President's Report

December 31, 2003

At the Bank

I have previously reported that the Federal Housing Finance Board (FHFB) requested each of the 12 Federal Home Loan Banks to develop a retained earnings policy by March 31, 2004. I am pleased to report that the Federal Home Loan Bank of New York has made significant progress towards meeting this directive. At the Board of Directors meeting in December, the Board adopted a nine-point “Statement of Principles to Guide Development of the Bank’s Retained Earnings Policy.”

With a set of principles for retained earnings in place, the prospective level for future dividends to be paid by the Bank becomes clear. There are, of course, many factors that could cause actual results to be different. However, if the interest rate environment remains essentially unchanged, the Bank currently anticipates paying a dividend to stockholders in 2004 that is below 2.0 percent. Although our projected earnings for 2004 potentially give us the capacity to pay a higher dividend, the Bank intends to accelerate the growth of retained earnings by retaining a greater portion of its earnings than we have in the past. The other 11 Home Loan Banks will also be building their retained earnings.

I expect that management will recommend to the Board that a dividend be declared in January 2004 from fourth quarter 2003 earnings. After making a substantial contribution to retained earnings, I expect that the dividend will likely be at a rate that modestly exceeds 3 month LIBOR. The New York Bank believes that building retained earnings will buffer members’ capital stock against potential losses that could arise in the normal course of business.

FHLBNY Director Deforest "Buster" Soaries, Jr. Confirmed By Senate To Election Assistance Commission

I am pleased to announce that Reverend Buster Soaries, First Baptist Church of Lincoln Gardens, New Jersey, has been confirmed by the U.S. Senate as a member of the Federal Election Assistance Commission. The Commission was established by the “Help America Vote Act of 2002” and is charged with the responsibility of helping the 50 states administer this Act.

As a result of his new responsibilities, Buster resigned from the Board of the Federal Home Loan Bank of New York effective as of December 19, 2003. Buster had served on the Board since February 2003. As a Director, he made many contributions to the Bank and the Board particularly in relation to community development concerns. We wish him the best of luck with his new role on the Election Assistance Commission.

We again thank outgoing directors John R. Garbarino, Chairman, President and CEO of OceanFirst Bank, Toms River; and Salomón Levis, Chairman and CEO of Doral Bank, San Juan, for their numerous contributions (please see my November 30th report).

In Washington

Senate Confirms Federal Housing Finance Board Nominee

On December 9, 2003, the U.S. Senate confirmed Alicia R. Castaneda as a member of the FHFB. Ms. Castaneda was nominated by the President in June. She will assume the Directorship presently held by Director J. Timothy O'Neill, who has served on the FHFB since 1995.

Ms. Castaneda will complete the remainder of a seven-year term expiring February 27, 2004, and also serve an additional seven-year term expiring February 27, 2011.

Ms. Castaneda was a Senior Vice President of Bank of America where she served as Market Executive in the International Private Bank Division and as Senior Vice President and Manager for the Treasury Division. She is a graduate of Universidad del Valle, in Cali, Columbia.

The other four Members of the five member FHFB are: John T. Korsmo, Chairman of the FHFB, and Directors Franz S. Leichter, Allan I Mendelowitz, and John C. Weicher. Director Weicher is the HUD Secretary’s representative on the FHFB.

In Conclusion

There is no way of sugarcoating it. We had a financially difficult year in 2003. But addressing those difficulties has made us a stronger institution. And as we have dealt with those matters, we haven’t faltered for a moment in our mission to support affordable housing and community lending. The housing sector remains a pillar of strength of the American economy, and the Federal Home Loan Bank of New York, through its 306 members, has been one of the key engines driving that growth.

We value your loyalty to the Home Loan Bank and we respect your commitment to your customers. And we are profoundly grateful for the opportunity to serve you.

All of us at the Home Loan Bank wish you and yours the very best for 2004.


Alfred A. DelliBovi
President & CEO

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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This report may contain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. These statements may use forward-looking terms, such as “projected,” “expects,” “may,” or their negatives or other variations of these terms. The Bank cautions that, by their nature, forward-looking statements involve risk or uncertainty and that actual results could differ materially from those expressed or implied in these forward-looking statements or could affect the extent to which a particular objective, projection, estimate, or prediction is realized. These forward-looking statements involve risks and uncertainties including, but not limited to, regulatory and accounting rule adjustments or requirements, changes in interest rates, changes in projected business volumes, changes in prepayment speeds on mortgage assets, the cost of our funding, changes in our membership profile, the withdrawal of one or more large members, competitive pressures, shifts in demand for our products, and general economic conditions. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

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