Bulletin No.: 2008-02
April 7, 2008

TO: SHAREHOLDERS

SUBJECT: Termination of Merger Discussions with the Federal Home Loan Bank of Chicago

Today we issued a press release announcing the termination of our merger discussions with the Federal Home Loan Bank of Chicago.  After many months of extensive due diligence and analysis of the feasibility and potential benefits of combining the banks’ business operations, the Dallas and Chicago Banks will not move forward with a merger transaction. 

There is a strong strategic fit between both banks’ memberships.  However, we have been unable to reach a definitive agreement with the Chicago Bank regarding the terms of a merger that would allow us to realize the desired benefits of a transaction for our members.  In light of the potential benefits that a transaction could have created for members of the two organizations, we are disappointed we could not reach a final agreement.

The Dallas Bank will continue to explore opportunities that are designed to provide additional value for our members and help you meet the affordable housing and economic development needs of your communities.  In the meantime, we will continue to work to deliver the value you have come to expect from your membership in the Bank.

The press release we issued today is available on our website at fhlb.com. If you have any questions or comments about this announcement, please call Corporate Communications at 214.441.8459 or your Member Sales Officer at 800.442.9841. 

Sincerely,

Terry Smith
President and Chief Executive Officer

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