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BOSTON — The Federal Home Loan Bank of Boston (the Bank) announced the following unaudited results for the quarter ended June 30, 2007:

Second Quarter 2007 Balance-Sheet Highlights
Total assets rose 4.9 percent to $60.3 billion at June 30, 2007, up from $57.5 billion at yearend 2006. Advances increased 4.0 percent to $38.8 billion, compared with $37.3 billion at yearend 2006, and represented 64.5 percent of total assets. The increase in advances was primarily the result of increases in fixed-rate and variable-rate advances that were partially offset by a decrease in overnight advances. Investments and short-term money-market instruments rose to $16.7 billion at June 30, 2007, up from $15.2 billion at yearend 2006. Mortgage assets declined to $4.3 billion at June 30, 2007, compared with $4.5 billion at yearend 2006. Capital rose slightly to $2.6 billion at June 30, 2007, compared with $2.5 billion at yearend 2006.

Second Quarter 2007 Operating Results
Net income for the second quarter was $40.1 million, compared with $46.8 million for the same period in 2006. This $6.7 million decrease was due, in part, to a decrease of $4.0 million in net interest income (from $76.3 million to $72.3 million) as well as net fair value adjustments attributable to the Bank’s hedging activities and trading portfolio, which also reduced net income by $3.8 million. These negative variances were partially offset by reductions in assessments that are based on a fixed percentage of net income. The $4.0 million decrease to net interest income was primarily attributable to lower average advances and mortgage loan balances, which were partially offset by increased lower-yielding average investment balances in 2007 as compared to 2006. In addition, the Bank’s net interest spread for the second quarter of 2007 was 0.26 percent, a two-basis-point decline from the net interest spread for the same period in 2006.

The Federal Home Loan Bank of Boston is a cooperatively owned wholesale bank for housing finance in the six New England states. Its mission is to support the residential-mortgage and community-development lending activities of its members, which include over 460 financial institutions across New England. To accomplish its mission, the Bank utilizes private-sector capital to provide members and other qualified customers with reliable access to low-cost wholesale funds, liquidity, a competitive outlet for the sale of loans, special lending programs, technical assistance, and other products and services.

For more information, see the Bank's backgrounder.