10-Q 1 fhlb-atlq12014.htm 10-Q FHLB-ATL Q1 2014
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________ 
FORM 10-Q
_____________________________________
  
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014
OR
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-51845
 _____________________________________ 
FEDERAL HOME LOAN BANK OF ATLANTA
(Exact name of registrant as specified in its charter)
_____________________________________  

Federally chartered corporation
 
56-6000442
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
1475 Peachtree Street, NE, Atlanta, Ga.
 
30309
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (404) 888-8000
_____________________________________  
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 for the past 90 days.    ý  Yes    ¨  No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ý  Yes    ¨  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
¨
Accelerated filer
¨
 
 
 
 
Non-accelerated filer
x  (Do not check if a smaller reporting company)
Smaller reporting company
¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    ý  No
The number of shares outstanding of the registrant’s Class B Stock, par value $100, as of April 30, 2014 was 46,191,308.



Table of Contents
 





PART I. FINANCIAL INFORMATION.

Item 1. Financial Statements.
FEDERAL HOME LOAN BANK OF ATLANTA
STATEMENTS OF CONDITION
(Unaudited)
(In millions, except par value)
 
As of March 31, 2014
 
As of December 31, 2013
Assets
 
 
 
Cash and due from banks
$
1,722

 
$
4,374

Interest-bearing deposits (including deposits with another FHLBank of $2 and $1 as of March 31, 2014 and December 31, 2013, respectively)
1,008

 
1,007

Securities purchased under agreements to resell
1,000

 

Federal funds sold
5,470

 
1,795

Investment securities:
 
 
 
    Trading securities (includes another FHLBank’s bond of $64 and $65 as of March 31, 2014 and December 31, 2013, respectively)
1,455

 
1,667

    Available-for-sale securities
2,223

 
2,299

    Held-to-maturity securities (fair value of $21,052 and $20,146 as of March 31, 2014 and December 31, 2013, respectively)
21,050

 
20,176

Total investment securities
24,728

 
24,142

Advances
84,166

 
89,588

Mortgage loans held for portfolio, net of allowance for credit losses on mortgage loans of $4 and $11 as of March 31, 2014 and December 31, 2013, respectively
879

 
918

Accrued interest receivable
194

 
199

Derivative assets
72

 
53

Premises and equipment, net
28

 
29

Other assets
200

 
211

Total assets
$
119,467

 
$
122,316

Liabilities
 
 
 
Interest-bearing deposits
$
1,465

 
$
1,752

Consolidated obligations, net:
 
 
 
Discount notes
22,801

 
32,202

Bonds
88,276

 
80,728

Total consolidated obligations, net
111,077

 
112,930

Mandatorily redeemable capital stock
23

 
24

Accrued interest payable
230

 
183

Affordable Housing Program payable
76

 
74

Derivative liabilities
183

 
187

Other liabilities
194

 
514

Total liabilities
113,248

 
115,664

Commitments and contingencies (Note 15)

 

Capital
 
 
 
Capital stock Class B putable ($100 par value) issued and outstanding shares:
 
 
 
Subclass B1 issued and outstanding shares: 7 and 10 as of March 31, 2014 and December 31, 2013, respectively
721

 
946

Subclass B2 issued and outstanding shares: 37 and 39 as of March 31, 2014 and December 31, 2013, respectively
3,691

 
3,937

Total capital stock Class B putable
4,412

 
4,883

Retained earnings:
 
 
 
Restricted
156

 
141

Unrestricted
1,534

 
1,516

Total retained earnings
1,690

 
1,657

Accumulated other comprehensive income
117

 
112

Total capital
6,219

 
6,652

Total liabilities and capital
$
119,467

 
$
122,316


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

3


FEDERAL HOME LOAN BANK OF ATLANTA
STATEMENTS OF INCOME
(Unaudited)
(In millions)
 
 
 
For the Three Months Ended March 31,
 
 
2014
 
2013
Interest income
 
 
 
 
Advances
 
$
57

 
$
63

Interest-bearing deposits
 
1

 
2

Federal funds sold
 
2

 
3

Trading securities
 
19

 
28

Available-for-sale securities
 
32

 
33

Held-to-maturity securities
 
62

 
63

Mortgage loans
 
13

 
16

Total interest income
 
186

 
208

Interest expense
 
 
 
 
Consolidated obligations:
 
 
 
 
 Discount notes
 
8

 
8

 Bonds
 
88

 
113

Total interest expense
 
96

 
121

Net interest income
 
90

 
87

(Reversal) provision for credit losses
 
(4
)
 
2

Net interest income after (reversal) provision for credit losses
 
94

 
85

Noninterest income (loss)
 
 
 
 
Total other-than-temporary impairment losses
 

 
(1
)
Net amount of impairment losses (reclassified from) recorded in accumulated other comprehensive income
 
(1
)
 
1

Net impairment losses recognized in earnings
 
(1
)
 

Net losses on trading securities
 
(14
)
 
(24
)
Net gains on derivatives and hedging activities
 
15

 
42

Gain on early extinguishment of debt
 
15

 

Letters of credit fees
 
7

 
5

Other
 
1

 
1

Total noninterest income
 
23

 
24

Noninterest expense
 
 
 
 
Compensation and benefits
 
16

 
16

Other operating expenses
 
10

 
10

Finance Agency
 
3

 
3

Office of Finance
 
1

 
1

Other
 
1

 

Total noninterest expense
 
31

 
30

Income before assessments
 
86

 
79

Affordable Housing Program assessments
 
9

 
8

Net income
 
$
77

 
$
71


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

4


FEDERAL HOME LOAN BANK OF ATLANTA
STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In millions)
 
 
 
For the Three Months Ended March 31,
 
 
2014
 
2013
Net income
 
$
77

 
$
71

Other comprehensive income:
 
 
 
 
Net noncredit portion of other-than-temporary impairment losses on available-for-sale securities:
 
 
 
