The Federal Home Loan Bank of Boston announced its preliminary, unaudited first quarter results for 2023, reporting net income of $57.2 million for the quarter.
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Net income for the quarter ending March 31, 2023, was $57.2 million, compared with net income of $27.8 million for 2022, the result of an increase of $22.9 million in net interest income after provision for credit losses and a decrease of $8.5 million in Affordable Housing Program (AHP) voluntary expense.
These results led to a $6.4 million statutory contribution to the Bank's AHP for the quarter, an increase of $3.3 million compared to the first quarter of 2022.
Net interest income after provision for credit losses for the three months ended March 31, 2023, was $81.8 million, compared with $58.9 million for 2022.
The $22.9 million increase in net interest income after provision for credit losses was driven by growth in our advances and investments portfolios, growth in capital, and an increase in yields in the three months ended March 31, 2023, resulting from higher market interest rates.
These improvements to net interest income were moderated by a $35.0 million decrease of net unrealized gains and losses on fair value hedges, and a $12.0 million decrease in net accretion of MBS premium, both of which were primarily driven by a decrease of intermediate-term interest rates during the quarter versus an increase in the comparable quarter one year ago.
Net interest spread was 0.17% for the three months ended March 31, 2023, a decrease of 53 basis points from the same period in 2022 and net interest margin was 0.47%, a decrease of 27 basis points from 2022.
The decrease of net interest spread and margin was primarily attributable to the decline in unrealized gains and losses on fair value hedges and net accretion of MBS premium, in addition to the impact of higher concentrations of advances and short-term investments on our balance sheet, which tend to have lower spreads to funding costs. ■