Capital

3 Months Ended

Mar. 31, 2020

Capital

We are subject to capital requirements under our capital plan, the FHLBank Act, and FHFA regulations and guidance:

Risk-based capital. We are required to maintain at all times permanent capital, defined as Class B stock, including Class B stock classified as mandatorily redeemable capital stock, and retained earnings, in an amount at least equal to the sum of our credit-risk capital requirement, market-risk capital requirement, and operations-risk capital requirement, calculated in accordance with FHFA rules and regulations, referred to herein as the risk-based capital requirement. Only permanent capital satisfies the risk-based capital requirement.

Total regulatory capital. We are required to maintain at all times a total capital-to-assets ratio of at least four percent. Total regulatory capital is the sum of permanent capital, the amount paid-in for Class A stock, the amount of 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. We have never issued Class A stock.


3.	Leverage capital. We are required to maintain at all times a leverage capital-to-assets ratio of at least five percent. Leverage capital is defined as the sum of permanent capital weighted 1.5 times and all other capital without a weighting factor.

The FHFA has authority to require us to maintain a greater amount of permanent capital than is required as defined by the risk-based capital requirements.

Table 11.1 - Regulatory Capital Requirements (dollars in thousands)

Risk-Based Capital Requirements	March 31, 2020		December 31, 2019

Permanent capital
Class B capital stock	$	2,266,329	$	1,869,130
Mandatorily redeemable capital stock	6,112		5,806
Retained earnings	1,473,149		1,463,154
Total permanent capital	$	3,745,590	$	3,338,090
Risk-based capital requirement
Credit-risk capital	$	212,510	$	235,213
Market-risk capital	155,678		207,426
Operations-risk capital	110,456		132,792
Total risk-based capital requirement	$	478,644	$	575,431
Permanent capital in excess of risk-based capital requirement	$	3,266,946	$	2,762,659



	March 31, 2020						December 31, 2019
	Required			Actual			Required			Actual
Capital Ratio
Risk-based capital	$	478,644		$	3,745,590		$	575,431		$	3,338,090
Total regulatory capital	$	2,756,035		$	3,745,590		$	2,226,512		$	3,338,090
Total capital-to-asset ratio	4.0		%	5.4		%	4.0		%	6.0		%

Leverage Ratio
Leverage capital	$	3,445,043		$	5,618,385		$	2,783,141		$	5,007,135
Leverage capital-to-assets ratio	5.0		%	8.2		%	5.0		%	9.0		%

We are a cooperative whose members own most of our capital stock. Former members (including certain nonmembers that own our capital stock as a result of merger or acquisition, relocation, or involuntary termination of membership) own the remaining capital stock to support business transactions still carried on our statement of condition. Shares of capital stock cannot be purchased or sold except between us and our members at $100 per share par value. We have only issued Class B stock and each member is required to purchase Class B stock equal to the sum of 0.20 percent of certain member assets eligible (provided that this amount is not less than $10 thousand nor more than $10.0 million) to secure advances under the FHLBank Act (the membership stock investment requirement), and 3.00 percent for overnight advances, 4.00 percent for all other advances, and 0.25 percent for outstanding letters of credit (collectively, the activity-based stock-investment requirement). Prior to January 16, 2019, the membership stock investment requirement was equal to 0.35 percent of certain member assets eligible to secure advances under the FHLBank Act (provided that this amount was not less than $10 thousand nor more than $25.0 million).