Federal Home Loan Bank of New York - 10-K

Item 1A.    Risk Factors.

The following discussion sets forth the material risk factors that could affect the FHLBNY’s financial condition and results of

operations. Readers should not consider any descriptions of such factors to be a complete set of all potential risks that could affect the

FHLBNY.

Market and Economic Risks

A prolonged downturn in the economy, including the U.S. housing market, and related U.S. government monetary and fiscal

policies, could adversely affect the FHLBNY’s business activities and results of operations.

The FHLBNY’s business and results of operations are sensitive to the U.S. economy and the U.S. housing market. A prolonged period

of slow growth in the U.S. economy, deterioration in general economic conditions, or a downturn in the housing markets could

adversely affect our borrowers, particularly those whose businesses are concentrated in the mortgage industry. For example, if home

prices decline, the value of collateral securing member credit may decline, which could in turn increase the possibility of under-

collateralization and the risk of loss if a member defaults. Deterioration in the residential mortgage markets and potential changes in

governmental policy decisions could also affect the value of collateral supporting our mortgage loan portfolio, increasing the risk of

loss due to credit impairment.

Unfavorable economic and market conditions can be caused by many factors. Volatility and uncertainty in global economic and

political conditions can significantly affect U.S. economic conditions and financial markets. Negative trends in the global economy

and political climate could influence, among other business activities, member borrowing activity and the Bank’s lending and

investment patterns. Additionally, investors’ negative perceptions of the state of the U.S. economy could lead to a decline in investor

demand for consolidated obligations. Furthermore, natural disasters, pandemics or other widespread health emergencies, terrorist

attacks, cyberattacks, civil unrest, geopolitical instability or conflicts, trade disruptions, economic or other sanctions, or other

unanticipated or catastrophic events could create economic and financial disruptions and uncertainties, which may lead to an increased

risk of credit losses for the Bank and may adversely affect their cost of funding or access to funding. These events may also lead to

operational difficulties that could adversely affect the ability of the Bank to conduct and manage their businesses. Any of these factors

could adversely affect our business activities and results of operations.

In addition, the Banks businesses and results of operations could be significantly affected by the monetary and fiscal policies of the

U.S. government and its agencies, including the Federal Reserve and the U.S. Treasury. The Federal Reserve Board’s policies directly

and indirectly influence interest rates on our assets and liabilities and could adversely affect the demand for advances and for

consolidated obligations as well as the financial condition and results of operations of the Bank. In addition, the Bank currently plays a

predominant role as a lender in the federal funds market; therefore, any disruption in the federal funds market or any related regulatory

or policy change may adversely affect our cash management activities, results of operations, and reputation. Fiscal policies of the U.S.

government could also indirectly affect the FHLBNY’s cost of funding. For example, sudden or large increases in the supply of

Treasury securities could lead to a general increase in short-term market interest rates, including those for short-term GSE debt

securities. Also, increases in Treasury issuances could temporarily reduce the capacity of the dealers of consolidated obligations, many

of which are also primary dealers for the Federal Reserve Bank of New York, to participate in the issuances of consolidated

obligations, which could in turn increase the Banks’ cost of funding. These factors could also cause temporary technical market

distortions that may diminish the relative value and pricing of certain consolidated obligations and the Bank’s hedging strategies.

Changes in interest rates or an inability to successfully manage interest-rate risk could have a material adverse effect on

FHLBNY’s net interest income.

The FHLBNY realizes net interest income primarily from the spread between interest earned on our outstanding advances and

investments less the interest paid on our consolidated obligations and other liabilities. Our business and results of operations are

significantly affected by the monetary policies of the U.S. government and our agencies. Our ability to prepare for changes regarding

the direction and speed of interest-rate changes or to use derivatives to hedge related exposures, such as basis risk, significantly affects

the success of our asset and liability management activities and level of net interest income. If we are unable to enter into derivative

instruments on acceptable terms, we may be unable to effectively manage our interest-rate and other risks, which could adversely

affect our financial condition and results of operations.

We use a number of measures to monitor and manage interest-rate risk, including income simulations, value at risk, and duration or

market value sensitivity analyses. Given the unpredictability of the financial markets, capturing all potential outcomes in these

analyses is extremely difficult. Key assumptions include, but are not limited to, loan volumes and pricing, market conditions for

consolidated obligations, interest-rate spreads and prepayment speeds, implied volatility of interest rates and options contracts, cash

flows on mortgage-related assets, and other model and model related assumptions. Actual results may differ from simulated results

due to the timing, magnitude, and frequency of interest-rate changes and changes in market conditions and management strategies,

among other factors. In addition, volatility and disruption in the capital markets may result in a higher level of volatility in our interest-

rate risk profile and could negatively affect our ability to manage interest-rate risk effectively.

Interest-rate changes can exacerbate prepayment and extension risks. Increases in interest rates may create extension risk, which is the

risk that the mortgage-related investments will remain outstanding longer than expected at below-market yields. Therefore, any

changes in interest rates could adversely affect our net interest income.

Changes to the credit ratings of consolidated obligations could adversely affect the FHLBNY’s ability to access the capital markets,

our primary source of funding, on acceptable terms, which could adversely affect the financial condition and results of operations

of the Bank.

The FHLBanks’ consolidated obligations are rated AA+/A-1+ with a stable outlook by S&P and Aa1/P-1 with a stable outlook by

Moody’s. Rating agencies may from time to time change a rating or outlook or issue negative reports. Investors should not take the

FHLBanks’ historical or current ratings as an indication of future ratings for the FHLBanks’ consolidated obligations. Because the

FHLBanks are jointly and severally liable for consolidated obligations, negative developments at any FHLBank may affect these

credit ratings or result in the issuance of a negative report regardless of the financial condition and results of operations of the other

FHLBanks. In addition, because of the FHLBanks’ GSE status, the credit ratings of the FHLBank System, the FHLBanks, and

consolidated obligations are directly influenced by the sovereign credit rating of the United States. For example, downgrades to the

U.S. sovereign credit rating or outlook have occurred and may occur again if the U.S. government fails to adequately address, based

on the credit rating agencies’ criteria, its fiscal budget deficit or statutory debt limit. In August 2023, Fitch Ratings downgraded the

ratings of the United States and, in November 2023, Moody’s changed the outlook on the ratings of the United States to negative from

stable, which also caused the respective rating agencies to take similar actions with respect to certain GSEs such as the FHLBanks. As

a result, if the U.S. sovereign credit ratings or outlook were further downgraded, similar downgrades in the credit ratings or outlook of

the FHLBanks and consolidated obligations would most likely occur, even though the consolidated obligations are not obligations of,

or guaranteed by, the United States.

Future downgrades in credit ratings or outlook may result in higher funding costs, higher volatilities, or other disruptions in the

FHLBanks’ access to capital markets, including additional collateral posting requirements under certain derivative instrument

arrangements. Furthermore, member demand for certain FHLBank products could weaken. To the extent that we cannot access

funding when needed on acceptable terms to effectively manage our cost of funds, our financial condition and results of operations

and the FHLBanks on a combined basis and the value of our membership could be negatively affected.

Legislative and Regulatory Risks

Changes in the legislative and regulatory environment could negatively affect the FHLBNY business operations, results of

operations, the reputation and the value of the Bank’s membership.

As a GSE, the FHLBNY is organized under the authority of the FHLBank Act and governed by U.S. federal laws and regulations as

adopted and applied by the FHFA. Congress could amend the FHLBank Act or other statutes and federal executive orders could be

issued in ways that significantly affect the rights and obligations of the FHLBanks or the manner in which the FHLBanks carry out

their mission and business operations. New or modified legislation enacted by Congress or changes in the statutory or regulatory

requirements applied or imposed by the FHFA or other financial services regulators or through federal executive orders could result in,

among other things: an increase in our cost of funding and regulatory compliance; a change in membership or permissible business

activities; additional capital and liquidity requirements; additional contributions under Affordable Housing Programs or Community

Investment Cash Advance Programs; reduced demand for advances or limitations on advances made to our members (including

whether a member meets required tangible capital levels to access advances); or a change in the size, scope, or nature of our lending,

investment, or mortgage financing activities. Changes in the legislative and regulatory environment for the FHLBanks, their members

and housing finance generally may involve additional complexities and uncertainties, including those relating to regulatory priorities

and areas of focus, as a result of recent or future executive orders, policy pronouncements, and other directives or actions under the

current administration.

We note continuing developments in areas of focus and regulatory priorities of FHFA, other financial regulators, and the current

federal executive administration that may result in potential changes in the Bank’s regulatory environment, including without

limitation, as discussed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —

Legislative and Regulatory Developments . We cannot predict changes in legislative or regulatory requirements or guidance, or any

new legislation or regulations, or how they might impact the Bank’s business or operations. We also cannot predict the federal

executive administration’s or FHFA’s  actions on U.S. housing finance and government-sponsored enterprises, including actions taken

relating to large institutional investor purchases of single family homes, actions regarding the revision or end of conservatorships of

Fannie Mae and Freddie Mac or potential reforms or enhancements to their capital structure, the imposition of new requirements or

limitations on their existing authorities or changes in the nature of their government backed guarantees, or any corresponding impacts

to the FHLBank System, the secondary mortgage and mortgage-backed securities market, or the mortgage industry. Any such

changes, as well as any resulting increased scrutiny of the Bank and the FHLBank System and its mission and activities, however,

could materially affect the Bank’s business operations, results of operations and reputation, and the value of FHLBank membership.

Additionally, potential legislative and regulatory changes governing or affecting the Bank’s members, investors, and dealers of

consolidated obligations could adversely affect the business activities, financial condition, and results of operations of the Bank.

Changes in the perception, regulation, or status of the GSEs and the related effect on debt issuance could reduce demand for, or

increase the cost of, the FHLBNY’s debt and adversely affect the Bank’s financial condition and results of operations.

The FHLBanks are GSEs organized under the authority of the FHLBank Act and are authorized to issue debt securities to finance

housing and community investments. Negative announcements by any of the housing GSEs, concerning topics such as accounting

problems, risk-management issues, or regulatory enforcement actions, have historically created, and may in the future create pressure

on debt pricing for all GSEs, as investors perceive such instruments as bearing increased risk.

Any such negative information or other factors could result in the Bank having to pay a higher rate of interest on consolidated

obligations to make them attractive to investors, which could negatively affect our results of operations, and our access to funding.

Given our shared status as GSEs, the scope, timing, and effect of any regulatory reform affecting the GSEs, including the ultimate

resolution to the conservatorship of Fannie Mae and Freddie Mac and resulting changes in the regulation or status of the GSEs, could

have a significant effect on the FHLBank System. While there are significant differences between the FHLBank System and Fannie

Mae and Freddie Mac, including the FHLBanks’ focus on secured lending in the form of advances as opposed to guaranteeing

mortgages and their distinctive cooperative business model, legislation or other regulatory reform affecting the GSEs could

inadequately account for these differences, which could negatively change the perception of the risks associated with the GSEs and

their debt securities. This change in the perception of risk generally, or any actual or perceived competitive advantage to Fannie Mae

and Freddie Mac arising from the ultimate resolution to their conservatorship, could adversely affect the FHLBanks’ funding costs,

access to funding, competitive position, and the financial condition and results of operations of an FHLBank and the FHLBanks on a

combined basis.

A failure to meet minimum regulatory capital requirements could affect the FHLBNY’s ability to pay dividends or repurchase or

redeem members’ capital stock, which may cause a decrease in members’ demand for advances or difficulties in retaining existing

members and attracting new members .

The FHLBNY is subject to minimum capital requirements under the FHLBank Act and FHFA rules and regulations, including total

capital, leverage capital, and risk-based capital requirements. If we are unable to satisfy our minimum capital requirements, we would

be subject to capital restoration requirements. Until the minimum capital levels have been restored, we would also be prohibited from

paying dividends and redeeming or repurchasing capital stock without the prior approval of the FHFA, which could adversely affect

our members’ investment in our capital stock. Furthermore, to the extent that current and prospective members determine that our

dividend is insufficient or our ability to pay future dividends or repurchase excess capital stock becomes limited, we may be unable to

expand our membership and may experience decreased member demand for advances or increased member requests for withdrawals.

These factors may cause a decline in the value of our membership and make it difficult to retain existing members or to attract new

members.

Business Risks

Increased competition or reduced demand could adversely affect the FHLBNY’s financial condition, results of operations, and

primary business activity, which is to provide financial products and services to members and housing associates.

The FHLBNY’s primary business is to provide our members and housing associates with financial products and services, including

but not limited to, secured loans known as advances. We compete with other suppliers of wholesale funding, including, but not limited

to, investment banks, commercial banks, the Federal Reserve, and, in certain circumstances, other FHLBanks. Changes to legislation

or regulations affecting our members, or the availability of alternative funding sources to members, could significantly decrease the

demand for advances, tighten net interest margin, and negatively affect our financial condition and results of operations.

We may be required by new legislation or regulations or other factors to change policies, programs, and agreements affecting

members’ access to advances, mortgage purchase programs, affordable housing programs, and other credit programs that could cause

members to obtain financing from alternative sources. New or modified legislation or regulations could also create alternative funding

sources for our members. Some competitors may not be subject to the regulations that apply to us, which may enable those

competitors to offer products and terms that are more favorable than those we offer. Additionally, we compete with Fannie Mae and

Freddie Mac, as well as other FHLBanks, to purchase mortgage loans from members or affiliates of members. This competition may

reduce the amount of available mortgage loans that we can purchase.

We also compete with the U.S. Treasury, Fannie Mae, Freddie Mac, and other GSEs, as well as corporate, state, local, sovereign, sub-

sovereign, and supranational entities, for funds raised through the issuance of unsecured debt in the U.S. and global capital markets.

Increases in the supply of competing debt products, such as an increase in the supply of Treasury securities, or any actual or perceived

competitive advantage to Fannie Mae and Freddie Mac in the issuance of unsecured debt arising from the ultimate resolution to their

conservatorship, could negatively affect the demand for consolidated obligations and result in higher debt costs. Any of these factors

could adversely affect the financial condition and results of operations of the Bank, as well as the value of FHLBank membership.

A loss or change of business activities with large members, consolidation of membership, or regulatory changes in membership

rules could adversely affect the FHLBNY’s financial condition and results of operations.

Due to the nature of the FHLBNY’s charters, membership is generally limited to federally insured depository institutions, insurance

companies, and community development financial institutions in our district. Given this limitation in membership eligibility, a loss of

members or decreased business activities with large members due to withdrawal from membership, acquisition by a non-member, or

failure could result in a reduction of our total assets, capital, and net income. Additionally, regulatory changes in our membership

eligibility or requirements could affect the business activities, as well as our financial condition and results of operations.

We have a high concentration of advances and capital with large members. As the financial industry continues to consolidate into a

smaller number of institutions, this could lead to further concentration of large members in other districts and a related decrease in

membership and significant loss of business for us. If advances are concentrated in a smaller number of members, our risk of loss

resulting from a single event could become greater. Industry consolidation could also cause us to lose members whose business and

stock investments are substantial. Moreover, as nonbank financial institutions that are currently ineligible for our membership continue

to play an increasing role in mortgage origination, we could experience a decrease in demand for advances or a decrease in volume of

mortgage loans available for purchase from our members, which could negatively affect our financial condition and results of

operations.

Natural disasters, including those resulting from significant climate change, could adversely affect the members and business of

the FHLBNY.

Regions in which the FHLBNY operate are subject to natural disasters, including risks from hurricanes, tornadoes, floods, wildfires,

drought and other natural disasters. Climate change is increasing the frequency, intensity, and duration of these weather events. These

natural disasters, including those resulting from significant climate change, could destroy or damage our facilities or other properties,

such as collateral that members have pledged to secure advances or mortgages, disrupt the business of our members, increase the

probability of power or other outages, negatively affect the livelihood of borrowers of our members, or otherwise cause significant

economic dislocation in the affected regions. Any of these situations may adversely affect our financial condition and results of

operations.

Credit Risks

An increase in credit risk exposure from advances, mortgage loans, or other credit products or FHLBank member failures could

adversely affect the FHLBNY’s financial condition, results of operations, and reputation.

The FHLBNY is exposed to credit risk as part of our normal business operations through funding advances, purchasing mortgage

loans, and extending other credit products, such as lines of credit, standby letters of credit, and other commitments. We require

advances and other extensions of credit to be fully secured with collateral and require borrowers to pledge additional collateral when

deemed necessary. We evaluate the types of collateral pledged by the member and assign a borrowing capacity to the collateral, based

on the risk associated with that type of collateral. If borrowers are unable to pledge additional collateral to fully secure their

obligations with us, whether due to significant financial stress, market volatilities, or otherwise, it could cause the advance levels to

decrease or credit risk to increase. If we have insufficient collateral before or after an event of default or failure of the member or are

unable to liquidate the collateral, or transfer the collateral to an acquirer or receiver, for the value assigned to it in the event of a

default or failure of a member, we could experience a credit loss.

During economic downturns or periods of significant economic and financial disruptions and uncertainties, the number of members

exhibiting significant financial stress may increase, which may expose us to additional member credit risk. Changes in market

perception of the financial strength of a financial institution can occur very rapidly and can be difficult to predict, as reflected in the

failures of several FHLBank members in March and May 2023. There are continued challenges associated with the commercial real

estate sector due to weak leasing demand, lower occupancy rates and higher interest rates, and policy or legal actions in certain

jurisdictions which may lead to continued declines in the value of commercial real estate loan related collateral held by the Bank and

could contribute to additional financial stress of our members, in particular smaller regional and community banks with significant

exposure to commercial real estate and high reliance on uninsured deposits may be more severely impacted. If a member defaults on

its obligations or, in the case of a failed institution, the Federal Deposit Insurance Corporation (FDIC), or other receiver, fails to either

promptly repay all of that failed institution’s obligations or assume the outstanding advances, then we may be required to liquidate the

collateral pledged by the troubled or failed institution. If the proceeds realized from the liquidation of pledged collateral are not

sufficient to fully satisfy the amount of the troubled or failed institution’s obligations and the operational cost of liquidating the

collateral, we could incur losses. In addition, a default by a member with significant unsecured obligations could result in significant

losses. We could also experience losses if a receiver were to be successful in claiming that the Bank did not liquidate its collateral in

an orderly and commercially reasonable manner.

We are also exposed to credit risk from our mortgage loans held in portfolios. While our mortgage loan assets are collateralized by the

underlying real estate and are generally credit-enhanced to further mitigate credit risk, natural disasters or a deterioration in economic

conditions could result in decline in residential real estate values or increase in unemployment rate. These factors could lead to an

escalation of borrower defaults and cause us to incur credit losses on our mortgage loans.

Defaults by one or more institutional counterparties on their obligations to the FHLBNY could adversely affect our financial

condition and results of operations.

The FHLBNY faces the risk that our institutional counterparties may fail to fulfill their contractual obligations. The primary exposures

to institutional counterparty credit risk are with:

• Unsecured money market transactions, including federal funds sold, or short-term investments with domestic and foreign

counterparties;

• Derivative counterparties, including Derivative Clearing Organizations and Futures Commission Merchants;

• Mortgage servicers that service loans purchased under the MAP and MPF Program.

A counterparty default could result in losses if our credit exposure to that counterparty was unsecured or under-collateralized, or if a

credit obligation associated with derivative positions were overcollateralized. The insolvency or other inability of a significant

counterparty to perform its obligations under these transactions or other agreements could have an adverse effect on our financial

condition and results of operations.

We have both direct and indirect exposure to foreign credit risk through our various counterparties. Adverse economic, political, or

other trends that may occur within, across, or among various regions or countries could have direct adverse effects on our institutional

counterparties and on the U.S. economy. In turn, we could also experience adverse effects on our ability to meet our obligations given

our relationship with these counterparties. In addition, our ability to engage in routine derivatives, funding, and other transactions

could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are

inter-related as a result of trading, clearing, counterparty, and other relationships. As a result, actual and potential defaults of one or

more financial services institutions could lead to market-wide disruptions, making it difficult for us to source eligible counterparties

for transactions.

Financial difficulties at one FHLBank could require the other FHLBanks to make payment of principal and interest on the

consolidated obligations issued on that FHLBank’s behalf, which could adversely affect the FHLBNY’s financial condition and

results of operations.

Under the FHLBank Act and FHFA regulations, each FHLBank is jointly and severally liable with the other FHLBanks for the

consolidated obligations issued by the FHLBanks through the Office of Finance. As such, while each FHLBank is primarily liable for

its portion of consolidated obligations (i.e., those issued on its behalf), each FHLBank is also jointly and severally liable with the other

FHLBanks for the payment of principal and interest on all consolidated obligations issued by the FHLBanks. Although it has never

occurred, the FHFA, at its discretion, may require any FHLBank to make principal or interest payments due on any consolidated

obligation whether or not the consolidated obligation represents a primary liability of that FHLBank. Additionally, if a FHLBank were

to default on its obligation to pay principal or interest on any consolidated obligations, the FHFA may allocate the outstanding

liabilities of that FHLBank among the remaining FHLBanks on a pro rata basis or on any other basis determined by the FHFA.

Accordingly, we could incur significant liability beyond our primary obligations due to the failure of a FHLBank to meet its

obligations. This could adversely affect our financial condition and results of operations.

Liquidity Risks

Disruptions in the short-term capital markets or changes to the regulatory environment could have an adverse effect on the

FHLBNY’s ability to refinance our consolidated obligations or to manage our liquidity positions to meet members’ needs on

acceptable terms.

Our ability to operate our business, meet our obligations, and generate net interest income depends primarily on our ability to issue

debt continuously to meet member demand and to refinance existing outstanding debt at attractive rates, maturities, and call features

when needed. Our source of funds is the sale of consolidated obligations in the capital markets through the Office of Finance. Our

ability to obtain funds through the sale of consolidated obligations generally depends on prevailing conditions in the capital markets,

and, in particular, our ability to access the short-term capital markets due to our preference for short-term funding.

Access to short-term debt markets has been supported by continued demand as investors, driven by increased liquidity preferences and

risk aversion, have sought our short-term debt as an asset of choice. This has led to advantageous funding opportunities and significant

utilization of debt maturing in one year or less. There are inherent risks in utilizing short-term funding to support longer-dated assets

and we may be exposed to refinancing risk. Refinancing risk includes the risk that we could have difficulty rolling over short-term

obligations when market conditions change or investor demand for short-term consolidated obligations declines. In managing and

monitoring the amounts of financial assets that require refinancing, we consider our contractual maturities, as well as certain

assumptions regarding expected cash flows (i.e., estimated prepayments, embedded call optionality, and scheduled amortizations),

taking into account our liquidity position.

