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, 2024

 OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ________ to ________

 Commission File Number 000-52004

 (Exact name of registrant as specified in its charter)

 Federally chartered corporation of the United States

 48-0561319

 (State or other jurisdiction of
incorporation or organization)

 (I.R.S. Employer
Identification No.)

 500 SW Wanamaker Road
 Topeka, KS

 66606

 (Address of principal executive offices)

 (Zip Code)

 Registrant's telephone number, including area code: 785. 233.0507

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

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

 None
 N/A
 N/A

 Securities registered pursuant to Section 12(g) of the Act:
 Class A Common Stock, $100 per share par value

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes 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. Yes 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. Yes No

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

 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.

 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.

 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 §240.10D-1(b).

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 Registrant's common stock is no t publicly traded and is only issued to members of the registrant. Such stock is issued, redeemed and repurchased at par value, $100 per share, with all issuances, redemptions and repurchases subject to the registrant's capital plan as well as certain statutory and regulatory requirements. As of June 30, 2024, the aggregate par value of stock held by current and former members of the registrant was $2,739,440,600, and 27,394,406 total shares were outstanding.

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

 Shares outstanding as of

 February 28, 2025

 Class A Stock, par value $100 per share
 3,126,774

 Class B Stock, par value $100 per share
 21,331,378

 Documents incorporated by reference: None

.FEDERAL HOME LOAN BANK OF TOPEKA

 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

 Executive Level Overview

 Financial Market Trends

 Critical Accounting Policies and Estimates

 Results of Operations

 Financial Condition

 Liquidity and Capital Resources

 Risk Management

 Recently Issued Accounting Standards

 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 Accountant Fees and Services

 Item 15.
 Exhibit and Financial Statement Schedules

 Item 16.
 Form 10-K Summary

 Important Notice about Information in this Annual Report

 In this annual report, unless the context suggests otherwise, references to "FHLBank," "FHLBank Topeka," "we," "us" and "our" mean Federal Home Loan Bank of Topeka, and "FHLBanks" mean all Federal Home Loan Banks, including FHLBank Topeka.

 The information contained in this annual report is accurate only as of the date of this annual report and as of the dates specified herein.

 The product and service names used in this annual report are the property of FHLBank, and in some cases, other FHLBanks. Where the context suggests otherwise, the products, services and company names mentioned in this annual report are the property of their respective owners.

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 With the exception of historical information, certain statements contained or incorporated by reference in this Form 10-K may contain forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), such as those pertaining to FHLBank's objectives, projections, estimates or future predictions of FHLBank's operations. Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of actual events. There is no assurance the events or circumstances reflected in the forward-looking statements will occur. These statements may be identified by the use of forward-looking terminology such as "anticipates," "believes," "may," "is likely," "could," "estimate," "expect," "will," "intend," "probable," "project," "should," or their negatives or other variations of these terms.

 Forward-looking statements necessarily are dependent on assumptions, data or methods that may be incorrect or imprecise. These forward-looking statements represent FHLBank's intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond FHLBank's ability to control or predict. For further discussion of these factors see "Summary Risk Factors" below and Item 1A - "Risk Factors" in this Annual Report on Form 10-K.

 You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K or the date of any document incorporated by reference herein. All subsequent written and oral forward-looking statements attributable to FHLBank or any person acting on FHLBank's behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except as required by law, FHLBank does not undertake any obligation to release publicly any revisions to its forward-looking statements to reflect events or circumstances after the date of this Annual Report on Form 10-K.

 SUMMARY RISK FACTORS

 FHLBank cautions that by their nature forward-looking statements involve varying degrees of risks or uncertainties and that actual results may differ materially from those expressed in any forward-looking statements as a result of such risks and uncertainties. You should carefully review and consider the full discussion of our risk factors in Item 1A - "Risk Factors" in this Annual Report on Form 10-K. If any of these risks occur, our business, financial condition or results of operations could be materially and adversely affected. Principal risk factors relating to FHLBank's business include, but are not limited to:
 • Changes in the general economy;
 • Political events, including legislative, regulatory, judicial, or other developments that affect FHLBank, its members, counterparties or investors in the consolidated obligations of the FHLBanks, such as any government-sponsored enterprise (GSE) reforms;
 • Natural disasters, including those related to climate change, severe weather, public health crises, acts of war or terrorism or other external events;
 • Climate change and responses to climate change;
 • Governmental responses to an economic downturn, recession, inflation or other macro-level events or conditions;
 • The uncertain, complex body of laws and regulations applicable to the FHLBanks;
 • Compliance with anti-money laundering statutes and regulations;
 • Competition from alternative loan and funding providers;
 • Membership changes, including changes resulting from member creditworthiness, member failures or mergers, changes due to member eligibility or housing mission focus, or changes in the principal place of business of members;
 • A high concentration of advances and capital with a few members;
 • Changes in credit ratings of FHLBank Topeka, the other FHLBanks and the U.S. government;
 • Regulations relating to privacy, information security and data protection;

 • Joint and several liability of all or a portion of the consolidated obligations for which one or more of the other FHLBanks are the primary obligors;
 • Declines in U.S. home prices or weaknesses in activity in the U.S. housing and mortgage markets undermining the need for wholesale funding, thus impairing the volume and quality of mortgage loans originated and sold by members;
 • Defaults by, and the soundness of financial institutions, including clearinghouses, FHLBank members, non-member borrowers, counterparties and the other FHLBanks and their members, non-member borrowers and counterparties;
 • Changes in the fair value and economic value of pledged collateral securing advances or other extensions of credit to FHLBank members or non-member borrowers or collateral pledged by reverse repurchase and derivative counterparties;
 • Interruptions in FHLBank's access to the capital markets;
 • Changes and volatility in interest rates and indices and FHLBank's ability to manage interest rate risk;
 • The ability to enter into effective derivative instruments on acceptable terms;
 • FHLBank's ability to meet obligations as they come due or meet the credit and liquidity needs of our members in a timely and cost-effective manner;
 • An increase in required Affordable Housing Program (AHP) contributions;
 • FHLBank's ability to declare dividends or to pay dividends at rates consistent with past practices;
 • The lack of a public market and restrictions on transferring our capital stock and associated illiquidity;
 • Volatile market conditions impairing the ability of FHLBank's financial models to produce unreliable results;
 • Reliance on counterparties and third-parties to provide accurate and complete information;
 • Potential costs and effects of litigation, regulatory actions, investigations or similar matters, or adverse facts and developments related thereto;
 • The ability of FHLBank to keep pace with technological changes and innovation such as artificial intelligence (AI), and the ability to develop and support technology and information systems;
 • Cybersecurity threats, cybersecurity risk management and FHLBank's ability to respond to cybersecurity incidents;
 • Judgments, assumptions and estimates in the preparation of our financial statements;
 • Effectiveness of FHLBank's risk management framework in mitigating risks of losses;
 • Effectiveness of FHLBank's internal control over financial reporting to report accurate and timely financial results;
 • Employee error and member, employee and third-party misconduct;
 • Fraudulent activity;
 • Third-party service providers fail to provide, terminate their services or fail to comply with banking regulations;
 • The ability of FHLBank to attract, onboard and retain skilled individuals, including qualified executive officers; and
 • Reliance on FHLBank Chicago as Mortgage Partnership Finance (MPF) Program Provider. "Mortgage Partnership Finance," "MPF," "MPF Xtra," and "MPF Direct" are registered trademarks of FHLBank Chicago.

 Item 1: Business

 General
 One of 11 Federal Home Loan Banks (FHLBanks), Federal Home Loan Bank of Topeka ("we," "us," "our," "FHLBank" or "FHLBank Topeka") is a federally chartered corporation organized on October 13, 1932 under the authority of the Federal Home Loan Bank Act of 1932, as amended (Bank Act). The FHLBanks are U.S. GSEs. Each FHLBank is a cooperative owned by member institutions located within a defined geographic district and operates as a separate corporate entity with its own management, employees and board of directors. The members purchase capital stock in an FHLBank and generally receive dividends on their capital stock investment. Our defined geographic district is Colorado, Kansas, Nebraska and Oklahoma.

 Our mission is to be a reliable provider of funding, liquidity, and services to promote housing, jobs and general prosperity through products and services that assist our members in supporting their communities. Our primary business is making collateralized loans, known as advances, to member institutions (members) and certain qualifying non-members (housing associates) and acquiring residential mortgage loans from members. We also provide members and housing associates with letters of credit and certain correspondent services, such as safekeeping, wire transfers, and cash management. We are generally limited to providing products and services only to members and qualifying non-members. Each FHLBank operates as a separate corporate entity with its own management, employees, and board of directors. Section 1433 of the Bank Act provides that we and the other FHLBanks are exempt from federal, state, and local taxation, except for real property taxes. Management has identified FHLBank Topeka as a single operating segment and allocates resources and assesses financial performance on that basis. We do not have any wholly- or partially-owned subsidiaries and do not have an equity position in any partnerships, corporations, or off-balance sheet special purpose entities.

 We are supervised and regulated by the Federal Housing Finance Agency (FHFA), an independent agency in the executive branch of the U.S. government. The FHFA's mission is to ensure the housing GSEs fulfill their mission by operating in a safe and sound manner to serve as a reliable source of liquidity and funding for housing finance and community investment.

 Any federally insured depository institution, federally or privately insured credit union, or insurance company, engaged in residential housing finance can apply for membership in FHLBank. Community development financial institution (CDFI) certified by the CDFI fund of the U.S. Department of the Treasury, including community development loan funds, community development venture capital funds, and state-chartered credit unions without federal insurance, are also eligible to become members. (See Table 37 under Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources" for counts and balances by member type.) Community Financial Institutions (CFI) are defined in the Bank Act, as amended by the Housing and Economic Recovery Act of 2008 (Recovery Act) as all institutions insured by the Federal Deposit Insurance Corporation (FDIC) with average total assets over the three-year period preceding measurement of less than $1.0 billion, as adjusted annually for inflation. For 2025, this specified amount was $1.5 billion.

 Our members are required to purchase and hold our capital stock as a condition of membership and in proportion to their asset size and business activity with us. All capital stock transactions are governed by our capital plan, which was developed under, is subject to, and operates within specific regulatory and statutory requirements. Our capital stock is not publicly traded and is owned entirely by current or former members and certain non-members that own our capital stock as a result of a merger with or acquisition of a member or by former members that retain capital stock to support advances or other obligations that remain outstanding. Because we operate as a cooperative, as a result of the stock purchase requirements, we conduct business with related parties in the normal course of business. For disclosure purposes, our definition of a related party includes, among other persons, any member institution (or successor) that is known to be the beneficial owner of more than five percent of any class of our voting stock and any person who is, or at any time since the beginning of our last fiscal year was, one of our directors or executive officers. Information on business activities with related parties is provided in Tables 62 and 63 under Item 12 – "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters."

 Our debt and equity securities are exempt from registration under the Securities Act and are "exempted securities" under the Exchange Act. As required by the Recovery Act, each FHLBank has voluntarily registered a class of its equity securities with the Securities and Exchange Commission (SEC) under Section 12(g) of the Exchange Act. As a registrant, FHLBank is subject to the periodic reporting and disclosure regime as administered and interpreted by the SEC. The SEC maintains an Internet site ( that contains reports and other information filed with the SEC. Reports and other information we file with the SEC are also available free of charge through our website at www.fhlbtopeka.com. To access these reports and other information through FHLBank's website, click on "About Us," then "Investor Relations" and then "SEC Filings". The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC. Information on these websites, or that can be accessed through these websites, does not constitute a part of this annual report.

 FHFA regulations require that our strategic business plan describes how our business activities will achieve our mission, consistent with the FHFA's core mission achievement guidance. Our strategic business plan includes a balance sheet management strategy consistent with this guidance, which includes emphasis on the issuance of advances and acquisition of member mortgage loans through the MPF Program. The Primary Mission Asset ratio, as defined by the FHFA, is calculated as average advances and average mortgage loans to average consolidated obligations less average U.S. Treasury securities classified as trading or available for sale with maturities of ten years or less utilizing par balances. As of December 31, 2024, our Primary Mission Asset ratio was 78 percent. We generally intend to maintain the Primary Mission Asset ratio within the range of 70 to 80 percent, which exceeds the FHFA's recommended minimum ratio of 70 percent. This ratio, however, is dependent on several variables, such as member demand for our advance and mortgage loan products, and we may be unable to maintain the ratio at this level indefinitely.

 We obtain our funds from several sources. Our primary funding source is the issuance of FHLBank debt issued to the public in the capital markets, known as "consolidated obligations," through the FHLBanks' Office of Finance, a joint office of the FHLBanks that facilitates the issuance and servicing of the consolidated obligations, as its agent. The FHFA and the U.S. Secretary of the Treasury oversee the issuance of all FHLBank debt. Generally, consolidated obligations are traded in the over-the-counter market. All 11 FHLBanks are jointly and severally liable for the repayment of all consolidated obligations. Although consolidated obligations are not obligations of or guaranteed by the U.S. government, the FHLBanks, as GSEs, have historically been able to borrow at the more favorable rates generally available to GSEs. Historically, our GSE status and credit ratings on our consolidated obligations have provided us with excellent capital markets access. Deposits, other borrowings and the proceeds from the issuance of capital stock to members are also sources of our funds.

 Products and Services
 Advances: We fulfill our mission by making advances to our members and housing associates. The following table summarizes the advance product offerings as of December 31, 2024:

 Product

 Maturity

 Overnight Line of Credit Advances

 Reprices and matures daily, non-prepayable

 Overnight

 Short-term Fixed Rate Advances

 Non-amortizing, non-prepayable

 3 days to 93 days

 Fixed rate Advances

 Amortizing or non-amortizing, prepayable with a fee

 94 days to 360 months

 Adjustable Rate Advances

 Non-amortizing, prepayable with fee (if any) on interest rate reset dates

 1 month to 120 months

 Callable Advances

 Fixed or variable, with an option to prepay without a fee on specified dates

 12 months to 360 months for fixed rate, 4 months to 180 months for variable rate

 Putable Advances

 Fixed rate, member sells option that allows advance to be put (called away) after a predetermined lockout period

 24 months to 180 months, with initial lockout periods ranging between 6 and 60 months

 Forward Settling Advances

 Commitment to lock in rate and term of a fixed rate advance

 Up to 24 months prior to settlement date

 Advances are required by FHFA regulation to be priced no lower than the cost to issue debt with matching terms and conditions in the marketplace plus the administrative and operating expenses associated with making such advances.

 We also offer a variety of specialized advance products to address housing and community development needs. These advance products address needs for low-cost funding to create affordable rental and homeownership opportunities, and for commercial and economic development activities, including those that benefit low- and moderate-income neighborhoods. Refer to Item 1 – "Business – Other Mission-Related Activities" for more details.

 In addition to members, we also make advances to housing associates. To qualify as a housing associate, the applicant must: (1) be approved under Title II of the National Housing Act of 1934; (2) be a chartered institution having succession; (3) be subject to the inspection and supervision of a governmental agency; (4) lend its own funds as its principal activity in the mortgage field; and (5) have a financial condition that demonstrates that advances may be safely made. Housing associates are not subject to certain provisions of the Bank Act that are applicable to members, such as the capital stock purchase requirements, but the same regulatory lending requirements generally apply to them as apply to members. Restrictive collateral provisions apply if the housing associate does not qualify as a state housing finance agency (HFA). We currently have three housing associates who are customers and all three are state HFAs.

 We are required by regulation to obtain sufficient collateral to fully secure advances. A member's lending limit is based on the collateral lending value of its residential mortgages and other eligible collateral, which is calculated by applying discounts, or haircuts, to the unpaid principal or market value, as applicable, of the collateral. As additional security for a member's indebtedness, we have a statutory lien on that member's FHLBank stock. We may require additional collateral to secure a member's or housing associate's outstanding credit obligations at any time (whether or not such collateral would be eligible to originate an advance), at our discretion. A description of our credit risk management and collateral practices as they relate to advance activity is contained in Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations – Risk Management – Credit Risk Management – Lending and AMA Activities.

 Tables 21 and 22 under Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition" present information on our five largest borrowers as of December 31, 2024 and 2023 and the accrued interest income associated with the five borrowers providing the highest amount of interest income for the years ended December 31, 2024 and 2023.

 Standby Letters of Credit: We issue standby letters of credit on behalf of members to support certain obligations of the members to third-party beneficiaries, often as collateral for deposits from public sector entities or for residential housing financing and community lending. Generally, the term of a letter of credit is one year renewable annually with a final expiration date of up to ten years after issuance. Members are required to fully collateralize the face amount of any letter of credit issued. Members are charged a fee based on the face amount of the letter of credit. If we are required to make a payment for a beneficiary's draw, the amount must be reimbursed by the member immediately or, subject to our discretion, may be converted into an advance to the member. The underwriting and collateral requirements for letters of credit are the same as they are for advances. Letters of credit are subject to an activity stock purchase requirement. For additional details on our letters of credit, see Note 15 of the Notes to Financial Statements under Item 8 –" Financial Statements and Supplementary Data".

 Mortgage Loans: We purchase residential mortgage loan products from members and housing associates, referred to as participating financial institutions (PFI), through the MPF Program, a secondary mortgage market structure developed by FHLBank Chicago. Under the MPF Program, we invest in qualifying conventional conforming and government-guaranteed or government-insured fixed rate mortgage loans. The MPF Program helps fulfill our housing mission and provides an additional source of liquidity to our members that choose to sell mortgage loans into the secondary market rather than holding them in their own portfolios. MPF Program portfolio mortgage loans are considered Acquired Member Assets (AMA), a core mission activity of the FHLBanks, as defined by FHFA regulations. Our AMA risk tolerance limit for our investment in mortgage loans held for portfolio is 20 percent of total assets.

 MPF Original, MPF 125, and MPF Government are closed loan products in which we purchase loans acquired or originated by the PFI. Under these MPF portfolio products, the PFI performs all traditional retail loan origination functions. In addition to the MPF portfolio products, we also offer MPF Xtra and MPF Government MBS. MPF Xtra is an off-balance sheet product structured to facilitate a loan sale from the PFI to FHLBank Chicago and simultaneously to the Federal National Mortgage Association (Fannie Mae). MPF Government MBS is an off-balance sheet product structured to facilitate a loan sale of government-guaranteed or government-insured loans from the PFI to FHLBank Chicago for securitization into Government National Mortgage Association (Ginnie Mae) MBS. We receive a counterparty fee from our PFIs for our role in MPF Xtra and MPF Government MBS.

 Table 24 under Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition" presents the outstanding balances of mortgage loans sold to us from our top five PFIs and the percentage of those loans to total mortgage loans outstanding.

 PFI Eligibility – Members and housing associates may apply to become PFIs. We review the general eligibility of the member or housing associate, its servicing qualifications, and its ability to supply documents, data, and reports required to be delivered by PFIs under the MPF Program.

 MPF Provider – FHLBank Chicago serves as the MPF Provider and master servicer for the MPF Program. It maintains the structure of MPF residential mortgage loan products and the eligibility rules for MPF loans, including MPF Xtra loans and MPF Government MBS loans, which primarily fall under the rules and guidelines provided by Fannie Mae and Ginnie Mae, respectively. In addition, the MPF Provider manages the pricing and delivery mechanism for MPF loans and the back-office processing of MPF loans in its role as master servicer and program custodian. The MPF Provider publishes and maintains documentation (referred to as Guides) that details the requirements PFIs must follow in originating, underwriting or selling and servicing MPF loans. The MPF Provider also monitors compliance with MPF Program rules and requirements. The MPF Provider maintains the infrastructure through which we can fund or purchase MPF loans through our PFIs. We pay the MPF Provider a fee for providing these services.

 MPF Servicing – PFIs selling residential mortgage loans under the MPF Program may either retain the servicing function or release the servicing and the servicing rights to an MPF Program-approved servicer. If a PFI chooses to retain the servicing, it receives a servicing fee. If a PFI chooses to release the servicing rights, it will receive a servicing-released premium. PFIs that retain the servicing may utilize approved subservicers to perform the servicing duties, while maintaining the servicing rights.

 Mortgage Standards – PFIs are required to deliver residential mortgage loans that meet the eligibility requirements in the MPF Guides. The eligibility guidelines in the MPF Guides applicable to the conventional mortgage loans in our portfolio are broadly summarized as follows:
 Mortgage characteristics: MPF loans must be qualifying 5- to 30-year conforming conventional, fixed rate, fully amortizing mortgage loans, secured by first liens on owner-occupied 1- to 4-unit single-family residential properties and single-unit second homes.
 Loan-to-value (LTV) ratio and private mortgage insurance (PMI): Conventional MPF mortgage loans with LTVs greater than 80 percent are insured by PMI from a mortgage insurance company that has successfully passed an internal credit review and is approved under the MPF Program. Generally, the maximum LTV for conventional MPF loans is 95 percent. AHP MPF mortgage loans may have LTVs up to 100 percent.
 Conventional loans must have a minimum Fair Isaac Corporation (FICO) score of 620.
 Documentation and compliance: Mortgage documents and transactions are required to comply with all applicable laws. MPF mortgage loans are documented using standard Fannie Mae or Federal Home Loan Mortgage Corporation (Freddie Mac) uniform instruments.
 Government loans: Government mortgage loans sold under the MPF Program have substantially the same parameters as conventional MPF mortgage loans except that their LTVs may not exceed the LTV limits set by the applicable government agency and they must meet all requirements to be insured or guaranteed by the applicable government agency (Federal Housing Administration, the Department of Veterans Affairs, the U.S. Department of Agriculture, or the Department of Housing and Urban Development).

 Loans not eligible for sale under the MPF Program include residential mortgage loans unable to be rated by Standard & Poor's (S&P), loans not meeting eligibility requirements, loans classified as high cost, high rate, high risk, Home Ownership and Equity Protection Act loans or loans in similar categories defined under predatory or abusive lending laws, or subprime, non-traditional, or higher-priced mortgage loans.

 Allocation of Risk – The MPF Program is designed to allocate risks associated with residential mortgage loans between the PFIs and FHLBank in accordance with the FHFA AMA regulation requirements. PFIs have direct knowledge of their mortgage markets and have developed expertise in underwriting and servicing residential mortgage loans. By allowing PFIs to originate residential mortgage loans, whether through retail or wholesale operations, and to retain or sell servicing rights of residential mortgage loans, the PFI retains control of the functions that impact credit quality the most. We are responsible for managing the interest rate, prepayment. and liquidity risks associated with holding residential mortgage loans in portfolio. To share the credit risk with our PFIs, a third-party model is used to determine the amount of credit enhancement obligation (CE obligation) needed to achieve credit quality that is permissible under the AMA regulation and consistent with our risk appetite. PFIs' CE obligations must be fully collateralized with assets considered eligible under our collateral policy. PFIs are paid a monthly fee for sharing credit risk. See Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Risk Management – Credit Risk Management – Lending and AMA Activities" for a discussion of eligible collateral.

 We maintain a portfolio of investments for liquidity and asset/liability management purposes and to enhance income. The type of investments we may purchase are limited by regulation. We may hold short-term investments in highly-rated institutions, including overnight Federal funds, term Federal funds, interest-bearing certificates of deposit and demand deposits, commercial paper, and securities purchased under agreements to resell (i.e., reverse repurchase agreements). Our long-term investment portfolio primarily includes securities issued or guaranteed by the U.S. government, U.S. government agencies and GSEs, as well as MBS issued by U.S. government agencies and housing GSEs (GSE securities are not explicitly guaranteed by the U.S. government). Regulation prohibits the purchase of MBS if the aggregate value of MBS owned exceeds 300 percent of our month-end total regulatory capital, as most recently reported to the FHFA, on the day we purchase the securities. Further, quarterly increases in holdings of MBS are restricted to no more than 50 percent of regulatory capital as of the beginning of such quarter. As of December 31, 2024, the aggregate value of our MBS portfolio represented 253 percent of our regulatory capital. For details on our investment portfolio, see Note 3 of the Notes to Financial Statements under Item 8 – "Financial Statements and Supplementary Data" and Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Investments." For additional discussion of our investments and their related credit risk, see Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Risk Management – Credit Risk Management."

 Debt Financing – Consolidated Obligations
 Consolidated obligations, consisting of bonds and discount notes, are our primary liabilities and represent our principal source of funding. Consolidated obligations are the joint and several obligations of the FHLBanks, backed only by the financial resources of the FHLBanks. Consolidated obligations are not obligations of the U.S. government, and the U.S. government does not guarantee them; however, the capital markets have traditionally viewed the FHLBanks' obligations as "Federal agency" debt. As such, the FHLBanks historically have had reasonably stable access to funding at relatively favorable spreads to U.S. Treasury obligations. Our ability to access the capital markets through the sale of consolidated obligations, across the maturity spectrum and through a variety of debt structures, assists us in managing our balance sheet effectively and efficiently. S&P currently rates the long-term senior unsecured debt issues of the FHLBank System and all FHLBanks (including FHLBank Topeka) at AA+. S&P rates all FHLBanks and the FHLBank System's short-term debt issues at A-1+. S&P's rating outlook for the FHLBank System's senior unsecured debt and all FHLBanks is stable. Moody's Investor Service (Moody's) has affirmed the long-term Aaa rating on the senior unsecured debt issues of the FHLBank System and the FHLBanks and a short-term issuer rating of P-1, with a rating outlook of negative for senior unsecured debt. These ratings measure the likelihood of timely payment of principal and interest on consolidated obligations and also reflect the FHLBanks' status as GSEs, which generally implies the expectation of a high degree of support by the U.S. government even though their obligations are not guaranteed by the U.S. government.

 FHFA regulations govern the issuance of debt on behalf of the FHLBanks and related activities, and authorize the FHLBanks to issue consolidated obligations, through the Office of Finance as their agent, under the authority of Section 11(a) of the Bank Act. No FHLBank is permitted to issue individual debt under Section 11(a) without FHFA approval. We are primarily and directly liable for the portion of consolidated obligations issued on our behalf. In addition, we are jointly and severally liable with the other FHLBanks for the payment of principal and interest on the consolidated obligations of all FHLBanks under Section 11(a). The FHFA, at its discretion, may require any FHLBank to make principal or interest payments due on any consolidated obligations for which that FHLBank is not the primary obligor. Although it has never occurred, to the extent that an FHLBank would be required to make a payment on a consolidated obligation on behalf of another FHLBank, the paying FHLBank would be entitled to reimbursement from the non-complying FHLBank. However, if the FHFA determines that the non-complying FHLBank is unable to satisfy its obligations, then the FHFA may allocate the non-complying FHLBank's outstanding consolidated obligation debt 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 the FHFA may determine. If the principal or interest on any consolidated obligation issued on behalf of a specific FHLBank is not paid in full when due, that FHLBank may not pay dividends to, or redeem or repurchase shares of stock from, any member of that specific FHLBank.

 Table 1 presents the par value of our consolidated obligations and the combined consolidated obligations of all the FHLBanks as of December 31, 2024 and 2023 (in millions):

 Table 1

 Par value of consolidated obligations of FHLBank Topeka
 $
 70,579
 $
 70,313

 Par value of consolidated obligations of all FHLBanks
 $
 1,192,968
 $
 1,204,316

 FHFA regulations provide that we must maintain aggregate assets of the following types, free from any lien or pledge, in an amount at least equal to the amount of our consolidated obligations outstanding:
 Cash;
 Obligations of, or fully guaranteed by, the U.S. government;
 Secured advances;
 Mortgages that have any guaranty, insurance or commitment from the U.S. government or any agency of the U.S. government; and
 Investments described in Section 16(a) of the Bank Act, which, among other items, includes securities that a fiduciary or trust fund may purchase under the laws of the state in which the FHLBank is located.

 Table 2 illustrates our compliance with the FHFA's regulations for maintaining aggregate assets at least equal to the amount of consolidated obligations outstanding as of December 31, 2024 and 2023 (dollar amounts in thousands):

 Table 2

 Total non-pledged assets
 $
 75,460,330
 $
 74,514,009

 Total carrying value of consolidated obligations
 $
 70,281,553
 $
 69,790,738

 Ratio of non-pledged assets to consolidated obligations
 1.07
 1.07

 The Office of Finance has responsibility for facilitating and executing the issuance of the consolidated obligations on behalf of the FHLBanks. It also prepares the FHLBanks' Combined Quarterly and Annual Financial Reports, services all outstanding debt, serves as a source of information for the FHLBanks on capital market developments and manages the FHLBanks' relationship with the nationally recognized statistical ratings organizations (NRSRO) with respect to ratings on consolidated obligations.

 Consolidated Obligation Bonds: Consolidated obligation bonds are primarily used to satisfy our funding needs. Typically, the maturities of these bonds range from less than one year to 30 years, but the maturities are not subject to any statutory or regulatory limit. Consolidated obligation bonds can be issued and distributed through negotiated or competitively bid transactions with approved underwriters or selling group members.

 Consolidated obligation bonds generally are issued with either fixed or variable rate payment terms that use a variety of standardized indices for interest rate resets including, but not limited to, SOFR. In addition, to meet the specific needs of certain investors in consolidated obligations, both fixed and variable rate bonds may also contain certain embedded features, which result in complex coupon payment terms and call features.

 Consolidated Obligation Discount Notes: The Office of Finance also sells consolidated obligation discount notes on behalf of the FHLBanks that generally are used to meet short-term funding needs. These securities have maturities up to one year and are offered daily through certain securities dealers in a discount note selling group. In addition to the daily offerings of discount notes, the FHLBanks auction discount notes with fixed maturity dates ranging from 4 to 26 weeks through competitive auctions held twice a week utilizing the discount note selling group. The amount of discount notes sold through the auctions varies based upon market conditions, investor demand, and/or on the funding needs of the FHLBanks. Discount notes are sold at a discount and mature at par.

 Derivatives
 FHLBank's Risk Management Policy (RMP) establishes guidelines for our use of derivatives. Interest rate swaps, interest rate cap and floor agreements, and other derivatives can be used as part of our interest rate risk management and funding strategies. The RMP, along with FHFA regulations, prohibits trading in, or the speculative use of, derivatives and limits credit risk to counterparties that arises from derivatives. In general, we have the ability to use derivatives to reduce funding costs for consolidated obligations and to manage other risk elements such as interest rate risk and mortgage prepayment risk.

 See Item 7A – "Quantitative and Qualitative Disclosures About Market Risk" for further information on derivatives.

 The Bank Act allows us to accept deposits from our members, housing associates, any institution for which we are providing correspondent services, other FHLBanks, and other government instrumentalities. We offer several types of deposit programs, including demand, overnight, and term deposits.

 Liquidity Requirements: To support deposits, FHFA regulations require us to have at least an amount equal to current deposits received from our members invested in obligations of the U.S. government, deposits in eligible banks or trust companies, or advances with remaining maturities not exceeding five years. In addition, we must meet the additional liquidity policies and guidelines outlined in our RMP. See Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Risk Management – Liquidity Risk Management" for further discussion of our liquidity requirements.

 Capital, Capital Rules and Dividends
 FHLBank Capital Adequacy and Form Rules: We must comply with regulatory requirements for total regulatory capital, leverage capital, and risk-based capital. Our RMP requires that we also maintain a ratio of total regulatory capital to total assets of not less than 4.6 percent of total assets, total capital stock to total assets of 2 percent, and permanent capital must exceed our risk-based capital requirement. To satisfy these capital requirements, we maintain a capital plan. The Gramm-Leach-Bliley Act (GLB Act) allows us to have two classes of stock, and each class may have sub-classes. Under our capital plan, we have two classes of authorized stock – Class A Common Stock and Class B Common Stock. Both classes have $100 par value per share. Class A Common Stock is required for membership. Class B Common Stock supports member activities with us, to the extent Class A Common Stock is insufficient to support the calculated activity requirement. The GLB Act and the FHFA rules and regulations define total capital for regulatory capital adequacy purposes as the sum of an FHLBank's permanent capital, plus the amounts paid in by its stockholders for Class A Common Stock; any general loss allowance, if consistent with U.S. generally accepted accounting principles (GAAP) and not established for specific assets; and other amounts from sources determined by the FHFA as available to absorb losses. The GLB Act and FHFA regulations define permanent capital for the FHLBanks as the amount paid in for Class B Common Stock plus the amount of an FHLBank's retained earnings, as determined in accordance with GAAP.

 Under the GLB Act and the FHFA rules and regulations, we are subject to risk-based capital rules. We may not redeem or repurchase any of our capital stock without FHFA approval if the FHFA or our board of directors determines that we have incurred, or are likely to incur, losses that result in, or are likely to result in, charges against our capital, even if we are in compliance with our minimum regulatory capital requirements. Therefore, a member's right to have its excess shares of capital stock redeemed is conditional on, among other factors, FHLBank maintaining compliance with regulatory capital requirements.

 See Item 5 – "Market for Registrant's Common Equity – Related Stockholder Matters and Issuer Purchases of Equity Securities," Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources - Capital" and Note 11 of the Notes to Financial Statements under Item 8 – "Financial Statements and Supplementary Data" for additional information regarding capital.

 Dividends: We may pay dividends from unrestricted retained earnings and current income. (For a discussion regarding restricted retained earnings, please see Joint Capital Enhancement Agreement under this Item 1.) Our board of directors may declare and pay dividends in either cash or capital stock. Under our capital plan, all dividends that are payable in capital stock must be paid in the form of Class B Common Stock, regardless of the class of stock upon which the dividend is being paid.

 Consistent with FHFA guidance in Advisory Bulletin (AB) 2003-AB-08, Capital Management and Retained Earnings, and other respective guidance, we adopted guidelines to establish a minimum or threshold level for our retained earnings in light of alternative possible future financial and economic scenarios, which are currently included under our RMP. The calculation of our minimum (threshold) level of retained earnings incorporates regulatory-based estimates of market risk and credit risk, and includes estimates for risk exposure from operational risk, settlement risk related to unsettled consolidated obligations, and net income volatility. The retained earnings threshold level fluctuates from period to period because it is a function of the size and composition of our balance sheet and the risks contained therein at that point in time. As of December 31, 2024, our retained earnings threshold was $0.7 billion. Retained earnings of $1.6 billion exceeded our retained earnings threshold by $0.9 billion at December 31, 2024.

 The retained earnings threshold is calculated quarterly and considered by the board of directors as part of each quarterly dividend declaration. The RMP also provides that meeting the established retained earnings threshold has priority over the payment of dividends, but that the board of directors must balance dividends on capital stock against the period over which the retained earnings threshold is met. During the year ended December 31, 2024, the threshold did not significantly affect the amount of dividends declared and paid.

 Joint Capital Enhancement Agreement (JCE Agreement) – We, along with the other FHLBanks, entered into a JCE Agreement intended to enhance the capital position of each FHLBank. More specifically, the intent of the JCE Agreement is to allocate a portion of each FHLBank's earnings to a Separate Restricted Retained Earnings Account (RRE Account) at that FHLBank. Thus, in accordance with the JCE Agreement, each FHLBank allocates 20 percent of its net income to an RRE Account and will do so until the balance of the account equals at least one percent of that FHLBank's average balance of outstanding consolidated obligations calculated as of the last day of each calendar quarter. Additionally, the JCE Agreement provides that amounts in restricted retained earnings in excess of 150 percent of an FHLBank's restricted retained earnings minimum (i.e., one percent of that FHLBank's average balance of outstanding consolidated obligations calculated as of the last day of each calendar quarter) may be released from restricted retained earnings. Restricted retained earnings are not available to pay dividends and are presented separately on the Statements of Condition.

 Tax Status
 Section 1433 of the Bank Act provides that we and the other FHLBanks are exempt from all federal, state and local taxation except for real property taxes.

 Assessments
 We are subject to a statutory AHP assessment based on a percentage of our earnings. The FHLBanks are required to set aside annually the greater of an aggregate of $100 million or 10 percent of their current year's income subject to assessment to be contributed to the following year's AHP. In accordance with FHFA guidance for the calculation of AHP expense, interest expense on mandatorily redeemable capital stock is added back to income before charges for AHP. Voluntary contribution amounts expensed as Other Expense reduce pre-assessment net income, which is the basis of the statutory AHP calculation, so the FHLBanks have agreed to contribute the amount of this impact to AHP as a voluntary "make-whole" contribution.

 Other Mission-Related Activities
 One of our core missions is to provide funding to support and sustain affordable housing and community lending in our district. We administer and fund a number of programs specifically designed to fulfill that mission. These programs provide housing opportunities for thousands of very low-, low- and moderate-income households and strengthen communities primarily in Colorado, Kansas, Nebraska, and Oklahoma.

 As we continue to look for opportunities to support our members, we have increased our commitment to voluntary programs designed to support and sustain affordable housing and community lending in our district. For 2024, we committed to provide 2.5 percent of our 2023 earnings (calculated as net income before our AHP assessment, voluntary contribution program expense, and interest expense on mandatorily redeemable capital stock). We exceeded this commitment with voluntary housing program expenses totaling 3.5 percent of 2023 net earnings. For 2025, the commitment was increased to 5 percent of 2024 net earnings. The 2024 funds primarily supported the Native American Housing Initiative (NAHI) program, Homeownership Possibilities Expanded (HOPE), and AHP Extra. In 2025, we introduced the Community Assistance Recovery Effort (CARE) disaster relief program and the Mortgage Rate Reduction Product (MRRP). Each of our programs are detailed below.

 Affordable Housing Program: Amounts specified by the statutory AHP requirements described in Item 1 – "Business – Assessments" are reserved for this program. AHP provides cash grants to members in partnership with sponsors (i.e., housing authorities, for-profit and not-for-profit organizations, developers, etc.) to finance the purchase, construction, or rehabilitation of very low-, low-, and moderate-income owner occupied or rental housing. As a competitive program, applications are scored based on commitments made to support housing needs in our district. Our assessments also finance the Homeownership Set-aside Program (HSP), which provides down payment, closing cost, and purchase-related repair assistance to very low-, low-, and moderate-income first-time households in Colorado, Kansas, Nebraska, and Oklahoma.

 Voluntary Housing and Community Investment Programs
 • Homeownership Possibilities Expanded: Providing access to homeownership to the "missing middle," HOPE supports households in our district that traditionally do not receive assistance but need subsidy to make homeownership accessible and affordable. HOPE is not limited to first-time homebuyers, and income limitations are expected to serve a wider range of households.
 • Native American Housing Initiatives Grants Program: The NAHI program was established in 2023 as a voluntary grant program that provides Native American tribes and tribally designated housing entities with access to grant funds intended to build their communities in support of housing for tribal members in FHLBank's district. NAHI supports tribal organizations working at the grassroots level, which are in the best position to identify tribal needs.
 • Community Assistance Recovery Effort: CARE provides assistance to members in the form of a matching grant to amplify the support our members provide to their communities when natural disasters occur. FHLBank members are in the best position to determine local needs following a disaster and to direct assistance where it will have the greatest impact.

 • Mortgage Rate Reduction Product: MRRP allows members to provide eligible households a reduced mortgage interest rate compared to the current market rate.

 Community Investment Cash Advance (CICA) Program: CICA loans to members specifically target underserved markets in both rural and urban areas. CICA loans represented 1.1 percent, 1.2 percent, and 1.4 percent of total advances outstanding as of December 31, 2024, 2023, and 2022, respectively. Programs offered during 2024 under the CICA Program, which is not funded through the AHP, include:
 • Community Housing Program (CHP) – CHP makes loans available to members for financing the construction, acquisition, rehabilitation, and refinancing of owner-occupied housing for households whose incomes do not exceed 115 percent of the median income for the area and rental housing occupied by or affordable for households whose incomes do not exceed 115 percent of the median income for the area. For rental projects, at least 51 percent of the units must have tenants that meet the income guidelines, or at least 51 percent of the units must have rents affordable to tenants that meet the income guidelines. We provide advances for CHP-based loans to members at our estimated cost of funds for a comparable maturity plus a mark-up for administrative costs; and
 • Community Development Program (CDP) – CDP provides advances to members to finance CDP-qualified member financing including loans to small businesses, small farms, small agribusiness or for community development purposes that meet one of the following criteria: (1) loans to firms that meet the Small Business Administration's (SBA) definition of a small business concern; (2) financing for businesses or projects located in an urban neighborhood, Census tract or other area with a median income at or below 100 percent of the area median; (3) financing for businesses, farms, ranches, agribusinesses, or projects located in a rural community, neighborhood, Census tract, or unincorporated area with a median income at or below 115 percent of the area median; (4) firms or projects located in a Native American Area or any Federally Declared Disaster Area; (5) projects in urban areas in which at least 51 percent of the employees of the project, or at least 51 percent of the families benefiting from or receiving services from the project, earn at or below 100 percent of the area median; or (6) projects in rural areas in which at least 51 percent of the employees of the project, or at least 51 percent of the families benefiting from or receiving services from the project, earn at or below 115 percent of the area median. We provide advances for CDP-based loans to members at our estimated cost of funds for a comparable maturity plus a mark-up for administrative costs.

 Competition
 Advances: Demand for advances is affected by, among other things, the cost of alternative sources of liquidity available to our members, including deposits from members' customers and other sources of liquidity that are available to members, including the Federal Reserve Bank's discount window. Members mostly access alternative funding other than advances through Federal funds purchased, the brokered deposit market, and repurchase agreements with financial counterparties. Large members may have broader access to funding through repurchase agreements with investment banks and commercial banks as well as access to the national and global credit markets. The availability of alternative funding sources to members can influence member demand for advances, with the cost of the alternative funding relative to advances being the primary consideration when accessing alternative funding. Other considerations include product availability through FHLBank, dividend rates on FHLBank stock, the member's creditworthiness, ease of execution, level of diversification, and availability of member collateral for other types of borrowings. We believe our advance product offerings are evolving to meet member demand as market conditions in the competitive environment change. All product development initiatives involve an evaluation of the market opportunity relative to the operational requirements of offering the product while maintaining high levels of risk management and regulatory compliance. Certain product initiatives may also require the filing of a New Business Activity Notice with and non-objection by our regulator.

 Mortgage Loans: We are subject to competition in purchasing conventional, conforming fixed rate residential mortgage loans and government-guaranteed residential mortgage loans. We face competition in the prices paid for these assets, customer service, and in ancillary services such as automated underwriting. The most direct competition for purchasing residential mortgage loans comes from the other housing GSEs, which also purchase conventional, conforming fixed rate mortgage loans, specifically Fannie Mae and Freddie Mac. To a lesser extent, we also compete with regional and national financial institutions that buy and/or invest in mortgage loans. Depending on market conditions, these investors may seek to hold, securitize, or sell conventional, conforming fixed rate mortgage loans. We continuously reassess our potential for success in attracting and retaining members for our mortgage loan products and services, just as we do with our advance products. We compete for the purchase of mortgage loans primarily on the basis of price, products and product features, and services offered.

 Debt Issuance: We compete with the U.S. government (including debt programs explicitly guaranteed by the U.S. government), U.S. government agencies, Fannie Mae, Freddie Mac, and other GSEs, as well as corporate, sovereign, and supranational entities for funds raised through the issuance of unsecured debt in the national and global capital markets. Collectively, Fannie Mae, Freddie Mac, and the FHLBanks are generally referred to as the housing GSEs, and the cost of the debt of each can be positively or negatively affected by political, financial, or other news that reflects upon government and government agency debt. If the supply of competing debt products increases without a corresponding increase in demand, our debt costs may increase. We compete for the issuance of debt primarily on the basis of rate, term, structure of the debt, liquidity of the instrument, and perceived risk of the issuer.

 Derivatives: The issuance of callable debt and the simultaneous execution of callable interest rate swaps with options that mirror the options in the debt have been an important source of competitive funding for us. As such, the depth of the markets for callable debt and mirror-image derivatives is an important factor of our relative cost of funds. There is considerable competition among high-credit-quality issuers, especially among the three housing GSEs, for callable debt and for derivatives. There can be no assurance that the current breadth and depth of these markets will be sustained.

 Regulatory Oversight, Audits and Examinations
 General: Our business is subject to extensive regulation and supervision. As discussed throughout this Form 10-K, the laws, regulations, and regulatory guidance to which we are subject cover all key aspects of our business, and directly and indirectly affect our product and service offerings, collateral practices, pricing, competitive position, relationship with members and third parties, capital structure, and liquidity practices. As a result, such laws and regulations have a significant effect on our results of operations and financial condition. For a discussion of risks relating to the complex body of laws and regulations to which we are subject, see Item 1A – "Risk Factors – Business Risk – Legislative and Regulatory". For a discussion of recent regulatory and legislative developments impacting us, see "Legislative and Regulatory Developments" under this Item 1.

 We are supervised and regulated by the FHFA, an independent agency in the executive branch of the U.S. government. The FHFA is responsible for providing supervision, regulation and housing mission oversight of the FHLBanks to ensure they fulfill their mission by operating in a safe and sound manner to serve as a reliable source of liquidity and funding for housing finance and community investment. The FHFA is funded in part through assessments from the FHLBanks, with the remainder of its funding provided by Fannie Mae and Freddie Mac; no tax dollars or other appropriations support the operations of the FHFA or the FHLBanks. To assess our safety and soundness, the FHFA conducts comprehensive annual examinations, as well as periodic reviews. Additionally, we are required to submit monthly information about our financial condition and results of operations to the FHFA. This information is available to all FHLBanks.

 Before a government corporation issues and offers obligations to the public, the Government Corporation Control Act provides that the Secretary of the Treasury will prescribe the form, denomination, maturity, interest rate, and conditions of the obligations; the manner and time issued; and the selling price. The Bank Act also authorizes the Secretary of the Treasury, at their discretion, to purchase consolidated obligations up to an aggregate principal amount of $4 billion. No borrowings under this authority have been outstanding since 1977.

 The U.S. Treasury receives the FHFA's annual report to Congress, monthly reports reflecting securities transactions of the FHLBanks, and other reports reflecting the operations of the FHLBanks. We must 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 a statement of financial condition, a statement of operations, a statement of cash flows, a statement of internal accounting and administrative control systems, and the report of the independent public accounting firm on the financial statements.

 Audits and Examinations: We have an internal audit department and our board of directors has an audit committee. The Chief Audit Executive reports directly to the audit committee. In addition, an independent registered public accounting firm audits our annual financial statements and effectiveness of internal controls over financial reporting. The independent registered public accounting firm conducts these audits following standards of the Public Company Accounting Oversight Board (United States) and Government Auditing Standards issued by the Comptroller General of the United States. The FHLBanks, the FHFA, and Congress all receive the audit reports.

 The Comptroller General has authority under the Bank Act to audit or examine the FHFA and the individual FHLBanks and to decide the extent to which they fairly and effectively fulfill the purposes of the Bank Act. Furthermore, the Government Corporation Control Act provides that the Comptroller General may review any audit of the financial statements conducted by an independent registered public accounting firm. If the Comptroller General conducts such a review, the results of the review and any recommendations must be reported to Congress, the Office of Management and Budget, and the applicable FHLBank. The Comptroller General may also conduct an audit of any financial statements of any individual FHLBank.

 Human Capital Resources
 Our workforce is a vital contributor to the success of our strategic business objectives. In supporting our people, 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, 2024, we had 259 full-time and 3 part-time employees. 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 strengthens our success. Adding new employees contributes to new ideas, continuous improvement, and our goals of having a diverse and inclusive workforce with a sense of belonging and an equitable workplace. As of December 31, 2024, the average tenure of our employees was 9.6 years. There are no collective bargaining agreements with our employees.

 Total Rewards: We seek to attract, develop and retain talented employees to achieve our strategic business initiatives, enhance business performance, increase shareholder value and provide members a reasonable return on their investment in FHLBank. To achieve this objective, we focus on a combination of development programs, benefits and employee wellness programs and strive to recognize and reward performance. Specifically, our programs include:
 • Cash compensation – competitive base salary, performance-based incentives and other cash subsidies;
 • Benefits – health insurance, life and accidental death and dismemberment insurance, supplemental life insurance, and a 401(k) retirement savings plan with a competitive employer match;
 • Wellness program – employee assistance program, interactive education sessions focused on employee total health, and sporting events sponsorships;
 • Time away from work – including paid time off for vacation, illness, personal, holiday, and volunteer opportunities;
 • Development – leadership, professional and personal development opportunities; fee reimbursement for external development programs; employee engagement opportunities to drive our Employer of Choice vision; and educational assistance programs;
 • Work/Life balance – flexible work arrangements, including a hybrid work schedule allowing a balance between in-office and remote work, two-thirds paid salary continuation for short-term disability, 100 percent paid parental, military, bereavement, jury duty and court appearances leave;
 • Management succession planning – our board of directors and leadership actively engage in management succession planning, with a defined plan for our Executive Team, which is reviewed and adjusted annually, to support smooth transitions in the event of an unplanned or planned absence of an executive and to help assure successor executives are fully qualified to assume responsibility for ongoing operations; and
 • Our Performance Management framework includes planned quarterly, documented discussions coordinated between manager and employee. At the start of every quarter, managers and employees work together to set new goals or update existing goals and review the previous quarter's goals. In addition to encouraging goal alignment with ever-changing business needs, this quarterly framework also is intended to provide a natural opportunity for feedback and development conversations to occur between employee and manager throughout the year.

 Culture: FHLBank's culture is an extension of our corporate vision to be the Employer of Choice. We focus on ensuring our business partners' talents are optimized and we celebrate our successes together. We believe a necessary component of ensuring culture is the way we operationalize our core values. For example, we have a statutory requirement to advance diversity. We further this by working to ensure our core values are a part of our DNA. It is a strategic business priority for FHLBank to ensure all of our business activities are meritorious and inclusive. We strive to ensure that individual talent, merit, and qualifications are identified, recognized and leveraged in all business processes, including but not limited to procurement and other financial activities. We see this commitment through the development and execution of a three-year strategic plan. Progress toward the strategic objectives are regularly reported to management and the board of directors. We offer a range of development opportunities for our employees to connect and grow both personally and professionally. We consider learning and innovation an important component of our organizational strategy. The commitment to our culture and core values is incorporated as a key component of our incentive plan framework, which reflects our organizational focus and individual and collective accountability. We evaluate our recruiting, promotion and succession planning processes regularly to ensure an unbiased and merit-based process.

 Legislative and Regulatory Developments
 Significant regulatory actions and developments for the period covered by this report not previously disclosed are summarized below.

 Regulatory Environment. FHLBank is subject to various legal and regulatory requirements and expectations. Changes in the regulatory environment under the current administration, including regulatory priorities and areas of focus, could affect FHLBank's business operations, results of operations, and reputation. Certain actions by the current federal executive administration suggest FHLBank's regulatory environment is changing. For example, on January 20, 2025, the administration ordered all executive departments and agencies to, among other things, not propose or issue any rule until a department or agency head appointed or designated by the president reviews and approves the rule. This order applies to proposed rules, among other regulatory actions, including those discussed in this Legislative and Regulatory Developments section. As a result, there is uncertainty with respect to the ultimate result of the impacted regulatory actions and their ultimate effects on FHLBank and the FHLBank System. Relatedly, certain executive orders may impact the regulatory priorities of the federal regulators, including FHFA.

 FHFA's Review and Analysis of the FHLBank System. On November 7, 2023, FHFA issued a written report titled "FHLBank System at 100: Focusing on the Future," (System at 100 Report) presenting its review and analysis of the FHLBank System and the actions and recommendations it plans to pursue in service of its vision for the future of the FHLBank System. The report focused on four broad themes: (1) update and clarify its regulatory statement of the FHLBanks' mission; (2) clarify the FHLBanks' liquidity role; (3) expand the FHLBanks' housing and community development focus; and (4) promote the FHLBanks' operational efficiency. The FHFA has since issued rulemakings and requests for input and made legislative recommendations for the FHLBank System in its 2023 Report to Congress issued on June 14, 2024 consistent with proposed plans and actions included in the System at 100 Report. Given the current regulatory environment, FHLBank is not able to predict what actions, if any, will ultimately result from the FHFA's recommendations in the report, the timing of any such actions, the extent of any changes to FHLBank or the FHLBank System, or the ultimate effect on FHLBank or the FHLBank System of any such actions. For discussion of the related risks, see Item 1A - "Risk Factors.

 Advisory Bulletin on Federal Home Loan Bank System Climate-Related Risk Management. On September 30, 2024, the FHFA issued an advisory bulletin setting forth the FHFA's expectation that each FHLBank should integrate climate-related risk management into its existing enterprise risk management framework over time. The advisory bulletin provides that an effective framework should address climate-related risk governance, such as selection of the related risk appetite and setting strategy and objectives, establishing and implementing plans to mitigate and monitor and report material exposures to such risks, and establishing roles and responsibilities for the board of directors and management. The advisory bulletin requires the FHLBanks to establish metrics that track exposure to climate-related risks and collect related data to quantify risk exposures; conduct climate-related scenario analyses; implement processes to report and communicate climate-related risks to internal stakeholders; and have a plan to respond to natural disasters and support climate resiliency. The advisory bulletin also requires FHLBank to identify and incorporate climate-related legal and compliance risk into its existing enterprise risk management framework, including applicable climate-related regulations and federal and state disclosure requirements.

 Relatedly, FHLBank continues to monitor developments relevant to the SEC's final rule on the enhancement and standardization of climate-related disclosures and notes recent statements from the Acting SEC Chair that indicate that the SEC could take steps to rescind the rule. FHLBank also continues to monitor the status of certain climate-related state laws to assess their possible impacts on FHLBank.

 Advisory Bulletin on FHLBank Member Credit Risk Management. On September 27, 2024, FHFA issued an advisory bulletin setting forth FHFA's expectations that an FHLBank's underwriting and credit decisions should reflect a member's financial condition and not rely solely on the collateral securing the member's credit obligations. The advisory bulletin provides guidance for the FHLBanks to implement policies for credit risk governance, member credit assessment and monitoring of credit conditions, among other considerations. It also provides guidance on the oversight of members in financial distress by recommending implementation of escalation policies, processes for coordination with members' prudential regulators, and management policies addressing default, failure, and insolvency situations. FHLBank is in the process of implementing appropriate adjustments to its relevant policies and procedures.

 FHFA Final Rule on Fair Lending, Fair Housing, and Equitable Housing Finance Plans. On May 16, 2024, the FHFA published in the Federal Register its final rule that specifies requirements related to the FHLBanks' compliance with fair housing and fair lending laws and related regulations, including the Fair Housing Act and the Equal Credit Opportunity Act, and prohibitions on unfair or deceptive acts or practices under the Federal Trade Commission Act (FTC Act). The final rule: (1) addresses the enforcement authority of the FHFA; (2) articulates standards related to boards of directors' oversight of fair housing, fair lending, and the prohibitions on unfair or deceptive acts or practices under the FTC Act; and (3) requires each FHLBank to annually report actions it voluntarily takes to address barriers to sustainable housing opportunities for underserved communities (Equitable Housing Report Requirements). The final rule became effective on July 15, 2024, except that the Equitable Housing Report Requirements will become effective on February 15, 2026. The FHFA has since issued advisory bulletins setting forth its expectations regarding the FHLBanks' compliance with the final rule. FHLBank has reviewed this rule and related advisory bulletins and has taken steps to comply with the requirements and proceed in accordance with the guidance.

 Agreements Regarding Process to End the Conservatorships of Fannie Mae and Freddie Mac (the Enterprises). The Enterprises have been in conservatorship since September 2008. On January 2, 2025, the FHFA and the U.S. Department of the Treasury entered into certain agreements one of which, among other things, sets out a process that would govern the resolution of the conservatorships of the Enterprises other than in the instances of receivership of the Enterprises. Under applicable law, FHLBank is permitted to invest in Enterprise unsecured debt in an amount of up to 100 percent of its regulatory capital, which consists of Class B stock, Class A stock, if any, retained earnings, and mandatorily redeemable capital stock. However, the amount of such debt in which FHLBank is permitted to invest could be reduced or eliminated entirely depending on the nature of the resolution of the Enterprises' conservatorships. The resolution of the Enterprises' conservatorships could result in heightened competition with the Enterprises for the purchase of mortgage loans. For example, the Enterprises currently operate subject to certain asset and indebtedness limitations. However, the resolution of their conservatorships could result in such limitations being lifted resulting in increases of their purchases of mortgage loans, which could result in upward pressure on mortgage loan prices. As a result, FHLBank's opportunities to purchase mortgage loans or the profitability from its investments in mortgage loans could be reduced. The ultimate resolution of the Enterprises' conservatorships could result in an actual or perceived competitive advantage to the Enterprises in the issuance of unsecured debt relative to the FHLBanks thereby resulting in less favorable debt funding costs for FHLBank.

 Proposed Rule on FHLBank System Boards of Directors and Executive Management. On November 4, 2024, the FHFA published a notice of proposed rulemaking in the Federal Register that would revise regulations addressing boards of directors and overall corporate governance of the FHLBanks and the Office of Finance. If adopted as proposed, it would, among other things: (1) affect director compensation by allowing the Director of the Finance Agency to establish an annual amount of director compensation that the Director determines is reasonable; (2) require FHLBank to complete and submit background checks to the FHFA on every nominee for a directorship; (3) change public interest independent director qualifications, in part, by requiring a person to have advocated for, or otherwise acted primarily on behalf of or for the direct benefit of, consumers or the community to meet the representation requirement; (4) expand the list of qualifying experiences for all FHLBank independent directors to include AI, information technology and security, climate-related risk, CDFI business models, and modeling; and (5) establish a review process for director performance and participation, together with a process for removing FHLBank directors for cause. Other proposed revisions address, among other things, FHLBank conflicts of interest policies, covering all FHLBank employees, including specific limitations on executive officers and senior management, and record retention.

 Several of the proposed revisions would result in significant changes to the nomination, election, and retention of directors on FHLBank's board if adopted as proposed. Additional director eligibility requirements and limitations on, and potential reductions or limitations to, director compensation resulting from the proposed rule could hinder FHLBank's ability to recruit and retain the talent and expertise that are critical to FHLBank's ability to satisfy its mission, particularly given the growing complexities of the finance industry. FHLBank continues to consider the effect that the proposed rule could have.

 Item 1A: Risk Factors
 In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition, results of operations, cash flows or ability to pay dividends in future periods. While we believe we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties not currently known to us or that we currently deem to be immaterial that may adversely affect our business, financial condition, results of operations, cash flows or ability to pay dividends in the future.

 Business Risk - General
 Changes in general economic and political conditions could have a material adverse effect on our business, results of operations or ability to pay dividends. Our business and results of operations, which are geographically constrained to Colorado, Kansas, Nebraska and Oklahoma, are sensitive to changes in general economic conditions, particularly in the housing market and regional economic conditions within our district. For example, if home prices decline or the unemployment rate increases, the value of collateral securing member credit may decline and the risk of nonpayment of borrowers of our members may increase, which could in turn increase the possibility of under-collateralization and the risk of loss if a member defaults. Deterioration in the residential mortgage markets could also affect the value of collateral securing our mortgage loan portfolio, increasing the risk of loss due to credit impairment, as well as possible realized losses if we were forced to liquidate the collateral. Unfavorable economic and market conditions can be caused by many factors, which are largely influenced by macroeconomic conditions and other factors beyond our control, including global inflationary pressures, geopolitical conflict, levels of consumer and business confidence economic sanctions, commodity (including energy) prices and supply, a recession or economic slowdown, trade policies, foreign currency exchange rates, changing policy positions or priorities, natural disasters, pandemics or other widespread health emergencies, terrorist attacks, cyberattacks and civil unrest, economic or other sanctions, or other unanticipated or catastrophic events could create economic and financial disruptions and uncertainties. Changes in any of these factors could adversely affect our business, results of operations, and ability to pay dividends.

 Our business and results of operations and that of our members 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., and the U.S. Treasury. Fiscal policies, including policies of the Federal Reserve, directly and indirectly influence the yield on interest-earning assets and the cost of interest-bearing liabilities for us and our members, which could adversely affect our financial condition, results of operations and ability to pay dividends. Sudden or large increases in the supply of U.S. Treasury securities could lead to a general increase in short-term market interest rates, including those for short-term GSE debt securities.

 Additionally, an unpredictable or volatile political environment in the United States or geopolitical instability could negatively impact business and market conditions, economic growth, financial stability and business, consumer, investor and regulatory sentiments, any one or more of which could have a material adverse impact on our financial condition and results of operations. It is difficult to predict the legislative and regulatory changes that may result in connection with the new administration and changes in the make-up of Congress, and the broader economic implications due to changes in governing ideology and style. Changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs, may cause inflation, which could impact the prices of products sold by our borrowers and have the potential to reduce demand for their products impacting their profitability and making it difficult for our borrowers to repay their loans. Uncertainty surrounding the federal fiscal policymaking process, the medium and long-term fiscal outlook of the federal government and future tax rates are concerns for businesses, consumers and investors. Adverse economic conditions and governmental policy responses to such conditions could have a material adverse effect on our business, financial position, and results of operations.

 If economic and market conditions deteriorate, it could have an adverse effect on our business, including the demand for our products and services, and the value of the collateral securing advances, investments, and mortgage loans held for portfolio.

 Natural disasters, including those related to climate change, severe weather, public health crises, acts of war or terrorism or other external events could have a material adverse impact on our members and our business. Regions within our district are subject to risks from severe weather, including tornadoes, floods, drought, or other natural disasters, or pandemics or other health crises, acts of war or terrorism and other adverse external events. Climate change is increasing the frequency and intensity of these severe weather events. Natural disasters, including those resulting from significant climate changes, could damage or destroy our properties (headquarters or business resiliency center), damage or dislocate the facilities of our members, damage or destroy collateral that members have pledged to secure advances or mortgages, damage or destroy collateral securing certain securities, disrupt business for us or our members, negatively impact the livelihood of borrowers of members, or otherwise could cause significant economic dislocation in the affected areas of our region. Any of these situations may adversely impact our financial condition and results of operations.

 Climate change and responses to climate change could have a material adversely affect our business, financial condition or results of operations. Concerns over the long-term impacts of climate change have led and will likely continue to lead to governmental efforts to mitigate such impacts. Consumers and businesses are also changing their behavior and business preferences as a result of climate change concerns. New governmental regulations or guidance relating to climate change, as well as changes in behavior and preferences of consumers and businesses could adversely impact our members and our business, including the potential for an increase in climate risk assessment, disclosure, and supervision by our regulators such as those reflected in the advisory bulletin issued by the FHFA in September 2024 on FHLBank System climate-related risk management. New or modified laws and regulations, along with increased stakeholder expectations, related to these matters may increase the costs of compliance for us and our members and alter the environment in which they conduct their businesses. The shift toward a lower-carbon economy, driven by policy regulations, low-carbon technology advancement, consumer sentiment, and/or liability risks, may negatively impact our business model and/or the business models of our members, asset valuations, and operating costs. To the extent that climate change and responses to climate change negatively impact the businesses and financial condition of our members, including members with exposure to the energy industry, our credit risk associated our members may increase.

