UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K

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

 For the fiscal year ended December 31, 2023
 OR

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

 Commission File Number: 000-51999

 (Exact name of registrant as specified in its charter)

 Federally chartered corporation of the United States
 42-6000149

 (State or other jurisdiction of incorporation or organization)
 (I.R.S. employer identification number)

 909 Locust Street
 50309

 Des Moines, IA

 (Zip code)

 (Address of principal executive offices)

 Registrant's telephone number, including area code: ( 515) 412-2100

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

 Title of each class
 Trading Symbol(s)
 Name of each exchange on which registered

 Securities registered pursuant to Section 12(g) of the Act: Class B Stock, par value $100
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes x No
 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes x No
 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 requirements 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 (section 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

 Non-accelerated filer
 x
 Smaller reporting company

 Emerging growth 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. x
 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o
 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to 17 CFR 240.10D-1(b). 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
 Registrant's stock is not publicly traded and is only issued to members of the registrant. Such stock is issued and redeemed at par value, $100 per share, subject to certain regulatory and statutory limits. At June 30, 2023, the aggregate par value of the stock held by current and former members of the registrant was $ 6,462,027,100. At February 29, 2024, 66,734,674 shares of stock were outstanding.

 Special Note Regarding Forward-Looking Statements and Definitions

 Item 1. Business

 Item 1A. Risk Factors

 Item 1B. Unresolved Staff Comments

 Item 1C. Cybersecurity

 Item 2. Properties

 Item 3. Legal Proceedings

 Item 4. Mine Safety Disclosures

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6. [RESERVED]

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A. Quantitative and Qualitative Disclosures about Market Risk

 Item 8. Financial Statements and Supplementary Data

 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A. Controls and Procedures

 Item 9B. Other Information

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10. Directors, Executive Officers and Corporate Governance

 Item 11. Executive Compensation

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13. Certain Relationships and Related Transactions, and Director Independence

 Item 14. Principal Accounting Fees and Services

 Item 15. Exhibits and Financial Statement Schedules

 Item 16. Form 10-K Summary

 Glossary of Terms

 Signatures

 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND DEFINITIONS

 Statements contained in this report, including statements describing the objectives, projections, estimates, or future predictions in our operations, may be forward-looking statements. These statements may be identified by the use of forward-looking terminology, such as believes, projects, expects, anticipates, estimates, intends, strategy, plan, could, should, may, and will or their negatives or other variations on these terms. By their nature, forward-looking statements involve risk or uncertainty, and actual results could differ materially from those expressed or implied or could affect the extent to which a particular objective, projection, estimate, or prediction is realized. As a result, you are cautioned not to place undue reliance on such statements. These risks and uncertainties include, but are not limited to, the following:

 • political or economic events, including legislative, regulatory, monetary, judicial, or other developments that affect us, our members, our counterparties, and/or our investors in the consolidated obligations of the 11 FHLBanks, including the Finance Agency's comprehensive review of the FHLBank System;

 • the ability to meet capital and other regulatory requirements;

 • competitive forces, including without limitation, other sources of funding available to our borrowers that could impact the demand for our advances, other entities purchasing mortgage loans in the secondary mortgage market, and other entities borrowing funds in the capital markets;

 • reliance on a relatively small number of member institutions for a large portion of our advance business;

 • member consolidations and failures;

 • disruptions in the credit and debt markets and the effect on future funding costs, sources, and availability;

 • general economic and market conditions that could impact the business we do with our members, including, but not limited to, the timing and volatility of market activity, inflation/deflation, employment rates, geopolitical instability or conflicts, housing market activity and housing prices, the level of mortgage prepayments, the valuation of pledged collateral, and the condition of the capital markets and the impact it has on our consolidated obligations;

 • ineffective use of hedging strategies or the availability of derivative instruments in the types and quantities needed for risk management purposes from acceptable counterparties;

 • the volatility of reported results due to changes in the fair value of certain assets, liabilities, and derivative instruments;

 • risks related to the other FHLBanks that could trigger our joint and several liability for debt issued by the other FHLBanks;

 • changes in the relative attractiveness of consolidated obligations due to actual or perceived changes in the FHLBanks' credit ratings as well as the U.S. Government's long-term credit rating;

 • increases in delinquency or loss estimates on mortgage loans;

 • the ability to develop and support internal controls, business processes, information systems, and other operating technologies that effectively manage the risks we face, including but not limited to, cyber-attacks, widespread health emergencies, and other business interruptions;

 • significant business interruptions resulting from third-party failures;

 • the volatility of credit quality, market prices, interest rates, and other factors that could affect the value of collateral held by us as security for borrower and counterparty obligations;

 • the ability to attract and retain key personnel; and

 • natural disasters, including those from significant climate change.

 These forward-looking statements apply only as of the date they are made, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. A detailed discussion of the more important risks and uncertainties that could cause actual results and events to differ from such forward-looking statements is included under " Item 1A. Risk Factors."

 Throughout this Form 10-K, acronyms and terms used are defined in the Glossary of Terms. Unless the context otherwise requires, the terms "Bank," "we," "us," and "our" refer to the Federal Home Loan Bank of Des Moines or its management.

 ITEM 1. BUSINESS
 OVERVIEW
 The Bank is a federally chartered corporation that is exempt from all federal, state, and local taxation (except real property taxes and certain employer payroll taxes) and is one of 11 district FHLBanks. The FHLBanks are GSEs and were created under the authority of the FHLBank Act to serve the public by enhancing the availability of funds for residential mortgages and targeted community development. The Bank is regulated by the Finance Agency.
 We are a cooperative, meaning we are owned by our customers, whom we call members. As a condition of membership, all members must purchase and maintain capital stock to support business activities with us. In return, we provide a readily available source of funding and liquidity to our member institutions and eligible housing associates in Alaska, Hawaii, Idaho, Iowa, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, and the U.S. Pacific territories of American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. Commercial banks, savings institutions, credit unions, insurance companies, and CDFIs may apply for membership. While not considered members, we also conduct certain business activities with state and local housing associates meeting statutory criteria.
 BUSINESS MODEL
 Our mission is to be a reliable provider of funding, liquidity, and services for our members so that they can meet the housing, business, and economic development needs of the communities they serve. In addition, we help to meet the economic and housing needs of our communities through our affordable housing and community investment initiatives. Our operating model balances the trade-off between attractively priced products, reasonable returns on capital stock, maintaining an adequate level of capital to meet regulatory capital requirements, and maintaining adequate retained earnings to preserve the par value of member-owned capital stock.
 We are capitalized through the purchase of capital stock by our members. As a condition of membership, all of our members must purchase and maintain membership capital stock based on a percentage of their total assets as of the preceding December 31st subject to a cap of $10 million and a floor of $10,000. Each member is also required to purchase and maintain activity-based capital stock to support certain business activities with us. Member demand for our products expands and contracts with economic and market conditions. Our self-capitalizing capital structure, which allows us to repurchase or require additional capital stock based on member activity, provides us with the flexibility to effectively and efficiently meet the changing needs of our membership. While eligible to borrow, housing associates are not members and, as such, are not permitted to purchase capital stock.
 Our capital stock is not publicly traded. It is purchased and redeemed by members or repurchased by us at a par value of $100 per share. Our current and former members own all of our outstanding capital stock. Former members own capital stock (included in MRCS) to support business transactions still outstanding with us. All stockholders, including current and former members, may receive dividends on their capital stock investment to the extent declared by our Board of Directors.
 Our primary business activities are providing collateralized loans, known as advances, to members and housing associates and acquiring residential mortgage loans from our members. In addition, we maintain a portfolio of investments, all of which we believe are investment quality at the time of purchase. Our primary source of funding and liquidity is the issuance of debt securities, referred to as consolidated obligations, in the capital markets. Consolidated obligations are the joint and several obligations of all FHLBanks and are backed only by the financial resources of the FHLBanks. A critical component to the success of our operations is the ability to issue consolidated obligations regularly in the capital markets under a wide range of maturities, structures, and amounts, and at relatively favorable spreads to market interest rates.

 Our net income is primarily attributable to the difference between the interest income we earn on our advances, mortgage loans, and investments, and the interest expense we pay on our consolidated obligations. A portion of our annual net income is used to fund our AHP, which provides grants and subsidized advances to members to support housing for very low-, low-, or moderate-income households. By regulation, we recognize AHP assessment expense equal to the greater of 10 percent of our annual income subject to assessment, or our prorated sum required to ensure the aggregate contribution by the FHLBanks is no less than $100 million for each year. For purposes of the statutory AHP assessment, income subject to assessment is defined as net income before AHP assessments, plus interest expense related to MRCS. In addition to our statutory AHP contributions, we engage in a variety of community investment initiatives to help meet the economic and housing needs of our communities. For additional details, refer to the " Affordable Housing and Community Investment " section of Item 1.
 We have risk management policies, established by our Board of Directors, that allow us to monitor and control our exposure to various risks, including interest rate, liquidity, credit, operational, model, information security, legal, regulatory and compliance, DEI, strategic, and reputational, as well as capital adequacy. Our primary risk management objective is to manage our assets and liabilities in ways that ensure liquidity is available to our members and protect the par redemption value of our capital stock. For additional information on our risk management practices, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management."

 MEMBERSHIP
 Our membership includes commercial banks, savings institutions, credit unions, insurance companies, and CDFIs. The majority of depository institutions in our district that are eligible for membership are currently members.
 The following table summarizes our membership by type of institution:

 Institutional Entity
 2023
 2022

 Commercial banks

 Savings institutions

 Credit unions

 Insurance companies

 CDFIs

 Total
 1,257
 1,258

 The following table summarizes our membership by asset size:

 Membership Asset Size1

 2023
 2022

 Depository institutions2

 Less than $100 million
 %
 %

 $100 million to $500 million

 Greater than $500 million

 Insurance companies

 $100 million to $500 million

 Greater than $500 million

 Total
 %
 %

 1 Membership asset size is based on the preceding September 30th financial information provided by members.

 2 Depository institutions consist of commercial banks, savings institutions, credit unions, and CDFIs.

 Our membership level remained relatively stable during 2023. At December 31, 2023, approximately 64 percent of our members were CFIs. For 2023, CFIs were defined under the FHLBank Act to include all FDIC insured institutions with average total assets over the previous three-year period of less than $1.4 billion. In addition to collateral types eligible for all members, CFIs may also pledge collateral consisting of secured small business, small agri-business, or small farm loans.

 BUSINESS SEGMENTS
 We manage our operations as one business segment. Management and our Board of Directors review enterprise-wide financial information in order to make operating decisions and assess performance.
 PRODUCTS AND SERVICES
 We carry out our mission primarily through lending funds, which we call advances, to our members and eligible housing associates (collectively, borrowers). Our advance products are designed to provide liquidity and help borrowers meet the credit needs of their communities while competing effectively in their markets. Borrowers generally use our advance products as sources of wholesale funding and general asset-liability management.
 Our advance products currently offered include the following:

 • Overnight Advances. These advances can renew automatically for a period up to 90 days. Interest rates are set daily.

 • Fixed Rate Advances. These advances are available over a variety of terms in amortizing and non-amortizing structures. Using an amortizing advance, a borrower makes predetermined principal and interest payments at scheduled intervals throughout the term of the advance. Forward starting advances are a type of fixed rate non-amortizing advance with settlement dates up to two years in the future, allowing members to lock in an interest rate at the outset, while delaying the receipt of funding and principal and interest payments. Delayed amortizing advances are a type of fixed rate advance with a feature that delays commencement of the repayment of the principal up to five years, allowing members control over the principal cash flows and the repayment of the advance. Certain long-term fixed rate and amortizing advances contain a symmetrical prepayment feature. This feature allows borrowers to prepay an advance and potentially realize a gain if interest rates rise to a level greater than those existing when the advance was originated.

 • Variable Rate Advances. These advances have interest rates that reset periodically to a specified interest rate index such as SOFR or to consolidated obligation yields.

 • Callable Advances. These advances may be prepaid by borrowers on predetermined dates (call dates) without incurring a prepayment fee and therefore provide borrowers a source of long-term financing with prepayment flexibility. Callable advances can be either fixed or variable in nature. Variable rate callable advances may reset at different frequencies generally ranging from one to six months and are callable at each rate reset date. For certain variable rate callable advances, we retain the flexibility to adjust the spread relative to our cost of funds on each rate reset date. Fixed rate callable advances may have different call schedules based on member specifications, and principal balances may be amortizing in nature.

 • Community Investment Advances. These advances are below-market rate funds used by borrowers in both eligible housing projects and community development. Interest rates on these advances represent our cost of funds plus a mark-up to cover our administrative expenses.
 For the years ended December 31, 2023, 2022, and 2021, advances represented 65, 59, and 54 percent of our total average assets and generated 68, 63, and 56 percent of our total interest income. For additional information on our advances, including our top five borrowers, see " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Statements of Condition — Advances." In addition, refer to " Item 1A. Risk Factors " for a discussion on our exposure to customer concentration risk.

 COLLATERAL
 We are required by regulation to obtain sufficient collateral to fully secure our advances, standby letters of credit, and other extensions of credit to borrowers (collectively, credit products). The estimated value of the collateral required to secure each borrower's credit products is calculated by applying collateral discounts, or haircuts, to the unpaid principal balance or market value, as applicable, of the collateral.

 Borrowers may pledge collateral to us by executing a blanket pledge agreement, specifically assigning collateral, or placing physical possession of collateral with us or our custodians. We perfect our security interest in all pledged collateral by filing Uniform Commercial Code financing statements or by taking possession or control of the collateral. Under the FHLBank Act, any security interest granted to us by our members, or any affiliates of our members, has priority over the claims and rights of any party (including any receiver, conservator, trustee, or similar party having rights of a lien creditor), unless those claims and rights would be entitled to priority under otherwise applicable law and are held by actual purchasers or by parties that have perfected security interests.
 For additional information on our collateral requirements, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Credit Risk — Advances."
 HOUSING ASSOCIATES
 The FHLBank Act permits us to provide advances to eligible housing associates. Housing associates are eligible if they are approved mortgagees under Title II of the National Housing Act that meet certain criteria, including: (i) chartered under law and have succession, (ii) subject to inspection and supervision by some governmental agency, and (iii) lend their own funds as their principal activity in the mortgage field. The same regulatory lending requirements that apply to our members generally apply to housing associates. Because housing associates are not members, they are not subject to certain provisions of the FHLBank Act applicable to members and cannot own our capital stock. In addition, they may only pledge certain types of collateral including, but not limited to: (i) FHA mortgages, (ii) Ginnie Mae securities backed by FHA mortgages, (iii) certain residential mortgage loans, and (iv) cash deposited with us.
 PREPAYMENT FEES
 We generally charge a prepayment fee for advances that a borrower elects to terminate prior to the stated maturity or outside of a predetermined call date. The fees charged are priced to make us financially indifferent to the prepayment of the advance. For certain advances with symmetrical prepayment features, we may charge the borrower a prepayment fee or pay the borrower a prepayment credit, depending on certain circumstances, such as movements in interest rates, when the advance is prepaid.
 Standby Letters of Credit
 We may issue standby letters of credit on behalf of our members to support certain obligations of the members to third-party beneficiaries. Standby letters of credit may be offered to assist members and non-member housing associates in facilitating residential housing finance, community lending, and asset-liability management, and to provide liquidity. In particular, members often use standby letters of credit as collateral for deposits from federal and state government agencies. For additional details on our standby letters of credit, refer to " Item 8. Financial Statements and Supplementary Data — Note 14 — Commitments and Contingencies."
 Mortgage Loans
 We invest in mortgage loans through the MPF program, a secondary mortgage market structure developed by the FHLBank of Chicago to help fulfill the housing mission of the FHLBanks. In the past, we also acquired mortgage loans purchased under the MPP; however, we currently do not purchase mortgage loans under this program. For the years ended December 31, 2023, 2022, and 2021, mortgage loans represented five, seven, and nine percent of our total average assets and generated three, nine, and 24 percent of our total interest income.
 Under the MPF program, we purchase eligible mortgage loans from members or housing associates called PFIs. We may also acquire MPF loans through participations with other FHLBanks. MPF loans are conforming conventional or government-insured fixed rate mortgage loans secured by one-to-four family residential properties.

 The FHLBank of Chicago (in this capacity, the MPF Provider) provides the infrastructure and operational support for the MPF program and is responsible for publishing and maintaining the MPF Guides, which detail the requirements PFIs must follow in originating, selling, and servicing MPF loans. In exchange for providing these services, the MPF Provider receives a fee from each of the FHLBanks participating in the MPF program. The MPF Provider has engaged Computershare Limited as the master servicer for the MPF program. Throughout the servicing process, the master servicer monitors each PFI's compliance with certain MPF program requirements and makes periodic reports to the MPF Provider.
 Participating Financial Institutions
 Our members and eligible housing associates must apply to become a PFI. In order to do MPF business with us, each member or eligible housing associate must meet certain eligibility standards and sign a PFI Agreement. The PFI Agreement provides the terms and conditions for the sale of MPF loans, including the servicing of MPF loans.
 PFIs may either retain the servicing of MPF loans or sell the servicing to an approved third-party provider. If a PFI chooses to retain the servicing, it receives a servicing fee to manage the servicing activities. If a PFI chooses to sell the servicing rights to an approved third-party provider, the servicing is transferred concurrently with the sale of the MPF loans and a servicing fee is paid to the third-party provider.
 MPF Loan Types
 We currently offer MPF closed loan products in which we purchase loans acquired or originated by the PFI. In addition, we offer certain off-balance sheet loan products. MPF Xtra is an off-balance sheet loan product in which we assign 100 percent of our interest in PFI master commitments to the FHLBank of Chicago. The FHLBank of Chicago then purchases mortgage loans from our PFIs and sells MPF Xtra loans to Fannie Mae. MPF Government MBS is an off-balance sheet loan product where our PFIs sell government loans directly to the FHLBank of Chicago where they are pooled and securitized into Ginnie Mae MBS. Under these off-balance sheet products, we receive a small fee for our continued management of the PFI relationship.
 The PFI performs all traditional retail loan origination functions on our MPF loan products. We are responsible for managing the interest rate risk and liquidity risk associated with the MPF loans we purchase and carry on our Statements of Condition. In order to limit our credit risk exposure to approximately that of an investor in an investment grade MBS, we require a credit risk sharing arrangement with the PFI on all MPF loans at the time of purchase.
 MPF Loan Volume
 Our member base for MPF loans is primarily a diverse mix of commercial banks and credit unions. Our ability to price MPF loans, coupled with changes in the interest rate environment, has allowed us to serve the liquidity needs of a broad range of members. During the years ended December 31, 2023, 2022, and 2021, we purchased $2.4 billion, $1.9 billion, and $1.9 billion of MPF loan products (excluding off-balance sheet loan products). In addition, during the years ended December 31, 2023, 2022, and 2021, we had off-balance sheet loan volumes of $0.3 billion, $0.7 billion, and $3.2 billion.
 LOAN MODIFICATION PLANS

 We offer loan modification plans for our PFIs. Under these plans, we generally reduce the interest rate, extend the maturity date, or permit the capitalization of past due amounts, escrow, or advance balances up to the original loan amount. We may also grant a forbearance period or offer payment deferrals in limited circumstances.
 For additional discussion on our mortgage loans and their related credit risk, refer to " Item 8. Financial Statements and Supplementary Data — Note 6 — Mortgage Loans Held for Portfolio " and " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Credit Risk — Mortgage Loans."

 We maintain an investment portfolio primarily to provide liquidity as well as investment income. Our investment portfolio consists of both short- and long-term investments. Our short-term investments may include, but are not limited to, interest-bearing deposits, federal funds sold, securities purchased under agreements to resell, certificates of deposit, commercial paper, and U.S. Treasury obligations. Our long-term investments may include, but are not limited to, U.S. Treasury obligations, other U.S. obligations, GSE and TVA obligations, state or local housing agency obligations, taxable municipal bonds, and agency MBS. For the years ended December 31, 2023, 2022, and 2021, investments represented 29, 32, and 36 percent of our total average assets and generated 29, 28, and 20 percent of our total interest income.
 Finance Agency regulations limit the type of investments we may purchase, and we do not have any subsidiaries or equity positions in any partnerships, corporations, or off-balance sheet special purpose entities. The Finance Agency further limits our investments in MBS by requiring that the balance of our MBS not exceed three times regulatory capital at the time of purchase. For details on our compliance with this regulatory requirement, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Statements of Condition — Investments." For additional discussion on our investments and their related credit risk, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Credit Risk — Investments."
 Standby Bond Purchase Agreements
 We currently hold standby bond purchase agreements with state housing finance agencies within our district pursuant to which, for a fee, we agree to serve as a standby liquidity provider if required, to purchase and hold the bonds until the designated marketing agent can find a suitable investor or the state housing finance agency repurchases the bonds according to a schedule established by the agreement. Each standby bond purchase agreement includes the provisions under which we would be required to purchase the bonds and typically allows the Bank to terminate the agreement upon the occurrence of a default event of the issuer. If purchased, the bonds would be classified as AFS or trading securities on our Statements of Condition. For additional details on our standby bond purchase agreements, refer to " Item 8. Financial Statements and Supplementary Data — Note 14 — Commitments and Contingencies."
 We accept uninsured deposits from our members, eligible housing associates, and/or counterparties. We offer deposit programs, including demand, overnight, and term deposits. Deposit programs provide us funding while providing members a low-risk, interest-earning asset.
 Consolidated Obligations
 Our primary source of funding and liquidity is the issuance of debt securities, referred to as consolidated obligations, in the capital markets. Consolidated obligations (bonds and discount notes) are the joint and several obligations of all FHLBanks and are backed only by the financial resources of the FHLBanks. They are not obligations of the U.S. Government, and the U.S. Government does not guarantee them. At February 29, 2024, S&P and Moody's rated the consolidated obligations AA+/A-1+ with a stable outlook and Aaa/P-1 with a negative outlook. In addition, as of February 29, 2024, our consolidated obligations were rated AA+ with a stable outlook by Fitch Ratings.
 The FHLBanks' Office of Finance issues all consolidated obligations on behalf of the FHLBanks. It is also responsible for servicing all outstanding debt, coordinating transfers of debt between the FHLBanks, serving as a source of information for the FHLBanks on capital market developments, managing the FHLBank System's relationship with the rating agencies with respect to consolidated obligations, and preparing and making available the FHLBank System's Combined Financial Reports.
 Although we are primarily responsible for the portion of consolidated obligations issued on our behalf, we are also jointly and severally liable with the other FHLBanks for the payment of principal and interest on all consolidated obligations. The Finance Agency, at its discretion, may require any FHLBank to make principal and/or interest payments due on any consolidated obligation, whether or not the primary obligor FHLBank has defaulted on the payment of that consolidated obligation. The Finance Agency has never exercised this discretionary authority.

 To the extent that an FHLBank makes any payment on a consolidated obligation on behalf of another FHLBank, the paying FHLBank is entitled to reimbursement from the FHLBank otherwise responsible for the payment. However, if the Finance Agency determines that an FHLBank is unable to satisfy its obligations, then the Finance Agency may allocate the outstanding liability among the remaining FHLBanks on a pro-rata basis in proportion to each FHLBank's participation in all consolidated obligations outstanding, or on any other basis that it may determine.

 The Finance Agency also requires each FHLBank to maintain unpledged qualifying assets, as defined by regulation, in an amount at least equal to the amount of that FHLBank's participation in the total consolidated obligations outstanding. For details on our compliance with this regulatory requirement, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Liquidity — Liquidity Requirements."

 BONDS
 Bonds are generally issued to satisfy our short-, intermediate-, and long-term funding needs. They may have maturities ranging up to 30 years, although there is no statutory or regulatory limitation as to their maturity. Bonds are issued with either fixed or variable rate payment terms, such as SOFR. To meet the specific needs of investors, both fixed and variable rate bonds may also contain certain embedded features, which result in complex coupon payment terms and/or call features. When bonds are issued on our behalf, we may concurrently enter into a derivative agreement to effectively convert the fixed rate payment stream to variable or to offset the embedded features in the bond.
 Depending on the amount and type of funding needed, bonds may be issued through negotiated or competitively bid transactions with approved underwriters or selling group members (i.e., TAP Issue Program, auction, and Global Debt Program), or through debt transfers between FHLBanks.
 The TAP Issue Program is used to issue fixed rate, non-callable bonds with maturities ranging up to 30 years. The goal of the TAP Issue Program is to aggregate frequent smaller bond issues into a larger bond issue that may have greater market liquidity.
 An auction process is used to issue fixed rate, callable bonds. Auction structures are determined by the FHLBanks in consultation with the Office of Finance and the securities dealer community. We may receive zero to 100 percent of the proceeds of the bonds issued via the callable auction depending on (i) the amounts and costs for the bonds bid by underwriters, (ii) the maximum costs we or other FHLBanks participating in the same issue, if any, are willing to pay for the obligations, and (iii) the guidelines for allocation of bond proceeds among multiple participating FHLBanks administered by the Office of Finance.
 The Global Debt Program allows the FHLBanks to diversify their funding sources to include overseas investors. Global Debt Program bonds may be issued in maturities ranging up to 30 years and can be customized with different terms and currencies. The FHLBanks approve the terms of the individual issues under the Global Debt Program.
 DISCOUNT NOTES
 Discount notes are generally issued to satisfy our short-term funding needs. They have maturities of up to one year and are offered daily through a discount note selling group and other authorized underwriters. Discount notes are generally sold at a discount and mature at par.
 On a daily basis, we may request that specific amounts of discount notes with specific maturity dates be offered by the Office of Finance for sale through certain securities dealers. We may receive zero to 100 percent of the proceeds of the discount notes issued via this sales process depending on (i) the time of the request, (ii) the maximum costs we or other FHLBanks participating in the same issue, if any, are willing to pay for the discount notes, and (iii) the amount of orders for the discount notes submitted by dealers.
 Twice weekly, we may request that specific amounts of discount notes with fixed maturities of four to 26 weeks be offered by the Office of Finance through competitive auctions conducted with securities dealers in the discount note selling group. One or more of the FHLBanks may also request that amounts of those same discount notes be offered for sale for their benefit through the same auction. The discount notes offered for sale through competitive auction are not subject to a limit on the maximum costs the FHLBanks are willing to pay. We may receive zero to 100 percent of the proceeds of the discount notes issued through a competitive auction depending on the amounts of the discount notes bid by underwriters and the guidelines for allocation of discount note proceeds among multiple participating FHLBanks administered by the Office of Finance.

 For additional information on our consolidated obligations, see " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Statements of Condition — Consolidated Obligations " and " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Liquidity — Sources of Liquidity."
 Derivatives
 We use derivatives to manage interest rate risk. Finance Agency regulations and our risk management policies establish guidelines for derivatives, prohibit the speculative use of derivatives, and limit credit risk arising from derivatives. The goal of our interest rate risk management strategy is not to eliminate interest rate risk, but to manage it within appropriate limits.
 We can use interest rate swaps, swaptions, interest rate caps and floors, options, and future/forward contracts as part of our interest rate risk management strategies. These derivatives can be used as either a fair value hedge of a financial instrument or firm commitment or an economic hedge to manage certain defined risks. We use economic hedges primarily to (i) manage mismatches between the coupon features of our assets and liabilities, (ii) offset prepayment risk in certain assets, (iii) mitigate the income statement volatility that occurs when financial instruments are recorded at fair value and hedge accounting is not permitted by accounting guidance, or (iv) reduce exposure to reset risk.
 Additional information on our derivatives can be found in " Item 8. Financial Statements and Supplementary Data — Note 7 — Derivatives and Hedging Activities " and " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Statements of Condition — Derivatives."
 CAPITAL AND DIVIDENDS
 Capital Stock
 Our capital stock has a par value of $100 per share, and all shares are issued, redeemed, and repurchased only at the stated par value. We issue a single class of capital stock (Class B capital stock) and have two subclasses of Class B capital stock: membership and activity-based. Effective December 15, 2023, each member must purchase and hold membership capital stock in an amount equal to 0.06 percent of its total assets as of the preceding December 31st, subject to a cap of $10 million and a floor of $10,000. In addition, each member is required to purchase activity-based capital stock equal to 4.50 percent of its outstanding advances, 4.00 percent of its outstanding mortgage loans, and 0.10 percent of its outstanding standby letters of credit. Prior to December 15, 2023, members were required to purchase and hold membership capital stock in an amount equal to 0.12 percent of their total assets as of the preceding December 31st, subject to a cap of $10 million and a floor of $10,000. They were also required to purchase activity-based capital stock equal to 4.00 percent of their outstanding advances and mortgage loans and 0.10 percent of their outstanding standby letters of credit. All capital stock issued is subject to a notice of redemption period of five years.

 The capital stock requirements established in our Capital Plan are designed so that we can remain adequately capitalized as member activity changes. Our Board of Directors may make adjustments to the capital stock requirements within ranges established in our Capital Plan.

 Capital stock owned by members in excess of their investment requirement is deemed excess capital stock. Under our Capital Plan, we, at our discretion and upon 15 days written notice, may repurchase excess membership capital stock. We, at our discretion, may also repurchase excess activity-based capital stock to the extent that (i) the excess capital stock balance exceeds an operational threshold set forth in the Capital Plan, which is currently set at zero, or (ii) a member submits a notice to redeem all or a portion of the excess activity-based capital stock.

 We reclassify capital stock subject to redemption from equity to a liability, which represents MRCS, when a member provides written notice of intention to withdraw from membership, becomes ineligible for continuing membership, or attains non-member status by merger or consolidation, charter termination, or other involuntary termination from membership. Dividends on MRCS are classified as interest expense on the Statements of Income.

 Retained Earnings
 Our risk management policies outline a targeted level of retained earnings based on the amount we believe necessary to help protect the redemption value of capital stock, facilitate safe and sound operations, maintain regulatory capital ratios, and support our ability to pay a relatively stable dividend. We monitor our achievement of this targeted level and may utilize tools such as restructuring our balance sheet, generating additional income, reducing our risk exposures, increasing capital stock requirements, or reducing our dividends to achieve this level of retained earnings. At December 31, 2023 and 2022, our actual retained earnings exceeded our targeted level of retained earnings.

 We entered into a JCE Agreement with all of the other FHLBanks in 2011. Under the JCE Agreement, we are required to allocate 20 percent of our quarterly net income to a separate restricted retained earnings account until the balance of that account, calculated as of the last day of each calendar quarter, equals at least one percent of our average balance of outstanding consolidated obligations for the calendar quarter. These restricted retained earnings are not available to pay dividends.
 Dividends
 Our Board of Directors may declare and pay different dividends for each subclass of capital stock. Dividend payments may be made in the form of cash and/or additional shares of capital stock. Historically, we have only paid cash dividends. By regulation, we may only pay dividends from current earnings or unrestricted retained earnings. We are prohibited from paying a dividend in the form of additional shares of capital stock if, after the issuance, the outstanding excess capital stock would be greater than one percent of our total assets. Our Board of Directors may not declare or pay dividends if it would result in our non-compliance with regulatory capital requirements.
 For additional information on our capital stock, retained earnings, and dividends, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Capital."

 HUMAN CAPITAL RESOURCES

 Our human capital is a significant contributor to the success of our strategic business objectives. In managing our human capital, we focus on our workforce profile and the various programs and philosophies described below.

 Workforce Profile

 Our workforce is primarily comprised of corporate employees, with our principal operations in one location. As of December 31, 2023, we had 369 employees, 365 full-time and four part-time. As of December 31, 2023, approximately 48 percent of our workforce was female, 52 percent male, 79 percent non-minority and 21 percent minority, based on employees who chose to self-identify. We strive to both develop talent from within the organization and supplement with external hires. We believe that developing talent internally results in institutional strength and continuity and promotes loyalty and commitment in our employee base, which furthers our success, while adding new employees contributes to new ideas, continuous improvement, and our goals of a diverse and inclusive workforce. As of December 31, 2023, the average tenure of our employees was seven years. There are no collective bargaining agreements with our employees.

 Total Rewards

 We seek to attract, develop, retain, and engage talented employees to create and implement strategies that are critical to our long-term success and ensure we bring value for our members. We affect this objective through a combination of development programs, benefits and employee wellness programs, and recognizing and rewarding performance. Specifically, our programs include:

 • Cash compensation – includes competitive salary, other cash subsidies, and performance-based incentives;

 • Benefits – health insurance, life and accidental death and dismemberment insurance, supplemental life insurance, 401(k) retirement savings plans with employer match, and healthcare concierge;

 • Wellness program – fitness reimbursement, employee assistance program, interactive education sessions, online wellness portal, on-site gym, wellness incentive program, and ergonomic work environment;

 • Time away from work – including paid time off, holidays, and volunteer opportunities;

 • Culture – DEI Council, Wellness Council, Community Relations Council, business resource groups, community involvement, as well as various cultural and inclusion initiatives;

 • Work/Life balance – short-term disability, parental and military leave, bereavement, jury duty, and court appearance leaves, as well as flexible scheduling and remote working options, including a hybrid working model with most employees working from our headquarters three days or more a week;

 • Development programs and training – leadership development, mentoring program, employee engagement, educational assistance programs, online learning portal, professional competency exam reimbursement, internal education and development opportunities, fee reimbursement for external education, professional organization memberships, and development programs, including goals for developmental activities as part of performance management; and

 • Management succession planning – our Board of Directors and leadership actively engage in management succession planning, with a defined plan for executive leadership roles.

 Our Performance Management framework includes performance planning and goal-setting, ongoing coaching and feedback, and a mid-year and annual performance review. Overall annual performance ratings are calibrated and merit and incentive payments are differentiated for our highest performers.

 Diversity, Equity and Inclusion Program

 DEI is a strategic business priority for the Bank. It is an integral part of who we are as a company, how we operate, how we see our future, and how we interact with each other, our members, suppliers, and broker-dealers. As an organization, we are committed to integrating and promoting DEI as a key aspect of our culture and in all relevant business functions, financial transactions, and activities, especially those in service to our members, suppliers, and broker-dealers.

 Our Chief DEI Officer is a member of the executive team, reports to the President and CEO and serves as a liaison to the Board of Directors. We recognize that diversity increases capacity for innovation and creativity and that inclusion allows us to leverage the unique perspectives of all employees and strengthens our retention efforts. We operationalize our commitment through the development and execution of a three-year DEI strategic plan that includes quantifiable metrics to measure our success, and we report regularly on our performance to management and the Board of Directors. We offer a range of opportunities for our employees to connect and grow personally and professionally through our Office of Minority and Women Inclusion Committee, DEI Council, business resource groups, internal training, and community involvement. We consider learning an important component of our DEI strategy and regularly offer educational opportunities to our employees and evaluate inclusive behaviors as part of our annual goal setting, performance management, and succession planning processes. We also incorporate DEI as a key component of our incentive plan framework to ensure organizational focus and accountability.

 COMPETITION
 Our primary business activities are providing advances and acquiring residential mortgage loans from our members. These activities are funded through the issuance of consolidated obligations. We face competition for advances, mortgage loans, and funding from other institutions, including, but not limited to, investment banks, commercial banks, other GSEs, and U.S. Government agencies, including the Federal Reserve. For further discussion on our competition, refer to " Item 1A. Risk Factors."
 TAXATION
 Under the FHLBank Act, we are exempt from all federal, state, and local taxation (except real property taxes and certain employer payroll taxes).

 AFFORDABLE HOUSING AND COMMUNITY INVESTMENT
 The FHLBank Act requires each FHLBank to establish and fund an AHP, which provides subsidies in the form of direct grants or below-market interest rates on advances to members who provide the funds to assist in the purchase, construction, or rehabilitation of housing for very low-, low-, or moderate-income households. Annually, the FHLBanks recognize AHP assessment expense equal to the greater of 10 percent of their annual income subject to assessment, or their prorated sum required to ensure the aggregate contribution by the FHLBanks is no less than $100 million. In addition to the required AHP assessment, our Board may elect to make voluntary contributions to the AHP. For purposes of the statutory AHP assessment, income subject to assessment is defined as net income before AHP assessments, plus interest expense related to MRCS. The exclusion of interest expense related to MRCS is a regulatory interpretation of the Finance Agency. We accrue the AHP assessment monthly based on our income subject to assessment and reduce our AHP liability as program funds are distributed. For additional information on our AHP, refer to " Item 8. Financial Statements and Supplementary Data — Note 10 — Affordable Housing Program."
 In addition to our statutory AHP contributions, we engage in a variety of community investment initiatives to help meet the economic and housing needs of our communities. These initiatives include, but are not limited to, our Member Impact Fund, a discretionary program in which we match member donations to local housing and community development organizations, disaster relief contributions to areas within our district, and additional voluntary contributions to AHP, as mentioned above. Refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Executive Overview — Affordable Housing and Community Impact " for details on our initiatives in 2023.
 OVERSIGHT, AUDITS, AND EXAMINATIONS
 Our business is subject to extensive regulation and supervision. The laws and regulations to which we are subject cover all key aspects of our business, including, but not limited to, our product and service offerings, pricing, competitive position and strategic plan, relationships with members and third parties, capital structure, liquidity, and information security. Our primary regulatory oversight is summarized below.
 The Finance Agency supervises and regulates the FHLBanks and the Office of Finance. The Finance Agency has a statutory responsibility and corresponding authority to ensure that the FHLBanks operate in a safe and sound manner. Consistent with that duty, the Finance Agency has an additional responsibility to ensure the FHLBanks carry out their housing and community development finance mission. In order to carry out those responsibilities, the Finance Agency establishes regulations governing the FHLBanks, conducts ongoing off-site monitoring and supervisory reviews, performs annual on-site examinations and periodic interim on-site reviews, and requires the FHLBanks to submit monthly and quarterly information regarding their financial condition, results of operations, and risk metrics.

 The Comptroller General has authority under the FHLBank Act to audit or examine the Finance Agency and the FHLBanks and to decide the extent to which they fairly and effectively fulfill the purposes of the FHLBank Act. Furthermore, the Government Corporation Control Act provides that the Comptroller General may review any audit of an FHLBank's financial statements conducted by an independent registered public accounting firm. If the Comptroller General conducts such a review, then he or she must report the results and provide his or her recommendations to Congress, the Office of Management and Budget, and the FHLBank in question. The Comptroller General may also conduct his or her own audit of the financial statements of any FHLBank.

 As required by federal regulation, we have an internal audit department and an audit committee of our Board. An independent public accounting firm registered with the PCAOB audits our annual financial statements. Our independent registered public accounting firm, PricewaterhouseCoopers LLP, must adhere to PCAOB and Government Auditing Standards, as issued by the Comptroller General, when conducting our audits. Our Board, our senior management, and the Finance Agency receive these audit reports. We also submit annual management reports to Congress, the President of the United States, the Office of Management and Budget, and the Comptroller General. These reports include audited financial statements, a statement of internal accounting and administrative control systems, and the report of the independent registered public accounting firm on the financial statements.

 For further discussion on the potential impacts of legislative and regulatory developments, refer to " Item 1A. Risk Factors " and " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Legislative and Regulatory Developments."

 AVAILABLE INFORMATION
 We are required to file with the SEC an annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. The SEC maintains a website containing these reports and other information regarding our electronic filings located at www.sec.gov.

 We also provide direct links from our website at www.fhlbdm.com to the SEC website for our annual reports, quarterly reports, current reports, and amendments to all such reports filed with or furnished to the SEC, as soon as reasonably practicable after such reports are available. Annual and quarterly reports for the FHLBanks on a combined basis are also available, free of charge, at the website of the Office of Finance as soon as reasonably practicable after such reports are available. The website address to obtain these reports is www.fhlb-of.com.
 Information contained in the previously mentioned websites, or that can be accessed through those websites, is not incorporated by reference into this annual report on Form 10-K and does not constitute a part of this or any report filed with the SEC.

 ITEM 1A. RISK FACTORS

 The following discussion summarizes some of the more significant risks we face. This discussion is not exhaustive, and there may be other risks we face, which are not described below. In particular, we may fail to identify and manage risks related to a variety of aspects of our business, including but not limited to, interest rate, liquidity, and legal, regulatory, and compliance risks. We have adopted controls, procedures, policies, and systems to monitor and manage these risks. Management cannot provide complete assurance that those controls, procedures, policies, and systems are adequate to identify and manage the risks inherent in our business. In addition, because our business continues to evolve, we may fail to fully understand the implications of changes in the business, and therefore, we may fail to enhance our risk governance framework to timely or adequately address those changes. This risk and any of the other risks described below, if realized, could negatively affect our business operations, financial condition, future results of operations, and among other things, could result in our inability to pay dividends on our capital stock or repurchase capital stock or adversely impact our reputation.

 BUSINESS AND REGULATORY RISK
 WE ARE SUBJECT TO A COMPLEX BODY OF LAWS AND REGULATIONS THAT COULD CHANGE IN A MANNER DETRIMENTAL TO OUR BUSINESS OPERATIONS
 The FHLBanks are GSEs, organized under the authority of the FHLBank Act and, as such, are governed by federal laws and regulations adopted and applied by the Finance Agency. Congress may amend the FHLBank Act or other statutes in ways that significantly affect the rights and obligations of the FHLBanks or the manner in which the FHLBanks carry out their mission and business operations. In addition, new or modified legislation enacted by Congress or changes in regulatory requirements applied or imposed by the Finance Agency could affect the composition of our membership and the extent to which members engage in business with us. There continues to be uncertainties surrounding our legislative and regulatory environment, and new or modified legislation enacted by Congress or regulations adopted or guidance issued by the Finance Agency or other financial services regulators.
 Recently, the Finance Agency completed a comprehensive review of the FHLBank System culminating in a written report released on November 7, 2023. The report covers topics such as the FHLBanks' adequate fulfillment of their mission and purpose in a changing marketplace; their organization, operational efficiency, and effectiveness; their role in promoting affordable, sustainable, equitable, and resilient housing and community investment; addressing the unique needs of rural and financially vulnerable communities; member products, services, and collateral requirements; and membership eligibility and requirements. The Finance Agency has stated that it intends to pursue legislative, regulatory, or other actions as a result of its review; however, it remains uncertain what the potential impact of any such actions on the FHLBanks may be. Any of these factors could negatively affect our business operations, financial condition, results of operations, and the value of FHLBank membership.

 Additionally, the FASB or SEC may amend financial accounting and reporting standards that govern our accounting and disclosure practices, such as standards on climate change and ESG matters. Specifically, policy or regulatory changes relating to ESG matters, as well as market and stakeholder expectations, are evolving and may result in additional responsibilities or costs for us, such as compliance requirements, operational or technological changes, and increased disclosures.

 For a discussion of new and proposed legislative and regulatory developments that could affect us, including additional information on the Finance Agency's comprehensive review of the FHLBank System, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Legislative and Regulatory Developments."

 FAILURE TO MEET MINIMUM CAPITAL AND OTHER REGULATORY REQUIREMENTS COULD ADVERSELY AFFECT OUR ABILITY TO REDEEM OR REPURCHASE CAPITAL STOCK, PAY DIVIDENDS, AND ATTRACT NEW MEMBERS
 We are regulated by the Finance Agency and if we fail to meet regulatory requirements, we could be subject to corrective action that could adversely impact our financial condition and results of operations. For example, we are required to maintain capital to meet specific minimum requirements, as defined by the Finance Agency. Historically, our capital has exceeded all capital requirements and we have maintained adequate capital and leverage ratios. If we fail to meet any of these requirements or if our Board of Directors or the Finance Agency determines that we have incurred, or are likely to incur, losses resulting in, or losses that are expected to result in, a charge against capital, we would not be able to redeem or repurchase any capital stock while such charges are continuing or expected to continue. In addition, failure to meet our capital requirements could result in the Finance Agency's imposition of restrictions pertaining to dividend payments, lending, investing, or other business activities. Additionally, the Finance Agency could require that we call upon our members to purchase additional capital stock to meet our minimum regulatory capital requirements. Members may be unable or unwilling to satisfy such calls for additional capital, which could lead to a member's involuntary termination of membership as a result of noncompliance with our Capital Plan, which could adversely impact our financial condition and results of operations.
 WE FACE COMPETITION FOR ADVANCES, MORTGAGE LOANS, AND FUNDING
 Our primary business activities are providing advances to members and housing associates and acquiring residential mortgage loans from our members. Demand for our advances is affected by, among other things, the cost of other available sources of funding for our borrowers. We may from time to time compete with other suppliers of secured and unsecured wholesale funding including, but not limited to, investment banks, commercial banks, other GSEs, and U.S. Government agencies, including the Federal Reserve. We may compete with other FHLBanks to the extent that member institutions have affiliated institutions located outside of our district. Furthermore, our members may have access to customer deposits, brokered or reciprocal deposits, and resale agreements, all of which represent competitive alternatives to our advances.
 Many of our competitors are not subject to the same body of regulation that we are, which may enable them to offer products and terms that we cannot. Efforts to effectively compete with other suppliers of wholesale funding by changing the pricing of our advances may result in a decrease in our profitability. The availability of alternative funding sources for our members could also change their perception of the value of FHLBank membership. A decrease in the demand for advances or a decrease in the profitability on advances could negatively affect our financial condition and results of operations.
 The purchase of mortgage loans through the MPF program is subject to competition on the basis of prices paid for mortgage loans, customer service, and ancillary services, such as automated underwriting and loan servicing options. We compete primarily with other GSEs, such as Fannie Mae, Freddie Mac, other financial institutions, and private investors for acquisition of fixed rate mortgage loans. Increased competition could result in a reduction in the amount of mortgage loans we are able to purchase, which could negatively affect our financial condition and results of operations.
 We also compete with the U.S. Government, Fannie Mae, Freddie Mac, and other GSEs as well as corporate, sovereign, and supranational entities for raising funds through the issuance of debt in the national and global markets. In the absence of increased demand, increased supply of competing debt products may result in higher debt costs or lesser amounts of debt issued at the same cost. An increase in funding costs would negatively affect our financial condition and results of operations.

 WE COULD BE ADVERSELY AFFECTED BY OUR EXPOSURE TO CUSTOMER CONCENTRATION RISK
 We are subject to customer concentration risk as a result of our reliance on a relatively small number of member institutions for a large portion of our total advances and resulting interest income. At December 31, 2023 and 2022, advances outstanding to our top five borrowers totaled $55.0 billion and $50.9 billion, representing 45 percent of our total advances outstanding at each period end. At December 31, 2023 and 2022, our single largest borrower, Wells Fargo Bank, N.A., accounted for 30 percent and 28 percent of total advances outstanding and for approximately 29 percent and 20 percent of advance interest income for the years ended December 31, 2023 and 2022. Advance balances with members could change due to factors such as a change in member demand or borrowing capacity, which can be influenced by economic conditions, relocation of members out of our district, or members with affiliated institutions located outside of our district choosing to do business with another FHLBank. In addition, advance balances could change as a result of new or modified legislation impacting us or our members or regulations or other directives adopted by the Finance Agency or other financial services regulators. If we experience a decrease in the amount of business with our top five borrowers, our financial condition and results of operations could be negatively affected. Refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Statements of Condition — Advances " for additional information on our top five borrowers.
 MEMBER CONSOLIDATIONS AND FAILURES COULD ADVERSELY AFFECT OUR BUSINESS
 Member consolidations and failures could reduce the number of current and potential members in our district. During 2023, our number of members remained relatively stable; however, if the number of member consolidations and/or failures were to accelerate, we could experience a reduction in the level of our members' advance and other business activities. This loss of business could negatively impact our business operations, financial condition, and results of operations.

 MARKET AND LIQUIDITY RISK

 WE COULD BE ADVERSELY AFFECTED BY OUR INABILITY TO ACCESS THE CAPITAL MARKETS

 Our primary source of funds is through the issuance of consolidated obligations in the capital markets. Our ability to obtain funds through the issuance of consolidated obligations depends in part on our real and perceived relationship to the U.S. Government, prevailing market conditions in the capital markets, and rating agency actions, all of which are beyond our control. In addition, changes to the regulatory environment that affect bank counterparties, debt underwriters, and investors could adversely affect our ability to access the capital markets and the cost of that funding. We cannot make any assurance that we will be able to obtain funding on terms acceptable to us, if at all. For example, previous money market fund reform resulted in a significant increase in demand for U.S. government and agency debt, including our short-term consolidated obligations. While this increased demand benefited our ability to access short-term funding at attractive costs, there could be a scenario in which regulatory change may cause a decrease in demand that could lead to significant investor outflows and unfavorable market conditions due to our concentration in money market investors. Any further change in regulatory requirements governing money market funds, including any reversal of money market fund reforms, could negatively impact our short term funding costs and strategies.

 If we cannot access funding when needed, our ability to support and continue business operations, including our ability to refund maturing debt and maintain compliance with regulatory liquidity requirements, could be adversely impacted, which could adversely impact our financial condition and results of operations. Although our debt issuances have historically kept pace with the funding needs of our members and eligible housing associates, there can be no assurance that this will continue.

