Federally chartered corporation | ||||||||||||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
None | N/A | N/A |
Exhibit Number | Description of Exhibit | |||||||
99.1 | ||||||||
99.2 | ||||||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document |
FEDERAL HOME LOAN MORTGAGE CORPORATION | ||||||||
By: | /s/ | Christian M. Lown | ||||||
Christian M. Lown | ||||||||
Executive Vice President - Chief Financial Officer |
Exhibit 99.1 |
Market Liquidity Provided - $318 Billion | Homes and Rental Units Financed - 1.2 Million | Net Worth - $25.3 Billion | Total Mortgage Portfolio - $3.1 Trillion |
Consolidated | •Net income of $2.9 billion, an increase of 19% year-over-year, driven by higher net revenues and a credit reserve release •Net revenues of $5.2 billion, an increase of 4% year-over-year, driven by mortgage portfolio growth and higher average portfolio guarantee fee rates •Benefit for credit losses of $0.2 billion, driven by a credit reserve release due to realized house price appreciation and improving economic conditions •New business activity of $299 billion, down 11% year-over-year, as refinance activity moderated from historically high levels in the prior year. Year-to-date activity of $949 billion, up 34% year-over-year •Mortgage portfolio of $2,682 billion, up 23% year-over-year, driven by strong new business activity •Serious delinquency rate of 1.46%, down from 1.86% at June 30, 2021 and 3.04% at September 30, 2020, driven by the decline of loans in forbearance •Completed approximately 73,000 loan workouts •50% of mortgage portfolio covered by credit enhancements •New business activity of $18 billion, unchanged year-over-year. Year-to-date activity of $45 billion, down 6% year-over-year •Mortgage portfolio of $404 billion, up 10% year-over-year, driven by ongoing loan purchase and securitization activity •Delinquency rate, which does not include loans in forbearance, of 0.12%, down from 0.15% at June 30, 2021 and 0.13% at September 30, 2020 •94% of mortgage portfolio covered by credit enhancements | “We are pleased that Freddie Mac's third quarter results showed 19 percent year-over-year growth in net income and comprehensive income, which enabled us to add $2.9 billion to our net worth. These strong results allow the company to serve its mission of providing liquidity, stability and affordability to the housing market – and to do so expansively by making home possible for owners and renters across the country and in all economic environments.” Michael J. DeVito Chief Executive Officer | ||||||||||||
Net Revenues $5.2 Billion Net Income $2.9 Billion Comprehensive Income $2.9 Billion | ||||||||||||||
Single-Family | ||||||||||||||
Net Revenues $4.0 Billion Net Income $2.0 Billion Comprehensive Income $2.0 Billion | ||||||||||||||
Multifamily | ||||||||||||||
Net Revenues $1.3 Billion Net Income $0.9 Billion Comprehensive Income $0.9 Billion |
(Dollars in millions) | 3Q 2021 | 2Q 2021 | Change | 3Q 2020 | Change | ||||||||||||||||||||||||||||||
Net interest income | $4,418 | $4,767 | $(349) | $3,457 | $961 | ||||||||||||||||||||||||||||||
Guarantee income | 246 | 356 | (110) | 315 | (69) | ||||||||||||||||||||||||||||||
Investment gains (losses), net | 383 | 636 | (253) | 1,122 | (739) | ||||||||||||||||||||||||||||||
Other income (loss) | 200 | 107 | 93 | 172 | 28 | ||||||||||||||||||||||||||||||
Net revenues | 5,247 | 5,866 | (619) | 5,066 | 181 | ||||||||||||||||||||||||||||||
Benefit (provision) for credit losses | 243 | 740 | (497) | (327) | 570 | ||||||||||||||||||||||||||||||
