Segment Information The FHLB has identified two primary operating segments based on its method of internal reporting: Traditional Member Finance and the MPP. These segments reflect the FHLB's two primary Mission Asset Activities and the manner in which they are managed from the perspective of development, resource allocation, product delivery, pricing, credit risk and operational administration. The segments identify the principal ways the FHLB provides services to member stockholders. The FHLB, as an interest rate spread manager, considers a segment's net interest income, net interest rate spread and, ultimately, net income as the key factors in allocating resources. Resource allocation decisions are made by considering these profitability measures in the context of the historical, current and expected risk profile of each segment and the entire balance sheet, as well as current incremental profitability measures relative to the incremental market risk profile. Overall financial performance and risk management are dynamically managed primarily at the level of, and within the context of, the entire balance sheet rather than at the level of individual business segments or product lines. Also, the FHLB hedges specific asset purchases and specific subportfolios in the context of the entire mortgage asset portfolio and the entire balance sheet. Under this holistic approach, the market risk/return profile of each business segment does not correspond, in general, to the performance that each segment would generate if it were completely managed on a separate basis, and it is not possible to accurately determine what the performance would be if the two business segments were managed on a stand-alone basis. Further, because financial and risk management is a dynamic process, the performance of a segment over a single identified period may not reflect the long-term expected or actual future trends for the segment. The Traditional Member Finance segment includes products such as Advances and investments and the borrowing costs related to those assets. The FHLB assigns its investments to this segment primarily because they historically have been used to provide liquidity for Advances and to support the level and volatility of earnings from Advances. All interest rate swaps and a portion of swaptions, including their market value adjustments, are allocated to the Traditional Member Finance segment. The FHLB executed all of its interest rate swaps in its management of market risk for the Traditional Member Finance segment. The FHLB enters into swaptions to minimize the prepayment risk in its overall mortgage asset portfolio. Income from the MPP is derived primarily from the difference, or spread, between the yield on mortgage loans and the borrowing cost of Consolidated Obligations outstanding allocated to this segment at the time debt is issued. MPP income also includes the gains (losses) on derivatives associated with the MPP segment, comprising all mortgage delivery commitments and forward rate agreements and a portion of swaptions. Both segments also earn income from investment of interest-free capital. Capital is allocated proportionate to each segment's average assets based on the total balance sheet's average capital-to-assets ratio. Expenses are allocated based on cost accounting techniques that include direct usage, time allocations and square footage of space used. AHP assessments are calculated using the current assessment rates based on the income before assessments for each segment. The following tables set forth the FHLB's financial performance by operating segment for the years ended December 31. Table 18.1 - Financial Performance by Operating Segment (in thousands) For the Years Ended December 31, Traditional Member Finance MPP Total 2018 Net interest income after provision for credit losses $ 389,615 $ 108,957 $ 498,572 Non-interest income (loss) (32,415 ) (4,403 ) (36,818 ) Non-interest expense 73,441 11,278 84,719 Income before assessments 283,759 93,276 377,035 Affordable Housing Program assessments 28,556 9,328 37,884 Net income $ 255,203 $ 83,948 $ 339,151 2017 Net interest income $ 334,383 $ 94,760 $ 429,143 Provision for credit losses  500 500 Net interest income after provision for credit losses 334,383 94,260 428,643 Non-interest income (loss) 2,979 (4,216 ) (1,237 ) Non-interest expense 67,571 11,147 78,718 Income before assessments 269,791 78,897 348,688 Affordable Housing Program assessments 27,230 7,890 35,120 Net income $ 242,561 $ 71,007 $ 313,568 2016 Net interest income after provision for credit losses $ 287,721 $ 75,483 $ 363,204 Non-interest income (loss) 40,423 5,808 46,231 Non-interest expense 99,758 11,305 111,063 Income before assessments 228,386 69,986 298,372 Affordable Housing Program assessments 23,190 6,999 30,189 Net income $ 205,196 $ 62,987 $ 268,183 Table 18.2 - Asset Balances by Operating Segment (in thousands) Assets Traditional Member Finance MPP Total December 31, 2018 $ 86,042,150 $ 13,160,423 $ 99,202,573 December 31, 2017 95,525,754 11,369,460 106,895,214