UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2022~~March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-51404

FEDERAL HOME LOAN BANK OF INDIANAPOLIS

(Exact name of registrant as specified in its charter)


Federally Chartered Corporation						35-6001443
(State or other jurisdiction of incorporation)						(IRS employer identification number)

8250 Woodfield Crossing Blvd. Indianapolis, IN						46240
(Address of principal executive offices)						(Zip code)

(317) 465-0200

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing for the past 90 days.

x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

☐

Large accelerated filer

☐

Accelerated filer

☐

Emerging growth company

Non-accelerated Filer

☐

Smaller reporting company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes x No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


			Shares outstanding as of ~~July 31, 2022~~April 30, 2023
Class A Stock, par value $100			—
Class B Stock, par value $100			~~23,320,275~~26,852,102


Table of Contents		Page
		Number

	Special Note Regarding Forward-Looking Statements	3
PART I.	FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS (unaudited)

	Statements of Condition as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022	4

	Statements of Income for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~	5

	Statements of Comprehensive Income for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~	6

	Statements of Capital for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~	7

	Statements of Cash Flows for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~	98

	Notes to Financial Statements:
	Note 1 - Summary of Significant Accounting Policies	1110
	Note 2 - Recently Adopted and Issued Accounting Guidance	1110
	Note 3 - Investments	1210
	Note 4 - Advances	1514
	Note 5 - Mortgage Loans Held for Portfolio	1615
	Note 6 - Derivatives and Hedging Activities	1716
	Note 7 - Consolidated Obligations	2119
	Note 8 - Affordable Housing Program	2321
	Note 9 - Capital	2321
	Note 10 - Accumulated Other Comprehensive Income	2422
	Note 11 - Segment Information	2623
	Note 12 - Estimated Fair Values	2724
	Note 13 - Commitments and Contingencies	3027
	Note 14 - Related Party and Other Transactions	3128

	Defined Terms	3229

Item 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	Presentation	3430
	Executive Summary	3430
	Results of Operations and Changes in Financial Condition	3633
	Operating Segments	4538
	Analysis of Financial Condition	4639
	Liquidity ~~and~~	47
	Capital Resources	5247
	Critical Accounting Estimates	5449
	Recent Accounting and Regulatory Developments	5449
	Risk Management	5550
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5853
Item 4.	CONTROLS AND PROCEDURES	6055

PART II.	OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	6156
Item 1A.	RISK FACTORS	6156
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	6156
Item 3.	DEFAULTS UPON SENIOR SECURITIES	6156
Item 4.	MINE SAFETY DISCLOSURES	6156
Item 5.	OTHER INFORMATION	6156
Item 6.	EXHIBITS	6257

As used in this Form 10-Q, unless the context otherwise requires, the terms "we," "us," "our," and "Bank" refer to the Federal Home Loan Bank of Indianapolis or its management. We use acronyms and terms throughout that are defined herein or in the Defined Terms in Part I Item 1.

Special Note Regarding Forward-Looking Statements

Statements in this Form 10-Q, including statements describing our objectives, projections, estimates or predictions, may be considered to be "forward-looking statements." These statements may use forward-looking terminology, such as "anticipates," "believes," "could," "estimates," "may," "should," "expects," "will," or their negatives or other variations on these terms. We caution that, by their nature, forward-looking statements involve risk or uncertainty and that actual results either could differ materially from those expressed or implied in these forward-looking statements or could affect the extent to which a particular objective, projection, estimate, or prediction is realized. These forward-looking statements involve risks and uncertainties including, but not limited to, the following:

•economic and market conditions, including the timing and volume of market activity, inflation or deflation, changes in the value of global currencies, and changes in the financial condition of market participants;

•volatility of market prices, interest rates, and indices or the availability of suitable interest rate indices, or other factors, resulting from the effects of, and changes in, various monetary or fiscal policies and regulations, including those ~~determined by~~of the Federal Reserve, the Finance Agency and the ~~FDIC,~~Federal Deposit Insurance Corporation, or a decline in liquidity in the financial markets, that could affect the value of investments, or collateral we hold as security for the obligations of our members and counterparties;

•changes in demand for our advances and purchases of mortgage loans resulting from:

◦changes in our members' deposit flows and credit demands;

◦changes in products or services we are able to provide;

◦federal or state regulatory developments impacting suitability or eligibility of membership classes;

◦membership changes, including, but not limited to, mergers, acquisitions and consolidations of charters;

◦changes in the general level of housing activity in the United States and particularly our district states of Michigan and Indiana, the level of refinancing activity and consumer product preferences;

◦competitive forces, including, without limitation, other sources of funding available to our members; and

◦changes in the terms and conditions of ownership of our capital stock;

•changes in mortgage asset prepayment patterns, delinquency rates and housing values or improper or inadequate mortgage originations and mortgage servicing;

•ability to introduce and successfully manage new products and services, including new types of collateral securing advances;

•political events, including federal government shutdowns, administrative, legislative, regulatory, or other developments, changes in international political structures and alliances, and judicial rulings that affect us, our status as a secured creditor, our members (or certain classes of members), prospective members, counterparties, GSEs generally, one or more of the FHLBanks and/or investors in the consolidated obligations of the FHLBanks;

•national or international ~~health~~ crises, ~~such as the COVID-19~~including a pandemic, ~~including any resurgence~~war, acts of ~~the pandemic, new and evolving pandemic strains,~~terrorism or natural disasters, and the effects of ~~health~~such crises on our and our counterparties' operations, member demand, market liquidity, and the global funding markets, and the governmental, regulatory, and fiscal interventions undertaken to stabilize local, national, and global economic conditions;

•ability to access the capital markets and raise capital market funding on acceptable terms;

•changes in our credit ratings or the credit ratings of the other FHLBanks and the FHLBank System;

•changes in the level of government guarantees provided to other United States and international financial institutions;

•dealer commitment to supporting the issuance of our consolidated obligations;

•ability of one or more of the FHLBanks to repay its portion of the consolidated obligations, or otherwise meet its financial obligations;

•ability to attract and retain skilled personnel;

•ability to develop, implement and support technology and information systems sufficient to manage our business effectively;

•nonperformance of counterparties to uncleared and cleared derivative transactions;

•changes in terms of derivative agreements and similar agreements;

•loss arising from natural disasters, acts of war, riots, insurrection or acts of terrorism;

•changes in or differing interpretations of accounting guidance; and

•other risk factors identified in our filings with the SEC.

Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, additional disclosures may be made through reports filed with the SEC in the future, including our reports on Forms 10-K, 10-Q and 8-K.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Federal Home Loan Bank of Indianapolis

Statements of Condition

(Unaudited, $ amounts in thousands, except par value)


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Assets:	Assets:					Assets:
Cash and due from banks	Cash and due from banks	$	59,596	$	867,880	Cash and due from banks	$	62,685	$	21,161
Interest-bearing deposits (Note 3)	Interest-bearing deposits (Note 3)	325,041		100,041		Interest-bearing deposits (Note 3)	580,868		856,060
Securities purchased under agreements to resell (Note 3)	Securities purchased under agreements to resell (Note 3)	4,500,000		3,500,000		Securities purchased under agreements to resell (Note 3)	5,625,000		4,550,000
Federal funds sold (Note 3)	Federal funds sold (Note 3)	2,496,000		2,580,000		Federal funds sold (Note 3)	2,713,000		3,148,000
Trading securities (Note 3)	Trading securities (Note 3)	4,039,407		3,946,799		Trading securities (Note 3)	394,500		2,230,248
Available-for-sale securities (Note 3) (amortized cost of $10,164,321 and $9,007,993)		10,196,572		9,159,935
Held-to-maturity securities (Note 3) (estimated fair values of $3,821,942 and $4,322,157)		3,877,299		4,313,773
Available-for-sale securities (Note 3) (amortized cost of $13,373,082 and $12,189,776)						Available-for-sale securities (Note 3) (amortized cost of $13,373,082 and $12,189,776)	13,315,166		12,179,837
Held-to-maturity securities (Note 3) (estimated fair values of $4,494,347 and $4,156,218)						Held-to-maturity securities (Note 3) (estimated fair values of $4,494,347 and $4,156,218)	4,563,538		4,240,201
Advances (Note 4)	Advances (Note 4)	30,507,462		27,497,835		Advances (Note 4)	36,950,032		36,682,459
Mortgage loans held for portfolio, net (Note 5)	Mortgage loans held for portfolio, net (Note 5)	7,729,642		7,616,134		Mortgage loans held for portfolio, net (Note 5)	7,732,298		7,686,455
Accrued interest receivable	Accrued interest receivable	96,937		80,758		Accrued interest receivable	155,856		152,867
Derivative assets, net (Note 6)	Derivative assets, net (Note 6)	325,848		220,202		Derivative assets, net (Note 6)	490,129		434,421
Other assets	Other assets	112,459		121,246		Other assets	106,564		102,071

Total assets	Total assets	$	64,266,263	$	60,004,603	Total assets	$	72,689,636	$	72,283,780

Liabilities:	Liabilities:					Liabilities:
Deposits	Deposits	$	907,525	$	1,366,397	Deposits	$	582,078	$	595,907
Consolidated obligations (Note 7):	Consolidated obligations (Note 7):					Consolidated obligations (Note 7):
Discount notes	Discount notes	19,587,260		12,116,358		Discount notes	23,171,249		27,387,492
Bonds	Bonds	39,462,365		42,361,572		Bonds	43,706,985		39,882,454
Total consolidated obligations, net	Total consolidated obligations, net	59,049,625		54,477,930		Total consolidated obligations, net	66,878,234		67,269,946
Loans from other FHLBanks						Loans from other FHLBanks	500,000		—
Accrued interest payable	Accrued interest payable	124,999		88,068		Accrued interest payable	217,382		162,584
Affordable Housing Program payable (Note 8)	Affordable Housing Program payable (Note 8)	28,953		31,049		Affordable Housing Program payable (Note 8)	46,615		38,170
Derivative liabilities, net (Note 6)	Derivative liabilities, net (Note 6)	13,569		12,185		Derivative liabilities, net (Note 6)	18,413		19,209
Mandatorily redeemable capital stock (Note 9)	Mandatorily redeemable capital stock (Note 9)	45,583		50,422		Mandatorily redeemable capital stock (Note 9)	372,487		372,503
Other liabilities	Other liabilities	619,298		422,221		Other liabilities	503,584		441,763

Total liabilities	Total liabilities	60,789,552		56,448,272		Total liabilities	69,118,793		68,900,082

Commitments and contingencies (Note 13)	Commitments and contingencies (Note 13)	0		0		Commitments and contingencies (Note 13)

Capital (Note 9):	Capital (Note 9):					Capital (Note 9):
Capital stock (putable at par value of $100 per share):	Capital stock (putable at par value of $100 per share):					Capital stock (putable at par value of $100 per share):
Class B issued and outstanding shares: 22,508,342 and 22,462,009		2,250,835		2,246,201
Class B issued and outstanding shares: 22,921,913 and 21,231,253						Class B issued and outstanding shares: 22,921,913 and 21,231,253	2,292,192		2,123,125
Retained earnings:	Retained earnings:					Retained earnings:
Unrestricted	Unrestricted	912,329		889,869		Unrestricted	1,011,191		963,812
Restricted	Restricted	299,391		287,203		Restricted	340,888		322,552
Total retained earnings	Total retained earnings	1,211,720		1,177,072		Total retained earnings	1,352,079		1,286,364
Total accumulated other comprehensive income (Note 10)		14,156		133,058
Total accumulated other comprehensive income (loss) (Note 10)						Total accumulated other comprehensive income (loss) (Note 10)	(73,428)		(25,791)

Total capital	Total capital	3,476,711		3,556,331		Total capital	3,570,843		3,383,698

Total liabilities and capital	Total liabilities and capital	$	64,266,263	$	60,004,603	Total liabilities and capital	$	72,689,636	$	72,283,780

The accompanying notes are an integral part of these financial statements.

4

Federal Home Loan Bank of Indianapolis

Statements of Income

(Unaudited, $ amounts in thousands)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Interest Income:	Interest Income:									Interest Income:
Advances	Advances	$	67,562	$	28,175	$	102,603	$	64,284	Advances		$	434,229	$	35,041
Interest-bearing deposits	Interest-bearing deposits	2,623		121		2,913		277		Interest-bearing deposits		26,253		290
Securities purchased under agreements to resell	Securities purchased under agreements to resell	6,066		215		6,971		652		Securities purchased under agreements to resell		31,950		905
Federal funds sold	Federal funds sold	7,682		651		8,524		1,454		Federal funds sold		45,487		842
Trading securities	Trading securities	8,347		14,421		13,792		30,591		Trading securities		3,077		5,445
Available-for-sale securities	Available-for-sale securities	38,563		21,184		61,008		51,020		Available-for-sale securities		171,719		22,445
Held-to-maturity securities	Held-to-maturity securities	9,033		7,809		16,544		17,673		Held-to-maturity securities		48,425		7,511
Mortgage loans held for portfolio	Mortgage loans held for portfolio	51,467		40,119		99,268		80,401		Mortgage loans held for portfolio		57,755		47,801
Other interest income		22		—		22		—

Total interest income	Total interest income	191,365		112,695		311,645		246,352		Total interest income		818,895		120,280

Interest Expense:	Interest Expense:									Interest Expense:
Consolidated obligation discount notes	Consolidated obligation discount notes	26,535		1,733		30,188		5,932		Consolidated obligation discount notes		256,776		3,653
Consolidated obligation bonds	Consolidated obligation bonds	99,192		52,674		150,891		106,470		Consolidated obligation bonds		446,674		51,699
Deposits	Deposits	1,547		43		1,646		80		Deposits		7,618		99
Mandatorily redeemable capital stock	Mandatorily redeemable capital stock	269		929		514		2,033		Mandatorily redeemable capital stock		4,110		245

Other interest expense										Other interest expense		68		—
Total interest expense	Total interest expense	127,543		55,379		183,239		114,515		Total interest expense		715,246		55,696

Net interest income	Net interest income	63,822		57,316		128,406		131,837		Net interest income		103,649		64,584
Provision for (reversal of) credit losses	Provision for (reversal of) credit losses	(38)		(44)		(60)		44		Provision for (reversal of) credit losses		2		(22)

Net interest income after provision for credit losses	Net interest income after provision for credit losses	63,860		57,360		128,466		131,793		Net interest income after provision for credit losses		103,647		64,606

Other Income:	Other Income:									Other Income:

Net gains (losses) on trading securities	Net gains (losses) on trading securities	(14,220)		(13,731)		(38,415)		(27,359)		Net gains (losses) on trading securities		8,314		(24,195)
Net gains (losses) on derivatives	Net gains (losses) on derivatives	17,203		186		37,197		(652)		Net gains (losses) on derivatives		(1,363)		19,994

Net gains on extinguishment of debt										Net gains on extinguishment of debt		19,846		—
Other, net	Other, net	(4,681)		3,775		(7,882)		5,265		Other, net		3,350		(3,201)
Total other income (loss)	Total other income (loss)	(1,698)		(9,770)		(9,100)		(22,746)		Total other income (loss)		30,147		(7,402)

Other Expenses:	Other Expenses:									Other Expenses:
Compensation and benefits	Compensation and benefits	13,411		14,092		26,367		29,850		Compensation and benefits		16,835		12,956
Other operating expenses	Other operating expenses	7,756		7,417		14,850		14,688		Other operating expenses		7,400		7,094
Federal Housing Finance Agency	Federal Housing Finance Agency	1,801		1,474		3,717		2,947		Federal Housing Finance Agency		1,711		1,916
Office of Finance	Office of Finance	1,081		1,228		2,498		3,225		Office of Finance		1,073		1,417
Other	Other	2,154		4,226		4,165		5,857		Other		4,451		2,011
Total other expenses	Total other expenses	26,203		28,437		51,597		56,567		Total other expenses		31,470		25,394

Income before assessments	Income before assessments	35,959		19,153		67,769		52,480		Income before assessments		102,324		31,810

Affordable Housing Program assessments	Affordable Housing Program assessments	3,623		2,008		6,828		5,451		Affordable Housing Program assessments		10,643		3,205

Net income	Net income	$	32,336	$	17,145	$	60,941	$	47,029	Net income		$	91,681	$	28,605

The accompanying notes are an integral part of these financial statements.

5

Federal Home Loan Bank of Indianapolis

Statements of Comprehensive Income

(Unaudited, $ amounts in thousands)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022

Net income	Net income	$	32,336	$	17,145	$	60,941	$	47,029	Net income		$	91,681	$	28,605

Other Comprehensive Income:	Other Comprehensive Income:									Other Comprehensive Income:

Net change in unrealized gains (losses) on available-for-sale securities	Net change in unrealized gains (losses) on available-for-sale securities	(45,228)		4,502		(119,691)		78,031		Net change in unrealized gains (losses) on available-for-sale securities		(47,977)		(74,463)

Pension benefits, net	Pension benefits, net	329		8,995		789		9,991		Pension benefits, net		340		460

Total other comprehensive income (loss)	Total other comprehensive income (loss)	(44,899)		13,497		(118,902)		88,022		Total other comprehensive income (loss)		(47,637)		(74,003)

Total comprehensive income (loss)	Total comprehensive income (loss)	$	(12,563)	$	30,642	$	(57,961)	$	135,051	Total comprehensive income (loss)		$	44,044	$	(45,398)

The accompanying notes are an integral part of these financial statements.

6

Federal Home Loan Bank of Indianapolis

Statements of Capital

Three Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~

(Unaudited, $ amounts and shares in thousands)

Capital Stock Retained Earnings Accumulated
Other
Comprehensive
Income Total
Capital
Shares Par Value Unrestricted Restricted Total
Balance, March 31, 2022 21,215 $ 2,121,541 $ 899,750 $ 292,924 $ 1,192,674 $ 59,055 $ 3,373,270
Total comprehensive income (loss) 25,869 6,467 32,336 (44,899) (12,563)
Proceeds from issuance of capital stock 1,293 129,294 129,294
Cash dividends on capital stock
(2.47% annualized)
(13,290) — (13,290) (13,290)
Balance, June 30, 2022 22,508 $ 2,250,835 $ 912,329 $ 299,391 $ 1,211,720 $ 14,156 $ 3,476,711
Balance, March 31, 2021 22,142 $ 2,214,192 $ 878,854 $ 274,403 $ 1,153,257 $ 179,927 $ 3,547,376
Total comprehensive income 13,716 3,429 17,145 13,497 30,642
Proceeds from issuance of capital stock 200 20,005 20,005
Shares reclassified to mandatorily redeemable capital stock, net (3) (281) (281)
Cash dividends on capital stock
(2.57% annualized)
(13,989) — (13,989) (13,989)
Balance, June 30, 2021 22,339 $ 2,233,916 $ 878,581 $ 277,832 $ 1,156,413 $ 193,424 $ 3,583,753



	Capital Stock			Retained Earnings						Accumulated Other Comprehensive Income		Total Capital
	Shares	Par Value		Unrestricted		Restricted		Total

Balance, December 31, 2022	21,231	$	2,123,125	$	963,812	$	322,552	$	1,286,364	$	(25,791)	$	3,383,698

Total comprehensive income (loss)				73,345		18,336		91,681		(47,637)		44,044

Proceeds from issuance of capital stock	1,691	169,080										169,080



Shares reclassified to mandatorily redeemable capital stock, net	—	(13)										(13)





Cash dividends on capital stock (4.41% annualized)				(25,966)		—		(25,966)				(25,966)

Balance, March 31, 2023	22,922	$	2,292,192	$	1,011,191	$	340,888	$	1,352,079	$	(73,428)	$	3,570,843

Balance, December 31, 2021	22,462	$	2,246,201	$	889,869	$	287,203	$	1,177,072	$	133,058	$	3,556,331

Total comprehensive income (loss)				22,884		5,721		28,605		(74,003)		(45,398)

Proceeds from issuance of capital stock	372	37,225										37,225

Redemption/repurchase of capital stock	(1,619)	(161,885)										(161,885)





Cash dividends on capital stock (2.31% annualized)				(13,003)		—		(13,003)				(13,003)

Balance, March 31, 2022	21,215	$	2,121,541	$	899,750	$	292,924	$	1,192,674	$	59,055	$	3,373,270

The accompanying notes are an integral part of these financial statements.

7

~~Federal Home Loan Bank of Indianapolis~~

~~Statements of Capital~~

~~Six Months Ended June 30, 2022 and 2021~~

~~(Unaudited, $ amounts and shares in thousands)~~

Capital Stock Retained Earnings Accumulated
Other
Comprehensive
Income Total
Capital
Shares Par Value Unrestricted Restricted Total
Balance, December 31, 2021 22,462 $ 2,246,201 $ 889,869 $ 287,203 $ 1,177,072 $ 133,058 $ 3,556,331
Total comprehensive income (loss) 48,753 12,188 60,941 (118,902) (57,961)
Proceeds from issuance of capital stock 1,665 166,519 166,519
Redemption/repurchase of capital stock (1,619) (161,885) (161,885)
Cash dividends on capital stock
(2.39% annualized)
(26,293) — (26,293) (26,293)
Balance, June 30, 2022 22,508 $ 2,250,835 $ 912,329 $ 299,391 $ 1,211,720 $ 14,156 $ 3,476,711
Balance, December 31, 2020 22,076 $ 2,207,570 $ 868,904 $ 268,426 $ 1,137,330 $ 105,402 $ 3,450,302
Total comprehensive income 37,623 9,406 47,029 88,022 135,051
Proceeds from issuance of capital stock 266 26,627 26,627
Shares reclassified to mandatorily redeemable capital stock, net (3) (281) (281)
Cash dividends on capital stock
(2.53% annualized)
(27,946) — (27,946) (27,946)
Balance, June 30, 2021 22,339 $ 2,233,916 $ 878,581 $ 277,832 $ 1,156,413 $ 193,424 $ 3,583,753

~~The accompanying notes are an integral part of these financial statements.~~

8

Federal Home Loan Bank of Indianapolis

Statements of Cash Flows

(Unaudited, $ amounts in thousands)


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Operating Activities:	Operating Activities:					Operating Activities:
Net income	Net income	$	60,941	$	47,029	Net income	$	91,681	$	28,605
Adjustments to reconcile net income to net cash provided by (used in) operating activities:	Adjustments to reconcile net income to net cash provided by (used in) operating activities:					Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization and depreciation	Amortization and depreciation	50,152		42,309		Amortization and depreciation	34,639		22,324
Changes in net derivative and hedging activities	Changes in net derivative and hedging activities	751,617		28,776		Changes in net derivative and hedging activities	(256,942)		460,458

Net (gains) on extinguishment of debt						Net (gains) on extinguishment of debt	(19,846)		—
Provision for (reversal of) credit losses	Provision for (reversal of) credit losses	(60)		44		Provision for (reversal of) credit losses	2		(22)
Net losses on trading securities		38,415		27,359
Net (gains) losses on trading securities						Net (gains) losses on trading securities	(8,314)		24,195

Other adjustments						Other adjustments	71		—
Changes in:	Changes in:					Changes in:
Accrued interest receivable	Accrued interest receivable	(17,495)		11,601		Accrued interest receivable	(3,443)		171
Other assets	Other assets	5,955		(12,783)		Other assets	(6,430)		(3,125)
Accrued interest payable	Accrued interest payable	37,075		8,349		Accrued interest payable	54,877		833
Other liabilities	Other liabilities	8,559		1,182		Other liabilities	17,603		25,795
Total adjustments, net	Total adjustments, net	874,218		106,837		Total adjustments, net	(187,783)		530,629

Net cash provided by operating activities		935,159		153,866
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	(96,102)		559,234

Investing Activities:	Investing Activities:					Investing Activities:
Net change in:	Net change in:					Net change in:
Interest-bearing deposits	Interest-bearing deposits	(1,219,223)		452,160		Interest-bearing deposits	342,487		(636,378)
Securities purchased under agreements to resell	Securities purchased under agreements to resell	(1,000,000)		(500,000)		Securities purchased under agreements to resell	(1,075,000)		(4,100,000)
Federal funds sold	Federal funds sold	84,000		(1,590,000)		Federal funds sold	435,000		940,000
Trading securities:	Trading securities:					Trading securities:
Proceeds from maturities	Proceeds from maturities	1,600,000		850,000		Proceeds from maturities	1,350,000		1,100,000
Proceeds from sales	Proceeds from sales	200,000		50,006		Proceeds from sales	494,063		—
Purchases	Purchases	(1,930,219)		(1,649,933)		Purchases	—		(1,930,219)
Available-for-sale securities:	Available-for-sale securities:					Available-for-sale securities:
Proceeds from maturities and paydowns	Proceeds from maturities and paydowns	503,910		643,500		Proceeds from maturities and paydowns	78,980		366,760

Purchases	Purchases	(2,362,677)		(60,290)		Purchases	(966,760)		(1,654,878)
Held-to-maturity securities:	Held-to-maturity securities:					Held-to-maturity securities:
Proceeds from maturities and paydowns	Proceeds from maturities and paydowns	630,398		538,805		Proceeds from maturities and paydowns	79,707		312,678

Proceeds from sales						Proceeds from sales	9,769		—
Purchases	Purchases	(51,312)		(584,749)		Purchases	(365,143)		(51,312)
Advances:	Advances:					Advances:
Principal repayments	Principal repayments	71,353,438		139,543,669		Principal repayments	94,663,252		24,653,003
Disbursements to members	Disbursements to members	(74,888,350)		(136,081,315)		Disbursements to members	(94,691,618)		(24,118,758)
Mortgage loans held for portfolio:	Mortgage loans held for portfolio:					Mortgage loans held for portfolio:
Principal collections	Principal collections	600,449		1,776,690		Principal collections	151,096		340,010
Purchases from members	Purchases from members	(771,838)		(1,145,532)		Purchases from members	(196,239)		(460,320)
Purchases of premises, software, and equipment	Purchases of premises, software, and equipment	(1,989)		(2,520)		Purchases of premises, software, and equipment	(576)		(571)
Loans to other Federal Home Loan Banks:	Loans to other Federal Home Loan Banks:					Loans to other Federal Home Loan Banks:
Principal repayments	Principal repayments	520,000		20,000		Principal repayments	—		10,000
Disbursements	Disbursements	(520,000)		(20,000)		Disbursements	—		(10,000)

Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(7,253,413)		2,240,491		Net cash provided by (used in) investing activities	309,018		(5,239,985)
(continued)

(continued)

The accompanying notes are an integral part of these financial statements.

98

Federal Home Loan Bank of Indianapolis

Statements of Cash Flows, continued

(Unaudited, $ amounts in thousands)


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Financing Activities:	Financing Activities:					Financing Activities:
Net change in deposits	Net change in deposits	(320,726)		222,576		Net change in deposits	(39,660)		(47,339)
Net proceeds (payments) on derivative contracts with financing elements	Net proceeds (payments) on derivative contracts with financing elements	(1,118)		(7,551)		Net proceeds (payments) on derivative contracts with financing elements	1,997		(776)
Net proceeds from issuance of consolidated obligations:	Net proceeds from issuance of consolidated obligations:					Net proceeds from issuance of consolidated obligations:
Discount notes	Discount notes	369,385,849		85,205,681		Discount notes	121,635,570		111,826,875
Bonds	Bonds	10,677,690		22,129,860		Bonds	7,961,817		7,327,205
Payments for matured and retired consolidated obligations:	Payments for matured and retired consolidated obligations:					Payments for matured and retired consolidated obligations:
Discount notes	Discount notes	(361,928,027)		(87,373,330)		Discount notes	(125,876,733)		(105,771,958)
Bonds	Bonds	(12,277,200)		(23,000,650)		Bonds	(4,497,468)		(9,152,800)

Loans from other Federal Home Loan Banks:						Loans from other Federal Home Loan Banks:
Proceeds from borrowings						Proceeds from borrowings	500,000		—

Proceeds from issuance of capital stock	Proceeds from issuance of capital stock	166,519		26,627		Proceeds from issuance of capital stock	169,080		37,225

Payments for redemption/repurchase of capital stock	Payments for redemption/repurchase of capital stock	(161,885)		—		Payments for redemption/repurchase of capital stock	—		(161,885)
Payments for redemption/repurchase of mandatorily redeemable capital stock	Payments for redemption/repurchase of mandatorily redeemable capital stock	(4,839)		(18,156)		Payments for redemption/repurchase of mandatorily redeemable capital stock	(29)		(4,831)

Dividend payments on capital stock	Dividend payments on capital stock	(26,293)		(27,946)		Dividend payments on capital stock	(25,966)		(13,003)

Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	5,509,970		(2,842,889)		Net cash provided by (used in) financing activities	(171,392)		4,038,713

Net increase (decrease) in cash and due from banks	Net increase (decrease) in cash and due from banks	(808,284)		(448,532)		Net increase (decrease) in cash and due from banks	41,524		(642,038)

Cash and due from banks at beginning of period	Cash and due from banks at beginning of period	867,880		1,811,544		Cash and due from banks at beginning of period	21,161		867,880

Cash and due from banks at end of period	Cash and due from banks at end of period	$	59,596	$	1,363,012	Cash and due from banks at end of period	$	62,685	$	225,842

Supplemental Disclosures:	Supplemental Disclosures:					Supplemental Disclosures:
Cash activities:	Cash activities:					Cash activities:
Interest payments	Interest payments	$	99,903	$	139,245	Interest payments	$	614,841	$	56,957
Affordable Housing Program payments	Affordable Housing Program payments	8,924		9,088		Affordable Housing Program payments	2,198		2,317
Non-cash activities:	Non-cash activities:					Non-cash activities:
Purchases of investment securities, traded but not yet settled	Purchases of investment securities, traded but not yet settled	220,413		—		Purchases of investment securities, traded but not yet settled	120,995		—
Capitalized interest on certain held-to-maturity securities		855		313
Par value of shares reclassified to mandatorily redeemable capital stock, net		—		281

The accompanying notes are an integral part of these financial statements.

