|FOR IMMEDIATE RELEASE||Contact: Carrie O'Connor|
|October 28, 2020||Senior Director of Communications|
|firstname.lastname@example.org | 317.465.0469|
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 third quarter 2020 dividends for the period ended September 25, 2020 on Class B-1 and Class B-2 capital stock at annualized rates of 3.00% and 2.40%, respectively.
As a result of implementing a revised capital plan effective September 26, 20201, the Board also declared dividends for the remaining five-day period of the quarter on Class B-2 activity-based stock at an annualized rate of 3.00% and Class B-1 non-activity-based stock at an annualized rate of 3.00%. Given the short period of time that the revised capital plan was in effect during the quarter, the Board declared the same rate on the Class B-1 stock as on the Class B-2 stock.
The dividends will be paid in cash on October 29, 2020.
"FHLBank Indianapolis is pleased to offer a competitive dividend during an ongoing pandemic," Cindy Konich, President and CEO, stated. "During the third quarter, we also introduced our revised capital plan, which provides members with simplified membership-stock calculations and additional activity-stock flexibility." Learn more about the capital plan at www.fhlbi.com.
Net income for the third quarter of 2020 was $15 million, a decrease of $11 million compared to the corresponding quarter in the prior year due substantially to lower net earnings on trading securities2 and accelerated amortization of purchase premium resulting from higher prepayments on mortgage loans, both resulting from the decline in market interest rates. These decreases were partially offset by additional net interest income3 resulting from the Bank's growth in average asset balances and by lower net losses on qualifying fair-value hedging relationships.
1 The prior capital plan required that dividends on Class B-2 stock be calculated as 80% of the dividends declared on Class B-1 stock, while the revised capital plan permits the dividends on Class B-2 (activity-based) stock to be greater than or equal to the dividends on Class B-1 (non-activity-based) stock.
2 The Bank uses U.S. Treasury securities as part of its liquidity portfolio. Such securities are classified as trading securities, on which changes in fair value are recorded in other income. Changes in the estimated fair value of the associated economic hedging instruments are also recorded in other income.
3 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.
The following information was filed by Federal Home Loan Bank Of Indianapolis on Wednesday, October 28, 2020 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.