Credit enhancement expense | (386) | (369) | (17) | (267) | (119) | ||||||||||||||||||||||||||||||
Benefit for (decrease in) credit enhancement recoveries | (60) | (193) | 133 | 20 | (80) | ||||||||||||||||||||||||||||||
Real estate owned (REO) operations income (expense) | 9 | (7) | 16 | (40) | 49 | ||||||||||||||||||||||||||||||
Credit-related income (expense) | (194) | 171 | (365) | (614) | 420 | ||||||||||||||||||||||||||||||
Administrative expense | (627) | (651) | 24 | (641) | 14 | ||||||||||||||||||||||||||||||
Temporary Payroll Tax Cut Continuation Act of 2011 expense | (602) | (570) | (32) | (467) | (135) | ||||||||||||||||||||||||||||||
Other expense | (178) | (179) | 1 | (237) | 59 | ||||||||||||||||||||||||||||||
Operating expense | (1,407) | (1,400) | (7) | (1,345) | (62) | ||||||||||||||||||||||||||||||
Income (loss) before income tax (expense) benefit | 3,646 | 4,637 | (991) | 3,107 | 539 | ||||||||||||||||||||||||||||||
Income tax (expense) benefit | (727) | (958) | 231 | (644) | (83) | ||||||||||||||||||||||||||||||
Net income (loss) | 2,919 | 3,679 | (760) | 2,463 | 456 | ||||||||||||||||||||||||||||||
Total other comprehensive income (loss), net of taxes and reclassification adjustments | (10) | (68) | 58 | (14) | 4 | ||||||||||||||||||||||||||||||
Comprehensive income (loss) | $2,909 | $3,611 | $(702) | $2,449 | $460 | ||||||||||||||||||||||||||||||
Conservatorship metrics (in billions) | |||||||||||||||||||||||||||||||||||
Net worth | $25.3 | $22.4 | $2.9 | $13.9 | $11.4 | ||||||||||||||||||||||||||||||
Senior preferred stock liquidation preference | 95.0 | 91.4 | 3.6 | 84.1 | 10.9 | ||||||||||||||||||||||||||||||
Remaining Treasury funding commitment | 140.2 | 140.2 | — | 140.2 | — | ||||||||||||||||||||||||||||||
Cumulative dividend payments to Treasury | 119.7 | 119.7 | — | 119.7 | — | ||||||||||||||||||||||||||||||
Cumulative draws from Treasury | 71.6 | 71.6 | — | 71.6 | — | ||||||||||||||||||||||||||||||
Single-Family Segment | ||
Financial Results |
(Dollars in millions) | 3Q 2021 | 2Q 2021 | Change | 3Q 2020 | Change | |||||||||||||||||||||||||||
Net interest income | $4,080 | $4,460 | $(380) | $3,168 | $912 | |||||||||||||||||||||||||||
Non-interest income | (119) | 255 | (374) | 251 | (370) | |||||||||||||||||||||||||||
Net revenues | 3,961 | 4,715 | (754) | 3,419 | 542 | |||||||||||||||||||||||||||
Credit-related income (expense) | (177) | 128 | (305) | (594) | 417 | |||||||||||||||||||||||||||
Operating expense | (1,251) | (1,245) | (6) | (1,208) | (43) | |||||||||||||||||||||||||||
Income (loss) before income tax (expense) benefit | 2,533 | 3,598 | (1,065) | 1,617 | 916 | |||||||||||||||||||||||||||
Income tax (expense) benefit | (505) | (743) | 238 | (335) | (170) | |||||||||||||||||||||||||||
Net income (loss) | 2,028 | 2,855 | (827) | 1,282 | 746 | |||||||||||||||||||||||||||
Total other comprehensive income (loss), net of taxes and reclassification adjustments | 18 | (74) | 92 | (10) | 28 | |||||||||||||||||||||||||||
Comprehensive income (loss) | $2,046 | $2,781 | $(735) | $1,272 | $774 |
Single-Family Segment | ||
Business Results |
3Q 2021 | 2Q 2021 | Change | 3Q 2020 | Change | ||||||||||||||||||||||||||||
New Business Statistics: | ||||||||||||||||||||||||||||||||
Average guarantee fee rate charged (bps) | 48 | 49 | (1) | 46 | 2 | |||||||||||||||||||||||||||
Weighted average original loan-to-value (LTV) (%) | 72 | 71 | 1 | 71 | 1 | |||||||||||||||||||||||||||
Weighted average original credit score | 750 | 754 | (4) | 761 | (11) | |||||||||||||||||||||||||||
