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): November 1, 2017
Federal Home Loan Bank of Pittsburgh
(Exact name of registrant as specified in its charter)
Federally Chartered Corporation | 000-51395 | 25-6001324 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
601 Grant Street, Pittsburgh, Pennsylvania |
15219 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 412-288-3400
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)) |
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 November 1, 2017, the Federal Home Loan Bank of Pittsburgh (the Bank) is holding a member audio/web conference to discuss its financial results for the quarter and nine months ended September 30, 2017. A financial slide presentation, including unaudited preliminary financial information for the quarter and nine months ended September 30, 2017, is being presented during the conference. A copy of this slide presentation is attached as Exhibit 99.1 to this Current Report on Form 8-K. A transcript of the call will be posted to the Banks public website (www.fhlb-pgh.com) and remain posted for 45 days.
Item 7.01 | Regulation FD Disclosure. |
The information provided in Item 2.02 of this Current Report on Form 8-K is incorporated herein by reference.
The information being furnished in Items 2.02 and 7.01 of this Current Report on Form 8-K and the information contained in Exhibit 99.1 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 shall be expressly set forth by specific reference in such filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
99.1 | FHLBank Pittsburgh November 1, 2017 Member Audio/Web Conference Slide Presentation |
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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 Pittsburgh | ||||||
November 1, 2017 | By: | /s/ Edward V. Weller | ||||
Name: | Edward V. Weller | |||||
Title: | Chief Accounting Officer |
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Exhibit 99.1
Member Audio/Web Conference November 1, 2017
Cautionary Statement Regarding Forward-Looking Information Statements contained in these slides, including statements describing the objectives, projections, estimates, or predictions of the future of the Bank, may be forward-looking statements. These statements may use forward-looking terms, such as anticipates, believes, could, estimates, may, should, will, or their negatives or other variations on these terms. The Federal Home Loan Bank of Pittsburgh (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. These forward-looking statements involve risks and uncertainties including, but not limited to, the following: economic and market conditions, including, but not limited to, real estate, credit and mortgage markets; volatility of market prices, rates, and indices related to financial instruments; political, legislative, regulatory, litigation, or judicial events or actions; changes in assumptions used in the quarterly Other-Than-Temporary Impairment (OTTI) process; risks related to mortgage-backed securities; changes in the assumptions used in the allowance for credit losses; changes in the Banks capital structure; changes in the Banks capital requirements; membership changes; changes in the demand by Bank members for Bank advances; an increase in advances prepayments; competitive forces, including the availability of other sources of funding for Bank members; changes in investor demand for consolidated obligations and/or the terms of interest rate exchange agreements and similar agreements; changes in the FHLBank Systems debt rating or the Banks rating; the ability of the Bank to introduce new products and services to meet market demand and to manage successfully the risks associated with new products and services; the ability of each of the other FHLBanks to repay the principal and interest on consolidated obligations for which it is the primary obligor and with respect to which the Bank has joint and several liability; applicable Bank policy requirements for retained earnings and the ratio of the market value of equity to par value of capital stock; the Banks ability to maintain adequate capital levels (including meeting applicable regulatory capital requirements); business and capital plan adjustments and amendments; technology risks; and timing and volume of market activity. We do not undertake to update any forward-looking information. Some of the data set forth herein is unaudited. 2
