President's Report

May 28, 2004

At the Bank

Advances Averaged $62.1 Billion

In April, advances averaged $62.1 billion, down $600 million from March. Month-end advances totaled $64.2 billion due to a strong surge of business late in the month. One-year Adjustable Rate Credit (ARC) and Convertible Special Advance offerings were well received during the month. We also experienced an increase in longer-term advances in April.

Mortgage Partnership Finance® (MPF®) Demand Solid

The Home Loan Bank’s Mortgage Partnership Finance® (MPF®) Program reported $59 million in one-to-four-family residential loans purchased during April, compared to $54 million purchased in March. Many members are taking advantage of the potential to earn a high return through a competitive up-front price and continuing fee income in return for accepting a portion of the credit risk.

1Linksm Continues to Grow

1Linksm, our secure Internet banking system, is proving to be an efficient and convenient channel for accessing reports and performing everyday transactions online. We now have 94% of the membership, or 287 members, signed up for 1Link, with over 1,300 users. With the ability to perform Wire Transfers, Book Transfers, Safekeeping transactions, and Overnight advances, it is easy to understand why 30% of all transactions are now being done with 1Link. When you consider the potential benefits of doing business with the Home Loan Bank online, those benefits could add up to significant savings for your institution. If you have any questions about 1Link, please contact your Calling Officer today.

We are excited about the new features that we have just rolled out on 1Link. Member lenders can now initiate ARC Daily, Variable, and Short-Term Advance transactions, in addition to OLOCs, through 1Link. Additionally, you can roll over or pay off maturing advances, check your maturing advances throughout the day, and view your entire portfolio of outstanding advances, stockholdings, and collateral availability. I would like to extend my appreciation to our pilot customers who have been using this function in its preview stages. More information will be sent to you in the near future.

If you have any questions about MPF, 1Link, or the Bank’s advance products, please contact Jim Gilmore, Head of the Marketing and Sales Group, at (212) 441-6812.

Five Community Members Join the Home Loan Bank

Over the past few months, five community member lenders have joined the Home Loan Bank. I am pleased to welcome three members headquartered in New Jersey and two members headquartered in New York as the newest stockholders.

The new members in New Jersey are: Franklin Bank, Nutley; Grand Bank, National Association, Hamilton; and Rock Community Bank, Glen Rock.

The new members in New York are: Savannah Bank, National Association, Savannah, and TEG Federal Credit Union, Poughkeepsie.

I again welcome our newest members and thank all customers and stockholders for the business.

Corporate Governance Update

The Board has established, effective as of July 1, a Corporate Governance Committee. The Committee's charter is based on Section 303A, Subsection 4, of the New York Stock Exchange’s (NYSE) “Listing Requirements.” The NYSE rules are the gold standard in this area. Although the Bank is not subject to NYSE rules, the creation of the Committee will help to further enhance governance practices here at the Bank. Responsibilities of the new Committee will include, among other items: making recommendations regarding the structure and membership of Board committees, making recommendations regarding filling elective directorship vacancies, establishing formal “Corporate Governance Guidelines,” and overseeing the annual Director election process. A copy of the new Committee’s charter has been posted on the Governance section of the Bank’s website at:

The Home Loan Bank plays an integral role in helping our member lenders serve the financing needs of the residents and businesses in our District. Access to the Home Loan Bank’s advance products helps you, our members, serve a wide range of borrowers and offer a variety of attractive loan products. We are profoundly grateful for the opportunity to serve you.

2004 Election of Directors of the Home Loan Bank

Be on the lookout for the 2004 Director election nomination certificates that will be mailed to all eligible member institutions on June 21, 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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