FHLBank Pittsburgh Net Income Plunges 28% on Lower Advances, Rates

TL;DR

**FHLBank Pittsburgh's earnings are getting squeezed by lower rates and shrinking advances; expect continued pressure on profitability.**

AI Summary

Federal Home Loan Bank of Pittsburgh (FHLBank Pittsburgh) reported a significant decline in net income for Q3 2025, totaling $97.1 million, a 27.75% decrease from $134.4 million in Q3 2024. This reduction was primarily due to lower net interest income, which was impacted by lower average advances and reduced short-term interest rates. For the nine months ended September 30, 2025, net income was $328.9 million, down 24.9% from $437.6 million in the prior-year period. Advances decreased substantially to $42.2 billion at September 30, 2025, a $27.7 billion reduction from $69.9 billion at December 31, 2024. The net interest margin slightly compressed to 68 basis points in Q3 2025 from 69 basis points in Q3 2024. The Bank's total capital also decreased to $4.7 billion from $5.6 billion at year-end 2024, mainly due to lower capital stock resulting from decreased advances. Despite these declines, the Bank maintained an 'adequately capitalized' status and continued to pay quarterly dividends of 9.50% annualized on activity stock and 4.85% annualized on membership stock.

Why It Matters

This filing reveals FHLBank Pittsburgh's significant exposure to interest rate fluctuations and member liquidity demands, impacting its profitability and capital structure. The substantial decrease in advances by $27.7 billion signals a shift in member needs, potentially reflecting broader market liquidity or alternative funding sources for financial institutions in its district. For investors, the decline in net income and capital, though still 'adequately capitalized,' could signal reduced dividend growth potential, despite current strong payouts. The competitive landscape for member funding remains crucial, as FHLBank Pittsburgh's ability to attract and retain advances directly influences its financial health and its role in supporting community lending.

Risk Assessment

Risk Level: medium — The risk level is medium due to significant declines in net income ($37.3 million decrease in Q3 2025 vs Q3 2024) and advances ($27.7 billion decrease from December 31, 2024). While the Bank remains 'adequately capitalized' with $4.7 billion in total capital, its profitability is highly sensitive to interest rate volatility and member demand, as evidenced by the Federal Reserve's rate cuts and the ongoing U.S. Federal government shutdown, which introduces economic uncertainty.

Analyst Insight

Investors should monitor FHLBank Pittsburgh's net interest margin and advance levels closely, as these are key drivers of profitability. Given the sensitivity to interest rates and the flattening yield curve, consider the potential for continued pressure on net interest income. Evaluate the sustainability of dividend payouts in light of declining net income and capital.

Key Numbers

• $97.1M — Net Income Q3 2025 (Decreased by $37.3 million from Q3 2024)
• $328.9M — Net Income YTD Sep 2025 (Decreased by $108.7 million from YTD Sep 2024)
• $42.2B — Advances at Sep 30, 2025 (Decreased by $27.7 billion from Dec 31, 2024)
• 68 bps — Net Interest Margin Q3 2025 (Slightly decreased from 69 bps in Q3 2024)
• $4.7B — Total Capital at Sep 30, 2025 (Decreased by $0.9 billion from Dec 31, 2024)
• 4.35% — Avg Yield on Securities Purchased Under Agreements to Resell Q3 2025 (Decreased from 5.33% in Q3 2024)
• 4.81% — Avg Yield on Advances Q3 2025 (Decreased from 5.73% in Q3 2024)
• 4.30% — Avg Rate on Total Interest-Bearing Liabilities Q3 2025 (Decreased from 5.19% in Q3 2024)
• 9.50% — Annualized Dividend on Activity Stock (Paid in October 2025 for Q3 2025)
• 4.85% — Annualized Dividend on Membership Stock (Paid in October 2025 for Q3 2025)

