​Financial Results

The Bank’s board of directors has declared a dividend equal to an annual yield of 7.38%, the daily average of the Secured Overnight Financing Rate for the second quarter of 2025 plus 300 basis points. The dividend, based on average stock outstanding for the second quarter of 2025, will be paid on August 4, 2025. As always, dividends remain at the discretion of the board.

“FHLBank Boston had steady financial performance during the second quarter primarily driven by member demand for advances and residential mortgage acquisitions,” said President and CEO Timothy J. Barrett. “Income from these activities allowed us to support affordable homeownership and economic development throughout New England through a $5.2 million required contribution to our Affordable Housing Program (AHP) and voluntary contributions to AHP and our other housing and community investment programs totaling $22.4 million.”

Second Quarter 2025 Operating Highlights

The Bank’s overall results of operations are influenced by the economy, interest rates and members’ demand for advances. During the second quarter of 2025, the Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate between 425 and 450 basis points. Intermediate-term interest rates declined while long-term interest rates increased during the quarter.

Net income decreased $23.2 million to $47.0 million for the three months ended June 30, 2025, from $70.2 million for the same period of 2024. The decrease in net income was primarily due to a decrease of $10.8 million in net interest income after provision for credit losses and an increase of $11.2 million in discretionary housing and community investment programs expense and voluntary affordable housing program contributions. These results led to a $5.2 million statutory contribution to the Bank’s Affordable Housing Program for the quarter. The Bank made a $20.1 million contribution to our discretionary housing and community investment programs, and a voluntary contribution of $2.2 million to the Affordable Housing Program for the quarter ended June 30, 2025, and has allocated most of its annual budget for these programs.

Net interest income after provision for credit losses for the three months ended June 30, 2025, was $97.8 million, compared with $108.7 million for the corresponding period in 2024. The $10.8 million decrease in net interest income after provision for credit losses was primarily driven by average short-term yields that were approximately 100 basis points lower than during the prior year period, along with a $1.3 million increase in mortgage-backed security net amortization, and a $712 thousand unfavorable variance in net unrealized gains and losses on fair value hedge ineffectiveness, which was attributable to a decrease in intermediate-term interest rates during the three months ended June 30, 2025. Partially offsetting these decreases were increases to net interest income resulting from increases of $3.7 billion, $623.6 million, and $593.6 million in our average outstanding advances, mortgage-backed securities and mortgage loans, respectively, and a $258.9 million increase in average capital.

Net interest spread was 0.25% for the three months ended June 30, 2025, a decrease of 3 basis points from the same period in 2024, and net interest margin was 0.51%, a decrease of 12 basis points from the three months ended June 30, 2024. The decrease in net interest spread and margin was primarily attributable to the decline in net interest income after provision for credit losses discussed above.

June 30, 2025 Balance-Sheet Highlights

Total assets increased $6.7 billion, or 9.3%, to $78.7 billion at June 30, 2025, up from $72.0 billion at year-end 2024. Advances totaled $47.2 billion at June 30, 2025, an increase of $2.0 billion from year-end 2024. Total investments were $27.0 billion at June 30, 2025, an increase of $4.5 billion from $22.5 billion at the prior year end, driven primarily by growth in low-yielding short-term money market instruments held on our balance sheet to manage our liquidity position, and an $852.2 million increase in mortgage-backed securities. Mortgage loans totaled $3.9 billion at June 30, 2025, an increase of $262.2 million from year-end 2024 as mortgage sales to the Bank increased.

Total capital at June 30, 2025, was $4.0 billion, an increase of $124.7 million from $3.9 billion at year-end 2024. During 2025, capital stock increased by $96.8 million, primarily attributable to the increase in advances. Total retained earnings grew to $1.9 billion during 2025, an increase of $22.0 million, or 1.2%, from December 31, 2024. Of this amount, restricted retained earnings totaled $530.0 million at June 30, 2025. Accumulated other comprehensive loss totaled $249.1 million at June 30, 2025, an improvement of $6.0 million from accumulated other comprehensive loss as of December 31, 2024.

The Bank was in compliance with all regulatory capital ratios at June 30, 2025, and in the most recent information available was classified “adequately capitalized” by its regulator, the Federal Housing Finance Agency, based on the Bank’s financial information at March 31, 2025.

Full Earnings Release

To read the entire release, go here.