 CHANGES IN ECONOMIC CONDITIONS OR FEDERAL FISCAL AND MONETARY POLICY COULD ADVERSELY IMPACT OUR BUSINESS
 We operate with narrow margins and our net income is sensitive to changes in market conditions that can impact the interest we earn and pay and introduce volatility in net income. These conditions include, but are not limited to, the following:
 • volatility in interest rates;
 • fluctuations in both debt and equity capital markets;
 • changes in the fair value of our assets and liabilities;
 • conditions in the financial, credit, mortgage, and housing markets;
 • the willingness and ability of financial institutions to expand lending; and
 • the strength of the U.S. economy and the local economies in which we conduct business, which may be impacted by inflation/deflation, labor shortages, supply chain disruptions, and geopolitical instability or conflicts.
 Our financial condition, results of operations, and ability to pay dividends could be negatively affected by changes in one or more of these conditions. Additionally, our business and results of operations may be affected by the fiscal and monetary policies of the federal government and its agencies, including the Federal Reserve, which regulates the supply of money and credit in the U.S. The Federal Reserve's policies directly and indirectly influence the yield on interest-earning assets and the cost of interest-bearing liabilities. For example, in response to high inflation, the FOMC raised the target range for the federal funds rate throughout 2022 and 2023. Any future rate changes will continue to impact our business as well as the business of our members.
 Further events impacting market conditions, such as civil unrest, climate change, or other natural disasters, may impact the economy and require actions by the federal government and its agencies in an effort to stabilize market conditions. Responses to those actions and the resulting impact on demand for advances could adversely affect our financial condition, results of operations, and ability to pay dividends. Refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Conditions in the Financial Markets " for additional information on recent market activity.
 WE COULD BE ADVERSELY AFFECTED BY INEFFECTIVE USE OF HEDGING STRATEGIES OR OUR INABILITY TO ENTER INTO DERIVATIVE INSTRUMENTS ON ACCEPTABLE TERMS
 We use derivatives to manage interest rate risk. Our effective use of derivative instruments depends upon management's ability to determine the appropriate hedging strategies and positions in light of our assets and liabilities as well as prevailing and anticipated market conditions. In addition, the effectiveness of our hedging strategies depends upon our ability to enter into derivatives with acceptable counterparties, on terms desirable to us, and in quantities necessary to hedge our corresponding assets and liabilities. Further, the cost of entering into derivative instruments could increase as a result of changes in legislation and regulations regarding over-the-counter derivatives, including increased margin and capital requirements, and increased regulatory costs and transaction fees associated with clearing and custodial agreements. If we are unable to manage our hedging positions properly, or are unable to enter into derivative instruments on desirable terms, we may incur higher funding costs and be unable to effectively manage our interest rate risk and other risks, which could negatively affect our financial condition and results of operation.

 EXPOSURE TO OPTION RISK IN OUR FINANCIAL ASSETS AND LIABILITIES COULD HAVE AN ADVERSE EFFECT ON OUR BUSINESS
 Our mortgage assets provide homeowners the option to prepay their mortgages prior to maturity. The effect of changes in interest rates can exacerbate prepayment or extension risk, which is the risk that mortgage assets will be refinanced by the mortgagor in low interest rate environments or will remain outstanding longer than expected at below-market yields when interest rates increase. Our advances, consolidated obligations, and derivatives may provide us, the borrower, the issuer, or the counterparty with the option to call or put the asset or liability. These options leave us susceptible to unpredictable cash flows associated with our financial assets and liabilities. The exercise of the option and the prepayment or extension risk is dependent upon general market conditions and could have an adverse effect on our financial condition and results of operations.

 CREDIT RISK
 WE COULD BE ADVERSELY AFFECTED BY OUR EXPOSURE TO CREDIT RISK
 We are exposed to credit risk based on the deterioration in the creditworthiness of the obligor or the credit quality of a security instrument. We assume unsecured and secured credit risk exposure in that a borrower or counterparty could default and we may suffer a loss if we are not able to fully recover amounts owed to us in a timely manner. Our risk of credit losses may be exacerbated by economic conditions, such as a downturn in the housing markets, including a reduction in home prices, higher delinquencies due in part to the effects of inflation, as well as financial difficulties or failures of mortgage servicers. In addition, increased risk of credit losses may be the result of a decrease in the value of collateral securing our advances or mortgage loans, which could be due to the effects of climate change or other catastrophic events.
 We attempt to mitigate unsecured credit risk by limiting the terms of unsecured investments and the borrowing capacity of our counterparties. We attempt to mitigate secured credit risk through collateral requirements and credit analysis of our borrowers and counterparties. We require collateral on advances, standby letters of credit, certain mortgage loan credit enhancements provided by PFIs, certain investments, and derivatives. All advances, standby letters of credit, and applicable mortgage loan credit enhancements are required to be fully collateralized. We evaluate the types of collateral pledged by our borrowers and counterparties and assign a borrowing capacity to the collateral, generally based on a percentage of its unpaid principal balance or estimated market value, if available. We generally have the ability to call for additional or substitute collateral during the life of an obligation to ensure we are fully collateralized. Notwithstanding these mitigating factors, we may suffer losses that could adversely impact our financial condition and results of operations.

 If a borrower or counterparty fails or does not meet its obligations to us, we have the right to liquidate or take ownership of the collateral covering the obligation. However, if the liquidation value of the collateral is less than the value of the outstanding obligation, we may incur losses that could adversely affect our financial condition and results of operations. If we are unable to secure the obligations of borrowers and counterparties, this could negatively impact our financial condition and results of operations.
 WE ARE JOINTLY AND SEVERALLY LIABLE FOR THE CONSOLIDATED OBLIGATIONS OF OTHER FHLBANKS AND MAY BE REQUIRED TO PROVIDE FINANCIAL ASSISTANCE TO OTHER FHLBANKS
 Each of the FHLBanks relies upon the issuance of consolidated obligations as a primary source of funds. Consolidated obligations are the joint and several obligations of the 11 FHLBanks and are backed only by the financial resources of the FHLBanks. They are not obligations of the U.S. Government, and the U.S. Government does not guarantee them. The Finance Agency, at its discretion, may require any FHLBank to make principal and/or interest payments due on any consolidated obligation, whether or not the primary obligor FHLBank has defaulted on the payment of that consolidated obligation. Furthermore, if the Finance Agency determines that an FHLBank is unable to satisfy its obligations, it may allocate the outstanding liability among the remaining FHLBanks on a pro-rata basis in proportion to each FHLBank's participation in all consolidated obligations outstanding, or on any other basis that it may determine. Accordingly, we could incur liability beyond our primary obligation under consolidated obligations, which could negatively affect our financial condition and results of operations. Moreover, we may not pay dividends to, or redeem or repurchase capital stock from, any of our members if timely payment of principal and interest on all FHLBank consolidated obligations has not been made. Accordingly, our ability to pay dividends or to redeem or repurchase capital stock may be affected not only by our financial condition, but by the financial condition of the other FHLBanks.
 Due to our relationship with other FHLBanks, we could also be impacted by events other than the default on a consolidated obligation. Events that impact other FHLBanks include, but are not limited to, member failures and capital deficiencies. These events may cause the Finance Agency, at its discretion, to require any FHLBank to either provide capital to or buy assets of any other FHLBank. If we are called upon by the Finance Agency to do either of these items, it may negatively impact our financial condition.
 Additionally, the FHLBank Act requires each FHLBank to establish and fund an AHP. Annually, the FHLBanks recognize AHP assessment expense, in aggregate, equal to the greater of 10 percent of their current year earnings or $100 million. If the FHLBanks do not make the minimum $100 million AHP contribution in a given year (i.e., a shortfall), we could be required to contribute more than 10 percent of our current year net earnings. An increase in our AHP contributions due to a shortfall or other legislative or regulatory actions could impact our financial condition and results of operations as well as our ability to pay dividends.

 ACTUAL OR PERCEIVED CHANGES IN THE FHLBANKS' CREDIT RATINGS AS WELL AS THE U.S. GOVERNMENT'S CREDIT RATING COULD ADVERSELY AFFECT OUR BUSINESS
 Our consolidated obligations are currently rated AA+/A-1+ with a stable outlook by S&P and Aaa/P-1 with a negative outlook by Moody's. These ratings are subject to reduction or withdrawal at any time by a NRSRO, and the FHLBank System may not be able to maintain these credit ratings. For example, in November 2023, Moody's affirmed the ratings of our consolidated obligations of Aaa/P-1 and changed the outlook on the ratings to negative from stable, consistent with its ratings action taken with respect to the United States Government. Adverse rating agency actions on the FHLBank System or U.S. Government may reduce investor confidence and negatively affect our cost of funds and ability to issue consolidated obligations on acceptable terms, which could adversely impact our financial condition and results of operations.
 Certain products and transactions that we offer or use may be impacted by rating downgrades. Demand for certain Bank products, including, but not limited to, standby letters of credit and standby bond purchase agreements, is influenced by our credit rating. A reduction in our credit rating could weaken or eliminate demand for such products, and our financial condition and results of operations could be adversely affected. For cleared derivatives, the clearinghouse determines initial margin requirements and generally credit ratings are not factored into the initial margin. However, clearing agents may require additional initial margin to be posted based on credit considerations, including but not limited to, credit rating downgrades.
 INCREASES IN DELINQUENCY OR LOSS ESTIMATES ON OUR MORTGAGE LOANS MAY HAVE AN ADVERSE IMPACT ON OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The condition of the U.S. housing market can have a significant impact on the Bank. If economic conditions weaken and result in increased unemployment and a decline in home prices, we could see an increase in loan delinquencies or loss estimates and decide to increase our allowance for credit losses on mortgage loans. In addition, the occurrence of weather-related events, other natural or environmental disasters, civil unrest, widespread health emergencies, or other disruptive events could impact the ability of borrowers to continue to make principal and interest payments on mortgage loans or cause a decline in the underlying value of the mortgage loans, resulting in additional loss estimates. Further, to the extent that mortgage insurance providers fail to fulfill their obligations to pay us for claims, we could bear additional losses on certain mortgage loans with outstanding mortgage insurance coverage. As a result, our financial condition and results of operations could be adversely impacted.

 OPERATIONAL RISK
 FAILURES OR INTERRUPTIONS IN INTERNAL CONTROLS, INFORMATION SYSTEMS, AND OTHER OPERATING TECHNOLOGIES COULD HARM OUR FINANCIAL CONDITION, RESULTS OF OPERATIONS, REPUTATION, AND RELATIONS WITH MEMBERS
 Control failures, including failures in our controls over financial reporting, or business interruptions with members, could result from human error, fraud, breakdowns in information and computer systems, lapses in operating processes, and natural or man-made disasters, including those resulting from the effects of climate change, civil unrest, or widespread health emergencies. If a significant control failure or business interruption were to occur, it could materially damage our financial condition and results of operations. We may not be able to foresee, prevent, mitigate, reverse, or repair the negative effects of such failures or interruptions.
 We rely heavily upon information systems and other operating technologies to conduct and manage our business. To the extent that our technology fails to keep up with our changing environment, we may be unable to conduct and manage our business effectively. In addition, any technical failures or interruptions in key systems or other operating technologies, including any "cyberattacks" or other breaches of technical security, could jeopardize the confidentiality or integrity of our information, or otherwise cause interruptions in our operations. These threats may increase as a result of the increased capabilities of artificial intelligence and other emerging technologies that may be used maliciously, as well as geopolitical instability or conflicts. Although we have implemented a disaster recovery and business continuity plan, we can make no assurance that it will be able to prevent, timely and adequately address, or mitigate the negative effects of all technical failures or interruptions. Any technical failure or interruption could harm our member relations, risk management, and profitability, and could adversely impact our financial condition and results of operations. Refer to " Item 1C. Cybersecurity " for additional information on our information security risk management.

 RELIANCE ON THIRD PARTIES COULD HAVE A NEGATIVE IMPACT ON OUR BUSINESS
 As part of our business, we rely on third parties for certain services essential to ongoing operations, including but not limited to, IT infrastructure and software services, administration of our mortgage loan program, and servicing of our consolidated obligations, and could be adversely impacted by disruptions in those services. In addition, we utilize professional and contractual services to support certain strategic initiatives. The success or timing of those initiatives could be adversely impacted if services are not performed or executed as expected.
 We participate in the MPF program with the FHLBank of Chicago. In its role as MPF Provider, the FHLBank of Chicago provides the infrastructure and operational support for the MPF program and is responsible for publishing and maintaining the MPF Guides, which detail the requirements PFIs must follow in originating, selling, and servicing MPF loans. If the FHLBank of Chicago changes its MPF Provider role, ceases to operate the MPF program, or experiences a failure or interruption in its information systems and other technology, our mortgage purchase business could be adversely affected, and we could experience a related decrease in our net interest margin and profitability. In the same way, we could be adversely affected if any of the FHLBank of Chicago's third-party vendors supporting the operation of the MPF program were to experience operational or technical difficulties.
 We also rely on the Office of Finance for, among other things, the issuance of consolidated obligations, servicing of all outstanding debt, and managing the FHLBank System's relationship with the rating agencies with respect to consolidated obligations. A disruption in any of these services due to events such as IT or operational failures, including cyber-attacks, civil unrest, climate change, or other natural disasters, could affect our ability to access funding, and could negatively impact our business operations, financial condition, and results of operations.
 THE IMPACT OF FINANCIAL MODELS AND THE UNDERLYING ASSUMPTIONS USED TO VALUE FINANCIAL INSTRUMENTS AND COLLATERAL MAY HAVE AN ADVERSE IMPACT ON OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The degree of management judgment involved in determining the fair value of financial instruments or collateral is dependent upon the availability of quoted market prices or observable market parameters. For financial instruments and collateral that are actively traded and have quoted market prices or parameters readily available, there is little to no subjectivity in determining fair value. If market quotes are not available, fair values are based on discounted cash flows using market estimates of interest rates and volatility or on dealer prices or prices of similar instruments. We utilize external and internal pricing models to determine the fair value of certain financial instruments and collateral. For prices obtained externally, as per our established procedure, we review the prices and compare them to other vendors for reasonableness. In addition, on an annual basis, we conduct reviews of our pricing vendors to confirm and further augment our understanding of the vendors' pricing processes, methodologies, and control procedures for investment securities. For prices determined by internal pricing models, the underlying assumptions are based on management's best estimates for discount rates, prepayments, market volatility, and other factors.
 The assumptions used in both external and internal pricing models could have a significant effect on the reported fair values of assets and liabilities or collateral, the related income and expense, and the expected future behavior of assets and liabilities or collateral. While models we use to value financial instruments and collateral are subject to periodic validation by independent parties, rapid changes in market conditions could impact the value of our financial instruments and collateral. The use of different models and assumptions, as well as changes in market conditions, could impact our financial condition and results of operations as well as the amount of collateral we require from borrowers and counterparties.
 The information provided by our internal financial models is also used in making business decisions relating to strategies, initiatives, transactions, and products. We have adopted controls, procedures, and policies to monitor and manage assumptions used in our internal models. However, models are inherently imperfect predictors of actual results because they are based on assumptions about future performance or activities. Changes in any models or in any of the assumptions, judgments, or estimates used in the models may cause the results generated by the model to be materially different. If the results are not reliable due to inaccurate assumptions, we could make poor business decisions, including asset and liability management, or other decisions, which could result in an adverse financial impact.

 GENERAL RISK FACTORS
 THE INABILITY TO ATTRACT AND RETAIN KEY PERSONNEL COULD ADVERSELY IMPACT OUR BUSINESS
 We rely heavily upon our employees in order to successfully execute our business and strategies. The success of our business mission depends, in large part, on our ability to attract and retain key personnel with required talents and skills. We may be unable to hire or retain key personnel with the needed talents or skills if we fail to offer a competitive employment package and work arrangements, which is increasingly important during periods in which economic conditions drive labor shortages and/or high rates of employee turnover. In addition, if we lack a diverse, equitable, and inclusive working environment, or fail to develop and execute a succession plan, our business operations could be adversely impacted.

 NATURAL DISASTERS, INCLUDING THOSE FROM SIGNIFICANT CLIMATE CHANGE, COULD ADVERSELY AFFECT OUR MEMBERS AND OUR BUSINESS, FINANCIAL CONDITION, AND RESULTS OF OPERATIONS

 The occurrence of weather-related events and other natural or environmental disasters, especially ones affecting our district, could negatively impact our members and business, financial condition, and results of operations. The frequency, intensity, and duration of extreme weather and climate-related disaster events have increased. These natural disasters, including those resulting from significant climate change, could destroy or damage our facilities or other properties of our members (such as collateral that members have pledged to secure advances or mortgages), disrupt business, increase the probability of power or other outages, negatively affect the livelihood of borrowers of members, or otherwise cause significant economic dislocation in the affected regions. Any of these situations may adversely affect our financial condition and results of operations.

 There is also an increasing focus from investors, policy makers, regulators, and other stakeholders on climate change and other ESG matters. Enhanced governmental, regulatory, and societal attention to climate change and other ESG matters, including expanding mandatory and voluntary reporting, diligence, and disclosure, could expand the nature, scope, complexity, and cost of matters that we are required to control, assess, and report.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY
 RISK MANAGEMENT AND STRATEGY

 Information security risk includes the risk that cyber incidents and threats could result in a failure or interruption of our business operations. A cybersecurity incident is an unauthorized occurrence, or a series of related unauthorized occurrences, through information systems that jeopardizes the confidentiality, integrity, or availability of our information systems or any information residing therein. Cybersecurity threats are potential unauthorized occurrences on or conducted through information systems that may result in adverse effects on the confidentiality, integrity, or availability of information systems or any information residing therein. Information systems are any electronic information resources, owned or used by us, including physical or virtual infrastructure controlled by such information resources, or their components, organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of our information to maintain or support our operations. We have implemented processes to identify, assess, and manage material risks from cybersecurity incidents or threats that may directly or indirectly impact our business strategy, results of operations, or financial condition. Please refer to " Item 1A. Risk Factors " for additional information on our operational risk, which includes the risk of failures or interruptions in information systems resulting from cybersecurity threats or incidents.

 Our cybersecurity program is designed to identify, assess, and manage material risks from cybersecurity threats and to protect the confidentiality, integrity, and availability of our IT assets and data. We utilize a widely adopted industry framework to guide and benchmark the activities of our information security program in alignment with our risk appetite statement. Our cybersecurity program includes specific controls and processes for the monitoring, mitigation, and reporting associated with cybersecurity risks. For example, administrative, physical, and logical controls are in place for identifying, monitoring, and controlling system access, sensitive data, and system changes. In addition, we employ an information security training program that includes security training lessons and phishing exercises for all employees as well as mandatory staff training on cyber risks. We also regularly engage with third-parties to test, maintain, and enhance our cybersecurity risk management practices and threat monitoring. These engagements include, among other things, penetration testing, detection and response services, cybersecurity tabletops, and cybersecurity framework assessments. We also maintain cyber insurance coverage in an effort to reduce financial losses stemming from a security incident.

 To ensure the continuance of our operations in the event of a cybersecurity incident or threat, we have established an Information Security Policy and Security Incident Response Plan, and have adopted a business continuity management program.

 Our Information Security Policy establishes administrative, technical, and physical safeguards designed to protect the security, confidentiality, and integrity of Bank information in accordance with Finance Agency regulations, the Gramm-Leach-Bliley Act and the interagency guidelines issued thereunder, and applicable laws.

 Our Security Incident Response Plan determines how cybersecurity threats and incidents are identified, classified, and escalated, including for the purposes of reporting, and providing relevant information to senior management and the Board of Directors. The Security Incident Response Plan requires management to assess materiality of the threat or incident for purposes of public disclosure.

 Our Security Incident Response Plan includes third-party cybersecurity incidents and threats, as we do rely on third-party information systems and other technologies. As part of our vendor risk management process, we undertake due diligence of third-party systems with whom we interact, including risk profiling and classification, in addition to requiring data protection covenants in our vendor agreements. Our vendor risk management program includes regular reviews and oversight of service providers, including performance and technology reviews, and escalation of any unsatisfactory reviews.

 Our business continuity management program is designed to ensure that necessary resources are in place to protect us from potential loss during a disruption, which includes the unavailability of IT assets due to unintentional events like fire, power loss, and other technical incidents, such as hardware failures.

 During the period covered by this report, risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, did not have a material impact on our business strategy, results of operations, or financial condition. Cybersecurity incidents may occur in the future and any such cybersecurity incident could result in significantly harmful consequences to us, our members, and their customers. We are prepared to assess materiality of any such cybersecurity incident from several perspectives including, but not limited to, our ability to continue to service our members and protect the privacy of the data they or their customers have entrusted to us, lost revenue, disruption of business operations, increased operating costs, litigation, and reputational harm.

 GOVERNANCE

 Our Information Security Department is led by the CIO, who reports to the President and CEO. Our CIO establishes our strategic direction and provides executive support for our information security program, and has significant experience in information systems and information security. Refer to " Item 10. Directors, Executive Officers and Corporate Governance " for more information.

 Our dedicated Information Security Department is comprised of specialized professionals responsible for the day-to-day, hands-on management of cybersecurity risk, including the processes and procedures to mitigate and implement protective, proactive, and reactive measures to protect us against this risk. Personnel in this department hold a variety of technical certifications relevant to their job functions and engage in continuing education. This department is also responsible for developing, documenting, and approving our technical information security control standards, guidelines, and procedures designed to preserve the confidentiality, integrity, and availability of our IT assets and data under our control.

 Our Technology and Operations Committee provides independent and integrated oversight over our information security program, physical security program, business continuity program, security policies and procedures, and security exceptions and violations. This committee is comprised of leadership representatives from our operational risk, information security, IT, and legal departments, as well as other departments that provide both specific, technical and multidisciplinary expertise to the committee. This committee is responsible for reviewing and approving our Information Security Policy. It also receives regular, prompt, and periodic information from the Information Security Department, which in turn provides periodic, regular and prompt reporting to the Technology Committee of the Board of Directors on topics such as threat intelligence, major cybersecurity risk areas, technologies and best practices, and any cybersecurity incidents that may have impacted us, as well risk assessment, management, and monitoring updates, as applicable or needed.

 Our Board of Directors is responsible for the oversight of our information security program and establishes our information security risk appetite. The Technology Committee of our Board approves certain Bank-wide governing policies, including our Information Security Policy, as well as other standards, guidelines, and procedures for IT and information security. It also oversees the development of mitigation plans, monitors the tactical implementation of policy, and engages in detailed risk assessments.

 Our Board of Directors receives regular presentations and reports throughout the year on cybersecurity and information security addressing a broad range of topics. These topics include, but are not limited to, updates on technology trends, regulatory developments, legal issues, policies and practices, information security resources, environmental threats and vulnerability assessments, and efforts to prevent, detect, and respond to potential gaps, internal and external incidents and critical threats. At least quarterly, our Board of Directors discusses cybersecurity and information security risks with our CIO. Our Board of Directors is also required to complete cybersecurity training and participate in a cloud computing education session annually. Our policies and processes are designed such that the Board of Directors would receive prompt and timely information from Bank management on any cybersecurity or information security incident or threat that may pose significant risk to us and would continue to receive regular reports on any incident until its conclusion.

 ITEM 2. PROPERTIES

 Our headquarters is located at 909 Locust Street, Des Moines, Iowa. We currently occupy 94,000 of the approximate 226,000 square feet of office space, and have leased or are in the process of leasing the remaining space. We also lease an off-site back-up facility with approximately 3,500 square feet in Urbandale, Iowa and approximately 3,000 square feet of office space in Washington, D.C. to support government relations, which is shared with two other FHLBanks.

 ITEM 3. LEGAL PROCEEDINGS

 Refer to " Item 8. Financial Statements and Supplementary Data — Note 14 — Commitments and Contingencies " for information regarding legal proceedings.

 ITEM 4. MINE SAFETY DISCLOSURES

 Not applicable.

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 We are a cooperative. This means we are owned by our customers, whom we call members. Our current and former members own all of our outstanding capital stock. Our capital stock is not publicly traded and has a par value of $100 per share. All shares are issued, redeemed, or repurchased by us at the stated par value. Our capital stock may be redeemed with a five year notice from the member or voluntarily repurchased by us at par value, subject to certain limitations set forth in our Capital Plan. At February 29, 2024, we had 1,253 current members that held 67 million shares of capital stock and 14 former members that held less than one million shares of MRCS.
 For information on our dividends, see " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Capital — Dividends."

 ITEM 6. [RESERVED]

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 Our MD&A is designed to provide information that will help the reader develop a better understanding of our financial statements, changes in our financial statements from year to year, and the primary factors driving those changes. Readers also should carefully review " Forward-Looking Information " and " Item 1A. Risk Factors " for a description of the forward-looking statements contained in this annual report on Form 10-K and a discussion of the factors that might cause our actual results to differ, perhaps materially, from these forward-looking statements. Unless expressly stated otherwise, the comparisons presented in this MD&A refer to the year-over-year comparison of changes in our financial condition and results of operations as of and for the years ended December 31, 2023 and December 31, 2022. Discussion of 2021 items and the year-over-year comparison of changes in our financial condition and results of operations as of and for the years ended December 31, 2022 and December 31, 2021 can be found in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2022 Form 10-K, filed with the SEC on March 8, 2023.

 Our MD&A is organized as follows:

 CONTENTS

 Executive Overview

 Conditions in the Financial Markets

 Selected Financial Data

 Results of Operations

 Net Interest Income

 Other Income (Loss)

 Hedging Activities

 Other Expense

 Statements of Condition

 Financial Highlights

 Mortgage Loans

 Consolidated Obligations

 Capital

 Derivatives

 Liquidity and Capital Resources

 Critical Accounting Estimates

 Legislative and Regulatory Developments

 Off-Balance Sheet Arrangements

 Risk Management

 EXECUTIVE OVERVIEW

 Our Bank is a member-owned cooperative serving shareholder members in our district. Our mission is to be a reliable provider of funding, liquidity, and services for our members so that they can meet the housing, business, and economic development needs of the communities they serve. In addition, we help to meet the economic and housing needs of our communities through our affordable housing and community investment initiatives. Our operating model balances the trade-off between attractively priced products, reasonable returns on capital stock, maintaining an adequate level of capital to meet regulatory capital requirements, and maintaining adequate retained earnings to preserve the par value of member-owned capital stock. Our members include commercial banks, savings institutions, credit unions, insurance companies, and CDFIs.

 Affordable Housing and Community Impact
 During 2023, we disbursed $49 million of AHP funds through our Competitive and Set-Aside down payment assistance programs as a part of our ongoing mission to support members' affordable housing and community development needs. We also recorded various discretionary community and housing contributions during 2023, including contributions to our Member Impact Fund totaling $37 million and a $5 million voluntary AHP contribution. Further, in partnership with our Hawaii members and related trade associations, we provided $5 million during 2023 to local organizations in support of communities impacted by the Maui wildfires.

 Financial Results
 Our financial condition and results of operations are influenced by global and national economies, local economies within our district, and the conditions in the financial, housing, and credit markets, all of which impact the interest rate environment. The interest rate environment significantly impacts our profitability. Throughout 2022 and 2023, in response to higher inflation, the FOMC raised the target range for the federal funds rate, which led to higher interest rates that bolstered our net interest income. Refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Conditions in the Financial Markets " for additional discussion on economic conditions impacting our financial results.
 In 2023, we reported net income of $962 million compared to $430 million in the prior year.

 Net interest income increased $623 million when compared to the prior year primarily driven by higher short-term interest rates, which improved earnings on invested capital, and growth in advance balances.

 Other income (loss) improved by $25 million when compared to the prior year primarily driven by changes in the fair value of our trading securities, fair value option instruments, economic derivatives, and non-qualified benefit plan assets.

 Other expense increased $60 million during 2023 when compared to the prior year primarily due to an increase in discretionary community and housing contributions of $44 million.

 Refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations " for additional discussion on our results of operations.

 Our total assets increased to $184.4 billion at December 31, 2023, from $164.2 billion at December 31, 2022, driven primarily by an increase in advances and investments. Advances increased $11.3 billion due mainly to an increase in borrowings by large depository institution members. Investments increased $6.4 billion primarily driven by the purchase of agency MBS, partially offset by a decline in short-term investments, specifically federal funds sold and securities purchased under agreements to resell. In addition, mortgage loans increased $1.6 billion due to new loan purchases exceeding paydowns.

 Total capital increased to $9.8 billion at December 31, 2023, from $8.8 billion at December 31, 2022, primarily due to an increase in activity-based capital stock resulting from an increase in advance balances, and an increase in retained earnings. Our regulatory capital ratio increased to 5.44 percent at December 31, 2023, from 5.41 percent at December 31, 2022; and remained above the required regulatory minimum at each period end. Regulatory capital includes capital stock, MRCS, and retained earnings.

 Refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Statements of Condition " for additional discussion on our financial condition.

 Adjusted Earnings

 As part of evaluating our financial performance, we adjust net interest income and net income before assessments, both calculated in accordance with GAAP, for the impact of (i) unpredictable items, including, but not limited to, market adjustments relating to derivative and hedging activities and instruments held at fair value, net asset prepayment fee income, MRCS interest expense, debt extinguishment gains (losses), and (ii) other non-routine items, if applicable. The resulting non-GAAP measure, referred to as our adjusted earnings, reflects both adjusted net interest income and adjusted net income.

 Because our business model is primarily one of holding assets and liabilities to maturity, management believes that the adjusted earnings measure is helpful in understanding our operating results and provides a meaningful period-to-period comparison of our economic performance in contrast to GAAP results, which can be impacted by fair value changes driven by market volatility on financial instruments recorded at fair value or transactions that are considered to be unpredictable or not routine. As a result, management uses the adjusted earnings measure to assess performance under our incentive compensation plans. Non-GAAP financial measures have inherent limitations, and are not audited. While these non-GAAP measures can be used to assist in understanding the components of our earnings, they should not be considered a substitute for results reported under GAAP.

 The adjusted net income methodology is calculated on a post-AHP assessment basis. Management believes AHP assessments are a fundamental component of our business and believes this assessment should be included in our adjusted net income calculation.

 As indicated in the tables that follow, our adjusted net interest income and adjusted net income increased during 2023 when compared to 2022. Our adjusted net interest income was impacted primarily by higher short-term interest rates, which improved earnings on invested capital, and growth in advance balances.

 The following table summarizes the reconciliation between GAAP and adjusted net interest income (dollars in millions):

 2023
 2022

 GAAP net interest income
 $
 1,306
 $

 Exclude:

 Prepayment fees on advances, net1

 Prepayment fees on investments, net2

 MRCS interest expense
 (1)
 (1)

 Market value adjustments on fair value hedges3

 (33)

 Total adjustments

 Include items reclassified from other income (loss):

 Net interest income (expense) on economic hedges
 (51)
 (58)

 Adjusted net interest income
 $
 1,253
 $

 GAAP net interest margin
 0.72
 %
 0.61
 %

 Adjusted net interest margin
 0.69
 %
 0.53
 %

 1 Prepayment fees on advances, net includes basis adjustment amortization and premium and/or discount amortization.

 2 Prepayment fees on investments, net includes basis adjustment amortization, as well as premium and/or discount amortization on non-MBS.

 3 Represents market value gains (losses) on derivatives and hedged items in qualifying hedging relationships.

 The following table summarizes the reconciliation between GAAP net income before assessments and adjusted net income (dollars in millions):

 2023
 2022

 GAAP net income before assessments

 $
 1,069
 $

 Exclude:

 Prepayment fees on advances, net1

 Prepayment fees on investments, net2

 MRCS interest expense
 (1)
 (1)

 Market value adjustments on fair value hedges3

 (33)

 Market value adjustments on economic hedges4

 (6)

 Net gains (losses) on financial instruments held under fair value option
 (92)

 Net gains (losses) on trading securities
 (95)

 Net gains (losses) on extinguishment of debt
 —

 Gains on litigation settlements, net
 —

 Adjusted net income before assessments
 1,052

 Adjusted AHP assessments5

 Adjusted net income
 $
 $

 1 Prepayment fees on advances, net includes basis adjustment amortization and premium and/or discount amortization.

 2 Prepayment fees on investments, net includes basis adjustment amortization, as well as premium and/or discount amortization on non-MBS.

 3 Represents market value gains (losses) on derivatives and hedged items in qualifying hedging relationships.

 4 Represents market value gains (losses) on economic derivatives.

 5 Adjusted AHP assessments for this non-GAAP measure are calculated as 10 percent of adjusted net income before assessments. For additional discussion on AHP assessments, refer to " Item 8. Financial Statements and Supplementary Data — Note 10 — Affordable Housing Program."

 For additional discussion on items impacting our GAAP earnings, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations."

 Replacement of the LIBOR Benchmark Interest Rate
 In March 2021, the Financial Conduct Authority announced that LIBOR would either cease to be provided by any
 administrator or no longer be representative for the more frequently used LIBOR settings, after June 30, 2023. In 2021, we ceased all new LIBOR-indexed transactions and began utilizing SOFR as our dominant rate. As of June 30, 2023, we had transitioned all of our outstanding LIBOR-indexed instruments to reference SOFR immediately after June 30, 2023, or at the beginning of the next reset period following LIBOR cessation. As of September 30, 2023, all of our qualifying contracts had fully transitioned to SOFR. As such, we no longer have any outstanding LIBOR exposure.

 CONDITIONS IN THE FINANCIAL MARKETS

 Economy and Financial Markets

 Throughout 2022 and 2023, the FOMC raised the target range for the federal funds rate. However, noting improving financial conditions and progress towards lower inflation, the Committee decided to maintain the target range at 5.25 to 5.50 percent at its November and December 2023 meetings. At its January 2024 meeting, the FOMC again decided to maintain the current target, stating that it 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 order to return inflation to two percent over time. The Committee stated that it will also continue reducing its holdings of Treasury securities and agency debt and agency MBS.

 In March 2023, several U.S. banks experienced significant deposit outflows and financial difficulties, creating stress for the banking industry and the financial markets in general. During this time, the FHLBanks continued to execute their mission by serving as a reliable source of liquidity and funding for their members.

 Mortgage Markets

 During 2023, mortgage rates increased, on average, compared to 2022. The primary driver of mortgage activity throughout the year was purchase activity as mortgage rates remain elevated. New home sales increased relative to the prior year, while existing home sales declined. Home prices increased in 2023 while prepayment activity decreased relative to the prior year.

 Interest Rates

 The following table shows information on key market interest rates1:

 12-Month Average

 Period End

 Federal funds
 5.03
 %
 1.68
 %
 5.33
 %
 4.33
 %

 SOFR
 5.01
 1.63
 5.38
 4.30

 2-year U.S. Treasury
 4.58
 2.99
 4.23
 4.43

 10-year U.S. Treasury
 3.96
 2.95
 3.88
 3.88

 30-year residential mortgage note
 6.79
 5.28
 6.42
 6.41

 1 Source: Bloomberg.

 In response to higher inflation, the FOMC raised the target range for the federal funds rate, which led to higher interest rates, on average, during 2023 when compared to the prior year.

 SELECTED FINANCIAL DATA

 The following tables present selected financial data for the periods indicated (dollars in millions):

 Statements of Condition
 2023
 2022
 2021
 2020
 2019

 Cash and due from banks
 $
 $
 $
 $
 $
 1,029

 Investments1

 49,828
 43,381
 33,442
 31,497
 38,465

 44,111
 46,530
 80,360

 Mortgage loans held for portfolio, net2

 9,967
 8,348
 7,578
 8,242
 9,334

 Total assets
 184,406
 164,169
 85,852
 87,691
 129,603

 54,537
 69,170
 22,348
 27,345
 29,531

 Bonds
 116,961
 84,337
 55,205
 52,254
 91,553

 Total consolidated obligations3

 171,498
 153,507
 77,553
 79,599
 121,084

 MRCS

 Total liabilities
 174,575
 155,418
 80,014
 81,951
 122,877

 Capital stock — Class B putable
 6,873
 6,250
 3,364
 3,341
 4,517

 Retained earnings
 3,138
 2,618
 2,390
 2,351
 2,165

 Accumulated other comprehensive income (loss)
 ( 180)

 Total capital
 9,831
 8,751
 5,838
 5,740
 6,726

 Regulatory capital ratio4

 5.44
 5.41
 6.74
 6.55
 5.31

 Statements of Income
 2023
 2022
 2021
 2020
 2019

 Net interest income
 $
 1,306
 $
 $
 $
 $

 Provision (reversal) for credit losses on mortgage loans
 —
 —

 Other income (loss)5

 (15)
 (40)

 Community and housing contributions
 —
 —
 —

 All other expense6

 AHP assessments

 Net income

 Selected Financial Ratios7

 Net interest spread8

 0.43
 %
 0.48
 %
 0.39
 %
 0.38
 %
 0.29
 %

 Net interest margin9

 0.72
 0.61
 0.44
 0.45
 0.42

 Return on average equity
 10.30
 6.33
 3.48
 5.88
 5.38

 Return on average capital stock
 14.41
 9.78
 5.92
 9.33
 7.75

 Return on average assets
 0.52
 0.38
 0.23
 0.34
 0.27

 Average equity to average assets
 5.02
 6.02
 6.73
 5.73
 5.10

 1 Investments include interest-bearing deposits, securities purchased under agreements to resell, federal funds sold, trading securities, AFS securities, and HTM securities.

 2 Includes an allowance for credit losses of $ 6 million at December 31, 2023, $ 5 million at December 31, 2022, and $1 million at December 31, 2021, 2020, and 2019.

 3 The total par value of outstanding consolidated obligations of the 11 FHLBanks was $1,204.3 billion, $1,181.7 billion, $652.9 billion, $746.8 billion, and $1,025.9 billion at December 31, 2023, 2022, 2021, 2020, and 2019.

 4 Represents period-end regulatory capital expressed as a percentage of period-end total assets. Regulatory capital includes Class B capital stock (including MRCS) and retained earnings.

 5 Other income (loss) includes, among other things, net gains (losses) on investment securities, net gains (losses) on derivatives, and net gains (losses) on financial instruments held under fair value option. Other income (loss) may also be impacted by net gains on litigation settlements.

 6 All other expense includes, among other things, compensation and benefits, professional fees, and contractual services.

 7 Amounts used to calculate selected financial ratios are based on numbers in actuals. Accordingly, recalculations using numbers in millions may not produce the same results.

 8 Represents yield on total interest-earning assets minus cost of total interest-bearing liabilities.

 9 Represents net interest income expressed as a percentage of average interest-earning assets.

 RESULTS OF OPERATIONS

 Net Interest Income

 Our net interest income is impacted by changes in average interest-earning asset and interest-bearing liability balances, and the related yields and costs. The following table presents average balances and yields/costs of major asset and liability categories (dollars in millions):

 2023
 2022
 2021

 Balance1

 Yield/Cost
 Income/
 Expense2

 Balance1

 Yield/Cost
 Income/
 Expense2

 Balance1

 Yield/Cost
 Income/
 Expense2

 Interest-earning assets

 $
 4,342
 5.01
 %
 $
 $
 1,639
 1.95
 %
 $
 $
 0.11
 %
 $

 10,589
 5.12
 5,213
 1.97
 3,230
 0.07

 14,911
 5.07
 12,431
 1.85
 9,505
 0.07

 MBS3,4,5

 18,957
 5.95
 1,128
 12,356
 2.53
 12,497
 0.73

 Other investments3,4,5,6

 4,322
 3.70
 4,836
 2.20
 5,714
 1.21

 Advances4,7

 120,027
 5.44
 6,533
 66,562
 2.63
 1,750
 47,796
 0.99

 Mortgage loans8

 9,019
 3.54
 7,971
 3.00
 7,714
 2.65

 Loans to other FHLBanks
 5.08
 0.64
 —
 0.12
 —

 Total interest-earning assets
 182,190
 5.30
 9,657
 111,019
 2.50
 2,774
 87,267
 0.97

 Non-interest-earning assets
 3,703
 —
 —
 1,817
 —
 —
 —
 —

 Total assets
 $
 185,893
 5.20
 %
 $
 9,657
 $
 112,836
 2.46
 %
 $
 2,774
 $
 88,202
 0.96
 %
 $

 Interest-bearing liabilities

 $
 1,127
 4.21
 %
 $
 $
 1,559
 0.89
 %
 $
 $
 1,945
 0.01
 %
 $
 —

 Discount notes4

 60,662
 4.80
 2,910
 50,842
 1.87
 21,793
 0.06

 Bonds4

 109,589
 4.92
 5,392
 50,931
 2.21
 1,128
 57,265
 0.79

 Other interest-bearing liabilities9

 6.98
 5.75
 4.96

 Total interest-bearing liabilities
 171,401
 4.87
 8,351
 103,353
 2.02
 2,091
 81,039
 0.58

 Non-interest-bearing liabilities
 5,159
 —
 —
 2,691
 —
 —
 1,225
 —
 —

 Total liabilities
 176,560
 4.73
 8,351
 106,044
 1.97
 2,091
 82,264
 0.57

 Capital
 9,333
 —
 —
 6,792
 —
 —
 5,938
 —
 —

 Total liabilities and capital
 $
 185,893
 4.49
 %
 $
 8,351
 $
 112,836
 1.85
 %
 $
 2,091
 $
 88,202
 0.53
 %
 $

 Net interest income and spread10

 0.43
 %
 $
 1,306

 0.48
 %
 $

 0.39
 %
 $

 Net interest margin11

 0.72
 %

 0.61
 %

 0.44
 %

 Average interest-earning assets to interest-bearing liabilities
 106.29
 %

 107.42
 %

 107.68
 %

 1 Average balances are calculated on a daily weighted average basis and do not reflect the effect of derivative master netting arrangements with counterparties and/or clearing agents.

 2 Interest income and expense amounts reported for advances, MBS, other investments, and consolidated obligation bonds include gains (losses) on hedged items and derivatives in qualifying fair value hedge relationships.

 3 The average balance of AFS and HTM securities is reflected at amortized cost.

 4 Average balances reflect the impact of fair value hedging adjustments and/or fair value option adjustments.

 5 Interest income on investment securities includes prepayment fees, net of related amortization, of $11 million, $21 million, and less than $1 million for the years ended December 31, 2023, 2022, and 2021.

 6 Other investments primarily include U.S. Treasury obligations, other U.S. obligations, GSE and TVA obligations, state or local housing agency obligations, and taxable municipal bonds.

 7 Interest income on advances includes prepayment fees, net of related amortization, of $25 million, $9 million, and $48 million for the years ended December 31, 2023, 2022, and 2021.

 8 Non-accrual loans are included in the average balance used to determine the average yield.

 9 Other interest-bearing liabilities consists of MRCS and/or borrowings from other FHLBanks.

 10 Represents yield on total interest-earning assets minus cost of total interest-bearing liabilities.

 11 Represents net interest income expressed as a percentage of average interest-earning assets.

 The following table presents changes in interest income and interest expense. Changes in interest income and interest expense that are not identifiable as either volume-related or rate-related, but rather attributable to both volume and rate changes, are allocated to the volume and rate categories based on the proportion of the absolute value of the volume and rate changes (dollars in millions).

 2023 vs. 2022

 2022 vs. 2021

 Total Increase
(Decrease) Due to
 Total Increase
(Decrease)
 Total Increase
(Decrease) Due to
 Total Increase
(Decrease)

 Volume
 Rate
 Volume
 Rate

 Interest income

 $
 $
 $
 $
 $
 $

 MBS
 (1)

 Other investments
 (12)
 (12)

 2,053
 2,730
 4,783
 1,033
 1,278

 Mortgage loans

 Loans to other FHLBanks

 —
 —
 —
 —

 Total interest income
 2,627
 4,256
 6,883
 1,681
 1,927

 Interest expense

 (5)
 —

 1,747
 1,962

 Bonds
 2,065
 2,199
 4,264
 (55)

 Other interest-bearing liabilities
 —
 (1)
 —
 (1)

 Total interest expense
 2,275
 3,985
 6,260
 (16)
 1,641
 1,625

 Net interest income
 $
 $
 $
 $
 $
 $

 Interest income increased during 2023 when compared to 2022 due primarily to the higher interest rate environment, as well as higher advance volumes. Interest expense increased during 2023 when compared to 2022 due primarily to the higher interest rate environment and higher consolidated obligation volumes necessary to fund our asset growth and/or meet liquidity requirements.

 Net interest spread represents the yield on total interest-earning assets minus the cost of total interest-bearing liabilities. Our net interest spread declined during 2023 due primarily to market value losses on our fair value hedge relationships, offset in part by higher net asset prepayment fee income. Net interest margin equals net interest income expressed as a percentage of average interest-earning assets. During 2023, our net interest margin increased when compared to 2022 due primarily to higher short-term interest rates, which improved our earnings on invested capital.

 Other Income (Loss)

 The following table summarizes the components of other income (loss) (dollars in millions):

 For the Years Ended

 2023
 2022

 Net gains (losses) on trading securities
 $
 $
 (95)

 Net gains (losses) on financial instruments held under fair value option
 (92)

 Net gains (losses) on derivatives
 (41)
 (64)

 Net gains (losses) on extinguishment of debt
 —

 Standby letter of credit fees

 Other, net

 Total other income (loss)
 $
 (15)
 $
 (40)

 Other income (loss) improved $25 million during 2023 when compared to 2022. During 2023, we recorded net combined losses of $40 million on our trading securities, fair value option instruments, and economic derivatives, including the related interest settlements, compared to net losses of $53 million in 2022. These changes were primarily driven by the interest rate environment and the reversal of historic gains and losses on instruments as they approach maturity. Refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Hedging Activities " for additional discussion on our economic derivatives. The increase in other, net during 2023 was driven primarily by an increase in the market value of our non-qualified defined benefit plan assets.

 Hedging Activities

 We use derivatives to manage interest rate risk. Accounting rules affect the timing and recognition of income and expense on derivatives and therefore we may be subject to income statement volatility. If a hedging activity qualifies for hedge accounting treatment (fair value hedge), the net interest settlements of interest receivables or payables related to the derivative are recognized as interest income or expense in the relevant income statement line item consistent with the hedged asset or liability. The net fair value gains and losses of derivatives and hedged items designated in fair value hedge relationships are also recognized as interest income or expense. Amortization of basis adjustments from terminated hedges is also recorded in interest income or expense.

 If a hedging activity does not qualify for hedge accounting treatment (economic hedge), the net interest settlements of interest receivables or payables related to the derivative as well as the fair value gains and losses on the derivative are recorded as a component of other income (loss) in "Net gains (losses) on derivatives;" however, there is no fair value adjustment for the corresponding asset or liability being hedged unless changes in the fair value of the asset or liability are normally marked to fair value through earnings (i.e., trading securities and fair value option instruments).

 The following table categorizes the net effect of hedging activities on net income by product (dollars in millions):

 For the Year Ended December 31, 2023

 Net Effect of Hedging Activities
 Mortgage
Loans
 Discount Notes
 Bonds
 Other
 Total

 Net interest income:

 Net amortization/accretion1

 $
 $
 $
 $
 —
 $
 (15)
 $
 —
 $

 Net gains (losses) on derivatives and hedged items

 (33)
 —
 —
 (36)
 —
 (32)

 Net interest settlements on derivatives2

 —
 —
 (229)
 —

 Total impact to net interest income
 —
 (280)
 —

 Other income (loss):

 Net gains (losses) on derivatives3

 —
 (3)
 (2)
 (4)
 —
 —
 (9)

 Net gains (losses) on trading securities4

 —
 —
 —
 —
 —

 Net gains (losses) on financial instruments held under fair value option4

 —
 —
 —
 (92)
 —
 —
 (92)

 Price alignment amount on derivatives5

 —
 —
 —
 —
 —
 (32)
 (32)

 Total impact to other income (loss)
 —
 (2)
 (96)
 —
 (32)
 (40)

 Total net effect of hedging activities6

 $
 $
 $
 (1)
 $
 (96)
 $
 (280)
 $
 (32)
 $

 1 Represents the amortization/accretion of basis adjustments on closed hedge relationships.

 2 Represents the interest component on derivatives that qualify for fair value hedge accounting.

 3 Represents net gains (losses) on economic derivatives and the related interest settlements.

 4 Represents the net gains (losses) on those trading securities and fair value option instruments for which we are utilizing economic derivatives to hedge the risk of changes in fair value.

 5 Represents the price alignment amount on derivatives for which variation margin is characterized as a daily settled contract, which fluctuates with changes in the interest rate environment.

 6 The hedging activity tables do not include the interest component on the related hedged items or the gross prepayment fee income on terminated advance or investment hedge relationships.

 The following table categorizes the net effect of hedging activities on net income by product (dollars in millions):

 For the Year Ended December 31, 2022

 Net Effect of Hedging Activities
 Mortgage
Loans
 Discount Notes
 Bonds
 Other
 Total

 Net interest income:

 Net amortization/accretion1

 $
 $
 $
 —
 $
 —
 $
 (4)
 $
 —
 $

 Net gains (losses) on derivatives and hedged items
 (6)
 —
 —
 (10)
 —

 Net interest settlements on derivatives2

 (16)
 —
 —
 (32)
 —

 Total impact to net interest income
 —
 —
 (46)
 —

 Other income (loss):

 Net gains (losses) on derivatives3

 —
 (1)
 (160)
 —
 —
 (53)

 Net gains (losses) on trading securities4

 —
 (95)
 —
 —
 —
 —
 (95)

 Net gains (losses) on financial instruments held under fair value option4

 —
 —
 —
 —
 —

 Price alignment amount on derivatives5

 —
 —
 —
 —
 —
 (11)
 (11)

 Total impact to other income (loss)
 —
 (1)
 (54)
 —
 (11)
 (53)

 Total net effect of hedging activities6

 $
 $
 $
 (1)
 $
 (54)
 $
 (46)
 $
 (11)
 $

 1 Represents the amortization/accretion of basis adjustments on closed hedge relationships.

 2 Represents the interest component on derivatives that qualify for fair value hedge accounting.

 3 Represents net gains (losses) on economic derivatives and the related interest settlements.

 4 Represents the net gains (losses) on those trading securities and fair value option instruments for which we are utilizing economic derivatives to hedge the risk of changes in fair value.

 5 Represents the price alignment amount on derivatives for which variation margin is characterized as a daily settled contract, which fluctuates with changes in the interest rate environment.

 6 The hedging activity tables do not include the interest component on the related hedged items or the gross prepayment fee income on terminated advance or investment hedge relationships.

 NET AMORTIZATION/ACCRETION

 Net amortization/accretion varies from period to period depending on our hedge relationship termination activities and the maturity, call, or prepayment of assets or liabilities previously in hedge relationships. During 2023, the change in amortization activity when compared to the prior year was driven primarily by the prepayment of advances and investments that were previously in a hedge relationship, as well as the termination of certain advance and investment fair value hedge relationships.

 NET GAINS (LOSSES) ON DERIVATIVES AND HEDGED ITEMS

 Net gains and losses on derivatives and hedged items designated in fair value hedge relationships are recorded in net interest income. Gains (losses) on derivatives and hedged items fluctuate with changes in market conditions and are based on a range of factors, including current and projected levels of interest rates and volatility.

 NET INTEREST SETTLEMENTS ON DERIVATIVES

 Net interest settlements represent the interest component on derivatives that qualify for fair value hedge accounting. These amounts vary from period to period depending on our hedging activities and interest rates and are partially offset by the interest component on the related hedged item within net interest income. The hedging activity tables do not include the impact of the interest component on the related hedged item.

