Federal Reserve Reports Decreased Income, Sends $75B to Treasury

The Federal Reserve Banks reported net income in 2011 of $78.54 billion compared to $81.735 billion in 2010.  Total comprehensive income, after adjustments for prior services costs and actuarial losses related to benefit plans was $77.38 billion, down from $81.74 billion.  Of this, $75.42 billion was paid to the U.S. Treasury as interest on Federal Reserve notes.  In 2010, $79,268 was paid to Treasury.

Total interest income for the year was $87.98 billion, 38.28 billion of which was from federal agency and government sponsored enterprise (GSE) mortgage-backed securities (MBS).  In 2010 the total interest income was $82.93 billion, $44.84 of which was from MBS.  Interest Expense totaled $4.1 billion for the year resulting in net interest income of $83.88 billion against $79.87 billion in 2010.

Non-interest income for the year was $50 million compared to $6.89 billion in 2010 due largely to a $4 billion loss on consolidated variable interest entities which generated $8.18 billion in income in 2010.

Total operating expenses for 2011 were $5.39 billion compared to $5.07 billion in 2010.

Total Reserve Bank assets as of December 31, 2011, were $2.919 trillion, which represents an increase of $491 billion from the previous year. Holdings of U.S. Treasury securities increased by $683 billion, GSE debt securities holdings decreased by $45 billion, and federal agency and GSE MBS holdings decreased by $156 billion. The balances held under central bank liquidity swap arrangements increased by $99.7 billion.

Federal Reserve Bank assets related to credit and liquidity programs decreased by $95.8 billion including $47 billion from closing of the American International Group, Inc. (AIG) recapitalization plan inclusive of the full repayment of the revolving line of credit with AIG in the amount of $20.6 billion and the redemption or sale of the Federal Reserve Bank of New York's (FRBNY) preferred interests in two AIG-related LLCs in the amount of $26.4 billion.

The complete financial statement as well as statements from the 12 Federal Reserve Banks can be reviewed at http://www.federalreserve.gov/monetarypolicy/bst_fedfinancials.htm.