In 2017, our performance was driven by record levels of advances, which reached $122.4 billion at year-end. This activity helped produce net income of $479.5 million in 2017 – the second-highest amount of earnings in the history of our cooperative – and grew our total assets to a record $158.9 billion. Our success throughout the year allowed us to provide our members with a strong return on their investment in our cooperative, with dividends paid from 2017 income totaling $361.6 million, or a full-year dividend rate of 5.76 percent. A consistent and reasonable dividend enhances the value of your membership.

Record advances volumes for the year demonstrate that the true value of membership is found in our advances. This achievement reflects the tremendous year we had in meeting members’ needs, a culmination of a variety of member engagement activities including educational sessions, sales and marketing campaigns, and the evolution of our Member Services Desk. Our ability to seamlessly meet these increased funding needs throughout 2017 reflects our role as a stable and reliable partner for our members.

We continue to actively build on this partnership. In 2017, 12 new members were welcomed into our cooperative – eight insurance companies and four credit unions. These new members reflect the growing diversity of our membership, which has experienced significant growth in the insurance company and credit union sectors in recent years. A more diversified membership gives us a stronger base, and allows for our funding to be put to even greater use across our District.

Today, we accept life, property and casualty and health insurance companies – adding our first health insurance company member in 2017. Membership has steadily grown over the past decade, and we ended 2017 with 19 insurance company members. Insurance companies find FHLBNY membership attractive for strategic and contingent funding needs. In turn, these institutions’ tendency to borrow long term lengthens and stabilizes our advances book, which strengthens our partnership. And this partnership is growing: in 2017, our insurance company members increased their borrowings by 12 percent, reaching a daily average balance of $20.6 billion.

We also made a concerted effort to engage with our credit union members through educational outreach activities to help these institutions receive the most value out of their FHLBNY membership. In 2017, these activities included a presentation from the FHLBNY’s financial economist at a Credit Union CEO Roundtable in upstate New York in October. In addition, a number of training sessions were conducted by our Sales and Marketing staff throughout the year. Hands-on strategic planning workshops were held over multiple days in conjunction with financial consulting firms, and several funding solution sessions were presented by our leadership team and held at our headquarters. The results from fostering more engagement were clear: credit unions increased their borrowings by 54.5 percent during the year, reaching a daily average balance of $4.1 billion.

While insurance companies and credit unions continue to increase their borrowings, the core of our advances business resides with our bank members,

which held 80 percent of total borrowings in 2017 – a total of $97.8 billion. For some bank members, our funding helped them grow their balance sheets in the face of increased loan demand. For others, using our Letters of Credit (L/Cs) to secure municipal deposits helped them gain a competitive advantage and grow asset balances. We also expanded our L/C program to the Caribbean region. Members faced a variety of challenges in 2017, ranging from responding to an evolving regulatory environment to increased competition from FinTech firms and a prolonged low interest rate environment. However, these members increasingly found ways to address these challenges through the opportunities provided to them by membership in our cooperative.

Housing associates have been a part of our cooperative for decades. Community Development Financial Institutions (CDFIs) are also eligible for membership. Several bank and credit union members are also

certified to serve as CDFIs and are federally insured. Working with our regulator, the Federal Housing Finance Agency, our Affordable Housing Advisory Council, and various groups across the FHLBNY, we now have three non-depository loan fund CDFIs in our cooperative. These associates and members serve as important partners and catalysts to advance housing opportunities throughout our District and will be an important part of our future.

Our membership spans institutions of different types with different asset sizes, different business models and different areas of focus. Yet all of our members are bound by a shared commitment to the

communities they serve. Members are active and involved in their communities, and have the local knowledge to recognize and act on the needs of these communities.

Just as we are a trusted partner to our members, each member serves as its community’s trusted partner. We are proud to support this alliance through our various housing and community programs, including our Affordable Housing Program (AHP) and our Community Lending Programs. In 2017, we awarded our second-highest amount of AHP grant dollars – $36.9 million to help 42 projects create or preserve nearly 2,900 affordable homes. Included in this was

the single largest AHP grant we have ever awarded in the Program’s 28-year history: a $3.2 million grant to help fund the expansion of the Buffalo City Mission, a vital resource for the city’s homeless population. The Affordable Housing Program succeeds because it supports the strong partnerships that exist between dedicated community organizations, locally focused lenders, dedicated developers and our elected officials at the city, state and federal levels, all working together to build affordable housing for all who need it. It is a partnership we have been proud to support for the past 28 years through our AHP grants.

We also saw significant activity in our First Home Club^sm in 2017. During the year, 3,117 new households enrolled in the program, and $13.2 million in funds was provided to help create 1,655 new homeowners. And our work continues: at year-end, we had nearly 6,000 households in the First Home Club pipeline.

