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) July 22, 2010

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):

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

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

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

o    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 22, 2010, the Federal Home Loan Bank of Boston (the Bank) issued a press release regarding the Bank’s preliminary unaudited financial results for the quarter ending June 30, 2010. A copy of the press release is included as Exhibit 99.1 to this report. The information in this Item 2.02 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 (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

This report, including Items 2.02 and 7.01 and Exhibits 99.1 and 99.2, uses forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on the Bank’s expectations as of the date hereof. The words “will,” “assume,” “forecast,” “believe,” “expect,” “looking ahead,” “likely,” and similar statements and their plural, negative, past and progressive forms as well as statements about the Bank’s operating plan are used in this notification to identify some, but not all, of such forward-looking statements. The Bank cautions that, by their nature, 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; and other-than-temporary impairment of investment securities, in addition to 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.

Item 7.01 Regulation FD Disclosure

On July 22, 2010, Edward A. Hjerpe III, president and chief executive officer of the Bank, presented information to members of the Bank in the first of a series of member outreach meetings scheduled in July and September. A copy of this presentation is attached as Exhibit 99.2 to this Form 8-K. The information in this Item 7.01 and contained in Exhibit 99.2 is being furnished and shall not be deemed “filed” for purposes of Section 18 of 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, 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.

Exhibit Number

99.1 Press release issued by the Bank on July 22, 2010.

99.2 Presentation to Bank members on July 22, 2010.

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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: July 22, 2010	By:	/s/ Brian G. Donahue
		Brian G. Donahue
		First Vice President, Controller and Chief Accounting Officer

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EX-99.1

Exhibit 99.1

	NEWS RELEASE
FOR IMMEDIATE RELEASE	CONTACT: Lily A. Bryant
July 22, 2010	617-292-9771
	lily.bryant@fhlbboston.com

FEDERAL HOME LOAN BANK OF BOSTON ANNOUNCES

SECOND QUARTER 2010 RESULTS

BOSTON — The Federal Home Loan Bank of Boston (the Bank) announced the following unaudited results for the quarter ended June 30, 2010. “We are pleased to report a third consecutive quarter of positive net income, despite a continued challenging operating environment and additional credit charges against the investment portfolio,” said Edward A. Hjerpe III, president and chief executive officer. “We are focused on building retained earnings and preserving capital in order to restore the Bank to a position where we can resume dividend payments, repurchase stock, and more fully fund the Affordable Housing Program.”

Second Quarter 2010 Balance-Sheet Highlights

Total assets were $64.7 billion as of June 30, 2010, an increase of $2.2 billion, or 3.6 percent, compared with $62.5 billion at December 31, 2009. The increase was largely attributable to a $4.1 billion increase in investments, partially offset by a $1.6 billion decrease in advances.

Total advances were $36.0 billion as of June 30, 2010, a decrease of $1.6 billion, or 4.2 percent, compared with $37.6 billion at December 31, 2009. The reduction in advances was primarily attributable to reduced lending activity and continued high deposit levels at member financial institutions.

Total investments were $25.1 billion at June 30, 2010, an increase of $4.1 billion, or 19.8 percent, compared with $20.9 billion at December 31, 2009. The increase was primarily attributable to a $2.2 billion increase in short-term investments, a $1.4 billion increase in agency debentures, and a $440.8 million increase in mortgage-backed securities (MBS). The par value of private-label MBS declined by $280.4 million, from $3.6 billion at December 31, 2009, to $3.3 billion at June 30, 2010, while the carrying value of private-label MBS declined by $160.8 million, from $2.2 billion at December 31, 2009, to $2.0 billion at June 30, 2010.

Total mortgage loans were $3.3 billion at June 30, 2010, a decrease of $189.1 million, or 5.4 percent, compared with $3.5 billion at December 31, 2009, as origination volumes remained relatively low.

Total GAAP capital was $3.0 billion at June 30, 2010, an increase of $272.9 million, or 9.9 percent, compared with $2.8 billion at December 31, 2009, primarily attributable to a $41.6 million increase in retained earnings, and a $215.5 million decrease in accumulated other comprehensive loss. The decrease in accumulated other comprehensive loss was due to a decline

in unrealized losses on available-for-sale securities, as well as a decline in the net noncredit portion of other-than-temporary impairment losses.

