The nation's Federal Home Loan banks got a little smaller in the first quarter.

Amid weak demand for advances from member banks, total assets at the 12 banks slipped to $848.7 million at March 31, down 3% from three months earlier, according to the banks' office of finance.

The steepest decline occurred at the Dallas bank, where total assets fell 16.4%, to $33.2 million. Overall, total outstanding advances dropped by 7% in the quarter, to $445.1 million.

"Advance demand remained subdued because of continued availability of alternative funding sources, as well as high deposit balances and low demand for loans at member institutions," the FHLBanks Office of Finance said in a news release Friday.

As for profits, the first-quarter results were a mixed bag. While all but one of the 12 banks made money in the quarter, only three—Chicago, New York and Atlanta—reported increases in net income when compared with the same period last year. The most notable decline was at the Seattle bank, which swung from a $6 million profit in the last year's first quarter to a $12 million loss this year.

For the 12 banks combined, net income was up 10.2% year over year, to $358 million. The office of finance attributed the increase largely to net gains on derivatives and hedging activities and lower mark-to-market losses on advances and consolidated obligations.

The banks' capital positions also improved during the quarter. The office of finance said that total GAAP capital increased by $1.1 billion, or 2.4%, from the year-earlier period, $44.8 billion.

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