divided by the total debt securities in the applicable portfolio. The result is then multiplied by 100 to express it as a percentage.
Consolidated Obligations: Consolidated obligation bonds and discount notes represent the primary source of liabilities we use to fund advances, mortgage loans and investments. Capital markets have traditionally treated FHLBank obligations as U.S. government agency debt, and as a result - even though the U.S. government does not explicitly guarantee FHLBank debt - we generally have stable access to funding at relatively favorable spreads to U.S. Treasury rates. We are primarily and directly liable for consolidated obligations issued on our behalf, and we are jointly and severally liable with the other FHLBanks for the payment of principal and interest on all consolidated obligations. As noted under Part I, Item 3 - "Quantitative and Qualitative Disclosures About Market Risk," we use debt with a variety of maturities and option characteristics to manage our interest rate risk profile and maintain sufficient levels of liquidity. We make use of derivative transactions, executed in conjunction with specific consolidated obligation debt issues, to synthetically structure funding terms and costs.
Total consolidated obligations increased $3.0 billion, or 4.2 percent, from December 31, 2025 to March 31, 2026 corresponding with the increase in total assets. The distribution between consolidated obligation bonds and discount notes shifted between periods, from 70.3 percent and 29.7 percent, respectively, at December 31, 2025 compared to 73.2 percent and 26.8 percent at March 31, 2026, respectively, mostly due to an increase in discount notes and a decrease in short-term variable rate bonds, partially offset by a slight increase in swapped fixed-rate callable bonds. Callable bonds outstanding increased from $15.6 billion at December 31, 2025 to $16.5 billion at March 31, 2026. Callable bonds are typically fixed or structured rate debt that pay higher coupons to investors because of the optionality held by the issuer. When a swap is called by the counterparty in a swapped callable bond transaction, we typically call the hedged bond. Callable bonds provide us with options to replace the bonds at lower costs if interest rates decline. Our funding mix generally is driven by asset composition, but we may also shift our debt composition as a result of market conditions that impact the cost of unswapped consolidated obligations and the cost of consolidated obligations swapped or indexed to SOFR or Overnight Index Swap (OIS). For additional information on market trends impacting the cost of issuing debt, see "Financial Market Trends", "Liquidity and Capital Resources - Liquidity - Sources of Liquidity" and "Risk Management - Interest Rate Risk Management" under this Item 2.
Derivatives: The notional amount of total derivatives outstanding increased by $0.6 billion, from $55.7 billion at December 31, 2025 to $56.3 billion at March 31, 2026, primarily due to increases in interest rate swaps hedging callable consolidated obligation bonds. This change correspond with the change in balance sheet composition as previously discussed. For additional information regarding the types of derivative instruments and risks hedged, see Table 20 under Part I, Item 3 - "Quantitative and Qualitative Disclosures About Market Risk.
Liquidity and Capital Resources
Our structure as a member-owned cooperative allows our assets, liabilities, and capital to expand and contract in response to changes in member credit demand, membership composition, and market conditions. As a result, the assets and liabilities utilized for liquidity purposes can vary significantly in the normal course of business based on the amount and timing of cash flows as a result of these factors. Our primary source of liquidity is our access to the capital markets through issuance of consolidated obligations, which is described in Part I, Item 1 - "Business - Debt Financing - Consolidated Obligations" of the 2025 Annual Report on Form 10-K. Our capital resources are governed by our Capital Plan, certain portions of which are described below.
Sources and Uses of Liquidity - We manage our liquidity position to serve as a reliable and cost-effective funding source for our members, with consideration for market conditions, member demand, and the maturity profile of our assets and liabilities. We are required to comply with minimum liquidity requirements established by FHFA regulations and guidance, as well as policies established by management and our board of directors. Our primary sources of liquidity are proceeds from the issuance of consolidated obligations, our short-term liquidity portfolio, deposit inflows, repayments of advances and mortgage loans, maturing investments, trading and available-for-sale investments, other secured and unsecured borrowings, interest income, and sales of unencumbered assets. During the three months ended March 31, 2026, we maintained continuous access to funding and used these sources to fund advances, purchase mortgage loans and investments, repay member deposits, pledge collateral to derivative counterparties, and redeem or repurchase capital stock.
