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

DALLAS–(BUSINESS WIRE)–Federal Home Loan Bank of Dallas (Bank) today reported net income of $47.9 million for the quarter ended March 31, 2021. In comparison, for the quarters ended December 31, 2020 and the March 31, 2020, the Bank reported net income revenue of $32.5 million and $51.6 million, respectively.

Total assets as of March 31, 2021 were $61.1 billion, compared to $64.9 billion as of December 31, 2020. The $3.8 billion decrease in total assets in the first quarter was primarily due to lower advances from the Bank ($6.9 billion), long-term investments ($0.6 billion) and mortgages held for the portfolio ($0.2 billion), partially offset by an increase in its short-term liquidity ($3.8 billion).

Advances totaled $25.6 billion as at March 31, 2021, compared to $32.5 billion as at December 31, 2020. Bank mortgages held for the portfolio totaled $3.2 billion as at March 31, 2021, compared to 3, $4 billion as of December 31, 2020.

The book value of the Bank’s long-term held-to-maturity securities portfolio, which consists primarily of U.S. agency residential mortgage-backed securities (MBS), totaled $0.8 billion as at March 31. 2021, compared to $0.9 billion as at December 31, 2020. The carrying value of the Bank’s long-term available-for-sale portfolio, which consists primarily of U.S. agency debentures and agency commercial mortgage-backed securities notes, totaled $16.3 billion as at March 31, 2021, compared to $16.8 billion as at December 31, 2020. As at March 31, 2021 and December 31, 2020, the Bank also held a long-term $0.1 billion classified as transactional.

The Bank’s short-term liquidity generally consists of interest-bearing overnight deposits, sold overnight federal funds, 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. As of March 31, 2021 and December 31, 2020, the Bank’s short-term liquidity totaled $14.8 billion and $11.0 billion, respectively.

The Bank’s retained earnings increased from $1.408 billion as of December 31, 2020 to $1.452 billion as of March 31, 2021. On March 30, 2021, a dividend of $3.9 million was paid to shareholders of the Bank .

Additional selected financial data as at and for the quarter ended March 31, 2021 (and, for comparative purposes, as at December 31, 2020, and for the quarters ended December 31, 2020 and March 31, 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 March 31, 2021 to be filed with the Securities and Exchange Commission.

About 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 established by Congress in 1932. The Bank is a member-owned cooperative that supports housing and community development by providing competitively priced loans (called advances) and other credit products to approximately 800 member 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 ended March 31, 2021

(Unaudited, in thousands)

March 31, 2021

December 31, 2020

Condition statement data selected:

Assets

Investments (1)

$

25,187,292

$

25,660,696

Advances

25,621,279

32,478,944

Mortgages held for the portfolio, net

3,206,790

3,422,686

Cash and other assets (2)

7,098,415

3,350,200

Total assets

$

61,113,776

$

64,912,526

Passives

Consolidated bonds

Coupons

$

13,336,683

$

22,171,296

Obligations

41,776,784

37,112,721

Total consolidated obligations

55,113,467

59 284 017

Compulsory reimbursable share capital

6,811

13,864

Other liabilities

2,273,704

2,057,760

Total responsibilities

57,393,982

61,355,641

Capital city

Share capital — redeemable

2,008,260

2,101,380

Retained earnings

1,452,202

1,408,245

Accumulated other comprehensive income

259,332

47,260

total capital

3,719,794

3,556,885

Total liabilities and capital

$

61,113,776

$

64,912,526

Total regulatory capital (3)

$

3,467,273

$

3,523,489

For the

For the

For the

Quarter ended

Quarter ended

Quarter ended

March 31, 2021

December 31, 2020

March 31, 2020

Selected income statement data:

Net interest income (4) (5)

$

80,055

$

74,831

$

45,592

Other income (losses)

(1,576)

107

35,390

Other expenses

25,287

38,869

23,668

AHP Assessment

5,319

3,607

5,734

Net revenue

$

47,873

$

32,462

$

51,580

(1)

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

(2)

As of March 31, 2021 and December 31, 2020, the Bank’s cash and other assets included excess cash of $6.9 billion and $3.1 billion, respectively, held at the Federal Reserve.

(3)

As of March 31, 2021 and December 31, 2020, total regulatory capital represented 5.67% and 5.43% of total assets respectively at those dates.

(4)

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

(5)

The Bank recognizes 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 March 31, 2021, December 31, 2020 and March 31, 2020, fair value hedge ineffectiveness increased (decreases) net interest income by $19.464 million, $7.856 million and ($36.890) million, respectively.

Bernadine J. Perkins