10-Q 1 ind3311410-q.htm 10-Q IND 3/31/14 10-Q



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
 

x 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

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

Commission File Number:  000-51404
 
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
(Exact name of registrant as specified in its charter)
 
Federally chartered corporation
(State or other jurisdiction of incorporation or organization)
 
35-6001443
(I.R.S. employer identification number)
8250 Woodfield Crossing Boulevard
Indianapolis, IN
(Address of principal executive offices)
 
46240
(Zip code)
(317) 465-0200
(Registrant's telephone number, including area code)

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.

x  Yes            o  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

x   Yes            o  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 definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
o  Large accelerated filer
o  Accelerated filer
x Non-accelerated filer (Do not check if a smaller reporting company)
o  Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o  Yes            x  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 April 30, 2014

Class B Stock, par value $100
16,678,266




Table of Contents
Page
 
 
Number
PART I.
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 1 - Summary of Significant Accounting Policies
 
Note 2 - Recently Adopted and Issued Accounting Guidance
 
Note 3 - Available-for-Sale Securities
 
Note 4 - Held-to-Maturity Securities
 
Note 5 - Other-Than-Temporary Impairment
 
Note 6 - Advances
 
Note 7 - Mortgage Loans Held for Portfolio
 
Note 8 - Allowance for Credit Losses
 
Note 9 - Derivatives and Hedging Activities
 
Note 10 - Deposits
 
Note 11 - Consolidated Obligations
 
Note 12 - Affordable Housing Program
 
Note 13 - Capital
 
Note 14 - Accumulated Other Comprehensive Income (Loss)
 
Note 15 - Segment Information
 
Note 16 - Estimated Fair Values
 
Note 17 - Commitments and Contingencies
 
Note 18 - Transactions with Related Parties
 
Item 2.
 
 
 
 
 
 
 
 
 
 
 
 
Item 3.
Item 4.
PART II.
 
Item 1.
Item 1A.
Item 6.
 
 
Exhibit 31.1
 
 
Exhibit 31.2
 
 
Exhibit 31.3
 
 
Exhibit 32
 




PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Federal Home Loan Bank of Indianapolis
Statements of Condition
(Unaudited, $ amounts and shares in thousands, except par value)
 
March 31,
2014
 
December 31,
2013
Assets:
 
 
 
Cash and Due from Banks
$
961,511

 
$
3,318,564

Interest-Bearing Deposits
495

 
485

Securities Purchased Under Agreements to Resell
1,300,000

 

Federal Funds Sold
225,000

 

Available-for-Sale Securities (Notes 3 and 5)
3,627,253

 
3,632,835

Held-to-Maturity Securities (Estimated Fair Values of $7,056,291 and $7,244,318, respectively) (Notes 4 and 5)
6,954,032

 
7,146,250

Advances (Note 6)
17,128,503

 
17,337,418

Mortgage Loans Held for Portfolio, net of allowance for loan losses of $(3,500) and $(4,500), respectively (Notes 7 and 8)
6,175,018

 
6,189,804

Accrued Interest Receivable
77,405

 
79,072

Premises, Software, and Equipment, net
36,656

 
36,278

Derivative Assets, net (Note 9)
6,633

 
7,214

Other Assets
29,002

 
38,270

 
 
 
 
Total Assets
$
36,521,508

 
$
37,786,190

 
 
 
 
Liabilities:
 

 
 
Deposits (Note 10):
$
1,168,772

 
$
1,066,632

Consolidated Obligations (Note 11):
 

 
 
Discount Notes
6,417,540

 
7,434,890

Bonds
26,190,569

 
26,583,925

Total Consolidated Obligations
32,608,109

 
34,018,815

Accrued Interest Payable
85,681

 
80,757

Affordable Housing Program Payable (Note 12)
43,130

 
42,778

Derivative Liabilities, net (Note 9)
114,651

 
109,744

Mandatorily Redeemable Capital Stock (Note 13)
16,786

 
16,787

Other Liabilities
66,963

 
67,074

Total Liabilities
34,104,092

 
35,402,587

 
 
 
 
Commitments and Contingencies (Note 17)


 


 
 
 
 
Capital (Note 13):
 

 
 
Capital Stock Putable (at par value of $100 per share):
 
 
 
Class B-1 issued and outstanding shares: 16,118 and 16,058, respectively
1,611,849

 
1,605,796

Class B-2 issued and outstanding shares: 40 and 41, respectively
4,008

 
4,135

     Total Capital Stock Putable
1,615,857

 
1,609,931

Retained Earnings:
 
 
 
Unrestricted
671,277

 
666,515

Restricted
92,169

 
85,437

Total Retained Earnings
763,446

 
751,952

Total Accumulated Other Comprehensive Income (Loss) (Note 14)
38,113

 
21,720

Total Capital
2,417,416

 
2,383,603

 
 
 
 
Total Liabilities and Capital
$
36,521,508

 
$
37,786,190


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

1



Federal Home Loan Bank of Indianapolis
Statements of Income
(Unaudited, $ amounts in thousands)
 
Three Months Ended March 31,
 
2014
 
2013
Interest Income:
 
 
 
Advances
$
28,116

 
$
32,852

Prepayment Fees on Advances, net
1,049

 
982

Interest-Bearing Deposits
54

 
225

Securities Purchased Under Agreements to Resell
89

 
555

Federal Funds Sold
280

 
638

Available-for-Sale Securities
6,146

 
9,062

Held-to-Maturity Securities
32,110

 
35,942

Mortgage Loans Held for Portfolio, net
57,297

 
63,134

Other Interest Income, net
114

 
742

Total Interest Income
125,255

 
144,132

Interest Expense:
 
 
 
