FOR IMMEDIATE RELEASE
CONTACT: Mark S. Zelermyer
FEDERAL HOME LOAN BANK OF BOSTON ANNOUNCES 2014
FOURTH QUARTER AND ANNUAL RESULTS AND DECLARES DIVIDEND
BOSTON - The Federal Home Loan Bank of Boston announced its preliminary, unaudited fourth quarter and annual financial results for 2014, reporting net income of $34.5 million for the quarter and $149.8 million for the year. The Bank expects to file its annual report with the Securities and Exchange Commission on Form 10-K for the year ending December 31, 2014, next month.
The Bank's board of directors also declared a dividend equal to an annual yield of 1.74 percent, the approximate daily average three-month LIBOR yield for the fourth quarter of 2014 plus 150 basis points. The dividend, based on average stock outstanding for the fourth quarter of 2014, will be paid on March 3, 2015. The board expects to follow this formula for declaring cash dividends through 2015, though a quarterly loss or a significant, adverse event or trend would cause a dividend to be suspended.
“Over the course of 2014, the Bank’s advances grew by $6 billion, or 22 percent,” said President and Chief Executive Officer Edward A. Hjerpe III. “Our strengthened balance sheet has led to a greater dividend for members and the recent rescission of the excess stock repurchase moratorium."
Fourth Quarter 2014 Operating Highlights
Net income for the quarter ending December 31, 2014, was $34.5 million, compared with net income of $85.3 million for the same period in 2013. These results led to a $4.0 million contribution to the Bank's Affordable Housing Program for the quarter. The Bank's fourth quarter 2014 net income was less than net income for the fourth quarter of 2013 primarily due to the $52.5 million decrease in litigation settlement income.
Net interest income after provision for credit losses for the quarter ending December 31, 2014, was $57.3 million, compared with $60.2 million for the fourth quarter of 2013. Contributing to the $2.8 million decrease in net interest income after provision for credit losses was a decrease in net prepayment fees from investments and advances of $1.1 million(1), from $5.9 million in the fourth quarter of 2013 to $4.9 million in the fourth quarter of 2014, as well as a 13 basis point narrowing of the spread between interest earned on assets and interest paid on liabilities (net interest spread), discussed in more detail below. Partially offsetting the narrowing of the Bank's net interest spread was an increase in average earning assets, which increased $12.2 billion from $40.3 billion for the fourth quarter of 2013, to $52.5 billion for the fourth quarter of 2014. The increase in average earning assets was driven by a $7.1 billion increase in average advances balance and a $5.1 billion increase in investments balances. However, growth in these asset categories was concentrated mainly in low-margin, short-term maturities.
The following information was filed by Federal Home Loan Bank Of Boston on Thursday, February 19, 2015 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.