The Bank’s total regulatory capital-to-asset ratio was 6.1 percent at June 30, 2010, exceeding the regulatory minimum requirement by 2.1 percentage points. The Bank’s permanent capital was $3.9 billion.

Second Quarter 2010 Operating Results

Net income for the second quarter of 2010 was $18.7 million, a $22.9 million increase from a net loss of $4.2 million in the second quarter of 2009. The increase was primarily due to a $40.1 million decrease in the credit-related other-than-temporary impairment charges on certain private-label MBS, partially offset by factors including a $9.6 million decrease in net interest income after provision for credit losses, a $4.7 million increase in REFCorp assessments, and a $2.1 million increase in Affordable Housing Program contributions.

Credit-related other-than-temporary impairment charges on certain private-label MBS were $30.4 million for the second quarter of 2010, a $40.1 million, or 56.8 percent, decrease from the $70.5 million recorded in the second quarter of 2009. The $30.4 million charge resulted from an increase in projected losses on the collateral underlying 79 private-label MBS with a combined par value of $1.9 billion. The reduction in credit losses attributable to other-than-temporary impairment, compared with the second quarter of 2009, primarily reflects the relative stabilization in factors, such as home prices and unemployment rates, that affect the expected performance of the mortgage loans underlying the Bank’s private-label MBS.

Net interest income after provision for credit losses for the second quarter of 2010 was $74.4 million, a $9.6 million, or 11.5 percent, decrease from the $84.0 million recorded in the second quarter of 2009. The decrease was primarily attributable to a $10.4 billion reduction in average assets from $75.1 billion during the second quarter of 2009 to $64.7 billion during the second quarter of 2010, and reflects members’ declining needs for wholesale funding due to increases in deposit levels.

Net interest margin and net interest spread were essentially stable quarter over quarter, at 0.46 percent and 0.40 percent, respectively, for the second quarter of 2010, compared with 0.45 percent and 0.38 percent, respectively, for the second quarter of 2009.

The Federal Home Loan Bank of Boston is a cooperatively owned wholesale bank for housing finance in the six New England states. Its mission is to support the residential-mortgage and community-development lending activities of its members, which include over 460 financial institutions across New England. To accomplish its mission, the Bank utilizes private-sector capital to provide members and other qualified customers with reliable access to low-cost wholesale funds, liquidity, a competitive outlet for the sale of loans, special lending programs, technical assistance, and other products and services.

Balance Sheet Highlights

(Dollars in thousands)

(Unaudited)

	06/30/2010			03/31/2010			12/31/2009
ASSETS
Advances	$	36,015,723		$	35,174,620		$	37,591,461
Investments (1)	25,094,658			22,299,907			20,947,464
Mortgage loans held for portfolio, net	3,316,901			3,392,872			3,505,975
Total assets	64,706,788			61,568,720			62,487,000
LIABILITIES
Deposits	780,296			664,505			772,457
Consolidated obligations, net	59,765,254			56,918,300			57,686,832
Mandatorily redeemable capital stock	86,618			90,803			90,896
CAPITAL
Class B capital stock	3,658,866			3,646,201			3,643,101
Retained earnings	184,231			165,507			142,606
Accumulated other comprehensive loss	(806,144		)	(926,733		)	(1,021,649		)
Total capital	3,036,953			2,884,975			2,764,058
Total liabilities and capital	64,706,788			61,568,720			62,487,000
Regulatory capital ratio	6.1		%	6.3		%	6.2		%
Ratio of market value of equity (MVE) to par stock (2)	86.8		%	81.5		%	77.6		%

