|The Federal Home Loan Banks earned more than $1 billion last year -- though income sank from the previous year and the fourth quarter turned negative.
During 2008, combined earnings at all 12 banks were $1.2 billion, the FHLBanks Office of Finance reported today. Income sank from $2.8 billion in 2007.
Other-than-temporary impairments on private-label residential mortgage-backed securities and home-equity loan investments, as well as losses on derivatives and hedging activities tied to SFAS 133, contributed to $2.0 billion in charges last year.
The charges could continue if delinquency continues to deteriorate and home values continue to decline.
Fourth-quarter 2008 combined earnings were an $0.7 billion loss. Earning reversed from an $0.5 billion profit during the third quarter and a net profit of $0.8 billion in the fourth-quarter 2007. Other-than-temporary impairments were $1.8 billion during the latest quarter.
The banks had $1.349 trillion in combined assets as of Dec. 31, 2008, declining from $1.429 trillion on Sept. 30 but higher than $1.272 trillion one year earlier.
Included in the most recent tally of assets were $0.929 trillion in advances and $0.087 trillion in mortgage assets .
Combined GAAP capital was $51.4 billion at the end of last year, down 4 percent from Dec. 31, 2007. At the FHLBank of Seattle, however, there were negative retained earnings of $79 million.