Consolidated Obligation Discount Notes
1,402

 
2,244

Consolidated Obligation Bonds
76,442

 
79,506

Deposits
23

 
22

Mandatorily Redeemable Capital Stock
610

 
2,408

Total Interest Expense
78,477

 
84,180

 
 
 
 
Net Interest Income
46,778

 
59,952

Provision for (Reversal of) Credit Losses
(704
)
 
(4,356
)
 
 
 
 
Net Interest Income After Provision for Credit Losses
47,482

 
64,308

 
 
 
 
Other Income (Loss):
 
 
 
Total Other-Than-Temporary Impairment Losses

 

Non-Credit Portion Reclassified to (from) Other Comprehensive Income (Loss), net
(170
)
 
(1,924
)
Net Other-Than-Temporary Impairment Losses, credit portion
(170
)
 
(1,924
)
Net Gains (Losses) on Derivatives and Hedging Activities
2,968

 
(3,772
)
Service Fees
215

 
228

Standby Letters of Credit Fees
159

 
166

Other, net (Note 17)
2,713

 
304

Total Other Income (Loss)
5,885

 
(4,998
)
 
 
 
 
Other Expenses:
 
 
 
Compensation and Benefits
9,947

 
9,322

Other Operating Expenses
4,044

 
4,008

Federal Housing Finance Agency
799

 
820

Office of Finance
818

 
807

Other
291

 
258

Total Other Expenses
15,899

 
15,215

 
 
 
 
Income Before Assessments
37,468

 
44,095

 
 
 
 
Affordable Housing Program Assessments
3,808

 
4,650

 
 
 
 
Net Income
$
33,660

 
$
39,445


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

2



Federal Home Loan Bank of Indianapolis
Statements of Comprehensive Income
(Unaudited, $ amounts in thousands)
 
Three Months Ended March 31,
 
2014
 
2013
Net Income
$
33,660

 
$
39,445

 
 
 
 
Other Comprehensive Income:
 
 
 
Net Change in Unrealized Gains (Losses) on Available-for-Sale Securities
12,039

 
16,935

 
 
 
 
Non-Credit Portion of Other-Than-Temporary Impairment Losses on Available-for-Sale Securities:
 
 
 
Reclassification of Non-Credit Portion to Other Income (Loss)
170

 
1,924

Net Change in Fair Value Not in Excess of Cumulative Non-Credit Losses
(219
)
 
15,838

Unrealized Gains (Losses)
4,254

 
17,500

Net Non-Credit Portion of Other-Than-Temporary Impairment Losses on Available-for-Sale Securities
4,205

 
35,262

 
 
 
 
Non-Credit Portion of Other-Than-Temporary Impairment Losses on Held-to-Maturity Securities:
 
 
 
Accretion of Non-Credit Portion
13

 
20

Net Non-Credit Portion of Other-Than-Temporary Impairment Losses on Held-to-Maturity Securities
13

 
20

 
 
 
 
Pension Benefits, net
136

 
427

 
 
 
 
Total Other Comprehensive Income
16,393

 
52,644

 
 
 
 
Total Comprehensive Income
$
50,053

 
$
92,089



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

3



Federal Home Loan Bank of Indianapolis
Statements of Capital
Three Months Ended March 31, 2013 and 2014
(Unaudited, $ amounts and shares in thousands)

 
 
Capital Stock
Class B Putable
 
Retained Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Total
Capital
 
 
Shares
 
Par Value
 
Unrestricted
 
Restricted
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2012
 
16,343

 
$
1,634,300

 
$
549,773

 
$
41,827

 
$
591,600

 
$
(10,058
)
 
$
2,215,842

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Comprehensive Income
 
 
 
 
 
31,556

 
7,889

 
39,445

 
52,644

 
92,089

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from Sale of Capital Stock
 
437

 
43,706

 
 
 
 
 
 
 
 
 
43,706

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Dividends on Capital Stock
(3.50% annualized)
 
 
 
 
 
(14,324
)
 

 
(14,324
)
 
 
 
(14,324
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, March 31, 2013
 
16,780

 
$
1,678,006

 
$
567,005

 
$
49,716

 
$
616,721

 
$
42,586

 
$
2,337,313

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2013
 
16,099

 
$
1,609,931

 
$
666,515

 
$
85,437

 
$
751,952

 
$
21,720

 
$
2,383,603

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Comprehensive Income
 
 
 
 
 
26,928

 
6,732

 
33,660

 
16,393

 
50,053

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from Sale of Capital Stock
 
59

 
5,926

 
 
 
 
 
 
 
 
 
5,926

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Dividends on Capital Stock
(5.50% annualized)
 
 
 
 
 
(22,166
)
 

 
(22,166
)
 
 
 
(22,166
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, March 31, 2014
 
16,158

 
$
1,615,857

 
$
671,277

 
$
92,169

 
$
763,446

 
$
38,113

 
$
2,417,416




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

4



Federal Home Loan Bank of Indianapolis
Statements of Cash Flows
(Unaudited, $ amounts in thousands)
 
Three Months Ended March 31,
 
2014
 
2013
Operating Activities:
 
 
 
Net Income
$
33,660

 
$
39,445

Adjustments to reconcile Net Income to Net Cash provided by Operating Activities:
 
 
 
Amortization and Depreciation
5,083

 
17,497

Prepayment Fees on Advances, net of related swap termination fees

 
(4,850
)
Changes in Net Derivative and Hedging Activities
7,233

 
11,366

Net Other-Than-Temporary Impairment Losses, credit portion
170

 
1,924

Provision for (Reversal of) Credit Losses
(704
)
 
(4,356
)
Changes in:
 
 
 
