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President’s Report

October 5, 2020

Report from the President

The Year-to-Date in Review: A Stable Partner and a Strong Culture

On September 30, I had the opportunity to speak at the Independent Bankers Association of New York State’s 46th Annual Convention. This year’s event – billed by IBANYS as “Virtually Un-Conventional” – has been scheduled through a series of webinars, reflecting the current reality of our socially distant operating environment. The IBANYS Annual Convention is an event we at the Federal Home Loan Bank of New York look forward to each year, as it provides an opportunity to connect with our members and hear from industry leaders on the initiatives and issues that help shape New York. I am grateful that, despite the challenges put in its path, IBANYS was still able to create such a valuable experience for its members and partners.

Overcoming challenges – especially unforeseen challenges – has certainly been the theme for 2020, for the FHLBNY, for our members, and for communities across New Jersey, New York, Puerto Rico and the U.S. Virgin Islands. In looking back at what has transpired over the past seven months, I am reminded of a line in my January 2020 report to members:

“The coming year and decade will provide its share of challenges and opportunities, and we are well-positioned to continue to serve as both an unwavering supporter of our local communities and a reliable partner for our members through whatever the future may bring.”

As it has turned out, the future brought the unexpected and the unprecedented. And since March, we have all experienced more challenges than opportunities. At the FHLBNY, it has been through a focus on our mission and with the support of our strong culture that we have remained a reliable partner for our members and communities. This is also the approach that I continue to see across our membership. In any crisis, it is the local lender that communities, households and small businesses look to for help. Across our District, our members continue to focus on their customers and their communities, as they have in every previous crisis. It is that dedication and that experience that will carry our region through this current crisis, as well.

It has been the speed and span of this crisis that sets it apart. In 2008, the financial crisis began in the markets and on Wall Street. In 2020, the current crisis hit everywhere, and all at once, giving us all our own anecdotal evidence of its widespread impact, be it a shuttered local restaurant or an empty commuter train or hair gone shaggy waiting for the barbershop to reopen. This is a crisis that has impacted virtually every community in our country, and at every level of each community.

This is a crisis that has impacted virtually every community in our country, and at every level of each community.

But as we know, in any crisis, the local lender is key. In every community, the local lender is vital to the local economy, and a key source of credit for businesses, families and municipalities. Over the past seven months, across our District – and across the nation – we have seen the local lender stepping up and creating opportunities to support customers and communities that are facing down a crisis. The local lender is truly a vital and committed part of every community across our country, and essential in this time of crisis.

This is why our partnership with our members, and our ability to provide the liquidity on which members rely to help meet the needs of their customers and communities, is so important. In the immediacy of the crisis, and in the months that followed, this partnership has been a source of critical support for communities across our District.

For example, during the month of March, as our nation and the financial markets first reacted to the pandemic, our advances grew by $41 billion to a record $134 billion – an increase of 44 percent – as members increasingly looked to us as a reliable source of liquidity amid a turbulent operating environment. This growth was reflected across the Federal Home Loan Bank System, where advances grew by 26 percent in the first quarter, primarily driven by the significant borrowing activity done in March as local lenders across the country looked to their Home Loan Bank for liquidity support. This is the role we are designed to play. After all, the Federal Home Loan Banks were created in response to the Great Depression, and we have successfully supported our members through every crisis since. This reliability was recognized by our regulator. In testimony before the House Committee on Financial Services on September 16, Federal Housing Finance Agency Director Mark Calabria stated:

“It is important to recognize the vital support that the FHLBanks provided to the market in response to the financial stress caused by the pandemic. A core function of the FHLBanks is to provide liquidity in times of stress. This support is critical for small and community banks that often do not have access to other sources of low-cost funding. When the COVID-19 crisis began, the FHLBanks stepped up to keep liquidity in the market, meeting unprecedented advance demand from their member financial institutions.”

Federal Home Loan Bank System advances balances have steadily declined since this initial high point, given the influx of liquidity through the CARES Act, coupled with increased member deposit levels. But again, this is how the System was designed to act – to seamlessly expand or contract based on member needs. And when our members needed us most, we were there.

This stability is also by design. We proudly take a prudent and conservative approach to our role as a trusted liquidity provider. We know that a financial institution cannot avoid risk, but we are always prepared to manage that risk, and we have a strong risk management culture across the Bank, focused on an “everyone is a risk manager” mantra. This is reflected in the regular credit risk reviews we conduct of our counterparties and members. It is seen in how we assess and manage market risk. And we see it in our approach to collateral, which is very important to us in our role as a secured lender. We periodically value our collateral portfolio, and adjust haircuts based on members’ credit conditions and the overall market environment.