 NET GAINS (LOSSES) ON DERIVATIVES

 We utilize economic derivatives to manage certain risks on our Statements of Condition. Gains and losses on economic derivatives include interest settlements. Interest settlements represent the interest component on economic derivatives. These amounts vary from period to period depending on our hedging activities and interest rates. During 2023, we recorded net losses of $9 million on our economic derivatives, compared to net losses of $53 million during 2022. These changes were primarily driven by the interest rate environment.

 Other Expense
 The following table shows the components of other expense (dollars in millions):

 For the Years Ended

 2023
 2022

 Compensation and benefits
 $
 $

 Contractual services

 Professional fees

 Other operating expenses

 Total operating expenses

 Federal Housing Finance Agency

 Office of Finance

 Community and housing contributions

 Other, net

 Total other expense
 $
 $

 Other expense increased $60 million during 2023 when compared to 2022 primarily due to discretionary community and housing contributions. During 2023, we recorded contributions of $37 million to our Member Impact Fund, a discretionary matching grant program intended to support affordable housing and community development, and also recorded a $5 million voluntary AHP contribution. Further, in partnership with our Hawaii members and related trade associations, we provided $5 million during 2023 to local organizations in support of communities impacted by the Maui wildfires.

 STATEMENTS OF CONDITION

 Financial Highlights

 Our total assets increased to $184.4 billion at December 31, 2023, from $164.2 billion at December 31, 2022. Our total liabilities increased to $174.6 billion at December 31, 2023, from $155.4 billion at December 31, 2022. Total capital increased to $9.8 billion at December 31, 2023, from $8.8 billion at December 31, 2022. See further discussion of changes in our financial condition in the sections that follow.

 The following table summarizes our advances by type of institution (dollars in millions):

 2023
 2022

 Commercial banks
 $
 75,997
 $
 66,303

 Savings institutions
 1,359
 1,498

 Credit unions
 13,458
 12,989

 Insurance companies
 31,992
 31,433

 CDFIs

 Total member advances
 122,814
 112,235

 Housing associates

 Non-member borrowers

 $
 123,221
 $
 112,374

 Our total advance par value increased $10.8 billion or 10 percent at December 31, 2023 when compared to December 31, 2022, primarily due to an increase in borrowings by large depository institution members.

 INTEREST RATE PAYMENT AND REDEMPTION TERMS

 The following table summarizes advances by interest rate payment and redemption terms (dollars in millions):

 $
 34,208
 $
 43,716

 21,473
 10,196

 Due after three years through five years
 13,640
 7,219

 Due after five years through 15 years
 2,160
 2,533

 —
 —

 71,502
 63,693

 Fixed rate, putable

 —
 —
 —

 Due after five years through 15 years
 —
 —
 —

 —
 —
 —

 Variable rate

 16,828
 6,463

 —
 16,341

 Due after three years through five years
 —
 —

 Due after five years through 15 years

 18,795
 23,908

 Variable rate, callable1

 1,585
 11,097

 5,423
 6,701

 Due after three years through five years
 24,647
 5,493

 31,655
 23,291

 Other2

 —
 —

 Due after three years through five years
 —
 —

 Due after five years through 15 years
 —
 —

 —
 —

 1,267
 1,313

 Overdrawn demand deposit accounts
 —
 —

 Total advance par value
 123,221
 112,374

 Fair value hedging adjustments3

 (697)
 (1,183)

 Total
 $
 $

 1 Callable advances are those advances that may be contractually prepaid by the borrower on predetermined dates without incurring prepayment or termination fees. Interest rates on our variable rate callable advances reset at each call date to be consistent with either the underlying index or our current offering rate in line with our underlying cost of funds.

 2 Includes fixed-rate amortizing and fixed-rate callable advances.

 3 Primarily represents fair value hedging adjustments on active hedging relationships driven by changes in interest rates.

 At December 31, 2023 and 2022, advances outstanding to our five largest member borrowers totaled $55.0 billion and $50.9 billion, representing 45 percent of our total advances outstanding at each period end. The following table summarizes advances outstanding to our five largest member borrowers at December 31, 2023 (dollars in millions):

 % of Total Advances

 Wells Fargo Bank, N.A.
 $
 37,000

 Athene Annuity and Life Company1

 5,931

 UBS Bank USA
 4,351

 Principal Life Insurance Company
 3,950

 Umpqua Bank
 3,750

 $
 54,982

 1 Excludes $0.6 billion of advances with Athene Annuity & Life Assurance Company, an affiliate of Athene Annuity and Life Company.

 We evaluate advances for credit losses on a quarterly basis and have never experienced a credit loss on our advances. For additional discussion on our advance credit risk, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Credit Risk — Advances."

 Mortgage Loans

 The following table summarizes information on our mortgage loans held for portfolio (dollars in millions):

 2023
 2022

 Fixed rate conventional loans
 $
 9,506
 $
 7,890

 Fixed rate government-insured loans

 9,884
 8,277

 Discounts
 (11)
 (11)

 Basis adjustments from mortgage loan purchase commitments
 (13)
 (9)

 Total mortgage loans held for portfolio
 9,973
 8,353

 Allowance for credit losses
 (6)
 (5)

 Total mortgage loans held for portfolio, net
 $
 9,967
 $
 8,348

 Our total mortgage loans increased $1.6 billion or 19 percent at December 31, 2023 when compared to December 31, 2022. The increase was primarily due to new loan purchases exceeding principal paydowns, driven in part by a decrease in prepayment activity as mortgage rates remained elevated.

 REDEMPTION TERMS
 The following table summarizes our fixed rate mortgage loans held for portfolio by redemption terms (dollars in millions):

 Redemption Term
 2023
 2022

 $
 $

 Due after one year through five years
 1,386
 1,288

 Due after five years through fifteen years
 3,532
 3,166

 4,634
 3,515

 $
 9,884
 $
 8,277

 We evaluate mortgage loans for credit losses on a quarterly basis. For additional discussion on our mortgage loan credit risk, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Credit Risk — Mortgage Loans."

 The following table summarizes the carrying value of our investments (dollars in millions):

 Short-term investments1

 $
 3,481
 $
 2,031

 7,120
 9,415

 Total short-term investments
 22,001
 24,036

 Long-term investments2

 MBS

 9,805

 U.S. obligations single-family3

 4,399
 3,678

 Private-label residential
 —
 —

 Total MBS
 22,990
 14,254

 Non-MBS

 U.S. Treasury obligations3

 2,925
 2,501

 Other U.S. obligations3

 Other4

 Total non-MBS
 4,837
 5,091

 Total long-term investments
 27,827
 19,345

 Total investments
 $
 49,828
 $
 43,381

 1 Short-term investments have original maturities equal to or less than one year.

 2 Long-term investments have original maturities of greater than one year.

 3 Represents investment securities backed by the full faith and credit of the U.S. Government.

 4 Consists primarily of taxable municipal bonds.

 Our investments increased $6.4 billion or 15 percent at December 31, 2023 when compared to December 31, 2022. The increase was driven by the purchase of agency MBS, partially offset by a decline in short-term investments, specifically federal funds sold and securities purchased under agreements to resell. At December 31, 2023 and 2022, we had agency MBS with a total par value of $692 million and $181 million that were traded but not yet settled. These investments were recorded as "available-for-sale" on our Statements of Condition with a corresponding payable recorded in "other liabilities."

 The Finance Agency limits our investments in MBS by requiring that the balance of our MBS not exceed three times regulatory capital at the time of purchase. At December 31, 2023, our ratio of MBS to regulatory capital was 2.35 compared to 1.69 at December 31, 2022.

 REDEMPTION TERMS AND YIELDS

 The following table summarizes the carrying value and yield characteristics of our AFS and HTM investment portfolios on the basis of remaining terms to contractual maturity. Expected maturities of some securities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without call or prepayment fees (dollars in millions):

 2023
 2022

 Due after one year through five years
 Due after five years through 10 years
 Due after 10 years
 Carrying Value
 Carrying Value

 AFS securities

 Non-MBS

 Other U.S. obligations1

 $
 $
 $
 —
 $
 —
 $
 $

 Other2

 —

 Total non-MBS
 1,290
 1,917

 MBS

 U.S. obligations
 single-family1

 —
 —
 —
 4,398
 4,398
 3,676

 —
 —
 —

 1,988
 15,170
 9,760

 Total MBS
 1,988
 15,170
 4,974
 22,533
 13,646

 Total AFS securities
 2,405
 15,415
 5,390

 HTM securities

 Non-MBS

 —

 —

 Total non-MBS
 —

 MBS

 U.S. obligations
 single-family1

 —
 —
 —

 —

 Private-label
 —
 —

 Total MBS
 —

 Total HTM securities

 $
 —
 $
 $
 $
 $
 $

 Weighted-average yields on:

 AFS securities3

 4.78
 %
 5.16
 %
 4.04
 %
 5.96
 %

 HTM securities3

 —
 %
 4.40
 %
 4.77
 %
 5.56
 %

 1 Represents investment securities backed by the full faith and credit of the U.S. Government.

 2 Consists primarily of taxable municipal bonds.

 3 The weighted average yields on AFS and HTM securities are calculated as the sum of each debt security using the period end balances multiplied by the coupon rate, divided by the total debt securities in the applicable HTM or AFS portfolio. The result is then multiplied by 100 to express it as a percentage.

 INTEREST RATE PAYMENT TERMS

 The following table summarizes the interest rate payment terms of investment securities (dollars in millions):

 2023
 2022

 Trading securities at fair value

 $
 3,152
 $
 2,817

 Total trading securities
 $
 3,152
 $
 2,817

 AFS securities at amortized cost

 $
 17,485
 $
 9,128

 Variable rate
 6,516
 6,549

 Total AFS securities
 $
 24,001
 $
 15,677

 HTM securities at amortized cost

 $
 $

 Variable rate

 Total HTM securities
 $
 $

 We evaluate investments for credit losses on a quarterly basis. For additional discussion on our investment credit risk, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Credit Risk — Investments."

 Consolidated Obligations

 Consolidated obligations, which include bonds and discount notes, are the primary source of funds to support our advances, mortgage loans, and investments. At December 31, 2023 and 2022, the carrying value of consolidated obligations for which we are primarily liable totaled $171.5 billion and $153.5 billion.

 DISCOUNT NOTES

 The following table summarizes our discount notes, all of which are due within one year (dollars in millions):

 2023
 2022

 Par value
 $
 55,288
 $
 70,002

 Discounts and concession fees1

 (736)
 (725)

 Fair value option adjustments
 (15)
 (107)

 Total
 $
 54,537
 $
 69,170

 1 Concessions represent fees paid to dealers in connection with the issuance of certain consolidated obligation discount notes.

 Our discount notes decreased $14.6 billion or 21 percent at December 31, 2023 when compared to December 31, 2022. Although the balance declined from the prior year-end, during 2023, we continued to utilize discount notes primarily to fund our increase in short-term assets and/or meet our liquidity requirements. Unamortized discounts outstanding at December 31, 2023 were higher than the prior year-end despite a decline in total par value due primarily to the higher interest rate environment, which results in larger discount levels. Fair value option adjustments changed $92 million at December 31, 2023 when compared to December 31, 2022, driven primarily by the interest rate environment and the reversal of historic gains and losses on fair value option discount notes as they approach maturity.

 BONDS

 The following table summarizes information on our bonds (dollars in millions):

 2023
 2022

 Par value
 $
 $

 Discounts and concession fees1

 (29)
 (23)

 (25)
 (298)

 Total
 $
 116,961
 $
 84,337

 1 Concessions represent fees paid to dealers in connection with the issuance of certain consolidated obligation bonds.

 Our bonds increased $32.6 billion or 39 percent at December 31, 2023 when compared to December 31, 2022. During 2023, we increased our utilization of consolidated obligation bonds primarily to fund our asset growth and/or meet our liquidity requirements. Fair value hedging adjustments changed $273 million at December 31, 2023 when compared to December 31, 2022, due primarily to the impact of interest rates on our cumulative fair value adjustments on bonds in active hedging relationships.

 INTEREST RATE PAYMENT TERMS
 Bonds are issued with fixed or variable rate payment terms, such as SOFR. The following table summarizes our bonds by interest rate payment terms (dollars in millions):

 2023
 2022

 $
 63,477
 $
 34,520

 Simple variable rate
 53,486
 50,052

 $
 $

 For additional information on our consolidated obligations, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Liquidity — Sources of Liquidity."

 Deposits represent a small portion of our funding, totaling $1.0 billion at December 31, 2023, and remained relatively stable from December 31, 2022. All of our deposits are uninsured and the balance of deposits varies depending on market factors, such as the attractiveness of our deposit pricing relative to rates available on alternative money market instruments, our members' investment preferences and the availability of alternative short-term investments, and our members' liquidity levels.

 Interest-bearing demand and overnight deposits pay interest based on a daily interest rate. The average balances of demand and overnight deposits were $1.0 billion, $1.4 billion, and $1.8 billion, and the weighted-average interest rates paid on demand and overnight deposits were 4.07 percent, 0.83 percent, and 0.01 percent during the years ended December 31, 2023, 2022, and 2021. Term deposits pay interest based on a fixed rate determined at the issuance of the deposit. The average balances of term deposits were $171 million, $185 million, and $97 million, and the weighted-average interest rates paid on term deposits were 4.97 percent, 1.17 percent, and 0.02 percent during the years ended December 31, 2023, 2022, and 2021.
 The following table summarizes our uninsured term deposits (dollars in millions):

 2023
 2022

 Three months or less
 $
 $

 Over three months through six months

 Total
 $
 $

 Capital

 The following table summarizes information on our capital (dollars in millions):

 2023
 2022

 Capital stock
 $
 6,873
 $
 6,250

 Retained earnings
 3,138
 2,618

 Accumulated other comprehensive income (loss)
 (180)
 (117)

 Total capital
 $
 9,831
 $
 8,751

 Our capital increased $1.1 billion or 12 percent at December 31, 2023 when compared to December 31, 2022, primarily due to an increase in activity-based capital stock resulting from an increase in advance balances, and an increase in retained earnings. Refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Capital " for additional information on our capital.

 Derivatives

 We use derivatives to manage interest rate risk. The notional amount of derivatives serves as a factor in determining periodic interest payments and cash flows received and paid. However, the notional amount of derivatives represents neither the actual amounts exchanged nor our overall exposure to credit and market risk.

 The following table categorizes the notional amount of our derivatives by type (dollars in millions):

 2023
 2022

 Interest rate swaps

 Non-callable
 $
 133,720
 $
 94,582

 Callable by counterparty
 32,284
 6,901

 Total interest rate swaps
 166,004
 101,483

 Forward settlement agreements

 Mortgage loan purchase commitments

 Total notional amount
 $
 166,231
 $
 101,575

 The notional amount of our derivative contracts increased $64.7 billion or 64 percent at December 31, 2023 when compared to December 31, 2022. This was primarily due to increased utilization of both non-callable and callable swaps to hedge our advances and consolidated obligations in an effort to manage our interest rate risk. For additional discussion regarding our use of derivatives, see " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Interest Rate Risk — Derivatives."

 LIQUIDITY AND CAPITAL RESOURCES

 Our liquidity and capital positions are actively managed in an effort to preserve stable, reliable, and cost-effective sources of funds to meet current and projected future operating financial commitments, as well as regulatory, liquidity, and capital requirements.

 Liquidity

 SOURCES OF LIQUIDITY

 We utilize several sources of liquidity to carry out our business activities. These include, but are not limited to, proceeds from the issuance of consolidated obligations, payments collected on advances and mortgage loans, proceeds from investment securities, member deposits, the issuance of capital stock, and current period earnings.

 Our primary source of liquidity is proceeds from the issuance of consolidated obligations (bonds and discount notes) in the capital markets. During 2023, proceeds from the issuance of bonds and discount notes were $139.3 billion and $1,653.5 billion compared to $83.8 billion and $1,022.9 billion in 2022. During 2023, we increased our utilization of consolidated obligations compared to the prior year primarily to fund our asset growth and/or meet our liquidity requirements.

 Access to debt markets has been reliable because investors, driven by increased liquidity preference and our GSE status, have sought the FHLBanks' debt as an asset of choice. However, due to the short-term maturity of the debt, we may be exposed to additional risks associated with refinancing and our ability to access the capital markets.

 We are focused on maintaining an adequate liquidity balance and a funding balance between our financial assets and financial liabilities and work collectively with the other FHLBanks to manage the system-wide liquidity and funding needs. We monitor our debt refinancing risk and liquidity position primarily by tracking the maturities of financial assets and financial liabilities. In managing and monitoring the amounts of assets that require refunding, we consider contractual maturities of our financial assets and liabilities, as well as certain assumptions regarding expected cash flows (i.e., estimated prepayments). External factors, including member borrowing needs, supply and demand in the debt markets, and other factors may affect liquidity balances and the funding balances between financial assets and financial liabilities. Refer to " Item 8. Financial Statements and Supplementary Data " for additional information regarding the contractual maturities or redemption terms of certain of our financial assets and liabilities.

 Our ability to raise funds in the capital markets as well as our cost of borrowing may be affected by our credit ratings. In August 2023, Fitch Ratings downgraded the long-term U.S. sovereign rating to AA+ with a stable outlook. Following this action, Fitch Ratings also downgraded our long-term rating to AA+ with a stable outlook. Further, in November 2023, Moody's affirmed the ratings of our consolidated obligations of Aaa/P-1 and changed the outlook on the ratings to negative from stable, consistent with its ratings action taken with respect to the United States Government. As of February 29, 2024, our consolidated obligations remained rated AA+ with a stable outlook by Fitch Ratings, AA+/A-1+ with a stable outlook by S&P, and Aaa/P-1 with a negative outlook by Moody's. For further discussion of how credit rating changes and our ability to access the capital markets may impact us in the future, refer to " Item 1A. Risk Factors."

 Although we are primarily liable for the portion of consolidated obligations that are issued on our behalf, we are also jointly and severally liable with the other FHLBanks for the payment of principal and interest on all consolidated obligations issued by the FHLBank System. At December 31, 2023 and 2022, the total par value of outstanding consolidated obligations for which we are primarily liable was $172.2 billion and $154.6 billion. At December 31, 2023 and 2022, the total par value of outstanding consolidated obligations issued on behalf of other FHLBanks for which we are jointly and severally liable was $1,032.1 billion and $1,027.1 billion.

 The Office of Finance and FHLBanks have contingency plans in place that prioritize the allocation of proceeds from the issuance of consolidated obligations during periods of financial distress if consolidated obligations cannot be issued in sufficient amounts to satisfy all FHLBank demand. In the event of significant market disruptions or local disasters, our President and CEO or designee is authorized to establish interim borrowing relationships with other FHLBanks. To provide further access to funding, the FHLBank Act also authorizes the U.S. Treasury to directly purchase new issue consolidated obligations of the GSEs, including FHLBanks, up to an aggregate principal amount of $4.0 billion. As of February 29, 2024, no purchases had been made by the U.S. Treasury under this authorization.

 USES OF LIQUIDITY

 We use our available liquidity, including proceeds from the issuance of consolidated obligations, primarily to repay consolidated obligations, fund advances, and purchase investments. During 2023, repayments of consolidated obligations totaled $1,775.5 billion compared to $1,030.8 billion in 2022.

 During 2023, advance disbursements (excluding daily renewals) totaled $580.7 billion compared to $424.9 billion in 2022. Advance disbursements will vary from period to period depending on member needs and increased during 2023 due primarily to increased member utilization of short-term advances. In particular, we saw accelerated member demand throughout March in response to the stress placed on the banking industry and financial markets resulting from the financial difficulties experienced by certain depository institutions. During 2023, investment purchases (excluding overnight investments) totaled $12.8 billion compared to $9.3 billion in 2022, an increase due primarily to additional purchases of agency MBS.

 We also use liquidity to purchase mortgage loans, redeem member deposits, pledge collateral to derivative counterparties, redeem or repurchase capital stock, pay expenses, and pay dividends.

 LIQUIDITY REQUIREMENTS

 We are subject to certain liquidity requirements set forth by the Finance Agency, as further outlined below. We also maintain a liquidity contingency funding plan designed to enable us to meet our obligations and the liquidity needs of our members in the event of short-term capital market disruptions, or operational disruptions at our Bank and/or the Office of Finance.

 Liquidity Guidance AB – This guidance requires us to maintain sufficient liquidity for a period of 10 to 30 calendar days. The base case scenario requires 20 days of positive daily cash balances and assumes that we cannot access the capital markets to issue debt, and during that time we will automatically renew maturing and called advances for all members, including very large highly-rated members, and we hold additional liquid assets equal to one percent of our letters of credit balances. At December 31, 2023 and 2022, we were in compliance with this base case liquidity guidance.

 The Liquidity Guidance AB also specifies appropriate funding gap limits to address the risks associated with an FHLBank having too large a mismatch between the contractual maturities of its assets and liabilities. A funding gap measures the difference between assets and liabilities that are scheduled to mature during a specified period and is expressed as a percentage of total assets. The guidance provides recommended funding gap maximums of negative 15 percent at the three-month horizon and negative 30 percent at the one-year horizon. At December 31, 2023 and 2022, we adhered to these funding gap requirements.

 Liquidity Reserves for Deposits – We are required to have available at all times an amount greater than or equal to members' current deposits invested in advances with maturities not to exceed five years, deposits in banks or trust companies, and obligations of the U.S. Treasury. At December 31, 2023 and 2022, we were in compliance with this liquidity guidance.

 Unpledged Qualifying Assets – We are required to maintain, in the aggregate, unpledged qualifying assets in an amount at least equal to the amount of our participation in total consolidated obligations outstanding. The following table shows our compliance with this requirement (dollars in billions):

 2023
 2022

 Qualifying assets free of lien or pledge
 $
 182.9
 $
 163.4

 Consolidated obligations outstanding
 171.5
 153.5

 Excess liquidity
 $
 11.4
 $
 9.9

 Capital

 CAPITAL REQUIREMENTS

 We are subject to certain regulatory capital requirements. First, the FHLBank Act requires that we maintain at all times permanent capital greater than or equal to the sum of our credit, market, and operational risk capital requirements, all calculated in accordance with Finance Agency regulations. Only permanent capital, defined as the amounts paid-in for Class B capital stock (including MRCS), and retained earnings can satisfy this risk-based capital requirement. Second, the FHLBank Act requires a minimum four percent capital-to-asset ratio, which is defined as total regulatory capital divided by total assets. Total regulatory capital includes all Class B capital stock (including MRCS) and retained earnings. Third, the FHLBank Act imposes a five percent minimum leverage ratio, which is defined as the sum of permanent capital weighted 1.5 times and nonpermanent capital weighted 1.0 times, divided by total assets. At December 31, 2023 and 2022, we did not hold any nonpermanent capital. At December 31, 2023 and 2022, we were in compliance with all three of the Finance Agency's regulatory capital requirements.

 In addition to the requirements previously discussed, the the Capital Stock AB requires each FHLBank to maintain at all times a ratio of at least two percent of capital stock to total assets. For purposes of the Capital Stock AB, capital stock includes MRCS. The capital stock to total assets ratio is measured on a daily average basis at month end. At December 31, 2023 and 2022, we were in compliance with the Capital Stock AB.

 Refer to " Item 8. Financial Statements and Supplementary Data — Note 11 — Capital " for additional information on our regulatory capital requirements.

 CAPITAL STOCK
 Our capital stock has a par value of $100 per share, and all shares are issued, redeemed, and repurchased only at the stated par value. We issue a single class of capital stock (Class B capital stock) and have two subclasses of Class B capital stock: membership and activity-based. All Class B capital stock issued is subject to a notice of redemption period of five years.

 The capital stock requirements established in our Capital Plan are designed so that we can remain adequately capitalized as member activity changes. Our Board of Directors may make adjustments to the capital stock requirements within ranges established in our Capital Plan.
 Effective December 15, 2023, we reduced the amount of membership stock each member must purchase and hold from 0.12 percent to 0.06 percent of its total assets as of the preceding December 31st, with no change to the cap of $10 million and floor of $10,000. In addition, we increased the activity stock requirement on advances from 4.00 percent to 4.50 percent while maintaining the activity stock requirement of 4.00 percent on mortgage loans and 0.10 percent on standby letters of credit. These changes allow the Bank the improve scalability of capital with changes in advance demand. The impact of these changes at the effective date resulted in a net increase in total capital stock of approximately $76 million.

 Because membership is voluntary, a member can provide a notice of withdrawal from membership at any time. If a member provides a notice of withdrawal from membership, we will not repurchase or redeem any membership stock until five years from the date of receipt of a notice of withdrawal. To the extent membership is terminated involuntarily, we may elect to repurchase that institution's membership stock prior to the end of the five-year redemption period. If a member withdraws or is involuntarily terminated from membership and holds activity-based capital stock, we will repurchase any such stock that is not required to support remaining business activity with the institution.

 A member may cancel any pending notice of redemption before the completion of the five-year redemption period by providing a written notice of cancellation. We charge a cancellation fee equal to a percentage of the par value of the shares of capital stock subject to redemption. This fee is currently set at a range of one to five percent depending on when we receive notice of cancellation from the member. Our Board of Directors retains the right to change the cancellation fee at any time. We will provide at least 15 days' written notice to each member of any adjustment or amendment to our cancellation fee.
 We cannot repurchase or redeem any membership or activity-based capital stock if the repurchase or redemption would cause a member to be out of compliance with its required investment. In addition, there are statutory and regulatory restrictions on our obligation or right to redeem outstanding capital stock.
 First, in no case may we redeem any capital stock if, following such redemption, we would fail to satisfy our minimum regulatory capital requirements. By law, all member holdings of our capital stock immediately become nonredeemable if we become undercapitalized.

 Second, we are precluded by regulation from redeeming any capital stock without the prior approval of the Finance Agency if either our Board of Directors or the Finance Agency determines that we incurred or are likely to incur losses resulting in or likely to result in a charge against capital.
 Third, we cannot redeem shares of capital stock from any member if the principal or interest on any consolidated obligation is not paid in full when due, or under certain circumstances if (i) we project, at any time, that we will fail to comply with statutory or regulatory liquidity requirements, or will be unable to timely and fully meet all of our current obligations, (ii) we actually fail to comply with statutory or regulatory liquidity requirements or to timely and fully meet all of our current obligations, or enter or negotiate to enter into an agreement with one or more other FHLBanks to obtain financial assistance to meet our current obligations, or (iii) the Finance Agency determines that we will cease to be in compliance with statutory or regulatory liquidity requirements, or will lack the capacity to timely or fully meet all of our current obligations.
 If we are liquidated, after payment in full to our creditors, our stockholders will be entitled to receive the par value of their capital stock as well as any retained earnings, in an amount proportional to the stockholder's share of the total shares of capital stock. In the event of a merger or consolidation, our Board of Directors shall determine the rights and preferences of our stockholders, subject to applicable Finance Agency regulations, as well as any terms and conditions imposed by the Finance Agency.

 Regulatory Capital Stock
 The following table summarizes our regulatory capital stock by type of member (dollars in millions):

 2023
 2022

 Commercial banks
 $
 4,172
 $
 3,659

 Savings institutions

 Credit unions

 Insurance companies
 1,679
 1,545

 CDFIs

 Total GAAP capital stock
 6,873
 6,250

 MRCS

 Total regulatory capital stock
 $
 6,885
 $
 6,265

 The increase in regulatory capital stock at December 31, 2023 when compared to December 31, 2022 was primarily due to an increase in activity-based capital stock resulting from an increase in advance balances. For additional information on our capital stock, refer to " Item 8. Financial Statements and Supplementary Data — Note 11 — Capital."

 RETAINED EARNINGS
 Our risk management policies outline a targeted level of retained earnings based on the amount we believe necessary to help protect the redemption value of capital stock, facilitate safe and sound operations, maintain regulatory capital ratios, and support our ability to pay a relatively stable dividend. We monitor our achievement of this targeted level and may utilize tools such as restructuring our balance sheet, generating additional income, reducing our risk exposures, increasing capital stock requirements, or reducing our dividends to achieve this level of retained earnings. At December 31, 2023 and 2022, our actual retained earnings exceeded our targeted level of retained earnings.
 Under the JCE Agreement, we are required to allocate 20 percent of our quarterly net income to a separate restricted retained earnings account until the balance of that account, calculated as of the last day of each calendar quarter, equals at least one percent of our average balance of outstanding consolidated obligations for the calendar quarter. The restricted retained earnings are not available to pay dividends and are presented separately on our Statements of Condition. At December 31, 2023 and 2022, our restricted retained earnings account totaled $896 million and $703 million. One percent of our average balance of outstanding consolidated obligations for the three months ended December 31, 2023 was $1.7 billion.

 DIVIDENDS

 Our Board of Directors may declare and pay different dividends for each subclass of capital stock. Dividend payments may be made in the form of cash and/or additional shares of capital stock. Historically, we have only paid cash dividends. By regulation, we may only pay dividends from current earnings or unrestricted retained earnings. We are prohibited from paying a dividend in the form of additional shares of capital stock if, after the issuance, the outstanding excess capital stock would be greater than one percent of our total assets. Our Board of Directors may not declare or pay dividends if it would result in our non-compliance with regulatory capital requirements.

 Our dividend philosophy is to pay a consistent dividend equal to or greater than the current market rate for a highly-rated investment (i.e. SOFR), and at a rate that the Board of Directors believes is sustainable under current and projected earnings to maintain an appropriate level of capital and retained earnings. Our actual dividend is determined quarterly by our Board of Directors, based on policies, regulatory requirements, actual performance, and other considerations that the Board of Directors determines to be appropriate.
 The following table summarizes dividend-related information (dollars in millions):

 For the Years Ended

 2023
 2022

 Aggregate cash dividends paid1

 $
 $

 Effective combined annualized dividend rate paid on capital stock2

 6.90
 %
 5.27
 %

 Annualized dividend rate paid on membership capital stock
 3.00
 %
 3.00
 %

 Annualized dividend rate paid on activity-based capital stock
 8.04
 %
 6.57
 %

 Average SOFR
 5.01
 %
 1.63
 %

 1 Includes aggregate cash dividends paid during the period. Amount excludes cash dividends paid on MRCS. For financial reporting purposes, these dividends were recorded as interest expense on our Statements of Income.

 2 Effective combined annualized dividend rate is paid on total capital stock, including MRCS.

 CRITICAL ACCOUNTING ESTIMATES

 The preparation of our financial statements in accordance with GAAP requires management to make a number of judgments, estimates, and assumptions that affect our reported results and disclosures. Given the assumptions and judgment used, we have identified fair value measurements as our critical accounting estimate.

 For a discussion of recently adopted or issued accounting standards, refer to " Item 8. Financial Statements and Supplementary Data — Note 2 — Recently Adopted and Issued Accounting Guidance."

 Fair Value Measurements

 We record trading securities, AFS securities, derivative assets, derivative liabilities, financial instruments held under the fair value option, and certain other assets at fair value on a recurring basis, and on occasion certain impaired mortgage loans held for portfolio on a non-recurring basis. Fair value is a market-based measurement and is defined as the price received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date under current market conditions.

 Fair values play an important role in our valuation of certain assets, liabilities, and hedging instruments. They are inherently subjective and may require the use of significant assumptions, adjustments, and judgment including, among others, discount rates, forward interest rates, and volatility assumptions. We evaluate our fair value measurements on an ongoing basis. While management believes our estimates and assumptions are reasonable based on historical experience and other factors, actual results could differ from those estimates and differences could be material to the financial statements.
 We categorize our financial instruments carried at fair value into a three-level hierarchy. The hierarchy is based upon the observability of inputs used to value the asset or liability as of the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. At December 31, 2023 and 2022, we did not carry any financial assets or liabilities, measured on a recurring basis, at fair value on our Statements of Condition based on unobservable inputs.

 While all fair value measurements inherently have a significant level of estimation uncertainty, the following items are those most likely to have a material impact on our financial statements:

 • Trading and AFS Investment Securities. Our valuation technique incorporates prices from third-party pricing vendors, that generally use various proprietary models to price investment securities. The inputs to those models are derived from various sources including, but not limited to, benchmark securities and yields, reported trades, dealer estimates, issuer spreads, bids, offers, and other market-related data. Since many investment securities do not trade on a daily basis, the pricing vendors use available information, as applicable, such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing to determine the prices for individual securities. Each pricing vendor has an established process in place to challenge investment valuations, which facilitates resolution of questionable prices we may identify. Periodically, we conduct reviews of our pricing vendors to confirm and further augment our understanding of the vendors' pricing processes, methodologies, and control procedures. In limited instances, when no prices are available from the designated pricing services, we obtain prices from dealers or use the purchase price if the investment security is unsettled.

 • Derivative Assets and Liabilities and Related Hedged Items. The fair value of our derivatives is generally estimated using standard valuation techniques such as a discounted cash flow analysis and comparisons to similar instruments, and includes variation margin payments for daily settled contracts. Our cash flow model utilizes market-observable inputs (inputs that are actively quoted and can be validated to external sources). These inputs include assumptions on discount rates, forward interest rates, and volatility. In limited instances, fair value estimates for derivatives may be obtained using an external pricing model that utilizes observable market data. For the related hedged items, the fair value is estimated using a discounted cash flow analysis which also considers assumptions on discount rates and volatility.
 Throughout 2023, there were no material changes in our valuation techniques or primary inputs used to develop fair value measurements for investment securities or derivatives. Further, the risk profile and composition of these instruments did not materially change when compared to prior year. Refer to " Item 8. Financial Statements and Supplementary Data — Note 13 — Fair Value " for additional discussion on our fair value measurements, including the quantitative impact these fair value estimates had on our financial statements and disclosures at December 31, 2023 and 2022.

 LEGISLATIVE AND REGULATORY DEVELOPMENTS

 Finance Agency's Review and Analysis of the FHLBank System

 Commencing in the fall of 2022, and over a period of several months, the Finance Agency undertook a review and analysis of the FHLBank System, in part through a series of public listening sessions, regional roundtable discussions, and receipt of comments from stakeholders and the public. This review covered such areas as the FHLBanks' mission and purpose in a changing marketplace; their organization, operational efficiency, and effectiveness; their role in promoting affordable, sustainable, equitable, and resilient housing and community investment; their role in addressing the unique needs of rural and financially vulnerable communities; member products, services, collateral requirements; and membership eligibility and requirements.

 On November 7, 2023, the Finance Agency issued a written report titled "FHLBank System at 100: Focusing on the Future", presenting its review and analysis of the FHLBank System and the actions and recommendations that it plans to pursue in service of its vision for the future of the FHLBank System. The report focused on four broad themes: (1) the mission of the FHLBank System; (2) the FHLBank System as a stable and reliable source of liquidity; (3) housing and community development; and (4) FHLBank System operational efficiency, structure, and governance. The Finance Agency expects its initiative to continue as a multi-year, collaborative effort with the FHLBanks, their member institutions, and other stakeholders to address the recommended actions in the report and has stated that it can implement some of the recommendations from the report through ongoing supervision, guidance, or rulemaking, as well as through statutory changes by proposing specific requests for Congressional action.

 Among other things, the Finance Agency has indicated that it plans to:

 • Update and clarify its regulatory statement of the FHLBanks' mission to explicitly incorporate its view of the core objectives of the FHLBanks' mission, which are (1) providing stable and reliable liquidity to members, and (2) supporting housing and community development;

 • Clarify the FHLBanks' liquidity role and take steps that the Finance Agency believes will better position the FHLBanks to perform their liquidity function, including enhancing Finance Agency oversight of FHLBank credit risk evaluation of their members and establishing protocols for large depository members to borrow from the Federal Reserve discount window;

 • Expand the FHLBanks' housing and community development focus by requiring the establishment of mission-oriented collateral programs, re-evaluating the definition of long-term advances, exploring revisions to the Community Support Requirements, and reviewing the AHP, Community Investment Programs, and Community Investment Cash Advance Programs to encourage greater use in a safe and sound manner. The Finance Agency will also recommend that Congress consider amending the FHLBank Act to at least double the statutory minimum required annual AHP contributions by the FHLBanks; and

 • Review the FHLBanks' operational efficiencies through encouraging collaboration among the FHLBanks, evaluating the size and structure of FHLBank boards, considering the structure of FHLBank districts and composition of their membership, and studying whether realignment or consolidation are necessary for the efficiency of the FHLBank System.

 We are continuing to evaluate the report and are not able to predict what actions will ultimately result from the Finance Agency's recommendations in the report, the timing of these actions, the extent of any changes to us or the FHLBank System, or the ultimate effect on us or the FHLBank System in the future. We plan to continue to engage with the Finance Agency and other stakeholders to ensure that the FHLBank System remains well positioned to serve our members and their communities. For a further discussion of related risks, see " Item 1A. Risk Factors."

 Finance Agency Proposed Rule on Fair Lending, Fair Housing, and Equitable Housing Finance Plans

 On April 26, 2023, the Finance Agency 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 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. We are evaluating the potential impact of the proposed rule on us and our operations.

 Consumer Financial Protection Bureau Final Rule

 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. An FHLBank will be subject to data collection and reporting obligations if the FHLBank has originated a minimum of 100 "covered credit transactions" to small businesses in each of the two preceding calendar years. The final rule implements phased-in compliance dates, beginning on October 1, 2024, based on the number of originations the covered financial institution makes to small businesses within a specified timeframe. We are assessing to which extent the obligations will be triggered for us and what operational changes will be necessary for compliance. While we are still analyzing the impact of the final rule, we do not believe these changes will have a material effect on our financial condition or results of operations. Under a federal court order in a related litigation, the CFPB has been enjoined from implementing and enforcing the final rule against covered financial institutions nationwide and all deadlines for compliance with the final rule have been stayed.

 Federal Reserve Bank Term Funding Program

 On March 12, 2023, in response to prevailing concerns about the ability of banks to meet the needs of all their depositors, the Federal Reserve announced the implementation of a BTFP, as an additional source of liquidity for eligible borrowers, including any U.S. federally insured depository institution or U.S. branch or agency of a foreign bank that is eligible for primary credit with the Federal Reserve. The BTFP offers up to one-year term loans to be secured by eligible collateral owned by eligible borrowers as of March 12, 2023. Such loans can be requested until March 11, 2024. The BTFP is subject to $25 billion in credit protection by the U.S. Department of Treasury. On January 24, 2024, the Federal Reserve announced that the BTFP will cease making new loans as scheduled on March 11, 2024.

 OFF-BALANCE SHEET ARRANGEMENTS
 In the ordinary course of business, we engage in financial transactions that, in accordance with GAAP, are not recorded on our Statements of Condition or may be recorded on our Statements of Condition in amounts that are different from the full contract or notional amount of the transactions. For additional information on our off-balance sheet arrangements, refer to " Item 8 — Financial Statements and Supplementary Data — Note 14 — Commitments and Contingencies."

 RISK MANAGEMENT

 We have risk management policies, established by our Board of Directors, that allow us to monitor and control our exposure to various risks, including interest rate, liquidity, credit, operational, model, information security, legal, regulatory and compliance, DEI, strategic, and reputational, as well as capital adequacy. Our primary risk management objective is to manage our assets and liabilities in ways that ensure liquidity is available to our members and protect the par redemption value of our capital stock. We periodically evaluate our risk management policies in order to respond to changes in our financial position and general market conditions.

 Interest Rate Risk

 We define interest rate risk as the risk that changes in interest rates or spreads will adversely affect our financial condition (market value) or performance (income). Interest rate risk is the principal type of risk to which we are exposed, as our cash flows, and therefore earnings and equity value, can change significantly as interest rates change. Our general approach toward managing interest rate risk is to acquire and maintain a portfolio of assets, liabilities, and derivatives which, taken together, limit our expected exposure to interest rate risk. Our key interest rate risk measures are MVE and Projected 24-Month Income. Management regularly monitors these key measures, as discussed further in the sections below.

 MARKET VALUE OF EQUITY

 MVE measures the net present value of the Bank by either marking positions to market or discounting all future cash flows using market discount rates. MVE is measured as the market value of our assets minus the market value of our liabilities (excluding MRCS). MVE is an estimate of the Bank's value and takes into account short-term market price fluctuations.

 The MVE calculation is derived by a model that uses market prices which are computed using interest rates. This model allows for items such as spreads, volatilities, and prepayment speeds, and assumes a run-off balance sheet. To ensure the accuracy of the MVE calculation, we benchmark the computed market prices of complex instruments, such as derivatives and mortgage assets, to market observed prices or dealers' quotes.

 Interest rate risk stress tests of MVE involve instantaneous parallel and non-parallel changes in interest rates. The resulting percentage change in MVE from the base case value is an indication of longer-term repricing risk and option risk embedded in the balance sheet.

 In an effort to protect MVE from large interest rate swings, we manage the interest rate risk of our balance sheet by using hedging transactions, such as issuing consolidated obligation bonds, including floating rate, simple bullet, callable, or other structured features, and entering into or canceling interest rate swaps, caps, floors, and swaptions.

 We monitor and manage to MVE policy limits in an effort to ensure the stability of the Bank's value. Our policy limits are based on declines from the base case in parallel and non-parallel interest rate change scenarios. Any policy limit breach must be reported to the Enterprise Risk Committee of the Bank and the Risk and Compliance Committee of the Board of Directors and be remediated in a timely manner. At December 31, 2023 and 2022, we were in compliance with all MVE policy limits.

 MVCS represents our MVE divided by the total outstanding shares of our capital stock (including MRCS). To ensure we remain adequately capitalized, we must ensure our MVCS remains at or above our $100 par value.

 The following tables show our base case and change from base case MVE in percent change, MVE policy limits, and MVCS, assuming instantaneous parallel changes in interest rates at December 31, 2023 and 2022:

 MVE Assuming Parallel Changes (dollars in millions)

 2023
 $
 10,154
 $
 9,955
 $
 9,748
 $
 9,548
 $
 9,344

 2022
 $
 8,716
 $
 8,648
 $
 8,563
 $
 8,477
 $
 8,392

 % Change from Base Case

 2023
 4.2
 %
 2.1
 %
 —
 %
 (2.0)
 %
 (4.1)
 %

 2022
 1.8
 %
 1.0
 %
 —
 %
 (1.0)
 %
 (2.0)
 %

 Policy Limits (declines from base case)

 Down 2001

 (7.5)
 %
 (4.0)
 %
 —
 %
 (4.0)
 %
 (7.5)
 %

 MVCS Assuming Parallel Changes (dollars per share)

 2023
 $
 147.5
 $
 144.6
 $
 141.6
 $
 138.7
 $
 135.7

 2022
 $
 139.1
 $
 138.1
 $
 136.7
 $
 135.3
 $
 134.0

 1 The down 200 basis point policy limit is suspended when the 10-year swap rate falls below an established threshold for five consecutive days. At December 31, 2023 and 2022, the threshold was 1.50 percent and the 10-year swap rate was above this level; as such, the associated policy limits were in effect.

 The following tables show our base case and change from base case MVE in percent change, MVE policy limits, and MVCS, assuming instantaneous non-parallel changes in interest rates at December 31, 2023 and 2022:

 MVE Assuming Non-Parallel Changes (dollars in millions)

 2023
 $
 9,862
 $
 9,816
 $
 9,748
 $
 9,667
 $
 9,566

 2022
 $
 8,577
 $
 8,606
 $
 8,563
 $
 8,486
 $
 8,409

 % Change from Base Case

 2023
 1.2
 %
 0.7
 %
 —
 %
 (0.8)
 %
 (1.9)
 %

 2022
 0.2
 %
 0.5
 %
 —
 %
 (0.9)
 %
 (1.8)
 %

 Policy Limits (declines from base case)

 Down 2001

 (7.5)
 %
 (4.0)
 %
 —
 %
 (4.0)
 %
 (7.5)
 %

 MVCS Assuming Non-Parallel Changes (dollars per share)

 2023
 $
 143.2
 $
 142.6
 $
 141.6
 $
 140.4
 $
 138.9

 2022
 $
 136.9
 $
 137.4
 $
 136.7
 $
 135.5
 $
 134.2

 1 The down 200 basis point policy limit is suspended when the 10-year swap rate falls below an established threshold for five consecutive days. At December 31, 2023 and 2022, the threshold was 1.50 percent and the 10-year swap rate was above this level; as such, the associated policy limits were in effect.

 Our base case MVE increased at December 31, 2023 when compared to December 31, 2022, primarily due to higher asset balances resulting from increased invested capital, specifically activity-based capital stock and retained earnings. During 2023, we recorded net income of $962 million and our dividends totaled $442 million. The earnings in excess of our dividend payments had a positive impact on MVE. Our base case MVCS increased at December 31, 2023 when compared to December 31, 2022, due primarily to an increase in our MVE, offset in part by the issuance of activity-based capital stock at par value, which is below our current MVCS value.

 PROJECTED 24-MONTH INCOME

 The projected 24-month income simulation measures our short-term earnings forecast over a two-year horizon based on forward interest rates and business assumptions. The spread between our projected AROCS and average SOFR is used as the primary measure of our profitability. For additional information on our adjusted earnings measure, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Executive Overview — Adjusted Earnings."
 We monitor and manage to policy limits, which are based on the spread between our projected AROCS and average SOFR in parallel and non-parallel interest rate change scenarios. Additionally, there is a limit on the decline in projected AROCS from base case AROCS for certain basis shock scenarios to limit basis risk exposure. Any policy limit breach must be reported to the Enterprise Risk Committee of the Bank and the Risk and Compliance Committee of the Board of Directors and be remediated in a timely manner. We were in compliance with all projected 24-month income policy limits at December 31, 2023 and 2022.
 The following tables show our projected 24-month AROCS spread to average SOFR and associated policy limits, assuming instantaneous parallel shifts in interest rates at December 31, 2023 and 2022:

 Projected AROCS Spread to SOFR

 2023
 7.47
 %
 7.16
 %
 6.77
 %
 6.31
 %
 5.79
 %

 2022
 6.71
 %
 6.53
 %
 6.40
 %
 6.27
 %
 6.09
 %

 Policy Limits1

 Down 2001

 1.75
 %
 1.75
 %
 —
 %
 1.75
 %
 1.75
 %

 1 The down 200 basis point policy limit is suspended when the 10-year swap rate falls below an established threshold for five consecutive days. At December 31, 2023 and 2022, the threshold was 1.50 percent and the 10-year swap rate was above this level; as such, the associated policy limit was in effect.

 The following tables show our projected 24-month AROCS spread to average SOFR and associated policy limits, assuming instantaneous non-parallel shifts in interest rates at December 31, 2023 and 2022:

 Projected AROCS Spread to SOFR

 2023
 6.69
 %
 6.77
 %
 6.77
 %

 2022
 6.43
 %
 6.40
 %
 6.35
 %

 Policy Limits

 1.75
 %
 —
 %
 1.75
 %

 The following tables show our change from base projected 24-month AROCS for index specific shock scenarios and our associated policy limits at December 31, 2023 and 2022:

 Projected AROCS

 % Change from Base Case

 2023
 (0.13)
 %

 2022
 (0.51)
 %

 Policy Limit

 (1.75)
 %

 DERIVATIVES
 We use derivatives to manage interest rate risk. Finance Agency regulations and our risk management policies establish guidelines for derivatives, prohibit the speculative use of derivatives, and limit credit risk arising from derivatives. Our hedging strategies include hedges of specific assets and liabilities that qualify for fair value hedge accounting and economic hedges that are used to reduce overall market risk exposure. All new hedging strategies are approved by our Asset-Liability Committee. See additional discussion regarding our derivative contracts in " Item 8. Financial Statements and Supplementary Data — Note 7 — Derivatives and Hedging Activities."

 The following table summarizes our interest rate exchange agreements by type of hedged item, hedging instrument, associated hedging strategy, hedge accounting designation, and notional amount (dollars in millions):

 Hedged Item / Hedging Instrument
 Hedging Strategy
 Hedge Accounting Designation
 2023
 Notional Amount

 2022
 Notional Amount

 Pay-fixed, receive floating interest rate swap (without options)
 Converts the advance's fixed rate to a variable rate index.
 $
 45,021
 $
 21,750

 —

 Pay-fixed, receive floating interest rate swap (with options)
 Converts the advance's fixed rate to a variable rate index and offsets option risk in the advance.
 —

 Pay-fixed, receive floating interest rate swap
 Converts the investment's fixed rate to a variable rate index.
 17,146
 9,316

 3,239
 2,934

 Mortgage Loans

 Mortgage loan purchase commitment
 Represents a stand-alone derivative that exposes us to fair value risk due to the fixed rate purchase commitment.

 Forward settlement agreement
 Protects against changes in market value of fixed rate mortgage loan purchase commitments resulting from changes in interest rates.

 Bonds

 Receive-fixed or structured, pay floating interest rate swap (without options)
 Converts the bond's fixed or structured rate to a variable rate index.
 20,502
 15,169

 Receive-fixed or structured, pay floating interest rate swap (with options)
 Converts the bond's fixed or structured rate to a variable rate index and offsets option risk in the bond.
 30,284
 6,733

 Discount Notes

 Receive-fixed, pay-float interest rate swap
 Converts the discount note's fixed rate to a variable rate index.
 47,812
 45,207

 Offsetting Positions

 Pay-fixed, receive-float interest rate swap and receive-fixed, pay-float interest rate swap
 Represents offsetting positions on interest rate swaps.
 2,000

 Total
 $
 166,231
 $
 101,575

 For more information on our hedging strategies, refer to " Item 8. Financial Statements and Supplementary Data — Note 7 — Derivatives and Hedging Activities. "

 Capital Adequacy

 An adequate capital position is necessary for facilitating safe and sound business operations, protecting the redemption value of our capital stock, maintaining regulatory capital ratios, and supporting our ability to pay dividends and redeem excess capital stock. To ensure capital adequacy, we maintain a targeted level of retained earnings to accomplish business imperatives and cover unexpected losses. Our key capital adequacy measures are regulatory capital and targeted retained earnings in order to maintain capital levels in accordance with Finance Agency regulations. In addition, our risk management policies require that we maintain MVCS at or above our $100 par value.

 For additional information on our compliance with regulatory capital requirements as well as our targeted retained earnings, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources."

 For additional information on MVCS, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Interest Rate Risk — Market Value of Equity."