109

Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Note 1 - Summary of Significant Accounting Policies

Unless the context otherwise requires, the terms "Bank", "we," "us," and "our" refer to the Federal Home Loan Bank of Indianapolis or its management. We use acronyms and terms throughout these Notes to Financial Statements that are defined in the Defined Terms.

Basis of Presentation. The accompanying interim financial statements have been prepared in accordance with GAAP and SEC requirements for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. Certain disclosures that would have substantially duplicated the disclosures in the financial statements, and notes thereto, included in our ~~2021~~2022 Form 10-K have been omitted unless the information contained in those disclosures materially changed. Therefore, these interim financial statements should be read in conjunction with our audited financial statements, and notes thereto, included in our ~~2021~~2022 Form 10-K.

The financial statements contain all adjustments that are, in the opinion of management, necessary for a fair statement of the Bank's financial position, results of operations and cash flows for the interim periods presented. All such adjustments were of a normal recurring nature. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full calendar year or any other interim period.

Use of Estimates. When preparing financial statements in accordance with GAAP, we are required to make subjective assumptions and estimates that may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of income and expense. Although the reported amounts and disclosures reflect our best estimates, actual results could differ significantly from these estimates. The most significant estimates pertain to the fair values of financial instruments.

~~Reclassifications.~~We have reclassified certain amounts reported in prior periods to conform to the current period presentation. These reclassifications had no effect on total assets, total liabilities, total capital, net income, total comprehensive income or net cash flows.

Significant Accounting Policies. Our significant accounting policies and certain other disclosures are set forth in our ~~2021~~2022 Form 10-K in Note 1 - Summary of Significant Accounting Policies. There have been no significant changes to these policies through ~~June 30, 2022.~~March 31, 2023 with the exception of the following that resulted from the adoption of ASU 2022-02, Troubled Debt Restructurings ("TDR") and Vintage Disclosures, on January 1, 2023.

Mortgage Loan Modifications. Under the new accounting guidance, we are required to evaluate whether the terms of a loan modification made for borrowers experiencing financial difficulty are such that the modified loan should be accounted for as a new loan or a continuation of an existing loan. Prior to January 1, 2023, we evaluated mortgage loan modifications resulting from borrowers experiencing financial difficulty utilizing the troubled debt restructuring ("TDR") guidance.

Allowance for Credit Losses on Mortgage Loans. Loan modifications resulting from borrowers experiencing financial difficulty are now included in the collective evaluation of credit losses based on a loan's distinct underlying characteristics. Prior to January 1, 2023, TDRs were individually evaluated for purposes of determining the allowance for credit losses.

Note 2 - Recently ~~Adopted and~~ Issued Accounting Guidance

~~Recently Issued Accounting Guidance.~~The FASB has not issued any new accounting guidance since the filing of our 2022 Form 10-K that is applicable to the Bank.

~~Fair-Value Hedging - Portfolio Layer Method (ASU 2022-01).~~On March 28, 2022, the FASB issued guidance expanding the existing last-of-layer fair-value hedging method by allowing entities to hedge multiple layers of a single closed portfolio of prepayable financial assets rather than a single (or last) layer only. To reflect the change, the last-of-layer method was renamed the portfolio layer method.

The guidance is effective for the interim and annual periods beginning on January 1, 2023, although early adoption is permitted. We are in process of evaluating the potentially favorable impact of this guidance on our future financial condition, results of operations, and cash flows.

~~Troubled Debt Restructurings and Vintage Disclosures (ASU 2022-02).~~On March 31, 2022, the FASB issued guidance eliminating the accounting guidance for TDRs by creditors that have adopted the current expected credit losses methodology while enhancing disclosure requirements for certain loan refinancings and restructurings made to borrowers experiencing financial difficulty. Additionally, the guidance requires disclosure of current-period gross write-offs by year of origination.

The guidance is effective for the interim and annual periods beginning on January 1, 2023, although early adoption is permitted. The transition method related to the recognition and measurement of TDRs can be applied using a modified retrospective transition method, while all other amendments are to be applied prospectively. We are in process of evaluating this guidance and its potential effect on our financial statement disclosures.

~~Table of Contents~~

~~Notes to Financial Statements, continued~~

~~(Unaudited, $ amounts in thousands unless otherwise indicated)~~

Note 3 - Investments

Short-term Investments. We invest in interest-bearing deposits, securities purchased under agreements to resell, and federal funds sold to provide short-term liquidity. These investments are generally transacted with counterparties that maintain a credit rating of triple-B or higher (investment grade) by an NRSRO. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021, all~~2022, none of these investments were with counterparties rated ~~single-A or above,~~below triple-B, and 4% of these investments, based on ~~the lowest long-term credit rating for each counterparty.~~amortized cost, were with counterparties that were unrated. The NRSRO ratings may differ from ~~our~~any internal ratings of the investments, if applicable.

Allowance for Credit Losses. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, based on our ~~evaluation,~~evaluations, no ~~we did not record an~~ allowance for credit losses on any of our short-term ~~investments.~~investments was deemed necessary.

Table of Contents

Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Investment Securities.

Trading Securities.

Major Security Types. The following table presents our trading securities by type of security.


Security Type	Security Type	June 30, 2022		December 31, 2021		Security Type	March 31, 2023		December 31, 2022

U.S. Treasury obligations	U.S. Treasury obligations	$	4,039,407	$	3,946,799	U.S. Treasury obligations	$	394,500	$	2,230,248

Total trading securities at estimated fair value	Total trading securities at estimated fair value	$	4,039,407	$	3,946,799	Total trading securities at estimated fair value	$	394,500	$	2,230,248

Net Gains (Losses) on Trading Securities. The following table presents net gains (losses) on trading securities, excluding any offsetting effect of gains (losses) on the associated derivatives.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Net gains (losses) on trading securities held at period end	Net gains (losses) on trading securities held at period end	$	(13,740)	$	(12,637)	$	(34,831)	$	(23,275)	Net gains (losses) on trading securities held at period end		$	2,310	$	(22,549)
Net gains (losses) on trading securities that matured/sold during the period	Net gains (losses) on trading securities that matured/sold during the period	(480)		(1,094)		(3,584)		(4,084)		Net gains (losses) on trading securities that matured/sold during the period		6,004		(1,646)
Net gains (losses) on trading securities	Net gains (losses) on trading securities	$	(14,220)	$	(13,731)	$	(38,415)	$	(27,359)	Net gains (losses) on trading securities		$	8,314	$	(24,195)

~~Table of Contents~~

~~Notes to Financial Statements, continued~~

~~(Unaudited, $ amounts in thousands unless otherwise indicated)~~

Available-for-Sale Securities.

Major Security Types. The following table presents our AFS securities by type of security.


				Gross		Gross					March 31, 2023
		Amortized		Unrealized		Unrealized		Estimated					Gross		Gross
June 30, 2022		Cost (1)		Gains		Losses		Fair Value
											Amortized		Unrealized		Unrealized		Estimated
Security Type										Security Type	Cost (1)		Gains		Losses		Fair Value
U.S. Treasury obligations	U.S. Treasury obligations	$	2,110,103	$	—	$	(4,225)	$	2,105,878	U.S. Treasury obligations	$	5,076,339	$	5,332	$	(1,495)	$	5,080,176
GSE and TVA debentures	GSE and TVA debentures	2,061,550		24,514		(1)		2,086,063		GSE and TVA debentures	1,859,469		15,655		(775)		1,874,349
GSE multifamily MBS	GSE multifamily MBS	5,992,668		35,467		(23,504)		6,004,631		GSE multifamily MBS	6,437,274		9,791		(86,424)		6,360,641
Total AFS securities	Total AFS securities	$	10,164,321	$	59,981	$	(27,730)	$	10,196,572	Total AFS securities	$	13,373,082	$	30,778	$	(88,694)	$	13,315,166

December 31, 2021
											December 31, 2022
													Gross		Gross
											Amortized		Unrealized		Unrealized		Estimated
Security Type										Security Type	Cost (1)		Gains		Losses		Fair Value
U.S. Treasury obligations										U.S. Treasury obligations	$	4,207,974	$	3,502	$	(1,802)	$	4,209,674
GSE and TVA debentures	GSE and TVA debentures	$	2,651,571	$	45,557	$	(12)	$	2,697,116	GSE and TVA debentures	1,882,802		20,144		(243)		1,902,703
GSE multifamily MBS	GSE multifamily MBS	6,356,422		109,956		(3,559)		6,462,819		GSE multifamily MBS	6,099,000		20,064		(51,604)		6,067,460
Total AFS securities	Total AFS securities	$	9,007,993	$	155,513	$	(3,571)	$	9,159,935	Total AFS securities	$	12,189,776	$	43,710	$	(53,649)	$	12,179,837

(1) Includes adjustments made to the cost basis for purchase discount or premium and related accretion or amortization, and, if applicable, fair-value hedging basis adjustments. ~~Includes at June 30, 2022~~At March 31, 2023 and December 31, ~~2021~~2022, net unamortized discounts ~~totaling $150,580~~totaled $(297,425) and ~~unamortized premiums totaling $14,344, respectively. The~~$(294,587), respectively, and the applicable ~~fair value~~fair-value hedging basis adjustments totaled net losses of $(815,691) and $(1,099,886), respectively. Excludes accrued interest receivable at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021 totaled~~ ~~losses~~ 2022 of ~~$576,995~~$54,086 and ~~gains of $206,199, respectively. Excludes accrued interest receivable at June 30, 2022 and December 31, 2021 of $35,316 and $32,127,~~$53,358, respectively.

Table of Contents

Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Unrealized Loss Positions. The following table presents our impaired AFS securities (i.e., in an unrealized loss position), aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.


		Less than 12 months				12 months or More				Total					March 31, 2023
		Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized			Less than 12 months				12 months or More				Total
June 30, 2022		Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
															Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
Security Type														Security Type	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Treasury obligations	U.S. Treasury obligations	$	2,105,878	$	(4,225)	$	—	$	—	$	2,105,878	$	(4,225)	U.S. Treasury obligations	$	1,647,496	$	(1,495)	$	—	$	—	$	1,647,496	$	(1,495)
GSE and TVA debentures	GSE and TVA debentures	15,000		(1)		—		—		15,000		(1)		GSE and TVA debentures	106,143		(775)		—		—		106,143		(775)
GSE multifamily MBS	GSE multifamily MBS	2,496,226		(21,280)		105,536		(2,224)		2,601,762		(23,504)		GSE multifamily MBS	3,733,291		(56,013)		983,968		(30,411)		4,717,259		(86,424)
Total impaired AFS securities	Total impaired AFS securities	$	4,617,104	$	(25,506)	$	105,536	$	(2,224)	$	4,722,640	$	(27,730)	Total impaired AFS securities	$	5,486,930	$	(58,283)	$	983,968	$	(30,411)	$	6,470,898	$	(88,694)

December 31, 2021
															December 31, 2022
															Less than 12 months				12 months or More				Total
															Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
Security Type														Security Type	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Treasury obligations														U.S. Treasury obligations	$	1,836,099	$	(1,802)	$	—	$	—	$	1,836,099	$	(1,802)
GSE and TVA debentures	GSE and TVA debentures	$	250,145	$	(12)	$	—	$	—	$	250,145	$	(12)	GSE and TVA debentures	75,024		(243)		—		—		75,024		(243)
GSE multifamily MBS	GSE multifamily MBS	384,015		(3,559)		—		—		384,015		(3,559)		GSE multifamily MBS	3,484,309		(41,046)		301,339		(10,558)		3,785,648		(51,604)
Total impaired AFS securities	Total impaired AFS securities	$	634,160	$	(3,571)	$	—	$	—	$	634,160	$	(3,571)	Total impaired AFS securities	$	5,395,432	$	(43,091)	$	301,339	$	(10,558)	$	5,696,771	$	(53,649)

~~Table of Contents~~

~~Notes to Financial Statements, continued~~

~~(Unaudited, $ amounts in thousands unless otherwise indicated)~~

Contractual Maturity. The amortized cost and estimated fair value of our non-MBS AFS securities are presented below by contractual maturity. MBS are not presented by contractual maturity because their actual maturities will likely differ from their contractual maturities as borrowers have the right to prepay their obligations with or without prepayment fees.


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
		Amortized		Estimated		Amortized		Estimated			Amortized		Estimated		Amortized		Estimated
Year of Contractual Maturity	Year of Contractual Maturity	Cost		Fair Value		Cost		Fair Value		Year of Contractual Maturity	Cost		Fair Value		Cost		Fair Value
Non-MBS:										Non-MBS:
Due in 1 year or less	Due in 1 year or less	$	250,957	$	251,579	$	581,801	$	582,240	Due in 1 year or less	$	82,198	$	82,252	$	131,329	$	131,517
Due after 1 through 5 years	Due after 1 through 5 years	1,566,089		1,586,412		1,494,109		1,523,600		Due after 1 through 5 years	1,597,074		1,612,179		1,575,581		1,594,583
Due after 5 through 10 years	Due after 5 through 10 years	2,354,607		2,353,950		575,661		591,276		Due after 5 through 10 years	5,256,536		5,260,094		4,383,866		4,386,277

Total non-MBS	Total non-MBS	4,171,653		4,191,941		2,651,571		2,697,116		Total non-MBS	6,935,808		6,954,525		6,090,776		6,112,377
Total MBS	Total MBS	5,992,668		6,004,631		6,356,422		6,462,819		Total MBS	6,437,274		6,360,641		6,099,000		6,067,460
Total AFS securities	Total AFS securities	$	10,164,321	$	10,196,572	$	9,007,993	$	9,159,935	Total AFS securities	$	13,373,082	$	13,315,166	$	12,189,776	$	12,179,837

Allowance for Credit Losses. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022, 100% of our AFS securities were rated single-A, or above, by an NRSRO, based on the lowest long-term credit rating for each security. ~~These~~The NRSRO ratings may differ from ~~our~~any internal ratings of the securities, if applicable.

At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, certain of our AFS securities were in an unrealized loss position; however, ~~we did not record an~~no allowance for credit losses was deemed necessary because those losses were considered temporary and ~~we expected to recover~~recovery of the entire amortized cost basis on these securities at ~~maturity.~~maturity was expected.

Table of Contents

Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Held-to-Maturity Securities.

Major Security Types. The following table presents our HTM securities by type of security.


				Gross		Gross					March 31, 2023
				Unrecognized		Unrecognized							Gross		Gross
		Amortized		Holding		Holding		Estimated					Unrecognized		Unrecognized
June 30, 2022		Cost (1)		Gains		Losses		Fair Value
											Amortized		Holding		Holding		Estimated
Security Type										Security Type	Cost (1)		Gains		Losses		Fair Value

MBS:	MBS:									MBS:
Other U.S. obligations - guaranteed single-family	Other U.S. obligations - guaranteed single-family	$	2,521,513	$	152	$	(35,792)	$	2,485,873	Other U.S. obligations - guaranteed single-family	$	3,331,837	$	3,380	$	(36,571)	$	3,298,646
GSE single-family	GSE single-family	722,385		1,697		(20,401)		703,681		GSE single-family	604,554		494		(33,786)		571,262
GSE multifamily	GSE multifamily	633,401		5		(1,018)		632,388		GSE multifamily	627,147		—		(2,708)		624,439
Total HTM securities	Total HTM securities	$	3,877,299	$	1,854	$	(57,211)	$	3,821,942	Total HTM securities	$	4,563,538	$	3,874	$	(73,065)	$	4,494,347

December 31, 2021
											December 31, 2022
													Gross		Gross
													Unrecognized		Unrecognized
											Amortized		Holding		Holding		Estimated
Security Type										Security Type	Cost (1)		Gains		Losses		Fair Value

MBS:	MBS:									MBS:
Other U.S. obligations - guaranteed single-family	Other U.S. obligations - guaranteed single-family	$	2,626,143	$	7,384	$	(9,238)	$	2,624,289	Other U.S. obligations - guaranteed single-family	$	2,991,702	$	2,128	$	(43,106)	$	2,950,724
GSE single-family	GSE single-family	815,924		14,424		(4,773)		825,575		GSE single-family	619,910		518		(39,634)		580,794
GSE multifamily	GSE multifamily	871,706		779		(192)		872,293		GSE multifamily	628,589		—		(3,889)		624,700
Total HTM securities	Total HTM securities	$	4,313,773	$	22,587	$	(14,203)	$	4,322,157	Total HTM securities	$	4,240,201	$	2,646	$	(86,629)	$	4,156,218

(1) Carrying value equals amortized cost, which includes adjustments made to the cost basis for purchase discount or premium and related accretion or amortization. Net unamortized premium at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 totaled ~~$29,144~~$25,030 and ~~$28,440,~~$26,125, respectively.

Contractual Maturity. HTM securities are not presented by contractual maturity because they consisted entirely of MBS, whose actual maturities will likely differ from their contractual maturities as borrowers have the right to prepay their obligations with or without prepayment fees.

Realized Gains and Losses. During the three months ended March 31, 2023, we sold a portion of our HTM MBS for which we had previously collected at least 85% of the principal outstanding at the time of acquisition. As such, the sales were considered maturities for purposes of security classification. Proceeds from the sales totaled $9,769, resulting in a net realized loss of $(71) determined by the specific identification method.

Allowance for Credit Losses. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022, 100% of our HTM securities were rated single-A, or above, by an NRSRO, based on the lowest long-term credit rating for each security. ~~These~~The NRSRO ratings may differ from ~~our~~any internal ratings of the securities, if applicable.

At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, based on our evaluation, ~~we did not record an~~no allowance for credit losses on any of our HTM ~~securities.~~securities was deemed necessary.

1413

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Note 4 - Advances

The following table presents our advances outstanding by redemption term.


		June 30, 2022			December 31, 2021				March 31, 2023			December 31, 2022
Redemption Term	Redemption Term	Amount		WAIR %	Amount		WAIR %	Redemption Term	Amount		WAIR %	Amount		WAIR %
Overdrawn demand and overnight deposit accounts	Overdrawn demand and overnight deposit accounts	$	98,456	3.90	$	—	—	Overdrawn demand and overnight deposit accounts	$	—	—	$	430	6.74
Due in 1 year or less	Due in 1 year or less	13,371,345		1.44	7,863,703		0.59	Due in 1 year or less	13,196,336		4.29	14,517,059		3.77
Due after 1 through 2 years	Due after 1 through 2 years	3,736,129		2.21	2,684,996		2.02	Due after 1 through 2 years	2,745,610		2.71	2,726,023		2.82
Due after 2 through 3 years	Due after 2 through 3 years	2,384,761		1.70	3,536,759		1.35	Due after 2 through 3 years	3,566,744		3.08	3,316,683		2.73
Due after 3 through 4 years	Due after 3 through 4 years	2,563,139		1.82	2,931,260		1.29	Due after 3 through 4 years	1,948,310		3.21	2,045,370		2.70
Due after 4 through 5 years	Due after 4 through 5 years	1,822,975		1.79	1,908,432		1.34	Due after 4 through 5 years	4,717,072		4.11	3,938,017		3.96
Thereafter	Thereafter	6,867,716		1.52	8,384,458		0.82	Thereafter	11,145,792		3.08	10,747,880		2.70
Total advances, par value	Total advances, par value	30,844,521		1.63	27,309,608		1.03	Total advances, par value	37,319,864		3.62	37,291,462		3.26

Fair-value hedging basis adjustments, net	Fair-value hedging basis adjustments, net	(344,955)			179,115			Fair-value hedging basis adjustments, net	(376,110)			(615,859)
Unamortized swap termination fees associated with modified advances, net of deferred prepayment fees	Unamortized swap termination fees associated with modified advances, net of deferred prepayment fees	7,896			9,112			Unamortized swap termination fees associated with modified advances, net of deferred prepayment fees	6,278			6,856
Total advances (1)	Total advances (1)	$	30,507,462		$	27,497,835		Total advances (1)	$	36,950,032		$	36,682,459

(1) Carrying value equals amortized cost, which excludes accrued interest receivable at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 of ~~$18,542~~$56,979 and ~~$13,075,~~$50,446, respectively.

The following table presents our advances outstanding by the earlier of the redemption date or the next call date and next put date.


		Earlier of Redemption or Next Call Date				Earlier of Redemption or Next Put Date					Earlier of Redemption or Next Call Date				Earlier of Redemption or Next Put Date
		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Term										Term	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Overdrawn demand and overnight deposit accounts	Overdrawn demand and overnight deposit accounts	$	98,456	$	—	$	98,456	$	—	Overdrawn demand and overnight deposit accounts	$	—	$	430	$	—	$	430
Due in 1 year or less	Due in 1 year or less	18,134,158		12,547,866		16,934,750		13,452,703		Due in 1 year or less	17,956,110		19,337,582		18,682,616		20,226,164
Due after 1 through 2 years	Due after 1 through 2 years	2,494,629		2,578,396		4,138,129		3,090,101		Due after 1 through 2 years	2,473,110		2,299,023		3,287,510		3,207,023
Due after 2 through 3 years	Due after 2 through 3 years	2,011,211		2,127,759		2,770,661		3,636,259		Due after 2 through 3 years	2,531,594		2,385,483		4,466,744		4,082,583
Due after 3 through 4 years	Due after 3 through 4 years	1,579,789		1,997,060		2,563,139		3,007,160		Due after 3 through 4 years	1,488,635		1,592,245		1,948,310		2,045,370
Due after 4 through 5 years	Due after 4 through 5 years	1,460,800		1,530,307		1,509,875		1,485,332		Due after 4 through 5 years	3,528,972		2,773,917		4,887,172		4,173,117
Thereafter	Thereafter	5,065,478		6,528,220		2,829,511		2,638,053		Thereafter	9,341,443		8,902,782		4,047,512		3,556,775
Total advances, par value	Total advances, par value	$	30,844,521	$	27,309,608	$	30,844,521	$	27,309,608	Total advances, par value	$	37,319,864	$	37,291,462	$	37,319,864	$	37,291,462

Advance Concentrations. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, our top five borrowers held ~~47%~~40% and ~~43%~~41%, respectively, of total advances outstanding at par. Our top borrower at March 31, 2023 and December 31, 2022 held 13% and 12%, respectively.

Allowance for Credit Losses. ~~Based~~At March 31, 2023 and December 31, 2022, based upon the collateral held as security, our credit extension and collateral policies, our credit analysis and the repayment history on advances, ~~we have not recorded an~~no allowance for credit losses on ~~advances.~~advances was deemed necessary.

1514

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Note 5 - Mortgage Loans Held for Portfolio

The following tables present information on our mortgage loans held for portfolio by term and type.


Term	Term	June 30, 2022		December 31, 2021		Term	March 31, 2023		December 31, 2022
Fixed-rate long-term mortgages	Fixed-rate long-term mortgages	$	6,633,317	$	6,417,543	Fixed-rate long-term mortgages	$	6,754,163	$	6,676,752
Fixed-rate medium-term (1) mortgages	Fixed-rate medium-term (1) mortgages	931,310		1,016,851		Fixed-rate medium-term (1) mortgages	826,756		856,446
Total mortgage loans held for portfolio, UPB	Total mortgage loans held for portfolio, UPB	7,564,627		7,434,394		Total mortgage loans held for portfolio, UPB	7,580,919		7,533,198
Unamortized premiums	Unamortized premiums	175,372		181,172		Unamortized premiums	167,519		168,593
Unamortized discounts	Unamortized discounts	(5,687)		(2,389)		Unamortized discounts	(10,542)		(9,466)

Hedging basis adjustments, net	Hedging basis adjustments, net	(4,470)		3,157		Hedging basis adjustments, net	(5,398)		(5,670)
Total mortgage loans held for portfolio	Total mortgage loans held for portfolio	7,729,842		7,616,334		Total mortgage loans held for portfolio	7,732,498		7,686,655
Allowance for credit losses	Allowance for credit losses	(200)		(200)		Allowance for credit losses	(200)		(200)
Total mortgage loans held for portfolio, net (2)	Total mortgage loans held for portfolio, net (2)	$	7,729,642	$	7,616,134	Total mortgage loans held for portfolio, net (2)	$	7,732,298	$	7,686,455

(1) Defined as a term of 15 years or less at origination.

(2) Excludes accrued interest receivable at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 of ~~$29,062~~$31,525 and ~~$27,977,~~$30,396, respectively.


Type	Type	June 30, 2022		December 31, 2021		Type	March 31, 2023		December 31, 2022
Conventional	Conventional	$	7,404,571	$	7,254,056	Conventional	$	7,434,313	$	7,383,168
Government-guaranteed or -insured	Government-guaranteed or -insured	160,056		180,338		Government-guaranteed or -insured	146,606		150,030
Total mortgage loans held for portfolio, UPB	Total mortgage loans held for portfolio, UPB	$	7,564,627	$	7,434,394	Total mortgage loans held for portfolio, UPB	$	7,580,919	$	7,533,198

Credit Quality Indicators for Conventional Mortgage Loans and Other Delinquency Statistics. The tables below present the key credit quality indicators and other delinquency statistics for our mortgage loans held for portfolio aggregated by (i) the most recent five origination years and (ii) all other prior origination years. Amounts are based on amortized cost, which excludes accrued interest receivable.


		Origination Year							March 31, 2023
Payment Status as of June 30, 2022		Prior to 2018		2018 to 2022		Total
									Origination Year
Payment Status								Payment Status	Prior to 2019		2019 to 2023		Total
Past due:	Past due:							Past due:
30-59 days	30-59 days	$	17,062	$	9,822	$	26,884	30-59 days	$	20,408	$	14,486	$	34,894
60-89 days	60-89 days	2,628		1,055		3,683		60-89 days	3,846		1,560		5,406
90 days or more	90 days or more	14,450		1,630		16,080		90 days or more	8,436		1,112		9,548
Total past due	Total past due	34,140		12,507		46,647		Total past due	32,690		17,158		49,848
Total current	Total current	2,613,182		4,908,165		7,521,347		Total current	2,625,560		4,908,899		7,534,459
Total conventional mortgage loans, amortized cost	Total conventional mortgage loans, amortized cost	$	2,647,322	$	4,920,672	$	7,567,994	Total conventional mortgage loans, amortized cost	$	2,658,250	$	4,926,057	$	7,584,307


		Origination Year							December 31, 2022
Payment Status as of December 31, 2021		Prior to 2017		2017 to 2021		Total
									Origination Year
Payment Status								Payment Status	Prior to 2018		2018 to 2022		Total
Past due:	Past due:							Past due:
30-59 days	30-59 days	$	16,968	$	12,662	$	29,630	30-59 days	$	17,892	$	13,041	$	30,933
60-89 days	60-89 days	4,175		1,767		5,942		60-89 days	4,537		1,992		6,529
90 days or more	90 days or more	18,599		11,206		29,805		90 days or more	9,498		2,979		12,477
Total past due	Total past due	39,742		25,635		65,377		Total past due	31,927		18,012		49,939
Total current	Total current	2,447,420		4,921,101		7,368,521		Total current	2,422,623		5,062,416		7,485,039
Total conventional mortgage loans, amortized cost	Total conventional mortgage loans, amortized cost	$	2,487,162	$	4,946,736	$	7,433,898	Total conventional mortgage loans, amortized cost	$	2,454,550	$	5,080,428	$	7,534,978

1615

Table of Contents

Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)


Other Delinquency Statistics as of June 30, 2022		Conventional			Government			Total
												March 31, 2023
Other Delinquency Statistics											Other Delinquency Statistics	Conventional			Government			Total
In process of foreclosure (1)	In process of foreclosure (1)	$	3,368		$	—		$	3,368		In process of foreclosure (1)	$	1,855		$	—		$	1,855
Serious delinquency rate (2)	Serious delinquency rate (2)	0.21		%	1.05		%	0.23		%	Serious delinquency rate (2)	0.13		%	0.92		%	0.14		%
Past due 90 days or more still accruing interest (3)	Past due 90 days or more still accruing interest (3)	$	11,298		$	1,483		$	12,781		Past due 90 days or more still accruing interest (3)	$	5,855		$	1,291		$	7,146
On non-accrual status (4)	On non-accrual status (4)	$	10,788		$	—		$	10,788		On non-accrual status (4)	$	8,730		$	—		$	8,730

Other Delinquency Statistics as of December 31, 2021
												December 31, 2022
Other Delinquency Statistics											Other Delinquency Statistics	Conventional			Government			Total
In process of foreclosure (1)	In process of foreclosure (1)	$	1,999		$	—		$	1,999		In process of foreclosure (1)	$	1,655		$	—		$	1,655
Serious delinquency rate (2)	Serious delinquency rate (2)	0.40		%	0.86		%	0.41		%	Serious delinquency rate (2)	0.16		%	1.07		%	0.18		%
Past due 90 days or more still accruing interest (3)	Past due 90 days or more still accruing interest (3)	$	15,725		$	1,364		$	17,089		Past due 90 days or more still accruing interest (3)	$	6,283		$	1,552		$	7,835
On non-accrual status (4)	On non-accrual status (4)	$	23,487		$	—		$	23,487		On non-accrual status (4)	$	10,984		$	—		$	10,984

(1) Includes loans for which the decision of foreclosure or similar alternative, such as pursuit of deed-in-lieu of foreclosure, has been reported. Loans in process of foreclosure are included in past due categories depending on their delinquency status, but are not necessarily considered to be on non-accrual status.

