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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 fourth quarter 2018 dividends on Class B-1 and Class B-2 capital stock at annualized rates of 5.50% and 4.40%, respectively. The dividends will be paid in cash on February 20, 2019.
"Over the past few years, we have purposefully grown our retained earnings position, which serves to protect our liquidity mission,” FHLBank Indianapolis President and CEO Cindy Konich said. “With our continued success, we’re pleased to redirect additional income benefits to our member financial institutions in the form of these significantly increased dividend payouts."
Net income for the fourth quarter of 2018 was $39 million, a decrease of $7 million compared to the fourth quarter of 2017, primarily due to net losses on derivatives and hedging activities, partially offset by higher net interest income. Net interest income1 after provision for credit losses was $75 million, an increase of $5 million compared to the fourth quarter of 2017, primarily as a result of an increase in the average balance of assets.
Net income for the year ended December 31, 2018 was $195 million, an increase of $39 million compared to the prior year, primarily due to a net realized gain on the sale of all of the Bank's private-label mortgage-backed securities ("PLMBS") and higher net interest income, partially offset by higher operating expenses. Net interest income after provision for credit losses was $288 million, an increase of $26 million compared to the prior year, primarily as a result of an increase in the average balance of assets.
Affordable Housing Program Allocation 2
As a direct result of the earnings for the year ended December 31, 2018, FHLBank Indianapolis allocated $22 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 Tuesday, February 19, 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-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.