Accrued Interest Receivable
1,683

 
1,767

Other Assets
14,932

 
(729
)
Accrued Interest Payable
4,924

 
10,354

Other Liabilities
14

 
(12,430
)
Total Adjustments, net
33,335

 
20,543

 
 
 
 
Net Cash provided by Operating Activities
66,995

 
59,988

 
 
 
 
Investing Activities:
 
 


Changes in:
 
 
 
Interest-Bearing Deposits
51,737

 
74,863

Securities Purchased Under Agreements to Resell
(1,300,000
)
 
1,150,000

Federal Funds Sold
(225,000
)
 
989,000

Purchases of Premises, Software, and Equipment
(1,105
)
 
(2,889
)
Available-for-Sale Securities:
 
 
 
Proceeds from Maturities
17,928

 
17,020

Held-to-Maturity Securities:
 
 
 
Proceeds from Maturities
182,296

 
279,198

Purchases

 
(76,558
)
Advances:
 
 
 
Principal Collected
15,213,277

 
9,269,257

Disbursed to Members
(15,010,095
)
 
(10,172,999
)
Mortgage Loans Held for Portfolio:
 
 
 
Principal Collected
196,048

 
382,087

Purchases of Loans from Members and Participation Interests from Other Federal Home Loan Banks
(184,457
)
 
(472,048
)
 
 
 
 
Net Cash provided by (used in) Investing Activities
(1,059,371
)
 
1,436,931

 


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

5



Federal Home Loan Bank of Indianapolis
Statements of Cash Flows, continued
(Unaudited, $ amounts in thousands)
 
Three Months Ended March 31,
 
2014
 
2013
Financing Activities:
 
 
 
Changes in Deposits
101,100

 
(342,153
)
Net Payments on Derivative Contracts with Financing Elements
(15,750
)
 
(19,951
)
Net Proceeds from Issuance of Consolidated Obligations:
 
 
 
Discount Notes
9,327,578

 
23,049,704

Bonds
3,178,564

 
6,494,257

Payments for Matured and Retired Consolidated Obligations:
 
 
 
Discount Notes
(10,343,928
)
 
(24,036,482
)
Bonds
(3,596,000
)
 
(6,449,550
)
Other Federal Home Loan Banks:
 
 
 
Proceeds from Borrowings
22,000

 

Payments for Maturities
(22,000
)
 

Proceeds from Sale of Capital Stock
5,926

 
43,706

Payments for Redemption/Repurchase of Mandatorily Redeemable Capital Stock
(1
)
 
(290,217
)
Cash Dividends Paid on Capital Stock
(22,166
)
 
(14,324
)
 
 
 
 
Net Cash used in Financing Activities
(1,364,677
)
 
(1,565,010
)
 
 
 
 
Net Decrease in Cash and Due from Banks
(2,357,053
)
 
(68,091
)
 
 
 
 
Cash and Due from Banks at Beginning of Period
3,318,564

 
105,472

 
 
 
 
Cash and Due from Banks at End of Period
$
961,511

 
$
37,381

 
 
 
 
Supplemental Disclosures:
 
 
 
Interest Paid
$
72,949

 
$
75,420

Affordable Housing Program Payments
3,456

 
1,845

Capitalized Interest on Certain Held-to-Maturity Securities
751

 
3,296

Net Transfers of Mortgage Loans to Real Estate Owned
117

 

 

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

6



Federal Home Loan Bank of Indianapolis
Notes to Financial Statements
(Unaudited, $ amounts in thousands unless otherwise indicated)


Note 1 - Summary of Significant Accounting Policies

Basis of Presentation. The accompanying interim financial statements of the Federal Home Loan Bank of Indianapolis have been prepared in accordance with GAAP, and the instructions promulgated by the SEC, for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. The interim financial statements presented herein should be read in conjunction with our audited financial statements and notes thereto, which are included in our 2013 Form 10-K.

The financial statements contain all adjustments that are, in the opinion of management, necessary for a fair statement of our 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.

Our significant accounting policies and certain other disclosures are set forth in Note 1 - Summary of Significant Accounting Policies in our 2013 Form 10-K. There have been no material changes to these policies through March 31, 2014.

We use certain acronyms and terms throughout these financial statements, which are defined in the Glossary of Terms. Unless the context otherwise requires, the terms "we," "us," and "our" refer to the Federal Home Loan Bank of Indianapolis or its management.

Reclassifications. We have reclassified certain amounts from the prior periods to conform to the current period presentation. These reclassifications had no effect on Net Income, Total Comprehensive Income, Total Capital, or net Cash Flows.

Use of Estimates. The preparation of financial statements in accordance with GAAP requires us to make subjective assumptions and estimates that may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of income and expense. Although the reported amounts and disclosures reflect our best estimates, actual results could differ significantly from these estimates.

Financial Instruments Meeting Netting Requirements. We present certain financial instruments, including derivative instruments and securities purchased under agreements to resell, on a net basis when we have a legal right of offset and all other requirements for netting are met (collectively referred to as the netting requirements). For these financial instruments, we have elected to offset our derivative asset and liability positions, as well as cash collateral received or pledged, when we have met the netting requirements. We did not have any offsetting liabilities related to securities purchased under agreements to resell at March 31, 2014 or December 31, 2013.

