FHLBI Q3 Net Income Dips, Assets and Capital Grow

TL;DR

**FHLBI's Q3 net income dropped, but strong asset and capital growth signal underlying stability for its member banks.**

AI Summary

The Federal Home Loan Bank of Indianapolis (FHLBI) reported a net income of $86.799 million for the three months ended September 30, 2025, a decrease from $90.980 million in the same period of 2024. For the nine months ended September 30, 2025, net income was $251.014 million, down from $274.740 million in 2024. Total assets increased to $86.791 billion as of September 30, 2025, from $84.535 billion at December 31, 2024. Net interest income saw a slight increase to $132.535 million for the three months ended September 30, 2025, up from $129.768 million in 2024, and to $386.129 million for the nine months, up from $384.061 million. Advances decreased to $39.058 billion from $39.833 billion, while mortgage loans held for portfolio increased significantly to $12.389 billion from $10.796 billion. Total consolidated obligations, net, rose to $80.198 billion from $78.085 billion. The bank's capital increased to $4.437 billion from $4.235 billion, driven by an increase in Class B capital stock and retained earnings.

Why It Matters

FHLBI's performance reflects broader trends in the housing and financial markets, impacting its member institutions, primarily banks and credit unions in Michigan and Indiana. The increase in mortgage loans held for portfolio by $1.593 billion suggests a strategic shift or increased demand for mortgage-backed liquidity among its members, potentially indicating a robust housing market or increased refinancing activity in its district. While net income declined, the growth in total assets and capital provides a stable foundation, reassuring investors and members of its financial resilience. Competitive pressures from other funding sources available to members remain a key factor in FHLBI's advance demand.

Risk Assessment

Risk Level: low — The FHLBI maintains a low risk profile, evidenced by a substantial increase in total capital to $4.437 billion as of September 30, 2025, from $4.235 billion at December 31, 2024. The provision for credit losses remained negligible at ($46) thousand for the three months and ($52) thousand for the nine months ended September 30, 2025, indicating high asset quality and minimal credit risk exposure.

Analyst Insight

Investors should view FHLBI's stable capital growth and minimal credit losses as a positive indicator of its financial health and ability to support its member institutions. While net income saw a slight decline, the increase in mortgage loans held for portfolio suggests a strategic adaptation to member needs. Monitor future filings for sustained capital growth and any shifts in interest income trends.

Financial Highlights

debt To Equity

18.07

revenue

$2,923,257,000

operating Margin

N/A

total Assets

$86,791,459,000

total Debt

$80,197,715,000

net Income

$251,014,000

eps

$9.42

gross Margin

N/A

cash Position

$80,302,000

revenue Growth

-6.91%

Revenue Breakdown

Key Numbers

• $86.799M — Net Income (Q3 2025) (Decreased from $90.980M in Q3 2024)
• $251.014M — Net Income (9 Months 2025) (Decreased from $274.740M in 9 Months 2024)
• $86.791B — Total Assets (Increased from $84.535B at Dec 31, 2024)
• $4.437B — Total Capital (Increased from $4.235B at Dec 31, 2024)
• $12.389B — Mortgage Loans Held for Portfolio (Increased from $10.796B at Dec 31, 2024)
• $39.058B — Advances (Decreased from $39.833B at Dec 31, 2024)
• $80.198B — Total Consolidated Obligations, Net (Increased from $78.085B at Dec 31, 2024)
• $132.535M — Net Interest Income (Q3 2025) (Increased from $129.768M in Q3 2024)
• 8.40% — Annualized Cash Dividends on Capital Stock (Q3 2025) (Increased from 8.17% in Q3 2024)
• 29,549,569 — Class B Stock Shares Outstanding (As of October 31, 2025)

Key Players & Entities

• Federal Home Loan Bank of Indianapolis (company) — registrant
• Federal Housing Finance Agency (regulator) — oversight body
• Office of Finance (company) — related entity
• Michigan (other) — district state
• Indiana (other) — district state
• $86.799 million (dollar_amount) — net income for Q3 2025
• $251.014 million (dollar_amount) — net income for nine months ended Sept 30, 2025
• $86.791 billion (dollar_amount) — total assets as of Sept 30, 2025
• $4.437 billion (dollar_amount) — total capital as of Sept 30, 2025
• $12.389 billion (dollar_amount) — mortgage loans held for portfolio as of Sept 30, 2025

