Federal Home Loan Bank of Dallas Reports Third Quarter 2020 Operating Results

·6 min read

The Federal Home Loan Bank of Dallas (Bank) today reported net income of $47.7 million for the quarter ended September 30, 2020. In comparison, for the quarters ended June 30, 2020 and September 30, 2019, the Bank reported net income of $67.0 million and $53.1 million, respectively. For the nine months ended September 30, 2020, the Bank reported net income of $166.2 million, as compared to $165.6 million for the nine months ended September 30, 2019.

Total assets at September 30, 2020 were $66.3 billion, compared with $75.0 billion at June 30, 2020 and $75.4 billion at December 31, 2019. The $8.7 billion decrease in total assets for the third quarter was attributable primarily to decreases in the Bank's advances ($4.3 billion), short-term liquidity holdings ($3.3 billion), long-term investments ($0.6 billion) and mortgage loans held for portfolio ($0.3 billion). The $9.1 billion decrease in total assets for the nine months ended September 30, 2020 was attributable primarily to decreases in the Bank's short-term liquidity holdings ($5.9 billion), advances ($2.8 billion) and mortgage loans held for portfolio ($0.4 billion).

Advances totaled $34.3 billion at September 30, 2020, compared with $38.6 billion at June 30, 2020 and $37.1 billion at December 31, 2019. The Bank's mortgage loans held for portfolio totaled $3.7 billion at September 30, 2020, as compared to $4.0 billion at June 30, 2020 and $4.1 billion at December 31, 2019.

The Bank's long-term held-to-maturity securities portfolio, which is comprised substantially of U.S. agency residential mortgage-backed securities (MBS), totaled approximately $1.0 billion at September 30, 2020 compared to $1.1 billion at June 30, 2020 and $1.2 billion at December 31, 2019. The Bank's long-term available-for-sale securities portfolio, which is comprised substantially of U.S. agency debentures and U.S. agency commercial MBS, totaled $17.1 billion at September 30, 2020, as compared to $17.6 billion at June 30, 2020 and $16.8 billion at December 31, 2019. At September 30, 2020, June 30, 2020 and December 31, 2019, the Bank also held a $0.1 billion long-term U.S. Treasury Note classified as trading.

The Bank's short-term liquidity holdings are typically comprised of overnight interest-bearing deposits, overnight federal funds sold, overnight reverse repurchase agreements, U.S. Treasury Bills, U.S. Treasury Notes and, from time to time, may also include cash held at the Federal Reserve. At September 30, 2020, June 30, 2020 and December 31, 2019, the Bank's short-term liquidity holdings totaled $9.9 billion, $13.2 billion and $15.8 billion, respectively.

The Bank's retained earnings increased to $1.380 billion at September 30, 2020 from $1.339 billion at June 30, 2020 and $1.233 billion at December 31, 2019. On September 29, 2020, a dividend of $6.9 million was paid to the Bank's shareholders.

Additional selected financial data as of and for the quarter and nine months ended September 30, 2020 (and, for comparative purposes, as of June 30, 2020 and December 31, 2019, and for the quarters ended June 30, 2020 and September 30, 2019 and the nine months ended September 30, 2019) is set forth below. Further discussion and analysis regarding the Bank's results will be included in its Form 10-Q for the quarter ended September 30, 2020 to be filed with the Securities and Exchange Commission.

About the Federal Home Loan Bank of Dallas

The Federal Home Loan Bank of Dallas is one of 11 district banks in the FHLBank System, which was created by Congress in 1932. The Bank is a member-owned cooperative that supports housing and community development by providing competitively priced loans (known as advances) and other credit products to approximately 800 members and associated institutions in Arkansas, Louisiana, Mississippi, New Mexico and Texas. For more information, visit the Bank's website at fhlb.com.

Federal Home Loan Bank of Dallas

Selected Financial Data

As of and For the Quarter and Nine Months Ended September 30, 2020

(Unaudited, in thousands)

September 30, 2020

June 30, 2020

December 31, 2019

Selected Statement of Condition Data:

Assets

Investments (1)

$

28,049,888

$

32,000,053

$

33,918,055

Advances

34,292,478

38,642,663

37,117,455

Mortgage loans held for portfolio, net

3,705,344

4,019,608

4,075,464

Cash and other assets

248,143

297,479

270,631

Total assets

$

66,295,853

$

74,959,803

$

75,381,605

Liabilities

Consolidated obligations

Discount notes

$

26,739,876

$

35,978,006

$

34,327,886

Bonds

34,099,828

32,694,975

35,745,827

Total consolidated obligations

60,839,704

68,672,981

70,073,713

Mandatorily redeemable capital stock

13,810

6,803

7,140

Other liabilities

1,911,178

2,638,501

1,502,784

Total liabilities

62,764,692

71,318,285

71,583,637

Capital

Capital stock — putable

2,181,608

2,474,135

2,466,242

Retained earnings

1,380,050

1,339,216

1,232,677

Total accumulated other comprehensive income (loss)

(30,497)

(171,833)

99,049

Total capital

3,531,161

3,641,518

3,797,968

Total liabilities and capital

$

66,295,853

$

74,959,803

$

75,381,605

Total regulatory capital (2)

$

3,575,468

$

3,820,154

$

3,706,059

For the

For the

For the

For the

For the

Quarter Ended

Quarter Ended

Quarter Ended

Nine Months Ended

Nine Months Ended

September 30, 2020

June 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

Selected Statement of Income Data:

Net interest income (3) (4)

$

79,457

$

110,099

$

67,912

$

235,148

$

202,364

Other income (loss)

(708)

(2,630)

14,900

32,052

54,021

Other expense

25,731

33,074

23,803

82,473

72,393

AHP assessment

5,305

7,441

5,905

18,480

18,414

Net income

$

47,713

$

66,954

$

53,104

$

166,247

$

165,578

(1)

Investments consist of interest-bearing deposits, securities purchased under agreements to resell, federal funds sold, trading securities, available-for-sale securities and held-to-maturity securities.

(2)

As of September 30, 2020, June 30, 2020 and December 31, 2019, total regulatory capital represented 5.39 percent, 5.10 percent and 4.92 percent, respectively, of total assets as of those dates.

(3)

Net interest income is net of the provision for mortgage loan losses.

(4)

The Bank records hedge ineffectiveness associated with fair value hedging relationships in net interest income in accordance with the provisions of ASU 2017-12, "Targeted Improvements to Accounting for Hedging Activities." During the quarters ended September 30, 2020, June 30, 2020 and September 30, 2019, fair value hedge ineffectiveness increased (reduced) net interest income by $4.629 million, $9.423 million and $(6.279) million, respectively. During the nine months ended September 30, 2020 and 2019, fair value hedge ineffectiveness reduced net interest income by $22.838 million and $31.244 million, respectively.

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Contacts

Corporate Communications
Federal Home Loan Bank of Dallas
fhlb.com
(214) 441-8445