Fannie Mae 4Q net income rises to $2.5 billion
Posts a $2.9B dividend obligation to Treasury
Fannie Mae posted a fourth quarter 2015 net income of $2.5 billion, up from $2 billion in the third quarter of 2015, and a comprehensive income of $2.3 billion, which was up $2.2 billion from the third quarter.
The increase was primarily due to fair value gains in the fourth quarter of 2015 from increases in longer-term interest rates positively impacting the value of the company’s risk management derivatives, compared with fair value losses in the third quarter of 2015.
While the company's results fared better than the third quarter, they are still down compared to the second quarter of 2015, when the company posted net income of $4.6 billion and comprehensive income of $4.4 billion.
For the full year, Fannie Mae reported a drop in net income, falling to $11 billion, compared to $14.2 billion in 2014. It also posted a comprehensive income of $10.6 billion.
Fannie attributed the decrease in 2015 net income to a substantial reduction in income resulting from settlement agreements resolving certain lawsuits relating to private-label mortgage-related securities sold to it.
Fannie Mae paid a total of $10.3 billion in dividends to Treasury in 2015 and expects to pay Treasury $2.9 billion in dividends in March 2016.
After the expected March 2016 dividend payment, Fannie Mae will have paid a total of $147.6 billion in dividends to Treasury.
Dividend payments do not reduce prior Treasury draws, which total $116.1 billion.
“Our strong 2015 results demonstrate our commitment to improving both our company and the broader housing finance system,” said Timothy Mayopoulos, president and CEO.
“We are listening closely to our customers so we deliver industry-leading solutions that make doing business with us easier, more efficient, and more certain. We are evolving our business model so we better serve the industry and taxpayers, and fulfill our essential role in making affordable mortgage and rental options available for millions of people across the country,” Mayopoulos said.
Freddie Mac reported its earnings on Thursday morning, recording a fourth quarter net income of $2.2 billion, a jump after net loss of $475 million for the third quarter of 2015, which marked the first loss in four years.