FAQ

Risk Factors

• Interest Rate Risk [high — financial]: FHLBI is exposed to interest rate risk due to the maturity and repricing characteristics of its assets and liabilities. Changes in interest rates can affect net interest income and the fair value of its portfolio. For example, interest income from advances decreased by $76 million for the three months ended September 30, 2025, compared to the prior year.
• Market Value Fluctuations [medium — market]: The fair value of FHLBI's investment securities, particularly available-for-sale securities, can fluctuate with market conditions. As of September 30, 2025, FHLBI had $14.913 billion in available-for-sale securities with net unrealized losses of $24.101 million.
• Regulatory Compliance [medium — regulatory]: As a regulated entity, FHLBI must comply with various regulations, including capital requirements and oversight from the Federal Housing Finance Agency (FHFA). Non-compliance could lead to penalties or restrictions. The bank's capital ratio remains strong, but ongoing regulatory scrutiny is a constant factor.
• Credit Risk [medium — financial]: FHLBI faces credit risk from its lending activities, primarily through advances and mortgage loans. While no allowance for credit losses was deemed necessary for short-term investments as of September 30, 2025, the overall credit quality of its loan portfolio is a key consideration.
• Operational and Cybersecurity Risks [medium — operational]: Like all financial institutions, FHLBI is subject to operational risks, including disruptions to its systems and cybersecurity threats. The bank relies on robust IT infrastructure and security measures to mitigate these risks.

Industry Context

Federal Home Loan Banks (FHLBs) operate as a government-sponsored enterprise (GSE) providing liquidity, community lending, and other services to their member financial institutions. The industry is characterized by stable, albeit evolving, demand for funding from banks, credit unions, and insurance companies. Interest rate sensitivity and regulatory oversight are paramount concerns within this sector.

Regulatory Implications

FHLBI operates under the strict regulatory framework of the Federal Housing Finance Agency (FHFA), which sets capital requirements and oversees operations. Changes in FHFA regulations or interpretations can significantly impact FHLBI's business strategy, risk management, and profitability. Maintaining strong capital ratios, as evidenced by the increase in total capital to $4.437 billion, is crucial for compliance.

What Investors Should Do

1. Monitor Net Interest Income Trends
2. Analyze Growth in Mortgage Loans Held for Portfolio
3. Evaluate Capital Adequacy and Stock Performance
4. Assess Impact of Interest Rate Environment

Key Dates

• 2025-09-30: Quarterly Financial Reporting — FHLBI reported its financial results for the third quarter and the first nine months of 2025, showing a decrease in net income but an increase in total assets and capital.
• 2025-12-31: Year-End Financial Reporting (Implied) — This date serves as a comparison point for the current period's financial statements, indicating the bank's financial position at the end of the previous fiscal year.
• 2024-09-30: Prior Year Quarterly Reporting — Provides a year-over-year comparison for key performance indicators such as net income and net interest income.
• 2024-12-31: Previous Fiscal Year End — Marks the end of the prior fiscal year, used as a baseline for asset and liability growth in the current period.

Glossary

Advances

Loans made by FHLBI to its member institutions. (A primary source of interest income for FHLBI, and a key indicator of member demand for liquidity.)

Consolidated Obligations

Debt issued by FHLBI to fund its operations and lending activities. (Represents the majority of FHLBI's liabilities and is a significant component of its funding structure.)

Mortgage Loans Held for Portfolio

Mortgage loans acquired by FHLBI that are intended to be held until maturity or for an extended period. (Represents a growing asset class for FHLBI, contributing to interest income and potentially offering different risk/return profiles than advances.)

Available-for-Sale Securities (AFS)

Securities that are not classified as trading or held-to-maturity, and are reported at fair value with unrealized gains and losses included in other comprehensive income. (A significant portion of FHLBI's investment portfolio, subject to market value fluctuations.)