(2) Represents loans 90 days or more past due (including loans in process of foreclosure) expressed as a percentage of the total mortgage loans. The percentage excludes principal and interest amounts previously paid in full by the servicers on conventional loans that are pending resolution of potential loss claims. Our servicers repurchase seriously delinquent government loans, including Federal Housing Administration loans, when certain criteria are met.

(3) Although our past due scheduled/scheduled MPP loans are classified as loans past due 90 days or more based on the loan's delinquency status, we do not consider these loans to be on non-accrual status as they are well-secured and in the process of collection.

(4) As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021, $3,721 and $11,701, respectively, of UPB~~2022, of these conventional mortgage loans on non-accrual status, $2,129 and $3,160, respectively, of UPB did not have a related allowance for credit losses because these loans were either previously charged off to the expected recoverable value and/or the fair value of the underlying collateral, including any credit enhancements, exceeded the amortized cost of the loans.

Allowance for Credit Losses. The table below presents a rollforward of our allowance for credit losses.

Three Months Ended June 30, Six Months Ended June 30,
Rollforward of Allowance 2022 2021 2022 2021
Balance, beginning of period $ 200 $ 350 $ 200 $ 350
Charge-offs (1)
7 — 7 (92)
Recoveries 31 19 53 23
Provision for (reversal of) credit losses (38) (44) (60) 44
Balance, end of period $ 200 $ 325 $ 200 $ 325

~~(1)~~ ~~Includes receipts of LRA funds on certain loans that are recorded as reversals of previous charge-offs.~~


	Three Months Ended March 31,

Rollforward of Allowance		2023		2022
Balance, beginning of period		$	200	$	200
(Charge-offs), net of recoveries		(2)		22
Provision for (reversal of) credit losses		2		(22)
Balance, end of period		$	200	$	200

Note 6 - Derivatives and Hedging Activities

Managing Credit Risk on Derivatives. We are subject to credit risk due to the risk of nonperformance by the counterparties to our derivative transactions.

Uncleared Derivatives. There were no uncleared derivative instruments with credit-risk-related contingent features that were in a net liability position (before cash collateral and related accrued interest on cash collateral) at ~~June 30, 2022.~~March 31, 2023.

Cleared Derivatives. At ~~June 30, 2022,~~March 31, 2023, we were not required by our clearing agents to post any ~~margin in excess of the Clearinghouses' requirements.~~additional margin.

~~Table of Contents~~

~~Notes to Financial Statements, continued~~

~~(Unaudited, $ amounts in thousands unless otherwise indicated)~~

Financial Statement Effect and Additional Financial Information.

We record derivative instruments, related cash collateral received or pledged/posted and associated accrued interest on a net basis by clearing agent and/or by counterparty when the netting requirements have been met.

Table of Contents

Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

The following table presents the notional amount and estimated fair value of our derivative assets and liabilities.


		June 30, 2022						December 31, 2021							March 31, 2023						December 31, 2022
		Notional		Derivative		Derivative		Notional		Derivative		Derivative			Notional		Derivative		Derivative		Notional		Derivative		Derivative
		Amount		Assets		Liabilities		Amount		Assets		Liabilities			Amount		Assets		Liabilities		Amount		Assets		Liabilities
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:													Derivatives designated as hedging instruments:
Interest-rate swaps	Interest-rate swaps	$	55,010,636	$	493,855	$	1,555,740	$	46,395,451	$	105,446	$	413,324	Interest-rate swaps	$	71,220,100	$	702,118	$	1,863,911	$	66,103,220	$	919,089	$	2,178,897

Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:													Derivatives not designated as hedging instruments:
Economic hedges:	Economic hedges:													Economic hedges:
Interest-rate swaps	Interest-rate swaps	9,270,000		1,987		1,363		8,595,000		357		148		Interest-rate swaps	3,600,000		45		258		6,200,000		599		525

Interest-rate caps/floors	Interest-rate caps/floors	611,000		1,208		—		625,500		1,077		—		Interest-rate caps/floors	811,000		1,675		—		611,000		1,310		—
Interest-rate forwards	Interest-rate forwards	32,200		352		66		98,200		1		199		Interest-rate forwards	57,300		15		572		30,200		131		—
MDCs	MDCs	31,325		108		45		96,424		45		105		MDCs	57,356		290		22		30,855		50		102
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments	9,944,525		3,655		1,474		9,415,124		1,480		452		Total derivatives not designated as hedging instruments	4,525,656		2,025		852		6,872,055		2,090		627
Total derivatives before adjustments	Total derivatives before adjustments	$	64,955,161	497,510		1,557,214		$	55,810,575	106,926		413,776		Total derivatives before adjustments	$	75,745,756	704,143		1,864,763		$	72,975,275	921,179		2,179,524
Netting adjustments and cash collateral (1)	Netting adjustments and cash collateral (1)			(171,662)		(1,543,645)				113,276		(401,591)		Netting adjustments and cash collateral (1)			(214,014)		(1,846,350)				(486,758)		(2,160,315)
Total derivatives, net, at estimated fair value	Total derivatives, net, at estimated fair value			$	325,848	$	13,569			$	220,202	$	12,185	Total derivatives, net, at estimated fair value			$	490,129	$	18,413			$	434,421	$	19,209

(1) Represents the application of the netting requirements that allow us to settle (i) positive and negative positions and (ii) cash collateral and related accrued interest held or placed, with the same clearing agent and/or counterparty. Cash collateral pledged to counterparties at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, including accrued interest, totaled $~~1,511,166~~1,787,903 and ~~$515,761,~~$1,854,876, respectively. Cash collateral received from counterparties and held at ~~both June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, including accrued interest, totaled $~~139,183~~155,567 and ~~$894, respectively.~~$181,319, respectively. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, no securities were pledged as collateral.

The following table presents separately the estimated fair value of our derivative instruments meeting and not meeting netting requirements, including the effect of the related collateral.


	March 31, 2023				December 31, 2022
	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Derivative instruments meeting netting requirements:
Gross recognized amount
Uncleared	$	702,432	$	1,826,580	$	892,313	$	2,178,098
Cleared	1,406		37,589		28,685		1,324
Total gross recognized amount	703,838		1,864,169		920,998		2,179,422
Gross amounts of netting adjustments and cash collateral
Uncleared	(694,907)		(1,808,761)		(884,451)		(2,158,991)
Cleared	480,893		(37,589)		397,693		(1,324)
Total gross amounts of netting adjustments and cash collateral	(214,014)		(1,846,350)		(486,758)		(2,160,315)
Net amounts after netting adjustments and cash collateral
Uncleared	7,525		17,819		7,862		19,107
Cleared	482,299		—		426,378		—
Total net amounts after netting adjustments and cash collateral	489,824		17,819		434,240		19,107
Derivative instruments not meeting netting requirements (1)	305		594		181		102
Total derivatives, net, at estimated fair value	$	490,129	$	18,413	$	434,421	$	19,209

(1) Includes MDCs and certain interest-rate forwards.

Table of Contents

Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

The following table presents ~~separately the estimated fair value of derivative instruments meeting and not meeting netting requirements, including the effect of the related collateral.~~

June 30, 2022 December 31, 2021
Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities
Derivative instruments meeting netting requirements:
Gross recognized amount
Uncleared $ 493,033 $ 1,482,271 $ 105,667 $ 411,886
Cleared 4,017 74,832 1,213 1,586
Total gross recognized amount 497,050 1,557,103 106,880 413,472
Gross amounts of netting adjustments and cash collateral
Uncleared (408,142) (1,468,813) (105,417) (400,005)
Cleared 236,480 (74,832) 218,693 (1,586)
Total gross amounts of netting adjustments and cash collateral (171,662) (1,543,645) 113,276 (401,591)
Net amounts after netting adjustments and cash collateral
Uncleared 84,891 13,458 250 11,881
Cleared 240,497 — 219,906 —
Total net amounts after netting adjustments and cash collateral 325,388 13,458 220,156 11,881
Derivative instruments not meeting netting requirements (1)
460 111 46 304
Total derivatives, net, at estimated fair value $ 325,848 $ 13,569 $ 220,202 $ 12,185

~~(1)~~ ~~Includes MDCs and certain interest-rate forwards.~~

~~The following table presents~~ the impact of our qualifying fair-value hedging relationships on net interest income by hedged item, excluding any offsetting interest income/expense of the associated hedged items.

Three Months Ended June 30, 2022 Advances AFS Securities CO Bonds Total
Net impact of fair-value hedging relationships on net interest income:
Net interest settlements on derivatives (1)
$ (18,870) $ (11,663) $ 31,275 $ 742
Net gains (losses) on derivatives (2)
141,937 106,280 (390,352) (142,135)
Net gains (losses) on hedged items (3)
(147,671) (122,790) 387,546 117,085
Net impact on net interest income $ (24,604) $ (28,173) $ 28,469 $ (24,308)
Total interest income (expense) recorded in the Statement of Income (4)
$ 67,562 $ 38,563 $ (99,192) $ 6,933


Three Months Ended June 30, 2021
											Three Months Ended March 31, 2023
											Advances		AFS Securities		CO Bonds		Total
Net impact of fair-value hedging relationships on net interest income:	Net impact of fair-value hedging relationships on net interest income:									Net impact of fair-value hedging relationships on net interest income:
Net interest settlements on derivatives (1)	Net interest settlements on derivatives (1)	$	(46,173)	$	(28,327)	$	22,011	$	(52,489)	Net interest settlements on derivatives (1)	$	117,894	$	97,272	$	(207,053)	$	8,113

Net gains (losses) on derivatives (2)	Net gains (losses) on derivatives (2)	(12,098)		(87,731)		37,082		(62,747)		Net gains (losses) on derivatives (2)	(183,311)		(89,198)		384,376		111,867

Net gains (losses) on hedged items (3)	Net gains (losses) on hedged items (3)	10,494		81,883		(39,194)		53,183		Net gains (losses) on hedged items (3)	176,507		67,230		(384,670)		(140,933)
Net impact on net interest income	Net impact on net interest income	$	(47,777)	$	(34,175)	$	19,899	$	(62,053)	Net impact on net interest income	$	111,090	$	75,304	$	(207,347)	$	(20,953)

Total interest income (expense) recorded in the Statement of Income (4)	Total interest income (expense) recorded in the Statement of Income (4)	$	28,175	$	21,184	$	(52,674)	$	(3,315)	Total interest income (expense) recorded in the Statement of Income (4)	$	434,229	$	171,719	$	(446,674)	$	159,274

~~Table of Contents~~

~~Notes to Financial Statements, continued~~

~~(Unaudited, $ amounts in thousands unless otherwise indicated)~~

Six Months Ended June 30, 2022 Advances AFS Securities CO Bonds Total
Net impact of fair-value hedging relationships on net interest income:
Net interest settlements on derivatives (1)
$ (59,024) $ (34,128) $ 82,664 $ (10,488)
Net gains (losses) on derivatives (2)
498,571 284,010 (1,290,066) (507,485)
Net gains (losses) on hedged items (3)
(500,575) (314,279) 1,282,605 467,751
Net impact on net interest income $ (61,028) $ (64,397) $ 75,203 $ (50,222)
Total interest income (expense) recorded in the Statement of Income (4)
$ 102,603 $ 61,008 $ (150,891) $ 12,720


Six Months Ended June 30, 2021
											Three Months Ended March 31, 2022
											Advances		AFS Securities		CO Bonds		Total
Net impact of fair-value hedging relationships on net interest income:	Net impact of fair-value hedging relationships on net interest income:									Net impact of fair-value hedging relationships on net interest income:
Net interest settlements on derivatives (1)	Net interest settlements on derivatives (1)	$	(91,892)	$	(60,780)	$	34,237	$	(118,435)	Net interest settlements on derivatives (1)	$	(40,154)	$	(22,465)	$	51,389	$	(11,230)

Net gains (losses) on derivatives (2)	Net gains (losses) on derivatives (2)	234,784		234,210		(81,111)		387,883		Net gains (losses) on derivatives (2)	356,634		177,730		(899,714)		(365,350)

Net gains (losses) on hedged items (3)	Net gains (losses) on hedged items (3)	(233,031)		(234,631)		84,221		(383,441)		Net gains (losses) on hedged items (3)	(352,904)		(191,489)		895,059		350,666
Net impact on net interest income	Net impact on net interest income	$	(90,139)	$	(61,201)	$	37,347	$	(113,993)	Net impact on net interest income	$	(36,424)	$	(36,224)	$	46,734	$	(25,914)

Total interest income (expense) recorded in the Statement of Income (4)	Total interest income (expense) recorded in the Statement of Income (4)	$	64,284	$	51,020	$	(106,470)	$	8,834	Total interest income (expense) recorded in the Statement of Income (4)	$	35,041	$	22,445	$	(51,699)	$	5,787

(1) Represents interest income/expense on derivatives in qualifying fair-value hedging relationships. Net interest settlements on derivatives that are not in qualifying fair-value hedging relationships are reported in other income.

(2) Includes ~~for the three months ended June 30, 2022 and 2021,~~ increases (decreases) in estimated fair value ~~totaling $(141,004) and $(62,754), respectively,~~ and price ~~alignment interest of $(1,131) and $7, respectively.~~ alignment interest.

(3) Includes ~~for the six months ended June 30, 2022 and 2021,~~ increases (decreases) in estimated fair value ~~totaling $(506,306) and $387,834, respectively, and price alignment interest of $(1,179) and $49, respectively.~~

~~(3)~~ ~~Includes for the three months ended June 30, 2022 and 2021, increases (decreases) in estimated fair value totaling $134,151 and $57,142, respectively,~~ and amortization of net losses on ineffective and discontinued fair-value hedging relationships of $(17,066) and $(3,959), respectively. Includes for the six months ended June 30, 2022 and 2021, increases (decreases) in estimated fair value totaling $501,499 and $(374,858), respectively, and amortization of net losses on ineffective and discontinued fair-value hedging relationships of $(33,748) and $(8,583), respectively.relationships.

(4) For advances, AFS securities and CO bonds only.

The following table presents the components of our net gains (losses) on derivatives reported in other income.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
Type of Hedge	Type of Hedge	2022		2021		2022		2021		Type of Hedge		2023		2022
Net gains (losses) on derivatives not designated as hedging instruments:	Net gains (losses) on derivatives not designated as hedging instruments:									Net gains (losses) on derivatives not designated as hedging instruments:
Economic hedges:	Economic hedges:									Economic hedges:
Interest-rate swaps	Interest-rate swaps	$	16,413	$	4,083	$	38,463	$	8,194	Interest-rate swaps		$	(10,074)	$	22,050

Interest-rate caps/floors	Interest-rate caps/floors	(42)		(528)		131		(396)		Interest-rate caps/floors		(945)		173
Interest-rate forwards	Interest-rate forwards	1,768		(1,344)		7,026		2,812		Interest-rate forwards		(665)		5,258
Net interest settlements (1)	Net interest settlements (1)	881		(3,285)		(1,137)		(8,238)		Net interest settlements (1)		9,817		(2,018)
MDCs	MDCs	(1,817)		1,260		(7,286)		(3,024)		MDCs		504		(5,469)
Net gains (losses) on derivatives in other income	Net gains (losses) on derivatives in other income	$	17,203	$	186	$	37,197	$	(652)	Net gains (losses) on derivatives in other income		$	(1,363)	$	19,994

(1) Relates to derivatives that are not in qualifying fair-value hedging relationships. The interest income/expense of the associated hedged items is recorded in net interest income.

2018

Table of Contents

Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

The following table presents the amortized cost of, and the related cumulative basis adjustments on, our hedged items in qualifying fair-value hedging relationships.


June 30, 2022		Advances		AFS Securities		CO Bonds
									March 31, 2023
									Advances		AFS Securities		CO Bonds
Amortized cost of hedged items (1)	Amortized cost of hedged items (1)	$	16,303,974	$	10,164,322	$	26,730,944	Amortized cost of hedged items (1)	$	21,675,645	$	13,373,082	$	32,794,852

Cumulative basis adjustments included in amortized cost:	Cumulative basis adjustments included in amortized cost:							Cumulative basis adjustments included in amortized cost:
For active fair-value hedging relationships (2)	For active fair-value hedging relationships (2)	$	(345,091)	$	(934,237)	$	(1,530,303)	For active fair-value hedging relationships (2)	$	(376,110)	$	(1,115,657)	$	(1,733,061)
For discontinued fair-value hedging relationships	For discontinued fair-value hedging relationships	136		357,242		—		For discontinued fair-value hedging relationships	—		299,966		—
Total cumulative fair-value hedging basis adjustments on hedged items	Total cumulative fair-value hedging basis adjustments on hedged items	$	(344,955)	$	(576,995)	$	(1,530,303)	Total cumulative fair-value hedging basis adjustments on hedged items	$	(376,110)	$	(815,691)	$	(1,733,061)


December 31, 2021
									December 31, 2022
									Advances		AFS Securities		CO Bonds
Amortized cost of hedged items (1)	Amortized cost of hedged items (1)	$	17,374,515	$	9,007,993	$	20,902,714	Amortized cost of hedged items (1)	$	20,766,832	$	12,189,776	$	28,717,246

Cumulative basis adjustments included in amortized cost:	Cumulative basis adjustments included in amortized cost:							Cumulative basis adjustments included in amortized cost:
For active fair-value hedging relationships (2)	For active fair-value hedging relationships (2)	$	178,543	$	(184,724)	$	(247,699)	For active fair-value hedging relationships (2)	$	(615,898)	$	(1,417,774)	$	(2,147,802)
For discontinued fair-value hedging relationships	For discontinued fair-value hedging relationships	572		390,923		—		For discontinued fair-value hedging relationships	39		317,888		—
Total cumulative fair-value hedging basis adjustments on hedged items	Total cumulative fair-value hedging basis adjustments on hedged items	$	179,115	$	206,199	$	(247,699)	Total cumulative fair-value hedging basis adjustments on hedged items	$	(615,859)	$	(1,099,886)	$	(2,147,802)

(1) Includes the amortized cost of the hedged items in active or discontinued fair-value hedging relationships.

(2) Includes effective and ineffective fair-value hedging relationships. Excludes any offsetting effect of the net estimated fair value of the associated derivatives.

Note 7 - Consolidated Obligations

In addition to being the primary obligor for all consolidated obligations issued on our behalf, we are jointly and severally liable with each of the other FHLBanks for the payment of the principal and interest on all of the FHLBanks' consolidated obligations outstanding. The par values of the FHLBanks' consolidated obligations outstanding at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 totaled ~~$882.5 billion~~$1.5 trillion and ~~$652.9 billion,~~$1.2 trillion, respectively. As provided by the Federal Home Loan Bank Act of 1932 and Finance Agency regulations, consolidated obligations are backed only by the financial resources of all FHLBanks.

Discount Notes. The following table presents our discount notes outstanding, all of which are due within one year of issuance.


Discount Notes	Discount Notes	June 30, 2022			December 31, 2021			Discount Notes	March 31, 2023			December 31, 2022
Book value	Book value	$	19,587,260		$	12,116,358		Book value	$	23,171,249		$	27,387,492
Par value	Par value	19,617,332			12,117,846			Par value	23,281,697			27,533,665

Weighted average effective interest rate	Weighted average effective interest rate	1.17		%	0.05		%	Weighted average effective interest rate	4.71		%	4.16		%

2119

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

CO Bonds. The following table presents our CO bonds outstanding by contractual maturity.


		June 30, 2022			December 31, 2021				March 31, 2023			December 31, 2022
Year of Contractual Maturity	Year of Contractual Maturity	Amount		WAIR%	Amount		WAIR%	Year of Contractual Maturity	Amount		WAIR%	Amount		WAIR%
Due in 1 year or less	Due in 1 year or less	$	8,949,535	1.52	$	14,357,350	0.29	Due in 1 year or less	$	12,141,375	4.02	$	10,016,310	3.05
Due after 1 through 2 years	Due after 1 through 2 years	3,556,625		1.49	2,965,510		1.02	Due after 1 through 2 years	12,654,350		1.91	8,014,590		1.48
Due after 2 through 3 years	Due after 2 through 3 years	9,827,090		1.09	5,797,550		0.76	Due after 2 through 3 years	5,468,640		1.30	6,278,940		1.37
Due after 3 through 4 years	Due after 3 through 4 years	4,878,500		1.26	3,947,300		0.83	Due after 3 through 4 years	5,752,320		1.50	7,130,600		1.25
Due after 4 through 5 years	Due after 4 through 5 years	5,039,820		1.36	6,587,600		1.14	Due after 4 through 5 years	1,612,320		2.10	2,312,540		1.76
Thereafter	Thereafter	8,698,820		2.20	8,894,940		2.09	Thereafter	7,787,140		2.47	8,249,080		2.35
Total CO bonds, par value	Total CO bonds, par value	40,950,390		1.51	42,550,250		0.96	Total CO bonds, par value	45,416,145		2.45	42,002,060		1.99
Unamortized premiums	Unamortized premiums	60,418			77,035			Unamortized premiums	41,593			45,535
Unamortized discounts	Unamortized discounts	(10,819)			(11,268)			Unamortized discounts	(10,326)			(10,165)
Unamortized concessions	Unamortized concessions	(7,321)			(6,746)			Unamortized concessions	(7,366)			(7,174)
Fair-value hedging basis adjustments, net	Fair-value hedging basis adjustments, net	(1,530,303)			(247,699)			Fair-value hedging basis adjustments, net	(1,733,061)			(2,147,802)
Total CO bonds	Total CO bonds	$	39,462,365		$	42,361,572		Total CO bonds	$	43,706,985		$	39,882,454

The following tables present the par value of our CO bonds outstanding by redemption feature and the earlier of the year of contractual maturity or next call date.


Redemption Feature		June 30, 2022		December 31, 2021
Call Feature						Call Feature	March 31, 2023		December 31, 2022
Non-callable / non-putable	Non-callable / non-putable	$	11,740,890	$	20,346,750	Non-callable / non-putable	$	13,426,145	$	11,979,560
Callable	Callable	29,209,500		22,203,500		Callable	31,990,000		30,022,500
Total CO bonds, par value	Total CO bonds, par value	$	40,950,390	$	42,550,250	Total CO bonds, par value	$	45,416,145	$	42,002,060


Year of Contractual Maturity or Next Call Date	Year of Contractual Maturity or Next Call Date	June 30, 2022		December 31, 2021		Year of Contractual Maturity or Next Call Date	March 31, 2023		December 31, 2022
Due in 1 year or less	Due in 1 year or less	$	35,829,035	$	36,028,850	Due in 1 year or less	$	39,346,875	$	37,066,810
Due after 1 through 2 years	Due after 1 through 2 years	1,374,625		3,122,510		Due after 1 through 2 years	2,589,350		1,444,590
Due after 2 through 3 years	Due after 2 through 3 years	997,090		586,550		Due after 2 through 3 years	965,640		770,940
Due after 3 through 4 years	Due after 3 through 4 years	745,500		577,300		Due after 3 through 4 years	620,820		804,100
Due after 4 through 5 years	Due after 4 through 5 years	248,320		415,100		Due after 4 through 5 years	318,320		268,540
Thereafter	Thereafter	1,755,820		1,819,940		Thereafter	1,575,140		1,647,080
Total CO bonds, par value	Total CO bonds, par value	$	40,950,390	$	42,550,250	Total CO bonds, par value	$	45,416,145	$	42,002,060

The following table presents the par value of our CO bonds outstanding by interest-rate payment type.


Interest-Rate Payment Type	Interest-Rate Payment Type	June 30, 2022		December 31, 2021		Interest-Rate Payment Type	March 31, 2023		December 31, 2022
Fixed-rate	Fixed-rate	$	34,548,390	$	36,717,750	Fixed-rate	$	40,853,645	$	36,957,560
Step-up	Step-up	2,233,500		898,500		Step-up	1,668,500		2,268,500
Simple variable-rate	Simple variable-rate	4,168,500		4,934,000		Simple variable-rate	2,894,000		2,776,000

Total CO bonds, par value	Total CO bonds, par value	$	40,950,390	$	42,550,250	Total CO bonds, par value	$	45,416,145	$	42,002,060

2220

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Note 8 - Affordable Housing Program

The following table summarizes the activity in our AHP funding obligation.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
AHP Activity	AHP Activity	2022		2021		2022		2021		AHP Activity		2023		2022
Liability at beginning of period	Liability at beginning of period	$	31,937	$	35,690	$	31,049	$	34,402	Liability at beginning of period		$	38,170	$	31,049
Assessment (expense)	Assessment (expense)	3,623		2,008		6,828		5,451		Assessment (expense)		10,643		3,205

Subsidy usage, net (1)	Subsidy usage, net (1)	(6,607)		(6,933)		(8,924)		(9,088)		Subsidy usage, net (1)		(2,198)		(2,317)
Liability at end of period	Liability at end of period	$	28,953	$	30,765	$	28,953	$	30,765	Liability at end of period		$	46,615	$	31,937

(1) Subsidies disbursed are reported net of returns/recaptures of previously disbursed subsidies.

Note 9 - Capital

Classes of Capital Stock. The following table presents ~~the~~our capital stock outstanding by sub-series.


Capital Stock Outstanding		June 30, 2022		December 31, 2021
Capital Stock Sub-Series						Capital Stock Sub-Series	March 31, 2023		December 31, 2022
Class B-1	Class B-1	$	765,075	$	931,517	Class B-1	$	636,571	$	535,345
Class B-2	Class B-2	1,485,760		1,314,684		Class B-2	1,655,621		1,587,780

Total Class B	Total Class B	$	2,250,835	$	2,246,201	Total Class B	$	2,292,192	$	2,123,125

Mandatorily Redeemable Capital Stock. The following table presents the activity in our MRCS.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
MRCS Activity	MRCS Activity	2022		2021		2022		2021		MRCS Activity		2023		2022
Liability at beginning of period	Liability at beginning of period	$	45,591	$	232,695	$	50,422	$	250,768	Liability at beginning of period		$	372,503	$	50,422
Reclassification from capital stock	Reclassification from capital stock	—		281		—		281		Reclassification from capital stock		13		—

Redemptions/repurchases	Redemptions/repurchases	(8)		(83)		(4,839)		(18,156)		Redemptions/repurchases		(29)		(4,831)

Liability at end of period	Liability at end of period	$	45,583	$	232,893	$	45,583	$	232,893	Liability at end of period		$	372,487	$	45,591

The following table presents our MRCS by contractual year of redemption. The year of redemption is the later of (i) the final year of the 5-year redemption period, or (ii) the first year in which a non-member no longer has an activity-based stock requirement.


MRCS Contractual Year of Redemption	MRCS Contractual Year of Redemption	June 30, 2022		December 31, 2021		MRCS Contractual Year of Redemption	March 31, 2023		December 31, 2022
Past contractual redemption date (1)	Past contractual redemption date (1)	$	560	$	577	Past contractual redemption date (1)	$	469	$	498
Year 1 (2)	Year 1 (2)	12,298		11,835		Year 1 (2)	10,916		10,048
Year 2	Year 2	868		471		Year 2	9,004		9,872
Year 3	Year 3	12,124		9,873		Year 3	19,179		19,179
Year 4	Year 4	16,059		23,218		Year 4	3,674		3,674
Year 5	Year 5	3,674		4,448		Year 5	329,245		329,232

Total MRCS	Total MRCS	$	45,583	$	50,422	Total MRCS	$	372,487	$	372,503

(1) Balance represents Class B stock that will not be redeemed until the associated credit products and other obligations are no longer outstanding.

(2) Balance at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 includes ~~$11,835~~$9,585 of Class B stock held by one captive insurance company whose membership was terminated on February 19, ~~2021~~2021. The stock is not past its contractual redemption date, but will ~~not~~ be redeemed ~~until~~as soon as the associated credit products and other obligations are no longer outstanding.

2321

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

The following table presents the distributions related to our MRCS.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
MRCS Distributions	MRCS Distributions	2022		2021		2022		2021		MRCS Distributions		2023		2022
Recorded as interest expense	Recorded as interest expense	$	269	$	929	$	514	$	2,033	Recorded as interest expense		$	4,110	$	245
Recorded as distributions from retained earnings	Recorded as distributions from retained earnings	—		1		—		84		Recorded as distributions from retained earnings		706		—
Total	Total	$	269	$	930	$	514	$	2,117	Total		$	4,816	$	245

Capital Requirements. We are subject to 3three capital requirements under our capital plan and Finance Agency regulations as disclosed in Note 12 - Capital in our ~~2021~~2022 Form 10-K. As presented in the following table, we were in compliance with these Finance ~~Agency's~~Agency capital requirements at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022.


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Regulatory Capital Requirements	Regulatory Capital Requirements	Required		Actual		Required		Actual		Regulatory Capital Requirements	Required		Actual		Required		Actual
Risk-based capital	Risk-based capital	$	1,217,930	$	3,508,138	$	1,091,337	$	3,473,695	Risk-based capital	$	588,979	$	4,016,758	$	489,240	$	3,781,992

Total regulatory capital	Total regulatory capital	$	2,570,651	$	3,508,138	$	2,400,184	$	3,473,695	Total regulatory capital	$	2,907,585	$	4,016,758	$	2,891,351	$	3,781,992
Total regulatory capital-to-assets ratio	Total regulatory capital-to-assets ratio	4.00%		5.46%		4.00%		5.79%		Total regulatory capital-to-assets ratio	4.00%		5.53%		4.00%		5.23%

Leverage capital	Leverage capital	$	3,213,313	$	5,262,207	$	3,000,230	$	5,210,543	Leverage capital	$	3,634,482	$	6,025,137	$	3,614,189	$	5,672,988
Leverage ratio	Leverage ratio	5.00%		8.19%		5.00%		8.69%		Leverage ratio	5.00%		8.29%		5.00%		7.85%

Note 10 - Accumulated Other Comprehensive Income

The following table presents a summary of the changes in the components of our AOCI.

