Federal Home Loan Bank of Dallas Reports Second Quarter 2022 Operating Results

DALLAS–(BUSINESS WIRE)–Federal Home Loan Bank of Dallas (Bank) today reported net income of $65.6 million for the quarter ended June 30, 2022. In comparison, for the quarters ended March 31, 2022 and the June 30, 2021, the Bank reported net income revenue of $41.1 million and $28.0 million, respectively. For the six months ended June 30, 2022, the Bank reported net income of $106.7 million, compared to $75.9 million for the six months ended June 30, 2021.

Total assets as of June 30, 2022 were $77.7 billion, compared to $62.6 billion as of March 31, 2022 and $63.5 billion as of December 31, 2021. The increase of $15.1 billion of total assets in the second quarter is mainly attributable to the increase in bank advances ($9.6 billion), short-term cash ($5.2 billion) and mortgages held for the portfolio ($0.3 billion). The $14.2 billion increase in total assets for the six months ended June 30, 2022 is primarily attributable to higher advances from the Bank ($11.8 billion), short-term liquidity ( $3.7 billion) and mortgages held for the portfolio ($0.5 billion), partially offset by a decrease in the Bank’s long-term investments ($1.9 billion).

Advances totaled $36.4 billion as at June 30, 2022, compared to $26.8 billion as at March 31, 2022 and $24.6 billion as at December 31, 2021. Bank mortgages held for the portfolio totaled 4.0 billion as of June 30, 2022, compared to $3.7 billion as of June 30, 2022. March 31, 2022 and $3.5 billion as of December 31, 2021.

The book value of the Bank’s long-term held-to-maturity securities portfolio, which consists primarily of US agency residential mortgage-backed securities (MBS), totaled $0.4 billion as of 30 June 31, 2022, compared to $0.6 billion at March 31, 2022 and December 31, 2021. The carrying value of the Bank’s long-term available-for-sale portfolio, which consists primarily of U.S. agency debentures and commercial MBS from U.S. agencies, totaled $13.6 billion as of June 30, 2022, compared to $13.5 billion as of March 31, 2022 and $15.3 billion as of December 31, 2021. As of June 30, 2022, March 31, 2022 and December 31, 2021, the Bank also held a long-term US Treasury note of $0.1 billion classified as a transaction.

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 at June 30, 2022, March 31, 2022 and December 31, 2021, the Bank’s short-term liquidity totaled $22.9 billion, $17.7 billion and $19.2 billion, respectively.

The Bank’s retained earnings decreased from $1.596 billion at March 31, 2022 to $1.558 billion at December 31, 2021 to $1.657 billion at June 30, 2022. On June 28, 2022, a dividend of $4.4 million dollars was paid to the shareholders of the Bank.

Certain additional financial data as at and for the quarter ended June 30, 2022 (and, for comparative purposes, as at March 31, 2022 and December 31, 2021 and for the quarters ended March 31, 2022 and June 30, 2021 and the six months ended June 30, 2021) is presented below. Further discussion and analysis regarding the Bank’s results will be included in its Form 10-Q for the quarter ended June 30, 2022 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 June 30, 2022

(Unaudited, in thousands)

June 30, 2022

March 31, 2022

December 31, 2021

Condition statement data selected:

Assets

Investments (1)

$

37,053,619

$

31,255,476

$

34,653,202

Advances

36,375,762

26,763,391

24,637,464

Mortgages held for the portfolio, net

3,985,872

3,730,693

3,491,265

Cash and other assets

299,471

855 981

706,445

Total assets

$

77 714 724

$

62 605 541

$

63,488,376

Passives

Consolidated bonds

Coupons

$

29,622,896

$

15,062,428

$

11,003,026

Obligations

40,944,088

41,475,972

44,514,220

Total consolidated commitments

70,566,984

56,538,400

55,517,246

Compulsory reimbursable share capital

13,698

15,980

6,657

Other liabilities

2,501,920

1,988,946

4,030,782

Total responsibilities

73,082,602

58,543,326

59,554,685

Capital

Share capital — redeemable

2,798,381

2,291,216

2,192,504

Retained earnings

1,657,025

1,595,842

1,558,417

Accumulated other comprehensive income

176,716

175 157

182,770

total capital

4,632,122

4,062,215

3,933,691

Total liabilities and capital

$

77 714 724

$

62 605 541

$

63,488,376

Total regulatory capital (2)

$

4,469,104

$

3,903,038

$

3,757,578

For the

For the

For the

For the

For the

Quarter ended

Quarter ended

Quarter ended

Semester completed

Semester completed

June 30, 2022

March 31, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Selected income statement data:

Net interest income (3) (4)

$

102,098

$

90 185

$

51,162

$

192 283

$

131 217

Other income (losses)

(5,712

)

(20,831

)

5,656

(26,543

)

4,080

Other expenses

23,547

23,667

25,680

47,214

50,967

AHP Assessment

7,288

4,569

3,115

11,857

8,434

Net revenue

$

65,551

$

41,118

$

28,023

$

106,669

$

75,896

(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 June 30, 2022, March 31, 2022 and December 31, 2021, total regulatory capital represented 5.75%, 6.23% and 5.92% of total assets respectively at those dates.

(3)

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

(4)

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 in accounting for hedging activities.” During the quarters ended June 30, 2022, March 31, 2022 and June 30, 2021, fair value hedge ineffectiveness increased (decreased) net income by interest of $1.409 million, $12.403 million and ($5.757) During the six months ended June 30, 2022 and 2021, fair value hedge ineffectiveness increased net interest income by $13.812 million and $13.707 million, respectively.

Bernadine J. Perkins