The Bank is also exposed to liquidity risk if there is any significant disruption in the short-term debt markets. Without access to the

short-term debt markets on acceptable terms, the alternative longer-term funding, if available, would increase funding costs and

interest-rate risk exposure and could cause us to increase advance rates, potentially affecting demand for advances. If this disruption is

prolonged, we may not be able to obtain funding on acceptable terms and this could adversely affect our ability to support and

continue our operations. As a result, our inability to manage our liquidity position or our contingency liquidity plan to meet our

obligations, as well as the credit and liquidity needs of our members, could adversely affect our financial condition and results of

operations as well as the value of our membership.

Additionally, changes to the regulatory environment that affect FHLBanks’ investors and dealers of consolidated obligations,

particularly changes related to capital and liquidity requirements and money market fund reforms, have affected, and will continue to

affect, the FHLBanks’ ability to access the capital markets on acceptable terms. For example, the SEC’s implementation of money

market fund reforms over the years resulted in a significant increase in demand for U.S. government and agency debt, including the

FHLBanks’ short-term consolidated obligations. The holding of the FHLBanks’ consolidated obligations by money market funds, as a

percentage of the total outstanding consolidated obligations, generally increased as a result of these reforms as compared to the periods

before their implementation. While demand from this investor class benefited the FHLBanks’ ability to access short-term funding at

attractive costs, this demand could change if money market investor risk and return preferences and money market regulatory

requirements shift over time. A decrease in this demand could, due to the FHLBanks’ concentration of money market investors, lead

to significant investor outflows and unfavorable market conditions. Policymakers and regulators in the U.S. have been examining

potential policy measures intended to improve the resilience of money market funds and broader short-term funding markets in recent

years, including the SEC’s adoption of money market fund reforms in July 2023, designed to improve the resilience and transparency

of, designed to improve the resilience and transparency of money market funds. As such, changes in regulatory requirements

governing money market funds, including any reversal of prior money market fund reforms, could have a negative effect on

FHLBanks’ short term funding costs and adversely affect the financial condition and results of operations of the FHLBNY.

Operational Risks

Failure, breach, or cyberattack of the information systems of the FHLBNY could disrupt the FHLBNY’s business or result in

significant losses or reputational damage.

The FHLBNY relies heavily on our information systems and technology to conduct and manage our business. A failure, breach, or

cyberattack of these systems or technologies could disrupt and prevent us from conducting and managing our business effectively.

Moreover, such failure or breach could result in significant losses, including a loss of data, intellectual property, or confidential

information, reputational damage, or other harm.

Like many financial institutions, the Bank has seen an increase in cyberattack attempts. These attempts have predominantly occurred

through phishing and social engineering scams. The Bank’s operations rely on the availability and functioning of its main office and

off-site backup facilities. Cyberattacks, in particular those on financial institutions and financial market infrastructures, have also

become more frequent, sophisticated, and increasingly difficult to detect or prevent, including as a result of the increased capabilities

of artificial intelligence and other emerging technologies that may be used maliciously. The threat of cyberattacks may also increase as

a result of geopolitical conflicts. The Bank devotes substantial resources and deploys detective and preventative measures to secure the

Bank’s systems, including firewalls, email security, and end-point solutions. These measures and other business continuity measures

may be ineffective or insufficient for all eventualities. A failure or interruption in our business continuity, disaster recovery or certain

information systems, or a cybersecurity event could significantly harm the Bank’s reputation, its customer relations, risk management

and profitability, and could result in financial losses, legal and regulatory sanctions, increased costs, or other harm. As cyber threats

continue to evolve, the Bank may be required to expend significant additional resources to continue to modify or enhance its layers of

defense to investigate and remediate any information security vulnerabilities, or to comply with regulatory requirements.

A failure of the FHLBNY’s business and financial models to produce reliable results could adversely affect the Bank’s business,

financial condition, results of operations, and risk management.

The FHLBNY makes significant use of business and financial models for managing, measuring, and monitoring different risks,

including interest rate, prepayment, and other market risks, as well as credit risk. We also use models in determining the fair value of

financial instruments when independent price quotations are not available or reliable. The information provided by these models is

also used in making business decisions relating to strategies, initiatives, risk management, transactions and products, and for financial

reporting. Models use assumptions to project future trends and performance, including assumptions that historical data or experience

can be relied upon as a basis for forecasting future events, and are inherently imperfect predictors of actual results.

Changes in business or financial models or in our underlying assumptions, judgments, or estimates may cause the results generated by

the models to be materially different. If the models are not reliable, we could make deficient business decisions, including poor asset

and liability management decisions, which could result in an adverse financial effect on our business. Furthermore, strategies that we

employ to manage the risks associated with the use of models may not be effective. The models used by us to determine the fair values

of our assets and liabilities, including derivatives, may differ from the models used by the others. The use of different models or

assumptions, as well as changes in market conditions, could result in materially different valuation estimates or other estimates even

when similar or identical assets and liabilities are being measured, and could have materially different effects on our net income and

retained earnings.

Failures of critical vendors and other third parties could disrupt the FHLBNY’s ability to conduct and manage our business.

The FHLBNY relies on vendors and other third parties, including cloud-based providers to perform certain critical services. The Bank

owns some of these systems and technology, and third parties own and provide to the Bank, either directly or through fourth-party

vendors, some of these systems and technology. A failure or interruption of one or more of those services, including as a result of

breaches, cyberattacks, system malfunctions or failures, or other technological risks, could negatively affect our business operations.

If one or more of these key external parties were not able to perform their functions for a period of time, at an acceptable service level,

or for increased volumes, we could be constrained, disrupted, or otherwise negatively affected.

The Bank further notes that it continues to monitor and assess the potential benefits and challenges associated with the use of artificial

intelligence by the Bank, its vendors, and other third‑party actors.

Failures at the Office of Finance could disrupt the FHLBNY’s ability to conduct and manage their businesses.

The Office of Finance is a joint office of the FHLBanks established to facilitate, among other things, the issuance and servicing of

consolidated obligations. Pursuant to FHFA regulations, the Office of Finance, in conjunction with the FHLBanks, has adopted

policies and procedures for the purposes of facilitating and approving the issuance and servicing of consolidated obligations. The

Office of Finance relies heavily on its information systems and technology for its operations. A failure or interruption of the Office of

Finance’s services, including as a result of breaches, cyberattacks, natural disasters, system malfunctions, disruptions or failures, or

other technological risks, could negatively affect the business operations of the FHLBNY, including disruptions to our access to

funding through the sale of consolidated obligations. Although the Office of Finance has business continuity and security incident

response plans in place, our funding and business operations could be constrained, disrupted, or otherwise negatively affected if the

Office of Finance were not able to perform its functions for any period. Additionally, operational failures at the Office of Finance

could also expose the Bank to the risk of a loss of data or confidential information or other harm, including reputational damage.

The inability to attract and retain skilled key personnel could adversely affect the business and operations of the FHLBNY.

The FHLBNY relies on all its employees to manage our business and conduct our operations. Competition for employees from within

the financial services industry and from businesses outside the financial services industry, including the technology industry, continues

to be a recruiting and retention challenge for certain positions. FHFA executive compensation regulation and guidance influences the

Bank's compensation structures and practices. Another recruitment and retention challenge is the limited number of career paths

available due to the relatively low number of employee headcount and our flat organizational structure.

For succession planning purposes, the FHLBNY has designated certain limited positions as “Key Positions” – positions which, in the

judgment of senior management and the Board of Directors, have critical operational or strategic responsibilities. The FHLBNY’s

Succession Plan is intended to help identify potential temporary replacements for employees who occupy Key Positions in the event of

an unplanned vacancy. The Plan is also intended to help identify potential permanent replacements for those employees who occupy

Key Positions and provide the Bank with long-term advance notice of their expected retirement. The failure to maintain an effective

Succession Plan could adversely affect our business and operations.

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Statements contained in this Annual Report on Form 10-K, including statements describing the objectives, projections, estimates, or

predictions of the Federal Home Loan Bank of New York (“we” “us,” “our,” “the Bank” or the “FHLBNY”) may be “forward-

looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of

1934. These statements may use forward-looking terminology, such as “anticipates,” “believes,” “could,” “estimates,” “may,”

“should,” “will,” or other variations on these terms or their negatives. The Bank cautions that, by their nature, forward-looking

statements are subject to a number of risks or uncertainties, including the Risk Factors set forth in Part 1, Item 1A and the risks set

forth below, and that actual results could differ materially from those expressed or implied in these forward-looking statements. As a

result, you are cautioned not to place undue reliance on such statements. These forward-looking statements speak only as of the date

they were made, and the Bank does not undertake to update any forward-looking statement herein. Forward-looking statements

include, among others, the following:

• the Bank’s projections regarding income, retained earnings, dividend payouts, and the repurchase of excess capital stock;

• the Bank’s statements related to gains and losses on derivatives, future credit and impairment charges, and future

classification of securities;

• the Bank’s expectations relating to future balance sheet growth;

• the Bank’s targets under the Bank’s retained earnings plan;

• the Bank’s expectations regarding the size of its mortgage loan portfolio, particularly as compared to prior periods;

• the Bank’s statements related to reform legislation or executive actions, including, without limitation, housing or

government-sponsored enterprise legislation or executive orders; and

• executive, legislative, regulatory, and judicial events and actions or other developments that affect the Bank, its members,

counterparties, or investors in the consolidated obligations of the Federal Home Loan Banks (FHLBanks), such as any

government-sponsored enterprise (GSE) reforms, any changes resulting from the Finance Agency’s review and analysis of

the FHLBank System, including recommendations published in its “FHLBank System at 100: Focusing on the Future”

report, changes in the Federal Home Loan Bank Act of 1932, as amended (FHLBank Act), changes in applicable sections of

the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, or changes in other statutes or regulations

applicable to the FHLBanks;

Actual results may differ from forward-looking statements for many reasons, including, but not limited to, the risk factors set forth in

Part I, Item 1A - Risk Factors and the risks set forth below:

• changes in economic and market conditions, including the evolving risks relating to the March 2023 U.S. banking sector

liquidity crisis;

• changes in demand for Bank advances and other products resulting from changes in members’ and FDIC deposit flows and

members’ credit demands or otherwise;

• an increase in advance prepayments as a result of changes in interest rates (including negative interest rates) or other

factors;

• the volatility of market prices, rates, and indices that could affect the value of collateral held by the Bank as security for

obligations of Bank members and counterparties to interest rate exchange agreements and similar agreements;

• political events, including legislative developments and executive orders that affect the Bank, its members, counterparties,

and/or investors in the Consolidated obligations (COs) of the FHLBanks;

• competitive forces including, without limitation, other sources of funding available to Bank members, other entities

borrowing funds in the capital markets, and the ability to attract and retain skilled employees;

• the pace of technological change and the ability of the Bank to develop and support technology and information systems,

including cybersecurity, sufficient to manage the risks of the Bank’s business effectively;

• changes in investor demand for COs and/or the terms of interest rate exchange agreements and similar agreements;

• timing and volume of market activity;

• ability to introduce new or adequately adapt current Bank products and services and successfully manage the risks

associated with those products and services, including new types of collateral used to secure advances;

• risk of loss arising from litigation filed against one or more of the FHLBanks;

• realization of losses arising from the Bank’s joint and several liability on COs;

• risk of loss due to fluctuations in the housing market;

• inflation or deflation;

• issues and events within the FHLBank System and in the political arena that may lead to legislative, regulatory, judicial, or

other developments or executive orders that may affect the marketability of the COs, the Bank’s financial obligations with

respect to COs, and the Bank’s ability to access the capital markets;

• the availability of derivative financial instruments of the types and in the quantities needed for risk management purposes

from acceptable counterparties;

• significant business disruptions resulting from natural or other disasters (including, but not limited to, health emergencies

such as pandemics or epidemics), acts of war (including, but not limited to, the war between Ukraine and Russia or the

conflicts in the Middle East), cyberattacks or terrorism;

• the effect of new accounting standards, including the development of supporting systems;

• membership changes, including changes resulting from mergers or changes in the principal place of business of Bank

members;

• the soundness of other financial institutions, including Bank members, nonmember borrowers, other counterparties, and the

other FHLBanks; and

• the willingness of the Bank’s members to do business with the Bank whether or not the Bank is paying dividends or

repurchasing excess capital stock.

Risks and other factors could cause actual results of the Bank to differ materially from those implied by any forward-looking

statements. These risk factors are not exhaustive. The Bank operates in changing economic, legislative and regulatory environments,

and new risk factors will emerge from time to time. Management cannot predict such new risk factors nor can it assess the impact, if

any, of such new risk factors on the business of the Bank or the extent to which any factor, or combination of factors, may cause actual

results to differ materially from those implied by any forward-looking statements.

Organization of Management’s Discussion and Analysis (MD&A).

This MD&A is designed to provide information that will assist the readers in better understanding the FHLBNY’s financial

statements, the changes in key items in the Bank’s financial statements from period to period and the primary factors driving those

changes as well as how accounting principles affect the FHLBNY’s financial statements. The MD&A is organized as follows:

Page

Executive Overview

Trends in the Financial Markets

Recently Issued Accounting Standards and Interpretations and Critical Accounting Policies and Estimates

Legislative and Regulatory Developments

Financial Condition

Advances

Investments

Mortgage Loans Held-for-Portfolio, Net

Debt Financing Activity and Consolidated Obligations

Recent Rating Actions

Stockholders’ Capital

Derivative Instruments and Hedging Activities

Liquidity, Cash Flows, Short-Term Borrowings and Short-Term Debt

Results of Operations

Net Income

Net Interest Income, Interest Rate Margin and Interest Rate Spread

Interest Income

Interest Expense

Analysis of Non-Interest Income (Loss)

Operating Expenses, Compensation and Benefits, and Other Expenses

Assessments

Voluntary Contributions

MD&A TABLE & FIGURE REFERENCE

Table(s) & Figure(s)

Description

Page(s)

Selected Financial Data

Market Interest Rates

Financial Condition

Advances

Investments

Mortgage Loans Held-for-Portfolio

Consolidated Obligations

FHLBNY Ratings

Capital

Derivatives Instruments and Hedging Activities

Liquidity

FHFA MBS Limits and Core Mission Achievement

Results of Operations

Assessments

Voluntary Contributions

Executive Overview

This overview of management’s discussion and analysis highlights selected information and may not contain all of the information

that is important to readers of this Form 10-K. For a more complete understanding of events, trends and uncertainties, as well as the

liquidity, capital, credit and market risks, and critical accounting estimates, affecting the Federal Home Loan Bank of New York

(FHLBNY or Bank), this Form 10-K should be read in its entirety.

Cooperative business model . As a cooperative, we seek to maintain a balance between our public policy mission and our ability to

provide adequate returns on the capital supplied by our members. We achieve this balance by delivering low-cost financing to

members to help them meet the credit needs of their communities and by paying a dividend on members’ capital stock. Our financial

strategies are designed to enable us to expand and contract in response to member credit needs. By investing capital in high-quality,

short- and medium-term financial instruments, we maintain sufficient liquidity to satisfy member demand for short- and long-term

funds, repay maturing Consolidated obligations (CO bonds and CO discount notes), and meet other obligations. The dividends we pay

are largely the result of earnings on invested member capital, net earnings on advances to members, mortgage loans and investments,

offset in part by operating expenses and assessments. Our Board of Directors and Management determine the pricing of member credit

and dividend policies based on the needs of our members and the cooperative as well as current and forecasted conditions in the

marketplace.

Business segment. We manage our operations as a single business segment. Advances to members are our primary focus and the

principal factor that impacts our operating results.

Mission Fulfillment . Throughout 2025, the Bank’s continued focus on executing on our foundational liquidity mission in a safe and

sound manner and serving the needs of our members and community partners drove our strong performance, annual income and

record contributions to our housing and economic development programs and products.

2025 Financial Results

Net income — Net income for 2025 was $599.8 million , a decrease of $138.7 million , or 18.8% , from net income of $738.5 million

for 2024 . Our net income is primarily driven by net interest income, which is the spread between yields earned on advances, mortgage-

backed securities, and other investments and the cost of debt.

Net Interest Income — Net interest income for 2025 was $851.8 million , a decrease of $135.0 million , or 13.7% , from $986.8

million in 2024 . Earnings were lower versus the prior year due to lower market interest rates that reduced earnings from capital and

smaller earning asset balances. Yield on assets decreased to 4.49% for 2025 from 5.34% in 2024 while the funding cost decreased to

4.18% for 2025 from 5.04% in 2024 . Net interest spread increased to 31 basis points in 2025 compared to 30 basis points in 2024 .

Average earning assets balances decreased by $6.7 billion to $160.2 billion in 2025 compared with $166.9 billion in 2024 . Average

advances balances decreased by $8.9 billion to $100.5 billion in 2025 , down from $109.4 billion in 2024 .

Return on average equity (ROE) for 2025 was 7.25% , compared to ROE of 8.49% for 2024 .

Other income (loss) — Other income (loss) decreased by $9.5 million , or 8.51% , to $103.1 million in 2025 compared with the prior

year, mainly driven by a decrease in net unrealized fair value gains on derivatives and hedged items, including trading securities held

for liquidity purposes.

Other expenses were $288.3 million in 2025 compared to $279.0 million in 2024 . Other expenses are primarily operating expenses,

compensation and benefits, voluntary contributions for the Bank’s housing and community development support activities, and our

share of expenses of the Office of Finance and the Federal Housing Finance Agency. Other expenses have increased by $9.2 million ,

driven by an increase in compensation and benefits.

Affordable Housing Program Assessments (AHP) allocated from net income were $66.7 million in 2025 compared to $82.1 million

in 2024 . Assessments are calculated as a percentage of net income, and changes in allocations were proportional with changes in net

income.

Dividend payments — Four quarterly cash dividends were paid in 2025 for a total of $7.99 per share of capital, compared to total of

$9.50 per share of capital in 2024 .

Financial Condition — December 31, 2025 compared to December 31, 2024

Our financial condition is characterized by a solid balance sheet and ample liquidity readily available for our member institutions.

Total assets decreased to $156.5 billion at December 31, 2025 , from $160.3 billion at December 31, 2024 , a decrease of $3.8 billion ,

or 2.4% . As of December 31, 2025 , advances were $92.3 billion , a decrease of $13.5 billion , or 12.8% , from $105.8 billion at

December 31, 2024 .

Cash at banks was $38.2 million at December 31, 2025 , compared to $26.1 million at December 31, 2024 .

Liquidity investments — Money market investments increased $7.4 billion at December 31, 2025 to $30.5 billion , as compared to

$23.1 billion at December 31, 2024 . We continue to ensure an ample supply of funds to meet liquidity demands. Interest-bearing

deposits at highly rated financial institutions increased $0.2 billion to $3.0 billion as well as a $5.1 billion increase in overnight resale

agreements to $16.0 billion and a $2.1 billion increase in Federal funds to $11.5 billion .

For liquidity, we maintain a portfolio of U.S. Treasury securities designated as trading to meet short-term contingency liquidity needs.

Balances were $7.4 billion and $7.2 billion at December 31, 2025 and December 31, 2024 , respectively.

Our liquidity position remains strong, and in compliance with all regulatory requirements, and we do not foresee any changes to that

position. In addition to the liquidity trading portfolio and assets discussed above, liquid assets included $10.1 billion at December 31,

2025 and $8.7 billion at December 31, 2024 of high credit quality GSE-issued available-for-sale (AFS) securities that are investment

grade and readily marketable.

For more information about our liquidity measures, see section Liquidity, Cash Flows, Short-Term Borrowings and Short-Term Debt,

and Table 9.1 through Table 9.5 in this MD&A.

Advances — Par balances decreased at December 31, 2025 to $92.5 billion , compared to $106.5 billion at December 31, 2024 . Given

that advances are always well collateralized, a provision for credit losses was not necessary. We have no history of credit losses on

advances.

Long-term investment debt securities — Long-term investment debt securities are designated as AFS or held-to-maturity (HTM). Our

investment profile consists almost exclusively of GSE and Agency-issued (GSE-issued) securities.

In the AFS portfolio, GSE-issued mortgage-backed securities were carried on the balance sheet at fair value of $10.1 billion and $8.6

billion at December 31, 2025 and December 31, 2024 , respectively. Our portfolio consists primarily of long term fixed-rate long-term

investments.

In the AFS portfolio, State and local housing finance agency obligations, primarily New York and New Jersey, were carried at $1.7

billion at December 31, 2025 and $1.3 billion at December 31, 2024 .

In the HTM portfolio, long-term investments of predominantly GSE-issued fixed- and floating-rate mortgage-backed securities were

$10.3 billion and $10.7 billion at December 31, 2025 and December 31, 2024 , respectively. No allowance for credit losses were

deemed necessary for GSE-issued investments.

In the HTM portfolio, State and local housing finance agency obligations were $0.2 billion at December 31, 2025 and December 31,

2024 . Allowance for credit losses on State and local housing finance agency obligations in the HTM portfolio was $0.1 million at

December 31, 2025 , slightly lower than the balance at December 31, 2024 .

Equity Investments — We own grantor trusts that invest in highly-liquid registered mutual funds. Funds are classified as Equity

Investments and were carried on the balance sheet at fair values of $103.7 million at December 31, 2025 and $95.4 million at

December 31, 2024 .

Mortgage loans held-for-portfolio — Mortgage loans are investments in MPF loans and MAP loans. As of March 31, 2021, the MAP

mortgage loan program became our only active mortgage loan purchase program as we ceased to acquire mortgage loans through

MPF.

Unpaid principal balance of MPF loans stood at $1.4 billion at December 31, 2025 , a decrease of $137.0 million from the balance at

December 31, 2024 . Unpaid principal balance of MAP loans stood at $1.2 billion at December 31, 2025 compared to $745.5 million at

December 31, 2024 .

Historically, credit performance has been strong in the MPF and MAP portfolio and delinquencies have been low.

Capital ratios — Our capital position remains strong. Actual risk-based capital was $8.0 billion at December 31, 2025 compared to

$8.5 billion at December 31, 2024 . Required risk-based capital was $1.1 billion at December 31, 2025 compared to $1.0 billion at

December 31, 2024 . To support $156.5 billion of total assets at December 31, 2025 , the minimum required total capital was $6.3

billion , or 4.0% of assets. Our actual regulatory risk-based capital was $8.0 billion , exceeding required total capital by $1.8 billion .

These ratios have remained consistently above the required regulatory ratios through all periods in this report.

Leverage — At December 31, 2025 balance sheet leverage (based on U.S. GAAP) was 19.5 times shareholders’ equity compared to

19.1 times at December 31, 2024 . Balance sheet leverage has generally remained steady over the last several years, although from time

to time we have maintained excess liquidity in highly liquid investments, or cash balances at the Federal Reserve Bank of New York

(FRBNY) to meet unexpected member demand for funds.

Selected Financial Data .