 
Noncredit losses transferred from held-to-maturity securities
 

 
(1
)
Net change in fair value on other-than-temporarily impaired available-for-sale securities
 
4

 
82

Reclassification of noncredit portion of impairment losses included in net income
 
1

 

Net noncredit portion of other-than-temporary impairment losses on available-for-sale securities
 
5

 
81

Net noncredit portion of other-than-temporary impairment losses on held-to-maturity securities:
 
 
 
 
Noncredit losses on held-to-maturity securities
 

 
(1
)
Reclassification of noncredit portion from held-to-maturity securities to available-for-sale securities
 

 
1

Net noncredit portion of other-than-temporary impairment losses on held-to-maturity securities
 

 

Total other comprehensive income
 
5

 
81

Total comprehensive income
 
$
82

 
$
152


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

5


FEDERAL HOME LOAN BANK OF ATLANTA
STATEMENTS OF CAPITAL
(Unaudited)
(In millions)
 
 
Capital Stock Class B Putable
 
Retained Earnings
 
Accumulated
Other
Comprehensive
Income
 
Total Capital    
 
Shares        
 
Par Value
 
Restricted    
 
Unrestricted    
 
Total        
 
Balance, December 31, 2012
49

 
$
4,898

 
$
73

 
$
1,362

 
$
1,435

 
$
(58
)
 
$
6,275

Issuance of capital stock
8

 
763

 

 

 

 

 
763

Repurchase/redemption of capital stock
(13
)
 
(1,277
)
 

 

 

 

 
(1,277
)
Net shares reclassified to mandatorily redeemable capital stock

 
(4
)
 

 

 

 

 
(4
)
Comprehensive income

 

 
14

 
57

 
71

 
81

 
152

Cash dividends on capital stock

 

 

 
(29
)
 
(29
)
 

 
(29
)
Balance, March 31, 2013
44

 
$
4,380

 
$
87

 
$
1,390

 
$
1,477

 
$
23

 
$
5,880

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2013
49

 
$
4,883

 
$
141

 
$
1,516

 
$
1,657

 
$
112

 
$
6,652

Issuance of capital stock
10

 
1,023

 

 

 

 

 
1,023

Repurchase/redemption of capital stock
(15
)
 
(1,492
)
 

 

 

 

 
(1,492
)
Net shares reclassified to mandatorily redeemable capital stock

 
(2
)
 

 

 

 

 
(2
)
Comprehensive income

 

 
15

 
62

 
77

 
5

 
82

Cash dividends on capital stock

 

 

 
(44
)
 
(44
)
 

 
(44
)
Balance, March 31, 2014
44

 
$
4,412

 
$
156

 
$
1,534

 
$
1,690

 
$
117

 
$
6,219


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

6


FEDERAL HOME LOAN BANK OF ATLANTA
STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
 
 
For the Three Months Ended March 31,
 
2014
 
2013
Operating activities
 
 
 
Net income
$
77

 
$
71

Adjustments to reconcile net income to net cash (used in) provided by operating activities:
 
 
 
Depreciation and amortization
(25
)
 
(18
)
  (Reversal) provision for credit losses
(4
)
 
2

  Gain due to change in net fair value adjustment on derivative and hedging activities
(16
)
 
(25
)
  Net change in fair value adjustment on trading securities
14

 
24

  Net impairment losses recognized in earnings
1

 

  Gain on extinguishment of debt
(15
)
 

Net change in:
 
 
 
  Accrued interest receivable
5

 
8

  Other assets
9

 
(3
)
  Affordable Housing Program payable

 
(4
)
  Accrued interest payable
47

 
60

  Other liabilities
(320
)
 

  Total adjustments
(304
)
 
44

Net cash (used in) provided by operating activities
(227
)
 
115

Investing activities
 
 
 
Net change in:
 
 
 
  Interest-bearing deposits
34

 
285

  Securities purchased under agreements to resell
(1,000
)
 
250

  Federal funds sold
(3,675
)
 
(525
)
Trading securities:
 
 
 
  Proceeds from maturities
200

 

Available-for-sale securities:
 
 
 
  Proceeds from maturities
87

 
133

Held-to-maturity securities:
 
 
 
  Net change in short-term

 
450

  Proceeds from maturities of long-term
564

 
948

  Purchases of long-term
(1,436
)
 
(437
)
Advances:
 
 
 
  Proceeds from principal collected
48,534

 
32,103

  Made
(43,021
)
 
(25,249
)
Mortgage loans:
 
 
 
  Proceeds from principal collected
38

 
80

Proceeds from sale of foreclosed assets
7

 
2

Purchase of premise, equipment, and software
(1
)
 
(1
)
Net cash provided by investing activities
331

 
8,039

 
 
 
 
 
 
 
 

7


FEDERAL HOME LOAN BANK OF ATLANTA
STATEMENTS OF CASH FLOWS—(Continued)
(Unaudited)
(In millions)

 
For the Three Months Ended March 31,
 
2014
 
2013
Financing activities
 
 
 
Net change in deposits
(280
)
 
(25
)
Net payments on derivatives containing a financing element
(22
)
 
(42
)
Proceeds from issuance of consolidated obligations:
 
 
 
 Discount notes
115,262

 
46,063

 Bonds
18,943

 
17,634

Payments for debt issuance costs
(2
)
 
(2
)
Payments for maturing and retiring consolidated obligations:
 
 
 
 Discount notes
(124,663
)
 
(57,759
)
 Bonds
(11,478
)
 
(17,530
)
Proceeds from issuance of capital stock
1,023

 
763

Payments for repurchase/redemption of capital stock
(1,492
)
 
(1,277
)
Payments for repurchase/redemption of mandatorily redeemable capital stock
(3
)
 
(10
)
Cash dividends paid
(44
)
 
(29
)
Net cash used in financing activities
(2,756
)
 
(12,214
)
Net decrease in cash and due from banks
(2,652
)
 