Income Statement Highlights

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended									For the Six Months Ended
	06/30/2010			03/31/2010			06/30/2009			06/30/2010			06/30/2009
Total interest income	$	220,812		$	211,450		$	293,159		$	432,262		$	670,456
Total interest expense	146,403			143,079			208,319			289,482			528,539
Net interest income	74,409			68,371			84,840			142,780			141,917
Net interest income after provision for credit losses	74,405			67,940			84,040			142,345			141,017
Net impairment losses on investment securities recognized in income	(30,443		)	(22,823		)	(70,526		)	(53,266		)	(197,438		)
Other (loss) income	(4,088		)	524			(692		)	(3,564		)	1,357
Operating expense	12,586			12,375			15,309			24,961			29,039
Other expense	1,803			2,095			1,718			3,898			3,540
Affordable Housing Program	2,080			2,545			—			4,625			—
REFCorp	4,681			5,725			—			10,406			—
Total assessments	6,761			8,270			—			15,031			—
Net income (loss)	18,724			22,901			(4,205		)	41,625			(87,643		)
Performance Ratios:
Return on average assets	0.12		%	0.15		%	(0.02		)%	0.13		%	(0.23		)%
Return on average equity	2.54		%	3.28		%	(0.63		)%	2.90		%	(5.77		)%
Net interest spread	0.40		%	0.37		%	0.38		%	0.38		%	0.28		%
Net interest margin	0.46		%	0.43		%	0.45		%	0.45		%	0.37		%

(1)Investments include available-for-sale securities, held-to-maturity securities, trading securities, interest-bearing deposits, securities purchased under agreements to resell, and federal funds sold.

(2)MVE equals the difference between the theoretical market value of assets and the theoretical market value of liabilities, and the ratio of MVE to par value of Bank stock can be an indicator of future net income to the extent that it demonstrates the impact of prior interest-rate movements on the capacity of the current balance sheet to generate net interest income. However, this ratio does not always provide an accurate indication of future net income.  Accordingly, investors should not place undue reliance on this ratio and are encouraged to read the Bank’s discussion of MVE, including discussion of the limitations of MVE as a metric, in Item 7A —Quantitative and Qualitative Disclosures About Market Risk—Market and Interest Rate Risk—Measurement of Market and Interest Rate Risk—Market Value of Equity Estimation and Market Risk Limit in its annual report on Form 10-K filed with the Securities and Exchange Commission on March 22, 2010.

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Forward-Looking Statements

This release, including the unaudited quarterly balance sheet and income statement highlights, uses forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and are based on the Bank’s expectations as of the date hereof. The words “may continue,” “may return,” and similar statements and their plural and negative forms are used in this notification to identify some, but not all, of such forward-looking statements. The Bank cautions that, by their nature, 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; and other-than-temporary impairment of investment securities, in addition to 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.

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EX-99.2

Exhibit 99.2

Member Outreach Meeting July 22, 2010 Edward A. Hjerpe III - President and Chief Executive Officer M. Susan Elliott - Executive Vice President and Chief Business Officer George H. Collins - Senior Vice President and Chief Risk Officer

1 Cautionary Statements Regarding Forward-Looking Statements, Data, and Adjusted Information Forward-looking statements: This presentation, including the second quarter 2010 highlights herein, uses forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and are based on the Bank’s expectations as of the date hereof. The words “will,” “assume,” “forecast,” “believe,” “expect,” “looking ahead,” “likely,” and similar statements and their plural, negative, past, and progressive forms as well as statements about the Bank’s operating plan and future plans are used in this notification to identify some, but not all, of such forward-looking statements. The Bank cautions that, by their nature, 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; and other-than-temporary impairment of investment securities, in addition to 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. Data: Data set forth herein is unaudited. Data identified herein with a third-party source is provided to you without any independent verification by the Federal Home Loan Bank of Boston, and the Federal Home Loan Bank of Boston expressly disclaims any responsibility for, its accuracy, completeness or whether any additional information is necessary to make such data not materially misleading. Accordingly, you are cautioned against placing any undue reliance on such data. Adjusted information: This presentation uses non-GAAP financial information. Specifically, the Bank adjusts GAAP net income for the impact of (i) Affordable Housing Program and Resolution Funding Corporation assessments and (ii) OTTI charges. Management believes this information may be informative to investors in gauging the Bank’s financial performance, identifying trends, and providing meaningful period-to-period comparisons.