 Liquidity Risk

 We define liquidity risk as the risk that we will be unable to meet our financial obligations as they come due or meet the credit needs of our members in a timely and cost efficient manner. To manage this risk, we maintain liquidity in accordance with Finance Agency regulations. For additional information on our compliance with these requirements, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Liquidity — Liquidity Requirements."

 Credit Risk

 We define credit risk as the risk that a member or counterparty will fail to meet its financial obligations. Our primary credit risks arise from our ongoing lending, investing, and hedging activities. Our overall objective in managing credit risk is to operate a sound credit granting process and to maintain appropriate credit administration, measurement, and monitoring practices.

 ADVANCES

 We manage our credit exposure to advances through an approach that provides for an established credit limit for each borrower, ongoing reviews of each borrower's financial condition, and detailed collateral and lending policies to limit risk of loss while balancing borrowers' needs for a reliable source of funding. In addition, we lend to our borrowers in accordance with the FHLBank Act, Finance Agency regulations, and other applicable laws.

 We are required by regulation to obtain sufficient collateral to fully secure our advances, standby letters of credit, and other extensions of credit to borrowers (collectively, credit products). The estimated value of the collateral required to secure each borrower's credit products is calculated by applying collateral discounts, or haircuts, to the unpaid principal or market value, as applicable, of the collateral. We also have policies and procedures for validating the reasonableness of our collateral valuations. In addition, we perform collateral verifications and on-site reviews based on the risk profile of the borrower. Management believes that these policies effectively manage our credit risk from advances.

 At December 31, 2023 and 2022, borrowers pledged $380.7 billion and $350.2 billion of collateral (net of applicable discounts) to support activity with us, including advances. At December 31, 2023 and 2022, all of our advances met the requirement to be collateralized at a minimum of 100 percent, net of applicable discounts. Borrowers pledge collateral in excess of their collateral requirement mainly to demonstrate available liquidity and to borrow additional amounts in the future.

 The following table shows the amount of collateral pledged to us (net of applicable discounts) (dollars in billions):

 Collateral Type
 Discount Range1

 Single-family loans
 22-38

 $
 194.3

 Multi-family loans
 27.8

 Other real estate
 25-56

 115.4

 Securities

 Cash, agency securities and residential MBS
 0-26

 31.5

 Commercial MBS
 7.0

 Government-insured loans
 15-25

 0.7
 —

 Secured small business and agri-business loans

 4.0

 Total
 $
 380.7

 1 Represents the discount or the range of discounts applied to the unpaid principal balance or market value of collateral pledged.

 We evaluate advances for credit losses on a quarterly basis and have never experienced a credit loss on our advances. Based upon our collateral and lending policies, the collateral held as security, and the repayment history on advances, management has determined that there were no expected credit losses on our advances at December 31, 2023 and 2022. Refer to " Item 8. Financial Statements and Supplementary Data — Note 5 — Advances " for additional information on our eligible collateral types, collateral practices, and allowance for credit losses.

 MORTGAGE LOANS

 Mortgage loan credit risk is the risk that we will not receive timely payments of principal and interest due from mortgage borrowers because of borrower defaults. Credit risk on mortgage loans is affected by a number of factors, including loan type, borrower's credit history, and other factors such as home price fluctuations, unemployment levels, and other economic factors in the local market or nationwide.

 The following table presents the unpaid principal balance of our mortgage loans by product type (dollars in millions):

 Product Type
 2023
 2022

 Conventional
 $
 9,506
 $
 7,890

 Government

 $
 9,884
 $
 8,277

 We manage the credit risk on mortgage loans by (i) adhering to our underwriting standards, (ii) using agreements to establish credit risk sharing responsibilities with our PFIs, and (iii) monitoring the performance of the mortgage loan portfolio and creditworthiness of PFIs.

 We evaluate mortgage loans for credit losses on a quarterly basis and establish an allowance for credit losses to reflect management's estimate of expected credit losses inherent in the portfolio. At December 31, 2023 and 2022, the allowance for credit losses on our conventional mortgage loans was $6 million and $5 million. At December 31, 2023, over 99 percent of our conventional loan portfolio was performing (i.e. current payment status) and charge-offs recorded during the year ended December 31, 2023 were less than one percent of the total conventional portfolio.

 We have never experienced a credit loss on our government-insured mortgage loans. At December 31, 2023 and 2022, we determined no allowance for credit losses was necessary on our government-insured mortgage loans.

 Refer to " Item 8. Financial Statements and Supplementary Data — Note 6 — Mortgage Loans Held for Portfolio " for additional information on our allowance for credit losses and the payment status of our conventional mortgage loans.

 The following table presents supplemental information on our mortgage loans (dollars in millions):

 Unpaid Principal Balance
 2023
 2022

 Average mortgage loans outstanding during the period
 $
 8,944
 $
 7,888

 Mortgage loans held for portfolio
 9,884
 8,277

 Non-accrual loans

 Allowance for credit losses on mortgage loans held for portfolio
 (6)
 (5)

 Net charge-offs (recoveries)1

 —
 (1)

 Ratio of net charge-offs (recoveries) to average mortgage loans outstanding during the period1

 —
 %
 0.01
 %

 Ratio of allowance for credit losses to mortgage loans held for portfolio
 0.07
 %
 0.06
 %

 Ratio of non-accrual loans to mortgage loans held for portfolio
 0.40
 %
 0.48
 %

 Ratio of allowance for credit losses to non-accrual loans
 16.64
 %
 12.59
 %

 1 Net charge-offs and recoveries were less than $1 million at December 31, 2023.

 The following table shows our conventional mortgage loans by FICO score. All percentages are calculated based on unpaid principal balances as of the period end.

 FICO Score1

 620 to < 660
 %

 660 to < 700

 700 to < 740

 >= 740

 Total
 %

 Weighted average FICO score

 1 Represents the lowest original FICO score of the borrowers and co-borrowers.

 The following table shows our conventional mortgage loans by loan-to-value ratio. All percentages are calculated based on unpaid principal balances as of the period end.

 Loan-to-Value1

 <= 60%
 %

 > 60% to 70%

 > 70% to 80%

 > 80% to 90%2

 > 90%2

 Total
 %

 Weighted average loan-to-value
 %

 1 Represents the loan-to-value at origination for the related loan.

 2 These conventional loans were required to have PMI at origination.

 The following table shows the five largest state concentrations of our conventional mortgage loan portfolio. All percentages are calculated based on unpaid principal balances as of the period end.

 Iowa
 %

 Missouri

 Minnesota

 South Dakota

 Idaho

 All others

 Total
 %

 INVESTMENTS

 We maintain an investment portfolio primarily to provide liquidity as well as investment income. Our primary credit risk on investments is the counterparties' ability to meet repayment terms. We mitigate this credit risk by purchasing investment quality securities. We define investment quality as a security with adequate financial backings so that full and timely payment of principal and interest on such security is expected and there is minimal risk that the timely payment of principal and interest would not occur because of adverse changes in economic and financial conditions during the projected life of the security. We consider a variety of credit quality factors when analyzing potential investments, including collateral performance, marketability, asset class or sector considerations, local and regional economic conditions, NRSRO credit ratings, and/or the financial health of the underlying issuer. We limit our purchases of MBS to those guaranteed by the U.S. Government or issued by a GSE. We perform ongoing analysis on these investments in an effort to determine potential credit issues.

 Finance Agency regulations also limit the type of investments we may purchase. We are prohibited from investing in financial instruments issued by non-U.S. entities other than those issued by U.S. branches and agency offices of foreign commercial banks, unless otherwise approved by the Finance Agency. Our unsecured credit exposures to U.S. branches and agency offices of foreign commercial banks include the risk that, as a result of political or economic conditions in a country, the counterparty may be unable to meet their contractual repayment obligations. Our unsecured credit exposures to domestic counterparties and U.S. subsidiaries of foreign commercial banks include the risk that these counterparties have extended credit to foreign counterparties. At December 31, 2023, we were in compliance with the above regulation and did not own any financial instruments issued by non-U.S. entities, other than those issued by U.S. branches and agency offices of foreign commercial banks, and those approved by the Finance Agency.

 In addition, Finance Agency regulations include limits on the amount of unsecured credit we may extend to a counterparty or to a group of affiliated counterparties. These limits are based on a percentage of regulatory capital and the counterparty's overall credit rating. Under these regulations, the level of regulatory capital is determined as the lesser of our total regulatory capital or the amount of regulatory capital of the counterparty. The amount of regulatory capital is then multiplied by a stated percentage. The percentage that we may offer for extensions of unsecured credit, excluding overnight federal funds sold, ranges from one to 15 percent based on the counterparty's credit rating. Our total unsecured exposure to a counterparty, including overnight federal funds sold, may not exceed twice that amount, or a total of two to 30 percent of the amount of regulatory capital, based on the counterparty's credit rating. At December 31, 2023, we were in compliance with the regulatory limits established for unsecured credit.

 Our short-term portfolio may include, but is not limited to, interest-bearing deposits, federal funds sold, securities purchased under agreements to resell, certificates of deposit, commercial paper, and U.S. Treasury obligations. Our long-term portfolio may include, but is not limited to, U.S. Treasury obligations, other U.S. obligations, GSE and TVA obligations, state or local housing agency obligations, taxable municipal bonds, and agency MBS. We consider our long-term investments issued or guaranteed by the U.S. Government, an agency or instrumentality of the U.S. Government, or the FDIC to be of the highest credit quality and therefore those exposures are not monitored with other unsecured investments. Given the credit quality of our unsecured long-term investments, our unsecured credit risk is primarily in the short-term portfolio.

 We limit short-term unsecured credit exposure primarily to the following overnight investment types:

 • Interest-bearing deposits. Primarily consists of unsecured deposits that earn interest.

 • Federal funds sold. Unsecured loans of reserve balances at the Federal Reserve Banks between financial institutions.

 • Commercial paper. Unsecured debt issued by corporations, typically for the financing of accounts receivable, inventories, and meeting short-term liabilities.

 At December 31, 2023, our unsecured short-term investment exposure consisted of overnight interest-bearing deposits and federal funds sold. The following table presents our unsecured short-term investment exposure by counterparty credit rating and domicile (dollars in millions):

 Credit Rating1,2

 Domicile of Counterparty
 AA
 A
 Total

 Domestic
 $
 —
 $
 3,480
 $
 3,480

 U.S. subsidiaries of foreign commercial banks
 —

 U.S. branches and agency offices of foreign commercial banks

 Australia
 1,250
 —
 1,250

 Canada
 —
 2,260
 2,260

 Finland
 —

 France
 —

 Germany
 —

 Netherlands
 —

 United Kingdom
 —

 Total U.S. branches and agency offices of foreign commercial banks
 2,650
 3,720
 6,370

 Total unsecured short-term investment exposure
 $
 2,650
 $
 7,950
 $
 10,600

 1 Represents either the lowest credit rating available for each counterparty based on an NRSRO, or the guarantor credit rating, if applicable. In instances where an NRSRO rating or guarantor rating is not available for the investment, the investment is classified as unrated.

 2 Table excludes investments issued or guaranteed by the U.S. Government, U.S. government agencies, government instrumentalities, GSEs, and supranational entities, and does not include related accrued interest.

 The following table summarizes the carrying value of our investments by credit rating (dollars in millions):

 Credit Rating1

 AAA
 AA
 A
 BBB
 Unrated
 Total

 $
 —
 $
 $
 3,480
 $
 —
 $
 —
 $
 3,481

 —
 —
 3,750
 —
 7,650

 —
 2,650
 4,470
 —
 —
 7,120

 Investment securities:

 MBS

 —
 —
 —
 —

 —
 —
 —
 —

 —
 4,399
 —
 —
 —
 4,399

 Private-label residential
 —
 —
 —

 Total MBS
 —
 22,987
 —
 22,990

 Non-MBS

 U.S. Treasury obligations2

 —
 2,925
 —
 —
 —
 2,925

 Other U.S. obligations2

 —
 —
 —
 —

 —
 —
 —
 —

 —
 —
 —

 Other3

 —
 —
 —

 Total non-MBS
 4,187
 —
 —
 —
 4,837

 Total investments
 $
 $
 29,825
 $
 11,702
 $
 $
 7,650
 $
 49,828

 1 Represents either the lowest credit rating available for each investment based on an NRSRO, or the guarantor credit rating, if applicable. In instances where an NRSRO rating or guarantor rating is not available for the investment, the investment is classified as unrated.

 2 Represents investment securities backed by the full faith and credit of the U.S. Government.

 3 Consists primarily of taxable municipal bonds.

 We evaluate investments for credit losses on a quarterly basis. At December 31, 2023 and 2022, we determined no allowance for credit losses was necessary on our investments. Refer to " Item 8. Financial Statements and Supplementary Data — Note 4 — Investments " for additional information our allowance for credit losses.

 DERIVATIVES

 We execute most of our derivative transactions with large banks and major broker-dealers. Over-the-counter derivative transactions may be either executed directly with a counterparty, referred to as uncleared derivatives, or cleared through a clearing agent with a clearinghouse, referred to as cleared derivatives.

 We are subject to credit risk due to the risk of nonperformance by counterparties to our derivative agreements. The amount of credit risk on derivatives depends on the extent to which netting procedures and collateral requirements are used and are effective in mitigating the risk. We manage credit risk through credit analysis of derivative counterparties, collateral requirements, and adherence to the requirements set forth in our policies, CFTC regulations, and Finance Agency regulations.

 Uncleared Derivatives. Uncleared derivative transactions executed on or after September 1, 2022 are subject to two-way initial margin requirements as mandated by the Dodd-Frank Act, if our aggregate uncleared derivative transactions exposure to a counterparty exceeds a specified threshold. The initial margin is required to be held at a third-party custodian and does not change ownership. Rather, the party in respect of which the initial margin has been posted to the third-party custodian will have a security interest in the amount of initial margin required under the uncleared margin rules and can only take ownership upon the occurrence of certain events, including an event of default due to bankruptcy, insolvency, or similar proceeding. As of February 29, 2024, we were not required to post initial margin on our uncleared derivative transactions in accordance with the noted regulation. Uncleared derivative agreements are also generally fully collateralized with a zero unsecured threshold in accordance with variation margin requirements issued by the U.S. federal bank regulatory agencies and the CFTC. As a result of these risk mitigation initiatives, we do not anticipate any credit losses on our uncleared derivative agreements.

 Cleared Derivatives. For cleared derivatives, the clearinghouse is our counterparty. We are subject to risk of nonperformance by the clearinghouse and clearing agent. The requirement that we post initial and variation margin through the clearing agent, to the clearinghouse, exposes us to institutional credit risk in the event that the clearing agent or the clearinghouse fails to meet its obligations. However, the use of cleared derivatives is intended to mitigate credit risk exposure because a central counterparty is substituted for individual counterparties and collateral/payments are posted daily, through a clearing agent, for changes in the fair value of cleared derivatives. We do not anticipate any credit losses on our cleared derivatives.

 The contractual or notional amount of derivatives reflects our involvement in the various classes of financial instruments. Our maximum credit risk is the estimated cost of replacing derivatives if there is a default, minus the value of any related collateral. In determining maximum credit risk, we consider accrued interest receivables and payables as well as our ability to net settle positive and negative positions with the same counterparty and/or clearing agent when netting requirements are met.

 The following table shows our derivative counterparty credit exposure (dollars in millions):

 Credit Rating1

 Notional Amount
 Net Derivatives
Fair Value Before Collateral
 Cash Collateral Pledged
To (From) Counterparty
 Net Credit Exposure
 to Counterparties

 Non-member counterparties:

 Asset positions with credit exposure

 A

 $
 4,988
 $
 $
 (57)
 $

 Cleared derivatives2

 131,881
 1,226
 1,263

 Liability positions with credit exposure

 A3

 1,239
 (4)
 —

 Total derivative positions with credit exposure to non-member counterparties
 138,108
 1,173
 1,266

 Member institutions4

 —

 Total
 138,215
 $
 $
 1,173
 $
 1,267

 Derivative positions without credit exposure
 28,016

 Total notional
 $
 166,231

 1 Represents either the lowest credit rating available for each counterparty based on an NRSRO, or the guarantor credit rating, if applicable.

 2 Represents derivative transactions cleared with CME Clearing and LCH Ltd., our clearinghouses. CME Clearing is not rated, but its parent, CME Group Inc. was rated Aa3 by Moody's and AA- by S&P at December 31, 2023. LCH Ltd. was rated AA- by S&P at December 31, 2023.

 3 Net credit exposure is less than $1 million.

 4 Represents mortgage loan purchase commitments with our member institutions.

 Refer to " Item 8. Financial Statements and Supplementary Data — Note 7 — Derivatives and Hedging Activities " for additional information on our derivatives and hedging activities.

 Operational Risk

 We define operational risk as the risk of loss arising from inadequate or failed processes, people, and/or systems, including those emanating from external sources. All of our activities and processes generate operational risk. Management has established policies, procedures, and controls to reduce the level of operational risk. We perform annual risk assessments to identify, assess, mitigate, and report on operational risks outside of the Board's risk appetite. Due to the manual nature of many of our processes, our operational risk exposure is closely monitored. Refer to " Item 1A. Risk Factors " for additional information.

 Model Risk

 We define model risk as the risk of adverse consequences from decisions based on incorrect and misused model outputs. Throughout the course of our day-to-day activities, we utilize external and internal pricing and financial models as important inputs into business and risk management decision-making processes.

 Models are inherently imperfect predictors of actual results because they are based on assumptions about future performance. Changes in any models or in any of the assumptions, judgments, or estimates used in the models may cause the results generated by the model to be materially different. Refer to " Item 1A. Risk Factors " for additional information.

 Information Security Risk

 We define information security risk as the risk arising from unauthorized access, use, disclosure, disruption, modification, or destruction of information or information systems. Importantly, this definition includes the confidentiality, integrity, and availability of both digital and non-digital information managed within information systems and processes. Refer to " Item 1C. Cybersecurity " for additional information.

 Legal, Regulatory, and Compliance Risk

 We define legal, regulatory, and compliance risk as the risk of violations of laws, rules, regulations, regulatory and supervisory guidance, and internal enterprise governing documents. Our legal and compliance departments are responsible for coordinating with various business units in connection with the identification, evaluation, and mitigation of our legal, regulatory, and compliance risks. We manage compliance risk by the development of, and adherence to, appropriate policies, procedures, and controls.

 DEI Risk

 We define DEI risk as the risk of not achieving the key objectives in our DEI Plan. The DEI Plan is internally-developed to layout DEI-related goals, help achieve our SBP, and comply with all Finance Agency regulations. We actively monitor progress against the goals established in our DEI Plan. Our Board of Directors actively oversees management's efforts and remains steadfast in its commitment to further developing our DEI program. The DEI Office maintains collaborative lines of communication with our Board of Directors, executive team, business units, and the compliance risk and internal audit departments in an effort to ensure the appropriate level of risk is maintained.

 Strategic Risk

 We define strategic risk as the risk arising from adverse strategic business decisions, poor implementation of strategic plans, or a lack of responsiveness to changes in the industry and operating environment. Strategic risk includes legislative risk. From time to time, proposals are made, or legislative changes are considered, which could affect our cost of doing business or other aspects of our business. To support our mission, we endeavor to manage and mitigate strategic risk through the business planning process and by monitoring the external environment.
 Reputational Risk
 We define reputational risk as the risk arising from negative publicity that could adversely affect our reputation and consequently our financial performance or ability to meet our key business objectives. We manage reputational risk by the identification of emerging risks, development of crisis response and contingency plans, and monitoring the effectiveness of the overall risk management processes.
 For additional information on some of the more important risks we face, refer to " Item 1A. Risk Factors."

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 See " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Interest Rate Risk " and the sections referenced therein for quantitative and qualitative disclosures about market risk.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 AUDITED FINANCIAL STATEMENTS:

 Report of Independent Registered Public Accounting Firm (PCAOB ID 238)

 Statements of Condition

 Statements of Income

 Statements of Comprehensive Income

 Statements of Capital

 Statements of Cash Flows

 Notes to the Financial Statements

 Background Information

 Note 1 - Summary of Significant Accounting Policies

 Note 2 - Recently Adopted and Issued Accounting Guidance

 Note 3 - Cash and Due from Banks

 Note 4 - I nvestments

 Note 5 - Advances

 Note 6 - Mortgage Loans Held for Portfolio

 Note 7 - Derivatives and Hedging Activities

 Note 8 - Deposits

 Note 9 - Consolidated Obligations

 Note 10 - Affordable Housing Program

 Note 11 - Capital

 Note 12 - Pension and Postretirement Benefit Plans

 Note 13 - Fair Value

 Note 14 - Commitments and Contingencies

 Note 15 - Activities with Stockholders

 Note 16 - Activities with Other FHLBanks

 Report of Independent Registered Public Accounting Firm

 To the Board of Directors and Shareholders of the Federal Home Loan Bank of Des Moines

 Opinions on the Financial Statements and Internal Control over Financial Reporting

 We have audited the accompanying statements of condition of the Federal Home Loan Bank of Des Moines (the "Bank") as of December 31, 2023 and 2022, and the related statements of income, comprehensive income, capital and cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the "financial statements"). We also have audited the Bank's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Bank as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Bank maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

 Basis for Opinions

 The Bank's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the Report of Management on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Bank's financial statements and on the Bank's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Bank in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

 Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

 Definition and Limitations of Internal Control over Financial Reporting

 A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 Critical Audit Matters

 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 Valuation of Interest-Rate Derivatives and Related Hedged Items

 As described in Notes 7 and 13 to the financial statements, the Bank uses derivatives to manage its exposure to interest-rate risks and to reduce funding costs, among other objectives. The total notional amount of derivatives as of December 31, 2023 was $166 billion, of which 68 percent were designated as hedging instruments, and the fair value of derivative assets and liabilities as of December 31, 2023 was $1,267 million and $7 million, respectively. The fair values of interest-rate derivatives and related hedged items are generally estimated using standard valuation techniques such as discounted cash flow analyses and comparisons to similar instruments. The discounted cash flow model uses market-observable inputs, such as discount rate, forward interest rate, and volatility assumptions.

 The principal considerations for our determination that performing procedures relating to the valuation of interest-rate derivatives and related hedged items is a critical audit matter are the significant audit effort in evaluating the discount rate, forward interest rate, and volatility assumptions used to fair value these derivatives and related hedged items, and the audit effort involved the use of professionals with specialized skill and knowledge.

 Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the effectiveness of controls relating to the valuation of interest-rate derivatives and hedged items, including controls over the model, data and assumptions. These procedures also included, among others, the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of prices for a sample of interest rate derivatives and related hedged items and comparison of management's estimate to the independently developed ranges. Developing the independent range of prices involved testing the completeness and accuracy of data provided by management and independently developing the discount rate, forward interest rate, and volatility assumptions.

 /s/ PricewaterhouseCoopers LLP
 Detroit, Michigan
 March 7, 2024

 We have served as the Bank's auditor since 1990.

 STATEMENTS OF CONDITION
 (dollars in millions, except capital stock par value)

 2023
 2022

 ASSETS

 Cash and due from banks (Note 3)
 $
 $

 Interest-bearing deposits (Note 4)
 3,481
 2,031

 Securities purchased under agreements to resell (Note 4)

 Federal funds sold (Note 4)
 7,120
 9,415

 Investment securities (Note 4)

 3,152
 2,817

 Available-for-sale securities (amortized cost of $ 24,001 and $ 15,677)

 Held-to-maturity securities (fair value of $ 850 and $ 959)

 Total investment securities
 27,827
 19,345

 Advances (Note 5)

 Mortgage loans held for portfolio, net of allowance for credit losses of $ 6 and $ 5 (Note 6)

 9,967
 8,348

 Accrued interest receivable

 Derivative assets, net (Note 7)
 1,267

 Other assets, net

 TOTAL ASSETS
 $
 184,406
 $
 164,169

 LIABILITIES

 Deposits (Note 8)

 Interest-bearing
 $
 $
 1,006

 Non-interest-bearing

 Total deposits
 1,039
 1,076

 Consolidated obligations (Note 9)

 Discount notes (includes $ 47,442 and $ 44,531 at fair value held under fair value option)

 54,537
 69,170

 Bonds
 116,961
 84,337

 Total consolidated obligations
 171,498
 153,507

 Mandatorily redeemable capital stock (Note 11)

 Accrued interest payable
 1,023

 Affordable Housing Program payable (Note 10)

 Derivative liabilities, net (Note 7)

 Other liabilities

 TOTAL LIABILITIES
 174,575
 155,418

 Commitments and contingencies (Note 14)

 CAPITAL (Note 11)

 Capital stock - Class B putable ($ 100 par value); 68,731,881 and 62,495,304 issued and outstanding shares

 6,873
 6,250

 Retained earnings

 Unrestricted
 2,242
 1,915

 Restricted

 Total retained earnings
 3,138
 2,618

 Accumulated other comprehensive income (loss)
 ( 180)

 TOTAL CAPITAL
 9,831
 8,751

 TOTAL LIABILITIES AND CAPITAL
 $
 184,406
 $
 164,169

 STATEMENTS OF INCOME
 (dollars in millions)

 2023
 2022
 2021

 INTEREST INCOME

 $
 6,533
 $
 1,750
 $

 1,203

 Held-to-maturity securities

 Mortgage loans held for portfolio

 Loans to other FHLBanks
 —
 —

 Total interest income
 9,657
 2,774

 INTEREST EXPENSE

 Consolidated obligations - Discount notes
 2,910

 Consolidated obligations - Bonds
 5,392
 1,128

 —

 Borrowings from other FHLBanks
 —
 —

 Mandatorily redeemable capital stock

 Total interest expense
 8,351
 2,091

 NET INTEREST INCOME
 1,306

 Provision (reversal) for credit losses on mortgage loans
 —

 NET INTEREST INCOME AFTER PROVISION (REVERSAL) FOR CREDIT LOSSES
 1,305

 OTHER INCOME (LOSS)

 Net gains (losses) on trading securities
 ( 95)
 ( 38)

 Net gains (losses) on financial instruments held under fair value option
 ( 92)

 Net gains (losses) on derivatives
 ( 41)
 ( 64)

 Net gains (losses) on extinguishment of debt
 —
 —

 Standby letter of credit fees

 Other, net

 Total other income (loss)
 ( 15)
 ( 40)

 OTHER EXPENSE

 Compensation and benefits

 Contractual services

 Professional fees

 Other operating expenses

 Federal Housing Finance Agency

 Office of Finance

 Community and housing contributions

 —

 Other, net

 Total other expense

 NET INCOME BEFORE ASSESSMENTS
 1,069

 Affordable Housing Program assessments

 NET INCOME
 $
 $
 $

 STATEMENTS OF COMPREHENSIVE INCOME
 (dollars in millions)

 2023
 2022
 2021

 Net income
 $
 $
 $

 Other comprehensive income (loss)

 Net unrealized gains (losses) on available-for-sale securities
 ( 64)

 Pension and postretirement benefits
 —

 Total other comprehensive income (loss)
 ( 63)
 ( 201)

 TOTAL COMPREHENSIVE INCOME (LOSS)
 $
 $
 $

 STATEMENTS OF CAPITAL
 (dollars and shares in millions)

 Capital Stock
Class B (putable)
 Retained Earnings
 Accumulated Other Comprehensive Income (Loss)
 Total Capital

 Shares
 Par Value
 Unrestricted
 Restricted
 Total

 BALANCE, DECEMBER 31, 2020
 $
 3,341
 $
 1,775
 $
 $
 2,351
 $
 $
 5,740

 Comprehensive income (loss)
 —
 —

 Proceeds from issuance of capital stock
 2,763
 —
 —
 —
 —
 2,763

 Repurchases/redemptions of capital stock
 ( 27)
 ( 2,659)
 —
 —
 —
 —
 ( 2,659)

 Net stock reclassified (to) from mandatorily redeemable capital stock

 ( 1)
 ( 81)
 —
 —
 —
 —
 ( 81)

 Cash dividends on capital stock
 —
 —
 ( 167)
 —
 ( 167)
 —
 ( 167)

 BALANCE, DECEMBER 31, 2021
 $
 3,364
 $
 1,773
 $
 $
 2,390
 $
 $
 5,838

 Comprehensive income (loss)
 —
 —
 ( 201)

 Proceeds from issuance of capital stock
 9,524
 —
 —
 —
 —
 9,524

 Repurchases/redemptions of capital stock
 ( 66)
 ( 6,633)
 —
 —
 —
 —
 ( 6,633)

 Net stock reclassified (to) from mandatorily redeemable capital stock

 —
 ( 5)
 —
 —
 —
 —
 ( 5)

 Cash dividends on capital stock
 —
 —
 —
 —

 BALANCE, DECEMBER 31, 2022
 $
 6,250
 $
 1,915
 $
 $
 2,618
 $
 $
 8,751

 Comprehensive income (loss)
 —
 —
 ( 63)

 Proceeds from issuance of capital stock
 11,087
 —
 —
 —
 —
 11,087

 Repurchases/redemptions of capital stock
 ( 105)
 ( 10,460)
 —
 —
 —
 —
 ( 10,460)

 Net stock reclassified (to) from mandatorily redeemable capital stock

 —
 ( 4)
 —
 —
 —
 —
 ( 4)

 Cash dividends on capital stock
 —
 —
 ( 442)
 —
 ( 442)
 —
 ( 442)

 BALANCE, DECEMBER 31, 2023
 $
 6,873
 $
 2,242
 $
 $
 3,138
 $
 ( 180)
 $
 9,831

 STATEMENTS OF CASH FLOWS
 (dollars in millions)

 2023
 2022
 2021

 OPERATING ACTIVITIES

 Net income
 $
 $
 $

 Adjustments to reconcile net income to net cash provided by (used in) operating activities

 Depreciation and amortization/(accretion)

 Net (gains) losses on trading securities
 ( 93)

 Net (gains) losses on financial instruments held under fair value option
 ( 106)
 ( 1)

 Net change in derivatives and hedging activities
 ( 573)
 1,516

 Net (gains) losses on extinguishment of debt
 ( 2)
 —
 —

 Other adjustments, net

 Net change in:

 Accrued interest receivable
 ( 401)
 ( 356)
 ( 7)

 ( 14)
 ( 7)

 Accrued interest payable
 ( 48)

 Other liabilities
 ( 29)

 Total adjustments
 ( 12)
 1,940

 Net cash provided by (used in) operating activities
 2,370

 INVESTING ACTIVITIES

 Net change in:

 ( 1,976)
 ( 2,012)

 1,190
 ( 140)
 ( 7,650)

 2,295
 ( 4,725)
 ( 995)

 Proceeds from sales
 —

 Proceeds from maturities and paydowns
 1,094
 4,766

 Purchases
 ( 1,725)
 ( 2,591)
 ( 1,098)

 Proceeds from maturities and paydowns
 3,417
 3,316
 2,693

 Purchases
 ( 10,833)
 ( 6,498)
 ( 115)

 Held-to-maturity securities

 Proceeds from maturities and paydowns

 Repaid
 569,885
 356,629
 138,435

 Originated
 ( 580,732)
 ( 424,864)
 ( 136,486)

 Mortgage loans held for portfolio

 Principal collected
 1,056
 2,506

 Purchased
 ( 2,447)
 ( 1,861)
 ( 1,885)

 Other investing activities, net
 ( 12)
 ( 9)
 ( 2)

 Net cash provided by (used in) investing activities
 ( 18,539)
 ( 80,494)

 STATEMENTS OF CASH FLOWS (continued from previous page)
 (dollars in millions)

 2023
 2022
 2021

 FINANCING ACTIVITIES

 Net change in deposits
 ( 674)
 ( 48)

 Net proceeds from issuance of consolidated obligations

 1,653,546
 1,022,899
 325,463

 Bonds
 139,265
 83,778
 65,424

 Payments for maturing and retiring consolidated obligations

 ( 1,668,653)
 ( 976,460)
 ( 330,458)

 Bonds
 ( 106,847)
 ( 54,295)
 ( 62,280)

 Proceeds from issuance of capital stock
 11,087
 9,524
 2,763

 Payments for repurchases/redemptions of capital stock
 ( 10,460)
 ( 6,633)
 ( 2,659)

 Payments for repurchases/redemptions of mandatorily redeemable capital stock
 ( 7)
 ( 19)
 ( 104)

 Cash dividends paid
 ( 442)
 ( 167)

 Net cash provided by (used in) financing activities
 17,531
 77,918
 ( 2,066)

 Net increase (decrease) in cash and due from banks
 ( 58)
 ( 206)
 ( 683)

 Cash and due from banks at beginning of the period

 Cash and due from banks at end of the period
 $
 $
 $

 SUPPLEMENTAL DISCLOSURES

 Cash transactions:

 Interest paid
 $
 7,512
 $
 1,292
 $

 Affordable Housing Program payments

 Non-cash transactions:

 Capitalized interest on reverse mortgage investment securities

 Capital stock reclassified to (from) mandatorily redeemable capital stock, net

 Traded but not settled investment security purchases

 Traded but not settled investment security payments/calls

 —
 —

 NOTES TO THE FINANCIAL STATEMENTS

 These Notes to the Financial Statements should be read in conjunction with the Statements of Condition as of December 31, 2023 and 2022, and the Statements of Income, Comprehensive Income, Capital, and Cash Flows for the years ended December 31, 2023, 2022, and 2021. Acronyms and terms used throughout these Notes to the Financial Statements are defined in the Glossary of Terms. Unless the context otherwise requires, the term "Bank" refers to the Federal Home Loan Bank of Des Moines or its management.

 Background Information

 The Bank is a federally chartered corporation that is exempt from all federal, state, and local taxation (except real property taxes and certain employer payroll taxes) and is one of 11 district FHLBanks. The FHLBanks are GSEs and were created under the authority of the FHLBank Act in order to serve the public by enhancing the availability of funds for residential mortgages and targeted community development. The Bank is regulated by the Finance Agency.

 The Bank is a cooperative, meaning it is owned by its customers, whom the Bank calls members. As a condition of membership in the Bank, all members must purchase and maintain capital stock to support business activities with the Bank. In return, the Bank provides a readily available source of funding and liquidity to its member institutions and eligible housing associates in Alaska, Hawaii, Idaho, Iowa, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, and the U.S. Pacific territories of American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. Commercial banks, savings institutions, credit unions, insurance companies, and CDFIs may apply for membership. State and local housing associates that meet certain statutory criteria may also borrow from the Bank; while eligible to borrow, housing associates are not members of the Bank and, as such, are not permitted to hold capital stock. All stockholders, including current and former members, may receive dividends on their capital stock investment to the extent declared by the Bank's Board of Directors.

 Note 1 — Summary of Significant Accounting Policies

 BASIS OF PRESENTATION

 The Bank prepares its financial statements in accordance with GAAP.

 SIGNIFICANT ACCOUNTING POLICIES
 Use of Estimates
 The preparation of financial statements in accordance with GAAP requires management 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. The most significant of these estimates include those used in conjunction with fair value estimates. Actual results could significantly differ from these estimates.
 Fair Value. The fair value amounts, recorded on the Bank's Statements of Condition and presented in the footnote disclosures, have been determined by the Bank using available market information and management's best judgment of appropriate valuation methods. Although management uses its best judgment in estimating the fair value of financial instruments, there are inherent limitations in any valuation technique. Therefore, these fair values may not be indicative of the amounts that would have been realized in market transactions at the reporting dates. See " Note 13 — Fair Value " for more information.

 Financial Instruments Meeting Netting Requirements

 The Bank has certain financial instruments, including derivative instruments and securities purchased under agreements to resell, that may be presented on a net basis when there is a legal right of offset and all other requirements for netting are met (collectively referred to as the netting requirements). The Bank has elected to offset its derivative instruments, related cash collateral, and associated accrued interest when it has met the netting requirements.

 The net exposure for these financial instruments can change on a daily basis and, therefore, there may be a delay between the time this exposure change is identified and additional collateral is requested, and the time when this collateral is received or pledged. Likewise, there may be a delay for excess collateral to be returned. For derivative instruments that meet the requirements for netting, any excess cash collateral received or pledged is recognized as a derivative liability or derivative asset. Additional information regarding these agreements is provided in " Note 7 — Derivatives and Hedging Activities. "

 At December 31, 2023 and 2022, the Bank had $ 11.4 billion and $ 12.6 billion in securities purchased under agreements to resell. There were no offsetting liabilities related to these securities at December 31, 2023 and 2022.

 Interest-Bearing Deposits, Securities Purchased Under Agreements to Resell, and Federal Funds Sold
 The Bank invests in interest-bearing deposits, securities purchased under agreements to resell, and federal funds sold. Interest-bearing deposits include deposits held with banks or counterparties that do not meet the definition of a security. The Bank treats securities purchased under agreements to resell as short-term collateralized loans. Federal funds sold consist of short-term, unsecured loans generally transacted by counterparties that are considered investment quality by the Bank. All of these investments provide short-term liquidity and are carried at amortized cost. Accrued interest receivable is recorded separately on the Statements of Condition.
 These investments are evaluated quarterly for expected credit losses. If applicable, an allowance for credit losses is recorded with a corresponding adjustment to the provision (reversal) for credit losses. The Bank uses the collateral maintenance provision practical expedient for securities purchased under agreements to resell. Consequently, a credit loss would be recognized if there is a collateral shortfall which the Bank does not believe the counterparty will replenish in accordance with its contractual terms. The credit loss would be limited to the difference between the fair value of the collateral and the investment's amortized cost. See " Note 4 — Investments " for details on the allowance methodologies relating to these investments.

 Debt Securities
 The Bank classifies investment securities as trading, AFS, or HTM at the date of acquisition. Purchases and sales of investment securities are recorded on a trade date basis. The Bank records interest on investment securities to interest income as earned. The Bank generally amortizes/accretes premiums and discounts on AFS and HTM investment securities to income using the contractual level-yield method (level-yield method). In addition, the Bank uses this method to amortize/accrete fair value hedging adjustments. The level-yield method recognizes the income effects of these adjustments over the contractual life of the securities based on the actual behavior of the underlying assets, including adjustments for actual prepayment activities, and reflects the contractual terms of the securities without regard to changes in estimated prepayments based on assumptions about future borrower behavior. For callable AFS and HTM non-MBS purchased at a premium, the Bank amortizes the premium to the next contractual call date. The Bank computes gains and losses on sales of investment securities using the specific identification method and includes these gains and losses in other income (loss).
 Trading. Securities classified as trading are carried at fair value and generally entered into for liquidity purposes. In addition, the Bank classifies certain securities as trading that do not qualify for hedge accounting, primarily in an effort to mitigate the potential income statement volatility that can arise when an economic derivative is adjusted for changes in fair value but the related hedged item is not. The Bank records changes in the fair value of these securities through other income (loss) as "Net gains (losses) on trading securities." The Bank does not participate in speculative trading practices and generally holds these investments until maturity, except to the extent management deems necessary to manage the Bank's liquidity portfolio.
 Available-for-Sale. Securities that are not classified as trading or HTM are classified as AFS and carried at fair value. The Bank records changes in the fair value of these securities through AOCI as "Net unrealized gains (losses) on available-for-sale securities." For AFS securities that have been hedged and qualify as a fair value hedge, the Bank records the portion of the change in the fair value of the security related to the risk being hedged in AFS interest income together with the related change in fair value of the derivative, and records the remainder of the change in fair value through AOCI as "Net unrealized gains (losses) on available-for-sale securities."

 The Bank evaluates its individual AFS securities for impairment quarterly by comparing the security's fair value to its amortized cost. Accrued interest receivable is recorded separately on the Statements of Condition. Impairment may exist when the fair value of the investment is less than its amortized cost (i.e., in an unrealized loss position). In assessing whether a credit loss exists on an impaired security, the Bank considers whether there would be a shortfall in receiving all cash flows contractually due. When a shortfall is considered possible, the Bank compares the present value of cash flows to be collected from the security with the amortized cost basis of the security. If the present value of cash flows is less than amortized cost, an allowance for credit losses is recorded with a corresponding adjustment to the provision (reversal) for credit losses. The allowance is limited by the amount of the unrealized loss. The allowance for credit losses excludes uncollectible accrued interest receivable, which is measured separately, if applicable.
 If management intends to sell an impaired security classified as AFS, or more likely than not will be required to sell the security before expected recovery of its amortized cost basis, any allowance for credit losses is written off and the amortized cost basis is written down to the security's fair value at the reporting date with any incremental impairment reported in other income (loss). If management does not intend to sell an impaired security classified as AFS and it is not more likely than not that management will be required to sell the debt security, then the credit portion of the difference is recognized as an allowance for credit losses and any remaining difference between the security's fair value and amortized cost is recorded to
 "Net unrealized gains (losses) on available-for-sale securities" within AOCI.
 Held-to-Maturity. Securities that the Bank has both the ability and intent to hold to maturity are classified as HTM and carried at amortized cost, which represents the amount at which an investment is acquired, adjusted for periodic principal repayments, amortization of premiums, and accretion of discounts. Accrued interest receivable is recorded separately on the Statements of Condition.
 Certain changes in circumstances may cause the Bank to change its intent to hold a security to maturity without calling into question its intent to hold other debt securities to maturity in the future. Thus, the sale or transfer of a HTM security due to certain changes in circumstances, such as evidence of significant deterioration in the issuer's creditworthiness or changes in regulatory requirements, is not considered to be inconsistent with its original classification. Other events that are isolated, non-recurring, and unusual for the Bank that could not have been reasonably anticipated may cause the Bank to sell or transfer an HTM security without necessarily calling into question its intent to hold other debt securities to maturity. In addition, the sale of a debt security that meets either of the following two conditions would not be considered inconsistent with the original classification of that security: (i) the sale occurs near enough to its maturity date (for example, within three months of maturity), or call date if exercise of the call is probable, that interest rate risk is substantially eliminated as a pricing factor and the changes in market interest rates would not have a significant effect on the security's fair value or (ii) the sale occurs after the Bank has already collected a substantial portion (at least 85 percent) of the principal outstanding at acquisition due either to prepayments on the debt security or to scheduled payments on the debt security payable in equal installments (both principal and interest) over its term.
 The Bank evaluates its HTM securities for impairment quarterly on a collective, or pooled, basis unless an individual assessment is deemed necessary because the securities do not possess similar risk characteristics. An allowance for credit losses is recorded with a corresponding adjustment to the provision (reversal) for credit losses. The allowance for credit losses excludes uncollectible accrued interest receivable, which is measured separately, if applicable. If management intends to sell an impaired security classified as HTM, any allowance for credit losses is written off and the amortized cost basis is written down to the security's fair value at the reporting date with any incremental impairment reported in other income (loss).
 See " Note 4 — Investments " for details on the allowance methodologies relating to AFS and HTM securities.
 Advances (secured loans to members, former members, or eligible housing associates) are carried at amortized cost,
 which is net of premiums, discounts, and fair value hedging adjustments unless the Bank has elected the fair value option, in which case, the advances are carried at fair value. For advances carried at amortized cost, accrued interest receivable is recorded separately on the Statements of Condition. The Bank records interest on advances to interest income as earned. The Bank amortizes/accretes premiums, discounts, and fair value hedging adjustments on advances to income using the level-yield method over the contractual life of the advances.

 Advances carried at amortized cost are evaluated quarterly for expected credit losses. If deemed necessary, an allowance for credit losses is recorded with a corresponding adjustment to the provision (reversal) for credit losses. The allowance for credit losses excludes uncollectible accrued interest receivable, which is measured separately, if applicable. See " Note 5 — Advances " for details on the allowance methodology relating to advances.

 Past Due and Non-Accrual Advances. An advance is considered past due for financial reporting purposes if default of contractual principal or interest exists for a period of 30 days or more. Past due advances may consist of advances still accruing interest or advances on non-accrual status. An advance is placed on non-accrual status when full payment of principal and interest is not reasonably assured, regardless of delinquency status, or when principal or interest has been in default for a period of 90 days or more, unless the advance is both well-secured and in the process of collection. In general, the Bank would not expect advances to be placed on non-accrual status as they are required by regulation to be fully secured by underlying collateral.

 Prepayment Fees. The Bank charges a borrower a prepayment fee when the borrower prepays certain advances before the original maturity. For advances with symmetrical prepayment features, the Bank may charge the borrower a prepayment fee or pay the borrower a prepayment credit, depending on certain circumstances, such as movements in interest rates, when the advance is prepaid. Prepayment fees and credits are recorded net of the hedged item fair value hedging adjustments, if applicable, in advance interest income on the Statements of Income.

 Advance Modifications. In cases in which the Bank funds a new advance to a borrower concurrently with or within a short period of time before or after the prepayment of an existing advance, the Bank evaluates whether the new advance meets the accounting criteria to qualify as a modification of an existing advance or whether it constitutes a new advance. The Bank compares the present value of cash flows on the new advance to the present value of cash flows remaining on the existing advance. If there is at least a ten percent difference in the present value of the cash flows or if the Bank concludes the difference between the advances is more than minor based on a qualitative assessment of the modifications made to the original contractual terms, then the advance is accounted for as a new advance and all prepayment fees or credits net of fair value hedging adjustments are recognized immediately to advance interest income on the Statements of Income. In all other instances, the advance is accounted for as a modification.

 When a new advance qualifies as a modification of an existing advance, any prepayment fee, net of the hedged item fair value hedging adjustments, as well as any outstanding premiums, discounts, or other adjustments on the prepaid advance, are deferred, recorded in the basis of the modified advance, and amortized over the contractual life of the modified advance using a level-yield methodology to advance interest income.

 Mortgage Loans Held for Portfolio
 The Bank classifies mortgage loans that it has the intent and ability to hold for the foreseeable future, or until maturity or payoff, as held for portfolio. Accordingly, these mortgage loans are reported net of premiums, discounts, basis adjustments from mortgage loan purchase commitments, charge-offs, and the allowance for credit losses. The Bank records interest on mortgage loans to interest income as earned. The Bank amortizes/accretes premiums, discounts, and basis adjustments on mortgage loan purchase commitments to income using the level-yield method over the contractual life of the mortgage loans. Accrued interest receivable is recorded separately on the Statements of Condition.
 The Bank performs a quarterly assessment of its mortgage loans held for portfolio to estimate expected credit losses. If deemed necessary, an allowance for credit losses is recorded with a corresponding adjustment to the provision (reversal) for credit losses.
 The Bank measures expected credit losses on mortgage loans on a collective basis, pooling loans with similar risk characteristics. If a mortgage loan no longer shares risk characteristics with other loans, it is removed from the pool and evaluated for expected credit losses on an individual basis. When developing the allowance for credit losses, the Bank measures the estimated loss over the remaining life of a mortgage loan, which also considers how the Bank's credit enhancements mitigate credit losses. The Bank includes estimates of expected recoveries within the allowance for credit losses. The allowance excludes uncollectible accrued interest receivable, as the Bank writes off accrued interest receivable by reversing interest income if a mortgage loan is placed on non-accrual status. The Bank does not purchase mortgage loans with credit deterioration at the time of purchase. See " Note 6 — Mortgage Loans " for details on the allowance methodology relating to mortgage loans.

 Past Due and Non-Accrual Loans. A mortgage loan is considered past due if the borrower has failed to make contractual principal and/or interest payments for a period of 30 days or more. The Bank places a conventional mortgage loan on non-accrual status if it is determined that either the collection of interest or principal is doubtful or interest or principal is 90 days or more past due. The Bank does not place a government-insured mortgage loan on non-accrual status due to the U.S. Government guarantee or insurance on the loan and contractual obligation of the loan servicer to repurchase the loan when certain criteria are met. For those mortgage loans placed on non-accrual status, accrued but uncollected interest is reversed against interest income and cash payments received are recorded as a reduction of principal. In addition, premiums, discounts, and basis adjustments from mortgage loan purchase commitments are not amortized while a loan is on non-accrual status. A loan on non-accrual status may be restored to accrual status when none of its contractual principal and interest is due and unpaid and the Bank expects repayment of the remaining contractual principal and interest.

 Modifications. Generally, the Bank only grants mortgage loan modifications to borrowers experiencing financial difficulty. If the terms of the modified loan are at least as favorable to the lender as the terms offered to borrowers with similar collection risks for comparable loans and the modification to the terms of the loan is more than minor, the loan meets the accounting criteria for a new loan. Generally, a modification would not result in a new loan because the modified terms are not as favorable to the lender as terms for comparable loans that would be offered to similar borrowers. The Bank does not consider changes to the terms of government-insured mortgage loans to be modifications due to the U.S. Government guarantee or insurance on the loan and contractual obligation of the loan servicer to repurchase the loan when certain criteria are met. The Bank places all modified loans on non-accrual status at the time of modification; however, these loans may be subsequently restored to accrual status if they meet the criteria noted in the non-accrual section above.

 Individually Evaluated Loans. The Bank individually evaluates all collateral-dependent loans for expected credit losses. Collateral-dependent loans are loans in which repayment is expected to be provided solely by the sale of the underlying collateral. The Bank's collateral-dependent loans include loans in process of foreclosure, loans 180 days or more past due, bankruptcy loans 60 days or more past due, and modified loans on non-accrual status. The Bank measures these individually evaluated loans for expected credit loss based on the estimated fair value of the underlying property, less estimated selling costs and expected proceeds from PMI. All collateral-dependent loans are initially placed on non-accrual status; however, they may be subsequently restored to accrual status if they meet the criteria noted in the non-accrual section above.

 Charge-Off Policy. A charge-off is recorded if it is estimated that the amortized cost in a loan will not be recovered. The Bank evaluates whether to record a charge-off on a conventional mortgage loan upon the occurrence of a confirming event. Confirming events include but are not limited to, the occurrence of foreclosure or when a loan is deemed collateral-dependent. The Bank charges-off the portion of the outstanding conventional mortgage loan balance in excess of the fair value of the underlying collateral, which is determined using property values, less estimated selling costs and expected proceeds from PMI.

