10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________ 

FORM 10-Q

_____________________________________

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

For the quarterly period ended June 30, 2013

OR

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

Commission File Number: 000-51845

 _____________________________________ 

FEDERAL HOME LOAN BANK OF ATLANTA

(Exact name of registrant as specified in its charter)

_____________________________________  

Federally chartered corporation	56-6000442
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1475 Peachtree Street, NE, Atlanta, Ga.	30309
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (404) 888-8000

_____________________________________  

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 for the past 90 days.    ý  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ý  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

The number of shares outstanding of the registrant’s Class B Stock, par value $100, as of July 31, 2013 was 47,373,230.

Table of Contents

PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements (Unaudited)	3
	STATEMENTS OF CONDITION	3
	STATEMENTS OF INCOME	4
	STATEMENTS OF COMPREHENSIVE INCOME	5
	STATEMENTS OF CAPITAL	6
	STATEMENTS OF CASH FLOWS	7
	NOTES TO FINANCIAL STATEMENTS	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57
Item 4.	Controls and Procedures	61
PART II. OTHER INFORMATION		62
Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 3.	Defaults Upon Senior Securities	62
Item 4.	Mine Safety Disclosure	63
Item 5.	Other Information	63
Item 6.	Exhibits	63
SIGNATURES		64

PART I. FINANCIAL INFORMATION.

Item 1. Financial Statements.

FEDERAL HOME LOAN BANK OF ATLANTA

STATEMENTS OF CONDITION

(Unaudited)

(In millions, except par value)

	As of June 30, 2013		As of December 31, 2012
Assets
Cash and due from banks	$	23	$	4,083
Interest-bearing deposits (including deposits with another FHLBank of $1 as of June 30, 2013 and December 31, 2012)	1,006		1,005
Securities purchased under agreements to resell	1,000		250
Federal funds sold	5,342		7,235
Trading securities (includes another FHLBank’s bond of $70 and $77 as of June 30, 2013 and December 31, 2012, respectively)	2,060		2,370
Available-for-sale securities	2,536		2,676
Held-to-maturity securities (fair value of $18,944 and $17,124 as of June 30, 2013 and December 31, 2012, respectively)	18,881		16,918
Mortgage loans held for portfolio, net of allowance for credit losses on mortgage loans of $12 and $11 as of June 30, 2013 and December 31, 2012, respectively	1,064		1,244
Advances	89,450		87,503
Accrued interest receivable	220		240
Premises and equipment, net	30		32
Derivative assets	21		13
Other assets	145		136
Total assets	$	121,778	$	123,705
Liabilities
Interest-bearing deposits	$	2,172	$	2,094
Consolidated obligations, net:
Discount notes	26,161		31,737
Bonds	86,196		82,947
Total consolidated obligations, net	112,357		114,684
Mandatorily redeemable capital stock	25		40
Accrued interest payable	238		229
Affordable Housing Program payable	75		80
Derivative liabilities	235		158
Other liabilities	225		145
Total liabilities	115,327		117,430
Commitments and contingencies (Note 13)
Capital
Capital stock Class B putable ($100 par value) issued and outstanding shares:
Subclass B1 issued and outstanding shares: 9 and 12 as of June 30, 2013 and December 31, 2012, respectively	940		1,160
Subclass B2 issued and outstanding shares: 39 and 37 as of June 30, 2013 and December 31, 2012, respectively	3,907		3,738
Total capital stock Class B putable	4,847		4,898
Retained earnings:
Restricted	105		73
Unrestricted	1,432		1,362
Total retained earnings	1,537		1,435
Accumulated other comprehensive income (loss)	67		(58		)
Total capital	6,451		6,275
Total liabilities and capital	$	121,778	$	123,705

The accompanying notes are an integral part of these financial statements.

3

FEDERAL HOME LOAN BANK OF ATLANTA

STATEMENTS OF INCOME

(Unaudited)

(In millions)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Interest income
Advances	$	61		$	76		$	124		$	142
Prepayment fees on advances, net	1			3			1			5
Interest-bearing deposits	1			2			3			3
Federal funds sold	3			5			6			10
Trading securities	25			27			53			62
Available-for-sale securities	32			44			65			85
Held-to-maturity securities	60			78			123			161
Mortgage loans held for portfolio	17			20			33			41
Total interest income	200			255			408			509
Interest expense
Consolidated obligations:
Discount notes	6			6			14			9
Bonds	108			144			221			309
Deposits	—			1			—			1
Mandatorily redeemable capital stock	—			1			—			2
Total interest expense	114			152			235			321
Net interest income	86			103			173			188
Provision for credit losses	1			—			3			3
Net interest income after provision for credit losses	85			103			170			185
Noninterest income (loss)
Total other-than-temporary impairment losses	—			—			(1		)	—
Net amount of impairment losses (reclassified from) recorded in other comprehensive income (loss)	—			(8		)	1			(15		)
Net impairment losses recognized in earnings	—			(8		)	—			(15		)
Net losses on trading securities	(40		)	(4		)	(64		)	(33		)
Net gains (losses) on derivatives and hedging activities	75			(1		)	117			53
Letters of credit fees	5			4			10			9
Other	1			3			2			3
Total noninterest income (loss)	41			(6		)	65			17
Noninterest expense
Compensation and benefits	17			16			33			31
Other operating expenses	11			10			21			18
Finance Agency	1			3			4			6
Office of Finance	2			1			3			2
Total noninterest expense	31			30			61			57
Income before assessments	95			67			174			145
Affordable Housing Program assessments	9			7			17			15
Net income	$	86		$	60		$	157		$	130

The accompanying notes are an integral part of these financial statements.

4

FEDERAL HOME LOAN BANK OF ATLANTA

STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In millions)

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2013		2012			2013			2012
Net income	$	86	$	60		$	157		$	130
Other comprehensive income (loss):
Net noncredit portion of other-than-temporary impairment losses on available-for-sale securities:
Noncredit losses transferred from held-to-maturity securities	—		—			(1		)	—
Net change in fair value on other-than-temporary impairment available-for-sale securities	43		(10		)	125			109
Reclassification of noncredit portion of impairment losses included in net income	—		8			—			15
Net noncredit portion of other-than-temporary impairment losses on available-for-sale securities	43		(2		)	124			124
Net noncredit portion of other-than-temporary impairment losses on held-to-maturity securities:
Noncredit losses on held-to-maturity securities	—		—			(1		)	—
Reclassification of noncredit portion from held-to-maturity securities to available-for-sale securities	—		—			1			—
Net noncredit portion of other-than-temporary impairment losses on held-to-maturity securities	—		—			—			—
Pension and postretirement benefits:
Total other comprehensive income	1		1			1			1
Total other comprehensive income (loss)	44		(1		)	125			125
Total comprehensive income	$	130	$	59		$	282		$	255

The accompanying notes are an integral part of these financial statements.

5

FEDERAL HOME LOAN BANK OF ATLANTA

STATEMENTS OF CAPITAL

(Unaudited)

(In millions)

	Capital Stock Class B Putable					Retained Earnings								Accumulated Other Comprehensive Income (Loss)			Total Capital
	Shares		Par Value			Restricted		Unrestricted			Total
Balance, December 31, 2011	57		$	5,718		$	19	$	1,235		$	1,254		$	(411	)	$	6,561
Issuance of capital stock	6		531			—		—			—			—			531
Repurchase/redemption of capital stock	(12	)	(1,189		)	—		—			—			—			(1,189		)
Net shares reclassified to mandatorily redeemable capital stock	(1	)	(53		)	—		—			—			—			(53		)
Comprehensive income	—		—			26		104			130			125			255
Cash dividends on capital stock	—		—			—		(40		)	(40		)	—			(40		)
Balance, June 30, 2012	50		$	5,007		$	45	$	1,299		$	1,344		$	(286	)	$	6,065
Balance, December 31, 2012	49		$	4,898		$	73	$	1,362		$	1,435		$	(58	)	$	6,275
Issuance of capital stock	23		2,327			—		—			—			—			2,327
Repurchase/redemption of capital stock	(24	)	(2,371		)	—		—			—			—			(2,371		)
Net shares reclassified to mandatorily redeemable capital stock	—		(7		)	—		—			—			—			(7		)
Comprehensive income	—		—			32		125			157			125			282
Cash dividends on capital stock	—		—			—		(55		)	(55		)	—			(55		)
Balance, June 30, 2013	48		$	4,847		$	105	$	1,432		$	1,537		$	67		$	6,451

The accompanying notes are an integral part of these financial statements.

6

FEDERAL HOME LOAN BANK OF ATLANTA

STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)

	For the Six Months Ended June 30,
	2013			2012
Operating activities
Net income	$	157		$	130
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	(39		)	(24		)
Provision for credit losses	3			3
(Gain) loss due to change in net fair value adjustment on derivative and hedging activities	(24		)	146
Net change in fair value adjustment on trading securities	64			33
Net impairment losses recognized in earnings	—			15
Net change in:
Accrued interest receivable	20			40
Other assets	(9		)	6
Affordable Housing Program payable	(8		)	(13		)
Accrued interest payable	9			(29		)
Other liabilities	(2		)	(14		)
Total adjustments	14			163
Net cash provided by operating activities	171			293
Investing activities
Net change in:
Interest-bearing deposits	894			153
Securities purchased under agreements to resell	(750		)	—
Federal funds sold	1,893			(418		)
Trading securities:
Proceeds from maturities	250			690
Available-for-sale securities:
Proceeds from maturities	277			318
Held-to-maturity securities:
Net change in short-term	50			25
Proceeds from maturities of long-term	1,964			1,946
Purchases of long-term	(3,904		)	(2,142		)
Advances:
Proceeds from principal collected	71,397			97,168
Made	(74,744		)	(92,177		)
Mortgage loans held for portfolio:
Proceeds from principal collected	162			200
Proceeds from sale of foreclosed assets	14			7
Purchase of premise, equipment, and software	(1		)	(1		)
Net cash (used in) provided by investing activities	(2,498		)	5,769

7

FEDERAL HOME LOAN BANK OF ATLANTA STATEMENTS OF CASH FLOWS—(Continued) (Unaudited) (In millions)
	For the Six Months Ended June 30,
	2013			2012
Financing activities
Net change in deposits	70			(512		)
Net payments on derivatives containing a financing element	(84		)	(185		)
Proceeds from issuance of consolidated obligations:
Discount notes	105,474			187,553
Bonds	44,572			42,643
Payments for debt issuance costs	(5		)	(6		)
Payments for maturing and retiring consolidated obligations:
Discount notes	(111,045		)	(190,457		)
Bonds	(40,594		)	(44,169		)
Proceeds from issuance of capital stock	2,327			531
Payments for repurchase/redemption of capital stock	(2,371		)	(1,189		)
Payments for repurchase/redemption of mandatorily redeemable capital stock	(22		)	(224		)
Cash dividends paid	(55		)	(40		)
Net cash used in financing activities	(1,733		)	(6,055		)
Net (decrease) increase in cash and due from banks	(4,060		)	7
Cash and due from banks at beginning of the period	4,083			6
Cash and due from banks at end of the period	$	23		$	13
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	239		$	365
Affordable Housing Program assessments, net	$	22		$	26
Noncash investing and financing activities:
Net shares reclassified to mandatorily redeemable capital stock	$	7		$	53
Held-to-maturity securities acquired with accrued liabilities	$	83		$	—
Transfer of held-to-maturity securities to available-for-sale securities	$	11		$	6
Transfers of mortgage loans to real estate owned	$	16		$	6

The accompanying notes are an integral part of these financial statements.

8

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

Note 1—Basis of Presentation

The accompanying unaudited interim financial statements of the Federal Home Loan Bank of Atlanta (Bank) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and income and expenses during the reporting period. Actual results could be different from these estimates. The foregoing interim financial statements are unaudited; however, in the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the results for the interim periods, have been included. The results of operations for interim periods are not necessarily indicative of results to be expected for the year ending December 31, 2013, or for other interim periods. The unaudited interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2012, which are contained in the Bank’s 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 22, 2013 (Form 10-K).

The Bank has certain financial instruments, including derivative instruments and securities purchased under agreements to resell, that are subject to offset under master netting arrangements or by operation of law. The Bank has elected to offset its derivative asset and liability positions, as well as cash collateral received or pledged, when it has the legal right of offset under these master agreements. The Bank does not have any offsetting liabilities related to its securities purchased under agreements to resell for the periods presented.

The net exposure for these financial instrumentscan 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. There may be a delay for excess collateral to be returned.  For derivative instruments, any excess cash collateral received or pledged is recognized as a derivative liability or derivative asset based on the terms of the individual master agreement between the Bank and its derivative counterparty.  Additional information regarding these agreements is provided in Note 11–Derivatives and Hedging Activities. Based on the fair value of the related securities held as collateral, the securities purchased under agreements to resell were fully collateralized for the periods presented. Additional information about the Bank's investments in securities purchased under agreements to resell is disclosed in Note 2–Summary of Significant Accounting Policies to the 2012 audited financial statements contained in the Bank's Form 10-K.

A description of all of the Bank’s significant accounting policies is included in Note 2–Summary of Significant Accounting Policies to the 2012 audited financial statements contained in the Bank’s Form 10-K. There have been no material changes to these policies as of June 30, 2013.

Note 2—Recently Issued and Adopted Accounting Guidance

Recently Issued Accounting Guidance

Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes.  In July 2013, the Financial Accounting Standards Board (FASB) issued guidance permitting the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge accounting purposes, in addition to the U.S. Treasury Rate and the London Interbank Offered Rate (LIBOR).  This guidance is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013.  The adoption of this guidance did not have any effect on the Bank's financial condition or results of operations, as the Bank has not designated any hedging relationships using OIS as the benchmark interest rate.

Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.  In February 2013, the FASB issued guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This guidance requires an entity to measure these obligations as the sum of (1) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (2) any additional amount the reporting entity expects to pay on behalf of its co-obligors. This guidance is effective for interim and annual periods beginning on or after December 15, 2013 and will be applied retrospectively to obligations with joint and several liabilities existing at the beginning of an entity's fiscal year of adoption. This guidance is not expected to materially affect the Bank's financial condition or results of operations. 

9

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

Recently Adopted Accounting Guidance

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. In January 2013, the FASB issued amended guidance to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. For public entities, this amended guidance is effective for reporting periods beginning after December 15, 2012. The Bank adopted this guidance effective January 1, 2013, which resulted in additional disclosures. The adoption of this guidance did not have any effect on the Bank's financial condition or results of operations.

Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. In January 2013, the FASB issued guidance to clarify the scope of transactions that are subject to previously issued guidance on disclosures about offsetting assets and liabilities. The disclosure guidance on offsetting assets and liabilities applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with GAAP or subject to a master netting arrangement or similar agreement. This guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Bank adopted and applied this guidance retrospectively effective January 1, 2013 for all comparative periods presented, which resulted in additional disclosures. The adoption of this guidance did not have any effect on the Bank's financial condition or results of operations.

Disclosures about Offsetting Assets and Liabilities. In December 2011, FASB issued disclosure requirements that are intended to help investors and other financial statement users better assess the effect or potential effect of offsetting arrangements on an entity’s financial position. Entities are required to disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, entities are required to disclose collateral received and posted in connection with master netting agreements or similar arrangements. This guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Bank adopted and applied this guidance retrospectively effective January 1, 2013 for all comparative periods presented, which resulted in additional disclosures. The adoption of this guidance did not have any effect on the Bank's financial condition or results of operations.

Note 3—Trading Securities

Major Security Types. Trading securities were as follows:

	As of June 30, 2013		As of December 31, 2012
Government-sponsored enterprises debt obligations	$	1,989	$	2,291
Another FHLBank’s bond (1)	70		77
State or local housing agency debt obligations	1		2
Total	$	2,060	$	2,370

 ____________

⁽¹⁾  The Federal Home Loan Bank of Chicago is the primary obligor of this consolidated obligation bond.

Net unrealized and realized losses on trading securities were as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Net unrealized losses on trading securities held at period end	$	(40	)	$	(4	)	$	(62	)	$	(26	)
Net unrealized/realized losses on trading securities sold/matured during the period	—			—			(2		)	(7		)
Net losses on trading securities	$	(40	)	$	(4	)	$	(64	)	$	(33	)

Note 4—Available-for-sale Securities

During the six months ended June 30, 2013 and 2012, the Bank transferred certain private-label mortgaged-backed securities (MBS) from its held-to-maturity portfolio to its available-for-sale portfolio. These securities represent private-label MBS in the Bank’s held-to-maturity portfolio for which the Bank has recorded an other-than-temporary impairment loss. The Bank believes

10

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

the other-than-temporary impairment loss constitutes evidence of a significant deterioration in the issuer’s creditworthiness. The Bank has no current plans to sell these securities nor is the Bank under any requirement to sell these securities.

The following table presents information on private-label MBS transferred. The amounts below represent the values as of the transfer date.

	2013						2012
	Amortized     Cost		Other-than-temporary Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Estimated Fair Value		Amortized     Cost		Other-than-temporary Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Estimated Fair Value
Transferred at March 31,	$	12	$	1	$	11	$	6	$	—	$	6
Transferred at June 30,	—		—		—		—		—		—
Total	$	12	$	1	$	11	$	6	$	—	$	6

Major Security Types. Available-for-sale securities were as follows:

	As of June 30, 2013
	Amortized     Cost		Other-than-temporary Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Private-label MBS	$	2,453	$	44	$	127	$	—	$	2,536

	As of December 31, 2012
	Amortized   Cost		Other-than-temporary   Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Gross   Unrealized   Gains		Gross   Unrealized   Losses		Estimated Fair Value
Private-label MBS	$	2,717	$	120	$	79	$	—	$	2,676

The following tables summarize the available-for-sale securities with unrealized losses. The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

	As of June 30, 2013
	Less than 12 Months					12 Months or More					Total
	Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses
Private-label MBS	7	$	323	$	7	11	$	382	$	37	18	$	705	$	44
	As of December 31, 2012
	Less than 12 Months					12 Months or More					Total
	Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized    Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses
Private-label MBS	3	$	154	$	1	26	$	1,240	$	119	29	$	1,394	$	120

11

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

A summary of available-for-sale MBS issued by members or affiliates of members follows:

	As of June 30, 2013
	Amortized   Cost		Other-than-temporary   Impairment Recognized in Other Accumulated Comprehensive Income (Loss)		Gross   Unrealized   Gains		Gross   Unrealized   Losses		Estimated   Fair  Value
Bank of America Corporation, Charlotte, NC	$	1,549	$	41	$	81	$	—	$	1,589
	As of December 31, 2012
	Amortized Cost		Other-than-temporary Impairment Recognized in Other Accumulated Comprehensive Income (Loss)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Bank of America Corporation, Charlotte, NC	$	1,712	$	112	$	41	$	—	$	1,641

Note 5—Held-to-maturity Securities

Major Security Types. Held-to-maturity securities were as follows:

	As of June 30, 2013								As of December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value
Certificates of deposit	$	500	$	—	$	—	$	500	$	550	$	—	$	—	$	550
State or local housing agency debt obligations	98		1		—		99		106		2		—		108
Government-sponsored enterprises debt obligations	3,277		2		28		3,251		2,133		—		—		2,133
Mortgage-backed securities:
U.S. agency obligations-guaranteed	532		8		—		540		622		8		—		630
Government-sponsored enterprises	12,207		131		40		12,298		10,763		184		2		10,945
Private-label	2,267		15		26		2,256		2,744		36		22		2,758
Total	$	18,881	$	157	$	94	$	18,944	$	16,918	$	230	$	24	$	17,124

12

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

The following tables summarize the held-to-maturity securities with unrealized losses. The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

	As of June 30, 2013
	Less than 12 Months					12 Months or More					Total
	Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses
Certificates of Deposit	3	$	500	$	—	—	$	—	$	—	3	$	500	$	—
Government-sponsored enterprises debt obligations	5	1,116		28		—	—		—		5	1,116		28
Mortgage-backed securities:
Government-sponsored enterprises	28	2,463		40		—	—		—		28	2,463		40
Private-label	50	1,198		17		18	268		9		68	1,466		26
Total	86	$	5,277	$	85	18	$	268	$	9	104	$	5,545	$	94

	As of December 31, 2012
	Less than 12 Months					12 Months or More					Total
	Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses
Government-sponsored enterprises debt obligations	3	$	750	$	—	—	$	—	$	—	3	$	750	$	—
Mortgage-backed securities:
Government-sponsored enterprises	1	154		1		1	13		1		2	167		2
Private-label	—	—		—		43	974		22		43	974		22
Total	4	$	904	$	1	44	$	987	$	23	48	$	1,891	$	24

Redemption Terms. The amortized cost and estimated fair value of held-to-maturity securities by contractual maturity are shown below. Expected maturities of some securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

	As of June 30, 2013				As of December 31, 2012
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Non-mortgage-backed securities:
Due in one year or less	$	1,040	$	1,040	$	1,092	$	1,093
Due after one year through five years	2,835		2,810		1,697		1,698
Total non-mortgage-backed securities	3,875		3,850		2,789		2,791
Mortgage-backed securities	15,006		15,094		14,129		14,333
Total	$	18,881	$	18,944	$	16,918	$	17,124

The amortized cost of the Bank’s MBS classified as held-to-maturity includes net discounts of $1 and $8 as of June 30, 2013 and December 31, 2012, respectively.

13

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

A summary of held-to-maturity MBS issued by members or affiliates of members follows:

	As of June 30, 2013								As of December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value
Bank of America Corporation, Charlotte, NC	$	743	$	6	$	7	$	742	$	896	$	11	$	8	$	899

Note 6—Other-than-temporary Impairment

The Bank evaluates its individual available-for-sale and held-to-maturity securities holdings in an unrealized loss position for other-than-temporary impairment on a quarterly basis. As part of this process, the Bank considers its intent to sell each debt security and whether it is more likely than not the Bank will be required to sell the security before its anticipated recovery. If either of these conditions is met, the Bank recognizes the maximum impairment loss in earnings which is equal to the entire difference between the security’s amortized cost basis and its fair value as of the Statements of Condition dates. For securities in an unrealized loss position that meet neither of these conditions, the Bank evaluates whether there is other-than-temporary impairment by performing an analysis to determine if any of these securities will incur a credit loss, which could be up to the difference between the security’s amortized cost basis and its fair value.

Mortgage-backed Securities. The Bank’s investments in MBS consist of U.S. agency guaranteed securities and senior tranches of private-label MBS. The Bank has increased exposure to the risk of loss on its investments in MBS when the loans backing the MBS exhibit high rates of delinquency and foreclosures, as well as losses on the sale of foreclosed properties. The Bank regularly requires high levels of credit enhancements from the structure of the collateralized mortgage obligation to reduce its risk of loss on such securities. Credit enhancements are defined as the percentage of subordinate tranches, overcollateralization, or excess spread, or the support of monoline insurance, if any, in a security structure that will absorb the losses before the security the Bank purchased will take a loss. The Bank does not purchase credit enhancements for its MBS from monoline insurance companies.

The Bank’s investments in private-label MBS were rated “AAA” (or its equivalent) by a nationally recognized statistical rating organization (NRSRO), such as Moody’s Investors Service (Moody’s) and Standard and Poor’s Ratings Services (S&P), at their purchase dates. The “AAA”-rated securities achieved their ratings through credit enhancement, overcollateralization and senior-subordinated shifting interest features; the latter results in subordination of payments by junior classes to ensure cash flows to the senior classes. The ratings on a significant number of the Bank’s private-label MBS have changed since their purchase dates.

Non-private-label MBS. The unrealized losses related to U.S. agency MBS are caused by interest rate changes and not credit quality. These securities are guaranteed by government agencies or government-sponsored enterprises (GSEs) and the Bank does not expect these securities to be settled at a price less than their amortized cost basis. In addition, the Bank does not intend to sell these investments and it is not more likely than not that the Bank will be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The Bank does not consider these investments to be other-than-temporarily impaired as of June 30, 2013.

Private-label MBS. To assess whether the entire amortized cost basis of its private-label MBS will be recovered, the Bank performs a cash flow analysis for each of its private-label MBS. In performing the cash flow analysis for each of these securities, the Bank uses two third-party models. The first model considers borrower characteristics and the particular attributes of the loans underlying the Bank’s securities, in conjunction with assumptions about future changes in home prices and interest rates, to project prepayments, defaults, and loss severities. A significant input to the first model is the forecast of future housing price changes for the relevant states and core based statistical areas (CBSAs), which are based upon an assessment of the individual housing markets. The term CBSA refers collectively to metropolitan and micropolitan statistical areas as defined by the United States Office of Management and Budget; as currently defined, a CBSA must contain at least one urban area of 10,000 or more people. The Bank’s housing price forecast as of June 30, 2013 included a short-term housing price forecast using whole percentages, with projected changes ranging from negative five percent to seven percent over the 12 month period beginning April 1, 2013.

14

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

For the vast majority of markets, the short-term forecast has changes from negative three percent to five percent. Thereafter, home prices were projected to recover using one of five different recovery paths. The following table presents projected home price recovery ranges by months as of June 30, 2013:

Months	Annualized Rates (%)
1 to 6	0.00 to 3.00
7 to 12	1.00 to 4.00
13 to 18	2.00 to 4.00
19 to 30	2.00 to 5.00
31 to 54	2.00 to 6.00
Thereafter	2.30 to 5.60

The month-by-month projections of future loan performance derived from the first model, which reflect projected prepayments, defaults, and loss severities, were then input into a second model that allocates the projected loan level cash flows and losses to the various security classes in the securitization structure in accordance with its prescribed cash flow and loss allocation rules. The model classifies securities based on current characteristics and performance, which may be different from the securities’ classification as determined by the originator at the time of origination.

At each quarter end, the Bank compares the present value of the cash flows (discounted at the securities' effective yield) expected to be collected with respect to its private-label MBS to the amortized cost basis of the security to determine whether a credit loss exists. For the Bank’s variable rate and hybrid private-label MBS, the Bank uses a forward interest rate curve to project the future estimated cash flows. The Bank then uses the effective interest rate for the security prior to impairment for determining the present value of the future estimated cash flows. For securities previously identified as other-than-temporarily impaired, the Bank updates its estimate of future estimated cash flows on a quarterly basis. There were no securities for which an other-than-temporary-impairment was determined to have occurred during the three-month period ended June 30, 2013.

The following table presents a roll-forward of the amount of credit losses on the Bank’s investment securities recognized in earnings for which a portion of the other-than-temporary loss was recognized in accumulated other comprehensive income (loss):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Balance of credit losses previously recognized in earnings, beginning of period	$	586		$	589		$	586		$	582
Amount related to credit loss for which an other-than-temporary impairment was previously recognized	—			8			—			15
Increase in cash flows expected to be collected, recognized over the remaining life of the securities	(2		)	(5		)	(2		)	(5		)
Balance of cumulative credit losses recognized in earnings, end of period	$	584		$	592		$	584		$	592

Certain other private-label MBS that have not been designated as other-than-temporarily impaired have experienced unrealized losses and decreases in fair value due to interest rate volatility, illiquidity in the marketplace, and general disruption in the U.S. mortgage markets. These declines in fair value are considered temporary as the Bank expects to recover the amortized cost basis of the securities, the Bank does not intend to sell these securities, and it is not more likely than not that the Bank will be required to sell these securities before the anticipated recovery of the securities’ remaining amortized cost basis, which may be at maturity. This assessment is based on the fact that the Bank has sufficient capital and liquidity to operate its business and has no need to sell these securities, nor has the Bank entered into any contractual constraints that would require the Bank to sell these securities.

15

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

Note 7—Advances

Redemption Terms. The Bank had advances outstanding, as summarized below.

	As of June 30, 2013			As of December 31, 2012
Overdrawn demand deposit accounts	$	5		$	2
Due in one year or less	46,446			41,482
Due after one year through two years	7,309			7,915
Due after two years through three years	5,071			4,735
Due after three years through four years	8,236			5,821
Due after four years through five years	6,975			8,758
Due after five years	13,181			15,157
Total par value	87,223			83,870
Discount on AHP(1)	(9		)	(11		)
Discount on EDGE(2) advances	(7		)	(8		)
Hedging adjustments	2,248			3,658
Deferred commitment fees	(5		)	(6		)
Total	$	89,450		$	87,503

___________

⁽¹⁾ The Affordable Housing Program

⁽²⁾ The Economic Development and Growth Enhancement program

The following table summarizes advances by year of contractual maturity or, for convertible advances, next conversion date:

	As of June 30, 2013		As of December 31, 2012
Overdrawn demand deposit accounts	$	5	$	2
Due or convertible in one year or less	50,417		46,198
Due or convertible after one year through two years	7,402		7,886
Due or convertible after two years through three years	4,942		4,748
Due or convertible after three years through four years	7,222		5,368
Due or convertible after four years through five years	5,175		6,570
Due or convertible after five years	12,060		13,098
Total par value	$	87,223	$	83,870

Interest-rate Payment Terms. The following table details interest-rate payment terms for advances:

	As of June 30, 2013		As of December 31, 2012
Fixed-rate:
Due in one year or less	$	43,191	$	38,307
Due after one year	31,967		33,425
Total fixed-rate	75,158		71,732
Variable-rate:
Due in one year or less	3,261		3,177
Due after one year	8,804		8,961
Total variable-rate	12,065		12,138
Total par value	$	87,223	$	83,870

16

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

Credit Risk. The Bank’s potential credit risk from advances is concentrated in commercial banks, thrifts, and credit unions and further is concentrated in certain larger borrowing relationships. As of June 30, 2013 and December 31, 2012, the concentration of the Bank’s advances was $65,857 and $62,488, respectively, to 10 member institutions, representing 75.5 percent and 74.5 percent, respectively, of total advances outstanding.

Based on the collateral pledged as security for advances, the Bank's credit analysis of members’ financial condition, and prior repayment history, no allowance for credit losses on advances was deemed necessary by the Bank as of June 30, 2013 and December 31, 2012. No advance was past due as of June 30, 2013 and December 31, 2012.

Note 8—Consolidated Obligations

Consolidated obligations, consisting of consolidated obligation bonds and discount notes, are the joint and several obligations of the 12 Federal Home Loan Banks (FHLBanks) and are backed only by the financial resources of the FHLBanks. The Federal Home Loan Banks Office of Finance (Office of Finance) tracks the amount of debt issued on behalf of each FHLBank. In addition, the Bank separately tracks and records as a liability its specific portion of consolidated obligations for which it is the primary obligor.

Interest-rate Payment Terms. The following table details the Bank’s consolidated obligation bonds by interest-rate payment type:

	As of June 30, 2013		As of December 31, 2012
Fixed-rate	$	71,609	$	76,212
Step up/down	7,454		4,419
Simple variable-rate	6,750		1,250
Variable-rate capped floater	45		20
Total par value	$	85,858	$	81,901

Redemption Terms. The following is a summary of the Bank’s participation in consolidated obligation bonds outstanding, by year of contractual maturity:

	As of June 30, 2013				As of December 31, 2012
	Amount			Weighted- average Interest Rate (%)	Amount			Weighted- average Interest Rate (%)
Due in one year or less	$	43,727		0.70	$	55,397		0.79
Due after one year through two years	10,088			1.35	7,587			2.08
Due after two years through three years	7,854			1.87	2,507			1.92
Due after three years through four years	7,709			2.47	3,344			4.25
Due after four years through five years	5,270			2.21	6,298			2.82
Due after five years	11,210			1.91	6,768			2.31
Total par value	85,858			1.30	81,901			1.36
Premiums	94				91
Discounts	(30		)		(34		)
Hedging adjustments	274				989
Total	$	86,196			$	82,947

17

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

The Bank’s consolidated obligation bonds outstanding by call feature:

	As of June 30, 2013		As of December 31, 2012
Noncallable	$	63,082	$	71,880
Callable	22,776		10,021
Total par value	$	85,858	$	81,901

The following table summarizes the Bank’s consolidated obligation bonds outstanding, by year of contractual maturity or, for callable consolidated obligation bonds, next call date:

	As of June 30, 2013		As of December 31, 2012
Due or callable in one year or less	$	61,990	$	62,540
Due or callable after one year through two years	9,910		6,550
Due or callable after two years through three years	4,044		2,136
Due or callable after three years through four years	6,184		3,024
Due or callable after four years through five years	2,427		6,028
Due or callable after five years	1,303		1,623
Total par value	$	85,858	$	81,901

Consolidated Obligation Discount Notes. Consolidated obligation discount notes are issued to raise short-term funds. Consolidated obligation discount notes are consolidated obligations with contractual maturities of up to one year. These consolidated obligation discount notes are issued at less than their face amounts and redeemed at par value when they mature.

The Bank’s participation in consolidated obligation discount notes was as follows:

	Book Value		Par Value		Weighted-average Interest Rate (%)
As of June 30, 2013	$	26,161	$	26,167	0.08
As of December 31, 2012	$	31,737	$	31,745	0.12

Note 9—Capital and Mandatorily Redeemable Capital Stock

Capital. The Bank was in compliance with the Federal Housing Finance Agency's (Finance Agency) regulatory capital rules and requirements as shown in the following table:

	As of June 30, 2013						As of December 31, 2012
	Required			Actual			Required			Actual
Risk based capital	$	2,089		$	6,408		$	1,625		$	6,373
Total capital-to-assets ratio	4.00		%	5.26		%	4.00		%	5.15		%
Total regulatory capital (1)	$	4,871		$	6,408		$	4,948		$	6,373
Leverage ratio	5.00		%	7.89		%	5.00		%	7.73		%
Leverage capital	$	6,089		$	9,612		$	6,185		$	9,560

___________

⁽¹⁾  Mandatorily redeemable capital stock is considered capital for regulatory purposes, and “total regulatory capital” includes the Bank’s $25and $40 in mandatorily redeemable capital stock as of June 30, 2013 and December 31, 2012, respectively.

18

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

Mandatorily Redeemable Capital Stock. The following table provides the activity in mandatorily redeemable capital stock:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Balance, beginning of period	$	34		$	328		$	40		$	286
Capital stock subject to mandatory redemption reclassified from equity during the period due to:
Attainment of non-member status	3			1			7			81
Withdrawal	—			—			—			1
Repurchase/redemption of mandatorily redeemable capital stock	(12		)	(214		)	(22		)	(224		)
Capital stock no longer subject to redemption due to the transfer of stock from a non-member to a member	—			—			—			(29		)
Balance, end of period	$	25		$	115		$	25		$	115

The following table shows the amount of mandatorily redeemable capital stock by year of redemption. The year of redemption in the table is the end of the five-year redemption period, or with respect to activity-based stock, the later of the expiration of the five-year redemption period or the activity’s maturity date.

	As of June 30, 2013		As of December 31, 2012
Due in one year or less	$	2	$	—
Due after one year through two years	7		12
Due after two years through three years	9		9
Due after three years through four years	6		17
Due after four years through five years	—		1
Due after five years	1		1
Total	$	25	$	40

19

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

Note 10—Accumulated Other Comprehensive Income (Loss)

Components comprising accumulated other comprehensive income (loss) were as follows:

	Pension and Postretirement Benefits			Noncredit Portion of Other-than- temporary Impairment  Losses on Available-for- sale Securities			Noncredit Portion of Other-than-temporary Impairment Losses on Held-to-maturity Securities			Total  Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2011	$	(13	)	$	(398	)	$	—		$	(411	)
Other comprehensive loss before reclassifications:
Net change in fair value	—			109			—			109
Reclassification from other comprehensive loss to net income:
Noncredit other-than-temporary impairment losses	—			15			—			15
Amortization of pension and postretirement(1)	1			—			—			1
Net current period other comprehensive income	1			124			—			125
Balance, June 30, 2012	$	(12	)	$	(274	)	$	—		$	(286	)
Balance, December 31, 2012	$	(17	)	$	(41	)	$	—		$	(58	)
Other comprehensive loss before reclassifications:
Noncredit other-than-temporary impairment losses	—			—			(1		)	(1		)
Noncredit other-than-temporary impairment losses transferred	—			(1		)	1			—
Net change in fair value	—			125			—			125
Reclassification from other comprehensive loss to net income:
Amortization of pension and postretirement(1)	1			—			—			1
Net current period other comprehensive income	1			124			—			125
Balance, June 30, 2013	$	(16	)	$	83		$	—		$	67

___________

⁽¹⁾ Included in Compensation and benefits on the Statements of Income.

Note 11—Derivatives and Hedging Activities

Nature of Business Activity

The Bank is exposed to interest-rate risk primarily from the effect of interest rate changes on its interest-earning assets and its funding sources that finance these assets. The goal of the Bank’s interest-rate risk management strategies is not to eliminate interest-rate risk, but to manage it within appropriate limits. To mitigate the risk of loss, the Bank has established policies and procedures, which include guidelines on the amount of exposure to interest rate changes it is willing to accept. In addition, the Bank monitors the risk to its interest income, net interest margin, and average maturity of interest-earning assets and funding sources. For additional information on the Bank’s derivatives and hedging activities, see Note 18—Derivatives and Hedging Activities to the 2012 audited financial statements contained in the Bank’s Form 10-K.

