President's Report

April 30, 2004

At the Bank

Board Approves Quarterly Dividend at 1.58%

At its meeting on April 15, 2004, the Home Loan Bank’s Board of Directors declared a dividend of 1.58% for the first quarter of 2004. The dividend will be paid from first quarter earnings on April 30, 2004. In keeping with the Bank’s 2004 Retained Earnings Policy, approximately 50% of the Bank’s net income for the quarter will be added to the Bank’s retained earnings, and the remaining 50% will be paid in the form of a dividend to our shareholders. After the payment of this dividend, the Bank’s retained earnings will be approximately $125 million.

As reported in February, the Bank intends to continue to increase retained earnings to further insulate member capital stock from financial risk. During the first quarter 2004, the Bank completed an organizational restructuring designed to incorporate industry best practices by creating a risk management function that is separate from the Bank’s business operations while exercising close oversight of all aspects of the Bank’s business.

At the same time, the Bank implemented revised investment strategies and rebuilt the investment portfolio to achieve reasonable returns on member capital with reduced risk. And redemption of excess member capital stock has been carefully managed in order to enhance the dividend.

I anticipate that, in this record low-interest-rate environment, earnings will remain less than 4% on capital and dividends will remain below 2% for the remainder of 2004.

Advances Averaged $62.7 Billion and MPF Funding Reached $1.7 Billion

Advances averaged $62.7 billion in March, up from $62.3 billion in February. And, in the first quarter of 2004, advances grew by $1.7 billion.

Members have been re-evaluating their balance sheets and considering opportunities such as using our facilities to lock in longer-term Fixed-Rate Advances to help fund longer-term assets. The HLB Advantage, our new monthly newsletter available at our web site, highlights various potential match funding and pool funding strategies for customers to consider in the current interest rate environment.

The Bank’s Mortgage Partnership Finance®(MPF®) Program reported a total of $160 million in one-to-four family residential loans purchased during the first quarter of 2004, compared to $94 million purchased in the first quarter of 2003. Many members are taking advantage of the ability to earn a high return through a competitive up-front price and continuing fee income for accepting a portion of the credit risk. MPF has funded approximately $1.7 billion in mortgage loans since 1999.

If you have interest in learning more about the Bank’s advance products or the MPF Program, please contact Jim Gilmore, Head of the Marketing and Sales Group, at (212) 441-6812.

I appreciate the confidence our members have shown in the Bank during the difficult period at the end of 2003. The support of our members has enabled the Bank to focus on core, low-risk activities that fulfill our mission. At a time when economists are predicting rising interest rates, I want you to know that you will continue to be able to depend upon the Home Loan Bank as your source of low-cost liquidity.

2004 Election of Directors of the Home Loan Bank

With the approach of June, the Home Loan Bank is entering this year’s election cycle for approximately one third of the elected members of the Board of Directors. We currently expect, subject to final determination by the Federal Housing Finance Board, that there will be two seats in New Jersey and two seats in New York up for election. Each of the individuals elected this year will serve a three-year term starting on January 1, 2005.

Fulfilling the duties of administering the elections of the industry seats, the Home Loan Bank of New York plans to implement the following election schedule for our stockholders:

Key Dates for 2004 Election of Directors




Start of 2004 Election of Federal Home Loan Bank of New York (FHLBNY) Directors. Nomination certificates are mailed to eligible member institutions in the voting states for 2004.


Nomination Deadline. Nomination certificates must be due back to FHLBNY by July 21.


Nominee Acceptance Deadline. Candidates running for election must return the completed Eligibility Form to the FHLBNY by September 1.


Ballots are mailed by the FHLBNY to eligible member institutions in the designated voting states for 2004.


Voting Deadline. Ballots must be received at the FHLBNY by October 29. Election results are tabulated starting on November 1.


Elected candidates are notified by the FHLBNY of the election results.


The FHLBNY announces the results of the 2004 Election of FHLBNY Directors. Statewide election results, including the total number of votes received by each candidate on the ballot, will be mailed to member institutions.


Directors elected in 2004 take office.


If you have any questions regarding the election, please contact Corporate Secretary Barbara Sperrazza at 212-441-6819.

In Washington

White House Appoints Alicia R. Castaneda Chairman of FHFB

President Bush designated Alicia R. Castaneda as Chairman on April 14, 2004. Ms. Castaneda has been serving on the Finance Board since December 2003. She replaced John T. Korsmo. The U.S. Senate confirmed Ms. Castaneda to the FHFB in December 2003, and she was sworn-in in January 2004. Ms. Castaneda's term on the Board runs until February 27, 2011.

Ms. Castaneda brings more than 28 years of commercial banking experience to the Finance Board, most recently as Senior Vice President, International Private Bank, with Bank of America in Washington, D.C. She has developed expertise in fixed income instrument sales and trading, short-term investments, and arbitrage and liability management.

A native of Colombia, Ms. Castaneda earned a bachelor’s degree in economics from the Universidad del Valle in Cali in 1969. She immigrated to the United States in 1970.

Ms. Castaneda is the first Hispanic to be appointed to the Finance Board and is the first woman to serve as a director since the Finance Board became full-time in 1990. She is also the first person with banking experience to serve as Chairman.

The other three members of the five-member FHFB are: Directors Franz S. Leichter, Allan I Mendelowitz, and HUD Secretary Alfonso Jackson. A fifth seat is vacant.

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


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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