Hopefully you saw our 2024 third quarter results. We sent our operating results to you in late October and filed our 10-Q with the Securities and Exchange Commission last week. I am pleased to share that your cooperative had another strong quarter thanks to your use of FHLBank products and services to support your communities.
Besides our exemplary financial performance, our 10-Q also outlines significant regulatory developments. As I have shared in the past year’s messages and at our member meetings, we are closely monitoring the actions being taken by our regulator, the Federal Housing Finance Agency (FHFA), as it works to implement its FHLBank System at 100 Report.
In the last three months, the FHFA has released several advisory bulletins and a proposed rule.
The first advisory bulletin related to member credit risk management sets expectations that an FHLBank’s underwriting and credit decisions should reflect a member’s financial condition and not rely solely on the collateral securing the member’s credit obligations. The second advisory bulletin deals with climate-related risk management and describes how an FHLBank should integrate climate-related risk management into its existing enterprise risk management efforts.
The FHFA has also released a proposed rule on unsecured credit limits. The proposed rule includes some changes that would provide greater flexibility for our liquidity management. However, several of the other proposed changes, if adopted, could result in changes to our current business processes. The FHFA has also proposed a rule that would change the corporate governance practices of FHLBank, including the roles and responsibilities of directors elected by FHLBank’s members.
We are evaluating our current risk management policies and procedures to assess the potential impact on our operations of the two advisory bulletins and the proposed rules. In our evaluations, our top goal and commitment is to ensure members continue to have prompt and ready access to FHLBank liquidity and that we can continue to offer and develop products and services to meet members’ liquidity needs. We understand the importance of our liquidity mission to members across the district and want to ensure policymakers do as well. We encourage you to remain engaged with your trade associations and to share with policymakers how access to FHLBank liquidity and funding allows you to better support your communities.
As we face an evolving political and regulatory environment, we continue to engage with important stakeholders to share the importance of our partnership with our members across the district. This quarter we participated in the Kansas Bankers Association’s annual meeting and met with the Colorado Bankers Association and member banks. I enjoyed attending a Flyover Fintech event in Lincoln, Nebraska, sponsored by Congressman Mike Flood. We also attended a groundbreaking in Wewoka, Oklahoma, for a Native American Housing Initiatives (NAHI) Grants Program project.
Outside these activities in each state of our district, I was pleased to see many of you at our regional meetings. I hope our team and guest speakers provided useful content to those who attended. Our team gains a lot from these meetings through our interactions with you and your colleagues. What we learn helps guide our decisions to ensure we are offering the products and services you need to support your communities.
Upcoming Retirement of Chief Administrative Officer
Sonia Betsworth, our chief administrative officer, announced her plans to retire in February 2025 after 42 years of service. Sonia has made and continues to make a huge impact on our organization. She has been an important partner and advisor for me since I joined FHLBank and especially after I became president. She is a strong advocate for our members and employees and will be greatly missed.
Sonia currently leads the Corporate Strategy, Corporate Portfolio Management Office, Building Services and Security and Information Technology departments. In the past, she’s headed our Lending, Sales and Credit groups.
If you worked with FHLBank Topeka, attended our regional meetings or annual member conference, you likely have interacted with her. To share well wishes with Sonia, please reach out to her at sonia.betsworth@fhlbtopeka.com.
Digital Transformation
Our master transaction agreement this spring laid the groundwork for many more digital transformation efforts. We debuted near-real time balances on Members Only in September adding a frequently requested feature to the mix. Easy access to your FHLBank balances means you have the information you need to make easier borrowing decisions without wading through multiple Members Only reports.
We’ve also added online collateral forms to simplify the pledging and releasing process. The next step on our digital transformation will be the release of online wire capabilities. More on that to come.
Community Partnership
Building communities together with our members is at the heart of what we do. Whether it is offering the liquidity you need or affordable housing and community development resources to help your community thrive.
We recently announced selections for two of our yearly programs – NAHI and #500forGood. Our Affordable Housing Program announcement is planned for late December.
The NAHI Program, in its second year, provided $5.3 million to 12 Native American housing and community development projects. We increased our original allocation after the strong response from our members. I encourage you to read about the 12 projects in our Oct. 31 announcement. We were honored to partner with you to help make these important projects a reality. We look forward to opportunities to celebrate the grants with our members in their communities.
Our #500forGood program also continues to grow. We started this program in 2018 by awarding eight $500 microgrants to causes our members care about. You and your employees continue to amaze us with your thoughtful submissions that run the gamut from thanking first responders to funding 4-H opportunities for high schoolers. Read about the 50 selected recipients in 2024 on our website. You might also notice two videos about past recipients on the #500forGood landing page. These were created in partnership with film students at Topeka’s Washburn University.
Financial Intelligence Live
As your cooperative, our goal is to help your institution thrive. One of our recent ways to support you is through our quarterly Financial Intelligence Live webinars. This quarter’s session is approaching on Thursday, Nov. 21.
Join Oklahoma Regional Account Manager Drew Simmons and Member Solutions Manager Leslie Mondesir for a breakdown of our latest district data and how your peers are reacting to the current market. We’ll also feature our Director of Government and Industry Relations Ryan Gilliland, who will share a post-election update. Register now.
As the holidays approach and I wrap up my first year as president and CEO, I want to extend my gratitude to all of you for your partnership. On behalf of the entire FHLBank team, we wish you, your staff and your families a happy Thanksgiving and holiday season.
