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Business Wire
4 days ago
- Business
- Business Wire
FHLBank Pittsburgh Announces Second Quarter 2025 Operating Highlights
PITTSBURGH--(BUSINESS WIRE)--The Federal Home Loan Bank of Pittsburgh (FHLBank) announced today unaudited financial results for the second quarter and six months ended June 30, 2025. Financial Highlights: Second quarter net income of $111.7 million Second quarter net interest income of $167.8 million Declared a second quarter dividend on activity stock at 9.50% annualized Declared a second quarter dividend on membership stock at 4.85% annualized Credit Product Balances: Advances at $52.5 billion Mortgage loans held for portfolio, net at $5.1 billion Standby letters of credit at $28.1 billion Community Product Assessment and Contributions: Statutory Affordable Housing Program (AHP) second quarter assessment of $12.5 million for use in 2026 Second quarter voluntary contributions of $10.5 million to community investment products and a supplemental voluntary contribution to AHP of $1.3 million Statements of Income FHLBank's net income totaled $111.7 million for the second quarter of 2025, compared to $149.2 million for the second quarter of 2024. The $37.5 million decrease in net income was driven primarily by the following: Net interest income was $167.8 million for the second quarter of 2025, a decrease of $29.3 million from $197.1 million during the same prior-year period. Interest income was $1,115.8 million for the second quarter of 2025, compared to $1,516.1 million in the same prior-year period. This decrease was driven by lower short-term interest rates and lower average advances. Interest expense was $948.0 million for the second quarter of 2025, compared to $1,319.0 million in the same prior-year period. This decrease was the result of lower short-term interest rates and lower average consolidated obligations. Noninterest income (loss) was $1.5 million for the second quarter of 2025, compared to $10.5 million in the same prior-year period. This $9.0 million decrease was due primarily to valuation changes in FHLBank's derivative and trading securities portfolios resulting from interest rate volatility. Other expense was $32.6 million for the second quarter of 2025, compared to $30.9 million in the same prior-year period, an increase of $1.7 million. This increase was primarily driven by higher compensation and benefits, including higher non-qualified benefit plan expense. Voluntary contributions to community investment products were $11.8 million, including a supplemental voluntary contribution to AHP of $1.3 million, for the second quarter of 2025, an increase of $1.6 million compared to $10.2 million in the same prior-year period. FHLBank will continue to make voluntary contributions of at least 5% of the prior year's pre-assessment net income to voluntary community investment products, a commitment target of $35.3 million. In addition, FHLBank will continue to make a supplemental voluntary contribution to AHP to increase the pool of available AHP funds to the amount that would have been statutorily required, absent FHLBank's voluntary contributions. Statutory AHP assessments were $12.5 million as a result of second quarter 2025 earnings, compared to $16.6 million in the same prior-year period. FHLBank's net income totaled $231.8 million for the six months ended June 30, 2025, compared to $303.2 million for the same prior-year period. The $71.4 million decrease in net income was driven primarily by the following: Net interest income was $340.0 million for the six months ended June 30, 2025, a decrease of $52.8 million from $392.8 million during the same prior-year period. Interest income was $2,313.9 million for the six months ended June 30, 2025, compared to $3,055.2 million in the same prior-year period. This decrease was driven by lower short-term interest rates and lower average advances. Interest expense was $1,973.9 million for the six months ended June 30, 2025, compared to $2,662.4 million in the same prior-year period. This decrease was the result of lower short-term interest rates and lower average consolidated obligations. Noninterest income was $1.4 million for the six months ended June 30, 2025, compared to $25.4 million in the same prior-year period. This $24.0 million decrease was due primarily to valuation changes in FHLBank's derivative and trading securities portfolios resulting from interest rate volatility. Other expense was $63.5 million for the six months ended June 30, 2025, compared to $62.1 million in the same prior-year period, an increase of $1.4 million. This increase was primarily driven by higher compensation and benefits, including non-qualified benefit plan expense. Voluntary contributions to community investment products were $18.8 million, including a supplemental voluntary contribution to AHP of $2.0 million, for the six months ended June 30, 2025, an increase of $1.7 million compared to $17.1 million in the same prior-year period. FHLBank will continue to make voluntary contributions of at least 5% of the prior year's pre-assessment net income to voluntary community investment products, a commitment target of $35.3 million. In addition, FHLBank will continue to make a supplemental voluntary contribution to AHP to increase the pool of available AHP funds to the amount that would have been statutorily required, absent FHLBank's voluntary contributions. Statutory AHP assessments were $25.8 million based on earnings for the six months ended June 30, 2025, compared to $33.8 million in the same prior-year period. Statements of Condition At June 30, 2025, total assets were $89.3 billion, compared with $106.9 billion at December 31, 2024. The decrease was primarily due to a decline in advances, which totaled $52.5 billion at June 30, 2025, compared to $69.9 billion at year-end 2024. Demand for advances continues to be driven by members' liquidity management practices, which are influenced by their loan demand, deposit balances and investment activities. Although advances decreased, it is not uncommon for fluctuations in advances to be driven by changes in member needs. Total capital at June 30, 2025, was $5.1 billion, compared to $5.6 billion at December 31, 2024, including retained earnings of $2.2 billion at June 30, 2025, compared to $2.1 billion at December 31, 2024. At June 30, 2025, FHLBank remained in compliance with all regulatory capital requirements. Quarterly Dividends The Board of Directors declared a dividend on subclass B1 (membership) stock equal to an annual yield of 4.85% and a dividend on subclass B2 (activity) stock equal to an annual yield of 9.50%. These dividends will be calculated on stockholders' average balances during the period April 1, 2025, to June 30, 2025, and be credited to stockholders' accounts on July 25, 2025. Looking forward, market, geopolitical, and business conditions 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 six months ended June 30, 2025, financial results will be available in FHLBank's Quarterly Report on Form 10-Q, which FHLBank anticipates filing no later than August 12, 2025. 