First-time homebuyers (%)(1) | 46 | 47 | (1) | 46 | — | |||||||||||||||||||||||||||
Single-Family homes funded (in thousands) | 1,027 | 1,023 | 4 | 1,153 | (126) | |||||||||||||||||||||||||||
Purchase borrowers (in thousands) | 415 | 315 | 100 | 340 | 75 | |||||||||||||||||||||||||||
Refinance borrowers (in thousands) | 612 | 708 | (96) | 813 | (201) | |||||||||||||||||||||||||||
UPB covered by new CRT issuance (in billions) | $167 | $174 | $(7) | $168 | $(1) | |||||||||||||||||||||||||||
Portfolio Statistics: | ||||||||||||||||||||||||||||||||
Average guarantee fee rate charged (bps) | 46 | 46 | — | 43 | 3 | |||||||||||||||||||||||||||
Weighted average current LTV (%) | 55 | 56 | (1) | 59 | (4) | |||||||||||||||||||||||||||
Weighted average current credit score | 756 | 756 | — | 753 | 3 | |||||||||||||||||||||||||||
Loan count (in millions) | 12.8 | 12.5 | 0.3 | 11.6 | 1.2 | |||||||||||||||||||||||||||
Credit-Related Statistics: | ||||||||||||||||||||||||||||||||
Loan workout activity (in thousands) | 73 | 88 | (15) | 193 | (120) | |||||||||||||||||||||||||||
Loans in forbearance, based on loan count (%) | 1.15 | 1.67 | (0.52) | 2.95 | (1.80) | |||||||||||||||||||||||||||
Current (%) | 0.15 | 0.26 | (0.11) | N/A | N/A | |||||||||||||||||||||||||||
Past due (%) | 1.00 | 1.41 | (0.41) | 2.95 | (1.95) | |||||||||||||||||||||||||||
Credit enhancement coverage (%) | 50 | 49 | 1 | 51 | (1) |
Multifamily Segment | ||
Financial Results |
(Dollars in millions) | 3Q 2021 | 2Q 2021 | Change | 3Q 2020 | Change | |||||||||||||||||||||||||||
Net interest income | $338 | $307 | $31 | $289 | $49 | |||||||||||||||||||||||||||
Guarantee income | 266 | 346 | (80) | 275 | (9) | |||||||||||||||||||||||||||
Investment gains (losses), net | 630 | 499 | 131 | 1,040 | (410) | |||||||||||||||||||||||||||
Other income (loss) | 52 | (1) | 53 | 43 | 9 | |||||||||||||||||||||||||||
Net revenues | 1,286 | 1,151 | 135 | 1,647 | (361) | |||||||||||||||||||||||||||
Credit-related income (expense) | (17) | 43 | (60) | (20) | 3 | |||||||||||||||||||||||||||
Operating expense | (156) | (155) | (1) | (137) | (19) | |||||||||||||||||||||||||||
Income (loss) before income tax (expense) benefit | 1,113 | 1,039 | 74 | 1,490 | (377) | |||||||||||||||||||||||||||
Income tax (expense) benefit | (222) | (215) | (7) | (309) | 87 | |||||||||||||||||||||||||||
Net income (loss) | 891 | 824 | 67 | 1,181 | (290) | |||||||||||||||||||||||||||
Total other comprehensive income (loss), net of taxes and reclassification adjustments | (28) | 6 | (34) | (4) | (24) | |||||||||||||||||||||||||||
Comprehensive income (loss) | $863 | $830 | $33 | $1,177 | $(314) |
Multifamily Segment | ||
Business Results |
3Q 2021 | 2Q 2021 | Change | 3Q 2020 | Change | ||||||||||||||||||||||||||||
New Business Statistics: | ||||||||||||||||||||||||||||||||
Weighted average original LTV (%) | 67 | 68 | (1) | 66 | 1 | |||||||||||||||||||||||||||
Weighted average original debt service coverage ratio | 1.35 | 1.38 | (0.03) | 1.42 | (0.07) | |||||||||||||||||||||||||||
Number of rental units financed (in thousands) | 161 | 137 | 24 | 185 | (24) | |||||||||||||||||||||||||||
Affordable ≤ 80% of AMI (% of eligible units acquired) | 68 | 77 | (9) | 70 | (2) | |||||||||||||||||||||||||||
Affordable ≤ 120% of AMI (% of eligible units acquired) | 94 | 97 | (3) | 96 | (2) | |||||||||||||||||||||||||||
Guarantee Activity Statistics: | ||||||||||||||||||||||||||||||||
Average guarantee fee rate charged (bps) | 56 | 54 | 2 | 51 | 5 | |||||||||||||||||||||||||||