During the three months ended March 31, 2026, proceeds from the issuance of bonds and discount notes (net of premiums and discounts) were $18.9 billion and $200.9 billion, respectively, compared to $24.5 billion and $119.2 billion for the three months ended March 31, 2025. The difference between the proceeds from bonds and discount notes reflects the cumulative effect of issuing discount notes. The cumulative amount of discount notes issued exceeded the amount in the prior year due to favorable pricing of discount notes compared to short-term floating debt between periods. High demand for Agency debt has kept the spread to U.S. Treasury obligations relatively narrow. Our ability to issue debt remains robust, but volatility in the capital markets can impact the demand for and cost of debt issued by the FHLBanks.
Our liquidity portfolio consists of cash, certificates of deposit, short-term liquidity investments, and long-term investments with remaining maturities of one year or less. Short-term liquidity investments include Federal funds sold, interest-bearing demand deposits, and reverse repurchase agreements. The maturities of our short-term liquidity investments are structured to provide periodic cash flows to support our ongoing liquidity needs. Our liquidity portfolio decreased between periods, from $10.6 billion as of December 31, 2025 to $10.3 billion as of March 31, 2026.
Investment securities on our balance sheet are also a source of potential liquidity. U.S. Treasury obligations, GSE debentures, and GSE MBS can be sold or pledged as collateral for financing in the securities repurchase agreement market. In addition to balance sheet sources of liquidity, we have established lines of credit with numerous counterparties in the Federal funds market as well as with the other FHLBanks. We expect to maintain a sufficient level of liquidity for the foreseeable future.
During the three months ended March 31, 2026, advance disbursements totaled $64.9 billion compared to $62.8 billion for the prior year periods. Investment purchases (excluding overnight investments) totaled $0.8 billion in the three months ended March 31, 2026 compared to $0.7 billion for the same period in 2025. Payments on maturing and retired consolidated obligation bonds and discount notes were $14.6 billion and $202.1 billion, respectively, for the three months ended March 31, 2026 compared to $16.8 billion and $128.1 billion for the prior year period, reflecting the opportunistic discount note pricing previously discussed.
Regulatory Liquidity Requirements - We are required to maintain liquidity in accordance with certain FHFA guidance. Under these policies and guidelines,we are required to maintain contingency liquidity in an amount at least equal to anticipated net cash outflows under certain scenarios. One scenario assumes that we cannot access the capital markets for a period of 20 days and during that time members would renew any maturing, prepaid or called advances. In addition, we are required to perform and report to the FHFA the results of an annual liquidity stress test.
The FHFA also provides guidance related to asset/liability maturity funding gap limits. Funding gap metrics measure the difference between assets and liabilities that are scheduled to mature during a specified period of time and are expressed as a percentage of total assets. The current regulatory requirement for funding gaps is between -10 percent to -20 percent for the three-month maturity horizon and is between -25 percent to -35 percent for the one-year maturity horizon. During the three months ended March 31, 2026, we operated within those limits.
During the three months ended March 31, 2026, we were in compliance with all regulatory liquidity requirements.
Capital: Total capital increased $240.2 million, or 5.7 percent, from December 31, 2025 to March 31, 2026 primarily due to an increase in capital stock related to advance utilization and retained earnings in excess of dividends paid (see Table 16).
