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The following table summarizes our members by type of institution:

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Business Segments

We manage our operations as a single business segment. Management and our Board of Directors review enterprise-wide financial information in order to make operating decisions and assess performance.

Our cooperative structure permits us to expand and contract with demand for advances and changes in membership. When advances are paid down, because the member no longer needs the funds or because the member has been acquired by a non-member and the former member decides to prepay advances, the stock associated with the advances is subject to immediate redemption in our sole discretion. When advances are paid before maturity, we collect fees that make us financially indifferent to the prepayment. Our operating expenses are low. Dividend capacity, which is a function of net income and the amount of stock outstanding, is largely unaffected by the prepayment since future stock and future income are reduced more or less proportionately. We believe that we will be able to meet our financial obligations and continue to deliver balanced value to members, even if advance demand contracts or if membership declines.

Products and Services

Introduction — Advances to members are the primary focus of our operations and are also the principal factor that impacts our financial condition. Revenues from advances to members are the largest and the most significant element in our operating results. Providing advances to members, supporting the products, and associated collateral and credit operations, and funding and swapping the funds are the focus of our operations.

We offer our members several correspondent banking services as well as safekeeping services. The fee income that is generated from these services is not significant. We also issue standby letters of credit on behalf of members for a fee. The total income derived from all such sources, and other incidental income and expenses were not material in the periods in this report.

We provide our members with an alternative to originating and selling long-term, fixed-rate mortgages in the secondary market. We accomplish this by purchasing eligible conforming fixed-rate mortgages originated or purchased by our members. Purchases are at negotiated market rates. For more information, see Acquired Member Assets Programs below and in the financial statements, Note 10. Mortgage Loans Held-for-Portfolio.

Advances

We offer a wide range of credit products to help members meet local credit needs, manage interest rate and liquidity risk, and serve their communities. Our primary business is making secured loans, called advances, to members. These advances are available as short- and long-term loans with adjustable, variable, and fixed-rate features (including option-embedded and amortizing advances).

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Members use advances as a source of funding to supplement their deposit gathering activities. Advances borrowed by members have generally increased over the last decade because many members have not been able to increase their deposits in their local markets as quickly as they have increased their assets. To close this funding gap, members have preferred to obtain reasonably priced advances rather than increasing their deposits by offering higher rates or foregoing asset growth. Because of the wide range of advance types, terms, and structures available to them, members have also used advances to enhance their asset/liability management. As a cooperative, we price advances at minimal net spreads above the cost of our funding in order to deliver more value to members.

Letters of Credit

We may issue standby financial letters of credit on behalf of members to facilitate members’ residential and community lending, provide members with liquidity, or assist members with asset/liability management. Where permitted by law, members may utilize FHLBNY letters of credit to collateralize deposits made by units of state and local governments. Our underwriting and collateral requirements for securing letters of credit are the same as our requirements for securing advances.

Derivatives

To assist members in managing their interest rate and basis risks in both rising and falling interest-rate environments, we will act as an intermediary between the member and derivatives counterparty. We do not act as a dealer and view this as an additional service to our members. Participating members must comply with our documentation requirements and meet our underwriting and collateral requirements. Volume of such requests has been insignificant.

Acquired Member Assets Programs

Utilizing a risk-sharing structure, the FHLBanks are permitted to acquire certain assets from or through their members. These initiatives are referred to as Acquired Member Assets (AMA) programs. At the FHLBNY, the Acquired Member Assets initiatives are the Mortgage Partnership Finance (MPF) Program and Mortgage Asset Program (MAP),MAP, which provides members with an alternative to originating and selling long-term, fixed-rate mortgages in the secondary market. These programs are managed and funded in a consistent manner. In the MPF Program, we purchasepurchased conforming fixed-rate mortgages originated or purchased by our members. Members are then paid a fee for assuming a portion of the credit risk of the mortgages that we acquired. Members assume credit risk by providing a credit enhancement to us or providing and paying for a supplemental mortgage insurance policy insuring us for some portion of the credit risk involved. Prior to June 1, 2017, the MPF mortgage loans acquired were credit enhanced to a double-A equivalent level of creditworthiness. For loans acquired after June 1, 2017, the credit enhancement is computed to a “Single A” credit risk. The amount of this credit enhancement is fully collateralized by the member. We assume the remainder of the credit risk along with the interest rate risk of holding the mortgages in the MPF loan portfolio.

