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Federal Home Loan Bank Of Topeka (1325878) SEC Filing 10-K Annual report for the fiscal year ending Monday, December 31, 2018

Federal Home Loan Bank Of Topeka

CIK: 1325878


Exhibit 99.1
FHLBANK TOPEKA ANNOUNCES 2018 FOURTH QUARTER AND ANNUAL RESULTS

February 21, 2019 - FHLBank Topeka (FHLBank) announces its 2018 fourth quarter and annual operating results. FHLBank is reporting net income computed in accordance with U.S. generally accepted accounting principles (GAAP) of $43.4 million for the three months ended December 31, 2018 compared to $48.4 million for the three months ended December 31, 2017. For the twelve months ended December 31, 2018, FHLBank is reporting net income of $170.3 million compared to $197.2 million for the twelve months ended December 31, 2017.

During the fourth quarter of 2018, FHLBank paid a dividend of 2.00 percent on the average outstanding shares of Class A Common Stock and 7.25 percent on the average outstanding shares of Class B Common Stock. Other operating highlights from the fourth quarter of 2018 and the year then ended are presented below. FHLBank expects to file its Form 10-K for the year ended December 31, 2018 with the Securities and Exchange Commission (SEC) on or about March 18, 2019.

Operating Highlights
Net income for the three months ended December 31, 2018 was $43.4 million, compared to net income of $48.4 million for the same period in 2017. The $5.0 million, or 10.2 percent, decrease in net income for the three months ended December 31, 2018 compared to the same period in 2017 was due primarily to a $3.2 million decline in net fair value of trading securities and derivatives and a $1.3 million decline in net interest income after provision for credit losses. Net income was $170.3 million for the twelve months ended December 31, 2018 compared to $197.2 million for the same period in 2017. The $26.9 million, or 13.7 percent, decrease in net income for the twelve months ended December 31, 2018 compared to the prior year period was also primarily due to a $30.8 million decline in net fair value of trading securities and derivatives.

Net interest income after provision for credit losses for the three months ended December 31, 2018 was $67.8 million compared to $69.1 million for the same period in the prior year. The $1.3 million decline resulted primarily from a decline in the average balance of advances precipitated by a change in the relationship of the average funding cost relative to the Federal funds effective rate and other short-term rates. Despite the decrease in net interest income, net interest margin increased by one basis point for the period due to continued increases in short-term interest rates, which magnified the benefit of utilizing capital as funding during the three months ended December 31, 2018. Net interest income after provision for credit losses for the twelve months ended December 31, 2018 was $271.2 million compared to $270.2 million for the same period in the prior year. The $1.0 million increase in net interest income after provision for credit losses was due to an increase in average earning assets, despite the rising cost of holding liquidity caused by the increase in short-term interest rates. Net interest margin declined by one basis point for the twelve months ended December 31, 2018 due to the increase in average funding cost driven by short-term interest rates, which also caused a decline in net interest spread of three basis points and four basis points for the three- and twelve-month periods ended December 31, 2018, respectively.

The decline in net income resulted in a decrease in return on average equity (ROE) for both the three- and twelve-month periods, from 7.62 percent for the three months ended December 31, 2017 to 7.07 percent for the three months ended December 31, 2018, and from 8.18 percent for the year ended December 31, 2017 to 6.82 percent for the twelve months ended December 31, 2018. The weighted average dividend rate for the three months ended December 31, 2018 was 6.24 percent, which represented a dividend payout ratio of 53.9 percent, compared to a weighted average dividend rate of 5.78 percent and a payout ratio of 49.8 percent for the same period in 2017. The weighted average dividend rate for the twelve months ended December 31, 2018 was 6.13 percent, which represented a dividend payout ratio of 56.8 percent, compared to a weighted average dividend rate of 5.77 percent and a payout ratio of 46.7 percent for the same period in 2017.
 
