FHLBank Boston Announces 2025 First Quarter Results and Dividend

The Bank's board of directors has declared a dividend equal to an annual yield of 7.39%, the daily average of the Secured Overnight Financing Rate for the first quarter of 2025 plus 300 basis points. The dividend, based on average stock outstanding for the first quarter of 2025, will be paid on May 2, 2025. As always, dividends remain at the discretion of the board.

"Demand for wholesale funding from our members was steady, and the Bank’s balance sheet remains strong despite market volatility and economic uncertainty,” said President and CEO Timothy J. Barrett. “The Bank was pleased to continue to support housing in New England by making statutory and voluntary contributions to the Affordable Housing Program and voluntary contributions to discretionary housing and community investment programs.”

The Bank’s overall results of operations are influenced by the economy, interest rates and members' demand for advances. During the first 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- and long-term interest rates declined during the quarter, primarily reflecting concerns over the economic outlook.

Net income decreased $20.9 million to $57.0 million for the three months ended March 31, 2025, from $77.8 million for the same period of 2024. The decrease in net income was primarily due to a decrease of $16.5 million in net interest income after provision for credit losses. These results led to a $6.3 million statutory contribution to the Bank's Affordable Housing Program for the quarter. In addition, the Bank made a voluntary contribution of $4.4 million to the Affordable Housing Program and a $4.8 million contribution to our discretionary housing and community investment programs for the quarter ended March 31, 2025.

Net interest income after provision for credit losses for the three months ended March 31, 2025, was $92.8 million, compared with $109.2 million for the corresponding period in 2024. The $16.5 million decrease in net interest income after provision for credit losses was primarily driven by the decrease in yields during the three months ended March 31, 2025, along with an $8.0 million unfavorable variance in net unrealized gains and losses on fair value hedge ineffectiveness, and a $5.1 million increase in mortgage-backed security net amortization, both attributable to a decrease in intermediate- and long-term interest rates during the three months ended March 31, 2025. Partially offsetting these decreases were increases to net interest income resulting from increases of $6.2 billion, $923.5 million, and $623.3 million in our average outstanding advances, mortgage-backed securities and mortgage loans, respectively. Additionally, a $426.9 million increase in average capital contributed to the growth in net interest income.

Net interest spread was 0.22% for the three months ended March 31, 2025, a decrease of nine basis points from the same period in 2024, and net interest margin was 0.49%, a decrease of 18 basis points from the three months ended March 31, 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, resulting from net decreases in interest rates during the quarter.

Total assets increased $4.8 billion, or 6.7%, to $76.8 billion at March 31, 2025, up from $72.0 billion at year-end 2024. Advances totaled $45.4 billion at March 31, 2025, an increase of $264.7 million from year-end 2024. Total investments were $27.0 billion at March 31, 2025, an increase of $4.5 billion from $22.5 billion at the prior year end, driven primarily by growth in short-term money market instruments held on our balance sheet to manage our liquidity needs. Mortgage loans totaled $3.8 billion at March 31, 2025, an increase of $86.1 million from year-end 2024 as mortgage sales to the Bank increased.

Total capital at March 31, 2025, was $3.9 billion, an increase of $68.0 million from $3.9 billion at year-end 2024. During 2025, capital stock increased by $12.2 million, primarily attributable to the increase in advances. Total retained earnings grew to $1.9 billion during 2025, an increase of $15.8 million, or 0.8%, from December 31, 2024. Of this amount, restricted retained earnings totaled $520.6 million at March 31, 2025. Accumulated other comprehensive loss totaled $215.0 million at March 31, 2025, an improvement of $40.0 million from accumulated other comprehensive loss as of December 31, 2024.

The Bank was in compliance with all regulatory capital ratios at March 31, 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 December 31, 2024.

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