Fair Value

12 Months Ended

Dec. 31, 2025

Fair Value Disclosures [Abstract]

Fair Value [Text Block]

Fair Value

Fair value amounts are determined by the Bank using available market information and reflect the Bank’s best judgment of appropriate valuation methods. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., exit price). The fair value hierarchy requires an entity to maximize the use of significant observable inputs and minimize the use of significant unobservable inputs when measuring fair value. The inputs are evaluated and an overall level for the fair value measurement is determined. This overall level is an indication of market observability of the fair value measurement for the asset or liability.

The fair value hierarchy prioritizes the inputs used to measure fair value into three broad levels:

•Level 1 Inputs. Quoted prices (unadjusted) for identical assets or liabilities in an active market that the Bank can access on the measurement date. An active market for an asset or liability is a market in which the transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

•Level 2 Inputs. Inputs other than quoted prices within Level 1 that are observable inputs for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 2 inputs include the following: (i) quoted prices for similar assets or liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in markets that are not active, (iii) inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves that are observable at commonly quoted intervals and implied volatilities), and (iv) market-corroborated inputs.

•Level 3 Inputs. Unobservable inputs for the asset or liability. Valuations are derived from techniques that use significant assumptions not observable in the market, which may include pricing models, discounted cash flow models, or similar techniques.

The Bank reviews its fair value hierarchy classifications on a quarterly basis. Changes in the observability of the valuation inputs may result in a reclassification between fair value hierarchy levels of certain assets or liabilities. The Bank had no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy during the years ended December 31, 2025, 2024, or 2023.

The following table summarizes the carrying value, fair value, and fair value hierarchy of the Bank’s financial instruments (dollars in millions). The Bank records trading securities, AFS securities, derivative assets, derivative liabilities, financial instruments held under the fair value option, and certain other assets at fair value on a recurring basis, and on occasion certain impaired mortgage loans held for portfolio on a non-recurring basis. The Bank records all other financial assets and liabilities at amortized cost. The fair values do not represent an estimate of the overall market value of the Bank as a going concern, which would take into account future business opportunities and the net profitability of assets and liabilities.

	December 31, 2025
			Fair Value
Financial Instruments	Carrying Value		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1		Total
Assets
Cash and due from banks	$	44	$	44	$	—	$	—	$	—	$	44
Interest-bearing deposits	3,726		—		3,726		—		—		3,726
Securities purchased under agreements to resell	17,090		—		17,090		—		—		17,090
Federal funds sold	5,930		—		5,930		—		—		5,930
Trading securities	6,303		—		6,303		—		—		6,303
Available-for-sale securities	27,519		—		27,519		—		—		27,519
Held-to-maturity securities	447		—		450		2		—		452
Advances	110,230		—		110,441		—		—		110,441
Mortgage loans held for portfolio, net	14,540		—		13,996		38		—		14,034
Accrued interest receivable	461		—		461		—		—		461
Derivative assets, net	80		—		240		—		(160)		80
Other assets	50		50		—		—		—		50
Liabilities
Deposits	(1,147)		—		(1,147)		—		—		(1,147)
Consolidated obligations
Discount notes2	(84,620)		—		(84,617)		—		—		(84,617)
Bonds	(89,249)		—		(88,831)		—		—		(88,831)
Total consolidated obligations	(173,869)		—		(173,448)		—		—		(173,448)
MRCS	(30)		(30)		—		—		—		(30)
Accrued interest payable	(589)		—		(589)		—		—		(589)
Derivative liabilities, net	(3)		—		(29)		—		26		(3)

1    Amounts represent the application of the netting requirements that allow the Bank to net settle positive and negative positions and also cash collateral and the related accrued interest held or placed with the same clearing agent and/or counterparty.

2    Includes $17.4 billion of consolidated obligation discount notes recorded under fair value option at December 31, 2025.

