FOR IMMEDIATE RELEASE
Contact: Carrie O'Connor
Senior Director of Communications
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Federal Home Loan Bank of Indianapolis Declares Dividends, Reports Earnings
Indianapolis, IN…Today the Board of Directors of the Federal Home Loan Bank of Indianapolis ("FHLBank Indianapolis" or "Bank") declared its second quarter 2018 dividends on Class B-1 and Class B-2 capital stock at annualized rates of 4.50% and 3.60%, respectively. The dividends will be paid in cash on July 27, 2018.
"We are pleased to increase the dividend to 4.50%," President and CEO Cindy Konich said. "The Bank's consistent earnings have enabled us to continue to build retained earnings while providing our members a competitive return on their investment."
Net income for the second quarter of 2018 was $69 million, an increase of $31 million compared to the same quarter in the prior year, primarily due to a net realized gain of $32 million on the sale of all of the Bank's private-label mortgage-backed securities ("PLMBS"). Net interest income1 after provision for credit losses was $70 million, an increase of $5 million compared to the same quarter in the prior year, primarily as a result of an increase in the average balance of assets.
Net income for the six months ended June 30, 2018 was $117 million, an increase of $48 million compared to the same period in the prior year, primarily due to the net realized gain on the PLMBS sale as well as higher net interest income and net gains on derivatives and hedging activities. Net interest income after provision for credit losses was $140 million, an increase of $16 million compared to the same period in the prior year, primarily as a result of an increase in the average balance of assets.
Affordable Housing Program Allocation2
As a direct result of the earnings for the six months ended June 30, 2018, FHLBank Indianapolis allocated $14 million to its Affordable Housing Program ("AHP"), which provides grant funding to support housing for low- and moderate-income families in Michigan and Indiana. Full year 2018 AHP allocations will be available to the Bank's members in 2019 to help address their communities' affordable housing needs, including construction, rehabilitation, accessibility improvements and homebuyer down-payment assistance.
FHLBank Indianapolis earns interest income on advances to and mortgage loans purchased from its Michigan and Indiana member financial institutions, as well as on long- and short-term investments. Net interest income is primarily determined by the spread between the interest earned on those assets and the interest cost of funding with consolidated obligations.
Each year FHLBanks allocate to the AHP 10% of earnings, which is defined as income before assessments, plus interest expense on mandatorily redeemable capital stock.
The following information was filed by Federal Home Loan Bank Of Indianapolis on Thursday, July 26, 2018 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.