President's Report
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January 15, 2005 |
Dear Stockholder:
I am pleased to report that the Board of Directors today approved management's recommendation to declare a cash dividend from fourth quarter 2003 earnings, which represents an annualized rate of 1.45%. The dividend will be distributed to member financial institutions on January 30, 2004.
This is the first dividend declared by the Bank under its nine-point "Statement of Principles to Guide Development of the Bank's Retained Earnings Policy," which was adopted by the Board of Directors in December 2003.
With the Principles in place, the parameters for retaining earnings and paying dividends are clear. Our goal is to balance the growth rate of retained earnings and the dividend rate so that members' paid-in capital remains well protected while continuing to earn a reasonable return. Our intention is to accelerate the growth of retained earnings by retaining a greater portion of earnings than we have in the past.
As mentioned in the December President’s Report, if the interest rate environment remains essentially unchanged, we anticipate paying a dividend to stockholders in 2004 that is below 2.0%. At December 31, 2003, the Home Loan Bank had $126 million in retained earnings.
The Board of Directors and the management of the Home Loan Bank are committed to minimizing our costs and risks, maintaining a high-quality investment portfolio, and continuing our vital mission: to advance housing opportunities and local community development by maximizing the capacity of our community-based member lenders to serve their markets.
We will continue to keep you informed of our progress.
Sincerely,
Alfred A. DelliBovi
President & CEO