 Business Risk - Legislative and Regulatory
 Our business has been, and may continue to be, adversely impacted by legislation and other ongoing actions by the U. S. government in response to periodic disruptions in the financial markets. To the extent that any actions by the U.S. government in response to an economic downturn, recession, inflation or other macro-level events or conditions cause a significant decrease in the aggregate amount of advances, investments, or mortgage loans or increase our operating costs, our financial condition and results of operations may be adversely affected. The FHFA also continues to issue proposed and final regulatory and other requirements. In addition, new or modified legislation or regulations governing our members may affect our ability to conduct business or our cost of doing business with our members. We cannot predict the effect of any new regulations or other regulatory guidance on our operations. Changes in regulatory requirements could result in adverse effects in, among other things, cost of funds, capital requirements, accounting policies, liquidity management, debt issuance, derivative hedging activities, permissible business activities, additional contributions to FHLBank's AHP, membership base, membership eligibility, our members' access to our products and services (including whether a member meets required tangible capital levels to access advances), and the size, scope, and nature of FHLBanks' lending, investment, and mortgage purchase program activities. These changes could negatively affect our financial condition, results of operations, ability to pay dividends, or ability to redeem or repurchase capital stock.

 See Item 1 – "Business – Legislative and Regulatory Developments" for more information on potential future legislation and other regulatory activity affecting us.

 We are subject to a complex body of laws and regulatory and other requirements that could change in a manner detrimental to our operations. The FHLBanks are GSEs organized under the authority of the Bank Act, and, as such, are governed by federal laws, regulations and other guidance adopted and applied by the FHFA. From time to time, Congress has amended the Bank Act and amended or enacted other legislation in ways that have significantly affected the FHLBanks and the manner in which the FHLBanks carry out their housing finance mission and business operations. New or modified legislation enacted by Congress or states and regulations or policies implemented by the FHFA could have a negative effect on our ability to conduct business or on our cost of doing business, or affect our members' ability or motivation to acquire or own our capital stock or use of our products and services. There is a risk that actions by the FHFA toward Fannie Mae and Freddie Mac may have an unfavorable impact on the FHLBanks' operations and/or financial condition because of the significant difference in their business models compared to ours. Congress is considering broad legislation for reform of GSEs as a result of the disruptions in the financial and housing markets and the conservatorships of Fannie Mae and Freddie Mac. We do not know how, when, or to what extent GSE reform legislation will be adopted, and if adopted, how it would impact the business or operations of FHLBank or the FHLBank System. We are, or may also become, subject to further regulations promulgated by the SEC, Commodity Futures Trade Commission (CFTC), Federal Reserve Bank, Financial Crimes Enforcement Network, or other regulatory agencies. In addition, there is a risk that our funding costs and access to funds could be adversely affected by changes in investors' perception of the systemic risks generally associated with Fannie Mae and Freddie Mac or risks arising from the ultimate resolution to their conservatorship, could adversely affect funding costs, access to funding, competitive position, and our financial condition and results of operations.

 Following a comprehensive review, the FHFA issued the System at 100 Report on November 7, 2023, presenting its review and analysis of the FHLBank System and the actions and recommendations that it plans to pursue over a multi-year effort, in service of its vision for the FHLBank System. The report focuses on the FHLBank System's: (1) mission; (2) role as a stable and reliable source of liquidity; (3) role in housing and community development; and (4) operational efficiency, structure and governance.

 We are not able to predict what changes, if any, will ultimately result from FHFA's recommendations in the report nor are we able to predict the extent or timing of such changes, particularly in light of the changes in FHFA's leadership and potential changes in FHLBank's regulatory environment, including without limitation, as discussed in Part I. Item 1: Business – Recent Regulatory and Legislative Developments. Any such changes as well as any resulting increased scrutiny of FHLBank and the FHLBank System and its mission and activities, however, could materially affect FHLBank's business operations, results of operations and reputation, and the value of FHLBank membership.

 A majority of the states, and some municipalities, have enacted laws prohibiting mortgage loans considered predatory or abusive. Some of these laws impose liability for violations not only on the originator, but also upon purchasers and assignees of mortgage loans. We take measures that we consider reasonable and appropriate to reduce our exposure to potential liability under these laws and are not aware of any potential or pending claim, action, or proceeding asserting that we are liable under these laws. However, there can be no assurance that we will never have any liability under predatory or abusive lending laws. This may negatively impact our financial condition and results of operations and potentially negatively impact our reputation.

 We face a risk of noncompliance and enforcement action with respect to the Bank Secrecy Act and other anti-money laundering statutes and regulations. We are generally not subject to the state and federal banking laws affecting U.S. retail depository financial institutions. However, the Bank Act requires the FHLBanks to submit reports to the FHFA concerning transactions involving loans and other financial instruments that involve fraud or possible fraud. In addition, we are required to maintain an anti-money laundering program, under which we are required to report suspicious transactions to the Financial Crimes Enforcement Network (FinCEN) pursuant to the Bank Secrecy Act (BSA) and the Patriot Act. The BSA and the Patriot Act require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and to file reports such as suspicious activity reports and currency transaction reports. Violation of such requirements may result in significant civil money penalties imposed by federal banking agencies and FinCEN, which agencies have recently engaged in coordinated enforcement efforts against banks and other financial services providers with the U.S. Department of Justice (DOJ), the Drug Enforcement Administration and the Internal Revenue Service (IRS). We are also subject to increased scrutiny of compliance with the rules enforced by the Office of Foreign Asset Control, which may require sanctions for dealing with certain persons or countries. If our policies, procedures and systems are deemed deficient, we could be subject to fines and regulatory actions. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could have a material adverse effect on our business, results of operations and ability to pay dividends.

 Business Risk - Strategic
 We face competition for advances and access to funding, which could adversely affect our business, financial condition or results of operations. Our primary business is making advances to our members. We compete with other suppliers of wholesale funding, both secured and unsecured, including investment banks, commercial banks, and, in certain circumstances, other FHLBanks. Our members have access to alternative funding sources that may offer more favorable terms than we offer on our advances, including more flexible credit or collateral standards. Many of our competitors offer products and terms that we cannot offer.

 The availability of alternative funding sources to our members may significantly decrease the demand for our advances. Any change we might make in pricing our advances, to compete more effectively with competitive funding sources, may decrease our profitability on advances. A decrease in the demand for our advances or a decrease in our profitability on advances, would negatively affect our business, financial condition and results of operations.

 Likewise, our acquisition of mortgage loans is subject to competition. The most direct competition for purchases of mortgage loans comes from other buyers of conventional, conforming, fixed rate mortgage loans, such as Fannie Mae and Freddie Mac. Increased competition can result in the acquisition of a smaller market share of the mortgage loans available for purchase and, therefore, lower income from this business activity.

 We also compete in the capital markets with Fannie Mae, Freddie Mac, and other GSEs, as well as corporate, sovereign, and supranational entities for funds raised through the issuance of consolidated obligations and other debt instruments. Increases in the supply of competing debt products may, in the absence of increases in demand, result in higher debt costs or lower amounts of debt issued at the same cost. Increased competition could adversely affect our ability to access funding, reduce the amount of funding available to us, or increase the cost of funding available to us. Any of these results could adversely affect our financial condition, results of operations or ability to pay dividends or redeem or repurchase capital stock.

 Member mergers or consolidations, failures, changes in member eligibility, or other losses or changes in member business with us could have a material adverse effect on our business and results of operations. As the financial services industry has consolidated, acquisitions involving some of our members have resulted in membership withdrawals or business level decreases. Additional acquisitions that lead to similar results are possible, including acquisitions in which the acquired institutions are merged into institutions located outside our district with which we cannot do business. Our risk of loss resulting from a single event (such as the loss of a member's business due to the member's acquisition by a non-member or a member being deemed ineligible for continued membership) would become proportionately greater if our advances and capital becomes more concentrated.

 We could also be adversely impacted by the reduction in business volume that would arise from the failure of one or more of our members. If a member institution fails, although we are entitled to liquidate pledged collateral upon default, historically, failures have been resolved either through repayment directly from the FDIC or through the purchase and assumption of the advances by another surviving financial institution. Additionally, if members become financially distressed, we may, at the request of their regulators, decrease lending limits or, in certain circumstances, cease lending activities to certain members if they do not have adequate eligible collateral to support additional borrowings. If members are unable to obtain sufficient liquidity from us, that member's financial position may continue to deteriorate. This may negatively impact our reputation and, therefore, negatively impact our financial condition or results of operations.

 We have a high concentration of advances and capital with a few members, and a loss of, or change in business activities with, such institutions could have a material adverse effect on our business and results of operations. We have a concentration of advances and capital with a few institutions (see Table 21). A reduction in advances by such institutions, or the loss of membership by such institutions, whether through merger, consolidation, withdrawal, or other action, may result in a reduction in our total assets and a possible reduction of capital as a result of the repurchase or redemption of capital stock. The reduction in assets and capital may also reduce our net income. Although our business model is designed to enable us to expand and contract our balance sheet as our members' credit needs change, a lack of sufficient advance balances or a prolonged material decline in advances could adversely affect our business, results of operations or ability to pay dividends.

 Changes in our credit ratings may adversely affect our business operations. As of February 28, 2025, we are rated Aaa with a negative outlook by Moody's and AA+ with a stable outlook by S&P. Adverse revisions to or the withdrawal of our credit ratings could adversely affect us in a number of ways. It might influence counterparties to limit the types of transactions they would be willing to enter into with us or cause counterparties to cease doing business with us. We have issued letters of credit to support deposits of public unit funds with our members. In some circumstances, loss of or reduction in any of our current ratings could result in our letters of credit no longer being acceptable to collateralize public unit deposits or other transactions. We have also executed various standby bond purchase agreements (SBPA) in which we provide a liquidity facility for bonds issued by the HFAs by agreeing to purchase the bonds in the event they are tendered and cannot be remarketed in accordance with specified terms and conditions. If our current short-term ratings are reduced, suspended, or withdrawn, the issuers will have the right to terminate these SBPAs, resulting in the loss of future fees that would be payable to us under these agreements.

 Changes in the credit standing of the U.S. Government or other FHLBanks, including the credit ratings assigned to the U.S. Government or those FHLBanks, could adversely affect us. Pursuant to criteria used by S&P and Moody's, the FHLBank System's debt is linked closely to the U.S. sovereign rating because of the FHLBanks' status as GSEs and the public perception that the FHLBank System would be likely to receive U.S. government support in the event of a crisis. The U.S. government's fiscal challenges could impact the credit standing or credit rating of the U.S. government, which could in turn result in a revision of the rating assigned to us or the consolidated obligations of the FHLBank System.

 The FHLBanks issue consolidated obligations that are the joint and several liability of all FHLBanks. Significant developments affecting the credit standing of one or more of the other FHLBanks, including revisions in the credit ratings of one or more of the other FHLBanks, could adversely affect the cost of consolidated obligations. An increase in the cost of consolidated obligations would adversely affect our cost of funds and negatively affect our financial condition. As of February 28, 2025, the consolidated obligations of the FHLBanks are rated Aaa/P-1 by Moody's and AA+/A-1+ by S&P. All of the FHLBanks are rated Aaa with a negative outlook by Moody's and AA+ with a stable outlook by S&P. Moody's negative outlook for the FHLBanks aligns with Moody's negative outlook on the ratings of the U.S. government. Changes in the credit standing or credit ratings of one or more of the other FHLBanks could result in a revision or withdrawal of the ratings of the consolidated obligations by the rating agencies at any time, which may negatively affect our cost of funds and our ability to issue consolidated obligations for our benefit. A negative rating action on the U.S. government would likely result in the same rating action for the FHLBanks.

 Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities. We are subject to various privacy, information security and data protection laws, including requirements concerning security breach notification and we could be negatively impacted by these laws. For example, we are subject to the GLB Act which, among other things: (1) imposes certain limitations on our ability to share non-public personal information about our members with non-affiliated third parties; (2) requires that we provide certain disclosures to members about our information collection, sharing and security practices and afford members the right to "opt out" of any information sharing by us with non-affiliated third parties (with certain exceptions); and (3) requires that we develop, implement and maintain a written comprehensive information security program containing safeguards that are appropriate based on our size and complexity, the nature and scope of our activities and the sensitivity of member information we process, as well as plans for responding to data security breaches. Many state and federal banking regulators, states and foreign countries have also enacted data security breach notification requirements with varying levels of individual, consumer, regulatory or law enforcement notification in certain circumstances in the event of a security breach. Moreover, legislators and regulators in the United States and other countries are increasingly adopting or revising privacy, information security and data protection laws that potentially could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of member or employee information and some of our current or planned business activities. This could also increase our costs of compliance and business operations and could reduce income from certain business initiatives. This includes increased privacy-related enforcement activity at the federal level by the Federal Trade Commission, as well as at the state level.

 Compliance with current or future privacy, data protection and information security laws (including those regarding security breach notification) affecting member or employee data to which we are subject could result in higher compliance and technology costs and could restrict our ability to provide certain products and services, which could have a material adverse effect on our business, financial condition or results of operations. Our failure to comply with data privacy, data protection and information security laws could result in potentially significant regulatory or governmental investigations or actions, litigation, fines, sanctions and damage to our reputation, which could have a material adverse effect on our business, financial condition or results of operations.

 We may become liable for all or a portion of the consolidated obligations for which one or more of the other FHLBanks are the primary obligors, which could have a material adverse effect on our business and results of operations. Under the Bank Act and FHFA regulations, we are jointly and severally liable with the other FHLBanks for all consolidated obligations issued on behalf of all FHLBanks through the Office of Finance regardless of whether we receive all or any portion of the proceeds from any particular issuance of consolidated obligations. If another FHLBank were to default on its obligation to pay principal or interest on any consolidated obligation, the FHFA may allocate the outstanding liability among one or more of the remaining FHLBanks on a pro rata basis or on any other basis the FHFA may determine. In addition, we cannot pay any dividends to members or redeem or repurchase any shares of our capital stock unless the principal and interest due on all our consolidated obligations have been paid in full. As a result, our ability to pay dividends to our members or to redeem or repurchase shares of our capital stock could be affected not only by our own financial condition, but also by the financial condition of one or more of the other FHLBanks.

 Credit Risk
 Declines in U.S. home prices or weaknesses in activity in the U.S. housing and mortgage markets may undermine the need for wholesale funding, which could have a material adverse impact on our business and results of operations. A deterioration of the U.S. housing market and national decline in home prices could adversely impact the financial condition of a number of our members, particularly those whose businesses are concentrated in the mortgage industry. One or more of our members may default on their obligations to us for a number of reasons, such as changes in financial condition, a reduction in liquidity, operational failures, or insolvency of their borrowers. A reduction in mortgage lending or mortgage assets held by member institutions may reduce their demand for wholesale funding.

 Defaults by one or more of our institutional counterparties, including a derivatives clearinghouse, on its obligations to us could adversely affect our results of operations or financial condition. We have a high concentration of credit risk exposure to financial institutions as counterparties, some of which are outside of the United States. Our primary exposures to institutional counterparty risk are with: (1) obligations of mortgage servicers that service the loans we have as collateral on our credit obligations; (2) third-party providers of credit enhancements on the MBS that we hold in our investment portfolio, including mortgage insurers, bond insurers, and financial guarantors; (3) third-party providers of PMI and supplemental mortgage insurance (SMI) for mortgage loans purchased under the MPF Program; (4) uncleared derivative counterparties; (5) third-party custodians and futures commission merchants associated with cleared derivatives; and (6) unsecured money market and Federal funds investment transactions. A default by a counterparty could result in losses if our credit exposure to the counterparty was under-collateralized or our credit obligations to the counterparty were over-collateralized, and could also adversely affect our ability to conduct our operations efficiently and at cost-effective rates, which in turn could have a material adverse effect on our business, results of operations or ability to pay dividends or redeem or repurchase capital stock.

 We are required to centralize our risk with the derivatives clearinghouses. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and implementing Commodity Futures Trading Commission (CFTC) regulations require all clearable derivatives transactions to be cleared through a derivatives clearinghouse, as opposed to the pre-Dodd-Frank Act methods of entering into derivatives transactions that allowed us to distribute our risk among various counterparties. A default by a derivatives clearinghouse could: adversely affect our financial condition in the event the derivatives clearinghouse is unable to make payments owed to us or return our posted initial margin; jeopardize the effectiveness of derivatives hedging transactions; and adversely affect our operations as we may be unable to enter into certain derivatives transactions or do so at cost-effective rates.

 Securities or loans pledged as collateral by our members or collateral securing mortgage loans or MBS investments could be adversely affected by the devaluation of, or inability to liquidate, the collateral in the event of a default. Although we require advances and other extensions of credit to be fully secured with collateral and require borrowers to pledge additional collateral when deemed necessary to protect ourselves from credit losses, changes in market conditions, uninsured or underinsured natural disasters, or other factors may cause the collateral to deteriorate in value, which could lead to a credit loss in the event of a default by a member or a borrower of a member and could have a materially adverse effect on our business and results of operations. If borrowers are unable to pledge additional collateral to fully secure their obligations, whether due to significant financial stress, market volatility, or otherwise, advance levels could decrease and/or credit risk could increase. During economic downturns or periods of significant economic and financial disruptions and uncertainties, the number of members exhibiting significant financial stress may increase, which may expose us to additional member credit risk. Changes in market perception of the financial strength of a financial institution can occur very rapidly and can be difficult to predict, as reflected in the failures of several members of other FHLBanks in March and May 2023. A reduction in liquidity in the financial markets or otherwise could have the same effect.

 Our funding depends on our ability to access the capital markets, an interruption of which could have a material adverse effect on our business and results of operations. We conduct our business and fulfill our public purpose primarily by acting as an intermediary between our members and the capital markets. Our ability to obtain funds through the sale of consolidated obligations depends in part on prevailing conditions in the capital markets (including investor demand). Our counterparties in the capital markets are also subject to regulations that could alter the balance sheet composition, market activities, and behavior of our counterparties in a way that could be detrimental to our access to the capital markets and overall financial market liquidity, which could have a negative impact on our funding costs and results of operations. Further, we rely on the Office of Finance for the issuance of consolidated obligations, and a failure or interruption of services provided by the Office of Finance could hinder our ability to access the capital markets. Certain events, such as severe cybersecurity, financial, economic, geopolitical, or other disruptions, could limit or prevent us from accessing the capital markets for an undeterminable period of time. An event that precludes us from accessing the capital markets through the sale of consolidated obligations may also limit our ability to enter into transactions to obtain funds from other sources. External forces are unpredictable and difficult to prevent, but can have a significant impact on our ability to manage our financial needs and to meet the credit and liquidity needs of our members. Accordingly, we cannot make any assurance that we will be able to obtain funding on terms acceptable to us in the future, if at all. If we cannot access funding when needed, our ability to support and continue our operations would be adversely affected, which could have a material adverse effect on our business, results of operations and ability to pay dividends or redeem or repurchase capital stock.

 Market Risk
 Changes in interest rates or an inability to successfully manage interest rate risk could have a material adverse effect on our business and results of operations. Changes in interest rates pose significant risks because most of our assets and liabilities are financial instruments. Our profitability depends significantly on our net interest income and is impacted by changes in the fair value of interest rate derivatives and any associated hedged items. We realize net interest income primarily from the spread between interest earned on our outstanding advances and investments less the interest paid on our consolidated obligations and other liabilities.

 As noted above, our business and results of operations are affected significantly by the fiscal and monetary policies of the U.S. government and its agencies, including the Federal Reserve, which are difficult to predict. Since March 2022, to combat rising inflation, the Federal Open Market Committee (FOMC) of the Federal Reserve has significantly raised the target range for the Federal funds rate to a range of 4.25 percent to 4.50 percent as of December 31, 2024. The FOMC decreased the target range for the Federal funds rate beginning September 2024 and foreshadowed further decreases to the target rates in 2025. However, the FOMC also noted that further decreases to target rates are likely to occur at a slower pace than the 2024 rate cuts and it will continue to assess additional information and implications for monetary policy in determining future actions with respect to target rates. Future decreases in the policy rate will be dependent on trends in employment levels and inflation and financial and international developments.

 Changes in overall market interest rates, changes in the relationships between short-term and long-term market interest rates, changes in the relationship between different interest rate indices, or differences in the timing of rate resets for assets and liabilities or related interest rate derivatives with interest rates tied to those indices, can affect the interest rates received from our interest-earning assets differently than those paid on our interest-bearing liabilities. This difference could result in an increase in interest expense relative to interest income, which would result in a decrease in our net interest spread, or a net decrease in earnings related to the relationship between changes in the valuation of our derivatives and any associated hedged items. Therefore, our ability to manage or hedge interest rate exposure due to direction and speed of interest rate changes significantly affects the success of our asset and liability management activities and our level of net interest income. We manage and monitor interest rate risk through a variety of measures. Given the unpredictability of the financial markets, capturing all variables and potential outcomes in these analyses is not possible. Key assumptions include, but are not limited to, mortgage loan volumes and pricing, market conditions for our consolidated obligations, interest rate spreads and prepayment speeds, implied volatility of interest rates and options contracts, cash flows on mortgage-related assets, and other model and model related assumptions. These assumptions are inherently uncertain. Actual results will differ from simulated results due to the timing, magnitude and frequency of interest rate changes and changes in market conditions, management strategies, and regulatory changes, among other factors. Volatility and disruption in the markets may result in a higher level of volatility in our interest-rate risk profile and could negatively affect our ability to manage interest-rate risk effectively.

 We rely on derivatives to lower our cost of funds and reduce our interest rate, option and prepayment risk, and we may not be able to enter into effective derivative instruments on acceptable terms, which could have a material adverse effect on our business and results of operations. Our financial strategies are highly dependent on our ability to enter into derivative transactions on acceptable terms with acceptable counterparties in the necessary quantities and under satisfactory terms to hedge our corresponding assets and liabilities. We use derivatives to reduce our market risk and funding costs. We currently enjoy ready access in the over-the-counter (OTC) derivatives market for uncleared interest rate derivatives through a diverse group of investment grade rated counterparties. Several factors could have an adverse impact on our access to the OTC derivatives market, including changes in our credit rating, changes in the current counterparties' credit ratings, reductions in our counterparties' allocation of resources to the interest rate derivatives business and changes in the liquidity of that market created by a variety of regulatory or market factors. If we are unable to manage our hedging positions properly, or are unable to enter into derivative hedging instruments on desirable terms or at all, we may incur higher funding costs, be required to limit certain advance product offerings and be unable to effectively manage our interest rate risk and other risks, which could have a material adverse effect on our business, results of operations and ability to pay dividends or redeem or repurchase capital stock.

 The use of derivatives also subjects us to earnings volatility caused primarily by the changes in the fair values of derivatives that do not qualify for hedge accounting and, to a lesser extent, by hedge ineffectiveness, which is the difference in the amounts recognized in our earnings for the changes in fair value of a derivative and the related hedged item. If we are unable to apply hedge accounting due to changes in accounting guidance or other changes in circumstances that impact our ability to utilize hedge accounting, the result could be an increase in the volatility of our earnings from period to period. Such increases in earnings volatility could affect our ability to pay dividends, our ability to meet our retained earnings threshold, and our members' willingness to hold the capital stock necessary for membership and/or lending activities with us.

 Liquidity and Capital Risk
 We may not be able to meet our obligations as they come due or meet the credit and liquidity needs of our members in a timely and cost-effective manner. We seek to be in a position to meet our members' credit and liquidity needs and to pay our obligations without maintaining excessive holdings of low-yielding liquid investments or being forced to incur unnecessarily high borrowing costs. In addition, we are subject to various regulatory liquidity requirements, including a contingency funding plan designed to protect against temporary access disruptions to the FHLBank debt markets in response to a rise in capital market volatility. Our efforts to manage our liquidity position, including carrying out our contingency funding plan and the related costs, may not enable us to meet our obligations and the credit and liquidity needs of our members, which could have an adverse effect on our net interest income, and thereby, our financial condition and results of operations.

 An increase in required Affordable Housing Program contributions could have a material adverse effect on our business, results of operations, our ability to pay dividends, or our ability to redeem or repurchase capital stock. The Bank Act requires each FHLBank to contribute to its AHP the greater of: (1) 10 percent of that FHLBank's net earnings for the previous year; or (2) that FHLBank's pro rata share of an aggregate of $100 million, the proration of which is based on the net earnings of the FHLBanks for the previous year. A failure of the FHLBanks to make the minimum $100 million annual AHP contribution in a given year or new or modified legislation could result in an increase in our required AHP contribution, which could adversely affect our results of operations, our ability to pay dividends, or our ability to redeem or repurchase capital stock.

 We may not be able to pay dividends at rates consistent with past practices, which could result in lower investment returns for members. Under FHFA regulations and our capital plan, we may declare dividends on our capital stock only out of our unrestricted retained earnings and current net income. Our ability to pay dividends also is subject to statutory and regulatory requirements, including meeting all regulatory capital requirements. The potential promulgation of regulations or other requirements by the FHFA that would require higher levels of required or restricted retained earnings could lead to higher levels of retained earnings, and thus, lower amounts of unrestricted retained earnings available to be paid out to our members as dividends. Failure to meet any of our regulatory capital requirements would prevent us from paying any dividend.

 Additionally, FHFA regulations on capital classifications could restrict our ability to pay dividends. Further, our ability to pay dividends at historical rates is impacted directly by our net income, so a decline in net income could result in a decline in dividend rates. A decline in dividend rates may diminish members' interest in holding FHLBank capital stock and could decrease demand for advances, AMA, or letters of credit.

 Lack of a public market and restrictions on transferring our stock could result in an illiquid investment for the holder. Under the GLB Act, FHFA regulations and our capital plan, our Class A Common Stock may be redeemed upon the expiration of a six-month redemption period and our Class B Common Stock after a five-year redemption period following our receipt of a redemption request. Only capital stock in excess of a member's minimum investment requirement, capital stock held by a member that has submitted a notice to withdraw from membership, or capital stock held by a member whose membership has been terminated may be redeemed at the end of the redemption period. Further, we may elect to repurchase excess capital stock of a member at any time at our sole discretion.

 We cannot guarantee, however, that we will be able to redeem capital stock even at the end of the redemption periods. The redemption or repurchase of our capital stock is prohibited by FHFA regulations and our capital plan if the redemption or repurchase of the capital stock would cause us to fail to meet our minimum regulatory capital requirements. Likewise, under such regulations and the terms of our capital plan, we could not honor a member's capital stock redemption request if the redemption would cause the member to fail to maintain its minimum capital stock investment requirement. Moreover, since our capital stock may only be owned by our members (or, under certain circumstances, former members and certain successor institutions), and our capital plan requires our approval before a member may transfer any of its capital stock to another member, we can provide no assurance that a member would be allowed to sell or transfer any excess capital stock to another member at any point in time.

 We may also suspend the redemption of capital stock if we reasonably believe that the redemption would prevent us from maintaining adequate capital against a potential risk, or would otherwise prevent us from operating in a safe and sound manner. In addition, approval from the FHFA for redemptions or repurchases is required if the FHFA or our board of directors were to determine that we have incurred, or are likely to incur, losses that result in, or are likely to result in, charges against our capital. Under such circumstances, we cannot guarantee that the FHFA would grant such approval or, if it did, upon what terms it might do so. We may also be prohibited from repurchasing or redeeming our capital stock if the principal and interest due on any consolidated obligations that we issued through the Office of Finance has not been paid in full or if we become unable to comply with regulatory liquidity requirements to satisfy our current obligations.

 Accordingly, there are a variety of circumstances that would preclude us from redeeming or repurchasing our capital stock that is held by a member. Since there is no public market for our capital stock and transfers require our approval, we cannot guarantee that a member's purchase of our capital stock would not effectively become an illiquid investment.

 Operational Risk
 Volatile market conditions increase the risk that our financial models will produce unreliable results. We make significant use of financial models to manage our market and credit risk, to make business decisions, and for financial accounting and reporting purposes. For example, we use models to measure and monitor exposures to interest rate and other market risks, including prepayment risk and credit risk While model inputs based on economic conditions and expectations are regularly evaluated and adjusted to changing conditions, sudden significant changes in these conditions may increase the risk that our models could produce unreliable results or estimates that vary widely or prove to be inaccurate. Such inaccuracies could have a material adverse effect on our business, results of operations and ability to pay dividends or redeem or repurchase capital stock.

 Failure to keep pace with technological change, including the development and use of artificial intelligence, could adversely affect our business. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, including those incorporating data analytics, AI, generative AI and machine learning. The development and use of AI presents a number of risks and challenges to our business. The legal and regulatory environment relating to AI is uncertain and rapidly evolving and includes regulatory schemes targeted specifically at AI as well as provisions in intellectual property, privacy, consumer protection, employment and other laws applicable to the use of AI. These evolving laws and regulations could require changes in our implementation of AI technology and increase our compliance costs and the risk of non-compliance. AI models, particularly generative AI models, may produce output or take action that is incorrect, that reflects biases included in the data on which they are trained, that results in the release of private, confidential, or proprietary information, that infringes on the intellectual property rights of others, or that is otherwise harmful. In addition, the complexity of many AI models makes it difficult to understand why they are generating particular outputs.

 Failure to successfully keep pace with technological change affecting our industry could harm our ability to compete effectively. Many of our competitors have substantially greater resources to invest in technological improvements. We face many challenges, including the increased demand to provide members electronic access to their accounts and the cost and implementation of systems to perform electronic banking transactions. Our ability to compete depends on our ability to continue to adapt technology on a timely and cost-effective basis to meet these demands. We may not be able to effectively or timely implement new technology-driven products and services or be successful in marketing these products and services to our members. In addition, the implementation of technological changes and upgrades to maintain current systems and integrate new systems may cause service interruptions, transaction processing errors, system conversion delays and other adverse effects. As these technologies are improved in the future, we may be required to make significant capital expenditures, which may increase our overall expenses and could have a material adverse effect on our business, results of operations and ability to pay dividends.

 We are exposed to cybersecurity threats and potential security breaches and our efforts to minimize or respond to such threats may not be effective to prevent significant harm. Cybersecurity threats and potential security breaches could compromise our information and expose us to liability, which would cause our business and reputation to suffer. We rely heavily upon data processing, software, communications and information systems from a number of third parties to conduct our business. Our business involves the storage and transmission of proprietary information and security breaches could expose us to the risk of loss or misuse of such information, litigation and potential liability. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. We, our members and other financial institutions with which we interact, are subject to increasingly frequent, continuous attempts, including ransomware and malware attacks, to penetrate key systems by individual hackers, organized criminals, and in some cases, state-sponsored organizations. Our operations are also vulnerable to disruptions from human error, natural disasters, power loss, computer viruses, unauthorized access and other unforeseen events. Undiscovered data corruption could render our member information inaccurate. Third-party or internal systems and networks may fail to operate properly or become disabled due to deliberate attacks or unintentional events. These risks are further heightened by factors such as developments in generative AI, increased remote working and geopolitical turmoil. Cyberattacks and security breaches may also cause significant increases in operating costs, including the costs of compensating members for any resulting losses they may incur, and the costs and capital expenditures required to correct any deficiencies and strengthen the security of data processing and storage systems, and these costs may exceed coverage limits under our cyber insurance policies.

 While we believe we are in compliance with all applicable privacy and data security laws, a cyber-incident could put our members' confidential information at risk and expose us to significant liability. To date, we have no knowledge of a material cyber-incident or other material information security incident affecting the systems we operate and control. However, financial institutions are one of the top targets for cyber-attacks, and we can never be certain that all of our systems are entirely free from vulnerability to breaches of security or other technological difficulties or failures. The perpetual evolution of known cyber-threats requires us to devote significant resources to maintain, regularly update and backup our data security systems and processes, as we may not be able to anticipate, or effectively implement preventative measures against, all cyberattacks. We also incur significant costs in maintaining cybersecurity protections, including costs associated with maintaining cyber insurance coverage. A security breach or other cyber incident could have an adverse impact on, among other things, our revenue, ability to attract and maintain members and our reputation. In addition, a security breach could also subject us to additional regulatory scrutiny and expose us to civil litigation and possible financial liability, all of which could have a material adverse effect on our business, results of operations, ability to pay dividends, system availability and operational support.

 For additional information on information system and security threats, see "Risk Management – Operations Risk Management" under Item 7. For additional information on cybersecurity, see "Item 1C – "Cybersecurity."

 We are required to make significant judgments, assumptions and estimates in the preparation of our financial statements and our judgments, assumptions and estimates may not be accurate. The preparation of financial statements and related disclosures in conformity with GAAP requires us to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. Our critical accounting policies and estimates, which are included in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations," describe those significant accounting policies and estimates used in the preparation of our consolidated financial statements that we consider "critical" because they require judgments, assumptions and estimates that materially affect our consolidated financial statements and related disclosures. As a result, if future events or regulatory views concerning such analysis differ significantly from the judgments, assumptions and estimates in our critical accounting policies and estimates, those events or regulatory views could have a material impact on our consolidated financial statements and related disclosures, in each case resulting in our need to revise or restate prior period financial statements, cause damage to our reputation and the price of our common stock and adversely affect our business, financial condition and results of operations.

 Our risk management framework may not be effective in mitigating risks or losses to us, and we may incur losses due to ineffective risk management processes and strategies. Our risk management framework is comprised of various processes, systems and strategies designed to manage our risk exposure, including credit, liquidity, interest rate, price, operational, reputation, strategic and compliance risks. Our framework also includes financial or other modeling methodologies that involve highly subjective management assumptions and judgment. Our risk management framework may not be effective under all circumstances and may not adequately mitigate risks or losses, which could result in adverse regulatory consequences and unexpected losses and could have a material adverse effect on our business, financial condition and results of operations.

 For additional information on internal controls, see "Risk Management – Operations Risk Management" under Item 7.

 We may be unable to attract and retain a highly qualified and diverse workforce, including key management. Our success depends on the talents and efforts of our employees, and particularly our management. While turnover has remained low over the last eighteen months, it is critical that we continue to evaluate the market to ensure we are offering employment terms and total rewards that are competitive. If we are not competitive across these key components, we may be unable to retain key management or to attract other highly qualified and diverse employees. Also, failure to develop and implement an adequate succession plan for key members of management could adversely affect our financial condition and results of operations.

 Reliance on FHLBank Chicago as MPF Provider could have a material adverse effect on our business if FHLBank Chicago were to default on its contractual obligations owed to us. As part of our business, we participate in the MPF Program with FHLBank Chicago. In its role as MPF Provider, FHLBank Chicago provides the infrastructure, operational support, and maintenance of investor relations for the MPF Program and is also responsible for publishing and maintaining the MPF Guides, which include the requirements PFIs must follow in originating or selling and servicing MPF mortgage loans. If FHLBank 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 loan assets 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 FHLBank Chicago's third-party vendors engaged in the operation of the MPF Program, or investors that purchase mortgages under the MPF Program, were to experience operational or other difficulties that prevent the fulfillment of their contractual obligations.

 Item 1B: Unresolved Staff Comments

 Not applicable.

 Item 1C: Cybersecurity

 FHLBank Topeka recognizes the critical importance of maintaining the trust and confidence of our members, business partners, employees and other stakeholders. We have implemented processes for assessing, identifying, and managing material risks from cybersecurity threats or incidents that may directly or indirectly impact our business strategy, results of operations, or financial condition.

 Our cybersecurity risk management framework for assessing, identifying, and managing material risks from cybersecurity threats seeks to protect the confidentiality, security and availability of the information that we collect and store by focusing on identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.

 Cybersecurity risk management is part of our ERM Program, which includes specific controls and processes for mitigation, monitoring and reporting associated with cybersescurity and information risks. Specifically, cybersecurity controls and processes include the Enterprise Security Policy, the Security Incident Response Plan, and the Business Resiliency Management Policy. The Risk Oversight committee of the board of directors oversees these controls and processes and annually recommends each for approval. The full board of directors annually reviews and approves each of our Enterprise Security Policy, Security Incident Response Plan, and Business Resiliency Management Policy.

 The Enterprise Security Policy establishes administrative, technical, and physical safeguards designed to protect the security, confidentiality, and integrity of FHLBank physical and intangible information technology assets in accordance with the GLB Act and the interagency guidelines issued thereunder, and applicable laws.

 The 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 the Risk Oversight committee and the full board of directors. The Security Incident Response Plan also requires assessment of materiality of the threat or incident for the purposes of public disclosure.

 The Business Resiliency Management Policy is designed to ensure our critical business functions remain available during business disruptions and to minimize the impact of such disruptions, including the unavailability of information technology assets due to unintentional events like fire, power loss, and other technical incidents such as hardware failures. The Business Resiliency Management Policy includes, among other items, business impact analysis for developing effective plans and a disaster recovery plan to respond, recover, resume, and restore technology assets critical for FHLBank to operate.

 We regularly engage with third parties to assist in the testing, maintenance, and development of our cybersecurity risk management practices and to assess, identify, and manage cybersecurity incident and threat risk.

 Our cyber incident response plan includes third-party cybersecurity incidents and threats. Through our vendor management program, we undertake due diligence of third-party systems with which we will interact and vendors with whom we will interact, including regular reviews and oversight of these service providers through performance and technological reviews and escalation of any unsatisfactory reviews.

 As of the date of this report, we are not aware of any material risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect FHLBank, including FHLBank's business strategy, results of operations or financial condition.

 Cybersecurity Governance
 Our board of directors devotes significant time and attention to data and systems protection, including cybersecurity and information security risk. Our board of directors oversees the ERM Program, the Enterprise Security Program and Information Security through policies and principles including the Enterprise Security Policy, the Security Incident Response Plan, and the Business Resiliency Management Policy. The board of directors oversees management's approach to staffing, policies, processes, and practices to gauge and address cybersecurity and information security risk.

 Our board of directors has oversight of our ERM Program, the Enterprise Security Program, and Information Security areas which include risks from cybersecurity threats and has approved specific controls for the mitigation, monitoring and reporting associated with those risks. The Risk Oversight Committee and Operations Committee of the board of directors receive regular reporting (at least quarterly) on the risks and are responsible for overseeing cybersecurity and information risks, including receiving Enterprise Security Program updates from the information security officer (ISO), Information Technology status updates, and reviewing enterprise risk analysis and status information, and annually reviews the Business Resiliency Management Policy and Program.

 Our Enterprise Security Program is led by the ISO. The ISO reports to the Chief Risk Officer (CRO). FHLBank's Information Security area is led by the Director of Information Security, who reports to the Chief Information Officer (CIO). The Business Resiliency Management Program is led by the Director of Enterprise Risk Management, who reports to the CRO.

 We have a Technology Committee, which reviews and discusses all technology-related methodologies and initiatives related to information technology and cybersecurity, among other topics. The Technology Committee is a management committee and reports to the Strategic Operations Management Committee (SOMC). We also have an Operations Risk Committee (ORC), which is a management committee, and is the secondary venue for reviewing enterprise security initiatives. The ORC also serves as the primary governance venue for the Business Resiliency Management Program and escalates business resiliency concerns and risk issues, among other matters, to the Strategic Risk Management Committee (SRMC). The ORC, is responsible for annually reviewing and providing recommendations on FHLBank's Security Incident Response Plan and receives monthly updates on the Enterprise Security Program. The ISO is a required member of both the Technology Committee and the ORC.

 The SOMC and SRMC are comprised of senior leadership and executive-level officers, including FHLBank's CRO and CIO. The SOMC is responsible for receiving reports on issues escalated from the Technology Committee. The SRMC is responsible for management of operational risk and implementation of the cybersecurity risk management framework within the ERM Program as approved by the board of directors and receives reports on issues escalated from the ORC.

 The Executive Team, comprised of chief-level officers, annually reviews and provides recommendations on the Enterprise Security Policy, Security Incident Response Plan, and the Business Resiliency Management Policy. The President and Chief Executive Officer (CEO) annually approves each policy for submission to the board of directors for its consideration and ultimate approval.

 In addition to the board of directors and management committees, we have an Information Security Working Group (ISWG). Membership in the ISWG consists of leadership and business partners from a cross section of areas, including operational risk, information security, information technology, legal, operations, and others throughout FHLBank. The breadth and depth of experience of members of the ISWG allows for detailed discussions on information security trends and emerging risks which can be elevated to the Technology Committee for action or further discussion, as necessary and appropriate.

 We have an Information Security area of the Information Technology department comprised of specialized professionals responsible for the day-to-day, hands-on management of cybersecurity risk. The area handles processes and procedures to mitigate and implement protective, proactive and reactive measures to protect FHLBank against cybersecurity risks and is responsible for the practices designed to prevent unauthorized access, use, disclosure, disruption, modification, inspection, recording or destruction of information.

 Those responsible for assessing and managing FHLBank's material risks from cybersecurity threats have expertise and experience relevant to their roles. FHLBank's CIO has served in technology and leadership roles for over 30 years, including almost 27 years of experience with FHLBank. During the last 14 years, the CIO has provided oversight and strategic direction for the Information Security area of the Information Technology department, including cybersecurity risk management, cybersecurity governance, and incident response. The ISO has more than 25 years of information technology experience, including 24 in the financial industry, and 22 years of experience managing information security. The ISO has a Bachelor of Science degree in Computer Science Information Systems. The Director of Information Security is a retired United States Air Force Lt. Colonel whose primary career focus was in intelligence analysis. The Director of Information Security also has 14 years of experience building and leading cybersecurity programs, including cyber threat intelligence programs and cyber regulatory compliance; 16 years of cyber intelligence analysis experience, including military and civilian; five years of continuity of operations and business continuity program development; and holds a Master of Arts degree in Strategic Intelligence Studies and is a Certified Information System Security Professional.

 The Technology Committee and ORC, as appropriate, receive regular and prompt information from the Information Security area as reported by the ISO, which in turn provide periodic, regular and prompt reporting to the SRMC and SOMC on topics such as threat intelligence, major cybersecurity risk areas, technologies and best practices, and any cybersecurity incidents that may have impacted FHLBank, as applicable and needed. The SRMC and SOMC may escalate reporting as applicable and needed to the Executive Team or board of directors.

 The board of directors receives prompt and timely information from the Security Incident Response Team, which includes the CRO, CIO, ISO, and Director of Information Security, among others, as set forth in the Security Incident Response Plan, on any cybersecurity or information security incident that may pose significant risk to FHLBank and continues to receive regular reports on the incident until its conclusion. The board of directors, Risk Oversight Committee and Operations Committee each receive regular presentations and reports throughout the year on cybersecurity and information security risk. These presentations and reports address a broad range of topics, including updates on technology trends, regulatory developments, legal issues, policies and practices, information security resources and organization, the threat environment and vulnerability assessments, and specific and ongoing efforts to prevent, detect, and respond to internal and external incidents and critical threats. At least quarterly, the board discusses cybersecurity and information security risks with the ISO and CRO.

 Item 2: Properties

 We own our primary facility located at 500 SW Wanamaker Road, Topeka, Kansas. Our facility has Leadership in Energy and Environment Design Certified Gold status, in alignment with our commitment to sustainability, energy efficiency, and natural resource conservation.

 Item 3: Legal Proceedings

 We are subject to various pending legal proceedings arising in the normal course of business, the outcome of which cannot be determined at this time. In the opinion of management, any liability we might incur upon the resolution of these claims and lawsuits will not, in the aggregate, have a material adverse effect on our consolidated financial position or results of operations.

 Item 4: Mine Safety Disclosures

 Not applicable.

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

 As a cooperative, members own almost all of our Class A Common Stock and Class B Common Stock with the remainder of the capital stock held by former members that are required to retain capital stock ownership to support outstanding advance and mortgage loan activity executed while they were still members. However, the portion of our capital stock subject to mandatory redemption is treated as a liability and not as capital, including the capital stock of former members. There is no public trading market for our capital stock.

 All of our member directors are elected by and from the membership, and we conduct our business in advances and mortgage loan acquisitions almost exclusively with our members. Depending on the class of capital stock, it may be redeemed at par value either six months (Class A Common Stock) or five years (Class B Common Stock) after we receive a written request by a member, subject to regulatory limits and to the satisfaction of any ongoing stock investment requirements applying to the member under our capital plan. We may repurchase shares held by members in excess of the members' required stock holdings at our discretion at any time at par value. Par value of all common stock is $100 per share. As of February 28, 2025, we had 670 stockholders of record and 3,126,774 shares of Class A Common Stock and 21,331,378 shares of Class B Common Stock outstanding, including 2,677 shares of Class A Common Stock and no shares of Class B Common Stock subject to mandatory redemption by members or former members. "Classes" of stock are not registered under the Securities Act of 1933, as amended. The Recovery Act amended the Exchange Act to require the registration of a class of common stock of each FHLBank under Section 12(g) of the Exchange Act and for each FHLBank to maintain such registration and to be treated as an "issuer" under the Exchange Act, regardless of the number of members holding such a class of stock at any given time. Pursuant to an FHFA regulation, we voluntarily registered one of our classes of stock pursuant to Section 12(g)(1) of the Exchange Act.

 Dividends may be paid in cash or shares of Class B Common Stock as authorized under our capital plan and approved by our board of directors. FHFA regulation prohibits any FHLBank from paying a stock dividend if excess stock outstanding will exceed one percent of its total assets after payment of the stock dividend. We manage our excess capital stock position to be able to regularly pay stock dividends.

 Base stock dividends on Class A Common Stock and Class B Common Stock are anticipated to remain at or near current levels in 2025 relative to what was paid in 2024. Dividend rates are influenced by capital levels balanced with the rates we offer members on advances and the dividend rates we pay on activity-based stock. Historically, dividend rates have moved directionally with short-term interest rates; however, market conditions and movements in short-term interest rates can be unpredictable. Adverse changes in FHLBank's financial results may result in lower dividend rates in future periods. See Item 1 – "Business – Capital, Capital Rules and Dividends" for more information regarding our retained earnings policy, and also see Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources - Capital" for a discussion of restrictions on dividend payments in the form of capital stock.

 Item 6: [Reserved]

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

 The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) highlights selected information intended to assist readers in understanding our business and assessing our operations both historically and prospectively. This overview of MD&A may not contain all of the information that is important to readers. For a more complete understanding of events, trends and uncertainties, as well as the liquidity, capital, credit and market risks, and critical accounting estimates, affecting FHLBank, this discussion should be read in conjunction with our audited financial statements and related notes presented under Item 8 of this report. Our MD&A includes the following sections:
 Executive Level Overview - tabular presentation of selected financial data and a general description of our business and financial highlights;
 Financial Market Trends - a discussion of current trends in the financial markets and overall economic environment, including the related impact on our operations;
 Critical Accounting Policies and Estimates - a discussion of accounting policies that require critical estimates and assumptions;
 Results of Operations - an analysis of our operating results, including disclosures about the sustainability of our earnings;
 Financial Condition - an analysis of our financial position;
 Liquidity and Capital Resources - an analysis of our cash flows and capital position;
 Risk Management - a discussion of our risk management strategies; and
 Recently Issued Accounting Standards.

 Additionally, refer to Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023 for our MD&A comparing fiscal year 2023 to fiscal year 2022.

 Executive Level Overview
 Table 3 presents selected financial data for the periods indicated (dollar amounts in thousands):

 Table 3

 12/31/2022
 12/31/2021
 12/31/2020

 Statement of Condition (as of period end):

 Total assets
 $
 75,900,980
 $
 74,946,985
 $
 71,992,842
 $
 48,021,238
 $
 52,591,712

 Investments1

 24,584,831
 20,486,846
 19,261,151
 16,058,574
 17,251,975

 41,652,081
 45,444,769
 44,262,750
 23,484,288
 21,226,823

 Mortgage loans, net
 8,949,433
 8,352,713
 7,905,135
 8,135,046
 9,205,207

 Total liabilities
 71,801,251
 71,056,333
 68,316,298
 45,306,972
 49,923,945

 989,021
 752,200
 711,061
 946,207
 1,229,361

 Consolidated obligations, net2

 70,281,553
 69,790,738
 67,281,244
 44,199,598
 48,530,494

 Total capital
 4,099,729
 3,890,652
 3,676,544
 2,714,266
 2,667,767

 Capital stock
 2,631,605
 2,607,683
 2,507,709
 1,499,301
 1,574,004

 Retained earnings
 1,608,086
 1,401,940
 1,253,105
 1,142,650
 1,051,455

 Statement of Income (for the year ended):

 Net interest income
 560,219
 460,051
 362,991
 296,648
 251,012

 Other income (loss)
 37,140
 47,947
 (13,942)
 (41,434)
 (40,148)

 Voluntary housing and community investment program contributions3

 16,498
 3,000
 —
 —
 —

 Other expenses
 101,674
 94,008
 80,854
 77,529
 80,407

 Income before assessments
 480,823
 411,631
 267,485
 178,435
 131,173

 Affordable Housing Program (AHP) assessments
 48,101
 13,123

 Net income
 160,590
 118,050

 Selected Financial Ratios and Other Financial Data (for the year ended):

 Dividends paid
 226,576
 221,632
 130,281
 69,395
 70,824

 Weighted average dividend rate4

 8.82
 %
 8.47
 %
 6.47
 %
 4.49
 %
 4.38
 %

 Dividend payout ratio5

 52.36
 %
 59.83
 %
 54.12
 %
 43.21
 %
 59.99
 %

 Return on average equity
 10.84
 %
 9.56
 %
 7.47
 %
 5.88
 %
 4.50
 %

 Return on average assets
 0.56
 %
 0.49
 %
 0.39
 %
 0.33
 %
 0.21
 %

 Average equity to average assets
 5.15
 %
 5.10
 %
 5.28
 %
 5.54
 %
 4.59
 %

 Net interest margin6

 0.73
 %
 0.61
 %
 0.60
 %
 0.61
 %
 0.44
 %

 Total capital ratio7

 5.40
 %
 5.19
 %
 5.11
 %
 5.65
 %
 5.07
 %

 Regulatory capital ratio8

 5.59
 %
 5.35
 %
 5.22
 %
 5.50
 %
 5.00
 %

 1 Includes trading securities, available-for-sale securities, held-to-maturity securities, interest-bearing deposits, securities purchased under agreements to resell, and Federal funds sold.
 2 Consolidated obligations are bonds and discount notes that we are primarily liable to repay. See Note 15 to the financial statements for a description of the par amount of consolidated obligations of all FHLBanks for which we are jointly and severally liable.
 3 Voluntary housing and community investment program contributions are expensed in the period they are approved by the board of directors and/or awarded.
 4 Dividends paid in cash and stock on both classes of stock as a percentage of average capital stock eligible for dividends.
 5 Ratio disclosed represents dividends declared and paid during the year as a percentage of net income for the period presented. FHFA regulation requires dividends be paid out of known income prior to declaration date.
 6 Net interest income as a percentage of average earning assets.
 7 GAAP capital stock, which excludes mandatorily redeemable capital stock, plus retained earnings and accumulated other comprehensive income (AOCI) as a percentage of total assets.
 8 Regulatory capital (i.e., permanent capital and Class A Common Stock) as a percentage of total assets.

 We are an independent regional wholesale bank structured as a member-owned cooperative serving eligible financial institutions in Colorado, Kansas, Nebraska and Oklahoma. Our primary business activities including making advances (loans) to and purchasing mortgage loans from our member financial institutions. Financial institutions eligible for membership in FHLBank include commercial banks, savings institutions, insurance companies and credit unions. CDFIs certified under the Community Development Banking and Financial Institutions Act of 1994 are also eligible for membership. While not eligible for membership, housing associates, including state and local housing authorities, that meet certain statutory criteria may also borrow from FHLBank. Our mission is to be a reliable source of liquidity and low-cost funding provider in support of our members' residential mortgage lending and related housing and economic development needs of the communities they serve. We seek to maintain a balance between our public purpose and our ability to provide adequate returns on the capital supplied by our members. Our structure as a financial cooperative allows our business to be scalable and self-capitalizing without taking undue risks, diminishing capital adequacy or jeopardizing profitability. Therefore, FHLBank is generally designed to expand and contract in asset size as the needs of our members and their communities change.

 2024 Financial Highlights:
 • Total assets: Total assets increased from $74.9 billion as of December 31, 2023 to $75.9 billion as of December 31, 2024, driven by the $4.1 billion increase in short- and long-term investments between periods and the $0.6 billion increase in mortgage loans, offset by a $3.8 billion decrease in advances. The average balance of interest-earning assets increased $1.5 billion from the year ended December 31, 2023 to December 31, 2024, driven by a $2.6 billion increase in the average balance of short- and long-term investments and a $0.6 billion increase in the average balance of mortgage loans, partially offset by a $1.7 billion decrease in the average balance of advances.
 • Primary Mission Assets: Advances to members and housing associates and mortgage loans purchased from members are Primary Mission Assets because they are fundamental to the business and mission of FHLBank. The Primary Mission Asset ratio, as defined by the FHFA under its core mission achievement guidance, is calculated as year-to-date averages of advances and mortgage loans to consolidated obligations (less certain U.S. Treasury securities). As of December 31, 2024 and December 31, 2023, our Primary Mission Asset ratio was 78 percent and 81 percent, respectively.
 • Advances: Advances decreased to $41.7 billion at December 31, 2024 compared to $45.4 billion at December 31, 2023, representing 54.9 percent of total assets as of December 31, 2024, compared to 60.6 percent as of December 31, 2023. The average balance of advances decreased $1.7 billion, or 3.7 percent to $44.5 billion for the year ended December 31, 2024 when compared to the prior year period. Outside of period-end volatility with larger members, advance demand continues to be relatively stable among FHLBank membership, especially among community banks. We continue to execute our liquidity mission by serving as a reliable source of liquidity and funding for our members.
 • Mortgage loans: Mortgage loans increased to $8.9 billion at December 31, 2024 compared to $8.3 billion at December 31, 2023, representing 11.8 percent of total assets at December 31, 2024, compared to 11.1 percent at December 31, 2023. The average balance of mortgage loans increased $0.6 billion, or 7.6 percent, for the year ended December 31, 2024 when compared to the prior year period. Interest income continues to be positively impacted by originations at interest rates higher than the weighted average rate of the existing portfolio despite increased mortgage loan prepayments and the related premium amortization.
 • Net income: For the year ended December 31, 2024, net income increased $62.2 million, to $432.7 million compared to $370.5 million for the same period in the prior year. The increase in net income was due primarily to an increase in net interest income, partially offset by fair value fluctuations of derivatives and trading securities, increases in operating expenses, and statutory and voluntary contributions to housing and community investment programs.
 • Net interest income/margin: Net interest income increased $100.1 million to $560.2 million for the year ended December 31, 2024 compared to $460.1 million for the year ended December 31, 2023. The increase in net interest income was driven primarily by improvements in funding and asset spreads, including the impact of fair value hedges, and a $1.5 billion increase in average earning assets. Net interest margin increased twelve basis points, from 0.61 percent for the year ended December 31, 2023 to 0.73 percent for the year ended December 31, 2024. Net interest spread increased twelve basis points, from 0.32 percent for the year ended December 31, 2023 to 0.44 percent for the year ended December 31, 2024.
 • Performance ratios: Return on average equity (ROE) increased to 10.8 percent for the year ended December 31, 2024 compared to 9.6 percent for the year ended December 31, 2023. The increase was attributed to the increase in net income.
 • Dividends: The Class A Common Stock dividend rate of 4.75 percent per annum and the Class B Common Stock dividend rate of 9.50 percent per annum combined for a weighted average dividend rate for the year ended December 31, 2024 of 8.8 percent.

 Financial Market Trends
 The primary external factors that affect net interest income are market interest rates and the general state of the economy, as discussed in greater detail below.

 General discussion of the level of market interest rates:
 Table 4 presents selected market interest rates as of the dates or for the periods shown.

 Table 4

 Market Instrument
 2024
 2023
 2024
 2023

 Average Rate
 Average Rate
 Ending Rate
 Ending Rate

 Secured Overnight Financing Rate (SOFR)1

 5.15
 %
 5.01
 %
 4.49
 %
 5.38
 %

 Federal funds effective rate1

 5.15
 5.03
 4.33
 5.33

 Federal Reserve interest rate on reserve balances1

 5.21
 5.10
 4.40
 5.40

 3-month U.S. Treasury bill1

 5.10
 5.18
 4.32
 5.34

 2-year U.S. Treasury note1

 4.38
 4.60
 4.24
 4.25

 5-year U.S. Treasury note1

 4.13
 4.06
 4.38
 3.85

 10-year U.S. Treasury note1

 4.21
 3.96
 4.57
 3.88

 30-year residential mortgage note rate1,2

 6.80
 6.91
 6.97
 6.76

 1 Source is Bloomberg.
 2 Mortgage Bankers Association weekly 30-year fixed rate mortgage contract rate.

 Since March 2022, the FOMC of the Federal Reserve has significantly raised the target range for the Federal funds rate, from 0.25 percent to 0.50 percent to a range of 4.25 percent to 4.50 percent as of December 31, 2024. The FOMC held the target range between 5.25 percent and 5.50 percent for much of 2023 and 2024 but began reducing the target rates in September 2024 and foreshadowed further decreases to the target rates in 2025. The FOMC maintained the target range for the Federal funds rate at the January 2025 meeting, indicating that additional adjustments to the target range for the Federal funds rate will depend on incoming data, the evolving outlook, and the balance of risks. The FOMC also indicated it would continue reducing its holdings of Treasury securities and agency debt and agency MBS.

 We issue debt at a spread to U.S. Treasury security yields. As a result, the costs of issuing consolidated obligations and making advances are sensitive to interest rates. The cost of issuing short-term debt has declined with the decrease in market rates, and the continued high demand for short-term Agency debt has kept this spread to the comparable U.S. Treasury security relatively narrow.

 Volatility in the capital markets can also impact the demand for and cost of debt issued by the FHLBanks. Efforts of the Federal Reserve Board to ease inflation have contributed to volatility in the financial markets, financial difficulties experienced by some depository institutions, and uncertainties about the economic outlook. For further discussion of FHLBank debt, see this Item 7 – "Financial Condition – Consolidated Obligations."

 Critical Accounting Policies and 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. Several of our accounting policies are inherently subject to valuation assumptions and other subjective assessments and are more critical than others in terms of their importance to results. Given the assumptions and judgment used, we have identified the accounting for derivatives and hedging activities as a critical accounting estimate. Our financial condition and results of operations could be materially affected under different conditions or different assumptions related to this accounting estimate.

 Accounting for Derivatives and Hedging Activities, including Valuation of Derivatives and Hedged Items: Derivative instruments are carried at fair value on the Statements of Condition. Any change in the fair value of a derivative is recorded each period in current period earnings or other comprehensive income (OCI), depending upon whether the derivative is designated as part of a hedging relationship and, if it is, the type of hedging relationship. Therefore, the assumptions and judgment most critical to the application of this accounting policy are those affecting the estimation of fair values of derivative instruments and the related hedged items, which may have a significant impact on the results reported. A majority of our derivatives are structured to offset some or all of the risk exposure inherent in our lending, mortgage purchase, investment, and funding activities. We seek to utilize hedging techniques that are effective under the hedge accounting requirements; however, in some cases, we have elected to enter into derivatives that are economically effective at reducing risk but do not meet hedge accounting requirements. The accounting framework introduces the potential for considerable income variability from period to period. Specifically, a mismatch can exist between the timing of income and expense recognition from assets or liabilities and the income effects of derivative instruments positioned to mitigate market risk and cash flow variability. Therefore, during periods of significant changes in interest rates and other market factors, reported earnings may exhibit considerable variability. At December 31, 2024, our derivatives portfolio included notional amounts of $37.9 billion accounted for as fair value hedges and $14.1 billion accounted for as economic hedges, the gross fair value of derivative assets and liabilities was $95.7 million and $226.4 million, respectively, and the net fair value of derivative assets and liabilities as of December 31, 2024 was $357.3 million and $6.1 million, respectively.

 FHLBank bases the fair values of derivatives on instruments with similar terms or market prices, when available. However, active markets do not exist for many of FHLBank's derivatives. Consequently, fair values for these instruments are generally estimated using standard valuation techniques such as comparisons to similar instruments or discounted cash flow analysis, which uses observable market inputs, such as discount rate, forward interest rates, and volatility assumptions. Observable market inputs are actively quoted and can be validated to external sources. See Note 14 of the Notes to Financial Statements under Item 8 – "Financial Statements and Supplementary Data" for discussion of the valuation methodologies and primary inputs used to develop the fair value measurement for these instruments.

 A hedging relationship is created from the designation of a derivative financial instrument as hedging our exposure to changes in the fair value of a financial instrument. Fair value hedge accounting allows for the offsetting fair value of the hedged risk in the hedged item to also be recorded in current period earnings. Perfectly effective hedges that use interest rate swaps as the hedging instrument and that meet certain stringent criteria can qualify for "shortcut" fair value hedge accounting. Shortcut hedge accounting allows for the assumption of no ineffectiveness, which means that the change in fair value of the hedged item can be assumed to be equal to the change in fair value of the derivative.

 For derivative transactions that potentially qualify for long haul fair value hedge accounting treatment, management must assess how effective the derivatives have been, and are expected to be, in hedging offsetting changes in the estimated fair values attributable to the risks being hedged in the hedged items. Quantitative hedge effectiveness testing is performed at the inception of the hedging relationship and on an ongoing basis for long haul fair value hedges. We perform testing at hedge inception based on regression analysis of the hypothetical performance of the hedging relationship using historical market data. We then perform regression testing on an ongoing basis using accumulated actual values in conjunction with hypothetical values. For the hedging relationship to be considered effective, results must fall within established tolerances. If the hedge fails effectiveness testing, the hedge no longer qualifies for hedge accounting and the derivative is marked to estimated fair value through current period earnings without any offsetting change in estimated fair value related to the hedged item.

 For derivative instruments and hedged items that meet the requirements as described above and are designated as fair value hedges, we do not anticipate any significant impact on our financial condition or operating performance. For derivative instruments not qualifying for hedge accounting or with no identified hedged item (economic derivatives or economic hedges), changes in the market value of the derivative are reflected in income without any offset. This portfolio of economic derivatives consisted primarily of: (1) interest rate swaps hedging fixed rate MBS and non-MBS trading investments; (2) interest rate caps hedging duration risk; (3) interest rate swaps hedging consolidated obligation discount notes with tenors less than six months; and (4) interest rate basis swaps hedging cost of funds. While the fair value of derivative instruments with no offsetting qualifying hedged item will fluctuate with changes in interest rates and the impact on our earnings can be material, the change in fair value of trading securities associated with economic hedges is expected to partially offset that impact. The estimated fair values of the derivatives and hedged items do not have any cumulative economic effect if the derivative and the hedged item are held to maturity, or contain mutual optional termination provisions at par. Since these fair values fluctuate throughout the hedge period and eventually return to zero (derivative) or par value (hedged item) on the maturity or option exercise date, the earnings impact of fair value changes is only a timing issue for hedging relationships that remain outstanding to maturity or the call termination date. See Tables 43 and 44 under Item 7A – "Quantitative and Qualitative Disclosures About Market Risk," which present the notional amount and fair value amount for derivative instruments by hedged item, hedging instrument, hedging objective, and accounting designation. See Tables 10 through 12 under this Item 7, which show the relationship of gains/losses on economic hedges and gains/losses on the trading securities being hedged by economic derivatives. Our projections of changes in fair value of the derivatives have been consistent with actual results.

 See Note 1 and Note 6 of the Notes to Financial Statements under Item 8 – "Financial Statements and Supplementary Data" for additional discussion of accounting for derivatives and types of hedging transactions.