Statements of Condition

Years ended December 31,

(dollars in millions)

Investments (a)

Advances

Mortgage loans held-for-portfolio, net (b)

Total assets

Deposits and borrowings

Consolidated obligations, net

Bonds

Discount notes

Total consolidated obligations

Mandatorily redeemable capital stock

AHP liability

Capital

Capital stock

Retained earnings

Unrestricted

Restricted

Total retained earnings

Accumulated other comprehensive income (loss)

Total capital

Equity to asset ratio (c)(j)

Statements of Condition

Years ended December 31,

Averages (See note below; dollars in millions)

Investments (a)

Advances

Mortgage loans held-for-portfolio, net

Total assets

Interest-bearing deposits and other borrowings

Consolidated obligations, net

Bonds

Discount notes

Total consolidated obligations

Mandatorily redeemable capital stock

AHP liability

Capital

Capital stock

Retained earnings

Unrestricted

Restricted

Total retained earnings

Accumulated other comprehensive income (loss)

Total capital

Note — Average balance calculation. For most components of the average balances, a daily weighted average balance is calculated

for the period. When daily weighted average balance information is not available, a simple monthly average balance is calculated.

Operating Results and Other Data

Years ended December 31,

(dollars in millions, except earnings and dividends per share, and headcount)

Net income

Net interest income (d)

Dividends paid in cash (e)

AHP expense

Return on average equity (f)(g)(j)

Return on average assets (g)(j)

Other non-interest income (loss)

Operating expenses (h)

Voluntary Contributions

Other expenses (k)

Total Operating and Other expenses

Operating expenses ratio (g)(i)(j)

Earnings per share

Dividends per share

Headcount (Full/part time) (l)

(a) Investments include trading securities, available-for-sale securities, held-to-maturity securities, grantor trusts owned by the

FHLBNY, securities purchased under agreements to resell, federal funds, loans to other FHLBanks, and other interest-bearing

deposits.

(b) Allowances for credit losses were $3.7 million , $3.1 million , $3.3 million , $1.9 million , and $2.1 million for the years ended

December 31, 2025 , 2024 , 2023 , 2022 and 2021 , respectively.

(c) Equity to asset ratio is Capital stock plus Retained earnings and Accumulated other comprehensive income (loss) as a percentage

of Total assets.

(d) Net interest income is before the provision for credit losses on mortgage loans.

(e) Excludes dividends accrued to non-members classified as interest expense under the accounting standards for certain financial

instruments with characteristics of both liabilities and equity.

(f) Return on average equity is net income as a percentage of average Capital Stock plus average retained earnings and average

Accumulated other comprehensive income (loss).

(g) Annualized.

(h) Operating expenses include Compensation and Benefits.

(i) Operating expenses as a percentage of Total average assets.

(j) All percentage calculations are performed using amounts in thousands and may not agree if calculations are performed using

amounts in millions.

(k) Other expenses include Finance Agency and Office of Finance expenses.

(l) The Bank increased headcount in 2024 to enhance its infrastructure including credit underwriting, risk management and

technology.

Trends on the Financial Markets

Conditions in Financial Markets . The primary external factors that affect net interest income are market interest rates and the general

state of the economy. The following table presents changes in key rates over the course of 2025 and 2024 (rates in percent):

Table 1.1        Market Interest Rates

December 31,

Average

Average

Ending Rate

Ending Rate

Federal Funds Target Rate

Federal Funds Effective Rate (a)

SOFR (a)

2-Year U.S. Treasury

5-Year U.S. Treasury

10-Year U.S. Treasury

15-Year Residential Mortgage Note Rate

30-Year Residential Mortgage Note Rate

(a) Source: Board of Governors Federal Reserve System; all other sources are Bloomberg L.P.

During the year, the market rates continued to rise slightly as the Federal Reserve continued to combat inflation.

Impact of general level of interest rates on the FHLBNY. The level of interest rates impacts our profitability, due primarily to the

relatively shorter-term structure of earning assets and the impact of interest rates on invested capital. We invest in Federal funds sold

and repurchase agreements that typically are overnight investments. We also use derivatives to effectively change the repricing

characteristics of a significant proportion of our advances and Consolidated obligation debt to match shorter-term benchmark interest

rates or overnight indices (SOFR and Federal funds effective rate) that reprice at intervals of three month or as frequently as daily.

Consequently, the current level of short-term interest rates, as represented by the overnight Federal funds target rate and the overnight

SOFR, has an impact on profitability.

The level of interest rates also directly affects our earnings on invested capital. Compared to other banking institutions, we operate at

comparatively low net spreads between the yield we earn on assets and the cost of our liabilities. Therefore, we generate a relatively

higher proportion of our income from the investment of member-supplied capital at the average asset yield. As a result, changes in

asset yields tend to have a greater effect on our profitability than they do on the profitability of other banking institutions.

In summary, our average asset yields and the returns on capital invested in these assets largely reflect the short-term interest rate

environment because the maturities of our assets are generally short-term in nature, have rate resets that reference short-term rates, or

have been hedged with derivatives in which a short-term or overnight rate is received. Changes in rates paid on Consolidated

obligations and the spread of these rates relative to SOFR and the Federal funds rate or to U.S. Treasury securities may also impact

profitability. The rates and prices at which we are able to issue Consolidated obligations, and their relationship to other products such

as Treasury securities, change frequently and are affected by a multitude of factors including: overall economic conditions, including

inflation; volatility of market prices, rates, and indices; the level of market interest rates and shape of yield curves; supply from other

issuers (including other GSEs, supra/sovereigns, and other highly-rated borrowers); yields and asset prices of other securities in the

market; investor preferences; the total volume, timing, and characteristics of issuance by the FHLBanks; the amount and type of

advance demand from our members; policy decisions, including legislation, monetary policy changes by the Federal Reserve, and

actions of financial regulators; and potentially adverse press about the FHLBank System.

Recently Issued Accounting Standards and Interpretations and Critical Accounting Policies and Estimates

For a discussion of recently issued accounting standards and interpretations, see financial statements, Note 2 . Financial Accounting

Standards Board (FASB) Standards Issued.

Critical Accounting Policies and Estimates

We have identified certain accounting policies that we believe are critical because they require management to make subjective

judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be

reported under different conditions or by using different assumptions. These policies include estimating fair values of certain assets

and liabilities, and accounting for derivatives and hedging activities. We have discussed each of these critical accounting policies, the

related estimates, and its judgment with the Audit Committee of the Board of Directors. Refer to Note 1 . Summary of Significant

Accounting Policies in this Form 10-K.

Fair Value Measurements

The accounting standards on fair value measurements discuss how entities should measure fair value based on whether the inputs to

those valuation techniques are observable or unobservable. Fair value is defined as the price that would be received to sell an asset or

paid to transfer a liability in an orderly transaction in the principal or most advantageous market for the asset or liability between

market participants at the measurement date. This definition is based on an exit price rather than transaction or entry price.

The FHLBNY complied with the accounting guidance on fair value measurements and has established a hierarchy for inputs used in

measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the

most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or

liability and would be based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our

assumptions about the parameters market participants would use in pricing the asset or liability and would be based on the best

information available in the circumstances. Our pricing models are subject to periodic validations, and we periodically review and

refine, as appropriate, our assumptions and valuation methodologies to reflect market indications as closely as possible. We have the

appropriate personnel, technology, and policies and procedures in place to value financial instruments in a reasonable and consistent

manner and in accordance with established accounting policies.

Valuation of Financial Instruments  — The following assets and liabilities, including those for which the FHLBNY has elected the

fair value option, were carried at fair value on the Statements of Condition as of December 31, 2025 :

• Fair values of derivative instruments — Derivatives are valued using internal valuation techniques as no quoted market prices

exist for such instruments, and we employ industry standard option adjusted valuation models that generate fair values of

interest rate derivatives. We have classified derivatives as Level 2.

• Fair values of instruments elected under the Fair Value Option — When the FHLBNY elects the FVO, the election is made

on an instrument-by-instrument basis on Consolidated obligation debt and advances, which are fair valued using the Bank’s

industry standard option adjusted models. We have classified instruments elected under the FVO as Level 2.

• Fair values of available-for-sale mortgage-backed securities — We request prices for all mortgage-backed securities from

third-party vendors. Typically, fair values are classified as Level 2.

• Fair values of available-for-sale Housing finance agency bonds — We request pricing information from pricing services.

Due to the current lack of significant market activity, their fair values are classified as Level 3.

• Trading Securities — The FHLBNY classifies trading securities as Level 1 of the fair value hierarchy when we use quoted

market prices in active markets to determine the fair value of trading securities, such as U.S. Government and GSE securities.

We classify trading securities as Level 2 of the fair value hierarchy when we use quoted market prices in less active markets

to determine the fair value of trading securities.

• Equity Investments — The FHLBNY has grantor trusts to support the Bank’s retirement plans, which invests in money

market, equity and fixed income and bond funds. Daily net asset values (NAVs) are readily available, and investments are

redeemable at short notice. Because of the highly liquid nature of the investments at their NAVs, they are categorized as

Level 1 financial instruments under the valuation hierarchy.

Derivatives and Hedging Activities

Generally, we enter into derivatives primarily to manage our exposure to changes in interest rates. Through the use of derivatives, we

may adjust the effective maturity, repricing frequency, or option characteristics of financial instruments to achieve our risk

management objectives. The accounting guidance related to derivatives and hedging activities is complex and contains prescriptive

documentation requirements. At the inception of each hedge transaction, we formally document the hedge relationship, its risk

management objective, and strategy for undertaking the hedge.

In compliance with accounting standards, primarily ASC 815, the accounting for derivatives requires us to make the following

assumptions and estimates:  (i) assessing whether the hedging relationship qualifies for hedge accounting, (ii) assessing whether an

embedded derivative should be bifurcated, (iii) calculating the effectiveness of the hedging relationship, (iv) evaluating exposure

associated with counterparty credit risk, and (v) estimating the fair value of the derivatives. Our assumptions and judgments include

subjective estimates based on information available as of the date of the financial statements and could be materially different based

on different assumptions, calculations, and estimates.

We record and report our hedging activities in accordance with ASC 815. All derivatives are recorded on the statements of condition

at their fair values. Changes in the fair value of all derivatives, excluding those designated as cash flow hedges, are recorded in current

period earnings, while changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in other

comprehensive income (OCI) until earnings are affected by the variability of the cash flows of the hedged transaction. If our hedges do

not qualify for hedge accounting, also known as economic hedges, then the changes in the fair value of the derivatives in the economic

hedge would be recorded in earnings, without an offsetting change in the fair value of the hedged item. As a result, economic hedges

have the potential to cause significant volatility on our results of operations. If hedges qualify under a qualifying ASC 815 hedge, we

may use two approaches to hedge accounting: short-cut hedge accounting and long-haul hedge accounting.

A short-cut hedging relationship assumes no ineffectiveness and implies that the hedge between an interest-rate swap and an interest-

bearing financial instrument is perfectly correlated. Therefore, it is assumed that changes in the fair value of the interest-rate swap and

the interest-bearing financial instrument will perfectly offset one another; therefore, no ineffectiveness is recorded in earnings or OCI.

To qualify for short-cut accounting treatment, a number of restrictive conditions must be met.

A long-haul hedging relationship requires us to assess, retrospectively and prospectively, on at least a quarterly basis, whether the

derivative and hedged item have been and are expected to be highly effective in offsetting changes in fair value or cash flows

attributable to the hedged risk. We perform a prospective analysis based on a quantitative method at the inception of the hedge, and

subsequently each quarter, we also perform retrospective hedge effectiveness analysis using regression to support our assertion that a

hedge was and will remain effective. If the hedge fails the effectiveness test any time during its life, the hedge relationship no longer

qualifies for hedge accounting and the derivative is marked to fair value through current period earnings without any offsetting

changes in fair value related to the hedged item.

For more information about policies for our derivatives and hedging activities, see financial statements, Note 1 . Summary of

Significant Accounting Policies and Note 17 . Derivatives and Hedging Activities.

Legislative and Regulatory Developments

Certain significant legislative and regulatory actions and developments are summarized below.

Regulatory Environment .  The Bank is subject to various legal and regulatory requirements and priorities. Certain actions, regulatory

priorities and areas of focus, such as deregulation, by the federal executive administration, FHFA, and other financial regulators have

changed and continue to impact the regulatory environment. For example, FHFA repealed the Fair Lending, Fair Housing, and

Equitable Housing Finance Plans regulation applicable to the FHLBanks, effective March 9, 2026, citing the federal executive

administration’s deregulatory priorities. Furthermore, during 2025, withdrawals and rescissions of certain rules, proposed rules and

advisory, regulatory, or technical guidance, have affected, and likely will continue to affect, certain aspects of the Bank's business

operations. These changes could impact the Bank's financial condition, results of operations, and reputation.

March 2026 Executive Orders: On March 13, 2026, the federal executive administration issued two executive orders addressing

mortgage credit availability and housing affordability. One executive order directs FHFA and certain other financial regulators to

consider:

(1) revising capital regulations to tailor risk weights for all banks, including community banks, for portfolio mortgages, servicing

rights, and warehouse lines of credit;

(2) modernizing collateral valuation and transfer systems between Federal Reserve Banks and FHLBanks;

(3) expanding access to longer-dated FHLBank advances tied to residential mortgage assets;

(4) creating targeted FHLBank liquidity programs for entry‑level housing, owner‑occupied purchase loans, and small residential

builders;

(5) accelerating collateral boarding and valuation processes through standardized data and digital documentation; and

(6) refocusing FHLBanks’ Affordable Housing Programs to facilitate faster-cycle execution and greater financial leverage for

small-scale and owner-occupied housing projects.

The executive order also instructs FHFA and the Vice Chairman for Supervision of the Federal Reserve to consider authorizing

FHLBanks’ intermediate access to the Federal Reserve’s discount window for FHLBanks’ depository institution members.

Additionally, among other actions, the executive order directs FHFA and other relevant federal agencies to consider facilitating the

acceptance of e-notes and promoting digital mortgage standards. Under the executive order, FHFA, in consultation with other relevant

federal agencies, is required to submit a report on the efficiency of national housing finance markets, identifying recommendations for

regulatory or legislative changes necessary to address any regulatory or oversight gaps.

The second executive order, together with other actions, directs FHFA and certain other federal agencies to consider eliminating

unduly burdensome rules and reforming programs that constrain residential development and impede housing affordability, especially

the construction of affordable single-family homes as well as suburban and exurban neighborhoods.

While we note that the executive orders could potentially affect the Bank’s liquidity products, collateral and operational requirements,

capital deployment, and housing-related initiatives, they do not, by themselves, change existing regulations or program requirements

applicable to the Bank or the FHLBank System. The nature, timing, and scope of any regulatory or programmatic changes resulting

from these executive orders remain uncertain and would be subject to further agency action, including rulemaking or guidance, as

applicable. We will continue to monitor developments related to these executive orders and assess their potential impact on the Bank,

the FHLBank System, and the Bank’s members.

January 2026 Executive Order: On January 20, 2026, the federal executive administration issued an executive order that seeks to

restrict acquisitions by large institutional investors of single-family homes. Among other things, the executive order directs certain

agencies, including FHFA, to issue guidance to (i) prevent agencies and government-sponsored enterprises from providing for,

approving, insuring, guaranteeing, securitizing, or facilitating the acquisition by a large institutional investor of a single-family home

that could otherwise be purchased by an individual owner-occupant, or disposing of federal assets in a manner that transfers a single-

family home to a large institutional investor; and (ii) promote sales to individual owner-occupants, including through anti-

circumvention provisions, first-look policies, and disclosure requirements. The executive order also calls for legislative

recommendations to codify related policies and directs certain agencies to conduct reviews and consider additional measures to

combat speculation by large institutional investors in single-family housing markets. We are unable to predict the nature of the

guidance, measures, or recommendations, or how each may impact the Bank ’ s business.

Considering the changes in the regulatory environment, there is uncertainty with respect to the ultimate result of future regulatory

actions and the impact they may have on the Bank and the FHLBank System. We also cannot predict the federal executive

administration’s actions on U.S. housing finance and government-sponsored enterprises, including relating to the revision or end of

conservatorships of Fannie Mae and Freddie Mac or potential reforms or enhancements to their capital structure, or the imposition of

new requirements or limitations on their existing authorities or changes in the nature of their government backed guarantees, along

with any corresponding impacts to the FHLBank System, the secondary mortgage and mortgage-backed securities market, or the

mortgage industry. We continue to monitor these actions as they evolve and to evaluate their potential impact on us. For a discussion

of related risks, please refer to Item 1A Risk Factors .

Tax Exempt Municipal Bond Legislative Proposal : In February 2026, bipartisan legislation was introduced in the U.S. House of

Representatives and Senate that would restore and make permanent prior authority, previously in effect from 2008 to 2010, permitting

FHLBanks to support tax‑exempt municipal bonds used to finance certain housing‑related and community infrastructure projects,

including water and sewer systems, hospitals, and schools. If enacted, the legislation would allow FHLBanks to provide standby letters

of credit in connection with such municipal bonds through their member institutions. The proposed legislation does not provide for a

federal guarantee or create taxpayer liability. The Bank will continue to monitor this legislative proposal and assess any potential

operational or financial impacts on the Bank if the legislation is enacted.

SEC Treasury Clearing Rule : In December 2023, the U.S. Securities and Exchange Commission adopted rules requiring the central

clearing of certain repurchase agreement transactions (“repos”) in U.S. Treasury securities, subject to phased‑in compliance dates and

applicable exemptions. Compliance for eligible repo transactions is required by June 30, 2027. The Bank is within scope of the rule

with respect to repos but is excluded from the requirement for outright purchases and sales. The Bank has elected to participate in

central clearing on a sponsored basis. The Bank continues to assess implementation requirements and currently is progressing with

onboarding arrangements in advance of the applicable compliance date.

Amendments to New York UCC Addressing Digital Assets : On December 5, 2025, New York Assembly Bill 3307/Senate Bill

1840 was signed into law amending New York’s Uniform Commercial Code (UCC). The legislation modernizes the state’s

commercial rules with respect to digital assets.

Among other things, the legislation (i) adopts a new Article 12 to the New York UCC, which governs the ownership, transfer, and

enforceability of certain digital assets called “controllable electronic records” (including cryptocurrency and non-fungible tokens

(NFTs); (ii) establishes, through amendments to Article 9 of the New York UCC, how parties may perfect a security interest in and

thereby establish ‘control’ of such controllable electronic records; and (iii) ensures the negotiability of digital assets by providing that

a good faith purchaser for value who obtains control (a “qualifying purchaser”) takes its interest free of competing claims. In addition,

the legislation updates the New York UCC to recognize electronic records and signatures and to place electronic records on equal legal

footing with paper‑based records for covered UCC transactions.

This legislation substantially incorporates the 2022 Amendments to the UCC approved by the Uniform Law Commission and

American Law Institute (the “2022 UCC Amendments”). New York joins the more than 30 states in adopting the 2022 UCC

Amendments. The amendments to New York’s UCC law are effective June 3, 2026. We will continue to monitor and review this

legislation’s impact on the Bank and its operations and financial condition.

Financial Condition

Table 2.1        Statements of Condition — Period-Over-Period Comparison

(Dollars in thousands)

December 31, 2025

December 31, 2024

Net change in dollar

amount

Net change in

percentage

Assets

Cash and due from banks

Interest-bearing deposits

Securities purchased under agreements to resell

Federal funds sold

Trading securities

Equity Investments

Available-for-sale securities

Held-to-maturity securities

Advances

Mortgage loans held-for-portfolio

Accrued interest receivable

Premises, software, and equipment

Operating lease right-of-use assets

Finance lease right-of-use assets

Derivative assets

Other assets

Total assets

Liabilities

Deposits

Interest-bearing demand

Non-interest-bearing demand

Total deposits

Consolidated obligations

Bonds

Discount notes

Total consolidated obligations

Mandatorily redeemable capital stock

Accrued interest payable

Affordable Housing Program

Derivative liabilities

Other liabilities

Operating lease liabilities

Finance lease liabilities

Total liabilities

Capital

Total liabilities and capital

Balance Sheet overview December 31, 2025 and December 31, 2024

Total assets decreased to $156.5 billion at December 31, 2025 , from $160.3 billion at December 31, 2024 , a decrease of $3.8 billion ,

Cash at banks was $38.2 million at December 31, 2025 , compared to $ 26.1 million at December 31, 2024 .

Money market investments increased $7.4 billion at December 31, 2025 to $30.5 billion , as compared to $23.1 billion at December 31,

2024 . We continue to maintain an ample supply of funds to meet liquidity demands. Federal funds sold averaged $17.2 billion and

$19.4 billion in 2025 and 2024 , respectively. Resale agreements averaged $7.5 billion and $4.8 billion in 2025 and 2024 , respectively.

Money market investments also included interest-bearing deposits at highly-rated financial institutions. Balances were $3.0 billion and

$2.8 billion at December 31, 2025 and December 31, 2024 , respectively.

Advances — Par balances decreased at December 31, 2025 to $92.5 billion , compared to $106.5 billion at December 31, 2024 . Short-

term fixed-rate advances increased by 7.6% to $17.0 billion at December 31, 2025 , up from $15.8 billion at December 31, 2024 . ARC

advances, which are adjustable-rate borrowings, decreased by 29.4% to $23.3 billion at December 31, 2025 , compared to $33.0 billion

at December 31, 2024 .

Long-term investment debt securities — Long-term investment debt securities are designated as available-for-sale or held-to-

maturity. Our investment profile consists almost exclusively of GSE and Agency issued securities.

In the AFS portfolio, long-term investments of floating-rate GSE-issued mortgage-backed securities were carried on the balance sheet

at fair values of $292.8 million at December 31, 2025 and $343.0 million at December 31, 2024 . Fixed-rate long-term investments in

the AFS portfolio, comprised of fixed-rate GSE-issued mortgage-backed securities, were carried on the balance sheet at fair values of

$9.8 billion at December 31, 2025 and $8.3 billion at December 31, 2024 . We acquired $1.4 billion (par) of fixed-rate GSE-issued

MBS in 2025 .

State and local housing finance agency obligations, primarily New York and New Jersey, were carried as AFS securities at $1.7 billion

at December 31, 2025 and $1.3 billion at December 31, 2024 .

In the HTM portfolio, long-term investments were predominantly GSE-issued fixed- and floating-rate mortgage-backed securities and

a small portfolio of housing finance agency bonds. Fixed- and floating-rate mortgage-backed securities in the HTM portfolio were

$10.3 billion at December 31, 2025 and $10.7 billion at December 31, 2024 . We acquired $1.6 billion (par) of floating-rate GSE-

issued MBS in 2025 .

State and local housing finance agency obligations, primarily New York and New Jersey, were carried as HTM securities at $0.2

billion at December 31, 2025 and December 31, 2024 .

Trading securities (liquidity portfolio) — The objective of the trading portfolio is to meet short-term contingency liquidity needs.

