FHLBank Atlanta Assisting Florida Local Housing Finance Agencies in - - PowerPoint PPT Presentation

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FHLBank Atlanta Assisting Florida Local Housing Finance Agencies in - - PowerPoint PPT Presentation

FHLBank Atlanta Assisting Florida Local Housing Finance Agencies in Converting Challenges into Opportunities Leah Douglass Vice President, Sales and Trading Operations Manager Arthur L. Fleming Senior Vice President, Director of Community


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FHLBank Atlanta

Assisting Florida Local Housing Finance Agencies in Converting Challenges into Opportunities

Leah Douglass Vice President, Sales and Trading Operations Manager Arthur L. Fleming Senior Vice President, Director of Community Investment Services

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This presentation may include “forward-looking statements,” which include statements with respect to the Bank’s beliefs, plans,

  • bjectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, 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 the future results, performance, or achievements expressed or implied by the forward-looking statements. The forward-looking statements may not be realized due to a variety of factors, including, without limitation: legislative and regulatory actions or changes; future economic and market conditions; changes in demand for advances or consolidated

  • bligations of the Bank and/or the FHLBank System; changes in interest rates; political, national, and world events; and adverse

developments or events affecting or involving other Federal Home Loan Banks or the FHLBank System in general. Additional factors that might cause the Bank’s results to differ from these forward-looking statements are provided in detail in the Bank’s filings with the Securities and Exchange Commission, which are available at www.sec.gov. The information contained herein is provided for illustrative purposes only and is based on certain assumptions that FHLBank Atlanta believes to be reasonable. Different assumptions, however, may lead to materially different results. Additionally, past performance and experience with respect to similar financial products may not necessarily be indicative of actual results. The information, analysis, and applications contained herein should not be relied upon as a substitute for your own business judgment and independent review. You should consult your own regulatory, tax, business, investment, financial and accounting advisors, and should perform your own suitability analysis, before entering into any transaction

  • r structure described herein. Sophisticated financial products are risky and are not appropriate for all persons.

FHLBank Atlanta is not a registered investment advisor and does not advise persons on the advisability of investing in, purchasing, or selling sophisticated financial products, or the means by which any such product may be utilized. Nothing in the information herein should be considered an offer to sell or a solicitation of an offer to buy any securities or derivative

  • products. FHLBank Atlanta is not obligated to update or keep current the information or applications contained herein. FHLBank

Atlanta may own or have a position relative to certain securities or other financial instruments discussed in this information or used in this analysis. Neither FHLBank Atlanta nor any of its directors, officers, employees, agents, attorneys, or representatives, shall have any liability for any loss or damage arising out of the use of all or any part of this information.

Disclaimer

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Who We Are

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FHLBank System

Over 80 Years of Helping Institutions Grow and Prosper

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FHLBank System

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FHLBank Atlanta

Contributing to Our Shareholders’ Success as their Trusted Advisor

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Total Assets

$132.4 billion

Total Advances

$92.5 billion

First Quarter Dividend

4.87%

Total Membership

922 Institutions

* Data as of March 31, 2016

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Core Products and Services

  • Advances (Loans)
  • Letters of Credit
  • Interest-rate risk management tools
  • Derivative Intermediation
  • Cash management services
  • Affordable Housing Program (AHP) and Community Investment

Program (CIP)

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Working with Housing Finance Agencies

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Housing Finance Agencies (HFAs) Eligibility as Housing Associates

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Housing Associate of the FHLBanks is defined as…

Housing Finance Authorities - a public agency, authority, or publicly sponsored corporation that serves as an instrumentality of any state

  • r political subdivision of any state, and functions as a source of

residential mortgage loan financing in that state

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Housing Associate Eligibility Requirements

  • Approved by HUD as a “mortgagee” under Title II of the National

Housing Act

  • Chartered institution having succession
  • Subject to the inspection and supervision of some governmental

agency

  • Principal activity in the mortgage field must consist of lending its
  • wn funds
  • The financial condition is such that advances may be safely made
  • The authority to borrow funds, pledge collateral, and deposit funds

with the FHLBank

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FHLBank Atlanta Housing Associates

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Florida Local HFAs

  • Housing Finance Authority of Miami-Dade County
  • Manatee County Housing Finance Authority
  • Orange County Housing Finance Authority
  • Brevard County Housing Finance Authority
  • Housing Finance Authority of Lee County
  • First Housing Development Corporation of FL
  • Housing Finance Authority of Pinellas County
  • Florida Housing Finance Corporation
  • Housing Finance Authority of Palm Beach County
  • Housing Finance Authority of Broward County
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Value and Benefits of Becoming a Housing Associate

  • Access to all liquidity products without purchasing stock
  • Short-term warehouse
  • Term funding
  • Fixed- and variable-rate
  • Access to Letters of Credit/AAA-rated bond credit enhancement

product

  • Cash management, including safekeeping services
  • Interest-rate risk management tools

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FHLBank Atlanta’s HFA Initiative

Objective: Enhanced operations and policies to better serve the needs of our Housing Associates

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Enhanced Operations and Policies for HFAs

