10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 000-52004

FEDERAL HOME LOAN BANK OF TOPEKA

(Exact name of registrant as specified in its charter)

Federally chartered corporation of the United States	48-0561319
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
500 SW Wanamaker Road,  Topeka, KS	66606
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 785.233.0507

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
None	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ☒ Yes  ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  ☒  Yes  ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  ☐ Yes  ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

	Shares outstanding as of
	October 31, 2021
Class A Stock, par value $100 per share	2,574,844
Class B Stock, par value $100 per share	11,800,709

.FEDERAL HOME LOAN BANK OF TOPEKA

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	5
Item 1.	Financial Statements	5
	Statements of Condition	6
	Statements of Income	8
	Statements of Comprehensive Income	10
	Statements of Capital	12
	Statements of Cash Flows	13
	Notes to Financial Statements	16
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
	Executive Level Overview	49
	Financial Market Trends	52
	Critical Accounting Policies and Estimates	53
	Results of Operations	54
	Financial Condition	64
	Liquidity and Capital Resources	79
	Risk Management	82
	Recently Issued Accounting Standards	84
	Legislative and Regulatory Developments	85
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	86
Item 4.	Controls and Procedures	90
Part II	OTHER INFORMATION	90
Item 1.	Legal Proceedings	90
Item 1A.	Risk Factors	90
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	90
Item 3.	Defaults Upon Senior Securities	90
Item 4.	Mine Safety Disclosures	90
Item 5.	Other Information	90
Item 6.	Exhibits	91

2

Important Notice about Information in this Quarterly Report

In this quarterly report, unless the context suggests otherwise, references to “FHLBank,” “FHLBank Topeka,” “we,” “us” and “our” mean Federal Home Loan Bank of Topeka, and “FHLBanks” mean all Federal Home Loan Banks, including FHLBank Topeka.

The information contained in this quarterly report is accurate only as of the date of this quarterly report and as of the dates specified herein.

The product and service names used in this quarterly report are the property of FHLBank, and in some cases, other FHLBanks. Where the context suggests otherwise, the products, services and company names mentioned in this quarterly report are the property of their respective owners.

Special Cautionary Notice Regarding Forward-looking Statements

The information in this Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include statements describing the objectives, projections, estimates or future predictions of FHLBank’s operations. These statements may be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “may,” “is likely,” “could,” “estimate,” “expect,” “will,” “intend,” “probable,” “project,” “should,” or their negatives or other variations of these terms. FHLBank cautions that by their nature forward-looking statements involve risks or uncertainties and that actual results may differ materially from those expressed in any forward-looking statements as a result of such risks and uncertainties, including but not limited to:

•Changes in the general economy and capital markets, the rate of inflation or deflation, employment rates, housing market activity and pricing, the size and volatility of the residential mortgage market, and global economic uncertainty;

•The ongoing and evolving impact of the coronavirus (COVID-19) pandemic and its variants or other pandemics on our members, our business, the economy and capital markets;

•Governmental actions, including legislative, regulatory, judicial or other developments that affect FHLBank; its members, counterparties or investors; housing government-sponsored enterprises (GSE); or the FHLBank System in general;

•Effects of derivative accounting treatment and other accounting rule requirements, or changes in such requirements;

•Competitive forces, including competition for loan demand, purchases of mortgage loans and access to funding;

•The ability of FHLBank to introduce new products and services to meet market demand and to manage successfully the risks associated with all products and services;

•Changes in demand for FHLBank products and services or consolidated obligations of the FHLBank System;

•Membership changes, including changes resulting from member failures or mergers, changes due to member eligibility, or changes in the principal place of business of members;

•Changes in the U.S. government’s long-term debt rating and the long-term credit rating of the senior unsecured debt issues of the FHLBank System;

•Soundness of other financial institutions, including FHLBank members, non-member borrowers, counterparties, and the other FHLBanks;

•The ability of each of the other FHLBanks to repay the principal and interest on consolidated obligations for which it is the primary obligor and with respect to which FHLBank has joint and several liability;

•The volume and quality of eligible mortgage loans originated and sold by participating members to FHLBank through its various mortgage finance products (Mortgage Partnership Finance® (MPF®) Program). “Mortgage Partnership Finance,” “MPF,” “MPF Xtra,” and “MPF Direct” are registered trademarks of FHLBank Chicago.

•Changes in the fair value and economic value of, impairments of, and risks associated with, FHLBank’s investments in mortgage loans and mortgage-backed securities (MBS) or other assets and related credit enhancement protections;

•Changes in the value or liquidity of collateral underlying advances to FHLBank members or non-member borrowers or collateral pledged by reverse repurchase and derivative counterparties;

•Volatility of market prices, changes in interest rates and indices and the timing and volume of market activity, including the effects of these factors on amortization/accretion;

•Gains/losses on derivatives or on trading investments and the ability to enter into effective derivative instruments on acceptable terms;

•The upcoming discontinuance of the London Interbank Offered Rate (LIBOR) and the related effect on FHLBank's LIBOR-based financial products, investments, contracts and the collateral underlying advances to our members;

•Changes in FHLBank’s capital structure;

•FHLBank's ability to declare dividends or to pay dividends at rates consistent with past practices; and

•The ability of FHLBank to keep pace with technological changes and the ability to develop and support technology and information systems, including the ability to securely access the internet and internet-based systems and services, sufficient to effectively manage the risks of FHLBank’s business.

4

Readers of this quarterly report should not rely solely on the forward-looking statements and should consider all risks and uncertainties addressed throughout this quarterly report, as well as those discussed under Part I, Item 1A – Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2020, incorporated by reference herein.

All forward-looking statements contained in this Form 10-Q are expressly qualified in their entirety by reference to this cautionary notice. The reader should not place undue reliance on such forward-looking statements, since the statements speak only as of the date that they are made and FHLBank has no obligation and does not undertake publicly to update, revise or correct any forward-looking statement for any reason to reflect events or circumstances after the date of this quarterly report.

PART I

Item 1: Financial Statements

5

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF CONDITION - Unaudited
(In thousands, except par value)
	09/30/2021		12/31/2020
ASSETS
Cash and due from banks	$	29,740	$	4,570,415
Interest-bearing deposits	569,222		760,297
Securities purchased under agreements to resell (Note 9)	2,100,000		2,600,000
Federal funds sold	1,958,000		1,780,000
Investment securities:
Trading securities (Note 3)	2,622,397		2,623,376
Available-for-sale securities, amortized cost of $7,702,388 and $6,696,114 (Note 3)	7,776,188		6,741,310
Held-to-maturity securities, fair value of $437,848 and $2,750,116 (Note 3)	433,286		2,746,992
Total investment securities	10,831,871		12,111,678
Advances (Note 4)	21,411,103		21,226,823
Mortgage loans held for portfolio, net of allowance for credit losses of $6,324 and $5,177 (Note 6)	8,315,791		9,205,207
Accrued interest receivable	83,013		97,718
Derivative assets, net (Notes 6, 9)	134,679		148,868
Other assets	82,804		90,706
TOTAL ASSETS	$	45,516,223	$	52,591,712
LIABILITIES
Deposits (Note 7)	$	1,033,557	$	1,229,361
Consolidated obligations, net:
Discount notes (Note 8)	10,277,237		10,882,417
Bonds (Note 8)	31,477,780		37,648,077
Total consolidated obligations, net	41,755,017		48,530,494
Mandatorily redeemable capital stock (Note 10)	607		1,624
Accrued interest payable	38,036		45,575
Affordable Housing Program payable	40,188		41,129
Derivative liabilities, net (Notes 6, 9)	7,845		4,404
Other liabilities	69,777		71,358
TOTAL LIABILITIES	42,945,027		49,923,945
Commitments and contingencies (Note 13)

The accompanying notes are an integral part of these financial statements.

6

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF CONDITION - Unaudited
(In thousands, except par value)
	09/30/2021		12/31/2020
CAPITAL
Capital stock outstanding - putable:
Class A ($100 par value; 2,218 and 4,122 shares issued and outstanding) (Note 10)	$	221,824	$	412,225
Class B ($100 par value; 11,607 and 11,618 shares issued and outstanding) (Note 10)	1,160,658		1,161,779
Total capital stock	1,382,482		1,574,004
Retained earnings:
Unrestricted	836,586		793,331
Restricted	280,974		258,124
Total retained earnings	1,117,560		1,051,455
Accumulated other comprehensive income (loss) (Note 11)	71,154		42,308
TOTAL CAPITAL	2,571,196		2,667,767
TOTAL LIABILITIES AND CAPITAL	$	45,516,223	$	52,591,712

The accompanying notes are an integral part of these financial statements.

7

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF INCOME - Unaudited
(In thousands)
	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
INTEREST INCOME:
Interest-bearing deposits	$	230	$	471	$	714	$	5,736
Securities purchased under agreements to resell	460		1,378		1,350		16,906
Federal funds sold	567		575		1,547		4,517
Trading securities	16,122		18,099		48,990		56,371
Available-for-sale securities	10,701		9,588		29,589		43,753
Held-to-maturity securities	996		4,540		6,781		29,024
Advances	29,925		38,848		95,677		230,000
Mortgage loans held for portfolio	53,438		64,192		158,359		222,962
Other	228		286		727		940
Total interest income	112,667		137,977		343,734		610,209
INTEREST EXPENSE:
Deposits	101		76		312		1,707
Consolidated obligations:
Discount notes	1,326		5,674		4,393		120,385
Bonds	37,729		67,142		124,395		310,628
Mandatorily redeemable capital stock	1		12		19		50
Other	250		285		756		888
Total interest expense	39,407		73,189		129,875		433,658
NET INTEREST INCOME	73,260		64,788		213,859		176,551
Provision (reversal) for credit losses on mortgage loans	(1,660)		116		638		717
NET INTEREST INCOME AFTER LOAN LOSS PROVISION (REVERSAL)	74,920		64,672		213,221		175,834
OTHER INCOME (LOSS):
Net gains (losses) on trading securities	(16,369)		(6,995)		(56,527)		92,769
Net gains (losses) on sale of available-for-sale securities	—		—		—		1,523
Net gains (losses) on derivatives	(1,396)		2,026		16,170		(135,581)
Standby bond purchase agreement commitment fees	627		560		1,878		1,660
Letters of credit fees	1,429		1,663		4,700		4,705
Other	951		1,112		2,983		(191)
Total other income (loss)	(14,758)		(1,634)		(30,796)		(35,115)

The accompanying notes are an integral part of these financial statements.

8

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF INCOME - Unaudited
(In thousands)
	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
OTHER EXPENSES:
Compensation and benefits	$	9,429	$	10,014	$	29,180	$	29,533
Other operating	5,144		4,365		14,190		13,840
Federal Housing Finance Agency	1,110		1,023		3,329		3,068
Office of Finance	1,161		1,036		3,255		2,889
Mortgage loans transaction service fees	1,583		1,946		4,832		6,029
Other	201		226		692		5,290
Total other expenses	18,628		18,610		55,478		60,649
INCOME BEFORE ASSESSMENTS	41,534		44,428		126,947		80,070
Affordable Housing Program	4,154		4,444		12,697		8,012
NET INCOME	$	37,380	$	39,984	$	114,250	$	72,058

The accompanying notes are an integral part of these financial statements.

9

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF COMPREHENSIVE INCOME - Unaudited
(In thousands)
	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Net income	$	37,380	$	39,984	$	114,250	$	72,058
Other comprehensive income (loss):
Net unrealized gains (losses) on available-for-sale securities	(22,482)		30,295		28,604		(28,239)
Defined benefit pension plan	92		28		242		82
Total other comprehensive income (loss)	(22,390)		30,323		28,846		(28,157)
TOTAL COMPREHENSIVE INCOME (LOSS)	$	14,990	$	70,307	$	143,096	$	43,901

The accompanying notes are an integral part of these financial statements.

10

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF CAPITAL - Unaudited
(In thousands)
	Capital Stock1									Retained Earnings						Accumulated		Total Capital
																Other
	Class A			Class B			Total									Comprehensive
	Shares	Par Value		Shares	Par Value		Shares	Par Value		Unrestricted		Restricted		Total		Income (Loss)
Balance at June 30, 2020	5,007	$	500,679	8,913	$	891,324	13,920	$	1,392,003	$	755,700	$	240,929	$	996,629	$	(33,694)	$	2,354,938
Comprehensive income										31,987		7,997		39,984		30,323		70,307
Proceeds from issuance of capital stock	2	222		8,208	820,820		8,210	821,042										821,042
Repurchase/redemption of capital stock	—	—		(257)	(25,724)		(257)	(25,724)										(25,724)
Net reclassification of shares to mandatorily redeemable capital stock	(1,987)	(198,626)		(4,219)	(421,935)		(6,206)	(620,561)										(620,561)
Net transfer of shares between Class A and Class B	850	84,932		(850)	(84,932)		—	—										—
Dividends on capital stock (Class A - 0.3%, Class B - 5.2%):
Cash payment										(66)				(66)				(66)
Stock issued				140	13,981		140	13,981		(13,981)				(13,981)				—
Balance at September 30, 2020	3,872	$	387,207	11,935	$	1,193,534	15,807	$	1,580,741	$	773,640	$	248,926	$	1,022,566	$	(3,371)	$	2,599,936
	Capital Stock1									Retained Earnings						Accumulated		Total Capital
																Other
	Class A			Class B			Total									Comprehensive
	Shares	Par Value		Shares	Par Value		Shares	Par Value		Unrestricted		Restricted		Total		Income (Loss)
Balance at June 30, 2021	3,279	$	327,885	11,288	$	1,128,851	14,567	$	1,456,736	$	822,793	$	273,498	$	1,096,291	$	93,544	$	2,646,571
Comprehensive income										29,904		7,476		37,380		(22,390)		14,990
Proceeds from issuance of capital stock	—	21		3,555	355,550		3,555	355,571										355,571
Repurchase/redemption of capital stock	(3,785)	(378,548)		(669)	(66,866)		(4,454)	(445,414)										(445,414)
Net reclassification of shares to mandatorily redeemable capital stock	(1)	(109)		(3)	(351)		(4)	(460)										(460)
Net transfer of shares between Class A and Class B	2,725	272,575		(2,725)	(272,575)		—	—										—
Dividends on capital stock (Class A - 0.3%, Class B - 5.3%):
Cash payment										(62)				(62)				(62)
Stock issued				161	16,049		161	16,049		(16,049)				(16,049)				—
Balance at September 30, 2021	2,218	$	221,824	11,607	$	1,160,658	13,825	$	1,382,482	$	836,586	$	280,974	$	1,117,560	$	71,154	$	2,571,196

1    Putable

The accompanying notes are an integral part of these financial statements.

11

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF CAPITAL - Unaudited
(In thousands)
	Capital Stock1									Retained Earnings						Accumulated		Total Capital
																Other
	Class A			Class B			Total									Comprehensive
	Shares	Par Value		Shares	Par Value		Shares	Par Value		Unrestricted		Restricted		Total		Income (Loss)
Balance at December 31, 2019	4,476	$	447,610	13,188	$	1,318,846	17,664	$	1,766,456	$	765,295	$	234,514	$	999,809	$	24,786	$	2,791,051
Adjustment for cumulative effect of accounting change										(6,123)		—		(6,123)				(6,123)
Comprehensive income										57,646		14,412		72,058		(28,157)		43,901
Proceeds from issuance of capital stock	10	1,035		13,713	1,371,346		13,723	1,372,381										1,372,381
Repurchase/redemption of capital stock	—	—		(843)	(84,358)		(843)	(84,358)										(84,358)
Net reclassification of shares to mandatorily redeemable capital stock	(8,608)	(860,766)		(6,664)	(666,486)		(15,272)	(1,527,252)										(1,527,252)
Net transfer of shares between Class A and Class B	7,994	799,328		(7,994)	(799,328)		—	—										—
Partial recovery of prior capital distribution to Financing Corporation										10,543		—		10,543				10,543
Dividends on capital stock (Class A - 0.9%, Class B - 6.1%):
Cash payment										(207)				(207)				(207)
Stock issued				535	53,514		535	53,514		(53,514)				(53,514)				—
Balance at September 30, 2020	3,872	$	387,207	11,935	$	1,193,534	15,807	$	1,580,741	$	773,640	$	248,926	$	1,022,566	$	(3,371)	$	2,599,936
	Capital Stock1									Retained Earnings						Accumulated		Total Capital
																Other
	Class A			Class B			Total									Comprehensive
	Shares	Par Value		Shares	Par Value		Shares	Par Value		Unrestricted		Restricted		Total		Income (Loss)
Balance at December 31, 2020	4,122	$	412,225	11,618	$	1,161,779	15,740	$	1,574,004	$	793,331	$	258,124	$	1,051,455	$	42,308	$	2,667,767
Comprehensive income										91,400		22,850		114,250		28,846		143,096
Proceeds from issuance of capital stock	35	3,492		11,722	1,172,239		11,757	1,175,731										1,175,731
Repurchase/redemption of capital stock	(7,323)	(732,322)		(984)	(98,373)		(8,307)	(830,695)										(830,695)
Net reclassification of shares to mandatorily redeemable capital stock	(4,661)	(466,079)		(1,184)	(118,433)		(5,845)	(584,512)										(584,512)
Net transfer of shares between Class A and Class B	10,045	1,004,508		(10,045)	(1,004,508)		—	—										—
Dividends on capital stock (Class A - 0.3%, Class B - 5.3%):
Cash payment										(191)				(191)				(191)
Stock issued				480	47,954		480	47,954		(47,954)				(47,954)				—
Balance at September 30, 2021	2,218	$	221,824	11,607	$	1,160,658	13,825	$	1,382,482	$	836,586	$	280,974	$	1,117,560	$	71,154	$	2,571,196

1    Putable

The accompanying notes are an integral part of these financial statements.

12

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF CASH FLOWS - Unaudited
(In thousands)
	Nine Months Ended
	09/30/2021		09/30/2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	114,250	$	72,058
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization:
Premiums and discounts on consolidated obligations, net	(12,044)		(50,162)
Concessions on consolidated obligations	4,794		24,029
Premiums and discounts on investments, net	12,138		14,556
Premiums, discounts and commitment fees on advances, net	(4,055)		(3,385)
Premiums, discounts and deferred loan costs on mortgage loans, net	41,102		47,349
Fair value adjustments on hedged assets or liabilities	3,296		3,568
Premises, software and equipment	2,466		2,498
Other	242		82
Provision (reversal) for credit losses on mortgage loans	638		717
Non-cash interest on mandatorily redeemable capital stock	18		49
Net realized (gains) losses on sale of available-for-sale securities	—		(1,523)
Net realized (gains) losses on disposal of premises, software and equipment	—		3,471
Other adjustments, net	(312)		4,366
Net (gains) losses on trading securities	56,527		(92,769)
Net change in derivatives and hedging activities	186,782		(288,215)
(Increase) decrease in accrued interest receivable	15,242		36,037
Change in net accrued interest included in derivative assets	(9,707)		30,973
(Increase) decrease in other assets	2,024		1,407
Increase (decrease) in accrued interest payable	(8,064)		(63,193)
Change in net accrued interest included in derivative liabilities	(2,848)		(117)
Increase (decrease) in Affordable Housing Program liability	(941)		(3,677)
Increase (decrease) in other liabilities	(1,469)		(1,849)
Total adjustments	285,829		(335,788)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	400,079		(263,730)

The accompanying notes are an integral part of these financial statements.

13

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF CASH FLOWS - Unaudited
(In thousands)
	Nine Months Ended
	09/30/2021		09/30/2020
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in interest-bearing deposits	$	316,633	$	145,874
Net (increase) decrease in securities purchased under resale agreements	500,000		150,000
Net (increase) decrease in Federal funds sold	(178,000)		(585,000)
Proceeds from sale of trading securities	—		275,186
Proceeds from maturities of and principal repayments on trading securities	1,644,453		337,209
Purchases of trading securities	(1,700,000)		(825,000)
Proceeds from sale of available-for-sale securities	—		289,045
Proceeds from maturities of and principal repayments on available-for-sale securities	1,869,039		300,801
Purchases of available-for-sale securities	(1,028,471)		(430,610)
Proceeds from maturities of and principal repayments on held-to-maturity securities	298,161		594,829
Advances repaid	351,412,211		252,632,071
Advances originated	(351,732,390)		(244,759,865)
Principal collected on mortgage loans	2,591,290		2,878,144
Purchases of mortgage loans	(1,746,333)		(2,401,848)
Proceeds from sale of foreclosed assets	1,251		793
Other investing activities	2,653		2,481
Purchases of premises, software and equipment	(1,116)		(568)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	2,249,381		8,603,542
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits	(196,104)		225,977
Net proceeds from issuance of consolidated obligations:
Discount notes	239,623,829		500,327,628
Bonds	28,680,364		34,971,746
Payments for maturing and retired consolidated obligations:
Discount notes	(240,229,128)		(515,803,859)
Bonds	(34,809,900)		(29,717,000)
Proceeds from financing derivatives	—		3,470
Net interest payments received (paid) for financing derivatives	(18,494)		(12,793)
Proceeds from issuance of capital stock	1,175,731		1,372,381
Payments for repurchase/redemption of capital stock	(830,695)		(84,358)
Payments for repurchase of mandatorily redeemable capital stock	(585,547)		(1,527,802)
Cash dividends paid	(191)		(207)
Partial recovery of prior capital distribution to Financing Corporation	—		10,543
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(7,190,135)		(10,234,274)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(4,540,675)		(1,894,462)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	4,570,415		1,917,166
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	29,740	$	22,704

The accompanying notes are an integral part of these financial statements.

14

FEDERAL HOME LOAN BANK OF TOPEKA
STATEMENTS OF CASH FLOWS - Unaudited
(In thousands)
	Nine Months Ended
	09/30/2021		09/30/2020
Supplemental disclosures:
Interest paid	$	145,606	$	523,348
Affordable Housing Program payments	$	13,978	$	11,783
Net transfers of mortgage loans to other assets	$	449	$	670
Transfer    of held-to-maturity securities to available-for-sale securities with the adoption of the reference rate reform guidance	$	2,019,635	$	—

The accompanying notes are an integral part of these financial statements.

15

FEDERAL HOME LOAN BANK OF TOPEKA

Notes to Financial Statements - Unaudited

September 30, 2021

NOTE 1 – BASIS OF PRESENTATION

Basis of Presentation: The accompanying interim financial statements of FHLBank are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instruction provided by Article 10, Rule 10-01 of Regulation S-X. The financial statements contain all adjustments which are, in the opinion of management, necessary for a fair statement of FHLBank’s financial position, results of operations and cash flows for the interim periods presented. All such adjustments were of a normal recurring nature. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full fiscal year or any other interim period.

FHLBank’s significant accounting policies and certain other disclosures are set forth in the notes to the audited financial statements for the year ended December 31, 2020. The interim financial statements presented herein should be read in conjunction with FHLBank’s audited financial statements and notes thereto, which are included in FHLBank’s annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 18, 2021 (annual report on Form 10-K). The notes to the interim financial statements highlight significant changes to the notes included in the annual report on Form 10-K.

Use of Estimates: The preparation of financial statements under GAAP requires management to make estimates and assumptions as of the date of the financial statements in determining the reported amounts of assets, liabilities and estimated fair values and in determining the disclosure of any contingent assets or liabilities. Estimates and assumptions by management also affect the reported amounts of income and expense during the reporting period. The most significant of these estimates include the fair value of trading and available-for-sale securities and the fair value of derivatives. Many of the estimates and assumptions, including those used in financial models, are based on financial market conditions as of the date of the financial statements. Because of the volatility of the financial markets, as well as other factors that affect management estimates, actual results may vary from these estimates.

NOTE 2 – RECENTLY ISSUED ACCOUNTING STANDARDS AND INTERPRETATIONS AND CHANGES IN AND ADOPTIONS OF ACCOUNTING PRINCIPLES

Reference Rate Reform (Accounting Standards Update (ASU) 2021-01). In January 2021, the Financial Accounting Standards Board (FASB) issued an amendment that refines the scope of Accounting Standards Codification (ASC) 848 and clarifies the guidance issued to facilitate the effects of reference rate reform on financial reporting. The amendment permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements and calculating price alignment interest in connection with reference rate reform activities. During the fourth quarter of 2020, FHLBank elected applicable optional expedients specific to discounting transition on a retrospective basis. As a result of electing this expedient, discounting transition did not have a material effect on FHLBank's financial condition, results of operations, or cash flows. This guidance was effective immediately for FHLBank and was applied consistently with the optional expedient guidance under ASU 2020-04, described below.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). In March 2020, the FASB issued temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The transactions primarily include: (1) contract modifications; (2) hedging relationships; and (3) sale or transfer of debt securities classified as held-to-maturity. During the second quarter of 2021, FHLBank adopted a provision of ASU 2020-04 which allows a one-time election to sell, transfer, or both sell and transfer debt securities classified as held-to-maturity that reference a rate affected by reference rate reform and that were classified as held-to-maturity before January 1, 2020 by transferring LIBOR-indexed securities. See Note 3 – Investments for additional information related to this transfer. This guidance was effective immediately for FHLBank, and the amendments may be applied prospectively through December 31, 2022. FHLBank is in the process of evaluating the guidance and the other optional expedients, and the effect on FHLBank's financial condition, results of operations and cash flows has not yet been determined.

16

NOTE 3 – INVESTMENTS

FHLBank's investment portfolio consists of interest-bearing deposits, securities purchased under agreements to resell, Federal funds sold, and debt securities.

Interest-Bearing Deposits, Securities Purchased under Agreements to Resell, and Federal Funds Sold: FHLBank invests in interest-bearing deposits, securities purchased under agreements to resell, and Federal funds sold to provide short-term liquidity. These investments are generally transacted with counterparties that have received a credit rating of triple-B or greater (investment grade) by a Nationally Recognized Statistical Ratings Organization (NRSRO). These may differ from internal ratings of the investments, if applicable. As of September 30, 2021, approximately 32 percent of these overnight investments were with counterparties not rated by an NRSRO. All transactions with unrated counterparties are secured transactions.

Federal funds sold are unsecured loans that are generally transacted on an overnight term. Federal Housing Finance Agency (FHFA) regulations include a limit on the amount of unsecured credit FHLBank may extend to a counterparty. As of September 30, 2021 and December 31, 2020, all investments in interest-bearing deposits and Federal funds sold were repaid or expected to be repaid according to the contractual terms. No allowance for credit losses was recorded for these assets as of September 30, 2021 and December 31, 2020. Carrying values of interest-bearing deposits and Federal funds sold exclude accrued interest receivable of $51,000 and $3,000, respectively, as of September 30, 2021, and $80,000 and $3,000, respectively, as of December 31, 2020.

Securities purchased under agreements to resell are short-term and are structured such that they are evaluated regularly to determine if the market value of the underlying securities decreases below the market value required as collateral (i.e., subject to collateral maintenance provisions). Based upon the collateral held as security and collateral maintenance provisions with its counterparties, FHLBank determined that no allowance for credit losses was needed for its securities purchased under agreements to resell as of September 30, 2021 and December 31, 2020. The carrying value of securities purchased under agreements to resell excludes accrued interest receivable of $5,000 and $6,000 as of September 30, 2021 and December 31, 2020, respectively.

Debt Securities: FHLBank invests in debt securities, which are classified as either trading, available-for-sale, or held-to-maturity. FHLBank is prohibited by FHFA regulations from purchasing certain higher-risk securities, such as equity securities and debt instruments that are not investment quality, other than certain investments targeted at low-income persons or communities and instruments that experienced credit deterioration after their purchase by FHLBank.

FHLBank's debt securities include the following major security types, which are based on the issuer and the risk characteristics of the security:

▪Certificates of deposit - unsecured negotiable promissory notes issued by banks;

▪U.S. Treasury obligations - sovereign debt of the United States;

▪GSE debentures - debentures issued by other FHLBanks, Federal National Mortgage Association (Fannie Mae), Federal Farm Credit Bank and Federal Agricultural Mortgage Corporation. GSE securities are not guaranteed by the U.S. government;

▪State or local housing agency obligations - municipal bonds issued by housing finance agencies;

▪U.S. obligation MBS - single-family MBS issued by Government National Mortgage Association (Ginnie Mae), which are guaranteed by the U.S. government; and

▪GSE MBS - single-family and multifamily MBS issued by Fannie Mae and Federal Home Loan Mortgage Corporation (Freddie Mac).

17

Trading Securities: Trading securities by major security type as of September 30, 2021 and December 31, 2020 are summarized in Table 3.1 (in thousands):

Table 3.1

	Fair Value
	09/30/2021		12/31/2020
Non-mortgage-backed securities:
Certificates of deposit	$	200,009	$	—
U.S. Treasury obligations	1,176,148		1,298,518
GSE debentures	421,980		431,875
Non-mortgage-backed securities	1,798,137		1,730,393
Mortgage-backed securities:
GSE MBS	824,260		892,983
Mortgage-backed securities	824,260		892,983
TOTAL	$	2,622,397	$	2,623,376

Net gains (losses) on trading securities during the three and nine months ended September 30, 2021 and 2020 are shown in Table 3.2 (in thousands):

Table 3.2

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Net gains (losses) on trading securities held as of September 30, 2021	$	(15,807)	$	(5,226)	$	(51,126)	$	90,202
Net gains (losses) on trading securities sold or matured prior to September 30, 2021	(562)		(1,769)		(5,401)		2,567
NET GAINS (LOSSES) ON TRADING SECURITIES	$	(16,369)	$	(6,995)	$	(56,527)	$	92,769

Available-for-sale Securities: Available-for-sale securities by major security type as of September 30, 2021 are summarized in Table 3.3 (in thousands). Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, and fair value hedge accounting adjustments, and excludes accrued interest receivable of $18,209,000 as of September 30, 2021.

Table 3.3

	09/30/2021
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
U.S. Treasury obligations	$	2,840,450	$	3,220	$	(1,071)	$	2,842,599
Non-mortgage-backed securities	2,840,450		3,220		(1,071)		2,842,599
Mortgage-backed securities:
U.S. obligation MBS	55,083		266		(7)		55,342
GSE MBS	4,806,855		74,196		(2,804)		4,878,247
Mortgage-backed securities	4,861,938		74,462		(2,811)		4,933,589
TOTAL	$	7,702,388	$	77,682	$	(3,882)	$	7,776,188

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Available-for-sale securities by major security type as of December 31, 2020 are summarized in Table 3.4 (in thousands). Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, and fair value hedge accounting adjustments, and excludes accrued interest receivable of $26,977,000 as of December 31, 2020.

Table 3.4

	12/31/2020
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
U.S. Treasury obligations	$	3,541,411	$	4,931	$	(17)	$	3,546,325
Non-mortgage-backed securities	3,541,411		4,931		(17)		3,546,325
Mortgage-backed securities:
GSE MBS	3,154,703		44,724		(4,442)		3,194,985
Mortgage-backed securities	3,154,703		44,724		(4,442)		3,194,985
TOTAL	$	6,696,114	$	49,655	$	(4,459)	$	6,741,310

Table 3.5 summarizes the available-for-sale securities with unrealized losses as of September 30, 2021 (in thousands). The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

Table 3.5

	09/30/2021
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Non-mortgage-backed securities:
U.S. Treasury obligations	$	592,578	$	(1,071)	$	—	$	—	$	592,578	$	(1,071)
Non-mortgage-backed securities	592,578		(1,071)		—		—		592,578		(1,071)
Mortgage-backed securities:
U.S. obligation MBS	—		—		6,589		(7)		6,589		(7)
GSE MBS	326,356		(1,071)		820,015		(1,733)		1,146,371		(2,804)
Mortgage-backed securities	326,356		(1,071)		826,604		(1,740)		1,152,960		(2,811)
TOTAL	$	918,934	$	(2,142)	$	826,604	$	(1,740)	$	1,745,538	$	(3,882)

19

Table 3.6 summarizes the available-for-sale securities with unrealized losses as of December 31, 2020 (in thousands). The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

Table 3.6

	12/31/2020
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Non-mortgage-backed securities:
U.S. Treasury obligations	$	250,436	$	(17)	$	—	$	—	$	250,436	$	(17)
Non-mortgage-backed securities	250,436		(17)		—		—		250,436		(17)
Mortgage-backed securities:
GSE MBS	—		—		363,724		(4,442)		363,724		(4,442)
Mortgage-backed securities	—		—		363,724		(4,442)		363,724		(4,442)
TOTAL	$	250,436	$	(17)	$	363,724	$	(4,442)	$	614,160	$	(4,459)

The amortized cost and fair values of available-for-sale securities by contractual maturity as of September 30, 2021 and December 31, 2020 are shown in Table 3.7 (in thousands). Expected maturities of MBS will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

Table 3.7

	09/30/2021				12/31/2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Non-mortgage-backed securities:
Due in one year or less	$	958,778	$	959,599	$	1,767,608	$	1,768,588
Due after one year through five years	1,881,672		1,883,000		1,773,803		1,777,737
Due after five years through ten years	—		—		—		—
Due after ten years	—		—		—		—
Non-mortgage-backed securities	2,840,450		2,842,599		3,541,411		3,546,325
Mortgage-backed securities	4,861,938		4,933,589		3,154,703		3,194,985
TOTAL	$	7,702,388	$	7,776,188	$	6,696,114	$	6,741,310

Net gains (losses) realized on the sale of available-for-sale securities are recorded in other income (loss) on the Statements of Income. Table 3.8 presents details of the sales for the nine months ended September 30, 2020 (in thousands). There were no sales of available-for-sale securities during the nine months ended September 30, 2021 or during the three months ended September 30, 2021 and 2020.

Table 3.8

	Nine Months Ended
	09/30/2020
Proceeds from sale of available-for-sale securities	$	289,045
Gross gains on sale of available-for-sale securities	$	1,526
Gross losses on sale of available-for-sale securities	(3)
NET GAINS (LOSSES) ON SALE OF AVAILABLE-FOR-SALE SECURITIES	$	1,523

20

Held-to-maturity Securities: Held-to-maturity securities by major security type as of September 30, 2021 are summarized in Table 3.9 (in thousands). Carrying value equals amortized cost, which includes adjustments made to the cost basis of an investment for accretion and amortization, and excludes accrued interest receivable of $273,000 as of September 30, 2021.

Table 3.9

	09/30/2021
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
State or local housing agency obligations	$	78,095	$	—	$	(2,204)	$	75,891
Non-mortgage-backed securities	78,095		—		(2,204)		75,891
Mortgage-backed securities:
GSE MBS	355,191		6,781		(15)		361,957
Mortgage-backed securities	355,191		6,781		(15)		361,957
TOTAL	$	433,286	$	6,781	$	(2,219)	$	437,848

Held-to-maturity securities by major security type as of December 31, 2020 are summarized in Table 3.10 (in thousands). Carrying value equals amortized cost, which includes adjustments made to the cost basis of an investment for accretion and amortization, and excludes accrued interest receivable of $930,000 as of December 31, 2020.

Table 3.10

	12/31/2020
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
State or local housing agency obligations	$	78,960	$	—	$	(3,290)	$	75,670
Non-mortgage-backed securities	78,960		—		(3,290)		75,670
Mortgage-backed securities:
U.S. obligation MBS	70,814		135		(59)		70,890
GSE MBS	2,597,218		10,208		(3,870)		2,603,556
Mortgage-backed securities	2,668,032		10,343		(3,929)		2,674,446
TOTAL	$	2,746,992	$	10,343	$	(7,219)	$	2,750,116

21

The amortized cost and fair values of held-to-maturity securities by contractual maturity as of September 30, 2021 and December 31, 2020 are shown in Table 3.11 (in thousands). Expected maturities of certain securities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

Table 3.11

	09/30/2021				12/31/2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Non-mortgage-backed securities:
Due in one year or less	$	—	$	—	$	—	$	—
Due after one year through five years	—		—		—		—
Due after five years through ten years	48,095		47,047		48,960		47,280
Due after ten years	30,000		28,844		30,000		28,390
Non-mortgage-backed securities	78,095		75,891		78,960		75,670
Mortgage-backed securities	355,191		361,957		2,668,032		2,674,446
TOTAL	$	433,286	$	437,848	$	2,746,992	$	2,750,116

During the second quarter of 2021, FHLBank adopted a provision of ASU 2020-04 which allows a one-time election to sell, transfer, or both sell and transfer debt securities classified as held-to-maturity that reference a rate affected by reference rate reform and that were classified as held-to-maturity before January 1, 2020. Upon adopting the provision, FHLBank transferred held-to-maturity securities with an amortized cost of $2,019,635,000 to available-for-sale and recorded unrealized gains in accumulated other comprehensive income (AOCI) of $4,059,000.

Allowance for Credit Losses on Available-for-Sale and Held-to-Maturity Securities: FHLBank evaluates available-for-sale and held-to-maturity investment securities for credit losses on a quarterly basis. As of September 30, 2021 and December 31, 2020, FHLBank did not recognize a provision for credit losses associated with available-for-sale investments or held-to-maturity investments.

Although certain available-for-sale securities were in an unrealized loss position, these losses are considered temporary as FHLBank expects to recover the entire amortized cost basis on these available-for-sale investment securities. FHLBank neither intends to sell these securities nor considers it more likely than not that it will be required to sell these securities before its anticipated recovery of each security's remaining amortized cost basis. Further, FHLBank has not experienced any payment defaults on the instruments, and all of these securities carry an implicit or explicit government guarantee.

FHLBank's held-to-maturity securities: (1) were all highly rated and/or had short remaining terms to maturity; (2) had not experienced, nor did FHLBank expect, any payment default on the instruments; and (3) in the case of U.S. obligations or GSE MBS, carry an implicit or explicit government guarantee such that FHLBank considers the risk of nonpayment to be zero.

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NOTE 4 – ADVANCES

General Terms: FHLBank offers a wide range of fixed and variable rate advance products with different maturities, interest rates, payment characteristics and optionality. As of September 30, 2021 and December 31, 2020, FHLBank had advances outstanding at interest rates ranging from 0.11 percent to 7.20 percent. Table 4.1 presents advances summarized by redemption term as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands). Carrying amounts exclude accrued interest receivable of $12,887,000 and $15,588,000 as of September 30, 2021 and December 31, 2020, respectively.

Table 4.1

	09/30/2021				12/31/2020
Redemption Term	Amount		Weighted Average Interest Rate		Amount		Weighted Average Interest Rate
Due in one year or less	$	12,278,130	0.36	%	$	12,540,970	0.45	%
Due after one year through two years	1,470,363		1.26		1,591,133		1.20
Due after two years through three years	1,927,315		1.20		1,268,307		1.73
Due after three years through four years	1,482,542		1.16		1,305,047		1.47
Due after four years through five years	988,112		1.31		1,033,221		1.40
Thereafter	3,150,229		1.81		3,233,763		1.90
Total par value	21,296,691		0.81	%	20,972,441		0.92	%
Discounts	(18,004)				(18,071)
Hedging adjustments	132,416				272,453
TOTAL	$	21,411,103			$	21,226,823

FHLBank’s outstanding advances 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). In exchange for receiving the right to call the advance on a predetermined call schedule, the borrower may pay a higher fixed rate for the advance relative to an equivalent maturity, non-callable, fixed rate advance. The borrower normally exercises its call options on these advances when interest rates decline (fixed rate advances) or spreads change (adjustable rate advances).

Convertible advances allow FHLBank to convert an advance from one interest payment term structure to another. When issuing convertible advances, FHLBank purchases put options from a member that allow 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. In October 2020, FHLBank placed a moratorium on the issuance of convertible advances; however, $1,497,150,000 remain outstanding.

Table 4.2 presents advances summarized by redemption term or next call date (for callable advances) and by redemption term or next conversion date (for convertible advances) as of September 30, 2021 and December 31, 2020 (in thousands):

Table 4.2

	Redemption Term or Next Call Date				Redemption Term or Next Conversion Date
Redemption Term	09/30/2021		12/31/2020		09/30/2021		12/31/2020
Due in one year or less	$	13,641,513	$	14,271,213	$	13,362,130	$	13,563,370
Due after one year through two years	1,230,999		1,161,239		1,697,613		1,861,133
Due after two years through three years	1,459,489		981,503		2,009,815		1,489,057
Due after three years through four years	1,085,312		773,881		1,533,942		1,400,447
Due after four years through five years	985,276		796,495		987,762		1,008,871
Thereafter	2,894,102		2,988,110		1,705,429		1,649,563
TOTAL PAR VALUE	$	21,296,691	$	20,972,441	$	21,296,691	$	20,972,441

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Interest Rate Payment Terms: Table 4.3 details additional interest rate payment terms for advances as of September 30, 2021 and December 31, 2020 (in thousands):

Table 4.3

Redemption Term	09/30/2021		12/31/2020
Fixed rate:
Due in one year or less	$	11,491,130	$	9,838,379
Due after one year	6,876,299		6,663,459
Total fixed rate	18,367,429		16,501,838
Variable rate:
Due in one year or less	787,000		2,702,591
Due after one year	2,142,262		1,768,012
Total variable rate	2,929,262		4,470,603
TOTAL PAR VALUE	$	21,296,691	$	20,972,441

Credit Risk Exposure and Security Terms: FHLBank manages its credit exposure to advances through an integrated 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 FHLBank's collateral and lending policies to limit risk of loss, while balancing borrowers' needs for a reliable source of funding. Using a risk-based approach and taking into consideration each borrower's financial strength, FHLBank considers the types and level of collateral to be the primary indicator of credit quality on advances. As of September 30, 2021 and December 31, 2020, FHLBank had rights to collateral on a borrower-by-borrower basis with an estimated value greater than its outstanding advances.

FHLBank continues to evaluate and make changes to its collateral guidelines, as necessary, based on current market conditions. As of September 30, 2021 and December 31, 2020, no advances were past due, on non-accrual status, or considered impaired. In addition, there were no troubled debt restructurings related to advances during the three and nine months ended September 30, 2021 and 2020.

Based on the collateral held as security, FHLBank's credit extension and collateral policies, and repayment history on advances, no losses are expected on advances as of September 30, 2021 and December 31, 2020, and therefore no allowance for credit losses on advances was recorded.

NOTE 5 – MORTGAGE LOANS

Mortgage loans held for portfolio consist of loans obtained through the MPF Program and are either conventional mortgage loans or government-guaranteed or -insured mortgage loans. Under the MPF Program, FHLBank purchases single-family mortgage loans that are originated or acquired by Participating Financial Institutions (PFI). These mortgage loans are credit-enhanced by PFIs or are guaranteed or insured by Federal agencies.

24

Mortgage Loans Held for Portfolio: Table 5.1 presents information as of September 30, 2021 and December 31, 2020 on mortgage loans held for portfolio (in thousands). Mortgage loans held for portfolio excludes accrued interest receivable of $37,150,000 and $44,101,000 as of September 30, 2021 and December 31, 2020, respectively.

Table 5.1

	09/30/2021		12/31/2020
Real estate:
Fixed rate, medium-term1, single-family mortgages	$	1,410,868	$	1,419,725
Fixed rate, long-term, single-family mortgages	6,805,521		7,666,912
Total unpaid principal balance	8,216,389		9,086,637
Premiums	112,014		128,231
Discounts	(1,461)		(1,865)
Deferred loan costs, net	89		123
Other deferred fees	(16)		(25)
Hedging adjustments	(4,900)		(2,717)
Total before allowance for credit losses on mortgage loans	8,322,115		9,210,384
Allowance for credit losses on mortgage loans	(6,324)		(5,177)
MORTGAGE LOANS HELD FOR PORTFOLIO, NET	$	8,315,791	$	9,205,207

1    Medium-term defined as a term of 15 years or less at origination.

Table 5.2 presents information as of September 30, 2021 and December 31, 2020 on the outstanding unpaid principal balance of mortgage loans held for portfolio (in thousands):

Table 5.2

	09/30/2021		12/31/2020
Conventional loans	$	7,796,799	$	8,563,349
Government-guaranteed or -insured loans	419,590		523,288
TOTAL UNPAID PRINCIPAL BALANCE	$	8,216,389	$	9,086,637

Payment Status of Mortgage Loans: Payment status is the key credit quality indicator for conventional mortgage loans and allows FHLBank to monitor the migration of past due loans. Past due loans are those where the borrower has failed to make timely payments of principal and/or interest in accordance with the terms of the loan. Other delinquency statistics include non-accrual loans and loans in process of foreclosure.

25

Table 5.3 presents the payment status based on amortized cost as well as other delinquency statistics for FHLBank’s mortgage loans as of September 30, 2021 (dollar amounts in thousands):

Table 5.3

	09/30/2021
	Conventional Loans															Government Loans			Total
	Origination Year												Subtotal
	Prior to 2017		2017		2018		2019		2020		2021
Amortized Cost:1
Past due 30-59 days delinquent	$	12,982	$	4,695	$	3,744	$	8,063	$	2,667	$	2,022	$	34,173		$	7,994		$	42,167
Past due 60-89 days delinquent	4,658		985		1,615		1,754		984		—		9,996			1,854			11,850
Past due 90 days or more delinquent	11,312		4,867		8,222		17,477		648		546		43,072			16,215			59,287
Total past due	28,952		10,547		13,581		27,294		4,299		2,568		87,241			26,063			113,304
Total current loans	1,868,652		457,785		408,821		1,457,811		1,958,047		1,658,186		7,809,302			399,509			8,208,811
Total mortgage loans	$	1,897,604	$	468,332	$	422,402	$	1,485,105	$	1,962,346	$	1,660,754	$	7,896,543		$	425,572		$	8,322,115
Other delinquency statistics:
In process of foreclosure2													$	1,951		$	1,266		$	3,217
Serious delinquency rate3													0.6		%	3.8		%	0.7		%
Past due 90 days or more and still accruing interest													$	—		$	16,215		$	16,215
Loans on non-accrual status4,5													$	49,903		$	—		$	49,903

1    Excludes accrued interest receivable.

2    Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.

3    Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.

4    Loans on non-accrual status include $1,180,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

5    Includes $34,958,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

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Table 5.4 presents the payment status based on recorded investment as well as other delinquency statistics for FHLBank’s mortgage loans as of December 31, 2020 (dollar amounts in thousands):

Table 5.4

	12/31/2020
	Conventional Loans															Government Loans			Total
	Origination Year												Subtotal
	Prior to 2016		2016		2017		2018		2019		2020
Amortized Cost:1
Past due 30-59 days delinquent	$	16,546	$	3,932	$	7,879	$	6,695	$	11,904	$	3,712	$	50,668		$	10,485		$	61,153
Past due 60-89 days delinquent	7,680		1,064		2,354		2,805		4,438		1,278		19,619			4,895			24,514
Past due 90 days or more delinquent	20,518		3,868		13,325		20,969		43,268		5,839		107,787			22,691			130,478
Total past due	44,744		8,864		23,558		30,469		59,610		10,829		178,074			38,071			216,145
Total current loans	1,942,655		632,604		677,871		665,791		2,303,031		2,279,995		8,501,947			492,292			8,994,239
Total mortgage loans	$	1,987,399	$	641,468	$	701,429	$	696,260	$	2,362,641	$	2,290,824	$	8,680,021		$	530,363		$	9,210,384
Other delinquency statistics:
In process of foreclosure2													$	1,785		$	1,563		$	3,348
Serious delinquency rate3													1.3		%	4.3		%	1.4		%
Past due 90 days or more and still accruing interest													$	—		$	22,691		$	22,691
Loans on non-accrual status4,5													$	117,584		$	—		$	117,584

1    Excludes accrued interest receivable.

2    Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.

3    Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.

4    Loans on non-accrual status include $1,311,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

5    Includes $69,192,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

Allowance for Credit Losses:

Conventional Mortgage Loans: Conventional loans are evaluated collectively when similar risk characteristics exist. Conventional loans that do not share risk characteristics with other pools are evaluated for expected credit losses on an individual basis. FHLBank determines its allowances for credit losses on conventional loans through analyses that include consideration of various loan portfolio and collateral-related characteristics, such as past performance, current conditions, and reasonable and supportable forecasts of expected economic conditions. FHLBank uses a model that discounts projected cash flows to estimate expected credit losses over the life of the loans. This model relies on a number of inputs, such as both current and forecasted property values and interest rates as well as historical borrower behavior experience. FHLBank also incorporates associated credit enhancements, as available, to determine its estimate of expected credit losses.

Certain conventional loans may be evaluated for credit losses using the practical expedient for collateral dependent assets. A mortgage loan is considered collateral dependent if repayment is expected to be provided by the sale of the underlying property, that is, if it is considered likely that the borrower will default. FHLBank may estimate the fair value of this collateral by applying an appropriate loss severity rate or using third party estimates or property valuation model(s). The expected credit loss of a collateral dependent mortgage loan is equal to the difference between the amortized cost of the loan and the estimated fair value of the collateral, less estimated selling costs. FHLBank records a direct charge-off of the loan balance if certain triggering criteria are met. Expected recoveries of prior charge-offs, if any, are included in the allowance for credit losses.

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FHLBank established an allowance for credit losses on its conventional mortgage loans held for portfolio. Table 5.5 presents a roll-forward of the allowance for credit losses on mortgage loans for the three and nine months ended September 30, 2021 and 2020.

Table 5.5

	Three Months Ended				Nine Months Ended
Conventional Loans	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Balance, beginning of the period	$	7,552	$	7,790	$	5,177	$	985
Adjustment for cumulative effect of accounting change	—		—		—		6,123
Net (charge-offs) recoveries	432		20		509		101
Provision (reversal) for credit losses	(1,660)		116		638		717
Balance, end of the period	$	6,324	$	7,926	$	6,324	$	7,926

Government-Guaranteed or -Insured Mortgage Loans: FHLBank invests in fixed-rate mortgage loans that are insured or guaranteed by the Federal Housing Administration, the Department of Veterans Affairs, the Rural Housing Service of the Department of Agriculture, and/or the Department of Housing and Urban Development. The servicer provides and maintains insurance or a guarantee from the applicable government agency. The servicer is responsible for compliance with all government agency requirements and for obtaining the benefit of the applicable guarantee or insurance with respect to defaulted government-guaranteed or -insured mortgage loans. Any losses on these loans that are not recovered from the issuer or the guarantor are absorbed by the servicer. Therefore, FHLBank only has credit risk for these loans if the servicer fails to pay for losses not covered by the guarantee or insurance. Based on FHLBank's assessment of its servicers and the collateral backing the loans, the risk of loss was immaterial, consequently, no allowance for credit losses for government-guaranteed or -insured mortgage loans was recorded as of September 30, 2021 and December 31, 2020. Furthermore, none of these mortgage loans has been placed on non-accrual status because of the U.S. government guarantee or insurance on these loans and the contractual obligation of the loan servicer to repurchase the loans when certain criteria are met.

NOTE 6 – DERIVATIVES AND HEDGING ACTIVITIES

Table 6.1 presents outstanding notional amounts and fair values of the derivatives outstanding by type of derivative and by hedge designation as of September 30, 2021 and December 31, 2020 (in thousands). Total derivative assets and liabilities include the effect of netting adjustments and cash collateral.

Table 6.1

	09/30/2021						12/31/2020
	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps	$	18,294,341	$	16,608	$	176,775	$	15,862,207	$	18,427	$	261,431
Total derivatives designated as hedging relationships	18,294,341		16,608		176,775		15,862,207		18,427		261,431
Derivatives not designated as hedging instruments:
Interest rate swaps	2,337,365		6		41,836		2,476,659		107		68,210
Interest rate caps/floors	477,500		321		—		602,500		141		—
Mortgage delivery commitments	162,060		5		1,005		133,456		654		4
Total derivatives not designated as hedging instruments	2,976,925		332		42,841		3,212,615		902		68,214
TOTAL	$	21,271,266	16,940		219,616		$	19,074,822	19,329		329,645
Netting adjustments and cash collateral1			117,739		(211,771)				129,539		(325,241)
DERIVATIVE ASSETS AND LIABILITIES			$	134,679	$	7,845			$	148,868	$	4,404

1    Amounts represent the application of the netting requirements that allow FHLBank to settle positive and negative positions and cash collateral, including accrued interest, held or placed with the same clearing agent and/or derivative counterparty. Cash collateral posted was $329,510,000 and $455,080,000 as of September 30, 2021 and December 31, 2020, respectively. Cash collateral received was $0 and $300,000 as of September 30, 2021 and December 31, 2020, respectively.