During the current year period, we continued to invest in highly liquid U.S. Treasury securities. Trading investments are carried at fair

value, with changes recorded through earnings. At December 31, 2025 and December 31, 2024 , trading investments were $7.4 billion

and $7.2 billion in U.S. Treasury securities.

We will periodically evaluate our liquidity needs and may add to or dispose these liquidity investments as deemed prudent based on

liquidity and market conditions. The Finance Agency prohibits speculative trading practices but allows permitted securities to be

deemed held for liquidity if invested in a trading portfolio.

Equity Investments — We own grantor trusts that invest in highly-liquid registered mutual funds. Funds are classified as Equity

Investments and were carried on the balance sheet at fair values of $103.7 million at December 31, 2025 and $95.4 million at

December 31, 2024 .

Mortgage loans held-for-portfolio — Mortgage loans are investments in Mortgage Partnership Finance Program and Mortgage Asset

Program. Unpaid principal balance of MPF loans stood at $1.4 billion at December 31, 2025 , a decrease of $137.0 million from the

balance at December 31, 2024 . Unpaid principal balance of MAP loans stood at $1.2 billion at December 31, 2025 , an increase of

$426.0 million from the balance at December 31, 2024 . The total mortgage loans held-for-portfolio primarily consists of fixed-rate,

single-family mortgages. Paydowns for the total portfolio for twelve months ended December 31, 2025 were $210.1 million compared

to $187.4 million for the same period in 2024 . Acquisitions for the twelve months ended December 31, 2025 were $513.8 million

compared to $356.9 million for the same period in 2024 . Historically, credit performance has been strong and delinquency low. Loan

origination by members and acceptable pricing are key factors that drive acquisitions. Residential collateral values have remained

stable in the New York and New Jersey sectors, the primary geographic concentration for our mortgage loan portfolio, and historical

loss experience remains very low. Serious delinquencies (typically 90 days or more) at December 31, 2025 were higher than

December 31, 2024 . Allowance for credit losses increased to $3.7 million at December 31, 2025 compared to $3.1 million at

December 31, 2024 .

Capital ratios — Our capital position remains strong. Actual risk-based capital was $8.0 billion at December 31, 2025 compared to

$8.5 billion at December 31, 2024 . Required risk-based capital was $1.1 billion at December 31, 2025 compared to $1.0 billion at

December 31, 2024 . To support $156.5 billion of total assets at December 31, 2025 , the minimum required total capital was $6.3

billion or 4.0% of assets. Our actual regulatory risk-based capital was $8.0 billion , exceeding required total capital by $1.8 billion .

These ratios have remained consistently above the required regulatory ratios through all periods in this report. For more information,

see financial statements, Note 14 . Capital Stock, Mandatorily Redeemable Capital Stock and Restricted Retained Earnings.

Leverage — At December 31, 2025 , balance sheet leverage (based on U.S. GAAP) was 19.5 times shareholders’ equity compared to

19.1 times at December 31, 2024 . Balance sheet leverage has generally remained steady over the last several years, although from time

to time we have maintained excess liquidity in highly liquid investments, or cash balances at the Federal Reserve Bank of New York

(FRBNY) to meet unexpected member demand for funds. Increases or decreases in investments have a direct impact on leverage, but

generally growth in or shrinkage of advances does not significantly impact balance sheet leverage under existing capital stock

management practices. Members are required to purchase activity-based capital stock to support their borrowings from us, and when

activity-based capital stock is in excess of the amount that is required to support advance borrowings, we redeem the excess capital

stock immediately. Therefore, stockholders’ capital increases and decreases with members’ advance borrowings, and the capital to

asset ratio remains relatively unchanged.

Liquidity — Our liquidity position remains strong, and in compliance with all regulatory requirements, and we do not foresee any

changes to that position. In addition to the liquidity trading portfolio discussed previously, liquid assets at December 31, 2025

included $32.9 million as demand cash balances at the FRBNY, $27.5 billion in short-term and overnight investments in the federal

funds and resale agreements, and $10.1 billion of high credit quality GSE-issued available-for-sale securities that are investment grade

and readily marketable.

We also have other regulatory liquidity measures in place, including deposit liquidity and operational liquidity, and other liquidity

buffers.

For more information about the Advisory Bulletin and our liquidity measures, see section Liquidity, Cash Flows, Short-Term

Borrowings and Short-Term Debt, and Table 9.1 through Table 9.5 in this MD&A.

Credit Risk Management Framework

As part of an effort to evolve our Credit Risk Management Framework to better align it with the current regulatory environment, the

FHLBNY has enhanced its credit oversight and credit rating methodology to assess the financial condition of member institutions. The

Framework updates were initially implemented in the third quarter of 2025 .

The FHLBNY utilizes a new Credit Risk Rating Framework to conduct a comprehensive assessment of the financial condition of each

member institution on a quarterly basis. The enhanced credit rating process employs a financial framework that assesses current

regulatory financial statements as baseline, and then considers supplementary qualitative and quantitative information (e.g., call report

ratios vs peers, regulatory exam results, changes in NRSRO ratings, media coverage, stock price, credit default swap spreads, deposit

trends, management vacancies). The Framework considers these various factors to arrive at a final credit risk rating score that is

representative of the credit risk profile of the member.

Our approach to credit risk underwriting is also in alignment with the Federal Housing Finance Agency’s observations contained in its

November 2023 report entitled, “FHLBank System at 100: Focusing on the Future” (System at 100 Report) and feedback received

from periodic discussions with our regulator. Appendix 5 of the System at 100 Report suggests there be an enhanced focus on a

member’s ability to repay its obligations in the ordinary course of business versus relying on collateral for supporting the extension of

credit. Federal Housing Finance Agency Advisory Bulletin AB 2024-03, published September 27, 2024, also provides guidance

concerning credit underwriting.

This Framework will continue to be refined, and we will continue to monitor for regulatory guidance that may impact this Framework

in the future.

Advances

Our primary business is making collateralized loans to members, referred to as advances. Generally, the growth or decline in advances

is reflective of demand by members for both short-term liquidity and term funding. This demand is driven by economic factors such as

availability of alternative funding sources that are more attractive, or by the interest rate environment and the outlook for the economy.

Members may choose to prepay advances (which may generate prepayment fees) based on their expectations of interest rate changes

and demand for liquidity.

Advance volume is also influenced by merger activity, where members are either acquired by non-members or acquired by members

of another FHLBank. When our members are acquired by members of another FHLBank or by non-members, these former members

no longer qualify for membership, and we may not offer renewals or additional advances to the former members. If maturing advances

are not replaced, it may have an impact on business volume.

Interest rate hedging and basis adjustments — A significant percentage of fixed-rate, longer-term advances and all putable advances

were designated under an ASC 815 fair value accounting hedge. From time to time, certain advances are hedged by interest rate swaps

in economic hedges and the fair value option (FVO) is elected on an instrument-by-instrument basis for advances.

Carrying values of advances outstanding were $92.3 billion at December 31, 2025 and $105.8 billion at December 31, 2024 . Carrying

values included cumulative hedging basis adjustment losses of $0.1 billion at December 31, 2025 and $0.7 billion at December 31,

Table 3.1        Advance Trends

(in billions)

Member demand for advance products

Future demand from our members for advances is difficult to forecast as it is uncertain what the impact will be on our members’

businesses from multiple uncertainties, including supply of deposits and other funding to members’ businesses, risk of credit losses,

and other potential disruptions to our members’ businesses.

The FHFA in its “FHLBank System at 100: Focusing on the Future” report (System at 100 Report) released in November 2023 stated

that the FHFA has communicated its expectation that the FHLBanks revisit their policies, procedures, and systems for evaluating the

financial condition of members. The System at 100 Report and the FHFA’s Advisory Bulletin AB 2024-03, published September 27,

2024, stated that the FHLBanks must evaluate members’ financial condition and ability to repay advances and noted that while

pledged collateral may protect an FHLBank against risk of loss, it only serves as a backup source of repayment if the member cannot

repay the advance. The FHFA is initiating multiple actions to strengthen member risk management by the FHLBanks. The System at

100 Report and Advisory Bulletin 2024-03 emphasize that the FHLBanks are not “lenders of last resort” and need to coordinate with

members’ primary regulators and the Federal Reserve Banks to facilitate the transition of troubled members to the Federal Reserve’s

discount window. These comments from the FHFA and potential related actions by policy makers or member regulators may cause

financially healthy members to reduce their advances or amount of excess collateral pledged to the Bank. This may make it more

difficult for the Bank to provide liquidity in support of members that are experiencing temporary liquidity difficulties.

Advances — Product Types

The following table summarizes par values of advances by product type (dollars in thousands):

Table 3.2        Advances by Product Type

December 31, 2025

December 31, 2024

Amounts

Percentage

of Total

Amounts

Percentage

of Total

Adjustable Rate Credit - ARCs

Fixed Rate Advances

Short-Term Advances

Mortgage Matched Advances

Overnight & Line of Credit (OLOC) Advances

All other categories

Total par value

Advance discounts

Hedge valuation basis adjustments

Total

Member Pledged Collateral

Member borrowers are required to maintain an amount of eligible collateral that adequately secures their outstanding obligations with

the FHLBNY. Eligible collateral includes: (1) one-to-four-family mortgages; (2) multi-family & commercial real estate mortgages;

(3) Treasury and U.S. government agency securities; (4) private-label commercial mortgage-backed securities; and (5) certain other

collateral that is real estate-related, provided that such collateral has a readily ascertainable value, can be liquidated in due course, and

the Bank has the ability to perfect its security interest. The FHLBNY also has a statutory lien priority with respect to certain member

assets under the FHLBank Act as well as a claim on FHLBNY capital stock held by our members. The FHLBNY’s loan and collateral

agreements give the Bank security interest in assets held by borrowers that is sufficient to cover their obligations to the FHLBNY.

FHLBNY may supplement this security interest by imposing additional collateral delivery requirements on our member borrowers

based on the overall financial strength of the member. To ensure that the FHLBNY has sufficient collateral to cover credit extensions,

the FHLBNY has established a Collateral Lendable Value methodology. This methodology ensures that the FHLBNY remains fully

collateralized by establishing risk-based lendable values for each pledged collateral type. These lendable values are periodically

reassessed to ensure that they are reflective of current market conditions.

The following table summarizes pledged collateral (in thousands):

Table 3.3        Collateral Supporting Indebtedness to Members

Indebtedness

Collateral (a)

Advances  (b)

Other

Obligations  (c)

Total

Indebtedness

Loans  (d)

Securities and

Deposits  (d)

Total  (d)

December 31, 2025

December 31, 2024

(a) The level of over-collateralization is on an aggregate basis and may not necessarily be indicative of a similar level of over-

collateralization on an individual member basis. At a minimum, each member pledged sufficient collateral to adequately secure

the member’s outstanding obligation with the FHLBNY. In addition, most members maintain an excess amount of pledged

collateral with the FHLBNY to secure future liquidity needs.

(b) Par value.

(c) Standby financial letters of credit, derivatives, and members’ credit enhancement guarantee amount (MPFCE).

(d) Estimated market value.

The following table shows the breakdown of collateral pledged by members between those in the physical possession of the FHLBNY

or its safekeeping agent, and those that were specifically listed (in thousands):

Table 3.4        Location of Collateral Held

Estimated Market Values

Collateral in

Physical

Possession

Collateral

Specifically Listed

Total Collateral

Received

December 31, 2025

December 31, 2024

Advances — Interest Rate Terms

The following table summarizes interest-rate payment terms for advances (dollars in thousands):

Table 3.5        Advances by Interest-Rate Payment Terms

December 31, 2025

December 31, 2024

Amounts

Percentage

of Total

Amounts

Percentage

of Total

Fixed-rate (a)

Variable-rate (b)

Total par value

Advance discounts

Hedge valuation basis adjustments

Total

(a) Fixed-rate borrowings remained the largest category of advances borrowed by members and includes long-term and short-term

fixed-rate advances. Long-term advances remain a small segment of the portfolio at December 31, 2025 , with only 2.1% of

advances in the remaining maturity bucket of greater than 5 years ( 2.9% at December 31, 2024 ). For more information, see

financial statements Note 9 . Advances.

(b) Variable-rate advances are ARC advances are indexed to SOFR-OIS, Federal Funds-OIS or other benchmark indices. The

FHLBNY’s larger members are generally borrowers of variable-rate advances.

The following table summarizes Redemption Term of advances (dollars in thousands):

Table 3.6        Advances by Redemption Term

December 31, 2025

December 31, 2024

Change

Redemption Term (dollars in thousands)

Amount

Percentage

Amount

Percentage

Amount

Percentage

Fixed-rate

Due in 1 year or less

Due after 1 year through 3 years

Due after 3 years through 5 years

Due after 5 years through 15 years

Total principal amount

Fixed-rate, putable

Due in 1 year or less

Due after 1 year through 3 years

Due after 3 years through 5 years

Due after 5 years through 15 years

Total principal amount

Variable-rate

Due in 1 year or less

Due after 1 year through 3 years

Due after 3 years through 5 years

Due after 5 years through 15 years

Total principal amount

Other (a)

Due in 1 year or less

Due after 1 year through 3 years

Due after 3 years through 5 years

Due after 5 years through 15 years

Total principal amount

Total principal amount advances

Other adjustments, net (b)

Total advances

(a) Includes hybrid, fixed-rate amortizing/mortgage matched, convertible, fixed-rate callable or prepayable, and other advances.

(b) Consists of hedging and fair value option valuation adjustments and unamortized premiums, discounts, and commitment fees.

NM — Not meaningful.

Hedge volume  — We hedge putable advances and certain “vanilla” fixed-rate advances under the hedge accounting provisions when

they qualify under those standards and as economic hedges when hedge effectiveness accounting provisions cannot be established.

The following table summarizes advances hedged under ASC 815 qualifying hedge by type of structure (in thousands):

Table 3.7        Hedged Advances by Type

Par Amount

December 31, 2025

December 31, 2024

Qualifying hedges

Fixed-rate bullets  (a)

Fixed-rate putable  (b)

Fixed-rate with embedded cap

Total qualifying hedges

Aggregate par amount of advances hedged  (c)

Fair value basis (hedging adjustments)   (d)

(a) Generally, fixed-rate medium- and longer-term advances are hedged to mitigate the risk in fixed-rate lending.

(b) Putable advances are hedged by cancellable swaps, and the paired long put option mitigate the put option risks; in the hedge,

fixed-rate cash flows are also synthetically converted to benchmark floating-rate.

(c) Represents par values of advances in ASC 815 hedge relationships. Amounts include advances that were in ASC 815 hedges but

have since been de-designated or advances that are in economic hedges (not qualifying as ASC 815 accounting hedge).

(d) Fair value basis hedging adjustments included immaterial balances of unamortized basis as a result of de-designation hedges.

Economic hedges of floating-rate advances  — From time to time, we issue floating-rate advances indexed to benchmark rates (Federal

Funds-OIS and SOFR-OIS) and may then execute interest rate basis swaps that would synthetically convert the cash flows to the

desired floating-rate cash flows indexed to another benchmark to meet our asset/liability funding strategies. At December 31, 2025 and

December 31, 2024 , there was no basis swaps outstanding. The carrying value of the advances in the economic hedge would not

include fair value basis since the advance is recorded at amortized cost.

Putable Advances  — The following table summarizes par amounts of advances that were still putable or callable, with one or more

pre-determined option exercise dates remaining (in thousands):

Table 3.8        Putable and Callable Advances

Advances

Par Amount

December 31, 2025

December 31, 2024

Putable  (a)

No-longer putable/callable

(a) Putable advances were typically long-term advances with one or more put options exercisable by the FHLBNY. Putable advances

are hedged in an ASC 815 qualifying fair value hedge with mirror image terms, including mirror image put option terms.

Investments

We maintain long-term investment portfolios of debt securities, which are principally mortgage-backed securities issued by GSEs and

U.S. Agency. Investments include a small portfolio of MBS issued by private enterprises, and bonds issued by state or local housing

finance agencies. We also maintain short-term investments for our liquidity resources, for funding daily stock repurchases and

redemptions, for ensuring the availability of funds to meet the credit needs of our members, and to provide additional earnings. We

also invest in a liquidity trading portfolio, the purpose of which is to augment our liquidity needs. Investments in the trading portfolio

are typically U.S. Treasury securities, and from time to time we have also invested in GSE-issued securities, all carried at their fair

values. The Finance Agency prohibits speculative investments but allows the designation of a trading portfolio for liquidity purposes.

We may dispose of such investments if we do not need them for liquidity purposes and market conditions deem the sale as

advantageous.

We are subject to credit risk on our investments, generally transacted with GSEs and large financial institutions that are considered to

be investment quality. The Finance Agency defines investment quality as a security with adequate financial backing so that full and

timely payment of principal and interest on such security is expected and there is minimal risk that the timely payment of principal and

interest would not occur because of adverse changes in economic and financial conditions during the projected life of the security.

The following table summarizes changes in investments by categories: Interest-bearing deposits, Money market investments, Trading

securities, Equity investments in Grantor trusts, Available-for-sale securities, and Held-to-maturity securities (Carrying values, dollars

in thousands):

Table 4.1        Investments by Categories

December 31,

December 31,

Dollar

Variance

Percentage

Variance

State and local housing finance agency obligations, net (a)

Available-for-sale securities, at fair value

Held-to-maturity securities, at carrying value, net

Total HFA securities

U.S. Treasury notes, available-for-sale at fair value

Trading securities (b)

Mortgage-backed securities

Available-for-sale securities, at fair value (c)

Held-to-maturity securities, at carrying value, net (c)

Total MBS securities

Equity investments in Grantor trusts (d)

Interest-bearing deposits

Securities purchased under agreements to resell

Federal funds sold

Total Investments

(a) State and local housing finance agency bonds are designated as both AFS, carried at fair values and HTM, carried at carrying

value. There were purchases of $375.0 million of AFS State and local housing finance agency bonds for the twelve months ending

December 31, 2025 . Payments from HTM portfolio were $7.5 million and payments from the AFS portfolio were $7.2 million .

(b) Trading securities comprised of U.S. Treasury securities at December 31, 2025 and are carried at fair value. Trading portfolio is

for liquidity and not for speculative purposes. We acquired and sold $3.5 billion par of U.S. Treasury securities in 2025 .

(c) AFS securities outstanding were GSE and U.S. Agency issued MBS and carried at fair values. MBS in the HTM portfolio were

predominantly GSE-issued.

(d) Funds in the grantor trusts are designated as equity investments and are carried at fair value. Trust fund balances represent

investments in registered fixed-income and equity mutual funds and money market funds. Funds are highly liquid and readily

redeemable at their NAVs, which are the fair values of the investments. The funds are owned by the FHLBNY, and the intent is to

utilize investments to fund current and potential future payment obligations of the non-qualified employee retirement plans.

The following table summarizes our investment debt securities issuer concentration (dollars in thousands):

Table 4.2        Investment Debt Securities Issuer Concentration

December 31, 2025

December 31, 2024

Long Term Investment (c)

Carrying (a)

Value

Fair value

Carrying value

as a Percentage

of Capital

Carrying (a)

Value

Fair Value

Carrying value

as a Percentage

of Capital

MBS

Fannie Mae

Freddie Mac

Ginnie Mae

All Others - PLMBS (d)

Non-MBS, net (b)

Total Investment Debt Securities

Categorized as:

Available-for-Sale Securities

Held-to-Maturity Securities,

net

(a) Carrying values include fair values for AFS securities.

(b) Non-MBS  — Includes Housing finance agency bonds.

(c) Excludes Trading portfolio.

(d) In the third quarter of 2025, the Bank sold all remaining securities in our PLMBS portfolio.

The following tables summarize external rating information of the held-to-maturity portfolio (carrying values in thousands):

Table 4.3        External Rating of the Held-to-Maturity Portfolio

December 31, 2025

AAA-rated (a)

AA-rated (b)

A-rated

BBB-rated

Below

Investment

Grade

Total

Mortgage-backed securities

State and local housing finance agency obligations

Total Long-term securities

December 31, 2024

AAA-rated (a)

AA-rated (b)

A-rated

BBB-rated

Below

Investment

Grade

Total

Mortgage-backed securities

State and local housing finance agency obligations

Total Long-term securities

See footnotes (a) and (b) under Table 4.4 .

The following tables summarize external rating information of the AFS portfolio (the carrying values of AFS investments are at fair

values; in thousands):

Table 4.4        External Rating of the Available-for-Sale Portfolio

December 31, 2025

AAA-rated (a)

AA-rated (b)

A-rated

BBB-rated

Below

Investment

Grade

Total

Mortgage-backed securities

Housing and U.S. Obligations

Total Long-term securities

December 31, 2024

AAA-rated (a)

AA-rated (b)

A-rated

BBB-rated

Below

Investment

Grade

Total

Mortgage-backed securities

Housing and U.S. Obligations

Total Long-term securities

Footnotes to Table 4.3 and Table 4.4 .

(a) Certain housing finance bonds have been assigned AAA, based on the ratings by S&P and Moody’s. In the third quarter of 2025,

the Bank sold all the remaining securities in our PLMBS portfolio.

(b) We have assigned GSE-issued MBS a rating of AA+ based on the credit rating assigned to long-term senior debt issued by Fannie

Mae, Freddie Mac, and U.S. Agency. The debt ratings are based on S&P’s rating of AA+ for the GSE Senior long-term debt and

AA+ for the debt issued by the U.S. government; Moody’s debt rating is Aaa for the GSE Senior long-term debt and the U.S.

government.

External credit rating information has been provided in Table 4.3 and Table 4.4 as the information is used as another data point to

supplement our credit quality indicators, and they serve as a useful indicator when analyzing the degree of credit risk to which we are

exposed. Significant changes in credit ratings classifications of our investment debt securities portfolio could indicate increased credit

risk for us that could be accompanied by a reduction in the fair values of our investment debt securities portfolio.

Fair Value Levels of Investment Debt Securities

To compute fair values, multiple vendor prices were received for substantially all of our MBS holdings, and substantially all of those

prices fell within specified thresholds. The relative proximity of the prices received from the multiple vendors supported our

conclusion that the final computed prices were reasonable estimates of fair values. GSE securities priced under such a valuation

technique using the market approach are typically classified within Level 2 of the valuation hierarchy.

The fair value of State and local housing finance agency obligations is estimated by management using information primarily from

pricing services. Due to the current lack of significant market activity, their fair values were categorized as Level 3 of the valuation

hierarchy. For a comparison of carrying values and fair values of investment debt securities, see financial statements, Note 5 . Trading

securities, Note 7 . Available-for-Sale Securities and Note 8 . Held-to-Maturity Securities. For more information about the

corroboration and other analytical procedures performed, see Note 18 . Fair Values of Financial Instruments. Also see Note 7 .

