FHLBank Earnings Drop

Consolidated earnings of the 12 Federal Home Loan Banks fell 42.3% in the third quarter due to lower interest rates and losses recorded by three FHLBanks.The FHLBanks' Office of Finance reported that earnings totaled $285 million in the third quarter, down from $494.0 million in the third quarter of 2002. "The decrease in Q3 relates primarily to an $82 million decline in net interest income due to lower interest rates and a decrease in combined other income of $169 million," the Office of Finance said. The "combined other" income figure also reflects the previously reported losses posted by the New York, Pittsburgh, and Atlanta FHLBanks. The third-quarter financial report shows that the FHLBanks' holdings of one- to four-family mortgages totaled $108.0 billion as of Sept. 30, up from $60.6 billion at the beginning of the year.