Table 16 provides a summary of member capital requirements under our current capital plan as of March 31, 2026 and December 31, 2025 (in thousands):
Table 16
Requirement 03/31/2026 12/31/2025
Asset-based (Class A Common Stock only) $ 187,925 $ 188,598
Activity-based (additional Class B Common Stock)1
2,301,406 2,128,046
Total Required Stock2
2,489,331 2,316,644
Excess Stock (Class A and B Common Stock) 229,986 199,554
Total Regulatory Capital Stock2
$ 2,719,317 $ 2,516,198
Activity-based Requirements:
Advances3
$ 2,129,565 $ 1,962,101
Letters of credit 17,933 18,050
AMA assets (mortgage loans)4
279,698 277,664
Total Activity-based Requirement 2,427,196 2,257,815
Asset-based Requirement (Class A Common Stock) not supporting member activity1
62,135 58,829
Total Required Stock2
$ 2,489,331 $ 2,316,644
1 Class A Common Stock, up to a member's asset-based stock requirement, will be used to satisfy a member's activity-based stock requirement before any Class B Common Stock is purchased by the member.
2 Includes mandatorily redeemable capital stock.
3 Advances to housing associates have no activity-based requirements because housing associates cannot own FHLBank stock.
4 Non-members previously required to purchase AMA activity-based stock are subject to the stock requirement in place at the time their membership ended as long as there are unpaid principal balances outstanding.
We are subject to various capital requirements under provisions of the GLB Act, the FHFA's capital structure regulation and our RMP. See Item 1 - "Business - Capital, Capital Rules and Dividends" in our annual report on Form 10-K for the year ended December 31, 2025 for details on the various capital requirements. We have been in compliance with each of the capital rules and requirements at all times, as applicable, since the implementation of our capital plan. See Note 9 of the Notes to Financial Statements under Part I, Item 1 for additional information and compliance as of March 31, 2026 and December 31, 2025.
Capital Distributions: Dividends may be paid in cash or capital stock as authorized by our board of directors. Quarterly dividends can be paid out of current and previous unrestricted retained earnings, subject to FHFA regulation and our capital plan.
Dividends paid to members totaled $55.7 million for the three months ended March 31, 2026 compared to $55.5 million for the same period in the prior year. The weighted average dividend rate was 8.57 percent for the three months ended March 31, 2026, which represented a dividend payout ratio of 56.6 percent over the period. The weighted average dividend rate was 8.81 percent for the three months ended March 31, 2025, which represented a dividend payout ratio of 55.9 percent. The dividend payout ratio represents dividends declared and paid during a period as a percentage of net income for the period, although FHFA regulation requires dividends be paid out of known income prior to the declaration date. For example, dividends declared and paid in March 2026 were based on income earned during the three months ended February 28, 2026. (See Part I, Item 1 - "Business - Capital, Capital Rules and Dividends" in our annual report on Form 10-K for the year ended December 31, 2025 for other factors that contribute to the level of dividends paid.)
In accordance with our capital plan, we must pay holders of Class A Common Stock the dividend parity threshold (DPT) rate before paying a higher rate to holders of Class B Common Stock. The DPT is a dividend rate expressed as a percentage per annum up to which the dividends paid per share on Class A Common Stock and Class B Common Stock must be equal. When the overnight Federal funds effective rate is below 2.00 percent, the DPT is zero for that dividend period (i.e., the DPT is floored at zero). Table 17 presents the dividend rates per annum paid on capital stock under our capital plan for the quarterly periods indicated:
Table 17
Applicable Rate per Annum 03/31/2026 12/31/2025 09/30/2025 06/30/2025 03/31/2025
Class A Common Stock 3.75 % 4.00 % 4.25 % 4.25 % 4.50 %
Class B Common Stock 9.25 9.25 9.25 9.25 9.50
Weighted Average1
8.57 8.55 8.65 8.59 8.81
Dividend Parity Threshold:
Average effective overnight Federal funds rate 3.64 % 3.90 % 4.30 % 4.33 % 4.33 %
Spread to index (2.00) (2.00) (2.00) (2.00) (2.00)
TOTAL (floored at zero percent) 1.64 % 1.90 % 2.30 % 2.33 % 2.33 %
1 Weighted average dividend rates are dividends paid in cash and stock on both classes of stock divided by the average of capital stock eligible for dividends.