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FHLBank carries derivative instruments at fair value on its Statements of Condition. Changes in fair value of the derivative hedging instrument and the hedged item attributable to the hedged risk for designated fair value hedges are recorded in net interest income in the same line as the earnings effect of the hedged item.

Gains (losses) on fair value hedges include unrealized changes in fair value as well as net interest settlements. For the three months ended September 30, 2021 and 2020, FHLBank recorded net gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on FHLBank’s net interest income as presented in Table 6.2 (in thousands):

Table 6.2

	Three Months Ended
	09/30/2021
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	29,925	$	10,701	$	1,326	$	37,729
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	1,516	$	1,446	$	—	$	(403)
Hedged items2	(18,744)		(23,862)		—		6,982
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(17,228)	$	(22,416)	$	—	$	6,579

	Three Months Ended
	09/30/2020
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	38,848	$	9,588	$	5,674	$	67,142
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	10,848	$	9,424	$	(197)	$	(1,509)
Hedged items2	(28,115)		(40,444)		1,321		12,203
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(17,267)	$	(31,020)	$	1,124	$	10,694

1    Includes net interest settlements in interest income/expense.

2    Includes amortization/accretion on closed fair value relationships in interest income.

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For the nine months ended September 30, 2021 and 2020, FHLBank recorded net gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on FHLBank’s net interest income as presented in Table 6.3 (in thousands):

Table 6.3

	Nine Months Ended
	09/30/2021
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	95,677	$	29,589	$	4,393	$	124,395
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	84,116	$	81,276	$	13	$	(11,167)
Hedged items2	(133,978)		(153,929)		(33)		33,424
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(49,862)	$	(72,653)	$	(20)	$	22,257

	Nine Months Ended
	9/30/2020
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	230,000	$	43,753	$	120,385	$	310,628
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	(280,875)	$	(386,669)	$	18,350	$	45,856
Hedged items2	248,445		308,189		(112)		(16,663)
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(32,430)	$	(78,480)	$	18,238	$	29,193

1    Includes net interest settlements in interest income/expense.

2    Includes amortization/accretion on closed fair value relationships in interest income.

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Table 6.4 presents the cumulative basis adjustments on hedged items designated as fair value hedges and the related amortized cost of the hedged items as of September 30, 2021 and December 31, 2020 (in thousands):

Table 6.4

09/30/2021
Line Item in Statements of Condition of Hedged Item	Carrying Value of Hedged Asset/(Liability)1		Basis Adjustments for Active Hedging Relationships2		Basis Adjustments for Discontinued Hedging Relationships2		Cumulative Amount of Fair Value Hedging Basis Adjustments2
Advances	$	6,234,566	$	120,597	$	11,819	$	132,416
Available-for-sale securities	5,685,568		162,224		—		162,224
Consolidated obligation bonds	(6,683,518)		(1,230)		—		(1,230)
12/31/2020
Line Item in Statements of Condition of Hedged Item	Carrying Value of Hedged Asset/(Liability)1		Basis Adjustments for Active Hedging Relationships2		Basis Adjustments for Discontinued Hedging Relationships2		Cumulative Amount of Fair Value Hedging Basis Adjustments2
Advances	$	5,895,962	$	261,304	$	11,149	$	272,453
Available-for-sale securities	6,696,114		320,063		—		320,063
Consolidated discount notes	(174,855)		33		—		33
Consolidated obligation bonds	(3,791,848)		(34,654)		—		(34,654)

1    Includes only the portion of carrying value representing the hedged items in fair value hedging relationships. For available-for-sale securities, amortized cost is considered to be carrying value (i.e., the fair value adjustment recorded in AOCI is excluded).

2    Included in amortized cost of the hedged asset/liability.

Table 6.5 provides information regarding net gains (losses) on derivatives recorded in non-interest income (in thousands).

Table 6.5

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Derivatives not designated as hedging instruments:
Economic hedges:
Interest rate swaps	$	11,908	$	15,842	$	57,473	$	(97,218)
Interest rate caps/floors	252		(17)		180		(30)
Net interest settlements	(12,878)		(14,222)		(38,773)		(32,338)
Mortgage delivery commitments	(678)		423		(2,710)		(5,995)
NET GAINS (LOSSES) ON DERIVATIVES	$	(1,396)	$	2,026	$	16,170	$	(135,581)

Based on credit analyses and collateral requirements, FHLBank management does not anticipate any credit losses on its derivative agreements. There was no credit risk applicable to a single counterparty as of September 30, 2021. The maximum credit risk applicable to a single counterparty was $247,000 as of December 31, 2020.

For uncleared derivative transactions, FHLBank has entered into bilateral security agreements with its counterparties with bilateral-collateral-exchange provisions that require all credit exposures be collateralized, subject to minimum transfer amounts.

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FHLBank utilizes two Derivative Clearing Organizations (Clearinghouse) for all cleared derivative transactions, LCH Limited and CME Clearing. At both Clearinghouses, initial margin is considered cash collateral. For cleared derivatives, the Clearinghouse determines initial margin requirements and generally, credit ratings are not factored into the initial margin. However, clearing agents may require additional initial margin to be posted based on credit considerations, including but not limited to credit rating downgrades. FHLBank was not required to post additional initial margin by its clearing agents as of September 30, 2021 and December 31, 2020.

FHLBank’s net exposure on derivative agreements is presented in Note 9.

NOTE 7 – DEPOSITS

FHLBank offers demand, overnight and short-term deposit programs to its members and to other qualifying non-members. A member that services mortgage loans may also deposit funds collected in connection with the mortgage loans, pending disbursement of these funds to the owners of the mortgage loans. FHLBank classifies these funds as other deposits. Deposits classified as demand and overnight pay interest based on a daily interest rate. Term deposits pay interest based on a fixed rate determined at the issuance of the deposit. Table 7.1 details the types of deposits held by FHLBank as of September 30, 2021 and December 31, 2020 (in thousands):

Table 7.1

	09/30/2021		12/31/2020
Interest-bearing:
Demand	$	345,197	$	308,604
Overnight	548,900		660,400
Term	2,750		2,750
Total interest-bearing	896,847		971,754
Non-interest-bearing:
Other	136,710		257,607
Total non-interest-bearing	136,710		257,607
TOTAL DEPOSITS	$	1,033,557	$	1,229,361

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NOTE 8 – CONSOLIDATED OBLIGATIONS

Consolidated Obligation Bonds: Table 8.1 presents FHLBank’s participation in consolidated obligation bonds outstanding as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):

Table 8.1

	09/30/2021				12/31/2020
Year of Contractual Maturity	Amount		Weighted Average Interest Rate		Amount		Weighted Average Interest Rate
Due in one year or less	$	18,762,650	0.17	%	$	27,921,650	0.31	%
Due after one year through two years	2,376,950		0.98		1,267,800		1.45
Due after two years through three years	1,479,650		1.08		1,216,600		1.91
Due after three years through four years	1,585,200		0.86		831,700		1.58
Due after four years through five years	2,288,500		0.82		836,100		1.22
Thereafter	4,972,050		1.60		5,518,800		1.60
Total par value	31,465,000		0.58	%	37,592,650		0.63	%
Premiums	26,544				38,219
Discounts	(2,842)				(3,303)
Concession fees	(12,152)				(14,143)
Hedging adjustments	1,230				34,654
TOTAL	$	31,477,780			$	37,648,077

FHLBank issues optional principal redemption bonds (callable bonds) that may be redeemed in whole or in part at the discretion of FHLBank on predetermined call dates in accordance with terms of bond offerings. FHLBank’s participation in consolidated obligation bonds outstanding as of September 30, 2021 and December 31, 2020 includes callable bonds totaling $8,354,000,000 and $6,878,000,000, respectively. Table 8.2 summarizes FHLBank’s participation in consolidated obligation bonds outstanding by year of maturity, or by the next call date for callable bonds as of September 30, 2021 and December 31, 2020 (in thousands):

Table 8.2

Year of Maturity or Next Call Date	09/30/2021		12/31/2020
Due in one year or less	$	27,109,150	$	34,299,650
Due after one year through two years	2,176,950		1,142,800
Due after two years through three years	934,150		815,100
Due after three years through four years	588,200		399,700
Due after four years through five years	234,500		391,100
Thereafter	422,050		544,300
TOTAL PAR VALUE	$	31,465,000	$	37,592,650

In addition to having fixed rate or simple variable rate coupon payment terms, consolidated obligation bonds may also have the following broad terms, regarding the coupon payment:

▪Range bonds that have coupon rates at fixed or variable rates and pay the fixed or variable rate as long as the index rate is within the established range, but generally pay zero percent or a minimal interest rate if the specified index rate is outside the established range;

▪Conversion bonds that have coupon rates that convert from fixed to variable, or variable to fixed, rates or from one index to another, on predetermined dates according to the terms of the bond offerings; and

▪Step bonds that have coupon rates at fixed or variable rates for specified intervals over the lives of the bonds. At the end of each specified interval, the coupon rate or variable rate spread increases (decreases) or steps up (steps down). These bond issues generally contain call provisions enabling the bonds to be called at FHLBank’s discretion on the step dates.

33

Table 8.3 summarizes interest rate payment terms for consolidated obligation bonds as of September 30, 2021 and December 31, 2020 (in thousands):

Table 8.3

	09/30/2021		12/31/2020
Fixed rate	$	15,838,000	$	13,840,650
Simple variable rate	15,027,000		23,752,000
Step	600,000		—
TOTAL PAR VALUE	$	31,465,000	$	37,592,650

Consolidated Discount Notes: Table 8.4 summarizes FHLBank’s participation in consolidated obligation discount notes, all of which are due within one year (dollar amounts in thousands):

Table 8.4

	Book Value		Par Value		Weighted Average Interest Rate1
September 30, 2021	$	10,277,237	$	10,277,770	0.04	%
December 31, 2020	$	10,882,417	$	10,883,608	0.08	%

1    Represents yield to maturity excluding concession fees.

NOTE 9 – ASSETS AND LIABILITIES SUBJECT TO OFFSETTING

FHLBank presents certain financial instruments, including derivatives, repurchase agreements and securities purchased under agreements to resell, on a net basis by clearing agent by Clearinghouse, or by counterparty, when it has met the netting requirements. For these financial instruments, FHLBank has elected to offset its asset and liability positions, as well as cash collateral received or pledged, including associated accrued interest.

FHLBank has analyzed the enforceability of offsetting rights incorporated in its cleared derivative transactions and determined that the exercise of those offsetting rights by a non-defaulting party under these transactions should be upheld under applicable law upon an event of default including a bankruptcy, insolvency, or similar proceeding involving the Clearinghouse or clearing agent, or both. Based on this analysis, FHLBank presents a net derivative receivable or payable for all of its transactions through a particular clearing agent with a particular Clearinghouse.

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Tables 9.1 and 9.2 present the fair value of financial assets, including the related collateral received from or pledged to clearing agents or counterparties, based on the terms of FHLBank’s master netting arrangements or similar agreements as of September 30, 2021 and December 31, 2020 (in thousands):

Table 9.1

09/30/2021
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Condition		Net Amounts of Assets Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative assets:
Uncleared derivatives	$	16,839	$	(16,356)	$	483	$	(5)	$	478
Cleared derivatives	101		134,095		134,196		—		134,196
Total derivative assets	16,940		117,739		134,679		(5)		134,674
Securities purchased under agreements to resell	2,100,000		—		2,100,000		(2,100,000)		—
TOTAL	$	2,116,940	$	117,739	$	2,234,679	$	(2,100,005)	$	134,674

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

Table 9.2

12/31/2020
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Condition		Net Amounts of Assets Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative assets:
Uncleared derivatives	$	18,819	$	(18,031)	$	788	$	(654)	$	134
Cleared derivatives	510		147,570		148,080		—		148,080
Total derivative assets	19,329		129,539		148,868		(654)		148,214
Securities purchased under agreements to resell	2,600,000		—		2,600,000		(2,600,000)		—
TOTAL	$	2,619,329	$	129,539	$	2,748,868	$	(2,600,654)	$	148,214

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

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Tables 9.3 and 9.4 present the fair value of financial liabilities, including the related collateral received from or pledged to counterparties, based on the terms of FHLBank’s master netting arrangements or similar agreements as of September 30, 2021 and December 31, 2020 (in thousands):

Table 9.3

09/30/2021
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Condition		Net Amounts of Liabilities Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative liabilities:
Uncleared derivatives	$	206,719	$	(198,874)	$	7,845	$	(1,005)	$	6,840
Cleared derivatives	12,897		(12,897)		—		—		—
Total derivative liabilities	219,616		(211,771)		7,845		(1,005)		6,840
TOTAL	$	219,616	$	(211,771)	$	7,845	$	(1,005)	$	6,840

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

Table 9.4

12/31/2020
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Condition		Net Amounts of Liabilities Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative liabilities:
Uncleared derivatives	$	324,491	$	(320,087)	$	4,404	$	(4)	$	4,400
Cleared derivatives	5,154		(5,154)		—		—		—
Total derivative liabilities	329,645		(325,241)		4,404		(4)		4,400
TOTAL	$	329,645	$	(325,241)	$	4,404	$	(4)	$	4,400

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

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NOTE 10 – CAPITAL

Capital Requirements: FHLBank is subject to three capital requirements under the provisions of the Gramm-Leach-Bliley Act (GLB Act) and the FHFA's capital structure regulation. Regulatory capital does not include AOCI but does include mandatorily redeemable capital stock.

•Risk-based capital. FHLBank must maintain at all times permanent capital in an amount at least equal to the sum of its credit risk, market risk and operations risk capital requirements. The risk-based capital requirements are all calculated in accordance with the rules and regulations of the FHFA. Only permanent capital, defined as Class B Common Stock and retained earnings, can be used by FHLBank to satisfy its risk-based capital requirement. The FHFA may require FHLBank to maintain a greater amount of permanent capital than is required by the risk-based capital requirement as defined, but the FHFA has not placed any such requirement on FHLBank to date.

•Total regulatory capital. The GLB Act requires FHLBank to maintain at all times at least a 4.0 percent total capital-to-asset ratio. Total regulatory capital is defined as the sum of permanent capital, Class A Common Stock, any general loss allowance, if consistent with GAAP and not established for specific assets, and other amounts from sources determined by the FHFA as available to absorb losses.

•Leverage capital. FHLBank is required to maintain at all times a leverage capital-to-assets ratio of at least 5.0 percent, with the leverage capital ratio defined as the sum of permanent capital weighted 1.5 times and non-permanent capital (currently only Class A Common Stock) weighted 1.0 times, divided by total assets.

Table 10.1 illustrates that FHLBank was in compliance with its regulatory capital requirements as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):

Table 10.1

	09/30/2021						12/31/2020
	Required			Actual			Required			Actual
Regulatory capital requirements:
Risk-based capital	$	402,398		$	2,278,219		$	192,927		$	2,213,868
Total regulatory capital-to-asset ratio	4.0		%	5.5		%	4.0		%	5.0		%
Total regulatory capital	$	1,820,649		$	2,500,649		$	2,103,668		$	2,627,083
Leverage capital ratio	5.0		%	8.0		%	5.0		%	7.1		%
Leverage capital	$	2,275,811		$	3,639,759		$	2,629,586		$	3,734,017

Capital Stock: FHLBank offers two classes of stock, Class A Common Stock and Class B Common Stock. Each member is required to hold capital stock to become and remain a member of FHLBank (Asset-based Stock Purchase Requirement; Class A Common Stock) and enter into specified activities with FHLBank including, but not limited to, access to FHLBank’s credit products and selling Acquired Member Assets (AMA) to FHLBank (Activity-based Stock Purchase Requirement; Class A Common Stock to the extent of a member’s Asset-based Stock Purchase Requirement, then Class B Common Stock for the remainder). The amount of Class A Common Stock a member must acquire and maintain is the Asset-based Stock Purchase Requirement, which is currently equal to 0.1 percent of a member’s total assets as of December 31 of the preceding calendar year, with a minimum requirement of $1,000, and a maximum requirement of $500,000. The amount of Class B Common Stock a member must acquire and maintain is the Activity-based Stock Purchase Requirement, which is currently equal to 4.5 percent of the principal amount of advances outstanding to the member plus 3.0 percent of the principal amount of AMA outstanding for the member, limited to a maximum of 3.0 percent of the member's total assets at the end of the prior calendar year, plus 0.25 percent of letters of credit balances outstanding, less the member’s Asset-based Stock Purchase Requirement. As of December 31, 2020, there was no Activity-based Stock Purchase Requirement for letters of credit. However, the Letter of Credit Activity-based Stock Purchase Requirement increased to 0.25 percent from the previous requirement of zero percent, effective January 22, 2021. The change in the Activity-based Stock Purchase Requirements did not change for former members with outstanding business transactions.

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Mandatorily Redeemable Capital Stock: FHLBank is a cooperative whose members own most of FHLBank’s capital stock. Former members (including certain non-members that own FHLBank capital stock as a result of merger or acquisition, relocation, charter termination, or involuntary termination of an FHLBank member) own the remaining capital stock to support business transactions still carried on FHLBank's Statements of Condition. Shares cannot be purchased or sold except between FHLBank and its members at a price equal to the $100 per share par value. If a member cancels its written notice of redemption or notice of withdrawal, FHLBank will reclassify mandatorily redeemable capital stock from a liability to equity. After the reclassification, dividends on the capital stock would no longer be classified as interest expense.

Table 10.2 presents a roll-forward of mandatorily redeemable capital stock for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Table 10.2

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Balance, beginning of period	$	1,543	$	2,308	$	1,624	$	2,415
Capital stock subject to mandatory redemption reclassified from equity during the period	460		620,561		584,512		1,627,899
Capital stock redemption cancellations reclassified to equity during the period	—		—		—		(100,647)
Redemption or repurchase of mandatorily redeemable capital stock during the period	(1,397)		(620,967)		(585,547)		(1,527,802)
Stock dividend classified as mandatorily redeemable capital stock during the period	1		12		18		49
Balance, end of period	$	607	$	1,914	$	607	$	1,914

Excess Capital Stock: Excess capital stock is defined as the amount of stock held by a member (or former member) in excess of that institution’s minimum stock purchase requirement. FHFA rules limit the ability of FHLBank to create excess member stock under certain circumstances. For example, FHLBank may not pay dividends in the form of capital stock or issue new excess stock to members if FHLBank’s excess stock exceeds one percent of its total assets or if the issuance of excess stock would cause FHLBank’s excess stock to exceed one percent of its total assets. As of September 30, 2021, FHLBank’s excess stock was less than one percent of total assets.

Capital Classification Determination: The FHFA determines each FHLBank’s capital classification on at least a quarterly basis. If an FHLBank is determined to be other than adequately capitalized, that FHLBank becomes subject to additional supervisory authority by the FHFA. Before implementing a reclassification, the Director of the FHFA is required to provide an FHLBank with written notice of the proposed action and an opportunity to submit a response. As of the most recent review by the FHFA, FHLBank Topeka was classified as adequately capitalized.

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NOTE 11 – ACCUMULATED OTHER COMPREHENSIVE INCOME

Table 11.1 summarizes the changes in AOCI for the three months ended September 30, 2021 and 2020 (in thousands):

Table 11.1

	Three Months Ended
	Net Unrealized Gains (Losses) on Available-for-sale Securities		Defined Benefit Pension Plan		Total AOCI
Balance at June 30, 2020	$	(31,746)	$	(1,948)	$	(33,694)
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)	30,295				30,295
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan1			28		28
Net current period other comprehensive income (loss)	30,295		28		30,323
Balance at September 30, 2020	$	(1,451)	$	(1,920)	$	(3,371)
Balance at June 30, 2021	$	96,282	$	(2,738)	$	93,544
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)	(22,482)				(22,482)
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan1			92		92
Net current period other comprehensive income (loss)	(22,482)		92		(22,390)
Balance at September 30, 2021	$	73,800	$	(2,646)	$	71,154

1    Recorded in “Other” non-interest expense on the Statements of Income. Amount represents a debit (increase to other expenses).

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Table 11.2 summarizes the changes in AOCI for the nine months ended September 30, 2021 and 2020 (in thousands):

Table 11.2

	Nine Months Ended
	Net Unrealized Gains (Losses) on Available-for-sale Securities		Defined Benefit Pension Plan		Total AOCI
Balance at December 31, 2019	$	26,788	$	(2,002)	$	24,786
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)	(26,716)				(26,716)
Reclassifications from other comprehensive income (loss) to net income:
Realized net (gains) losses included in net income1	(1,523)				(1,523)
Amortization of net losses - defined benefit pension plan2			82		82
Net current period other comprehensive income (loss)	(28,239)		82		(28,157)
Balance at September 30, 2020	$	(1,451)	$	(1,920)	$	(3,371)
Balance at December 31, 2020	$	45,196	$	(2,888)	$	42,308
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)3	28,604				28,604
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan2			242		242
Net current period other comprehensive income (loss)	28,604		242		28,846
Balance at September 30, 2021	$	73,800	$	(2,646)	$	71,154

1    Recorded in “Net gains (losses) on sale of available-for-sale securities” non-interest income on the Statements of Income. Amount represents a credit (increase to other income (loss)).

2    Recorded in “Other” non-interest expense on the Statements of Income. Amount represents a debit (increase to other expenses).

3    Includes $4,059,000 related to the transfer of securities from held-to-maturity to available-for-sale upon the adoption of reference rate reform guidance.

NOTE 12 – FAIR VALUES

The fair value amounts recorded on the Statements of Condition and presented in the note disclosures have been determined by FHLBank using available market and other pertinent information and reflect FHLBank’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., an exit price). Although FHLBank uses its best judgment in estimating the fair value of its financial instruments, there are inherent limitations in any valuation technique. Therefore, the fair values may not be indicative of the amounts that would have been realized in market transactions as of September 30, 2021 and December 31, 2020. Additionally, these values do not represent an estimate of the overall market value of FHLBank as a going concern, which would take into account future business opportunities and the net profitability of assets and liabilities.

Subjectivity of Estimates: Estimates of the fair value of advances with options, mortgage instruments, derivatives with embedded options and consolidated obligation bonds with options 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, methods to determine 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 Hierarchy: The fair value hierarchy requires FHLBank to maximize the use of observable inputs and minimize the use of 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 the market observability of the fair value measurement for the asset or liability. FHLBank must disclose the level within the fair value hierarchy in which the measurements are classified for all assets and liabilities.

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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 active markets that FHLBank can access on the measurement date. An active market for the 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: (1) quoted prices for similar assets and liabilities in active markets; (2) quoted prices for similar assets and liabilities in markets that are not active; (3) 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 (4) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•Level 3 Inputs – Unobservable inputs for the asset or liability.

FHLBank reviews its fair value hierarchy classifications on a quarterly basis. Changes in the observability of the valuation inputs may result in a reclassification of certain assets or liabilities. There were no transfers of assets or liabilities between fair value levels during the three and nine months ended September 30, 2021 and 2020.

Tables 12.1 and 12.2 present the carrying value, fair value and fair value hierarchy of financial assets and liabilities as of September 30, 2021 and December 31, 2020. FHLBank records trading securities, available-for-sale securities, derivative assets, and derivative liabilities at fair value on a recurring basis, and on occasion certain mortgage loans held for portfolio and certain other assets at fair value on a nonrecurring basis. FHLBank measures all other financial assets and liabilities at amortized cost. Further details about the financial assets and liabilities held at fair value on either a recurring or non-recurring basis are presented in Tables 12.3 and 12.4.

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The carrying value, fair value and fair value hierarchy of FHLBank’s financial assets and liabilities as of September 30, 2021 and December 31, 2020 are summarized in Tables 12.1 and 12.2 (in thousands):

Table 12.1

	09/30/2021
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Assets:
Cash and due from banks	$	29,740	$	29,740	$	29,740	$	—	$	—	$	—
Interest-bearing deposits	569,222		569,222		—		569,222		—		—
Securities purchased under agreements to resell	2,100,000		2,100,000		—		2,100,000		—		—
Federal funds sold	1,958,000		1,958,000		—		1,958,000		—		—
Trading securities	2,622,397		2,622,397		—		2,622,397		—		—
Available-for-sale securities	7,776,188		7,776,188		—		7,776,188		—		—
Held-to-maturity securities	433,286		437,848		—		361,957		75,891		—
Advances	21,411,103		21,500,868		—		21,500,868		—		—
Mortgage loans held for portfolio, net of allowance	8,315,791		8,412,649		—		8,406,513		6,136		—
Accrued interest receivable	83,013		83,013		—		83,013		—		—
Derivative assets	134,679		134,679		—		16,940		—		117,739
Liabilities:
Deposits	1,033,557		1,033,557		—		1,033,557		—		—
Consolidated obligation discount notes	10,277,237		10,276,683		—		10,276,683		—		—
Consolidated obligation bonds	31,477,780		31,452,159		—		31,452,159		—		—
Mandatorily redeemable capital stock	607		607		607		—		—		—
Accrued interest payable	38,036		38,036		—		38,036		—		—
Derivative liabilities	7,845		7,845		—		219,616		—		(211,771)
Other Asset (Liability):
Industrial revenue bonds	35,000		36,572		—		36,572		—		—
Financing obligation payable	(35,000)		(36,572)		—		(36,572)		—		—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.

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Table 12.2

	12/31/2020
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Assets:
Cash and due from banks	$	4,570,415	$	4,570,415	$	4,570,415	$	—	$	—	$	—
Interest-bearing deposits	760,297		760,297		—		760,297		—		—
Securities purchased under agreements to resell	2,600,000		2,600,000		—		2,600,000		—		—
Federal funds sold	1,780,000		1,780,000		—		1,780,000		—		—
Trading securities	2,623,376		2,623,376		—		2,623,376		—		—
Available-for-sale securities	6,741,310		6,741,310		—		6,741,310		—		—
Held-to-maturity securities	2,746,992		2,750,116		—		2,674,446		75,670		—
Advances	21,226,823		21,360,450		—		21,360,450		—		—
Mortgage loans held for portfolio, net of allowance	9,205,207		9,454,112		—		9,441,474		12,638		—
Accrued interest receivable	97,718		97,718		—		97,718		—		—
Derivative assets	148,868		148,868		—		19,329		—		129,539
Liabilities:
Deposits	1,229,361		1,229,361		—		1,229,361		—		—
Consolidated obligation discount notes	10,882,417		10,882,601		—		10,882,601		—		—
Consolidated obligation bonds	37,648,077		37,835,135		—		37,835,135		—		—
Mandatorily redeemable capital stock	1,624		1,624		1,624		—		—		—
Accrued interest payable	45,575		45,575		—		45,575		—		—
Derivative liabilities	4,404		4,404		—		329,645		—		(325,241)
Other Asset (Liability):
Industrial revenue bonds	35,000		37,978		—		37,978		—		—
Financing obligation payable	(35,000)		(37,978)		—		(37,978)		—		—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.

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Fair Value Measurements: Tables 12.3 and 12.4 present, for each hierarchy level, FHLBank’s assets and liabilities that are measured at fair value on a recurring or nonrecurring basis on the Statements of Condition as of or for the periods ended September 30, 2021 and December 31, 2020 (in thousands).

Table 12.3

	09/30/2021
	Total		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Recurring fair value measurements - Assets:
Trading securities:
Certificates of deposit	$	200,009	$	—	$	200,009	$	—	$	—
U.S. Treasury obligations	1,176,148		—		1,176,148		—		—
GSE debentures	421,980		—		421,980		—		—
GSE MBS	824,260		—		824,260		—		—
Total trading securities	2,622,397		—		2,622,397		—		—
Available-for-sale securities:
U.S. Treasury obligations	2,842,599		—		2,842,599		—		—
U.S. obligation MBS	55,342		—		55,342		—		—
GSE MBS	4,878,247		—		4,878,247		—		—
Total available-for-sale securities	7,776,188		—		7,776,188		—		—
Derivative assets:
Interest-rate related	134,674		—		16,935		—		117,739
Mortgage delivery commitments	5		—		5		—		—
Total derivative assets	134,679		—		16,940		—		117,739
TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	10,533,264	$	—	$	10,415,525	$	—	$	117,739
Recurring fair value measurements - Liabilities:
Derivative liabilities:
Interest-rate related	$	6,840	$	—	$	218,611	$	—	$	(211,771)
Mortgage delivery commitments	1,005		—		1,005		—		—
Total derivative liabilities	7,845		—		219,616		—		(211,771)
TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES	$	7,845	$	—	$	219,616	$	—	$	(211,771)
Nonrecurring fair value measurements - Assets2:
Impaired mortgage loans	$	6,170	$	—	$	—	$	6,170	$	—
Real estate owned	52		—		—		52		—
TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	6,222	$	—	$	—	$	6,222	$	—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

2    Includes assets adjusted to fair value during the nine months ended September 30, 2021 and still outstanding as of September 30, 2021.

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Table 12.4

	12/31/2020
	Total		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Recurring fair value measurements - Assets:
Trading securities:
U.S. Treasury obligations	$	1,298,518	$	—	$	1,298,518	$	—	$	—
GSE debentures	431,875		—		431,875		—		—
GSE MBS	892,983		—		892,983		—		—
Total trading securities	2,623,376		—		2,623,376		—		—
Available-for-sale securities:
U.S. Treasury obligations	3,546,325		—		3,546,325		—		—
GSE MBS	3,194,985		—		3,194,985		—		—
Total available-for-sale securities	6,741,310		—		6,741,310		—		—
Derivative assets:
Interest-rate related	148,214		—		18,675		—		129,539
Mortgage delivery commitments	654		—		654		—		—
Total derivative assets	148,868		—		19,329		—		129,539
TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	9,513,554	$	—	$	9,384,015	$	—	$	129,539
Recurring fair value measurements - Liabilities:
Derivative liabilities:
Interest-rate related	$	4,400	$	—	$	329,641	$	—	$	(325,241)
Mortgage delivery commitments	4		—		4		—		—
Total derivative liabilities	4,404		—		329,645		—		(325,241)
TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES	$	4,404	$	—	$	329,645	$	—	$	(325,241)
Nonrecurring fair value measurements - Assets2:
Impaired mortgage loans	$	12,668	$	—	$	—	$	12,668	$	—
Real estate owned	405		—		—		405		—
TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	13,073	$	—	$	—	$	13,073	$	—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

2    Includes assets adjusted to fair value during the year ended December 31, 2020 and still outstanding as of December 31, 2020.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Joint and Several Liability: As provided in the Federal Home Loan Bank Act of 1932, as amended or in FHFA regulations, consolidated obligations are backed only by the financial resources of the FHLBanks. FHLBank Topeka is jointly and severally liable with the other FHLBanks for the payment of principal and interest on all of the consolidated obligations issued by the FHLBanks. The par amounts for which FHLBank Topeka is jointly and severally liable were approximately $599,694,909,000 and $698,296,045,000 as of September 30, 2021 and December 31, 2020, respectively.

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The joint and several obligations are mandated by FHFA regulations and are not the result of arms-length transactions among the FHLBanks. As described above, the FHLBanks have no control over the amount of the guaranty or the determination of how each FHLBank would perform under the joint and several liability. Because the FHLBanks are subject to the authority of the FHFA as it relates to decisions involving the allocation of the joint and several liability for all FHLBanks' consolidated obligations, FHLBank Topeka regularly monitors the financial condition of the other FHLBanks to determine whether it should expect a loss to arise from its joint and several obligations. If FHLBank were to determine that a loss was probable and the amount of the loss could be reasonably estimated, FHLBank would charge to income the amount of the expected loss. Based upon the creditworthiness of the other FHLBanks as of September 30, 2021, FHLBank Topeka has concluded that a loss accrual is not necessary at this time.

Off-balance Sheet Commitments: As of September 30, 2021 and December 31, 2020, off-balance sheet commitments are presented in Table 13.1 (in thousands):

Table 13.1

	09/30/2021						12/31/2020
Notional Amount	Expire Within One Year		Expire After One Year		Total		Expire Within One Year		Expire After One Year		Total
Standby letters of credit outstanding	$	4,473,000	$	2,483	$	4,475,483	$	5,436,165	$	4,251	$	5,440,416
Advance commitments outstanding	49,090		12,816		61,906		19,693		21,001		40,694
Principal commitments for standby bond purchase agreements	80,530		649,275		729,805		380,615		317,710		698,325
Commitments to fund or purchase mortgage loans	162,060		—		162,060		133,456		—		133,456
Commitments to issue consolidated bonds, at par	3,690,000		—		3,690,000		4,000		—		4,000
Commitments to issue consolidated discount notes, at par	1,000,000		—		1,000,000		—		—		—

Commitments to Extend Credit: FHLBank issues standby letters of credit on behalf of its members to support certain obligations of the members to third-party beneficiaries. These standby letters of credit are subject to the same collateralization and borrowing limits that are applicable to advances and are fully collateralized at the time of issuance with assets allowed by FHLBank’s Member Products Policy (MPP). Standby letters of credit may be offered to assist members in facilitating residential housing finance, community lending, and asset-liability management, and to provide liquidity. In particular, members often use standby letters of credit as collateral for deposits from federal and state government agencies. Standby letters of credit are executed for members for a fee. If FHLBank is required to make payment for a beneficiary's draw, the member either reimburses FHLBank for the amount drawn or, subject to FHLBank's discretion, the amount drawn may be converted into a collateralized advance to the member. However, standby letters of credit usually expire without being drawn upon. Outstanding standby letters of credit have original or extended expiration periods of up to 6 years. FHLBank's current outstanding standby letters of credit expire no later than 2023. Unearned fees as well as the value of the guarantees related to standby letters of credit are recorded in other liabilities and amounted to $1,355,000 and $1,554,000 as of September 30, 2021 and December 31, 2020, respectively. Advance commitments legally bind and unconditionally obligate FHLBank for additional advances up to 24 months in the future. Based upon management’s credit analysis of members and collateral requirements under the MPP, FHLBank does not expect to incur any credit losses on the outstanding letters of credit or advance commitments.

Standby Bond-Purchase Agreements: FHLBank has entered into standby bond purchase agreements with state housing authorities whereby FHLBank, for a fee, agrees to purchase and hold the authorities’ bonds until the designated marketing agent can find a suitable investor or the housing authority repurchases the bond according to a schedule established by the standby agreement. Each standby agreement dictates the specific terms that would require FHLBank to purchase the bond and typically allows FHLBank to terminate the agreement upon the occurrence of a default event of the issuer. The bond purchase commitments entered into by FHLBank expire no later than 2024, though some are renewable at the option of FHLBank. As of September 30, 2021 and December 31, 2020, the total commitments for bond purchases included agreements with two in-district state housing authorities. FHLBank was required to purchase $122,390,000 in bonds under these agreements during the nine months ended September 30, 2020. These bonds were classified as available-for-sale securities, and were acquired at par and sold at par within the same month. FHLBank was not required to purchase any bonds under any agreements during the nine months ended September 30, 2021.

46

Commitments to Purchase Mortgage Loans: These commitments that unconditionally obligate FHLBank to purchase mortgage loans from participating FHLBank Topeka members in the MPF Program are generally for periods not to exceed 60 calendar days. Certain commitments are recorded as derivatives at their fair values on the Statements of Condition. FHLBank recorded mortgage delivery commitment net derivative asset (liability) balances of $(1,000,000) and $650,000 as of September 30, 2021 and December 31, 2020, respectively.

Commitments to Issue Consolidated Obligations: FHLBank enters into commitments to issue consolidated obligation bonds and discount notes outstanding in the normal course of its business. Most settle within the shortest period possible and are considered regular way trades; however, certain commitments are recorded as derivatives at their fair values on the Statements of Condition.

NOTE 14 – TRANSACTIONS WITH STOCKHOLDERS

FHLBank is a cooperative whose members own most of the capital stock of FHLBank and generally receive dividends on their investments. In addition, certain former members that still have outstanding transactions are also required to maintain their investments in FHLBank capital stock until the transactions mature or are paid off. Nearly all outstanding advances are with current members, and the majority of outstanding mortgage loans held for portfolio were purchased from current or former members. FHLBank also maintains demand deposit accounts for members primarily to facilitate settlement activities that are directly related to advances and mortgage loan purchases.

Transactions with members are entered into in the ordinary course of business. In instances where members also have officers or directors who are directors of FHLBank, transactions with those members are subject to the same eligibility and credit criteria, as well as the same terms and conditions, as other transactions with members. For financial reporting and disclosure purposes, FHLBank defines related parties as FHLBank directors’ financial institutions and members with capital stock investments in excess of 10 percent of FHLBank’s total regulatory capital stock outstanding, which includes mandatorily redeemable capital stock.

Activity with Members that Exceed a 10 Percent Ownership in FHLBank Regulatory Capital Stock: Tables 14.1 and 14.2 present information on members that owned more than 10 percent of outstanding FHLBank regulatory capital stock as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands). None of the officers or directors of this member currently serve on FHLBank’s board of directors.

Table 14.1

09/30/2021
Member Name	State	Total Class A Stock Par Value		Percent of Total Class A		Total Class B Stock Par Value		Percent of Total Class B		Total Capital Stock Par Value		Percent of Total Capital Stock
MidFirst Bank	OK	$	6,800	3.1	%	$	357,791	30.8	%	$	364,591	26.4	%
TOTAL		$	6,800	3.1	%	$	357,791	30.8	%	$	364,591	26.4	%

Table 14.2

12/31/2020
Member Name	State	Total Class A Stock Par Value		Percent of Total Class A		Total Class B Stock Par Value		Percent of Total Class B		Total Capital Stock Par Value		Percent of Total Capital Stock
MidFirst Bank	OK	$	825	0.2	%	$	339,524	29.2	%	$	340,349	21.6	%
TOTAL		$	825	0.2	%	$	339,524	29.2	%	$	340,349	21.6	%

Advance and deposit balances with members that owned more than 10 percent of outstanding FHLBank regulatory capital stock as of September 30, 2021 and December 31, 2020 are summarized in Table 14.3 (dollar amounts in thousands).

Table 14.3

	09/30/2021				12/31/2020				09/30/2021				12/31/2020
Member Name	Outstanding Advances		Percent of Total		Outstanding Advances		Percent of Total		Outstanding Deposits		Percent of Total		Outstanding Deposits		Percent of Total
MidFirst Bank	$	7,770,000	36.5	%	$	7,460,000	35.6	%	$	511	—	%	$	713	0.1	%
TOTAL	$	7,770,000	36.5	%	$	7,460,000	35.6	%	$	511	—	%	$	713	0.1	%

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MidFirst Bank did not sell any mortgage loans into the MPF Program during the three and nine months ended September 30, 2021 and 2020.

Transactions with FHLBank Directors’ Financial Institutions: Table 14.4 presents information as of September 30, 2021 and December 31, 2020 for members that had an officer or director serving on FHLBank’s board of directors (dollar amounts in thousands). Information is only included for the period in which the officer or director served on FHLBank’s board of directors. Capital stock listed is regulatory capital stock, which includes mandatorily redeemable capital stock.

Table 14.4

	09/30/2021				12/31/2020
	Outstanding Amount		Percent of Total		Outstanding Amount		Percent of Total
Advances	$	156,291	0.7	%	$	161,021	0.8	%
Deposits	$	18,322	1.8	%	$	25,459	2.1	%
Class A Common Stock	$	5,236	2.4	%	$	10,298	2.5	%
Class B Common Stock	16,785		1.4		21,200		1.8
TOTAL CAPITAL STOCK	$	22,021	1.6	%	$	31,498	2.0	%

Table 14.5 presents mortgage loans acquired during the three and nine months ended September 30, 2021 and 2020 for members that had an officer or director serving on FHLBank’s board of directors in 2021 or 2020 (dollar amounts in thousands). Information is only included for the period in which the officer or director served on FHLBank’s board of directors.

Table 14.5

	Three Months Ended								Nine Months Ended
	09/30/2021				09/30/2020				09/30/2021				09/30/2020
	Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
Mortgage loans acquired	$	13,563	2.2	%	$	9,091	2.5	%	$	32,534	1.9	%	$	95,901	4.0	%

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to assist the reader in understanding our business and assessing our operations both historically and prospectively. This discussion should be read in conjunction with our interim financial statements and related notes presented under Part I, Item 1 of this quarterly report on Form 10-Q and the annual report on Form 10-K for the year ended December 31, 2020, which includes audited financial statements and related notes for the year ended December 31, 2020. Our MD&A includes the following sections:

•Executive Level Overview – a general description of our business and financial highlights;

•Financial Market Trends – a discussion of current trends in the financial markets and overall economic environment, including the related impact on our operations;

•Critical Accounting Policies and Estimates – a discussion of accounting policies that require critical estimates and assumptions;

•Results of Operations – an analysis of our operating results, including disclosures about the sustainability of our earnings;

•Financial Condition – an analysis of our financial position;

•Liquidity and Capital Resources – an analysis of our cash flows and capital position;

•Risk Management – a discussion of our risk management strategies;

•Recently Issued Accounting Standards; and

•Legislative and Regulatory Developments.

Executive Level Overview

We are a regional wholesale bank that makes advances (loans) to, purchases mortgage loans from, and provides limited other financial services primarily to our members. Our mission is to be a reliable source of liquidity and low-cost funding for our members in support of residential mortgage lending and related housing and economic development needs of the communities served by our members. As an independent, member-owned cooperative, we seek to maintain a balance between our public purpose and our ability to provide adequate returns on the capital supplied by our members. Our members include commercial banks, savings institutions, credit unions, insurance companies, and community development financial institutions.

We continue to conduct business without operational difficulties or disruptions despite the ongoing COVID-19 pandemic. The majority of our employees returned to the office in October 2021.

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Table 1 presents Selected Financial Data for the periods indicated (dollar amounts in thousands):

Table 1

	09/30/2021			06/30/2021			03/31/2021			12/31/2020			09/30/2020
Statement of Condition (as of period end):
Total assets	$	45,516,223		$	46,310,400		$	48,500,428		$	52,591,712		$	53,011,374
Investments1	15,459,093			16,248,714			18,361,631			17,251,975			19,917,184
Advances	21,411,103			20,995,508			21,068,366			21,226,823			22,616,252
Mortgage loans, net2	8,315,791			8,328,063			8,667,085			9,205,207			10,093,466
Total liabilities	42,945,027			43,663,829			45,809,375			49,923,945			50,411,438
Deposits	1,033,557			1,088,865			1,262,945			1,229,361			1,016,316
Consolidated obligation discount notes, net3	10,277,237			10,330,016			10,072,689			10,882,417			11,936,214
Consolidated obligation bonds, net3	31,477,780			32,088,152			34,314,007			37,648,077			37,294,169
Total consolidated obligations, net3	41,755,017			42,418,168			44,386,696			48,530,494			49,230,383
Mandatorily redeemable capital stock	607			1,543			1,585			1,624			1,914
Total capital	2,571,196			2,646,571			2,691,053			2,667,767			2,599,936
Capital stock	1,382,482			1,456,736			1,540,365			1,574,004			1,580,741
Total retained earnings	1,117,560			1,096,291			1,079,074			1,051,455			1,022,566
AOCI	71,154			93,544			71,614			42,308			(3,371)
Statement of Income (for the quarterly period ended):
Net interest income	73,260			67,230			73,369			74,461			64,788
Provision (reversal) for credit losses on mortgage loans	(1,660)			2,312			(14)			(1,433)			116
Other income (loss)	(14,758)			(10,146)			(5,892)			(5,033)			(1,634)
Other expenses	18,628			18,145			18,705			19,758			18,610
Income before assessments	41,534			36,627			48,786			51,103			44,428
Affordable Housing Program (AHP) assessments	4,154			3,663			4,880			5,111			4,444
Net income	37,380			32,964			43,906			45,992			39,984
Selected Financial Ratios and Other Financial Data (for the quarterly period ended):
Dividends paid in cash	62			65			64			66			66
Dividends paid in stock	16,049			15,682			16,223			17,037			13,981
Weighted average dividend rate4	4.15		%	4.06		%	4.15		%	4.09		%	3.69		%
Dividend payout ratio5	43.10		%	47.77		%	37.10		%	37.19		%	35.13		%
Return on average equity	5.40		%	4.83		%	6.55		%	6.75		%	6.34		%
Return on average assets	0.31		%	0.27		%	0.35		%	0.34		%	0.29		%
Average equity to average assets	5.71		%	5.56		%	5.32		%	5.01		%	4.60		%
Net interest margin6	0.61		%	0.55		%	0.59		%	0.55		%	0.47		%
Total capital ratio7	5.65		%	5.71		%	5.55		%	5.07		%	4.90		%
Regulatory capital ratio8	5.49		%	5.52		%	5.40		%	5.00		%	4.91		%

1    Includes trading securities, available-for-sale securities, held-to-maturity securities, interest-bearing deposits, securities purchased under agreements to resell and Federal funds sold.

2    The allowance for credit losses on mortgage loans was $6,324,000, $7,552,000, $4,956,000, $5,177,000 and $7,926,000 as of September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively.

3    Consolidated obligations are bonds and discount notes that we are primarily liable to repay. See Note 13 to the financial statements for a description of the total consolidated obligations of all FHLBanks for which we are jointly and severally liable.

4    Dividends paid in cash and stock on both classes of stock as a percentage of average capital stock eligible for dividends.

5    Ratio disclosed represents dividends declared and paid during the period as a percentage of net income for the period presented, although FHFA regulation requires dividends be paid out of known income prior to declaration date.

6    Net interest income as a percentage of average earning assets.

7    GAAP capital stock, which excludes mandatorily redeemable capital stock, plus retained earnings and AOCI as a percentage of total assets.

8    Regulatory capital (i.e., Class A Common Stock, Class B Common Stock and retained earnings) as a percentage of total assets.

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The Federal Reserve’s rapid reduction in the Federal funds target rate and purchase of U.S. Treasury bonds in response to the COVID-19 pandemic-related market volatility resulted in declines across the interest rate curve in March 2020 that have generally persisted through the first nine months of 2021, although interest rates for tenors greater than two years closed slightly higher at the end of September 2021 than at the end of 2020. Lower advance demand has continued due to abundant liquidity held by members resulting from economic stimulus packages passed by Congress along with the Federal Reserve Bank’s easing of monetary policy, security purchase programs, and newly created lending facilities. Deposit growth continues to outpace loan demand at depository members, which also impacts advance demand. The surge of mortgage loan prepayments that occurred during 2020 and through the first quarter of 2021 has reduced net interest income in the form of accelerated amortization of premiums on mortgage-related assets and reinvestment at lower market rates, although recent increases in mortgage interest rates have slowed prepayments and related premium amortization. The decline in short-term interest rates also impacted net interest income in the form of increased net interest settlement expense on advances and available-for-sale securities compared to the prior year period. The decrease in market interest rates and the tightening of consolidated obligation bond spreads to benchmark rates has allowed us to replace maturing and called debt at a lower cost, which has reduced overall funding costs for current and future periods. In addition, management has actively managed our funding composition in response to market conditions, as the stability of the interest rate environment enabled us to reduce our allocation of funding in discount notes by increasing our issuance of floating rate term debt, which more closely matches asset composition and reprices to market interest rates more quickly than discount notes.

Third Quarter 2021 Financial Highlights

•Net interest income/margin: Net interest income of $73.3 million for the quarter ended September 30, 2021 increased $8.5 million compared to the same period in 2020. Net interest margin increased 14 basis points for the current quarter, from 0.47 percent for the quarter ended September 30, 2020 to 0.61 percent for the quarter ended September 30, 2021. This improvement was attributed primarily to the decrease in the cost of debt. Slowing prepayment speeds and the corresponding decline in premium amortization on mortgage loans also provided a positive contribution to net interest margin for the quarter ended September 30, 2021 compared to the prior year period.

•Total assets: Total assets decreased from $52.6 billion as of December 31, 2020 to $45.5 billion as of September 30, 2021, driven largely by the decrease in the short-term liquidity portfolio between those periods.

•Advances: Advances increased from $21.2 billion at December 31, 2020 to $21.4 billion at September 30, 2021. The average balance of advances increased $1.0 billion, or 4.6 percent, for the three months ended September 30, 2021 when compared to the prior year period.

•Mortgage loans: Mortgage loans decreased by $0.9 billion from December 31, 2020 to September 30, 2021, representing 18.3 percent of total assets as of September 30, 2021, compared to 17.5 percent as of December 31, 2020. Despite the decrease in mortgage loans, the decline in our liquidity and investment portfolios resulted in our mortgage loan portfolio representing a larger portion of our total assets compared to December 31, 2020. The average balance of mortgage loans decreased $2.2 billion, or 21.2 percent, for the three months ended September 30, 2021 when compared to the prior year period as prepayments have outpaced acquisitions during 2021.

•Performance ratios: Return on average equity (ROE) decreased to 5.40 percent for the quarter ended September 30, 2021 compared to 6.34 percent for the prior year period due primarily to the decrease in net income for the current quarter, combined with an increase in average capital.

•Dividends: The Class A Common Stock dividend rate of 0.25 percent per annum and the Class B Common Stock dividend rate of 5.25 percent per annum combined for a weighted average dividend rate for the quarter ended September 30, 2021 of 4.15 percent per annum, compared to a weighted average dividend rate of 3.69 percent for the same period in 2020.

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Financial Market Trends

The primary external factors that affect net interest income are market interest rates and the general state of the economy.

General discussion of the level of market interest rates:

Table 2 presents selected market interest rates as of the dates or for the periods shown.

Table 2

	09/30/2021		09/30/2020		09/30/2021		09/30/2020		09/30/2021		12/31/2020		09/30/2020
Market Instrument	Three-month		Three-month		Nine-month		Nine-month		Ending		Ending		Ending
	Average		Average		Average		Average		Rate		Rate		Rate
Secured Overnight Financing Rate1	0.05	%	0.09	%	0.04	%	0.45	%	0.05	%	0.07	%	0.08	%
Federal funds effective rate1	0.09		0.09		0.08		0.45		0.06		0.09		0.09
Federal Reserve interest rate on excess reserves1	0.15		0.10		0.12		0.47		0.15		0.10		0.10
3-month U.S. Treasury bill1	0.04		0.11		0.04		0.44		0.04		0.07		0.10
3-month LIBOR1	0.13		0.25		0.16		0.79		0.13		0.24		0.23
2-year U.S. Treasury note1	0.22		0.14		0.18		0.47		0.28		0.12		0.13
5-year U.S. Treasury note1	0.80		0.27		0.75		0.59		0.97		0.36		0.28
10-year U.S. Treasury note1	1.32		0.65		1.41		0.90		1.49		0.92		0.69
30-year residential mortgage note rate1,2	3.05		3.13		3.10		3.42		3.10		2.90		3.05

1    Source is Bloomberg.

2    Mortgage Bankers Association weekly 30-year fixed rate mortgage contract rate.

During the third quarter of 2021, market conditions continued to improve, although this recovery was hindered by the COVID-19 Delta variant. Interest rates remained at low levels but were higher for maturities of two years and longer relative to the prevailing yields at the end of 2020. Inflation measures continued to trend upward during the third quarter of 2021 as supply chain disruptions and other economic factors caused increases in prices of commodities and consumer goods. The unemployment rate has improved from 2020 highs but remains above pre-pandemic levels despite rising demand for labor. Mortgage rates began an upward trend relative to the historical lows at earlier points in 2021, which has slowed prepayments. The level of current mortgage rates provides less refinance incentive but remains attractive to homebuyers, which has kept home prices elevated. Financial institutions continued to experience high levels of liquidity and lower relative loan demand in the third quarter of 2021 resulting from continued fiscal and monetary policy support and competition among lenders.

Spreads to comparative U.S. Treasury instruments for FHLBank consolidated obligations remained relatively narrow during the first nine months of 2021, resulting in lower costs to issue consolidated obligations driven by robust market demand for the instruments and lower issuance needs by the FHLBanks due to lower advance demand. At the November 2021 meeting, the Federal Open Market Committee (FOMC) maintained the Federal funds rate at a range between 0 percent and 0.25 percent and the interest rate on excess reserves at 0.15 percent. The FOMC will continue quantitative easing, repo, and overnight lending programs and purchases of U.S. Treasuries and Agency MBS, but announced the planned pace of the reduction of monthly net asset purchases. Monetary and fiscal actions in response to the economic impact of the COVID-19 pandemic and negative economic outlooks for the next several years have kept Treasury and other benchmark rates to near historic lows. We issue debt at a spread above U.S. Treasury securities; as a result, the level of interest rates impacts the cost of issuing FHLBank consolidated obligations and the cost of advances to our members and housing associates.

