Agency Academics for GIOA Members

FHLBank Overview and

Debt Funding Programs

March 2011

2

FORWARD-LOOKING STATEMENTS

Statements contained in this presentation, including statements describing the objectives, projections, estimates, or future predictions of the FHLBanks and the Office of Finance, may be “forward-looking statements.” By their nature, these forward-

looking statements are subject to risks and uncertainties related to the operations of the FHLBanks and the business environment, all of which are difficult to predict and many of which are beyond the control of the FHLBanks. These risks and uncertainties could cause actual results to differ materially from those expressed or implied in forward-looking statements or

could affect the extent to which a particular objective, projection, estimate, or prediction is realized. Such risks and uncertainties include the following: changes in interest rates, housing prices, employment rates and the general economy; the

size and volatility of the residential mortgage market; demand for FHLBank advances; volatility of market prices, rates, and indices or other factors, including natural disasters, that could affect the value of investments or collateral held by the FHLBanks

as security; political events, including legislative, regulatory, judicial or other developments that affect the FHLBanks, their members, counterparties and/or investors in the consolidated obligations of the FHLBanks; competitive forces, including other

sources of funding available to FHLBank members, other entities borrowing funds in the capital markets, and the ability to attract and retain skilled individuals; the pace of technological change and the ability to develop and support technology and

information systems; changes in investor demand for consolidated obligations and/or the terms of interest-rate exchange agreements and similar agreements; timing and volume of market activity; volatility of reported results due to changes in the fair value of certain assets and liabilities; the ability to introduce new FHLBank products and services and successfully manage the

risks associated with those products and services; risk of loss arising from litigation; and inflation/deflation. Investors are encouraged to consider these and other risks and uncertainties that are discussed in periodic combined financial reports posted on the OF website, www.fhlb-of.com, and in reports filed by each FHLBank with the Securities and Exchange Commission. Any

duty to update is disclaimed.

This is not an offer to sell. FHLBank debt is not an obligation of or guaranteed by the United States and may not be offered or sold in any jurisdiction requiring its

registration. No recommendation is made concerning the securities described. Please refer to the offering documents before purchasing these securities.

This data has not been audited and has been prepared for informational purposes only. While it is believed to be correct, accuracy cannot be guaranteed.

3

How the FHLB System Works

MembersInvestors

FHLBanks Collateral

Advances

Debt Securities

Issuance Proceeds

IssuanceProceeds

The 12 FHLBanks are government-sponsored

enterprises (GSEs) organized under an act of Congress

(Federal Home Loan Bank Act of 1932)

FHLBanks serve the general public by providing readily available,

low-cost funding to nearly 8,000 members, thereby increasing the availability of credit

for residential mortgage lending and investment in housing and community

development

The FHLBanks fund their operations principally

through the sale of debt Securities through the Office of

Finance

Homeowners

Mortgage Lending &

Community Investment

Investment Capital

Office of Finance

Dealers

4

All Senior Debt is Joint & Several

The twelve FHLBanks are linked by a common mission to support housing, a shared safety and soundness regulator (FHFA), and a multilateral responsibility to repay debt obligations

All debt securities issued through the Office of Finance are joint and several obligations of the entire FHLBank System

Standard & Poor’s Moody’s

Long-term Senior Debt

RatingAAA Aaa

Short-term Senior Debt

RatingA-1+ P-1

HAWAII

ALASKA

Atlanta

Cincinnati

Dallas

Des Moines

Indianapolis

PittsburghSan Francisco

Seattle

U.S. TerritoriesPuertoRicoVirginIslands

GuamAmericanSamoa

Northern Mariana Islands

Topeka

Chicago

Boston

New York

5

The FHLBanks are Part of the Solution

$500

$331

$64

Source: Historical Combined Financial Reports – subject to rounding

YE00 YE01 YE02 YE03 YE04 YE05 YE06 YE07 YE08 YE09 3Q10 -

200

400

600

800

1,000

1,200

1,400

MPF/MPP Investment & Liquidity Securities Advances

$ in

Bill

ions

~ Advances were 55% of Total Assets at 3Q10 ~

Scalable Balance Sheet Allowed the FHLBanks to Rapidly Expand Lending Despite a Severe, Systemic Contraction of Credit