AOCI Rollforward Unrealized Gains (Losses) on AFS Securities Pension Benefits Total AOCI
Balance, March 31, 2022 $ 77,479 $ (18,424) $ 59,055
OCI before reclassifications:
Net change in unrealized gains (losses) (45,228) — (45,228)
Reclassifications from OCI to net income:
Pension benefits, net — 329 329
Total other comprehensive income (loss) (45,228) 329 (44,899)
Balance, June 30, 2022 $ 32,251 $ (18,095) $ 14,156
Balance, March 31, 2021 $ 210,450 $ (30,523) $ 179,927
OCI before reclassifications:
Net change in unrealized gains 4,502 — 4,502
Reclassifications from OCI to net income:
Pension benefits, net — 8,995 8,995
Total other comprehensive income 4,502 8,995 13,497
Balance, June 30, 2021 $ 214,952 $ (21,528) $ 193,424

~~Table of Contents~~

~~Notes to Financial Statements, continued~~

~~(Unaudited, $ amounts in thousands unless otherwise indicated)~~

AOCI Rollforward Unrealized Gains (Losses) on AFS Securities Pension Benefits Total AOCI
Balance, December 31, 2021 $ 151,942 $ (18,884) $ 133,058
OCI before reclassifications:
Net change in unrealized gains (losses) (119,691) — (119,691)
Reclassifications from OCI to net income:
Pension benefits, net — 789 789
Total other comprehensive income (loss) (119,691) 789 (118,902)
Balance, June 30, 2022 $ 32,251 $ (18,095) $ 14,156
Balance, December 31, 2020 $ 136,921 $ (31,519) $ 105,402
OCI before reclassifications:
Net change in unrealized gains 78,031 — 78,031
Reclassifications from OCI to net income:
Pension benefits, net — 9,991 9,991
Total other comprehensive income 78,031 9,991 88,022
Balance, June 30, 2021 $ 214,952 $ (21,528) $ 193,424



AOCI Rollforward	Unrealized Gains (Losses) on AFS Securities		Pension Benefits		Total AOCI
Balance, December 31, 2022	$	(9,939)	$	(15,852)	$	(25,791)
OCI before reclassifications:
Net change in unrealized gains (losses)	(47,977)		—		(47,977)

Reclassifications from OCI to net income:

Pension benefits, net	—		340		340
Total other comprehensive income (loss)	(47,977)		340		(47,637)
Balance, March 31, 2023	$	(57,916)	$	(15,512)	$	(73,428)

Balance, December 31, 2021	$	151,942	$	(18,884)	$	133,058
OCI before reclassifications:
Net change in unrealized gains (losses)	(74,463)		—		(74,463)

Reclassifications from OCI to net income:

Pension benefits, net	—		460		460
Total other comprehensive income (loss)	(74,463)		460		(74,003)
Balance, March 31, 2022	$	77,479	$	(18,424)	$	59,055

2522

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Note 11 - Segment Information

The following table presents our financial performance by operating segment.


		Three Months Ended June 30, 2022						Three Months Ended June 30, 2021							Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
		Traditional		Mortgage Loans		Total		Traditional		Mortgage Loans		Total			Traditional		Mortgage Loans		Total		Traditional		Mortgage Loans		Total
Net interest income	Net interest income	$	50,671	$	13,151	$	63,822	$	53,952	$	3,364	$	57,316	Net interest income	$	90,669	$	12,980	$	103,649	$	52,674	$	11,910	$	64,584
Provision for (reversal of) credit losses	Provision for (reversal of) credit losses	—		(38)		(38)		—		(44)		(44)		Provision for (reversal of) credit losses	—		2		2		—		(22)		(22)
Other income (loss)	Other income (loss)	(1,732)		34		(1,698)		(9,734)		(36)		(9,770)		Other income (loss)	30,251		(104)		30,147		(7,210)		(192)		(7,402)
Other expenses	Other expenses	22,436		3,767		26,203		24,221		4,216		28,437		Other expenses	27,417		4,053		31,470		21,766		3,628		25,394
Income (loss) before assessments		26,503		9,456		35,959		19,997		(844)		19,153
Affordable Housing Program assessments (credits)		2,677		946		3,623		2,093		(85)		2,008
Net income (loss)		$	23,826	$	8,510	$	32,336	$	17,904	$	(759)	$	17,145

		Six Months Ended June 30, 2022						Six Months Ended June 30, 2021
		Traditional		Mortgage Loans		Total		Traditional		Mortgage Loans		Total
Net interest income		$	103,361	$	25,045	$	128,406	$	128,137	$	3,700	$	131,837
Provision for (reversal of) credit losses		—		(60)		(60)		—		44		44
Other income (loss)		(8,942)		(158)		(9,100)		(22,611)		(135)		(22,746)
Other expenses		44,202		7,395		51,597		48,339		8,228		56,567
Income (loss) before assessments		50,217		17,552		67,769		57,187		(4,707)		52,480
Affordable Housing Program assessments (credits)		5,073		1,755		6,828		5,922		(471)		5,451
Net income (loss)		$	45,144	$	15,797	$	60,941	$	51,265	$	(4,236)	$	47,029
Income before assessments														Income before assessments	93,503		8,821		102,324		23,698		8,112		31,810
Affordable Housing Program assessments														Affordable Housing Program assessments	9,761		882		10,643		2,394		811		3,205
Net income														Net income	$	83,742	$	7,939	$	91,681	$	21,304	$	7,301	$	28,605

The following table presents our asset balances by operating segment.

By Date Traditional Mortgage Loans Total
June 30, 2022 $ 56,536,621 $ 7,729,642 $ 64,266,263
December 31, 2021 52,388,469 7,616,134 60,004,603


Date	Traditional		Mortgage Loans		Total
March 31, 2023	$	64,957,338	$	7,732,298	$	72,689,636
December 31, 2022	64,597,325		7,686,455		72,283,780

2623

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Note 12 - Estimated Fair Values

The following tables present the carrying value and estimated fair value of each of our financial instruments. The total of the estimated fair values does not represent an estimate of our overall market value as a going concern, which would take into account, among other considerations, future business opportunities and the net profitability of assets and liabilities.


		June 30, 2022													March 31, 2023
				Estimated Fair Value													Estimated Fair Value
		Carrying										Netting			Carrying										Netting
Financial Instruments	Financial Instruments	Value		Total		Level 1		Level 2		Level 3		Adjustments (1)		Financial Instruments	Value		Total		Level 1		Level 2		Level 3		Adjustments (1)
Assets:	Assets:													Assets:
Cash and due from banks	Cash and due from banks	$	59,596	$	59,596	$	59,596	$	—	$	—	$	—	Cash and due from banks	$	62,685	$	62,685	$	62,685	$	—	$	—	$	—
Interest-bearing deposits	Interest-bearing deposits	325,041		325,041		325,000		41		—		—		Interest-bearing deposits	580,868		580,868		580,826		42		—		—
Securities purchased under agreements to resell	Securities purchased under agreements to resell	4,500,000		4,500,000		—		4,500,000		—		—		Securities purchased under agreements to resell	5,625,000		5,625,000		—		5,625,000		—		—
Federal funds sold	Federal funds sold	2,496,000		2,496,000		—		2,496,000		—		—		Federal funds sold	2,713,000		2,713,000		—		2,713,000		—		—
Trading securities	Trading securities	4,039,407		4,039,407		—		4,039,407		—		—		Trading securities	394,500		394,500		—		394,500		—		—
AFS securities	AFS securities	10,196,572		10,196,572		—		10,196,572		—		—		AFS securities	13,315,166		13,315,166		—		13,315,166		—		—
HTM securities	HTM securities	3,877,299		3,821,942		—		3,821,942		—		—		HTM securities	4,563,538		4,494,347		—		4,494,347		—		—
Advances	Advances	30,507,462		30,354,762		—		30,354,762		—		—		Advances	36,950,032		36,734,025		—		36,734,025		—		—
Mortgage loans held for portfolio, net	Mortgage loans held for portfolio, net	7,729,642		7,213,065		—		7,199,864		13,201		—		Mortgage loans held for portfolio, net	7,732,298		7,020,316		—		7,014,330		5,986		—
Accrued interest receivable	Accrued interest receivable	96,937		96,937		—		96,937		—		—		Accrued interest receivable	155,856		155,856		—		155,856		—		—
Derivative assets, net	Derivative assets, net	325,848		325,848		—		497,510		—		(171,662)		Derivative assets, net	490,129		490,129		—		704,143		—		(214,014)
Grantor trust assets (2)	Grantor trust assets (2)	52,400		52,400		52,400		—		—		—		Grantor trust assets (2)	55,357		55,357		55,357		—		—		—

Liabilities:	Liabilities:													Liabilities:
Deposits	Deposits	907,525		907,525		—		907,525		—		—		Deposits	582,078		582,075		—		582,075		—		—
Consolidated obligations:	Consolidated obligations:													Consolidated obligations:
Discount notes	Discount notes	19,587,260		19,579,547		—		19,579,547		—		—		Discount notes	23,171,249		23,177,238		—		23,177,238		—		—
Bonds	Bonds	39,462,365		38,768,013		—		38,768,013		—		—		Bonds	43,706,985		42,703,533		—		42,703,533		—		—
Loans from other FHLBanks														Loans from other FHLBanks	500,000		500,000		—		500,000		—		—
Accrued interest payable	Accrued interest payable	124,999		124,999		—		124,999		—		—		Accrued interest payable	217,382		217,382		—		217,382		—		—
Derivative liabilities, net	Derivative liabilities, net	13,569		13,569		—		1,557,214		—		(1,543,645)		Derivative liabilities, net	18,413		18,413		—		1,864,763		—		(1,846,350)
MRCS	MRCS	45,583		45,583		45,583		—		—		—		MRCS	372,487		372,487		372,487		—		—		—

2724

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)


		December 31, 2021													December 31, 2022
				Estimated Fair Value													Estimated Fair Value
		Carrying										Netting			Carrying										Netting
Financial Instruments	Financial Instruments	Value		Total		Level 1		Level 2		Level 3		Adjustments (1)		Financial Instruments	Value		Total		Level 1		Level 2		Level 3		Adjustments (1)
Assets:	Assets:													Assets:
Cash and due from banks	Cash and due from banks	$	867,880	$	867,880	$	867,880	$	—	$	—	$	—	Cash and due from banks	$	21,161	$	21,161	$	21,161	$	—	$	—	$	—
Interest-bearing deposits	Interest-bearing deposits	100,041		100,041		100,000		41		—		—		Interest-bearing deposits	856,060		856,060		856,019		41		—		—
Securities purchased under agreements to resell	Securities purchased under agreements to resell	3,500,000		3,500,000		—		3,500,000		—		—		Securities purchased under agreements to resell	4,550,000		4,550,000		—		4,550,000		—		—
Federal funds sold	Federal funds sold	2,580,000		2,580,000		—		2,580,000		—		—		Federal funds sold	3,148,000		3,148,000		—		3,148,000		—		—
Trading securities	Trading securities	3,946,799		3,946,799		—		3,946,799		—		—		Trading securities	2,230,248		2,230,248		—		2,230,248		—		—
AFS securities	AFS securities	9,159,935		9,159,935		—		9,159,935		—		—		AFS securities	12,179,837		12,179,837		—		12,179,837		—		—
HTM securities	HTM securities	4,313,773		4,322,157		—		4,322,157		—		—		HTM securities	4,240,201		4,156,218		—		4,156,218		—		—
Advances	Advances	27,497,835		27,462,295		—		27,462,295		—		—		Advances	36,682,459		36,468,949		—		36,468,949		—		—
Mortgage loans held for portfolio, net	Mortgage loans held for portfolio, net	7,616,134		7,810,378		—		7,787,334		23,044		—		Mortgage loans held for portfolio, net	7,686,455		6,867,904		—		6,859,956		7,948		—
Accrued interest receivable	Accrued interest receivable	80,758		80,758		—		80,758		—		—		Accrued interest receivable	152,867		152,867		—		152,867		—		—
Derivative assets, net	Derivative assets, net	220,202		220,202		—		106,926		—		113,276		Derivative assets, net	434,421		434,421		—		921,179		—		(486,758)
Grantor trust assets (2)	Grantor trust assets (2)	62,640		62,640		62,640		—		—		—		Grantor trust assets (2)	53,166		53,166		53,166		—		—		—

Liabilities:	Liabilities:													Liabilities:
Deposits	Deposits	1,366,397		1,366,397		—		1,366,397		—		—		Deposits	595,907		595,907		—		595,907		—		—
Consolidated obligations:	Consolidated obligations:													Consolidated obligations:
Discount notes	Discount notes	12,116,358		12,115,318		—		12,115,318		—		—		Discount notes	27,387,492		27,387,547		—		27,387,547		—		—
Bonds	Bonds	42,361,572		42,643,536		—		42,643,536		—		—		Bonds	39,882,454		38,690,400		—		38,690,400		—		—
Accrued interest payable	Accrued interest payable	88,068		88,068		—		88,068		—		—		Accrued interest payable	162,584		162,584		—		162,584		—		—
Derivative liabilities, net	Derivative liabilities, net	12,185		12,185		—		413,776		—		(401,591)		Derivative liabilities, net	19,209		19,209		—		2,179,524		—		(2,160,315)
MRCS	MRCS	50,422		50,422		50,422		—		—		—		MRCS	372,503		372,503		372,503		—		—		—

(2) Included in other assets on the statement of condition.

Summary of Valuation Techniques and Significant Inputs. A description of the valuation techniques, significant inputs, and levels of fair value hierarchy is disclosed in Note 16 - Estimated Fair Values in our ~~2021~~2022 Form 10-K. No significant changes have been made in the current year.

2825

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

Estimated Fair Value Measurements. The following tables present, by level within the fair value hierarchy, the estimated fair value of our financial assets and liabilities that are recorded at estimated fair value on a recurring or non-recurring basis on our statement of condition.


										Netting			March 31, 2023
June 30, 2022		Total		Level 1		Level 2		Level 3		Adjustments (1)
																					Netting
Financial Instruments												Financial Instruments	Total		Level 1		Level 2		Level 3		Adjustments (1)
Trading securities:	Trading securities:											Trading securities:
U.S. Treasury obligations	U.S. Treasury obligations	$	4,039,407	$	—	$	4,039,407	$	—	$	—	U.S. Treasury obligations	$	394,500	$	—	$	394,500	$	—	$	—
Total trading securities	Total trading securities	4,039,407		—		4,039,407		—		—		Total trading securities	394,500		—		394,500		—		—
AFS securities:	AFS securities:											AFS securities:
U.S. Treasury obligations	U.S. Treasury obligations	2,105,878		—		2,105,878		—		—		U.S. Treasury obligations	5,080,176		—		5,080,176		—		—
GSE and TVA debentures	GSE and TVA debentures	2,086,063		—		2,086,063		—		—		GSE and TVA debentures	1,874,349		—		1,874,349		—		—
GSE multifamily MBS	GSE multifamily MBS	6,004,631		—		6,004,631		—		—		GSE multifamily MBS	6,360,641		—		6,360,641		—		—
Total AFS securities	Total AFS securities	10,196,572		—		10,196,572		—		—		Total AFS securities	13,315,166		—		13,315,166		—		—
Derivative assets:	Derivative assets:											Derivative assets:
Interest-rate related	Interest-rate related	325,740		—		497,402		—		(171,662)		Interest-rate related	489,839		—		703,853		—		(214,014)
MDCs	MDCs	108		—		108		—		—		MDCs	290		—		290		—		—
Total derivative assets, net	Total derivative assets, net	325,848		—		497,510		—		(171,662)		Total derivative assets, net	490,129		—		704,143		—		(214,014)
Other assets:	Other assets:											Other assets:
Grantor trust assets	Grantor trust assets	52,400		52,400		—		—		—		Grantor trust assets	55,357		55,357		—		—		—
Total assets at recurring estimated fair value	Total assets at recurring estimated fair value	$	14,614,227	$	52,400	$	14,733,489	$	—	$	(171,662)	Total assets at recurring estimated fair value	$	14,255,152	$	55,357	$	14,413,809	$	—	$	(214,014)

Derivative liabilities:	Derivative liabilities:											Derivative liabilities:
Interest-rate related	Interest-rate related	$	13,524	$	—	$	1,557,169	$	—	$	(1,543,645)	Interest-rate related	$	18,391	$	—	$	1,864,741	$	—	$	(1,846,350)
MDCs	MDCs	45		—		45		—		—		MDCs	22		—		22		—		—
Total derivative liabilities, net	Total derivative liabilities, net	13,569		—		1,557,214		—		(1,543,645)		Total derivative liabilities, net	18,413		—		1,864,763		—		(1,846,350)
Total liabilities at recurring estimated fair value	Total liabilities at recurring estimated fair value	$	13,569	$	—	$	1,557,214	$	—	$	(1,543,645)	Total liabilities at recurring estimated fair value	$	18,413	$	—	$	1,864,763	$	—	$	(1,846,350)

Mortgage loans held for portfolio (2)		$	970	$	—	$	—	$	970	$	—
Total assets at non-recurring estimated fair value		$	970	$	—	$	—	$	970	$	—

2926

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)


										Netting			December 31, 2022
December 31, 2021		Total		Level 1		Level 2		Level 3		Adjustments (1)
																					Netting
Financial Instruments												Financial Instruments	Total		Level 1		Level 2		Level 3		Adjustments (1)
Trading securities:	Trading securities:											Trading securities:
U.S. Treasury obligations	U.S. Treasury obligations	$	3,946,799	$	—	$	3,946,799	$	—	$	—	U.S. Treasury obligations	$	2,230,248	$	—	$	2,230,248	$	—	$	—
Total trading securities	Total trading securities	3,946,799		—		3,946,799		—		—		Total trading securities	2,230,248		—		2,230,248		—		—
AFS securities:	AFS securities:											AFS securities:

U.S. Treasury obligations												U.S. Treasury obligations	4,209,674		—		4,209,674		—		—
GSE and TVA debentures	GSE and TVA debentures	2,697,116		—		2,697,116		—		—		GSE and TVA debentures	1,902,703		—		1,902,703		—		—
GSE MBS	GSE MBS	6,462,819		—		6,462,819		—		—		GSE MBS	6,067,460		—		6,067,460		—		—
Total AFS securities	Total AFS securities	9,159,935		—		9,159,935		—		—		Total AFS securities	12,179,837		—		12,179,837		—		—
Derivative assets:	Derivative assets:											Derivative assets:
Interest-rate related	Interest-rate related	220,157		—		106,881		—		113,276		Interest-rate related	434,371		—		921,129		—		(486,758)
MDCs	MDCs	45		—		45		—		—		MDCs	50		—		50		—		—
Total derivative assets, net	Total derivative assets, net	220,202		—		106,926		—		113,276		Total derivative assets, net	434,421		—		921,179		—		(486,758)
Other assets:	Other assets:											Other assets:
Grantor trust assets	Grantor trust assets	62,640		62,640		—		—		—		Grantor trust assets	53,166		53,166		—		—		—
Total assets at recurring estimated fair value	Total assets at recurring estimated fair value	$	13,389,576	$	62,640	$	13,213,660	$	—	$	113,276	Total assets at recurring estimated fair value	$	14,897,672	$	53,166	$	15,331,264	$	—	$	(486,758)

Derivative liabilities:	Derivative liabilities:											Derivative liabilities:
Interest-rate related	Interest-rate related	$	12,080	$	—	$	413,671	$	—	$	(401,591)	Interest-rate related	$	19,107	$	—	$	2,179,422	$	—	$	(2,160,315)
MDCs	MDCs	105		—		105		—		—		MDCs	102		—		102		—		—
Total derivative liabilities, net	Total derivative liabilities, net	12,185		—		413,776		—		(401,591)		Total derivative liabilities, net	19,209		—		2,179,524		—		(2,160,315)
Total liabilities at recurring estimated fair value	Total liabilities at recurring estimated fair value	$	12,185	$	—	$	413,776	$	—	$	(401,591)	Total liabilities at recurring estimated fair value	$	19,209	$	—	$	2,179,524	$	—	$	(2,160,315)

Mortgage loans held for portfolio (2)		$	1,141	$	—	$	—	$	1,141	$	—
Total assets at non-recurring estimated fair value		$	1,141	$	—	$	—	$	1,141	$	—

~~(2)~~ ~~Amounts are as of the date the most recent fair-value adjustment was recorded.~~

Note 13 - Commitments and Contingencies

The following table presents our off-balance-sheet commitments at their notional amounts.


		June 30, 2022							March 31, 2023
Type of Commitment	Type of Commitment	Expire within one year		Expire after one year		Total		Type of Commitment	Expire within one year		Expire after one year		Total
Standby letters of credit outstanding	Standby letters of credit outstanding	$	48,363	$	616,213	$	664,576	Standby letters of credit outstanding	$	63,768	$	346,670	$	410,438
Unused lines of credit (1)	Unused lines of credit (1)	906,668		—		906,668		Unused lines of credit (1)	1,063,716		—		1,063,716
Commitments to fund additional advances (2)	Commitments to fund additional advances (2)	68,000		—		68,000		Commitments to fund additional advances (2)	295,263		4,087		299,350
Commitments to fund or purchase mortgage loans, net (3)	Commitments to fund or purchase mortgage loans, net (3)	31,325		—		31,325		Commitments to fund or purchase mortgage loans, net (3)	57,356		—		57,356
Unsettled CO bonds, at par		43,800		—		43,800

Unsettled discount notes, at par	Unsettled discount notes, at par	424,000		—		424,000		Unsettled discount notes, at par	872		—		872

(1) Maximum line of credit amount per member is $100,000.

(2) Generally for periods up to six months.

(3) Generally for periods up to 91 days.

Pledged Collateral.At March 31, 2023 and December 31, 2022, we had pledged cash collateral of $1,782,502 and $1,849,797, respectively, to counterparties and clearing agents. At March 31, 2023 and December 31, 2022, we had not pledged any securities as collateral.

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Notes to Financial Statements, continued

(Unaudited, $ amounts in thousands unless otherwise indicated)

~~Pledged Collateral.At June 30, 2022 and December 31, 2021, we had pledged cash collateral of $1,509,963 and $515,740, respectively, to counterparties and clearing agents. At June 30, 2022 and December 31, 2021, we had not pledged any securities as collateral.~~

Legal Proceedings. We are subject to legal proceedings arising in the normal course of business. We record an accrual for a loss contingency when it is probable that a loss for which we could be liable has been incurred and the amount can be reasonably estimated. After consultation with legal counsel, management is not aware of any such proceedings where the ultimate liability, if any, could have a material effect on our financial condition, results of operations or cash flows.

Additional discussion of other commitments and contingencies is provided in Note 4 - Advances; Note 5 - Mortgage Loans Held for Portfolio; Note 6 - Derivatives and Hedging Activities; Note 7 - Consolidated Obligations; Note 9 - Capital; and Note 12 - Estimated Fair Values.

Note 14 - Related Party and Other Transactions

Transactions with Directors Financial Institutions. The following table presents our transactions with directors' financial institutions, taking into account the beginning and ending dates of the directors' terms, merger activity and other changes in the composition of directors' financial institutions.


Transactions with Directors' Financial Institutions	Transactions with Directors' Financial Institutions	Three Months Ended June 30,				Six Months Ended June 30,				Transactions with Directors' Financial Institutions	Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Net capital stock issuances (redemptions and repurchases)	Net capital stock issuances (redemptions and repurchases)	$	3,437	$	—	$	(46,983)	$	—	Net capital stock issuances (redemptions and repurchases)		$	2,403	$	(50,420)
Net advances (repayments)	Net advances (repayments)	3,034,988		(993,987)		1,234,703		(2,043,264)		Net advances (repayments)		(51,294)		(1,800,285)
Mortgage loan purchases	Mortgage loan purchases	4,025		16,745		12,747		29,622		Mortgage loan purchases		3,123		8,722

The following table presents the aggregate balances of capital stock and advances outstanding for our directors' financial institutions and their balances as a percent of the total balances on our statement of condition.


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Balances with Directors' Financial Institutions	Balances with Directors' Financial Institutions	Par value		% of Total		Par value		% of Total		Balances with Directors' Financial Institutions	Par Value		% of Total		Par Value		% of Total
Capital stock	Capital stock	$	381,061	17	%	$	440,949	19	%	Capital stock	$	53,919	2	%	$	49,869	2	%
Advances	Advances	4,695,040		16	%	3,854,856		14	%	Advances	809,184		2	%	886,191		2	%

The composition of our directors' financial institutions changed ~~effective~~on January 1, ~~2022,~~2023, due to changes in board membership resulting from the ~~2021~~2022 director election.

Transactions with Other FHLBanks. Occasionally, we loan or borrow short-term funds to/from other ~~FHLBanks.~~ ~~There~~ FHLBanks in order to manage FHLB System-wide liquidity. These loans and borrowings are transacted at current market rates when traded. However, no loans were ~~0 loans~~made to ~~or borrowings from other~~any FHL~~Banks that remained~~Bank during the three months ended March 31, 2023 and none were outstanding at ~~June 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022. On March 31, 2023, the Bank borrowed $500,000 from another FHLBank and repaid it on the next business day. No borrowings from any FHLBank were outstanding at December 31, 2022.

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DEFINED TERMS

~~2005 SERP:~~ ~~Federal Home Loan Bank of Indianapolis 2005 Supplemental Executive Retirement Plan, as amended and restated~~

advance: Secured loan to ~~members,~~member, former ~~members~~member or Housing ~~Associates~~Associate

AFS: Available-for-Sale

Agency: GSE and Ginnie Mae

AHP: Affordable Housing Program

~~AMA:~~ ~~Acquired Member Assets~~

AOCI: Accumulated Other Comprehensive Income (Loss)

~~Bank Act:~~ ~~Federal Home Loan Bank Act of 1932, as amended~~

bps: basis points

CDFI: Community Development Financial Institution

~~CFI:~~ Community Financial Institution, an FDIC-insured depository institution with average total assets below an annually- adjusted limit established by the Finance Agency Director based on the Consumer Price Index

~~CFPB:~~ ~~Bureau of Consumer Financial Protection~~

~~CFTC:~~ ~~United States Commodity Futures Trading Commission~~

Clearinghouse: A United States Commodity Futures Trading Commission-registered derivatives clearing organization

~~CME:~~ ~~CME Clearing~~

~~CMO:~~ ~~Collateralized Mortgage Obligation~~

CO bond: Consolidated Obligation bond

~~COVID-19:~~ ~~Coronavirus Disease 2019 and its variants~~

~~DB Plan:~~ ~~Pentegra Defined Benefit Pension Plan for Financial Institutions, as amended~~

~~DC Plan:~~Collectively, the Pentegra Defined Contribution Retirement Savings Plan for Financial Institutions, as amended, in effect through October 1, 2020 and the Federal Home Loan Bank of Indianapolis Retirement Savings Plan, commencing October 2, 2020

~~DDCP:~~ ~~Directors' Deferred Compensation Plan~~

EFFR: Effective Federal Funds Rate

Exchange Act: Securities Exchange Act of 1934, as amended

~~Fannie Mae:~~ ~~Federal National Mortgage Association~~

FASB: Financial Accounting Standards Board

~~FCA:~~ ~~United Kingdom Financial Conduct Authority~~

~~FDIC:~~ ~~Federal Deposit Insurance Corporation~~

~~FHA:~~ ~~Federal Housing Administration~~

FHLBank: A Federal Home Loan Bank

FHLBanks: The 11 Federal Home Loan Banks or a subset thereof

FHLBank System: The 11 Federal Home Loan Banks and the Office of Finance

~~FICO®:~~ ~~Fair Isaac Corporation, the creators of the FICO credit score~~

~~Final Membership Rule:~~ ~~Final Rule on FHLBank Membership issued by the Finance Agency effective February 19, 2016~~

Finance Agency: Federal Housing Finance Agency

~~FINRA:~~ ~~Financial Industry Regulatory Authority~~

~~FLA:~~ ~~First Loss Account~~

FOMC: Federal Open Market Committee

Form 8-K: Current Report on Form 8-K as filed with the SEC under the Exchange Act

Form 10-K: Annual Report on Form 10-K as filed with the SEC under the Exchange Act

Form 10-Q: Quarterly Report on Form 10-Q as filed with the SEC under the Exchange Act

Freddie Mac: Federal Home Loan Mortgage Corporation

~~Frozen SERP:~~ ~~Federal Home Loan Bank of Indianapolis Supplemental Executive Retirement Plan, frozen effective December 31, 2004~~

GAAP: Generally Accepted Accounting Principles in the United States of America

Ginnie Mae: Government National Mortgage Association

~~GLB Act:~~ ~~Gramm-Leach-Bliley Act of 1999, as amended~~

GSE: United States Government-Sponsored Enterprise

Housing Associate: Approved lender under Title II of the National Housing Act of 1934 that is either a government agency or is chartered under federal or state law with rights and powers similar to those of a corporation

HTM: Held-to-Maturity

~~JCE Agreement:~~ ~~Joint Capital Enhancement Agreement, as amended, among the 11 FHLBanks~~

~~LCH:~~ ~~LCH.Clearnet LLC~~

LIBOR: London Interbank Offered Rate

~~Table of Contents~~

LRA: Lender Risk Account

~~LTV:~~ ~~Loan-to-Value~~

MBS: Mortgage-Backed Securities

~~MCC:~~ ~~Master Commitment Contract~~

MDC: Mandatory Delivery Commitment

Moody's: Moody's Investor Services

~~MPF:~~ ~~Mortgage Partnership Finance®~~

MPP: Mortgage Purchase Program, including Original and Advantage unless indicated otherwise

MRCS: Mandatorily Redeemable Capital Stock

MVE: Market Value of Equity

NRSRO: Nationally Recognized Statistical Rating Organization

~~OCC:~~ ~~Office of the Comptroller of the Currency~~

OCI: Other Comprehensive Income (Loss)

~~OIS:~~ ~~Overnight-Indexed Swap~~

~~ORERC:~~ ~~Other Real Estate-Related Collateral~~

~~OTTI:~~ ~~Other-Than-Temporary Impairment or -Temporarily Impaired (as the context indicates)~~

~~PFI:~~ ~~Participating Financial Institution~~

~~PMI:~~ ~~Primary Mortgage Insurance~~

~~REO:~~ ~~Real Estate Owned~~

~~RMBS:~~ ~~Residential Mortgage-Backed Securities~~

S&P: Standard & Poor's Rating Service

~~SBA:~~ ~~Small Business Administration~~

SEC: Securities and Exchange Commission

Securities Act: Securities Act of 1933, as amended

SERP: Collectively, the 2005 ~~SERP and the Frozen SERP~~

~~SETP:~~ ~~Federal Home Loan Bank~~FHLBank of Indianapolis ~~2016~~ Supplemental Executive ~~Thrift~~Retirement Plan, as amended, and ~~restated~~

~~SMI:~~the FHLBank of Indianapolis Supplemental ~~Mortgage Insurance~~Executive Retirement Plan, frozen effective December 31, 2004

SOFR: Secured Overnight Financing Rate

TBA: To Be Announced, a forward contract for the purchase or sale of MBS at a future agreed-upon date for an established price

~~TDR:~~ ~~Troubled Debt Restructuring~~

TVA: Tennessee Valley Authority

UPB: Unpaid Principal Balance

~~VaR:~~ ~~Value at Risk~~

WAIR: Weighted-Average Interest Rate

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Presentation

This discussion and analysis by management of the Bank's financial condition and results of operations should be read in conjunction with our ~~2021~~2022 Form 10-K and the interim Financial Statements and related Notes to Financial Statements contained in Item 1. Financial Statements.