Key Players & Entities

• Federal Home Loan Bank of Pittsburgh (company) — registrant
• SEC (regulator) — Securities and Exchange Commission
• Federal Reserve (regulator) — central bank influencing interest rates
• Federal Housing Finance Agency (regulator) — regulator determining capital adequacy
• $97.1 million (dollar_amount) — net income for Q3 2025
• $134.4 million (dollar_amount) — net income for Q3 2024
• $42.2 billion (dollar_amount) — total advances at September 30, 2025
• $69.9 billion (dollar_amount) — total advances at December 31, 2024
• $4.7 billion (dollar_amount) — total capital at September 30, 2025
• $5.6 billion (dollar_amount) — total capital at December 31, 2024

FAQ

Risk Factors

• Economic and Market Volatility [high — market]: The Bank faces risks from economic and market conditions, including volatility in real estate, credit, and mortgage markets. This is exacerbated by geopolitical events like ongoing hostilities and political uncertainties affecting global trade, which can impact market prices, rates, and financial instruments.
• Regulatory and Judicial Actions [high — regulatory]: Changes in executive, legislative, regulatory, and judicial events and actions can significantly affect the Bank, its members, counterparties, and other FHLBanks. These actions can alter the operating environment and financial stability.
• Credit Loss Assumptions and Investment Risks [medium — financial]: The Bank is exposed to risks related to its investments, particularly mortgage-backed securities (MBS). Changes in the assumptions used to estimate credit losses can materially impact financial results.
• Interest Rate and Capital Market Disruptions [high — market]: Volatility in market rates and potential disruptions in capital markets pose risks. Changes in investor demand for FHLBank debt and the ability to enter financial instruments for risk management goals are critical factors.
• Technology and Cybersecurity Risks [medium — operational]: The Bank faces significant technology and cybersecurity risks, including those driven by artificial intelligence. These risks could lead to operational disruptions and financial losses.
• Advances and Capital Stock Fluctuations [high — financial]: A substantial decrease in advances to $42.2 billion from $69.9 billion at year-end 2024 has led to a reduction in capital stock, impacting total capital to $4.7 billion. This decline in advances directly affects the Bank's capital structure and membership composition.
• Consolidated Obligations Liability [high — financial]: The Bank has joint and several liability for consolidated obligations issued by other FHLBanks. The ability of each FHLBank to repay principal and interest on these obligations is a critical financial risk.
• Interest Rate Environment Impact on Net Income [high — market]: Lower average advances and reduced short-term interest rates led to a 27.75% decline in net income for Q3 2025 to $97.1 million. The net interest margin slightly compressed to 68 basis points from 69 basis points year-over-year.

Industry Context

Federal Home Loan Banks (FHLBanks) operate in a unique, regulated environment, providing liquidity and credit to member financial institutions, primarily community banks. The industry is characterized by its role in supporting housing finance and community development. Competition comes from other funding sources available to banks, such as brokered deposits and the Federal Funds market. Current trends include navigating a higher interest rate environment and managing balance sheet risks associated with fluctuating member demand for credit.

Regulatory Implications

As a government-sponsored enterprise (GSE), FHLBanks are subject to oversight by the Federal Housing Finance Agency (FHFA). Regulatory actions, changes in capital requirements, and compliance with evolving standards are critical. The Bank's 'adequately capitalized' status indicates compliance, but ongoing monitoring of regulatory developments is essential.

What Investors Should Do

1. Monitor trends in member advances and demand for credit.
2. Analyze the impact of interest rate movements on net interest margin.
3. Assess the Bank's capital adequacy and dividend sustainability.
4. Evaluate the Bank's risk management strategies for market and cybersecurity risks.

Key Dates

• 2025-09-30: FHLBank Pittsburgh's Q3 2025 reporting period ends — Key financial metrics for the quarter and year-to-date are established, showing a decline in net income and advances.
• 2025-10-01: Quarterly dividends paid for Q3 2025 — Demonstrates continued commitment to returning value to members and shareholders despite reduced profitability, with annualized rates of 9.50% on activity stock and 4.85% on membership stock.
• 2025-03-05: FHLBank Pittsburgh's 2024 Form 10-K filed — Provides comprehensive annual financial information and risk factors, serving as a reference for the current 10-Q filing.

