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| 8-K - FEDERAL HOME LOAN BANK OF NEW YORK - Federal Home Loan Bank of New York | form_8-k.htm |
May 7,
2020
TO:
All
Stockholders
(Addressed
Individually)
SUBJECT:
Report from the
President
FHLBNY to Accept Paycheck Protection Program Loans as Eligible
Collateral
Earlier
this month, The
Wall Street Journal ran an
article highlighting the importance of financial
institutions’ participation in the Small Business
Administration’s Paycheck Protection Program
(“PPP”), a vital stimulus program aimed at helping
small businesses across the nation make payroll and retain workers.
And across the nation, these small businesses have turned to their
local lender for assistance. As the article captured, in
communities all over the country, the local lender has come to the
rescue.
We see
this across our District and within our membership, as well. In
fact, Tioga State Bank – an FHLBNY member since 1993, located
in Spencer, New York – is featured in the Wall Street Journal piece and, as the
article states, its PPP loan activity will allow companies in 20
counties to retain or rehire approximately 3,500 workers. That is
the real, tangible impact local lenders make in their communities
every day. Across our District, members have seized on the
opportunity to use PPP loans to help support their neighbors
– cherished longtime clients and first-time customers alike.
We have even seen our members repurpose staff to handle the influx
of applicants.
The
local lender is essential to every community across our District,
and we are proud to support our members’ efforts to support
these communities amid this crisis. On April 23, our regulator, the
Federal Housing Finance Agency (“FHFA”), provided guidance regarding the Federal
Home Loan Banks’ acceptance of PPP loans as collateral,
subject to certain parameters. We have been focused on these loans
from the moment the PPP was announced, with a number of departments
across our franchise collaborating on how best to support our
members’ use of this program.
I am
proud to announce that, beginning today, the FHLBNY will accept PPP
loans as eligible collateral from member institutions which meet
certain criteria relating to the FHFA’s guidance and the
FHLBNY’s own internal review processes. To determine if your
institution is eligible to pledge these loans as collateral, please
contact your Relationship Manager. It is our hope that by accepting
this collateral, we remove some of the challenges our members may
face in this area, and make it easier to keep funding flowing into
the communities we all serve.
FHLBNY Announces COVID-19 Relief Program
The
COVID-19 pandemic has affected virtually every community, household
and person across our District, presenting unprecedented and
formerly unimaginable challenges. And yet, across our District, we
see our members rise to meet these challenges, doing all that you
can to support your customers, neighbors and communities. We are
honored to stand as a partner to our members in these efforts. On
May 1, we announced our COVID-19 Relief Program, a combination of
Disaster Relief Funding, charitable donations, grants and
subsidized advances. We have made $1 billion in low-cost Community
Investment Cash Advance Disaster Relief Funding available to
members through our Community Lending Programs to help communities
and customers respond to and recover from the pandemic. We have
also made $5 million available through our Small Business Recovery
Grant Program to provide working capital to affected businesses
across the District through our members. We provided $500,000 in
charitable donations to a number of organizations working on the
front lines of the pandemic to help their efforts to assist
vulnerable populations in our region. And later this year, when we
launch our Business Development Advance, we will invest $1 million
to provide zero percent funding to members lending to small
businesses through the product – an investment which can be
leveraged into more than $100 million in small business
loans.
A Strong Partner
On
April 28, we announced our results for the first quarter of 2020.
March was, of course, a very challenging month, with declining
interest rates and volatile funding spreads impacting our
performance. Despite these challenges, we posted net income of $105
million for the quarter – a solid result in a difficult
period. Most importantly, we were there when our members needed us,
with advances increasing by 35 percent to record levels by
quarter-end as members looked to us as a reliable source of
liquidity amid a turbulent operating environment. This is what the
Federal Home Loan Bank was designed to do, and it is what we commit
ourselves to in our vision statement, that we will be “a
balanced provider of liquidity to members in all operating
environments.”
While I
am certain none of us could have imagined our current operating
environment, our entire team was ready for it nonetheless,
providing vital liquidity to members when they needed it most. Our
performance positions us to respond to the crisis, but the response
itself is driven by our mission, by our culture and by our people
– all of us who take pride in our ability to give back to our
communities. We are honored to work alongside our members and help
support these communities. Together, our cooperative provides
stability in an unstable world, and we know that it is through the
local lender, your partnership with the FHLBNY, and the resiliency
of communities across New Jersey, New York, Puerto Rico and the
U.S. Virgin Islands that we will come through this
crisis.
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 on 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, the Risk Factors set forth in our
Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q
filed with the SEC, as well as 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. Forward-looking statements speak only as of the date
they are made, and we undertake no obligation to revise or update
publicly any forward-looking statements for any
reason.
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