FHLBanks: Advances Rose 20%-50% in '07

Federal Home Loan Banks are reporting that their advance business grew by 20%-50% in 2007, but member borrowing eased off in the fourth quarter. The Boston FHLBank reported that advances grew last year by nearly 50% to $55.7 billion, up from $37.5 billion at year-end 2006. But all of that growth occurred in the third quarter, when advances jumped 56% to $56.3 billion. The San Francisco FHLBank reported a 37% increase year over year to $251.0 billion, but outstanding advances rose by only $14.8 billion in the fourth quarter. Members of the San Francisco FHLBank borrowed $53 billion in advances during July and August when the secondary market for nonagency mortgage-backed securities dried up and competition for deposits heated up. Overall, FHLBank member banks and thrifts borrowed $110 billion in advances in August. The Cincinnati FHLBank said its advances grew by 26% in 2007 to end the year at $53.0 billion, after registering no growth in advances during the fourth quarter.