Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2020

The following tables display our segment results.


	For the Three Months Ended June 30,
	2020										2019
	Single-Family		Multifamily		Total		Single-Family		Multifamily		Total
	(Dollars in millions)
Net interest income⁽¹⁾	$	4,939	$	838	$	5,777	$	4,419	$	808	$	5,227
Fee and other income⁽²⁾	71		19		90		88		25		113
Net revenues	5,010		857		5,867		4,507		833		5,340
Investment gains, net⁽³⁾	96		53		149		417		44		461
Fair value gains (losses), net⁽⁴⁾	(1,030)		12		(1,018)		(758)		4		(754)
Administrative expenses	(625)		(129)		(754)		(634)		(110)		(744)
Credit-related income (expense)⁽⁵⁾
Benefit (provision) for credit losses	219		(231)		(12)		1,252		(27)		1,225
Foreclosed property expense	(3)		(7)		(10)		(126)		(2)		(128)
Total credit-related income (expense)	216		(238)		(22)		1,126		(29)		1,097
TCCA fees⁽⁶⁾	(660)		—		(660)		(600)		—		(600)
Credit enhancement expense⁽⁷⁾	(307)		(53)		(360)		(229)		(47)		(276)
Change in expected credit enhancement recoveries⁽⁸⁾	208		65		273		—		—		—
Other expenses, net	(252)		(9)		(261)		(189)		(14)		(203)
Income before federal income taxes	2,656		558		3,214		3,640		681		4,321
Provision for federal income taxes	(556)		(113)		(669)		(769)		(120)		(889)
Net income	$	2,100	$	445	$	2,545	$	2,871	$	561	$	3,432


	For the Six Months Ended June 30,
	2020										2019
	Single-Family		Multifamily		Total		Single-Family		Multifamily		Total
	(Dollars in millions)
Net interest income⁽¹⁾	$	9,480	$	1,644	$	11,124	$	8,458	$	1,565	$	10,023
Fee and other income⁽²⁾	165		45		210		194		53		247
Net revenues	9,645		1,689		11,334		8,652		1,618		10,270
Investment gains (losses), net⁽³⁾	(56)		47		(9)		511		83		594
Fair value gains (losses), net⁽⁴⁾	(1,490)		196		(1,294)		(1,645)		60		(1,585)
Administrative expenses	(1,254)		(249)		(1,503)		(1,265)		(223)		(1,488)
Credit-related income (expense)⁽⁵⁾
Benefit (provision) for credit losses	(1,953)		(642)		(2,595)		1,913		(38)		1,875
Foreclosed property income (expense)	(81)		(9)		(90)		(269)		1		(268)
Total credit-related income (expense)	(2,034)		(651)		(2,685)		1,644		(37)		1,607
TCCA fees⁽⁶⁾	(1,297)		—		(1,297)		(1,193)		—		(1,193)
Credit enhancement expense⁽⁷⁾	(623)		(113)		(736)		(399)		(93)		(492)
Change in expected credit enhancement recoveries⁽⁸⁾	266		195		461		—		—		—
Other expenses, net	(415)		(64)		(479)		(356)		(9)		(365)
Income before federal income taxes	2,742		1,050		3,792		5,949		1,399		7,348
Provision for federal income taxes	(574)		(212)		(786)		(1,253)		(263)		(1,516)
Net income	$	2,168	$	838	$	3,006	$	4,696	$	1,136	$	5,832

⁽¹⁾Net interest income primarily consists of guaranty fees received as compensation for assuming and managing the credit risk on loans underlying Fannie Mae MBS held by third parties for the respective business segment, and the difference between the interest income earned on the respective business segment’s mortgage assets in our retained mortgage portfolio and the interest expense associated with the debt funding those assets. Revenues from single-family guaranty fees include revenues generated by the 10 basis point increase in guaranty fees pursuant to the TCCA, the incremental revenue from which is remitted to Treasury and not retained by us.

⁽²⁾Single-Family fee and other income primarily consists of compensation for engaging in structured transactions and providing other lender services. Multifamily fee and other income consists of fees associated with Multifamily business activities.

⁽³⁾Single-Family investment gains and losses primarily consist of gains and losses on the sale of mortgage assets. Multifamily investment gains and losses primarily consists of gains and losses on resecuritization activity.

⁽⁴⁾Single-Family fair value gains and losses primarily consist of fair value gains and losses on risk management and mortgage commitment derivatives, trading securities, fair value option debt, and other financial instruments associated with our single-family guaranty book of business. Multifamily fair value gains and losses primarily consist of fair value gains and losses on MBS commitment derivatives, trading securities and other financial instruments associated with our multifamily guaranty book of business.

⁽⁵⁾Credit-related income or expense is based on the guaranty book of business of the respective business segment and consists of the applicable segment’s benefit or provision for credit losses and foreclosed property income or expense on loans underlying the segment’s guaranty book of business. The presentation of our credit-related income or expense for the three and six months ended June 30, 2019 represents amounts recognized prior to our transition to the lifetime loss model prescribed by the CECL standard.

⁽⁶⁾Consists of the portion of our single-family guaranty fees that is remitted to Treasury pursuant to the TCCA.

⁽⁷⁾Single-family credit enhancement expense consists of costs associated with our freestanding credit enhancements, which include primarily costs associated with our CIRT, CAS and EPMI programs. Multifamily credit enhancement expense primarily consists of costs associated with our MCIRT and MCAS programs as well as amortization expense for certain lender risk-sharing programs. Excludes CAS transactions accounted for as debt instruments and credit risk transfer programs accounted for as derivative instruments.

⁽⁸⁾Consists of change in benefits recognized from our freestanding credit enhancements, primarily from our CAS and CIRT programs as well as certain lender risk-sharing arrangements, including our multifamily DUS program. See “Note 1, Summary of Significant Accounting Policies” for more information about our change in presentation.