Seattle FHLBank Posts 2Q Loss

The Federal Home Loan Bank of Seattle, which has been burned by its Mortgage Purchase Program, posted a $15.7 million loss in the second quarter but is forecasting better days ahead.The government-sponsored enterprise blamed the loss on "mismatches in the cash flows of the bank's assets and liabilities" and costs associated with its downsizing. In the second quarter of last year, the FHLBank earned $25.5 million. It said it hopes to release third-quarter earnings in the "near future." Under new management, the bank is focusing on its advance business and reducing its MPP portfolio. In May, it indicated that it might lose money over the next three years. But in a statement issued Dec. 13, the Seattle FHLBank said it might break even or earn "minimal net income" this year and increase earnings in 2006 and 2007. The bank can be found online at http://www.fhlbsea.com.