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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20132014

or

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-51397

Federal Home Loan Bank of New York

(Exact name of registrant as specified in its charter)

(212) 681-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Class B Stock, putable, par value $100

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o  No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o  No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)  Yes x  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  Yes o  No x

Registrant’s stock is not publicly traded and is only issued to members of the registrant. Such stock is issued and redeemed at par value, $100 per share, subject to certain regulatory and statutory limits. At June 30, 2013,2014, the aggregate par value of the common stock held by members of the registrant was approximately $5,278,929,900.$5,821,824,200.  At February 28, 2014, 54,604,9132015, 54,686,726 shares of common stock were outstanding.

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ITEM 1.                                                BUSINESS.

General

The Federal Home Loan Bank of New York (“we,” “us,” “our,” “the Bank” or the “FHLBNY”) is a federally chartered corporation exempt from federal, state and local taxes except local real property taxes.  It is one of twelve district Federal Home Loan Banks (“FHLBanks”).  The FHLBanks are U.S. government-sponsored enterprises (“GSEs”), organized under the authority of the Federal Home Loan Bank Act of 1932, as amended (“FHLBank Act”).  Each FHLBank is a cooperative owned by member institutions located within a defined geographic district.  The members purchase capital stock in the FHLBank and generally receive dividends on their capital stock investment.  Our defined geographic district is New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands.  We provide a readily available, low-cost source of funds for our member institutions.

The FHLBNY is managed to deliver balanced value to members, rather than to maximize profitability or advance volume through low pricing.  Our members must purchase FHLBNY stock according to regulatory requirements as a condition of membership.  For more information, see financial statements, Note 12. Capital Stock, Mandatorily Redeemable Capital Stock and Restricted Retained Earnings to the financial statements.Earnings.  The business of the cooperative is to provide liquidity for our members (primarily in the form of loans referred to as “advances”) and to provide a return on members’ investment in FHLBNY stock in the form of a dividend.  Since members are both stockholders and customers, our management operates the Bank such that there is a trade-off between providing value to them via low pricing for advances with a relatively lower dividend versus higher advances pricing with a relatively higher dividend.

All federally insured depository institutions, insured credit unions and insurance companies engaged in residential housing finance can apply for membership in the FHLBank in their district.  With the passage of the Housing Recovery Act of 2008, community development financial institutions (“CDFIs”) that have been certified by the CDFI Fund of the U.S. Treasury Department, including community development loan funds, community development venture capital funds, and state-chartered credit unions without federal insurance, are also eligible to become members of a FHLBank.  The expanded membership became effective on February 4, 2010.  One CDFI was eligible and was admitted to membership in 2013.Two CDFIs were members of the FHLBNY at December 31, 2014.

A member of another FHLBank or a financial institution that is not a member of any FHLBank may also hold FHLBNY stock as a result of having acquired one of our members.  Because we operate as a cooperative, we conduct business with related parties in the normal course of business and consider all members and non-member stockholders as related parties in addition to the other FHLBanks.  For more information, see financial statements, Note 18. Related Party Transactions, to the financial statements included in this Form 10-K, and also Item 13. Certain Relationships and Related Transactions, and Director Independence in this Form 10-K.

Our primary business is making collateralized loans or advances to members and is also the principal factor that impacts our financial condition.  We also serve the public through our mortgage programs, which enable our members to liquefy certain mortgage loans by selling them to the Bank.  We also provide members with such correspondent services as safekeeping, wire transfers, depository and settlement services.  Non-members that have acquired members have access to these services up to the time that their advances outstanding prepay or mature.

We obtain our funds from several sources.  A primary source is the issuance of FHLBank debt instruments, called consolidated obligations, to the public.  The issuance and servicing of consolidated obligations are performed by the Office of Finance, the fiscal agent for the issuance and servicing of consolidated obligations on behalf of the 12 FHLBanks.  These debt instruments represent the joint and several obligations of all the FHLBanks.  Because the FHLBanks’ consolidated obligations are rated Aaa/P-1 with a stable outlook by Moody’s Investors Service (Moody’s) and AA+/A-1+ with a stable outlook by Standard & Poor’s Rating Services (Standard & Poor’s) and because of the FHLBanks’ GSE status, the FHLBanks are generally able to raise funds at rates that are typically at a small to moderate spread above U.S. Treasury security yields.  Additional sources of funding are member deposits, other borrowings, and the issuance of capital stock.  Deposits may be accepted from member financial institutions and federal instrumentalities.

We combine private capital and public sponsorship as a GSE to provide our member financial institutions with a reliable flow of credit and other services for housing and community development, and our cooperative ownership structure allows us to pass along the benefit of these low funding rates to our members.  By supplying additional liquidity to our members, we enhance the availability of residential mortgages and community investment credit. Members also benefit from our affordable housing and economic development programs, which provide grants and below-market-rate loans that support members’ involvement in creating affordable housing and revitalizing communities.

