The payment reflects the central bank's earnings from holdings of Treasury bonds and mortgage-backed securities purchased to keep long-term interest rates low to boost the economy.
The 2014 payment is up 24% from a 2013 payment of $79.6 billion and is higher than the previous record of $88.4 billion paid in 2012.
Under the Board's policy, the residual earnings of each Federal Reserve Bank are distributed to the U.S. Treasury, after providing for the costs of operations, payment of dividends, and the amount necessary to equate surplus with capital paid-in.
The Federal Reserve Banks' 2014 estimated net income of $101.5 billion was derived primarily from $115.9 billion in interest income on securities acquired through open market operations (U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities).
Operating expenses of the Reserve Banks, net of amounts reimbursed by the U.S. Treasury and other entities for services the Reserve Banks provided as fiscal agents, totaled $3.6 billion in 2014. In addition, the Reserve Banks were assessed $711 million for the costs related to producing, issuing, and retiring currency, $590 million for Board expenditures, and $563 million to fund the operations of the Consumer Financial Protection Bureau. The Reserve Banks had interest expense of $6.9 billion associated with reserve balances and term deposits held by depository institutions, and recorded foreign currency translation losses of $2.9 billion that result from the daily revaluation of foreign currency denominated asset holdings at current exchange rates.
Additional earnings were derived from income from services of $435 million, and net income of $101 million attributable to the consolidated limited liability companies that were created in response to the financial crisis. In 2014, statutory dividends totaled $1.7 billion and $1.1 billion of net income was used to equate surplus to capital paid-in.
The above chart illustrates the amount of Federal Reserve Banks' residual earnings distributed to the U.S. Treasury from 2005 through 2014.