

	March 31, 2020					December 31, 2019
Redemption Term	Amount¹			Weighted Average Interest Rate		Amount¹			Weighted Average Interest Rate
Overdrawn demand deposit accounts	$	5		1.36	%	$	1		2.73	%
Due in one year or less	33,669			1.05		35,432			1.97
Due after one year through two years	19,305			1.71		21,959			2.23
Due after two years through three years	10,264			2.07		8,693			2.33
Due after three years through four years	5,244			2.36		5,109			2.51
Due after four years through five years	7,231			1.93		5,978			2.17
Thereafter	3,441			2.43		3,013			2.72
Total par value	79,159			1.57	%	80,185			2.16	%
Premiums	24					25
Discounts	(5		)			(6		)
Fair value hedging adjustments	579					156
Total	$	79,757				$	80,360

The following table summarizes advances by year of redemption term or next call date for callable advances, and by year of redemption term or next put date for putable advances (dollars in millions):



	Redemption Term or Next Call Date				Redemption Term or Next Put Date
	March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019
Overdrawn demand deposit accounts	$	5	$	1	$	5	$	1
Due in one year or less	48,177		53,156		34,633		36,278
Due after one year through two years	12,855		11,967		19,360		22,101
Due after two years through three years	6,617		5,427		10,320		8,730
Due after three years through four years	3,924		3,802		5,036		5,004
Due after four years through five years	4,558		3,461		6,375		5,069
Thereafter	3,023		2,371		3,430		3,002
Total par value	$	79,159	$	80,185	$	79,159	$	80,185

The Bank offers advances to members and eligible housing associates that may be prepaid on pertinent dates (call dates) prior to maturity without incurring prepayment fees (callable advances). Other advances may require a prepayment fee or credit that makes the Bank financially indifferent to the prepayment of the advance. At March 31, 2020 and December 31, 2019, the Bank had callable advances outstanding totaling $19.5 billion and $25.5 billion.

The Bank holds certain putable advances. With a putable advance, the Bank has the right to terminate the advance from the borrower on the predetermined exercise dates. Generally, these put options are exercised when interest rates increase relative to contractual rates. At both March 31, 2020 and December 31, 2019, the Bank had putable advances outstanding totaling $1.4 billion.

The Bank generally charges a prepayment fee for advances that a borrower elects to terminate prior to the stated maturity or outside of a predetermined call or put date. The fees charged are priced to make the Bank financially indifferent to the prepayment of the advance. For certain advances with symmetrical prepayment features, the Bank may charge the borrower a prepayment fee or pay the borrower a prepayment credit, depending on certain circumstances, such as movements in interest rates, when the advance is prepaid. Prepayment fees and credits are recorded net of fair value hedging adjustments in advance income on the Statements of Income. The Bank recorded prepayment fees on advances, net of $3 million and less than $1 million for the three months ended March 31, 2020 and 2019.

The Bank’s advances are concentrated in commercial banks, savings institutions, and insurance companies. At March 31, 2020 and December 31, 2019, the Bank had outstanding advances of $17.5 billion and $25.5 billion to Wells Fargo Bank, N.A. who individually held 10 percent or more of the Bank’s advances, which represented 22 percent and 32 percent of the total principal amount of outstanding advances.

The Bank evaluates advances for credit losses on a quarterly basis. The Bank adopted new accounting guidance for the measurement of credit losses on financial instruments on January 1, 2020. See “Note 2 — Recently Adopted and Issued Accounting Guidance” for additional information.

The Bank manages its credit exposure to advances through an approach that includes establishing a credit limit for each borrower. This approach includes an ongoing review of each borrower’s financial condition in conjunction with the Bank’s collateral and lending policies to limit risk of loss while balancing borrowers’ needs for a reliable source of funding. In addition, the Bank lends to eligible borrowers in accordance with the FHLBank Act, Finance Agency regulations, and other applicable laws.

The Bank is required by regulation to obtain sufficient collateral to fully secure its advances. The estimated value of the collateral required to secure each borrower’s advances is calculated by applying collateral discounts, or haircuts, to the unpaid principal balance or market value, if available, of the collateral. The Bank also has policies and procedures for validating the reasonableness of the Bank’s collateral valuations. In addition, collateral verifications and on-site reviews are performed by the Bank based on the risk profile of the borrower. Management believes that these policies effectively manage the Bank’s credit risk from advances.

Community financial institutions may also pledge collateral consisting of secured small business, small agri-business, or small farm loans. As additional security, the FHLBank Act provides that the Bank has a lien on each member’s capital stock investment; however, capital stock cannot be pledged as collateral to secure advances.

Collateral arrangements may vary depending upon borrower credit quality, financial condition and performance, borrowing capacity, and overall credit exposure to the borrower. The Bank can also require additional or substitute collateral to protect its security interest. The Bank periodically evaluates and makes changes to its collateral guidelines and collateral haircuts.

Borrowers may pledge collateral to the Bank by executing a blanket pledge agreement, specifically assigning collateral, or placing physical possession of collateral with the Bank or its custodians. The Bank perfects its security interest in all pledged collateral by filing Uniform Commercial Code financing statements or by taking possession or control of the collateral. Under the FHLBank Act, any security interest granted to the Bank by its members, or any affiliates of its members, has priority over the claims and rights of any party (including any receiver, conservator, trustee, or similar party having rights of a lien creditor), unless those claims and rights would be entitled to priority under otherwise applicable law and are held by actual purchasers or by parties that have perfected security interests.

Under a blanket pledge agreement, the Bank is granted a security interest in all financial assets of the borrower to fully secure the borrower’s obligation. Other than securities and cash deposits, the Bank does not initially take delivery of collateral from blanket agreement borrowers. In the event of deterioration in the financial condition of a blanket pledge agreement borrower, the Bank has the ability to require delivery of pledged collateral sufficient to secure the borrower’s obligation. With respect to non-blanket pledge agreement borrowers that are federally insured, the Bank generally requires collateral to be specifically assigned. With respect to non-blanket pledge agreement borrowers that are not federally insured (typically insurance companies, CDFIs, and housing associates), the Bank generally takes control of collateral through the delivery of cash, securities, or loans to the Bank or its custodians.

Using a risk-based approach and taking into consideration each borrower’s financial strength, the Bank considers the types and level of collateral to be the primary indicator of credit quality on its advances. At March 31, 2020 and December 31, 2019, the Bank had rights to collateral on a borrower-by-borrower basis with an unpaid principal balance or market value, if available, in excess of its outstanding advances.

As a result of recent stressed market conditions stemming from the coronavirus pandemic (COVID-19), the Bank is taking additional steps to monitor its credit risk on advances. These steps include increased frequency of collateral valuation and identifying, analyzing, and monitoring borrowers with higher risk profiles.

At March 31, 2020 and December 31, 2019, none of the Bank’s advances were past due, on non-accrual status, or considered impaired. In addition, there were no troubled debt restructurings (TDRs) related to advances during the three months ended March 31, 2020 and 2019.

The Bank has never experienced a credit loss on its advances. Based upon the Bank’s collateral and lending policies, the collateral held as security, and the repayment history on advances, management has determined that there were no expected credit losses on its advances as of March 31, 2020. For the same reasons, the Bank did not record any allowance for credit losses for its advances at December 31, 2019.