Fannie Mae Reports Earnings of $5 Billion for Fourth Quarter; $12.3 Billion for 2016

Lending Fannie Mae Department of Treasury Mortgage Lenders

On February 17, Fannie Mae announced that it had reported net income of $5 billion for the fourth quarter of 2016 and $12.3 billion for fiscal year 2016. These figures exceeded previous earnings of $3.2 billion for the third quarter of 2016 and $11.0 billion for fiscal year 2015. According to a company statement, “fair value gains in the fourth quarter of 2016 were due primarily to increases in longer-term interest rates positively impacting the value of the company’s risk management and mortgage commitment derivatives.” The fourth quarter 2016 net income, while higher than in the third quarter, was “partially offset by a shift to a provision for credit losses in the fourth quarter compared with a benefit for credit losses in the third quarter.” Fannie attributed its year-over-year net income increase to “a higher benefit for credit losses and lower foreclosed property expense” and “[l]ower fair value losses in 2016 compared to 2015.”

Following the strong results, Fannie said it would pay a $5.5 billion dividend to the U.S. Treasury in March, bringing its total dividend payments to $159.9 billion since it entered federal conservatorship in 2008.