 Derivatives
 All derivatives are recognized on the Statements of Condition at their fair values and reported as either derivative assets or derivative liabilities, net of cash collateral and accrued interest received from or pledged to clearing agents and/or counterparties. The fair values of derivatives are netted by clearing agent and/or counterparty when the netting requirements have been met. If these netted amounts result in a receivable to the Bank, they are classified as a derivative asset and, if classified as a payable to the clearing agent or counterparty, they are classified as a derivative liability. Cash flows associated with a derivative are reflected as cash flows from operating activities on the Statements of Cash Flows unless the derivative meets the criteria to be a financing derivative.
 The Bank transacts most of its derivative transactions with large banks and major broker-dealers. Over-the-counter derivative transactions may be either executed directly with a counterparty, referred to as uncleared derivatives, or cleared through a clearing agent with a clearinghouse, referred to as cleared derivatives. Once a derivative transaction has been accepted for clearing by a clearinghouse, the derivative transaction is novated and the executing counterparty is replaced with the clearinghouse. The Bank is not a derivative dealer and does not trade derivatives for short-term profit.
 For uncleared derivatives, the Dodd-Frank Act imposes two-way initial margin requirements, which are required to be satisfied with securities collateral. In addition, uncleared derivative agreements are generally fully collateralized with a zero unsecured threshold, which can be satisfied with cash or securities collateral, in accordance with variation margin requirements issued by the U.S. federal bank regulatory agencies and the CFTC.

 For cleared derivatives, the clearinghouse is the Bank's counterparty. The Bank utilizes two clearinghouses, CME Clearing and LCH Ltd., for all cleared derivative transactions. CME Clearing and LCH Ltd. notify the clearing agent of the required initial margin and daily variation margin payments, and the clearing agent in turn notifies the Bank. Each clearinghouse determines initial margin requirements, which are considered collateral and can be satisfied with cash or securities. Variation margin requirements with each clearinghouse are based on changes in the fair value of cleared derivatives and are legally characterized as daily settlement payments, which are a component of the derivative fair value, rather than cash collateral.
 Derivative Designations. Derivative instruments are designated by the Bank as:
 • a fair value hedge of an associated financial instrument or firm commitment (fair value hedge); or
 • an economic hedge to manage certain defined risks on the Bank's Statements of Condition (economic hedge). These hedges are primarily used to: (i) manage mismatches between the coupon features of the Bank's assets and liabilities, (ii) offset prepayment risk in certain assets, (iii) mitigate the income statement volatility that occurs when financial instruments are recorded at fair value and hedge accounting is not permitted by accounting guidance, or (iv) reduce exposure to interest reset risk.
 Accounting for Fair Value Hedges. If hedging relationships meet certain criteria, including, but not limited to, formal documentation of the fair value hedging relationship and an expectation to be highly effective, they qualify for fair value hedge accounting. At the inception of each fair value hedge transaction, the Bank formally documents the hedge relationship and its risk management objective and strategy for undertaking the hedge, including identification of the hedging instrument, the hedged item, the nature of the risk being hedged, and how the hedging instrument's effectiveness in offsetting the exposure to changes in the hedged item's fair value attributable to the hedged risk will be assessed. This process includes linking all derivatives that are designated as fair value hedges to assets and liabilities on the Statements of Condition and firm commitments.
 Changes in the fair value of a derivative that is designated and qualifies as a fair value hedge, along with changes in the fair value of the hedged asset or liability (or firm commitment) that are attributable to the hedged risk, are recorded in net interest income in the same line as the earnings effect of the hedged item.
 Two approaches to fair value hedge accounting include:
 • Long-haul hedge accounting. The application of long-haul hedge accounting requires the Bank to formally assess (both at the hedge's inception and at least quarterly) whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the fair value of hedged items due to benchmark interest rate changes and whether those derivatives are expected to remain highly effective in future periods. The Bank uses regression analyses to assess the effectiveness of its long-haul hedges.
 • Short-cut hedge accounting. Transactions that meet certain criteria qualify for short-cut hedge accounting in which an assumption can be made that the change in fair value of a hedged item due to changes in the hedged risk, exactly offsets the change in fair value of the related derivative. Under the short-cut method, the entire change in fair value of the interest rate swap is considered to be highly effective at achieving offsetting changes in fair value of the hedged asset or liability. If documented at the time of hedge designation, a derivative relationship no longer qualifying for short-cut hedge accounting can fall back to the long-haul accounting method.

 Derivatives are typically executed at the same time as the hedged item, and the Bank designates the hedged item in a fair value hedging relationship at the trade date. In many hedging relationships, the Bank may designate the fair value hedging relationship upon its commitment to disburse an advance, or trade a consolidated obligation in which settlement occurs within the shortest period of time possible for the type of instrument based on market settlement conventions. The Bank then records the changes in fair value of the derivative and the hedged item beginning on the trade date.

 Accounting for Economic Hedges. An economic hedge is defined as a derivative hedging specific or non-specific underlying assets, liabilities, or firm commitments that does not qualify or was not designated for fair value hedge accounting, but is an acceptable hedging strategy under the Bank's risk management program. Changes in the fair value of derivatives that are designated as economic hedges are recorded in other income (loss) as "Net gains (losses) on derivatives" with no offsetting fair value adjustments for the underlying assets, liabilities, or firm commitments, unless changes in the fair value of the those items are normally marked to fair value through earnings (e.g., trading securities and fair value option instruments).

 Accrued Interest Receivables and Payables. The net settlements of interest receivables and payables related to derivatives designated as fair value hedges are recognized as adjustments to the interest income or interest expense of the designated hedged item. The net settlements of interest receivables and payables related to derivatives designated as economic hedges are recognized in other income (loss) as "Net gains (losses) on derivatives."
 Discontinuance of Hedge Accounting. The Bank discontinues fair value hedge accounting prospectively when either (i) it determines that the derivative is no longer highly effective in offsetting changes in the fair value of a hedged item due to changes in the benchmark interest rate, (ii) the derivative and/or the hedged item expires or is sold, terminated, or exercised, or (iii) management determines that designating the derivative as a hedging instrument is no longer appropriate.
 When fair value hedge accounting is discontinued, the Bank either terminates the derivative or continues to carry the derivative on the Statements of Condition at its fair value. For any remaining hedged item, the Bank ceases to adjust the hedged item for changes in fair value and amortizes the cumulative basis adjustment on the hedged item into earnings over the remaining contractual life of the hedged item using the level-yield method.
 Embedded Derivatives. The Bank may issue debt, make advances, or purchase financial instruments in which a derivative instrument is embedded. Upon execution of these transactions, the Bank assesses whether the economic characteristics of the embedded derivative are clearly and closely related to the economic characteristics of the remaining component of the debt, advance, or purchased financial instrument (the host contract) and whether a separate, non-embedded instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. If the Bank determines that the embedded derivative has economic characteristics that are not clearly and closely related to the economic characteristics of the host contract and a separate, stand-alone instrument with the same terms would qualify as a derivative instrument, the embedded derivative is separated from the host contract, carried at fair value, and designated as an economic derivative instrument. However, if the Bank elects to carry the entire contract (the host contract and the embedded derivative) at fair value on the Statements of Condition, changes in fair value of the entire contract will be reported in current period earnings.

 Consolidated Obligations
 The Bank reports consolidated obligations at amortized cost, which is net of premiums, discounts, concessions, and fair value hedging adjustments unless the Bank has elected the fair value option, in which case the consolidated obligations are carried at fair value. The Bank records interest on consolidated obligations bonds to interest expense as incurred. The Bank amortizes/accretes premiums, discounts, concessions, and fair value hedging adjustments on consolidated obligations to expense using the level-yield method over the contractual life of the consolidated obligations.
 Concessions. The Bank pays concessions to dealers in connection with the issuance of certain consolidated obligations. The Office of Finance prorates the amount of the concession to each FHLBank, based upon the percentage of the debt issued that is attributed to that FHLBank. Concessions paid on consolidated obligations designated under the fair value option are expensed as incurred and recorded in other expense. Concessions paid on consolidated obligations not designated under the fair value option are deferred and amortized over the contractual life of the consolidated obligations using the level-yield method. Unamortized concessions are included as a direct deduction from the carrying amount of "Consolidated obligation discount notes" or "Consolidated obligation bonds" on the Statements of Condition and the amortization of those concessions is included in consolidated obligation interest expense.
 Off-Balance Sheet Credit Exposures

 The Bank evaluates its off-balance sheet credit exposures on a quarterly basis for expected credit losses. If deemed necessary, an allowance for expected credit losses on these off-balance sheet exposures is recorded in other liabilities, with a corresponding adjustment to the provision (reversal) for credit losses. See " Note 14 — Commitments and Contingencies " for additional information.

 Mandatorily Redeemable Capital Stock
 The Bank reclassifies capital stock subject to redemption from equity to MRCS at the time shares meet the definition of a mandatorily redeemable financial instrument. This occurs after a member provides written notice of redemption, gives notice of intention to withdraw from membership, becomes ineligible for continuing membership, or attains non-member status by merger or consolidation, charter termination, or other involuntary termination from membership. Shares meeting this definition are reclassified to a liability at fair value. Dividends on MRCS are classified as interest expense on the Statements of Income. The repurchase or redemption of MRCS is transacted at par value and is reflected as a cash outflow in the financing activities section of the Statements of Cash Flows. If a member cancels its written notice of redemption or notice of withdrawal, the Bank will reclassify MRCS from a liability to equity. After the reclassification, dividends on the capital stock will no longer be classified as interest expense.
 Restricted Retained Earnings
 The Bank entered into a JCE Agreement with all of the other FHLBanks in 2011. The JCE Agreement, as amended, is intended to enhance the capital position of the FHLBanks over time. Under the JCE Agreement, each FHLBank is required to allocate 20 percent of its quarterly net income to a restricted retained earnings account until the balance of that account, calculated as of the last day of each calendar quarter, equals at least one percent of its average balance of outstanding consolidated obligations for the calendar quarter. The restricted retained earnings are not available to pay dividends and are presented separately on the Statements of Condition.

 Affordable Housing Program Assessments
 The FHLBank Act requires each FHLBank to establish and fund an AHP, which provides subsidies in the form of direct grants and below-market interest rate advances to members who use the funds to assist in the purchase, construction, or rehabilitation of housing for very low-, low-, or moderate-income households. Annually, each FHLBank must set aside for the AHP the greater of 10 percent of its annual income subject to assessment, or its prorated sum required to ensure the aggregate contribution by the FHLBanks is no less than $ 100 million per year. For purposes of the AHP assessment, income subject to assessment is defined as net income before assessments, plus interest expense related to MRCS. The Bank accrues this expense monthly based on its income subject to assessment. In addition to the required AHP assessment, the Bank's Board of Directors may elect to make voluntary contributions to the AHP. The Bank reduces its AHP liability as program funds are distributed.

 Note 2 — Recently Adopted and Issued Accounting Guidance

 Segment Reporting (ASU 2023-07)

 On November 27, 2023, the FASB issued guidance improving reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance became effective for the Bank for the annual period beginning on January 1, 2024, and for the interim periods beginning on January 1, 2025. The adoption of this guidance is not expected to have any effect on the Bank's financial condition, results of operations, or cash flows; however, it may increase certain disclosures.

 Disclosure Improvements in Response to SEC Initiative (ASU 2023-06)

 On October 9, 2023, the FASB issued guidance amending various disclosure requirements in response to the SEC's initiative to update and simplify disclosures. This guidance will become effective for the Bank on the date the SEC removes the related disclosure requirements from its existing regulations, to avoid duplication in FASB codification. The adoption of this guidance is not expected to have any effect on the Bank's financial condition, results of operations, or cash flows; however, it may impact certain disclosures.

 Troubled Debt Restructurings and Vintage Disclosures (ASU 2022-02)

 On March 31, 2022, the FASB issued guidance eliminating the accounting requirements for TDRs by creditors that have adopted the current expected credit losses methodology, while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. Additionally, this guidance requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases. This guidance became effective for the Bank for the interim and annual periods beginning on January 1, 2023, and was adopted on a prospective basis. The adoption of this guidance did not have a material effect on the Bank's financial condition, results of operations, or cash flows.

 Fair Value Hedging – Portfolio Layer Method (ASU 2022-01)

 On March 28, 2022, the FASB issued guidance expanding the current last-of-layer method to apply fair value hedging by allowing multiple hedged layers of a single closed portfolio under the method. To reflect that expansion, the last-of-layer method is renamed "the portfolio layer method". Among other things, this guidance (i) expands the scope of the portfolio layer method to include non-prepayable assets, (ii) specifies eligible hedging instruments in a single-layer hedge, (iii) provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, and (iv) specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio. This guidance became effective for the interim and annual periods beginning on January 1, 2023. The Bank does not currently utilize the last-of-layer hedging method and therefore this guidance did not have any impact on the Bank's financial condition, results of operations, or cash flows.

 Reference Rate Reform (ASU 2020-04)

 On March 12, 2020, the FASB issued temporary guidance to ease the potential burden in accounting for reference rate reform related to the transition from LIBOR. The guidance provided optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform, if certain criteria were met. These transactions included contract modifications, hedging relationships, and the sale/transfer of HTM debt securities.

 During the first half of 2023, the Bank elected the contractual modification and hedging relationship optional expedients and transitioned all of its outstanding LIBOR-indexed instruments to reference SOFR immediately after June 30, 2023, or at the beginning of the next reset period following LIBOR cessation. The election of the expedients did not have a material effect on the Bank's financial condition, results of operations, or cash flows. As of September 30, 2023, all of the Bank's qualifying contracts had fully transitioned to SOFR.

 Note 3 — Cash and Due from Banks

 Cash and due from banks includes cash on hand, cash items in the process of collection, compensating balances, and amounts due from the Federal Reserve Bank.
 COMPENSATING BALANCES
 The Bank maintains collected cash balances with commercial banks in return for certain services. These arrangements contain no legal restrictions on the withdrawal of funds. Average collected cash balances were $ 35 million and $ 36 million for the years ended December 31, 2023 and 2022.

 Note 4 — Investments

 The Bank makes short-term investments in interest-bearing deposits, securities purchased under agreements to resell, and federal funds sold, and makes other investments in debt securities, which are classified as either trading, AFS, or HTM.

 INTEREST-BEARING DEPOSITS, SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL, AND FEDERAL FUNDS SOLD

 The Bank invests 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 have received a credit rating of triple-B or greater (investment grade) by an NRSRO. At December 31, 2023 and 2022, none of these investments were with counterparties rated below triple-B; however, as of December 31, 2023 and 2022, approximately 35 percent and nine percent were secured securities purchased under agreements to resell with unrated counterparties. These NRSRO ratings may differ from any internal ratings of the investments by the Bank.

 Federal funds sold are unsecured loans that are generally transacted on an overnight term. Finance Agency regulations include a limit on the amount of unsecured credit the Bank may extend to a counterparty. At December 31, 2023 and 2022, no allowance for credit losses was recorded for interest-bearing deposits and federal funds sold, as all assets were repaid or expected to be repaid according to their contractual terms. The carrying values of interest-bearing deposits and federal funds sold exclude accrued interest receivable of $ 22 million and $ 11 million at December 31, 2023 and 2022.

 Securities purchased under agreements to resell are secured, short-term, and are structured such that they are evaluated regularly to determine if the market value of the underlying securities decreases below the market value required as collateral (i.e., subject to collateral maintenance provisions). If so, the counterparty must place an equivalent amount of additional securities as collateral or remit an equivalent amount of cash, generally by the next business day. Based upon the collateral held as security and collateral maintenance provisions with its counterparties, the Bank determined that no allowance for credit losses was needed for its securities purchased under agreements to resell at December 31, 2023 and 2022. The carrying value of securities purchased under agreements to resell excludes accrued interest receivable of $ 5 million and $ 3 million at December 31, 2023 and 2022.

 DEBT SECURITIES

 The Bank invests in debt securities, which are classified as either trading, AFS, or HTM. The Bank is prohibited by Finance Agency regulations from purchasing certain higher-risk securities, such as equity securities and debt instruments that are not investment quality. A security is considered to be investment quality if it has adequate financial backing so that full and timely payment of principal and interest is expected and there is minimal risk that the timely payment of principal and interest would not occur because of adverse changes in economic and financial conditions during the projected life of the security. Exceptions are allowed for certain investments targeted at low-income persons or communities, and instruments that experience credit deterioration after their purchase by the Bank.

 Trading Securities

 Trading securities by major security type were as follows (dollars in millions):

 2023
 2022

 U.S. Treasury obligations1

 $
 2,925
 $
 2,501

 Other U.S. obligations1

 Other2

 3,152
 2,772

 —

 Total fair value
 $
 3,152
 $
 2,817

 1 Represents investment securities backed by the full faith and credit of the U.S. Government.

 2 Consists of taxable municipal bonds.

 Net Gains (Losses) on Trading Securities

 The following table summarizes the components of "Net gains (losses) on trading securities" as presented on the Statements of Income (dollars in millions):

 2023
 2022
 2021

 Net unrealized gains (losses) on trading securities held at period-end
 $
 $
 ( 85)
 $
 ( 28)

 Net gains (losses) on trading securities no longer held at period-end
 ( 10)
 ( 10)

 Net gains (losses) on trading securities
 $
 $
 ( 95)
 $
 ( 38)

 AFS securities by major security type were as follows (dollars in millions):

Cost1

 Gross
Unrealized
Gains
 Gross
Unrealized

Fair
Value

 Other U.S. obligations2

 $
 $
 —
 $
 ( 3)
 $

 —

 ( 5)

 Other3

 —

 1,273
 ( 8)
 1,290

 4,421
 ( 24)
 4,398

 —
 ( 3)

 18,124
 ( 184)

 22,728
 ( 211)
 22,533

 Total
 $
 24,001
 $
 $
 ( 219)
 $

Cost1

 Gross
Unrealized
Gains
 Gross
Unrealized

Fair
Value

 Other U.S. obligations2

 $
 $
 $
 ( 2)
 $

 ( 1)

 —
 ( 5)

 Other3

 —

 1,906
 ( 8)
 1,917

 3,693
 ( 18)
 3,676

 ( 3)

 9,866
 ( 116)
 9,760

 13,771
 ( 137)
 13,646

 Total
 $
 15,677
 $
 $
 ( 145)
 $

 1 Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, and/or fair value hedge accounting adjustments, and excludes accrued interest receivable of $ 82 million and $ 49 million at December 31, 2023 and 2022.

 2 Represents investment securities backed by the full faith and credit of the U.S. Government.

 3 Consists primarily of taxable municipal bonds.

 The Bank had no sales of AFS securities during the years ended December 31, 2023, 2022, and 2021.

 Unrealized Losses

 The following tables summarize AFS securities with gross unrealized losses by major security type and length of time that individual securities have been in a continuous unrealized loss position (dollars in millions). In cases where the gross unrealized losses for an investment category are less than $1 million, the losses are not reported.

 Less than 12 Months
 12 Months or More
 Total

 Fair
Value
 Fair
Value
 Fair
Value

 Other U.S. obligations1

 $
 $
 ( 3)
 $
 $
 —
 $
 $
 ( 3)

 —
 —
 ( 5)
 ( 5)

 ( 3)
 ( 5)
 ( 8)

 U.S. obligations single-family1

 1,813
 ( 8)
 2,410
 ( 16)
 4,223
 ( 24)

 —
 ( 3)
 ( 3)

 8,768
 ( 70)
 5,722
 ( 114)
 14,490
 ( 184)

 10,606
 ( 78)
 8,244
 ( 133)
 18,850
 ( 211)

 Total
 $
 10,693
 $
 ( 81)
 $
 8,666
 $
 ( 138)
 $
 19,359
 $
 ( 219)

 Less than 12 Months
 12 Months or More
 Total

 Fair
Value
 Fair
Value
 Fair
Value

 Other U.S. obligations1

 $
 $
 ( 1)
 $
 $
 ( 1)
 $
 $
 ( 2)

 ( 1)
 —
 —
 ( 1)

 ( 1)
 ( 4)
 ( 5)

 ( 3)
 ( 5)
 1,013
 ( 8)

 U.S. obligations single-family1

 3,094
 ( 17)
 ( 1)
 3,216
 ( 18)

 ( 3)
 —
 —
 ( 3)

 5,471
 ( 97)
 2,012
 ( 19)
 7,483
 ( 116)

 8,703
 2,134
 ( 20)
 10,837
 ( 137)

 Total
 $
 9,250
 $
 ( 120)
 $
 2,600
 $
 ( 25)
 $
 11,850
 $
 ( 145)

 1 Represents investment securities backed by the full faith and credit of the U.S. Government.

 Contractual Maturity

 The following table summarizes AFS securities by contractual maturity. Expected maturities of some securities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without call or prepayment fees (dollars in millions):

 Year of Contractual Maturity
Cost
 Fair
Value
Cost
 Fair
Value

 $
 $
 $
 $

 Due after one year through five years

 Due after five years through ten years

 Due after ten years

 1,273
 1,290
 1,906
 1,917

 22,728
 22,533
 13,771
 13,646

 Total
 $
 24,001
 $
 $
 15,677
 $

 HTM Securities

 HTM securities by major security type were as follows (dollars in millions):

Cost1

 Gross
Unrecognized
Gains
 Gross
Unrecognized
 Fair
Value

 $
 $
 $
 ( 3)
 $

 —
 —

 ( 3)

 —
 —

 —
 ( 10)

 Private-label
 —
 —

 —
 ( 10)

 Total
 $
 $
 $
 ( 13)
 $

Cost1

 Gross
Unrecognized
Gains
 Gross
Unrecognized
 Fair
Value

 $
 $
 $
 ( 4)
 $

 —
 —

 ( 4)

 —
 —

 —
 ( 12)

 Private-label
 —
 —

 —
 ( 12)

 Total
 $
 $
 $
 ( 16)
 $

 1 Amortized cost includes adjustments made to the cost basis of an investment for accretion or amortization and excludes accrued interest receivable of $ 5 million at both December 31, 2023 and 2022.

 2 Represents investment securities backed by the full faith and credit of the U.S. Government.

 The Bank had no sales of HTM securities during the years ended December 31, 2023, 2022, and 2021.

 Contractual Maturity

 The following table summarizes HTM securities by contractual maturity. Expected maturities of some securities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without call or prepayment fees (dollars in millions):

 Year of Contractual Maturity
Cost
 Fair
Value
Cost
 Fair
Value

 Due after one year through five years
 $
 $
 $
 $

 Due after five years through ten years

 Due after ten years

 Total
 $
 $
 $
 $

 ALLOWANCE FOR CREDIT LOSSES ON AFS AND HTM SECURITIES

 The Bank evaluates AFS and HTM investment securities for credit losses on a quarterly basis. The Bank's AFS and HTM securities may include, but are not limited to, certificates of deposit, commercial paper, U.S. obligations, GSE and TVA obligations, state or local housing agency obligations, taxable municipal bonds, and MBS. The Bank only purchases securities considered investment quality. At both December 31, 2023 and 2022, over 99 percent of the Bank's AFS and HTM securities, based on amortized cost, were rated single-A or above by an NRSRO, based on the lowest long-term credit rating for each security. These NRSRO ratings may differ from any internal ratings of the securities by the Bank.

 The Bank evaluates its individual AFS securities for impairment by comparing the security's fair value to its amortized cost. Impairment may exist when the fair value of the investment is less than its amortized cost (i.e., in an unrealized loss position). At December 31, 2023 and 2022, certain AFS securities held by the Bank were in an unrealized loss position. These losses are considered temporary as the Bank expects to recover the entire amortized cost basis on these AFS investment securities and neither intends to sell these securities nor considers it more likely than not that it will be required to sell these securities before its anticipated recovery of each security's remaining amortized cost basis. In addition, substantially all of these securities are high-quality GSE securities or carry an explicit government guarantee. In the case of GSE securities, they are purchased under an assumption that the issuers' obligation to pay principal and interest on those securities will be honored, taking into account their status as GSEs. As a result, no allowance for credit losses was recorded on these AFS securities at December 31, 2023 and 2022.

 The Bank evaluates its HTM securities for impairment on a collective, or pooled, basis unless an individual assessment is deemed necessary because the securities do not possess similar risk characteristics. At December 31, 2023 and 2022, the Bank had no allowance for credit losses recorded on its HTM securities because the securities: (i) were all highly-rated, (ii) had not experienced, nor did the Bank expect, any material payment default on the instruments, (iii) in the case of U.S. obligations, carry an explicit government guarantee, and (iv) in the case of GSE securities, they are purchased under an assumption that the issuers' obligation to pay principal and interest on those securities will be honored, taking into account their status as GSEs.

 Note 5 — Advances

 The Bank offers a wide range of fixed and variable rate advance products with different maturities, interest rates, payment characteristics, and optionality. Fixed rate advances generally have maturities ranging from overnight to 30 years. Variable rate advances generally have maturities ranging from one month to ten years, where the interest rates reset periodically to a specified interest rate index such as SOFR or consolidated obligation yields.

 REDEMPTION TERM

 The following table summarizes the Bank's advances outstanding by redemption term (dollars in millions):

 Redemption Term
 Amount1

Rate
 Amount1

Rate

 Overdrawn demand deposit accounts
 $
 7.14
 %
 $
 6.10
 %

 52,890
 5.34
 61,578
 4.26

 Due after one year through two years
 14,866
 4.12
 23,026
 4.25

 13,230
 3.95
 10,790
 3.47

 8,689
 4.35
 7,149
 3.03

 Due after four years through five years
 30,189
 5.55
 6,047
 3.89

 3,355
 3.51
 3,783
 3.03

 123,221
 4.98
 %
 112,374
 4.04
 %

 ( 697)
 ( 1,183)

 Total
 $
 $

 1 Excludes accrued interest receivable of $ 392 million and $ 271 million at December 31, 2023 and 2022.

 The Bank offers advances to members and eligible housing associates that may be prepaid on predetermined dates (call dates) prior to maturity without incurring prepayment fees (callable advances). Other advances may require a prepayment fee or credit that makes the Bank financially indifferent to the prepayment of the advance. At December 31, 2023 and 2022, the Bank had callable advances outstanding totaling $ 31.8 billion and $ 23.4 billion.

 The following table summarizes advances by year of redemption term or next call date for callable advances (dollars in millions):
 Redemption Term
or Next Call Date

2023
2022

 Overdrawn demand deposit accounts
 $
 $

 82,983
 73,765

 Due after one year through two years
 12,136
 20,883

 10,584
 6,218

 5,980
 4,468

 Due after four years through five years
 8,228
 3,228

 3,308
 3,811

 $
 123,221
 $
 112,374

 PREPAYMENT FEES

 The Bank generally charges a prepayment fee for advances that a borrower elects to terminate prior to the stated maturity or outside of a predetermined call date. The fees charged are priced to make the Bank financially indifferent to the prepayment of the advance. For certain advances with symmetrical prepayment features, the Bank may charge the borrower a prepayment fee or pay the borrower a prepayment credit, depending on certain circumstances, such as movements in interest rates, when the advance is prepaid. Prepayment fees and credits are recorded net of the hedged item fair value hedging adjustments, if applicable, in advance interest income on the Statements of Income.

 ADVANCE CONCENTRATIONS

 The Bank's advances are primarily concentrated in commercial banks and insurance companies. At December 31, 2023 and 2022, the Bank had outstanding advances of $ 37.0 billion and $ 32.0 billion to Wells Fargo Bank, N.A., which represented 30 percent and 28 percent of the total principal amount of outstanding advances.

 ALLOWANCE FOR CREDIT LOSSES

 The Bank evaluates advances for credit losses on a quarterly basis and manages its credit exposure to advances through an approach that includes establishing a credit limit for each borrower. This approach includes an ongoing review of each borrower's financial condition in conjunction with the Bank's collateral and lending policies to limit risk of loss while balancing borrowers' needs for a reliable source of funding. In addition, the Bank lends to eligible borrowers in accordance with the FHLBank Act, Finance Agency regulations, and other applicable laws.

 The Bank is required by regulation to obtain sufficient collateral to fully secure its advances. The estimated value of the collateral required to secure each borrower's advances is calculated by applying collateral discounts, or haircuts, to the unpaid principal balance or market value, as applicable, of the collateral. The Bank also has policies and procedures for validating the reasonableness of the Bank's collateral valuations. In addition, collateral verifications and on-site reviews are performed by the Bank based on the risk profile of the borrower. Management believes that these policies effectively manage the Bank's credit risk from advances.

 Eligible collateral includes:

 • fully disbursed whole first mortgages on improved residential real property or securities representing a whole interest in such mortgages;

 • loans and securities issued, insured, or guaranteed by the U.S. Government or any agency thereof, including MBS issued or guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae;

 • cash deposited with the Bank; and

 • other real estate-related collateral acceptable to the Bank, such as second lien mortgages, home equity lines of credit, municipal securities, and commercial real estate mortgages, provided such collateral has a readily ascertainable value and the Bank can perfect a security interest in it.

 CFIs may also pledge collateral consisting of secured small business, small agri-business, or small farm loans. As additional security, the FHLBank Act provides that the Bank has a lien on each member's capital stock investment; however, capital stock cannot be pledged as collateral to secure advances.

 Collateral arrangements may vary depending upon borrower credit quality, financial condition and performance, borrowing capacity, and overall credit exposure to the borrower. The Bank can also require additional or substitute collateral to protect its security interest. The Bank periodically evaluates and makes changes to its collateral guidelines and collateral haircuts.

 Borrowers may pledge collateral to the Bank by executing a blanket pledge agreement, specifically assigning collateral, or placing physical possession of collateral with the Bank or its custodians. The Bank perfects its security interest in all pledged collateral by filing Uniform Commercial Code financing statements or by taking possession or control of the collateral. Under the FHLBank Act, any security interest granted to the Bank by its members, or any affiliates of its members, has priority over the claims and rights of any party (including any receiver, conservator, trustee, or similar party having rights of a lien creditor), unless those claims and rights would be entitled to priority under otherwise applicable law and are held by actual purchasers or by parties that have perfected security interests.

 Under a blanket pledge agreement, the Bank is granted a security interest in all financial assets of the borrower to fully secure the borrower's obligation. Other than securities and cash deposits, the Bank does not initially take delivery of collateral from blanket pledge agreement borrowers. In the event of a default or a deterioration in the financial condition of a blanket pledge agreement borrower, the Bank has the ability to require delivery of pledged collateral sufficient to secure the borrower's obligation. With respect to non-blanket pledge agreement borrowers that are federally insured, the Bank generally requires collateral to be specifically assigned. With respect to non-blanket pledge agreement borrowers that are not federally insured (typically insurance companies, CDFIs, and housing associates), the Bank generally takes control of collateral through the delivery of cash, securities, or loans to the Bank or its custodians.

 Using a risk-based approach and taking into consideration each borrower's financial strength, the Bank considers the types and level of collateral to be the primary indicator of credit quality on its advances. At December 31, 2023 and 2022, the Bank had rights to collateral on a borrower-by-borrower basis with an unpaid principal balance or market value, as applicable, in excess of its outstanding advances.

 At December 31, 2023 and 2022, none of the Bank's advances were past due, on non-accrual status, or considered impaired. The Bank considers its advances past due if a default of contractual principal or interest exists for a period of 30 days or more. In addition, there were no modifications related to advances resulting from a borrower experiencing financial difficulties during the years ended December 31, 2023 and 2022.

 The Bank has never experienced a credit loss on its advances. Based upon the Bank's collateral and lending policies, the collateral held as security, and the repayment history on advances, management has determined that there were no expected credit losses on its advances at December 31, 2023 and 2022.

 Note 6 — Mortgage Loans Held for Portfolio

 Mortgage loans held for portfolio include conventional mortgage loans and government-guaranteed or -insured mortgage loans obtained primarily through the MPF program. The Bank's mortgage loan program involves investment by the Bank in single-family mortgage loans held for portfolio that are purchased from PFIs. Mortgage loans may also be acquired through participations in pools of eligible mortgage loans purchased from other FHLBanks. The Bank's PFIs generally originate, service, and credit enhance mortgage loans that are sold to the Bank. PFIs participating in the servicing release program do not service the loans owned by the Bank. The servicing on these loans is sold concurrently by the PFI to a designated mortgage service provider.

 The following table presents information on the Bank's mortgage loans held for portfolio (dollars in millions):

 2023
 2022

 Fixed rate, long-term1 single-family mortgage loans

 $
 8,939
 $
 7,244

 Fixed rate, medium-term2 single-family mortgage loans

 1,033

 9,884
 8,277

 Discounts
 ( 11)
 ( 11)

 Basis adjustments from mortgage loan purchase commitments
 ( 13)
 ( 9)

 Total mortgage loans held for portfolio3

 9,973
 8,353

 Allowance for credit losses
 ( 6)
 ( 5)

 Total mortgage loans held for portfolio, net
 $
 9,967
 $
 8,348

 1 Long-term is defined as an original term of greater than 15 years and up to 30 years.

 2 Medium-term is defined as an original term of 15 years or less.

 3 Excludes accrued interest receivable of $ 58 million and $ 42 million at December 31, 2023 and 2022.

 The following table presents the Bank's mortgage loans held for portfolio by collateral or guarantee type (dollars in millions):

 2023
 2022

 Conventional mortgage loans
 $
 9,506
 $
 7,890

 Government-insured mortgage loans

 $
 9,884
 $
 8,277

 PAYMENT STATUS OF MORTGAGE LOANS

 Payment status is the key credit quality indicator for conventional mortgage loans and allows the Bank to monitor borrower performance. Past due loans are those where the borrower has failed to make contractual principal and/or interest payments for a period of 30 days or more. Other delinquency statistics include non-accrual loans and loans in process of foreclosure.

 The following tables present the payment status for conventional mortgage loans (dollars in millions):

 Origination Year

 Prior to 2019

 2019 to 2023

 Total

 Past due 30 - 59 days
 $
 $
 $

 Past due 60 - 89 days

 Past due 90 - 179 days

 Past due 180 days or more

 Total past due mortgage loans

 Total current mortgage loans
 1,752
 7,758
 9,510

 Total amortized cost of mortgage loans1

 $
 1,787
 $
 7,802
 $
 9,589

 Origination Year

 Prior to 2018

 2018 to 2022

 Total

 Past due 30 - 59 days
 $
 $
 $

 Past due 60 - 89 days

 Past due 90 - 179 days

 Past due 180 days or more

 Total past due mortgage loans

 Total current mortgage loans
 1,764
 6,128
 7,892

 Total amortized cost of mortgage loans1

 $
 1,800
 $
 6,160
 $
 7,960

 1 Amortized cost represents the unpaid principal balance adjusted for unamortized premiums, discounts, price adjustment fees, basis adjustments, and direct write-downs. Amortized cost excludes accrued interest receivable.

 The following tables present other delinquency statistics for mortgage loans (dollars in millions):

 Amortized Cost
 Conventional
 Government-Insured
 Total

 In process of foreclosure1

 $
 $
 $

 Serious delinquency rate2

 —
 %
 %
 —
 %

 Past due 90 days or more and still accruing interest3

 $
 —
 $
 $

 Non-accrual mortgage loans4

 $
 $
 —
 $

 Amortized Cost
 Conventional
 Government- Insured
 Total

 In process of foreclosure1

 $
 $
 $

 Serious delinquency rate2

 —
 %
 %
 —
 %

 Past due 90 days or more and still accruing interest3

 $
 —
 $
 $

 Non-accrual mortgage loans4

 $
 $
 —
 $

 1 Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported.

 2 Represents mortgage loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of total mortgage loans. Serious delinquency rate on conventional loans was less than one percent at December 31, 2023 and 2022.

 3 Represents government-insured mortgage loans that are 90 days or more past due.

 4 Represents conventional mortgage loans that are 90 days or more past due or for which the collection of interest or principal is doubtful. At December 31, 2023 and 2022, $ 24 million and $ 29 million of conventional mortgage loans on non-accrual status were evaluated individually and do 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 is greater than the amortized cost of the loans.

 ALLOWANCE FOR CREDIT LOSSES

 The Bank evaluates mortgage loans for credit losses on a quarterly basis.

 Conventional Mortgage Loans

 Conventional mortgage loans are evaluated collectively when similar risk characteristics exists. Conventional loans that do not share risk characteristics with other pools are evaluated for expected credit losses on an individual basis. The Bank determines its allowances for credit losses on conventional loans through analyses that include consideration of various loan portfolio and collateral-related characteristics, such as past performance, current conditions, and reasonable and supportable forecasts of expected economic conditions. At December 31, 2023 and 2022, the Bank's allowance for credit losses on conventional mortgage loans remained relatively stable at $ 6 million and $ 5 million.

 For collectively evaluated loans, the Bank uses a projected cash flow model to estimate expected credit losses over the life of the loans. This model relies on a number of inputs, such as current and projected property values and interest rates, as well as historical borrower behavior experience. The Bank also incorporates associated credit enhancements when determining its estimate of expected credit losses. The Bank may incorporate a management adjustment in the allowance for credit losses for conventional mortgage loans due to changes in economic and business conditions or other factors that may not be fully captured in its model.

 For individually evaluated loans, the Bank uses the practical expedient for collateral-dependent assets. A mortgage loan is considered collateral-dependent when repayment is expected to be provided solely by the sale of the underlying collateral. The Bank estimates the fair value of this collateral using a property valuation model. The expected credit loss of a collateral- dependent mortgage loan is equal to the difference between the amortized cost of the loan and the estimated fair value of the collateral, less estimated selling costs and expected proceeds from PMI. The Bank records a direct charge-off of the loan balance if certain triggering criteria are met. Expected recoveries of prior charge-offs are included in the allowance for credit losses.

 Government-Insured Mortgage Loans

 The Bank invests in government-insured fixed rate mortgage loans portfolios that are insured or guaranteed by the FHA, the Department of Veterans Affairs, Department of Housing and Urban Development, and/or the Rural Housing Service of the Department of Agriculture. The servicer or PFI obtains and maintains insurance or a guaranty from the applicable government agency. The servicer or PFI is responsible for compliance with all government agency requirements and for obtaining the benefit of the applicable guarantee or insurance with respect to defaulted government-insured mortgage loans. Any losses incurred on these loans that are not recovered from the insurer/guarantor are absorbed by the servicers. As such, the Bank only has credit risk for these loans if the servicer or PFI fails to pay for losses not covered by the guarantee or insurance, but in such instance, the Bank would have recourse against the servicer for such failure.

 The Bank has never experienced a credit loss on its government-insured mortgage loans. At December 31, 2023 and 2022, the Bank assessed its servicers and determined there was no expectation that a servicer would fail to remit payments due until paid in full. As a result, the Bank did not establish an allowance for credit losses for its government-insured mortgage loans at December 31, 2023 and 2022. Furthermore, none of these mortgage loans have been placed on non-accrual status because of the U.S. Government guarantee or insurance on these loans and the contractual obligation of the loan servicer to repurchase the loans when certain criteria are met.

 Note 7 — Derivatives and Hedging Activities

 NATURE OF BUSINESS ACTIVITY

 The Bank is exposed to interest rate risk primarily from the effect of interest rate changes on its interest-earning assets and its related funding sources. The goal of the Bank's interest rate risk management strategy is not to eliminate interest rate risk, but to manage it within appropriate limits. To mitigate the risk of loss, the Bank has established policies and procedures which include guidelines on the amount of exposure to interest rate changes it is willing to accept.

 The Bank enters into derivative contracts to manage the interest rate risk exposures inherent in its otherwise unhedged assets and funding positions. Finance Agency regulations and the Bank's risk management policies establish guidelines for derivatives, prohibit the speculative use of derivatives, and limit credit risk arising from derivatives.

 Derivative financial instruments are used by the Bank to achieve its financial and risk management objectives. The Bank reevaluates its hedging strategies periodically and may change the hedging techniques it uses or may adopt new strategies. The most common ways in which the Bank uses derivatives are to:

 • reduce the interest rate sensitivity and repricing gaps of assets and liabilities;

 • preserve an interest rate spread between the yield of an asset and the cost of the related liability. Without the use of derivatives, this interest rate spread could be reduced or eliminated when a change in the interest rate on the asset does not match a change in the interest rate on the liability;

 • mitigate the adverse earnings effects of the shortening or extension of certain assets and liabilities;

 • manage embedded options in assets and liabilities; and

 • reduce funding costs by combining a derivative with a consolidated obligation, as the cost of a combined funding structure can be lower than the cost of a comparable consolidated obligation.

 TYPES OF DERIVATIVES

 The Bank may use the following derivative instruments:

 • Interest Rate Swaps. An interest rate swap is an agreement between two entities to exchange cash flows in the future. The agreement sets the dates on which the cash flows will be exchanged and the manner in which the cash flows will be calculated. One of the simplest forms of an interest rate swap involves the promise by one party to pay cash flows equivalent to the interest on a notional amount at a predetermined fixed rate for a given period of time. In return for this promise, this party receives cash flows equivalent to the interest on the same notional amount at a variable interest rate index for the same period of time. The variable interest rate received or paid by the Bank in derivative transactions is primarily the OIS rate, based on either federal funds or SOFR.

 • Options. An option is an agreement between two entities that conveys the right, but not the obligation, to engage in a future transaction on some underlying security or other financial asset at an agreed-upon price during a certain period of time or on a specific date. Premiums or swap fees paid to acquire options are considered the fair value of the option at inception of the hedge and are reported as derivative assets on the Statements of Condition.

 • Swaptions. A swaption is an option on a swap that gives the buyer the right to enter into a specified interest rate swap at a certain time in the future. When used as a hedge, a swaption can protect the Bank against future interest rate changes. The Bank may enter into both payer and receiver swaptions. A payer swaption is the option to make fixed interest payments at a later date and a receiver swaption is the option to receive fixed interest payments at a later date.

 • Interest Rate Caps and Floors. In an interest rate cap agreement, a cash flow is generated if the price or interest rate of an underlying variable rises above a certain threshold (or "cap") price. In an interest rate floor agreement, a cash flow is generated if the price or interest rate of an underlying variable falls below a certain threshold (or "floor") price. Interest rate caps and floors are designed as protection against the interest rate on a variable rate asset or liability rising above or falling below a certain level.

 • Futures/Forwards Contracts. Futures and forwards contracts give the buyer the right to buy or sell a specific type of asset at a specific time at a given price. For example, certain mortgage loan purchase commitments entered into by the Bank are considered derivatives. The Bank may hedge these commitments by selling TBA MBS for forward settlement. A TBA MBS represents a forward contract for the sale of MBS at a future agreed-upon date for an established price.

 TYPES OF HEDGED ITEMS

 The Bank may have the following types of hedged items:

 • Investment Securities. The Bank primarily invests in U.S. Treasury obligations, other U.S. obligations, GSE and TVA obligations, state or local housing agency obligations, and agency MBS, and classifies them as either trading, AFS, or HTM. The interest rate and prepayment risk associated with these investment securities is managed through a combination of debt issuance and derivatives. To manage interest rate risk, the Bank may fund investment securities with callable consolidated obligations or utilize interest rate swaps, caps, floors, or swaptions. Derivatives held by the Bank that are associated with trading and HTM securities, if applicable, are economic hedges and derivatives held by the Bank associated with AFS securities are generally fair value hedges.

 • Advances. The Bank offers a wide range of fixed and variable rate advance products with different maturities, interest rates, payment characteristics, and optionality. The Bank may use derivatives to adjust the repricing and/or option characteristics of advances in order to more closely match the characteristics of its funding liabilities. In general, whenever a borrower executes a fixed rate advance or a variable rate advance with embedded options, the Bank may simultaneously execute a derivative with terms that offset the terms and embedded options, if any, in the advance. For example, the Bank may hedge a fixed rate advance with an interest rate swap where the Bank pays a fixed rate coupon and receives a variable rate coupon, effectively converting the fixed rate advance to a variable rate advance. This type of hedge is typically treated as a fair value hedge. In addition, the Bank may hedge a callable advance, which gives the borrower the option to extinguish the fixed rate advance, by entering into a cancelable interest rate swap.

 • Mortgage Loans. The Bank invests in fixed rate mortgage loans. The prepayment options embedded in mortgage loans can result in extensions or contractions in the expected repayment of these investments, depending on changes in actual and estimated prepayment speeds. The Bank manages the interest rate risk associated with mortgage loans through a combination of debt issuance and derivatives. The Bank may issue both callable and non-callable debt to achieve cash flow patterns and liability durations similar to those expected on the mortgage loans. The Bank may also purchase interest rate caps, floors, or swaptions to minimize the interest rate risk embedded in mortgage assets. Although these derivatives are valid economic hedges, they are not specifically linked to individual mortgage assets and, therefore, do not receive fair value hedge accounting.

 • Consolidated Obligations. The Bank may enter into derivatives to hedge the interest rate risk associated with its consolidated obligations. For example, the Bank may issue and hedge a fixed rate consolidated obligation with an interest rate swap where the Bank receives a fixed rate coupon and pays a variable rate coupon, effectively converting the fixed rate consolidated obligation to a variable rate consolidated obligation. This type of hedge is typically treated as a fair value hedge. The Bank may also issue variable interest rate consolidated obligations and simultaneously execute interest rate swaps to manage the interest rate risk of the variable interest rate debt. Interest rate swaps used to hedge variable interest rate debt do not qualify for hedge accounting and are treated as economic hedges. This strategy of issuing consolidated obligations while simultaneously entering into derivatives enables the Bank to offer a wider range of attractively priced advances to its borrowers and may allow the Bank to reduce its funding costs.

 • Firm Commitments. Certain mortgage loan purchase commitments are considered derivatives. The Bank normally hedges these commitments by selling TBA MBS for forward settlement. A TBA MBS represents a forward contract for the sale of MBS at a future agreed-upon date for an established price. The mortgage loan purchase commitment and the TBA used in the firm commitment hedging strategy are considered economic hedges. When the mortgage loan purchase commitment derivative settles, the current market value of the commitment is included with the basis of the mortgage loan and amortized over the contractual life of the mortgage loan using the level-yield method. The Bank may also hedge a firm commitment for a forward-starting advance through the use of an interest-rate swap, which is considered a fair value hedge.

 For additional information on the Bank's derivatives, see " Note 1 — Summary of Significant Accounting Policies."

 FINANCIAL STATEMENT EFFECT AND ADDITIONAL FINANCIAL INFORMATION

 The notional amount of derivatives serves as a factor in determining periodic interest payments and cash flows received and paid. However, the notional amount of derivatives represents neither the actual amounts exchanged nor the overall exposure of the Bank to credit and market risk. The risks of derivatives can be measured meaningfully on a portfolio basis that takes into account the counterparties, the types of derivatives, the items being hedged, and any offsets between the derivatives and the items being hedged.

 The following table summarizes the Bank's notional amount and fair value of derivative instruments and total derivative assets and liabilities. Total derivative assets and liabilities include the effect of netting adjustments and cash collateral. For purposes of this disclosure, the derivative values include the fair value of derivatives and the related accrued interest (dollars in millions):

 Notional
 Derivative
 Derivative
 Notional
 Derivative
 Derivative

 Derivatives designated as hedging instruments (fair value hedges)

 Interest rate swaps
 $
 112,954
 $
 $
 $
 53,136
 $
 $

 Derivatives not designated as hedging instruments (economic hedges)

 Interest rate swaps
 53,050
 48,347

 Forward settlement agreements
 —
 —
 —

 Mortgage loan purchase commitments
 —
 —
 —

 Total derivatives not designated as hedging instruments
 53,277
 48,439

 Total derivatives before netting and collateral adjustments
 $
 166,231
 $
 101,575

 Netting adjustments and cash collateral1

 ( 94)
 ( 214)

 Total derivative assets and derivative liabilities
 $
 1,267
 $
 $
 $

 1 Amounts represent the application of the netting requirements that allow the Bank to net settle positive and negative positions and also cash collateral, including accrued interest, held or placed with the same clearing agent and/or counterparty. At December 31, 2023 and 2022, cash collateral, including accrued interest, posted by the Bank was $ 1.3 billion and $ 739 million. At December 31, 2023 and 2022, the Bank held cash collateral, including accrued interest, from clearing agents and/or counterparties of $ 197 million and $ 119 million.

 The following tables summarize the net gains (losses) on qualifying and discontinued fair value hedging relationships recorded in net interest income, including the net interest settlements on derivatives, as well as total income (expense) by hedged product recorded on the Statements of Income (dollars in millions):

 For the Year Ended December 31, 2023

 Interest Income (Expense)

 Total interest income (expense) recorded on the Statements of Income1

 $
 6,533
 $
 1,203
 $
 ( 5,392)

 Gains (losses) on fair value hedging relationships

 Interest rate contracts

 Derivatives2

 $
 $
 $
 ( 37)

 Hedged items3

 ( 243)

 Net gains (losses) on fair value hedging relationships
 $
 $
 $
 ( 280)

 For the Year Ended December 31, 2022

 Interest Income (Expense)

 Total interest income (expense) recorded on the Statements of Income1

 $
 1,750
 $
 $
 ( 1,128)

 Gains (losses) on fair value hedging relationships

 Interest rate contracts

 Derivatives2

 $
 1,232
 $
 $
 ( 350)

 Hedged items3

 ( 1,143)
 ( 745)

 Net gains (losses) on fair value hedging relationships
 $
 $
 $
 ( 46)

 For the Year Ended December 31, 2021

 Interest Income (Expense)

 Total interest income (expense) recorded on the Statements of Income1

 $
 $
 $
 ( 452)

 Gains (losses) on fair value hedging relationships

 Interest rate contracts

 Derivatives2

 $
 $
 $
 ( 23)

 Hedged items3

 ( 467)
 ( 267)

 Net gains (losses) on fair value hedging relationships
 $
 ( 221)
 $
 ( 140)
 $

 1 Amounts shown to give context to the disclosure and include total interest income (expense) of the products indicated, including coupon, prepayment fees, amortization, and derivative net interest settlements. Interest income (expense) amounts also include gains and losses on derivatives and hedged items in fair value hedging relationships.

 2 Includes changes in fair value and net interest settlements on derivatives.

 3 Includes changes in fair value and amortization/accretion of basis adjustments on closed hedge relationships.

 The following tables summarize cumulative fair value hedging adjustments and the related amortized cost of the hedged items (dollars in millions):

 Amortized cost of hedged asset/liability1

 $
 43,584
 $
 16,749
 $
 51,393

 Changes in fair value for active hedging relationships included in amortized cost
 $
 ( 645)
 $
 ( 395)
 $
 ( 17)

 Basis adjustments for discontinued hedging relationships included in amortized cost
 ( 52)
 ( 32)
 ( 8)

 Total amount of fair value hedging adjustments
 $
 ( 697)
 $
 ( 427)
 $
 ( 25)

 Amortized cost of hedged asset/liability1

 $
 21,832
 $
 8,606
 $
 22,205

 Changes in fair value for active hedging relationships included in amortized cost
 $
 ( 1,109)
 $
 ( 671)
 $
 ( 297)

 Basis adjustments for discontinued hedging relationships included in amortized cost
 ( 74)
 ( 1)
 ( 1)

 Total amount of fair value hedging adjustments
 $
 ( 1,183)
 $
 ( 672)
 $
 ( 298)

 1 Represents the portion of amortized cost designated as a hedged item in an active or discontinued fair value hedging relationship. Amortized cost includes fair value hedging adjustments.

