President's Report
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September 24, 2003 |
Copy of September 24th Letter Sent to Member Lenders
Dear Stockholder:
In my letter of September 22, I reported that four of the uninsured bonds held by the Federal Home Loan Bank of New York collateralized by manufactured housing receivables had been downgraded from their original AAA ratings. After a review of the manufactured housing portfolio, Bank management determined that all of the uninsured bonds demonstrated deterioration in credit quality. To ensure that there would be no further deterioration, the Bank has now sold this portfolio and has no uninsured exposure to the manufactured housing sector.
The face amount of the securities sold was $1.033 billion. The loss on the sale was approximately $183 million. After taking this sale into consideration, the Bank expects its September 30, 2003, capital to assets ratio will be 4.68%, well above its minimum capital to assets ratio of 4.0%. The Bank also expects its retained earnings will continue to be positive at September 30, 2003.
As a consequence, the Board approved management's recommendation not to pay a dividend to stockholders in October 2003. In addition, the Board approved management’s recommendation to delay the implementation of the Capital Plan, which had been scheduled for October 1, 2003. The new implementation date has not yet been determined.
If you have any questions, please contact Jim Gilmore, Senior Vice President, Banking Services at (212) 441-6812 or me at (212) 441-6801.
Sincerely,
Alfred A. DelliBovi
President & CEO