Capital Stock

Represents the ownership interest in FHLBI held by its member institutions. (Crucial for FHLBI's capital adequacy and regulatory compliance, with Class B stock being a significant component.)

Net Interest Income

The difference between interest income generated by assets and interest expense incurred on liabilities. (A key driver of FHLBI's profitability.)

Year-Over-Year Comparison

Compared to the prior year, FHLBI reported a decrease in net income for both the three and nine months ended September 30, 2025. Total assets have grown to $86.791 billion, and total capital has also increased to $4.437 billion. While net interest income showed a slight increase, driven by growth in mortgage loans held for portfolio, advances have decreased. Consolidated obligations have risen, indicating increased reliance on market funding.

Key Financial Figures

• $100 — ber 31, 2025 Class A Stock, par value $100 — Class B Stock, par value $100 29,549

Filing Documents

• fhlbi-20250930.htm (10-Q) — 2919KB
• ex311september302025.htm (EX-31.1) — 7KB
• ex312september302025.htm (EX-31.2) — 7KB
• ex313september302025.htm (EX-31.3) — 7KB
• ex32sec1350september302025.htm (EX-32) — 6KB
• 0001331754-25-000232.txt ( ) — 12734KB
• fhlbi-20250930.xsd (EX-101.SCH) — 63KB
• fhlbi-20250930_cal.xml (EX-101.CAL) — 144KB
• fhlbi-20250930_def.xml (EX-101.DEF) — 353KB
• fhlbi-20250930_lab.xml (EX-101.LAB) — 738KB
• fhlbi-20250930_pre.xml (EX-101.PRE) — 547KB
• fhlbi-20250930_htm.xml (XML) — 2688KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS (unaudited)

Item 1. FINANCIAL STATEMENTS (unaudited) 4 5 6 7 9

Notes to Financial Statements

Notes to Financial Statements: Note 1 - Summary of Significant Accounting Policies 11 Note 2 - Recently Adopted and Issued Accounting Guidance 11 Note 3 - Investments 11 Note 4 - Advances 16 Note 5 - Mortgage Loans Held for Portfolio 17 Note 6 - Derivatives and Hedging Activities 18 Note 7 - Consolidated Obligations 22 Note 8 - Affordable Housing Program 23 Note 9 - Capital 24 Note 10 - Accumulated Other Comprehensive Income 26 Note 11 - Estimated Fair Values 27 Note 12 - Commitments and Contingencies 31 Note 13 - Related Party and Other Transactions 32 Defined Terms 33

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Presentation 34 Executive Summary 34 Results of Operations and Changes in Financial Condition 37 Analysis of Financial Condition 47 Liquidity 53 Capital Resources 54 Critical Accounting Estimates 55 Recent Accounting and Regulatory Developments 55 Risk Management 56

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 60

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 60

CONTROLS AND PROCEDURES 61

Item 4. CONTROLS AND PROCEDURES 61

OTHER INFORMATION

PART II. OTHER INFORMATION

LEGAL PROCEEDINGS 62

Item 1. LEGAL PROCEEDINGS 62

RISK FACTORS 62

Item 1A. RISK FACTORS 62

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 62

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 62

DEFAULTS UPON SENIOR SECURITIES 62

Item 3. DEFAULTS UPON SENIOR SECURITIES 62

MINE SAFETY DISCLOSURES 62

Item 4. MINE SAFETY DISCLOSURES 62

OTHER INFORMATION 62

Item 5. OTHER INFORMATION 62

EXHIBITS 63

Item 6. EXHIBITS 63 As used in this Form 10-Q, unless the context otherwise requires, the terms "we," "us," "our," and "Bank" refer to the Federal Home Loan Bank of Indianapolis or its management. We use acronyms and terms throughout that are defined herein or in the Defined Terms in Part I Item 1. Special Note Regarding Forward-Looking Statements economic and market conditions, including the timing and volume of market activity, inflation or deflation, and changes in the financial condition of market participants; volatility of market prices, interest rates, and indices or the availability of suitable interest rate indices, or other factors, resulting from the effects of, and changes in, various monetary or fiscal policies and regulations, including those of the Federal Reserve, the Finance Agency and the Federal Deposit Insurance Corporation, or a decline in liquidity in the financial markets, that could affect the value of investments, or collateral we hold as security for the obligations of our members and counterparties; changes in demand for our advances and purchases of mortgage loans resulting from: changes in our members' deposit flows and credit demands; ch

