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Fannie Mae 1Q net income slips to $1.1B

Expects to pay $919 million to Treasury

Fannie Mae managed to post a first-quarter net income of $1.1 billion, faring better than most others in the industry that posted a net loss due to the first quarter’s historically low interest rates.

Despite being in the positive, this is still down from the fourth quarter 2015 net income of $2.5 billion.  

Fannie Mae, while posting a $1.1 billion net income, wasn’t able to get away from fair value losses in the first quarter of 2016 that were, like others, driven by decreases in longer-term interest rates negatively impacting the value of the company’s risk management derivatives. This was partially offset by credit-related income for the quarter.

The government-sponsored enterprise recorded a comprehensive income of $936 million for the first quarter of 2016 and a positive net worth of $2.1 billion as of March 31, 2016, which the company expects will result in its paying Treasury a $919 million dividend in June 2016.

Fannie Mae paid a total of $10.3 billion in dividends to Treasury in 2015 and paid Treasury $2.9 billion in dividends in March 2016.

For periods through March 31, 2016, which doesn’t include this latest report, Fannie Mae has requested cumulative draws totaling $116.1 billion and paid $147.6 billion in dividends to Treasury.

“We continue to run our business well while supporting the improving housing market,” said Timothy Mayopoulos, president and CEO of Fannie Mae. “The changes we have made to the company have put us in a stronger position to fulfill our responsibility to deliver safe, affordable mortgage financing for our customers, in all markets at all times. We will continue to execute on behalf of our partners, drive further improvements to housing finance and our company, and serve those who house America.”

Freddie Mac reported a $354 million net loss in the first quarter, significantly down from its $2.2 billion net income recorded in the fourth quarter of 2015. The news was a reminder of the government-sponsored enterprise’s net loss of $475 million for the third quarter of 2015, which marked its first loss in four years.

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