President's Report

July 31, 2008

Dividend Announcement

Board Approves Second Quarter Dividend of 6.50%

I am pleased to report that our Board of Directors has approved the dividend rate for the second quarter of 2008 of 6.50% (annualized).  The New York Home Loan Bank's dividend rate for the first quarter of 2008 was 7.80%.  The dollar amount of the second quarter dividend is approximately $79 million.  The cash dividend was distributed to member financial institutions on July 31, 2008.

The FHLBNY’s retained earnings balance as of July 31, 2008, after the dividend payment, is approximately $340 million.  Using published numbers for the quarter ended March 31, 2008, the Federal Home Loan Banks had just under $3.8 billion in retained earnings.  New York’s share was 11.4% of that total, up from 11.3% at the end of 2007.  As the third largest Federal Home Loan Bank, New York’s retained earnings were the third highest dollar amount and the third highest as a percentage of total assets.  The dividend reflects the New York Home Loan Bank's low-risk profile and conservative investment strategy.

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.

Unaudited Second Quarter Results

Total assets were $118.1 billion on June 30, 2008, compared to $108.5 billion on March 31, 2008.  Advances increased to $90.8 billion, compared to $85.9 billion on March 31, 2008, and represented 77% of total assets.

For the six months ended June 30, 2008, the Home Loan Bank had net income of $174.2 million, representing a 23% increase in net income as compared to the $141.9 million for the first half of 2007.

Investments and short-term money-market instruments rose to $25.4 billion on June 30, 2008, up from $20.5 billion on March 31, 2008.  Mortgage assets were at $1.46 billion at June 30, 2008, about the same as the end of the first quarter of 2008, and represented less than 1.3% of total assets.  Capital rose to $5.3 billion on June 30, 2008, compared to $4.8 billion on March 31, 2008.

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

Nominations Period Opening for 2008 Election of Directors of the Home Loan Bank

On July 7, 2008, nomination certificates and related information regarding the 2008 Director Election process were mailed to all eligible participating stockholders in New Jersey and New York.  This year, one seat 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 begin their new term starting on January 1, 2009.  The deadline to return your nomination certificates to the FHLBNY is 5:00 p.m. on August 6, 2008.

In Washington

Housing and Economic Recovery Act of 2008 Signed Into Law

On July 30, President George Bush signed into law the "Housing and Economic Recovery Act of 2008."  The new law generally follows the form of the legislation that was described in my Report to you dated June 3, 2008.  In sum, a new regulator – the Federal Housing Finance Agency ("FHFA") – has been created for the Federal Home Loan Banks, Fannie Mae, and Freddie Mac.  James B. Lockhart (the former OFHEO Director) will be the acting Director of the FHFA.

A brief summary of the key provisions contained in the new law affecting the Federal Home Loan Banks is enclosed for your information.

We will work closely with the new FHFA, the Federal Housing Finance Board (which will continue in existence for one year solely for purpose of winding up various matters), and the other 11 Home Loan Banks with respect to the implementation of the various new statutory requirements and other transition matters. 

The Home Loan Bank team is proud to provide you with products and services to expand the responsible availability of mortgage credit, to compete effectively in your market, and to promote strong 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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