The Bank introduced the new AMA investment program, MAP in the fourth quarter of 2020. MAP purchases are investment grade, conforming one-to-four family or government insured long-term, fixed-rate home mortgages. MAP, like MPF, is structured to provide secondary mortgage market liquidity to the selling member, the participating financial institution (PFI).

MAP was fully rolled out in March 2021, at which time we stopped purchasing MPF loans. Legacy MPF loans will remain on the FHLBNY’s balance sheet and will continue to be supported by the FHLBNY and the FHLBank of Chicago as MPF Provider.

Income from both MPF and MAP are derived primarily from the difference, or spread, between the yield on the purchased mortgage loans and the borrowing cost of Consolidated obligations.

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We do not service the mortgage loans we purchase under MPF and MAP. PFIs may elect to retain servicing rights for the loans sold to us, or they may elect to sell servicing rights to a FHLBNY approved servicer. We do not pay a PFI any fees other than the servicing fee when the PFI retains the servicing rights. We closely monitor the servicers because we are exposed to credit and operational risk if they fail to properly perform.

It is the servicer’s responsibility to initiate claims for losses on the loans. If a loss is expected, no claims are settled until the claim has been reviewed and approved by the FHLBNY. Under MAP, the MPA first absorbs the credit loss after a homeowner’s equity, and if applicable, private mortgage insurance has first been exhausted. If the MPA has been depleted, based on our contractual arrangement, the FHLBNY takes the ultimate credit loss, and the servicer is reimbursed for an approved claim amount.

Under its current housing goals regulation, the Finance Agency establishes low-income housing goals for the FHLBNY for conventional mortgages purchased through the AMA programs. If we do not meet any affordable housing goals established by the Finance Agency, we may be required to submit a housing plan to the Finance Agency.

The Acquired Member Assets Regulation does not specifically address the disposition of Acquired Member Assets. The main intent of that regulation is the purchase of assets for investment rather than for trading purposes. The FHLBNY’s present intent for MPF and MAP is to hold these investmentinvestments in portfolio. However, the FHLBanks have the legal authority to sell Mortgage Partnership Finance loans and MAP loans pursuant to the granting of incidental powers in Section 12 of the FHLBank Act. Section 12(a) of the FHLBank Act specifically provides that each FHLBank shall have all such incidental powers, not inconsistent with the provisions of this chapter, as are customary and usual in corporations generally. General corporate law principles permit the sale of investments.

For additional discussion on our mortgage loans and their related credit risk, see financial statements, Note 10. Mortgage Loans Held-for-Portfolio. Also see Tables 5.1 to 5.3 and accompanying discussions in this MD&A.

Correspondent Banking Services

We offer our members an array of correspondent banking services, including depository services, wire transfers, settlement services, and safekeeping services. Depository services include processing of customer transactions in “Overnight Investment Accounts,” the interest-bearing demand deposit account each customer has with us. All customer-related transactions (e.g. deposits, Federal Reserve Bank settlements, advances, securities transactions, and wires) are posted to these accounts each business day. Wire transfers include processing of incoming and outgoing domestic wire transfers, including third-party transfers. Settlement services include automated clearinghouse and other transactions received through our accounts at the Federal Reserve Bank as correspondent for members and passed through to our customers’ Overnight Investment Accounts with us. Through a third party, we offer customers a range of securities custodial services, such as settlement of book entry (electronically held) and physical securities. We encourage members to access these products through 1Link^sm, an Internet-based delivery system we developed as a proprietary service. Members access the 1Link system to obtain account activity information or process wire transfers, book transfers, security safekeeping and advance transactions.

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See financial statements, Note 13. Affordable Housing Program for assessments allocated from earnings for the periods in this report.

Investments

We maintain portfolios of investments to provide additional earnings and for liquidity purposes. Investment income also bolsters our capacity to fund Affordable Housing Program projects, and to cover operating expenditures. To help ensure the availability of funds to meet member credit needs, we maintain interest-bearing deposits and portfolios of short-term investments issued by highly-rated, high credit quality financial institutions. The investments may include overnight Federal funds, term Federal funds, securities purchased under agreements to resell, and we are a major lender in this market, particularly in the overnight market. We further enhance our interest income by holding long-term investments classified as either held-to-maturity or as available-for-sale. These portfolios primarily consist of mortgage-backed securities issued by government-sponsored mortgage enterprises. Our long-term investments also include a small portfolio of privately issued mortgage-backed and residential asset-backed securities that were primarily acquired prior to 2006, bonds issued by housing finance agencies, and Grantor Trust owned by the FHLBNY that invests in mutual funds. We have a liquidity trading portfolio invested primarily in highly-liquid U.S. Treasury securities to enhance our short-term liquidity positions. The trading portfolio is not for speculative purposes.

