ATLANTA – The Federal Home Loan Bank of Atlanta said last week it took steps to conserve capital to prepare for possible large write-downs in the value of some of its mortgage-backed securities.
The Atlanta Bank reported it would no longer repurchase its class B2 stock on a daily basis from members. Instead, the bank will evaluate whether to repurchase such stock from members once a quarter. The bank also will allow members to hold more B2 stock, and it increased the amount of B1 stock the largest members are required to hold.
The Atlanta Bank is among the handful of FHLBs that are struggling under the weight of unrealized losses on mortgage-backed securities holdings, similar to the problems experienced at some corporate credit unions. At least four of the 12 FLHBs, including those in Chicago, San Francisco, Pittsburgh and Boston announced losses last week related to their MBS portfolios.