The Bank transacts most of its derivatives with large banks and major broker-dealers. Some of these banks and broker-dealers or their affiliates buy, sell, and distribute consolidated obligations. Derivative transactions may be either over-the-counter with a counterparty (bilateral derivatives) or over-the-counter cleared through a Futures Commission Merchant (i.e., clearing member) with a Central Counterparty Clearinghouse (Clearinghouse). Derivative transactions cleared through a clearing member with a Clearinghouse are referred to as "cleared derivatives." The Bank is not a derivatives dealer and thus does not trade derivatives for short-term profit.

Financial Statement Effect and Additional Financial Information

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

20

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

The following table summarizes the fair value of derivative instruments. For purposes of this disclosure, the derivative values include the fair value of derivatives and the related accrued interest.

	As of June 30, 2013								As of December 31, 2012
	Notional Amount of Derivatives		Derivative Assets			Derivative Liabilities			Notional Amount of Derivatives		Derivative Assets			Derivative Liabilities
Derivatives in hedging relationships:
Interest rate swaps	$	101,097	$	941		$	(2,801	)	$	102,660	$	1,129		$	(3,689	)
Total derivatives in hedging relationships	101,097		941			(2,801		)	102,660		1,129			(3,689		)
Derivatives not designated as hedging instruments:
Interest rate swaps	7,578		20			(372		)	9,570		29			(497		)
Interest rate caps or floors	12,500		48			(35		)	12,500		32			(22		)
Total derivatives not designated as hedging instruments	20,078		68			(407		)	22,070		61			(519		)
Total derivatives before netting and collateral adjustments	$	121,175	1,009			(3,208		)	$	124,730	1,190			(4,208		)
Netting adjustments			(915		)	915					(1,089		)	1,089
Cash collateral and related accrued interest			(73		)	2,058					(88		)	2,961
Total collateral and netting adjustments (1)			(988		)	2,973					(1,177		)	4,050
Derivative assets and derivative liabilities			$	21		$	(235	)			$	13		$	(158	)

___________

⁽¹⁾  Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral and related accrued interest held or placed with the same counterparties.

The following tables present the components of net gains (losses) on derivatives and hedging activities as presented in the Statements of Income:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Derivatives and hedged items in fair value hedging relationships:
Interest rate swaps	$	53		$	36		$	95		$	87
Total net gains related to fair value hedge ineffectiveness	53			36			95			87
Derivatives not designated as hedging instruments:
Interest rate swaps	37			(3		)	62			24
Interest rate caps or floors	7			(10		)	4			(4		)
Net interest settlements	(22		)	(24		)	(44		)	(54		)
Total net gains (losses) related to derivatives not designated as hedging instruments	22			(37		)	22			(34		)
Net gains (losses) on derivatives and hedging activities	$	75		$	(1	)	$	117		$	53

The following tables present, by type of hedged item, the gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on the Bank’s net interest income:

	For the Three Months Ended June 30,
	2013												2012
Hedged Item Type	Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)			Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)
Advances	$	991		$	(931	)	$	60		$	(264	)	$	(345	)	$	386		$	41		$	(362	)
Consolidated obligations bonds	(528		)	521			(7		)	159			5			(10		)	(5		)	146
Total	$	463		$	(410	)	$	53		$	(105	)	$	(340	)	$	376		$	36		$	(216	)

____________

⁽¹⁾  The net interest on derivatives in fair value hedge relationships is presented in the interest income or expense line item of the respective hedged item.

21

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

	For the Six Months Ended June 30,
	2013												2012
Hedged Item Type	Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)			Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)
Advances	$	1,372		$	(1,265	)	$	107		$	(538	)	$	152		$	(45	)	$	107		$	(748	)
Consolidated obligations bonds	(710		)	698			(12		)	319			(45		)	25			(20		)	289
Total	$	662		$	(567	)	$	95		$	(219	)	$	107		$	(20	)	$	87		$	(459	)

____________

⁽¹⁾  The net interest on derivatives in fair value hedge relationships is presented in the interest income or expense line item of the respective hedged item.

Managing Credit Risk on Derivatives

The Bank is subject to credit risk due to the risk of nonperformance by counterparties to its derivative agreements and manages credit risk through credit analysis, collateral requirements, and adherence to the requirements set forth in its policies and Finance Agency regulations. For bilateral derivatives, the degree of credit risk depends on the extent to which master netting arrangements are included in such contracts to mitigate the risk. The Bank manages credit risk through credit analysis, collateral requirements, and adherence to the requirements set forth in Bank policies and Finance Agency regulations. The Bank requires collateral agreements with collateral delivery thresholds on all bilateral derivatives. For cleared derivatives, the Clearinghouse is the Bank's counterparty. The requirement that the Bank post initial and variation margin through the clearing member for delivery to the Clearinghouse exposes the Bank to institutional credit risk in the event that the clearing member or the Clearinghouse fails to meet its obligations. The use of cleared derivatives mitigates credit risk exposure because a central counterparty is substituted for individual counterparties and collateral is posted daily for changes in the value of cleared derivatives through a clearing member. Additionally, collateral related to derivatives with member institutions includes collateral assigned to the Bank, as evidenced by a written security agreement and held by the member institution for the benefit of the Bank. Based on credit analyses and collateral requirements, the Bank presently does not anticipate any credit losses on its existing derivative agreements as of June 30, 2013.

The Bank enters into derivative instruments that are subject to offset under master netting arrangements or by operation of law. Where the Bank has a legal right of offset, it has elected to offset, by clearing member and/or by counterparty, the gross derivative assets and gross derivative liabilities and the related received or pledged cash collateral and associated accrued interest.

22

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

The following table presents the fair value of derivative instruments with the legal right of offset, including the related collateral received from or pledged to counterparties, based on the terms of the Bank's master netting arrangements or similar agreements.

	As of June 30, 2013						As of December 31, 2012
	Derivative Assets			Derivative Liabilities			Derivative Assets			Derivative Liabilities
Gross recognized amount:
Bilateral derivatives	$	1,006		$	(3,208	)	$	1,190		$	(4,208	)
Cleared derivatives	3			—			—			—
Total gross recognized amount	1,009			(3,208		)	1,190			(4,208		)
Gross amounts of netting adjustments and cash collateral:
Bilateral derivatives	(1,000		)	2,973			(1,177		)	4,050
Cleared derivatives	12			—			—			—
Total gross amounts of netting adjustments and cash collateral	(988		)	2,973			(1,177		)	4,050
Derivative assets and derivative liabilities:
Bilateral derivatives	6			(235		)	13			(158		)
Cleared derivatives	15			—			—			—
Total derivative assets and total derivative liabilities	21			(235		)	13			(158		)
Non-cash collateral received or pledged not offset-cannot be sold or repledged:(1)
Bilateral derivatives	—			—			1			—
Cleared derivatives	—			—			—			—
Total cannot be sold or repledged	—			—			1			—
Net unsecured amounts: (2)
Bilateral derivatives	6			(235		)	12			(158		)
Cleared derivatives	15			—			—			—
Total net unsecured amount	$	21		$	(235	)	$	12		$	(158	)

____________ 

⁽¹⁾ Collateral held with respect to derivatives with member institutions where the Bank is acting as an intermediary represents the amount of eligible collateral physically held by or on behalf of the Bank or collateral assigned to the Bank, as evidenced by a written security agreement, and held by the member institution for the benefit of the Bank.

⁽²⁾ The Bank had net credit exposure of $15 and $8 as of June 30, 2013 and December 31, 2012, respectively, due to instances where the Bank’s pledged collateral to a counterparty exceeds the Bank’s net derivative liability position.

Certain of the Bank’s bilateral derivative instruments contain provisions that require the Bank to post additional collateral with its counterparties if there is deterioration in the Bank’s credit rating. If the Bank’s credit rating is lowered by a NRSRO, the Bank may be required to deliver additional collateral on bilateral derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position (before cash collateral and related accrued interest) as of June 30, 2013 was $2,065 for which the Bank has posted collateral with a fair value of $2,283 in the normal course of business. If the Bank’s credit ratings had been lowered from its current rating to the next lower rating that would have triggered additional collateral to be delivered, the Bank would have been required to deliver an additional $135 of collateral (at fair value) to its derivative counterparties as of June 30, 2013.

Note 12—Estimated Fair Values

The Bank records trading securities, available-for-sale securities, derivative assets and liabilities, and grantor trust assets (publicly-traded mutual funds) at estimated fair value on a recurring basis. Fair value is a market-based measurement and is defined 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. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the assets or owes the liability. In general, the transaction price will equal the exit price and, therefore, represent the fair value of the asset or liability at initial recognition. In determining whether a transaction price represents the fair value of the asset or liability at initial recognition, each reporting entity is required to consider factors specific to the transaction and the asset or liability, the principal or most advantageous market for the asset or liability, and market participants with whom the entity would transact in the market.

23

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

A fair value hierarchy is used to prioritize the inputs of valuation techniques used to measure fair value. The inputs are evaluated and an overall level for the fair value measurement is determined. This overall level is an indication of how market-observable the fair value measurement is and defines the level of disclosure. The fair value hierarchy defines fair value in terms of a price in an orderly transaction between market participants to sell an asset or transfer a liability in the principal (or most advantageous) market for the asset or liability at the measurement date (an exit price). In order to determine the fair value or the exit price, entities must determine the unit of account, highest and best use, principal market, and market participants. These determinations allow the reporting entity to define the inputs for fair value and level of hierarchy.

Outlined below is the application of the “fair value hierarchy” to the Bank's financial assets and financial liabilities that are carried at fair value.

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. 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. As of June 30, 2013 and December 31, 2012, the Bank carried grantor trust assets at fair value hierarchy Level 1.

Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. As of June 30, 2013 and December 31, 2012, the Bank carried trading securities and derivatives at fair value hierarchy Level 2.

Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs are supported by little or no market activity and reflect the entity's own assumptions. As of June 30, 2013 and December 31, 2012, the Bank carried available-for-sale securities at fair value hierarchy Level 3.

The Bank utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

Fair Value on a Recurring Basis. The following tables present, for each fair value hierarchy level, the Bank’s financial assets and liabilities that are measured at fair value on a recurring basis on its Statements of Condition:

	As of June 30, 2013
	Fair Value Measurements Using							Netting Adjustment (1)
	Level 1		Level 2			Level 3					Total
Assets
Trading securities:
Government-sponsored enterprises debt obligations	$	—	$	1,989		$	—	$	—		$	1,989
Other FHLBank’s bond	—		70			—		—			70
State or local housing agency debt obligations	—		1			—		—			1
Total trading securities	—		2,060			—		—			2,060
Available-for-sale securities:
Private-label MBS	—		—			2,536		—			2,536
Derivative assets:
Interest-rate related	—		1,009			—		(988		)	21
Grantor trust (included in Other assets)	17		—			—		—			17
Total assets at fair value	$	17	$	3,069		$	2,536	$	(988	)	$	4,634
Liabilities
Derivative liabilities:
Interest-rate related	$	—	$	(3,208	)	$	—	$	2,973		$	(235	)
Total liabilities at fair value	$	—	$	(3,208	)	$	—	$	2,973		$	(235	)

____________ 

⁽¹⁾  Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral held or placed with the same counterparties.

24

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

	As of December 31, 2012
	Fair Value Measurements Using							Netting Adjustment (1)
	Level 1		Level 2			Level 3					Total
Assets
Trading securities:
Government-sponsored enterprises debt obligations	$	—	$	2,291		$	—	$	—		$	2,291
Other FHLBank’s bond	—		77			—		—			77
State or local housing agency debt obligations	—		2			—		—			2
Total trading securities	—		2,370			—		—			2,370
Available-for-sale securities:
Private-label MBS	—		—			2,676		—			2,676
Derivative assets:
Interest-rate related	—		1,190			—		(1,177		)	13
Grantor trust (included in Other assets)	17		—			—		—			17
Total assets at fair value	$	17	$	3,560		$	2,676	$	(1,177	)	$	5,076
Liabilities
Derivative liabilities:
Interest-rate related	$	—	$	(4,208	)	$	—	$	4,050		$	(158	)
Total liabilities at fair value	$	—	$	(4,208	)	$	—	$	4,050		$	(158	)

____________ 

⁽¹⁾  Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral held or placed with the same counterparties.

For financial instruments carried at fair value, the Bank reviews the fair value hierarchy classification of financial assets and liabilities on a quarterly basis. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in/out at fair value as of the beginning of the quarter in which the changes occur. There were no such transfers during the periods presented.

The following table presents a reconciliation of available-for-sale securities that are measured at fair value using significant unobservable inputs (Level 3):

	For the Six Months Ended June 30,
	2013			2012
Balance, beginning of period	$	2,676		$	2,942
Transfer of private-label MBS from held-to-maturity to available-for-sale	11			6
Total (losses) gains realized and unrealized: (1)
Included in net impairment losses recognized in earnings	—			(15		)
Included in other comprehensive income (2)	125			124
Accretion of credit losses in net interest income	1			2
Settlements	(277		)	(318		)
Balance, end of period	$	2,536		$	2,741

____________ 

⁽¹⁾  Related to available-for-sale securities held at period end.

⁽²⁾  This amount is included in other comprehensive income (loss) within the net change in fair value on other-than-temporary impairment available-for-sale securities and reclassification of noncredit portion of impairment losses included in net income.

Described below are the Bank's fair value measurement methodologies for financial assets and liabilities measured or disclosed at fair value.

Cash and Due from Banks. The estimated fair value approximates the recorded carrying value.

Interest-bearing Deposits. The estimated fair value is determined by calculating the present value of the expected future cash flows from the deposits and reducing this amount for accrued interest receivable. The discount rate used in these calculations is the rate for deposits with similar terms and represents market observable rates.

25

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

Securities purchased under agreements to resell. The estimated fair value is determined by calculating the present value of the expected future cash flows. The discount rates used in these calculations are the rates for securities with similar terms and represent market observable rates.

Federal Funds Sold. The estimated fair value is determined by calculating the present value of the expected future cash flows. The discount rates used in these calculations are the rates for federal funds with similar terms and represent market observable rates.

Investment Securities. The Bank obtains prices from four designated third-party pricing vendors when available to estimate the fair value of its investment securities. The pricing vendors use various proprietary models to price investment securities. 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 investment securities do not trade on a daily basis, the pricing vendors use available information as applicable such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing to determine the prices for individual securities. Each pricing vendor has an established challenge process in place for all investment securities valuations, which facilitates resolution of potentially erroneous prices identified by the Bank.

The Bank periodically conducts reviews of the four pricing vendors to confirm and further augment its understanding of the vendors' pricing processes, methodologies, and control procedures for agency and private-label MBS.

The Bank's valuation technique for estimating the fair value of its investment securities first requires the establishment of a “median” price for each security.

All prices that are within a specified tolerance threshold of the median price are included in the “cluster” of prices that are averaged to compute a “default” price. All prices that are outside the threshold (“outliers”) are subject to further analysis (including, but not limited to, comparison to prices provided by an additional third-party valuation service, prices for similar securities, and/or non-binding dealer estimates) to determine if an outlier is a better estimate of fair value. If an outlier (or some other price identified in the analysis) is determined to be a better estimate of fair value, then the outlier (or the other price as appropriate) is used as the final price rather than the default price. Alternatively, if the analysis does not provide evidence that an outlier is in fact more representative of the 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 June 30, 2013 and December 31, 2012, four vendor prices were received for a majority of the Bank's investment securities holdings and the final prices for those securities were computed by averaging the prices received. Based on the Bank's review of the pricing methods and controls employed by the third-party pricing vendors and the relative lack of dispersion among the vendor prices (or, in those instances in which there were outliers or significant yield variances, the Bank's additional analyses), the Bank believes its final prices are representative of the prices that would have been received if the assets had been sold at the measurement date (i.e., exit prices) and further that the fair value measurements are classified appropriately in the fair value hierarchy. Based on the lack of significant market activity for private-label MBS, the fair value measurement for those securities were classified as Level 3 within the fair value hierarchy as of June 30, 2013 and December 31, 2012.

As an additional step for certain securities, the Bank reviewed the final fair value estimates of its private-label MBS holdings as of June 30, 2013 and December 31, 2012 for reasonableness using an implied yield test. The Bank calculated an implied yield for certain of its private-label MBS using the estimated fair value derived from the process described above and the security's projected cash flows from the Bank's other-than-temporary impairment process and compared such yield to the market yield for comparable securities according to a third source to the extent comparable market yield data was available. This analysis did not indicate that any material adjustments to the fair value estimates were necessary.

Mortgage Loans Held for Portfolio. The estimated fair values for mortgage loans are determined based on quoted market prices of similar mortgage loans available in the pass-through securities market. These prices, however, can change rapidly based upon market conditions and are highly dependent upon the underlying prepayment assumptions.

26

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

Advances. The Bank determines the estimated fair values of advances by calculating the present value of expected future cash flows from the advances and excluding the amount of the accrued interest receivable. The discount rates used in these calculations are the replacement advance rates based on the market observable LIBOR curve for advances with similar terms as of June 30, 2013 and December 31, 2012, respectively. In accordance with the advances regulations, advances with a maturity or repricing period greater than six months require a prepayment fee sufficient to make the Bank financially indifferent to the borrower's decision to prepay the advances, thereby removing prepayment risk from the fair value calculation. The Bank did not adjust the fair value measurement of advances for creditworthiness because advances were fully collateralized (see Note 7–Advances for additional information).

Accrued Interest Receivable and Payable. The estimated fair value approximates the recorded carrying value.

Derivative Assets and Liabilities. The Bank calculates the fair value of derivatives using a present value of future cash flows discounted by a market observable rate. The Bank used OIS to discount future cash flows for collateralized derivatives.

Derivative instruments are transacted primarily in the institutional dealer market and priced with observable market assumptions at a mid-market valuation point. The Bank does not provide a credit valuation adjustment based on aggregate exposure by derivative counterparty when measuring the fair value of its derivatives. This is because the collateral provisions pertaining to the Bank's derivatives obviate the need to provide such a credit valuation adjustment. The fair values of the Bank's derivatives take into consideration the effects of legally enforceable master netting agreements, where applicable, that allow the Bank to settle positive and negative positions and offset cash collateral with the same counterparty on a net basis. The Bank and each bilateral derivative counterparty have collateral thresholds that take into account both the Bank's and the counterparty's credit ratings. As a result of these practices and agreements, the Bank has concluded that the impact of the credit differential between the Bank and its derivative counterparties was mitigated to an immaterial level and no further adjustments were deemed necessary to the recorded fair values of derivative assets and liabilities on the Statements of Condition as of June 30, 2013 and December 31, 2012.

Grantor Trust Assets. Grantor trust assets, included as a component of Other assets, are carried at estimated fair value based on quoted market prices.

Interest-bearing Deposits. The Bank determines estimated fair values of Bank deposits by calculating the present value of expected future cash flows from the deposits and reducing this amount for accrued interest payable. The discount rate used in these calculations is based on LIBOR.

Consolidated Obligations. The Bank calculates the fair value of consolidated obligation bonds and discount notes by using the present value of future cash flows using a cost of funds as the discount rate. The cost of funds discount curves are based primarily on the market observable LIBOR and to some extent on the Office of Finance cost of funds curve, which also is market observable.

Mandatorily Redeemable Capital Stock. The fair value of mandatorily redeemable capital stock is par value, including estimated dividends earned at the time of reclassification from capital to liabilities, until such amount is paid. Capital stock can be acquired by members only at par value and redeemed by the Bank at par value. Capital stock is not traded and no market mechanism exists for the exchange of capital stock outside the cooperative structure.

The following estimated fair value amounts have been determined by the Bank using available market information and the Bank’s best judgment of appropriate valuation methods. These estimates are based on pertinent information available to the Bank as of June 30, 2013 and December 31, 2012. Although the Bank uses its best judgment in estimating the fair values of these financial instruments, there are inherent limitations in any estimation technique or valuation methodology.

For example, because an active secondary market does not exist for a portion of the Bank’s financial instruments, in certain cases, fair values are not subject to precise quantification or verification and may change as economic and market factors and evaluation of those factors change. Therefore, these estimated fair values are not necessarily indicative of the amounts that would be realized in current market transactions, although they do reflect the Bank’s judgment of how a market participant would estimate the fair value. The fair value tables presented below do not represent an estimate of the overall market value of the Bank as a going concern, which would take into account future business opportunities and the net profitability of assets versus liabilities.

27

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

The carrying values and estimated fair values of the Bank’s financial instruments were as follows:

	As of June 30, 2013
				Estimated Fair Value
	Carrying Value			Total			Level 1			Level 2			Level 3		Netting Adjustment
Assets:
Cash and due from banks	$	23		$	23		$	23		$	—		$	—	$	—
Interest bearing-deposits	1,006			1,006			—			1,006			—		—
Securities purchased under agreements to resell	1,000			1,000			—			1,000			—		—
Federal funds sold	5,342			5,342			—			5,342			—		—
Trading securities	2,060			2,060			—			2,060			—		—
Available-for-sale securities	2,536			2,536			—			—			2,536		—
Held-to-maturity securities	18,881			18,944			—			16,688			2,256		—
Mortgage loans held for portfolio, net	1,064			1,174			—			1,174			—		—
Advances	89,450			89,200			—			89,200			—		—
Accrued interest receivable	220			220			—			220			—		—
Derivative assets	21			21			—			1,009			—		(988		)
Grantor trust assets (included in Other assets)	17			17			17			—			—		—
Liabilities:
Interest-bearing deposits	(2,172		)	(2,172		)	—			(2,172		)	—		—
Consolidated obligations, net:
Discount notes	(26,161		)	(26,160		)	—			(26,160		)	—		—
Bonds	(86,196		)	(86,294		)	—			(86,294		)	—		—
Mandatorily redeemable capital stock	(25		)	(25		)	(25		)	—			—		—
Accrued interest payable	(238		)	(238		)	—			(238		)	—		—
Derivative liabilities	(235		)	(235		)	—			(3,208		)	—		2,973

28

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

	As of December 31, 2012
				Estimated Fair Value
	Carrying Value			Total			Level 1			Level 2			Level 3		Netting Adjustment
Assets:
Cash and due from banks	$	4,083		$	4,083		$	4,083		$	—		$	—	$	—
Interest bearing-deposits	1,005			1,005			—			1,005			—		—
Securities purchased under agreements to resell	250			250			—			250			—		—
Federal funds sold	7,235			7,235			—			7,235			—		—
Trading securities	2,370			2,370			—			2,370			—		—
Available-for-sale securities	2,676			2,676			—			—			2,676		—
Held-to-maturity securities	16,918			17,124			—			14,366			2,758		—
Mortgage loans held for portfolio, net	1,244			1,377			—			1,377			—		—
Advances	87,503			87,945			—			87,945			—		—
Accrued interest receivable	240			240			—			240			—		—
Derivative assets	13			13			—			1,190			—		(1,177		)
Grantor trust assets (included in Other assets)	17			17			17			—			—		—
Liabilities:
Interest-bearing deposits	(2,094		)	(2,094		)	—			(2,094		)	—		—
Consolidated obligations, net:
Discount notes	(31,737		)	(31,739		)	—			(31,739		)	—		—
Bonds	(82,947		)	(83,750		)	—			(83,750		)	—		—
Mandatorily redeemable capital stock	(40		)	(40		)	(40		)	—			—		—
Accrued interest payable	(229		)	(229		)	—			(229		)	—		—
Derivative liabilities	(158		)	(158		)	—			(4,208		)	—		4,050

Note 13—Commitments and Contingencies

As described in Note 8–Consolidated Obligations, consolidated obligations are backed only by the financial resources of the 12 FHLBanks. The Finance Agency may at any time require any FHLBank to make principal or interest payments due on any consolidated obligations, whether or not the primary obligor FHLBank has defaulted on the payment of that obligation. No FHLBank has ever had to assume or pay the consolidated obligation of another FHLBank.

The par value of the FHLBanks’ outstanding consolidated obligations for which the Bank is jointly and severally liable was $592,479 and $574,257 as of June 30, 2013 and December 31, 2012, respectively, exclusive of the Bank’s own outstanding consolidated obligations.

The Bank’s outstanding standby letters of credit were as follows:

	As of June 30, 2013		As of December 31, 2012
Outstanding notional	$	19,471	$	17,687
Original terms(1)	Three months to 20 years		Less than four months to 20 years
Final expiration year	2030		2030

____________ 

⁽¹⁾  The Bank had 11 standby letters of credit for a total of $7 and five standby letters of credit for a total of $49 as of June 30, 2013 and December 31, 2012, respectively, that have no stated maturity date and are subject to renewal on an annual basis.

The carrying value of the guarantees related to standby letters of credit is recorded in other liabilities and amounted to $76 and $74 as of June 30, 2013 and December 31, 2012, respectively. Based on the Bank’s credit analyses and collateral requirements, the Bank does not deem it necessary to record any additional liability on these commitments.

The Bank monitors the creditworthiness of its standby letters of credit based on an evaluation of the member. In addition, standby letters of credit are fully collateralized at the time of issuance. The Bank has established parameters for the

29

FEDERAL HOME LOAN BANK OF ATLANTA

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions)

measurement, review, classification, and monitoring of credit risk related to these standby letters of credit that results in an internal credit rating, which focuses primarily on an institution’s overall financial health and takes into account quality of assets, earnings, and capital position. In general, borrowers categorized into the highest risk rating category have more restrictions on the types of collateral they may use to secure standby letters of credit, may be required to maintain higher collateral maintenance levels and deliver loan collateral, and may face more stringent collateral reporting requirements.

The Bank had no commitments that unconditionally obligate the Bank to purchase closed mortgage loans as of June 30, 2013 and December 31, 2012. Such commitments would be recorded as derivatives at their fair values.

As of June 30, 2013, the Bank had committed to the issuance of $650 (par value) in consolidated obligation bonds, of which all were hedged with associated interest rate swaps that had traded but not yet settled. As of December 31, 2012, the Bank had committed to the issuance of $3,055 (par value) in consolidated obligation bonds, of which $3,035 were hedged with associated interest rate swaps that had traded but not yet settled.

The Bank is subject to legal proceedings arising in the normal course of business. After consultation with legal counsel, management does not anticipate, as of the date of the financial statements, that the ultimate liability, if any, arising out of these matters will have a material effect on the Bank’s financial condition or results of operations.

Note 14—Transactions with Members and their Affiliates and with Housing Associates

The Bank is a cooperative whose member institutions own substantially all of the capital stock of the Bank. Former members, and certain non-members that own the Bank's capital stock as a result of a merger or acquisition of the Bank's member, own the remaining capital stock to support business transactions still carried on the Bank’s Statements of Condition. All holders of the Bank’s capital stock receive dividends on their investments, to the extent declared by the Bank’s board of directors. All advances are issued to members and eligible “housing associates” under the Federal Home Loan Bank Act of 1932 (FHLBank Act), and mortgage loans held for portfolio are purchased from members. The Bank also maintains demand deposit accounts primarily to facilitate settlement activities that are related directly to advances and mortgage loan purchases. All transactions with members are entered into in the ordinary course of the Bank’s business. Transactions with any member that has an officer or director who also is a director of the Bank are subject to the same Bank policies as transactions with other members.

The Bank defines related parties as each of the other FHLBanks and those members with regulatory capital stock outstanding in excess of 10 percent of the Bank's total regulatory capital stock. Based on this definition, one member institution, Bank of America, National Association, which held 20.9 percent of the Bank’s total regulatory capital stock as of June 30, 2013, was considered a related party. Total advances outstanding to Bank of America, National Association were $22,163 and $9,914 as of June 30, 2013 and December 31, 2012, respectively. Total deposits held in the name of Bank of America, National Association were less than $1 as of June 30, 2013 and December 31, 2012. No mortgage loans or mortgage-backed securities were acquired from Bank of America, National Association during the six months ended June 30, 2013 and 2012.

Note 15—Subsequent Events

On July 25, 2013, the Bank’s board of directors approved a cash dividend for the second quarter of 2013 in the amount of $29. The Bank paid the second quarter 2013 dividend on July 30, 2013.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Information

Some of the statements made in this quarterly report on Form 10-Q may be “forward-looking statements” which include statements with respect to the plans, objectives, expectations, estimates and future performance of the Bank and involve known and unknown risks, uncertainties, and other factors, many of which may be beyond the Bank’s control and which may cause the Bank’s actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by the forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. The reader can identify these forward-looking statements through the Bank’s use of words such as “may,” “will,” “anticipate,” “hope,” “project,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “could,” “intend,” “seek,” “target,” and other similar words and expressions of the future. Such forward-looking statements include statements regarding any one or more of the following topics:

• the Bank’s business strategy and changes in operations, including, without limitation, product growth and change in product mix;

• future performance, including profitability, developments, or market forecasts;

• forward-looking accounting and financial statement effects; and

• those other factors identified and discussed in the Bank’s public filings with the SEC.

The forward-looking statements may not be realized due to a variety of factors, including, without limitation, those risk factors provided under Item 1A of the Bank’s Form 10-K and those risk factors presented under Item 1A in Part II of this quarterly report on Form 10-Q.

All written or oral statements that are made by or are attributable to the Bank are expressly qualified in their entirety by this cautionary notice. The reader should not place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made. The Bank has no obligation and does not undertake publicly to update, revise, or correct any of the forward-looking statements after the date of this quarterly report, or after the respective dates on which these statements otherwise are made, whether as a result of new information, future events, or otherwise, except as otherwise may be required

by law.

The discussion presented below provides an analysis of the Bank’s financial condition as of June 30, 2013 and December 31, 2012, and results of operations for the quarter and six months ended June 30, 2013 and 2012. Management’s discussion and analysis should be read in conjunction with the financial statements and accompanying notes presented elsewhere in this report, as well as the Bank’s audited financial statements for the year ended December 31, 2012.

Executive Summary

Financial Condition

As of June 30, 2013, total assets were $121.8 billion, a decrease of $1.9 billion, or 1.56 percent, from December 31, 2012. This decrease was primarily due to a $4.1 billion decrease in cash and due from banks partially offset by a $1.9 billion increase in advances. The decrease in cash and due from banks was due to the Bank's increased cash reserves balance at the Federal Reserve during the fourth quarter of 2012 in preparation to meet the needs of its members pending the result of the potential "fiscal cliff" at the beginning of 2013. The "fiscal cliff" was averted on January 1, 2013 with the permanent extension of certain of the Bush-era tax cuts and the Bank's cash and due from banks balance was reduced accordingly.

As of June 30, 2013, total liabilities were $115.3 billion, a decrease of $2.1 billion, or 1.79 percent, from December 31, 2012. This decrease was primarily due to a $2.3 billion decrease in consolidated obligations (COs).

As of June 30, 2013, total capital was $6.5 billion, an increase of $176 million, or 2.80 percent, from December 31, 2012. The Bank's comprehensive income of $282 million for the period was the primary contributor to the increase in total capital. The main components of comprehensive income include $157 million of net income and $125 million net increase in the fair value of the Bank's available-for-sale securities for the six months ended June 30, 2013.

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Results of Operations

The Bank recorded net income of $86 million for the second quarter of 2013, an increase of $26 million, or 44.6 percent, from net income of $60 million for the second quarter of 2012. This increase was primarily due to a $47 million increase in noninterest income, partially offset by a $17 million decrease in net interest income. These items are discussed in more detail in Management's Discussion and Analysis—Results of Operations below.

The Bank recorded net income of $157 million for the first six months of 2013, an increase of $27 million, or 20.7 percent, from net income of $130 million during the same period in 2012. This increase was primarily due to a $48 million increase in noninterest income, partially offset by a $15 million decrease in net interest income. These items are discussed in more detail in Management's Discussion and Analysis—Results of Operations below.

One way in which the Bank analyzes its performance is by comparing its annualized return on equity (ROE) to three-month average LIBOR. The Bank's ROE was 5.61 percent for the second quarter of 2013, compared to 3.76 percent for the second quarter of 2012. ROE increased for the second quarter of 2013, compared to the second quarter of 2012, primarily as a result of an increase in net income, as discussed above, and a decrease in average total capital during the period. ROE spread to three-month average LIBOR increased to 533 basis points for the second quarter of 2013, compared to 329 basis points for the second quarter of 2012. The increase in the ROE spread to LIBOR was primarily due to the increase in ROE as previously discussed.

The Bank's annualized ROE was 5.13 percent for the first six months of 2013, compared to 3.97 percent during the same period in 2012. ROE increased for the first six months of 2013, compared to the same period in 2012, primarily as a result of an increase in net income, as discussed above, and a decrease in average total capital during the period. ROE spread to three-month average LIBOR increased to 485 basis points for the first six months of 2013, compared to 348 basis points for the same period in 2012. The increase in the ROE spread to LIBOR was primarily due to the increase in ROE as previously discussed.

The Bank's interest rate spread was 26 basis points and 30 basis points for the second quarter of 2013 and 2012, respectively, and 26 basis points for the first six months of 2013 and 2012. The decrease in the Bank's interest rate spread during the second quarter of 2013, compared to the second quarter of 2012, was primarily due to a decrease in yield on the Bank's long-term investment portfolio during the period.

Business Outlook

The Bank’s business outlook remains largely unchanged from the discussion in the Bank’s Form 10-K. Although advances increased in the second quarter of 2013 from December, 31, 2012, the Bank expects continued fluctuations in advances balances as short-term advances expose the Bank to increased refinancing risk. In addition, members continue to experience high levels of liquidity and low loan demand, which may reduce overall member demand for advances. It is unclear what the full impact of new and proposed financial services regulations will have on member demand for advances or on the duration of advances that members may prefer. The prolonged low interest rate environment continues to place pressure on the Bank's investment portfolio, as higher-yielding investments mature or prepay in an environment with limited attractive reinvestment opportunities. Although long term interest rates have increased recently, the future movement of interest rates depends on how economic activities develop in the U.S. and around the world. If a sustained economic recovery develops, members may experience deposit runoff as depositors seek higher risk and returns, which could increase demand for advances.

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Selected Financial Data

The following table presents a summary of certain financial information for the Bank for the periods indicated (dollars in millions):

	As of and for the Three Months Ended
	June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012
Statements of Condition (at period end)
Total assets	$	121,778		$	111,547		$	123,705		$	112,078		$	119,440
Investments (1)	30,825			29,697			30,454			29,718			35,701
Mortgage loans held for portfolio	1,076			1,167			1,255			1,345			1,432
Allowance for credit losses on mortgage loans	(12		)	(13		)	(11		)	(10		)	(9		)
Advances	89,450			80,260			87,503			80,543			81,842
Interest-bearing deposits	2,172			2,037			2,094			2,061			2,133
Consolidated obligations, net:
Discount notes	26,161			20,040			31,737			21,767			21,427
Bonds	86,196			82,858			82,947			81,434			89,079
Total consolidated obligations, net (2)	112,357			102,898			114,684			103,201			110,506
Mandatorily redeemable capital stock	25			34			40			42			115
Affordable Housing Program payable	75			78			80			93			98
Capital stock - putable	4,847			4,380			4,898			4,791			5,007
Retained earnings	1,537			1,477			1,435			1,401			1,344
Accumulated other comprehensive income (loss)	67			23			(58		)	(97		)	(286		)
Total capital	6,451			5,880			6,275			6,095			6,065
Statements of Income (for the period ended)
Net interest income	86			87			97			91			103
Provision for credit losses	1			2			2			1			—
Net impairment losses recognized in earnings	—			—			—			(1		)	(8		)
Net losses on trading securities	(40		)	(24		)	(25		)	(9		)	(4		)
Net gains (losses) on derivatives and hedging activities	75			42			34			30			(1		)
Letters of credit fees	5			5			4			5			4
Other income (3)	1			1			1			(1		)	3
Noninterest expense	31			30			38			30			30
Income before assessments	95			79			71			84			67
Assessments	9			8			7			8			7
Net income	86			71			64			76			60
Performance Ratios (%)
Return on equity (4)	5.61			4.65			4.10			5.04			3.76
Return on assets (5)	0.29			0.24			0.21			0.26			0.20
Net interest margin (6)	0.29			0.30			0.32			0.31			0.34
Regulatory capital ratio (at period end) (7)	5.26			5.28			5.15			5.56			5.41
Equity to assets ratio (8)	5.16			5.12			5.15			5.15			5.25
Dividend payout ratio (9)	30.99			40.66			46.18			25.57			36.94

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____________

⁽¹⁾  Investments consist of interest-bearing deposits, securities purchased under agreements to resell, federal funds sold, and securities classified as trading, available-for-sale, and held-to-maturity.

⁽²⁾  The amounts presented are the Bank’s primary obligations on consolidated obligations outstanding. The par value of the FHLBanks’ outstanding consolidated obligations for which the Bank is jointly and severally liable was as follows (in millions):

June 30, 2013	$	592,479
March 31, 2013	563,929
December 31, 2012	574,257
September 30, 2012	572,473
June 30, 2012	575,874

⁽³⁾  Other income includes service fees and other.

⁽⁴⁾  Calculated as net income divided by average total equity.

⁽⁵⁾  Calculated as net income divided by average total assets.

⁽⁶⁾  Net interest margin is net interest income as a percentage of average earning assets.

⁽⁷⁾  Regulatory capital ratio is regulatory capital stock plus retained earnings as a percentage of total assets at period end.

⁽⁸⁾  Calculated as average equity divided by average total assets.

⁽⁹⁾  Calculated as dividends declared during the period divided by net income during the period.

Financial Condition

The Bank’s principal assets consist of advances, short- and long-term investments, and mortgage loans held for portfolio. The Bank obtains funding to support its business primarily through the issuance of debt securities in the form of COs by the Office of Finance on the Bank’s behalf.