Note 2 - Recently Adopted and Issued Accounting Guidance

Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. On January 17, 2014, the FASB issued guidance clarifying when consumer mortgage loans collateralized by real estate should be reclassified to REO. Specifically, such collateralized mortgage loans should be reclassified to REO when either the creditor obtains legal title to the residential real estate property upon completion of a foreclosure, or the borrower conveys 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 interim and annual periods beginning on or after December 15, 2014 and may be adopted under either the modified retrospective transition method or the prospective transition method. We are in the process of evaluating this guidance, but its effect on our financial condition, results of operations and cash flows, is not expected to be material.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


Accounting for Joint and Several Liability ArrangementsOn February 28, 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 (i) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (ii) any additional amount the reporting entity expects to pay on behalf of its co-obligors. In addition, this guidance requires an entity to disclose the nature and the amount of the obligations as well as other information about these obligations. This guidance became effective for interim and annual periods beginning on or after January 1, 2014, and was applied retrospectively to obligations with joint and several liabilities existing at January 1, 2014. This guidance had no effect on our financial condition, results of operations or cash flows.

Advisory Bulletin 2012-02. On April 9, 2012, the Finance Agency issued Advisory Bulletin 2012-02, Framework for Adversely Classifying Loans, Other Real Estate Owned, and Other Assets and Listing Assets for Special Mention ("AB-2012-02"). The guidance establishes a standard and uniform methodology for adversely classifying certain assets other than investment securities and prescribes the timing of asset charge-offs based on these classifications. Such classification methodology and accounting guidance differ from our current methodology and accounting policy, particularly in that, among other differences, AB 2012-02 requires a charge-off when a loan is more than 180 days past due. The required charge-off is generally the excess of the loan balance over the fair value of the underlying property, less costs to sell, and adjusted for credit enhancements. AB-2012-02 states that it was effective upon issuance. However, the Finance Agency issued additional guidance that extended the effective date for classification purposes to January 1, 2014 and the effective date for financial reporting purposes to January 1, 2015. We implemented the classification methodology effective January 1, 2014 which did not have an effect on our financial condition, results of operations, and cash flows. We expect the adoption of the accounting guidance effective January 1, 2015 to have an effect on our financial condition, results of operations and cash flows, but do not expect it to be material.

Note 3 - Available-for-Sale Securities

Major Security Types. The following table presents information on our AFS securities:
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
Amortized
 
Non-Credit
 
Unrealized
 
Unrealized
 
Estimated
March 31, 2014
 
Cost (1)
 
OTTI
 
Gains
 
Losses
 
Fair Value
GSE and TVA debentures
 
$
3,159,085

 
$

 
$
13,275

 
$
(919
)
 
$
3,171,441

Private-label RMBS
 
425,671

 
(283
)
 
30,424

 

 
455,812

Total AFS securities
 
$
3,584,756

 
$
(283
)
 
$
43,699

 
$
(919
)
 
$
3,627,253

 
 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
 
 
GSE and TVA debentures
 
$
3,162,833

 
$

 
$
6,623

 
$
(6,306
)
 
$
3,163,150

Private-label RMBS
 
443,749

 
(234
)
 
26,170

 

 
469,685

Total AFS securities
 
$
3,606,582

 
$
(234
)
 
$
32,793

 
$
(6,306
)
 
$
3,632,835


(1) 
Amortized cost of AFS securities includes adjustments made to the cost basis of an investment for accretion, amortization, collection of principal, and, if applicable, OTTI recognized in earnings (credit losses) and fair-value hedge accounting adjustments.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


Unrealized Loss Positions. The following table presents impaired AFS securities (i.e., in an unrealized loss position), which 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
 
 
Estimated
 
Unrealized
 
Estimated
 
Unrealized
 
Estimated
 
Unrealized
March 31, 2014
 
Fair Value
 
Losses
 
Fair Value
 
Losses
 
Fair Value
 
Losses
GSE and TVA debentures
 
$
265,752

 
$
(919
)
 
$

 
$

 
$
265,752

 
$
(919
)
Private-label RMBS
 

 

 
6,608

 
(283
)
 
6,608

 
(283
)
Total impaired AFS securities
 
$
265,752

 
$
(919
)
 
$
6,608

 
$
(283
)
 
$
272,360

 
$
(1,202
)
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
GSE and TVA debentures
 
$
880,095

 
$
(6,306
)
 
$

 
$

 
$
880,095

 
$
(6,306
)
Private-label RMBS
 

 

 
7,135

 
(234
)
 
7,135

 
(234
)
Total impaired AFS securities
 
$
880,095

 
$
(6,306
)
 
$
7,135

 
$
(234
)
 
$
887,230

 
$
(6,540
)

Redemption Terms. The amortized cost and estimated fair value of non-MBS AFS securities by contractual maturity are presented below. MBS are not presented by contractual maturity because their actual maturities will likely differ from contractual maturities as borrowers have the right to prepay their obligations with or without prepayment fees.
 
 
March 31, 2014
 
December 31, 2013
 
 
Amortized
 
Estimated
 
Amortized
 
Estimated
Year of Contractual Maturity
 
Cost
 
Fair Value
 
Cost
 
Fair Value
Due after one year through five years
 
$
2,029,395

 
$
2,038,450

 
$
2,046,472

 
$
2,052,348

Due after five years through ten years
 
1,095,970

 
1,099,318

 
1,083,608

 
1,078,558

Due after ten years
 
33,720

 
33,673

 
32,753

 
32,244

Total Non-MBS
 
3,159,085

 
3,171,441

 
3,162,833

 
3,163,150

Total MBS
 
425,671

 
455,812

 
443,749

 
469,685

Total AFS securities
 
$
3,584,756

 
$
3,627,253

 
$
3,606,582

 
$
3,632,835


Realized Gains and Losses. There were no sales of AFS securities during the three months ended March 31, 2014 or 2013. However, on April 4, 2013, we sold six OTTI AFS securities, only one of which was in an unrealized loss position. Prior to the sale, we recorded an OTTI credit charge for this security, representing the entire difference between our amortized cost basis and its estimated fair value, which resulted in no gross realized losses from this sale. As of March 31, 2014, we had no intention of selling the AFS securities in an unrealized loss position nor did we consider it more likely than not that we will be required to sell these securities before our anticipated recovery of each security's remaining amortized cost basis.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


