More Banks, Credit Unions Join Home Loan Bank

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The Federal Home Loan Bank of Topeka, Kan., is finding itself working for a different constituency as the number of commercial bank shareholders has risen to 72 percent.

In Oklahoma, bank members account for 76 percent of the total shareholders. The state has 84 member institutions, including 64 banks, 16 savings and loans and four credit unions.

"Many commercial banks and credit unions initially were skeptical about what we had to offer, but in just the last year, we added 65 commercial banks and five credit unions," said Frank A. Lowman, president.

The Federal Home Loan Bank system was formed in 1932 to promote home finance by providing a source of credit for savings and loans. The Topeka bank serves Oklahoma, Kansas, Colorado and Nebraska.

Banks and credit unions were not allowed to join the system until 1989 with the passage of the Financial Institutions Reform, Recovery and Enforcement Act, also known as FIRREA.

Lowman said before that legislation, "very few outside of the savings and loan industry knew about the bank or the myriad ways in which its credit products and correspondent services could help institutions mitigate their interest rate risk or increase their mortgage-lending capabilities."

The Topeka bank reported that its membership grew by 31.9 percent during 1993 to 289, up from 219 in 1992. By February, the bank had added its 300th shareholder when a Colorado bank joined.

Lowman also attributed growth in the bank to stockholders' ability to participate in affordable housing and community investment programs.

During 1993, the bank awarded $2.1 million in Affordable Housing Program subsidies to 14 institutions for use in developing 700 rental and home ownership units for people with low incomes. The bank has allocated $2.7 million to be used for such programs during 1994.

Beginning this year, the bank also will set aside a minimum of 10 percent of its net income for the program. Based on recent earnings, the 10 percent minimum would increase program funds. In 1993, the bank had a net income of $35 million, which would have made $3.5 million available for the affordable housing program.

Stockholders also borrowed $116 million through the Community Investment Program to rehabilitate housing projects and revitalize downtown businesses to benefit low-income people.

"Stockholders and potential stockholders find these programs attractive not only because of the funding flexibility but also because of the technical assistance our community investment staff can provide them in meeting their Community Reinvestment Act requirements," Lowman said.

Assets at the Topeka bank totaled $9.3 billion at the end of 1993, up 22 percent from $7.6 billion a year earlier. Advances, or loans to members, grew by 25.7 percent to $4.4 billion, up from $3.5 billion at the end of 1992. . . Mike Wynn has joined Bank IV Nichols Hills as senior vice president responsible for retail and private banking. He had been vice president of relationship banking and commercial business development for Bank IV Kansas City.

He has 14 years of commercial and retail experience and has been with Bank IV for seven years. …