Fannie Mae reported net income of $1.9 billion for the first quarter of 2015 and comprehensive income of $1.8 billion.

The government-sponsored enterprise reported a positive net worth of $3.6 billion as of March 31, 2015 resulting in a dividend obligation to Treasury of $1.8 billion, which the company expects to pay in June 2015.

Fannie Mae’s net income of $1.9 billion and comprehensive income of $1.8 billion for the first quarter of 2015 compares to net income of $1.3 billion and comprehensive income of $1.3 billion for the fourth quarter of 2014.

Net income in the first quarter of 2015 increased compared with the fourth quarter of 2014 due primarily to lower fair value losses in the first quarter of 2015. Fannie Mae recognized a provision for federal income taxes of $870 million for the first quarter of 2015, which resulted in an effective tax rate of 31.6%.

Further, the GSE expects declining profit going forward.

“This was another quarter of strong financial performance. We continued to have solid revenues. While we experienced some interest rate volatility again this quarter, we expect to remain profitable on an annual basis for the foreseeable future,” said Timothy Mayopoulos, president and chief executive officer. “We continued to make progress against our goals, and we are managing the company on a basis that produces good economic value for the taxpayer. We are focused on delivering value to our business partners and making it simpler and easier for lenders to serve the housing market safely, efficiently, and profitably.”

Net revenues, which consist of net interest income and fee and other income, were $5.4 billion for the first quarter of 2015, compared with $5.5 billion for the fourth quarter of 2014.

Net interest income, which includes guaranty fee revenue, was $5.1 billion for both the first quarter of 2015 and the fourth quarter of 2014. Net interest income in the first quarter was driven by guaranty fee revenue, including amortization income from prepayments, and interest income earned on mortgage assets in the company’s retained mortgage portfolio.

An increasing portion of Fannie Mae’s net interest income in recent years has been derived from guaranty fees rather than from interest income earned on the company’s retained mortgage portfolio assets.

This is a result of both the impact of guaranty fee increases and the shrinking of the retained mortgage portfolio. The company estimates that a majority of its net interest income in the first quarter of 2015 was derived from guaranty fees on loans underlying its Fannie Mae MBS. The company expects that guaranty fees will continue to account for an increasing portion of its net interest income.

Net fair value losses were $1.9 billion in the first quarter of 2015, compared with $2.5 billion in the fourth quarter of 2014. The decrease in fair value losses in the first quarter of 2015 compared with the fourth quarter of 2014 was due primarily to smaller declines in longer-term interest rates negatively impacting the value of the company’s risk management derivatives.

The estimated fair value of the company’s derivatives and securities may fluctuate substantially from period to period because of changes in interest rates, the yield curve, mortgage spreads, implied volatility, and activity related to these financial instruments.

Credit-related income, which consists of a benefit for credit losses and foreclosed property expense or income, was $60 million in the first quarter of 2015, compared with $97 million in the fourth quarter of 2014. The decrease in credit-related income was driven primarily by an increase in foreclosed property expense in the first quarter of 2015, compared with the fourth quarter of 2014, and was partially offset by an increase in the company’s benefit for credit losses in the first quarter of 2015.

Fannie Mae says expects to remain profitable on an annual basis for the foreseeable future; however, the company expects its earnings in 2015 and future years will be substantially lower than its earnings for 2014, due primarily to the company’s expectation of substantially lower income from resolution agreements, continued declines in net interest income from its retained mortgage portfolio assets, and lower credit-related income.

Fannie Mae’s future financial results also will be affected by a number of other factors, including: the company’s guaranty fee rates; the volume of single-family mortgage originations in the future; the size, composition, and quality of its retained mortgage portfolio and guaranty book of business; and economic and housing market conditions.