We do not have any wholly or partially owned subsidiaries, nor do we have an equity position in any partnerships, corporations, or off-balance-sheet special purpose entities.  We have a grantor trust related to employee benefits programs, more fully described in financial statements, Note 14. Employee Retirement Plans to the financial statements.Plans.

Up until June 30, 2011, we were required to make payments to the Resolution Funding Corporation (“REFCORP”) based on a percentage of Net income.  In 2011, the 12 FHLBanks entered into a Joint Capital Enhancement Agreement (��(“Capital Agreement”).  The Capital Agreement is intended to enhance the capital position of each FHLBanks, by allocating that portion of each FHLBank’s earnings historically paid to satisfy its REFCORP obligation to a separate retained earnings account at that FHLBank.  Because each FHLBank had been required to contribute 20% of its earnings toward payment of the interest on REFCORP bonds until the REFCORP obligation was satisfied, the Capital Agreement provides that, with full satisfaction of the REFCORP obligation, each

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supervision, regulation and housing mission oversight of the FHLBanks to promote their safety and soundness, support housing finance and affordable housing, and support a stable and liquid mortgage market.

Each FHLBank carries out its statutory mission only through activities that are authorized under and consistent with the Safety and Soundness Act and the FHLBank Act; and the activities of each FHLBank and the manner in which they are operated is consistent with the public interest.  The Finance Agency also ensures that the FHLBNY carries out its housing and community development mission, remains adequately capitalized and able to raise funds in the capital markets.  However, while the Finance Agency establishes regulations governing the operations of the FHLBanks, the Bank functions as a separate entity with its own management, employees and board of directors.

Our website is www.fhlbny.com.  We have adopted, and posted on our website, a Code of Business Conduct and Ethics applicable to all employees and directors.

Market Area

Our market area is the same as the membership district — New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands.  Institutions that are members of the FHLBNY must have their charter or principal places of business within this market area but may also operate elsewhere.  We had 333332 and 339333 members at December 31, 20132014 and 2012.2013.

The most recent market analysis performed using December 31, 2013September 30, 2014 data indicated that in our district, there were 46approximately 48 potential bank and thrift prospects and 527approximately 504 potential credit union prospects that qualify for membership.  Of these, we consider approximately 4334 as appropriate candidates for membership. .  An institution is deemed eligible if its charter or principal place of business is located within the membership district, the institutions issue long-term mortgage loans, and they meet the minimum 10% requirement of total assets invested in residential mortgage loans as a percentage of mortgage related assets.

An appropriate candidate for membership is an institution that is likely to transact advance business with us within a reasonable period of time, so that the stock the potential member will likely be required to purchase under membership provisions will not dilute the dividend on the existing members’ stock.  Characteristics that identify attractive candidates include an asset base of $100 million or greater ($50 million for credit unions), an established practice of wholesale funding, a high loan-to-deposit ratio, strong asset growth, sufficient eligible collateral, and management that has experience with the FHLBanks during previous employment.

We actively market membership through a series of targeted, on-going sales and marketing initiatives.  We compete for business by offering competitively priced products, services and programs that provide financial flexibility to the membership.  The dominant reason institutions join the FHLBNY is access to a reliable source of liquidity.  Advances are an attractive source of liquidity because they permit members to pledge relatively non-liquid assets, such as 1-4 family, multifamily, home equity, and commercial real estate mortgages held in portfolio, to create liquidity.  Advances are attractively priced because of our access to capital markets as a GSE and our strategy of providing balanced value to members.

The following table summarizes our members by type of institution:

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, either 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 immediately redeemed.  When advances are paid before maturity, we collect fees that make us financially indifferent to the prepayment.  Our operating expenses are low, about 6.0-11.07.0-11.0 basis points on average assets.  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

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Products and Services

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 servicessuch sources, and other incidental income and expenses was about $10.3 million in 2014, $9.1 million and $8.2 million in 2013 $8.2 million and $5.7 million in 2012 and 2011.2012.  On an infrequent basis, we may act as an intermediary to purchase derivative instruments for members.

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 8.  Mortgage Loans Held-for-portfolio to the financial statements.Held-for-portfolio.  However, we do not expect the program to become a significant factor in our operations.  The interest revenues derived from this program were $71.5 million in 2014, $68.3 million and $65.9 million in 2013 $65.9 million and $62.9 million in 2012 and 2011.2012.  The revenues were not a significant source of interest income.

We invest in short-term assets to bolster our liquidity, and invest in long-term mortgage-related securities, primarily mortgage-backed securities to enhance earnings.  The interest income derived from investments were $286.0 million, $274.8 million and $313.4 million and $319.4 million in 2014, 2013 and 2012 and 2011represented 34.2%, 34.9% and represented 34.9%, 34.7% and 33.5% of total interest income for those years.

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).

