Market Overview

Federal Home Loan Bank of Dallas Reports Second Quarter 2018 Operating Results

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The Federal Home Loan Bank of Dallas (Bank) today reported net income of
$48.8 million for the quarter ended June 30, 2018. In comparison, for
the quarters ended March 31, 2018 and June 30, 2017, the Bank reported
net income of $41.7 million and $43.8 million, respectively. For the six
months ended June 30, 2018, the Bank reported net income of $90.6
million, as compared to $78.9 million for the six months ended June 30,
2017.

The $7.1 million increase in net income from the first quarter of 2018
to the second quarter of 2018 was attributable to an increase in the
Bank's net interest income ($7.9 million) and a decrease in its
non-interest expenses ($1.8 million), offset by a decrease in its
non-interest income ($1.8 million) and an increase in its AHP assessment
($0.8 million).

The $5.0 million increase in net income for the second quarter of 2018,
as compared to the second quarter of 2017, was attributable to an
increase in the Bank's net interest income ($14.5 million), offset by a
decrease in its non-interest income ($7.5 million) and increases in its
non-interest expenses ($1.4 million) and its AHP assessment ($0.6
million).

Total assets at June 30, 2018 were $75.9 billion, compared with $65.1
billion at March 31, 2018 and $68.5 billion at December 31, 2017. The
$10.8 billion increase in total assets for the second quarter was
attributable primarily to increases in the Bank's advances ($8.3
billion), short-term liquidity portfolio ($2.3 billion) and mortgage
loans held for portfolio ($0.3 billion). The $7.4 billion increase in
total assets for the six months ended June 30, 2018 was attributable
primarily to increases in the Bank's advances ($7.1 billion), long-term
investments ($0.6 billion) and mortgage loans held for portfolio ($0.4
billion), partially offset by a decrease in the Bank's short-term
liquidity portfolio ($0.6 billion).

Advances totaled $43.6 billion at June 30, 2018, compared with $35.3
billion at March 31, 2018 and $36.5 billion at December 31, 2017. The
Bank's mortgage loans held for portfolio totaled $1.3 billion at June
30, 2018, as compared to $1.0 billion at March 31, 2018 and $0.9 billion
at December 31, 2017.

The Bank's long-term held-to-maturity securities portfolio, which is
comprised substantially of U.S. agency residential mortgage-backed
securities (MBS), totaled approximately $1.8 billion, $1.9 billion and
$1.9 billion at June 30, 2018, March 31, 2018 and December 31, 2017,
respectively. 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 $15.1 billion at June 30, 2018,
as compared to $15.0 billion at March 31, 2018 and $14.4 billion at
December 31, 2017. At June 30, 2018, March 31, 2018 and December 31,
2017, the Bank also held a $0.1 billion long-term U.S. Treasury Note
classified as trading.

The Bank's short-term liquidity portfolio, which is comprised
substantially of overnight federal funds sold, overnight reverse
repurchase agreements, U.S. Treasury Bills and U.S. Treasury Notes with
short remaining terms, totaled $13.9 billion at June 30, 2018, compared
to $11.6 billion at March 31, 2018 and $14.5 billion at December 31,
2017.

The Bank's retained earnings increased to $1.0 billion at June 30, 2018
from $972 million at March 31, 2018 and $942 million at December 31,
2017. On June 27, 2018, a dividend of $13.6 million was paid to the
Bank's shareholders.

Additional selected financial data as of and for the quarter and six
months ended June 30, 2018 (and, for comparative purposes, as of
March 31, 2018 and December 31, 2017, and for the quarters ended
March 31, 2018 and June 30, 2017 and the six months ended June 30, 2017)
is set forth below. Further discussion and analysis regarding the Bank's
second quarter results will be included in its Form 10-Q for the quarter
ended June 30, 2018 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 825 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 Ended June 30, 2018
(Unaudited, in thousands)
 
    June 30, 2018     March 31, 2018     December 31, 2017
Selected Statement of Condition Data:
 
Assets
Investments (1) $ 30,807,424 $ 28,571,090 $ 30,941,464
Advances 43,589,555 35,303,746 36,460,524
Mortgage loans held for portfolio, net 1,321,815 1,019,382 877,852
Cash and other assets   221,083   205,614   244,461
Total assets $ 75,939,877 $ 65,099,832 $ 68,524,301
 
Liabilities
Consolidated obligations
Discount notes $ 39,322,407 $ 26,641,297 $ 32,510,758
Bonds   31,141,214   33,502,435   31,376,858
Total consolidated obligations 70,463,621 60,143,732 63,887,616
Mandatorily redeemable capital stock 824 832 5,941
Other liabilities   1,563,113   1,356,263   1,150,718
Total liabilities   72,027,558   61,500,827   65,044,275
Capital
Capital stock — putable 2,660,055 2,350,943 2,317,937
Retained earnings 1,007,688 972,435 941,763
Total accumulated other comprehensive income   244,576   275,627   220,326
Total capital   3,912,319   3,599,005   3,480,026
Total liabilities and capital $ 75,939,877 $ 65,099,832 $ 68,524,301
 
Total regulatory capital (2) $ 3,668,567 $ 3,324,210 $ 3,265,641
 
                     
For the For the For the For the For the
Quarter Ended Quarter Ended Quarter Ended Six Months Ended Six Months Ended
June 30, 2018 March 31, 2018 June 30, 2017 June 30, 2018 June 30, 2017
Selected Statement of Income Data:
Net interest income (3) $ 76,005 $ 68,093 $ 61,514 $ 144,098 $ 114,260
Other income 425 2,274 7,890 2,699 16,447
Other expense 22,169 23,991 20,774 46,160 43,034
AHP assessment   5,427   4,640   4,867   10,067   8,772
Net income $ 48,834 $ 41,736 $ 43,763 $ 90,570 $ 78,901
 
(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) As of June 30, 2018, March 31, 2018 and December 31, 2017, total
regulatory capital represented 4.83 percent, 5.11 percent and 4.77
percent, respectively, of total assets as of those dates.
 
(3) Net interest income is net of the provision for loan losses.
 

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