Our goal is not to squeeze every last dollar of profit from our activities, but to manage our franchise so that we are always there for the long-term for our members, providing reliable and immediate liquidity in all operating environments. But our approach does generate results – earning more than $240 million in net income and returning more than $180 million in dividends to members through the first half of the year. We ensure we have significant liquidity on hand to withstand any interruptions to access to the debt markets, and we carry a significant amount of retained earnings – nearly $1.9 billion that supplements and protects our members’ approximately $6 billion in capital stock against any losses we might take, even as these losses are unlikely given the low-risk nature of the assets that make up our fortress balance sheet.

This conservative approach has served us well in the volatile environment created by the pandemic, and has positioned us a reliable partner for our members throughout the crisis.

Our reliability is reflected in our ability to help support our members’ efforts to lift up their communities. Earlier this year, with the full support of our active and engaged Board of Directors, we launched our COVID-19 Relief Program, a combination of Disaster Relief Funding, charitable donations, grants and subsidized advances.

This included the Small Business Recovery Grant Program to provide working capital to affected businesses across the District through our members. Through this Program, members were able to provide grants of up to $10,000 to qualifying small businesses and non-profit organizations that suffered a significant loss of revenue related to the pandemic. We experienced significant interest in the program, with members accessing the full $8 million allotment to provide grants to help more than 700 small businesses and nonprofit organizations address the challenges presented by the pandemic. Our COVID-19 Relief Program also includes $1 billion in low-cost Community Investment Cash Advance Disaster Relief Funding that we have made available to members through our Community Lending Programs to help communities and customers respond to and recover from the pandemic.

We have also seen significant member interest in our existing community-focused programs. We launched the 2020 Round of our Homebuyer Dream Program® in June with $12 million available in four installments at the beginning of June, July, August and September. But as the months went on, we continued to experience more and more demand for these grants, which our members use to provide down payment and closing cost assistance to first-time homebuyers earning at or below 80 percent of Area Median Income. And so we made the decision to increase the grant funding available in the final installment to $5.25 million, raising the total 2020 Round to $14.25 million. Our cooperative’s continuing commitment to housing will be reflected again later this year, when we join with our members to announce our annual Affordable Housing Program grants. These grants can and do make a real, tangible impact on the lives of households and families who are facing down unprecedented challenges.

The pandemic has shown just how prevalent housing instability is, both in our region and across the country. At the FHLBNY, we know the importance of creating and preserving affordable housing opportunities, and the value of having a safe and stable home. It is the foundation from which we grow as individuals, families and communities. And in these communities, it is the local lender that drives these housing opportunities. We are grateful to our members for your continued use of our housing programs, working with us to create stability for so many.

Last year, we embarked on a culture management effort to deepen our understanding of the FHLBNY’s current culture and its impact on our performance; and to better align our culture with the strategies and initiatives that drive our franchise forward. As part of this effort, we conducted a series of Culture Roadshows – company-wide Town Halls to engage with employees and determine what our culture means to them.

At those Roadshows, we were all asked to provide examples of when our institution was at its best. My colleagues who have been with our cooperative for 10 years highlighted our efforts following Hurricane Sandy. Those who have been here longer noted how the FHLBNY pulled together after the September 11th terrorist attacks. In all of those sessions, we heard inspirational stories shared by our colleagues of how the FHLBNY has rallied together in times of crisis and tragedy, and how we have faced and overcome great challenges together.

In extraordinary times, we come together as an extraordinary team. I know that this phenomenon is not limited to just our institution – our members, bolstered by your own strong cultures and guided by your own missions, have always rallied our communities in extraordinary times.

Today, we are living through truly extraordinary times. The COVID-19 pandemic has affected virtually every community, household and person across our District, presenting unprecedented and formerly unimaginable challenges. And yet, every day, our employees, working from kitchen counters and coffee tables, come together to conduct the business of the FHLBNY. And across our District, we see our members rise to meet these challenges as well, doing all that you can to support your customers, neighbors and communities.

COVID-19 has proven to be a most unpredictable pandemic. But in all this uncertainty, one thing is sure: to recover, our communities will need their local lenders. Across our region, cities and towns, communities and neighborhoods, families and households will look to their local lender for support. And just as you always do, just as you have done over the past six months, our members will answer the call. At the FHLBNY, we are honored to stand beside our members in these efforts.

2020 FHLBNY Board Elections Underway

Our Board of Directors supports our ability to stand by our members. Ours is an active and engaged Board, tasked with representing the needs of our members and the communities we serve, and providing management with the guidance necessary to ensure we continue to meet those needs

Earlier today, the 2020 Director Election ballots were sent electronically from the sender [email protected] to all eligible member institutions. Your responses are due by 5:00 p.m. ET on Wednesday, November 4. This year, five Directorships – two seats representing our New York members, one seat representing our New Jersey members and two Independent Directorships representing the whole District – are up for election for four-year terms commencing on January 1, 2021.

