The Federal Home Loan Bank of Pittsburgh (FHLBank) announced
today unaudited financial results for the second quarter and six
months ended June 30, 2024.
Financial Highlights:
- Second quarter net income of $149.2 million
- Second quarter net interest income of $197.1 million
- Declared a second quarter dividend on activity stock at 9.0%
annualized
- Declared a second quarter dividend on membership stock at 5.6%
annualized
Credit Products Highlights:
- Advances at $72.9 billion
- Mortgage loans held for portfolio, net at $4.7 billion
- Letters of credit at $28.4 billion
Community Investment Products Highlights:
- Allocated $16.6 million to the Affordable Housing Program (AHP)
for use in 2025
- Voluntary contributions of $10.2 million to community
investment products
Statements of Income:
FHLBank’s net income totaled $149.2 million for the second
quarter of 2024, compared to $175.9 million for the second quarter
of 2023. The $26.7 million decrease in net income was driven
primarily by the following:
- Net interest income was $197.1 million for the second quarter
of 2024, a decrease of $3.0 million from $200.1 million during the
same prior-year period.
- Interest income was $1,516.1 million for the second quarter of
2024, compared to $1,556.3 million in the same prior-year period.
This decrease was driven by lower average advance balances which
were partially offset by higher earnings on mortgage-backed
securities (MBS) due to growth in the portfolio.
- Interest expense was $1,319.0 million for the second quarter of
2024, compared to $1,356.2 million in the same prior-year period.
This decrease was the result of lower average consolidated
obligations.
- Noninterest income was $10.5 million for the second quarter of
2024, compared to $23.7 million in the same prior-year period. This
$13.2 million decrease was due primarily to valuation changes in
FHLBank’s derivative and trading securities portfolios resulting
from market volatility, partially offset by higher letter of credit
fees earned.
- Other expense was $30.9 million for the second quarter of 2024,
compared to $27.5 million in the same prior-year period, an
increase of $3.4 million. This increase was primarily driven by
higher costs associated with technology and other strategic
initiatives and higher compensation and benefits from higher
headcount.
- Voluntary contributions were $10.2 million for the second
quarter of 2024, compared to none in the same prior-year period.
This increase was driven by the timing of the contributions to
voluntary community investment products and includes a voluntary
contribution to AHP of $1.1 million.
- Second quarter 2024 performance allowed FHLBank to allocate
$16.6 million to AHP.
FHLBank’s net income totaled $303.2 million for the six months
ended June 30, 2024, compared to $299.0 million for the same
prior-year period. The $4.2 million increase in net income was
driven primarily by the following:
- Net interest income was $392.8 million for the six months ended
June 30, 2024, an increase of $35.4 million from $357.4 million
during the same prior-year period
- Interest income was $3,055.2 million for the six months ended
June 30, 2024, compared to $2,795.2 million in the same prior-year
period. This increase was driven by higher short-term interest
rates and higher earnings on MBS due to growth in the
portfolio.
- Interest expense was $2,662.4 million for the six months ended
June 30, 2024, compared to $2,437.8 million in the same prior-year
period. This increase was the result of higher short-term interest
rates.
- Noninterest income was $25.4 million for the six months ended
June 30, 2024, compared to $30.8 million in the same prior-year
period. This $5.4 million decrease was due primarily to valuation
changes in FHLBank’s derivative and trading securities portfolios
resulting from market volatility, partially offset by higher letter
of credit fees earned.
- Other expense was $62.1 million for the six months ended June
30, 2024, compared to $53.6 million in the same prior-year period,
an increase of $8.5 million. This increase was primarily driven by
higher compensation and benefits from higher headcount, costs
associated with technology and other strategic initiatives, and
market value changes of deferred compensation agreements.
- Voluntary contributions were $17.1 million for the six months
ended June 30, 2024, compared to none in the same prior-year
period. This increase was driven by the timing of the contributions
to voluntary community investment products and includes a voluntary
contribution to AHP of $1.8 million.
- Performance for the six months ended June 30, 2024, allowed
FHLBank to allocate $33.8 million to AHP.
