June 25, 2004

The Federal Home Loan Bank of Seattle’s Board of Directors has declared a Class B(1) stock dividend at the annualized rate of 4.00 percent for the second quarter of 2004.

The Seattle Bank also paid a 4.00 percent annualized dividend in the first quarter of 2004, which was the third highest among the 12 Federal Home Loan Banks.

The bank’s dividend rate is based on anticipated second-quarter earnings. Dividends will be paid on capital stock outstanding between March 31 and June 30, 2004. For stock purchased or redeemed during the quarter, the dividend will be computed based on the actual number of days that the stock was owned during the second quarter. The dividend will be paid in the form of capital stock, with fractional shares paid in cash and credited to shareholders’ demand deposit accounts.

The Seattle Bank will release its second-quarter financial statements in August 2004.

While the dividend remains strong relative to other market rate investments, it does reflect the volatility in our earnings during the first two months of the quarter. Our core earnings remain under pressure due to the ongoing impact of the low interest rate environment. This has resulted in faster recognition of premium expenses on mortgage loans and securities, as well as generally lower yields on new assets.

If this trend continues throughout 2004, the Seattle Bank’s paid dividends for subsequent quarters could be lower than those paid for the second quarter.

If you have questions regarding this information, please contact Kelli Bono, executive vice president/chief financial officer, at 206.340.8696.

This Member News contains forward-looking statements regarding events that may impact the bank's future financial performance. Forward-looking statements are subject to known and unknown risks and uncertainties. Actual performance may differ materially from projections because of many factors. Such factors may include, but are not limited to factors that affect the Seattle Bank’s net income, including without limitation demand for advances, business and capital plan adjustments, changes in the bank's management and Board of Directors, regulatory actions or approvals, competitive pressure from other Federal Home Loan Banks and alternative funding sources, accounting adjustments or requirements, interest rate volatility, the bank's ability to maintain adequate capital levels, changes in projected business volumes, our ability to appropriately manage our cost of funds, changes in our membership profile or the withdrawal of one or more large members, the cost-effectiveness of our funding, hedging, and asset-liability management activities, shifts in demand for our products and consolidated obligations, and general economic conditions. Additional factors are discussed in the Seattle Bank's annual report, available at www.fhlbsea.com . The Seattle Bank does not undertake to update any forward-looking statements made in this announcement.