Advances to members, including former members, constituted 70.7%74.4% and 73.7%70.7% of our total assets of $128.3$132.8 billion and $103.0$128.3 billion at December 31, 20132014 and 2012.2013.  In terms of revenues, interest income derived from advances waswere $478.7 million, $444.6 million and $524.2 million, representing 57.2%, 56.4% and $571.0 million, representing 56.4%, 58.0% and 59.9% of total interest income in 2014, 2013 2012 and 2011.2012.  Most of our critical functions are directed at supporting the borrowing needs of our members, monitoring the members’ associated collateral positions, and providing member support operations.  For more information about advances, including our underwriting standards, see financial statements, Note 7. Advances, andAdvances; also see Tables 3.1 to 3.123.9 and the accompanying discussions in this MD&A.

Members use advances as a source of funding to supplement their deposit gathering activities.  Advances borrowed by members have been substantial in the last 10 years 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.  Amounts of such transactions have not been material.  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 initiative is the Mortgage Partnership Finance (“MPF®”) Program, which provides members with an alternative to originating and selling long-term, fixed-rate mortgages in the secondary market.  In the MPF Program, we purchase 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.  This provides a double-A equivalent level

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of creditworthiness on the mortgages.  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 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.  However, the FHLBanks have the legal authority to sell Mortgage Partnership Finance 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 8. Mortgage Loans Held-for-Portfolio to the financial statements.Held-for-Portfolio.  Also see Tables 5.1 to 5.6 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 1Linksm, 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.

Affordable Housing Program and Other Mission Related Programs

Federal Housing Finance Agency regulation Part 1292.5 (“Community Investment Cash Advance Programs”) states in general that each FHLBank shall establish an Affordable Housing Program in accordance with Part 1291, and a Community Investment Program.  As more fully discussed under the section “Assessments” in this Form 10-K, the 12 FHLBanks together, must annually set asideallocate for the Affordable Housing Program the greater of $100 million or 10% of regulatory defined net income.  For more information, see Background in the MD&A, and financial statements, Note 11.  Affordable Housing Program to the financial statements.Program.

The FHLBank may also offer a Rural Development Advance program, an Urban Development Advance program, and other Community Investment Cash Advance programs.

Affordable Housing Program (“AHP”).  We meet this requirement by allocating 10% of the previous year’s regulatory defined net income to our Affordable Housing Program each year.  The Affordable Housing Program helps our members meet their Community Reinvestment Act responsibilities.  The program gives members access to cash grants and subsidized, low-cost funding to create affordable rental and home ownership opportunities, including first-time homebuyer programs.  Within each year’s AHP allocation, we have established a set-aside program for first-time homebuyers called the First Home Clubsm.  The FHLBNY may set aside annually, in aggregate, up to the greater of $4.5 million or 35% of the Bank’s annual required AHP contributions.  Household income qualifications for the First Home Club are the same as for the competitive AHP.  Qualifying households can receive matched funds at a 4:1 ratio, up to $7,500 to help with closing costs and/or down payment assistance.  Households are also required to attend counseling seminars that address personal budgeting and home ownership skills training.  For each household that completes the purchase of their first home, we provide up to $500 to the sponsoring member bank to defray the cost of counseling.

Other Mission—Related Activities.  The Community Investment Program (“CIP”), Rural Development Advance, and Urban Development Advance are community-lending programs that provide additional support to members in their affordable housing and economic development lending activities.  These community-lending programs support affordable housing and economic development activity within low- and moderate-income neighborhoods as well as other activities that benefit low- and moderate-income households.  Through the Community Investment Program, Rural Development Advance, and Urban Development Advance programs, we provide reduced interest rate advances to members for lending activity that meets the program requirements.  We also provide letters of credit in support of projects that meet the CIP, Rural Development Advance, and Urban Development Advance program requirements.  The project-eligible Letters of Credit are offered at reduced fees.  Providing community lending programs (Community Investment Project, Rural Development Advance, Urban Development Advance, and Letters of Credit) at advantaged pricing that is discounted from our market interest rates and fees represents an additional allocation of our income in support of affordable housing and community economic development efforts.  In addition, overhead costs and administrative expenses associated with the implementation of our Affordable Housing and community lending programs are absorbed as general operating expenses and are not charged back to the AHP allocation.  The foregone interest and fee income, as well as the administrative and operating costs, are above and beyond the annual income contribution to the AHP Loans offered under these programs.

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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, and up until June 30, 2011, to also satisfy the Resolution Funding Corporation (REFCORP) assessment.expenditures. To help ensure the availability of funds to meet member credit needs, we maintain a portfolio of short-term investments issued by

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The Global Debt Program — provides the FHLBanks with the ability to distribute debt into multiple primary markets across the globe.  FHLBank global bonds are known for their variety and flexibility; all can be customized

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Twice weekly, FHLBanks may also request that specific amounts of discount notes with fixed maturity dates of 4, 9, 13, and 26 weeks be offered by the Office of Finance through a competitive auction conducted with securities dealers in the discount note selling group.  One or more of the FHLBanks may also request that amounts of those same discount notes be offered for sale for their benefit through the same auction.  The discount notes offered for sale through competitive auction are not subject to a limit on the maximum costs the FHLBanks are willing to pay.  The FHLBanks receive funding based on their requests at a weighted average rate of the winning bids from the

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Treasury receives the Finance Agency’s annual report to Congress, monthly reports reflecting securities transactions of the FHLBanks, and other reports reflecting the operations of the FHLBanks.