The following table presents the distribution of the Bank’s total assets, liabilities, and capital by major class as of the dates indicated (dollars in millions). These items are discussed in more detail below.

	As of June 30, 2013			As of December 31, 2012					Increase (Decrease)
	Amount		Percent of Total	Amount			Percent of Total		Amount			Percent
Advances	$	89,450	73.46	$	87,503		70.73		$	1,947		2.23
Long-term investments	22,977		18.87	21,414			17.31		1,563			7.30
Short-term investments	7,848		6.44	9,040			7.31		(1,192		)	(13.19	)
Mortgage loans, net	1,064		0.87	1,244			1.01		(180		)	(14.50	)
Other assets	439		0.36	4,504			3.64		(4,065		)	(90.27	)
Total assets	$	121,778	100.00	$	123,705		100.00		$	(1,927	)	(1.56	)
Consolidated obligations, net:
Discount notes	$	26,161	22.69	$	31,737		27.03		$	(5,576	)	(17.57	)
Bonds	86,196		74.74	82,947			70.64		3,249			3.92
Deposits	2,172		1.88	2,094			1.78		78			3.72
Other liabilities	798		0.69	652			0.55		146			22.37
Total liabilities	$	115,327	100.00	$	117,430		100.00		$	(2,103	)	(1.79	)
Capital stock	$	4,847	75.14	$	4,898		78.05		$	(51	)	(1.04	)
Retained earnings	1,537		23.82	1,435			22.87		102			7.06
Accumulated other comprehensive income (loss)	67		1.04	(58		)	(0.92	)	125			216.16
Total capital	$	6,451	100.00	$	6,275		100.00		$	176		2.80

Advances

Advances remained relatively stable as of June 30, 2013 compared to December 31, 2012. As of June 30, 2013, 86.2 percent of the Bank’s advances were fixed-rate. However, the Bank often simultaneously enters into derivatives with the issuance of advances to convert the rates on them, in effect, into a short-term variable interest rate, usually based on LIBOR. As of June 30, 2013 and December 31, 2012, 47.6 percent and 52.8 percent, respectively, of the Bank’s fixed-rate advances were swapped and 30.5 percent and 28.8 percent, respectively, of the Bank’s variable-rate advances were swapped. The majority of the Bank’s variable-rate advances were indexed to LIBOR. The Bank also offers variable-rate advances tied to the federal funds rate, prime rate, and constant maturity swap rates.

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The following table sets forth the par value of outstanding advances by product characteristics (dollars in millions):

	As of June 30, 2013			As of December 31, 2012
	Amount		Percent of Total	Amount		Percent of Total
Adjustable or variable rate indexed	$	11,609	13.31	$	11,678	13.92
Fixed rate (1)	45,642		52.33	40,503		48.29
Hybrid	23,515		26.96	24,352		29.04
Convertible	4,365		5.00	5,174		6.17
Amortizing (2)	2,092		2.40	2,163		2.58
Total par value	$	87,223	100.00	$	83,870	100.00

____________ 

⁽¹⁾  Includes convertible advances whose conversion options have expired.

⁽²⁾  The Bank offers a fixed-rate advance that may be structured with principal amortization in either equal increments or similar to a mortgage.

Refer to Note 7—Advances to the Bank’s interim financial statements for the concentration of the Bank’s advances to its 10 largest borrowing institutions.

Investments

The following table sets forth more detailed information regarding short- and long-term investments held by the Bank (dollars in millions):

					Increase (Decrease)
	As of June 30, 2013		As of December 31, 2012		Amount			Percent
Short-term investments:
Interest-bearing deposits (1)	$	1,006	$	1,005	$	1		0.10
Certificates of deposit	500		550		(50		)	(9.09	)
Securities purchased under agreements to resell	1,000		250		750			300
Federal funds sold	5,342		7,235		(1,893		)	(26.17	)
Total short-term investments	7,848		9,040		(1,192		)	(13.19	)
Long-term investments:
State or local housing agency debt obligations	99		108		(9		)	(7.09	)
U.S. government agency debt obligations	5,336		4,501		835			18.53
Mortgage-backed securities:
U.S. government agency securities	12,739		11,385		1,354			11.89
Private-label	4,803		5,420		(617		)	(11.37	)
Total mortgage-backed securities	17,542		16,805		737			4.39
Total long-term investments	22,977		21,414		1,563			7.30
Total investments	$	30,825	$	30,454	$	371		1.22

____________

⁽¹⁾  As of June 30, 2013 and December 31, 2012, interest-bearing deposits includes a $1.0 billion business money market account with Branch Banking and Trust Company, one of the Bank’s ten largest borrowers. One of the Bank’s member directors is a senior executive vice president of Branch Banking and Trust Company and was elected chairman of the Bank's board of directors effective January 1, 2013. Pursuant to Finance Agency regulation, the Bank’s member directors serve as officers or directors of a Bank member, and the Bank may enter into business transactions with such members from time to time in the ordinary course of business.

The decrease in short-term investments from December 31, 2012 to June 30, 2013 was primarily due to a decrease in federal funds sold, partially offset by an increase in securities purchased under agreements to resell. The amount held in federal funds sold will vary each day based on the federal funds rates, the Bank’s liquidity requirements, and the availability of high quality counterparties in the federal funds market. During the first six months of 2013, the Federal Reserve paid interest on required and excess reserves balances held by depository institutions at a rate of 0.25 percent, which has led to a decrease in demand of

35

federal funds from the Bank. The increase in securities purchased under agreements to resell is consistent with the Bank's efforts to reduce its unsecured credit exposure.

The Finance Agency limits an FHLBank’s investment in MBS and asset-backed securities by requiring that the total amortized historical costs for these securities classified as held-to-maturity or available-for-sale, and fair value for MBS securities classified as trading owned by the FHLBank, generally may not exceed 300 percent of the FHLBank’s previous month-end total capital, as defined by regulation, plus its mandatorily redeemable capital stock on the day it purchases the securities. The Bank was in compliance with this regulatory requirement as of June 30, 2013 and December 31, 2012, as these investments amounted to 272 percent and 264 percent of total capital plus mandatorily redeemable capital stock, respectively. The Bank suspended new purchases of private-label MBS beginning in the first quarter of 2008, resulting in a greater percentage of U.S. government agency MBS as of June 30, 2013 compared to December 31, 2012. Additionally, recent market conditions have made U.S. government agency MBS more attractive and therefore the Bank has increased new purchases of these securities. Refer to Note 4—Available-for-sale Securities and Note 5—Held-to-maturity Securities to the Bank’s interim financial statements for information on securities with unrealized losses as of June 30, 2013 and December 31, 2012.

The Bank evaluates its individual investment securities for other-than-temporary impairment on at least a quarterly basis, as described in Note 6—Other-than-temporary Impairment to the Bank’s interim financial statements. For a discussion regarding impairment losses recognized in earnings during the reported periods see Management’s Discussion and Analysis—Results of Operations—Noninterest Income (Loss) below.

Mortgage Loans Held for Portfolio

The decrease in mortgage loans held for portfolio from December 31, 2012 to June 30, 2013 was due to the maturity and prepayment of these assets during the period. The Bank ceased purchasing new mortgage assets in 2008.

As of June 30, 2013 and December 31, 2012, the Bank’s conventional mortgage loan portfolio was concentrated in the southeastern United States because those members selling loans to the Bank were located primarily in that region. The following table provides the percentage of unpaid principal balance of conventional single-family residential mortgage loans held for portfolio for the five largest state concentrations.

	As of June 30, 2013	As of December 31, 2012
	Percent of Total	Percent of Total
Florida	26.93	26.15
South Carolina	24.52	24.12
Georgia	14.30	14.34
North Carolina	11.02	11.48
Virginia	7.94	8.34
All other	15.29	15.57
Total	100.00	100.00

Consolidated Obligations

The Bank funds its assets primarily through the issuance of consolidated obligation bonds and, to a lesser extent, consolidated obligation discount notes. As of June 30, 2013, CO issuances financed 92.3 percent of the $121.8 billion in total assets, remaining relatively stable from the financing ratio of 92.7 percent as of December 31, 2012.

Consolidated obligation discount notes decreased from December 31, 2012 to June 30, 2013. The Bank issued additional consolidated obligation discount notes during the fourth quarter of 2012 to increase liquidity in preparation to meet the needs of its members pending the result of the potential "fiscal cliff" at the beginning of 2013. As previously noted, the "fiscal cliff” was averted and the Bank's consolidated obligation discount notes balance was reduced accordingly.

As of June 30, 2013 and December 31, 2012, COs outstanding were primarily fixed-rate. However, the Bank often simultaneously enters into derivatives with the issuance of CO bonds to convert the interest rates, in effect, into short-term variable interest rates, usually based on LIBOR. As of June 30, 2013 and December 31, 2012, 84.2 percent and 81.4 percent, respectively, of the Bank’s fixed-rate CO bonds were swapped and 0.66 percent and 1.57 percent of the Bank’s variable-rate CO bonds were swapped, respectively. As of June 30, 2013 and December 31, 2012 the Bank had no fixed-rate CO discount notes that were swapped to a variable rate.

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As of June 30, 2013, callable CO bonds constituted 26.5 percent of the total par value of CO bonds outstanding, compared to 12.2 percent as of December 31, 2012. This increase was due to market conditions during the first six months of 2013 that favored the issuance of callable CO bonds. The derivatives that the Bank may employ to hedge against the interest-rate risk associated with the Bank’s callable CO bonds are callable by the counterparty; if the call feature of the derivative is exercised, the Bank in turn will generally call the hedged CO bond. These call features pose risk that the Bank could be required to refinance a substantial portion of outstanding liabilities during times of decreasing interest rates. Swap spreads tend to decrease as interest rates decrease, resulting in less favorable funding costs for the Bank. Call options on unhedged callable CO bonds generally are exercised when the bond can be replaced at a lower economic cost.

Deposits

The Bank offers demand and overnight deposit programs to members primarily as a liquidity management service. In addition, a member that services mortgage loans may deposit in the Bank funds collected in connection with the mortgage loans, pending disbursement of those funds to the owners of the mortgage loan. For demand deposits, the Bank pays interest at the overnight rate. Most of these deposits represent member liquidity investments, which members may withdraw on demand. Therefore, the total account balance of the Bank’s deposits may be volatile. Member loan demand, deposit flows, and liquidity management strategies influence the amount and volatility of deposit balances carried with the Bank. Total deposits remained relatively stable as of June 30, 2013 compared to December 31, 2012.

To support its member deposits, the FHLBank Act requires the Bank to have as a reserve an amount equal to or greater than the current deposits received from members. These reserves are required to be invested in obligations of the United States, deposits in eligible banks or trust companies or advances with maturities not exceeding five years. The Bank was in compliance with this depository liquidity requirement as of June 30, 2013.

Capital

The primary contributor to the increasein total capital from December 31, 2012 to June 30, 2013 was the Bank's comprehensive income of $282 million for the period. The main components of comprehensive income include $157 million of net income and a $125 million net increase in the fair value of the Bank’s available-for-sale securities for the six months ended June 30, 2013.

The FHLBank Act and Finance Agency regulations specify that each FHLBank must meet certain minimum regulatory capital standards. The Bank was in compliance with these regulatory capital rules and requirements as shown in Note 9—Capital and Mandatorily Redeemable Capital Stock to the Bank's interim financial statements.

Finance Agency regulations establish criteria based on the amount and type of capital held by an FHLBank for four capital classifications as follows:

• Adequately Capitalized - FHLBank meets both risk-based and minimum capital requirements;

• Undercapitalized - FHLBank does not meet one or both of its risk-based or minimum capital requirements;

• Significantly Undercapitalized - FHLBank has less than 75 percent of one or both of its risk-based or minimum capital requirements; and

• Critically Undercapitalized - FHLBank total capital is two percent or less of total assets.

Under the regulations, the Director of the Finance Agency (Director) will make a capital classification for each FHLBank at least quarterly and notify the FHLBank in writing of any proposed action and provide an opportunity for the FHLBank to submit information relevant to such action. The Director is permitted to make discretionary classifications. An FHLBank must provide written notice to the Finance Agency within 10 days of any event or development that has caused or is likely to cause its permanent or total capital to fall below the level required to maintain its most recent capital classification or reclassification. The regulations delineate the types of prompt corrective actions the Director may order in the event an FHLBank is not adequately capitalized, including submission of a capital restoration plan by the FHLBank and restrictions on its dividends, stock redemptions, executive compensation, new business activities, or any other actions the Director determines will ensure safe and sound operations and capital compliance by the FHLBank. On June 24, 2013, the Bank received notification from the Director that, based on March 31, 2013 data, the Bank meets the definition of “adequately capitalized.”

As of June 30, 2013 and December 31, 2012, the Bank had $25 million and $40 million, respectively, in capital stock subject to mandatory redemption from 17 members and former members. The Bank is not required to redeem or repurchase such capital stock until the expiration of the five-year redemption period or, with respect to activity-based capital stock, until the later of the

37

expiration of the five-year redemption period or the activity no longer remains outstanding. The Bank, in its discretion, may repurchase excess capital stock subject to certain limitations and thresholds in the Bank's capital plan.

The increase in total capital was partially offset by the payment of cash dividends of $55 million during the six month period ended June 30, 2013. The Bank continues to target the payment of dividends each quarter that are consistent with an attractive rate of return on capital to its shareholders relative to an established benchmark, LIBOR, after providing for a prudent level of retained earnings under the Bank's capital management plan. The Bank's dividend rate and its spread to LIBOR may vary in response to changes in LIBOR. Historically, the Bank's dividend rate has increased with increased in LIBOR, while the spread between the dividend rate and LIBOR may shrink. Conversely, the dividend rate may decrease during periods of lower LIBOR, while the spread may increase. The Bank's ability to maintain dividends consistent with its recent trend depends on LIBOR remaining relatively stable and the Bank's actual financial results. The Bank's capital management plan is discussed in more detail in the Bank's Form 10-K, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition - Capital.

Results of Operations

The following is a discussion and analysis of the Bank's results of operations for the second quarter and first six months of 2013 and 2012.

Net Income

The following table sets forth the Bank’s significant income items for the second quarter and first six months of 2013 and 2012, and provides information regarding the changes during the periods (dollars in millions). These items are discussed in more detail below.

	For the Three Months Ended June 30,					Increase (Decrease)					For the Six Months Ended June 30,				Increase (Decrease)
	2013		2012			Amount			Percent		2013		2012		Amount			Percent
Net interest income	$	86	$	103		$	(17	)	(16.72	)	$	173	$	188	$	(15	)	(8.33	)
Provision for credit losses	1		—			1			785.58		3		3		—			1.37
Noninterest income (loss)	41		(6		)	47			740.59		65		17		48			290.12
Noninterest expense	31		30			1			3.19		61		57		4			4.78
Affordable Housing Program assessments	9		7			2			42.53		17		15		2			18.97
Net income	$	86	$	60		$	26		44.56		$	157	$	130	$	27		20.71

Net Interest Income

The primary source of the Bank’s earnings is net interest income. Net interest income equals interest earned on assets (including member advances, mortgage loans, MBS held in portfolio, and other investments), less the interest expense incurred on liabilities (including COs, deposits, and other borrowings). Also included in net interest income are miscellaneous related items such as prepayment fees earned and the amortization of debt issuance discounts, concession fees, and certain derivative instruments and hedging activities related adjustments.

The decrease in net interest income during the second quarter and first six months of 2013, compared to the same periods in 2012, is primarily due to a reduction in yield on the Bank's long-term investments and advances, and a reduction in the average balance of the Bank's mortgage loans held for portfolio and federal funds sold during the periods. These reductions were partially offset by a reduction in rates on the Bank's long-term debt.

As discussed above, net interest income includes components of hedging activity. When a hedging relationship is discontinued, the cumulative fair value adjustment on the hedged item will be amortized into interest income or expense over the remaining life of the asset or liability. Also, when hedging relationships qualify for hedge accounting, the interest components of the hedging derivatives will be reflected in interest income or expense. As shown in the table summarizing the net effect of derivatives and hedging activity on the Bank’s results of operations, the impact of hedging on interest income was a decrease of $147 million and $265 million for the second quarters of 2013 and 2012, respectively, and a decrease of $307 and $572 million for the first six months of 2013 and 2012, respectively.

38

The following table presents spreads between the average yield on total interest-earning assets and the average cost of interest-bearing liabilities for the second quarter and first six months of 2013 and 2012 (dollars in millions). The interest-rate spread is affected by the inclusion or exclusion of net interest income or expense associated with the Bank's derivatives. For example, if the derivatives qualify for fair-value hedge accounting under GAAP, the net interest income or expense associated with the derivative is included in net interest income and in the calculation of interest-rate spread. If the derivatives do not qualify for fair-value hedge accounting under GAAP, the net interest income or expense associated with the derivatives is excluded from net interest income and the calculation of the interest-rate spread. Amortization associated with some hedging-related basis adjustments is also reflected in net interest income, which affects interest-rate spread.

	For the Three Months Ended June 30,
	2013						2012
	Average  Balance			Interest		Yield/     Rate (%)	Average  Balance			Interest		Yield/     Rate (%)
Assets
Interest-bearing deposits (1)	$	3,432		$	1	0.15	$	4,252		$	2	0.18
Certificates of deposit	275			—		0.18	1,000			1		0.29
Securities purchased under agreements to resell	902			—		0.09	—			—		—
Federal funds sold	7,299			3		0.14	12,097			5		0.17
Long-term investments (2)	20,843			117		2.26	21,586			148		2.76
Advances	84,083			62		0.29	80,046			79		0.40
Mortgage loans held for portfolio (3)	1,121			17		5.99	1,481			20		5.36
Loans to other FHLBanks	—			—		0.15	1			—		0.14
Total interest-earning assets	117,955			200		0.68	120,463			255		0.85
Allowance for credit losses on mortgage loans	(13		)				(9		)
Other assets	1,084						702
Total assets	$	119,026					$	121,156
Liabilities and Capital
Interest-bearing deposits (4)	$	2,227		—		0.03	$	2,799		1		0.06
Short-term borrowings	22,122			6		0.10	22,049			6		0.11
Long-term debt	85,092			108		0.51	85,683			144		0.68
Other borrowings	30			—		2.16	201			1		1.92
Total interest-bearing liabilities	109,471			114		0.42	110,732			152		0.55
Other liabilities	3,413						4,060
Total capital	6,142						6,364
Total liabilities and capital	$	119,026					$	121,156
Net interest income and net yield on interest-earning assets				$	86	0.29				$	103	0.34
Interest rate spread						0.26						0.30
Average interest-earning assets to interest-bearing liabilities						107.75						108.79

____________ 

⁽¹⁾  Includes amounts recognized for the right to reclaim cash collateral paid under master netting agreements with derivative counterparties.

⁽²⁾  Includes trading securities at fair value and available-for-sale securities at amortized cost.

⁽³⁾  Nonperforming loans are included in average balances used to determine average rate.

⁽⁴⁾  Includes amounts recognized for the right to return cash collateral received under master netting agreements with derivative counterparties.

39

	For the Six Months Ended June 30,
	2013						2012
	Average         Balance			Interest		Yield/     Rate (%)	Average         Balance			Interest		Yield/     Rate (%)
Assets
Interest-bearing deposits (1)	$	3,530		$	3	0.16	$	4,363		$	3	0.16
Certificates of deposit	328			—		0.21	922			1		0.31
Securities purchased under agreements to resell	917			—		0.10	—			—		—
Federal funds sold	7,906			6		0.15	12,556			10		0.16
Long-term investments (2)	20,892			241		2.33	21,915			307		2.82
Advances	83,895			125		0.30	80,961			147		0.36
Mortgage loans held for portfolio (3)	1,165			33		5.67	1,532			41		5.35
Loans to other FHLBanks	1			—		0.12	2			—		0.11
Total interest-earning assets	118,634			408		0.69	122,251			509		0.84
Allowance for credit losses on mortgage loans	(12		)				(8		)
Other assets	1,052						703
Total assets	$	119,674					$	122,946
Liabilities and Capital
Interest-bearing deposits (4)	$	2,239		—		0.04	$	2,841		1		0.04
Short-term borrowings	23,397			14		0.12	22,032			9		0.09
Long-term debt	84,358			221		0.53	87,021			309		0.71
Other borrowings	35			—		2.22	248			2		1.80
Total interest-bearing liabilities	110,029			235		0.43	112,142			321		0.58
Other liabilities	3,492						4,234
Total capital	6,153						6,570
Total liabilities and capital	$	119,674					$	122,946
Net interest income and net yield on interest-earning assets				$	173	0.29				$	188	0.31
Interest rate spread						0.26						0.26
Average interest-earning assets to interest-bearing liabilities						107.82						109.01

____________ 

⁽¹⁾  Includes amounts recognized for the right to reclaim cash collateral paid under master netting agreements with derivative counterparties.

⁽²⁾  Includes trading securities at fair value and available-for-sale securities at amortized cost.

⁽³⁾  Nonperforming loans are included in average balances used to determine average rate.

⁽⁴⁾  Includes amounts recognized for the right to return cash collateral received under master netting agreements with derivative counterparties.

40

Net interest income for the periods presented was affected by changes in average balances (volume change) and changes in average rates (rate change) of interest-earning assets and interest-bearing liabilities. The following table presents the extent to which volume changes and rate changes affected the Bank’s interest income and interest expense (in millions).

	For the Three Months Ended June 30,									For the Six Months Ended June 30,
	2013 vs. 2012									2013 vs. 2012
	Volume (1)			Rate (1)			Increase (Decrease)			Volume (1)			Rate (1)			Increase (Decrease)
Increase (decrease) in interest income:
Interest-bearing deposits	$	(1	)	$	—		$	(1	)	$	—		$	—		$	—
Certificates of deposit	(1		)	—			(1		)	(1		)	—			(1		)
Federal funds sold	(1		)	(1		)	(2		)	(3		)	(1		)	(4		)
Long-term investments	(5		)	(26		)	(31		)	(14		)	(52		)	(66		)
Advances	4			(21		)	(17		)	5			(27		)	(22		)
Mortgage loans held for portfolio	(5		)	2			(3		)	(10		)	2			(8		)
Total	(9		)	(46		)	(55		)	(23		)	(78		)	(101		)
Increase (decrease) in interest expense:
Interest-bearing deposits	—			(1		)	(1		)	(1		)	—			(1		)
Short-term borrowings	—			—			—			1			4			5
Long-term debt	(1		)	(35		)	(36		)	(9		)	(79		)	(88		)
Other borrowings	(1		)	—			(1		)	(2		)	—			(2		)
Total	(2		)	(36		)	(38		)	(11		)	(75		)	(86		)
Decrease in net interest income	$	(7	)	$	(10	)	$	(17	)	$	(12	)	$	(3	)	$	(15	)

____________ 

⁽¹⁾  Volume change is calculated as the change in volume multiplied by the previous rate, while rate change is the change in rate multiplied by the previous volume. The rate/volume change, change in rate multiplied by change in volume, is allocated between volume change and rate change at the ratio each component bears to the absolute value of its total.

Noninterest Income (Loss)

The following table presents the components of noninterest income (loss) (dollars in millions):

	For the Three Months Ended June 30,						Increase (Decrease)					For the Six Months Ended June 30,						Increase (Decrease)
	2013			2012			Amount			Percent		2013			2012			Amount			Percent
Net impairment losses recognized in earnings	$	—		$	(8	)	$	8		100.00		$	—		$	(15	)	$	15		99.95
Net losses on trading securities	(40		)	(4		)	(36		)	(995.08	)	(64		)	(33		)	(31		)	(93.39	)
Net gains (losses) on derivatives and hedging activities	75			(1		)	76			*		117			53			64			122.69
Letters of credit fees	5			4			1			6.65		10			9			1			1.55
Other	1			3			(2		)	(52.15	)	2			3			(1		)	(44.21	)
Total noninterest income (loss)	$	41		$	(6	)	$	47		740.59		$	65		$	17		$	48		290.12

____________ 

* Not meaningful.

The change in total noninterest income (loss) noted in the above table was primarily due to increases in income on derivatives and hedging activities partially offset by an increase in net losses on trading securities.

The increase in income associated with derivatives and hedging activities during the second quarter and first six months of 2013 is primarily associated with the impact of increases in long term interest rates during the periods. This increased income in both the stand alone derivatives as well as the derivatives in fair value hedging relationships. The increases in the derivatives in fair value hedge relationships primarily occurred within the hedged advances. The hedged consolidated obligations were of a shorter duration and did not offset the gains on the derivatives. There were also gains of $36 million and $61 million during the second quarter and first six months of 2013 on the derivatives used to offset the changes in fair value on the trading securities.

Net losses on trading securities increased by $36 and $31 million during the second quarter and first six months of 2013. These increased losses were primarily due to increases in long term interest rates between the periods. As discussed above, there were gains on derivatives used to offset the fair value changes on the trading securities of $36 and $61 million during the second quarter and first six months of 2013, resulting in net losses of $4 million and $3 million for the respective periods.

41

The following tables summarize the net effect of derivatives and hedging activity on the Bank’s results of operations (in millions):

	For the Three Months Ended June 30, 2013
	Advances			Investments			Consolidated Obligation Bonds			Balance Sheet		Total
Net interest income:
Amortization or accretion of hedging activities in net interest income (1)	$	(50	)	$	—		$	8		$	—	$	(42	)
Net interest settlements included in net interest income (2)	(264		)	—			159			—		(105		)
Total effect on net interest (expense) income	$	(314	)	$	—		$	167		$	—	$	(147	)
Net gains (losses) on derivatives and hedging activities:
Gains (losses) on fair value hedges	$	60		$	—		$	(7	)	$	—	$	53
Gains (losses) on derivatives not receiving hedge accounting including net interest settlements	2			11			(2		)	11		22
Total net gains (losses) on derivatives and hedging activities	62			11			(9		)	11		75
Net losses on trading securities (3)	—			(39		)	—			—		(39		)
Total effect on noninterest income (loss)	$	62		$	(28	)	$	(9	)	$	11	$	36

____________ 

⁽¹⁾  Represents the amortization or accretion of hedging fair value adjustments for both open and closed hedge positions.

⁽²⁾  Represents interest income or expense on derivatives included in net interest income.

⁽³⁾  Includes only those gains or losses on trading securities or financial instruments held at fair value that have an economic derivative “assigned,” therefore, this line item may not agree to the income statement.

	For the Three Months Ended June 30, 2012
	Advances			Investments			Consolidated Obligation Bonds			Balance Sheet			Total
Net interest income:
Amortization or accretion of hedging activities in net interest income (1)	$	(59	)	$	—		$	10		$	—		$	(49	)
Net interest settlements included in net interest income(2)	(362		)	—			146			—			(216		)
Total effect on net interest (expense) income	$	(421	)	$	—		$	156		$	—		$	(265	)
Net gains (losses) on derivatives and hedging activities:
Gains (losses) on fair value hedges	$	41		$	—		$	(5	)	$	—		$	36
Losses on derivatives not receiving hedge accounting including net interest settlements	—			(22		)	—			(15		)	(37		)
Total net gains (losses) on derivatives and hedging activities	41			(22		)	(5		)	(15		)	(1		)
Net losses on trading securities (3)	—			(4		)	—			—			(4		)
Total effect noninterest income (loss)	$	41		$	(26	)	$	(5	)	$	(15	)	$	(5	)

____________ 

⁽¹⁾  Represents the amortization or accretion of hedging fair value adjustments for both open and closed hedge positions.

⁽²⁾  Represents interest income or expense on derivatives included in net interest income.

⁽³⁾  Includes only those gains or losses on trading securities or financial instruments held at fair value that have an economic derivative “assigned,” therefore, this line item may not agree to the income statement.

42

	For the Six Months Ended June 30, 2013
	Advances			Investments			Consolidated Obligation Bonds			Balance Sheet		Total
Net interest income:
Amortization or accretion of hedging activities in net interest income (1)	$	(104	)	$	—		$	16		$	—	$	(88	)
Net interest settlements included in net interest income (2)	(538		)	—			319			—		(219		)
Total effect on net interest (expense) income	$	(642	)	$	—		$	335		$	—	$	(307	)
Net gains (losses) on derivatives and hedging activities:
Gains (losses) on fair value hedges	$	107		$	—		$	(12	)	$	—	$	95
Gains (losses) on derivatives not receiving hedge accounting including net interest settlements	4			11			(2		)	9		22
Total net gains (losses) on derivatives and hedging activities	111			11			(14		)	9		117
Net losses on trading securities (3)	—			(63		)	—			—		(63		)
Total effect on noninterest income (loss)	$	111		$	(52	)	$	(14	)	$	9	$	54

____________ 

⁽¹⁾  Represents the amortization or accretion of hedging fair value adjustments for both open and closed hedge positions.

⁽²⁾  Represents interest income or expense on derivatives included in net interest income.

⁽³⁾  Includes only those gains or losses on trading securities or financial instruments held at fair value that have an economic derivative “assigned,” therefore, this line item may not agree to the income statement.

	For the Six Months Ended June 30, 2012
	Advances			Investments			Consolidated Obligation Bonds			Balance Sheet			Total
Net interest income:
Amortization or accretion of hedging activities in net interest income (1)	$	(128	)	$	—		$	15		$	—		$	(113	)
Net interest settlements included in net interest income (2)	(748		)	—			289			—			(459		)
Total effect on net interest (expense) income	$	(876	)	$	—		$	304		$	—		$	(572	)
Net gains (losses) on derivatives and hedging activities:
Gains (losses) on fair value hedges	$	107		$	—		$	(20	)	$	—		$	87
Gains (losses) on derivatives not receiving hedge accounting including net interest settlements	1			(29		)	2			(8		)	(34		)
Total net gains (losses) on derivatives and hedging activities	108			(29		)	(18		)	(8		)	53
Net losses on trading securities (3)	—			(33		)	—			—			(33		)
Total effect on noninterest income (loss)	$	108		$	(62	)	$	(18	)	$	(8	)	$	20

____________ 

⁽¹⁾  Represents the amortization or accretion of hedging fair value adjustments for both open and closed hedge positions.

⁽²⁾  Represents interest income or expense on derivatives included in net interest income.

⁽³⁾  Includes only those gains or losses on trading securities or financial instruments held at fair value that have an economic derivative “assigned,” therefore, this line item may not agree to the income statement.

43

Noninterest Expense and Assessments

Total noninterest expense and Affordable Housing Program assessments remained relatively stable for the second quarter and first six months of 2013, compared to the same periods in 2012.

Liquidity and Capital Resources

Liquidity is necessary to satisfy members’ borrowing needs on a timely basis, repay maturing and called COs, and meet other obligations and operating requirements. Many members rely on the Bank as a source of standby liquidity, and the Bank attempts to be in a position to meet member funding needs on a timely basis. The Bank complies with operational liquidity and contingent liquidity, and other regulatory requirements. The Bank also performs a separate and independent measure of liquidity, the 45-day liquidity measurement, to validate the level of liquidity reserves.

Finance Agency regulations require the Bank to maintain operational liquidity (generally, the ready cash and borrowing capacity available to meet the Bank's intraday needs), and contingent liquidity in an amount sufficient to meet its liquidity needs for five business days if it is unable to access the capital markets. The Bank met these regulatory liquidity requirements throughout the first six months of 2013. The Finance Agency has also provided liquidity guidance to the FHLBanks generally to provide ranges of days within which each FHLBank should maintain positive cash balances based upon different assumptions and scenarios. The Bank has operated within these ranges since the Finance Agency issued this guidance.

The Bank has established an internal liquidity measurement separate from the Finance Agency requirements described above. The Bank performs a supplemental analysis to confirm that liquidity reserves are sufficient to service debt obligations for at least 45 days. This analysis assumes no access to debt market issuance and other management assumptions which are completely independent of the operational and contingent liquidity calculation measured above. The Bank met its 45 day internal liquidity goal throughout the first six months of 2013.

The Bank’s principal source of liquidity is CO debt instruments. To provide liquidity, the Bank also may use other short-term borrowings, such as federal funds purchased, securities sold under agreements to repurchase, and loans from other FHLBanks. These funding sources depend on the Bank’s ability to access the capital markets at competitive market rates. Although the Bank maintains secured and unsecured lines of credit with money market counterparties, the Bank’s income and liquidity would be adversely affected if it were not able to access the capital markets at competitive rates for an extended period. Historically, the FHLBanks have had excellent capital market access, although pricing and investor appetite tend to favor short-term discount notes during times of market volatility.

Contingency plans are in place that prioritize the allocation of liquidity resources in the event of operational disruptions at the Bank or the Office of Finance, as well as systemic Federal Reserve wire transfer system disruptions. Under the FHLBank Act, the Secretary of Treasury has the authority, at his discretion, to purchase COs up to an aggregate amount of $4.0 billion. No borrowings under this authority have been outstanding since 1977.

Off-balance Sheet Commitments

The Bank’s primary off-balance sheet commitments are as follows:

• the Bank’s joint and several liability for all FHLBank COs; and

• the Bank’s outstanding commitments arising from standby letters of credit.

Should an FHLBank be unable to satisfy its payment obligation under a CO for which it is the primary obligor, any of the other FHLBanks, including the Bank, could be called upon to repay all or any part of such payment obligation, as determined or approved by the Finance Agency. The Bank considers the joint and several liabilities to be a related-party guarantee. These related-party guarantees meet the scope exception under GAAP. Accordingly, the Bank has not recognized a liability for its joint and several obligations related to other FHLBanks’ COs as of June 30, 2013 and December 31, 2012. As of June 30, 2013, the FHLBanks had $704.5 billion in aggregate par value of COs issued and outstanding, $112.0 billion of which was attributable to the Bank. No FHLBank has ever defaulted on its principal or interest payments under any CO, and the Bank has never been required to make payments under any CO as a result of the failure of another FHLBank to meet its obligations.

44

As of June 30, 2013, the Bank had outstanding standby letters of credit of $19.5 billion with original terms of three months to 20 years, with the longest final stated expiration in 2030, and 11 outstanding standby letters of credit of $7 million subject to renewal on an annual basis with no stated maturity date (commonly known as evergreen letters of credit). As of December 31, 2012, the Bank had outstanding standby letters of credit of $17.7 billion with original terms of less than four months to 20 years, with the longest final stated expiration in 2030, and five outstanding evergreen letters of credit for a total of $49 million.

The Bank generally requires standby letters of credit to contain language permitting the Bank, upon annual renewal dates and prior notice to the beneficiary, to choose not to renew the standby letter of credit, which effectively terminates the standby letter of credit prior to its scheduled final expiration date. The Bank may issue standby letters of credit for terms of longer than one year without annual renewals or evergreen letters of credit based on the creditworthiness of the member applicant and appropriate additional fees.

Commitments to extend credit, including standby letters of credit, are agreements to lend. The Bank issues a standby letter of credit for the account of a member in exchange for a fee. A member may use these standby letters of credit to facilitate a financing arrangement. Based on management’s credit analyses and collateral requirements, the Bank does not deem it necessary to have an allowance for credit losses for these unfunded standby letters of credit as of June 30, 2013. Management regularly reviews its standby letter of credit pricing in light of several factors, including the Bank’s potential liquidity needs related to draws on its standby letters of credit.

Contractual Obligations

As of June 30, 2013 there has been no material change outside the ordinary course of business in the Bank’s contractual obligations as reported in the Bank’s Form 10-K.

Legislative and Regulatory Developments

Significant regulatory actions and developments for the period covered by this report are summarized below.

Interim Final Rule Regarding Executive Compensation. On May 14, 2013, the Finance Agency published an interim final rule setting forth requirements and processes with respect to compensation provided to executive officers by FHLBanks and the Office of Finance. The interim final rule addresses the authority of the Director to approve, disapprove, modify, prohibit, or withhold compensation of executive officers of the FHLBanks and the Office of Finance. The interim final rule also addresses the Director's authority to approve, in advance, agreements or contracts of executive officers that provide compensation in connection with termination of employment. The interim final rule prohibits an FHLBank or the Office of Finance from paying compensation to an executive officer that is not reasonable and comparable with compensation paid by similar businesses for similar duties and responsibilities. Failure by an FHLBank or the Office of Finance to comply with the rule may result in supervisory action by the Finance Agency. The interim final rule became effective on June 13, 2013, with comments due by July 15, 2013.

Proposed Rule Regarding Golden Parachute and Indemnification Payments. On May 14, 2013, the Finance Agency re-proposed a proposed rule setting forth the standards that the Finance Agency would take into consideration when limiting or prohibiting golden parachute and indemnification payments by an FHLBank or the Office of Finance to an entity-affiliated party if adopted as proposed. The primary impact of this proposed rule would be to better conform existing Finance Agency regulations on golden parachutes with FDIC golden parachute regulations and to further refine limitations on golden parachute payments to further limit any such payments made to an entity-affiliated party by an FHLBank or the Office of Finance that is assigned a less than satisfactory composite Finance Agency examination rating. Comments on the proposed rule were due by July 15, 2013.

