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EX-99.3 - EX-99.3 - Federal Home Loan Bank of Dallas | d80114exv99w3.htm |
EX-99.1 - EX-99.1 - Federal Home Loan Bank of Dallas | d80114exv99w1.htm |
EX-99.2 - EX-99.2 - Federal Home Loan Bank of Dallas | d80114exv99w2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 28, 2011
FEDERAL HOME LOAN BANK OF DALLAS
(Exact name of registrant as specified in its charter)
Federally chartered corporation | 000-51405 | 71-6013989 | ||
(State or other jurisdiction of | (Commission File | (IRS Employer | ||
incorporation or organization) | Number) | Identification No.) |
8500 Freeport Parkway South, Suite 600 | ||
Irving, TX | 75063-2547 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code:
(214) 441-8500
(214) 441-8500
Former name or former address, if changed since last report:
Not Applicable
Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On February 28, 2011, the Federal Home Loan Bank of Dallas (the Bank) entered into a Joint
Capital Enhancement Agreement (the Agreement) with the other 11 Federal Home Loan Banks
(collectively, including the Bank, the FHLBanks).
The Agreement provides that upon satisfaction of the FHLBanks obligations under Section 21B (12
U.S.C. Sec. 1441b) of the Federal Home Loan Bank Act of 1932, as amended (the Act), and part 997
of the regulations of the Federal Housing Finance Board to make payments related to the Resolution
Funding Corporation (REFCORP), each FHLBank will, on a quarterly basis, allocate at least 20
percent of its net income to a separate restricted retained earnings account (Separate Restricted
Retained Earnings Account) to be established by each FHLBank.
Under the Agreement, each FHLBank will be required to build its Separate Restricted Retained
Earnings Account to an amount equal to 1 percent of its total consolidated obligations, based on
the most recent quarters average carrying value of all consolidated obligations for which an
FHLBank is the primary obligor, excluding fair value option and hedging adjustments (Total
Consolidated Obligations).
The Agreement further requires each FHLBank to submit an application to the Federal Housing Finance
Agency (Finance Agency) for approval to amend its capital plan or capital plan submission, as
applicable, consistent with the terms of the Agreement. Under the Agreement, if the FHLBanks
REFCORP obligation terminates before the Finance Agency has approved all proposed capital plan
amendments submitted pursuant to the Agreement, each FHLBank shall nevertheless be required to
commence the required allocation to its Separate Restricted Retained Earnings Account beginning as
of the end of the calendar quarter in which the final payments are made by the FHLBanks with
respect to their REFCORP obligations.
The Agreement provides that any quarterly net losses of an FHLBank may be netted against its net
income for other quarters during the same calendar year so that the minimum required year-to-date
or annual allocation to its Separate Restricted Retained Earnings Account is attained. In
the event an FHLBank incurs a net loss for a cumulative year-to-date or annual period that results
in a decrease to the balance of its Separate Restricted Retained Earnings Account compared to the
balance at the beginning of that calendar year, such FHLBanks quarterly allocation requirement
will thereafter increase to 50 percent of quarterly net income until the cumulative difference
between the allocations made at the 50 percent rate and the allocations that would have been made
at the regular 20 percent rate is equal to the amount of the decrease beyond the balance of its
Separate Restricted Retained Earnings Account at the beginning of that calendar year. Any
year-to-date or annual losses beyond losses that decrease the Separate Restricted Retained Earnings
Account to its balance as of the beginning of the calendar year shall first reduce
retained earnings that are not restricted retained earnings to a zero balance, and then may reduce
the balance of the FHLBanks Separate Restricted Retained Earnings Account, but not below a zero
balance.
The Agreement provides that if an FHLBanks Separate Restricted Retained Earnings Account exceeds
1.5 percent of its Total Consolidated Obligations, such FHLBank may transfer amounts from its
Separate Restricted Retained Earnings Account to another retained earnings account, but only to the
extent that the balance of its Separate Restricted Retained Earnings Account remains at least equal
to 1.5 percent of the FHLBanks Total Consolidated Obligations immediately following such transfer.