 The following table summarizes the components of "Net gains (losses) on derivatives" as presented on the Statements of Income (dollars in millions):

 2023
 2022
 2021

 Derivatives not designated as hedging instruments (economic hedges)

 Interest rate swaps
 $
 $
 $

 Forward settlement agreements

 Mortgage loan purchase commitments
 ( 4)
 ( 15)
 ( 3)

 Net interest settlements
 ( 52)
 ( 58)
 ( 17)

 Total net gains (losses) related to derivatives not designated as hedging instruments
 ( 9)
 ( 53)

 Price alignment amount1

 ( 32)
 ( 11)
 —

 Net gains (losses) on derivatives
 $
 ( 41)
 $
 ( 64)
 $

 1 This amount represents interest on variation margin, which is a component of the derivative fair value for cleared transactions, and reflects the price alignment amount on variation margin for daily settled derivative contracts not designated as hedging instruments. The price alignment amount on variation margin for daily settled derivative contracts designated as hedging instruments is recorded in the same line item as the earnings effect of the hedged item.

 MANAGING CREDIT RISK ON DERIVATIVES

 The Bank is subject to credit risk due to the risk of nonperformance by counterparties to its derivative contracts. The Bank manages credit risk through credit analysis of derivative counterparties, collateral requirements, and adherence to the requirements set forth in the Bank's policies, CFTC regulations, and Finance Agency regulations.

 The Bank transacts most of its derivative transactions with large banks and major broker-dealers. Over-the-counter derivative transactions may be either executed directly with a counterparty, referred to as uncleared derivatives, or cleared through a clearing agent with a clearinghouse, referred to as cleared derivatives. Once a derivative transaction has been accepted for clearing by a clearinghouse, the derivative transaction is novated and the executing counterparty is replaced with the clearinghouse. The Bank is not a derivative dealer and does not trade derivatives for short-term profit.

 For uncleared derivatives, the degree of credit risk is impacted by the extent to which master netting arrangements are included in the derivative contracts to mitigate the risk. The Bank requires collateral agreements on its uncleared derivatives.

 Uncleared derivative transactions executed on or after September 1, 2022 are subject to two-way initial margin requirements as mandated by the Dodd-Frank Act, if the Bank's aggregate uncleared derivative transactions exposure to a counterparty exceeds a specified threshold. The initial margin is required to be held at a third-party custodian and does not change ownership. Rather, the party in respect of which the initial margin has been posted to the third-party custodian will have a security interest in the amount of initial margin required under the uncleared margin rules and can only take ownership upon the occurrence of certain events, including an event of default due to bankruptcy, insolvency, or similar proceeding. As of December 31, 2023, the Bank was not required to post initial margin on its uncleared derivative transactions in accordance with the noted regulation.

 For uncleared transactions, the derivative agreements are generally fully collateralized with a zero unsecured threshold in accordance with variation margin requirements issued by the U.S. federal bank regulatory agencies and the CFTC.

 For cleared derivatives, the clearinghouse is the Bank's counterparty. The Bank utilizes two clearinghouses, CME Clearing and LCH Ltd., for all cleared derivative transactions. CME Clearing and LCH Ltd. notify the clearing agent of the required initial margin and daily variation margin requirements, and the clearing agent in turn notifies the Bank.

 Each clearinghouse determines initial margin requirements which are considered cash collateral. Generally, credit ratings are not factored into the initial margin. However, clearing agents may require additional initial margin to be posted based on credit considerations, including, but not limited to, credit rating downgrades. The Bank was not required to post additional initial margin by its clearing agent, based on credit considerations, at December 31, 2023. Variation margin requirements with each clearinghouse are based on changes in the fair value of cleared derivatives and are legally characterized as daily settlement payments, rather than cash collateral.

 The requirement that the Bank post initial and variation margin through the clearing agent, to the clearinghouse, exposes the Bank to institutional credit risk if the clearing agent or the clearinghouse fails to meet its obligations. The use of cleared derivatives is intended to mitigate credit risk exposure because a central counterparty is substituted for individual counterparties and collateral/payments for changes in the fair value of cleared derivatives is posted daily through a clearing agent.

 OFFSETTING OF DERIVATIVE ASSETS AND DERIVATIVE LIABILITIES

 The Bank presents derivative instruments, related cash collateral received or pledged, and associated accrued interest on a net basis by clearing agent and/or by counterparty when it has met the netting requirements. Additional information regarding these agreements is provided in " Note 1 — Summary of Significant Accounting Policies."

 The Bank has analyzed the enforceability of offsetting rights incorporated in its cleared derivative transactions and has determined that the exercise of those offsetting rights by a non-defaulting party under these transactions should be upheld under applicable law upon an event of default, including a bankruptcy, insolvency, or similar proceeding involving the clearinghouse or the clearing agent, or both. Based on this analysis, the Bank presents a net derivative receivable or payable for all of its transactions through a particular clearing agent with a particular clearinghouse.

 The following tables present the fair value of derivative instruments meeting or not meeting the netting requirements and the related collateral received from or pledged to counterparties (dollars in millions):

 Derivative Instruments Meeting Netting Requirements

 Gross Amount Recognized1

 Gross Amounts of Netting Adjustments and Cash Collateral
 Derivative Instruments Not Meeting Netting Requirements2

 Total Derivative Assets and Total Derivative Liabilities

 Derivative Assets

 $
 $
 ( 245)
 $
 $

 Cleared derivatives
 1,220
 —
 1,263

 Total
 $
 $
 $
 $
 1,267

 Derivative Liabilities

 $
 $
 ( 88)
 $
 —
 $

 Cleared derivatives
 ( 6)
 —
 —

 Total
 $
 $
 ( 94)
 $
 —
 $

 Derivative Instruments Meeting Netting Requirements

 Gross Amount Recognized1

 Gross Amounts of Netting Adjustments and Cash Collateral
 Derivative Instruments Not Meeting Netting Requirements2

 Total Derivative Assets and Total Derivative Liabilities

 Derivative Assets

 $
 $
 ( 194)
 $
 —
 $

 Cleared derivatives
 —

 Total
 $
 $
 $
 —
 $

 Derivative Liabilities

 $
 $
 ( 196)
 $
 —
 $

 Cleared derivatives
 ( 18)
 —
 —

 Total
 $
 $
 ( 214)
 $
 —
 $

 1 Represents derivative assets and derivative liabilities prior to netting adjustments and cash collateral, including accrued interest.

 2 Represents mortgage loan purchase commitments not subject to enforceable netting requirements.

 Note 8 — Deposits
 The Bank offers demand and overnight deposits as well as short-term interest-bearing deposits to members and to qualifying non-members. Deposits classified as demand and overnight pay interest based on a daily interest rate. Short-term interest-bearing deposits pay interest based on a fixed rate determined at the issuance of the deposit.
 The following table details the Bank's interest-bearing and non-interest-bearing deposits (dollars in millions):

 2023
 2022

 Interest-bearing

 Demand and overnight
 $
 $

 Term

 Non-interest-bearing

 Demand

 Total
 $
 1,039
 $
 1,076

 Note 9 — Consolidated Obligations

 Consolidated obligations consist of bonds and discount notes. The FHLBanks issue consolidated obligations through the Office of Finance as their agent. Bonds are issued primarily to raise intermediate- and long-term funds for the Bank and are not subject to any statutory or regulatory limits on their maturity. Discount notes are issued primarily to raise short-term funds for the Bank and have original maturities of up to one year. Discount notes sell at or below their face amount and are redeemed at par value when they mature.

 Although the Bank is primarily liable for the portion of consolidated obligations issued on its behalf, it is also jointly and severally liable with the other FHLBanks for the payment of principal and interest on all FHLBank System consolidated obligations. The Finance Agency, at its discretion, may require any FHLBank to make principal and/or interest payments due on any consolidated obligation, whether or not the primary obligor FHLBank has defaulted on the payment of that consolidated obligation. The Finance Agency has never exercised this discretionary authority. At December 31, 2023 and 2022, the total par value of outstanding consolidated obligations of the FHLBanks was $ 1,204.3 billion and $ 1,181.7 billion.

 DISCOUNT NOTES

 The following table summarizes the Bank's discount notes (dollars in millions):

Rate
Rate

 Par value
 $
 55,288
 5.15
 %
 $
 70,002
 3.79
 %

 Discounts and concessions1

 ( 736)
 ( 725)

 Fair value option adjustments
 ( 15)
 ( 107)

 Total
 $
 54,537
 $
 69,170

 1 Concessions represent fees paid to dealers in connection with the issuance of certain consolidated obligation discount notes.

 BONDS

 The following table summarizes the Bank's bonds outstanding by contractual maturity (dollars in millions):

 Year of Contractual Maturity
Rate
Rate

 $
 63,887
 5.10
 %
 $
 55,421
 4.01
 %

 Due after one year through two years
 39,323
 5.38
 20,665
 3.79

 4,159
 4.00
 1,175
 2.23

 1,416
 3.28
 1,210
 1.97

 Due after four years through five years
 2,507
 4.19
 2.42

 5,671
 3.14
 5,236
 2.61

 5.02
 %
 3.80
 %

 Discounts and concessions1

 ( 29)
 ( 23)

 ( 25)
 ( 298)

 Total
 $
 116,961
 $
 84,337

 1 Concessions represent fees paid to dealers in connection with the issuance of certain consolidated obligation bonds.
 Bonds are issued with fixed or variable rate payment terms, such as SOFR. To meet the specific needs of certain investors, both fixed and variable rate bonds may also contain certain embedded features, which result in complex coupon payment terms and call features. When these consolidated bonds are issued, the Bank may enter into derivatives containing features that offset the terms and embedded options, if any, of the consolidated bond obligations.

 The following table summarizes the Bank's bonds outstanding by call features (dollars in millions):

 2023
 2022

 Non-callable or non-putable
 $
 77,731
 $
 73,578

 Callable
 39,232
 10,994

 $
 $

 The following table summarizes the Bank's bonds outstanding by year of contractual maturity or next call date (dollars in millions):

 Year of Contractual Maturity or Next Call Date
 2023
 2022

 $
 76,142
 $
 62,033

 Due after one year through two years
 33,413
 19,141

 3,479

 Due after four years through five years
 1,819

 1,230
 1,471

 $
 $

 Note 10 — Affordable Housing Program

 The FHLBank Act requires each FHLBank to establish and fund an AHP, which provides subsidies in the form of direct grants or below-market interest rates on advances to members who provide the funds to assist in the purchase, construction, or rehabilitation of housing for very low-, low-, or moderate-income households. Each FHLBank recognizes AHP assessment expense equal to the greater of 10 percent of its annual income subject to assessment, or its prorated sum required to ensure the aggregate contribution by the FHLBanks is no less than $ 100 million for each year. For purposes of the statutory AHP assessment, income subject to assessment is defined as net income before AHP assessments, plus interest expense related to MRCS. The exclusion of interest expense related to MRCS is a regulatory interpretation of the Finance Agency. The Bank accrues the AHP assessment monthly based on its income subject to assessment and reduces the AHP liability as program funds are distributed.

 If the Bank experienced a net loss for a full year, it would have no obligation to the AHP for the year, because its required annual AHP contribution is limited to its annual income subject to AHP assessment. If the aggregate 10 percent AHP calculation previously discussed was less than $ 100 million for the FHLBanks (i.e., a shortfall), each FHLBank would be required to contribute a prorated sum to ensure that the aggregate contribution by the FHLBanks equals $ 100 million. The pro-ration would be made on the basis of an FHLBank's income in relation to the income of all FHLBanks for the year, subject to the annual income limitation previously discussed. In addition to the required AHP assessment, the Bank's Board of Directors may elect to make voluntary contributions to the AHP.

 There was no contribution shortfall, as described above, in 2023, 2022, or 2021. If an FHLBank finds that its required contributions are contributing to its financial instability, it may apply to the Finance Agency for a temporary suspension of its contributions under the FHLBank Act. The Bank did not make any such application in 2023, 2022, or 2021.

 The following table presents a rollforward of the Bank's AHP liability (dollars in millions):

 2023
 2022
 2021

 Balance, beginning of year
 $
 $
 $

 Assessments

 Voluntary contributions

 —
 —

 Disbursements
 ( 49)
 ( 44)
 ( 54)

 Balance, end of year
 $
 $
 $

.

 Note 11 — Capital

 CAPITAL STOCK

 The Bank's capital stock has a par value of $ 100 per share, and all shares are issued, redeemed, and repurchased only at the stated par value. The Bank issues a single class of capital stock (Class B capital stock) and has two subclasses of Class B capital stock: membership and activity-based. Effective December 15, 2023, each member must purchase and hold membership capital stock in an amount equal to 0.06 percent of its total assets as of the preceding December 31st, subject to a cap of $ 10 million and a floor of $ 10,000. In addition, each member is required to purchase activity-based capital stock equal to 4.50 percent of its outstanding advances, 4.00 percent of its outstanding mortgage loans, and 0.10 percent of its outstanding standby letters of credit. Prior to December 15, 2023, members were required to purchase and hold membership capital stock in an amount equal to 0.12 percent of their total assets as of the preceding December 31st, subject to a cap of $ 10 million and a floor of $ 10,000. They were also required to purchase activity-based capital stock equal to 4.00 percent of their outstanding advances and mortgage loans and 0.10 percent of their outstanding standby letters of credit. All capital stock issued is subject to a notice of redemption period of five years.

 The capital stock requirements established in the Bank's Capital Plan are designed so that the Bank can remain adequately capitalized as member activity changes. The Bank's Board of Directors may make adjustments to the capital stock requirements within ranges established in the Capital Plan.

 EXCESS STOCK

 Capital stock owned by members in excess of their investment requirement is deemed excess capital stock. Under its Capital Plan, the Bank, at its discretion and upon 15 days written notice, may repurchase excess membership capital stock. The Bank, at its discretion, may also repurchase excess activity-based capital stock to the extent that (i) the excess capital stock balance exceeds an operational threshold set forth in the Capital Plan, which is currently set at zero, or (ii) a member submits a notice to redeem all or a portion of the excess activity-based capital stock. At December 31, 2023 and 2022, the Bank had no excess capital stock outstanding.

 MANDATORILY REDEEMABLE CAPITAL STOCK

 The Bank reclassifies capital stock subject to redemption from equity to a liability, which represents MRCS, at the time shares meet the definition of a mandatorily redeemable financial instrument. This occurs after a member provides written notice of intention to withdraw from membership, becomes ineligible for continuing membership, or attains non-member status by merger or consolidation, charter termination, or other involuntary termination from membership. Dividends on MRCS are classified as interest expense on the Statements of Income. The Bank recorded interest expense on MRCS of $ 1 million, $ 1 million, and $ 2 million for the years ended December 31, 2023, 2022, and 2021.

 As a result of the final rule on membership issued by the Finance Agency effective February 19, 2016, the eligibility requirements for FHLBank members were changed, rendering captive insurance companies ineligible for FHLBank membership. On the effective date of the final rule, the Bank reclassified the total outstanding capital stock held by all of the captive insurance companies that were Bank members to MRCS. On February 19, 2021, all remaining captive insurance company members that were admitted as members prior to September 12, 2014 had their membership terminated. The Bank immediately redeemed all membership stock from these captive insurance companies; however, the remaining activity-based stock is subject to the five year redemption period.

 The following table summarizes changes in MRCS (dollars in millions):

 2023
 2022
 2021

 Balance, beginning of period
 $
 $
 $

 Capital stock reclassified to (from) MRCS, net

 Net payments for repurchases/redemptions of MRCS
 ( 7)
 ( 19)
 ( 104)

 Balance, end of period
 $
 $
 $

 The following table summarizes the Bank's MRCS by year of contractual redemption (dollars in millions):

 Year of Contractual Redemption1

 2023
 2022

 $
 $
 —

 —

 Past contractual redemption date due to outstanding activity with the Bank

 Total
 $
 $

 1 At the Bank's election, MRCS may be redeemed prior to the expiration of the five year redemption period that commences on the date of the notice of redemption.

 RESTRICTED RETAINED EARNINGS

 The Bank entered into a JCE Agreement with all of the other FHLBanks in 2011. The JCE Agreement, as amended, is intended to enhance the capital position of the FHLBanks over time. Under the JCE Agreement, each FHLBank is required to allocate 20 percent of its quarterly net income to a separate restricted retained earnings account until the balance of that account, calculated as of the last day of each calendar, equals at least one percent of its average balance of outstanding consolidated obligations for the calendar quarter. The restricted retained earnings are not available to pay dividends. At December 31, 2023 and 2022, the Bank's restricted retained earnings account totaled $ 896 million and $ 703 million.

 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 The following table summarizes changes in AOCI (dollars in millions):

 Net unrealized gains (losses) on AFS securities (Note 4)
 Pension and postretirement benefits
 Total AOCI

 Balance, December 31, 2020

 $
 $
 ( 4)
 $

 Other comprehensive income (loss) before reclassifications

 Net unrealized gains (losses) on AFS securities
 —

 Net current period other comprehensive income (loss)
 —

 Balance, December 31, 2021

 ( 4)

 Other comprehensive income (loss) before reclassifications

 Net unrealized gains (losses) on AFS securities
 —

 Net actuarial gains (losses)

 —

 Net current period other comprehensive income (loss)
 ( 201)

 Balance, December 31, 2022

 ( 114)
 ( 3)

 Other comprehensive income (loss) before reclassifications

 Net unrealized gains (losses) on AFS securities
 ( 64)
 —
 ( 64)

 Net actuarial gains (losses)
 —

 Net current period other comprehensive income (loss)
 ( 64)
 ( 63)

 Balance, December 31, 2023

 $
 ( 178)
 $
 ( 2)
 $
 ( 180)

 REGULATORY CAPITAL REQUIREMENTS

 The Bank is subject to three regulatory capital requirements:

 • Risk-based capital. The Bank must maintain at all times permanent capital greater than or equal to the sum of its credit, market, and operational risk capital requirements, all calculated in accordance with Finance Agency regulations. Only permanent capital, defined as the amounts paid-in for Class B capital stock (including MRCS), and retained earnings can satisfy this risk-based capital requirement.

 • Regulatory capital. The Bank is required to maintain a minimum four percent capital-to-asset ratio, which is defined as total regulatory capital divided by total assets. Total regulatory capital includes Class B stock (including MRCS) and retained earnings.

 • Leverage capital. The Bank is required to maintain a minimum five percent leverage ratio, which is defined as the sum of permanent capital weighted 1.5 times and nonpermanent capital weighted 1.0 times, divided by total assets. The Bank did not hold any nonpermanent capital at December 31, 2023 and 2022.

 In addition to the requirements previously discussed, the Capital Stock AB requires each FHLBank to maintain at all times a ratio of at least two percent of capital stock to total assets. For purposes of the Capital Stock AB, capital stock includes MRCS. The capital stock to total assets ratio is measured on a daily average basis at month end.

 If the Bank's capital falls below the required levels, the Finance Agency has authority to take actions necessary to return it to levels that it deems to be consistent with safe and sound business operations.

 The following table shows the Bank's compliance with the Finance Agency's regulatory capital requirements (dollars in millions):

 Required
 Actual
 Required
 Actual

 Regulatory capital requirements

 Risk-based capital
 $
 1,641
 $
 10,023
 $
 $
 8,883

 Regulatory capital
 $
 7,376
 $
 10,023
 $
 6,567
 $
 8,883

 Leverage capital
 $
 9,220
 $
 15,034
 $
 8,208
 $
 13,323

 Capital-to-assets ratio
 4.00
 %
 5.44
 %
 4.00
 %
 5.41
 %

 Capital stock-to-assets ratio
 2.00
 %
 3.59
 %
 2.00
 %
 3.73
 %

 Leverage ratio
 5.00
 %
 8.15
 %
 5.00
 %
 8.12
 %

 CAPITAL CLASSIFICATION DETERMINATION

 The Finance Agency determines each FHLBank's capital classification on at least a quarterly basis. If an FHLBank is determined to be other than adequately capitalized, that FHLBank becomes subject to additional supervisory authority by the Finance Agency. Before implementing a reclassification, the Director of the Finance Agency is required to provide the FHLBank with written notice of the proposed action and an opportunity to submit a response. As of the most recent notification date by the Finance Agency, the Bank was classified as adequately capitalized.

 Note 12 — Pension and Postretirement Benefit Plans
 QUALIFIED DEFINED BENEFIT MULTIEMPLOYER PLAN
 The Bank previously participated in the DB Plan, a tax-qualified defined benefit pension plan. In August of 2016, the Bank's Board of Directors elected to freeze the DB Plan effective January 1, 2017. After the freeze, participants no longer accrued new benefits under the DB Plan. On May 2, 2023, the Bank completed a purchase agreement with Principal Life Insurance Company and transferred to them the future benefit obligations and annuity administration for participants under the DB Plan. As such, the Bank is no longer a party to the DB Plan. Refer to the 2022 Form 10-K for prior year details on the DB Plan.

 OTHER POSTRETIREMENT BENEFIT PLANS
 In addition to the DB Plan, the Bank has one qualified defined contribution benefit plan, the DC Plan. The Bank also offers the BEP, a nonqualified retirement plan which includes both a nonqualified defined contribution plan and a nonqualified defined benefit plan. In August of 2016, the Bank's Board of Directors elected to freeze the BEP defined benefit plan effective January 1, 2017. After the freeze, participants no longer accrue new benefits under the BEP defined benefit plan.

 Note 13 — Fair Value

 Fair value amounts are determined by the Bank using available market information and reflect the Bank's best judgment of appropriate valuation methods. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., exit price). The fair value hierarchy requires an entity to maximize the use of significant observable inputs and minimize the use of significant unobservable inputs when measuring fair value. The inputs are evaluated and an overall level for the fair value measurement is determined. This overall level is an indication of market observability of the fair value measurement for the asset or liability.

 The fair value hierarchy prioritizes the inputs used to measure fair value into three broad levels:

 • Level 1 Inputs. Quoted prices (unadjusted) for identical assets or liabilities in an active market that the Bank can access on the measurement date. An active market for an asset or liability is a market in which the transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

 • Level 2 Inputs. Inputs other than quoted prices within Level 1 that are observable inputs for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 2 inputs include the following: (i) quoted prices for similar assets or liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in markets that are not active, (iii) inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves that are observable at commonly quoted intervals and implied volatilities), and (iv) market-corroborated inputs.

 • Level 3 Inputs. Unobservable inputs for the asset or liability. Valuations are derived from techniques that use significant assumptions not observable in the market, which may include pricing models, discounted cash flow models, or similar techniques.

 The Bank reviews its fair value hierarchy classifications on a quarterly basis. Changes in the observability of the valuation inputs may result in a reclassification of certain assets or liabilities. The Bank had no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy during the years ended December 31, 2023, 2022, or 2021.

 The following table summarizes the carrying value, fair value, and fair value hierarchy of the Bank's financial instruments (dollars in millions). The Bank records trading securities, AFS securities, derivative assets, derivative liabilities, financial instruments held under the fair value option, and certain other assets at fair value on a recurring basis, and on occasion certain impaired mortgage loans held for portfolio on a non-recurring basis. The Bank records all other financial assets and liabilities at amortized cost. The fair values do not represent an estimate of the overall market value of the Bank as a going concern, which would take into account future business opportunities and the net profitability of assets and liabilities.

 Financial Instruments
 Carrying Value
 Level 1
 Level 2
 Level 3
 Netting Adjustment and Cash Collateral1

 Total

 Cash and due from banks
 $
 $
 $
 —
 $
 —
 $
 —
 $

 3,481
 —
 3,481
 —
 —
 3,481

 —
 —
 —

 7,120
 —
 7,120
 —
 —
 7,120

 3,152
 —
 3,152
 —
 —
 3,152

 —
 —
 —

 Held-to-maturity securities
 —
 —

 —
 122,512
 —
 —
 122,512

 Mortgage loans held for portfolio, net
 9,967
 —
 9,051
 —
 9,081

 Accrued interest receivable
 —
 —
 —

 Derivative assets, net
 1,267
 —
 —
 1,267

 —
 —
 —

 ( 1,039)
 —
 ( 1,039)
 —
 —
 ( 1,039)

 ( 54,537)
 —
 ( 54,534)
 —
 —
 ( 54,534)

 Bonds
 ( 116,961)
 —
 ( 116,121)
 —
 —
 ( 116,121)

 Total consolidated obligations
 ( 171,498)
 —
 ( 170,655)
 —
 —
 ( 170,655)

 MRCS
 ( 12)
 ( 12)
 —
 —
 —
 ( 12)

 Accrued interest payable
 ( 1,023)
 —
 ( 1,023)
 —
 —
 ( 1,023)

 Derivative liabilities, net
 ( 7)
 —
 ( 101)
 —
 ( 7)

 1 Amounts represent the application of the netting requirements that allow the Bank to net settle positive and negative positions and also cash collateral and the related accrued interest held or placed with the same clearing agent and/or counterparty.

 The following table summarizes the carrying value, fair value, and fair value hierarchy of the Bank's financial instruments (dollars in millions):

 Financial Instruments
 Carrying Value
 Level 1
 Level 2
 Level 3
 Netting Adjustments and Cash Collateral1

 Total

 Cash and due from banks
 $
 $
 $
 —
 $
 —
 $
 —
 $

 2,031
 —
 2,031
 —
 —
 2,031

 —
 —
 —

 9,415
 —
 9,415
 —
 —
 9,415

 2,817
 —
 2,817
 —
 —
 2,817

 —
 —
 —

 Held-to-maturity securities
 —
 —

 —
 110,909
 —
 —
 110,909

 Mortgage loans held for portfolio, net
 8,348
 —
 7,316
 —
 7,352

 Accrued interest receivable
 —
 —
 —

 Derivative assets, net
 —
 —

 —
 —
 —

 ( 1,076)
 —
 ( 1,076)
 —
 —
 ( 1,076)

 ( 69,170)
 —
 ( 69,162)
 —
 —
 ( 69,162)

 Bonds
 ( 84,337)
 —
 ( 83,238)
 —
 —
 ( 83,238)

 Total consolidated obligations
 ( 153,507)
 —
 ( 152,400)
 —
 —
 ( 152,400)

 MRCS
 ( 15)
 ( 15)
 —
 —
 —
 ( 15)

 Accrued interest payable
 ( 436)
 —
 ( 436)
 —
 —
 ( 436)

 Derivative liabilities, net
 ( 4)
 —
 ( 218)
 —
 ( 4)

 1 Amounts represent the application of the netting requirements that allow the Bank to net settle positive and negative positions and also cash collateral and the related accrued interest held or placed with the same clearing agent and/or counterparty.

 SUMMARY OF VALUATION TECHNIQUES AND PRIMARY INPUTS
 The valuation techniques and primary inputs used to develop the measurement of fair value for assets and liabilities that are measured at fair value on a recurring or non-recurring basis on the Statements of Condition are outlined below.

 Trading and AFS Investment Securities. The Bank's valuation technique incorporates prices from multiple designated third-party pricing vendors, when available. The pricing vendors generally use various proprietary models to price investment securities. The inputs to those models are derived from various sources including, but not limited to, benchmark securities and yields, reported trades, dealer estimates, issuer spreads, bids, offers, and other market-related data. Since many investment securities do not trade on a daily basis, the pricing vendors use available information, as applicable, such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing to determine the prices for individual securities. Each pricing vendor has an established process in place to challenge investment valuations, which facilitates resolution of questionable prices identified by the Bank. Periodically, the Bank conducts reviews of its pricing vendors to confirm and further augment its understanding of the vendors' pricing processes, methodologies, and control procedures for investment securities.

 The Bank's valuation technique for estimating the fair values of its investment securities first requires the establishment of a median price for each security. All prices that are within a specified tolerance threshold of the median price are included in the cluster of prices that are averaged to compute a default price. All prices that are outside the threshold (outliers) are subject to further analysis (including, but not limited to, comparison to prices provided by an additional third-party valuation service, prices for similar securities, and/or non-binding dealer estimates) to determine if an outlier is a better estimate of fair value. If an outlier (or some other price identified in the analysis) is determined to be a better estimate of fair value, then the outlier (or the other price as appropriate) is used as the final price rather than the default price. Alternatively, if the analysis confirms that an outlier (or outliers) is (are) in fact not representative of fair value and the default price is the best estimate, then the default price is used as the final price. In all cases, the final price is used to determine the fair value of the security. In limited instances, when no prices are available from the designated pricing services, the Bank obtains prices from dealers or uses the purchase price if the investment security is unsettled.

 As of December 31, 2023 and 2022, multiple prices were received for the majority of the Bank's trading and AFS investment securities. Based on the Bank's review of the pricing methods and controls employed by the third-party pricing vendors and the relative lack of dispersion among the vendor prices, the Bank believes its final prices are representative of the prices that would have been received if the assets had been sold at the measurement date (i.e., exit prices) and further, that the fair value measurements are classified appropriately in the fair value hierarchy.

 Impaired Mortgage Loans Held for Portfolio. The fair value of impaired mortgage loans held for portfolio is estimated by obtaining property values from an external pricing vendor. This vendor utilizes multiple pricing models that generally factor in market observable inputs, including actual sales transactions and home price indices. The Bank applies an adjustment to these values to capture certain limitations in the estimation process and takes into consideration estimated selling costs and expected PMI proceeds.

 Derivative Assets and Liabilities and the Related Hedged Items. The fair value of derivatives is generally estimated using standard valuation techniques such as a discounted cash flow analysis and comparisons to similar instruments, and includes variation margin payments for daily settled contracts. In limited instances, fair value estimates for interest-rate related derivatives may be obtained using an external pricing model that utilizes observable market data. The Bank is subject to credit risk in derivatives transactions due to the potential nonperformance of its derivatives counterparties. The use of cleared derivatives is intended to mitigate credit risk exposure because a central counterparty is substituted for individual counterparties and collateral/payments is posted daily, through a clearing agent, for changes in the fair value of cleared derivatives. To mitigate credit risk on uncleared derivatives, the Bank enters into master netting agreements with its counterparties as well as collateral agreements that have collateral delivery thresholds. The Bank has evaluated the potential for the fair value of its derivatives to be affected by counterparty credit risk and its own credit risk and has determined that no adjustments were significant to the overall fair value measurements.

 The fair values of the Bank's derivative assets and derivative liabilities include accrued interest receivable/payable and related cash collateral. The estimated fair values of the accrued interest receivable/payable and cash collateral approximate their carrying values due to their short-term nature. The fair values of derivatives are netted by clearing agent and/or counterparty if the netting requirements are met. If these netted amounts result in a receivable to the Bank, they are classified as an asset and, if classified as a payable to the clearing agent or counterparty, they are classified as a liability.

 The Bank's discounted cash flow model utilizes market-observable inputs (inputs that are actively quoted and can be validated to external sources). The Bank uses the following inputs for measuring the fair value of interest-related derivatives:

 • Discount rate assumption. The Bank utilizes the federal funds OIS or SOFR OIS curve depending on the terms of the derivative agreement.

 • Forward interest rate assumption. The Bank utilizes the swap curve of the instrument's index rate.

 • Volatility assumption. Market-based expectations of future interest rate volatility implied from current market prices for similar options.

 For forward settlement agreements, the Bank utilizes TBA security prices that are determined by coupon class and expected term until settlement. For mortgage loan purchase commitments, the Bank utilizes TBA security prices adjusted for factors such as credit risk and servicing spreads.

 For the related hedged items, the fair value is estimated using a discounted cash flow analysis which typically considers the following inputs:

 • Discount rate assumption. The Bank utilizes the designated benchmark interest rate curve.

 • Volatility assumption. Market-based expectations of future interest rate volatility implied from current market prices for similar options.

 Other Assets. These represent grantor trust assets, which are carried at estimated fair value based on quoted market prices as of the last business day of the reporting period.

 Consolidated Obligation Discount Notes Recorded under the Fair Value Option. The fair value of consolidated obligation discount notes recorded under the fair value option is determined by calculating the present value of the expected future cash flows. The discount rates used in the present value calculations are for consolidated obligations with similar terms. The Bank uses the consolidated obligation curve for measuring the fair value of these consolidated obligations, which is a market-observable curve constructed by the Office of Finance. This curve is constructed using the U.S. Treasury curve as a base curve which is then adjusted by adding indicative spreads obtained largely from market-observable sources.

 Subjectivity of Estimates. Estimates of the fair value of financial assets and liabilities using the methods previously described are highly subjective and require judgments regarding significant matters, such as the amount and timing of future cash flows, prepayment speed assumptions, expected interest rate volatility, possible distributions of future interest rates used to value options, and the selection of discount rates that appropriately reflect market and credit risks. The use of different assumptions could have a material effect on the fair value estimates.

 FAIR VALUE ON A RECURRING BASIS

 The following table summarizes, for each hierarchy level, the Bank's assets and liabilities that are measured at fair value on the Statements of Condition (dollars in millions):

 Recurring Fair Value Measurements
 Level 1
 Level 2
 Level 3
 Netting Adjustments and Cash Collateral1

 Total

 U.S. Treasury obligations
 $
 —
 $
 2,925
 $
 —
 $
 —
 $
 2,925

 Other U.S. obligations
 —
 —
 —

 —
 —
 —

 Other non-MBS

 —
 —
 —

 Total trading securities
 —
 3,152
 —
 —
 3,152

 Other U.S. obligations
 —
 —
 —

 —
 —
 —

 —
 —
 —

 Other non-MBS
 —
 —
 —

 U.S. obligations single-family MBS
 —
 4,398
 —
 —
 4,398

 GSE single-family MBS
 —
 —
 —

 GSE multifamily MBS
 —
 —
 —

 Total available-for-sale securities
 —
 —
 —

 Derivative assets, net

 Interest-rate related
 —
 —
 1,266

 Mortgage loan purchase commitments
 —
 —
 —

 Total derivative assets, net
 —
 —
 1,267

 —
 —
 —

 Total recurring assets at fair value
 $
 $
 27,267
 $
 —
 $
 $
 28,281

 Discount notes2

 $
 —
 $
 ( 47,442)
 $
 —
 $
 —
 $
 ( 47,442)

 Derivative liabilities, net

 Interest-rate related
 —
 ( 100)
 —
 ( 6)

 Forward settlement agreements (TBAs)
 —
 ( 1)
 —
 —
 ( 1)

 Total derivative liabilities, net
 —
 ( 101)
 —
 ( 7)

 Total recurring liabilities at fair value
 $
 —
 $
 ( 47,543)
 $
 —
 $
 $
 ( 47,449)

 1 Amounts represent the application of the netting requirements that allow the Bank to net settle positive and negative positions and also cash collateral and the related accrued interest held or placed with the same clearing agent and/or counterparty.

 2 Represents financial instruments recorded under the fair value option.

 The following table summarizes, for each hierarchy level, the Bank's assets and liabilities that are measured at fair value on the Statements of Condition (dollars in millions):

 Recurring Fair Value Measurements
 Level 1
 Level 2
 Level 3
 Netting Adjustments and Cash Collateral1

 Total

 U.S Treasury obligations
 $
 —
 $
 2,501
 $
 —
 $
 —
 $
 2,501

 Other U.S. obligations
 —
 —
 —

 —
 —
 —

 Other non-MBS

 —
 —
 —

 GSE multifamily MBS
 —
 —
 —

 Total trading securities
 —
 2,817
 —
 —
 2,817

 Other U.S. obligations
 —
 —
 —

 —
 —
 —

 —
 —
 —

 Other non-MBS
 —
 —
 —

 U.S. obligations single-family MBS
 —
 3,676
 —
 —
 3,676

 GSE single-family MBS
 —
 —
 —

 GSE multifamily MBS
 —
 9,460
 —
 —
 9,460

 Total available-for-sale securities
 —
 15,263
 —
 —
 15,263

 Derivative assets, net

 Interest-rate related
 —
 —

 —
 —
 —

 Total recurring assets at fair value
 $
 $
 18,317
 $
 —
 $
 $
 18,758

 Discount notes2

 $
 —
 $
 ( 44,531)
 $
 —
 $
 —
 $
 ( 44,531)

 Derivative liabilities, net

 Interest-rate related
 —
 ( 218)
 —
 ( 4)

 Total recurring liabilities at fair value
 $
 —
 $
 ( 44,749)
 $
 —
 $
 $
 ( 44,535)

 1 Amounts represent the application of the netting requirements that allow the Bank to net settle positive and negative positions and also cash collateral and the related accrued interest held or placed with the same clearing agent and/or counterparty.

 2 Represents financial instruments recorded under the fair value option.

 FAIR VALUE ON A NON-RECURRING BASIS

 The Bank measures certain impaired mortgage loans held for portfolio at Level 3 fair value on a non-recurring basis. These assets are subject to fair value adjustments in certain circumstances. At both December 31, 2023 and 2022, impaired mortgage loans held for portfolio recorded at fair value as a result of a non-recurring change in fair value were $ 1 million. These fair values were as of the date the fair value adjustment was recorded during the years ended December 31, 2023 and 2022.

 FAIR VALUE OPTION

 The fair value option provides an irrevocable option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments, and written loan commitments not previously carried at fair value. It requires entities to display the fair value of those assets and liabilities for which it has chosen to use fair value on the face of the Statements of Condition. Fair value is used for both the initial and subsequent measurement of the designated assets, liabilities, and commitments, with the changes in fair value recognized in net income.

 The Bank elects the fair value option for certain financial instruments when a hedge relationship does not qualify for hedge accounting. These fair value elections are made primarily in an effort to mitigate the potential income statement volatility that can arise when an economic derivative is adjusted for changes in fair value but the related hedged item is not.

 For financial instruments recorded under the fair value option, the related contractual interest income, interest expense, and the discount amortization on fair value option discount notes are recorded as part of net interest income on the Statements of Income. The remaining changes are recorded as "Net gains (losses) on financial instruments held under fair value option" on the Statements of Income.

 For the year ended December 31, 2023, net losses on financial instruments held under fair value option (i.e., discount notes) were $ 92 million compared to net gains of $ 106 million and $ 1 million in 2022 and 2021. The Bank determined no credit risk adjustments for nonperformance were necessary. In determining that no credit risk adjustments were necessary, the Bank considered the following factors:

 • The Bank is a federally chartered GSE, and as a result of this status, the Bank's consolidated obligations have historically received the same credit rating as the government bond credit rating of the United States, even though they are not obligations of the United States and are not guaranteed by the United States.

 • The Bank is jointly and severally liable with the other FHLBanks for the payment of principal and interest on all consolidated obligations of the FHLBanks.

 The following table summarizes the difference between the unpaid principal balance and fair value of outstanding instruments for which the fair value option has been elected (dollars in millions):

 Unpaid Principal Balance
 Fair Value Over (Under) Unpaid Principal

 $
 48,164
 $
 47,442
 $
 ( 722)

 Unpaid Principal Balance
 Fair Value Over (Under) Unpaid Principal

 $
 45,244
 $
 44,531
 $
 ( 713)

 Note 14 — Commitments and Contingencies

 Joint and Several Liability. The FHLBanks have joint and several liability for all consolidated obligations issued. Accordingly, if an FHLBank were unable to repay any consolidated obligation for which it is the primary obligor, each of the other FHLBanks could be called upon by the Finance Agency to repay all or part of such obligations. No FHLBank has ever been asked or required to repay the principal or interest on any consolidated obligation on behalf of another FHLBank. At December 31, 2023 and 2022, the total par value of outstanding consolidated obligations issued on behalf of other FHLBanks for which the Bank is jointly and severally liable was $ 1,032.1 billion and $ 1,027.1 billion.

 The following table summarizes additional off-balance sheet commitments for the Bank (dollars in millions):

 Expire
within one year
 Expire
after one year
 Total
 Total

 Standby letters of credit1,2

 $
 9,278
 $
 $
 9,396
 $
 6,566

 Standby bond purchase agreements2

 Commitments to purchase mortgage loans
 —

 Commitments to issue bonds
 —
 3,200

 Commitments to issue discount notes
 —

 Commitments to fund advances2

 2,123
 2,163

 1 Excludes commitments to issue standby letters of credit, when applicable. At both December 31, 2023 and 2022, the Bank had no commitments to issue standby letters of credit.

 2 The Bank has deemed it unnecessary to record any liability for credit losses on these agreements at December 31, 2023 and 2022, based on its credit extension and collateral policies.

 Standby Letters of Credit. The Bank issues standby letters of credit on behalf of its members to support certain obligations of the members to third-party beneficiaries. Standby letters of credit may be offered to assist members and non-member housing associates in facilitating residential housing finance, community lending, and asset-liability management, and to provide liquidity. In particular, members often use standby letters of credit as collateral for deposits from federal and state government agencies. Standby letters of credit are executed with members for a fee. If the Bank is required to make payment for a beneficiary's draw, the member either reimburses the Bank for the amount drawn or, subject to the Bank's discretion, the amount drawn may be converted into a collateralized advance to the member. The maturities of standby letters of credit outstanding at December 31, 2023 are currently no later than 2038. The carrying values of guarantees related to standby letters of credit are recorded in "Other liabilities" on the Statements of Condition and amounted to $ 4 million and $ 2 million at December 31, 2023 and 2022.

 The Bank monitors the creditworthiness of its members and non-member housing associates that have standby letters of credit. The Bank has established parameters for the measurement, review, classification, and monitoring of credit risk related to these standby letters of credit. All standby letters of credit, similar to advances, are fully collateralized at the time of issuance and subject to member borrowing limits as established by the Bank.

 Standby Bond Purchase Agreements. The Bank has entered into standby bond purchase agreements with state housing finance agencies within its district pursuant to which, for a fee, it agrees to serve as a standby liquidity provider if required, to purchase and hold the bonds until the designated marketing agent can find a suitable investor or the state housing finance agency repurchases the bonds according to a schedule established by the agreement. Each standby bond purchase agreement includes the provisions under which the Bank would be required to purchase the bonds and typically allows the Bank to terminate the agreement upon the occurrence of a default event of the issuer. At December 31, 2023, the Bank had standby bond purchase agreements with seven state housing finance agencies. The maturities of standby bond purchase agreements outstanding at December 31, 2023 are currently no later than 2028. During the years ended December 31, 2023, 2022, and 2021, the Bank was not required to purchase any bonds under these agreements.

 Commitments to Purchase Mortgage Loans. The Bank enters into commitments that unconditionally obligate it to purchase mortgage loans from its members. These commitments are considered derivatives and their estimated fair value at December 31, 2023 and 2022 is reported in " Note 7 — Derivatives and Hedging Activities " as mortgage loan purchase commitments.

 Commitments to Issue Consolidated Obligations. The Bank enters into commitments to issue consolidated obligations in the normal course of its business, generally that settle within 30 calendar days. At December 31, 2023, the Bank had commitments to issue $ 47 million and $ 551 million of consolidated obligation bonds and discount notes. At December 31, 2022, the Bank had commitments to issue $ 3.2 billion and $ 202 million of consolidated obligation bonds and discount notes.

 Commitments to Fund Advances. The Bank enters into commitments to fund additional advances up to 24 months in the future. At December 31, 2023 and 2022, the Bank had commitments to fund advances of $ 2.2 billion and $ 128 million.

 Other Commitments. For each MPF master commitment, the Bank's potential loss exposure prior to the PFI's credit enhancement obligation is estimated and tracked in a FLA. For absorbing certain losses in excess of the FLA, PFIs are paid a credit enhancement fee, a portion of which may be performance-based. To the extent the Bank experiences losses under the FLA, it may be able to recapture performance-based credit enhancement fees paid to the PFI to offset these losses. The FLA balance for all MPF master commitments with a PFI credit enhancement obligation was $ 178 million and $ 162 million at December 31, 2023 and 2022.
 Legal Proceedings. The Bank is subject to various pending legal proceedings arising in the normal course of business. The Bank is not currently aware of any pending or threatened legal proceedings to which it is a party that it believes could have a material impact on its financial condition, results of operations, or cash flows.

 Note 15 — Activities with Stockholders

 The Bank is a cooperative. This means the Bank is owned by its customers, whom the Bank calls members. As a condition of membership in the Bank, all members must purchase and maintain membership capital stock based on a percentage of their total assets, subject to a minimum and maximum amount, as of the preceding December 31st. Each member is also required to purchase and maintain activity-based capital stock to support certain business activities with the Bank. All transactions with stockholders are entered into in the ordinary course of business. Refer to " Note 11 — Capital " for more information on our capital stock requirements

 TRANSACTIONS WITH DIRECTORS' FINANCIAL INSTITUTIONS

 In the normal course of business, the Bank extends credit to its members whose directors and officers serve as Bank directors (Directors' Financial Institutions). Finance Agency regulations require that transactions with Directors' Financial Institutions be made on the same terms and conditions as those with any other member.

 The following table summarizes the Bank's outstanding transactions with Directors' Financial Institutions (dollars in millions):

 $
 $
 —

 Mortgage loans

 —

 Capital stock

 BUSINESS CONCENTRATIONS

 The Bank considers itself to have business concentrations with stockholders owning 10 percent or more of its total capital stock outstanding (including MRCS). At December 31, 2023 and 2022, the Bank had the following business concentrations with stockholders (dollars in millions):

 Capital Stock
 Mortgage

 Stockholder
 % of Total1

 Loans
 Income2

 Wells Fargo Bank, N.A.3

 $
 1,676
 $
 37,000
 $
 $
 1,687

 Superior Guaranty Insurance Company4

 —
 —
 —

 Total
 $
 1,682
 $
 37,000
 $
 $
 1,687

 Capital Stock
 Mortgage

 Stockholder
 % of Total1

 Loans
 Income2

 Wells Fargo Bank, N.A.3

 $
 1,290
 $
 32,000
 $
 $

 Superior Guaranty Insurance Company4

 —
 —
 —

 Total
 $
 1,297
 $
 32,000
 $
 $

 1 Pursuant to applicable Finance Agency regulations, the Bank's voting structure limits the voting rights of these stockholders and other members holding a significant amount of the Bank's capital stock.

 2 Represents interest income earned on advances during the years ended December 31, 2023 and 2022. Interest income on mortgage loans is excluded from this table as this interest relates to the borrower, not to the stockholder.

 3 Wells Fargo Bank, N.A. had standby letters of credit outstanding totaling $ 900 million as of December 31, 2023 and had no standby letters of credit outstanding as of December 31, 2022.

 4 Superior Guaranty Insurance Company is an affiliate of Wells Fargo Bank, N.A. and had no standby letters of credit outstanding as of December 31, 2023 and 2022.

 Note 16 — Activities with Other FHLBanks

 Overnight Funds. The Bank may lend or borrow unsecured overnight funds to or from other FHLBanks. All such transactions are at current market rates. The following table summarizes loan activity to other FHLBanks during the years ended December 31, 2023, 2022, and 2021 (dollars in millions):

 Other FHLBank
 Beginning
 Loans
 Principal
Repayment
 Ending

 2023

 $
 —
 $
 2,005
 $
 ( 2,005)
 $
 —

 New York

 —
 ( 500)
 —

 San Francisco

 —
 2,655
 ( 2,655)
 —

 $
 —
 $
 5,160
 $
 ( 5,160)
 $
 —

 2022

 $
 —
 $
 $
 ( 1)
 $
 —

 San Francisco
 —
 2,030
 ( 2,030)
 —

 $
 —
 $
 2,031
 $
 ( 2,031)
 $
 —

 2021

 $
 —
 $
 $
 ( 301)
 $
 —

 The following table summarizes borrowing activity from other FHLBanks during the years ended December 31, 2023, 2022, and 2021 (dollars in millions):

 Other FHLBank
 Beginning
 Borrowing
 Principal
Payment
 Ending

 2023

 Boston

 $
 —
 $
 $
 ( 450)
 $
 —

 Cincinnati

 —
 ( 750)
 —

 San Francisco

 —
 ( 500)
 —

 Topeka

 —
 ( 565)
 —

 $
 —
 $
 2,265
 $
 ( 2,265)
 $
 —

 2022

 $
 —
 $
 $
 ( 250)
 $
 —

 San Francisco
 —
 ( 500)
 —

 $
 —
 $
 $
 ( 750)
 $
 —

 2021

 $
 —
 $
 $
 ( 5)
 $
 —

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 None.

 ITEM 9A. CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls and Procedures
 Management is responsible for establishing and maintaining disclosure controls and procedures designed to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms; and (ii) accumulated and communicated to our management, including our President and CEO, and CFO, as appropriate, to allow timely decisions regarding required disclosure.
 Management, with the participation of our President and CEO, and CFO, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the annual period covered by this report. Based on that evaluation, our President and CEO, and CFO have concluded that our disclosure controls and procedures were effective as of December 31, 2023.
 Report of Management on Internal Control over Financial Reporting

 Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are made only in accordance with authorizations of management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the framework established in "Internal Control - Integrated Framework" (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

 Based on its assessment, management determined that our internal control over financial reporting was effective as of December 31, 2023. Additionally, the effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by PwC, our independent registered public accounting firm. Refer to " Item 8. Financial Statements and Supplementary Data — Report of Independent Registered Public Accounting Firm " for their audit report.

