FHLB-Pittsburgh Profits But Will Not Pay Dividend in Quarter

The Federal Home Loan Bank of Pittsburgh generated $32.1 million in earnings for the second quarter after incurring $211.5 million in losses during the previous two quarters. The FHLB-Pittsburgh turned a profit despite taking an impairment charge of $39.3 million on its investments in private-label mortgage backed securities. In the first quarter, the bank reported a $30.5 million "other than temporary impairment" (OTTI) credit loss. FHLBank president and chief executive John Price attributed the turnaround to higher net interest margins, "largely due to lower borrowing costs in the second quarter." However, the Pittsburgh bank told its shareholders there will not be a second quarter dividend. There are 12 FHLBanks and Pittsburgh was one of six banks that took a loss in the first quarter primarily due to impairment charges on their private-label MBS investments.