federal home loan bank of des moines

f e d e r a l h o m e l o a n b a n k OF d e s m o i n e s
You don’t see us, but
we’re there...working
side-by-side with your
local lender to support
your community.
As a local financial institution, we touch every part of our commu
there. When a customer is going through a tough time – we are
We are the first place people turn.
We turn to Federal Home Loan Bank of Des Moines. Some organiza
in areas of lending and how we can utilize it to support our custom
- Jon D. Kaiser, Senior Lending Officer, 1st National Bank of Waseca
Waseca, Minnesota
unity. When the local schools ran into funding challenges – we were
e there. When the community food shelf needs help – we are there.
ations lose the big picture, but FHLB Des Moines uses common sense
mers.
together
with our member financial institutions, local leaders
and community partners…we work behind the
scenes, strengthening the communities in our fivestate district.
For eight decades, the narrowly designed business
model of Federal Home Loan Bank of Des Moines
has promised a flow of funds and services that
strengthen our members and make their communities
great places to live, work and raise a family.
We bring Wall Street to Main Street, giving our
members access to lower cost funds which support
commercial loans, mortgages, agricultural lending
and economic development.
Our members are the backbones of their communities.
We are their reliable partner.
Together we… turn dreams into realities by financing
a small business, providing the down payment for a
couple’s first home or helping a recent high school
graduate attend college.
Michael K. Guttau
Richard S. Swanson
President & CEO
Board Chair
5
a model that works.
For 80 years, we have reliably met our
mission – to provide readily available,
low-cost liquidity to lenders in all
economic cycles.
How does this happen? Through the
combined size and strength of the Federal
Home Loan Bank System, FHLB Des Moines
has the ability to support a continuous
flow of funds to more than 1,200 memberowners in our district.
FHLB Des Moines is a lender of first resort.
We obtain access to funding at the lowest
possible cost through the global capital
markets, and in turn, provide liquidity
and credit products to members at very
low rates. As these funds flow into the
communities supported by our members,
they benefit from their local lender’s
membership in the Des Moines Bank.
The FHLBanks help community banks continue to serve the needs of our customers
each and every day. They demonstrated their value even more during the recent financial
crisis when they continued to provide advances after other parts of the credit markets
shut down.
- Tim Zimmerman, President and CEO of Standard Bank, Monroeville, Pennsylvania, said during his testimony before
the House Financial Services Subcommittee on Oversight and Investigations on October 12, 2011
6
The FHLBank System is a critical part of our nation’s finance system, and the diagram below
shows a system that works.
how the money flows
LOCAL
COMMUNITIES
MEMBER FINANCIAL INSTITUTIONS
FEDERAL HOME LOAN BANKS
Investors world wide
purchase FHLBank1
bonds for their safe
and solid return
GLOBAL INVESTORS
FHLBank debt is highly rated by S&P and Moody’s Investor Services.
“Mortgage Partnership Finance,” “MPF,” “eMPF,” and “MPF Xtra” are registered trademarks of the Federal Home Loan Bank
of Chicago. The “MPF Mortgage Partnership Finance” logo is trademarked by the Federal Home Loan Bank of Chicago.
1
7
Members use FHLB
Des Moines products,
such as advances and
the Mortgage
Partnership Finance®
(MPF®) Program, as a
source of liquidity and
low-cost funding
Together we create
By the end of 1931, President Herbert
Hoover had a financial mess on his hands –
a stock market crash, unemployment
affecting a quarter of the workforce, the
failure of 41,000 banks and foreclosures
on a large number of homes and farms.
In an effort to slow the turmoil, the Federal
Home Loan Bank System was created by
government charter to help inject the
financial sector with non-taxpayer liquidity.
FHLB Des Moines opened its doors –
along with the other Home Loan Banks –
on October 15, 1932, to support member
financial institutions in Iowa, Minnesota,
Missouri, North Dakota and South Dakota.
The core mission was the same as it is
now: to provide readily available, lowcost liquidity to local lenders in all
economic cycles.
Since 1932, no FHLBank
has incurred a credit loss
on an advance.
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opportunities.