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The COVID-19 pandemic has caused significant economic and financial turmoil both in the U.S. and around the world. The global economy appears to be emerging from the economic downturn, but recovery is threatened by a resurgence of infectious cases and the emergence of more contagious variants of the virus. The pace of global economic recovery is dependent upon the course of the virus and measures taken to control its spread, vaccination rates, the impact of policy support, and other structural economic factors. Our ability to obtain funds through the issuance of consolidated obligations depends in part on prevailing conditions in the capital markets (including investor demand), such as the effects of any reduced liquidity in global financial markets. Although we believe it is a declining risk, volatility in the capital markets caused by the COVID-19 pandemic can impact demand for FHLBank debt and the cost of the debt the FHLBanks issue. The outlook for the remainder of 2021 is uncertain, and it is likely that the FOMC will keep interest rates low or use other programs if economic conditions warrant, each of which could impact the efficiency of our asset and liability management activities. Supply chain disruptions and labor market constraints are expected to keep inflation elevated into 2022, which could impact economic growth. Higher levels of inflation and higher inflation expectations could result in higher interest rates, especially short- and intermediate-term interest rates. For further discussion, see this Item 2 – “Financial Condition – Consolidated Obligations.”

The Financial Conduct Authority (FCA) announced that the publication of LIBOR on a representative basis will cease for one-week and two-month LIBOR immediately after December 31, 2021, and the remaining LIBOR tenors immediately after June 30, 2023. As noted throughout this quarterly report, many of our assets and liabilities, including derivative assets and derivative liabilities, are indexed to one-month or three-month tenors of LIBOR. A portion of these assets and liabilities and related collateral have maturity dates that extend beyond June 30, 2023. For additional information on our LIBOR transition efforts and LIBOR exposure, see “Risk Management – Interest Rate Risk Management” under this Item 2.

Critical Accounting Policies and Estimates

The preparation of our financial statements in accordance with GAAP requires management to make a number of judgments and assumptions that affect our reported results and disclosures. Several of our accounting policies are inherently subject to valuation assumptions and other subjective assessments and are more critical than others in terms of their importance to results. These assumptions and assessments include: (1) the accounting related to derivatives and hedging activities; and (2) fair value determinations.

Changes in any of the estimates and assumptions underlying critical accounting policies could have a material effect on our financial statements.

The accounting policies that management believes are the most critical to an understanding of our financial results and condition and require complex management judgment are described under Part II, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in our annual report on Form 10-K, incorporated by reference herein. There were no material changes to our critical accounting policies and estimates during the quarter ended September 30, 2021.

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Results of Operations

Earnings Analysis: Table 3 presents changes in the major components of our net income (dollar amounts in thousands):

Table 3

	Increase (Decrease) in Earnings Components
	Three Months Ended				Nine Months Ended
	09/30/2021 vs. 09/30/2020				09/30/2021 vs. 09/30/2020
	Dollar Change		Percentage Change		Dollar Change		Percentage Change
Total interest income	$	(25,310)	(18.3)	%	$	(266,475)	(43.7)	%
Total interest expense	(33,782)		(46.2)		(303,783)		(70.1)
Net interest income	8,472		13.1		37,308		21.1
Provision (reversal) for credit losses on mortgage loans	(1,776)		(1,531.0)		(79)		(11.0)
Net interest income after mortgage loan loss provision	10,248		15.8		37,387		21.3
Net gains (losses) on trading securities	(9,374)		(134.0)		(149,296)		(160.9)
Net gains (losses) on derivatives	(3,422)		(168.9)		151,751		111.9
Other non-interest income	(328)		(9.8)		1,864		24.2
Total other income (loss)	(13,124)		(803.2)		4,319		12.3
Operating expenses	194		1.3		(3)		—
Other non-interest expenses	(176)		(4.2)		(5,168)		(29.9)
Total other expenses	18		0.1		(5,171)		(8.5)
AHP assessments	(290)		(6.5)		4,685		58.5
NET INCOME	$	(2,604)	(6.5)	%	$	42,192	58.6	%

Net income decreased $2.6 million, or 6.5 percent, to $37.4 million for the three months ended September 30, 2021 compared to $40.0 million for the three months ended September 30, 2020. The $2.6 million decrease for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020 was a result of a $12.8 million increase in unrealized net losses on economic derivatives (i.e., derivatives not qualifying for hedge accounting) and trading securities that were not entirely offset by the increase in net interest income of $8.5 million and the reversal of the provision for credit losses of $1.8 million. For detailed discussion relating to the fluctuations in net gains (losses) on derivatives and net gains (losses) on trading securities, see "Net Gains (Losses) on Derivatives" and "Net Gains (Losses) On Trading Securities" under this Item 2.

For the nine months ended September 30, 2021, net income increased $42.2 million, or 58.6 percent, to $114.3 million compared to $72.1 million for the nine months ended September 30, 2020. This increase was primarily attributed to an increase in net interest income of $37.3 million, a decrease in other expenses of $5.2 million, and an increase in other income of $4.3 million. Other expenses declined by $5.2 million for the current nine-month period compared to the prior year due mainly to the subsidy recorded for the below-market interest rates on COVID-19 Relief Advances in the prior year. The increase in other income of $4.3 million for the current nine-month period was relative to write-offs of premises and equipment recorded in the prior year.

Net Interest Income and Net Interest Margin: Net interest income increased $8.5 million for the quarter, from $64.8 million for the three months ended September 30, 2020 to $73.3 million for the three months ended September 30, 2021. Net interest income increased $37.3 million for the current year-to-date period, from $176.6 million for the nine months ended September 30, 2020 to $213.9 million for nine months ended September 30, 2021. Market interest rates and trends affect net interest income and net interest margin on earning assets, including advances, mortgage loans, and investments. The increase in net interest income and net interest margin for both the quarter and year-to-date periods was the result of a significant decrease in the cost of debt between periods, driven by the repricing of liabilities funding short-term investments and fixed-rate mortgage assets (see Tables 8 and 10). The decrease in market interest rates and the tightening of consolidated obligation bond spreads to benchmark rates allowed us to replace called debt at a lower cost from early 2020 through the first quarter of 2021, which has reduced overall funding costs for current and future periods. Debt maturing between periods was replaced at lower interest rates. Further, the pace of called bonds has slowed, thereby reducing accelerated concession amortization on called debt in the current periods compared to the prior year periods. Replacing callable debt results in accelerated amortization of concessions (broker fees) in the month of the call, but the refinanced debt will continue to provide additional benefit in the form of lower rates for future periods.

54

Interest income for both periods was reduced by declines in the average balance and average rate across most asset categories, although slowing prepayments and the associated reduction in premium amortization boosted the yield on mortgage loans during the current quarter, and the $1.0 billion increase in the average balance of advances for the current quarter provided some offset to the overall decline in interest income. The majority of the year-to-date decline in the average balance of advances was in the line of credit,which is typically a low-spread product, so the impact of the decline in the average balance on net interest margin was minimal. Advance modifications have also reduced the yield on the portfolio to current market rates, but the pace of modifications has slowed in recent periods. Modifications reduce net interest income but the advance is retained and the member pays a prepayment fee for the modification.

Mortgage loans and MBS are typically the highest net spread assets on our balance sheet, so the decline in the average balance combined with spread compression from accelerated premium amortization from prepayments has negatively impacted net interest margin, but the decrease in the cost of debt between periods has more than offset the premium amortization impact. Mortgage prepayments slowed during the second and third quarters of 2021 and are expected to continue to decline through the remainder of the year before leveling off. At current rate levels, should prepayments slow, the lower premium amortization would result in a wider spread. However, this is highly dependent on the level of interest rates. For further discussion of investments, advances and mortgage loans, see this Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition."

Net interest income and net interest margin are also impacted by derivative and hedging activities, as net interest settlements on derivatives and the changes in fair values of hedged assets and liabilities and the corresponding derivative instruments designated in fair value hedging relationships are recorded in net interest income. For the year-to-date period, interest income was reduced by net interest settlement expense on fair value hedges of advances and available-for-sale securities caused by the decline in short-term interest rates. Tables 4 through 7 present the impact of derivatives and hedging activities recorded in net interest income (in thousands):

Table 4

	Three Months Ended 09/30/2021
	Advances		Investments		Mortgage Loans		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds		Total
Unrealized gains (losses) due to fair value changes	$	40	$	1,717	$	—	$	—	$	294	$	2,051
Net amortization/accretion of hedging activities	(830)		—		(221)		—		—		(1,051)
Net interest received (paid)	(16,438)		(24,133)		—		—		6,285		(34,286)
TOTAL	$	(17,228)	$	(22,416)	$	(221)	$	—	$	6,579	$	(33,286)

Table 5

	Three Months Ended 09/30/2020
	Advances		Investments		Mortgage Loans		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds		Total
Unrealized gains (losses) due to fair value changes	$	304	$	870	$	—	$	(1,271)	$	5	$	(92)
Net amortization/accretion of hedging activities	(348)		—		(927)		—		—		(1,275)
Net interest received (paid)	(17,223)		(31,890)		—		2,395		10,689		(36,029)
TOTAL	$	(17,267)	$	(31,020)	$	(927)	$	1,124	$	10,694	$	(37,396)

55

Table 6

	Nine Months Ended 09/30/2021
	Advances		Investments		Mortgage Loans		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds		Total
Unrealized gains (losses) due to fair value changes	$	1,595	$	4,628	$	—	$	(31)	$	131	$	6,323
Net amortization/accretion of hedging activities	(2,172)		—		(1,124)		—		—		(3,296)
Net interest received (paid)	(49,285)		(77,281)		—		11		22,126		(104,429)
TOTAL	$	(49,862)	$	(72,653)	$	(1,124)	$	(20)	$	22,257	$	(101,402)

Table 7

	Nine Months Ended 09/30/2020
	Advances		Investments		Mortgage Loans		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds		Total
Unrealized gains (losses) due to fair value changes	$	(1,816)	$	(4,495)	$	—	$	(176)	$	(12)	$	(6,499)
Net amortization/accretion of hedging activities	(965)		—		(2,603)		—		—		(3,568)
Net interest received (paid)	(29,649)		(73,985)		—		18,414		29,205		(56,015)
TOTAL	$	(32,430)	$	(78,480)	$	(2,603)	$	18,238	$	29,193	$	(66,082)

56

Average Balances and Yields: Table 8 presents average balances and annualized yields of major earning asset categories and the sources funding those earning assets (dollar amounts in thousands):

Table 8

	Three Months Ended
	09/30/2021						09/30/2020
	Average Balance		Interest Income/ Expense		Yield		Average Balance		Interest Income/ Expense		Yield
Interest-earning assets:
Interest-bearing deposits	$	904,796	$	230	0.10	%	$	1,325,680	$	471	0.14	%
Securities purchased under agreements to resell	2,017,391		460		0.09		4,421,739		1,378		0.12
Federal funds sold	2,525,435		567		0.09		2,551,728		575		0.09
Investment securities1	10,962,475		27,819		1.01		13,467,560		32,227		0.95
Advances1,2	22,985,280		29,925		0.52		21,975,855		38,848		0.70
Mortgage loans3,4	8,317,439		53,438		2.55		10,554,194		64,192		2.42
Other interest-earning assets	38,761		228		2.32		41,915		286		2.71
Total earning assets	47,751,577		112,667		0.94		54,338,671		137,977		1.01
Other non-interest-earning assets	315,746						183,115
Total assets	$	48,067,323					$	54,521,786
Interest-bearing liabilities:
Deposits	$	1,032,579	101		0.04		$	800,807	76		0.04
Consolidated obligations1:
Discount Notes	11,749,008		1,326		0.04		12,587,693		5,674		0.18
Bonds	31,968,498		37,729		0.47		37,779,502		67,142		0.71
Other borrowings	44,673		251		2.23		43,842		297		2.70
Total interest-bearing liabilities	44,794,758		39,407		0.35		51,211,844		73,189		0.57
Capital and other non-interest-bearing funds	3,272,565						3,309,942
Total funding	$	48,067,323					$	54,521,786
Net interest income and net interest spread5			$	73,260	0.59	%			$	64,788	0.44	%
Net interest margin6					0.61	%					0.47	%

1    Interest income/expense and average rates include the effect of associated derivatives that qualify for hedge accounting treatment.

2    Advance income includes prepayment fees on terminated advances.

3    Credit enhancement fee payments are netted against interest earnings on the mortgage loans. The expense related to credit enhancement fee payments to PFIs was $1.6 million and $1.9 million for the three months ended September 30, 2021 and 2020, respectively.

4    Mortgage loans average balance includes outstanding principal for non-performing conventional loans. However, these loans no longer accrue interest.

5    Net interest spread is the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

6    Net interest margin is defined as net interest income as a percentage of average interest-earning assets.

57

Changes in the volume of interest-earning assets and the level of interest rates influence changes in net interest income, net interest spread and net interest margin. Table 9 summarizes changes in interest income and interest expense (in thousands):

Table 9

	Three Months Ended
	09/30/2021 vs. 09/30/2020
	Increase (Decrease) Due to
	Volume1,2		Rate1,2		Total
Interest Income3:
Interest-bearing deposits	$	(127)	$	(114)	$	(241)
Securities purchased under agreements to resell	(615)		(303)		(918)
Federal funds sold	(5)		(3)		(8)
Investment securities	(6,269)		1,861		(4,408)
Advances	1,715		(10,638)		(8,923)
Mortgage loans	(14,210)		3,456		(10,754)
Other assets	(20)		(38)		(58)
Total interest-earning assets	(19,531)		(5,779)		(25,310)
Interest Expense3:
Deposits	23		2		25
Consolidated obligations:
Discount notes	(355)		(3,993)		(4,348)
Bonds	(9,238)		(20,175)		(29,413)
Other borrowings	5		(51)		(46)
Total interest-bearing liabilities	(9,565)		(24,217)		(33,782)
Change in net interest income	$	(9,966)	$	18,438	$	8,472

1    Changes in interest income and interest expense not identifiable as either volume-related or rate-related have been allocated to volume and rate based upon the proportion of the absolute value of the volume and rate changes.

2    Amounts used to calculate volume and rate changes are based on numbers in dollars. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same results.

3    Interest income/expense and average rates include the effect of associated derivatives that qualify for hedge accounting treatment.

58

Table 10 presents average balances and yields of major earning asset categories and the sources funding those earning assets (dollar amounts in thousands):

Table 10

	Nine Months Ended
	09/30/2021						09/30/2020
	Average Balance		Interest Income/Expense		Yield		Average Balance		Interest Income/Expense		Yield
Interest-earning assets:
Interest-bearing deposits	$	962,409	$	714	0.10	%	$	1,488,936	$	5,736	0.51	%
Securities purchased under agreements to resell	2,222,370		1,350		0.08		4,086,171		16,906		0.55
Federal funds sold	2,651,505		1,547		0.08		2,435,255		4,517		0.25
Investment securities1	11,716,329		85,360		0.97		13,773,179		129,148		1.25
Advances1,2	22,947,364		95,677		0.56		25,135,610		230,000		1.22
Mortgage loans3,4	8,561,457		158,359		2.47		10,854,240		222,962		2.74
Other interest-earning assets	39,699		727		2.45		46,229		940		2.72
Total earning assets	49,101,133		343,734		0.94		57,819,620		610,209		1.41
Other non-interest-earning assets	338,242						274,176
Total assets	$	49,439,375					$	58,093,796
Interest-bearing liabilities:
Deposits	$	1,067,150	312		0.04		$	763,996	1,707		0.30
Consolidated obligations1:
Discount Notes	11,530,566		4,393		0.05		19,230,201		120,385		0.84
Bonds	33,480,721		124,395		0.50		34,743,772		310,628		1.19
Other borrowings	48,063		775		2.16		49,241		938		2.55
Total interest-bearing liabilities	46,126,500		129,875		0.38		54,787,210		433,658		1.06
Capital and other non-interest-bearing funds	3,312,875						3,306,586
Total funding	$	49,439,375					$	58,093,796
Net interest income and net interest spread5			$	213,859	0.56	%			$	176,551	0.35	%
Net interest margin6					0.58	%					0.41	%

1    Interest income/expense and average rates include the effect of associated derivatives that qualify for hedge accounting treatment.

2    Advance income includes prepayment fees on terminated advances.

3    Credit enhancement fee payments are netted against interest earnings on the mortgage loans. The expense related to credit enhancement fee payments to PFIs was $4.9 million and $5.9 million for the nine months ended September 30, 2021 and 2020, respectively.

4    Mortgage loans average balance includes outstanding principal for non-performing conventional loans. However, these loans no longer accrue interest.

5    Net interest spread is the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

6    Net interest margin is defined as net interest income as a percentage of average interest-earning assets.

59

Changes in the volume of interest-earning assets and the level of interest rates influence changes in net interest income, net interest spread and net interest margin. Table 11 summarizes changes in interest income and interest expense (in thousands):

Table 11

	Nine Months Ended
	09/30/2021 vs. 09/30/2020
	Increase (Decrease) Due to
	Volume1,2		Rate1,2		Total
Interest Income3:
Interest-bearing deposits	$	(1,530)	$	(3,492)	$	(5,022)
Securities purchased under agreements to resell	(5,419)		(10,137)		(15,556)
Federal funds sold	369		(3,339)		(2,970)
Investment securities	(17,562)		(26,226)		(43,788)
Advances	(18,520)		(115,803)		(134,323)
Mortgage loans	(43,911)		(20,692)		(64,603)
Other assets	(125)		(88)		(213)
Total earning assets	(86,698)		(179,777)		(266,475)
Interest Expense3:
Deposits	493		(1,888)		(1,395)
Consolidated obligations:
Discount notes	(34,671)		(81,321)		(115,992)
Bonds	(10,906)		(175,327)		(186,233)
Other borrowings	(22)		(141)		(163)
Total interest-bearing liabilities	(45,106)		(258,677)		(303,783)
Change in net interest income	$	(41,592)	$	78,900	$	37,308

1    Changes in interest income and interest expense not identifiable as either volume-related or rate-related have been allocated to volume and rate based upon the proportion of the absolute value of the volume and rate changes.

2    Amounts used to calculate volume and rate changes are based on numbers in dollars. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same results.

3    Interest income/expense and average rates include the effect of associated derivatives that qualify for hedge accounting treatment.

Net Gains (Losses) on Derivatives: Tables 12 through 15 present the earnings impact of derivatives by financial instrument as recorded in other non-interest income (in thousands):

Table 12

	Three Months Ended 09/30/2021
	Advances		Investments		Mortgage Loans		Total
Derivatives not designated as hedging instruments:
Economic hedges – unrealized gains (losses) due to fair value changes	$	186	$	11,974	$	—	$	12,160
Mortgage delivery commitments	—		—		(678)		(678)
Economic hedges – net interest received (paid)	(211)		(12,667)		—		(12,878)
Net gains (losses) on derivatives	(25)		(693)		(678)		(1,396)
Net gains (losses) on trading securities hedged on an economic basis with derivatives	—		(16,340)		—		(16,340)
TOTAL	$	(25)	$	(17,033)	$	(678)	$	(17,736)

60

Table 13

	Three Months Ended 09/30/2020
	Advances		Investments		Mortgage Loans		Consolidated Obligation Discount Notes		Total
Derivatives not designated as hedging instruments:
Economic hedges – unrealized gains (losses) due to fair value changes	$	363	$	15,437	$	—	$	25	$	15,825
Mortgage delivery commitments	—		—		423		—		423
Economic hedges – net interest received (paid)	(45)		(14,061)		—		(116)		(14,222)
Net gains (losses) on derivatives	318		1,376		423		(91)		2,026
Net gains (losses) on trading securities hedged on an economic basis with derivatives	—		(7,222)		—		—		(7,222)
TOTAL	$	318	$	(5,846)	$	423	$	(91)	$	(5,196)

Table 14

	Nine Months Ended 09/30/2021
	Advances		Investments		Mortgage Loans		Total
Derivatives not designated as hedging instruments:
Economic hedges – unrealized gains (losses) due to fair value changes	$	1,843	$	55,810	$	—	$	57,653
Mortgage delivery commitments	—		—		(2,710)		(2,710)
Economic hedges – net interest received (paid)	(616)		(38,157)		—		(38,773)
Net gains (losses) on derivatives	1,227		17,653		(2,710)		16,170
Net gains (losses) on trading securities hedged on an economic basis with derivatives	—		(56,593)		—		(56,593)
TOTAL	$	1,227	$	(38,940)	$	(2,710)	$	(40,423)

Table 15

	Nine Months Ended 09/30/2020
	Advances		Investments		Mortgage Loans		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds		Total
Derivatives not designated as hedging instruments:
Economic hedges – unrealized gains (losses) due to fair value changes	$	(3,809)	$	(93,790)	$	—	$	(1)	$	352	$	(97,248)
Mortgage delivery commitments	—		—		(5,995)		—		—		(5,995)
Economic hedges – net interest received (paid)	(96)		(32,227)		—		(145)		130		(32,338)
Net gains (losses) on derivatives	(3,905)		(126,017)		(5,995)		(146)		482		(135,581)
Net gains (losses) on trading securities hedged on an economic basis with derivatives	—		92,220		—		—		—		92,220
TOTAL	$	(3,905)	$	(33,797)	$	(5,995)	$	(146)	$	482	$	(43,361)

61

For the three and nine months ended September 30, 2021, net gains and losses on derivatives resulted in a decrease in net income of $1.4 million and an increase of $16.2 million, respectively, compared to an increase of $2.0 million and a decrease in net income of $135.6 million for the prior year periods. The improvement for the current nine month period is due primarily to the fair value recovery resulting from the normalization of spreads between investments and their associated swaps. The market disruption from the COVID-19 pandemic caused these spreads to widen in the first quarter of 2020, resulting in unrealized losses. This improvement was partially offset by the change in the level of swap index rates from September 30, 2020 to September 30, 2021, which had a negative impact on the net interest settlements on economic hedges, decreasing net income by $12.9 million and $38.8 million, respectively, for the three and nine months ended September 30, 2021 compared to a decrease in net income of $14.2 million and $32.3 million for the three and nine months ended September 30, 2020, respectively.

Tables 16-17 present the relationship between the hedged trading securities and the associated interest rate swaps that do not qualify for hedge accounting treatment by investment type (in thousands):

Table 16

	Three Months Ended
	09/30/2021						09/30/2020
	Gains (Losses) on Derivatives		Gains (Losses) on Trading Securities		Net		Gains (Losses) on Derivatives		Gains (Losses) on Trading Securities		Net
U.S. Treasury obligations	$	5,909	$	(6,997)	$	(1,088)	$	9,068	$	(7,806)	$	1,262
GSE debentures	1,869		(2,535)		(666)		2,277		(1,144)		1,133
GSE MBS	3,936		(6,808)		(2,872)		4,085		1,728		5,813
TOTAL	$	11,714	$	(16,340)	$	(4,626)	$	15,430	$	(7,222)	$	8,208

Table 17

	Nine Months Ended
	09/30/2021						09/30/2020
	Gains (Losses) on Derivatives		Gains (Losses) on Trading Securities		Net		Gains (Losses) on Derivatives		Gains (Losses) on Trading Securities		Net
U.S. Treasury obligations	$	19,541	$	(22,371)	$	(2,830)	$	(27,687)	$	26,894	$	(793)
GSE debentures	9,293		(9,895)		(602)		(18,968)		17,839		(1,129)
GSE MBS	26,777		(24,327)		2,450		(47,319)		47,487		168
TOTAL	$	55,611	$	(56,593)	$	(982)	$	(93,974)	$	92,220	$	(1,754)

For additional detail regarding gains and losses on trading securities, see Table 18 and related discussion under this Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations.”

See Tables 48 and 49 under Item 3 – “Quantitative and Qualitative Disclosures About Market Risk” for additional detail regarding notional and fair value amounts of derivative instruments.

62

Net Gains (Losses) on Trading Securities: Table 18 presents the major components of the net gains (losses) on trading securities (in thousands):

Table 18

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Trading securities not hedged:
U.S. obligation MBS and GSE MBS	$	(29)	$	174	$	57	$	309
Short-term securities	—		53		9		240
Total trading securities not hedged	(29)		227		66		549
Trading securities hedged on an economic basis with derivatives:
U.S. Treasury obligations	(6,997)		(7,806)		(22,371)		26,894
GSE debentures	(2,535)		(1,144)		(9,895)		17,839
GSE MBS	(6,808)		1,728		(24,327)		47,487
Total trading securities hedged on an economic basis with derivatives	(16,340)		(7,222)		(56,593)		92,220
TOTAL	$	(16,369)	$	(6,995)	$	(56,527)	$	92,769

The unrealized losses on the securities in the trading portfolio for the current three- and nine-month periods reflect the increase in intermediate term Treasury and mortgage rates relative to the prevailing yields at the end of 2020. In addition to interest rates and credit spreads, the value of these securities is affected by time decay. The fixed rate GSE debentures possess coupons that are well above current market rates for similar securities and, therefore, are currently valued at substantial premiums. As these securities approach maturity, their prices will converge to par resulting in a decrease in their current premium price (i.e., time decay).

Other Expenses: Other expenses, which include compensation and benefits and other operating expenses, were $18.6 million for both quarters ended September 30, 2021 and 2020. Other expenses decreased $5.2 million for the nine months ended September 30, 2021 compared to the prior year period primarily due to the $4.5 million subsidy recorded in the prior year period for the below-market interest rates on COVID-19 Relief Advances. We expect modest increases in compensation and benefits expense for the remainder of 2021 and in 2022 in anticipation of hiring for new and open positions. We also expect an increase in operating expense for the remainder of 2021 and in 2022 due to planned multi-year software implementations.

Non-GAAP Measures: We believe that certain non-GAAP financial measures are helpful in understanding our operating results and provide meaningful period-to-period comparison of our long-term economic value in contrast to GAAP results, which are impacted by temporary fair value changes and other factors driven by market volatility, gains/losses on instrument sales, or transactions that are considered unpredictable or non-routine that reduce comparability between periods. We report the following non-GAAP financial measures that we believe are useful to stakeholders as key measures of our operating performance: (1) adjusted income, (2) adjusted net interest income, (3) adjusted net interest margin, (4) adjusted ROE, and (5) adjusted ROE spread. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measure are included below.

Although we calculate our non-GAAP financial measures consistently from period to period using appropriate GAAP components, non-GAAP financial measures are not required to be uniformly applied and are not audited. Another material limitation associated with the use of non-GAAP financial measures is that they have no standardized measurement prescribed by GAAP and may not be comparable to similar non-GAAP financial measures used by other companies. While we believe the non-GAAP measures contained in this quarterly report are frequently used by our stakeholders in the evaluation of our performance, such non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of financial information prepared in accordance with GAAP.

As part of evaluating our financial performance, we adjust net income reported in accordance with GAAP for the impact of: (1) AHP assessments (equivalent to an effective minimum income tax rate of 10 percent); (2) fair value changes on trading securities and derivatives and hedging activities (net interest settlements, which represent actual cash inflows or outflows and do not create fair value volatility, are not excluded); and (3) non-routine or unpredictable items, such as prepayment fees and gains/losses on sales of securities. The results are referred to as “adjusted income” and "adjusted net interest income", which are non-GAAP measures of income. Adjusted income is used to compute an adjusted ROE.

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Table 19 presents a reconciliation of GAAP net income to adjusted income (in thousands):

Table 19

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Net income, as reported under GAAP	$	37,380	$	39,984	$	114,250	$	72,058
AHP assessments	4,154		4,444		12,697		8,012
Income before AHP assessments	41,534		44,428		126,947		80,070
Derivative (gains) losses1	(13,498)		(16,027)		(61,178)		110,718
Trading (gains) losses	16,369		6,995		56,527		(92,769)
Prepayment fees on terminated advances	(551)		(1,067)		(3,547)		(4,252)
Net (gains) losses on sale of available-for-sale securities	—		—		—		(1,523)
Total excluded items	2,320		(10,099)		(8,198)		12,174
Adjusted income (a non-GAAP measure)	$	43,854	$	34,329	$	118,749	$	92,244

1    Consists of fair value changes on all derivatives and hedging activities excluding net interest settlements on economic hedges.

Table 20 presents a reconciliation of GAAP net interest income and GAAP net interest margin to adjusted net interest income (in thousands):

Table 20

	Three Months Ended						Nine Months Ended
	09/30/2021			09/30/2020			09/30/2021			09/30/2020
Net interest income, as reported under GAAP	$	73,260		$	64,788		$	213,859		$	176,551
(Gains) losses on derivatives qualifying for hedge accounting recorded in net interest income	(2,023)			198			(6,253)			7,255
Net interest settlements on derivatives not qualifying for hedge accounting	(12,878)			(14,222)			(38,773)			(32,338)
Prepayment fees on terminated advances	(551)			(1,067)			(3,547)			(4,252)
Adjusted net interest income (a non-GAAP measure)	$	57,808		$	49,697		$	165,286		$	147,216
Net interest margin, as calculated under GAAP	0.61		%	0.47		%	0.58		%	0.41		%
Adjusted net interest margin (a non-GAAP measure)	0.48		%	0.36		%	0.45		%	0.34		%

Table 21 presents a comparison of adjusted ROE (a non-GAAP measure) to the average overnight Federal funds rate, which we use as a key measure of effective utilization and management of members’ capital. Adjusted ROE spread is calculated as follows (dollar amounts in thousands):

Table 21

	Three Months Ended						Nine Months Ended
	09/30/2021			09/30/2020			09/30/2021			09/30/2020
Average GAAP total capital	$	2,746,619		$	2,507,909		$	2,734,542		$	2,593,471
ROE, based upon GAAP net income	5.40		%	6.34		%	5.59		%	3.71		%
Adjusted ROE, based upon adjusted income (a non-GAAP measure)	6.33		%	5.43		%	5.81		%	4.70		%
Average overnight Federal funds effective rate	0.09		%	0.09		%	0.08		%	0.45		%
GAAP ROE as a spread to average overnight Federal funds effective rate	5.31		%	6.25		%	5.51		%	3.26		%
Adjusted ROE as a spread to average overnight Federal funds effective rate (a non-GAAP measure)	6.24		%	5.34		%	5.73		%	4.25		%

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Financial Condition

Overall: Table 22 presents the percentage concentration of the major components of our Statements of Condition:

Table 22

	Component Concentration
	09/30/2021		12/31/2020
Assets:
Cash and due from banks	0.1	%	8.7	%
Interest-bearing deposits, securities purchased under agreements to resell and Federal funds sold	10.2		9.8
Investment securities	23.8		23.0
Advances	47.0		40.4
Mortgage loans, net	18.3		17.5
Other assets	0.6		0.6
Total assets	100.0	%	100.0	%
Liabilities:
Deposits	2.3	%	2.3	%
Consolidated obligation discount notes, net	22.6		20.7
Consolidated obligation bonds, net	69.2		71.6
Other liabilities	0.3		0.3
Total liabilities	94.4		94.9
Capital:
Capital stock outstanding	3.0		3.0
Retained earnings	2.4		2.0
Accumulated other comprehensive income (loss)	0.2		0.1
Total capital	5.6		5.1
Total liabilities and capital	100.0	%	100.0	%

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Table 23 presents changes in the major components of our Statements of Condition (dollar amounts in thousands):

Table 23

	Increase (Decrease) in Components
	09/30/2021 vs. 12/31/2020
	Dollar Change		Percent Change
Assets:
Cash and due from banks	$	(4,540,675)	(99.3)	%
Interest-bearing deposits, securities purchased under agreements to resell and Federal funds sold	(513,075)		(10.0)
Investment securities	(1,279,807)		(10.6)
Advances	184,280		0.9
Mortgage loans, net	(889,416)		(9.7)
Other assets	(36,796)		(10.9)
Total assets	$	(7,075,489)	(13.5)	%
Liabilities:
Deposits	$	(195,804)	(15.9)	%
Consolidated obligation discount notes, net	(605,180)		(5.6)
Consolidated obligation bonds, net	(6,170,297)		(16.4)
Other liabilities	(7,637)		(4.7)
Total liabilities	(6,978,918)		(14.0)
Capital:
Capital stock outstanding	(191,522)		(12.2)
Retained earnings	66,105		6.3
Accumulated other comprehensive income (loss)	28,846		68.2
Total capital	(96,571)		(3.6)
Total liabilities and capital	$	(7,075,489)	(13.5)	%

Total assets declined between periods, from $52.6 billion at December 31, 2020 to $45.5 billion at September 30, 2021, driven by the decrease in the short-term liquidity portfolio between those periods. Advances remained relatively flat from December 31, 2020 to September 30, 2021, increasing from $21.2 billion to $21.4 billion, representing 47.0 percent of total assets as of September 30, 2021 compared to 40.4 percent as of December 31, 2020. Mortgage loans decreased by $0.9 billion during the first nine months of 2021, representing 18.3 percent of total assets as of September 30, 2021, compared to 17.5 percent as of December 31, 2020. Total liabilities decreased $7.0 billion from December 31, 2020 to September 30, 2021, which corresponded with the decline in assets. Total capital decreased $96.6 million, or 3.6 percent, from December 31, 2020 to September 30, 2021 due to a decrease in excess capital stock partially offset by an increase in unrealized gains on available-for-sale securities and net income in excess of dividends paid.

Advances: Advances are one of the primary ways we fulfill our mission of providing liquidity to our members and constituted the largest asset on our balance sheet at September 30, 2021 and December 31, 2020. Advance par value increased by 1.5 percent from December 31, 2020 to September 30, 2021 (see Table 24). Although advance balances have remained steady since December 31, 2020, the relatively low balances reflect the continued decrease in member demand for advances, as deposit inflows have outpaced loan demand at depository members since the second quarter of 2020 due to COVID-19 pandemic-related economic stimulus. Additionally, the Federal Reserve Bank’s Paycheck Protection Program (PPP) Liquidity Facility was a direct competitor for FHLBank advances, which some members began utilizing instead of advances because of its neutral effect on regulatory capital. Though the majority of the decrease in advances experienced since March 2020 is attributable to our largest borrowers, the decline in advance demand was widespread among our membership. During the third quarter of 2021, some larger members resumed the use of advances to fund balance sheet growth or meet other liquidity needs.

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As of September 30, 2021 and December 31, 2020, 54.1 percent and 56.3 percent, respectively, of our members carried outstanding advance balances. Additional volatility in advance balances may occur for the remainder of 2021 and into 2022 based on several factors related to the COVID-19 pandemic, including large members with relatively strong deposit growth and access to other funding sources, which could cause an additional decline in advance balances. Advances may also decline if additional economic stimulus increases market liquidity as it flows to members in the form of deposits.

The composition of the advance portfolio remains concentrated in advances that either reprice or mature on a relatively short-term basis as members continue to benefit from the relatively low interest rate environment. Advance composition began to shift from adjustable rate to fixed rate in March 2020, as interest rates began declining. Members called adjustable rate callable advances in favor of regular and short-term fixed rate advances or paid a prepayment fee to modify an advance to a lower rate and extend fixed rate advance terms. Modification volume slowed during the third quarter of 2021, but the current interest rate environment provides opportunities for members to modify the rate and/or term of existing advances so there may be additional requests for advance modifications.

Rather than match-funding long-term, fixed rate, large dollar advances, we elect to swap a significant portion of large dollar advances with longer maturities to short-term indices to synthetically create adjustable rate advances. When coupled with the volume of our short-term advances, advances that effectively re-price at least every three months represent 90.4 percent and 89.3 percent of our total advance portfolio as of September 30, 2021 and December 31, 2020, respectively. We anticipate continuing the practice of swapping large dollar advances with longer maturities to short-term indices. As part of our LIBOR transition plan, we began offering adjustable rate advances indexed to the Secured Overnight Financing Rate (SOFR) in late 2020 and had $819 million SOFR-indexed advances outstanding as of September 30, 2021. For additional information on our LIBOR transition efforts and LIBOR exposure, see “Risk Management – Interest Rate Risk Management” under this Item 2.

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Table 24 summarizes advances outstanding by product (dollar amounts in thousands). An individual advance may be reclassified to a different product type between periods due to the occurrence of a triggering event such as the passing of a call date (i.e., from fixed rate callable advance to regular fixed rate advance) or conversion of an advance (i.e., from fixed rate convertible advance to adjustable rate callable advance).

Table 24

	09/30/2021				12/31/2020
	Dollar		Percent		Dollar		Percent
Line of Credit:
Legacy line of credit1	$	—	—	%	$	979,591	4.6	%
Overnight line of credit2	1,956,651		9.2	%	—		—
Total line of credit advances	1,956,651		9.2		979,591		4.6
Adjustable rate:
Standard advance products:
Regular adjustable rate advances	1,287,250		6.0		1,132,700		5.4
Adjustable rate callable advances	1,612,300		7.6		2,322,600		11.1
Standard housing and community development advances:
Adjustable rate callable advances	29,712		0.1		35,712		0.2
Total adjustable rate term advances	2,929,262		13.7		3,491,012		16.7
Fixed rate:
Standard advance products:
Short-term fixed rate advances3	8,236,465		38.7		8,672,584		41.4
Regular fixed rate advances	5,556,043		26.1		5,055,179		24.1
Fixed rate callable advances	65,846		0.3		20,146		0.1
Standard housing and community development advances:
Regular fixed rate advances	415,182		2.0		461,178		2.2
Fixed rate callable advances	831		—		831		—
Total fixed rate term advances	14,274,367		67.1		14,209,918		67.8
Convertible:
Standard advance products:
Fixed rate convertible advances	1,497,150		7.0		1,656,550		7.9
Amortizing:
Standard advance products:
Fixed rate amortizing advances	326,358		1.5		323,928		1.5
Fixed rate callable amortizing advances	22,082		0.1		10,702		0.1
Standard housing and community development advances:
Fixed rate amortizing advances	280,752		1.3		292,448		1.4
Fixed rate callable amortizing advances	10,069		0.1		8,292		—
Total amortizing advances	639,261		3.0		635,370		3.0
TOTAL PAR VALUE	$	21,296,691	100.0	%	$	20,972,441	100.0	%

1    Represents adjustable rate revolving line of credit advances that may be repaid at any time, with a term of one year. We anticipate discontinuing this product in 2022.

2    Represents fixed rate line of credit advances with daily maturities. We began offering this product in 2021 with the intention of replacing the legacy line of credit product.

3    Represents non-amortizing, non-prepayable loans with terms to maturity from 3 to 93 days.

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Table 25 presents information on our five largest borrowers (dollar amounts in thousands). If the borrower was not one of our top five borrowers for one of the periods presented, the applicable columns are left blank. Based on no historical loss experience on advances since the inception of FHLBank, along with our rights to collateral with an estimated fair value in excess of the book value of these advances, we do not expect to incur any credit losses on these advances.

Table 25

	09/30/2021				12/31/2020
Borrower Name	Advance Par Value		Percent of Total Advance Par		Advance Par Value		Percent of Total Advance Par
MidFirst Bank	$	7,770,000	36.5	%	$	7,460,000	35.6	%
Capitol Federal Savings Bank	1,590,000		7.5		1,740,000		8.3
United of Omaha Life Insurance Co.	1,557,485		7.3		1,420,604		6.8
Security Life of Denver Insurance Co.	1,195,000		5.6		1,010,000		4.8
Colorado Federal Savings	595,000		2.8
Gateway First Bank					547,468		2.6
TOTAL	$	12,707,485	59.7	%	$	12,178,072	58.1	%

Table 26 presents the accrued interest income associated with the five borrowers with the highest interest income for the periods presented (dollar amounts in thousands). If the borrower was not one of our top five borrowers for whom we accrued the highest amount of interest income for one of the periods presented, the applicable columns are left blank.

Table 26

	Three Months Ended
	09/30/2021				09/30/2020
Borrower Name	Advance Income		Percent of Total Advance Income1		Advance Income		Percent of Total Advance Income1
MidFirst Bank	$	4,829	10.6	%	$	5,005	9.2	%
Capitol Federal Savings Bank	4,819		10.5		6,500		11.9
American Fidelity Assurance Co.	2,638		5.8		2,864		5.2
United of Omaha Life Insurance Co.	1,797		3.9		1,776		3.3
WEOKIE Federal Credit Union	1,496		3.3
CrossFirst Bank					1,582		2.9
TOTAL	$	15,579	34.1	%	$	17,727	32.5	%

1    Total advance income by borrower excludes: (1) changes in unrealized gains (losses) from qualifying fair value hedging relationships; (2) net interest settlements on derivatives hedging the advances; and (3) prepayment fees received.

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Table 27 presents accrued interest income associated with the five borrowers with the highest interest income for the periods presented (dollar amounts in thousands). If the borrower was not one of our top five borrowers for whom we accrued the highest amount of interest income for one of the periods presented, the applicable columns are left blank.

Table 27

	Nine Months Ended
	09/30/2021				09/30/2020
Borrower Name	Advance Income		Percent of Total Advance Income1		Advance Income		Percent of Total Advance Income1
MidFirst Bank	$	14,952	10.7	%	$	43,643	17.0	%
Capitol Federal Savings Bank	14,136		10.1		25,493		9.9
American Fidelity Assurance Co.	8,093		5.8		9,169		3.6
United of Omaha Life Insurance Co.	5,297		3.8		8,774		3.4
WEOKIE Federal Credit Union	4,449		3.2
BOKF, N.A.					31,235		12.1
TOTAL	$	46,927	33.6	%	$	118,314	46.0	%

1    Total advance income by borrower excludes: (1) changes in unrealized gains (losses) from qualifying fair value hedging relationships; (2) net interest settlements on derivatives hedging the advances; and (3) prepayment fees received.

MPF Program: The MPF Program is a secondary mortgage market alternative for our members, especially utilized by the smaller institutions in our district. We participate in the MPF Program through the MPF Provider, a division of FHLBank Chicago. Under the MPF Program, participating members can sell us conventional and government single-family residential mortgage loans.

The low interest rate environment has increased mortgage loan prepayments, which has contributed to a decrease of 9.7 percent in the outstanding net balance of our mortgage loan portfolio, from $9.2 billion at December 31, 2020 to $8.3 billion at September 30, 2021. Net mortgage loans as a percentage of total assets increased, from 17.5 percent as of December 31, 2020 to 18.3 percent as of September 30, 2021. Mortgage loans are one of the highest net spread assets on our balance sheet and as they increase as a percent of total assets, all things being equal, they have the potential to increase our net interest margin, although accelerated premium amortization from mortgage loan prepayments has resulted in spread compression in recent periods. The principal amount of new mortgage loans acquired and held on our balance sheet from our PFIs during the nine months ended September 30, 2021 was $1.7 billion.

As a result of the decline in advances from pre-pandemic levels, we are monitoring our targeted AMA risk tolerance as a percent of our balance sheet and are implementing strategies to manage growth in the mortgage loan portfolio. Future growth in the MPF portfolio is a function of asset size and composition, most notably the balance of advances, and a multiple of capital, as growth in advances impacts our capital level and allows the balance of mortgage loans to increase without exceeding our targeted AMA risk tolerance. The other factors that may influence future growth in our mortgage loans held for portfolio include: (1) the number of new and delivering PFIs; (2) the mortgage loan origination volume of current PFIs; (3) refinancing activity; (4) the level of interest rates and the shape of the yield curve; (5) the relative competitiveness of MPF pricing to the prices offered by other buyers of residential mortgage loans; and (6) a PFI's level of excess risk-based capital relative to the required risk-based capital charge associated with the PFI's credit enhancement obligations on MPF mortgage loans. In an effort to manage the level of mortgage loans on our books, management has researched and continues to review options including selling or participating loan volume (as described below) to members or other investors if needed. Although we may determine to sell whole loans from time to time, we have not identified any specific loans to be sold as of September 30, 2021. The MPF Program is evaluating additional liquidity options that may help participating FHLBanks manage the size of their mortgage loan portfolios in the future.

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Table 28 presents the outstanding balances of mortgage loans sold to us, net of participations, from our top five PFIs and the percentage of those loans to total mortgage loans outstanding (dollar amounts in thousands).

Table 28

	09/30/2021				12/31/2020
	Mortgage Loan Balance		Percent of Total Mortgage Loans		Mortgage Loan Balance		Percent of Total Mortgage Loans
Tulsa Teachers Credit Union	$	347,393	4.2	%	$	338,935	3.7	%
Fidelity Bank	304,852		3.7		333,086		3.7
West Gate Bank	256,960		3.1		270,985		3.0
NBKC Bank	238,476		2.9		481,224		5.3
Community National Bank & Trust	228,973		2.8
FirstBank of Colorado					318,220		3.5
TOTAL	$	1,376,654	16.7	%	$	1,742,450	19.2	%

Two indications of credit quality are scores provided by Fair Isaac Corporation (FICO®) and loan-to-value (LTV) ratios. FICO is a widely used credit industry indicator to assess borrower credit quality with scores typically ranging from 300 to 850 with the low end of the scale indicating greater credit risk. The MPF Program requires a minimum FICO score of 620 for all conventional loans. LTV is a primary variable in credit performance. Generally speaking, a higher LTV ratio means greater risk of loss in the event of a default and also means higher loss severity. The weighted average FICO score and LTV recorded at origination for conventional mortgage loans outstanding as of September 30, 2021 was 750 and 73.6 percent, respectively. See Note 5 of the Notes to Financial Statements under Part I, Item 1 for additional information regarding credit quality indicators.

Allowance for Credit Losses on Mortgage Loans Held for Portfolio – The allowance for credit losses on mortgage loans increased $1.1 million from December 31, 2020 to September 30, 2021 due to an increase in forecasted losses attributable to a downward shift in the long term outlook for home price growth. As of September 30, 2021, there was $21.6 million, or 0.3 percent, of unpaid principal balances of conventional loans in a forbearance plan as a result of COVID-19, representing $0.3 million, $2.1 million, $2.2 million, and $17.1 million with payment status of current, 30 to 59 days past due, 60 to 89 days past due, and greater than 90 days past due, respectively. Delinquencies of conventional loans, including loans in a COVID-19 forbearance plan, remained at low levels relative to the portfolio, at 1.1 percent and 2.1 percent of the amortized cost of total conventional loans at September 30, 2021 and December 31, 2020, respectively. We believe that policies and procedures are in place to effectively manage the credit risk on mortgage loans held for portfolio. See Note 5 of the Notes to Financial Statements under Part I, Item 1 for a summary of the allowance for credit losses on mortgage loans as well as payment status and other delinquency statistics for our mortgage loan portfolio.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) allows financial institutions to provide payment forbearance to assist borrowers who have experienced a hardship resulting from COVID-19. Our mortgage loan servicers may grant a forbearance period to borrowers who have requested forbearance based on COVID-19 related difficulties regardless of the status of the loan at the time of the request, which could impact our mortgage loan portfolio and allowance in future periods.

Investments: Investments are used to manage interest rate and duration risk, enhance income, and provide liquidity and primary and secondary market support for the U.S. housing securities market. Total investments decreased $1.8 billion from December 31, 2020 to September 30, 2021 primarily due to a net decrease in U.S. Treasury securities, GSE MBS, and short-term investments.

Short-term Investments – Short-term investments, which are used to provide funds to meet the credit needs of our members, maintain liquidity, meet other financial obligations such as debt servicing, and enhance income, consist primarily of reverse repurchase agreements, interest-bearing deposits, Federal funds sold, and certificates of deposit.

Within our portfolio of short-term investments, counterparty credit risk arises from unsecured exposures. Our short-term unsecured credit investments have maturities generally ranging between overnight and three months and may include the following types:

•Interest-bearing deposits. Unsecured deposits that earn interest.

•Federal funds sold. Unsecured loans of reserve balances at the Federal Reserve Banks between financial institutions that are made on either an overnight or term basis, but typically made on an overnight basis.

•Certificates of deposit. Unsecured negotiable promissory notes issued by banks and payable to the bearer at maturity.

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Table 29 presents the carrying value of our unsecured credit exposure with private counterparties by investment type (in thousands). The unsecured investment credit exposure presented may not reflect the average or maximum exposure during the period as the balances presented reflect the balances at period end.

Table 29

	09/30/2021		12/31/2020
Interest-bearing deposits	$	567,000	$	756,250
Federal funds sold	1,958,000		1,780,000
Certificates of deposit	200,009		—
TOTAL UNSECURED INVESTMENT CREDIT EXPOSURE1	$	2,725,009	$	2,536,250

1    Excludes unsecured investment credit exposure to U.S. government, U.S. government agencies, instrumentalities, GSEs and supranational entities and does not include related accrued interest.

We actively monitor our credit exposures and the credit quality of our counterparties, including an assessment of each counterparty’s financial performance, capital adequacy, sovereign support and the current market perceptions of the counterparties. General macro-economic, political and market conditions may also be considered when deciding on unsecured exposure. As a result, we may further limit existing exposures.

FHFA regulations: (1) include limits on the amount of unsecured credit an individual FHLBank may extend to a counterparty or to a group of affiliated counterparties; (2) permit us to extend additional unsecured credit for overnight extensions of credit, subject to limitations; and (3) prohibit us from investing in financial instruments issued by non-U.S. entities other than those issued by U.S. branches and agency offices of foreign commercial banks. For additional information on our management of unsecured credit exposure, see Part II, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Investments” in our annual report on Form 10-K for the year ended December 31, 2020. As of September 30, 2021, we were in compliance with all FHFA regulations relating to unsecured credit exposure.

We manage our credit risk by conducting pre-purchase credit due diligence and ongoing surveillance described previously and generally investing in unsecured investments of highly-rated counterparties. From time to time, we extend unsecured credit to qualified members by investing in overnight Federal funds issued by them. As of September 30, 2021, all unsecured investments were rated as investment grade based on NRSRO (see Table 33).

Table 30 presents the amount of our unsecured investment credit exposure by remaining contractual maturity and by the domicile of the counterparty or the domicile of the counterparty’s parent for U.S. branches and agency offices of foreign commercial banks as of September 30, 2021 (in thousands). We also mitigate the credit risk on investments by purchasing instruments that have short-term maturities.

Table 30

Domicile of Counterparty	Overnight		Due 2 – 30 days		Total
Domestic	$	567,000	$	—	$	567,000
U.S. Branches and agency offices of foreign commercial banks:
Finland	743,000		—		743,000
Canada	740,000		—		740,000
Netherlands	375,000		—		375,000
Germany	100,000		200,009		300,009
Total U.S. Branches and agency offices of foreign commercial banks	1,958,000		200,009		2,158,009
TOTAL UNSECURED INVESTMENT CREDIT EXPOSURE1	$	2,525,000	$	200,009	$	2,725,009

1    Excludes unsecured investment credit exposure to U.S. government, U.S. government agencies, instrumentalities, GSEs and supranational entities, and does not include related accrued interest.

Unsecured credit exposure continues to be conservatively placed. In addition, we anticipate continued future investment in reverse repurchase agreements, which are secured investments. To enhance our liquidity position, we classify our unsecured short-term investment securities in our trading portfolio, which allows us to sell these securities if necessary.

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Long-term investments – Our long-term investment portfolio consists primarily of GSE MBS and U.S. Treasury obligations. Our Risk Management Policy (RMP) restricts the acquisition of investments to highly rated long-term securities. Generally, fixed-rate U.S. Treasury obligations are either classified as trading securities and economically swapped to variable rates or classified as available-for-sale securities and swapped to variable rates in qualifying fair value hedging relationships. In addition to serving as excellent collateral, U.S. Treasury obligations also satisfy regulatory liquidity requirements. We also position fixed rate securities for duration and interest rate risk management. Currently, the majority of our variable rate investment securities are indexed to LIBOR. For additional information on our LIBOR transition efforts and LIBOR exposure, see “Risk Management – Interest Rate Risk Management” under this Item 2.

According to FHFA regulation, no additional MBS purchases can be made if the aggregate value of our MBS exceeds 300 percent of our regulatory capital. Further, quarterly increases in holdings of MBS are restricted to no more than 50 percent of regulatory capital. As of September 30, 2021, the aggregate value of our MBS portfolio represented 237 percent of our regulatory capital. We were below our threshold at September 30, 2021 due to limited MBS investment opportunities. We are no longer purchasing investments that reference LIBOR and mature after December 31, 2021.

