One of 11 FHLBanks, FHLBank Topeka is a federally chartered corporation organized
on October 13, 1932 under the authority of the Federal Home Loan Bank Act of
1932, as amended (Bank Act). Our primary business is making collateralized loans
and providing other banking services to member institutions (members) and certain
qualifying non-members (housing associates). We are a cooperative owned by our
members and are generally limited to providing products and services only to
those members. Each FHLBank operates as a separate corporate entity with its
own management, employees, and board of directors. We are exempt from federal,
state, and local taxation, except for real property taxes. We do not have any
wholly- or partially-owned subsidiaries and do not have an equity position in
any partnerships, corporations, or off-balance sheet special purpose entities.
We are supervised and regulated by the Finance Agency, an independent agency
in the executive branch of the U.S. government. The Finance Agency’s mission
is to ensure that the housing GSEs operate in a safe and sound manner so that
they serve as a reliable source of liquidity and funding for housing finance
and community investment.
Any federally insured depository institution, insurance company, or community
development financial institution (CDFI) certified by the CDFI fund, whose principal
place of business is located in Colorado, Kansas, Nebraska, or Oklahoma is eligible
to become one of our members. Except for community financial institutions (CFIs),
applicants for membership must demonstrate they are engaged in residential housing
finance or otherwise support our housing mission, and have a significant business
presence in our district. CFIs are defined in the Housing and Economic Recovery
Act of 2008 (Recovery Act) as those institutions that have, as of the date of
the transaction at issue, less than a specified amount of average total assets
over the three years preceding that date (subject to annual adjustment by the
Finance Agency director based on the consumer price index).
Our members are required to purchase and hold our capital stock as a condition
of membership, and only members are permitted to purchase capital stock. All
capital stock transactions are governed by our capital plan, which was developed
under, is subject to, and operates within specific regulatory and statutory
requirements.Any federally insured depository institution, insurance company,
or community development financial institution (CDFI) certified by the CDFI
fund, whose principal place of business is located in Colorado, Kansas, Nebraska,
or Oklahoma is eligible to become one of our members. Except for community financial
institutions (CFIs), applicants for membership must demonstrate they are engaged
in residential housing finance or otherwise support our housing mission, and
have a significant business presence in our district.
Member institutions own nearly all of our outstanding capital stock and may
receive dividends on that stock. Former members own capital stock as long as
they have outstanding business transactions with us. A member must own capital
stock in the FHLBank based on the member’s total assets, and each member
may be required to purchase activity-based capital stock as it engages in certain
business activities with the FHLBank, including advances and Acquired Member
Assets (AMA). As a result of these stock purchase requirements, we conduct business
with related parties in the normal course of business.
Our business activities include providing collateralized loans, known as advances,
to members and housing associates, and acquiring residential mortgage loans
from members. By law, only certain general categories of collateral are eligible
to secure FHLBank obligations. We also provide members and housing associates
with letters of credit and certain correspondent services, such as safekeeping,
wire transfers, derivative intermediation, and cash management.
Finance Agency regulations require that our strategic business plan describes
how our business activities will achieve our mission, consistent with the Finance
Agency’s core mission asset (CMA) guidance. Our strategic business plan
includes a balance sheet management strategy consistent with this guidance,
which includes emphasis on the issuance of advances and acquisition of member
mortgage loans through the MPF Program. Our ratio of average advances and average
mortgage loans to average consolidated obligations (CMA ratio) utilizing net
balances as outlined in our strategic plan was 79 percent. We generally intend
to maintain the CMA ratio within the range of 70 to 80 percent, which exceeds
the Finance Agencys recommended minimum ratio of 70 percent utilizing par balances.
However, because this ratio is dependent on several variables, such as member
demand for our advance and mortgage loan products, it is possible that we may
be unable to maintain the ratio at this level indefinitely.
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