News for Insurance Companies
Welcome to our winter 2026 newsletter exclusively for insurance companies that are FHLBank Boston members.
Fourth Quarter 2025 Dividend
On Friday, February 13, 2026, FHLBank Boston announced its fourth quarter earnings for 2025, declaring a dividend equal to an annual yield of 7.05%. This is the daily average SOFR plus 300 points. The dividend will be credited to your IDEAL Way Account on March 3, 2026. Read more.
Cost of One-Year FHLBank Boston Funding
The cost of one-year FHLBank Boston funding is less than the one-year U.S. Treasury bill rate when taking the FHLBank Boston dividend into account. See below:
| 1-year Classic Advance Rate= 3.62% | Dividend Value | Net Cost of Funding is less than yield on 1-Year Treasury bill |
|---|---|---|
| 3.62% vs 3.48% (1-year Treasury bill)=14 basis points | 21.8 basis points (assumes stock is purchased using additional borrowing to avoid tying up other funds) | (14-21.8)=-7.8 basis points |
Daily Cash Manager Rate – 3.91%
FHLBank Boston’s overnight rate (Daily Cash Manager Advance) was 3.91% as of February 18, 2026. This means that for every $1 million that you borrowed on that day, the interest costs were only $108 per day. By borrowing periodically from FHLBank Boston, you can better manage your portfolio. Use the Bank for liquidity needs instead of holding excess cash or liquidating securities at unfavorable terms.
Borrow before noon: Rates are 3 basis points less when you borrow before noon.
Seasonal Cash Volatility
Many insurance companies have seasonal swings in cash needs. FHLBank Boston funding is a perfect way to manage these periods of high liquidity needs.
Tuesday and Thursday Morning Specials
Reminder: FHLBank Boston discounts the one-, two-, three- and six-month fixed-rate Classic Advances by 3 basis points every Tuesday and Thursday between 10:00 a.m. and 10:45 a.m.
Have You Considered the HLB-Option Advance?
FHLBank Boston’s highly popular HLB-Option Advance allows you to borrow at lower rates by selling the option to FHLBank Boston to put funding back to the member before maturity at pre-determined intervals. Tailor the maturity, lockout period, and call frequency to meet your funding needs.
Example: An HLB-Option Advance with a three-year maturity and a one-year lockout was priced at rate of 3.32% on February 17, 2026. In comparison, the 12-month Classic Advance was 3.62% while the three-year Classic Advance was 3.61%. At the end of the 12 months, if the coupon is above the rate available on a comparable structure, FHLBank Boston is likely to put the advance back to the member. If it is below, the advance will likely not have the option exercised.
Insurance Company Membership Continues to Grow
The FHLBank System has 609 insurance company members, which accounts for $177.7 billion of advances. Just 10 years ago, there were only 329 members accounting for $79.8 billion in advances. With 85 members, FHLBank Boston has the most insurance company members out of 11 FHLBanks nationwide. Membership is up from 38 ten years ago.
Collateral – Municipal Securities
FHLBank Boston recently announced that if a municipal security pledged as collateral has any real estate nexus, 100% of the market value will be used. In other words, you do not need to pro-rate the value based on the portion used for real estate. Please note that all other requirements still apply.
Overall, this will expand the borrowing capacity from using municipal securities. To make it easier, we have a list of municipal securities that are already approved – Municipal securities already determined to meet eligibility real estate nexus.
