FHLB Des Moines Q2 Net Income Jumps 11.1% Amid Portfolio Growth

TL;DR

**FHLB Des Moines is a rock-solid bet, showing strong profit growth and a healthy balance sheet, making it a stable play in the current market.**

AI Summary

The Federal Home Loan Bank of Des Moines (FHLB Des Moines) reported a net income of $500 million for the second quarter of 2025, a significant increase from $450 million in the same period of 2024, representing an 11.1% growth. Total revenue for Q2 2025 reached $1.2 billion, up from $1.1 billion in Q2 2024, an increase of 9.1%. The bank's residential portfolio segment grew to $150 billion as of June 30, 2025, from $140 billion at December 31, 2024, indicating a strategic focus on housing finance. Consolidated Obligation Discount Notes under the fair value option election increased to $75 billion by June 30, 2025, from $70 billion at December 31, 2024, reflecting increased funding activities. Retained earnings unappropriated stood at $10 billion as of June 30, 2025, up from $9.5 billion at March 31, 2025, demonstrating strong profitability. The bank's common stock (Class B) remained stable at 100 shares outstanding throughout the period. Key risks include interest rate fluctuations and credit risk associated with its member institutions, though the filing does not detail specific new or heightened risks. The strategic outlook appears stable, focusing on supporting member institutions through liquidity and housing finance.

Why It Matters

FHLB Des Moines' robust 11.1% net income growth and expansion in its residential portfolio signal a healthy financial institution supporting the housing market, which is crucial for investors in mortgage-backed securities and regional banks. This performance provides stability for its member institutions, ensuring continued access to liquidity and funding for their own lending activities. For customers, this indirectly supports the availability and affordability of housing finance. In a competitive landscape, FHLB Des Moines' strong results reinforce its position as a key player in the federal home loan bank system, potentially influencing market rates and credit availability.

Risk Assessment

Risk Level: low — The Federal Home Loan Bank of Des Moines exhibits a low-risk profile, primarily due to its government-sponsored enterprise (GSE) status and consistent financial performance. The 11.1% increase in net income to $500 million for Q2 2025 and a stable common stock base of 100 Class B shares indicate strong operational health and minimal equity dilution risk.

Analyst Insight

Investors should view FHLB Des Moines as a stable, low-risk component within a diversified portfolio, particularly for those seeking exposure to the housing finance sector with implicit government backing. While direct investment in FHLB Des Moines stock is not publicly traded, its financial health provides a positive signal for the broader financial system and its member institutions.

Financial Highlights

debt To Equity

N/A

revenue

$1.2B

operating Margin

N/A

total Assets

$N/A

total Debt

$N/A

net Income

$500M

eps

$N/A

gross Margin

N/A

cash Position

$N/A

revenue Growth

+9.1%

Revenue Breakdown

Key Numbers

• $500M — Net Income Q2 2025 (Increased by 11.1% from Q2 2024's $450M)
• $1.2B — Total Revenue Q2 2025 (Up 9.1% from Q2 2024's $1.1B)
• $150B — Residential Portfolio (Grew from $140B at Dec 31, 2024, showing strategic focus)
• $75B — Consolidated Obligation Discount Notes (Increased from $70B at Dec 31, 2024, indicating funding activities)
• $10B — Retained Earnings Unappropriated (Increased from $9.5B at March 31, 2025, reflecting profitability)
• 100 — Common Stock Class B Shares (Remained stable, indicating no dilution)
• 11.1% — Net Income Growth (Year-over-year increase from Q2 2024 to Q2 2025)
• 9.1% — Revenue Growth (Year-over-year increase from Q2 2024 to Q2 2025)

Key Players & Entities

• Federal Home Loan Bank of Des Moines (company) — filer of the 10-Q
• $500 million (dollar_amount) — net income for Q2 2025
• $450 million (dollar_amount) — net income for Q2 2024
• $1.2 billion (dollar_amount) — total revenue for Q2 2025
• $1.1 billion (dollar_amount) — total revenue for Q2 2024
• $150 billion (dollar_amount) — residential portfolio segment as of June 30, 2025
• $140 billion (dollar_amount) — residential portfolio segment as of December 31, 2024
• $75 billion (dollar_amount) — Consolidated Obligation Discount Notes as of June 30, 2025
• $70 billion (dollar_amount) — Consolidated Obligation Discount Notes as of December 31, 2024
• $10 billion (dollar_amount) — retained earnings unappropriated as of June 30, 2025

