Federal Home Loan Bank Of San Francisco 10-K Annual Report March 2022

SAN FRANCISCO, February 16, 2022 — The Federal Home Loan Bank of San Francisco (Bank) today announced its 2021 operating results. Net income for 2021 was $287 million, compared with net income of $335 million for 2020. Net income for the fourth quarter of 2021 was $67 million, compared with net income of $94 million for the fourth quarter of 2020.

Net income of $287 million in 2021 declined $48 million relative to 2020 net income, primarily reflecting a reduction of $109 million in other income/(loss) that was partially offset by an improvement in credit losses of $32 million and an increase in net interest income of $17 million.

The $109 million reduction in other income/(loss) for 2021 was primarily a result of the Bank's receipt of disgorgement proceeds in connection with a Securities and Exchange Commission enforcement action, in the amount of $85 million, in the third quarter of 2020, and an increase in net fair value losses of $22 million associated with derivatives and financial instruments carried at fair value.

The $17 million increase in net interest income for 2021 primarily reflected lower funding costs, an improvement of $46 million in retrospective adjustment of the effective yields on mortgage loans and related delivery commitments, and an increase of $30 million in net gains on designated fair value hedges. These increases in net interest income were partially offset by a decline in average interest-earning assets. Additionally, the Bank recorded a reversal of credit losses of $6 million for 2021, primarily associated with certain private-label residential mortgage-backed securities (PLRMBS) classified as available-for-sale (AFS), which largely resulted from improved credit performance and a more optimistic economic outlook. This reversal of credit losses for 2021 compares with a provision for credit losses of $26 million for 2020 associated with certain PLRMBS classified as AFS, which primarily resulted from a significant decline in fair values in the first quarter of 2020.

For the fourth quarter of 2021, net income was $67 million, a decrease of $27 million relative to the prior year period. The decrease primarily reflected a decrease in net interest income of $48 million, which was mainly driven by a decline in average interest-earning assets and a decrease of $10 million in net gains on designated fair value hedges. These reductions in net income were partially offset by a $20 million improvement in other income/(loss), which primarily reflected a decrease in net fair value losses of $19 million associated with derivatives and financial instruments carried at fair value.

At December 31, 2021, total assets were $54.1 billion, a decrease of $14.5 billion from $68.6 billion at December 31, 2020. Advances decreased by $14.0 billion, to $17.0 billion at December 31, 2021, from $31.0 billion at December 31, 2020, as demand for advances remained muted in response to substantial market liquidity resulting from the ongoing economic and financial market impacts of the COVID-19 pandemic, including government intervention. In addition, mortgage loans held for portfolio decreased by $0.9 billion, to $1.0 billion at December 31, 2021, from $1.9 billion at December 31, 2020, because the Bank ceased purchasing new mortgage loans for its own portfolio on March 31, 2021. These decreases to total assets were partially offset by an increase in total investments of $0.6 billion, to $35.8 billion at December 31, 2021, from $35.2 billion at December 31, 2020. The increase in investments primarily reflected an increase in securities purchased under agreements to resell of $8.3 billion and an increase in Federal funds sold of $3.5 billion, which were partially offset by a reduction in U.S. Treasury securities of $8.5 billion as the Bank continued to manage its liquidity. A decrease of $2.8 billion in mortgage-backed securities (MBS) also partially offset the other increases in investments balances.

Accumulated other comprehensive income increased by $101 million during 2021, to $331 million at December 31, 2021, from $230 million at December 31, 2020, primarily reflecting higher fair values of MBS classified as AFS.

As of December 31, 2021, the Bank complied with all of its regulatory capital requirements. The Bank’s total regulatory capital ratio was 10.9%, exceeding the 4.0% requirement. The Bank had $5.9 billion in permanent capital, exceeding its risk-based capital requirement of $1.1 billion. Total retained earnings as of December 31, 2021, were $3.8 billion, compared with $3.7 billion at December 31, 2020.

The following information was filed by Federal Home Loan Bank Of San Francisco on Thursday, February 17, 2022 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-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Federal Home Loan Bank Of San Francisco provided additional information to their SEC Filing as exhibits

Exhibit 3.2: Bylaws Of The Federal Home Loan Bank Of San Francisco

Exhibit 4.1: Description Of Registered Securities

Exhibit 10.1: Summary Sheet: Terms Of Employment For Named Executive Officers For 2022

Exhibit 10.10: 2022 Board Of Directors Compensation And Expense Reimbursement Policy

Exhibit 10.11: Executive Incentive Plan And Appendices, As Amended

Exhibit 31.1: Certification Of The President And Ceo Section 302

Exhibit 31.2: Certification Of The Cfo Section 302

Exhibit 32.1: Certification Of The President And Ceo Section 906

Exhibit 32.2: Certification Of The Cfo Section 906

Exhibit 99.1: Audit Committee Report

CIK: 1316944
Form Type: 10-K Annual Report
Accession Number: 0001316944-22-000024
Submitted to the SEC: Fri Mar 04 2022 7:44:29 AM EST
Accepted by the SEC: Fri Mar 04 2022
Period: Friday, December 31, 2021
Industry: Federal And Federally Sponsored Credit Agencies

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Federal Home Loan Bank Of San Francisco (1316944) SEC Filing 10-K Annual Report for the fiscal year ending Friday, December 31, 2021

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