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| 8-K - FEDERAL HOME LOAN BAN OF NEW YORK - Federal Home Loan Bank of New York | form_8-k.htm |
March
9, 2020
TO:
All
Stockholders
(Addressed
Individually)
SUBJECT:
Report from the
President
At the Bank
Closing the Books on a Strong 2019
As we
reported last month, your cooperative demonstrated strong
performance throughout 2019, with $472.6 million in net income, our
fourth-highest earnings ever. Our advances decreased slightly from
2018, but we still finished the year at a strong level, with $100
billion in liquidity flowing through communities across our
District. At year-end, our total assets stood at $162.1 billion,
and during the year we grew our retained earnings by $107 million,
further bolstering our balance sheet. Throughout 2019, we made
significant investments to enhance our technology capabilities and
increase our ability to meet our members’ needs.
Our
performance positioned us as a leader within the Federal Home Loan
Bank System, which also performed well in 2019, with Systemwide net
income of $3.2 billion, and all 11 Federal Home Loan Banks
reporting positive earnings. We earned the third-highest Return on
Equity among the 11 Federal Home Loan Banks in 2019, our ratio of
advances-to-assets at year-end was the fourth-highest in the
System, and we had the highest levels of both advances and assets.
The Federal Home Loan Banks ended 2019 with $641.5 billion in
advances being put to use by members across the
nation.
FHLBNY Announces Fourth Quarter 2019 Dividend
The
strength of our performance and the reliability of our franchise is
also reflected in our quarterly dividend. On February 20, we
announced a 6.35 percent (annualized) dividend for the fourth
quarter of 2019. For the year, we returned $352.5 million in
dividends paid from 2019 income to our members for a full-year
dividend rate of 6.35 percent– a solid return on our
members’ investment in the cooperative.
Responding to the Needs of Our Community
Our
focus on our members extends to the communities we all serve. Since
December 2019, the southwest section of Puerto Rico has been rocked
by more than 2,000 earthquakes, causing significant damage to homes
and businesses in the area. This month, we announced $500,000 in
charitable contributions to relief organizations leading efforts on
the ground in the Commonwealth to help the community recover and
rebuild. We have tremendous faith in the organizations that will
receive these funds, and appreciate the good work they have done
and continue to do to help Puerto Rico recover. We also know that
in the wake of any disaster, the local lender plays a key role in
recovery efforts. To assist our members in these efforts, the
FHLBNY has $1 billion in disaster relief funding available to our
members through our Community Lending Programs (“CLP”)
to help rebuild communities in FEMA-designated disaster areas in
Puerto Rico. The $1 billion CLP commitment can be used for any
residential lending activity for households whose incomes are at or
below 115 percent of the area median income, as well as all small
business and economic development lending in FEMA-designated
disaster areas, and bridge financing.
The
FHLBNY previously made this disaster relief funding available
following the 2017 hurricanes that devastated Puerto Rico and the
U.S. Virgin Islands, and has offered disaster relief funding
following natural disasters across its District, most notably
following Hurricane Sandy in 2012, when members accessed $850
million in disaster relief funding to assist relief efforts in New
Jersey and New York. These low-cost loans can be and have been used
by the FHLBNY’s member-lenders to support critical disaster
relief financial activities, and meet the short-, medium-, and
long-term funding needs of affected communities.
Coronavirus Update
The
stability and reliability of our franchise is paramount to the
value we offer our members. In this regard, the FHLBNY continues to
monitor the evolving situation regarding the Novel Coronavirus
(“COVID-19”), including developments from the Centers
for Disease Control, the World Health Organization, and the local
governments across our District. While we currently do not expect a
change to our operations as a result of COVID-19, we believe that
the FHLBNY is well-positioned to continue to meet member needs in
the event of a potential prolonged disruption.
As part
of our Business Continuity planning, the FHLBNY has a comprehensive
pandemic plan in place, which we are able to adjust according to
different scenarios. The FHLBNY also has significant remote
capabilities to help ensure that we are able to continue to operate
in the event of office inaccessibility. In fact, we conducted a
successful test of these remote capabilities on February 7, 2020,
where we operated from our Jersey City location with a core group
of employees while the majority of employees worked remotely, and
we experienced no business disruptions. As part of our Business
Continuity planning, we have also taken steps to identify critical
staff needed to operate the Bank in a variety of scenarios, and we
continue to communicate internally with our employees to help
ensure that we are all prepared in the event of an emergency. In
any and all operating environments, the FHLBNY is focused on
remaining a reliable partner to our members.
Sincerely,
José
R. González
President
and Chief Executive Officer
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Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
This
report may contain forward-looking statements within the meaning of
the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based upon our
current expectations and speak only as of the date hereof. These
statements may use forward-looking terms, such as
“projected,” “expects,” “may,”
or their negatives or other variations of these terms. 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, regulatory and
accounting rule adjustments or requirements, changes in interest
rates, changes in projected business volumes, changes in prepayment
speeds on mortgage assets, the cost of our funding, changes in our
membership profile, the withdrawal of one or more large members,
competitive pressures, shifts in demand for our products, and
general economic conditions. We undertake no obligation to
revise or update publicly any forward-looking statements for any
reason.
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