Note 4 - Held-to-Maturity Securities

Major Security Types. The following table presents information on our HTM securities:
 
 
 
 
 
 
 
 
Gross
 
Gross
 
 
 
 
 
 
 
 
 
 
Unrecognized
 
Unrecognized
 
 
 
 
Amortized
 
Non-Credit
 
Carrying
 
Holding
 
Holding
 
Estimated
March 31, 2014
 
Cost (1)
 
OTTI
 
Value (2)
 
Gains (3)
 
Losses (3)
 
 Fair Value
GSE debentures
 
$
268,998

 
$

 
$
268,998

 
$
520

 
$

 
$
269,518

RMBS and ABS:
 
 
 
 
 
 
 
 
 
 
 
 
Other U.S. obligations -guaranteed RMBS
 
3,043,172

 

 
3,043,172

 
42,975

 
(12,323
)
 
3,073,824

GSE RMBS
 
3,486,790

 

 
3,486,790

 
77,544

 
(3,321
)
 
3,561,013

Private-label RMBS
 
140,770

 

 
140,770

 
389

 
(2,062
)
 
139,097

Manufactured housing loan ABS
 
12,483

 

 
12,483

 

 
(1,493
)
 
10,990

Home equity loan ABS
 
2,047

 
(228
)
 
1,819

 
154

 
(124
)
 
1,849

Total RMBS and ABS
 
6,685,262

 
(228
)
 
6,685,034

 
121,062

 
(19,323
)
 
6,786,773

Total HTM securities
 
$
6,954,260

 
$
(228
)
 
$
6,954,032

 
$
121,582

 
$
(19,323
)
 
$
7,056,291

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
GSE debentures
 
$
268,998

 
$

 
$
268,998

 
$
399

 
$

 
$
269,397

RMBS and ABS:
 
 
 
 
 
 
 
 
 
 
 
 
Other U.S. obligations -guaranteed RMBS
 
3,119,458

 

 
3,119,458

 
45,171

 
(7,406
)
 
3,157,223

GSE RMBS
 
3,592,695

 

 
3,592,695

 
70,572

 
(6,554
)
 
3,656,713

Private-label RMBS
 
150,287

 

 
150,287

 
185

 
(2,663
)
 
147,809

Manufactured housing loan ABS
 
12,933

 

 
12,933

 

 
(1,590
)
 
11,343

Home equity loan ABS
 
2,120

 
(241
)
 
1,879

 
67

 
(113
)
 
1,833

Total RMBS and ABS
 
6,877,493

 
(241
)
 
6,877,252

 
115,995

 
(18,326
)
 
6,974,921

Total HTM securities
 
$
7,146,491

 
$
(241
)
 
$
7,146,250

 
$
116,394

 
$
(18,326
)
 
$
7,244,318


(1) 
Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, collection of principal, and, if applicable, OTTI recognized in earnings (credit losses).
(2) 
Carrying value of HTM securities represents amortized cost after adjustment for non-credit OTTI recognized in AOCI.
(3) 
Gross unrecognized holding gains (losses) represents the difference between estimated fair value and carrying value.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


Unrealized Loss Positions. The following table presents impaired HTM securities (i.e., in an unrealized loss position), aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position. None of our non-MBS were in an unrealized loss position at March 31, 2014 or December 31, 2013.
 
 
Less than 12 months
 
12 months or more
 
Total
 
 
Estimated
 
Unrealized
 
Estimated
 
Unrealized
 
Estimated
 
Unrealized
March 31, 2014
 
Fair Value
 
Losses
 
Fair Value
 
Losses
 
Fair Value
 
Losses (1)
RMBS and ABS:
 
 
 
 
 
 
 
 
 
 
 
 
Other U.S. obligations - guaranteed RMBS
 
$
1,062,127

 
$
(4,324
)
 
$
711,247

 
$
(7,999
)
 
$
1,773,374

 
$
(12,323
)
GSE RMBS
 
1,190,332

 
(3,321
)
 

 

 
1,190,332

 
(3,321
)
Private-label RMBS
 
23,903

 
(224
)
 
46,908

 
(1,838
)
 
70,811

 
(2,062
)
Manufactured housing loan ABS
 

 

 
10,990

 
(1,493
)
 
10,990

 
(1,493
)
Home equity loan ABS
 

 

 
1,849

 
(198
)
 
1,849

 
(198
)
Total RMBS and ABS
 
2,276,362

 
(7,869
)
 
770,994

 
(11,528
)
 
3,047,356

 
(19,397
)
Total impaired HTM securities
 
$
2,276,362

 
$
(7,869
)
 
$
770,994

 
$
(11,528
)
 
$
3,047,356

 
$
(19,397
)
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
RMBS and ABS:
 
 
 
 
 
 
 
 
 
 
 
 
Other U.S. obligations - guaranteed RMBS
 
$
1,094,158

 
$
(3,365
)
 
$
546,459

 
$
(4,041
)
 
$
1,640,617

 
$
(7,406
)
GSE RMBS
 
1,338,255

 
(6,542
)
 
6,766

 
(12
)
 
1,345,021

 
(6,554
)
Private-label RMBS
 
61,059

 
(561
)
 
58,363

 
(2,102
)
 
119,422

 
(2,663
)
Manufactured housing loan ABS
 

 

 
11,343

 
(1,590
)
 
11,343

 
(1,590
)
Home equity loan ABS
 

 

 
1,833

 
(287
)
 
1,833

 
(287
)
Total RMBS and ABS
 
2,493,472

 
(10,468
)
 
624,764

 
(8,032
)
 
3,118,236

 
(18,500
)
Total impaired HTM securities
 
$
2,493,472

 
$
(10,468
)
 
$
624,764

 
$
(8,032
)
 
$
3,118,236

 
$
(18,500
)

(1) 
Total unrealized losses on home equity loan ABS does not agree to total gross unrecognized holding losses. Total unrealized losses include non-credit-related OTTI losses recorded in AOCI and gross unrecognized holding gains on previously OTTI securities.

