FHLBank Pittsburgh Announces First Quarter 2022 Financial Results

PITTSBURGH–(BUSINESS WIRE)–The Federal Home Loan Bank of Pittsburgh (FHLBank) announced today unaudited financial results for first quarter of 2022. FHLBank recorded net income of $18.7 million for the first quarter, and the Board of Directors declared dividends of 5.25% annualized on activity stock and 1.25% annualized on membership stock. Dividends are payable to stockholders on April 29, 2022.

“The organization is strong, and during a continued period of market uncertainty has provided meaningful returns to our shareholders,” said Winthrop Watson, President and Chief Executive Officer. “Advance demand has also increased slightly during the quarter, and members have had sustained engagement with the Bank’s other credit and community products.”

Highlights for first quarter of 2022 include:

  • Net income of $18.7 million
  • Net interest income of $44.1 million
  • Advances at $16.3 billion
  • Mortgage loans held for portfolio, net at $4.7 billion
  • Letters of credit at $18.8 billion
  • Retained earnings at $1.4 billion

Operating Results

FHLBank’s net income totaled $18.7 million for the first quarter of 2022, compared to $38.1 million for the first quarter of 2021. First quarter 2022 performance allowed FHLBank to set aside $2.1 million for affordable housing programs. The $19.4 million decrease in net income was driven primarily by the following:

  • Net interest income was $44.1 million for the first quarter of 2022, a decline of $13.9 million from $58.0 million during the same prior-year period.

    • Interest income was $94.4 million for first quarter of 2022, compared to $124.6 million in the same prior-year period. This decrease was the result of lower average advances. The increase in short term interest rates occurred late in the first quarter, which had minimal impact to FHLBank in the first quarter.
    • Interest income also included net prepayment fees on advances of $0.6 million for the first quarter of 2022, compared to $7.8 million in the same prior-year period.
    • Interest expense was $50.3 million for first quarter of 2022, compared to $66.6 million in the same prior-year period. This decrease was the result of lower average consolidated obligations.
  • Other noninterest income netted to $0 for the first quarter of 2022 compared to $9.4 million in the same prior-year period. This $9.4 million decrease was due primarily to valuation changes in FHLBank’s derivative and trading security portfolios as a result of market volatility.
  • Other expense was $22.3 million for the first quarter of 2022 compared to $26.0 million in the same period in prior-year, a decrease of $3.7 million. FHLBank made a $2.8 million voluntary contribution to its defined benefit pension plan in the first quarter of 2021, but made no such contribution in the first quarter of 2022.

Balance Sheet Highlights

At March 31, 2022, total assets were $39.9 billion, compared with $37.7 billion at Dec. 31, 2021. The increase was primarily due to an increase in advances, which totaled $16.3 billion at March 31, 2022, compared to $14.1 billion at year-end 2021. Although advance levels remained low as a result of liquidity in the marketplace, there was an increase driven by member demand. It is not uncommon for the Bank to experience variances in the overall advance portfolio driven primarily by changes in member needs.

Total capital at March 31, 2022, was $2.8 billion, compared to $2.7 billion at Dec. 31, 2021. Retained earnings at March 31, 2022, was $1.4 billion, relatively unchanged from year-end 2021. Retained earnings at March 31, 2022, and Dec. 31, 2021, included $457.4 million of restricted retained earnings. At March 31, 2022, FHLBank had total regulatory capital of $2.7 billion and remained in compliance with all regulatory capital requirements.

The Board of Directors declared a dividend on subclass B2 (activity) stock equal to an annual yield of 5.25% and a dividend on subclass B1 (membership) stock equal to an annual yield of 1.25%. These dividends will be calculated on stockholders’ average balances during the period Jan. 1, 2022, to March 31, 2022, and credited to stockholders’ accounts on April 29, 2022.

The dividend rates demonstrate that FHLBank continues to return value to its members. We will continue to assess the potential impact of the market and business conditions on FHLBank’s performance and future dividends. Those conditions can be unpredictable, and their impact on the FHLBank’s results of operations and financial condition may result in the potential for lower dividend levels.

Detailed financial information regarding first quarter 2022 results will be available in FHLBank’s Quarterly Report on Form 10-Q, which FHLBank anticipates filing no later than May 13, 2022.

About FHLBank Pittsburgh

FHLBank Pittsburgh provides reliable funding and liquidity to its member financial institutions, which include commercial and savings banks, community development financial institutions, credit unions and insurance companies in Delaware, Pennsylvania and West Virginia. FHLBank products and resources help support community lending, housing and economic development. As one of 11 Federal Home Loan Banks established by Congress, FHLBank has been an integral and reliable part of the financial system since 1932. Learn more by visiting www.fhlb-pgh.com.

