November 1, 2007
At the Bank - 15 Years
Fifteen years ago I had the honor to be selected by the Board of Directors as the President and Chief Executive Officer of the Federal Home Loan Bank of New York. It has been a privilege to lead the very special team of skilled professionals at the Home Loan Bank and to operate under the direction of an outstanding and very dedicated Board of Directors. Together we work to help our member lenders fund mortgages and loans for community and business development in any economic environment.
Every workday at the Home Loan Bank is different. The challenges of this quarter ranged from the routine, to the steam pipe explosion on Lexington Avenue down the block from our headquarters on July 18th, to the extraordinary growth in our advance business which we saw on nearly every business day in August and September. The steam pipe explosion caused the activation of our business recovery plan and the relocation of our operations to Jersey City for a week. The advance growth increased our need to successfully execute transactions in the capital markets that would fund those advances efficiently.
The numbers (unaudited) below capture this period of extraordinary demand from our member lenders for advances that fund economic activity in the communities they serve. These numbers confirm that the Home Loan Bank is the liquidity window of best resort.
Third Quarter Dividend Declared at 8.05%
The Board of Directors of the Federal Home Loan Bank of New York declared a regular quarterly cash dividend at an annualized rate of 8.05 percent at a meeting on October 18, 2007. The dividend, based on stock held during the period July 1, 2007, through September 30, 2007, was paid to shareholders on October 31, 2007.
The dollar amount of the third-quarter dividend was approximately $79 million. The November 1, 2007, retained earnings after the dividend payment will be approximately $319 million. Future dividend rates may be significantly different from the current rate as a result of a number of factors including the effects of derivatives accounting (SFAS 133), overall interest rates, demand for our products, and our ability to achieve targeted returns on our investments.
Third Quarter 2007 Balance-Sheet Highlights
Advances increased 27 percent to $75.1 billion, compared with $59.0 billion on December 31, 2006. Advances represented 73.3 percent of total assets. And on September 30th, 212 or 71 percent of our member lenders had tapped the Home Loan Bank's liquidity window. Total assets increased 25 percent to $102.4 billion at September 30, 2007, up from $81.7 billion at the end of 2006.
The Home Loan Bank had net income of $85.2 million for the third quarter, representing an 11 percent increase in net income as compared to the $76.8 million for the third quarter 2006. Through the first nine months of 2007, the Bank’s net income was $227.1 million, an increase of $12.2 million over the same period last year.
Investments and short-term money-market instruments rose to $25.1 billion at September 30, 2007, up from $20.5 billion on December 31, 2006. Mortgage assets were at $1.5 billion at September 30, 2007, about the same as the end of the year, and represented less than 2 percent of total assets. Capital rose to $4.5 billion at September 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 http://www.sec.gov/edgar/searchedgar/webusers.htm
These results point to a simple truth. Credit markets and consumers now recognize the value of community lenders who are able to close loans in all market environments because of their responsible lending practices and access to reliable FHLBank funding.
I would like to thank each stockholder for your business.
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 on 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.