Available-for-sale securities for an explanation of amortized cost for securities hedged under ASC 815 fair value hedges.

Weighted average rates — Mortgage-backed securities (HTM and AFS) — The following table summarizes weighted average rates

(yields) and amortized cost by contractual maturities (dollars in thousands):

Table 4.5        Mortgage-Backed Securities Weighted Average Rates by Contractual Maturities

December 31, 2025

December 31, 2024

Amortized

Cost

Weighted

Average Rate (a)

Amortized

Cost

Weighted

Average Rate (a)

Mortgage-backed securities

Due in one year or less

Due after one year through five years

Due after five years through ten years

Due after ten years

Total Mortgage-backed securities

(a) Average yields are derived by dividing interest income by the average amortized cost balances of the related maturity bucket.

A significant portion of the MBS portfolio consists of floating-rate securities and the weighted average rates will change in tandem

with changes in SOFR.

Fair Value Hedges of Fixed-rate Available-for-sale Mortgage-backed Securities

The Bank has adopted the partial-term hedging guidance within ASC 815, Derivatives and Hedging. This guidance allows the hedging

of only the benchmark interest rate component, rather than the entire coupon, for fixed-rate instruments in a fair value hedge. The

Bank has applied this guidance to hedge designated available-for-sale fixed-rate CMBS.  The following table summarizes key data (in

thousands):

Table 4.6        Fair Value Hedges of Fixed-Rate Prepayable CMBS

Fair Value Hedges of Fixed-

Rate Prepayable CMBS

December 31, 2025

December 31, 2024

Current face value of hedged CMBS

Partial-term hedge face value of hedged CMBS

Cumulative basis adjustment gains (losses) (a)

Interest rate swap contracts (par)

(a) Cumulative basis adjustment gains (losses) at December 31, 2025 and December 31, 2024 included immaterial balances of

unamortized basis as a result of de-designation hedges.

Short-term investments

We typically maintain substantial investments in high quality short- and intermediate-term financial instruments such as secured

overnight transactions collateralized by securities, including unsecured overnight and term deposits and federal funds sold to highly-

rated financial institutions who also satisfy other credit quality factors. These investments provide the liquidity necessary to meet

members’ credit needs. Short-term investments also provide a flexible means of implementing the asset/liability management

decisions to adjust liquidity. We also invest in a liquidity trading portfolio, consisting of U.S. Treasury securities, with the objective of

satisfying our liquidity requirements and expanding our choice of investing for liquidity.

Monitoring — We actively monitor our credit exposures and the credit quality of our counterparties, including an assessment of each

counterparty’s financial performance, capital adequacy, and sovereign support as well as related market signals, and actively limit or

suspend existing exposures, as appropriate. In addition, we are required to manage our unsecured portfolio subject to regulatory limits

prescribed by our regulator, the Finance Agency. The Finance Agency regulations include limits on the amount of unsecured credit

that may be extended to a counterparty or a group of affiliated counterparties, based upon a percentage of eligible regulatory capital

and the counterparty’s overall credit rating. Under these regulations, the level of eligible regulatory capital is determined as the lesser

of our regulatory capital or the eligible amount of regulatory capital of the counterparty determined in accordance with Finance

Agency regulations.

The Finance Agency regulations also permit us to extend additional unsecured credit, which could be comprised of overnight

extensions and sales of federal funds subject to continuing contract. Our total unsecured overnight exposure to a single counterparty

may not exceed twice the regulatory limit for term exposures. We are prohibited by Finance Agency regulation from investing in

financial instruments issued by non-U.S. entities other than those issued by U.S. branches and agency offices of foreign commercial

banks, and we did not own any financial instruments issued by foreign sovereign governments, including those countries that are

members of the European Union in any periods in this report.

Securities purchased under agreements to resell — As part of our banking activities with counterparties, we have entered into secured

financing transactions that mature overnight and can be extended only at our discretion. These transactions involve the lending of cash

against securities, which are accepted as collateral. The balance outstanding under such agreements were $16.0 billion at

December 31, 2025 and $10.9 billion at December 31, 2024 . Resale agreements averaged $7.5 billion and $4.8 billion in 2025 and

2024 , respectively. For more information, see financial statements, Note 4 . Interest-bearing Deposits, Federal Funds Sold and

Securities Purchased under Agreements to Resell.

Federal funds sold — Federal funds sold was $11.6 billion at December 31, 2025 and $9.4 billion at December 31, 2024 and averaged

$17.2 billion and $19.4 billion in 2025 and 2024 , respectively. Investments represent unsecured lending to major banks and financial

institutions. We are a major lender in this market, particularly in the overnight market. The amount of unsecured credit risk that may

be extended to individual counterparties is commensurate with the counterparty’s credit quality as assessed by our management, and

the assessment would include reviews of credit ratings of counterparty’s debt securities or deposits as reported by NRSROs. Overnight

and short-term federal funds allow us to warehouse funds and provide balance sheet liquidity to meet unexpected member borrowing

demands.

The table below presents federal funds sold, the counterparty credit ratings, and the domicile of the counterparty or the domicile of the

counterparty’s parent for U.S. branches and agency offices of foreign commercial banks in the U.S. (in thousands):

Table 4.7        Federal Funds Sold by Domicile of the Counterparty (a )

December 31, 2025

December 31, 2024

Year ended  December 31,2025

Year ended December 31, 2024

Foreign

Counterparties

S&P Rating

Moody’s

Rating

S&P Rating

Moody’s

Rating

Daily Average

Balance

Balance at

period end

Daily Average

Balance

Balance at

period end

Australia

Austria

Canada

Finland

France

Germany

Netherlands

Norway

Sweden

Subtotal

USA

BBB+ to AA-

BAA1 to AA1

BBB+ to AA-

BAA1 to AA1

Total

(a) Average investment in federal funds sold has typically been greater than the period-end balance as counterparties have less

demand at year-end than during the year.

The following table summarizes par value, amortized cost and the carrying value (fair value) of the trading portfolio (in thousands):

Table 4.8        Trading Securities

Trading Securities

December 31, 2025

December 31, 2024

Par value

Amortized cost

Carrying/Fair value

The Finance Agency prohibits speculative investments but allows permitted securities to be deemed held for liquidity if invested in a

trading portfolio. We may dispose of such investments if we do not need them for liquidity purposes and market conditions deem the

sale as advantageous. For more information about fair values of securities in the trading portfolio, see Note 5 . Trading Securities in the

Notes to the Financial Statements.

The following table summarizes economic hedges of fixed-rate trading securities held for liquidity (in thousands):

Table 4.9        Economic Hedges of Fixed-rate Liquidity Trading Securities

Economic Hedges of Fixed-Rate

Trading Securities

December 31, 2025

December 31, 2024

Par/Face amounts of portfolio of U.S. Treasury fixed-rate securities (a)

Par amounts of interest rate swaps

(a) Balances represent outstanding amounts of U.S. Treasury securities.

Mortgage Loans Held-for-Portfolio, Net

Mortgage loans are carried in the Statements of Condition at amortized cost, less allowance for credit losses. The outstanding unpaid

principal balance was $2.6 billion at December 31, 2025 , an increase of $288.9 million (net of acquisitions and paydowns) from the

balance at December 31, 2024 . Mortgage loan balances increased due to an increase in acquisitions. During 2025 , the Bank purchased

$513.8 million of mortgage loans from members and paydowns were $210.1 million . Mortgage loans were investments in MPF and

MAP. Serious delinquencies at December 31, 2025 were lower than December 31, 2024 . Allowance for credit losses was $3.7 million

at December 31, 2025 and $3.1 million at December 31, 2024 .

Mortgage Asset Program — The MAP program is a residential housing finance program in which the FHLBNY funds or purchases

loans originated by members or affiliates. The FHLBNY offers the MAP as a secondary market outlet for its Participating Financial

Institution members to fund mortgages and be competitive in offering fixed-rate mortgage loan products.

Mortgage Partnership Finance Program — We invested in mortgage loans through the MPF Program, which is a secondary mortgage

market structure under which eligible mortgage loans are purchased or funded from or through members who are Participating

Financial Institution (PFI). We may also acquire MPF loans through participations with other FHLBanks. MPF loans are conforming,

conventional, and government insured i.e., insured or guaranteed by the FHA, the Department of Veterans Affairs (VA) or the Rural

Housing Service of the Department of Agriculture (RHS), fixed-rate mortgage loans secured primarily by single-family residential

properties with maturities ranging from five to 30 years or participations in such mortgage loans. The FHLBank of Chicago (MPF

Provider) developed the MPF Program in order to help fulfill the housing mission and to provide an additional source of liquidity to

FHLBank members that choose to sell mortgage loans into the secondary market rather than holding them in their own portfolios.

Finance Agency regulations define the acquisition of Acquired Member Assets (AMA) as a core mission activity of the FHLBanks. In

order for MPF loans to meet the AMA requirements, the purchase and funding are structured so that the credit risk associated with

MPF loans is shared with PFIs.

Mortgage loans — Conventional and Insured Loans — The following table classifies mortgage loans between conventional loans and

loans insured by FHA/VA (in thousands):

Table 5.1        Mortgage Loans by Conventional and Insured Loans

December 31, 2025

December 31, 2024

Federal Housing Administration and Veteran Administration insured loans

Conventional loans

Allowance for credit losses on mortgage loans

Total mortgage loans held-for-portfolio, net

Loan and PFI Concentration — Loan concentration was in New York State, which is to be expected since many of the largest PFIs are

located in New York. An overall decline in the economy, residential real estate market, or an occurrence of a natural disaster could

adversely affect the value of the mortgage loans in a concentrated region. The tables below summarize concentrations — Geographic

and PFI.

Table 5.2        Geographic Concentration of Mortgage Loans

December 31, 2025

December 31, 2024

Number of loans %

Amounts outstanding %

Number of loans %

Amounts outstanding %

New York State

New Jersey State

Table 5.3        Top Five Participating Financial Institutions — Concentration (par value, dollars in thousands) :

December 31, 2025

Mortgage

Loans

Percent of Total

Mortgage Loans

OceanFirst Bank

The Lyons National Bank

Teachers Federal Credit Union

Manasquan Bank

FourLeaf Federal Credit Union (a)

All Others

Total (b)

December 31, 2024

Mortgage

Loans

Percent of Total

Mortgage Loans

Bethpage Federal Credit Union

Teachers Federal Credit Union

OceanFirst Bank

The Lyons National Bank

Flagstar Bank, N.A.

All Others

Total (b)

(a) Effective March 3, 2025, Bethpage Federal Credit Union was renamed to FourLeaf Federal Credit Union.

(b) Includes MPF unpaid principal balances of $1.4 billion as of December 31, 2025 and $1.6 billion as of  December 31, 2024 and

MAP unpaid principal balances of $1.2 billion as of December 31, 2025 and $0.7 billion as of  December 31, 2024 .

Debt Financing Activity and Consolidated Obligations

Our primary source of funds continues to be the issuance of Consolidated obligation bonds and discount notes. In aggregate, carrying

balances of CO bonds and CO discount notes were $144.5 billion and $148.4 billion at December 31, 2025 and December 31, 2024 ,

respectively.

CO bonds and CO discount notes — The carrying value of Consolidated obligation bonds was $68.5 billion (par, $68.4 billion ) at

December 31, 2025 , compared to $80.6 billion (par, $81.1 billion ) at December 31, 2024 . The carrying value of Consolidated

obligation discount notes outstanding was $76.0 billion at December 31, 2025 and $67.9 billion at December 31, 2024 .

Interest rate hedging  — Significant amounts of CO bonds have been designated under an ASC 815 fair value accounting hedge. From

time to time, certain CO bonds were hedged by interest rate swaps in economic hedges; additionally, we have also hedged the

anticipatory issuance of fixed-rate CO bonds in a cash flow hedge under ASC 815. Certain CO bonds were elected under the FVO. As

a result of hedging elections under ASC 815 and the elections under the FVO, carrying values of CO bonds included valuation basis

adjustments. For more information about valuation basis adjustments on CO bonds, see Table 6.1 CO Bonds by Type.

From time to time, we hedge CO discount notes under ASC 815 fair value accounting; additionally, certain discount notes are also

hedged under ASC 815 cash flow accounting hedge. Certain discount notes were elected under the FVO. As a result of accounting

elections, carrying values of discount notes may include valuation basis adjustments. For more information about valuation basis

adjustments on discount notes, see Table 6.7 Discount Notes Outstanding. Also, see financial statements, Note 17 . Derivatives and

Hedging Activities.

Debt Ratings  — A FHLBank’s ability to access the capital markets to issue debt, as well as our cost of funds, is dependent on credit

ratings from Nationally Recognized Statistical Rating Organizations. Consolidated obligations of FHLBanks are rated Aa1/P-1 by

Moody’s, and AA+/A-1+ by S&P. Any rating actions on the U.S. Government would likely result in all individual FHLBanks’ long-

term deposit ratings and the FHLBank System long-term bond rating moving in lockstep with any U.S. sovereign rating action.

Joint and Several Liability  — Although we are primarily liable for our portion of Consolidated obligations (i.e. those issued on our

behalf), we are also jointly and severally liable with the other FHLBanks for the payment of principal and interest on the Consolidated

obligations of all the FHLBanks. For more information, see financial statements, Note 19 . Commitments and Contingencies.

SOFR CO Bonds  — The FHLBNY is an active participant in the issuance of SOFR-linked CO bonds. Outstanding balances were

$29.2 billion at December 31, 2025 and $32.2 billion at December 31, 2024 .

Consolidated obligation bonds

The following table summarizes types of Consolidated obligation bonds (CO Bonds) issued and outstanding (dollars in thousands):

Table 6.1        CO Bonds by Type

December 31, 2025

December 31, 2024

Amount

Percentage

of Total

Amount

Percentage

of Total

Fixed-rate, non-callable

Fixed-rate, callable

Step Up, callable

Step Down, callable

Floating rate, callable

Single-index floating rate

Total par value

Bond premiums

Bond discounts

Hedge valuation basis adjustments (a)

Hedge basis adjustments on de-designated hedges (b)

FVO (c) - valuation adjustments and accrued interest

Total Consolidated obligation bonds

Fair value basis and valuation adjustments  — Key determinants are factors such as run-offs and new transactions designated under

an ASC 815 hedge or elected under the FVO, the forward swap curve, the volatility of the swap rates, the remaining duration to

maturity, and for CO bonds elected under the FVO, the changes in the spread between the swap rate and the Consolidated obligation

debt yields, and changes in interest payable, which is a component of the entire fair value of FVO bonds.

(a) Hedging valuation basis adjustments — The reported carrying values of hedged CO bonds are adjusted for changes in their fair

values (fair value basis adjustments or fair value) that are attributable to changes in the benchmark risk being hedged. Our

primary benchmarks are SOFR-OIS and Federal Funds-OIS. In the hedging relationships, a benchmark is elected on an

instrument-by-instrument basis and becomes the discounting basis under ASC 815 for computing changes in fair values for

hedged CO bonds. Table 6.2 CO Bonds Hedged under Qualifying Fair Value Hedges discloses notional amounts of CO bonds

hedged. The application of ASC 815 accounting methodology resulted in the recognition of net cumulative hedge valuation basis

gains of $0.1 billion at December 31, 2025 and $0.6 billion at December 31, 2024 . Generally, hedge valuation basis gains and

losses are unrealized and are expected to reverse to zero if the CO bonds are held to maturity or are called on the early option

exercise dates.

(b) Valuation basis of terminated hedges — Represents unamortized cumulative valuation basis of certain CO bonds that were no

longer in fair value hedge relationships. When hedging relationships for the debt were de-designated, the net unrealized

cumulative losses at the hedge termination dates were no longer adjusted for changes in the benchmark rate. Instead, the

valuation basis is being amortized on a level yield method, and the net amortization is recorded as a reduction of Interest

expense. If the CO bonds are held to maturity, the basis losses will be fully amortized through interest expense.

(c) FVO valuation adjustments  — Valuation basis adjustments and accrued interest payable are recorded to recognize changes in

the entire fair value (the full fair value) of CO bonds elected under the FVO. Table 6.3 CO Bonds Elected under the Fair Value

Option (FVO) discloses par amounts of CO bonds elected under the FVO.

We have elected the FVO on an instrument-by-instrument basis. For CO bonds elected under the FVO, it was not necessary to

estimate changes attributable to instrument-specific credit risk, as we consider the credit worthiness of the FHLBanks to be

secure and credit related adjustments unnecessary. More information about debt elected under the FVO is provided in financial

statements, Note 18 . Fair Values of Financial Instruments (See Fair Value Option Disclosures).

Hedge volume  — Tables 6.2  – 6.4 provide information with respect to par amounts of CO bonds based on accounting designation:

(1) under hedge qualifying rules; (2) under the FVO; and (3) as an economic hedge.

Qualifying hedges  — Generally, fixed-rate (bullet and callable) medium and long-term Consolidated obligation bonds are hedged in a

Fair value ASC 815 qualifying hedge.

The following table provides information on CO bonds in an ASC 815 qualifying hedge relationship (in thousands):

Table 6.2        CO Bonds Hedged under Qualifying Fair Value Hedges

Consolidated Obligation Bonds

Par Amount

December 31, 2025

December 31, 2024

Qualifying hedges

Fixed-rate bullet bonds

Fixed-rate callable bonds

CO bonds elected under the FVO  — If at inception of a hedge we do not believe that a hedge would be highly effective in offsetting

fair value changes between the derivative and the debt (hedged item), we may designate the debt under the FVO. We would record fair

value changes of the FVO debt through earnings, and to the extent the debt is economically hedged, record changes in the fair values

of the interest rate swap through earnings. The recorded balance sheet value of debt under the FVO would include the fair value basis

adjustments, so that the debt’s balance sheet carrying values would be its full fair value.

The following table provides information on CO bonds elected under the fair value option (in thousands):

Table 6.3        CO Bonds Elected under the Fair Value Option (FVO)

Consolidated Obligation Bonds

Par Amount

December 31, 2025

December 31, 2024

Bonds designated under FVO

CO bonds elected under the FVO were generally in economic hedges by the execution of interest rate swaps that converted the fixed-

rate CO bonds to a variable-rate instrument. We elected to account for the CO bonds under the FVO when we were generally unable to

assert with confidence that the short- and intermediate-term bonds, or callable bonds, with short lock-out periods to the exercise of call

options, would remain effective hedges as required under hedge accounting rules. We may also elect the FVO to achieve asset liability

objectives. Designation of CO bonds under the FVO is an asset-liability management decision. For more information, see financial

statements, Fair Value Option Disclosures in Note 18 . Fair Values of Financial Instruments.

Economic hedges of CO bonds  — From time to time, we issue floating-rate debt indexed to a benchmark rate (Federal Funds-OIS or

SOFR-OIS) and may then execute interest rate swaps that would synthetically convert the cash flows to the desired floating-rate

funding indexed to another benchmark to meet our asset/liability funding strategies. The carrying value of the debt would not include

fair value basis since the debt is recorded at amortized cost.

The following table provides information on CO bonds in an economic hedge relationship (in thousands):

Table 6.4        Economic Hedges of CO Bonds (data in table excludes CO bonds elected under the FVO)

Consolidated Obligation Bonds

Par Amount

December 31, 2025

December 31, 2024

Bonds designated as economically hedged (a)

Fixed-rate bonds (b)

(a) At December 31, 2025 and December 31, 2024 , there were no basis swaps outstanding.

(b) Fixed-rate debt — CO Bonds that were previously hedged and have fallen out of effectiveness.

CO Bonds — Maturity or Next Call Date

Callable bonds contain an exercise date or a series of exercise dates that may result in a shorter redemption period. The following table

summarizes par amounts of Consolidated bonds outstanding by years to maturity or next call date (dollars in thousands):

Table 6.5        CO Bonds — Maturity or Next Call Date

December 31, 2025

December 31, 2024

Amount

Percentage of

Total

Amount

Percentage of

Total

Year of maturity or next call date (a)

Due or callable in one year or less

Due or callable after one year through two years

Due or callable after two years through three years

Due or callable after three years through four years

Due or callable after four years through five years

Thereafter

Total par value

(a) Contrasting Consolidated obligation bonds by contractual maturity dates (see financial statements, Note 12 . Consolidated

Obligations — Redemption Terms of Consolidated Obligation Bonds) with potential call dates (as reported in table above)

illustrates the impact of hedging on the effective duration of the bond. With a callable bond, we have purchased the option to

terminate debt at agreed upon dates from investors. The call options are exercisable as either a one-time option or quarterly. Our

current practice is to exercise our option to call a bond when the swap counterparty exercises its option to call the cancellable

swap hedging the callable bond. Thus, issuance of a callable bond with an associated callable swap significantly alters the

contractual maturity characteristics of the original bond and introduces the possibility of an exercise call date that is significantly

shorter than the contractual maturity.

The following table summarizes callable bonds versus non-callable CO bonds outstanding (par amounts, in thousands):

Table 6.6        Outstanding Callable CO Bonds versus Non-callable CO bonds

December 31, 2025

December 31, 2024

Callable

Non-Callable

CO Discount Notes

The following table summarizes discount notes issued and outstanding (dollars in thousands):

Table 6.7        Discount Notes Outstanding

December 31, 2025

December 31, 2024

Par value

Amortized cost

Hedge value basis adjustments (a)

Hedge basis adjustments on de-designated hedges (b)

FVO (c) - valuation adjustments and remaining accretion

Total Consolidated obligation discount notes

Weighted average interest rate

(a) Hedge value basis adjustments — The reported carrying values of hedged CO discount notes are adjusted for changes in their

fair values (fair value basis adjustments or fair value) that are attributable to changes in the benchmark risk being hedged. In the

hedging relationships, a specific benchmark is elected on an instrument-by-instrument basis and becomes the discounting basis

under ASC 815 for computing changes in fair values for the hedged CO discount notes. Notional amounts of $69.8 billion and

$56.3 billion were hedged under ASC 815 qualifying fair value hedges at December 31, 2025 and December 31, 2024 ,

respectively. The application of ASC 815 accounting methodology resulted in immaterial amounts of net cumulative hedge

valuation adjustments as noted in the table above. Generally, hedge valuation basis gains and losses are unrealized and are

expected to reverse to zero if the CO discount notes are held to maturity.

(b) Hedge basis adjustments on de-designated hedges — Represents the unamortized balances of valuation basis of CO discount

notes that were previously in a fair value hedging relationship. Generally, when a hedging relationship is de-designated, the

valuation basis is no longer adjusted for changes in the valuation of the debt for changes in the benchmark rate; instead, the basis

is amortized over the debt’s remaining life, so that at maturity of the debt the unamortized basis is reversed to zero.

