President's Report

January 20, 2005

At the Bank

Dear Stockholder:

I am pleased to report that the Board of Directors has approved a dividend rate for the fourth quarter of 2004 of 3.05% (annualized). The Home Loan Bank's dividend rate for the third quarter was 2.22%. The dollar amount of the fourth quarter dividend will be approximately $27.5 million. The average rate for dividends paid on the basis of stock ownership in 2004 was 2.20%, and the total cash dividend paid in these four quarters was $83.4 million. The dividend will be distributed to member financial institutions on January 31, 2005.

Like all 2004 dividend payments, the fourth quarter dividend complies with the Bank's Retained Earnings and Dividend Policy. The purpose of the policy is to: (1) establish a process to assess the adequacy of retained earnings in view of the Bank's assessment of the financial, economic, and business risks inherent in its operations; (2) establish the priority of contributions to retained earnings relative to other distributions of income; (3) establish a target level of retained earnings and a timeline to achieve the target; and (4) establish a process to ensure maintenance of appropriate levels of retained earnings. As discussed more fully in my September 2004 report to members, the policy establishes a methodology to calculate a retained earnings threshold level and optimum level based on the Bank's risk profile.

The fourth quarter dividend represents a payout of 66% of core earnings for the quarter. Retained earnings after the dividend payment are approximately $196.5 million, which meets the optimum level of retained earnings as of year-end. Our success in rebuilding retained earnings reflects the Bank's low-risk asset profile and conservative financial management practices. With adequate retained earnings now accumulated, we anticipate paying out higher dividends the remainder of 2005.

This announcement is provided for informational purposes only and contains information and forward-looking statements about the Bank's expectations. Such information and statements involve certain risks and uncertainties, and results will depend on actual events and developments.

The Federal Home Loan Bank of New York is a Congressionally chartered wholesale Bank. It is part of the Federal Home Loan Bank System, a national wholesale banking network of 12 regional, stockholder-owned banks. The FHLB of New York currently serves 300 financial institutions in New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands. The mission of the Federal Home Loan Bank of New York is to support the efforts of local members to make home mortgages to families of all income levels and provide credit to spur community growth.


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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