FEDERAL HOME LOAN BANK OF BOSTON ANNOUNCES 2024 THIRD QUARTER RESULTS, DECLARES DIVIDEND
BOSTON, Oct. 25, 2024 /PRNewswire/ -- The Federal Home Loan Bank of Boston announced its preliminary, unaudited third quarter results for 2024, reporting net income of $60.4 million for the quarter. The Bank expects to file its quarterly report on Form 10-Q for the quarter ending September 30, 2024, with the U.S. Securities and Exchange Commission next month.
The Bank's board of directors has declared a dividend equal to an annual yield of 8.36%, the daily average of the Secured Overnight Financing Rate for the third quarter of 2024 plus 300 basis points. The dividend, based on average stock outstanding for the third quarter of 2024, will be paid on November 4, 2024. As always, dividends remain at the discretion of the board.
"FHLBank Boston's solid financial performance continues to support a broad range of liquidity and funding solutions for our members, along with existing programs and initiatives that improve housing affordability and increase community development throughout New England," said President and CEO Timothy J. Barrett. "We were pleased to recently launch the CDFI Advance focused on helping Community Development Financial Institutions and the Permanent Rate Buydown product designed to make homeownership more attainable for lower-income households through interest-rate reductions of up to 2 percentage points."
Third Quarter 2024 Operating Highlights
The Bank's overall results of operations are influenced by the economy, interest rates and members' demand for advances. During the third quarter of 2024, the Federal Open Market Committee (FOMC) lowered the target range for the federal funds rate by 50 basis points, to between 475 and 500 basis points. During the quarter, the yield curve remained inverted as intermediate- and long-term interest rates decreased substantially reflecting a weaker economic outlook.
The Bank recently launched the Permanent Rate Buydown product for mortgage loans purchased from participating financial institutions that is designed to make homeownership more attainable for lower income households. The product enables our bank and credit union members that utilize the Mortgage Partnership Finance® (MPF®) Program to reduce interest rates paid by income-eligible borrowers by up to 2 percentage points.
Net income for the three months ended September 30, 2024, was $60.4 million, compared with net income of $70.1 million for the same period of 2023, primarily the result of a decrease in net interest income after reduction of credit losses of $14.3 million, offset by an increase in other income of $3.4 million. These results led to a $6.7 million statutory contribution to the Bank's Affordable Housing Program for the quarter. In addition, the Bank made a voluntary contribution of $507,000 to the Affordable Housing Program and a $4.6 million contribution to our discretionary housing and community investment programs(5) for the quarter ended September 30, 2024.
Net interest income after reduction of credit losses for the three months ended September 30, 2024, was $89.8 million, compared with $104.1 million for the same period in 2023. The $14.3 million decrease in net interest income after provision for credit losses was primarily driven by a $13.5 million increase in mortgage-backed security net amortization, and a $9.4 million unfavorable variance in net unrealized gains and losses on fair value hedge ineffectiveness, both attributable to a decrease in intermediate- and long-term interest rates during the quarter ended September 30, 2024, compared to an increase in intermediate- and long-term interest rates during the same period in 2023. The decrease in net interest income after reduction of credit losses was partially offset by increases of $3.4 billion, $2.5 billion, and $572.9 million in our average advances, mortgage-backed securities, and mortgage loan portfolios, respectively.
Net interest spread was 0.19% for the three months ended September 30, 2024, a decrease of eight basis points from the same period in 2023, and net interest margin was 0.52%, a decrease of 13 basis points from the three months ended September 30, 2023. The decrease in net interest spread and margin was primarily attributable to the substantial decrease in intermediate- and long-term interest rates.
September 30, 2024 Balance-Sheet Highlights
Total assets increased $5.3 billion, or 7.8%, to $72.4 billion at September 30, 2024, up from $67.1 billion at year-end 2023. Total investments were $26.1 billion at September 30, 2024, an increase of $5.0 billion from $21.2 billion at the prior year end, driven primarily by growth in short-term investments and mortgage-backed securities. Mortgage loans totaled $3.5 billion at September 30, 2024, an increase of $484.2 million from year-end 2023 as mortgage sales to the Bank increased. Advances totaled $42.0 billion at September 30, 2024, a modest increase of $48.2 million from year-end 2023.
Total capital at September 30, 2024, was $3.8 billion, an increase of $268.7 million from $3.5 billion at year-end 2023. During 2024, capital stock increased by $119.0 million, primarily attributable to the increase in advances. Total retained earnings grew to $1.9 billion during 2024, an increase of $82.8 million, or 4.6%, from December 31, 2023. Of this amount, restricted retained earnings(3) totaled $492.8 million at September 30, 2024. Accumulated other comprehensive loss totaled $227.7 million at September 30, 2024, an improvement of $66.9 million from accumulated other comprehensive loss as of December 31, 2023.
The Bank was in compliance with all regulatory capital ratios at September 30, 2024, and in the most recent information available was classified "adequately capitalized" by its regulator, the Federal Housing Finance Agency, based on the Bank's financial information at June 30, 2024.(1)
About the Bank
The Federal Home Loan Bank of Boston is a cooperatively owned wholesale bank for housing finance in the six New England states. Its mission is to provide highly reliable wholesale funding and liquidity to its member financial institutions in New England. The Bank also develops and delivers competitively priced financial products, services, and expertise that support housing finance, community development, and economic growth, including programs targeted to lower-income households.
Contact:
Adam Coldwell
617-292-9774
"Mortgage Partnership Finance," and "MPF," are registered trademarks of the Federal Home Loan Bank of Chicago.
Federal Home Loan Bank of Boston
Balance Sheet Highlights
(Dollars in thousands)
(Unaudited)
9/30/2024
6/30/2024
12/31/2023
ASSETS
Cash and due from banks
$ 50,242
$ 50,096
$ 53,412
Advances
42,006,806
42,294,369
41,958,583
Investments (2)
26,137,824
22,436,579
21,167,632
Mortgage loans held for portfolio, net
3,543,560
3,345,541
3,059,331
Other assets
658,409
642,793
903,316
