FEDERAL HOME LOAN BANK OF BOSTON ANNOUNCES 2025 THIRD QUARTER RESULTS, DECLARES DIVIDEND (Form 8-K)

FEDERAL HOME LOAN BANK OF BOSTON ANNOUNCES 2025

THIRD QUARTER RESULTS, DECLARES DIVIDEND

BOSTON (October 24, 2025) - The Federal Home Loan Bank of Boston announced its preliminary, unaudited third quarter financial results for 2025, reporting net income of $66.0 million for the quarter. The Bank expects to file its quarterly report on Form 10-Q for the quarter ending September 30, 2025, with the U.S. Securities and Exchange Commission next month.

The Bank's board of directors has declared a dividend equal to an annual yield of 7.39%, the daily average of the Secured Overnight Financing Rate for the third quarter of 2025 plus 300 basis points. The dividend, based on average stock outstanding for the third quarter of 2025, will be paid on November 4, 2025. As always, dividends remain at the discretion of the board.

"An increase in net interest income contributed to FHLBank Boston's steady financial performance in the third quarter," said President and CEO Timothy J. Barrett. "The consistent borrowing activity and increasing utilization of the Mortgage Partnership Finance® program by members fueled our support of affordable homeownership and economic development throughout New England through our Affordable Housing Program and voluntary programs."

Third Quarter 2025 Operating Highlights

The Bank's overall results of operations are influenced by the economy, interest rates and members' demand for advances. During the third quarter of 2025, the Federal Open Market Committee (FOMC) lowered the target range for the federal funds rate from a range of 425 to 450 basis points to a range of 400 to 425 basis points. Intermediate-term interest rates and long-term interest rates declined slightly during the quarter.

Net income increased $5.7 million to $66.0 million for the three months ended September 30, 2025, from $60.4 million for the same period of 2024. The increase in net income was primarily due to an increase of $11.1 million in net interest income after provision for credit losses, partially offset by an increase of $1.7 million in discretionary housing and community investment programs(1) expense and voluntary affordable housing program contributions, and a $1.6 million increase in operating expenses. These results led to a $7.3 million statutory contribution to the Bank's Affordable Housing Program for the quarter. The Bank made a $6.1 million contribution to our discretionary housing and community investment programs, and a voluntary contribution of $681,000 to the Affordable Housing Program for the quarter ended September 30, 2025.

Net interest income after provision for credit losses for the three months ended September 30, 2025, was $100.9 million, compared with $89.8 million for the corresponding period in 2024. The $11.1 million increase in net interest income after provision for credit losses was primarily driven by a $9.1 million decrease in mortgage-backed security net amortization and an $8.9 million favorable variance in net unrealized gains and losses on fair value hedge ineffectiveness, both of which were attributable to a significantly smaller decline in intermediate- and long-term interest rates during the quarter compared to the same quarter one year ago. In addition, our average outstanding advances, mortgage loans, and mortgage-backed securities increased $3.6 billion, $603.5 million, and $602.5 million,

respectively, while average capital increased $222.9 million. Partially offsetting these increases to net interest income after provision for credit losses was the effect on earnings from average short-term interest rates that were approximately 100 basis points lower than during the same quarter one year ago.

Net interest spread was 0.27% for the three months ended September 30, 2025, an increase of 8 basis points from the same period in 2024, and net interest margin was 0.52%, unchanged from the three months ended September 30, 2024. The increase in net interest spread was primarily attributable to the increase in net interest income after provision for credit losses discussed above.

September 30, 2025 Balance-Sheet Highlights

Total assets increased $3.7 billion, or 5.2%, to $75.7 billion at September 30, 2025, up from $72.0 billion at year-end 2024. Advances totaled $42.8 billion at September 30, 2025, a decrease of $2.4 billion from year-end 2024. Total investments were $28.2 billion at September 30, 2025, an increase of $5.7 billion from $22.5 billion at the prior year end, driven primarily by growth in low-yielding short-term money market instruments held on our balance sheet to manage our liquidity position, and a $1.0 billion increase in mortgage-backed securities. Mortgage loans totaled $4.2 billion at September 30, 2025, an increase of $478.2 million from year-end 2024 as mortgage sales to the Bank increased.

Total capital at September 30, 2025, was $3.9 billion, an increase of $6.8 million from $3.9 billion at year-end 2024. During 2025, capital stock decreased by $87.6 million, primarily attributable to the decrease in advances. Total retained earnings grew to $2.0 billion during 2025, an increase of $47.3 million, or 2.5%, from December 31, 2024. Of this amount, restricted retained earnings(2) totaled $543.2 million at September 30, 2025. Accumulated other comprehensive loss totaled $207.9 million at September 30, 2025, an improvement of $47.1 million from accumulated other comprehensive loss as of December 31, 2024.

The Bank was in compliance with all regulatory capital ratios at September 30, 2025, and in the most recent information available was classified "adequately capitalized" by its regulator, the Federal Housing Finance Agency, based on the Bank's financial information at June 30, 2025.(3)

About the Bank

The Federal Home Loan Bank of Boston is a cooperatively owned wholesale bank for housing finance in the six New England states. Its mission is to provide highly reliable wholesale funding and liquidity to its member financial institutions in New England. The Bank also develops and delivers competitively priced financial products, services, and expertise that support housing finance, community development, and economic growth, including programs targeted to lower-income households.

