Member Advantage

February 2013

Continued Focus on Maximizing Your Membership for 2013

In a year full of extraordinary national and world events, continued economic uncertainty, and an ever-changing competitive landscape for member shareholders, the FHLBNY continued to fulfill its mission in 2012 to advance housing opportunity and local development for its community-based member lenders. This edition of the FHLBNY Advantage looks back at the top stories and enhancements that occurred at the FHLBNY in 2012. As we move forward into 2013, the FHLBNY will continue its focus on ways in which it can maximize value for our members.

Stability and Strength: Advances Portfolio Growth & Dividend Performance

Providing liquidity in the form of advances, in all operating environments, remains the core of the FHLBNY’s strategic vision and mission. In 2012, the FHLBNY continued to strengthen and broaden its membership by welcoming nine new and diverse members.

The resilience of our business was reflected in the advances portfolio. Through December, the book value of advances averaged $73.4 billion, an increase from $67.0 billion in December 2011. The stability and strength of the advance portfolio was also reflected in the performance of the FHLBNY’s dividend. On November 15, the Board of Directors approved a dividend of 4.50% for the third quarter of 2012, matching the 4.50% dividends provided in the first two quarters of 2012.*

New Product Released and Product Reoffered

On October 15, the new Fixed-Rate Advance with a LIBOR Cap (Fixed-Rate with Cap) was introduced. The Fixed-Rate with Cap can help assist liability-sensitive members with addressing funding mismatches associated with holding long-term assets. This hybrid funding option combines a fixed-rate borrowing with an embedded interest-rate cap that is tied to the 3-month LIBOR rate, with maturities from 1 to 10 years. The advance rate would remain fixed, but may be reduced quarterly if 3-month LIBOR rises above an agreed upon strike threshold (cap).

Also, following the Dodd-Frank legislation, the FHLBNY temporarily suspended the offering of stand-alone derivative products to its members. With the release of the final rules that excluded the FHLBNY as a major swap participant, the FHLBNY lifted the suspension and began reoffering these products in the Fall.

FHLBNY Responds to Superstorm Sandy: $1 Billion Commitment to Disaster Relief Funding

The FHLBNY made $1 billion in disaster relief funding available through the Community Lending Programs to help members rebuild communities in New York and New Jersey impacted by Superstorm Sandy. The funds, which are currently still available, can be used for small business and economic development lending in FEMA-designated disaster areas, regardless of the income status of the effected communities. Residential lending activities are also eligible for households whose incomes are at or below 115 percent of the area median income. A few members have taken advantage of this offering to date.

Members can apply for up to $100 million, in increments of up to $50 million. Extensions beyond the cap may be granted on a case-by-case basis. For an application, more information, and FEMA designations, click here.

Eligible Collateral Expanded: HELOC Mortgages Now Accepted

In an ongoing effort to provide additional liquidity for our members, on August 9, the FHLBNY began accepting Home Equity Line of Credit (HELOC) mortgages as eligible collateral. There are eligibility criteria for pledging HELOCs, including requirements for data submission, a combined loan-to-value ratio limitation of 80% or less, stringent delinquency provisions, etc. The FHLBNY strives to provide maximum liquidity for our members in a sound manner consistent with the overall risk profile of the FHLBNY. Contact a Calling Officer to further explore this collateral opportunity and how it may help expand your borrowing potential.

Member Credit Scores Improve

Just as credit scores are used to evaluate the potential risk in consumer lending, the FHLBNY uses an internal credit scoring model to calculate a credit score for each member. As reported in the December FHLBNY Advantage issue, members’ credit scores are improving despite continued concerns from the repercussions of the failure to resolve the current “fiscal cliff,” as well as the direct and indirect economic impact from the euro-zone crisis. The driving factor supporting improved ratings was the lack of deterioration in members’ portfolios of problem loans. If you would like to know your credit score, contact a Calling Officer.

New Resource Center for Members

On October 10, the FHLBNY added a Resource Center to its public website under the “Members” tab. This newly created section centralizes the resources and information most requested by our members, and also includes strategies and tools to help address members’ funding needs.

*Note: There is no guarantee that the level of future dividends will reflect the level of previous dividend payouts.
**Please note certain term restrictions and pricing adjustments may be applied based on a member’s FHLBNY credit score or CAMELS rating.

Take Advantage of the FHLBNY’s Member-Director Education Program

The landmark Sarbanes-Oxley Act increased regulatory focus on corporate governance, and as a result, there are greater expectations for board directors to not only understand, but also contribute to, discussions on policy and strategy. The FHLBNY can help.

Through our Member-Director Education Program, members can request an education session specifically tailored to the directors and managers of their institution.

The program can be customized to address your specific needs and concerns, and will cover a wide range of issues commonly faced by most community lenders. Our executive team will work directly with yours to customize a program to ensure you receive the maximum value for your time.

There‘s no cost to your institution — it’s a benefit of your membership. To schedule your program, contact a Calling Officer at (212) 441-6700.

  • Suggested Education Topics:
  • FHLBank System overview, earnings, and financial highlights
    • FHLBank Debt Issuances and System Capital Initiative
  • FHLBNY Membership Benefits and Trends
    • What is the FHLBNY and what makes our partnership “unique”?
  • FHLBNY Products, Services, and Programs
    • Advance Product Offerings/Trends
    • Letters of Credit
    • Community Lending and Housing Programs
    • Mortgage Partnership Finance (MPF®) Program (secondary market outlet)
    • Correspondent Services
    • Credit Monitoring and Collateral Management
    • Capital Stock Requirements and Dividends
    • Collateral Opportunities
  • Strategic Planning/Balance Sheet Considerations
    • Liquidity Planning and Industry Trends
    • Deposit Pricing Practices
    • Branch Funding Strategies

Other Announcements

AHP Application Deadline Revised to Friday, June 28. The package will be available on our website no later than 5/1...more

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