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SEC Filings

10-Q
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE filed this Form 10-Q on 11/02/2018
Entire Document
 
 
MD&A | Consolidated Results of Operations


 
For the Nine Months Ended September 30,
 
2018
 
2017
 
Average
Balance
 
Interest
Income/
Expense
 
Average
Rates
Earned/Paid
 
Average
Balance
 
Interest
Income/
Expense
 
Average
Rates
Earned/Paid
 
(Dollars in millions)
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Mortgage loans of Fannie Mae
$
156,168

 
$
5,187

 
4.43
%
 
$
190,552

 
$
5,950

 
4.16
%
Mortgage loans of consolidated trusts
3,068,521

 
79,877

 
3.47

 
2,951,478

 
75,155

 
3.40

Total mortgage loans(1)
3,224,689

 
85,064

 
3.52

 
3,142,030

 
81,105

 
3.44

Mortgage-related securities
10,670

 
321

 
4.01

 
13,796

 
368

 
3.55

Non-mortgage-related securities(2)
54,572

 
771

 
1.86

 
56,145

 
414

 
0.97

Federal funds sold and securities purchased under agreements to resell or similar arrangements
33,826

 
457

 
1.78

 
38,260

 
262

 
0.90

Advances to lenders
4,171

 
102

 
3.22

 
4,445

 
89

 
2.63

Total interest-earning assets
$
3,327,928

 
$
86,715

 
3.47
%
 
$
3,254,676

 
$
82,238

 
3.37
%
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Short-term funding debt
$
26,395

 
$
(328
)
 
1.64
%
 
$
30,231

 
$
(170
)
 
0.74
%
Long-term funding debt
204,543

 
(3,426
)
 
2.23

 
261,090

 
(4,098
)
 
2.09

Connecticut Avenue Securities® (“CAS”)
23,830

 
(1,007
)
 
5.63

 
18,940

 
(723
)
 
5.09

Total debt of Fannie Mae
254,768

 
(4,761
)
 
2.49

 
310,261

 
(4,991
)
 
2.14

Debt securities of consolidated trusts held by third parties
3,068,839

 
(65,976
)
 
2.87

 
2,953,203

 
(61,625
)
 
2.78

Total interest-bearing liabilities
$
3,323,607

 
$
(70,737
)
 
2.84
%
 
$
3,263,464

 
$
(66,616
)
 
2.72
%
Net interest income/net interest yield
 
 
$
15,978

 
0.64
%
 
 
 
$
15,622

 
0.64
%
__________
(1) 
Average balance includes mortgage loans on nonaccrual status. Typically, interest income on nonaccrual mortgage loans is recognized when cash is received. Interest income not recognized for loans on nonaccrual status was $86 million and $351 million, respectively, for the third quarter and first nine months of 2018, compared with $209 million and $611 million, respectively, for the third quarter and first nine months of 2017.
(2) 
Includes cash equivalents.
Fee and Other Income
Fee and other income includes transaction fees, multifamily fees, technology fees and other miscellaneous income. Fee and other income declined in the third quarter and first nine months of 2018, compared with the third quarter and first nine months of 2017, primarily due to $975 million of income in the third quarter of 2017 resulting from a settlement agreement resolving legal claims related to private-label securities we purchased.
Fair Value Gains (Losses), Net
The estimated fair value of our derivatives, trading securities and other financial instruments carried at fair value may fluctuate substantially from period to period because of changes in interest rates, the yield curve, mortgage and credit spreads and implied volatility, as well as activity related to these financial instruments. While the estimated fair value of our derivatives that serve to mitigate certain risk exposures may fluctuate, some of the financial instruments that generate these exposures are not recorded at fair value in our condensed consolidated financial statements.

Fannie Mae Third Quarter 2018 Form 10-Q
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