Federal Home Loan Bank of Dallas Reports Fourth Quarter and Full Year 2021 Operating Results

DALLAS–(BUSINESS WIRE)–Federal Home Loan Bank of Dallas (Bank) today reported net income of $47.2 million for the quarter ended December 31, 2021. In comparison, for the quarters ended September 30, 2021 and the As of December 31, 2020, the Bank reported net income revenue of $41.3 million and $32.5 million, respectively. For the year ended December 31, 2021, the Bank reported net income of $164.4 million, compared to $198.7 million for the year ended December 31, 2020.

Total assets as of December 31, 2021 were $63.5 billion, compared to $60.2 billion as of September 30, 2021 and $64.9 billion as of December 31, 2020. The increase of 3, $3 billion of total assets in the fourth quarter was mainly attributable to the increase in the bank’s short-term liquidity. term cash ($4.2 billion) and mortgages held for the portfolio ($0.2 billion), partially offset by decreases in long-term investments ($0.9 billion) and advances ($0.2 billion). The $1.4 billion decrease in total assets for the year ended December 31, 2021 is primarily due to lower advances from the Bank ($7.9 billion) and long-term investments ( $1.8 billion), partially offset by the increase in the Bank’s short-term liquidity. ($8.2 billion) and mortgages held for the portfolio ($0.1 billion).

Advances totaled $24.6 billion as at December 31, 2021, compared to $24.8 billion as at September 30, 2021 and $32.5 billion as at December 31, 2020. Bank mortgages held for the portfolio totaled 3.5 billion as of December 31, 2021, compared to $3.3 billion as of December 31, 2021. September 30, 2021 and $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 $0.6 billion as at December 31. 2021, compared to $0.7 billion as at September 30, 2021. and $0.9 billion as at December 31, 2020. The carrying value of the Bank’s long-term available-for-sale securities portfolio, which mainly consists of U.S. Agencies and U.S. Agency Commercial MBS, totaled $15.3 billion as of December 31, 2021, compared to $16.1 billion as of September 30, 2021 and $16.8 billion as of December 31, 2020. 2021, September 30, 2021 and December 31, 2020, the Bank also held a long-term US Treasury note of $0.1 billion classified as .

The Bank’s short-term liquidity is generally comprised 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 at December 31, 2021, September 30, 2021 and December 31, 2020, the Bank’s short-term liquidity totaled $19.2 billion, $15.0 billion and $11.0 billion, respectively.

The Bank’s retained earnings decreased from $1.515 billion at September 30, 2021 to $1.408 billion at December 31, 2020 to $1.558 billion at December 31, 2021. On December 28, 2021, a dividend of $3.6 million dollars was paid to the shareholders of the Bank.

Selected supplemental financial data as at and for the quarter and year ended December 31, 2021 (and, for comparative purposes, September 30, 2021 and December 31, 2020, and for the quarters ended September 30, 2021 and December 31, 2021 2020 and the year ended December 31, 2020) is presented below. Further discussion and analysis regarding the Bank’s results will be included in its Form 10-K for the year ended December 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 at and for the three months and year ended December 31, 2021

(Unaudited, in thousands)

December 31, 2021

September 30, 2021

December 31, 2020

Condition declaration data selected:

Assets

Investments (1)

$

34,653,202

$

31,686,391

$

25,660,696

Advances

24,637,464

24,775,990

32,478,944

Mortgages held for the portfolio, net

3,491,265

3,337,821

3,422,686

Cash and other assets (2)

706,445

402 554

3,350,200

Total assets

$

63,488,376

$

60,202,756

$

64,912,526

Passives

Consolidated bonds

Coupons

$

11,003,026

$

5,155,955

$

22,171,296

Obligations

44,514,220

49 193 449

37,112,721

Total consolidated obligations

55,517,246

54,349,404

59 284 017

Compulsory reimbursable share capital

6,657

6,653

13,864

Other liabilities

4,030,782

1,983,608

2,057,760

Total responsibilities

59,554,685

56,339,665

61,355,641

Capital city

Share capital — redeemable

2,192,504

2,154,894

2,101,380

Retained earnings

1,558,417

1,514,831

1,408,245

Accumulated other comprehensive income

182,770

193,366

47,260

total capital

3,933,691

3,863,091

3,556,885

Total liabilities and capital

$

63,488,376

$

60,202,756

$

64,912,526

Total regulatory capital (3)

$

3,757,578

$

3,676,378

$

3,523,489

For the

For the

For the

For the

For the

Quarter ended

Quarter ended

Quarter ended

Year ended

Year ended

December 31, 2021

September 30, 2021

December 31, 2020

December 31, 2021

December 31, 2020

Selected income statement data:

Net interest income (4) (5)

$

79,073

$

67,257

$

74,831

$

277,547

$

309,979

Other income

1,563

4,600

107

10,243

32,159

Other expenses

28,170

26,010

38,869

105 147

121,342

AHP Assessment

5,246

4,586

3,607

18,266

22,087

Net revenue

$

47,220

$

41,261

$

32,462

$

164,377

$

198 709

(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 at December 31, 2021, September 30, 2021 and December 31, 2020, the Bank’s cash and other assets included excess cash of $0.5 billion, $0.2 billion and $3.1 billion, respectively, which was held at the Federal Reserve.

(3)

As of December 31, 2021, September 30, 2021 and December 31, 2020, total regulatory capital represented 5.92%, 6.11% and 5.43% of total assets respectively at those dates.

(4)

Net interest income is net of the allowance (reversal) 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 December 31, 2021, September 30, 2021 and December 31, 2020, fair value hedge ineffectiveness increased net interest income by $1.140 million, $8.933 million and $7.856 million. dollars, respectively. During the years ended December 31, 2021 and 2020, the ineffectiveness of the fair value hedge increased (decreased) net interest income by $23.780 million and ($14.982) million, respectively.

Bernadine J. Perkins