Strategies

The FHLBNY’s Collateral Lendable Value Methodology – a Look Behind the Curtain

Members are always trying to maximize their capacity at the FHLBNY either to borrow against or just to keep “powder dry.” Today, more than ever, members are taking a “deeper dive” into understanding how their lendable value is calculated. It is a five-pronged calculation that, when broken down in simple terms is fairly easy to understand...read more

Be Mindful, Stay Healthy: FHLBNY Members Show Improving Risk Profiles

Although formidable “headwinds” remain in our dynamic operating environment, we are encouraged by the improving financial metrics of many of our members...read more

Are You Ready for a Rise in Rates?

In a rising rate environment, the ARC with Cap helps preserve spread, but could re-price downward and remain lower costing should rates remain low. For liability sensitive members, an ARC with Cap could potentially mitigate Net Interest Income at Risk and also could benefit Economic Value of Equity at Risk, as the benefit of the embedded cap would have value in regulatory shock scenarios...read more

Looking to Fund Long-Term Assets? Consider an “Oldie but Goodie” — the Amortizing Advance

While earnings continue to improve, they are not where most members want them to be due to persistent margin pressures. However, in a rising rate environment, there may finally be an opportunity for members to re-price their assets, portfolio their loans, take their time re-pricing up on the deposit side, and use advances to fill their funding gap to enhance their net interest margin. In this regard, some members have taken another look at an “oldie but goodie” — the FHLBNY’s Amortizing Advance...read more

You Have The Power — Using the Callable Advance for Flexible Funding in Challenging Times

Needing a funding tool to help manage prepayment and interest rate risks as members’ liquidity and assets/liability needs change, the FHLBNY developed the Callable Advance. The Callable Advance gives members the option of calling (terminating) the advance on predetermined dates, prior to maturity, without incurring a prepayment fee, giving members the power to use this advance to better match fixed-rate and commercial loans held in portfolio. Learn more about how the Callable Advance can help your institution...read more

CLP Advances — FHLBNY’s Lowest Priced Path to Community Growth

Most of our member-lenders know the core of the FHLBNY’s mission is advancing housing opportunity and local community development. However, they may not know that our Community Lending Program (CLP) features the lowest priced source of FHLBNY funding to support home financing, housing, and commercial and economic development activities.  Read more on how the CLP Advances can help your institution’s community grow while enhancing net interest margins and competitive positions, and offering significant value in the ability to match-fund or pool-fund to the duration or maturity of your institutions assets...read more

Help Me, Help you...Help your Regulators — Determining Your Total Borrowing Capacity

Many of our member-lenders are in the process of updating and implementing new liquidity policies and/or have received requests from their regulators regarding their total borrowing capacity. The following article is designed to serve as a refresher about how your borrowing capacity at the FHLBNY is determined. This may also serve as a good tool to share with your regulators during your next examination, as it answers several questions we routinely receive from federal and state examiners...read more

Just What the Doctor Ordered — A Closer Look at Duration Based Pricing

In this article, Dr. Thomas J. Parliment gives members a closer look at how he uses duration based pricing to originate fixed-rate commercial real estate mortgages. Dr. Parliment, Chairman & CEO of Parliment Consulting Services, Inc., is an economist and has served as a commercial banker, investment banker, consultant, and educator to the financial services industry over the past four decades. He has also served as a director on several community bank boards and is currently the Interim Chief Operating Officer of a $300 million bank...read more

What goes up must come down: Managing Interest-Rate Risk with the new Fixed-Rate with Cap

The Fixed-Rate with Cap can assist liability-sensitive members with addressing funding mismatches associated with holding long-term assets.  This new product is a hybrid funding option that combines a fixed-rate borrowing with an embedded interest-rate cap that is tied to the 3-Month LIBOR rate, with maturities from 1 to 10 years.  As rates rise and assets extend, the rate on the Fixed-Rate with Cap can decline, lowering the member’s cost of funds...read more

Mirror, Mirror, on the Wall, Is My Funding Strategy the Fairest of Them All?

As the Chief Operating Officer of one of largest and most experienced Asset Liability Management solutions provider in the US, Frank L. Farone of Darling Consulting Group knows a thing or two about incorporating strategic wholesale funding strategies. In this article, Mr. Farone incorporates a Marginal Cost of Funds Analysis to reveal how members’ funding strategies can be improved through the use of HLB Advances...read more

Interest Rate Swaps: Consider all the Options in Managing Interest Rate Risk

We are seeing some members booking longer-term advances to strengthen their interest rate risk positions. Interest Rate swaps can be an effective tool in managing asset/liability mismatches present in many of our member’s balance sheets...read more

True Costs to Excess Cash

This article addresses the common practices and ramifications of holding large positions of cash and cash equivalents on the balance sheet for prolonged periods of time...read more