(4,060
)
Cash and due from banks at beginning of the period
4,374

 
4,083

Cash and due from banks at end of the period
$
1,722

 
$
23

Supplemental disclosures of cash flow information:
 
 
 
 Cash paid for:
 
 
 
Interest
$
49

 
$
66

Affordable Housing Program assessments, net
$
8

 
$
10

 Noncash investing and financing activities:
 
 
 
Net shares reclassified to mandatorily redeemable capital stock
$
2

 
$
4

Transfer of held-to-maturity securities to available-for-sale securities
$

 
$
11

Transfers of mortgage loans to real estate owned
$
5

 
$
8


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

 


8


FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)

Note 1—Basis of Presentation

The accompanying unaudited interim financial statements of the Federal Home Loan Bank of Atlanta (Bank) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and income and expenses during the reporting period. Actual results could be different from these estimates. The foregoing interim financial statements are unaudited; however, in the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the results for the interim periods, have been included. The results of operations for interim periods are not necessarily indicative of results to be expected for the year ending December 31, 2014, or for other interim periods. The unaudited interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2013, which are contained in the Bank’s 2013 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 14, 2014 (Form 10-K).

The Bank has certain financial instruments, including derivative instruments and securities purchased under agreements to resell, that are subject to offset under master netting arrangements or by operation of law. Additional information regarding derivative instruments is provided in Note 13Derivatives and Hedging Activities to the Bank’s interim financial statements. The Bank does not have any offsetting liabilities related to its securities purchased under agreements to resell for the periods presented. Based on the fair value of the related securities held as collateral, the securities purchased under agreements to resell were fully collateralized for the periods presented.

During the three-month period ended March 31, 2014, the Bank made certain enhancements to its allowance for credit loss calculation related to the Bank’s conventional single-family residential mortgage loan portfolio.  The allowance for conventional single-family residential mortgage loans is determined by an analysis (at least quarterly) that includes segregating the portfolio into various aging groups.  For loans that are 60 days or less past due, the Bank calculates a loss severity, default rate, and the expected loss based on individual loan characteristics.  For loans that are more than 60 days past due, the allowance is determined using an automated valuation model.  Inherent in the Bank’s evaluation of loan performance is an analysis of various credit enhancements at the individual master commitment level to determine the credit enhancement available to recover losses on conventional single-family residential mortgage loans under each individual master commitment. 

Additionally, during the three-month period ended March 31, 2014, the Bank classified as a loss and charged-off the portion of outstanding single-family residential mortgage loan balances in excess of the fair value of the underlying property, less costs to sell and adjusted for any available credit enhancements, when the loans are180 days delinquent. These changes did not have a material affect on the Bank's financial condition or results of operations.

A description of all of the Bank’s significant accounting policies is included in Note 2Summary of Significant Accounting Policies to the 2013 audited financial statements contained in the Bank’s Form 10-K. There have been no other material changes to these policies as of March 31, 2014.

Note 2—Recently Issued and Adopted Accounting Guidance
Recently Issued Accounting Guidance

Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. In January 2014, the Financial Accounting Standards Board (FASB) issued guidance intended to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate recognized. The guidance clarifies that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either: (a) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure; or (b) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. This guidance is effective for public business entities for annual periods and interim periods within those annual periods beginning after December 15, 2014. The adoption of this guidance will result in increased disclosures, but is not expected to materially affect the Bank’s financial condition or results of operations.


9

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


Recently Adopted Accounting Guidance

Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date. In February 2013, the FASB issued guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This guidance requires an entity to measure these obligations as the sum of (1) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (2) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The Bank adopted this guidance effective January 1, 2014. The adoption of this guidance did not have any effect on the Bank's financial condition or results of operations.

Note 3—Trading Securities
Major Security Types. Trading securities were as follows:
 
 
As of March 31, 2014
 
As of December 31, 2013
Government-sponsored enterprises debt obligations
$
1,390

 
$
1,601

Another FHLBank’s bond (1)
64

 
65

State or local housing agency debt obligations
1

 
1

Total
$
1,455

 
$
1,667

 ____________
(1) 
The Federal Home Loan Bank of Chicago is the primary obligor of this consolidated obligation bond.
Net unrealized losses on trading securities were as follows:
 
 
 
For the Three Months Ended March 31,
 
 
2014
 
2013
Net unrealized losses on trading securities held at period end
 
$
(14
)
 
$
(24
)

Note 4—Available-for-sale Securities
During the three months ended March 31, 2013, the Bank transferred a private-label residential mortgaged-backed security (MBS) from its held-to-maturity portfolio to its available-for-sale portfolio. This security represents a private-label residential MBS in the Bank’s held-to-maturity portfolio for which the Bank has recorded an other-than-temporary impairment loss. The Bank believes the other-than-temporary impairment loss constitutes evidence of a significant deterioration in the issuer’s creditworthiness. The Bank has no current plans to sell this security nor is the Bank under any requirement to sell this security.
The following table presents information on private-label residential MBS transferred. The amounts below represents the value as of the transfer date.
 
2014
 
2013
 
Amortized    
Cost
 
Other-than-temporary
Impairment
Recognized in
Accumulated Other
Comprehensive Income
 
Estimated
Fair Value
 
Amortized    
Cost
 
Other-than-temporary
Impairment
Recognized in
Accumulated Other
Comprehensive Income
 
Estimated
Fair Value
Transferred at March 31,
$

 
$

 
$

 
$
12

 
$
1

 
$
11


10

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)



Major Security Types. Private-label residential MBS were as follows:
 
 
Amortized    
Cost
 
Other-than-temporary
Impairment
Recognized in
Accumulated Other
Comprehensive Income
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated Fair Value
As of March 31, 2014
$
2,093

 
$
23

 
$
153

 
$

 
$
2,223

As of December 31, 2013
$
2,174

 
$
27

 
$
152

 
$

 
$
2,299


The following tables summarize the private-label residential MBS with unrealized losses. The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
  Number of  
Positions
 