 Changes in Internal Control over Financial Reporting

 During the quarter ended December 31, 2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 ITEM 9B. OTHER INFORMATION

 None.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not applicable.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Directors
 The Board of Directors is responsible for monitoring our compliance with Finance Agency regulations and establishing policies and programs that carry out our mission. The Board of Directors adopts, reviews, and oversees the implementation of policies governing our advance, mortgage loan, investment, and funding activities. Additionally, the Board of Directors adopts, reviews, and oversees the implementation of policies that are designed to manage our exposure to various risks, including interest rate, liquidity, credit, operational, model, information security, legal, regulatory and compliance, DEI, strategic, and reputational, as well as capital adequacy.
 Our Board is comprised of Member Directors elected by our member institutions on a state-by-state basis and Independent Directors elected by all of our members. Our Board includes thirteen Member Directors and nine Independent Directors, two of whom serve as public interest directors. Under the FHLBank Act, the only matters submitted to shareholders for votes are (i) the annual election of our Directors and (ii) any proposed agreement to merge with one or more FHLBanks. Finance Agency regulations generally require all of our Directors to be elected by our members. In the event of a vacancy, Finance Agency regulations require the Board of Directors to elect a director to serve the remaining term. No member of management may serve as a director of an FHLBank.
 Pursuant to the passage of the Housing Act, both Member and Independent Directors serve four-year terms. If any person has been elected to three consecutive full terms as a Member or Independent Director of our Board of Directors, the individual is not eligible for election to a Member or Independent Directorship for a term which begins earlier than two years after the expiration of the last expiring four-year term.
 Member Directorships are allocated by the Finance Agency to the 13 states in our district and a member institution is eligible to participate in the election for the state in which it is located. Candidates for Member Directorships are not nominated by the Board. As provided for in the FHLBank Act, Member Directors are nominated by the members eligible to participate in the election in the relevant state. A member is entitled to cast, for each applicable Member Directorship, one vote for each share of capital stock that the member is required to hold as of the record date for voting, subject to a statutory limitation. Under this limitation, the total number of votes that each member may cast is limited to the average number of shares of our capital stock that were required to be held by all members in that state as of the record date for voting.
 Member Directors are required, by statute and regulation, to meet certain eligibility requirements to serve as a director. To qualify as a Member Director an individual must (i) be an officer or director of a member institution in compliance with the minimum capital requirements established by its regulator and located in the state in which there is an open directorship and (ii) be a U.S. citizen. We are not permitted to establish additional qualifications to define eligibility criteria for Member Directors or nominees. Because of the structure of FHLBank Member Director nominations and elections, we may not know what factors our member institutions considered in selecting Member Director nominees or electing Member Directors.
 Independent Directors are nominated by our Board of Directors after consultation with our Advisory Council, and then voted upon by all members within our 13 state district. For each Independent Directorship, a member is entitled to cast the same number of votes as it would for a Member Directorship.
 In order to be eligible to serve as an Independent Director on our Board, an individual must (i) be a U.S. citizen and (ii) maintain a principal residence in a state in our district (or own or lease a residence in the district and be employed in the district). In addition, the individual may not be an officer of any FHLBank or a director, officer, or employee of any member institution or of any recipient of our advances. By regulation, we are required to have at least two public interest Independent Directors, each of whom must have more than four years of personal experience in representing consumer or community interests in banking services, credit needs, housing, or financial consumer protection. Each Independent Director, other than a public interest Independent Director, must have knowledge of, or experience in, financial management, auditing or accounting, risk management practices, derivatives, project development, organizational management, or the law.

 On an annual basis, our Board of Directors performs an assessment of the directors' backgrounds, expertise, and qualifications against the skills and qualifications it desires on the Board of Directors. Furthermore, each director annually certifies that he/she continues to meet all applicable statutory and regulatory eligibility and qualification requirements. In connection with the election or appointment of Independent Directors, the Independent Director completes an application to serve on the Board of Directors. As a result of the assessment and as of the filing date of this Form 10-K, nothing has come to the attention of the Board of Directors or management to indicate that any of the current directors do not continue to possess the necessary experience, qualifications, attributes, or skills, as described in each director's biography.

 Information regarding our current directors and executive officers is provided in the following sections. There are no family relationships among our directors or executive officers. The table below shows membership information for our Board of Directors at February 29, 2024:

 Expiration of

 Current Term As

 Member or

 Director as of
 Board

 Age
 Director Since
 December 31
 Committees

 Karl A. Bollingberg (chair)

 January 1, 2019
 2026

 a

 John A. Klebba (vice chair)

 January 1, 2018
 2025
 a

 Ruth B. Bennett
 June 1, 2015
 2024
 a, b, d, h

 Steven L. Bumann
 January 1, 2015
 2025
 b, c, d

 Cleon P. Butterfield *
 January 1, 2020
 2027

 d, g, h

 Douglas L. DeFries
 January 1, 2022
 2025
 a, d, e, f

 Kim R. DeVore
 January 1, 2023
 2026
 d, g, h

 Edward A. Garding
 August 30, 2021
 2027

 b, h

 James W. Hunt
 January 1, 2021
 2024
 b, c

 Amy K. Johnson
 January 1, 2020
 2027

 a, d, f, g

 Jon M. Jones
 January 1, 2021
 2024
 b, f

 Joe R. Kesler
 March 9, 2018
 2027

 a, e, h

 Wan-Chong Kung
 January 19, 2022
 2026
 e, h

 Russell J. Lau
 January 1, 2022
 2025
 b, c, d

 Lauren M. MacVay
 January 1, 2018
 2025
 a, c, g

 Elsie M. Meeks *
 January 1, 2015
 2026
 a, b, d, f

 Jason A. Meyerhoeffer
 June 25, 2019
 2026
 a, e, h

 Siva G. Narendra
 January 1, 2022
 2025
 c, g

 Carol K. Nelson
 January 1, 2021
 2024
 f, g

 Jeff L. Plagge

 January 1, 2024
 2027

 c, e

 Lisa A. Stange

 January 1, 2024
 2027

 c, g

 Robert J. Vogel

 January 1, 2024
 2027

 e, f

 a) Executive and Governance Committee

 b) Audit Committee

 c) Risk and Compliance Committee

 d) Housing and Community Investment Committee

 e) Member Committee

 f) Compensation Committee

 g) Technology Committee

 h) Finance Committee

 * Public Interest Independent Director

 The following describes the principal occupation, business experience, qualifications, and skills, among other matters of the 22 directors who currently serve on our Board of Directors. Except as otherwise indicated, each Director has been engaged in the principal occupation indicated for at least the past five years.
 Karl A. Bollingberg, the Board's chair, has served as a director for Cornerstone Bank in Fargo, North Dakota, since June 2022. Mr. Bollingberg retired from Alerus Financial in July 2022. While at Alerus Financial, Mr. Bollingberg served as loan participation advisor from 2018 to 2022, and in various other roles, including director of lending, director of banking services, and regional president, since 1987. Prior to that, Mr. Bollingberg worked for U.S. Bank, N.A. from 1985 to 1987. Mr. Bollingberg is active in a number of civic organizations including advisory board member and chair for the Bank of North Dakota, and member and past chair of the Regional Airport Authority in Grand Forks, North Dakota. In addition, he previously served as a member and chair for the Regional Economic Development Corporation in Grand Forks, North Dakota and was campaign chairperson for the Community Violence and Intervention Center Shelter Project in Grand Forks, North Dakota. He earned his bachelor's degree in agricultural economics from North Dakota State University and completed Louisiana State University School of Banking in 2000. Mr. Bollingberg's position as a director of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors. He currently serves as the chair of the Executive and Governance Committee.
 John A. Klebba, the Board's vice chair, has been the CEO and chairman of the board of Legends Bank in Linn, Missouri, and its holding company, Linn Holding Company, since April 2018. He previously served as the president, CEO, and chairman of the board of Legends Bank and its holding company, Linn Holding Company, since February 2004. Mr. Klebba has been with Legends Bank since 1991. Prior to that, he was a partner in the Kansas City office of the law firm of Lewis Rice and Fingersh, where his practice concentrated on corporate and banking law. He is also the managing member of JHK Farm, LLC, a family-owned cow/calf operation in Osage County, Missouri. Mr. Klebba is a former member of the board of the American Bankers Association and a former chairman of the Missouri Bankers Association. He is currently the chairman of the Board of Regents of the State Technical College of Missouri, a member of the board of the Missouri Higher Education Savings Program, as well as a board member of a number of charitable organizations. Mr. Klebba holds both a Juris Doctor degree and MBA degree from the University of Notre Dame. Mr. Klebba's position as an officer of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors. He currently serves as the vice chair of the Executive and Governance Committee.
 Ruth B. Bennett has served as principal of RB Bennett Enterprises LLC, a real estate brokerage firm and property development company in Oregon and Washington, since 2008. In her role at RB Bennett Enterprises LLC, she develops, builds, and manages affordable housing. From 1973 to 2007, she served in various capacities at the Bonneville Power Administration, a federal electrical utility in Portland, Oregon, including COO from 2003 to 2007. She is a former board member of Vancouver Affordable Housing, Pacific Northern Environmental, First Independent Bank, the regional Columbia-Willamette YMCA, and Pacific Health SW Medical Center where she was a hospital board chair for three years. Ms. Bennett was elected to the board of the Seattle Bank in 2014 and served on the Seattle Bank's board until the merger with the Bank in 2015. Ms. Bennett's experience, as indicated by her background, support her qualifications to serve as an Independent Director on our Board of Directors. She currently serves as chair of the Audit Committee and vice chair of the Housing and Community Investment Committee.
 Steven L. Bumann has served as chief investment officer at BankWest, Inc. in Pierre, South Dakota, since January of 2022. He previously served as CFO from 1995 to 2021. Mr. Bumann has more than 38 years of banking experience and has held various leadership roles within the financial industry, including vice president and senior vice president roles at BankWest, Inc. He also earned his CPA license while working for a local CPA firm and spent time working for the South Dakota Department of Legislative Audit. Mr. Bumann served as chairman of the board of directors of the South Dakota Bankers Association in 2021. Past leadership roles include the Pierre School Board, the Pierre Chamber of Commerce and the South Dakota Retirement System Board of Trustees. Mr. Bumann's position as an officer of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors.

 Cleon P. Butterfield has served as a senior vice president and CFO for the Utah Housing Corporation since 2001. Mr. Butterfield joined the Utah Housing Corporation in 1979 and has held various leadership capacities during his tenure including treasurer, director of operations, and director of program development among others. Mr. Butterfield is a licensed CPA. Mr. Butterfield has served on multiple affordable housing councils and committees. He is also a former member of the State of Utah Alternative Dispute Resolution Council. Additionally, he is a guest lecturer teaching about how low-income housing tax credits and tax-exempt bond financing produce a viable solution for low-income housing needs. Mr. Butterfield's experience, as indicated by his background, support his qualifications to serve as a Public Interest Independent Director on our Board of Directors.

 Douglas L. DeFries retired as the president and CEO of both BOU Bancorp, Inc. and the Bank of Utah in December 2022, positions he held since 2011. Mr. DeFries continues to serve as a director of both BOU Bancorp, Inc. and the Bank of Utah. Mr. DeFries joined Bank of Utah in 1986 as vice president-controller and was named executive vice president and CFO in 1992. In 2005, he was elected to the board of directors of Bank of Utah. From 1984 to 1986, Mr. DeFries served as vice president-controller at American Savings and Loan Association. Mr. DeFries was a staff accountant and manager with Peat Marwick, Mitchell & Co (now KPMG LLC) from 1980 to 1984. His finance industry service includes involvement in several state and national organizations. Mr. DeFries has served on the Community Bank Council of the American Bankers Association as Utah Representative and administrative committee member from 2016 to present. Mr. DeFries was chairman of the Money Management Council for the Utah State Treasurer. Over the past 30 years, Mr. DeFries has had multiple appointments on the board of directors for the Utah Bankers Association including chairman in 2018 to 2019. Mr. DeFries has served on the Board of Trustees of Utah Housing Corporation from 2011 to 2016 and as chairman in 2016. Mr. DeFries was also the chairman of the American Institute of Banking from 1995 to 1996. Mr. DeFries is also actively involved in the community and volunteers on several boards and organizations. Mr. DeFries' past contributions include serving on the board of directors of the Ogden/Weber Chamber of Commerce, United Way of Northern Utah, and the Institutional Review Board for Intermountain Healthcare. Mr. DeFries holds a BA degree in Accounting from Utah State University, graduating magna cum laude. He also earned an MBA degree from Utah State University. Mr. DeFries' position as a director of a member institution and his experience, as indicated by his background, support his qualification to serve on our Board of Directors. He currently serves as chair of the Compensation Committee.

 Kim R. DeVore has served as the president and CEO of Jonah Bank in Cheyenne, Wyoming since 2020. Ms. DeVore previously served as CFO of Jonah Bank, since 2006. Ms. DeVore's previous banking responsibilities include teller, operations, new accounts, cash management, as well as numerous other positions. Ms. DeVore is active in community organizations including the Two Fly Foundation, The Lyric, and the Central Wyoming Boys & Girls Club. She was the chair of the capital fundraising and development of WyoTowne at AmeriTowne; a program to teach fifth graders about civic and financial responsibility along with America's free enterprise system and their important role in its success. Ms. DeVore has served on the Wyoming Business Council since 2015. Ms. DeVore is vice president of the Federal Reserve Bank's Community Depository Institution Advisory Council for the Federal Reserve Bank. Ms. DeVore's position as an officer of a member institution and her experience, as indicated by her background, support her qualifications to serve on our Board of Directors.

 Edward A. Garding retired as president and CEO of First Interstate BancSystems, in Billings, MT in 2016. Mr. Garding spent more than 40 years with First Interstate BancSystems during which he held many management positions including chief credit officer, CRO, COO and corporate and government relations officer. Mr. Garding has served on several banking industry boards including serving as chairman of the Wyoming Bankers Association, Pacific Coast Banking School Board, and Montana Bankers Association. He was also a member of the Fannie Mae Western Region Advisory Board. He served as the Interim Dean of the College of Business at Montana State University Billings, a position he held during the 2018 to 2023 fiscal years, and is now retired from that position. Mr. Garding's experience, as indicated by his background, support his qualifications to serve as an Independent Director on our Board of Directors.
 James W. Hunt has served as senior vice president and CFO of OnPoint Community Credit Union in Portland, Oregon, since May of 2009. Prior to joining OnPoint, Mr. Hunt spent eight years serving in several positions within the finance division of Washington Mutual in Seattle, most recently as a senior vice president within the treasury department. From 1987 to 2001, he held a variety of finance positions within Fleet Mortgage Group in Columbia, South Carolina. For seven years, Mr. Hunt served on the board of directors of Financial Beginnings, a non-profit financial education organization benefiting students and young adults in Oregon and Washington. He earned a Bachelor of Business Administration in Finance from Francis Marion College in South Carolina in 1987, and is a CPA (inactive) in Oregon and CFA. Mr. Hunt's position as an officer of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors.
 Amy K. Johnson retired from her position as global head of operations for Columbia Threadneedle Investments, the investment management division of Ameriprise Financial, Inc. in Minneapolis, Minnesota, in June 2019. Ms. Johnson held her position as global head of operations for Columbia Threadneedle Investments from April 2016 to June 2019 and previously served in several positions at Columbia Threadneedle Investments and its predecessors and affiliates since 2001. Her most recent roles included president of Ameriprise Trust Company from November 2006 to April 2017 and Columbia Threadneedle Investments COO - North America from May 2010 to April 2016. Ms. Johnson has been a board member of Friends of Ngong Road since 2009 and currently serves as COO, a volunteer position. Based in Minneapolis, Minnesota, its mission is to transform the lives of children impacted by AIDS and HIV in Nairobi, Kenya, through education and support. Ms. Johnson has served as a member of the Board of Trustees for Parnassus Funds since 2022. Ms. Johnson's experience, as indicated by her background, support her qualifications to serve as an Independent Director on our Board of Directors. She currently serves as chair of the Technology Committee.

 Jon M. Jones has served as the president and CEO of Washington Business Bank in Olympia, Washington since 2007. Prior to joining Washington Business Bank, Mr. Jones worked for his own company, Jones Financial Strategies, as a bank consultant and commodities trader. He previously worked for Venture Bank in Olympia, Washington in various roles for 15 years. Mr. Jones started his career in finance at Peoples Bank and Trust in Waterloo, Iowa, where he worked as a credit analyst. Mr. Jones then moved on to be a commercial lending officer at Northwest Bank and Trust in Davenport, Iowa before moving to Washington in 1990. Mr. Jones is a member and past chairman of the board of the Washington Bankers Association. Additionally, he is a past chairman of both the Thurston County Chamber of Commerce and the South Sound YMCA. Mr. Jones is also a member of the Olympia Roundtable. Mr. Jones is a 1984 graduate of the University of Northern Iowa with a BA in Finance and is a 1996 graduate of the Pacific Coast Banking School at the University of Washington. Mr. Jones' position as an officer of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors. He currently serves as vice chair of the Audit Committee and vice chair of the Compensation Committee.
 Joe R. Kesler has served as a director of First Montana Bank in Missoula, Montana, and its holding company, First National Bancorp, Inc., since 2005. Mr. Kesler served as the president and CEO of First Montana Bank from 2005 to February 2018 and has over 40 years of experience in the banking industry. Mr. Kesler has served in various community leadership roles, including president of the Chamber of Commerce, director of a small business incubator, director of business development corporations, director of state banking trade associations, member of service clubs such as Rotary, and leader or director for community nonprofits like symphony boards and churches. Mr. Kesler's position as a director of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors. He currently serves as chair of the Member Committee.
 Wan-Chong Kung has served as funds director of Securian Funds Trust since October 2022. Ms. Kung has served as an independent trustee on a multiple series trust with US Bancorp Global Fund Services, where she has been a member of the audit and governance committees, since 2020. Ms. Kung served as the senior vice president, senior fund manager, head of rates strategy at Nuveen Asset Management from 2011 to 2019. Prior to that, Ms. Kung spent 12 years serving as a managing director and fund manager at US Bancorp Asset Management. Ms. Kung is a CFA and holds an MBA in management information systems from the University of Minnesota. Ms. Kung's experience, as indicated by her background, support her qualifications to serve as an Independent Director on our Board of Directors. She currently serves as vice chair of the Finance Committee.

 Russell J. Lau has served as the chairman and CEO of Finance Factors Limited, a minority depository FDIC insured institution based in Honolulu, Hawaii, since 1998. Mr. Lau has served as the chairman, president, and CEO of Finance Enterprises, Ltd., the parent company, since 2004. In connection with his service with Finance Enterprises, he is the chairman and CEO of Finance Insurance, Ltd., a Hawaii independent insurance agency and chairman and CEO of Finance Realty, Ltd., and Waipono Inc., real estate investment/development and management companies. Mr. Lau previously served on the boards of both the Federal Home Loan Bank of Seattle from 2005 to 2015 and Des Moines from 2015 to 2017. Mr. Lau is a member and former president of the Hawaii Bankers Association Executive Committee. Mr. Lau is a member of the Financial Executives Institute. Mr. Lau is active in the community and is a member of the American Judicature Society (treasurer 2008 to 2023), Assets School (former treasurer), and is the current president of the Chinese Chamber of Commerce of Hawaii. Mr. Lau was formerly the chair of the East West Center Foundation and secretary of Catholic Charities, Palolo Chinese Home, St. Andrew's Schools (former chair), and member of Aloha Council Boy Scouts of America, American Youth Soccer Organization, Leahi Soccer Coach, The Early School, and Junior Achievement. Mr. Lau became a member of the FDIC's Minority Depository Institutions Subcommitteee to the Advisory Committee on Community Bank in May 2022. Mr. Lau has a bachelor's and master's degree in finance from the University of Puget Sound and the University of Oregon, respectively. He also graduated from Pacific Coast Banking School at the University of Washington. Mr. Lau's position as an officer of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors.

 Lauren M. MacVay is currently the CEO of True North Federal Credit Union in Juneau, Alaska, a position she has held since 2004. Ms. MacVay has 28 years of banking experience. Prior to her current role, she held various leadership and management roles after joining True North Federal Credit Union in 1995. Before relocating to Alaska and beginning her banking career, Ms. MacVay was a practicing attorney in Pennsylvania for several years. Ms. MacVay has held numerous board positions and currently serves on the board of directors of the Alaska Credit Union League and the Financial Reality Foundation. Ms. MacVay's position as an officer of a member institution and her experience, as indicated by her background, support her qualifications to serve on our Board of Directors. She currently serves as chair of the Risk and Compliance Committee.

 Elsie M. Meeks served as state director of the United States Department of Agriculture in South Dakota from July of 2009 to 2015. Prior to joining the United States Department of Agriculture, Ms. Meeks was the president and CEO of First Nations Oweesta Corporation. She was active in the development and management of Lakota Funds, a small business and micro-enterprise development financial institution on the Pine Ridge Indian Reservation in South Dakota and has served as its board chair since 2015. Ms. Meeks served on the U.S. Commission on Civil Rights, completing a six-year term. She currently serves on the board of the Native American Agricultural Fund, a national trust established through the federal court as a result of proven discrimination by the United States Department of Agriculture against Native American ranchers and farmers. She is a past director of the Northwest Area Foundation based in St. Paul, Minnesota. She has served as a director or council member of several national Native American organizations. Ms. Meeks' experience, as indicated by her background, support her qualifications to serve as a Public Interest Independent Director on our Board of Directors. She currently serves as chair of the Housing and Community Investment Committee.

 Jason A. Meyerhoeffer has served as president and CEO of First Federal Savings Bank of Twin Falls in Twin Falls, Idaho since 2017. Prior to his current position, Mr. Meyerhoeffer held various leadership roles at First Federal Savings Bank of Twin Falls since 1996, including serving as executive vice president and chief lending officer from 2002 to 2016. Mr. Meyerhoeffer's banking career began in 1995 as a regional credit officer with West One Bank N.A. Mr. Meyerhoeffer has served as director of several business development corporations and state banking trade associations. Mr. Meyerhoeffer's position as an officer of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors. He currently serves as chair of the Finance Committee and vice chair of the Member Committee.

 Siva G. Narendra is CEO of tyfone, Inc., a digital banking technology company in Portland, Oregon, he co-founded in 2004. Dr. Narendra has served as its CEO since 2011. Dr. Narendra is an inventor with more than 100 patents. Inventions he patented have led to the launch of OneIDLab, a digital security company, and iCashe, a digital payment fintech. Prior to becoming an entrepreneur, Dr. Narendra was a Senior Staff Scientist at Intel's Corporate Technology Group where his contributions led to the issuance of 75 patents. Dr. Narendra is a published author and has more than 60 peer-reviewed papers. In addition to serving on the boards of the two technology companies he co-founded, tyfone, Inc. and iCashe, Dr. Narendra is on the board of OnPoint Community CU Foundation and was a board member at OnPoint Community Credit Union from 2017 to 2020. Dr. Narendra holds a Ph. D. in Electrical Engineering and Computer Science from the Massachusetts Institute of Technology in Cambridge, Massachusetts. Dr. Narendra's experience, as indicated by his background, support his qualifications to serve as an Independent Director on our Board of Directors. He currently serves as vice chair of the Risk and Compliance Committee.

 Carol K. Nelson served as CEO and president of Monzo, Inc. from 2021 to 2022. Ms. Nelson served as a strategic advisor to Monzo in its application for a national bank charter for Monzo Bank USA N.A from 2019 to 2021. She was an executive for KeyBank from 2015 to 2019. Ms. Nelson served as KeyBank's pacific region executive and market president, was a member of KeyBank's executive council, and director and trustee for the KeyBank Foundation. Ms. Nelson was appointed by Governor Inslee to serve as the CEO of the Washington State Department of Revenue from January 2013 to 2015. She served as the CEO and president of Cascade Bank in Everett, Washington from January 2001 to June 2011. She began her banking career at Seafirst Bank which was acquired by Bank of America in 1982 and served in several positions culminating as senior vice president and northern region executive. Ms. Nelson currently serves as chair of the board of the Washington State Major League Baseball Public Facilities District and as vice chair of the board of Delta Dental of Washington. She is a past chair of the board for United Way of King County and is a former director of the Federal Reserve Bank of San Francisco, Seattle Branch, serving two terms (2007 to 2009 and 2015 to 2017). She is a past board member of Pacific Coast Banking School and a past board chair of the Washington Bankers Association. She earned a BA in Finance and an MBA from Seattle University. Ms. Nelson's experience, as indicated by her background, support her qualifications to serve as an Independent Director on our Board of Directors. She currently serves as vice chair of the Technology Committee.

 Jeff L. Plagge has served as a director for Northwest Bank in Spencer, Iowa since 2009. Mr. Plagge has worked in the banking industry for over 42 years. Mr. Plagge served as president and CEO of Northwest Financial Corporation in Arnolds Park, Iowa from 2009 to 2019. Prior to that, Mr. Plagge served as president and CEO of First National Bank in Waverly, Iowa and president, CEO and chairman of Midwest Heritage Bank in West Des Moines, Iowa. Mr. Plagge served as the Iowa Superintendent of Banking for the Iowa Division of Banking, a Governor-appointed position he held from 2019 to 2023. Mr. Plagge also serves on the boards of the Conference of State Bank Supervisors in Washington, D.C. and American Bankers Mutual Insurance, LTD., in Cleveland, Ohio. Mr. Plagge served as chairman of the Iowa Bankers Association, chairman of the American Bankers Association, and former board member of the Chicago Federal Reserve Bank. Additionally, Mr. Plagge served as chairman of the Federal Reserve Bank of Chicago Community Depository Institution Advisory Council, was a member of the Federal Reserve Board of Governors Community Depository Institution Advisory Council, chairman of the Clearing House Faster Payments Task Force, chairman of Delta Dental of Iowa, and many other industry, non-industry and community-related boards, committees, and task forces throughout his career. Mr. Plagge received his bachelor's degree in agriculture business from Iowa State University and is a graduate of the Graduate School of Banking at the University of Colorado - Boulder. Mr. Plagge's position as a director of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors.
 Lisa A. Stange is strategic advisor to Clearwater Analytics, an investment accounting and analytics software provider, in Boise, Idaho. She has held this position since 2020, where she provides consulting services to insurance companies, asset managers and government entities on topics including investment accounting and risk management. With over 25 years of experience in insurance company leadership positions, Ms. Stange previously served as chief investment officer of Homesteaders Life Company from 2017 to 2019, chief investment officer and treasurer of EMC Insurance Companies from 2009 to 2014, and in investment roles including portfolio manager at Principal Global Investors from 1989 to 2008. During her career, Ms. Stange has gained valuable leadership experience and knowledge in the areas of operations and business-risk management, mortgages and other related investments, derivatives, and capital markets. Ms. Stange served as a Governor-appointed trustee on the board of the Iowa Public Employees' Retirement System for 12 years ending in 2023. Ms. Stange currently serves on the Investment Board of the Des Moines Art Center Foundation and the Finance Advisory Board at the University of Iowa Tippie School of Business. Ms. Stange received her Bachelor of Business Administration degree in 1988 and MBA in Finance in 1989 from the University of Iowa. She holds the CFA designation. Ms. Stange's experience, as indicated by her background, support her qualifications to serve as an Independent Director on our Board of Directors.
 Robert J. Vogel is chairman of the board for New Market Bank in Elko New Market, Minnesota, a position he has held since 2014. Mr. Vogel joined New Market Bank in 1975 as a cashier. During his tenure, Mr. Vogel held multiple positions including executive vice president and served as president and CEO for 26 years. Mr. Vogel also currently serves as president and chairman for Market Bancorporation, New Market Bank's holding company, a position he has held since 1987. Mr. Vogel has extensive public service experience including serving in the Minnesota House of Representatives beginning in 2014, where he was re-elected for two additional terms before his retirement in 2021. His major committee assignments included chief author, initial chair of the legislative budget office, labor - minority lead, ways and means - vice chair, commission on pensions and retirements, and the commission on employee relations. He also served on the Scott County Board of Commissioners from 2002 to 2009. Other experience includes Mr. Vogel's time serving as a strategic plan consultant, facilitating more than 25 strategic plans over 15 years, for both the private and public sector. Mr. Vogel is an active member in several organizations, including the Lions Club, New Prague Rotary Club, and Lakeville Chamber of Commerce. In 2000, Mr. Vogel was honored with the University of St. Thomas Business Excellence Award in Community Service. Mr. Vogel earned his BA in Finance from the College of St. Thomas in St. Paul, Minnesota. Mr. Vogel's position as a director of a member institution and his experience, as indicated by his background, support his qualifications to serve on our Board of Directors.

 Executive Officers
 The following persons currently serve as executive officers of the Bank:

 Position Held

 Executive Officer
 Age
 Position Held
 Since

 President and Chief Executive Officer
 January 2020

 Chief Financial Officer
 January 2023

 Chief Risk and Compliance Officer
 January 2023

 Chief Business Officer
 August 2020

 Chief Information Officer
 March 2020

 Katherine A. Steinke
 Chief Human Resources Officer
 December 2021

 Robert W. Dixon
 General Counsel and Corporate Secretary
 September 2022

 Kelly E. Rasmuson
 Chief Audit Executive
 June 2016

 Deborah G. Baldwin
 Chief Diversity, Equity, and Inclusion Officer
 May 2020

 Cherie Schuler
 Senior Director of Member and Financial Operations
 June 2022

 Kristina K. Williams is currently serving as President and CEO, a position she has held since January 2020. She began her association with the Federal Home Loan Bank System in 2004. Prior to her current role, she served as the COO of the Pittsburgh Bank, a position she held from 2011 to 2019. In that role, Ms. Williams had responsibility for all member-facing departments, including community investment, communications, product delivery, member services, and IT. In her 15 years with the Pittsburgh Bank she also held positions of chief accounting officer, CFO, and acting CRO. Prior to working for the Pittsburgh Bank, Ms. Williams spent 12 years with PNC Financial Services in its wholesale bank and six years in public accounting. She is currently serving on the boards of Greater Des Moines Habitat for Humanity and the Greater Des Moines Partnership. She formerly served as vice chair of the West Liberty University Board of Governors. Ms. Williams also previously served as the development committee chair of the board of directors for Strong Women Strong Girls of Pittsburgh. Ms. Williams has an undergraduate degree from West Liberty University and Masters of Professional Accountancy from West Virginia University. She is also a CPA (inactive) and received an honorary Doctor of Humane Letters degree from West Liberty University in 2015.

 James G. Livingston is currently serving as CFO, a position he has held since January 2023. In his role, Mr. Livingston has management responsibility for the accounting and financial reporting, capital markets, financial controls, and strategic planning functions. He previously served as executive vice president and Director of Municipal & Institutional Services, senior vice president, and vice president at Zions Bancorporation, National Association, located in Salt Lake City, Utah, since 2017, 2011 and 2005, respectively. Prior to joining Zions in 2005, Mr. Livingston worked for Ziff Brothers Investments, in New York City, as a quantitative strategist and as Director of Financial Research. Mr. Livingston was elected to the Seattle Bank's board from the state of Utah in 2007. After the merger with the Bank in 2015, he served as a director on the Bank's Board until 2021. Mr. Livingston served as the Board Chair from 2020 to 2021. He also previously served as an assistant professor of accounting at Southern Methodist University in Dallas, Texas.

 Joelyn R. Jensen-Marren is currently serving as CRCO, a position she has held since January 2023. In her role, Ms. Jensen-Marren has responsibility for the Bank's enterprise risk management area, including credit risk, market risk, operational risk, and model risk. Ms. Jensen-Marren previously served as the CFO beginning in June 2019. Prior to serving as CFO, Ms. Jensen-Marren served as senior vice president, director of portfolio strategy from 2014 to 2019. Ms. Jensen-Marren joined the Bank in 1999 and has served in various leadership roles. She currently serves on the Polk County Housing Trust Fund Board. Ms. Jensen-Marren received her undergraduate degree from Iowa State University with a Master's degree from the University of Colorado, Denver.

 William W. Osborn is currently serving as CBO, a position he has held since August 2020. Mr. Osborn is responsible for the Bank's member-facing departments, including community investment, funding product group, member strategies and marketing, and the mortgage product group. Prior to joining the Bank, he served as senior vice president and CFO of the Topeka Bank, a position he held from 2010 to 2020. Mr. Osborn also served as director of product profitability and pricing of the Topeka Bank from 2006 to 2007. Mr. Osborn was promoted to director of banking strategies in January 2008, to first vice president in April 2008, and to senior vice president in April 2009. Mr. Osborn is a CFA and member of the CFA Institute. Mr. Osborn received his undergraduate degree from Brigham Young University and MBA degree from Westminster College.

 Kevin T. Larkin is currently serving as CIO, a position he has held since March 2020. Mr. Larkin oversees the Bank's IT, information security, enterprise procurement and vendor management, and business resiliency and facility management departments. Prior to joining the Bank, Mr. Larkin served as vice president, managing director, IT operations of the Chicago Bank since 2019. He previously served as the vice president, managing director, IT risk, compliance, and administration of the Chicago Bank from 2018 to 2019. Prior to joining the Chicago Bank, Mr. Larkin served as assistant vice president of business systems and IT governance for Illinois Mutual Life Insurance from 2014 to 2018. In addition, Mr. Larkin previously served as the director of business solutions for the Pittsburgh Bank from 2001 to 2014. He has earned a bachelors degree from Gannon University and both an MBA degree and Master's in Information Systems Management from Duquesne University.

 Katherine A. Steinke is currently serving as CHRO, a position she has held since December 2021. Ms. Steinke has management responsibility for the human resources department. Prior to joining the Bank, Ms. Steinke previously served as vice president, human resources, for Farm Credit Services of America in Omaha, Nebraska from 2017 to 2021. Prior to her tenure at Farm Credit Services of America, she served as director, human resources at Glacial Lakes Energy in Watertown, South Dakota from 2011 to 2017. Ms. Steinke earned her undergraduate degree from the University of Nebraska Medical Center and a Master's in HR Management/Labor and Employment Relations from Penn State University.

 Robert W. Dixon is currently serving as General Counsel and Corporate Secretary, a position he has held since September 2022. Mr. Dixon has management responsibility for the Bank's legal department and government relations. He advises management and the Board of Directors on all legal matters impacting the Bank, including those involved with establishing or changing business direction, as well as all matters concerning SEC reporting and corporate governance. Mr. Dixon previously served as Vice President and Deputy General Counsel from 2021 to 2022 and Vice President and Associate General Counsel from 2013 to 2021. Prior to joining the Bank, Mr. Dixon practiced law at Davis Brown Law Firm in Des Moines, Iowa from 2010 to 2013 and at Vedder Price P.C. in Chicago, Illinois from 2001 to 2010. Mr. Dixon received his undergraduate degree from the University of Iowa and his Juris Doctor degree from Drake University Law School. He graduated from the Greater Des Moines Leadership Institute in 2013 and served as Board President for Big Brothers Big Sisters of Central Iowa from 2021 to 2023.

 Kelly E. Rasmuson is currently serving as Chief Audit Executive, a position he has held since 2016. Mr. Rasmuson joined the Bank in 2006 as director of Internal Audit and became Senior Vice President in 2007. Mr. Rasmuson has management responsibility for the internal audit department. Prior to joining the Bank, Mr. Rasmuson held positions of increasing responsibility with the internal audit department at Principal Financial Group in Des Moines, Iowa from 1997 to 2006. Before moving to Iowa, he worked in a variety of positions at multiple companies in Columbus, Ohio, including audit roles with one of the large international accounting firms. Mr. Rasmuson received his undergraduate degree from the University of Northern Iowa and his MBA from Xavier University. He is also a Certified Internal Auditor and CPA.

 Deborah G. Baldwin is currently serving as Chief DEI Officer, a position she has held since May 2020. In this role, Ms. Baldwin oversees all aspects of the Banks' DEI efforts, as well as the Bank's OMWI. Prior to joining the Bank, she consulted on diversity and inclusion strategy development and execution from 2018 to 2020. Prior to consulting, Ms. Baldwin was the deputy director, OMWI, at the National Credit Union Administration from 2016 to 2018. In addition, Ms. Baldwin previously served as assistant vice president, diversity and inclusion, at the Federal Reserve Bank of Chicago from 2011 to 2014. Ms. Baldwin received her undergraduate degree from Georgia State University and holds certifications in unconscious bias training and the Intercultural Development Inventory designed to assess cross-cultural competence.

 Cherie Schuler is currently serving as the Senior Director of Member and Financial Operations, a position she has held since June 2022. Ms. Schuler previously served as Director of Member Financial Operations from 2018 to 2022, and has held various roles since joining the Bank in 1984. In her role, Ms. Schuler oversees the member and financial operations of the Bank, which includes the advance funding desk, membership, collateral management, and other bank operations. She also serves as the Office of Foreign Assets Control officer. Ms. Schuler earned her business degree from Upper Iowa University and obtained a certification from the Banking Administration Institute Graduate School of Operations and Payments. Ms. Schuler is also an Accredited Automated Clearing House Professional.

 Code of Ethics
 We have adopted a Code that sets forth the guiding principles and rules of conduct by which we operate and conduct our daily business with our customers, vendors, shareholders, and fellow employees. The Code applies to all of our directors, officers, and employees. The purpose of the Code is to promote honest and ethical conduct and compliance with the law, particularly as it relates to the maintenance of our financial books and records and the preparation of our financial statements. The Code can be found on our website at www.fhlbdm.com. We disclose on our website any amendments to, or waivers of, the Code. The information contained in or connected to our website is not incorporated by reference into this annual report on Form 10-K and should not be considered part of this or any report filed with the SEC.

 Audit Committee
 The purpose of the Audit Committee is to assist the Board of Directors in fulfilling its review and oversight responsibilities for (i) the integrity of the Bank's financial statements and financial reporting process and systems of internal accounting and financial reporting controls, (ii) the independence, scope of audit services, and performance of the Bank's internal audit function as well as the appointment or replacement of the Bank's chief audit executive, (iii) the selection and replacement, qualifications, independence, scope of audit, and performance of the Bank's external auditor, (iv) the Bank's compliance with laws, regulations and policies, including the Code of Ethics, and (v) the policy for complaints regarding questionable accounting, internal accounting controls, and auditing matters, and oversight of fraud investigations. The Audit Committee has adopted a charter outlining its roles and responsibilities, which is available on our website at www.fhlbdm.com. The information contained in or connected to our website is not incorporated by reference into this annual report on Form 10-K and should not be considered part of this or any report filed with the SEC.
 The members of our Audit Committee for 2024 are Ruth Bennett (chair), Jon Jones (vice chair), Steven Bumann, Edward Garding, James Hunt, Russell Lau, and Elsie Meeks. The Audit Committee held a total of 13 meetings in 2023. As of February 29, 2024, the Audit Committee has held one meeting in 2024 and is scheduled to hold 11 meetings throughout the remainder of 2024. Refer to Exhibit 99.1 of this 2023 Annual Report for the Audit Committee Report.
 Audit Committee Financial Expert
 Our Board of Directors determined that all of the members of its Audit Committee qualify as audit committee financial experts under Item 407(d)(5) of Regulation S-K. Refer to " Item 13. Certain Relationships and Related Transactions, and Director Independence " for details on our director independence. For information concerning the experience through which these individuals acquired the attributes required to be deemed financial experts, refer to the biographical information in this Item 10.

 ITEM 11. EXECUTIVE COMPENSATION

 COMPENSATION DISCUSSION AND ANALYSIS

 This Compensation Discussion and Analysis section provides information related to the administration of our executive compensation policies and programs. We believe we have historically taken a prudent and effective approach to executive compensation with practices aligned with the Finance Agency's guidance on FHLBank executive compensation.

 This section describes and analyzes our 2023 executive compensation program for:

 • the executive officer serving as CEO during 2023;

 • the executive officer serving as CFO during 2023; and

 • the three other most highly compensated executive officers who were serving as executive officers on December 31, 2023.

 These executive officers are collectively referred to as our NEOs.

 During 2023, we had certain changes to our executive team. On January 1, 2023, Ms. Jensen-Marren, formerly CFO, became CRCO. Effective January 17, 2023, Mr. Livingston became CFO.

 This Compensation Discussion and Analysis includes the following parts:

 CONTENTS

 Compensation Philosophy

 Elements of Executive Compensation

 Finance Agency Oversight - Executive Compensation

 Roles and Responsibilities of the Board of Directors, Compensation Committee and Management in Establishing Executive Compensation

 Analysis Tools the Compensation Committee Uses

 Compensation Decisions in 2023

 Benefits and Retirement Philosophy

 CEO Compensation Pay Ratio

 Potential Payments upon Termination or Change of Control

 Director Compensation

 Compensation Committee Report

 Compensation Philosophy

 Our compensation philosophy, practices, and principles are important to our business strategy. Our philosophy assists us in attracting, retaining, and engaging employees with the skills and talent we need to create and implement strategies critical to our long-term success, ensuring we bring value for our members. Our executive compensation practices provide a framework to ensure an appropriately balanced approach to compensation through a combination of base salary, benefits, and annual and deferred cash incentive awards. Although we refine our compensation programs as economic conditions and competitive practices change, we strive to maintain consistency in our philosophy and approach with respect to executive compensation.

 We believe our current employees and those individuals in our potential talent pool are highly marketable and can be attracted to opportunities across a broad spectrum of U.S. financial services businesses. Our competition for talent primarily includes FHLBanks, commercial banks, and other financial services companies, such as insurance companies.

 We have designed our executive compensation program to motivate our NEOs to achieve our objectives for delivering value to our members, as customers and as shareholders, without taking undue risk.

 Our executive compensation program is designed to do the following:

 i. Attract, motivate, reward, and retain the talent and skill sets important to run our business and execute our short- and long-term strategic objectives.

 ii. Link executive compensation to Bank performance while monitoring the Bank's exposure to risk.

 iii. Structure our total compensation package for NEOs so that it is competitive relative to market. Our competitive market primarily consists of FHLBanks, commercial banks, and other financial services companies. We consider total compensation to be competitive at the 50th percentile of the market data.

 iv. Align with the Bank's mission and culture.

 In 2023, we executed on our executive compensation philosophy to provide competitive compensation to our NEOs that was aligned to the achievement of business objectives and Bank performance.

 Elements of Executive Compensation

 Our executive compensation program is comprised of the following elements: (i) base salary, (ii) an EIP that includes a 50 percent annual cash award and a 50 percent deferral of the incentive award, (iii) retirement benefits, (iv) health and welfare benefits, (v) the potential for payments in the event of termination, (vi) limited perquisites, and (vii) other amounts as defined. The following discussion provides more detail for each of these elements.

 BASE SALARY

 Base salary is a fixed component of our NEOs' total compensation that is intended to provide a level of compensation necessary to attract and retain highly qualified executives. The Compensation Committee generally reviews the level of base salaries annually for all of our NEOs and approves and recommends to the Board of Directors adjustments to base salary for our President and CEO.

 Our President and CEO is the only NEO with an employment agreement with us that sets forth minimum base salary. This employment agreement provides that we shall initially pay our President and CEO an annualized base salary of not less than the amount set forth in the agreement. Base salary may only be adjusted upward based on an annual review by the Board of Directors and may not be adjusted downward unless such downward adjustment is part of a nondiscriminatory cost reduction plan applicable to our total compensation budget. Base salary for all other NEOs is established by the President and CEO. For additional information regarding base salary, see the section entitled " Base Salary Levels " in this Item 11.

 EXECUTIVE INCENTIVE PLAN

 In December 2022, the Compensation Committee approved the 2023 EIP, and in February 2023, approved the Bank-wide goal measures. In addition, we received a non-objection letter from the Finance Agency for our 2023 EIP in March 2023. The EIP includes an annual cash incentive and a deferred cash incentive. The Compensation Committee considers a variety of safety and soundness measures to determine the appropriate incentive payouts, such as (i) operational errors or omissions that result in material revisions to the financial results, information submitted to the Finance Agency, or data used to determine incentive payouts, (ii) untimely submission of information to the SEC, Office of Finance, or Finance Agency, (iii) failure to make sufficient progress, as determined by the Finance Agency, in the timely remediation of examination, monitoring, and other supervisory findings and matters requiring attention, (iv) failure to make sufficient progress in improving Finance Agency examination ratings, or (v) whether the Bank has sufficient capital to pay dividends and repurchase member stock. If one of the above occurs, the Compensation Committee will consider the facts and circumstances and reduce incentive awards commensurate with the materiality of the exception relative to our financial and operational performance and financial reporting responsibilities.

 Under the EIP, our NEOs are required to defer 50 percent of their total cash incentive for three years following the end of the performance plan period. The 2023 deferred opportunities are payable in 2027. Beginning in 2021, the deferred opportunities include a four percent interest rate, credited annually. All deferred opportunities, including interest, are subject to the Bank's sustained achievement of the safety and soundness measures described above and approvals by the Compensation Committee and Board of Directors. Prior to 2021, the deferred opportunities were also subject to the quarterly average of our MVCS. For more information on the calculation of deferred awards prior to 2021, refer to "Item 11. Executive Compensation — Elements of Executive Compensation" in our 2020 Form 10-K.

 The 2023 EIP provides that unless otherwise directed by the Compensation Committee, payments under the EIP shall be made in a lump sum through regular payroll distribution, typically within 75 days after the end of the calendar year for which the performance or deferral period is ended, but in any event by the end of the calendar year following the performance or deferral period.

 Under the EIP, the Compensation Committee may determine an NEO is not eligible to receive an incentive payout if the respective NEO (i) has not achieved a performance level of "meets expectations" or higher evaluation of overall performance during a performance period or deferred performance period, (ii) is subject to any disciplinary action or probationary status at the time of payout, or (iii) fails to comply with regulatory requirements or standards, internal control standards, professional standards or any internal standard, or fails to perform responsibilities assigned under our SBP.

 For additional information about our EIP, see " EIP Award Opportunities " and " EIP Performance Measures and Results " in this Item 11.

 RETIREMENT BENEFITS
 We have one qualified defined contribution benefit plan, the DC Plan. We also offer the BEP, a nonqualified retirement plan which includes a nonqualified defined contribution plan. The BEP allows the NEOs to receive amounts they would have been entitled to receive under the DC Plan had the plan not been subject to Internal Revenue Code contribution limitations.
 We previously participated in the DB Plan, a tax-qualified defined benefit pension plan. In August of 2016, our Board of Directors elected to freeze the DB Plan effective January 1, 2017. After the freeze, participants no longer accrued new benefits under the DB Plan. On May 2, 2023, we completed a purchase agreement with Principal Life Insurance Company pursuant to which we transferred to them the future benefit obligations and annuity administration for participants under the DB Plan. As such, we are no longer a party to the DB Plan. For additional information, refer to the purchase agreement set forth in " Item 15. Exhibits and Financial Statements Schedules."

 The table below shows which retirement plans each NEO participates in:

 NEO
 Principal Position
 Retirement Plans

 President and CEO
 DC Plan, BEP DC Plan

 CFO
 DC Plan, BEP DC Plan

 CBO
 DC Plan, BEP DC Plan

 CRCO
 DC Plan, BEP DC Plan

 Kevin T. Larkin1

 CIO
 DC Plan

 1 Mr. Larkin has previously participated in the BEP DC Plan; however, he did not contribute to the BEP DC Plan during 2023.

 For additional information about our retirement benefits, see " Benefits and Retirement Philosophy " in this Item 11.

 HEALTH AND WELFARE BENEFITS

 Our NEOs are eligible for the same medical, dental, life insurance, and other benefits available to our full-time employees.

 PAYMENTS IN THE EVENT OF TERMINATION

 Our President and CEO has an employment agreement with us, which provides for payments in the event of termination based on certain triggering events. All other NEOs are subject to the Bank's Executive Severance Plan, set forth in " Item 15. Exhibits and Financial Statements Schedules." For additional details, see " Potential Payments Upon Termination or Change of Control " in this Item 11.

 PERQUISITES

 Our NEOs are eligible to receive perquisites as a convenience associated with their overall duties and responsibilities. Our President and CEO was eligible to receive a monthly car allowance. All NEOs generally qualify for certain other perquisites, such as financial planning assistance, mobile technology allowance, and/or relocation reimbursements. For additional details, see " Components of All Other Compensation " in this Item 11.

 OTHER

 Our NEOs may be eligible to receive a hiring bonus and other benefits. Ms. Williams received an additional contribution to her BEP DC Plan in 2021 after the completion of her first year of employment. Mr. Livingston received a hiring bonus in 2023. Mr. Osborn and Mr. Larkin each received a bonus in 2021 after the completion of their first year of employment.

 Finance Agency Oversight - Executive Compensation

 In addition to our internal processes, the Finance Agency has oversight authority over our executive compensation. The FHLBanks provide all compensation actions affecting their NEOs to the Finance Agency for review and non-objection.

 Applicable rules also establish the following principles for executive compensation:

 i.executive compensation must be reasonable and comparable to that offered to executives in similar positions at comparable financial institutions;

 ii. executive compensation should be consistent with sound risk management and preservation of the par value of the FHLBank's capital stock;

 iii. a significant percentage of an executive's incentive-based compensation should be tied to longer-term performance and outcome indicators and be deferred and made contingent upon performance over several years; and

 iv. the Board of Directors should promote accountability and transparency in the process of setting compensation.

 Roles and Responsibilities of the Board of Directors, Compensation Committee and Management in Establishing Executive Compensation

 Merit increases are based upon an evaluation of an NEO's overall performance. Because of our size and the number of NEOs involved, our President and CEO recommends to the Compensation Committee merit increases for the other NEOs. The Board of Directors completes an evaluation of our President and CEO's performance and the Compensation Committee recommends compensation for our President and CEO to the Board of Directors for approval. The Compensation Committee and our President and CEO consider overall performance in key focus areas aligned with our SBP for the year, and review NEO compensation relative to the market, in analyzing merit increases. Any employment or severance agreement for our President and CEO is also approved by the Board of Directors.

 Throughout the year, the Board of Directors reviews our Bank-wide goals and achievement levels. When final Bank performance metrics for a calendar year are determined, the Compensation Committee reviews the performance results to determine the level of performance that has been achieved for purposes of making incentive compensation decisions for our NEOs. Our Compensation Committee approves the Bank-wide goals framework and approves the incentive awards comprised of Bank-wide goals.

 Analysis Tools the Compensation Committee Uses

 For 2023, the Compensation Committee engaged McLagan Partners to conduct an assessment and make recommendations regarding compensation for our executives based on the results of their competitive analysis. This included identification of sources of market data for purposes of the competitive compensation assessments of base pay and annual and deferred cash incentives. This analysis compared the compensation of our executives utilizing the following sources:

 • Public disclosures (e.g., proxy statements and annual reports) for the top five highest paid executives at banks with assets between $10 billion and $20 billion;

 • the FHLBank System; and

 • Commercial banks included in the McLagan assessment.