Glossary

Advances

Loans made by the FHLBank to its member institutions. (A primary source of revenue and a key driver of the Bank's balance sheet. A significant decrease in advances to $42.2 billion impacts net income and capital.)

Net Interest Income

The difference between the interest income generated by the Bank and the interest expense paid on its liabilities. (The primary driver of profitability. Lower net interest income due to reduced advances and lower rates significantly impacted Q3 2025 net income.)

Net Interest Margin (NIM)

A measure of the difference between the interest income generated by the Bank and the interest paid out on its liabilities, expressed as a percentage of interest-earning assets. (Indicates the Bank's profitability on its lending and investment activities. A slight compression to 68 basis points in Q3 2025 reflects pressure on earnings.)

Capital Stock

Represents ownership in the FHLBank, held by its member institutions. The amount of capital stock is generally tied to the level of advances received. (Decreased to support lower advances, impacting the Bank's total capital. This is a direct consequence of reduced member borrowing.)

Consolidated Obligations

Debt securities issued by the FHLBank System as a whole, for which individual FHLBanks are jointly and severally liable. (Represents a significant portion of the Bank's funding. The creditworthiness of all FHLBanks is interconnected through these obligations.)

Activity Stock

A class of capital stock in an FHLBank that is typically purchased by members based on their use of the Bank's services, such as advances. (The Bank pays a higher annualized dividend (9.50%) on this stock, reflecting its direct link to member activity and the Bank's core business.)

Membership Stock

A class of capital stock in an FHLBank that is typically held by members as a requirement for membership, regardless of their level of activity. (The Bank pays a lower annualized dividend (4.85%) on this stock, reflecting its more passive nature compared to activity stock.)

Year-Over-Year Comparison

Compared to the prior year, FHLBank Pittsburgh experienced a substantial decline in financial performance. Net income for Q3 2025 fell by 27.75% to $97.1 million, and year-to-date net income decreased by 24.9% to $328.9 million. This was driven by a significant drop in advances, which fell by $27.7 billion from year-end 2024 to $42.2 billion, leading to lower net interest income. Total capital also decreased by $0.9 billion to $4.7 billion. The net interest margin saw a slight compression from 69 bps to 68 bps, reflecting the challenging interest rate environment.

Key Financial Figures

• $100 — res of common stock with a par value of $100 per share outstanding at October 31, 20
• $97.1 m — e for the third quarter of 2025 totaled $97.1 million, compared to $134.4 million for t
• $134.4 million — 2025 totaled $97.1 million, compared to $134.4 million for the third quarter of 2024. The $37.
• $37.3 million — lion for the third quarter of 2024. The $37.3 million decrease was driven primarily by lower
• $328.9 m — 30, 2025, the Bank's net income totaled $328.9 million, compared to $437.6 million for t
• $437.6 million — ome totaled $328.9 million, compared to $437.6 million for the same prior-year period. The $10
• $108.7 million — ion for the same prior-year period. The $108.7 million decrease was driven by lower net intere
• $10.8 million — 2024. Statutory AHP assessments were $10.8 million as a result of third quarter 2025 earni
• $15.0 million — hird quarter 2025 earnings, compared to $15.0 million in the same three month prior-year peri
• $36.6 million — period. Statutory AHP assessments were $36.6 million as a result of third quarter 2025 earni
• $48.8 million — hird quarter 2025 earnings, compared to $48.8 million in the same nine month prior-year perio
• $35.3 million — estment products, a committed target of $35.3 million for 2025. In addition, FHLBank will con
• $42.2 billion — l Condition. Advances. Advances totaled $42.2 billion at September 30, 2025 a decrease of $27
• $27.7 billion — ion at September 30, 2025 a decrease of $27.7 billion compared to $69.9 billion at December 3
• $69.9 billion — a decrease of $27.7 billion compared to $69.9 billion at December 31, 2024. In addition, the

