CINCINNATI, April 29, 2024 /PRNewswire/ -- The Federal Home Loan Bank of Cincinnati (the FHLB) today released unaudited financial results for the first quarter ended March 31, 2024. Overview Throughout the first quarter of 2024, the FHLB successfully delivered on its dual mission of providing access to critical liquidity funding to member financial institutions and expanding support for affordable housing and community investment. The FHLB recognizes that funding in addition to the required 10 percent statutory Affordable Housing Program (AHP) assessments is beneficial to support affordable housing and community investment needs. In the first quarter of 2024, $17 million was allocated to the required AHP and $16 million was provided to voluntary housing programs. For 2024, the Board of Directors has committed to a minimum of $38 million, or approximately five percent of prior year income subject to assessments, in voluntary housing contributions to support the FHLB's Housing and Community Investment programs. Operating Results For the first quarter, net income was $146 million and return on average equity (ROE) was 9.30 percent. This compares to net income of $127 million and ROE of 8.03 percent for the same period of 2023. Net income increased primarily because of higher average interest rates, which increased the earnings generated from investing the FHLB's capital, and higher spreads earned on certain Advances driven by a shift in the composition of balances from overnight to longer-term and floating rate products. Additionally, net income increased because net losses due to changes in market values on derivatives and related financial instruments carried at fair value were lower in the first three months of 2024 than the net losses in the same period of 2023. Financial Condition Highlights Total assets at March 31, 2024 were $118.6 billion, a decrease of $5.4 billion (four percent) from year-end 2023. Mission Assets and Activities – comprising the major products we offer to members including Advances, Letters of Credit (off-balance sheet), and the Mortgage Purchase Program – were $130.0 billion at March 31, 2024, an increase of $2.2 billion (two percent) from year-end 2023. The growth in Mission Assets and Activities was driven primarily by increases in Letters of Credit. Letters of Credit increased as members continue to use them primarily to secure higher levels of public unit deposits. The FHLB's business model is designed to support significant changes in asset levels without having to undergo material changes in staffing, operations, risk practices, or general resource needs. Total investments at March 31, 2024 were $37.9 billion, a decrease of $4.8 billion (11 percent) from year-end 2023, which was primarily driven by a decline in liquidity investments. Total investments included $18.9 billion of mortgage-backed securities (MBS) issued by Fannie Mae, Freddie Mac or Ginnie Mae and $19.0 billion of liquidity investments. Liquidity investments can vary significantly on a daily basis to support actual and anticipated borrowing needs of members and in order to meet all current and anticipated financial commitments. The FHLB exceeded all minimum regulatory capital and liquidity requirements. On March 31, 2024, GAAP capital was $6.3 billion, a decrease of $0.1 billion (one percent) from year-end 2023. The GAAP and regulatory capital-to-assets ratios were 5.35 percent and 5.39 percent, respectively, at March 31, 2024. Retained earnings were $1.7 billion at March 31, 2024, an increase of two percent from year-end 2023. Dividend The FHLB paid its stockholders a cash dividend on March 21, 2024 at a 9.00 percent annualized rate, which was 3.69 percentage points above the first quarter average Secured Overnight Financing Rate. Housing and Community Investment The FHLB is required to annually set aside a portion of its profits for grants supporting affordable housing. These funds assist members in serving very low-, low-, and moderate-income households and community economic development. The FHLB's net income for the first quarter of 2024 resulted in an accrual of $17 million to the Affordable Housing Program (AHP) pool of funds available. The AHP consists of a competitive program and a homeownership program called Welcome Home, which assists homebuyers with down payments and closing costs. The FHLB's Board of Directors also affirmed its commitment to affordable housing by approving voluntary housing contributions of $16 million in the first three months of 2024. These funds are in addition to the required AHP contributions. The Carol M. ...