 The primary market comparison for their assessment was commercial banks from the McLagan data and the other FHLBanks. This was used to determine the market median for each position, which the Compensation Committee and President and CEO used to inform themselves regarding trends in compensation practices and as a comparison check against general market data. When using FHLBank System comparisons, our executives are compared to the same position within the FHLBanks. When using commercial bank comparisons, our executive positions are compared to roles with similar overall responsibility.

 Compensation Decisions in 2023

 How we compensate our NEOs sets the tone for how we administer pay throughout the entire Bank. For 2023, our Compensation Committee considered numerous factors (including those previously discussed) before deciding on the appropriate total compensation for our NEOs, in the context of the current business, operating, and regulatory environment, which are more fully described in the following narrative.

 BASE SALARY LEVELS

 The Compensation Committee followed its historical practice of adjusting base salaries after a review of individual performance and current compensation of our NEOs. The Compensation Committee determined that an increase in our President and CEO's base salary for 2023 was appropriate and, based on the President and CEO's recommendations, that increases for the other NEOs were appropriate based on (i) each NEOs' individual performance, contributions to the Bank, length of time in position, and changes in responsibilities, if applicable, and (ii) a review of the McLagan Partners' executive compensation survey data. The NEOs' base salaries, presented in the " Summary Compensation Table " in this Item 11, become effective January 1st of each year, unless described otherwise.

 EIP AWARD OPPORTUNITIES
 EIP pay targets established for our NEOs take into consideration total compensation practices (base salary and incentives) of the survey data reviewed. Under the EIP, our NEOs are assigned target award opportunities, stated as percentages of base salary. The target award opportunities are determined based on market data and level of responsibility and are approved by our Compensation Committee.

 Awards are paid to our NEOs based upon the achievement level of Bank-wide goals as determined by the Compensation Committee. In addition, 50 percent of the incentive award for NEOs is deferred for three years following the end of the performance period, and subject to the Bank's sustained achievement of the applicable safety and soundness measures, as defined in the EIP, and the Compensation Committee's and Board of Directors' approvals at the time of payment.

 The annual and deferred EIP award opportunities for our NEOs in 2023 were a percentage of base salary as follows:

 Title
 Incentive
Plan
 Threshold
 Target
 Maximum

 President and CEO
 Annual
 25.0%
 42.5%
 50.0%

 Deferred
 25.0%
 42.5%
 50.0%

 Other NEOs
 Annual
 20.0%
 30.0%
 40.0%

 Deferred
 20.0%
 30.0%
 40.0%

 The following table provides estimated potential payouts under our EIP:

 2023 Grants of Plan-Based Awards

 Estimated Future Payouts Under
 Non-Equity Incentive Plan Awards1

 NEO
 Threshold
 Target
 Maximum

 $
 525,283
 $
 892,981
 $
 1,050,566

 162,327
 243,490
 324,654

 186,000
 279,000
 372,000

 170,000
 255,000
 340,000

 170,000
 255,000
 340,000

 1 Amounts consist of the annual incentive (50 percent of total incentive) and deferred incentive (50 percent of total incentive). The total deferred award payout may include four percent interest, credited annually, which is not included in the table above. All deferred incentive and interest payments are subject to the Bank's sustained achievement of the 2023 safety and soundness measures and Compensation Committee's and Board of Directors' approvals at the time of payment.

 EIP PERFORMANCE MEASURES AND RESULTS

 In December 2022, the Compensation Committee approved the Bank-wide goals framework for 2023. In February 2023, the Compensation Committee approved the Bank-wide goal measures for 2023, which are summarized below:

 i. Improvement of Advance Penetration is measured by the dollar amount of advance usage relative to each member's total assets in the Bank's district. The goal will be measured in comparison to the other Federal Home Loan Banks.

 ii. Core Product Utilization is measured by the utilization of core products by all Bank members, including all advances, standby letters of credit, and MPF (including on balance sheet and off balance sheet).

 iii. Reduction of Operational Risk is measured by the completion of projects and initiatives in 2023 according to scope, timelines and success measures approved by management.

 iv. Spread Between AROCS and SOFR While Maintaining Market Value Sensitivity within Limits is a measure of profitability in which GAAP net income is adjusted for certain non-routine or unpredictable items. For additional information on our adjusted earnings measure, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Executive Overview — Adjusted Earnings."

 v. DEI is a measure of our progress on DEI initiatives.

 The Bank's EIP design has historically included Bank-wide goals. This plan design has resulted in reasonable payouts to our NEOs. We believe this plan design has accomplished and driven the behaviors of all employees, including our NEOs, in accordance with our Board of Directors' expectations.

 For 2023, NEO incentive awards are tied entirely to the achievement of Bank-wide goals, with weighting determined by the Compensation Committee based upon the need for our NEOs to focus on certain strategic imperatives and/or strategies contained in our SBP.

 When establishing the Bank-wide goals, the Compensation Committee and the Board of Directors anticipated that we would reasonably achieve the target level of performance aligned with objectives contained in our SBP. The maximum level provides a goal that is anticipated to be more challenging to reach, based on the previous year's performance results and current market trends and conditions. The Bank-wide goal incentive awards are paid based on the actual results we achieve. The weightings for each goal area are generally aligned with our SBP and areas of key focus. The 2023 to 2025 SBP was approved by the Board of Directors in December 2022.

 On a regular basis during 2023, management provided updates to the Board of Directors on the status of performance relative to Bank-wide goals. The following table provides the 2023 EIP Bank-wide goals for our NEOs as well as our performance results, which were approved by the Board of Directors in February 2024:

 Bank-wide Goals
 2023 Results

 Threshold
 Target
 Maximum

 Improvement of Advance Penetration (20% Weight)
 6th in the FHLBank System

 9th in the FHLBank System
 7th in the FHLBank System
 5th in the FHLBank System

 Core Product Utilization (10% Weight)

 %
 %
 %
 %

 Reduction of Operational Risk (30% Weight)

 5/7

 2/7
 4/7
 6/7

 Spread Between AROCS and SOFR While Maintaining Market Value Sensitivity within Limits (30% Weight)

 9.16
 %
 5.05
 %
 6.05
 %
 7.05
 %

 DEI (10% Weight)

 5/5
 2/5
 3/5
 5/5

 The overall weighted achievement of the Bank-wide goals was 113.24 percent of target for our President and CEO and 125.00 percent of target for all other NEOs. Based on these results, the Compensation Committee awarded each NEO the amounts identified in the following table. We received a non-objection letter from the Finance Agency for the Bank-wide Performance awards in February 2024:

 NEO
 Annual Incentive1

 Deferred Incentive1

 Interest Earned on Deferred Incentive2

 Total Bank-wide Performance Award

 $
 505,606
 $
 505,606
 $
 33,080
 $
 1,044,292

 152,181
 152,181
 —
 304,362

 174,375
 174,375
 12,221
 360,971

 10,077
 328,827

 9,851
 328,601

 1 Bank-wide performance award consists of an annual incentive (50 percent of total incentive), paid in 2024 and a deferred incentive (50 percent of total incentive). The deferred incentive amounts were earned as of December 31, 2023, but will not be paid until 2027, and remain subject to the Bank's sustained achievement of the 2023 safety and soundness measures and Compensation Committee's and Board of Directors' approvals at the time of payment.
 2 Represents four percent compounded interest earned on the 2021 deferred incentive, which will be paid in 2025, and four percent interest earned on the 2022 deferred incentive, which will be paid in 2026, subject to the Bank's sustained achievement of all applicable safety and soundness measures and Compensation Committee's and Board of Directors' approvals at the time of payment.

 The following table illustrates for each NEO the maximum amount of unpaid deferred awards as of December 31, 2023 distributable under the EIP for 2020, 2021, 2022, and 2023, assuming the Bank achieved all applicable safety and soundness measures and no additional discretion is exercised by the Board of Directors:

 NEO
 Amount Distributable in 20241

 Amount Distributable in 20252

 Amount Distributable in 20262

 Amount Distributable in 20272

 Total

 $
 404,713
 $
 393,480
 $
 521,052
 $
 568,738
 $
 1,887,983

 —
 —
 —
 171,183
 171,183

 68,419
 145,485
 192,357
 196,148
 602,409

 131,364
 120,407
 158,159
 179,275
 589,205

 98,724
 116,354
 156,023
 179,275
 550,376

 1 Represents the 2020 deferred incentive awards payable in 2024, and includes the maximum MVCS multiplier of 110 percent.
 2 Represents the 2021, 2022, and 2023 deferred incentive awards payable in 2025, 2026, and 2027, and includes four percent interest, compounded annually, over the three-year deferral period.

 SUMMARY COMPENSATION TABLE

 The following table provides compensation information for our NEOs, as applicable, for the years ended December 31, 2023, 2022, and 2021:

 Summary Compensation Table

 Name and Principal Position
 Year
 Salary
 Bonus
 Non-Equity Incentive Plan Compensation1

 Change in Pension Value and Non-Qualified Deferred Compensation Earnings2

 All Other
 Compensation3

 Total

 Kristina K. Williams4

 2023
 $
 1,050,566
 $
 —
 $
 1,044,292
 $
 —
 $
 145,302
 $
 2,240,160

 President and CEO
 2022
 955,060
 —
 940,419
 —
 94,851
 1,990,330

 2021
 901,000
 —
 699,604
 —
 623,518
 2,224,122

 James G. Livingston5

 2023
 405,817
 150,000
 304,362
 —
 233,430
 1,093,609

 CFO

 William W. Osborn6

 2023
 465,000
 —
 360,971
 —
 65,278
 891,249

 CBO
 2022
 450,000
 —
 347,182
 —
 53,856
 851,038

 2021
 425,000
 50,000
 258,672
 —
 41,375
 775,047

 2023
 425,000
 —
 328,827
 —
 43,835
 797,662

 CRCO

 2022
 370,000
 —
 285,489
 —
 30,500
 685,989

 2021
 351,740
 —
 214,084
 —
 29,000
 594,824

 Kevin T. Larkin6

 2023
 425,000
 —
 328,601
 —
 36,558
 790,159

 CIO
 2022
 365,000
 —
 281,545
 —
 39,038
 685,583

 2021
 339,900
 125,000
 206,876
 —
 31,000
 702,776

 1 For 2023, represents incentive compensation earned in 2023, including annual incentive (50 percent of total incentive), payable in 2024, and deferred incentive (50 percent of total incentive), payable in 2027. In addition, incentive compensation includes four percent compounded interest earned on the 2021 deferred incentive, and four percent interest earned on the 2022 deferred incentive, as applicable. Both the deferred incentive and interest remain subject to the Bank's sustained achievement of all applicable safety and soundness measures and Compensation Committee's and Board of Directors' approvals at the time of payment.

 2 All earnings on non-qualified deferred compensation are at the market rate and therefore are not required to be included in this table.

 3 The components of this column for 2023 are provided in the " Components of All Other Compensation " table within this Item 11.

 4 Ms. Williams received an additional BEP DC Plan contribution of $525,000 in 2021 following the completion of one year of employment with the Bank, which is reflected in the "All Other Compensation" column.

 5 Mr. Livingston's 2023 salary, non-equity incentive, and all other compensation are based on the period of his employment with the Bank from January 17, 2023 through December 31, 2023. Mr. Livingston also received a one-time bonus in 2023 related to the start of his employment with the Bank.

 6 Mr. Osborn and Mr. Larkin each received a one-time bonus in 2021 following the completion of one year of employment with the Bank.

 COMPONENTS OF ALL OTHER COMPENSATION

 Bank Contributions to Vested Defined Contribution Plans

 NEO
 DC Plan
 BEP DC Plan
 Perquisites and Other Personal Benefits1

 Total

 $
 33,000
 $
 102,462
 $
 9,840
 $
 145,302

 21,700
 18,456
 193,274
 233,430

 30,141
 34,297
 65,278

 26,842
 16,153
 43,835

 Kevin T. Larkin2

 33,000
 —
 3,558
 36,558

 1 Perquisites and other personal benefits for Mr. Livingston included relocation expenses of $192,469 and a mobile technology allowance of $805.

 2 Mr. Larkin has previously participated in the BEP DC Plan; however, he did not contribute to the BEP DC Plan during 2023.

 Benefits and Retirement Philosophy

 We consider benefits to be an important aspect of our ability to attract and retain qualified employees and therefore we design our programs to be competitive with financial services businesses. The following is a summary of the retirement benefits that NEOs were eligible to receive.

 QUALIFIED DEFINED CONTRIBUTION PLAN

 All employees who have met the eligibility requirements may elect to participate in our DC Plan, a retirement savings plan qualified under the Internal Revenue Code. Employees (including NEOs) may receive a match on employee contributions at 100 percent up to six percent of eligible compensation. Employees are eligible for the match immediately and all matching contributions are immediately 100 percent vested. Effective January 1, 2017, all employees also began receiving a discretionary Bank contribution of eligible compensation (generally four percent) to the DC Plan following the end of each calendar year. Vesting in the discretionary contribution is 100 percent at the completion of three years of service.

 NON-QUALIFIED DEFINED CONTRIBUTION PLAN

 Our NEOs are eligible to participate in the BEP DC Plan, a non-qualified defined contribution plan that is similar to the DC Plan. The BEP DC Plan ensures, among other things, that participants whose benefits under the DC Plan would otherwise be restricted by certain provisions of the Internal Revenue Code are able to make elective pre-tax deferrals and to receive a matching contribution relating to such deferrals. The investment returns credited to a participating NEO's account are at the market rate for the NEO's selected investment. The selections may be altered at any time. Aggregate earnings are calculated by subtracting the 2022 year-end balance from the 2023 year-end balance, less the NEO's and Bank's contributions. The Bank matches 100 percent of NEOs' contributions up to six percent of salary for salary and annual incentive deferrals. Effective January 1, 2021, participants also began receiving a discretionary Bank contribution (generally four percent) of eligible compensation above the limits set by the Internal Revenue Code into the BEP DC Plan following the end of each calendar year. In addition, we may elect to provide a discretionary contribution to an executive upon approval by the Board of Directors and subject to non-objection by the Finance Agency.

 2023 Non-Qualified Deferred Compensation Table

 NEO
 Executive
 Contributions
 In Last FY1

 Bank
 Contributions
 In Last FY2

 Aggregate
 Earnings (Losses)
 In Last FY3

 Aggregate Withdrawals/Distributions In Last FY
 Aggregate
 At Last FYE4

 $
 105,057
 $
 102,462
 $
 120,887
 $
 —
 $
 2,185,498

 257,047
 18,456
 46,597
 (12,796)
 391,402

 51,150
 34,297
 27,435
 —
 168,456

 8,500
 16,153
 —
 8,824

 Kevin T. Larkin5

 —
 —
 1,561
 —
 9,835

 1 Amounts represent NEOs' contributions for 2023, which include the base salary deferral into the BEP during 2023 as well as the amount of the 2023 incentive the NEO deferred into the BEP in 2024. Amounts shown are included in both the "Salary" and "Non-Equity Incentive" columns of the " Summary Compensation Table " in this Item 11.

 2 Amounts represent the Bank's contributions for 2023, which include the base salary match, the 2023 incentive match, and a discretionary contribution. Amounts shown are included in the "All Other Compensation" column of the " Summary Compensation Table " in this Item 11.

 3 All earnings on non-qualified deferred compensation are at the market rate. As a result, these amounts are not shown in the " Summary Compensation Table " in this Item 11.

 4 Amounts represent the NEOs' balances on December 31, 2023, and do not include contributions deposited into the NEOs' account subsequent to the last fiscal year-end. Ms. Williams' aggregate balance includes $1,957,956 of contributions reported in a prior year "Summary Compensation Table". Mr. Osborn's aggregate balance includes $102,652 of contributions reported in a prior year "Summary Compensation Table". Mr. Larkin's aggregate balance includes $8,607 of contributions reported in a prior year "Summary Compensation Table". Mr. Livingston's aggregate balance also includes contributions from when he served on the Bank's Board of Directors.

 5 Mr. Larkin has previously participated in the BEP DC Plan; however, he did not contribute to the BEP DC Plan during 2023.

 CEO Compensation Pay Ratio

 As required by Item 402(u) of Regulation S-K, we are providing the following information:

 For 2023, our last completed fiscal year:

 i. The median of the annual total compensation of all employees of the Bank (other than Ms. Williams), was $142,436; and
 ii. The annual total compensation of Ms. Williams, our President and CEO, was $2,240,160.

 Based on this information, the ratio for 2023 of the annual total compensation of our President and CEO to the median of the annual total compensation of all employees is 16 to 1.

 We identified our median employee and calculated our pay ratio in accordance with SEC rules and methods for disclosure as described below.

 i. SEC rules allow us to identify our median employee once every three years unless there has been a change in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change in our pay ratio disclosure. We last identified our median employee in 2021; however, as a result of changes in our median employee's position and compensation, we were required to identify a new median employee in 2023.

 ii. We identified our employee population as of December 31, 2023, including any full-time, part-time, temporary, and seasonal employees employed on that date. This date was selected because it aligned with the calendar and fiscal year end and allowed us to identify employees in a reasonably efficient manner.

 iii. To find our median employee, excluding our President and CEO, we reviewed the 2023 annual salary for each employee that was employed as of December 31, 2023, and ranked all employees by that consistently applied compensation measure. In making this determination, we annualized the salary of full-time and part-time employees who were employed on December 31, 2023, but did not work for us the entire year. No full-time equivalent adjustments were made for part-time employees. Using this population, we then identified the initial median employee, and the next five employees lower and higher than that initial median employee, resulting in a total pool of 11 employees. We then calculated the 2023 total compensation, annualized if applicable, for each of these 11 employees in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K and in the same manner as for our President and CEO. We ranked the 2023 total compensation for each of these 11 employees, and identified our median employee.

 iv. With respect to the annual total compensation of our President and CEO, we used the 2023 amount reported in the "Total" column of our " Summary Compensation Table " in this Item 11.

 Potential Payments Upon Termination or Change of Control

 The definitions below are applicable to our President and CEO, who is the only NEO with an employment agreement. For purposes of the following discussion regarding potential payments upon termination or change of control, the following are the definitions of "Cause," "Good Reason," "Disability," and "Change of Control."

 "Cause" generally means a felony conviction, a willful act of misconduct that materially impairs the Bank's business or goodwill or causes material damage, a willful breach of certain representations in the employment agreement, a willful and continued failure to perform material duties, a willful material violation of the Bank's Code of Ethics, or receipt by the Bank of any regulatory order that the NEO be terminated or the NEO's authority be materially reduced.

 "Good Reason" generally means a reduction in the NEO's base salary or incentive plan bonus opportunity, unless as part of a nondiscriminatory cost reduction applicable to the Bank's total compensation budget; a reduction in the NEO's corporate officer title, a material change by the Bank in the geographic location in which the NEO is required to perform services, or a material breach of the employment agreement, as applicable, by the Bank.

 "Disability" means the NEO is receiving benefits under a disability plan sponsored by the Bank for a period of not less than three months by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months and which has rendered the NEO incapable of performing their duties.

 "Change of Control" means a merger, reorganization, or consolidation of the Bank with or into another FHLBank or other entity, a sale or transfer of all or substantially all of the business or assets of the Bank to another FHLBank or other entity, the purchase by the Bank or transfer to the Bank of all or substantially all of the business or assets of another FHLBank, or the liquidation of the Bank.

 All NEOs other than our President and CEO are subject to the Bank's Executive Severance Plan and other Bank policies. Copies of the employment agreement for our President and CEO, as well as the Executive Severance Plan, are set forth in " Item 15. Exhibits and Financial Statements Schedules ", and summarized below.

 TERMINATION FOR CAUSE OR WITHOUT GOOD REASON

 If an NEO's employment is terminated by us for Cause or by the NEO without Good Reason, the NEO may be entitled to the following:

 i. Base salary accrued through the date of termination;

 ii. Accrued but unpaid incentive plan award(s) earned in a year prior to the year of termination and due to be paid in the year in which termination occurs;

 iii. Accrued and earned vacation through the date of termination; and/or

 iv. All other vested benefits under the terms of our employee benefit plans, subject to the terms of such plans.

 Assuming one or more of the previously discussed events triggering receipt of termination payments had occurred as of December 31, 2023, the total amounts payable to our NEOs are outlined in the table below:

 Termination For Cause or Without Good Reason

 NEO
 Severance Pay1

 Annual Incentive2

 Deferred Incentive2

 Vacation Payout3

 Total

 $
 —
 $
 —
 $
 —
 $
 $

 —
 —
 —
 2,043
 2,043

 —
 —
 —

 —
 —
 —
 6,538
 6,538

 —
 —
 —
 2,861
 2,861

 1 Termination under these circumstances would not result in severance payments from the Bank but would result in payment of salary earned through December 31, 2023, as reflected under the "Salary" column of the " Summary Compensation Table " in this Item 11.

 2 Termination under these circumstances would not result in an incentive award payment since the award would have already been received as of December 31, 2023.

 3 This amount represents accrued but unused vacation and would be paid in a lump sum upon termination. All NEOs are eligible to receive a payout in connection with unused vacation according to Bank policies.

 TERMINATION WITHOUT CAUSE, FOR GOOD REASON, OR FOLLOWING A CHANGE IN CONTROL

 If, however, the NEO's employment is terminated by us without Cause, by the NEO for Good Reason, or following a Change in Control, in addition to the payouts previously mentioned, the NEO may be entitled to the following:

 i. Two times the annual base salary in effect on the date of termination for the President and CEO, or, in the case that the termination occurs within 24 months following a Change of Control, 2.99 times the annual base salary in effect on the date of termination for the President and CEO;

 ii. Minimum of 26 weeks of base salary for NEOs other than the President and CEO;

 iii. One times the targeted non-deferred EIP award in effect for the calendar year in which the date of termination occurs, or, in the case that the termination occurs within 24 months following a Change of Control, 2.99 times the targeted non-deferred plan award in effect for the calendar year in which the date of termination occurs for the President and CEO;

 iv. The EIP award for the calendar year in which the date of termination occurs for the President and CEO and prorated for the portion of the calendar year in which the President and CEO was employed;

 v. The accrued but unpaid incentive plan awards covering periods prior to the one in which the President and CEO's employment was terminated, calculated in accordance with the terms of the EIP; and

 vi. Any benefits mandated under any applicable health care continuation laws, provided that the Bank will continue paying its portion of the medical and/or dental insurance premiums for the President and CEO for the one-year period following the date of termination, and medical benefits continuation for six months following the date of termination for all other NEOs.

 Payments of all accrued amounts, other than EIP award amounts, shall generally be paid in a lump sum within ten days or no later than the first payroll date on or after the NEO's date of termination. Payment of all EIP award amounts, if any, shall be paid as otherwise provided under the EIP.

 Assuming one or more of the previously discussed events triggering receipt of termination payments had occurred as of December 31, 2023, the total amounts payable to our NEOs are outlined in the table below:

 Termination Without Cause or For Good Reason

 NEO
 Severance Pay
 Annual Incentive
 Deferred Incentive
 Vacation Payout1

 Total

 $
 2,101,132
 $
 952,097
 $
 1,887,983
 $
 $
 4,995,761

 —
 —
 2,043
 214,543

 232,500
 —
 —
 268,269

 —
 —
 6,538
 219,038

 —
 —
 2,861
 215,361

 1 This amount represents accrued but unused vacation and would be paid in a lump sum upon termination. All NEOs are eligible to receive a payout in connection with unused vacation in accordance with the Bank's Executive Severance Plan.

 Assuming one or more of the previously discussed events triggering receipt of termination payments had occurred as of December 31, 2023, the total amounts payable to our NEOs are outlined in the table below:

 Termination Following Change in Control

 NEO
 Severance Pay
 Annual Incentive
 Deferred Incentive
 Vacation Payout1

 Total

 $
 3,141,192
 $
 1,840,613
 $
 1,887,983
 $
 $
 6,924,337

 —
 —
 2,043
 214,543

 232,500
 —
 —
 268,269

 —
 —
 6,538
 219,038

 —
 —
 2,861
 215,361

 1 This amount represents accrued but unused vacation and would be paid in a lump sum upon termination. All NEOs are eligible to receive a payout in connection with unused vacation in accordance with the Bank's Executive Severance Plan.

 TERMINATION FOR DEATH, DISABILITY, OR RETIREMENT

 If the NEO's employment is terminated due to death, disability, or qualifying retirement, in addition to the payouts previously mentioned under the section entitled "Termination For Cause or Without Good Reason," the NEO may be entitled to the following:

 i. The EIP award for the calendar year in which the date of termination occurs and prorated for the portion of the calendar year in which the NEO was employed;

 ii. To the extent not already paid to the NEO, the accrued but unpaid incentive plan awards covering periods prior to the one in which the NEO's employment was terminated; and

 iii. Other coverage continuation rights that are available to such employees upon death, disability, or retirement, as provided for under the terms of such plans.

 Payment of all accrued amounts, other than EIP award amounts, shall be paid in a lump sum within ten days or no later than the first payroll date on or after the NEO's date of termination. Payment of all EIP award amounts, if any, shall be paid as otherwise provided under the applicable EIP.

 Assuming one or more of the previously discussed events for the receipt of termination payments had occurred as of December 31, 2023, the total amounts payable to our NEOs are outlined in the table below:

 Termination by Death, Disability, or Retirement

 NEO
 Severance Pay
 Annual Incentive
 Deferred Incentive
 Vacation Payout1

 Total

 $
 —
 $
 505,606
 $
 1,887,983
 $
 $
 2,448,138

 —
 152,181
 171,183
 2,043
 325,407

 —
 174,375
 602,409
 812,553

 —
 589,205
 6,538
 755,118

 —
 550,376
 2,861
 712,612

 1 This amount represents accrued but unused vacation and would be paid in a lump sum upon termination. All NEOs are eligible to receive the amounts disclosed in accordance with Bank policies.

 EMPLOYMENT AGREEMENT BETWEEN KRISTINA K. WILLIAMS AND THE BANK

 The Bank entered into an employment agreement with Kristina K. Williams, effective January 20, 2020, in order to establish her duties and compensation and to provide for her employment as President and CEO of the Bank.

 The employment agreement provides that the Bank would initially pay Ms. Williams a base salary of $850,000, subject to adjustment as described in the employment agreement.

 Subject to review by the Finance Agency, Ms. Williams' incentive target will generally not be set lower than 85 percent of her base salary. The Bank paid, or reimbursed Ms. Williams for, all reasonable relocation expenses incurred by Ms. Williams in relocation to the Des Moines area up to the maximum of $250,000. Ms. Williams is also eligible for certain perquisites, including a car allowance in the amount of $750 per month.

 Ms. Williams' employment agreement provides that:

 • the Bank or Ms. Williams may terminate employment for any reason (other than Good Reason or Cause) following 60 days' written notice to the other party;

 • the Bank may terminate for Cause immediately following written notice to Ms. Williams; and

 • Ms. Williams may terminate for Good Reason following written notice to the Bank;

 in each case, in accordance with the procedures set forth in the employment agreement.

 Amounts payable under the employment agreement are subject to reduction in the event the amounts constitute an "excess parachute payment" under Section 280G of the Internal Revenue Code.

 Termination for Cause or Without Good Reason

 If Ms. Williams' employment is terminated by the Bank for Cause or by Ms. Williams without Good Reason, the employment agreement entitles Ms. Williams to the benefits set forth under the heading "Termination for Cause or Without Good Reason."

 Termination Without Cause, for Good Reason, Following a Change of Control, or Within a Specified Period of Time Following the Effective Date of the Employment Agreement

 If Ms. Williams' employment is terminated by the Bank without Cause or by Ms. Williams for Good Reason, in addition to the payouts previously mentioned under "Termination for Cause or Without Good Reason," the employment agreement entitles Ms. Williams to additional amounts, including the benefits set forth under the heading "Termination without Cause, for Good Reason, or following a Change in Control."

 Termination for Death, Disability, or Retirement

 If Ms. Williams' employment is terminated due to death, disability, or qualifying retirement, in addition to the payouts described in the section entitled "Termination for Cause or Without Good Reason," she would also be entitled to the benefits set forth under the heading "Termination for Death, Disability or Retirement."

 Director Compensation

 During 2023, the Board of Directors held 12 board meetings and 61 committee meetings. Pursuant to our Director Fee Policy, Directors receive one quarter of the annual compensation following the end of each calendar quarter. If it is determined at the end of the calendar year that a Director has attended less than 75 percent of the meetings they were required to attend during the year, the Director will not receive the fourth quarter payment for such calendar year.

 Directors are expected to attend all Board meetings and meetings of the Committees on which they serve, and to remain engaged and actively participate in all meetings. In addition to our right to withhold fourth quarter annual compensation from a Director, the Board of Directors directs the Corporate Secretary to make any other appropriate adjustments in the payments to any Director who regularly fails to attend Board meetings or meetings of Committees on which the Director serves, or who consistently demonstrates a lack of participation in or preparation for such meetings, to ensure that no Director is paid fees that do not reflect that Director's performance of his/her duties. To assist the Board in making such determinations, the Corporate Secretary will, on a quarterly basis and prior to payment of the most recently completed quarter's Director fees, review the attendance of each Director during the quarter and raise any attendance issues identified with the Board Chair. In the event the potential issue involves the Board Chair, the Corporate Secretary will raise such issue with the Board Vice Chair.

 Directors are eligible to participate in the Bank's Deferral Plan for Directors. Under this plan, directors may elect to defer all or a portion of their directors' fees. See the Bank's Deferral Plan for Directors set forth in " Item 15. Exhibits and Financial Statements Schedules ", for additional information.

 The total expenses paid on behalf of the Board of Directors for travel and other reimbursed expenses for 2023 was $353 thousand and annual compensation paid to the Board of Directors, by position, for 2023 was as follows:

 Board of Director Position
 2023

 Chair
 $
 155,000

 Vice Chair
 140,000

 Audit, Risk and Compliance, and Compensation Committee Chairs

 135,000

 All Other Committee Chairs

 All Other Directors

 The following table sets forth each Director's compensation for the year ended December 31, 2023:

 Director Compensation

 Director Name
 Fees Earned Or
 Paid In Cash

 Ellen Z. Lamale (Chair)
 $
 155,000

 Karl A. Bollingberg (Vice Chair)
 140,000

 Ruth B. Bennett
 135,000

 Steven L. Bumann

 Cleon P. Butterfield

 Douglas L. DeFries

 Kim R. DeVore

 Edward A. Garding

 Chris D. Grimm

 James W. Hunt

 Amy K. Johnson

 Jon M. Jones

 Teresa J. Keegan
 135,000

 Joe R. Kesler

 John A. Klebba
 135,000

 Wan-Chong Kung

 Russell J. Lau

 Lauren M. MacVay

 Elsie M. Meeks

 Jason A. Meyerhoeffer

 Siva G. Narendra

 Carol K. Nelson

 The Compensation Committee approved the Director Fee Policy for 2024. This policy is listed as an exhibit to this annual report on Form 10-K. Refer to " Item 15. Exhibits and Financial Statement Schedules " for additional information.

 Compensation Committee Report

 The Compensation Committee reviewed and discussed the 2023 Compensation Discussion and Analysis set forth in Item 11 with management. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this annual report on Form 10-K. The Compensation Committee includes the following individuals:

 Compensation Committee

 Douglas L. DeFries (Chair)

 Jon M. Jones (Vice Chair)

 Amy K. Johnson

 Elsie M. Meeks

 Carol K. Nelson

 Robert J. Vogel

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 The following table presents members (or combination of members within the same holding company) holding five percent or more of our outstanding capital stock at February 29, 2024 (shares in thousands):

 Name
 Address
 City
 State
 Shares of Capital Stock
 % of Total Capital Stock

 Wells Fargo Bank, N.A.
 101 N. Phillips Ave
 Sioux Falls
 SD
 16,335
 24.5
 %

 Superior Guaranty Insurance Company1

 76 Saint Paul St.
 Burlington
 VT
 0.1

 16,390
 24.6

 All others

 50,345
 75.4

 Total capital stock

 66,735
 100.0
 %

 1 Superior Guaranty Insurance Company is an affiliate of Wells Fargo Bank, N.A.

 Additionally, due to the fact that a majority of our Board of Directors is nominated and elected from our membership, these member directors are officers or directors of member institutions that own our capital stock. The following table presents total outstanding capital stock owned by those members who had an officer or director serving on our Board of Directors at February 29, 2024 (shares in thousands):

 Name
 Address
 City
 State
 Shares of Capital Stock
 % of Total Capital Stock

 Bank of Utah
 2605 Washington Blvd.
 Ogden
 UT
 0.15

 BankWest, Inc.
 420 S. Pierre St.
 Pierre
 SD
 0.13

 Northwest Bank

 1607 W. 18th Street

 Spencer

 IA

 0.10

 First Federal Savings Bank of Twin Falls
 383 Shoshone Street N
 Twin Falls
 ID
 0.09

 OnPoint Community Credit Union
 2701 N.W. Vaughn St.
 Portland
 OR
 0.08

 First Montana Bank
 201 N Higgins Ave
 Missoula
 MT
 0.06

 Cornerstone Bank
 2280 45th Street S
 Fargo
 ND
 0.04

 Finance Factors, Ltd
 1164 Bishop St.
 Honolulu
 HI
 0.04

 True North Federal Credit Union
 2777 Postal Way
 Juneau
 AK
 0.01

 Legends Bank
 200 E Main St.
 Linn
 MO
 0.01

 New Market Bank

 101 Old Town Road

 Elko New Market

 MN
 0.01

 Jonah Bank of Wyoming
 777 W. 1st Street
 Casper
 WY
 *

 Washington Business Bank
 223 5th Ave. SE
 Olympia
 WA
 *

 0.72

 All others

 66,252
 99.28

 Total capital stock

 66,735
 100.00
 %

 * Amount is less than 0.01 percent.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 TRANSACTIONS WITH RELATED PERSONS

 The Bank is a cooperative. This means the Bank is owned by its customers, whom the Bank calls members. As a condition of membership in the Bank, all members must purchase and maintain membership capital stock based on a percentage of their total assets, subject to a minimum and maximum amount, as of the preceding December 31st. Each member is also required to purchase and maintain activity-based capital stock to support certain business activities with the Bank. All transactions with stockholders are entered into in the ordinary course of business.

 In the normal course of business, the Bank extends credit to its members whose directors and officers serve as Bank directors (Directors' Financial Institutions). Finance Agency regulations require that transactions with Directors' Financial Institutions be made on the same terms and conditions as those with any other member.

 For the year ended December 31, 2023, the review and approval of transactions with related persons was governed by our Code. Under the Code, each director is required to disclose to the Board all actual or apparent conflicts of interest, including any personal financial interest that he or she has, as well as such interests of any immediate family member or business associate of the director known to the director, in any matter to be considered by the Board or in which another person does, or proposes to do, business with the Bank. Following such disclosure, the Board is empowered to determine whether an actual conflict exists. In the event the Board determines the existence of a conflict with respect to any matter, the affected director is required to be recused from all further considerations relating to that matter. The Bank's General Counsel, CHRO, Chief Audit Executive, or the Board, as appropriate, shall be responsible for interpreting the Code and rendering final rulings regarding violations of this Code.

 The Code requires that all directors and employees avoid conflicts of interest, or the appearance of conflicts of interest. In particular, subject to limited exceptions for interests arising through ownership of mutual funds and certain financial interests acquired prior to employment by the Bank, no employee may have a financial interest in or financial relationship with any of our members or other company doing business or considering doing business with the Bank that is not transacted in the ordinary course of the member's business or, in the case of an extension of credit, involves more than the normal risk of repayment or of loss to the member. In addition, the Code also provides that employees and directors are expected to perform their duties fairly and impartially and without discrimination in favor of or against any member institution. Employees are required to annually certify compliance with these and all other Code provisions.
 DIRECTOR INDEPENDENCE
 General
 As of the date of this annual report on Form 10-K, we have 22 directors, all of whom were generally elected by our member institutions in accordance with Finance Agency regulations. All directors are independent of management from the standpoint they are not our employees, officers, or stockholders. Only member institutions can own our capital stock. Thus, our directors do not personally own our stock. In addition, we are required to determine whether our directors are independent under three distinct director independence standards. Finance Agency regulations and the Exchange Act provide independence criteria for directors who serve as members of our Audit Committee. Additionally, SEC rules require our Board of Directors to apply the independence criteria of a national securities exchange or automated quotation system in assessing the independence of our directors.
 Finance Agency Regulations
 The Finance Agency director independence standards prohibit individuals from serving as members of our Audit Committee if they have one or more "disqualifying relationships" with us or our management that would interfere with the exercise of that individual's independent judgment. Disqualifying relationships considered by our Board are (i) employment with us at any time during the last five years, (ii) acceptance of compensation from us other than for service as a director, (iii) being a consultant, advisor, promoter, underwriter, or legal counsel for us at any time within the last five years, and (iv) being an immediate family member of an individual who is or who has been, within the past five years, one of our executive officers. The Board assesses the independence of all directors under the Finance Agency's independence standards, regardless of whether they serve on our Audit Committee. As of February 29, 2024, all of our directors, including all members of our Audit Committee, were independent under these criteria.

 Exchange Act
 Section 10A(m) of the Exchange Act sets forth the independence requirements of directors serving on the Audit Committee of a reporting company. Under Section 10A(m), in order to be considered independent, a member of the Audit Committee may not, other than in his or her capacity as a member of the Board or any other Board Committee (i) accept any consulting, advisory, or other compensation from us or (ii) be an affiliated person of the Bank. As of February 29, 2024, all of our directors, including all members of our Audit Committee, were independent under these criteria.
 SEC Rules
 In addition, pursuant to SEC rules, we adopted the independence standards of the NYSE to determine which of our directors are independent for SEC disclosure purposes. In making an affirmative determination of the independence of each director, the Board first applied the objective measures of the NYSE independence standards to assist the Board in determining whether a particular director has a material relationship with us.
 Based upon the fact that each of our Member Directors are officers or directors of member institutions, and that each such member routinely engages in transactions with us, the Board affirmatively determined none of the Member Directors on the Board meet the NYSE independence standards. In making this determination, the Board recognized a Member Director could meet the NYSE objective standards on any particular day. However, because the volume of business between a Member Director's institution and us can change frequently, and because we generally encourage increased business with all members, the Board determined to avoid distinguishing among the Member Directors based upon the amount of business conducted with us and our respective members at a specific time, resulting in the Board's categorical finding that no Member Director is independent under an analysis using the NYSE standards.
 With regard to our Independent Directors, the Board affirmatively determined Ruth Bennett, Cleon Butterfield, Edward Garding, Amy Johnson, Wan-Chong Kung, Elsie Meeks, Siva Narendra, Carol Nelson, and Lisa Stange are each independent in accordance with NYSE standards. In concluding our nine Independent Directors are independent under the NYSE rules, the Board first determined all Independent Directors met the objective NYSE independence standards. In further determining none of its Independent Directors had a material relationship with us, the Board noted the Independent Directors are specifically prohibited from being an officer of the Bank or an officer or director of a member.
 Our Board has a standing Audit Committee. All Audit Committee members are independent under the Finance Agency's independence standards and the independence standards under Section 10A(m) of the Exchange Act in accordance with the Housing Act. For the reasons described above, our Board determined none of the current Member Directors serving on the Audit Committee are independent using the NYSE independence standards. The Member Directors serving on the Audit Committee are Steven Bumann, James Hunt, Jon Jones, and Russell Lau. Our Board determined, however, the Independent Directors serving on the Audit Committee are independent under the NYSE independence standards. The Independent Directors serving on the Audit Committee are Ruth Bennett, Edward Garding, and Elsie Meeks.
 Compensation Committee
 The Board has a standing Compensation Committee. Our Board determined all members of the Compensation Committee are independent under the Finance Agency's independence standards. For the reasons described above, our Board determined none of the current Member Directors serving on the Compensation Committee are independent using the NYSE independence standards. The Member Directors serving on the Compensation Committee are Douglas DeFries, Jon Jones, and Robert Vogel. Our Board determined the Independent Directors serving on the Compensation Committee are independent under the NYSE independence standards. The Independent Directors serving on the Compensation Committee are Amy Johnson, Elsie Meeks, and Carol Nelson.

 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 The Audit Committee pre-approves all audit and permitted non-audit services performed by the Bank's external audit firm. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee for services with fees below $10,000; however any decisions made must be presented to the Audit Committee at its next regularly scheduled meeting.
 The following table sets forth the aggregate fees billed or to be billed by PwC (dollars in thousands):

 2023
 2022

 Audit fees1

 $
 1,020
 $

 Audit-related fees2

 All other fees

 Total
 $
 1,126
 $
 1,028

 1 Represents fees incurred in connection with the annual audit of our financial statements and internal control over financial reporting and quarterly review of our financial statements. In addition to these fees, we incurred assessments of $62 thousand and $53 thousand from the Office of Finance for audit fees on the Combined Financial Report for the years ended December 31, 2023 and 2022.

 2 Primarily represents fees for participation in and presentations at conferences and/or technical accounting consultations.

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 (a) Financial Statements

 The financial statements are set forth in Item 8 of this annual report on Form 10-K.

 (b) Exhibits

 3.1
 Organization Certificate of the Federal Home Loan Bank of Des Moines, as amended and restated effective May 31, 2015 1

 3.2
 Bylaws of the Federal Home Loan Bank of Des Moines, as amended and restated effective December 8, 2021 2

 4.1
 Federal Home Loan Bank of Des Moines Capital Plan, as amended, approved by the Federal Housing Finance Agency on May 31, 2015

 4.2
 Description of Federal Home Loan Bank of Des Moines Capital Stock

 10.1
 Employment Agreement with Kristina K. Williams, effective January 20, 2020 3

 10.2
 Form of Indemnification Agreement 4

 10.3
 Joint Capital Enhancement Agreement, as amended, effective August 5, 2011 5

 10.4
 Federal Home Loan Bank of Des Moines Seventh Amended and Restated Benefit Equalization Plan, effective January 1, 2021 6

 10.5
 Federal Home Loan Bank of Des Moines 2023 Executive Incentive Plan, effective January 1, 2023 7

 10.6

 2024 Director Fee Policy, effective January 1, 2024 8

 10.7

 2023 Director Fee Policy, effective January 1, 2023 9

 10.8
 Federal Home Loan Bank of Des Moines Deferral Plan for Directors, effective June 1, 2015 10

 10.9
 Federal Home Loan Bank of Des Moines Executive Severance Plan, effective May 1, 2023 11

 10.10

 Purchase Agreement with Principal Life Insurance Company, effective April 28, 2023 12

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

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

 32.1
 Certification of the President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 32.2
 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 99.1
 Federal Home Loan Bank of Des Moines Audit Committee Report

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 1 Incorporated by reference from our Form 8-K filed with the SEC on June 1, 2015 (Commission File No. 000-51999).

 2 Incorporated by reference from our Form 8-K filed with the SEC on December 14, 2021 (Commission File No. 000-51999).

 3 Incorporated by reference from our Form 8-K/A (Amendment No. 1) filed with the SEC on August 3, 2020 (Commission File No. 000-51999).

 4 Incorporated by reference from our Form 10-K filed with the SEC on March 9, 2022 (Commission File No. 000-51999).

 5 Incorporated by reference from our Form 8-K filed with the SEC on August 5, 2011 (Commission File No. 000-51999).

 6 Incorporated by reference from our Form 10-K filed with the SEC on March 10, 2021 (Commission File No. 000-51999).

 7 Incorporated by reference from our Form 8-K filed with the SEC on March 23, 2023 (Commission File No. 000-51999).

 8 Incorporated by reference from our Form 8-K filed with the SEC on January 9, 2024 (Commission File No. 000-51999).

 9 Incorporated by reference from our Form 8-K filed with the SEC on November 30, 2022 (Commission File No. 000-51999).

 10 Incorporated by reference from our Form 10-K filed with the SEC on March 21, 2016 (Commission File No. 000-51999).

 11 Incorporated by reference from our Form 8-K filed with the SEC on May 22, 2023 (Commission File No. 000-51999).

 12 Incorporated by reference from our Form 8-K filed with the SEC on May 2, 2023 (Commission File No. 000-51999).

 ITEM 16. FORM 10-K SUMMARY

 None.

 Glossary of Terms

 2022 Form 10-K: The Bank's 2022 Annual Report on Form 10-K filed with the SEC on March 8, 2023

 AFS: Available-for-Sale

 AHP: Affordable Housing Program

 AOCI: Accumulated Other Comprehensive Income (Loss)

 AROCS: Adjusted Return on Capital Stock

 ASU: Accounting Standards Update

 BA: Bachelor of Arts

 BEP: Benefit Equalization Plan

 BTFP: Bank Term Funding Program

 Capital Stock AB: Finance Agency Advisory Bulletin on Capital Stock 2019-03

 CBO: Chief Business Officer

 CDFI: Community Development Financial Institution

 CEO: Chief Executive Officer

 CFA: Chartered Financial Analyst

 CFI: Community Financial Institution

 CFO: Chief Financial Officer

 CFPB: Consumer Financial Protection Bureau

 CFTC: Commodity Futures Trading Commission

 Chicago Bank: Federal Home Loan Bank of Chicago

 CHRO: Chief Human Resources Officer

 CIO: Chief Information Officer

 Code: Code of Ethics

 Committee: Federal Open Markets Committee

 Compensation Committee: Human Resources and Compensation Committee

 Comptroller General: Comptroller General of the United States

 COO: Chief Operating Officer

 CPA: Certified Public Accountant

 CRCO: Chief Risk and Compliance Officer

 CRO: Chief Risk Officer

 DB Plan: Pentegra Defined Benefit Plan for Financial Institutions

 DC Plan: Federal Home Loan Bank of Des Moines 401(k) Savings Plan

 DEI: Diversity, Equity and Inclusion

 Dodd-Frank Act: Dodd-Frank Wall Street Reform and Consumer Protection Act

 EIP: Executive Incentive Plan

 ESG: Environmental, Social, and Governance

 Exchange Act: Securities Exchange Act of 1934, as amended

 Fannie Mae: Federal National Mortgage Association

 FASB: Financial Accounting Standards Board

 FDIC: Federal Deposit Insurance Corporation

 FHA: Federal Housing Administration

 FHLBank Act: Federal Home Loan Bank Act of 1932

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

 Finance Agency: Federal Housing Finance Agency

 FLA: First Loss Account

 FOMC: Federal Open Markets Committee

 Freddie Mac: Federal Home Loan Mortgage Corporation

 GAAP: Generally Accepted Accounting Principles

 Ginnie Mae: Government National Mortgage Association

 GSE: Government-Sponsored Enterprise

 Housing Act: Housing and Economic Recovery Act of 2008

 HTM: Held-to-Maturity

 IT: Information Technology

 JCE Agreement: Joint Capital Enhancement Agreement

 LCH: London Clearing House

 LIBOR: London Interbank Offered Rate

 Liquidity Guidance AB: Finance Agency Advisory Bulletin on FHLBank Liquidity 2018-07

 MBA: Master of Business Administration

 MBS: Mortgage-Backed Securities

 MD&A: Management's Discussion and Analysis

 Moody's: Moody's Investors Service, Inc.

 MPF: Mortgage Partnership Finance (a federally registered trademark of the Federal Home Loan Bank of Chicago)

 MPP: Mortgage Purchase Program

 MRCS: Mandatorily Redeemable Capital Stock

 MVCS: Market Value of Capital Stock

 MVE: Market Value of Equity

 NEO: Named Executive Officer

 NYSE: New York Stock Exchange

 NRSRO: Nationally Recognized Statistical Rating Organization

 OIS: Overnight Index Swap

 OMWI: Office of Minority and Women Inclusion

 PCAOB: Public Company Accounting Oversight Board

 PFI: Participating Financial Institution

 Pittsburgh Bank: Federal Home Loan Bank of Pittsburgh

 PMI: Primary Mortgage Insurance

 PwC: PricewaterhouseCoopers LLP

 S&P: S&P Global Ratings

 SBP: Strategic Business Plan

 Seattle Bank: Federal Home Loan Bank of Seattle

 SEC: Securities and Exchange Commission

 SOFR: Secured Overnight Financing Rate

 TBA: To-Be-Announced

 TDR: Troubled Debt Restructuring

 Topeka Bank: Federal Home Loan Bank of Topeka

 TVA: Tennessee Valley Authority

 SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) 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.

 (Registrant)

 March 7, 2024
 By:
 /s/ Kristina K. Williams

 President and Chief Executive Officer

 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
 March 7, 2024

 Signature

 Title

 Principal Executive Officer:

 /s/ Kristina K. Williams

 President and Chief Executive Officer

 Principal Financial and Accounting Officer:

 /s/ James G. Livingston

 Chief Financial Officer

 Signature

 Title

 Directors:

 /s/ Karl A. Bollingberg

 Chair of the Board of Directors

 Karl A. Bollingberg

 /s/ John A. Klebba

 Vice Chair of the Board of Directors

 John A. Klebba

 /s/ Ruth B. Bennett

 Ruth B. Bennett

 /s/ Steven L. Bumann

 Steven L. Bumann

 /s/ Cleon P. Butterfield

 Cleon P. Butterfield

 /s/ Douglas L. DeFries

 Douglas L. DeFries

 /s/ Kim R. DeVore

 Kim R. DeVore

 /s/ Edward A. Garding

 Edward A. Garding

 /s/ James W. Hunt

 James W. Hunt

 /s/ Amy K. Johnson

 Amy K. Johnson

 /s/ Jon M. Jones

 Jon M. Jones

 /s/ Joe R. Kesler

 Joe R. Kesler

 /s/ Wan-Chong Kung

 Wan-Chong Kung

 /s/ Russell J. Lau

 Russell J. Lau

 Signature

 Title

 /s/ Lauren M. MacVay

 Lauren M. MacVay

 /s/ Elsie M. Meeks

 Elsie M. Meeks

 /s/ Jason A. Meyerhoeffer

 Jason A. Meyerhoeffer

 /s/ Siva G. Narendra

 Siva G. Narendra

 /s/ Carol K. Nelson

 Carol K. Nelson

 /s/ Jeff L. Plagge

 Jeff L. Plagge

 /s/ Lisa A. Stange

 Lisa A. Stange

 /s/ Robert J. Vogel

 Robert J. Vogel