Unless otherwise stated, amounts disclosed in this Item are rounded to the nearest million; therefore, dollar amounts of less than one million may not be reflected or, due to rounding, may not appear to agree to the amounts presented in thousands in the Financial Statements and related Notes to Financial Statements. Amounts used to calculate dollar and percentage changes are based on numbers in the thousands. Accordingly, calculations based upon the disclosed amounts (millions) may not produce the same results.

Executive Summary

Overview. As an FHLBank, we are a regional wholesale bank that serves as a financial intermediary between the capital markets and our members. The Bank is structured as a financial ~~cooperative.~~cooperative, which allows our business to be scalable and self-capitalizing without taking undue risks, diminishing capital adequacy or jeopardizing profitability. Therefore, itthe Bank is generally designed to expand and contract in asset size as the needs of our members and their communities change.

We primarily make secured loans in the form of advances to our members and purchase whole mortgage loans from our members. Additionally, we purchase other investments and provide other financial services to our members.

Our principal source of funding is the proceeds from the sale to the public of FHLBank debt instruments, called consolidated obligations, which are the joint and several obligation of all FHLBanks. We obtain additional funds from deposits, other borrowings, and by issuing capital stock to our members.

Our primary source of revenue is interest earned on advances, mortgage loans, and investments, including MBS.

Our net interest income is primarily determined by the size of our balance sheet and the spread between the interest rate earned on our assets and the interest rate paid on our share of the consolidated obligations. A substantial portion of net interest income may also be derived from deploying our capital which has no associated interest cost, i.e., interest-free capital. We use funding and hedging strategies to manage the related interest-rate risk.

Due to our cooperative ownership structure and wholesale nature, we typically earn a narrow interest spread. Accordingly, our net income is relatively low compared to our total assets and capital.

In addition, as a cooperative, some members utilize our products more heavily and own more capital stock than others. As a result, we must achieve a balance in generating membership value from rates we charge on advances or prices we pay to purchase mortgage loans and paying a competitive dividend rate.

We group our products and services within two operating segments: traditional and mortgage loans.

Business Environment. The Bank’s financial performance is influenced by several key national economic and market factors, including fiscal and monetary policies, the ~~strength of~~conditions in the housing markets and the level and volatility of market interest rates.

Economy and Financial Markets. U.S. real gross domestic product ("GDP") decreased at an annual inflation and seasonally-adjusted rate of 0.9% in the second quarter of 2022, according to the advance estimate reported by the Bureau of Economic Analysis (BEA), following an annualized decrease of 1.6%economic growth slipped in the first quarter of ~~2022, as revised by the BEA. The first quarter GDP was the weakest since the spring of 2020, when the COVID-19 pandemic~~2023 amid still-high inflation and ~~related shutdowns drove the U.S. economy into a deep-albeit short-recession. In the second quarter, the housing market rapidly cooled under~~ rising interest rates, ~~and high inflation took steam out of business and consumer spending. The two straight quarters of declining economic output met~~adding to worries about a ~~commonly used definition of a recession.~~possible recession later this year.

First quarter U.S. real gross domestic product, according to the U.S. Commerce Department, rose at a seasonally adjusted annual rate of 1.1%, a significant slowdown from the fourth quarter 2022 annual rate of 2.6%. Businesses pulled back sharply, drawing down inventories, cutting equipment purchases and reducing housing investment. Consumer spending was a bright spot as a solid labor market continued to drive overall consumer spending. Consumers propped up growth with a surge of buying, fueled by an ability to spend from higher incomes and built up savings. However, ~~the~~consumer spending and hiring have more recently slowed along with other signs of a cooling economy. Retail sales, a partial picture of consumer spending, home sales and manufacturing output all fell in March.

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The labor market remained ~~very~~relatively tight with historically low jobless claims and unemployment continuing at 3.5% in March 2023. Improving supply chains and reduced demand have relieved price pressures on goods, but services prices continued to climb in part because of wage gains. Federal Reserve officials are concerned that tight U.S. labor markets could sustain higher prices.

Inflation remained high. The personal-consumption expenditures price index, the Federal Reserve's preferred inflation gauge, increased in the first quarter at an annual rate of 4.2%, according to the Commerce Department, up from an increase in the fourth quarter of 3.9% and well above their 2% target. The measure of core prices, which excludes food and energy, rose at an annual rate of 4.6% in March compared to a ~~key source~~year earlier. Many economists see this core measure as a better measure of future inflation.

Many economists expect the economy to slow even more as the year progresses, predicting a recession in the second half of the year as the Federal Reserve's campaign to cool the economy and lower inflation will trigger spending cutbacks and job losses.

Analysts are watching to see whether recent banking stress following the failures of midsize banks leads to tighter lending conditions for businesses and households that weigh on the economy.

Adding to the economic ~~strength. Hiring gains in June held near~~uncertainty was a recent warning by the previous three months. Jobless claims - a proxy for layoffs - ticked up in recent months but remained near historic lows as employers clung to employees amid a shortage of available workers. In July 2022, the Bureau of Labor Statistics reportedU.S. Treasury Secretary that the U.S. ~~unemployment rate remained at 3.6%~~government could run out of funding to pay its bills by the beginning of June if Congress fails to raise the debt limit. By waiting until the last minute, she stated, Congress could risk "serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers and negatively impact the credit rating" of the U.S.

Conditions in ~~June~~U.S. Housing Markets. After slipping in 2022 ~~down~~to cap their worst year since 2014, home sales across the U.S., according to the National Association of Realtors ("NAR"), fell in March 2023 by 2.4%, a sluggish start to the crucial spring selling season as higher mortgage rates squashed momentum from ~~3.9% in December 2021, but still just slightly above~~ the ~~half-century low reached before the pandemic hit in early 2020. High inflation, though, cut into households' purchasing power. Consumer prices rose 9.1% in June~~previous month. March sales fell 22% from a year earlier, ~~a four-decade high,~~primarily driven by higher home prices and higher mortgage interest rates.

Existing-home sales fell for the 12th straight month in January 2023, the slowest sales pace since November 2010, as the once-booming housing market has become a ~~big jump~~bigger drag on the U.S. economy. Surprisingly, existing-home sales surged in ~~gasoline~~February, but after mortgage rates ticked higher, March sales resumed its extended period of declines.

The housing market's slowdown has started to weigh on price growth, which has fallen on an annual basis for two consecutive months for the first time in 11 years. Despite the sharp decline in sales, home prices ~~while~~had risen in 2022 on a year-over-year basis, in part because supply remained tight. But price growth has slowed. According to the NAR, the median sales price of an existing home was down in March by 1.4% from a year earlier.

The Federal Reserve's rate increases ~~in shelter~~have fueled higher mortgage rates. In mid-April the average rate on a 30-year fixed-rate mortgage, according to Freddie Mac, was 6.49%, up from 5.11% a year earlier.

With sustained price appreciation and ~~food prices were also major contributors.~~higher mortgage rates, affordability continues to be a challenge for potential home buyers.

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~~Conditions in U.S. Housing Markets.Conditions in the U.S. housing markets primarily affect the Bank through the creation of demand for, and yield on, advances and mortgage loans, as well as the yield on investments in MBS.~~

In the second quarter 2022, the housing market rapidly cooled as record prices and higher mortgage rates weighed on home sales. Existing-home sales decreased in June 2022, marking five consecutive months of declines, according to the National Association of Realtors. Year-over-year sales in June fell 14.2%. The median sales price of an existing home climbed in June by 13.4% from a year earlier, reaching the highest level since related records began in 1999. Home prices consistently moved upward as supply remained tight. Total housing inventory at the end of June was enough to cover three months of sales, the highest in nearly two years but still historically low. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.52% in June 2022, compared to 2.98% in June 2021. With sustained price appreciation and higher mortgage rates, affordability continued to be a challenge for potential home buyers. Residential construction in the U.S. slowed, as housing starts fell in June for the second straight month and the number of building permits issued declined.

Interest Rate Levels and Volatility. ~~At its meetings on May 4, 2022 and June 15, 2022, the FOMC noted that inflation remained elevated, reflecting supply and demand imbalances related~~The Federal Reserve seeks to ~~the pandemic, higher energy prices, and broader price pressures. To~~ achieve ~~its goals of~~ maximum employment and inflation at the rate of 2% over the longer ~~run,~~run. In support of these goals, at its meeting in February 2023, the FOMC ~~decided to raise~~raised the target range for the federal funds rate by another 25 bps to 4.50% to 4.75% and, at its meeting in March ~~2022~~2023, it raised the target range by another 25 bps to ~~0.75%~~4.75 to ~~1.0% and in June to 1.50% to 1.75%. In addition, the FOMC began reducing its holdings of Treasury securities and Agency debt and Agency MBS on June 1, 2022.~~5.00%

The following table presents certain key interest rates.


		Average for Three Months Ended				Six-Month Average				Period End					Average for Three Months Ended				Period End
		June 30,				June 30,				June 30,		December 31,			March 31,				March 31,	December 31,
		2022		2021		2022		2021		2022		2021			2023		2022			2023		2022
Federal Funds Effective	Federal Funds Effective	0.76	%	0.07	%	0.44	%	0.07	%	1.58	%	0.07	%	Federal Funds Effective	4.52	%	0.12	%		4.83	%	4.33	%
SOFR	SOFR	0.71	%	0.02	%	0.40	%	0.03	%	1.50	%	0.05	%	SOFR	4.50	%	0.09	%		4.87	%	4.30	%
Overnight LIBOR	Overnight LIBOR	0.77	%	0.07	%	0.44	%	0.07	%	1.58	%	0.06	%	Overnight LIBOR	4.50	%	0.12	%		4.80	%	4.32	%
1-week OIS		0.84	%	0.07	%	0.49	%	0.07	%	1.59	%	0.08	%
1-week Overnight-Indexed Swap														1-week Overnight-Indexed Swap	4.55	%	0.15	%		4.82	%	4.34	%
3-month LIBOR	3-month LIBOR	1.54	%	0.16	%	1.02	%	0.18	%	2.29	%	0.21	%	3-month LIBOR	4.92	%	0.53	%		5.19	%	4.77	%
3-month U.S. Treasury yield	3-month U.S. Treasury yield	1.07	%	0.02	%	0.69	%	0.03	%	1.67	%	0.04	%	3-month U.S. Treasury yield	4.71	%	0.29	%		4.75	%	4.37	%
2-year U.S Treasury yield	2-year U.S Treasury yield	2.72	%	0.17	%	2.09	%	0.15	%	2.96	%	0.73	%	2-year U.S Treasury yield	4.36	%	1.45	%		4.03	%	4.43	%
10-year U.S. Treasury yield	10-year U.S. Treasury yield	2.93	%	1.58	%	2.44	%	1.45	%	3.02	%	1.51	%	10-year U.S. Treasury yield	3.65	%	1.95	%		3.47	%	3.88	%

Source: Bloomberg

The level and volatility of interest rates, ~~during~~including the ~~three and six months ended June 30, 2022~~shape of the yield curve, were affected by several factors, principally efforts by the Federal Reserve beginning in late March 2022 to raise interest rates and tighten monetary policy to combat high inflation.

As the FOMC raised short-term rates, portions of the Treasury yield curve became inverted. Investors use the 10-year Treasury yield as an indicator of investor confidence. In recent periods, the 2-year rate has been consistently higher than the 10-year rate, and the 3-month rate nudged above the 10-year rate for the first time since before the COVID-19 pandemic. That change inverted what many regard as a critical relationship in the U.S. yield curve, signaling a coming recession.

At its meeting on July 27, 2022, the FOMC again indicated that inflation remained elevated, reflecting supply and demand imbalances. It also noted that Russia's war with Ukraine and related events were creating additional upward pressure on inflation and were weighing on global economic activity. Therefore, it remains highly attentive to inflation risks. To achieve its goals,May 3, 2023, the FOMC decided to raise the target range for the federal funds rate by another 25 bps to ~~2.25%~~5.00% to ~~2.50%~~5.25%. ~~It anticipated that ongoing increases in the target range will be appropriate.~~

The FOMC stated that "Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring and inflation. The extent of these effects remain uncertain. The Committee remains highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run."

"In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments."

"In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency MBS, as described in its previously announce plans."

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Impact on Operating Results. Market interest rates and trends affect yields and margins on earning assets, including advances, purchased mortgage loans, and our investment portfolio, which contribute to our overall profitability. Additionally, market interest rates drive mortgage origination and prepayment activity, which can lead to net interest margin volatility in our MPP and MBS portfolios. A flat or inverted yield curve, in which the difference between short-term interest rates and long-term interest rates is low, or negative, respectively, ~~can~~may have an unfavorable impact on our net interest margins. A steep yield curve, in which the difference between short-term and long-term interest rates is high, ~~can~~may have a favorable impact on our net interest margins. The level of interest rates also directly affects our earnings on assets funded by our interest-free capital.

Lending and investing activity by our member institutions is a key driver for our balance sheet and income growth. Such activity is a function of both prevailing interest rates and economic activity, including local economic factors, particularly relating to the housing and mortgage markets. Positive economic trends can drive interest rates higher, which can impair growth of the mortgage market. A less active mortgage market can affect demand for advances and activity levels in our Advantage MPP. However, borrowing patterns between our insurance company and depository members can differ during various economic and market conditions, thereby easing the potential magnitude of core business fluctuations during business cycles. Member demand for liquidity during stressed market conditions can lead to advances growth.

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Results of Operations and Changes in Financial Condition

Results of Operations for the Three ~~and Six~~ Months Ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022. The following table presents the comparative highlights of our results of operations ($ amounts in millions).


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended March 31,

Condensed Statements of Comprehensive Income	Condensed Statements of Comprehensive Income	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change		Condensed Statements of Comprehensive Income		2023		2022		$ Change		% Change
Net interest income	Net interest income	$	64	$	57	$	7	11	%	$	128	$	132	$	(4)	(3)	%	Net interest income		$	104	$	65	$	39	60	%
Provision for (reversal of) credit losses	Provision for (reversal of) credit losses	—		—		—				—		—		—				Provision for (reversal of) credit losses		—		—		—
Net interest income after provision for credit losses	Net interest income after provision for credit losses	64		57		7		11	%	128		132		(4)		(3)	%	Net interest income after provision for credit losses		104		65		39		60	%
Other income (loss)	Other income (loss)	(2)		(10)		8				(9)		(23)		14				Other income (loss)		30		(7)		37
Other expenses	Other expenses	26		28		(2)				51		57		(6)				Other expenses		31		26		5
Income before assessments	Income before assessments	36		19		17		88	%	68		52		16		29	%	Income before assessments		103		32		71		222	%
AHP assessments	AHP assessments	4		2		2				7		5		2				AHP assessments		11		3		8
Net income	Net income	32		17		15		89	%	61		47		14		30	%	Net income		92		29		63		220	%
Total other comprehensive income (loss)	Total other comprehensive income (loss)	(45)		13		(58)				(119)		88		(207)				Total other comprehensive income (loss)		(47)		(74)		27

Total comprehensive income (loss)	Total comprehensive income (loss)	$	(13)	$	30	$	(43)	(141)	%	$	(58)	$	135	$	(193)	(143)	%	Total comprehensive income (loss)		$	45	$	(45)	$	90	197	%

The increase in net income for the three months ended ~~June 30, 2022~~March 31, 2023 compared to the corresponding period in the prior year was primarily due to ~~lower amortization of mortgage purchase premiums, resulting from lower prepayments, and~~ higher earnings on the portion of the Bank's assets funded by its capital, ~~each~~ driven by the increase in market interest rates, ~~partially offset by declines in~~and net gains on the ~~fair values~~extinguishments of ~~the investments indirectly funding~~ certain ~~employee benefit plans.~~consolidated obligations.

The ~~increase~~changes in ~~net income~~total OCI for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 compared to the corresponding period in the prior year was primarily due to lower amortization of mortgage purchase premiums, resulting from lower prepayments, and higher earnings on the portion of the Bank's assets funded by its capital, each driven by the increase in market interest rates, partially offset by net hedging losses on qualifying fair-value hedging relationships and declines in the fair values of the investments indirectly funding certain employee benefit plans.

~~The decrease in total OCI for the~~ ~~three and six months ended June 30, 2022~~ ~~compared to the corresponding periods in the prior year was~~were substantially due to unrealized losses on AFS securities, in particular investments in ~~MBS, driven by the increase in market interest rates. However, our AFS securities remained in a net unrealized gain position at June 30, 2022.~~MBS.

The following table presents ~~return~~the returns on average assets and ~~return~~returns on average equity.


		Three Months Ended June 30,				Six Months Ended June 30,
									Three Months Ended March 31,
Ratios	Ratios	2022		2021		2022		2021		Ratios	2023		2022
Return on average assets	Return on average assets	0.21	%	0.11	%	0.20	%	0.14	%	Return on average assets	0.53	%	0.20	%
Return on average equity	Return on average equity	3.71	%	1.94	%	3.48	%	2.66	%	Return on average equity	10.86	%	3.26	%

~~Adjusted Net Income, a Non-GAAP Financial Measure.~~

The Bank reports its results of operations in accordance with GAAP. Management believes that a non-GAAP financial measure may also be useful to shareholders and other stakeholders as a key measure of its operating performance. Such measure can also provide additional insights into period-to-period comparisons of the Bank's operating results beyond its GAAP results, which are impacted by temporary changes in fair value and other factors driven by market volatility that hinder consistent performance measurement. As a result, the Bank is reporting adjusted net income as a non-GAAP financial measure.

~~Table of Contents~~

Adjusted net income represents GAAP net income adjusted to exclude: (i) the mark-to-market adjustments and other transitory effects from derivatives and trading/hedging activities, (ii) interest expense on MRCS, (iii) realized gains and losses on sales of investment securities, and (iv) at the discretion of management, other eligible non-routine transactions. These adjustments reflect (i) the temporary nature of fair-value and certain other hedging gains (losses) due to the Bank's practice of holding its financial instruments to maturity, (ii) the reclassification of interest on MRCS as dividends, (iii) the sale of investment securities, primarily for liquidity purposes or to reduce exposure to LIBOR-indexed instruments, the gains (losses) on which arise from accelerating the recognition of future income (expense), and (iv) any other eligible non-routine transactions that management determines can provide additional insights into period-to-period comparisons of the Bank’s operating results beyond its GAAP results.

Non-GAAP financial measures are not audited. In addition, non-GAAP financial measures have no standardized measurement prescribed by GAAP and may not be comparable to similar non-GAAP financial measures used by other companies. While management believes that adjusted net income is helpful in understanding the Bank's performance, this measure has limitations as an analytical tool and should not be considered in isolation or as a substitute for analyses of earnings reported in accordance with GAAP.

~~The following table presents a reconciliation of the Bank's GAAP net income to adjusted net income ($ amounts in millions):~~

Three Months Ended June 30, Six Months Ended June 30,
Reconciliation of Net Income 2022 2021 2022 2021
GAAP net income $ 32.3 $ 17.1 $ 60.9 $ 47.0
Adjustments to exclude:
Fair-value hedging (gains) losses (1)
6.8 5.6 4.8 (13.0)
Amortization/accretion of (gains) losses on ineffective and discontinued fair-value hedging relationships (2)
17.3 7.5 34.1 12.9
Trading (gains) losses, net of economic hedging gains (losses) (3)
(0.8) 10.1 (0.7) 19.1
Net unrealized (gains) losses on other economic hedges
(1.5) 0.1 0.3 0.5
Interest expense on MRCS 0.3 0.9 0.5 2.0
Total adjustments 22.1 24.2 39.0 21.5
AHP assessments on adjustments (2.2) (2.3) (3.8) (1.9)
Adjusted net income
(non-GAAP measure) $ 52.2 $ 39.0 $ 96.1 $ 66.6

~~(1)~~ ~~Changes in fair value on hedged items (attributable to the risk being hedged) and associated derivatives in qualifying hedging relationships.~~

~~(2)~~ ~~Gains (losses) resulting from cumulative basis adjustments on hedged items.~~

~~(3)~~ ~~Includes both (i) unrealized (gains) losses on trading securities and (ii) realized (gains) losses on maturities and sales of trading securities.~~

Adjusted net income for the three months ended June 30, 2022 was $52.2 million, an increase of $13.2 million compared to the corresponding period in the prior year. The increase was primarily due to lower accelerated amortization of mortgage purchase premiums, resulting from lower prepayments, higher interest spreads, and higher earnings on the portion of the Bank's assets funded by its capital, partially offset by declines in the fair values of the investments indirectly funding certain employee benefit plans.

~~Adjusted net income for the six months ended June 30, 2022~~ was $96.1 million, an increase of $29.5 million compared to the corresponding period in the prior year. The increase was primarily due to lower accelerated amortization of mortgage purchase premiums, resulting from lower prepayments, and higher interest spreads, partially offset by declines in the fair values of the investments indirectly funding certain employee benefit plans and lower earnings on trading securities.

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Changes in Financial Condition for the ~~Six~~Three Months Ended ~~June 30, 2022.~~March 31, 2023. The following table presents the comparative highlights of our changes in financial condition ($ amounts in millions).


Condensed Statements of Condition	Condensed Statements of Condition	June 30, 2022		December 31, 2021		$ Change		% Change		Condensed Statements of Condition	March 31, 2023		December 31, 2022		$ Change		% Change
Advances	Advances	$	30,507	$	27,498	$	3,009	11	%	Advances	$	36,950	$	36,683	$	267	1	%
Mortgage loans held for portfolio, net	Mortgage loans held for portfolio, net	7,730		7,616		114		1	%	Mortgage loans held for portfolio, net	7,732		7,687		45		1	%
Cash and short-term investments (1)		7,381		7,048		333		5	%
Investment securities and other assets (2)		18,648		17,843		805		5	%
Liquidity investments (1)										Liquidity investments (1)	9,377		10,805		(1,428)		(13)	%
Other investment securities (2)										Other investment securities (2)	17,879		16,420		1,459		9	%
Other assets										Other assets	752		689		63		9	%
Total assets	Total assets	$	64,266	$	60,005	$	4,261	7	%	Total assets	$	72,690	$	72,284	$	406	1	%

Consolidated obligations	Consolidated obligations	$	59,050	$	54,478	$	4,572	8	%	Consolidated obligations	$	66,878	$	67,270	$	(392)	(1)	%
MRCS	MRCS	46		50		(4)		(10)	%	MRCS	372		373		(1)		—	%
Other liabilities	Other liabilities	1,693		1,921		(228)		(12)	%	Other liabilities	1,869		1,257		612		49	%
Total liabilities	Total liabilities	60,789		56,449		4,340		8	%	Total liabilities	69,119		68,900		219		—	%

Capital stock	Capital stock	2,251		2,246		5		—	%	Capital stock	2,292		2,123		169		8	%
Retained earnings (3)	Retained earnings (3)	1,212		1,177		35		3	%	Retained earnings (3)	1,352		1,287		65		5	%
AOCI	AOCI	14		133		(119)		(89)	%	AOCI	(73)		(26)		(47)		(185)	%
Total capital	Total capital	3,477		3,556		(79)		(2)	%	Total capital	3,571		3,384		187		6	%

Total liabilities and capital	Total liabilities and capital	$	64,266	$	60,005	$	4,261	7	%	Total liabilities and capital	$	72,690	$	72,284	$	406	1	%

Total regulatory capital (4)	Total regulatory capital (4)	$	3,509	$	3,473	$	36	1	%	Total regulatory capital (4)	$	4,016	$	3,783	$	233	6	%

(1) Includes cash, interest-bearing deposits, securities purchased under agreements to resell, ~~and~~ federal funds ~~sold.~~sold and trading securities.

(2) Includes ~~trading,~~ AFS and HTM securities.

(3) Includes restricted retained earnings at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 of $~~299~~341 million and ~~$287~~$323 million, respectively.

(4) Total capital less AOCI plus MRCS.

Total assets at ~~June 30, 2022~~March 31, 2023 were ~~$64.3~~$72.7 billion, a net increase of ~~$4.3 billion,~~$406 million, or 7%1%, from December 31, ~~2021,~~2022, driven primarily by a net increase in ~~advances outstanding.~~other investment securities, substantially offset by a net decrease in liquidity investments.

Advances outstanding at ~~June 30, 2022,~~March 31, 2023, at carrying value, totaled ~~$30.5~~$37.0 billion, a net increase of ~~$3.0 billion,~~$267 million, or ~~11%~~1%, from December 31, ~~2021.~~2022. The par value of advances outstanding increased by 0.1% to $37.3 billion, which included a net increase in long-term advances of6% and a net decrease in short-term advances of 9%. The par value of advances outstanding to depository institutions -— comprising commercial banks, savings institutions and credit unions ~~- and~~— decreased by 0.3%, while advances outstanding to insurance companies increased by ~~16% and 9%, respectively.~~0.7%.

Purchases of mortgage loans from the Bank's members for the three months ended March 31, 2023 totaled$196 million. Mortgage loans held for portfolio at ~~June 30, 2022~~March 31, 2023 totaled $7.7 billion, a net increase of ~~$114~~$45 million, or 1%, from December 31, ~~2021,~~2022, as the Bank's purchases slightly exceeded principal repayments by borrowers.

~~The liquidity portfolio,~~

Liquidity investments, which ~~consists~~consist of cash and short-term investments as well as U.S. Treasury obligations, at ~~June 30, 2022~~March 31, 2023 totaled ~~$11.4~~$9.4 billion, a net ~~increase~~decrease of ~~$425 million,~~$1.4 billion, or 4%13%, from December 31, ~~2021.~~2022. Cash and short-term investments increased by ~~$333~~$406 million, or 5%, to ~~$7.4 billion.~~$9.0 billion to support actual and potential demand for advances during the first quarter. U.S. Treasury obligations, classified as trading securities, ~~increased~~decreased by ~~$92 million,~~$1.8 billion, or 2%82%, to ~~$4.0 billion.~~$395 million, as all of the Bank's purchases of U.S. Treasury obligations in 2023 were classified as available-for-sale. As a result, cash and short-term investments represented ~~65%~~96% of the total liquidity ~~portfolio~~investments at ~~June 30, 2022,~~March 31, 2023, while U.S. Treasury obligations represented ~~35%~~4%.

~~FHLBank Indianapolis' consolidated~~Other investment securities, which consist substantially of MBS and U.S. Treasury obligations ~~outstanding~~classified as HTM or AFS, at ~~June 30, 2022~~March 31, 2023 totaled ~~$59.0~~$17.9 billion, a net increase of ~~$4.6~~$1.5 billion, or 8%9%, from December 31, ~~2021, which reflected increased funding needs associated with the net increase in the Bank's total assets.~~

~~Total capital at June 30,~~ 2022, ~~was $3.5 billion, a net decrease of $79 million, or 2%, from December 31, 2021, primarily~~ due to ~~other comprehensive losses.~~

~~The Bank's regulatory capital-to-assets ratio at June 30, 2022 was 5.46%, which exceeds all applicable regulatory capital requirements.~~purchases of U.S. Treasury obligations andMBS.

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The Bank's consolidated obligations outstanding at March 31, 2023 totaled $66.9 billion, a net decrease of $392 million, or 1%, from December 31, 2022, which reflected slightly lower funding needs.