Our Board is a key part of our cooperative, and I encourage all of our members to participate in the election process. If you have any questions, please contact our general counsel, Paul Friend, at [email protected].

Sincerely,

José R. González
President and Chief Executive Officer

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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, the Risk Factors set forth in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q filed with the SEC, as well as 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. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Prior releases can be found on the SEC’s EDGAR System.

10/05/2020

Report from the President: A Stable Partner and a Strong Culture

09/03/2020

Report from the President: A Stable Foundation

08/04/2020

Report from the President: FHLBNY Announces Second Quarter Operating Highlights

07/02/2020

Report from the President: A Vital Conversation

06/02/2020

Report from the President: A Balanced Provider and a Stable Partner

05/20/2020

Dividend Announcement 1Q20: The FHLBNY Declares a 5.90% Dividend for the First Quarter of 2020

05/07/2020

Report from the President: FHLBNY to Accept Paycheck Protection Program Loans as Eligible Collateral

04/01/2020

Report from the President: Stability in a Crisis - Our Cooperative Responds to the Pandemic

03/13/2020

Report from the President: Novel Coronavirus Update

03/09/2020

Report from the President: Closing the Books on a Strong 2019

02/20/2020

Report from the President: The FHLBNY Declares a 6.35% Dividend for the Fourth Quarter of 2019

02/04/2020

Report from the President: United by Our Mission

01/06/2020

Report from the President: A Reliable Partner for a New Decade

12/03/2019

Report from the President: Positioned to Meet Your Liquidity Needs; FHLBNY Board Update; Making an Impact

11/21/2019

Report from the President: The FHLBNY Declares a 6.35% Dividend for the Third Quarter of 2019

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Report from the President: The FHLBNY Announces 2019 Affordable Housing Program Grants; A Better FHLBNY.com; FHFA Provides LIBOR Transition Guidance; FHLBNY Board Elections Underway

09/05/2019

Report from the President: A Market Milestone; A Stable Outlook; Funding Dreams; Promoting Partnerships; Building Relationships; Paul Héroux, FHLBNY Chief Bank Operations Officer, to Retire; 2019 FHLBNY Director Election Update; Looking Ahead

08/15/2019

Dividend Announcement 2Q19: The FHLBNY Declares a 6.35% Dividend for the Second Quarter of 2019

07/02/2019

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06/03/2019

Report from the President: Jersey City Welcomes FHLBNY Board; 2019 FHLBNY Director Election Update

05/16/2019

Dividend Announcement 1Q19: The FHLBNY Declares a 6.35% Dividend for the First Quarter of 2019

04/02/2019

Report from the President: Reflecting on a Record Year for the Federal Home Loan Bank System; FHLBNY 2019 Member Symposium

03/04/2019

Report from the President: A Year of Strong Performance; FHLBNY Announces Fourth Quarter 2018 Dividend; 50th Round of Affordable Housing Program Opens

02/13/2019

Dividend Announcement 4Q18: The FHLBNY Declares a 6.90% Dividend for the Fourth Quarter of 2018

02/04/2019

Report from the President: Engaging Members, Enhancing Value

01/03/2019

Report from the President: A Strong Year, A Strategy for Success

12/03/2018

Report from the President: Developing a Market for Our Members; A Record Round; FHLBNY Board Update

11/15/2018

Dividend Announcement 3Q18: The FHLBNY Declares a 6.90% Dividend for the Third Quarter of 2018

10/09/2018

Report from the President: A Proven Partner; Balance Sheet Support; Board Election Update

09/05/2018

Report from the President: A Critical Role; Strong Performance, Positioned to Help

08/16/2018

Dividend Announcement 2Q18: The FHLBNY Declares a 6.75% Dividend for the Second Quarter of 2018

07/30/2018

Member Advantage: Looking Back While Looking Forward

05/24/2018

Dividend Announcement 1Q18: The FHLBNY Declares a 6.50% Dividend for the First Quarter of 2018

04/24/2018

Member Advantage: Disaster Relief Program Grants Introduced

03/02/2018

Report from the President: Closing the Chapter on a Record 2017; FHLBNY Announces Fourth Quarter 2017 Dividend; FHLBNY Increases 2017 AHP Round Awards

02/15/2018

Dividend Announcement 4Q17: The FHLBNY Declares a 6.50% Dividend for the Fourth Quarter of 2017;

02/01/2018

Report from the President: Leading Our Franchise Forward; A Record 2017; NJBankers Economic Leadership Forum

01/16/2018

Member Advantage: A Strong Partner in the New Year

11/16/2017

Dividend Announcement 3Q17: The FHLBNY Declares a 6.00% Dividend for the Third Quarter of 2017;

09/05/2017

Report from the President: The Importance of Dependability; Engaging Our Membership;

