President's Report

August 1, 2006

At the Bank

Board Approves Second Quarter Dividend of 5.75%

I am pleased to report that our Board of Directors has approved a dividend for the second quarter of 2006 at the rate of 5.75% (annualized). The dividend was credited to member financial institutions on July 31, 2006. The Federal Home Loan Bank of New York’s (FHLBNY’s) dividend rate for the first quarter, paid in April of 2006, was 5.25%. The dollar amount distributed for the second quarter dividend will be approximately $54 million. On June 30, year-to-date net income was $138.1 million compared to $112.8 million for the same period in 2005, a 22.5% increase.

This second quarter dividend of 5.75% represents a fair return on our members’ investment in the FHLBNY and reflects our low-risk profile and conservative investment strategy. It represents a payout of 72% of net income for the quarter. Retained earnings after the dividend payment will be approximately $282 million. The current dividend is the highest annualized rate since the second quarter of 2001.

Additional financial and other disclosures about the FHLBNY may be found on the SEC website at

In June, advances averaged $65.4 billion, up $0.2 billion from May. Month-end advances totaled $67.6 billion. Significant growth in the short-term sector continued with Short-Term Fixed-Rate Advances up by $2.7 billion at month end. Convertible Advances increased by $0.9 billion, while Floating-Rate and Repo Advances declined by $0.7 and $0.2 billion, respectively. As a member-focused cooperative, we look forward to continuing to be able to provide our member community lenders with low-cost liquidity while also providing a fair dividend.

In July, the FHLBNY committed $250 million in disaster relief funds through its Community Lending Programs (“CLP”) in response to recent floods affecting four counties in New Jersey (Hunterdon, Mercer, Sussex, and Warren) and twelve counties in New York (Broome, Chenango, Delaware, Herkimer, Montgomery, Oneida, Orange, Otsego, Schoharie, Sullivan, Tioga, and Ulster). This action enables member lenders who need funding for restoration in FEMA-designated disaster areas the ability to obtain the lowest price FHLBNY advances available. CLP funds can be used for housing, small business, and economic development lending. For more information about the CLP disaster recovery commitment, please contact Joe Gallo, Vice President, Community Investment, at (212) 441-6851 or Adam Goldstein, Vice President, Sales and Marketing, at (212) 441-6703.

In Washington

Geoffrey S. Bacino Appointed to the Federal Housing Finance Board

On June 15, President Bush nominated, and, on July 26, the U.S. Senate confirmed, Geoffrey S. Bacino from Illinois to serve on the Board of the Federal Housing Finance Board for a seven-year term expiring on February 27, 2013. Mr. Bacino succeeds Director Franz Leichter of New York, whose term expired in February of this year.

Immediately prior to this appointment, Mr. Bacino served as Senior Vice President for Legislative and Regulatory Affairs at CENTRIX Financial. Mr. Bacino was also Principal of the Bacino Group. Earlier in his career, he was President of Bacino Associates. Mr. Bacino was also appointed to the National Credit Union Administration Board by President Clinton and served during 2000 and 2001.

As previously reported, the July meeting was Director Sanford Belden's (Community Bank, DeWitt, NY) last meeting as a Director of the FHLBNY. I would again like to express my appreciation to Sandy for his dedication and many contributions to the Bank during his service on the Board.

In closing, I would like to thank you, our members, for using our products and services to help you meet the credit needs of your communities. Through your lending efforts, you give families and individuals the opportunity to achieve their dreams of home ownership, and you help create safer, stronger, and more prosperous 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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