Freddie Mac records $48.7 billion 2013 net income
Level of earnings not sustainable for long term
Freddie Mac’s full-year net income for 2013 totaled $48.7 billion, while its comprehensive income reached $51.6 billion.
For the fourth quarter, Freddie Mac's net income and comprehensive income came in at $8.6 billion and $9.8 billion, respectively, marking the company’s 9th consecutive quarter of positive net income and comprehensive income.
Freddie paid aggregate cash dividends of $71.345 billion to Treasury through Dec. 31, 2013, exceeding cumulative cash draws of $71.336 billion received from Treasury.
Going by the Dec. 31, 2013, net worth of $12.8 billion, the company’s March 2014 dividend obligation will be $10.4 billion, bringing total cash dividends paid to Treasury to $81.8 billion.
The government-sponsored enterprise’s financial results were buoyed by a full-year tax benefit of $23.3 billion and pre-tax benefit of legal settlements of $6 billion for fourth quarter and $7.7 billion for full year.
In addition to continued improvement in home prices, which contributed to reduced loan loss provisioning, and fair value gains on derivative portfolio and non-agency mortgage-related securities.
However, it is important to note that Freddie did say that the recent level of earnings is not sustainable over the long term.
This follows Fannie Mae's reported annual net income for 2013 of $84 billion, which includes the release of the company’s valuation allowance against its deferred tax assets, and annual pretax income for 2013 of $38.6 billion.