Redemption Terms. The amortized cost, carrying value and estimated fair value of non-MBS HTM securities by contractual maturity are presented below. MBS and ABS are not presented by contractual maturity because their actual maturities will likely differ from contractual maturities as certain borrowers have the right to prepay their obligations with or without prepayment fees.
 
 
March 31, 2014
 
December 31, 2013
 
 
Amortized
 
Carrying
 
Estimated
 
Amortized
 
Carrying
 
Estimated
Year of Contractual Maturity
 
Cost (1)
 
Value (2)
 
Fair Value
 
Cost (1)
 
Value (2)
 
Fair Value
Non-MBS:
 
 
 
 
 
 
 
 
 
 
 
 
Due in one year or less
 
$
168,998

 
$
168,998

 
$
169,245

 
$

 
$

 
$

Due after one year through five years
 
100,000

 
100,000

 
100,273

 
268,998

 
268,998

 
269,397

Total Non-MBS
 
268,998

 
268,998

 
269,518

 
268,998

 
268,998

 
269,397

Total RMBS and ABS
 
6,685,262

 
6,685,034

 
6,786,773

 
6,877,493

 
6,877,252

 
6,974,921

Total HTM securities
 
$
6,954,260

 
$
6,954,032

 
$
7,056,291

 
$
7,146,491

 
$
7,146,250

 
$
7,244,318


(1) 
Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, collection of principal, and, if applicable, OTTI recognized in earnings (credit losses).
(2) 
Carrying value of HTM securities represents amortized cost after adjustment for non-credit OTTI recognized in AOCI.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


Note 5 - Other-Than-Temporary Impairment

OTTI Evaluation Process and Results - Private-label RMBS and ABS. On a quarterly basis, we evaluate for OTTI our individual AFS and HTM securities that have been previously OTTI or are in an unrealized loss position. As part of our evaluation, we consider whether we intend to sell each security and whether it is more likely than not that we will be required to sell the security before its anticipated recovery.

If either of these conditions is met, we recognize an OTTI loss in earnings equal to the entire difference between the debt security's amortized cost and its estimated fair value as of the Statement of Condition date. For the three months ended March 31, 2013, we recorded an OTTI credit charge of $1,924, representing the entire difference between our amortized cost basis and its estimated fair value, on one security for which we changed our previous intention to hold until recovery of its amortized cost. We did not have any such change in intent during the three months ended March 31, 2014.

For those securities that meet neither of these conditions, we performed a cash flow analysis to determine whether we expect to recover the entire amortized cost of each security. As a result of our analysis, additional OTTI credit losses were recognized for one security for the three months ended March 31, 2014 and no securities for the three months ended March 31, 2013. We determined that the unrealized losses on the remaining private-label RMBS and ABS were temporary as we expect to recover the entire amortized cost.

OTTI - Significant Modeling Assumptions. The FHLBanks' OTTI Governance Committee developed a short-term housing price forecast with projected changes ranging from a decrease of 3% to an increase of 9% over a twelve month period. For the majority of housing markets, the short-term housing price recovery forecast ranges from a decrease of 1% to an increase of 4%. Thereafter, home prices in these markets are projected to recover (or continue to recover) using one of five different recovery paths that vary by housing market.

The following table presents projected home price recovery by month following the short-term housing price forecast.
Months
 
Recovery Range %
(Annualized Rates)
1 - 6
 
0.0%
3.0%
7 - 12
 
1.0%
4.0%
13 - 18
 
2.0%
4.0%
19 - 30
 
2.0%
5.0%
31 - 54
 
2.0%
6.0%
Thereafter
 
2.3%
5.6%

The following table presents the other significant modeling assumptions used to determine the amount of credit loss recognized in earnings for the one security that was determined to be OTTI during the three months ended March 31, 2014. The related current credit enhancement is also presented. Credit enhancement is defined as the percentage of subordinated tranches, excess spread, and over-collateralization, if any, in a security structure that will generally absorb losses before we will experience a loss on the security. A credit enhancement percentage of zero reflects a security that has no remaining credit support and is likely to have experienced an actual principal loss. The calculated averages represent the dollar-weighted averages of the private-label RMBS in each category shown. The classification (prime, Alt-A or subprime) is based on the model used to estimate the cash flows for the security, which may not be the same as the classification by the rating agency at the time of origination.
 
 
Significant Modeling Assumptions
for OTTI private-label RMBS
for the three months ended March 31, 2014
 
Year of Securitization
 
Prepayment Rates (1)
 
Default Rates (1)
 
Loss Severities (1)
 
Current Credit
 Enhancement (1)
Prime - 2006
 
11.7
%
 
16.1
%
 
40.6
%
 
0.0
%

(1) 
Weighted Average based on UPB.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


The following table presents a rollforward of the amounts related to credit losses recognized in earnings. The rollforward excludes accretion of credit losses for securities that have not experienced a significant increase in cash flows.
 
 
Three Months Ended March 31,
Credit Loss Rollforward
 
2014
 
2013
Balance at beginning of period
 
$
72,287

 
$
109,169

Additions:
 
 
 
 
Additional credit losses for which OTTI was previously recognized (1)
 
170

 
1,924

Reductions:
 
 
 
 
Unamortized life-to-date credit losses on security that we intend to sell before recovery of its amortized cost basis
 

 
(8,300
)
Balance at end of period
 
$
72,457

 
$
102,793


(1) 
Relates to all securities that were impaired prior to January 1, 2014 and 2013.

