Fannie Mae (FNMA.OB) Thursday reported a sharp increase in first-quarter profit, due mainly to some hefty tax benefits, as well as higher revenues stemming from a recovery in the housing market. The mortgage guarantor said it continues to benefit from better home prices and a decrease in loan delinquencies.
Fannie Mae indicated it will pay the U.S. Treasury dividends of $59.4 billion by June 30, following which it will have paid an aggregate of $95 billion in cash dividends to Treasury since conservatorship began.
The company said its senior preferred stock outstanding and held by Treasury remained at about $117.1 billion at March 2013.
Fannie Mae and its sister concern Freddie Mac (FMCC.OB) went bankrupt after the 2008 financial crisis and had to rely on federal aid totaling about $190 billion. Both companies have since recovered on the back of higher home prices and lower delinquencies.
Fannie Mae posted quarterly net income of $58.7 billion, which included a benefit of $50.6 billion related to valuation allowance on its deferred tax assets.
Pre-tax income for the quarter totaled $8.1 billion, compared with $2.7 billion a year ago, and is the largest in its history.
After including payments made or available toward preferred dividends, Fannie Mae reported net loss to common shares of $683 million or $0.12 per share, compared with net loss of $98 million or $0.02 per share last year.
Revenues for the quarter totaled $6.87 billion, compared with $5.57 billion in the prior year.
Total credit related income for the quarter was $1.2 billion, compared with a negative $2.3 billion last year.
On Wednesday, Freddie Mac reported a quarterly profit of $4.58 billion, which is the second largest in its history. Its dividend payment to the U.S. Treasury in the quarter totaled $5.8 billion, and will pay $7 billion in dividends by next month.
Fannie Mae stock is trading at $0.93, up 3.77%, on a volume of 43 million shares.
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