“2014 marked another year of solid financial and operating performance for Freddie Mac, enabling us to return an additional $20 billion to the nation’s taxpayers,” Donald Layton, CEO of Freddie Mac, said.. “We made tremendous progress in materially reducing taxpayer exposure to risk, increasing market share between the GSEs through improved customer focus and service, and making our operations better through innovation and efficiency. At the same time, working with FHFA we helped to further strengthen the housing finance system in America.”
Freddie Mac’s 2014 net income and comprehensive income declined from 2013 by $41 billion and $42.2 billion, respectively. 2013 results included an income tax benefit of $23.3 billion that primarily resulted from the release of the deferred tax asset valuation allowance in the third quarter of 2013.
The decreases in 2014 net income and comprehensive income were further driven by:
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- A shift from derivative gains of $2.6 billion in 2013 to derivative losses of $8.3 billion in 2014 primarily due to declining long-term interest rates in 2014
- A shift from a benefit for credit losses of $2.5 billion in 2013 to a provision for credit losses of $0.1 billion in 2014 primarily due to lower home-price growth and smaller recoveries from representation and warranty settlements in 2014
- A decrease in net interest income of $2.2 billion primarily due to a continued decline in the company’s mortgage-related investments portfolio
Freddie Mac reported a net income of $7.7 billion for fiscal year 2014 compared to $48.7 billion for 2013. The company also reported comprehensive income of $9.4 billion for 2014 compared to $51.6 billion for 2013.