Estimated
  Fair  Value  
 
Gross
  Unrealized  
Losses
 
  Number of  
Positions
 
Estimated
  Fair  Value  
 
Gross
  Unrealized  
Losses
 
  Number of  
Positions
 
Estimated
  Fair  Value  
 
Gross
  Unrealized  
Losses
As of March 31, 2014
2

 
$
61

 
$

 
10

 
$
236

 
$
23

 
12

 
$
297

 
$
23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2013
6

 
$
137

 
$
1

 
10

 
$
243

 
$
26

 
16

 
$
380

 
$
27


A summary of available-for-sale MBS issued by members or affiliates of members, Bank of America Corporation, Charlotte, NC, follows:
 
 
Amortized  
Cost
 
Other-than-temporary  
Impairment
Recognized in
 Accumulated Other
Comprehensive Income
 
Gross
  Unrealized  
Gains
 
Gross
  Unrealized  
Losses
 
Estimated
  Fair  Value  
As of March 31, 2014
$
1,342

 
$
22

 
$
100

 
$

 
$
1,420

 
 
 
 
 
 
 
 
 
 
As of December 31, 2013
$
1,390

 
$
26

 
$
98

 
$

 
$
1,462



11

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


Note 5—Held-to-maturity Securities
Major Security Types. Held-to-maturity securities were as follows:
 
 
As of March 31, 2014
 
As of December 31, 2013
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair  Value
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair  Value
State or local housing agency debt obligations
$
89

 
$
1

 
$

 
$
90

 
$
92

 
$
1

 
$

 
$
93

Government-sponsored enterprises debt obligations
4,668

 
2

 
19

 
4,651

 
3,738

 

 
24

 
3,714

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. agency obligations-guaranteed residential
440

 
6

 

 
446

 
465

 
7

 

 
472

Government-sponsored enterprises residential
14,041

 
101

 
90

 
14,052

 
13,952

 
109

 
115

 
13,946

Private-label residential
1,812

 
14

 
13

 
1,813

 
1,929

 
12

 
20

 
1,921

Total
$
21,050

 
$
124

 
$
122

 
$
21,052

 
$
20,176

 
$
129

 
$
159

 
$
20,146


The following tables summarize the held-to-maturity securities with unrealized losses. The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.
 
 
As of March 31, 2014
 
Less than 12 Months
 
12 Months or More
 
Total
 
Number of
Positions
 
Estimated
Fair  Value
 
Gross
Unrealized
Losses
 
Number of
Positions
 
Estimated
Fair  Value
 
Gross
Unrealized
Losses
 
Number of
Positions
 
Estimated
Fair  Value
 
Gross
Unrealized
Losses
Government-sponsored enterprises debt obligations
11

 
$
1,975

 
$
19

 

 
$

 
$

 
11

 
$
1,975

 
$
19

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government-sponsored enterprises residential
68

 
4,480

 
83

 
2

 
175

 
7

 
70

 
4,655

 
90

Private-label residential
32

 
594

 
7

 
21

 
264

 
6

 
53

 
858

 
13

Total
111

 
$
7,049

 
$
109

 
23

 
$
439

 
$
13

 
134

 
$
7,488

 
$
122

 
 
As of December 31, 2013
 
Less than 12 Months
 
12 Months or More
 
Total
 
Number of
Positions
 
Estimated
Fair  Value
 
Gross
Unrealized
Losses
 
Number of
Positions
 
Estimated
Fair  Value
 
Gross
Unrealized
Losses
 
Number of
Positions
 
Estimated
Fair  Value
 
Gross
Unrealized
Losses
Government-sponsored enterprises debt obligations
9

 
$
1,970

 
$
24

 

 
$

 
$

 
9

 
$
1,970

 
$
24

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government-sponsored enterprises residential
65

 
3,932

 
108

 
1

 
147

 
7

 
66

 
4,079

 
115

Private-label residential
40

 
817

 
12

 
18

 
241

 
8

 
58

 
1,058

 
20

Total
114

 
$
6,719

 
$
144

 
19

 
$
388

 
$
15

 
133

 
$
7,107

 
$
159



12

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


Redemption Terms. The amortized cost and estimated fair value of held-to-maturity securities by contractual maturity are shown below. Expected maturities of some securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

 
As of March 31, 2014
 
As of December 31, 2013
 
Amortized
Cost
 
Estimated
Fair Value
 
Amortized
Cost
 
Estimated
Fair Value
Non-mortgage-backed securities:
 
 
 
 
 
 
 
Due in one year or less
$
633

 
$
633

 
$
430

 
$
430

Due after one year through five years
4,124

 
4,108

 
3,400

 
3,377

Total non-mortgage-backed securities
4,757

 
4,741

 
3,830

 
3,807

Mortgage-backed securities
16,293

 
16,311

 
16,346

 
16,339

Total
$
21,050

 
$
21,052

 
$
20,176

 
$
20,146


A summary of held-to-maturity MBS issued by members or affiliates of members, Bank of America Corporation, Charlotte, NC, follows:
 
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
As of March 31, 2014
 
$
578

 
$
4

 
$
5

 
$
577

 
 
 
 
 
 
 
 