Historically, dividend rates have moved directionally with short-term interest rates. Market conditions and movements in short-term interest rates can be unpredictable, and adverse market conditions may result in lower dividend rates in future quarters. If there is a change to the DPT in the future, the capital plan requires that we provide members notice of that change 90 days prior to a dividend payment.
Risk Management
Active risk management continues to be an essential part of our operations and a key determinant of our ability to maintain earnings to return an acceptable dividend to our members, support our affordable housing mission, and meet retained earnings thresholds. See Part II, Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Management" in our Form 10-K for information on our enterprise risk management program. A separate discussion of market risk is included under Part I, Item 3 - "Quantitative and Qualitative Disclosures About Market Risk."
Recently Issued Accounting Standards
For a discussion of recently issued accounting standards, see Note 2 of the Notes to Financial Statements under Part I, Item 1 - "Financial Statements".
Legislative and Regulatory Developments
Significant regulatory actions and developments for the period covered by this report not previously disclosed are summarized below.
FHLBank is subject to various legal and regulatory requirements and priorities. Certain actions, regulatory priorities, and areas of focus such as deregulation by the current administration have changed and continue to change the regulatory environment. These changes have affected, and likely will continue to affect, certain aspects of FHLBank's business operations, and could affect the financial condition, results of operations, and reputation of FHLBank. For example, the FHFA repealed the Fair Lending, Fair Housing, and Equitable Housing Finance Plans regulation applicable to the FHLBanks, effective March 9, 2026, citing the administration's deregulatory priorities.
On March 13, 2026, the federal executive administration issued two executive orders that address mortgage credit availability and housing affordability and are pertinent to the FHLBanks.
One executive order directs the FHFA and other federal financial regulators to consider measures to expand access to mortgage credit, including potential adjustments to capital requirements for mortgage-related exposures; modernization of collateral valuation and transfer systems between the Federal Reserve Banks and the FHLBanks; expansion of access to longer-dated FHLBank advances tied to residential mortgage assets; development of targeted FHLBank liquidity programs for entry-level housing, owner-occupied purchase loans, and small residential builders; acceleration of collateral boarding and valuation processes through standardized data and digital documentation; and refocusing the FHLBanks' Affordable Housing Programs to support faster execution and greater financial leverage for small-scale and owner-occupied housing projects. This executive order also directs the FHFA and the Federal Reserve Board to consider authorizing the FHLBanks' intermediate access to the Federal Reserve's discount window for the FHLBanks' depository institution members under standardized collateral, operational, and risk-management protocols. In addition, the executive order directs the FHFA and other federal agencies to consider standardizing the acceptance of e-notes and promoting digital mortgage standards. In addition, the FHFA, in consultation with other relevant federal agencies, is required to submit a report evaluating the efficiency of national housing finance markets and identifying potential regulatory or legislative recommendations to address any regulatory or oversight gaps. The second executive order directs the FHFA and other federal agencies to consider reducing regulatory barriers to affordable housing construction, including eliminating or reforming rules or programs that constrain residential development and impede housing affordability, especially the construction of affordable single-family homes.
While these executive orders could potentially affect our liquidity products, collateral and operational requirements, capital deployment, and housing-related initiatives, they do not, by themselves, change existing regulations or program requirements applicable to us and the other FHLBanks. The nature, timing, and scope of any resulting changes remain uncertain and subject to further FHFA action, such as rulemaking or guidance. We continue to monitor developments related to these executive orders and assess their potential effect on FHLBank and its members.
Considering the changes in the regulatory environment, there is uncertainty with respect to the ultimate nature and result of future regulatory actions and their ultimate effects on FHLBank and the FHLBank System. For further discussion of related risks, see Part I, Item 1A. - "Risk Factors".
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