Federal Home Loan Bank of Dallas Reports Second Quarter 2021 Operating Results

DALLAS–()–The Federal Home Loan Bank of Dallas (Bank) today reported net income of $28.0 million for the quarter ended June 30, 2021. In comparison, for the quarters ended March 31, 2021 and June 30, 2020, the Bank reported net income of $47.9 million and $67.0 million, respectively. For the six months ended June 30, 2021, the Bank reported net income of $75.9 million, as compared to $118.5 million for the six months ended June 30, 2020.

Total assets at June 30, 2021 were $58.6 billion, compared with $61.1 billion at March 31, 2021 and $64.9 billion at December 31, 2020. The $2.5 billion decrease in total assets for the second quarter was attributable to decreases in the Bank’s short-term liquidity holdings ($1.7 billion), advances ($0.7 billion) and long-term investments ($0.1 billion). The $6.3 billion decrease in total assets for the six months ended June 30, 2021 was attributable primarily to decreases in the Bank’s advances ($7.6 billion), long-term investments ($0.7 billion) and mortgage loans held for portfolio ($0.2 billion), partially offset by an increase in the Bank’s short-term liquidity holdings ($2.1 billion).

Advances totaled $24.9 billion at June 30, 2021, compared with $25.6 billion at March 31, 2021 and $32.5 billion at December 31, 2020. The Bank’s mortgage loans held for portfolio totaled $3.2 billion at June 30, 2021, as compared to $3.2 billion at March 31, 2021 and $3.4 billion at December 31, 2020.

The carrying value of the Bank’s long-term held-to-maturity securities portfolio, which is comprised substantially of U.S. agency residential mortgage-backed securities (MBS), totaled $0.7 billion at June 30, 2021 compared to $0.8 billion at March 31, 2021 and $0.9 billion at December 31, 2020. The carrying value of 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 $16.3 billion at June 30, 2021, as compared to $16.3 billion at March 31, 2021 and $16.8 billion at December 31, 2020. At June 30, 2021, March 31, 2021 and December 31, 2020, 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 June 30, 2021, March 31, 2021 and December 31, 2020, the Bank’s short-term liquidity holdings totaled $13.1 billion, $14.8 billion and $11.0 billion, respectively.

The Bank’s retained earnings increased to $1.477 billion at June 30, 2021 from $1.452 billion at March 31, 2021 and $1.408 billion at December 31, 2020. On June 28, 2021, a dividend of $3.3 million was paid to the Bank’s shareholders.

Additional selected financial data as of and for the quarter and six months ended June 30, 2021 (and, for comparative purposes, as of March 31, 2021 and December 31, 2020, and for the quarters ended March 31, 2021 and June 30, 2020 and the six months ended June 30, 2020) 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 June 30, 2021 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 Six Months Ended June 30, 2021

(Unaudited, in thousands)

 

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

Selected Statement of Condition Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Investments (1)

 

$

30,152,031

 

 

$

25,187,292

 

 

$

25,660,696

 

Advances

 

24,922,369

 

 

25,621,279

 

 

32,478,944

 

Mortgage loans held for portfolio, net

 

3,206,071

 

 

3,206,790

 

 

3,422,686

 

Cash and other assets (2)

 

346,688

 

 

7,098,415

 

 

3,350,200

 

Total assets

 

$

58,627,159

 

 

$

61,113,776

 

 

$

64,912,526

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Consolidated obligations

 

 

 

 

 

 

Discount notes

 

$

11,371,181

 

 

$

13,336,683

 

 

$

22,171,296

 

Bonds

 

41,615,443

 

 

41,776,784

 

 

37,112,721

 

Total consolidated obligations

 

52,986,624

 

 

55,113,467

 

 

59,284,017

 

Mandatorily redeemable capital stock

 

6,690

 

 

6,811

 

 

13,864

 

Other liabilities

 

1,842,805

 

 

2,273,704

 

 

2,057,760

 

Total liabilities

 

54,836,119

 

 

57,393,982

 

 

61,355,641

 

Capital

 

 

 

 

 

 

Capital stock — putable

 

2,092,739

 

 

2,008,260

 

 

2,101,380

 

Retained earnings

 

1,476,903

 

 

1,452,202

 

 

1,408,245

 

Total accumulated other comprehensive income

 

221,398

 

 

259,332

 

 

47,260

 

Total capital

 

3,791,040

 

 

3,719,794

 

 

3,556,885

 

Total liabilities and capital

 

$

58,627,159

 

 

$

61,113,776

 

 

$

64,912,526

 

 

 

 

 

 

 

 

Total regulatory capital (3)

 

$

3,576,332

 

 

$

3,467,273

 

 

$

3,523,489

 

 

 

 

 

For the

 

For the

 

For the

 

For the

 

For the

 

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Six Months Ended

 

Six Months Ended

 

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Selected Statement of Income Data:

 

 

 

 

 

 

 

 

 

 

Net interest income (4) (5)

 

$

51,162

 

 

$

80,055

 

 

$

110,099

 

 

$

131,217

 

 

$

155,691

 

Other income (loss)

 

5,656

 

 

(1,576

)

 

(2,630

)

 

4,080

 

 

32,760

 

Other expense

 

25,680

 

 

25,287

 

 

33,074

 

 

50,967

 

 

56,742

 

AHP assessment

 

3,115

 

 

5,319

 

 

7,441

 

 

8,434

 

 

13,175

 

Net income

 

$

28,023

 

 

$

47,873

 

 

$

66,954

 

 

$

75,896

 

 

$

118,534

 

 

 

 

 

 

 

 

 

 

 

 

(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)

At June 30, 2021, March 31, 2021 and December 31, 2020, the Bank’s cash and other assets included excess cash of $0.1 billion, $6.9 billion and $3.1 billion, respectively, that was held at the Federal Reserve.

(3)

As of June 30, 2021, March 31, 2021 and December 31, 2020, total regulatory capital represented 6.10 percent, 5.67 percent and 5.43 percent, respectively, of total assets as of those dates.

(4)

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

(5)

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 June 30, 2021, March 31, 2021 and June 30, 2020, fair value hedge ineffectiveness increased (reduced) net interest income by $(5.757) million, $19.464 million and $9.423 million, respectively. During the six months ended June 30, 2021 and 2020, fair value hedge ineffectiveness increased (reduced) net interest income by $13.707 million and $(27.467) million, respectively.

 

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