Recent media stories have profiled how the FHLBank System has provided liquidity to its members during the housing and credit market upheaval. While mainstream media seems to be just discovering it, the Bank System has been a steady and reliable source of funding for housing finance and community development for 75 years. The creation of the Bank System was pivotal in shoring up the nation’s infrastructure in home lending and homeownership in 1932. Ever since, the FHLBank System has been a major force in supplying its members with the liquidity they need during ordinary and extraordinary times.

I reported in September that FHLB Des Moines was experiencing an increase in demand for advances and that is still the case today. At the end of the third quarter, the Bank’s advance balance stood at $31.8 billion – the largest advance balance in the Bank’s history. This is an increase of 45.3% from $21.9 billion at December 31, 2006. Net income was $28.8 million for the three-months ended September 30, 2007 compared with $22.7 million for the same period in 2006, an increase of 27.2% or $6.1 million. The Bank paid an annualized quarterly dividend of 4.50% for the third quarter which was an increase of 0.25% from the prior quarterly dividend of 4.25%.  While we welcome the growth, it is important to remember that one of the essential elements of the Bank System is its ability to expand or contract based on market conditions and member needs.

In 2008, our board of directors will welcome two newly elected directors, one re-elected director and three re-appointed directors who will all begin serving three-year terms in January.

Michael J. Finley, president of Janesville Bank in Janesville, MN was re-elected and Eric Hardemeyer, president and CEO of the Bank of North Dakota in Bismarck and Joseph C. Stewart, CEO of Bank Star and chairman of BancStar, Inc. in Pacific, MO were all elected this year. Johnny A. Danos, president of the Greater Des Moines Community Foundation in Des Moines, IA, Gerald D. Eid, CEO of Eid-Co Buildings, Inc. in Fargo, ND and David R. Frauenshuh, CEO of Frauenshuh, Inc. in Minneapolis, MN were reappointed by the Federal Housing Finance Board. We look forward to beginning the New Year with such accomplished and experienced directors providing governance for the Bank.

The 2007 credit crisis has wrecked havoc with the housing and credit markets. Let’s hope that 2008 brings more stable market conditions and improvements in the housing sector. We appreciate your continued support and business and look forward to continuing to assist you in meeting the housing and economic development needs of the communities we serve together.