Major Security Types – Securities for which we have the ability and intent to hold to maturity are classified as held-to-maturity securities and recorded at carrying value, which is the net total of par, premiums, and discounts. We classify certain investments as trading or available-for-sale securities and carry them at fair value, generally for liquidity purposes, to provide a fair value offset to the gains (losses) on the interest rate swaps tied to swapped securities, and for asset/liability management purposes. Liquidity or other asset/liability management strategies, such as reducing our LIBOR exposure, may require periodic sale of these securities but they are not actively traded; most often, they are held until maturity or call date. Securities acquired as asset/liability management tools to manage duration risk, which are likely to be sold when the duration exposure is within risk tolerances, are classified as trading or available-for-sale securities. Changes in the fair values of investments classified as trading are recorded through other income and original premiums/discounts on these investments are not amortized.

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See Note 3 of the Notes to Financial Statements under Part I, Item 1 of this quarterly report for additional information on our different investment classifications including the types of securities held under each classification. The carrying value of our investments is summarized by security type in Table 31 (in thousands).

Table 31

	09/30/2021		12/31/2020
Trading securities:
Certificates of deposit	$	200,009	$	—
U.S. Treasury obligations	1,176,148		1,298,518
GSE debentures	421,980		431,875
GSE MBS	824,260		892,983
Total trading securities	2,622,397		2,623,376
Available-for-sale securities:
U.S. Treasury obligations	2,842,599		3,546,325
U.S. obligation MBS	55,342		—
GSE MBS	4,878,247		3,194,985
Total available-for-sale securities	7,776,188		6,741,310
Held-to-maturity securities:
State or local housing agency obligations	78,095		78,960
U.S. obligation MBS	—		70,814
GSE MBS	355,191		2,597,218
Total held-to-maturity securities	433,286		2,746,992
Total securities	10,831,871		12,111,678
Interest-bearing deposits	569,222		760,297
Federal funds sold	1,958,000		1,780,000
Securities purchased under agreements to resell	2,100,000		2,600,000
TOTAL INVESTMENTS	$	15,459,093	$	17,251,975

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The carrying values by contractual maturities of our investments are summarized by security type in Table 32 (dollar amounts in thousands). Expected maturities of certain securities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

Table 32

	09/30/2021
	Due in one year or less			Due after one year through five years			Due after five years through 10 years			Due after 10 years			Carrying Value
Trading securities:
Certificates of deposit	$	200,009		$	—		$	—		$	—		$	200,009
U.S. Treasury obligations	503,798			672,350			—			—			1,176,148
GSE debentures	—			421,980			—			—			421,980
GSE MBS	—			604,403			187,048			32,809			824,260
Total trading securities	703,807			1,698,733			187,048			32,809			2,622,397
Yield on trading securities	1.87		%	2.67		%	2.95		%	0.86		%
Available-for-sale securities:
U.S. Treasury obligations	959,599			1,883,000			—			—			2,842,599
U.S. obligation MBS	—			—			—			55,342			55,342
GSE MBS	21,299			1,321,870			2,628,574			906,504			4,878,247
Total available-for-sale securities	980,898			3,204,870			2,628,574			961,846			7,776,188
Yield on available-for-sale securities	1.81		%	1.65		%	2.58		%	1.47		%
Held-to-maturity securities:
State or local housing agency obligations	—			—			48,095			30,000			78,095
GSE MBS	2,520			—			38,121			314,550			355,191
Total held-to-maturity securities	2,520			—			86,216			344,550			433,286
Yield on held-to-maturity securities	1.80		%	—		%	1.34		%	1.56		%
Total securities	1,687,225			4,903,603			2,901,838			1,339,205			10,831,871
Yield on total securities	1.83		%	2.00		%	2.56		%	1.48		%
Interest-bearing deposits	569,222			—			—			—			569,222
Federal funds sold	1,958,000			—			—			—			1,958,000
Securities purchased under agreements to resell	2,100,000			—			—			—			2,100,000
TOTAL INVESTMENTS	$	6,314,447		$	4,903,603		$	2,901,838		$	1,339,205		$	15,459,093

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Securities Ratings – Tables 33 and 34 present the carrying value of our investments by rating as of September 30, 2021 and December 31, 2020 (in thousands). The ratings presented are the lowest ratings available for the security, issuer, or counterparty based on NRSROs, where available. Some counterparties for collateralized overnight borrowing are not rated by an NRSRO because they are not issuers of debt or are otherwise not required to be rated by an NRSRO. We also utilize other credit quality factors when analyzing potential investments including, but not limited to, collateral performance, marketability, asset class or sector considerations, local and regional economic conditions, and/or the financial health of the underlying issuer.

Table 33

	09/30/2021
	Carrying Value1
	Investment Grade						Unrated		Total
	Triple-A		Double-A		Single-A
Interest-bearing deposits2	$	—	$	2,222	$	567,000	$	—	$	569,222
Federal funds sold2	—		743,000		1,215,000		—		1,958,000
Securities purchased under agreements to resell3	—		—		600,000		1,500,000		2,100,000
Investment securities:
Non-mortgage-backed securities:
Certificates of deposit2	—		—		200,009		—		200,009
U.S. Treasury obligations	—		4,018,747		—		—		4,018,747
GSE debentures	—		421,980		—		—		421,980
State or local housing agency obligations	48,095		30,000		—		—		78,095
Total non-mortgage-backed securities	48,095		4,470,727		200,009		—		4,718,831
Mortgage-backed securities:
U.S. obligation MBS	—		55,342		—		—		55,342
GSE MBS	—		6,057,698		—		—		6,057,698
Total mortgage-backed securities	—		6,113,040		—		—		6,113,040
TOTAL INVESTMENTS	$	48,095	$	11,328,989	$	2,582,009	$	1,500,000	$	15,459,093

1    Investment amounts represent the carrying value and do not include related accrued interest receivable of $32.4 million at September 30, 2021.

2    Amounts include unsecured credit exposure with original maturities from overnight to 84 days.

3    Amounts represent collateralized overnight borrowings.

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Table 34

	12/31/2020
	Carrying Value1
	Investment Grade						Unrated		Total
	Triple-A		Double-A		Single-A
Interest-bearing deposits2	$	—	$	4,047	$	756,250	$	—	$	760,297
Federal funds sold2	—		150,000		1,630,000		—		1,780,000
Securities purchased under agreements to resell3	—		—		—		2,600,000		2,600,000
Investment securities:
Non-mortgage-backed securities:
U.S. Treasury obligations	—		4,844,843		—		—		4,844,843
GSE debentures	—		431,875		—		—		431,875
State or local housing agency obligations	48,960		30,000		—		—		78,960
Total non-mortgage-backed securities	48,960		5,306,718		—		—		5,355,678
Mortgage-backed securities:
U.S. obligation MBS	—		70,814		—		—		70,814
GSE MBS	—		6,685,186		—		—		6,685,186
Total mortgage-backed securities	—		6,756,000		—		—		6,756,000
TOTAL INVESTMENTS	$	48,960	$	12,216,765	$	2,386,250	$	2,600,000	$	17,251,975

1    Investment amounts represent the carrying value and do not include related accrued interest receivable of $37.9 million at December 31, 2020.

2    Amounts include unsecured credit exposure with overnight maturities.

3    Amounts represent collateralized overnight borrowings.

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Table 35 details interest rate payment terms for the carrying value of our investment securities as of September 30, 2021 and December 31, 2020 (in thousands). We generally manage the interest rate risk associated with our fixed rate trading and available-for-sale securities by entering into interest rate swaps that convert the investment's fixed rate to a variable rate index (see Tables 48 and 49 under Part I, Item 3 – “Quantitative and Qualitative Disclosures About Market Risk)."

Table 35

	09/30/2021		12/31/2020
Trading securities:
Non-mortgage-backed securities:
Fixed rate	$	1,798,137	$	1,730,393
Non-mortgage-backed securities	1,798,137		1,730,393
Mortgage-backed securities:
Fixed rate	790,656		853,027
Variable rate	33,604		39,956
Mortgage-backed securities	824,260		892,983
Total trading securities	2,622,397		2,623,376
Available-for-sale securities:
Non-mortgage-backed securities:
Fixed rate	2,842,599		3,546,325
Non-mortgage-backed securities	2,842,599		3,546,325
Mortgage-backed securities:
Fixed rate	3,195,725		3,194,985
Variable rate	1,737,864		—
Mortgage-backed securities	4,933,589		3,194,985
Total available-for-sale securities	7,776,188		6,741,310
Held-to-maturity securities:
Non-mortgage-backed securities:
Variable rate	78,095		78,960
Non-mortgage-backed securities	78,095		78,960
Mortgage-backed securities:
Fixed rate	53,010		73,595
Variable rate	302,181		2,594,437
Mortgage-backed securities	355,191		2,668,032
Total held-to-maturity securities	433,286		2,746,992
TOTAL	$	10,831,871	$	12,111,678

Deposits: Deposits are generally an insignificant source of funding. Total deposits decreased $195.8 million from December 31, 2020 to September 30, 2021 as a result of a decrease in non-interest bearing demand and overnight deposits.

Consolidated Obligations: Consolidated obligations are the joint and several debt obligations of the FHLBanks and consist of bonds and discount notes. Consolidated obligations represent the primary source of liabilities we use to fund advances, mortgage loans and investments. As noted under Part I, Item 3 – “Quantitative and Qualitative Disclosures About Market Risk,” we use debt with a variety of maturities and option characteristics to manage our interest rate risk profile. We make use of derivative transactions, executed in conjunction with specific consolidated obligation debt issues, to synthetically structure funding terms and costs.

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Table 36 presents the carrying value of consolidated obligation bonds and discounts notes as of September 30, 2021 and December 31, 2020 (in thousands).

Table 36

	09/30/2021		12/31/2020
Bonds:
Par value	$	31,465,000	$	37,592,650
Premiums	26,544		38,219
Discounts	(2,842)		(3,303)
Concession fees	(12,152)		(14,143)
Hedging adjustments	1,230		34,654
Total bonds	31,477,780		37,648,077
Discount Notes:
Par value	10,277,770		10,883,608
Discounts	(435)		(1,041)
Concession fees	(98)		(117)
Hedging adjustments	—		(33)
Total discount notes	10,277,237		10,882,417
TOTAL	$	41,755,017	$	48,530,494

Total consolidated obligations decreased $6.8 billion, or 14.0 percent, from December 31, 2020 to September 30, 2021. The distribution between consolidated obligation bonds and discount notes remained relatively consistent between periods, from 77.6 percent and 22.4 percent, respectively, at December 31, 2020 to 75.4 percent and 24.6 percent at September 30, 2021, respectively. Our funding mix generally is driven by asset composition, but we may also shift our debt composition as a result of market conditions that impact the cost of consolidated obligations swapped or indexed to SOFR, Treasury bills, or the Overnight Index Swap rate (OIS). Nearly all floating rate bonds issued during the first nine months of 2021 were indexed to SOFR as we continue to transition away from LIBOR and maintain our allocation of floating rate bonds funding short-term advances and short-term investments. For additional information on market trends impacting the cost of issuing debt, including discussion of the transition from LIBOR to an alternate reference rate, see "Financial Market Trends", "Liquidity and Capital Resources — Liquidity — Sources of Liquidity” and "Risk Management – Interest Rate Risk Management" under this Item 2.

Liquidity and Capital Resources

Liquidity: We maintain high levels of liquidity to achieve our mission of serving as an economical funding source for our members and housing associates. As part of fulfilling our mission, we also maintain minimum liquidity requirements in accordance with certain FHFA regulations and guidelines and in accordance with policies established by management and the board of directors. Our business model enables us to manage the levels of our assets, liabilities, and capital in response to member credit demand, membership composition, and market conditions. As such, assets and liabilities utilized for liquidity purposes can vary significantly in the normal course of business due to the amount and timing of cash flows as a result of these factors.

Sources and Uses of Liquidity – A primary source of our liquidity is the issuance of consolidated obligations. The capital markets traditionally have treated FHLBank obligations as U.S. government agency debt. As a result, even though the U.S. government does not guarantee FHLBank debt, we generally have comparatively stable access to funding at relatively favorable spreads to U.S. Treasury rates. We are primarily and directly liable for our portion of consolidated obligations (i.e., those obligations issued on our behalf). In addition, we are jointly and severally liable with the other FHLBanks for the payment of principal and interest on the consolidated obligations of all FHLBanks. Our uses of liquidity primarily include issuing advances, purchasing investments and mortgage loans, and repaying called and maturing consolidated obligations for which we are the primary obligor. We also use liquidity to repay member deposits, pledge collateral to derivative counterparties, and redeem or repurchase capital stock. Our other sources of liquidity include our short-term liquidity portfolio, deposit inflows, repayments of advances and mortgage loans, maturing investments, trading and available-for-sale investments, interest income, maturing Federal funds sold, and proceeds from maturing reverse repurchase agreements or the sale of unencumbered assets.

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During the nine months ended September 30, 2021, proceeds (net of premiums and discounts) from the issuance of bonds and discount notes were $28.7 billion and $239.6 billion, respectively, compared to $35.0 billion and $500.3 billion for the nine months ended September 30, 2020. The difference between the proceeds from bonds and discount notes reflects the cumulative effect of using short-term discount notes to fund short-term advances and our short-term liquidity portfolio. The change in these issuances year over year reflects the decrease in advance balances and also reflects our composition shift from discount notes to the use of term funding indexed to SOFR.

Our short-term liquidity portfolio consists of cash, short-term investments, and long-term investments with remaining maturities of one year or less. Short-term investments may include Federal funds sold, interest-bearing demand deposits, certificates of deposit, and reverse repurchase agreements. The short-term liquidity portfolio decreased between periods, from $11.8 billion as of December 31, 2020 to $6.3 billion as of September 30, 2021. The short-term liquidity portfolio was elevated at year end in anticipation of potential year-end financial disruptions. The maturities of our short-term investments are structured to provide periodic cash flows to support our ongoing liquidity needs. To enhance our liquidity position, short-term investment securities (i.e., marketable certificates of deposit) are also classified as trading when held so that they can be readily sold should liquidity be needed immediately.

We also maintain a portfolio of GSE debentures, U.S. Treasury obligations, and GSE MBS that can be pledged as collateral for financing in the securities repurchase agreement market and are classified as trading to enhance our liquidity position. The par value of these debentures and U.S. Treasury obligations was $1.5 billion and $1.6 billion as of September 30, 2021 and December 31, 2020, respectively. The par value of these MBS was $0.8 billion as of both September 30, 2021 and December 31, 2020. We also held $2.8 billion and $3.5 billion in par value of U.S. Treasury obligations classified as available-for-sale as of September 30, 2021 and December 31, 2020, respectively, as an additional source of liquidity to satisfy regulatory liquidity requirements. In addition to the balance sheet sources of liquidity discussed previously, we have established lines of credit with numerous counterparties in the Federal funds market as well as with the other FHLBanks. Accordingly, we expect to maintain a sufficient level of liquidity for the foreseeable future.

During the nine months ended September 30, 2021, advance disbursements totaled $351.7 billion compared to $244.8 billion for the prior year period. During the nine months ended September 30, 2021, investment purchases (excluding overnight investments) totaled $2.7 billion compared to $1.3 billion for the same period in the prior year. During the nine months ended September 30, 2021, payments on consolidated obligation bonds and discount notes were $34.8 billion and $240.2 billion, respectively, compared to $29.7 billion and $515.8 billion for the prior year period.

Capital: Total capital decreased $96.6 million, or 3.6 percent, from December 31, 2020 to September 30, 2021 due to a decrease in excess capital stock partially offset by an increase in unrealized gains on available-for-sale securities and net income in excess of dividends paid. (see Table 37). We strive to manage our average capital ratio to remain above our minimum regulatory and RMP requirements in an effort to ensure that we have the ability to issue additional consolidated obligations should the need arise. Excess capital capacity ensures we are able to meet the liquidity needs of our members and/or repurchase excess stock either upon the submission of a redemption request by a member or at our discretion for balance sheet or capital management purposes.

Our activity-based stock purchase requirements are consistent with our cooperative structure; members’ stock ownership requirements and the dollar amount of dividends paid to members generally increase as their activities with us increase. To the extent that a member’s asset-based stock purchase requirement is insufficient to cover the member’s activity-based stock purchase requirement, the member is required to purchase Class B Common Stock. We believe the value of our products and services is enhanced by dividend yields that exceed the return available from other investments with similar terms and credit quality. Factors that affect members’ willingness to enter into activity with us and purchase additional required activity-based stock include, but are not limited to, our dividend rates, the risk-based capital weighting of our capital stock, and alternative investment or borrowing opportunities available to our members.

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Table 37 provides a summary of member capital requirements under our current capital plan as of September 30, 2021 and December 31, 2020 (in thousands):

Table 37

Requirement	09/30/2021		12/31/2020
Asset-based (Class A Common Stock only)	$	174,544	$	161,766
Activity-based (additional Class B Common Stock)1	1,098,275		1,100,684
Total Required Stock2	1,272,819		1,262,450
Excess Stock (Class A and B Common Stock)	110,270		313,178
Total Regulatory Capital Stock2	$	1,383,089	$	1,575,628
Activity-based Requirements:
Advances3	$	952,885	$	936,880
Letters of credit4	11,189		—
AMA assets (mortgage loans)5	244,529		268,915
Total Activity-based Requirement	1,208,603		1,205,795
Asset-based Requirement (Class A Common Stock) not supporting member activity1	64,216		56,655
Total Required Stock2	$	1,272,819	$	1,262,450

1    Class A Common Stock, up to a member’s asset-based stock requirement, will be used to satisfy a member’s activity-based stock requirement before any Class B Common Stock is purchased by the member.

2    Includes mandatorily redeemable capital stock.

3    Advances to housing associates have no activity-based requirements because housing associates cannot own FHLBank stock.

4    The Letter of Credit Activity-based Stock Purchase requirement of 0.25 percent became effective January 22, 2021.

5    Non-members previously required to purchase AMA activity-based stock are subject to the stock requirement in place at the time their membership ended as long as there are unpaid principal balances outstanding.

We are subject to three capital requirements under provisions of the GLB Act, the FHFA’s capital structure regulation and our current capital plan, which include a risk-based capital requirement, total capital requirement and leverage capital requirement. We have been in compliance with each of the aforementioned capital rules and requirements at all times since the implementation of our capital plan. See Note 10 of the Notes to Financial Statements under Part I, Item 1 for additional information and compliance as of September 30, 2021 and December 31, 2020.

Capital Distributions: Dividends may be paid in cash or capital stock as authorized by our board of directors. Quarterly dividends can be paid out of current and previous unrestricted retained earnings, subject to FHFA regulation and our capital plan.

Dividends paid to members totaled $48.1 million for the nine months ended September 30, 2021 compared to $53.7 million for the same period in the prior year. The weighted average dividend rate for the three and nine months ended September 30, 2021 was 4.15 percent and 4.12 percent, which represented a dividend payout ratio of 43.1 percent and 42.1 percent, respectively, compared to a weighted average dividend rate of 3.69 percent and 4.48 percent, and a payout ratio of 35.1 percent and 74.6 percent, for the three and nine months ended September 30, 2020, respectively. The inflated payout ratio for the nine months ended September 30, 2020 was a result of the steep decline in net income from the COVID-19 pandemic-related market volatility during that period. The dividend payout ratio represents dividends declared and paid during a quarter as a percentage of net income for the quarter, although FHFA regulation requires dividends be paid out of known income prior to the declaration date. For example, dividends declared and paid in September 2021 were based on income during the three months ended August 31, 2021. (See Part I, Item 1 – “Business – Capital, Capital Rules and Dividends” of our Form 10-K for other factors that contribute to the level of dividends paid.)

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In accordance with our capital plan, we must pay holders of Class A Common Stock the dividend parity threshold rate before paying a higher rate to holders of Class B Common Stock. The current dividend parity threshold is equal to the average effective overnight Federal funds rate for a dividend period minus 100 basis points and was effective for all dividends paid in 2020 and 2021. The dividend parity threshold is floored at zero percent when the current overnight Federal funds target rate is less than one percent. Table 38 presents the dividend rates per annum paid on capital stock under our capital plan for the quarterly periods listed below:

Table 38

Applicable Rate per Annum	09/30/2021		06/30/2021		03/31/2021		12/31/2020		09/30/2020
Class A Common Stock	0.25	%	0.25	%	0.25	%	0.25	%	0.25	%
Class B Common Stock	5.25		5.25		5.25		5.25		5.25
Weighted Average1	4.15		4.06		4.15		4.09		3.69
Dividend Parity Threshold:
Average effective overnight Federal funds rate	0.09	%	0.07	%	0.08	%	0.09	%	0.09	%
Spread to index	(1.00)		(1.00)		(1.00)		(1.00)		(1.00)
TOTAL (floored at zero percent)	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%

1    Weighted average dividend rates are dividends paid in cash and stock on both classes of stock divided by the average of capital stock eligible for dividends.

We anticipate stock dividends on Class A Common Stock and Class B Common Stock will remain at these lower levels for the remainder of 2021, consistent with the lower level of short‑term interest rates and our retained earnings policy. Dividend rates typically move in tandem with short-term market rates, so the decrease in recent periods reflects the decline in market interest rates that began in March 2020. Adverse market conditions may result in lower dividend rates in future quarters. While there is no assurance that our board of directors will not change the dividend parity threshold in the future, the capital plan requires that we provide members with 90 days' notice prior to the end of a dividend period in which a different dividend parity threshold is utilized in the payment of a dividend.

Under the capital plan, all dividends paid in the form of capital stock must be paid in the form of Class B Common Stock. We expect to continue paying dividends primarily in the form of capital stock, but future dividends may be paid in cash. The payment of cash dividends instead of stock dividends should not have a significant impact from a liquidity perspective, as the subsequent redemption of excess stock created by stock dividends would utilize liquidity resources in the same manner as a cash dividend.

Risk Management

Active risk management continues to be an essential part of our operations and a key determinant of our ability to maintain earnings to return an acceptable dividend to our members and meet retained earnings thresholds. See Part II, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Risk Management” in our Form 10-K for information on our enterprise risk management program. A separate discussion of market risk is included under Part I, Item 3 – “Quantitative and Qualitative Disclosures About Market Risk” of this Form 10-Q.

Interest Rate Risk Management: Interest rate risk is the risk that relative and absolute changes in interest rates may adversely affect an institution's financial condition and performance. The goal of an interest rate risk management strategy is not necessarily to eliminate interest rate risk, but to manage it by setting, and operating within, an appropriate framework and limits. We generally manage interest rate risk by acquiring and maintaining a portfolio of assets and liabilities and entering into related derivative transactions to limit the expected mismatches in duration and market value of equity sensitivity. See Part I, Item 3 - "Quantitative and Qualitative Disclosures About Market Risk" for additional information on interest rate risk measurement.

Transition from LIBOR to an Alternative Reference Rate – Some of our assets, liabilities and collateral pledged are indexed to LIBOR, with exposure extending past December 31, 2021 and June 30, 2023. We have assessed our current LIBOR exposure, which included evaluating the fallback language of derivative and investment contracts indexed to LIBOR, and have developed a transition plan for the eventual replacement of LIBOR that includes strategies to manage and reduce exposure, operating under the assumption that SOFR will become the dominant replacement in the capital markets. On July 1, 2021, the FHFA issued a Supervisory Letter to the FHLBanks regarding an FHLBank’s use of alternative rates other than SOFR. The Supervisory Letter provides guidance on considerations such as volume of underlying transactions, credit sensitivity and modeling risk, among others, that an FHLBank should consider prior to using an alternative reference rate.

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The publication of LIBOR on a representative basis will cease for one-week and two-month LIBOR immediately after December 31, 2021, and the remaining LIBOR tenors immediately after June 30, 2023. Although the FCA does not expect LIBOR to become unrepresentative before the applicable cessation date and intends to consult on requiring the administrator of LIBOR to continue publishing LIBOR of certain currencies and tenors on a non-representative, synthetic basis for a period after the applicable cessation date, there is no assurance that LIBOR, of any particular currency or tenor, will continue to be published or be representative through any particular date. As of September 30, 2021, all of our exposure to LIBOR was in the one-month and three-month tenors. We are prohibited by our regulator to enter into new financial assets, liabilities, or derivatives that reference LIBOR and mature after December 31, 2021.

During the second quarter of 2021, we transferred LIBOR-indexed MBS with an amortized cost of $2.0 billion from held-to-maturity to available-for-sale. This transfer will enable us to sell these securities to reduce LIBOR exposure when market conditions and reinvestment opportunities are favorable. Market activity in SOFR-based financial instruments continues to develop. We offer advances indexed to SOFR and issue variable rate consolidated obligation bonds indexed to SOFR. In addition, we have been using SOFR- and OIS-based derivatives to manage interest-rate risk.

The principal balance of variable rate advances indexed to LIBOR as of September 30, 2021 was $0.4 billion, which represents 12.1 percent of total variable rate advances. The contractual maturities of these LIBOR-indexed advances are all due by the end of 2021; thus, we have no LIBOR exposure after 2021. We have $819.3 million in advances indexed to SOFR as of September 30, 2021.

Table 39 presents the par value of variable rate investment securities by the related interest rate index as of September 30, 2021 (dollar amounts in thousands):

Table 39

09/30/2021
Index	Amount		Percent
Non-mortgage-backed securities:
LIBOR	$	78,095	3.6	%
Non-mortgage-backed securities	78,095		3.6
Mortgage-backed securities:
LIBOR	2,070,652		96.4
Other	20		—
Mortgage-backed securities	2,070,672		96.4
TOTAL	$	2,148,767	100.0	%

Table 40 presents the par value of investment securities indexed to LIBOR outstanding by year of contractual maturity as of September 30, 2021 (in thousands):

Table 40

09/30/2021
Year of Contractual Maturity	Amount
Non-mortgage-backed securities:
After June 30, 2023	$	78,095
Non-mortgage-backed securities	78,095
Mortgage-backed securities:
2022	44,100
Through June 30, 2023	83,455
Thereafter	1,943,097
Mortgage-backed securities	2,070,652
TOTAL	$	2,148,747

83

Table 41 presents the notional amount of interest rate swaps (excludes interest rate caps and mortgage delivery commitments) by related interest rate index as of September 30, 2021 (amounts in thousands):

Table 41

09/30/2021
Index	Pay Side		Receive Side
Fixed rate	$	13,950,706	$	6,681,000
LIBOR	1,025,000		5,081,220
SOFR	3,051,000		6,664,948
OIS	2,605,000		2,204,538
TOTAL	$	20,631,706	$	20,631,706

Table 42 presents the notional amount of interest rate swaps (excludes interest rate caps and mortgage delivery commitments) indexed to LIBOR outstanding by termination date as of September 30, 2021 (in thousands). Actual terminations of certain derivatives will differ from contractual termination dates because derivative counterparties may have call options within the derivative contracts. Likewise, if the financial instrument being hedged by the derivative (either as a qualifying fair value hedge or as an economic hedge) is called or paid off prior to contractual maturity, we could potentially call or terminate the corresponding derivative prior to the termination date.

Table 42

09/30/2021
Year	Pay Side				Receive Side
	Cleared		Bilateral		Cleared		Bilateral
2021	$	1,000,000	$	—	$	53,941	$	—
2022	—		—		95,630		25,000
Prior to June 30, 2023	—		—		305,148		—
Thereafter	—		25,000		890,643		3,710,858
TOTAL	$	1,000,000	$	25,000	$	1,345,362	$	3,735,858

Table 43 presents the par value of variable rate consolidated obligation bonds by the related interest rate index as of September 30, 2021 (dollar amounts in thousands). The contractual maturities of the LIBOR-indexed consolidated obligation bonds are all due by the end of 2021; thus, we have no LIBOR exposure after 2021.

Table 43

09/30/2021
Index	Amount		Percent
SOFR	$	14,277,000	95.0	%
LIBOR	750,000		5.0
TOTAL	$	15,027,000	100.0	%

Recently Issued Accounting Standards

See Note 2 of the Notes to Financial Statements under Part I, Item 1 – "Financial Statements" for a discussion of recently issued accounting standards.

84

Legislative and Regulatory Developments

FHLBank Membership. On September 9, 2021, the FHFA published a Supervisory Letter on FHLBank Membership Issues covering five issues, including: (1) Requirements for De Novo Community Development Financial Institutions, (2) Automatic Transfer of Membership, (3) Large Non-Member Institution Merging with a Small Member, (4) Applicant’s Compliance with “Financial Condition” Requirement, and (5) Definition of Insurance Company. The Supervisory Letter is intended to provide uniform guidance to the FHLBanks in the event they encounter similar circumstances. We continue to evaluate the Supervisory Letter and its effect on our membership.

Regulatory Interpretation on Eligibility of Mortgage Participations as Collateral for FHLBank Advances. On October 4, 2021, the FHFA published a Regulatory Interpretation on Eligibility of Mortgage Loan Participations as Collateral for Federal Home Loan Bank Advances. The Regulatory Interpretation addresses whether an FHLBank can accept as collateral to secure advances mortgage loan participations that cannot be readily liquidated in the form in which they are to be pledged. The Regulatory Interpretation concludes that mortgage loan participations must meet the requirements of FHFA regulation 12 CFR 1266.7(a)(4), including the requirement that the collateral can be “liquidated in due course” in order to be eligible to secure FHLBank advances. It further concludes that participations for which there would be a known impediment to liquidation do not meet such requirement and therefore are not eligible collateral for advances. Finally, the Regulatory Interpretation rescinds prior guidance from FHLBank System regulators that provides mortgage loan participations may be eligible as collateral under regulatory provisions other than 12 CFR 1266.7(a)(4). The Regulatory Interpretation becomes effective on December 13, 2021.

Although we do not currently expect the Regulatory Interpretation to have a material impact on our financial condition or results of operations, this restriction on collateral may negatively impact future borrowing by certain members.

Fair Housing and Fair Lending Enforcement. On July 9, 2021, the FHFA published a Policy Statement on Fair Lending to communicate the FHFA’s general position on monitoring and information gathering, supervisory examinations, and administrative enforcement related to the Equal Credit Opportunity Act, the Fair Housing Act, and the Federal Housing Enterprises Financial Safety and Soundness Act. The Policy Statement became effective on the date of publication.

On August 12, 2021, the FHFA and the U.S. Department of Housing and Urban Development announced they had entered into a Memorandum of Understanding regarding fair housing and fair lending enforcement. Under the Memorandum of Understanding, the two agencies will focus on enhancing their enforcement of the Fair Housing Act, and their oversight of Fannie Mae, Freddie Mac, and the FHLBanks.

We continue to monitor these actions and guidance as they evolve and to evaluate their potential impact on us.

COVID-19 Presidential, Legislative and Regulatory Developments. In light of the COVID-19 pandemic, the former and current Presidents of the United States, through executive orders, governmental agencies, including the SEC, the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Commodity Futures Trading Commission and the FHFA, as well as state governments and agencies, have taken, and may continue to take, actions to provide various forms of relief from, and guidance regarding, the financial, operational, credit, market, and other effects of the COVID-19 pandemic, and Congress has enacted, and may continue to enact, COVID-19 pandemic relief legislation, some of which may have a direct or indirect impact on us or our members. Many of these actions are temporary in nature. We continue to monitor these actions and guidance as they evolve and to evaluate their potential impact on us.

U.S. Treasury and Fannie Mae Preferred Stock Purchase Agreement. On January 14, 2021, the U.S. Treasury and Fannie Mae entered into a letter agreement amending the terms of their Preferred Stock Purchase Agreement, which could impact PFIs that participate in the MPF Program’s MPF Xtra product (where MPF loans acquired are concurrently sold to Fannie Mae). Under the Preferred Stock Purchase Agreement, the U.S. Treasury provides liquidity to Fannie Mae in exchange for senior preferred stock. Under the Preferred Stock Purchase Agreement amendment, which was to take effect January 1, 2022, the FHFA (acting as conservator for Fannie Mae) and the U.S. Treasury agreed to limit the dollar volume of loans Fannie Mae could purchase from a single seller through Fannie Mae’s cash window to $1.5 billion per year. As administrator of the MPF Program, the FHLBank of Chicago purchases MPF Xtra loans from PFIs and sells them to Fannie Mae via the cash window process. Based on volumes for the MPF Xtra product program, the Preferred Stock Purchase Agreement amendment would significantly curtail MPF Xtra cash window sales. On September 14, 2021, the FHFA and the U.S. Treasury temporarily suspended certain provisions of the Preferred Stock Purchase Agreement, including limits on Fannie Mae’s cash window limits, until at least September 14, 2022.

Although we do not currently expect the cash window limits to have a material impact on our financial condition or results of operations, they may negatively impact the volume of loans that PFIs are able to sell through the MPF Program.

Affordable Housing. As part of the Congressional budget reconciliation process, a legislative proposal is under consideration that would require the FHLBanks to increase the percentage of their annual earnings devoted to their affordable housing programs that is currently required by law. The FHLBanks continue to actively monitor the proposal.

85

Item 3: Quantitative and Qualitative Disclosures About Market Risk

We measure interest rate risk exposure by various methods, including the calculation of duration of equity (DOE) and market value of equity (MVE) in different interest rate scenarios. We manage DOE and MVE within limits approved by the board of directors as described under Part II, Item 7A - "Quantitative and Qualitative Disclosures About Market Risk" in the annual report on Form 10-K, incorporated by reference herein

Duration of Equity

DOE measures the price sensitivity of our financial assets and liabilities to changes in interest rates. Higher DOE numbers, whether positive or negative, indicate greater volatility of MVE in response to changing interest rates.

While our DOE is generally limited by policy to a range of ±5.0 in the base case, we typically manage our DOE in the base scenario to remain in the range of ±2.5, assuming an instantaneous parallel increase or decrease in market rates of 200 basis points. All DOE measurements were in compliance with board of director established policy limits and operating ranges as of September 30, 2021 with the exception of the base case DOE. On an ongoing basis, we actively monitor portfolio relationships and overall DOE dynamics as a part of our evaluation processes for determining acceptable future asset/liability management actions. This evaluation included review of the base case DOE result exceeding the operating range of ±2.5.

This lower operating range for DOE is considered prudent and reasonable by management and the board of directors and can change depending upon market conditions and other factors. However, when DOE exceeds either the limits established by the RMP or the more narrowly defined ranges to which we manage DOE, corrective actions taken may include: (1) the purchase of interest rate caps, interest rate floors or other derivatives; (2) the sale of assets or calling of debt; and/or (3) the addition to the balance sheet of assets or liabilities having characteristics that allow for the management of the duration profile. Because of the current unprecedented, historically low interest rate environment, we regularly evaluate balance sheet composition along with strategic alternatives to manage the duration position that may include: (1) take asset/liability actions to bring the DOE back within the ranges established in our RMP; or (2) review and discuss potential asset/liability management actions with the board of directors at the next regularly scheduled meeting that could bring the DOE back within the ranges established in the RMP and ascertain a course of action, which can include a determination that no asset/liability management actions are necessary. A determination that no asset/liability management actions are necessary can be made only if the board of directors agrees with management’s recommendations. No additional asset/liability management actions have been taken by management at this time for the more negative, or liability sensitive, DOE in the base case given the DOE results in the up and down 200 basis point shock scenarios are well within our operating ranges as of September 30, 2021.

Table 46 presents the DOE in the base case and the up and down 200 basis point interest rate shock scenarios as of the periods noted:

Table 46

Duration of Equity
Date	Up 200 Basis Points	Base	Down 200 Basis Points
09/30/2021	0.4	-2.7	1.5
06/30/2021	-0.1	-2.4	1.2
03/31/2021	-0.4	-4.0	1.7
12/31/2020	-1.3	-1.2	0.5
09/30/2020	-0.9	1.1	0.4

86

The absolute value of the DOE of the portfolio as of September 30, 2021 increased in all scenarios from June 30, 2021. The primary factors contributing to these changes in duration during the period were: (1) the increase in intermediate-term interest rates and the relative level of mortgage prices and rates during the period; (2) the decrease in the weighting of the mortgage loan portfolio and the unswapped callable consolidated obligation bond portfolio as a percent of the overall balance sheet during the period; and (3) asset/liability actions taken by management throughout the period, including the continued issuance of long-term, unswapped callable consolidated obligation bonds with relatively short lock-out periods, and the continued issuance of discount notes and short-term variable rate consolidated obligations to fund changes in advance balances. The increase in intermediate-term interest rates during the period caused the mortgage loan portfolio duration to lengthen less than the associated liabilities, contributing to the increased liability sensitive DOE profile in the base case scenario, while the mortgage loan portfolio generally has a longer duration profile in the interest rate shock scenarios contributing to an asset sensitive DOE in the up 200 basis point shock scenario and a more asset sensitive DOE profile in the down 200 basis point shock scenario. This sensitivity, or convexity, is further described under Part II, Item 7A – "Quantitative and Qualitative Disclosures About Market Risk" in the annual report on Form 10-K for the year ended December 31, 2020.

Market Value of Equity

MVE is the net value of our assets and liabilities. Estimating sensitivity of MVE to changes in interest rates is another measure of interest rate risk. The RMP measures our market value risk in terms of the MVE in relation to total regulatory capital stock outstanding (TRCS). TRCS includes all capital stock outstanding, including stock subject to mandatory redemption. As a cooperative, we believe using the TRCS results is an appropriate measure because it reflects our market value relative to the book value of our capital stock. Our RMP stipulates MVE shall not be less than: (1) 100 percent of TRCS under the base case scenario; or (2) 90 percent of TRCS under a ±200 basis point instantaneous parallel shock in interest rates. Table 47 presents MVE as a percent of TRCS. As of September 30, 2021, all scenarios are well above the specified limits and much of the relative level in the ratios during the periods covered by the table can be attributed to the relative level of the fixed rate mortgage loan and associated funding portfolio market values as interest rates have continued to remain at historically low levels along with the relative level of outstanding capital.

The MVE to TRCS ratios can be greatly impacted by the level of capital outstanding based on our capital management approach. The relative level of advance balances, required stock (including the new activity-based capital stock requirement for mortgage loan and letters of credit balances) and excess stock as of September 30, 2021 (see Table 37 under Part I, Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources - Capital”) contributed to the MVE levels as of September 30, 2021. These relationships primarily generate the changes in the MVE/TRCS levels and produce the changes in the ratios in all interest rate scenarios in the table below.

Table 47

Market Value of Equity as a Percent of Total Regulatory Capital Stock
Date	Up 200 Basis Points	Base	Down 200 Basis Points
09/30/2021	209	201	206
06/30/2021	201	192	196
03/31/2021	205	194	191
12/31/2020	201	183	189
09/30/2020	186	177	182

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Detail of Derivative Instruments by Type of Instrument by Type of Risk

Various types of derivative instruments are utilized to mitigate the interest rate risks described in the preceding sections as well as to better match the terms of assets and liabilities. Tables 48 and 49 present the notional amount and fair value amount (fair value includes net accrued interest receivable or payable on the derivative) for derivative instruments by hedged item, hedging instrument, hedging objective and accounting designation (in thousands):

Table 48

09/30/2021
Hedged Item	Hedging Instrument	Hedging Objective	Accounting Designation	Notional Amount		Fair Value Amount
Advances
Fixed rate non-callable advances	Pay fixed, receive variable interest rate swap	Convert the advance’s fixed rate to a variable rate index	Fair Value Hedge	$	4,599,876	$	(15,156)
Fixed rate convertible advances	Pay fixed, receive variable interest rate swap	Convert the advance’s fixed rate to a variable rate index and offset option risk in the advance	Fair Value Hedge	1,497,150		(56,900)
Firm commitment to issue a fixed rate advance	Forward settling interest rate swap	Protect against fair value risk	Economic Hedge	2,490		(3)
Fixed rate non-callable advances	Pay fixed, receive variable interest rate swap	Convert the advance’s fixed rate to a variable rate index	Economic Hedge	42,716		(1,311)
Firm commitment to issue a fixed rate advance	Forward settling interest rate swap	Protect against fair value risk	Fair Value Hedge	18,316		208
Investments
Fixed rate non-MBS available-for-sale investments	Pay fixed, receive variable interest rate swap	Convert the investment’s fixed rate to a variable rate index	Fair Value Hedge	2,700,000		(1,248)
Fixed rate MBS available-for-sale investments	Pay fixed, receive variable interest rate swap	Convert the investment’s fixed rate to a variable rate index	Fair Value Hedge	2,797,999		(88,408)
Fixed rate non-MBS trading investments	Pay fixed, receive variable interest rate swap	Convert the investment’s fixed rate to a variable rate index	Economic Hedge	1,548,500		(595)
Fixed rate MBS trading investments	Pay fixed, receive variable interest rate swap	Convert the investment’s fixed rate to a variable rate index	Economic Hedge	743,659		(39,921)
Adjustable rate MBS with embedded caps	Interest rate cap	Offset the interest rate cap embedded in a variable rate investment	Economic Hedge	477,500		321
Mortgage Loans Held for Portfolio
Fixed rate mortgage purchase commitments	Mortgage purchase commitment	Protect against fair value risk	Economic Hedge	162,060		(1,000)
Consolidated Obligation Bonds
Fixed rate non-callable consolidated obligation bonds	Receive fixed, pay variable interest rate swap	Convert the bond’s fixed rate to a variable rate index	Fair Value Hedge	4,065,000		14,548
Fixed rate callable consolidated obligation bonds	Receive fixed, pay variable interest rate swap	Convert the bond’s fixed rate to a variable rate index and offset option risk in the bond	Fair Value Hedge	2,016,000		(8,355)
Callable step-up/step-down consolidated obligation bonds	Receive variable interest rate with embedded features, pay variable interest rate swap	Reduce interest rate sensitivity and repricing gaps by converting the bond’s variable rate to a different variable rate index and/or to offset embedded options risk in the bond	Fair Value Hedge	600,000		(4,856)
TOTAL				$	21,271,266	$	(202,676)

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Table 49

12/31/2020
Hedged Item	Hedging Instrument	Hedging Objective	Accounting Designation	Notional Amount		Fair Value Amount
Advances
Fixed rate non-callable advances	Pay fixed, receive variable interest rate swap	Convert the advance’s fixed rate to a variable rate index	Fair Value Hedge	$	3,922,227	$	(10,550)
Fixed rate convertible advances	Pay fixed, receive variable interest rate swap	Convert the advance’s fixed rate to a variable rate index and offset option risk in the advance	Fair Value Hedge	1,656,550		(108,780)
Fixed rate non-callable advances	Pay fixed, receive variable interest rate swap	Convert the advance’s fixed rate to a variable rate index	Economic Hedge	37,171		(1,866)
Firm commitment to issue a fixed rate advance	Forward settling interest rate swap	Protect against fair value risk	Fair Value Hedge	19,915		57
Firm commitment to issue a fixed rate advance	Forward settling interest rate swap	Protect against fair value risk	Economic Hedge	9,285		(403)
Investments
Fixed rate non-MBS available-for-sale investments	Pay fixed, receive variable interest rate swap	Convert the investment’s fixed rate to a variable rate index	Fair Value Hedge	3,450,000		(321)
Fixed rate MBS available-for-sale investments	Pay fixed, receive variable interest rate swap	Convert the investment’s fixed rate to a variable rate index	Fair Value Hedge	2,885,402		(141,371)
Fixed rate non-MBS trading investments	Pay fixed, receive variable interest rate swap	Convert the investment’s fixed rate to a variable rate index	Economic Hedge	1,648,500		(63)
Fixed rate MBS trading investments	Pay fixed, receive variable interest rate swap	Convert the investment’s fixed rate to a variable rate index	Economic Hedge	781,703		(65,771)
Adjustable rate MBS with embedded caps	Interest rate cap	Offset the interest rate cap embedded in a variable rate investment	Economic Hedge	602,500		141
Mortgage Loans Held for Portfolio
Fixed rate mortgage purchase commitments	Mortgage purchase commitment	Protect against fair value risk	Economic Hedge	133,456		650
Consolidated Obligation Discount Notes
Fixed rate non-callable consolidated obligation discount notes with tenors of 6 to 12 months	Receive fixed, pay variable interest rate swap	Convert the discount note's fixed rate to a variable rate	Fair Value Hedge	174,613		1
Consolidated Obligation Bonds
Fixed rate non-callable consolidated obligation bonds	Receive fixed, pay variable interest rate swap	Convert the bond’s fixed rate to a variable rate index	Fair Value Hedge	3,253,500		17,952
Fixed rate callable consolidated obligation bonds	Receive fixed, pay variable interest rate swap	Convert the bond’s fixed rate to a variable rate index and offset option risk in the bond	Fair Value Hedge	500,000		8
TOTAL				$	19,074,822	$	(310,316)

89

Item 4: Controls and Procedures

Disclosure Controls and Procedures

Senior management is responsible for establishing and maintaining a system of disclosure controls and procedures designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide a reasonable level of assurance in achieving their desired objectives; however, in designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Management, with the participation of the President and Chief Executive Officer (CEO), our principal executive officer, and the Chief Financial Officer (CFO), our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of September 30, 2021. Based upon that evaluation, the CEO and CFO have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2021.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1: Legal Proceedings

We are subject to various pending legal proceedings arising in the normal course of business. After consultation with legal counsel, management does not anticipate that the ultimate liability, if any, arising out of these matters will have a material adverse effect on our financial condition or results of operations. Additionally, management does not believe that we are subject to any material pending legal proceedings outside of ordinary litigation incidental to our business.

Item 1A: Risk Factors

There have been no material changes to the risk factors previously disclosed in our annual report on Form 10-K filed on March 18, 2021, and such risk factors are incorporated by reference herein.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3: Defaults Upon Senior Securities

Not applicable.

Item 4: Mine Safety Disclosures

Not applicable.

Item 5: Other Information

None.

90

Item 6: Exhibits

Exhibit No.	Description
3.1	Exhibit 3.1 to the FHLBank’s registration statement on Form 10, filed May 15, 2006, and made effective on July 14, 2006 (File No. 000-52004), Federal Home Loan Bank of Topeka Articles and Organization Certificate, is incorporated herein by reference as Exhibit 3.1.
3.2	Exhibit 3.1 to the Current Report on Form 8-K, filed September 24, 2021, Federal Home Loan Bank of Topeka Amended and Restated Bylaws, is incorporated herein by reference as Exhibit 3.2.
4.1	Exhibit 4.1 to the Annual Report on Form 10-K, filed March 20, 2020, Federal Home Loan Bank of Topeka Capital Plan.
31.1	Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of President and Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*     Represents a management contract or a compensatory plan or arrangement.

91

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Federal Home Loan Bank of Topeka
November 10, 2021	By: /s/ Mark E. Yardley
Date	Mark E. Yardley
	President and Chief Executive Officer

92

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

     I, Mark E. Yardley, President and Chief Executive Officer of Federal Home Loan Bank of Topeka (the “registrant”), certify that:

1.I have reviewed this quarterly report on Form 10-Q of the registrant;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 10, 2021

By: /s/ Mark E. Yardley

Mark E. Yardley

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

     I, Jeffrey B. Kuzbel, Senior Vice President and Chief Financial Officer of Federal Home Loan Bank of Topeka (the “registrant”), certify that:

1.I have reviewed this quarterly report on Form 10-Q of the registrant;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 10, 2021

By: /s/ Jeffrey B. Kuzbel

Jeffrey B. Kuzbel

Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of the Federal Home Loan Bank of Topeka (the “Bank”) for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Mark E. Yardley, as Chief Executive Officer, and Jeffrey B. Kuzbel, as Chief Financial Officer of the Bank, each hereby certifies, pursuant to 18 U.S.C. Section 1350, that, to the best of his/her knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Bank.

November 10, 2021	By: /s/ Mark E. Yardley
Date	Mark E. Yardley
	President and Chief Executive Officer
November 10, 2021	By: /s/ Jeffrey B. Kuzbel
Date	Jeffrey B. Kuzbel
	Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Bank and will be retained by the Bank and furnished to the Securities and Exchange Commission or its staff upon request.

