# EDGAR Filing Document

**Accession Number:** 0001331463
**File Stem:** 0001331463-23-000037
**Filing Date:** 2023-2
**Character Count:** 26023
**Document Hash:** bcabf63f6bb2c8e0153c3709984eda59
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001331463-23-000037.hdr.sgml**: 20230224

**ACCESSION NUMBER**: 0001331463-23-000037

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230224

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230224

**DATE AS OF CHANGE**: 20230224

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Federal Home Loan Bank of Boston
- **CENTRAL INDEX KEY:** 0001331463
- **STANDARD INDUSTRIAL CLASSIFICATION:** FEDERAL & FEDERALLY-SPONSORED CREDIT AGENCIES [6111]
- **IRS NUMBER:** 046002575
- **STATE OF INCORPORATION:** X1
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-51402
- **FILM NUMBER:** 23664990

**BUSINESS ADDRESS:**
- **STREET 1:** 800 BOYLSTON STREET
- **STREET 2:** 9TH FLOOR
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02199
- **BUSINESS PHONE:** 617-292-9600

**MAIL ADDRESS:**
- **STREET 1:** 800 BOYLSTON STREET
- **STREET 2:** 9TH FLOOR
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02199

?xml version="1.0" ? fhlbbost-20230224

**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) February 24, 2023** 

**FEDERAL HOME LOAN BANK OF BOSTON** 

**(Exact name of registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| **Federally chartered corporation of the United States** | **000-51402** | **04-6002575** |
| **(State or other jurisdiction**<br>**of incorporation)** | **(Commission File Number)** | **(IRS Employer**<br>**Identification No.)** |

---

**800 Boylston Street** 

**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):

☐&nbsp;&nbsp;&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐&nbsp;&nbsp;&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

☐&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered <br>   

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item Item 2.02 Results of Operations and Financial Condition.**

On February 24, 2023, the Federal Home Loan Bank of Boston (the "Bank") issued a press release announcing its preliminary, unaudited results for the year ended December 31, 2022, and the declaration of a dividend. The Bank's board of directors declared a cash dividend equal to an annual yield of 6.67 percent, the approximate daily average SOFR yield for the fourth quarter of 2022 plus 300 basis points. The dividend, based on average stock outstanding for the fourth quarter of 2022, will be paid on March 2, 2023. The press release, which should be reviewed for further details on each of these developments, is furnished herewith as Exhibit 99.1 to this report.

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The information being furnished in this Item and contained in Exhibit 99.1 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.

This report, including Exhibit 99.1, uses forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which include statements with respect to the Bank's plans, objectives, projections, estimates, or predictions. These statements are based on the Bank's expectations as of the date hereof. The words "preliminary", "continue", "remain", 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. For example, statements about future declarations of dividends and expectations for advances balances, mortgage-loan investments, and net income are forward-looking statements, among other forward-looking statements herein. 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 and accretion of premiums and discounts 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; expected credit losses of financial assets; instability in the credit and debt markets; economic conditions (including, among other things, domestic and global recessions); changes in demand for advances or consolidated obligations of the Bank or the Federal Home Loan Bank system; changes in interest rates; volatility of market prices, rates, and indices that could affect the value of financial instruments; the expected discontinuance of LIBOR and the adverse consequences it could have for market participants, including the Bank; the Bank's ability to execute its business model and to pay future dividends; and prepayment speeds on mortgage assets. In addition, the Bank reserves the right to change its plans for any programs for any reason, including but not limited to, legislative or regulatory changes, changes in membership, or changes at the discretion of the board of directors. Accordingly, the Bank cautions that actual results could differ materially from those expressed or implied in these forward-looking statements or could impact the extent to which a particular plan, objective, projection, estimate or prediction is realized, and you are cautioned not to place undue reliance on such statements. 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 9.01 Financial Statements and Exhibits**

(d) Exhibits.

Exhibit Number

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99.1 <u>[Press release issued by the Bank on February 24, 2023 (this Exhibit 99.1 is furnished, not filed)](ex991-fourthquarter2022ear.htm)</u>

104 Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document

**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.

---

| | | |
|:---|:---|:---|
| Date: | February 24, 2023 | **Federal Home Loan Bank of Boston** |
|  |  | <u>By:/s/ Frank Nitkiewicz</u> |
|  |  | Frank Nitkiewicz |
|  |  | Executive Vice President, Chief Operating Officer and Chief Financial Officer |

---

## Exhibit 99.1

![logoa02.gif](logoa02.gif)

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| | |
|:---|:---|
| | **NEWS RELEASE** |
| FOR IMMEDIATE RELEASE | |

---

**FEDERAL HOME LOAN BANK OF BOSTON ANNOUNCES 2022**

**FOURTH QUARTER AND ANNUAL RESULTS, DECLARES DIVIDEND**

BOSTON (February 24, 2023) - The Federal Home Loan Bank of Boston announced its preliminary, unaudited fourth quarter and annual financial results for 2022, reporting net income of $55.4 million for the quarter and $184.2 million for the year. The Bank expects to file its annual report on Form 10-K for the year ending December 31, 2022, with the U.S. Securities and Exchange Commission next month.

