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

FHLB DES MOINES MEMBER CREDIT

Collateral Eligibility

• FHLB Des Moines establishes an Eligibility Factor (EF) after assessing eligibility and underwriting quality of a sample loan portfolio following a Member Collateral Verification (MCV) review. • The EF is one of the primary ratios used to an institution’s Advance Equivalent (AE), the maximum collateral amount available to members to secure extensions of credit. • Overall, our members do an outstanding job at pledging only eligible loans. Average eligibility from MCV reviews is around 90 percent (see graphic below). • This high level isn’t surprising; accurately pledging eligible loans is rooted in large part by member practice.

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FHLB DES MOINES OVERVIEW MEMBER CREDIT

1Q 2019 Median Ratios by Credit Limit and Institution Type

Banks and Thrifts Credit Limit

45% 80% 79% 78% 77% 76% 78% 77% 77% 82% 82% 82% 77% 75%

35% 14% 15% 16% 17% 17% 15% 16% 15% 10% 10% 10% 14% 15%

25%

≤20%

1Q 2019 4Q 2018 3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017 2Q 2017 1Q 2017 4Q 2016 3Q 2016 2Q 2016 1Q 2016

4% 4% 5% 5% 5% 5% 5% 6% 5% 6% 6% 7% 8%

1% 1% 1% 1% 2% 2% 2% 2% 2% 2% 2% 2% 3%

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