The FHLBanks provided $372 billion in liquidity during the

credit crisis

6

Total Debt Outstanding

Source: FHLBanks Office of Finance – by settlement date – as of YE and subject to rounding

Debt Outstanding has Declined, Reflecting Trends in Advances

2006 2007 2008 2009 2010* 20110

200

400

600

800

1,000

1,200

1,400

$641

$875$929

$631

$500

Globals Bullets/TAPs FRNs Callable/Structured DNs Advances

$ in

bil

lio

ns

$932

$1,252$1,189

$953

$775 billion as of

2/28/11$797

Debt Outstanding ---------------------------------

Advances Outstanding

$15------------

$21

$236------------

$234

$63------------

$54

-$320------------

-$298

-$135------------

-$131

-$14------------

N/A

YoY Net Change (in billions)

*Advances as of 3Q10

7

Term Debt Issuance

Source: FHLBanks Office of Finance – by settlement date – as of 2/28/11 and subject to rounding

2006 2007 2008 2009 2010 20110

100

200

300

400

500

600

42 38 45 39 20

106 114

177 168

129

17

95

174

103

82

158

249

159

196 302

Callables/Structured

FRNs

Bullets/TAPs

Globals

$ i

n b

illi

on

s

$51 billion issued

during Jan - Feb

Issuance Tracks Advances & Adapts to Shifts in Investor Preference

Total Term DNs Issued

(in billions)

$1,346 $1,700 $2,732 $1,486 $1,194 $186 billion

issued during Jan - Feb

8

Debt Issuance is Flexible & Adaptable

Source: FHLBanks Office of Finance – by settlement date – as of 2/28/11 and subject to rounding

More “Pull” Than “Push”

Reverse Inquiry Accounts for Approximately 87% of Term Debt Issuance (Thru 4Q10)

Crisis Driven Flight-to-Quality

Short-Term Debt* as a % of Total Debt Outstanding

*All debt (incl. DNs) outstanding with remaining maturity ≤ 397 days

Flexible Issuance Model is Heavily Geared Toward Investor Reverse Inquiry

($ in millions)

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

0

50,000

100,000

150,000

200,000

250,000

Auction Rev Inquiry*

*Includes syndicated Globals

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11

0%

10%

20%

30%

40%

50%

60%

70%

80%

9

Full Range of Debt Products

FHLBanks use multiple debt issuance programs to fund the balance sheet and respond to investor needs

Programmatic calendar issuance of syndicated

“benchmark” size bullets

Reverse inquiry process extensively use for

callable, floating rate, and structured note issuance

Auction method used to distribute bullet (TAP) and American option callable

securities

Daily window postings and twice-weekly auctions of

set maturity buckets

Globals

Medium-Term Notes (MTNs)

Discount Notes

10

Discount Notes

Source: FHLBanks Office of Finance – by settlement date – as of 2/28/11 and subject to rounding

2007 2008 2009 2010 2011$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

1- to 3-Weeks 1- to 3-Month 4- to 6-Month 7- to 9-Month

10- to 12-Month

$416 bil-lion

$71 billion sold during Jan - Feb

$848 bil-lion

$1,878 bil-lion

$788 bil-lion

Window Sales by Maturity($ in millions)

2007 2008 2009 2010 2011$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$1,000,000

4 Week 9 Week 13 Week 26 Week

$778 bil-lion

$115 billion auctioned dur-ing Jan -

Feb

$639 bil-lion

$854 bil-lion

$913 bil-lion

Auction Sales by Maturity($ in millions)

Active window program with maturity and settlement flexibility and twice weekly auction program for 1-, 2-, 3-, and 6-month maturities

19 member selling group (and broader reallowance group) Term DNs represent approximately 23% of total debt outstanding and had an outstanding WAM of 43 days as of

2/28/11; over 80% of DN issuance are overnight maturities

11

Discount Note Spreads

Source: FHLBank Office of Finance – as of 2/28/11 and subject to rounding

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11-250

-200

-150

-100

-50

0

50

Spread between HL ON Rate & Agency RP (bps)

Current: -14.0Mean: -20.3St Dev: 22.4

O/N FHLB DN Rate vs. Agency RP (in bps)

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11-400

-300

-200

-100

0

100

200

300

Spread between 3MO LIBOR and 3MO DN Rate (bps)