 
As of December 31, 2013
 
$
619

 
$
4

 
$
8

 
$
615


Note 6—Other-than-temporary Impairment

The Bank evaluates its individual available-for-sale and held-to-maturity securities holdings in an unrealized loss position for other-than-temporary impairment on a quarterly basis. As part of this process, the Bank considers its intent to sell each debt security and whether it is more likely than not the Bank will be required to sell the security before its anticipated recovery. If either of these conditions is met, the Bank recognizes the maximum impairment loss in earnings which is equal to the entire difference between the security’s amortized cost basis and its fair value as of the Statements of Condition dates. For securities in an unrealized loss position that meet neither of these conditions, the Bank evaluates whether there is other-than-temporary impairment by performing an analysis to determine if any of these securities will incur a credit loss, which could be up to the difference between the security’s amortized cost basis and its fair value.
Mortgage-backed Securities. The Bank’s investments in MBS consist of U.S. agency guaranteed securities and senior tranches of private-label MBS. The Bank has increased exposure to the risk of loss on its investments in MBS when the loans backing the MBS exhibit high rates of delinquency and foreclosures, as well as losses on the sale of foreclosed properties. The Bank regularly requires high levels of credit enhancements from the structure of the collateralized mortgage obligation to reduce its risk of loss on such securities. Credit enhancements are defined as the percentage of subordinate tranches, overcollateralization, or excess spread, or the support of monoline insurance, if any, in a security structure that will absorb the losses before the security the Bank purchased will take a loss. The Bank does not purchase credit enhancements for its MBS from monoline insurance companies.
The Bank’s investments in private-label MBS were rated “AAA” (or its equivalent) by a nationally recognized statistical rating organization (NRSRO), such as Moody’s Investors Service (Moody’s) and Standard and Poor’s Ratings Services (S&P), at their purchase dates. The “AAA”-rated securities achieved their ratings through credit enhancement, overcollateralization, and senior-subordinated shifting interest features; the latter results in subordination of payments by junior classes to ensure cash flows to the senior classes. The ratings on all of the Bank’s private-label MBS have changed since their purchase dates.
Non-private-label MBS. The unrealized losses related to U.S. agency MBS are caused by interest rate changes and not credit quality. These securities are guaranteed by government agencies or government-sponsored enterprises (GSEs) and the Bank does not expect these securities to be settled at a price less than their amortized cost basis. In addition, the Bank does not

13

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


intend to sell these investments and it is not more likely than not that the Bank will be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The Bank does not consider these investments to be other-than-temporarily impaired as of March 31, 2014.
Private-label MBS. To assess whether the entire amortized cost basis of its private-label MBS will be recovered, the Bank performs a cash flow analysis for each of its private-label MBS. In performing the cash flow analysis for each of these securities, the Bank uses two third-party models. The first model considers borrower characteristics and the particular attributes of the loans underlying the Bank’s securities, in conjunction with assumptions about future changes in home prices and interest rates, to project prepayments, defaults, and loss severities. A significant input to the first model is the forecast of future housing price changes for the relevant states and core based statistical areas (CBSAs), which are based upon an assessment of the individual housing markets. The term CBSA refers collectively to metropolitan and micropolitan statistical areas as defined by the United States Office of Management and Budget; as currently defined, a CBSA must contain at least one urban area of 10,000 or more people. The Bank’s housing price forecast as of March 31, 2014 included a short-term housing price forecast with projected changes ranging from a decrease of three percent to an increase of nine percent over the 12 month period beginning January 1, 2014.
For the vast majority of markets, the short-term housing price forecast has changes from a decrease of one percent to an increase of four percent. Thereafter, home prices were projected to recover using one of five different recovery paths. The following table presents projected home price recovery ranges by months following the short-term housing price forecast:
 
Months
 
Annualized Rates (%)    
1 to 6
 
0.00 to 3.00
7 to 12
 
1.00 to 4.00
13 to 18  
 
2.00 to 4.00
19 to 30  
 
2.00 to 5.00
31 to 54 
 
2.00 to 6.00
Thereafter  
 
2.30 to 5.60
 
The month-by-month projections of future loan performance derived from the first model, which reflect projected prepayments, defaults, and loss severities, were then input into a second model that allocates the projected loan level cash flows and losses to the various security classes in the securitization structure in accordance with its prescribed cash flow and loss allocation rules. The model classifies securities based on current characteristics and performance, which may be different from the securities’ classification as determined by the originator at the time of origination.
At each quarter end, the Bank compares the present value of the cash flows (discounted at the securities' effective yield) expected to be collected with respect to its private-label MBS to the amortized cost basis of the security to determine whether a credit loss exists. For the Bank’s variable rate and hybrid private-label MBS, the Bank uses a forward interest rate curve to project the future estimated cash flows. The Bank then uses the effective interest rate for the security prior to impairment for determining the present value of the future estimated cash flows. For securities previously identified as other-than-temporarily impaired, the Bank updates its estimate of future estimated cash flows on a quarterly basis.
The following table represents a summary of the significant inputs used to measure the amount of the credit loss recognized in earnings for the one Alt-A security for which an other-than-temporary impairment was determined to have occurred during the three-month period ended March 31, 2014:
 
 
 
Significant Inputs
 
 
 
Prepayment Rate
 
Default Rates
 
Loss Severities
 
Current Credit Enhancement
Year of
Securitization
 
Weighted    
Average
(%)
 
Weighted    
Average
(%)
 
Weighted    
Average
(%)
 
Weighted    
Average
(%)
2007
 
12.71
 
27.07
 
42.58
 
0.00


14

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


The following table presents a roll-forward of the amount of credit losses on the Bank’s investment securities recognized in earnings during the life of the securities for which a portion of the other-than-temporary loss was recognized in accumulated other comprehensive income:
 
 
 
For the Three Months Ended March 31,
 
 
2014
 
2013
Balance, beginning of period
 
$
574

 
$
586

Amount related to credit loss for which an other-than-temporary impairment was previously recognized
 
1

 

Increase in cash flows expected to be collected, recognized over the remaining life of the securities
 
(8
)
 

Balance, end of period
 
$
567

 
$
586


Certain other private-label MBS that have not been designated as other-than-temporarily impaired have experienced unrealized losses and decreases in fair value due to interest rate volatility, illiquidity in the marketplace, and general disruption in the U.S. mortgage markets. These declines in fair value are considered temporary as the Bank expects to recover the amortized cost basis of the securities, the Bank does not intend to sell these securities, and it is not more likely than not that the Bank will be required to sell these securities before the anticipated recovery of the securities’ remaining amortized cost basis, which may be at maturity. This assessment is based on the fact that the Bank has sufficient capital and liquidity to operate its business and has no need to sell these securities, nor has the Bank entered into any contractual constraints that would require the Bank to sell these securities.

