8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 26, 2018

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FEDERAL HOME LOAN BANK OF SAN FRANCISCO(Exact name of registrant as specified in its charter)

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Federally chartered corporation	000-51398	94-6000630
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS EmployerIdentification No.)

600 California StreetSan Francisco, CA 94108(Address of principal executive offices, including zip code)

(415) 616-1000(Registrant's telephone number, including area code)

Not Applicable(Former name or former address, if changed since last report)

__________________

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Item 2.02 Results of Operations and Financial Condition.

On April 26, 2018, the Federal Home Loan Bank of San Francisco (the “Bank”) issued a news release announcing its operating results for the first quarter of 2018, and the declaration of a cash dividend on the capital stock outstanding during the first quarter of 2018. A copy of the news release is included as Exhibit 99.1 to this report. The information contained in Exhibit 99.1 is being furnished pursuant to Item 2.02 of this report and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 7.01 Regulation FD Disclosure.

On April 26, 2018, the Bank announced the declaration of a cash dividend on the capital stock outstanding during the first quarter of 2018. The news release set forth above in Item 2.02 is hereby incorporated into Item 7.01 by reference.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibit
	99.1	News Release, dated April 26, 2018, issued by the Federal Home Loan Bank of San Francisco

Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Federal Home Loan Bank of San Francisco
Date: April 27, 2018	By:	/s/ J. Gregory Seibly
		J. Gregory Seibly President and Chief Executive Officer

EX-99.1

Exhibit 99.1

Federal Home Loan Bank of San Francisco Announces First Quarter 2018 Operating Results

SAN FRANCISCO, April 26, 2018 — The Federal Home Loan Bank of San Francisco today announced that its net income for the first quarter of 2018 was $81 million, compared with net income of $148 million for the first quarter of 2017.

The $67 milliondecrease in net income relative to the prior-year period primarily reflected a decline in other income, primarily related to net gains on settlements related to the Bank’s private-label residential mortgage-backed securities (PLRMBS). In the first quarter of 2017, the Bank recognized a gain on settlements of $119 million (after netting certain legal fees and expenses) relating to the Bank's PLRMBS litigation. The Bank had no settlement gains in the first quarter of 2018. This reduction in net income was partially offset by a $30 million decrease in the expense associated with voluntary charitable contributions for the Quality Jobs Fund, from $40 million in the first quarter of 2017 to $10 million in the first quarter of 2018. In addition, net interest income related to higher average balances of interest-earning assets increased by $14 million in the first quarter of 2018 compared to the prior-year period.

Total assets decreased $14.2 billion during the first three months of 2018, to $109.2 billion at March 31, 2018, from $123.4 billion at December 31, 2017. Total advances decreased $10.8 billion, to $66.6 billion at March 31, 2018, from $77.4 billion at December 31, 2017. In addition, investments decreased $3.8 billion, to $39.8 billion at March 31, 2018, from $43.6 billion at December 31, 2017, primarily reflecting a decrease of $5.5 billion in securities purchased under agreements to resell, partially offset by an increase of $2.9 billion in Federal funds sold.

Accumulated other comprehensive income increased by $17 million during the first three months of 2018, to $335 million at March 31, 2018, from$318 million at December 31, 2017, primarily as a result of improvement in the fair value of PLRMBS classified as available-for-sale.

As ofMarch 31, 2018, the Bank was in compliance with all of its regulatory capital requirements. The Bank’s total regulatory capital ratio was6.1%, exceeding the4.0%requirement. The Bank had$6.7 billion in permanent capital, exceeding its risk-based capital requirement of $2.0 billion. Total retained earnings as of March 31, 2018, were $3.3 billion.

Today, the Bank’s Board of Directors declared a quarterly cash dividend on the capital stock outstanding during the first quarter of 2018 at an annualized rate of 7.00%. The quarterly dividend rate is consistent with the Bank's dividend philosophy of endeavoring to pay a quarterly dividend at a rate between 5% and 7% annualized. The quarterly dividend will total $63 million, including $5 million in dividends on mandatorily redeemable capital stock that will be reflected as interest expense in the second quarter of 2018. The Bank expects to pay the dividend on May 14, 2018.