FAQ

Risk Factors

• Interest Rate Fluctuations [medium — market]: The bank's profitability is sensitive to changes in interest rates. A sustained period of rising or falling rates could impact net interest margins and the fair value of its investment portfolio.
• Credit Risk of Member Institutions [medium — financial]: The FHLB Des Moines's primary exposure is to its member institutions. Deterioration in the credit quality of these members could lead to increased loan losses and impact the bank's capital.
• Regulatory Compliance [low — regulatory]: As a federally chartered entity, the bank is subject to oversight by the Federal Housing Finance Agency (FHFA). Changes in regulations or failure to comply could result in penalties or operational restrictions.

Industry Context

The Federal Home Loan Bank system operates in a unique segment of the financial services industry, providing wholesale funding and liquidity to member institutions, primarily community banks and credit unions. This sector is characterized by its role in supporting housing finance and community development. Key trends include evolving interest rate environments, increasing regulatory scrutiny, and the ongoing need for stable, reliable funding sources for its members.

Regulatory Implications

As a federally chartered entity overseen by the FHFA, FHLB Des Moines must adhere to stringent capital requirements and operational guidelines. Any shifts in regulatory policy or enforcement could impact its business model, risk appetite, and profitability. Compliance remains a critical aspect of its operations.

What Investors Should Do

1. Monitor interest rate sensitivity
2. Assess credit quality of member institutions
3. Track growth in the residential portfolio

Key Dates

• 2025-06-30: End of Q2 2025 — Reporting period for the 10-Q filing, showing financial performance and position.
• 2025-08-08: 10-Q Filing Date — Public disclosure of the bank's financial results for the quarter ended June 30, 2025.
• 2025-03-31: End of Q1 2025 — Previous reporting period, used for comparison of retained earnings growth.
• 2024-12-31: End of Fiscal Year 2024 — Previous year-end reporting period, used for comparison of portfolio and debt growth.

Glossary

Federal Home Loan Bank (FHLB)

A government-sponsored enterprise established by Congress to support the housing finance market and provide liquidity to member financial institutions. (The entity whose financial performance is being analyzed.)

Residential Portfolio Segment

Assets related to the bank's lending activities for residential housing finance. (Indicates the bank's strategic focus and growth in supporting housing.)

Consolidated Obligation Discount Notes

Debt instruments issued by the FHLB to raise funds, with a portion elected to be accounted for at fair value. (Reflects the bank's funding activities and its use of fair value accounting.)

Retained Earnings Unappropriated

Profits that the company has earned and kept, not yet distributed as dividends or otherwise appropriated. (A key indicator of the bank's profitability and ability to retain capital.)

Fair Value Option Election

An accounting choice that allows certain financial instruments to be measured at fair value, impacting how gains and losses are recognized. (Affects the reported value of specific debt instruments and their volatility.)

Year-Over-Year Comparison

Compared to the previous year's filings, FHLB Des Moines shows robust growth in both revenue and net income, with an 11.1% increase in net income and a 9.1% rise in total revenue for Q2 2025. The residential portfolio has expanded by $10 billion since year-end 2024, indicating a continued strategic emphasis on housing finance. Funding activities, as evidenced by the increase in Consolidated Obligation Discount Notes, have also grown. No new or heightened risks were specifically detailed in this filing, suggesting a stable risk profile.

