CONGRESS

District 6 • The Federal Home Loan Bank of Indianapolis 24
At year-end, the FHLBank of Indianapolis was the
ninth largest FHLBank with assets of $50.6 billion.
Its balance sheet consisted of 53.2 percent
advances, 16.1 percent mortgages, and 30.7 percent cash
and investments. The FHLBank’s proportion of mortgage
loans to assets was the highest among the FHLBanks, and
its proportion of advances to assets was the third lowest.
MBS investments totaled $6.8 billion, of which $402
million were private-label MBS. Although 88.7 percent
of private-label MBS were below investment-grade, they
represented less than one percent of assets. Approximately
44.6 percent of the FHLBank’s $26.9 billion advances outstanding
had a remaining maturity of less than one year.
Funding through consolidated obligations totaled $47.1
billion, which consisted of 40.9 percent discount notes
and 59.1 percent bonds. Consolidated obligations
with a remaining maturity of less than one year totaled
$33.8 billion..
The FHLBank reported net income of $121 million for the
year, the third lowest among the FHLBanks. Total interest
income of $544 million comprised $127 million in
advance income, $153 million in investment income, and
$264 million in acquired mortgage loan income. Income
from acquired mortgage loans represented 48.6 percent
of total interest income. The proportion of income from
advances to total interest income was 23.3 percent, the
third lowest in the FHLBank System. The FHLBank’s net
interest spread of 0.39 percent ranked fifth highest, and its
return on assets of 0.27 percent ranked sixth highest. Its
yield on advances of 0.55 percent also ranked sixth highest,
and its cost of funds on consolidated obligations of
0.84 percent was the second highest. Operating expenses
of $65 million were the third lowest of any FHLBank in
nominal terms, but ranked fourth highest when compared
to total assets at 0.14 percent.
The FHLBank’s regulatory capital ratio was 4.7 percent,
which was the fifth lowest in the FHLBank System. Its
retained earnings of $835 million were the seventh highest
in nominal terms, and the fifth highest when compared
to its risk-based capital requirement of 165.2 percent. The
FHLBank’s market value of equity was 154.4 percent of the
par value of its member capital stock.
The FHLBank had 397 members at year-end 2015: 185
commercial banks, 114 credit unions, 58 insurance companies,
37 thrifts, and 3 community development financial
institutions. Insurance company advances represented
53.7 percent of the FHLBank’s advances outstanding, the
highest of any FHLBank. The FHLBank’s ten largest borrowers
held 59.6 percent of total advances.
At the time of its July 2015 examination, FHFA concluded
the FHLBank’s overall condition and operations were
satisfactory with a strong liquidity position. The examination
determined that operational risk remained elevated
because of significant organizational changes, turnover in
key officer-level positions, replacement of the core banking
system, and deficiencies regarding business continuity
planning. Further, the examination determined that the
FHLBank needed to develop an effective independent
credit risk oversight framework, as well as improve governance
practices related to its market and credit risk models.
24
This summary reflects conclusions made at the time of FHFA’s 2015 examination of the FHLBank of Indianapolis supplemented by year-end financial information.
36 FEDERAL HOUSING FINANCE AGENCY