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| 8-K - FORM 8-K - Federal Home Loan Bank of Pittsburgh | d491304d8k.htm |
 Member Audio/Web
Conference
February 26, 2013
Exhibit 99.1 |
 Cautionary Statement Regarding Forward-
Looking Information and Adjusted Information
2
Data set forth in these slides includes unaudited data. This document contains
“forward-looking statements”- that is, statements related to future, not
past, events. In this context, forward-looking statements often address our expected future business and financial
performance, and often contain words such as “expect,” “anticipate,”
“intend,” “plan,” “believe,” “seek,” or “will.” The Bank cautions that,
by their nature, forward-looking statements involve risk or uncertainty and that actual results
could differ materially from those expressed or implied in these forward-looking statements
or could affect the extent to which a particular objective, projection, estimate, or prediction
is realized. These forward-looking statements involve risks and uncertainties including, but not limited to, the following:
economic and market conditions, including, but not limited to, real estate, credit and mortgage
markets; volatility of market prices, rates, and indices; political, legislative, regulatory,
litigation, or judicial events or actions; changes in assumptions used in the quarterly other-
than-temporary impairment (OTTI) process; changes in the assumptions used in the allowance for
credit loss; changes in the Bank’s capital structure; changes in the Bank’s
capital requirements; membership changes; changes in the demand by Bank members for Bank
advances; an increase in advances’ prepayments; competitive forces, including the availability of other sources of funding for
Bank members; changes in investor demand for consolidated obligations and/or the terms of interest
rate exchange agreements and similar agreements; changes in the FHLBank System’s debt
rating or the Bank’s rating; the ability of the Bank to introduce new products and
services to meet market demand and to manage successfully the risks associated with new products and services; the
ability of each of the other FHLBanks to repay the principal and interest on consolidated obligations
for which it is the primary obligor and with respect to which the Bank has joint and several
liability; applicable Bank policy requirements for retained earnings and the ratio of the
market value of equity to par value of capital stock; the Bank’s ability to maintain adequate capital levels (including meeting
applicable regulatory capital requirements); business and capital plan adjustments and amendments; and
timing and volume of market activity. This document also contains non-GAAP financial
information. Because of the nature of OTTI charges the Bank believes that adjusting net income
for this item and evaluating results as adjusted (which the Bank defines as “adjusted earnings") is important in
order to understand how the Bank is performing with respect to its primary business operations and to
provide meaningful comparisons to prior periods. Adjusted earnings are considered to be a
non-GAAP measurement. Management uses this information in its internal analysis of results
and believes that this information may be informative to investors in gauging the quality of our financial performance,
identifying trends in our results and providing meaningful period-to-period comparisons. |
 Over/
2012
2011
(Under)
Net interest income
209.8
$
154.4
$
55.4
$
Provision for credit losses
0.4
10.0
(9.6)
Net OTTI credit losses
(11.4)
(45.1)
33.7
All other income
18.5
12.1
6.4
Other expenses
72.3
65.0
7.3
Income before assessments
144.2
46.4
97.8
AHP/REFCORP
14.5
8.4
6.1
GAAP net income
129.7
$
38.0
$
91.7
$
Net interest margin (bps)
37
30
7
Year Ended December 31,
Financial Highlights –
Statement of Income
(in millions)
3 |
 Quarterly Adjusted Earnings
4Qtr 12
3Qtr 12
2Qtr 12
1Qtr 12
4Qtr 11
GAAP net income
51.7
$
33.0
$
23.2
$
21.8
$
10.9
$
Adjustments:
Net OTTI credit losses
(0.4)
(0.2)
(3.6)
(7.2)
(7.6)
AHP
-
-
0.4
0.7
0.7
Adjusted earnings
52.1
$
33.2
$
26.4
$
28.3
$
17.8
$
Net prepayment fees on
advances
17.5
$
2.2
$
7.4
$
4.7
$
5.0
$
Derivative and hedging activity
8.1
3.5
(4.8)
4.0
(0.5)
(in millions)
4 |
 Quarterly Advance Trend
5 |
 Financial Highlights –
Selected Balance Sheet
Year Ended December 31,
2012
2011
Amount
Average:
Total assets
57,516
$
51,784
$
5,732
$
11
%
Advances
33,488
27,105
6,383
24
Total investments
19,777
19,968
(191)
(1)
2012
2011
Amount
Spot:
Advances
40,498
$
30,605
$
9,893
$
32
%
PLMBS (par)
2,944
3,794
(850)
(22)
Retained earnings
559
435
124
29
Total AOCI
54
(162)
216
133
Percent
Over/(Under)
Over/(Under)
Percent
As of December 31,
(in millions)
(in millions)
6 |
 Capital and Risk-Based Requirements
2012
2011
2010
Permanent capital
(1)
3,807
$
3,871
$
4,418
$
Risk-based capital requirement:
Credit risk capital
678
$
678
$
798
$
Market risk capital
114
139
448
Operations risk capital
238
245
374
Total risk-based capital requirement
1,030
$
1,062
$
1,620
$
Excess permanent capital
2,777
$
2,809
$
2,798
$
Percentage of requirement
370%
365%
273%
Capital ratio (4% minimum)
5.9%
7.4%
8.3%
Leverage ratio (5% minimum)
8.8%
11.2%
12.4%
Market value/capital stock (MV/CS)
115.1%
96.9%
93.3%
As of December 31,
(in millions)
(1)
Permanent
capital
includes
excess
capital
stock
of
$624,
$1,294,
and
$1,897
at
December
31,
2012, 2011 and 2010, respectively.
Third
quarter
2012
capital
classification
“adequately
capitalized.”
However,
our
regulator
has
maintained
concerns
regarding
our
level
of
retained
earnings
and
the
poor
quality
of
the
PLMBS
portfolio.
7 |
 •
Dividend declared based on fourth quarter 2012 results
Equal to fourth quarter 2012 average three-month LIBOR (annual yield of
0.32%) Based on average stock outstanding for fourth quarter 2012
Payment date: February 22, 2013
•
Partial excess capital stock repurchase
Excess
capital
stock
repurchased
–
approximately
$300
million
Effective date: February 21, 2013
Payment date: February 22, 2013
•
No significant impact on:
Risk and capital adequacy measures
Members’
excess ownership percentage
•
Decisions for any future repurchases and/or dividend payments will be based on the
following:
Increased retained earnings
PLMBS AOCI levels
Adequate excess regulatory capital
MV/CS > 90%
Positive GAAP earnings which are sustainable for the foreseeable
future
Dividend Payment & Excess Stock Repurchase
8 |
 Member Audio/Web
Conference
February 26, 2013 |