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FHLB Cincinnati: Second Quarter 2026 Financial Highlights

On July 29, 2026, the Federal Home Loan Bank of Cincinnati (FHLB) disclosed its unaudited financial results for the second quarter that ended on June 30, 2026. This report provides a comprehensive overview of the bank's performance, emphasizing its ongoing commitment to supporting member institutions and promoting affordable housing.

Overview

In the first half of 2026, the FHLB successfully advanced its mission by ensuring liquidity funding for its member financial institutions while enhancing community investment. Strong profitability levels enabled the bank to offer competitive returns to its shareholders.

Operating Results

For the second quarter of 2026, net income stood at $128 million, resulting in a return on average equity (ROE) of 7.16 percent. This marked a decrease from the net income of $149 million and ROE of 8.49 percent reported during the same period in 2025. Over the first six months, the FHLB recorded net income of $228 million, compared to $294 million in 2025, reflecting a significant dip in ROE to 6.64 percent from 8.62 percent in the preceding year.

The decline in net income during both comparison periods was attributed mainly to reduced average interest rates, which hindered earnings from interest-earning assets. However, partial offsets included gains from interest rate swaps and related financial instruments in Q2 2026, contrasting with losses in the same quarter of 2025.

Financial Condition Highlights

As of June 30, 2026, total assets reached $153.3 billion, reflecting a remarkable increase of 19 percent, or $23.9 billion, from the previous year. Key products of the FHLB, such as Advances, Letters of Credit, and the Mortgage Purchase Program, accounted for a substantial portion of Mission Assets, which climbed to $147.6 billion—up 18 percent from year-end 2025.

In terms of investments, total assets included $49.7 billion, marking a modest decrease of one percent from the previous year. However, liquidity investments fluctuated daily to meet the borrowing needs of members.

Capital and Dividends

The FHLB registered a GAAP capital increase of 16 percent to $7.6 billion by June 30, compared to year-end 2025. Both the GAAP and regulatory capital-to-assets ratios exceeded the minimum required levels. Notably, a cash dividend of 7.50 percent annualized rate was paid to stockholders, maintaining a competitive edge above the market averages.

Housing and Community Investment Initiatives

The FHLB has a legal obligation to allocate 10 percent of its profits annually towards affordable housing initiatives. From the first half of 2026, an accrual of $26 million was earmarked for the Affordable Housing Program (AHP), which supports low-income households. In addition, a voluntary contribution of $34 million was pledged towards housing and community investment in 2026, with $19 million already disbursed in the first half of the year.

Overall, the FHLB remains committed to delivering impactful results, promoting affordable housing, and ensuring its members have access to necessary funding and resources. This report demonstrates the FHLB's resilience and adaptability amid market fluctuations and evolving economic conditions.

The FHLB of Cincinnati, rated AA+, continues to be a wholesale cooperative bank, providing financial services to over 588 member institutions across Kentucky, Ohio, and Tennessee. As it prepares to submit its second quarter 2026 Form 10-Q filing to the SEC on August 11, 2026, the bank looks forward to contributing further to essential community development efforts.