Pollock acknowledges Illinois community bankers' success

Northwestern Financial Review, Oct 15-Oct 31, 2003

Community bankers are very good underwriters. That's how Alex Pollock, president of the Federal Home Loan Bank of Chicago, complimented bankers attending the Community Bankers Association of Illinois' annual meeting in Springfield, Ill. "Local financial institutions have higher credit quality than any other mortgage lenders," Pollock said. Chicago Home Loan Bank members have one-tenth the delinquencies of the national average, he said. "That's how good you are."

Pollock used his opportunity in front of CBAI's membership to further promote the bank's Mortgage Partnership Finance Program, which was launched in 1997. With a history of low delinquencies, he said, why pay more to FannieMae and FreddieMac "to divest the credit of your customers?"

Pollock said the MPF program helps to make the Chicago bank the most profitable of the 12 Home Loan Banks. The bank has total advances outstanding of nearly $100 billion. The bank's net income as of June 2003 was $196 million and shareholder return averaged 6.5 percent. Pollack said that compares favorably with FreddieMac (-6.7 percent), FannieMae (-6.0 percent) and the S&P 500 (-4.1 percent).

Three-quarters of the bank's members have less than $500 million in assets. The number of CBAI members who also are members in the Chicago Home Loan Bank is 364 banks, up from 341 banks one year ago.

CBAI is supporting one of its former chairmen, Roger Lehmann of Harvard State Bank, Harvard, for the Federal Home Loan Bank of Chicago board election, which is being conducted this month. Only one seat is open and Lehmann volunteered to run. Should Lehmann be successful, he intends to "voice our concern as community bankers," he said. "It's important to community banks in Illinois."

Lehmann is being opposed in the board election by Bill Landefeld, Citizens Savings Bank, Normal.