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The Service reasoned that although the distribution was made in FHLB stock, at all times any member had a right to request the redemption of all or part of its stock in the FHLB (subject to Federal minimum requirements). The decrease in net interest income was predominantly due to an increase in deposit interest expense, offset in part by an increase in interest income and a decrease in FHLB (Federal Home Loan Bank) advance interest expense. The prepayment of the FHLB advances resulted in before-tax penalties of approximately $8. |
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