Federal Dwelling Mortgage Financial institution of San Francisco Broadcasts Annual and Fourth Quarter 2021 Working Outcomes

SAN FRANCISCO, Feb. 16, 2022 (GLOBE NEWSWIRE) — The Federal Dwelling Mortgage Financial institution of San Francisco (Financial institution) at the moment introduced its 2021 working outcomes. Web earnings for 2021 was $287 million, in contrast with web earnings of $335 million for 2020. Web earnings for the fourth quarter of 2021 was $67 million, in contrast with web earnings of $94 million for the fourth quarter of 2020.

Web earnings of $287 million in 2021 declined $48 million relative to 2020 web earnings, primarily reflecting a discount of $109 million in different earnings/(loss) that was partially offset by an enchancment in credit score losses of $32 million and a rise in web curiosity earnings of $17 million.

The $109 million discount in different earnings/(loss) for 2021 was primarily a results of the Financial institution’s receipt of disgorgement proceeds in reference to a Securities and Change Fee enforcement motion, within the quantity of $85 million, within the third quarter of 2020, and a rise in web honest worth losses of $22 million related to derivatives and monetary devices carried at honest worth.

The $17 million improve in web curiosity earnings for 2021 primarily mirrored decrease funding prices, an enchancment of $46 million in retrospective adjustment of the efficient yields on mortgage loans and associated supply commitments, and a rise of $30 million in web beneficial properties on designated honest worth hedges. These will increase in web curiosity earnings had been partially offset by a decline in common interest-earning property. Moreover, the Financial institution recorded a reversal of credit score losses of $6 million for 2021, primarily related to sure private-label residential mortgage-backed securities (PLRMBS) categorized as available-for-sale (AFS), which largely resulted from improved credit score efficiency and a extra optimistic financial outlook. This reversal of credit score losses for 2021 compares with a provision for credit score losses of $26 million for 2020 related to sure PLRMBS categorized as AFS, which primarily resulted from a major decline in honest values within the first quarter of 2020.

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For the fourth quarter of 2021, web earnings was $67 million, a lower of $27 million relative to the prior yr interval. The lower primarily mirrored a lower in web curiosity earnings of $48 million, which was primarily pushed by a decline in common interest-earning property and a lower of $10 million in web beneficial properties on designated honest worth hedges. These reductions in web earnings had been partially offset by a $20 million enchancment in different earnings/(loss), which primarily mirrored a lower in web honest worth losses of $19 million related to derivatives and monetary devices carried at honest worth.

At December 31, 2021, whole property had been $54.1 billion, a lower of $14.5 billion from $68.6 billion at December 31, 2020. Advances decreased by $14.0 billion, to $17.0 billion at December 31, 2021, from $31.0 billion at December 31, 2020, as demand for advances remained muted in response to substantial market liquidity ensuing from the continuing financial and monetary market impacts of the COVID-19 pandemic, together with authorities intervention. As well as, mortgage loans held for portfolio decreased by $0.9 billion, to $1.0 billion at December 31, 2021, from $1.9 billion at December 31, 2020, as a result of the Financial institution ceased buying new mortgage loans for its personal portfolio on March 31, 2021. These decreases to whole property had been partially offset by a rise in whole investments of $0.6 billion, to $35.8 billion at December 31, 2021, from $35.2 billion at December 31, 2020. The rise in investments primarily mirrored a rise in securities bought below agreements to resell of $8.3 billion and a rise in Federal funds bought of $3.5 billion, which had been partially offset by a discount in U.S. Treasury securities of $8.5 billion because the Financial institution continued to handle its liquidity. A lower of $2.8 billion in mortgage-backed securities (MBS) additionally partially offset the opposite will increase in investments balances.

Amassed different complete earnings elevated by $101 million throughout 2021, to $331 million at December 31, 2021, from $230 million at December 31, 2020, primarily reflecting increased honest values of MBS categorized as AFS.

As of December 31, 2021, the Financial institution complied with all of its regulatory capital necessities. The Financial institution’s whole regulatory capital ratio was 10.9%, exceeding the 4.0% requirement. The Financial institution had $5.9 billion in everlasting capital, exceeding its risk-based capital requirement of $1.1 billion. Complete retained earnings as of December 31, 2021, had been $3.8 billion, in contrast with $3.7 billion at December 31, 2020.

At this time, the Financial institution’s board of administrators declared a quarterly money dividend on the common capital inventory excellent throughout the fourth quarter of 2021 at an annualized charge of 6.00%. The quarterly dividend charge is in step with the Financial institution’s dividend philosophy of endeavoring to pay a quarterly dividend at a charge between 5% and seven% annualized. The quarterly dividend will whole $35 million, and the Financial institution expects to pay the dividend on March 10, 2022.

Monetary Highlights
(Unaudited)
({Dollars} in tens of millions)

1. Investments include Federal funds bought, interest-bearing deposits, buying and selling securities, available-for-sale securities, held-to-maturity securities, and securities bought below agreements to resell.
2. The regulatory capital ratio is calculated as regulatory capital divided by whole property. Regulatory capital contains retained earnings, Class B capital inventory, and mandatorily redeemable capital inventory (which is classed as a legal responsibility) however excludes collected different complete earnings/(loss). Complete regulatory capital as of December 31, 2021 and 2020, was $5.9 billion and $6.0 billion, respectively.
3. Web curiosity margin is calculated as web curiosity earnings (annualized) divided by common interest-earning property.
4. Money dividend declared, recorded, and paid throughout the interval, on the common capital inventory excellent throughout the earlier quarter.

Federal Dwelling Mortgage Financial institution of San Francisco
The Federal Dwelling Mortgage Financial institution of San Francisco is a member-driven cooperative serving to native lenders in Arizona, California, and Nevada construct robust communities, create alternative, and alter lives for the higher. The instruments and sources we offer to our member monetary establishments–business banks, credit score unions, industrial mortgage corporations, financial savings establishments, insurance coverage corporations, and group improvement monetary establishments–foster homeownership, broaden entry to high quality housing, seed or maintain small companies, and revitalize complete neighborhoods. Along with our members and different companions, we’re making the communities we serve extra vibrant and resilient.

Secure Harbor Assertion below the Personal Securities Litigation Reform Act of 1995
This press launch comprises forward-looking statements inside the which means of the “protected harbor” provisions of the Personal Securities Litigation Reform Act of 1995, together with statements associated to the Financial institution’s dividend philosophy and dividend charges. These statements are based mostly on our present expectations and communicate solely as of the date hereof. These statements could use forward-looking phrases, resembling “endeavoring,” “will,” and “expects,” or their negatives or different variations on these phrases. The Financial institution cautions that by their nature, forward-looking statements contain threat or uncertainty and that precise outcomes might differ materially from these expressed or implied in these forward-looking statements or might have an effect on the extent to which a specific goal, projection, estimate, or prediction is realized, together with future dividends. These forward-looking statements contain dangers and uncertainties together with, however not restricted to, the appliance of accounting requirements referring to, amongst different issues, the amortization of reductions and premiums on monetary property, monetary liabilities, and sure honest worth beneficial properties and losses; hedge accounting of derivatives and underlying monetary devices; the honest values of economic devices, together with funding securities and derivatives; future working outcomes; allowance for credit score losses; and the affect of the COVID-19 pandemic. We undertake no obligation to revise or replace publicly any forward-looking statements for any cause.

CONTACT: Contact: Mary Lengthy, (415) 616-2556 longm@fhlbsf.com