Topics Federal Home Loan Bank of Boston Membership Profile New England Bank Performance Second Quarter Results Operating Plan Execution New Solutions Balancing Risk Exposure Looking Ahead 2 For your convenience, a copy of this presentation is available at http://www.fhlbboston.com

Federal Home Loan Bank of Boston

4 Membership Profile Massachusetts - 238 members, $10.6 billion in advances, $1.0 billion in capital stock Connecticut - 78 members, $5.3 billion in advances, $568.5 million in capital stock Maine - 60 members, $2.4 billion in advances, $180.8 million in capital stock New Hampshire - 33 members, $1.2 billion in advances, $94.5 million in capital stock Vermont - 29 members, $0.4 billion in advances, $53.4 million in capital stock Rhode Island - 22 members, $15.3 billion in advances, $1.7 billion in capital stock 460 Members: 218 thrifts, 148 credit unions, 70 commercial banks, and 24 insurance companies As of June 30, 2010

5 New England Bank Performance US NE CT ME MA NH RI VT % of Unprofitable Banks 19.0% 12.5% 21.8% 6.9% 10.2% 8.3% 35.7% 0% % of YoY Earnings Gains 52% 66% 60% 69% 65% 79% 79% 64% Net Interest Margin 3.83% 3.02% 3.44% 3.78% 2.67% 3.69% 3.16% 3.93% Return on Assets 0.54% 0.68% 0.40% 0.41% 1.03% (0.08)% 0.29% 0.8% Equity Capital to Total Assets 10.9% 11.7% 12.2% 10.5% 10.4% 10.8% 13.5% 9.4% Net Charge-Offs to Total Loans 2.84% 1.36% 0.59% 0.33% 0.29% 0.33% 1.92% 0.31% Non-Performing Assets to Total Assets 3.43% 1.36% 1.76% 1.18% 0.62% 1.36% 2.45% 1.10% Loan-Loss Allowance to Non-Current Loans 64.2% 63.6% 66.3% 67.0% 68.8% 84.4% 59.3% 90.1% Source: FDIC. 1Q2010

6 Second Quarter 2010 Unaudited Highlights To Be Released Today Assets $64.7 billion Advances $36.0 billion Pre-Assessment Net Income Before OTTI, REFCorp, and AHP $55.9 million Credit-Related OTTI Losses $(30.4) million REFCorp $(4.7) million Affordable Housing Program $(2.1) million Net Income $18.7 million

7 Quarterly Financial Data (Unaudited) - To Be Released Today 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 End Advances $49.4B $41.9B $37.9B $37.6B $35.2B $36.0B PLMBS (Unpaid Principal Balance) $4.1B $3.9B $3.7B $3.6B $3.4B $3.3B Total Investments $22.6B $32.1B $18.6B $20.9B $22.3B $25.1B Total Assets $76.4B $78.1B $60.4B $62.5B $61.6B $64.7B End Capital Stock(1) $3.7B $3.7B $3.7B $3.7B $3.7B $3.7B End Accumulated Other Comprehensive Income $(1.3)B $(1.3)B $(1.1)B $(1.0)B $(0.9)B $(0.8)B End Retained Earnings $245.9MM $241.7MM $136.3MM $142.6MM $165.5MM $184.2MM Pre-assessment Income Before OTTI $43.5MM $66.3MM $68.8MM $78.7MM $53.9MM $55.9MM Period Credit Losses $(126.9)MM $(70.5)MM $(174.2)MM $(72.4)MM $(22.8)MM $(30.4)MM Period REFCorp Assessment - - - - $(5.7)MM $(4.7)MM Period AHP Assessment - - - - $(2.5)MM $(2.1)MM Period Net Income $(83.4)MM $(4.2)MM $(105.4)MM $6.3MM $22.9MM $18.7MM Period Return on Average Equity (9.80)% (0.63)% (15.55)% 0.93% 3.28% 2.54% End Regulatory Capital Ratio 5.16% 5.06% 6.38% 6.20% 6.34% 6.07% Market/Par Value of Stock(1) 49% 60% 72% 78% 82% 87% (1)Includes mandatorily redeemable capital stock classified as a liability.

Operating Plan Execution Developed after thorough analysis of Bank’s operations, risk, and growth opportunities Components Enhanced product offerings Membership growth Prudent and profitable investment strategies Potential flexibility in capital requirements Greater operational efficiencies and expense reduction 8

Year One of the Operating Plan Staff reductions and other operating expense reductions Organizational and management changes Streamlined internal committee structure Information technology plan formulation Communications to enhance Bank visibility with members, employees, and elected officials New product offerings Successful investment strategy 9

New Solutions

11 New Solutions 2009 Letters of credit for nonhousing tax-exempt bonds Expander advance Advance Restructuring Economic Stimulus advance MPF Xtra 2010 Direct+ Refundable letters of credit Collar advance Corridor advance Members’ continued use of Bank products helps us return to consistent profitability “MPF Xtra” is a trademark and “Mortgage Partnership Finance,” “MPF,” and “eMPF” are registered trademarks of the Federal Home Loan Bank of Chicago.

