President's Report

November 30, 2004

At the Bank

Advance Demand Stable

October was a month of stable advance demand. Advances averaged $64.4 billion, up slightly from $64.3 billion in September. We closed the month at $65.0 billion. In October, the Bank offered additional LIBOR-based adjustable rate specials that continued to be well subscribed by members. The Bank will look for more opportunities to provide these and other special-advance offerings in the months ahead. We look forward to continuing to be able to provide our members low-cost liquidity.

The bottom line of the Home Loan Bank also remained rock-solid throughout the year. The positive performance reflected substantial advance demand and measured returns on the highest quality, real estate-supported investments. The Bank provided an increasing return in the form of dividends throughout the year. In January the Bank declared a dividend of 1.45%. In April the dividend was declared at 1.58%, in July 2.08% and in October 2.22%. This means for 2004 the Bank paid an average dividend of 1.833%. This translates to an actual dollar amount of $69.8 million.

At the same time the dividend was trending upward, the Bank was building retained earnings. As described in my October report, the Bank has established a methodology to estimate a minimum retained earnings level as well as an optimum level. Based on the Bank’s anticipated risk profile and current income projections, the Bank expects to meet the minimum level by the end of this year. 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, at which time up to 100% of core earnings may be paid to our shareholders. I look forward to being more definitive on this important matter in early 2005.

Four Industry Stockholders Elected to the Board of Directors for 2005

As I reported in a special stockholders mailing on November 2, 2004, in New York, George L. Engelke, Jr., Chairman, President and CEO of Astoria Federal Savings and Loan Association, Lake Success, has been re-elected to the Board.

Joseph R. Ficalora, President and CEO of New York Community Bancorp, Westbury, was newly elected. Mr. Ficalora will succeed Atwood Collins, III, Executive Vice President of M&T Bank, Buffalo, who has served on the Board since January 1997.

In New Jersey, Ronald E. Hermance, Jr., President and CEO of Hudson City Savings Bank, Paramus, has been newly elected to serve on the Board. He will replace Edward C. Gibney, Director, Boiling Springs Savings Bank, Rutherford, who is completing his second term.

Kevin J. Lynch, President and CEO of Oritani Savings Bank, Hackensack, has also been newly elected. He will replace Leopold W. Montanaro, Director, Kearny Federal Savings Bank, Kearny, who is also completing his second term.

Each of these industry directors will serve on the Board for a three-year term ending December 31, 2007.

I congratulate George on his re-election and Joe, Ron, and Kevin on their elections to the Board.

Your Home Loan Bank team wishes to thank you, our members, for your use of our products and services that allow you to expand the availability of mortgage credit, to compete more effectively in your markets, and to promote strong communities.

 

Sincerely,
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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