Seattle FHLB SlashesDividend

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SEATTLE - (02/01/05) -- The Federal Home Loan Bank ofSeattle said Monday it is cutting its dividend for the firstquarter of 2005--based for the first time on fourth quarterearnings--to just 1.63% on its class B (primary) shares, because ofa supervisory order it has entered with regulators to raise itsretained earnings. That's down from 4% paid in the first and secondquarters last year, and 3.5% for the third quarter. Under its newpolicy, the Seattle bank will declare dividends for a given quarterbased on earnings from the prior quarter. The bank will continue tolimit dividends while it seeks approval from the Federal HousingFinance Board, which regulates the 12 FHLBs, for a three-yearbusiness and capital management plan under a supervisory agreemententered into in December. Like many FHLBs, the Seattle bank paysits dividends in the form of new shares of stock. Dividends will bepaid to 379 members, including 82 credit unions.

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