SEATTLE – The Federal Home Loan Bank of Seattle reported yesterday that a huge $304.2-million other-than-temporary impairment charge on its private-label mortgage backed securities caused it to book a loss of $241.1 million for its fourth quarter.
The Seattle FHLB said it was forced to take the large charge even though it only expects to realize $11.9 million of actual losses on the $546.5-million book value of MBSs.
The fourth quarter losses created a loss of $199.4 million for 2008. That compares to net income of $70.7 million for 2007.
The fourth quarter loss wipes out all of the FHLB’s $148.7 million of retained earnings and created a deficit of $78.9 million at Dec. 31.
The Seattle Bank also reported fourth quarter losses of $21.7 million on early retirement of high-cost debt, and of $4.2 million on the termination of derivatives contracts with Lehman Brothers.