45

Regulation of Systemically Important Nonbank Financial Companies. In 2012, the Financial Stability Oversight Council (Oversight Council) issued a final rule and guidance on the standards and procedures the Oversight Council will follow in determining whether to designate a nonbank financial company for supervision by the Federal Reserve Board (FRB) and subject to certain heightened prudential standards (commonly referred to as a "systemically important financial institution" or "SIFI"). The Oversight Council will analyze a nonbank financial company for possible SIFI designation under a three stage process. A nonbank financial company that the Oversight Council proposes to designate as a SIFI under this rule has the opportunity to contest the designation.

On April 5, 2013, the Federal Reserve System published a final rule that establishes the requirements for determining when a company is "predominately engaged in financial activities" and thus a "nonbank financial company." The Bank would likely be deemed a nonbank financial company under these definitions, and as of June 30, 2013 the Bank meets the total consolidated assets and total debt outstanding thresholds for the first stage of analysis established for designating SIFIs. To date, the Bank has not received any request for information or communication from the Oversight Council pursuant to the final rule and guidance.

Oversight Council Recommendations Regarding Money Market Mutual Fund (MMF) Reform. The Oversight Council has issued certain proposed recommendations for structural reforms of MMFs, stating that such reforms are intended to address the structural vulnerabilities of MMFs. In addition, on June 19, 2013 the SEC proposed two alternatives for amending rules that govern MMFs under the Investment Company Act of 1940. The first alternative proposal would require non-government institutional MMFs to sell and redeem shares based on the current market-based value of the securities in their underlying portfolios. The second alternative proposal would require non-government MMFs to generally impose a liquidity fee if a fund's liquidity levels fell below a specified threshold and would permit the funds to suspend redemptions temporarily. The demand for FHLBank System consolidated obligations may be impacted by any structural reform that may ultimately be adopted.

Basel Committee on Banking Supervision - Capital Framework. In July 2013, the Federal Reserve Board and the Office of the Comptroller of the Currency adopted a final rule and the FDIC adopted an interim final rule establishing new minimum capital standards for financial institutions to implement the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision. The new capital framework includes, among other things:

• a new minimum ratio of common equity tier 1 capital to risk-weighted assets, a higher ratio of tier 1 capital to risk-weighted assets, and a common equity tier 1 capital conservation buffer;

• revised methodologies for calculation of risk-weighted assets to enhance risk sensitivity; and

• a minimum supplementary leverage ratio for financial institutions subject to the “advanced approaches” risk-based capital rules.

The new framework could require some FHLBank members to divest assets in order to comply with the more stringent capital and liquidity requirements, thereby tending to decrease their need for advances. The requirements may also adversely impact investor demand for COs to the extent that impacted institutions divest or limit their investments in COs. Conversely, the new requirements could incent FHLBank members to use term advances to create and maintain balance sheet liquidity. Most FHLBank members must begin compliance with the final rule by January 1, 2015, although some larger members must begin to comply by January 1, 2014.

Risk Management

The Bank’s lending, investment, and funding activities and the use of derivative hedge instruments expose the Bank to a number of risks. A robust risk management framework aligns risk-taking activities with the Bank’s strategies and risk appetite. A risk management framework also balances risks and rewards. The Bank’s risk management framework consists of risk governance, risk appetite, and risk management policies.

The Bank’s board of directors and management recognize that risks are inherent to the Bank’s business model and that the process of establishing a risk appetite does not imply that the Bank seeks to mitigate or eliminate all risk. By defining and managing to a specific risk appetite, the board of directors and management ensure that there is a common understanding of the Bank’s desired risk profile which enhances their ability to make improved strategic and tactical decisions. Additionally, the Bank aspires to achieve and exceed best practices in governance, ethics, and compliance, and to sustain a corporate culture that fosters transparency, integrity, and adherence to legal and ethical obligations.

The Bank's board of directors and management have established this risk appetite statement and risk metrics for controlling and escalating actions based on the nine continuing objectives that represent the foundation of the Bank's strategic and tactical planning, as described in the Bank's Form 10-K.

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Discussion of the Bank’s management of its credit risk and market risk is provided below. Further discussion of these risks, as well as the Bank’s management of its liquidity, operational, and business risks, is contained in the Bank’s Form 10-K.

Credit Risk

The Bank faces credit risk primarily with respect to its advances, investments, derivatives, and mortgage loan assets.

Advances

Secured advances to member financial institutions account for the largest category of Bank assets; thus, advances are a major source of the Bank’s credit risk exposure. The Bank uses a risk-focused approach to credit and collateral underwriting. The Bank attempts to reduce credit risk on advances by monitoring the financial condition of borrowers and the quality and value of the assets members pledge as eligible collateral.

The Bank utilizes a credit risk rating system for its members, which focuses primarily on an institution’s overall financial health and takes into account quality of assets, earnings, and capital position. The Bank assigns each borrower that is an insured depository institution or an insurance company a credit risk rating from one to 10 according to the relative amount of credit risk such borrower poses to the Bank (one being the least amount of credit risk and 10 the greatest amount of credit risk). In general, borrowers in category 10 may have more restrictions on the types of collateral they may use to secure advances, may be required to maintain higher collateral maintenance levels and deliver loan collateral, may be restricted from obtaining further advances, and may face more stringent collateral reporting requirements. At times, the Bank may place more restrictive requirements on a borrower than those generally applicable to borrowers with the same rating based upon the Bank's assessment of the borrower and its collateral.

The following table sets forth the number of borrowers and the par amount of advances outstanding to borrowers with the specified ratings as of the specified dates (dollars in millions).

	As of June 30, 2013			As of December 31, 2012
Rating	Number of Borrowers	Outstanding Advances		Number of Borrowers	Outstanding Advances
1-9	515	$	85,905	527	$	82,152
10	53	975		65	1,403

The Bank establishes a credit limit for each borrower. The credit limit is not a committed line of credit, but rather an indication of the borrower’s general borrowing capacity with the Bank. The Bank determines the credit limit in its sole and absolute discretion, by evaluating a wide variety of factors indicating the borrower’s overall creditworthiness. The credit limit generally is expressed as a percentage equal to the ratio of the borrower’s total liabilities to the Bank (including the face amount of outstanding letters of credit, the principal amount of outstanding advances and the total exposure of the Bank to the borrower under any derivative contract) to the borrower’s total assets. Generally, borrowers are held to a credit limit of no more than 30 percent. However, the Bank’s board of directors, or a relevant committee thereof, may approve a higher limit at its discretion, and such borrowers may be subject to certain additional collateral reporting and maintenance requirements. As of June 30, 2013, seven borrowers have been approved for a credit limit higher than 30 percent.

Each borrower must maintain an amount of qualifying collateral that, when discounted to the lendable collateral value (LCV), is equal to at least 100 percent of the outstanding principal amount of all advances and other liabilities of the borrower to the Bank. The LCV is the value that the Bank assigns to each type of qualifying collateral for purposes of determining the amount of credit that such qualifying collateral will support. For each type of qualifying collateral, the Bank discounts the market value of the qualifying collateral to calculate the LCV. The Bank regularly reevaluates the appropriate level of discounting. The following table provides information about the types of collateral held for the Bank’s advances (dollars in millions).

	Total Par  Value of Outstanding Advances		LCV of  Collateral  Pledged by Members		First Mortgage  Collateral (%)	Securities  Collateral (%)	Other Real  Estate Related Collateral (%)
As of June 30, 2013	$	87,223	$	229,803	68.62	8.46	22.92
As of December 31, 2012	83,870		217,935		69.78	7.09	23.13

For purposes of determining each member's LCV, the Bank estimates the current market value of all residential first mortgage loans, multifamily and commercial real estate loans, and home equity loans and lines of credit pledged as collateral based on information provided by the member on individual loans or its loan portfolio through the regular collateral reporting process.

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The estimated market value is discounted to account for the price volatility of loans as well as estimated liquidation and servicing costs in the event of the member's default. Market values, and thus LCVs, change monthly. The Bank believes that this shift to a market-based valuation methodology allows the Bank to establish its collateral discounts with greater precision. These changes are part of a broader effort to provide greater transparency with respect to the valuation of collateral pledged for advances and other credit products offered by the Bank.

The following table provides information on FDIC insured institutions that were placed into receivership during the periods indicated.

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2013	2012	2013	2012
FHLBank Atlanta members	3	8	4	14
Non-FHLBank Atlanta members	9	7	12	17
Total FDIC-insured	12	15	16	31

All outstanding advances to those member institutions placed into FDIC receivership were either paid in full or assumed by another member or non-member institution under purchase and assumption agreements between the assuming institution and the FDIC. The Bank expects additional member institution failures during 2013, but at a lower rate than during 2012 as capital levels, asset quality, and the overall financial condition of member institutions continue to slowly improve.

The FHLBank Act affords any security interest granted to the Bank by any member of the Bank, or any affiliate of any such member, priority over the claims and rights of any party (including any receiver, conservator, trustee, or similar party having rights of a lien creditor), other than claims and rights of a party that (1) would be entitled to priority under otherwise applicable law; and (2) is an actual bona fide purchaser for value or is an actual secured party whose security interest is perfected in accordance with applicable state law.

In its history, the Bank has never experienced a credit loss on an advance. In consideration of this, and the Bank’s policies and practices detailed above, the Bank has not established an allowance for credit losses on advances as of June 30, 2013 and December 31, 2012.

Investments

The Bank is subject to credit risk on unsecured investments, such as interest-bearing deposits, certificates of deposit, and federal funds sold.

The Bank follows guidelines approved by its board of directors regarding unsecured extensions of credit, in addition to Finance Agency regulations with respect to term limits and eligible counterparties.

Finance Agency regulations prohibit the Bank from investing in any of the following securities:

• instruments such as common stock that represent an ownership interest in an entity, other than stock in small business investment companies or certain investments targeted to low-income people or communities;

• instruments issued by non-United States entities, other than those issued by United States branches and agency offices of foreign commercial banks;

• non-investment grade debt instruments, other than certain investments targeted to low-income people or communities and instruments that were downgraded to below an investment grade rating after purchase by the Bank;

• whole mortgages or other whole loans, other than (1) those acquired under the Bank’s mortgage purchase programs; (2) certain investments targeted to low-income people or communities; (3) certain marketable direct obligations of state, local, or tribal government units or agencies having at least the second highest credit rating from a NRSRO; (4) MBS or asset-backed securities backed by manufactured housing loans or home equity loans; and (5) certain foreign housing loans authorized under section 12(b) of the FHLBank Act;

• interest-only or principal-only stripped MBS, collateralized mortgage obligations (CMOs), collateralized debt obligations, and real estate mortgage investment conduits (REMICs);

• residual-interest or interest-accrual classes of CMOs and REMICs;

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• fixed-rate or variable-rate MBS, CMOs, and REMICs that on the trade date are at rates equal to their contractual cap and that have average lives that vary by more than six years under an assumed instantaneous interest-rate change of 300 basis points; and

• non-U.S. dollar denominated securities.

The Bank monitors the financial condition of investment counterparties to ensure that they are in compliance with the Bank's Risk Management Policy (RMP) and Finance Agency regulations. Unsecured credit exposure to any counterparty is limited by the credit quality and capital of the counterparty and by the capital of the Bank. On a regular basis, management produces financial monitoring reports detailing the financial condition of the Bank’s counterparties. These reports are reviewed by the Bank’s board of directors. The Bank may further limit or suspend overnight and term trading in addition to RMP and regulatory requirements. Limiting or suspending counterparties limits the pool of available counterparties, shifts the geographical distribution of counterparty exposure, and may reduce the Bank’s overall short-term investment opportunities.

The Bank enters into investments only with U.S. counterparties or U.S. branches and agency offices of foreign commercial banks that have been approved by the Bank through its internal approval process, but may have exposure to foreign entities if a counterparty’s parent entity is located in another country. The tables below represent the Bank’s gross exposure, by instrument type, according to the location of the parent company of the counterparty (in millions):

	As of June 30, 2013
	Federal Funds Sold		Interest-bearing   Deposits		Certificates of Deposit		Net Derivative Exposure (1)		Total
Australia	$	850	$	—	$	—	$	—	$	850
Canada	1,177		—		—		—		1,177
Germany	—		—		—		81		81
Japan	—		—		500		—		500
Norway	600		—		—		—		600
Sweden	600		—		—		—		600
Switzerland	—		—		—		3		3
United Kingdom	1,275		—		—		—		1,275
United States of America	840		1,006		—		—		1,846
Total	$	5,342	$	1,006	$	500	$	84	$	6,932

____________ 

⁽¹⁾  Amounts do not reflect collateral; see the table under Risk Management–Credit Risk–Derivatives below for a breakdown of the credit ratings of and the Bank’s credit exposure to derivative counterparties, including net exposure after collateral.

	As of December 31, 2012
	Federal Funds Sold		Interest-bearing   Deposits		Certificates of Deposit		Net Derivative Exposure (1)		Total
Australia	$	1,550	$	—	$	—	$	—	$	1,550
Canada	2,315		—		—		1		2,316
Germany	—		—		—		91		91
Japan	—		—		550		—		550
Sweden	2,215		—		—		—		2,215
United Kingdom	850		—		—		—		850
United States of America	305		1,005		—		—		1,310
Total	$	7,235	$	1,005	$	550	$	92	$	8,882

____________ 

⁽¹⁾  Amounts do not reflect collateral; see the table under Risk Management–Credit Risk–Derivatives below for a breakdown of the credit ratings of and the Bank’s credit exposure to derivative counterparties, including net exposure after collateral.

The Bank experienced a decrease in unsecured credit exposure in its investment portfolio related to non-U.S. government or non-U.S. government agency counterparties from $8.8 billion as of December 31, 2012 to $6.8 billion as of June 30, 2013. There were four such counterparties, National Bank of Canada, Branch Banking and Trust, HSBC Bank USA NA, and Australia and New Zealand Banking Group, that each represented greater than 10 percent, and collectively represented 54.8 percent, of the total unsecured credit exposure to non-U.S. government or non-U.S. government agencies counterparties. As of June 30, 2013, the Bank’s unsecured credit portfolio consisted of securities with scheduled maturities of 90 days or less and is comprised primarily of federal funds sold.

The Bank’s RMP permits the Bank to invest in U.S. agency (Fannie Mae, Freddie Mac and Ginnie Mae) obligations, including CMOs and REMICS backed by such securities, and other MBS, CMOs, and REMICS rated AAA by S&P or Aaa by Moody’s at

49

the time of purchase. The private-label MBS purchased by the Bank attain their triple-A ratings through credit enhancements, which primarily consist of the subordination of the claims of the other tranches of these securities.

The tables below provide information on the credit ratings of the Bank’s investments held as of June 30, 2013 and December 31, 2012, based on their credit ratings as of June 30, 2013 and December 31, 2012 (in millions), respectively. The credit ratings reflect the lowest long-term credit rating as reported by an NRSRO.

	As of June 30, 2013
	Carrying Value (1)
	Investment Grade						Below Investment Grade
	AA		A		BBB		BB		B		CCC		CC		C		D		Unrated		Total
Short-term investments:
Interest-bearing deposits	$	1	$	1,005	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,006
Certificates of deposit	—		500		—		—		—		—		—		—		—		—		500
Securities purchased under agreements to resell	—		—		1,000		—		—		—		—		—		—		—		1,000
Federal funds sold	1,677		3,315		350		—		—		—		—		—		—		—		5,342
Total short-term investments	1,678		4,820		1,350		—		—		—		—		—		—		—		7,848
Long-term investments:
State or local housing agency debt obligations	99		—		—		—		—		—		—		—		—		—		99
U.S. government agency debt obligations	5,336		—		—		—		—		—		—		—		—		—		5,336
Mortgage-backed securities:
U.S. government agency securities	12,739		—		—		—		—		—		—		—		—		—		12,739
Private-label	103		293		497		617		871		750		361		177		1,127		7		4,803
Total mortgage-backed securities	12,842		293		497		617		871		750		361		177		1,127		7		17,542
Total long-term investments	18,277		293		497		617		871		750		361		177		1,127		7		22,977
Total investments	$	19,955	$	5,113	$	1,847	$	617	$	871	$	750	$	361	$	177	$	1,127	$	7	$	30,825

____________

⁽¹⁾  Investment amounts noted in the above table represent the carrying value and do not include related accrued interest receivable of $56 million as of June 30, 2013.

	As of December 31, 2012
	Carrying Value (1)
	Investment Grade								Below Investment Grade
	AAA		AA		A		BBB		BB		B		CCC		CC		C		D		Total
Short-term investments:
Interest-bearing deposits	$	—	$	1	$	1,004	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,005
Certificates of deposit	—		—		550		—		—		—		—		—		—		—		550
Securities purchased under agreements to resell	—		—		250		—		—		—		—		—		—		—		250
Federal funds sold	—		2,755		4,480		—		—		—		—		—		—		—		7,235
Total short-term investments	—		2,756		6,284		—		—		—		—		—		—		—		9,040
Long-term investments:
State or local housing agency debt obligations	—		108		—		—		—		—		—		—		—		—		108
U.S. government agency debt obligations	—		4,501		—		—		—		—		—		—		—		—		4,501
Mortgage-backed securities:
U.S. government agency securities	—		11,385		—		—		—		—		—		—		—		—		11,385
Private-label	1		206		390		536		745		980		1,018		369		383		792		5,420
Total mortgage-backed securities	1		11,591		390		536		745		980		1,018		369		383		792		16,805
Total long-term investments	1		16,200		390		536		745		980		1,018		369		383		792		21,414
Total investments	$	1	$	18,956	$	6,674	$	536	$	745	$	980	$	1,018	$	369	$	383	$	792	$	30,454

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____________

⁽¹⁾  Investment amounts noted in the above table represent the carrying value and do not include related accrued interest receivable of $59 million as of December 31, 2012.

Securities Purchased Under Agreements to Resell

Securities purchased under agreements to resell are considered collateralized financing arrangements and effectively represent short-term secured loans with investment-grade counterparties. The Bank is inherently exposed to credit risk associated with the risk of default by, or insolvency of, any counterparty it conducts business with; however, based upon the collateral held as security and the investment-grade of the related counterparties, the Bank considers its credit exposure related to these investments to be minimal.

Non-Private-label MBS

The unrealized losses related to U.S. agency MBS are caused by interest rate changes. Because these securities are guaranteed by government agencies or GSEs, it is expected that these securities would not be settled at a price less than the amortized cost basis. The Bank does not consider these investments to be other-than-temporarily impaired as of June 30, 2013 because the decline in fair value is attributable to changes in interest rates and not credit quality, the Bank does not intend to sell the investments, and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity.

Private-label MBS

For disclosure purposes, the Bank classifies private-label MBS as either prime or Alt-A based upon the overall credit quality of the underlying loans as determined by the originator at the time of origination. Although there is no universally accepted definition of Alt-A, generally loans with credit characteristics that range between prime and subprime are classified as Alt-A. Participants in the mortgage market have used the Alt-A classification principally to describe loans for which the underwriting process has been streamlined in order to reduce the documentation requirements of the borrower or allow alternative documentation. As of June 30, 2013, based on the classification by the originator at the time of origination, approximately 86.6 percent of the underlying mortgages collateralizing the Bank’s private-label MBS were considered prime, of which 93.1 percent were variable-rate, and the remaining underlying mortgages collateralizing these securities were considered Alt-A, of which 60.3 percent were variable-rate.

The table below provides information on the interest-rate payment terms of the Bank’s private-label MBS backed by prime and Alt-A loans (in millions).

	As of June 30, 2013						As of December 31, 2012
	Fixed-Rate		Variable-Rate		Total		Fixed-Rate		Variable-Rate		Total
Prime	$	316	$	4,245	$	4,561	$	494	$	4,760	$	5,254
Alt-A	280		424		704		336		458		794
Total unpaid principal balance	$	596	$	4,669	$	5,265	$	830	$	5,218	$	6,048

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The tables below provide additional information, including changes in ratings since the original purchase date, on the Bank’s private-label MBS by year of securitization as of June 30, 2013 (dollars in millions).

	Year of Securitization - Prime
	2008			2007			2006			2005			2004 and   Prior			Total
Investment Ratings:
AA	$	—		$	—		$	—		$	—		$	103		$	103
A	—			—			—			37			249			286
BBB	—			—			—			112			270			382
BB	—			17			—			161			305			483
B	—			18			—			390			378			786
CCC	38			165			44			343			124			714
CC	94			173			99			36			—			402
C	—			16			28			157			—			201
D	—			572			486			139			—			1,197
Unrated	—			—			—			—			7			7
Total unpaid principal balance	$	132		$	961		$	657		$	1,375		$	1,436		$	4,561
Amortized cost	$	114		$	750		$	533		$	1,267		$	1,422		$	4,086
Gross unrealized losses	$	—		$	(4	)	$	(3	)	$	(16	)	$	(20	)	$	(43	)
Fair value	$	119		$	807		$	570		$	1,270		$	1,413		$	4,179
Other-than-temporary impairment (Year-to-date):
Credit-related losses	$	—		$	—		$	—		$	—		$	—		$	—
Non-credit-related losses	—			—			—			—			—			—
Total other-than-temporary impairment losses	$	—		$	—		$	—		$	—		$	—		$	—
Weighted average percentage of fair value to unpaid principal balance	90.33		%	83.96		%	86.81		%	92.49		%	98.29		%	91.64		%
Original weighted average credit support	15.72		%	14.02		%	10.35		%	6.82		%	3.60		%	8.09		%
Weighted average credit support	5.04		%	1.17		%	1.07		%	4.87		%	9.16		%	4.90		%
Weighted average collateral delinquency	13.77		%	21.25		%	19.60		%	11.11		%	8.13		%	13.61		%

	Year of Securitization – Alt-A
	2008			2007			2006			2005			2004 and   Prior			Total
Investment Ratings:
AA	$	—		$	—		$	—		$	—		$	1		$	1
A	—			—			—			—			9			9
BBB	—			—			—			—			118			118
BB	—			—			—			—			135			135
B	—			—			—			—			91			91
CCC	—			—			—			159			5			164
D	—			46			—			140			—			186
Total unpaid principal balance	$	—		$	46		$	—		$	299		$	359		$	704
Amortized cost	$	—		$	34		$	—		$	240		$	360		$	634
Gross unrealized losses	$	—		$	—		$	—		$	(25	)	$	(2	)	$	(27	)
Fair value	$	—		$	36		$	—		$	215		$	362		$	613
Other-than-temporary impairment (Year-to-date):
Credit-related losses	$	—		$	—		$	—		$	—		$	—		$	—
Non-credit-related losses	—			—			—			—			1			1
Total other-than-temporary impairment losses	$	—		$	—		$	—		$	—		$	(1	)	$	(1	)
Weighted average percentage of fair value to unpaid principal balance	0.00		%	79.41		%	0.00		%	72.00		%	100.77		%	87.17		%
Original weighted average credit support	0.00		%	12.29		%	0.00		%	26.92		%	7.67		%	16.14		%
Weighted average credit support	0.00		%	0.00		%	0.00		%	12.06		%	11.98		%	11.24		%
Weighted average collateral delinquency	0.00		%	31.24		%	0.00		%	30.97		%	8.54		%	19.54		%

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The following table represents a summary of the significant inputs used to evaluate each of the Bank’s private-label MBS for other-than-temporary impairment:

	Significant Inputs
	Prepayment Rate	Default Rates	Loss Severities	Current Credit Enhancement
Year of Securitization	Weighted     Average (%)	Weighted     Average (%)	Weighted     Average (%)	Weighted     Average (%)
Prime:
2008	24.77	43.15	10.77	5.03
2007	13.46	15.74	38.79	3.19
2006	10.03	22.65	39.29	1.83
2005	13.02	7.53	31.16	6.31
2004 and prior	14.53	5.70	29.91	8.86
Total Prime	13.90	10.60	31.28	6.61
Alt-A:
2007	9.67	38.19	44.88	0.05
2006	9.69	39.30	49.20	0.00
2005	8.23	35.10	46.17	5.84
2004 and prior	12.97	10.78	32.25	12.23
Total Alt-A	9.93	31.64	43.26	4.36
Total	12.25	19.37	36.27	5.67

There were no securities for which an other-than-temporary impairment was determined to have occurred during the second quarter of 2013.

The tables below summarize the total other-than-temporary impairment losses by newly impaired and previously impaired securities (in millions):

	For the Three Months Ended June 30,
	2013						2012
	Credit Losses		Net Noncredit Losses		Total Losses		Credit Losses			Net Noncredit Losses			Total Losses
Securities previously impaired prior to current period (1)	$	—	$	—	$	—	$	(8	)	$	(8	)	$	—
Total	$	—	$	—	$	—	$	(8	)	$	(8	)	$	—

____________ 

⁽¹⁾ For the three months ended June 30, 2013 and 2012, “Securities previously impaired prior to current period” represents all securities that were also previously impaired prior to April 1, 2013 and 2012, respectively.

	For the Six Months Ended June 30,
	2013							2012
	Credit Losses		Net Noncredit Losses		Total Losses			Credit Losses			Net Noncredit Losses			Total Losses
Securities newly impaired during the period	$	—	$	1	$	(1	)	$	—		$	—		$	—
Securities previously impaired prior to current period (1)	—		—		—			(15		)	(15		)	—
Total	$	—	$	1	$	(1	)	$	(15	)	$	(15	)	$	—

____________ 

⁽¹⁾ For the six months ended June 30, 2013 and 2012, “Securities previously impaired prior to current period” represents all securities that were also previously impaired prior to January 1, 2013 and 2012, respectively.

In addition to the cash flow analysis of the Bank’s private-label MBS under a base case (best estimate) housing price scenario as described in Note 6—Other-than-temporary Impairment to the Bank’s interim financial statements, a cash flow analysis was also performed based on a housing price scenario that is more adverse than the base case (adverse case housing price scenario).

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This more stressful scenario was based on a short-term housing price forecast that was decreased five percentage points followed by a recovery path that is 33.0 percent lower than the base case.

The adverse case housing price scenario and associated results do not represent the Bank’s current expectations, and therefore should not be construed as a prediction of the Bank’s future results, market conditions, or the actual performance of these securities. Rather, the results from this hypothetical adverse case housing price scenario provide a measure of the credit losses the Bank might incur if home price declines (and subsequent recoveries) are more adverse than those projected in the Bank’s base case assessment.

The following table shows the base case scenario and what the impact on other-than-temporary impairment would have been under the more stressful adverse case housing price scenario (dollars in millions).

	For the Three Months Ended June 30, 2013
	Housing Price Scenario
	Base Case (2)					Adverse Case
	Number of Securities	Unpaid Principal     balance		Other-than- temporary Impairment Related     to Credit Loss		Number of Securities	Unpaid Principal balance		Other-than- temporary Impairment  Related     to Credit Loss
Prime loans (1)	—	$	—	$	—	—	$	—	$	—
Alt-A (1)	—	—		—		1	12		—
Total	—	$	—	$	—	1	$	12	$	—

____________ 

⁽¹⁾  Based on the originator’s classification of collateral at the time of origination or based on classification of collateral by an NRSRO upon issuance of the MBS.

⁽²⁾  Represents securities and related other-than-temporary-impairment credit losses for the three months ended June 30, 2013.

The Bank continues to actively monitor the credit quality of its private-label MBS investments. It is not possible to predict the magnitude of additional other-than temporary impairment losses in future periods because that prediction depends on the actual performance of the underlying loan collateral as well as the Bank’s future modeling assumptions. Many factors could influence the Bank’s future modeling assumptions, including economic, financial market, and housing market conditions. If performance of the underlying loan collateral deteriorates and/or the Bank’s modeling assumptions become more pessimistic, the Bank could experience further losses on its investment portfolio.

Derivatives

The Bank is subject to credit risk due to the risk of nonperformance by counterparties to its derivative agreements. The amount of credit risk on derivatives depends on the extent to which netting procedures, collateral requirements, and other credit enhancements are used and are effective in mitigating the risk. The Bank manages credit risk through credit analysis, collateral management, and other credit enhancements. The Bank is also required to follow the requirements set forth by applicable regulation.

For bilateral derivative transactions, the Bank is subject to nonperformance by counterparties to its derivative agreements. The Bank requires collateral on bilateral derivatives. The amount of net unsecured credit exposure that is permissible with respect to each counterparty in a bilateral derivative depends on the credit rating of that counterparty. A counterparty must deliver collateral to the Bank if the total market value of the Bank's exposure to that counterparty rises above a specific trigger point. As a result of these risk mitigation initiatives, the Bank does not anticipate any credit losses on its bilateral derivatives with counterparties as of June 30, 2013.

For cleared derivatives, the Bank is subject to credit risk due to nonperformance by the Clearinghouse. The requirement that the Bank posts initial and variation margin through the clearing member for delivery to the Clearinghouse exposes the Bank to institutional credit risk in the event that the clearing member or the Clearinghouse fails to meet its obligations. The use of cleared derivatives mitigates credit risk exposure because a central counterparty is substituted for individual counterparties and collateral is posted daily for changes in the value of cleared derivatives through a clearing member. The Bank does not anticipate any credit losses on its cleared derivatives as of June 30, 2013.

The Bank actively monitors its counterparties' exposure to European sovereign debt and considers this exposure as a component of its credit risk review process. Due to the significant European sovereign credit concerns, the Bank reduced new derivatives

54

transactions with certain European counterparties to reduce its exposure to these counterparties. The Bank may further limit or suspend derivatives transactions with other European counterparties in accordance with its risk management policies and regulatory requirements.

The contractual or notional amount of derivatives reflects the involvement of the Bank in the various classes of financial instruments. The maximum credit risk of the Bank with respect to derivatives is the estimated cost of replacing interest-rate swaps, forward agreements, and purchased caps and floors if the counterparty defaults, minus the value of any related collateral. In determining maximum credit risk, the Bank considers, with respect to each counterparty, accrued interest receivables and payables as well as the legal right to net assets and liabilities.

The tables below provide information on the credit ratings of, and the Bank’s credit exposure to, its derivative counterparties (in millions). The credit ratings reflect the lowest long-term credit rating by an NRSRO.

	As of June 30, 2013
	Notional Amount		Derivatives Fair Value Before Collateral			Cash Collateral Pledged To (From) Counterparties			Other Collateral Pledged To (From) Counterparties		Net Credit Exposure to Counterparties
Non-member counterparties:
Asset positions with credit exposure:
Single-A	$	14,084	$	81		$	(78	)	$	—	$	3
Cleared derivatives	334		3			5			—		8
Liability positions with credit exposure:
Single-A	12,882		(235		)	238			—		3
Cleared derivatives	670		—			7			—		7
Total derivative positions with non-member counterparties to which the Bank had credit exposure	27,970		(151		)	172			—		21
Member institutions (1)	14		—			—			—		—
Total	$	27,984	$	(151	)	$	172		$	—	$	21

____________ 

⁽¹⁾ Collateral held with respect to derivatives with member institutions where the Bank is acting as an intermediary represents the amount of eligible collateral physically held by or on behalf of the Bank or collateral assigned to the Bank, as evidenced by a written security agreement, and held by the member institution for the benefit of the Bank.

	As of December 31, 2012
	Notional Amount		Derivatives Fair Value Before Collateral			Cash Collateral Pledged To (From) Counterparties			Other Collateral Pledged To (From) Counterparties			Net Credit Exposure to Counterparties
Non-member counterparties:
Asset positions with credit exposure:
Single-A	$	15,241	$	92		$	(88	)	$	—		$	4
Liability positions with credit exposure:
Single-A	14,691		(434		)	442			—			8
Total derivative positions with non-member counterparties to which the Bank had credit exposure	29,932		(342		)	354			—			12
Member institutions (1)	4		1			—			(1		)	—
Total	$	29,936	$	(341	)	$	354		$	(1	)	$	12

____________ 

⁽¹⁾ Collateral held with respect to derivatives with member institutions where the Bank is acting as an intermediary represents the amount of eligible collateral physically held by or on behalf of the Bank or collateral assigned to the Bank, as evidenced by a written security agreement, and held by the member institution for the benefit of the Bank.

The maximum credit risk is the estimated cost of replacing interest-rate swaps, forward agreements, and purchased caps and floors that have a net positive market value, if the counterparty defaults and any related collateral pledged to the Bank is of no value to the Bank.

55

If the Bank’s credit ratings had been lowered from its current rating to the next lower rating that would have triggered additional collateral to be delivered, the Bank would have been required to deliver up to an additional $135 million of collateral (at fair value) to its derivative counterparties as of June 30, 2013.

The net exposure after collateral is treated as unsecured credit consistent with the Bank's RMP and Finance Agency regulations if the counterparty has an NRSRO rating. If the counterparty does not have an NRSRO rating, the Bank requires collateral for the full amount of the exposure.

Mortgage Loan Programs

The Bank seeks to manage the credit risk associated with the Mortgage Purchase Program (MPP) and the Mortgage Partnership Finance ^® Program* (MPF^® Program or MPF) by maintaining underwriting and eligibility standards and structuring possible losses into several layers to be shared with the participating financial institutions. In some cases, a portion of the credit support for MPP and MPF loans is provided under a primary and/or supplemental mortgage insurance policy. Currently, eight mortgage insurance companies provide primary and/or supplemental mortgage insurance for loans in which the Bank has a retained interest. As of June 30, 2013, all of the Bank’s mortgage insurance providers have been rated below "A" by one or more NRSROs for their claims paying ability or insurer financial strength. Ratings downgrades imply an increased risk that these mortgage insurers may be unable to fulfill their obligations to pay claims that may be made under the insurance policies. The Bank holds additional risk-based capital to mitigate the incremental risk, if any, that results from the supplemental mortgage insurance providers.

As of June 30, 2013 and December 31, 2012, the allowance for credit losses on MPF loans was $11 millionand $10 million, respectively. The increased loan loss reserve was due to the increase in the Bank’s loss severity estimates and additions to the loan loss reserve for defaulted troubled debt restructurings. The loss severity rate used in the loan loss reserve methodology for MPF loans increased to 42.9 percent at June 30, 2013 from 42.2 percent at December 31, 2012. The Bank uses actual loss claim data from its MPF loans to estimate incurred losses. The loss severity rate does not reflect the application of any credit enhancement that may be available on a given pool.

____________

* Mortgage Partnership Finance” and “MPF” are registered trademarks of FHLBank Chicago.

56

Critical Accounting Policies and Estimates

A description of the Bank’s critical accounting policies and estimates is contained in detail in the Bank’s Form 10-K. There have been no material changes to these policies and estimates during the period reported.

Recently Issued and Adopted Accounting Guidance

See Note 2–Recently Issued and Adopted Accounting Guidance to the Bank’s interim financial statements for a discussion of recently issued and adopted accounting guidance.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The following quantitative and qualitative disclosures about market risk should be read in conjunction with the quantitative and qualitative disclosures about market risk that are included in the Bank’s Form 10-K. The information provided herein is intended to update the disclosures made in the Bank’s Form 10-K.

Changes in interest rates and spreads can have a direct effect on the value of the Bank’s assets and liabilities. As a result of the volume of the Bank’s interest-earning assets and interest-bearing liabilities, the component of market risk having the greatest effect on the Bank’s financial condition and results of operations is interest-rate risk. A description of the Bank’s management of interest-rate risk is contained in the Bank’s Form 10-K.

The Bank uses derivative financial instruments to reduce the interest-rate risk exposure inherent in otherwise unhedged assets and funding positions. These derivatives are used to adjust the effective maturity, repricing frequency, or option characteristics of financial instruments to achieve risk management objectives.

57

The following table summarizes the notional amounts of derivative financial instruments (in millions). The category “Fair value hedges” represents hedge strategies for which hedge accounting is achieved. The category “non-qualifying hedges” represents hedge strategies for which the derivatives are not in designated hedge relationships that formally meet the hedge accounting requirements under GAAP.