For more information, see financial statements, Note 4. Interest-bearing Deposits, Federal Funds Sold and Securities Purchased Under Agreements to Resell, Note 5. Trading Securities, Note 6. Equity Investments, Note 7. Available-for-Sale Securities and Note 8. Held-To-Maturity Securities. Also see Tables 4.1 through 4.9 and accompanying discussions in this MD&A.

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Finance Agency regulations state that the FHLBanks must maintain, free from any lien or pledge, qualifying assets at least equal to the face amount of Consolidated obligations outstanding. Qualifying assets are defined as cash; secured advances; assets with an assessment or rating at least equivalent to the current assessment or rating of the Consolidated obligations; obligations of or fully guaranteed by the United States, obligations, participations, or other instruments of or issued by Federal National Mortgage Association (Fannie Mae) or the Government National Mortgage Association (Ginnie Mae); mortgages, obligations, or other securities which are or ever have been sold by the Federal Home Loan Mortgage Corporation (Freddie Mac) under the FHLBank Act; and such securities as fiduciary and trust funds may invest in under the laws of the state in which the FHLBank is located. Any assets subject to a lien or pledge for the benefit of holders of any issue of Consolidated obligations are treated as if they were free from lien or pledge for purposes of compliance with these regulations.

Consolidated obligations are distributed through dealers selected by the Office of Finance using various methods including competitive auction and negotiations with individual or syndicates of underwriters. Some debt issuance is in response to specific inquiries from underwriters. Many Consolidated obligations are issued with the FHLBank concurrently entering into derivatives agreements, such as interest rate swaps. To facilitate issuance, the Office of Finance may coordinate communication between underwriters, individual FHLBanks, and financial institutions executing derivative agreements with the FHLBanks. Issuance volume is not concentrated with any particular underwriter.

The Office of Finance is mandated by the Finance Agency to ensure that Consolidated obligations are issued efficiently and at the lowest all-in cost of funds over time. If the Office of Finance determines that its action is consistent with its Finance Agency’s mandated policies, it may reject our issuance request, and the requests of other FHLBanks, to raise funds through the issuance of Consolidated obligations on particular terms and conditions. We have never been denied access under this policy for all periods reported. The Office of Finance serves as a source of information for the FHLBanks on capital market developments and manages the FHLBanks’ relationship with the rating agencies with respect to the Consolidated obligations.

Consolidated Obligation Liabilities

Each FHLBank independently determines its participation in each issuance of Consolidated obligations based on (among other factors) its own funding and operating requirements, maturities, interest rates, and other terms available for Consolidated obligations in the market place.market. The FHLBanks have emphasized diversification of funding sources and channels as the need for funding from the capital markets has grown.

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Consolidated Obligation Discount Notes. Discount notes may be offered into the market through the “discount note window”, or through regularly scheduled competitive auctions. These CO discount notes have a maturity range of one day to one year, are generally issued at or below par, and mature at par.

Deposits

The FHLBank Act allows us to accept deposits from its members, other FHLBanks and government instrumentalities. For us, member deposits are also a source of funding, but we do not rely on member deposits to meet our funding requirements. For members, deposits are a low risk earning asset that may satisfy their regulatory liquidity requirements. We offer several types of deposit programs to our members, including demand and term deposits.

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Retained Earnings and Dividends

The Bank’s Retained Earnings and Dividends policy (the Policy) is a Board approved policy, the objectives of which are to preserve the value of our members’ investment with us, and to provide members with a reasonable dividend. The Policy also states that we want to provide returns on the investment in the Bank’s stock that are sufficient to attract and retain members, and that do not discourage member borrowing. The Bank’s minimum level of retained earnings provides management with a high degree of confidence that estimable losses under simulated stressful conditions and scenarios will not impair paid-in capital, thereby preserving the par value of the stock. Additionally, Unrestricted Retained Earnings should be available to supplement dividends when earnings are low, or losses occur. Our ability to pay dividends and any other distributions may be affected by standards under the Policy.

