WASHINGTON — Still recovering from losses on investments in Fannie Mae and Freddie Mac preferred stock, the banking industry is bracing for a blow from the Federal Home Loan Bank System.

On Friday the Federal Home Loan Bank of Pittsburgh became the latest Home Loan bank to warn members that it is facing significant losses on its investments in mortgage-backed securities, and, as a result, it is in danger of becoming undercapitalized.

Its president, John Price, said that members — many with liquidity concerns of their own — may be asked to pony up more capital to keep it afloat, and he warned that capital levels could fall too low, which would raise concern that their investments in the Home Loan banks could fall below par value.

Paul Merski, the chief economist at the Independent Community Bankers of America, said the Home Loan banks' capital woes amount to a "double whammy" for community banks: Not only are they facing potential impairment charges on their Home Loan bank investments, but there is real concern about whether the Home Loan banks can remain a source of liquidity at a time when it remains sorely needed.

"We need them to remain robust," he said. Until now "they have been the bright spot of the credit crisis."

Community banks also stand to lose income as Home Loan banks are forced to suspend dividend payments to preserve capital.

At issue at the Pittsburgh bank — and several others — is other-than-temporary impairment charges related to private-label mortgage-backed securities. On Jan. 12 the Home Loan Bank of Seattle said it would likely report falling below a capital requirement as of Dec. 31.

Mr. Price said the Pittsburgh bank is currently analyzing its private-label MBS portfolio. "The eventual OTTI charge could be significant to or even exceed the bank's retained earnings," he said.

The Pittsburgh bank reported $382 million of retained earnings on Sept. 30. If those holdings evaporated, the immediate question would be whether the Home Loan bank "broke the buck" — something that has never happened in the system's 76-year history.

Home Loan banks are capitalized with stock that is redeemable in five years. That leads some to question whether a bank can technically break the buck if members are paid in whole when the stock is redeemed in five years.

"It's not a money fund in the sense that, as an investor in a money fund, you can go and get your dollar out," said Gary Townsend, the president and chief executive of Hill-Townsend Capital LLC and a former chief examiner of the Home Loan banks.

Technicalities aside, observers said that if the Pittsburgh Home Loan bank were to run out of capital, accountants would still require members to write down the value of their investments.

"In this environment, accountants are more inclined to be very stringent than to be anything less," Mr. Townsend said.

Members questioned Mr. Price during the call about why the Home Loan banks have not sought access to the Troubled Asset Relief Program. The system already has access to a line of credit at the Treasury Department.

"Everything is on the table," he said. However, "at the moment, we're not looking at that."

A source close to the Home Loan banks said the system would have nothing to gain from Tarp funding.

"If you receive Tarp money, chances are you'd be limited in the dividends you'd pay, be required to put together a capital restoration plan and not redeem excess stock," the source said.

The Pittsburgh bank released data Friday revealing that it held just $71.9 million over its risk-based capital requirement on Nov. 30, dramatically lower than the $2.6 billion cushion it reported two months earlier. Turning to members for capital would hardly be an easy sell with the industry struggling with its own capital problems.

Bill Schenck, the president of the $887 million-asset TriState Capital Bank in Pittsburgh, said he hopes the federal government will offer support. "It could be as straightforward as supporting these private mortgage-backed securities," he said.

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