First Quarter 2015 Results 1

Resource Center: 1-800-732-6643 

Contact: Pete Bakel

202-752-2034

Date: May 7, 2015

Fannie Mae Reports Net Income of $1.9 billion and 

Comprehensive Income of $1.8 billion for First Quarter 2015

• Fannie Mae reported net income of $1.9 billion and comprehensive income of $1.8 billion for the 

first quarter of 2015. 

• Fannie Mae expects to pay $1.8 billion in dividends to Treasury in June 2015. With the expected 

June dividend payment, the company will have paid a total of $138.2 billion in dividends to 

Treasury. Dividend payments do not reduce prior Treasury draws, which total $116.1 billion since 

2008.

• Fannie Mae provided approximately $124 billion in liquidity to the mortgage market in the first 

quarter of 2015, enabling families to buy, refinance, or rent homes.

• Fannie Mae helped distressed families retain their homes or avoid foreclosure through 

approximately 34,000 workout solutions in the first quarter of 2015.

WASHINGTON, DC — Fannie Mae (FNMA/OTC) reported net income of $1.9 billion for the first 

quarter of 2015 and comprehensive income of $1.8 billion. The company reported a positive net worth of 

$3.6 billion as of March 31, 2015 resulting in a dividend obligation to Treasury of $1.8 billion, which the 

company expects to pay in June 2015.

Fannie Mae’s net income of $1.9 billion and comprehensive income of $1.8 billion for the first quarter of 

2015 compares to net income of $1.3 billion and comprehensive income of $1.3 billion for the fourth 

quarter of 2014. Net income in the first quarter of 2015 increased compared with the fourth quarter of 

2014 due primarily to lower fair value losses in the first quarter of 2015.

Fannie Mae recognized a provision for federal income taxes of $870 million for the first quarter of 2015, 

which resulted in an effective tax rate of 31.6 percent.

“This was another quarter of strong financial performance. We continued to have solid revenues. While we 

experienced some interest rate volatility again this quarter, we expect to remain profitable on an annual 

basis for the foreseeable future,” said Timothy J. Mayopoulos, president and chief executive officer. “We 

continued to make progress against our goals, and we are managing the company on a basis that produces 

good economic value for the taxpayer. We are focused on delivering value to our business partners and 

making it simpler and easier for lenders to serve the housing market safely, efficiently, and profitably.”
First Quarter 2015 Results 2

SUMMARY OF FIRST QUARTER 2015 RESULTS

(Dollars in millions) 1Q15 4Q14 Variance 1Q15 1Q14 Variance

Net interest income $ 5,067 $ 5,142 $ (75) $ 5,067 $ 4,738 $ 329

Fee and other income 308 323 (15) 308 4,355 (4,047)

Net revenues 5,375 5,465 (90) 5,375 9,093 (3,718)

Investment gains, net 342 187 155 342 95 247

Fair value losses, net (1,919) (2,502) 583 (1,919) (1,190) (729)

Administrative expenses (723) (702) (21) (723) (672) (51)

Credit-related income

Benefit for credit losses 533 466 67 533 774 (241)

Foreclosed property (expense) income (473) (369) (104) (473) 262 (735)

Total credit-related income 60 97 (37) 60 1,036 (976)

Other non-interest expenses(1) (377) (415) 38 (377) (453) 76

Net losses and expenses (2,617) (3,335) 718 (2,617) (1,184) (1,433)

Income before federal income taxes 2,758 2,130 628 2,758 7,909 (5,151)

Provision for federal income taxes (870) (818) (52) (870) (2,584) 1,714

Net income 1,888 1,312 576 1,888 5,325 (3,437)

Net income attributable to Fannie Mae $ 1,888 $ 1,312 $ 576 $ 1,888 $ 5,325 $ (3,437)

Total comprehensive income attributable to Fannie Mae $ 1,796 $ 1,335 $ 461 $ 1,796 $ 5,697 $ (3,901)

Dividends distributed or available for distribution to

senior preferred stockholder $ (1,796) $ (1,920) $ 124 $ (1,796) $ (5,692) $ 3,896

(1) Consists of TCCA fees, debt extinguishment gains, net and other expenses.