The Bank's board of directors has declared a dividend equal to an annual yield of 6.67%, the daily average of the Secured Overnight Financing Rate for the fourth quarter of 2022 plus 300 basis points. The dividend, based on average stock outstanding for the fourth quarter of 2022, will be paid on March 2, 2023. As always, dividends remain at the discretion of the board.

"The Bank's strong financial performance in 2022 was driven in part by growth in our advances activity and higher market interest rates," said FHLBank Boston President and CEO Timothy J. Barrett. "We continue to provide value to all our members so they can meet the unique needs of the communities they serve. We are pleased to set aside $26 million for our Affordable Housing Program and once again make critical contributions to support homeownership through our Housing Our Workforce program while also promoting job creation and preservation through our Jobs for New England program."

**Fourth Quarter 2022 Operating Highlights**

The Bank's overall results of operations are influenced by the economy, financial markets and, in particular, by members' demand for advances. During the fourth quarter of 2022, the Federal Open Market Committee (FOMC) raised the target range for the federal funds rate to between 425 and 450 basis points and anticipates that ongoing increases in the target range will be appropriate given elevated, but decelerating, rates of inflation. Long-term interest rates were relatively stable while short- and intermediate-term rates rose, resulting in an inverted yield curve during the quarter reflecting concerns over a potential economic downturn. Additionally, the Bank experienced a continuing increase in demand for advances from our members during the quarter ended December 31, 2022.

Net income for the quarter ending December 31, 2022, was $55.4 million, compared with net income of $25.9 million for the same period in 2021. The increase in net income for the quarter was primarily due to an increase of $14.4 million in net interest income after provision for credit losses, an improvement of $6.2 million in net gains and losses on trading securities, and a $5.3 million decrease in losses on early extinguishment of debt.

Net interest income after provision for credit losses for the three months ended December 31, 2022, was $70.8 million, compared with $56.4 million for the same period in 2021. The $14.4 million increase in net interest income after provision for credit losses was driven by growth in our advances and investments portfolios, growth in capital, as well as an increase in yields in the quarter ended December 31, 2022 resulting from higher market interest rates. These favorable impacts were partially offset by a decrease of $16.7 million of prepayment fee income<sup>(1)</sup> and an increase of $13.9 million of net unrealized losses on fair value hedges. Net interest spread was 0.19% for the quarter

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ended December 31, 2022, a decrease of 45 basis points from the same period in 2021, and net interest margin was 0.45%, a decrease of 21 basis points from the same period in 2021.

**December 31, 2022 Balance-Sheet Highlights**

Total assets increased $30.4 billion, or 93.3 percent, to $62.9 billion at December 31, 2022, up from $32.5 billion at year-end 2021. During the year ended December 31, 2022, advances increased $29.3 billion, or 237.1%, to $41.6 billion, compared with $12.3 billion at year-end 2021. The significant increase in advances was concentrated in variable-rate advances and short-term fixed-rate advances, reflecting rising demand for wholesale funding at member institutions.

Total investments were $17.9 billion at December 31, 2022, up from $16.4 billion at the prior year end, with most of the increase concentrated in short term investments that support liquidity needs resulting from higher demand for advances. Mortgage loans totaled $2.8 billion at December 31, 2022, a decrease of $361.7 million from year-end 2021 as paydowns continued to outpace new purchases because mortgage refinance activity has declined significantly and home sales have slowed.

GAAP capital at December 31, 2022, was $3.4 billion, an increase of $884.3 million from $2.5 billion at year-end 2021. During 2022, capital stock increased by $1.1 billion, primarily attributable to the increase in advances. Total retained earnings grew to $1.7 billion during 2022, an increase of $142.2 million, or 9.2%, from December 31, 2021. Of this amount, restricted retained earnings<sup>(4)</sup> totaled $399.7 million at December 31, 2022. Accumulated other comprehensive loss totaled $306.4 million at December 31, 2022, a decrease of $335.4 million from accumulated other comprehensive income as of December 31, 2021, mainly attributable to declines in value of available-for-sale investment securities as interest rates rose sharply during 2022.

