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FHLB Cincinnati Reports Q3 2025 Financial Results

On October 29, 2025, the Federal Home Loan Bank of Cincinnati (FHLB) disclosed its unaudited financial figures for the third quarter ending September 30, 2025. The bank, which plays a pivotal role in offering liquidity to member financial institutions and supporting affordable housing initiatives, has reported its performance amid fluctuating interest rates and investment challenges.

Financial Overview

Throughout the first three quarters of 2025, the FHLB maintained its dedication to providing access to liquidity for its member institutions while also contributing to affordable housing and community investments. The bank demonstrated robust profitability during this period, which allowed it to offer competitive returns to its shareholders and enhance its capital through retained earnings.

In the third quarter, the FHLB's net income stood at $144 million, down by $20 million compared to the same period in 2024. For the first nine months of 2025, the net income totaled $438 million, reflecting a reduction of $16 million compared to the prior year. These declines were primarily attributed to lower average interest rates affecting the returns on the bank's interest-earning assets and mortgage loans in its portfolio. However, the impact of decreased income was somewhat offset by an increase in the average interest-earning assets and a reduction in voluntary contributions toward housing initiatives.

Key Financial Highlights

As of September 30, 2025, the total assets of the FHLB amounted to $135.1 billion, representing a $2.8 billion increase (two percent) from the end of 2024. The Mission Assets and Activities, which include essential offerings for members like Advances and Letters of Credit, totaled $132.0 billion, down $3.6 billion (three percent) from the previous year-end.

The total investments rose by $2.7 billion (six percent) to reach $47.8 billion, driven primarily by growth in mortgage-backed securities (MBS). Noteworthy is that $20.5 billion of these investments were in MBS from federal entities such as Fannie Mae, Freddie Mac, and Ginnie Mae, ensuring a solid backing for the bank's operations.

The FHLB's GAAP capital was reported at $6.8 billion, showing a one percent increase since the end of 2024. Both the GAAP and regulatory capital-to-assets ratios stood above the required minimum, reflecting a strong financial standing.

Dividends and Community Contributions

On September 18, 2025, the FHLB distributed a cash dividend at an annualized rate of 8.75 percent, offering a return that exceeded the third-quarter average Secured Overnight Financing Rate by 4.42 percentage points.

As part of its commitment to affordable housing, the FHLB is mandated to allocate ten percent of its profits to support housing initiatives annually. For the first nine months of 2025, the bank has set aside $49 million earmarked for the Affordable Housing Program (AHP), which will be distributed to members in 2026 through various programs aimed at providing housing assistance to low and moderate-income households.

Additionally, the FHLB has pledged to make voluntary contributions amounting to $36 million in 2025, which represents five percent of its 2024 earnings. During the first nine months of this year, the FHLB contributed $21 million towards these community investment programs.

Looking Forward

The FHLB anticipates filing its third-quarter 2025 Form 10-Q with the Securities and Exchange Commission by November 7, 2025. As an AA+ rated wholesale cooperative bank, the FHLB serves a vital function by providing funding and resources to its 601 member financial institutions throughout Kentucky, Ohio, and Tennessee, positioning itself as a key player in the nation's financial landscape.

In summary, despite the challenges posed by fluctuating interest rates, the Federal Home Loan Bank of Cincinnati continues to perform well financially while actively contributing to its dual mission of member support and community investment.