The following table presents the March 31, 2014 classification and balances of OTTI securities impaired prior to that date (i.e., life-to-date) but not necessarily as of that date. Securities are classified based on the originator's classification at the time of origination or based on the classification by the NRSROs upon issuance. Because there is no universally accepted definition of prime, Alt-A or subprime underwriting standards, such classifications are subjective.
 
 
March 31, 2014
 
 
HTM Securities
 
AFS Securities
OTTI Life-to-Date
 
UPB
 
Amortized Cost
 
Carrying Value
 
Estimated Fair Value
 
UPB
 
Amortized Cost
 
Estimated Fair Value
Private-label RMBS - prime
 
$

 
$

 
$

 
$

 
$
492,643

 
$
425,671

 
$
455,812

Home equity loan ABS - subprime
 
862

 
828

 
600

 
754

 

 

 

Total OTTI securities
 
$
862

 
$
828

 
$
600

 
$
754

 
$
492,643

 
$
425,671

 
$
455,812


OTTI Evaluation Process and Results - All Other AFS and HTM Securities.

Other U.S. and GSE Obligations and TVA Debentures. For other U.S. obligations, GSE obligations, and TVA debentures, we determined that, based on current expectations, the strength of the issuers' guarantees through direct obligations of, or support from, the United States government is sufficient to protect us from any losses. As a result, all of the gross unrealized losses as of March 31, 2014 are considered temporary.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


Note 6 - Advances

We had Advances outstanding, as presented below by year of contractual maturity, with interest rates ranging from 0% to 8.34%.
 
 
March 31, 2014
 
December 31, 2013
Year of Contractual Maturity
 
Amount
 
WAIR %
 
Amount
 
WAIR %
Overdrawn demand and overnight deposit accounts
 
$
81

 
2.42

 
$
1,092

 
2.50

Due in 1 year or less
 
5,638,359

 
0.52

 
5,952,161

 
0.58

Due after 1 year through 2 years
 
2,008,062

 
2.27

 
1,695,355

 
2.61

Due after 2 years through 3 years
 
2,215,458

 
1.91

 
2,289,954

 
1.59

Due after 3 years through 4 years
 
2,524,622

 
1.72

 
2,190,551

 
1.86

Due after 4 years through 5 years
 
1,366,686

 
2.30

 
1,803,488

 
2.17

Thereafter
 
3,175,334

 
1.81

 
3,199,181

 
1.93

Total Advances, par value
 
16,928,602

 
1.48

 
17,131,782

 
1.50

Fair-value hedging adjustments
 
174,114

 
 

 
181,211

 
 

Unamortized swap termination fees associated with modified Advances, net of deferred prepayment fees
 
25,787

 
 

 
24,425

 
 

Total Advances
 
$
17,128,503

 
 

 
$
17,337,418

 
 


Prepayments. When a borrower prepays an Advance, future income will be lower if the principal portion of the prepaid Advance is reinvested in lower-yielding assets that continue to be funded by higher-costing debt. To protect against this risk, we generally charge a prepayment fee. The following table presents Advance prepayment fees and the associated swap termination fees recognized in Interest Income at the time of the prepayments:
 
 
Three Months Ended March 31,
Recognized prepayment/termination fees
 
2014
 
2013
Prepayment fees on Advances
 
$
1,396

 
$
5,648

Associated swap termination fees
 
(347
)
 
(4,666
)
Prepayment Fees on Advances, net
 
$
1,049

 
$
982


The following table presents deferred Advance prepayment fees and deferred swap termination fees associated with those Advance prepayments:
 
 
Three Months Ended March 31,
Deferred prepayment/termination fees
 
2014
 
2013
Deferred prepayment fees on Advances
 
$

 
$
7,231

Deferred associated swap termination fees
 

 
(5,407
)
Deferred prepayment fees on Advances, net
 
$

 
$
1,824


At March 31, 2014 and December 31, 2013, we had $3.8 billion and $4.1 billion, respectively, of Advances that can be prepaid without incurring prepayment or termination fees. All other Advances may only be prepaid by paying a fee that is sufficient to make us financially indifferent to the prepayment of the Advance.

At March 31, 2014 and December 31, 2013, we had putable Advances outstanding totaling $180,000 and $188,000, respectively. We had no convertible Advances outstanding at March 31, 2014 or December 31, 2013.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


The following table presents Advances by the earlier of the year of contractual maturity or the next call date and next put date:
 
 
Year of Contractual Maturity
or Next Call Date
 
Year of Contractual Maturity
or Next Put Date
 
 
March 31,
2014
 
December 31,
2013
 
March 31,
2014
 
December 31,
2013
Overdrawn demand and overnight deposit accounts
 
$
81

 
$
1,092

 
$
81

 
$
1,092

Due in 1 year or less
 
8,148,724

 
8,312,526

 
5,812,359

 
6,128,161

Due after 1 year through 2 years
 
1,799,812

 
1,572,105

 
1,996,562

 
1,683,855

Due after 2 years through 3 years
 
2,484,458

 
2,293,954

 
2,175,458

 
2,259,954

Due after 3 years through 4 years
 
2,221,872

 
2,052,801

 
2,427,122

 
2,091,051

Due after 4 years through 5 years
 
1,186,686

 
1,653,488

 
1,341,686

 
1,768,488

Thereafter
 
1,086,969

 
1,245,816

 
3,175,334

 
3,199,181

Total Advances, par value
 
$
16,928,602

 
$
17,131,782

 
$
16,928,602

 
$
17,131,782


Credit Risk Exposure and Security Terms. At March 31, 2014 and December 31, 2013, we had a total of $6.5 billion and $5.3 billion, respectively, of Advances outstanding, at par, to single borrowers with balances that were greater than or equal to $1.0 billion. These Advances, representing 38% and 31%, respectively, of total Advances at par outstanding on those dates, were made to four and three borrowers, respectively. At March 31, 2014 and December 31, 2013, we held $14.7 billion and $10.1 billion, respectively, of UPB of collateral to cover the Advances to these borrowers.

