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Federal Home Loan Bank Of Topeka (1325878) SEC Filing 10-Q Quarterly Report for the period ending Wednesday, June 30, 2021

Federal Home Loan Bank Of Topeka

CIK: 1325878
Exhibit 99.1

FHLBANK TOPEKA ANNOUNCES 2021 SECOND QUARTER RESULTS

July 29, 2021 - FHLBank Topeka (FHLBank) is reporting net income of $33.0 million computed in accordance with U.S. generally accepted accounting principles (GAAP) for the quarter ended June 30, 2021 compared to $20.2 million for the quarter ended June 30, 2020. FHLBank is reporting net income of $76.9 million for the six months ended June 30, 2021 compared to $32.1 million for the six months ended June 30, 2020. The $12.8 million increase for the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020 was primarily attributed to an increase in net interest income of $10.5 million. The $44.8 million increase for the six months ended June 30, 2021 was primarily attributed to an increase in net interest income of $28.8 million and a net increase of $15.3 million related to fair value fluctuations on economic derivatives (i.e., derivatives not qualifying for hedge accounting) and trading securities.

Net interest income increased $10.5 million for the quarter, from $56.7 million for the quarter ended June 30, 2020 to $67.2 million for the quarter ended June 30, 2021. Net interest income increased $28.8 million for the current year-to-date period, from $111.8 million for the six months ended June 30, 2020 to $140.6 million for the six months ended June 30, 2021. The increase for both periods was a result of a significant decrease in FHLBank's cost of debt between periods. Net interest income for both the quarter and year-to-date periods was reduced by the decline in the average balance and average rate across most asset categories, most notably advances and mortgage loans, and the change in net interest settlements on fair value hedges. However, the reduction in interest income was more than offset by the significant decrease in FHLBank's cost of debt.

FHLBank expects to file its Form 10-Q for the quarter ended June 30, 2021 with the Securities and Exchange Commission (SEC) on or about August 11, 2021.

Operating Highlights
Net interest income/margin: Net interest income of $67.2 million for the quarter ended June 30, 2021 increased $10.5 million compared to the same period in 2020. The decrease in market interest rates and improvement in funding spreads has allowed FHLBank to replace maturing and called debt at a lower cost, resulting in a 16 basis point increase in net interest margin and a 18 basis point increase in net interest spread for the quarter ended June 30, 2021 compared to the prior year period.
Total assets: Total assets decreased from $52.6 billion as of December 31, 2020 to $46.3 billion as of June 30, 2021, driven largely by the decrease in the short-term liquidity portfolio between those periods.
Advances: Advances remained relatively flat from December 31, 2020 to June 30, 2021, decreasing slightly to $21.0 billion. The average balance of advances declined $2.1 billion, or 8.7 percent, for the three months ended June 30, 2021 when compared to the prior year period. Advance demand dropped significantly in the second quarter of 2020 as deposit inflows generally outpaced loan demand at depository members due to pandemic-related economic stimulus. Additionally, some members began utilizing the Federal Reserve Bank's liquidity facility instead of advances because of its neutral effect on regulatory capital. Advance demand has stabilized since this initial decline and has held steady at approximately $21 billion since the second quarter of 2020.
Mortgage loans: Mortgage loans decreased by $0.9 billion from December 31, 2020 to June 30, 2021, representing 18.0 percent of total assets as of June 30, 2021, compared to 17.5 percent as of December 31, 2020. Despite the decrease in mortgage loans, the decline in our liquidity and advance portfolios resulted in our mortgage loan portfolio representing a larger portion of our total assets compared to December 31, 2020. The average balance of mortgage loans decreased $2.7 billion, or 24.1 percent, for the three months ended June 30, 2021 when compared to the prior year period as prepayments outpaced acquisitions.
Performance ratios: Return on average equity (ROE) increased to 4.83 percent for the quarter ended June 30, 2021 compared to 3.20 percent for the prior year period due primarily to the increase in net income for the current quarter, especially relative to the adverse income impacts from the pandemic-related market volatility in the prior year period.
Dividends: The Class A Common Stock dividend rate of 0.25 percent per annum and the Class B Common Stock dividend rate of 5.25 percent per annum combined for a weighted average dividend rate for the quarter ended June 30, 2021 of 4.06 percent per annum, compared to a weighted average dividend rate of 3.69 percent for the same period in 2020.

Financial Highlights
Attached are highlights of FHLBank’s financial position as of June 30, 2021 and December 31, 2020 and results of operations for the three and six months ended June 30, 2021 and 2020.



The following information was filed by Federal Home Loan Bank Of Topeka on Thursday, July 29, 2021 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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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)
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)
Basis Of Presentation
Basis Of Presentation (Policies)
Capital
Capital (Mandatorily Redeemable Capital Stock Rollforward) (Details)
Capital (Narrative) (Details)
Capital (Regulatory Capital Requirements) (Details)
Capital (Tables)
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 (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)
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Derivatives And Hedging Activities Derivatives And Hedging Activities (Cumulative Basis Adjustments For Fair Value Hedges) (Details)
Fair Values
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Investment Securities
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Investment Securities (Tables)
Investment Securities Investment Securities (Net Gains (Losses) Realized Afs 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 (Rollforward Of Allowance For Credit Losses On Conventional Mortgage Loans) (Details)
Mortgage Loans (Tables)
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Recently Issued Accounting Standards And Interpretations And Changes In And Adoptions Of Accounting Principles
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Federal Home Loan Bank Of Topeka provided additional information to their SEC Filing as exhibits

CIK: 1325878
Form Type: 10-Q Quarterly Report
Accession Number: 0001325878-21-000024
Submitted to the SEC: Wed Aug 11 2021 12:51:31 PM EST
Accepted by the SEC: Wed Aug 11 2021
Period: Wednesday, June 30, 2021
Industry: Federal And Federally Sponsored Credit Agencies

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