x

Alternative numbers for FHLBank Topeka

Currently our individual lines, toll-free lines and main number are not working. Our Members Only website and email are functional. If you need to reach us by phone, please use the secondary numbers listed here.
Banner
 

We know banking isn’t one size fits all. That’s why we developed Financial Intelligence to share our expertise in an array of lending areas. Explore the links above to find our latest solutions. You can also subscribe to the topics that best match your business. Click to subscribe to Financial Intelligence.

Featured Solution
 
Our Portfolio Lending Strategy continues to show wide spreads this quarter mainly due to long-term advance rates not rising as quickly as short-term advance rates.   

Learn More
Call to Action picture
 
 
Residential Solution
 
PDFCall to Action Callable debt results in wider margins as rates decline

Our Portfolio Lending Strategy continues to show wide spreads this quarter mainly due to long-term advance rates not rising as quickly as short-term advance rates.


The top graph shows how primary mortgage yields continue to be significantly better in comparison to agency MBS yields. This gap between the primary and secondary market yields remains wide due to large guarantee fees being charged by FNMA and FHLMC to take on the credit risk of mortgage originations.


In addition to relatively high yields on mortgage originations, funding costs continue to stay low supporting wider margins on loans funded with advances. The bottom graph illustrates the historic level of interest rate volatility, which is a key determinant of the option cost associated with callable advances. Lower interest volatility brings down the cost of the call option and contributes to a wider net interest margin.


Initial Transaction Details

The tables illustrate the funding costs associated with the advances used for the 30-year strategy and details the different advance types that were selected by the model to fund this mortgage. This scenario utilizes equal amounts of callable rate advances and fixed rate advances. The use of callable advances provides wider margins as rates decline. In using both types of advances though, it gives good protection whether rates rise or fall.


The set of graphs show how the balances perform in a down 100 and an up 100 rate environment. As shown in both graphs, we are able to provide a good funding mix that has the flexibility to manage varying mortgage prepayment speeds.


see our full analysis:
15-year funding strategy
30-year funding strategy

 

Address:

One Security Benefit Place
Suite 100 | Topeka, KS 66606

Phone:

785.233.0507

Share:

     
 

© 2016 FHLBank Topeka | Please see legal disclaimer. | Sitemap