Seattle FHLB Reports Fourth Quarter Loss
The Federal Home Loan Bank of Seattle, which is struggling to shed underwater assets, reported a $9.1-million loss for the fourth quarter of fiscal 2005, pushing down fiscal year earnings to just $1.7 million.
The FHLB realized losses of $6.4-million on the retirement of $236 million of long-term, high-cost debt, and losses of $5.4-million on the premature termination of leases. The debt retirement helped the Seattle bank to trim the unrealized losses on its investment portfolio to $360 million at year-end, down from paper losses of $400 million at the end of the third quarter.
The Seattle bank also continued to wind down its secondary mortgage market program, called Mortgage Purchase Program, by selling 16% of the portfolio, or $1.4 billion, to $7.2 billion at year-end. The shedding of its secondary mortgage market program was part of an unprecedented supervisory agreement the Seattle bank signed with federal regulators last year that requires it to exit the secondary mortgage market, ban all early redemption of stock, halt all dividend payments on stock for three years, and refocus its business on providing low-cost advances to help finance mortgage lending by participating financial institutions.
The Seattle FHLB is owned by 375 financial institutions in the northwest, including 79 credit unions.
Ed Roberts can be contacted at eroberts