The Policy establishes (1) a minimum level of Retained Earnings equal to the Bank’s “Retained Earnings Sufficiency”, which is the FHLBNY’s measure of estimating the Bank’s risk exposures; it is estimated under simulated stressful conditions and scenarios, within a defined confidence interval, on market, credit and operational risks, as well as GAAP accounting exposures related to the fair values of certain financial instruments; (2) the priority of contributions to retained earnings relative to other distributions of income; (3) the target level of Retained Earnings, based on the Retained Earnings Sufficiency level; (4) a timeline to achieve the targets and to ensure maintenance of appropriate levels of Retained Earnings.

The Bank may pay dividends from Unrestricted Retained Earnings and current net income. Per Finance Agency regulations, our Board of Directors may declare and pay dividends in either cash or capital stock; our practice has been to pay dividends in cash. Our dividends and our dividend policy are subject to Federal Housing Finance Agency regulations and policies. Any dividend payments declared by our Board are a function of these policies, and our financial condition and performance.

To achieve the Bank’s strategic plans and business objectives within the Bank’s risk appetite, the Board-approved Retained Earnings target was $1,791 million for 2022 and $1,885 million for 2021 (including $770 million of Restricted retained earnings (RRE) allocated to Risk Bearing Capacity) and $1,812 million for 2020.2021. For more information about Restricted retained earnings, see Table 7.1 Stockholder’s Capital in this MD&A.

Unrestricted Retained Earnings was $1,103.6$1,185.1 million and $1,135.3$1,103.6 million at December 31, 20212022 and 2020,2021, respectively. Restricted Retained Earnings was $827.4$910.9 million and $774.3$827.4 million at the two dates. The balance in Accumulated Other Comprehensive Income (AOCI), a component of stockholder’s equity, were losses of $136.3 million and gains of $14.1 million and losses of $19.7 million at December 31, 20212022 and 2020,2021, respectively. At December 31, 20212022 and 2020,2021, our actual retained earning balances exceeded the required Bank’s Retained Earnings Sufficiency level and was in compliance with the Retained Earnings and Dividend Policy.

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Since November 2018, the FHLBank System has been a major participant in the issuance of floaters using the LIBOR replacement index, the Secured Overnight Financing Rate (SOFR). SOFR-floatersSOFR floaters are a major source of funding for the System and will continue to be as issuance grows and a broader derivativederivatives market develops in anticipation of a cessation of LIBOR. See LIBOR replacement discussions in Item 1A. Risk Factors.

We compete for the purchase of mortgage loans held-for-sale.in the secondary mortgage market. For single-family products, competition is primarily with Fannie Mae and Freddie Mac, principally on the basis of price, products, structures, and services offered.

Competition for certain aspects of the FHLBank business model among the 11 FHLBanks is limited, although a bank holding company with multiple banking charters may operate in more than one FHLBank’s district. If the member has a centralized treasury function, it is possible that there could be competition for advances. A limited number of our member institutions are subsidiaries of financial holding companies with multiple charters and FHLBank memberships. The amount of advances borrowed by these entities and the amount of capital stock held, could be material to the business. Certain large member financial institutions operating in our district may borrow unsecured Federal funds or source deposits from other FHLBanks. We are permitted by regulation to purchase short-term investments from our members, though we choose to not permit members to borrow unsecured funds from us.

Oversight, Audits, and Examinations

Our business is subject to extensive regulation and supervision. The laws and regulations to which we are subject cover all key aspects of our business, and directly and indirectly affect our product and service offerings, pricing, competitive position and strategic plan, relationship with members and third parties, capital structure, cash needs and uses, and information security. As a result, such laws and regulations have a significant effect on key drivers of our results of operations, including, for example, our capital and liquidity, product and service offerings, risk management, and costs of compliance. An overview of our regulatory environment is discussed below.

The Federal Housing Finance Agency (Finance Agency or FHFA), an independent agency in the executive branch of the U.S. government, supervises and regulates the FHLBanks. The Housing Act created the FHFA with regulatory authority over FHLBank matters such as: Board of Director composition, executive compensation, risk-based capital standards and prompt corrective action enforcement provisions, membership eligibility, and low-income housing goals. The FHFA’s mission, with respect to the FHLBanks, is to ensure that the FHLBanks operate in a safe and sound manner so that the FHLBanks serve as a reliable source of liquidity and funding for housing finance and community investment.

We carry out our statutory mission only through activities that comply with the rules, regulations, guidelines, and orders issued under the Federal Housing Enterprises Financial Safety and Soundness Act, the Housing Act and the FHLBank Act.

