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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 | Business Segments


(1) 
Calculated based on the average guaranty fee rate for our single-family guaranty arrangements during the period plus the recognition of any upfront cash payments over an estimated average life. Excludes the impact of a 10 basis point guaranty fee increase implemented pursuant to the TCCA, the incremental revenue from which is remitted to Treasury and not retained by us.
Single-Family Business Financial Results
Single-Family Business Financial Results
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2018
 
2017
 
Variance
 
2018
 
2017
 
Variance
 
(Dollars in millions)
Net interest income(1)
$
4,670

 
$
4,627

 
$
43

 
$
13,954

 
$
13,749

 
$
205

Fee and other income
79

 
1,005

 
(926
)
 
306

 
1,192

 
(886
)
Net revenues
4,749

 
5,632

 
(883
)
 
14,260

 
14,941

 
(681
)
Investment gains, net
146

 
286

 
(140
)
 
640

 
557

 
83

Fair value gains (losses), net
417

 
(300
)
 
717

 
1,729

 
(997
)
 
2,726

Administrative expenses
(636
)
 
(580
)
 
(56
)
 
(1,928
)
 
(1,781
)
 
(147
)
Credit-related income (expense)(2)
582

 
(294
)
 
876

 
1,775

 
1,113

 
662

TCCA fees(1)
(576
)
 
(531
)
 
(45
)
 
(1,698
)
 
(1,552
)
 
(146
)
Other expenses, net
(282
)
 
(320
)
 
38

 
(684
)
 
(731
)
 
47

Income before federal income taxes
4,400

 
3,893

 
507

 
14,094

 
11,550

 
2,544

Provision for federal income taxes
(938
)
 
(1,361
)
 
423

 
(2,998
)
 
(4,014
)
 
1,016

Net income
$
3,462

 
$
2,532

 
$
930

 
$
11,096

 
$
7,536

 
$
3,560

__________
(1) 
Reflects the impact of a 10 basis point guaranty fee increase implemented pursuant to the TCCA, the incremental revenue from which is remitted to Treasury. The resulting revenue is included in net interest income and the expense is recognized as “TCCA fees.”
(2) 
Consists of the benefit (provision) for credit losses and foreclosed property expense.
Net interest income
Single-family net interest income increased in the third quarter and first nine months of 2018 compared with the third quarter and first nine months of 2017. The drivers of net interest income for the single-family segment for all periods presented are consistent with the drivers of net interest income reported in our condensed consolidated statements of operations and comprehensive income for the same periods, which we discuss in “Consolidated Results of OperationsNet Interest Income.”
Fee and other income
Fee and other income decreased 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
We recognized fair value gains in the third quarter and first nine months of 2018, a shift from fair value losses recognized in the third quarter and first nine months of 2017. The drivers of fair value gains and losses for the single-family segment for all the periods presented are consistent with the drivers of fair value gains and losses reported in our condensed consolidated statements of operations and comprehensive income for the same periods, which we discuss in “Consolidated Results of OperationsFair Value Gains (Losses), Net.”
Credit-related income (expense)
We recognized credit-related income in the third quarter of 2018, a shift from credit-related expense in the third quarter of 2017. We recognized higher credit-related income in the first nine months of 2018 compared with the first nine months of 2017. The drivers of credit-related income and expense for the single-family segment for all

Fannie Mae Third Quarter 2018 Form 10-Q
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