The Bank was in compliance with all regulatory capital ratios at December 31, 2022, and in the most recent information available was classified "adequately capitalized" by its regulator, the Federal Housing Finance Agency, based on the Bank's financial information at September 30, 2022.<sup>(2)</sup> 

**2022 Annual Operating Highlights**

Net income for the year ending December 31, 2022, was $184.2 million, compared with net income of $69.5 million for 2021, the result of an increase of $70.1 million in net interest income after provision for credit losses, an improvement of $46.0 million in net losses on trading securities, and a $11.5 million decrease in losses on early extinguishment of debt. These results led to a $20.5 million statutory contribution to the Bank's Affordable Housing Program for the year. In addition, the Bank made a voluntary contribution of $5.5 million to the Affordable Housing Program.

Net interest income after provision for credit losses for the year ended December 31, 2022, was $282.3 million, compared with $212.2 million for 2021. The $70.1 million increase in net interest income after provision for credit losses was driven by growth in our advances and investments portfolios, growth in capital, an increase in yields in the year ended December 31, 2022, resulting from higher market interest rates and an increase of $22.2 million of net unrealized gains on fair value hedges, partially offset by a decrease of $30.7 million of prepayment fee income. Net interest spread was 0.42% for the year ended December 31, 2022, a decrease of 15 basis points from the same period in 2021, and net interest margin was 0.57%, a decrease of three basis points from 2021.

**About the Bank**

------

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 provide highly reliable wholesale funding and liquidity to its member financial institutions in New England. The Bank also develops and delivers competitively priced financial products, services, and expertise that support housing finance, community development, and economic growth, including programs targeted to lower-income households.

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| |
|:---|
| Contact: |
| Adam Coldwell |
| 617-292-9774 |
| adam.coldwell@fhlbboston.com |

---

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**Federal Home Loan Bank of Boston**

**Balance Sheet Highlights**

(Dollars in thousands)

(Unaudited)

---

| | | | |
|:---|:---|:---|:---|
| | **12/31/2022** | **9/30/2022** | **12/31/2021** |
| **ASSETS** | | | |
| Cash and due from banks | $7593 | $35913 | $204993 |
| Advances | 41599581 | 33665311 | 12340020 |
| Investments <sup>(3)</sup> | 17918781 | 21748784 | 16372499 |
| Mortgage loans held for portfolio, net | 2758429 | 2820696 | 3120159 |
| Other assets | 613165 | 598835 | 507621 |
| Total assets | $62897549 | $58869539 | $32545292 |
| **LIABILITIES** |  |  |  |
| Consolidated obligations, net | $58540803 | $54502730 | $28888352 |
| Deposits | 655487 | 938551 | 884032 |
| Other liabilities | 285938 | 298772 | 241897 |
| **CAPITAL** |  |  |  |
| Class B capital stock | 2031178 | 1717748 | 953638 |
| Retained earnings - unrestricted | 1290873 | 1267192 | 1179986 |
| Retained earnings - restricted <sup>(4)</sup> | 399695 | 388621 | 368420 |
| Total retained earnings | 1690568 | 1655813 | 1548406 |
| Accumulated other comprehensive (loss) income | (306425) | (244075) | 28967 |
| Total capital | 3415321 | 3129486 | 2531011 |
| Total liabilities and capital | $62897549 | $58869539 | $32545292 |
| Total regulatory capital-to-assets ratio | 5.9% | 5.7% | 7.7% |
| Ratio of market value of equity (MVE) to par value of capital stock <sup>(5)</sup> | 171% | 183% | 253% |

---

**Income Statement Highlights**

(Dollars in thousands)

(Unaudited)