The Agreement provides that during a Dividend Restriction Period (as such term is defined by the
Agreement), an FHLBank may pay dividends only from retained earnings that are not restricted
retained earnings or the portion of quarterly net income that exceeds the amount required to be
allocated to the Separate Restricted Retained Earnings Account. The Agreement expressly provides
that it will not affect the rights of an FHLBanks Class B stockholders in the retained earnings of
an FHLBank, including those held in the Separate Restricted Retained Earnings Account of an
FHLBank, as granted under Section 6(h) (12 U.S.C. Sec. 1426(h)) of the Act.
Consistent with applicable law, the Agreement further provides that during a Dividend Restriction
Period, an FHLBank shall redeem or repurchase capital stock only at par value, and shall not engage
in such redemption or repurchase if following such transaction the FHLBanks total regulatory
capital falls below its aggregate paid-in amount of capital stock.
The Agreement will terminate: by an affirmative vote of two-thirds of the boards of directors of
the then existing FHLBanks; or automatically, if a change in the Act, Finance Agency regulations,
or other applicable law has the effect of: (i) creating any new or higher assessment or taxation on
the net income or capital of any FHLBank, or requiring the FHLBanks to retain a higher level of
restricted retained earnings than the amount that is required under the Agreement; or (ii)
establishing general restrictions applicable to the payment of dividends by FHLBanks that satisfy
all relevant capital standards by either (a) requiring a new or higher mandatory allocation of an
FHLBanks net income to any retained earnings account other than the amount specified in the
Agreement, or (b) prohibiting dividend payments from any portion of an FHLBanks retained earnings
that are not held in its Separate Restricted Retained Earnings Account.
The foregoing description of the Agreement is qualified in its entirety by reference to the
Agreement, a copy of which is included herein as Exhibit 99.1 to this current report and
incorporated herein by reference.
Item 3.03 Material Modification to Rights of Security Holders.
As described in Item 1.01 of this current report, the Agreement generally prohibits an FHLBank from
paying dividends from its Separate Restricted Retained Earnings Account and provides that an
FHLBank shall redeem or repurchase capital stock only at par value, and shall not engage in such
redemption or repurchase if following such transaction the FHLBanks total regulatory capital falls
below its aggregate paid-in amount of capital stock. The Agreement requires each FHLBank to seek
approval to amend its capital plan or capital plan submission, as applicable, consistent with the
terms of the Agreement. The information set forth above in Item 1.01 regarding the Agreement is
hereby incorporated into Item 3.03 by reference.
Item 7.01 Regulation FD Disclosure.
As disclosed above in Items 1.01 and 3.03 of this current report, on February 28, 2011, the Bank
entered into the Agreement. The information set forth above in Items 1.01 and 3.03 regarding the
Agreement is hereby incorporated into Item 7.01 by reference. Copies of a Member Bulletin and a
Questions and Answers document that provide additional information concerning the Agreement are
included as Exhibits 99.2 and 99.3, respectively, to this current report, and are incorporated into
Item 7.01 by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibits
99.1 | Joint Capital Enhancement Agreement, dated February 28, 2011 |
99.2 | Member Bulletin No. 2011-04, dated March 1, 2011 |
99.3 | Joint Capital Enhancement Agreement Questions and Answers, dated March 1, 2011 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
Federal Home Loan Bank of Dallas |
||||
March 1, 2011 | By: | /s/ Tom Lewis | ||
Name: | Tom Lewis | |||
Title: | Senior Vice President and Chief Accounting Officer | |||
Exhibit Index
Exhibit No. | Description | |
99.1
|
Joint Capital Enhancement Agreement, dated February 28, 2011 | |
99.2
|
Member Bulletin No. 2011-04, dated March 1, 2011 | |
99.3
|
Joint Capital Enhancement Agreement Questions and Answers, dated March 1, 2011 |