FHLB Des Moines Q3 Net Income Jumps 27% Amid Asset Growth

TL;DR

**FHLB Des Moines is crushing it with asset growth and a Q3 profit surge, signaling strong demand from its members and a solid financial footing.**

AI Summary

Federal Home Loan Bank of Des Moines reported a net income of $259 million for the three months ended September 30, 2025, a significant increase from $204 million in the same period of 2024. For the nine months ended September 30, 2025, net income was $658 million, down from $708 million in the prior year. Total assets grew to $189,291 million as of September 30, 2025, up from $165,253 million at December 31, 2024, driven by increases in advances to members and investment securities. Advances increased by $10,030 million to $109,981 million, and mortgage loans held for portfolio rose by $2,052 million to $13,948 million. Consolidated obligations, the primary funding source, increased by $23,103 million to $176,354 million. Net interest income for the three months ended September 30, 2025, was $335 million, a slight increase from $327 million in 2024, while the nine-month net interest income decreased to $872 million from $995 million. The Bank's capital grew to $10,241 million from $9,451 million at December 31, 2024, supported by retained earnings and accumulated other comprehensive income. The Bank continues to focus on providing funding and liquidity to its members across its 13-state region and U.S. Pacific territories.

Why It Matters

This filing reveals FHLB Des Moines' robust asset growth, particularly in advances to members and mortgage loans, indicating strong demand for liquidity from its cooperative members. The significant increase in net income for the quarter, up 27% year-over-year, suggests effective balance sheet management despite a slight dip in nine-month net interest income. For investors, the Bank's role as a GSE providing stability to the housing finance system is critical, and its strong capital position of $10,241 million reinforces its ability to fulfill this mandate. This performance provides competitive context, showing FHLB Des Moines' continued strength in supporting its member institutions, including commercial banks, credit unions, and insurance companies, across its vast operating region.

Risk Assessment

Risk Level: low — The Federal Home Loan Bank of Des Moines operates as a government-sponsored enterprise (GSE) and is exempt from most federal, state, and local taxation, providing a significant operational advantage. Its primary funding source, consolidated obligations, is implicitly backed by the U.S. government, reducing credit risk. The Bank also maintains a strong capital base of $10,241 million as of September 30, 2025, further mitigating financial risks.

Analyst Insight

Investors should view FHLB Des Moines' stable performance and growth in advances as a positive indicator for the broader housing finance market. While direct investment in FHLB Des Moines stock is limited to members, the Bank's health reflects the stability of its member institutions. Monitor the demand for advances as a proxy for liquidity needs within the financial sector.

Financial Highlights

debt To Equity

17.48

revenue

$6,528M

operating Margin

N/A

total Assets

$189,291M

total Debt

$176,354M

net Income

$658M

eps

N/A

gross Margin

N/A

cash Position

$73M

revenue Growth

-12.0%

Revenue Breakdown

Key Numbers

• $259M — Net Income (Q3 2025) (Increased from $204M in Q3 2024, a 27% rise.)
• $189.3B — Total Assets (Increased from $165.3B at Dec 31, 2024, reflecting significant growth.)
• $109.98B — Advances to Members (Increased by $10.03B from Dec 31, 2024, indicating strong member demand.)
• $176.35B — Consolidated Obligations (Increased by $23.1B from Dec 31, 2024, funding asset growth.)
• $10.24B — Total Capital (Increased from $9.45B at Dec 31, 2024, strengthening financial position.)
• $872M — Net Interest Income (9 months) (Decreased from $995M in the prior year, despite quarterly increase.)
• 60,775,601 — Class B Stock Shares Outstanding (As of October 31, 2025, representing member ownership.)
• $13.95B — Mortgage Loans Held for Portfolio (Increased by $2.05B from Dec 31, 2024, expanding housing support.)

Key Players & Entities

• Federal Home Loan Bank of Des Moines (company) — registrant
• U.S. Securities and Exchange Commission (regulator) — filing oversight
• Federal Housing Finance Agency (regulator) — primary regulator
• $259 million (dollar_amount) — net income for Q3 2025
• $204 million (dollar_amount) — net income for Q3 2024
• $189,291 million (dollar_amount) — total assets as of September 30, 2025
• $109,981 million (dollar_amount) — advances as of September 30, 2025
• $10,241 million (dollar_amount) — total capital as of September 30, 2025
• FASB (regulator) — accounting standard setter
• President and CEO (person) — Chief Operating Decision Maker (CODM)

