DES MOINES, Iowa, Aug. 29, 2005 (PRIMEZONE) -- The Federal Home Loan Bank of Des Moines announced today that it will not be able to comply with the Federal Housing Finance Board (Finance Board) regulation that requires the Federal Home Loan Banks to have an effective registration statement filed with the Securities and Exchange Commission (SEC) by August 29, 2005. As previously announced, the Bank is in the process of resolving certain accounting matters in connection with the SEC registration. These matters include certain accounting practices related to the Statement of Financial Accounting Standard No. 133 Accounting for Derivative Instruments and Hedging Activities (SFAS 133).
In connection with the Bank's process of registering with the SEC, the SEC will be reviewing whether the Bank meets all of the necessary criteria to qualify for hedge accounting under FAS 133 with respect to certain transactions. "We regret we will not make the deadline of August 29, 2005, but we will continue to work diligently with the SEC to resolve these issues and to complete the registration process," stated Patrick J. Conway, President and CEO of the Des Moines Bank. "Resolving these issues should not affect the core business of the Bank nor our ability to serve our members."
The Bank cannot predict whether the review of these matters will have a material impact on the Bank or on our financial statements, although if we are required to make any adjustments or corrections for these transactions, it is expected that prior and future income statements would reflect significantly increased earnings volatility. In addition, the Bank cannot determine at this time when the issues with the SEC will be resolved, or when the previously announced review by our Internal Review Committee and Board will be completed. The effectiveness of our registration with the SEC will be delayed until the completion of these matters.
As has been reported, the Finance Board issued an advisory bulletin on August 23, 2005, that stated that any Federal Home Loan Bank that does not meet the August 29, 2005, deadline for having an effective registration statement filed with the SEC, may only declare a dividend upon consultation with and approval by the Finance Board's Office of Supervision. As this is a new requirement, we cannot predict whether or when the Finance Board will approve any dividends we determine are appropriate and we are uncertain as to whether or not this process will affect the timing of our dividend declaration and payment.
Statements contained in this announcement, including statements describing the objectives, projections, estimates or future predictions in our operations, may be forward-looking statements. These statements may be identified by the use of forward-looking terminology, such as anticipates, believes, could, estimate, may, should and will or their negatives or other variations on these terms. By their nature forward-looking statements involve risk or uncertainty and actual results could differ materially from those expressed or implied or could affect the extent to which a particular objective, projection, estimate or prediction is realized.
The Federal Home Loan Bank of Des Moines is a AAA-rated wholesale bank that provides low-cost short and long-term funding and community lending to more than 1,200 stockholder commercial banks, saving institutions, credit unions and insurance companies. The Bank is wholly owned by its members and receives no taxpayer funding. The Des Moines Bank serves Iowa, Minnesota, Missouri, North Dakota and South Dakota and is one of twelve regional Banks that make up the Federal Home Loan Bank System.