FHLB Seattle Posts $467 Million Capital Deficiency

Published May 20, 2009, 10:57 p.m. EDT

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Updated August 27, 2020, 12:39 a.m. EDT

1 Min Read

SEATTLE – The Federal Home Loan bank of Seattle, which has been struggling with a large portfolio of underwater mortgage-backed securities, reported a $467 million capital deficiency yesterday as part of first quarter financials.

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The Seattle Bank, which has been struggling to keep up its capital levels for the last several months, also reported a $16.2 million loss for the first quarter, compared to a $31.5 million profit for the same period last year.

The Seattle Bank attributed the decrease primarily to $71.7 million of other-than-temporary-impairment credit-related charges on held-to-maturity, private-label mortgage-backed securities.

As a result of the distressed prices of certain of the bank’s held-to-maturity private-label mortgage-backed securities, the Seattle Bank had a risk-based capital deficiency of $466.7 million as of March 31. Under Federal Housing Finance Agency regulation, a Federal Home Loan Bank may not redeem or repurchase capital stock or pay dividends on its stock while a capital deficiency exists.

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