FEDERAL HOME LOAN BANKS

FEDERAL HOME LOAN BANKS

Combined Financial Report for the Year Ended December 31, 2018

This Combined Financial Report provides financial information on the Federal Home Loan Banks. The Federal Home Loan Banks issue consolidated bonds and consolidated discount notes (collectively referred to as consolidated obligations). Consolidated obligations are joint and several obligations of all Federal Home Loan Banks, which means that each individual Federal Home Loan Bank is responsible for the payment of principal and interest on all consolidated obligations. Each Federal Home Loan Bank is a separately chartered entity with its own board of directors and management. There is no centralized, system-wide management or oversight by a single board of directors of the Federal Home Loan Banks.

Federal Home Loan Bank consolidated obligations are not obligations of the United States and are not guaranteed by either the United States or any government agency.

The Securities Act of 1933, as amended, does not require the registration of consolidated obligations; therefore, no registration statement has been filed with the U.S. Securities and Exchange Commission. Neither the U.S. Securities and Exchange Commission, nor the Federal Housing Finance Agency, nor any state securities commission has approved or disapproved of these consolidated obligations or determined if this report is truthful or complete.

Carefully consider the risk factors provided in this and other Combined Financial Reports of the Federal Home Loan Banks (collectively referred to as Combined Financial Reports). Neither the Combined Financial Reports nor any offering materials provided by, or on behalf of, the Federal Home Loan Banks describe all the risks of investing in consolidated obligations. Investors should consult with their financial and legal advisors about the risks of investing in consolidated obligations.

This Combined Financial Report is available on the Federal Home Loan Banks Office of Finance web site at fhlb-. This web site address is provided as a matter of convenience only, and its contents are not made part of or incorporated by reference into this report.

Investors should direct questions about consolidated obligations or the Combined Financial Reports to the Federal Home Loan Banks Office of Finance at (703) 467-3600.

This Combined Financial Report was issued on March 27, 2019.

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TABLE OF CONTENTS

Explanatory Statement about Federal Home Loan Banks Combined Financial Report Forward-Looking Information Business

General Information Advances Investments Mortgage Loans Consolidated Obligations Deposits Capital, Capital Rules, and Dividends Use of Derivatives Audits and Examinations Other Mission-Related Activities Competition Tax Status and Assessments Office of Finance Employees Risk Factors Properties and Geographic Distribution Legal Proceedings Market for Capital Stock and Related Stockholder Matters Selected Financial Data Financial Discussion and Analysis of Combined Financial Condition and Combined Results of Operations Executive Summary Combined Financial Condition Combined Results of Operations Liquidity and Capital Resources Off-Balance Sheet Arrangements and Other Commitments Contractual Obligations Critical Accounting Estimates Recent Accounting Developments Legislative and Regulatory Developments External Credit Ratings Risk Management Quantitative and Qualitative Disclosures about Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Combined Accounting and Financial Disclosures Controls and Procedures Other Information Security Ownership of Certain Beneficial Owners and Certain Relationships and Related Transactions Principal Accounting Fees and Services

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Office of Finance Audit Committee Report Report of Independent Auditors Combined Financial Statements

Combined Statement of Condition Combined Statement of Income Combined Statement of Comprehensive Income Combined Statement of Capital Combined Statement of Cash Flows Notes to Combined Financial Statements Note 1 - Summary of Significant Accounting Policies Note 2 - Recently Issued and Adopted Accounting Guidance Note 3 - Cash and Due From Banks Note 4 - Trading Securities Note 5 - Available-for-Sale Securities Note 6 - Held-to-Maturity Securities Note 7 - Other-than-Temporary Impairment Analysis Note 8 - Advances Note 9 - Mortgage Loans Note 10 - Allowance for Credit Losses Note 11 - Derivatives and Hedging Activities Note 12 - Deposits Note 13 - Consolidated Obligations Note 14 - Affordable Housing Program (AHP) Note 15 - Subordinated Notes Note 16 - Capital Note 17 - Accumulated Other Comprehensive Income (Loss) Note 18 - Pension and Postretirement Benefit Plans Note 19 - Fair Value Note 20 - Commitments and Contingencies Note 21 - Subsequent Events Condensed Combining Schedules Supplemental Information FHLBank Management and Compensation Individual Federal Home Loan Bank Selected Financial Data and Financial Ratios Index of Tables Contained in the Combined Financial Report