Total capital at March 31, 2023 was $3.6 billion, a net increase of $187 million, or 6%, from December 31, 2022. The net increase primarily resulted from issuances of capital stock to support the increase in advances.

The Bank's regulatory capital-to-assets ratio at March 31, 2023 was 5.53%, which exceeds all applicable regulatory capital requirements.

Outlook. We believe that our financial performance will continue to provide ~~reasonable,~~sufficient, risk-adjusted returns for our members across a wide range of business, financial, and economic environments.

During 2022, demand by our members for advances has increased in response to loan growth significantly outpacing their deposit growth, rising market interest rates, and the availability of suitable products to assist our members in managing their balance sheets in the current economic environment. However, if the anticipated merger of Flagstar Bank, historically one of our largest and most active borrowers, into a non-member depository institution results in repayment of their outstanding advances this year, we expect total advances outstanding at December 31, 2022 to approximate the balance outstanding at December 31, 2021.

Our net income for the six months ended June 30, 2022 was $60.9 million, an increase of $13.9 million compared to the corresponding period in the prior year. Based primarily on wider mortgage spreads, substantially resulting from lower loan prepayments, and higher earnings on the portion of the Bank's floating-rate assets funded by its capital, we expect a similar level of net income for the second half of the year. Such level of earnings in 2022 would be significantly higher than earnings in 2021, and would lead to significantly higher allocations to our AHP.

~~However, the~~The ultimate effects of economic and financial markets activity, including fiscal and monetary policies, the strength of the housing markets and the level and volatility of market interest rates, and legislative and regulatory actions continue to evolve and are highly uncertain and, therefore, the future impact on our business is difficult to predict.

Analysis of Results of Operations for the Three Months Ended March 31, 2023 and 2022.

Interest Income. Interest income on advances, mortgage loans held for portfolio, and investment securities is our primary source of revenue. Interest income for the three months ended March 31, 2023 totaled $819 million, an increase of $699 million compared to the corresponding period in the prior year, primarily driven by an increase in yields resulting from the increase in market interest rates.

Interest Expense. Interest expense on consolidated obligations is our primary expense. Interest expense for the three months ended March 31, 2023 totaled $715 million, an increase of $660 million compared to the corresponding period in the prior year, primarily driven by an increase in our cost of funds resulting from the increase in market interest rates.

Net Interest Income.As a result, net interest income is our primary source of earnings. The increase in net interest income for the three months ended March 31, 2023 compared to the corresponding period in the prior year was primarily due to higher earnings on the portion of the Bank's assets funded by its capital, driven by the increase in market interest rates.

For the hedging relationships that qualified for hedge accounting, the differences between the changes in fair value of the hedged items and the associated derivatives (i.e. hedge ineffectiveness) are recorded in net interest income and resulted in net hedging gains of $0.3 million for the three months ended March 31, 2023, compared to net hedging gains of $2 million for the corresponding period in the prior year.

Our net gains (losses) on derivatives fluctuate due tovolatility in the overall interest-rate environment as we hedge our asset or liability risk exposures. In general, we hold derivatives and associated hedged items to the maturity, call, or put date. Therefore, due to timing, nearly all of the cumulative net gains and losses for these financial instruments will generally reverse over the remaining contractual terms of the hedged item. However, there may be instances when we terminate these instruments prior to the maturity, call or put date, which may result in a realized gain or loss. For more information, see Notes to Financial Statements - Note 8 - Derivatives and Hedging Activities in our 2022 Form 10-K.

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~~Analysis of Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021.~~

~~Net Interest Income.~~The following table presents average daily balances, interest income/expense, and average yields/cost of funds of our major categories of interest-earning assets and their funding sources ($ amounts in millions).

Three Months Ended June 30,
2022 2021
Average
Balance
Interest
Income/
Expense (1)
Average
Yield/ Cost of Funds (1) (2)
Average
Balance
Interest
Income/
Expense (1)
Average
Yield/ Cost of Funds (1) (2)
Assets:
Federal funds sold and securities purchased under agreements to resell $ 7,223 $ 14 0.76 % $ 7,219 $ 1 0.05 %
Investment securities (3)
18,060 56 1.24 % 19,607 43 0.89 %
Advances (4)
27,455 68 0.99 % 29,010 28 0.39 %
Mortgage loans held for portfolio (4) (5)
7,736 51 2.67 % 7,875 40 2.04 %
Other assets (interest-earning) (6)
1,458 3 0.73 % 731 — 0.07 %
Total interest-earning assets 61,932 192 1.24 % 64,442 112 0.70 %
Other assets (7)
(413) 571
Total assets $ 61,519 $ 65,013
Liabilities and Capital:
Interest-bearing deposits $ 1,215 2 0.51 % $ 1,694 — 0.01 %
Discount notes 17,102 27 0.62 % 16,497 2 0.04 %
CO bonds (4)
39,146 99 1.02 % 42,319 52 0.50 %
MRCS 46 — 2.37 % 233 1 1.60 %
Total interest-bearing liabilities 57,509 128 0.89 % 60,743 55 0.37 %
Other liabilities 512 716
Total capital 3,498 3,554
Total liabilities and capital $ 61,519 $ 65,013
Net interest income $ 64 $ 57
Net spread on interest-earning assets less interest-bearing liabilities (2)
0.35 % 0.33 %
Net interest margin (8)
0.41 % 0.36 %
Average interest-earning assets to interest-bearing liabilities 1.08 1.06

~~Table of Contents~~


		Six Months Ended June 30,													Three Months Ended March 31,
		2022						2021							2023						2022
		Average Balance		Interest Income/ Expense (1)		Average Yield/ Cost of Funds (1) (2)		Average Balance		Interest Income/ Expense (1)		Average Yield/Cost of Funds (1) (2)			Average Balance		Interest Income/ Expense (1)		Average Yield/ Cost of Funds (1) (2)		Average Balance		Interest Income/ Expense (1)		Average Yield/Cost of Funds (1) (2)
Assets:	Assets:													Assets:
Federal funds sold and securities purchased under agreements to resell		$	6,638	$	15	0.47	%	$	7,757	$	2	0.05	%
Investment securities (3)		17,826		92		1.03	%	19,817		99		1.01	%
Securities purchased under agreements to resell														Securities purchased under agreements to resell	$	2,826	$	32	4.59	%	$	3,161	$	1	0.12	%
Federal funds sold														Federal funds sold	4,052		45		4.55	%	2,885		1		0.12	%
MBS (3)(4)														MBS (3)(4)	10,724		141		5.32	%	10,343		25		0.99	%
Other investment securities (3)(4)														Other investment securities (3)(4)	7,511		83		4.45	%	7,248		10		0.57	%
Advances (4)	Advances (4)	26,963		102		0.77	%	29,317		65		0.44	%	Advances (4)	36,630		434		4.81	%	26,464		35		0.54	%
Mortgage loans held for portfolio (4) (5)	Mortgage loans held for portfolio (4) (5)	7,697		99		2.60	%	8,077		80		2.01	%	Mortgage loans held for portfolio (4) (5)	7,710		58		3.04	%	7,658		48		2.53	%
Other assets (interest-earning) (6)	Other assets (interest-earning) (6)	1,136		3		0.52	%	816		—		0.07	%	Other assets (interest-earning) (6)	2,388		26		4.46	%	810		—		0.15	%
Total interest-earning assets	Total interest-earning assets	60,260		311		1.04	%	65,784		246		0.76	%	Total interest-earning assets	71,841		819		4.62	%	58,569		120		0.84	%
Other assets (7)	Other assets (7)	(71)						743						Other assets (7)	(1,093)						276
Total assets	Total assets	$	60,189					$	66,527					Total assets	$	70,748					$	58,845

Liabilities and Capital:	Liabilities and Capital:													Liabilities and Capital:
Interest-bearing deposits	Interest-bearing deposits	$	1,281	1		0.26	%	$	1,602	—		0.01	%	Interest-bearing deposits	$	722	7		4.28	%	$	1,347	—		0.03	%
Discount notes	Discount notes	14,978		30		0.41	%	17,629		6		0.07	%	Discount notes	23,328		257		4.46	%	12,830		4		0.12	%
CO bonds (4)	CO bonds (4)	39,785		151		0.76	%	42,770		106		0.50	%	CO bonds (4)	42,224		447		4.29	%	40,430		51		0.52	%
MRCS	MRCS	47		1		2.20	%	238		2		1.73	%	MRCS	372		4		4.47	%	48		—		2.05	%

Other borrowings														Other borrowings	6		—		4.87	%	—		—		—	%
Total interest-bearing liabilities	Total interest-bearing liabilities	56,091		183		0.66	%	62,239		114		0.37	%	Total interest-bearing liabilities	66,652		715		4.35	%	54,655		55		0.41	%
Other liabilities	Other liabilities	571						727						Other liabilities	673						633
Total capital		3,527						3,561
Capital stock														Capital stock	2,174						2,186
All other components of capital														All other components of capital	1,249						1,371
Total liabilities and capital	Total liabilities and capital	$	60,189					$	66,527					Total liabilities and capital	$	70,748					$	58,845

Net interest income	Net interest income			$	128					$	132			Net interest income			$	104					$	65

Net spread on interest-earning assets less interest-bearing liabilities (2)	Net spread on interest-earning assets less interest-bearing liabilities (2)					0.38	%					0.39	%	Net spread on interest-earning assets less interest-bearing liabilities (2)					0.27	%					0.43	%

Net interest margin (8)	Net interest margin (8)					0.43	%					0.40	%	Net interest margin (8)					0.59	%					0.45	%

Average interest-earning assets to interest-bearing liabilities	Average interest-earning assets to interest-bearing liabilities	1.07						1.06						Average interest-earning assets to interest-bearing liabilities	1.08						1.06

(1) Includes hedging gains (losses) on qualifying fair-value hedging relationships. Excludes impact of purchase discount (premium) recorded through mark-to-market gains (losses) on trading securities and net interest settlements on derivatives hedging trading securities.

(2) Annualized.

(3) ~~Consists of trading, AFS and HTM securities.~~ The average balances of AFS securities are based on amortized cost; therefore, the resulting yields do not reflect changes in the estimated fair value that are a component of OCI. Interest income/expense and average yield/cost of funds includes all other components of interest, including the impact of net interest payments or receipts on derivatives in qualifying hedging relationships and amortization of hedge accounting basis adjustments. Excludes net interest payments or receipts on derivatives in economic hedging relationships.

(4) ~~Interest~~Except for AFS securities, interest income/expense and average yield/cost of funds include all ~~other~~ components of interest, including the impact of net interest payments or receipts on derivatives in qualifying hedge relationships, amortization of hedge accounting basis adjustments, and prepayment fees on advances. Excludes net interest payments or receipts on derivatives in economic hedging ~~relationships.~~relationships, including those hedging trading securities.

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(5) Includes non-accrual loans.

(6) Consists of interest-bearing deposits and loans to other FHLBanks (if applicable). Includes the rights or obligations to cash collateral, except for variation margin payments characterized as daily settled contracts.

(7) Includes cumulative changes in the estimated fair value of AFS securities and grantor trust assets.

(8) Annualized net interest income expressed as a percentage of the average balance of interest-earning assets.

~~Table of Contents~~

Average Balances.The ~~increase in net interest income~~average balances outstanding of interest-earning assets for the three months ended ~~June 30, 2022~~March 31, 2023 increased by 23% compared to the corresponding period in ~~2021 was primarily due~~2022. The average balances of advances increased by 38%, reflecting higher member utilization of advances. The average balances outstanding of interest-bearing liabilities for the three months ended March 31, 2023 increased by 22% compared to ~~lower amortization~~the corresponding period in 2022. The average balances of ~~mortgage purchase premium, resulting from lower prepayments, and higher earnings~~discount notes increased by 82%, reflecting a change in mix of funding. Such increase in this previously lower-costing liability resulted in a disproportionate increase in interest expense. As a result, the average balances of total interest-earning assets, net of interest-bearing liabilities, increased by 33%. Such net increase contributed to the increase in interest income on the portion of the Bank's assets funded by its capital, partially offset by lower net interest income on trading securities. Net interest income for the three months ended June 30, 2022 included net hedging losses of $7 million, compared to net hedging losses for the corresponding period in 2021 of $6 million.

interest-free capital.

~~The decrease in net interest income for the~~ ~~six months ended June 30, 2022~~ compared to the corresponding period in 2021 was primarily due to lower net interest income on trading securities and net hedging losses partially offset by lower amortization of mortgage purchase premium, resulting from lower prepayments, and higher earnings on the portion of the Bank's assets funded by its capital. Net interest income for the ~~six months ended June 30, 2022~~ ~~included net hedging losses of $5 million, compared to net hedging gains for the corresponding period in 2021 of $13 million.~~

In general, the Bank holds the derivatives and associated hedged items to the maturity, call, or put date. As a result, nearly all of the gains and losses on these financial instruments are expected to reverse over the remaining contractual terms of the hedged items.

Yields/Cost of Funds. The average yield on total interest-earning assets, including the impact of hedging gains/losses but excluding certain impacts of trading securities, for the three months ended ~~June 30, 2022~~March 31, 2023 was ~~1.24%~~4.62%, an increase of 54378 bps compared to the corresponding period in ~~2021. The yield on advances and investment securities increased due~~2022, resulting primarily ~~to increasing~~from increases in market interest ~~rates. The yield~~rates that led to higher yields on ~~mortgage loans held for portfolio increased due~~all of our interest-earning assets. Such increase contributed to ~~lower amortization~~the increase in interest income on the portion of ~~purchase premium resulting from lower prepayments on mortgage loans. The~~the Bank's assets funded by its interest-free capital. The average cost of funds of total interest-bearing liabilities, including the impact of hedging gains and losses but excluding certain impacts of trading securities, for the three months ended ~~June 30, 2022~~March 31, 2023 was ~~0.89%~~4.35%, an increase of 52394 bps due ~~primarily~~ to ~~an increase in market interest rates.~~higher funding costs on all of our interest-bearing liabilities. The net effect was a ~~slight increase in the overall net interest spread under GAAP compared to the corresponding period in 2021.~~

~~The average yield on total interest-earning assets, including the impact of hedging gains/losses but excluding certain impacts of trading securities, for the~~ ~~six months ended June 30, 2022~~ was 1.04%, an increase of 28 bps compared to the corresponding period in 2021. The yield on advances and investment securities increased due primarily to an increase in market interest rates. The yield on mortgage loans held for portfolio increased due to lower amortization of purchase premium resulting from lower prepayments on mortgage loans. The average cost of funds of total interest-bearing liabilities, including the impact of hedging gains and losses but excluding certain impacts of trading securities, for the ~~six months ended June 30, 2022~~ ~~was 0.66%, an increase of 29 bps due primarily to an increase in market interest rates, and hedging losses, on our consolidated obligations. The net effect was a slight~~ decrease in the overall net interest spread ~~under GAAP~~ compared to the corresponding period in ~~2021.~~2022.

~~Average Balances.~~ The average balances outstanding of interest-earning assets for the three months ended June 30, 2022 decreased by 4% compared to the corresponding period in 2021. The average balances of investment securities and advances decreased by 8% and 5%, respectively, reflecting net principal paydowns. The decrease in average interest-bearing liabilities exceeded the decrease in average interest-earning assets. The average balances of total interest-earning assets, net of interest-bearing liabilities, increased by 20%.

~~The average balances outstanding of interest-earning assets for the~~ ~~six months ended June 30, 2022~~ decreased by 8% compared to the corresponding period in 2021. The average balances of investment securities and advances decreased by 10% and 8%, respectively, reflecting net principal paydowns. The decrease in average interest-bearing liabilities exceeded the decrease in average interest-earning assets. The average balances of total interest-earning assets, net of interest-bearing liabilities, increased by 18%.

~~Provision for Credit Losses.~~ ~~The change in the provisions for (reversal of) credit losses for the three and six months ended June 30, 2022 compared to the corresponding periods in 2021 was insignificant.~~

~~Table of Contents~~

Other Income. The following table presents a comparison of the components of other income ($ amounts in millions).


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
Components	Components	2022		2021		2022		2021		Components		2023		2022

Net unrealized gains (losses) on trading securities (1)	Net unrealized gains (losses) on trading securities (1)	$	(11)	$	(13)	$	(18)	$	(29)	Net unrealized gains (losses) on trading securities (1)		$	12	$	(7)
Net realized gains (losses) on trading securities (2)	Net realized gains (losses) on trading securities (2)	(3)		(1)		(20)		2		Net realized gains (losses) on trading securities (2)		(4)		(17)
Net gains (losses) on trading securities	Net gains (losses) on trading securities	(14)		(14)		(38)		(27)		Net gains (losses) on trading securities		8		(24)

Net gains (losses) on derivatives hedging trading securities	Net gains (losses) on derivatives hedging trading securities	17		3		41		8		Net gains (losses) on derivatives hedging trading securities		(11)		24
Net interest settlements on derivatives (3)		1		(3)		(1)		(8)
Net gains (losses) on other derivatives not designated as hedging instruments	Net gains (losses) on other derivatives not designated as hedging instruments	(1)		—		(3)		(1)		Net gains (losses) on other derivatives not designated as hedging instruments		—		(2)
Net interest settlements on economic derivatives (3)										Net interest settlements on economic derivatives (3)		10		(2)
Net gains (losses) on derivatives	Net gains (losses) on derivatives	17		—		37		(1)		Net gains (losses) on derivatives		(1)		20

Change in fair value of investments indirectly funding certain employee benefit plans		(6)		3		(10)		4
Net gains on extinguishment of debt										Net gains on extinguishment of debt		20		—
Change in fair value of investments indirectly funding the liabilities under the SERP										Change in fair value of investments indirectly funding the liabilities under the SERP		2		(4)
Other, net	Other, net	1		1		2		1		Other, net		1		1

Total other income (loss)	Total other income (loss)	$	(2)	$	(10)	$	(9)	$	(23)	Total other income (loss)		$	30	$	(7)

(1) Includes impact of purchase discount (premium) recorded through mark-to-market gains (losses)~~, as well as the reversal of the cumulative unrealized gain (loss) on any maturities or sales.~~. Excludes impact of associated derivatives.

(2) Includes, at maturity, 100% of original discount (premium) as gain (loss). Excludes impact of associated derivatives.

(3) Generally offsetting interest income on trading securities or interest expense on the associated funding is included in net interest income.

The ~~decrease~~increase in total other ~~loss~~income for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 compared to the corresponding ~~periods~~period in ~~2021~~2022 was ~~primarily~~ due to ~~increases in the fair values of~~net gains on debt extinguishments and net interest settlements received, particularly on swaps hedging trading ~~securities, partially offset by declines in the fair values of the investments indirectly funding certain employee benefit plans.~~

~~Net Gains (Losses) on Trading Securities.~~ ~~The following table presents the net impact of trading securities on income before assessments ($ amounts in millions).~~

Three Months Ended June 30, Six Months Ended June 30,
Earnings Components of Trading Securities 2022 2021 2022 2021
Net interest income (1)
$ 1 $ 14 $ 5 $ 28
Other income:
Net unrealized gains (losses) (11) (13) (18) (29)
Net realized gains (losses) (3) (1) (20) 2
Net interest settlements on derivatives 2 (2) — (8)
Change in fair value of derivatives 17 3 41 8
Other income (loss), net 5 (13) 3 (27)
Net impact of trading securities on income before assessments $ 6 $ 1 $ 8 $ 1

~~(1)~~ ~~Includes an estimated allocation of interest expense.~~securities.

In the first quarter of 2023, we retired two CO bonds prior to their contractual maturity dates and recognized net gains on debt extinguishment of $20 million. Such a significant gain is not expected to be a recurring component of other income or net income.

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Other Expenses. The following table presents a comparison of the components of other expenses ($ amounts in millions).


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
Components	Components	2022		2021		2022		2021		Components		2023		2022
Compensation and benefits	Compensation and benefits	$	13	$	14	$	26	$	30	Compensation and benefits		$	17	$	13
Other operating expenses	Other operating expenses	8		7		15		15		Other operating expenses		7		7
Finance Agency and Office of Finance	Finance Agency and Office of Finance	3		3		6		6		Finance Agency and Office of Finance		3		3
Other, net		2		4		4		6
Voluntary contributions to AHP and/or related programs										Voluntary contributions to AHP and/or related programs		3		1
Other										Other		1		2

Total other expenses	Total other expenses	$	26	$	28	$	51	$	57	Total other expenses		$	31	$	26

The net ~~decrease~~increase in total other expenses for the three months ended ~~June 30, 2022~~March 31, 2023 compared to the corresponding period in ~~2021~~2022 was primarily due to ~~a decrease~~an increase in ~~other net expenses, primarily due to lower non-service costs associated with our SERP.~~

~~The net decrease in total other expenses for the six months ended June 30, 2022 compared to the corresponding period in 2021~~compensation and benefits. Such increase was primarily due to a decrease in compensation and benefits and a decrease in other net expenses. The decrease in compensation and benefits was primarily due to a decrease in post-retirement benefits resulting from changes in market conditions, the impact of which was fully offset by a corresponding change in fair value recorded in other income, and excise tax refunds received in ~~the three months ended March 31, 2022. The decrease~~2022 that were not received in ~~other net expenses was primarily~~2023, an increase in employee headcount and increases in compensation due to ~~lower non-service costs associated with~~inflation and conditions in the labor market.

Additionally, our ~~SERP.~~voluntary contributions to AHP and/or related programs increased as a result of our increase in income before assessments. These amounts represent 2.5% of net earnings accrued for voluntary contributions to our AHP or voluntary allocations to affordable housing, small business and community investment programs.

AHP Assessments. For the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023, our required AHP expense was ~~$4 million and $7 million, respectively.~~$11 million. Our AHP expense fluctuates in accordance with our net earnings.

Total Other Comprehensive Income (Loss). Total OCI for the three ~~and six~~ months ended ~~June 30,~~ March 31, 2023 and 2022 consisted ~~primarily~~substantially of net unrealized losses on AFS securities, ~~compared~~which represent the portion of the changes in fair value that are not attributable to ~~net unrealized gains on AFS securities for~~ the ~~corresponding periods~~risks being hedged in ~~2021.~~fair-value hedge relationships. These amounts were primarily impacted by changes in interest rates, credit spreads and volatility.

~~Table of Contents~~

Operating Segments

Our products and services are grouped within two operating segments: traditional and mortgage loans.

Traditional. The following table presents the financial performance of our traditional segment ($ amounts in millions).


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
Traditional	Traditional	2022		2021		2022		2021		Traditional		2023		2022
Net interest income	Net interest income	$	51	$	53	$	103	$	128	Net interest income		$	91	$	53
Provision for (reversal of) credit losses	Provision for (reversal of) credit losses	—		—		—		—		Provision for (reversal of) credit losses		—		—
Other income (loss)	Other income (loss)	(2)		(10)		(9)		(23)		Other income (loss)		30		(7)
Other expenses	Other expenses	22		24		44		49		Other expenses		27		22
Income before assessments	Income before assessments	27		19		50		56		Income before assessments		94		24
AHP assessments	AHP assessments	3		2		5		5		AHP assessments		10		2

Net income	Net income	$	24	$	17	$	45	$	51	Net income		$	84	$	22

The increase in net income for the traditional segment for the three months ended ~~June 30, 2022~~March 31, 2023 compared to the corresponding period in ~~2021~~2022 was primarily due to higher earnings on the portion of the Bank's assets funded by its capital, driven by the increase in market interest rates, ~~partially offset by declines in~~and net gains on the ~~fair values~~extinguishments of ~~the investments indirectly funding~~ certain ~~employee benefit plans.~~consolidated obligations.

The decrease in net income for the traditional segment for the six months ended June 30, 2022 compared to the corresponding period in 2021 was primarily due to net hedging losses on qualifying fair-value hedging relationships and declines in the fair values

Table of investments indirectly funding certain employee benefit plans, partially offset by higher earnings on the portion of the Bank's assets funded by its capital, driven by the increase in market interest rates.Contents

Interest income on trading securities is recorded in net interest income, while the impact of purchase discount (premium) is recorded in other income through mark-to-market gains (losses) on trading securities. Net interest settlements on derivatives hedging trading securities are also recorded in other income.

Mortgage Loans. The following table presents the financial performance of our mortgage loans segment ($ amounts in millions).


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
Mortgage Loans	Mortgage Loans	2022		2021		2022		2021		Mortgage Loans		2023		2022
Net interest income	Net interest income	$	13	$	4	$	25	$	4	Net interest income		$	13	$	12
Provision for (reversal of) credit losses	Provision for (reversal of) credit losses	—		—		—		—		Provision for (reversal of) credit losses		—		—
Other income (loss)	Other income (loss)	—		—		—		—		Other income (loss)		—		—
Other expenses	Other expenses	4		4		7		8		Other expenses		4		4
Income (loss) before assessments		9		—		18		(4)
AHP assessments (credits)		1		—		2		—
Income before assessments										Income before assessments		9		8
AHP assessments										AHP assessments		1		1

Net income (loss)		$	8	$	—	$	16	$	(4)
Net income										Net income		$	8	$	7

The increase in net income for the mortgage loans segment for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 compared to the corresponding ~~periods~~period in ~~2021~~2022 was substantially due to lower amortization of mortgage purchase premiums resulting from lower ~~prepayments.~~principal prepayments by borrowers.

~~Table of Contents~~

Analysis of Financial Condition

Total Assets. The table below presents the comparative highlights of our major asset categories ($ amounts in millions).


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Major Asset Categories	Major Asset Categories	Carrying Value		% of Total		Carrying Value		% of Total		Major Asset Categories	Carrying Value		% of Total		Carrying Value		% of Total
Advances	Advances	$	30,507	47	%	$	27,498	46	%	Advances	$	36,950	51	%	$	36,683	51	%
Mortgage loans held for portfolio, net	Mortgage loans held for portfolio, net	7,730		12	%	7,616		13	%	Mortgage loans held for portfolio, net	7,732		11	%	7,687		11	%
Cash and short-term investments	Cash and short-term investments	7,381		12	%	7,048		12	%	Cash and short-term investments	8,982		12	%	8,575		12	%
Trading securities	Trading securities	4,039		6	%	3,947		7	%	Trading securities	395		1	%	2,230		3	%
MBS										MBS	10,925		15	%	10,307		14	%
Other investment securities	Other investment securities	14,074		22	%	13,474		22	%	Other investment securities	6,954		9	%	6,113		8	%
Other assets (1)	Other assets (1)	535		1	%	422		—	%	Other assets (1)	752		1	%	689		1	%

Total assets	Total assets	$	64,266	100	%	$	60,005	100	%	Total assets	$	72,690	100	%	$	72,284	100	%

(1) Includes accrued interest receivable, premises, software and equipment, derivative assets and other miscellaneous assets.

Total assets as of ~~June 30, 2022~~March 31, 2023 were ~~$64.3~~$72.7 billion, a net increase of ~~$4.3 billion,~~$406 million, or 7%1%, compared to December 31, ~~2021,~~2022, primarily driven by a net increase in ~~advances outstanding.~~MBS and other investment securities, substantially offset by a net decrease in trading securities. The mix of our assets at ~~June 30, 2022~~March 31, 2023 changed slightly compared to December 31, ~~2021~~2022 in that ~~advances~~all of our purchases of U.S. Treasury obligations in 2023 have been classified as ~~a percent of total assets increased fro~~m ~~46% to 47%, reflecting primarily the increased use of short-term advances by our members.~~AFS securities included in other investment securities.

Advances. In general, advances fluctuate in accordance with our members' funding needs, primarily determined by their deposit levels, mortgage pipelines, loan growth, investment opportunities, available collateral, other balance sheet strategies, and the cost of alternative funding options.

Advances at ~~June 30, 2022~~March 31, 2023 at carrying value totaled ~~$30.5~~$37.0 billion, a net increase of ~~$3.0 billion,~~$267 million, or ~~11%~~1%, compared to December 31, ~~2021.~~ 2022. This increase reflects ~~higher~~ demand by our members for advances ~~in response~~ to support their ~~loan growth significantly outpacing their deposit growth,~~liquidity needs, rising market interest rates, including the adverse impact on their investment portfolios, and the availability of suitable products to assist our members in managing their balance sheets in the current economic environment.

Our advances portfolio is well-diversified with advances to commercial banks and savings institutions, credit unions, and insurance companies. ~~Advances to depository institutions, as~~As a percent of total advances outstanding at par valueat March 31, 2023, advances to depository institutions were ~~55% at June 30, 2022,~~64%, while advances to insurance companies were ~~45%~~36%.

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The table below presents advances outstanding by type of financial institution ($ amounts in millions).


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Borrower Type	Borrower Type	Par Value		% of Total		Par Value		% of Total		Borrower Type	Par Value		% of Total		Par Value		% of Total
Depository institutions:	Depository institutions:									Depository institutions:
Commercial banks and savings institutions	Commercial banks and savings institutions	$	14,055	46	%	$	12,199	45	%	Commercial banks and savings institutions	$	15,428	42	%	$	13,920	37	%
Credit unions	Credit unions	2,674		9	%	2,199		8	%	Credit unions	4,986		13	%	5,163		14	%
Former members - depositories		224		—	%	225		1	%
Former members										Former members	3,370		9	%	4,772		13	%
Total depository institutions	Total depository institutions	16,953		55	%	14,623		54	%	Total depository institutions	23,784		64	%	23,855		64	%

Insurance companies:	Insurance companies:									Insurance companies:
Captive insurance companies (1)		263		1	%	263		1	%
Captive insurance company (1)										Captive insurance company (1)	213		1	%	213		1	%
Other insurance companies	Other insurance companies	13,624		44	%	12,419		45	%	Other insurance companies	13,317		35	%	13,217		35	%
Former members - other insurance companies		5		—	%	5		—	%
Former members										Former members	5		—	%	5		—	%
Total insurance companies	Total insurance companies	13,892		45	%	12,687		46	%	Total insurance companies	13,535		36	%	13,435		36	%

CDFIs	CDFIs	—		—	%	—		—	%	CDFIs	1		—	%	1		—	%

Total advances outstanding	Total advances outstanding	$	30,845	100	%	$	27,310	100	%	Total advances outstanding	$	37,320	100	%	$	37,291	100	%

(1) Captive insurance companies that were admitted as FHLBank members prior to September 12, 2014, and did not meet the definition of "insurance company" or fall within another category of institution that is eligible for FHLBank membership under the Final Rule on FHLBank Membership Rule, had their memberships terminated on February 19, 2021. The outstanding advances to one captive insurer are not required to be repaid prior to their various maturity dates through 2024.

