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

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DALLAS, October 28, 2021--(BUSINESS WIRE)--The Federal Home Loan Bank of Dallas (Bank) today reported net income of $41.3 million for the quarter ended September 30, 2021. In comparison, for the quarters ended June 30, 2021 and September 30, 2020, the Bank reported net income of $28.0 million and $47.7 million, respectively. For the nine months ended September 30, 2021, the Bank reported net income of $117.2 million, as compared to $166.2 million for the nine months ended September 30, 2020.

Total assets at September 30, 2021 were $60.2 billion, compared with $58.6 billion at June 30, 2021 and $64.9 billion at December 31, 2020. The $1.6 billion increase in total assets for the third quarter was primarily attributable to an increase in the Bank's short-term liquidity holdings ($1.9 billion), partially offset by a decrease in long-term investments ($0.2 billion). The $4.7 billion decrease in total assets for the nine months ended September 30, 2021 was attributable primarily to decreases in the Bank's advances ($7.7 billion) and long-term investments ($0.9 billion), partially offset by an increase in the Bank's short-term liquidity holdings ($4.0 billion).

Advances totaled $24.8 billion at September 30, 2021, compared with $24.9 billion at June 30, 2021 and $32.5 billion at December 31, 2020. The Bank's mortgage loans held for portfolio totaled $3.3 billion at September 30, 2021, as compared to $3.2 billion at June 30, 2021 and $3.4 billion at December 31, 2020.

The carrying value of the Bank's long-term held-to-maturity securities portfolio, which is comprised substantially of U.S. agency residential mortgage-backed securities (MBS), totaled $0.7 billion at September 30, 2021 compared to $0.7 billion at June 30, 2021 and $0.9 billion at December 31, 2020. The carrying value of 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 $16.1 billion at September 30, 2021, as compared to $16.3 billion at June 30, 2021 and $16.8 billion at December 31, 2020. 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 trading.

The Bank's short-term liquidity holdings are typically comprised of overnight interest-bearing deposits, overnight federal funds sold, 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. At September 30, 2021, June 30, 2021 and December 31, 2020, the Bank's short-term liquidity holdings totaled $15.0 billion, $13.1 billion and $11.0 billion, respectively.

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

Additional selected financial data as of and for the quarter and nine months ended September 30, 2021 (and, for comparative purposes, as of 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 set forth below. Further discussion 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, 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 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

As of and For the Quarter and Nine Months Ended September 30, 2021

(Unaudited, in thousands)

September 30, 2021

June 30, 2021

December 31, 2020

Selected Statement of Condition 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 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 obligations

Discount notes

$

5,155,955

$

11,371,181

$

22,171,296

Bonds

49,193,449

41,615,443

37,112,721

Total consolidated obligations

54,349,404

52,986,624

59,284,017

Mandatorily redeemable capital stock

6,653

6,690

13,864

Other liabilities

1,983,608

1,842,805

2,057,760

Total liabilities

56,339,665

54,836,119

61,355,641

Capital

Capital stock — putable

2,154,894

2,092,739

2,101,380

Retained earnings

1,514,831

1,476,903

1,408,245

Total accumulated 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 Statement of Income Data:

Net interest income (4) (5)

$

67,257

$

51,162

$

79,457

$

198,474

$

235,148

Other income (loss)

4,600

5,656

(708)

8,680

32,052

Other expense

26,010

25,680

25,731

76,977

82,473

AHP assessment

4,586

3,115

5,305

13,020

18,480

Net income

$

41,261

$

28,023

$

47,713

$

117,157

$

166,247

(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)

At September 30, 2021, June 30, 2021 and December 31, 2020, the Bank's cash and other assets included excess cash of $0.2 billion, $0.1 billion and $3.1 billion, respectively, that was held at the Federal Reserve.

(3)

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

(4)

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

(5)

The Bank records 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 September 30, 2021, June 30, 2021 and September 30, 2020, fair value hedge ineffectiveness 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, fair value hedge ineffectiveness increased (reduced) net interest income by $22.640 million and $(22.838) million, respectively.

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Contacts

Corporate Communications
Federal Home Loan Bank of Dallas
fhlb.com
(214) 441-8445

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