(c) FVO valuation adjustments — Valuation basis adjustments are recorded to recognize changes in the entire or full fair values

including unaccreted discounts on CO discount notes elected under the FVO. Changes in benchmark interest rates, notional

amounts of CO discount notes elected under FVO and remaining terms to maturity are factors that impact hedge valuation

adjustments. No CO discount notes were elected under the FVO at December 31, 2024 .

The following table summarizes Fair Value hedges of discount notes (in thousands):

Table 6.8        Fair Value Hedges of Discount Notes

Consolidated Obligation Discount Notes

Principal Amount

December 31, 2025

December 31, 2024

Discount notes hedged under qualifying hedge

The following table summarizes economic hedges of discount notes (in thousands):

Table 6.9        Economic Hedges of Discount Notes

Consolidated Obligation Discount Notes

Par Amount

December 31, 2025

December 31, 2024

Discount notes designated as economic hedges (a)

(a) Represents CO discount notes that were previously hedged and have fallen out of effectiveness.

The following table summarizes discount notes elected and outstanding under the FVO (in thousands):

Table 6.10        Discount Notes under the Fair Value Option (FVO)

Consolidated Obligation Discount Notes

Par Amount

December 31, 2025

Discount notes designated under FVO

No CO discount notes were elected under the FVO at December 31, 2024 .

CO discount notes elected under the FVO were generally in economic hedges with the execution of interest rate swaps that converted

the fixed-rate notes to variable-rate instruments. We elected to account for the CO discount notes under the FVO when we were

generally unable to assert with confidence that the CO discount notes would remain effective hedges as required under hedge

accounting rules. Management may also elect the FVO of certain other CO discount notes to achieve asset liability objectives. See Fair

Value Option Disclosures in Note 18 . Fair Values of Financial Instruments.

The following table summarizes Cash flow hedges of discount notes (in thousands):

Table 6.11        Cash Flow Hedges of Discount Notes

Consolidated Obligation Discount Notes

Principal Amount

December 31, 2025

December 31, 2024

Discount notes hedged under qualifying hedge (a)

(a) Amounts represent discounts notes issued in cash flow “rollover” hedge strategies that hedged the variability of 91-day discount

notes issued in sequence. The maximum length of time over which we are hedging this exposure is 7 years. In this strategy, the

discount note expense, which resets every 91 days, is synthetically converted to fixed cash flows over the hedge periods, thereby

achieving hedge objectives. For more information, see financial statements, Cash flow hedge gains and losses in Note 17 .

Derivatives and Hedging Activities.

Recent Rating Actions

Table 6.12 below presents FHLBank’s long-term credit rating, short-term credit rating and outlook at February 28, 2026 .

Table 6.12        FHLBNY Ratings

Moody’s

Long-Term/ Short-Term

Long-Term/ Short-Term

Year

Rating

Outlook

Rating

Outlook

February 28, 2026

Stable/Affirmed

February 28, 2026

Stable/Affirmed

February 28, 2025

Stable/Affirmed

February 28, 2025

AAA/P-1

Negative/Affirmed

February 29, 2024

Stable/Affirmed

February 29, 2024

AAA/P-1

Negative/Affirmed

Accrued interest payable

Accrued interest payable  — Amounts outstanding were $470.3 million at December 31, 2025 and $604.3 million at December 31,

2024 . Accrued interest payable was comprised primarily of interest due and unpaid on CO bonds, which are generally payable on a

semi-annual basis. Fluctuations in unpaid interest balances on bonds are due to the timing of semi-annual coupon accruals and

payments at the balance sheet dates.

Other Liabilities

Other liabilities  — Amounts outstanding were $167.6 million at December 31, 2025 and $133.5 million at December 31, 2024 . Other

liabilities comprised of unfunded pension liabilities, Federal Reserve pass-through reserves held on behalf of members, and

miscellaneous payables.

Stockholders’ Capital

The following table summarizes the components of Stockholders’ capital (in thousands):

Table 7.1        Stockholders’ Capital

December 31, 2025

December 31, 2024

Capital Stock (a)

Unrestricted retained earnings (b)

Restricted retained earnings (c)

Total accumulated other comprehensive income (loss)

Total Capital

(a) Stockholders’ Capital — Capital stock decreased in line with the decrease in advances borrowed. When an advance matures or is

prepaid, the excess capital stock is repurchased by the FHLBNY. When an advance is borrowed or a member joins the FHLBNY’s

membership, the member is required to purchase capital stock.

(b) Unrestricted retained earnings — Net income is added to this balance. Dividends are paid out of this balance. Funds are

transferred to Restricted retained earnings balances as mandated by the FHLBank Joint Capital Enhancement Agreement

(Capital Agreement).

(c) Restricted retained earnings — Restricted retained earnings balance at December 31, 2025 has grown to $1.3 billion from the

time the provisions were implemented in 2011 when the FHLBanks, including the FHLBNY, agreed to set up a restricted retained

earnings account. The FHLBNY will allocate at least 20% of its net income to the FHLBNY’s Restricted retained earnings

account until the balance of the account equals at least 1% of FHLBNY’s average balance of outstanding Consolidated

obligations for the current calendar quarter. By way of reference, the Restricted retained earnings target calculated at

December 31, 2025 was $1.4 billion based on the FHLBNY’s average consolidated obligations outstanding during the current

calendar quarter, as compared to actual Restricted retained earnings of $1.3 billion at December 31, 2025 . Also see Note 14.

Capital Stock, Mandatorily Redeemable Capital Stock and Restricted Retained Earnings.

The following table summarizes the components of AOCI (in thousands):

Table 7.2        Accumulated Other Comprehensive Income (Loss) (AOCI)

December 31, 2025

December 31, 2024

Accumulated other comprehensive income (loss)

Non-credit portion on held-to-maturity securities, net (a)

Net market value unrealized gains (losses) on available-for-sale securities (b)

Net Fair value hedging gains (losses) on available-for-sale securities (b)

Net Cash flow hedging gains (losses) (c)

Employee supplemental retirement plans (d)

Total Accumulated other comprehensive income (loss)

(a) Represents cumulative unamortized non-credit losses. Balances in AOCI have declined due to accretion recorded as a reduction

in AOCI and a corresponding increase in the balance sheet carrying values of the impaired securities.

(b) Net market value unrealized losses of $395.4 million at December 31, 2025 and net unrealized losses of $800.3 million at

December 31, 2024 , represented third-party pricing vendors’ market-based unrealized gains/losses of securities designated as

AFS. Net unrealized gains of $363.9 million and $634.7 million included immaterial balances of unamortized basis as a result of

de-designation hedges at December 31, 2025 and December 31, 2024 , represented changes in the benchmark rate (the risk being

hedged) calculated by the Bank’s internal models for AFS designated in ASC 815 hedging relationships. Hedging gains and

losses are recorded through earnings with an offset to the carrying values of hedged AFS securities. Hedging basis will reverse to

zero as hedges mature.

(c) Cash flow hedging gains (losses) recorded in AOCI were primarily the result of cash flow hedges of sequential issuance of

discount notes; also included immaterial valuation basis of cash flow hedges of anticipatory issuance of CO bonds. See Table 7.3

AOCI Roll forward due to ASC 815 Hedging Programs .

(d) Employee supplemental plans — Balances represent actuarially determined supplemental pension and postretirement health

benefit liabilities that were not recognized through earnings.

The following table presents amounts recognized in and reclassified out of AOCI due to cash flow and fair value hedges (in

thousands):

Table 7.3        AOCI Roll forward due to ASC 815 Hedging Programs

December 31, 2025

Cash Flow Hedges

Fair Value Hedges

Rollover Hedge

Program

Anticipatory Hedge

Program

AFS Securities

Beginning balance

Changes in fair values (a)

Amount reclassified

Fair Value - closed contract

Ending balance

Notional amount of swaps outstanding

December 31, 2024

Cash Flow Hedges

Fair Value Hedges

Rollover Hedge

Program

Anticipatory Hedge

Program

AFS Securities

Beginning balance

Changes in fair values (a)

Amount reclassified

Fair Value - closed contract

Ending balance

Notional amount of swaps outstanding

December 31, 2023

Cash Flow Hedges

Fair Value Hedges

Rollover Hedge

Program

Anticipatory Hedge

Program

AFS Securities

Beginning balance

Changes in fair values (a)

Amount reclassified

Fair Value - closed contract

Ending balance

Notional amount of swaps outstanding

(a) Represents fair value changes of open swap contracts in cash flow hedges. For more information, see Financial Statements,

Note  17 . Derivatives and Hedging Activities.

Dividends  — By Finance Agency regulation, dividends may be paid out of current earnings or if certain conditions are met, may be

paid out of previous retained earnings. We may be restricted from paying dividends if we do not comply with any of the Finance

Agency’s minimum capital requirements or if payment would cause us to fail to meet any of the minimum capital requirements,

including our Retained earnings target as established by the Board of Directors of the FHLBNY. In addition, we may not pay

dividends if any principal or interest due on any Consolidated obligations has not been paid in full, or if we fail to satisfy certain

liquidity requirements under applicable Finance Agency regulations. None of these restrictions applied for any period presented.

The following table summarizes dividends paid and payout ratios:

Table 7.4        Dividends Paid and Payout Ratios

Twelve months ended

December 31,

December 31,

Cash dividends paid per share

Dividends paid (a)(c)

Pay-out ratio (b)

(a) In thousands.

(b) Dividend paid during the period divided by net income for the period.

(c) Does not include dividends paid to non-members; for accounting purposes, such dividends are recorded as interest expense.

Derivative Instruments and Hedging Activities

Interest rate swaps, swaptions, cap and floor agreements (collectively, derivatives) enable us to manage our exposure to changes in

interest rates by adjusting the effective maturity, repricing frequency, or option characteristics of financial instruments. To a limited

extent, we also use interest rate swaps to hedge changes in interest rates prior to debt issuance and essentially lock in funding costs.

Finance Agency regulations prohibit the speculative use of derivatives. For additional information about the methodologies adopted

for the fair value measurement of derivatives, see financial statements, Note 18 . Fair Values of Financial Instruments.

The following tables summarize the principal derivatives hedging strategies outstanding as of December 31, 2025 and December 31,

Table 8.1        Derivative Hedging Strategies — Advances

December 31, 2025

December 31, 2024

Hedged Item / Hedging Instrument

Hedging Objective

Hedge

Designation

Notional Amount

(in millions)

Notional Amount

(in millions)

Pay-fixed, receive float interest rate swap

(without options)

Converts the advance’s fixed rate to a variable-rate index.

Fair Value

Economic

Pay-fixed, receive float interest rate swap (with

options)

Converts the advance’s fixed rate to a variable-rate index and

offsets option risk in the advance.

Fair Value

Pay-fixed with embedded features, receive-

float interest-rate swap (non-callable)

Reduces interest-rate sensitivity and repricing gaps by

converting the advance’s fixed rate to a variable-rate index and/

or offsets embedded option risk in the advance.

Fair Value

Table 8.2        Derivative Hedging Strategies — Investments

December 31, 2025

December 31, 2024

Hedged Item / Hedging Instrument

Hedging Objective

Hedge

Designation

Notional Amount

(in millions)

Notional Amount

(in millions)

Pay-fixed, receive float interest-rate swap

Converts the investment’s fixed rate to a variable-rate index.

Fair Value

Economic

Table 8.3        Derivative Hedging Strategies — Consolidated Obligation Bonds

December 31, 2025

December 31, 2024

Hedged Item / Hedging Instrument

Hedging Objective

Hedge

Designation

Notional Amount

(in millions)

Notional Amount

(in millions)

Receive-fixed or -structured, pay float interest

rate swap (without options)

Converts the bond’s fixed or structured  rate to a variable-rate

index.

Fair Value

Economic

Receive-fixed or -structured, pay float interest

rate swap (with options)

Converts the bond’s fixed- or structured-rate to a variable-rate

index and offsets option risk in the bond.

Fair Value

Economic

Table 8.4        Derivative Hedging Strategies — Consolidated Obligation Discount Notes

December 31, 2025

December 31, 2024

Hedged Item / Hedging Instrument

Hedging Objective

Hedge

Designation

Notional Amount

(in millions)

Notional Amount

(in millions)

Receive-fixed, pay float interest-rate swap

Converts the discount note’s fixed rate to a variable-rate index.

Fair Value

Economic

Pay-fixed, receive float interest-rate swap

Hedging sequential issuance of discount notes to reduce interest-

rate sensitivity.

Cash Flow

Table 8.5        Derivative Hedging Strategies — Balance Sheet

December 31, 2025

December 31, 2024

Hedged Item / Hedging Instrument

Hedging Objective

Hedge

Designation

Notional Amount

(in millions)

Notional Amount

(in millions)

Pay-float, receive-fixed interest-rate swap

Interest-rate swap not linked to specific assets, liabilities or

forecasted transactions.

Economic

Pay-fixed, receive-float interest-rate swap

Interest-rate swap not linked to specific assets, liabilities or

forecasted transactions.

Economic

Interest-rate cap or floor

Protects against changes in income of certain assets due to

changes in interest rates.

Economic

Table 8.6        Derivative Hedging Strategies — Stand-Alone

December 31, 2025

December 31, 2024

Hedged Item / Hedging Instrument

Hedging Objective

Hedge

Designation

Notional Amount

(in millions)

Notional Amount

(in millions)

Mortgage delivery commitment

Exposed to fair-value risk associated with fixed-rate mortgage

purchase commitments.

Economic

Derivative Credit Risk Exposure and Concentration

In addition to market risk, we are subject to credit risk in derivative transactions because of the potential for non-performance by the

counterparties, which could result in the FHLBNY having to acquire a replacement derivative from a different counterparty at a cost

that may exceed its recorded fair values. We are also subject to operational risks in the execution and servicing of derivative

transactions. The degree of counterparty credit risk may depend on, among other factors, the extent to which netting procedures and/or

the provision of collateral are used to mitigate the risk. Summarized below are our risk measurement and mitigation processes:

Risk measurement — We estimate exposure to credit loss on derivative instruments by calculating the replacement cost, on a present

value basis, to settle at current market prices all outstanding derivative contracts in a gain position, net of collateral pledged by the

counterparty. All derivative contracts with non-members are also subject to master netting agreements or other right of offset

arrangements.

Exposure — In determining credit risk, we consider accrued interest receivable and payable, and the legal right to offset assets and

liabilities by counterparty. We attempt to mitigate exposure by requiring derivative counterparties to pledge cash collateral if the

amount of exposure is above the collateral threshold agreements. When we post excess cash collateral, we consider the excess

collateral as our derivative exposure.

Our credit exposures (derivatives in a net gain position) were to highly rated counterparties and Derivative Clearing Organizations

(DCO) that met our credit quality standards. Our exposures also included open derivative contracts executed on behalf of member

institutions, and the exposures were collateralized under standard advance collateral agreements with our members. For such

transactions, acting as an intermediary, we offset the transaction by purchasing equivalent notional amounts of derivatives from

unrelated derivative counterparties.

Risk mitigation — We attempt to mitigate derivative counterparty credit risk by contracting only with experienced counterparties

with investment-quality credit ratings that meet our credit quality standards. Annually, our management and Board of Directors review

and approve all non-member derivative counterparties. We monitor counterparties on an ongoing basis for significant business events,

including ratings actions taken by a Nationally Recognized Statistical Rating Organization (NRSRO). All approved derivatives

counterparties must enter into a master ISDA agreement with us before we execute a trade through that counterparty. In addition, for

all bilateral OTC derivatives, we have executed the Credit Support Annex to the ISDA agreement that provides for collateral support

at predetermined thresholds. For Cleared-OTC derivatives, margin requirements are mandated under the Dodd-Frank Act. We believe

that such arrangements — margin requirements, the selection of experienced, highly-rated counterparties and ongoing monitoring —

have sufficiently mitigated our exposures, and we do not anticipate any credit losses on derivative contracts.

Derivatives Counterparty Credit Ratings

For information, and an analysis of our exposure due to non-performance of swap counterparties, see Table “Offsetting of Derivative

Assets and Derivative Liabilities — Net Presentation” in Note 17 . Derivatives and Hedging Activities to financial statements. For

information about the methodologies adopted for the fair value measurement of derivatives, see financial statements, Note 18 . Fair

Values of Financial Instruments.

The following tables summarize notional amounts and fair values for the FHLBNY’s derivative exposures as represented by

derivatives in fair value gain positions (in thousands):

Table 8.7        Derivatives Counterparty Credit Ratings

December 31, 2025

Credit Rating

Notional Amount

Net Derivatives

Fair Value

Before

Collateral

Cash Collateral

Pledged To (From)

Counterparties  (a)

Balance Sheet Net

Credit Exposure

Non-

Cash Collateral

Pledged To (From)

Counterparties  (b)

Net Credit

Exposure to

Counterparties

Non-member counterparties

Asset positions with credit

exposure

Uncleared derivatives

Single A asset (c)

Cleared derivatives assets (d)

Liability positions with credit

exposure

Uncleared derivatives

Single A liability (c)

Cleared derivatives liability (d)

Total derivative positions with

non-member counterparties

to which the Bank had

credit exposure

Delivery commitments

Derivative position with

delivery commitments

Total derivative position with

members

Total

Derivative positions without

credit exposure

Total notional

December 31, 2024

Credit Rating

Notional Amount

Net Derivatives

Fair Value

Before

Collateral

Cash Collateral

Pledged To (From)

Counterparties  (a)

Balance Sheet Net

Credit Exposure

Non-

Cash Collateral

Pledged To (From)

Counterparties  (b)

Net Credit

Exposure to

Counterparties

Non-member counterparties

Asset positions with credit

exposure

Uncleared derivatives

Double A asset (c)

Single A asset (c)

Cleared derivatives assets (d)

Liability positions with credit

exposure

Uncleared derivatives

Single A liability (c)

Triple B liability (c)

Cleared derivatives liability (d)

Total derivative positions with

non-member counterparties to

which the Bank had credit

exposure

Delivery commitments

Derivative position with

delivery commitments

Total derivative position with

members

Total

Derivative positions without

credit exposure

Total notional

(a) When collateral is posted to counterparties in excess of fair value liabilities that are due to counterparties, the excess collateral is

classified as a component of derivative assets, as the excess represents a receivable and an exposure for the FHLBNY.

(b) Non-cash collateral securities. Non-cash collateral was not deducted from net derivative assets on the balance sheet as control

over the securities was not transferred.

(c) NRSRO Ratings.

(d) On cleared derivatives, we are required to pledge initial margin (considered as collateral) to Derivative Clearing Organizations

(DCOs) in cash or securities. We had pledged $845.6 million and $803.0 million in marketable securities as collateral at

December 31, 2025 and December 31, 2024 , respectively. At December 31, 2025 and December 31, 2024 , we did not pledge cash

as collateral.

Liquidity, Cash Flows, Short-Term Borrowings and Short-Term Debt

Our primary source of liquidity is the issuance of Consolidated obligation bonds and discount notes. To refinance maturing

Consolidated obligations, we rely on the willingness of our investors to purchase new issuances. We have access to the discount note

market, and the efficiency of issuing discount notes is an important source of liquidity, since discount notes can be issued any time and

in a variety of amounts and maturities. Member deposits and capital stock purchased by members are also sources of funds. Short-term

unsecured borrowings from other FHLBanks and in the federal funds market, as well as secured borrowings in the repo market

provide additional sources of liquidity. In addition, the Secretary of the Treasury is authorized to purchase up to $4.0 billion of

Consolidated obligations from the FHLBanks. Our liquidity position remains in compliance with all regulatory requirements and

management does not foresee any changes to that position.

Finance Agency Regulations — Liquidity

Regulatory requirements are specified in 12 CFR Parts 1239, 1270 and 1277 of the Finance Agency regulations and Advisory Bulletin

2018-07. Each FHLBank shall at all times have at least an amount of liquidity equal to the current deposits received from its members

that may be invested in: (1) Obligations of the United States; (2) Deposits in banks or trust companies; and (3) Advances with a

remaining maturity not to exceed five years that are made to members in conformity with Part 1266. We are required to hold positive

cash flow assuming no access to capital markets and assuming renewal of all maturing advances for a period of between ten to thirty

calendar days and to maintain liquidity limits to reduce the risks associated with a mismatch in asset and liability maturities, including

an undue reliance on short-term debt funding.

In addition, the Bank provides for Contingency Liquidity, which is defined as the sources of cash the Bank may use to meet its

operational requirements when its access to the capital markets is impeded. We met our Contingency Liquidity requirements during all

periods in this report. Liquidity in excess of requirements is summarized in the table titled Contingency Liquidity.

Liquidity Management

We actively manage our liquidity position to maintain stable, reliable, and cost-effective sources of funds while taking into account

market conditions, member demand and the maturity profile of our assets and liabilities. We recognize that managing liquidity is

critical to achieving our statutory mission of providing low-cost ready liquidity to our members. In managing liquidity risk, we are

required to maintain certain liquidity measures in accordance with the FHLBank Act, an Advisory Bulletin and policies developed by

management and approved by our Board of Directors. Our policies are designed to support the Bank’s ability to provide prompt, on-

demand liquidity to our members without the immediate need to access the Consolidated obligation debt markets.

The applicable liquidity requirements are described in the next four sections.

Deposit Liquidity . We are required to invest an aggregate amount at least equal to the amount of current deposits received from

members in: (1) Obligations of the United States; (2) Deposits in banks or trust companies; or (3) Advances with a remaining maturity

not to exceed five years that are made to members in conformity with 12 CFR Part 1266. In addition to accepting deposits from our

members, we may accept deposits from other FHLBanks or from any other governmental instrumentality. We met these requirements

at all times. Quarterly average reserves and actual reserves are summarized below (in millions):

Table 9.1        Deposit Liquidity

For the Quarters Ended

Average Deposit

Reserve Required

Average Actual

Deposit Liquidity

Excess

December 31, 2025

September 30, 2025

June 30, 2025

March 31, 2025

December 31, 2024

Operational Liquidity . We must be able to fund our activities as our balance sheet changes from day-to-day. We maintain the capacity

to fund balance sheet growth through regular money market and capital market funding and investment activities. We monitor our

operational liquidity needs by regularly comparing our demonstrated funding capacity with potential balance sheet growth. We take

such actions as may be necessary to maintain adequate sources of funding for such growth. Operational liquidity is measured daily.

We met these requirements at all times.

The following table summarizes excess operational liquidity (in millions):

Table 9.2        Operational Liquidity

For the Quarters Ended

Average Balance Sheet

Liquidity Requirement

Average Actual

Operational Liquidity

Excess

December 31, 2025

September 30, 2025

June 30, 2025

March 31, 2025

December 31, 2024

Contingency Liquidity . The Bank holds “contingency liquidity” in an amount sufficient to meet our liquidity needs if we are unable to

access the Consolidated obligation debt markets for at least five business days. Contingency liquidity includes: (1) marketable assets

with a maturity of one year or less; (2) self-liquidating assets with a maturity of one year or less; (3) assets that are generally

acceptable as collateral in the repurchase market; and (4) irrevocable lines of credit from financial institutions receiving not less than

the second-highest credit rating from a NRSRO. We consistently exceed the minimum requirements for contingency liquidity.

