Liquidity & Balance Sheet
FHLB Advances
Federal Home Loan Bank (FHLB) Advances are collateralized loans from one of the 11 regional FHLBs to member banks. FHLB advances are the largest single source of wholesale funding for US community and regional banks.
How is FHLB Advances calculated?
FHLB advances are issued against pledged collateral (primarily residential mortgages, commercial real estate, and securities) at terms from overnight to 30 years. The bank's borrowing capacity is governed by the value of pledged collateral, not the FHLB's appetite.
Why does FHLB Advances matter?
FHLB system advances peaked above $1T in early 2023 as deposits fled to money market funds. The 'lender of last resort before the Fed discount window' framing has become standard. FHLB advances are the single largest wholesale funding source for community and regional banks.
How do you interpret FHLB Advances?
FHLB advances under 5% of assets are routine. 5-15% indicates moderate wholesale reliance. Above 15% signals heavy dependence on collateralized borrowing. The concern is collateral sensitivity. An asset-value shock that shrinks pledged collateral can force advance paydown.
What do FHLB Advances levels indicate?
| Range | Label | Interpretation |
|---|---|---|
| < 5% of assets | Light | Modest wholesale funding share. |
| 5–15% | Moderate | Typical for many community banks. |
| 15–25% | Heavy | Significant collateralized-funding reliance. |
| > 25% | Concentrated | Vulnerable to collateral revaluation. |
Worked example
Frequently asked
Why did FHLB advances surge in 2023?
Because deposits ran off to money market funds when short-term rates rose. Banks plugged the funding gap with FHLB advances, the cheapest collateralized wholesale source. Total system advances jumped roughly $400B in 6 months before stabilizing.
Is FHLB funding stable?
Under NSFR, FHLB advances are weighted by remaining maturity. Long-term advances (>1 year) count more favorably than overnight. The collateral pledge is what makes the funding cheaper and faster than alternatives.
Did SVB use FHLB advances?
Yes. Silicon Valley Bank borrowed approximately $30B from the San Francisco FHLB shortly before failure. The advances did not save the bank but did absorb collateral that would otherwise have been available to other creditors in resolution.
Sources
- FFIEC Call Report Schedule RC-M
- Federal Housing Finance Agency FHLB system reports
Explore 4,196 FDIC-insured banks
Browse every FDIC-insured institution by state, asset tier, or name, with quarterly FFIEC filing data behind each profile.