This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain and involve risk.

Actual performance or events may differ materially from that expected or implied in forward-looking statements because of many factors. Such factors may include, but are not limited to, economic and market conditions including but not limited to real estate, credit and mortgage markets; volatility of market prices, rates and indices related to financial instruments; including but not limited to, the discontinuance of the London Interbank Offered Rate (LIBOR) and the related effect on FHLBank’s LIBOR-based financial products, investments and contracts; the occurrence of man-made or natural disasters, endemics, global pandemics, conflicts or terrorist attacks, or other geopolitical events; political, legislative, regulatory, litigation, or judicial events or actions, including those relating to environmental, social, and governance matters; risks related to mortgage-backed securities (MBS); changes in the assumptions used to estimate credit losses; changes in FHLBank’s capital structure; changes in FHLBank’s capital requirements; changes in expectations regarding FHLBank’s payment of dividends; membership changes; changes in the demand by FHLBank members for FHLBank advances; an increase in advance prepayments; competitive forces, including the availability of other sources of funding for FHLBank members; changes in investor demand for consolidated obligations and/or the terms of interest rate exchange agreements and similar agreements; changes in the Federal Home Loan Bank System’s debt rating or FHLBank’s rating; the ability of FHLBank to introduce new products and services to meet market demand and to manage successfully the risks associated with new products and services; the ability of each of the other FHLBanks to repay the principal and interest on consolidated obligation for which it is the primary obligor and with respect to which FHLBank has joint and several liability; applicable FHLBank policy requirements for retained earnings and the ratio of the market value of equity to par value of capital stock; FHLBank’s ability to maintain adequate capital levels (including meeting applicable regulatory capital requirements); business and capital plan adjustments and amendments; technology and cyber-security risks; and timing and volume of market activity. Additional risks that might cause FHLBank’s results to differ from these forward-looking statements are provided in detail in FHLBank’s filings with the SEC, which are available at www.sec.gov. Forward-looking statements speak only as of the date made and FHLBank has no obligation, and does not undertake publicly, to update, revise or correct any forward-looking statement for any reason.

“Mortgage Partnership Finance” is a registered trademark of the Federal Home Loan Bank of Chicago.

Unaudited Condensed Statements of Condition and Income

(in millions)

 

Condensed Statement of Condition

 

March 31, 2022

 

December 31, 2021

ASSETS:

 

 

 

 

Cash and due from banks

 

$

721.1

 

$

428.2

Investments

 

 

17,835.4

 

 

18,097.9

Advances

 

 

16,292.0

 

 

14,124.4

Mortgage loans held for portfolio, net

 

 

4,687.0

 

 

4,676.2

All other assets

 

 

385.8

 

 

324.6

Total assets

 

$

39,921.3

 

$

37,651.3

 

 

 

 

 

LIABILITIES:

 

 

 

 

Consolidated obligations

 

$

35,981.7

 

$

33,599.3

All other liabilities

 

 

1,183.0

 

 

1,316.3

Total liabilities

 

 

37,164.7

 

 

34,915.6

 

 

 

 

 

CAPITAL:

 

 

 

 

Capital stock

 

$

1,320.5

 

$

1,227.1

Retained earnings

 

 

1,405.2

 

 

1,398.4

Accumulated other comprehensive income

 

 

30.9

 

 

110.2

Total capital

 

 

2,756.6

 

 

2,735.7

Total liabilities and capital

 

$

39,921.3

 

$

37,651.3

 

 

For the three months

ended March 31,

Condensed Statement of Income

 

2022

 

2021

Total interest income

 

$

94.4

 

 

$

124.6

 

Total interest expense

 

 

50.3

 

 

 

66.6

 

Net interest income

 

 

44.1

 

 

 

58.0

 

 

 

 

 

 

Provision (reversal) for credit losses

 

 

1.0

 

 

 

(1.1

)

Gains (losses) on investments

 

 

(13.5

)

 

 

(10.9

)

Gains (losses) on derivatives and hedging

 

 

7.5

 

 

 

13.7

 

All other income

 

 

6.0

 

 

 

6.6

 

All other expense

 

 

22.3

 

 

 

26.0

 

Income before assessments

 

 

20.8

 

 

 

42.5

 

 

 

 

 

 

AHP assessment

 

 

2.1

 

 

 

4.4

 

Net income

 

$

18.7

 

 

$

38.1

 

 

Contacts

Eric M. Slomer, FHLBank Pittsburgh, 412-288-7694, [email protected]

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