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Oct. 31, 2021
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	000-52004
Entity Registrant Name	FEDERAL HOME LOAN BANK OF TOPEKA
Entity Incorporation, State or Country Code	X1
Entity Tax Identification Number	48-0561319
Entity Address, Address Line One	500 SW Wanamaker Road
Entity Address, City or Town	Topeka
Entity Address, State or Province	KS
Entity Address, Postal Zip Code	66606
City Area Code	785
Local Phone Number	233.0507
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001325878
Current Fiscal Year End Date	--12-31
Class A [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		2,574,844
Class B [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		11,800,709

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Statements Of Condition - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
ASSETS
Cash and due from banks		$ 29,740	$ 4,570,415
Interest-bearing deposits		569,222	760,297
Securities purchased under agreements to resell (Note 9)		2,100,000	2,600,000
Federal funds sold		1,958,000	1,780,000
Investment securities:
Trading securities (Note 3)		2,622,397	2,623,376
Available-for-sale securities, amortized cost of $7,702,388 and $6,696,114 (Note 3)		7,776,188	6,741,310
Held-to-maturity securities, fair value of $437,848 and $2,750,116 (Note 3)		433,286	2,746,992
Total investment securities		10,831,871	12,111,678
Advances (Note 4)		21,411,103	21,226,823
Mortgage loans held for portfolio, net of allowance for credit losses of $6,324 and $5,177 (Note 6)		8,315,791	9,205,207
Accrued interest receivable		83,013	97,718
Derivative assets, net (Notes 6, 9)		134,679	148,868
Other assets		82,804	90,706
TOTAL ASSETS		45,516,223	52,591,712
LIABILITIES
Deposits (Note 7)		1,033,557	1,229,361
Consolidated obligations, net:
Discount notes (Note 8)		10,277,237	10,882,417
Bonds (Note 8)		31,477,780	37,648,077
Total consolidated obligations, net		41,755,017	48,530,494
Mandatorily redeemable capital stock (Note 10)		607	1,624
Accrued interest payable		38,036	45,575
Affordable Housing Program payable		40,188	41,129
Derivative liabilities, net (Notes 6, 9)		7,845	4,404
Other liabilities		69,777	71,358
TOTAL LIABILITIES		42,945,027	49,923,945
Commitments and contingencies (Note 13)
Capital stock outstanding - putable:
Total capital stock (Note 10)	[1]	1,382,482	1,574,004
Retained earnings:
Unrestricted		836,586	793,331
Restricted		280,974	258,124
Total retained earnings		1,117,560	1,051,455
Accumulated other comprehensive income (loss) (Note 11)		71,154	42,308
TOTAL CAPITAL		2,571,196	2,667,767
TOTAL LIABILITIES AND CAPITAL		45,516,223	52,591,712
Class A [Member]
Capital stock outstanding - putable:
Total capital stock (Note 10)	[1]	221,824	412,225
Class B [Member]
Capital stock outstanding - putable:
Total capital stock (Note 10)	[1]	$ 1,160,658	$ 1,161,779

[1] Putable

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Statements Of Condition (Parenthetical) - USD ($) shares in Thousands, $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
ASSETS
Allowance for credit losses on mortgage loans		$ 6,324	$ 5,177
Investment securities:
Available-for-sale, amortized cost		7,702,388	6,696,114
Held-to-maturity, Fair Value		$ 437,848	$ 2,750,116
Capital stock outstanding - putable:
Common Stock, par value per share		$ 100
Class A [Member]
Capital stock outstanding - putable:
Common Stock, par value per share	[1]	$ 100	$ 100
Common Stock, Shares, Issued	[1]	2,218	4,122
Common Stock, Shares Outstanding	[1]	2,218	4,122
Class B [Member]
Capital stock outstanding - putable:
Common Stock, par value per share	[1]	$ 100	$ 100
Common Stock, Shares, Issued	[1]	11,607	11,618
Common Stock, Shares Outstanding	[1]	11,607	11,618

[1] Putable

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Statements Of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
INTEREST INCOME:
Interest-bearing deposits	$ 230	$ 471	$ 714	$ 5,736
Securities purchased under agreements to resell	460	1,378	1,350	16,906
Federal funds sold	567	575	1,547	4,517
Trading securities	16,122	18,099	48,990	56,371
Available-for-sale securities	10,701	9,588	29,589	43,753
Held-to-maturity securities	996	4,540	6,781	29,024
Advances	29,925	38,848	95,677	230,000
Mortgage loans held for portfolio	53,438	64,192	158,359	222,962
Other	228	286	727	940
Total interest income	112,667	137,977	343,734	610,209
INTEREST EXPENSE:
Deposits	101	76	312	1,707
Consolidated obligations:
Discount notes	1,326	5,674	4,393	120,385
Bonds	37,729	67,142	124,395	310,628
Mandatorily redeemable capital stock	1	12	19	50
Other	250	285	756	888
Total interest expense	39,407	73,189	129,875	433,658
NET INTEREST INCOME	73,260	64,788	213,859	176,551
Provision (reversal) for credit losses on mortgage loans	(1,660)	116	638	717
NET INTEREST INCOME AFTER LOAN LOSS PROVISION (REVERSAL)	74,920	64,672	213,221	175,834
OTHER INCOME (LOSS):
Net gains (losses) on trading securities	(16,369)	(6,995)	(56,527)	92,769
Net gains (losses) on sale of available-for-sale securities	0	0	0	1,523
Net gains (losses) on derivatives	(1,396)	2,026	16,170	(135,581)
Standby bond purchase agreement commitment fees	627	560	1,878	1,660
Letters of credit fees	1,429	1,663	4,700	4,705
Other	951	1,112	2,983	(191)
Total other income (loss)	(14,758)	(1,634)	(30,796)	(35,115)
OTHER EXPENSES:
Compensation and benefits	9,429	10,014	29,180	29,533
Other operating	5,144	4,365	14,190	13,840
Federal Housing Finance Agency	1,110	1,023	3,329	3,068
Office of Finance	1,161	1,036	3,255	2,889
Mortgage loans transaction service fees	1,583	1,946	4,832	6,029
Other	201	226	692	5,290
Total other expenses	18,628	18,610	55,478	60,649
INCOME BEFORE ASSESSMENTS	41,534	44,428	126,947	80,070
Affordable Housing Program	4,154	4,444	12,697	8,012
NET INCOME	$ 37,380	$ 39,984	$ 114,250	$ 72,058

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Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Net income	$ 37,380	$ 39,984	$ 114,250	$ 72,058
Other comprehensive income (loss):
Net unrealized gains (losses) on available-for-sale securities	(22,482)	30,295	28,604	(28,239)
Defined benefit pension plan	92	28	242	82
Total other comprehensive income (loss)	(22,390)	30,323	28,846	(28,157)
TOTAL COMPREHENSIVE INCOME (LOSS)	$ 14,990	$ 70,307	$ 143,096	$ 43,901

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Statements Of Capital - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period		$ 2,646,571	$ 2,354,938	$ 2,667,767	$ 2,791,051
Comprehensive income		14,990	70,307	143,096	43,901
Proceeds from issuance of capital stock		355,571	821,042	1,175,731	1,372,381
Repurchase/redemption of capital stock		(445,414)	(25,724)	(830,695)	(84,358)
Net reclassification of shares to mandatorily redeemable capital stock		(460)	(620,561)	(584,512)	(1,527,252)
Net transfer of shares between Class A and Class B		0	0	0	0
Partial recovery of prior capital distribution to Financing Corporation				0	10,543
Dividends on capital stock
Cash payment		(62)	(66)	(191)	(207)
Stock issued		0	0	0	0
Balance at the end of the period		$ 2,571,196	$ 2,599,936	$ 2,571,196	$ 2,599,936
Capital Stock [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares, beginning balance	[1]	14,567	13,920	15,740	17,664
Balance at the beginning of the period	[1]	$ 1,456,736	$ 1,392,003	$ 1,574,004	$ 1,766,456
Proceeds from issuance of capital stock, shares	[1]	3,555	8,210	11,757	13,723
Proceeds from issuance of capital stock	[1]	$ 355,571	$ 821,042	$ 1,175,731	$ 1,372,381
Repurchase/redemption of capital stock, shares	[1]	(4,454)	(257)	(8,307)	(843)
Repurchase/redemption of capital stock	[1]	$ (445,414)	$ (25,724)	$ (830,695)	$ (84,358)
Net reclassification of shares to mandatorily redeemable capital stock, shares	[1]	(4)	(6,206)	(5,845)	(15,272)
Net reclassification of shares to mandatorily redeemable capital stock	[1]	$ (460)	$ (620,561)	$ (584,512)	$ (1,527,252)
Net transfer of shares between Class A and Class B, shares	[1]	0	0	0	0
Net transfer of shares between Class A and Class B	[1]	$ 0	$ 0	$ 0	$ 0
Dividends on capital stock
Stock issued, shares	[1]	161	140	480	535
Stock issued	[1]	$ 16,049	$ 13,981	$ 47,954	$ 53,514
Shares, ending balance	[1]	13,825	15,807	13,825	15,807
Balance at the end of the period	[1]	$ 1,382,482	$ 1,580,741	$ 1,382,482	$ 1,580,741
Total Retained Earnings [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period		1,096,291	996,629	1,051,455	999,809
Comprehensive income		37,380	39,984	114,250	72,058
Partial recovery of prior capital distribution to Financing Corporation					10,543
Dividends on capital stock
Cash payment		(62)	(66)	(191)	(207)
Stock issued		(16,049)	(13,981)	(47,954)	(53,514)
Balance at the end of the period		1,117,560	1,022,566	1,117,560	1,022,566
Unrestricted Retained Earnings [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period		822,793	755,700	793,331	765,295
Comprehensive income		29,904	31,987	91,400	57,646
Partial recovery of prior capital distribution to Financing Corporation					10,543
Dividends on capital stock
Cash payment		(62)	(66)	(191)	(207)
Stock issued		(16,049)	(13,981)	(47,954)	(53,514)
Balance at the end of the period		836,586	773,640	836,586	773,640
Restricted Retained Earnings [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period		273,498	240,929	258,124	234,514
Comprehensive income		7,476	7,997	22,850	14,412
Partial recovery of prior capital distribution to Financing Corporation					0
Dividends on capital stock
Balance at the end of the period		280,974	248,926	280,974	248,926
Accumulated Other Comprehensive Income (Loss) [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period		93,544	(33,694)	42,308	24,786
Comprehensive income		(22,390)	30,323	28,846	(28,157)
Dividends on capital stock
Balance at the end of the period		$ 71,154	$ (3,371)	$ 71,154	(3,371)
Adjustment for cumulative effect of accounting change , Period of Adoption [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period					(6,123)
Adjustment for cumulative effect of accounting change , Period of Adoption [Member] | Total Retained Earnings [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period					(6,123)
Adjustment for cumulative effect of accounting change , Period of Adoption [Member] | Unrestricted Retained Earnings [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period					(6,123)
Adjustment for cumulative effect of accounting change , Period of Adoption [Member] | Restricted Retained Earnings [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at the beginning of the period					$ 0
Class A [Member] | Capital Stock [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares, beginning balance	[1]	3,279	5,007	4,122	4,476
Balance at the beginning of the period	[1]	$ 327,885	$ 500,679	$ 412,225	$ 447,610
Proceeds from issuance of capital stock, shares	[1]	0	2	35	10
Proceeds from issuance of capital stock	[1]	$ 21	$ 222	$ 3,492	$ 1,035
Repurchase/redemption of capital stock, shares	[1]	(3,785)	0	(7,323)	0
Repurchase/redemption of capital stock	[1]	$ (378,548)	$ 0	$ (732,322)	$ 0
Net reclassification of shares to mandatorily redeemable capital stock, shares	[1]	(1)	(1,987)	(4,661)	(8,608)
Net reclassification of shares to mandatorily redeemable capital stock	[1]	$ (109)	$ (198,626)	$ (466,079)	$ (860,766)
Net transfer of shares between Class A and Class B, shares	[1]	2,725	850	10,045	7,994
Net transfer of shares between Class A and Class B	[1]	$ 272,575	$ 84,932	$ 1,004,508	$ 799,328
Dividends on capital stock
Shares, ending balance	[1]	2,218	3,872	2,218	3,872
Balance at the end of the period	[1]	$ 221,824	$ 387,207	$ 221,824	$ 387,207
Common Stock, Dividend Rate, Percentage		0.30%	0.30%	0.30%	0.90%
Class B [Member] | Capital Stock [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares, beginning balance	[1]	11,288	8,913	11,618	13,188
Balance at the beginning of the period	[1]	$ 1,128,851	$ 891,324	$ 1,161,779	$ 1,318,846
Proceeds from issuance of capital stock, shares	[1]	3,555	8,208	11,722	13,713
Proceeds from issuance of capital stock	[1]	$ 355,550	$ 820,820	$ 1,172,239	$ 1,371,346
Repurchase/redemption of capital stock, shares	[1]	(669)	(257)	(984)	(843)
Repurchase/redemption of capital stock	[1]	$ (66,866)	$ (25,724)	$ (98,373)	$ (84,358)
Net reclassification of shares to mandatorily redeemable capital stock, shares	[1]	(3)	(4,219)	(1,184)	(6,664)
Net reclassification of shares to mandatorily redeemable capital stock	[1]	$ (351)	$ (421,935)	$ (118,433)	$ (666,486)
Net transfer of shares between Class A and Class B, shares	[1]	(2,725)	(850)	(10,045)	(7,994)
Net transfer of shares between Class A and Class B	[1]	$ (272,575)	$ (84,932)	$ (1,004,508)	$ (799,328)
Dividends on capital stock
Stock issued, shares	[1]	161	140	480	535
Stock issued	[1]	$ 16,049	$ 13,981	$ 47,954	$ 53,514
Shares, ending balance	[1]	11,607	11,935	11,607	11,935
Balance at the end of the period	[1]	$ 1,160,658	$ 1,193,534	$ 1,160,658	$ 1,193,534
Common Stock, Dividend Rate, Percentage		5.30%	5.20%	5.30%	6.10%

[1] Putable

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Statements Of Capital (Parenthetical) - Capital Stock [Member]	3 Months Ended		9 Months Ended
	Sep. 30, 2021 Rate	Sep. 30, 2020 Rate	Sep. 30, 2021 Rate	Sep. 30, 2020 Rate
Class A [Member]
Stock dividend rate percentage	0.30%	0.30%	0.30%	0.90%
Class B [Member]
Stock dividend rate percentage	5.30%	5.20%	5.30%	6.10%

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Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 114,250	$ 72,058
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Premiums and discounts on consolidated obligations, net	(12,044)	(50,162)
Concessions on consolidated obligations	4,794	24,029
Premiums and discounts on investments, net	12,138	14,556
Premiums, discounts and commitment fees on advances, net	(4,055)	(3,385)
Premiums, discounts and deferred loan costs on mortgage loans, net	41,102	47,349
Fair value adjustments on hedged assets or liabilities	3,296	3,568
Premises, software and equipment	2,466	2,498
Other	242	82
Provision (reversal) for credit losses on mortgage loans	638	717
Non-cash interest on mandatorily redeemable capital stock	18	49
Net realized (gains) losses on sale of available-for-sale securities	0	(1,523)
Net realized (gains) losses on disposal of premises, software and equipment	0	3,471
Other adjustments, net	(312)	4,366
Net (gains) losses on trading securities	56,527	(92,769)
Net change in derivatives and hedging activities	186,782	(288,215)
(Increase) decrease in accrued interest receivable	15,242	36,037
Change in net accrued interest included in derivative assets	(9,707)	30,973
(Increase) decrease in other assets	2,024	1,407
Increase (decrease) in accrued interest payable	(8,064)	(63,193)
Change in net accrued interest included in derivative liabilities	(2,848)	(117)
Increase (decrease) in Affordable Housing Program liability	(941)	(3,677)
Increase (decrease) in other liabilities	(1,469)	(1,849)
Total adjustments	285,829	(335,788)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	400,079	(263,730)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in interest-bearing deposits	316,633	145,874
Net (increase) decrease in securities purchased under resale agreements	500,000	150,000
Net (increase) decrease in Federal funds sold	(178,000)	(585,000)
Proceeds from sale of trading securities	0	275,186
Proceeds from maturities of and principal repayments on trading securities	1,644,453	337,209
Purchases of trading securities	(1,700,000)	(825,000)
Proceeds from sale of available-for-sale securities	0	289,045
Proceeds from maturities of and principal repayments on available-for-sale securities	1,869,039	300,801
Purchases of available-for-sale securities	(1,028,471)	(430,610)
Proceeds from maturities of and principal repayments on held-to-maturity securities	298,161	594,829
Advances repaid	351,412,211	252,632,071
Advances originated	(351,732,390)	(244,759,865)
Principal collected on mortgage loans	2,591,290	2,878,144
Purchases of mortgage loans	(1,746,333)	(2,401,848)
Proceeds from sale of foreclosed assets	1,251	793
Other investing activities	2,653	2,481
Purchases of premises, software and equipment	(1,116)	(568)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	2,249,381	8,603,542
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits	(196,104)	225,977
Net proceeds from issuance of consolidated obligations:
Discount notes	239,623,829	500,327,628
Bonds	28,680,364	34,971,746
Payments for maturing and retired consolidated obligations:
Discount notes	(240,229,128)	(515,803,859)
Bonds	(34,809,900)	(29,717,000)
Proceeds from financing derivatives	0	3,470
Net interest payments received (paid) for financing derivatives	(18,494)	(12,793)
Proceeds from issuance of capital stock	1,175,731	1,372,381
Payments for repurchase/redemption of capital stock	(830,695)	(84,358)
Payments for repurchase of mandatorily redeemable capital stock	(585,547)	(1,527,802)
Cash dividends paid	(191)	(207)
Partial Recovery Of Prior Capital Distribution To Financing Corporation	0	10,543
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(7,190,135)	(10,234,274)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(4,540,675)	(1,894,462)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	4,570,415	1,917,166
CASH AND CASH EQUIVALENTS AT END OF PERIOD	29,740	22,704
Supplemental disclosures:
Interest paid	145,606	523,348
Affordable Housing Program payments	13,978	11,783
Net transfers of mortgage loans to other assets	449	670
Transfer of held-to-maturity securities to available-for-sale securities with the adoption of the reference rate reform guidance	$ 2,019,635	$ 0

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

BASIS OF PRESENTATION

Basis of Presentation: The accompanying interim financial statements of FHLBank are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instruction provided by Article 10, Rule 10-01 of Regulation S-X. The financial statements contain all adjustments which are, in the opinion of management, necessary for a fair statement of FHLBank’s financial position, results of operations and cash flows for the interim periods presented. All such adjustments were of a normal recurring nature. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full fiscal year or any other interim period.

FHLBank’s significant accounting policies and certain other disclosures are set forth in the notes to the audited financial statements for the year ended December 31, 2020. The interim financial statements presented herein should be read in conjunction with FHLBank’s audited financial statements and notes thereto, which are included in FHLBank’s annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 18, 2021 (annual report on Form 10-K). The notes to the interim financial statements highlight significant changes to the notes included in the annual report on Form 10-K.

Use of Estimates: The preparation of financial statements under GAAP requires management to make estimates and assumptions as of the date of the financial statements in determining the reported amounts of assets, liabilities and estimated fair values and in determining the disclosure of any contingent assets or liabilities. Estimates and assumptions by management also affect the reported amounts of income and expense during the reporting period. The most significant of these estimates include the fair value of trading and available-for-sale securities and the fair value of derivatives. Many of the estimates and assumptions, including those used in financial models, are based on financial market conditions as of the date of the financial statements. Because of the volatility of the financial markets, as well as other factors that affect management estimates, actual results may vary from these estimates.

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Recently Issued Accounting Standards And Interpretations And Changes In And Adoptions Of Accounting Principles

9 Months Ended

Sep. 30, 2021

Accounting Standards Update and Change in Accounting Principle [Abstract]

Recently Issued Accounting Standards And Interpretations And Changes In And Adoptions Of Accounting Principles

RECENTLY ISSUED ACCOUNTING STANDARDS AND INTERPRETATIONS AND CHANGES IN AND ADOPTIONS OF ACCOUNTING PRINCIPLES

Reference Rate Reform (Accounting Standards Update (ASU) 2021-01). In January 2021, the Financial Accounting Standards Board (FASB) issued an amendment that refines the scope of Accounting Standards Codification (ASC) 848 and clarifies the guidance issued to facilitate the effects of reference rate reform on financial reporting. The amendment permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements and calculating price alignment interest in connection with reference rate reform activities. During the fourth quarter of 2020, FHLBank elected applicable optional expedients specific to discounting transition on a retrospective basis. As a result of electing this expedient, discounting transition did not have a material effect on FHLBank's financial condition, results of operations, or cash flows. This guidance was effective immediately for FHLBank and was applied consistently with the optional expedient guidance under ASU 2020-04, described below.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). In March 2020, the FASB issued temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The transactions primarily include: (1) contract modifications; (2) hedging relationships; and (3) sale or transfer of debt securities classified as held-to-maturity. During the second quarter of 2021, FHLBank adopted a provision of ASU 2020-04 which allows a one-time election to sell, transfer, or both sell and transfer debt securities classified as held-to-maturity that reference a rate affected by reference rate reform and that were classified as held-to-maturity before January 1, 2020 by transferring LIBOR-indexed securities. See Note 3 – Investments for additional information related to this transfer. This guidance was effective immediately for FHLBank, and the amendments may be applied prospectively through December 31, 2022. FHLBank is in the process of evaluating the guidance and the other optional expedients, and the effect on FHLBank's financial condition, results of operations and cash flows has not yet been determined.

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Investment Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investment Securities

INVESTMENTS

FHLBank's investment portfolio consists of interest-bearing deposits, securities purchased under agreements to resell, Federal funds sold, and debt securities.

Interest-Bearing Deposits, Securities Purchased under Agreements to Resell, and Federal Funds Sold: FHLBank invests in interest-bearing deposits, securities purchased under agreements to resell, and Federal funds sold to provide short-term liquidity. These investments are generally transacted with counterparties that have received a credit rating of triple-B or greater (investment grade) by a Nationally Recognized Statistical Ratings Organization (NRSRO). These may differ from internal ratings of the investments, if applicable. As of September 30, 2021, approximately 32 percent of these overnight investments were with counterparties not rated by an NRSRO. All transactions with unrated counterparties are secured transactions.

Federal funds sold are unsecured loans that are generally transacted on an overnight term. Federal Housing Finance Agency (FHFA) regulations include a limit on the amount of unsecured credit FHLBank may extend to a counterparty. As of September 30, 2021 and December 31, 2020, all investments in interest-bearing deposits and Federal funds sold were repaid or expected to be repaid according to the contractual terms. No allowance for credit losses was recorded for these assets as of September 30, 2021 and December 31, 2020. Carrying values of interest-bearing deposits and Federal funds sold exclude accrued interest receivable of $51,000 and $3,000, respectively, as of September 30, 2021, and $80,000 and $3,000, respectively, as of December 31, 2020.

Securities purchased under agreements to resell are short-term and are structured such that they are evaluated regularly to determine if the market value of the underlying securities decreases below the market value required as collateral (i.e., subject to collateral maintenance provisions). Based upon the collateral held as security and collateral maintenance provisions with its counterparties, FHLBank determined that no allowance for credit losses was needed for its securities purchased under agreements to resell as of September 30, 2021 and December 31, 2020. The carrying value of securities purchased under agreements to resell excludes accrued interest receivable of $5,000 and $6,000 as of September 30, 2021 and December 31, 2020, respectively.

Debt Securities: FHLBank invests in debt securities, which are classified as either trading, available-for-sale, or held-to-maturity. FHLBank is prohibited by FHFA regulations from purchasing certain higher-risk securities, such as equity securities and debt instruments that are not investment quality, other than certain investments targeted at low-income persons or communities and instruments that experienced credit deterioration after their purchase by FHLBank.

FHLBank's debt securities include the following major security types, which are based on the issuer and the risk characteristics of the security:

▪Certificates of deposit - unsecured negotiable promissory notes issued by banks;

▪U.S. Treasury obligations - sovereign debt of the United States;

▪GSE debentures - debentures issued by other FHLBanks, Federal National Mortgage Association (Fannie Mae), Federal Farm Credit Bank and Federal Agricultural Mortgage Corporation. GSE securities are not guaranteed by the U.S. government;

▪State or local housing agency obligations - municipal bonds issued by housing finance agencies;

▪U.S. obligation MBS - single-family MBS issued by Government National Mortgage Association (Ginnie Mae), which are guaranteed by the U.S. government; and

▪GSE MBS - single-family and multifamily MBS issued by Fannie Mae and Federal Home Loan Mortgage Corporation (Freddie Mac).

Trading Securities: Trading securities by major security type as of September 30, 2021 and December 31, 2020 are summarized in Table 3.1 (in thousands):

Table 3.1

	Fair Value
	09/30/2021		12/31/2020
Non-mortgage-backed securities:
Certificates of deposit	$	200,009	$	—
U.S. Treasury obligations	1,176,148		1,298,518
GSE debentures	421,980		431,875
Non-mortgage-backed securities	1,798,137		1,730,393
Mortgage-backed securities:
GSE MBS	824,260		892,983
Mortgage-backed securities	824,260		892,983
TOTAL	$	2,622,397	$	2,623,376

Net gains (losses) on trading securities during the three and nine months ended September 30, 2021 and 2020 are shown in Table 3.2 (in thousands):

Table 3.2

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Net gains (losses) on trading securities held as of September 30, 2021	$	(15,807)	$	(5,226)	$	(51,126)	$	90,202
Net gains (losses) on trading securities sold or matured prior to September 30, 2021	(562)		(1,769)		(5,401)		2,567
NET GAINS (LOSSES) ON TRADING SECURITIES	$	(16,369)	$	(6,995)	$	(56,527)	$	92,769

Available-for-sale Securities: Available-for-sale securities by major security type as of September 30, 2021 are summarized in Table 3.3 (in thousands). Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, and fair value hedge accounting adjustments, and excludes accrued interest receivable of $18,209,000 as of September 30, 2021.

Table 3.3

	09/30/2021
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
U.S. Treasury obligations	$	2,840,450	$	3,220	$	(1,071)	$	2,842,599
Non-mortgage-backed securities	2,840,450		3,220		(1,071)		2,842,599
Mortgage-backed securities:
U.S. obligation MBS	55,083		266		(7)		55,342
GSE MBS	4,806,855		74,196		(2,804)		4,878,247
Mortgage-backed securities	4,861,938		74,462		(2,811)		4,933,589
TOTAL	$	7,702,388	$	77,682	$	(3,882)	$	7,776,188

Available-for-sale securities by major security type as of December 31, 2020 are summarized in Table 3.4 (in thousands). Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, and fair value hedge accounting adjustments, and excludes accrued interest receivable of $26,977,000 as of December 31, 2020.

Table 3.4

	12/31/2020
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
U.S. Treasury obligations	$	3,541,411	$	4,931	$	(17)	$	3,546,325
Non-mortgage-backed securities	3,541,411		4,931		(17)		3,546,325
Mortgage-backed securities:
GSE MBS	3,154,703		44,724		(4,442)		3,194,985
Mortgage-backed securities	3,154,703		44,724		(4,442)		3,194,985
TOTAL	$	6,696,114	$	49,655	$	(4,459)	$	6,741,310

Table 3.5 summarizes the available-for-sale securities with unrealized losses as of September 30, 2021 (in thousands). The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

Table 3.5

	09/30/2021
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Non-mortgage-backed securities:
U.S. Treasury obligations	$	592,578	$	(1,071)	$	—	$	—	$	592,578	$	(1,071)
Non-mortgage-backed securities	592,578		(1,071)		—		—		592,578		(1,071)
Mortgage-backed securities:
U.S. obligation MBS	—		—		6,589		(7)		6,589		(7)
GSE MBS	326,356		(1,071)		820,015		(1,733)		1,146,371		(2,804)
Mortgage-backed securities	326,356		(1,071)		826,604		(1,740)		1,152,960		(2,811)
TOTAL	$	918,934	$	(2,142)	$	826,604	$	(1,740)	$	1,745,538	$	(3,882)

Table 3.6 summarizes the available-for-sale securities with unrealized losses as of December 31, 2020 (in thousands). The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

Table 3.6

	12/31/2020
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Non-mortgage-backed securities:
U.S. Treasury obligations	$	250,436	$	(17)	$	—	$	—	$	250,436	$	(17)
Non-mortgage-backed securities	250,436		(17)		—		—		250,436		(17)
Mortgage-backed securities:
GSE MBS	—		—		363,724		(4,442)		363,724		(4,442)
Mortgage-backed securities	—		—		363,724		(4,442)		363,724		(4,442)
TOTAL	$	250,436	$	(17)	$	363,724	$	(4,442)	$	614,160	$	(4,459)

The amortized cost and fair values of available-for-sale securities by contractual maturity as of September 30, 2021 and December 31, 2020 are shown in Table 3.7 (in thousands). Expected maturities of MBS will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

Table 3.7

	09/30/2021				12/31/2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Non-mortgage-backed securities:
Due in one year or less	$	958,778	$	959,599	$	1,767,608	$	1,768,588
Due after one year through five years	1,881,672		1,883,000		1,773,803		1,777,737
Due after five years through ten years	—		—		—		—
Due after ten years	—		—		—		—
Non-mortgage-backed securities	2,840,450		2,842,599		3,541,411		3,546,325
Mortgage-backed securities	4,861,938		4,933,589		3,154,703		3,194,985
TOTAL	$	7,702,388	$	7,776,188	$	6,696,114	$	6,741,310

Net gains (losses) realized on the sale of available-for-sale securities are recorded in other income (loss) on the Statements of Income. Table 3.8 presents details of the sales for the nine months ended September 30, 2020 (in thousands). There were no sales of available-for-sale securities during the nine months ended September 30, 2021 or during the three months ended September 30, 2021 and 2020.

Table 3.8

	Nine Months Ended
	09/30/2020
Proceeds from sale of available-for-sale securities	$	289,045
Gross gains on sale of available-for-sale securities	$	1,526
Gross losses on sale of available-for-sale securities	(3)
NET GAINS (LOSSES) ON SALE OF AVAILABLE-FOR-SALE SECURITIES	$	1,523

Held-to-maturity Securities: Held-to-maturity securities by major security type as of September 30, 2021 are summarized in Table 3.9 (in thousands). Carrying value equals amortized cost, which includes adjustments made to the cost basis of an investment for accretion and amortization, and excludes accrued interest receivable of $273,000 as of September 30, 2021.

Table 3.9

	09/30/2021
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
State or local housing agency obligations	$	78,095	$	—	$	(2,204)	$	75,891
Non-mortgage-backed securities	78,095		—		(2,204)		75,891
Mortgage-backed securities:
GSE MBS	355,191		6,781		(15)		361,957
Mortgage-backed securities	355,191		6,781		(15)		361,957
TOTAL	$	433,286	$	6,781	$	(2,219)	$	437,848

Held-to-maturity securities by major security type as of December 31, 2020 are summarized in Table 3.10 (in thousands). Carrying value equals amortized cost, which includes adjustments made to the cost basis of an investment for accretion and amortization, and excludes accrued interest receivable of $930,000 as of December 31, 2020.

Table 3.10

	12/31/2020
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
State or local housing agency obligations	$	78,960	$	—	$	(3,290)	$	75,670
Non-mortgage-backed securities	78,960		—		(3,290)		75,670
Mortgage-backed securities:
U.S. obligation MBS	70,814		135		(59)		70,890
GSE MBS	2,597,218		10,208		(3,870)		2,603,556
Mortgage-backed securities	2,668,032		10,343		(3,929)		2,674,446
TOTAL	$	2,746,992	$	10,343	$	(7,219)	$	2,750,116

The amortized cost and fair values of held-to-maturity securities by contractual maturity as of September 30, 2021 and December 31, 2020 are shown in Table 3.11 (in thousands). Expected maturities of certain securities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

Table 3.11

	09/30/2021				12/31/2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Non-mortgage-backed securities:
Due in one year or less	$	—	$	—	$	—	$	—
Due after one year through five years	—		—		—		—
Due after five years through ten years	48,095		47,047		48,960		47,280
Due after ten years	30,000		28,844		30,000		28,390
Non-mortgage-backed securities	78,095		75,891		78,960		75,670
Mortgage-backed securities	355,191		361,957		2,668,032		2,674,446
TOTAL	$	433,286	$	437,848	$	2,746,992	$	2,750,116

During the second quarter of 2021, FHLBank adopted a provision of ASU 2020-04 which allows a one-time election to sell, transfer, or both sell and transfer debt securities classified as held-to-maturity that reference a rate affected by reference rate reform and that were classified as held-to-maturity before January 1, 2020. Upon adopting the provision, FHLBank transferred held-to-maturity securities with an amortized cost of $2,019,635,000 to available-for-sale and recorded unrealized gains in accumulated other comprehensive income (AOCI) of $4,059,000.

Allowance for Credit Losses on Available-for-Sale and Held-to-Maturity Securities: FHLBank evaluates available-for-sale and held-to-maturity investment securities for credit losses on a quarterly basis. As of September 30, 2021 and December 31, 2020, FHLBank did not recognize a provision for credit losses associated with available-for-sale investments or held-to-maturity investments.

Although certain available-for-sale securities were in an unrealized loss position, these losses are considered temporary as FHLBank expects to recover the entire amortized cost basis on these available-for-sale investment securities. FHLBank neither intends to sell these securities nor considers it more likely than not that it will be required to sell these securities before its anticipated recovery of each security's remaining amortized cost basis. Further, FHLBank has not experienced any payment defaults on the instruments, and all of these securities carry an implicit or explicit government guarantee.

FHLBank's held-to-maturity securities: (1) were all highly rated and/or had short remaining terms to maturity; (2) had not experienced, nor did FHLBank expect, any payment default on the instruments; and (3) in the case of U.S. obligations or GSE MBS, carry an implicit or explicit government guarantee such that FHLBank considers the risk of nonpayment to be zero.

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Advances

9 Months Ended

Sep. 30, 2021

Advances [Abstract]

Advances

ADVANCES

General Terms: FHLBank offers a wide range of fixed and variable rate advance products with different maturities, interest rates, payment characteristics and optionality. As of September 30, 2021 and December 31, 2020, FHLBank had advances outstanding at interest rates ranging from 0.11 percent to 7.20 percent. Table 4.1 presents advances summarized by redemption term as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands). Carrying amounts exclude accrued interest receivable of $12,887,000 and $15,588,000 as of September 30, 2021 and December 31, 2020, respectively.

Table 4.1

	09/30/2021				12/31/2020
Redemption Term	Amount		Weighted Average Interest Rate		Amount		Weighted Average Interest Rate
Due in one year or less	$	12,278,130	0.36	%	$	12,540,970	0.45	%
Due after one year through two years	1,470,363		1.26		1,591,133		1.20
Due after two years through three years	1,927,315		1.20		1,268,307		1.73
Due after three years through four years	1,482,542		1.16		1,305,047		1.47
Due after four years through five years	988,112		1.31		1,033,221		1.40
Thereafter	3,150,229		1.81		3,233,763		1.90
Total par value	21,296,691		0.81	%	20,972,441		0.92	%
Discounts	(18,004)				(18,071)
Hedging adjustments	132,416				272,453
TOTAL	$	21,411,103			$	21,226,823

FHLBank’s outstanding advances 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). In exchange for receiving the right to call the advance on a predetermined call schedule, the borrower may pay a higher fixed rate for the advance relative to an equivalent maturity, non-callable, fixed rate advance. The borrower normally exercises its call options on these advances when interest rates decline (fixed rate advances) or spreads change (adjustable rate advances).

Convertible advances allow FHLBank to convert an advance from one interest payment term structure to another. When issuing convertible advances, FHLBank purchases put options from a member that allow 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. In October 2020, FHLBank placed a moratorium on the issuance of convertible advances; however, $1,497,150,000 remain outstanding.

Table 4.2 presents advances summarized by redemption term or next call date (for callable advances) and by redemption term or next conversion date (for convertible advances) as of September 30, 2021 and December 31, 2020 (in thousands):

Table 4.2

	Redemption Term or Next Call Date				Redemption Term or Next Conversion Date
Redemption Term	09/30/2021		12/31/2020		09/30/2021		12/31/2020
Due in one year or less	$	13,641,513	$	14,271,213	$	13,362,130	$	13,563,370
Due after one year through two years	1,230,999		1,161,239		1,697,613		1,861,133
Due after two years through three years	1,459,489		981,503		2,009,815		1,489,057
Due after three years through four years	1,085,312		773,881		1,533,942		1,400,447
Due after four years through five years	985,276		796,495		987,762		1,008,871
Thereafter	2,894,102		2,988,110		1,705,429		1,649,563
TOTAL PAR VALUE	$	21,296,691	$	20,972,441	$	21,296,691	$	20,972,441

Interest Rate Payment Terms: Table 4.3 details additional interest rate payment terms for advances as of September 30, 2021 and December 31, 2020 (in thousands):

Table 4.3

Redemption Term	09/30/2021		12/31/2020
Fixed rate:
Due in one year or less	$	11,491,130	$	9,838,379
Due after one year	6,876,299		6,663,459
Total fixed rate	18,367,429		16,501,838
Variable rate:
Due in one year or less	787,000		2,702,591
Due after one year	2,142,262		1,768,012
Total variable rate	2,929,262		4,470,603
TOTAL PAR VALUE	$	21,296,691	$	20,972,441

Credit Risk Exposure and Security Terms: FHLBank manages its credit exposure to advances through an integrated 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 FHLBank's collateral and lending policies to limit risk of loss, while balancing borrowers' needs for a reliable source of funding. Using a risk-based approach and taking into consideration each borrower's financial strength, FHLBank considers the types and level of collateral to be the primary indicator of credit quality on advances. As of September 30, 2021 and December 31, 2020, FHLBank had rights to collateral on a borrower-by-borrower basis with an estimated value greater than its outstanding advances.

FHLBank continues to evaluate and make changes to its collateral guidelines, as necessary, based on current market conditions. As of September 30, 2021 and December 31, 2020, no advances were past due, on non-accrual status, or considered impaired. In addition, there were no troubled debt restructurings related to advances during the three and nine months ended September 30, 2021 and 2020.

Based on the collateral held as security, FHLBank's credit extension and collateral policies, and repayment history on advances, no losses are expected on advances as of September 30, 2021 and December 31, 2020, and therefore no allowance for credit losses on advances was recorded.

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Mortgage Loans

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Mortgage Loans

MORTGAGE LOANS Mortgage loans held for portfolio consist of loans obtained through the MPF Program and are either conventional mortgage loans or government-guaranteed or -insured mortgage loans. Under the MPF Program, FHLBank purchases single-family mortgage loans that are originated or acquired by Participating Financial Institutions (PFI). These mortgage loans are credit-enhanced by PFIs or are guaranteed or insured by Federal agencies.

Mortgage Loans Held for Portfolio: Table 5.1 presents information as of September 30, 2021 and December 31, 2020 on mortgage loans held for portfolio (in thousands). Mortgage loans held for portfolio excludes accrued interest receivable of $37,150,000 and $44,101,000 as of September 30, 2021 and December 31, 2020, respectively.

Table 5.1

	09/30/2021		12/31/2020
Real estate:
Fixed rate, medium-term1, single-family mortgages	$	1,410,868	$	1,419,725
Fixed rate, long-term, single-family mortgages	6,805,521		7,666,912
Total unpaid principal balance	8,216,389		9,086,637
Premiums	112,014		128,231
Discounts	(1,461)		(1,865)
Deferred loan costs, net	89		123
Other deferred fees	(16)		(25)
Hedging adjustments	(4,900)		(2,717)
Total before allowance for credit losses on mortgage loans	8,322,115		9,210,384
Allowance for credit losses on mortgage loans	(6,324)		(5,177)
MORTGAGE LOANS HELD FOR PORTFOLIO, NET	$	8,315,791	$	9,205,207

1    Medium-term defined as a term of 15 years or less at origination.

Table 5.2 presents information as of September 30, 2021 and December 31, 2020 on the outstanding unpaid principal balance of mortgage loans held for portfolio (in thousands):

Table 5.2

	09/30/2021		12/31/2020
Conventional loans	$	7,796,799	$	8,563,349
Government-guaranteed or -insured loans	419,590		523,288
TOTAL UNPAID PRINCIPAL BALANCE	$	8,216,389	$	9,086,637

Payment Status of Mortgage Loans: Payment status is the key credit quality indicator for conventional mortgage loans and allows FHLBank to monitor the migration of past due loans. Past due loans are those where the borrower has failed to make timely payments of principal and/or interest in accordance with the terms of the loan. Other delinquency statistics include non-accrual loans and loans in process of foreclosure.

Table 5.3 presents the payment status based on amortized cost as well as other delinquency statistics for FHLBank’s mortgage loans as of September 30, 2021 (dollar amounts in thousands):

Table 5.3

	09/30/2021
	Conventional Loans															Government Loans			Total
	Origination Year												Subtotal
	Prior to 2017		2017		2018		2019		2020		2021
Amortized Cost:1
Past due 30-59 days delinquent	$	12,982	$	4,695	$	3,744	$	8,063	$	2,667	$	2,022	$	34,173		$	7,994		$	42,167
Past due 60-89 days delinquent	4,658		985		1,615		1,754		984		—		9,996			1,854			11,850
Past due 90 days or more delinquent	11,312		4,867		8,222		17,477		648		546		43,072			16,215			59,287
Total past due	28,952		10,547		13,581		27,294		4,299		2,568		87,241			26,063			113,304
Total current loans	1,868,652		457,785		408,821		1,457,811		1,958,047		1,658,186		7,809,302			399,509			8,208,811
Total mortgage loans	$	1,897,604	$	468,332	$	422,402	$	1,485,105	$	1,962,346	$	1,660,754	$	7,896,543		$	425,572		$	8,322,115
Other delinquency statistics:
In process of foreclosure2													$	1,951		$	1,266		$	3,217
Serious delinquency rate3													0.6		%	3.8		%	0.7		%
Past due 90 days or more and still accruing interest													$	—		$	16,215		$	16,215
Loans on non-accrual status4,5													$	49,903		$	—		$	49,903

1    Excludes accrued interest receivable.

2    Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.

3    Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.

4    Loans on non-accrual status include $1,180,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

5    Includes $34,958,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

Table 5.4 presents the payment status based on recorded investment as well as other delinquency statistics for FHLBank’s mortgage loans as of December 31, 2020 (dollar amounts in thousands):

Table 5.4

	12/31/2020
	Conventional Loans															Government Loans			Total
	Origination Year												Subtotal
	Prior to 2016		2016		2017		2018		2019		2020
Amortized Cost:1
Past due 30-59 days delinquent	$	16,546	$	3,932	$	7,879	$	6,695	$	11,904	$	3,712	$	50,668		$	10,485		$	61,153
Past due 60-89 days delinquent	7,680		1,064		2,354		2,805		4,438		1,278		19,619			4,895			24,514
Past due 90 days or more delinquent	20,518		3,868		13,325		20,969		43,268		5,839		107,787			22,691			130,478
Total past due	44,744		8,864		23,558		30,469		59,610		10,829		178,074			38,071			216,145
Total current loans	1,942,655		632,604		677,871		665,791		2,303,031		2,279,995		8,501,947			492,292			8,994,239
Total mortgage loans	$	1,987,399	$	641,468	$	701,429	$	696,260	$	2,362,641	$	2,290,824	$	8,680,021		$	530,363		$	9,210,384
Other delinquency statistics:
In process of foreclosure2													$	1,785		$	1,563		$	3,348
Serious delinquency rate3													1.3		%	4.3		%	1.4		%
Past due 90 days or more and still accruing interest													$	—		$	22,691		$	22,691
Loans on non-accrual status4,5													$	117,584		$	—		$	117,584

1    Excludes accrued interest receivable.

2    Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.

3    Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.

4    Loans on non-accrual status include $1,311,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

5    Includes $69,192,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

Allowance for Credit Losses:

Conventional Mortgage Loans: Conventional loans are evaluated collectively when similar risk characteristics exist. Conventional loans that do not share risk characteristics with other pools are evaluated for expected credit losses on an individual basis. FHLBank determines its allowances for credit losses on conventional loans through analyses that include consideration of various loan portfolio and collateral-related characteristics, such as past performance, current conditions, and reasonable and supportable forecasts of expected economic conditions. FHLBank uses a model that discounts projected cash flows to estimate expected credit losses over the life of the loans. This model relies on a number of inputs, such as both current and forecasted property values and interest rates as well as historical borrower behavior experience. FHLBank also incorporates associated credit enhancements, as available, to determine its estimate of expected credit losses.

Certain conventional loans may be evaluated for credit losses using the practical expedient for collateral dependent assets. A mortgage loan is considered collateral dependent if repayment is expected to be provided by the sale of the underlying property, that is, if it is considered likely that the borrower will default. FHLBank may estimate the fair value of this collateral by applying an appropriate loss severity rate or using third party estimates or property valuation model(s). The expected credit loss of a collateral dependent mortgage loan is equal to the difference between the amortized cost of the loan and the estimated fair value of the collateral, less estimated selling costs. FHLBank records a direct charge-off of the loan balance if certain triggering criteria are met. Expected recoveries of prior charge-offs, if any, are included in the allowance for credit losses.

FHLBank established an allowance for credit losses on its conventional mortgage loans held for portfolio. Table 5.5 presents a roll-forward of the allowance for credit losses on mortgage loans for the three and nine months ended September 30, 2021 and 2020.

Table 5.5

	Three Months Ended				Nine Months Ended
Conventional Loans	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Balance, beginning of the period	$	7,552	$	7,790	$	5,177	$	985
Adjustment for cumulative effect of accounting change	—		—		—		6,123
Net (charge-offs) recoveries	432		20		509		101
Provision (reversal) for credit losses	(1,660)		116		638		717
Balance, end of the period	$	6,324	$	7,926	$	6,324	$	7,926

Government-Guaranteed or -Insured Mortgage Loans: FHLBank invests in fixed-rate mortgage loans that are insured or guaranteed by the Federal Housing Administration, the Department of Veterans Affairs, the Rural Housing Service of the Department of Agriculture, and/or the Department of Housing and Urban Development. The servicer provides and maintains insurance or a guarantee from the applicable government agency. The servicer is responsible for compliance with all government agency requirements and for obtaining the benefit of the applicable guarantee or insurance with respect to defaulted government-guaranteed or -insured mortgage loans. Any losses on these loans that are not recovered from the issuer or the guarantor are absorbed by the servicer. Therefore, FHLBank only has credit risk for these loans if the servicer fails to pay for losses not covered by the guarantee or insurance. Based on FHLBank's assessment of its servicers and the collateral backing the loans, the risk of loss was immaterial, consequently, no allowance for credit losses for government-guaranteed or -insured mortgage loans was recorded as of September 30, 2021 and December 31, 2020. Furthermore, none of these mortgage loans has been placed on non-accrual status because of the U.S. government guarantee or insurance on these loans and the contractual obligation of the loan servicer to repurchase the loans when certain criteria are met.

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Derivatives And Hedging Activities

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives And Hedging Activities

DERIVATIVES AND HEDGING ACTIVITIES

Table 6.1 presents outstanding notional amounts and fair values of the derivatives outstanding by type of derivative and by hedge designation as of September 30, 2021 and December 31, 2020 (in thousands). Total derivative assets and liabilities include the effect of netting adjustments and cash collateral.

Table 6.1

	09/30/2021						12/31/2020
	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps	$	18,294,341	$	16,608	$	176,775	$	15,862,207	$	18,427	$	261,431
Total derivatives designated as hedging relationships	18,294,341		16,608		176,775		15,862,207		18,427		261,431
Derivatives not designated as hedging instruments:
Interest rate swaps	2,337,365		6		41,836		2,476,659		107		68,210
Interest rate caps/floors	477,500		321		—		602,500		141		—
Mortgage delivery commitments	162,060		5		1,005		133,456		654		4
Total derivatives not designated as hedging instruments	2,976,925		332		42,841		3,212,615		902		68,214
TOTAL	$	21,271,266	16,940		219,616		$	19,074,822	19,329		329,645
Netting adjustments and cash collateral1			117,739		(211,771)				129,539		(325,241)
DERIVATIVE ASSETS AND LIABILITIES			$	134,679	$	7,845			$	148,868	$	4,404

1    Amounts represent the application of the netting requirements that allow FHLBank to settle positive and negative positions and cash collateral, including accrued interest, held or placed with the same clearing agent and/or derivative counterparty. Cash collateral posted was $329,510,000 and $455,080,000 as of September 30, 2021 and December 31, 2020, respectively. Cash collateral received was $0 and $300,000 as of September 30, 2021 and December 31, 2020, respectively.

FHLBank carries derivative instruments at fair value on its Statements of Condition. Changes in fair value of the derivative hedging instrument and the hedged item attributable to the hedged risk for designated fair value hedges are recorded in net interest income in the same line as the earnings effect of the hedged item.

Gains (losses) on fair value hedges include unrealized changes in fair value as well as net interest settlements. For the three months ended September 30, 2021 and 2020, FHLBank recorded net gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on FHLBank’s net interest income as presented in Table 6.2 (in thousands):

Table 6.2

	Three Months Ended
	09/30/2021
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	29,925	$	10,701	$	1,326	$	37,729
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	1,516	$	1,446	$	—	$	(403)
Hedged items2	(18,744)		(23,862)		—		6,982
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(17,228)	$	(22,416)	$	—	$	6,579

	Three Months Ended
	09/30/2020
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	38,848	$	9,588	$	5,674	$	67,142
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	10,848	$	9,424	$	(197)	$	(1,509)
Hedged items2	(28,115)		(40,444)		1,321		12,203
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(17,267)	$	(31,020)	$	1,124	$	10,694

1    Includes net interest settlements in interest income/expense.

2    Includes amortization/accretion on closed fair value relationships in interest income.

For the nine months ended September 30, 2021 and 2020, FHLBank recorded net gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on FHLBank’s net interest income as presented in Table 6.3 (in thousands):

Table 6.3

	Nine Months Ended
	09/30/2021
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	95,677	$	29,589	$	4,393	$	124,395
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	84,116	$	81,276	$	13	$	(11,167)
Hedged items2	(133,978)		(153,929)		(33)		33,424
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(49,862)	$	(72,653)	$	(20)	$	22,257

	Nine Months Ended
	9/30/2020
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	230,000	$	43,753	$	120,385	$	310,628
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	(280,875)	$	(386,669)	$	18,350	$	45,856
Hedged items2	248,445		308,189		(112)		(16,663)
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(32,430)	$	(78,480)	$	18,238	$	29,193

1    Includes net interest settlements in interest income/expense.

2    Includes amortization/accretion on closed fair value relationships in interest income.

Table 6.4 presents the cumulative basis adjustments on hedged items designated as fair value hedges and the related amortized cost of the hedged items as of September 30, 2021 and December 31, 2020 (in thousands):

Table 6.4

09/30/2021
Line Item in Statements of Condition of Hedged Item	Carrying Value of Hedged Asset/(Liability)1		Basis Adjustments for Active Hedging Relationships2		Basis Adjustments for Discontinued Hedging Relationships2		Cumulative Amount of Fair Value Hedging Basis Adjustments2
Advances	$	6,234,566	$	120,597	$	11,819	$	132,416
Available-for-sale securities	5,685,568		162,224		—		162,224
Consolidated obligation bonds	(6,683,518)		(1,230)		—		(1,230)
12/31/2020
Line Item in Statements of Condition of Hedged Item	Carrying Value of Hedged Asset/(Liability)1		Basis Adjustments for Active Hedging Relationships2		Basis Adjustments for Discontinued Hedging Relationships2		Cumulative Amount of Fair Value Hedging Basis Adjustments2
Advances	$	5,895,962	$	261,304	$	11,149	$	272,453
Available-for-sale securities	6,696,114		320,063		—		320,063
Consolidated discount notes	(174,855)		33		—		33
Consolidated obligation bonds	(3,791,848)		(34,654)		—		(34,654)

1    Includes only the portion of carrying value representing the hedged items in fair value hedging relationships. For available-for-sale securities, amortized cost is considered to be carrying value (i.e., the fair value adjustment recorded in AOCI is excluded).

2    Included in amortized cost of the hedged asset/liability.

Table 6.5 provides information regarding net gains (losses) on derivatives recorded in non-interest income (in thousands).

Table 6.5

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Derivatives not designated as hedging instruments:
Economic hedges:
Interest rate swaps	$	11,908	$	15,842	$	57,473	$	(97,218)
Interest rate caps/floors	252		(17)		180		(30)
Net interest settlements	(12,878)		(14,222)		(38,773)		(32,338)
Mortgage delivery commitments	(678)		423		(2,710)		(5,995)
NET GAINS (LOSSES) ON DERIVATIVES	$	(1,396)	$	2,026	$	16,170	$	(135,581)

Based on credit analyses and collateral requirements, FHLBank management does not anticipate any credit losses on its derivative agreements. There was no credit risk applicable to a single counterparty as of September 30, 2021. The maximum credit risk applicable to a single counterparty was $247,000 as of December 31, 2020.

For uncleared derivative transactions, FHLBank has entered into bilateral security agreements with its counterparties with bilateral-collateral-exchange provisions that require all credit exposures be collateralized, subject to minimum transfer amounts.

FHLBank utilizes two Derivative Clearing Organizations (Clearinghouse) for all cleared derivative transactions, LCH Limited and CME Clearing. At both Clearinghouses, initial margin is considered cash collateral. For cleared derivatives, the Clearinghouse determines initial margin requirements and generally, credit ratings are not factored into the initial margin. However, clearing agents may require additional initial margin to be posted based on credit considerations, including but not limited to credit rating downgrades. FHLBank was not required to post additional initial margin by its clearing agents as of September 30, 2021 and December 31, 2020.

FHLBank’s net exposure on derivative agreements is presented in Note 9.

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Deposits

9 Months Ended

Sep. 30, 2021

Deposits [Abstract]

Deposits

DEPOSITS

FHLBank offers demand, overnight and short-term deposit programs to its members and to other qualifying non-members. A member that services mortgage loans may also deposit funds collected in connection with the mortgage loans, pending disbursement of these funds to the owners of the mortgage loans. FHLBank classifies these funds as other deposits. Deposits classified as demand and overnight pay interest based on a daily interest rate. Term deposits pay interest based on a fixed rate determined at the issuance of the deposit. Table 7.1 details the types of deposits held by FHLBank as of September 30, 2021 and December 31, 2020 (in thousands):

Table 7.1

	09/30/2021		12/31/2020
Interest-bearing:
Demand	$	345,197	$	308,604
Overnight	548,900		660,400
Term	2,750		2,750
Total interest-bearing	896,847		971,754
Non-interest-bearing:
Other	136,710		257,607
Total non-interest-bearing	136,710		257,607
TOTAL DEPOSITS	$	1,033,557	$	1,229,361

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Consolidated Obligations

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Consolidated Obligations

CONSOLIDATED OBLIGATIONS

Consolidated Obligation Bonds: Table 8.1 presents FHLBank’s participation in consolidated obligation bonds outstanding as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):

Table 8.1

	09/30/2021				12/31/2020
Year of Contractual Maturity	Amount		Weighted Average Interest Rate		Amount		Weighted Average Interest Rate
Due in one year or less	$	18,762,650	0.17	%	$	27,921,650	0.31	%
Due after one year through two years	2,376,950		0.98		1,267,800		1.45
Due after two years through three years	1,479,650		1.08		1,216,600		1.91
Due after three years through four years	1,585,200		0.86		831,700		1.58
Due after four years through five years	2,288,500		0.82		836,100		1.22
Thereafter	4,972,050		1.60		5,518,800		1.60
Total par value	31,465,000		0.58	%	37,592,650		0.63	%
Premiums	26,544				38,219
Discounts	(2,842)				(3,303)
Concession fees	(12,152)				(14,143)
Hedging adjustments	1,230				34,654
TOTAL	$	31,477,780			$	37,648,077

FHLBank issues optional principal redemption bonds (callable bonds) that may be redeemed in whole or in part at the discretion of FHLBank on predetermined call dates in accordance with terms of bond offerings. FHLBank’s participation in consolidated obligation bonds outstanding as of September 30, 2021 and December 31, 2020 includes callable bonds totaling $8,354,000,000 and $6,878,000,000, respectively. Table 8.2 summarizes FHLBank’s participation in consolidated obligation bonds outstanding by year of maturity, or by the next call date for callable bonds as of September 30, 2021 and December 31, 2020 (in thousands):

Table 8.2

Year of Maturity or Next Call Date	09/30/2021		12/31/2020
Due in one year or less	$	27,109,150	$	34,299,650
Due after one year through two years	2,176,950		1,142,800
Due after two years through three years	934,150		815,100
Due after three years through four years	588,200		399,700
Due after four years through five years	234,500		391,100
Thereafter	422,050		544,300
TOTAL PAR VALUE	$	31,465,000	$	37,592,650

In addition to having fixed rate or simple variable rate coupon payment terms, consolidated obligation bonds may also have the following broad terms, regarding the coupon payment:

▪Range bonds that have coupon rates at fixed or variable rates and pay the fixed or variable rate as long as the index rate is within the established range, but generally pay zero percent or a minimal interest rate if the specified index rate is outside the established range;

▪Conversion bonds that have coupon rates that convert from fixed to variable, or variable to fixed, rates or from one index to another, on predetermined dates according to the terms of the bond offerings; and

▪Step bonds that have coupon rates at fixed or variable rates for specified intervals over the lives of the bonds. At the end of each specified interval, the coupon rate or variable rate spread increases (decreases) or steps up (steps down). These bond issues generally contain call provisions enabling the bonds to be called at FHLBank’s discretion on the step dates.

