Lower MBS losses push FHLB Pittsburgh to $8.3 million annual profit
The Federal Home Loan Bank of Pittsburgh is crediting lower-than-projected losses on the collateral underlying its private-label mortgage-backed securities for buoying the bank to an $8.3 million profit for fiscal 2010. That profit compares to a loss of $37.4 million in 2009. In the fourth quarter, FHLB of Pittsburgh earned $21.5 million, up significantly from a loss of $5.5 million in the same quarter a year earlier. The improvement also was driven by lower "other-than-temporary impairment credit losses" on the bank's private-label MBS portfolio. The bank narrowed credit losses to $13.1 million for the recent fourth-quarter compared to losses of $65.4 million a year earlier. The bank also said Tuesday it plans to repurchase $200 million of its stock during the first quarter. The bank suspended its stock repurchases and dividend payments in 2008, saying it would not reinstate either program until it was fiscally prudent to do so. While this quarter's repurchase plan indicates the bank is ready to return to its old policies, the dividend suspension remains in effect. The Pittsburgh FHLB is one of 12 in the U.S. The banks provide low-cost funding to back affordable housing and community projects. Write to Kerri Panchuk.