The FHLBNY has an internal audit department, and our Board of Directors has an Audit Committee.  An independent registered public accounting firm audits our annual financial statements.  The independent registered public accounting firm conducts these audits following auditing standards established by the Public Company Accounting Oversight Board (United States).  The FHLBanks, the Finance Agency, and Congress all receive the audit reports.  We must also submit annual management reports to Congress, the President, the Office of

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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.

Regulatory Risks

The FHLBanks are governed by federal laws and regulations, which could change or be applied in a manner detrimental to FHLBNY’s operations.  The FHLBanks are government-sponsored enterprises (“GSEs”), organized under the authority of the FHLBank Act, and, as such, are governed by federal laws and regulations of the Finance Agency, an independent agency in the executive branch of the federal government.  From time to time, Congress has amended the FHLBank Act in ways that significantly affected the FHLBanks and the manner in which the FHLBanks carry out their housing finance mission and business operations.  New or modified legislation enacted by Congress or regulations adopted by the Finance Agency could have a negative effect on our ability to conduct business or our cost of doing business.

Changes in regulatory or statutory requirements, or in their application, could result in, among other things, changes in: our cost of funds; retained earnings requirements; debt issuance; dividend payments; capital redemption and repurchases; permissible business activities; the size, scope, or nature of our lending, investment, or mortgage purchase programs; or our compliance costs.  Changes that restrict dividend payments, the growth of our current business, or the creation of new products or services could negatively affect our results of operations and financial condition.  Further, the regulatory environment affecting members could be changed in a manner that would negatively affect their ability to acquire or own our capital stock or take advantage of our products and services.

As a result of these factors, the FHLBank System may have to pay a higher rate of interest on consolidated obligations.  The resulting increase in the cost of issuing consolidated obligations could cause our advances to be less profitable and reduce our net interest margins (the difference between the interest rate received on advances and the interest rate paid on consolidated obligations).  If we change the pricing of our advances, they may no longer be attractive to members and outstanding advances may decrease.  In any case, the increased cost of issuing consolidated obligations could negatively affect our financial condition and results of operations.

Negative information about us, the FHLBanks or housing GSEs, in general, could adversely impact our cost and availability of financing. Negative information impacting us or any other FHLBank, such as material losses or increased risk of losses, could also adversely impact our cost of funds. More broadly, negative information about housing GSEs, in general, could adversely impact us. The housing GSEs — Fannie Mae, Freddie Mac, and the FHLBanks — issue highly rated agency debt to fund their operations. From time to time, negative announcements by any of the housing GSEs concerning accounting problems, risk-management issues, and regulatory enforcement actions have created pressure on debt pricing for all GSEs, as investors have perceived such instruments as bearing increased risk. Similar announcements by the FHLBanks may contribute to this pressure on debt pricing.  One possible source of information that impacts us could come from plans for housing GSE reform.  Such plans, including those introduced by the U.S. Treasury and HUD proposed certain recommendations for the reform of the housing GSEs.  Although the focus of those recommendations is on Fannie Mae and Freddie Mac, the proposal includes certain recommendations for the FHLBanks.  The proposed reforms could affect the FHLBanks’ current business activities with their members, particularly large financial institutions.  These recommendations include reducing and altering the composition of FHLBanks investment portfolios, limiting the level of advances outstanding to individual members and restricting membership to allow each financial institution, inclusive of its affiliates, to be an active member in only a single FHLBank.  Other recommendations or other plans could result in market uncertainty regarding the status of U.S. federal government support of housing GSEs, in general, including the FHLBanks, and our cost of financing could be adversely impacted as a result.

Any such negative information or other factors could result in the FHLBanks having to pay a higher rate of interest on COs to make them attractive to investors. If we maintain our existing pricing on our advances products and other services notwithstanding increases in CO interest rates, the spreads we earn would fall and our results of operations would be adversely impacted.  If, in response to this decrease in spreads, we change the pricing of our advances, the advances may be less attractive to members and the amount of new advances and our outstanding advance balances may decrease.  In either case, the increased cost of issuing COs could adversely impact our financial condition and results of operations.

