Federal Home Loan Bank of Indianapolis Announces Third Quarter 2024 Dividends, Reports Earnings
INDIANAPOLIS, Oct. 29, 2024 (GLOBE NEWSWIRE) -- Today the Board of Directors of the Federal Home Loan Bank of Indianapolis ("FHLBank Indianapolis" or "Bank") declared its third quarter 2024 dividends on Class B-2 activity-based capital stock and Class B-1 non-activity-based stock at annualized rates of 9.50% and 4.50%, respectively. The higher dividend rate on activity-based stock reflects the Board's discretion under the Bank's capital plan to reward members that use FHLBank Indianapolis in support of their liquidity needs.
The dividends will be paid in cash on October 30, 2024.
Earnings Highlights
Net income, for the third quarter of 2024, was $91 million, a net increase of $214,000 compared to the corresponding quarter in the prior year. The increase was primarily due to net changes in gains (losses) on investments, substantially offset by an increase in voluntary allocations to affordable housing, small business and community investment programs.
Net income, for the nine months ended September 30, 2024, was $275 million, a net increase of $1 million compared to the corresponding period in the prior year. The increase was primarily due to higher earnings on the portion of the Bank's assets funded by its capital.1 However, such increase was substantially offset by net gains on the extinguishment of consolidated obligations in the corresponding period that did not occur in the current period and an increase in voluntary allocations to affordable housing, small business and community investment programs.
__________________1 FHLBank Indianapolis earns interest income on advances to and mortgage loans purchased from its Michigan and Indiana member financial institutions, as well as on long- and short-term investments. Net interest income is primarily determined by the size of the Bank's balance sheet and the spread between the interest earned on its assets and the interest cost of funding with consolidated obligations. Because of the Bank's inherent relatively low interest-rate spread, it has historically derived a substantial portion of its net interest income from deploying its interest-free capital in floating-rate assets.
Affordable Housing Program Allocation
The Bank's Affordable Housing Program ("AHP") provides grant funding to support housing for low- and moderate-income families in communities served by its Michigan and Indiana members. For the nine months ended September 30, 2024, AHP assessments2 totaled $32 million. Full-year 2024 required allocations will be available to the Bank's members in 2025 to help address their communities' affordable housing needs, including construction, rehabilitation, accessibility improvements and homebuyer down-payment assistance.
In addition, as part of the Bank's commitment to further support its AHP and additional affordable housing, small business and community investment programs, the Bank voluntarily allocated additional funding in 2024 totaling $23 million, based on 5% of its net earnings for 2023. During the third quarter of 2024, the Bank also committed additional voluntary funding of $10 million, raising the total voluntary allocation for 2024 to $33 million, of which $17 million has been recognized in the nine-month period and is reported in other expenses. The timing of the recognition of such allocations in other expenses can vary due to the application of the related accounting requirements.
As a result, the Bank's combined required and voluntary allocation recognized in the nine-month period totaled $49 million, an increase of $11 million, or 30%, compared to the corresponding period in the prior year.
Condensed Statements of Income
The following table presents unaudited condensed statements of income ($ amounts in millions):
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Interest income (a)
$
1,090
$
974
$
3,140
$
2,743
Interest expense (a)
960
846
2,756
2,388
Provision for credit losses
—
—
—
—
Net interest income after provision for credit losses
130
128
384
355
Other income (b)
9
—
26
39
Other expenses (c)
37
27
103
89
AHP assessments
11
