Freddie Mac rebounds with $2.92b net income in Q1

Freddie Mac reported net income of $2.92 billion for the first quarter, an increase of $5.84 billion from a net loss of $2.92 billion in the fourth quarter and up $715 million from $2.21 billion in the first quarter of 2017.

Comprehensive income for the quarter was $2.15 billion, increasing from the $3.31 billion loss in the fourth quarter but declining from the $2.23 billion in the year-ago period.

Freddie Mac said its first-quarter net income and comprehensive income both increased from the fourth quarter primarily driven by the write-down of its net deferred tax asset in the fourth quarter. First-quarter results also reflected a $0.4 billion benefit from the reduced corporate tax rate at the beginning of the quarter.

Freddie Mac provided approximately $80 billion in liquidity to the market in the three months ended March 31. This amount funded more than 282,000 single-family homes, approximately 124,000 of which were refinance loans, and approximately 152,000 multifamily rental units.

The company will not be required to make a dividend payment to the Treasury as it rebuilds its allowed $3 billion capital buffer. Under its purchase agreement with the Treasury, Freddie Mac has $140.2 billion in available funding. The amount was reduced following the funding of the draw request related to Freddie Mac’s $312 million negative net worth at Dec. 31.

“Freddie Mac delivered $2.2 billion of comprehensive income this quarter, despite a major change in interest rates,” CEO Donald Layton said. “In a period with no significant items and little impact from legacy asset dispositions, this demonstrated the increased stability of our earnings. We also continued our impressive record of innovation through a steady stream of real improvements by all three business lines. In short, our results this quarter provide a particularly clear view of our earnings capacity and the progress we’ve made in fulfilling our mission by creating a better housing finance system for lenders, investors, families, and taxpayers.”

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