FAQ

Risk Factors

• Interest Rate Risk [high — financial]: The Bank's financial results are significantly impacted by interest rate fluctuations. A substantial portion of its assets and liabilities are interest-sensitive, and changes in interest rates can affect net interest income and the fair value of its investments. For instance, total interest income decreased from $7,418 million in the nine months ended September 30, 2024, to $6,528 million in the same period of 2025, while interest expense on consolidated obligations decreased from $6,379 million to $5,620 million.
• Regulatory Compliance [high — regulatory]: As a government-sponsored enterprise, the FHLB system is subject to extensive regulation by the Federal Housing Finance Agency (FHFA). Changes in regulatory requirements, capital standards, or supervisory actions could materially affect the Bank's operations, financial condition, and ability to provide services to its members. The Bank's capital ratio is a key regulatory metric.
• Member Demand and Economic Conditions [medium — market]: The demand for the Bank's products and services, particularly advances, is influenced by the financial health and liquidity needs of its member institutions and broader economic conditions. A downturn in the economy or stress within the member base could lead to reduced demand for advances, impacting revenue. Advances increased by $10,030 million to $109,981 million as of September 30, 2025, indicating strong current demand.
• Cybersecurity and Data Security [medium — operational]: The Bank relies on complex information technology systems to conduct its operations and manage member data. A cybersecurity breach or failure of these systems could result in significant financial losses, reputational damage, and regulatory penalties. The Bank's derivative assets decreased significantly from $804 million to $1 million, potentially indicating a shift in hedging strategies or market conditions.
• Credit Risk [medium — financial]: The Bank is exposed to credit risk through its lending activities, including advances to members and mortgage loans held for portfolio. While the allowance for credit losses on mortgage loans held for portfolio was $5 million as of September 30, 2025, a significant deterioration in the credit quality of its members or borrowers could lead to increased loan losses. Mortgage loans held for portfolio increased by $2,052 million to $13,948 million.

Industry Context

Federal Home Loan Banks (FHLBs) operate as a government-sponsored enterprise, providing liquidity and funding to member financial institutions across the United States. The industry is characterized by a cooperative structure, with members holding stock in their respective FHLB. Key industry trends include managing interest rate risk, responding to evolving regulatory landscapes, and supporting housing finance and community development initiatives.

Regulatory Implications

The Federal Housing Finance Agency (FHFA) is the primary regulator for FHLBs, setting capital requirements and overseeing operations. Changes in FHFA's policies, such as adjustments to capital adequacy ratios or permissible activities, can significantly impact the Bank's financial flexibility and strategic direction. Compliance with these regulations is paramount.

What Investors Should Do

1. Monitor Net Interest Income Trends
2. Analyze Asset Growth Drivers
3. Evaluate Capital Adequacy
4. Assess Interest Rate Sensitivity

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Reported net income of $259 million for Q3 2025, an increase from $204 million in Q3 2024. Total assets grew to $189,291 million.
• 2025-09-30: Nine-Month Financial Reporting — Reported net income of $658 million for the nine months ended September 30, 2025, a decrease from $708 million in the prior year. Net interest income for the period was $872 million, down from $995 million.
• 2024-12-31: Prior Year End Financials — Total assets were $165,253 million and total capital was $9,451 million, providing a baseline for current year growth.

Glossary

Advances

Loans made by the FHLB to its member institutions, typically secured by collateral, to provide liquidity and support lending activities. (A primary asset for FHLB Des Moines, representing $109,981 million as of September 30, 2025, and a key driver of interest income.)

Consolidated Obligations

Debt securities issued by the FHLB system to fund its operations and lending activities. These are the primary source of funding. (Represents the largest liability for FHLB Des Moines, totaling $176,354 million as of September 30, 2025, and a significant component of interest expense.)

Capital Stock - Class B putable

Represents ownership in the FHLB by its member institutions. Class B stock is mandatorily redeemable upon termination of membership and is subject to certain put options. (A core component of the Bank's capital structure, totaling $6,474 million in issued and outstanding shares as of September 30, 2025.)

Available-for-sale securities

Investments in debt or equity securities that are not classified as held-to-maturity or trading. They are reported at fair value, with unrealized gains and losses included in accumulated other comprehensive income. (A significant investment category for the Bank, with an amortized cost of $27,542 million as of September 30, 2025, contributing to interest income and fair value adjustments.)

Mortgage loans held for portfolio

Residential mortgage loans originated or purchased by the Bank and intended to be held until maturity or for an extended period, rather than for sale in the secondary market. (Represents a growing asset for the Bank, increasing to $13,948 million as of September 30, 2025, supporting housing finance.)