Table 8.3 summarizes interest rate payment terms for consolidated obligation bonds as of September 30, 2021 and December 31, 2020 (in thousands):

Table 8.3

	09/30/2021		12/31/2020
Fixed rate	$	15,838,000	$	13,840,650
Simple variable rate	15,027,000		23,752,000
Step	600,000		—
TOTAL PAR VALUE	$	31,465,000	$	37,592,650

Consolidated Discount Notes: Table 8.4 summarizes FHLBank’s participation in consolidated obligation discount notes, all of which are due within one year (dollar amounts in thousands):

Table 8.4

	Book Value		Par Value		Weighted Average Interest Rate1
September 30, 2021	$	10,277,237	$	10,277,770	0.04	%
December 31, 2020	$	10,882,417	$	10,883,608	0.08	%

1    Represents yield to maturity excluding concession fees.

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Assets and Liabilities Subject to Offsetting

9 Months Ended

Sep. 30, 2021

Offsetting [Abstract]

Assets and Liabilities Subject to Offsetting

ASSETS AND LIABILITIES SUBJECT TO OFFSETTING

FHLBank presents certain financial instruments, including derivatives, repurchase agreements and securities purchased under agreements to resell, on a net basis by clearing agent by Clearinghouse, or by counterparty, when it has met the netting requirements. For these financial instruments, FHLBank has elected to offset its asset and liability positions, as well as cash collateral received or pledged, including associated accrued interest.

FHLBank has analyzed the enforceability of offsetting rights incorporated in its cleared derivative transactions and determined that the exercise of those offsetting rights by a non-defaulting party under these transactions should be upheld under applicable law upon an event of default including a bankruptcy, insolvency, or similar proceeding involving the Clearinghouse or clearing agent, or both. Based on this analysis, FHLBank presents a net derivative receivable or payable for all of its transactions through a particular clearing agent with a particular Clearinghouse.

Tables 9.1 and 9.2 present the fair value of financial assets, including the related collateral received from or pledged to clearing agents or counterparties, based on the terms of FHLBank’s master netting arrangements or similar agreements as of September 30, 2021 and December 31, 2020 (in thousands):

Table 9.1

09/30/2021
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Condition		Net Amounts of Assets Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative assets:
Uncleared derivatives	$	16,839	$	(16,356)	$	483	$	(5)	$	478
Cleared derivatives	101		134,095		134,196		—		134,196
Total derivative assets	16,940		117,739		134,679		(5)		134,674
Securities purchased under agreements to resell	2,100,000		—		2,100,000		(2,100,000)		—
TOTAL	$	2,116,940	$	117,739	$	2,234,679	$	(2,100,005)	$	134,674

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

Table 9.2

12/31/2020
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Condition		Net Amounts of Assets Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative assets:
Uncleared derivatives	$	18,819	$	(18,031)	$	788	$	(654)	$	134
Cleared derivatives	510		147,570		148,080		—		148,080
Total derivative assets	19,329		129,539		148,868		(654)		148,214
Securities purchased under agreements to resell	2,600,000		—		2,600,000		(2,600,000)		—
TOTAL	$	2,619,329	$	129,539	$	2,748,868	$	(2,600,654)	$	148,214

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

Tables 9.3 and 9.4 present the fair value of financial liabilities, including the related collateral received from or pledged to counterparties, based on the terms of FHLBank’s master netting arrangements or similar agreements as of September 30, 2021 and December 31, 2020 (in thousands):

Table 9.3

09/30/2021
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Condition		Net Amounts of Liabilities Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative liabilities:
Uncleared derivatives	$	206,719	$	(198,874)	$	7,845	$	(1,005)	$	6,840
Cleared derivatives	12,897		(12,897)		—		—		—
Total derivative liabilities	219,616		(211,771)		7,845		(1,005)		6,840
TOTAL	$	219,616	$	(211,771)	$	7,845	$	(1,005)	$	6,840

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

Table 9.4

12/31/2020
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Condition		Net Amounts of Liabilities Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative liabilities:
Uncleared derivatives	$	324,491	$	(320,087)	$	4,404	$	(4)	$	4,400
Cleared derivatives	5,154		(5,154)		—		—		—
Total derivative liabilities	329,645		(325,241)		4,404		(4)		4,400
TOTAL	$	329,645	$	(325,241)	$	4,404	$	(4)	$	4,400

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

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Capital

9 Months Ended

Sep. 30, 2021

Stockholders' Equity Note [Abstract]

Capital

CAPITAL

Capital Requirements: FHLBank is subject to three capital requirements under the provisions of the Gramm-Leach-Bliley Act (GLB Act) and the FHFA's capital structure regulation. Regulatory capital does not include AOCI but does include mandatorily redeemable capital stock.

•Risk-based capital. FHLBank must maintain at all times permanent capital in an amount at least equal to the sum of its credit risk, market risk and operations risk capital requirements. The risk-based capital requirements are all calculated in accordance with the rules and regulations of the FHFA. Only permanent capital, defined as Class B Common Stock and retained earnings, can be used by FHLBank to satisfy its risk-based capital requirement. The FHFA may require FHLBank to maintain a greater amount of permanent capital than is required by the risk-based capital requirement as defined, but the FHFA has not placed any such requirement on FHLBank to date.

•Total regulatory capital. The GLB Act requires FHLBank to maintain at all times at least a 4.0 percent total capital-to-asset ratio. Total regulatory capital is defined as the sum of permanent capital, Class A Common Stock, any general loss allowance, if consistent with GAAP and not established for specific assets, and other amounts from sources determined by the FHFA as available to absorb losses.

•Leverage capital. FHLBank is required to maintain at all times a leverage capital-to-assets ratio of at least 5.0 percent, with the leverage capital ratio defined as the sum of permanent capital weighted 1.5 times and non-permanent capital (currently only Class A Common Stock) weighted 1.0 times, divided by total assets.

Table 10.1 illustrates that FHLBank was in compliance with its regulatory capital requirements as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):

Table 10.1

	09/30/2021						12/31/2020
	Required			Actual			Required			Actual
Regulatory capital requirements:
Risk-based capital	$	402,398		$	2,278,219		$	192,927		$	2,213,868
Total regulatory capital-to-asset ratio	4.0		%	5.5		%	4.0		%	5.0		%
Total regulatory capital	$	1,820,649		$	2,500,649		$	2,103,668		$	2,627,083
Leverage capital ratio	5.0		%	8.0		%	5.0		%	7.1		%
Leverage capital	$	2,275,811		$	3,639,759		$	2,629,586		$	3,734,017

Capital Stock: FHLBank offers two classes of stock, Class A Common Stock and Class B Common Stock. Each member is required to hold capital stock to become and remain a member of FHLBank (Asset-based Stock Purchase Requirement; Class A Common Stock) and enter into specified activities with FHLBank including, but not limited to, access to FHLBank’s credit products and selling Acquired Member Assets (AMA) to FHLBank (Activity-based Stock Purchase Requirement; Class A Common Stock to the extent of a member’s Asset-based Stock Purchase Requirement, then Class B Common Stock for the remainder). The amount of Class A Common Stock a member must acquire and maintain is the Asset-based Stock Purchase Requirement, which is currently equal to 0.1 percent of a member’s total assets as of December 31 of the preceding calendar year, with a minimum requirement of $1,000, and a maximum requirement of $500,000. The amount of Class B Common Stock a member must acquire and maintain is the Activity-based Stock Purchase Requirement, which is currently equal to 4.5 percent of the principal amount of advances outstanding to the member plus 3.0 percent of the principal amount of AMA outstanding for the member, limited to a maximum of 3.0 percent of the member's total assets at the end of the prior calendar year, plus 0.25 percent of letters of credit balances outstanding, less the member’s Asset-based Stock Purchase Requirement. As of December 31, 2020, there was no Activity-based Stock Purchase Requirement for letters of credit. However, the Letter of Credit Activity-based Stock Purchase Requirement increased to 0.25 percent from the previous requirement of zero percent, effective January 22, 2021. The change in the Activity-based Stock Purchase Requirements did not change for former members with outstanding business transactions.

Mandatorily Redeemable Capital Stock: FHLBank is a cooperative whose members own most of FHLBank’s capital stock. Former members (including certain non-members that own FHLBank capital stock as a result of merger or acquisition, relocation, charter termination, or involuntary termination of an FHLBank member) own the remaining capital stock to support business transactions still carried on FHLBank's Statements of Condition. Shares cannot be purchased or sold except between FHLBank and its members at a price equal to the $100 per share par value. If a member cancels its written notice of redemption or notice of withdrawal, FHLBank will reclassify mandatorily redeemable capital stock from a liability to equity. After the reclassification, dividends on the capital stock would no longer be classified as interest expense.

Table 10.2 presents a roll-forward of mandatorily redeemable capital stock for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Table 10.2

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Balance, beginning of period	$	1,543	$	2,308	$	1,624	$	2,415
Capital stock subject to mandatory redemption reclassified from equity during the period	460		620,561		584,512		1,627,899
Capital stock redemption cancellations reclassified to equity during the period	—		—		—		(100,647)
Redemption or repurchase of mandatorily redeemable capital stock during the period	(1,397)		(620,967)		(585,547)		(1,527,802)
Stock dividend classified as mandatorily redeemable capital stock during the period	1		12		18		49
Balance, end of period	$	607	$	1,914	$	607	$	1,914

Excess Capital Stock: Excess capital stock is defined as the amount of stock held by a member (or former member) in excess of that institution’s minimum stock purchase requirement. FHFA rules limit the ability of FHLBank to create excess member stock under certain circumstances. For example, FHLBank may not pay dividends in the form of capital stock or issue new excess stock to members if FHLBank’s excess stock exceeds one percent of its total assets or if the issuance of excess stock would cause FHLBank’s excess stock to exceed one percent of its total assets. As of September 30, 2021, FHLBank’s excess stock was less than one percent of total assets.

Capital Classification Determination: The FHFA determines each FHLBank’s capital classification on at least a quarterly basis. If an FHLBank is determined to be other than adequately capitalized, that FHLBank becomes subject to additional supervisory authority by the FHFA. Before implementing a reclassification, the Director of the FHFA is required to provide an FHLBank with written notice of the proposed action and an opportunity to submit a response. As of the most recent review by the FHFA, FHLBank Topeka was classified as adequately capitalized.

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2021

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income

ACCUMULATED OTHER COMPREHENSIVE INCOME

Table 11.1 summarizes the changes in AOCI for the three months ended September 30, 2021 and 2020 (in thousands):

Table 11.1

	Three Months Ended
	Net Unrealized Gains (Losses) on Available-for-sale Securities		Defined Benefit Pension Plan		Total AOCI
Balance at June 30, 2020	$	(31,746)	$	(1,948)	$	(33,694)
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)	30,295				30,295
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan1			28		28
Net current period other comprehensive income (loss)	30,295		28		30,323
Balance at September 30, 2020	$	(1,451)	$	(1,920)	$	(3,371)
Balance at June 30, 2021	$	96,282	$	(2,738)	$	93,544
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)	(22,482)				(22,482)
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan1			92		92
Net current period other comprehensive income (loss)	(22,482)		92		(22,390)
Balance at September 30, 2021	$	73,800	$	(2,646)	$	71,154

1    Recorded in “Other” non-interest expense on the Statements of Income. Amount represents a debit (increase to other expenses).

Table 11.2 summarizes the changes in AOCI for the nine months ended September 30, 2021 and 2020 (in thousands):

Table 11.2

	Nine Months Ended
	Net Unrealized Gains (Losses) on Available-for-sale Securities		Defined Benefit Pension Plan		Total AOCI
Balance at December 31, 2019	$	26,788	$	(2,002)	$	24,786
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)	(26,716)				(26,716)
Reclassifications from other comprehensive income (loss) to net income:
Realized net (gains) losses included in net income1	(1,523)				(1,523)
Amortization of net losses - defined benefit pension plan2			82		82
Net current period other comprehensive income (loss)	(28,239)		82		(28,157)
Balance at September 30, 2020	$	(1,451)	$	(1,920)	$	(3,371)
Balance at December 31, 2020	$	45,196	$	(2,888)	$	42,308
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)3	28,604				28,604
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan2			242		242
Net current period other comprehensive income (loss)	28,604		242		28,846
Balance at September 30, 2021	$	73,800	$	(2,646)	$	71,154

1    Recorded in “Net gains (losses) on sale of available-for-sale securities” non-interest income on the Statements of Income. Amount represents a credit (increase to other income (loss)).

2    Recorded in “Other” non-interest expense on the Statements of Income. Amount represents a debit (increase to other expenses).

3    Includes $4,059,000 related to the transfer of securities from held-to-maturity to available-for-sale upon the adoption of reference rate reform guidance.

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Fair Values

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Values

FAIR VALUES

The fair value amounts recorded on the Statements of Condition and presented in the note disclosures have been determined by FHLBank using available market and other pertinent information and reflect FHLBank’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., an exit price). Although FHLBank uses its best judgment in estimating the fair value of its financial instruments, there are inherent limitations in any valuation technique. Therefore, the fair values may not be indicative of the amounts that would have been realized in market transactions as of September 30, 2021 and December 31, 2020. Additionally, these values do not represent an estimate of the overall market value of FHLBank as a going concern, which would take into account future business opportunities and the net profitability of assets and liabilities.

Subjectivity of Estimates: Estimates of the fair value of advances with options, mortgage instruments, derivatives with embedded options and consolidated obligation bonds with options 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, methods to determine 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 Hierarchy: The fair value hierarchy requires FHLBank to maximize the use of observable inputs and minimize the use of 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 the market observability of the fair value measurement for the asset or liability. FHLBank must disclose the level within the fair value hierarchy in which the measurements are classified for all assets and liabilities.

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 active markets that FHLBank can access on the measurement date. An active market for the 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: (1) quoted prices for similar assets and liabilities in active markets; (2) quoted prices for similar assets and liabilities in markets that are not active; (3) 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 (4) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•Level 3 Inputs – Unobservable inputs for the asset or liability.

FHLBank reviews its fair value hierarchy classifications on a quarterly basis. Changes in the observability of the valuation inputs may result in a reclassification of certain assets or liabilities. There were no transfers of assets or liabilities between fair value levels during the three and nine months ended September 30, 2021 and 2020.

Tables 12.1 and 12.2 present the carrying value, fair value and fair value hierarchy of financial assets and liabilities as of September 30, 2021 and December 31, 2020. FHLBank records trading securities, available-for-sale securities, derivative assets, and derivative liabilities at fair value on a recurring basis, and on occasion certain mortgage loans held for portfolio and certain other assets at fair value on a nonrecurring basis. FHLBank measures all other financial assets and liabilities at amortized cost. Further details about the financial assets and liabilities held at fair value on either a recurring or non-recurring basis are presented in Tables 12.3 and 12.4.

The carrying value, fair value and fair value hierarchy of FHLBank’s financial assets and liabilities as of September 30, 2021 and December 31, 2020 are summarized in Tables 12.1 and 12.2 (in thousands):

Table 12.1

	09/30/2021
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Assets:
Cash and due from banks	$	29,740	$	29,740	$	29,740	$	—	$	—	$	—
Interest-bearing deposits	569,222		569,222		—		569,222		—		—
Securities purchased under agreements to resell	2,100,000		2,100,000		—		2,100,000		—		—
Federal funds sold	1,958,000		1,958,000		—		1,958,000		—		—
Trading securities	2,622,397		2,622,397		—		2,622,397		—		—
Available-for-sale securities	7,776,188		7,776,188		—		7,776,188		—		—
Held-to-maturity securities	433,286		437,848		—		361,957		75,891		—
Advances	21,411,103		21,500,868		—		21,500,868		—		—
Mortgage loans held for portfolio, net of allowance	8,315,791		8,412,649		—		8,406,513		6,136		—
Accrued interest receivable	83,013		83,013		—		83,013		—		—
Derivative assets	134,679		134,679		—		16,940		—		117,739
Liabilities:
Deposits	1,033,557		1,033,557		—		1,033,557		—		—
Consolidated obligation discount notes	10,277,237		10,276,683		—		10,276,683		—		—
Consolidated obligation bonds	31,477,780		31,452,159		—		31,452,159		—		—
Mandatorily redeemable capital stock	607		607		607		—		—		—
Accrued interest payable	38,036		38,036		—		38,036		—		—
Derivative liabilities	7,845		7,845		—		219,616		—		(211,771)
Other Asset (Liability):
Industrial revenue bonds	35,000		36,572		—		36,572		—		—
Financing obligation payable	(35,000)		(36,572)		—		(36,572)		—		—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.

Table 12.2

	12/31/2020
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Assets:
Cash and due from banks	$	4,570,415	$	4,570,415	$	4,570,415	$	—	$	—	$	—
Interest-bearing deposits	760,297		760,297		—		760,297		—		—
Securities purchased under agreements to resell	2,600,000		2,600,000		—		2,600,000		—		—
Federal funds sold	1,780,000		1,780,000		—		1,780,000		—		—
Trading securities	2,623,376		2,623,376		—		2,623,376		—		—
Available-for-sale securities	6,741,310		6,741,310		—		6,741,310		—		—
Held-to-maturity securities	2,746,992		2,750,116		—		2,674,446		75,670		—
Advances	21,226,823		21,360,450		—		21,360,450		—		—
Mortgage loans held for portfolio, net of allowance	9,205,207		9,454,112		—		9,441,474		12,638		—
Accrued interest receivable	97,718		97,718		—		97,718		—		—
Derivative assets	148,868		148,868		—		19,329		—		129,539
Liabilities:
Deposits	1,229,361		1,229,361		—		1,229,361		—		—
Consolidated obligation discount notes	10,882,417		10,882,601		—		10,882,601		—		—
Consolidated obligation bonds	37,648,077		37,835,135		—		37,835,135		—		—
Mandatorily redeemable capital stock	1,624		1,624		1,624		—		—		—
Accrued interest payable	45,575		45,575		—		45,575		—		—
Derivative liabilities	4,404		4,404		—		329,645		—		(325,241)
Other Asset (Liability):
Industrial revenue bonds	35,000		37,978		—		37,978		—		—
Financing obligation payable	(35,000)		(37,978)		—		(37,978)		—		—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.

Fair Value Measurements: Tables 12.3 and 12.4 present, for each hierarchy level, FHLBank’s assets and liabilities that are measured at fair value on a recurring or nonrecurring basis on the Statements of Condition as of or for the periods ended September 30, 2021 and December 31, 2020 (in thousands).

Table 12.3

	09/30/2021
	Total		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Recurring fair value measurements - Assets:
Trading securities:
Certificates of deposit	$	200,009	$	—	$	200,009	$	—	$	—
U.S. Treasury obligations	1,176,148		—		1,176,148		—		—
GSE debentures	421,980		—		421,980		—		—
GSE MBS	824,260		—		824,260		—		—
Total trading securities	2,622,397		—		2,622,397		—		—
Available-for-sale securities:
U.S. Treasury obligations	2,842,599		—		2,842,599		—		—
U.S. obligation MBS	55,342		—		55,342		—		—
GSE MBS	4,878,247		—		4,878,247		—		—
Total available-for-sale securities	7,776,188		—		7,776,188		—		—
Derivative assets:
Interest-rate related	134,674		—		16,935		—		117,739
Mortgage delivery commitments	5		—		5		—		—
Total derivative assets	134,679		—		16,940		—		117,739
TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	10,533,264	$	—	$	10,415,525	$	—	$	117,739
Recurring fair value measurements - Liabilities:
Derivative liabilities:
Interest-rate related	$	6,840	$	—	$	218,611	$	—	$	(211,771)
Mortgage delivery commitments	1,005		—		1,005		—		—
Total derivative liabilities	7,845		—		219,616		—		(211,771)
TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES	$	7,845	$	—	$	219,616	$	—	$	(211,771)
Nonrecurring fair value measurements - Assets2:
Impaired mortgage loans	$	6,170	$	—	$	—	$	6,170	$	—
Real estate owned	52		—		—		52		—
TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	6,222	$	—	$	—	$	6,222	$	—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

2    Includes assets adjusted to fair value during the nine months ended September 30, 2021 and still outstanding as of September 30, 2021.

Table 12.4

	12/31/2020
	Total		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Recurring fair value measurements - Assets:
Trading securities:
U.S. Treasury obligations	$	1,298,518	$	—	$	1,298,518	$	—	$	—
GSE debentures	431,875		—		431,875		—		—
GSE MBS	892,983		—		892,983		—		—
Total trading securities	2,623,376		—		2,623,376		—		—
Available-for-sale securities:
U.S. Treasury obligations	3,546,325		—		3,546,325		—		—
GSE MBS	3,194,985		—		3,194,985		—		—
Total available-for-sale securities	6,741,310		—		6,741,310		—		—
Derivative assets:
Interest-rate related	148,214		—		18,675		—		129,539
Mortgage delivery commitments	654		—		654		—		—
Total derivative assets	148,868		—		19,329		—		129,539
TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	9,513,554	$	—	$	9,384,015	$	—	$	129,539
Recurring fair value measurements - Liabilities:
Derivative liabilities:
Interest-rate related	$	4,400	$	—	$	329,641	$	—	$	(325,241)
Mortgage delivery commitments	4		—		4		—		—
Total derivative liabilities	4,404		—		329,645		—		(325,241)
TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES	$	4,404	$	—	$	329,645	$	—	$	(325,241)
Nonrecurring fair value measurements - Assets2:
Impaired mortgage loans	$	12,668	$	—	$	—	$	12,668	$	—
Real estate owned	405		—		—		405		—
TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	13,073	$	—	$	—	$	13,073	$	—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

2    Includes assets adjusted to fair value during the year ended December 31, 2020 and still outstanding as of December 31, 2020.

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

COMMITMENTS AND CONTINGENCIES Joint and Several Liability: As provided in the Federal Home Loan Bank Act of 1932, as amended or in FHFA regulations, consolidated obligations are backed only by the financial resources of the FHLBanks. FHLBank Topeka is jointly and severally liable with the other FHLBanks for the payment of principal and interest on all of the consolidated obligations issued by the FHLBanks. The par amounts for which FHLBank Topeka is jointly and severally liable were approximately $599,694,909,000 and $698,296,045,000 as of September 30, 2021 and December 31, 2020, respectively. The joint and several obligations are mandated by FHFA regulations and are not the result of arms-length transactions among the FHLBanks. As described above, the FHLBanks have no control over the amount of the guaranty or the determination of how each FHLBank would perform under the joint and several liability. Because the FHLBanks are subject to the authority of the FHFA as it relates to decisions involving the allocation of the joint and several liability for all FHLBanks' consolidated obligations, FHLBank Topeka regularly monitors the financial condition of the other FHLBanks to determine whether it should expect a loss to arise from its joint and several obligations. If FHLBank were to determine that a loss was probable and the amount of the loss could be reasonably estimated, FHLBank would charge to income the amount of the expected loss. Based upon the creditworthiness of the other FHLBanks as of September 30, 2021, FHLBank Topeka has concluded that a loss accrual is not necessary at this time.

Off-balance Sheet Commitments: As of September 30, 2021 and December 31, 2020, off-balance sheet commitments are presented in Table 13.1 (in thousands):

Table 13.1

	09/30/2021						12/31/2020
Notional Amount	Expire Within One Year		Expire After One Year		Total		Expire Within One Year		Expire After One Year		Total
Standby letters of credit outstanding	$	4,473,000	$	2,483	$	4,475,483	$	5,436,165	$	4,251	$	5,440,416
Advance commitments outstanding	49,090		12,816		61,906		19,693		21,001		40,694
Principal commitments for standby bond purchase agreements	80,530		649,275		729,805		380,615		317,710		698,325
Commitments to fund or purchase mortgage loans	162,060		—		162,060		133,456		—		133,456
Commitments to issue consolidated bonds, at par	3,690,000		—		3,690,000		4,000		—		4,000
Commitments to issue consolidated discount notes, at par	1,000,000		—		1,000,000		—		—		—

Commitments to Extend Credit: FHLBank issues standby letters of credit on behalf of its members to support certain obligations of the members to third-party beneficiaries. These standby letters of credit are subject to the same collateralization and borrowing limits that are applicable to advances and are fully collateralized at the time of issuance with assets allowed by FHLBank’s Member Products Policy (MPP). Standby letters of credit may be offered to assist members in facilitating residential housing finance, community lending, and asset-liability management, and to provide liquidity. In particular, members often use standby letters of credit as collateral for deposits from federal and state government agencies. Standby letters of credit are executed for members for a fee. If FHLBank is required to make payment for a beneficiary's draw, the member either reimburses FHLBank for the amount drawn or, subject to FHLBank's discretion, the amount drawn may be converted into a collateralized advance to the member. However, standby letters of credit usually expire without being drawn upon. Outstanding standby letters of credit have original or extended expiration periods of up to 6 years. FHLBank's current outstanding standby letters of credit expire no later than 2023. Unearned fees as well as the value of the guarantees related to standby letters of credit are recorded in other liabilities and amounted to $1,355,000 and $1,554,000 as of September 30, 2021 and December 31, 2020, respectively. Advance commitments legally bind and unconditionally obligate FHLBank for additional advances up to 24 months in the future. Based upon management’s credit analysis of members and collateral requirements under the MPP, FHLBank does not expect to incur any credit losses on the outstanding letters of credit or advance commitments.

Standby Bond-Purchase Agreements: FHLBank has entered into standby bond purchase agreements with state housing authorities whereby FHLBank, for a fee, agrees to purchase and hold the authorities’ bonds until the designated marketing agent can find a suitable investor or the housing authority repurchases the bond according to a schedule established by the standby agreement. Each standby agreement dictates the specific terms that would require FHLBank to purchase the bond and typically allows FHLBank to terminate the agreement upon the occurrence of a default event of the issuer. The bond purchase commitments entered into by FHLBank expire no later than 2024, though some are renewable at the option of FHLBank. As of September 30, 2021 and December 31, 2020, the total commitments for bond purchases included agreements with two in-district state housing authorities. FHLBank was required to purchase $122,390,000 in bonds under these agreements during the nine months ended September 30, 2020. These bonds were classified as available-for-sale securities, and were acquired at par and sold at par within the same month. FHLBank was not required to purchase any bonds under any agreements during the nine months ended September 30, 2021.

Commitments to Purchase Mortgage Loans: These commitments that unconditionally obligate FHLBank to purchase mortgage loans from participating FHLBank Topeka members in the MPF Program are generally for periods not to exceed 60 calendar days. Certain commitments are recorded as derivatives at their fair values on the Statements of Condition. FHLBank recorded mortgage delivery commitment net derivative asset (liability) balances of $(1,000,000) and $650,000 as of September 30, 2021 and December 31, 2020, respectively.

Commitments to Issue Consolidated Obligations: FHLBank enters into commitments to issue consolidated obligation bonds and discount notes outstanding in the normal course of its business. Most settle within the shortest period possible and are considered regular way trades; however, certain commitments are recorded as derivatives at their fair values on the Statements of Condition.

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Transactions With Stockholders

9 Months Ended

Sep. 30, 2021

Federal Home Loan Banks [Abstract]

Transactions With Stockholders

TRANSACTIONS WITH STOCKHOLDERS FHLBank is a cooperative whose members own most of the capital stock of FHLBank and generally receive dividends on their investments. In addition, certain former members that still have outstanding transactions are also required to maintain their investments in FHLBank capital stock until the transactions mature or are paid off. Nearly all outstanding advances are with current members, and the majority of outstanding mortgage loans held for portfolio were purchased from current or former members. FHLBank also maintains demand deposit accounts for members primarily to facilitate settlement activities that are directly related to advances and mortgage loan purchases.

Transactions with members are entered into in the ordinary course of business. In instances where members also have officers or directors who are directors of FHLBank, transactions with those members are subject to the same eligibility and credit criteria, as well as the same terms and conditions, as other transactions with members. For financial reporting and disclosure purposes, FHLBank defines related parties as FHLBank directors’ financial institutions and members with capital stock investments in excess of 10 percent of FHLBank’s total regulatory capital stock outstanding, which includes mandatorily redeemable capital stock.

Activity with Members that Exceed a 10 Percent Ownership in FHLBank Regulatory Capital Stock: Tables 14.1 and 14.2 present information on members that owned more than 10 percent of outstanding FHLBank regulatory capital stock as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands). None of the officers or directors of this member currently serve on FHLBank’s board of directors.

Table 14.1

09/30/2021
Member Name	State	Total Class A Stock Par Value		Percent of Total Class A		Total Class B Stock Par Value		Percent of Total Class B		Total Capital Stock Par Value		Percent of Total Capital Stock
MidFirst Bank	OK	$	6,800	3.1	%	$	357,791	30.8	%	$	364,591	26.4	%
TOTAL		$	6,800	3.1	%	$	357,791	30.8	%	$	364,591	26.4	%

Table 14.2

12/31/2020
Member Name	State	Total Class A Stock Par Value		Percent of Total Class A		Total Class B Stock Par Value		Percent of Total Class B		Total Capital Stock Par Value		Percent of Total Capital Stock
MidFirst Bank	OK	$	825	0.2	%	$	339,524	29.2	%	$	340,349	21.6	%
TOTAL		$	825	0.2	%	$	339,524	29.2	%	$	340,349	21.6	%

Advance and deposit balances with members that owned more than 10 percent of outstanding FHLBank regulatory capital stock as of September 30, 2021 and December 31, 2020 are summarized in Table 14.3 (dollar amounts in thousands).

Table 14.3

	09/30/2021				12/31/2020				09/30/2021				12/31/2020
Member Name	Outstanding Advances		Percent of Total		Outstanding Advances		Percent of Total		Outstanding Deposits		Percent of Total		Outstanding Deposits		Percent of Total
MidFirst Bank	$	7,770,000	36.5	%	$	7,460,000	35.6	%	$	511	—	%	$	713	0.1	%
TOTAL	$	7,770,000	36.5	%	$	7,460,000	35.6	%	$	511	—	%	$	713	0.1	%

MidFirst Bank did not sell any mortgage loans into the MPF Program during the three and nine months ended September 30, 2021 and 2020.

Transactions with FHLBank Directors’ Financial Institutions: Table 14.4 presents information as of September 30, 2021 and December 31, 2020 for members that had an officer or director serving on FHLBank’s board of directors (dollar amounts in thousands). Information is only included for the period in which the officer or director served on FHLBank’s board of directors. Capital stock listed is regulatory capital stock, which includes mandatorily redeemable capital stock.

Table 14.4

	09/30/2021				12/31/2020
	Outstanding Amount		Percent of Total		Outstanding Amount		Percent of Total
Advances	$	156,291	0.7	%	$	161,021	0.8	%
Deposits	$	18,322	1.8	%	$	25,459	2.1	%
Class A Common Stock	$	5,236	2.4	%	$	10,298	2.5	%
Class B Common Stock	16,785		1.4		21,200		1.8
TOTAL CAPITAL STOCK	$	22,021	1.6	%	$	31,498	2.0	%

Table 14.5 presents mortgage loans acquired during the three and nine months ended September 30, 2021 and 2020 for members that had an officer or director serving on FHLBank’s board of directors in 2021 or 2020 (dollar amounts in thousands). Information is only included for the period in which the officer or director served on FHLBank’s board of directors.

Table 14.5

	Three Months Ended								Nine Months Ended
	09/30/2021				09/30/2020				09/30/2021				09/30/2020
	Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
Mortgage loans acquired	$	13,563	2.2	%	$	9,091	2.5	%	$	32,534	1.9	%	$	95,901	4.0	%

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BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation, Policy

Basis of Presentation: The accompanying interim financial statements of FHLBank are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instruction provided by Article 10, Rule 10-01 of Regulation S-X. The financial statements contain all adjustments which are, in the opinion of management, necessary for a fair statement of FHLBank’s financial position, results of operations and cash flows for the interim periods presented. All such adjustments were of a normal recurring nature. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full fiscal year or any other interim period.

FHLBank’s significant accounting policies and certain other disclosures are set forth in the notes to the audited financial statements for the year ended December 31, 2020. The interim financial statements presented herein should be read in conjunction with FHLBank’s audited financial statements and notes thereto, which are included in FHLBank’s annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 18, 2021 (annual report on Form 10-K). The notes to the interim financial statements highlight significant changes to the notes included in the annual report on Form 10-K.

Use Of Estimates, Policy

Use of Estimates: The preparation of financial statements under GAAP requires management to make estimates and assumptions as of the date of the financial statements in determining the reported amounts of assets, liabilities and estimated fair values and in determining the disclosure of any contingent assets or liabilities. Estimates and assumptions by management also affect the reported amounts of income and expense during the reporting period. The most significant of these estimates include the fair value of trading and available-for-sale securities and the fair value of derivatives. Many of the estimates and assumptions, including those used in financial models, are based on financial market conditions as of the date of the financial statements. Because of the volatility of the financial markets, as well as other factors that affect management estimates, actual results may vary from these estimates.

New Accounting Pronouncements, Policy

Reference Rate Reform (Accounting Standards Update (ASU) 2021-01). In January 2021, the Financial Accounting Standards Board (FASB) issued an amendment that refines the scope of Accounting Standards Codification (ASC) 848 and clarifies the guidance issued to facilitate the effects of reference rate reform on financial reporting. The amendment permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements and calculating price alignment interest in connection with reference rate reform activities. During the fourth quarter of 2020, FHLBank elected applicable optional expedients specific to discounting transition on a retrospective basis. As a result of electing this expedient, discounting transition did not have a material effect on FHLBank's financial condition, results of operations, or cash flows. This guidance was effective immediately for FHLBank and was applied consistently with the optional expedient guidance under ASU 2020-04, described below.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). In March 2020, the FASB issued temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The transactions primarily include: (1) contract modifications; (2) hedging relationships; and (3) sale or transfer of debt securities classified as held-to-maturity. During the second quarter of 2021, FHLBank adopted a provision of ASU 2020-04 which allows a one-time election to sell, transfer, or both sell and transfer debt securities classified as held-to-maturity that reference a rate affected by reference rate reform and that were classified as held-to-maturity before January 1, 2020 by transferring LIBOR-indexed securities. See Note 3 – Investments for additional information related to this transfer. This guidance was effective immediately for FHLBank, and the amendments may be applied prospectively through December 31, 2022. FHLBank is in the process of evaluating the guidance and the other optional expedients, and the effect on FHLBank's financial condition, results of operations and cash flows has not yet been determined.

Credit Loss, Financial Instrument, Policy

Interest-Bearing Deposits, Securities Purchased under Agreements to Resell, and Federal Funds Sold: FHLBank invests in interest-bearing deposits, securities purchased under agreements to resell, and Federal funds sold to provide short-term liquidity. These investments are generally transacted with counterparties that have received a credit rating of triple-B or greater (investment grade) by a Nationally Recognized Statistical Ratings Organization (NRSRO). These may differ from internal ratings of the investments, if applicable. As of September 30, 2021, approximately 32 percent of these overnight investments were with counterparties not rated by an NRSRO. All transactions with unrated counterparties are secured transactions.

Federal funds sold are unsecured loans that are generally transacted on an overnight term. Federal Housing Finance Agency (FHFA) regulations include a limit on the amount of unsecured credit FHLBank may extend to a counterparty. As of September 30, 2021 and December 31, 2020, all investments in interest-bearing deposits and Federal funds sold were repaid or expected to be repaid according to the contractual terms. No allowance for credit losses was recorded for these assets as of September 30, 2021 and December 31, 2020. Carrying values of interest-bearing deposits and Federal funds sold exclude accrued interest receivable of $51,000 and $3,000, respectively, as of September 30, 2021, and $80,000 and $3,000, respectively, as of December 31, 2020.

Securities purchased under agreements to resell are short-term and are structured such that they are evaluated regularly to determine if the market value of the underlying securities decreases below the market value required as collateral (i.e., subject to collateral maintenance provisions). Based upon the collateral held as security and collateral maintenance provisions with its counterparties, FHLBank determined that no allowance for credit losses was needed for its securities purchased under agreements to resell as of September 30, 2021 and December 31, 2020. The carrying value of securities purchased under agreements to resell excludes accrued interest receivable of $5,000 and $6,000 as of September 30, 2021 and December 31, 2020, respectively.

Allowance for Credit Losses on Available-for-Sale and Held-to-Maturity Securities: FHLBank evaluates available-for-sale and held-to-maturity investment securities for credit losses on a quarterly basis. As of September 30, 2021 and December 31, 2020, FHLBank did not recognize a provision for credit losses associated with available-for-sale investments or held-to-maturity investments.

Although certain available-for-sale securities were in an unrealized loss position, these losses are considered temporary as FHLBank expects to recover the entire amortized cost basis on these available-for-sale investment securities. FHLBank neither intends to sell these securities nor considers it more likely than not that it will be required to sell these securities before its anticipated recovery of each security's remaining amortized cost basis. Further, FHLBank has not experienced any payment defaults on the instruments, and all of these securities carry an implicit or explicit government guarantee.

FHLBank's held-to-maturity securities: (1) were all highly rated and/or had short remaining terms to maturity; (2) had not experienced, nor did FHLBank expect, any payment default on the instruments; and (3) in the case of U.S. obligations or GSE MBS, carry an implicit or explicit government guarantee such that FHLBank considers the risk of nonpayment to be zero.

Allowance for Credit Losses:

Conventional Mortgage Loans: Conventional loans are evaluated collectively when similar risk characteristics exist. Conventional loans that do not share risk characteristics with other pools are evaluated for expected credit losses on an individual basis. FHLBank determines its allowances for credit losses on conventional loans through analyses that include consideration of various loan portfolio and collateral-related characteristics, such as past performance, current conditions, and reasonable and supportable forecasts of expected economic conditions. FHLBank uses a model that discounts projected cash flows to estimate expected credit losses over the life of the loans. This model relies on a number of inputs, such as both current and forecasted property values and interest rates as well as historical borrower behavior experience. FHLBank also incorporates associated credit enhancements, as available, to determine its estimate of expected credit losses.

Certain conventional loans may be evaluated for credit losses using the practical expedient for collateral dependent assets. A mortgage loan is considered collateral dependent if repayment is expected to be provided by the sale of the underlying property, that is, if it is considered likely that the borrower will default. FHLBank may estimate the fair value of this collateral by applying an appropriate loss severity rate or using third party estimates or property valuation model(s). The expected credit loss of a collateral dependent mortgage loan is equal to the difference between the amortized cost of the loan and the estimated fair value of the collateral, less estimated selling costs. FHLBank records a direct charge-off of the loan balance if certain triggering criteria are met. Expected recoveries of prior charge-offs, if any, are included in the allowance for credit losses.

Government-Guaranteed or -Insured Mortgage Loans: FHLBank invests in fixed-rate mortgage loans that are insured or guaranteed by the Federal Housing Administration, the Department of Veterans Affairs, the Rural Housing Service of the Department of Agriculture, and/or the Department of Housing and Urban Development. The servicer provides and maintains insurance or a guarantee from the applicable government agency. The servicer is responsible for compliance with all government agency requirements and for obtaining the benefit of the applicable guarantee or insurance with respect to defaulted government-guaranteed or -insured mortgage loans. Any losses on these loans that are not recovered from the issuer or the guarantor are absorbed by the servicer. Therefore, FHLBank only has credit risk for these loans if the servicer fails to pay for losses not covered by the guarantee or insurance. Based on FHLBank's assessment of its servicers and the collateral backing the loans, the risk of loss was immaterial, consequently, no allowance for credit losses for government-guaranteed or -insured mortgage loans was recorded as of September 30, 2021 and December 31, 2020. Furthermore, none of these mortgage loans has been placed on non-accrual status because of the U.S. government guarantee or insurance on these loans and the contractual obligation of the loan servicer to repurchase the loans when certain criteria are met.

Finance, Loan and Lease Receivables, Held-for-investment, Allowance and Nonperforming Loans, Nonperforming Loans Policy

Conventional Mortgage Loans: Conventional loans are evaluated collectively when similar risk characteristics exist. Conventional loans that do not share risk characteristics with other pools are evaluated for expected credit losses on an individual basis. FHLBank determines its allowances for credit losses on conventional loans through analyses that include consideration of various loan portfolio and collateral-related characteristics, such as past performance, current conditions, and reasonable and supportable forecasts of expected economic conditions. FHLBank uses a model that discounts projected cash flows to estimate expected credit losses over the life of the loans. This model relies on a number of inputs, such as both current and forecasted property values and interest rates as well as historical borrower behavior experience. FHLBank also incorporates associated credit enhancements, as available, to determine its estimate of expected credit losses.

Certain conventional loans may be evaluated for credit losses using the practical expedient for collateral dependent assets. A mortgage loan is considered collateral dependent if repayment is expected to be provided by the sale of the underlying property, that is, if it is considered likely that the borrower will default. FHLBank may estimate the fair value of this collateral by applying an appropriate loss severity rate or using third party estimates or property valuation model(s). The expected credit loss of a collateral dependent mortgage loan is equal to the difference between the amortized cost of the loan and the estimated fair value of the collateral, less estimated selling costs. FHLBank records a direct charge-off of the loan balance if certain triggering criteria are met. Expected recoveries of prior charge-offs, if any, are included in the allowance for credit losses.

Government-Guaranteed or -Insured Mortgage Loans: FHLBank invests in fixed-rate mortgage loans that are insured or guaranteed by the Federal Housing Administration, the Department of Veterans Affairs, the Rural Housing Service of the Department of Agriculture, and/or the Department of Housing and Urban Development. The servicer provides and maintains insurance or a guarantee from the applicable government agency. The servicer is responsible for compliance with all government agency requirements and for obtaining the benefit of the applicable guarantee or insurance with respect to defaulted government-guaranteed or -insured mortgage loans. Any losses on these loans that are not recovered from the issuer or the guarantor are absorbed by the servicer. Therefore, FHLBank only has credit risk for these loans if the servicer fails to pay for losses not covered by the guarantee or insurance. Based on FHLBank's assessment of its servicers and the collateral backing the loans, the risk of loss was immaterial, consequently, no allowance for credit losses for government-guaranteed or -insured mortgage loans was recorded as of September 30, 2021 and December 31, 2020. Furthermore, none of these mortgage loans has been placed on non-accrual status because of the U.S. government guarantee or insurance on these loans and the contractual obligation of the loan servicer to repurchase the loans when certain criteria are met.

Derivatives, Offsetting Fair Value Amounts, Policy

FHLBank presents certain financial instruments, including derivatives, repurchase agreements and securities purchased under agreements to resell, on a net basis by clearing agent by Clearinghouse, or by counterparty, when it has met the netting requirements. For these financial instruments, FHLBank has elected to offset its asset and liability positions, as well as cash collateral received or pledged, including associated accrued interest.

FHLBank has analyzed the enforceability of offsetting rights incorporated in its cleared derivative transactions and determined that the exercise of those offsetting rights by a non-defaulting party under these transactions should be upheld under applicable law upon an event of default including a bankruptcy, insolvency, or similar proceeding involving the Clearinghouse or clearing agent, or both. Based on this analysis, FHLBank presents a net derivative receivable or payable for all of its transactions through a particular clearing agent with a particular Clearinghouse.

Fair Value Transfer, Policy

FHLBank reviews its fair value hierarchy classifications on a quarterly basis. Changes in the observability of the valuation inputs may result in a reclassification of certain assets or liabilities.

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2021

Investment Holdings [Line Items]

Trading Securities by Major Security Type

Trading securities by major security type as of September 30, 2021 and December 31, 2020 are summarized in Table 3.1 (in thousands):

Table 3.1

	Fair Value
	09/30/2021		12/31/2020
Non-mortgage-backed securities:
Certificates of deposit	$	200,009	$	—
U.S. Treasury obligations	1,176,148		1,298,518
GSE debentures	421,980		431,875
Non-mortgage-backed securities	1,798,137		1,730,393
Mortgage-backed securities:
GSE MBS	824,260		892,983
Mortgage-backed securities	824,260		892,983
TOTAL	$	2,622,397	$	2,623,376

Net Gains (Losses) on Trading Securities

Net gains (losses) on trading securities during the three and nine months ended September 30, 2021 and 2020 are shown in Table 3.2 (in thousands):

Table 3.2

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Net gains (losses) on trading securities held as of September 30, 2021	$	(15,807)	$	(5,226)	$	(51,126)	$	90,202
Net gains (losses) on trading securities sold or matured prior to September 30, 2021	(562)		(1,769)		(5,401)		2,567
NET GAINS (LOSSES) ON TRADING SECURITIES	$	(16,369)	$	(6,995)	$	(56,527)	$	92,769

Available-for-sale Securities by Major Security Type

Available-for-sale securities by major security type as of September 30, 2021 are summarized in Table 3.3 (in thousands). Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, and fair value hedge accounting adjustments, and excludes accrued interest receivable of $18,209,000 as of September 30, 2021.

Table 3.3

	09/30/2021
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
U.S. Treasury obligations	$	2,840,450	$	3,220	$	(1,071)	$	2,842,599
Non-mortgage-backed securities	2,840,450		3,220		(1,071)		2,842,599
Mortgage-backed securities:
U.S. obligation MBS	55,083		266		(7)		55,342
GSE MBS	4,806,855		74,196		(2,804)		4,878,247
Mortgage-backed securities	4,861,938		74,462		(2,811)		4,933,589
TOTAL	$	7,702,388	$	77,682	$	(3,882)	$	7,776,188

Available-for-sale securities by major security type as of December 31, 2020 are summarized in Table 3.4 (in thousands). Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, and fair value hedge accounting adjustments, and excludes accrued interest receivable of $26,977,000 as of December 31, 2020.

Table 3.4

	12/31/2020
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
U.S. Treasury obligations	$	3,541,411	$	4,931	$	(17)	$	3,546,325
Non-mortgage-backed securities	3,541,411		4,931		(17)		3,546,325
Mortgage-backed securities:
GSE MBS	3,154,703		44,724		(4,442)		3,194,985
Mortgage-backed securities	3,154,703		44,724		(4,442)		3,194,985
TOTAL	$	6,696,114	$	49,655	$	(4,459)	$	6,741,310

Available-for-sale securities with unrealized losses, fair value

Table 3.5 summarizes the available-for-sale securities with unrealized losses as of September 30, 2021 (in thousands). The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

Table 3.5

	09/30/2021
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Non-mortgage-backed securities:
U.S. Treasury obligations	$	592,578	$	(1,071)	$	—	$	—	$	592,578	$	(1,071)
Non-mortgage-backed securities	592,578		(1,071)		—		—		592,578		(1,071)
Mortgage-backed securities:
U.S. obligation MBS	—		—		6,589		(7)		6,589		(7)
GSE MBS	326,356		(1,071)		820,015		(1,733)		1,146,371		(2,804)
Mortgage-backed securities	326,356		(1,071)		826,604		(1,740)		1,152,960		(2,811)
TOTAL	$	918,934	$	(2,142)	$	826,604	$	(1,740)	$	1,745,538	$	(3,882)

Table 3.6 summarizes the available-for-sale securities with unrealized losses as of December 31, 2020 (in thousands). The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

Table 3.6

	12/31/2020
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Non-mortgage-backed securities:
U.S. Treasury obligations	$	250,436	$	(17)	$	—	$	—	$	250,436	$	(17)
Non-mortgage-backed securities	250,436		(17)		—		—		250,436		(17)
Mortgage-backed securities:
GSE MBS	—		—		363,724		(4,442)		363,724		(4,442)
Mortgage-backed securities	—		—		363,724		(4,442)		363,724		(4,442)
TOTAL	$	250,436	$	(17)	$	363,724	$	(4,442)	$	614,160	$	(4,459)

Net Gains (Losses) Realized on Sale of Available-For-Sale Securities

Table 3.8 presents details of the sales for the nine months ended September 30, 2020 (in thousands). There were no sales of available-for-sale securities during the nine months ended September 30, 2021 or during the three months ended September 30, 2021 and 2020.

Table 3.8

	Nine Months Ended
	09/30/2020
Proceeds from sale of available-for-sale securities	$	289,045
Gross gains on sale of available-for-sale securities	$	1,526
Gross losses on sale of available-for-sale securities	(3)
NET GAINS (LOSSES) ON SALE OF AVAILABLE-FOR-SALE SECURITIES	$	1,523

Held-To-Maturity Securities by Major Security Type

Held-to-maturity securities by major security type as of September 30, 2021 are summarized in Table 3.9 (in thousands). Carrying value equals amortized cost, which includes adjustments made to the cost basis of an investment for accretion and amortization, and excludes accrued interest receivable of $273,000 as of September 30, 2021.

Table 3.9

	09/30/2021
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
State or local housing agency obligations	$	78,095	$	—	$	(2,204)	$	75,891
Non-mortgage-backed securities	78,095		—		(2,204)		75,891
Mortgage-backed securities:
GSE MBS	355,191		6,781		(15)		361,957
Mortgage-backed securities	355,191		6,781		(15)		361,957
TOTAL	$	433,286	$	6,781	$	(2,219)	$	437,848

Held-to-maturity securities by major security type as of December 31, 2020 are summarized in Table 3.10 (in thousands). Carrying value equals amortized cost, which includes adjustments made to the cost basis of an investment for accretion and amortization, and excludes accrued interest receivable of $930,000 as of December 31, 2020.

Table 3.10

	12/31/2020
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Non-mortgage-backed securities:
State or local housing agency obligations	$	78,960	$	—	$	(3,290)	$	75,670
Non-mortgage-backed securities	78,960		—		(3,290)		75,670
Mortgage-backed securities:
U.S. obligation MBS	70,814		135		(59)		70,890
GSE MBS	2,597,218		10,208		(3,870)		2,603,556
Mortgage-backed securities	2,668,032		10,343		(3,929)		2,674,446
TOTAL	$	2,746,992	$	10,343	$	(7,219)	$	2,750,116

Available-for-sale Securities [Member]

Investment Holdings [Line Items]

Securities Classified By Contractual Maturity

The amortized cost and fair values of available-for-sale securities by contractual maturity as of September 30, 2021 and December 31, 2020 are shown in Table 3.7 (in thousands). Expected maturities of MBS will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

Table 3.7

	09/30/2021				12/31/2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Non-mortgage-backed securities:
Due in one year or less	$	958,778	$	959,599	$	1,767,608	$	1,768,588
Due after one year through five years	1,881,672		1,883,000		1,773,803		1,777,737
Due after five years through ten years	—		—		—		—
Due after ten years	—		—		—		—
Non-mortgage-backed securities	2,840,450		2,842,599		3,541,411		3,546,325
Mortgage-backed securities	4,861,938		4,933,589		3,154,703		3,194,985
TOTAL	$	7,702,388	$	7,776,188	$	6,696,114	$	6,741,310

Held-to-maturity Securities [Member]

Investment Holdings [Line Items]

Securities Classified By Contractual Maturity

The amortized cost and fair values of held-to-maturity securities by contractual maturity as of September 30, 2021 and December 31, 2020 are shown in Table 3.11 (in thousands). Expected maturities of certain securities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

Table 3.11

	09/30/2021				12/31/2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Non-mortgage-backed securities:
Due in one year or less	$	—	$	—	$	—	$	—
Due after one year through five years	—		—		—		—
Due after five years through ten years	48,095		47,047		48,960		47,280
Due after ten years	30,000		28,844		30,000		28,390
Non-mortgage-backed securities	78,095		75,891		78,960		75,670
Mortgage-backed securities	355,191		361,957		2,668,032		2,674,446
TOTAL	$	433,286	$	437,848	$	2,746,992	$	2,750,116

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Advances (Tables)

9 Months Ended

Sep. 30, 2021

Advances [Abstract]

Advances Table

Table 4.1 presents advances summarized by redemption term as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands). Carrying amounts exclude accrued interest receivable of $12,887,000 and $15,588,000 as of September 30, 2021 and December 31, 2020, respectively.

