The Federal Home Loan Bank of Boston earned $18.7 million in the second quarter, a major improvement compared to the same period last year when it lost $22.9 million.
"We are pleased to report our third consecutive quarter of positive net income," said Edward Hjerpe, president and CEO of the FHLB.
"We are focused on building our 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," said Hjerpe. (Thrifts, banks and credit unions depend on those dividends.)
Like many FHLBs, the Boston bank has been hurt by its investments in private-label mortgage-backed securities.
The $64.7 billion-asset bank still has $3.3 billion (par value) of private-label MBS on its books. It said the 'carrying value' of the PLS now stands at $2 billion.
Credit-related other-than-temporary-impairment charges on certain private-label securities totaled $30.4 million in the second quarter, compared to $70.5 million in 2Q09.