By the end of 1932, 11 organizations
had been approved for membership. Some of the
first FHLB Des Moines members included:
Gate City Bank, Fargo, North Dakota
Home Savings & Loan Association of Norborne, F.A.,
Norborne, Missouri
Home Federal Bank, Sioux Falls, South Dakota
RiverWood Bank, Bemidji, Minnesota
Ozarks Federal Savings & Loan Association,
Farmington, Missouri
Each of these institutions is still a member today.
Types of members
Banks 1,005
92 Credit Unions
69 Thrifts
48 Insurance Companies
1 Community Development Financial Institution
9
opportunities.
Today, over 7,700 financial institutions
belong to the FHLBank System. This
impressive growth, which reflects the
expansion of member eligibility to include
commercial banks and credit unions,
demonstrates the value of FHLBank
membership. More than 1,200 banks, credit
unions, insurance companies, community
development financial institutions and
thrifts are members of the Federal Home
Loan Bank of Des Moines.
Thanks to its members, the Bank continues
to do the job it was designed to do – working
behind the scenes to provide products and
programs that enable members to meet
their community’s unique needs.
FHLB Des Moines creates a winwin for us. We have ownership
in an organization that improves
our cost of funds and eliminates
liquidity concerns while providing
us with a return.
10
-Barry Monaghan, President and CEO,
Guthrie County State Bank
Panora, Iowa
Iowa Renewable Energy, LLC
Washington Free Library
Washington County Hospital and Clinics
Being a local bank, we have a good feel for what is
happening in our community and can react quickly
when necessary.
investing in communities
Sometimes, what a community needs, is for a financial institution to step in and not only provide
funds, but also time to evaluate plans, understand operations and help make informed decisions
for their business. In Washington, Iowa, a community business was facing closing its doors.
Federation Bank, along with another local bank and an insurance company, worked together to
provide funding and guidance to keep the business operating.
Today, that business is running close to capacity and has rehired people who had been previously
laid off. Without the joint efforts of the community-based financial institutions, this organization
may not have survived. Terry Engelken, senior vice president, Federation Bank, described
this project by saying, “Being a local bank, we have a good feel for what is happening in our
community and can react quickly when necessary.” These institutions worked together to sustain
opportunities for business in Washington, Iowa.
asset size of members
Less than $100,000,000 522
100,000,000 to $250,000,000 378
$
250,000,000 to $500,000,000 149
$
500,000,000 to $1,000,000,000 – 76
$
Greater than $1,000,000,000 – 90
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Together we build
Over the last eight decades, FHLB Des
Moines has performed exceptionally well as
a stable and consistent source of liquidity
for its member financial institutions. The
Federal Home Loan Bank System’s unique
structure should be preserved, and even
enhanced, in the future.
•
Joint and several liability for debt
obligations increases the Bank’s access
to the capital markets.
•
Members are both customers and
stockholders, so FHLB Des Moines
conservatively balances managing its
assets with creating a return.
•
The Bank can grow and shrink in
response to member demand while
maintaining its safety and soundness.
•
FHLB Des Moines advances are fully
collateralized.
We are lucky to have a partner like
Federal Home Loan Bank that
bridges the mutual interests of
our bank and the families and
communities we serve.
The Bank is wholly owned
by its members and receives
no taxpayer funding.
-Brent Rahn, Executive Vice President,
Shelter Financial Bank
Columbia, Missouri
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partnerships.
total advances
The ability to respond to rapid changes in member demand during all economic cycles is part of the original
design of the Federal Home Loan Bank System and exactly what it did during the recent financial crisis.
Today, FHLB Des Moines continues to meet its members’ funding needs during a period of increased
liquidity and low loan demand.
$
50,000,000
$
$
40,000,000
30,000,000
13
2011
2010
2009
2008
2007
2006
2005
2004
20,000,000
2003
$
2002
Infographics
partnerships.
Total Mortgage partnership
finance Loans by State
Financial institutions are at the heart of
their communities, willing to finance the
credit needs of their customers. Local
lenders fund the construction of homes,
support the expansion of businesses and
send students off to college. And, many
times, they are relying on FHLB Des Moines
and the strength of its business model to
$53.5 MILLION
North Dakota
provide a readily available source of low-
$3,795.7 MILLION
Minnesota
$251.1 MILLION
South Dakota
cost funding.
