Funding the Future

Funding the future begins with ensuring that financial  institutions have access to reliable liquidity to respond quickly to the needs of communities and invest meaningfully for the future. In an environment where economic cycles can shift quickly, our role is to equip members with the resources that allow them to keep moving forward—supporting homebuyers, strengthening local businesses and building the foundation for neighborhoods to thrive.

New independent research from the Urban Institute, highly respected for its rigorous and data-driven research, underscores the importance of this mission: the Federal Home Loan Bank System creates an estimated $13.2 to $21.4 billion in annual economic value and reduces systemic risk in the economic system, demonstrating just how critical dependable funding is to the country’s stability and future.

The strength of our cooperative model, which is member owned and not funded with tax payer dollars, becomes even more evident during times of financial stress. As liquidity tightens, our members have turned to FHLB Cincinnati for support confirming that the FHLBank System provides a flexible and responsive backstop when it matters most. These stabilizing effects ripple far beyond individual institutions. FHLBank membership reduces bank failure rates by roughly 10 percent, producing an estimated $950 million in annual savings for the federal deposit insurance system and lowering systemic risk across the broader financial sector.

Financial and Operating Performance

Earnings came in at $575 million in 2025, a decrease of $33 million (5.5 percent) from 2024 performance. The decrease in net income was primarily due to lower average interest rates, which decreased the earnings generated from investing the FHLB’s capital in interest-earning assets, and lower spreads earned on mortgage loans held for portfolio.

Credit activity for the year was strong, with Advances ending the year at $70.1 billion and Letters of Credit ending at $46.5 billion. Average balances remained relatively consistent throughout the year. Additional details about 2025 performance are available in the Performance section beginning on page 11.

$104 Million of Transformational Contributions 
to Affordable Housing and Community 
Investment Programs

Our Housing and Community Investment (HCI) initiatives funded the future of our region by supporting affordable housing and economic development through multiple new and existing programs. Our Board of Directors voluntarily increased funding in 2025 for these important programs with $40 million in additional funds. Earnings in 2025 resulted in a $64 million set-aside for our 2026 Affordable Housing Program (AHP)—equaling a total of $104 million allocated to support required and voluntary affordable housing and community investment programs. 

In 2025, a total of $51.9 million was awarded through our competitive AHP offering to help create or preserve 2,990 units of housing all of which was in Kentucky, Ohio and Tennessee. Through the Welcome Home Program an additional $27.0 million in grants was disbursed to help 1,364 homebuyers purchase homes.

This year we launched three new Housing and Community Investment programs aimed at filling the housing affordability and accessibility needs of our District. The Hundred Homes Initiative offered $50,000 grants to those in mobile homes to transition them into housing taxed as real property. The CDFI Loan Investment Fund (CLIF) Advance introduced a new approach to funding our CDFI members in a way to spur the good work they are doing in their communities through zero interest financing. Our final and most popular new program, the Affordable Rate Program (ARP) aimed to promote housing affordability for low-income homebuyers through the Mortgage Purchase Program (MPP) by offering 2 percent lower note rates on MPP loans. Read more about those programs starting on page 6.

The Board and Senior Management

Members elected two Kentucky member directors and one independent director to four-year terms, commencing January 1, 2026. In Kentucky, incumbent member director Wade Berry, President and CEO, Farmers Bank & Trust Company, Marion, Ky. and Tim Barnes, Chief Executive Officer, Hometown Bank, Corbin, Ky. were elected. Incumbent Danny Herron, President and CEO, Habitat for Humanity of Greater Nashville, Tenn. was elected to the Board as an independent public interest director. 

Mike Pell, President and CEO, First State Bank, Winchester, Ohio, was elected to serve as Board Chair. Lewis Diaz, Partner, Dinsmore & Shohl, LLP, Covington, Ky. was elected to serve as Board Vice Chair. 

In 2025, we were notified by our regulator, the Federal Housing Finance Agency (FHFA), that our board of 17 directors would be reduced effective December 31, 2025 by two Ohio member directors, with terms expiring December 31, 2025 and December 31, 2027, and one independent director with a term expiring December 31, 2026. Through this abrupt reduction in Board size, we bid farewell to Bob Lameier, Director, Miami Savings Bank, Miamitown, Ohio, Kathleen Rogers, Director, Fifth Third Bancorp, Cincinnati, Ohio and Nancy Uridil, Board Chair and Retired Global CPG Executive, Avon Lake, Ohio, all of whom served the FHLB with distinguished leadership. 

We also said goodbye to Greg Caudill, Director, Farmers National Bank, Danville, Ky., term-limited Kentucky member director. We are grateful for our departing directors’ keen insight, valued contributions and many years of dedicated service.

In March 2026, we also welcomed a new member to our senior management team, Chris Dawson. Chris has taken on the role of Senior Vice President, Chief Information Officer. Chris brings 20 years of experience to the role most recently as CIO at FHLB Indianapolis. He is filling this role in anticipation of Brian Comp’s July 1 retirement after more than 10 years of service. 

Looking Ahead

Funding the future means recognizing that liquidity does more than address immediate needs, it creates the stability that allows communities and businesses to grow. Across our District, our members put this principle into action. They rely on us not only for the funding that supports their balance sheets, but the assurance that dependable liquidity will be there no matter the economic cycle.

As we move forward, we will continue working alongside our members to create more homeowners, strengthen community development and foster the financial stability that enables long-term prosperity. The stories and data in the pages ahead reflect the real and lasting impact of our shared commitment.

Thank you for your trust, your partnership, and your dedication to building strong and resilient communities. Funding the future happens piece by piece with the work you do every day—issuing mortgages, financing construction and more. It’s our honor to be your partner in making that future happen. 

Sincerely,

Nancy E. Uridil
Chair, Board of Directors

Andrew S. Howell
President and CEO