Loan modification programs could adversely impact the value of the FHLBNY’s mortgage-backed securities. Federal and state government authorities, as well as private entities such as financial institutions and the servicers of residential mortgage loans, have proposed, commenced, or promoted implementation of programs designed to provide homeowners with assistance in avoiding residential mortgage loan foreclosures.  Loan modification programs, as well as future legislative, regulatory or other actions, including amendments to the bankruptcy laws, that result in the modification of outstanding mortgage loans may adversely affect the value of and the returns on our mortgage-backed securities.

Business Risks

A loss or change of business activities with large members could adversely affect the FHLBNY’s results of operations and financial condition.  We have a high concentration of advances with three member institutions, and a loss or change of business activities with any of these institutions could adversely affect our results of operations and financial condition.  Concentration risk for the FHLBNY is defined as the exposure to loss arising from a disproportionately large number of financial transactions with a limited number of individual customers, with a

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value to the total par value of all advances outstanding as of a given date.  At December 31, 2014, three members accounted for 51.9% of total advances - Citibank, N.A. (28.8 %), Metropolitan Life Insurance Company (12.9 %), and combined holding by New York Community Bank and NY Commercial Bank (10.2%).

Future changes in the regulatory environment for larger members that fall into the category of a Global Systemically Important Bank, may impact our business.  As an example, in November 2014, the Financial Stability Board (“FSB”) issued consultative document that defined a global standard for minimum amounts of Total Loss Absorbency Capacity (“TLAC”) to be held by Global Systemically Important Banks (G-SIBs), with the objective of ensuring that G-SIBs have the loss absorbing and recapitalization capacity so that critical functions continue without requiring taxpayer support or threatening financial stability.  G-SIBs will have until 2019 to meet certain leverage and other thresholds, and for certain G-SIBs that may require changes in balance sheet management, including issuances of additional senior and Tier 2 debt.  Depending on how soon the balance sheet adjustments are made, they could have an impact on our business even in the near term.

Withdrawal of one or more large members from our membership could result in a reduction of our total assets, capital, and net income.  If one or more of our large members were to prepay their advances or repay the advances as they came due and no other advances were made to replace them, it could also result in a reduction of our total assets, capital, and net income.  Although there were no material prepayments of advances in 20132014 from members who accounted for 10% or more of advances, in prior years we have had large members make material prepayments.  For example, Hudson City Savings Bank, FSB (Hudson City), a member which had accounted for 6.8%about 22% of advances at December 31, 2013,2010 had prepaid $10.5 billion of advances in 2011.  Also, see Business Outlook in this MD&A for discussions with respect to a pending merger between

On August 27, 2012, Hudson City Bancorp, Inc (“Hudson City”) had announced that it had entered into an Agreement and Plan of Merger (“Merger Agreement”) with M&T Bank.

Bank Corporation and Wilmington Trust Corporation, a wholly owned subsidiary of M&T Bank Corporation. The Manufacturers and Traders Trust Company (“M&T Bank”) would continue as the surviving bank.  The Merger Agreement was subject to, among other items, shareholder and regulatory approvals. At December 31, 2013, three members accountedthe time the deal was announced, the parties also indicated their intention to pay off FHLBNY advances upon the closing of the merger transaction.  Since then, the parties to the merger, anticipated needing additional time, have extended the deadline for 50.8%the completion of total advances - Citibank, N.A. (25.0%), Metropolitan Life Insurance Company (14.4%), and New York Community Bank (11.4%).the merger on a number of occasions, most recently to April 30, 2015.

While our analysis of the impact of the merger of Hudson City isdoes not expected to haveindicate a material adverse impact on our business and results of operations, however, these are the types of events that we consider to be potential negative factors resultingthat may arise from a high concentration of advances.  The timing and magnitude of the effect of a reduction in the amount of advances would depend on a number of factors, including:

·                  the amount and the period over which the advances were prepaid or repaid;

·                  the amount and timing of any corresponding decreases in activity-based capital;

·                  the profitability of the advances;

·                  the size and profitability of our short- and long-term investments; and

·                  the extent to which consolidated obligations (funding) matured as the advances were prepaid or repaid.

At December 31, 2013,2014, advances borrowed by insurance companies accounted for 18.5% (23.8%17.4% (18.5% at December 31, 2012)2013) of total advances (See financial statements, Note 19. Segment Information and Concentration to the financial statements.)Concentration).  Lending to insurance companies poses a number of unique risks not present in lending to federally insured depository institutions.  For example, there is no single federal regulator for insurance companies.  They are supervised by state regulators and subject to state insurance codes and regulations.  There is uncertainty about whether a state insurance commissioner would try to void FHLBNY’s claims on collateral in the event of an insurance company failure.  Even if ultimately unsuccessful, such a legal challenge could result in a delay in the liquidation of collateral and a loss of market value.

The FHLBNY has geographic concentrations that may adversely impact its business operations and/or financial condition.  By nature of our regulatory charter and our business operations, we are exposed to credit risk as the result of limited geographic diversity. Our advance lending is limited by charter to operations to the four areas — New Jersey, New York, Puerto Rico and the U.S. Virgin Islands. We employ conservative credit rating and collateral policies to limit exposure, but a decline in regional economic conditions could create an exposure to us in excess of collateral held.

