Resolution Funding Corporation

6 Months Ended

Jun. 30, 2011

Resolution Funding Corporation

Resolution Funding Corporation

NOTE 11 – RESOLUTION FUNDING CORPORATION

Each FHLBank is required to pay 20 percent of income calculated in accordance with GAAP after the assessment for AHP, but before the assessment for REFCORP. The AHP and REFCORP assessments are calculated simultaneously because of their interdependence on each other. The FHLBank accrues its REFCORP assessment on a monthly basis. Calculation of the AHP assessment is discussed in Note 10. REFCORP has been designated as the calculation agent for AHP and REFCORP assessments. Each FHLBank provides its interest expense related to mandatorily redeemable capital stock and net income before AHP and REFCORP assessments to REFCORP, which then performs the calculations for each quarter end and levies the assessments to the FHLBanks for the quarter.

Based upon the calculation noted above and income reported by the FHLBanks through June 30, 2011, the aggregate amounts actually assessed through that date, and payments made in July 2011 by all 12 FHLBanks, fully satisfied the REFCORP obligation. Consequently, no additional payments to REFCORP will be required after July 2011. This was confirmed by the Finance Agency through a notice issued on August 5, 2011 certifying that the FHLBanks' payments to the U.S. Department of the Treasury resulted in full satisfaction of the FHLBanks' REFCORP obligation. The following table details the change in the REFCORP liability for the three- and six-month periods ended June 30, 2011 and 2010 (in thousands):

	Three-month Period Ended		Six-month Period Ended
	06/30/2011	06/30/2010	06/30/2011	06/30/2010
REFCORP obligation as of the beginning of the period	$6,030	$0	$8,014	$11,556
REFCORP assessments	5,792	0	11,822	0
REFCORP payments	(6,030)	0	(14,044)	(11,556)
REFCORP obligation as of the end of the period	$5,792	$0	$5,792	$0