Interest in our Community Lending Programs – a set of discounted rate advances that include our Community Investment Program, Urban Development Advance and Rural Development Advance – continued to grow in 2017, as well. For the year, the FHLBNY issued $2.8 billion in commitments, and funded $2.5 billion in Community Lending Program advances.

Through the Affordable Housing Program, First Home Club and Community Lending Programs, we are able to partner with our members to help them meet the

very specific needs of the communities they serve. When so many communities were reeling from the devastating effects of hurricanes Harvey, Irma and Maria, our members were able to access our Disaster Relief Funding to support recovery efforts in those very same communities. In September, $1 billion in Disaster Relief Funding was made available to our members – funded through our Community Lending Programs – to help rebuild communities in FEMA-designated disaster areas in Puerto Rico, the U.S. Virgin Islands, Florida, Texas and the Southeast. Providing this funding to our members – the local lenders serving the affected communities – will help make a positive impact on relief, recovery and rebuilding efforts. And in the spirit of partnership, the entire Federal Home Loan Bank System joined together to support storm-ravaged regions across the country. In addition, during the storms’ immediate aftermath, the FHLBNY also curated more than $1 million in charitable contributions – including $275,000 from our fellow Federal Home Loan Banks – to front-line organizations providing shelter, food, medicine and counseling to the affected areas.

The operating environment in 2017 presented challenges and uncertainties, but our members and their FHLBNY found opportunities to thrive. And just as our members remain stable partners for their customers and communities, so too shall we remain your trusted partner as we navigate through 2018 and strengthen our franchise for years to come.

Record advance volumes in 2017 demonstrate the FHLBNY’s role as a stable and reliable partner for our members. We take pride in actively building on this partnership by elevating our engagement with members to find solutions for continued business growth and ways to increase membership value.

In 2017, more than 100 presentations were delivered to a variety of audiences including on-site collateral reviews to help expand borrowing capacity.

Over 50 trade industry events were covered, several strategic workshops and training seminars were held — leveraging our new corporate office when suitable to host meetings with members, associates and constituents — and our Member Services Desk keeps evolving to meet our members’ needs.

Thank you for your business. We invite you to take a closer look at our business growth and within each member sector to see the strength in our cooperative.

Advanced Financial FCU

Ameritas Life Insurance Corporation of New York

Horizon Healthcare Services, Inc.

Hudson River Community Credit Union

Kingstone Insurance Company

New Jersey Manufacturers Insurance Company

Nova UA Federal Credit Union

South Jersey Federal Credit Union

Stratford Insurance Company

Transatlantic Reinsurance Company

Tudor Insurance Company

Western World Insurance Company

Each year, the FHLBNY disburses 10 percent of its prior year’s net income, as per its governing regulations, to support the Affordable Housing Program (AHP) — and our members’ business fuels this income. Back in 2016, the FHLBNY received an AHP grant application for a project sponsored by the Akwesasne Housing Authority for the Saint Regis Mohawk Tribe – the first AHP submission for a project on tribal land. Although that 2016 application was unsuccessful, it led us to conduct extensive outreach with the eight federally recognized native tribes in our District. Opening these relationships allowed us to learn more about the Akwesasne Housing Authority’s housing initiatives and housing needs, and also provide them with more information on our Community Lending Program (CLP). With the technical assistance from our Community Investment team, the Akwesasne Housing Authority resubmitted its application for the 2017 AHP Round, and the Sunrise Acres III Supportive Housing Project received a $540,000 grant to help build 18 affordable homes for veterans and seniors on the Saint Regis Mohawk tribal land.

This example of collaboration reflects our more targeted approach in 2017. The team focused on strengthening coordination with affordable housing partners, holding in-depth meetings with senior technical staff at a number of housing agencies to provide project sponsors with a greater understanding of our programs. More than 50 previous AHP applicants were contacted – like the Akwesasne Housing Authority – to dive deeper into previous applications to inform future program enhancements and improve housing opportunities. Increased outreach works: just four percent of applications submitted in 2017 were deemed ineligible, down significantly from previous years. And in 2017, the FHLBNY awarded its second-highest amount of AHP funds in the history of the program.

In addition, over a quarter of our members participated in the First Home Clubsm (FHC) in 2017, a non-competitive, AHP set-aside program. The FHC encourages homeownership by offering down payment and closing cost assistance to eligible first-time homebuyers purchasing a home through one of our members. Enrolled members find value in offering the FHC as a tool to attract and retain customers while helping them expand affordable housing in our communities.

In 2017, we awarded our second-highest amount of AHP grant dollars - $36.9 million to help 42 projects create or preserve nearly 2,900 affordable homes.

Our CLP advance book grew by more than $1 billion in 2017 — members certainly see the value in accessing our lowest funding rates for projects that create housing, improve business districts and strengthen neighborhoods.

