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Federal Home Loan Bank Of Topeka (1325878) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, December 31, 2019

Federal Home Loan Bank Of Topeka

CIK: 1325878


Exhibit 99.1
FHLBANK TOPEKA ANNOUNCES 2019 FOURTH QUARTER AND ANNUAL RESULTS

February 20, 2020 - FHLBank Topeka (FHLBank) announces its 2019 fourth quarter and annual operating results. FHLBank is reporting net income computed in accordance with U.S. generally accepted accounting principles (GAAP) of $52.3 million for the three months ended December 31, 2019 compared to $43.4 million for the three months ended December 31, 2018. For the year ended December 31, 2019, FHLBank is reporting net income of $185.2 million compared to $170.3 million for the year ended December 31, 2018.

During the fourth quarter of 2019, FHLBank paid a dividend of 2.50 percent on the average outstanding shares of Class A Common Stock and 7.50 percent on the average outstanding shares of Class B Common Stock. Other operating highlights from the fourth quarter and the year ended December 31, 2019 are presented below. FHLBank expects to file its Form 10-K for the year ended December 31, 2019 with the Securities and Exchange Commission (SEC) on or about March 20, 2020.

Operating Highlights
Net income for the three months ended December 31, 2019 increased $8.9 million, or 20.4 percent, compared to the same period in 2018 and increased by $14.9 million, or 8.8 percent, for the year ended December 31, 2019 compared to the same period in the prior year. The increase in both periods was driven by net fair value fluctuations on derivatives and trading securities. Declines in longer-term market interest rates since December 31, 2018 resulted in unrealized net gains on economic derivatives and trading securities for both the quarterly and annual periods ended December 31, 2019. Net unrealized losses on economic derivatives and trading securities were recorded for both the quarterly and annual periods ended December 31, 2018, resulting in an increase in other income for both the quarterly and annual periods ended December 31, 2019 compared to the same periods in the prior year.

Net interest income for the three months ended December 31, 2019 was $69.4 million compared to $68.2 million for the same period in the prior year. Net interest income increased for the current quarter due to higher volumes of interest-earning assets despite tightening spreads caused by the impact of the decrease in short-term interest rates on the cost of liquidity, specifically overnight assets funded with term debt. Changes in regulatory liquidity requirements effective March 31, 2019 changed the level and composition of assets held for liquidity purposes and the structure of the related funding. The Federal Open Market Committee lowered the Federal funds rate during the current quarter, which caused overnight assets to reprice downward more quickly than the associated liabilities.
 
For the year ended December 31, 2019, net interest income was $256.1 million compared to $271.2 million for the same period in the prior year. The volume of interest-earning assets also increased for the year ended December 31, 2019 compared to the prior year, but tightening spreads and an increase in premium amortization caused a $15.1 million decline in net interest income. Premium amortization on mortgage-related assets increased due to the decline in long-term market interest rates during 2019. This decline resulted in an increase in prepayment speeds on mortgage-related assets which accelerates premium amortization, thereby reducing net interest income for both the quarterly and annual periods ended December 31, 2019. However, this decrease in long-term market interest rates also allowed FHLBank to replace some callable debt at a lower cost, which will provide a greater benefit in future periods; for the current period, the accelerated amortization of concessions (i.e., broker fees) on the called debt further reduced net interest income.

The change in net interest income for both the quarterly and annual periods ended December 31, 2019 was also impacted by the adoption of a new hedge accounting standard on January 1, 2019 that requires fair value fluctuations on designated fair value hedges to be presented in the income statement line item related to the hedged item, which is interest income/expense for FHLBank. The guidance was adopted prospectively, so the fair value fluctuations on fair value hedges in the prior year are presented in other income, which creates a lack of comparability between periods. Both the quarterly and annual periods were impacted by fair value fluctuations on designated fair value hedges; however, the impact was positive for the fourth quarter of 2019 and negative for the 2019 annual period.

An increase in average assets and average capital combined with the increase in net income resulted in a return on average equity (ROE) of 7.82 percent for the quarter ended December 31, 2019 compared to 7.07 percent for the quarter ended December 31, 2018 and ROE of 7.32 percent for the year ended December 31, 2019 compared to 6.82 percent for the prior year period. The weighted average dividend rate for the quarter ended December 31, 2019 was 6.14 percent, which represented a dividend payout ratio of 48.6 percent, compared to a weighted average dividend rate of 6.24 percent and a payout ratio of 53.9 percent for the same period in 2018. The weighted average dividend rate for the year ended December 31, 2019 was 6.46 percent, which represented a dividend payout ratio of 53.7 percent, compared to a weighted average dividend rate of 6.13 percent and a payout ratio of 56.8 percent for the same period in 2018.
 



The following information was filed by Federal Home Loan Bank Of Topeka on Thursday, February 20, 2020 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 (Ce Fees Paid) (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 (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 In Non-Interest Income) (Details)
Derivatives And Hedging Activities (Net Gains Or Losses On Derivatives And Hedging Activities) (Details)
Derivatives And Hedging Activities (Tables)
Derivatives And Hedging Activities Derivatives And Hedging Activities (Cumulative Basis Adjustments For Fair Value Hedges) (Details)
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 Classified By Contractual Maturities) (Details)
Investment Securities (Available-For-Sale Securities With Unrealized Losses, Fair Value) (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 (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 (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: 0001325878-20-000006
Submitted to the SEC: Fri Mar 20 2020 3:18:13 PM EST
Accepted by the SEC: Fri Mar 20 2020
Period: Tuesday, December 31, 2019
Industry: Federal And Federally Sponsored Credit Agencies

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