$7,104.4
MILLION
Total
Strengthening
Main Street
What can one home provide to a
community? Jobs. Stability. Prosperity.
The benefits extend past the homeowner
and into the local economy. Shelter Bank
rolls up its sleeves every day to protect
their customers’ dreams. For more than a
decade, the bank has partnered with FHLB
Des Moines.
$2,028.9 MILLION
Iowa
Shelter Bank uses FHLB Des Moines
products to fund our residential loans.
Without these long-term funding
opportunities, there would simply be too
much risk in providing the affordable,
longer-term loans that most folks need
to safely buy a house in today’s volatile
interest rate environment. It’s incredibly
positive, families get an affordable
homeownership experience and Shelter
Bank is able to be profitable without
excessive interest rate risk.
$975.2 MILLION
Missouri
-Brent Rahn, Executive Vice President,
Shelter Financial Bank
Columbia, Missouri
As of 12/31/11
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Photo goes here
Strengthening Families
Providing a source of readily available, low-cost funds to local lenders to invest in their
communities puts families into homes and creates quality neighborhoods – and that’s the Bank’s
fundamental mission. The Mortgage Partnership Finance program provides an extension of that
mission by partnering with members to finance mortgage loans. In 2011, FHLB Des Moines
purchased 13,256 home loans. Since FHLB Des Moines began utilizing the MPF program,
55,874 households have been assisted with their home financing needs.
In Jamestown, North Dakota, Bank Forward is using the program to keep relationships local.
Our clients requested mortgages that are serviced locally and not sold on the secondary
market. The MPF program allows us the benefit of servicing these mortgages while
still providing our clients with local service.
- Toby Kommer, Chief Financial Officer, Bank Forward
1st National Bank in Waseca, Minnesota, has sold more than $55 million loans into the
MPF program.
We started the program eight years ago to retain customers. It began as a $5.0 million
commitment and has allowed us to compete in our market and extend important
credit in our communities. Customers can walk into our bank and have their problem
solved quickly – we have more than exceeded our initial objective.
- Jon D. Kaiser, Senior Lending Officer, 1st National Bank of Waseca
Strengthening Communities
Up to $50 million in variable rate index bonds are available to finance affordable homes for
families across the state of Iowa. In a first-of-its-kind partnership, the Iowa Finance Authority
(IFA) and FHLB Des Moines are making housing attainable for property owners and sustaining
housing for hundreds of Iowans for many years to come. This public/private venture has
given IFA access to a long-term, lower-cost, low-risk funding source which, in turn, effectively
maximizes the number of affordable housing units available.
This unique partnership has already put $11.5 million to use by refinancing two
affordable housing projects. This means that more than 350 families in Davenport
and West Des Moines can rely on safe, decent and affordable housing for many years
to come.
-Dave Jamison, Executive Director, Iowa Finance Authority
Des Moines, Iowa
15
Together we build
Benefits of the FHLB Des Moines business
model are not only provided to members,
but passed along to their communities. Over
time, legislative changes have broadened
the Bank’s scope to include community
and economic development. FHLB Des
Moines continues to offer new products
and build partnerships that allow the Bank
to remain vital and relevant, while having
a profound impact on neighborhoods and
individual lives.
70%
60%
50%
40%
30%
0%
SOUTH DAKOTA
NORTH DAKOTA
MISSOURI
IOWA
10%
MINNESOTA
20%
Borrowing penetration
percentage of members utilizing
FHLB Des Moines products
All graphs as of 12/31/11
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communities.
Student Housing Receives Upgrade
Students at Minnesota State University in Mankato, Minnesota, are vying for space at the newly
remodeled Briargate II apartment development. The property, now 100 percent leased with a
waiting list, was renovated using a $2.0 million loan from Minnwest Bank. The rehabilitation has
significantly improved the overall viability of the area. New construction jobs were created, local
businesses saw increased sales and quality of life was enhanced.
