Fannie Mae Reports Q1 Earnings Drop

Fannie Mae experienced a significant earnings dip during the first quarter, with a reported net income of $1.1 billion and comprehensive income of $936 million, down considerably from its fourth quarter 2015 net income of $2.5 billion and comprehensive income of $2.3 billion.

Fannie Mae attributed its decrease in net income to fair value losses driven by decreases in longer-term interest rates. Its net revenues were $5 billion for the first quarter, compared with $5.3 billion for the fourth quarter of 2015, while its net interest income was $4.8 billion for the first quarter, down from $5.1 billion in the previous quarter. However, Fannie Mae’s credit-related income was $850 million in the first quarter, up from $732 million in the fourth quarter.

Although its first quarter earnings declined, the government-sponsored enterprise is forecasting a $919 million dividend payment to the Department of the Treasury in June.

“We continue to run our business well while supporting the improving housing market,” said Timothy J. 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.”

Earlier in the week, Freddie Mac reported a net loss of $354 million for the first quarter, a hefty drop from the net income of $2.2 billion in the fourth quarter of 2015. Freddie Mac also reported a comprehensive loss of $200 million for the first quarter, a dramatic plummet from the comprehensive income of $1.6 billion in the previous quarter.