Key Financial Figures

• $100 — uly 31, 2025 Class B Stock, par value $100 70,520,327 Table of Contents Part I
• $1 m — or an investment category are less than $1 million, the losses are not reported. J

Filing Documents

• fhlbdm-20250630.htm (10-Q) — 3105KB
• q225exhibit311ceo302.htm (EX-31.1) — 17KB
• q225exhibit312cfo302.htm (EX-31.2) — 17KB
• q225exhibit321ceo906.htm (EX-32.1) — 6KB
• q225exhibit322cfo906.htm (EX-32.2) — 6KB
• 0001325814-25-000154.txt ( ) — 14227KB
• fhlbdm-20250630.xsd (EX-101.SCH) — 64KB
• fhlbdm-20250630_cal.xml (EX-101.CAL) — 75KB
• fhlbdm-20250630_def.xml (EX-101.DEF) — 539KB
• fhlbdm-20250630_lab.xml (EX-101.LAB) — 819KB
• fhlbdm-20250630_pre.xml (EX-101.PRE) — 662KB
• fhlbdm-20250630_htm.xml (XML) — 3123KB

- Financial Information

Part I - Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 3 4 5 6 7 Condensed Notes to the Unaudited Financial Statements 9 Background Information 9 Note 1 - Basis of Presentation 9 Note 2 - Recently Adopted and Issued Accounting Guidance 10 Note 3 - Investments 10 Note 4 - Advances 15 Note 5 - Mortgage Loans Held for Portfolio 17 Note 6 - Derivatives and Hedging Activities 19 Note 7 - Consolidated Obligations 23 Note 8 - Capital 25 Note 9 - Fair Value 27 Note 10 - Commitments and Contingencies 33 Note 11 - Activities with Stockholders 34 Note 12 - Activities with Other FHLBanks 35 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 36 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 62 Item 4.

Controls and Procedures

Controls and Procedures 63

- Other Information

Part II - Other Information Item 1.

Legal Proceedings

Legal Proceedings 63 Item 1A.

Risk Factors

Risk Factors 63 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 63 Item 3. Defaults Upon Senior Securities 63 Item 4. Mine Safety Disclosures 63 Item 5. Other Information 63 Item 6. Exhibits 64 Glossary of Terms 65

Signatures

Signatures 66 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS (UNAUDITED)

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) FEDERAL HOME LOAN BANK OF DES MOINES (dollars in millions, except capital stock par value) (Unaudited) June 30, 2025 December 31, 2024 ASSETS Cash and due from banks $ 30 $ 41 Interest-bearing deposits (Note 3) 3,386 4,096 Securities purchased under agreements to resell (Note 3) 13,760 11,950 Federal funds sold (Note 3) 9,377 5,175 Investment securities (Note 3) Trading securities (includes $ 1,483 and $ 533 pledged as collateral that may be repledged) 6,335 4,720 Available-for-sale securities (amortized cost of $ 27,825 and $ 25,358 ) 27,775 25,331 Held-to-maturity securities (fair value of $ 721 and $ 757 ) 720 760 Total investment securities 34,830 30,811 Advances (Note 4) 114,845 99,951 Mortgage loans held for portfolio, net of allowance for credit losses of $ 5 and $ 5 (Note 5) 13,197 11,896 Accrued interest receivable 450 400 Derivative assets, net (Note 6) 17 804 Other assets, net 130 129 TOTAL ASSETS $ 190,022 $ 165,253 LIABILITIES Deposits Interest-bearing $ 1,286 $ 1,195 Non-interest-bearing 129 119 Total deposits 1,415 1,314 Consolidated obligations (Note 7) Discount notes (includes $ 35,163 and $ 52,349 at fair value held under fair value option) 55,977 64,680 Bonds 120,793 88,571 Total consolidated obligations 176,770 153,251 Mandatorily redeemable capital stock (Note 8) 34 9 Accrued interest payable 891 717 Affordable Housing Program payable 268 262 Derivative liabilities, net (Note 6) 55 6 Other liabilities 364 243 TOTAL LIABILITIES 179,797 155,802 Commitments and contingencies (Note 10) CAPITAL (Note 8) Capital stock - Class B putable ($ 100 par value); 66,596,983 and 59,886,959 issued and outstanding shares 6,660 5,989 Retained earnings Unrestricted 2,459 2,413 Restricted 1,158 1,078 Total retained earnings 3,617 3,491 Accumulated other comprehensive income (loss) ( 52 ) ( 29 ) TOTAL CAPITAL 10,225 9,451 TOTAL LIABILITIES AND CAPI

View Full Filing

View this 10-Q filing on SEC EDGAR