|FOR IMMEDIATE RELEASE||Contact: Carrie O'Connor|
|February 23, 2021||Senior Director of Communications|
|firstname.lastname@example.org | 317.465.0469|
Federal Home Loan Bank of Indianapolis Declares Dividends, Reports Earnings
Indianapolis, IN…Yesterday the Board of Directors of the Federal Home Loan Bank of Indianapolis ("FHLBank Indianapolis" or "Bank") declared its fourth quarter 2020 dividends on Class B-2 activity-based capital stock and Class B-1 non-activity-based stock at annualized rates of 3.00% and 1.75%, respectively. This difference in dividend rates reflects the Board's discretion under our amended capital plan effective September 26, 2020 to declare a higher rate on activity-based stock than non-activity-based stock.
The dividends will be paid in cash on February 24, 2021.
"We’re pleased to pay out a higher Class B-2 activity-based dividend rate as a reward to members that use FHLBank Indianapolis in support of their liquidity needs," President and CEO Cindy Konich said. "Notably, now members approved to participate in our Mortgage Purchase Program can also elect to acquire activity-based stock reflective of their MPP transactions."
Net income for the fourth quarter of 2020 was $30 million, a decrease of $17 million compared to the corresponding quarter in the prior year due substantially to lower earnings on the portion of the Bank's assets funded by its capital, and accelerated amortization of purchase premium resulting from higher prepayments on mortgage loans, each driven by the decline in market interest rates.
Net income for the year ended December 31, 2020 was $88 million, a decrease of $54 million compared to the prior year due substantially to accelerated amortization of purchase premium resulting from higher prepayments on mortgage loans, and lower earnings on the portion of the Bank's assets funded by its capital, each driven by the decline in market interest rates. These decreases were partially offset by additional net interest income1 resulting from the Bank's growth in average asset balances.
Because of the Bank's relatively low net interest-rate spread, it has historically derived a substantial portion of its net interest income from deploying its interest-free capital in floating-rate assets, a portion of which is short-term.
1 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 Tuesday, February 23, 2021 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.