At the FHLBNY, we pride ourselves in being able to help our members meet the needs of the communities we all serve. In the later part of 2017, following the devastation wrought by hurricanes Irma and Maria, communities in Puerto Rico and the U.S. Virgin Islands experienced needs that we had never seen before. When the true scope of these storms became evident, our Board immediately acted – approving $1 billion in Disaster Relief Funding to be made available through the FHLBNY’s Community Lending Programs. This funding – to be used as both immediate gap financing and longer-term funding to restore homes and businesses affected by the storms

– will help our members make a long-term, positive impact on recovery, relief and rebuilding efforts.

Following the storms, we also focused on making a direct and immediate impact. Our Board authorized the disbursement of $775,000 – which later grew to more than $1 million with contributions from our members and fellow Federal Home Loan Banks – to

disaster relief organizations working on the ground in Puerto Rico and the U.S. Virgin Islands, helping to provide food, medicine, water and counseling to people in need.

In December 2017, as communities across the Caribbean continued to recover from the hurricanes, management brought to our Board a strategic framework for our disaster response efforts to ensure that we are best-positioned to work with our members to support relief and recovery efforts in any future disaster. This framework will allow us to more efficiently respond to disaster events in our District, focusing on the most effective forms of assistance and resources that we are able to provide. As we have seen in past natural disasters, the local lender is key to relief and rebuilding efforts. The strategy we created in the wake of this unprecedented destruction should ensure that our cooperative is prepared to help wherever we can.

		David J. Nasca + President and Chief Executive Officer Evans Bank, N.A. Hamburg, New York
		C. Cathleen Raffaeli * CEO and Managing Director Hamilton White Group, LLC, and Soho Venture Partners Inc. New York, New York
		Monte N. Redman + Board Member Sterling National Bank Lake Success, New York
		Rev. Edwin C. Reed * # Founder and CEO GGT Development, LLC Jamaica Estates, New York
		Rev. DeForest B. Soaries, Jr. * Senior Pastor First Baptist Church of Lincoln Gardens Somerset, New Jersey
		Carlos J. Vázquez + Chief Financial Officer Banco Popular de Puerto Rico San Juan, Puerto Rico
		Ángela Weyne * Former Commissioner of Insurance, Commonwealth of Puerto Rico San Juan, Puerto Rico
+ MEMBER DIRECTOR   * INDEPENDENT DIRECTOR   # PUBLIC INTEREST DIRECTOR

Note: This list reflects the FHLBNY’s Board of Directors as of January 1, 2018.

AFFORDABLE HOUSING ADVISORY COUNCIL (AHAC)

CHAIR

Carrie Michel-Wynne

Vice President of Strategic Relations

YWCA of Rochester & Monroe County, Rochester, New York

VICE CHAIR

Wayne T. Meyer

President

New Jersey Community Capital, New Brunswick, New Jersey

Staci A. Berger

President and CEO

The Housing and Community Development Network of NJ, Trenton, New Jersey

James Britz

Senior Vice President

Long Island Housing Partnership, Inc., Hauppauge, New York

Krystal R. Canady

Chief Executive Officer

The Gateway Family YMCA, Elizabeth, New Jersey

Susan Cotner

Executive Director

Affordable Housing Partnership / Albany Community Land Trust, Albany, New York

Robert Di Vincent

Executive Director

West New York Housing Authority, West New York, New Jersey

Retha Herne

Executive Director

Akwesasne Housing Authority, Akwesasne, New York

Daniel Kelly

President

Community Quest, Egg Harbor Township, New Jersey

Daniel Martin

Chief Executive Officer

Housing Partnership Development Corp., New York, New York

Colin McKnight

Active Executive Director

New York State Rural Housing Coalition, Albany, New York

Faith Moore

Executive Director

Orange County Rural Development Advisory Corporation,

Walden, New York

Maria G. Rodriguez-Collazo

Director of Housing Programs

PathStone Corporation, Ponce, Puerto Rico

David A. Rowe

Executive Vice President

CAMBA Housing Ventures, Inc., Brooklyn, New York

Note: This list reflects the FHLBNY AHAC as of December 31, 2017.

The FHLBNY strives to foster a diverse and inclusive culture, focused on our mission of advancing housing and community growth – a focus we share with our members.

In 2017, we opened the doors to our new home for our New York corporate office – designed to host business meetings with our members and associates, as well as further enhance collaboration among staff and keep them engaged with our mission and commitment to our members.

Throughout the year our employees joined together to volunteer their time, effort and money to benefit a range of community services and programs across our District. We promoted health and wellness among each other, and by hosting ongoing educational workshops and providing access to matriculated programs we shared and gained knowledge together.

CONNECT WITH US TO SEE OUR ONGOING EFFORTS TO MAINTAIN A STRONG CULTURE & COMMUNITY FOCUS