Contingency liquidity is measured daily. We met these requirements at all times.

The following table summarizes excess contingency liquidity (in millions):

Table 9.3        Contingency Liquidity

For the Quarters Ended

Average Five Day

Requirement

Average Actual

Contingency Liquidity

Excess

December 31, 2025

September 30, 2025

June 30, 2025

March 31, 2025

December 31, 2024

The Liquidity standards in our risk management policy address our day-to-day operational and contingency liquidity needs. These

standards enumerate the specific types of investments to be held to satisfy such liquidity needs and are outlined above. These

standards also establish the methodology to be used in determining our operational and contingency needs. We continually monitor

and project our cash needs, daily debt issuance capacity, and the amount and value of investments available for use in the market for

repurchase agreements. We use this information to determine our liquidity needs and to develop appropriate liquidity plans.

The Finance Agency’s Liquidity Advisory Bulletin 2018-07 requires the Bank to maintain between 10 and 30 calendar days (“the

Range”) of positive cash flow assuming all advances renew and to hold liquidity in a specified range of the notional of our outstanding

standby financial letters of credit. The FHFA has periodically issued non-public supervisory letters that establish base case guidance

within the Range. For three days during March 2023, we were in the lower part of the Range, temporarily below the FHFA’s base case

guidance, in order to meet significant member demand for advances resulting from the banking crisis, as permitted by the Advisory

Bulletin. The Advisory Bulletin also provides guidance on maintaining appropriate funding gaps for three-month and one-year

maturity horizons. We remained in compliance with the funding gaps provision and all Liquidity regulations.

Other Liquidity Contingencies . As discussed more fully under the section Debt Financing Activity and Consolidated Obligations, we

are primarily liable for Consolidated obligations issued on our behalf. We are also jointly and severally liable with the other

FHLBanks for the payment of principal and interest on the Consolidated obligations of all the FHLBanks. If the principal or interest

on any Consolidated obligation issued on our behalf is not paid in full when due, we may not pay dividends, redeem or repurchase

shares of stock of any member or non-member stockholder until the Finance Agency approves our Consolidated obligation payment

plan or other remedy and until we pay all the interest or principal currently due on all our Consolidated obligations. The Finance

Agency, at its discretion, may require any FHLBank to make principal or interest payments due on any Consolidated obligations.

Finance Agency regulations also state that the FHLBanks must maintain, free from any lien or pledge, the following types of assets in

an amount at least equal to the amount of Consolidated obligations outstanding: Cash; Obligations of, or fully guaranteed by, the

United States; Secured advances; Mortgages that have any guaranty, insurance, or commitment from the United States or any agency

of the United States; and investments described in section 16(a) of the FHLBank Act, including securities that a fiduciary or trust fund

may purchase under the laws of the state in which the FHLBank is located.

Cash flows

Cash and due from banks was $38.2 million at December 31, 2025 and $26.1 million at December 31, 2024 . Cash and cash

equivalents exclude short-term interest-bearing deposits, federal funds sold, and securities purchased under agreements to resell. The

following discussion highlights the major activities and transactions that affected our cash flows.

Cash flows provided by/(used in) operating activities — Operating assets and liabilities support our lending activities to members,

and can vary significantly in the normal course of business due to the amount and timing of cash flows, which are affected by

member-driven borrowing, our investment strategies, and market conditions. Management believes cash flows from operations,

available cash balances and our ability to generate cash through the issuance of Consolidated obligation bonds and discount notes are

sufficient to fund our operating liquidity needs.

Operating activities resulted in $0.7 billion in net cash outflows in the twelve months ended December 31, 2025 , compared to net cash

inflows of $1.1 billion in 2024 . Period changes in cash flows provided by or used in operating activities were largely driven by: (a)

Net income was $599.8 million in the twelve months ended December 31, 2025 and $738.5 million in 2024 ; (b) Net cash outflows

from Derivatives and hedging activities were $631.0 million in the twelve months ended December 31, 2025 , compared to net cash

inflows of $39.5 million in 2024 ; and (c) Negative adjustments to operating cash flows of $137.9 million to recognize unrealized

valuation gains on U.S. Treasury securities at December 31, 2025 , compared to negative adjustments of $26.0 million to recognize

unrealized valuation gains on U.S. Treasury securities in 2024 .

Cash flows provided by/(used in) investing activities — Investing activities resulted in $5.2 billion in net cash inflows in the twelve

months ended December 31, 2025 compared to $1.5 billion in net cash outflows in 2024 . In the twelve months ended December 31,

2025 , we acquired $3.4 billion in Treasury securities compared to $2.0 billion in 2024 . We did not make any repayments from

Treasury securities in twelve months ended December 31, 2025 and in 2024 . Net cash outflows from Securities purchased under

agreements to resell were $5.1 billion in the twelve months ended December 31, 2025 compared to net cash outflows of $3.1 billion in

Cash flows provided by/(used in) financing activities — Our primary source of funding is the issuance of Consolidated obligation

debt. Issuance of capital stock is another source. Financing activities reported net cash outflows of $ $4.5 billion in the twelve months

ended December 31, 2025 compared to net cash inflows of $0.3 billion in 2024 .

For more information, see Statements of Cash Flows in the financial statements.

Short-term Borrowings and Short-term Debt

Our primary source of funds is the issuance of FHLBank debt. Consolidated obligation discount notes are issued with maturities up to

one year and provide us with short-term funds. Discount notes are principally used in funding short-term advances, some long-term

advances, as well as money market instruments. We also issue short-term Consolidated obligation bonds as part of our asset-liability

management strategy. We may also borrow from another FHLBank, generally for a period of one day. Such borrowings have been

historically insignificant.

Off-Balance Sheet Arrangements, Guarantees, and Other Commitments  — In accordance with regulations governing the operations

of the FHLBanks, each FHLBank, including the FHLBNY, is jointly and severally liable for the FHLBank System’s Consolidated

obligations issued under sections 11(a) and 11(c) of the FHLBank Act. The joint and several liability regulations authorizes the

Finance Agency to require any FHLBank to repay all or a portion of the principal or interest on Consolidated obligations for which

another FHLBank is the primary obligor.

In addition, in the ordinary course of business, the FHLBNY engages in financial transactions that, in accordance with U.S. GAAP,

are not recorded on the FHLBNY’s balance sheet or may be recorded on the FHLBNY’s balance sheet in amounts that are different

from the full contract or notional amount of the transactions. For example, the Bank routinely enters into commitments to purchase

mortgage loans from PFIs, and issues standby letters of credit.

These commitments may represent future cash requirements of the Bank, although the standby letters of credit usually expire without

being drawn upon. For more information about contractual obligations and commitments, see financial statements, Note 19 .

Commitments and Contingencies.

Purchases of MBS . Finance Agency investment regulations limit the purchase of mortgage-backed securities to 300% of capital. We

were in compliance with the regulation at all times.

Table 9.4        FHFA MBS Limits

December 31, 2025

December 31, 2024

Actual

Limits

Actual

Limits

Mortgage securities investment authority

The Finance Agency has established a ratio by which the Finance Agency will assess each FHLBank’s core mission achievement.

Core mission achievement is determined using a ratio of primary mission assets, which include advances and acquired member assets

(mortgage loans acquired from members), to Consolidated obligations. The ratio will be determined at each year-end and will be

calculated using annual average par values.

Table 9.5        Core Mission Achievement

Par Values (dollars in thousands)

December 31, 2025

Annual Average

December 31, 2024

Annual Average

Advances

Mortgage Loans

Total Primary Mission Assets

Total Consolidated Obligations

U.S. Treasury obligations qualifying as HQLA under AB 2018-07  (a)

Core Mission Achievement Ratio

Target Ratio

(a) The annual average par value of the U.S. Treasury Securities that are held as Trading securities is deducted from the

denominator of the Primary Core Mission Asset ratio, as allowed under the FHFA guidelines.

Operational Risk Management

Operational risk is the risk of loss resulting from inadequate or failed internal processes, systems, or human factors, or from external

events. Operational risk is inherent in our business activities and, as with other risk types, is managed through an overall framework

designed to balance strong management oversight with well-defined independent risk management. This framework includes: policies

and procedures for managing operational risks; recognized ownership of the risk by the business; a compliance group that evaluates

compliance with board and regulatory policies, including the evaluation and reporting of operational risk incidents, which are

regularly reported directly to the Audit Committee of the Bank’s Board of Directors regarding compliance with policies and

procedures, including those related to managing operational risks.

Information Security and Business Continuity . The Bank has an Information Security Department that is responsible for the policy,

procedures, reviews, education, and management of the information security program. The Bank also has a department that is

responsible for the overall business continuity program, which includes training, testing, coordination, and continual updates.

Information security and the protection of confidential customer data, and business continuity are priorities for the FHLBNY, and we

have implemented processes that will help secure confidential data and continuity of operations. The information security program is

reviewed and enhanced periodically to address emerging threats to data integrity and cyberattacks. The business continuity program

includes annual testing of our capabilities. Results of business continuity testing and information security are routinely presented to

senior management of the FHLBNY and its Board of Directors.

The FHLBNY’s Information Technology group maintains and regularly reviews controls to ensure that technology assets are well

managed and secure from unauthorized access and in accordance with approved policies and procedures.

Results of Operations

The following section provides a comparative discussion of the FHLBNY’s results of operations for the three years ended

December 31, 2025 , 2024 and 2023 . For a discussion of the critical accounting estimates used by the FHLBNY that affect the results

of operations, see financial statements, Note 1. Summary of Significant Accounting Policies .

Net Income

Interest income from advances is the principal source of revenue. Other sources of revenue are interest income from investment debt

securities, liquidity trading securities, mortgage loans in the MPF and MAP portfolio, securities purchased under agreements to resell

and federal funds sold. Fair value gains and losses on liquidity trading securities and equity investments also impact net income. The

primary expense is interest paid on Consolidated obligation debt. Other expenses are primarily compensation and benefits, operating

expenses, our share of operating expenses of the Office of Finance and the FHFA, voluntary contributions, and affordable housing

program assessments on net income. Other significant factors affecting our net income include the volume and timing of investments

in mortgage-backed securities, prepayments of advances, charges due to debt repurchased, gains and losses from derivatives and

hedging activities, and earnings from investing our shareholders’ capital.

Summarized below are the principal components of net income (in thousands):

Table 10.1        Principal Components of Net Income

Years ended December 31,

Total interest income

Total interest expense

Net interest income before provision for credit losses

Provision (Reversal) for credit losses

Net interest income after provision for credit losses

Total other income (loss)

Total other expenses

Income before assessments

Affordable Housing Program Assessments

Net income

Net Income — 2025 Compared to 2024

Net income — For the FHLBNY, net income is net interest income, minus Provision (Reversal) for credit losses, plus other income

(loss), less other expenses and assessments set aside for the FHLBNY’s Affordable Housing Program.

Net income for 2025 was $599.8 million , a decrease of $138.7 million , or 18.8% compared to 2024 . Summarized below are the

primary components of our net income:

Net interest income — The 2025 net interest income was $851.8 million , a decrease o f $135.0 million , or 13.7% compared to 2024 .

Net interest spread was 31 basis points for 2025 compared to 30 basis points in 2024 . For more information, see Table 9.2 Net Interest

Income and accompanying discussions in this MD&A.

• Provision (Reversal) for credit losses for 2025 was a provision of $0.1 million and compared to a reversal of $0.2 million for

Other income (loss) — Other income (loss) reported a gain of $103.1 million in the 2025 compared to a gain of $112.6 million in the

• Service fees and other were $22.2 million in the 2025 compared to $21.5 million reported in 2024 . Service fees and other

are primarily fee revenues from financial letters of credit.

• Financial instruments carried at fair values reported net valuation losses of $47.3 million in 2025 compared to net losses

of $72.3 million in 2024 . For more information, see financial statements, Fair Value Option Disclosures in Note 18 . Fair

Values of Financial Instruments. Also see Table 10.9 Other Income (Loss) and accompanying discussions in this MD&A.

• Derivative activities reported net losses of $21.7 million in Other income in 2025 , compared to net gains of $127.6 million

in 2024 . For more information, see Table 10.11 Other Income (Loss) — Impact of Derivative Gains and Losses and

accompanying discussions in this MD&A.

• U.S. Treasury Securities held for liquidity (classified as trading) reported net fair value gains of $137.9 million in 2025

compared to net fair value gains of $26.0 million in 2024 .

• Equity Investments held to finance payments to retirees in a non-qualified pension plan, reported net fair value gains of

$11.9 million in 2025 compared to net gains of $9.6 million in 2024 .

Other expenses were $288.3 million in 2025 compared to $279.0 million in 2024 . Other expenses are primarily operating expenses,

compensation and benefits, our share of expenses of the Office of Finance and the Federal Housing Finance Agency, and voluntary

contributions.

• Operating expenses were $95.5 million in 2025 , down slightly from $95.6 million in 2024 .

• Compensation and benefits expenses were $123.9 million in 2025 compared to $114.7 million in 2024 .

• Voluntary contributions were $37.3 million in 2025 compared to $38.0 million in 2024 for various housing programs, grants,

charitable contributions, and a voluntary contribution to AHP. These voluntary contributions are in excess of the Bank’s

statutory requirement. The slight decrease was driven by lower net income in 2024 compared to 2023. The FHLBNY

committed to contribute an additional 5% of 2024 pre-assessment net income as voluntary contributions during 2025 .

• The expenses allocated for our share of the costs to operate the Office of Finance and the Federal Housing Finance Agency

were $23.4 million in 2025 compared to $22.5 million in 2024 .

• Other expenses were $8.1 million in the 2025 , slightly down from $8.2 million in 2024 .

Affordable Housing Program Assessments (AHP) allocated from net income were $66.7 million in 2025 compared to $82.1 million

in 2024 . Assessments are calculated as a percentage of net income, and changes in allocations were in tandem with changes in net

income.

Net Income — 2024 Compared to 2023

Net income  — For the FHLBNY, net income is net interest income, minus Provision (Reversal) for credit losses, plus other income

(loss), less other expenses and assessments set aside for the FHLBNY’s Affordable Housing Program.

Net income for 2024 was $738.5 million , a decrease of $12.6 million , or 1.7% compared to 2023 . Summarized below are the primary

components of our net income:

Net interest income — The 2024 interest income wa s $986.8 million , a decrease of $8.5 million , or 0.9% compared to 2023 . Net

interest spread was 30 basis points for 2024 compared to 33 basis points for 2023 . For more information, see Table 10.2 Net Interest

Income and accompanying discussions in this MD&A.

• Provision (Reversal) for credit losses for 2024 was a reversal of $0.2 million compared to a provision of $1.7 million for

Other income (loss) — Other income (loss) reported a gain of $112.6 million in 2024 compared to a gain of $77.1 million in 2023 .

• Service fees and other were $21.5 million in 2024 compared to $21.2 million reported in 2023 . Service fees and other are

primarily fee revenues from financial letters of credit.

• Financial instruments carried at fair values reported net valuation losses of $72.3 million in 2024 compared to net losses

of $99.2 million in 2023 . For more information, see financial statements, Fair Value Option Disclosures in Note 18 . Fair

Values of Financial Instruments. Also see Table 10.9 Other Income (Loss) and accompanying discussions in this MD&A.

• Derivative activities reported net gains of $127.6 million in Other income in 2024 , compared to net gains of $30.9 million in

2023 . For more information, see Table 10.11 Other Income (Loss) — Impact of Derivative Gains and Losses and

accompanying discussions in this MD&A.

• U.S. Treasury Securities held for liquidity (classified as trading) reported net fair value gains of $26.0 million in 2024

compared to net fair value gains of $110.5 million in 2023 .

• Equity Investments held to finance payments to retirees in a non-qualified pension plan, reported net fair value gains of $9.6

million in 2024 compared to net gains of $12.1 million in 2023 .

• Gains (losses) from extinguishment of debt reported de minimis gains from debt transfers (par amount $5.8 billion) to other

FHLB in 2024.

Other expenses were $279.0 million in 2024 compared to $236.1 million in 2023 . Other expenses are primarily operating expenses,

compensation and benefits, and our share of expenses of the Office of Finance and the Federal Housing Finance Agency, and

voluntary contributions.

• Operating expenses were $95.6 million in 2024 , up from $85.1 million in 2023 primarily due to investment in technology.

• Compensation and benefits expenses were $114.7 million in 2024 compared to $102.6 million in 2023 due to increase in

headcount.

• Voluntary contributions were $38.0 million in 2024 compared to $20.9 million in 2023 for various housing programs, grants,

charitable contributions, and a voluntary contribution to AHP. These voluntary contributions are in excess of the Bank's

statutory requirement. The increase was primarily driven by an increase in voluntary contributions of $17.2 million in 2024.

The FHLBNY committed to contribute an additional 5% of 2023 pre-assessment net income as voluntary contributions

during 2024.

• The expenses allocated for our share of the costs to operate the Office of Finance and the Federal Housing Finance Agency

were $22.5 million in 2024 compared to $20.4 million in 2023 .

• Other expenses were $ 8.2 million in 2024 , slightly up from $ 7.2 million in 2023 .

Affordable Housing Program Assessments (AHP) allocated from net income were $ 82.1 million in 2024 compared to $ 83.5 million

in 2023 . Assessments are calculated as a percentage of net income, and changes in allocations were in tandem with changes in net

income.

Net Interest Income, Interest Rate Margin and Interest Rate Spread

Net interest income is our principal source of net income. It represents the difference between income on interest-earning assets and

expense on interest-bearing liabilities.

Changes in net interest income are typically driven by changes in the volume of earning assets, as measured by average balances of

earning assets, and the impact of market interest rates on earnings assets and funding costs. Interest income and expense accruals on

interest rate swaps that qualified under the ASC 815 hedge accounting rules may impact year-over-year changes. Shareholders’ capital

stock and retained earnings are also factors that impact net interest income as they provide interest free funding. Earnings on capital

typically move directly with changes in short-term market interest rates. In a period when members prepay advances, the prepayment

fees, which we receive may cause fluctuations in net interest income. For more information about factors that impact Interest income

and Interest expense, see Table 10.3 Net Interest Adjustments from Qualifying Hedge Interest Rate Swaps and discussions thereto.

Also, see Table 10.4 Spread and Yield Analysis, and Table 10.5 Rate and Volume Analysis.

The following table summarizes net interest income (dollars in thousands):

Table 10.2        Net Interest Income

Percentage

Percentage

Years Ended December 31,

Change

Change

Total interest income  (a)

Total interest expense  (a)

Net interest income before provision for credit losses

(a) Total Interest Income and Total Interest Expense — See Tables 10.6 and Table 10.8 and accompanying discussions

2025 Net interest income, before loan loss provisions, was $851.8 million , a decrease of $135.0 million , or 13.7% from 2024 . Yield on

assets decreased to 4.49% for 2025 from 5.34% in 2024 while the funding cost decreased to 4.18% for 2025 from 5.04% in 2024 . Net

interest spread increased to 31 basis points in 2025 compared to 30 basis points in 2024 . Net interest margin, a measure of margin

efficiency, which is calculated as net interest income divided by average earning assets, was 53 basis points in 2025 , compared to 59

basis points in 2024 . Prepayment fees of $11.9 million were recorded in net interest income in 2025 compared to $4.2 million in 2024 .

Members’ demand for advances continued to remain stable throughout 2025 as they experienced heightened deposit volatility, strong

loan growth, and the need to enhance liquidity positions.

Stockholders’ capital (as measured by average outstanding balance in the period), which is typically deployed to fund short-term

interest-earning assets, decreased to $8.3 billion in 2025 , down from $8.6 billion in 2024 .

Swap interest settlement designated in ASC 815 hedging of assets and liabilities recorded net income of $34.9 million in 2025

compared to net income of $25.2 million in 2024 . Interest settlements are impacted by the net differential between fixed-rates

associated with hedging swaps and the benchmark variable-rates associated with the swap’s floating-leg. Net interest settlements on

swaps hedging assets and liabilities under ASC 815 fluctuated as expected in line with changes in the benchmark rates; the hedging

transactions achieved our interest rate risk management objectives.

Impact of Qualifying Hedges on Net Interest Income

The following table summarizes the impact of net interest adjustments from qualifying hedge interest - rate swaps (in thousands):

Table 10.3        Net Interest Adjustments from Qualifying Hedge Interest Rate Swaps

Years Ended December 31,

Interest income

Fair value hedging effects

Amortization of basis adjustment

Interest rate swap accruals

Price alignment amount (a)

Reported interest income

Interest expense

Fair value hedging effects

Amortization of basis adjustment

Interest rate swap accruals

Price alignment amount (b)

Reported interest expense

Net interest income

Net interest adjustment - interest rate swaps

(a)  Relates to derivatives for which variation margin payments are characterized as daily settled contracts.  Price alignment amount

in Interest income for advances hedged were $16.8 million expense , $50.4 million expense and $78.9 million expense at December 31,

2025 , 2024 and 2023 , respectively. Price alignment amount in Interest income for AFS debt securities hedged were $19.2 million

expense , $30.4 million expense and $31.6 million expense at December 31, 2025 , 2024 and 2023 , respectively.

(b)  Relates to derivatives for which variation margin payments are characterized as daily settled contracts.  Price alignment amount

in Interest expense for consolidated obligation bonds hedged were $2.8 million expense at December 31, 2025 , $0.5 million income

and $9.9 million income at December 31, 2024 and 2023 .  Price alignment amount in Interest expense for consolidated obligation

discount notes hedged were $0.4 million income , $2.4 million income and $0.5 million income at December 31, 2025 , 2024 and 2023 .

Spread and Yield Analysis — 2025 , 2024 and 2023

Table 10.4        Spread and Yield Analysis

Years ended December 31,

(Dollars in thousands)

Average

Balance

Interest

Income/

Expense

Yield/

Rate  (a)

Average

Balance

Interest

Income/

Expense

Yield/

Rate  (a)

Average

Balance

Interest

Income/

Expense

Yield/

Rate  (a)

Earning Assets:

Advances

Interest bearing deposits and others

Securities purchased under agreements

to resell

Federal funds sold

Investments

Trading securities

Mortgage-backed securities

Fixed

Floating

Available-for-sale Treasuries

State and local housing finance

agency obligations

Mortgage loans held-for-portfolio

Loans to other FHLBanks

Total interest-earning assets

Funded By:

Consolidated obligation bonds

Fixed

Floating

Consolidated obligation discount notes

Interest-bearing deposits and other

borrowings

Mandatorily redeemable capital stock

Total interest-bearing liabilities

Other non-interest-bearing funds

Capital

Total Funding

Net Interest Income/Spread

Net Interest Margin

(Net interest income/Earning

Assets)

NM — Not meaningful.

