Freddie Mac said revenue gains from higher net interest and non-interest income boosted its profit during the third quarter.
The secondary mortgage market company under government conservatorship on Thursday posted net income of $3.24 billion in the third quarter, up from $2.77 billion a year earlier.
The jump was driven by higher revenue and lower non-interest expense, partially offset by an increase in the provision for credit losses, Freddie Mac said.
Revenue jumped 19% to $6.81 billion, primarily driven by higher net interest income and higher non-interest income.
Net interest income climbed 7.7% to $5.88 billion, thanks to an increase in the balance of fully guaranteed securitizations in the multifamily mortgage portfolio. That came from a change in multifamily business strategy, as well as continued mortgage portfolio growth in the single-family business.
Meanwhile, noninterest income more than tripled, coming in at $933 million. Freddie Mac attributed the jump largely to net investment gains, whereas it mostly recorded net investment losses a year ago.
The provision for credit losses was $800 million, up from $175 million in the same period last year, largely tied to a credit reserve build in the single-family business, driven by an increase in projected future mortgage interest rates as well as new acquisitions, Freddie Mac said.
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