Our advances portfolio includes fixed- and variable-rate advances, as well as callable or prepayable and putable advances. Prepayable advances may be prepaid on specified dates without incurring repayment or termination fees. All other advances may only be prepaid by the borrower paying a fee that is sufficient to make us financially indifferent to the prepayment.

Table of Contents

The following table presents the par value of advances outstanding by product type and redemption term, some of which contain call or put options ($ amounts in millions).


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Product Type and Redemption Term	Product Type and Redemption Term	Par Value		% of Total		Par Value		% of Total		Product Type and Redemption Term	Par Value		% of Total		Par Value		% of Total
Fixed-rate:	Fixed-rate:									Fixed-rate:
Without call or put options(1)	Without call or put options(1)									Without call or put options(1)
Due in 1 year or less	Due in 1 year or less	$	12,593	41	%	$	7,670	29	%	Due in 1 year or less	$	11,558	31	%	$	13,592	36	%
Due after 1 through 5 years	Due after 1 through 5 years	5,437		18	%	5,708		21	%	Due after 1 through 5 years	8,566		23	%	7,559		20	%
Due after 5 through 15 years	Due after 5 through 15 years	978		3	%	752		3	%	Due after 5 through 15 years	2,229		6	%	1,696		5	%
Thereafter	Thereafter	2		—	%	2		—	%	Thereafter	14		—	%	15		—	%
Total	Total	19,010		62	%	14,132		53	%	Total	22,367		60	%	22,862		61	%

Callable or prepayable	Callable or prepayable									Callable or prepayable
Due in 1 year or less	Due in 1 year or less	2		—	%	—		—	%	Due in 1 year or less	—		—	%	2		—	%
Due after 1 through 5 years	Due after 1 through 5 years	—		—	%	2		—	%	Due after 1 through 5 years	50		—	%	—		—	%
Due after 5 through 15 years	Due after 5 through 15 years	5		—	%	5		—	%	Due after 5 through 15 years	41		—	%	41		—	%
Thereafter		—		—	%	—		—	%

Total	Total	7		—	%	7		—	%	Total	91		—	%	43		—	%

Putable	Putable									Putable
Due in 1 year or less	Due in 1 year or less	250		1	%	—		—	%	Due in 1 year or less	120		—	%	5		—	%
Due after 1 through 5 years	Due after 1 through 5 years	1,883		6	%	2,289		8	%	Due after 1 through 5 years	1,251		4	%	1,296		4	%
Due after 5 through 15 years	Due after 5 through 15 years	4,038		13	%	5,747		21	%	Due after 5 through 15 years	7,098		19	%	7,191		19	%
Thereafter		—		—	%	—		—	%
Total		6,171		20	%	8,036		29	%

Other (1)
Due in 1 year or less		50		—	%	50		—	%
Due after 1 through 5 years		54		—	%	64		—	%
Due after 5 through 15 years		32		—	%	24		—	%
Thereafter		16		—	%	3		—	%
Total	Total	152		—	%	141		—	%	Total	8,469		23	%	8,492		23	%

Total fixed-rate	Total fixed-rate	25,340		82	%	22,316		82	%	Total fixed-rate	30,927		83	%	31,397		84	%

Variable-rate:	Variable-rate:									Variable-rate:
Without call or put options	Without call or put options									Without call or put options
Due in 1 year or less	Due in 1 year or less	256		1	%	18		—	%	Due in 1 year or less	451		1	%	515		2	%
Due after 1 through 5 years	Due after 1 through 5 years	167		1	%	167		1	%	Due after 1 through 5 years	170		—	%	160		—	%
Due after 5 through 15 years		—		—	%	—		—	%
Thereafter		—		—	%	—		—	%

Total	Total	423		2	%	185		1	%	Total	621		1	%	675		2	%

Callable or prepayable	Callable or prepayable									Callable or prepayable
Due in 1 year or less	Due in 1 year or less	221		1	%	126		—	%	Due in 1 year or less	1,068		3	%	403		1	%
Due after 1 through 5 years	Due after 1 through 5 years	2,965		9	%	2,831		10	%	Due after 1 through 5 years	2,941		8	%	3,011		8	%
Due after 5 through 15 years	Due after 5 through 15 years	1,443		5	%	1,297		5	%	Due after 5 through 15 years	1,408		4	%	1,450		4	%
Thereafter	Thereafter	355		1	%	555		2	%	Thereafter	355		1	%	355		1	%
Total	Total	4,984		16	%	4,809		17	%	Total	5,772		16	%	5,219		14	%

Total variable-rate	Total variable-rate	5,407		18	%	4,994		18	%	Total variable-rate	6,393		17	%	5,894		16	%

Overdrawn demand and overnight deposit accounts		98		—	%	—		—	%

Total advances	Total advances	$	30,845	100	%	$	27,310	100	%	Total advances	$	37,320	100	%	$	37,291	100	%

(1) Includes fixed-rate amortizing/mortgage matched advances.

~~Table of Contents~~

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, the par value of advances due in one year or less ~~increased~~decreased by ~~71%~~9%, while advances due after one year ~~decreased~~increased by ~~11%~~6%. As a result, advances due in one year or less, as a percentage of the total outstanding at par, totaled ~~44%~~35% at ~~June 30, 2022, an increase~~March 31, 2023, a decrease from ~~29%~~39% at December 31, ~~2021.~~2022. However, during the three months ended June 30, 2022, in response to the Bank exercising its option on certain long-term putable advances, several members replaced that funding with short-term advances without put options. Basedbased on the earlier of the redemption ~~date~~ or ~~the~~ next put date, ~~advances due in one year or less increased by 27%, while advances due after one year decreased by less than 1%. As a result,~~ advances due in one year or less, as a percentage of the total outstanding, at par, ~~totaled 55%~~ at ~~June 30, 2022, an increase from 49% at~~March 31, 2023 and December 31, ~~2021.~~2022 totaled 50% and 54%, respectively. For additional information, see Notes to Financial Statements - Note 4 - Advances.

Table of Contents

The following table presents our variable-rate advances outstanding by the associated interest-rate index ($ amounts in millions).


Variable Interest-Rate Index	March 31, 2023		December 31, 2022
SOFR	$	2,338	$	2,401
FHLBanks cost of funds	1,966		1,870
LIBOR	1,159		1,278
Other	930		345
Total variable-rate advances, at par value	$	6,393	$	5,894

The reduction in LIBOR-indexed advances is due to our continued steps to transition our LIBOR-linked financial instruments and contracts to SOFR or other indexes. See Item 3. Quantitative and Qualitative Disclosures About Market Risk - Replacement of the LIBOR Benchmark Interest Rate.

Mortgage Loans Held for Portfolio. Mortgage loans held for portfolio at ~~June 30, 2022,~~March 31, 2023, at carrying value, totaled $7.7 billion, a net increase of $~~114~~45 million, or 1%, from December 31, ~~2021,~~2022, as the Bank's purchases exceeded principal repayments. ~~For the six months ended June 30, 2022, purchases of mortgage loans under Advantage MPP totaled $772 million, while MPP and MPF program repayments totaled~~ ~~$600 million.~~

~~Cash~~The following table summarizes the activity in the UPB of mortgage loans held for portfolio ($ amounts in millions).


	Three Months Ended March 31,
Mortgage Loans Activity		2023		2022
Balance, beginning of period		$	7,533	$	7,434
Purchases		194		453
Principal repayments		(146)		(361)
Balance, end of period		$	7,581	$	7,526

Table of Contents

Liquidity and ~~Investments.~~Other Investment Securities. The following table presents a comparison of the components of our ~~cash~~liquidity investments and ~~investments~~other investment securities at carrying value ($ amounts in millions).


									March 31, 2023				December 31, 2022
Components	Components	June 30, 2022		December 31, 2021		Change		Components	Carrying Value		% of Total		Carrying Value		% of Total
Cash and short-term investments:	Cash and short-term investments:							Cash and short-term investments:
Cash and due from banks	Cash and due from banks	$	60	$	868	$	(808)	Cash and due from banks	$	63	—	%	$	21	—	%
Interest-bearing deposits	Interest-bearing deposits	325		100		225		Interest-bearing deposits	581		2	%	856		3	%
Securities purchased under agreements to resell	Securities purchased under agreements to resell	4,500		3,500		1,000		Securities purchased under agreements to resell	5,625		21	%	4,550		17	%
Federal funds sold	Federal funds sold	2,496		2,580		(84)		Federal funds sold	2,713		10	%	3,148		12	%
Total cash and short-term investments	Total cash and short-term investments	7,381		7,048		333		Total cash and short-term investments	8,982		33	%	8,575		32	%

Trading securities:	Trading securities:							Trading securities:
U.S. Treasury obligations	U.S. Treasury obligations	4,039		3,947		92		U.S. Treasury obligations	395		1	%	2,230		8	%
Total trading securities	Total trading securities	4,039		3,947		92		Total trading securities	395		1	%	2,230		8	%

Total liquidity investments								Total liquidity investments	9,377		34	%	10,805		40	%

Other investment securities:	Other investment securities:							Other investment securities:
AFS securities:	AFS securities:							AFS securities:
U.S. Treasury obligations	U.S. Treasury obligations	2,106		—		2,106		U.S. Treasury obligations	5,080		19	%	4,210		16	%
GSE and TVA debentures	GSE and TVA debentures	2,086		2,697		(611)		GSE and TVA debentures	1,874		7	%	1,903		7	%
GSE multifamily MBS	GSE multifamily MBS	6,005		6,463		(458)		GSE multifamily MBS	6,361		23	%	6,067		22	%
Total AFS securities	Total AFS securities	10,197		9,160		1,037		Total AFS securities	13,315		49	%	12,180		45	%

HTM securities:	HTM securities:							HTM securities:

Other U.S. obligations single-family MBS	Other U.S. obligations single-family MBS	2,522		2,626		(104)		Other U.S. obligations single-family MBS	3,332		12	%	2,992		11	%
GSE single-family MBS	GSE single-family MBS	722		816		(94)		GSE single-family MBS	605		2	%	620		2	%
GSE multifamily MBS	GSE multifamily MBS	633		872		(239)		GSE multifamily MBS	627		3	%	628		2	%
Total HTM securities	Total HTM securities	3,877		4,314		(437)		Total HTM securities	4,564		17	%	4,240		15	%

Total investment securities		18,113		17,421		692
Total other investment securities								Total other investment securities	17,879		66	%	16,420		60	%

Total cash and investments, carrying value	Total cash and investments, carrying value	$	25,494	$	24,469	$	1,025	Total cash and investments, carrying value	$	27,256	100	%	$	27,225	100	%

Liquidity Investments.

Cash and Short-Term Investments. Cash and short-term investments at ~~June 30, 2022~~March 31, 2023 totaled ~~$7.4~~$9.0 billion, an increase of ~~$333~~$406 million, or 5%, from December 31, ~~2021.~~2022 to support the actual and potential demand for advances. Cash and short-term investments as a percent of total assets at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 totaled 12%.

Trading Securities. The Bank has purchased U.S. Treasury obligations as trading securities to enhance its liquidity. Such securities outstanding at March 31, 2023 totaled $395 million, a decrease of $1.8 billion, or 82%, from December 31, 2022, as all of the Bank's purchases of U.S. Treasury obligations in 2023 were classified as AFS.

Liquidity investments at March 31, 2023 totaled $9.4 billion, a decrease of $1.4 billion, or 13%, from December 31, 2022. The total outstanding balance and composition of our ~~short-term~~liquidity investments are influenced by our liquidity needs, regulatory requirements, actual and anticipated member advance activity, market conditions, and ~~in particular at June 30, 2022,~~ the availability of short-term investments at attractive interest rates, relative to our cost of funds.

~~Trading Securities.We purchase U.S. Treasury obligations as trading securities to enhance the Bank's liquidity. Such securities outstanding at June 30, 2022 totaled~~ ~~$4.0 billion, an increase of $92 million, or 2%, from December 31, 2021.~~

~~As a result, the liquidity portfolio at June 30, 2022 totaled~~ ~~$11.4 billion, an increase of $425 million, or 4%, from~~ ~~December 31, 2021~~.

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Other Investment Securities. AFS securities at ~~June 30, 2022~~March 31, 2023 totaled ~~$10.2~~$13.3 billion, a net increase of ~~$1.0~~$1.1 billion, or ~~11%~~9%, from December 31, ~~2021.~~2022. The increase resulted from purchases of ~~longer-term~~ U.S. Treasury obligations ~~partially offset by principal payments on Agency debentures~~ and MBS.

Net unrealized ~~gains~~losses on AFS securities, excluding the portion of the changes in fair value that are attributable to the risks being hedged in fair-value hedging relationships, at ~~June 30, 2022~~March 31, 2023 totaled ~~$32~~$(58) million, ~~a net decrease~~an increase in the losses of ~~$120~~$48 million compared to December 31, ~~2021,~~2022, primarily due to changes in interest rates, credit spreads and volatility.

HTM securities at ~~June 30, 2022~~March 31, 2023 totaled ~~$3.9~~$4.6 billion, a net ~~decrease~~increase of ~~$436~~$323 million, or ~~10%~~8%, from December 31, ~~2021.~~2022. The ~~decrease~~net increase resulted primarily from ~~principal payments on these securities,~~purchases of MBS, partially offset by ~~purchases~~principal payments and maturities of ~~MBS.~~these securities.

Net unrecognized losses on HTM securities at March 31, 2023 totaled $(69) million, a decrease in the losses of $15 million compared to December 31, 2022, primarily due to changes in interest rates, credit spreads and volatility.

Interest-Rate Payment Terms. Our other investment securities are presented below by interest-rate payment terms ($ amounts in millions).


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Interest-Rate Payment Terms	Interest-Rate Payment Terms	Estimated Fair Value		% of Total		Estimated Fair Value		% of Total		Interest-Rate Payment Terms	Amortized Cost		% of Total		Amortized Cost		% of Total

Total fixed-rate trading securities		$	4,039	100	%	$	3,947	100	%

		Amortized Cost		% of Total		Amortized Cost		% of Total

AFS Securities (1):										AFS Securities (1):
Total non-MBS fixed-rate										Total non-MBS fixed-rate	$	6,936	52	%	$	6,091	50	%
Total MBS fixed-rate										Total MBS fixed-rate	6,437		48	%	6,099		50	%

Total AFS securities										Total AFS securities	$	13,373	100	%	$	12,190	100	%

HTM Securities:										HTM Securities:

Total MBS fixed-rate										Total MBS fixed-rate	$	204	4	%	$	204	5	%
Total MBS variable-rate										Total MBS variable-rate	4,360		96	%	4,036		95	%

Total HTM securities										Total HTM securities	$	4,564	100	%	$	4,240	100	%

AFS (1) and HTM securities:
AFS and HTM securities:										AFS and HTM securities:
Total fixed-rate	Total fixed-rate	$	10,375	74	%	$	9,226	69	%	Total fixed-rate	$	13,577	76	%	$	12,394	75	%
Total variable-rate	Total variable-rate	3,667		26	%	4,096		31	%	Total variable-rate	4,360		24	%	4,036		25	%

Total AFS and HTM securities	Total AFS and HTM securities	$	14,042	100	%	$	13,322	100	%	Total AFS and HTM securities	$	17,937	100	%	$	16,430	100	%

(1) Carrying value for AFS is equal to estimated fair value.

The mix of fixed- vs. variable-rate AFS and HTM securities at ~~June 30, 2022~~March 31, 2023 changed slightly from December 31, ~~2021,~~2022, primarily due to purchases of fixed-rate U.S. Treasury obligations. However, all of the fixed-rate AFS securities are swapped to effectively create variable-rate ~~exposures,~~securities, consistent with our balance sheet strategies to manage interest-rate risk.

The following table presents our variable-rate MBS outstanding by the associated interest-rate index ($ amounts in millions).


Variable Interest-Rate Index	March 31, 2023		December 31, 2022
SOFR	$	2,410	$	1,994
LIBOR	1,927		2,018
Total variable-rate MBS, at principal amount	$	4,337	$	4,012

The reduction in LIBOR-indexed MBS is due to our continued steps to transition our LIBOR-linked financial instruments and contracts to SOFR. See Item 3. Quantitative and Qualitative Disclosures About Market Risk - Replacement of the LIBOR Benchmark Interest Rate.

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Total Liabilities. Total liabilities at ~~June 30, 2022~~March 31, 2023 were $~~60.8~~69.1 billion, a net increase of ~~$4.3 billion,~~$219 million, or 8%0.3%, from December 31, ~~2021~~2022~~, substantially due to an increase in consolidated obligations.~~.

Deposits (Liabilities). Total deposits at ~~June 30, 2022~~March 31, 2023 were ~~$908~~$582 million, a net decrease of ~~$459~~$14 million, or ~~34%~~2%, from December 31, ~~2021.~~2022. These deposits provide a relatively small portion of our funding. The balances of these accounts can fluctuate from period to period and vary depending upon such factors as the attractiveness of our deposit pricing relative to the rates available on alternative money market instruments, members' preferences with respect to the maturity of their investments, and members' liquidity.

Consolidated Obligations. The overall balance of our consolidated obligations fluctuates in relation to our total assets and the availability of alternative sources of funds. The carrying value of consolidated obligations outstanding at ~~June 30, 2022~~March 31, 2023 totaled ~~$59.0~~$66.9 billion, a net ~~increase~~decrease of ~~$4.6 billion,~~$392 million, or 8%1%, from December 31, ~~2021,~~2022, which reflected ~~increased~~slightly lower funding ~~needs associated with the net increase in the Bank's total assets.~~needs.

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The composition of our consolidated obligations can fluctuate significantly based on comparative changes in their cost levels, supply and demand conditions, demand for various types and maturities of advances, and our overall balance sheet management strategy. Discount notes are issued to provide short-term funds, while CO bonds are generally issued to provide a longer-term mix of funding. Some CO bonds are issued with terms which permit us to repay them when more favorable funding opportunities emerge. We apply a variety of strategies to effectively manage the balance and structure of our consolidated obligations as market conditions and our asset levels change.

The following table presents a breakdown by term of our consolidated obligations outstanding ($ amounts in millions).


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
By Term		Par Value		% of Total		Par Value		% of Total
Term										Term	Par Value		% of Total		Par Value		% of Total
Consolidated obligations due in 1 year or less:	Consolidated obligations due in 1 year or less:									Consolidated obligations due in 1 year or less:
Discount notes	Discount notes	$	19,617	32	%	$	12,118	22	%	Discount notes	$	23,282	34	%	$	27,534	40	%
CO bonds	CO bonds	8,950		15	%	14,357		26	%	CO bonds	12,141		18	%	10,016		14	%
Total due in 1 year or less	Total due in 1 year or less	28,567		47	%	26,475		48	%	Total due in 1 year or less	35,423		52	%	37,550		54	%
Long-term CO bonds	Long-term CO bonds	32,001		53	%	28,193		52	%	Long-term CO bonds	33,275		48	%	31,986		46	%

Total consolidated obligations	Total consolidated obligations	$	60,568	100	%	$	54,668	100	%	Total consolidated obligations	$	68,698	100	%	$	69,536	100	%

The mix of our funding ~~due in 1 year or less~~has changed from December 31, 2022 as discount notes ~~increased~~outstanding decreased and CO bonds ~~decreased, partially~~outstanding increased, primarily due to the ~~increase~~decrease in short-term advances. We continue to seek to maintain a sufficient liquidity and funding balance between our financial assets and financial liabilities.

All of our variable-rate CO bonds outstanding at March 31, 2023 and December 31, 2022 were indexed to SOFR.

Derivatives. The volume of derivative hedges is often expressed in terms of notional amounts, which is the amount upon which interest payments are calculated. The following table presents the notional amounts by type of hedged item regardless of whether it is in a qualifying hedge relationship ($ amounts in millions).


Hedged Item	Hedged Item	June 30, 2022		December 31, 2021		Hedged Item	March 31, 2023		December 31, 2022
Advances	Advances	$	21,037	$	21,084	Advances	$	23,416	$	24,038
AFS securities		15,570		13,356
Investments						Investments	15,688		15,936
Mortgage loans MDCs	Mortgage loans MDCs	64		194		Mortgage loans MDCs	115		61
CO bonds	CO bonds	28,284		21,177		CO bonds	34,527		30,940

Discount notes						Discount notes	2,000		2,000

Total notional outstanding	Total notional outstanding	$	64,955	$	55,811	Total notional outstanding	$	75,746	$	72,975

The increase in the total notional amount outstanding during the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 of ~~$9.1~~$2.8 billion, or ~~16%~~4%, was substantially due to an increase in derivatives hedging CO bonds, driven primarily by an increase in long-term ~~callable~~ CO ~~bonds,~~bonds.

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The following table presents the notional amounts of derivatives (cleared and ~~an increase~~uncleared) indexed to a variable interest rate ($ amounts in ~~fixed-rate AFS securities, driven primarily by~~millions).


Variable Interest-Rate Index	March 31, 2023		December 31, 2022
SOFR	$	55,785	$	50,344
EFFR	13,218		14,016
LIBOR	6,629		8,554
Total variable rate, at notional	$	75,632	$	72,914

The reduction in LIBOR-indexed derivatives is due to our continued steps to transition our LIBOR-linked financial instruments and contracts to SOFR. See Item 3. Quantitative and Qualitative Disclosures About Market Risk - Replacement of the ~~purchase of U.S. Treasury obligations.~~LIBOR Benchmark Interest Rate.

The following table presents the cumulative impact of fair-value hedging basis adjustments on our statement of condition ($ amounts in millions).


June 30, 2022		Advances		AFS Securities		CO Bonds		Total
											March 31, 2023
											Advances		AFS Securities		CO Bonds		Total
Cumulative fair-value hedging basis adjustments on hedged items	Cumulative fair-value hedging basis adjustments on hedged items	$	(345)	$	(577)	$	1,530	$	608	Cumulative fair-value hedging basis adjustments on hedged items	$	(376)	$	(816)	$	1,733	$	541
Estimated fair value of associated derivatives, net	Estimated fair value of associated derivatives, net	344		869		(1,539)		(326)		Estimated fair value of associated derivatives, net	376		1,062		(1,744)		(306)

Net cumulative fair-value hedging basis adjustments	Net cumulative fair-value hedging basis adjustments	$	(1)	$	292	$	(9)	$	282	Net cumulative fair-value hedging basis adjustments	$	—	$	246	$	(11)	$	235

The cumulative gains on AFS securities resulted from our strategy of terminating certain interest-rate swaps associated with the Fannie Mae Delegated Underwriting and Servicing MBS and entering into hedging relationships with new interest-rate swaps in connection with our LIBOR transition.

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Total Capital. Total capital at ~~June 30, 2022~~March 31, 2023 was ~~$3.5~~$3.6 billion, a net ~~decrease~~increase of ~~$79~~$187 million, or 2%6%, from December 31, ~~2021~~,2022. The net increase primarily ~~due to other comprehensive losses, which substantially~~ resulted from ~~unrealized losses on investments in MBS, driven by~~issuances of capital stock to support the increase in ~~market interest rates.~~advances.

The following table presents a percentage breakdown of the components of GAAP capital.


Components	Components	June 30, 2022		December 31, 2021		Components	March 31, 2023		December 31, 2022
Capital stock	Capital stock	65	%	63	%	Capital stock	64	%	63	%
Retained earnings	Retained earnings	35	%	33	%	Retained earnings	38	%	38	%
AOCI	AOCI	—	%	4	%	AOCI	(2)	%	(1)	%
Total GAAP capital	Total GAAP capital	100	%	100	%	Total GAAP capital	100	%	100	%

The changes in the components of GAAP capital at ~~June 30, 2022~~March 31, 2023 compared to December 31, ~~2021~~2022 were primarily due to ~~a decrease~~issuances of capital stock and an increase in ~~net~~ unrealized ~~gains~~losses on AFS securities.

The following table presents a reconciliation of GAAP capital to regulatory capital ($ amounts in millions).


Reconciliation	Reconciliation	June 30, 2022		December 31, 2021		Reconciliation	March 31, 2023		December 31, 2022

Total GAAP capital	Total GAAP capital	$	3,477	$	3,556	Total GAAP capital	$	3,571	$	3,384
Exclude: AOCI	Exclude: AOCI	(14)		(133)		Exclude: AOCI	73		26
Add: MRCS	Add: MRCS	46		50		Add: MRCS	372		373
Total regulatory capital	Total regulatory capital	$	3,509	$	3,473	Total regulatory capital	$	4,016	$	3,783

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Liquidity ~~and Capital Resources~~

~~Liquidity.~~Our primary sources of liquidity are holdings of liquid assets, comprised of cash, short-term investments, and trading securities, as well as the issuance of consolidated obligations.

Our cash and short-term investments at June 30, 2022 totaled $7.4 billion. Our short-term investments generally consist of high-quality financial instruments, many of which mature overnight. Our trading securities at June 30, 2022 totaled $4.0 billion and consisted solely of U.S. Treasury obligations. As a result, our liquidity portfolio at June 30, 2022 totaled $11.4 billion, or 18% of total assets. The level of our liquidity fluctuates and is influenced by regulatory requirements, actual and anticipated member advance activity and market conditions and opportunities.

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, we maintained sufficient access to funding; our net proceeds from the issuance of consolidated obligations totaled ~~$380.1~~$129.6 billion.

Changes in Cash Flow. Net cash ~~provided by~~used in operating activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was ~~$935~~$96 million, compared to net cash provided by operating activities for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 of ~~$154~~$559 million. The net change in cash provided ~~by operating activities~~ of ~~$777~~$655 million was substantially due to the fluctuation in variation margin payments on cleared derivatives. Such payments are treated by the Clearinghouses as daily settled contracts.

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Capital ~~Resources.~~Resources

Total Regulatory ~~Capital~~.Capital. The following table provides a breakdown of our outstanding capital stock and MRCS by type of member ($ amounts in millions).


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
By Type of Member Institution		Amount		% of Total		Amount		% of Total
Type of Member										Type of Member	Amount		% of Total		Amount		% of Total
Capital Stock:	Capital Stock:									Capital Stock:
Depository institutions:	Depository institutions:									Depository institutions:
Commercial banks and savings institutions	Commercial banks and savings institutions	$	1,110	48	%	$	1,126	49	%	Commercial banks and savings institutions	$	1,029	38	%	$	889	36	%
Credit unions	Credit unions	332		15	%	309		13	%	Credit unions	422		16	%	409		16	%
Total depository institutions	Total depository institutions	1,442		63	%	1,435		62	%	Total depository institutions	1,451		54	%	1,298		52	%
Insurance companies	Insurance companies	809		35	%	811		35	%	Insurance companies	841		32	%	825		33	%
CDFIs	CDFIs	—		—	%	—		—	%	CDFIs	—		—	%	—		—	%
Total capital stock, putable at par value	Total capital stock, putable at par value	2,251		98	%	2,246		97	%	Total capital stock, putable at par value	2,292		86	%	2,123		85	%

MRCS:	MRCS:									MRCS:
Captive insurance companies (1)		12		1	%	12		1	%
Captive insurance company (1)										Captive insurance company (1)	10		—	%	10		—	%
Other former members	Other former members	34		1	%	38		2	%	Other former members	362		14	%	363		15	%

Total MRCS	Total MRCS	46		2	%	50		3	%	Total MRCS	372		14	%	373		15	%

Total regulatory capital stock	Total regulatory capital stock	$	2,297	100	%	$	2,296	100	%	Total regulatory capital stock	$	2,664	100	%	$	2,496	100	%

(1) Represents a captive insurance ~~companies~~company whose membership was terminated on February 19, 2021. On that date, we repurchased ~~their~~its excess stock of $18 million. The remaining balance will not be redeemed until the associated credit products and other obligations are no longer outstanding.

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Excess Capital Stock. The following table presents the composition of our ~~excess~~regulatory capital stock ($ amounts in millions).


Components	Components	June 30, 2022			December 31, 2021			Components	March 31, 2023			December 31, 2022
Required capital stock:								Required capital stock:
Member capital stock								Member capital stock	$	1,745		$	1,678
MRCS								MRCS	162			225
Total required capital stock								Total required capital stock	1,907			1,903

Excess capital stock:								Excess capital stock:
Member capital stock not subject to outstanding redemption requests	Member capital stock not subject to outstanding redemption requests	$	636		$	798		Member capital stock not subject to outstanding redemption requests	547			445
Member capital stock subject to outstanding redemption requests	Member capital stock subject to outstanding redemption requests	—			14			Member capital stock subject to outstanding redemption requests	—			—
MRCS	MRCS	23			28			MRCS	210			148

Total excess capital stock	Total excess capital stock	$	659		$	840		Total excess capital stock	757			593

Total regulatory capital stock								Total regulatory capital stock	$	2,664		$	2,496

Excess stock as a percentage of regulatory capital stock	Excess stock as a percentage of regulatory capital stock	29		%	37		%	Excess stock as a percentage of regulatory capital stock	28		%	24		%

The ~~decrease~~increase in ~~excess~~required capital stock during the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 resulted from ~~repurchases totaling $167 million~~elevated disbursements of short-term advances during the period. However, for those advances that matured by period end, the associated capital stock was reclassified to ~~comply with our capital plan as a result of our regulatory capital ratio exceeding 6.0% at January 31, 2022.~~excess stock.