08/17/2017

Dividend Announcement 2Q17: The FHLBNY Declares a 5.50% Dividend for the Second Quarter of 2017;

08/01/2017

At the Bank: FHLBNY Announces Second Quarter Operating Highlights; Continued Focus on Increasing the Value of Membership

07/18/2017

Member Advantage: Our Board serves a key function not only for our franchise, but also for our members: they are your representatives in our cooperative

06/01/2017

At the Bank: Confirming Our Strength; FHLBNY Declares First Quarter 2017 Dividend; FHLBNY Opens New Headquarters; AHP Applications Due June 9th

05/17/2017

Dividend Announcement 1Q17: The FHLBNY Declares a 5.00% Dividend for the First Quarter of 2017;

05/05/2017

At the Bank: Nationwide Dependability; FHLBNY Announces First Quarter Operating Highlights; AHP Grant Application Window Now Open

04/13/2017

The Reach of Our Housing Mission: A Reliable Partner for the Communities We All Serve; FDIC Publishes Federal Home Loan Bank Product Guide

03/01/2017

At the Bank: A Strong Year for Our Cooperative and Our System; FHLBNY Announces Fourth Quarter 2016 Dividend; FHLBNY Names Chief Risk Officer

02/16/2017

Dividend Announcement: FHLBNY Declares a 5.65% Dividend for the Fourth Quarter of 2016

02/01/2017

At the Bank: Positioned to Thrive in 2017; Mourning FHLBNY Director Caren Franzini

01/04/2017

Member Advantage: To say that 2016 was an “interesting” year would be an understatement

12/01/2016

At the Bank: FHLBNY Awards 2016 AHP Grants; FHLBNY Announces Third Quarter Dividend

11/17/2016

Dividend Announcement: FHLBNY Declares a 5.00% Dividend for the Third Quarter of 2016

11/01/2016

At the Bank: A Sturdy Strategic Partner

10/11/2016

Member Advantage: Last month, S&P Global Ratings issued a report on the Federal Home Loan Bank System

09/06/2016

At the Bank: A Wide Range of Products for Our Members

08/18/2016

Dividend Announcement: FHLBNY Declares a 4.75% Dividend for the Second Quarter of 2016

08/03/2016

Member Advantage: On May 6, Moody’s Investors Service issued credit opinions on both the FHLBNY and the Federal Home Loan Bank System.

05/19/2016

Dividend Announcement: FHLBNY Declares a 4.50% Dividend for the First Quarter of 2016

05/03/2016

At the Bank: A Stable Support System; FHLBNY Announces First Quarter Operating Highlights; AHP Grant Application Window to Open in Late May

03/28/2016

Member Advantage: Our mission is to advance housing opportunity and local community development by supporting members in serving their markets

02/18/2016

Dividend Announcement: FHLBNY Declares a 4.65% Dividend for the Fourth Quarter of 2015

02/04/2016

At the Bank: FHFA Membership Rule Strengthens System

01/12/2016

At the Bank: Focused On Enhancing Member Value; Michael M. Horn Reelected Board Chair

12/03/2015

Member Advantage: Consider the many ways in which you can leverage your relationship with the FHLBNY

11/19/2015

Dividend Announcement: FHLBNY Declares a 4.10% Dividend for the Third Quarter of 2015

11/02/2015

At the Bank: The Cornerstones of Our Franchise; FHLBNY Announces Third Quarter Results; Board of Director Elections Underway

10/01/2015

At the Bank: A Cooperative Partner for the Region; Board of Director Elections Underway

09/03/2015

At the Bank: A Stable Partner

08/20/2015

Dividend Announcement: FHLBNY Declares a 4.10% Dividend for the Second Quarter of 2015

08/03/2015

At the Bank: A Solid Foundation, and Well-Positioned for the Future

06/01/2015

At the Bank: Consistency and Reliability; On-Balance Sheet Support; Off-Balance Sheet Support; Community Support; Lehman Brothers Files Suit; An 11-Member System

05/21/2015

Dividend Announcement: FHLBNY Declares a 4.10% Dividend for the First Quarter of 2015

05/04/2015

At the Bank: A Solid Start for the FHLBNY; A Solid Start for the System; Consistent Performance, Stable Partnership

04/01/2015

At the Bank: A Reliable System That Works; A New Look, the Same Purpose

03/03/2015

At the Bank: A Strong 2014 and a Trusted Partner; Des Moines and Seattle Members Approve Merger; In Washington

02/19/2015

Dividend Announcement: FHLBNY Declares a 4.60% Dividend for the Fourth Quarter of 2014

02/04/2015

At the Bank: Challenges and Opportunities; FHLBNY Announces AHP Awards; In Washington

01/06/2015

At the Bank: Stability Amid Change; In Washington; FHFA Approves Federal Home Loan Bank Merger Application

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