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 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 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. For the three months ended June 30, For the six months ended June 30, Condensed Statement of Income 2025 2024 2025 2024 Total interest income $ 1,115.8 $ 1,516.1 $ 2,313.9 $ 3,055.2 Total interest expense 948.0 1,319.0 1,973.9 2,662.4 Net interest income 167.8 197.1 340.0 392.8 Provision (reversal) for credit losses 0.7 0.7 1.5 2.0 Gains (losses) on investments 0.7 — 3.1 (1.0 ) Gains (losses) on derivatives and hedging (7.7 ) 1.5 (19.6 ) 7.3 Other income 8.5 9.0 17.9 19.1 Other expense 32.6 30.9 63.5 62.1 Voluntary contributions 11.8 10.2 18.8 17.1 Income before assessments 124.2 165.8 257.6 337.0 AHP assessment 12.5 16.6 25.8 33.8 Net income $ 111.7 $ 149.2 $ 231.8 $ 303.2 Expand
Business Wire
5 days ago
- Business
- Business Wire
FHLBank Chicago Announces Q2 2025 Financial Highlights
CHICAGO--(BUSINESS WIRE)--The Federal Home Loan Bank of Chicago (FHLBank Chicago) today announced its preliminary and unaudited financial results for the second quarter of 2025. 'Our preliminary second quarter results reflect the continued strength of our cooperative and our ability to provide reliable liquidity to our members,' said Michael Ericson, President and Chief Executive Officer of FHLBank Chicago. 'Our preliminary second quarter results reflect the continued strength of our cooperative and our ability to provide reliable liquidity to our members,' said Michael Ericson, President and Chief Executive Officer of FHLBank Chicago. 'As market conditions evolve, we remain focused on delivering value through safe and sound financial management and strategic investments that support our members and the communities we serve.' Second Quarter 2025 Financial Highlights Net income declined to $151 million, compared to $158 million for the second quarter of 2024. The decline was primarily driven by higher noninterest expense, largely due to increased contributions to support members' housing and community development needs. This was partially offset by an increase in noninterest income from gains on trading securities. Total assets rose to $145.3 billion, up from $129.1 billion at December 31, 2024. The growth was mainly due to increased volume in advances and liquidity. Advances outstanding increased to $62.7 billion, compared to $55.8 billion at December 31, 2024, primarily attributable to increased borrowings from insurance company and depository members. Mortgage loans held for portfolio through the Mortgage Partnership Finance ® (MPF ®) Program increased to $13.9 billion, compared to $13.3 billion at December 31, 2024, primarily attributable to new acquisition volume that outpaced paydown activity. Housing and Community Development Statutory Affordable Housing Program (AHP) Assessments: FHLBank Chicago commits 10% of its income before assessments to support the affordable housing and community development needs of communities served by its members as required by regulation. As of June 30, 2025, FHLBank Chicago accrued $34 million to its AHP pool of funds. Voluntary Housing and Community Development Contributions: In addition to its statutory AHP assessments, the Board of Directors may elect to make voluntary contributions to the AHP or other housing and community investment activities to increase funding available to our members. During the first half of 2025, FHLBank Chicago contributed $8 million toward community investment grants and $25 million in subsidies supporting its Community Advances and loans. 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, 2025, is expected to be filed with the Securities and Exchange Commission (SEC) next month. Condensed Statements of Income (Dollars in millions) (Preliminary and Unaudited) Three months ended June 30, Six months ended June 30, 2025 2024 Change 2025 2024 Change Interest income $ 1,592 $ 1,758 (9 )% $ 3,080 $ 3,533 (13 )% Interest expense (1,355 ) (1,522 ) (11 )% (2,607 ) (3,050 ) (15 )% Net interest income 237 236 — % 473 483 (2 )% Reversal of (provision for) credit losses (3 ) (1 ) 200 % (2 ) (1 ) 100 % Net interest income after reversal of (provision for) credit losses 234 235 — % 471 482 (2 )% Noninterest income (loss) 22 17 29 % 41 41 — % Noninterest expense (89 ) (76 ) 17 % (169 ) (145 ) 17 % Income before assessments 167 176 (5 )% 343 378 (9 )% Affordable Housing Program assessment (16 ) (18 ) (11 )% (34 ) (38 ) (11 )% Net income $ 151 $ 158 (4 )% $ 309 $ 340 (9 )% Average interest-earning assets $ 136,345 $ 125,956 8 % $ 131,701 $ 126,808 4 % Net interest income yield on average interest-earning assets 0.70 % 0.75 % (0.05 )% 0.72 % 0.76 % (0.04 )% Expand 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 '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 that affect FHLBank Chicago, its members, or counterparties; instability in the credit and debt markets; economic conditions (including banking industry developments and liquidity in the financial system); prolonged inflation or recession; maintaining compliance with regulatory and statutory requirements (including relating to dividend payments and retained earnings); any decrease in levels of business which may negatively impact results of operations or financial condition; the reliability of projections, assumptions, and models on future financial performance and condition; political, national and world events; changes in demand for advances or consolidated obligations; membership changes; changes in mortgage interest rates and prepayment speeds on mortgage assets; FHLBank Chicago's ability to execute its business model and pay future dividends (including enhanced dividends on activity stock); FHLBank Chicago's ability to protect the security of information systems and manage any failures, interruptions, or breaches in its technology, controls or operating processes; 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.