Financial Highlights

(Unaudited)

(Dollars in millions)

Selected Balance Sheet Items   at Period End	Mar. 31, 2018			Dec. 31, 2017
Total Assets		$109,225			$123,385
Advances	66,642			77,382
Mortgage Loans Held for Portfolio, Net	2,376			2,076
Investments1	39,832			43,570
Consolidated Obligations:
Bonds	74,297			85,063
Discount Notes	27,203			30,440
Mandatorily Redeemable Capital Stock	309			309
Capital Stock - Class B - Putable	3,068			3,243
Unrestricted Retained Earnings2	2,681			2,670
Restricted Retained Earnings2	592			575
Accumulated Other Comprehensive Income/(Loss)	335			318
Total Capital	6,676			6,806
Selected Other Data at Period End	Mar. 31, 2018			Dec. 31, 2017
Regulatory Capital Ratio3	6.09		%	5.51		%

	Three Months Ended
Selected Operating Results for the Period	Mar. 31, 2018				Mar. 31, 2017
Net Interest Income		$148				$134
Other Income/(Loss)	(8		)		112
Other Expense	49				80
Affordable Housing Program Assessment	10				18
Net Income		$81				$148
Selected Other Data for the Period
Net Interest Margin4	0.47			%	0.58		%
Operating Expenses as a Percent of Average Assets	0.11				0.14
Return on Average Assets	0.26				0.63
Return on Average Equity	4.74				10.59
Annualized Dividend Rate5	7.00				9.08
Average Equity to Average Assets Ratio	5.40				5.97

1. Investments consist of Federal funds sold, interest-bearing deposits, trading securities, available-for-sale securities, held-to-maturity securities, and securities purchased under agreements to resell.

2. In July 2017, the Bank’s Board of Directors approved the transfer of all amounts classified as restricted retained earnings, other than the amounts related to the Joint Capital Enhancement Agreement, to unrestricted retained earnings.

3. This ratio is calculated as regulatory capital divided by total assets. Regulatory capital includes retained earnings, Class B capital stock, and mandatorily redeemable capital stock (which is classified as a liability), but excludes accumulated other comprehensive income/(loss). Total regulatory capital as of March 31, 2018, was $6.7 billion.

4. Net interest margin is net interest income (annualized) divided by average interest-earning assets.

5. Dividend rates reflect the dividends declared, recorded, and paid during the relevant periods.

Federal Home Loan Bank of San Francisco
The Federal Home Loan Bank of San Francisco delivers low-cost funding and other services that help member financial institutions make home mortgage loans to people of all income levels and provide credit that supports neighborhoods and communities. The Bank also funds community investment programs that help members create affordable housing and promote community economic development. The Bank’s members are headquartered in Arizona, California, and Nevada and include commercial banks, credit unions, industrial loan companies, savings institutions, insurance companies, and community development financial institutions.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including statements related to the Bank’s dividend philosophy and dividend rates. These statements are based on our current expectations and speak only as of the date hereof. These statements may use forward-looking terms, such as “endeavoring,” “will,” and “expects,” or their negatives or other variations on these terms. The Bank cautions that by their nature, forward-looking statements involve risk or uncertainty and that actual results could differ materially from those expressed or implied in these forward-looking statements or could affect the extent to which a particular objective, projection, estimate, or prediction is realized, including future dividends. These forward-looking statements involve risks and uncertainties including, but not limited to, the application of accounting standards relating to, among other things, the amortization of discounts and premiums on financial assets, financial liabilities, and certain fair value gains and losses; hedge accounting of derivatives and underlying financial instruments; the fair values of financial instruments, including investment securities and derivatives; future operating results; and other-than-temporary impairment of investment securities. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Contact:

Amy Stewart, (415) 616-2605

stewarta@fhlbsf.com