CINCINNATI, April 29, 2026 /PRNewswire/ -- The Federal Home Loan Bank of Cincinnati (the FHLB) today released unaudited financial results for the first quarter ended March 31, 2026.
Overview
Throughout the first quarter of 2026, the FHLB successfully delivered on its dual mission of providing ongoing access to liquidity funding for member financial institutions and continuing to support affordable housing and community investment. The FHLB also maintained strong profitability, which enabled it to pay a competitive return to stockholders, make meaningful contributions to affordable housing and strengthen capital by increasing retained earnings.
Operating Results
-- For the first quarter of 2026, net income was $100 million and return on
average equity $(ROE)$ was 6.08 percent. This compares to net income of
$145 million and ROE of 8.76 percent for the same period of 2025.
-- The decrease in net income reflected the combined impact of net losses on
derivatives and related financial instruments carried at fair value in
the first three months of 2026 compared to net gains in the same period
of 2025, lower average interest rates, which decreased the earnings
generated from investing the FHLB's capital in interest-earning assets,
and lower spreads earned on mortgage loans held for portfolio.
Financial Condition Highlights
-- Total assets at March 31, 2026 were $136.2 billion, an increase of $6.8
billion (five percent) from year-end 2025.
-- Mission Assets and Activities -- comprising the major products we offer
to members including Advances, Letters of Credit (off-balance sheet), and
the Mortgage Purchase Program -- were $132.3 billion at March 31, 2026,
an increase of $7.0 billion (six percent) from year-end 2025. The
increase in Mission Assets and Activities from year-end 2025 was
primarily driven by increases in Advance borrowings from a few
large-asset members. The FHLB's business model is designed to support
significant changes in mission asset and activity levels without having
to undergo material changes in staffing, operations, risk practices, or
general resource needs.
-- Total investments at March 31, 2026 were $48.1 billion, a decrease of
$2.0 billion (four percent) from year-end 2025, which was primarily
driven by a decrease in liquidity investments. Total investments included
$20.1 billion of mortgage-backed securities issued by Fannie Mae, Freddie
Mac or Ginnie Mae and $28.0 billion of liquidity investments. Liquidity
investments can vary significantly on a daily basis to support actual and
anticipated borrowing needs of members and to meet all current and
anticipated financial commitments.
-- At March 31, 2026, GAAP capital was $7.0 billion, an increase of seven
percent from year-end 2025. The GAAP and regulatory capital-to-assets
ratios were 5.14 percent and 5.20 percent, respectively, at March 31,
2026. Both ratios exceeded the regulatory required minimum of four
percent. Retained earnings were $2.0 billion at March 31, 2026, an
increase of one percent from year-end 2025. Retained earnings exceeded
the FHLB's minimum policy requirements in order to protect its capital
stock against impairment risk and provide for dividend stability.
Dividend
-- The FHLB paid its stockholders a cash dividend on March 19, 2026 at a
7.50 percent annualized rate, which was 3.84 percentage points above the
first quarter average Secured Overnight Financing Rate.
Housing and Community Investment
-- Statutory Affordable Housing Program $(AHP)$ Assessments. The FHLB is required to annually set aside 10 percent of its profits to support affordable housing. These funds assist members in serving very low-, low-, and moderate-income households. The FHLB's net income for the first quarter of 2026 resulted in an accrual of $12 million to the AHP pool of funds, which will be awarded to members in 2027 through the AHP offerings. The AHP consists of a competitive program, which supports the creation and preservation of affordable housing, and a homeownership program called Welcome Home, which assists homebuyers with down payments and closing costs. -- Voluntary Housing Contributions. In addition to the statutory AHP assessment, the Board of Directors committed to making voluntary contributions of $34 million in 2026, representing five percent of 2025 earnings, to various voluntary housing and community investment programs. In the first three months of 2026, the FHLB partially fulfilled its commitment by contributing $12 million to various voluntary housing and community investment programs. The FHLB has also committed to making a $4 million supplemental voluntary AHP contribution in 2026 to ensure the amount of total AHP contributions equals what it would have been absent any voluntary housing contributions, which reduce net income before assessments and statutory AHP assessments. In the first three months of 2026, the FHLB made a $1 million supplemental voluntary AHP contribution.
The FHLB expects to file its first quarter 2026 Form 10-Q with the Securities and Exchange Commission on or about May 7, 2026.
About the FHLB
As of March 31, 2026, the FHLB is a AA+ rated wholesale cooperative bank owned by 592 member financial institutions, including commercial banks, thrifts, credit unions, insurance companies and community development financial institutions in Kentucky, Ohio and Tennessee. The FHLB provides members access to products and services (primarily Advances, which are a readily available, low-cost source of funds, purchases of certain mortgage loans from members, and issuance of Letters of Credit to members) and a competitive return through quarterly dividends on their capital investment in the FHLB. The FHLB funds these products and services by raising private-sector capital from member-stockholders and, with the other Federal Home Loan Banks (FHLBanks) in the FHLBank System, issuing high-quality debt in the global capital markets. The FHLB also funds community investment programs that help its members create affordable housing and promote community economic development.
This news release may contain forward-looking statements that are subject to risks and uncertainties that could affect the FHLB's financial condition and results of operations. These include, but are not limited to: the effects of economic, financial, and market conditions; legislative or regulatory developments concerning the FHLBank System; financial pressures affecting other FHLBanks; pandemics; competitive forces; and other risks detailed from time to time in the FHLB's annual report on Form 10-K and other filings with the Securities and Exchange Commission. The forward-looking statements speak as of the date made and are not guarantees of future performance. Actual results or developments could differ materially from the expectations expressed or implied in the forward-looking statements, and the FHLB undertakes no obligation to update any such statements.
Federal Home Loan Bank of Cincinnati
Financial Highlights (unaudited)
Dollars in millions
SELECTED BALANCE SHEET ITEMS
March 31, December 31, Percent
2026 2025 Change (2)
------------- ------------- -----------
Total assets $ 136,229 $ 129,405 5 %
Advances (principal) 78,664 70,104 12
Mortgage loans held for
portfolio (principal) 8,848 8,490 4
Total investments 48,111 50,079 (4)
Consolidated Obligations 126,886 120,775 5
Mandatorily redeemable capital
stock 100 20 397
Capital stock 4,984 4,539 10
Total retained earnings 2,006 1,995 1
Total capital 6,997 6,540 7
Regulatory capital (1) 7,090 6,554 8
Capital-to-assets ratio (GAAP) 5.14 % 5.05 %
Capital-to-assets ratio
(Regulatory) (1) 5.20 5.06
OPERATING RESULTS
Three Months Ended March 31,
Percent
2026 2025 Change (2)
----------- ---------- -------------
Total interest income $ 1,322 $ 1,515 (13)%
Total interest expense 1,164 1,327 (12)
----------- ----------
Net interest income 158 188 (16)
Non-interest income (loss) -- 17 (98)
Non-interest expense 46 44 6
Affordable Housing Program
assessments 12 16 (30)
----------- ----------
Net income $ 100 $ 145 (31)
=========== ==========
Return on average equity 6.08 % 8.76 %
Return on average assets 0.30 0.44
Annualized dividend rate 7.50 9.00
(1) Regulatory capital includes capital stock, mandatorily redeemable capital
stock (classified as a liability) and retained earnings.
(2) Amounts used to calculate the percent change column are based on dollars
in thousands. Accordingly, recalculations based upon the disclosed
amounts (millions) may not produce the same results.
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SOURCE Federal Home Loan Bank of Cincinnati
(END) Dow Jones Newswires
April 29, 2026 09:42 ET (13:42 GMT)