8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, 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): July 29, 2013

Federal Home Loan Bank of Cincinnati

(Exact name of registrant as specified in its charter)

Federally Chartered Corporation	000-51399	31-6000228
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
1000 Atrium Two, P.O. Box 598, Cincinnati, Ohio		45201-0598
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:

(513) 852-7500

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing 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))

Item 2.02 Results of Operations and Financial Condition.

On July 29, 2013, the Federal Home Loan Bank of Cincinnati issued a press release to report financial results for second quarter ended June 30, 2013. The text of the press release is furnished as Exhibit 99.1 to this Form 8-K.

The information in this Current Report on Form 8-K and the Exhibit attached hereto is furnished pursuant to the rules and regulations of the Securities and Exchange Commission and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

99.1 Press release dated July 29, 2013.

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SIGNATURES

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 Cincinnati
July 29, 2013	By:	/s/ Donald R. Able
		Name: Donald R. Able Title: Executive Vice President - Chief Operating Officer

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Exhibit Index

Exhibit No.	Description
99.1	Press release.

EX-99.1

CONTACT: NewsRelease

John Byczkowski, FHLBank Cincinnati FOR IMMEDIATE RELEASE

513-852-7085 (office) or 513-382-7615 (cell) July 29, 2013

FHLBANK CINCINNATI ANNOUNCES SECOND QUARTER 2013 RESULTS

Cincinnati, Ohio – The Federal Home Loan Bank of Cincinnati (FHLBank) today released unaudited financial results for the second quarter ended June 30, 2013. The FHLBank continued to effectively fulfill its mission by providing readily available and competitively priced wholesale funding to its member financial institutions, supporting its commitment to affordable housing, and paying stockholders a competitive dividend return on their capital investment. Highlights include:

• For the second quarter, net income was $62 million and return on average equity (ROE) was 4.80 percent. This compares to net income of $55 million and ROE of 6.03 percent for the same period of 2012. For the first six months of 2013, net income was $125 million and ROE was 5.13 percent, compared to net income of $112 million and ROE of 6.26 percent for the same period of 2012.

• The most significant contributors to the increase in net income were significantly higher average Advance balances and lower net amortization, primarily related to purchased premiums on mortgage assets. ROE fell in both periods because of $1.3 billion growth in average capital (in the six-month comparison) to support the Advance growth combined with several factors that lowered income, most notably net gains on securities sales recognized in 2012.

• Total assets at June 30, 2013 were $95.3 billion, an increase of $13.8 billion (17 percent) from year-end 2012. Mission Asset Activity – comprising major activities with members including Advances, Letters of Credit, and the Mortgage Purchase Program – was $85.6 billion at June 30, 2013, an increase of $14.4 billion (20 percent) from year-end 2012. The growth in both assets and Mission Asset Activity was primarily due to increased Advances.

• Capital adequacy continued to substantially exceed all minimum regulatory requirements. On June 30, 2013, GAAP capital, including $582 million of total retained earnings, stood at $5.3 billion or 5.52 percent of total assets, with a similar regulatory capital ratio. Total retained earnings increased by $19 million in the second quarter.

• The FHLBank paid its stockholders a cash dividend on June 20, 2013 at a 4.25 percent annualized rate, which was 3.97 percentage points above the second quarter average 3-month LIBOR.

• The FHLBank contributed $7 million during the second quarter of 2013 and $14 million in the first six months of 2013 to the Affordable Housing Program pool of funds to be awarded to members in 2014. In addition, the FHLBank continued its voluntary sponsorship of two other housing programs with contributions to the Carol M. Peterson Housing Fund and the Disaster Reconstruction Program.

FHLBank Cincinnati 2Q 2013

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Operating Results and Profitability

The overall increase in net income in the 2013 periods compared with the 2012 periods resulted from the following factors:

• Net interest income after credit losses increased in the three- and six-month comparisons by $30 million and $29 million, respectively. This was the result of several favorable factors, most notably 1) higher interest income from growth in Advance balances, 2) lower net amortization, and 3) net reversals of incurred credit losses estimated in the Mortgage Purchase Program reflecting improvements in the housing market.

Growth in Advance balances supported by new capital stock improved net interest income by an estimated $21 million and $38 million in the three- and six-month periods, respectively. For example, the average principal balance of Advances increased $29.6 billion in the first six months of 2013 versus the same period of 2012. Net amortization declined $28 million and $33 million, for the three- and six-month comparisons, respectively. The FHLBank's reversal of estimated credit losses led to an improvement of $4 million and $7 million, respectively, for the previously noted periods.

The favorable factors were substantially offset by several unfavorable factors that affect net interest margin including, among others 1) replacing a portion of the short-term lower-cost debt that funded fixed-rate mortgages with longer-term higher-cost debt to improve market risk positioning in the low interest rate environment, 2) narrower spreads, reversion to historical normal levels, on LIBOR-indexed assets to Consolidated Discount Note funding, and 3) a reduction in the amount of certain higher-coupon liquidity investments.

• Other non-interest income declined $20 million and $12 million in the three- and six-month comparisons, respectively, primarily due to net gains on securities sales in the second quarter of 2012 that did not reoccur in 2013.