			As of June 30, 2013		As of December 31, 2012
Hedged Item / Hedging Instrument	Hedging Objective	Hedge Accounting Designation	Notional Amount		Notional Amount
Advances
Pay fixed, receive variable interest rate swap (without options)	Converts the advance’s fixed rate to a variable rate index.	Fair value hedges	$	7,029	$	7,427
		Non-qualifying hedges	4		4
Pay fixed, receive variable interest rate swap (with options)	Converts the advance’s fixed rate to a variable rate index and offsets option risk in the advance.	Fair value hedges	28,017		29,711
		Non-qualifying hedges	740		740
Pay variable with embedded features, receive variable interest rate swap (non-callable)	Reduces interest rate sensitivity and repricing gaps by converting the advance’s variable rate to a different variable rate index and/or offsets embedded option risk in the advance.	Fair value hedges	3,502		3,278
Pay variable, receive variable basis swap	Reduces interest rate sensitivity and repricing gaps by converting the advance’s variable rate to a different variable rate index.	Non-qualifying hedges	180		222
		Total	39,472		41,382
Investments
Pay fixed, receive variable interest rate swap	Converts the investment’s fixed rate to a variable rate index.	Non-qualifying hedges	1,740		1,990
Pay variable, receive variable interest rate swap	Converts the investment’s variable rate to a different variable rate index.	Non-qualifying hedges	50		50
		Total	1,790		2,040
Consolidated Obligation Bonds
Receive fixed, pay variable interest rate swap (without options)	Converts the bond’s fixed rate to a variable rate index.	Fair value hedges	39,689		49,544
		Non-qualifying hedges	4,135		6,125
Receive fixed, pay variable interest rate swap (with options)	Converts the bond’s fixed rate to a variable rate index and offsets option risk in the bond.	Fair value hedges	22,840		12,680
		Non-qualifying hedges	540		305
Receive variable with embedded features, pay variable interest rate swap (callable)	Reduces interest rate sensitivity and repricing gaps by converting the bond’s variable rate to a different variable rate index and/or offsets embedded option risk in the bond.	Fair value hedges	20		20
Receive variable, pay variable basis swap	Reduces interest rate sensitivity and repricing gaps by converting the bond’s variable rate to a different variable rate index.	Non-qualifying hedges	25		—
		Total	67,249		68,674

58

			As of June 30, 2013		As of December 31, 2012
Hedged Item / Hedging Instrument	Hedging Objective	Hedge Accounting Designation	Notional Amount		Notional Amount
Balance Sheet
Pay fixed, receive variable interest rate swap	Converts the asset or liability fixed rate to a variable rate index.	Non-qualifying hedges	136		125
Interest rate cap or floor	Protects against changes in income of certain assets due to changes in interest rates.	Non-qualifying hedges	12,500		12,500
		Total	12,636		12,625
Intermediary Positions and Other
Pay fixed, receive variable interest rate swap, and receive-fixed, pay variable interest rate swap	To offset interest rate swaps executed with members by executing interest rate swaps with derivatives counterparties.	Non-qualifying hedges	28		9
		Total	28		9
Total notional amount			$	121,175	$	124,730

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Interest-rate Risk Exposure Measurement

The Bank measures interest-rate risk exposure by various methods, including calculating the effective duration and convexity of assets, liabilities, and equity under various scenarios, and calculating the theoretical market value of equity. Effective duration, normally expressed in years or months, measures the price sensitivity of the Bank's interest-bearing assets and liabilities to changes in interest rates. As effective duration lengthens, market-value changes become more sensitive to interest-rate changes. The Bank employs sophisticated modeling systems to measure effective duration.

Bank policy requires the Bank to maintain its effective duration of equity within a range of +5 years to -5 years, assuming current interest rates, and within a range of +7 years to -7 years, assuming an instantaneous parallel increase or decrease in market interest rates of 200 basis points.

Under normal circumstances, effective duration is computed by calculating an option adjusted spread based on market price. This method works well if the market price is dependent on interest rates instead of credit or liquidity. In light of credit concerns and lack of liquidity in the private-label MBS market beginning in 2009, however, market prices were influenced more by credit and liquidity than interest rates, resulting in very low prices and very high option adjusted spreads which distorted the effective duration impact. Thus, in the third quarter of 2009, the Bank changed its method of calculating effective duration to use the option adjusted spread of a date prior to the market disruptions at that time. To capture interest-rate changes, the Bank further adjusted its option adjusted spread by adding a spread to reflect option adjusted spread changes in callable debt instruments with effective duration characteristics. The Bank referred to this model as the Adjusted Fair Value (AFV) approach and believed this approach provided effective duration values that more accurately reflected the Bank's interest-rate risk during market disruptions, but could still result in modest differences due to volatility and uncertainty in the capital markets (such as changing credit standards, variable mortgage refinancing capacity, the spread between MBS rates and Treasury rates, and uncertainty regarding future MBS actions by the FRB; factors such as these are difficult to reduce to quantitative model inputs). Given this limitation, the Bank viewed its effective duration gap exposure calculations as approximate, rather than absolute, values. During the second quarter of 2013, the Bank returned to the option adjusted spread based on market price. As the percentage of private-label MBS within the Bank's investment portfolio has continued to decline, the option adjusted spread based on market price now produces similar results to those obtained by using the AFV approach. The changes in the Bank's effective duration exposure between December 31, 2012 and June 30, 2013 in the table below are based upon the option adjusted spread based on market price. Using the AFV approach, the Bank estimates that its effective duration of equity would have been calculated at negative 1.02 years and the effective duration gap would have been calculated at negative 0.09 years as of June 30, 2013.

The table below reflects the Bank’s effective duration exposure measurements as calculated in accordance with Bank policy (in years).

	As of June 30, 2013					As of December 31, 2012
	Up 200 Basis Points	Current		Down 200 Basis  Points (1)		Up 200 Basis Points	Current		Down 200 Basis  Points (1)
Assets	0.60	0.46		0.29		0.48	0.31		0.24
Liabilities	0.38	0.53		0.37		0.38	0.43		0.33
Equity	4.57	(0.71	)	(1.07	)	2.17	(1.65	)	(1.26	)
Effective duration gap	0.22	(0.07	)	(0.08	)	0.10	(0.12	)	(0.09	)

____________ 

⁽¹⁾  The “down 200 basis points” scenarios shown above are considered to be “constrained shocks,” intended to prevent the possibility of negative interest rates when a designated low rate environment exists.

The Bank also analyzes its interest-rate risk and market exposure by evaluating the theoretical market value of equity. The market value of equity represents the net result of the present value of future cash flows discounted to arrive at the theoretical market value of each balance sheet item. By using the discounted present value of future cash flows, the Bank is able to factor in the various maturities of assets and liabilities, similar to the effective duration analysis discussed above. The Bank determines the theoretical market value of assets and liabilities utilizing a Level 3 pricing approach as more fully described in Note 12—Estimated Fair Values to the Bank's interim financial statements. The difference between the market value of total assets and the market value of total liabilities is the market value of equity. A more volatile market value of equity under different shock scenarios tends to result in a higher effective duration of equity, indicating increased sensitivity to interest rate changes.

60

The table below reflects the Bank’s market value of equity measurements as calculated in accordance with Bank policy (in millions).

	As of June 30, 2013						As of December 31, 2012
	Up 200 Basis Points		Current		Down 200 Basis Points (1)		Up 200 Basis Points		Current		Down 200 Basis Points (1)
Assets	$	117,928	$	119,192	$	119,903	$	119,465	$	120,498	$	120,813
Liabilities	111,807		112,786		113,529		113,123		114,045		114,319
Equity	6,121		6,406		6,374		6,342		6,453		6,494

____________ 

⁽¹⁾  The “down 200 basis points” scenarios shown above are considered to be “constrained shocks,” intended to prevent the possibility of negative interest rates when a designated low rate environment exists.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Bank's President and Chief Executive Officer and the Bank's Executive Vice President and Chief Financial Officer (Certifying Officers) are responsible for establishing and maintaining a system of disclosure controls and procedures designed to ensure that information required to be disclosed by the Bank in the reports filed or submitted under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms.

As of June 30, 2013, the Bank's management, with the participation of the Certifying Officers has evaluated the effectiveness of the design and operation of its disclosure controls and procedures. Based on that evaluation, the Certifying Officers have concluded that the Bank's disclosure controls and procedures (as defined in Rules 13a-15(a) and 15d-15(e) under the Exchange Act) were effective to provide reasonable assurance that information required to be disclosed by the Bank in the reports that it files or submits under the Exchange Act (1) is accumulated and communicated to the Certifying Officers, as appropriate, to allow timely decisions regarding required disclosure; and (2) is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.

In designing and evaluating the Bank's disclosure controls and procedures, the Bank's Certifying Officers recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Changes in Internal Control Over Financial Reporting

During the second quarter of 2013, there were no changes in the Bank's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Bank's internal control over financial reporting.

61

PART II. OTHER INFORMATION.

Item 1. Legal Proceedings.

MBS Litigation

On January 18, 2011, the Bank filed a complaint in the State Court of Fulton County, Georgia against Countrywide Financial Corporation (n/k/a/ Bank of America Home Loans), Countywide Securities Corporation, Countrywide Home Loans, Inc., Bank of America Corporation (as successor to the Countrywide defendants), J.P. Morgan Securities, LLC (f/k/a J.P. Morgan Securities, Inc. and Bear Stearns & Co., Inc.) and UBS Securities, LLC, et al. The Bank’s claims arise from material misrepresentations in the offering documents of thirty private-label MBS sold to the Bank. The Bank’s complaint alleges that the Countrywide Defendants (Countrywide Financial Corporation, Countrywide Securities Corporation, and Countrywide Home Loans, Inc.) and J.P. Morgan Securities, LLC violated the Georgia RICO (Racketeer Influenced and Corrupt Organizations) Act. The complaint further alleges that those defendants, as well as UBS Securities, LLC, committed fraud and negligent misrepresentation in violation of Georgia law, and that Bank of America Corporation is liable to the Bank as a successor to the Countrywide Defendants. The Bank is seeking monetary damages and other relief as compensation for losses it has incurred in connection with the purchase of these private-label MBS.

On May 19, 2011, the defendants filed a joint motion to dismiss; the Bank filed its opposition on July 8, 2011. No order has been issued by the court in response to this motion. On February 14, 2013, the court denied a separate motion to dismiss filed by UBS Securities, LLC. The original action is styled Federal Home Loan Bank of Atlanta v. Countrywide Financial Corp. et al., Civil Action File No. 11EV011779-01G. On March 1, 2012, the court granted a motion to sever the Bank’s claims against the J.P. Morgan entities so that these claims will proceed in a separate action. The severed action is styled Federal Home Loan Bank of Atlanta v. J.P. Morgan Securities, LLC, et al., Civil Action File No. 11EV011779-02G. Fact discovery is proceeding in both cases. The Bank expects fact and expert discovery to conclude in 2014 and that the original and the severed actions will be scheduled for separate trials in 2015.

MBS Proposed Settlement

In a separate matter, on January 21, 2011, the Bank (together with certain other private-label MBS holders collectively comprising greater than 25 percent of the voting rights with respect to certain private-label MBS) instructed The Bank of New York Mellon, in its capacity as indenture trustee, to pursue enforcement of seller representations and warranties concerning the eligibility of mortgages for securitization in certain Countrywide-issued private-label MBS. On June 29, 2011, a proposed settlement was announced between the trustee and certain Countrywide affiliates with respect to nearly all trust-related claims arising out of these private-label MBS, and the Bank and other investors (Institutional Investors) filed a Notice of Petition to intervene with the Supreme Court of the State of New York, County of New York in support of final court approval of this settlement. A hearing on the proposed settlement is ongoing in the Supreme Court of the State of New York, County of New York. It is not certain at this time whether the settlement will ultimately be approved, the timing of any final settlement or the amount of any distribution the Bank may receive as part of a final settlement.

Other

The Bank is subject to other various legal proceedings and actions from time to time in the ordinary course of its business. After consultation with legal counsel, management does not anticipate that the ultimate liability, if any, arising out of those matters presently known to the Bank will have a material adverse effect on the Bank’s financial condition or results of operations.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, the factors discussed in Part I, “Item 1A. Risk Factors” in the Bank’s Form 10-K, should be carefully considered as they could materially affect the Bank’s business, financial condition or future results. The risks described in the Bank’s Form 10-K are not the only risks facing the Bank. Additional risks and uncertainties not currently known to the Bank or that the Bank currently deems to be immaterial also may materially adversely affect the Bank’s business, financial condition, and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

62

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.		Description
3.1		Amended and Restated Organization Certificate of the Federal Home Loan Bank of Atlanta1
3.2		Bylaws of the Federal Home Loan Bank of Atlanta (Revised and Restated through October 25, 2012)1
4.1		Capital Plan of the Federal Home Loan Bank of Atlanta2
31.1		Certification of the President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002+
31.2		Certification of the Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002+
32.1		Certification of the President and Chief Executive Officer and Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+
101		Unaudited financial statements from the Quarterly Report on Form 10-Q of Federal Home Loan Bank of Atlanta for the quarter ended June 30, 2013, filed on August 8, 2013, formatted in XBRL: (i) the Statements of Condition, (ii) Statements of Income, (iii) the Statements of Capital, (iv) the Statements of Cash Flows and (v) the Notes to Financial Statements.+
1	Filed on October 26, 2012 with the SEC in the Bank's Form 8-K and incorporated herein by reference.
2	Filed on August 5, 2011 with the SEC in the Bank's Form 8-K and incorporated herein by reference.
+	Furnished herewith.

63

SIGNATURES

Pursuant to the requirements of Section 12 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 Atlanta
Date:	August 8, 2013	By/s/ W. Wesley McMullan
		Name: W. Wesley McMullan     Title: President and Chief Executive Officer
Date:	August 8, 2013	By/s/Kirk R. Malmberg
		Name: Kirk R. Malmberg     Title: Executive Vice President and Chief Financial Officer

64

EX-31.1

EXHIBIT 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, W. Wesley McMullan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the Federal Home Loan Bank of Atlanta;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 8, 2013	/s/ W. Wesley McMullan
		W. Wesley McMullan
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Kirk R. Malmberg, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the Federal Home Loan Bank of Atlanta;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 8, 2013	/s/ Kirk R. Malmberg
		Kirk R. Malmberg
		Executive Vice President and
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of the Federal Home Loan Bank of Atlanta (the “Registrant”) for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), W. Wesley McMullan, President and Chief Executive Officer of the Bank, and Kirk R. Malmberg, Executive Vice President and Chief Financial Officer of the Bank, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

1. The Registrant’s Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	August 8, 2013	/s/ W. Wesley McMullan
		W. Wesley McMullan
		President and Chief Executive Officer
		/s/ Kirk R. Malmberg
		Kirk R. Malmberg
		Executive Vice President and
		Chief Financial Officer

The foregoing certification will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Components comprising accumulated other comprehensive income (loss) were as follows:

	Pension and Postretirement Benefits			Noncredit Portion of Other-than- temporary Impairment  Losses on Available-for- sale Securities			Noncredit Portion of Other-than-temporary Impairment Losses on Held-to-maturity Securities			Total  Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2011	$	(13	)	$	(398	)	$	—		$	(411	)
Other comprehensive loss before reclassifications:
Net change in fair value	—			109			—			109
Reclassification from other comprehensive loss to net income:
Noncredit other-than-temporary impairment losses	—			15			—			15
Amortization of pension and postretirement(1)	1			—			—			1
Net current period other comprehensive income	1			124			—			125
Balance, June 30, 2012	$	(12	)	$	(274	)	$	—		$	(286	)
Balance, December 31, 2012	$	(17	)	$	(41	)	$	—		$	(58	)
Other comprehensive loss before reclassifications:
Noncredit other-than-temporary impairment losses	—			—			(1		)	(1		)
Noncredit other-than-temporary impairment losses transferred	—			(1		)	1			—
Net change in fair value	—			125			—			125
Reclassification from other comprehensive loss to net income:
Amortization of pension and postretirement(1)	1			—			—			1
Net current period other comprehensive income	1			124			—			125
Balance, June 30, 2013	$	(16	)	$	83		$	—		$	67

___________

⁽¹⁾ Included in Compensation and benefits on the Statements of Income.

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Consolidated Obligations (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Consolidated Obligation Bonds by Interest-Rate Payment
Debt, Gross	$ 85,858	$ 81,901
Fixed-rate
Consolidated Obligation Bonds by Interest-Rate Payment
Debt, Gross	71,609	76,212
Step up/down
Consolidated Obligation Bonds by Interest-Rate Payment
Debt, Gross	7,454	4,419
Simple variable-rate
Consolidated Obligation Bonds by Interest-Rate Payment
Debt, Gross	6,750	1,250
Variable-rate capped floater
Consolidated Obligation Bonds by Interest-Rate Payment
Debt, Gross	$ 45	$ 20

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Statements of Income (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Interest income
Advances	$ 61	$ 76	$ 124	$ 142
Prepayment fees on advances, net	1	3	1	5
Interest-bearing deposits	1	2	3	3
Federal funds sold	3	5	6	10
Trading securities	25	27	53	62
Available-for-sale securities	32	44	65	85
Held-to-maturity securities	60	78	123	161
Mortgage loans held for portfolio	17	20	33	41
Total interest income	200	255	408	509
Consolidated obligations:
Discount notes	6	6	14	9
Bonds	108	144	221	309
Interest Expense, Deposits	0	1	0	1
Mandatorily redeemable capital stock	0	1	0	2
Total interest expense	114	152	235	321
Net interest income	86	103	173	188
Provision for credit losses	1	0	3	3
Net interest income after provision for credit losses	85	103	170	185
Noninterest income (loss)
Total other-than-temporary impairment losses	0	0	(1)	0
Net amount of impairment losses (reclassified from) recorded in other comprehensive income (loss)	0	(8)	1	(15)
Net impairment losses recognized in earnings	0	(8)	0	(15)
Net losses on trading securities	(40)	(4)	(64)	(33)
Net gains (losses) on derivatives and hedging activities	75	(1)	117	53
Letters of credit fees	5	4	10	9
Other	1	3	2	3
Total noninterest income (loss)	41	(6)	65	17
Noninterest expense
Compensation and benefits	17	16	33	31
Other operating expenses	11	10	21	18
Finance Agency	1	3	4	6
Office of Finance	2	1	3	2
Total noninterest expense	31	30	61	57
Income before assessments	95	67	174	145
Affordable Housing Program assessments	9	7	17	15
Net income	$ 86	$ 60	$ 157	$ 130

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Trading Securities

6 Months Ended

Jun. 30, 2013

Trading Securities [Abstract]

Trading Securities

Trading Securities

Major Security Types. Trading securities were as follows:

	As of June 30, 2013		As of December 31, 2012
Government-sponsored enterprises debt obligations	$	1,989	$	2,291
Another FHLBank’s bond (1)	70		77
State or local housing agency debt obligations	1		2
Total	$	2,060	$	2,370

 ____________

⁽¹⁾  The Federal Home Loan Bank of Chicago is the primary obligor of this consolidated obligation bond.

Net unrealized and realized losses on trading securities were as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Net unrealized losses on trading securities held at period end	$	(40	)	$	(4	)	$	(62	)	$	(26	)
Net unrealized/realized losses on trading securities sold/matured during the period	—			—			(2		)	(7		)
Net losses on trading securities	$	(40	)	$	(4	)	$	(64	)	$	(33	)

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Available-for-sale Securities (Tables)

6 Months Ended

Jun. 30, 2013

Schedule of Available-for-sale Securities [Line Items]

Information on Private-Label MBS Transferred and Dates

The following table presents information on private-label MBS transferred. The amounts below represent the values as of the transfer date.

	2013						2012
	Amortized     Cost		Other-than-temporary Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Estimated Fair Value		Amortized     Cost		Other-than-temporary Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Estimated Fair Value
Transferred at March 31,	$	12	$	1	$	11	$	6	$	—	$	6
Transferred at June 30,	—		—		—		—		—		—
Total	$	12	$	1	$	11	$	6	$	—	$	6

Available-for-Sale Securities Reconciliation

Major Security Types. Available-for-sale securities were as follows:

	As of June 30, 2013
	Amortized     Cost		Other-than-temporary Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Private-label MBS	$	2,453	$	44	$	127	$	—	$	2,536

	As of December 31, 2012
	Amortized   Cost		Other-than-temporary   Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Gross   Unrealized   Gains		Gross   Unrealized   Losses		Estimated Fair Value
Private-label MBS	$	2,717	$	120	$	79	$	—	$	2,676

Summary of Available-for-Sale MBS Issued by Members or Affiliates of Members

A summary of available-for-sale MBS issued by members or affiliates of members follows:

	As of June 30, 2013
	Amortized   Cost		Other-than-temporary   Impairment Recognized in Other Accumulated Comprehensive Income (Loss)		Gross   Unrealized   Gains		Gross   Unrealized   Losses		Estimated   Fair  Value
Bank of America Corporation, Charlotte, NC	$	1,549	$	41	$	81	$	—	$	1,589
	As of December 31, 2012
	Amortized Cost		Other-than-temporary Impairment Recognized in Other Accumulated Comprehensive Income (Loss)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Bank of America Corporation, Charlotte, NC	$	1,712	$	112	$	41	$	—	$	1,641

Categories of Investments, Marketable Securities, Available-for-sale Securities [Member]

Schedule of Available-for-sale Securities [Line Items]

Available-for-Sale Securities with Unrealized Losses

The following tables summarize the available-for-sale securities with unrealized losses. The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

	As of June 30, 2013
	Less than 12 Months					12 Months or More					Total
	Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses
Private-label MBS	7	$	323	$	7	11	$	382	$	37	18	$	705	$	44
	As of December 31, 2012
	Less than 12 Months					12 Months or More					Total
	Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized    Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses
Private-label MBS	3	$	154	$	1	26	$	1,240	$	119	29	$	1,394	$	120

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Derivatives and Hedging Activities (Details Textual) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative credit-risk-related contingent features net liability position aggregate fair value	$ 2,065
Collateral already posted, aggregate fair value	2,283
Additional collateral	$ 135

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Consolidated Obligations (Details 3) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Debt, Gross	$ 85,858	$ 81,901
Unsecured Debt [Member]
Debt Instrument [Line Items]
Bonds, Due in one year or less	43,727	55,397
Bonds, Due after one year through two years	10,088	7,587
Bonds, Due after two years through three years	7,854	2,507
Bonds, Due after three years through four years	7,709	3,344
Bonds, Due after four years through five years	5,270	6,298
Bonds, Due after five years	11,210	6,768
Debt, Gross	85,858	81,901
Earlier of Contractual Maturity or Next Call Date [Member] | Unsecured Debt [Member]
Debt Instrument [Line Items]
Bonds, Due in one year or less	61,990	62,540
Bonds, Due after one year through two years	9,910	6,550
Bonds, Due after two years through three years	4,044	2,136
Bonds, Due after three years through four years	6,184	3,024
Bonds, Due after four years through five years	2,427	6,028
Bonds, Due after five years	$ 1,303	$ 1,623

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Derivatives and Hedging Activities

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

Nature of Business Activity

The Bank is exposed to interest-rate risk primarily from the effect of interest rate changes on its interest-earning assets and its funding sources that finance these assets. The goal of the Bank’s interest-rate risk management strategies is not to eliminate interest-rate risk, but to manage it within appropriate limits. To mitigate the risk of loss, the Bank has established policies and procedures, which include guidelines on the amount of exposure to interest rate changes it is willing to accept. In addition, the Bank monitors the risk to its interest income, net interest margin, and average maturity of interest-earning assets and funding sources. For additional information on the Bank’s derivatives and hedging activities, see Note 18—Derivatives and Hedging Activities to the 2012 audited financial statements contained in the Bank’s Form 10-K.

The Bank transacts most of its derivatives with large banks and major broker-dealers. Some of these banks and broker-dealers or their affiliates buy, sell, and distribute consolidated obligations. Derivative transactions may be either over-the-counter with a counterparty (bilateral derivatives) or over-the-counter cleared through a Futures Commission Merchant (i.e., clearing member) with a Central Counterparty Clearinghouse (Clearinghouse). Derivative transactions cleared through a clearing member with a Clearinghouse are referred to as "cleared derivatives." The Bank is not a derivatives dealer and thus does not trade derivatives for short-term profit.

Financial Statement Effect and Additional Financial Information

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

The following table summarizes the fair value of derivative instruments. For purposes of this disclosure, the derivative values include the fair value of derivatives and the related accrued interest.

	As of June 30, 2013								As of December 31, 2012
	Notional Amount of Derivatives		Derivative Assets			Derivative Liabilities			Notional Amount of Derivatives		Derivative Assets			Derivative Liabilities
Derivatives in hedging relationships:
Interest rate swaps	$	101,097	$	941		$	(2,801	)	$	102,660	$	1,129		$	(3,689	)
Total derivatives in hedging relationships	101,097		941			(2,801		)	102,660		1,129			(3,689		)
Derivatives not designated as hedging instruments:
Interest rate swaps	7,578		20			(372		)	9,570		29			(497		)
Interest rate caps or floors	12,500		48			(35		)	12,500		32			(22		)
Total derivatives not designated as hedging instruments	20,078		68			(407		)	22,070		61			(519		)
Total derivatives before netting and collateral adjustments	$	121,175	1,009			(3,208		)	$	124,730	1,190			(4,208		)
Netting adjustments			(915		)	915					(1,089		)	1,089
Cash collateral and related accrued interest			(73		)	2,058					(88		)	2,961
Total collateral and netting adjustments (1)			(988		)	2,973					(1,177		)	4,050
Derivative assets and derivative liabilities			$	21		$	(235	)			$	13		$	(158	)

___________

⁽¹⁾  Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral and related accrued interest held or placed with the same counterparties.

The following tables present the components of net gains (losses) on derivatives and hedging activities as presented in the Statements of Income:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Derivatives and hedged items in fair value hedging relationships:
Interest rate swaps	$	53		$	36		$	95		$	87
Total net gains related to fair value hedge ineffectiveness	53			36			95			87
Derivatives not designated as hedging instruments:
Interest rate swaps	37			(3		)	62			24
Interest rate caps or floors	7			(10		)	4			(4		)
Net interest settlements	(22		)	(24		)	(44		)	(54		)
Total net gains (losses) related to derivatives not designated as hedging instruments	22			(37		)	22			(34		)
Net gains (losses) on derivatives and hedging activities	$	75		$	(1	)	$	117		$	53

The following tables present, by type of hedged item, the gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on the Bank’s net interest income:

	For the Three Months Ended June 30,
	2013												2012
Hedged Item Type	Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)			Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)
Advances	$	991		$	(931	)	$	60		$	(264	)	$	(345	)	$	386		$	41		$	(362	)
Consolidated obligations bonds	(528		)	521			(7		)	159			5			(10		)	(5		)	146
Total	$	463		$	(410	)	$	53		$	(105	)	$	(340	)	$	376		$	36		$	(216	)

____________

⁽¹⁾  The net interest on derivatives in fair value hedge relationships is presented in the interest income or expense line item of the respective hedged item.

	For the Six Months Ended June 30,
	2013												2012
Hedged Item Type	Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)			Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)
Advances	$	1,372		$	(1,265	)	$	107		$	(538	)	$	152		$	(45	)	$	107		$	(748	)
Consolidated obligations bonds	(710		)	698			(12		)	319			(45		)	25			(20		)	289
Total	$	662		$	(567	)	$	95		$	(219	)	$	107		$	(20	)	$	87		$	(459	)

____________

⁽¹⁾  The net interest on derivatives in fair value hedge relationships is presented in the interest income or expense line item of the respective hedged item.

Managing Credit Risk on Derivatives

The Bank is subject to credit risk due to the risk of nonperformance by counterparties to its derivative agreements and manages credit risk through credit analysis, collateral requirements, and adherence to the requirements set forth in its policies and Finance Agency regulations. For bilateral derivatives, the degree of credit risk depends on the extent to which master netting arrangements are included in such contracts to mitigate the risk. The Bank manages credit risk through credit analysis, collateral requirements, and adherence to the requirements set forth in Bank policies and Finance Agency regulations. The Bank requires collateral agreements with collateral delivery thresholds on all bilateral derivatives. For cleared derivatives, the Clearinghouse is the Bank's counterparty. The requirement that the Bank post initial and variation margin through the clearing member for delivery to the Clearinghouse exposes the Bank to institutional credit risk in the event that the clearing member or the Clearinghouse fails to meet its obligations. The use of cleared derivatives mitigates credit risk exposure because a central counterparty is substituted for individual counterparties and collateral is posted daily for changes in the value of cleared derivatives through a clearing member. Additionally, collateral related to derivatives with member institutions includes collateral assigned to the Bank, as evidenced by a written security agreement and held by the member institution for the benefit of the Bank. Based on credit analyses and collateral requirements, the Bank presently does not anticipate any credit losses on its existing derivative agreements as of June 30, 2013.

The Bank enters into derivative instruments that are subject to offset under master netting arrangements or by operation of law. Where the Bank has a legal right of offset, it has elected to offset, by clearing member and/or by counterparty, the gross derivative assets and gross derivative liabilities and the related received or pledged cash collateral and associated accrued interest.

The following table presents the fair value of derivative instruments with the legal right of offset, including the related collateral received from or pledged to counterparties, based on the terms of the Bank's master netting arrangements or similar agreements.

	As of June 30, 2013						As of December 31, 2012
	Derivative Assets			Derivative Liabilities			Derivative Assets			Derivative Liabilities
Gross recognized amount:
Bilateral derivatives	$	1,006		$	(3,208	)	$	1,190		$	(4,208	)
Cleared derivatives	3			—			—			—
Total gross recognized amount	1,009			(3,208		)	1,190			(4,208		)
Gross amounts of netting adjustments and cash collateral:
Bilateral derivatives	(1,000		)	2,973			(1,177		)	4,050
Cleared derivatives	12			—			—			—
Total gross amounts of netting adjustments and cash collateral	(988		)	2,973			(1,177		)	4,050
Derivative assets and derivative liabilities:
Bilateral derivatives	6			(235		)	13			(158		)
Cleared derivatives	15			—			—			—
Total derivative assets and total derivative liabilities	21			(235		)	13			(158		)
Non-cash collateral received or pledged not offset-cannot be sold or repledged:(1)
Bilateral derivatives	—			—			1			—
Cleared derivatives	—			—			—			—
Total cannot be sold or repledged	—			—			1			—
Net unsecured amounts: (2)
Bilateral derivatives	6			(235		)	12			(158		)
Cleared derivatives	15			—			—			—
Total net unsecured amount	$	21		$	(235	)	$	12		$	(158	)

____________ 

⁽¹⁾ Collateral held with respect to derivatives with member institutions where the Bank is acting as an intermediary represents the amount of eligible collateral physically held by or on behalf of the Bank or collateral assigned to the Bank, as evidenced by a written security agreement, and held by the member institution for the benefit of the Bank.

⁽²⁾ The Bank had net credit exposure of $15 and $8 as of June 30, 2013 and December 31, 2012, respectively, due to instances where the Bank’s pledged collateral to a counterparty exceeds the Bank’s net derivative liability position.

Certain of the Bank’s bilateral derivative instruments contain provisions that require the Bank to post additional collateral with its counterparties if there is deterioration in the Bank’s credit rating. If the Bank’s credit rating is lowered by a NRSRO, the Bank may be required to deliver additional collateral on bilateral derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position (before cash collateral and related accrued interest) as of June 30, 2013 was $2,065 for which the Bank has posted collateral with a fair value of $2,283 in the normal course of business. If the Bank’s credit ratings had been lowered from its current rating to the next lower rating that would have triggered additional collateral to be delivered, the Bank would have been required to deliver an additional $135 of collateral (at fair value) to its derivative counterparties as of June 30, 2013.

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Advances (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Advances [Abstract]
Overdrawn demand deposit accounts	$ 5		$ 2
Due in one year or less	46,446		41,482
Due after one year through two years	7,309		7,915
Due after two years through three years	5,071		4,735
Due after three years through four years	8,236		5,821
Due after four years through five years	6,975		8,758
Due after five years	13,181		15,157
Federal Home Loan Bank Advances at par value	87,223		83,870
Discount on Affordable Housing Program Advances	(9)	[1]	(11)	[1]
Discount on Economic Development and Growth Enhancement Program Advances	(7)	[2]	(8)	[2]
Hedging adjustments	2,248		3,658
Deferred commitment fees	(5)		(6)
Federal Home Loan Bank Advances	$ 89,450		$ 87,503

[1] The Affordable Housing Program

[2] The Economic Development and Growth Enhancement program

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Consolidated Obligations (Details 4) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Short-term Debt [Line Items]
Discount notes book value	$ 26,161	$ 31,737
Discount Notes [Member]
Short-term Debt [Line Items]
Discount notes book value	26,161	31,737
Discount notes par value	$ 26,167	$ 31,745
Discount notes weighted average interest rate	0.08%	0.12%

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Available-for-sale Securities (Details 2) (Private-label MBS, USD $) In Millions, unless otherwise specified	Jun. 30, 2013 positions	Dec. 31, 2012 positions
Private-label MBS
Schedule of Available-for-sale Securities [Line Items]
Number of available-for-sale securities in unrealized loss position for less than 12 months	7	3
Number of available-for-sale securities in unrealized loss position for 12 months or more	11	26
Number of available-for-sale securities in unrealized loss position	18	29
Estimated fair value of available-for-sale securities in unrealized loss position for less than 12 months	$ 323	$ 154
Estimated fair value of available-for-sale securities in unrealized loss position for 12 months or more	382	1,240
Estimated fair value of available-for-sale securities in unrealized loss position	705	1,394
Available For Sale Securities Continuous Unrealized Loss Position Less Than 12 Months Aggregate Losses Accumulated In AOCI	7	1
Available For Sale Securities Continuous Unrealized Loss Position 12 Months Or Longer Aggregate Losses Accumulated In AOCI	37	119
Available For Sale Securities Continuous Unrealized Loss Position Aggregate Losses Accumulated In AOCI	$ 44	$ 120

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Advances (Tables)

6 Months Ended

Jun. 30, 2013

Advances [Abstract]

Advances Outstanding by Redemption Terms

The Bank had advances outstanding, as summarized below.

	As of June 30, 2013			As of December 31, 2012
Overdrawn demand deposit accounts	$	5		$	2
Due in one year or less	46,446			41,482
Due after one year through two years	7,309			7,915
Due after two years through three years	5,071			4,735
Due after three years through four years	8,236			5,821
Due after four years through five years	6,975			8,758
Due after five years	13,181			15,157
Total par value	87,223			83,870
Discount on AHP(1)	(9		)	(11		)
Discount on EDGE(2) advances	(7		)	(8		)
Hedging adjustments	2,248			3,658
Deferred commitment fees	(5		)	(6		)
Total	$	89,450		$	87,503

___________

⁽¹⁾ The Affordable Housing Program

⁽²⁾ The Economic Development and Growth Enhancement program

Advances by Year of Contractual Maturity or Next Conversion Date

The following table summarizes advances by year of contractual maturity or, for convertible advances, next conversion date:

	As of June 30, 2013		As of December 31, 2012
Overdrawn demand deposit accounts	$	5	$	2
Due or convertible in one year or less	50,417		46,198
Due or convertible after one year through two years	7,402		7,886
Due or convertible after two years through three years	4,942		4,748
Due or convertible after three years through four years	7,222		5,368
Due or convertible after four years through five years	5,175		6,570
Due or convertible after five years	12,060		13,098
Total par value	$	87,223	$	83,870

Advances by Interest-Rate Payment Terms

The following table details interest-rate payment terms for advances:

	As of June 30, 2013		As of December 31, 2012
Fixed-rate:
Due in one year or less	$	43,191	$	38,307
Due after one year	31,967		33,425
Total fixed-rate	75,158		71,732
Variable-rate:
Due in one year or less	3,261		3,177
Due after one year	8,804		8,961
Total variable-rate	12,065		12,138
Total par value	$	87,223	$	83,870

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Other-than-Temporary Impairment (Tables)

6 Months Ended

Jun. 30, 2013

Other than Temporary Impairment Losses, Investments [Abstract]

Schedule of Projected Home Price Recovery Ranges

The following table presents projected home price recovery ranges by months as of June 30, 2013:

Months	Annualized Rates (%)
1 to 6	0.00 to 3.00
7 to 12	1.00 to 4.00
13 to 18	2.00 to 4.00
19 to 30	2.00 to 5.00
31 to 54	2.00 to 6.00
Thereafter	2.30 to 5.60

Schedule of Roll-Forward Cumulative Credit Losses Recognized

The following table presents a roll-forward of the amount of credit losses on the Bank’s investment securities recognized in earnings for which a portion of the other-than-temporary loss was recognized in accumulated other comprehensive income (loss):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Balance of credit losses previously recognized in earnings, beginning of period	$	586		$	589		$	586		$	582
Amount related to credit loss for which an other-than-temporary impairment was previously recognized	—			8			—			15
Increase in cash flows expected to be collected, recognized over the remaining life of the securities	(2		)	(5		)	(2		)	(5		)
Balance of cumulative credit losses recognized in earnings, end of period	$	584		$	592		$	584		$	592

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Other-than-temporary Impairment (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Schedule of Roll-Forward Cumulative Credit Losses Recognized
Balance of credit losses previously recognized in earnings, beginning of period	$ 586	$ 589	$ 586	$ 582
Amount related to credit loss for which an other-than-temporary impairment was previously recognized	0	8	0	15
Increase in cash flows expected to be collected, recognized over the remaining life of the securities	(2)	(5)	(2)	(5)
Balance of cumulative credit losses recognized in earnings, end of period	$ 584	$ 592	$ 584	$ 592

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Trading Securities (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading securities	$ 2,060		$ 2,370
Government-Sponsored Enterprises Debt Obligations [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading securities	1,989		2,291
Other FHLBank's Bond [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading securities	70	[1]	77	[1]
State or Local Housing Agency Obligations [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading securities	$ 1		$ 2

[1] The Federal Home Loan Bank of Chicago is the primary obligor of this consolidated obligation bond.