12 Advance Initiation Screen Collateral borrowing capacity and excess capital stock amounts are displayed Option to wire out all or part of the proceeds from ‘Create Advance Transaction’ screen Direct+ The New Online Banking System

13 Collateral Borrowing Capacity Calculator Real-time calculator Ability to create “what if” scenarios. See how changing extensions of credit or pledging new or additional qualified collateral will affect your borrowing capacity Direct+

14 Capital Stock Calculator Real-time calculator Ability to create “what if” scenarios. Change outstanding credit products balances to see the effect on total stock investment requirement Direct+

15 Safekeeping Direct+ offers members a secure mechanism by which to instruct the Bank to receive, deliver, and/or transfer securities from one account to another. ‘Add’ button on the ‘Create Safekeeping Transaction’ screen simplifies entry of multiple securities using same broker, beneficiary account, and instructions. Direct+

Balancing Risk Exposure

Balancing Risk Exposure A portion of Bank earnings is retained to protect against unexpected losses To the extent sufficient retained earnings are accumulated to protect against unexpected losses, balance is achieved and: Capital stock can be more readily returned “Normal” dividend payments can resume The Bank’s current retained earnings target is $925 million, but we currently have less than $200 million So, retention of earnings and capital stock is required 17

Current Risk Exposures Market risk capital requirement is limited to $275 million Duration of equity is 3 years Current value at risk is less than $200 million Advances, money market investments, and current term investments (limited to agencies) in aggregate generate only modest risk exposure Private-label MBS portfolio is still the largest source of unexpected risk exposure 18

PLMBS Exposure Home price index (HPI) has been and is likely to continue to be the driver in PLMBS performance. Forecast HPI, while still assuming some declines in home values, is less negative than in 2008 and 2009. Additionally, the Bank’s portfolio is declining and the par value of total PLMBS has dropped from $4.4 billion as of 12/31/08 to $3.4 billion as of 3/31/10. 19

20 Private-Label Mortgage-Backed Securities Collateral Vintage Par Value 12/31/07 Avg. Price 12/31/07 Avg. Price 12/31/08 Avg. Price 12/31/09 Avg. Price 3/31/10 Par Value 3/31/10 Alt-A 2007 and prior $3.2 billion $97.28 $52.41 $52.60 $53.98 $1.8 billion Pay Option 2004 to 2007 $1.4 billion $95.73 $44.64 $48.84 $53.49 $1.1 billion Prime 2007 and prior $906 million $99.00 $74.59 $82.26 $84.13 $400 million Subprime 2004 and prior $39 million $97.40 $71.98 $67.54 $68.13 $31 million CMBS 2003 and prior $431 million $99.60 $82.79 $96.57 $97.55 $130 million Total $6.0 billion $97.35 $55.04 $58.28 $59.27 $3.4 billion

21 Establishing Balance A key principle of the Bank’s operating plan is to balance retained earnings and the aggregate exposure to unexpected risk. Over time this balance is expected to be achieved through risk containment and revenue growth. Retained Earnings Illustration (Projected Balance vs. Target) (dollars in millions) $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Base Target Base Projected Recovery Target Recovery Projected Slow Recovery Target Slow Recovery Projected

Looking Ahead

Looking Ahead Development of next year’s business plan underway. Will continue to: Adjust plan to get to retained earnings target and reduce balance sheet risk position Develop products and services Build strength in management and overall employee base Improve organizational effectiveness and efficiency GSE Reform: Much effort will be focused on it in 2011 and beyond Impact unknown - may impact entire business model Will analyze and help shape as much as possible We believe in the FHLBank business model relative to others Challenges: Economy, health of industry, regulatory and legislative risk Primary Focus: Restore consistent profitability and normal operations so that we can pay a dividend, repurchase excess stock, and more fully fund the Affordable Housing Program 23