 Results of Operations
 Earnings Analysis: Table 5 presents changes in the major components of our net income (dollar amounts in thousands):

 Table 5

 Increase (Decrease) in Earnings Components

 12/31/2024 vs. 12/31/2023

 Dollar Change
 Percentage Change

 Total interest income
 $
 315,446
 8.3
 %

 Total interest expense
 215,278
 6.4

 Net interest income
 100,168
 21.8

 Provision (reversal) for credit losses on mortgage loans
 (995)
 (155.2)

 Net interest income after mortgage loan loss provision
 101,163
 22.0

 Net gains (losses) on trading securities
 (2,592)
 (13.3)

 Net gains (losses) on derivatives
 (9,317)
 (62.4)

 Other non-interest income
 1,102
 8.2

 Total other income (loss)
 (10,807)
 (22.5)

 Operating expenses
 4,595
 18.1

 Other non-interest expenses
 16,569
 23.1

 Total other expenses
 21,164
 21.8

 AHP assessments
 6,937
 16.9

 NET INCOME
 $
 62,255
 16.8
 %

 Net income increased $62.2 million, or 16.8 percent, to $432.7 million for the year ended December 31, 2024 compared to $370.5 million for the year ended December 31, 2023 primarily attributed to a $100.1 million increase in net interest income, partially offset by an $11.9 million decrease related to fluctuations in the fair value of derivatives and trading securities and a $21.2 million increase in other expenses, as discussed in greater detail below.

 Net Interest Income: Net interest income increased $100.1 million, or 21.8 percent, to $560.2 million for the year ended December 31, 2024 compared to $460.1 million for the year ended December 31, 2023. Balance sheet composition, market interest rates and trends, and net interest spread affect net interest income and net interest margin on earning assets, including advances, mortgage loans, and investments. The increase from 2023 to 2024 was attributed primarily to improvements in funding spreads and shifts in balance sheet composition. Asset spreads also improved, particularly on long-term investments and advances, combined with the impact of higher average interest rates on fair value hedges as compared to the prior period.

 Net interest margin increased twelve basis points during 2024 compared to 2023, from 0.61 percent for the year ended December 31, 2023 to 0.73 percent for the year ended December 31, 2024 due to increased average balances on short- and long-term investments and mortgage loans at higher interest rates, combined with the impact of higher interest rates and spreads on fair value hedges (see Table 8). Net interest spread, which is the difference between the yield on interest-earning assets and the average cost of funding, increased twelve basis points from 2023 to 2024 due to shifts in balance sheet composition between advances and investments, combined with spread improvements across most asset categories as discussed above. Net interest margin increased as a result of the improvement in net interest spread attributed to the aforementioned factors. For further discussion of investments, advances and mortgage loans, see this "Financial Condition" under this Item 7.

 Net interest income and net interest margin are also impacted by derivative and hedging activities, as net interest settlements on derivatives and the changes in fair values of hedged items and the corresponding derivative instruments designated in fair value hedging relationships are recorded in net interest income. For 2024, net interest income increased $158.5 million due to the impact of fair value hedges compared to the prior year due to increases in intermediate and long-term interest rates between periods. Tables 6 and 7 present the impact of derivatives and hedging activities recorded in net interest income (in thousands):

 Table 6

 2024

 Total

 Unrealized gains (losses) due to fair value changes

 $
 4,607
 $
 47,706
 $
 —
 $
 (1,203)
 $
 (1,581)
 $
 49,529

 Net amortization/accretion of hedging activities

 3,413
 —
 —
 4,590

 Net interest received (paid)
 296,828
 199,032
 —
 (6,464)
 (269,467)
 219,929

 (13,485)
 (15,425)
 —
 (28,639)

 TOTAL
 $
 291,363
 $
 231,313
 $
 $
 (7,419)
 $
 (270,633)
 $
 245,409

 1 Represents the interest amount on derivative collateral for which variation margin is characterized as a daily settled contract.

 Table 7

 2023

 Total

 Unrealized gains (losses) due to fair value changes

 $
 (6,037)
 $
 27,739
 $
 —
 $
 (883)
 $
 (4,256)
 $
 16,563

 Net amortization/accretion of hedging activities

 2,177
 —
 —
 3,404

 Net interest received (paid)
 271,973
 184,570
 —
 (34,679)
 (319,386)
 102,478

 (18,618)
 (18,091)
 —
 (35,567)

 TOTAL
 $
 249,495
 $
 194,218
 $
 $
 (34,864)
 $
 (322,908)
 $
 86,878

 1 Represents the interest amount on derivative collateral for which variation margin is characterized as a daily settled contract.

 Table 8 presents average balances and yields of major earning asset categories and the sources funding those earning assets (dollar amounts in thousands):

 Table 8

 2024
 2023
 2022

Balance
Income/Expense
 Yield
Balance
Income/Expense
 Yield
Balance
Income/Expense
 Yield

 Interest-earning assets:

 $
 2,774,672
 $
 144,639
 5.21
 %
 $
 2,817,399
 $
 143,330
 5.09
 %
 $
 1,560,269
 $
 33,548
 2.15
 %

 2,909,262
 153,604
 5.28
 2,391,466
 121,367
 5.08
 2,311,370
 42,895
 1.86

 4,637,672
 241,903
 5.22
 4,321,685
 221,114
 5.12
 3,426,096
 68,392
 2.00

 Investment securities1,2

 13,695,304
 820,796
 5.99
 11,838,703
 644,726
 5.45
 11,129,636
 264,278
 2.37

 Advances1,2

 44,460,023
 2,434,890
 5.48
 46,166,703
 2,409,840
 5.22
 34,290,538
 742,694
 2.17

 Mortgage loans3,4

 8,694,716
 322,061
 3.70
 8,080,282
 261,352
 3.23
 8,023,766
 228,583
 2.85

 Other interest-earning assets

 35,232
 2.02
 50,302
 1,430
 2.84
 47,418
 1.87

 Total earning assets
 77,206,881
 4,118,605
 5.34
 75,666,540
 3,803,159
 5.03
 60,789,093
 1,381,275
 2.27

 Other non-interest-earning assets

 280,207

 240,099
 223,334

 Total assets
 $
 77,487,088

 $
 75,906,639
 $
 61,012,427

 Interest-bearing liabilities:

 $
 819,721
 40,415
 4.93
 $
 685,032
 32,921
 4.81
 $
 785,204
 10,342
 1.32

 Consolidated obligations1:

 Discount Notes
 17,122,493
 888,622
 5.19
 22,070,185
 1,102,702
 5.00
 18,092,988
 368,075
 2.03

 Bonds
 54,600,307
 2,627,916
 4.81
 48,159,776
 2,206,160
 4.58
 38,125,726
 638,751
 1.68

 Other borrowings
 44,729
 1,433
 3.20
 46,359
 1,325
 2.86
 46,803
 1,116
 2.39

 Total interest-bearing liabilities

 72,587,250
 3,558,386
 4.90
 70,961,352
 3,343,108
 4.71
 57,050,721
 1,018,284
 1.78

 Capital and other non-interest-bearing funds

 4,899,838

 4,945,287
 3,961,706

 Total funding
 $
 77,487,088

 $
 75,906,639
 $
 61,012,427

 Net interest income and net interest spread5

 $
 560,219
 0.44
 %
 $
 460,051
 0.32
 %
 $
 362,991
 0.49
 %

 Net interest margin6

 0.73
 %
 0.61
 %
 0.60
 %

 1 Interest income/expense and average rates include the effect of associated derivatives that qualify for fair value hedge accounting treatment.
 2 Interest income includes prepayment/yield maintenance fees.
 3 Credit enhancement income payments made to PFIs are netted against interest earnings on the mortgage loans. The expense related to these payments was $7.2 million, $6.5 million and $6.4 million for the years ended December 31, 2024, 2023, and 2022, respectively.
 4 Mortgage loans average balance includes outstanding principal for non-performing conventional loans. However, these loans no longer accrue interest.
 5 Net interest spread is the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
 6 Net interest margin is defined as net interest income as a percentage of average interest-earning assets.

 Changes in the volume of interest-earning assets and the level of interest rates influence changes in net interest income, net interest spread and net interest margin. Table 9 summarizes changes in interest income and interest expense (in thousands):

 Table 9

 2024 vs. 2023
 2023 vs. 2022

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

 Volume1,2

 Rate1,2

 Total
 Volume1,2

 Rate1,2

 Total

 Interest Income3:

 $
 (2,194)
 $
 3,503
 $
 1,309
 $
 40,729
 $
 69,053
 $
 109,782

 27,173
 5,064
 32,237
 1,538
 76,934
 78,472

 16,415
 4,374
 20,789
 21,882
 130,840
 152,722

 Investment securities
 107,408
 68,662
 176,070
 17,860
 362,588
 380,448

 (90,967)
 116,017
 25,050
 328,744
 1,338,402
 1,667,146

 Mortgage loans
 20,865
 39,844
 60,709
 1,621
 31,148
 32,769

 Other assets
 (366)
 (352)
 (718)

 Total earning assets
 78,334
 237,112
 315,446
 412,431
 2,009,453
 2,421,884

 Interest Expense3:

 6,621
 7,494
 (1,480)
 24,059
 22,579

 Consolidated obligations:

 Discount notes
 (255,367)
 41,287
 (214,080)
 96,362
 638,265
 734,627

 Bonds
 305,870
 115,886
 421,756
 206,522
 1,360,887
 1,567,409

 Other borrowings
 (48)
 (10)

 Total interest-bearing liabilities
 57,076
 158,202
 215,278
 301,394
 2,023,430
 2,324,824

 Change in net interest income
 $
 21,258
 $
 78,910
 $
 100,168
 $
 111,037
 $
 (13,977)
 $
 97,060

 1 Changes in interest income and interest expense not identifiable as either volume-related or rate-related have been allocated to volume and rate based upon the proportion of the absolute value of the volume and rate changes.
 2 Amounts used to calculate volume and rate changes are based on numbers in dollars. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same results.
 3 Interest income/expense and average rates include the effect of associated derivatives that qualify for fair value hedge accounting treatment.

 Net Gains (Losses) on Derivatives: Tables 10 and 11 present the earnings impact of derivatives by financial instrument as recorded in other non-interest income (in thousands):

 Table 10

 2024

 Balance Sheet

 Total

 Derivatives not designated as hedging instruments:

 Economic hedges – unrealized gains (losses) due to fair value changes

 $
 $
 (16,667)
 $
 —
 $
 $
 (571)
 $
 (4,030)
 $
 (19,866)

 —
 —
 (468)
 —
 —
 —
 (468)

 Economic hedges – net interest received (paid)

 4,283
 23,903
 —
 (1,027)
 (2,501)
 1,620
 26,278

 (207)
 (123)
 —
 (1)
 (7)
 —
 (338)

 Net gains (losses) on derivatives
 4,667
 7,113
 (468)
 (217)
 (3,079)
 (2,410)
 5,606

 Net gains (losses) on trading securities hedged on an economic basis with derivatives

 —
 16,871
 —
 —
 —
 —
 16,871

 TOTAL
 $
 4,667
 $
 23,984
 $
 (468)
 $
 (217)
 $
 (3,079)
 $
 (2,410)
 $
 22,477

 1 Represents the interest amount on derivative collateral for which variation margin is characterized as a daily settled contract.

 Table 11

 2023

 Consolidated
Obligation Discount Notes
 Consolidated
Obligation Bonds
 Total

 Derivatives not designated as hedging instruments:

 Economic hedges – unrealized gains (losses) due to fair value changes

 $
 $
 (23,874)
 $
 —
 $
 3,624
 $
 $
 (18,502)

 —
 —
 (809)
 —
 —
 (809)

 Economic hedges – net interest received (paid)
 3,616
 33,327
 —
 (954)
 (956)
 35,033

 (224)
 (594)
 —
 (10)
 (799)

 Net gains (losses) on derivatives
 4,303
 8,859
 (809)
 2,660
 (90)
 14,923

 Net gains (losses) on trading securities hedged on an economic basis with derivatives

 —
 19,579
 —
 —
 —
 19,579

 TOTAL
 $
 4,303
 $
 28,438
 $
 (809)
 $
 2,660
 $
 (90)
 $
 34,502

 1 Represents the interest amount on derivative collateral for which variation margin is characterized as a daily settled contract.

 The volatility in other income (loss) is driven predominantly by net gains (losses) on economic derivatives, which generally include interest rate swaps, caps and floors. Net gains (losses) from derivatives are sensitive to several factors, including: (1) the general level of interest rates and change between indices; (2) the shape of the term structure of interest rates; and (3) implied volatilities of interest rates. The fair value of options, particularly interest rate caps and floors, are also impacted by the time value decay that occurs as the options approach maturity, but this factor represents the normal amortization of the cost of these options and flows through income irrespective of any changes in the other factors impacting the fair value of the options (level of rates, shape of curve, and implied volatility).

 As reflected in Tables 10 and 11, the majority of the net unrealized gains and losses on derivatives are related to changes in the fair values of economic swaps related to investments. Net interest payments or receipts on economic derivatives flow through net gains (losses) on derivatives instead of net interest income, which does not reflect the full economic impact of the swaps on yields, especially for trading investments that are economically swapped to variable rates. We generally record net unrealized gains on derivatives when the overall level of interest rates rises over the period and record net unrealized losses when the overall level of interest rates falls over the period. Net unrealized gains or losses on derivatives will continue to be a function of the general level of swap rates but are also impacted by swap spreads in relationship to the relevant index rate.

 For the years ended December 31, 2024 and 2023, net gains (losses) on derivatives resulted in other income of $5.6 million and $14.9 million, respectively. The decrease between periods was attributed to fair value fluctuations resulting from changes in swap index rates, partially offset in both periods by net interest settlements of $26.3 million and $35.0 million for the years ended December 31, 2024 and 2023, respectively.

 The fair value gains and losses (excluding related net interest settlements) on the economic interest rate swaps hedging the multifamily GSE MBS, U.S. Treasury obligations, and GSE debentures were largely offset by the fair value gains and losses attributable to the associated securities for the years ended December 31, 2024 and 2023, which are recorded in net gains (losses) on trading securities as reflected in Table 12. Unrealized gains and losses on trading securities are generally driven by movements in intermediate interest rates between periods and are discussed in greater detail below.

 Table 12

 2024
 2023

 Gains (Losses) on Derivatives
 Gains (Losses) on Trading Securities
 Net
 Gains (Losses) on Derivatives
 Gains (Losses) on Trading Securities
 Net

 $
 —
 $
 —
 $
 —
 $
 (4,384)
 $
 3,767
 $
 (617)

 (5,313)
 4,446
 (867)
 (6,971)
 4,983
 (1,988)

 (11,354)
 12,425
 1,071
 (11,431)
 10,829
 (602)

 TOTAL
 $
 (16,667)
 $
 16,871
 $
 $
 (22,786)
 $
 19,579
 $
 (3,207)

 For additional detail regarding gains and losses on trading securities, see Table 13 and related discussion below.

 See Tables 43 and 44 under Item 7A – "Quantitative and Qualitative Disclosures About Market Risk" for additional detail regarding notional and fair value amounts of derivative instruments.

 Net Gains (Losses) on Trading Securities: Our trading portfolio is comprised primarily of fixed rate multifamily GSE MBS, with a small percentage of fixed rate GSE debentures and variable rate single-family GSE MBS. Periodically, we also invest in short-term securities and U.S. Treasury obligations classified as trading. In general, the fixed rate securities are related to economic hedges in the form of interest rate swaps that convert fixed rates to variable rates on the fixed rate securities and the related economic hedges. The fair values of the fixed rate multifamily GSE MBS are affected by changes in mortgage rates and credit spreads and are swapped on an economic basis to SOFR. The fair values of the fixed rate GSE debentures are affected by changes in intermediate term interest rates and credit spreads and are swapped on an economic basis to SOFR.

 All unrealized gains and losses related to trading securities are recorded in other income (loss) as net gains (losses) on trading securities; however, only gains and losses relating to trading securities that are related to economic hedges are included in Table 12. Unrealized gains (losses) fluctuate as the fair value of our trading portfolio fluctuates. There are a number of factors that can impact the fair value of a trading security including the movement in interest rates, changes in credit spreads, the passage of time, and changes in price volatility. Table 13 presents the major components of the net gains (losses) on trading securities (in thousands):

 Table 13

 2024
 2023

 Trading securities not hedged:

 U.S. obligation MBS and GSE MBS
 $
 $
 (25)

 Total trading securities not hedged
 (25)

 Trading securities hedged on an economic basis with derivatives:

 —
 3,767

 4,446
 4,983

 12,425
 10,829

 Total trading securities hedged on an economic basis with derivatives

 16,871
 19,579

 TOTAL
 $
 16,962
 $
 19,554

 The unrealized gains on the securities in the trading portfolio for the current periods reflect the changes in term Treasury and mortgage rates relative to the prevailing yields at the end of the prior year periods. In addition to interest rates and credit spreads, the value of these securities is affected by price convergence to par which results in a decrease in their current premium price (i.e., time decay).

 Other Expenses: Other expenses, which includes compensation and benefits, other operating expenses and voluntary housing and community investment program contributions, increased $21.2 million for the year ended December 31, 2024. The increase is primarily a result of a $2.6 million increase in compensation and benefits and $13.5 million in voluntary grant programs awarded in partnership with FHLBank members to support affordable housing and community development initiatives throughout Colorado, Kansas, Nebraska, and Oklahoma. These voluntary contributions are in addition to the statutory AHP assessments under the Bank Act required to fund affordable housing initiatives. Compensation and benefits increased due to hiring for new and open positions and higher incentive accruals based on incentive plan goal attainment.

 Affordable Housing and Community Investment Programs:
 In addition to the 10 percent AHP statutory assessment, the FHLBanks jointly stated in their public comment letter to the FHFA that they are already making or will make voluntary contributions of 5.0 percent of earnings in support of community investment activities. For 2024, we committed to provide 2.5 percent of our 2023 earnings (calculated as net income before our AHP assessment, voluntary contribution program expense, and interest expense on mandatorily redeemable capital stock). We exceeded this commitment with voluntary housing program expenses totaling 3.5 percent of 2023 earnings. For 2025, the commitment increased to 5.0 percent of 2024 earnings calculated under the same method. Voluntary contribution amounts expensed reduce pre-assessment net income, which is the basis of the statutory AHP calculation, so a "make-whole" contribution equal to the reduction in the AHP statutory assessment attributable to the voluntary contributions is added to our AHP program. The "make-whole" calculation ensures that the 10 percent AHP statutory assessment is not impacted by voluntary contributions. The AHP assessment and the "make-whole" contribution are available to be awarded in the year subsequent to when they are expensed. Voluntary housing and community investment program contributions are expensed in the period they are approved by the board of directors and/or awarded, which does not occur ratably throughout the year.

 Table 14 provides the basis for the calculations of the statutory assessment and voluntary program contributions (dollar amounts in thousands):

 Table 14

 For Year Ended December 31,

 2023
 2022
 2021

 Net earnings base for calculation of voluntary program contribution commitment:

 Net income

 $
 $
 $
 160,590

 10 percent statutory assessment

 Mandatorily redeemable capital stock interest expense

 Voluntary contribution expense

 3,000
 —
 —

 Net earnings

 $
 414,645
 $
 267,492
 $
 178,454

 2024
 2023
 2022

 Statutory and voluntary calculated amounts:

 Statutory AHP assessment (prior year expense)

 $
 $
 $

 Voluntary contribution expense (current year expense)

 14,848
 3,000
 —

 Total statutory assessments and voluntary contributions

 $
 56,012
 $
 29,749
 $

 Statutory assessments and voluntary contributions as a percentage of net earnings

 13.5
 %
 11.1
 %
 10.0
 %

 The AHP competitive program provides direct grants or below-market interest rates on advances to members that provide the funds to assist in the purchase, construction, or rehabilitation of housing for very low-, low-, and moderate-income households. In addition to the competitive AHP program funds, our assessments also finance the HSP, which is part of our TurnKey suite of products. The programs offered under TurnKey are HSP, HSP+, and HOPE. These programs provide down payment, closing cost, and purchase-related repair assistance to very low-, low-, and moderate-income first-time households, including first-time households in High-Cost Areas and non-metropolitan Difficult Development Areas in our district and households in our district that traditionally do not receive assistance but require a subsidy to make homeownership accessible and affordable. The NAHI grant program provides Native American tribes and tribally designated housing entities in our district with access to grant funds intended to support housing for tribal members in our district. For additional information on FHLBank's affordable housing and community development initiatives, refer to Item 1 - "Other Mission-Related Activities."

 Table 15 provides fulfillment details of the voluntary contribution commitment by program (in thousands):

 Table 15

 For Year Ended December 31,

 2024
 2023
 2022

 Commitment fulfillment by program:

 AHP statutory assessment:

 AHP competitive funds

 $
 26,756
 $
 17,387
 $
 11,599

 HSP/HSP+

 14,408
 9,362
 6,246

 Total AHP

 Voluntary contribution programs:

 NAHI

 5,314
 3,000
 —

 HOPE

 4,266
 —
 —

 AHP Extra
 4,232
 —
 —

 Other

 1,036
 —
 —

 Total voluntary contribution programs

 $
 14,848
 $
 3,000
 $
 —

 Total
 $
 56,012
 $
 29,749
 $

 Table 16 reconciles the voluntary contribution program amounts to the Statements of Income (dollar amounts in thousands):

 Table 16

 For Year Ended December 31,

 2024
 2023
 2022

 Voluntary housing and community investment program contribution expense:

 Voluntary contribution expense

 $
 14,848
 $
 3,000
 $
 —

 Voluntary AHP "make-whole" contribution1

 1,650
 —
 —

 Total voluntary contribution expense on Statements of Income

 $
 16,498
 $
 3,000
 $
 —

 1 Amount calculated as 11.1 percent of current year voluntary contribution expense beginning in 2024.

 Financial Condition
 Overall: Table 17 presents the percentage concentration of the major components of our Statements of Condition:

 Table 17

 Component Concentration

 Assets:

 Cash and due from banks
 —
 %
 0.1
 %

 Interest-bearing deposits, securities purchased under agreements to resell and Federal funds sold
 14.3
 10.1

 Investment securities
 18.1
 17.2

 54.9
 60.6

 Mortgage loans, net
 11.8
 11.1

 Other assets
 0.9
 0.9

 Total assets
 100.0
 %
 100.0
 %

 Liabilities:

 1.4
 %
 1.0
 %

 Consolidated obligation discount notes, net
 19.0
 27.7

 Consolidated obligation bonds, net
 73.6
 65.4

 Other liabilities
 0.6
 0.7

 Total liabilities
 94.6
 94.8

 Capital:

 Capital stock outstanding
 3.5
 3.5

 Retained earnings
 2.1
 1.9

 Accumulated other comprehensive income (loss)
 (0.2)
 (0.2)

 Total capital
 5.4
 5.2

 Total liabilities and capital
 100.0
 %
 100.0
 %

 Table 18 presents changes in the major components of our Statements of Condition (dollar amounts in thousands):

 Table 18

 Increase (Decrease)
in Components

 12/31/2024 vs. 12/31/2023

 Dollar
Change
 Percent
Change

 Assets:

 Cash and due from banks
 $
 (487)
 (1.9)
 %

 Interest-bearing deposits, securities purchased under agreements to resell and Federal funds sold
 3,307,434
 43.7

 Investment securities
 790,551
 6.1

 (3,792,688)
 (8.3)

 Mortgage loans, net
 596,720
 7.1

 Other assets
 52,465
 8.2

 Total assets
 $
 953,995
 1.3
 %

 Liabilities:

 $
 236,821
 31.5
 %

 Consolidated obligation discount notes, net
 (6,326,202)
 (30.5)

 Consolidated obligation bonds, net
 6,817,017
 13.9

 Other liabilities
 17,282
 3.4

 Total liabilities
 744,918
 1.0

 Capital:

 Capital stock outstanding
 23,922
 0.9

 Retained earnings
 206,146
 14.7

 Accumulated other comprehensive income (loss)
 (20,991)
 17.6

 Total capital
 209,077
 5.4

 Total liabilities and capital
 $
 953,995
 1.3
 %

 Total assets increased $1.0 billion between periods, from $74.9 billion at December 31, 2023 to $75.9 billion at December 31, 2024, driven by the $4.1 billion increase in short- and long-term investments and a $0.6 billion increase in mortgage loans between periods, partially offset by a $3.8 billion decrease in advances. Asset composition remained relatively consistent during 2024, with advances comprising the largest asset on the balance sheet, despite a decrease in advance balances from 60.6 percent of total assets at December 31, 2023 to 54.9 percent at December 31, 2024. Short-term investments increased to 14.3 percent of total assets as of December 31, 2024 compared to 10.1 percent as of December 31, 2023 as a result of FHLBank holding higher balances of liquid assets to provide adequate liquidity availability for members compared to the end of 2023. Total liabilities increased $0.7 billion from December 31, 2023 to December 31, 2024, which corresponded to the increase in assets, but the composition of debt shifted between periods. Consolidated obligation bonds and discount notes represented 70.3 percent and 29.7 percent of total consolidated obligations, respectively, at December 31, 2023 compared to 79.5 percent and 20.5 percent at December 31, 2024. This composition shift is mostly due to an increase in short-term floating rate bonds, partially offset by a decrease in fixed rate callable bonds (swapped) and a decrease in discount notes. The increase in floating rate bonds was due to advantageous pricing and better matching of repricing characteristics of the assets they are funding. Total capital increased $0.2 billion, or 5.4 percent, from December 31, 2023 to December 31, 2024 primarily due to an increase in retained earnings in excess of dividends paid and an increase in excess capital stock.

 Advances: Advances are one of the primary ways we fulfill our mission of providing liquidity to our members and constituted the largest asset on our balance sheet at December 31, 2024 and 2023. Advance par value decreased by $3.8 billion, or 8.3 percent, from $45.7 billion at December 31, 2023 to $41.9 billion at December 31, 2024 (see Table 19). Outside of period-end volatility with larger members, advance demand continues to be relatively stable among FHLBank membership, especially among community banks and insurance companies. The composition of the advance portfolio remains concentrated in advances that either reprice or mature on a relatively short-term basis; line of credit, adjustable rate advances, and short-term fixed rate advances were 58.4 percent of the portfolio at December 31, 2024 compared to 66.0 percent as of December 31, 2023. Within the population of advances that reprice or mature on a relatively short-term basis, composition has shifted from short-term fixed rate advances to adjustable rate advances. Despite the overall decline in fixed rate advances, putable fixed rate advances increased $1.0 billion between periods and regular fixed rate advances increased $0.5 billion between periods. When issuing a putable advance, we effectively purchase a put option from the member that allows us to put or extinguish the advance at a predetermined future date, which we normally would exercise when interest rates increase. A putable advance is generally issued at a lower rate than the advance without the put option. It follows that the increase in putable fixed rate advance activity reflects members' outlook on interest rates and the actual decline in short-term interest rates since December 31, 2023.

 We elect to swap a significant portion of fixed rate advances with longer maturities to short-term indices to synthetically create adjustable rate advances to manage interest rate risk. When coupled with the volume of our short-term fixed rate and adjustable rate advances, advances that effectively re-price at least every three months represented 97.1 percent and 95.9 percent of our total advance portfolio as of December 31, 2024 and 2023, respectively. We anticipate continuing the practice of swapping fixed rate advances to short-term indices.

 As of December 31, 2024 and 2023, 62.8 percent and 65.1 percent, respectively, of our members carried outstanding advance balances. Advance balances may be impacted by monetary policy changes intended to curb inflationary pressures and the related inflationary effects on member balance sheets, including decreased loan demand and the inability to grow or retain deposit balances. Members also have access to other wholesale funding sources, which may impact the demand for advances on the basis of relative cost.

 Table 19 summarizes advances outstanding by product (dollar amounts in thousands). An individual advance may be reclassified to a different product type between periods due to the occurrence of a triggering event such as the passing of a call date (i.e., from fixed rate callable advance to regular fixed rate advance).

 Table 19

 Dollar
 Percent
 Dollar
 Percent

 Line of Credit:

 Overnight line of credit1

 $
 8,829,398
 21.1
 %
 $
 11,747,448
 25.7
 %

 Adjustable rate:

 Standard advance products:

 Regular adjustable rate advances
 11,931,497
 28.5
 4,418,750
 9.7

 Adjustable rate callable advances
 983,500
 2.3
 1,616,400
 3.5

 Standard housing and community development advances:

 Adjustable rate callable advances
 20,535
 0.1
 22,262
 0.1

 Total adjustable rate term advances
 12,935,532
 30.9
 6,057,412
 13.3

 Fixed rate:

 Standard advance products:

 Short-term fixed rate advances2

 2,658,109
 6.4
 12,313,627
 27.0

 Regular fixed rate advances
 12,944,095
 30.9
 12,359,319
 27.1

 Fixed rate callable advances
 48,302
 0.1
 68,402
 0.2

 Fixed rate putable advances
 3,095,200
 7.4
 2,071,800
 4.5

 Fixed rate convertible advances
 20,500
 0.1
 113,400
 0.3

 Standard housing and community development advances:

 Regular fixed rate advances
 234,266
 0.6
 291,064
 0.6

 Fixed rate callable advances
 —
 —

 Total fixed rate term advances
 19,000,930
 45.5
 27,218,070
 59.7

 Amortizing:

 Standard advance products:

 Fixed rate amortizing advances
 900,980
 2.2
 415,568
 0.9

 Fixed rate callable amortizing advances
 16,585
 —
 18,367
 —

 Standard housing and community development advances:

 Fixed rate amortizing advances
 179,156
 0.3
 202,036
 0.4

 Fixed rate callable amortizing advances
 13,111
 —
 11,401
 —

 Total amortizing advances
 1,109,832
 2.5
 647,372
 1.3

 $
 100.0
 %
 $
 100.0
 %

 1 Represents fixed rate line of credit advances with daily maturities.
 2 Represents non-amortizing, non-prepayable loans with terms to maturity from 3 to 93 days.

 Our potential credit risk from advances is concentrated in commercial banks, savings institutions, and insurance companies in our four-state district, but also includes potential credit risk exposure to credit unions, housing associates and a small number of non-members. Table 20 presents advances outstanding by borrower type (in thousands):

 Table 20

 Member advances:

 Commercial banks
 $
 15,941,387
 $
 21,969,321

 Savings institutions
 13,119,023
 12,842,164

 Insurance companies
 9,428,930
 7,469,328

 Credit unions
 3,261,314
 3,268,583

 CDFIs
 18,404
 26,404

 Total member advances
 41,769,058
 45,575,800

 Non-member advances:

 Housing associates
 104,634
 94,502

 Non-member borrowers1

 2,000
 —

 Total non-member advances
 106,634
 94,502

 $
 $

 1 Includes former members that have merged into or were acquired by non-members.

 Table 21 presents information on our five largest borrowers (dollar amounts in thousands). We do not expect to incur any credit losses on these advances based on our rights to collateral with an estimated fair value in excess of the book value of these advances. We have not experienced a credit loss on an advance since the inception of FHLBank.

 Table 21

 Borrower Name

 Advance
 Advance Par

 Advance
 Advance Par

 $
 10,125,000
 24.2
 %
 $
 9,585,000
 21.0
 %

 3,000,000
 7.2
 7,675,000
 16.8

 United of Omaha Life Insurance Co.
 2,747,585
 6.6
 2,278,283
 5.0

 First United Bank & Trust
 2,230,000
 5.3
 1,881,516
 4.1

 Capitol Federal Savings Bank
 2,164,488
 5.2
 2,375,410
 5.2

 TOTAL
 $
 20,267,073
 48.5
 %
 $
 23,795,209
 52.1
 %

 Table 22 presents accrued interest income associated with the five borrowers with the highest interest income for the periods presented (dollar amounts in thousands). If the borrower was not one of our top five borrowers for whom we accrued the highest amount of interest income for one of the periods presented, the applicable columns are left blank.

 Table 22

 Year Ended

 Borrower Name
 Advance Income
 Advance Income1

 Advance Income
 Advance Income1

 $
 562,255
 26.2
 %
 $
 585,147
 27.1
 %

 337,654
 15.7
 314,616
 14.5

 United of Omaha Life Insurance Co.
 123,299
 5.7
 81,285
 3.8

 Security Life of Denver Insurance Co.
 111,635
 5.2
 79,684
 3.6

 First United Bank & Trust Co.
 103,988
 4.8

 Capitol Federal Savings Bank
 107,137
 5.0

 TOTAL
 $
 1,238,831
 57.6
 %
 $
 1,167,869
 54.0
 %

 1 Total advance income by borrower excludes: (1) changes in unrealized gains (losses) from qualifying fair value hedging relationships; (2) net interest settlements on derivatives hedging the advances; and (3) prepayment fees received.

 Prepayment Fees - Advances are priced based on our marginal cost of issuing matched-maturity funding while considering our related administrative and operating costs, pricing on other funding alternatives available to members, and desired profitability targets. Advances with a maturity or repricing period greater than three months that do not include call features that can be exercised at the option of the member generally incorporate a fee sufficient to make us economically indifferent should the borrower decide to prepay the advance.

 Letters of Credit - We also issue letters of credit for members. Members must collateralize letters of credit in accordance with the same requirements as for advances. Letters of credit are generally issued or confirmed on behalf of a member to: (1) collateralize public unit deposits: (2) facilitate residential housing finance; (3) facilitate community lending; (4) manage assets/liabilities; or (5) provide liquidity or other funding. Outstanding letters of credit balances totaled $7.5 billion and $7.2 billion as of December 31, 2024 and 2023, respectively.

 Housing Associates - We are permitted under the Bank Act to make advances to housing associates, which are non-members that are approved mortgagees under Title II of the National Housing Act. All outstanding advances to housing associates are to state housing finance authorities. Totals as of December 31, 2024 and 2023, which are noted in Table 20, represent less than one percent of total advance par values for each period presented.

 MPF Program: The MPF Program is a secondary mortgage market alternative for our members, predominately utilized by the smaller institutions in our district. We participate in the MPF Program through the MPF Provider, a division of FHLBank Chicago. Under the MPF Program, participating members can sell us fixed rate conventional and government residential mortgage loans.

 The mortgage loan portfolio increased $0.6 billion between periods, from $8.3 billion at December 31, 2023 to $8.9 billion at December 31, 2024. Mortgage rates have remained elevated, which has reduced origination volume and refinancing incentive for borrowers and slowed prepayments in recent periods, although purchase volume has continued to exceed principal repayments. As mortgage interest rates decline, we expect an increase in prepayments and new originations of mortgage loans. Net mortgage loans as a percentage of total assets increased, from 11.1 percent as of December 31, 2023 to 11.8 percent as of December 31, 2024. The principal amount of new mortgage loans acquired and held on our balance sheet from our PFIs during the year ended December 31, 2024 was $1.5 billion.

 Future growth in the MPF portfolio is a function of asset size and composition, most notably the balance of advances, and capital level, as growth in advances impacts our total assets and capital level, which allows the balance of mortgage loans to increase while maintaining our targeted AMA risk tolerance. The other factors that may influence future growth in our mortgage loans held for portfolio include: (1) the level of interest rates and the shape of the yield curve; (2) the mortgage loan origination volume of current PFIs; (3) refinancing activity; (4) the relative competitiveness of MPF pricing to the prices offered by other buyers of residential mortgage loans; (5) a PFI's level of excess risk-based capital relative to the required risk-based capital charge associated with the PFI's CE obligations on MPF mortgage loans; and (6) the number of new and delivering PFIs.

 Table 23 presents the unpaid principal balance of mortgage loans according to the amortization schedule based on the contractual terms of the loan (in thousands). Scheduled repayments are reported in the maturity category in which the payment is due. Prepayments may shorten the amortization period and late payments may extend the principal amortization of the late payments to the maturity date.

 Table 23

 $
 318,200
 $
 310,706

 Due after one year through five years
 1,309,284
 1,279,640

 Due after five years through fifteen years
 3,375,042
 3,232,396

 3,875,401
 3,460,409

 TOTAL UNPAID PRINCIPAL BALANCE
 $
 8,877,927
 $
 8,283,151

 Table 24 presents the outstanding balances of mortgage loans sold to us, net of participations, from our top five PFIs and the percentage of those loans to total mortgage loans outstanding (dollar amounts in thousands). Columns are left blank for periods presented in which the PFI was not one of our top five outstanding mortgage loan balances.

 Table 24

 Mortgage
Loan Balance

 Mortgage
Loan Balance

 Farmers Bank & Trust
 $
 504,595
 5.7
 %
 $
 338,745
 4.1
 %

 Fidelity Bank
 406,622
 4.6
 366,733
 4.4

 Tulsa Teachers Credit Union
 300,132
 3.4
 304,925
 3.7

 West Gate Bank
 291,134
 3.3
 267,101
 3.2

 First National Bank of Omaha

 232,791
 2.6

 Community National Bank & Trust
 226,466
 2.7

 TOTAL
 $
 1,735,274
 19.6
 %
 $
 1,503,970
 18.1
 %

 Table 25 presents mortgage loan portfolio credit ratios and the components of the ratio calculation for the periods presented (dollar amounts in thousands):

 Table 25

 Average loans outstanding during the period, unpaid principal balance
 $
 8,618,877
 $
 8,002,681

 Mortgage loans held for portfolio, unpaid principal balance
 8,877,927
 8,283,151

 Nonaccrual loans, unpaid principal balance
 24,093
 19,002

 Allowance for credit losses
 4,033
 5,531

 Net (charge-offs) recoveries

 (206)

 Ratio of net charge-offs (recoveries) to average loans outstanding during the period
 —
 %
 —
 %

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

 Ratio of nonaccrual loans to mortgage loans held for portfolio
 0.27
 0.23

 Ratio of allowance for credit losses to nonaccrual loans
 21.59
 29.11

 Two indications of credit quality are FICO scores and LTV ratios. FICO is a widely used credit industry indicator to assess borrower credit quality with scores typically ranging from 300 to 850 with the low end of the scale indicating greater credit risk. In February 2010, the MPF Program instituted a minimum FICO score of 620 for all conventional loans. Table 26 provides the percentage distribution of FICO scores at origination for conventional mortgage loans outstanding in our traditional MPF products:

 Table 26

 FICO Score1

 < 620
 0.5
 %
 0.5
 %

 620 to < 660
 3.9
 4.2

 660 to < 700
 11.4
 11.8

 700 to < 740
 19.9
 19.4

 >= 740
 64.3
 64.1

 100.0
 %
 100.0
 %

 Weighted average

 1 Represents the original FICO score of the lowest-scoring borrower for the related loan.

 LTV is a primary variable in credit performance. Generally, a higher LTV ratio means greater risk of loss in the event of a default and higher loss severity. As noted previously, the maximum LTV for conventional MPF loans is 95 percent, though AHP MPF mortgage loans may have LTVs up to 100 percent. Table 27 provides LTV ratios at origination for conventional mortgage loans outstanding in our traditional MPF products:

 Table 27

 LTV

 <= 60%
 14.8
 %
 15.7
 %

 > 60% to 70%
 13.3
 14.0

 > 70% to 80%
 49.5
 49.6

 > 80% to 90%
 12.4
 11.4

 > 90% to < 100%
 10.0
 9.3

 100.0
 %
 100.0
 %

 Weighted average
 75.1
 %
 74.5
 %

 Our mortgage loans held in portfolio were dispersed across all 50 states and the District of Columbia as of December 31, 2024 and 2023. Table 28 is a summary of the geographic concentration percentage of our conventional mortgage loan portfolio by state, highlighting the top five states with the highest concentration.

 Table 28

 Kansas
 35.0
 %
 36.3
 %

 Nebraska
 23.9
 24.1

 Oklahoma
 10.8
 11.5

 Colorado
 11.0
 10.9

 Missouri
 2.3
 2.2

 All other
 17.0
 15.0

 TOTAL
 100.0
 %
 100.0
 %

 The credit risk of conventional mortgage loans sold under the traditional MPF products is managed by structuring potential credit losses into certain layers. As is customary for conventional mortgage loans, PMI is required for MPF loans with LTVs greater than 80 percent. Losses beyond the PMI layer are absorbed by a first loss account (FLA) established for each pool of mortgage loans sold by a PFI up to the maximum amount of the remaining FLA net of credit losses.

 Allowance for Credit Losses on Mortgage Loans Held for Portfolio – The allowance for credit losses on mortgage loans decreased $1.5 million from December 31, 2023 to December 31, 2024. Delinquencies of conventional loans remained at low levels relative to the portfolio, at 1.1 percent and 1.0 percent of the amortized cost of total conventional loans at December 31, 2024 and December 31, 2023, respectively. We believe that policies and procedures are in place to effectively manage the credit risk on mortgage loans held for portfolio. See Note 5 of the Notes to Financial Statements under Item 8 for a summary of the allowance for credit losses on mortgage loans as well as payment status and other delinquency statistics for our mortgage loan portfolio.

 Investments: Investments are used to manage interest rate and duration risk, enhance income, and provide liquidity and primary and secondary market support for the U.S. housing securities market. Total investments increased $4.1 billion from December 31, 2023 to December 31, 2024 driven by increases in Federal funds sold, interest bearing deposits and MBS securities.

 Short-term Investments – Short-term investments, which are used to provide funds for our members, maintain liquidity, meet other financial obligations such as debt servicing, and enhance income, consist primarily of reverse repurchase agreements, interest-bearing deposits, Federal funds sold, and certificates of deposit. Fluctuations in short-term investments reflect the impact of regulatory requirements, anticipated member liquidity needs, and the timing of paydowns, maturities, and investment opportunities on liquidity management practices. At December 31, 2024, the $3.3 billion increase in short-term investments was due primarily to advance paydowns and the timing of investment opportunities at year-end.

 Within our portfolio of short-term investments, counterparty credit risk arises from unsecured exposures. Our short-term unsecured credit investments have maturities generally ranging between overnight and three months and may include the following types:
 • Interest-bearing deposits. Unsecured deposits that earn interest.
 • Federal funds sold. Unsecured loans of reserve balances at the Federal Reserve Banks between financial institutions that are made on either an overnight or term basis, but typically made on an overnight basis.
 • Certificates of deposit. Unsecured negotiable promissory notes issued by banks and payable to the bearer at maturity.

 Table 29 presents the carrying value of our unsecured credit exposure with private counterparties by investment type (in thousands). The unsecured investment credit exposure presented may not reflect the average or maximum exposure during the period as the balances presented reflect the balances at period end.

 Table 29

 $
 2,142,391
 $
 1,604,423

 TOTAL UNSECURED INVESTMENT CREDIT EXPOSURE1

 $
 5,717,391
 $
 3,684,423

 1 Excludes unsecured investment credit exposure to U.S. government, U.S. government agencies, instrumentalities, GSEs and supranational entities and does not include related accrued interest.

 We actively monitor our credit exposures and the credit quality of our counterparties, including an assessment of each counterparty's financial performance, capital adequacy, sovereign support and the current market perceptions of the counterparties. General macro-economic, political and market conditions may also be considered when deciding on unsecured exposure. As a result, we may further limit existing exposures.

 FHFA regulations include limits on the amount of unsecured credit an individual FHLBank may extend to a counterparty or to a group of affiliated counterparties. This limit is based on a percentage of eligible regulatory capital and the counterparty's overall credit rating. Under these regulations, the level of eligible regulatory capital is determined as the lesser of an individual FHLBank's total regulatory capital or the eligible amount of regulatory capital of the counterparty. The eligible amount of regulatory capital is then multiplied by a stated percentage. The percentage that an FHLBank may offer for term extensions of unsecured credit ranges from 1 percent to 15 percent based on the counterparty's internal credit rating. The calculation of term extensions of unsecured credit includes on-balance sheet transactions, off-balance sheet commitments and derivative transactions (derivative transactions cleared through a clearinghouse are excluded from the calculation and unsecured credit is limited with bilateral derivative counterparties due to the receipt of collateral based on zero collateral thresholds although there can be a lag between receipt and the calculation of exposure). See "Risk Management – Credit Risk Management" under this Item 7 for additional information related to derivative exposure.

 FHFA regulation also permits us to extend additional unsecured credit for overnight extensions of credit. Our total overnight unsecured exposure to a counterparty may not exceed twice the regulatory limit for term exposures, or a total of 2 percent to 30 percent of the eligible amount of regulatory capital, based on the counterparty's credit rating. We generally limit our unsecured exposure to any private counterparty to no more than the balance of our retained earnings, even if the counterparty limit under the previously discussed calculation would be higher. As of December 31, 2024, we were in compliance with the regulatory limits established for unsecured credit, and our unsecured credit exposure to any individual non-member private counterparty (excluding GSEs) did not exceed the balance of our retained earnings on that date.

 We are prohibited by FHFA regulation 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. 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 its 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. Throughout 2024, we were in compliance with the regulation and did not own any financial instruments issued by foreign sovereign governments.

 We manage our credit risk by conducting pre-purchase credit due diligence and ongoing surveillance described previously and generally investing in unsecured investments of highly-rated counterparties. We may extend unsecured credit to qualified members by investing in overnight Federal funds issued by them. As of December 31, 2024, all unsecured investments were rated as investment grade based on NRSROs (see Table 32).

 Table 30 presents the amount of our unsecured investment credit exposure by remaining contractual maturity and by the domicile of the counterparty or the domicile of the counterparty's parent for U.S. branches and agency offices of foreign commercial banks as of December 31, 2024 (in thousands). We also mitigate the credit risk on investments by purchasing instruments that have short-term maturities.

 Table 30

 Domicile of Counterparty
 Overnight

 Domestic
 $
 2,142,391

 U.S. Branches and agency offices of foreign commercial banks:

 Canada
 1,300,000

 Germany

 300,000

 Australia

 1,100,000

 Netherlands

 300,000

 Finland

 575,000

 Total U.S. Branches and agency offices of foreign commercial banks

 TOTAL UNSECURED INVESTMENT CREDIT EXPOSURE1

 $
 5,717,391

 1 Excludes unsecured investment credit exposure to U.S. government, U.S. government agencies, instrumentalities, GSEs and supranational entities, and does not include related accrued interest.

 Unsecured credit exposure continues to be conservatively placed. In addition, we anticipate continued future investment in reverse repurchase agreements, which are secured investments. To enhance our liquidity position, we classify our unsecured short-term investment securities in our trading portfolio, which allows us to sell these securities if necessary.

 Long-term investments – Our long-term investment portfolio consists primarily of GSE MBS and U.S. Treasury obligations. Our RMP restricts the acquisition of investments to highly rated long-term securities. Generally, fixed rate U.S. Treasury obligations are either classified as trading securities and economically swapped to variable rates or classified as available-for-sale securities and swapped to variable rates in qualifying fair value hedging relationships. In addition to serving as excellent collateral, U.S. Treasury obligations also help satisfy regulatory liquidity requirements. We also purchase fixed rate securities for duration and interest rate risk management.

 According to FHFA regulation, no additional MBS purchases may be made if the aggregate value of our MBS exceeds 300 percent of our regulatory capital. Further, quarterly increases in holdings of MBS are restricted to no more than 50 percent of regulatory capital. As of December 31, 2024, the aggregate value of our MBS portfolio represented 253 percent of our regulatory capital. We are below our regulatory threshold primarily due to an increase in regulatory capital despite increased MBS purchases in recent periods. We expect to be below our regulatory limit in the near-term but continue to remain opportunistic about future MBS purchases.

 We provide SBPAs to two state HFAs within our district. For a predetermined fee, we accept an obligation to purchase the authorities' bonds if the remarketing agent is unable to resell the bonds to suitable investors, and to hold the bonds until: (1) the designated remarketing agent can find a suitable investor; (2) we successfully exercise our right to sell the bonds; or (3) the HFA repurchases the bonds according to a schedule established by the SBPA. The standby bond purchase commitments executed and outstanding as of December 31, 2024 expire no later than 2029 though they are renewable upon request of the HFA and at our option. Total principal commitments for bond purchases under the SBPAs were $1.0 billion as of both December 31, 2024 and 2023. We were not required to purchase any bonds under these agreements during 2023 or 2024. We plan to continue supporting the state HFAs in our district by executing SBPAs where appropriate and when allowed by our RMP. In the future, we may acquire participation interests in SBPAs with other FHLBanks and/or directly enter into SBPAs with out-of-district HFAs with the permission of the in-district FHLBank.

 Major Security Types – Securities for which we have the ability and intent to hold to maturity are classified as held-to-maturity securities and recorded at carrying value, which is the net total of par, premiums, and discounts. We classify certain investments as trading or available-for-sale securities and carry them at fair value, generally for liquidity purposes, to provide a fair value offset to the gains (losses) on the interest rate swaps associated with swapped securities, and for asset/liability management purposes. Liquidity or other asset/liability management strategies may require periodic sale of these securities but they are not actively traded; most often, they are held until maturity or call date. Securities acquired as asset/liability management tools to manage duration risk, which may be sold when the duration exposure is within risk tolerances, are classified as trading or available-for-sale securities. Changes in the fair values of investments classified as trading are recorded through other income and the original premiums/discounts on these investments are not amortized.

 See Note 3 of the Notes to Financial Statements under Item 8 of this annual report for additional information on our different investment classifications including the types of securities held under each classification. The carrying values by contractual maturities of our investments as of December 31, 2024 are summarized by security type in Table 31 (dollar amounts in thousands) with certain weighted average yield metrics along with carrying values as of December 31, 2023. Expected maturities of MBS will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or yield maintenance fees.

 Table 31

 Due in
one year
or less
 Due after
 one year
 through five years

 Due after
 five years
 through 10 years

 Due after
10 years
 Carrying
Value
 Carrying
Value

 Trading securities:

 $
 $
 —
 $
 —
 $
 —
 $
 $

 325,087
 87,890
 5,289
 3,813

 Total trading securities
 342,971
 87,890
 5,289
 3,813

 Available-for-sale securities:

 440,483
 2,796,740
 —
 —

 —
 —
 —

 237,923
 2,642,365
 3,764,102
 3,074,564
 9,718,954
 8,708,050

 —
 —
 —
 —

 Total available-for-sale securities
 678,406
 5,439,105
 3,764,102
 3,176,006

 Held-to-maturity securities:

 —
 —
 —

 —
 28,423
 1,557
 158,951

 Total held-to-maturity securities
 —
 28,423
 32,452
 158,951

 Total securities
 1,021,377
 5,555,418
 3,801,843
 3,338,770
 13,717,408
 12,926,857

 —
 —
 —

 —
 —
 —

 —
 —
 —

 TOTAL INVESTMENTS
 $
 11,888,800
 $
 5,555,418
 $
 3,801,843
 $
 3,338,770
 $
 24,584,831
 $
 20,486,846

 Weighted average yields1:

 Available-for-sale securities
 2.77
 %
 2.93
 %
 4.28
 %
 4.69
 %

 Held-to-maturity securities
 —
 %
 2.97
 %
 2.65
 %
 1.71
 %

 1 The weighted average yields are calculated as the sum of each debt security using the period end balances multiplied by the coupon rate adjusted by the impact of amortization and accretion of premiums and discounts, divided by the total debt securities in the applicable portfolio. The result is then multiplied by 100 to express it as a percentage.

 Securities Ratings – Tables 32 and 33 present the carrying value of our investments by rating as of December 31, 2024 and 2023 (in thousands). The ratings presented are the lowest ratings available for the security, issuer, or counterparty based on NRSROs, where available. Some counterparties for collateralized overnight borrowing are not rated by an NRSRO because they are not issuers of debt or are otherwise not required to be rated by an NRSRO. We also utilize other credit quality factors when analyzing potential investments including, but not limited to, collateral performance, marketability, asset class or sector considerations, local and regional economic conditions, and/or the financial health of the underlying issuer.

 Table 32

 Carrying Value1

 Investment Grade
 Unrated
 Total

 Triple-A
 Double-A
 Single-A

 Interest-bearing deposits2

 $
 —
 $
 437,032
 $
 1,705,391
 $
 —
 $

 Federal funds sold2

 —
 1,675,000
 1,900,000
 —

 Securities purchased under agreements to resell3

 —
 2,500,000
 250,000
 2,400,000

 Investment securities:

 —
 —
 —

 —
 —
 —

 55,074
 —
 —
 —
 55,074

 Total non-mortgage-backed securities

 55,074
 3,255,107
 —
 —
 3,310,181

 —
 —
 —

 —
 10,329,964
 —
 —
 10,329,964

 Total mortgage-backed securities
 —
 10,407,227
 —
 —
 10,407,227

 TOTAL INVESTMENTS
 $
 55,074
 $
 18,274,366
 $
 3,855,391
 $
 2,400,000
 $
 24,584,831

 1 Investment amounts represent the carrying value and do not include related accrued interest receivable of $43.3 million at December 31, 2024.
 2 Amounts include unsecured credit exposure with overnight maturities.
 3 Amounts represent collateralized overnight borrowings.

 Table 33

 Carrying Value1

 Investment Grade
 Unrated
 Total

 Triple-A
 Double-A
 Single-A

 Interest-bearing deposits2

 $
 $
 $
 1,604,336
 $
 —
 $

 Federal funds sold2

 —
 —
 —

 Securities purchased under agreements to resell3

 —
 —
 1,500,000
 2,375,000

 Investment securities:

 —
 —
 —

 —
 —
 —

 —
 —
 —

 Total non-mortgage-backed securities

 3,226,306
 —
 —
 3,262,161

 —
 —
 —

 —
 9,557,161
 —
 —
 9,557,161

 Total mortgage-backed securities
 —
 9,664,696
 —
 —
 9,664,696

 TOTAL INVESTMENTS
 $
 35,942
 $
 12,891,568
 $
 5,184,336
 $
 2,375,000
 $
 20,486,846

 1 Investment amounts represent the carrying value and do not include related accrued interest receivable of $39.9 million at December 31, 2023.
 2 Amounts include unsecured credit exposure with overnight maturities.
 3 Amounts represent collateralized overnight borrowings.

 Table 34 details interest rate payment terms for the carrying value of our investment securities as of December 31, 2024 and 2023 (in thousands). We generally manage the interest rate risk associated with our fixed rate trading and available-for-sale securities by entering into interest rate swaps that convert the investment's fixed rate to a variable rate index (see Tables 43 and 44 under Part I, Item 7A – "Quantitative and Qualitative Disclosures About Market Risk)."

 Table 34

 Trading securities:

 $
 $

 412,977
 609,139

 Variable rate
 9,102
 11,031

 Total trading securities

 Available-for-sale securities:

 3,261,402

 3,261,402

 4,996,621
 3,727,446

 Variable rate
 4,799,596
 5,088,139

 9,796,217
 8,815,585

 Total available-for-sale securities

 Held-to-maturity securities:

 Variable rate

 15,915
 23,650

 Variable rate
 173,016
 205,291

 Total held-to-maturity securities

 TOTAL
 $
 13,717,408
 $
 12,926,857

 Deposits: Total deposits increased 31.5 percent, from $0.8 billion at December 31, 2023 to $1.0 billion at December 31, 2024. Deposit programs are offered primarily to facilitate customer transactions with us, and all deposits are uninsured. Deposit products offered include demand and overnight deposits and short-term certificates of deposit. Deposits are typically in overnight or demand accounts that generally re-price daily based upon a market index such as the overnight Federal funds rate. The level of deposits is driven by member demand for deposit products, which in turn is a function of the liquidity position of members. Factors that influence deposit levels include turnover in member investment and loan portfolios, changes in members' customer deposit balances, changes in members' demand for liquidity, and our deposit pricing as compared to other short-term market rates. Declines in the level of deposits could occur during future periods if the level of member liquidity should decrease due to loan demand outpacing deposit funding growth at members, or if depositor investment options improve as interest rates change. Fluctuations in deposits have little impact on our ability to obtain liquidity. We historically have had stable and ready access to the capital markets through consolidated obligations and have been able to replace any reduction in deposits with similarly or even lower priced borrowings.

 Table 35 presents the average amount of and the annual rate paid on deposit types that exceed 10 percent of average deposits (dollar amounts in thousands).

 Table 35

 2024
 2023
 2022

 Rate
 Rate
 Rate

 Overnight deposits
 $
 431,285
 5.06
 %
 $
 332,442
 4.94
 %
 $
 429,345
 1.29
 %

 Demand deposits
 337,443
 4.71
 306,434
 4.62
 318,282
 1.23

 Consolidated Obligations: Consolidated obligations are the joint and several debt obligations of the FHLBanks and consist of bonds and discount notes. Consolidated obligations represent the primary source of liabilities we use to fund advances, mortgage loans and investments. We use debt with a variety of maturities and option characteristics to manage our interest rate risk profile. For further discussion, see Item 7A – "Quantitative and Qualitative Disclosures About Market Risk." We make extensive use of derivative transactions, executed in conjunction with specific consolidated obligation debt issues, to synthetically structure funding terms and costs.

 Fixed rate bonds are generally used to fund fixed rate advances, mortgage loans and investments. To the extent that bonds are funding variable rate assets, we typically either issue bonds that have variable rates matching the variable rate asset index or utilize an interest rate swap to alter the fixed rate bonds' characteristics to match the assets' index. Additionally, we often use variable rate, fixed rate, or complex consolidated obligation bonds that are swapped or indexed to SOFR or OIS to fund short-term advances and money market investments and/or as a liquidity risk and interest-rate risk management tool.

 Discount notes are primarily used to fund: (1) shorter-term advances or adjustable rate advances with indices and resets based on our short-term cost of funds; and (2) investments with maturities of three months or less. However, we sometimes use discount notes to fund longer-term assets, including fixed rate assets, variable rate assets, assets swapped to synthetically create variable rate assets and short-term anticipated cash flows generated by longer-term fixed rate assets.

 Table 36 presents the carrying value of consolidated obligation bonds and discounts notes as of December 31, 2024 and 2023 (in thousands).

 Table 36

 Bonds:

 Par value
 $
 56,060,550
 $
 49,409,390

 Premiums
 12,044
 12,874

 (3,054)
 (3,108)

 Concession fees
 (12,085)
 (11,424)

 (192,949)
 (360,243)

 Total bonds
 55,864,506
 49,047,489

 Discount Notes:

 Par value
 14,518,446
 20,903,145

 (101,891)
 (157,163)

 Concession fees
 (345)
 (420)

 (2,313)

 Total discount notes
 14,417,047
 20,743,249

 TOTAL
 $
 70,281,553
 $
 69,790,738

 Total consolidated obligations increased $0.5 billion, or 0.7 percent, from December 31, 2023 to December 31, 2024. The distribution between consolidated obligation bonds and discount notes shifted between periods, from 70.3 percent and 29.7 percent, respectively, at December 31, 2023 to 79.5 percent and 20.5 percent at December 31, 2024, respectively. Management increased issuance of floating rate debt due to favorable funding spreads and increased demand from investors. Callable bonds outstanding declined from $22.9 billion at December 31, 2023 to $17.0 billion at December 31, 2024 primarily due to calls or maturities of swapped callable bonds. Callable bonds are typically fixed or structured rate debt that pay higher coupons to investors because of the optionality held by the issuer. When a swap is called by the counterparty in a swapped callable bond transaction, we typically call the hedged bond. Unswapped callable bonds provide us with options to replace the bonds at lower costs if interest rates decline. Our funding mix generally is driven by asset composition, but we may also shift our debt composition as a result of market conditions that impact the cost of unswapped consolidated obligations and the cost of consolidated obligations swapped or indexed to SOFR or OIS. For a discussion on yields and spreads, see Table 8 under this Item 7. For further discussion of how our portfolio of unswapped callable bonds impacted interest rate risk, see Item 7A – "Quantitative and Qualitative Disclosures About Market Risk."

 We often execute derivatives concurrently with the issuance of consolidated obligations to create synthetic variable rate debt at a cost that is lower than funding alternatives and comparable variable rate cash instruments issued directly by us. This alters the characteristics of our liabilities to more closely match the term and/or repricing characteristics of our assets. This strategy of issuing consolidated obligations while simultaneously entering into derivatives enables us to more effectively fund our variable rate and short-term fixed rate assets. It also allows us, in some instances, to offer a wider range of advances at more attractive terms than would otherwise be possible. Swapped consolidated obligation transactions depend on price relationships in both the FHLBank consolidated obligation market and the derivatives market, primarily the interest rate swap market. If conditions in these markets change, we may adjust the types or terms of the consolidated obligations issued and derivatives utilized to better match assets, meet customer needs, and/or improve our funding costs.

 Several recent developments have the potential to impact the demand for FHLBank consolidated obligations in 2025 and perhaps beyond. For a discussion of the impact of these recent developments, U.S. government programs, governmental regulation of commercial banks, and the financial markets on the cost of FHLBank consolidated obligations, see "Financial Market Trends" under this Item 7.

 Derivatives: We use derivatives to reduce the interest-rate sensitivity of our assets. We also use derivatives in our overall interest rate risk management to adjust the interest rate sensitivity of consolidated obligations to approximate more closely the interest rate sensitivity of assets, including advances, investments and mortgage loans. We also use derivatives to manage embedded options in assets and liabilities, to hedge the market value of existing assets, liabilities, and anticipated transactions, to hedge the duration risk of prepayable instruments, to mitigate adverse impacts to earnings from the contraction or extension of certain assets (e.g., advances or mortgage assets) and liabilities, and to reduce funding costs as discussed below. Generally, we designate derivatives as a fair value hedge of an underlying financial instrument or firm commitment. Economic hedges are defined as derivatives hedging specific or non-specific underlying assets, liabilities, or firm commitments that do not qualify for hedge accounting, but are acceptable hedging strategies under our RMP for asset/liability management.

 All derivatives are marked to fair value with any associated accrued interest, and netted by clearing agent by clearinghouse or by counterparty and offset by the fair value of any swap cash collateral received or delivered where the legal right of offset has been determined, and included on the Statements of Condition as an asset when there is a net fair value gain or as a liability when there is a net fair value loss. Fair values of our derivatives primarily fluctuate as the swap interest rate curves fluctuate. Other factors such as implied price/interest rate volatility, the shape of the above interest rate curves and time decay can also drive the market price for derivatives.

 The notional amount of total derivatives outstanding was relatively unchanged between periods, at $51.5 billion at December 31, 2023 and $52.0 billion at December 31, 2024. Notable shifts include decreases in interest rate swaps hedging callable fixed rate bonds, offset by increases in interest rate swaps hedging putable advances, interest rate caps, and basis swaps. The decline in interest rate swaps hedging callable bonds reflects the bond issuance shift discussed previously, and the increase in interest rate swaps hedging putable advances reflects the increase in putable advances discussed previously. Interest rate caps are used to manage duration risk and convexity. The basis swaps are used to manage exposure to the relationships between the indices impacting our cost of funds. For additional information regarding the types of derivative instruments and risks hedged, see Tables 43 and 44 under Item 7A – "Quantitative and Qualitative Disclosures About Market Risk."

 Liquidity and Capital Resources
 We maintain high levels of liquidity to achieve our mission of serving as a dependable and economical funding source for our members and housing associates. As part of fulfilling our mission, we also maintain minimum liquidity requirements in accordance with certain FHFA regulations and guidelines and in accordance with policies established by management and the board of directors. Our structure as a member-owned cooperative and business model enable us to manage the levels of our assets, liabilities, and capital in response to changes in member credit demand, membership composition, and market conditions. As such, assets and liabilities utilized for liquidity purposes can vary significantly in the normal course of business due to the amount and timing of cash flows as a result of these factors.

