Advances

6 Months Ended

Jun. 30, 2011

Advances

Advances

NOTE 4 – ADVANCES

General Terms: The FHLBank offers a wide range of fixed and variable rate advance types with different maturities, interest rates, payment characteristics and optionality. Fixed rate advances generally have maturities ranging from 3 days to 15 years. Variable rate advances generally have maturities ranging from overnight to 15 years, where the interest rates reset periodically at a fixed spread to the London Interbank Offered Rate (LIBOR) or other specified index. As of June 30, 2011 and December 31, 2010, the FHLBank had advances outstanding at interest rates ranging from 0 percent (AHP advances) to 8.01 percent. The following table presents advances summarized by year of contractual maturity as of June 30, 2011 and December 31, 2010 (in thousands):

Year of Contractual Maturity	06/30/2011		12/31/2010
	Amount	Weighted Average Interest Rate	Amount	Weighted Average Interest Rate
Due in one year or less	$2,377,051	1.85%	$2,920,522	1.70%
Due after one year through two years	1,928,950	2.90	1,525,657	2.79
Due after two years through three years	1,493,037	2.55	1,747,226	2.89
Due after three years through four years	1,847,145	2.46	1,407,668	3.53
Due after four years through five years	1,265,195	2.73	1,639,026	1.98
Thereafter	8,274,755	1.81	9,683,160	1.78
Total par value	17,186,133	2.14%	18,923,259	2.10%
Discounts	(33,887)		(48,084)
Hedging adjustments1	480,436		493,154
TOTAL	$17,632,682		$19,368,329

_________

¹ See Note 7 for a discussion of: (1) the FHLBank's objectives for using derivatives; (2) the types of assets and liabilities hedged; and (3) the accounting for derivatives and the related assets and liabilities hedged.

The FHLBank's advances outstanding include advances that contain call options that may be exercised with or without prepayment fees at the borrower's discretion on specific dates (call dates) before the stated advance maturities (callable advances). The borrowers normally exercise their call options on these advances when interest rates decline (fixed rate advances) or spreads change (adjustable rate advances). The FHLBank's advances as of June 30, 2011 and December 31, 2010 include callable advances totaling $6,250,188,000 and $7,044,658,000, respectively. Of these callable advances, there were $6,232,204,000 and $7,026,484,000 of variable rate advances as of June 30, 2011 and December 31, 2010, respectively.

Convertible advances allow the FHLBank to convert an advance from one interest payment term structure to another. When issuing convertible advances, the FHLBank may purchase put options from a member that allow the FHLBank to convert the fixed rate advance to a variable rate advance at the current market rate or another structure after an agreed-upon lockout period. A convertible advance carries a lower interest rate than a comparable-maturity fixed rate advance without the conversion feature. As of June 30, 2011 and December 31, 2010, the FHLBank had convertible advances outstanding totaling $3,029,107,000 and $3,560,332,000, respectively.

The following table presents advances summarized by contractual maturity or next call date (for callable advances) and by contractual maturity or next conversion date (for convertible advances) as of June 30, 2011 and December 31, 2010 (in thousands):

Redemption Term	Year of Contractual Maturity or Next Call Date		Year of Contractual Maturity or Next Conversion Date
	06/30/2011	12/31/2010	06/30/2011	12/31/2010
Due in one year or less	$8,343,730	$9,685,703	$4,727,308	$5,690,629
Due after one year through two years	1,782,577	1,243,941	1,812,125	1,331,857
Due after two years through three years	1,133,750	1,479,576	1,539,562	1,798,151
Due after three years through four years	1,194,815	1,293,831	1,776,045	1,361,793
Due after four years through five years	900,508	1,025,527	1,087,695	1,275,926
Thereafter	3,830,753	4,194,681	6,243,398	7,464,903
TOTAL PAR VALUE	$17,186,133	$18,923,259	$17,186,133	$18,923,259

Interest Rate Payment Terms: The following table details additional interest rate payment terms for advances as of June 30, 2011 and December 31, 2010 (in thousands):

Par Value of Advances	06/30/2011	12/31/2010
Fixed rate:
Due in one year or less	$1,334,285	$1,479,588
Due after one year	8,623,379	9,034,433
Total fixed rate	9,957,664	10,514,021
Variable rate
Due in one year or less	1,042,766	1,440,934
Due after one year	6,185,703	6,968,304
Total variable rate	7,228,469	8,409,238
TOTAL PAR VALUE	$17,186,133	$18,923,259

As of June 30, 2011 and December 31, 2010, 69.6 percent and 70.5 percent, respectively, of the FHLBank's fixed rate advances were swapped to a floating rate.