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Fannie Mae Turns To Profit In Q1

Fannie Mae (FNMA.OB) reported that its net income attributable to common stockholders for the first quarter of 2018 was $3.32 billion or $0.56 per share, compared to a loss of $6 million or break even per share in the prior year.

Net income for the quarter grew to $4.26 billion from $2.77 billion in the previous year.

Net interest income was $5.23 billion, compared with $5.35 billion in the prior year. Non-interest income for the quarter surged to $1.62 billion from $200 million last year.

Net revenues, which consisted of net interest income and fee and other income, were $5.55 billion, flat with the last year.

Fannie Mae said it expects to remain profitable on an annual basis for the foreseeable future; however, certain factors could result in significant volatility in the company's financial results from quarter to quarter or year to year.

Fannie Mae expects volatility from quarter to quarter in its financial results due to a number of factors, particularly changes in market conditions that result in fluctuations in the estimated fair value of the financial instruments that it marks to market through its earnings. Other factors that may result in volatility in the company's quarterly financial results include developments that affect its loss reserves, such as changes in interest rates, home prices or accounting standards, or events such as natural disasters.

Fannie Mae expects to pay Treasury a dividend of $938 million for the second quarter of 2018 by June 30, 2018.

The current dividend provisions of the senior preferred stock provide for quarterly dividends consisting of the amount, if any, by which the company's net worth as of the end of the immediately preceding fiscal quarter exceeds a $3.0 billion capital reserve amount. The company refers to this as a "net worth sweep" dividend. The company's net worth was $3.9 billion as of March 31, 2018.

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