Guaranteed UPB (in billions) | $15 | $18 | $(3) | $21 | $(6) | |||||||||||||||||||||||||||
Portfolio Statistics: | ||||||||||||||||||||||||||||||||
Average guarantee fee rate charged (bps) | 42 | 41 | 1 | 38 | 4 | |||||||||||||||||||||||||||
Loan count (in thousands) | 30 | 30 | — | 28 | 2 | |||||||||||||||||||||||||||
Unit count (in thousands) | 4,624 | 4,627 | (3) | 4,450 | 174 | |||||||||||||||||||||||||||
Credit-Related Statistics: | ||||||||||||||||||||||||||||||||
Loans in forbearance, based on UPB (%) | 0.46 | 1.28 | (0.82) | 2.20 | (1.74) | |||||||||||||||||||||||||||
Loans in forbearance period (%) | 0.06 | 0.02 | 0.04 | 0.22 | (0.16) | |||||||||||||||||||||||||||
Loans in repayment period (%) | 0.40 | 1.26 | (0.86) | 1.98 | (1.58) | |||||||||||||||||||||||||||
Credit enhancement coverage (%) | 94 | 94 | — | 91 | 3 |
Media Contact: Frederick Solomon (703) 903-3861 | Investor Contact: Laurie Garthune (571) 382-4732 | ||||
(In millions, except share-related amounts) | 3Q 2021 | 2Q 2021 | 3Q 2020 | |||||||||||||||||
Net interest income | ||||||||||||||||||||
Interest income | $15,791 | $15,230 | $14,849 | |||||||||||||||||
Interest expense | (11,373) | (10,463) | (11,392) | |||||||||||||||||
Net interest income | 4,418 | 4,767 | 3,457 | |||||||||||||||||
Non-interest income (loss) | ||||||||||||||||||||
Guarantee income | 246 | 356 | 315 | |||||||||||||||||
Investment gains (losses), net | 383 | 636 | 1,122 | |||||||||||||||||
Other income (loss) | 200 | 107 | 172 | |||||||||||||||||
Non-interest income (loss) | 829 | 1,099 | 1,609 | |||||||||||||||||
Net revenues | 5,247 | 5,866 | 5,066 | |||||||||||||||||
Benefit (provision) for credit losses | 243 | 740 | (327) | |||||||||||||||||
Non-interest expense | ||||||||||||||||||||
Salaries and employee benefits | (352) | (346) | (334) | |||||||||||||||||
Professional services | (76) | (97) | (105) | |||||||||||||||||
Other administrative expense | (199) | (208) | (202) | |||||||||||||||||
Total administrative expense | (627) | (651) | (641) | |||||||||||||||||
Credit enhancement expense | (386) | (369) | (267) | |||||||||||||||||
Benefit for (decrease in) credit enhancement recoveries | (60) | (193) | 20 | |||||||||||||||||
REO operations income (expense) | 9 | (7) | (40) | |||||||||||||||||
Temporary Payroll Tax Cut Continuation Act of 2011 expense | (602) | (570) | (467) | |||||||||||||||||
Other expense | (178) | (179) | (237) | |||||||||||||||||
Non-interest expense | (1,844) | (1,969) | (1,632) | |||||||||||||||||
Income (loss) before income tax (expense) benefit | 3,646 | 4,637 | 3,107 | |||||||||||||||||
Income tax (expense) benefit | (727) | (958) | (644) | |||||||||||||||||
Net income (loss) | 2,919 | 3,679 | 2,463 | |||||||||||||||||
Other comprehensive income (loss), net of taxes and reclassification adjustments | ||||||||||||||||||||
Changes in unrealized gains (losses) related to available-for-sale securities | (14) | (73) | (16) | |||||||||||||||||
Changes in unrealized gains (losses) related to cash flow hedge relationships | 7 | 8 | 6 | |||||||||||||||||
Changes in defined benefit plans | (3) | (3) | (4) | |||||||||||||||||
Total other comprehensive income (loss), net of taxes and reclassification adjustments | (10) | (68) | (14) | |||||||||||||||||
Comprehensive income (loss) | $2,909 | $3,611 | $2,449 | |||||||||||||||||
Net income (loss) | $2,919 | $3,679 | $2,463 | |||||||||||||||||
Future increase in senior preferred stock liquidation preference | (2,909) | (3,611) | (2,449) | |||||||||||||||||
