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NEW YORK - Fannie Mae (OTC:FNMA) reported third-quarter net income of $3.9 billion on Wednesday, marking its 31st consecutive quarterly profit, though results fell short of analyst expectations.
The company’s shares edged down 0.56% in pre-market trading following the announcement.
The government-sponsored mortgage finance giant posted revenue of $7.31 billion for the quarter, below the consensus estimate of $8.1 billion. Earnings per share came in at $0.00, significantly missing analyst expectations of $0.68. Despite the miss, net revenues remained stable at $7.3 billion compared to the previous quarter, with guaranty fee income showing a slight increase.
Net income rose 16% from $3.3 billion in the second quarter, driven primarily by reductions in credit loss provisions and non-interest expenses, partially offset by lower fair value gains. The company’s net worth grew to $105.5 billion as of September 30, representing a $14.95 billion or 17% increase YoY.
"We delivered $3.9 billion in net income for the third quarter and $10.8 billion year to date, underscoring the strength and resilience of our earnings," said Chryssa C. Halley, Chief Financial Officer at Fannie Mae. "Net revenues remained steady at $7.3 billion this quarter, reflecting the consistency of our guaranty fee-driven business model."
The company’s single-family business saw acquisition volume rise to $90.4 billion in the third quarter, up from $84.1 billion in the second quarter. Meanwhile, the multifamily book of business grew 2.1% to $521.3 billion, with acquisition volume increasing to $18.7 billion from $17.4 billion in the previous quarter.
Fannie Mae’s efficiency ratio improved to 29.3% from 31.5% in the second quarter, while its illustrative return on average required CET1 capital rose to 10.3% from 9.9%.
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