2013 – Workshop with State HFA Executive Directors

  • Expanded collateral policies to accept loans
  • Created new credit rating methodology for HFAs
  • Improved discounts applied to securities collateral
  • Enhanced staff training and understanding of HFA business, operations, and balance sheet

2014 – Luncheon with State HFA Executive Directors at NCSHFA Conference

  • Feedback on credit and collateral; policy enhancements
  • New strategies – “Structured Partnerships”
  • Revised Bank’s advances and security agreement to facilitate HFA pledges of mortgage loans

2015 – Luncheon with Executive Directors of Florida Local Housing Finance Agencies

  • Building new relationships and awareness
  • Eligibility requirements clarifications
  • Structured Partnership concept

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Affordable Housing Products and Services

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FHLBank Atlanta AHP Scale and Impact

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$692.6 Million

competitive funds awarded to create over 109,600 rental and homeownership opportunities for moderate-, low- and very low-income households since 1990. AHP Competitive Leverage Ratio – 1:13

$167 Million

funded through AHP Set-aside products and supporting more than 24,500 units since 1997. AHP Set-aside Purchase Leverage Ratio – 1:20

$7.5 Billion

low-cost CICA advances supporting community economic initiatives and affordable housing development.

*As June 30, 2016

Economic Development Program AHP Competitive Program Community Investment Program AHP Set-aside Program

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Structured Partnerships

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$3 Million $3.8 Million $3 Million $900,000 $1.5 Million $1.8 Million

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Structured Partnership

Structured arrangement between the Federal Home Loan Bank of Atlanta (FHLBank Atlanta) and a group of Florida local housing finance agencies (FL HFAs) using a universal agreement

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Funding

FHLBank Atlanta commitment is up to $1 million

$1 Million

FL HFAs maximum commitment is $2 million

$2 Million

FHLBank Atlanta and FL HFAs will commit grant funds on at least a 2:1 ratio, on a transactional basis

2:1 Ratio

Lead HFA Participating Counties Products HFA of Hillsborough County Hillsborough, Brevard, Clay, and Jacksonville

  • FHA Loans
  • VA Loans
  • RD Loans
  • Fannie Mae

and Freddie Mac *

HFA of Miami-Dade County Miami-Dade HFA of Pinellas Pasco, Pinellas, and Polk

At least a

*Fannie Mae and Freddie Mac available only in Miami-Dade County

Housing Floridians

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  • Generating a pool of new

participating lenders for local HFAs

  • Exclusive access to $11,250 to

$22,500 per household in grant funding

  • Local HFAs via a single

agreement (Universal MOA)

  • Collaborative
  • CRA Innovation Strategy
  • Positive branding and

awareness

Housing Floridians

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Event Sponsorship LOC for Multi- family Bods 4% LIHTC Warehousing financing mortgage loans to facilitate HFA single-family programs Balance Sheet Management Structured Partnerships

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Appendix

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HFA - Credit Scoring and Availability (limits)

  • Proprietary model assigns ratings from 101 through 104

(101 is the healthiest)

  • Based upon increasing probability of default
  • Separate models for banks, credit unions, insurance companies,

and HFAs

  • HFA Credit Model takes the following into account:
  • B/S strength (Asset/Debt Ratio)
  • Portfolio performance (% of loans 90 days PD)
  • Financial performance (Operating income to operating revenue)
  • Variable rate debt (Variable rate debt to program bonds)
  • Credit analysts review ratings each quarter

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APPENDIX

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HFA - Collateral Requirements

Eligible Collateral

  • Treasury securities
  • Agency securities issued by FNMA, FHLMC, FHLBank, and

Ginnie Mae

  • Municipal securities*
  • 1-4 family residential and multifamily loans**

*Must meet specific eligibility requirements ** Must have a credit score of 101 or 102

APPENDIX

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HFA - Collateral Haircuts

Haircuts are applied to daily market values as follows:

Treasury, Agency, and Agency MBS Haircuts:

Maturity 0-5 Maturity 5-10 Maturity 10+ HFA CS 101-102 5% 5% 5% HFA CS 103-104 8% 9% 11%

PLMBS and ABS (2nds) Haircuts:

HFA CS 101-102 12% HFA CS 103-104 30%

CMBS Haircuts:

HFA CS 101-102 12% HFA CS 103-104 30%

*CS – Internal Credit Score on scale of 101-104 with 104 being the lowest/worst

APPENDIX

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Leah Douglass, Vice President, Sales and Trading Operations Manager ldouglass@fhlbatl.com 404.888.8453 Arthur L. Fleming, Senior Vice President, Director of Community Investment Services afleming@fhlbatl.com 404.888.5359 Rob Kovach, Senior Vice President, Chief Credit Officer rkovach@fhlbatl.com 404.888.8461 Jon Parness, Vice President, Associate General Counsel jparness@fhlbatl.com 404.888.5309

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FHLBank Atlanta’s HFA Team

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FHLBank Atlanta

Assisting Florida Local Housing Finance Agencies in Converting Challenges into Opportunities

Leah Douglass Vice President, Sales and Trading Operations Manager Arthur L. Fleming Senior Vice President, Director of Community Investment Services