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

·6-min read

DALLAS, July 29, 2021--(BUSINESS WIRE)--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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210729006025/en/

Contacts

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

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