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS Federal Home Loan Bank of Indianapolis (Unaudited, $ amounts in thousands, except par value) September 30, 2025 December 31, 2024 Assets : Cash and due from banks $ 80,302 $ 70,849 Interest-bearing deposits (Note 3) 1,321,911 856,882 Securities purchased under agreements to resell (Note 3) 6,900,000 7,500,000 Federal funds sold (Note 3) 4,086,000 3,395,000 Trading securities (Note 3) 1,099,243 1,087,930 Available-for-sale securities (amortized cost of $ 14,905,065 and $ 14,338,221 ) (Note 3) 14,912,926 14,349,889 Held-to-maturity securities (estimated fair values of $ 6,128,991 and $ 5,796,792 ) (Note 3) 6,169,866 5,839,377 Advances (Note 4) 39,057,635 39,832,992 Mortgage loans held for portfolio, net (Note 5) 12,389,466 10,795,516 Accrued interest receivable 229,514 207,387 Derivative assets, net (Note 6) 415,208 478,067 Other assets 129,388 120,702 Total assets $ 86,791,459 $ 84,534,591 Liabilities : Deposits $ 877,691 $ 913,112 Consolidated obligations (Note 7): Discount notes 28,097,135 25,182,336 Bonds 52,100,580 52,903,029 Total consolidated obligations, net 80,197,715 78,085,365 Accrued interest payable 325,245 360,905 Affordable Housing Program payable (Note 8) 98,804 92,520 Derivative liabilities, net (Note 6) 4,583 9,302 Mandatorily redeemable capital stock (Note 9) 282,363 363,004 Other liabilities 567,829 475,717 Total liabilities 82,354,230 80,299,925 Commitments and contingencies (Note 12) Capital (Note 9): Capital stock (putable at par value of $ 100 per share): Class B issued and outstanding shares: 26,650,915 and 25,553,939 2,665,092 2,555,394 Retained earnings: Unrestricted 1,262,552 1,217,750 Restricted 516,565 466,362 Total retained earnings 1,779,117 1,684,112 Total accumulated other comprehensive income (loss) (Note 10) ( 6,980 ) ( 4,840 ) Total capital 4,437,229 4,234,666 Total liabilities and capital $ 86,791,459 $ 84,534

Notes to Financial Statements

Notes to Financial Statements (Unaudited, $ amounts in thousands unless otherwise indicated) Note 1 - Summary of Significant Accounting Policies Unless the context otherwise requires, the terms "we," "us," "our" and "Bank" refer to the Federal Home Loan Bank of Indianapolis or its management. We use acronyms and terms throughout these Notes to Financial Statements that are defined in the Defined Terms . Basis of Presentation. The accompanying interim financial statements have been prepared in accordance with GAAP and SEC requirements for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. Certain disclosures that would have substantially duplicated the disclosures in the financial statements, and notes thereto, included in our 2024 Form 10-K have been omitted unless the information contained in those disclosures materially changed. Therefore, these interim financial statements should be read in conjunction with our audited financial statements, and notes thereto, included in our 2024 Form 10-K. The financial statements contain all adjustments that are, in the opinion of management, necessary for a fair statement of the Bank's financial position, results of operations and cash flows for the interim periods presented. All such adjustments were of a normal recurring nature. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full calendar year or any other interim period. Use of Estimates. When preparing financial statements in accordance with GAAP, we are required to make subjective assumptions and estimates that may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of income and expense. Although the reported amounts and disclosures reflect our best estimates, actual results could differ significantly from