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Held-to-maturity Securities (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securities	$ 18,881	$ 16,918
Held To Maturity Securities Accumulated Unrecognized Holding Gain	157	230
Held To Maturity Securities Accumulated Unrecognized Holding Loss	94	24
Estimated fair value of held-to-maturity securites	18,944	17,124
Certificates of Deposit [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securities	500	550
Held To Maturity Securities Accumulated Unrecognized Holding Gain	0	0
Held To Maturity Securities Accumulated Unrecognized Holding Loss	0	0
Estimated fair value of held-to-maturity securites	500	550
State or Local Housing Agency Obligations [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securities	98	106
Held To Maturity Securities Accumulated Unrecognized Holding Gain	1	2
Held To Maturity Securities Accumulated Unrecognized Holding Loss	0	0
Estimated fair value of held-to-maturity securites	99	108
Government-Sponsored Enterprises Debt Obligations [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securities	3,277	2,133
Held To Maturity Securities Accumulated Unrecognized Holding Gain	2	0
Held To Maturity Securities Accumulated Unrecognized Holding Loss	28	0
Estimated fair value of held-to-maturity securites	3,251	2,133
Mortgage-backed Securities, U.S. Agency Obligations-Guaranteed
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securities	532	622
Held To Maturity Securities Accumulated Unrecognized Holding Gain	8	8
Held To Maturity Securities Accumulated Unrecognized Holding Loss	0	0
Estimated fair value of held-to-maturity securites	540	630
Mortgage-backed Securities, Government-sponsored enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securities	12,207	10,763
Held To Maturity Securities Accumulated Unrecognized Holding Gain	131	184
Held To Maturity Securities Accumulated Unrecognized Holding Loss	40	2
Estimated fair value of held-to-maturity securites	12,298	10,945
Private-label MBS
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securities	2,267	2,744
Held To Maturity Securities Accumulated Unrecognized Holding Gain	15	36
Held To Maturity Securities Accumulated Unrecognized Holding Loss	26	22
Estimated fair value of held-to-maturity securites	$ 2,256	$ 2,758

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Advances (Details 1) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Advances [Abstract]
Overdrawn demand deposit accounts	$ 5	$ 2
Due or convertible in one year or less	50,417	46,198
Due or convertible after one year through two years	7,402	7,886
Due or convertible after two years through three years	4,942	4,748
Due or convertible after three years through four years	7,222	5,368
Due or convertible after four years through five years	5,175	6,570
Due or convertible after five years	12,060	13,098
Federal Home Loan Bank Advances at par value	$ 87,223	$ 83,870

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Derivatives and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Instruments

The following table summarizes the fair value of derivative instruments. For purposes of this disclosure, the derivative values include the fair value of derivatives and the related accrued interest.

	As of June 30, 2013								As of December 31, 2012
	Notional Amount of Derivatives		Derivative Assets			Derivative Liabilities			Notional Amount of Derivatives		Derivative Assets			Derivative Liabilities
Derivatives in hedging relationships:
Interest rate swaps	$	101,097	$	941		$	(2,801	)	$	102,660	$	1,129		$	(3,689	)
Total derivatives in hedging relationships	101,097		941			(2,801		)	102,660		1,129			(3,689		)
Derivatives not designated as hedging instruments:
Interest rate swaps	7,578		20			(372		)	9,570		29			(497		)
Interest rate caps or floors	12,500		48			(35		)	12,500		32			(22		)
Total derivatives not designated as hedging instruments	20,078		68			(407		)	22,070		61			(519		)
Total derivatives before netting and collateral adjustments	$	121,175	1,009			(3,208		)	$	124,730	1,190			(4,208		)
Netting adjustments			(915		)	915					(1,089		)	1,089
Cash collateral and related accrued interest			(73		)	2,058					(88		)	2,961
Total collateral and netting adjustments (1)			(988		)	2,973					(1,177		)	4,050
Derivative assets and derivative liabilities			$	21		$	(235	)			$	13		$	(158	)

___________

⁽¹⁾  Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral and related accrued interest held or placed with the same counterparties.

Components of Net Losses on Derivatives and Hedging Activities

The following tables present the components of net gains (losses) on derivatives and hedging activities as presented in the Statements of Income:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Derivatives and hedged items in fair value hedging relationships:
Interest rate swaps	$	53		$	36		$	95		$	87
Total net gains related to fair value hedge ineffectiveness	53			36			95			87
Derivatives not designated as hedging instruments:
Interest rate swaps	37			(3		)	62			24
Interest rate caps or floors	7			(10		)	4			(4		)
Net interest settlements	(22		)	(24		)	(44		)	(54		)
Total net gains (losses) related to derivatives not designated as hedging instruments	22			(37		)	22			(34		)
Net gains (losses) on derivatives and hedging activities	$	75		$	(1	)	$	117		$	53

Gain (Losses) on Derivatives and Related Hedged Items Fair Value

The following tables present, by type of hedged item, the gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on the Bank’s net interest income:

	For the Three Months Ended June 30,
	2013												2012
Hedged Item Type	Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)			Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)
Advances	$	991		$	(931	)	$	60		$	(264	)	$	(345	)	$	386		$	41		$	(362	)
Consolidated obligations bonds	(528		)	521			(7		)	159			5			(10		)	(5		)	146
Total	$	463		$	(410	)	$	53		$	(105	)	$	(340	)	$	376		$	36		$	(216	)

____________

⁽¹⁾  The net interest on derivatives in fair value hedge relationships is presented in the interest income or expense line item of the respective hedged item.

	For the Six Months Ended June 30,
	2013												2012
Hedged Item Type	Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)			Gains (Losses) on Derivative			Gains (Losses) on Hedged Item			Net Fair Value Hedge Ineffectiveness			Effect of Derivatives on Net Interest Income(1)
Advances	$	1,372		$	(1,265	)	$	107		$	(538	)	$	152		$	(45	)	$	107		$	(748	)
Consolidated obligations bonds	(710		)	698			(12		)	319			(45		)	25			(20		)	289
Total	$	662		$	(567	)	$	95		$	(219	)	$	107		$	(20	)	$	87		$	(459	)

____________

⁽¹⁾  The net interest on derivatives in fair value hedge relationships is presented in the interest income or expense line item of the respective hedged item.

Credit risk exposure on derivative instruments, excluding circumstances

	As of June 30, 2013						As of December 31, 2012
	Derivative Assets			Derivative Liabilities			Derivative Assets			Derivative Liabilities
Gross recognized amount:
Bilateral derivatives	$	1,006		$	(3,208	)	$	1,190		$	(4,208	)
Cleared derivatives	3			—			—			—
Total gross recognized amount	1,009			(3,208		)	1,190			(4,208		)
Gross amounts of netting adjustments and cash collateral:
Bilateral derivatives	(1,000		)	2,973			(1,177		)	4,050
Cleared derivatives	12			—			—			—
Total gross amounts of netting adjustments and cash collateral	(988		)	2,973			(1,177		)	4,050
Derivative assets and derivative liabilities:
Bilateral derivatives	6			(235		)	13			(158		)
Cleared derivatives	15			—			—			—
Total derivative assets and total derivative liabilities	21			(235		)	13			(158		)
Non-cash collateral received or pledged not offset-cannot be sold or repledged:(1)
Bilateral derivatives	—			—			1			—
Cleared derivatives	—			—			—			—
Total cannot be sold or repledged	—			—			1			—
Net unsecured amounts: (2)
Bilateral derivatives	6			(235		)	12			(158		)
Cleared derivatives	15			—			—			—
Total net unsecured amount	$	21		$	(235	)	$	12		$	(158	)

____________ 

⁽¹⁾ Collateral held with respect to derivatives with member institutions where the Bank is acting as an intermediary represents the amount of eligible collateral physically held by or on behalf of the Bank or collateral assigned to the Bank, as evidenced by a written security agreement, and held by the member institution for the benefit of the Bank.

⁽²⁾ The Bank had net credit exposure of $15 and $8 as of June 30, 2013 and December 31, 2012, respectively, due to instances where the Bank’s pledged collateral to a counterparty exceeds the Bank’s net derivative liability position.

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Derivatives and Hedging Activities (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) on derivatives and hedged items in fair value hedging relationships	$ 53	$ 36	$ 95	$ 87
Net gains (losses) on derivatives not designated as hegding instruments	22	(37)	22	(34)
Net gains (losses) on derivatives and hedging activities	75	(1)	117	53
Interest rate swaps
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) on derivatives and hedged items in fair value hedging relationships	53	36	95	87
Net gains (losses) on derivatives not designated as hegding instruments	37	(3)	62	24
Interest rate caps or floors
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) on derivatives not designated as hegding instruments	7	(10)	4	(4)
Net Interest Settlements [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) on derivatives not designated as hegding instruments	$ (22)	$ (24)	$ (44)	$ (54)

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2013		Dec. 31, 2012
Outstanding Standby Letters of Credit
Outstanding notional	$ 7		$ 49
Number of outstanding standby letters of credit	11		5
Standby Letters of Credit
Outstanding Standby Letters of Credit
Outstanding notional	$ 19,471		$ 17,687
Letter of credit final expiration year	2030		2030
Minimum | Standby Letters of Credit
Outstanding Standby Letters of Credit
Original terms	3 months	[1]	4 months	[1]
Maximum | Standby Letters of Credit
Outstanding Standby Letters of Credit
Original terms	20 years	[1]	20 years	[1]

[1] The Bank had 11 standby letters of credit for a total of $7 and five standby letters of credit for a total of $49 as of June 30, 2013 and December 31, 2012, respectively, that have no stated maturity date and are subject to renewal on an annual basis.

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Derivatives and Hedging Activities (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Derivative [Line Items]
Total notional amount of derivatives before netting and collateral adjustments	$ 121,175		$ 124,730
Derivative assets in hedges	941		1,129
Derivative liabilities in hedges	(2,801)		(3,689)
Derivative assets not designated as hedging instruments	68		61
Derivative liabilities not designated as hedging instruments	(407)		(519)
Total derivative assets before netting and collateral adjustments	1,009		1,190
Total derivative liabilities before netting and collateral adjustments	3,208		4,208
Derivative assets offset against collateral	(988)		(1,177)
Derivative liabilities offset against collateral	2,973		4,050
Derivative assets	21		13
Derivative liabilities	(235)		(158)
Interest rate swaps
Derivative [Line Items]
Derivative assets in hedges	941		1,129
Derivative liabilities in hedges	(2,801)		(3,689)
Derivative assets not designated as hedging instruments	20		29
Derivative liabilities not designated as hedging instruments	(372)		(497)
Interest rate caps or floors
Derivative [Line Items]
Derivative assets not designated as hedging instruments	48		32
Derivative liabilities not designated as hedging instruments	(35)		(22)
Netting adjustments
Derivative [Line Items]
Derivative assets offset against collateral	(915)		(1,089)
Derivative liabilities offset against collateral	915		1,089
Cash collateral and related accrued interest
Derivative [Line Items]
Derivative assets offset against collateral	(73)		(88)
Derivative liabilities offset against collateral	2,058		2,961
Total collateral and netting adjustment
Derivative [Line Items]
Derivative assets offset against collateral	(988)	[1]	(1,177)	[1]
Derivative liabilities offset against collateral	2,973	[1]	4,050	[1]
Designated as Hedging Instrument [Member]
Derivative [Line Items]
Total notional amount of derivatives before netting and collateral adjustments	101,097		102,660
Designated as Hedging Instrument [Member] | Interest rate swaps
Derivative [Line Items]
Total notional amount of derivatives before netting and collateral adjustments	101,097		102,660
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Total notional amount of derivatives before netting and collateral adjustments	20,078		22,070
Not Designated as Hedging Instrument [Member] | Interest rate swaps
Derivative [Line Items]
Total notional amount of derivatives before netting and collateral adjustments	7,578		9,570
Not Designated as Hedging Instrument [Member] | Interest rate caps or floors
Derivative [Line Items]
Total notional amount of derivatives before netting and collateral adjustments	$ 12,500		$ 12,500

[1] Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral and related accrued interest held or placed with the same counterparties.

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Held-to-maturity Securities (Details 3) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securities	$ 18,881	$ 16,918
Held To Maturity Securities Accumulated Unrecognized Holding Gain	157	230
Held To Maturity Securities Accumulated Unrecognized Holding Loss	94	24
Estimated fair value of held-to-maturity securites	18,944	17,124
Mortgage-backed securities [Member] | Bank of America Corporation, Charlotte, NC
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securities	743	896
Held To Maturity Securities Accumulated Unrecognized Holding Gain	6	11
Held To Maturity Securities Accumulated Unrecognized Holding Loss	7	8
Estimated fair value of held-to-maturity securites	$ 742	$ 899

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Estimated Fair Values (Details 1) (Fair Value, Inputs, Level 3 [Member], Private-label MBS, Available-for-sale Securities, USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012
Fair Value, Inputs, Level 3 [Member] | Private-label MBS | Available-for-sale Securities
Reconciliation of Available-For-Sale Securities Measured at Fair Value
Balance, beginning of year	$ 2,676		$ 2,942
Transfer of private-label MBS from held-to-maturity to available-for-sale	11		6
Included in net impairment losses recognized in earnings	0	[1]	(15)	[1]
Included in other comprehensive loss	125	[1],[2]	124	[1],[2]
Accretion of credit losses in net interest income	1		2
Settlements	(277)		(318)
Balance, end of year	$ 2,536		$ 2,741

[1] Related to available-for-sale securities held at period end.

[2] This amount is included in other comprehensive income (loss) within the net change in fair value on other-than-temporary impairment available-for-sale securities and reclassification of noncredit portion of impairment losses included in net income.

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Held-to-maturity Securities (Tables) (Categories of Investments, Marketable Securities, Held-to-maturity Securities [Member])

6 Months Ended

Jun. 30, 2013

Categories of Investments, Marketable Securities, Held-to-maturity Securities [Member]

Schedule of Held-to-maturity Securities [Line Items]

Schedule of Held-to-Maturity Securities

Major Security Types. Held-to-maturity securities were as follows:

	As of June 30, 2013								As of December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value
Certificates of deposit	$	500	$	—	$	—	$	500	$	550	$	—	$	—	$	550
State or local housing agency debt obligations	98		1		—		99		106		2		—		108
Government-sponsored enterprises debt obligations	3,277		2		28		3,251		2,133		—		—		2,133
Mortgage-backed securities:
U.S. agency obligations-guaranteed	532		8		—		540		622		8		—		630
Government-sponsored enterprises	12,207		131		40		12,298		10,763		184		2		10,945
Private-label	2,267		15		26		2,256		2,744		36		22		2,758
Total	$	18,881	$	157	$	94	$	18,944	$	16,918	$	230	$	24	$	17,124

Schedule of Unrealized Loss on Investments

The following tables summarize the held-to-maturity securities with unrealized losses. The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

	As of June 30, 2013
	Less than 12 Months					12 Months or More					Total
	Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses
Certificates of Deposit	3	$	500	$	—	—	$	—	$	—	3	$	500	$	—
Government-sponsored enterprises debt obligations	5	1,116		28		—	—		—		5	1,116		28
Mortgage-backed securities:
Government-sponsored enterprises	28	2,463		40		—	—		—		28	2,463		40
Private-label	50	1,198		17		18	268		9		68	1,466		26
Total	86	$	5,277	$	85	18	$	268	$	9	104	$	5,545	$	94

	As of December 31, 2012
	Less than 12 Months					12 Months or More					Total
	Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses
Government-sponsored enterprises debt obligations	3	$	750	$	—	—	$	—	$	—	3	$	750	$	—
Mortgage-backed securities:
Government-sponsored enterprises	1	154		1		1	13		1		2	167		2
Private-label	—	—		—		43	974		22		43	974		22
Total	4	$	904	$	1	44	$	987	$	23	48	$	1,891	$	24

Amortized Cost and Estimated Fair Value of Held-to-Maturity Securities by Contractual Maturity

	As of June 30, 2013				As of December 31, 2012
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Non-mortgage-backed securities:
Due in one year or less	$	1,040	$	1,040	$	1,092	$	1,093
Due after one year through five years	2,835		2,810		1,697		1,698
Total non-mortgage-backed securities	3,875		3,850		2,789		2,791
Mortgage-backed securities	15,006		15,094		14,129		14,333
Total	$	18,881	$	18,944	$	16,918	$	17,124

Held-to-Maturity MBS Issued by Members or Affiliates of Members

A summary of held-to-maturity MBS issued by members or affiliates of members follows:

	As of June 30, 2013								As of December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value
Bank of America Corporation, Charlotte, NC	$	743	$	6	$	7	$	742	$	896	$	11	$	8	$	899

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Statements of Capital (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance			$ 6,275	$ 6,561
Issuance of capital stock			2,327	531
Repurchase/redemption of capital stock (shares)				(12)
Repurchase/redemption of capital stock			(2,371)	(1,189)
Net shares reclassified to mandatorily redeemable capital stock			(7)	(53)
Comprehensive income	130	59	282	255
Cash dividends on capital stock			(55)	(40)
Ending balance	6,451	6,065	6,451	6,065
Capital Stock Class B Putable
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (shares)			49	57
Beginning balance			4,898	5,718
Issuance of capital stock (shares)			23	6
Issuance of capital stock			2,327	531
Repurchase/redemption of capital stock (shares)			(24)
Repurchase/redemption of capital stock			(2,371)
Net Shares Reclassified to Mandatorily Redeemable Capital Stock, Shares			0	(1)
Net shares reclassified to mandatorily redeemable capital stock			(7)	(53)
Ending balance (shares)	48	50	48	50
Ending balance	4,847	5,007	4,847	5,007
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance			1,435	1,254
Comprehensive income			157	130
Cash dividends on capital stock			(55)	(40)
Ending balance	1,537	1,344	1,537	1,344
Retained Earnings, Restricted
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance			73	19
Comprehensive income			32	26
Cash dividends on capital stock			0	0
Ending balance	105	45	105	45
Retained Earnings, Unrestricted
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance			1,362	1,235
Comprehensive income			125	104
Cash dividends on capital stock			(55)	(40)
Ending balance	1,432	1,299	1,432	1,299
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance			(58)	(411)
Comprehensive income			125	125
Ending balance	$ 67	$ (286)	$ 67	$ (286)

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Basis of Presentation

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim financial statements of the Federal Home Loan Bank of Atlanta (Bank) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and income and expenses during the reporting period. Actual results could be different from these estimates. The foregoing interim financial statements are unaudited; however, in the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the results for the interim periods, have been included. The results of operations for interim periods are not necessarily indicative of results to be expected for the year ending December 31, 2013, or for other interim periods. The unaudited interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2012, which are contained in the Bank’s 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 22, 2013 (Form 10-K).

The Bank has certain financial instruments, including derivative instruments and securities purchased under agreements to resell, that are subject to offset under master netting arrangements or by operation of law. The Bank has elected to offset its derivative asset and liability positions, as well as cash collateral received or pledged, when it has the legal right of offset under these master agreements. The Bank does not have any offsetting liabilities related to its securities purchased under agreements to resell for the periods presented.

The net exposure for these financial instrumentscan 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. There may be a delay for excess collateral to be returned.  For derivative instruments, any excess cash collateral received or pledged is recognized as a derivative liability or derivative asset based on the terms of the individual master agreement between the Bank and its derivative counterparty.  Additional information regarding these agreements is provided in Note 11–Derivatives and Hedging Activities. Based on the fair value of the related securities held as collateral, the securities purchased under agreements to resell were fully collateralized for the periods presented. Additional information about the Bank's investments in securities purchased under agreements to resell is disclosed in Note 2–Summary of Significant Accounting Policies to the 2012 audited financial statements contained in the Bank's Form 10-K.

A description of all of the Bank’s significant accounting policies is included in Note 2–Summary of Significant Accounting Policies to the 2012 audited financial statements contained in the Bank’s Form 10-K. There have been no material changes to these policies as of June 30, 2013.

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Available-for-sale Securities

6 Months Ended

Jun. 30, 2013

Available-for-sale Securities [Abstract]

Available-for-sale Securities

Available-for-sale Securities

During the six months ended June 30, 2013 and 2012, the Bank transferred certain private-label mortgaged-backed securities (MBS) from its held-to-maturity portfolio to its available-for-sale portfolio. These securities represent private-label MBS in the Bank’s held-to-maturity portfolio for which the Bank has recorded an other-than-temporary impairment loss. The Bank believes the other-than-temporary impairment loss constitutes evidence of a significant deterioration in the issuer’s creditworthiness. The Bank has no current plans to sell these securities nor is the Bank under any requirement to sell these securities.

The following table presents information on private-label MBS transferred. The amounts below represent the values as of the transfer date.

	2013						2012
	Amortized     Cost		Other-than-temporary Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Estimated Fair Value		Amortized     Cost		Other-than-temporary Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Estimated Fair Value
Transferred at March 31,	$	12	$	1	$	11	$	6	$	—	$	6
Transferred at June 30,	—		—		—		—		—		—
Total	$	12	$	1	$	11	$	6	$	—	$	6

Major Security Types. Available-for-sale securities were as follows:

	As of June 30, 2013
	Amortized     Cost		Other-than-temporary Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Private-label MBS	$	2,453	$	44	$	127	$	—	$	2,536

	As of December 31, 2012
	Amortized   Cost		Other-than-temporary   Impairment Recognized in Accumulated Other Comprehensive Income (Loss)		Gross   Unrealized   Gains		Gross   Unrealized   Losses		Estimated Fair Value
Private-label MBS	$	2,717	$	120	$	79	$	—	$	2,676

The following tables summarize the available-for-sale securities with unrealized losses. The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

	As of June 30, 2013
	Less than 12 Months					12 Months or More					Total
	Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses
Private-label MBS	7	$	323	$	7	11	$	382	$	37	18	$	705	$	44
	As of December 31, 2012
	Less than 12 Months					12 Months or More					Total
	Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized    Losses		Number of   Positions	Estimated   Fair  Value		Gross   Unrealized   Losses
Private-label MBS	3	$	154	$	1	26	$	1,240	$	119	29	$	1,394	$	120

A summary of available-for-sale MBS issued by members or affiliates of members follows:

	As of June 30, 2013
	Amortized   Cost		Other-than-temporary   Impairment Recognized in Other Accumulated Comprehensive Income (Loss)		Gross   Unrealized   Gains		Gross   Unrealized   Losses		Estimated   Fair  Value
Bank of America Corporation, Charlotte, NC	$	1,549	$	41	$	81	$	—	$	1,589
	As of December 31, 2012
	Amortized Cost		Other-than-temporary Impairment Recognized in Other Accumulated Comprehensive Income (Loss)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Bank of America Corporation, Charlotte, NC	$	1,712	$	112	$	41	$	—	$	1,641

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Transactions With Members and Their Affiliates and With Housing Associates (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013 loan	Jun. 30, 2012 loan	Dec. 31, 2012
Related Party Transaction [Line Items]
Related parties, minimum stock percent owned	10.00%
Bank of America [Member]
Related Party Transaction [Line Items]
Percent of capital stock held	20.90%
Total advances outstanding to member or affiliate	$ 22,163		$ 9,914
Maximum deposits held in the name of a member or affiliate (less than $1)	$ 1		$ 1
Number of mortgage loans acquired	0	0

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Recently Issued and Adopted Accounting Guidance

6 Months Ended

Jun. 30, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recently Issued And Adopted Accounting Guidance

Recently Issued and Adopted Accounting Guidance

Recently Issued Accounting Guidance

Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes.  In July 2013, the Financial Accounting Standards Board (FASB) issued guidance permitting the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge accounting purposes, in addition to the U.S. Treasury Rate and the London Interbank Offered Rate (LIBOR).  This guidance is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013.  The adoption of this guidance did not have any effect on the Bank's financial condition or results of operations, as the Bank has not designated any hedging relationships using OIS as the benchmark interest rate.

Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.  In February 2013, the FASB issued guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This guidance requires an entity to measure these obligations as the sum of (1) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (2) any additional amount the reporting entity expects to pay on behalf of its co-obligors. This guidance is effective for interim and annual periods beginning on or after December 15, 2013 and will be applied retrospectively to obligations with joint and several liabilities existing at the beginning of an entity's fiscal year of adoption. This guidance is not expected to materially affect the Bank's financial condition or results of operations. 

Recently Adopted Accounting Guidance

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. In January 2013, the FASB issued amended guidance to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. For public entities, this amended guidance is effective for reporting periods beginning after December 15, 2012. The Bank adopted this guidance effective January 1, 2013, which resulted in additional disclosures. The adoption of this guidance did not have any effect on the Bank's financial condition or results of operations.

Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. In January 2013, the FASB issued guidance to clarify the scope of transactions that are subject to previously issued guidance on disclosures about offsetting assets and liabilities. The disclosure guidance on offsetting assets and liabilities applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with GAAP or subject to a master netting arrangement or similar agreement. This guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Bank adopted and applied this guidance retrospectively effective January 1, 2013 for all comparative periods presented, which resulted in additional disclosures. The adoption of this guidance did not have any effect on the Bank's financial condition or results of operations.

Disclosures about Offsetting Assets and Liabilities. In December 2011, FASB issued disclosure requirements that are intended to help investors and other financial statement users better assess the effect or potential effect of offsetting arrangements on an entity’s financial position. Entities are required to disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, entities are required to disclose collateral received and posted in connection with master netting agreements or similar arrangements. This guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Bank adopted and applied this guidance retrospectively effective January 1, 2013 for all comparative periods presented, which resulted in additional disclosures. The adoption of this guidance did not have any effect on the Bank's financial condition or results of operations.

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Held-to-maturity Securities (Details 1) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013 positions	Dec. 31, 2012 positions
Schedule of Held-to-maturity Securities [Line Items]
Number of unrealized loss positions held less than 12 months	86	4
Number of unrealized loss positions held more than 12 months	18	44
Total number of unrealized loss positions	104	48
Estimated fair value of unrealized loss positions held less than 12 months	$ 5,277	$ 904
Estimated fair value of unrealized loss positions held 12 months or more	268	987
Total estimated fair value of positions in an unrealized loss	5,545	1,891
Held to maturity Securities Continuous Unrealized Loss Position Less Than 12 Months Accumulated Loss	85	1
Held to maturity Securities Continuous Unrealized Loss Position 12 Months Or Longer Accumulated Loss	9	23
Held To Maturity Securities Accumulated Unrecognized Holding Loss	94	24
Certificates of Deposit [Member]
Schedule of Held-to-maturity Securities [Line Items]
Number of unrealized loss positions held less than 12 months	3
Number of unrealized loss positions held more than 12 months	0
Total number of unrealized loss positions	3
Estimated fair value of unrealized loss positions held less than 12 months	500
Estimated fair value of unrealized loss positions held 12 months or more	0
Total estimated fair value of positions in an unrealized loss	500
Held to maturity Securities Continuous Unrealized Loss Position Less Than 12 Months Accumulated Loss	0
Held to maturity Securities Continuous Unrealized Loss Position 12 Months Or Longer Accumulated Loss	0
Held To Maturity Securities Accumulated Unrecognized Holding Loss	0	0
Government-Sponsored Enterprises Debt Obligations [Member]
Schedule of Held-to-maturity Securities [Line Items]
Number of unrealized loss positions held less than 12 months	5	3
Number of unrealized loss positions held more than 12 months	0	0
Total number of unrealized loss positions	5	3
Estimated fair value of unrealized loss positions held less than 12 months	1,116	750
Estimated fair value of unrealized loss positions held 12 months or more	0	0
Total estimated fair value of positions in an unrealized loss	1,116	750
Held to maturity Securities Continuous Unrealized Loss Position Less Than 12 Months Accumulated Loss	28	0
Held to maturity Securities Continuous Unrealized Loss Position 12 Months Or Longer Accumulated Loss	0	0
Held To Maturity Securities Accumulated Unrecognized Holding Loss	28	0
Mortgage-backed Securities, Government-sponsored enterprises [Member]
Schedule of Held-to-maturity Securities [Line Items]
Number of unrealized loss positions held less than 12 months	28	1
Number of unrealized loss positions held more than 12 months	0	1
Total number of unrealized loss positions	28	2
Estimated fair value of unrealized loss positions held less than 12 months	2,463	154
Estimated fair value of unrealized loss positions held 12 months or more	0	13
Total estimated fair value of positions in an unrealized loss	2,463	167
Held to maturity Securities Continuous Unrealized Loss Position Less Than 12 Months Accumulated Loss	40	1
Held to maturity Securities Continuous Unrealized Loss Position 12 Months Or Longer Accumulated Loss	0	1
Held To Maturity Securities Accumulated Unrecognized Holding Loss	40	2
Private-label MBS
Schedule of Held-to-maturity Securities [Line Items]
Number of unrealized loss positions held less than 12 months	50	0
Number of unrealized loss positions held more than 12 months	18	43
Total number of unrealized loss positions	68	43
Estimated fair value of unrealized loss positions held less than 12 months	1,198	0
Estimated fair value of unrealized loss positions held 12 months or more	268	974
Total estimated fair value of positions in an unrealized loss	1,466	974
Held to maturity Securities Continuous Unrealized Loss Position Less Than 12 Months Accumulated Loss	17	0
Held to maturity Securities Continuous Unrealized Loss Position 12 Months Or Longer Accumulated Loss	9	22
Held To Maturity Securities Accumulated Unrecognized Holding Loss	$ 26	$ 22

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Consolidated Obligations (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Consolidated Obligation Bonds by Interest-Rate Payment

Interest-rate Payment Terms. The following table details the Bank’s consolidated obligation bonds by interest-rate payment type:

	As of June 30, 2013		As of December 31, 2012
Fixed-rate	$	71,609	$	76,212
Step up/down	7,454		4,419
Simple variable-rate	6,750		1,250
Variable-rate capped floater	45		20
Total par value	$	85,858	$	81,901

Consolidated Obligation Bonds Outstanding, by Year of Contractual Maturity

Redemption Terms. The following is a summary of the Bank’s participation in consolidated obligation bonds outstanding, by year of contractual maturity:

	As of June 30, 2013				As of December 31, 2012
	Amount			Weighted- average Interest Rate (%)	Amount			Weighted- average Interest Rate (%)
Due in one year or less	$	43,727		0.70	$	55,397		0.79
Due after one year through two years	10,088			1.35	7,587			2.08
Due after two years through three years	7,854			1.87	2,507			1.92
Due after three years through four years	7,709			2.47	3,344			4.25
Due after four years through five years	5,270			2.21	6,298			2.82
Due after five years	11,210			1.91	6,768			2.31
Total par value	85,858			1.30	81,901			1.36
Premiums	94				91
Discounts	(30		)		(34		)
Hedging adjustments	274				989
Total	$	86,196			$	82,947

Callable and Noncallable Consolidated Obligations Bonds Outstanding

The Bank’s consolidated obligation bonds outstanding by call feature:

	As of June 30, 2013		As of December 31, 2012
Noncallable	$	63,082	$	71,880
Callable	22,776		10,021
Total par value	$	85,858	$	81,901

Summary of Callable Consolidated Obligation Bonds Outstanding, by Year of Contractual Maturity

The following table summarizes the Bank’s consolidated obligation bonds outstanding, by year of contractual maturity or, for callable consolidated obligation bonds, next call date:

	As of June 30, 2013		As of December 31, 2012
Due or callable in one year or less	$	61,990	$	62,540
Due or callable after one year through two years	9,910		6,550
Due or callable after two years through three years	4,044		2,136
Due or callable after three years through four years	6,184		3,024
Due or callable after four years through five years	2,427		6,028
Due or callable after five years	1,303		1,623
Total par value	$	85,858	$	81,901

Consolidated Obligation Discount Notes

The Bank’s participation in consolidated obligation discount notes was as follows:

	Book Value		Par Value		Weighted-average Interest Rate (%)
As of June 30, 2013	$	26,161	$	26,167	0.08
As of December 31, 2012	$	31,737	$	31,745	0.12

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Estimated Fair Values (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

Fair Value on a Recurring Basis. The following tables present, for each fair value hierarchy level, the Bank’s financial assets and liabilities that are measured at fair value on a recurring basis on its Statements of Condition:

	As of June 30, 2013
	Fair Value Measurements Using							Netting Adjustment (1)
	Level 1		Level 2			Level 3					Total
Assets
Trading securities:
Government-sponsored enterprises debt obligations	$	—	$	1,989		$	—	$	—		$	1,989
Other FHLBank’s bond	—		70			—		—			70
State or local housing agency debt obligations	—		1			—		—			1
Total trading securities	—		2,060			—		—			2,060
Available-for-sale securities:
Private-label MBS	—		—			2,536		—			2,536
Derivative assets:
Interest-rate related	—		1,009			—		(988		)	21
Grantor trust (included in Other assets)	17		—			—		—			17
Total assets at fair value	$	17	$	3,069		$	2,536	$	(988	)	$	4,634
Liabilities
Derivative liabilities:
Interest-rate related	$	—	$	(3,208	)	$	—	$	2,973		$	(235	)
Total liabilities at fair value	$	—	$	(3,208	)	$	—	$	2,973		$	(235	)

____________ 

⁽¹⁾  Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral held or placed with the same counterparties.

	As of December 31, 2012
	Fair Value Measurements Using							Netting Adjustment (1)
	Level 1		Level 2			Level 3					Total
Assets
Trading securities:
Government-sponsored enterprises debt obligations	$	—	$	2,291		$	—	$	—		$	2,291
Other FHLBank’s bond	—		77			—		—			77
State or local housing agency debt obligations	—		2			—		—			2
Total trading securities	—		2,370			—		—			2,370
Available-for-sale securities:
Private-label MBS	—		—			2,676		—			2,676
Derivative assets:
Interest-rate related	—		1,190			—		(1,177		)	13
Grantor trust (included in Other assets)	17		—			—		—			17
Total assets at fair value	$	17	$	3,560		$	2,676	$	(1,177	)	$	5,076
Liabilities
Derivative liabilities:
Interest-rate related	$	—	$	(4,208	)	$	—	$	4,050		$	(158	)
Total liabilities at fair value	$	—	$	(4,208	)	$	—	$	4,050		$	(158	)

____________ 

⁽¹⁾  Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral held or placed with the same counterparties.

Reconciliation of Available-For-Sale Securities Measured at Fair Value

The following table presents a reconciliation of available-for-sale securities that are measured at fair value using significant unobservable inputs (Level 3):

	For the Six Months Ended June 30,
	2013			2012
Balance, beginning of period	$	2,676		$	2,942
Transfer of private-label MBS from held-to-maturity to available-for-sale	11			6
Total (losses) gains realized and unrealized: (1)
Included in net impairment losses recognized in earnings	—			(15		)
Included in other comprehensive income (2)	125			124
Accretion of credit losses in net interest income	1			2
Settlements	(277		)	(318		)
Balance, end of period	$	2,536		$	2,741

____________ 

⁽¹⁾  Related to available-for-sale securities held at period end.

⁽²⁾  This amount is included in other comprehensive income (loss) within the net change in fair value on other-than-temporary impairment available-for-sale securities and reclassification of noncredit portion of impairment losses included in net income.

