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 …