FHLB Des Moines was an important partner for providing funding for these upgrades.
This type of financing is essential in getting projects like this one completed. As a
Federal Home Loan Bank member, we have the ability to support new businesses
that enter the market and back existing businesses that need capital to continue
daily activities or grow and expand.
-Douglas Karsky, President, Minnwest Bank
Redwood Falls, Minnesota
SOUTH DAKOTA
70
SOUTH DAKOTA
NORTH DAKOTA70
74
NORTH DAKOTA
74
IOWA
IOWA 365
365
MISSOURI
MISSOURI336
336
SOUTH DAKOTA
$
4.7B
SOUTH DAKOTA
$
4.7B
NORTH DAKOTA
$
955M
NORTH DAKOTA
$
955M
MISSOURI
$
MISSOURI4.0B
$
4.0B
IOWA
$
IOWA 14.0B
$
14.0B
MINNESOTA
$
1.9B
MINNESOTA
$
1.9B
MINNESOTA
370
MINNESOTA
370
total advances = $25.5 Billion
member count = 1,215
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communities.
Protecting their
community
Local lenders protect their communities
through natural disasters by donating time,
resources and equipment. Pierre, South
Dakota-area residents were first alerted to
the potential flooding of the Missouri River
the Friday before Memorial Day weekend
in 2011. Almost immediately, BankWest
employees swung into action, filling
17,000 sand bags that were used to build
a barrier around the bank and employees'
homes. The 2011 flood impacted homes,
businesses and infrastructure, but Pierre
pulled through. “Neighbor helped neighbor,
friend helped friend and strangers helped
strangers,” said Steve Bumann, chief
financial officer, BankWest, Inc.
While some businesses were devastated
by the summer-long event, others reported
stronger than normal sales. People whose
homes were out of the flood plain stored
victims’ valuables, and volunteers from all
over the Midwest showed up to pitch in
where needed. BankWest employees not
only put in hundreds of hours of volunteer
time, but also offered financial guidance
to customers affected by the flood. “We
appointed a team to thoroughly research
and compare the government-backed
financing options available to flood victims
and to create a BankWest loan product to
fill in gaps. Our goal was to help customers
make the best decisions regarding financial
recovery from the flood,” said Kristin
Brost, vice president, BankWest, Inc. As
a testament to their resiliency, the city of
Pierre saw an increase in sales revenue
for the year and is looking forward to a
successful 2012.
As one Pierre resident put it,
The flood was one of the most
heartbreaking and heartwarming
things I’ve ever witnessed.
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Angie and Keith Haley
sustaining small business
Strong communities are created through strong Main Streets. In Ackley, Iowa, Ackley Super
Foods has been located on Main Street since 1968. As a locally owned business, the grocery
store provides residents everything from a gallon of milk to bulk orders for a fundraising
event. Jim Roelfs, a lending officer at Ackley State Bank in Ackley, remembers working for
Ackley Super Foods in high school. For more than three years, he served as an employee.
Today, he is serving as a resource, providing Keith and Angie Haley with an FHLB Des Moines
Community Investment Advance that has allowed them to purchase and update the Main
Street-based store. “As our only grocery store in town, we knew that keeping it locally owned
would be vital to our community,” said Jim. “We were able to make this project work for the
advancement of our community.”
The advance supported a complete update of lighting inside the store, installation of rooftop
energy efficient cooling and heating units as well as renovation to the frozen food section.
The Haley’s have attributed recent sales growth to these updates.
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Together we
FHLB Des Moines is a private cooperative with a public
mission. Not only does the Bank provide advance
products, it also has one of the most successful grant
programs in the nation – the Affordable Housing Program
(AHP). Millions of dollars have been provided through
the competitive grant program as well as the Bank’s
downpayment and closing cost assistance programs.
In the 22 years since the first funding round in 1990,
FHLB Des Moines has funded $219 million in grants
to create 49,000 homes for lower-income families
and individuals. These homes are supported by FHLB
Des Moines, but would not be possible without local
residents, community officials, county and state
agencies, members, developers, non-profits and
others who have committed their time and resources
The good work you do not only
changes neighborhoods, it
transforms the people who live
within those neighborhoods.