Accumulated other comprehensive income (loss)

A component of equity that includes unrealized gains and losses on available-for-sale securities, foreign currency translation adjustments, and other items not recognized in net income. (Shows a positive balance of $36 million as of September 30, 2025, up from a loss of $29 million at year-end 2024, reflecting changes in the fair value of investments.)

Year-Over-Year Comparison

Compared to the prior year, Federal Home Loan Bank of Des Moines experienced a notable increase in net income for the third quarter of 2025 ($259 million vs. $204 million), indicating improved short-term profitability. However, for the nine-month period, net income declined to $658 million from $708 million, and net interest income also saw a decrease from $995 million to $872 million, suggesting pressure on core earnings over a longer horizon. Total assets have grown substantially by over $24 billion since December 31, 2024, primarily funded by an increase in consolidated obligations, while total capital has strengthened by approximately $790 million.

Key Financial Figures

• $100 — ber 31, 2025 Class B Stock, par value $100 60,775,601 Table of Contents Part I
• $1 m — or an investment category are less than $1 million, the losses are not reported. S

Filing Documents

• fhlbdm-20250930.htm (10-Q) — 3180KB
• q325exhibit311ceo302.htm (EX-31.1) — 17KB
• q325exhibit312cfo302.htm (EX-31.2) — 17KB
• q325exhibit321ceo906.htm (EX-32.1) — 6KB
• q325exhibit322cfo906.htm (EX-32.2) — 6KB
• 0001628280-25-050473.txt ( ) — 14515KB
• fhlbdm-20250930.xsd (EX-101.SCH) — 64KB
• fhlbdm-20250930_cal.xml (EX-101.CAL) — 75KB
• fhlbdm-20250930_def.xml (EX-101.DEF) — 552KB
• fhlbdm-20250930_lab.xml (EX-101.LAB) — 822KB
• fhlbdm-20250930_pre.xml (EX-101.PRE) — 676KB
• fhlbdm-20250930_htm.xml (XML) — 3195KB

- 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 37 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 65 Item 4.

Controls and Procedures

Controls and Procedures 66

- Other Information

Part II - Other Information Item 1.

Legal Proceedings

Legal Proceedings 66 Item 1A.

Risk Factors

Risk Factors 66 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 66 Item 3. Defaults Upon Senior Securities 66 Item 4. Mine Safety Disclosures 66 Item 5. Other Information 66 Item 6. Exhibits 67 Glossary of Terms 68

Signatures

Signatures 69 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) September 30, 2025 December 31, 2024 ASSETS Cash and due from banks $ 73 $ 41 Interest-bearing deposits (Note 3) 4,391 4,096 Securities purchased under agreements to resell (Note 3) 16,100 11,950 Federal funds sold (Note 3) 8,790 5,175 Investment securities (Note 3) Trading securities (includes $ 1,442 and $ 533 pledged as collateral that may be repledged) 6,805 4,720 Available-for-sale securities (amortized cost of $ 27,542 and $ 25,358 ) 27,580 25,331 Held-to-maturity securities (fair value of $ 697 and $ 757 ) 694 760 Total investment securities 35,079 30,811 Advances (Note 4) 109,981 99,951 Mortgage loans held for portfolio, net of allowance for credit losses of $ 5 and $ 5 (Note 5) 13,948 11,896 Loans to other FHLBanks 300 — Accrued interest receivable 490 400 Derivative assets, net (Note 6) 1 804 Other assets, net 138 129 TOTAL ASSETS $ 189,291 $ 165,253 LIABILITIES Deposits Interest-bearing $ 1,177 $ 1,195 Non-interest-bearing 142 119 Total deposits 1,319 1,314 Consolidated obligations (Note 7) Discount notes (includes $ 36,090 and $ 52,349 at fair value held under fair value option) 68,220 64,680 Bonds 108,134 88,571 Total consolidated obligations 176,354 153,251 Mandatorily redeemable capital stock (Note 8) 31 9 Accrued interest payable 816 717 Affordable Housing Program payable 286 262 Derivative liabilities, net (Note 6) 41 6 Other liabilities 203 243 TOTAL LIABILITIES 179,050 155,802 Commitments and contingencies (Note 10) CAPITAL (Note 8) Capital stock - Class B putable ($ 100 par value); 64,734,089 and 59,886,959 issued and outstanding shares 6,474 5,989 Retained earnings Unrestricted 2,521 2,413 Restricted 1,210 1,078 Total retained earnings 3,731 3,491 Accumulated other comprehensive income (loss) 36 ( 29 ) TOTAL CAPITAL 10,241 9,4

View Full Filing

View this 10-Q filing on SEC EDGAR