Net income (loss) attributable to common stockholders | $10 | $68 | $14 | |||||||||||||||||
Net income (loss) per common share — basic and diluted | $0.00 | $0.02 | $0.00 | |||||||||||||||||
Weighted average common shares outstanding (in millions) — basic and diluted | 3,234 | 3,234 | 3,234 |
September 30, | December 31, | |||||||||||||
(In millions, except share-related amounts) | 2021 | 2020 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents (includes $875 and $17,379 of restricted cash and cash equivalents) | $9,478 | $23,889 | ||||||||||||
Securities purchased under agreements to resell | 85,315 | 105,003 | ||||||||||||
Investment securities, at fair value | 56,930 | 59,825 | ||||||||||||
Mortgage loans held-for-sale (includes $8,436 and $14,199 at fair value) | 17,517 | 33,652 | ||||||||||||
Mortgage loans held-for-investment (net of allowance for credit losses of $4,531 and $5,732) | 2,715,597 | 2,350,236 | ||||||||||||
Accrued interest receivable (net of allowance of $157 and $140) | 7,490 | 7,754 | ||||||||||||
Derivative assets, net | 953 | 1,205 | ||||||||||||
Deferred tax assets, net | 6,099 | 6,557 | ||||||||||||
Other assets (includes $6,078 and $5,775 at fair value) | 38,605 | 39,294 | ||||||||||||
Total assets | $2,937,984 | $2,627,415 | ||||||||||||
Liabilities and equity | ||||||||||||||
Liabilities | ||||||||||||||
Accrued interest payable | $6,049 | $6,210 | ||||||||||||
Debt (includes $1,984 and $2,592 at fair value) | 2,895,426 | 2,592,546 | ||||||||||||
Derivative liabilities, net | 389 | 954 | ||||||||||||
Other liabilities | 10,809 | 11,292 | ||||||||||||
Total liabilities | 2,912,673 | 2,611,002 | ||||||||||||
Commitments and contingencies | ||||||||||||||
Equity | ||||||||||||||
Senior preferred stock (liquidation preference of $95,050 and $86,539) | 72,648 | 72,648 | ||||||||||||
Preferred stock, at redemption value | 14,109 | 14,109 | ||||||||||||
Common stock, $0.00 par value, 4,000,000,000 shares authorized, 725,863,886 shares issued and 650,059,553 shares and 650,059,292 shares outstanding | — | — | ||||||||||||
Additional paid-in capital | — | — | ||||||||||||
Retained earnings (accumulated deficit) | (57,737) | (67,102) | ||||||||||||
AOCI, net of taxes, related to: | ||||||||||||||
Available-for-sale securities | 328 | 810 | ||||||||||||
Cash flow hedge relationships | (181) | (206) | ||||||||||||
Defined benefit plans | 29 | 39 | ||||||||||||
Total AOCI, net of taxes | 176 | 643 | ||||||||||||
Treasury stock, at cost, 75,804,333 shares and 75,804,594 shares | (3,885) | (3,885) | ||||||||||||
Total equity | 25,311 | 16,413 | ||||||||||||
Total liabilities and equity | $2,937,984 | $2,627,415 | ||||||||||||
The table below presents the carrying value and classification of the assets and liabilities of consolidated variable interest entities (VIEs) on the company's condensed consolidated balance sheets. | ||||||||||||||
September 30, | December 31, | |||||||||||||
(In millions) | 2021 | 2020 | ||||||||||||
Condensed Consolidated Balance Sheet Line Item | ||||||||||||||
Assets: | ||||||||||||||
Mortgage loans held-for-investment | $2,671,954 | $2,273,347 | ||||||||||||
All other assets | 65,454 | 83,982 | ||||||||||||
Total assets of consolidated VIEs | $2,737,408 | $2,357,329 | ||||||||||||
Liabilities: | ||||||||||||||
Debt | $2,701,530 | $2,308,176 | ||||||||||||
All other liabilities | 5,731 | 5,610 | ||||||||||||
Total liabilities of consolidated VIEs | $2,707,261 | $2,313,786 |
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