We have concentrations of mortgage loans in some geographic areas based on our investments in MPF loans and private-label MBS and on the receipt of collateral pledged for advances.  To the extent that any of these geographic areas experiences significant declines in the local housing markets, declining economic conditions, or a natural disaster, we could experience increased losses on our investments in the MPF loans or the related MBS or be exposed to a greater risk that the pledged collateral securing related advances would be inadequate in the event of default on such an advance.

The FHLBNY relies upon derivative instruments to reduce its interest-rate risk, and changes in our credit ratings may adversely affect our ability to enter into derivative instruments on acceptable terms.  Our financial strategies are highly dependent on our ability to enter into derivative instruments on acceptable terms to reduce our interest-rate risk.  Rating agencies may from time to time change a rating or issue negative reports, which may adversely affect our ability to enter into derivative instruments with acceptable parties on satisfactory terms in the quantities necessary to manage our interest-rate risk on consolidated obligations or other financial instruments.  This could negatively affect our financial condition and results of operations.

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Changes in regulatory requirements related to derivative instruments may adversely affect our ability to enter into derivative instruments on acceptable terms.  The ongoing implementation of derivatives regulation under the Dodd-Frank Act could adversely impact the FHLBNY’s ability to execute derivatives to hedge interest rate risk, and would increase our compliance costs and negatively impact our results of operations.  Derivatives regulations under the Dodd-Frank Act have impacted and will continue to substantially impact the derivatives markets by, among other things: (i) requiring extensive regulatory and public reporting of derivatives transactions; (ii) requiring a wide range of over-the-counter derivatives to be cleared through recognized clearing facilities and traded on exchanges or exchange-like facilities; (iii) requiring the collection and segregation of collateral for most uncleared derivatives; and (iv) significantly broadening limits on the size of positions that may be maintained in specified derivatives.  These market structure reforms will make many derivatives products more costly to execute, may significantly reduce the liquidity of certain derivatives markets and could diminish customer demand for covered derivatives.  Those changes could negatively impact the FHLBNY’s ability to execute derivatives in a cost efficient manner, which could have an adverse impact on its results of operations.  Numerous aspects of the new derivatives regime require costly and extensive compliance systems to be put in place and maintained.

The FHLBNY faces competition for advances, loan purchases, and access to funding, which could adversely affect its businesses and the FHLBNY’s efforts to make advance pricing attractive to its members as well as it may adversely affect earnings.  Our primary business is making advances to our members, and we compete with other suppliers of wholesale funding, both secured and unsecured, including investment banks, commercial banks and, in certain circumstances, other FHLBanks.  Our members have access to alternative funding sources, which

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Economic downturns and changes in federal monetary policy could have an adverse effect on the FHLBNY’s business and its results of operations.  Our businesses and results of operations are sensitive to general business and economic conditions.  These conditions include short- and long-term interest rates, inflation, money supply, fluctuations in both debt and equity capital markets, and the strength of the United States economy and the local economies in which we conduct our business.  If any of these conditions deteriorate, our businesses and results of operations could be adversely affected.  For example, a prolonged economic downturn could result in members needing fewer advances.  In addition, our business and results of operations are significantly affected by the fiscal and monetary policies of the federal government and its agencies, including the Federal Reserve Board, which regulates the supply of money and credit in the United States.  The Federal Reserve Board’s policies directly and indirectly influence the yield on interest-earning assets and the cost of interest-bearing liabilities.

Credit Risks

Changes in the credit ratings on FHLBank System consolidated obligations may adversely affect the cost of consolidated obligations, which could adversely affect FHLBNY’s financial condition and results of operations.  FHLBank System consolidated obligations have been assigned Aaa/P-1 and AA+/A-1+ ratings by Moody’s and S&P.  The outlook for the FHLBank debt by both S&P and Moody’s is stable.  Rating agencies may from time to time change a rating or issue negative reports, which may adversely affect the cost of funds of one or more FHLBanks, including the FHLBNY, and the ability to issue consolidated obligations on acceptable terms.  A higher cost of funds or the impairment of the ability to issue consolidated obligations on acceptable terms could also adversely affect our financial condition and results of operations.  Rating agency downgrades of the debt of the United States could also cause a downgrade in the rating of the FHLBanks.

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The FHLBNY may become liable for all or a portion of the consolidated obligations of the FHLBanks, which could negatively impact the FHLBNY’s financial condition and results of operations.  We are jointly and severally liable along with the other FHLBanks for the consolidated obligations issued through the Office of Finance.  Dividends on, redemption of, or repurchase of shares of our capital stock are not permitted unless the principal and interest due on all consolidated obligations have been paid in full.  If another Federal Home Loan Bank were to default on its obligation to pay principal or interest on any consolidated obligations, the Finance Agency may allocate the outstanding liability among one or more of the remaining FHLBanks on a pro rata basis or on any other basis the Finance Agency may determine.  As a result, our ability to pay dividends on, to redeem, or to repurchase shares of capital stock could be affected by the financial condition of one or more of the other FHLBanks.  However, no FHLBank has ever defaulted on its debt and no FHLBank has ever been asked to assume the debt payments of another FHLBank since the FHLB System was established in 1932.

