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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


The table below displays the components of our fair value gains and losses.
Fair Value Gains (Losses), Net
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
 
(Dollars in millions)
Risk management derivatives fair value gains (losses) attributable to:
 
 
 
 
 
 
 
Net contractual interest expense accruals on interest rate swaps
$
(285
)
 
$
(223
)
 
$
(786
)
 
$
(702
)
Net change in fair value during the period
527

 
75

 
1,365

 
364

Total risk management derivatives fair value gains (losses), net
242

 
(148
)
 
579

 
(338
)
Mortgage commitment derivatives fair value gains (losses), net
118

 
(248
)
 
606

 
(520
)
Total derivatives fair value gains (losses), net
360

 
(396
)
 
1,185

 
(858
)
Trading securities gains (losses), net
(40
)
 
59

 
79

 
145

CAS fair value gains (losses), net
16

 
113

 
35

 
(218
)
Other, net
50

 
(65
)
 
361

 
(89
)
Fair value gains (losses), net
$
386

 
$
(289
)
 
$
1,660

 
$
(1,020
)
Fair value gains in the third quarter and first nine months of 2018 were primarily driven by:
increases in the fair value of our mortgage commitment derivatives due to gains on commitments to sell mortgage-related securities as a result of decreases in the prices of securities as interest rates rose during the commitment periods; and
increases in the fair value of our pay-fixed risk management derivatives due to an increase in longer-term swap rates during the periods.
Fair value losses in the third quarter and first nine months of 2017 were primarily driven by:
decreases in the fair value of our mortgage commitments due to losses on commitments to sell mortgage-related securities due to an increase in prices as interest rates decreased during most of the commitment periods; and
decreases in the fair value of our pay-fixed risk management derivatives due to declines in longer-term swap rates during the second quarter and most of the third quarter.
Administrative Expenses
Administrative expenses include salaries and employee benefits, professional services, occupancy and other miscellaneous expenses. Administrative expenses increased in the third quarter and first nine months of 2018, compared with the third quarter and first nine months of 2017, primarily due to an increase in salaries and professional services expense in support of our business resiliency activities and from severance expenses.

Fannie Mae Third Quarter 2018 Form 10-Q
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