The combined earnings of the 12 Federal Home Loan Banks (FHLBs) totaled $358 million in the first quarter, up 10% from a year ago, the FHLB Office of Finance reported Friday morning.But bad investments in private-label MBS continue to be a drag on earnings at several banks and it pushed the Seattle bank into the loss column again.

Low demand for advances (the main money maker for the FHLBs) and low interest rates also hurt earnings.  The first quarter report shows advances totaled $445.1 billion as of March 31, down 7% from the first quarter of 2010.  Interest income on advances was down 25% to $898 million.

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