Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 0

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 2
Chunk 0
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FREDDIE MAC  |  2024 Form 10-K14

Management's Discussion and AnalysisConsolidated Results of Operations 

The table below presents the components of net interest income.

Table 2 - Components of Net Interest Income Year Over Year ChangeYear Ended December 31,2024 vs. 20232023 vs. 2022(Dollars in millions)202420232022$%$%Guarantee net interest income:Contractual net interest income$15,338 $14,753 $14,020 $585 4%$733 5%Deferred fee income773 1,012 2,984 (239)(24)(1,972)(66)Total guarantee net interest income16,111 15,765 17,004 346 2(1,239)(7)Investments net interest income6,032 6,280 3,417 (248)(4)2,863 84Impact on net interest income from hedge accounting(2,406)(3,503)(2,416)1,097 31(1,087)(45)Net interest income$19,737 $18,542 $18,005 $1,195 6%$537 3%

Key Drivers:

n    Guarantee net interest income

l    2024 vs. 2023 - Increased primarily due to continued mortgage portfolio growth.

l    2023 vs. 2022 - Decreased primarily due to a decline in deferred fee income due to slower prepayments as a result of higher mortgage interest rates, partially offset by continued mortgage portfolio growth.

n    Investments net interest income

l    2024 vs. 2023 - Decreased primarily due to higher debt expense from issuance of higher yielding debt, partially offset by the impact of the increase in non-interest bearing funding.

l    2023 vs. 2022 - Increased primarily due to higher returns on securities purchased under agreements to resell as a result of higher short-term interest rates.

n    Impact on net interest income from hedge accounting

l    2024 vs. 2023 - Decreased due to lower expense related to debt in hedge accounting relationships.

l    2023 vs. 2022 - Expense increased primarily due to higher interest expense on derivatives in hedge relationships as a result of higher interest rates, partially offset by a favorable change in the earnings mismatch on qualifying fair value hedge relationships.

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