Financial Highlights Statement of Income Nine months ended Sept 30, Over/ (in millions) 2017 2016 (Under) Net interest income $ 328.0 $ 254.2 $ 73.8 Provision (benefit) for credit losses 1.1 (1.1) Realized gains from sales of AFS securities 12.6 (12.6) All other income (loss) 26.2 (8.8) 35.0 Other expense 66.7 58.8 7.9 Income before assessment 287.5 198.1 89.4 Affordable Housing Program (AHP) assessment 28.8 19.8 9.0 Net income $ 258.7 $ 178.3 $ 80.4 Net interest margin (bps) 46 38 8 3
Financial Highlights Selected Balance Sheet Nine months ended Sept 30, Over/(Under) (in millions) 2017 2016 Amount Percent Average: Total assets $ 97,109 $ 91,049 $ 6,060 7 % Advances 73,237 67,022 6,215 9 Total investments 19,007 19,344 (337) (2) (in millions) Sept 30, Dec 31, Over/(Under) 2017 2016 Amount Percent Spot: Advances $ 74,228 $ 76,809 $ (2,581) (3) % Capital stock 3,697 3,755 (58) (2) Retained earnings 1,119 986 133 13 4
Capital Requirements (in millions) Sept 30, Dec 31, 2017 2016 Permanent capital $ 4,822 $ 4,747 Excess permanent capital over RBC requirement $ 3,900 $ 3,839 Regulatory capital ratio (4% minimum) 4.8% 4.7% Leverage ratio (5% minimum) 7.2% 7.0% Market value/capital stock (MV/CS) 135.4% 128.9% 5
Membership Update Kris Williams
Highlights Another great quarter for the co-op Record average advances highest nine-month period ever $710 million in MPF fundings from our members through 9/30/2017 highest level in 10 years 7
Membership Value Proposition Stable Stock Value Shareholder Cash Dividend Financial Return + Community Dividend Community Dividend Value of Membership Vibrant Bank Customer Access to Liquidity Product & Products and Services That Service Usage Help Your Business 8
Stable Stock Value FHLBank stock always trades at par our goal at all times is to maintain a market value above par When market value is above par and a new advance is executed, the purchase of capital stock at par reduces the PAR total market value of the FHLBank 9
Financial Return 8.00% Return on equity improved significantly over the past four 7.00% years 6.00% 2016 and 2015 results were 5.00% generated from member activity, Activity whereas 2014 benefited from 4.00% litigation gains 3.00% A reliable dividend is important 2.00% to membership value Membership 1.00% We will continue to pay a 0.00% differentiated dividend payment based on activity versus membership Quarterly Dividend Rate (Excluding Special Dividend) Annual Return on Equity YTD September 30, 2017; full year may be different 10
Community Dividends 2017 results Affordable Housing Program: $23 million available 154 applications received; results announced December 14 Banking On Business: $6 million for 2017 Reopened October 6; $2.2 million still available Community Lending Program $1.25 billion revolving pool; $257.2 million available First Front Door $9.5 million committed to 1,913 homebuyers; program closed for 2017 $9.5 million includes funds from homebuyer withdraws and partially funded disbursements that are recommitted during the open round 11
Access to Liquidity Attractive advance pricing depends on the FHLBanks ability to raise attractively priced funding in the capital markets Current FHLBank funding spreads versus Treasuries are attractive in maturities across the curve when compared to the 5-year average of spreadsAn excellent time to term out advances! FHLBank floating-rate funding is currently pricing quite well relative to LIBOR due to strong investor demand, especially Money Funds 12
Vibrant Bank FHLBank vibrancy is driven by member activity with the Bank Advances have seen significant growth in the last four years The Mortgage Partnership Finance® (MPF ®) Program continues to grow year over year Continued increase of letter of credit users across the membership 13 Mortgage Partnership Finance and MPF are registered trademarks of the Federal Home Loan Bank of Chicago 13
Membership Feedback on Dividend Payment Preference Surveyed membership on dividend payment preferenceFixed (stated) percentage (current method), orTarget spread to a market rate (floating rate) 50% response rate 71% preferred fixed percentage 14
Term-Out Tuesdays Return Tuesdays Nov. 7 through Dec. 5 Terms two years and greater Best rates 9:30 a.m. through noon Allows members to extend liabilities to counterbalance the risk of rising short-term rates Call your Relationship Manager or Product Delivery Service Center, 800-288-3400, x 2. 15
Products and Services Advances and Bank Services Maximum Community Investment Membership Letters of Product Value Credit Offerings Mortgage Partnership Finance® (MPF®) Program Participation The value of your membership increases the more you use FHLBank products and services. 16
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