Note 7—Advances
Redemption Terms. The Bank had advances outstanding, as summarized below.  
 
As of March 31, 2014
 
As of December 31, 2013
Overdrawn demand deposit accounts
$

 
$
2

Due in one year or less
39,597

 
51,331

Due after one year through two years
10,732

 
5,366

Due after two years through three years
6,489

 
6,136

Due after three years through four years
9,483

 
8,495

Due after four years through five years
4,211

 
5,088

Due after five years
11,856

 
11,464

Total par value
82,368

 
87,882

Discount on AHP(1) advances
(8
)
 
(8
)
Discount on EDGE(2) advances
(6
)
 
(7
)
Hedging adjustments
1,817

 
1,726

Deferred commitment fees
(5
)
 
(5
)
Total
$
84,166

 
$
89,588

___________
(1) The Affordable Housing Program
(2) The Economic Development and Growth Enhancement program


15

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


The following table summarizes advances by year of contractual maturity or, for convertible advances, next conversion date:
 
 
As of March 31, 2014
 
As of December 31, 2013
Overdrawn demand deposit accounts
$

 
$
2

Due or convertible in one year or less
42,741

 
54,522

Due or convertible after one year through two years
10,803

 
5,414

Due or convertible after two years through three years
5,922

 
5,867

Due or convertible after three years through four years
7,614

 
6,643

Due or convertible after four years through five years
3,614

 
4,168

Due or convertible after five years
11,674

 
11,266

Total par value
$
82,368

 
$
87,882


Interest-rate Payment Terms. The following table details interest-rate payment terms for advances:
 
 
As of March 31, 2014
 
As of December 31, 2013
Fixed-rate:
 
 
 
 Due in one year or less
$
31,869

 
$
46,343

 Due after one year
28,517

 
28,535

Total fixed-rate
60,386

 
74,878

Variable-rate:
 
 
 
 Due in one year or less
7,727

 
4,990

 Due after one year
14,255

 
8,014

Total variable-rate
21,982

 
13,004

Total par value
$
82,368

 
$
87,882


Credit Risk. The Bank’s potential credit risk from advances is concentrated in commercial banks, thrifts, and credit unions and further is concentrated in certain larger borrowing relationships. As of March 31, 2014 and December 31, 2013, the concentration of the Bank’s advances was $61,214 and $65,472, respectively, to 10 member institutions, representing 74.3 percent and 74.5 percent, respectively, of total advances outstanding.
Based on the collateral pledged as security for advances, the Bank's credit analysis of members’ financial condition, and prior repayment history, no allowance for credit losses on advances was deemed necessary by the Bank as of March 31, 2014 and December 31, 2013. No advance was past due as of March 31, 2014 and December 31, 2013.

Note 8—Mortgage Loans Held for Portfolio

The following table presents information on mortgage loans held for portfolio by contractual maturity at the time of purchase:
 
 
As of March 31, 2014
 
As of December 31, 2013
Fixed-rate medium-term(1) single-family residential mortgage loans
 
$
137

 
$
150

Fixed-rate long-term single-family residential mortgage loans
 
748

 
781

Total unpaid principal balance
 
885

 
931

Premiums
 
3

 
3

Discounts
 
(5
)
 
(5
)
Total
 
$
883

 
$
929

____________
(1) Medium-term is defined as a term of 15 years or less.


16

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


The following table details the unpaid principal balance of mortgage loans held for portfolio by collateral or guarantee type:
 
 
As of March 31, 2014
 
As of December 31, 2013
Conventional loans
 
$
822

 
$
864

Government-guaranteed or insured loans
 
63

 
67

Total unpaid principal balance
 
$
885

 
$
931


For information related to the Bank's credit risk on mortgage loans and allowance for credit losses, see Note 9Allowance for Credit Losses to the Bank’s interim financial statements for additional information.

Note 9—Allowance for Credit Losses

The activity in the allowance for credit losses was as follows:

 
 
For the Three Months Ended March 31, 2014
 
 
Conventional Single-family Residential Mortgage Loans
Balance, beginning of period
 
$
11

Reversal for credit losses
 
(4
)
Charge-offs
 
(3
)
Balance, end of period
 
$
4


 
 
For the Three Months Ended March 31, 2013
 
 
Conventional Single-family Residential Mortgage Loans
 
Multifamily Residential Mortgage Loans
 
Total
Balance, beginning of period
 
$
10

 
$
1

 
$
11

Provision for credit losses
 
2

 

 
2

Balance, end of period
 
$
12

 
$
1

 
$
13


The recorded investment in mortgage loans by impairment methodology was as follows:

 
 
As of March 31, 2014
 
 
Conventional Single-family Residential Mortgage Loans
 
Government-guaranteed or Insured Residential Mortgage Loans
 
Total
Allowance for credit losses:
 
 
 
 
 
 
   Individually evaluated for impairment
 
$
1

 
$

 
$
1

   Collectively evaluated for impairment
 
3

 

 
3

Total allowance for credit losses
 
$
4

 
$

 
$
4

Recorded investment:
 
 
 
 
 
 
   Individually evaluated for impairment
 
$
15

 
$

 
$
15

   Collectively evaluated for impairment
 
808

 
64

 
872

Total recorded investment (1)
 
$
823

 
$
64

 
$
887

____________
(1) The difference between the recorded investment and the carrying value of total mortgage loans of $4 relates to accrued interest.