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F-10 F-12 F-12 F-23 F-25 F-25 F-26 F-28 F-31 F-32 F-34 F-35 F-40 F-48 F-49 F-51 F-52 F-52 F-57 F-59 F-63 F-74 F-75 F-76

S-1 S-1 S-29 Index

EXPLANATORY STATEMENT ABOUT FEDERAL HOME LOAN BANKS COMBINED FINANCIAL REPORT

The Federal Home Loan Banks (FHLBanks) are government-sponsored enterprises (GSEs), federally-chartered but privately capitalized and independently managed. The FHLBanks together with the Federal Home Loan Banks Office of Finance (Office of Finance) comprise the FHLBank System.

The Office of Finance is responsible for preparing the Combined Financial Reports of the FHLBanks. Each FHLBank is responsible for the financial information and underlying data it provides to the Office of Finance for inclusion in the Combined Financial Reports. The Office of Finance is responsible for combining the financial information it receives from each of the FHLBanks.

The Combined Financial Reports are intended to be used by investors in consolidated obligations (consolidated bonds and consolidated discount notes) of the FHLBanks as these are joint and several obligations of all FHLBanks. This Combined Financial Report is provided using combination accounting principles generally accepted in the United States of America. This combined presentation in no way indicates that these assets and liabilities are under joint management and control as each individual FHLBank manages its operations independently. Therefore, each FHLBank's business, risk profile, financial condition, and results of operations will vary from FHLBank to FHLBank.

Because of the FHLBank System's structure, the Office of Finance does not prepare consolidated financial statements. Consolidated financial statements are generally considered to be appropriate when a controlling financial interest rests directly or indirectly in one of the enterprises included in the consolidation, which is the case in a typical holding company structure where there is a parent corporation that owns, directly or indirectly, one or more subsidiaries. However, the FHLBanks do not have a parent company that controls each of the FHLBanks. Instead, each of the FHLBanks is owned by its respective members and certain former members.

Each FHLBank is a separately chartered cooperative with its own board of directors and management and is responsible for establishing its own accounting and financial reporting policies in accordance with accounting principles generally accepted in the United States of America (GAAP). Although the FHLBanks work together in an effort to achieve consistency on significant accounting policies, the FHLBanks' accounting and financial reporting policies and practices may vary because alternative policies and presentations are permitted under GAAP in certain circumstances. Statements in this report may be qualified by a term such as "generally," "primarily," "typically," or words of similar meaning to indicate that the statement is generally applicable, but may not be applicable to all FHLBanks or their transactions as a result of their different business practices and accounting and financial reporting policies under GAAP.

An investor may not be able to obtain easily a system-wide view of the FHLBanks' business, risk profile, and financial information because there is no centralized, system-wide management or centralized board of director oversight of the individual FHLBanks. This decentralized structure is not conducive to preparing disclosures from a system-wide view in the same manner as is generally expected of U.S. Securities and Exchange Commission (SEC) registrants. For example, a conventional Management's Discussion and Analysis is not provided in this Combined Financial Report; instead, this report includes a "Financial Discussion and Analysis" prepared by the Office of Finance using information provided by each FHLBank.

Each FHLBank is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and must file periodic reports and other information with the SEC. Each FHLBank prepares an annual financial report, filed on SEC Form 10-K, quarterly financial reports, filed on SEC Form 10-Q, and current reports, filed on SEC Form 8-K. Those reports contain additional information that is not contained in this Combined Financial Report. An investor should review those reports and other available information on individual FHLBanks to obtain additional detail on each FHLBank's business, risk profile, financial condition, results of operations, and accounting and financial reporting policies. Periodic reports and other information filed by each FHLBank with the SEC are made available on its web site and on the SEC's web site at . References to web sites and to reports and other information filed by individual FHLBanks with the SEC are provided as a matter of convenience only, and their contents are not made part of or incorporated by reference into this report.

