FOR IMMEDIATE RELEASE
FEDERAL HOME LOAN BANK OF BOSTON ANNOUNCES 2019
FIRST QUARTER RESULTS, DECLARES DIVIDEND
BOSTON (April 24, 2019) - The Federal Home Loan Bank of Boston announced its preliminary, unaudited first quarter results for 2019, reporting net income of $54.5 million. The Bank expects to file its quarterly report on Form 10-Q for the quarter ending March 31, 2019, with the U.S. Securities and Exchange Commission next month.
The Bank's board of directors also declared a dividend equal to an annual yield of 6.22 percent, the approximate daily average three-month LIBOR yield for the first quarter of 2019 plus 350 basis points. The dividend, based on average stock outstanding for the first quarter of 2019, will be paid on May 2, 2019. The board expects to follow this formula for declaring cash dividends through 2019, though a quarterly loss or a significant, adverse event or trend could cause a dividend to be suspended or reduced.
“The Bank continued its steady performance in the first quarter, recording strong net income of $54.5 million based on increased net interest income, net interest spread, and net interest margin,” said President and Chief Executive Officer Edward A. Hjerpe III. “We are pleased that our performance led to a $6.1 million contribution to the Bank's Affordable Housing Program and that we were able to launch an expanded Jobs for New England (JNE) program this year. Since JNE was established in 2016, participating members have reported that resulting small business loans have led to the creation or preservation of more than 5,000 jobs across New England.”
First Quarter 2019 Operating Highlights
Net income for the quarter ending March 31, 2019, was $54.5 million, compared with net income of $55.1 million for the same period in 2018. The decrease in net income was primarily due to a loss on early extinguishment of debt of $9.9 million which followed the prepayment of certain advances earlier in the quarter, partially offset by an increase of $6.7 million in net interest income after provision for credit losses, and a $1.7 million decline in net unrealized losses on trading securities. These results led to a $6.1 million contribution to the Bank's Affordable Housing Program for the quarter.
Net interest income after provision for credit losses for the quarter ending March 31, 2019, was $86.6 million, compared with $79.9 million for the same period in 2018. The $6.7 million increase in net interest income after provision for credit losses was mainly a result of an increase in prepayment fees on advances(1) from $156,000 in the quarter ending March 31, 2018 to $26.9 million for the same period in 2019, and the impact of higher short-term interest rates. This increase was partially offset by higher premium amortization on U.S. Agency mortgage-backed securities resulting from a significant drop in mortgage rates during the first quarter of 2019, as well as a $2.4 billion decrease in average earning assets. The decrease in average earning assets primarily consisted of a $2.6 billion decrease in average advances,
The following information was filed by Federal Home Loan Bank Of Boston on Wednesday, April 24, 2019 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.