On February 13, 2025, Federal Home Loan Mortgage Corp (FMCC, Financial) released its 8-K filing, showcasing a strong financial performance for the fourth quarter and full-year 2024. The company reported a net income of $3.2 billion for the fourth quarter, marking an 11% increase year-over-year, driven by higher net revenues. FMCC's net revenues for the quarter reached $6.3 billion, surpassing the analyst estimate of $5.159 billion, primarily due to increased net interest and non-interest income.
Company Overview
Federal Home Loan Mortgage Corp, commonly known as Freddie Mac, is a U.S.-based government-sponsored enterprise that invests in mortgage loans and mortgage-related securities. The company operates through two main segments: Single-family and Multifamily. The Single-family segment focuses on providing liquidity and support to the single-family mortgage market, while the Multifamily segment deals with the aggregation and securitization of multifamily loans. The majority of FMCC's revenue is generated from its Single-family segment.
Performance and Challenges
FMCC's performance in the fourth quarter of 2024 was notable, with net income increasing by 11% year-over-year. This growth was primarily driven by higher net revenues, which rose by 18% compared to the previous year. However, the company faced challenges with a provision for credit losses amounting to $0.1 billion, contrasting with a benefit for credit losses of $0.5 billion in the same period of 2023. This shift indicates potential risks in credit quality that could impact future profitability.
Financial Achievements
FMCC's financial achievements in 2024 were significant, with a full-year net income of $11.9 billion, up 13% from the previous year. The company's net revenues for the year totaled $23.9 billion, reflecting a 13% increase year-over-year. These achievements underscore FMCC's ability to navigate a challenging economic environment while maintaining robust revenue growth, which is crucial for sustaining its role in the housing finance system.
Key Financial Metrics
FMCC's consolidated statements reveal several important metrics:
| Metric | Fourth Quarter 2024 | Full-Year 2024 |
|---|---|---|
| Net Revenues | $6.3 billion | $23.9 billion |
| Net Income | $3.2 billion | $11.9 billion |
| Provision for Credit Losses | $0.1 billion | $0.5 billion |
These metrics highlight FMCC's strong revenue generation capabilities and its proactive approach to managing credit risks, which are vital for maintaining financial stability and investor confidence.
Analysis and Commentary
FMCC's performance in 2024 reflects its strategic focus on expanding its mortgage portfolio and enhancing liquidity in the housing market. The company's ability to increase net interest income by 6% year-over-year, driven by portfolio growth and lower funding costs, is a testament to its effective financial management. However, the increase in credit loss provisions suggests a cautious outlook on credit quality, which could pose challenges if economic conditions deteriorate.
Today Freddie Mac reported strong 2024 earnings of $11.9 billion and a net worth of $60 billion. We delivered $411 billion of liquidity into the U.S. housing finance system, helping 1.6 million families buy, refinance or rent a home in 2024." - Diana W. Reid, Chief Executive Officer
Overall, FMCC's financial results for 2024 demonstrate its resilience and adaptability in a dynamic market environment, positioning it well for future growth and stability.
Explore the complete 8-K earnings release (here) from Federal Home Loan Mortgage Corp for further details.