 Sources and Uses of Liquidity – A primary source of our liquidity is the issuance of consolidated obligations. The capital markets traditionally have treated FHLBank obligations as U.S. government agency debt. As a result, even though the U.S. government does not guarantee FHLBank debt, we generally have comparatively stable access to funding at relatively favorable spreads to U.S. Treasury rates. We are primarily and directly liable for our portion of consolidated obligations (i.e., those obligations issued on our behalf). In addition, we are jointly and severally liable with the other FHLBanks for the payment of principal and interest on the consolidated obligations of all FHLBanks. Our uses of liquidity primarily include repaying called and maturing consolidated obligations for which we are the primary obligor, issuing advances, and purchasing investments and mortgage loans. We also use liquidity to repay member deposits, pledge collateral to derivative counterparties, and redeem or repurchase capital stock. Our other sources of liquidity include our short-term liquidity portfolio, deposit inflows, repayments of advances and mortgage loans, maturing investments, trading and available-for-sale investments, other secured and unsecured borrowings, interest income, or the sale of unencumbered assets.

 During the year ended December 31, 2024, proceeds from the issuance of bonds and discount notes (net of premiums and discounts) were $70.2 billion and $610.5 billion, respectively, compared to $52.2 billion and $481.2 billion for the year ended December 31, 2023. The difference between the proceeds from bonds and discount notes reflects the cumulative effect of using short-term discount notes to fund short-term advances and our short-term liquidity portfolio, and the increase between periods reflects the increase in assets and the composition shift as previously discussed. High demand for Agency debt has kept the spread to U.S. Treasury obligations relatively narrow. Our ability to issue debt remains robust, but volatility in the capital markets can impact the demand for and cost of debt issued by the FHLBanks.

 Our short-term liquidity portfolio consists of cash, short-term investments, and long-term investments with remaining maturities of one year or less. Short-term investments may include Federal funds sold, interest-bearing demand deposits, reverse repurchase agreements, and certificates of deposit. The short-term liquidity portfolio increased between periods, from $8.0 billion as of December 31, 2023 to $11.9 billion as of December 31, 2024. The maturities of our short-term investments are structured to provide periodic cash flows to support our ongoing liquidity needs. To enhance our liquidity position, short-term investment securities (i.e., marketable certificates of deposit) are also classified as trading when held so that they can be readily sold should liquidity be needed immediately.

 Investment securities on our balance sheet are also a source of potential liquidity. U.S. Treasury obligations, GSE debentures, and GSE MBS can be sold or pledged as collateral for financing in the securities repurchase agreement market. In addition to balance sheet sources of liquidity, we have established lines of credit with numerous counterparties in the Federal funds market as well as with the other FHLBanks. We expect to maintain a sufficient level of liquidity for the foreseeable future.

 During the year ended December 31, 2024, advance disbursements totaled $252.8 billion compared to $907.0 billion for the prior year period which reflects the decline in on-balance liquidity needs of members, as previously discussed, and the decrease in short-term advance utilization compared to the prior year period. Periods with high short-term advance utilization typically have more frequent maturity and renewal activity, which results in higher cumulative disbursement and maturity amounts. Investment purchases (excluding overnight investments) totaled $2.5 billion in the year ended December 31, 2024 compared to $4.0 billion for the same period in 2023. Payments on maturing and retired consolidated obligation bonds and discount notes were $63.6 billion and $616.8 billion, respectively, for the year ended December 31, 2024 compared to $44.9 billion and $485.4 billion for the prior year period.

 Capital: Total capital increased $209.1 million, or 5.4 percent, from December 31, 2023 to December 31, 2024 due to an increase in retained earnings in excess of dividends paid and, to a lesser extent, an increase in excess capital stock (see Table 38). We strive to manage our average capital ratio above our minimum regulatory and RMP requirements in an effort to ensure that we have the ability to issue additional consolidated obligations should the need arise. Excess capital capacity ensures we are able to meet the liquidity needs of our members and/or repurchase excess stock either upon the submission of a redemption request by a member or at our discretion for balance sheet or capital management purposes.

 Each member is required to hold capital stock to become and remain a member of FHLBank and enter into specified activities with FHLBank including, but not limited to, access to FHLBank's credit products and selling AMA to FHLBank. The amount of Class A Common Stock a member must acquire and maintain is the Asset-based Stock Purchase Requirement, which is currently equal to 0.1 percent of a member's total assets as of December 31 of the preceding calendar year, with a minimum requirement of $1,000, and a maximum requirement of $500,000. The amount of Class B Common Stock a member must acquire and maintain is the Activity-based Stock Purchase Requirement, which is currently equal to 4.5 percent of the principal amount of advances outstanding to the member plus 3 percent of the principal amount of AMA outstanding for members, limited to a maximum of 3.0 percent of the member's total assets at the end of the prior calendar year, plus 0.25 percent of letters of credit balances outstanding, less the member's Asset-based Stock Purchase Requirement.

 Excess stock represents the amount of stock held by a member in excess of that institution's stock requirement. Upon reducing the Activity-based Stock Purchase Requirement, through a change to the capital plan, or through a reduction of advance, AMA or letters of credit balances, excess stock is created since the member is no longer required under our capital plan to hold the same amount of activity-based capital stock. If our excess stock exceeds one percent of our total assets before or after the payment of a dividend in the form of stock, we would be prohibited by FHFA regulation from paying dividends in the form of stock. To manage the amount of excess stock, we may repurchase excess Class A Common Stock over FHLBank-established limits held by any individual member. Our current practices include periodic mandatory repurchases of excess Class A Common Stock and exchanging all excess Class B Common Stock over $50,000 per member for Class A Common Stock on a daily basis.

 Under our cooperatively structured capital plan, our capital stock balances should fluctuate along with any growth (increased capital stock balances) or reduction (decreased capital stock balances) in advance, AMA and letters of credit balances in future periods. Any repurchase of excess capital stock is at our discretion and subject to statutory and regulatory limitations, including remaining in compliance with all of our regulatory and internal capital requirements after any such discretionary repurchase.

 The increase in retained earnings from December 31, 2023 to December 31, 2024 is attributed to the net income for the year of $432.7 million, exceeding the $226.6 million payment of dividends in 2024. Dividends increased $5.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 as a result of higher dividend rates paid on both Class A Common Stock and Class B Common Stock. The JCE Agreement provides that we allocate at least 20 percent of our net income to a separate RRE Account until the balance of that account equals at least one percent of our average balance of outstanding consolidated obligations calculated as of the last day of each calendar quarter. As of December 31, 2024, our level of restricted retained earnings represented approximately 0.69 percent of average outstanding consolidated obligations. These restricted retained earnings are not available to pay dividends (see the discussion of our JCE Agreement and the amendment to our capital plan see Item 1 – "Capital, Capital Rules and Dividends.")

 Our capital stock is not publicly traded. Members may request that we redeem any capital stock in excess of the stock purchase requirements, but any repurchase of excess capital stock prior to the end of the redemption period is entirely at our discretion. See Item 1 – "Capital, Capital Rules and Dividends". All redemptions (at member request at the end of the redemption period) or repurchases (at our discretion, prior to the end of any applicable redemption period if made at a member's request) are made at the par value of $100 per share. Stock redemption periods are six months for Class A Common Stock and five years for Class B Common Stock, although we can, at our discretion, repurchase amounts over a member's minimum stock purchase requirements at any time prior to the end of the redemption periods as long as we will remain in compliance with our regulatory capital requirements after such repurchase. Ownership of our capital stock is concentrated within the financial services industry, and is stratified across various institutional entities as reflected in Table 37 as of December 31, 2024 and 2023 (dollar amounts in thousands):

 Table 37

 2024
 2023

 Count
 Count

 Commercial banks
 $
 1,273,118
 $
 1,340,879

 Savings institutions
 646,513
 645,656

 Credit unions
 267,123
 272,855

 Insurance companies
 443,491
 346,843

 CDFIs
 1,360
 1,450

 Total GAAP capital stock
 2,631,605
 2,607,683

 Mandatorily redeemable capital stock
 3,225

 TOTAL REGULATORY CAPITAL STOCK
 $
 2,634,830
 $
 2,607,930

 Our activity-based stock purchase requirements are consistent with our cooperative structure; members' stock ownership requirements and the dollar amount of dividends paid to members generally increase as their activities with us increase. To the extent that a member's asset-based stock purchase requirement is insufficient to cover the member's activity-based stock purchase requirement, the member is required to purchase Class B Common Stock. We believe the value of our products and services is enhanced by dividend yields. Factors that affect members' willingness to enter into activity with us and purchase additional required activity-based stock include, but are not limited to, our dividend rates, the risk-based capital weighting of our capital stock, and alternative investment or borrowing opportunities available to our members.

 Table 38 provides a summary of member capital requirements under our current capital plan as of December 31, 2024 and 2023 (in thousands):

 Table 38

 Requirement

 Asset-based (Class A Common Stock only)
 $
 187,495
 $
 184,901

 Activity-based (additional Class B Common Stock)1

 2,030,000
 2,182,176

 Total Required Stock2

 2,217,495
 2,367,077

 Excess Stock (Class A and B Common Stock)
 417,335
 240,853

 Total Regulatory Capital Stock2

 $
 2,634,830
 $
 2,607,930

 Activity-based Requirements:

 Advances3

 $
 1,879,698
 $
 2,050,911

 Letters of credit
 18,857
 18,122

 AMA assets (mortgage loans)4

 265,301
 247,490

 Total Activity-based Requirement
 2,163,856
 2,316,523

 Asset-based Requirement (Class A Common Stock) not supporting member activity1

 53,639
 50,554

 Total Required Stock2

 $
 2,217,495
 $
 2,367,077

 1 Class A Common Stock, up to a member's asset-based stock requirement, will be used to satisfy a member's activity-based stock requirement before any Class B Common Stock is purchased by the member.
 2 Includes mandatorily redeemable capital stock.
 3 Advances to housing associates have no activity-based requirements because housing associates cannot own FHLBank stock.
 4 Non-members previously required to purchase AMA activity-based stock are subject to the stock requirement in place at the time their membership ended as long as there are unpaid principal balances outstanding.

 We are subject to various capital requirements under provisions of the GLB Act, the FHFA's capital structure regulation and our RMP. See Item 1 – "Capital, Capital Rules and Dividends" for details on the various capital requirements. We have been in compliance with each of the capital rules and requirements at all times, as applicable, since the implementation of our capital plan. See Note 11 of the Notes to Financial Statements under Item 8 for additional information and compliance as of December 31, 2024 and 2023.

 Capital Distributions: Dividends may be paid in cash or capital stock as authorized by our board of directors. Quarterly dividends can be paid out of current and previous unrestricted retained earnings, subject to FHFA regulation and our capital plan.

 Dividends paid to members totaled $226.6 million for the year ended December 31, 2024 compared to $221.6 million for the same period in the prior year. The weighted average dividend rate for the year ended December 31, 2024 was 8.82 percent which represented a dividend payout ratio of 52.4 percent compared to a weighted average dividend rate of 8.47 percent and a payout ratio of 59.8 percent for the year ended December 31, 2023. The dividend payout ratio represents dividends declared and paid during a period as a percentage of net income for the period, although FHFA regulation requires dividends be paid out of known income prior to the declaration date. For example, dividends declared and paid in December 2024 were based on income during the three months ended November 30, 2024. (See Part I, Item 1 – "Capital, Capital Rules and Dividends" for other factors that contribute to the level of dividends paid.)

 In accordance with our capital plan, we must pay holders of Class A Common Stock the dividend parity threshold (DPT) rate before paying a higher rate to holders of Class B Common Stock. The DPT is a dividend rate expressed as a percentage per annum up to which the dividends paid per share on Class A Common Stock and Class B Common Stock must be equal. When the overnight Federal funds effective rate is below 2.00 percent, the DPT is zero for that dividend period (DPT is floored at zero). Table 39 presents the dividend rates per annum paid on capital stock under our capital plan for the quarterly periods listed below:

 Table 39

 Applicable Rate per Annum
 09/30/2024
 06/30/2024
 03/31/2024

 Class A Common Stock
 4.75
 %
 4.75
 %
 4.75
 %
 4.75
 %

 Class B Common Stock
 9.50
 9.50
 9.50
 9.50

 Weighted Average1

 8.84
 8.90
 8.79
 8.76

 Dividend Parity Threshold:

 Average effective overnight Federal funds rate
 4.66
 %
 5.27
 %
 5.33
 %
 5.33
 %

 Spread to index

 TOTAL (floored at zero percent)
 2.66
 %
 3.27
 %
 3.33
 %
 3.33
 %

 1 Weighted average dividend rates are dividends paid in cash and stock on both classes of stock divided by the average of capital stock eligible for dividends.

 Table 40 presents the dividend rates per annum paid on capital stock under our capital plan for the quarterly periods of 2023:

 Table 40

 Applicable Rate per Annum
 09/30/2023
 06/30/2023
 03/31/2023

 Class A Common Stock
 4.75
 %
 4.50
 %
 4.00
 %
 3.75
 %

 Class B Common Stock

 9.50
 9.25
 9.00
 8.75

 Weighted Average1

 8.84
 8.62
 8.31
 8.12

 Dividend Parity Threshold:

 Average effective overnight Federal funds rate
 5.33
 %
 5.26
 %
 4.99
 %
 4.52
 %

 Spread to index
 (1.00)

 TOTAL (floored at zero percent)
 3.33
 %
 3.26
 %
 2.99
 %
 3.52
 %

 1 Weighted average dividend rates are dividends paid in cash and stock on both classes of stock divided by the average of capital stock eligible for dividends.

 Historically, dividend rates have moved directionally with short-term interest rates. Market conditions and movements in short-term interest rates can be unpredictable, and adverse market conditions may result in lower dividend rates in future quarters. If there is a change to the DPT in the future, the capital plan requires that we provide members notice of that change 90 days prior to a dividend payment.

 Under the capital plan, all dividends paid in the form of capital stock must be paid in the form of Class B Common Stock. We expect to continue paying dividends primarily in the form of capital stock, but future dividends may be paid in cash. The payment of cash dividends instead of stock dividends should not have a significant impact from a liquidity perspective, as the subsequent redemption of excess stock created by stock dividends would utilize liquidity resources in the same manner as a cash dividend. FHFA regulation prohibits any FHLBank from paying a stock dividend if excess stock outstanding will exceed one percent of its total assets after payment of the stock dividend.

 Off-Balance Sheet Arrangements: In the ordinary course of business, we engage in financial transactions that, in accordance with GAAP, are not recorded on the Statements of Condition or may be recorded on the Statements of Condition in amounts that are different from the full contract or notional amount of the transactions. For more information on our off-balance sheet arrangements, see Note 15 of the Notes to Financial Statements under Item 8 – "Financial Statements and Supplementary Data."

 Risk Management
 Active risk management continues to be an essential part of our operations and a key determinant of our ability to: (1) provide liquidity to our members at reasonable costs to them; (2) maintain the par value of members' capital stock; (3) repurchase or redeem members' capital stock; and (4) maintain earnings to return an acceptable dividend to our members and meet retained earnings thresholds. Proper identification, assessment and management of risks, complemented by adequate internal controls, enable our stakeholders to have confidence in our ability to meet our housing finance mission, serve our stockholders, earn a profit, compete in the industry, and sustain and prosper over the long term. We maintain comprehensive risk management processes to facilitate, control and monitor risk taking. Periodic reviews by internal and external auditors, FHFA examiners and independent consultants subject our practices to additional scrutiny, further strengthening the process.

 We maintain an ERM program in an effort to enable the identification of all inherent significant risks to the organization and institute the prompt and effective management of any major risk exposures. Under this program, we perform annual risk assessments designed to identify and evaluate all material risks that could adversely affect the achievement of our performance objectives and compliance requirements. ERM is a process, effected by our board of directors, management and other personnel, applied in strategy setting and across FHLBank. It is designed to: (1) identify and evaluate potential risks or events that may affect FHLBank; (2) manage these risks to desired residual risk levels consistent with our Risk Appetite Statement; and (3) provide reasonable assurance regarding the achievement of FHLBank's strategic, operations, reporting and compliance objectives. Our ERM program is a structured and disciplined approach that aligns strategy, processes, people, technology and knowledge with the purpose of identifying, evaluating and managing the uncertainties we face as we create value. It is a continuous process of identifying, prioritizing, assessing and managing inherent enterprise risks (i.e., business, compliance, credit, liquidity, market and operations) before they become realized risk events.

 Our Risk Philosophy Statement, approved by our board of directors, establishes the broad parameters we consider in executing our business strategy and represents a set of shared attitudes and beliefs that characterize how we consider risk in everything we do. Our Risk Appetite Statement, also approved by our board of directors, defines the level of risk exposure we are willing to accept or retain in pursuit of stakeholder value. We accept a measured and managed amount of market risk while seeking to manage our risk exposure to business, compliance, credit, liquidity and operations risk to a low residual risk level. While we consider our risk appetite first in evaluating strategic alternatives, defining and managing to a specific risk appetite does not ensure we will not incur greater than expected losses or be faced with an unexpected, catastrophic loss. By defining and managing to a specific risk appetite, our board of directors and senior management strive to ensure that there is a common understanding of our desired risk profile, which enhances the ability of both to make improved strategic and tactical decisions. Our monthly Risk Dashboard provides a holistic view of our risk profile and the means for reporting our key risk metrics as defined within our Risk Appetite Metrics document, which is also approved by our board of directors. The Risk Dashboard is intended to demonstrate, at an entity level, whether our enterprise risks are well controlled and normal operations are expected with standard board of directors' involvement.

 As part of our ERM program, entity-level risk assessment workshops are conducted with our management committees to identify and reach a general consensus on the primary risks that must be managed to help ensure achievement of our strategic objectives and allow for future success for the organization. By using this type of top-down assessment, we seek to: (1) gain an understanding of our current risk universe; (2) obtain management's input on new and/or increasing areas of exposure; (3) determine the impact our primary risks might have on achieving our strategic business plan objectives; (4) discuss and validate our current risk management approach; (5) identify other risk management strategies that might be implemented to better ensure alignment with our desired residual risk profile; and (6) prioritize the allocation of resources to address those areas where current risk management strategies may be falling short relative to the overall level of perceived residual risk. The results of these activities, including any risk strategies and action plans for enhancing risk management practices, are summarized in an annual risk assessment report, which is reviewed by the SRMC and approved by the board of directors.

 Business units also play key roles in our risk management program. We utilize a customized business unit risk assessment approach to ensure that: (1) risk assessments are completed annually for all of our business units; (2) effective internal controls and strategies are in place for managing the identified risks within the key processes throughout FHLBank; and (3) risk management or internal control weaknesses are properly identified with necessary corrective actions taken. The results of all risk assessments are reviewed by senior management and presented to the Risk Oversight Committee of the board of directors on a scheduled basis to keep our board of directors apprised of any weaknesses in the current risk management process of each business unit and the steps undertaken by management to address any identified weaknesses.

 Effective risk management programs include not only conformance to risk management best practices by management but also incorporate board of director oversight. As previously noted, our board of directors plays an active role in the ERM process by regularly reviewing risk management policies and approving aggregate levels of risk. Involvement by the board of directors in establishing risk tolerance levels, including oversight of the development and maintenance of programs to manage it, is substantial and reflects a high level of director fiduciary responsibility and accountability. In addition to establishing the formal Risk Philosophy Statement, Risk Appetite Statement, Risk Appetite Metrics and reviewing the annual and business unit risk assessment results, our board of directors reviews both the RMP and Member Products Policy at least annually. Various management committees, including the Executive Team, the SRMC, the Asset/Liability Committee, the Credit Underwriting Committee, the Market Risk Analysis Committee, the ORC, the Disclosure Committee, the Technology Committee, and the Model Risk Management Committee, oversee our risk management process. The following discussion highlights our different strategies to diversify and manage risk. For a separate discussion of market risk, see Item 7A – "Quantitative and Qualitative Disclosures About Market Risk".

 Interest Rate Risk Management: Interest rate risk is the risk that relative and absolute changes in interest rates may adversely affect an institution's financial condition and performance. The goal of an interest rate risk management strategy is not necessarily to eliminate interest rate risk, but to manage it by setting, and operating within, an appropriate framework and limits. We generally manage interest rate risk by acquiring and maintaining a portfolio of assets and liabilities and entering into related derivative transactions to limit the expected mismatches in duration and market value of equity (MVE) sensitivity. For additional information on interest rate risk measurement, see Part I, Item 7A - "Quantitative and Qualitative Disclosures About Market Risk."

 Credit Risk Management: Credit risk is defined as the potential that a borrower or counterparty will fail to meet its financial obligations in accordance with agreed terms. We manage credit risk by following established policies, evaluating the creditworthiness of our counterparties, and utilizing collateral agreements and settlement netting for derivative transactions where enforceability of the legal right of offset has been determined. The most important step in the management of credit risk is the initial decision to extend credit. Continuous monitoring of counterparties is completed for all areas where we are exposed to credit risk, whether that is through lending, investing or derivative activities.

 Lending and AMA Activities – Credit risk with members arises largely as a result of our lending and AMA activities, which includes members' CE obligations on conventional mortgage loans that we acquire through the MPF Program. We manage our exposure to credit risk on advances, letters of credit, and members' CE obligations on conventional mortgage loans through a combined approach that provides ongoing review of the financial condition of our members coupled with credit enhancement sufficiency analysis, investment grade determination, and prudent collateralization.

 At the time an advance is originated, we are required to obtain and then to maintain a security interest in sufficient collateral of the borrower, which is eligible in one or more of the following categories:
 Fully disbursed, whole first mortgages on 1-4 family residential property or securities representing a whole interest in such mortgages;
 Securities issued and guaranteed or insured by the U.S. government, U.S. government agencies and mortgage GSEs including, without limitation, MBS issued or guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae;
 Cash or deposits;
 Other acceptable real estate-related collateral, which includes privately issued collateralized mortgage obligations (CMOs), mortgages on multifamily residential real property, second mortgages on 1-4 family residential property, and mortgages on commercial real estate; or
 In the case of any CFI, secured loans to small business, small farm and small agri business or securities representing a whole interest in such secured loans.

 For collateral to be eligible for acceptance, we must be able to determine that the collateral has a readily ascertainable market value, can be reliably discounted to account for liquidation and other risks, and is able to be liquidated in due course.

 The Bank Act affords any security interest granted to us by any of our members, or any affiliate of any such member, priority over the claims and rights of any party, including any receiver, conservator, trustee, or similar party that has rights of a lien creditor. The only exceptions are claims and rights held by actual bona fide purchasers for value or by parties that are secured by actual perfected security interests, and provided that such claims and rights would otherwise be entitled to priority under applicable law. In addition, our claims are given certain preferences pursuant to the receivership provisions in the Federal Deposit Insurance Act. Most members provide us a blanket lien covering substantially all of the member's assets and their consent for us to file a financing statement evidencing the blanket lien. Based on the blanket lien, the financing statement and the statutory preferences, we normally do not take control of collateral, other than securities collateral, pledged by blanket lien borrowers. We take control of all securities collateral through delivery of the securities to us or to an approved third-party custodian. With respect to non-blanket lien borrowers (typically insurance companies, CDFIs, and housing associates), and given the interaction with certain state insurance laws with the Bank Act, we take control of all pledged collateral. If the financial condition of a blanket lien member warrants such action because of the deterioration of the member's financial condition, regulatory concerns about the member or other factors, we will take control of sufficient collateral intended to fully collateralize the member's indebtedness to us.

 Since the FHLBank System was established in 1932, the U.S. has experienced a wide range of economic conditions, including periods of depression, recession, and expansion, but no degree of economic downturn has ever resulted in a credit loss on an advance. Even during the most recent financial crisis, which resulted in the failure of a number of member financial institutions, there were no credit losses on advances. In addition, the FHLBanks have never accepted collateral in satisfaction of an advance, but rather have been paid in full by an institution that assumes the advance, the FDIC, or some other receiver.

 As also provided in the Bank Act, a member's investment in our capital stock is held as additional collateral for the member's advances and other credit obligations (letters of credit, CE obligations, etc.). In addition, we can call for additional collateral or substitute collateral during the life of an advance or other credit obligation to protect our security interest.

 Credit risk arising from AMA activities under our MPF Program falls into three categories: (1) the risk of credit losses on the mortgage loans represented in our FLA and last loss positions; (2) the risk that a PFI will not perform as promised with respect to its loss position provided through its CE obligations on conventional mortgage loan pools, which are covered by the same collateral arrangements as those described for advances; and (3) the risk that a third-party insurer (obligated under PMI or SMI arrangements) will fail to perform as expected. Should a PMI third-party insurer fail to perform, it would increase our credit risk exposure because our FLA is the next layer to absorb credit losses on conventional mortgage loan pools. Likewise, if an SMI third-party insurer fails to perform, it would increase our credit risk exposure because it would reduce the participating member's CE obligation loss layer since SMI is purchased by PFIs to cover all or a portion of their CE obligation exposure for mortgage pools under certain MPF Program products. Credit risk exposure to third-party insurers to which we have PMI and/or SMI exposure is monitored on an ongoing basis and regularly reported to the board of directors. In addition, we perform a credit analysis of third-party PMI and SMI insurers. On an ongoing basis, we review trends that could identify changing risks within our mortgage loan portfolio for macro- and micro-economic environment-related issues, including adverse changes in credit characteristics (loan purpose, low FICO scores, high debt-to-income ratios, high LTV ratios, etc.) and/or various types of concentrations (geographic, high-balance loans, third-party originated, etc.). Based on the credit underwriting standards under the MPF Program and this ongoing review, we have concluded that the mortgage loans we hold would not be considered subprime.

 Investments – Our RMP restricts the acquisition of investments to high-quality, short-term money market instruments and highly rated long-term securities. The short-term investment portfolio represents unsecured credit and reverse repurchase agreements. Counterparty ratings are monitored daily while performance and capital adequacy are monitored on a monthly basis in an effort to mitigate unsecured credit risk on our short-term investments. Collateral eligibility and transaction margin requirements on our reverse repurchase agreements are monitored daily. U.S. Treasury obligations and MBS securitized by Fannie Mae or Freddie Mac represent the majority of our long-term investments. Other long-term investments include MBS issued by Ginnie Mae, unsecured GSE debentures and collateralized state and local HFA securities.

 Derivatives – We transact most of our derivatives with large banks and major broker-dealers. OTC derivative transactions may be either executed with a counterparty (uncleared derivatives) or with an executing broker and cleared through a Futures Commission Merchant (i.e., clearing agent) that acts on our behalf to clear and settle derivative transactions through a clearinghouse (cleared derivatives).

 We are subject to credit risk due to the risk of nonperformance by counterparties to our derivative transactions. 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 this risk through credit analysis and collateral management. We are also required to follow the requirements set forth by applicable regulation.

 Uncleared Derivatives. We are subject to non-performance by the counterparties to our uncleared derivative transactions. All bilateral security agreements with our non-member counterparties include bilateral collateral exchange provisions that require all credit exposures be collateralized, subject to a minimum transfer amount. As a result of these risk mitigation practices, we do not anticipate any credit losses on our uncleared derivative transactions as of December 31, 2024.

 Cleared Derivatives. We are subject to nonperformance by the clearinghouse(s) and clearing agent(s). The requirement that we post initial and variation margin, through the clearing agent, to the clearinghouse, exposes us 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 or payments are posted daily for changes in the value of cleared derivatives through a clearing agent. We do not anticipate any credit losses on our cleared derivatives as of December 31, 2024.

 We regularly monitor the exposures on our derivative transactions by determining the market value of positions using internal pricing models. The market values generated by the pricing model used to value derivatives are compared to dealer model results on a monthly basis to ensure that our derivative pricing model is reasonably calibrated to actual market pricing methodologies utilized by the dealers. In addition, we have our internal pricing model validated regularly by an independent consultant. As a result of these risk mitigation initiatives, management does not anticipate any credit losses on our derivative transactions. For additional information on managing credit risk on derivatives, see Note 6 of the Notes to Financial Statements under Item 8.

 The contractual or notional amount of derivative transactions reflects our involvement in the various classes of financial instruments. The maximum credit risk with respect to derivative transactions is the estimated cost of replacing the derivative transactions if there are defaults, minus the value of any related collateral posted to satisfy the initial margin (if required). Our derivative transactions are subject to variation margin which is derived from the change in market value of the transaction and must be posted by the net debtor on demand. Cleared transactions are subject to initial margin as well as variation margin. The initial margin is intended to protect the clearinghouse against default of a customer. Initial margin is calculated to cover the potential price volatility of the derivative transaction between the time of the default and the assignment of the transaction to another clearing agent or termination of the transaction. Although the initial margin requirement should decrease over time as the duration and market volatility decrease, it remains outstanding for the life of the transaction; thus, it is possible that we could either have: (1) net credit exposure with a clearinghouse even if our net creditor position has been fully satisfied by the receipt of variation margin; or (2) net credit exposure with a clearinghouse despite being the net debtor (i.e., being in a liability position). In determining maximum credit risk, we consider accrued interest receivables and payables as well as the netting requirements to net assets and liabilities.

 Liquidity Risk Management: Maintaining the ability to meet our obligations as they come due and to meet the credit needs of our members and housing associates in a timely and cost-efficient manner is the primary objective of managing liquidity risk. We seek to be in a position to meet the credit needs of our members, as well as our debt service and liquidity needs, without maintaining excessive holdings of low-yielding liquid investments or being forced to incur unnecessarily high borrowing costs.

 We maintain daily liquidity levels above certain thresholds and consider hypothetical adverse scenarios. These thresholds are outlined in our internal policies and comply with federal statutes, FHFA regulations and other FHFA guidance not issued in the form of regulations. We remained in compliance with liquidity regulatory requirements throughout 2024.

 FHFA regulations require us to always have at least an amount equal to our current deposits received from our members invested in obligations of the United States, deposits in eligible banks or trust companies, or advances with remaining maturities not exceeding five years. We were in compliance with these regulations at all times during the year ended December 31, 2024.

 We generally maintained stable access to the capital markets throughout 2024. A Contingency Funding Plan allows us to maintain sufficient liquidity in the event of operational disruptions at FHLBank, the Office of Finance, or in the capital markets. For additional discussion of the market for our consolidated obligations and the overall market affecting liquidity see "Financial Market Trends" under this Item 7.

 An entity's liquidity position is vulnerable to any rating, event, performance or ratio trigger (collectively called triggers) that would lead to the termination of the entity's credit availability or the acceleration of repayment of credit obligations owed by the entity. We have reviewed documents concerning our vulnerability to transactions that contain triggers to gain an understanding of the manner in which risks can arise from such triggers. Triggers adverse to us currently exist in agreements for uncleared derivative transactions and SBPAs. Our staff monitors triggers to properly manage any type of potential risks from triggers. For additional information regarding our credit exposure relating to derivative contracts, see Note 6 of the Notes to Financial Statements under Item 8 – "Financial Statements and Supplementary Data."

 With respect to advances, letters of credit, and SBPAs, credit practices are impacted by certain triggers based on the member's or housing associate's financial performance (or the ratings of bonds underlying SBPAs) as defined in detail in our policies and/or the appropriate agreements. For collateral requirements designed for our credit products, see Notes 1, 4 and 15 in Item 8 – "Financial Statements and Supplementary Data – Notes to Financial Statements."

 We have executed SBPAs with multiple state housing finance authorities. All of the SBPAs contain rating triggers beneficial to us providing that if the housing finance authority bonds covered by the SBPA are rated below investment grade (triple-B), we would not be obligated to purchase the bonds even though we were otherwise required to do so under the terms of the SBPA contract. In addition, some transactions also contain a provision that allows us to terminate our obligation to purchase these bonds under the SBPA upon 30 days prior written notice if the long-term rating on the underlying bonds were to be withdrawn, suspended or reduced below single-A. As of December 31, 2024 and 2023, we were a party to, or participated in, 36 SBPAs with principal commitments of $1.0 billion for both periods. We were not required to purchase any bonds under any agreements during the year ended December 31, 2024 or 2023.

 Business Risk Management: Business risk is the risk of an adverse impact on our profitability resulting from external factors that may occur in both the short and long run. We manage business risk, in part, through a commitment to strategic planning and by having a strategic business plan in effect at all times that describes how the business activities will achieve our mission and also details the operating goals and strategic objectives for each major business activity. The Strategic Business Plan is intended to make transparent our strategic plans as well as the strategic planning process that helps formulate that plan. The Strategic Business Plan is augmented from time-to-time, at least annually, with appropriate research and analysis. The Strategic Business Plan provides a mechanism for management and the board of directors to be fully engaged in fulfilling their responsibilities for establishing our long-term strategic direction. Directors' knowledge of the external environment through their positions with member institutions in the financial services industry as well as a variety of other professions provides a strong experience base to complement the capabilities and competencies of management. Full development of the Strategic Business Plan, including tactical strategies and implementation, is delegated to management. We use planning scenarios to develop the Strategic Business Plan and we continue to refine and enhance the scenario planning process each year. We believe this process results in the development of robust and effective future scenarios, thereby enhancing the overall effectiveness of our strategic planning process and the development of risk strategies for each scenario. The board of directors plays a key role in the development of the Strategic Business Plan and regularly monitors progress in the achievement of business objectives. Two board of directors' meetings are set aside each year for strategic planning purposes.

 To manage business and strategic risk, earnings simulations are conducted annually with estimated base-, best- and worst-case scenarios. These earnings simulations are based upon a set of assumptions developed for each of the three scenarios that consider factors such as: (1) the effects of changes in interest rates and spreads; (2) the balances of advances, mortgage loans, and investments; (3) operating expenses; and (4) dividends. The worst-case scenario assumptions typically include a pessimistic interest rate assumption, an overall decline in advance balances of approximately 20 percent due to either a declining economy, the loss of a large borrowing member due to merger or acquisition, or changes in mortgage flow as a result of a declining economy. We monitor key indicators tied to the various scenario assumptions and provide a monthly report to the Executive Committee and the board of directors. This key indicator report includes advance balance monitoring for our largest eight members and our overall membership. See Table 21 under this Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Advances" for advance concentration to the top five borrowers.

 Business risk also includes political, reputation, and regulatory risk. Congress occasionally considers legislation that could have an impact on the housing GSEs, including the FHLBanks. Legislation has the power to impact our cost of funds and our cost of doing business. It could also limit or expand existing authorities or change the competitive balance among the FHLBanks and other housing GSEs. Consequently, we seek to: (1) positively influence legislative outcomes; (2) support, oppose, or comment on regulatory proposals; and (3) continually educate all stakeholders about our positive impact on the communities we serve. To manage these types of business risks, we maintain a Director of Government and Industry Relations position and work with lobbying firms in Washington, D.C. Additionally, we, along with the other 10 FHLBanks, partner with our Washington, D.C.-based trade association, the Council of FHLBanks, to ensure that the FHLBank System's common legislative and regulatory interests are served. More specifically, we promote the enactment of laws and regulations that are beneficial to FHLBank Topeka and our members, and we oppose detrimental laws and regulations. We also work to enhance awareness and understanding of the FHLBanks among Washington leaders, including members of Congress and their staff, Executive departments, regulators, trade associations, and the financial media.

 For additional discussions of general business risk, legislative and regulatory business risk and strategic business risk, see Item 1A – "Risk Factors."

 Joint and Several Liability - Although we are primarily liable for our portion of consolidated obligations (i.e., those issued on our behalf), we are also jointly and severally liable with the other FHLBanks for the payment of principal and interest on consolidated obligations of all the FHLBanks. For additional information regarding FHLBank's joint and several liability, see Item 1 – "Business – Debt Financing – Consolidated Obligations" and Note 8 of the Notes to Financial Statements under Item 8.

 Operations Risk Management: Operations risk is defined as the risk of loss resulting from inadequate or failed internal processes, people, or systems, or from external events. This category of risk is inherent in our daily business activities and involves people, information technology (IT) systems, processes, and external events (including fraud, security incidents, and business disruptions). A number of strategies are used to manage and mitigate operations risk, including systems and procedures to monitor transactions and financial positions, segregation of duties, documentation of transactions, secondary reviews, comprehensive risk assessments conducted at the entity and business unit level, and periodic reviews by our Internal Audit department. The ORC serves as the primary venue for overseeing all of our operations risk management initiatives and activities.

 Human Error and Circumvention or Failure of Internal Controls and Procedures - Employees play a vital role in implementing our risk management practices and strategies. We look to recruit, develop, promote, and retain high-quality employees by offering a fair and competitive compensation package and by providing a comfortable, secure and professional work environment in a cost-effective manner. To ensure our employees understand the importance of establishing and maintaining an effective internal control system, we maintain an Internal Control Policy which, in addition to defining internal control and describing the five interrelated components and underlying principles of FHLBank's internal control framework, outlines the objectives for our internal controls, establishes and delineates management's responsibilities for implementing and maintaining internal controls, and establishes the Internal Audit department as the business unit responsible for reviewing the adequacy of our internal controls. We have established and maintain an effective internal control system, guided by the Internal Control Policy, that addresses: (1) the establishment of strategies aligned with our mission and vision; (2) the efficiency and effectiveness of our activities; (3) the safeguarding of our assets: (4) the reliability, completeness and timely reporting of financial and management information (and the transparency of that information) to the board of directors and outside parties, including the Office of Finance, the SEC and the FHFA; and (5) compliance with applicable laws, regulations, policies, supervisory determinations and directives. The annual business unit risk assessment program serves to reinforce our focus on maintaining strong internal controls by identifying significant inherent risks and the internal controls and strategies used to mitigate those risks to acceptable residual risk levels. The business unit risk assessment program provides management and the board of directors with a thorough understanding of our risk management and internal control structure.

 Systems Malfunctions and Security Threats - We rely heavily on IT systems and other technology to conduct our business. To manage operations risk as it relates to IT systems, we devote significant management attention and resources to technology. Our Technology Committee assists executive management in overseeing the development and implementation of significant technology strategies. The Technology Committee is also charged with providing strategic oversight of all technology-related activities, monitoring the strategic alignment and synchronization of IT services with our Strategic Business Plan (and our immediate and long-term goals and objectives), reviewing the operational health of IT systems, and reviewing new or anticipated projects related to our strategic initiatives. Protection of our information assets is also necessary to establish and maintain trust between us and our customers, maintain compliance with applicable laws and regulations, and protect our reputation. Consequently, we maintain an enterprise-wide security program. The goal of our enterprise security program is to maintain a security framework such that: (1) physical and information assets are protected from unauthorized access, modification, disclosure and destruction; (2) integrity and confidentiality of information is maintained; (3) physical and information assets and information systems are available when needed; and (4) cybersecurity threats or other information security risks are identified, monitored, and addressed through our enterprise information security program. For additional information on cybersecurity and cybersecurity threats, see Item 1C – "Cybersecurity."

 Man-made or Natural Disasters - We manage the risk of business disruption and systems failure due to man-made or natural disasters by having in place at all times a business resiliency plan, the purpose of which is to provide contingency plans for situations where operations cannot be carried out in their normal manner. We maintain an alternate data center that is geographically located far enough from our primary data center to reduce the possibility of both data centers being impacted by the same event. We also maintain an off-site business resumption center which includes computer equipment, office space, supplies, and other resources to allow our employees to resume operations if our headquarters is inaccessible. Our on-site power generators support both the alternate data center and business resumption center in case of total power failure. Business partners may also resume operations by working remotely in situations where our headquarters is inaccessible. Comprehensive business resiliency exercises utilizing the alternate data center and business resumption center are conducted routinely and vary in scope and duration to simulate various types of disruptions. The disaster recovery plans are reviewed and updated annually. We also have a reciprocal back-up agreement in place with FHLBank Boston to provide short-term advances to our members on our behalf in the event that our facilities are inoperable. In the event that FHLBank Boston's facilities are inoperable, we have agreed to provide short-term liquidity advances to FHLBank Boston's members. We complete an annual test of this agreement with FHLBank Boston to ensure the process and related systems are functioning properly. We also maintain a funds transfer contingency agreement with FHLBank Boston that is tested annually, which authorizes either FHLBank Topeka or FHLBank Boston to process wire transfers for the other during a contingency situation.

 Internal or External Fraud - Our Anti-Fraud Policy, which includes our Whistleblower Procedures, along with our Anti-Money Laundering Policy, forms the foundation of our Fraud Awareness Program. Our Fraud Awareness Program establishes our methodology or framework for preventing, detecting, deterring, reporting, remediating, and punishing suspicious activities, money laundering activities, dishonest activities, violations of the Code of Ethics and other fraudulent activities that could create risks for us or undermine the public's confidence in the integrity of our activities. Employees may submit good faith complaints or concerns regarding accounting or auditing matters, fraud concerns, potential wrongdoing or violations of applicable securities laws and regulations, or violations of the Commodity Exchange Act and relevant implementing regulations to management or our anonymous reporting service without fear of dismissal or retaliation of any kind. We are committed to achieving compliance with all applicable securities laws and regulations, the Commodity Exchange Act and relevant implementing regulations, accounting standards, accounting controls and audit practices. Decisions to prosecute or refer fraud investigation results to the appropriate law enforcement or regulatory agencies for independent investigation shall be made in conjunction with legal counsel and appropriate senior management, as will final decisions on disposition of the case.

 Recently Issued Accounting Standards
 For a discussion of recently issued accounting standards, see Note 2 of the Notes to Financial Statements under Item 8 – "Financial Statements and Supplementary Data".

 Item 7A: Quantitative and Qualitative Disclosures About Market Risk

 Market risk is the risk that changes in market value may adversely affect our financial condition and performance. Interest rate risk is a component of market risk and represents our most significant market risk exposure. Interest rate risk is the risk that the market value of our asset, liability, and derivative portfolios will be negatively impacted by interest rate volatility or that earnings will be affected significantly by interest rate changes. We manage interest rate risk through the characteristics of our portfolio of assets and liabilities and by using derivative transactions to limit duration mismatches and reduce MVE sensitivity. Matching the duration of assets with the duration of liabilities funding those assets is accomplished through the use of different debt maturities and embedded option characteristics, as well as the use of derivatives, primarily interest rate swaps, interest rate caps, and interest rate floors. Interest rate swaps increase the flexibility of our funding alternatives by providing cash flows or characteristics that might not be as readily available or cost-effective if obtained in the standard GSE debt market.

 Duration of Equity: Durations of equity (DOE) aggregates the estimated sensitivity of market value for each of our financial assets and liabilities to changes in interest rates. A positive DOE results when the duration of assets and designated derivatives is greater than the duration of liabilities and designated derivatives, indicating a degree of interest rate risk exposure in a rising interest rate environment. A negative DOE results in the opposite scenario, indicating a degree of interest rate risk exposure in a declining interest rate environment. Higher DOE numbers, whether positive or negative, indicate greater volatility of market value in response to changing interest rates. A decline in market value does not necessarily translate directly into a decline in income, especially for entities that do not trade financial instruments. Changes in market value may indicate trends in income over longer periods, and knowing the sensitivity of our market value to changes in interest rates provides a measure of the interest rate risk we take.

 Under the RMP, our base case DOE is generally limited to a range of 5.0 assuming current interest rates. In addition, our DOE is generally limited to a range of 7.0 assuming an instantaneous parallel increase or decrease in interest rates of 200 basis points. During periods of extremely low interest rates, the FHFA requires that the FHLBanks employ a constrained down shock analysis to limit the evolution of forward interest rates to positive non-zero values. Since our market risk model imposes a positive non-zero boundary on post-shock interest rates, no additional calculations are necessary to meet this FHFA requirement when applicable. When DOE exceeds the limits established by the RMP, corrective actions taken may include: (1) the purchase of interest rate caps, interest rate floors, or other derivatives; (2) the sale of assets; or (3) the addition to the balance sheet of assets or liabilities having characteristics that are such that they counterbalance the excessive duration observed.

 Table 41 presents our DOE in the base and the up and down 200 basis point interest rate shock scenarios:

 Table 41
 Duration of Equity

 Date
 Up 200 Basis Points
 Base
 Down 200 Basis Points

 2.0
 1.9
 0.7

 09/30/2024
 2.7
 2.5
 1.5

 06/30/2024
 2.7
 2.4
 1.5

 03/31/2024
 3.3
 2.3
 1.3

 3.3
 2.1
 1.2

 09/30/2023
 3.2
 2.2
 1.9

 06/30/2023
 2.3
 1.6
 2.0

 03/31/2023
 1.8
 1.8
 2.4

 The primary factors contributing to the net changes in duration from December 31, 2023 to December 31, 2024 were: (1) the relative change in interest rates and the relative level of mortgage rates during the period along with variable rate CMOs and their effective cap levels; (2) the relative percent of total assets represented by the fixed rate mortgage loan portfolio during the period; and (3) asset/liability actions taken by management throughout the period, including the addition of interest rate cap positions. The increase in longer-term interest rates and the relative level of shorter-term interest rates during the period impacted the implied forward rates and the valuation of the variable rate CMO investments with lower effective interest rate caps. To reduce the impact of the general duration lengthening from the variable rate CMO investments with lower effective interest rate caps, stand-alone interest caps were purchased during the period, leading to the less asset sensitive DOE level in the +200 interest rate shock scenario.

 In addition, the relative changes in interest rates and mortgage rates during the period caused the mortgage loan portfolio contribution to duration to change less than the associated liabilities, contributing to the decrease in the asset sensitive DOE profile in the base case scenario and the -200 interest rate shock scenario. The mortgage loan portfolio generally has a longer duration profile in the interest rate shock scenarios contributing to the asset-sensitive DOE in the up and down 200 basis point shock scenarios. However, the prepayment sensitivity and market value changes in our mortgage portfolio currently align well with our non-swapped callable debt portfolio in these scenarios generating a relatively stable sensitivity profile in the interest rate shock scenarios.

 The change in interest rates during the period generally lengthens the duration profile for both the fixed rate mortgage loan portfolio and the associated unswapped callable consolidated obligation bonds funding these assets. The decline in advances during the period generated a marginally larger contribution and an overall modest net duration profile change from the mortgage loan and unswapped callable bond portfolios. This behavior is expected since DOE is a market value weighted measure and as portfolio weightings change in relation to total market value of assets, the respective contributions increase or decrease to overall DOE. With the increase in our mortgage loan portfolio balance, the net impact was a slight increase as a percentage of total assets during this period, so the duration profile changed as expected as prepayments shifted slightly for both new production mortgage loans, as well as the outstanding fixed rate mortgage loan portfolio.

 To effectively manage these changes in the mortgage loan portfolio (including new production and prepaid loans) and related sensitivity to changes in market conditions, unswapped callable consolidated obligation bonds that either matured or were called were generally replaced with reissuance of unswapped callable consolidated obligation bonds with relatively long maturities and lock-out periods (generally six months and greater). Generally, changes in the profile of the liability portfolio corresponds with the expected duration profile of the fixed rate mortgage loans, all else being equal, and positions the balance sheet for future changes in rates, including changes in interest rate increases where the mortgage loan portfolio will likely lengthen in duration as expected prepayments slow. For further discussion of the call and reissuance of consolidated obligation bonds, see Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Consolidated Obligations." The combination of these factors contributed to the net DOE changes in all scenarios during the period.

 Duration gap is the difference between the duration of our assets and the duration of our liabilities. Our base duration gap was 1.2 months and 1.3 months for December 31, 2024 and 2023, respectively.

 Market Value of Equity
 MVE is the net value of our assets and liabilities. Estimating sensitivity of MVE to changes in interest rates is another measure of interest rate risk. The RMP measures our market value risk in terms of the MVE in relation to total regulatory capital stock outstanding (TRCS). TRCS includes all capital stock outstanding, including stock subject to mandatory redemption. As a cooperative, we believe using the TRCS results is an appropriate measure because it reflects our market value relative to the book value of our capital stock. Our RMP stipulates MVE shall not be less than: (1) 100 percent of TRCS under the base case scenario; or (2) 90 percent of TRCS under a 200 basis point instantaneous parallel shock in interest rates. Table 42 presents MVE as a percent of TRCS. As of December 31, 2024, all scenarios are well above the specified limits and much of the relative level in the ratios during the periods covered by the table can be attributed to the relative level of the fixed rate mortgage loan and associated funding portfolio market values along with the relative level of outstanding capital.

 The MVE to TRCS ratios can be impacted by the market value of equity sensitivity and level of capital outstanding based on our capital management approach. The relative level of advance, mortgage loan, and letters of credit balances, which trigger required stock, and excess stock as of December 31, 2024 (see Table 38 under this Item 7) contributed to the MVE levels as of December 31, 2024. These relationships and associated risk sensitivity primarily generate the changes in the MVE/TRCS levels and produce the changes in the ratios in all interest rate scenarios in the table below.

 Generally, a positive duration position accompanied by rising interest rates would negatively impact the base market value of equity (numerator). Likewise, as capital increases, the MVE/TRCS ratio declines since the capital level is the denominator in the ratio. While the change in interest rates contributed to the overall impact on base MVE during the period, the changes were limited with the ratio maintaining consistent levels in the base case and interest rate shock scenarios during the period.

 Table 42

 Market Value of Equity as a Percent of Total Regulatory Capital Stock

 Date
 Up 200 Basis Points
 Base
 Down 200 Basis Points

 09/30/2024

 06/30/2024

 03/31/2024

 09/30/2023

 06/30/2023

 03/31/2023

 Detail of Derivative Instruments by Type of Instrument by Type of Risk
 Various types of derivative instruments are utilized to mitigate the interest rate risks described in the preceding sections as well as to better match the terms of assets and liabilities. Tables 43 and 44 present the notional amount and fair value amount (fair value includes net accrued interest receivable or payable on the derivative) for derivative instruments by hedged item, hedging instrument, hedging objective and accounting designation (in thousands):

 Table 43

 Hedged Item
 Hedging Instrument
 Hedging Objective
 Accounting Designation
 Notional Amount
 Fair Value Amount

 Fixed rate non-callable advances
 Convert the advance's fixed rate to a variable rate index
 $
 12,541,236
 $
 2,387

 Fixed rate convertible advances
 Convert the advance's fixed rate to a variable rate index and offset option risk in the advance
 20,500

 Fixed rate putable advances
 Convert the advance's fixed rate to a variable rate index and offset option risk in the advance
 3,095,200
 (1,397)

 Fixed rate non-callable advances
 Convert the advance's fixed rate to a variable rate index
 581,304
 1,107

 Firm commitment to issue a fixed rate advance
 Forward settling interest rate swap
 8,730

 Fixed rate non-MBS available-for-sale investments
 3,300,000

 Fixed rate MBS available-for-sale investments
 5,128,426
 37,078

 Fixed rate non-MBS trading investments
 18,000

 Fixed rate MBS trading investments
 419,438
 7,198

 Mortgage Loans Held for Portfolio

 Fixed rate mortgage purchase commitments
 Mortgage purchase commitment
 34,524
 (43)

 Fixed rate non-callable consolidated obligation discount notes with tenors less than 6 months
 Convert the discount note's fixed rate to a variable rate
 7,247,448
 (7)

 Fixed rate non-callable consolidated obligation discount notes with tenors of 6 to 12 months
 Convert the discount note's fixed rate to a variable rate
 2,969,182

 Firm commitment to issue consolidated obligation discount note

 198,705
 (5)

 Fixed rate non-callable consolidated obligation bonds
 Convert the bond's fixed rate to a variable rate index
 2,642,000
 (34,414)

 Fixed rate callable consolidated obligation bonds
 Convert the bond's fixed rate to a variable rate index and offset option risk in the bond
 7,355,000
 (125,425)

 Variable rate consolidated obligation bonds
 Receive variable interest rate, pay variable interest rate swap
 Reduce basis risk by converting an undesirable variable rate index in the bond to a more desirable variable rate index
 500,000
 (70)

 Callable step-up/step-down consolidated obligation bonds
 Receive variable interest rate with embedded features, pay variable interest rate swap
 Reduce interest rate sensitivity and repricing gaps by converting the bond's variable rate to a different variable rate index and/or to offset embedded options risk in the bond
 823,000
 (39,065)

 Fixed rate callable consolidated obligation bonds
 Convert the bond's fixed rate to a variable rate index

 1,750,000
 16,941

 Balance Sheet

 Duration of equity

 Interest rate cap
 Limit duration and convexity risk caused by an increase in interest rates

 2,604,000
 4,181

 Cost of funds or asset

 Receive variable interest rate, pay variable interest rate swap
 Reduce interest rate sensitivity and repricing gaps

 750,000

 TOTAL
 $
 51,986,693
 $
 (130,684)

 Table 44

 Hedged Item
 Hedging Instrument
 Hedging Objective
 Accounting Designation
 Notional Amount
 Fair Value Amount

 Fixed rate non-callable advances
 Convert the advance's fixed rate to a variable rate index
 $
 11,315,760
 $
 (2,205)

 Fixed rate convertible advances
 Convert the advance's fixed rate to a variable rate index and offset option risk in the advance
 113,400
 4,215

 Fixed rate putable advances
 Convert the advance's fixed rate to a variable rate index and offset option risk in the advance
 2,071,800
 (9,227)

 Fixed rate non-callable advances
 Convert the advance's fixed rate to a variable rate index
 201,138

 Firm commitment to issue a fixed rate advance
 Forward settling interest rate swap
 52,141

 Fixed rate non-MBS available-for-sale investments
 3,050,000
 (4,065)

 Fixed rate MBS available-for-sale investments
 3,766,473
 48,363

 Fixed rate non-MBS trading investments
 293,000
 (26)

 Fixed rate MBS trading investments
 628,027
 20,659

 Adjustable rate MBS with embedded caps
 Interest rate cap
 Offset the interest rate cap embedded in a variable rate investment
 304,000

 Mortgage Loans Held for Portfolio

 Fixed rate mortgage purchase commitments
 Mortgage purchase commitment
 41,641

 Fixed rate non-callable consolidated obligation discount notes with tenors less than 6 months
 Convert the discount note's fixed rate to a variable rate
 5,261,131

 Fixed rate non-callable consolidated obligation discount notes with tenors of 6 to 12 months
 Convert the discount note's fixed rate to a variable rate
 3,727,296

 Fixed rate non-callable consolidated obligation bonds
 Convert the bond's fixed rate to a variable rate index
 4,599,000
 (18,313)

 Fixed rate callable consolidated obligation bonds
 Convert the bond's fixed rate to a variable rate index and offset option risk in the bond
 14,797,000
 (241,011)

 Callable step-up/step-down consolidated obligation bonds
 Receive variable interest rate with embedded features, pay variable interest rate swap
 Reduce interest rate sensitivity and repricing gaps by converting the bond's variable rate to a different variable rate index and/or to offset embedded options risk in the bond
 1,312,000
 (72,918)

 TOTAL
 $
 51,533,807
 $
 (271,497)

 Item 8: Financial Statements and Supplementary Data

 The following financial statements and accompanying notes, including the Report of Independent Registered Public Accounting Firm, are set forth on pages F-1 to F- 59 of this Form 10 K.

 Audited Financial Statements

 Page Number

 Management's Report on Internal Control over Financial Reporting
 F- 1

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

 F- 2

 Statements of Condition as of December 31, 2024 and 2023

 Statements of Income for the Years Ended December 31, 2024, 2023, and 2022

 F- 7

 Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023, and 2022

 F- 9

 Statements of Capital for the Years Ended December 31, 2024, 2023, and 2022

 F- 10

 Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 2022

 F- 11

 Notes to Financial Statements
 F- 13

 Background

 F- 13

 Note 1 – Summary of Significant Accounting Policies

 F- 13

 Note 2 – Recently Issued Accounting Standards and Adopted Accounting Guidance

 F- 21

 Note 3 - Investments

 F- 21

 Note 4 - Advances

 F- 27

 Note 5 - Mortgage Loans

 F- 29

 Note 6 – Derivatives and Hedging Activities

 F- 33

 Note 7 - Deposits

 F- 39

 Note 8 - Consolidated Obligations

 F- 40

 Note 9 - Affordable Housing Program

 F- 42

 Note 10 - Assets and Liabilities Subject to Offsetting

 F- 43

 Note 11 - Capital

 F- 45

 Note 12 - Accumulated Other Comprehensive Income

 F- 48

 Note 13 - Pension and Other Postretirement Benefit Plans

 F- 48

 Note 14 - Fair Value

 F- 49

 Note 15 - Commitments and Contingencies

 F- 55

 Note 16 - Transactions with Stockholders

 F- 57

 Note 17 - Transactions with Other FHLBanks

 F- 59

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

 There were no changes in or disagreements with our accountants on accounting and financial disclosure during the two most recent fiscal years.

 Item 9A: Controls and Procedures

 Disclosure Controls and Procedures
 Senior management is responsible for establishing and maintaining a system of disclosure controls and procedures designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide a reasonable level of assurance in achieving their desired objectives; however, in designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

 Management, with the participation of the President and CEO, our principal executive officer, and the Chief Financial Officer (CFO), our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2024. Based upon that evaluation, the CEO and CFO have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2024.

 Management's Report on Internal Control Over Financial Reporting
 Management's Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm with respect to FHLBank's internal control over financial reporting are included under Item 8 – "Financial Statements and Supplementary Data."

 Changes in Internal Control Over Financial Reporting
 There has been no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the fourth quarter of the year for which this annual report on Form 10-K is filed that has materially affected, or is 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

 Information About Our Executive Officers
 The following sets forth the executive officers who served during the period from January 1, 2024 through the date of this annual report on Form 10-K.

 All executive officers are "at will" employees. All executive officers, other than the Chief Audit Executive (CAE) and the CRO, may be removed from office or discharged by the board of directors or the President and CEO with or without cause. The CAE may be removed from office, with or without cause, only with the approval of the Audit Committee. The CRO may be removed from office, with or without cause, only with the approval of the Risk Oversight Committee.

 Table 45

 Executive Officer
 Age
 Position Held

 President and Chief Executive Officer

 Carl M. Koupal, III
 Executive Vice President, Chief Mission Officer / Chief Legal Officer and Corporate Secretary

 Senior Vice President, Chief Financial Officer (Principal Financial Officer)

 Brian J. Dreher
 Senior Vice President, Chief Information Officer

 Lance W. Liby
 Senior Vice President, Chief Business Officer

 Thomas E. Millburn1

 Senior Vice President, Chief Audit Executive

 Martin L. Schlossman, Jr.
 Senior Vice President, Chief Risk Officer

 Amy J. Crouch2

 First Vice President, Chief Accounting Officer

 __________
 1 Although Mr. Millburn is a non-voting member of FHLBank's executive team, he is not considered an "executive officer" as defined in Rule 3b-7 of the Exchange Act because he is not in charge of a principal business unit, division or function, nor does he perform a policy making function.
 2 Ms. Crouch served as FHLBank's Principal Financial Officer until December 1, 2024.

 Except as otherwise indicated below, each officer has been engaged in the principal occupation listed above for at least five years:

 Jeffrey B. Kuzbel became President and CEO in January 2024, after serving as Executive Vice President (EVP) and CFO starting in January 2022, and Senior Vice President (SVP) and CFO starting in April 2021. Prior to joining FHLBank in 2021, Mr. Kuzbel served as LIBOR Transition Executive at Capital One Financial from 2019 to March 2021; Treasury & Balance Sheet Management CFO at Capital One Financial from 2016 through 2018; Managing Vice President, Balance Sheet Management, at Capital One Financial from 2013 through 2015; Vice President, Balance Sheet Strategy from 2010 through 2012; and Senior Director, Treasury Finance & Analytics during 2009. Prior to his tenure at Capital One Financial, Mr. Kuzbel served as Lead Director – Market Risk Management for Freddie Mac, as Vice President – Fixed Income Portfolio Management and Trading at Advanced Investment Management, Inc., and as Head of Investments at the Federal Home Loan Bank of Pittsburgh.

 Carl M. Koupal, III, became EVP and Chief Mission Officer/Chief Legal Officer (CMO/CLO), Corporate Secretary in July 2024, after serving as EVP and Chief Legal and Ethics Officer, Corporate Secretary starting in January 2024, and as SVP and Chief Legal and Ethics Officer since October 2022. Mr. Koupal is responsible for overseeing FHLBank's Legal Services, Housing and Community Development, Government and Industry Relations, Corporate Communications, Corporate Governance, and, on an interim basis, Corporate Services activities. Mr. Koupal previously served as Chief Compliance and Ethics Officer & General Counsel, Corporate Secretary starting in October 2021; First Vice President, Associate General Counsel, Director of Legal Services and Compliance, Corporate Secretary from April 2018 to October 2021; and as Vice President, Assistant General Counsel, Director of Compliance and Corporate Secretary from March 2016 through March 2018. Mr. Koupal joined FHLBank in 2008 as a Law Clerk and was promoted to Staff Attorney in 2009; Legal and Compliance Officer in 2011; Assistant Vice President, Assistant General Counsel, Director of Compliance and Assistant Corporate Secretary in 2014; and Vice President, Assistant General Counsel, Director of Compliance and Corporate Secretary in 2016.

 Philip D. Bacchus became SVP and CFO in August 2024. Mr. Bacchus is responsible for overseeing FHLBank's Finance, Strategy, and Innovation Division, which includes Accounting, Capital Markets, and Strategy, Innovation, and Planning activities. Prior to joining FHLBank in 2024, Mr. Bacchus served as Senior Vice President and Treasurer at American Savings Bank, Honolulu, Hawaii, from 2019 to August 2024; and served in various treasury and balance sheet management roles at Capital One Financial from 2006 to 2017.

 Brian J. Dreher became SVP and CIO in January 2022, after serving as Vice President and Director of IT Infrastructure & Operations starting in 2014. Mr. Dreher is responsible for FHLBank's Information Technology activities, including IT governance, application solutions delivery, information security, infrastructure, and operations. He served as Vice President, Assistant Director of Information Technology from 2010 to 2014, and Vice President and Software Development Manager from 2004 to 2010. He joined FHLBank in 1998.

 Lance W. Liby became SVP and Chief Business Officer in April 2024. Mr. Liby is responsible for overseeing FHLBank's Product Administration and Lending, Product Development and Research, Sales, Member Solutions, and Wire Services activities. Mr. Liby previously served as First Vice President, Chief Credit Officer from January 2017 to March 2024. He joined FHLBank in 2013. Prior to joining FHLBank, Mr. Liby served as vice president at Mortgage Liquidity Solutions from 2011 to 2013 and was the Senior Manager of Credit Risk at U.S. Central Federal Credit Union from 2003 to 2011.

 Thomas E. Millburn became SVP, CAE in March 2016. Mr. Millburn is responsible for overseeing FHLBank's Internal Audit activities. Mr. Millburn previously served as SVP, Chief Internal Audit Officer from March 2011 to March 2016 and Senior Vice President, Director of Internal Audit from December 2010 to March 2011. Mr. Millburn joined FHLBank in 1994 as a staff internal auditor and was promoted to Assistant Vice President, Director of Internal Audit in 1999, Vice President in 2000 and First Vice President in March 2004.

 Martin L. Schlossman, Jr. became SVP, CRO in March 2017, after serving as Interim CRO starting in January 2017. Mr. Schlossman is responsible for overseeing FHLBank's Credit, Market Risk Analysis, and Operations Risk and Compliance activities. Mr. Schlossman previously served as Senior Vice President, Associate CRO from March 2012 through December 2016. He joined FHLBank in November 2000 as an Enterprise Risk Analyst and was promoted to Planning Officer in December 2001, Assistant Vice President in March 2004, Vice President in June 2005, and First Vice President in March 2009. He was named Associate CRO in June 2010 and was promoted to Senior Vice President in March 2012.

 Amy J. Crouch became First Vice President and Chief Accounting Officer and FHLBank's Principal Accounting Officer in January 2023. She was named Interim Principal Financial Officer from January 2024 through November 2024. Ms. Crouch is responsible for FHLBank's Accounting activities, including financial reporting. Ms. Crouch previously served as Vice President, Director of Financial Reporting since September 2011, and as SEC Reporting and Compliance Manager from April 2008 to September 2011. She joined FHLBank in 2005 as SEC Reporting and Compliance Accountant.

