Federal Home Loan Bank of San Francisco Announces Third Quarter 2018 Operating Results
SAN FRANCISCO, October 25, 2018 — The Federal Home Loan Bank of San Francisco today announced that its net income for the third quarter of 2018 was $102 million, compared with net income of $81 million for the third quarter of 2017.
The $21 million increase in net income relative to the prior-year period primarily reflected higher net interest income, resulting from a higher interest rate environment, and an increase in other income related to improvements in net fair value gains and losses associated with derivatives, hedged items, and financial instruments carried at fair value. In addition, there was a decrease in the expense associated with voluntary charitable contributions for the Quality Jobs Fund, from $10 million in the third quarter of 2017 to $5 million in the third quarter of 2018.
Total assets decreased $20.4 billion during the first nine months of 2018, to $103.0 billion at September 30, 2018, from $123.4 billion at December 31, 2017. Total advances decreased $8.0 billion, to $69.4 billion at September 30, 2018, from $77.4 billion at December 31, 2017. In addition, investments decreased $13.3 billion, to $30.3 billion at September 30, 2018, from $43.6 billion at December 31, 2017, primarily reflecting a decrease of $5.5 billion in securities purchased under agreements to resell and a decrease of $6.8 billion in Federal funds sold.
Accumulated other comprehensive income increased by $19 million during the first nine months of 2018, to $337 million at September 30, 2018, from $318 million at December 31, 2017, primarily as a result of improvement in the fair value of the Bank's private-label residential mortgage-backed securities classified as available-for-sale.
As of September 30, 2018, the Bank was in compliance with all of its regulatory capital requirements. The Bank’s total regulatory capital ratio was 6.3%, exceeding the 4.0% requirement. The Bank had $6.5 billion in permanent capital, exceeding its risk-based capital requirement of $2.0 billion. Total retained earnings as of September 30, 2018, were $3.4 billion.
Today, the Bank’s Board of Directors declared a quarterly cash dividend on the capital stock outstanding during the third quarter of 2018 at an annualized rate of 7.00%. The quarterly dividend rate is consistent with the Bank's dividend philosophy of endeavoring to pay a quarterly dividend at a rate between 5% and 7% annualized. The quarterly dividend will total $54 million, including $4 million in dividends on mandatorily redeemable capital stock that will be reflected as interest expense in the fourth quarter of 2018. The Bank expects to pay the dividend on November 13, 2018.
The following information was filed by Federal Home Loan Bank Of San Francisco on Friday, October 26, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.