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

DALLAS--(BUSINESS WIRE)--The Federal Home Loan Bank of Dallas (Bank) today reported net income of $115.9 million for the quarter ended December 31, 2022. In comparison, for the quarters ended September 30, 2022 and December 31, 2021, the Bank reported net income of $94.7 million and $47.2 million, respectively. For the year ended December 31, 2022, the Bank reported net income of $317.2 million, as compared to $164.4 million for the year ended December 31, 2021.

Total assets at December 31, 2022 were $114.3 billion, compared with $89.6 billion at September 30, 2022 and $63.5 billion at December 31, 2021. The $24.7 billion increase in total assets for the fourth quarter was primarily attributable to increases in the Bank’s advances ($24.7 billion), long-term investments ($1.1 billion) and mortgage loans held for portfolio ($0.2 billion) partially offset by a decrease in the Bank’s short-term liquidity holdings ($1.2 billion). The $50.8 billion increase in total assets for the year ended December 31, 2022 was attributable primarily to increases in the Bank’s advances ($44.3 billion), short-term liquidity holdings ($5.9 billion) and mortgage loans held for portfolio ($0.9 billion), partially offset by a decrease in the Bank’s long-term investments ($0.5 billion).

Advances totaled $68.9 billion at December 31, 2022, compared with $44.2 billion at September 30, 2022 and $24.6 billion at December 31, 2021. The Bank’s mortgage loans held for portfolio totaled $4.4 billion at December 31, 2022, as compared to $4.2 billion at September 30, 2022 and $3.5 billion at December 31, 2021.

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 $0.3 billion at December 31, 2022, compared to $0.3 billion and $0.6 billion at September 30, 2022 and December 31, 2021, respectively. 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 $15.1 billion at December 31, 2022, as compared to $14.0 billion at September 30, 2022 and $15.3 billion at December 31, 2021. At December 31, 2022, September 30, 2022 and December 31, 2021, 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 December 31, 2022, September 30, 2022 and December 31, 2021, the Bank’s short-term liquidity holdings totaled $25.1 billion, $26.3 billion and $19.2 billion, respectively.

The Bank’s retained earnings increased to $1.834 billion at December 31, 2022 from $1.741 billion at September 30, 2022 and $1.558 billion at December 31, 2021. On December 28, 2022, a dividend of $22.6 million was paid to the Bank’s shareholders.

Additional selected financial data as of and for the quarter and year ended December 31, 2022 (and, for comparative purposes, as of September 30, 2022 and December 31, 2021, and for the quarters ended September 30, 2022 and December 31, 2021 and the year ended December 31, 2021) is set forth below. Further discussion and analysis regarding the Bank’s results will be included in its Form 10-K for the year ended December 31, 2022 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 Year Ended December 31, 2022
(Unaudited, in thousands)
	December 31, 2022		September 30, 2022		December 31, 2021
Selected Statement of Condition Data:
Assets
Investments (1)	$	40,613,512	$	40,729,299	$	34,653,202
Advances		68,921,869		44,238,384		24,637,464
Mortgage loans held for portfolio, net		4,395,175		4,240,222		3,491,265
Cash and other assets		418,000		342,927		706,445
Total assets	$	114,348,556	$	89,550,832	$	63,488,376
Liabilities
Consolidated obligations
Discount notes	$	46,270,265	$	29,590,696	$	11,003,026
Bonds		59,946,458		51,838,498		44,514,220
Total consolidated obligations		106,216,723		81,429,194		55,517,246
Mandatorily redeemable capital stock		7,453		12,895		6,657
Other liabilities		2,123,303		3,107,324		4,030,782
Total liabilities		108,347,479		84,549,413		59,554,685
Capital
Capital stock — putable		3,984,105		3,012,726		2,192,504
Retained earnings		1,834,446		1,741,128		1,558,417
Total accumulated other comprehensive income		182,526		247,565		182,770
Total capital		6,001,077		5,001,419		3,933,691
Total liabilities and capital	$	114,348,556	$	89,550,832	$	63,488,376
Total regulatory capital (2)	$	5,826,004	$	4,766,749	$	3,757,578

	For the		For the			For the		For the			For the
	Quarter Ended		Quarter Ended			Quarter Ended		Year Ended			Year Ended
	December 31, 2022		September 30, 2022			December 31, 2021		December 31, 2022			December 31, 2021
Selected Statement of Income Data:
Net interest income (3) (4)	$	151,292	$	136,097		$	79,073	$	479,672		$	277,547
Other income (loss)		7,194		(6,097	)		1,563		(25,446	)		10,243
Other expense		29,695		24,804			28,170		101,713			105,147
AHP assessment		12,886		10,525			5,246		35,268			18,266
Net income	$	115,905	$	94,671		$	47,220	$	317,245		$	164,377

(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 December 31, 2022, September 30, 2022 and December 31, 2021, total regulatory capital represented 5.09 percent, 5.32 percent and 5.92 percent, respectively, of total assets as of those dates.
(3)	Net interest income is net of the provision (reversal) for mortgage loan losses.
(4)	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 December 31, 2022, September 30, 2022 and December 31, 2021, fair value hedge ineffectiveness increased (reduced) net interest income by $(22.630) million, $3.130 million and $1.140 million, respectively. During the years ended December 31, 2022 and 2021, fair value hedge ineffectiveness increased (reduced) net interest income by $(5.688) million and $23.780 million, respectively.