Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Consolidated obligations are backed only by the financial resources of the FHLBanks. At any time, the Finance Agency may require any FHLBank to make principal or interest payments due on any consolidated obligation, whether or not the primary obligor FHLBank has defaulted on the payment of that obligation. No FHLBank has ever had to assume or pay the consolidated obligation of another FHLBank.

The par value of the other FHLBanks’ outstanding consolidated obligations for which the Bank is jointly and severally liable was $907,877 and $886,081 as of June 30, 2019 and December 31, 2018, respectively, exclusive of the Bank’s own outstanding consolidated obligations. None of the other FHLBanks defaulted on their consolidated obligations, the Finance Agency was not required to allocate any obligation among the FHLBanks, and no amount of the joint and several obligation was fixed as of June 30, 2019 and December 31, 2018. Accordingly, the Bank has not recognized a liability for its joint and several obligation related to the other FHLBanks’ consolidated obligations as of June 30, 2019 and December 31, 2018.

The following table presents the Bank’s outstanding commitments, which represent off-balance sheet obligations.



	As of June 30, 2019						As of December 31, 2018
	Expire Within One Year		Expire After One Year		Total		Expire Within One Year		Expire After One Year		Total
Standby letters of credit ⁽¹⁾	$	9,672	$	15,531	$	25,203	$	12,334	$	17,974	$	30,308
Commitments to fund additional advances	361		—		361		48		—		48
Unsettled consolidated obligation bonds, at par ⁽²⁾	25		—		25		640		—		640
Unsettled consolidated obligation discount notes, at par ⁽²⁾	—		—		—		750		—		750

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⁽¹⁾	“Expire Within One Year” includes 14 standby letters of credit for a total of $36 and $37 as of June 30, 2019 and December 31, 2018, respectively, which have no stated maturity date and are subject to renewal on an annual basis.


⁽²⁾	Expiration is based on settlement period rather than underlying contractual maturity of consolidated obligations.

The Bank monitors the creditworthiness of its standby letters of credit based on an evaluation of the member. In addition, standby letters of credit are fully collateralized from the time of issuance. The Bank has established parameters for the measurement, review, classification, and monitoring of credit risk related to these standby letters of credit that result in an internal credit rating, which focuses primarily on an institution’s overall financial health and takes into account the quality of assets, earnings, and capital position. In general, borrowers categorized into the highest risk rating category have more restrictions on the types of collateral that they may use to secure standby letters of credit, may be required to maintain higher collateral maintenance levels and deliver loan collateral, and may face more stringent collateral reporting requirements.

The carrying value of the guarantees related to standby letters of credit is recorded in “Other liabilities” on the Statements of Condition and amounted to $80 and $102 as of June 30, 2019 and December 31, 2018, respectively. Based on the Bank’s credit analyses and collateral requirements, the Bank does not deem it necessary to record any additional liability on the Statements of Condition for these commitments.

The Bank is subject to legal proceedings arising in the normal course of business. After consultation with legal counsel, management does not anticipate, as of the date of the financial statements, that the ultimate liability, if any, arising out of these matters will have a material effect on the Bank’s financial condition or results of operations.