Our shares of Class B stock are registered with the SEC under the Exchange Act, and we are subject to the information, disclosure, insider trading restrictions and other requirements under the Exchange Act. We are not subject to the provisions of the Securities Act.

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The Comptroller General has authority under the FHLBank Act to audit or examine the Finance Agency and the FHLBanks, including the FHLBNY, and to decide the extent to which they fairly and effectively fulfill the purpose of the FHLBank Act. Furthermore, the Government Corporation Control Act provides that the Comptroller General may review any audit of our financial statements conducted by a registered independent public accounting firm. If the Comptroller General conducts such a review, then he or she must report the results and provide his or her recommendations to Congress, the Office of Management and Budget and the Bank. The Comptroller General may also conduct his or her own audit of any of our financial statements.

For a discussion regarding the risks related to our regulatory environment, see the description of “Risk Factors — Legislative and Regulatory Risks” in Part I, Section 1A of this Form 10-K, and for a discussion of recent regulatory developments that may impact the Bank, see “Management’s Discussion and Analysis — Legislative and Regulatory Developments” in Part II, Item 7 of this Form 10-K.

Tax Status

The FHLBanks, including the FHLBNY, are exempt from ordinary federal, state, and local taxation except for real property taxes.

Assessments

Affordable Housing Program (AHP) Assessments. — Section 10(j) of the FHLBank Act requires each FHLBank to establish an Affordable Housing Program. Each FHLBank provides subsidies in the form of direct grants and below-market interest rate advances to members who use the funds to assist in the purchase, construction, or rehabilitation of housing for very low-, low-, and moderate-income households. Annually, the FHLBanks must allocate for the AHP the greater of $100 million or 10% of regulatory net income. Regulatory net income is defined as GAAP net income before interest expense related to mandatorily redeemable capital stock and the assessment for Affordable Housing Program. The exclusion of interest expense related to mandatorily redeemable capital stock is a regulatory interpretation of the Finance Agency. We accrue the AHP expense monthly.

We charge the amount allocated for the Affordable Housing Program to income and recognize the amounts allocated as a liability. We relieve the AHP liability as members use subsidies. In periods where our regulatory income before Affordable Housing Program is zero or less, the amount of AHP liability is equal to zero. If the result of the aggregate 10% calculation described above is less than $100 million for all 11 FHLBanks, then the Act requires the shortfall to be allocated among the FHLBanks based on the ratio of each FHLBank’s income before Affordable Housing Program to the sum of the income before Affordable Housing Program of the 11 FHLBanks. There were no shortfalls in 2022, 2021 2020 and 2019.2020.

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Total Rewards

The Bank seeks to attract, develop, engage and retain talented employees to achieve its strategic business initiatives, enhance business performance and increase shareholder value. The Bank effects this objective through a combination of inclusion and development programs, benefits and employee wellness programs and recognizing and rewarding performance. Specifically, the Bank’s programs include:

The Bank’s Performance Management framework includes a mid-year checkpoint, as well as an annual performance review. Overall annual ratings are calibrated and merit and incentive payments are differentiated for the Bank’s highest performers.

The Bank is committed to the health, safety and wellness of its employees. In response to the COVID-19 pandemic, the Bank has implemented significant operating environment changes, safety protocols and procedures that it determined were in the best interest of the Bank’s employees and members, and which complied with government regulations, including having employees work remotely during portions of the pandemic, and implementing an employee vaccination requirementpandemic. We continue to operate the Bank with a hybrid remote work arrangement for on-site work.employees.

TableThe Bank considers culture as a strategic lever that acts to help support the future performance of Contentsthe Bank and enhance employee engagement and inclusion, and further develop our people. The Bank has defined its culture state priorities as: obtaining results, operating safely, fostering agility and caring about employees. These culture state priorities align with the mission, vision and core values of the Bank. As part of our culture management efforts, we actively provide employees across the Bank with growth opportunities, access and exposure so that they can learn and develop their capabilities. To further this effort, in 2022, the Bank launched its 'Distributed Leadership' framework, through which managers provide their direct reports with targeted opportunities to take on "stretch" assignments, including roles in connection with Bank initiatives and projects.

Available Information

The Federal Home Loan Bank of New York maintains a website located at www.fhlbny.com where we make available our annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission (the SEC), and other information regarding us and our products free of charge. We are required to file with the SEC an annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. The SEC maintains a website that contains these reports and other information regarding our electronic filings located at www.sec.gov. Information on these websites, or that can be accessed through these websites, does not constitute a part of this annual report.