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FORWARD-LOOKING INFORMATION

Statements contained in this report, including statements describing the objectives, projections, estimates, or future predictions of the FHLBanks and Office of Finance, may be "forward-looking statements." These statements may use forwardlooking terminology, such as "anticipates," "believes," "could," "estimates," "expects," "may," "should," "will," "would," or their negatives or other variations on these terms. Investors should note that forward-looking statements, by their nature, involve risks or uncertainties, including those set forth in the Risk Factors section of this report. Therefore, the actual results could differ materially from those expressed or implied in these forward-looking statements or could affect the extent to which a particular objective, projection, estimate, or prediction is realized.

These forward-looking statements involve risks and uncertainties including, but not limited to, the following:

? changes in the general economy, money and capital markets, the rate of inflation (or deflation), employment rates, housing market activity and housing prices, the size and volatility of the residential mortgage market, and uncertainty regarding the global economy;

? levels and volatility of market prices, interest rates, and indices or other factors that could affect the value of investments or collateral held by the FHLBanks resulting from the effects of, and changes in, various monetary or fiscal policies and regulations, including those determined by the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC), or a decline in liquidity in the financial markets;

? political events, including legislative, regulatory, judicial, or other developments that affect the FHLBanks, their members, counterparties, dealers of consolidated obligations, or investors in consolidated obligations, including changes in the Federal Home Loan Bank Act of 1932, as amended (FHLBank Act), housing finance and governmentsponsored enterprise (GSE) reform, Federal Housing Finance Agency (FHFA) actions, or regulations that affect FHLBank operations, regulatory oversight, and changes to, and replacement of, the London Interbank Offered Rate (LIBOR) benchmark interest rate;

? competitive forces, including other sources of funding available to FHLBank members and other entities borrowing funds in the capital markets;

? disruptions in the credit and debt markets and the effect on the FHLBanks' funding costs, sources, and availability;

? demand for FHLBank advances resulting from changes in FHLBank members' deposit flows and credit demands;

? loss of members and repayment of advances made to those members due to institutional failures, consolidations, voluntary withdrawals, or involuntary terminations from FHLBank membership, and changes in the financial health of members;

? changes in domestic and foreign investor demand for consolidated obligations, including short-term funding, or the terms of derivative transactions and similar transactions, including changes in the relative attractiveness of consolidated obligations as compared to other investment opportunities, changes in the availability of other investment opportunities, changes in support from dealers of consolidated obligations, and changes resulting from any modification of the credit ratings of the U.S. government or the FHLBanks;

? the availability of acceptable institutional counterparties for business transactions, including derivative transactions used to manage interest-rate risk;

? the ability to introduce new products and services and successfully manage the risks associated with those products and services, including new types of collateral used to secure advances;

? the pace of technological change and the ability to develop, secure, and support technology and information systems to effectively manage the risks, including information security; and

? the effect of new accounting guidance, including the development of supporting systems and related internal controls.

Neither the FHLBanks nor the Office of Finance undertakes any obligation to publicly update or revise any forward-looking statements contained in this Combined Financial Report, whether as a result of new information, future events, changed circumstances, or any other reason.

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BUSINESS

General Information

The 11 FHLBanks are GSEs, organized under the authority of the Federal Home Loan Bank Act of 1932, as amended (FHLBank Act). The Office of Finance is a joint office of the FHLBanks established to facilitate the issuance and servicing of debt instruments for the FHLBanks, known as consolidated obligations, and to prepare the quarterly and annual Combined Financial Reports of the FHLBanks. The FHLBanks and the Office of Finance are regulated by the Federal Housing Finance Agency (FHFA). (See Business - Audits and Examinations - FHLBanks' Regulator for more information regarding the FHFA.)

The mission of the FHLBanks is to provide financial products and services to their members and housing associates, including, but not limited to, secured loans known as advances, that assist and enhance their financing of: (1) housing, including single-family and multi-family housing serving consumers at all income levels; and (2) community lending. (See Business - Other Mission-Related Activities for additional information.) FHFA regulations require each FHLBank's board of directors to have in effect, at all times, a strategic business plan that describes how the business activities of that FHLBank will achieve its mission and meet the FHFA's regulatory guidance related to core mission achievement. (See Supplemental Information - Individual FHLBanks Selected Financial Data and Financial Ratios for more information on each FHLBank's core mission asset ratio at December 31, 2018).

