Federal Home Loan Bank Of Cincinnati 10-K Annual Report Thu Mar 18 2021

Cincinnati, Ohio – The Federal Home Loan Bank of Cincinnati (the FHLB) today released unaudited financial results for the year ended December 31, 2020.

Operating Results

▪Net income for 2020 was $276 million and return on average equity (ROE) was 5.78 percent. This compares to net income of $276 million and ROE of 5.65 percent for 2019. For the fourth quarter of 2020, net income was $40 million and ROE was 3.93 percent, compared to net income of $76 million and ROE of 6.64 percent for the same period of 2019.

▪The historically low interest rate environment in 2020 impacted results for both the fourth quarter and the full year. Low long-term interest rates resulted in a higher volume of mortgage refinance activity, which led to elevated levels of mortgage loan repayments and related premium amortization. Additionally, short-term interest rates declined sharply in early 2020 and continued at low levels for the remainder of the year, which lowered the earnings generated from investing the FHLB’s capital. The sharp decline in year-end Advance balances lowered earnings to a lesser extent given average Advances decreased only 10 percent compared to 2019, as the FHLB was a first responder in meeting its members' funding needs at the onset of the COVID-19 pandemic. Most of these Advances matured or prepaid by the end of 2020. Despite these declines, net income benefited from gains on the sale of interest rate swaptions during the first quarter of 2020 as well as higher prepayment fees on Advances in 2020.

Balance Sheet Highlights

▪Total assets at December 31, 2020 were $65.3 billion, a decrease of $28.2 billion (30 percent) from year-end 2019. The decrease in total assets was primarily driven by lower Advance balances. Advance principal balances decreased $22.3 billion (47 percent) from year-end 2019 primarily due to reduced borrowings by large-asset members as these members generally experienced an inflow of deposits on their balance sheets and increased access to other sources of liquidity in the financial markets.

▪Mission Asset Activity – comprising major activities with members including Advances, Letters of Credit (off-balance sheet), and the Mortgage Purchase Program – was $63.3 billion at December 31, 2020, a decrease of $12.1 billion (16 percent) from year-end 2019. The decrease in Mission Asset Activity was primarily driven by lower Advance balances as noted above, which was partially offset by a $12.6 billion increase in Letters of Credit balances. The increase in Letters of Credit was due in part to members using them to secure elevated levels of public unit deposits during the pandemic.

▪Total investments at December 31, 2020 were $27.0 billion, a decrease of $7.3 billion from year-end 2019. Total investments included $9.7 billion of mortgage-backed securities, which decreased $3.7

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The following information was filed by Federal Home Loan Bank Of Cincinnati on Tuesday, February 23, 2021 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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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

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

Exhibit 10.8: Material Contract

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32: Section 1350 Certification

Exhibit 99.1: Additional Exhibits

Exhibit 99.2: Additional Exhibits

CIK: 1326771
Form Type: 10-K Annual Report
Accession Number: 0001326771-21-000030
Submitted to the SEC: Thu Mar 18 2021 1:42:44 PM EST
Accepted by the SEC: Thu Mar 18 2021
Period: Thursday, December 31, 2020
Industry: Federal And Federally Sponsored Credit Agencies

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Federal Home Loan Bank Of Cincinnati (1326771) SEC Filing 10-K Annual report for the fiscal year ending Thursday, December 31, 2020

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