On Tuesday FHLBank Topeka announced its third quarter operating results. The announcement does a thorough job of detailing the financial aspect of FHLBank this past quarter. We expect to file our third quarter 10-Q on Thursday, November 7. I would like to share some of the great things FHLBank has done that are not reflected in the filing.
$12 Million in AHP Grants
Our housing mission connects us to the communities we serve through our members. Allocating 10% of our prior year’s earnings for our Affordable Housing Program (AHP) allows us to make a positive impact in the lives of families and households across our four states. In September, FHLBank Topeka approved $12.13 million in affordable housing grants that will fund 15 projects through our AHP. AHP helps our members provide critical funding for affordable housing development. We are proud of FHLBank’s important role in helping our members and the communities they serve. For additional information, visit fhlbtopeka.com/ahp.
$6.6 Million in HSP Grants
Another important part of our housing and community development outreach is the amount of funds we set aside annually to assist very low, low-, and moderate-income first-time homebuyers through our Homeownership Set-aside Program (HSP). To date in 2019, we have dispersed more than $6.3 million through our members to assist nearly 1,300 households. An additional $310,000 is reserved, which will assist almost 70 more households. The HSP program, which is widely used by members throughout our district, was developed to help our membership serve their customers. The 2020 HSP will open March 2. For additional information on our housing programs, visit fhlbtopeka.com/hsp.
Members Only – Line of Credit online
Earlier this year we successfully launched our new Members Only website. Besides just updating the look and feel of the website, our primary focus was to make the new site easier for our members to transact business with us. Security and navigation of the site were also improved. Seven weeks ago, we announced that you can now draw on your line of credit online. In a few clicks, you can have the funds you need to support your business. In a recent week, more than 60% of members who borrowed on their lines enjoyed the convenience of online draws. Please contact our Lending Desk at 800.809.2733 to assist you with the online process.
The newest addition to the Line of Credit online draw is after you submit your draw, you receive your dividend-adjusted rate. This calculation will help you understand how the dividends you receive on your Class B activity stock help lower your cost of borrowing. Knowing your dividend-adjusted cost of funds assists your decision making for future transactions. We plan to continue to add features to our Member Only site throughout 2020. Please visit Members Only to find out how easy it is to draw on your line with the click of a few buttons.
Letters of Credit
We’re debuting a new analytical tool that can show how replacing pledged securities with Letters of Credit can boost your liquidity ratios. The tool also helps you evaluate the financial impact of moving the public unit deposit funding to higher yielding loans and securities. There are two webinars scheduled next week that preview the tool and tell you how you can get your own customized analysis. Register here to attend either session.
We need your input
It is our desire to be a valued partner with our members. We understand that in order to accomplish this we must ask and, more importantly, listen to what you have to say about our interactions. We are engaging in a district-wide member experience assessment to obtain your thoughts and perspective on how it is to work with us. In early December, you will receive an electronic survey asking for your input regarding your experience with FHLBank. There will be a number of questions around a variety of topics. The accumulated responses will assist us in developing ways to improve and enhance our processes and relationships. Please be as honest and thorough as you can be. We need to hear both the good and the bad in order to help us better serve our cooperative members. I appreciate the time you will invest in completing the survey.
Another way we are gathering input from our members is through the recently formed Member Advisory Group. This diverse cross section of our membership met for the first time in September. It was quite valuable for us to hear the issues that members face and ways we can improve our services. I look forward to working with the group as we strive to provide exceptional service and value added products.
LIBOR Transition Guidance
The financial markets are preparing for the expected phase-out of the London Interbank Offered Rate (LIBOR) by the end of 2021. FHLBank Topeka has developed a comprehensive LIBOR transition plan. As part of this plan, we’ve assessed our current exposure to LIBOR, including potential effects on core FHLBank systems. An important part of the plan is to support our members through their transition efforts. You will be hearing from us as we reach out with ongoing updates and educational resources. Resources regarding the LIBOR transition are available on our website.
Educational Outreach
Last week we wrapped up the last of our four Regional Meetings. We value this time with our members and appreciate your attendance. It is our goal to provide you with practical and timely education regarding business issues you are facing. We are currently planning the agenda for our Annual Management Conference that will be held April 22-24, 2020. If you have any ideas for topics or speakers, please contact Susan Beam, meeting and event planner.
It is hard to keep this message brief due to the many positive things happening at the FHLBank. In closing, I want you to know you have my sincere appreciation for the good work you are doing in your communities. I know I speak on behalf of all FHLBank business partners when I say we value your business and it is our pleasure to continue to serve you.
Sincerely,
Mark E. Yardley
President and CEO
