Cincinnati FHLB Reports Higher Earnings & MPP Activity

The Federal Home Loan Bank of Cincinnati reported $83 million in earnings for the first quarter, up from $49 million a year ago, and noted a pickup in member participation in its mortgage purchase program and strong refinancing activity. The FHLBank's MPP portfolio jumped 13% during the first quarter to $9.7 billion as more members joined the program and began selling their conventional and Federal Housing Administration single-family loans to the bank. "We approved 11 members in the first quarter," the bank said, after approving 21 members in 2008. The Cincinnati bank has seen a sharp drop in member borrowing over the past four quarters, however, and advances have dropped by 24% to $46.1 billion as of March 31. "The ability of the Mortgage Purchase Program to be countercyclical helped offset a portion of the business lost from the advance portfolio," the bank said in its securities filing. The FHLBank has only $280 million in private-label MBS and "no credit-risk related or impairment charges were required," the bank said.