 Directors
 The Bank Act, as amended by the Recovery Act, mandates that an FHLBank's board of directors consists of 13 directors or such other number as the Director of the FHFA deems appropriate. Further, the Bank Act categorizes directorships into two categories: "member" directors and "independent" directors. A majority of directors are required to be member directors and at least two-fifths are required to be independent directors. Each director must be: (1) a citizen of the United States; and (2) either a bona fide resident in our district or serve as an officer or director of a member located in our district. Under the FHFA regulations, new and re-elected directors serve four-year terms; subject to adjustment by the FHFA to establish staggering of the board. Directors cannot be elected to serve more than three consecutive full terms. A director who was term-limited may be re-elected to a directorship for a term that commences no earlier than two years after the expiration of the third full term. The FHFA Director designated for 2024 and our board of directors currently consists of 17 directors, 10 of whom are member directors and seven of whom are independent directors

 Additionally, at least two of the independent directors must qualify as public interest directors. To qualify as a public interest director, an individual must have more than four years of experience in representing consumer or community interests in banking services, credit needs, housing, or consumer financial protections.

 Member directorships are designated to each of the four states in our district and each of our members is entitled to nominate and vote for candidates representing the state in which the member's principal place of business is located as of December 31 of the calendar year immediately preceding the election year (Record Date). To qualify as a nominee for a member directorship, a nominee must be an officer or director of a member located in the state to which the director of the FHFA has allocated the directorship, and such member must meet all minimum capital requirements established by its appropriate Federal banking agency or appropriate state regulator. Member directors are nominated by members located in the state to which the member directorship is assigned, based on a determination by the nominating institution that the nominee possesses the applicable experience, qualifications, attributes and skills to qualify the nominee to serve as an FHLBank director, without any participation from our board of directors. Following the nomination process, 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, 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 capital stock that were required to be held by all members in that state as of the Record Date for voting.

 Each of our member directors meets the required qualifications and, as such, each is an officer or director of a member in the respective state from which they were nominated and elected.

 Independent directors are nominated by the board of directors after consultation with the Affordable Housing Advisory Council and after the nominee has been submitted to the FHFA for review. In nominating independent directors, our board of directors may consider an individual's current and prior experience on the board of directors, the qualifications of the nominee, and the skills and experience most likely to add strength to the board of directors, among other skills, qualifications and attributes. FHFA regulations require us to encourage the consideration of diversity in nominating or soliciting nominees for positions on our board of directors. Pursuant to our Procedures for Identifying and Evaluating Candidates for Independent Directorships and Filling Vacant Directorships, our board of directors will consider diversity in nominating independent directors and in electing member directors when the board of directors is permitted to elect or appoint member directors in the event of a vacancy, and in evaluating potential director candidates, the board of directors may also identify appropriate criteria that will promote appropriate diversity on the board of directors and help meet our strategic needs, including desired skill sets, experience, residence, ability to devote sufficient time to service on the board of directors, and background. If our board of directors nominates only one individual for each independent directorship, then each nominee must receive at least 20 percent of the number of votes eligible to be cast in the election to be elected. If our board of directors nominates more persons for the type of independent directorship to be filled than there are directorships of that type to be filled in the election, then the nominee receiving the highest number of votes will be elected. Each member voting in the independent director election is entitled to cast one vote for each share of capital stock that the member is required to hold, subject to the statutory limitation discussed above. Our board of directors has adopted procedures for the nomination and election of independent directors, consistent with the requirements of the Bank Act and FHFA regulations.

 On November 5, 2024, Kyle J. Heckman from the state of Colorado and Christopher D. Wente from the state of Kansas were each declared elected as member directors, and Milroy A. Alexander from the state of Colorado and Lynn Jenkins from the state of Kansas were declared elected as independent directors of FHLBank's board of directors. Each of the directors elected in 2024 will serve four-year terms expiring December 31, 2028.

 Table 46 sets forth certain information regarding each of our directors as of the filing date of this annual report on Form 10-K.

 Table 46

 Age
 Type of
Directorship
 Director Since
 Current Term
Expiration
 Board Committee
 Membership1

 Milroy A. Alexander
 January 2015
 December 2028

 (a), (b), (c) Vice Chair, (e)

 Steven G. Bradshaw

 January 2024
 December 2027

 (b), (f)

 Kyle J. Heckman

 January 2025

 December 2028

 (a), (d)

 Thomas E. Henning
 January 2023
 (a), (b) Chair, (c), (d)

 Michael B. Jacobson
 January 2022
 December 2025
 (d), (f)

 Lynn Jenkins

 July 2019
 December 2028

 (a), (e), (f)

 Holly Johnson
 January 2016

 December 2027

 (a) Chair, (c), (d)

 Barry J. Lockard

 January 2019
 (b), (c) Chair

 Craig A. Meader
 January 2020

 December 2027

 (a), (e), (f) Chair Designate

 Jeffrey R. Noordhoek
 July 2020
 December 2025
 (b), (f)

 Mark J. O'Connor
 May 2011
 December 2025
 (c), (e), (f) Chair

 Carla D. Pratt
 January 2023
 (b), (e)

 Douglas E. Tippens
 January 2015
 (a), (b), (c), (d) Chair

 Gregg Vandaveer

 January 2024

 December 2027

 (e), (f)

 Paul E. Washington
 July 2021
 December 2025
 (c), (d), (e) Chair

 Christopher D. Wente

 January 2025

 December 2028

 (e), (f)

 Lance L. White
 January 2023
 (b),(d)

 1 Board of Director committees are as follows: (a) Audit; (b) Compensation, People and Inclusion; (c) Executive; (d) Risk Oversight; (e) Mission and Governance; and (f) Operations.

 Milroy A. Alexander has been a housing, financial and business consultant since 2010, serving non-profit housing organizations and a residential and commercial redevelopment authority for a former air force base. He has been board Chair of Northeast Denver Housing Center for the last 25 years. He is the former board chair of the Lowry Redevelopment Authority and a former board member of the National Council of State Housing Agencies, the Municipal Securities Rulemaking Board, Rose Community Foundation, and numerous other organizations. Mr. Alexander previously served as Executive Director and CEO of the Colorado Housing and Finance Authority in Denver, Colorado. The board of directors considered Mr. Alexander's qualifications, skills and attributes, including his more than 21 years of service at a state HFA, including nine years as Executive Director and CEO and 12 years as CFO; his certification as a certified public accountant (CPA); his more than 11 years as an auditor with Touche Ross & Co. (now Deloitte); his past service on the audit committees of many organizations, his experience in and knowledge of auditing and accounting, financial management, organizational management, project development, and risk management practices when making his nomination.

 Steven G. Bradshaw has served as President Emeritus of BOKF, N.A., and BOK Financial, Tulsa, Oklahoma, since July 2022. He has also served as President and CEO of both BOKF, N.A., and BOK Financial, both of Tulsa, Oklahoma, from January 2014 to December 2021. Before joining BOKF, N.A., and BOKF Financial in 1991, he operated his wholly owned retail brokerage service. Although the board of directors did not participate in Mr. Bradshaw's nomination since he is a member director, Mr. Bradshaw possesses a B.S. in Business Finance from the University of Central Oklahoma, graduated with distinction from the Southwestern Graduate School of Banking, and has over 30 years of banking experience that assists in his service as a director.

 Kyle J. Heckman has served as chairman of Flatirons Bank since September 2024 where he previously served as chairman and CEO for nearly 15 years. Although the board of directors did not participate in Mr. Heckman's nomination since he is a member director, he earned a Bachelor of Arts in Economics, a Bachelor of Science in Business Administration with an emphasis in finance and an MBA from the University of Colorado at Boulder. Heckman previously served on the board of directors and audit committee of the Federal Reserve Bank of Kansas City for two three-year terms. He was an appointed council member of the Federal Reserve Bank's regional Community Depository Institutions Advisory Council (CDIAC) for five years.

 Thomas E. Henning has been Manager of Henning LLC Companies since January 2023. Prior to his current role, Mr. Henning was Chairman, President and CEO of the Assurity Group, Inc. (AGI), a mutual holding company of life insurance companies in Lincoln, Nebraska, from 2005 through 2022 and was employed by Security Financial Life Insurance Co., a predecessor to AGI, from 1990 to 2005. Mr. Henning has served on the board of Nelnet, Inc., a public company and provider of education finance and services, headquartered in Lincoln, Nebraska, since 2003. He has also served on the board of First Interstate Bank, a public company and provider of financial services headquartered in Billings, Montana, since 2022, and previously served on the board of Great Western Bank prior to its acquisition by First Interstate Bank from 2015 to 2022. The board of directors considered Mr. Henning's qualifications, skills, and attributes, including his past experience as Chairman, President, and CEO of a life and health insurance company; his past experience as President and CEO of a community bank and President and Chief Operating Officer of a regional banking group; his prior and current service on the board of publicly traded companies; his more than 40 years of financial services experience; his prior service as an FHLBank director; and his experience in and knowledge of auditing and accounting, financial management, organizational management, project development, risk management practices, and the law, when making his nomination. Prior to his current term, Mr. Henning served as an independent director of FHLBank from April 2007 through December 2015.

 Michael B. Jacobson has served as Chairman, President and CEO of NebraskaLand Bank, North Platte, Nebraska, since 1998. He has also served as Chairman, President and CEO of NebraskaLand Financial Services, Inc. since 2000. Mr. Jacobson also serves on the Government Relations committee of the Nebraska Bankers Association, Chairman of North Platte Redevelopment Authority, Chair of the North Platte Airport Authority, on the Great Plans Health board of directors, as a University of Nebraska Foundation Trustee, and on Governor Pete Ricketts' Agricultural committee. Although the board of directors did not participate in Mr. Jacobson's nomination since he is a member director, Mr. Jacobson possesses a B.S. in agricultural economics, is a graduate of the Colorado Graduate School of Banking and possesses over 40 years of banking experience, including over 25 years as the CEO of a bank, that assists in his service as a director. Prior to his current term, Mr. Jacobson served as a member director of FHLBank from January 2012 through December 2019.

 Lynn Jenkins has been a partner at LJ Strategies since January 2019. Ms. Jenkins worked as a CPA for 16 years before launching a career in public service. Ms. Jenkins served as Treasurer of the State of Kansas and was subsequently elected to serve five terms in the U.S. House of Representatives. She currently serves on the boards of directors for American Century Investments Mutual Funds and previously served on the board of directors of MGP Ingredients, Inc. The board of directors considered Ms. Jenkins' qualifications, skills and attributes, including her role as a member of the U.S. House of Representatives, including service in leadership roles and on the House Financial Services Committee and the House Ways and Means Committee; her role as the Treasurer of the State of Kansas; her experience as a CPA and at public accounting firms; her experience in and knowledge of auditing and accounting, financial management, organizational management, project development, and the law, when making her nomination.

 Holly Johnson, a Chickasaw citizen and CPA, owns a tribal consulting company providing services to the Chickasaw Nation in the area of administrative support and policy development. She served as Secretary of the Department of Treasury for the Chickasaw Nation from October 2012 to December 2019, where she was responsible for all finance and accounting functions. From October 2010 to September 2012, she served as the Administrator of Planning and Organizational Development for the Chickasaw Nation. From August 2003 to October 2010, she served as an Elected Tribal Legislator for the Pontotoc District. Ms. Johnson serves as a trustee of the Chickasaw Foundation and is a past trustee of the Ada City Schools Foundation and the Chickasaw Nation's 401(k) plans, a past board member of the Ada Chamber of Commerce, a member of the Oklahoma State University School of Accounting Executive Advisory Board, and a former appointed commissioner of the Oklahoma Ethics Commission. She represented Indian Tribal Governments on the Advisory Committee of the Internal Revenue Service. The board of directors considered Ms. Johnson's qualifications, skills and attributes, including her role as Secretary for the Department of Treasury for the Chickasaw Nation; her experience as a CPA and at public accounting firms; her experience in and knowledge of auditing and accounting, financial management, organizational management, project development and risk management practices, when making her nomination.

 Barry J. Lockard is Chair of our board of directors. Mr. Lockard has served as President and CEO of Cornhusker Bank, Lincoln, Nebraska, since 2007. Mr. Lockard previously held senior leadership roles at Black and Decker, Cincinnati Bell, and First National Bank of Omaha. He also served eight years in the Nebraska Army National Guard. He has served on the boards of directors of the Nebraska Bankers Association, the American Bankers Association (ABA) Community Bankers Council, and is a trustee for the Graduate School of Banking at Colorado, where he has also served as a member of the faculty. Although the board of directors did not participate in Mr. Lockard's nomination since he is a member director, Mr. Lockard possesses a bachelor's degree in business administration, is a graduate of the Colorado Graduate School of Banking, and has more than 15 years as a bank CEO, that assists in his service as a director.

 Craig A. Meader has served as Chairman and CEO of First National Bank of Kansas since 1988. Mr. Meader has served as Chairman of the Kansas Bankers Association and the Bankers Bank of Kansas. Mr. Meader is a former member of the ABA Community Bankers Council, Government Relations Council and the ABA board of directors. Although the board of directors did not participate in Mr. Meader's nomination since he is a member director, Mr. Meader possesses a bachelor's degree in business administration and finance, is a graduate of the Madison Wisconsin Graduate School of Banking, served on the board of directors of Bankers' Bank of Kansas, N.A. for seven years, including one year as Chairman, and has more than 40 years as a bank CEO, that assists in his service as a director.

 Jeffrey R. Noordhoek has served as CEO of Nelnet, Inc., a publicly traded company, since January 2014, and previously served as President of Nelnet, Inc., from January 2006 through December 2013. The board of directors considered Mr. Noordhoek's qualifications, skills and attributes, including his position as CEO of Nelnet, Inc., which is a publicly traded company listed on the New York Stock Exchange and is the largest education payment plan provider in the United States; his lending, financial services, capital markets and derivatives experience; his experience overseeing a large team of information technology and IT security professionals; and his experience in and knowledge of auditing and accounting, financial management, organizational management, project development, and risk management practices, when making his nomination.

 Mark J. O'Connor serves as the president of the Board of The Impact Development Fund, a nonprofit CDFI headquartered in Loveland, Colorado. Mr. O'Connor recently retired as President of Investments of FirstBank Holding Company, Lakewood, Colorado, where he held many leadership positions since 1989. Although the board of directors did not participate in Mr. O'Connor's most recent nomination since he is a member director, Mr. O'Connor has more than 30 years of banking experience. He is a graduate of the Pacific Coast Banking School and has over 18 years of investment portfolio management experience, which includes serving as the President of Investments and Chair of the ALCO Committee of a large bank holding company. His experience on the board of a state housing finance authority, including service as Chairman, and his prior experience as an FHLBank director assist in his service as a director.

 Carla D. Pratt has served as the Ada Lois Sipuel Fisher Chair in Civil Rights, Race, and Justice in Law at the University of Oklahoma College of Law since May 2022. Prior to her current position she served as Dean and Professor of Law at Washburn University School of Law in Topeka, Kansas, from July 2018 to May 2022. Prior to joining Washburn University School of Law, she served various faculty and administrative roles at Penn State's Dickinson School of Law beginning in July 2000. Prior to joining academia, she practiced insurance law and commercial litigation. The board of directors considered Ms. Pratt's qualifications, skills and attributes, including her position as former Dean and Professor of Law at Washburn University School of Law; her service as an Associate Justice of the Standing Rock Sioux Supreme Court; her service on the accrediting body that is authorized by the U.S. Department of Education to accredit American law schools; her experience and deep understanding of diversity and inclusion issues and initiatives; her experience in and knowledge of auditing and accounting, financial management, organizational management, project development, risk management practices, and the law, when making her nomination.

 Douglas E. Tippens has served as Executive Vice President of BancFirst, Oklahoma City, Oklahoma, since December 2017. He served as Market President of BancFirst from November 2015 to December 2017. Before his service at BancFirst, Mr. Tippens served as President and CEO of Bank of Commerce, Yukon, Oklahoma, since 2006, and served on the board of directors of Bank of Commerce, Chelsea, Oklahoma, since 2013. Although the board of directors did not participate in Mr. Tippens' nomination since he is a member director, Mr. Tippens possesses a B.S. in agriculture economics and an MBA, is a graduate of the Graduate School of Banking at the University of Wisconsin, has more than 40 years of banking experience, including 10 years as president and CEO, and served on the board of directors of the Federal Reserve Bank of Kansas City, Oklahoma City Branch, that assists in his service as a director.

 Gregg Vandaveer has served as Sooner State Bank's Chairman of the Board since 2022 where he previously served as President and CEO from 2001 to 2021. Prior to joining Sooner State Bank, he served as President and CEO of Oklahoma State Bank from 1998 to 2001; Executive Vice President and Chief Lending Officer of First Enterprise Bank from 1995 to 1998; Executive Vice President and Member of the Board of Directors at American Bancorp of Oklahoma from 1987 to 1994; Vice President: Correspondent Banking for United Oklahoma Bank from 1983 to 1987; and Vice President of Johnco, Inc. Although the board of directors did not participate in Mr. Vandaveer's nomination since he is a member director, Mr. Vandaveer possesses a B.S. in journalism, is a graduate of the Southwestern Graduate School of Banking, the ABA Commercial Lending School, and the Oklahoma Bankers Association Intermediate School of Banking, and has more than 30 years of banking experience, including more than 20 years as president and CEO, that assists in his service as a director.

 Paul E. Washington has served as Executive Vice President for IMA Financial Group, Denver, Colorado, since May 2021, where he is responsible for mergers & acquisitions, commercial real estate strategy, communications, governance, administration, and investments. Mr. Washington served as market director (a regional president-equivalent position) for JLL, a Fortune 500, SEC registered commercial real estate services company from April 2017 to May 2021. He currently serves on the boards of directors for Independent Bank Group, Inc.; Colorado Concern; Downtown Denver Partnership; and Denver Museum of Nature & Science. Mr. Washington holds bar licenses in Colorado and California and previously served on the Colorado Housing and Finance Authority board of directors from 2013 to 2021 where he served as both board Chair and Chair of the Finance committee. The board of directors considered Mr. Washington's qualifications, skills, and attributes, including his degree in business and his J.D. and L.L.M. in taxation; his prior experience in leading a large real estate services company; his prior service on the board of directors of the Colorado Housing and Finance Authority; his experience in and knowledge of auditing and accounting, financial management, organizational management, project development, risk management practices, and the law, when making his nomination.

 Christopher D. Wente has served as president and CEO of Golden Belt Bank since 2017. Although the board of directors did not participate in Mr. Wente's nomination since he is a member director, he earned a Bachelor of Science degree in industrial engineering from Kansas State University and is a 2014 graduate of the Graduate School of Banking at Colorado. Mr. Wente has served as a director for Banker's Bank of Kansas since 2022, on the Hays Medical Center board of directors since 2024, as a member of the KBA Bank Management committee, and as a board member of the Ellis County Coalition for Economic Development.

 Lance L. White has served as President and CEO of Bank of the Flint Hills, Wamego, Kansas, since 2007. Although the board of directors did not participate in Mr. White's nomination since he is a member director, Mr. White has a B.S. in Accounting, is a graduate of the Colorado Graduate School of Banking, has served on the Community Depository Institutions Advisory Council of the Federal Reserve Bank of Kansas City, and has over 25 years of banking experience, including more than 15 as CEO, that assists in his service as a director.

 Relationships, Arrangements and Involvement in Certain Legal Proceedings
 There are no family relationships among any of our directors or executive officers. Except as described above, none of our directors holds directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940. There are no arrangements or understandings between any director or executive officer and any other person pursuant to which that director or executive officer was selected. No director or executive officer of FHLBank has been involved in any legal proceeding during the past ten years that would affect the integrity or ability of such director or nominee to serve in such capacity, including any proceedings identified in Item 401(f) of Regulation S-K.

 Code of Ethics
 We have adopted a Code of Ethics that applies to our directors, executive officers (including our principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions), employees, and Affordable Housing Advisory Council members. Our Code of Ethics is filed as an exhibit to reports we file with the SEC and has been posted on our website at www.fhlbtopeka.com/board-governance. We will also post on our website any amendments to, or waivers from, a provision of our Code of Ethics that applies to the principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions as required by applicable rules and regulations. The Code of Ethics is available, in print, free of charge, upon request. Written requests may be made to the CMO/CLO of FHLBank at 500 SW Wanamaker, Topeka, Kansas, 66606.

 Audit Committee Financial Expert
 Our board of directors has a separately-designated, standing audit committee, which consists of Holly Johnson (Chair), Milroy A. Alexander, Kyle J. Heckman, Thomas E. Henning, Lynn Jenkins, Craig A. Meader, and Douglas E. Tippens.

 The board of directors has determined that Holly Johnson is an "audit committee financial expert" as that term is defined under SEC regulations. Ms. Johnson is "independent" in accordance with the Nasdaq Independence Standards (defined under Item 13 below) for audit committee members, as those standards were applied by our board of directors.

 The Compensation, People and Inclusion Committee Report is included following the Compensation Discussion and Analysis in Item 11 - "Executive Compensation."

 Insider Trading Policy
 FHLBank is cooperatively owned. Our member institutions (and, in limited circumstances, our former member institutions) own our capital stock. No individuals (including our directors, officers and employees) may own our capital stock.

 Our capital stock can only be acquired, redeemed, or repurchased at par value of $100 per share. Our capital stock is not publicly traded, and no market mechanism exists for the disposition of our capital stock outside our cooperative structure. Members must purchase and maintain capital stock in FHLBank as a condition of membership and may be required to purchase additional stock to transact advances, MPF and/or letters of credit activity with us. Transactions in our capital stock are governed by applicable regulatory requirements and FHLBank's Capital Plan (included as Exhibit 4.1 to this Form 10-K).

 In addition to FHLBank's cooperative structure, FHLBank's primary source of funding is the issuance of debt securities, which are consolidated obligations issued as bonds and discount notes, that are sold by dealers to investors in the public. FHLBank therefore has adopted an Insider Trading Policy aimed at promoting compliance with insider trading laws, rules, and regulations applicable to FHLBank. FHLBank believes that this policy and the related procedures are reasonably designed to promote compliance with insider trading laws, rules, regulations, and applicable listing standards. This policy is filed as Exhibit 19.1 to this Form 10-K.

 Item 11. Executive Compensation

 Compensation Discussion and Analysis
 Overview of Previous Year Performance and Compensation: Our overall executive compensation philosophy is to attract, retain, and motivate highly-qualified executive officers who will advance: (1) our business objectives to promote our long-term growth and profitability in accordance with achievement of our long-term strategic objectives; and (2) our mission of supporting our members' efforts to build strong communities.

 The named executive officers in 2024 were: (1) Jeffrey B. Kuzbel, President and CEO; (2) Sonia R. Betsworth, EVP and Chief Administrative Officer (CAO); (3) Carl M. Koupal, III, EVP and CMO/CLO; (4) Martin L. Schlossman, Jr., SVP and CRO; (5) Philip D. Bacchus, SVP and CFO; and (6) Amy Crouch, First Vice President (FVP) and Chief Accounting Officer (each a "Named Executive Officer" or "NEO" and, collectively, the "Named Executive Officers" or "NEOs"). Ms. Betsworth retired from FHLBank in Feburary 2025 after 42 years of service.

 In determining the appropriate total compensation package for our NEOs for 2024, we considered the principal objectives of our compensation program as: (1) attracting and retaining highly-qualified and talented individuals; and (2) motivating these individuals to achieve short- and long-term FHLBank-wide performance goals through incentive compensation.

 In 2024, we provided competitive compensation opportunities for our NEOs based in part on adjustments to base salary in line with our Executive Pay Philosophy and on incentive compensation achievable through our Executive Incentive Compensation Plan (EICP). The EICP provides cash-based annual incentives and deferred incentive awards, which promote the achievement of short- and long-term objectives. With the exception of the Chief Accounting Officer, all NEOs participated in the EICP. The Chief Accounting Officer participated in our Short-Term Incentive Compensation Plan (STIP), which does not include a deferral component. The achievement of both short- and long-term goals translated to above target incentive awards earned by our NEOs in recognition of their contribution to our overall performance and success.

 Framework for Compensation Decisions: The Compensation, People and Inclusion Committee of the board of directors (Compensation Committee) oversees the compensation of the NEOs. The Compensation Committee's responsibilities in 2024 included:
 Advising the board of directors on the establishment of appropriate compensation, incentive and benefits programs, including the recommendation of performance goals for the EICP;
 Approving the base salaries for NEOs, other than the CEO, as recommended by the CEO;
 Approving the annual and deferred cash incentive awards of the NEOs; and
 Recommending to the board of directors the base salary, including any salary adjustments, of the CEO.

 Shareholder Advisory Vote on Executive Compensation: Directors are elected as described under Item 10 - "Directors, Executive Officers and Corporate Governance." As such, we do not engage in a proxy process and have not otherwise engaged in any activity that would require a consent solicitation of our members. Accordingly, there is no shareholder advisory vote on executive compensation in determining our compensation policies and decisions.

 Elements of Executive Compensation: To implement our compensation objectives, the elements of our 2024 compensation program for the NEOs included: (1) annual base salary; (2) annual and deferred cash incentive award opportunities under our EICP or STIP; (3) retirement and other benefits; (4) limited perquisites; and (5) potential payments upon termination or change in control.

 Due to our cooperative structure, we cannot offer equity-based compensation programs, so we may offer cash-incentive opportunities and certain retirement benefits to keep our compensation packages competitive relative to the market and to offset the value of compensation that labor-market competitors might offer through equity-based compensation programs.

 As required by Item 402(x) of Regulation S-K, we provide the following discussion of the timing of equity awards in relation to the disclosure of material nonpublic information (MNPI). During the year ended December 31, 2024, none of the NEOs were awarded stock options or similar awards and we did not time the disclosure of MNPI for the purpose of affecting the value of executive compensation.

 Use of Benchmarks: We believe a key to attracting and retaining highly qualified executive officers is the identification of the appropriate peer groups within which we compete for executive talent. We have historically recruited nationally, both within and outside of the FHLBank System, in our efforts to attract highly qualified candidates for the NEO positions. To ensure that we are offering competitive compensation to retain our NEOs, the board of directors (through the Compensation Committee) periodically retains compensation consultants to assist with comparative analyses of the NEOs' total compensation through a review of survey data reflecting potential comparator benchmarks for total compensation. Our Compensation Committee has used the survey data as guideposts, in conjunction with our pay philosophy, in considering and determining competitive levels of base salary and total compensation for our NEOs among other factors as described above.

 For 2024 compensation, the Compensation Committee considered the competitiveness of the total compensation paid to our NEOs by reviewing comparative survey data obtained from the compensation consultant, McLagan Partners, Inc. ("McLagan").

 The Compensation Committee generally considers a market composite benchmark when making pay decisions regarding the NEOs. The market composite benchmark created by McLagan is calculated by considering publicly available proxy data for regional and community banks with assets between $20 billion and $65 billion and other FHLBanks. Additionally, in calculating the market composite benchmark, for the commercial banks' peer group, Divisional Heads are used as the relevant comparison at the median. For the other FHLBanks' peer group, overall Functional Heads are used at the median.

 The following is a list of regional and community banks with $20 billion to $65 billion in assets, which is a component of the market peer group used for the 2024 compensation benchmarks:

 Ameris Bank
 Frost - Banking, Investments, Insurance

 Associated Bank
 Fulton Financial

 Atlantic Union Bankshares Corporation
 Glacier Bancorp, Inc.

 Banc of California, Inc.
 Hancock Whitney Corporation

 Bank of Hawaii

 Bank OZK
 Old National Bank

 BOK Financial Corporation
 Pinnacle Financial Partners, Inc.

 Cadence Bancorp
 Simmons First National Corporation

 Cathay General Bancorp
 South State Corporation

 City National Bank of Florida
 Synovus

 Commerce Bank
 Texas Capital Bank

 Customers Bancorp, Inc.
 UMB Financial Corporation

 Eastern Bank
 Umpqua Holding Corporation

 First Hawaiian Bank
 United Bank - VA

 First Interstate BancSystem Inc.
 United Community Banks, Inc.

 FirstBank Holding Company
 Valley National Bank

 FNB Omaha
 Wintrust Financial Corp.

 The intent to remain competitive with other FHLBanks and consider a broader select group of financial services institutions reflects our belief that the knowledge and skills necessary for effective performance of our NEOs' duties may be developed through experience at a variety of other financial services institutions. While we recognize that Topeka's geographic location may be a disadvantage in attracting executives, we generally view it as a positive factor in retaining executives.

 The FHLBank-based survey data is considered a primary peer group. For each of the FHLBank-based and market-based peer groups (i.e., the survey data), the Compensation Committee considered the 25th percentile, 50th percentile (i.e., median) and 75th percentile compensation ranges for analyzing executive positions similar to those of our NEOs in assessing the competitiveness of our total compensation for the NEOs. The Compensation Committee generally strives to establish annual base salary and incentive compensation opportunities for our NEOs in the median range of the survey data reviewed assuming target level performance would be achieved. The ultimate compensation determined appropriate in any given year, however, will depend on the scope of a NEO's responsibilities as compared to similar positions within our identified peer group(s), the experience and performance of the individual NEO, and our overall performance. While survey information is one factor in setting compensation for our NEOs, surveys are not the sole governing factor and independent decisions by the Compensation Committee are necessary to make compensation consistent with our financial condition, pay philosophy and future prospects.

 Annual Base Salary: A significant element of each NEO's total compensation is annual base salary, which is designed to reward our NEOs for past performance and their commitment to future performance and to serve as the foundation for competitive total compensation. Adjustments to annual base salaries for the NEOs are considered annually and made effective January 1st, following an analysis of our total compensation practices, the survey data, and FHLBank's performance.

 For 2024, the Compensation Committee determined that appropriate annual base salaries for each NEO should be competitive with the salaries of comparable positions within the peer groups for purposes of providing guideposts for a competitive compensation analysis. Adjustments to annual base salaries of the NEOs for 2024 were based on: (1) each NEO's scope of responsibility and accountability; (2) analysis of our comparator peer groups; (3) performance of FHLBank based on achievement levels of FHLBank-wide goals in the prior year; (4) the perceived performance of each NEO, as a subjective matter; and (5) other factors such as experience, time in position, general economic conditions, and labor supply and demand conditions.

 A final factor that the Compensation Committee generally considers in determining base salary increases in its effort to retain our NEOs is the relative difference in compensation between the executive officers as well as the pay relationship between executive officers and other employees at FHLBank. The Compensation Committee believes that internal pay equity provides an additional perspective to that of the survey data and helps ensure our executive compensation practices are internally consistent and equitable.

 The Compensation Committee also considered guidance and communications from our regulator, the FHFA, in determining total compensation for the NEOs as more specifically addressed below under "FHFA Oversight."

 In 2024, the Compensation Committee and the CEO determined that, with respect to competitive pay positioning for purposes of retaining our NEOs, it was appropriate to increase the base salaries of the NEOs to maintain competitive base and total compensation. Consideration was also given to each NEO's scope of responsibility, market comparators, individual and FHLBank performance, and other factors as described above. The CEO salary increase was recommended by the Compensation Committee and approved by the board of directors.

 Annual and Deferred Cash Incentive Awards: Our EICP is a cash-based annual incentive plan with a long-term deferral component that establishes individual incentive compensation award opportunities related to achievement of performance objectives during the performance periods. The EICP establishes two performance periods: (1) a Base Performance Period aligned with the calendar year; and (2) a Deferral Performance Period (or the long-term performance period), which is a three-year period commencing the calendar year following the Base Performance Period. Participating NEOs may earn an annual cash incentive during a Base Performance Period and a deferred cash incentive during a Deferral Performance Period. For each Base Performance Period, the board of directors will establish a Total Base Opportunity for NEOs. The Total Base Opportunity is equal to a percentage of each NEO's annual base salary at the beginning of the Base Performance Period and is composed of the Cash Incentive and the Deferred Incentive.

 We believe that well-designed incentive compensation plans provide important opportunities to motivate our NEOs to accomplish financial, risk, and operational goals that promote our mission. Thus, motivating our NEOs to accomplish business and financial short- and long-term goals that promote a high level of performance for our members is a key objective of our total compensation program. Consequently, our compensation and benefits programs are designed to motivate our NEOs to engage in the behaviors and performance necessary to deliver our desired results.

 To effectively motivate the NEOs to accomplish both short- and long-term goals that promote our performance, we believe that incentive awards must represent at-risk pay. In other words, the administration of our incentive compensation plans must be such that awards are distributed only in exchange for accomplishing pre-established goals, recommended by the Compensation Committee and approved by the board of directors, and are distributed only in accordance with such achievement. In 2024, we achieved at or above target attainment for each of the pre-established goals.

 In the fourth quarter of 2023, goal metrics, metric performance ranges and metric weights for cash incentive award opportunities under the 2024 EICP were developed. The proposed performance objectives reflected the drivers of our business and mission and were based upon the Compensation Committee's and management's discussions with respect to our primary mission and stockholder perceptions of success. The Compensation Committee and management took steps intended to align the performance objectives to the Strategic Business Plan. The Compensation Committee reviewed and analyzed the proposed 2024 performance objectives, as appropriate, before submitting the objectives to the board of directors for approval.

 For the Base Performance Period of January 1, 2024 to December 31, 2024, the board of directors approved a Total Base Opportunity equal to a percentage of each NEO's Earned Base Salary during the Base Performance Period. Certain NEOs have a greater and more direct impact than others on the success of FHLBank; therefore, these differences are recognized by varying the Total Base Opportunity for each NEO. The Total Base Opportunity is the amount that may be earned for achieving performance levels under established Performance Measures and is comprised of the Cash Incentive and the Deferred Incentive. In the event FHLBank's performance during the Base Performance Period results in the achievement of a Total Base Opportunity that exceeds 100 percent of a Participant's base salary at the start of the Base Performance Period, the Target Document provides that the Total Base Opportunity shall be capped at 100 percent of the Participant's base salary in accordance with regulatory restrictions. The Deferred Incentive is 50 percent of the Total Base Opportunity, which shall be deferred for the Deferral Performance Period, which is the three-year period from January 1, 2025 to December 31, 2027, over which FHLBank applies an interest rate credit compounding annually, as further described below, and becomes payable after the end of the Deferral Performance Period, subject to review by the Director of the FHFA. The Cash Incentive is the portion of the Total Base Opportunity that is not the Deferred Incentive and becomes payable after the end of the Base Performance Period upon achievement of established Performance Measures, subject to review by the Director of the FHFA.

 Awards under the EICP may be granted for achievement of Performance Measures corresponding to achievement levels, from threshold, to target, to optimum performance for each goal metric. Threshold represents the minimum achievement level; target represents the expected achievement level; and optimum represents the achievement level that substantially exceeds the target level. Awards may be earned for performance attainment within these achievement levels as a percentage of base salary that corresponds to actual performance. For performance that falls between any two levels of achievement, linear interpolation is used to ensure that the award is consistent with the level of performance achieved. NEOs may earn annual awards expressed as a percent of their base salary at the beginning of the Performance Period. Table 47 presents the Total Base Opportunity for each NEO for each achievement level for the Base Performance Period:

 Table 47

 Position
 Total Base Opportunity

 Threshold
 Target
 Optimum1

 President & CEO
 40.0
 %
 80.0
 %
 120.0
 %

 EVP and SVP & CFO

 30.0
 60.0
 90.0

 SVP & NEO other than CFO

 27.5
 55.0
 82.5

 FVP2

 17.5
 35.0
 52.5

 1 Total Base Opportunity is capped at 100 percent of the Participant's Earned Base Salary.
 2 Ms. Crouch served as FHLBank's Principal Financial Officer until December 1, 2024. Ms. Crouch is not a participant of the EICP and is a participant of the STIP with the same incentive compensation plan targets as the EICP. The STIP Cash Incentive and the EICP Base Opportunity are identical by definition.

 The Total Base Opportunity Goal Metrics for 2024 are described in Table 48:

 Table 48

 Total Base Opportunity Goal Metric
 Definition

 Return on Equity Spread to SOFR1

 The spread between (a) adjusted net income (as defined in the plan) divided by the daily average total regulatory capital and (b) the daily average of overnight SOFR.

 Affordable Housing Program ("AHP") General Fund Ratio
 The AHP General Fund Ratio refers to the total dollar amount of applications submitted for the AHP General Fund compared to the total dollar amount allocated to the AHP General Fund available to be awarded in the AHP General Fund for the performance year based on the Required Annual AHP Contribution.

 Native American Housing Initiatives ("NAHI") Grants Ratio
 NAHI references FHLBank's voluntary grant program that provides Native American tribes and Tribally Designated Housing Entities with access to grant funds intended to build their communities in support of housing for tribal members in FHLBank's district (Colorado, Kansas, Nebraska and Oklahoma). The ratio refers to the total dollar amount in applications submitted compared to the initial total dollars awarded for the performance year.

 Member Participation in Housing and Community Development Programs
 Housing and Community Development Programs include the following four program categories: (1) the AHP General Fund; (2) TurnKey; (3) Community Housing/Development Programs; and (4) NAHI. Participation in the AHP General Fund means a member submits an AHP General Fund application. Participation in TurnKey means a member submits a reservation for a TurnKey product. Participation in a Community Housing/Development Program means a member has an approved Community Housing Program or Community Development Program application. Participation in NAHI means a member submits a NAHI application.

 Risk Management – Compliance, Business and Operations Risks
 Management of FHLBank risks as determined by the weighted average rating by the board of directors in an annual evaluation of the Risk Appetite metrics in this area using a 1 (lowest) to 5 (highest) point scale. General risk categories are compliance, business and operations risks.

 Risk Management – Market, Credit and Liquidity Risks
 Management of FHLBank risks as determined by the weighted average rating by the board of directors in an annual evaluation of the Risk Appetite metrics in this area using a 1 (lowest) to 5 (highest) point scale. General risk categories are market, credit and liquidity risks.

 Diversity, Equity, Inclusion and Belonging Education and Culture
 FHLBank's DEIB education and culture initiative is defined as the advancement of DEIB, to the maximum extent possible, in balance with financially safe and sound business practices through business partner engagement with DEIB experiences.

 Diversity, Equity, Inclusion and Belonging Business Practice Outcome Measures
 Points are awarded by achievement of the following (one point awarded for each): (1) Workforce: Attain a workforce ratio of at least 13.75% business partners of color as of 12/31/2024. (2) Workforce: Participate in four outreach opportunities to support diversifying our workforce or members of the board of directors. (3) Marketplace: Participate in four outreach opportunities with diverse-owned vendors. (4) Marketplace: Participate in four outreach opportunities with diverse broker dealers. (5) Culture: Provide tangible and practical examples of equity and belonging at ten different opportunities. (6) Culture: Celebrate cultural diversity of business partners at four FHLBank-sponsored events.

 1 As part of evaluating our financial performance and measuring EICP performance, we begin with the components of "adjusted income", a non-GAAP financial measure." We adjust net income reported in accordance with GAAP for the impact of: (1) AHP assessments (equivalent to an effective minimum income tax rate of 10 percent); (2) fair value changes on trading securities and derivatives and hedging activities (excluding net interest settlements); (3) prepayment and yield maintenance fees; (4) voluntary program contributions; (5) non-routine and/or unpredictable items, such as gains/losses on securities; and (6) non-recurring items, such as gains/losses on retirement of debt and gains/losses on mortgage loans held for sale.

 The profit- and mission-oriented objectives "Return on Equity Spread to SOFR" and "Mission Housing Goals" were based on the belief that profitability and mission focus are critical to the long-term viability of the organization. The "Diversity, Equity, Inclusion and Belonging Education and Culture" and "Diversity, Equity, Inclusion and Belonging Business Practice Outcome Measures" reflect our commitment to diversity across all levels of our business, from recruiting and retaining our business partners to ensuring we have as broad a selection pool of suppliers as possible. We recognize that by harnessing the power of our collective similarities and differences FHLBank is better able to deliver on our mission. We believe this makes FHLBank a better place to work and a better partner for our cooperative members. Finally, the "Risk Management – Compliance, Business and Operations Risks" and the "Risk Management – Market, Credit and Liquidity Risks" objectives were included in recognition of the impact that the NEOs have on management of business, compliance, credit, liquidity, market and operations risks, to incent strong risk management practices and to reward positive risk management performance as determined by the board of directors. We divide the risk management objectives to balance risk exposure with the pursuit of stakeholder value.

 The Total Base Opportunity available to Participants for the Financial Performance Goals shall be adjusted as reflected in Table 49 below if the daily average Total Regulatory Capital is below 4.75 percent for 2024. The Financial Performance Goals include the Return on Equity Spread to SOFR, which represents 30 percent of the Base Opportunity Metric Weights at Table 51.

 Table 49

 Daily Average Total Regulatory Capital
 Financial Performance Goals Adjustment

 4.75%
 0%

 4.70% and <4.75%
 (25)%

 4.65% and <4.70%
 (50)%

 4.60% and <4.65%
 (75)%

 <4.60%
 (100)%

 Award levels were set at Threshold, Target and Optimum percentages of annual base salary. Table 50 sets forth the specific annual goal performance ranges, the actual achievement levels, and the incentive payout for each of our Total Base Opportunity Goal Metrics in 2024:

 Table 50

 Total Base Opportunity Goal Metrics
 Annual Performance Range
 Actual Achievement
 Incentive Payout1

 Threshold
 Target
 Optimum

 Financial Performance - Return on Equity Spread to SOFR
 3.25%
 4.00%
 5.00%
 5.84%

 Housing and Community Development Mission Alignment -AHP General Fund Ratio
 100%
 110%
 140%
 355.06%

 Housing and Community Development Mission Alignment - NAHI Grants Ratio
 100%
 150%
 200%
 251.76%

 Housing and Community Development Mission Alignment - Member Participation in Housing and Community Development Programs

 Risk Management – Compliance, Business and Operations Risks
 3.00
 4.00
 5.00
 4.49
 124.50%

 Risk Management – Market, Credit and Liquidity Risks
 4.00
 4.50
 5.00
 4.58
 108.00%

 Diversity, Equity, Inclusion and Belonging (DEIB) - Education & Culture
 80%
 85%
 90%
 93%

 Diversity, Equity, Inclusion and Belonging Business Practice Outcome Measures (6.0 point scoring scale)
 3.00
 4.00
 6.00
 6.00

 TOTAL WEIGHTED AVERAGE INCENTIVE PAYOUT
 139.88%

 1 If the actual achievement is Optimum or higher, the incentive payout is capped at 150.00 percent.

 We believe the goals incorporated into the EICP are indicative of our balanced approach to profitability, mission and member-focus, and risk management. As reflected in Table 50, we achieved in excess of Optimum for the Return on Equity Spread to SOFR and in excess of Optimum for the Housing and Community Development Mission Alignment goals. We achieved Optimum for Education and Culture and Optimum for the Business Practice Outcome Measures of the DEIB goals. We exceeded Target performance for Market, Credit and Liquidity and Compliance, Business and Operations of the Risk Management goals.

 Table 51 provides the metric weight for each Total Base Opportunity Goal Metric as a percent of the Total Base Opportunity for each NEO in 2024:

 Table 51

 Performance Objective
 Metric Weight

 Financial Performance - Return on Equity Spread to Secured Overnight Financing Rate (SOFR)
 %

 Housing and Community Development Mission Alignment - Affordable Housing Program (AHP) General Fund Ratio

 Housing and Community Development Mission Alignment - Native American Housing Initiatives (NAHI) Grants Ratio

 Housing and Community Development Mission Alignment - Member Participation in Housing and Community Development Programs

 Risk Management – Compliance, Business and Operations Risks

 Risk Management – Market, Credit and Liquidity Risks

 Diversity, Equity, Inclusion and Belonging (DEIB) - Education & Culture

 Diversity, Equity, Inclusion and Belonging Business Practice Outcomes

 TOTAL
 %

 Table 52 presents the eligible salary, aggregate goal achievement, Total Base Opportunity, Cash Incentive and Deferred Incentive for each NEO as calculated under the EICP for the Base Performance Period of January 1, 2024 to December 31, 2024 and the Deferral Performance Period, which is the three-year period from January 1, 2025 to December 31, 2027:

 Table 52

 Named Executive Officer
 Eligible Salary

 Incentive
Percent of Base Salary
 Total Base Opportunity
 Cash
 Incentive1

 Deferred Incentive

 $
 850,000
 100.00
 %
 $
 850,000
 $
 425,000
 $
 425,000

 Sonia R. Betsworth, EVP & CAO
 385,000
 83.93
 323,112
 161,556
 161,556

 392,596
 83.92
 329,486
 164,743
 164,743

 157,377
 83.93
 132,079
 66,040
 66,039

 383,000
 76.93
 294,647
 147,324
 147,323

 Amy J. Crouch, FVP & Chief Accounting Officer2

 235,000
 48.96
 115,048
 115,048
 —

 1 Cash Incentive is included as non-equity incentive plan compensation in Table 56 for all NEOs.
 2 Ms. Crouch served as FHLBank's Principal Financial Officer until December 1, 2024. Table 52 presents the eligible salary, aggregate goal achievement, Total Base Opportunity, and Cash Incentive for Ms. Crouch as calculated under the STIP for the Base Performance Period of January 1, 2024 to December 31, 2024. There is no Deferred Incentive defined in the STIP. The goal achievement percentage is the same as the EICP.

 The final value of the Deferred Incentive portion of the Total Base Opportunity for the calendar year 2025 to calendar year 2027 is measured by applying an interest rate credit equal to FHLBank's Pre-ASC 815 annual return on equity, compounded annually, to the Deferred Incentive presented in Table 52, as long as FHLBank has an MVE of not less than 100 percent of TRCS outstanding, as of the last day of the Deferral Performance Period.

 For any Performance Period, an award will not be payable if we fail to achieve performance at or above the Performance Measure(s) set by the Compensation Committee. The Compensation Committee may, in its discretion, reduce or eliminate an award payable under the EICP under any of the following circumstances: (1) we receive a composite "4" or "5" rating in our FHFA examination in any single year in any single Base Performance Period or Deferral Performance Period; (2) the board of directors finds a serious, material safety or soundness problem or a serious, material risk management deficiency exists, or if: (a) operational errors or omissions result in material revisions to the financial results, information submitted to the FHFA, or to data used to determine incentive payouts; (b) submission of material information to the SEC, Office of Finance, or FHFA is significantly past due; or (c) we fail to make sufficient progress, as determined by the board of directors, in the timely remediation of significant examination, monitoring or other supervisory findings; (3) during the most recent FHFA examination, the FHFA identified an unsafe or unsound practice or condition that is material to the financial operation of FHLBank within a NEO's area(s) of responsibility and such unsafe or unsound practice or condition is not subsequently resolved in favor of FHLBank by the last day of the Base Performance Period or Deferral Performance Period; or (4) a given participant does not achieve satisfactory individual achievement levels (as determined in the sole discretion of the Compensation Committee) during the Deferral Performance Period. Additionally, Deferred Incentive awards shall be reduced by one-third for each year during the Deferral Performance Period in which we have negative net income, as defined and in accordance with GAAP. The Compensation Committee did not reduce or eliminate an award.

 The EICP for the 2022-2024 Deferral Performance Period is subject to the following performance goal: (1) FHLBank must have an MVE of not less than 100 percent of TRCS outstanding as of the last day of the Deferral Performance Period; and (2) the calculation of the Final Deferred Incentive Award shall be calculated by applying an interest rate credit of six percent, compounded annually, to the Deferred Incentive.

 Based on the performance results, Table 53 presents the Final Deferred Incentive Award for the 2022-2024 Deferral Performance Period for each NEO:

 Table 53

 Named Executive Officer
 Deferred Incentive
 Final Deferred Incentive Award1

 $
 132,942
 $
 158,337

 Sonia R. Betsworth, EVP & CAO
 94,940
 113,076

 21,557
 25,699

 —
 —

 84,634
 100,801

 1 The amount is included as non-equity incentive plan compensation in Table 56 for all NEOs.

 An NEO, in the discretion of the Compensation Committee, shall be required to forfeit an award earned under the EICP if the NEO is: (1) terminated from employment with FHLBank for Cause as defined under the EICP; (2) engages in competition with FHLBank or interferes with the business relationships of FHLBank during their employment or for a period of one year following their termination; or (3) discloses confidential information of FHLBank.

 Bonuses: On occasion, the Compensation Committee may elect to award a NEO additional compensation in the form of a bonus in recognition of that NEO's performance. Mr. Bacchus received a hiring bonus in the amount of $175,000, as well as a $25,000 stipend to assist with relocation expense. Additionally, Mr. Bacchus may receive an additional $175,000 if within his first twelve months of employment, he purchases a primary residence or signs a year-long lease within the surrounding area of FHLBank. In 2024, Mr. Bacchus has received a net payment of $69,000 of the funds to assist with his relocation. All of Mr. Bacchus's bonuses are subject to a clawback of the entire bonus amounts if Mr. Bacchus's employment with FHLBank ends within one year of the payment of the bonuses.

 Retirement and Other Benefits - In 2024, certain of the NEOs were participants in the Pentegra Defined Benefit Plan for Financial Institutions, a tax-qualified multiple-employer defined-benefit plan (DB Plan), which was hard frozen December 31, 2019. After the freeze, participants no longer accrued benefits under the DB Plan. In November 2024, we completed a purchase agreement with Midland National Life Insurance Company pursuant to which we transferred the future benefit obligations and annuity administration for all participants of the DB Plan. All of the NEOs participate in the Federal Home Loan Bank of Topeka 401(k) Plan, a defined contribution retirement savings plan qualified under the Internal Revenue Code (IRC) for employees of FHLBank (DC Plan). In response to federal legislation, which imposed restrictions on the retirement benefits payable to our executives, we subsequently established a third retirement plan, the Benefit Equalization Plan (BEP) to support the competitive level of our total compensation for executive officers, including certain NEOs. Generally, the BEP is characterized as a non-qualified "excess benefit" plan, which restores those retirement benefits that exceed the IRC limits applicable to the qualified DB Plan and DC Plan. In this respect, the BEP is an extension of our commitment to our NEOs and other eligible highly compensated employees that preserves and restores the full pension and thrift benefits that, due to IRC limitations, are not payable from the qualified retirement plans.

 DB Plan: The board of directors resolved, effective December 31, 2019, to: (1) freeze the DB Plan to discontinue the future accrual of new benefits under the DB Plan; and (2) revise the BEP to cease any further accrual of pension benefit under the BEP (as described further below).

 Our DB Plan covered all full-time employees of FHLBank as of January 1, 2009 who met the eligibility requirements of: (1) attainment of age 21; (2) completion of twelve months of employment; and (3) employed by FHLBank as of December 31, 2008, including certain of the NEOs. Employees were not fully vested until they completed five years of employment. The regular form of retirement benefits provides a single life annuity; a lump-sum payment or other additional payment options are also available to a limited degree for those NEOs who were employed prior to a plan change in 2003. The benefits are not subject to offset for social security or any other retirement benefits received. In 2024, four of the NEOs (Ms. Betsworth, Mr. Koupal, Mr. Schlossman, and Ms. Crouch) participated in the DB Plan, which required no contribution from those four NEOs.

 The DB Plan made available a normal retirement benefit, at or after age 65 where a NEO participant has met the vesting requirement, equal to 2.0 percent of their highest three-year average salary multiplied by their years of benefit service, up to 30 years. Two NEO participants (Mr. Schlossman and Ms. Betsworth) are eligible to receive benefits in excess of 2.0 percent because of a plan change in 2003. The amount in excess of 2.0 percent is a calculated "frozen add-on" determined at the time of the plan change. The formula for this "frozen add-on" is the prior benefit formula as of August 31, 2003 minus the new benefit formula as of September 1, 2003. Benefits are payable in the event of retirement, death, disability, or termination of employment if vested. Only the portion of the benefit accrued before September 1, 2003 is payable as a lump sum to employees who have attained age 50; otherwise, benefits are paid in installments.

 Early retirement benefits are payable at a reduced rate. Upon termination of employment prior to age 65, NEO participants meeting the five-year vesting and age 45 early retirement eligibility criteria are entitled to an early retirement benefit. Each of the NEOs participating in the DB Plan is eligible for early retirement. The early retirement benefit amount is calculated by taking the normal retirement benefit amount and reducing it by 3.0 percent times the difference between the age of the early retiree and age 65. If the NEO was employed prior to September 1, 2003 and their age and benefit service added together totaled 70 (Rule of 70), the normal retirement benefit amount would be reduced by 1.5 percent for each year between the age of the early retiree and age 65 for the portion of the normal retirement benefit accrued prior to September 1, 2003.

 DC Plan: The DC Plan is a tax-qualified, defined contribution plan. Substantially all officers and employees of FHLBank are covered by the plan. FHLBank contributes a matching amount equal to a percentage of voluntary employee contributions, subject to certain limitations (see "BEP" below).

 All employees who have met the eligibility requirements can choose to participate in the DC Plan. We match employee contributions based on the length of service and the amount of an employee's contribution. These employer contributions are immediately 100 percent vested. During 2024, matching ratios for all employees, including the NEOs (with the exception of Messrs. Kuzbel and Bacchus), under the DC Plan were as follows:

 Year 1
 No match

 Years 2 through 3
 100 percent match up to 4 percent of employee's eligible compensation

 Years 4 through 5
 150 percent match up to 4 percent of employee's eligible compensation

 After 5 years
 200 percent match up to 4 percent of employee's eligible compensation

 We also make a monthly basic contribution in an amount equal to two percent of all employees', including the NEOs', monthly eligible compensation after one year of service.

 BEP: The BEP is an unfunded, nonqualified supplemental executive retirement plan that permits Participating NEOs and certain other executives to defer compensation and to receive matching contributions that would otherwise have been made or accrued under FHLBank's DC Plan, as appropriate, but for the limitations imposed by the IRC. As part of Messrs. Kuzbel's and Bacchus' offer letters, they are eligible to receive an employer contribution of 10 percent as though they are a five-year, tenured employees of FHLBank.

 The BEP allows the NEOs to receive a rate of return based on our return on equity calculated for EICP purposes for the previous year. For 2024, the rate of return earned on the defined contribution portion of the BEP was 9.02 percent, which was our 2023 return on equity.

 Participating NEOs are at all times 100 percent vested in their defined contribution account balances of the BEP. In the event of unforeseen emergencies, they may request withdrawals equal to the lesser of the amounts necessary to meet their financial hardships or the amount of their account balances. As of December 31, 2024, each of the Participating NEOs would be entitled to receive their respective balance of compensation deferred through participation under the BEP within ninety days of any such Participating NEO's termination of employment due to death, disability or retirement and upon a change in control as defined in the BEP and in accordance with IRC Section 409A and applicable regulations. For each Participating NEO, these amounts are listed in Table 60 under the column titled "Aggregate Balance at Last FYE."

 As indicated above, the pension accrual benefit of the BEP ceased further accruals as of December 31, 2019.

 Other benefits: We are also committed to providing competitive benefits designed to promote health and welfare for all employees (including their families), including the NEOs. We offer all employees a variety of benefits including insurance (medical, dental, vision, prescription drug, life, long-term disability and travel accident), short-term disability salary continuation, flexible spending accounts, health savings account, an employee assistance program and education benefits. The NEOs participate in these benefit programs on the same basis as all other eligible employees.

 Perquisites: The board of directors views limited perquisites afforded to the NEOs as an element of the total compensation program. Any perquisites provided, however, are not intended to materially add to any NEO's compensation package and, as such, are provided to them primarily as a convenience associated with their respective duties and responsibilities. Examples of ongoing perquisites that were provided to the NEO in 2024 include cell phone reimbursement, limited spousal travel and limited club dues. As part of Mr. Bacchus' offer letter, he was eligible to receive a relocation benefit (plus a tax gross up). Total perquisites to each NEO are presented in Table 57.

 Potential payments upon termination or change in control
 Severance Benefits: We provide severance benefits to the CEO, CAO, CMO/CLO, CFO and CRO pursuant to our Executive Officer Severance Policy. The policy's primary objective is to provide a level of protection to officers from loss of income during a period of unemployment. These officers are eligible to receive severance pay under the policy if we terminate the officer's employment with or without cause, subject to certain limitations. These limitations include: (1) the officer voluntarily terminates employment, including as a result of disability or death; or (2) the officer's employment is terminated by us for misconduct.

 Provided the requirements of the policy are met and the NEO provides us an enforceable release, Table 54 presents the term and amounts that would have been payable to the NEO under the Executive Officer Severance Policy as of December 31, 2024, or other effective policy, absent a qualifying event that would result in payments under the Change in Control Plan (see "Change in Control Plan" below):

 Table 54

 Officer
 Months
 Severance Amount1

 COBRA2

 Severance Total

 $
 850,000
 $
 34,297
 $
 884,297

 Sonia R. Betsworth, EVP & CAO3

 288,750
 17,601
 306,351

 307,500
 25,723
 333,223

 225,000
 11,734
 236,734

 187,000
 9,189
 196,189

 1 Severance Amount equals the number of months of base salary as described under the Executive Officer Severance Policy.
 2 COBRA equals the number of months of medical, dental and vision coverage cost as described under the Executive Officer Severance Policy.
 3 Ms. Betsworth ceased to serve as CAO effective December 31, 2024; consequently, the Severance Policy was no longer applicable to Ms. Betsworth as of January 1, 2025.

 The amounts above do not include accrued incentive plan payments as presented in the Summary Compensation Table; the aggregate balance of the DC Plan as presented in the Nonqualified Deferred Compensation Table; or the present value of accumulated benefits of the BEP as presented in the Pension Benefits Table.

 Change in Control Plan: The Change in Control Plan provides that, upon both a change in control and the termination of a participant that qualifies as a Change in Control Termination, a participant will be entitled to a cash lump sum payment. A Change in Control means the occurrence of any of the following events, provided it shall not include any reorganization that is mandated by any Federal statute, rule, regulations or directive: (1) the merger, reorganization, or consolidation of FHLBank Topeka with or into another FHLBank or other entity; (2) the sale or transfer of all or substantially all of the business or assets of FHLBank Topeka to another FHLBank or other entity; (3) the purchase by FHLBank Topeka or transfer to FHLBank Topeka of substantially all of the business or assets of another FHLBank; (4) a change in the composition of the board of directors, as a result of one or a series of related transactions, that causes the combined number of member directors from the states of Colorado, Kansas, Nebraska and Oklahoma to cease to constitute a majority of the directors of FHLBank Topeka; or (5) the liquidation or dissolution of FHLBank Topeka. We provide for payments under a Change in Control to: (1) promote key employee loyalty and to assure continued dedication to FHLBank Topeka, notwithstanding the possibility, threat or occurrence of a Change in Control; and (2) to reduce the personal uncertainties to key employees who are vital to FHLBank Topeka's future success associated with a pending or possible Change in Control, and to encourage those key employees' continued dedication to FHLBank Topeka.

 A Participant in the Change in Control Plan will receive in a cash lump sum, an amount that, when combined with any amount payable under an FHLBank severance policy, equals a compensation multiplier times the sum of: (1) the Participant's then annualized base salary; and (2) an amount equal to the target Total Base Opportunity as reflected in FHLBank's EICP Targets document for the year in which the change in control occurs. Participants at Tier 1 are subject to a compensation multiplier of 2.99, participants at Tier 2 are subject to a compensation multiplier of 2.0, and participants at Tier 3 are subject to a compensation multiplier of 1.0. A Participant is also eligible to receive the continuation of certain group health care benefits for a period of years equal to their compensation multiplier. The Compensation Committee approved the following Participants in the Change in Control Plan and their effective Tiers: Mr. Kuzbel, CEO at Tier 1; Ms. Betsworth, CAO, Mr. Koupal, CMO/CLO, and Mr. Bacchus, CFO at Tier 2; and Mr. Schlossman, CRO, at Tier 3.

 Table 55 represents the elements of potential payments upon a Change in Control and the total amount that would be payable to the participating NEOs as of December 31, 2024 subject to FHLBank's Change in Control Plan, as currently in effect:

 Table 55

 Officer
 Severance Amount1

 Incentive2

 COBRA3

 Change in Control Total

 $
 2,541,500
 $
 2,033,200
 $
 102,891
 $
 4,677,591

 Sonia R. Betsworth, EVP & CAO4

 770,000
 462,000
 46,937
 1,278,937

 820,000
 492,000
 68,594
 1,380,594

 900,000
 540,000
 46,937
 1,486,937

 374,000
 205,700
 18,378
 598,078

 1 Compensation multiplier times the annual base salary at year end as described under the Change in Control Plan.
 2 Compensation multiplier times target Total Base Opportunity reflected in the 2024 EICP Targets as described in under the Change in Control Plan.
 3 COBRA equals the number of months of medical, dental and vision coverage cost as described under the Change in Control Plan.
 4 Ms. Betsworth ceased to serve as CAO effective December 31, 2024; consequently, the Change in Control Plan was no longer applicable to Ms. Betsworth as of January 1, 2025.

 The amounts above do not include accrued incentive plan payments as presented in the Summary Compensation Table; the aggregate balance of the DC Plan as presented in the Nonqualified Deferred Compensation Table; or the present value of accumulated benefits of the BEP as presented in the Pension Benefits Table.

 Why We Choose to Pay These Elements: We believe the Compensation Committee's analyses described above provided an appropriate process to determine 2024 compensation levels for each NEO that reasonably positions us to competitively manage our operations for success and to accomplish our mission.

 The mix of compensation elements that comprised the total compensation of our NEOs in 2024 particularly allowed us to provide total compensation that we believe appropriately balanced reasonable guaranteed pay through carefully considered base salary determinations with additional at-risk cash compensation opportunities for the NEOs. This means that while we strived to match an appropriate level of compensation comparable to that reflected by our perceived peer groups and internal pay analysis through annual base salary and retirement benefits components, we also strived to provide a component of compensation that is at-risk in both the shorter- and longer-term. These at-risk awards represent an opportunity to reward our NEOs based on the achievement of both our annual and long-term performance goals and the discretion vested in our Compensation Committee.

 FHFA Oversight: Section 1113 of the Recovery Act requires that the Director of the FHFA prevent an FHLBank from paying compensation to its executive officers that is not reasonable and comparable to that paid for employment in similar businesses involving similar duties and responsibilities. In 2009, the FHFA issued an advisory bulletin establishing certain principles for executive compensation at the FHLBanks and the Office of Finance that include: (1) such compensation must be reasonable and comparable to that offered to executives in similar positions at comparable financial institutions; (2) such compensation should be consistent with sound risk management and preservation of the par value of FHLBank capital stock; (3) 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 (4) the board of directors should promote accountability and transparency in the process of setting compensation. On January 28, 2014, the FHFA issued a final rule on executive compensation, which defines "reasonable" and "comparable" compensation and establishes the review and approval process for certain compensation payments and agreements. FHLBank is subject to additional supervisory guidance and oversight from the FHFA, from time to time.

 The FHLBanks have been directed to provide all compensation actions affecting their NEOs to the FHFA for review.

 Compensation, People and Inclusion Committee Interlocks and Insider Participation: No member of the Compensation, People and Inclusion Committee has at any time been an officer or employee with us. No executive officer has served or is serving on our board of directors or the compensation committee of any entity whose executive officers served on the Compensation Committee of our board of directors.

