FOR IMMEDIATE RELEASE
FEDERAL HOME LOAN BANK OF BOSTON ANNOUNCES 2019
FOURTH QUARTER AND ANNUAL RESULTS, DECLARES DIVIDEND
BOSTON (February 20, 2020) - The Federal Home Loan Bank of Boston announced its preliminary, unaudited fourth quarter and annual financial results for 2019, reporting net income of $68.5 million for the quarter and $190.7 million for the year. The Bank expects to file its annual report on Form 10-K for the year ending December 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 5.46 percent, the approximate daily average three-month LIBOR yield for the fourth quarter of 2019 plus 350 basis points. The dividend, based on average stock outstanding for the fourth quarter of 2019, will be paid on March 3, 2020. The board expects to follow this formula for declaring cash dividends through 2020, though a quarterly loss or a significant, adverse event or trend could cause a dividend to be suspended or reduced.
“The Bank delivered on its mission again in 2019. We earned $190.7 million of income, and the balance sheet remained strong with retained earnings growing to $1.46 billion,” said President and Chief Executive Officer Edward A. Hjerpe III. “We provided liquidity and funding to our members, delivered an attractive dividend, set aside $21.3 million for the 2020 Affordable Housing Program, and expanded programs to boost local small businesses, job creation, homeownership, and the production and preservation of affordable housing throughout New England.”
Fourth Quarter 2019 Operating Highlights
Net income for the quarter ending December 31, 2019, was $68.5 million, compared with net income of $43.7 million for the same period in 2018. The increase in net income for the quarter was primarily due to litigation settlement income of $29.4 million and gains on sales of securities of $12.0 million, offset by a $7.7 million decrease in net interest income after provision for credit losses, and a loss on early extinguishment of debt of $5.2 million. These results led to a $7.6 million contribution to the Bank's Affordable Housing Program for the quarter.
Net interest income after provision for credit losses for the quarter ending December 31, 2019, was $68.3 million, compared with $76.0 million for the same period in 2018. The $7.7 million decrease in net interest income after provision for credit losses was mainly a result of a $7.8 billion decrease in average advances, a $643.3 million decrease in average capital stock and lower interest rates. These decreases were partially offset by a $4.1 million increase in prepayment fee income, as well as lower premium amortization on U.S. Agency mortgage-backed securities resulting from an increase in mortgage rates during the fourth quarter of 2019, compared to a decrease during the same quarter a year ago.
December 31, 2019 Balance-Sheet Highlights
Total assets decreased $7.9 billion, or 12.5 percent, to $55.7 billion at December 31, 2019, down from $63.6 billion at year-end 2018. During the year ended December 31, 2019, advances decreased $8.6 billion, or 19.9 percent, to