Carrying Values and Estimated Fair Values

The carrying values and estimated fair values of the Bank’s financial instruments were as follows:

	As of June 30, 2013
				Estimated Fair Value
	Carrying Value			Total			Level 1			Level 2			Level 3		Netting Adjustment
Assets:
Cash and due from banks	$	23		$	23		$	23		$	—		$	—	$	—
Interest bearing-deposits	1,006			1,006			—			1,006			—		—
Securities purchased under agreements to resell	1,000			1,000			—			1,000			—		—
Federal funds sold	5,342			5,342			—			5,342			—		—
Trading securities	2,060			2,060			—			2,060			—		—
Available-for-sale securities	2,536			2,536			—			—			2,536		—
Held-to-maturity securities	18,881			18,944			—			16,688			2,256		—
Mortgage loans held for portfolio, net	1,064			1,174			—			1,174			—		—
Advances	89,450			89,200			—			89,200			—		—
Accrued interest receivable	220			220			—			220			—		—
Derivative assets	21			21			—			1,009			—		(988		)
Grantor trust assets (included in Other assets)	17			17			17			—			—		—
Liabilities:
Interest-bearing deposits	(2,172		)	(2,172		)	—			(2,172		)	—		—
Consolidated obligations, net:
Discount notes	(26,161		)	(26,160		)	—			(26,160		)	—		—
Bonds	(86,196		)	(86,294		)	—			(86,294		)	—		—
Mandatorily redeemable capital stock	(25		)	(25		)	(25		)	—			—		—
Accrued interest payable	(238		)	(238		)	—			(238		)	—		—
Derivative liabilities	(235		)	(235		)	—			(3,208		)	—		2,973

	As of December 31, 2012
				Estimated Fair Value
	Carrying Value			Total			Level 1			Level 2			Level 3		Netting Adjustment
Assets:
Cash and due from banks	$	4,083		$	4,083		$	4,083		$	—		$	—	$	—
Interest bearing-deposits	1,005			1,005			—			1,005			—		—
Securities purchased under agreements to resell	250			250			—			250			—		—
Federal funds sold	7,235			7,235			—			7,235			—		—
Trading securities	2,370			2,370			—			2,370			—		—
Available-for-sale securities	2,676			2,676			—			—			2,676		—
Held-to-maturity securities	16,918			17,124			—			14,366			2,758		—
Mortgage loans held for portfolio, net	1,244			1,377			—			1,377			—		—
Advances	87,503			87,945			—			87,945			—		—
Accrued interest receivable	240			240			—			240			—		—
Derivative assets	13			13			—			1,190			—		(1,177		)
Grantor trust assets (included in Other assets)	17			17			17			—			—		—
Liabilities:
Interest-bearing deposits	(2,094		)	(2,094		)	—			(2,094		)	—		—
Consolidated obligations, net:
Discount notes	(31,737		)	(31,739		)	—			(31,739		)	—		—
Bonds	(82,947		)	(83,750		)	—			(83,750		)	—		—
Mandatorily redeemable capital stock	(40		)	(40		)	(40		)	—			—		—
Accrued interest payable	(229		)	(229		)	—			(229		)	—		—
Derivative liabilities	(158		)	(158		)	—			(4,208		)	—		4,050

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Commitments and Contingencies (Details Textual) (USD $)	Jun. 30, 2013 bank	Dec. 31, 2012
Commitments and Contingencies Disclosure [Abstract]
Number of Federal Home Loan Banks	12
The FHLBank's outstanding consolidated obligations for which the Bank is jointly and severally liable	$ 592,479,000,000	$ 574,257,000,000
The value of guarantees related to standby letters of credit recorded in other liabilities	76,000,000	74,000,000
Bank unconditional commitments on closed mortgage loans	0	0
Commitment to issue consolidated obligation bonds	650,000,000	3,055,000,000
Amount of consolidated obligation bonds to be issued that are hedged with interest rate swaps	$ 650,000,000	$ 3,035,000,000

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Available-for-sale Securities (Details 1) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Estimated fair value of available-for-sale securities	$ 2,536	$ 2,676
Private-label MBS
Schedule of Available-for-sale Securities [Line Items]
Amortized cost of available-for-sale securities	2,453	2,717
Other-than-temporary impairment recognized in accumulated other comprehensive loss	44	120
Gross unrealized gains on available-for-sale securities	127	79
Gross unrealized losses on available-for-sale securities	0	0
Estimated fair value of available-for-sale securities	$ 2,536	$ 2,676

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Estimated Fair Values (Details 2) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013		Mar. 31, 2013	Dec. 31, 2012		Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011
Assets:
Trading securities	$ 2,060			$ 2,370
Available-for-sale securities	2,536			2,676
Held-to-maturity securities	18,944			17,124
Derivative assets	21			13
Liabilities:
Interest-bearing deposits	(2,172)			(2,094)
Consolidated obligations:
Mandatorily redeemable capital stock	(25)		(34)	(40)		(115)	(328)	(286)
Derivative liabilities	(235)			(158)
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Cash and due from banks	23			4,083
Interest bearing-deposits	0			0
Securities purchased under agreements to resell	0			0
Federal funds sold	0			0
Trading securities	0			0
Available-for-sale securities	0			0
Held-to-maturity securities	0			0
Mortgage loans held for portfolio, net	0			0
Advances	0			0
Accrued interest receivable	0			0
Derivative assets	0			0
Grantor trust assets (included in Other assets)	17			17
Liabilities:
Interest-bearing deposits	0			0
Consolidated obligations:
Mandatorily redeemable capital stock	(25)			(40)
Accrued interest payable	0			0
Derivative liabilities	0			0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Cash and due from banks	0			0
Interest bearing-deposits	1,006			1,005
Securities purchased under agreements to resell	1,000			250
Federal funds sold	5,342			7,235
Trading securities	2,060			2,370
Available-for-sale securities	0			0
Held-to-maturity securities	16,688			14,366
Mortgage loans held for portfolio, net	1,174			1,377
Advances	89,200			87,945
Accrued interest receivable	220			240
Derivative assets	1,009			1,190
Grantor trust assets (included in Other assets)	0			0
Liabilities:
Interest-bearing deposits	(2,172)			(2,094)
Consolidated obligations:
Mandatorily redeemable capital stock	0			0
Accrued interest payable	(238)			(229)
Derivative liabilities	(3,208)			(4,208)
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Cash and due from banks	0			0
Interest bearing-deposits	0			0
Securities purchased under agreements to resell	0			0
Federal funds sold	0			0
Trading securities	0			0
Available-for-sale securities	2,536			2,676
Held-to-maturity securities	2,256			2,758
Mortgage loans held for portfolio, net	0			0
Advances	0			0
Accrued interest receivable	0			0
Derivative assets	0			0
Grantor trust assets (included in Other assets)	0			0
Liabilities:
Interest-bearing deposits	0			0
Consolidated obligations:
Mandatorily redeemable capital stock	0			0
Accrued interest payable	0			0
Derivative liabilities	0			0
Total collateral and netting adjustment | Fair Value, Measurements, Recurring [Member]
Assets:
Cash and due from banks	0			0
Interest bearing-deposits	0			0
Securities purchased under agreements to resell	0			0
Federal funds sold	0			0
Trading securities	0	[1]		0	[1]
Available-for-sale securities	0			0
Held-to-maturity securities	0			0
Mortgage loans held for portfolio, net	0			0
Advances	0			0
Accrued interest receivable	0			0
Derivative assets	(988)			(1,177)
Grantor trust assets (included in Other assets)	0	[1]		0	[1]
Liabilities:
Interest-bearing deposits	0			0
Consolidated obligations:
Mandatorily redeemable capital stock	0			0
Accrued interest payable	0			0
Derivative liabilities	2,973			4,050
Carrying Value [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Cash and due from banks	23			4,083
Interest bearing-deposits	1,006			1,005
Securities purchased under agreements to resell	1,000			250
Federal funds sold	5,342			7,235
Trading securities	2,060			2,370
Available-for-sale securities	2,536			2,676
Held-to-maturity securities	18,881			16,918
Mortgage loans held for portfolio, net	1,064			1,244
Advances	89,450			87,503
Accrued interest receivable	220			240
Derivative assets	21			13
Grantor trust assets (included in Other assets)	17			17
Liabilities:
Interest-bearing deposits	(2,172)			(2,094)
Consolidated obligations:
Mandatorily redeemable capital stock	(25)			(40)
Accrued interest payable	(238)			(229)
Derivative liabilities	(235)			(158)
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Cash and due from banks	23			4,083
Interest bearing-deposits	1,006			1,005
Securities purchased under agreements to resell	1,000			250
Federal funds sold	5,342			7,235
Trading securities	2,060			2,370
Available-for-sale securities	2,536			2,676
Held-to-maturity securities	18,944			17,124
Mortgage loans held for portfolio, net	1,174			1,377
Advances	89,200			87,945
Accrued interest receivable	220			240
Derivative assets	21			13
Grantor trust assets (included in Other assets)	17			17
Liabilities:
Interest-bearing deposits	(2,172)			(2,094)
Consolidated obligations:
Mandatorily redeemable capital stock	(25)			(40)
Accrued interest payable	(238)			(229)
Derivative liabilities	(235)			(158)
Discount Notes [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Discount notes	0			0
Discount Notes [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Discount notes	(26,160)			(31,739)
Discount Notes [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Discount notes	0			0
Discount Notes [Member] | Total collateral and netting adjustment | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Discount notes	0			0
Discount Notes [Member] | Carrying Value [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Discount notes	(26,161)			(31,737)
Discount Notes [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Discount notes	(26,160)			(31,739)
Unsecured Debt [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Bonds	0			0
Unsecured Debt [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Bonds	(86,294)			(83,750)
Unsecured Debt [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Bonds	0			0
Unsecured Debt [Member] | Total collateral and netting adjustment | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Bonds	0			0
Unsecured Debt [Member] | Carrying Value [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Bonds	(86,196)			(82,947)
Unsecured Debt [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Measurements, Recurring [Member]
Consolidated obligations:
Bonds	$ (86,294)			$ (83,750)

[1] Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral held or placed with the same counterparties.

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Consolidated Obligations (Details 2) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Debt, Gross	$ 85,858	$ 81,901
Unsecured Debt [Member]
Debt Instrument [Line Items]
Debt, Gross	85,858	81,901
Noncallable | Unsecured Debt [Member]
Debt Instrument [Line Items]
Debt, Gross	63,082	71,880
Callable | Unsecured Debt [Member]
Debt Instrument [Line Items]
Debt, Gross	$ 22,776	$ 10,021

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Advances (Details 2) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Advances [Abstract]
Fixed rate, due in one year or less	$ 43,191	$ 38,307
Fixed rate, due after one year	31,967	33,425
Total fixed-rate	75,158	71,732
Variable rate, due in one year or less	3,261	3,177
Variable rate, due after one year	8,804	8,961
Total variable-rate	12,065	12,138
Federal Home Loan Bank Advances at par value	$ 87,223	$ 83,870

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Other-than-temporary Impairment (Details)	Jun. 30, 2013
Minimum
Schedule of Projected Home Price Recovery Ranges
1 to 6	0.00%
7 to 12	1.00%
13 to 18	2.00%
19 to 30	2.00%
31 to 54	2.00%
Thereafter	2.30%
Maximum
Schedule of Projected Home Price Recovery Ranges
1 to 6	3.00%
7 to 12	4.00%
13 to 18	4.00%
19 to 30	5.00%
31 to 54	6.00%
Thereafter	5.60%

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Statements of Condition (Unaudited) (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Deposits with other FHLBanks	$ 1	$ 1
Other FHLBank's bonds	70	77
Held-to-maturity securities, fair value	18,944	17,124
Allowance for credit losses on mortgage loans	$ 12	$ 11
Capital stock Class B putable par value (per share)	$ 100	$ 100
Subclass B1
Capital stock, shares issued	9	12
Capital stock, shares outstanding	9	12
Subclass B2
Capital stock, shares issued	39	37
Capital stock, shares outstanding	39	37

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Advances

6 Months Ended

Jun. 30, 2013

Advances [Abstract]

Advances

Advances

Redemption Terms. The Bank had advances outstanding, as summarized below.

	As of June 30, 2013			As of December 31, 2012
Overdrawn demand deposit accounts	$	5		$	2
Due in one year or less	46,446			41,482
Due after one year through two years	7,309			7,915
Due after two years through three years	5,071			4,735
Due after three years through four years	8,236			5,821
Due after four years through five years	6,975			8,758
Due after five years	13,181			15,157
Total par value	87,223			83,870
Discount on AHP(1)	(9		)	(11		)
Discount on EDGE(2) advances	(7		)	(8		)
Hedging adjustments	2,248			3,658
Deferred commitment fees	(5		)	(6		)
Total	$	89,450		$	87,503

___________

⁽¹⁾ The Affordable Housing Program

⁽²⁾ The Economic Development and Growth Enhancement program

The following table summarizes advances by year of contractual maturity or, for convertible advances, next conversion date:

	As of June 30, 2013		As of December 31, 2012
Overdrawn demand deposit accounts	$	5	$	2
Due or convertible in one year or less	50,417		46,198
Due or convertible after one year through two years	7,402		7,886
Due or convertible after two years through three years	4,942		4,748
Due or convertible after three years through four years	7,222		5,368
Due or convertible after four years through five years	5,175		6,570
Due or convertible after five years	12,060		13,098
Total par value	$	87,223	$	83,870

Interest-rate Payment Terms. The following table details interest-rate payment terms for advances:

	As of June 30, 2013		As of December 31, 2012
Fixed-rate:
Due in one year or less	$	43,191	$	38,307
Due after one year	31,967		33,425
Total fixed-rate	75,158		71,732
Variable-rate:
Due in one year or less	3,261		3,177
Due after one year	8,804		8,961
Total variable-rate	12,065		12,138
Total par value	$	87,223	$	83,870

Credit Risk. The Bank’s potential credit risk from advances is concentrated in commercial banks, thrifts, and credit unions and further is concentrated in certain larger borrowing relationships. As of June 30, 2013 and December 31, 2012, the concentration of the Bank’s advances was $65,857 and $62,488, respectively, to 10 member institutions, representing 75.5 percent and 74.5 percent, respectively, of total advances outstanding.

Based on the collateral pledged as security for advances, the Bank's credit analysis of members’ financial condition, and prior repayment history, no allowance for credit losses on advances was deemed necessary by the Bank as of June 30, 2013 and December 31, 2012. No advance was past due as of June 30, 2013 and December 31, 2012.

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Statements of Comprehensive Income (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Statement of Comprehensive Income [Abstract]
Net income	$ 86	$ 60	$ 157	$ 130
Net noncredit portion of other-than-temporary impairment losses on available-for-sale securities:
Noncredit losses transferred from held-to-maturity securities	0	0	(1)	0
Net change in fair value on other-than-temporary impairment available-for-sale securities	43	(10)	125	109
Reclassification of noncredit portion of impairment losses included in net income	0	8	0	15
Net noncredit portion of other-than-temporary impairment losses on available-for-sale securities	43	(2)	124	124
Net noncredit portion of other-than-temporary impairment losses on held-to-maturity securities:
Noncredit losses on held-to-maturity securities	0	0	(1)	0
Reclassification of noncredit portion from held-to-maturity securities to available-for-sale securities	0	0	1	0
Net noncredit portion of other-than-temporary impairment losses on held-to-maturity securities	0	0	0	0
Pension and postretirement benefits:
Total other comprehensive income	1	1	1	1
Total other comprehensive income (loss)	44	(1)	125	125
Total comprehensive income	$ 130	$ 59	$ 282	$ 255

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Capital and Mandatorily Redeemable Capital Stock (Details Textual) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011
Capital and Mandatorily Redeemable Capital Stock (Textual) [Abstract]
Mandatorily redeemable capital stock	$ 25	$ 34	$ 40	$ 115	$ 328	$ 286
Redemption period for excess capital stock (in years)	5 years

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Statements of Condition (Unaudited) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Assets
Cash and due from banks	$ 23	$ 4,083
Interest-bearing deposits (including deposits with another FHLBank of $1 as of June 30, 2013 and December 31, 2012)	1,006	1,005
Securities purchased under agreements to resell	1,000	250
Federal funds sold	5,342	7,235
Trading securities (includes another FHLBank’s bond of $70 and $77 as of June 30, 2013 and December 31, 2012, respectively)	2,060	2,370
Available-for-sale securities	2,536	2,676
Held-to-maturity securities (fair value of $18,944 and $17,124 as of June 30, 2013 and December 31, 2012, respectively)	18,881	16,918
Mortgage loans held for portfolio, net of allowance for credit losses on mortgage loans of $12 and $11 as of June 30, 2013 and December 31, 2012, respectively	1,064	1,244
Advances	89,450	87,503
Accrued interest receivable	220	240
Premises and equipment, net	30	32
Derivative assets	21	13
Other assets	145	136
Total assets	121,778	123,705
Liabilities
Interest-bearing deposits	2,172	2,094
Consolidated obligations, net:
Discount notes	26,161	31,737
Bonds	86,196	82,947
Total consolidated obligations, net	112,357	114,684
Mandatorily redeemable capital stock	25	40
Accrued interest payable	238	229
Affordable Housing Program payable	75	80
Derivative liabilities	235	158
Other liabilities	225	145
Total liabilities	115,327	117,430
Commitments and contingencies (Note 13)
Capital
Total capital stock Class B putable	4,847	4,898
Retained earnings:
Restricted	105	73
Unrestricted	1,432	1,362
Total retained earnings	1,537	1,435
Accumulated other comprehensive income (loss)	67	(58)
Total capital	6,451	6,275
Total liabilities and capital	121,778	123,705
Subclass B1
Capital
Total capital stock Class B putable	940	1,160
Subclass B2
Capital
Total capital stock Class B putable	$ 3,907	$ 3,738

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Advances (Details Textual) (USD $)	Jun. 30, 2013 Institutions	Dec. 31, 2012 Institutions
Advances [Line Items]
Advances to largest borrowers	$ 65,857,000,000	$ 62,488,000,000
Number of largest borrowers	10	10
Largest borrowers concentration in total advances	75.50%	74.50%
Allowance for credit losses on advances	0	0
Advances past due	$ 0	$ 0

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Capital and Mandatorily Redeemable Capital Stock (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Schedule of Compliance With Regulatory Capital Requirements

The Bank was in compliance with the Federal Housing Finance Agency's (Finance Agency) regulatory capital rules and requirements as shown in the following table:

	As of June 30, 2013						As of December 31, 2012
	Required			Actual			Required			Actual
Risk based capital	$	2,089		$	6,408		$	1,625		$	6,373
Total capital-to-assets ratio	4.00		%	5.26		%	4.00		%	5.15		%
Total regulatory capital (1)	$	4,871		$	6,408		$	4,948		$	6,373
Leverage ratio	5.00		%	7.89		%	5.00		%	7.73		%
Leverage capital	$	6,089		$	9,612		$	6,185		$	9,560

___________

⁽¹⁾  Mandatorily redeemable capital stock is considered capital for regulatory purposes, and “total regulatory capital” includes the Bank’s $25and $40 in mandatorily redeemable capital stock as of June 30, 2013 and December 31, 2012, respectively.

Activity in Mandatorily Redeemable Capital Stock

The following table provides the activity in mandatorily redeemable capital stock:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Balance, beginning of period	$	34		$	328		$	40		$	286
Capital stock subject to mandatory redemption reclassified from equity during the period due to:
Attainment of non-member status	3			1			7			81
Withdrawal	—			—			—			1
Repurchase/redemption of mandatorily redeemable capital stock	(12		)	(214		)	(22		)	(224		)
Capital stock no longer subject to redemption due to the transfer of stock from a non-member to a member	—			—			—			(29		)
Balance, end of period	$	25		$	115		$	25		$	115

Amount of Mandatorily Redeemable Capital Stock by Year of Redemption

The following table shows the amount of mandatorily redeemable capital stock by year of redemption. The year of redemption in the table is the end of the five-year redemption period, or with respect to activity-based stock, the later of the expiration of the five-year redemption period or the activity’s maturity date.

	As of June 30, 2013		As of December 31, 2012
Due in one year or less	$	2	$	—
Due after one year through two years	7		12
Due after two years through three years	9		9
Due after three years through four years	6		17
Due after four years through five years	—		1
Due after five years	1		1
Total	$	25	$	40

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Trading Securities (Tables) (Categories of Investments, Marketable Securities, Trading Securities [Member])

6 Months Ended

Jun. 30, 2013

Categories of Investments, Marketable Securities, Trading Securities [Member]

Schedule of Trading Securities and Other Trading Assets [Line Items]

Schedule of Major Trading Securities

Major Security Types. Trading securities were as follows:

	As of June 30, 2013		As of December 31, 2012
Government-sponsored enterprises debt obligations	$	1,989	$	2,291
Another FHLBank’s bond (1)	70		77
State or local housing agency debt obligations	1		2
Total	$	2,060	$	2,370

 ____________

⁽¹⁾  The Federal Home Loan Bank of Chicago is the primary obligor of this consolidated obligation bond.

Schedule of Net Unrealized and Realized (Losses) Gains on Trading Securities

Net unrealized and realized losses on trading securities were as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Net unrealized losses on trading securities held at period end	$	(40	)	$	(4	)	$	(62	)	$	(26	)
Net unrealized/realized losses on trading securities sold/matured during the period	—			—			(2		)	(7		)
Net losses on trading securities	$	(40	)	$	(4	)	$	(64	)	$	(33	)

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Held-to-maturity Securities (Details Textual) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Held-to-maturity Securities, Unclassified [Abstract]
Net discounts included in amortized cost of held-to-maturity securities	$ 1	$ 8

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Consolidated Obligations (Details 1) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Debt, Gross	$ 85,858	$ 81,901
Total	86,196	82,947
Unsecured Debt [Member]
Debt Instrument [Line Items]
Bonds, Due in one year or less	43,727	55,397
Bonds, Due after one year through two years	10,088	7,587
Bonds, Due after two years through three years	7,854	2,507
Bonds, Due after three years through four years	7,709	3,344
Bonds, Due after four years through five years	5,270	6,298
Bonds, Due after five years	11,210	6,768
Debt, Gross	85,858	81,901
Premiums	94	91
Discounts	(30)	(34)
Hedging adjustments	274	989
Total	$ 86,196	$ 82,947
Bonds, Due in one year or less, weighted average interest rate	0.70%	0.79%
Bonds, Due after one year through two years, weighted average interest rate	1.35%	2.08%
Bonds, Due after two years through three years, weighted average interest rate	1.87%	1.92%
Bonds, Due after three years through four years, weighted average interest rate	2.47%	4.25%
Bonds, Due after four years through five years, weighted average interest rate	2.21%	2.82%
Bonds, Due after five years, weighted average interest rate	1.91%	2.31%
Total, weighted average interest rate	1.30%	1.36%

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Derivatives and Hedging Activities (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) on Derivative	$ 463		$ (340)		$ 662		$ 107
Gains (Losses) on Hedged Item	(410)		376		(567)		(20)
Net Fair Value Hedge Ineffectiveness	53		36		95		87
Effect of Derivatives on Net Interest Income	(105)	[1]	(216)	[1]	(219)	[1]	(459)	[1]
Advances [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) on Derivative	991		(345)		1,372		152
Gains (Losses) on Hedged Item	(931)		386		(1,265)		(45)
Net Fair Value Hedge Ineffectiveness	60		41		107		107
Effect of Derivatives on Net Interest Income	(264)	[1]	(362)	[1]	(538)	[1]	(748)	[1]
Unsecured Debt [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gains (Losses) on Derivative	(528)		5		(710)		(45)
Gains (Losses) on Hedged Item	521		(10)		698		25
Net Fair Value Hedge Ineffectiveness	(7)		(5)		(12)		(20)
Effect of Derivatives on Net Interest Income	$ 159	[1]	$ 146	[1]	$ 319	[1]	$ 289	[1]

[1] The net interest on derivatives in fair value hedge relationships is presented in the interest income or expense line item of the respective hedged item.

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Available-for-sale Securities (Details 3) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Estimated fair value of available-for-sale securities	$ 2,536	$ 2,676
Bank of America Corporation, Charlotte, NC
Schedule of Available-for-sale Securities [Line Items]
Amortized cost of available-for-sale securities	1,549	1,712
Other-than-temporary impairment recognized in accumulated other comprehensive loss	41	112
Gross unrealized gains on available-for-sale securities	81	41
Gross unrealized losses on available-for-sale securities	0	0
Estimated fair value of available-for-sale securities	$ 1,589	$ 1,641

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Trading Securities (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Trading Securities [Abstract]
Net unrealized losses on trading securities held at period end	$ (40)	$ (4)	$ (62)	$ (26)
Net unrealized/realized losses on trading securities sold/matured during the period	0	0	(2)	(7)
Net losses on trading securities	$ (40)	$ (4)	$ (64)	$ (33)

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Available-for-sale Securities (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Transferred During First Quarter Private-Label MBS Transferred [Member]	Mar. 31, 2013 Transferred During First Quarter Private-Label MBS Transferred [Member]	Jun. 30, 2012 Transferred During First Quarter Private-Label MBS Transferred [Member]	Mar. 31, 2012 Transferred During First Quarter Private-Label MBS Transferred [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized cost of available-for-sale securities			$ 0	$ 12	$ 0	$ 6
Other Than Temporarily Impaired Losses, Not Credit Losses, Available for Sale Securities			0	1	0	0
Estimated fair value of available-for-sale securities	$ 2,536	$ 2,676	$ 0	$ 11	$ 0	$ 6

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Other-than-temporary Impairment

6 Months Ended

Jun. 30, 2013

Other than Temporary Impairment Losses, Investments [Abstract]

Other-than-temporary Impairment

Other-than-temporary Impairment

The Bank evaluates its individual available-for-sale and held-to-maturity securities holdings in an unrealized loss position for other-than-temporary impairment on a quarterly basis. As part of this process, the Bank considers its intent to sell each debt security and whether it is more likely than not the Bank will be required to sell the security before its anticipated recovery. If either of these conditions is met, the Bank recognizes the maximum impairment loss in earnings which is equal to the entire difference between the security’s amortized cost basis and its fair value as of the Statements of Condition dates. For securities in an unrealized loss position that meet neither of these conditions, the Bank evaluates whether there is other-than-temporary impairment by performing an analysis to determine if any of these securities will incur a credit loss, which could be up to the difference between the security’s amortized cost basis and its fair value.

Mortgage-backed Securities. The Bank’s investments in MBS consist of U.S. agency guaranteed securities and senior tranches of private-label MBS. The Bank has increased exposure to the risk of loss on its investments in MBS when the loans backing the MBS exhibit high rates of delinquency and foreclosures, as well as losses on the sale of foreclosed properties. The Bank regularly requires high levels of credit enhancements from the structure of the collateralized mortgage obligation to reduce its risk of loss on such securities. Credit enhancements are defined as the percentage of subordinate tranches, overcollateralization, or excess spread, or the support of monoline insurance, if any, in a security structure that will absorb the losses before the security the Bank purchased will take a loss. The Bank does not purchase credit enhancements for its MBS from monoline insurance companies.

The Bank’s investments in private-label MBS were rated “AAA” (or its equivalent) by a nationally recognized statistical rating organization (NRSRO), such as Moody’s Investors Service (Moody’s) and Standard and Poor’s Ratings Services (S&P), at their purchase dates. The “AAA”-rated securities achieved their ratings through credit enhancement, overcollateralization and senior-subordinated shifting interest features; the latter results in subordination of payments by junior classes to ensure cash flows to the senior classes. The ratings on a significant number of the Bank’s private-label MBS have changed since their purchase dates.

Non-private-label MBS. The unrealized losses related to U.S. agency MBS are caused by interest rate changes and not credit quality. These securities are guaranteed by government agencies or government-sponsored enterprises (GSEs) and the Bank does not expect these securities to be settled at a price less than their amortized cost basis. In addition, the Bank does not intend to sell these investments and it is not more likely than not that the Bank will be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The Bank does not consider these investments to be other-than-temporarily impaired as of June 30, 2013.

Private-label MBS. To assess whether the entire amortized cost basis of its private-label MBS will be recovered, the Bank performs a cash flow analysis for each of its private-label MBS. In performing the cash flow analysis for each of these securities, the Bank uses two third-party models. The first model considers borrower characteristics and the particular attributes of the loans underlying the Bank’s securities, in conjunction with assumptions about future changes in home prices and interest rates, to project prepayments, defaults, and loss severities. A significant input to the first model is the forecast of future housing price changes for the relevant states and core based statistical areas (CBSAs), which are based upon an assessment of the individual housing markets. The term CBSA refers collectively to metropolitan and micropolitan statistical areas as defined by the United States Office of Management and Budget; as currently defined, a CBSA must contain at least one urban area of 10,000 or more people. The Bank’s housing price forecast as of June 30, 2013 included a short-term housing price forecast using whole percentages, with projected changes ranging from negative five percent to seven percent over the 12 month period beginning April 1, 2013.

For the vast majority of markets, the short-term forecast has changes from negative three percent to five percent. Thereafter, home prices were projected to recover using one of five different recovery paths. The following table presents projected home price recovery ranges by months as of June 30, 2013:

Months	Annualized Rates (%)
1 to 6	0.00 to 3.00
7 to 12	1.00 to 4.00
13 to 18	2.00 to 4.00
19 to 30	2.00 to 5.00
31 to 54	2.00 to 6.00
Thereafter	2.30 to 5.60

The month-by-month projections of future loan performance derived from the first model, which reflect projected prepayments, defaults, and loss severities, were then input into a second model that allocates the projected loan level cash flows and losses to the various security classes in the securitization structure in accordance with its prescribed cash flow and loss allocation rules. The model classifies securities based on current characteristics and performance, which may be different from the securities’ classification as determined by the originator at the time of origination.

At each quarter end, the Bank compares the present value of the cash flows (discounted at the securities' effective yield) expected to be collected with respect to its private-label MBS to the amortized cost basis of the security to determine whether a credit loss exists. For the Bank’s variable rate and hybrid private-label MBS, the Bank uses a forward interest rate curve to project the future estimated cash flows. The Bank then uses the effective interest rate for the security prior to impairment for determining the present value of the future estimated cash flows. For securities previously identified as other-than-temporarily impaired, the Bank updates its estimate of future estimated cash flows on a quarterly basis. There were no securities for which an other-than-temporary-impairment was determined to have occurred during the three-month period ended June 30, 2013.

The following table presents a roll-forward of the amount of credit losses on the Bank’s investment securities recognized in earnings for which a portion of the other-than-temporary loss was recognized in accumulated other comprehensive income (loss):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Balance of credit losses previously recognized in earnings, beginning of period	$	586		$	589		$	586		$	582
Amount related to credit loss for which an other-than-temporary impairment was previously recognized	—			8			—			15
Increase in cash flows expected to be collected, recognized over the remaining life of the securities	(2		)	(5		)	(2		)	(5		)
Balance of cumulative credit losses recognized in earnings, end of period	$	584		$	592		$	584		$	592

Certain other private-label MBS that have not been designated as other-than-temporarily impaired have experienced unrealized losses and decreases in fair value due to interest rate volatility, illiquidity in the marketplace, and general disruption in the U.S. mortgage markets. These declines in fair value are considered temporary as the Bank expects to recover the amortized cost basis of the securities, the Bank does not intend to sell these securities, and it is not more likely than not that the Bank will be required to sell these securities before the anticipated recovery of the securities’ remaining amortized cost basis, which may be at maturity. This assessment is based on the fact that the Bank has sufficient capital and liquidity to operate its business and has no need to sell these securities, nor has the Bank entered into any contractual constraints that would require the Bank to sell these securities.

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Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated Other Comprehensive (Loss) Income, Beginning of period			$ (58)	$ (411)
Noncredit other-than-temporary impairment losses	0	0	(1)	0
Noncredit other-than-temporary impairment losses transferred	0	0	(1)	0
Net change in fair value	43	(10)	125	109
Noncredit other-than-temporary impairment losses	0	8	0	15
Amortization of pension and postretirement	1	1	1	1
Total other comprehensive income (loss)	44	(1)	125	125
Accumulated Other Comprehensive (Loss) Income, End of period	67	(286)	67	(286)
Pension and Postretirement Benefits
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated Other Comprehensive (Loss) Income, Beginning of period			(17)	(13)
Amortization of pension and postretirement			1	1
Total other comprehensive income (loss)			1	1
Accumulated Other Comprehensive (Loss) Income, End of period	(16)	(12)	(16)	(12)
Available-for-sale Securities | Noncredit Portion of Other Than Temporary Impairment Losses on Available for Sale Securities
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated Other Comprehensive (Loss) Income, Beginning of period			(41)	(398)
Noncredit other-than-temporary impairment losses transferred			(1)
Net change in fair value			125	109
Noncredit other-than-temporary impairment losses				15
Total other comprehensive income (loss)			124	124
Accumulated Other Comprehensive (Loss) Income, End of period	83	(274)	83	(274)
Held-to-maturity Securities [Member] | Noncredit Portion of Other Than Temporary Impairment Losses on Available for Sale Securities
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated Other Comprehensive (Loss) Income, Beginning of period			0	0
Noncredit other-than-temporary impairment losses			(1)
Noncredit other-than-temporary impairment losses transferred			1
Total other comprehensive income (loss)			0	0
Accumulated Other Comprehensive (Loss) Income, End of period	$ 0	$ 0	$ 0	$ 0

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Components Comprising Accumulated Other Comprehensive Loss

Components comprising accumulated other comprehensive income (loss) were as follows:

	Pension and Postretirement Benefits			Noncredit Portion of Other-than- temporary Impairment  Losses on Available-for- sale Securities			Noncredit Portion of Other-than-temporary Impairment Losses on Held-to-maturity Securities			Total  Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2011	$	(13	)	$	(398	)	$	—		$	(411	)
Other comprehensive loss before reclassifications:
Net change in fair value	—			109			—			109
Reclassification from other comprehensive loss to net income:
Noncredit other-than-temporary impairment losses	—			15			—			15
Amortization of pension and postretirement(1)	1			—			—			1
Net current period other comprehensive income	1			124			—			125
Balance, June 30, 2012	$	(12	)	$	(274	)	$	—		$	(286	)
Balance, December 31, 2012	$	(17	)	$	(41	)	$	—		$	(58	)
Other comprehensive loss before reclassifications:
Noncredit other-than-temporary impairment losses	—			—			(1		)	(1		)
Noncredit other-than-temporary impairment losses transferred	—			(1		)	1			—
Net change in fair value	—			125			—			125
Reclassification from other comprehensive loss to net income:
Amortization of pension and postretirement(1)	1			—			—			1
Net current period other comprehensive income	1			124			—			125
Balance, June 30, 2013	$	(16	)	$	83		$	—		$	67

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Held-to-maturity Securities (Details 2) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of non-mortgage backed held-to-maturity securities	$ 18,881	$ 16,918
Amortized cost of held-to-maturity securities	18,881	16,918
Estimated fair value of held-to-maturity securites	18,944	17,124
Non-mortgage Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of held-to-maturity securites due in one year or less	1,040	1,092
Amortized cost of held-to-maturity securites due after one year through five years	2,835	1,697
Amortized cost of non-mortgage backed held-to-maturity securities	3,875	2,789
Fair value of held-to-maturity securites due in one year or less	1,040	1,093
Fair value of held-to-maturity securites due after one year through five years	2,810	1,698
Estimated fair value of held-to-maturity securites	3,850	2,791
Mortgage-backed securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost of mortgage-backed held-to-maturity securities	15,006	14,129
Fair value of mortgage-backed securities	$ 15,094	$ 14,333

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Capital and Mandatorily Redeemable Capital Stock

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Capital and Mandatorily Redeemable Capital Stock

Capital and Mandatorily Redeemable Capital Stock

Capital. The Bank was in compliance with the Federal Housing Finance Agency's (Finance Agency) regulatory capital rules and requirements as shown in the following table:

	As of June 30, 2013						As of December 31, 2012
	Required			Actual			Required			Actual
Risk based capital	$	2,089		$	6,408		$	1,625		$	6,373
Total capital-to-assets ratio	4.00		%	5.26		%	4.00		%	5.15		%
Total regulatory capital (1)	$	4,871		$	6,408		$	4,948		$	6,373
Leverage ratio	5.00		%	7.89		%	5.00		%	7.73		%
Leverage capital	$	6,089		$	9,612		$	6,185		$	9,560

___________

⁽¹⁾  Mandatorily redeemable capital stock is considered capital for regulatory purposes, and “total regulatory capital” includes the Bank’s $25and $40 in mandatorily redeemable capital stock as of June 30, 2013 and December 31, 2012, respectively.

Mandatorily Redeemable Capital Stock. The following table provides the activity in mandatorily redeemable capital stock:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
Balance, beginning of period	$	34		$	328		$	40		$	286
Capital stock subject to mandatory redemption reclassified from equity during the period due to:
Attainment of non-member status	3			1			7			81
Withdrawal	—			—			—			1
Repurchase/redemption of mandatorily redeemable capital stock	(12		)	(214		)	(22		)	(224		)
Capital stock no longer subject to redemption due to the transfer of stock from a non-member to a member	—			—			—			(29		)
Balance, end of period	$	25		$	115		$	25		$	115

The following table shows the amount of mandatorily redeemable capital stock by year of redemption. The year of redemption in the table is the end of the five-year redemption period, or with respect to activity-based stock, the later of the expiration of the five-year redemption period or the activity’s maturity date.

	As of June 30, 2013		As of December 31, 2012
Due in one year or less	$	2	$	—
Due after one year through two years	7		12
Due after two years through three years	9		9
Due after three years through four years	6		17
Due after four years through five years	—		1
Due after five years	1		1
Total	$	25	$	40

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Subsequent Events (Details) (Subsequent Event [Member], Dividend Paid [Member], USD $) In Millions, unless otherwise specified	0 Months Ended
	Jul. 30, 2013
Subsequent Event [Member] | Dividend Paid [Member]
Subsequent Event [Line Items]
Dividends paid	$ 29

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Held-to-maturity Securities

6 Months Ended

Jun. 30, 2013

Held-to-maturity Securities, Unclassified [Abstract]

Held-to-maturity Securities

Held-to-maturity Securities

Major Security Types. Held-to-maturity securities were as follows:

	As of June 30, 2013								As of December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value
Certificates of deposit	$	500	$	—	$	—	$	500	$	550	$	—	$	—	$	550
State or local housing agency debt obligations	98		1		—		99		106		2		—		108
Government-sponsored enterprises debt obligations	3,277		2		28		3,251		2,133		—		—		2,133
Mortgage-backed securities:
U.S. agency obligations-guaranteed	532		8		—		540		622		8		—		630
Government-sponsored enterprises	12,207		131		40		12,298		10,763		184		2		10,945
Private-label	2,267		15		26		2,256		2,744		36		22		2,758
Total	$	18,881	$	157	$	94	$	18,944	$	16,918	$	230	$	24	$	17,124

The following tables summarize the held-to-maturity securities with unrealized losses. The unrealized losses are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position.

	As of June 30, 2013
	Less than 12 Months					12 Months or More					Total
	Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses
Certificates of Deposit	3	$	500	$	—	—	$	—	$	—	3	$	500	$	—
Government-sponsored enterprises debt obligations	5	1,116		28		—	—		—		5	1,116		28
Mortgage-backed securities:
Government-sponsored enterprises	28	2,463		40		—	—		—		28	2,463		40
Private-label	50	1,198		17		18	268		9		68	1,466		26
Total	86	$	5,277	$	85	18	$	268	$	9	104	$	5,545	$	94

	As of December 31, 2012
	Less than 12 Months					12 Months or More					Total
	Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses		Number of Positions	Estimated Fair  Value		Gross Unrealized Losses
Government-sponsored enterprises debt obligations	3	$	750	$	—	—	$	—	$	—	3	$	750	$	—
Mortgage-backed securities:
Government-sponsored enterprises	1	154		1		1	13		1		2	167		2
Private-label	—	—		—		43	974		22		43	974		22
Total	4	$	904	$	1	44	$	987	$	23	48	$	1,891	$	24

Redemption Terms. The amortized cost and estimated fair value of held-to-maturity securities by contractual maturity are shown below. Expected maturities of some securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment fees.

