SEATTLE – The Federal Home Loan Bank of Seattle reported last night that fourth quarter losses soared to $241.1 million, due to a massive $304.2 million other-then-temporary impaired charge for the period.
The fourth quarter loss pushed the Seattle Bank into the red to the tune of $199.4 million for 2008, compared to net income of $70.7 million for 2007.
The Seattle FHLB’s losses are the worst of the six FHLBs to report losses for last year. The FHLBs are experiencing similar problems as corporate credit unions, with both entities being weighed down by growing losses on their mortgage-backed securities. Several other FHLBs reported losses over the past two weeks, including those in San Francisco, Pittsburgh, Boston, Chicago and Dallas.
The Seattle Bank’s fourth quarter OTTI was recorded on its portfolio of private-label MBSs.
The huge loss comes just three years after the Seattle Bank came out of a supervisory agreement with regulators forcing it to curtail dividends and exit its secondary mortgage market program, known as Mortgage Partnership Finance.
The Bank said its risk-based capital ratio fell below regulatory minimums at year-end 2008, forcing it to once again cease paying dividends or redemption of capital stock.