The FHLBanks serve the public by providing a readily available, low-cost source of funds to FHLBank members through advances. These funds may be used for residential mortgages, community investments, and other services for housing and community development. In addition, the FHLBanks may provide members and housing associates with a means of enhancing liquidity by purchasing home mortgage loans through mortgage programs developed for their members. Members can also borrow from an FHLBank to fund low-income housing, thereby helping the members satisfy their regulatory requirements under the Community Reinvestment Act. Finally, the FHLBanks may offer their members a variety of other products and services, such as:

? correspondent banking, which includes security safekeeping, wire transfers, and settlements; ? cash management; ? letters of credit; and ? derivative intermediation.

Figure 1 presents the FHLBanks' total asset composition for the most recent five years.

Figure 1: FHLBanks' Asset Composition at Year-end

dollars in billions percentage

$1,200 $1,000

$800 $600 $400 $200

$0

$1,056.7

$1,103.5

$1,102.9

100

$969.2

$913.3

80

62.5%

65.4%

66.7%

66.3%

66.1%

60

29.6% 4.8% 3.1%

2014

28.2% 4.6% 1.8%

2015

27.6% 4.6% 1.1%

2016

27.8% 4.9% 1.0%

2017

40 27.8%

20 5.7%

0.4% 0

2018

Advances Total assets

Investments

Mortgage loans held for portfolio, net

Cash and due from banks, and other

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Each FHLBank's funding is principally obtained from consolidated obligations, which are debt instruments issued through the Office of Finance on behalf of the FHLBanks. Each FHLBank is jointly and severally liable with the other FHLBanks for all consolidated obligations issued. Consolidated obligations are not obligations of the United States and are not guaranteed by either the United States or any government agency. Each FHLBank also raises funds through member deposits and the issuance of capital stock.

Figure 2 presents the FHLBanks' total liability and capital composition for the most recent five years.

Figure 2: FHLBanks' Liability and Capital Composition at Year-end

dollars in billions percentage

$1,200 $1,000

$800 $600 $400 $200

$0

$913.3

$969.2

$1,056.7

$1,103.5

$1,102.9

100

80

53.2%

51.0%

54.8%

58.1%

54.7%

60

39.7%

42.5%

38.8%

35.6%

38.6% 40

2.0% 5.1% 2014

5.0% 1.5% 2015

5.0% 1.4% 2016

5.1% 1.2% 2017

20 5.3% 1.4%

0

2018

Consolidated bonds Total GAAP capital

Consolidated discount notes Total liabilities and capital

Deposits, mandatorily redeemable capital stock, and other

The FHLBanks are cooperatives that are privately and wholly owned by their members and certain former members (including non-members that own FHLBank capital stock as a result of merger or acquisition, relocation, charter termination, voluntary termination, or involuntary termination of an FHLBank member). Each FHLBank operates as a separate entity within a defined geographic region of the country, known as its district, with its own board of directors, management, and employees. As a condition of membership, each FHLBank member must purchase and maintain capital stock of its FHLBank. To the extent declared by an FHLBank's board of directors, a stockholder may receive dividends on its investment in its FHLBank's capital stock.

Membership in an FHLBank is voluntary and is generally limited to federally-insured depository institutions, insurance companies, and community development financial institutions. A community development financial institution is eligible to become a member if it has been certified by the U.S. Department of the Treasury (U.S. Treasury). Eligible community development financial institutions include community development loan funds, community development venture capital funds, and state-chartered credit unions without federal share insurance. (See Market for Capital Stock and Related Stockholder Matters - Table 3 - Regulatory Capital Stock Held and Membership by Type of Member, which presents FHLBank membership by membership type.) Eligible institutions may generally only become a member of the FHLBank whose district includes the location of the institution's principal place of business. Financial institution holding companies may have one or more subsidiaries, each of which may be a member of the same or a different FHLBank.

Each FHLBank conducts its credit and mortgage program businesses almost exclusively with its members and housing associates. An FHLBank may also have investments in interest-bearing deposits, securities purchased under agreements to resell, federal funds sold, and certificates of deposit, and may also execute mortgage-backed securities and derivative transactions, with members, former members, or their affiliates. All investments are transacted at then-current market prices without preference to the status of the counterparty or the issuer of the investment as a member, former member, or affiliate.

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