Notes to Financial Statements , continued

Notes to Financial Statements , continued (Unaudited, $ amounts in thousands unless otherwise indicated) Allowance for Credit Losses. At September 30, 2025 and December 31, 2024, based on our evaluations, no allowance for credit losses on any of our short-term investments was deemed necessary. Investment Securities. Trading Securities. Major Security Types. The following table presents our trading securities by type of security. Security Type September 30, 2025 December 31, 2024 U.S. Treasury obligations $ 1,099,243 $ 1,087,930 Total trading securities at estimated fair value $ 1,099,243 $ 1,087,930 Net Gains (Losses) on Trading Securities. The following table presents net gains (losses) on trading securities, excluding any offsetting effect of gains (losses) on the associated derivatives. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net gains on trading securities held at period end $ 2,060 $ 24,704 $ 11,313 $ 22,867 Net gains on trading securities that matured/sold during the period — — — 469 Net gains on trading securities $ 2,060 $ 24,704 $ 11,313 $ 23,336 Available-for-Sale Securities. Major Security Types. The following table presents our AFS securities by type of security. September 30, 2025 Gross Gross Amortized Unrealized Unrealized Estimated Security Type Cost (1) Gains Losses Fair Value U.S. Treasury obligations $ 5,897,658 $ 3,811 $ ( 1,967 ) $ 5,899,502 GSE and TVA debentures 1,508,300 8,836 ( 40 ) 1,517,096 GSE multifamily MBS 7,499,107 19,315 ( 22,094 ) 7,496,328 Total AFS securities $ 14,905,065 $ 31,962 $ ( 24,101 ) $ 14,912,926 December 31, 2024 Gross Gross Amortized Unrealized Unrealized Estimated Security Type Cost (1) Gains Losses Fair Value U.S. Treasury obligations $ 5,691,550 $ 5,827 $ ( 2,172 ) $ 5,695,205 GSE and TVA debentures 1,568,805 13,976 ( 135 ) 1,582,646 GSE multifamily MBS 7,077,866 21,841 ( 27,669 ) 7,072,038 Total AFS securities $ 14,338,221 $

Notes to Financial Statements , continued

Notes to Financial Statements , continued (Unaudited, $ amounts in thousands unless otherwise indicated) Unrealized Loss Positions. The following table presents our impaired AFS securities (i.e., in an unrealized loss position), aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position. September 30, 2025 Less than 12 months 12 months or more Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Security Type Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury obligations $ 1,344,008 $ ( 939 ) $ 503,398 $ ( 1,028 ) $ 1,847,406 $ ( 1,967 ) GSE and TVA debentures 28,386 ( 40 ) — — 28,386 ( 40 ) GSE multifamily MBS 1,306,097 ( 4,468 ) 2,207,157 ( 17,626 ) 3,513,254 ( 22,094 ) Total impaired AFS securities $ 2,678,491 $ ( 5,447 ) $ 2,710,555 $ ( 18,654 ) $ 5,389,046 $ ( 24,101 ) December 31, 2024 Less than 12 months 12 months or more Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Security Type Fair Value Losses Fair Value Losses Fair Value Losses U.S. Treasury obligations $ 2,227,597 $ ( 2,172 ) $ — $ — $ 2,227,597 $ ( 2,172 ) GSE and TVA debentures 60,961 ( 135 ) — — 60,961 ( 135 ) GSE multifamily MBS 762,267 ( 4,621 ) 2,569,237 ( 23,048 ) 3,331,504 ( 27,669 ) Total impaired AFS securities $ 3,050,825 $ ( 6,928 ) $ 2,569,237 $ ( 23,048 ) $ 5,620,062 $ ( 29,976 ) Contractual Maturity. The amortized cost and estimated fair value of our non-MBS AFS securities are presented below by contractual maturity. MBS are not presented by contractual maturity because their actual maturities will likely differ from their contractual maturities as borrowers have the right to prepay their obligations with or without prepayment fees. September 30, 2025 December 31, 2024 Amortized Estimated Amortized Estimated Year of Contractual Maturity Cost Fair Value Cost Fair Value Non-MBS: Due

View Full Filing

View this 10-Q filing on SEC EDGAR