 Compensation, People and Inclusion Committee Report: The Compensation, People and Inclusion Committee of our board of directors has reviewed and discussed the Compensation Discussion and Analysis with management. Based on its review and discussions with management, the Compensation, People and Inclusion Committee has recommended to the board of directors that the Compensation Discussion and Analysis be included in our annual report on Form 10-K.

 The Compensation, People and Inclusion Committee

 Thomas Henning, Chair
 Milroy A. Alexander
 Steve G. Bradshaw
 Barry J. Lockard
 Jeffrey R. Noordhoek
 Carla D. Pratt
 Douglas E. Tippens
 Lance L. White

 Table 56 presents the Summary Compensation Table for the NEOs for the years for which they represented NEO of FHLBank.
 Table 56

 Name and Principal Position

 Year
 Salary
 Bonus
 Non-Equity Incentive Plan Compensation1

 Change in Pension Value and Nonqualified Deferred Compensation Earnings2

 All Other Compensation3

 Total

 Jeffrey B. Kuzbel4

 2024
 $
 850,000
 $
 —
 $
 583,337
 $
 11,711
 $
 116,937
 $
 1,561,985

 President & CEO

 2023
 470,000
 —
 191,056
 3,993
 70,544
 735,593

 2022
 442,000
 50,000
 175,101
 3,533
 60,614
 731,248

 Sonia R. Betsworth5

 2024
 385,000
 —
 274,632
 34,624
 56,231
 750,487

 EVP & CAO
 2023
 370,000
 —
 279,660
 236,248
 51,895
 937,803

 2022
 345,000
 —
 250,056
 22,762
 45,376
 663,194

 Carl M. Koupal, III6

 2024
 392,596
 —
 190,442
 2,678
 52,771
 638,487

 EVP & CMO/CLO

 2023
 360,000
 —
 121,950
 24,868
 48,014
 554,832

 2022
 335,000
 —
 110,594
 43,672
 489,714

 Philip D. Bacchus7

 2024
 157,377
 200,000
 66,040
 113,433
 536,853

 SVP & CFO

 Martin L. Schlossman, Jr.8

 2024
 383,000
 —
 248,125
 21,954
 54,460
 707,539

 SVP & CRO

 2023
 365,000
 —
 237,831
 107,417
 49,431
 759,679

 2022
 337,000
 —
 211,707
 8,606
 43,477
 600,790

 Amy J. Crouch9

 2024
 235,000
 —
 115,048
 —
 35,612
 385,660

 FVP & Chief Accounting Officer

 1 All compensation reported under "non-equity incentive plan compensation" represents performance awards earned pursuant to achievement of performance objectives under FHLBank's EICP and the STIP, subject to the approval of the Compensation Committee and not disapproved by the FHFA. The deferred compensation earned and the accrued component of the EICP for 2020 was reduced when paid in 2021. In 2023, the amount of these reductions, which was $34,936, and $30,107 for Ms. Betsworth, and Mr. Schlossman, respectively, was paid at the discretion of the board of directors. The amounts in the table reflect the actual amounts paid in the respective years.
 2 The change in pension value will fluctuate with changes in discount rates used to calculate the present value of accumulated benefits and can result in decreases. However, per SEC rules, any net actuarial decreases in pension plan values have been excluded from this column. Nonqualified deferred compensation earnings include above market earnings attributable to the BEP, which are calculated by multiplying the nonqualified deferred compensation average balance of the applicable year by the average rate of return in excess of the long-term applicable Federal rate (120 percent compounded quarterly) published by the IRS.
 3 The 2024 components of All Other Compensation are provided in Table 57.
 4 Above market earnings attributable to the BEP were $11,711, $3,993, and $3,533 for 2024, 2023, and 2022, respectively.
 5 Above market earnings attributable to the BEP were $34,624, $17,248, and $22,762 for 2024, 2023 and 2022, respectively. The aggregate change in the value of the accumulated benefit under FHLBank's DB Plan was $(86,000), $151,000 and $(651,000) for 2024, 2023, and 2022, respectively. The aggregate change in the value of the accumulated benefit under the defined benefit portion of the BEP was $(40,000), $68,000 and $(321,000) for 2024, 2023, and 2022, respectively.
 6 Above market earnings attributable to the BEP were $2,678, $868, and $448 for 2024, 2023, and 2022, respectively. The aggregate change in the value of the accumulated benefit under FHLBank's DB Plan was $(40,000), $24,000 and $(223,000) for 2024, 2023, and 2022, respectively.
 7 Above market earnings attributable to the BEP were $3 for 2024.
 8 Above market earnings attributable to the BEP were $21,954, $8,417 and $8,606 for 2024, 2023, and 2022, respectively. The aggregate change in the value of the accumulated benefit under FHLBank's DB Plan was $(70,000) and $69,000 and $(406,000) for 2024 and 2023, and 2022, respectively. The aggregate change in the value of the accumulated benefit under the defined benefit portion of the BEP was $(29,000), $30,000 and $(184,000) for 2024, 2023, and 2022, respectively.
 9 Ms. Crouch served as FHLBank's Principal Financial Officer until December 1, 2024. The aggregate change in the value of the accumulated benefit under FHLBank's DB Plan was $(34,000) for 2024.

 Table 57 presents the components of "All Other Compensation" for 2024 as summarized in Table 56.

 Table 57

 Named Executive Officer

 Perquisites and Personal Benefits1

 Gross-ups for Taxes
 Life Insurance Premiums

 Long Term and Individual Disability Premiums

 FHLBank Contribution to DC Plan

 FHLBank Contribution to Defined Contribution Portion of BEP

 Other Miscellaneous
 Total All Other Compensation

 $
 —
 $
 —
 $
 1,453
 $
 12,109
 $
 21,804
 $
 81,571
 $
 —
 $
 116,937

 Sonia R. Betsworth, EVP & CAO
 —
 —
 2,060
 22,463
 31,049
 —
 56,231

 —
 —
 33,487
 17,862
 —
 52,771

 69,101
 29,555
 —
 13,846
 113,433

 —
 —
 2,320
 20,299
 30,331
 54,460

 Amy J. Crouch, FVP & Chief Accounting Officer2

 —
 —
 34,152
 —
 35,612

 1 Perquisites and personal benefits are only included if more than $10,000 in aggregate for an individual. Perquisites and personal benefits for Mr. Bacchus consist of relocation support of $69,101.
 2 Ms. Crouch served as FHLBank's Principal Financial Officer until December 1, 2024.

 Table 58 presents the Grants of Plan Based Awards Table for the NEOs.

 Table 58

 Name
 Plan
 Estimated Future Payouts Under Non Equity Incentive Plan Awards1

 Threshold
 Target
 Optimum

 $
 170,000
 $
 340,000
 $
 510,000

 President & CEO
 170,000
 340,000
 510,000

 Sonia R. Betsworth

 57,750
 115,500
 173,250

 EVP & CAO
 57,750
 115,500
 173,250

 Carl M. Koupal, III
 55,125
 110,250
 165,375

 EVP & CMO/CLO
 55,125
 110,250
 165,375

 23,607
 47,213
 70,820

 SVP & CFO
 23,607
 47,213
 70,820

 Martin L. Schlossman, Jr.

 52,663
 105,325
 157,988

 SVP & CRO
 52,663
 105,325
 157,988

 Amy J. Crouch2

 STIP-Cash Incentive

 41,125
 82,250
 123,375

 FVP & Chief Accounting Officer

 1 Amounts reflected for the EICP represent the applicable range of estimated future payouts and do not represent amounts actually earned or awarded for the fiscal year ended December 31, 2024. Award amounts are calculated using the base salaries in effect on January 1 at the beginning of the performance period and the prorated salary amount for Mr. Bacchus. The EICP-Cash Incentive, if any, are earned and vested at year end. Awards, if any, under the EICP-Deferred Incentive Opportunity are payable in the year following the end of the three-year performance period. See discussion under Annual and Deferred Cash Incentive Awards under this Item 11 for a description of the terms of the EICP and potential future payouts.
 2 Ms. Crouch served as FHLBank's Principal Financial Officer until December 1, 2024. Amounts reflected for the STIP represent the applicable range of estimated future payouts and do not represent amounts actually earned or awarded for the fiscal year ended December 31, 2024. Award amounts are calculated using the base salaries in effect on January 1 at the beginning of the performance period. The STIP-Cash Incentive, if any, are earned and vested at year end.

 Pension Benefits: We previously participated in the DB Plan, a tax-qualified defined benefit plan. As mentioned above, the DB plan was frozen in 2019 and in 2024, FHLBank entered an agreement to transfer the future benefit obligations and annuity administration to Midland National Life Insurance Company, effective February 1, 2025. As such, FHLBank is no longer a party to the plan. The defined benefit portion of the BEP remains unchanged. In Table 59 presents the 2024 Pension Benefits Table for the participating NEOs.

 Table 59

 Name
 Plan Name
 Number of Years of Credited Services

 Present Value of Accumulated Benefit
 Payments During Last Fiscal Year

 Sonia R. Betsworth

 Pentegra Defined Benefit Plan for Financial Institutions
 30.0
 2,051,000
 —

 EVP & CAO

 FHLBank Benefit Equalization Plan
 30.0
 841,000
 —

 Carl M. Koupal, III
 CMO/CLO

 Pentegra Defined Benefit Plan for Financial Institutions
 10.5
 186,000
 —

 Martin L. Schlossman, Jr.

 Pentegra Defined Benefit Plan for Financial Institutions
 18.1
 786,000
 —

 SVP & CRO
 FHLBank Benefit Equalization Plan
 18.1
 295,000
 —

 Amy J. Crouch1
 Chief Accounting Officer

 Pentegra Defined Benefit Plan for Financial Institutions
 13.6
 230,000
 —

 1 Ms. Crouch served as FHLBank's Principal Financial Officer until December 1, 2024.

 Deferred Compensation: Table 60 presents the 2024 Nonqualified Deferred Compensation Table for the participating NEOs. Our fiscal year (FY) is 2024, with a fiscal year end (FYE) of December 31, 2024.

 Table 60

 Name
 Executive Contributions in Last FY1

 Registrant Contributions in Last FY

 Aggregate Earnings in Last FY

 Aggregate Withdrawals / Distributions

 Aggregate Balance at Last FYE2

 $
 72,875
 $
 81,571
 $
 27,778
 $
 —
 $
 423,951

 Sonia R. Betsworth, EVP & CAO
 53,308
 31,049
 82,124
 —
 1,045,749

 10,694
 17,862
 6,354
 —
 100,021

 —
 13,846
 —
 13,853

 144,946
 30,331
 52,072
 —
 697,735

 1 All amounts are also included in the salary column of Table 56.
 2 The total amount reported as preferential (above market) earnings in the aggregate balance at last FYE reported as compensation to each NEO in the Executive Group in our Summary Compensation Tables for previous years (2006-2023) was $8,145 for Mr. Kuzbel, $112,424 for Ms. Betsworth, $1,316 for Mr. Koupal, III, $0 for Mr. Bacchus, and $21,234 for Mr. Schlossman, Jr. The amounts reported as preferential (above market) earnings for the current year are presented in Table 56.

 CEO Pay Ratio: For the year ended December 31, 2024, the ratio of the total compensation of our CEO to the annual total compensation of our Median Employee (as identified in the manner described below) is approximately 10:1. For the year ended December 31, 2024, the total compensation of the CEO, as reported in the Summary Compensation Table (Table 56), was $1,561,985, and the total compensation of the Median Employee was $159,111.

 Methodology used to determine the Median Employee
 We identified the Median Employee by comparing the 2024 compensation (i.e., base salary on December 31, 2024, combined with actual incentive compensation earned in 2024 but paid in 2025) for each of the employees who were employed by FHLBank on December 31, 2024, and ranking all 262 employees by that consistently applied compensation measure from lowest to highest, excluding the CEO. Because there was an even amount of employees in the total count, we identified the two middle employees and selected the one with lower compensation to represent the initial median employee. Next, we identified the five employees with 2024 compensation higher than that initial median employee and the five employees with 2024 compensation lower than that initial median employee, constituting a total pool of 11 employees (the "Identified Pool"). We then calculated the 2024 Total Compensation for each employee in the Identified Pool for 2024 in the same manner as "Total Compensation" in the Summary Compensation Table. We ranked the 2024 Total Compensation for each employee in the Identified Pool from lowest to highest, and the employee from the Identified Pool in the middle is our Median Employee. The employees in the calculation included only full-time employees as all part-time and temporary employees were excluded.

 As a result of our methodology for determining the pay ratio, the estimated pay ratio reported above may not be comparable to the pay ratio of other companies in our industry or in other industries because other companies may rely on different methodologies or assumptions to determine an estimate of their pay ratio, or may make adjustments that we do not make. In addition, no two companies have identical employee populations or compensation programs. As such, our pay ratio should not be used as a basis for comparison between companies.

 Director Compensation: We provide our directors with compensation for the performance of their duties as members of the Board for time spent on FHLBank's business. We are a cooperative and our capital stock may only be held by current and former members, so we do not provide compensation to our directors int he form of stock or stock options. Table 61 presents the Director Compensation Table for the persons who served on our board of directors during 2024.

 Table 61

 Name
 Fees Earned or Paid in Cash

 Nonqualified Deferred Compensation Earnings1

 Total

 Milroy A. Alexander
 $
 145,000
 $
 6,624
 $
 151,624

 Steve Bradshaw

 Thomas E. Henning

 Michael B. Jacobson
 1,458
 124,458

 Lynn Jenkins

 Holly Johnson
 1,545
 131,545

 Barry J. Lockard
 160,000
 160,000

 Craig A. Meader
 123,965

 L. Kent Needham

 Jeffrey R. Noordhoek

 Mark J. O'Connor

 Thomas H. Olson, Jr.

 Carla D. Pratt
 123,438

 Douglas E. Tippens
 31,403
 154,403

 Gregg Vandaveer

 8,229
 131,229

 Paul E. Washington

 Lance L. White
 3,970
 126,970

 1 Nonqualified deferred compensation earnings represents above market earnings attributable to the BEP, which are calculated by multiplying the nonqualified deferred compensation average balance of the applicable year by the average rate of return in excess of the long-term applicable Federal rate (120 percent compounded quarterly) published by the IRS.

 Director Fees: The board of directors establishes on an annual basis a Board of Directors Compensation Policy governing compensation for board of director meeting attendance. On December 15, 2023, the board of directors adopted our 2024 Board of Directors Compensation Policy (2024 Policy), which became effective January 1, 2024. The applicable statutes and regulations allow each FHLBank to pay its directors reasonable compensation and expenses, subject to the authority of the Director of the FHFA to object to, and to prohibit prospectively, compensation or expenses that the Director of the FHFA determines are not reasonable. To compensate them for their time while serving as directors, our 2024 Policy provided that each director shall be paid one-fourth of their maximum annual compensation provided for in the policy following the end of each calendar quarter. The quarterly payment can be reduced for reasons specified in the policy.

 The maximum annual compensation amounts are based on an evaluation of McLagan market research data, including the appropriate peer group and peer positioning, a fee comparison among the FHLBanks and the board's assessment of appropriate and comparable pay to recruit and retain highly qualified directors. The 2024 Policy established annual compensation limits of $160,000 for the Chair, $140,000 for the Vice Chair, $130,000 for Committee Chairs and $123,000 for all other directors. Additionally, an individual serving as a Vice Chair of the Board was also entitled to an increase of $5,000 in their maximum annual compensation in the event the individual served as both Vice Chair of the Board and a Committee Chair.

 The board of directors adopted a 2025 Board of Directors Compensation Policy (2025 Policy) governing compensation for board of director meeting attendance on December 20, 2024. The 2025 Policy is similar to the 2024 Policy, and makes no adjustments to the established annual compensation limits. In addition to the maximum annual compensation reflected in the policy, a director may also realize the benefit of reasonable spousal or guest travel expenses that qualify as perquisites as set forth in the Directors and Executive Officers Travel Policy, for one meeting per calendar year, as designated by the Chair of the board of directors. Directors are also entitled to participate in FHLBank's BEP, discussed above, which allows directors the opportunity to defer director compensation, up to 100 percent.

 Director Expenses: Directors are also reimbursed for all necessary and reasonable travel, subsistence and other related expenses incurred in connection with the performance of their duties. For expense reimbursement purposes, directors' official duties can include:
 Meetings of the Board and Board Committees;
 Meetings requested by the FHFA;
 Meetings of FHLBank System committees;
 FHLBank System director meetings;
 Meetings of the Council of Federal Home Loan Banks and Council committees; and
 Attendance at other events on behalf of FHLBank.

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

 We are a cooperative. Our members or former members own all of our outstanding capital stock. Our directors are elected by and a majority are from our membership. Each member is eligible to vote for the open member directorships in the state in which its principal place of business is located and for each open independent directorship. For additional information, see Item 10 - "Directors, Executive Officers and Corporate Governance." Membership is voluntary, and members must give notice of their intent to withdraw from membership. A member that withdraws from membership may not be readmitted to membership for five years after the date upon which its required membership stock (Class A Common Stock) is redeemed by us.

 Management cannot legally and, therefore, does not, own our capital stock. We do not offer any compensation plan to our employees under which equity securities of FHLBank are authorized for issuance.

 Members, former members, and successors to former members, including affiliated institutions under common control of a single holding company, holding five percent or more of our outstanding capital stock as of February 28, 2025, are presented in Table 62.

 Table 62

 Member Institutions Holding 5 Percent or More Capital Stock

 Borrower Name
 Address
 City
 State
 Number of Shares

 501 NW Grand Blvd
 Oklahoma City
 OK
 5,319,361
 21.8
 %

 1 Williams Center-BOK Tower 16 SW
 Tulsa
 OK
 1,563,798
 6.4

 TOTAL
 6,883,159
 28.2
 %

 Additionally, because a majority of our board of directors are member directors nominated and elected from our membership, our member directors are officers or directors of members financial institutions that own our capital stock. Table 63 presents total outstanding capital stock, which includes mandatorily redeemable capital stock, held as of February 28, 2025, for members whose affiliated officers or directors currently serve on our board of directors:

 Table 63

 Total Capital Stock Outstanding to Member Institutions whose Officers or Directors Serve as a Director

 Borrower Name
 Address
 City
 State
 Number of Shares

 1 Williams Center-BOK Tower 16 SW
 Tulsa
 OK
 1,563,798
 6.4
 %

 NebraskaLand Bank
 1400 S Dewey Street
 North Platte
 NE
 50,674
 0.2

 Cornhusker Bank
 8310 O Street
 Lincoln
 NE
 48,524
 0.2

 Bank of the Flint Hills
 806 5th Street
 Wamego
 KS
 46,245
 0.2

 Golden Belt Bank, FSA
 1101 East 27th Street
 Hays
 KS
 38,743
 0.2

 Midwest Housing Development Fund
 515 N. 162nd Avenue, Suite 202
 Omaha
 NE
 7,780
 —

 BancFirst
 100 N Broadway Ave
 Oklahoma City
 OK
 6,500
 —

 First National Bank of Kansas
 600 N 4th Street
 Burlington
 KS
 5,211
 —

 Flatirons Bank
 1095 Canyon Blvd. Suite 100
 Boulder
 CO
 4,693
 —

 Sooner State Bank
 2 SE 4th Street
 Tuttle
 OK
 3,654
 —

 Bankers' Bank of Kansas, NA
 555 N Woodlawn Blvd, Bldg 5
 Wichita
 KS
 3,418
 —

 Impact Development Fund
 200 E. 7th Street, Suite 412
 Loveland
 CO
 1,333
 —

 TOTAL
 1,779,240
 7.2
 %

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

 Certain Relationships and Related Transactions
 Due to our structure as a cooperative, capital stock ownership is a prerequisite for our members to transact business with us. In recognition of this organizational structure, the SEC granted us an accommodation pursuant to a "no action letter," dated May 23, 2006, which relieves us from the requirement to make disclosures under Item 404(a) of Regulation S-K for transactions with related persons, such as our members and directors, which occur in the ordinary course of business. Further, the Recovery Act codified this accommodation.

 Members with beneficial ownership of more than five percent of our total outstanding capital stock and all our directors are classified as related persons under SEC regulations. Our members and certain former members or their successors own all our stock, the majority of our directors are elected by and from the membership, and we conduct our advances and mortgage loan business almost exclusively with members. AHP, Voluntary Program, and Community Investment Program funds are also disbursed in partnership or in connection with our members. Therefore, in the normal course of business, we extend credit and offer services and AHP benefits to members whose officers and directors may serve as our directors, as well as to entities that hold five percent or more of our capital stock. It is our policy that extensions of credit, all other FHLBank products and services, and the AHP benefits are offered on terms and conditions that are no more favorable to such members than the terms and conditions of comparable transactions with other members.

 Information with respect to the directors who are officers or directors of our members is set forth under Item 10 "Directors, Executive Officers and Corporate Governance Directors." Additional information regarding members that are beneficial owners of more than five percent of our total outstanding capital stock is provided in Item 12 "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters."

 For a discussion of the compensation of our NEOs and directors, see Item 11 - "Executive Compensation."

 We have a written "Related Person Transactions Policy" (Policy) that provides for the review and approval or ratification by our Audit Committee of any transaction with a related person that is outside the ordinary course of business. Under the Policy, transactions with related persons that are in the ordinary course of business are deemed pre-approved.

 A "Related Person" under the Policy is:
 Any person who is, or at any time since the beginning of our last fiscal year was, a director or an executive officer of FHLBank;
 Any immediate family member of any of the foregoing persons and any person (other than a tenant or employee) sharing the household of such director or executive officer;
 Any firm, corporation, or other entity in which any of the foregoing persons is an executive officer, a general partner or principal or in a similar position; or
 Any member institution (or successor) of FHLBank that is known to be the beneficial owner of more than five percent of our voting securities.

 "Ordinary course of business" is defined in the Policy as activities conducted with members, including but not limited to providing our products and services to the extent such product and service transactions are conducted on terms no more favorable than the terms of comparable transactions with similarly situated members or housing associates, as applicable, or transactions between FHLBank and a Related Person where the rates and charges involved in the transactions are subject to competitive bidding. Our products and services include: (1) credit products (e.g., overnight line of credit, advances, forward settling advance commitments, and letters of credit); (2) MPF Program mortgage loan products; (3) housing and CDP products; and (4) other services (e.g., deposit accounts, wire transfer services, safekeeping services and unsecured credit transactions permissible under the RMP).

 Transactions outside the ordinary course of business, with Related Persons that have a direct or indirect material interest, and exceed $120,000 are subject to Audit Committee review and approval under the Policy and include situations in which: (1) we obtain products or services from a Related Person of a nature, quantity or quality, or on terms that are not readily available from alternative sources; (2) we provide products or services to a Related Person on terms not comparable to those provided to unrelated parties; or (3) the rates or charges involved in the transactions are not subject to competitive bidding.

 Director Independence
 Board Operating Guidelines and Nasdaq Standards: The Board Operating Guidelines of FHLBank (Guidelines), available at www.fhlbtopeka.com/board-governance, require that the board of directors make an annual affirmative determination as to the independence of each director, as that term is defined by Rule 5605(a)(2) of the Nasdaq Marketplace Rules (the "Nasdaq Independence Standards").

 The board of directors has affirmatively determined that each one of its directors, both independent and member directors (each of whom is listed in Item 10 of this Form 10-K), is independent in accordance with the Nasdaq Independence Standards.

 To assist the board of directors in making an affirmative determination of each director's independence under the Nasdaq Independence Standards, the board of directors: (1) applied categorical standards for independence contained in the Guidelines and under the Nasdaq Independence Standards; (2) determined subjectively the independence of each director; and (3) considered the recommendation of the Audit Committee following its assessment of the independence of each director. The board of directors' determination of independence under the Nasdaq Independence Standards rested upon a finding that each director has no relationship which, in the opinion of the board of directors, would interfere with that director's exercise of independent judgment in carrying out the responsibilities of the director. Since under FHFA regulations, each independent director must be a bona fide resident of our district, and each member director must be an officer or director of one of our members, the board of directors included in its consideration whether any of these relationships would interfere with the exercise of independent judgment of a particular director.

 Committee Independence
 Audit Committee: In addition to the Nasdaq Independence Standards for committee members, our Audit Committee members are subject to the independence standards of the FHFA. FHFA regulations state that a director will be considered sufficiently independent to serve as an Audit Committee member if that director does not have a disqualifying relationship with FHLBank or its management that would interfere with the exercise of that director's independent judgment. Disqualifying relationships include but are not limited to:
 Being employed by FHLBank in the current year or any of the past five years;
 Accepting compensation from FHLBank other than compensation for service as a director;
 Serving or having served in any of the past five years as a consultant, advisor, promoter, underwriter, or legal counsel of FHLBank; or
 Being an immediate family member of an individual who is, or has been in any of the past five years, employed by FHLBank as an executive officer.

 In addition to the independence standards for Audit Committee members required under the FHFA regulations, Section 10A(m) of the Exchange Act sets forth the independence requirements of directors serving on the Audit Committee of a listed company under the Exchange Act. Under Section 10A(m), to be considered independent, a member of the Audit Committee may not, other than in their capacity as a member of the board of directors or any other board committee: (1) accept any consulting, advisory, or other compensation from FHLBank; or (2) be an affiliated person of FHLBank.

 All members of our Audit Committee were independent under the FHFA's audit committee independence criteria and under the independence criteria of Section 10A(m) of the Exchange Act throughout the period covered by this annual report.

 The FHFA's criteria for audit committee independence are posted on the corporate governance page of our website at www.fhlbtopeka.com. Except for the documents specifically incorporated by reference into this Annual Report on Form 10-K, information contained on our website or that can be accessed through our website is not incorporated by reference into this Annual Report on Form 10-K. Reference to our website is made as an inactive textual reference.

 Compensation, People and Inclusion Committee: FHLBank's board of directors has established a Compensation Committee. Under Nasdaq rules, to be considered an independent compensation committee member, the board of directors must affirmatively determine the independence of each director on the Compensation Committee and must consider all factors specifically relevant to determine whether a director has a relationship to FHLBank which is material to that director's ability to be independent from management in connection with the duties of a Compensation Committee member, including the source of the compensation of the director and whether the director is affiliated with FHLBank. The board of directors has affirmatively determined that each member of the Compensation Committee is independent in accordance with the Nasdaq Independence Standards for compensation committee members.

 Item 14: Principal Accountant Fees and Services

 Prior to approving PricewaterhouseCoopers LLP as our independent accountants for 2024, the Audit Committee considered whether PricewaterhouseCoopers LLP's provision of services other than audit services is compatible with maintaining the accountants' independence. The Audit Committee's policy is to pre-approve all audit, audit-related, and permissible non-audit services provided by our independent accountants. The Audit Committee pre-approved all such services provided by the independent accountants during 2024 and 2023. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent accountants and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent accountants in accordance with its pre-approval and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis.

 Table 64 sets forth our aggregate fees incurred for the years ended December 31, 2024 and 2023 by our external accounting firm, PricewaterhouseCoopers LLP (in thousands):

 Table 64

 2024
 2023

 Audit fees
 $
 1,254
 $
 1,044

 Audit-related fees

 Tax fees
 —
 —

 All other fees

 TOTAL
 $
 1,333
 $
 1,195

 Audit fees during the years ended December 31, 2024 and 2023 were for professional services rendered for the audits of our annual financial statements and review of financial statements included in our annual reports on Form 10-K and quarterly reports on Form 10 Q.

 Audit-related and all other fees during the years ended December 31, 2024 and 2023 were for discussions regarding miscellaneous accounting-related matters and a license fee for an electronic disclosure checklist application. For the year ended December 31, 2023, all other fees also included $80 thousand for a pre-implementation software review.

 We are assessed our proportionate share of the costs of operating the Office of Finance, which includes the expenses associated with the annual audits of the combined financial statements of the 11 FHLBanks. The audit fees for the combined financial statements are billed directly by PricewaterhouseCoopers LLP to the Office of Finance and we are assessed our proportionate share of these expenses. In 2024 and 2023, we were assessed $33,000 and $42,000 each year for the costs associated with PricewaterhouseCoopers LLP's audits of the combined financial statements for those years. These assessments are not included in the table above.

 Section 1433 of the Bank Act provides that we and the other FHLBanks are exempt from all federal, state and local taxation, with the exception of real property tax. Therefore, no tax consultation fees were paid to our external accounting firm during the years ended December 31, 2024 and 2023.

 Item 15: Exhibit and Financial Statement Schedules

 a) The financial statements included as part of this Form 10-K are identified in the index to Audited Financial Statements appearing in Item 8 of this Form 10-K and which index is incorporated in this Item 15 by reference.
 b) Exhibits.

 We have incorporated by reference certain exhibits as specified below pursuant to Rule 12b-32 under the Exchange Act.

 Exhibit No.

 3.1

 Exhibit 3.1 to FHLBank's registration statement on Form 10, filed May 15, 2006, and made effective on July 14, 2006 (File No. 000-52004) (the "Form 10 Registration Statement"), Federal Home Loan Bank of Topeka Articles and Organization Certificate, is incorporated herein by reference as Exhibit 3.1.

 3.2

 Exhibit 3.2 to the Current Report on Form 8-K, filed October 31, 2024, Federal Home Loan Bank of Topeka Amended and Restated Bylaws, is incorporated herein by reference as Exhibit 3.2.

 4.1

 Exhibit 4.1 to the 2019 Annual Report on Form 10-K, filed March 20, 2020, Federal Home Loan Bank of Topeka Capital Plan, is incorporated herein by reference as Exhibit 4.1.

 4.2

 Exhibit 4.2 to the 2019 Annual Report on Form 10-K, filed March 20, 2020, Description of Securities - Supplement to the Federal Home Loan Bank of Topeka Capital Plan, is incorporated herein by reference as Exhibit 4.2.

 10.1

 Exhibit 10.3 to the 2016 Annual Report on Form 10-K, filed March 9, 2017, Federal Home Loan Bank of Topeka Form of Advance, Pledge and Security Agreement (Specific Pledge), is incorporated herein by reference as Exhibit 10.1.

 10.2

 Exhibit 10.4 to the 2016 Annual Report on Form 10-K, filed March 9, 2017, Federal Home Loan Bank of Topeka Form of Advance, Pledge and Security Agreement (Blanket Pledge), is incorporated herein by reference as Exhibit 10.2.

 10.3

 Exhibit 10.6 to the 2013 Annual Report on Form 10-K, filed March 14, 2014, Federal Home Loan Bank of Topeka Form of Confirmation of Advance, is incorporated herein by reference as Exhibit 10.3.

 10.4

 Exhibit 10.1 to the Current Report on Form 8-K, filed June 23, 2017, Bond Trust Indenture dated as of June 1, 2017, between Shawnee County, Kansas and BOKF, N.A., is incorporated herein by reference as Exhibit 10.4.

 10.5

 Exhibit 10.2 to the Current Report on Form 8-K, filed June 23, 2017, Lease Agreement dated as of June 1, 2017, between Shawnee County, Kansas and Federal Home Loan Bank of Topeka, is incorporated herein by reference as Exhibit 10.5.

 10.6

 Exhibit 10.3 to the Current Report on Form 8-K, filed June 23, 2017, Base Lease Agreement dated as of June 1, 2017, between Shawnee County, Kansas and Federal Home Loan Bank of Topeka, is incorporated herein by reference as Exhibit 10.6

 10.7

 Exhibit 10.26 to the 2016 Annual Report on Form 10-K, filed March 9, 2017, Amended and Restated Federal Home Loan Banks P&I Funding and Contingency Plan Agreement, is incorporated herein by reference as Exhibit 10.7.

 10.8 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed December 18, 2020, Federal Home Loan Bank of Topeka Benefit Equalization Plan, is incorporated herein by reference as Exhibit 10.8.

 10.9 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed December 19, 2024, Federal Home Loan Bank of Topeka Executive Defined Contribution Retirement Plan, is incorporated herein by reference as Exhibit 10.9.

 10.10 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed February 16, 2022, Executive Incentive Compensation Plan dated December 17, 2021, is incorporated herein by reference as Exhibit 10.10.

 10.11 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed March 20, 2024, Executive Incentive Compensation Plan dated December 15, 2023, is incorporated herein by reference as Exhibit 10.11.

 10.12 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed July 18, 2024, Executive Incentive Compensation Plan dated June 13,2024, is incorporated herein by reference as Exhibit 10.12.

 10.13 *

 Executive Incentive Compensation Plan dated December 20, 2024

 10.14 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed February 6, 2020, Federal Home Loan Bank of Topeka 2020 Executive Incentive Compensation Plan Targets, is incorporated herein by reference as Exhibit 10.14.

 10.15 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed February 2, 2021, Federal Home Loan Bank of Topeka 2021 Executive Incentive Compensation Plan Targets, is incorporated herein by reference as Exhibit 10.15.

 10.16 *

 Exhibit 10.2 to the Current Report on Form 8-K, filed February 16, 2022, Federal Home Loan Bank of Topeka 2022 Executive Incentive Compensation Plan Targets, is incorporated herein by reference as Exhibit 10.16.

 10.17 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed March 7, 2023, Federal Home Loan Bank of Topeka 2023 Executive Incentive Compensation Plan Targets, is incorporated herein by reference as Exhibit 10.17.

 10.18 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed May 23, 2024, Federal Home Loan Bank of Topeka 2024 Executive Incentive Compensation Plan Targets, is incorporated herein by reference as Exhibit 10.18.

 Exhibit No.

 10.19 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed February 12, 2025, Federal Home Loan Bank of Topeka 2025 Executive Incentive Compensation Plan Targets, is incorporated herein by reference as Exhibit 10.19.

 10.20 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed July 20, 2015, Federal Home Loan Bank of Topeka Change in Control Plan, is incorporated herein by reference as Exhibit 10.20.

 10.21 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed August 1, 2018, Federal Home Loan Bank of Topeka Executive Officer Severance Policy, is incorporated herein by reference as Exhibit 10.21.

 10.22 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed January 5, 2024, Federal Home Loan Bank of Topeka 2024 Board of Directors Compensation Policy, is incorporated herein by reference as Exhibit 1022.

 10.23 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed December 26, 2024, Federal Home Loan Bank of Topeka 2025 Board of Directors Compensation Policy, is incorporated herein by reference as Exhibit 10.23.

 10.24 *

 Exhibit 10.1 to the Current Report on Form 8-K, filed June 30, 2016, Form of Director Indemnification Agreement, is incorporated herein by reference as Exhibit 10.24.

 10.25 *

 Exhibit 10.2 to the Current Report on Form 8-K, filed June 30, 2016, Form of Officer Indemnification Agreement, is incorporated herein by reference as Exhibit 10.25.

 10.26 *

 Exhibit 10.2 to the Current Report on Form 8-K, filed November 26, 2024, Acceptance Agreement with Midland National Life Insurance Company, is incorporated herein by reference as Exhibit 10.26.

 10.27 *

 Federal Home Loan Bank of Topeka Short-Term Incentive Compensation Plan

 14.1

 Exhibit 14.1 to the 2023 Annual Report on Form 10-K, filed March 11, 2024, Federal Home Loan Bank of Topeka Code of Ethics, is incorporated herein by reference as Exhibit 14.1.

 19.1

 Federal Home Loan Bank of Topeka Insider Trading Policy

 24.1

 Power of Attorney.

 31.1

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

 31.2

 Certification of Senior Vice President and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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

 99.1

 Exhibit 99.1 2023 Annual Report on Form 10-K, filed March 11, 2024, Federal Home Loan Bank of Topeka Audit Committee Charter, is incorporated herein by reference as Exhibit 99.1.

 99.2

 Federal Home Loan Bank of Topeka Audit Committee Report.

 101.INS**

 101.SCH**

 101.CAL**

 101.LAB**

 101.PRE**

 101.DEF**

 * Represents a management contract or a compensatory plan or arrangement.

 Item 16: Form 10-K Summary

 None.

 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.

 Federal Home Loan Bank of Topeka

 By: /s/ Jeffrey B. Kuzbel

 Date

 President and Chief Executive Officer

 By: /s/ Philip D. Bacchus

 Date

 Senior Vice President and Chief Financial 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 indicated on the dates indicated.

 Signature
 Title
 Date

 /s/ Jeffrey B. Kuzbel

 President and Chief Executive Officer

 (principal executive officer)

 /s/ Philip D. Bacchus

 Senior Vice President and Chief Financial Officer

 (principal financial officer)

 /s/ Amy J. Crouch

 First Vice President and Chief Accounting Officer

 Amy J. Crouch
 (principal accounting officer)

 /s/ Barry Lockard1

 Chair of the Board of Directors

 Barry Lockard

 /s/ Milroy A. Alexander1

 Vice Chair of the Board of Directors

 Milroy A. Alexander

 /s/ Steven G. Bradshaw1

 Steven G. Bradshaw

 /s/ Kyle J. Heckman1

 Kyle J. Heckman

 /s/ Thomas E. Henning1

 Thomas E. Henning

 /s/ Michael B. Jacobson1

 Michael B. Jacobson

 /s/ Holly Johnson1

 Holly Johnson

 /s/ Lynn Jenkins1

 Lynn Jenkins

 /s/ Craig A. Meader1

 Craig A. Meader

 /s/ Jeffrey R. Noordhoek1

 Jeffrey R. Noordhoek

 /s/ Mark J. O'Connor1

 Mark J. O'Connor

 /s/ Carla D. Pratt1

 Carla D. Pratt

 /s/ Douglas E. Tippens1

 Douglas E. Tippens

 /s/ Gregg Vandaveer1

 Gregg Vandaveer

 /s/ Paul E. Washington1

 Paul E. Washington

 /s/ Christopher Wente1

 Christopher Wente

 /s/ Lance L. White1

 Lance L. White

 1 Pursuant to Power of Attorney

 Management's Report on Internal Control over Financial Reporting

 Management of the Federal Home Loan Bank of Topeka (FHLBank) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. FHLBank's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements in accordance with generally accepted accounting principles. 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 FHLBank's assets; (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 FHLBank are being made only in accordance with authorizations of FHLBank's management and board of directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of FHLBank'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 and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. 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 of FHLBank assessed the effectiveness of FHLBank's internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on this evaluation under the COSO framework, management has concluded that FHLBank's internal control over financial reporting was effective as of December 31, 2024.

 The effectiveness of FHLBank's internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, FHLBank's independent registered public accounting firm, as stated in their accompanying report.

 By: /s/ Jeffrey B. Kuzbel

 President and Chief Executive Officer

 By: /s/ Philip D. Bacchus

 Senior Vice President and Chief Financial Officer

 Report of Independent Registered Public Accounting Firm

 To the Board of Directors and Stockholders of the
 Federal Home Loan Bank of Topeka

 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 Topeka (the "FHLBank") as of December 31, 2024 and 2023, and the related statements of income, of comprehensive income, of capital and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "financial statements"). We also have audited the FHLBank's internal control over financial reporting as of December 31, 2024, 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 FHLBank as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the FHLBank maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

 Basis for Opinions

 The FHLBank'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 accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the FHLBank's financial statements and on the FHLBank'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 FHLBank 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.

 PricewaterhouseCoopers LLP, 1100 Walnut Street, Suite 1300, Kansas City, Missouri 64106
 T: (816) 472 7921; F: (816) 218 1890, www.pwc.com/us

 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 Related Derivatives and Hedged Items
 As described in Notes 6 and 14 to the financial statements, the FHLBank uses derivatives to manage its exposure to interest-rate risks and reduce funding costs, among other objectives. The total notional amount of derivatives as of December 31, 2024, was $52.0 billion, of which 73% were designated as hedging instruments, and the fair value of derivative assets and liabilities as of December 31, 2024, was $357.3 million and $6.1 million, respectively. The fair values of interest-rate related derivatives and hedged items are generally estimated using standard valuation techniques such as discounted cash flow analysis 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 related derivatives and 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 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 related 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 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

 Kansas City, Missouri

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

 STATEMENTS OF CONDITION

 (In thousands, except par value)

 ASSETS

 Cash and due from banks (Note 1)

 $
 $

 Interest-bearing deposits (Note 3)

 Securities purchased under agreements to resell (Notes 3, 10)

 Federal funds sold (Note 3)

 Investment securities:

 Trading securities (Note 3)

 Available-for-sale securities, amortized cost of $ 13,197,724 and $ 11,872,397 (Note 3)

 Held-to-maturity securities, fair value of $ 217,476 and $ 260,653 (Note 3)

 Total investment securities
 13,717,408
 12,926,857

 Advances (Notes 4, 16)

 41,652,081
 45,444,769

 Mortgage loans held for portfolio, net of allowance for credit losses of $ 4,033 and $ 5,531 (Notes 5, 16)

 8,949,433
 8,352,713

 Accrued interest receivable
 249,199
 204,243

 Derivative assets, net (Notes 6, 10)

 Other assets (Note 15)

 82,547
 81,985

 TOTAL ASSETS
 $
 75,900,980
 $
 74,946,985

 LIABILITIES

 Deposits (Notes 7, 16)

 $
 989,021
 $
 752,200

 Consolidated obligations, net:

 Discount notes (Notes 8, 15)

 14,417,047
 20,743,249

 Bonds (Notes 8, 15)

 55,864,506
 49,047,489

 Total consolidated obligations, net
 70,281,553
 69,790,738

 Mandatorily redeemable capital stock (Note 11)

 3,225

 Accrued interest payable
 347,843
 361,840

 Affordable Housing Program payable (Note 9)

 102,494
 77,794

 Derivative liabilities, net (Notes 6, 10)

 6,131

 Other liabilities (Notes 13, 15)

 70,984
 72,654

 TOTAL LIABILITIES
 71,801,251
 71,056,333

 Commitments and contingencies (Note 15)

 STATEMENTS OF CONDITION

 (In thousands, except par value)

 CAPITAL

 Capital stock outstanding - putable:

 Class A ($ 100 par value; 4,649 and 2,789 shares issued and outstanding) (Notes 11, 16)

 $
 464,904
 $
 278,887

 Class B ($ 100 par value; 21,667 and 23,288 shares issued and outstanding) (Notes 11, 16)

 2,166,701
 2,328,796

 Total capital stock
 2,631,605
 2,607,683

 Retained earnings:

 Unrestricted
 1,109,059
 989,457

 Restricted (Note 11)

 499,027
 412,483

 Total retained earnings
 1,608,086
 1,401,940

 Accumulated other comprehensive income (loss) (Note 12)

 ( 139,962)
 ( 118,971)

 TOTAL CAPITAL
 4,099,729
 3,890,652

 TOTAL LIABILITIES AND CAPITAL
 $
 75,900,980
 $
 74,946,985

 STATEMENTS OF INCOME

 2024
 2023
 2022

 INTEREST INCOME:

 $
 2,434,890
 $
 2,409,840
 $
 742,694

 144,639
 143,330
 33,548

 153,604
 121,367
 42,895

 241,903
 221,114
 68,392

 Trading securities
 22,072
 34,196
 57,899

 Available-for-sale securities
 784,787
 594,548
 197,809

 Held-to-maturity securities
 13,937
 15,982
 8,570

 Mortgage loans held for portfolio
 322,061
 261,352
 228,583

 Other
 1,430

 Total interest income
 4,118,605
 3,803,159
 1,381,275

 INTEREST EXPENSE:

 40,415
 32,921
 10,342

 Consolidated obligations:

 Discount notes
 888,622
 1,102,702
 368,075

 Bonds
 2,627,916
 2,206,160
 638,751

 Mandatorily redeemable capital stock

 Other
 1,243
 1,311
 1,109

 Total interest expense
 3,558,386
 3,343,108
 1,018,284

 NET INTEREST INCOME
 560,219
 460,051
 362,991

 Provision (reversal) for credit losses on mortgage loans
 ( 1,636)
 ( 641)

 NET INTEREST INCOME AFTER LOAN LOSS PROVISION (REVERSAL)

 561,855
 460,692
 362,281

 OTHER INCOME (LOSS):

 Net gains (losses) on trading securities
 16,962
 19,554
 ( 112,548)

 Net gains (losses) on sale of held-to-maturity securities
 —
 —
 ( 89)

 Net gains (losses) on derivatives
 5,606
 14,923
 86,492

 Standby bond purchase agreement commitment fees
 2,968
 2,815
 2,642

 Letters of credit fees
 9,212
 8,218
 6,558

 Other
 2,392
 2,437
 3,003

 Total other income (loss)
 37,140
 47,947
 ( 13,942)

 STATEMENTS OF INCOME

 2024
 2023
 2022

 OTHER EXPENSES:

 Compensation and benefits
 $
 52,506
 $
 49,870
 $
 42,479

 Other operating
 30,017
 25,422
 21,011

 Federal Housing Finance Agency
 5,912
 5,963
 5,599

 Office of Finance
 5,104
 4,441
 4,455

 Mortgage loans transaction service fees
 6,904
 6,413
 6,079

 Voluntary housing and community investment program contributions

 16,498
 3,000
 —

 Other
 1,231
 1,899
 1,231

 Total other expenses
 118,172
 97,008
 80,854

 INCOME BEFORE ASSESSMENTS
 480,823
 411,631
 267,485

 Affordable Housing Program
 48,101

 NET INCOME
 $
 $
 $

 STATEMENTS OF COMPREHENSIVE INCOME

 2024
 2023
 2022

 Net income
 $
 $
 $

 Other comprehensive income (loss):

 Net unrealized gains (losses) on available-for-sale securities
 ( 21,161)
 ( 34,501)
 ( 159,132)

 Defined benefit pension plan

 ( 200)
 2,547

 Total other comprehensive income (loss)
 ( 20,991)
 ( 34,701)
 ( 156,585)

 TOTAL COMPREHENSIVE INCOME (LOSS)
 $
 411,731
 $
 335,766
 $
 84,151

 STATEMENTS OF CAPITAL

 Capital Stock1

 Retained Earnings
 Accumulated
 Total Capital

 Other

 Class A
 Class B
 Total
 Comprehensive

 Shares
 Shares
 Shares
 Unrestricted
 Restricted
 Total
 Income (Loss)

 Balance at December 31, 2021
 2,342
 $
 234,190
 12,651
 $
 1,265,111
 14,993
 $
 1,499,301
 $
 852,408
 $
 290,242
 $
 1,142,650
 $
 72,315
 $
 2,714,266

 Comprehensive income
 192,589
 48,147
 ( 156,585)
 84,151

 Proceeds from issuance of capital stock
 2,380
 38,060
 3,806,000
 38,084
 3,808,380
 3,808,380

 Repurchase/redemption of capital stock
 ( 18,495)
 ( 1,849,477)
 ( 2,678)
 ( 267,833)
 ( 21,173)
 ( 2,117,310)
 ( 2,117,310)

 Net reclassification of shares to mandatorily redeemable capital stock

 ( 3,960)
 ( 396,024)
 ( 4,167)
 ( 416,668)
 ( 8,127)
 ( 812,692)
 ( 812,692)

 Net transfer of shares between Class A and Class B

 22,477
 2,247,708
 ( 22,477)
 ( 2,247,708)
 —
 —
 —

 Dividends on capital stock (Class A - 1.7 %, Class B - 7.3 %):

 Cash payment
 ( 251)
 ( 251)
 ( 251)

 Stock issued
 1,300
 130,030
 1,300
 130,030
 ( 130,030)
 ( 130,030)
 —

 Balance at December 31, 2022
 2,388
 $
 238,777
 22,689
 2,268,932
 25,077
 2,507,709
 914,716
 338,389
 1,253,105
 ( 84,270)
 3,676,544

 Comprehensive income
 296,373
 74,094
 ( 34,701)
 335,766

 Proceeds from issuance of capital stock
 4,069
 31,186
 3,118,587
 31,227
 3,122,656
 3,122,656

 Repurchase/redemption of capital stock
 ( 23,058)
 ( 2,305,768)
 ( 2,117)
 ( 211,704)
 ( 25,175)
 ( 2,517,472)
 ( 2,517,472)

 Net reclassification of shares to mandatorily redeemable capital stock

 ( 4,341)
 ( 434,167)
 ( 2,925)
 ( 292,406)
 ( 7,266)
 ( 726,573)
 ( 726,573)

 Net transfer of shares between Class A and Class B

 27,759
 2,775,976
 ( 27,759)
 ( 2,775,976)
 —
 —
 —

 Dividends on capital stock (Class A - 4.3 %, Class B - 9.1 %):

 Cash payment
 ( 269)
 ( 269)
 ( 269)

 Stock issued
 2,214
 221,363
 2,214
 221,363
 ( 221,363)
 ( 221,363)
 —

 Balance at December 31, 2023
 2,789
 278,887
 23,288
 2,328,796
 26,077
 2,607,683
 989,457
 412,483
 1,401,940
 ( 118,971)
 3,890,652

 Comprehensive income
 346,178
 86,544
 ( 20,991)
 411,731

 Proceeds from issuance of capital stock
 1,278
 21,535
 2,153,575
 21,548
 2,154,853
 2,154,853

 Repurchase/redemption of capital stock
 ( 18,238)
 ( 1,823,840)
 ( 1,644)
 ( 164,413)
 ( 19,882)
 ( 1,988,253)
 ( 1,988,253)

 Net reclassification of shares to mandatorily redeemable capital stock

 ( 3,403)
 ( 340,268)
 ( 287)
 ( 28,683)
 ( 3,690)
 ( 368,951)
 ( 368,951)

 Net transfer of shares between Class A and Class B

 23,488
 2,348,847
 ( 23,488)
 ( 2,348,847)
 —
 —
 —

 Dividends on capital stock (Class A - 4.7 %, Class B - 9.5 %):

 Cash payment
 ( 303)
 ( 303)
 ( 303)

 Stock issued
 2,263
 226,273
 2,263
 226,273
 ( 226,273)
 ( 226,273)
 —

 Balance at December 31, 2024
 4,649
 $
 464,904
 21,667
 $
 2,166,701
 26,316
 $
 2,631,605
 $
 1,109,059
 $
 499,027
 $
 1,608,086
 $
 ( 139,962)
 $
 4,099,729

 1 Putable

 STATEMENTS OF CASH FLOWS

 2024
 2023
 2022

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net income
 $
 $
 $

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

 Depreciation and amortization:

 Premiums and discounts on consolidated obligations, net
 ( 97,683)
 86,304
 145,675

 Concessions on consolidated obligations
 7,998
 5,956
 5,112

 Premiums and discounts on investments, net
 ( 45,917)
 ( 28,549)
 ( 1,522)

 Premiums, discounts and commitment fees on advances, net
 ( 2,719)
 ( 2,865)
 ( 3,713)

 Premiums, discounts and deferred loan costs on mortgage loans, net
 13,251
 12,930
 20,119

 Fair value adjustments on hedged assets or liabilities
 ( 4,590)
 ( 3,404)
 1,421

 Premises, software and equipment
 3,243
 3,121
 3,172

 Other
 —
 —

 Provision (reversal) for credit losses on mortgage loans
 ( 1,636)
 ( 641)

 Other adjustments, net
 ( 9)
 ( 19)

 Net (gains) losses on trading securities
 ( 16,962)
 ( 19,554)
 112,548

 Net change in derivatives and hedging activities

 4,284
 ( 198,493)
 693,354

 (Increase) decrease in accrued interest receivable
 ( 43,244)
 ( 18,096)
 ( 111,073)

 Change in net accrued interest included in derivative assets
 4,887
 ( 23,379)
 ( 41,566)

 (Increase) decrease in other assets
 ( 3,140)
 ( 640)
 ( 1,213)

 Increase (decrease) in accrued interest payable
 ( 14,664)
 164,670
 154,524

 Change in net accrued interest included in derivative liabilities
 3,479
 ( 19,945)
 9,643

 Increase (decrease) in Affordable Housing Program liability
 24,699
 24,159
 11,411

 Increase (decrease) in other liabilities
 ( 1,476)
 1,935
 2,147

 Total adjustments
 ( 169,867)
 ( 16,500)
 1,000,979

 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
 262,855
 353,967
 1,241,715

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Net (increase) decrease in interest-bearing deposits
 $
 ( 410,220)
 $
 547,558
 $
 ( 1,789,189)

 Net (increase) decrease in securities purchased under resale agreements
 ( 1,275,000)
 ( 1,525,000)
 ( 850,000)

 Net (increase) decrease in Federal funds sold
 ( 1,495,000)
 1,670,000
 ( 390,000)

 Proceeds from sale of trading securities

 —
 —
 12,448

 Proceeds from maturities of and principal repayments on trading securities

 485,607
 532,399
 3,583,506

 Purchases of trading securities
 —
 —
 ( 2,790,000)

 Proceeds from maturities of and principal repayments on available-for-sale securities

 1,186,868
 1,765,339
 1,300,457

 Purchases of available-for-sale securities
 ( 2,467,853)
 ( 4,008,018)
 ( 3,611,488)

 Proceeds from sale of held-to-maturity securities
 —
 —
 19,930

 Proceeds from maturities of and principal repayments on held-to-maturity securities

 44,952
 80,597
 80,745

 STATEMENTS OF CASH FLOWS

 2024
 2023
 2022

 Advances repaid
 256,562,580
 906,019,610
 608,948,836

 Advances originated
 ( 252,767,970)
 ( 907,035,196)
 ( 630,170,723)

 Principal collected on mortgage loans
 877,368
 758,442
 1,178,272

 Purchases of mortgage loans
 ( 1,485,427)
 ( 1,219,320)
 ( 977,459)

 Net proceeds from sale of foreclosed assets

 Other investing activities
 —
 —
 1,877

 Purchases of premises, software and equipment
 ( 1,486)
 ( 4,759)
 ( 2,093)

 NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
 ( 744,940)
 ( 2,418,068)
 ( 25,454,076)

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Net increase (decrease) in deposits
 $
 247,700
 $
 18,345
 $
 ( 184,008)

 Net proceeds from issuance of consolidated obligations:

 Discount notes
 610,532,007
 481,241,221
 395,436,136

 Discount notes transferred from other FHLBanks
 610,000
 —
 —

 Bonds
 70,219,922
 52,165,645
 45,857,494

 Payments for maturing, retired and transferred consolidated obligations:

 Discount notes
 ( 616,771,258)
 ( 485,397,335)
 ( 377,359,026)

 Discount notes transferred to other FHLBanks
 ( 610,000)
 —

 Bonds
 ( 63,570,605)
 ( 44,865,213)
 ( 40,408,800)

 Bonds transferred to other FHLBanks
 —
 ( 999,987)
 —

 Net interest payments received (paid) for financing derivatives
 23,694
 23,226
 ( 7,132)

 Proceeds from issuance of capital stock
 2,154,853
 3,122,656
 3,808,380

 Payments for repurchase/redemption of capital stock
 ( 1,988,253)
 ( 2,517,472)
 ( 2,117,310)

 Payments for repurchase of mandatorily redeemable capital stock
 ( 366,159)
 ( 726,618)
 ( 812,999)

 Cash dividends paid
 ( 303)
 ( 269)
 ( 251)

 NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
 481,598
 2,064,199
 24,212,484

 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
 ( 487)

 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
 25,964
 25,841

 CASH AND CASH EQUIVALENTS AT END OF PERIOD
 $
 $
 $
 25,964

 Supplemental disclosures:

 Interest paid
 $
 1,698,539
 $
 1,166,760
 $
 308,581

 Notes to Financial Statements
 For the years ended December 31, 2024, 2023 and 2022

 BACKGROUND

 Federal Home Loan Bank of Topeka (FHLBank or FHLBank Topeka), a federally chartered corporation, is one of 11 district Federal Home Loan Banks (FHLBanks). The FHLBanks are government-sponsored enterprises (GSE) that were organized under the Federal Home Loan Bank Act of 1932, as amended (Bank Act), to serve the public by enhancing the availability of credit for residential mortgages and targeted community development and provide a readily available, competitively-priced source of funds to their members. FHLBank is a cooperative whose member institutions own substantially all of the outstanding capital stock of FHLBank and generally receive dividends on their stock investments. Regulated financial depositories, insurance companies, and community development financial institutions engaged in residential housing finance whose principal place of business is located in FHLBank's district states of Colorado, Kansas, Nebraska, or Oklahoma are eligible to apply for membership. Community Development Financial Institutions (CDFIs) meeting certain membership regulation standards are also eligible to become members. State and local housing associates that meet certain statutory and regulatory criteria may also borrow from FHLBank. While eligible to borrow, state and local housing associates are not members FHLBank and, as such, do not hold capital stock.

 All members are required to purchase stock in the FHLBank located in their district in accordance with the capital plan of that particular FHLBank. Under FHLBank Topeka's capital plan, members must own capital stock in FHLBank based on the amount of their total assets. Each member is also required to purchase activity-based capital stock as it engages in certain business activities with FHLBank, including advances, Acquired Member Assets (AMA), and letters of credit. Former members with outstanding transactions with FHLBank are required to maintain their investments in FHLBank capital stock until the transactions mature or are repaid. As a result of these requirements, FHLBank conducts business with members in the ordinary course of its business. For financial reporting purposes, FHLBank defines related parties as those members: (1) with investments in excess of 10 percent of FHLBank's total regulatory capital stock outstanding, which includes mandatorily redeemable capital stock; or (2) with an officer or director serving on FHLBank's board of directors. See Note 16 – Transactions with Stockholders for more information on related party transactions.

 The FHLBanks are supervised and regulated by the Federal Housing Finance Agency (FHFA), an independent agency in the executive branch of the U.S. Federal government. The FHFA's stated mission is to ensure the housing GSEs fulfill their mission by operating in a safe and sound manner to serve as a reliable source of liquidity and funding for housing finance and community investment. Each FHLBank is operated as a separate entity and has its own management, employees, and board of directors. The FHLBanks do not sponsor any special purpose entities or any other type of off-balance sheet conduits.

 The FHLBanks have established a joint office called the Office of Finance to facilitate the issuance and servicing of the debt instruments of the FHLBanks, known as consolidated obligation bonds and consolidated obligation discount notes (collectively referred to as consolidated obligations) and to prepare the combined quarterly and annual financial reports of the FHLBanks. As provided by the Bank Act and applicable regulations, consolidated obligations are backed only by the financial resources of the FHLBanks. Consolidated obligations are the primary source of funds for the FHLBanks in addition to deposits, other borrowings, and capital stock issued to members. FHLBank primarily uses these funds to provide advances to members and to acquire mortgage loans from members through the Mortgage Partnership Finance (MPF) Program. "Mortgage Partnership Finance" and "MPF" are registered trademarks of FHLBank of Chicago. In addition, FHLBank offers correspondent services to members and other financial institutions such as wire transfer, security safekeeping, and cash management.

 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis of Presentation: The financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP).

 Use of Estimates: The preparation of financial statements under GAAP requires management to make estimates and assumptions as of the date of the financial statements in determining the reported amounts of assets, liabilities, and estimated fair values and in determining the disclosure of any contingent assets or liabilities. Estimates and assumptions by management also affect the reported amounts of income and expense during the reporting period. The most significant of these estimates include the fair value of derivatives. Many of the estimates and assumptions, including those used in financial models, are based on financial market conditions as of the date of the financial statements. Because of the volatility of the financial markets, as well as other factors that affect management estimates, actual results may vary from these estimates.

 Fair Values: The fair value amounts, recorded on the Statements of Condition and presented in the note disclosures for the periods presented, have been determined by FHLBank using available market and other pertinent information and reflect FHLBank's best judgment of appropriate valuation methods. Although FHLBank uses its best judgment to estimate the fair value of these 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 14 – Fair Values for more information.

 Financial Instruments Meeting Netting Requirements: FHLBank presents certain financial instruments, including derivatives, repurchase agreements and securities purchased under agreements to resell, on a net basis when it has a legal right of offset and all other requirements for netting are met (collectively referred to as the netting requirements). For these financial instruments, FHLBank has elected to offset its asset and liability positions, as well as cash collateral received or pledged, when it has met the netting requirements. The net exposure for these financial instruments can change on a daily basis; 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 netting requirements, any excess cash collateral received or pledged is recognized as a derivative liability or derivative asset. See Note 6 – Derivatives and Hedging Activity and Note 10 – Assets and Liabilities Subject to Offsetting for additional information.

 Cash and Due from Banks: For purposes of the Statements of Condition and Statements of Cash Flows, FHLBank considers cash on hand and non-interest-bearing deposits in banks as cash and cash equivalents.

 Interest-bearing Deposits, Securities Purchased Under Agreements to Resell and Federal Funds Sold: FHLBank invests in interest-bearing deposits, securities purchased under agreements to resell and Federal funds sold. FHLBank treats securities purchased under agreements to resell as short-term collateralized loans. Federal funds sold consist of short-term unsecured loans generally transacted with counterparties that FHLBank considers to be of investment quality. Interest-bearing deposits, securities purchased under agreements to resell and Federal funds sold provide short-term liquidity and are carried at cost. Accrued interest receivable is recorded separately on the Statements of Condition. Interest-bearing deposits and Federal funds sold are evaluated for credit losses on a quarterly basis. If applicable, an allowance for credit losses is recorded with a corresponding adjustment to the provision (reversal) for credit losses.

 FHLBank uses the collateral maintenance provision practical expedient, which allows expected credit losses to be measured based on the difference between the fair value of the collateral and the investment's amortized cost, for securities purchased under agreements to resell. Consequently, a credit loss would be recognized if there is a collateral shortfall that FHLBank 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.

 Investment Securities: FHLBank classifies investments as trading, available-for-sale, and held-to-maturity at the date of acquisition. Purchases and sales of securities are recorded on a trade date basis.

 Trading: Securities classified as trading are either: (1) held for liquidity purposes; (2) economically swapped and classified as trading to provide a fair value offset to the gains (losses) on the interest rate swaps tied to the securities; or (3) acquired as asset/liability management tools and carried at fair value. FHLBank records changes in the fair value of these securities through other income (loss) as net gains (losses) on trading securities.

 FHLBank's Risk Management Policy (RMP) prohibits active trading of these securities with the intent of realizing gains. FHFA regulation limits credit risk arising from these instruments by prohibiting certain instruments identified as not investment quality. While FHLBank classifies certain securities as trading for financial reporting purposes, it does not actively trade any of these securities, reflecting management's intent that these securities be available as a source of liquidity if needed but are otherwise held until maturity. Short-term money market investments with maturities of three months or less are acquired and classified as trading securities primarily for liquidity purposes. These short-term money market investments are periodically sold to meet FHLBank's cash flow needs.

 Available-for-Sale: Securities that are not classified as trading or held-to-maturity are classified as available-for-sale and are carried at fair value. The change in fair value of available-for-sale securities is recorded in other comprehensive income (loss) (OCI). Accrued interest receivable is recorded separately on the Statements of Condition.

 For available-for-sale securities in hedging relationships that qualify as fair value hedges, FHLBank records both the changes in the fair value of the designated derivative as well as the changes in the fair value of the investment attributable to the risk being hedged in interest income on available-for-sale securities, and records the remainder of the change in the fair value of the investment in OCI as net unrealized gains (losses) on available-for-sale securities.