Contact:
Adam Coldwell
617-292-9774
[email protected]

Federal Home Loan Bank of Boston

Balance Sheet Highlights

(Dollars in thousands)

(Unaudited)

						9/30/2025						6/30/2025						12/31/2024
ASSETS
Cash and due from banks						$	9,930					$	16,964					$	5,149
Advances						42,774,048						47,167,639						45,163,175
Investments (4)						28,220,995						26,965,851						22,499,068
Mortgage loans held for portfolio, net						4,157,362						3,941,304						3,679,150
Other assets						571,632						601,816						646,424
Total assets						$	75,733,967					$	78,693,574					$	71,992,966
LIABILITIES
Consolidated obligations, net						$	70,262,933					$	73,321,155					$	66,738,675
Deposits						1,077,463						806,270						877,081
Other liabilities						533,936						588,559						524,365
CAPITAL
Class B capital stock						2,107,549						2,291,941						2,195,167
Retained earnings - unrestricted						1,416,765						1,404,666						1,403,455
Retained earnings - restricted (2)						543,244						530,034						509,245
Total retained earnings						1,960,009						1,934,700						1,912,700
Accumulated other comprehensive loss						(207,923)						(249,051)						(255,022)
Total capital						3,859,635						3,977,590						3,852,845
Total liabilities and capital						$	75,733,967					$	78,693,574					$	71,992,966
Total regulatory capital-to-assets ratio						5.4		%				5.4		%				5.7		%
Ratio of market value of equity (MVE) to par value of capital stock (5)						176		%				167		%				167		%

Income Statement Highlights

(Dollars in thousands)

(Unaudited)

						For the Three Months Ended																		For the Nine Months Ended
						9/30/2025						6/30/2025						9/30/2024						9/30/2025						9/30/2024
Total interest income						$	879,083					$	874,304					$	911,873					$	2,614,178					$	2,736,507
Total interest expense						777,981						776,269						822,086						2,322,252						2,428,623
Net interest income						101,102						98,035						89,787						291,926						307,884
Net interest income after provision for credit losses						100,910						97,827						89,791						291,526						307,688
Other income						4,543						2,223						5,483						10,668						11,303
Operating expense						21,301						21,727						19,652						63,506						58,648
Federal Housing Finance Agency and Office of Finance						2,794						2,696						2,366						8,279						6,952
AHP voluntary contribution						681						2,238						507						7,353						1,852
Discretionary housing and community investment programs (1)						6,125						20,142						4,567						31,084						16,673
Other expense						1,156						1,063						1,093						3,059						3,278
AHP assessment						7,348						5,226						6,720						18,916						23,193
Net income						$	66,048					$	46,958					$	60,369					$	169,997					$	208,395
Performance Ratios: (6)
Return on average assets						0.34		%				0.24		%				0.34		%				0.29		%				0.40		%
Return on average equity (7)						6.77		%				4.84		%				6.57		%				5.83		%				7.74		%
Net interest spread						0.27		%				0.25		%				0.19		%				0.25		%				0.25		%
Net interest margin						0.52		%				0.51		%				0.52		%				0.51		%				0.60		%

(1) We have certain discretionary subsidized advance and grant programs, including our Jobs for New England, Housing Our Workforce, Lift Up Homeownership, CDFI Advance, and permanent rate buydown programs. For additional information see Item 1 - Business - Targeted Housing and Community Investment Programs in the Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 14, 2025 (the 2024 Annual Report).

(2) The Bank's capital plan and a joint capital enhancement agreement among all Federal Home Loan Banks require the Bank to allocate a certain amount, generally not less than 20% of each of quarterly net income and adjustments to prior net income, to a restricted retained earnings account until a total required allocation is met. Amounts in the restricted retained earnings account are unavailable to be paid as dividends, which may be paid from current net income and unrestricted retained earnings. For additional information, see Item 5 - Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in the 2024 Annual Report.

(3) For additional information on the Bank's capital requirements, see Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Capital in the 2024 Annual Report.

(4) Investments include available-for-sale securities, held-to-maturity securities, trading securities, interest-bearing deposits, securities purchased under agreements to resell, and federal funds sold.

(5) MVE equals the difference between the theoretical market value of assets and the theoretical market value of liabilities, and the ratio of MVE to par value of Bank capital stock can be an indicator of future net income to the extent that it demonstrates the impact of prior interest-rate movements on the capacity of the current balance sheet to generate net interest income. However, this ratio does not always provide an accurate indication of future net income. Accordingly, investors should not place undue reliance on this ratio and are encouraged to read the Bank's discussion of MVE, including discussion of the limitations of MVE as a metric, in Item 7A - Quantitative and Qualitative Disclosures About Market Risk - Measurement of Market and Interest Rate Risk in the 2024 Annual Report.

(6) Yields for quarterly periods are annualized.

(7) Return on average equity is net income divided by the total of the average daily balance of outstanding Class B capital stock, accumulated other comprehensive loss, and total retained earnings.

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