The Federal Home Loan Bank of Seattle, at year-end, had a $260 million "unrealized loss" on its balance sheet, according to company records.If the losses are realized at that amount, it would wipe out 13% of its $2 billion in capital, according to calculations by MortgageWire. A spokesman for the bank cautioned that the unrealized losses are just that, and could shrink or grow in size over time. The spokesman said the figure "is a snapshot at a point in time," reflecting a mismatch between the FHLBank's assets and liabilities. Meanwhile, the Seattle GSE reported a 42% drop in 2004 earnings, and has stopped purchasing mortgage loans under a restructuring plan that calls for a 25% reduction in staff. The Seattle bank warned that it "anticipates minimal to no dividends for its members" over the next few years and "may report net loss for some financial reporting periods." The troubled bank, which has been operating under a supervisory agreement since Dec. 10, filed a business/capital plan April 5 with its regulator, the Federal Housing Finance Board.

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