The Federal Home Loan Bank of San Francisco, breaking with its traditional practice, said Monday that it will not inform its member banks about fourth-quarter dividends until next year.
Dean Schultz, the bank's president, wrote in a letter to members included in a Securities and Exchange Commission filing that it will not provide the information this quarter because of "uncertainty" about whether it will need to write down mortgage bonds.
"Persistent stresses in the credit markets, substantial declines in real estate values, and increasing weakness in the U.S. economy are continuing to affect the loan collateral underlying the bank's nonagency mortgage-backed securities, increasing the risk that some of these securities will require an impairment charge," Mr. Schultz wrote.
Last quarter the Home Loan Bank of Seattle posted an $18.8 million loss as a result of impairments on mortgage securities.