Table 4.1

	09/30/2021				12/31/2020
Redemption Term	Amount		Weighted Average Interest Rate		Amount		Weighted Average Interest Rate
Due in one year or less	$	12,278,130	0.36	%	$	12,540,970	0.45	%
Due after one year through two years	1,470,363		1.26		1,591,133		1.20
Due after two years through three years	1,927,315		1.20		1,268,307		1.73
Due after three years through four years	1,482,542		1.16		1,305,047		1.47
Due after four years through five years	988,112		1.31		1,033,221		1.40
Thereafter	3,150,229		1.81		3,233,763		1.90
Total par value	21,296,691		0.81	%	20,972,441		0.92	%
Discounts	(18,004)				(18,071)
Hedging adjustments	132,416				272,453
TOTAL	$	21,411,103			$	21,226,823

Table 4.2 presents advances summarized by redemption term or next call date (for callable advances) and by redemption term or next conversion date (for convertible advances) as of September 30, 2021 and December 31, 2020 (in thousands):

Table 4.2

	Redemption Term or Next Call Date				Redemption Term or Next Conversion Date
Redemption Term	09/30/2021		12/31/2020		09/30/2021		12/31/2020
Due in one year or less	$	13,641,513	$	14,271,213	$	13,362,130	$	13,563,370
Due after one year through two years	1,230,999		1,161,239		1,697,613		1,861,133
Due after two years through three years	1,459,489		981,503		2,009,815		1,489,057
Due after three years through four years	1,085,312		773,881		1,533,942		1,400,447
Due after four years through five years	985,276		796,495		987,762		1,008,871
Thereafter	2,894,102		2,988,110		1,705,429		1,649,563
TOTAL PAR VALUE	$	21,296,691	$	20,972,441	$	21,296,691	$	20,972,441

Interest Rate Payment Terms: Table 4.3 details additional interest rate payment terms for advances as of September 30, 2021 and December 31, 2020 (in thousands):

Table 4.3

Redemption Term	09/30/2021		12/31/2020
Fixed rate:
Due in one year or less	$	11,491,130	$	9,838,379
Due after one year	6,876,299		6,663,459
Total fixed rate	18,367,429		16,501,838
Variable rate:
Due in one year or less	787,000		2,702,591
Due after one year	2,142,262		1,768,012
Total variable rate	2,929,262		4,470,603
TOTAL PAR VALUE	$	21,296,691	$	20,972,441

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Mortgage Loans (Tables)

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Mortgage Loans Held For Portfolio

Table 5.1 presents information as of September 30, 2021 and December 31, 2020 on mortgage loans held for portfolio (in thousands). Mortgage loans held for portfolio excludes accrued interest receivable of $37,150,000 and $44,101,000 as of September 30, 2021 and December 31, 2020, respectively.

Table 5.1

	09/30/2021		12/31/2020
Real estate:
Fixed rate, medium-term1, single-family mortgages	$	1,410,868	$	1,419,725
Fixed rate, long-term, single-family mortgages	6,805,521		7,666,912
Total unpaid principal balance	8,216,389		9,086,637
Premiums	112,014		128,231
Discounts	(1,461)		(1,865)
Deferred loan costs, net	89		123
Other deferred fees	(16)		(25)
Hedging adjustments	(4,900)		(2,717)
Total before allowance for credit losses on mortgage loans	8,322,115		9,210,384
Allowance for credit losses on mortgage loans	(6,324)		(5,177)
MORTGAGE LOANS HELD FOR PORTFOLIO, NET	$	8,315,791	$	9,205,207

1    Medium-term defined as a term of 15 years or less at origination.

Table 5.2 presents information as of September 30, 2021 and December 31, 2020 on the outstanding unpaid principal balance of mortgage loans held for portfolio (in thousands):

Table 5.2

	09/30/2021		12/31/2020
Conventional loans	$	7,796,799	$	8,563,349
Government-guaranteed or -insured loans	419,590		523,288
TOTAL UNPAID PRINCIPAL BALANCE	$	8,216,389	$	9,086,637

Financing Receivable Credit Quality Indicators

Table 5.3 presents the payment status based on amortized cost as well as other delinquency statistics for FHLBank’s mortgage loans as of September 30, 2021 (dollar amounts in thousands):

Table 5.3

	09/30/2021
	Conventional Loans															Government Loans			Total
	Origination Year												Subtotal
	Prior to 2017		2017		2018		2019		2020		2021
Amortized Cost:1
Past due 30-59 days delinquent	$	12,982	$	4,695	$	3,744	$	8,063	$	2,667	$	2,022	$	34,173		$	7,994		$	42,167
Past due 60-89 days delinquent	4,658		985		1,615		1,754		984		—		9,996			1,854			11,850
Past due 90 days or more delinquent	11,312		4,867		8,222		17,477		648		546		43,072			16,215			59,287
Total past due	28,952		10,547		13,581		27,294		4,299		2,568		87,241			26,063			113,304
Total current loans	1,868,652		457,785		408,821		1,457,811		1,958,047		1,658,186		7,809,302			399,509			8,208,811
Total mortgage loans	$	1,897,604	$	468,332	$	422,402	$	1,485,105	$	1,962,346	$	1,660,754	$	7,896,543		$	425,572		$	8,322,115
Other delinquency statistics:
In process of foreclosure2													$	1,951		$	1,266		$	3,217
Serious delinquency rate3													0.6		%	3.8		%	0.7		%
Past due 90 days or more and still accruing interest													$	—		$	16,215		$	16,215
Loans on non-accrual status4,5													$	49,903		$	—		$	49,903

1    Excludes accrued interest receivable.

2    Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.

3    Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.

4    Loans on non-accrual status include $1,180,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

5    Includes $34,958,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

Table 5.4 presents the payment status based on recorded investment as well as other delinquency statistics for FHLBank’s mortgage loans as of December 31, 2020 (dollar amounts in thousands):

Table 5.4

	12/31/2020
	Conventional Loans															Government Loans			Total
	Origination Year												Subtotal
	Prior to 2016		2016		2017		2018		2019		2020
Amortized Cost:1
Past due 30-59 days delinquent	$	16,546	$	3,932	$	7,879	$	6,695	$	11,904	$	3,712	$	50,668		$	10,485		$	61,153
Past due 60-89 days delinquent	7,680		1,064		2,354		2,805		4,438		1,278		19,619			4,895			24,514
Past due 90 days or more delinquent	20,518		3,868		13,325		20,969		43,268		5,839		107,787			22,691			130,478
Total past due	44,744		8,864		23,558		30,469		59,610		10,829		178,074			38,071			216,145
Total current loans	1,942,655		632,604		677,871		665,791		2,303,031		2,279,995		8,501,947			492,292			8,994,239
Total mortgage loans	$	1,987,399	$	641,468	$	701,429	$	696,260	$	2,362,641	$	2,290,824	$	8,680,021		$	530,363		$	9,210,384
Other delinquency statistics:
In process of foreclosure2													$	1,785		$	1,563		$	3,348
Serious delinquency rate3													1.3		%	4.3		%	1.4		%
Past due 90 days or more and still accruing interest													$	—		$	22,691		$	22,691
Loans on non-accrual status4,5													$	117,584		$	—		$	117,584

1    Excludes accrued interest receivable.

2    Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.

3    Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.

4    Loans on non-accrual status include $1,311,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

5    Includes $69,192,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

Financing Receivable, Past Due

Table 5.3 presents the payment status based on amortized cost as well as other delinquency statistics for FHLBank’s mortgage loans as of September 30, 2021 (dollar amounts in thousands):

Table 5.3

	09/30/2021
	Conventional Loans															Government Loans			Total
	Origination Year												Subtotal
	Prior to 2017		2017		2018		2019		2020		2021
Amortized Cost:1
Past due 30-59 days delinquent	$	12,982	$	4,695	$	3,744	$	8,063	$	2,667	$	2,022	$	34,173		$	7,994		$	42,167
Past due 60-89 days delinquent	4,658		985		1,615		1,754		984		—		9,996			1,854			11,850
Past due 90 days or more delinquent	11,312		4,867		8,222		17,477		648		546		43,072			16,215			59,287
Total past due	28,952		10,547		13,581		27,294		4,299		2,568		87,241			26,063			113,304
Total current loans	1,868,652		457,785		408,821		1,457,811		1,958,047		1,658,186		7,809,302			399,509			8,208,811
Total mortgage loans	$	1,897,604	$	468,332	$	422,402	$	1,485,105	$	1,962,346	$	1,660,754	$	7,896,543		$	425,572		$	8,322,115
Other delinquency statistics:
In process of foreclosure2													$	1,951		$	1,266		$	3,217
Serious delinquency rate3													0.6		%	3.8		%	0.7		%
Past due 90 days or more and still accruing interest													$	—		$	16,215		$	16,215
Loans on non-accrual status4,5													$	49,903		$	—		$	49,903

1    Excludes accrued interest receivable.

2    Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.

3    Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.

4    Loans on non-accrual status include $1,180,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

5    Includes $34,958,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

Table 5.4 presents the payment status based on recorded investment as well as other delinquency statistics for FHLBank’s mortgage loans as of December 31, 2020 (dollar amounts in thousands):

Table 5.4

	12/31/2020
	Conventional Loans															Government Loans			Total
	Origination Year												Subtotal
	Prior to 2016		2016		2017		2018		2019		2020
Amortized Cost:1
Past due 30-59 days delinquent	$	16,546	$	3,932	$	7,879	$	6,695	$	11,904	$	3,712	$	50,668		$	10,485		$	61,153
Past due 60-89 days delinquent	7,680		1,064		2,354		2,805		4,438		1,278		19,619			4,895			24,514
Past due 90 days or more delinquent	20,518		3,868		13,325		20,969		43,268		5,839		107,787			22,691			130,478
Total past due	44,744		8,864		23,558		30,469		59,610		10,829		178,074			38,071			216,145
Total current loans	1,942,655		632,604		677,871		665,791		2,303,031		2,279,995		8,501,947			492,292			8,994,239
Total mortgage loans	$	1,987,399	$	641,468	$	701,429	$	696,260	$	2,362,641	$	2,290,824	$	8,680,021		$	530,363		$	9,210,384
Other delinquency statistics:
In process of foreclosure2													$	1,785		$	1,563		$	3,348
Serious delinquency rate3													1.3		%	4.3		%	1.4		%
Past due 90 days or more and still accruing interest													$	—		$	22,691		$	22,691
Loans on non-accrual status4,5													$	117,584		$	—		$	117,584

1    Excludes accrued interest receivable.

2    Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.

3    Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.

4    Loans on non-accrual status include $1,311,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

5    Includes $69,192,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

Financing Receivable, Allowance for Credit Loss

Table 5.5 presents a roll-forward of the allowance for credit losses on mortgage loans for the three and nine months ended September 30, 2021 and 2020.

Table 5.5

	Three Months Ended				Nine Months Ended
Conventional Loans	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Balance, beginning of the period	$	7,552	$	7,790	$	5,177	$	985
Adjustment for cumulative effect of accounting change	—		—		—		6,123
Net (charge-offs) recoveries	432		20		509		101
Provision (reversal) for credit losses	(1,660)		116		638		717
Balance, end of the period	$	6,324	$	7,926	$	6,324	$	7,926

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Derivatives And Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments, Gain (Loss) [Line Items]

Fair Value of Derivative Instruments

Table 6.1 presents outstanding notional amounts and fair values of the derivatives outstanding by type of derivative and by hedge designation as of September 30, 2021 and December 31, 2020 (in thousands). Total derivative assets and liabilities include the effect of netting adjustments and cash collateral.

Table 6.1

	09/30/2021						12/31/2020
	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate swaps	$	18,294,341	$	16,608	$	176,775	$	15,862,207	$	18,427	$	261,431
Total derivatives designated as hedging relationships	18,294,341		16,608		176,775		15,862,207		18,427		261,431
Derivatives not designated as hedging instruments:
Interest rate swaps	2,337,365		6		41,836		2,476,659		107		68,210
Interest rate caps/floors	477,500		321		—		602,500		141		—
Mortgage delivery commitments	162,060		5		1,005		133,456		654		4
Total derivatives not designated as hedging instruments	2,976,925		332		42,841		3,212,615		902		68,214
TOTAL	$	21,271,266	16,940		219,616		$	19,074,822	19,329		329,645
Netting adjustments and cash collateral1			117,739		(211,771)				129,539		(325,241)
DERIVATIVE ASSETS AND LIABILITIES			$	134,679	$	7,845			$	148,868	$	4,404

1    Amounts represent the application of the netting requirements that allow FHLBank to settle positive and negative positions and cash collateral, including accrued interest, held or placed with the same clearing agent and/or derivative counterparty. Cash collateral posted was $329,510,000 and $455,080,000 as of September 30, 2021 and December 31, 2020, respectively. Cash collateral received was $0 and $300,000 as of September 30, 2021 and December 31, 2020, respectively.

Net Gains or Losses on Derivatives and Hedging Activities

For the three months ended September 30, 2021 and 2020, FHLBank recorded net gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on FHLBank’s net interest income as presented in Table 6.2 (in thousands):

Table 6.2

	Three Months Ended
	09/30/2021
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	29,925	$	10,701	$	1,326	$	37,729
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	1,516	$	1,446	$	—	$	(403)
Hedged items2	(18,744)		(23,862)		—		6,982
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(17,228)	$	(22,416)	$	—	$	6,579

	Three Months Ended
	09/30/2020
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	38,848	$	9,588	$	5,674	$	67,142
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	10,848	$	9,424	$	(197)	$	(1,509)
Hedged items2	(28,115)		(40,444)		1,321		12,203
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(17,267)	$	(31,020)	$	1,124	$	10,694

1    Includes net interest settlements in interest income/expense.

2    Includes amortization/accretion on closed fair value relationships in interest income.

For the nine months ended September 30, 2021 and 2020, FHLBank recorded net gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on FHLBank’s net interest income as presented in Table 6.3 (in thousands):

Table 6.3

	Nine Months Ended
	09/30/2021
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	95,677	$	29,589	$	4,393	$	124,395
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	84,116	$	81,276	$	13	$	(11,167)
Hedged items2	(133,978)		(153,929)		(33)		33,424
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(49,862)	$	(72,653)	$	(20)	$	22,257

	Nine Months Ended
	9/30/2020
	Interest Income/Expense
	Advances		Available-for-sale Securities		Consolidated Obligation Discount Notes		Consolidated Obligation Bonds
Total amounts presented in the Statements of Income	$	230,000	$	43,753	$	120,385	$	310,628
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Derivatives1	$	(280,875)	$	(386,669)	$	18,350	$	45,856
Hedged items2	248,445		308,189		(112)		(16,663)
NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS	$	(32,430)	$	(78,480)	$	18,238	$	29,193

1    Includes net interest settlements in interest income/expense.

2    Includes amortization/accretion on closed fair value relationships in interest income.

Cumulative Basis Adjustments for Fair Value Hedges

Table 6.4 presents the cumulative basis adjustments on hedged items designated as fair value hedges and the related amortized cost of the hedged items as of September 30, 2021 and December 31, 2020 (in thousands):

Table 6.4

09/30/2021
Line Item in Statements of Condition of Hedged Item	Carrying Value of Hedged Asset/(Liability)1		Basis Adjustments for Active Hedging Relationships2		Basis Adjustments for Discontinued Hedging Relationships2		Cumulative Amount of Fair Value Hedging Basis Adjustments2
Advances	$	6,234,566	$	120,597	$	11,819	$	132,416
Available-for-sale securities	5,685,568		162,224		—		162,224
Consolidated obligation bonds	(6,683,518)		(1,230)		—		(1,230)
12/31/2020
Line Item in Statements of Condition of Hedged Item	Carrying Value of Hedged Asset/(Liability)1		Basis Adjustments for Active Hedging Relationships2		Basis Adjustments for Discontinued Hedging Relationships2		Cumulative Amount of Fair Value Hedging Basis Adjustments2
Advances	$	5,895,962	$	261,304	$	11,149	$	272,453
Available-for-sale securities	6,696,114		320,063		—		320,063
Consolidated discount notes	(174,855)		33		—		33
Consolidated obligation bonds	(3,791,848)		(34,654)		—		(34,654)

1    Includes only the portion of carrying value representing the hedged items in fair value hedging relationships. For available-for-sale securities, amortized cost is considered to be carrying value (i.e., the fair value adjustment recorded in AOCI is excluded).

2    Included in amortized cost of the hedged asset/liability.

Net Gains or Losses on Derivatives Not Designated as Hedging Instruments

Table 6.5 provides information regarding net gains (losses) on derivatives recorded in non-interest income (in thousands).

Table 6.5

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Derivatives not designated as hedging instruments:
Economic hedges:
Interest rate swaps	$	11,908	$	15,842	$	57,473	$	(97,218)
Interest rate caps/floors	252		(17)		180		(30)
Net interest settlements	(12,878)		(14,222)		(38,773)		(32,338)
Mortgage delivery commitments	(678)		423		(2,710)		(5,995)
NET GAINS (LOSSES) ON DERIVATIVES	$	(1,396)	$	2,026	$	16,170	$	(135,581)

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Deposits (Tables)

9 Months Ended

Sep. 30, 2021

Deposits [Abstract]

Deposits

Table 7.1 details the types of deposits held by FHLBank as of September 30, 2021 and December 31, 2020 (in thousands):

Table 7.1

	09/30/2021		12/31/2020
Interest-bearing:
Demand	$	345,197	$	308,604
Overnight	548,900		660,400
Term	2,750		2,750
Total interest-bearing	896,847		971,754
Non-interest-bearing:
Other	136,710		257,607
Total non-interest-bearing	136,710		257,607
TOTAL DEPOSITS	$	1,033,557	$	1,229,361

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Consolidated Obligations (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Consolidated Bonds Obligations Outstanding By Maturity

Table 8.1 presents FHLBank’s participation in consolidated obligation bonds outstanding as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):

Table 8.1

	09/30/2021				12/31/2020
Year of Contractual Maturity	Amount		Weighted Average Interest Rate		Amount		Weighted Average Interest Rate
Due in one year or less	$	18,762,650	0.17	%	$	27,921,650	0.31	%
Due after one year through two years	2,376,950		0.98		1,267,800		1.45
Due after two years through three years	1,479,650		1.08		1,216,600		1.91
Due after three years through four years	1,585,200		0.86		831,700		1.58
Due after four years through five years	2,288,500		0.82		836,100		1.22
Thereafter	4,972,050		1.60		5,518,800		1.60
Total par value	31,465,000		0.58	%	37,592,650		0.63	%
Premiums	26,544				38,219
Discounts	(2,842)				(3,303)
Concession fees	(12,152)				(14,143)
Hedging adjustments	1,230				34,654
TOTAL	$	31,477,780			$	37,648,077

Table 8.2 summarizes FHLBank’s participation in consolidated obligation bonds outstanding by year of maturity, or by the next call date for callable bonds as of September 30, 2021 and December 31, 2020 (in thousands):

Table 8.2

Year of Maturity or Next Call Date	09/30/2021		12/31/2020
Due in one year or less	$	27,109,150	$	34,299,650
Due after one year through two years	2,176,950		1,142,800
Due after two years through three years	934,150		815,100
Due after three years through four years	588,200		399,700
Due after four years through five years	234,500		391,100
Thereafter	422,050		544,300
TOTAL PAR VALUE	$	31,465,000	$	37,592,650

Consolidated Bonds by Interest-Rate Payment Type

Table 8.3 summarizes interest rate payment terms for consolidated obligation bonds as of September 30, 2021 and December 31, 2020 (in thousands):

Table 8.3

	09/30/2021		12/31/2020
Fixed rate	$	15,838,000	$	13,840,650
Simple variable rate	15,027,000		23,752,000
Step	600,000		—
TOTAL PAR VALUE	$	31,465,000	$	37,592,650

Consolidated Discount Notes Outstanding

Table 8.4 summarizes FHLBank’s participation in consolidated obligation discount notes, all of which are due within one year (dollar amounts in thousands):

Table 8.4

	Book Value		Par Value		Weighted Average Interest Rate1
September 30, 2021	$	10,277,237	$	10,277,770	0.04	%
December 31, 2020	$	10,882,417	$	10,883,608	0.08	%

1    Represents yield to maturity excluding concession fees.

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Assets and Liabilities Subject to Offsetting (Tables)

9 Months Ended

Sep. 30, 2021

Offsetting [Abstract]

Schedule of Offsetting Assets

Tables 9.1 and 9.2 present the fair value of financial assets, including the related collateral received from or pledged to clearing agents or counterparties, based on the terms of FHLBank’s master netting arrangements or similar agreements as of September 30, 2021 and December 31, 2020 (in thousands):

Table 9.1

09/30/2021
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Condition		Net Amounts of Assets Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative assets:
Uncleared derivatives	$	16,839	$	(16,356)	$	483	$	(5)	$	478
Cleared derivatives	101		134,095		134,196		—		134,196
Total derivative assets	16,940		117,739		134,679		(5)		134,674
Securities purchased under agreements to resell	2,100,000		—		2,100,000		(2,100,000)		—
TOTAL	$	2,116,940	$	117,739	$	2,234,679	$	(2,100,005)	$	134,674

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

Table 9.2

12/31/2020
Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Condition		Net Amounts of Assets Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative assets:
Uncleared derivatives	$	18,819	$	(18,031)	$	788	$	(654)	$	134
Cleared derivatives	510		147,570		148,080		—		148,080
Total derivative assets	19,329		129,539		148,868		(654)		148,214
Securities purchased under agreements to resell	2,600,000		—		2,600,000		(2,600,000)		—
TOTAL	$	2,619,329	$	129,539	$	2,748,868	$	(2,600,654)	$	148,214

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

Schedule of Offsetting Liabilities

Tables 9.3 and 9.4 present the fair value of financial liabilities, including the related collateral received from or pledged to counterparties, based on the terms of FHLBank’s master netting arrangements or similar agreements as of September 30, 2021 and December 31, 2020 (in thousands):

Table 9.3

09/30/2021
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Condition		Net Amounts of Liabilities Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative liabilities:
Uncleared derivatives	$	206,719	$	(198,874)	$	7,845	$	(1,005)	$	6,840
Cleared derivatives	12,897		(12,897)		—		—		—
Total derivative liabilities	219,616		(211,771)		7,845		(1,005)		6,840
TOTAL	$	219,616	$	(211,771)	$	7,845	$	(1,005)	$	6,840

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

Table 9.4

12/31/2020
Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Condition		Net Amounts of Liabilities Presented in the Statements of Condition		Gross Amounts Not Offset in the Statement of Condition1		Net Amount
Derivative liabilities:
Uncleared derivatives	$	324,491	$	(320,087)	$	4,404	$	(4)	$	4,400
Cleared derivatives	5,154		(5,154)		—		—		—
Total derivative liabilities	329,645		(325,241)		4,404		(4)		4,400
TOTAL	$	329,645	$	(325,241)	$	4,404	$	(4)	$	4,400

1    Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

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Capital (Tables)

9 Months Ended

Sep. 30, 2021

Stockholders' Equity Note [Abstract]

Regulatory Capital Requirements

Table 10.1 illustrates that FHLBank was in compliance with its regulatory capital requirements as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):

Table 10.1

	09/30/2021						12/31/2020
	Required			Actual			Required			Actual
Regulatory capital requirements:
Risk-based capital	$	402,398		$	2,278,219		$	192,927		$	2,213,868
Total regulatory capital-to-asset ratio	4.0		%	5.5		%	4.0		%	5.0		%
Total regulatory capital	$	1,820,649		$	2,500,649		$	2,103,668		$	2,627,083
Leverage capital ratio	5.0		%	8.0		%	5.0		%	7.1		%
Leverage capital	$	2,275,811		$	3,639,759		$	2,629,586		$	3,734,017

Mandatorily Redeemable Capital Stock By Contractual Year Of Repurchase

Table 10.2 presents a roll-forward of mandatorily redeemable capital stock for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Table 10.2

	Three Months Ended				Nine Months Ended
	09/30/2021		09/30/2020		09/30/2021		09/30/2020
Balance, beginning of period	$	1,543	$	2,308	$	1,624	$	2,415
Capital stock subject to mandatory redemption reclassified from equity during the period	460		620,561		584,512		1,627,899
Capital stock redemption cancellations reclassified to equity during the period	—		—		—		(100,647)
Redemption or repurchase of mandatorily redeemable capital stock during the period	(1,397)		(620,967)		(585,547)		(1,527,802)
Stock dividend classified as mandatorily redeemable capital stock during the period	1		12		18		49
Balance, end of period	$	607	$	1,914	$	607	$	1,914

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2021

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income Or Loss

Table 11.1 summarizes the changes in AOCI for the three months ended September 30, 2021 and 2020 (in thousands):

Table 11.1

	Three Months Ended
	Net Unrealized Gains (Losses) on Available-for-sale Securities		Defined Benefit Pension Plan		Total AOCI
Balance at June 30, 2020	$	(31,746)	$	(1,948)	$	(33,694)
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)	30,295				30,295
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan1			28		28
Net current period other comprehensive income (loss)	30,295		28		30,323
Balance at September 30, 2020	$	(1,451)	$	(1,920)	$	(3,371)
Balance at June 30, 2021	$	96,282	$	(2,738)	$	93,544
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)	(22,482)				(22,482)
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan1			92		92
Net current period other comprehensive income (loss)	(22,482)		92		(22,390)
Balance at September 30, 2021	$	73,800	$	(2,646)	$	71,154

1    Recorded in “Other” non-interest expense on the Statements of Income. Amount represents a debit (increase to other expenses).

Table 11.2 summarizes the changes in AOCI for the nine months ended September 30, 2021 and 2020 (in thousands):

Table 11.2

	Nine Months Ended
	Net Unrealized Gains (Losses) on Available-for-sale Securities		Defined Benefit Pension Plan		Total AOCI
Balance at December 31, 2019	$	26,788	$	(2,002)	$	24,786
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)	(26,716)				(26,716)
Reclassifications from other comprehensive income (loss) to net income:
Realized net (gains) losses included in net income1	(1,523)				(1,523)
Amortization of net losses - defined benefit pension plan2			82		82
Net current period other comprehensive income (loss)	(28,239)		82		(28,157)
Balance at September 30, 2020	$	(1,451)	$	(1,920)	$	(3,371)
Balance at December 31, 2020	$	45,196	$	(2,888)	$	42,308
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)3	28,604				28,604
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan2			242		242
Net current period other comprehensive income (loss)	28,604		242		28,846
Balance at September 30, 2021	$	73,800	$	(2,646)	$	71,154

1    Recorded in “Net gains (losses) on sale of available-for-sale securities” non-interest income on the Statements of Income. Amount represents a credit (increase to other income (loss)).

2    Recorded in “Other” non-interest expense on the Statements of Income. Amount represents a debit (increase to other expenses).

3    Includes $4,059,000 related to the transfer of securities from held-to-maturity to available-for-sale upon the adoption of reference rate reform guidance.

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Fair Values (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Summary

The carrying value, fair value and fair value hierarchy of FHLBank’s financial assets and liabilities as of September 30, 2021 and December 31, 2020 are summarized in Tables 12.1 and 12.2 (in thousands):

Table 12.1

	09/30/2021
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Assets:
Cash and due from banks	$	29,740	$	29,740	$	29,740	$	—	$	—	$	—
Interest-bearing deposits	569,222		569,222		—		569,222		—		—
Securities purchased under agreements to resell	2,100,000		2,100,000		—		2,100,000		—		—
Federal funds sold	1,958,000		1,958,000		—		1,958,000		—		—
Trading securities	2,622,397		2,622,397		—		2,622,397		—		—
Available-for-sale securities	7,776,188		7,776,188		—		7,776,188		—		—
Held-to-maturity securities	433,286		437,848		—		361,957		75,891		—
Advances	21,411,103		21,500,868		—		21,500,868		—		—
Mortgage loans held for portfolio, net of allowance	8,315,791		8,412,649		—		8,406,513		6,136		—
Accrued interest receivable	83,013		83,013		—		83,013		—		—
Derivative assets	134,679		134,679		—		16,940		—		117,739
Liabilities:
Deposits	1,033,557		1,033,557		—		1,033,557		—		—
Consolidated obligation discount notes	10,277,237		10,276,683		—		10,276,683		—		—
Consolidated obligation bonds	31,477,780		31,452,159		—		31,452,159		—		—
Mandatorily redeemable capital stock	607		607		607		—		—		—
Accrued interest payable	38,036		38,036		—		38,036		—		—
Derivative liabilities	7,845		7,845		—		219,616		—		(211,771)
Other Asset (Liability):
Industrial revenue bonds	35,000		36,572		—		36,572		—		—
Financing obligation payable	(35,000)		(36,572)		—		(36,572)		—		—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.

Table 12.2

	12/31/2020
	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Assets:
Cash and due from banks	$	4,570,415	$	4,570,415	$	4,570,415	$	—	$	—	$	—
Interest-bearing deposits	760,297		760,297		—		760,297		—		—
Securities purchased under agreements to resell	2,600,000		2,600,000		—		2,600,000		—		—
Federal funds sold	1,780,000		1,780,000		—		1,780,000		—		—
Trading securities	2,623,376		2,623,376		—		2,623,376		—		—
Available-for-sale securities	6,741,310		6,741,310		—		6,741,310		—		—
Held-to-maturity securities	2,746,992		2,750,116		—		2,674,446		75,670		—
Advances	21,226,823		21,360,450		—		21,360,450		—		—
Mortgage loans held for portfolio, net of allowance	9,205,207		9,454,112		—		9,441,474		12,638		—
Accrued interest receivable	97,718		97,718		—		97,718		—		—
Derivative assets	148,868		148,868		—		19,329		—		129,539
Liabilities:
Deposits	1,229,361		1,229,361		—		1,229,361		—		—
Consolidated obligation discount notes	10,882,417		10,882,601		—		10,882,601		—		—
Consolidated obligation bonds	37,648,077		37,835,135		—		37,835,135		—		—
Mandatorily redeemable capital stock	1,624		1,624		1,624		—		—		—
Accrued interest payable	45,575		45,575		—		45,575		—		—
Derivative liabilities	4,404		4,404		—		329,645		—		(325,241)
Other Asset (Liability):
Industrial revenue bonds	35,000		37,978		—		37,978		—		—
Financing obligation payable	(35,000)		(37,978)		—		(37,978)		—		—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.

Hierarchy Level for Financial Assets and Liabilities - Recurring and Nonrecurring

Tables 12.3 and 12.4 present, for each hierarchy level, FHLBank’s assets and liabilities that are measured at fair value on a recurring or nonrecurring basis on the Statements of Condition as of or for the periods ended September 30, 2021 and December 31, 2020 (in thousands).

Table 12.3

	09/30/2021
	Total		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Recurring fair value measurements - Assets:
Trading securities:
Certificates of deposit	$	200,009	$	—	$	200,009	$	—	$	—
U.S. Treasury obligations	1,176,148		—		1,176,148		—		—
GSE debentures	421,980		—		421,980		—		—
GSE MBS	824,260		—		824,260		—		—
Total trading securities	2,622,397		—		2,622,397		—		—
Available-for-sale securities:
U.S. Treasury obligations	2,842,599		—		2,842,599		—		—
U.S. obligation MBS	55,342		—		55,342		—		—
GSE MBS	4,878,247		—		4,878,247		—		—
Total available-for-sale securities	7,776,188		—		7,776,188		—		—
Derivative assets:
Interest-rate related	134,674		—		16,935		—		117,739
Mortgage delivery commitments	5		—		5		—		—
Total derivative assets	134,679		—		16,940		—		117,739
TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	10,533,264	$	—	$	10,415,525	$	—	$	117,739
Recurring fair value measurements - Liabilities:
Derivative liabilities:
Interest-rate related	$	6,840	$	—	$	218,611	$	—	$	(211,771)
Mortgage delivery commitments	1,005		—		1,005		—		—
Total derivative liabilities	7,845		—		219,616		—		(211,771)
TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES	$	7,845	$	—	$	219,616	$	—	$	(211,771)
Nonrecurring fair value measurements - Assets2:
Impaired mortgage loans	$	6,170	$	—	$	—	$	6,170	$	—
Real estate owned	52		—		—		52		—
TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	6,222	$	—	$	—	$	6,222	$	—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

2    Includes assets adjusted to fair value during the nine months ended September 30, 2021 and still outstanding as of September 30, 2021.

Table 12.4

	12/31/2020
	Total		Level 1		Level 2		Level 3		Netting Adjustment and Cash Collateral1
Recurring fair value measurements - Assets:
Trading securities:
U.S. Treasury obligations	$	1,298,518	$	—	$	1,298,518	$	—	$	—
GSE debentures	431,875		—		431,875		—		—
GSE MBS	892,983		—		892,983		—		—
Total trading securities	2,623,376		—		2,623,376		—		—
Available-for-sale securities:
U.S. Treasury obligations	3,546,325		—		3,546,325		—		—
GSE MBS	3,194,985		—		3,194,985		—		—
Total available-for-sale securities	6,741,310		—		6,741,310		—		—
Derivative assets:
Interest-rate related	148,214		—		18,675		—		129,539
Mortgage delivery commitments	654		—		654		—		—
Total derivative assets	148,868		—		19,329		—		129,539
TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	9,513,554	$	—	$	9,384,015	$	—	$	129,539
Recurring fair value measurements - Liabilities:
Derivative liabilities:
Interest-rate related	$	4,400	$	—	$	329,641	$	—	$	(325,241)
Mortgage delivery commitments	4		—		4		—		—
Total derivative liabilities	4,404		—		329,645		—		(325,241)
TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES	$	4,404	$	—	$	329,645	$	—	$	(325,241)
Nonrecurring fair value measurements - Assets2:
Impaired mortgage loans	$	12,668	$	—	$	—	$	12,668	$	—
Real estate owned	405		—		—		405		—
TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS	$	13,073	$	—	$	—	$	13,073	$	—

1    Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

2    Includes assets adjusted to fair value during the year ended December 31, 2020 and still outstanding as of December 31, 2020.

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Commitments And Contingencies (Tables)

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Off Balance Sheet Commitments

As of September 30, 2021 and December 31, 2020, off-balance sheet commitments are presented in Table 13.1 (in thousands):

Table 13.1

	09/30/2021						12/31/2020
Notional Amount	Expire Within One Year		Expire After One Year		Total		Expire Within One Year		Expire After One Year		Total
Standby letters of credit outstanding	$	4,473,000	$	2,483	$	4,475,483	$	5,436,165	$	4,251	$	5,440,416
Advance commitments outstanding	49,090		12,816		61,906		19,693		21,001		40,694
Principal commitments for standby bond purchase agreements	80,530		649,275		729,805		380,615		317,710		698,325
Commitments to fund or purchase mortgage loans	162,060		—		162,060		133,456		—		133,456
Commitments to issue consolidated bonds, at par	3,690,000		—		3,690,000		4,000		—		4,000
Commitments to issue consolidated discount notes, at par	1,000,000		—		1,000,000		—		—		—

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Transactions With Stockholders (Tables)

9 Months Ended

Sep. 30, 2021

Related Party Transactions, by Balance Sheet Grouping

Tables 14.1 and 14.2 present information on members that owned more than 10 percent of outstanding FHLBank regulatory capital stock as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands). None of the officers or directors of this member currently serve on FHLBank’s board of directors.

Table 14.1

09/30/2021
Member Name	State	Total Class A Stock Par Value		Percent of Total Class A		Total Class B Stock Par Value		Percent of Total Class B		Total Capital Stock Par Value		Percent of Total Capital Stock
MidFirst Bank	OK	$	6,800	3.1	%	$	357,791	30.8	%	$	364,591	26.4	%
TOTAL		$	6,800	3.1	%	$	357,791	30.8	%	$	364,591	26.4	%

Table 14.2

12/31/2020
Member Name	State	Total Class A Stock Par Value		Percent of Total Class A		Total Class B Stock Par Value		Percent of Total Class B		Total Capital Stock Par Value		Percent of Total Capital Stock
MidFirst Bank	OK	$	825	0.2	%	$	339,524	29.2	%	$	340,349	21.6	%
TOTAL		$	825	0.2	%	$	339,524	29.2	%	$	340,349	21.6	%

Advance and deposit balances with members that owned more than 10 percent of outstanding FHLBank regulatory capital stock as of September 30, 2021 and December 31, 2020 are summarized in Table 14.3 (dollar amounts in thousands).

Table 14.3

	09/30/2021				12/31/2020				09/30/2021				12/31/2020
Member Name	Outstanding Advances		Percent of Total		Outstanding Advances		Percent of Total		Outstanding Deposits		Percent of Total		Outstanding Deposits		Percent of Total
MidFirst Bank	$	7,770,000	36.5	%	$	7,460,000	35.6	%	$	511	—	%	$	713	0.1	%
TOTAL	$	7,770,000	36.5	%	$	7,460,000	35.6	%	$	511	—	%	$	713	0.1	%

Related Party Transactions, by Balance Sheet Grouping - Directors'

Table 14.4 presents information as of September 30, 2021 and December 31, 2020 for members that had an officer or director serving on FHLBank’s board of directors (dollar amounts in thousands). Information is only included for the period in which the officer or director served on FHLBank’s board of directors. Capital stock listed is regulatory capital stock, which includes mandatorily redeemable capital stock.

Table 14.4

	09/30/2021				12/31/2020
	Outstanding Amount		Percent of Total		Outstanding Amount		Percent of Total
Advances	$	156,291	0.7	%	$	161,021	0.8	%
Deposits	$	18,322	1.8	%	$	25,459	2.1	%
Class A Common Stock	$	5,236	2.4	%	$	10,298	2.5	%
Class B Common Stock	16,785		1.4		21,200		1.8
TOTAL CAPITAL STOCK	$	22,021	1.6	%	$	31,498	2.0	%

Schedule Of Related Party Transactions, Mortgage Loans Disclosure

Table 14.5 presents mortgage loans acquired during the three and nine months ended September 30, 2021 and 2020 for members that had an officer or director serving on FHLBank’s board of directors in 2021 or 2020 (dollar amounts in thousands). Information is only included for the period in which the officer or director served on FHLBank’s board of directors.

Table 14.5

	Three Months Ended								Nine Months Ended
	09/30/2021				09/30/2020				09/30/2021				09/30/2020
	Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
Mortgage loans acquired	$	13,563	2.2	%	$	9,091	2.5	%	$	32,534	1.9	%	$	95,901	4.0	%

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Investment Securities (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Marketable Securities [Line Items]
Interest-Bearing Deposits, Securities Purchased Under Agreements to Resell, and Federal Funds Sold, Percentage Unrated	32.00%
Financing Receivable, Practical Expedient, Accrued Interest Exclusion [true false]	true
Securities Purchased under Agreements to Resell, Allowance for Credit Loss	$ 0	$ 0
Debt Securities, Held-to-maturity, Transfer to Available for Sale, Amount	2,019,635
OCI, Debt Securities, Available-for-Sale, Transfer from Held-to-Maturity, Unrealized Gain (Loss)	4,059
Debt Securities, Held-to-maturity, Credit Loss Expense (Reversal)	0	0
Available-for-sale Securities [Member]
Marketable Securities [Line Items]
Provision for Other Credit Losses	0	0
Interest-bearing Deposits and Federal Funds Sold [Member]
Marketable Securities [Line Items]
Financing Receivable, Allowance for Credit Loss	0	0
Interest-bearing Deposits [Member]
Marketable Securities [Line Items]
Financial Asset, Amortized Cost, Accrued Interest, after Allowance for Credit Loss	51	80
Federal Funds Sold [Member]
Marketable Securities [Line Items]
Financial Asset, Amortized Cost, Accrued Interest, after Allowance for Credit Loss	3	3
Securities Borrowed or Purchased under Agreements to Resell [Member]
Marketable Securities [Line Items]
Financial Asset, Amortized Cost, Accrued Interest, after Allowance for Credit Loss	$ 5	$ 6

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Investment Securities Investment Securities (Trading Securities by Major Security Type) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt and Equity Securities, FV-NI [Line Items]
Trading securities	$ 2,622,397	$ 2,623,376
Certificates of Deposit [Member]
Debt and Equity Securities, FV-NI [Line Items]
Trading securities	200,009	0
U.S. Treasury obligations [Member]
Debt and Equity Securities, FV-NI [Line Items]
Trading securities	1,176,148	1,298,518
GSE Debenture [Member]
Debt and Equity Securities, FV-NI [Line Items]
Trading securities	421,980	431,875
Non-mortgage-backed securities [Member]
Debt and Equity Securities, FV-NI [Line Items]
Trading securities	1,798,137	1,730,393
GSE MBS [Member]
Debt and Equity Securities, FV-NI [Line Items]
Trading securities	824,260	892,983
Mortgage-backed securities [Member]
Debt and Equity Securities, FV-NI [Line Items]
Trading securities	$ 824,260	$ 892,983

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Investment Securities (Net Gains (Losses) on Trading Securities) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract]
Net gains (losses) on trading securities held as of current period end	$ (15,807)	$ (5,226)	$ (51,126)	$ 90,202
Net gains (losses) on trading securities sold or matured prior to current period end	(562)	(1,769)	(5,401)	2,567
NET GAINS (LOSSES) ON TRADING SECURITIES	$ (16,369)	$ (6,995)	$ (56,527)	$ 92,769

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Investment Securities (Available-For-Sale Securities by Major Security Type) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss	$ 18,209	$ 26,977
Debt Securities, Available-for-Sale, Excluded Accrued Interest from Amortized Cost [true false]	true
Amortized Cost	$ 7,702,388	6,696,114
Gross Unrecognized Gains	77,682	49,655
Gross Unrecognized Losses	(3,882)	(4,459)
Fair Value	7,776,188	6,741,310
U.S. Treasury obligations [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,840,450	3,541,411
Gross Unrecognized Gains	3,220	4,931
Gross Unrecognized Losses	(1,071)	(17)
Fair Value	2,842,599	3,546,325
Non-mortgage-backed securities [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,840,450	3,541,411
Gross Unrecognized Gains	3,220	4,931
Gross Unrecognized Losses	(1,071)	(17)
Fair Value	2,842,599	3,546,325
U.S. obligation MBS [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	55,083
Gross Unrecognized Gains	266
Gross Unrecognized Losses	(7)
Fair Value	55,342
GSE MBS [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	4,806,855	3,154,703
Gross Unrecognized Gains	74,196	44,724
Gross Unrecognized Losses	(2,804)	(4,442)
Fair Value	4,878,247	3,194,985
Mortgage-backed securities [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	4,861,938	3,154,703
Gross Unrecognized Gains	74,462	44,724
Gross Unrecognized Losses	(2,811)	(4,442)
Fair Value	$ 4,933,589	$ 3,194,985

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Investment Securities (Available-for-sale securities with unrealized losses, fair value) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	$ 918,934	$ 250,436
Less than 12 Months, Unrealized Losses	(2,142)	(17)
12 Months or More, Fair Value	826,604	363,724
12 Months or More, Unrealized Losses	(1,740)	(4,442)
TOTAL, Fair Value	1,745,538	614,160
TOTAL, Unrealized Losses	(3,882)	(4,459)
U.S. Treasury obligations [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	592,578	250,436
Less than 12 Months, Unrealized Losses	(1,071)	(17)
12 Months or More, Fair Value	0	0
12 Months or More, Unrealized Losses	0	0
TOTAL, Fair Value	592,578	250,436
TOTAL, Unrealized Losses	(1,071)	(17)
Non-mortgage-backed securities [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	592,578	250,436
Less than 12 Months, Unrealized Losses	(1,071)	(17)
12 Months or More, Fair Value	0	0
12 Months or More, Unrealized Losses	0	0
TOTAL, Fair Value	592,578	250,436
TOTAL, Unrealized Losses	(1,071)	(17)
U.S. obligation MBS [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	0
Less than 12 Months, Unrealized Losses	0
12 Months or More, Fair Value	6,589
12 Months or More, Unrealized Losses	(7)
TOTAL, Fair Value	6,589
TOTAL, Unrealized Losses	(7)
GSE MBS [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	326,356	0
Less than 12 Months, Unrealized Losses	(1,071)	0
12 Months or More, Fair Value	820,015	363,724
12 Months or More, Unrealized Losses	(1,733)	(4,442)
TOTAL, Fair Value	1,146,371	363,724
TOTAL, Unrealized Losses	(2,804)	(4,442)
Mortgage-backed securities [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 Months, Fair Value	326,356	0
Less than 12 Months, Unrealized Losses	(1,071)	0
12 Months or More, Fair Value	826,604	363,724
12 Months or More, Unrealized Losses	(1,740)	(4,442)
TOTAL, Fair Value	1,152,960	363,724
TOTAL, Unrealized Losses	$ (2,811)	$ (4,442)

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Investment Securities (Available-For-Sale Securities Classified By Contractual Maturities) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Available-for-sale Securities, Debt Maturities [Abstract]
Amortized Cost	$ 7,702,388	$ 6,696,114
Fair Value	7,776,188	6,741,310
Non-mortgage-backed securities [Member]
Available-for-sale Securities, Debt Maturities [Abstract]
Due in one year or less, Amortized Cost	958,778	1,767,608
Due after one year through five years, Amortized Cost	1,881,672	1,773,803
Due after five years through ten years, Amortized Cost	0	0
Due after ten years, Amortized Cost	0	0
Amortized Cost	2,840,450	3,541,411
Due in one year or less, Fair Value	959,599	1,768,588
Due after one year through five years, Fair Value	1,883,000	1,777,737
Due after five years though ten years, Fair Value	0	0
Due after ten years, Fair Value	0	0
Fair Value	2,842,599	3,546,325
Mortgage-backed securities [Member]
Available-for-sale Securities, Debt Maturities [Abstract]
Amortized Cost	4,861,938	3,154,703
Mortgage-backed securities, Amortized Cost	4,861,938	3,154,703
Mortgage-backed securities, Fair Value	4,933,589	3,194,985
Fair Value	$ 4,933,589	$ 3,194,985

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Investment Securities Investment Securities (Net Gains (Losses) Realized AFS Securities) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Debt Securities, Available-for-sale, Sale [Abstract]
Proceeds from sale of available-for-sale securities			$ 0	$ 289,045
Gross gains on sale of available-for-sale securities				1,526
Gross losses on sale of available-for-sale securities				(3)
NET GAINS (LOSSES) ON SALE OF AVAILABLE-FOR-SALE SECURITIES	$ 0	$ 0	$ 0	$ 1,523

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Investment Securities (Held-To-Maturity Securities by Major Security Type) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Schedule of Held-to-maturity Securities [Line Items]
Debt Securities, Held-to-Maturity, Accrued Interest, after Allowance for Credit Loss	$ 273	$ 930
Debt Securities, Held-to-Maturity, Excluded Accrued Interest [true false]	true
Amortized Cost	$ 433,286	2,746,992
Gross Unrecognized Gains	6,781	10,343
Gross Unrecognized Losses	(2,219)	(7,219)
Held-to-maturity, Fair Value	437,848	2,750,116
State or local housing agency obligations [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	78,095	78,960
Gross Unrecognized Gains	0	0
Gross Unrecognized Losses	(2,204)	(3,290)
Held-to-maturity, Fair Value	75,891	75,670
Non-mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	78,095	78,960
Gross Unrecognized Gains	0	0
Gross Unrecognized Losses	(2,204)	(3,290)
Held-to-maturity, Fair Value	75,891	75,670
U.S. obligation MBS [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost		70,814
Gross Unrecognized Gains		135
Gross Unrecognized Losses		(59)
Held-to-maturity, Fair Value		70,890
GSE MBS [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	355,191	2,597,218
Gross Unrecognized Gains	6,781	10,208
Gross Unrecognized Losses	(15)	(3,870)
Held-to-maturity, Fair Value	361,957	2,603,556
Mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	355,191	2,668,032
Gross Unrecognized Gains	6,781	10,343
Gross Unrecognized Losses	(15)	(3,929)
Held-to-maturity, Fair Value	$ 361,957	$ 2,674,446

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Investment Securities (Held-To-Maturity Securities Classified By Contractual Maturity) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Securities, Held-to-maturity, Maturity, Amortized Cost, Rolling Maturity [Abstract]
Amortized Cost	$ 433,286	$ 2,746,992
Debt Securities, Held-to-maturity, Maturity, Fair Value, Rolling Maturity [Abstract]
Fair Value	437,848	2,750,116
Non-mortgage-backed securities [Member]
Debt Securities, Held-to-maturity, Maturity, Amortized Cost, Rolling Maturity [Abstract]
Amortized Cost	78,095	78,960
Debt Securities, Held-to-maturity, Maturity, Fair Value, Rolling Maturity [Abstract]
Due in one year or less, Fair Value	0	0
Due after one year through five years, Fair Value	0	0
Due after five years through ten years, Fair Value	47,047	47,280
Due after ten years, Fair Value	28,844	28,390
Fair Value	75,891	75,670
Non-mortgage-backed securities [Member] | Amortized Cost Before Allowance For Credit Losses And Non-Credit Other-Than-Temporary Impairment [Member]
Debt Securities, Held-to-maturity, Maturity, Amortized Cost, Rolling Maturity [Abstract]
Due in one year or less, Amortized Cost	0	0
Due after one year through five years, Amortized Cost	0	0
Due after five years through ten years, Amortized Cost	48,095	48,960
Due after ten years, Amortized Cost	30,000	30,000
Mortgage-backed securities [Member]
Debt Securities, Held-to-maturity, Maturity, Amortized Cost, Rolling Maturity [Abstract]
Amortized Cost	355,191	2,668,032
Debt Securities, Held-to-maturity, Maturity, Fair Value, Rolling Maturity [Abstract]
Fair Value	$ 361,957	$ 2,674,446

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Advances (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Advances, Par Value	$ 21,296,691	$ 20,972,441
Minimum [Member]
Federal Home Loan Bank, Advances [Line Items]
FHLB advances, outstanding interest rate	0.11%	0.11%
Maximum [Member]
Federal Home Loan Bank, Advances [Line Items]
FHLB advances, outstanding interest rate	7.20%	7.20%
Federal Home Loan Bank Advances Receivable [Member]
Federal Home Loan Bank, Advances [Line Items]
Financing Receivable, Nonaccrual	$ 0	$ 0
Impaired Financing Receivable, Unpaid Principal Balance	0	0
Mortgage Loans, Troubled Debt Restructuring	0	0
Financing Receivable, Allowance for Credit Loss	0	0
FinancialAssetPastDue [Member]
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Advances, Par Value	0	$ 0
Federal Home Loan Bank, Advances, Convertible Option [Member]
Federal Home Loan Bank, Advances [Line Items]
Federal Home Loan Bank, Advances, Par Value	$ 1,497,150

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Advances (Advances Redemption Terms) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Amount
Due in one year or less	$ 12,278,130	$ 12,540,970
Due after one year through two years	1,470,363	1,591,133
Due after two years through three years	1,927,315	1,268,307
Due after three years through four years	1,482,542	1,305,047
Due after four years through five years	988,112	1,033,221
Thereafter	3,150,229	3,233,763
TOTAL PAR VALUE	21,296,691	20,972,441
Discounts	(18,004)	(18,071)
Hedging adjustments	132,416	272,453
TOTAL	$ 21,411,103	$ 21,226,823
Weighted Average Interest Rate
Due in one year or less	0.36%	0.45%
Due after one year through two years	1.26%	1.20%
Due after two years through three years	1.20%	1.73%
Due after three years through four years	1.16%	1.47%
Due after four years through five years	1.31%	1.40%
Thereafter	1.81%	1.90%
Total par value	0.81%	0.92%
Federal Home Loan Bank Advances Receivable [Member]
Federal Home Loan Bank, Advances [Line Items]
Advances, Accrued Interest, after Allowance for Credit Loss	$ 12,887	$ 15,588

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Advances (Advances by Year of Redemption Term, Next Call Date, or Next Convert Date) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Redemption Term, Year of Redemption Term or Next Call Date
Due in one year or less	$ 13,641,513	$ 14,271,213
Due after one year through two years	1,230,999	1,161,239
Due after two years through three years	1,459,489	981,503
Due after three years through four years	1,085,312	773,881
Due after four years through five years	985,276	796,495
Thereafter	2,894,102	2,988,110
TOTAL PAR VALUE	21,296,691	20,972,441
Redemption Term, Year of Redemption Term or Next Conversion Date
Due in one year or less	13,362,130	13,563,370
Due after one year through two years	1,697,613	1,861,133
Due after two years through three years	2,009,815	1,489,057
Due after three years through four years	1,533,942	1,400,447
Due after four years through five years	987,762	1,008,871
Thereafter	1,705,429	1,649,563
TOTAL PAR VALUE	$ 21,296,691	$ 20,972,441

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Advances (Advances by Interest Rate Payment Terms) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fixed rate:
Due in one year or less	$ 11,491,130	$ 9,838,379
Due after one year	6,876,299	6,663,459
Total fixed rate	18,367,429	16,501,838
Variable rate:
Due in one year or less	787,000	2,702,591
Due after one year	2,142,262	1,768,012
Total variable rate	2,929,262	4,470,603
TOTAL PAR VALUE	$ 21,296,691	$ 20,972,441

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Mortgage Loans Mortgage Loans (Narrative) (Details) - USD ($)	Sep. 30, 2021		Jun. 30, 2021	Dec. 31, 2020		Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]
Total unpaid principal balance	$ 8,216,389,000			$ 9,086,637,000
Mortgage Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans on non-accrual status	49,903,000	[1],[2]		117,584,000	[3],[4]
Conventional Mortgage Loan [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans on non-accrual status	49,903,000	[1],[2]		117,584,000	[3],[4]
Total unpaid principal balance	7,796,799,000			8,563,349,000
Financing Receivable, Allowance for Credit Loss	6,324,000		$ 7,552,000	5,177,000		$ 7,926,000	$ 7,790,000	$ 985,000
US Government Agency Insured Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Loans on non-accrual status	0
Financing Receivable, Allowance for Credit Loss	$ 0			$ 0

[1] Includes $34,958,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

[2] Loans on non-accrual status include $1,180,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

[3] Includes $69,192,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

[4] Loans on non-accrual status include $1,311,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

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Mortgage Loans (Mortgage Loans Held For Portfolio) (Details) - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
Loans and Leases Receivable Disclosure [Line Items]
Total unpaid principal balance		$ 8,216,389	$ 9,086,637
Premiums		112,014	128,231
Discounts		(1,461)	(1,865)
Deferred loan costs, net		89	123
Other deferred fees		(16)	(25)
Hedging adjustments		(4,900)	(2,717)
Total before allowance for credit losses on mortgage loans		8,322,115	9,210,384
Allowance for credit losses on mortgage loans		(6,324)	(5,177)
MORTGAGE LOANS HELD FOR PORTFOLIO, NET		8,315,791	9,205,207
Mortgage Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Financing Receivable, Accrued Interest, after Allowance for Credit Loss		37,150	44,101
Total before allowance for credit losses on mortgage loans	[1]	8,322,115	9,210,384
Fixed rates, medium-term [Member] | Single-family mortgage [Member]
Loans and Leases Receivable Disclosure [Line Items]
Total unpaid principal balance	[2]	1,410,868	1,419,725
Fixed rates, long-term [Member] | Single-family mortgage [Member]
Loans and Leases Receivable Disclosure [Line Items]
Total unpaid principal balance		$ 6,805,521	$ 7,666,912

[1] Excludes accrued interest receivable.