The following table summarizes the carrying value, fair value, and fair value hierarchy of the Bank’s financial instruments (dollars in millions):

	December 31, 2024
			Fair Value
Financial Instruments	Carrying Value		Level 1		Level 2		Level 3		Netting Adjustments and Cash Collateral1		Total
Assets
Cash and due from banks	$	41	$	41	$	—	$	—	$	—	$	41
Interest-bearing deposits	4,096		—		4,096		—		—		4,096
Securities purchased under agreements to resell	11,950		—		11,950		—		—		11,950
Federal funds sold	5,175		—		5,175		—		—		5,175
Trading securities	4,720		—		4,720		—		—		4,720
Available-for-sale securities	25,331		—		25,331		—		—		25,331
Held-to-maturity securities	760		—		755		2		—		757
Advances	99,951		—		100,040		—		—		100,040
Mortgage loans held for portfolio, net	11,896		—		10,940		32		—		10,972
Accrued interest receivable	400		—		400		—		—		400
Derivative assets, net	804		—		202		—		602		804
Other assets	44		44		—		—		—		44
Liabilities
Deposits	(1,314)		—		(1,314)		—		—		(1,314)
Consolidated obligations
Discount notes2	(64,680)		—		(64,682)		—		—		(64,682)
Bonds	(88,571)		—		(87,778)		—		—		(87,778)
Total consolidated obligations	(153,251)		—		(152,460)		—		—		(152,460)
MRCS	(9)		(9)		—		—		—		(9)
Accrued interest payable	(717)		—		(717)		—		—		(717)
Derivative liabilities, net	(6)		—		(60)		—		54		(6)

1    Amounts represent the application of the netting requirements that allow the Bank to net settle positive and negative positions and also cash collateral and the related accrued interest held or placed with the same clearing agent and/or counterparty.

2    Includes $52.3 billion of consolidated obligation discount notes recorded under fair value option at December 31, 2024.

SUMMARY OF VALUATION TECHNIQUES AND PRIMARY INPUTS

The valuation techniques and primary inputs used to develop the measurement of fair value for assets and liabilities that are measured at fair value on a recurring or non-recurring basis on the Statements of Condition are outlined below.

Trading and AFS Investment Securities. The Bank’s valuation technique incorporates prices from multiple designated third-party pricing vendors, when available. The pricing vendors generally use various proprietary models to price investment securities. The inputs to those models are derived from various sources including, but not limited to, benchmark securities and yields, reported trades, dealer estimates, issuer spreads, bids, offers, and other market-related data. Since many investment securities do not trade on a daily basis, the pricing vendors use available information, as applicable, such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing to determine the prices for individual securities. Each pricing vendor has an established process in place to challenge investment valuations, which facilitates resolution of questionable prices identified by the Bank. Periodically, the Bank conducts reviews of its pricing vendors to confirm and further augment its understanding of the vendors’ pricing processes, methodologies, and control procedures for investment securities.

The Bank’s valuation technique for estimating the fair values of its investment securities first requires the establishment of a median price for each security. All prices that are within a specified tolerance threshold of the median price are included in the cluster of prices that are averaged to compute a default price. All prices that are outside the threshold (outliers) are subject to further analysis (including, but not limited to, comparison to prices provided by an additional third-party valuation service, prices for similar securities, and/or non-binding dealer estimates) to determine if an outlier is a better estimate of fair value. In limited instances, when no prices are available from the designated pricing services, the Bank obtains prices from dealers or uses the purchase price if the investment security is unsettled.

As of December 31, 2025 and 2024, multiple prices were received for the majority of the Bank’s trading and AFS investment securities. Based on the Bank’s review of the pricing methods and controls employed by the third-party pricing vendors and the relative lack of dispersion among the vendor prices, the Bank believes its final prices are representative of the prices that would have been received if the assets had been sold at the measurement date (i.e., exit prices) and further, that the fair value measurements are classified appropriately in the fair value hierarchy.

Impaired Mortgage Loans Held for Portfolio. The fair value of impaired mortgage loans held for portfolio is estimated by obtaining property values from an external pricing vendor. This vendor utilizes multiple pricing models that generally factor in market observable inputs, including actual sales transactions and home price indices. The Bank applies an adjustment to these values to capture certain limitations in the estimation process and takes into consideration estimated selling costs and expected PMI proceeds.

Derivative Assets and Liabilities. The fair value of derivatives is generally estimated using standard valuation techniques such as a discounted cash flow analysis and includes variation margin payments for daily settled contracts. In limited instances, fair value estimates for interest-rate related derivatives may be obtained using an external pricing model that utilizes observable market data. The Bank is subject to credit risk in derivatives transactions due to the potential nonperformance of its derivatives counterparties. The use of cleared derivatives is intended to mitigate credit risk exposure because a central counterparty is substituted for individual counterparties and collateral/payments are posted daily, through a clearing agent, for changes in the fair value of cleared derivatives. To mitigate credit risk on uncleared derivatives, the Bank enters into master netting agreements with its counterparties that are fully collateralized with a zero unsecured threshold. The Bank has evaluated the potential for the fair value of its derivatives to be affected by counterparty credit risk and its own credit risk and has determined that no adjustments were significant to the overall fair value measurements.