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The extent to which the COVID-19 pandemic continues to affect our business, financial condition, and results of operations will depend on many factors that remain highly uncertain and difficult to predict, including, but not limited to: the duration, spread, and severity of the pandemic; additional fiscal or monetary policy, or other measures taken in response to the pandemic, or the expiration or reversal of prior measures; the actions taken to contain the pandemic, including the effectiveness of related vaccines and therapeutics; and how quickly and to what extent normal economic and operating conditions can resume.

A prolonged downturn in the economy, including the U.S. housing market, and related U.S. government monetary 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 or the unemployment rate increases, 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 our member defaults. Deterioration in the residential mortgage markets could also affect the value of collateral supporting our mortgage loan portfolio, increasing the risk of loss due to credit impairment, as well as possible realized losses if we are forced to liquidate our assets.

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 our 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, war (such as the current Ukraine - Russia war), governmental sanctions, natural disasters, pandemics or other widespread health emergencies (such as the COVID-19 pandemic), terrorist attacks, civil unrest, geopolitical instability or conflicts (including the prolonged hostilities between Russia and Ukraine), trade disruptions, economic or other sanctions, or other unanticipated or catastrophic events could create economic and financial disruptions and uncertainties, which may lead to reduced demand for advances and an increased risk of credit losses for the Bank and may adversely affect ourtheir cost of funding or access to funding. These events may also lead to operational difficulties that could adversely affect ourthe ability of the Bank to conduct and manage our business.their businesses. Any of these factors could adversely affect our business activities and results of operations.

In addition, our businessthe Banks businesses and results of operations are significantly affected by the monetary policies of the U.S. government and ourits agencies, including the Federal Reserve. The Federal Reserve Board’s policies directly and indirectly influence interest rates ofon our assets and liabilities and could adversely affect the demand for advances and for consolidated obligations as well as ourthe financial condition and results of operations.operations of the Bank. Recent efforts of the Federal Reserve Board to ease inflation, such as continued increases in policy interest rates, have contributed to significant volatility in the financial markets and uncertainties about the economic outlook, including concerns about a possible recession. In addition, wethe Bank currently playplays a predominant role as lendersa lender in the federal funds market,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.

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.

We realizeThe 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, arising from a shift in the relationship of interest rates in different financial markets or on different financial instruments, 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.

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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

Tablethe Bank. The Bank is not able to predict what the effect of Contentsthe continued transition to SOFR or another alternative reference rate will have on the business, financial condition, and results of operations of the Bank.

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 we are not able to 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, 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

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We have a high concentration of advances to 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 assigns 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 we are unable to liquidate the collateral 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. 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 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 may also be 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.

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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 find 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.

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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 ourFHLBanks’ 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, ourthe FHLBanks’ ability to access the capital markets on acceptable terms. For example, the SEC’s implementation of money market fund reforms from 2010 to 2016 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 until recent periods. 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 in 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 in response to the market stress experienced by short-term funding markets in March 2020, amid the COVID-19 pandemic, and the SEC proposed additional money market fund reforms in December 2021, 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 FHLBank short term funding costs and adversely affect the financial condition and results of operations of the FHLBNY.

Operational Risks

Failure, breach, or cyber-attack 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 cyber-attack 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 cyber-attack 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. 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.

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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 basedcloud-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 some of these systems and technology. A failure or interruption of one or more of those services, including as a result of breaches, cyber-attacks, 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.

Failures at the Office of Finance could disrupt the FHLNY’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.

A failure or interruption of the Office of Finance’s services, including as a result of breaches, cyber-attacks, system malfunctions 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 of time. 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 key personnelall 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 skilled key personnel often has been intense. For instance, we generally experienced higher employee turnover and increased competitioncertain positions. These challenges in hiring and retaining skilled key personnel2022 stemmed in 2021, asparticular from the ongoing COVID-19 pandemic that brought about significant disruptions and changes to the U.S. labor market. FailureAs an example, we note that some candidates and employees are attracted to attractfirms that provide for more flexible work arrangements, including the potential to work remotely on a full-time basis. Another retention challenge is the limited number of career paths available due to the relatively low number of employee headcount and retain skilled key personnel, adding additional stress on smaller workforceour flat organizational structure.

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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.

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