Last week, FHLBank Topeka released its 2023 first quarter financial results. Despite disruptions and uncertainty in the market, we continued to provide steady and reliable access to liquidity for our members.

Unlike other areas of the country, our four-state district is comprised of nearly 90% community financial institutions with less than $1 billion in assets. As a result, FHLBank Topeka’s advance activity was relatively stable during the mid-March market volatility.

Although advance funding wasn’t widely needed in our district, our regional account managers and Lending team did hear from members who had questions from their customers as a result of the spotlight put on the banking industry. We are always happy to share what we are seeing across our district and talk through ways your FHLBank can help.

Providing liquidity to our members is foundational to our mission. As I shared with members at our recent Annual Management Conference (more on that later in this message), making access to that liquidity contingent on certain member activities makes that liquidity less useful for ongoing balance sheet management as well as during times of financial market stress. That’s why we appreciated your participation in the recent Federal Housing Finance Agency (FHFA) review that concluded in late March.

Through your written comments during one of the two comment periods, you shared why liquidity matters, how it grows your communities and most importantly, what your communities might look like without this access. Thank you for making your voice heard and being there for your cooperative. We don’t know how long it will take to see recommendations from the FHFA’s seven-month review. As soon as we receive updates, we will reach out to our members with ways you can continue to engage in the process.

Increased Housing and Community Development Program Commitment

Last month, we announced a 50% voluntary increase to our annual contribution for affordable housing and community development initiatives. Over the next few years, we will phase in the additional funding which will result in an increase equal to 5% of our income before our Affordable Housing Program expense.

In 2023, we start with at least $1 million in funding to our new Native American Housing Initiatives (NAHI) Grants Program which will help Native American tribes and tribally designated housing entities address housing needs in our district. Grants of $100,000 to $500,000 will be offered with applications opening June 5. Please consider sponsoring an application for Native American tribes in your community. To find out more about the program, visit this page. We are also offering a webinar on May 17 at 10 a.m. CT to review the program.

In 2024, we will allocate 2.5% of 2023 income before our Affordable Housing Program (AHP) to voluntary programs. NAHI will make up a portion of this allocation as well as one or two new programs, which will be determined in consultation with our Affordable Housing Advisory Council and with the approval of our board of directors. 

In 2025, the full 5% allocation will begin. We see access to grant funding as an important benefit of your cooperative. We care about your communities and want to see them thrive. If you have suggestions for ways to help your communities with this funding, please reach out to our Housing and Community Development department at 866.571.8155. 

To see how our programs are helping communities like yours, I encourage you to flip through our recently released Affordable Housing Advisory Council Annual Report. It tells the story of how our members have partnered with FHLBank and local nonprofits to make a difference in their communities and may give you an idea of how you could do so in the future.  

New Product Options 

As we conduct business with you, our staff takes care to understand your needs to make sure we are meeting them, helping you better serve your communities. Recently, we introduced two new product offerings as a response to member demand — one as a part of our advance suite and the other as an option to our Mortgage Partnership Finance® (MPF®) Program. 

On April 24, we released our putable advance. The putable advance lets you lock in at a lower rate than traditional bullet advances in exchange for granting FHLBank the option to put (or call away) the advance on a predetermined date or dates before maturity.  

On April 10, we rolled out a new MPF option for low-balance loans. This enhancement gives members who use MPF stronger pricing for conventional loans based upon the loan amount. We understand that it costs your institution the same amount to process a $100,000 mortgage loan as it does a $500,000 mortgage loan. This new option changes that. To learn more, read April 7 and April 13's Financial Intelligence articles on the topic or attend our webinar this Friday at 10 a.m. CT. 

Our Sales and Lending teams are always available to answer your specific questions on our new or more established products. You can reach them at 800.809.2733. 

Annual Management Conference 

I enjoyed seeing so many of you in April at our 25th anniversary Annual Management Conference (AMC). We built this year’s conference around the four states we serve and the members who call those states home. It was great to see the assortment of state-themed shirts and try food and drink popular in each state at the welcome reception. The reception kicked off a strong day and a half of programming from a variety of speakers.  

Our new emcee, Joel Zeff, interviewed AMC attendees in the hall during breaks. You can see a short video clip of their perspective of the conference here. I hope it will convince you to add our 2024 AMC to your calendar. We’ll be back at the Sheraton Overland Park on April 17-19, 2024. 

On behalf of everyone at FHLBank, thank you for your continued partnership. We are honored to support your liquidity needs and help you build your communities.