The fair values of the Bank’s derivative assets and derivative liabilities include accrued interest receivable/payable and related cash collateral. The estimated fair values of the accrued interest receivable/payable and cash collateral approximate their carrying values due to their short-term nature. The fair values of derivatives are netted by clearing agent and/or counterparty if the netting requirements are met. If these netted amounts result in a receivable to the Bank, they are classified as an asset and, if classified as a payable to the clearing agent or counterparty, they are classified as a liability.

The Bank’s discounted cash flow model utilizes market-observable inputs (inputs that are actively quoted and can be validated to external sources). The Bank uses the following inputs for measuring the fair value of interest-related derivatives:

•Discount rate assumption. The Bank utilizes the federal funds OIS or SOFR OIS curve depending on the terms of the derivative agreement. 

•Forward interest rate assumption. The Bank utilizes the swap curve of the instrument’s index rate.

•Volatility assumption. Market-based expectations of future interest rate volatility implied from current market prices for similar options.

For forward settlement agreements, the Bank utilizes TBA security prices that are determined by coupon class and expected term until settlement. For mortgage loan purchase commitments, the Bank utilizes TBA security prices adjusted for factors such as credit risk and servicing spreads.

Other Assets. These represent grantor trust assets, which are carried at estimated fair value based on quoted market prices as of the last business day of the reporting period.

Consolidated Obligation Discount Notes Recorded under the Fair Value Option. The fair value of consolidated obligation discount notes recorded under the fair value option is determined by calculating the present value of the expected future cash flows. The discount rates used in the present value calculations are for consolidated obligations with similar terms. The Bank uses the consolidated obligation curve for measuring the fair value of these consolidated obligations, which is a market-observable curve constructed by the Office of Finance. This curve is constructed using the U.S. Treasury curve as a base curve which is then adjusted by adding indicative spreads obtained largely from market-observable sources.

Subjectivity of Estimates. Estimates of the fair value of financial assets and liabilities using the methods previously described are highly subjective and require judgments regarding significant matters, such as the amount and timing of future cash flows, prepayment speed assumptions, expected interest rate volatility, possible distributions of future interest rates used to value options, and the selection of discount rates that appropriately reflect market and credit risks. The use of different assumptions could have a material effect on the fair value estimates.

FAIR VALUE ON A RECURRING AND NON-RECURRING BASIS

The following table summarizes, for each hierarchy level, the Bank’s assets and liabilities that are measured at fair value on the Statements of Condition (dollars in millions):

	December 31, 2025
	Level 1		Level 2		Level 3		Netting Adjustments and Cash Collateral1		Total
Recurring fair value measurements
Assets
Trading securities
U.S. Treasury obligations	$	—	$	6,104	$	—	$	—	$	6,104
Other U.S. obligations	—		57		—		—		57
GSE and TVA obligations	—		48		—		—		48
Other non-MBS	—		94		—		—		94
Total trading securities	—		6,303		—		—		6,303
Available-for-sale securities
Other U.S. obligations	—		14		—		—		14
GSE and TVA obligations	—		310		—		—		310
State or local housing agency obligations	—		370		—		—		370
Other non-MBS	—		19		—		—		19
U.S. obligations single-family MBS	—		5,707		—		—		5,707
GSE single-family MBS	—		217		—		—		217
GSE multifamily MBS	—		20,882		—		—		20,882
Total available-for-sale securities	—		27,519		—		—		27,519
Derivative assets, net
Interest-rate related	—		240		—		(160)		80
Total derivative assets, net	—		240		—		(160)		80
Other assets	50		—		—		—		50
Total recurring assets at fair value	$	50	$	34,062	$	—	$	(160)	$	33,952
Liabilities
Discount notes2	$	—	$	(17,382)	$	—	$	—	$	(17,382)
Derivative liabilities, net
Interest-rate related	—		(29)		—		26		(3)
Total derivative liabilities, net	—		(29)		—		26		(3)
Total recurring liabilities at fair value	$	—	$	(17,411)	$	—	$	26	$	(17,385)
Non-recurring fair value measurements
Assets
Impaired mortgage loans held for portfolio3	$	—	$	—	$	6	$	—	$	6
Total non-recurring assets at fair value	$	—	$	—	$	6	$	—	$	6

1    Amounts represent the application of the netting requirements that allow the Bank to net settle positive and negative positions and also cash collateral and the related accrued interest held or placed with the same clearing agent and/or counterparty.

