President's Report

October 29, 2004

At the Bank

Board Approves Third Quarter Dividend at 2.22%

At its regular meeting on October 21, 2004, the Home Loan Bank’s Board of Directors declared a cash dividend at an annualized rate of 2.22% for the third quarter of 2004. The dividend will be paid from third quarter earnings on October 29, 2004. In keeping with the Bank’s 2004 Retained Earnings and Dividend 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. This dividend declaration continues the Bank’s policy of increasing retained earnings to further insulate member capital stock from financial risk. After the payment of the $21 million third quarter dividend, the Bank’s retained earnings will be approximately $178 million.

The dividend paid from third quarter earnings will be credited to our members’ demand accounts on October 29, 2004. This information can also be accessed on the Combined Daily Advice within the Info Reporting Module under the Special Report Tab on 1Linksm, the Bank's Internet banking service.

As reported in the September 30, 2004, President’s Report, there has been a change in the methodology used to calculate the amount of desired retained earnings. Based on this methodology, the Bank has established a minimum retained earnings level as well as an optimum level. Based on current income projections, the Bank expects to meet the minimum level by year end 2004. After the retained earnings reach the minimum level, the Bank expects to increase the proportion of its earnings paid out as a dividend up to 80% of core earnings until the optimum retained earnings level is reached.

Average advances were $64.3 billion for the month of September, up slightly from August. We closed the month of September at $64.1 billion. Through our competitive pricing, innovative products, and exceptional service, we look forward to providing you with sustained performance and greater value for your investment in the Bank.

Home Loan Bank of New York Votes to Register with the SEC

Also at the October meeting, the Board voted to register the Bank’s capital stock with the Securities and Exchange Commission (“SEC”) under the 1934 Securities Exchange Act. The Board action is in conformity with the regulation adopted by the Federal Housing Finance Board (“FHFB”) on June 23, 2004, which requires each of the 12 Home Loan Banks to register with the SEC by August 29, 2005. The Home Loan Banks, along with the FHFB, have participated in a series of meetings with the SEC to discuss how to comply with SEC regulations while dealing with the cooperative nature of the Home Loan Bank System. The SEC staff has shown their willingness to work with the Home Loan Banks in view of our distinctive nature and status.

After the Bank is a registrant with the SEC, the Bank will then proceed, with the approval of the FHFB, to exchange our members’ stock under a new capital plan as required by the Gramm Leach Bliley Act of 1999. We expect the capital exchange to occur in the second half of 2005. The Bank will be conducting a special mailing to bring about the exchange.

Board Adopts 2004 Long-Term Strategic Plan

The Board approved the Bank's Long-Term Strategic Business Plan. In developing this plan, the Directors and Bank management actively explored a range of strategic alternatives for the Bank and the risk/return implications of those alternatives. After much analysis and discussion, the Directors and management determined that it was best to remain an “advances Bank” and to continue to take actions to enhance value for our stockholders.

To execute the plan, the Bank will focus on meeting customers’ liquidity needs and develop new low- to moderate-risk advances products to meet a broader range of customer borrowing requirements. In addition, the Bank will implement a low-risk financial management strategy that will improve returns but keep risks manageable. The Bank will implement a support strategy that will ensure that the Bank’s infrastructure is in alignment with the business strategy. And the Bank will continue its mission of advancing housing opportunity and local community development by maximizing the capacity of community-based member lenders to serve their markets.

In Washington

President Bush Nominated Ronald Rosenfeld to the FHFB

On October 1, 2004, President Bush nominated Ronald Rosenfeld to fill the vacant seat at the FHFB. Mr. Rosenfeld is the current president of Ginnie Mae and has served previously as Secretary of Commerce in the State of Oklahoma from 1995-1998. From 1992-1993 he was Deputy Assistant Secretary for Corporate Finance at the Department of the Treasury. From 1989-1991, he held three posts at HUD -- General Deputy Assistant Secretary for Housing-Federal Housing Commissioner, Acting Deputy Assistant Secretary for Multi-Family Housing, and Deputy Assistant Secretary for Single-Family Housing.

Prior to 1989, Mr. Rosenfeld worked in the private sector. From 1982-1988, he was Executive Vice President of Prescott, Ball & Turben, Inc., a Cleveland-based subsidiary of Kemper Financial Corporation.

Upon confirmation by the Senate, a full complement of directors would be on the FHFB: three Republicans and two Democrats.

The Home Loan Bank team wants to thank you for your use of our products and services to expand the availability of mortgage credit, to compete effectively in your market, and to promote strong communities.


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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