Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Federal Home Loan Bank of Pittsburgh | d691026d8k.htm |
 Exhibit 99.1
WELCOME
Regional Conferences
March 2014 |
 Cautionary Statement Regarding
Forward-Looking Information
2
Statements contained in these slides, including statements describing the objectives, projections,
estimates, or predictions of the future of the Bank, may be “forward-looking
statements.” These statements may use forward-looking terms, such as “anticipates,”
“believes,” “could,” “estimates,” “may,” “should,”
“will,” or their negatives or other variations on these terms. The Federal Home Loan
Bank of Pittsburgh (the Bank) cautions that, by their nature, forward-looking statements involve risk or uncertainty and that
actual results could differ materially from those expressed or implied in these forward-looking
statements or could affect the extent to which a particular objective, projection, estimate, or
prediction is realized. These forward-looking statements involve risks and uncertainties
including, but not limited to, the following: economic and market conditions, including, but not limited to, real estate,
credit and mortgage markets; volatility of market prices, rates, and indices related to financial
instruments; political, legislative, regulatory, litigation, or judicial events or actions;
changes in assumptions used in the quarterly Other-Than-Temporary Impairment (OTTI)
process; risks related to mortgage-backed securities; changes in the assumptions used in the allowance for
credit losses; changes in the Bank’s capital structure; changes in the Bank’s capital
requirements; membership changes; changes in the demand by Bank members for Bank advances; an
increase in advances’ prepayments; competitive forces, including the availability of other
sources of funding for Bank members; changes in investor demand for consolidated obligations and/or the
terms of interest rate exchange agreements and similar agreements; changes in the FHLBank
System’s debt rating or the Bank’s rating; the ability of the Bank to introduce new
products and services to meet market demand and to manage successfully the risks associated
with new products and services; the ability of each of the other FHLBanks to repay the principal and interest on
consolidated obligations for which it is the primary obligor and with respect to which the Bank has
joint and several liability; applicable Bank policy requirements for retained earnings and the
ratio of the market value of equity to par value of capital stock; the Bank’s ability to
maintain adequate capital levels (including meeting applicable regulatory capital requirements); business and
capital plan adjustments and amendments; technology risks; and timing and volume of market activity.
We do not undertake to update any forward-looking information. Some of the data set forth
herein is unaudited. |
 2013
Highlights and 2014 Strategy Winthrop Watson
March 2014
a |
 2013
Highlights: Delivering Member Value •
Increased member activity
•
Strong financial performance
•
Increased contributions to the Affordable Housing
Program
•
Technology improvements that support operational
integrity |
 Advance and Asset Trend
6
$41.2
$29.7
$30.6
$40.5
$50.3
$65.3
$53.4
$52.0
$64.6
$70.7
$25
$50
$75
12/09
12/10
12/11
12/12
12/13
Advances
Assets |
 Increased Member Activity -
Advances
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2009
2010
2011
2012
2013
Top Ten
Borrowers
-
2.0
4.0
6.0
8.0
10.0
12.0
2009
2010
2011
2012
2013
Membership
Minus Top Ten |
 Letters of Credit
7
$8.5
$9.6
$6.6
$7.2
$14.7
$5
$10
$15
12/09
12/10
12/11
12/12
12/13 |
 Mortgages Held for Portfolio (MPF Program)
8
$5.2
$4.5
$3.9
$3.5
$3.2
$1.2
$1.3
$1.3
$1.5
$1.6
$-
$2
$4
$6
12/09
12/10
12/11
12/12
12/13
MPF
Original |
 Market Value / Capital Stock
74%
93%
97%
115%
128%
50%
100%
150%
12/09
12/10
12/11
12/12
12/13
Par |
 Net
Income 4
$(37.5)
$8.3
$38.0
$129.7
$147.8
$(50)
$-
$50
$100
$150
2009
2010
2011
2012
2013 |
 Increased AHP Contributions
In millions
$0
$2
$4
$6
$8
$10
$12
$14
$16
2009
2010
2011
2012
2013 |
 Excess Capital Stock Repurchased
Monthly
repurchases
began
$1.2
$1.9
$1.3
$0.6
$0.0
$-
$1
$2
12/09
12/10
12/11
12/12
12/13 |
 Dividend
11
0.10%
0.10%
0.10%
0.43%
0.32%
0.29%
1.00%
1.50%
2.50%
0.0%
1.0%
2.0%
3.0%
12/09
12/10
12/11
12/12
12/13
Dividend
3-month LIBOR |
 Earned Dividend Spread (EDS)
5
EDS -
Return on member capital stock in excess of 3-month LIBOR |
 Dividend Considerations
•
Specific factors that will impact
the amount of future dividends
include:
–
The
level of retained
earnings with respect to the
Bank’s retained earnings
target and total AOCI
–
Market value to capital
stock ratio above 90%
–
Adequate excess regulatory
capital
–
Positive quarterly GAAP
earnings
Retained Earnings Framework |
 Dividend Considerations
Regulatory Capital
Retained Earnings net of AOCI
Net Income
Market Value / Capital Stock |
 High Performance FHLBank
17
2013 –
2017 Strategic Plan
Build Strength and
Flexibility
Embrace Operational
Excellence
Serve the Membership
Vitalize Communities |
 High
Performance FHLBank Historically
Currently
Prospectively |
 Capital Stock Plan Changes
Kris Williams
March 2014 |
 Objectives of the Capital Stock Plan
•
Assure a fair and equitable allocation of the Bank’s
capital needs and requirements between total
membership and activity-based users of the cooperative
•
Support effective management and capitalization of the
Bank’s balance sheet
–
Membership liquidity
•
Enable the Bank to meet our regulatory capital
requirements
–
Capital ratio
–
Leverage ratio
–
Risk-based capital |
 Current Capital Stock Plan Recap
–
Membership:
0.35% of MAV
–
Advances:
4.00% (effective September 2013)
–
MPF:
4.00%
–
Letters of Credit (LCs):
0.75% (effective March 18, 2014)
•
Plan consists of membership and activity requirements
•
Activity-based capital accounts for the majority of
contributed capital
•
Recap of current requirements:
•
Similar structure to most FHLBanks |
 Why
Modify the Capital Stock Plan? •
Bank’s Strategic Plan calls for revision of the Capital
Plan to make it:
•
Retained earnings have grown considerably and will
account for an increasing percentage of capital
1.
More dynamic and reflective of the projected growth in retained
earnings
2.
An active tool to create subclasses of stock and potential to
reward product usage |
 Capital Plan Modifications Summary
** B1 may be tied to a market benchmark
Component
Current
Proposed
Stock requirement range
Advances
3.00% -
6.00%
2.00% -
6.00%
Letters of Credit
0.00% -
3.00%
0.00% -
4.00%
Forward starting advances*
None
0.00% -
6.00%
Stock subclasses
None
B2 -
Activity
Dividend distinctions
None
May declare different
dividends for each
subclass (intend for B2
dividend to exceed B1
dividend)**
* Applies to advances starting more than 30 days from trade date
** For example, B1 dividend may be tied to a benchmark
B1 -
Membership
|