Liquidity Risks

The FHLBNY may not be able to meet its obligations as they come due or meet the credit and liquidity needs of its members in a timely and cost-effective manner.  We seek to be in a position to meet our members’ credit and liquidity needs and pay our obligations without maintaining excessive holdings of low-yielding liquid investments or being forced to incur unnecessarily high borrowing costs.  In addition, we maintain a contingent liquidity plan designed to enable us to meet our obligations and the liquidity needs of members in the event of operational disruptions or short-term disruptions in the capital markets.  Our ability to manage our liquidity position or our contingent liquidity plan may not enable us to meet our obligations and the credit and liquidity needs of our members, which could have an adverse effect on our financial condition and results of operations.

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Failures of critical vendors and other third parties could disrupt the Banks’ ability to conduct and manage its businesses.  We rely on vendors and other third parties to perform certain critical services.  A failure in, or an interruption to, one of more of those services could adversely affect the business operations of the Bank.  The use of vendors and other third parties also exposes the Bank to the risk of loss of confidential information or other harm.  To the extent that vendors do not conduct their activities under appropriate standards, the Bank could also be exposed to reputational risk.

ITEM 1B.UNRESOLVED STAFF COMMENTS.

None.Not applicable.

ITEM 2.PROPERTIES.

We occupy approximately 41,000 square feet of leased office space at 101 Park Avenue, New York, New York.  We also maintain 30,000 square feet of leased office space at 30 Montgomery Street, Jersey City, New Jersey, principally as an operations center.

ITEM 3.LEGAL PROCEEDINGS.

From time to time, the BankFHLBNY is involved in disputes or regulatory inquiries that arise in the ordinary course of business.  At the present time, except as noted below, there are no pending claims against the BankFHLBNY that, if established, are reasonably likely to have a material effect on the Bank’sFHLBNY’s financial condition, results of operations or cash flows.

On September 15, 2008, Lehman Brothers Holdings, Inc. (“LBHI”), the parent company of Lehman Brothers Special Financing Inc. (“LBSF”) and a guarantor of LBSF’s obligations, filed for protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in the Southern District of New York. LBSF filed for protection under Chapter 11 in the same court on October 3, 2008.  A Chapter 11 plan was confirmed in their bankruptcy cases by order of the Bankruptcy Court dated December 6, 2011 (the “Plan”).  The Plan became effective on March 6, 2012.

LBSF was a counterparty to FHLBNY on multiple derivative transactions under an International Swap Dealers Association, Inc. master agreement with a total notional amount of $16.5 billion at the time of termination of the Bank’sFHLBNY’s derivative transactions with LBSF on September 18, 2008 (the “Early Termination Date”).  The net amount that was due to the BankFHLBNY after giving effect to obligations that were due LBSF and Bankthe FHLBNY collateral posted with and netted by LBSF was approximately $65 million.  The BankFHLBNY filed timely proofs of claim in the amount of approximately $65 million as creditors of LBSF and LBHI in connection with the bankruptcy proceedings.  The BankFHLBNY fully reserved the LBSF and LBHI receivables as the dispute with LBSF described below make the timing and the amount of any recoveries uncertain.

As previously reported, the BankFHLBNY received a Derivatives ADR Notice from LBSF dated July 23, 2010 claiming that the BankFHLBNY was liable to LBSF under the master agreement.  Subsequently, in accordance with the Alternative Dispute Resolution Procedure Order entered by the Bankruptcy Court dated September 17, 2009 (“Order”), the BankFHLBNY responded to LBSF on August 23, 2010, denying LBSF’s Demand.  LBSF served a reply on September 7, 2010, effectively reiterating its position.  A mediation conducted pursuant to the Order commenced on December 8, 2010 and concluded without settlement on March 17, 2011.  LBSF claimsclaimed that the Bank isFHLBNY was liable to it in the principal amount of approximately $198 million plus interest on such principal amount from the Early Termination Date to December 1, 2008 at an interest rate equal to the average of the cost of funds of the BankFHLBNY and LBSF on the Early Termination Date, and after December 1, 2008 at a default interest rate of LIBOR plus 13.5%.  LBSF’s asserted claim as of December 6, 2010, including principal and interest, was approximately $268 million.  Pursuant to the Order, positions taken by the parties in the ADR process are confidential.

The FHLBNY and LBSF resumed mediation on February 10, 2015.  If the mediation does not result in a settlement, the FHLBNY anticipates that LBSF will commence an adversary proceeding in the bankruptcy court to resolve the competing claims.