Assets and Mission Asset Activity

The principal balance of Advances increased$11.3 billion (21 percent) from year-end 2012 to end the second quarter of 2013 at $64.9 billion. The increase in the ending balance of Advances was primarily driven by the borrowings of one large-asset member. The tepid economic expansion and significant amounts of liquidity available to members as a result of the actions of the Federal Reserve System have continued to limit many members' demand for Advances.

The principal balance of mortgage loans held for portfolio (the Mortgage Purchase Program) was $6.8 billion at June 30, 2013, a decrease of $0.6 billion (eight percent) from year-end 2012. The reduction in principal balance from year-end 2012 reflected the relatively high amount of principal paydowns in the low interest rate environment and reduced activity level by several large sellers.

The balance of investments at June 30, 2013 was $23.1 billion, an increase of $3.2 billion (16 percent), from year-end 2012 most of which came from purchases of mortgage-backed securities. The investment balance at June 30, 2013 included $14.9 billion of mortgage-backed securities and $8.2 billion of short-term liquidity instruments.

Risk Exposure

The FHLBank believes that its net liquidity position remained strong during the first six months of 2013, as did its overall ability to fund operations through Consolidated Obligation issuances at acceptable

FHLBank Cincinnati 2Q 2013

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interest costs. Market risk exposure to changes in interest rates and other variables was moderate during the first six months of 2013, well within the FHLBank's policy limits, and consistent with the normal historical range.

Residual credit risk exposure from offering Advances, purchasing investments, and executing derivative transactions was limited, with no loan loss reserves or impairment required to be recorded for these instruments. Residual credit risk exposure in the mortgage loan portfolio continued to be moderate and on a downward trend. The allowance for credit losses in the Mortgage Purchase Program was $9 million and $18 million at June 30, 2013 and December 31, 2012, respectively. The lower allowance for credit losses was primarily a result of improvements in the housing market as reflected by higher home prices and improved delinquency trends.

# # #

The Federal Home Loan Bank of Cincinnati is a AA+ rated regional wholesale cooperative bank. The FHLBank raises private-sector capital from member-stockholders and, with 11 other FHLBanks in the FHLBank System, issues high-quality debt in the worldwide capital markets in order to provide members with competitive services (primarily Advances, a readily available, low-cost source of funds) and a competitive return on their capital investment through quarterly dividends. The FHLBank also funds community investment programs that help its members create affordable housing and promote community economic development. The FHLBank has 734 member-stockholders located in the Fifth FHLBank District of Kentucky, Ohio and Tennessee. The FHLBank System was chartered in 1932 by the U.S. Congress to promote housing finance. Each FHLBank is wholly owned by its member institution stockholders.

This news release may contain forward-looking statements that are subject to risks and uncertainties that could affect the FHLBank’s financial condition and results of operations. These include, but are not limited to, the effects of economic and financial conditions, legislative or regulatory developments concerning the FHLBank System, financial pressures affecting other FHLBanks, competitive forces, and other risks detailed from time to time in the FHLBank’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 FHLBank undertakes no obligation to update any such statements.

FHLBank Cincinnati 2Q 2013

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The Federal Home Loan Bank of Cincinnati

Financial Highlights (unaudited)

Dollars in millions

SELECTED BALANCE SHEET ITEMS

	June 30, 2013			December 31, 2012			Percent Change
Total assets	$	95,320		$	81,562		17	%
Advances (principal)	64,876			53,621			21
Mortgage loans held for portfolio (principal)	6,806			7,366			(8	)
Total investments	23,101			19,950			16
Consolidated Obligations:
Discount Notes	38,926			30,840			26
Bonds	49,521			44,346			12
Total Consolidated Obligations	88,447			75,186			18
Mandatorily redeemable capital stock	125			211			(41	)
Capital stock	4,690			4,010			17
Total retained earnings	582			538			8
Total capital	5,261			4,537			16
Regulatory capital (1)	5,397			4,759			13
Capital-to-assets ratio (GAAP)	5.52		%	5.56		%
Capital-to-assets ratio (Regulatory) (1)	5.66			5.84

OPERATING RESULTS

	Three Months Ended June 30,									Six Months Ended June 30,
	2013			2012			Percent Change (2)			2013			2012			Percent Change (2)
Total interest income	$	224		$	212		6		%	$	441		$	458		(4	)	%
Total interest expense	145			159			(9	)		286			325			(12	)
Net interest income	79			53			51			155			133			16
(Reversal) provision for credit losses	(4		)	—			NM			(6		)	1			NM
Other income	2			22			(93	)		9			21			(57	)
Other expense	16			14			14			31			28			8
AHP	7			6			11			14			13			9
Net income	$	62		$	55		13			$	125		$	112		12
Return on average equity	4.80		%	6.03		%				5.13		%	6.26		%
Return on average assets	0.26			0.34						0.28			0.35
Net interest margin	0.34			0.33						0.35			0.42
Annualized dividend rate	4.25			4.25						4.25			4.38
Average 3-month LIBOR	0.28			0.47						0.28			0.49

(1) Regulatory capital includes capital stock, mandatorily redeemable capital stock (classified as a liability) and retained earnings.

(2) Amounts used to calculate the change column are based on dollars in thousands. Accordingly, recalculations based upon the disclosed amounts (millions) may not produce the same results. Changes of 100% or greater are shown as “NM” (not meaningful).

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