(a) Reported yields with respect to advances and Consolidated obligations may not necessarily equal the coupons on the instruments

as derivatives are extensively used to change the yield and optionality characteristics of the underlying hedged items. When we

issue fixed-rate debt that is hedged with an interest rate swap, the hedge effectively converts the debt into a simple floating-rate

bond. Similarly, we make fixed-rate advances to members and hedge the advances with a pay-fixed and receive-variable interest

rate swap that effectively converts the fixed-rate asset to one that floats with the designated benchmark rate (Federal Funds-OIS

or SOFR-OIS) in the hedging relationship. Average balance sheet information is presented, as it is more representative of activity

throughout the periods presented. For most components of the average balances, a daily weighted average balance is calculated

for the period. When daily weighted average balance information is not available, a simple monthly average balance is

calculated. Average yields are derived by dividing income by the average balances of the related assets, and average costs are

derived by dividing expenses by the average balances of the related liabilities. Yields and spreads are annualized.

Rate and Volume Analysis — 2025 , 2024 and 2023

The Rate and Volume Analysis presents changes in interest income, interest expense and net interest income that are due to changes in

both interest rates and the volume of interest-earning assets and interest-bearing liabilities, and their impact on interest income and

interest expense. Changes in interest income and interest expense that are not identifiable as either volume-related or rate-related, but

rather attributable to both volume and rate changes, are allocated to the volume and rate categories based on the proportion of the

absolute value of the volume and the rate change (in thousands):

Table 10.5        Rate and Volume Analysis

For the years ended

December 31, 2025 vs. December 31, 2024

Increase (Decrease)

Volume

Rate

Total

Interest Income

Advances

Interest bearing deposits and others

Securities purchased under agreements to resell

Federal funds sold

Investments

Trading securities

Mortgage-backed securities

Fixed

Floating

Available-for-sale Treasuries

State and local housing finance agency obligations

Mortgage loans held-for-portfolio

Loans to other FHLBanks

Total interest income

Interest Expense

Consolidated obligation bonds

Fixed

Floating

Consolidated obligation discount notes

Deposits and borrowings

Mandatorily redeemable capital stock

Total interest expense

Changes in Net Interest Income

For the years ended

December 31, 2024 vs. December 31, 2023

Increase (Decrease)

Volume

Rate

Total

Interest Income

Advances

Interest bearing deposits and others

Securities purchased under agreements to resell

Federal funds sold

Investments

Trading securities

Mortgage-backed securities

Fixed

Floating

State and local housing finance agency obligations

Mortgage loans held-for-portfolio

Loans to other FHLBanks

Total interest income

Interest Expense

Consolidated obligation bonds

Fixed

Floating

Consolidated obligation discount notes

Deposits and borrowings

Mandatorily redeemable capital stock

Total interest expense

Changes in Net Interest Income

Interest Income

Interest income from advances is our principal source of interest income. We also earn interest income from an asset mix of long-term

assets, such as fixed-rate advances, long-term fixed- and floating-rate investments, long-term 15-year and 30-year mortgage loans, and

revenues generated from portfolios of overnight and short-term assets and U.S. Treasury securities held for liquidity.

Reported interest income also includes prepayments fees, primarily fees recorded when advances are prepaid ahead of their contractual

maturities.

The principal categories of Interest Income are summarized below (dollars in thousands):

Table 10.6        Interest Income — Principal Sources

Years Ended December 31,

Percentage

Change

Percentage

Change

Interest Income

Advances

Interest-bearing deposits

Securities purchased under agreements to resell

Federal funds sold

Trading securities

Mortgage-backed securities

Fixed

Floating

Available-for-sale Treasuries

State and local housing finance agency obligations

Mortgage loans held-for-portfolio

Loans to other FHLBanks

Total interest income

NM — Not meaningful.

Interest Income

Interest income in 2025 was $7.2 billion , a decrease of $1.7 billion , or 19.4% compared to 2024 . To provide context, interest expense

decreased by 20.1% compared to 2024 .

For 2025 compared to 2024 , the decrease in interest revenue was due to a volume-related decrease of $0.4 billion and a rate-related

decrease of $1.3 billion . In successive 2025 quarters, we have reported $1.8 billion for first quarter revenue, $1.9 billion for second

quarter revenue, $1.9 billion for third quarter revenue and $1.6 billion for fourth quarter revenue.

Aggregate yield on earning assets in 2025 was 449 basis points, compared to 534 basis points in 2024 .

The more significant revenue categories are discussed below. For information about the effects of changes in rates and business

volume, see Table 9.4 Spread and Yield Analysis and Table 9.5 Rate and Volume analysis.

Advance — Interest income from advances decreased by $1.5 billion or 23.8% in 2025 . Advances average balances were $100.5

billion in 2025 compared to $109.4 billion in 2024 . Total advances to members decreased by $13.5 billion or 12.8% to $92.3 billion at

December 31, 2025 . We ended the year 2025 with par advances at $92.5 billion .

As compared to 2024 , lower market interest rates and lower advances average balances resulted in a $1.5 billion decrease on interest

income from advances. In summary, decreasing market interest rates negatively impacted yields from advances, primarily on

overnight and short-term advances and variable-rate advances that reset to lower rates. Advances yielded 467 basis points in 2025 ,

down from 563 basis points in 2024 . Prepayment fees recorded in Interest income from advances were $11.9 million in 2025 , up from

$4.2 million in 2024 .

Table 10.7        Advances Prepayment Fees (in thousands)

Years Ended December 31,

Gross amount of prepayment fees received from advance borrowers

Gross amount of prepayment credits paid to advance borrowers

Hedging fair value adjustments

Other (a)

Total advance prepayment fees, net

(a)  Recognition of deferred prepayment fees.

Money Market Investments and U.S. Treasury Securities — We derive interest income from maintaining highly-liquid portfolios of

investments to meet liquidity regulatory requirements. Lower interest income from overnight invested funds, specifically federal funds

sold and interest bearing deposits was due to decrease in market yields in 2025 compared to 2024 . Interest income from federal funds

sold was $0.7 billion , down from $1.0 billion . Federal funds sold yielded 432 basis points in aggregate in 2025 , compared to 523 basis

points in 2024 . Interest income from securities purchased under agreement to resell was $314.4 million , up from $250.5 million .

Average balances were $7.5 billion in 2025 , compared to $4.8 billion in 2024 . Securities purchased under agreement to resell yielded

421 basis points in aggregate in 2025 , compared to 524 basis points in 2024 . Interest income from fixed-rate U.S. Treasury securities

was $238.0 million in 2025 , up from $195.7 million in 2024 due to an increase in average balances and increased interest rates; yields

increased to 316 basis points, compared to 310 basis points in 2024 . The liquidity trading portfolio is comprised primarily of medium-

term, highly liquid fixed-rate U.S. Treasury securities that are available to enhance and meet our liquidity objectives. Securities are not

acquired for speculative purposes.

The earnings impact due to changes in market values of the securities outstanding (unrealized gains and losses) and realized gains and

losses on securities sold are recorded in Other income (below the margin) and are noted in Table 10.10 Net Gains (Losses) on Trading

Securities Recorded in the Statements of Income, and discussions thereto. Fixed-rate treasury securities are hedged under economic

hedges utilizing swap contracts to synthetically convert fixed cash flows to variable cash flows. The interest settlements on the swaps

and changes in the fair values of the swap contracts are recorded in Other income (below the margin); our accounting policies require

us to record in Other income the cash flows and fair values on hedging that do not qualify under ASC 815 hedging (economic hedges).

Mortgage-backed-securities

Interest income from floating-rate MBS decreased by $50.8 million or 16.6% in 2025 compared to 2024 due primarily to lower yield.

We will seek to purchase GSE-issued floating-rate SOFR-indexed MBS at appropriate risk-return levels.

Interest income from fixed-rate MBS decreased by $15.2 million or 2.4% in 2025 compared to 2024 due to lower yield, which was

411 basis points in 2025 , down from 431 basis points in 2024 , partially offset by an increase in invested balances. Transaction volume

of fixed-rate MBS, as measured by average outstanding balance was $15.1 billion in 2025 , compared to $14.7 billion in 2024 .

Mortgage loans held-for-portfolio — Interest income from mortgage loans was $98.4 million in 2025 , compared to $81.5 million in

2024 . Investment volume has increased , with acquisitions exceeding paydowns . MPF loans are primarily 15- and 30-year conventional

loans. The portfolio averaged $2.5 billion , yielding 398 basis points in 2025 , compared to 362 basis points in 2024 . We continue to see

prepayments although the pace of which has slowed, causing accelerated amortization of premiums, specifically on 20-year and 30-

year high-balance mortgage loans. Net amortization expense was $4.8 million in 2025 , compared to net amortization of $4.1 million in

2024 . The Bank’s portfolio is largely at a premium price and amortization is sensitive to changes in prepayment speeds particularly in

a volatile interest rate environment. The Bank does not hedge mortgage loans in an ASC 815 hedge or an economic hedge.

As noted in the audited financial statements under Note 1 . Summary of Significant Accounting Policies, we implemented a new

mortgage program, the Mortgage Asset Program in late March 2021. At December 31, 2025 , mortgage loans under MAP were $1.2

billion (par amounts). Effective March 31, 2021, we ceased to accept mortgage commitments to purchase loans under the MPF

program; the MAP became our alternative to MPF. The outstanding MPF portfolio will continue to be serviced and managed under its

existing contractual agreements.

Interest Expense

Our primary source of funding is the issuance of Consolidated obligation bonds and discount notes to investors in the global debt

markets issued through the Office of Finance, the FHLBank’s fiscal agent. Consolidated obligation bonds are generally medium- and

long-term bonds, while Consolidated obligation discount notes are short-term instruments. To fund our assets, our management

considers our interest rate risk and liquidity requirements in conjunction with consolidated obligation buyers’ preferences and capital

market conditions when determining the characteristics of debt to be issued. Typically, we have used fixed-rate callable and non-

callable CO bonds to fund mortgage-related assets and advances. CO discount notes are generally issued to fund advances and

investments with shorter interest rate reset characteristics.

Changes in bond market rates, changes in intermediation volume (average interest-costing liabilities and interest-earning assets), the

mix of debt issuances between CO bonds and CO discount notes, and the impact of hedging strategies are the primary factors that

drive period-over-period changes in interest expense.

Derivative strategies are used to manage the interest rate risk inherent in fixed-rate debt. We execute our strategies by converting the

fixed-rate funding to floating-rate debt using swap contracts indexed to a risk-free benchmark interest rate. Our adopted hedging

benchmarks are SOFR-OIS and Federal Funds-OIS. For ASC 815 qualifying hedges of debt, swap interest settlements and fair value

gains and losses are recorded in interest expense together with the interest expense accrued on the hedged CO debt.

The principal categories of Interest expense are summarized below (dollars in thousands):

Table 10.8        Interest Expense — Principal Categories

Years Ended December 31,

Percentage

Change

Percentage

Change

Interest Expense

Consolidated obligations bonds

Fixed

Floating

Consolidated obligations discount notes

Deposits

Mandatorily redeemable capital stock

Cash collateral held and other borrowings

Securities sold under agreement to repurchase

Total interest expense

Interest expense for 2025 was $6.3 billion , a decrease of 20.1% compared to 2024 . (As noted elsewhere in this document, interest

income decreased by 19.4% compared to 2024 ).

The decrease in interest expense was driven by lower average balances in short-term Consolidated obligations outstanding and lower

market interest rates in 2025 .

Rate-related decrease in funding expense was $1.3 billion and volume-related decrease in funding expense was $0.3 billion in 2025

compared to 2024 . Aggregate yield paid on total funding in 2025 was 418 basis points, compared to 504 basis points in 2024 .

We continue to make changes to our liability composition as compared to 2024 . In 2025 , 32.9% of average total interest-earning assets

were funded by fixed-rate CO bonds and 20.4% were funded by floating-rate CO bonds. In 2024 , fixed-rate CO bonds funded 35.0%

of average total interest-earning assets and floating-rate CO bonds funded 21.7% of average total interest-earning assets. The usage of

CO discount notes has increased to 39.6% in 2025 from 36.2% in 2024 .

Hedging strategies under ASC 815 have remained effective and are operating as designed. For more information, see Table 10.3 Net

Interest Adjustments from Qualifying Hedge Interest Rate Swaps.

Allowance for Credit Losses — 2025 , 2024 and 2023

Allowance for credit losses recorded on mortgage loans in the Statement of Condition was $3.7 million at December 31, 2025 , $3.1

million at December 31, 2024 , and $3.3 million at December 31, 2023 . Allowance for credit losses recorded on investments was $0.1

million at December 31, 2025 , $0.1 million at December 31, 2024 , and $0.6 million at December 31, 2023 . No allowance was

necessary on advances, other assets, and commitments.

Analysis of Non-Interest Income (Loss) — 2025 , 2024 and 2023

The principal components of Non-interest income (loss) are summarized below (in thousands):

Table 10.9        Other Income (Loss)

Years Ended December 31,

Other income (loss)

Service fees and other (a)

Instruments held under the fair value option gains (losses) (b)

Derivative gains (losses) (c)

Securities gains (losses) (d)

Equity investments gains (losses) (e)

Litigation settlement

Gains (losses) from extinguishment of debt

Total other income (loss)

(a) Service fees and other, net — Service fees are from providing correspondent banking services to members, primarily fees earned

on standby financial letters of credit. Letters of credit are generally issued on behalf of members to units of state and local

governments to collateralize their deposits at member banks. Fee income earned on financial letters of credit were $18.9 million

in 2025 compared to $18.8 million in 2024 and $17.3 million in 2023 . Immaterial amounts of fees paid, and other expenses were

included in reported revenues.

(b) FVO Instruments — Net fair value gains and losses represented changes in fair values of CO bonds and CO discount notes

elected under the FVO. For more information, see Fair Value Option Disclosures in Note 18. Fair Values of Financial

Instruments in this Form 10-K.

(c) See Table 10.11 Other Income (Loss) — Impact of Derivative Gains and Losses.

(d) Included in this amount is the gain from the sale of the PLMBS portfolio. See Table 10.10 Net Gains (Losses) on Trading

Securities Recorded in the Statements of Income.

(e) Fair value gains (losses) on Equity investments — The grantor trusts invest in money market, equity and fixed income and bond

funds, and funds are classified as equity investments. Daily net asset values (NAVs) are readily available and investments are

redeemable at short notice. NAVs are the fair values of the funds in the grantor trusts. Gains and losses are typically unrealized,

and primarily represent changes in portfolio valuations. The grantor trusts are owned by the FHLBNY with the objective of

providing liquidity to pay for pension benefits to retirees vested in retirement plans.

The following table summarizes unrealized and realized gains (losses) in the trading portfolio (in thousands):

Table 10.10        Net Gains (Losses) on Trading Securities Recorded in the Statements of Income

Years Ended December 31,

Net unrealized gains (losses) on trading securities held at period-end

Net gains (losses) on trading securities sold/matured during the period

Net gains (losses) on trading securities

We have invested in short- and medium-term fixed-rate U.S. Treasury securities. The securities are not held for speculative trading,

rather held to satisfy liquidity requirements. Fluctuations in valuations are a factor of market demand and market yields of fixed-rate

U.S. Treasury securities. Securities classified as trading are carried at fair values. Changes in unrealized fair values and realized gains

(losses) are recorded in the Statements of Income as Other income. FHFA regulations prohibit trading in or the speculative use of

financial instruments. Par amounts of securities outstanding was $7.6 billion at December 31, 2025 and December 31, 2024 .

Other income (loss) — Derivatives and Hedging Activities — 2025 , 2024 and 2023

For derivatives that are not designated in qualifying hedge relationship (i.e. in an economic hedge), the derivatives are considered as a

“standalone” instrument and fair value changes are recorded in Other income (loss), without the offset of valuation of a hedged item.

Gains and losses recorded in Other income (loss) on standalone derivatives include net interest accruals.

The table presents fair value changes of derivatives in economic hedges (i.e. not in an ASC 815 qualifying hedge) in Other income

(loss):

Table 10.11        Other Income (Loss) — Impact of Derivative Gains and Losses (in thousands)

Impact on Other Income (Loss)

Years Ended December 31,

Derivatives not designated as hedging instruments

Interest rate swaps (a)

Caps or floors

Mortgage delivery commitments

Swaps economically hedging instruments designated under FVO (b)

Accrued interest on derivatives in economic hedging relationships (c)

Net gains (losses) related to derivatives not designated as hedging instruments

Price alignment amount (d)

Net gains (losses) on derivatives and hedging activities

Derivative gains and losses in the table above include both realized and unrealized fair value net gains and losses. Also includes swap

interest settlements on derivatives designated as standalone hedging instruments.

(a) Represents fair value changes recorded in Other income, primarily interest rate swaps in economic hedges of U.S. Treasury fixed-

rate securities recorded fair value losses of $131.3 million , $17.1 million and $116.3 million in 2025 , 2024 and 2023 . The swaps

are structured to mitigate the volatility of price changes of the liquidity portfolio of fixed-rate U.S. Treasury notes.

(b) Represents fair value changes recorded in Other income on interest rate swaps hedging CO debt elected under the FVO.

(c) Represents impact to Other income due to net interest settlements on standalone swap contracts. Net interest settlements are the

interest accruals on swaps primarily in economic hedges of U.S. Treasury securities, debt and advances, and economic hedges of

instruments elected under the FVO.

(d) Relates to derivatives for which variation margin payments are characterized as daily settled contracts.

Operating Expenses, Compensation and Benefits, and Other Expenses  — 2025 , 2024 and 2023

The following table sets forth the major categories of operating expenses (dollars in thousands):

Table 10.12        Operating Expenses, and Compensation and Benefits

Years Ended December 31,

Percentage

of Total

Percentage

of Total

Percentage

of Total

Operating Expenses (a)

Compensation & Benefits

Occupancy

Depreciation

Contractual and Computer Service Agreement

Other Operating Expenses (b)

Total Operating Expenses

Voluntary Contributions

Finance Agency and Office of Finance (c)

Other Expenses (d)

Total Operating Expenses and Others

(a) Operating expenses included the administrative and overhead costs of operating the FHLBNY, as well as the operating costs of

providing advances and managing collateral associated with the advances, managing the investment portfolios, and providing

correspondent banking services to members.

(b) The category “Other Operating Expenses” included temporary workers, contractual services, professional and legal fees, audit

fees, director fees and expenses, insurance, and telecommunications.

(c) We are assessed for our share of the operating expenses for the Finance Agency and the Office of Finance. The FHLBanks and

two other GSEs share the entire cost of the Finance Agency. Expenses are allocated by the Finance Agency and the Office of

Finance.

(d) The category “Other Expense” included non-service elements of net periodic pension benefit costs, MPF transaction fees and

derivative clearing fees.

Assessments  — 2025 , 2024 and 2023

For more information about assessments, see Affordable Housing Program and Other Mission Related Programs and Assessments

under Part I Item 1 Business in this Form 10-K.

The following table provides roll forward information with respect to changes in Affordable Housing Program liabilities (in

thousands):

Table 11.1        Affordable Housing Program Liabilities

Years Ended December 31,

Beginning balance

Additions from current period’s assessments

Voluntary Contribution

Supplemental Contribution

Net disbursements for grants and programs

Ending balance

AHP assessments allocated from net income totaled $66.7 million in 2025 , $82.1 million in 2024 and $83.5 million in 2023 .

Assessments are calculated as a percentage of net income, and the changes in allocations were in tandem with changes in net income.

Voluntary Contributions

The Bank is statutorily required to set aside 10% of its profits to support affordable housing each year. These funds assist members in

serving very low-, low- or moderate-income households. In addition to statutory AHP assessments, the Bank stated in a March 2023

public comment letter to the FHFA that we had targeted making voluntary contributions of approximately 5% of our earnings in

support of affordable housing and community investment initiatives, collectively referred to as voluntary contributions, and committed

to making voluntary contributions representing 5% or more of our prior year earnings beginning in 2024 . For the year ended

December 31, 2025 , the Bank contributed $43.5 million to voluntary housing and community development programs. The $43.4

million commitment represents 5.0% in voluntary contributions as a percentage of 2024 pre-assessment income. In addition, we also

contributed $4.8 million in a supplemental voluntary contribution to AHP for a total amount of $48.3 million in voluntary

contributions.

The following tables provide a summary of the Banks voluntary contribution results for the years ended December 31, 2025 and 2024

(in thousands):

Table 12.1        Voluntary Contribution Commitment and Fulfillment

Years ended December 31,

Voluntary contribution commitment

Voluntary contribution fulfillment

Excess over commitment

Fulfillment, as a % of prior year net income subject to assessment, as adjusted

Voluntary contribution fulfillment

Supplemental voluntary contributions to AHP (a)

Total voluntary contributions, including supplemental contributions to AHP assessment

(a) Because voluntary contributions are recorded as expenses in the income statement, the contributions reduce the Bank’s net

income before assessments. This, in turn, would reduce the statutory AHP assessment. As such, the Bank has committed to a “do

no harm” provision by making a supplemental voluntary contribution to AHP in an amount that would restore the statutory AHP

assessment to the amount it would have been if the Bank had not made the voluntary contributions.

For the year ended December 31, 2025 , the total of statutory AHP assessment expense and voluntary contribution fulfillment,

including the supplemental voluntary contributions to AHP, was $115.0 million .

Table 12.2        Voluntary Housing and Community Investment Expenses

Years ended December 31,

Voluntary AHP expenses

Voluntary supplemental AHP expenses

Affordable Housing

Small Business Recovery Grant

Charitable Contributions

Other

Total voluntary housing & community investment expense

For the years ended December 31, 2025 and 2024 , the Bank expensed $37.3 million and $38.0 million , which consisted of voluntary

AHP contribution expenses, supplemental voluntary AHP contribution expenses, voluntary grants and donations and other community

investment and housing expenses.

Table 12.3        Voluntary Contribution Fulfillment

Years ended December 31,

Voluntary contributions

Interest income

Non-interest expense (a)

Voluntary contribution fulfillment

(a) Excludes $4.8 million of supplemental voluntary contributions to AHP in 2025 .  Because voluntary contributions are recorded as

expenses in the income statement, the contributions reduce the Bank’s net income before assessments. This, in turn, would reduce

the statutory AHP assessment. As such, the Bank has committed to a “do no harm” provision by making a supplemental voluntary

contribution to AHP in an amount that would restore the statutory AHP assessment to the amount it would have been if the Bank

had not made the voluntary contributions.

Figures 12.4 and 12.5 present the composition of the Banks fulfillment of voluntary contributions, by attribute, for the years ended

December 31, 2025 and 2024 .