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): February 22, 2011

Federal Home Loan Bank of Dallas
__________________________________________
(Exact name of registrant as specified in its charter)

Federally Chartered Corporation	000-51405	71-6013989
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
8500 Freeport Parkway South, Suite 600, Irving, Texas		75063-2547
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 214-441-8500

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 February 22, 2011, the Federal Home Loan Bank of Dallas issued a press release disclosing information regarding its financial condition at December 31, 2010 and its results of operations for the quarter and year ended December 31, 2010. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1. The information contained in this Item 2.02 and Exhibit 99.1 attached hereto 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.

Item 9.01 Financial Statements and Exhibits.

Exhibits

99.1 Press release dated February 22, 2011 disclosing financial information regarding the quarter and year ended December 31, 2010.

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 Dallas
February 22, 2011	By:	/s/ Tom Lewis
		Name: Tom Lewis
		Title: Senior Vice President and Chief Accounting Officer

Exhibit Index

Exhibit No.	Description
99.1	Press release dated February 22, 2011 disclosing financial information regarding the quarter and year ended December 31, 2010.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

February 22, 2011

Contact:

Corporate Communications
Federal Home Loan Bank of Dallas
www.fhlb.com
(214) 441-8445

Federal Home Loan Bank of Dallas Reports Fourth Quarter
and Full Year Earnings

DALLAS, TEXAS, February 22, 2011 – The Federal Home Loan Bank of Dallas (Bank) today reported net income of $22.4 million for the quarter ended December 31, 2010. For the year ended December 31, 2010, the Bank reported net income of $104.7 million.

Total assets at December 31, 2010 were $39.7 billion, compared with $51.6 billion at September 30, 2010 and $65.1 billion at December 31, 2009. The $11.9 billion decrease in total assets for the fourth quarter was attributable primarily to declines in the Bank’s short-term liquidity portfolio ($9.2 billion), advances ($1.8 billion) and its long-term held-to-maturity securities portfolio ($0.8 billion). The $25.4 billion decrease in total assets for the full year was attributable primarily to declines in the Bank’s advances ($21.8 billion) and its long-term held-to-maturity securities portfolio ($2.9 billion).

Advances were $25.5 billion at December 31, 2010, compared with $27.3 billion at September 30, 2010 and $47.3 billion at December 31, 2009. The quarterly and annual reductions in advances were driven largely by decreases in advances outstanding to the Bank’s two largest borrowers. During the quarter and year ended December 31, 2010, advances outstanding to those two borrowers decreased by $1.0 billion and $17.8 billion, respectively. At December 31, 2010, advances outstanding to the Bank’s two largest borrowers totaled $6.5 billion.

Due to principal repayments on mortgage-backed securities, the Bank’s held-to-maturity securities portfolio declined from $9.3 billion at September 30, 2010 and $11.4 billion at December 31, 2009 to $8.5 billion at December 31, 2010. The Bank’s short-term liquidity portfolio (comprised of non-interest bearing excess cash balances, overnight federal funds sold and, as of September 30, 2010, U.S. Treasury Bills) decreased from $14.6 billion at September 30, 2010 and $5.7 billion at December 31, 2009 to $5.4 billion at December 31, 2010. The Bank’s larger short-term liquidity portfolio at September 30, 2010 was due in large part to the reinvestment of the proceeds from $10.3 billion of advances prepaid in late September. During the fourth quarter, these funds were used to repay or retire debt.

The Bank’s operating results for the quarter and year ended December 31, 2010 included credit-related other-than-temporary impairment charges of $0.5 million and $2.6 million, respectively, on certain of its investments in non-agency (private-label) residential mortgage-backed securities (RMBS). The unpaid principal balance of the Bank’s non-agency RMBS holdings, all of which are classified as held-to-maturity, totaled $397.9 million at December 31, 2010, compared with $431.5 million at September 30, 2010 and $515.4 million at December 31, 2009.

The Bank’s retained earnings increased to $452.2 million at December 31, 2010, from $431.9 million at September 30, 2010 and $356.3 million at December 31, 2009. Accumulated other comprehensive loss attributable to the non-credit portion of other-than-temporary impairment losses on the Bank’s non-agency RMBS holdings increased from $57.8 million at September 30, 2010 to $63.3 million at December 31, 2010; as of December 31, 2009, accumulated other comprehensive loss attributable to the non-credit portion of other-than-temporary impairment losses on the Bank’s non-agency RMBS holdings was $66.6 million.

Additional selected financial data as of and for the quarter and year ended December 31, 2010 is set forth below. Further discussion and analysis regarding the Bank’s results will be included in its Form 10-K for the year ended December 31, 2010 to be filed with the Securities and Exchange Commission.

About the Federal Home Loan Bank of Dallas

The Federal Home Loan Bank of Dallas is one of 12 district banks in the FHLBank System created by Congress in 1932. The Bank is a member-owned cooperative that supports housing and community development by providing competitively priced loans (known as advances) and other credit products to more than 900 members and associated institutions in Arkansas, Louisiana, Mississippi, New Mexico and Texas. For more information, visit the Bank’s website at fhlb.com.

Federal Home Loan Bank of Dallas

Selected Financial Data

As of and For the Quarter and Year Ended December 31, 2010

(Unaudited, in thousands)

	December 31, 2010			September 30, 2010			December 31, 2009
Selected Statement of Condition Data:
Investments (1)	$	12,268,954		$	19,385,091		$	13,491,819
Advances		25,455,656			27,341,487			47,262,574
Mortgage loans held for portfolio, net		207,168			222,131			259,617
Total assets		39,690,070			51,644,281			65,092,076
Consolidated obligations, net		36,447,583			45,220,832			60,277,884
Mandatorily redeemable capital stock		8,076			6,894			9,165
Capital stock — putable		1,600,909			1,835,532			2,531,715
Retained earnings		452,205			431,890			356,282
Total accumulated other comprehensive income (loss)		(62,702	)		(57,213	)		(65,965	)
Total capital (2)		1,990,412			2,210,209			2,822,032

	For the			For the
	Quarter Ended			Year Ended
	December 31, 2010			December 31, 2010
Selected Statement of Income Data:
Net interest income	$	47,086		$	234,366
Credit component of other-than-temporary impairment losses		(504	)		(2,554	)
Other income (loss)		9,328			(11,705	)
Total other expense		25,458			77,542
Total assessments		8,080			37,826
Net income		22,372			104,739

(1	)	Investments consist of interest-bearing deposits, federal funds sold, trading securities, and
		held-to-maturity securities.
(2	)	As of December 31, 2010, September 30, 2010 and December 31, 2009, total regulatory capital
		was $2,061,190, $2,274,316 and $2,897,162, respectively, which represented 5.19 percent,
		4.40 percent and 4.45 percent, respectively, of total assets as of those dates.

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