	As of June 30, 2013				As of December 31, 2012
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Non-mortgage-backed securities:
Due in one year or less	$	1,040	$	1,040	$	1,092	$	1,093
Due after one year through five years	2,835		2,810		1,697		1,698
Total non-mortgage-backed securities	3,875		3,850		2,789		2,791
Mortgage-backed securities	15,006		15,094		14,129		14,333
Total	$	18,881	$	18,944	$	16,918	$	17,124

The amortized cost of the Bank’s MBS classified as held-to-maturity includes net discounts of $1 and $8 as of June 30, 2013 and December 31, 2012, respectively.

A summary of held-to-maturity MBS issued by members or affiliates of members follows:

	As of June 30, 2013								As of December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair  Value
Bank of America Corporation, Charlotte, NC	$	743	$	6	$	7	$	742	$	896	$	11	$	8	$	899

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Statements of Cash Flows (Unaudited) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating activities
Net income	$ 157	$ 130
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	(39)	(24)
Provision for credit losses	3	3
(Gain) loss due to change in net fair value adjustment on derivative and hedging activities	(24)	146
Net change in fair value adjustment on trading securities	64	33
Net impairment losses recognized in earnings	0	15
Net change in:
Accrued interest receivable	20	40
Other assets	(9)	6
Affordable Housing Program payable	(8)	(13)
Accrued interest payable	9	(29)
Other liabilities	(2)	(14)
Total adjustments	14	163
Net cash provided by operating activities	171	293
Net change in:
Interest-bearing deposits	894	153
Securities purchased under agreements to resell	(750)	0
Federal funds sold	1,893	(418)
Trading securities:
Proceeds from maturities	250	690
Available-for-sale securities:
Proceeds from maturities	277	318
Held-to-maturity securities:
Net change in short-term	50	25
Proceeds from maturities of long-term	1,964	1,946
Purchases of long-term	(3,904)	(2,142)
Advances:
Proceeds from principal collected	71,397	97,168
Made	(74,744)	(92,177)
Mortgage loans held for portfolio:
Proceeds from principal collected	162	200
Proceeds from sale of foreclosed assets	14	7
Purchase of premise, equipment, and software	(1)	(1)
Net cash (used in) provided by investing activities	(2,498)	5,769
Financing activities
Net change in deposits	70	(512)
Net payments on derivatives containing a financing element	(84)	(185)
Proceeds from issuance of consolidated obligations:
Discount notes	105,474	187,553
Bonds	44,572	42,643
Payments for debt issuance costs	(5)	(6)
Payments for maturing and retiring consolidated obligations:
Discount notes	(111,045)	(190,457)
Bonds	(40,594)	(44,169)
Proceeds from issuance of capital stock	2,327	531
Payments for repurchase/redemption of capital stock	(2,371)	(1,189)
Payments for repurchase/redemption of mandatorily redeemable capital stock	(22)	(224)
Cash dividends paid	(55)	(40)
Net cash used in financing activities	(1,733)	(6,055)
Net (decrease) increase in cash and due from banks	(4,060)	7
Cash and due from banks at beginning of the period	4,083	6
Cash and due from banks at end of the period	23	13
Cash paid for:
Interest	239	365
Affordable Housing Program assessments, net	22	26
Noncash investing and financing activities:
Net shares reclassified to mandatorily redeemable capital stock	7	53
Held-to-maturity securities acquired with accrued liabilities	83	0
Transfer of held-to-maturity securities to available-for-sale securities	11	6
Transfers of mortgage loans to real estate owned	$ 16	$ 6

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Consolidated Obligations (Details Textual)	6 Months Ended
	Jun. 30, 2013 bank
Debt Disclosure [Abstract]
Number of Federal Home Loan Banks	12
Maximum contractual maturity period of discount notes (up to one year)	1 year

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Other-than-temporary Impairment (Details Textual)	6 Months Ended
	Jun. 30, 2013 people recovery_path
Schedule of Projected Home Price Recovery Ranges [Line Items]
Minimum number of people under CBSA	10,000
Projected house price, decline rate	(3.00%)
Projected house price, increase rate	5.00%
Number of projected recovery paths for the housing market	5
Minimum
Schedule of Projected Home Price Recovery Ranges [Line Items]
Home price range	(5.00%)
Maximum
Schedule of Projected Home Price Recovery Ranges [Line Items]
Home price range	7.00%

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Outstanding Standby Letters of Credit

The Bank’s outstanding standby letters of credit were as follows:

	As of June 30, 2013		As of December 31, 2012
Outstanding notional	$	19,471	$	17,687
Original terms(1)	Three months to 20 years		Less than four months to 20 years
Final expiration year	2030		2030

____________ 

⁽¹⁾  The Bank had 11 standby letters of credit for a total of $7 and five standby letters of credit for a total of $49 as of June 30, 2013 and December 31, 2012, respectively, that have no stated maturity date and are subject to renewal on an annual basis.

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Derivatives and Hedging Activities (Details 3) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 1,009		$ 1,190
Derivative Liability, Fair Value, Gross Liability	(3,208)		(4,208)
Derivative assets offset against collateral	(988)		(1,177)
Derivative liabilities offset against collateral	2,973		4,050
Net positive credit exposure after cash collateral	21		13
Derivative liabilities	(235)		(158)
Noncash collateral pledged that cannot be resold or repledged	0	[1]	1	[1]
Noncash collateral received that cannot be resold or repledged	0	[1]	0	[1]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	21	[2]	12	[2]
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	(235)	[2]	(158)	[2]
Credit Risk Contract [Member]
Derivatives, Fair Value [Line Items]
Net exposure to credit derivatives	15		8
Total collateral and netting adjustment
Derivatives, Fair Value [Line Items]
Derivative assets offset against collateral	(988)	[3]	(1,177)	[3]
Derivative liabilities offset against collateral	2,973	[3]	4,050	[3]
Exchange Cleared [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	3		0
Derivative Liability, Fair Value, Gross Liability	0		0
Net positive credit exposure after cash collateral	15		0
Derivative liabilities	0		0
Noncash collateral pledged that cannot be resold or repledged	0	[1]	0	[1]
Noncash collateral received that cannot be resold or repledged	0	[1]	0	[1]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	15	[2]	0	[2]
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	0	[2]	0	[2]
Exchange Cleared [Member] | Total collateral and netting adjustment
Derivatives, Fair Value [Line Items]
Derivative assets offset against collateral	12		0
Derivative liabilities offset against collateral	0		0
Over the Counter [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	1,006		1,190
Derivative Liability, Fair Value, Gross Liability	(3,208)		(4,208)
Net positive credit exposure after cash collateral	6		13
Derivative liabilities	(235)		(158)
Noncash collateral pledged that cannot be resold or repledged	0	[1]	1	[1]
Noncash collateral received that cannot be resold or repledged	0	[1]	0	[1]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	6	[2]	12	[2]
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	(235)	[2]	(158)	[2]
Over the Counter [Member] | Total collateral and netting adjustment
Derivatives, Fair Value [Line Items]
Derivative assets offset against collateral	(1,000)		(1,177)
Derivative liabilities offset against collateral	$ 2,973		$ 4,050

[1] Collateral held with respect to derivatives with member institutions where the Bank is acting as an intermediary represents the amount of eligible collateral physically held by or on behalf of the Bank or collateral assigned to the Bank, as evidenced by a written security agreement, and held by the member institution for the benefit of the Bank.

[2] The Bank had net credit exposure of $15 and $8 as of June 30, 2013 and December 31, 2012, respectively, due to instances where the Bank’s pledged collateral to a counterparty exceeds the Bank’s net derivative liability position.

[3] Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral and related accrued interest held or placed with the same counterparties.

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Capital and Mandatorily Redeemable Capital Stock (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Equity [Abstract]
Risk Based Capital, Required	$ 2,089		$ 1,625
Risk Based Capital, Actual	6,408		6,373
Regulatory Capital Ratio, Required	4.00%		4.00%
Regulatory Capital Ratio, Actual	5.26%		5.15%
Regulatory Capital, Required	4,871	[1]	4,948	[1]
Regulatory Capital, Actual	6,408	[1]	6,373	[1]
Leverage Ratio, Required	5.00%		5.00%
Leverage Ratio, Actual	7.89%		7.73%
Leverage Capital, Required	6,089		6,185
Leverage Capital, Actual	$ 9,612		$ 9,560

[1] Mandatorily redeemable capital stock is considered capital for regulatory purposes, and “total regulatory capital” includes the Bank’s $25 and $40 in mandatorily redeemable capital stock as of June 30, 2013 and December 31, 2012, respectively.

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Estimated Fair Values

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Estimated Fair Values

Estimated Fair Values

The Bank records trading securities, available-for-sale securities, derivative assets and liabilities, and grantor trust assets (publicly-traded mutual funds) at estimated fair value on a recurring basis. Fair value is a market-based measurement and is defined 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. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the assets or owes the liability. In general, the transaction price will equal the exit price and, therefore, represent the fair value of the asset or liability at initial recognition. In determining whether a transaction price represents the fair value of the asset or liability at initial recognition, each reporting entity is required to consider factors specific to the transaction and the asset or liability, the principal or most advantageous market for the asset or liability, and market participants with whom the entity would transact in the market.

A fair value hierarchy is used to prioritize the inputs of valuation techniques used to measure fair value. The inputs are evaluated and an overall level for the fair value measurement is determined. This overall level is an indication of how market-observable the fair value measurement is and defines the level of disclosure. The fair value hierarchy defines fair value in terms of a price in an orderly transaction between market participants to sell an asset or transfer a liability in the principal (or most advantageous) market for the asset or liability at the measurement date (an exit price). In order to determine the fair value or the exit price, entities must determine the unit of account, highest and best use, principal market, and market participants. These determinations allow the reporting entity to define the inputs for fair value and level of hierarchy.

Outlined below is the application of the “fair value hierarchy” to the Bank's financial assets and financial liabilities that are carried at fair value.

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. 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. As of June 30, 2013 and December 31, 2012, the Bank carried grantor trust assets at fair value hierarchy Level 1.

Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. As of June 30, 2013 and December 31, 2012, the Bank carried trading securities and derivatives at fair value hierarchy Level 2.

Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs are supported by little or no market activity and reflect the entity's own assumptions. As of June 30, 2013 and December 31, 2012, the Bank carried available-for-sale securities at fair value hierarchy Level 3.

The Bank utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

Fair Value on a Recurring Basis. The following tables present, for each fair value hierarchy level, the Bank’s financial assets and liabilities that are measured at fair value on a recurring basis on its Statements of Condition:

	As of June 30, 2013
	Fair Value Measurements Using							Netting Adjustment (1)
	Level 1		Level 2			Level 3					Total
Assets
Trading securities:
Government-sponsored enterprises debt obligations	$	—	$	1,989		$	—	$	—		$	1,989
Other FHLBank’s bond	—		70			—		—			70
State or local housing agency debt obligations	—		1			—		—			1
Total trading securities	—		2,060			—		—			2,060
Available-for-sale securities:
Private-label MBS	—		—			2,536		—			2,536
Derivative assets:
Interest-rate related	—		1,009			—		(988		)	21
Grantor trust (included in Other assets)	17		—			—		—			17
Total assets at fair value	$	17	$	3,069		$	2,536	$	(988	)	$	4,634
Liabilities
Derivative liabilities:
Interest-rate related	$	—	$	(3,208	)	$	—	$	2,973		$	(235	)
Total liabilities at fair value	$	—	$	(3,208	)	$	—	$	2,973		$	(235	)

____________ 

⁽¹⁾  Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral held or placed with the same counterparties.

	As of December 31, 2012
	Fair Value Measurements Using							Netting Adjustment (1)
	Level 1		Level 2			Level 3					Total
Assets
Trading securities:
Government-sponsored enterprises debt obligations	$	—	$	2,291		$	—	$	—		$	2,291
Other FHLBank’s bond	—		77			—		—			77
State or local housing agency debt obligations	—		2			—		—			2
Total trading securities	—		2,370			—		—			2,370
Available-for-sale securities:
Private-label MBS	—		—			2,676		—			2,676
Derivative assets:
Interest-rate related	—		1,190			—		(1,177		)	13
Grantor trust (included in Other assets)	17		—			—		—			17
Total assets at fair value	$	17	$	3,560		$	2,676	$	(1,177	)	$	5,076
Liabilities
Derivative liabilities:
Interest-rate related	$	—	$	(4,208	)	$	—	$	4,050		$	(158	)
Total liabilities at fair value	$	—	$	(4,208	)	$	—	$	4,050		$	(158	)

____________ 

⁽¹⁾  Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral held or placed with the same counterparties.

For financial instruments carried at fair value, the Bank reviews the fair value hierarchy classification of financial assets and liabilities on a quarterly basis. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in/out at fair value as of the beginning of the quarter in which the changes occur. There were no such transfers during the periods presented.

The following table presents a reconciliation of available-for-sale securities that are measured at fair value using significant unobservable inputs (Level 3):

	For the Six Months Ended June 30,
	2013			2012
Balance, beginning of period	$	2,676		$	2,942
Transfer of private-label MBS from held-to-maturity to available-for-sale	11			6
Total (losses) gains realized and unrealized: (1)
Included in net impairment losses recognized in earnings	—			(15		)
Included in other comprehensive income (2)	125			124
Accretion of credit losses in net interest income	1			2
Settlements	(277		)	(318		)
Balance, end of period	$	2,536		$	2,741

____________ 

⁽¹⁾  Related to available-for-sale securities held at period end.

⁽²⁾  This amount is included in other comprehensive income (loss) within the net change in fair value on other-than-temporary impairment available-for-sale securities and reclassification of noncredit portion of impairment losses included in net income.

Described below are the Bank's fair value measurement methodologies for financial assets and liabilities measured or disclosed at fair value.

Cash and Due from Banks. The estimated fair value approximates the recorded carrying value.

Interest-bearing Deposits. The estimated fair value is determined by calculating the present value of the expected future cash flows from the deposits and reducing this amount for accrued interest receivable. The discount rate used in these calculations is the rate for deposits with similar terms and represents market observable rates.

Securities purchased under agreements to resell. The estimated fair value is determined by calculating the present value of the expected future cash flows. The discount rates used in these calculations are the rates for securities with similar terms and represent market observable rates.

Federal Funds Sold. The estimated fair value is determined by calculating the present value of the expected future cash flows. The discount rates used in these calculations are the rates for federal funds with similar terms and represent market observable rates.

Investment Securities. The Bank obtains prices from four designated third-party pricing vendors when available to estimate the fair value of its investment securities. The pricing vendors use various proprietary models to price investment securities. 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 investment securities do not trade on a daily basis, the pricing vendors use available information as applicable such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing to determine the prices for individual securities. Each pricing vendor has an established challenge process in place for all investment securities valuations, which facilitates resolution of potentially erroneous prices identified by the Bank.

The Bank periodically conducts reviews of the four pricing vendors to confirm and further augment its understanding of the vendors' pricing processes, methodologies, and control procedures for agency and private-label MBS.

The Bank's valuation technique for estimating the fair value of its investment securities first requires the establishment of a “median” price for each security.

All prices that are within a specified tolerance threshold of the median price are included in the “cluster” of prices that are averaged to compute a “default” price. All prices that are outside the threshold (“outliers”) are subject to further analysis (including, but not limited to, comparison to prices provided by an additional third-party valuation service, prices for similar securities, and/or non-binding dealer estimates) to determine if an outlier is a better estimate of fair value. If an outlier (or some other price identified in the analysis) is determined to be a better estimate of fair value, then the outlier (or the other price as appropriate) is used as the final price rather than the default price. Alternatively, if the analysis does not provide evidence that an outlier is in fact more representative of the 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 June 30, 2013 and December 31, 2012, four vendor prices were received for a majority of the Bank's investment securities holdings and the final prices for those securities were computed by averaging the prices received. Based on the Bank's review of the pricing methods and controls employed by the third-party pricing vendors and the relative lack of dispersion among the vendor prices (or, in those instances in which there were outliers or significant yield variances, the Bank's additional analyses), the Bank believes its final prices are representative of the prices that would have been received if the assets had been sold at the measurement date (i.e., exit prices) and further that the fair value measurements are classified appropriately in the fair value hierarchy. Based on the lack of significant market activity for private-label MBS, the fair value measurement for those securities were classified as Level 3 within the fair value hierarchy as of June 30, 2013 and December 31, 2012.

As an additional step for certain securities, the Bank reviewed the final fair value estimates of its private-label MBS holdings as of June 30, 2013 and December 31, 2012 for reasonableness using an implied yield test. The Bank calculated an implied yield for certain of its private-label MBS using the estimated fair value derived from the process described above and the security's projected cash flows from the Bank's other-than-temporary impairment process and compared such yield to the market yield for comparable securities according to a third source to the extent comparable market yield data was available. This analysis did not indicate that any material adjustments to the fair value estimates were necessary.

Mortgage Loans Held for Portfolio. The estimated fair values for mortgage loans are determined based on quoted market prices of similar mortgage loans available in the pass-through securities market. These prices, however, can change rapidly based upon market conditions and are highly dependent upon the underlying prepayment assumptions.

Advances. The Bank determines the estimated fair values of advances by calculating the present value of expected future cash flows from the advances and excluding the amount of the accrued interest receivable. The discount rates used in these calculations are the replacement advance rates based on the market observable LIBOR curve for advances with similar terms as of June 30, 2013 and December 31, 2012, respectively. In accordance with the advances regulations, advances with a maturity or repricing period greater than six months require a prepayment fee sufficient to make the Bank financially indifferent to the borrower's decision to prepay the advances, thereby removing prepayment risk from the fair value calculation. The Bank did not adjust the fair value measurement of advances for creditworthiness because advances were fully collateralized (see Note 7–Advances for additional information).

Accrued Interest Receivable and Payable. The estimated fair value approximates the recorded carrying value.

Derivative Assets and Liabilities. The Bank calculates the fair value of derivatives using a present value of future cash flows discounted by a market observable rate. The Bank used OIS to discount future cash flows for collateralized derivatives.

Derivative instruments are transacted primarily in the institutional dealer market and priced with observable market assumptions at a mid-market valuation point. The Bank does not provide a credit valuation adjustment based on aggregate exposure by derivative counterparty when measuring the fair value of its derivatives. This is because the collateral provisions pertaining to the Bank's derivatives obviate the need to provide such a credit valuation adjustment. The fair values of the Bank's derivatives take into consideration the effects of legally enforceable master netting agreements, where applicable, that allow the Bank to settle positive and negative positions and offset cash collateral with the same counterparty on a net basis. The Bank and each bilateral derivative counterparty have collateral thresholds that take into account both the Bank's and the counterparty's credit ratings. As a result of these practices and agreements, the Bank has concluded that the impact of the credit differential between the Bank and its derivative counterparties was mitigated to an immaterial level and no further adjustments were deemed necessary to the recorded fair values of derivative assets and liabilities on the Statements of Condition as of June 30, 2013 and December 31, 2012.

Grantor Trust Assets. Grantor trust assets, included as a component of Other assets, are carried at estimated fair value based on quoted market prices.

Interest-bearing Deposits. The Bank determines estimated fair values of Bank deposits by calculating the present value of expected future cash flows from the deposits and reducing this amount for accrued interest payable. The discount rate used in these calculations is based on LIBOR.

Consolidated Obligations. The Bank calculates the fair value of consolidated obligation bonds and discount notes by using the present value of future cash flows using a cost of funds as the discount rate. The cost of funds discount curves are based primarily on the market observable LIBOR and to some extent on the Office of Finance cost of funds curve, which also is market observable.

Mandatorily Redeemable Capital Stock. The fair value of mandatorily redeemable capital stock is par value, including estimated dividends earned at the time of reclassification from capital to liabilities, until such amount is paid. Capital stock can be acquired by members only at par value and redeemed by the Bank at par value. Capital stock is not traded and no market mechanism exists for the exchange of capital stock outside the cooperative structure.

The following estimated fair value amounts have been determined by the Bank using available market information and the Bank’s best judgment of appropriate valuation methods. These estimates are based on pertinent information available to the Bank as of June 30, 2013 and December 31, 2012. Although the Bank uses its best judgment in estimating the fair values of these financial instruments, there are inherent limitations in any estimation technique or valuation methodology.

For example, because an active secondary market does not exist for a portion of the Bank’s financial instruments, in certain cases, fair values are not subject to precise quantification or verification and may change as economic and market factors and evaluation of those factors change. Therefore, these estimated fair values are not necessarily indicative of the amounts that would be realized in current market transactions, although they do reflect the Bank’s judgment of how a market participant would estimate the fair value. The fair value tables presented below do not represent an estimate of the overall market value of the Bank as a going concern, which would take into account future business opportunities and the net profitability of assets versus liabilities.

The carrying values and estimated fair values of the Bank’s financial instruments were as follows:

	As of June 30, 2013
				Estimated Fair Value
	Carrying Value			Total			Level 1			Level 2			Level 3		Netting Adjustment
Assets:
Cash and due from banks	$	23		$	23		$	23		$	—		$	—	$	—
Interest bearing-deposits	1,006			1,006			—			1,006			—		—
Securities purchased under agreements to resell	1,000			1,000			—			1,000			—		—
Federal funds sold	5,342			5,342			—			5,342			—		—
Trading securities	2,060			2,060			—			2,060			—		—
Available-for-sale securities	2,536			2,536			—			—			2,536		—
Held-to-maturity securities	18,881			18,944			—			16,688			2,256		—
Mortgage loans held for portfolio, net	1,064			1,174			—			1,174			—		—
Advances	89,450			89,200			—			89,200			—		—
Accrued interest receivable	220			220			—			220			—		—
Derivative assets	21			21			—			1,009			—		(988		)
Grantor trust assets (included in Other assets)	17			17			17			—			—		—
Liabilities:
Interest-bearing deposits	(2,172		)	(2,172		)	—			(2,172		)	—		—
Consolidated obligations, net:
Discount notes	(26,161		)	(26,160		)	—			(26,160		)	—		—
Bonds	(86,196		)	(86,294		)	—			(86,294		)	—		—
Mandatorily redeemable capital stock	(25		)	(25		)	(25		)	—			—		—
Accrued interest payable	(238		)	(238		)	—			(238		)	—		—
Derivative liabilities	(235		)	(235		)	—			(3,208		)	—		2,973

	As of December 31, 2012
				Estimated Fair Value
	Carrying Value			Total			Level 1			Level 2			Level 3		Netting Adjustment
Assets:
Cash and due from banks	$	4,083		$	4,083		$	4,083		$	—		$	—	$	—
Interest bearing-deposits	1,005			1,005			—			1,005			—		—
Securities purchased under agreements to resell	250			250			—			250			—		—
Federal funds sold	7,235			7,235			—			7,235			—		—
Trading securities	2,370			2,370			—			2,370			—		—
Available-for-sale securities	2,676			2,676			—			—			2,676		—
Held-to-maturity securities	16,918			17,124			—			14,366			2,758		—
Mortgage loans held for portfolio, net	1,244			1,377			—			1,377			—		—
Advances	87,503			87,945			—			87,945			—		—
Accrued interest receivable	240			240			—			240			—		—
Derivative assets	13			13			—			1,190			—		(1,177		)
Grantor trust assets (included in Other assets)	17			17			17			—			—		—
Liabilities:
Interest-bearing deposits	(2,094		)	(2,094		)	—			(2,094		)	—		—
Consolidated obligations, net:
Discount notes	(31,737		)	(31,739		)	—			(31,739		)	—		—
Bonds	(82,947		)	(83,750		)	—			(83,750		)	—		—
Mandatorily redeemable capital stock	(40		)	(40		)	(40		)	—			—		—
Accrued interest payable	(229		)	(229		)	—			(229		)	—		—
Derivative liabilities	(158		)	(158		)	—			(4,208		)	—		4,050

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Consolidated Obligations

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Consolidated Obligations

Consolidated Obligations

Consolidated obligations, consisting of consolidated obligation bonds and discount notes, are the joint and several obligations of the 12 Federal Home Loan Banks (FHLBanks) and are backed only by the financial resources of the FHLBanks. The Federal Home Loan Banks Office of Finance (Office of Finance) tracks the amount of debt issued on behalf of each FHLBank. In addition, the Bank separately tracks and records as a liability its specific portion of consolidated obligations for which it is the primary obligor.

Interest-rate Payment Terms. The following table details the Bank’s consolidated obligation bonds by interest-rate payment type:

	As of June 30, 2013		As of December 31, 2012
Fixed-rate	$	71,609	$	76,212
Step up/down	7,454		4,419
Simple variable-rate	6,750		1,250
Variable-rate capped floater	45		20
Total par value	$	85,858	$	81,901

Redemption Terms. The following is a summary of the Bank’s participation in consolidated obligation bonds outstanding, by year of contractual maturity:

	As of June 30, 2013				As of December 31, 2012
	Amount			Weighted- average Interest Rate (%)	Amount			Weighted- average Interest Rate (%)
Due in one year or less	$	43,727		0.70	$	55,397		0.79
Due after one year through two years	10,088			1.35	7,587			2.08
Due after two years through three years	7,854			1.87	2,507			1.92
Due after three years through four years	7,709			2.47	3,344			4.25
Due after four years through five years	5,270			2.21	6,298			2.82
Due after five years	11,210			1.91	6,768			2.31
Total par value	85,858			1.30	81,901			1.36
Premiums	94				91
Discounts	(30		)		(34		)
Hedging adjustments	274				989
Total	$	86,196			$	82,947

The Bank’s consolidated obligation bonds outstanding by call feature:

	As of June 30, 2013		As of December 31, 2012
Noncallable	$	63,082	$	71,880
Callable	22,776		10,021
Total par value	$	85,858	$	81,901

The following table summarizes the Bank’s consolidated obligation bonds outstanding, by year of contractual maturity or, for callable consolidated obligation bonds, next call date:

	As of June 30, 2013		As of December 31, 2012
Due or callable in one year or less	$	61,990	$	62,540
Due or callable after one year through two years	9,910		6,550
Due or callable after two years through three years	4,044		2,136
Due or callable after three years through four years	6,184		3,024
Due or callable after four years through five years	2,427		6,028
Due or callable after five years	1,303		1,623
Total par value	$	85,858	$	81,901

Consolidated Obligation Discount Notes. Consolidated obligation discount notes are issued to raise short-term funds. Consolidated obligation discount notes are consolidated obligations with contractual maturities of up to one year. These consolidated obligation discount notes are issued at less than their face amounts and redeemed at par value when they mature.

The Bank’s participation in consolidated obligation discount notes was as follows:

	Book Value		Par Value		Weighted-average Interest Rate (%)
As of June 30, 2013	$	26,161	$	26,167	0.08
As of December 31, 2012	$	31,737	$	31,745	0.12

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Estimated Fair Values (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Assets:
Trading securities	$ 2,060		$ 2,370
Available-for-sale securities	2,536		2,676
Derivative assets	21		13
Liabilities:
Derivative liabilities	(235)		(158)
Government-Sponsored Enterprises Debt Obligations [Member]
Assets:
Trading securities	1,989		2,291
Other FHLBank's Bond [Member]
Assets:
Trading securities	70	[1]	77	[1]
State or Local Housing Agency Obligations [Member]
Assets:
Trading securities	1		2
Private-label MBS
Assets:
Available-for-sale securities	2,536		2,676
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Trading securities	0		0
Available-for-sale securities	0		0
Derivative assets	0		0
Grantor trust assets (included in Other assets)	17		17
Total assets at fair value	17		17
Liabilities:
Derivative liabilities	0		0
Total liabilities at fair value	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Government-Sponsored Enterprises Debt Obligations [Member]
Assets:
Trading securities	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Other FHLBank's Bond [Member]
Assets:
Trading securities	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | State or Local Housing Agency Obligations [Member]
Assets:
Trading securities	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Private-label MBS
Assets:
Available-for-sale securities	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets:
Trading securities	2,060		2,370
Available-for-sale securities	0		0
Derivative assets	1,009		1,190
Grantor trust assets (included in Other assets)	0		0
Total assets at fair value	3,069		3,560
Liabilities:
Derivative liabilities	(3,208)		(4,208)
Total liabilities at fair value	(3,208)		(4,208)
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Government-Sponsored Enterprises Debt Obligations [Member]
Assets:
Trading securities	1,989		2,291
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Other FHLBank's Bond [Member]
Assets:
Trading securities	70		77
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | State or Local Housing Agency Obligations [Member]
Assets:
Trading securities	1		2
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Private-label MBS
Assets:
Available-for-sale securities	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Assets:
Trading securities	0		0
Available-for-sale securities	2,536		2,676
Derivative assets	0		0
Grantor trust assets (included in Other assets)	0		0
Total assets at fair value	2,536		2,676
Liabilities:
Derivative liabilities	0		0
Total liabilities at fair value	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Government-Sponsored Enterprises Debt Obligations [Member]
Assets:
Trading securities	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Other FHLBank's Bond [Member]
Assets:
Trading securities	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | State or Local Housing Agency Obligations [Member]
Assets:
Trading securities	0		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Private-label MBS
Assets:
Available-for-sale securities	2,536		2,676
Fair Value, Measurements, Recurring [Member] | Total collateral and netting adjustment
Assets:
Trading securities	0	[2]	0	[2]
Available-for-sale securities	0		0
Derivative assets	(988)		(1,177)
Grantor trust assets (included in Other assets)	0	[2]	0	[2]
Total assets at fair value	(988)	[2]	(1,177)	[2]
Liabilities:
Derivative liabilities	2,973		4,050
Total liabilities at fair value	2,973	[2]	4,050	[2]
Fair Value, Measurements, Recurring [Member] | Total collateral and netting adjustment | Government-Sponsored Enterprises Debt Obligations [Member]
Assets:
Trading securities	0	[2]	0	[2]
Fair Value, Measurements, Recurring [Member] | Total collateral and netting adjustment | Other FHLBank's Bond [Member]
Assets:
Trading securities	0	[2]	0	[2]
Fair Value, Measurements, Recurring [Member] | Total collateral and netting adjustment | State or Local Housing Agency Obligations [Member]
Assets:
Trading securities	0	[2]	0	[2]
Fair Value, Measurements, Recurring [Member] | Total collateral and netting adjustment | Private-label MBS
Assets:
Available-for-sale securities	0	[2]	0	[2]
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Assets:
Trading securities	2,060		2,370
Grantor trust assets (included in Other assets)	17		17
Total assets at fair value	4,634		5,076
Liabilities:
Total liabilities at fair value	(235)		(158)
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Government-Sponsored Enterprises Debt Obligations [Member]
Assets:
Trading securities	1,989		2,291
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Other FHLBank's Bond [Member]
Assets:
Trading securities	70		77
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | State or Local Housing Agency Obligations [Member]
Assets:
Trading securities	1		2
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Private-label MBS
Assets:
Available-for-sale securities	2,536		2,676
Interest rate swaps | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Derivative assets	0		0
Liabilities:
Derivative liabilities	0		0
Interest rate swaps | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets:
Derivative assets	1,009		1,190
Liabilities:
Derivative liabilities	(3,208)		(4,208)
Interest rate swaps | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Assets:
Derivative assets	0		0
Liabilities:
Derivative liabilities	0		0
Interest rate swaps | Fair Value, Measurements, Recurring [Member] | Total collateral and netting adjustment
Assets:
Derivative assets	(988)	[2]	(1,177)	[2]
Liabilities:
Derivative liabilities	2,973	[2]	4,050	[2]
Interest rate swaps | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Assets:
Derivative assets	21		13
Liabilities:
Derivative liabilities	$ (235)		$ (158)

[1] The Federal Home Loan Bank of Chicago is the primary obligor of this consolidated obligation bond.

[2] Amounts represent the effect of legally enforceable master netting agreements that allow the Bank to settle positive and negative positions and also cash collateral held or placed with the same counterparties.

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Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On July 25, 2013, the Bank’s board of directors approved a cash dividend for the second quarter of 2013 in the amount of $29. The Bank paid the second quarter 2013 dividend on July 30, 2013.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

As described in Note 8–Consolidated Obligations, consolidated obligations are backed only by the financial resources of the 12 FHLBanks. The Finance Agency may at any time require any FHLBank to make principal or interest payments due on any consolidated obligations, whether or not the primary obligor FHLBank has defaulted on the payment of that obligation. No FHLBank has ever had to assume or pay the consolidated obligation of another FHLBank.

The par value of the FHLBanks’ outstanding consolidated obligations for which the Bank is jointly and severally liable was $592,479 and $574,257 as of June 30, 2013 and December 31, 2012, respectively, exclusive of the Bank’s own outstanding consolidated obligations.

The Bank’s outstanding standby letters of credit were as follows:

	As of June 30, 2013		As of December 31, 2012
Outstanding notional	$	19,471	$	17,687
Original terms(1)	Three months to 20 years		Less than four months to 20 years
Final expiration year	2030		2030

____________ 

⁽¹⁾  The Bank had 11 standby letters of credit for a total of $7 and five standby letters of credit for a total of $49 as of June 30, 2013 and December 31, 2012, respectively, that have no stated maturity date and are subject to renewal on an annual basis.

The carrying value of the guarantees related to standby letters of credit is recorded in other liabilities and amounted to $76 and $74 as of June 30, 2013 and December 31, 2012, respectively. Based on the Bank’s credit analyses and collateral requirements, the Bank does not deem it necessary to record any additional liability on these commitments.

The Bank monitors the creditworthiness of its standby letters of credit based on an evaluation of the member. In addition, standby letters of credit are fully collateralized at the time of issuance. The Bank has established parameters for the measurement, review, classification, and monitoring of credit risk related to these standby letters of credit that results in an internal credit rating, which focuses primarily on an institution’s overall financial health and takes into account quality of assets, earnings, and capital position. In general, borrowers categorized into the highest risk rating category have more restrictions on the types of collateral they may use to secure standby letters of credit, may be required to maintain higher collateral maintenance levels and deliver loan collateral, and may face more stringent collateral reporting requirements.

The Bank had no commitments that unconditionally obligate the Bank to purchase closed mortgage loans as of June 30, 2013 and December 31, 2012. Such commitments would be recorded as derivatives at their fair values.

As of June 30, 2013, the Bank had committed to the issuance of $650 (par value) in consolidated obligation bonds, of which all were hedged with associated interest rate swaps that had traded but not yet settled. As of December 31, 2012, the Bank had committed to the issuance of $3,055 (par value) in consolidated obligation bonds, of which $3,035 were hedged with associated interest rate swaps that had traded but not yet settled.

The Bank is subject to legal proceedings arising in the normal course of business. After consultation with legal counsel, management does not anticipate, as of the date of the financial statements, that the ultimate liability, if any, arising out of these matters will have a material effect on the Bank’s financial condition or results of operations.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 31, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	Federal Home Loan Bank of Atlanta
Entity Central Index Key	0001331465
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		47,373,230

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Transactions With Members and Their Affiliates and With Housing Associates

6 Months Ended

Jun. 30, 2013

Related Party Transaction, Due from (to) Related Party [Abstract]

Transactions With Members and Their Affiliates And With Housing Associates

Transactions with Members and their Affiliates and with Housing Associates

The Bank is a cooperative whose member institutions own substantially all of the capital stock of the Bank. Former members, and certain non-members that own the Bank's capital stock as a result of a merger or acquisition of the Bank's member, own the remaining capital stock to support business transactions still carried on the Bank’s Statements of Condition. All holders of the Bank’s capital stock receive dividends on their investments, to the extent declared by the Bank’s board of directors. All advances are issued to members and eligible “housing associates” under the Federal Home Loan Bank Act of 1932 (FHLBank Act), and mortgage loans held for portfolio are purchased from members. The Bank also maintains demand deposit accounts primarily to facilitate settlement activities that are related directly to advances and mortgage loan purchases. All transactions with members are entered into in the ordinary course of the Bank’s business. Transactions with any member that has an officer or director who also is a director of the Bank are subject to the same Bank policies as transactions with other members.

The Bank defines related parties as each of the other FHLBanks and those members with regulatory capital stock outstanding in excess of 10 percent of the Bank's total regulatory capital stock. Based on this definition, one member institution, Bank of America, National Association, which held 20.9 percent of the Bank’s total regulatory capital stock as of June 30, 2013, was considered a related party. Total advances outstanding to Bank of America, National Association were $22,163 and $9,914 as of June 30, 2013 and December 31, 2012, respectively. Total deposits held in the name of Bank of America, National Association were less than $1 as of June 30, 2013 and December 31, 2012. No mortgage loans or mortgage-backed securities were acquired from Bank of America, National Association during the six months ended June 30, 2013 and 2012.

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Capital and Mandatorily Redeemable Capital Stock (Details 2) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011
Equity [Abstract]
Due in one year or less	$ 2		$ 0
Due after one year through two years	7		12
Due after two years through three years	9		9
Due after three years through four years	6		17
Due after four years through five years	0		1
Due after five years	1		1
Mandatorily redeemable capital stock	$ 25	$ 34	$ 40	$ 115	$ 328	$ 286

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Capital and Mandatorily Redeemable Capital Stock (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Activity In Mandatorily Redeemable Capital Stock
Balance, beginning of year	$ 34	$ 328	$ 40	$ 286
Attainment of nonmember status	3	1	7	81
Withdrawal	0	0	0	1
Repurchase/redemption of mandatorily redeemable capital stock	(12)	(214)	(22)	(224)
Capital stock no longer subject to redemption due to the transfer of stock from a nonmember to a member	0	0	0	(29)
Balance, end of year	$ 25	$ 115	$ 25	$ 115