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the Year Ended** | **For the Year Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** |
| | **12/31/2022** | **12/31/2021** | **12/31/2022** | **9/30/2022** | **12/31/2021** |
| Total interest income | $1226964 | $425535 | $586877 | $362243 | $102566 |
| Total interest expense | 944502 | 214834 | 516194 | 278623 | 46509 |
| Net interest income | 282462 | 210701 | 70683 | 83620 | 56057 |
| Net interest income after provision for credit losses | 282291 | 212163 | 70813 | 83120 | 56412 |
| Net (losses) gains on trading securities | (360) | (46341) | 407 | 120 | (5805) |
| Other income (loss) | 14004 | (541) | 4063 | 4170 | (1757) |
| Operating expense | 66913 | 66033 | 14833 | 17400 | 17173 |
| Federal Housing Finance Agency and Office of Finance | 8926 | 7653 | 2870 | 1918 | 2014 |
| AHP voluntary contribution | 5479 | 4761 | (6172) | (2329) | (1262) |
| JNE, HHNE, and HOW subsidy expense <sup>(6)</sup> | 5975 | 4417 | 1619 | 2620 | 351 |
| Other expense | 3910 | 5217 | 592 | 1112 | 1785 |
| AHP assessment | 20521 | 7739 | 6172 | 6682 | 2887 |
| Net income | $184211 | $69461 | $55369 | $60007 | $25902 |
| **Performance Ratios:** <sup>(7)</sup> |  |  |  |  |  |
| Return on average assets | 0.37% | 0.19% | 0.35% | 0.41% | 0.31% |
| Return on average equity <sup>(8)</sup> | 6.47% | 2.62% | 6.86% | 7.97% | 4.00% |
| Net interest spread | 0.42% | 0.57% | 0.19% | 0.41% | 0.64% |
| Net interest margin | 0.57% | 0.60% | 0.45% | 0.58% | 0.66% |

---

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<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Prepayment fees received from borrowers on prepaid advances are presented net of any associated basis adjustments related to hedging activities on those advances and net of deferred prepayment fees on advance prepayments considered to be loan modifications. Additionally, for certain advances products, the prepayment-fee provisions of the advance agreement could result in either a payment from the borrower or to the borrower when such an advance is prepaid, based upon market conditions at the time of prepayment (referred to as a symmetrical prepayment fee). Advances with a symmetrical prepayment-fee provision are hedged with derivatives containing offsetting terms, so that we are financially indifferent to the borrowers' decision to prepay such advances. The net amount of prepayment fees is reflected as interest income in the statement of operations.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;For additional information on the Bank's capital requirements, see Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Capital in the Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 18, 2022 (the 2021 Annual Report).

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;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.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The Bank's capital plan and a joint capital enhancement agreement among all Federal Home Loan Banks require the Bank to allocate a certain amount, generally not less than 20% of each of quarterly net income and adjustments to prior net income, to a restricted retained earnings account until a total required allocation is met. Amounts in the restricted retained earnings account are unavailable to be paid as dividends, which may be paid from current net income and unrestricted retained earnings. For additional information, see Item 5 — Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in the 2021 Annual Report.

<sup>(5)</sup> &nbsp;&nbsp;&nbsp;&nbsp;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 capital 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 — Measurement of Market and Interest Rate Risk in the 2021 Annual Report.

<sup>(6)</sup> &nbsp;&nbsp;&nbsp;&nbsp;We have certain subsidized advance and grant programs, including our Jobs for New England (JNE), Helping to House New England (HHNE), and Housing our Workforce (HOW) programs. For additional information, see Item 1 — Business — Targeted Housing and Community Investment Programs in the 2021 Annual Report.

<sup>(7)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Yields for quarterly periods are annualized.

<sup>(8)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Return on average equity is net income divided by the total of the average daily balance of outstanding Class B capital stock, accumulated other comprehensive income, and total retained earnings.

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**Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995**

This release, including the unaudited balance sheet highlights 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, which include statements with respect to the Bank's plans, objectives, projections, estimates, or predictions. These statements are based on the Bank's expectations as of the date hereof. The words "preliminary," "expects," "will," "continue," 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. For example, statements about future declarations of dividends and expectations for advances balances, mortgage-loan investments, and net income are forward-looking statements, among other forward-looking statements herein.

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 and accretion of premiums and discounts 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; the allowance for credit losses on investment securities and mortgage loans; instability in the credit and debt markets; economic conditions (including effects on, among other things, mortgage-backed securities); changes in demand for advances or consolidated obligations of the Bank or the Federal Home Loan Bank system; changes in interest rates; volatility of market prices, rates, and indices that could affect the value of financial instruments; the expected discontinuance of LIBOR and the adverse consequences it could have for market participants, including the Bank; the Bank's ability to execute its business model and pay future dividends; and prepayment speeds on mortgage assets. In addition, the Bank reserves the right to change its plans for any programs for any reason, including but not limited to, legislative or regulatory changes, changes in membership, or changes at the discretion of the board of directors. Accordingly, the Bank cautions that actual results could differ materially from those expressed or implied in these forward-looking statements or could impact the extent to which a particular plan, objective, projection, estimate or prediction is realized, and you are cautioned not to place undue reliance on such statements. 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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