Statements of Condition
At June 30, 2024, total assets were $109.3 billion, compared
with $112.1 billion at December 31, 2023. The decrease was
primarily due to a decrease in advances, which totaled $72.9
billion at June 30, 2024, compared to $78.4 billion at year-end
2023. Member demand for advances continues to be primarily driven
by members’ liquidity management practices and sustained
competition for deposits in the higher short-term interest rate
environment. Although advance levels decreased, it is not uncommon
for FHLBank to experience fluctuations in the overall advance
portfolio driven primarily by changes in member needs.
Total capital at June 30, 2024, was $5.6 billion, compared to
$5.7 billion at December 31, 2023, including retained earnings of
$2.0 billion at June 30, 2024, compared to $1.8 billion at December
31, 2023. At June 30, 2024, FHLBank remained in compliance with all
regulatory capital requirements.
Dividends
The Board of Directors declared a dividend on subclass B1
(membership) stock equal to an annual yield of 5.6% and a dividend
on subclass B2 (activity) stock equal to an annual yield of 9.0%.
These dividends will be calculated on stockholders’ average
balances during the period April 1, 2024, to June 30, 2024, and be
credited to stockholders’ accounts on July 26, 2024.
Looking forward, market and business conditions, including
strategic initiatives, can impact FHLBank's overall performance, as
well as the levels of future dividends. FHLBank’s intent is to
continue to provide meaningful shareholder return; future dividend
rates may not correspond directly with the pace or direction of
interest rate changes.
Detailed financial information regarding second quarter and
first half of 2024 results will be available in FHLBank's Quarterly
Report on Form 10-Q, which FHLBank anticipates filing no later than
August 12, 2024.
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 FHLBank’s 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 investments and contracts; the occurrence of man-made or natural
disasters, endemics, global pandemics, climate change, conflicts or
terrorist attacks, or other geopolitical events; political events,
including 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; disruptions in the
capital markets; 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 Federal Home Loan Banks
to repay the principal and interest on consolidated obligations 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 cybersecurity 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
Securities and Exchange Commission, 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 or revise any forward-looking statement for any
reason.
Unaudited Condensed Statements
of Condition and Income
(in millions)
Condensed Statement of
Condition
June 30, 2024
December 31, 2023
ASSETS:
Cash and due from banks
$
13.8
$
11.5
Investments
30,746.3
28,004.2
Advances
72,874.3
78,431.5
Mortgage loans held for portfolio, net
4,745.9
4,697.8
All other assets
952.5
1,002.6
Total assets
$
109,332.8
$
112,147.6
LIABILITIES:
Consolidated obligations
$
101,899.2
$
104,484.6
All other liabilities
1,822.2
1,983.3
Total liabilities
103,721.4
106,467.9
CAPITAL:
Capital stock
$
3,669.5
$
3,920.5
Retained earnings
1,977.5
1,831.7
Accumulated other comprehensive income
(loss)
(35.6
)
(72.5
)
Total capital
5,611.4
5,679.7
Total liabilities and capital
$
109,332.8
$
112,147.6
For the three months ended
June 30,
For the six months ended June
30,
Condensed Statement of Income
2024
2023
2024
2023
Total interest income
$
1,516.1
$
1,556.3
$
3,055.2
$
2,795.2
Total interest expense
1,319.0
1,356.2
2,662.4
2,437.8
Net interest income
197.1
200.1
392.8
357.4
Provision for credit losses
0.7
0.8
2.0
2.2
Gains (losses) on investments
—
(1.5
)
(1.0
)
1.4
Gains (losses) on derivatives and
hedging
1.5
17.0
7.3
13.9
Other income
9.0
8.2
19.1
15.5
Other expense
30.9
27.5
62.1
53.6
Voluntary contributions
10.2
—
17.1
—
Income before assessments
165.8
195.5
337.0
332.4
AHP assessment
16.6
19.6
33.8
33.4
Net income
$
149.2
$
175.9
$
303.2
$
299.0
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240725996077/en/
Eric M. Slomer, FHLBank Pittsburgh, 412-288-7694,
eric.slomer@fhlb-pgh.com