2    Represents financial instruments recorded under the fair value option.

3    These assets are subject to fair value adjustments in certain circumstances. The fair value information presented is as of the date the fair value adjustment was recorded during the year ended December 31, 2025.

The following table summarizes, for each hierarchy level, the Bank’s assets and liabilities that are measured at fair value on the Statements of Condition (dollars in millions):

	December 31, 2024
	Level 1		Level 2		Level 3		Netting Adjustments and Cash Collateral1		Total
Recurring fair value measurements
Assets
Trading securities
U.S Treasury obligations	$	—	$	4,508	$	—	$	—	$	4,508
Other U.S. obligations	—		59		—		—		59
GSE and TVA obligations	—		47		—		—		47
Other non-MBS	—		106		—		—		106
Total trading securities	—		4,720		—		—		4,720
Available-for-sale securities
Other U.S. obligations	—		102		—		—		102
GSE and TVA obligations	—		309		—		—		309
State or local housing agency obligations	—		499		—		—		499
Other non-MBS	—		42		—		—		42
U.S. obligations single-family MBS	—		5,200		—		—		5,200
GSE single-family MBS	—		195		—		—		195
GSE multifamily MBS	—		18,984		—		—		18,984
Total available-for-sale securities	—		25,331		—		—		25,331
Derivative assets, net
Interest-rate related	—		201		—		602		803
Forward settlement agreements (TBAs)	—		1		—		—		1
Total derivative assets, net	—		202		—		602		804
Other assets	44		—		—		—		44
Total recurring assets at fair value	$	44	$	30,253	$	—	$	602	$	30,899
Liabilities
Discount Notes2	$	—	$	(52,349)	$	—	$	—	$	(52,349)
Derivative liabilities, net
Interest-rate related	—		(60)		—		54		(6)
Total derivative liabilities, net	—		(60)		—		54		(6)
Total recurring liabilities at fair value	$	—	$	(52,409)	$	—	$	54	$	(52,355)
Non-recurring fair value measurements
Assets
Impaired mortgage loans held for portfolio3	$	—	$	—	$	5	$	—	$	5
Total non-recurring assets at fair value	$	—	$	—	$	5	$	—	$	5

1    Amounts represent the application of the netting requirements that allow the Bank to net settle positive and negative positions and also cash collateral and the related accrued interest held or placed with the same clearing agent and/or counterparty.

2    Represents financial instruments recorded under the fair value option.

3    These assets are subject to fair value adjustments in certain circumstances. The fair value information presented is as of the date the fair value adjustment was recorded during the year ended December 31, 2024.

FAIR VALUE OPTION

The fair value option provides an irrevocable option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, and unrecognized firm commitments. It requires entities to display the fair value of those assets and liabilities for which it has chosen to use fair value on the face of the Statements of Condition. Fair value is used for both the initial and subsequent measurement of the designated assets, liabilities, and commitments, with the changes in fair value recognized in net income. These fair value elections are made primarily in an effort to mitigate the potential income statement volatility that can arise when an economic derivative is adjusted for changes in fair value but the related hedged item is not.

For financial instruments recorded under the fair value option, the related contractual interest income, interest expense, and the discount amortization on fair value option discount notes are recorded as part of net interest income on the Statements of Income. The remaining changes are recorded as “Net gains (losses) on financial instruments held under fair value option” on the Statements of Income.

For the years ended December 31, 2025, 2024, and 2023, the Bank recorded net gains of $12 million, net losses of $31 million, and net losses of $92 million on financial instruments held under fair value option (i.e., discount notes). The Bank determined no credit risk adjustments for nonperformance were necessary. In determining that no credit risk adjustments were necessary, the Bank considered the following factors:

•The Bank is a federally chartered GSE, and as a result of this status, the Bank’s consolidated obligations have historically received the same credit rating as the government bond credit rating of the United States, even though they are not obligations of the United States and are not guaranteed by the United States.

•The Bank is jointly and severally liable with the other FHLBanks for the payment of principal and interest on all consolidated obligations of the FHLBanks.

The following table summarizes the difference between the unpaid principal balance and fair value of outstanding instruments for which the fair value option has been elected (dollars in millions):

	December 31, 2025
	Unpaid Principal Balance		Fair Value		Fair Value Over (Under) Unpaid Principal
Discount Notes	$	17,504	$	17,382	$	(122)

	December 31, 2024
	Unpaid Principal Balance		Fair Value		Fair Value Over (Under) Unpaid Principal
Discount Notes	$	52,848	$	52,349	$	(499)