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| 8-K - PRIMARY DOCUMENT - Federal Home Loan Bank of New York | form_8-k.htm |
December
3, 2018
TO:
All
Stockholders
(Addressed
Individually)
SUBJECT:
Report from the
President
At the Bank
Developing a Market for Our Members
On
November 13, the Federal Home Loan Bank System issued $4 billion in
debt tied to the Secured Overnight Financing Rate
(“SOFR”), the alternative rate developed by the Federal
Reserve to replace LIBOR. This is a significant step, both for the
FHLBank System and the market: as the leading issuer of
LIBOR-linked securities, the Federal Home Loan Banks have a unique
role and responsibility in both the development of the SOFR market
and the transition away from LIBOR. As Federal Reserve Vice
Chairman for Supervision Randal Quarles stated, “The Federal
Home Loan Banks are taking an important next step in the continued
development of SOFR markets.”
In an
interview on the issuance, John Fisk – CEO of the Federal
Home Loan Bank System’s Office of Finance, which manages the
issuance of our consolidated obligations – noted that it is
the System’s intention to be a regular and consistent issuer
of SOFR-denominated debt. It is our belief that the System’s
commitment to an effective transition to SOFR will strengthen our
execution of our mission to provide reliable liquidity to our
members. As Mr. Fisk stated, “we need to be there and help
develop the market for our members.”
To that
end, we are committed to supporting our members’ transition
needs through both access to reliable and diversified funding and
product development. On the funding side, our leadership in the
market’s transition to SOFR will strengthen our ability to
source reliable liquidity to help our members meet their balance
sheet needs. And internally, on November 19, we announced our new
SOFR-Linked Adjustable Rate Credit Advance, which allows members to
transact floating-rate advances using the SOFR index. The
transition from LIBOR to SOFR is a significant milestone for the
environment in which we operate, and we are focused on ensuring
that this transition is as smooth as possible for both our
cooperative and our members. After all, our strategic vision is to
be a balanced provider of liquidity to members in all operating
environments.
A Record Round
It was
pure coincidence that our 49th round of grant
funding for the Affordable Housing Program consisted of 49 grants,
but this bit of chance reflects the AHP’s ability to continue
to amaze after nearly 30 years of its existence. This year, we
awarded $44.3 million – the highest single round award amount
in the history of our program – to help those 49 projects
create or preserve more than 3,000 affordable homes.
Since
its inception in 1989, the AHP has been one of the most reliable
and effective sources of grant funding for affordable housing
initiatives. But we continue to work to strengthen the program. In
2018, we saw significant returns on these efforts: 15 of the 49
grants went to projects in which the applicants resubmitted
applications from prior years. The success of these resubmissions
reflects both our team’s ability to work with organizations
to strengthen their AHP applications, and the ongoing commitment of
these organizations to providing affordable homes for those who
need them most. We are proud to support their efforts.
FHLBNY Board Update
Each
year, our Board reviews the AHP applications and approves the
projects that will receive funds. It is an example of the guidance
our active and involved Board provides to management throughout the
year, working with us to remain focused on our mission while
growing and strengthening. Another such example came at the
Board’s November meeting, when it voted to approve the
implementation of a $100 million cap on Membership Capital Stock
effective January 1, 2019. We believe that this action will
strengthen the dividend, and enable us to be efficient in our use
of capital while also ensuring that we have sufficient capital to
meet our needs and take advantage of business
opportunities.
Our
Board plays a key role in the success of our franchise. And in
January 2019, our Board will once again be operating at full
strength. At its November meeting, the Board voted to appoint
candidates to fill two vacancies with terms running through
December 31, 2020 that had resulted from Director retirements
earlier this year: Stephen Romaine, chairman of Tompkins Trust
Company, will serve as a New York Member Director; and Charles
Kilbourne, III, managing director of the Financial Services
Volunteer Corps, will serve as an Independent Director and Public
Interest Director. And, as we previously reported, our membership
in early November voted to re-elect for four year terms Directors
Kevin Cummings and Christopher Martin to serve as New Jersey Member
Directors; David Nasca to serve as a New York Member Director; and
Richard Mroz to serve as an Independent Director. Additionally,
David Huber, who will retire as chief financial officer of Horizon
Blue Cross Blue Shield of New Jersey at year-end, was elected by
our members to serve as an Independent Director. Finally, at its
November meeting, the Board elected Vice Chairman Larry Thompson to
continue to serve as vice chair for a two-year term commencing
January 1, 2019, reflecting the strong leadership he has shown over
the past year in the role.
With a
strong and complete Board, an experienced management team and
talented and dedicated colleagues across the FHLBNY, our
cooperative is positioned to continue to succeed in 2019. And as we
close out 2018 and begin to focus on the New Year, I hope you will
continue to invest in our franchise. Whether by taking advantage of
the daily availability of our advances, or accessing the AHP and
our other Community Investment Programs, your partnership with the
FHLBNY strengthens the communities in which we live and
work.
My
colleagues and I wish you all the best this holiday season, and we
look forward to working with you to help ensure a strong close to
2018 and a successful 2019.
Sincerely,
José
R. González
President
and Chief Executive Officer
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Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
This
report may contain forward-looking statements within the meaning of
the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based upon our
current expectations and speak only as of the date hereof. These
statements may use forward-looking terms, such as
“projected,” “expects,” “may,”
or their negatives or other variations of these terms. 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, regulatory and
accounting rule adjustments or requirements, changes in interest
rates, changes in projected business volumes, changes in prepayment
speeds on mortgage assets, the cost of our funding, changes in our
membership profile, the withdrawal of one or more large members,
competitive pressures, shifts in demand for our products, and
general economic conditions. We undertake no obligation to
revise or update publicly any forward-looking statements for any
reason.
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