FHLB: Consolidated obligations drop 6% in quarter to $876 billion

By Jennifer Chiou

New York, April 30 - Federal Home Loan Banks said that its outstanding consolidated obligations fell to $876 billion overall at March 31 from $935 billion at Dec. 31.

The decrease was about 6%, according to an FHLB news release.

Consolidated obligations are the principal source of funds used by FHLB to make advances and purchase investments and mortgages.

At the end of March, the obligations consisted of $188 billion of discount notes and $688 billion of bonds, which are decreases of 5% and 7%, respectively, from the end of 2009.

FHLB added that combined net income for the first quarter of 2010 was $325 million, compared to combined net income of $345 million recorded for the same period in the previous year.

The release stated that the $20 million decrease in combined net income was primarily attributable to the net losses on derivative and hedging activities, which were partially offset by lower net other than temporary impairment losses and net losses on advances and consolidated bonds held at fair value, and net gains on trading securities.

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