17

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


 
 
As of December 31, 2013
 
 
Conventional Single-family Residential Mortgage Loans
 
Government-guaranteed or Insured Residential Mortgage Loans
 
Total
Allowance for credit losses:
 
 
 
 
 
 
   Individually evaluated for impairment
 
$
2

 
$

 
$
2

   Collectively evaluated for impairment
 
9

 

 
9

Total allowance for credit losses
 
$
11

 
$

 
$
11

Recorded investment:
 
 
 
 
 
 
   Individually evaluated for impairment
 
$
15

 
$

 
$
15

   Collectively evaluated for impairment
 
851

 
67

 
918

Total recorded investment (1)
 
$
866

 
$
67

 
$
933

____________
(1) The difference between the recorded investment and the carrying value of total mortgage loans of $4 relates to accrued interest.


Key credit quality indicators for mortgage loans include the migration of past due loans, nonaccrual loans, loans in process of foreclosure, and impaired loans. The tables below summarize the Bank's recorded investment in mortgage loans by these key credit quality indicators:
 
As of March 31, 2014
 
Conventional Single-family Residential Mortgage Loans
 
Government-guaranteed or Insured Single-family Residential Mortgage Loans
 
Total
Past due 30-59 days
$
25

 
$
6

 
$
31

Past due 60-89 days
8

 
2

 
10

Past due 90 days or more
46

 
8

 
54

Total past due mortgage loans
79

 
16

 
95

Total current mortgage loans
744

 
48

 
792

Total mortgage loans (1)
$
823

 
$
64

 
$
887

Other delinquency statistics:
 
 
 
 
 
  In process of foreclosure (2)
$
32

 
$
3

 
$
35

  Seriously delinquent rate (3)
5.61
%
 
13.19
%
 
6.15
%
  Past due 90 days or more and still accruing interest (4)
$

 
$
8

 
$
8

  Loans on nonaccrual status (5)
$
46

 
$

 
$
46

____________
(1) The difference between the recorded investment and the carrying value of total mortgage loans of $4 relates to accrued interest.
(2) Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in lieu has been reported. Loans in the process of foreclosure are included in past due or current loans depending 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 loan portfolio segment.
(4) Mortgage loans insured or guaranteed by the Federal Housing Administration or the Department of Veterans Affairs.
(5) Represents mortgage loans with contractual principal or interest payments 90 days or more past due and not accruing interest.


18

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


 
As of December 31, 2013
 
Conventional Single-family Residential Mortgage Loans
 
Government-guaranteed or Insured Single-family Residential Mortgage Loans
 
Total
Past due 30-59 days
$
30

 
$
7

 
$
37

Past due 60-89 days
9

 
3

 
12

Past due 90 days or more
51

 
9

 
60

Total past due mortgage loans
90

 
19

 
109

Total current mortgage loans
776

 
48

 
824

Total mortgage loans (1)
$
866

 
$
67

 
$
933

Other delinquency statistics:
 
 
 
 
 
  In process of foreclosure (2)
$
38

 
$
3

 
$
41

  Seriously delinquent rate (3)
5.90
%
 
13.13
%
 
6.42
%
Past due 90 days or more and still accruing interest (4)
$

 
$
9

 
$
9

  Loans on nonaccrual status (5)
$
51

 
$

 
$
51

____________
(1) The difference between the recorded investment and the carrying value of total mortgage loans of $4 relates to accrued interest.
(2) Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in lieu has been reported. Loans in the process of foreclosure are included in past due or current loans depending 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 loan portfolio segment.
(4) Mortgage loans insured or guaranteed by the Federal Housing Administration or the Department of Veterans Affairs.
(5) Represents mortgage loans with contractual principal or interest payments 90 days or more past due and not accruing interest.

A troubled debt restructuring is considered to have occurred when a concession is granted to a borrower for economic or legal reasons related to the borrower's financial difficulties and that concession would not have been considered otherwise. The Bank has granted a concession when it does not expect to collect all amounts due under the original contract as a result of the restructuring. The Bank's conventional single-family residential mortgage loan troubled debt restructurings primarily involve modifying the borrower's monthly payment for a period of up to 36 months to achieve a target housing expense ratio of 31.0 percent of their qualifying monthly income. The outstanding principal balance is first re-amortized to reflect a principal and interest payment for a term not to exceed 40 years. This would result in a balloon payment at the original maturity date of the loan as the maturity date and number of remaining monthly payments are not adjusted. If the 31.0 percent housing expense ratio is not achieved through re-amortization, the interest rate is reduced in 0.125 percent increments below the original note rate, to a floor rate of 3.00 percent, resulting in reduced principal and interest payments, for the temporary payment modification period of up to 36 months, until the target 31.0 percent housing expense ratio is met. A conventional single-family residential mortgage loan in which the borrower filed for Chapter 7 bankruptcy and the bankruptcy court discharged the borrower's obligation to the Bank is considered a troubled debt restructuring.

The table below presents the Bank's recorded investment balance in troubled debt restructured loans as of March 31, 2014 and December 31, 2013:
 
 
 
Performing
 
Non-performing
 
Total
Conventional single-family residential loans
 
 
$
11

 
$
4

 
$
15


Due to the minimal change in terms of modified loans (i.e., no write-offs of principal), the Bank's pre-modification recorded investment was not materially different than the post-modification recorded investment in troubled debt restructuring during the three months ended March 31, 2014 and 2013.

During the three months ended March 31, 2014 and 2013, certain conventional single-family residential mortgage loans modified as troubled debt restructurings and experiencing a payment default within the previous 12 months were $2 and $0 respectively. A payment default on a troubled debt restructuring is considered to have occurred if the contractually due principal or interest is 60 days or more past due at any time during the reported periods.

19

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)



The following tables summarize the recorded investment, unpaid principal balance, and related allowance for credit losses for impaired loans as of March 31, 2014 and December 31, 2013, and the average recorded investment on these loans during the three months ended March 31, 2014 and 2013. Related interest income recognized on these loans during the three months ended March 31, 2014 and 2013 was less than $1.
 
