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Federal Home Loan Bank of Dallas Reports Fourth Quarter and Full Year 2020 Operating Results

·6-min read

The Federal Home Loan Bank of Dallas (Bank) today reported net income of $32.5 million for the quarter ended December 31, 2020. In comparison, for the quarters ended September 30, 2020 and December 31, 2019, the Bank reported net income of $47.7 million and $61.7 million, respectively. For the year ended December 31, 2020, the Bank reported net income of $198.7 million, as compared to $227.3 million for the year ended December 31, 2019.

Total assets at December 31, 2020 were $64.9 billion, compared with $66.3 billion at September 30, 2020 and $75.4 billion at December 31, 2019. The $1.4 billion decrease in total assets for the fourth quarter was attributable primarily to decreases in the Bank's advances ($1.8 billion), long-term investments ($0.4 billion) and mortgage loans held for portfolio ($0.3 billion), offset by an increase in its short-term liquidity holdings ($1.1 billion). The $10.5 billion decrease in total assets for the year ended December 31, 2020 was attributable primarily to decreases in the Bank's short-term liquidity holdings ($4.8 billion), advances ($4.6 billion), mortgage loans held for portfolio ($0.7 billion) and long-term investments ($0.3 billion).

Advances totaled $32.5 billion at December 31, 2020, compared with $34.3 billion at September 30, 2020 and $37.1 billion at December 31, 2019. The Bank's mortgage loans held for portfolio totaled $3.4 billion at December 31, 2020, as compared to $3.7 billion at September 30, 2020 and $4.1 billion at December 31, 2019.

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 approximately $0.9 billion at December 31, 2020 compared to $1.0 billion at September 30, 2020 and $1.2 billion at December 31, 2019. 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 $16.8 billion at December 31, 2020, as compared to $17.1 billion at September 30, 2020 and $16.8 billion at December 31, 2019. At December 31, 2020, September 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 December 31, 2020, September 30, 2020 and December 31, 2019, the Bank's short-term liquidity holdings totaled $11.0 billion, $9.9 billion and $15.8 billion, respectively.

The Bank's retained earnings increased to $1.408 billion at December 31, 2020 from $1.380 billion at September 30, 2020 and $1.233 billion at December 31, 2019. On December 31, 2020, a dividend of $4.3 million was paid to the Bank's shareholders.

Additional selected financial data as of and for the quarter and year ended December 31, 2020 (and, for comparative purposes, as of September 30, 2020 and December 31, 2019, and for the quarters ended September 30, 2020 and December 31, 2019 and the year ended December 31, 2019) is set forth below. Further discussion and analysis regarding the Bank's results will be included in its Form 10-K for the year ended December 31, 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 Year Ended December 31, 2020
(Unaudited, in thousands)

December 31, 2020

September 30, 2020

December 31, 2019

Selected Statement of Condition Data:

Assets

Investments (1)

$

25,660,696

$

28,049,888

$

33,918,055

Advances

32,478,944

34,292,478

37,117,455

Mortgage loans held for portfolio, net

3,422,686

3,705,344

4,075,464

Cash and other assets

3,350,200

248,143

270,631

Total assets

$

64,912,526

$

66,295,853

$

75,381,605

Liabilities

Consolidated obligations

Discount notes

$

22,171,296

$

26,739,876

$

34,327,886

Bonds

37,112,721

34,099,828

35,745,827

Total consolidated obligations

59,284,017

60,839,704

70,073,713

Mandatorily redeemable capital stock

13,864

13,810

7,140

Other liabilities

2,057,760

1,911,178

1,502,784

Total liabilities

61,355,641

62,764,692

71,583,637

Capital

Capital stock — putable

2,101,380

2,181,608

2,466,242

Retained earnings

1,408,245

1,380,050

1,232,677

Total accumulated other comprehensive income (loss)

47,260

(30,497

)

99,049

Total capital

3,556,885

3,531,161

3,797,968

Total liabilities and capital

$

64,912,526

$

66,295,853

$

75,381,605

Total regulatory capital (2)

$

3,523,489

$

3,575,468

$

3,706,059

For the

For the

For the

For the

For the

Quarter Ended

Quarter Ended

Quarter Ended

Year Ended

Year Ended

December 31, 2020

September 30, 2020

December 31, 2019

December 31, 2020

December 31, 2019

Selected Statement of Income Data:

Net interest income (3) (4)

$

74,831

$

79,457

$

90,811

$

309,979

$

293,175

Other income (loss)

107

(708

)

2,299

32,159

56,320

Other expense

38,869

25,731

24,572

121,342

96,965

AHP assessment

3,607

5,305

6,858

22,087

25,272

Net income

$

32,462

$

47,713

$

61,680

$

198,709

$

227,258

(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 December 31, 2020, September 30, 2020 and December 31, 2019, total regulatory capital represented 5.43 percent, 5.39 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 December 31, 2020, September 30, 2020 and December 31, 2019, fair value hedge ineffectiveness increased net interest income by $7.856 million, $4.629 million and $13.335 million, respectively. During the years ended December 31, 2020 and 2019, fair value hedge ineffectiveness reduced net interest income by $14.982 million and $17.909 million, respectively.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210223005953/en/

Contacts

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