Balance Sheet Highlights
Total assets declined $0.4 billion, or 0.8 percent, from December 31, 2017 to December 31, 2018 despite increases in the end-of-period balances of advances and mortgage loans. Average interest-earning assets increased $0.9 billion, or 1.7 percent, for the twelve months ended December 31, 2018 compared to the same period in the prior year due to continued growth in the average balances of mortgage loans along with a higher level of investment securities, partially offset by a decrease of $1.7 billion in the average balance of advances. The increase in mortgage loans was attributed in large part to continued production from our top five PFIs and also due to attractive pricing of the MPF Program relative to other mortgage purchase programs. The decline in the average balance of advances resulted from the change in the relationship between certain short-term rates, as short-term advance rates became less attractive relative to the rate on excess reserves. Total capital declined $51.9 million, or 2.1 percent, between periods primarily due to an increase in stock repurchases caused by the decline in average advance utilization.

Financial Highlights
Attached are highlights of FHLBank’s financial position as of December 31, 2018 and 2017 and highlights of the results of operations for the quarterly and annual periods ended December 31, 2018 and 2017.



The following information was filed by Federal Home Loan Bank Of Topeka on Thursday, February 21, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside this 10-K Annual Report

Document And Entity Information
Statements Of Capital
Statements Of Capital (Parenthetical)
Statements Of Cash Flows
Statements Of Comprehensive Income
Statements Of Condition
Statements Of Condition (Parenthetical)
Statements Of Income
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (Accumulated Other Comprehensive Income Or Loss) (Details)
Accumulated Other Comprehensive Income (Tables)
Advances
Advances (Advances By Interest Rate Payment Terms) (Details)
Advances (Advances By Year Of Redemption Term, Next Call Date, Or Next Convert Date) (Details)
Advances (Advances Redemption Terms) (Details)
Advances (Narrative) (Details)
Advances (Tables)
Affordable Housing Program
Affordable Housing Program (Analysis Of Ahp Liability) (Details)
Affordable Housing Program (Narrative) (Details)
Affordable Housing Program (Tables)
Allowance For Credit Losses
Allowance For Credit Losses (Average Recorded Investment Of Individually Impaired Loan And Related Interest Income Recognized) (Details)
Allowance For Credit Losses (Ce Fees Paid) (Details)
Allowance For Credit Losses (Individually Evaluated Impaired Statistic By Product Class Level) (Details)
Allowance For Credit Losses (Narrative) (Details)
Allowance For Credit Losses (Recorded Investment By Impairment Method) (Details)
Allowance For Credit Losses (Recorded Investment In Delinquent Mortgage Loans) (Details)
Allowance For Credit Losses (Rollforward Of Allowance For Credit Losses On Mortgage Loans) (Details)
Allowance For Credit Losses (Tables)
Assets And Liabilities Subject To Offsetting
Assets And Liabilities Subject To Offsetting (Tables)
Assets And Liabilities Subject To Offsetting Assets Subject To Offsetting (Schedule Of Offsetting Assets) (Details)
Assets And Liabilities Subject To Offsetting Liabilities Subject To Offsetting (Schedule Of Offsetting Liabilities) (Details)
Background Information (Details)
Background Information (Notes)
Capital
Capital (Mandatorily Redeemable Capital Stock By Contractual Year Of Redemption) (Details)
Capital (Mandatorily Redeemable Capital Stock Rollforward) (Details)
Capital (Narrative) (Details)
Capital (Regulatory Capital Requirements) (Details)
Capital (Tables)
Cash And Due From Banks
Cash And Due From Banks (Details)
Commitments And Contingencies
Commitments And Contingencies (Narrative) (Details)
Commitments And Contingencies (Off-Balance Sheet Commitments) (Details)
Commitments And Contingencies (Tables)
Consolidated Obligations
