8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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) September 30, 2009

FEDERAL HOME LOAN BANK OF BOSTON

(Exact name of registrant as specified in its charter)

Federally chartered corporation	000-51402	04-6002575
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

111 Huntington Avenue

Boston, MA 02199

(Address of principal executive offices, including zip code)

(617) 292-9600

(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 filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure

On September 30, 2009, the Federal Home Loan Bank of Boston (the Bank) sent an e-mail communication to members regarding steps that are being taken to help the Bank return to profitability. These include steps to increase revenue, such as enhanced product offerings, and steps to reduce costs, which the Bank anticipates will result in overall savings of approximately $3 million annually. These steps are further detailed in the e-mail to members, which is included as Exhibit 99.1 to this report.

The information in this Item 7.01 and contained in Exhibit 99.1 is being furnished 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 shall be expressly set forth by specific reference in such filing.

This report, including the information in Exhibit 99.1, includes forward-looking statements based on the Bank’s expectations as of the date hereof.  The words “will allow us”, “we will”, “the Bank will”, “estimates”, “we expect”, “we plan”, “anticipates”, “hopes” and similar statements are used in this notification to identify such forward-looking statements.  The Bank cautions that, by their nature, forward-looking statements involve risks and uncertainties, including, but not limited to, the risk factors set forth in the Bank’s periodic filings with the Securities and Exchange Commission, regulatory changes, instability in the credit and debt markets, economic conditions (including effects on, among other things, mortgage-backed securities), changes in interest rates, and prepayment spreads on mortgage assets.  The Bank does not undertake to update any forward-looking statement herein or that may be made from time to time on behalf of the Bank and assumes no obligation to do so.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit Number

99.1 E-mail sent to members of the Bank on September 30, 2009.

2

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 Boston
Date: September 30, 2009	By:	/s/ Frank Nitkiewicz
		Frank Nitkiewicz
		Executive Vice President and Chief Financial Officer

3

EX-99.1

Exhibit 99.1

September 30, 2009

Dear Member:

As you know, the Federal Home Loan Bank of Boston (the Bank) faces some significant challenges. Like your organizations, the Bank has been operating in the most difficult national economy and housing market in decades. Nonetheless, the Bank’s ability to provide liquidity and funding to our members has never been compromised throughout this period of volatility. The core business of providing funding to our members remains present and strong.

We have, however, encountered some strain on the organization, including an investment portfolio that has declined significantly in value and a resulting need to build retained earnings.  You have felt this strain via the suspension of a dividend on your stock investment in the Bank, a moratorium on the repurchase of your excess stock, and a lack of funding for the Bank’s Affordable Housing Program.

We want to assure you that the Bank’s board and management are working diligently to improve future performance. Our first priority is to be prepared always to provide liquidity and longer-term funding for housing, affordable housing, and community development for our members. Our next priority is to strengthen the earnings of the Bank, balanced by sound risk management, to ensure the growth of retained earnings and a stronger capital position for the future. Stronger earnings and capital will allow us to return to normal business operations — paying our members a dividend, funding the Affordable Housing Program, and repurchasing excess member stock. While we can not project how long this will take, we plan to return to these practices as soon as prudently possible.

To further this goal, management and the board conducted a top-to-bottom review of the Bank’s operations, with an eye toward appropriately assessing and managing risk, enhancing our product offerings to members, identifying membership growth opportunities, reviewing the investment portfolio, developing potential alternatives for flexibility in capital requirements associated with new credit activity, and mining for operational efficiencies and expense reductions. Our efficiency and expense review has led us to make some difficult decisions, including the reduction of approximately five percent of the current operating expense budget. We have identified anticipated expense reductions of $3 million on an annual basis, including salary, other expenses, and the elimination of 18 staff positions.

We do not take such actions lightly. Several long-time colleagues and loyal employees of the Bank will be moving on, as we had to eliminate some positions that can not be supported in the current operating environment. We are grateful for the contributions of those affected by this staff reduction, for their service to the Bank, and wish them the very best in future endeavors.

We must now move forward. We expect to be coming to you in the next few months with enhanced credit product offerings and more flexible approaches to support future activity-based capital requirements for our members. In addition, we are conducting a third-party review of our

technology function, with the hopes of providing enhanced productivity. Rest assured, we also plan to add appropriate resources where needed, such as in some key risk management functions. We will continue to review our risk position, our staffing, and our services so that we can provide you the most optimal set of products and services while improving the financial condition of the Bank.

We recognize that the Federal Home Loan Bank of Boston exists because of, and for the benefit of our members and other important constituents. We pledge to work hard on your behalf, to continue to be a reliable resource for you, and to return to being the strong organization that you have known and benefitted from for more than 75 years.

We will provide you with updates on our progress on an ongoing basis. In the meantime, please feel free to contact me with any questions, concerns, or suggestions.

Sincerely,

Edward A. Hjerpe III

ed.hjerpe@fhlbboston.com

617-292-9610

This letter includes forward-looking statements based on the Bank’s expectations as of the date hereof.  The words “will allow us”, “we will”, “the Bank will”, “estimates”, “we expect”, “we plan”, “hope”, “anticipated”, and similar statements are used in this notification to identify such forward-looking statements.  The Bank cautions that, by their nature, forward-looking statements involve risks and uncertainties, including, but not limited to, the risk factors set forth in the Bank’s periodic filings with the Securities and Exchange Commission, regulatory changes, instability in the credit and debt markets, economic conditions (including effects on, among other things, mortgage-backed securities), changes in interest rates, and prepayment spreads on mortgage assets.  The Bank does not undertake to update any forward-looking statement herein or that may be made from time to time on behalf of the Bank.