Yearend financial reports by several Federal Home Loan Banks (FHLBs) showed these "other" housing GSEs are returning to profitability, while experiencing a lower level of losses on their holdings of private-label MBS.

The Boston FHLB recently reported an 80% annual decline in credit losses on its $3 billion private-label MBS portfolio.

PLS credit losses fell to $84.8 million in 2010 compared to $441 million the prior year. The Boston bank posted net earnings of $106 million, compared with a $187 million loss in 2009. Other FHLBs also reported declining losses on private-label MBS.

The Seattle FHLB said credit losses on its $4.5 billion PLS portfolio improved to $106 million in 2010, down from a $311 million the prior year.In 2010, the Seattle bank earned $20.5 million, compared to a loss of $161 million in 2009.

The Pittsburgh FHLB earned $8.3 million for all of 2010, compared to a $37.4 million loss the year earlier.

Credit losses on Pittsburgh's $4.9 billion PLS portfolio totaled $158.4 million in 2010, compared to $228.5 million the prior year. In the fourth quarter, credit losses totaled only $13 million.

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