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

DALLAS – (COMMERCIAL THREAD) – The Federal Home Loan Bank of Dallas (Bank) today reported net income of $ 41.3 million for the quarter ended September 30, 2021. By comparison, for the quarters ended June 30, 2021 and September 30, 2020, the Bank reported revenues of $ 28.0 million and $ 47.7 million, respectively. For the nine-month period ended September 30, 2021, the Bank reported net income of $ 117.2 million, compared to $ 166.2 million for the nine-month period ended September 30, 2020.

Total assets as at September 30, 2021 were $ 60.2 billion, compared to $ 58.6 billion as at June 30, 2021 and $ 64.9 billion as at December 31, 2020. The increase of 1, $ 6 billion of total assets for the third quarter is mainly attributable to an increase in the Bank’s short positions – term cash ($ 1.9 billion), partially offset by a decrease in long-term investments ( $ 0.2 billion). The decrease of $ 4.7 billion in total assets for the nine-month period ended September 30, 2021 is mainly due to the decrease in advances ($ 7.7 billion) and long-term investments (0 , $ 9 billion), partially offset by an increase in the Bank’s short-term cash holdings ($ 4.0 billion).

Advances totaled $ 24.8 billion as at September 30, 2021, compared to $ 24.9 billion as at June 30, 2021 and $ 32.5 billion as at December 31, 2020. The Bank’s mortgages held in the portfolio totaled 3.3 billion $ as at September 30, 2021, compared to $ 3.2 billion as at June 30, 2021 and $ 3.4 billion as at December 31, 2020.

The carrying value of the Bank’s portfolio of held-to-maturity securities, which consists primarily of US agency residential mortgage-backed securities (MBS), totaled $ 0.7 billion as at September 30, 2021, compared to $ 0.7 billion as at June 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 consists primarily of debentures of US agencies and commercial MBS of US agencies, totaled $ 16.1 billion as of September 30, 2021, compared to $ 16.3 billion as of June 30, 2021 and $ 16.8 billion as of December 31, 2020. As at September 30, 2021, June 30, 2021 and December 31, 2020, the Bank also held a $ 0.1 billion long-term U.S. Treasury note classified as a trading security.

The Bank’s short-term liquidity holdings generally consist of interest-bearing overnight deposits, overnight federal funds sold, overnight repurchase agreements, US Treasuries, bonds Treasury and, from time to time, may also include cash held in the Federal Reserve. . As at September 30, 2021, June 30, 2021 and December 31, 2020, the Bank’s short-term cash holdings totaled $ 15.0 billion, $ 13.1 billion and $ 11.0 billion, respectively.

The Bank’s retained earnings increased to $ 1.515 billion as at September 30, 2021, from $ 1.477 billion as at June 30, 2021, and $ 1.408 billion as at December 31, 2020. On September 28, 2021, a dividend of $ 3.3 million of dollars was paid to the shareholders of the Bank.

Selected additional financial data as of and for the three and nine months ended September 30, 2021 (and, for comparison purposes, June 30, 2021 and December 31, 2020, and for the quarters ended June 30, 2021 and September 30 , 2020 and the nine months ended September 30, 2020) is presented below. Further discussions and analysis regarding the Bank’s results will be included in its Form 10-Q for the quarter ended September 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, established by Congress in 1932. The bank is a member-owned cooperative that supports housing and community development by providing loans at competitive prices (called 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

In and for the three months and nine months ended September 30, 2021

(Unaudited, in thousands)

September 30, 2021

June 30, 2021

December 31, 2020

Selected condition statement data:

Assets

Investments (1)

$

31 686 391

$

30 152 031

$

25,660,696

Advances

24 775 990

24 922 369

32 478 944

Mortgage loans held for the portfolio, net

3,337,821

3,206,071

3,422,686

Cash and other assets (2)

402,554

346 688

3,350,200

Total assets

$

60 202 756

$

58 627 159

$

64 912 526

Liabilities

Consolidated commitments

Coupons

$

5 155 955

$

11,371,181

$

22 171 296

Obligations

49,193,449

41 615 443

37 112 721

Total consolidated commitments

54,349,404

52 986 624

59 284 017

Mandatory redeemable share capital

6 653

6 690

13,864

Other liabilities

1 983 608

1 842 805

2,057,760

Total responsibilities

56 339 665

54 836 119

61 355 641

Capital city

Social capital – putable

2,154,894

2,092,739

2 101 380

Retained earnings

1 514 831

1,476,903

1,408,245

Cumulative total of other comprehensive income

193,366

221,398

47,260

Total capital

3,863,091

3,791,040

3,556,885

Total liabilities and capital

$

60 202 756

$

58 627 159

$

64 912 526

Total regulatory capital (3)

$

3,676,378

$

3,576,332

$

3,523,489

For the

For the

For the

For the

For the

Quarter ended

Quarter ended

Quarter ended

Nine months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Selected data from the income statement:

Net interest income (4) (5)

$

67,257

$

51 162

$

79,457

$

198,474

$

235,148

Other income (losses)

4,600

5 656

(708)

8,680

32,052

Other expenses

26,010

25,680

25,731

76 977

82,473

AHP Assessment

4,586

3 115

5,305

13,020

18,480

Net revenue

$

41 261

$

28,023

$

47,713

$

117,157

$

166,247

(1)

Investments consist of 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 September 30, 2021, June 30, 2021 and December 31, 2020, the Bank’s cash and other assets included excess liquidity of $ 0.2 billion, $ 0.1 billion and $ 3.1 billion, respectively, which were held at the Federal Reserve.

(3)

As at September 30, 2021, June 30, 2021 and December 31, 2020, total regulatory capital represented 6.11%, 6.10% and 5.43%, respectively, of total assets on those dates.

(4)

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

(5)

The Bank records the ineffectiveness of the hedging 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 September 30, 2021, June 30, 2021 and September 30, 2020, the ineffectiveness of fair value hedges increased (reduced) net interest income by $ 8.933 million, ($ 5.757) million and $ 4.629 million, respectively. During the nine months ended September 30, 2021 and 2020, the ineffectiveness of the fair value hedge increased (reduced) net interest income by $ 22.640 million and $ (22.838) million, respectively.

Bernadine J. Perkins