Spread between 3MO TSY & 3MO DN Rate (bps)

vs. LIBORCurrent: -18.0Mean: -49.0St Dev: 41.0

vs. BillsCurrent: flatMean: 30.0St Dev: 42.4

3-Mo FHLB DN Rate vs. 3-Mo T-Bill & 3-Mo LIBOR(in bps)

12

Floaters and Short Bullets (3 years and in)

FHLBank short duration needs reflected in short maturity issuance

About 37% of bonds issued in 2010 mature within 3 years

FHLBanks communicate price targets to dealers each morning (≤18-mo)

2- to 3-year maturities generally issued via Global program or TAP auction

Source: FHLBanks Office of Finance - *bonds with 3 years or less to maturity

Short Bullets $114,73

4

Single Index

Floaters

$82,069

2010 Short Bullet and Single Index Floater Issuanceby Type ($ in Millions)

12 month

s $88,352

> 12 months to 24 months $87,238

> 24 months

to 36 months $21,213

2010 Short Bullet and Single Index Floater Issuance by Maturity ($ in Millions)

13Source: FHLBanks Office of Finance – by settlement date – Mar 2010 thru Feb 2011 and subject to rounding

Callable Debt

FHLBanks are a Significant Issuer of Callables

Benefits to the FHLBanks

Essential component of core funding for both advances and investment portfolios

Provides a natural hedge to embedded optionality in MBS investments

Benefits to Investors

Flexible reverse inquiry process delivers a high degree of customization

Callables offer enhanced yield over comparable bullets and allow investors to express views on volatility and/or the yield curve without sacrificing credit quality

<3 Months74%

3-6 Months13%

6-12 Months10%

>1 Year3%

American19%

Bermudan71%

European8%

Canary2%

Issuance by

Option Type

Issuance by

Lockout

14

Negotiated Callable Bonds

An underwriter proposes a specific structure to the FHLBanks

Generally have associated interest rate swaps

Highly tailored in response to investor and dealer demand

Announced on market screens at dealer discretion and posted at www.fhlb-of.com (Debt Securities … New Bond Issuance)

Source: FHLBanks Office of Finance

15

Sequence of events for a swapped transaction: Dealer assesses market demand; dealer canvasses firms that enter into

swaps with individual FHLBanks looking for best price

If swap pricing and market demand offer funding that meet FHLBank targets, bond/swap package is proposed electronically to a FHLBank

If FHLBanks accept the trade, final pricing is established via conference call

Swapped Bond Process

Office of Finance FHLBank

UnderwriterSwap

Counterparty

Investor

16

Callable Step-Up Bonds

Motivation for issuance and process identical to swapped callables

Associated interest rate enables tailoring to investor/dealer demand

Reflects steep yield curve environment (2- to 10-yr at 270-285 bps)

Defensive structure in a rising rate environment

Step-ups accounted for 31% of callable issuance in 2010

Over 90% of Structured bonds are step-up callables

Minimum denominations are $100,000

Source: FHLBanks Office of Finance

17

Callable Auction Program

An FHLBank needs for a specific duration/convexity profile to funding the purchase of an asset (e.g. MBS)

Hedging with a mix of callable and non-callable debt

Bonds issued through an auction typically do not have an associated interest rate swap

Process begins with underwriters assessing market for various structures and providing feedback to the FHLBanks

FHLBanks compare bond indications with asset pricing; matching market demand with portfolio opportunities

Source: FHLBanks Office of Finance

18

Auctioned Callable Bonds

American-style options auctioned (up to) once daily

Auctioned through defined dealer bidding group of 24 firms

Announced at www.fhlbtradedesk.com at 9:45am ET

Real-time posting of bid details and results

19

TAP Program Created to coordinate and standardize issuance of non-Global bullet debt New securities issued on a quarterly basis and then re-opened as frequently as daily throughout the 90-

day cycle via a 20 dealer selling group TAPs typically offer liquidity-adjusted yield over comparable FHLB Globals and other agency benchmarks

Source: FHLBanks Office of Finance – as of 1/31/11 and subject to rounding

Recent TAP Issuance Cycles($ in billions)

TAP vs. Global Spreads (in bps)

Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10

-20

-15

-10

-5

0

5

10

15

20

25

30

35

40

45

50

55

60

2yr 3yr

2-YrMean: 8.9St Dev: 9.5

3-YrMean: 12.3St Dev: 12.6

Aug-Oct0

7

Nov-Jan0

8

Feb-Apr0

8

May-

Jul08

Aug-Oct0

8

Nov-Jan0

9

Feb-Apr0

9

May-

Jul09

Aug-Oct0

9

Nov09-

Jan10

Feb-Apr1

0

May-

Jul10

Aug-Oct1

0

Nov-Jan1

1

0

2

4

6

8

10

12

14

16

18

20

>5 Years

2 to 5 Years

Up to 2 Years

20

TAP Auctions

Re-openings of most liquid on-the-run TAPs

Auctioned through defined dealer bidding group of 20 firms

Announced at www.fhlbtradedesk.com at 11:00am ET

Real-time posting of bid details and results

21

Global Bond Program

2011 Global Calendar

Q1January 18

PassFebruary 15

$3 billion 2-yrMarch 16

Q2 April 13 May 16June 8

Q3 July 19 August 10 September 7

Q4 October 12 November 9 December 7

Source: FHLBanks Office of Finance

FHLBanks announce the maturity, size, and dealer selection of Globals on predetermined dates

New Globals are issued through dealer syndicates during multi-day distribution periods

Re-openings issued via competitive auction

Large minimum sizes and standardized coupon features used to facilitate liquidity

$20.25 billion in new supply issued over five new transactions and five re-openings during 2010

Globals announced on market screens; investors should contact dealers in syndicate with interest

22

Bullet Issues – March 2010 through February 2011

Global Bond Distribution

By Region By Investor Type

Source: FHLBanks Office of Finance – subject to rounding – “Other” may include investors not specified by underwriters

US57%

Asia17%

Europe5%

Other/ Un-

known21%

Fund Managers

37%

Central Banks32%

Banks12%

Pension/ Insurance

6%

State/Local4%

Other/ Unknown

9%

23

Global Bond Spreads

Source: FHLBanks Office of Finance – as of 1/31/11

2-Yr Global Spread (in bps) 3-Yr Global Spread (in bps)

2-Yr

vs UST vs 3mo LIBOR

Mean 43.7 -10.9

Min -7.3 -39.6

Max 203.0 102.7

St. Dev. 38.8 17.2

3-Yr

vs UST vs 3mo LIBOR

48.6 -9.1

-0.10 -32.67

187.5 82.7

35.9 17.2

Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10-50

0

50

100

150

200

250

-60

-40

-20

0

20

40

60

80

100

120Spread to Treasury (LHS)

Asset Swap Spread (RHS)

Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10-50

0

50

100

150

200

-60

-40

-20

0

20

40

60

80

100

120Spread to Treasury (LHS)

Asset Swap Spread (RHS)

24

Term Debt Refunding

Source: FHLBanks Office of Finance and subject to rounding

2011 2012 2013 2014 2015 2016 >20170

50

100

150

200

250

300

189

86

44 31 4015

54

39

34

40

7 8

8

Globals MTNs

Scheduled Maturities($ in billions)

Projected Calls($ in billions)

Estimates based on certain rate and volatility assumptions.  Actual call activity may differ, and can be affected by a variety of factors including but not limited to shifts in the interest rate environment, the amount of callable debt outstanding, debt refunding costs, FHLBank asset/liability strategy, and the overall funding environment.

$30 billion Bond Maturities during Jan-Feb 2011

$343 billion Maturities in 2010

Mar-11 Apr-11 May-11 Jun-11 Jul-110

5

10

15

20

25

23.3

5.77.2

9

4.8

10.1

1.4

1.82.9

2.2

8.7

0.7000000000000010.8

1.5

0.8

Parallel Shift -50bps

Base Rates as of 3/1/11

Parallel Shift +50bps

25

Investor Relations Contacts

David MesserlyDirector

Global Investor Relations703-467-3609

messerly@fhlb-of.com

Denise de BombellesVice President

Global Investor Relations703-467-3677

debombelles@fhlb-of.com

Jonathan HartleyVice President

Global Investor Relations703-467-2948

jhartley@fhlb-of.com

FHLBanks Office of Finance

www.fhlb-of.com

1818 Library StreetSuite 200

Reston, VA 20190