 For securities classified as available-for-sale, FHLBank evaluates an individual security for impairment on a quarterly basis by comparing the security's fair value to its amortized cost. Impairment exists 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, FHLBank considers whether there would be a shortfall in receiving all cash flows contractually due. When a shortfall is considered possible, FHLBank 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 management intends to sell an impaired security classified as available-for-sale, 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 earnings as net gains (losses) on investment securities. For those securities that management does not intend to sell or it is more likely than not that management will not be required to sell prior to recovery of the amortized cost basis, the credit portion of the impairment is recognized as an allowance for credit losses while the non-credit portion is recognized as net unrealized gains (losses) on available-for-sale securities in OCI.

 Held-to-Maturity: Securities that FHLBank has both the ability and intent to hold to maturity are classified as held-to-maturity and are carried at amortized cost, which is original cost 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 FHLBank 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, including: (1) evidence of a significant deterioration in the issuer's creditworthiness; (2) a change in statutory or regulatory requirements significantly modifying either what constitutes a permissible investment or the maximum level of investments in certain kinds of investments, thereby causing FHLBank to dispose of a held-to-maturity investment; (3) a significant increase by a regulator in FHLBank's capital requirements that causes FHLBank to downsize by selling held-to-maturity investments; or (4) a significant increase in the risk weights of debt securities used for regulatory risk-based capital purposes. FHLBank considers the following situations to be a maturity for purposes of assessing ability and intent to hold to maturity:
 The sale of the security is near enough to maturity (e.g., 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
 The sale of a security occurs after FHLBank has already collected a substantial portion (at least 85 percent) of the principal outstanding at acquisition either due to prepayments on the debt security or to scheduled payments on a debt security payable in equal installments (both principal and interest) over its term.

 Held-to-maturity securities are evaluated quarterly for expected credit losses on a pool 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.

 Premiums and Discounts: FHLBank computes the amortization of purchased premiums and accretion of purchased discounts on mortgage-backed securities (MBS) using the level-yield method over the estimated cash flows of the securities. This method requires a retrospective adjustment of the effective yield each time FHLBank receives a principal repayment or changes the estimated remaining cash flows as if the actual principal repayments and new estimated cash flows had been known since the original acquisition dates of the securities. FHLBank computes the amortization of premiums and accretion of discounts on other investments using the level-yield method to the contractual maturities of the securities.

 Gains and Losses on Sales: Gains and losses on the sales of investment securities are computed using the specific identification method and are included in other income (loss).

 Advances: FHLBank records advances at amortized cost, which is net of premiums, discounts, and fair value basis adjustments. FHLBank amortizes the premiums and accretes the discounts on advances to interest income using the level-yield method. FHLBank records interest on advances to interest income as earned. Accrued interest receivable is recorded separately on the Statements of Condition. Advances 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.

 Advance Modifications: When FHLBank funds a new advance concurrently with or within a short period of time before or after the prepayment of an existing advance, FHLBank 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. FHLBank 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 10 percent difference in the cash flows or if FHLBank concludes the differences between the advances are more than minor based on qualitative factors, the advance is accounted for as a new advance. Otherwise, the new advance is accounted for as a modification.

 Prepayment Fees: FHLBank charges a borrower a prepayment fee when the borrower prepays certain advances before the original maturity. FHLBank records prepayment fees net of basis adjustments related to hedging activities included in the carrying value of the advance as advance interest income in the Statements of Income.

 If a new advance does not qualify as a modification of an existing advance, the existing advance is treated as an advance termination and any prepayment fee, net of hedging adjustments, is recorded to advance interest income in the Statements of Income.

 If a new advance qualifies as a modification of an existing advance, any prepayment fee, net of hedging adjustments, is deferred, recorded in the basis of the modified advance as a discount, and amortized using a level-yield methodology over the life of the modified advance to advance interest income. If the modified advance is hedged and meets hedge accounting requirements, the modified advance is marked to a benchmark fair value and subsequent fair value changes attributable to the hedged risk are recorded in advance interest income.

 Mortgage Loans Held for Portfolio: FHLBank 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. These mortgage loans are recorded at amortized cost, which is the principal amount outstanding, net of premiums, discounts, deferred loan fees, hedging adjustments, charge-offs, and other fees. Accrued interest receivable is recorded separately on the Statements of Condition. An allowance for expected credit losses is recorded with a corresponding adjustment to the provision (reversal) for credit losses. FHLBank does not purchase mortgage loans with credit deterioration at the time of purchase.

 Quarterly, FHLBank measures expected credit losses on mortgage loans on a collective basis, pooling loans with similar risk characteristics. When 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. In determining the allowance for credit losses, FHLBank measures the expected loss over the estimated remaining life of a mortgage loan, which also considers how FHLBank's credit enhancements mitigate credit losses. If a loan is purchased at a discount, the discount does not offset the allowance for credit losses. FHLBank includes estimates of expected recoveries within the allowance for credit losses.

 The allowance excludes uncollectible accrued interest receivable, as FHLBank writes off accrued interest receivable by reversing interest income if a mortgage loan is placed on nonaccrual status.

 Premiums and Discounts: FHLBank defers and amortizes/accretes mortgage loan origination fees (agent fees) and premiums and discounts paid to and received from participating financial institutions (PFI) as interest income using the level-yield method over the contractual lives of the loans. This method uses the cash flows required by the loan contracts, as adjusted for actual prepayments, to apply the interest method. The contractual method does not utilize estimates of future prepayments of principal.

 Credit Enhancement Fees: The credit enhancement obligation (CE obligation) is an obligation on the part of the PFI that ensures the retention of credit risk on loans it originates on behalf of or sells to FHLBank. The amount of the CE obligation is determined at the time of purchase so that any losses in excess of the CE obligation for each pool of mortgage loans purchased approximate those experienced by an investor in an investment-grade MBS. As a part of the methodology used to determine the amount of credit enhancement necessary, FHLBank analyzes the risk characteristics of each mortgage loan using a model licensed from a Nationally Recognized Statistical Rating Organization (NRSRO). FHLBank uses the model to evaluate loan data provided by the PFI as well as other relevant information.

 FHLBank pays the PFI a credit enhancement fee (CE fee) for managing this portion of the credit risk in the pool of loans. CE fees are paid monthly based on the remaining unpaid principal balance of the loans in a master commitment. The required CE obligation amount may vary depending on the various product alternatives selected by the PFI. CE fees paid to PFIs are recorded as an offset to mortgage loan interest income. To the extent FHLBank experiences a loss in a master commitment, FHLBank may be able to recapture future performance-based CE fees paid to the PFIs to offset these losses.

 Other Fees: FHLBank may receive other non-origination fees, such as delivery commitment extension fees and pair-off fees as part of the mark-to-market on derivatives to which they are related or as part of the loan basis, as applicable. Delivery commitment extension fees are received when a PFI requires an extension of the delivery commitment period beyond the original stated expiration. These fees compensate FHLBank for lost interest as a result of late funding and represent the member purchasing a derivative from FHLBank. Pair-off fees are received from the PFI when the amount funded is more than or less than a specific percentage range of the delivery commitment amount. These fees compensate FHLBank for hedge costs associated with under-delivery or over-delivery. To the extent that pair-off fees relate to under-deliveries of loans, they are included in the mark-to-market of the related delivery commitment derivative. If they relate to over-deliveries, they represent purchase price adjustments to the related loans acquired and are recorded as a part of the carrying value of the loan.

 Nonaccrual Loans: A past due loan is one where the borrower has failed to make a full payment of principal and interest within 30 days of its due date. FHLBank places a conventional mortgage loan on nonaccrual status if it is determined that either: (1) the collection of interest or principal is doubtful; or (2) interest or principal is past its due date for 90 days or more, except when the loan is well-secured (e.g., through credit enhancements) and in the process of collection. FHLBank does not place government-guaranteed or government-insured mortgage loans on nonaccrual 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. For mortgage loans placed on nonaccrual status, accrued but uncollected interest is reversed against interest income. FHLBank records cash payments received on nonaccrual loans first as interest income and then as a reduction of principal as specified in the contractual agreement unless the collection of the remaining principal amount due is considered doubtful. If the collection of the remaining principal amount due is considered doubtful, then cash payments received would be applied first solely to principal until the remaining principal amount due is expected to be collected and then as a recovery of any charge-off, if applicable, followed by recording interest income. A loan on nonaccrual status may be restored to accrual status when: (1) none of its contractual principal and interest is due and unpaid, and FHLBank expects repayment of the remaining contractual principal and interest; or (2) it otherwise becomes well-secured and in the process of collection.

 Mortgage Loan Modifications: Generally, FHLBank 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.

 Collateral-dependent Loans: A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be substantially provided through the sale of the underlying collateral. A loan considered collateral-dependent is measured for credit loss based on the fair value of the underlying property less estimated selling costs, with any shortfall recognized as an allowance for loan loss or charged off.

 Charge-off Policy: A charge-off is recorded if it is deemed probable that the amortized cost and any applicable accrued interest in a loan will not be recovered. FHLBank 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 notification of a claim against any of the credit enhancements. FHLBank charges off the portion of outstanding conventional mortgage loan balances in excess of fair value of the underlying property, less estimated cost to sell, for loans that are 180 days or more delinquent and for certain loans for which the borrower has filed for bankruptcy.

 Real Estate Owned: Real estate owned (REO) includes assets that have been received in satisfaction of debt through foreclosures. REO is initially recorded at fair value less estimated selling costs and is subsequently carried at the lower of that amount or current fair value less estimated selling costs. FHLBank recognizes a charge-off to the allowance for credit losses if the fair value of the REO less estimated selling costs is less than the amortized cost in the loan at the date of transfer from loans to REO. Any subsequent gains, losses and carrying costs are included in other expense in the Statements of Income. REO is recorded in other assets on the Statements of Condition.

 Derivatives and Hedging Activities: Generally, FHLBank enters into derivatives primarily to manage exposure to changes in interest rates. The accounting guidance related to derivatives and hedging activities is complex and contains prescriptive documentation requirements. All derivatives are recognized on the Statements of Condition at their fair values and are reported as either derivative assets or derivative liabilities, net of cash collateral, and accrued interest receivable from or pledged by clearing agents and/or counterparties. The fair values of derivatives are netted by clearing agent or counterparty when the netting requirements have been met. If these netted amounts are positive, they are classified as an asset and, if negative, they are classified as a liability. Cash flows associated with a derivative are reflected as cash flows from operating activities in the Statements of Cash Flows unless the derivative meets the criteria to be a financing derivative.

 FHLBank utilizes two Derivative Clearing Organizations (Clearinghouses) for all cleared derivative transactions, LCH Ltd and CME Clearing. At both Clearinghouses, variation margin is characterized as daily settlement payments and initial margin is considered cash collateral.

 Derivative Designations: Each derivative is designated as one of the following:
 a qualifying fair value hedge of the change in fair value of: (1) a recognized asset or liability, or (2) an unrecognized firm commitment; or
 a non-qualifying hedge (an economic hedge) for asset/liability management purposes.

 In compliance with accounting standards, primarily Accounting Standards Codification (ASC) 815, the accounting for derivatives requires FHLBank to make the following assumptions and estimates: (1) assessing whether the hedging relationship qualifies for hedge accounting; (2) assessing whether an embedded derivative should be bifurcated; (3) calculating the effectiveness of the hedging relationship; (4) evaluating exposure associated with counterparty credit risk; and (5) estimating the fair value of the derivatives.

 Accounting for Qualifying Hedges: Hedging relationships that meet certain criteria, including, but not limited to, formal documentation of the hedging relationship and an expectation to be highly effective, qualify for hedge accounting. Two approaches to hedge accounting include:
 Long haul hedge accounting - The application of long haul hedge accounting requires FHLBank to assess, retrospectively and prospectively, on at least a quarterly basis, whether the derivative and hedged item have been and are expected to be highly effective in offsetting changes in fair value attributable to the hedged risk; and
 Shortcut hedge accounting - Under the shortcut method of hedge accounting, the entire change in fair value of the interest rate swap is deemed perfectly effective at achieving offsetting changes in the fair value of the hedged asset or liability, implying that the hedge between the hedged item and hedging instrument is perfectly correlated. An interest rate swap transaction is subject to more stringent criteria to qualify for shortcut hedge accounting. FHLBank has elected to document at hedge inception a quantitative method to assess hedge effectiveness for its shortcut hedging relationships for use in the event that the use of the shortcut method is no longer appropriate.

 Typically, derivatives and hedged items are executed simultaneously, and, as applicable, FHLBank designates the hedged item in a qualifying hedging relationship at the trade date. In many hedging relationships, FHLBank may designate the 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. FHLBank defines market settlement conventions for advances and consolidated obligation discount notes to be five business days or less and for consolidated obligation bonds to be thirty calendar days or less, using a next business day convention. FHLBank then records the changes in fair value of the derivative and the hedged item beginning on the trade date.

 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 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. Net gains (losses) on derivatives and hedging activities for qualifying hedges recorded in net interest income include unrealized and realized gains (losses), which include net interest settlements.

 Accounting for Non-Qualifying Hedges: FHLBank defines an economic hedge as a derivative hedging specific or non-specific underlying assets, liabilities or firm commitments that does not qualify or was not designated for hedge accounting but is an acceptable hedging strategy under FHLBank's RMP. These economic hedging strategies also comply with FHFA regulatory requirements prohibiting speculative derivative transactions. An economic hedge introduces the potential for earnings volatility because FHLBank recognizes the net interest settlement and the change in fair value of these derivatives in other income (loss) as net gains (losses) on derivatives, with no offsetting fair value adjustments for the assets, liabilities or firm commitments.

 Accrued Interest Receivables and Payables: The net settlements of interest receivables and payables related to derivatives designated in fair value hedging relationships are recognized as adjustments to the interest income or expense of the designated underlying investment securities, advances, consolidated obligations or other financial instruments, thereby affecting the reported amount of net interest income on the Statements of Income. The net settlements of interest receivables and payables on economic hedges are recognized in other income (loss) as net gains (losses) on derivatives.

 Discontinuance of Hedge Accounting: FHLBank discontinues hedge accounting prospectively when: (1) it determines that the derivative is no longer highly effective in offsetting changes in the fair value of a hedged item attributable to the hedged risk (including hedged items such as firm commitments); (2) the derivative and/or the hedged item expires or is sold, terminated or exercised; (3) a hedged firm commitment no longer meets the definition of a firm commitment; or (4) management determines that designating the derivative as a hedging instrument is no longer appropriate.

 If the derivative fails the effectiveness test any time during its life, the hedge relationship no longer qualifies for hedge accounting and FHLBank marks the derivative to fair value through current period earnings without any offsetting changes in fair value related to the underlying hedged item and begins amortizing the cumulative basis adjustment on the hedged item into earnings over the remaining life of the hedged item using the level-yield method. When hedge accounting is discontinued and the derivative remains outstanding, FHLBank carries the derivative at fair value on its Statements of Condition, recognizing changes in the fair value of the derivative in other income (loss) as net gains (losses) on derivatives. When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, FHLBank continues to carry the derivative on its Statements of Condition at fair value, removing any asset or liability that was recorded to recognize the firm commitment and recording it as a gain or loss in current period earnings.

 Embedded Derivatives: FHLBank may issue debt, make advances, or purchase financial instruments in which a derivative instrument is embedded. Upon execution of these transactions, FHLBank assesses whether the economic characteristics of the embedded derivative are clearly and closely related to the economic characteristics of the remaining component of the advance, debt 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. When FHLBank determines that: (1) the embedded derivative has economic characteristics that are not clearly and closely related to the economic characteristics of the host contract; and (2) 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 a stand-alone derivative instrument pursuant to an economic hedge. However, if the entire contract (the host contract and the embedded derivative) is to be measured at fair value, with changes in fair value reported in current period earnings (such as an investment security classified as trading), or if FHLBank cannot reliably identify and measure the embedded derivative for purposes of separating that derivative from its host contract, the entire contract is carried on the Statements of Condition at fair value and no portion of the contract is designated as a hedging instrument.

 Premises, Software and Equipment: Premises, software, and equipment are included in other assets on the Statements of Condition. FHLBank records premises, software, and equipment at cost less accumulated depreciation and amortization. Depreciation is computed on the straight-line method over the estimated useful lives of the assets ranging from 3 to 40 years. Leasehold improvements are amortized on the straight-line basis over the shorter of the estimated useful life of the improvement or the remaining term of the lease. Improvements and major renewals are capitalized, and ordinary maintenance and repairs are expensed as incurred. The cost of purchased software and certain software development costs for internal use are capitalized and amortized over future periods. Gains and losses on disposals are included in other income (loss) on the Statements of Income.

 As of December 31, 2024 and 2023, premises, software, and equipment were $ 36,714,000 and $ 38,588,000, which was net of the accumulated depreciation and amortization of $ 35,871,000 and $ 35,381,000, respectively. For the years ended December 31, 2024, 2023, and 2022, the depreciation and amortization expense for premises, software and equipment was $ 3,243,000, $ 3,121,000 and $ 3,172,000, respectively.

 Consolidated Obligations: Consolidated obligations are recorded at amortized cost, which represents the funded amount, adjusted for premiums, discounts, concessions, and fair value hedging adjustments.

 Discounts and Premiums: Consolidated obligation discounts are accreted and premiums are amortized to interest expense using the level-yield method over the contractual maturities of the corresponding debt.

 Concessions: Amounts paid to dealers in connection with sales of consolidated obligations are deferred and amortized using the level-yield method over the contractual terms of the consolidated obligations. The Office of Finance prorates concession amounts to FHLBank based on the percentage of each consolidated obligation issued by the Office of Finance on behalf of FHLBank. FHLBank records concessions paid on consolidated obligations as a direct deduction from their carrying amounts, consistent with the presentation of discounts on consolidated obligations. The amortization of those concessions is included in consolidated obligation interest expense.

 Off-Balance Sheet Credit Exposures: On a quarterly basis, FHLBank evaluates off-balance sheet credit exposures for expected credit losses. If deemed necessary, an allowance for expected credit losses on off-balance sheet exposures is recorded in other liabilities with a corresponding adjustment to the provision (reversal) for credit losses.

 Mandatorily Redeemable Capital Stock: FHLBank reclassifies all stock subject to redemption from capital to liability once a member submits a written redemption request, gives notice of intent to withdraw from membership, or attains non-member status by merger or acquisition, charter termination or involuntary termination from membership, since the member shares will then meet the definition of a mandatorily redeemable financial instrument. There is no distinction as to treatment for reclassification from capital to liability between in-district redemption requests and those redemption requests triggered by out-of-district acquisitions. FHLBank does not take into consideration its members' right to cancel a redemption request in determining when shares of capital stock should be classified as a liability because the cancellation would be subject to a substantial cancellation fee. Member and non-member shares of capital stock meeting the definition of mandatorily redeemable capital stock are reclassified to a liability at fair value, which has been determined to be par value plus any estimated accrued but unpaid dividends. FHLBank's dividends are declared and paid at each quarter-end; therefore, the fair value reclassified equals par value. Dividends declared on a member's shares of capital stock for the time after classification as a liability are accrued at the expected dividend rate and reflected as interest expense in the Statements of Income. The repurchase of these mandatorily redeemable financial instruments by FHLBank are reflected as financing cash outflows in the Statements of Cash Flows once settled.

 If a member submits a written request to cancel a previously submitted written redemption request, the capital stock covered by the written cancellation request is reclassified from a liability to capital at fair value. After the reclassification, dividends on the capital stock are no longer classified as interest expense.

 Restricted Retained Earnings: The Joint Capital Enhancement Agreement, as amended, provides that FHLBank, on a quarterly basis, allocate 20 percent of its 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 1 percent of FHLBank's average balance of outstanding consolidated obligations for the calendar quarter. These restricted retained earnings are not available to pay dividends and are presented separately on the Statements of Condition.

 FHFA Expenses: A portion of the FHFA's expenses and working capital fund are allocated among the FHLBanks based on the pro rata share of the annual assessments, which are based on the ratio between each FHLBank's minimum required regulatory capital and the aggregate minimum required regulatory capital of every FHLBank.

 Office of Finance Expenses: Each FHLBank's proportionate share of Office of Finance operating and capital expenditures is calculated using a formula that is based upon the following components: (1) two-thirds based upon each FHLBank's share of total consolidated obligations outstanding; and (2) one-third based upon an equal pro rata allocation.

 Voluntary Housing and Community Investment Expenses: FHLBank records voluntary contributions to affordable housing and community investment initiatives to non-interest expense in the Statements of Income. Voluntary housing and community investment program contributions are expensed in the period they are approved by the board of directors and/or awarded.

 Affordable Housing Program (AHP) Assessments: FHLBank is required to establish, fund and administer an AHP. The AHP funds provide subsidies to members to assist in the purchase, construction or rehabilitation of housing for very low-, low- and moderate-income households. The required annual AHP funding is charged to earnings, and an offsetting liability is established.

 Segment Reporting: FHLBank operates one reportable segment that makes advances (loans) to, purchases mortgage loans from, and provides limited other financial services to members to meet the housing, business, and economic development needs of the communities FHLBank's members serve, in accordance with our housing finance and community development mission. FHLBank also administers and funds grant programs that fulfill its mission of supporting and sustaining affordable housing and strong communities. FHLBank is funded by the issuance of consolidated obligation bonds, discount notes, and capital supplied by its members. As a member-owned cooperative, FHLBank's segment presentation reflects a management approach that seeks to maintain a balance between FHLBank's mission, public purpose, and FHLBank's ability to provide adequate returns on the capital supplied by its members, which requires the chief operating decision maker (CODM), FHLBank's President and Chief Executive Officer, to have a consolidated view of FHLBank's results and asset allocation. For additional information regarding other items reported to the CODM, including significant expenses, refer to FHLBank's Statements of Income, Statements of Condition, and the Notes to Financial Statements. Further, FHLBank is required to be in compliance with regulatory metrics based upon consolidated asset, liability, and capital balances, including FHFA's core mission achievement (CMA) guidance, which requires FHLBank to be strategically mission-oriented at a consolidated level. As such, FHLBank does not manage assets by operating segments.

 Income before assessments is the primary performance metric used by the CODM in that it determines the annual commitment to our Affordable Housing and Community Investment programs, is a measure of product utilization, and is a consideration in the return of capital to members in the form of dividends. All financial segment information required by the authoritative guidance can be found in the financial statements and related footnotes.

 NOTE 2 – RECENTLY ISSUED ACCOUNTING STANDARDS AND INTERPRETATIONS AND CHANGES IN AND ADOPTIONS OF ACCOUNTING PRINCIPLES

 Segment Reporting (Accounting Standards Update (ASU) 2023-07). In July 2023, the Financial Accounting Standards Board (FASB) issued amendments to improve disclosures about a public entity's reportable segments and addresses requests from investors and other allocations of capital for additional, more detailed information about a reportable segment's expenses, including entities with a single reportable segment. The ASU is effective for FHLBank for the annual period ending December 31, 2024 and will be effective for interim periods beginning January 1, 2025. The adoption of this guidance resulted in additional disclosures related to FHLBank's reportable operating segment (see Note 1 – Summary of Significant Accounting Policies for additional information).

 Disaggregation of Income Statement Expenses (ASU 2024-03). In November 2024, the FASB issued amendments to require disclosure, in the notes to financial statements, of specified information about certain costs and expenses on an interim and annual basis. The ASU is effective for FHLBank for the annual period ended December 31, 2027 and will be effective for interim periods beginning January 1, 2028. Early adoption is permitted. The adoption of this guidance may result in additional disclosures but will not impact FHLBank's financial condition, results of operations, or cash flows.

 NOTE 3 – INVESTMENTS

 FHLBank's investment portfolio consists of interest-bearing deposits, securities purchased under agreements to resell, Federal funds sold, and debt securities.

 Interest-Bearing Deposits, Securities Purchased under Agreements to Resell, and Federal Funds Sold: FHLBank 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. These may differ from internal ratings of the investments, if applicable. As of December 31, 2024, approximately 22 percent of these overnight investments were with counterparties not rated by an NRSRO. All transactions with unrated counterparties are secured transactions.

 Federal funds sold are unsecured loans that are generally transacted on an overnight term. FHFA regulations include a limit on the amount of unsecured credit FHLBank may extend to a counterparty. As of December 31, 2024 and 2023, all investments in interest-bearing deposits and Federal funds sold were repaid or expected to be repaid according to the contractual terms. No allowance for credit losses was recorded for these assets as of December 31, 2024 and 2023. Carrying values of interest-bearing deposits and Federal funds sold exclude accrued interest receivable of $ 2,938,000 and $ 431,000, respectively, as of December 31, 2024, and $ 3,271,000 and $ 927,000, respectively, as of December 31, 2023.

 Securities purchased under agreements to resell are 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 requiring the counterparty pledge additional securities as collateral or remit an equivalent amount of cash sufficient to comply with the required collateral value). Based upon the collateral held as security and collateral maintenance provisions with its counterparties, FHLBank determined that no allowance for credit losses was needed for its securities purchased under agreements to resell as of December 31, 2024 and 2023. The carrying value of securities purchased under agreements to resell excludes accrued interest receivable of $ 638,000 and $ 1,749,000 as of December 31, 2024 and 2023, respectively.

 Debt Securities: FHLBank invests in debt securities, which are classified as either trading, available-for-sale, or held-to-maturity. FHLBank is prohibited by FHFA regulations from purchasing certain higher-risk securities, such as equity securities and debt instruments that are not investment quality, other than certain investments targeted at low-income persons or communities, but FHLBank is not required to divest instruments that experience credit deterioration after their purchase.

 FHLBank's debt securities include the following major security types, which are based on the issuer and the risk characteristics of the security:
 U.S. Treasury obligations - sovereign debt of the United States;
 GSE debentures - debentures issued by other FHLBanks, Federal National Mortgage Association (Fannie Mae), Federal Farm Credit Bank and Federal Agricultural Mortgage Corporation. GSE securities are not guaranteed by the U.S. government;
 State or local housing agency obligations - municipal bonds issued by housing finance agencies;
 U.S. obligation MBS - single-family MBS issued by Government National Mortgage Association (Ginnie Mae), which are guaranteed by the U.S. government; and
 GSE MBS - single-family and multifamily MBS issued by Fannie Mae and Federal Home Loan Mortgage Corporation (Freddie Mac).

 Trading Securities: Trading securities by major security type as of December 31, 2024 and 2023 are summarized in Table 3.1 (in thousands):

 Table 3.1

 Fair Value

 $
 $

 TOTAL
 $
 $

 Net gains (losses) on trading securities during the years ended December 31, 2024, 2023, and 2022 are shown in Table 3.2 (in thousands):

 Table 3.2

 2024
 2023
 2022

 Net gains (losses) on trading securities held as of December 31, 2024

 $
 8,007
 $
 6,881
 $
 ( 42,718)

 Net gains (losses) on trading securities sold or matured prior to December 31, 2024

 8,955
 12,673
 ( 69,830)

 NET GAINS (LOSSES) ON TRADING SECURITIES
 $
 16,962
 $
 19,554
 $
 ( 112,548)

 Available-for-sale Securities: Available-for-sale securities by major security type as of December 31, 2024 are summarized in Table 3.3 (in thousands). Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, and fair value hedge accounting adjustments, and excludes accrued interest receivable of $ 35,778,000 as of December 31, 2024.

 Table 3.3

Cost
 Gross
Gains
 Gross
Losses
 Fair
Value

 $
 3,313,012
 $
 $
 ( 75,795)
 $

 24,465
 —
 ( 286)

 3,337,477
 ( 76,081)
 3,261,402

 78,046
 —
 ( 783)

 9,782,201
 31,461
 ( 94,708)
 9,718,954

 9,860,247
 31,461
 ( 95,491)
 9,796,217

 TOTAL
 $
 13,197,724
 $
 31,467
 $
 ( 171,572)
 $

 Available-for-sale securities by major security type as of December 31, 2023 are summarized in Table 3.4 (in thousands). Amortized cost includes adjustments made to the cost basis of an investment for accretion, amortization, and fair value hedge accounting adjustments, and excludes accrued interest receivable of $ 29,768,000 as of December 31, 2023.

 Table 3.4

Cost
 Gross
Gains
 Gross
Losses
 Fair
Value

 $
 2,983,880
 $
 —
 $
 ( 46,012)
 $

 2,983,880
 —
 ( 46,012)

 109,083
 —
 ( 1,548)

 8,779,434
 32,178
 ( 103,562)
 8,708,050

 8,888,517
 32,178
 ( 105,110)
 8,815,585

 TOTAL
 $
 11,872,397
 $
 32,178
 $
 ( 151,122)
 $

 Table 3.5 summarizes the available-for-sale securities with gross unrealized losses as of December 31, 2024 (in thousands). The gross unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

 Table 3.5

 Less Than 12 Months
 12 Months or More
 Total

 Fair
Value
 Fair
Value
 Fair
Value

 $
 244,268
 $
 ( 1,144)
 $
 2,754,861
 $
 ( 74,652)
 $
 2,999,129
 $
 ( 75,796)

 ( 286)
 —
 —
 $
 $
 ( 286)

 268,447
 ( 1,430)
 2,754,861
 ( 74,652)
 3,023,308
 ( 76,082)

 —
 —
 ( 783)
 ( 783)

 2,880,112
 ( 14,624)
 3,638,445
 ( 80,083)
 6,518,557
 ( 94,707)

 2,880,112
 ( 14,624)
 3,715,708
 ( 80,866)
 6,595,820
 ( 95,490)

 TOTAL
 $
 3,148,559
 $
 ( 16,054)
 $
 6,470,569
 $
 ( 155,518)
 $
 9,619,128
 $
 ( 171,572)

 Table 3.6 summarizes the available-for-sale securities with gross unrealized losses as of December 31, 2023 (in thousands). The gross unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

 Table 3.6

 Less Than 12 Months
 12 Months or More
 Total

 Fair
Value
 Fair
Value
 Fair
Value

 $
 1,280,546
 $
 ( 10,036)
 $
 1,657,322
 $
 ( 35,976)
 $
 $
 ( 46,012)

 1,280,546
 ( 10,036)
 1,657,322
 ( 35,976)
 ( 46,012)

 71,883
 ( 366)
 35,652
 ( 1,182)
 ( 1,548)

 2,863,223
 ( 23,525)
 3,164,674
 ( 80,037)
 6,027,897
 ( 103,562)

 2,935,106
 ( 23,891)
 3,200,326
 ( 81,219)
 6,135,432
 ( 105,110)

 TOTAL
 $
 4,215,652
 $
 ( 33,927)
 $
 4,857,648
 $
 ( 117,195)
 $
 9,073,300
 $
 ( 151,122)

 The amortized cost and fair values of available-for-sale securities by contractual maturity as of December 31, 2024 and 2023 are shown in Table 3.7 (in thousands). Expected maturities of MBS will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

 Table 3.7

Cost
 Fair
Value
Cost
 Fair
Value

 $
 457,610
 $
 440,483
 $
 —
 $
 —

 Due after one year through five years

 2,855,402
 2,796,740
 2,983,880

 Due after five years through ten years

 —
 —
 —
 —

 Due after ten years
 24,465
 —
 —

 3,337,477
 3,261,402
 2,983,880

 9,860,247
 9,796,217
 8,888,517
 8,815,585

 TOTAL
 $
 13,197,724
 $
 $
 11,872,397
 $

 Held-to-maturity Securities: Held-to-maturity securities by major security type as of December 31, 2024 are summarized in Table 3.8 (in thousands). Carrying value equals amortized cost, which includes adjustments made to the cost basis of an investment for accretion and amortization, and excludes accrued interest receivable of $ 476,000 as of December 31, 2024.

 Table 3.8

Cost
 Gross
Gains
 Gross
Losses
 Fair
Value

 $
 $
 —
 $
 ( 445)
 $
 30,450

 —
 ( 445)
 30,450

 ( 2,264)
 187,026

 ( 2,264)
 187,026

 TOTAL
 $
 $
 $
 ( 2,709)
 $
 217,476

 Held-to-maturity securities by major security type as of December 31, 2023 are summarized in Table 3.9 (in thousands). Carrying value equals amortized cost, which includes adjustments made to the cost basis of an investment for accretion and amortization, and excludes accrued interest receivable of $ 612,000 as of December 31, 2023.

 Table 3.9

Cost
 Gross
Gains
 Gross
Losses
 Fair
Value

 $
 $
 —
 $
 ( 646)
 $

 —
 ( 646)

 ( 3,685)
 225,444

 ( 3,685)
 225,444

 TOTAL
 $
 $
 $
 ( 4,331)
 $
 260,653

 The amortized cost and fair values of held-to-maturity securities by contractual maturity as of December 31, 2024 and 2023 are shown in Table 3.10 (in thousands). Expected maturities of MBS will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

 Table 3.10

Cost
 Fair
Value
Cost
 Fair
Value

 $
 —
 $
 —
 $
 —
 $
 —

 Due after one year through five years

 —
 —
 —
 —

 Due after five years through ten years

 30,450

 Due after ten years
 —
 —
 —
 —

 30,450

 187,026
 225,444

 TOTAL
 $
 $
 217,476
 $
 $
 260,653

 Net gains (losses) were realized on the sale of held-to-maturity securities as presented below and are recorded as net gains (losses) on sale of held-to-maturity securities in other income (loss) on the Statements of Income. All securities sold had paid down below 15 percent of the principal outstanding at acquisition and were therefore considered maturities under GAAP. Table 3.11 presents details of the sales (in thousands). There were no sales of held-to-maturity securities during the years ended December 31, 2024 and 2023.

 Table 3.11

 2022

 Proceeds from sale of held-to-maturity securities
 $
 19,930

 Carrying value of held-to-maturity securities sold
 ( 20,019)

 NET REALIZED GAINS (LOSSES)
 $
 ( 89)

 Allowance for Credit Losses on Available-for-Sale and Held-to-Maturity Securities: FHLBank evaluates available-for-sale and held-to-maturity investment securities for credit losses on a quarterly basis. As of December 31, 2024 and 2023, FHLBank did no t recognize a provision for credit losses associated with available-for-sale investments or held-to-maturity investments.

 FHLBank considers the unrealized losses on certain available-for-sale securities that were in an unrealized loss position to be temporary as FHLBank expects to recover the entire amortized cost basis on these available-for-sale investment securities. FHLBank

 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.

 As of December 31 2024, FHLBank's held-to-maturity and available-for-sale securities: (1) were all highly rated and/or had short remaining terms to maturity; (2) had not experienced, nor did FHLBank expect, any payment default on the instruments; (3) in the case of U.S. obligations, carry an explicit Federal government guarantee such that FHLBank considers the risk of nonpayment to be zero; and (4) in the case of GSE debentures or MBS, were 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 4 – ADVANCES

 General Terms: FHLBank offers fixed and variable rate advance products with different maturities, interest rates, payment characteristics and optionality. As of December 31, 2024 and 2023, FHLBank had advances outstanding at interest rates ranging from 0.44 percent to 7.20 percent and 0.42 percent to 7.20 percent, respectively. Table 4.1 presents advances summarized by redemption term as of December 31, 2024 and 2023 (dollar amounts in thousands). The redemption term represents the period in which principal amounts are contractually due. Carrying amounts exclude accrued interest receivable of $ 152,111,000 and $ 118,604,000 as of December 31, 2024 and 2023, respectively.

 Table 4.1

 Weighted Average Interest Rate
 Weighted Average Interest Rate

 $
 25,160,148
 4.43
 %
 $
 29,786,238
 5.32
 %

 Due after one year through two years
 4,724,245
 4.05
 4,213,704
 4.01

 Due after two years through three years
 4,530,096
 4.07
 3,882,479
 4.22

 Due after three years through four years
 3,037,483
 4.12
 3,086,881
 4.04

 Due after four years through five years
 2,663,624
 3.87
 2,837,481
 4.03

 1,760,096
 3.25
 1,863,519
 3.04

 Total par value
 4.24
 %
 4.85
 %

 ( 7,557)

 ( 10,276)

 ( 216,054)

 ( 215,257)

 TOTAL
 $
 41,652,081

 $
 45,444,769

 FHLBank offers advances that may be prepaid without prepayment or termination fees on predetermined exercise dates (call dates) prior to the stated advance maturity (callable advances). In exchange for receiving the right to call the advance on a predetermined call schedule, the borrower may pay a higher rate for the advance relative to an equivalent maturity, non-callable advance. The borrower generally exercises its call options on these advances when interest rates decline (fixed rate advances) or spreads change (adjustable rate advances). FHLBank also offers fixed rate advances that include a put option held by FHLBank (putable advances). On the date FHLBank exercises its put option, the borrower has the option to prepay the advance in full without a fee or roll into another advance product. A putable advance carries a lower interest rate than a comparable-maturity fixed rate advance without the put feature. FHLBank would generally exercise its put option when interest rates increase. Other advances are prepayable with a prepayment fee that makes FHLBank economically indifferent to the prepayment.

 Convertible advances allow FHLBank to convert an advance from one interest payment term structure to another. When issuing convertible advances, FHLBank purchases put options from a member that allow FHLBank to convert the fixed rate advance to a variable rate advance at the current market rate or another structure after an agreed-upon lockout period. A convertible advance carries a lower interest rate than a comparable-maturity fixed rate advance without the conversion feature.

 Table 4.2 presents advances summarized by redemption term or next call date and by redemption term or next put or conversion date as of December 31, 2024 and 2023 (in thousands):

 Table 4.2

or Next Call Date
 Redemption Term or Next Put or Conversion Date

 $
 26,134,800
 $
 31,038,961
 $
 27,391,348
 $
 31,299,438

 Due after one year through two years
 4,375,566
 3,920,260
 4,901,745
 4,552,204

 Due after two years through three years
 4,126,318
 3,562,900
 4,626,596
 3,954,979

 Due after three years through four years
 2,919,014
 2,678,103
 2,204,483
 2,750,881

 Due after four years through five years
 2,642,197
 2,715,262
 1,945,624
 1,600,481

 1,677,797
 1,754,816
 805,896
 1,512,319

 $
 $
 $
 $

 Interest Rate Payment Terms: Table 4.3 details additional interest rate payment and redemption terms for advances as of December 31, 2024 and 2023 (in thousands):

 Table 4.3

 Fixed rate:

 $
 15,388,152
 $
 26,714,638

 Due after one year through three years
 6,714,381
 6,034,768

 Due after three years through five years
 5,123,107
 5,072,017

 Due after five years through fifteen years
 1,695,725
 1,762,808

 Due after fifteen years
 18,795
 28,659

 Total fixed rate
 28,940,160
 39,612,890

 Variable rate:

 9,771,997
 3,071,600

 Due after one year through three years
 2,539,960
 2,061,415

 Due after three years through five years
 578,000
 852,345

 Due after five years through fifteen years
 44,075
 69,552

 Due after fifteen years
 1,500
 2,500

 Total variable rate
 12,935,532
 6,057,412

 $
 $

 Credit Risk Exposure and Security Terms: FHLBank's advances are primarily made to member financial institutions, including commercial banks and insurance companies. FHLBank manages its credit exposure in accordance with FHLBank's collateral and lending policies to limit risk of loss. These policies use a risk-based approach to determine the financial strength of each borrower, establish credit limits for each borrower, specify eligible collateral types and required collateral levels, and require ongoing monitoring of each borrower's financial condition. FHLBank considers the types and level of collateral to be the primary indicator of credit quality on advances. As of December 31, 2024 and 2023, FHLBank had rights to collateral on a borrower-by-borrower basis with an estimated value greater than its outstanding advances.

 In addition, FHLBank lends to eligible borrowers in accordance with federal law and FHFA regulations. Decisions to lend are based on the eligible borrower's financial condition and available collateral. Specifically, FHLBank is required to obtain sufficient collateral to fully secure credit products up to the borrower's total credit limit. Collateral eligible to secure new or renewed advances includes:
 One-to-four family and multifamily mortgage loans (delinquent for no more than 90 days) and securities representing such mortgages;
 Loans and securities issued, insured, or guaranteed by the U.S. government or any U.S. government agency (for example, MBS issued or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae);
 Cash or deposits in FHLBank;
 Certain other collateral that is real estate-related, provided that the collateral has a readily ascertainable value, meets certain requirements, and that FHLBank can perfect a security interest in it; and
 Qualifying securities.

 Residential mortgage loans are the principal form of collateral for advances. The estimated value of the collateral required to secure each member's credit products is calculated by applying collateral discounts, or haircuts, to the market value or unpaid principal balance of the collateral, as applicable. In addition, community financial institutions are eligible to use expanded statutory collateral provisions for small business, agriculture loans, and community development loans. FHLBank capital stock owned by each borrower is also pledged as collateral. Collateral arrangements may vary depending upon borrower credit quality, financial condition, and performance; borrowing capacity; and overall credit exposure to the borrower. FHLBank can also require additional or substitute collateral to protect its security interest. FHLBank has policies and procedures for validating the reasonableness of the collateral valuations. In addition, collateral verifications and on-site reviews are performed by FHLBank based on the risk profile of the borrower. FHLBank management believes that these policies effectively manage credit risk from advances.

 Based on the financial condition of the borrower, FHLBank may allow a borrower to retain physical possession of the collateral pledged to FHLBank if the borrower executes a written security agreement, provides periodic listings and agrees to hold such collateral for the benefit of FHLBank, or require the borrower to specifically assign or place physical possession of the collateral with FHLBank or its safekeeping agent. Securities and cash collateral are always in physical possession or in custodian control. FHLBank perfects its security interest in all pledged collateral. Section 10(e) of the Bank Act states that any security interest granted to an FHLBank by a borrower will have priority over the claims or rights of any other party, except for: (1) claims or rights of a third party that would be entitled to priority under otherwise applicable law and are held by a bona fide purchaser for value; or (2) by a secured party holding a prior perfected security interest.

 FHLBank continues to evaluate and make changes to its collateral guidelines, as necessary, based on current market conditions. As of December 31, 2024 and 2023, no advances were past due, on nonaccrual status, or considered impaired. In addition, there were no troubled debt restructurings related to advances during the years ended December 31, 2024 and 2023.

 Based on the collateral held as security, FHLBank's credit extension and collateral policies, and repayment history on advances, no allowance for credit losses on advances was recorded as of December 31, 2024 and 2023.

 FHLBank's potential credit risk from advances is concentrated in commercial banks, insurance companies, and savings institutions. As of December 31, 2024, FHLBank had outstanding advances of $ 10,125,000,000 to one member that individually held 10 percent or more of FHLBank's advances, which represents 24.2 percent of total outstanding advances. As of December 31, 2023, FHLBank had outstanding advances of $ 17,260,000,000 to two members that individually held 10 percent or more of FHLBank's advances, which represented 37.8 percent of total outstanding advances. One member was the same in both years.

 See Note 14 – Fair Values for information about the fair value of advances.

 See Note 16 – Transactions with Stockholders for detailed information on transactions with related parties.

 NOTE 5 – MORTGAGE LOANS

 Mortgage loans held for portfolio consist of loans obtained through the MPF Program and are either conventional mortgage loans or government-guaranteed or government-insured mortgage loans. Under the MPF Program, FHLBank purchases single-family mortgage loans that are originated or acquired by PFIs. These mortgage loans are credit-enhanced by PFIs or are guaranteed or insured by Federal agencies.

 Mortgage Loans Held for Portfolio: Table 5.1 presents information as of December 31, 2024 and 2023 on mortgage loans held for portfolio (in thousands). Carrying amounts exclude accrued interest receivable of $ 54,997,000 and $ 45,669,000 as of December 31, 2024 and 2023, respectively.

 Table 5.1

 Real estate:

 Fixed rate, medium-term1, single-family mortgages

 $
 928,996
 $
 1,055,326

 Fixed rate, long-term, single-family mortgages
 7,948,931
 7,227,825

 Total unpaid principal balance
 8,877,927
 8,283,151

 Premiums
 95,760
 94,485

 ( 6,904)
 ( 5,591)

 Deferred loan costs, net

 ( 13,351)
 ( 13,840)

 Total before allowance for credit losses on mortgage loans
 8,953,466
 8,358,244

 Allowance for credit losses on mortgage loans
 ( 4,033)
 ( 5,531)

 MORTGAGE LOANS HELD FOR PORTFOLIO, NET
 $
 8,949,433
 $
 8,352,713

 1 Medium-term defined as a term of 15 years or less at origination.

 Table 5.2 presents information as of December 31, 2024 and 2023 on the outstanding unpaid principal balance of mortgage loans held for portfolio (in thousands):

 Table 5.2

 Conventional loans
 $
 8,553,518
 $
 7,953,624

 Government-guaranteed or -insured loans
 324,409
 329,527

 TOTAL UNPAID PRINCIPAL BALANCE
 $
 8,877,927
 $
 8,283,151

 Credit Enhancements: FHLBank's allowance for credit losses considers the credit enhancements associated with conventional mortgage loans under the MPF Program. Credit enhancements may include primary mortgage insurance (PMI), supplemental mortgage insurance (SMI), and the CE obligation plus any recoverable performance-based CE fees (for certain MPF loans). Potential recoveries from credit enhancements for conventional loans are evaluated at the individual master commitment level to determine the credit enhancements available to recover losses on loans under each individual master commitment.

 Conventional MPF loans held for portfolio are required to be credit enhanced as determined through the use of a validated model so that the risk of loss is limited to the losses within FHLBank's risk tolerance. FHLBank and its PFIs share the risk of credit losses on conventional loans by structuring potential losses into layers with respect to each master commitment. After considering the borrower's equity and any PMI, credit losses on mortgage loans in a master commitment are then absorbed by FHLBank's First Loss Account (FLA). If applicable to the MPF product master commitment, FHLBank will withhold a PFI's scheduled performance-based CE fee to reimburse FHLBank for any losses allocated to the FLA. If the FLA is exhausted, the credit losses are then absorbed by the PFI up to an agreed upon CE obligation, which may consist of a direct liability of a PFI to pay credit losses up to a specified amount, a contractual obligation of a PFI to provide SMI, or a combination of both. Thereafter, any remaining credit losses are absorbed by FHLBank.

 FHLBank records CE fees paid to PFIs as a reduction to mortgage interest income. Table 5.3 presents net CE fees paid to PFIs for the years ended December 31, 2024, 2023, and 2022 (in thousands):

 Table 5.3

 2024
 2023
 2022

 CE fees paid to PFIs
 $
 7,258
 $
 6,580
 $
 6,414

 Performance-based CE fees recovered from PFIs
 ( 30)
 ( 42)
 ( 42)

 NET CE FEES PAID
 $
 7,228
 $
 6,538
 $
 6,372

 Payment Status of Mortgage Loans: Payment status is the key credit quality indicator for conventional mortgage loans and allows FHLBank to monitor borrower performance. A past due loan is one where the borrower has failed to make a full payment of principal and interest within 30 days of its due date. Other delinquency statistics include nonaccrual loans and loans in process of foreclosure.

 Table 5.4 presents the payment status based on amortized cost as well as other delinquency statistics for FHLBank's mortgage loans as of December 31, 2024 (dollar amounts in thousands):

 Table 5.4

 Conventional Loans
 Government
Loans
 Total

 Origination Year
 Subtotal

 Prior to 2020
 2020
 2021
 2022
 2023
 2024

 Amortized Cost:1

 Past due 30-59 days delinquent

 $
 30,714
 $
 5,594
 $
 8,215
 $
 7,165
 $
 7,532
 $
 4,087
 $
 63,307
 $
 9,669
 $
 72,976

 Past due 60-89 days delinquent

 8,402
 1,290
 1,680
 2,017
 1,514
 15,116
 3,572
 18,688

 Past due 90 days or more delinquent

 10,006
 1,414
 1,738
 1,846
 3,922
 19,307
 6,509
 25,816

 Total past due
 49,122
 8,298
 11,633
 11,028
 12,968
 4,681
 97,730
 19,750
 117,480

 Total current loans
 2,425,528
 1,372,758
 1,583,252
 770,774
 1,027,080
 1,348,195
 8,527,587
 308,399
 8,835,986

 Total mortgage loans
 $
 2,474,650
 $
 1,381,056
 $
 1,594,885
 $
 781,802
 $
 1,040,048
 $
 1,352,876
 $
 8,625,317
 $
 328,149
 $
 8,953,466

 Other delinquency statistics:

 In process of foreclosure2

 $
 3,124
 $
 $
 3,429

 Serious delinquency rate3

 0.2
 %
 2.0
 %
 0.3
 %

 Past due 90 days or more and still accruing interest

 $
 —
 $
 6,509
 $
 6,509

 Loans on nonaccrual status4

 $
 24,402
 $
 —
 $
 24,402

 1 Excludes accrued interest receivable.
 2 Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.
 3 Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.
 4 Includes $ 11,301,000 of conventional mortgage loans on nonaccrual status that did not have an associated allowance for credit losses because either these loans were previously charged off to the expected recoverable value or the fair value of the underlying collateral was greater than the amortized cost of the loans.

 Table 5.5 presents the payment status based on amortized cost as well as other delinquency statistics for FHLBank's mortgage loans as of December 31, 2023 (dollar amounts in thousands):

 Table 5.5

 Conventional Loans
 Government
Loans
 Total

 Origination Year
 Subtotal

 Prior to 2019
 2019
 2020
 2021
 2022
 2023

 Amortized Cost:1

 Past due 30-59 days delinquent

 $
 19,739
 $
 7,135
 $
 5,601
 $
 5,955
 $
 6,745
 $
 2,746
 $
 47,921
 $
 10,327
 $
 58,248

 Past due 60-89 days delinquent

 5,013
 1,319
 2,047
 —
 9,789
 2,972
 12,761

 Past due 90 days or more delinquent

 8,063
 5,185
 1,354
 1,170
 —
 16,219
 2,659
 18,878

 Total past due
 32,815
 13,639
 7,434
 8,056
 9,239
 2,746
 73,929
 15,958
 89,887

 Total current loans
 1,770,552
 971,328
 1,506,877
 1,720,492
 852,858
 1,128,557
 7,950,664
 317,693
 8,268,357

 Total mortgage loans
 $
 1,803,367
 $
 984,967
 $
 1,514,311
 $
 1,728,548
 $
 862,097
 $
 1,131,303
 $
 8,024,593
 $
 333,651
 $
 8,358,244

 Other delinquency statistics:

 In process of foreclosure2

 $
 6,008
 $
 $
 6,771

 Serious delinquency rate3

 0.2
 %
 0.8
 %
 0.2
 %

 Past due 90 days or more and still accruing interest

 $
 —
 $
 2,657
 $
 2,657

 Loans on nonaccrual status4

 $
 19,383
 $
 —
 $
 19,383

 1 Excludes accrued interest receivable.
 2 Includes loans where the decision of foreclosure or similar alternative such as pursuit of deed-in-lieu has been reported. Loans in process of foreclosure are included in past due or current loans dependent on their delinquency status.
 3 Loans that are 90 days or more past due or in the process of foreclosure expressed as a percentage of the total amortized cost for the portfolio class.
 4 Includes $ 12,502,000 of conventional mortgage loans on nonaccrual status that did not have an associated allowance for credit losses because either these loans were previously charged off to the expected recoverable value or the fair value of the underlying collateral was greater than the amortized cost of the loans.

 Allowance for Credit Losses:
 Conventional Mortgage Loans: Conventional loans that have similar risk characteristics are pooled and evaluated collectively. Conventional loans that do not share risk characteristics with other pools are evaluated for expected credit losses on an individual basis. FHLBank determines its allowance for credit losses on conventional loans through analyses that include consideration of various loan portfolio and collateral-related characteristics, such as past performance, current economic conditions, and reasonable and supportable forecasts of expected economic conditions. FHLBank uses a third-party 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 both current and forecasted property values and interest rates as well as historical borrower behavior among other factors. The forecasts used in the calculation of expected credit losses cover the contractual terms of the loans rather than a reversion to historical trends after a forecasted period. FHLBank also incorporates associated credit enhancements, as available, to determine its estimate of expected credit losses.

 Certain conventional loans may be evaluated for credit losses using the practical expedient for collateral dependent assets. A mortgage loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be substantially through the sale of the underlying collateral. FHLBank may estimate the fair value of this collateral by applying an appropriate loss severity rate or by using third party estimates or property valuation models. 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. FHLBank records a direct charge-off of the loan balance if certain triggering criteria are met. Expected recoveries of prior charge-offs, if any, are included in the allowance for credit losses.

 FHLBank established an allowance for credit losses on its conventional mortgage loans held for portfolio. Table 5.6 presents a roll-forward of the allowance for credit losses on mortgage loans for the years ended December 31, 2024, 2023, and 2022.

 Table 5.6

 Conventional Loans
 2024
 2023
 2022

 Balance, beginning of the period
 $
 5,531
 $
 6,378
 $
 5,317

 Net (charge-offs) recoveries
 ( 206)

 Provision (reversal) for credit losses
 ( 1,636)
 ( 641)

 Balance, end of the period
 $
 4,033
 $
 5,531
 $
 6,378

 Government-Guaranteed or -Insured Mortgage Loans: FHLBank invests in fixed rate mortgage loans that are insured or guaranteed by the Federal Housing Administration, the Department of Veterans Affairs, the Rural Housing Service of the Department of Agriculture, and/or the Department of Housing and Urban Development. The servicer provides and maintains insurance or a guarantee from the applicable government agency. The servicer 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-guaranteed or -insured mortgage loans. Based on FHLBank's assessment of its servicers and the collateral backing the loans, the risk of loss was immaterial; consequently, no allowance for credit losses for government-guaranteed or -insured mortgage loans was recorded as of December 31, 2024 and 2023. Furthermore, none of these mortgage loans have been placed on nonaccrual 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.

 See Note 14 – Fair Values for information about the fair value of mortgage loans held for portfolio.

 See Note 16 – Transactions with Stockholders for additional information on transactions with related parties.

 NOTE 6 – DERIVATIVES AND HEDGING ACTIVITIES

 Nature of Business Activity: FHLBank is exposed to interest rate risk primarily from the effect of interest rate changes on its interest-earning assets and its interest-bearing liabilities that finance these assets. The goal of FHLBank'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, FHLBank has established policies and procedures, which include guidelines on the amount of exposure to interest rate changes it is willing to accept. In addition, FHLBank monitors the risk to its interest income, net interest margin, and average maturity of interest-earning assets and interest-bearing liabilities.

 Consistent with FHFA regulation, FHLBank enters into derivatives to: (1) reduce the interest rate risk exposures inherent in otherwise unhedged assets and funding positions; and (2) achieve risk management objectives. FHFA regulation and FHLBank's RMP prohibit trading in or the speculative use of these derivative instruments and limit credit risk arising from these instruments. The use of derivatives is an integral part of FHLBank's financial and risk management strategy.

 FHLBank reevaluates its hedging strategies periodically and may change the hedging techniques it uses or may adopt new strategies. The most common ways in which FHLBank uses derivatives are to:
 Reduce funding costs by combining an interest rate swap with a consolidated obligation because the cost of a combined funding structure can be lower than the cost of a comparable consolidated obligation;
 Reduce the interest rate sensitivity and repricing gaps of assets and liabilities;
 Preserve a favorable interest rate spread between the yield of an asset (e.g., an advance) and the cost of the related liability (e.g., the consolidated obligation used to fund the advance). Without the use of derivatives, this interest rate spread could be reduced or eliminated when a change in the interest rate on the advance does not match a change in the interest rate on the consolidated obligation;
 Mitigate the adverse earnings effects of the shortening or extension of certain assets (e.g., advances or mortgage assets) and liabilities;
 Manage embedded options in assets and liabilities; and
 Manage its overall asset/liability portfolio.

 Application of Derivatives: At the inception of every hedge transaction, FHLBank documents all hedging relationships between derivatives designated as hedging instruments and the hedged items, its risk management objectives and strategies for undertaking various hedge transactions, and its method of assessing hedge effectiveness. This process includes linking all derivatives that are designated as fair value hedges to assets and/or liabilities on the Statements of Condition or firm commitments.

 Derivative instruments are designated by FHLBank as:
 A qualifying fair value hedge of an associated financial instrument or a firm commitment; or
 A non-qualifying economic hedge to manage certain defined risks in the Statements of Condition. These hedges are primarily used to: (1) manage mismatches between the coupon features of assets and liabilities; (2) offset prepayment risks in certain assets; (3) mitigate the income statement volatility that occurs when financial instruments are recorded at fair value and hedge accounting is not permitted; or (4) reduce exposure to reset risk.

 FHLBank transacts most of its derivatives with counterparties that are large banks and major broker/dealers. Some of these banks and broker/dealers or their affiliates buy, sell and distribute consolidated obligations. Over-the-counter derivative transactions may be either executed through a bilateral agreement with a counterparty (uncleared derivatives) or cleared through a Futures Commission Merchant (i.e., clearing agent) with a Clearinghouse (cleared derivatives). FHLBank is not a derivatives dealer and does not trade derivatives for short-term profit.

 Types of Derivatives: FHLBank primarily uses 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 one party committing to pay cash flows equivalent to the interest on a notional principal amount at a predetermined fixed rate for a given period of time. In return for this commitment, this party receives cash flows equivalent to the interest on the same notional principal amount at a variable interest rate index for the same period of time. Interest rate swaps and their associated hedged item must qualify for hedge accounting under GAAP; interest rate swaps that do not qualify for hedge accounting are considered economic derivatives and are marked-to-market through other income.

 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 or interest rate. 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 or interest rate. Interest rate caps and floors are designed as protection against the interest rate on a variable rate asset or liability rising or falling below a certain level. FHLBank purchases interest rate caps and floors to hedge duration risk caused by changes in interest rates. These derivatives are not specifically linked to individual assets or liabilities and, therefore, do not receive hedge accounting treatment. These derivatives are marked-to-market through other income.

 Types of Hedged Items: FHLBank may have the following types of hedged items:

 Investments - FHLBank invests in U.S. Treasury securities, U.S. Agency MBS, GSE debt securities or MBS, and state or local housing finance agency securities. The interest rate and prepayment risk associated with these investment securities is managed through a combination of funding and derivatives. FHLBank may manage the prepayment, duration, and interest rate risk by funding investment securities with callable consolidated obligations, or by hedging the prepayment risk with interest rate caps or floors or callable swaps. FHLBank may also manage the risk arising from changing market prices and volatility of investment securities by entering into derivatives that generally offset the changes in fair value of the securities.

 Advances - For fixed rate advances, FHLBank can either fund the advances with fixed rate consolidated obligations with the same tenor or simultaneously enter into an interest rate swap in which the clearing agent or derivative counterparty receives fixed cash flows from FHLBank designed to mirror in timing and amount the cash inflows FHLBank receives on the advance. In this type of transaction, FHLBank typically receives from the clearing agent or derivative counterparty a variable cash flow that closely matches the interest payments on short-term discount notes or swapped consolidated obligation bonds.

 The repricing characteristics and optionality embedded in certain financial instruments held by FHLBank can create interest rate risk. For example, when a member prepays an advance, future income could decline if the principal portion of the prepaid advance is invested in lower-yielding assets that continue to be funded by higher-cost debt. To protect against this risk, FHLBank generally charges a prepayment fee on an advance that makes it financially indifferent to a member's decision to prepay the advance. When FHLBank offers advances (other than short-term advances) that a member may prepay without a prepayment fee, it usually finances these advances with callable debt or otherwise hedges the option being sold to the member.

 Mortgage Loans - FHLBank invests in fixed rate mortgage loans through the MPF Program. The prepayment options embedded in mortgage loans can result in extensions or contractions in the expected lives of these investments, which usually occur as a result of changes in interest rates. FHLBank may manage the interest rate and prepayment risk associated with mortgage loans by issuing both callable and non-callable debt and using derivatives to achieve cash flow patterns and liability durations similar to those expected on the mortgage loans.

 Consolidated Obligations - FHLBank may enter into derivatives to hedge the interest rate risk associated with debt issuance. FHLBank manages the risk arising from changing market prices and volatility of a consolidated obligation by matching the cash inflow on the derivative with the cash outflow on the consolidated obligation.

 For example, FHLBank may issue a fixed rate consolidated obligation and simultaneously enter into a matching derivative in which FHLBank receives a fixed cash flow designed to mirror in timing and amount the cash outflows FHLBank pays on the consolidated obligation. In this type of transaction, FHLBank typically pays a variable cash flow that closely matches the interest payments it receives on short-term or variable rate advances. These transactions are designated as fair value hedges. FHLBank may issue variable rate consolidated obligations indexed to SOFR, Federal funds effective rate, or other rates and simultaneously execute interest rate swaps to hedge the basis risk of the variable rate debt. This type of hedge is treated as an economic hedge and the derivative is marked-to-market through earnings.

 Firm Commitments - Commitments that obligate FHLBank to purchase closed fixed rate mortgage loans from its members are considered derivatives. Accordingly, each mortgage loan purchase commitment is recorded as a derivative asset or derivative liability at fair value, with changes in fair value recognized in current period earnings. When a mortgage loan purchase commitment derivative settles, the current market value of the commitment is included with the basis of the mortgage loan and amortized accordingly.

 Commitments that obligate FHLBank to issue consolidated obligations that settle outside of normal market settlement conventions are considered derivatives. Accordingly, each consolidated obligation commitment is recorded as a derivative asset or derivative liability at fair value, with changes in fair value recognized in current period earnings. When the consolidated obligation commitment derivative settles, the current market value of the commitment is included with the basis of the consolidated obligation and amortized accordingly.

 FHLBank may also hedge a firm commitment for a forward-starting advance or consolidated obligation bond through the use of an interest rate swap. In this case, the swap functions as the hedging instrument for both the hedging relationship involving the firm commitment and the subsequent hedging relationship involving the advance or bond. If the hedge relationship is de-designated when the commitment is terminated and the advance or bond is issued, the fair value change associated with the firm commitment is recorded as a basis adjustment of the advance or bond at the time of de-designation. The basis adjustment is then amortized into interest income or expense over the life of the advance or bond. In addition, if a hedged firm commitment no longer qualifies as a fair value hedge, the hedge would be terminated and net gains and losses would be recognized in current period earnings. There were no gains or losses recognized due to disqualification of firm commitment hedges during the years ended December 31, 2024, 2023, and 2022.

 Financial Statement Impact and Additional Financial Information: Derivative instruments are recorded at fair value and reported in derivative assets or derivative liabilities on the Statements of Condition. Premiums paid at acquisition are accounted for as the basis of the derivative at inception of the hedge. The notional amount in derivative contracts serves as a factor in determining periodic interest payments or cash flows received and paid. However, the notional amount of derivatives reflects FHLBank's involvement in the various classes of financial instruments and represents neither the actual amounts exchanged nor the overall exposure of FHLBank to credit and market risk; the overall risk is much smaller. The risks of derivatives can be measured meaningfully on a portfolio basis that takes into account the clearing agents, counterparties, the types of derivatives, the items being hedged, and any offsets between the derivatives and the items being hedged.

 FHLBank considers accrued interest receivables and payables and the legal right to offset derivative assets and liabilities by clearing agent or derivative counterparty. Consequently, derivative assets and liabilities reported on the Statements of Condition generally include the net cash collateral, including initial margin, and accrued interest received or pledged by clearing agents and/or derivative counterparties. Therefore, an individual derivative may be in an asset position (clearing agent or derivative counterparty would owe FHLBank the current fair value, which includes net accrued interest receivable or payable on the derivative, if the derivative was settled as of the Statement of Condition date) but when the derivative fair value and cash collateral fair value (includes accrued interest on the collateral) are netted by clearing agent by Clearinghouse, or by derivative counterparty, the derivative may be recorded on the Statements of Condition as a derivative liability. Conversely, a derivative may be in a liability position (FHLBank would owe the clearing agent or derivative counterparty the fair value if settled as of the Statement of Condition date) but may be recorded on the Statements of Condition as a derivative asset after netting.