While the BankFHLBNY believes that LBSF’s position is without merit, the amount the BankFHLBNY actually recovers or pays will ultimately be decided in the course of the bankruptcy proceedings.

ITEM 4.MINE SAFETY DISCLOSURES.

Not applicable.

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PART II

ITEM 5.                                                MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

All of the capital stock of the FHLBNY is owned by our members.  Stock may also be held by former members as a result of having been acquired by a non-member institution.  We conduct our business in advances and mortgages exclusively with stockholder members and housing associates(1).  There is no established marketplace for FHLBNY stock as FHLBNY stock is not publicly traded.  It may be redeemed at par value upon request, subject to regulatory limits.  The par value of all FHLBNY stock is $100 per share.  These shares of stock in the FHLBNY are registered under the Securities Exchange Act of 1934, as amended.  At December 31, 2014, we had 332 members, who held 55,800,730 shares of capital stock between them.  At December 31, 2014, former members held 192,004 shares.  At December 31, 2013, we had 333 members, who held 55,714,002 shares of capital stock between them.  At December 31, 2013, formerFormer members held 239,940 shares.  At December 31, 2012, we had 339 members, who held 47,974,566 shares of capital stock between them.  Former members held 231,433 shares.  Capital stock held by former members is classified as a liability, and deemed to be mandatorily redeemable under the accounting guidance for certain financial instruments with characteristics of both liabilities and equity.

Our recent quarterly cash dividends are outlined in the table below.  No dividends were paid in the form of stock.  Dividend payments and earnings retention are subject to be determined by our Board of Directors, at its discretion, and within the regulatory framework promulgated by the Finance Agency.  Our Retained Earnings and Dividends Policy outlined in the section titled Retained Earnings and Dividends under Part I, Item 1 of this Annual Report on Form 10-K provides additional information.

Note 1: (1)Housing associates are defined as entities that (i) are approved mortgagees under Title II of the National Housing Act, (ii) are chartered under law and have succession, (iii) are subject to inspection and supervision by a governmental agency, (iv) lend their own funds as their principal activity in the mortgage field, and (v) have a financial condition such that advances may be safely made to that entity.  At December 31, 2013,2014, we had 89 housing associates as members.  Advances made to Housinghousing associates totaled $6.7$6.2 million, and the mortgage loans acquired from housing associates were immaterial in any periods in this report.

Dividends from a calendar quarter’s earnings are paid(a)subsequent to the end of that calendar quarter as summarized below. Dividend payments reported below are on Class B Stock, which includes payments to non-members on capital stock reported as mandatorily redeemable capital stock in the Statements of Condition.  (Dollars(dollars in thousands):

(a)The table above reports dividend on a paid basis and includes payments to former members as well as members.  Dividends paid to former members were $0.9 million, $1.0 million $1.8 million and $2.4$1.8 million for the years ended December 31, 2014, 2013 2012 and 20112012.

(b)Includes dividends paid to non-members that are classified as interest expense for accounting purposes.

Dividends are accrued for former members, and recorded as interest expense on mandatorily redeemable capital stock held by former members, and is a charge to Net income.  Dividends on capital stock held by members are not accrued.  Dividends are paid in arrears typically in the second month after the quarter end in which the dividend is earned, and is a direct charge to Retained earnings.

Issuer Purchases of Equity Securities

In accordance with correspondence from the Office of Chief Counsel of the Division of Corporate Finance of the U.S. Securities and Exchange Commission dated August 26, 2005, we are exempt from disclosures of unregistered sales of common equity securities or securities issued through the Office of Finance that otherwise would have been required under Item 701 of the SEC’s Regulation S-K.  By the same no-action letter, we are also exempt from disclosure of securities repurchases by the issuer that otherwise would have been required under Item 703 of Regulation S-K.

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ITEM 6.                                                SELECTED FINANCIAL DATA.

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.

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(a)         Investments include held-to-maturity securities, available-for-sale securities, securities purchased under agreements to resell, Federal funds, loans to other FHLBanks, and other interest-bearing deposits.

(b)         FRB program commenced in October 2008.  On July 2, 2009, the Bank was no longer eligible to collect interest on excess balances.

(c)Allowances for credit losses were $4.5 million, $5.7 million, $7.0 million, $6.8 million $5.8 million and $4.5$5.8 million for the years ended December 31, 2014, 2013, 2012, 2011 2010 and 2009.2010.

(d)(c)          Equity to asset ratio is capital stock plus retained earnings and Accumulated other comprehensive income (loss) as a percentage of total assets.

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

(f)(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.

(g)(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).

(h)(g)         Operating expenses include Compensation and Benefits.

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

(i)All percentage calculations are performed using amounts in thousands, and may not agree if calculations are performed using amounts in millions.

Supplementary financial data for each quarter for the years ended December 31, 20132014 and 20122013 are presented below (in thousands):