Indianapolis FHLBank to Restate Earnings

The Federal Home Loan Bank of Indianapolis says it is restating its earnings for the past four years and the first quarter of 2005 because of an "incorrect application" of a derivative and hedging accounting standard.The FHLBank estimates that the corrections will reduce income by $35 million and that there will be "no significant change" in the bank's capital position. "We do not believe this correction detracts from FHLBI's core strengths or its progress toward achieving FHLBI's strategic plan," said Martin Heger, the bank's president and chief executive officer. The bank discovered the accounting errors while preparing to register its stock with the Securities and Exchange Commission by Aug. 29, as mandated by its primary regulator -- the Federal Housing Finance Board. As a result of the restatement, the Indianapolis bank said it would not be able to meet the Aug. 29 deadline for filing its first quarterly financial statement with the SEC. And it is withdrawing an initial registration statement that it filed with the SEC on June 30. "The FHLBI cannot determine at this time when the restatement will be completed," the bank said. On Aug. 18, the Des Moines FHLBank announced that it would not be able to meet the Aug. 29 deadline for filing its quarterly results with the SEC.