 
As of March 31, 2014
 
As of December 31, 2013
 
 
Recorded Investment
 
Unpaid Principal Balance
 
Related Allowance
 
Recorded Investment
 
Unpaid Principal Balance
 
Related Allowance
With no related allowance
 
 
 
 
 
 
 
 
 
 
 
 
Conventional single-family residential loans
 
$
8

 
$
8

 
$

 
$

 
$

 
$

With an allowance
 
 
 
 
 
 
 
 
 
 
 
 
Conventional single-family residential loans
 
7

 
7

 
1

 
15

 
15

 
2

Total
 
$
15

 
$
15

 
$
1

 
$
15

 
$
15

 
$
2


 
 
For the Three Months Ended March 31,
 
 
2014
 
2013
 
 
Average Recorded Investment
 
Average Recorded Investment
With no related allowance
 
 
 
 
Conventional single-family residential loans
 
$
8

 
$

With an allowance
 
 
 
 
Conventional single-family residential loans
 
7

 
12

Other loans
 

 
2

Total
 
$
15

 
$
14


Note 10—Consolidated Obligations
Consolidated obligations, consisting of consolidated obligation bonds and discount notes, are the joint and several obligations of the 12 Federal Home Loan Banks (FHLBanks) and are backed only by the financial resources of the FHLBanks. The Federal Home Loan Banks Office of Finance (Office of Finance) tracks the amount of debt issued on behalf of each FHLBank. In addition, the Bank separately tracks and records as a liability its specific portion of consolidated obligations for which it is the primary obligor.
Interest-rate Payment Terms. The following table details the Bank’s consolidated obligation bonds by interest-rate payment type: 
 
As of March 31, 2014
 
As of December 31, 2013
Fixed-rate
$
68,051

 
$
59,885

Step up/down
7,269

 
7,617

Simple variable-rate
12,605

 
13,005

Variable-rate capped floater
45

 
45

Fixed-rate that converts to variable-rate
10

 

Total par value
$
87,980

 
$
80,552



20

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


Redemption Terms. The following is a summary of the Bank’s participation in consolidated obligation bonds outstanding, by year of contractual maturity:
 
 
As of March 31, 2014
 
As of December 31, 2013
 
Amount
 
Weighted-
average
Interest Rate (%)    
 
Amount
 
Weighted-
average
Interest Rate (%)    
Due in one year or less
$
46,777

 
0.47
 
$
41,725

 
0.50
Due after one year through two years
8,932

 
0.74
 
9,485

 
0.67
Due after two years through three years
10,488

 
1.93
 
7,503

 
2.21
Due after three years through four years
7,822

 
2.45
 
6,355

 
2.81
Due after four years through five years
4,829

 
1.65
 
5,150

 
1.67
Due after five years
9,132

 
1.98
 
10,334

 
1.92
Total par value
87,980

 
1.08
 
80,552

 
1.13
Premiums
96

 
 
 
82

 
 
Discounts
(24
)
 
 
 
(24
)
 
 
Hedging adjustments
224

 
 
 
118

 
 
Total
$
88,276

 
 
 
$
80,728

 
 

The Bank’s consolidated obligation bonds outstanding by call feature:
 
 
As of March 31, 2014
 
As of December 31, 2013
Noncallable
$
61,196

 
$
56,569

Callable
26,784

 
23,983

Total par value
$
87,980

 
$
80,552


The following table summarizes the Bank’s consolidated obligation bonds outstanding, by year of contractual maturity or, for callable consolidated obligation bonds, next call date:

 
As of March 31, 2014
 
As of December 31, 2013
Due or callable in one year or less
$
67,451

 
$
59,458

Due or callable after one year through two years
7,458

 
7,795

Due or callable after two years through three years
4,311

 
4,491

Due or callable after three years through four years
6,156

 
6,095

Due or callable after four years through five years
1,641

 
1,571

Due or callable after five years
963

 
1,142

Total par value
$
87,980

 
$
80,552


Consolidated Obligation Discount Notes. Consolidated obligation discount notes are issued to raise short-term funds. Consolidated obligation discount notes are consolidated obligations with contractual maturities of up to one year. These consolidated obligation discount notes are issued at less than their face amounts and redeemed at par value when they mature.

21

FEDERAL HOME LOAN BANK OF ATLANTA
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions)


The Bank’s participation in consolidated obligation discount notes was as follows:
 
 
Book Value
 
Par Value
 
Weighted-average
Interest Rate (%)
As of March 31, 2014
$
22,801

 
$
22,804

 
0.09
As of December 31, 2013
$
32,202

 
$
32,208

 
0.11

Note 11—Capital and Mandatorily Redeemable Capital Stock
Capital. The Bank was in compliance with the Federal Housing Finance Agency's (Finance Agency) regulatory capital rules and requirements as shown in the following table:
 
 
As of March 31, 2014
 
As of December 31, 2013
 
Required    
 
Actual        
 
Required    
 
Actual        
Risk based capital
$
2,070

 
$
6,125

 
$
2,246

 
$
6,563

Total capital-to-assets ratio
4.00
%
 
5.13
%
 
4.00
%
 
5.37
%
Total regulatory capital (1)
$
4,779

 
$
6,125

 
$
4,893

 
$
6,563

Leverage ratio
5.00
%
 
7.69
%
 
5.00
%
 
8.05
%
Leverage capital
$
5,973

 
$
9,187

 
$
6,116

 
$
9,845

___________
(1) 
Mandatorily redeemable capital stock is considered capital for regulatory purposes, and “total regulatory capital” includes the Bank’s $23 and $24 in mandatorily redeemable capital stock as of March 31, 2014 and December 31, 2013, respectively.

Mandatorily Redeemable Capital Stock. The following table provides the activity in mandatorily redeemable capital stock:

 
For the Three Months Ended March 31,
 
2014
 
2013
Balance, beginning of period
$
24

 
$
40

Capital stock subject to mandatory redemption reclassified from equity during the period due to:
 
 
 
  Attainment of non-member status
2

 
4

Repurchase/redemption of mandatorily redeemable capital stock
(3
)
 
(10
)