- Congressman Wm. Lacy Clay, Missouri
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2011 FHLB DES MOINES AHP GRANTS
to creating healthier neighborhoods.
13th and Clark Street Supportive Housing | 2011 INRHC
Apartments | Community Foundations – 111 | Efficient
for Humanity of Minnesota | HAPI Home Rehab Program
Rehabilitation | Jaycee Fairgrounds Village | Legacy
Housing Trust Fund | OS(L)H AHP Rental Rehab 11 |
Avenue Apartments | Southwest Minnesota Regional Rehab
Club Apartments | Urban Exterior Restoration Facelift |
change lives.
AHP Repair Program | Alliance NSP2 | Arrowhead Single Family Rehabilitation | Bootheel Home Repair | Buxton Rental Properties | City Walk
Homes 2011 | Family Center Rehab | Fond du Lac Veterans Supportive Housing | Giwanakimin | Habitat for Humanity – South Dakota | Habitat
| Hillcrest Transitional Housing | Hillsdale Home Repair Program | Home Rehabilitation 2011 | Home Rehabilitation Large Project 2011 | Housing
Apartments at College Hill | Lighthouse | Morrison Co. Cities Owner-occupied | New CISS Shelter | NHS of KCMO Acquisition Rehab | NIACOG
Owner-occupied Rehabilitation for North | Pagedale Home Repair Program | Pine Lawn Home Repair | Red Oak Housing Repair Program | Snelling
SWHA New Construction | SWHA Rehab 2011 | Tallawhalt | The Salvation Army St. Louis Veterans | Touchstone Housing and Wellness | Towne
Valley Commons East Apartments | West End Home Repair Program | White
21 Earth Owner-occupied Homes | WRDI Home Modification Program
change lives.
Housing is the essential key to a stable home
and family life. Without it, it’s almost impossible
to construct a meaningful family life.
- Congressman Keith Ellison, Minnesota
housing the homeless
In 2011, CommunityAmerica Credit Union
and City Union Mission, Inc. received
$457,000 for improvements to the Family
Center in Kansas City, Missouri. City
Union Mission’s Family Center project is
necessary to maintain 48 units of housing
for homeless mothers and fathers with
children. The current buildings are in need
of maintenance work, including re-roofing,
window repairs and replacements and
restoring exterior walls.
City Union Mission and CommunityAmerica Credit Union have
used a total of $1.5 million in AHP grants to continue providing a
warm place to stay for individuals and children.
The project helps people, like Jaycee, who
need a little boost to get back on their feet.
“I spent the first night at a gas station
parking lot...it was just me and my two
younger kids...I just looked up and said I
don’t think that it could get any worse. I
came to the Family Center and got a place
to stay...the moment I stepped in this
building I experienced love, understanding
and compassion.”
AHP Grants since inception
Over the last few years, there have been those who
try to turn the words 'do good' into a negative
connotation. Why would anyone be ashamed of
this title? Federal Home Loan Bank of Des Moines
...do gooder!
number of grants: 2,363
total Grant amount: $219,738,301
Total development costs: $2,337,097,838
Number of homes: 48,787
- Congressman Emanuel Cleaver, Missouri
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strengthening communities one house at a time
One example of how strong and prosperous neighborhoods are built is Habitat for Humanity.
The FHLBanks are the largest single funding provider to Habitat for Humanity. FHLB Des Moines
has partnered with affiliates throughout its district to create homes and build communities.
In June 2011, nearly 50 employees participated in a five-day blitz build in partnership with Cedar
Valley Habitat for Humanity in Cedar Rapids, Iowa. Together with the homeowner, Minea Nanez,
and her children, they completed the exterior of the house. The last day of the build, the boys
had the opportunity to be on site and put in their “sweat equity” by delivering water to the hot
volunteers. They were excited about having a yard, a living room to play video games and a
neighborhood full of other kids.
