WASHINGTON The 12 Federal Home Loan banks reported aggregate net income of $1 billion in the first quarter of 2015, nearly half of which was the result of settlements involving private-label mortgage backed securities litigation.
The Home Loan Bank of San Francisco was the only beneficiary, receiving $459 million from such settlements in the first quarter.
"If the settlement is excluded from first quarter income, net income is only $57 million higher quarter over quarter," the Federal Housing Finance Agency said in its quarterly performance report on the government-sponsored enterprises, which was released Monday.
Advances, the traditional business of the Home Loan banks, slipped, according the report. They fell by $28.5 billion to $542.2 billion.
"This is the seventh consecutive year advances have decreased in the first quarter," FHFA said.
Advances to top-ten borrowers decreased $23.8 billion, including $12.8 billion that Citibank pulled out of the New York Home Loan Bank and $10.5 billion Capital One pulled out of the Atlanta bank.
Five Home Loan banks increased their mortgage holdings in the first quarter "with the FHLBs of Indianapolis and New York growing their portfolios by more than 8%."
Still, the capital position of the Home Loan Banks "remains strong," FHFA said.
With regard to Fannie Mae and Freddie Mac, the report said the quality of the GSEs' portfolios continued to improve in the first quarter, which allowed for the release of loan loss reserves.
However, new FHFA guidelines for uncollectable loans that went into the effect Jan. 1 forced the GSEs to take "additional charge-offs" of $4.4 billion in the first quarter.
The charge-offs were the primary driver for the $8.4 billion reduction in their loan loss reserves in the first quarter. The GSEs held $51.6 billion in loan loss reserves as of March 31.
The number of seriously delinquent loans held by the two GSEs fell to 492,000 in the first quarter, down 20.5% from the same point last year.