Page 58 - July-August 2018 GSE Report Flip Book

FREDDIE MAC JJUALN. U- ARUYG. 22001188
FREDDIE MAC Freddie Mac reports net income of $2.5 billion for the second quarter
Freddie Mac reported $2.5 billion of net income in the second quarter, compared to $2.0 billion
in the year ago period. The company’s net interest declined, primarily driven by the continued
reduction of its mortgage portfolio, which was partially offset by continued growth in Freddie’s
single-family credit guarantee portfolio. The enterprise’s results also benefited from a non-
Management's Discussion and Analysis Consolidated Results of Operations
recurring litigation after-tax income of $264 million, related to certain non-agency mortgage-related sCecOuritNiesS, anOd lLowIeDr inAcoTmeEtaDx exRpenEseS, reUlatLedTtoSa reOducFtionOinPtheEstRatuAtorTy cIoOrpoNratSe tax rate.
You should read this discussion of our consolidated results of operations in conjunction with our condensed consolidated financial statements and accompanying notes.
CONSOLIDATED RESULTS OF OPERATIONS
The table below compares our summarized consolidated results of operations.
Change
Change
(Dollars in millions)
2Q 2018
2Q 2017
$
%
YTD 2018
YTD 2017
$
%
Net interest income $3,003 $3,379 ($376) (11)% $6,021 $7,174 ($1,153) (16)% Benefit (provision) for credit losses 60 422 (362) (86) (3) 538 (541) (101)
Net interest income after benefit (provision) for credit losses Non-interest income (loss):
Gains (losses) on extinguishment of debt
Derivative gains (losses)
Net impairment of available-for-sale securities recognized in earnings
Other gains (losses) on investment securities recognized in earnings
Other income (loss)
3,063 3,801
(348) 61 (409) (670) (580) 117 (697) (596) 1,011 694 317 46 1,132 1,109 23 2
(738) (19)
6,018
7,712
(1,694) (22)
(11) (4) 3,644 261 (1) (3) 2 67 (1) (16) 15 94
147 50 416 (1,096)
97 194 1,512 138
257 2,246
268 (1,398)
Total non-interest income (loss)
Non-interest expense:
Administrative expense
REO operations expense
Temporary Payroll Tax Cut Continuation Act of 2011 expense
Other expense
1,225 (294)
(558) (513) (15) (37)
(366) (330) (204) (126)
1,519 517
(45) (9) 22 59
(36) (11) (78) (62)
3,054
(1,078) (49)
(725) (401)
80
(1,024) (93)
(651) (202)
2,974 3,718
(54) (5) 44 47
(74) (11) (199) (99)
Total non-interest expense (1,143) (1,006) (137) (14) (2,253) (1,970) (283) (14)
Income (loss) before income tax (expense) benefit
3,145 2,501 644 26 6,819 5,822 997 17
Income tax (expense) benefit (642) (837) 195 23 (1,390) (1,947) 557 29
Net income (loss) 2,503 1,664 839 50 5,429 3,875 1,554 40
Total other comprehensive income
(loss), net of taxes and reclassification (68) 322 (390) (121) (844) 345 (1,189) (345) adjustments
Comprehensive income (loss) $2,435 $1,986 $449 23 % $4,585 $4,220 $365 9 %
Freddie Mac will remit a $1.6 billion dividend to Treasury in September, bringing the company’s cumulative dividend payments to Treasury to $114.0 billion.
On June 30, Freddie Mac reported a Serious Delinquency Rate of 0.82%, down 15 basis points from the first quarter of 2018 (0.97%).
© 2018 by Canfield Press, LLC. All rights reserved. www.canfieldpress.com 59
Freddie Mac Form 10-Q 9