Activities with Stockholders

3 Months Ended

Mar. 31, 2020

Activities with Stockholders [Text Block]

Activities with Stockholders

The Bank is a cooperative. This means the Bank is owned by its customers, whom the Bank calls members. As a condition of membership in the Bank, all members must purchase and maintain membership capital stock based on a percentage of their total assets, subject to a minimum and maximum amount, as of the preceding December 31^st. Each member is also required to purchase and maintain activity-based capital stock to support certain business activities with the Bank. All transactions with stockholders are entered into in the ordinary course of business.

TRANSACTIONS WITH DIRECTORS’ FINANCIAL INSTITUTIONS

In the normal course of business, the Bank extends credit to its members whose directors and officers serve as Bank directors (Directors’ Financial Institutions). Finance Agency regulations require that transactions with Directors’ Financial Institutions be made on the same terms and conditions as those with any other member.

The following table summarizes the Bank’s outstanding transactions with Directors’ Financial Institutions (dollars in millions):



	March 31, 2020			December 31, 2019
	Amount		% of Total	Amount		% of Total
Advances	$	4,613	6	$	3,337	4
Mortgage loans	211		2	208		2
Deposits	10		1	27		2
Capital stock	235		5	182		4

BUSINESS CONCENTRATIONS

The Bank considers itself to have business concentrations with stockholders owning 10 percent or more of its total capital stock outstanding (including mandatorily redeemable capital stock). At March 31, 2020 and December 31, 2019, the Bank had the following business concentrations with stockholders (dollars in millions):



	March 31, 2020
	Capital Stock					Mortgage		Interest
Stockholder	Amount		% of Total¹	Advances		Loans		Income²
Wells Fargo Bank, N.A.	$	709	15	$	17,450	$	20	$	113
Superior Guaranty Insurance Company³	14		—	—		334		—
Total	$	723	15	$	17,450	$	354	$	113



	December 31, 2019
	Capital Stock					Mortgage		Interest
Stockholder	Amount		% of Total¹	Advances		Loans		Income²
Wells Fargo Bank, N.A.	$	1,029	22	$	25,450	$	21	$	1,059
Superior Guaranty Insurance Company³	15		—	—		350		—
Total	$	1,044	22	$	25,450	$	371	$	1,059


1	Pursuant to applicable Finance Agency regulations, the Bank’s voting structure limits the voting rights of these stockholders and other members holding a significant amount of the Bank’s capital stock.


2	Represents interest income earned on advances during the three months ended March 31, 2020 and the year ended December 31, 2019. Interest income on mortgage loans is excluded from this table as this interest relates to the borrower, not to the stockholder.

Superior Guaranty Insurance Company is an affiliate of Wells Fargo Bank, N.A.