Increases commitment to over $180 million for affordable housing and community development for 2024

The Federal Home Loan Bank of Chicago (FHLBank Chicago) today announced its preliminary and unaudited financial results for the second quarter of 2024. As of the second quarter, FHLBank Chicago increased its commitment to over $180 million for affordable housing and community development initiatives for 2024.

“We had a strong second quarter in providing our member financial institutions with reliable liquidity and funding to support the housing finance and economic development needs of their customers and communities that is especially critical in a tight credit market,” said Michael Ericson, president and chief executive officer of FHLBank Chicago. “We also continue to leverage our financial strength to support our members reinvesting back in their communities. By increasing our contributions to our community investment programs for 2024 this will further expand our impact.”

Growing Commitment to Housing and Community Development

FHLBank Chicago has allocated $88 million toward its annual Affordable Housing Program (AHP), representing a 17% increase over 2023 allocations. AHP grants support affordable housing projects and developments and provide downpayment and closing cost assistance to income-eligible borrowers. $19 million was disbursed to nearly 2,000 homebuyers through the first half of 2024 in partnership with 180 member financial institutions.

Applications for the Community First® Accelerate Grants for Small Business opened June 3, making available $19.5 million to support up to 1,300 small businesses, a significant increase compared to more than $4 million awarded in 2023.

Additionally, FHLBank Chicago offers Community Development, Housing and Small Business Advances at below market rates to help members fund affordable housing and economic development needs in their communities. The Community Small Business Advance subsidy increased to $18 million in support of zero percent financing, an 80% increase over 2023 amounts. Nearly $1 billion was funded in Community Advances through the first half of 2024 to support housing for more than 4,000 individuals and families, and more than 3,500 jobs.

In further support for investing in communities, FHLBank Chicago announced a Community Impact Advance three-year pilot program to provide $50 million in subsidies to discount the rate on advances up to 200 basis points. The goal is to directly support increased housing supply, job creation and enhanced community development activity.

Second Quarter 2024 Financial Highlights

  • Net income was $158 million, compared to $167 million for the second quarter of 2023, driven by decreased volume of advances in portfolio and an increase in noninterest expense which was primarily driven by increased contributions to housing and community development initiatives.
  • Total assets increased to $122.8 billion, compared to $118.4 billion at December 31, 2023, with the change primarily attributable to an increase in our liquidity portfolio.
  • Advances outstanding decreased to $60.7 billion, compared to $65.3 billion at December 31, 2023, primarily attributable to depository members experiencing less funding needs on their balance sheets along with reduced loan demand which resulted in paydowns.
  • Mortgage loans held for portfolio through the Mortgage Partnership Finance® Program increased to $12.4 billion, compared to $11.4 billion at December 31, 2023, primarily attributable to new acquisition volume that outpaced paydown activity.

For more financial details, please refer to the Condensed Statements of Income and Statements of Condition below. The Form 10-Q for the quarter ending June 30, 2024, is expected to be filed with the Securities and Exchange Commission (SEC) next month.

Condensed Statements of Condition

(Dollars in millions)

(Preliminary and Unaudited)

 

 

June 30, 2024

 

December 31, 2023

 

Change

Cash and due from banks, interest-bearing deposits, federal funds sold, and securities purchased under agreements to resell

 

$

20,032

 

$

14,472

 

 

38

%

Investment debt securities

 

 

28,169

 

 

26,405

 

 

7

%

Advances

 

 

60,708

 

 

65,306

 

 

(7

)%

MPF Loans held in portfolio, net of allowance for credit losses

 

 

12,381

 

 

11,410

 

 

9

%

Other

 

 

1,530

 

 

791

 

 

93

%

Assets

 

$

122,820

 

$

118,384

 

 

4

%

 

 

 

 

 

 

 

Consolidated obligation discount notes

 

$

42,852

 

$

28,109

 

 

52

%

Consolidated obligation bonds

 

 

69,493

 

 

80,389

 

 

(14

)%

Other

 

 

1,971

 

 

1,746

 

 

13

%

Liabilities

 

 

114,316

 

 

110,244

 

 

4

%

Capital stock

 

 

3,206

 

 

3,277

 

 

(2

)%

Retained earnings

 

 

5,173

 

 

4,979

 

 

4

%

Accumulated other comprehensive income (loss)

 

 

125

 

 

(116

)

 

208

%

Capital

 

 

8,504

 

 

8,140

 

 

4

%

Total liabilities and capital

 

$

122,820

 

$

118,384

 

 

4

%

 

 

 

 

 

 

 

Member standby letters of credit - off-balance sheet

 

