President's Report

August 2, 2007

At the Bank

Board Approves Second-Quarter Dividend of 7.50%

I am pleased to report that the Executive Committee of our Board of Directors has approved a dividend for the second quarter of 2007 at the rate of 7.50% (annualized). The dividend was credited to member financial institutions on July 31, 2007. The Federal Home Loan Bank of New York’s (“FHLBNY”) dividend rate for the first quarter, paid in April 2007, was 7.50%. The dollar amount distributed for the second-quarter dividend was approximately $69 million. The dividend reflects the Bank’s low risk profile and conservative investment strategy.

Please note future dividend rates may be significantly different from the current rate as a result of a number of factors. These factors include:  the effects of derivatives accounting (SFAS 133), overall interest rates, demand for our products, and our ability to achieve targeted returns on our investments. In addition, payment of a dividend remains within the discretion of the Bank’s Board of Directors and subject to certain regulatory requirements.

Unaudited Second-Quarter Results

The Home Loan Bank had net income of $70.6 million for the second quarter, representing a 6.4 percent decline in net income as compared to the $75.4 million for the second quarter of 2006. Through the first six months of 2007, the Bank’s net income was $141.9 million, an increase of $3.8 million over the same period last year. The June 30, 2007, retained earnings after the dividend payment will be approximately $311 million.

Second-Quarter 2007 Balance Sheet Highlights

Total assets increased 5.1 percent to $85.9 billion at June 30, 2007, up from $81.7 billion at the end of 2006. Advances increased 3.8 percent to $61.2 billion, compared with $59.0 billion on December 31, 2006, and represented 71.3 percent of total assets. Investments and short-term money-market instruments rose to $22.3 billion at June 30, 2007, up from $20.5 billion on December 31, 2006. Mortgage assets were largely unchanged at $1.5 billion at June 30, 2007, compared with the end of last year, and represented less than 2 percent of total assets. Capital rose slightly to $4.0 billion at June 30, 2007, compared with $3.9 billion on December 31, 2006.

Additional financial and other disclosures regarding the Bank may be found on the SEC website at

Nominations Period Opening for 2007 Election of Directors of the Home Loan Bank

On July 9, 2007, nomination certificates and related information regarding the 2007 Director election process were mailed to all eligible participating stockholders in New Jersey and New York. This year, two seats for New Jersey and two seats for New York are up for election. No seats for Puerto Rico and the U.S. Virgin Islands will be up for election this year. Each of the individuals elected will serve a three-year term starting on January 1, 2008. The deadline to return your nomination certificates to the FHLBNY is 5:00 p.m. on August 8, 2007.

Back in Manhattan After the Blast

July was a challenging month for operations at the Home Loan Bank. Adjacent to the northeast corner of the building where our Bank is headquartered, 101 Park Avenue, there was a major steam pipe explosion (41st Street and Lexington Avenue) on July 18. We were all able to exit the building safely, and the Bank immediately and smoothly switched to our operations center in Jersey City, New Jersey, from which we operated until July 24. This was the fourth time in 14 years that the Bank implemented our disaster response plan. I am sure that you take pride in the dedicated team of professionals at the Home Loan Bank who once again have taken extraordinary action to keep the Bank operating for you, our community member lenders. They executed well.

All of us at the Home Loan Bank appreciate the expressions of concern and support that we received from our colleagues and customers.

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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