Consolidated Obligations (Consolidated Bond Obligations By Contractual Maturity Or Next Call Date) (Details)
Consolidated Obligations (Consolidated Bond Obligations Outstanding By Contractual Maturity) (Details)
Consolidated Obligations (Consolidated Bonds By Interest-Rate Payment Type) (Details)
Consolidated Obligations (Consolidated Discount Notes Outstanding) (Details)
Consolidated Obligations (Narrative) (Details)
Consolidated Obligations (Tables)
Deposits
Deposits (Narrative) (Details)
Deposits (Tables)
Deposits (Types Of Deposits) (Details)
Derivatives And Hedging Activities
Derivatives And Hedging Activities (Effect Of Fair Value Hedge-Related Derivative Instruments) (Details)
Derivatives And Hedging Activities (Fair Values Of Derivatives Instruments) (Details)
Derivatives And Hedging Activities (Narrative) (Details)
Derivatives And Hedging Activities (Net Gains Or Losses On Derivatives And Hedging Activities) (Details)
Derivatives And Hedging Activities (Tables)
Fair Values
Fair Values (Fair Value Summary) (Details)
Fair Values (Hierarchy Level For Financial Assets And Liabilities - Recurring And Nonrecurring) (Details)
Fair Values (Tables)
Investment Securities
Investment Securities (Available-For-Sale Securities By Major Security Type) (Details)
Investment Securities (Available-For-Sale Securities In A Continuous Unrealized Loss Position) (Details)
Investment Securities (Held-To-Maturity Securities By Major Security Type) (Details)
Investment Securities (Held-To-Maturity Securities Classified By Contractual Maturity) (Details)
Investment Securities (Held-To-Maturity Securities In A Continuous Unrealized Loss Position) (Details)
Investment Securities (Net Gains (Losses) On Trading Securities) (Details)
Investment Securities (Rollforward Of Otti Activity Related To Credit Losses) (Details)
Investment Securities (Tables)
Investment Securities Investment Securities (Proceeds From Sale And Gains And Losses On Htm Securities) (Details)
Investment Securities Investment Securities (Trading Securities By Major Security Type) (Details)
Mortgage Loans
Mortgage Loans (Mortgage Loans Held For Portfolio By Collateral Or Guarantee Type) (Details)
Mortgage Loans (Mortgage Loans Held For Portfolio) (Details)
Mortgage Loans (Tables)
Pension And Other Postretirement Benefit Plans
Pension And Other Postretirement Benefit Plans (Benefit Obligation Fair Value And Funded Status) (Details)
Pension And Other Postretirement Benefit Plans (Benefit Obligation Key Assumptions) (Details)
Pension And Other Postretirement Benefit Plans (Components Of The Net Periodic Pension Cost For The Defined Benefit Portion) (Details)
Pension And Other Postretirement Benefit Plans (Estimate Future Payments) (Details)
Pension And Other Postretirement Benefit Plans (Narrative) (Details)
Pension And Other Postretirement Benefit Plans (Pentegra Db Plan Net Pension Cost And Funded Status) (Details)
Pension And Other Postretirement Benefit Plans (Tables)
Recently Issued Accounting Standards And Interpretations And Changes In And Adoptions Of Accounting Principles
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (Details) (Narrative2) (Details)
Summary Of Significant Accounting Policies (Policies)
Transactions With Other Fhlbanks
Transactions With Other Fhlbanks (Details)
Transactions With Other Fhlbanks (Tables)
Transactions With Stockholders
Transactions With Stockholders (Narrative) (Details)
Transactions With Stockholders (Related Party Transactions, By Balance Sheet Grouping) (Details)
Transactions With Stockholders (Related Party Transactions, By Balance Sheet Grouping-Directors) (Details)
Transactions With Stockholders (Schedule Of Related Party Transactions, Mortgage Loans Disclosure) (Details)
Transactions With Stockholders (Tables)
CIK: 1325878
Form Type: 10-K Annual Report
Accession Number: 0001325878-19-000005
Submitted to the SEC: Mon Mar 18 2019 5:14:40 PM EST
Accepted by the SEC: Mon Mar 18 2019
Period: Monday, December 31, 2018
Industry: Federal And Federally Sponsored Credit Agencies

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