$

16,029

 

$

12,601

 

 

27

%

Condensed Statements of Income

(Dollars in millions)

(Preliminary and Unaudited)

 

Three months ended June 30,

 

Six months ended June 30,

 

2024

 

2023

 

Change

 

2024

 

2023

 

Change

Interest income

$

1,758

 

 

$

1,903

 

 

(8

)%

 

$

3,533

 

 

$

3,485

 

 

1

%

Interest expense

 

(1,522

)

 

 

(1,649

)

 

(8

)%

 

 

(3,050

)

 

 

(3,009

)

 

1

%

Net interest income

 

236

 

 

 

254

 

 

(7

)%

 

 

483

 

 

 

476

 

 

1

%

Reversal of (provision for) credit losses

 

(1

)

 

 

—

 

 

—

%

 

 

(1

)

 

 

—

 

 

—

%

Net interest income after reversal of (provision for) credit losses

 

235

 

 

 

254

 

 

(7

)%

 

 

482

 

 

 

476

 

 

1

%

Noninterest income (loss)

 

17

 

 

 

—

 

 

—

%

 

 

41

 

 

 

(4

)

 

1,125

%

Noninterest expense

 

(76

)

 

 

(67

)

 

13

%

 

 

(145

)

 

 

(126

)

 

15

%

Income before assessments

 

176

 

 

 

187

 

 

(6

)%

 

 

378

 

 

 

346

 

 

9

%

Affordable Housing Program assessment

 

(18

)

 

 

(20

)

 

(10

)%

 

 

(38

)

 

 

(36

)

 

6

%

Net income

$

158

 

 

$

167

 

 

(5

)%

 

$

340

 

 

$

310

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

Average interest-earning assets

$

125,956

 

 

$

145,512

 

 

(13

)%

 

$

126,808

 

 

$

139,423

 

 

(9

)%

Net interest income yield on average interest-earning assets

 

0.75

%

 

 

0.70

%

 

0.05

%

 

 

0.76

%

 

 

0.68

%

 

0.08

%

About the Federal Home Loan Bank of Chicago

FHLBank Chicago is a regional bank in the Federal Home Loan Bank System. FHLBanks are government-sponsored enterprises created by Congress to ensure access to low-cost funding for their member financial institutions, with a focus on providing solutions that support the housing and community development needs of members’ customers. FHLBank Chicago is a self-capitalizing cooperative, owned by its Illinois and Wisconsin members, including commercial banks, credit unions, insurance companies, savings institutions and community development financial institutions. To learn more about FHLBank Chicago, please visit fhlbc.com.

“Community First”, “Mortgage Partnership Finance”, and “MPF” are registered trademarks of the Federal Home Loan Bank of Chicago.

Forward-Looking Information: This announcement uses forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than statements of historical fact, including statements with respect to beliefs, plans, objectives, projections, estimates, or predictions. These statements are based on FHLBank Chicago’s expectations as of the date hereof. The words “believe”, “estimate”, “expect”, “preliminary”, “continue”, “remain”, “commit”, and similar statements and their plural and negative forms are used to identify some, but not all, of such forward-looking statements. For example, statements about future dividends and expectations for financial commitments are forward-looking statements. FHLBank Chicago cautions that, by their nature, forward-looking statements involve risks and uncertainties, including, but not limited to: legislative and regulatory developments; instability in the credit and debt markets; economic conditions (including banking industry developments and liquidity in the financial system); changes in demand for advances or consolidated obligations; membership changes; the reliability of projections, assumptions, and models of future financial performance and condition; FHLBank Chicago’s ability to execute its business model and pay future dividends; FHLBank Chicago’s ability to protect the security of information systems and manage any failures, interruptions, or breaches; and the risk factors set forth in FHLBank Chicago’s periodic filings with the Securities and Exchange Commission (SEC), which are available through the SEC’s reporting website. FHLBank Chicago assumes no obligation to update any forward-looking statements made herein. In addition, the FHLBank Chicago reserves the right to change its business plan or plans for any programs for any reason, including but not limited to, legislative or regulatory changes, changes in membership or member usage of programs, or changes at the discretion of the board of directors. Accordingly, FHLBank Chicago cautions that actual results could differ materially from those expressed or implied in these forward-looking statements or could impact the extent to which a particular plan, objective, projection, estimate or prediction is realized. New factors may emerge, and it is not possible to predict the nature of each new factor, or assess its potential impact. Given these uncertainties, undue reliance should not be placed on forward-looking statements.

Casey Reidy, 312.565.5291 creidy@fhlbc.com