COFI Index Falls to Lowest Point Since 2005

For the second consecutive month there has been a large decline in the Eleventh Federal Home Loan District Cost of Funds Index, driving it to its lowest point since April 2005.As calculated by the Federal Home Loan Bank of San Francisco, the index for January was 2.455%, down from 2.757% in December 2008. The 30 basis point decline follows a drop of nearly 40 basis points between November and December. For January 2008, the index was 3.970%. The index was calculated using total average funds of $82.0 billion and total interest expense of $167.7 million. The total interest expense is derived from interest expense reported on deposit accounts, Federal Home Loan Bank advances, and other borrowings, adjusted for the number of days in the month, according to FHLB-SF. The all-time low for the index was reached in May 2004, when it was 1.708%.