Seattle FHLB Reverse First QuarterLosses

SEATTLE - (05/16/06) – The Federal Home Loan Bank ofSeattle reported Monday it broke back into the black in the firstquarter of the year, to the tune of $8 million, compared to a $12.3million loss for the first quarter last year. The Seattle Bankattributed the improved financials to the sell-off of loans in itsMortgage Partnership Finance as it moves to exit the secondarymortgage market, and the shift of its business focus back tolow-cost advances for mortgage funding. Advances were $21.9 billionas March 31, up 32% from a year ago. At least three FHLBs havemoved to exit their secondary mortgage programs over the past year.The Seattle Bank also attributed lower costs associated with itshedging operations to the first-quarter turn-around. A year ago thebank was holding $260 million in losses on its hedging portfolio.The bank did not report what its hedging position was at the end ofthe first quarter. There are 373 members of the Seattle Bank,including 82 credit unions.