Capital Distributions. The following table summarizes our weighted-average dividend rate and dividend payout ratio.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Weighted-average dividend rate (1)	Weighted-average dividend rate (1)	2.47	%	2.57	%	2.39	%	2.53	%	Weighted-average dividend rate (1)		4.84	%	2.31	%
Dividend payout ratio (2)	Dividend payout ratio (2)	41.10	%	81.59	%	43.15	%	59.42	%	Dividend payout ratio (2)		27.55	%	45.46	%

(1) Dividends paid in cash during the period (annualized) divided by the average amount of Class B stock eligible for dividends under our capital plan, ~~excluding~~including MRCS.

(2) Dividends paid in cash during the period divided by net income for the period.

Even though the dividend rate for the three months ended March 31, 2023 was significantly higher than the rate for the corresponding period in 2022, the dividend payout ratio was lower due to the significant increase in net income, which was partially due to a non-recurring gain on the extinguishment of debt.

On ~~July 28, 2022,~~April 27, 2023, our board of directors declared a cash dividend on Class B-2 activity-based stock at an annualized rate of ~~4.75%~~6.75% and on Class B-1 non-activity-based stock at an annualized rate of ~~1.25%~~2.25%, resulting in a spread between the rates of ~~3.50~~4.50 percentage points. The overall weighted-average annualized rate paid was ~~3.42%~~5.44%. The dividends were paid in cash on ~~July 29, 2022.~~April 28, 2023.

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Adequacy of Capital. We must maintain sufficient permanent capital to meet the combined credit risk, market risk and ~~operations~~operational risk components of the risk-based capital requirement. The following table presents our risk-based capital requirement in relation to our permanent capital at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 ($ amounts in millions).


Risk-Based Capital Components	Risk-Based Capital Components	June 30, 2022		December 31, 2021		Risk-Based Capital Components	March 31, 2023			December 31, 2022
Credit risk	Credit risk	$	160	$	155	Credit risk	$	192		$	203
Market risk	Market risk	777		684		Market risk	261			173
Operational risk	Operational risk	281		252		Operational risk	136			113

Total risk-based capital requirement	Total risk-based capital requirement	$	1,218	$	1,091	Total risk-based capital requirement	$	589		$	489

Permanent capital	Permanent capital	$	3,509	$	3,473	Permanent capital	$	4,017		$	3,782

Permanent capital as a percentage of required risk-based capital						Permanent capital as a percentage of required risk-based capital	682		%	773		%

The increase in our total risk-based capital requirement was primarily caused by an increase in the market risk component due to changes in the market environment, including changes in interest rates, CO bond-swap basis, volatility, option-adjusted spreads and balance sheet composition. The operational risk component is calculated as 30% of the credit and market risk components. Our permanent capital at ~~June 30, 2022~~March 31, 2023 remained well in excess of our total risk-based capital requirement.

Critical Accounting Estimates

A full discussion of our critical accounting estimates is included in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting ~~Policies and~~ Estimates in our ~~2021~~2022 Form 10-K.

Recent Accounting and Regulatory Developments

Accounting Developments. For a description of how recent accounting developments may impact our financial condition, results of operations or cash flows, see Notes to Financial Statements - Note 2 - Recently ~~Adopted and~~ Issued Accounting Guidance.

Legislative and Regulatory Developments.The following is a summary of significant regulatory actions and developments for the period covered by this report that have not been previously disclosed.

Consumer Financial Protection Bureau ("CFPB") Final Rule on Small Business Lending Data. On March 30, 2023, the CFPB issued a final rule requiring certain covered financial institutions to collect and report small business lending data. Small businesses are businesses with $5 million or less in gross annual revenue in the preceding fiscal year. We will be subject to data collection and reporting obligations if we have originated 100 or more covered credit transactions to small businesses in each of the two preceding calendar years. The earliest we could be subject to the rule’s obligations is October 1, 2024. We are assessing whether our activities will trigger compliance obligations and, if they will, what operational changes will be necessary as a result. While we are still analyzing the impact of the rule, we do not believe these changes will have a material effect on our financial condition or results of operations.

Finance Agency ~~Directorship Designations.~~Proposed Rule on Fair Lending, Fair Housing, and Equitable Housing Finance Plans. ~~The Director of~~On April 26, 2023, the Finance Agency ~~annually determines~~published a proposed rule that specifies requirements related to FHLBank compliance with fair housing and fair lending laws and prohibitions on unfair or deceptive acts or practices. The fair housing and fair lending laws would be the ~~size~~Fair Housing Act, the Equal Credit Opportunity Act, and those acts’ implementing regulations. Further, the proposed rule would outline the Finance Agency’s enforcement authority. The proposal is open for public comment through June 26, 2023. We are evaluating the potential impact of the ~~board of directors for each FHLBank, with the designation of member directorships based~~proposed rule on ~~the amount of FHLBank stock required to be held by members in each state. On June 1, 2022, the Finance Agency notified~~ us ~~that~~and our board of directors would be comprised of eight member directorships and seven independent directorships beginning January 1, 2023. This will be a reduction of one member directorship and one independent directorship. The following table provides further detail on the changes.

Director Composition June 30, 2022 January 1, 2023
Member directors:
Indiana 5 5
Michigan 4 3
Total member directors 9 8
Independent directors 8 7
Total directors 17 15

~~Finance Agency Director's Testimony to the House Financial Services Committee on a Planned Review of the FHLBank System.~~ On July 20, 2022, Finance Agency Director Thompson gave testimony to the House Financial Services Committee indicating that the Finance Agency intends to review the FHLBank System. Director Thompson's testimony indicated that the Finance Agency plans to engage a variety of stakeholders in addition to holding public listening sessions throughout the country as part of the review. The Director's testimony also indicated that the review would examine matters ranging from the FHLBank System's membership base, operational efficiency, and effectiveness to more foundational questions about mission, purpose and organization. At this time, it is not possible to determine when these events will occur, whether any actions will result from these events, and how these events will ultimately impact us or the FHLBank System as a whole.

operations.

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~~Proposed Rule Implementing the Adjustable Interest Rate (LIBOR) Act~~. On July 28, 2022, the Board of Governors of the Federal Reserve System ("Board") published a proposed rule with a comment deadline of August 29, 2022 that would implement the Adjustable Interest Rate (LIBOR) Act. The proposed rule would provide default rules for certain contracts ("covered contracts") that: reference LIBOR, are governed by U.S. law, do not mature on or before the LIBOR replacement date, and lack adequate provisions to identify a replacement rate for LIBOR. The LIBOR replacement date is currently July 3, 2023. The proposed rule identifies separate Board-selected replacement rates for derivatives transactions, covered GSE contracts, and all other covered contracts. The proposed rule defines covered GSE contracts to include FHLBank advances. We are reviewing the proposed rule, however it is not possible to determine the extent to which the rule will be adopted as proposed and, as a result, the impact the final rule may have on us.

~~Amendment to FINRA Rule 4210: Margining of Covered Agency Transactions.~~ On July 29, 2022, FINRA filed a proposed rule with the SEC that will extend the implementation date of its amendments to FINRA Rule 4210 delaying the effectiveness of margining requirements for covered agency transactions from October 26, 2022 until at least April 24, 2023. Once the margining requirements are effective, we may be required to collateralize our transactions that are covered agency transactions, which include TBAs. These collateralization requirements could have the effect of reducing the overall profitability of engaging in covered agency transactions, including TBAs.

Risk Management

We have exposure to a number of risks in pursuing our business objectives. These risks may be broadly classified as market, credit, liquidity, operational, and business. Market risk is discussed in Item 3. Quantitative and Qualitative Disclosures about Market Risk. For more information, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Management in our ~~2021~~2022 Form 10-K.

Credit Risk Management. We face credit risk on advances and other credit products, investments, mortgage loans, derivative financial instruments, and AHP grants.

Advances and Other Credit Products.

Concentration. Our credit risk is magnified due to the concentration of advances in a few borrowers. As of ~~June 30, 2022,~~March 31, 2023, our top borrower held 13% of total advances outstanding, at par, and our top five borrowers held ~~47%~~40% of total advances outstanding, at par. ~~As a result~~Because of this concentration in advances, we perform frequent credit and collateral reviews on our largest borrowers. In addition, we regularly analyze the implications to our financial management and profitability if we were to lose the business of one or more of these borrowers.

Investments. We are also exposed to credit risk through our investment portfolio. Our policies restrict the acquisition of investments to high-quality, short-term money market instruments and high-quality long-term securities.

The following table presents the unsecured investment credit exposure to private counterparties, categorized by the domicile of the counterparty's ultimate parent, based on the lowest of the counterparty's NRSRO long-term credit ratings, stated in terms of the S&P equivalent. The table does not reflect the foreign sovereign government's credit rating ($ amounts in millions).


June 30, 2022		AA		A		Total
									March 31, 2023
Country								Country	AA		A		Total
Domestic	Domestic	$	—	$	910	$	910	Domestic	$	—	$	581	$	581
Australia	Australia	1,110		—		1,110		Australia	1,275		—		1,275
Canada	Canada	—		801		801		Canada	—		1,088		1,088

Netherlands								Netherlands	—		350		350

Total unsecured credit exposure	Total unsecured credit exposure	$	1,110	$	1,711	$	2,821	Total unsecured credit exposure	$	1,275	$	2,019	$	3,294

~~A Finance Agency regulation provides that~~Other Investment Securities. Our long-term investments include MBS guaranteed by the ~~total amount of our investments in~~housing GSEs (Fannie Mae and Freddie Mac), other U.S. obligations - guaranteed MBS ~~calculated using amortized historical cost excluding~~(Ginnie Mae), and debentures issued by Fannie Mae, Freddie Mac, the ~~impact of certain derivatives adjustments, must not exceed 300% of our total regulatory capital, as of~~TVA and the day we purchase the securities, based on the capital amount most recently reported to the Finance Agency. If our outstanding investments in MBS exceed the limitation at any time, but were in compliance at the time we purchased the investments, we would not be considered out of compliance with the regulation, but we would not be permitted to purchase additional investments in MBS until these outstanding investments were within the limitation. Federal Farm Credit Banks.

Generally, our goal is to maintain ~~these~~ investments in MBS near the 300% regulatory limit in order to enhance earnings and capital for our members and diversify our revenue stream. At ~~At June 30, 2022,~~March 31, 2023, these investments totaled ~~293%~~288% of total regulatory capital.

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The following table presents the carrying values of our investments, excluding accrued interest, grouped by credit rating and investment category. Applicable rating levels are determined using the lowest relevant long-term rating from S&P and Moody's, each stated in terms of the S&P equivalent. Rating modifiers are ignored when determining the applicable rating level for a given ~~counterparty or investment.~~counterparty. Amounts reported do not reflect any subsequent changes in ratings, outlook, or watch status ($ amounts in millions).


June 30, 2022		AA			A			Total
												March 31, 2023
Investment											Investment	AA			A			Unrated (1)			Total
Short-term investments:	Short-term investments:										Short-term investments:
Interest-bearing deposits	Interest-bearing deposits	$	—		$	325		$	325		Interest-bearing deposits	$	—		$	581		$	—		$	581
Securities purchased under agreements to resell	Securities purchased under agreements to resell	4,500			—			4,500			Securities purchased under agreements to resell	500			4,750			375			5,625
Federal funds sold	Federal funds sold	1,110			1,386			2,496			Federal funds sold	1,275			1,438			—			2,713
Total short-term investments	Total short-term investments	5,610			1,711			7,321			Total short-term investments	1,775			6,769			375			8,919

Trading securities:	Trading securities:										Trading securities:
U.S. Treasury obligations	U.S. Treasury obligations	4,039			—			4,039			U.S. Treasury obligations	395			—			—			395
Total trading securities	Total trading securities	4,039			—			4,039			Total trading securities	395			—			—			395

Other investment securities:	Other investment securities:										Other investment securities:
U.S. Treasury obligations	U.S. Treasury obligations	2,106			—			2,106			U.S. Treasury obligations	5,080			—						5,080
GSE and TVA debentures	GSE and TVA debentures	2,086			—			2,086			GSE and TVA debentures	1,874			—			—			1,874
GSE MBS	GSE MBS	7,360			—			7,360			GSE MBS	7,593			—			—			7,593
Other U.S. obligations - guaranteed RMBS	Other U.S. obligations - guaranteed RMBS	2,522			—			2,522			Other U.S. obligations - guaranteed RMBS	3,332			—			—			3,332
Total other investment securities	Total other investment securities	14,074			—			14,074			Total other investment securities	17,879			—			—			17,879

Total investments, carrying value	Total investments, carrying value	$	23,723		$	1,711		$	25,434		Total investments, carrying value	$	20,049		$	6,769		$	375		$	27,193

Percentage of total	Percentage of total	93		%	7		%	100		%	Percentage of total	74		%	25		%	1		%	100		%

(1) Although the counterparty is unrated, the underlying collateral supporting these investments are U.S. Treasury obligations with a rating of AA.

Mortgage Loans Held for Portfolio. The following table presents the changes in the LRA ~~for original MPP and Advantage MPP~~ ($ amounts in millions).

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022
LRA Activity Original Advantage Total Original Advantage Total
Liability, beginning of period $ 4 $ 232 $ 236 $ 4 $ 227 $ 231
Additions — 4 4 — 9 9
Claims paid — — — — — —
Distributions to PFIs (2) (3) (5) (2) (3) (5)
Liability, end of period $ 2 $ 233 $ 235 $ 2 $ 233 $ 235



LRA Activity	Three Months Ended March 31, 2023
Liability, beginning of period	$	235
Additions	2
Claims paid	—
Distributions to Participating Financial Institutions	(1)
Liability, end of period	$	236

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Derivatives. The following table presents key information on derivative positions with counterparties on a settlement date basis using the lower credit rating from S&P and Moody's, stated in terms of the S&P equivalent ($ amounts in millions).


June 30, 2022		Notional Amount		Net Estimated Fair Value Before Collateral		Cash Collateral Pledged To (From) Counterparties		Net Credit Exposure
											March 31, 2023
Counterparty and Credit Rating										Counterparty and Credit Rating	Notional Amount		Net Estimated Fair Value Before Collateral		Cash Collateral Pledged To (From) Counterparties		Net Credit Exposure
Non-member counterparties:	Non-member counterparties:									Non-member counterparties:
Asset positions with credit exposure	Asset positions with credit exposure									Asset positions with credit exposure

Uncleared derivatives - A	Uncleared derivatives - A	$	89	$	1	$	—	$	1	Uncleared derivatives - A	$	192	$	8	$	(8)	$	—

Liability positions with credit exposure	Liability positions with credit exposure									Liability positions with credit exposure

Uncleared derivatives - A	Uncleared derivatives - A	31,712		(1,012)		1,088		76		Uncleared derivatives - A	14,554		(402)		409		7
Uncleared derivatives - BBB		2,801		(102)		111		9

Cleared derivatives (1)	Cleared derivatives (1)	26,918		(71)		311		240		Cleared derivatives (1)	29,727		(36)		519		483
Total derivative positions with credit exposure to non-member counterparties	Total derivative positions with credit exposure to non-member counterparties	61,520		(1,184)		1,510		326		Total derivative positions with credit exposure to non-member counterparties	44,473		(430)		920		490
Total derivative positions with credit exposure to member institutions (2)	Total derivative positions with credit exposure to member institutions (2)	19		—		—		—		Total derivative positions with credit exposure to member institutions (2)	48		—		—		—
Subtotal - derivative positions with credit exposure	Subtotal - derivative positions with credit exposure	61,539		$	(1,184)	$	1,510	$	326	Subtotal - derivative positions with credit exposure	44,521		$	(430)	$	920	$	490
Derivative positions without credit exposure	Derivative positions without credit exposure	3,416								Derivative positions without credit exposure	31,225

Total derivative positions	Total derivative positions	$	64,955							Total derivative positions	$	75,746

(1) Represents derivative transactions cleared by two Clearinghouses, ~~(one~~each rated ~~AA- and the other unrated). The net credit exposure to the Clearinghouse rated AA- is $237 million. The net credit exposure to the unrated Clearinghouse is $3 million.~~AA-.

(2) Includes MDCs from member institutions under our MPP.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Measuring Market Risks

To evaluate market risk, we utilize multiple risk measurements, including ~~VaR,~~Value-at-Risk ("VaR"), duration of equity, convexity, changes in MVE, duration gap, and earnings at risk. Periodically, we conduct stress tests to measure and analyze the effects that extreme movements in the level of interest rates and the shape of the yield curve would have on our risk position.

Key Metrics. The following table presents certain market and interest-rate metrics under different interest-rate scenarios ($ amounts in millions).


June 30, 2022		Down 200 (1)			Down 100 (1)			Base			Up 100			Up 200
																		March 31, 2023
Key Metric																	Key Metric	Down 200			Down 100			Base			Up 100			Up 200
MVE	MVE	$	3,375		$	3,352		$	3,311		$	3,275		$	3,249		MVE	$	3,625		$	3,639		$	3,646		$	3,654		$	3,655
Percent change in MVE from base	Percent change in MVE from base	1.9		%	1.2		%	—		%	(1.1)		%	(1.9)		%	Percent change in MVE from base	(0.6)		%	(0.2)		%	—		%	0.2		%	0.3		%
MVE/book value of equity	MVE/book value of equity	95.8		%	95.2		%	94.0		%	93.0		%	92.2		%	MVE/book value of equity	91.9		%	92.3		%	92.5		%	92.7		%	92.7		%
Duration of equity	Duration of equity	0.3			1.0			1.2			1.0			0.7			Duration of equity	(0.6)			(0.2)			(0.2)			(0.2)			0.1

December 31, 2021
MVE $ 3,599 $ 3,485 $ 3,530 $ 3,556 $ 3,543
Percent change in MVE from base 2.0 % (1.3) % — % 0.7 % 0.4 %
MVE/book value of equity 99.8 % 96.6 % 97.9 % 98.6 % 98.2 %
Duration of equity 0.9 1.7 (1.3) (0.1) 0.6

~~(1)~~ Given the low interest rates in the short-to-medium term points of the yield curves, downward rate shocks are constrained to prevent rates from becoming negative. During periods of extremely low interest rates, the Finance Agency requires that FHLBanks employ a constrained down-shock analysis to limit the evolution of forward interest rates to positive non-zero values. Since our market risk model imposes a positive non-zero boundary on post-shock interest rates, no additional calculations are necessary in order to meet this Finance Agency requirement when applicable.


	December 31, 2022
Key Metric	Down 200			Down 100			Base			Up 100			Up 200
MVE	$	3,416		$	3,431		$	3,437		$	3,441		$	3,439
Percent change in MVE from base	(0.6)		%	(0.2)		%	—		%	0.1		%	0.1		%
MVE/book value of equity	90.9		%	91.4		%	91.5		%	91.6		%	91.6		%
Duration of equity	(0.6)			(0.3)			(0.1)			(0.1)			0.2

The changes in those key metrics from December 31, ~~2021~~2022 resulted primarily from the ~~changes~~change in market ~~values~~value of the Bank's assets and liabilities in response to changes in the market environment, changes in portfolio composition and our hedging strategies.

Duration Gap. The base case duration gap at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was ~~0.03%~~(0.04)% and ~~(0.11)~~(0.03)% , respectively.

For information about our use of derivative hedges, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk - Use of Derivative Hedges in our ~~2021~~2022 Form 10-K.

Replacement of the LIBOR Benchmark Interest Rate

We continue to implement our transition plan that has reduced our exposure to the ~~risks~~transition arising from the cessation of the publication of LIBOR and has the flexibility to evolve with market developments and standards, member needs, and guidance provided by the issuers of Agency securities. As a result, we do not expect the replacement of LIBOR by June 30, 2023 to have a material adverse impact on the Bank's business, results of operations or financial condition.

For more information, see Item 1A. Risk Factors - Changes in Response to the Replacement of the LIBOR Benchmark Interest Rate Could Adversely Affect Our Business, Financial Condition and Results of Operations. and Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our ~~2021~~2022 Form 10-K.

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The following table presents our LIBOR-rate indexed financial instruments outstanding at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 by year of maturity ($ amounts in millions).


													March 31, 2023
LIBOR-Indexed Financial Instruments	LIBOR-Indexed Financial Instruments	Year of Maturity										LIBOR-Indexed Financial Instruments	Through June 30, 2023		Thereafter		Total		% of Total Outstanding
June 30, 2022		2022		Through June 30, 2023		Thereafter		Total		% of Total Outstanding
Assets:	Assets:											Assets:
Advances, par value (1)	Advances, par value (1)	$	24	$	48	$	2,240	$	2,312	7	%	Advances, par value (1)	$	34	$	1,125	$	1,159	3	%
MBS, par value (2)	MBS, par value (2)	—		—		2,306		2,306		22	%	MBS, par value (2)	—		1,927		1,927		18	%
Total	Total	$	24	$	48	$	4,546	$	4,618			Total	$	34	$	3,052	$	3,086

Interest-rate swaps - receive leg, notional (2):	Interest-rate swaps - receive leg, notional (2):											Interest-rate swaps - receive leg, notional (2):
Cleared	Cleared	$	648	$	760	$	2,196	$	3,604	13	%	Cleared	$	379	$	2,187	$	2,566	9	%
Uncleared	Uncleared	105		314		3,308		3,727		10	%	Uncleared	54		2,248		2,302		5	%
Total	Total	$	753	$	1,074	$	5,504	$	7,331			Total	$	433	$	4,435	$	4,868

Liabilities:	Liabilities:											Liabilities:

Interest-rate swaps - pay leg, notional (2):	Interest-rate swaps - pay leg, notional (2):											Interest-rate swaps - pay leg, notional (2):
Cleared	Cleared	$	2,230	$	2,200	$	300	$	4,730	18	%	Cleared	$	850	$	300	$	1,150	4	%

Total	Total	$	2,230	$	2,200	$	300	$	4,730			Total	$	850	$	300	$	1,150

Other derivatives, notional:	Other derivatives, notional:											Other derivatives, notional:
Interest-rate caps held (2)	Interest-rate caps held (2)	$	—	$	—	$	611	$	611	100	%	Interest-rate caps held (2)	$	—	$	611	$	611	75	%


December 31, 2021
													December 31, 2022
LIBOR-Indexed Financial Instruments												LIBOR-Indexed Financial Instruments	Through June 30, 2023		Thereafter		Total		% of Total Outstanding
Assets:	Assets:											Assets:
Advances, par value (1)	Advances, par value (1)	$	134	$	48	$	2,259	$	2,441	9	%	Advances, par value (1)	$	48	$	1,230	$	1,278	3	%
MBS, par value (2)	MBS, par value (2)	—		—		2,669		2,669		25	%	MBS, par value (2)	—		2,018		2,018		18	%
Total	Total	$	134	$	48	$	4,928	$	5,110			Total	$	48	$	3,248	$	3,296

Interest-rate swaps - receive leg, notional (2):	Interest-rate swaps - receive leg, notional (2):											Interest-rate swaps - receive leg, notional (2):
Cleared	Cleared	$	1,366	$	767	$	2,336	$	4,469	20	%	Cleared	$	760	$	2,188	$	2,948	10	%
Uncleared	Uncleared	320		314		6,176		6,810		21	%	Uncleared	64		2,431		2,495		6	%
Total	Total	$	1,686	$	1,081	$	8,512	$	11,279			Total	$	824	$	4,619	$	5,443

Liabilities:	Liabilities:											Liabilities:

Interest-rate swaps - pay leg, notional (2):	Interest-rate swaps - pay leg, notional (2):											Interest-rate swaps - pay leg, notional (2):
Cleared	Cleared	$	3,134	$	1,150	$	—	$	4,284	19	%	Cleared	$	2,200	$	300	$	2,500	9	%

Total	Total	$	3,134	$	1,150	$	—	$	4,284			Total	$	2,200	$	300	$	2,500

Other derivatives, notional:	Other derivatives, notional:											Other derivatives, notional:
Interest-rate caps held (2)	Interest-rate caps held (2)	$	15	$	—	$	611	$	626	100	%	Interest-rate caps held (2)	$	—	$	611	$	611	100	%

(1) Year of maturity on our advances is based on redemption term.

(2) Year of maturity on our MBS, interest-rate swaps and interest-rate caps is based on contractual maturity. The actual maturities on MBS will likely differ from contractual maturities as borrowers have the right to prepay their obligations with or without prepayment fees.

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Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We are responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in our reports filed under the Exchange Act is: (a) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms; and (b) accumulated and communicated to our management, including our principal executive officer, principal financial officer, and principal accounting officer, to allow timely decisions regarding required disclosures.

As of ~~June 30, 2022,~~March 31, 2023, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (the principal executive officer), Chief Financial Officer (the principal financial officer) and Chief Accounting Officer (the principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. In making this ~~evaluation,~~assessment, our management used the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were effective as of ~~June 30, 2022.~~March 31, 2023.

Internal Control Over Financial Reporting

Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting, as defined in rules 13a-15(f) and 15(d)-15(f) of the Exchange Act, that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls. We do not expect that our disclosure controls and procedures and other internal controls will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can only be reasonable assurance that any design will succeed in achieving its stated goals under all potential future conditions. Additionally, over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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Part II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

In the ordinary course of business, we may from time to time become a party to lawsuits involving various business matters. We are unaware of any lawsuits presently pending which, individually or in the aggregate, could have a material effect on our financial condition or results of operations.

Item 1A. RISK FACTORS

There have been no material changes in the risk factors described in Item 1A. Risk Factors of our ~~2021~~2022 Form 10-K.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

None.

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Item 6. EXHIBITS

~~Exhibit Index~~EXHIBIT INDEX


Exhibit Number						Description



10.1*+						Federal Home Loan Bank of Indianapolis Incentive Plan, effective January 1, 2012, as updated on April 28, 2022, effective as of January 1, 2022, incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K (Commission File No. 000-51404) filed on May 3, 2022

31.1						Certification of the President - Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of the Executive Vice President - Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.3						Certification of the Senior Vice President - Chief Accounting Officer pursuant to Section 302 of the Sarbanes - Oxley Act of 2002

32						Certification of the President - Chief Executive Officer, Executive Vice President - Chief Financial Officer, and Senior Vice President - Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS						XBRL Instance Document

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB						XBRL Taxonomy Extension Label Linkbase Document

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

104						Cover Page Interactive Data File (formatted as inline XBRL)

* These documents are incorporated by reference.

~~+ Management contract or compensatory plan or arrangement.~~

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	FEDERAL HOME LOAN BANK OF INDIANAPOLIS

~~August 10, 2022~~May 11, 2023	By:	/s/ K. LOWELL SHORT, JR.
	Name:	K. Lowell Short, Jr.
	Title:	Senior Vice President - Chief Accounting Officer

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By Date	Traditional		Mortgage Loans		Total
June 30, 2022	$	56,536,621	$	7,729,642	$	64,266,263
December 31, 2021	52,388,469		7,616,134		60,004,603



	Three Months Ended June 30,				Six Months Ended June 30,

Reconciliation of Net Income	2022		2021		2022		2021
GAAP net income	$	32.3	$	17.1	$	60.9	$	47.0
Adjustments to exclude:
Fair-value hedging (gains) losses (1)	6.8		5.6		4.8		(13.0)
Amortization/accretion of (gains) losses on ineffective and discontinued fair-value hedging relationships (2)	17.3		7.5		34.1		12.9
Trading (gains) losses, net of economic hedging gains (losses) (3)	(0.8)		10.1		(0.7)		19.1
Net unrealized (gains) losses on other economic hedges	(1.5)		0.1		0.3		0.5
Interest expense on MRCS	0.3		0.9		0.5		2.0
Total adjustments	22.1		24.2		39.0		21.5

AHP assessments on adjustments	(2.2)		(2.3)		(3.8)		(1.9)

Adjusted net income (non-GAAP measure)	$	52.2	$	39.0	$	96.1	$	66.6


	Three Months Ended June 30,				Six Months Ended June 30,
Earnings Components of Trading Securities	2022		2021		2022		2021
Net interest income (1)	$	1	$	14	$	5	$	28

Other income:
Net unrealized gains (losses)	(11)		(13)		(18)		(29)
Net realized gains (losses)	(3)		(1)		(20)		2
Net interest settlements on derivatives	2		(2)		—		(8)
Change in fair value of derivatives	17		3		41		8

Other income (loss), net	5		(13)		3		(27)

Net impact of trading securities on income before assessments	$	6	$	1	$	8	$	1



Director Composition	June 30, 2022	January 1, 2023
Member directors:
Indiana	5	5
Michigan	4	3
Total member directors	9	8
Independent directors	8	7

Total directors	17	15


December 31, 2021
MVE	$	3,599		$	3,485		$	3,530		$	3,556		$	3,543
Percent change in MVE from base	2.0		%	(1.3)		%	—		%	0.7		%	0.4		%
MVE/book value of equity	99.8		%	96.6		%	97.9		%	98.6		%	98.2		%
Duration of equity	0.9			1.7			(1.3)			(0.1)			0.6