See Note 8 - Allowance for Credit Losses for information related to credit risk on Advances and allowance methodology for credit losses.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


Note 7 - Mortgage Loans Held for Portfolio

The following tables present information on Mortgage Loans Held for Portfolio:
 
 
March 31, 2014
Term
 
MPP
 
MPF
 
Total
Fixed-rate long-term mortgages
 
$
4,534,420

 
$
460,307

 
$
4,994,727

Fixed-rate medium-term (1) mortgages
 
987,600

 
86,887

 
1,074,487

Total Mortgage Loans Held for Portfolio, UPB
 
5,522,020

 
547,194

 
6,069,214

Unamortized premiums
 
105,729

 
10,572

 
116,301

Unamortized discounts
 
(10,533
)
 
(281
)
 
(10,814
)
Fair-value hedging adjustments
 
4,322

 
(505
)
 
3,817

Allowance for loan losses
 
(3,000
)
 
(500
)
 
(3,500
)
Total Mortgage Loans Held for Portfolio, net
 
$
5,618,538

 
$
556,480

 
$
6,175,018


 
 
December 31, 2013
Term
 
MPP
 
MPF
 
Total
Fixed-rate long-term mortgages
 
$
4,528,804

 
$
457,128

 
$
4,985,932

Fixed-rate medium-term (1) mortgages
 
1,012,587

 
86,914

 
1,099,501

Total Mortgage Loans Held for Portfolio, UPB
 
5,541,391

 
544,042

 
6,085,433

Unamortized premiums
 
106,346

 
10,917

 
117,263

Unamortized discounts
 
(11,942
)
 
(288
)
 
(12,230
)
Fair-value hedging adjustments
 
4,374

 
(536
)
 
3,838

Allowance for loan losses
 
(4,000
)
 
(500
)
 
(4,500
)
Total Mortgage Loans Held for Portfolio, net
 
$
5,636,169

 
$
553,635

 
$
6,189,804


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

 
 
March 31, 2014
Type
 
MPP
 
MPF
 
Total
Conventional
 
$
4,812,741

 
$
438,240

 
$
5,250,981

Government
 
709,279

 
108,954

 
818,233

Total Mortgage Loans Held for Portfolio, UPB
 
$
5,522,020

 
$
547,194

 
$
6,069,214


 
 
December 31, 2013
Type
 
MPP
 
MPF
 
Total
Conventional
 
$
4,804,298

 
$
435,996

 
$
5,240,294

Government
 
737,093

 
108,046

 
845,139

Total Mortgage Loans Held for Portfolio, UPB
 
$
5,541,391

 
$
544,042

 
$
6,085,433


For information related to our credit risk on mortgage loans and allowance for loan losses, see Note 8 - Allowance for Credit Losses.





Notes to Financial Statements, continued
(Unaudited, $ amounts in thousands unless otherwise indicated)


Note 8 - Allowance for Credit Losses

We have established an allowance methodology for each of our portfolio segments: credit products (Advances, letters of credit, and other extensions of credit to members); term securities purchased under agreements to resell; term federal funds sold; government-guaranteed or insured Mortgage Loans Held for Portfolio; and conventional Mortgage Loans Held for Portfolio. A description of the allowance methodologies for our portfolio segments as well as our policy for impairing financing receivables, placing them on non-accrual status, and charging them off when necessary is disclosed in Note 1 - Summary of Significant Accounting Policies and Note 9 - Allowance for Credit Losses in our 2013 Form 10-K .

Credit Products. Using a risk-based approach, we consider the amount and quality of the collateral pledged and the borrower's financial condition to be indicators of credit quality on the borrower's credit products. At March 31, 2014 and December 31, 2013, we had rights to collateral on a member-by-member basis with an estimated value in excess of our outstanding extensions of credit.

At March 31, 2014 and December 31, 2013, we did not have any credit products that were past due, on non-accrual status, or considered impaired. In addition, based upon the collateral held as security, our credit extension and collateral policies, our credit analysis and the repayment history on credit products, we have not recorded any allowance for credit losses on credit products.

At March 31, 2014 and December 31, 2013, no liability to reflect an allowance for credit losses for off-balance sheet credit exposures was recorded. For additional information about off-balance sheet credit exposure, see Note 17 - Commitments and Contingencies.

Mortgage Loans.

Credit Enhancements.

MPP Credit Enhancements. The following table presents the impact of credit enhancements on the allowance:
MPP Credit Waterfall
 
March 31,
2014
 
December 31,
2013
Estimated losses remaining after borrower's equity, before credit enhancements
 
$
29,039

 
$
31,523

Portion of estimated losses recoverable from PMI
 
(4,763
)
 
(4,922
)
Portion of estimated losses recoverable from LRA 
 
(5,218
)
 
(5,072
)
Portion of estimated losses recoverable from SMI
 
(16,787
)
 
(18,740
)
Allowance for unrecoverable PMI/SMI
 
729

 
1,211

Allowance for MPP loan losses
 
$
3,000

 
$
4,000


The following table presents the activity in the LRA:
 
 
Three Months Ended March 31,
LRA Activity