ATLANTA, Nov. 14 /PRNewswire/ -- Federal Home Loan Bank of Atlanta (the
Bank) today released the results for the quarter ended Sept. 30, 2008.
As of Sept. 30, 2008, the Bank had total assets of $213.7 billion, an
increase of $24.8 billion, or 13.1 percent, from Dec. 31, 2007. This increase
was primarily a result of increases in advances, federal funds sold, and
held-to-maturity securities. Advances, the largest asset on the Bank's
balance sheet, increased by $21.4 billion, or 15.0 percent, during this same
period due to increased demand for advances during the last month of the third
quarter as the Bank responded to its members' increased need for liquidity.
The Bank reported a net loss of $46.1 million for the third quarter of
2008, a decrease of $179.2 million from net income of $133.1 million for the
third quarter of 2007. The Bank's net income for the first nine months of 2008
was $179.2 million, a decrease of $143.0 million from net income of $322.2
million for the same period in 2007. The decrease in net income during the
periods was due primarily to the establishment of a $170.5 million reserve for
a credit loss on a receivable due from Lehman Brothers Special Financing
(LBSF), which filed bankruptcy on Oct. 3, 2008, and the recording of an
other-than-temporary impairment loss of $87.3 million on private label
mortgage-backed securities (MBS). The reserve for credit loss on the LBSF
receivable represents 90.0 percent of the outstanding receivable, which is the
Bank's best estimate of collectability.
These amounts were offset partially by a $50.6 million and $182.1 million
increase in net interest income during the third quarter and first nine months
of 2008, respectively, resulting from higher average advances and MBS
balances, and an increase in interest rate spread, during the periods.
"The net loss for the quarter is an unfortunate product of the global
financial markets, particularly the reserve related to the LBSF bankruptcy
filing and the other-than-temporary impairment on our MBS," said Richard A.
Dorfman, the Bank's President and Chief Executive Officer. "However, these
results do not reflect substantive weakness in the fundamental strength of the
Bank nor our commitment to funding members at this critical time."
The 2008 third quarter performance resulted in an annualized return on
equity (ROE) of (2.13) percent for the Bank as compared to the 7.52 percent
for the third quarter of 2007. The ROE spread to three-month average LIBOR
decreased between the periods, equaling (5.04) percent for the third quarter
of 2008 as compared to 2.08 percent for the third quarter of 2007.
For the three months ended Sept. 30, 2008, the Bank distributed $58.9
million of earnings to members as a return on their capital investment in the
Bank, representing an annualized dividend rate of 2.89 percent, as compared to
6.0 percent and 5.75 percent for the first and second quarters of 2008,
respectively. The Bank's retained earnings balance was $360.3 million as of
Sept. 30, 2008, a decrease of $108.5 million, or 23.1 percent, from Dec. 31,
2007, due to establishment of the LBSF-related reserve and the impairment on
mortgage-backed securities.
The Bank filed its full financial report on Form 10-Q on Nov. 14, 2008.
About the Federal Home Loan Bank of Atlanta
The Bank is a cooperative financial services organization that provides
funding, community development grants, and other banking services to more than
1,200 member financial institutions in Alabama, Florida, Georgia, Maryland,
North Carolina, South Carolina, Virginia, and the District of Columbia. The
Bank is one of 12 district banks in the Federal Home Loan Bank System (the
FHLBank System), which since 1990 has contributed more than $2 billion to
affordable housing development in the United States.
Some of the statements made in this announcement, including, without
limitation, those statements that relate to the Bank's funding plans are
"forward-looking statements," which include statements with respect to the
Bank's beliefs, plans, objectives, goals, expectations, anticipations,
assumptions, estimates, intentions, and future performance, and involve known
and unknown risks, uncertainties and other factors, many of which may be
beyond the Bank's control, and which may cause the Bank's actual results,
performance or achievements to be materially different from the future
results, performance or achievements expressed or implied by the forward-
looking statements.
The forward-looking statements may not be realized due to a variety of
factors, including, without limitation: legislative and regulatory actions or
changes; future economic and market conditions; changes in demand for
advances or consolidated obligations of the Bank and/or the FHLBank System;
changes in interest rates; political, national and world events; and adverse
developments or events affecting or involving other Federal Home Loan Banks or
the FHLBank System in general. Additional factors that might cause the Bank's
results to differ from these forward-looking statements are provided in detail
in our filings with the Securities and Exchange Commission, which are
available at www.sec.gov.
You should not place undue reliance on forward-looking statements, since
the statements speak only as of the date that they are made. The Bank has no
obligation and does not undertake to publicly update, revise or correct any of
the forward-looking statements after the date of this announcement, or after
the respective dates on which such statements otherwise are made, whether as a
result of new information, future events or otherwise, except as may be
required by law.