 Table 6.1 presents outstanding notional amounts and fair values of the derivatives outstanding by type of derivative and by hedge designation as of December 31, 2024 and 2023 (in thousands). Total derivative assets and liabilities include the effect of netting adjustments and cash collateral.

 Table 6.1

 Notional
 Derivative
Assets
 Derivative
Liabilities
 Notional
 Derivative
Assets
 Derivative
Liabilities

 Derivatives designated as hedging instruments:

 Interest rate swaps
 $
 37,883,273
 $
 66,190
 $
 226,184
 $
 44,804,870
 $
 116,352
 $
 410,595

 Total derivatives designated as hedging relationships

 37,883,273
 66,190
 226,184
 44,804,870
 116,352
 410,595

 Derivatives not designated as hedging instruments:

 Interest rate swaps
 11,464,896
 25,282
 6,383,296
 22,072

 Interest rate caps/floors
 2,604,000
 4,181
 —
 304,000
 —

 34,524
 41,641

 Total derivatives not designated as hedging instruments

 14,103,420
 29,493
 6,728,937
 22,903

 TOTAL
 $
 51,986,693
 95,683
 $
 51,533,807
 139,255

 Netting adjustments and cash collateral1

 DERIVATIVE ASSETS AND LIABILITIES

 $
 $
 6,131

 $
 $

 1 Amounts represent the application of the netting requirements that allow FHLBank to settle positive and negative positions and cash collateral, including accrued interest, held or placed with the same clearing agent and/or derivative counterparty. Cash collateral posted was $ 521,222,000 and $ 649,456,000 as of December 31, 2024 and 2023, respectively. Cash collateral received was $ 39,354,000 and $ 28,452,000 as of December 31, 2024 and 2023, respectively.

 For the years ended December 31, 2024, 2023, and 2022, FHLBank recorded net gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on FHLBank's net interest income as presented in Table 6.2 (in thousands):

 Table 6.2

 2024

 Interest Income/Expense

 Available-for-sale Securities

 Total amounts presented in the Statements of Income
 $
 2,434,890
 $
 784,787
 $
 888,622
 $
 2,627,916

 Gains (losses) on fair value hedging relationships:

 Interest rate contracts:

 Derivatives1

 $
 292,128
 $
 233,127
 $
 ( 4,270)
 $
 ( 103,339)

 Hedged items2

 ( 765)
 ( 1,814)
 ( 3,149)
 ( 167,294)

 NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS

 $
 291,363
 $
 231,313
 $
 ( 7,419)
 $
 ( 270,633)

 2023

 Interest Income/Expense

 Available-for-sale Securities

 Total amounts presented in the Statements of Income
 $
 2,409,840
 $
 594,548
 $
 1,102,702
 $
 2,206,160

 Gains (losses) on fair value hedging relationships:

 Interest rate contracts:

 Derivatives1

 $
 85,927
 $
 31,991
 $
 ( 6,312)
 $
 ( 78,556)

 Hedged items2

 163,568
 162,227
 ( 28,552)
 ( 244,352)

 NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS
 $
 249,495
 $
 194,218
 $
 ( 34,864)
 $
 ( 322,908)

.

 2022

 Interest Income/Expense

 Available-for-sale Securities

 Total amounts presented in the Statements of Income
 $
 742,694
 $
 197,809
 $
 368,075
 $
 638,751

 Gains (losses) on fair value hedging relationships:

 Interest rate contracts:

 Derivatives1

 $
 464,852
 $
 531,080
 $
 ( 43,327)
 $
 ( 606,760)

 Hedged items2

 ( 448,444)
 ( 518,173)
 30,865
 564,081

 NET GAINS (LOSSES) ON FAIR VALUE HEDGING RELATIONSHIPS
 $
 16,408
 $
 12,907
 $
 ( 12,462)
 $
 ( 42,679)

 1 Includes net interest settlements in interest income/expense.

 2 Includes amortization/accretion on closed fair value relationships in interest income.

 Table 6.3 presents the cumulative basis adjustments on hedged items designated as fair value hedges and the related amortized cost of the hedged items as of December 31, 2024 and 2023 (in thousands):

 Table 6.3

 Available-for-Sale Securities

 Carrying value of hedged asset/(liability)1

 $
 15,700,289
 7,984,796
 ( 3,043,704)
 ( 10,653,310)

 Basis adjustments for active hedging relationships

 $
 ( 210,116)
 $
 ( 258,571)
 $
 ( 837)
 $
 198,495

 Basis adjustments for discontinued hedging relationships

 ( 5,937)
 —
 —
 ( 5,545)

 Cumulative amount of fair value hedging basis adjustments2

 $
 ( 216,053)
 $
 ( 258,571)
 $
 ( 837)
 $
 192,950

 Available-for-Sale Securities

 Carrying value of hedged asset/(liability)1

 $
 13,545,019
 $
 6,367,691
 $
 ( 3,874,550)
 $
 ( 20,374,603)

 Basis adjustments for active hedging relationships

 $
 ( 206,332)
 $
 ( 256,757)
 $
 2,313
 $
 366,180

 Basis adjustments for discontinued hedging relationships

 ( 8,924)
 —
 —
 ( 5,937)

 Cumulative amount of fair value hedging basis adjustments2

 $
 ( 215,256)
 $
 ( 256,757)
 $
 2,313
 $
 360,243

 1 Includes only the portion of carrying value representing the hedged items in fair value hedging relationships. For available-for-sale securities, amortized cost is considered to be carrying value (i.e., the fair value adjustment recorded in accumulated other comprehensive income (AOCI) is excluded).
 2 Included in amortized cost of the hedged asset/liability.

 Table 6.4 provides information regarding net gains (losses) on derivatives recorded in non-interest income (in thousands).

 Table 6.4

 2024
 2023
 2022

 Derivatives not designated as hedging instruments:

 Economic hedges:

 Interest rate swaps
 $
 ( 15,925)
 $
 ( 17,414)
 $
 107,552

 Interest rate caps/floors
 ( 3,941)
 ( 1,088)
 1,406

 Net interest settlements
 26,278
 35,033
 ( 13,661)

 ( 338)
 ( 799)
 ( 186)

 ( 468)
 ( 809)
 ( 8,619)

 NET GAINS (LOSSES) ON DERIVATIVES
 $
 5,606
 $
 14,923
 $
 86,492

 1 This amount is for derivatives for which variation margin is characterized as a daily settled contract.

 Managing Credit Risk on Derivatives: FHLBank is subject to credit risk due to the risk of nonperformance by counterparties to its derivative transactions and manages credit risk through credit analyses, collateral requirements, and adherence to the requirements set forth in its RMP, U.S. Commodity Futures Trading Commission regulations, and FHFA regulations.

 Uncleared derivatives. For uncleared derivatives, the degree of credit risk depends on the extent to which master netting arrangements are included in these contracts to mitigate the risk. FHLBank requires collateral agreements with collateral delivery thresholds on all uncleared derivatives. All bilateral security agreements include bilateral-collateral-exchange provisions that require all credit exposures be collateralized, subject to minimum transfer amounts. Additionally, collateral related to derivatives with member institutions includes collateral assigned to FHLBank, as evidenced by a written security agreement. Based on credit analyses and collateral requirements, FHLBank management does not anticipate any credit losses on its derivative agreements.

 Bilateral derivative transactions executed on or after September 1, 2022, are subject to two-way initial margin requirements if aggregate uncleared derivative exposure to a counterparty exceeds a specified threshold. The initial margin is required to be held at a third-party custodian, and the secured party 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, 2024, FHLBank was not required to pledge to or receive initial margin from bilateral derivative counterparties.

 Cleared derivatives. For cleared derivatives, a Clearinghouse is FHLBank's counterparty. The applicable Clearinghouse notifies the clearing agent of the required initial and variation margin, and the clearing agent in turn notifies FHLBank. FHLBank utilizes two Clearinghouses for all cleared derivative transactions, LCH Ltd and CME Clearing. At both Clearinghouses, variation margin is characterized as daily settlement payments and initial margin is considered cash collateral. The requirement that FHLBank post initial and variation margin to the Clearinghouse through the clearing agent exposes FHLBank 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/payment for changes in the value of cleared derivatives is posted daily through a clearing agent.

 The Clearinghouse determines initial margin requirements, and credit ratings generally 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. FHLBank was not required to post additional initial margin by its clearing agents as of December 31, 2024 and 2023.

 FHLBank's net exposure on derivative agreements is presented in Note 10 – Assets and Liabilities Subject to Offsetting.

 NOTE 7 – DEPOSITS

 FHLBank offers demand, overnight and short-term deposit programs to its members and to other qualifying non-members. A member that services mortgage loans may also deposit funds collected in connection with the mortgage loans, pending disbursement of these funds to the owners of the mortgage loans. FHLBank classifies these funds as other deposits. Deposits classified as demand and overnight pay interest based on a daily interest rate. Term deposits pay interest based on a fixed rate determined at the issuance of the deposit.

 Table 7.1 details the types of deposits held by FHLBank as of December 31, 2024 and 2023 (in thousands):

 Table 7.1

 Interest-bearing:

 Demand
 $
 389,071
 $
 297,267

 Overnight
 531,300
 391,900

 Term
 1,000
 10,650

 Total interest-bearing
 921,371
 699,817

 Non-interest-bearing:

 Other
 67,650
 52,383

 Total non-interest-bearing
 67,650
 52,383

 TOTAL DEPOSITS
 $
 989,021
 $
 752,200

 NOTE 8 – CONSOLIDATED OBLIGATIONS

 Consolidated obligations are the joint and several obligations of the FHLBanks and consist of consolidated bonds and discount notes and, as provided by the Bank Act or FHFA regulation, are backed only by the financial resources of the FHLBanks. The FHLBanks jointly issue consolidated obligations with the Office of Finance acting as their agent. The Office of Finance tracks the amounts of debt issued on behalf of each FHLBank. In addition, FHLBank records as a liability its specific portion of consolidated obligations for which it is the primary obligor. The FHFA and the U.S. Secretary of the Treasury oversee the issuance of FHLBank debt through the Office of Finance. Consolidated obligation bonds may be issued to raise short-term, intermediate-term, and long-term funds for the FHLBanks and are not subject to any statutory or regulatory limits as to maturities. Consolidated obligation discount notes, which are issued to raise short-term funds, are generally issued at less than their face amounts and redeemed at par upon maturity.

 Although FHLBank Topeka is primarily liable for its portion of consolidated obligations, FHLBank Topeka is also jointly and severally liable with the other 10 FHLBanks for the payment of principal and interest on all consolidated obligations of each of the FHLBanks. The FHFA, at its discretion, may require any FHLBank to make principal or interest payments due on any consolidated obligations for which FHLBank is not the primary obligor. Although it has never occurred, to the extent that an FHLBank would be required to make a payment on a consolidated obligation on behalf of another FHLBank, the paying FHLBank would be entitled to reimbursement from the non-complying FHLBank. However, if the FHFA determines that the non-complying FHLBank is unable to satisfy its obligations, then the FHFA may allocate the non-complying FHLBank's outstanding consolidated obligation debt 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 the FHFA may determine to ensure that the FHLBanks operate in a safe and sound manner.

 The par value of outstanding consolidated obligations of all FHLBanks, including outstanding consolidated obligations issued on behalf of FHLBank Topeka, was $ 1,192,968,394,000 and $ 1,204,316,000,000 as of December 31, 2024 and 2023, respectively. FHFA regulations require that each FHLBank maintain unpledged qualifying assets equal to its participation in the total consolidated obligations outstanding. Qualifying assets are defined as cash; secured advances; obligations of or fully guaranteed by the United States; obligations, participations or other instruments of or issued by Fannie Mae or Ginnie Mae; mortgages, obligations or other securities, which are or have ever been sold by Freddie Mac; and such securities as fiduciary and trust funds may invest in under the laws of the state in which FHLBank is located.

 Consolidated Obligation Bonds: Table 8.1 presents FHLBank's participation in consolidated obligation bonds outstanding as of December 31, 2024 and 2023 (dollar amounts in thousands):

 Table 8.1

 Year of Contractual Maturity
 Weighted
Rate
 Weighted
Rate

 $
 37,517,835
 4.35
 %
 $
 28,152,305
 4.90
 %

 Due after one year through two years
 7,828,625
 3.14
 9,327,370
 4.21

 Due after two years through three years
 2,225,545
 2.68
 4,294,125
 2.01

 Due after three years through four years
 1,634,440
 2.97
 1,780,895
 2.01

 Due after four years through five years
 1,573,155
 3.62
 1,467,440
 2.96

 5,280,950
 3.43
 4,387,255
 2.63

 Total par value
 56,060,550
 3.97
 %
 49,409,390
 4.15
 %

 Premiums
 12,044

 12,874

 ( 3,054)

 ( 3,108)

 Concession fees
 ( 12,085)
 ( 11,424)

 ( 192,949)

 ( 360,243)

 TOTAL
 $
 55,864,506

 $
 49,047,489

 FHLBank issues optional principal redemption bonds (callable bonds) that may be redeemed in whole or in part at the discretion of FHLBank on predetermined call dates in accordance with terms of bond offerings. FHLBank's consolidated obligation bonds outstanding as of December 31, 2024 and 2023 includes callable bonds totaling $ 17,048,000,000 and $ 22,940,000,000, respectively. Table 8.2 summarizes FHLBank's consolidated obligation bonds outstanding by year of maturity, or by the next call date for callable bonds as of December 31, 2024 and 2023 (in thousands):

 Table 8.2

 Year of Maturity or Next Call Date

 $
 47,888,835
 $
 40,475,305

 Due after one year through two years
 5,093,625
 6,503,370

 Due after two years through three years
 1,342,545
 1,227,125

 Due after three years through four years
 696,940
 362,895

 Due after four years through five years
 378,155
 493,940

 660,450
 346,755

 $
 56,060,550
 $
 49,409,390

 In addition to having fixed rate or simple variable rate coupon payment terms, consolidated obligation bonds may also have the following broad terms, regarding the coupon payment:
 Range bonds that have coupon rates at fixed or variable rates and pay the fixed or variable rate as long as the index rate is within the established range, but generally pay zero percent or a minimal interest rate if the specified index rate is outside the established range;
 Conversion bonds that have coupon rates that convert from fixed to variable, or variable to fixed, rates or from one index to another, on predetermined dates according to the terms of the bond offerings; and
 Step bonds that have coupon rates at fixed or variable rates for specified intervals over the lives of the bonds. At the end of each specified interval, the coupon rate or variable rate spread increases (decreases) or steps up (steps down). These bond issues generally contain call provisions enabling the bonds to be called at FHLBank's discretion on the step dates.

 Table 8.3 summarizes interest rate payment terms for consolidated obligation bonds as of December 31, 2024 and 2023 (in thousands):

 Table 8.3

 $
 21,107,550
 $
 28,093,390

 Simple variable rate
 33,475,000
 19,524,000

 Step
 1,478,000
 1,792,000

 $
 56,060,550
 $
 49,409,390

 Consolidated Discount Notes: Table 8.4 summarizes FHLBank's participation in consolidated obligation discount notes, all of which are due within one year (dollar amounts in thousands):

 Table 8.4

 Carrying Value
 Weighted
 Rate1

 December 31, 2024
 $
 14,417,047
 $
 14,518,446
 4.40
 %

 December 31, 2023
 $
 20,743,249
 $
 20,903,145
 5.15
 %

 1 Represents yield to maturity excluding concession fees.

 Information about the fair value of the consolidated obligations is included in Note 14.

 NOTE 9 – AFFORDABLE HOUSING PROGRAM AND VOLUNTARY CONTRIBUTIONS

 The Bank Act requires each FHLBank to establish an AHP. As a part of its AHP, FHLBank provides subsidies in the form of direct grants or below-market interest rates on advances to members that provide the funds to assist in the purchase, construction or rehabilitation of housing for very low-, low- and moderate-income households. Each FHLBank recognizes AHP assessment expense equal to the greater of: (a) 10 percent of its previous year's income subject to assessment; or (b) the prorated sum required to ensure the aggregate contribution by all FHLBanks is no less than $100,000,000 each year, except that the required annual AHP contribution shall not exceed an FHLBank's net earnings in the previous year. For purposes of the AHP calculation, the term "income subject to assessment" is defined as income before interest expense related to mandatorily redeemable capital stock and the assessment for AHP. FHLBank accrues this expense monthly based on its income subject to assessment.

 The amount set aside for AHP is charged to expense and recognized as a liability. As subsidies are provided through the disbursement of grants or issuance of subsidized advances, the AHP liability is reduced accordingly. If FHLBank's income subject to assessment would ever be zero or less, the amount of AHP liability would generally be equal to zero. However, if the result of the aggregate 10 percent calculation described above is less than the $100,000,000 minimum for all FHLBanks as a group, then the Bank Act requires the shortfall to be allocated among FHLBanks based on the ratio of each FHLBank's income for the previous year. If an FHLBank determines that its required AHP contributions are exacerbating any financial instability of that FHLBank, it may apply to the FHFA for a temporary suspension of its AHP contributions under the Bank Act. FHLBank has never applied to the FHFA for a temporary suspension of its AHP contributions.

 In addition to the statutory AHP assessment, FHLBank may make voluntary contributions to the AHP or other housing and community investment initiatives. The income statement effects of voluntary contributions reduce net income before assessments which, in turn, reduces the statutory AHP assessment each year. As such, FHLBank has committed to make supplemental voluntary contributions to AHP by an amount that equals what the statutory AHP assessment would be in the absence of these effects. Statutory AHP assessments and all voluntary contributions to AHP are recorded in the AHP liability on the Statements of Condition. Statutory AHP assessments accrued in the current year are primarily awarded in the subsequent year and may be disbursed over several years.

 Table 9.1 details the change in the AHP liability for the years ended December 31, 2024, 2023, and 2022 (in thousands):

 Table 9.1

 2024
 2023
 2022

 Appropriated and reserved AHP funds as of the beginning of the period
 $
 77,794
 $
 53,635
 $
 42,224

 AHP set aside based on current year income
 48,101

 Current year non-statutory contributions1

 5,882
 —
 —

 Direct grants disbursed
 ( 29,346)
 ( 17,286)
 ( 15,653)

 Recaptured funds2

 Appropriated and reserved AHP funds as of the end of the period
 $
 102,494
 $
 77,794
 $
 53,635

 1 Current year non-statutory contributions are included in "Voluntary housing and community investment program contributions" on the Statements of Income.
 2 Recaptured funds are direct grants returned to FHLBank in those instances where the commitments associated with the approved use of funds are not met and repayment to FHLBank is required by regulation. Recaptured funds are returned as a result of: (1) AHP-assisted homeowner's transfer or sale of property within the five-year retention period that the assisted homeowner is required to occupy the property; (2) homeowner's failure to acquire sufficient loan funding (funds previously approved and disbursed cannot be used); (3) over-subsidized projects; or (4) previously disbursed but unused grants.

 As of December 31, 2024, FHLBank's AHP accrual on its Statements of Condition consisted of $ 50,135,000 for the 2025 AHP (uncommitted, including amounts recaptured and reallocated from prior years) and $ 52,359,000 for prior years' AHP (committed but undisbursed). Disbursements occur from project approval to physical completion, which is typically between one and four years.

 Other voluntary and community investment initiatives primarily consist of voluntary grants and contributions. Table 9.2 presents a rollforward of the voluntary contribution liability balance (non-AHP) for the years ended December 31, 2024, 2023, and 2022 (in thousands):

 Table 9.2

 2024
 2023
 2022

 Voluntary contribution liability as of the beginning of the period

 $
 —
 $
 —
 $
 —

 Voluntary housing and community investment expense (non-AHP)

 10,616
 3,000
 —

 Voluntary grants and donation payments made

 ( 7,350)
 ( 3,000)
 —

 Loan subsidies (mortgage loans)

 ( 36)
 —
 —

 Voluntary contribution liability as of the end of the period

 $
 3,230
 $
 —
 $
 —

 NOTE 10 – ASSETS AND LIABILITIES SUBJECT TO OFFSETTING

 FHLBank presents certain financial instruments, including derivatives, repurchase agreements and securities purchased under agreements to resell, on a net basis by clearing agent by Clearinghouse, or by counterparty, when it has met the netting requirements. For these financial instruments, FHLBank has elected to offset its asset and liability positions, as well as cash collateral received or pledged, including associated accrued interest.

 FHLBank has analyzed the enforceability of offsetting rights incorporated in its cleared derivative transactions and 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 clearing agent, or both. Based on this analysis, FHLBank presents a net derivative receivable or payable for all of its transactions through a particular clearing agent with a particular Clearinghouse.

 Tables 10.1 and 10.2 present the fair value of financial assets, including the related collateral received from or pledged to clearing agents or counterparties, based on the terms of FHLBank's master netting arrangements or similar agreements as of December 31, 2024 and 2023 (in thousands):

 Table 10.1

of Recognized
Assets
Offset
 Net Amounts
of Assets
Presented
 Not Offset
 Statement of
 Condition1

 Net

 Derivative assets:

 Uncleared derivatives
 $
 90,722
 $
 ( 86,061)
 $
 4,661
 $
 ( 30)
 $
 4,631

 Cleared derivatives
 4,961
 347,692
 352,653
 —
 352,653

 Total derivative assets
 95,683
 ( 30)
 357,284

 —
 ( 5,150,000)
 —

 TOTAL
 $
 5,245,683
 $
 $
 5,507,314
 $
 ( 5,150,030)
 $
 357,284

 1 Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

 Table 10.2

of Recognized
Assets
Offset
 Net Amounts
of Assets
Presented
 Not Offset
 Statement of
 Condition1

 Net

 Derivative assets:

 Uncleared derivatives
 $
 136,141
 $
 ( 133,650)
 $
 2,491
 $
 ( 133)
 $
 2,358

 Cleared derivatives
 3,114
 344,762
 347,876
 —
 347,876

 Total derivative assets
 139,255
 ( 133)
 350,234

 —
 ( 3,875,000)
 —

 TOTAL
 $
 4,014,255
 $
 $
 4,225,367
 $
 ( 3,875,133)
 $
 350,234

 1 Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

 Tables 10.3 and 10.4 present the fair value of financial liabilities, including the related collateral received from or pledged to counterparties, based on the terms of FHLBank's master netting arrangements or similar agreements as of December 31, 2024 and 2023 (in thousands):

 Table 10.3

of Recognized
Liabilities
Offset
 Net Amounts
of Liabilities
Presented
 Not Offset
 Statement of
 Condition1

 Net

 Derivative liabilities:

 Uncleared derivatives
 $
 225,991
 $
 ( 219,860)
 $
 6,131
 $
 ( 73)
 $
 6,058

 Cleared derivatives
 ( 376)
 —
 —
 —

 Total derivative liabilities
 6,131
 ( 73)
 6,058

 TOTAL
 $
 $
 $
 6,131
 $
 ( 73)
 $
 6,058

 1 Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

 Table 10.4

of Recognized
Liabilities
Offset
 Net Amounts
of Liabilities
Presented
 Not Offset
 Statement of
 Condition1

 Net

 Derivative liabilities:

 Uncleared derivatives
 $
 402,527
 $
 ( 401,667)
 $
 $
 ( 5)
 $

 Cleared derivatives
 8,225
 ( 8,225)
 —
 —
 —

 Total derivative liabilities
 ( 5)

 TOTAL
 $
 $
 $
 $
 ( 5)
 $

 1 Represents noncash collateral received on financial instruments that: (1) do not qualify for netting on the Statements of Condition; or (2) are not subject to an enforceable netting agreement (e.g., mortgage delivery commitments).

 NOTE 11 – CAPITAL

 Capital Requirements: FHLBank is subject to three capital requirements under the provisions of the Gramm-Leach-Bliley Act (GLB Act) and the FHFA's capital structure regulation. Regulatory capital does not include AOCI but does include mandatorily redeemable capital stock.
 • Risk-based capital. FHLBank must maintain at all times permanent capital in an amount at least equal to the sum of its credit risk, market risk and operational risk capital requirements. The risk-based capital requirements are all calculated in accordance with the rules and regulations of the FHFA. Only permanent capital, defined as the amounts paid-in for Class B Common Stock and retained earnings, can be used by FHLBank to satisfy its risk-based capital requirement. The FHFA may require FHLBank to maintain a greater amount of permanent capital than is required by the risk-based capital requirement as defined, but the FHFA has not placed any such requirement on FHLBank to date.
 • Total regulatory capital. The GLB Act requires FHLBank to maintain at all times at least a 4.0 percent total capital-to-asset ratio. Total regulatory capital is defined as the sum of permanent capital, Class A Common Stock, any general loss allowance, if consistent with GAAP and not established for specific assets, and other amounts from sources determined by the FHFA as available to absorb losses.
 • Leverage capital. FHLBank is required to maintain at all times a leverage capital-to-assets ratio of at least 5.0 percent, with the leverage capital ratio defined as the sum of permanent capital weighted 1.5 times and non-permanent capital (currently only Class A Common Stock) weighted 1.0 times, divided by total assets.

 Table 11.1 illustrates that FHLBank was in compliance with its regulatory capital requirements as of December 31, 2024 and 2023 (dollar amounts in thousands):

 Table 11.1

 Required
 Actual
 Required
 Actual

 Regulatory capital requirements:

 Risk-based capital
 $
 835,212
 $
 3,777,209
 $
 746,439
 $
 3,730,738

 Total regulatory capital-to-asset ratio
 4.0
 %
 5.6
 %
 4.0
 %
 5.4
 %

 Total regulatory capital
 $
 3,036,039
 $
 4,242,916
 $
 2,997,879
 $
 4,009,870

 Leverage capital ratio
 5.0
 %
 8.1
 %
 5.0
 %
 7.8
 %

 Leverage capital
 $
 3,795,049
 $
 6,131,521
 $
 3,747,349
 $
 5,875,238

 Capital Stock: FHLBank offers two classes of stock, Class A Common Stock and Class B Common Stock, each of which is issued, redeemed, and repurchased at a par value of $ 100 per share. Each member is required to hold capital stock to become and remain a member of FHLBank and enter into specified activities with FHLBank including, but not limited to, access to FHLBank's credit products and selling AMA to FHLBank. The amount of Class A Common Stock a member must acquire and maintain is the Asset-based Stock Purchase Requirement, which is currently equal to 0.1 percent of a member's total assets as of December 31 of the preceding calendar year, with a minimum requirement of $ 1,000, and a maximum requirement of $ 500,000. The amount of Class B Common Stock a member must acquire and maintain is the Activity-based Stock Purchase Requirement, which is currently equal to 4.5 percent of the principal amount of advances outstanding to the member plus 3.0 percent of the principal amount of AMA outstanding for the member, limited to a maximum of 3.0 percent of the member's total assets at the end of the prior calendar year, plus 0.25 percent of the principal amount of letters of credit outstanding less the member's Asset-based Stock Purchase Requirement.

 The percentages listed above are subject to change by FHLBank within ranges established in its capital plan. Changes to the percentages outside of the capital plan percentages require FHLBank to request FHFA approval of an amended capital plan. See Note 16 – Transactions with Stockholders for detailed information on transactions with related parties.

 Any member may make a written request not in connection with a notice of withdrawal or attaining non-member status for the redemption of a part of its Class A Common Stock or all or part of its Class B Common Stock (i.e., excess stock redemption request). Within five business days of receipt of a member's written redemption request, FHLBank may notify the member that it declines to repurchase the excess stock before the end of that five business day period, at which time the applicable redemption period shall commence. Otherwise, FHLBank will repurchase any excess stock within the five business day period. The redemption periods are six months for Class A Common Stock and five years for Class B Common Stock. Subject to certain limitations, FHLBank may choose to repurchase a member's excess stock on or before the end of the applicable redemption period. A member may cancel or revoke its written redemption request prior to the end of the redemption period or its written notice of withdrawal from membership. FHLBank's capital plan provides that FHLBank will charge the member a cancellation fee in accordance with a schedule where the amount of the fee increases with the passage of time.

 Under FHFA regulations, any member that withdraws from membership, or otherwise has its membership terminated, may not be readmitted to membership, or acquire any capital stock of any FHLBank, for a period of five years from the date on which the institution's membership terminated and it divested all of its shares of FHLBank stock.

 Stock Dividends: FHLBank's board of directors may declare and pay non-cumulative dividends, expressed as a percentage rate per annum based upon the par value of capital stock on shares of Class A Common Stock outstanding and on shares of Class B Common Stock outstanding, out of previously unrestricted retained earnings and current earnings in either cash or Class B Common Stock. There is no dividend preference between Class A Common Stockholders and Class B Common Stockholders up to the Dividend Parity Threshold (DPT). The DPT is a dividend rate expressed as a percentage per annum up to which the dividends paid per share on Class A Common Stock and Class B Common Stock must be equal. Dividend rates in excess of the DPT may be paid on Class A Common Stock or Class B Common Stock at the discretion of the board of directors, provided, however, that the dividend rate paid per annum on the Class B Common Stock equals or exceeds the dividend rate per annum paid on the Class A Common Stock for any dividend period. The DPT can be changed at any time by the board of directors but will only be effective for dividends paid at least 90 days after the date members are notified by FHLBank. The DPT effective for dividends paid during 2022 and the first quarter of 2023 was equal to the average overnight Federal funds effective rate minus 100 basis points. The DPT effective for dividends paid during the second quarter of 2023 and beyond was equal to the average overnight Federal funds effective rate minus 200 basis points. This DPT will continue to be effective until such time as it may be changed by FHLBank's board of directors. When the overnight Federal funds effective rate is below 2.00 percent, the DPT is zero for that dividend period (DPT is floored at zero).

 The board of directors cannot declare a dividend if: (1) FHLBank's capital position is below its minimum regulatory capital requirements; (2) FHLBank's capital position will be below its minimum regulatory capital requirements after paying the dividend; (3) the principal or interest due on any consolidated obligation of FHLBank has not been paid in full; (4) FHLBank fails to provide the FHFA the quarterly certification prior to declaring or paying dividends for a quarter; or (5) FHLBank fails to provide notification upon its inability to provide such certification or upon a projection that it will fail to comply with statutory or regulatory liquidity requirements or will be unable to timely and fully meet all of its current obligations.

 Mandatorily Redeemable Capital Stock: FHLBank is a cooperative whose members own most of FHLBank's capital stock. Former members (including certain non-members that own FHLBank capital stock as a result of merger or acquisition, relocation, charter termination, or involuntary termination of an FHLBank member) own the remaining capital stock to support business transactions still carried on FHLBank's Statements of Condition. Shares cannot be purchased or sold except between FHLBank and its members at a price equal to the $ 100 per share par value.

 Table 11.2 presents a roll-forward of mandatorily redeemable capital stock for the years ended December 31, 2024, 2023, and 2022 (in thousands):

 Table 11.2

 2024
 2023
 2022

 Balance, beginning of period
 $
 $
 $

 Capital stock subject to mandatory redemption reclassified from equity during the period

 368,951
 727,472
 812,692

 Capital stock redemption cancellations reclassified to equity during the period

 —
 ( 900)
 —

 Redemption or repurchase of mandatorily redeemable capital stock during the period

 ( 366,159)
 ( 726,618)
 ( 812,999)

 Stock dividend classified as mandatorily redeemable capital stock during the period

 Balance, end of period
 $
 3,225
 $
 $

 The accounting treatment for mandatorily redeemable capital stock does not affect the definition of regulatory capital for purposes of determining FHLBank's compliance with its regulatory capital requirements, calculating its mortgage securities investment authority (various percentages of total FHLBank capital depending on the date acquired), calculating its unsecured credit exposure to other GSEs (100 percent of total FHLBank capital), or calculating its unsecured credit limits to other counterparties (various percentages of total FHLBank capital depending on the rating of the counterparty).

 Excess Capital Stock: Excess capital stock is defined as the amount of stock held by a member (or former member) in excess of that institution's minimum stock purchase requirement. FHFA rules limit the ability of FHLBank to create excess member stock under certain circumstances. For example, FHLBank may not pay dividends in the form of capital stock or issue new excess stock to members if FHLBank's excess stock exceeds one percent of its total assets or if the issuance of excess stock would cause FHLBank's excess stock to exceed one percent of its total assets. As of December 31, 2024, FHLBank's excess stock was less than one percent of total assets.

 Capital Classification Determination: The FHFA 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 FHFA. Before implementing a reclassification, the Director of the FHFA is required to provide an FHLBank with written notice of the proposed action and an opportunity to submit a response. As of the most recent review by the FHFA, FHLBank Topeka was classified as adequately capitalized.

 NOTE 12 – ACCUMULATED OTHER COMPREHENSIVE INCOME

 Table 12.1 summarizes the changes in AOCI for the years ended December 31, 2024, 2023, and 2022 (in thousands):

 Table 12.1

 Year Ended

 Net Unrealized Gains (Losses) on Available-for-sale Securities (Note 3)

 Defined Benefit Pension Plan
 (Note 13)

 Total AOCI

 Balance at December 31, 2021
 $
 74,689
 $
 ( 2,374)
 $
 72,315

 Other comprehensive income (loss) before reclassification:

 Unrealized gains (losses)
 ( 159,132)
 ( 159,132)

 Net gains (losses) - defined benefit pension plan
 2,298
 2,298

 Reclassifications from other comprehensive income (loss) to net income:

 Amortization of net losses - defined benefit pension plan

 Net current period other comprehensive income (loss)
 ( 159,132)
 2,547
 ( 156,585)

 Balance at December 31, 2022
 ( 84,443)
 ( 84,270)

 Other comprehensive income (loss) before reclassification:

 Unrealized gains (losses)
 ( 34,501)
 ( 34,501)

 Net gains (losses) - defined benefit pension plan
 ( 200)
 ( 200)

 Net current period other comprehensive income (loss)
 ( 34,501)
 ( 200)
 ( 34,701)

 Balance at December 31, 2023
 ( 118,944)
 ( 27)
 ( 118,971)

 Other comprehensive income (loss) before reclassification:

 Unrealized gains (losses)
 ( 21,161)
 ( 21,161)

 Impact of settlements - defined benefit pension plan

 Net current period other comprehensive income (loss)
 ( 21,161)
 ( 20,991)

 Balance at December 31, 2024
 $
 ( 140,105)
 $
 $
 ( 139,962)

 NOTE 13 - PENSION AND POSTRETIREMENT BENEFIT PLANS

 Qualified Defined Benefit Multiemployer Plan: On November 21, 2024, FHLBank entered into an acceptance agreement with Midland National Life Insurance Company (Insurer) to purchase a non-participating, single-premium, general account group annuity contract and transferred to the Insurer the future benefit obligations and annuity administration for the participants under the Pentegra Defined Benefit Pension Plan. Upon payment of the single premium, FHLBank transferred the benefit payment responsibilities to the Insurer, subject to certain conditions set forth in the agreement. The purchase of the annuity contract was funded directly by assets of the plan. FHLBank incurred no expenses nor used any FHLBank assets in connection with the transaction.

 Qualified Defined Contribution Plans: FHLBank administers the Federal Home Loan Bank of Topeka 401(k) Plan, a tax-qualified, defined contribution pension plan. Substantially all officers and employees of FHLBank are covered by the plan. FHLBank contributes a non-matching contribution on behalf of all eligible employees in addition to a matching amount equal to a percentage of voluntary employee contributions, subject to certain limitations. FHLBank's contributions totaled $ 2,801,000, $ 2,567,000 and $ 2,344,000 for 2024, 2023, and 2022, respectively, and were charged to compensation and benefits expense.

 Nonqualified Supplemental Retirement Plan: FHLBank maintains a benefit equalization plan (BEP) covering certain senior officers and members of the board of directors. This non-qualified plan contains provisions for a deferred compensation component and a defined benefit pension component. In September 2019, FHLBank's board of directors elected to freeze the defined benefit component of the BEP on December 31, 2019, thereby discontinuing the future accrual of new benefits. The accumulated benefit obligation component of the BEP was $ 2,158,000 and $ 8,389,000 as of December 31, 2024 and 2023, respectively.

 There are no funded plan assets that have been designated to provide for the deferred compensation component or defined benefit pension component of the BEP. The obligations of the deferred compensation component of the BEP were $ 7,117,000 and $ 8,513,000 as of December 31, 2024 and 2023, respectively.

 NOTE 14 – FAIR VALUES

 The fair value amounts recorded on the Statements of Condition and presented in the note disclosures have been determined by FHLBank using available market and other pertinent information and reflect FHLBank'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., an exit price). Although FHLBank uses its best judgment in estimating the fair value of its financial instruments, there are inherent limitations in any valuation technique. Therefore, the fair values may not be indicative of the amounts that would have been realized in market transactions as of December 31, 2024 and 2023. Additionally, these values do not represent an estimate of the overall market value of FHLBank as a going concern, which would take into account future business opportunities and the net profitability of assets and liabilities.

 Subjectivity of Estimates: Estimates of the fair value of advances with options, mortgage instruments, and derivatives with embedded options are subjective and require judgments regarding significant matters such as the amount and timing of future cash flows, prepayment speed assumptions, expected interest rate volatility, methods to determine 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 Hierarchy: The fair value hierarchy requires FHLBank to maximize the use of observable inputs and minimize the use of 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 the market observability of the fair value measurement for the asset or liability. FHLBank must disclose the level within the fair value hierarchy in which the measurements are classified for all assets and liabilities.

 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 active markets that FHLBank can access on the measurement date. An active market for the 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: (1) quoted prices for similar assets and liabilities in active markets; (2) quoted prices for similar assets and liabilities in markets that are not active; (3) 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 (4) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
 • 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 include pricing models, discounted cash flow models using an unobservable discount rate, or similar techniques.

 FHLBank 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. There were no transfers of assets or liabilities between fair value levels during the years ended December 31, 2024 and 2023.

 Tables 14.1 and 14.2 present the carrying value, fair value and fair value hierarchy of financial assets and liabilities as of December 31, 2024 and 2023. FHLBank records trading securities, available-for-sale securities, derivative assets, and derivative liabilities at fair value on a recurring basis, and on occasion certain mortgage loans held for portfolio and certain other assets at fair value on a nonrecurring basis. FHLBank measures all other financial assets and liabilities at amortized cost. Further details about the financial assets and liabilities held at fair value on either a recurring or non-recurring basis are presented in Tables 14.3 and 14.4.

 The carrying value, fair value and fair value hierarchy of FHLBank's financial assets and liabilities as of December 31, 2024 and 2023 are summarized in Tables 14.1 and 14.2 (in thousands):

 Table 14.1

 Carrying
Value
 Total
Fair
Value
 Level 1
 Level 2
 Level 3
 Netting
 Adjustment and Cash
 Collateral1

 Assets:

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

 —
 —
 —

 —
 —
 —

 —
 —
 —

 Trading securities
 —
 —
 —

 Available-for-sale securities
 —
 13,033,440
 —

 Held-to-maturity securities
 217,476
 —
 187,027
 30,449
 —

 41,652,081
 41,678,915
 —
 41,678,915
 —
 —

 Mortgage loans held for portfolio, net of allowance

 8,949,433
 8,003,324
 —
 8,001,989
 1,335
 —

 Accrued interest receivable
 249,199
 249,199
 —
 249,199
 —
 —

 Derivative assets
 —
 95,683
 —

 Liabilities:

 989,021
 989,023
 —
 989,023
 —
 —

 Consolidated obligation discount notes

 14,417,047
 14,419,420
 —
 14,419,420
 —
 —

 Consolidated obligation bonds
 55,864,506
 55,000,797
 —
 55,000,797
 —
 —

 Mandatorily redeemable capital stock

 3,225
 3,225
 3,225
 —
 —
 —

 Accrued interest payable
 347,843
 347,843
 —
 347,843
 —
 —

 Derivative liabilities
 6,131
 6,131
 —
 —

 Other Asset (Liability):

 Industrial revenue bonds
 35,000
 33,112
 —
 33,112
 —
 —

 Financing obligation payable
 ( 35,000)
 ( 33,112)
 —
 ( 33,112)
 —
 —

 1 Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.

 Table 14.2

 Carrying
Value
 Total
Fair
Value
 Level 1
 Level 2
 Level 3
 Netting
 Adjustment
 and Cash
 Collateral1

 Assets:

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

 —
 —
 —

 —
 —
 —

 —
 —
 —

 Trading securities
 —
 —
 —

 Available-for-sale securities
 —
 —
 —

 Held-to-maturity securities
 260,653
 —
 225,444
 —

 45,444,769
 45,452,358
 —
 45,452,358
 —
 —

 Mortgage loans held for portfolio, net of allowance

 8,352,713
 7,493,015
 —
 7,490,867
 2,148
 —

 Accrued interest receivable
 204,243
 204,243
 —
 204,243
 —
 —

 Derivative assets
 —
 139,255
 —

 Liabilities:

 752,200
 752,209
 —
 752,209
 —
 —

 Consolidated obligation discount notes

 20,743,249
 20,743,707
 —
 20,743,707
 —
 —

 Consolidated obligation bonds
 49,047,489
 48,096,791
 —
 48,096,791
 —
 —

 Mandatorily redeemable capital stock

 —
 —
 —

 Accrued interest payable
 361,840
 361,840
 —
 361,840
 —
 —

 Derivative liabilities
 —
 —

 Other Asset (Liability):

 Industrial revenue bonds
 35,000
 32,695
 —
 32,695
 —
 —

 Financing obligation payable
 ( 35,000)
 ( 32,695)
 —
 ( 32,695)
 —
 —

 1 Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral and related accrued interest held or placed with the same clearing agent or derivative counterparty.

 Fair Value Methodologies and Techniques and Significant Inputs:
 The valuation methodologies 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 nonrecurring basis in the Statements of Condition are listed below. The fair values and level within the fair value hierarchy of these assets and liabilities are reported in Tables 14.3 and 14.4.

 Investment Securities: For long-term (as determined by original issuance date) investment securities, FHLBank obtains prices from multiple designated third-party pricing vendors when available. The pricing vendors use various proprietary models to price investments. The inputs to those models are derived from various sources including, but not limited to, benchmark yields, reported trades, dealer estimates, issuer spreads, benchmark securities, bids, offers and other market related data. Since many MBS are not traded daily, 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 challenge process in place for all valuations, which facilitates resolution of potentially erroneous prices identified by FHLBank. The use of multiple pricing vendors provides FHLBank with additional data points regarding levels of inputs and final prices that are used to validate final pricing of investment securities.

 Annually, FHLBank conducts reviews of the multiple pricing vendors to confirm and further augment its understanding of the vendors' pricing processes, methodologies, and control procedures. FHLBank's review process includes obtaining available vendors' independent auditors' reports regarding the internal controls over their valuation process, although the availability of pertinent reports varies by vendor.

 FHLBank utilizes a valuation technique for estimating the fair values of long-term investment securities as follows:
 FHLBank's valuation technique first requires the establishment of a median price for each security. If three prices are received, the middle price is used; if two prices are received, the average of the two prices is used; and if one price is received, it is used subject to validation.
 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.
 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.
 If, on the other hand, 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.
 If all prices received for a security are outside the tolerance threshold level of the median price, then there is no default price, and the final price is determined by an evaluation of all outlier prices as described above.

 As of December 31, 2024 and 2023, multiple prices were received for substantially all of FHLBank's long-term investment securities so the final prices for those securities were computed by averaging the prices received. Based on FHLBank's reviews of the pricing methods and controls employed by the third-party pricing vendors and the relative lack of dispersion among the vendor prices, FHLBank has concluded that its final prices result in reasonable estimates of fair value and that the fair value measurements are classified appropriately in the fair value hierarchy.

 Impaired Mortgage Loans Held for Portfolio and Real Estate Owned: The estimated fair values of impaired mortgage loans held for portfolio and REO on a nonrecurring basis are generally based on broker prices or property values obtained from a third-party pricing vendor. All estimated fair values of impaired mortgage loans held for portfolio and REO are net of any estimated selling costs.

 Derivative Assets/Liabilities: FHLBank bases the fair values of derivatives on instruments with similar terms or market prices, when available. However, active markets do not exist for many of FHLBank's derivatives. Consequently, fair values for these instruments are generally estimated using standard valuation techniques such as discounted cash flow analysis and comparisons to similar instruments. FHLBank is subject to credit risk due to the risk of nonperformance by counterparties to its derivative transactions. For uncleared derivatives, the degree of credit risk depends on the extent to which master netting arrangements are included in these contracts to mitigate the risk. In addition, FHLBank requires collateral agreements with collateral delivery thresholds on all of its uncleared derivatives. The use of cleared derivatives is intended to mitigate credit risk exposure because a central counterparty is substituted for individual counterparties and collateral is posted daily through a clearing agent for changes in the value of cleared derivatives. FHLBank has evaluated the potential for the fair value of the instruments to be impacted by counterparty credit risk and its own credit risk and has determined that no adjustments were significant or necessary to the overall fair value measurements of derivatives.

 The fair values of FHLBank's derivative assets and liabilities include accrued interest receivable/payable and 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. Derivatives are presented on a net basis by clearing agent by Clearinghouse or by counterparty when it has met the netting requirements. If these netted amounts are positive, they are classified as an asset and, if negative, a liability.

 The discounted cash flow model uses market-observable inputs. Inputs by class of derivative are as follows:
 Interest-rate related:
 • Discount rate assumption - Federal Funds Overnight Index Swap (OIS) or Secured Overnight Financing Rate (SOFR) swap curve depending on the terms of the derivative;
 • Forward interest rate assumption for rate resets - swap curve of index rate of the instrument (e.g., SOFR or Fed Funds Effective Rate); and
 • Volatility assumptions - market-based expectations of future interest rate volatility implied from current market prices for similar options.
 Mortgage delivery commitments:
 • To be announced (TBA) price - market-based prices of TBAs by coupon class and expected term until settlement.

 Fair Value Measurements: Tables 14.3 and 14.4 present, for each hierarchy level, FHLBank's assets and liabilities that are measured at fair value on a recurring or nonrecurring basis on the Statements of Condition as of or for the periods ended December 31, 2024 and 2023 (in thousands).

 Table 14.3

 Total
 Level 1
 Level 2
 Level 3
 Netting
 Adjustment and Cash
 Collateral1

 Recurring fair value measurements - Assets:

 Trading securities:

 $
 $
 —
 $
 $
 —
 $
 —

 —
 —
 —

 Total trading securities
 —
 —
 —

 Available-for-sale securities:

 —
 —
 —

 —
 —
 —

 9,718,954
 —
 9,718,954
 —
 —

 —
 —
 —

 Total available-for-sale securities
 —
 13,033,440
 —

 Derivative assets:

 Interest-rate related
 357,284
 —
 95,653
 —

 —
 —
 —

 Total derivative assets
 —
 95,683
 —

 TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS

 $
 13,854,896
 $
 —
 $
 13,569,086
 $
 $

 Recurring fair value measurements - Liabilities:

 Derivative liabilities:

 Interest-rate related
 $
 6,058
 $
 —
 $
 226,294
 $
 —
 $

 —
 —
 —

 Total derivative liabilities
 6,131
 —
 —

 TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES

 $
 6,131
 $
 —
 $
 $
 —
 $

 Nonrecurring fair value measurements - Assets2:

 Impaired mortgage loans
 $
 1,350
 $
 —
 $
 —
 $
 1,350
 $
 —

 TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS

 $
 1,350
 $
 —
 $
 —
 $
 1,350
 $
 —

 1 Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.
 2 Includes assets adjusted to fair value during the year ended December 31, 2024 and still outstanding as of December 31, 2024.

 Table 14.4

 Total
 Level 1
 Level 2
 Level 3
 Netting
 Adjustment
 and Cash
 Collateral1

 Recurring fair value measurements - Assets:

 Trading securities:

 $
 $
 —
 $
 $
 —
 $
 —

 —
 —
 —

 Total trading securities
 —
 —
 —

 Available-for-sale securities:

 —
 —
 —

 —
 —
 —

 8,708,050
 —
 8,708,050
 —
 —

 Total available-for-sale securities
 —
 —
 —

 Derivative assets:

 Interest-rate related
 350,234
 —
 139,122
 —

 —
 —
 —

 Total derivative assets
 —
 139,255
 —

 TOTAL RECURRING FAIR VALUE MEASUREMENTS - ASSETS

 $
 13,012,428
 $
 —
 $
 12,801,316
 $
 —
 $

 Recurring fair value measurements - Liabilities:

 Derivative liabilities:

 Interest-rate related
 $
 $
 —
 $
 410,747
 $
 —
 $

 —
 —
 —

 Total derivative liabilities
 —
 —

 TOTAL RECURRING FAIR VALUE MEASUREMENTS - LIABILITIES

 $
 $
 —
 $
 $
 —
 $

 Nonrecurring fair value measurements - Assets2:

 Held-to-maturity securities:

 Impaired mortgage loans
 $
 2,178
 $
 —
 $
 —
 $
 2,178
 $
 —

 Real estate owned
 —
 —
 —

 TOTAL NONRECURRING FAIR VALUE MEASUREMENTS - ASSETS

 $
 2,221
 $
 —
 $
 —
 $
 2,221
 $
 —

 1 Represents the effect of legally enforceable master netting agreements that allow FHLBank to net settle positive and negative positions and also derivative cash collateral, including related accrued interest, held or placed with the same clearing agent or derivative counterparty.
 2 Includes assets adjusted to fair value during the year ended December 31, 2023 and still outstanding as of December 31, 2023.

 NOTE 15 – COMMITMENTS AND CONTINGENCIES

 Joint and Several Liability: As provided in the Bank Act or in FHFA regulations, consolidated obligations are backed only by the financial resources of the FHLBanks. FHLBank Topeka is jointly and severally liable with the other FHLBanks for the payment of principal and interest on all of the consolidated obligations issued by the FHLBanks. The par amounts for which FHLBank Topeka is jointly and severally liable were approximately $ 1,122,389,398,000 and $ 1,134,003,465,000 as of December 31, 2024 and 2023, respectively.

 The joint and several obligations are mandated by FHFA regulations and are not the result of arms-length transactions among the FHLBanks. As described above, the FHLBanks have no control over the amount of the guaranty or the determination of how each FHLBank would perform under the joint and several liability. Because the FHLBanks are subject to the authority of the FHFA as it relates to decisions involving the allocation of the joint and several liability for all FHLBanks' consolidated obligations, FHLBank Topeka regularly monitors the financial condition of the other FHLBanks to determine whether it should expect a loss to arise from its joint and several obligations. If FHLBank were to determine that a loss was probable and the amount of the loss could be reasonably estimated, FHLBank would charge to income the amount of the expected loss. Based upon the creditworthiness of the other FHLBanks as of December 31, 2024, FHLBank Topeka has concluded that a loss accrual is not necessary at this time.

 Off-balance Sheet Commitments: Table 15.1 presents off-balance sheet commitments at December 31, 2024 and 2023 (in thousands). No allowance for credit losses was recorded on these commitments at December 31, 2024 and 2023.

 Table 15.1

 Notional Amount
 Expire
Within
One Year
 Expire
After
One Year
 Total
 Expire
Within
One Year
 Expire
After
One Year
 Total

 Standby letters of credit outstanding
 $
 7,531,038
 $
 11,772
 $
 7,542,810
 $
 7,242,988
 $
 5,670
 $
 7,248,658

 Advance commitments outstanding
 3,615
 5,115
 8,730
 48,526
 3,615
 52,141

 Principal commitments for standby bond purchase agreements
 193,815
 812,050
 1,005,865
 283,220
 716,295
 999,515

 Commitments to fund or purchase mortgage loans

 34,524
 —
 34,524
 41,641
 —
 41,641

 Commitments to issue consolidated bonds, at par

 250,000
 —
 250,000
 1,300,000
 —
 1,300,000

 Commitments to issue consolidated discount notes, at par

 200,000
 —
 200,000
 —
 —
 —

 Commitments to Extend Credit: FHLBank issues standby letters of credit on behalf of its members to support certain obligations of the members to third-party beneficiaries. These standby letters of credit are subject to the same collateralization and borrowing limits that are applicable to advances and are fully collateralized at the time of issuance with assets allowed by FHLBank's Member Products Policy (MPP). 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 for members for a fee. If FHLBank is required to make payment for a beneficiary's draw, the member either reimburses FHLBank for the amount drawn or, subject to FHLBank's discretion, the amount drawn may be converted into a collateralized advance to the member. However, standby letters of credit usually expire without being drawn upon. FHLBank's current outstanding standby letters of credit expire no later than 2029. Unearned fees as well as the value of the guarantees related to standby letters of credit are recorded in other liabilities and amounted to $ 2,571,000 and $ 2,367,000 as of December 31, 2024 and 2023, respectively. Advance commitments legally bind and unconditionally obligate FHLBank for additional advances up to 24 months in the future. Based upon management's credit analysis of members and collateral requirements under the MPP, FHLBank does not expect to incur any credit losses on the outstanding letters of credit or advance commitments.

 Standby Bond-Purchase Agreements: FHLBank has entered into standby bond purchase agreements with state housing authorities whereby FHLBank, for a fee, agrees to purchase and hold the authorities' bonds until the designated marketing agent can find a suitable investor or the housing authority repurchases the bond according to a schedule established by the standby agreement. Each standby agreement dictates the specific terms that would require FHLBank to purchase the bond and typically allows FHLBank to terminate the agreement upon the occurrence of a default event of the issuer. The bond purchase commitments entered into by FHLBank expire no later than 2029, though some are renewable at the option of FHLBank. As of December 31, 2024 and 2023, the total commitments for bond purchases included agreements with two in-district state housing authorities. FHLBank was not required to purchase any bonds under any agreements during the years ended December 31, 2024 and 2023.

 Commitments to Purchase Mortgage Loans: These commitments that unconditionally obligate FHLBank to purchase mortgage loans from participating FHLBank Topeka members in the MPF Program are generally for periods not to exceed 60 calendar days. Certain commitments are recorded as derivatives at their fair values on the Statements of Condition. FHLBank recorded mortgage delivery commitment net derivative balances of $( 43,000) and $ 128,000 as of December 31, 2024 and 2023, respectively.

 Commitments to Issue Consolidated Obligations: FHLBank enters into commitments to issue consolidated obligation bonds and discount notes outstanding in the normal course of its business. Most settle within the shortest period possible and are considered regular way trades; however, certain commitments are recorded as derivatives at their fair values on the Statements of Condition.

 Other Commitments: On June 28, 2017, FHLBank completed an industrial revenue bond financing transaction with Shawnee County, Kansas (County) that will provide property tax savings for 10 years on FHLBank's new headquarters. In the transaction, the County acquired an interest in the land, improvements, building and equipment (collectively, the Project) by issuing up to $ 36,000,000 of industrial revenue bonds due December 31, 2027 (IRBs) and leased the Project to FHLBank for an identical 127 -month term under a financing lease. The IRBs are collateralized by the Project and the lease revenues for the related leasing transaction with the County. The IRBs were purchased by FHLBank. The County assigned the lease to the bond trustee for FHLBank's benefit as the sole holder of the IRBs. FHLBank can prepay the IRBs at any time, but would forfeit its property tax benefit in the event the IRBs were to be prepaid. As a result, the land and building will remain a component of the property, plant and equipment in FHLBank's Statements of Condition. The IRBs and the equivalent liability are included in FHLBank's Statements of Condition in other assets and other liabilities, respectively. FHLBank, as holder of the IRBs, is due interest at 2.0 percent per annum with interest payable annual ly in arrears on December 1, beginning December 1, 2018. This interest income is directly offset by the financing interest expense payments on the land and building, which are due at the same time and in the same amount as the interest income. As of December 31, 2024 and 2023, $ 35,000,000 of the IRBs were issued and outstanding.

 Safekeeping Custodial Arrangements: FHLBank acts as a securities safekeeping custodian on behalf of participating members. Actual securities are held by a third-party custodian acting as agent for FHLBank. As of December 31, 2024, the total original par value of customer securities held by FHLBank under this arrangement was $ 79,436,206,000.

 Other commitments and contingencies are discussed in Notes 1, 4, 5, 6, 8, 9, 11 and 13.

 NOTE 16 – TRANSACTIONS WITH STOCKHOLDERS

 FHLBank is a cooperative whose members own most of the capital stock of FHLBank and generally receive dividends on their investments. In addition, certain former members that still have outstanding transactions are also required to maintain their investments in FHLBank capital stock until the transactions mature or are paid off. Nearly all outstanding advances are with current members, and the majority of outstanding mortgage loans held for portfolio were purchased from current or former members. FHLBank also maintains demand deposit accounts for members primarily to facilitate settlement activities that are directly related to advances and mortgage loan purchases.

 Transactions with members are entered into in the ordinary course of business. In instances where members also have officers or directors who are directors of FHLBank, transactions with those members are subject to the same eligibility and credit criteria, as well as the same terms and conditions, as other transactions with members. For financial reporting and disclosure purposes, FHLBank defines related parties as FHLBank directors' financial institutions and members with capital stock investments in excess of 10 percent of FHLBank's total regulatory capital stock outstanding, which includes mandatorily redeemable capital stock.

 Activity with Members that Exceed a 10 Percent Ownership in FHLBank Regulatory Capital Stock: Tables 16.1 and 16.2 present information on members that owned more than 10 percent of outstanding FHLBank regulatory capital stock as of December 31, 2024 and 2023 (dollar amounts in thousands). An officer of BOKF, N.A. currently serves on FHLBank's board of directors.

 Table 16.1

 Member Name
 State
 Total Class A Stock Par Value
 Percent of Total Class A
 Total Class B Stock Par Value
 Percent of Total Class B
 Total Capital Stock Par Value
 Percent of Total Capital Stock

 OK
 $
 23,043
 5.0
 %
 $
 473,097
 21.8
 %
 496,140
 18.8
 %

 OK
 190,087
 40.8
 137,990
 6.4
 328,077
 12.5

 TOTAL
 $
 213,130
 45.8
 %
 $
 611,087
 28.2
 %
 $
 824,217
 31.3
 %

 Table 16.2

 Member Name
 State
 Total Class A Stock Par Value
 Percent of Total Class A
 Total Class B Stock Par Value
 Percent of Total Class B
 Total Capital Stock Par Value
 Percent of Total Capital Stock

 OK
 $
 35,473
 12.7
 %
 $
 443,345
 19.0
 %
 $
 478,818
 18.4
 %

 OK
 0.2
 347,012
 14.9
 347,512
 13.3

 TOTAL
 $
 35,973
 12.9
 %
 $
 790,357
 33.9
 %
 $
 826,330
 31.7
 %

 Advance and deposit balances with members that owned more than 10 percent of outstanding FHLBank regulatory capital stock as of December 31, 2024 and 2023 are summarized in Table 16.3 (dollar amounts in thousands).

 Table 16.3

 Member Name
 Outstanding Advances
 Outstanding Advances
 Outstanding Deposits
 Outstanding Deposits

 $
 10,125,000
 24.2
 %
 $
 9,585,000
 21.0
 %
 $
 9,002
 0.9
 %
 $
 3,751
 0.5
 %

 3,000,000
 7.2
 7,675,000
 16.8
 72,761
 7.4
 22,325
 3.0
 %

 TOTAL
 $
 13,125,000
 31.4
 %
 $
 17,260,000
 37.8
 %
 $
 81,763
 8.3
 %
 $
 26,076
 3.5
 %

 Interest income from MidFirst Bank was $ 562,300,000, $ 585,100,000, and $ 179,200,000 for the years ended December 31, 2024, 2023, and 2022, respectively, which was in excess of ten percent of total revenue for those years. MidFirst Bank was the only member with interest income in excess of ten percent of revenue for 2024, 2023, and 2022.

 BOKF, N.A. sold $ 46,075,000 and $ 21,524,000 of mortgage loans into the MPF Program during the years ended December 31, 2024 and 2023. MidFirst Bank did not sell any mortgage loans into the MPF Program during the years ended December 31, 2024 and 2023.

 Transactions with FHLBank Directors' Financial Institutions: Table 16.4 presents information as of December 31, 2024 and 2023 for members that had an officer or director serving on FHLBank's board of directors (dollar amounts in thousands). Information is only included for the period in which the officer or director served on FHLBank's board of directors. Capital stock listed is regulatory capital stock, which includes mandatorily redeemable capital stock.

 Table 16.4

 Outstanding Amount
 Outstanding Amount

 $
 3,279,439
 7.8
 %
 $
 270,308
 0.6
 %

 $
 103,672
 10.5
 %
 $
 7,314
 1.0
 %

 Class A Common Stock
 $
 193,830
 41.6
 %
 $
 4,314
 1.5
 %

 Class B Common Stock
 154,135
 7.1
 14,924
 0.6

 TOTAL CAPITAL STOCK
 $
 347,965
 13.2
 %
 $
 19,238
 0.7
 %

 Table 16.5 presents mortgage loans acquired during the years ended December 31, 2024 and 2023 for members that had an officer or director serving on FHLBank's board of directors in 2024 or 2023 (dollar amounts in thousands). Information is only included for the period in which the officer or director served on FHLBank's board of directors.

 Table 16.5

 2024
 2023

 Mortgage loans acquired
 $
 75,404
 5.1
 %
 $
 17,510
 1.4
 %

 NOTE 17 – TRANSACTIONS WITH OTHER FHLBANKS

 FHLBank Topeka had the following business transactions with other FHLBanks during the years ended December 31, 2024, 2023, and 2022 as presented in Table 17.1 (in thousands). All transactions occurred at market prices.

 Table 17.1

 Business Activity
 2024
 2023
 2022

 Average overnight interbank loan balances to other FHLBanks1

 $
 $
 15,301
 $
 12,027

 Average overnight interbank loan balances from other FHLBanks1

 2,767
 3,288

 Average deposit balances with FHLBank of Chicago for interbank transactions2

 1,363

 Transaction charges paid to FHLBank of Chicago for transaction service fees3

 6,904
 6,413
 6,079

 Par amount of purchases of consolidated obligations issued on behalf of other FHLBanks4

 —
 —
 —

 _________
 1 Occasionally, FHLBank loans (or borrows) short-term funds to (from) other FHLBanks. Interest income on loans to other FHLBanks is included in Other Interest Income and interest expense on borrowings from other FHLBanks is included in Other Interest Expense on the Statements of Income.
 2 Balances are interest bearing and are classified on the Statements of Condition as interest-bearing deposits.
 3 Fees are calculated monthly based on outstanding loans at the per annum rate in effect at origination in addition to a flat fee for participating in the MPF Program.
 4 Interest income earned on debt securities issued by other FHLBanks totaled $ 0, $ 1,505,000, and $ 3,429,000 for the years ended December 31, 2024, 2023, and 2022, respectively. There were no debt securities issued by other FHLBanks held as investments at December 31, 2024 or 2023.

 From time to time, one FHLBank may transfer to another FHLBank the consolidated obligations for which the transferring FHLBank was originally the primary obligor but upon transfer the assuming FHLBank becomes the primary obligor. During the third quarter of 2024, FHLBank Topeka transferred debt obligations with a par amount of $ 610,000,000 to another FHLBank. During the same period, the other FHLBank transferred the same debt obligations back to FHLBank Topeka. During the first quarter of 2023, FHLBank Topeka transferred debt obligations with a par amount of $ 1,000,000,000 to another FHLBank. There were no other transfers of debt obligations to other FHLBanks during the years ended December 31, 2024, 2023, and 2022.