December 24, 2004

The Federal Home Loan Bank of Seattle (Seattle Bank) announced an earned dividend on Class B(2) stock of 1.104 percent for the third quarter of 2004. The Class B(2) dividend is calculated at a rate which is the lesser of: (a) the Class B(1) dividend declared for the same quarter or (b) 73.47 percent of the Seattle Bank’s funding cost, which is approximately 3-month LIBOR minus 25 basis points.

The Seattle Bank announced an earned dividend rate on Class B(1) stock of 3.50 percent in third quarter 2004. Third quarter dividends are calculated based on capital stock outstanding as of September 30, 2004. For stock purchased or redeemed during the quarter, the dividend is computed based on the actual number of days that the stock was owned during the third quarter.

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.