Filing Documents

• fhlbpgh-20250930.htm (10-Q) — 2848KB
• fhlbpitex3113q2025q.htm (EX-31.1) — 15KB
• fhlbpitex3123q2025q.htm (EX-31.2) — 15KB
• fhlbpitex3213q2025q.htm (EX-32.1) — 8KB
• fhlbpitex3223q2025q.htm (EX-32.2) — 8KB
• 0001330399-25-000040.txt ( ) — 12982KB
• fhlbpgh-20250930.xsd (EX-101.SCH) — 62KB
• fhlbpgh-20250930_cal.xml (EX-101.CAL) — 95KB
• fhlbpgh-20250930_def.xml (EX-101.DEF) — 572KB
• fhlbpgh-20250930_lab.xml (EX-101.LAB) — 777KB
• fhlbpgh-20250930_pre.xml (EX-101.PRE) — 688KB
• fhlbpgh-20250930_htm.xml (XML) — 2336KB

- FINANCIAL INFORMATION 1

Part I - FINANCIAL INFORMATION 1

: Financial Statements (unaudited) 32

Item 1: Financial Statements (unaudited) 32

Notes to Financial Statements (unaudited)

Notes to Financial Statements (unaudited) 38 Note 1 - Changes in Accounting Principle and Recently Issued Accounting Standards and Interpretations 39 Note 2 – Investments 40 Note 3 – Advances 44 Note 4 – Mortgage Loans Held for Portfolio 46 Note 5 – Derivatives and Hedging Activities 50 Note 6 - Consolidated Obligations 55 Note 7 - Capital 57 Note 8 - Transactions with Related Parties 60 Note 9 - Estimated Fair Value 61 Note 10 - Commitments and Contingencies 66

: Management's Discussion and Analysis of Financial Condition and Results of Operations 1

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 1 Risk Management 20

: Quantitative and Qualitative Disclosures about Market Risk 67

Item 3: Quantitative and Qualitative Disclosures about Market Risk 67

: Controls and Procedures 67

Item 4: Controls and Procedures 67

- OTHER INFORMATION 67

Part II - OTHER INFORMATION 67

: Legal Proceedings 67

Item 1: Legal Proceedings 67

: Risk Factors 67

Item 1A: Risk Factors 67

: Unregistered Sales of Equity Securities and Use of Proceeds 67

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 67

: Defaults upon Senior Securities 67

Item 3: Defaults upon Senior Securities 67

: Mine Safety Disclosures 67

Item 4: Mine Safety Disclosures 67

: Other Information 67

Item 5: Other Information 67

: Exhibits 68

Item 6: Exhibits 68 Signatures 68 i

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

: Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Information This Form 10-Q includes "forward-looking statements". Such statements may include descriptions of the objectives, projections, estimates, or predictions of the future of the Federal Home Loan Bank of Pittsburgh (the Bank). Such statements do not relate strictly to historical or current facts. They often use words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," "likely," and similar expressions. Forward-looking statements involve risks and uncertainties, and as such, actual results could differ materially from those that the statements express or imply due to factors such as: economic and market conditions, including, but not limited to, conditions in real estate, credit and mortgage markets; volatility of market prices, rates, and indices related to financial instruments; natural or man-made disasters, pandemics, climate change, conflicts or terrorist attacks or other geopolitical events, such as ongoing hostilities between Russia and Ukraine and in the Middle East; political uncertainties related to global trade policies, supply chain disruptions and tariff tensions; executive, legislative, regulatory, and judicial events and actions that affect the Bank, its members, counterparties, other Federal Home Loan Banks (FHLBanks) or investors in FHLBank debt; risks related to the Bank's investments, including investments in mortgage-backed securities (MBS); changes in the assumptions used to estimate credit losses; changes in the Bank's ability to introduce new products and services to meet market demand; changes in the Bank's: credit rating, capital structure, capital requirements, membership composition, membership's demand for advances and other products, and competitive environment; changes in expectations regarding the Bank's payment of dividends; increases in advances prepayment

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