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

DALLAS--(BUSINESS WIRE)--The Federal Home Loan Bank of Dallas (Bank) today reported net income of $47.9 million for the quarter ended March 31, 2021. In comparison, for the quarters ended December 31, 2020 and March 31, 2020, the Bank reported net income of $32.5 million and $51.6 million, respectively.

Total assets at March 31, 2021 were $61.1 billion, compared with $64.9 billion at December 31, 2020. The $3.8 billion decrease in total assets for the first quarter was attributable primarily to decreases in the Bank's advances ($6.9 billion), long-term investments ($0.6 billion) and mortgage loans held for portfolio ($0.2 billion), partially offset by an increase in its short-term liquidity holdings ($3.8 billion).

Advances totaled $25.6 billion at March 31, 2021, compared with $32.5 billion at December 31, 2020. The Bank's mortgage loans held for portfolio totaled $3.2 billion at March 31, 2021, as compared to $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 $0.8 billion at March 31, 2021 compared to $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 $16.3 billion at March 31, 2021, as compared to $16.8 billion at December 31, 2020. At March 31, 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 March 31, 2021 and December 31, 2020, the Bank's short-term liquidity holdings totaled $14.8 billion and $11.0 billion, respectively.

The Bank's retained earnings increased to $1.452 billion at March 31, 2021 from $1.408 billion at December 31, 2020. On March 30, 2021, a dividend of $3.9 million was paid to the Bank's shareholders.

Additional selected financial data as of and for the quarter ended March 31, 2021 (and, for comparative purposes, as of December 31, 2020, and for the quarters ended December 31, 2020 and March 31, 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 March 31, 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 Ended March 31, 2021 (Unaudited, in thousands)
	March 31, 2021		December 31, 2020
Selected Statement of Condition Data:
Assets
Investments (1)	$	25,187,292	$	25,660,696
Advances	25,621,279		32,478,944
Mortgage loans held for portfolio, net	3,206,790		3,422,686
Cash and other assets (2)	7,098,415		3,350,200
Total assets	$	61,113,776	$	64,912,526
Liabilities
Consolidated obligations
Discount notes	$	13,336,683	$	22,171,296
Bonds	41,776,784		37,112,721
Total consolidated obligations	55,113,467		59,284,017
Mandatorily redeemable capital stock	6,811		13,864
Other liabilities	2,273,704		2,057,760
Total liabilities	57,393,982		61,355,641
Capital
Capital stock — putable	2,008,260		2,101,380
Retained earnings	1,452,202		1,408,245
Total accumulated other comprehensive income	259,332		47,260
Total capital	3,719,794		3,556,885
Total liabilities and capital	$	61,113,776	$	64,912,526
Total regulatory capital (3)	$	3,467,273	$	3,523,489

	For the		For the		For the
	Quarter Ended		Quarter Ended		Quarter Ended
	March 31, 2021		December 31, 2020		March 31, 2020
Selected Statement of Income Data:
Net interest income (4) (5)	$	80,055	$	74,831	$	45,592
Other income (loss)	(1,576)		107		35,390
Other expense	25,287		38,869		23,668
AHP assessment	5,319		3,607		5,734
Net income	$	47,873	$	32,462	$	51,580

(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 March 31, 2021 and December 31, 2020, the Bank's cash and other assets included excess cash of $6.9 billion and $3.1 billion, respectively, that was held at the Federal Reserve.
(3)	As of March 31, 2021 and December 31, 2020, total regulatory capital represented 5.67 percent and 5.43 percent, respectively, of total assets as of those dates.
(4)	Net interest income is net of the provision 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 March 31, 2021, December 31, 2020 and March 31, 2020, fair value hedge ineffectiveness increased (reduced) net interest income by $19.464 million, $7.856 million and $(36.890) million, respectively.