The Federal Home Loan Bank of Boston has reported $18.7 million in net income for the second quarter, a $22.9 million increase from a net loss of $4.2 million during the same period last year.

The increase was primarily due to a $40.1 million decrease in the credit-related, other-than-temporary impairment charges on certain private-label mortgage-backed securities, partially offset by factors including a $9.6 million decrease in net interest income after provision for credit losses, a $4.7 million increase in REFCorp assessments, and a $2.1 million increase in Affordable Housing Program contributions.

"We are pleased to report a third consecutive quarter of positive net income, despite a continued challenging operating environment and additional credit charges against the investment portfolio," said Edward A. Hjerpe III, president and chief executive officer. "We are focused on building retained earnings and preserving capital in order to restore the bank to a position where we can resume dividend payments, repurchase stock, and more fully fund the Affordable Housing Program."

Net interest income after provision for credit losses for the second quarter was $74.4 million, an 11.5 percent decrease from the $84 million during the same period last year.

The decrease was primarily attributable to a $10.4 billion reduction in average assets, from $75.1 billion during the second quarter of 2009 to $64.7 billion during the second quarter of 2010, and reflects members’ declining needs for wholesale funding due to increases in deposit levels.