The Federal Home Loan Bank of Chicago earned $197.5 million in net income for the first three quarters of this year, down 34% from that of the same period in 2004, according to an application filed by the Chicago bank to register its stock with the Securities and Exchange Commission.The Chicago FHLBank, which continues to operate under a supervisory agreement, blamed the decline in earnings "primarily" on the increase in short-term interest rates this year, along with declines in its advance and mortgage purchase business. The Boston, New York, and San Francisco FHLBanks have registered their stock with the SEC, and the Cincinnati FHLBank recently filed an application to register. "This is an important step in the completion of the registration process," said Mike Thomas, president and chief executive of the Chicago bank. The $83 billion Chicago FHLBank held $43.4 billion in Mortgage Partnership Finance loans as of Sept. 30, and approximately $500 million of the conventional MPF loans are located in the Gulf Coast states hit by hurricanes Katrina and Rita. The Chicago bank said it does not believe its losses will be material, but it is still working with a master servicer and the originating institutions to develop a loss estimate.

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