Bank Directors Seminar, Coeur d'Alene, ID, September 15-17, 2019

FHLB DES MOINES OVERVIEW MEMBER CREDIT

Executive Summary of credit trends

Credit remains strong

FHLBank System ramping up to accept eNotes

Credit events limited to specific instances

eNotes

Rally in rates assisting valuation

Industry & Regulatory Outreach

Ongoing regulatory outreach for depositories and insurance companies

Actively communicating to membership if/when credit turns and what impact this may have on borrowing limits and restrictions

Communication

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FHLB DES MOINES MEMBER CREDIT

First Line of Defense (FLOD)

• First line of defense active in collecting information that may be helpful in assessing credit risk

• Portfolio reviews conducted on quarterly basis, assessing changes in CAMEL Score and TEXAS ratio analysis

• Thresholds established based on historical trends and regulatory interpretation

• Qualitative commentary added to include member dialogue and interaction

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