Since 1998, Minnesota Habitat for Humanity has received $5.2 million in AHP grants to partially
fund the creation of 731 homes, including one in Winona that opened up new doors for a family with
a father in a wheelchair. Through hundreds of volunteer hours, the family moved into a handicapaccessible home with lower counters, reachable appliances and a new bathroom. The mother went
back to the Winona affiliate to thank them for what they had done and to tell them exciting news –
because her husband was now able to do more on his own, she was going to find a second job
so she could better support her family. “This is the stuff we get to do! That home received FHLB
Des Moines money and look at the difference it made,” said Jan Plimpton, executive director,
Habitat for Humanity of Minnesota.
The Habitat build gave volunteers the opportunity to leave their desks
and the office and to be part of something big – building a house from
the ground up.
-Dick Swanson, President and CEO, FHLB Des Moines
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FHLB Des Moines
Board of Directors
Johnny A. Danos
Director of Strategic
Development
LWBJ Financial
West Des Moines, IA
Gerald D. Eid
Chief Executive Officer
Eid-Co Buildings, Inc.
Fargo, ND
Michael J. Finley
President
Janesville State Bank
Janesville, MN
FHLB Des Moines
Advisory Council
Robert Durant
Secretary/Treasurer
White Earth Nation
Reservation Tribal Council
Ogema, MN
Marcia Erickson
Executive Director
Northeast South Dakota
Community Action Program
Sisseton, SD
Vice Chair
Leon Gray
Consultant
NeighborWorks
Kansas City, MO
FHLB Des Moines
Executive Team
24
Richard S. Swanson
President and Chief
Executive Officer
Van D. Fishback
Vice Chairman
First Bank & Trust
Brookings, SD
Eric A. Hardmeyer
President and CEO
Bank of North Dakota
Bismarck, ND
Board Vice Chair
John F. Kennedy, Sr.
Senior Vice President and CFO
St. Louis Equity Fund, Inc.
St. Louis, MO
Ellen Z. Lamale
West Des Moines, IA Dale E. Oberkfell
Executive Vice President and CFO
Midwest BankCentre
St. Louis, MO
Chris D. Grimm
President
Iowa State Bank
Wapello, IA Labh S. Hira, PhD
Interim President and CEO
Iowa State University Foundation
Ames, IA
Michael K. Guttau
Chairman and CEO
Treynor State Bank
Treynor, IA
Board Chair
Teresa J. Keegan
Senior Vice President and CFO
Fidelity Bank
Edina, MN
Paula R. Meyer
Principal
Paula R. Meyer Consulting
St. Ansgar, IA
Joseph C. Stewart III
Chief Executive Officer
BancStar
Festus, MO
Bill Hansen
Consultant
City of Centerville
Centerville, SD
Dan Madler
Chief Operating Officer
Beyond Shelter, Inc.
Fargo, ND
Bo Thao-Urabe
Director
Asian/Americans/Pacific Islanders in
Philanthropy
Minneapolis, MN
Lekeisha Veasley
Housing Program Manager
Operation Threshold
Waterloo, IA
Warren Hanson
President and CEO
Greater Minnesota Housing Fund
St. Paul, MN
Chair
Jan Plimpton
Executive Director
Habitat for Humanity of Minnesota
Minneapolis, MN
Jessica Thomasson
Director
Lutheran Social Services
Housing, Inc.
Fargo, ND James White
Consultant
Kansas City, MO
Debra Houghtaling
Executive Director
Grow Iowa Foundation
Greenfield, IA
Randy Railsback
Executive Director
Green Hills RPC
Trenton, MO
Tim Urban
President
Urban Development Corp.
Des Moines, IA
Tonya White Mountain
KAT Communications
Mclaughlin, SD
Edward J. McGreen
Executive Vice President and Chief
Capital Markets Officer
Steven T. Schuler
Executive Vice President and Chief
Financial Officer
Dusan Stojanovic
Executive Vice President and Chief
Risk Officer
Clair J. Lensing
President and CEO
Security State Bank
Waverly, IA
25
John H. Robinson
Chairman
Hamilton Ventures, LLC
Kansas City, MO
Federal Home Loan Bank of Des Moines
Skywalk Level, 801 Walnut Street, Suite 200, Des Moines IA 50309-3513
800.544.3452 • fhlbdm.com