FHLB CINCINNATI ANNOUNCES 2024 RESULTS

CINCINNATI, Feb. 20, 2025 /PRNewswire/ — The Federal Home Loan Bank of Cincinnati (the FHLB) today released unaudited financial results for the year ended December 31, 2024.

Overview

Throughout 2024, the FHLB successfully delivered on its dual mission of providing access to ongoing liquidity funding to member financial institutions and expanding support for affordable housing and community investment. The FHLB also maintained strong profitability, which enabled it to pay a competitive return to stockholders, make meaningful contributions to affordable housing and grow capital by increasing retained earnings. Overall, the FHLB contributed $110 million to support affordable housing and community investment needs during 2024. Specifically, $68 million was allocated to the required Affordable Housing Program (AHP) and $42 million was provided through the FHLB’s voluntary housing programs. The FHLB recognizes that funding in addition to the required 10 percent statutory AHP assessment is beneficial to affordable housing and community investment and voluntarily committed to increase its support by at least 50 percent above the statutory AHP level in 2024.

Operating Results

• Net income for 2024 was $608 million and return on average equity (ROE) was 9.48 percent, compared to net income of $668 million and ROE of 9.63 percent for 2023. For the fourth quarter, net income was $154 million and ROE was 9.53 percent. This compares to net income of $153 million and ROE of 9.33 percent for the same period of 2023.
  
  
• The decrease in net income in 2024 compared to 2023 was primarily due to lower spreads earned on mortgage loans held for portfolio, lower average Advance balances and the increased voluntary housing contributions noted above. However, these factors were partially offset by higher spreads earned on mortgage-backed securities.

Financial Condition Highlights

• Total assets at December 31, 2024 were $132.3 billion, an increase of $8.3 billion (seven percent) from year-end 2023.
  
  
• Mission Assets and Activities – comprising the major products we offer to members including Advances, Letters of Credit (off-balance sheet), and the Mortgage Purchase Program – were $135.6 billion at December 31, 2024, an increase of $7.8 billion (six percent) from year-end 2023. The growth in Mission Assets and Activities at year-end 2024 was driven primarily by an increase in Advances as members continue to have strong demand for liquidity. The FHLB’s business model is designed to support significant changes in asset levels without having to undergo material changes in staffing, operations, risk practices, or general resource needs.
  
  
• Total investments at December 31, 2024 were $45.1 billion, an increase of $2.5 billion (six percent) from year-end 2023, which was primarily driven by an increase in liquidity investments. Total investments included $18.8 billion of mortgage-backed securities (MBS) issued by Fannie Mae, Freddie Mac or Ginnie Mae and $26.3 billion of liquidity investments. Liquidity investments can vary significantly on a daily basis to support actual and anticipated borrowing needs of members and to meet all current and anticipated financial commitments.
  
  
• The FHLB exceeded all minimum regulatory capital and liquidity requirements. On December 31, 2024, GAAP capital was $6.7 billion, an increase of $0.3 billion (five percent) from year-end 2023. The GAAP and regulatory capital-to-assets ratios were 5.09 percent and 5.13 percent, respectively, at December 31, 2024. Retained earnings were $1.8 billion at December 31, 2024, an increase of $181 million (11 percent) from year-end 2023.

Dividend

• The FHLB paid its stockholders a cash dividend on December 19, 2024 at a 9.00 percent annualized rate, which was 4.33 percentage points above the fourth quarter average Secured Overnight Financing Rate.

Housing and Community Investment

• Statutory AHP Assessments. The FHLB is required to annually set aside 10 percent of its profits to support affordable housing. These funds assist members in serving very low-, low-, and moderate-income households. The FHLB’s net income for 2024 resulted in an accrual of $68 million to the AHP pool of funds, which will be awarded to members in 2025 through the AHP offerings. The AHP consists of a competitive program, which supports the creation and preservation of affordable housing, and a homeownership program called Welcome Home, which assists homebuyers with down payments and closing costs.
  
  
• Voluntary Housing Contributions. The FHLB’s Board of Directors also affirmed its commitment to affordable housing by approving total voluntary housing contributions of $42 million during 2024. These funds are in addition to the required AHP contributions.
  
  
  • The Carol M. Peterson (CMP) Housing Fund was allocated $15 million during 2024. This program provides grants to cover accessibility and emergency repairs for special needs and elderly homeowners within the Fifth District.
    
    
  • The Welcome Home program was funded through the required AHP allocation plus an additional $16 million voluntary contribution in order to help fulfill a record number of requests during 2024.
    
    
  • The Rise Up program received contributions of $6 million during 2024. This program offers grants of $25,000 for down payment, closing cost, and principal reduction assistance for first-generation homebuyers who are looking to purchase their first home in Franklin County, Ohio.
    
    
  • The Disaster Reconstruction Program disbursed approximately $1 million for the replacement or repair of homes damaged or destroyed by natural disasters within the Fifth District.
    
    
  • An additional $4 million was committed as a supplemental voluntary AHP contribution to ensure the amount of total AHP contributions equals what it would have been absent any voluntary housing contributions, which reduce net income before assessments and statutory AHP assessments.

The FHLB expects to file its 2024 Form 10-K with the Securities and Exchange Commission on or about March 20, 2025.

About the FHLB

The FHLB is a AA+ rated wholesale cooperative bank owned by 605 member financial institutions, including commercial banks, thrifts, credit unions, insurance companies and community development financial institutions in Kentucky, Ohio and Tennessee. The FHLB provides members access to products and services (primarily Advances, which are a readily available, low-cost source of funds, purchases of certain mortgage loans from members, and issuance of Letters of Credit to members) and a competitive return through quarterly dividends on their capital investment in the FHLB. The FHLB funds these products and services by raising private-sector capital from member-stockholders and, with the other Federal Home Loan Banks (FHLBanks) in the FHLBank System, issuing high-quality debt in the global capital markets. The FHLB also funds community investment programs that help its members create affordable housing and promote community economic development.

This news release may contain forward-looking statements that are subject to risks and uncertainties that could affect the FHLB’s financial condition and results of operations. These include, but are not limited to: the effects of economic, financial, and market conditions; legislative or regulatory developments concerning the FHLBank System; financial pressures affecting other FHLBanks; pandemics; competitive forces; and other risks detailed from time to time in the FHLB’s annual report on Form 10-K and other filings with the Securities and Exchange Commission. The forward-looking statements speak as of the date made and are not guarantees of future performance. Actual results or developments could differ materially from the expectations expressed or implied in the forward-looking statements, and the FHLB undertakes no obligation to update any such statements.

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SOURCE Federal Home Loan Bank of Cincinnati