[2] Medium-term defined as a term of 15 years or less at origination.

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Mortgage Loans (Mortgage Loans Held For Portfolio by Collateral or Guarantee Type) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Loans and Leases Receivable Disclosure [Line Items]
Total unpaid principal balance	$ 8,216,389	$ 9,086,637
Government Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Total unpaid principal balance	419,590	523,288
Conventional Loans [Member]
Loans and Leases Receivable Disclosure [Line Items]
Total unpaid principal balance	$ 7,796,799	$ 8,563,349

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Mortgage Loans Mortgage Loans (Credit Quality Indicator for Conventional Mortgage Loans) (Details) - USD ($) $ in Thousands		Sep. 30, 2021		Dec. 31, 2020
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans		$ 8,322,115		$ 9,210,384
Mortgage Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	8,322,115		9,210,384
In process of foreclosure, included above	[2]	3,217		3,348
Past due 90 days or more and still accruing interest		16,215		22,691
Loans on non-accrual status		49,903	[3],[4]	117,584	[5],[6]
Mortgage Loans, Troubled Debt Restructuring		1,180		1,311
Mortgage Loans [Member] | Total past due
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	113,304		216,145
Mortgage Loans [Member] | Total current loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	8,208,811		8,994,239
Conventional Mortgage Loan [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Originated, More than Five Years before Current Year	[1]	1,897,604		1,987,399
Originated, Four Years before Current Year	[1]	468,332		641,468
Originated, Three Years before Current Year	[1]	422,402		701,429
Originated, Two Years before Current Year	[1]	1,485,105		696,260
Originated, Fiscal Year before Current Year	[1]	1,962,346		2,362,641
Originated, Current Year	[1]	1,660,754		2,290,824
Total before allowance for credit losses on mortgage loans	[1]	7,896,543		8,680,021
In process of foreclosure, included above	[2]	1,951		1,785
Past due 90 days or more and still accruing interest		0		0
Loans on non-accrual status		49,903	[3],[4]	117,584	[5],[6]
Financing Receivable, Nonaccrual, No Allowance		34,958		69,192
Conventional Mortgage Loan [Member] | Total past due
Financing Receivable, Credit Quality Indicator [Line Items]
Originated, More than Five Years before Current Year	[1]	28,952		44,744
Originated, Four Years before Current Year	[1]	10,547		8,864
Originated, Three Years before Current Year	[1]	13,581		23,558
Originated, Two Years before Current Year	[1]	27,294		30,469
Originated, Fiscal Year before Current Year	[1]	4,299		59,610
Originated, Current Year	[1]	2,568		10,829
Total before allowance for credit losses on mortgage loans	[1]	87,241		178,074
Conventional Mortgage Loan [Member] | Total current loans
Financing Receivable, Credit Quality Indicator [Line Items]
Originated, More than Five Years before Current Year	[1]	1,868,652		1,942,655
Originated, Four Years before Current Year	[1]	457,785		632,604
Originated, Three Years before Current Year	[1]	408,821		677,871
Originated, Two Years before Current Year	[1]	1,457,811		665,791
Originated, Fiscal Year before Current Year	[1]	1,958,047		2,303,031
Originated, Current Year	[1]	1,658,186		2,279,995
Total before allowance for credit losses on mortgage loans	[1]	7,809,302		8,501,947
Government Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	425,572		530,363
In process of foreclosure, included above	[2]	1,266		1,563
Past due 90 days or more and still accruing interest		16,215		22,691
Loans on non-accrual status		0	[3],[4]	0	[5],[6]
Government Loans [Member] | Total past due
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	26,063		38,071
Government Loans [Member] | Total current loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	399,509		492,292
Financial Asset, 30 to 59 Days Past Due [Member] | Mortgage Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	42,167		61,153
Financial Asset, 30 to 59 Days Past Due [Member] | Conventional Mortgage Loan [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Originated, More than Five Years before Current Year	[1]	12,982		16,546
Originated, Four Years before Current Year	[1]	4,695		3,932
Originated, Three Years before Current Year	[1]	3,744		7,879
Originated, Two Years before Current Year	[1]	8,063		6,695
Originated, Fiscal Year before Current Year	[1]	2,667		11,904
Originated, Current Year	[1]	2,022		3,712
Total before allowance for credit losses on mortgage loans	[1]	34,173		50,668
Financial Asset, 30 to 59 Days Past Due [Member] | Government Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	7,994		10,485
Financial Asset, 60 to 89 Days Past Due [Member] | Mortgage Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	11,850		24,514
Financial Asset, 60 to 89 Days Past Due [Member] | Conventional Mortgage Loan [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Originated, More than Five Years before Current Year	[1]	4,658		7,680
Originated, Four Years before Current Year	[1]	985		1,064
Originated, Three Years before Current Year	[1]	1,615		2,354
Originated, Two Years before Current Year	[1]	1,754		2,805
Originated, Fiscal Year before Current Year	[1]	984		4,438
Originated, Current Year	[1]	0		1,278
Total before allowance for credit losses on mortgage loans	[1]	9,996		19,619
Financial Asset, 60 to 89 Days Past Due [Member] | Government Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	1,854		4,895
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Mortgage Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	$ 59,287		$ 130,478
Serious delinquency rate	[7]	0.70%		1.40%
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Conventional Mortgage Loan [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Originated, More than Five Years before Current Year	[1]	$ 11,312		$ 20,518
Originated, Four Years before Current Year	[1]	4,867		3,868
Originated, Three Years before Current Year	[1]	8,222		13,325
Originated, Two Years before Current Year	[1]	17,477		20,969
Originated, Fiscal Year before Current Year	[1]	648		43,268
Originated, Current Year	[1]	546		5,839
Total before allowance for credit losses on mortgage loans	[1]	$ 43,072		$ 107,787
Serious delinquency rate	[7]	0.60%		1.30%
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Government Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total before allowance for credit losses on mortgage loans	[1]	$ 16,215		$ 22,691
Serious delinquency rate	[7]	3.80%		4.30%

[1] Excludes accrued interest receivable.

[2] Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.

[3] Includes $34,958,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

[4] Loans on non-accrual status include $1,180,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

[5] Includes $69,192,000 of conventional mortgage loans on non-accrual status that did not have an associated allowance for credit losses.

[6] Loans on non-accrual status include $1,311,000 of troubled debt restructurings. Troubled debt restructurings are restructurings in which FHLBank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

[7] Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.

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Mortgage Loans (Rollforward of Allowance for Credit Losses on Conventional Mortgage Loans) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Allowance for credit losses:
Provision (reversal) for credit losses	$ (1,660)	$ 116	$ 638	$ 717
Conventional Loans [Member]
Allowance for credit losses:
Balance, beginning of the period	7,552	7,790	5,177	985
Adjustment for cumulative effect of accounting change	0	0	0	6,123
Net (charge-offs) recoveries	432	20	509	101
Provision (reversal) for credit losses	(1,660)	116	638	717
Balance, end of the period	$ 6,324	$ 7,926	$ 6,324	$ 7,926

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Derivatives And Hedging Activities (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Counterparty One [Member]
Derivative [Line Items]
Maximum credit risk applicable to a single counterparty (at period end)	$ 0	$ 247

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Derivatives And Hedging Activities (Fair Values of Derivatives Instruments) (Details) - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount		$ 21,271,266	$ 19,074,822
TOTAL, Derivative Assets		16,940	19,329
TOTAL, Derivative Liabilities		219,616	329,645
Netting adjustments and cash collateral, Derivative Assets	[1],[2]	117,739	129,539
Netting adjustments and cash collateral, Derivative Liabilities	[1],[2]	(211,771)	(325,241)
DERIVATIVE ASSETS		134,679	148,868
DERIVATIVE LIABILITIES		7,845	4,404
Cash collateral posted		329,510	455,080
Cash collateral received		0	300
Derivatives designated as hedging instruments: [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount		18,294,341	15,862,207
TOTAL, Derivative Assets		16,608	18,427
TOTAL, Derivative Liabilities		176,775	261,431
Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount		2,976,925	3,212,615
TOTAL, Derivative Assets		332	902
TOTAL, Derivative Liabilities		42,841	68,214
Interest rate swaps [Member] | Derivatives designated as hedging instruments: [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount		18,294,341	15,862,207
TOTAL, Derivative Assets		16,608	18,427
TOTAL, Derivative Liabilities		176,775	261,431
Interest rate swaps [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount		2,337,365	2,476,659
TOTAL, Derivative Assets		6	107
TOTAL, Derivative Liabilities		41,836	68,210
Interest rate caps/floors [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount		477,500	602,500
TOTAL, Derivative Assets		321	141
TOTAL, Derivative Liabilities		0	0
Mortgage delivery commitments [Member] | Not Designated as Hedging Instrument [Member] | Mortgage Receivable [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount		162,060	133,456
TOTAL, Derivative Assets		5	654
TOTAL, Derivative Liabilities		$ 1,005	$ 4

[1] Amounts represent the application of the netting requirements that allow FHLBank to settle positive and negative positions and cash collateral, including accrued interest, held or placed with the same clearing agent and/or derivative counterparty. Cash collateral posted was $329,510,000 and $455,080,000 as of September 30, 2021 and December 31, 2020, respectively. Cash collateral received was $0 and $300,000 as of September 30, 2021 and December 31, 2020, respectively.

[2] Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

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Derivatives And Hedging Activities (Net Gains or Losses on Derivatives and Hedging Activities) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts presented in the Statements of Income, Advances		$ 29,925	$ 38,848	$ 95,677	$ 230,000
Total amounts presented in the Statements of Income, Available-for-sale Securities		10,701	9,588	29,589	43,753
Total amounts presented in the Statements of Income, Consolidated Obligations Discount Notes		1,326	5,674	4,393	120,385
Total amounts presented in the Statements of Income, Consolidated Obligations Bonds		37,729	67,142	124,395	310,628
Interest Rate Contract [Member] | Advances [Member] | Interest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives1	[1]	1,516	10,848	84,116	(280,875)
Hedged items2	[2]	(18,744)	(28,115)	(133,978)	248,445
NET GAINS (LOSSES) OF FAIR VALUE HEDGING RELATIONSHIPS (INTEREST INCOME/EXPENSE)		(17,228)	(17,267)	(49,862)	(32,430)
Interest Rate Contract [Member] | Available-for-sale Securities [Member] | Interest Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives1	[1]	1,446	9,424	81,276	(386,669)
Hedged items2	[2]	(23,862)	(40,444)	(153,929)	308,189
NET GAINS (LOSSES) OF FAIR VALUE HEDGING RELATIONSHIPS (INTEREST INCOME/EXPENSE)		(22,416)	(31,020)	(72,653)	(78,480)
Interest Rate Contract [Member] | Consolidated Obligations Discount Notes [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives1	[1]	0	(197)	13	18,350
Hedged items2	[2]	0	1,321	(33)	(112)
NET GAINS (LOSSES) OF FAIR VALUE HEDGING RELATIONSHIPS (INTEREST INCOME/EXPENSE)		0	1,124	(20)	18,238
Interest Rate Contract [Member] | Consolidated Obligations Bonds [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives1	[1]	(403)	(1,509)	(11,167)	45,856
Hedged items2	[2]	6,982	12,203	33,424	(16,663)
NET GAINS (LOSSES) OF FAIR VALUE HEDGING RELATIONSHIPS (INTEREST INCOME/EXPENSE)		$ 6,579	$ 10,694	$ 22,257	$ 29,193

[1] Includes net interest settlements in interest income/expense.

[2] Includes amortization/accretion on closed fair value relationships in interest income.

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Derivatives And Hedging Activities Derivatives And Hedging Activities (Cumulative Basis Adjustments for Fair Value Hedges) (Details) - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
Advances [Member]
Derivatives, Fair Value [Line Items]
Carrying Value of Hedged Asset, Fair Value Hedge1	[1]	$ 6,234,566	$ 5,895,962
Asset, Basis Adjustments for Active Hedging Relationships2	[2]	120,597	261,304
Hedged Asset, Basis Adjustments for Discontinued Hedging Relationships2	[2]	11,819	11,149
Hedged Asset, Cumulative Amount of Fair Value Hedging Basis Adjustments2	[2]	132,416	272,453
Available-for-sale Securities [Member]
Derivatives, Fair Value [Line Items]
Carrying Value of Hedged Asset, Fair Value Hedge1	[1]	5,685,568	6,696,114
Asset, Basis Adjustments for Active Hedging Relationships2	[2]	162,224	320,063
Hedged Asset, Basis Adjustments for Discontinued Hedging Relationships2	[2]	0	0
Hedged Asset, Cumulative Amount of Fair Value Hedging Basis Adjustments2	[2]	162,224	320,063
Consolidated Obligation Discount Notes [Member]
Derivatives, Fair Value [Line Items]
Carrying Value of Hedged Liability, Fair Value Hedge1	[1]		(174,855)
Liability, Basis Adjustments for Active Hedging Relationships2	[2]		33
Hedged Liability, Basis Adjustments for Discontinued Hedging Relationships2	[2]		0
Hedged Liability, Cumulative Amount of Fair Value Hedging Basis Adjustments2	[2]		33
Consolidated Obligation Bonds [Member]
Derivatives, Fair Value [Line Items]
Carrying Value of Hedged Liability, Fair Value Hedge1	[1]	(6,683,518)	(3,791,848)
Liability, Basis Adjustments for Active Hedging Relationships2	[2]	(1,230)	(34,654)
Hedged Liability, Basis Adjustments for Discontinued Hedging Relationships2	[2]	0	0
Hedged Liability, Cumulative Amount of Fair Value Hedging Basis Adjustments2	[2]	$ (1,230)	$ (34,654)

[1] Includes only the portion of carrying value representing the hedged items in fair value hedging relationships. For available-for-sale securities, amortized cost is considered to be carrying value (i.e., the fair value adjustment recorded in AOCI is excluded).

[2] Included in amortized cost of the hedged asset/liability.

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Derivatives And Hedging Activities (Net Gains Or Losses On Derivatives And Hedging Activities in Non-Interest Income) (Details) - Gain (Loss) on Derivative Instruments [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]
NET GAINS (LOSSES) ON DERIVATIVES	$ (1,396)	$ 2,026	$ 16,170	$ (135,581)
Interest rate swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
NET GAINS (LOSSES) ON DERIVATIVES	11,908	15,842	57,473	(97,218)
Interest rate caps/floors [Member]
Derivative Instruments, Gain (Loss) [Line Items]
NET GAINS (LOSSES) ON DERIVATIVES	252	(17)	180	(30)
Net Interest Settlements [Member]
Derivative Instruments, Gain (Loss) [Line Items]
NET GAINS (LOSSES) ON DERIVATIVES	(12,878)	(14,222)	(38,773)	(32,338)
Mortgage delivery commitments [Member] | Mortgage Receivable [Member]
Derivative Instruments, Gain (Loss) [Line Items]
NET GAINS (LOSSES) ON DERIVATIVES	$ (678)	$ 423	$ (2,710)	$ (5,995)

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Deposits (Types Of Deposits) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Interest-bearing:
Demand	$ 345,197	$ 308,604
Overnight	548,900	660,400
Term Deposits	2,750	2,750
Total interest-bearing	896,847	971,754
Non-interest-bearing:
Other	136,710	257,607
Total non-interest-bearing	136,710	257,607
TOTAL DEPOSITS	$ 1,033,557	$ 1,229,361

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Consolidated Obligations (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Par value	$ 31,465,000	$ 37,592,650
Federal Home Loan Bank, Consolidated Obligations, Callable Option [Member]
Debt Instrument [Line Items]
Par value	$ 8,354,000	$ 6,878,000

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Consolidated Obligations (Consolidated Bond Obligations Outstanding By Contractual Maturity) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Due in one year or less	$ 18,762,650	$ 27,921,650
Due in one year or less, Weighted Average Interest Rate	0.17%	0.31%
Due after one year through two years	$ 2,376,950	$ 1,267,800
Due after one year through two years, Weighted Average Interest Rate	0.98%	1.45%
Due after two years through three years	$ 1,479,650	$ 1,216,600
Due after two years through three years, Weighted Average Interest Rate	1.08%	1.91%
Due after three years through four years	$ 1,585,200	$ 831,700
Due after three years through four years, Weighted Average Interest Rate	0.86%	1.58%
Due after four years through five years	$ 2,288,500	$ 836,100
Due after four years through five years, Weighted Average Interest Rate	0.82%	1.22%
Thereafter	$ 4,972,050	$ 5,518,800
Thereafter, Weighted Average Interest Rate	1.60%	1.60%
Total par value	$ 31,465,000	$ 37,592,650
Total par value, Weighted Average Interest Rate	0.58%	0.63%
Premium	$ 26,544	$ 38,219
Discounts	(2,842)	(3,303)
Concession fees	(12,152)	(14,143)
Hedging adjustments	1,230	34,654
TOTAL	$ 31,477,780	$ 37,648,077

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Consolidated Obligations (Consolidated Bond Obligations By Contractual Maturity Or Next Call Date) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Due in one year or less	$ 18,762,650	$ 27,921,650
Due after one year through two years	2,376,950	1,267,800
Due after two years through three years	1,479,650	1,216,600
Due after three years through four years	1,585,200	831,700
Due after four years through five years	2,288,500	836,100
Thereafter	4,972,050	5,518,800
Total par value	31,465,000	37,592,650
Earlier of Contractual Maturity or Next Call Date [Member]
Debt Instrument [Line Items]
Due in one year or less	27,109,150	34,299,650
Due after one year through two years	2,176,950	1,142,800
Due after two years through three years	934,150	815,100
Due after three years through four years	588,200	399,700
Due after four years through five years	234,500	391,100
Thereafter	$ 422,050	$ 544,300

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Consolidated Obligations (Consolidated Bonds By Interest-Rate Payment Type) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Total par value	$ 31,465,000	$ 37,592,650
Fixed rate [Member]
Debt Instrument [Line Items]
Total par value	15,838,000	13,840,650
Simple variable rate [Member]
Debt Instrument [Line Items]
Total par value	15,027,000	23,752,000
Step [Member]
Debt Instrument [Line Items]
Total par value	$ 600,000	$ 0

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Consolidated Obligations (Consolidated Discount Notes Outstanding) (Details) - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
Short-term Debt [Line Items]
Book Value		$ 10,277,237	$ 10,882,417
Consolidated Obligation Discount Notes [Member]
Short-term Debt [Line Items]
Par Value		$ 10,277,770	$ 10,883,608
Weighted Average Interest Rate	[1]	0.04%	0.08%

[1] Represents yield to maturity excluding concession fees.

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Assets and Liabilities Subject to Offsetting Assets Subject to Offsetting (Schedule of Offsetting Assets) (Details) - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
Offsetting Assets [Line Items]
Derivative assets, Gross Amounts of Recognized Assets		$ 16,940	$ 19,329
Derivative assets, Gross Amounts Offset in the Statement of Condition	[1],[2]	117,739	129,539
Total derivative assets		134,679	148,868
Derivative assets, Gross Amounts Not Offset in the Statement of Condition	[3]	(5)	(654)
Derivative assets, Net Amount		134,674	148,214
Securities purchased under agreements to resell, Gross Amounts of Recognized Assets		2,100,000	2,600,000
Securities purchased under agreements to resell, Gross Amounts Offset in the Statement of Condition		0	0
Securities purchased under agreements to resell, Net Amounts of Assets Presented in the Statement of Condition		2,100,000	2,600,000
Securities purchased under agreements to resell, Gross Amounts Not Offset in the Statement of Condition	[3]	(2,100,000)	(2,600,000)
Securities purchased under agreements to resell, Net Amount		0	0
TOTAL, Gross Amounts of Recognized Assets		2,116,940	2,619,329
TOTAL, Gross Amounts Offset in the Statement of Condition		117,739	129,539
TOTAL, Net Amounts of Assets Presented in the Statement of Condition		2,234,679	2,748,868
TOTAL, Gross Amounts Not Offset in the Statement of Condition	[3]	(2,100,005)	(2,600,654)
TOTAL, Net Amount		134,674	148,214
Uncleared derivatives [Member]
Offsetting Assets [Line Items]
Derivative assets, Gross Amounts of Recognized Assets		16,839	18,819
Derivative assets, Gross Amounts Offset in the Statement of Condition		(16,356)	(18,031)
Total derivative assets		483	788
Derivative assets, Gross Amounts Not Offset in the Statement of Condition	[3]	(5)	(654)
Derivative assets, Net Amount		478	134
Cleared derivatives [Member]
Offsetting Assets [Line Items]
Derivative assets, Gross Amounts of Recognized Assets		101	510
Derivative assets, Gross Amounts Offset in the Statement of Condition		134,095	147,570
Total derivative assets		134,196	148,080
Derivative assets, Gross Amounts Not Offset in the Statement of Condition	[3]	0	0
Derivative assets, Net Amount		$ 134,196	$ 148,080

[1] Amounts represent the application of the netting requirements that allow FHLBank to settle positive and negative positions and cash collateral, including accrued interest, held or placed with the same clearing agent and/or derivative counterparty. Cash collateral posted was $329,510,000 and $455,080,000 as of September 30, 2021 and December 31, 2020, respectively. Cash collateral received was $0 and $300,000 as of September 30, 2021 and December 31, 2020, respectively.

[2] Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

[3] Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

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Assets and Liabilities Subject to Offsetting Liabilities Subject to Offsetting (Schedule of Offsetting Liabilities) (Details) - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
Offsetting Liabilities [Line Items]
Derivative liabilities, Gross Amounts of Recognized Liabilities		$ 219,616	$ 329,645
Derivative liabilities, Gross Amounts Offset in the Statement of Condition	[1],[2]	(211,771)	(325,241)
Total derivative liabilities		7,845	4,404
Derivative liabilities, Gross Amounts Not Offset in the Statement of Condition	[3]	(1,005)	(4)
Derivative liabilities, Net Amount		6,840	4,400
TOTAL, Gross Amounts of Recognized Liabilities		219,616	329,645
TOTAL, Gross Amounts Offset in the Statement of Condition		(211,771)	(325,241)
TOTAL, Net Amounts of Liabilities Presented in the Statement of Condition		7,845	4,404
TOTAL, Gross Amounts Not Offset in the Statement of Condition	[3]	(1,005)	(4)
TOTAL, Net Amount		6,840	4,400
Uncleared derivatives [Member]
Offsetting Liabilities [Line Items]
Derivative liabilities, Gross Amounts of Recognized Liabilities		206,719	324,491
Derivative liabilities, Gross Amounts Offset in the Statement of Condition		(198,874)	(320,087)
Total derivative liabilities		7,845	4,404
Derivative liabilities, Gross Amounts Not Offset in the Statement of Condition	[3]	(1,005)	(4)
Derivative liabilities, Net Amount		6,840	4,400
Cleared derivatives [Member]
Offsetting Liabilities [Line Items]
Derivative liabilities, Gross Amounts of Recognized Liabilities		12,897	5,154
Derivative liabilities, Gross Amounts Offset in the Statement of Condition		(12,897)	(5,154)
Total derivative liabilities		0	0
Derivative liabilities, Gross Amounts Not Offset in the Statement of Condition	[3]	0	0
Derivative liabilities, Net Amount		$ 0	$ 0

[1] Amounts represent the application of the netting requirements that allow FHLBank to settle positive and negative positions and cash collateral, including accrued interest, held or placed with the same clearing agent and/or derivative counterparty. Cash collateral posted was $329,510,000 and $455,080,000 as of September 30, 2021 and December 31, 2020, respectively. Cash collateral received was $0 and $300,000 as of September 30, 2021 and December 31, 2020, respectively.

[2] Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

[3] Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

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Capital (Narrative) (Details) $ / shares in Units, $ in Thousands		9 Months Ended
		Sep. 30, 2021 USD ($) $ / shares Rate	Dec. 31, 2020 $ / shares Rate
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Number of Finance Agency Regulatory Capital Requirements		3
Total regulatory capital-to-asset ratio, required | Rate		4.00%	4.00%
Leverage capital ratio, required | Rate		5.00%	5.00%
Leverage capital, permanent capital weight		1.5
Common Stock, par value per share | $ / shares		$ 100
Excess Stock (less than) | Rate		1.00%
Class A [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Leverage capital, non-permanent capital weight		1.0
Asset Based Stock Purchase Requirement Percentage			0.10%
Common Stock, par value per share | $ / shares	[1]	$ 100	$ 100
Class B [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Activity Based Capital Stock Required By Members As Percent Of Advances Outstanding		4.50%
Activity Based Capital Stock Required By Members As Percent Of Acquired Member Assets Outstanding		3.00%
Activity Based Capital Stock Required By Members As Percent Of Outstanding Balance of Acquired Member Assets, Limit		3.00%
Activity Based Capital Stock Required By Members As Percent Of Letter of Credit Principal		0.25%	0.00%
Common Stock, par value per share | $ / shares	[1]	$ 100	$ 100
Maximum [Member] | Class A [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Asset Based Stock Purchase Requirement Value | $		$ 500
Minimum [Member] | Class A [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Asset Based Stock Purchase Requirement Value | $		$ 1

[1] Putable

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Capital (Regulatory Capital Requirements) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Regulatory capital requirements:
Risk-based capital, Required	$ 402,398	$ 192,927
Risk-based capital, Actual	$ 2,278,219	$ 2,213,868
Total regulatory capital-to-asset ratio, Required	4.00%	4.00%
Total regulatory capital-to-asset ratio, Actual	5.50%	5.00%
Total regulatory capital, Required	$ 1,820,649	$ 2,103,668
Total regulatory capital, Actual	$ 2,500,649	$ 2,627,083
Leverage capital ratio, Required	5.00%	5.00%
Leverage capital ratio, Actual	8.00%	7.10%
Leverage capital, Required	$ 2,275,811	$ 2,629,586
Leverage capital, Actual	$ 3,639,759	$ 3,734,017

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Capital (Mandatorily Redeemable Capital Stock Rollforward) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Mandatorily Redeemable Capital Stock [Roll Forward]
Balance, beginning of period	$ 1,543	$ 2,308	$ 1,624	$ 2,415
Capital stock subject to mandatory redemption reclassified from equity during the period	460	620,561	584,512	1,627,899
Capital stock redemption cancellations reclassified to equity during the period	0	0	0	(100,647)
Redemption or repurchase of mandatorily redeemable capital stock during the period	(1,397)	(620,967)	(585,547)	(1,527,802)
Stock dividend classified as mandatorily redeemable capital stock during the period	1	12	18	49
Balance, end of period	$ 607	$ 1,914	$ 607	$ 1,914

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Accumulated Other Comprehensive Income (Accumulated Other Comprehensive Income Or Loss) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021		Sep. 30, 2020
Accumulated Other Comprehensive Income [Roll Forward]
Balance at the beginning of the period		$ 2,646,571	$ 2,354,938	$ 2,667,767		$ 2,791,051
Reclassifications from other comprehensive income (loss) to net income:
Total other comprehensive income (loss)		(22,390)	30,323	28,846		(28,157)
Balance at the end of the period		2,571,196	2,599,936	2,571,196		2,599,936
OCI, Debt Securities, Available-for-Sale, Transfer from Held-to-Maturity, Unrealized Gain (Loss)				4,059
Total AOCI [Member]
Accumulated Other Comprehensive Income [Roll Forward]
Balance at the beginning of the period		93,544	(33,694)	42,308		24,786
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)		(22,482)	30,295	28,604	[1]	(26,716)
Reclassifications from other comprehensive income (loss) to net income:
Realized net (gains) losses included in net income1	[2]					(1,523)
Amortization of net losses - defined benefit pension plan2	[3]	92	28	242		82
Total other comprehensive income (loss)		(22,390)	30,323	28,846		(28,157)
Balance at the end of the period		71,154	(3,371)	71,154		(3,371)
Net Unrealized Gain (Loss) on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income [Roll Forward]
Balance at the beginning of the period		96,282	(31,746)	45,196		26,788
Other comprehensive income (loss) before reclassification:
Unrealized gains (losses)		(22,482)	30,295	28,604	[1]	(26,716)
Reclassifications from other comprehensive income (loss) to net income:
Realized net (gains) losses included in net income1	[2]					(1,523)
Total other comprehensive income (loss)		(22,482)	30,295	28,604		(28,239)
Balance at the end of the period		73,800	(1,451)	73,800		(1,451)
Defined Benefit Pension Plan [Member]
Accumulated Other Comprehensive Income [Roll Forward]
Balance at the beginning of the period		(2,738)	(1,948)	(2,888)		(2,002)
Reclassifications from other comprehensive income (loss) to net income:
Amortization of net losses - defined benefit pension plan2	[3]	92	28	242		82
Total other comprehensive income (loss)		92	28	242		82
Balance at the end of the period		$ (2,646)	$ (1,920)	$ (2,646)		$ (1,920)

[1] Includes $4,059,000 related to the transfer of securities from held-to-maturity to available-for-sale upon the adoption of reference rate reform guidance

[2] Recorded in “Net gains (losses) on sale of available-for-sale securities” non-interest income on the Statements of Income. Amount represents a credit (increase to other income (loss)).

[3] Recorded in “Other” non-interest expense on the Statements of Income. Amount represents a debit (increase to other expenses).

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Fair Values (Fair Value Summary) (Details) - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
Assets:
Cash and due from banks		$ 29,740	$ 4,570,415
Trading securities		2,622,397	2,623,376
Available-for-sale securities		7,776,188	6,741,310
Held-to-maturity securities, Carrying Value		433,286	2,746,992
Held-to-maturity securities		437,848	2,750,116
Accrued interest receivable		83,013	97,718
Derivative assets		134,679	148,868
Netting adjustments and cash collateral, Derivative Assets	[1],[2]	117,739	129,539
Liabilities:
Accrued interest payable		38,036	45,575
Derivative liabilities		7,845	4,404
Netting adjustments and cash collateral, Derivative Liabilities	[1],[2]	(211,771)	(325,241)
Carrying Value [Member]
Assets:
Cash and due from banks		29,740	4,570,415
Interest-bearing deposits		569,222	760,297
Securities purchased under agreements to resell		2,100,000	2,600,000
Federal funds sold		1,958,000	1,780,000
Trading securities		2,622,397	2,623,376
Available-for-sale securities		7,776,188	6,741,310
Held-to-maturity securities, Carrying Value		433,286	2,746,992
Advances		21,411,103	21,226,823
Mortgage loans held for portfolio, net of allowance		8,315,791	9,205,207
Accrued interest receivable		83,013	97,718
Derivative assets		134,679	148,868
Liabilities:
Deposits		1,033,557	1,229,361
Mandatorily redeemable capital stock		607	1,624
Accrued interest payable		38,036	45,575
Derivative liabilities		7,845	4,404
Carrying Value [Member] | Industrial revenue bond [Member]
Other Asset (Liability):
Other asset (liability), asset		35,000	35,000
Carrying Value [Member] | Financing lease payable [Member]
Other Asset (Liability):
Other asset (liability), liability		(35,000)	(35,000)
Carrying Value [Member] | Consolidated Obligation Discount Notes [Member]
Liabilities:
Consolidated obligation discount notes		10,277,237	10,882,417
Carrying Value [Member] | Consolidated Obligation Bonds [Member]
Liabilities:
Consolidated obligation bonds		31,477,780	37,648,077
Fair Value [Member]
Assets:
Cash and due from banks		29,740	4,570,415
Interest-bearing deposits		569,222	760,297
Securities purchased under agreements to resell		2,100,000	2,600,000
Federal funds sold		1,958,000	1,780,000
Trading securities		2,622,397	2,623,376
Available-for-sale securities		7,776,188	6,741,310
Held-to-maturity securities		437,848	2,750,116
Advances		21,500,868	21,360,450
Mortgage loans held for portfolio, net of allowance		8,412,649	9,454,112
Accrued interest receivable		83,013	97,718
Derivative assets		134,679	148,868
Liabilities:
Deposits		1,033,557	1,229,361
Mandatorily redeemable capital stock		607	1,624
Accrued interest payable		38,036	45,575
Derivative liabilities		7,845	4,404
Fair Value [Member] | Industrial revenue bond [Member]
Other Asset (Liability):
Other asset (liability), asset		36,572	37,978
Fair Value [Member] | Financing lease payable [Member]
Other Asset (Liability):
Other asset (liability), liability		(36,572)	(37,978)
Fair Value [Member] | Consolidated Obligation Discount Notes [Member]
Liabilities:
Consolidated obligation discount notes		10,276,683	10,882,601
Fair Value [Member] | Consolidated Obligation Bonds [Member]
Liabilities:
Consolidated obligation bonds		31,452,159	37,835,135
Level 1 [Member]
Assets:
Cash and due from banks		29,740	4,570,415
Interest-bearing deposits		0	0
Securities purchased under agreements to resell		0	0
Federal funds sold		0	0
Trading securities		0	0
Available-for-sale securities		0	0
Held-to-maturity securities		0	0
Advances		0	0
Mortgage loans held for portfolio, net of allowance		0	0
Accrued interest receivable		0	0
Derivative assets		0	0
Liabilities:
Deposits		0	0
Mandatorily redeemable capital stock		607	1,624
Accrued interest payable		0	0
Derivative liabilities		0	0
Level 1 [Member] | Industrial revenue bond [Member]
Other Asset (Liability):
Other asset (liability), asset		0	0
Level 1 [Member] | Financing lease payable [Member]
Other Asset (Liability):
Other asset (liability), liability		0	0
Level 1 [Member] | Consolidated Obligation Discount Notes [Member]
Liabilities:
Consolidated obligation discount notes		0	0
Level 1 [Member] | Consolidated Obligation Bonds [Member]
Liabilities:
Consolidated obligation bonds		0	0
Level 2 [Member]
Assets:
Cash and due from banks		0	0
Interest-bearing deposits		569,222	760,297
Securities purchased under agreements to resell		2,100,000	2,600,000
Federal funds sold		1,958,000	1,780,000
Trading securities		2,622,397	2,623,376
Available-for-sale securities		7,776,188	6,741,310
Held-to-maturity securities		361,957	2,674,446
Advances		21,500,868	21,360,450
Mortgage loans held for portfolio, net of allowance		8,406,513	9,441,474
Accrued interest receivable		83,013	97,718
Derivative assets		16,940	19,329
Liabilities:
Deposits		1,033,557	1,229,361
Mandatorily redeemable capital stock		0	0
Accrued interest payable		38,036	45,575
Derivative liabilities		219,616	329,645
Level 2 [Member] | Industrial revenue bond [Member]
Other Asset (Liability):
Other asset (liability), asset		36,572	37,978
Level 2 [Member] | Financing lease payable [Member]
Other Asset (Liability):
Other asset (liability), liability		(36,572)	(37,978)
Level 2 [Member] | Consolidated Obligation Discount Notes [Member]
Liabilities:
Consolidated obligation discount notes		10,276,683	10,882,601
Level 2 [Member] | Consolidated Obligation Bonds [Member]
Liabilities:
Consolidated obligation bonds		31,452,159	37,835,135
Level 3 [Member]
Assets:
Cash and due from banks		0	0
Interest-bearing deposits		0	0
Securities purchased under agreements to resell		0	0
Federal funds sold		0	0
Trading securities		0	0
Available-for-sale securities		0	0
Held-to-maturity securities		75,891	75,670
Advances		0	0
Mortgage loans held for portfolio, net of allowance		6,136	12,638
Accrued interest receivable		0	0
Derivative assets		0	0
Liabilities:
Deposits		0	0
Mandatorily redeemable capital stock		0	0
Accrued interest payable		0	0
Derivative liabilities		0	0
Level 3 [Member] | Industrial revenue bond [Member]
Other Asset (Liability):
Other asset (liability), asset		0	0
Level 3 [Member] | Financing lease payable [Member]
Other Asset (Liability):
Other asset (liability), liability		0	0
Level 3 [Member] | Consolidated Obligation Discount Notes [Member]
Liabilities:
Consolidated obligation discount notes		0	0
Level 3 [Member] | Consolidated Obligation Bonds [Member]
Liabilities:
Consolidated obligation bonds		$ 0	$ 0

[1] Amounts represent the application of the netting requirements that allow FHLBank to settle positive and negative positions and cash collateral, including accrued interest, held or placed with the same clearing agent and/or derivative counterparty. Cash collateral posted was $329,510,000 and $455,080,000 as of September 30, 2021 and December 31, 2020, respectively. Cash collateral received was $0 and $300,000 as of September 30, 2021 and December 31, 2020, respectively.

[2] Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

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Fair Values (Hierarchy Level for Financial Assets And Liabilities - Recurring And Nonrecurring) (Details) - USD ($) $ in Thousands		Sep. 30, 2021		Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		$ 2,622,397		$ 2,623,376
Available-for-sale securities		7,776,188		6,741,310
Total derivative assets		134,679		148,868
Netting adjustments and cash collateral, Derivative Assets	[1],[2]	117,739		129,539
Total derivative liabilities		7,845		4,404
Netting adjustments and cash collateral, Derivative Liabilities	[1],[2]	(211,771)		(325,241)
Held-to-maturity securities		437,848		2,750,116
Certificates of Deposit [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		200,009		0
U.S. Treasury obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		1,176,148		1,298,518
Available-for-sale securities		2,842,599		3,546,325
GSE Debenture [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		421,980		431,875
U.S. obligation MBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		55,342
Held-to-maturity securities				70,890
GSE MBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		824,260		892,983
Available-for-sale securities		4,878,247		3,194,985
Held-to-maturity securities		361,957		2,603,556
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		2,622,397		2,623,376
Available-for-sale securities		7,776,188		6,741,310
Total derivative assets		16,940		19,329
Total derivative liabilities		219,616		329,645
Held-to-maturity securities		361,957		2,674,446
Mortgage loans held for portfolio		8,406,513		9,441,474
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		0		0
Available-for-sale securities		0		0
Total derivative assets		0		0
Total derivative liabilities		0		0
Held-to-maturity securities		75,891		75,670
Mortgage loans held for portfolio		6,136		12,638
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		2,622,397		2,623,376
Available-for-sale securities		7,776,188		6,741,310
Total derivative assets		134,679		148,868
Total derivative liabilities		7,845		4,404
Held-to-maturity securities		437,848		2,750,116
Mortgage loans held for portfolio		8,412,649		9,454,112
Recurring fair value measurements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Netting adjustments and cash collateral, Derivative Assets	[2]	117,739		129,539
Netting adjustments and cash collateral, Derivative Liabilities	[2]	(211,771)		(325,241)
Recurring fair value measurements [Member] | Interest-rate related [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Netting adjustments and cash collateral, Derivative Assets	[2]	117,739		129,539
Netting adjustments and cash collateral, Derivative Liabilities	[2]	(211,771)		(325,241)
Recurring fair value measurements [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		2,622,397		2,623,376
Available-for-sale securities		7,776,188		6,741,310
Total derivative assets		16,940		19,329
TOTAL FAIR VALUE MEASUREMENTS - ASSETS		10,415,525		9,384,015
Total derivative liabilities		219,616		329,645
TOTAL FAIR VALUE MEASUREMENTS - LIABILITIES		219,616		329,645
Recurring fair value measurements [Member] | Level 2 [Member] | Interest-rate related [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets		16,935		18,675
Total derivative liabilities		218,611		329,641
Recurring fair value measurements [Member] | Level 2 [Member] | Certificates of Deposit [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		200,009
Recurring fair value measurements [Member] | Level 2 [Member] | U.S. Treasury obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		1,176,148		1,298,518
Available-for-sale securities		2,842,599		3,546,325
Recurring fair value measurements [Member] | Level 2 [Member] | GSE Debenture [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		421,980		431,875
Recurring fair value measurements [Member] | Level 2 [Member] | U.S. obligation MBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		55,342
Recurring fair value measurements [Member] | Level 2 [Member] | GSE MBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		824,260		892,983
Available-for-sale securities		4,878,247		3,194,985
Recurring fair value measurements [Member] | Level 2 [Member] | Mortgage Receivable [Member] | Mortgage delivery commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets		5		654
Total derivative liabilities		1,005		4
Recurring fair value measurements [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		2,622,397		2,623,376
Available-for-sale securities		7,776,188		6,741,310
Total derivative assets		134,679		148,868
TOTAL FAIR VALUE MEASUREMENTS - ASSETS		10,533,264		9,513,554
Total derivative liabilities		7,845		4,404
TOTAL FAIR VALUE MEASUREMENTS - LIABILITIES		7,845		4,404
Recurring fair value measurements [Member] | Fair Value [Member] | Interest-rate related [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets		134,674		148,214
Total derivative liabilities		6,840		4,400
Recurring fair value measurements [Member] | Fair Value [Member] | Certificates of Deposit [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		200,009
Recurring fair value measurements [Member] | Fair Value [Member] | U.S. Treasury obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		1,176,148		1,298,518
Available-for-sale securities		2,842,599		3,546,325
Recurring fair value measurements [Member] | Fair Value [Member] | GSE Debenture [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		421,980		431,875
Recurring fair value measurements [Member] | Fair Value [Member] | U.S. obligation MBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities		55,342
Recurring fair value measurements [Member] | Fair Value [Member] | GSE MBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities		824,260		892,983
Available-for-sale securities		4,878,247		3,194,985
Recurring fair value measurements [Member] | Fair Value [Member] | Mortgage Receivable [Member] | Mortgage delivery commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets		5		654
Total derivative liabilities		1,005		4
Nonrecurring fair value measurements - Assets: [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
TOTAL FAIR VALUE MEASUREMENTS - ASSETS		6,222	[3]	13,073	[4]
Mortgage loans held for portfolio		6,170	[3]	12,668	[4]
Real estate owned		52	[3]	405	[4]
Nonrecurring fair value measurements - Assets: [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
TOTAL FAIR VALUE MEASUREMENTS - ASSETS		6,222	[3]	13,073	[4]
Mortgage loans held for portfolio		6,170	[3]	12,668	[4]
Real estate owned		$ 52	[3]	$ 405	[4]

[1] Amounts represent the application of the netting requirements that allow FHLBank to settle positive and negative positions and cash collateral, including accrued interest, held or placed with the same clearing agent and/or derivative counterparty. Cash collateral posted was $329,510,000 and $455,080,000 as of September 30, 2021 and December 31, 2020, respectively. Cash collateral received was $0 and $300,000 as of September 30, 2021 and December 31, 2020, respectively.

[2] Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.

[3] Includes assets adjusted to fair value during the nine months ended September 30, 2021 and still outstanding as of September 30, 2021.

[4] Includes assets adjusted to fair value during the year ended December 31, 2020 and still outstanding as of December 31, 2020.

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Commitments And Contingencies (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Off-balance Sheet Commitments:
Obligation with Joint and Several Liability Arrangement, Description	As provided in the Federal Home Loan Bank Act of 1932, as amended or in FHFA regulations, consolidated obligations are backed only by the financial resources of the FHLBanks. FHLBank Topeka is jointly and severally liable with the other FHLBanks for the payment of principal and interest on all of the consolidated obligations issued by the FHLBanks.
Obligation with joint and several liability arrangement, off balance sheet amount	$ 599,694,909		$ 698,296,045
Carrying value included in other liabilities	$ 69,777		$ 71,358
Number of in-district state housing authorities with standby bond purchase agreements	2		2
Stand by Bond Purchase Agreements, Aquired And Sold At Par, During the Period		$ 122,390
Mortgage Delivery Commitments Derivative Asset (Liability)	$ (1,000)		$ 650
Other assets	82,804		90,706
Standby Letters of Credit Outstanding [Member]
Off-balance Sheet Commitments:
Carrying value included in other liabilities	$ 1,355		$ 1,554
Commitment Expiration Year (no later than)	2023
Term (up to)	6 years
Forward Settling Advance Commitments [Member]
Off-balance Sheet Commitments:
Term (up to)	24 months
Commitments for standby bond purchases [Member]
Off-balance Sheet Commitments:
Commitment Expiration Year (no later than)	2024
Mortgage Receivable [Member] | Commitments to fund or purchase mortgage loans [Member]
Off-balance Sheet Commitments:
Term (up to)	60 calendar days

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Commitments And Contingencies (Off-Balance Sheet Commitments) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Standby letters of credit outstanding [Member]
Loss Contingencies [Line Items]
Expire Within One Year	$ 4,473,000	$ 5,436,165
Expire After One Year	2,483	4,251
Total	4,475,483	5,440,416
Advance commitments outstanding [Member]
Loss Contingencies [Line Items]
Expire Within One Year	49,090	19,693
Expire After One Year	12,816	21,001
Total	61,906	40,694
Principal commitments for standby bond purchase agreements [Member]
Loss Contingencies [Line Items]
Expire Within One Year	80,530	380,615
Expire After One Year	649,275	317,710
Total	729,805	698,325
Commitments to issue consolidated bonds, at par [Member]
Loss Contingencies [Line Items]
Expire Within One Year	3,690,000	4,000
Expire After One Year	0	0
Total	3,690,000	4,000
Commitments to issue consolidated obligations discount notes, at par [Member]
Loss Contingencies [Line Items]
Expire Within One Year	1,000,000	0
Expire After One Year	0	0
Total	1,000,000	0
Mortgage Receivable [Member] | Commitments to fund or purchase mortgage loans [Member]
Loss Contingencies [Line Items]
Expire Within One Year	162,060	133,456
Expire After One Year	0	0
Total	$ 162,060	$ 133,456

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Transactions With Stockholders (Related Party Transactions, by Balance Sheet Grouping) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Related Party Transaction [Line Items]
Outstanding Advances	$ 21,411,103	$ 21,226,823
Outstanding Deposits	1,033,557	1,229,361
Ten Percent Owner [Member]
Related Party Transaction [Line Items]
Regulatory Capital Stock, Total Par Value	$ 364,591	$ 340,349
Regulatory Capital Stock, Percent Of Total	26.40%	21.60%
Outstanding Advances	$ 7,770,000	$ 7,460,000
Outstanding Advances, Percent of Total	36.50%	35.60%
Outstanding Deposits	$ 511	$ 713
Outstanding Deposits, Percent of Total	0.00%	0.10%
Ten Percent Owner [Member] | Total Class A Stock [Member]
Related Party Transaction [Line Items]
Regulatory Capital Stock, Total Par Value	$ 6,800	$ 825
Regulatory Capital Stock, Percent Of Total	3.10%	0.20%
Ten Percent Owner [Member] | Total Class B Stock [Member]
Related Party Transaction [Line Items]
Regulatory Capital Stock, Total Par Value	$ 357,791	$ 339,524
Regulatory Capital Stock, Percent Of Total	30.80%	29.20%
MidFirst Bank [Member]
Related Party Transaction [Line Items]
Regulatory Capital Stock, Total Par Value	$ 364,591	$ 340,349
Regulatory Capital Stock, Percent Of Total	26.40%	21.60%
Outstanding Advances	$ 7,770,000	$ 7,460,000
Outstanding Advances, Percent of Total	36.50%	35.60%
Outstanding Deposits	$ 511	$ 713
Outstanding Deposits, Percent of Total	0.00%	0.10%
MidFirst Bank [Member] | Total Class A Stock [Member]
Related Party Transaction [Line Items]
Regulatory Capital Stock, Total Par Value	$ 6,800	$ 825
Regulatory Capital Stock, Percent Of Total	3.10%	0.20%
MidFirst Bank [Member] | Total Class B Stock [Member]
Related Party Transaction [Line Items]
Regulatory Capital Stock, Total Par Value	$ 357,791	$ 339,524
Regulatory Capital Stock, Percent Of Total	30.80%	29.20%

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Transactions With Stockholders (Related Party Transactions, by Balance Sheet Grouping-Directors) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Related Party Transaction [Line Items]
Advances, Outstanding Amount	$ 21,411,103	$ 21,226,823
Deposits, Outstanding Amount	1,033,557	1,229,361
Director [Member]
Related Party Transaction [Line Items]
Advances, Outstanding Amount	$ 156,291	$ 161,021
Advances, Percent of Total	0.70%	0.80%
Deposits, Outstanding Amount	$ 18,322	$ 25,459
Deposits, Percent of Total	1.80%	2.10%
TOTAL CAPITAL STOCK, Outstanding Amount	$ 22,021	$ 31,498
TOTAL CAPITAL STOCK, Percent Of Total	1.60%	2.00%
Director [Member] | Class A [Member]
Related Party Transaction [Line Items]
TOTAL CAPITAL STOCK, Outstanding Amount	$ 5,236	$ 10,298
TOTAL CAPITAL STOCK, Percent Of Total	2.40%	2.50%
Director [Member] | Class B [Member]
Related Party Transaction [Line Items]
TOTAL CAPITAL STOCK, Outstanding Amount	$ 16,785	$ 21,200
TOTAL CAPITAL STOCK, Percent Of Total	1.40%	1.80%

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Transactions With Stockholders (Schedule Of Related Party Transactions, Mortgage Loans Disclosure) (Details) - Director [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Related Party Transaction [Line Items]
Mortgage loans acquired	$ 13,563	$ 9,091	$ 32,534	$ 95,901
Mortgage loans acquired, Percent of Total	2.20%	2.50%	1.90%	4.00%