Fannie Mae reported net income of $3.2 billion [1], comprehensive income of $3 billion, and a positive net worth of $4.2 billion for the third quarter. That means that Fannie Mae expects to pay the U.S. Department of Treasury [2] a $3 billion dividend in December.
Net revenues were up for the GSE. In Q3 net revenues were $5.6 billion. In Q2, they were $5.5 billion. Similarly, net interest income rose from $5.3 billion to $5.4 billion for the third quarter.
Fannie Mae's Q3 net income of $3.2 billion was an increase from Q2's net income of $2.9 billion and from Q3 2015's net income of $2.2 billion. Overall, Fannie Mae took the report as positive news, which it has not often been able to do in recent years.
“Today’s results reflect the strength of our business and our commitment to delivering innovations that make the mortgage process better for lenders,” said Timothy Mayopoulos, president and chief executive officer of Fannie Mae. “We have partnered with lenders to develop new solutions that meet their most important needs. We will continue to innovate so that we can help customers create a faster, safer, and, ultimately, fully digitized mortgage experience for borrowers.”
Net fair value losses were down. In Q3 they were $491 million, compared with $1.7 billion in Q2. Fannie Mae attributed the Q3 losses mainly to losses on Connecticut Avenue Securities debt.
Credit-related income was also down in Q3. Fannie Mae reported $563 million in credit-related income in the third quarter, compared with $1.5 billion in Q2. Fannie Mae attributed this to an increase in home prices, including distressed property valuations.
Single-family net income was $1.9 billion in Q3, driven primarily by guaranty fee income and credit-related income. This was also a drop. In Q2, the total was $2.7 billion. Single-family guaranty fee income remained at $3.3 billion for Q3.
Fannie Mae's solid Q3 report came two days after Freddie Mac announced a net income of $2.3 billion [3] for Q3, more than double its Q2 net income of $993 million.
Click here [1] to view Fannie Mae's complete Q3 earnings report.