President's Report

March 2, 2006

At the Bank

The Advances Remain Strong at $61.9 Billion

During January, the Home Loan Bank experienced a $1 billion increase in advance demand compared with December 2005. The average advance demand level in January was $61.9 billion and average demand for the month of February increased to $63 billion. (With the Home Loan Bank as an SEC registrant, my monthly President’s report is included in our regular 8-K filings. Therefore, we are providing when appropriate, financial information not only for the month ended 30 days ago, but also for the immediate past month.) The increase in advances was primarily a result of member lenders tapping a Convertible Advance special offering combined with increased utilization of Overnight Letters of Credit (OLOC) and Adjustable Rate Credit (ARC) advances. We continue to look for new opportunities to provide our member lenders special offerings and extremely competitive credit products.

I would like to remind our member lenders that, as you continue with your growth strategies, having a solid liquidity plan can be a key ingredient to success. In this regard, the Home Loan Bank can help increase your liquidity capabilities by serving as a bridge to the capital markets and making funds available to you at maturities and terms that might otherwise be unavailable. The Home Loan Bank also enables you to pledge certain otherwise illiquid assets as collateral for your liquidity needs.

To better help meet our members' liquidity needs, the Home Loan Bank is making enhancements to its Repo Advance product effective April 3, 2006. Through the re-engineered Repo Advance, members will no longer need to pledge specific securities to specific Repo Advances. Instead, eligible securities collateral will be pooled, and members will be able to borrow against the pool of securities. This enhancement will allow members to access the same low rate for Repos collateralized with agency securities as with non-agency securities. In the next few days, please keep an eye out for correspondence from our Marketing and Sales group detailing the enhanced Repo Advance.

Should you have any questions on how the Home Loan Bank can help with liquidity or strategic growth, please contact Jim Gilmore, Senior Vice President, Head of Marketing and Sales, at (212) 441 6812 or Adam Goldstein, Vice President, Director of Sales and Marketing, at (212) 441 6703

Update on the Home Loan Bank's Anti-Predatory Lending Policy

Elimination of predatory and abusive lending practices is a goal our members share with most of the responsible companies in the financial services industry. Early in 2004, the Home Loan Bank adopted a formal Anti-Predatory Lending policy and communicated this policy to all members. The policy clearly states that the Home Loan Bank will not purchase mortgage loans through the MPF program or grant advances against mortgage loan collateral that have been originated under predatory or abusive lending practices, as defined by applicable laws and regulations.

In response to Advisory Bulletin 05-08 issued by the Federal Housing Finance Board (FHFB) in 2005, the Home Loan Bank has recently expanded upon our existing policy and worked with the other Home Loan Banks to develop a unified anti-predatory lending policy. We expect to publish this revised policy shortly. However, the issue of predatory lending will continue to evolve as the FHFB provides additional guidance. To meet these changes, members should expect future adjustments to the Home Loan Bank's anti-predatory lending policies, although the basic thrust of the policy (as captured in the above underlined text) will not change. The Home Loan Bank will communicate these changes to our members as quickly as practicable.

Five Community Lenders Join the Federal Home Loan Bank

Five community member lenders recently joined the Home Loan Bank. I am pleased to welcome the newest member headquartered in New Jersey and the four newest members headquartered in New York to the FHLBNY.

The new member in New Jersey is: Liberty Bell Bank, Cherry Hill.

The new members in New York are: Capital Bank & Trust Company, Albany; Hamptons State Bank, Southampton; Northern Federal Credit Union, Watertown; and Oceanside Christopher Federal Credit Union, Oceanside.

The Home Loan Bank team wishes to thank you, our members, for your use of our credit products and services to expand the availability of mortgage credit, compete effectively in your markets, and strengthen your 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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