Net revenues, which consist of net interest income and fee and other income, were $5.4 billion for the 

first quarter of 2015, compared with $5.5 billion for the fourth quarter of 2014. 

Net interest income, which includes guaranty fee revenue, was $5.1 billion for both the first quarter of 

2015 and the fourth quarter of 2014. Net interest income in the first quarter was driven by guaranty fee 

revenue, including amortization income from prepayments, and interest income earned on mortgage assets 

in the company’s retained mortgage portfolio. 

An increasing portion of Fannie Mae’s net interest income in recent years has been derived from guaranty 

fees rather than from interest income earned on the company’s retained mortgage portfolio assets. This is a 

result of both the impact of guaranty fee increases and the shrinking of the retained mortgage portfolio. 

The company estimates that a majority of its net interest income in the first quarter of 2015 was derived 

from guaranty fees on loans underlying its Fannie Mae MBS. The company expects that guaranty fees will 

continue to account for an increasing portion of its net interest income.
First Quarter 2015 Results 3

Net fair value losses were $1.9 billion in the first quarter of 2015, compared with $2.5 billion in the 

fourth quarter of 2014. The decrease in fair value losses in the first quarter of 2015 compared with the 

fourth quarter of 2014 was due primarily to smaller declines in longer-term interest rates negatively 

impacting the value of the company’s risk management derivatives. The estimated fair value of the 

company’s derivatives and securities may fluctuate substantially from period to period because of changes 

in interest rates, the yield curve, mortgage spreads, implied volatility, and activity related to these financial 

instruments. 

Credit-related income, which consists of a benefit for credit losses and foreclosed property expense or 

income, was $60 million in the first quarter of 2015, compared with $97 million in the fourth quarter of 

2014. The decrease in credit-related income was driven primarily by an increase in foreclosed property 

expense in the first quarter of 2015, compared with the fourth quarter of 2014, and was partially offset by 

an increase in the company’s benefit for credit losses in the first quarter of 2015.
First Quarter 2015 Results 4

VARIABILITY OF FINANCIAL RESULTS 

Fannie Mae expects to remain profitable on an annual basis for the foreseeable future; however, the 

company expects its earnings in 2015 and future years will be substantially lower than its earnings for 

2014, due primarily to the company’s expectation of substantially lower income from resolution 

agreements, continued declines in net interest income from its retained mortgage portfolio assets, and 

lower credit-related income. In addition, certain factors, such as changes in interest rates or home prices, 

could result in significant volatility in the company’s financial results from quarter to quarter or year to 

year. Fannie Mae’s future financial results also will be affected by a number of other factors, including: 

the company’s guaranty fee rates; the volume of single-family mortgage originations in the future; the 

size, composition, and quality of its retained mortgage portfolio and guaranty book of business; and 

economic and housing market conditions. The company’s expectations for its future financial results do 

not take into account the impact on its business of potential future legislative or regulatory changes, which 

could have a material impact on the company’s financial results, particularly the enactment of housing 

finance reform legislation. For additional information on factors that affect the company’s financial 

results, please refer to “Executive Summary” in the company’s quarterly report on Form 10-Q for the 

quarter ended March 31, 2015 (the “First Quarter 2015 Form 10-Q”).
First Quarter 2015 Results 5

SUMMARY OF FIRST QUARTER 2015 BUSINESS SEGMENT RESULTS

The business groups running Fannie Mae’s three reporting segments – its Single-Family business, its 

Multifamily business, and its Capital Markets group – engage in complementary business activities in 

pursuing the company’s goals of providing liquidity to the market, expanding access to credit, and helping 

the U.S. housing market recover.

(Dollars in millions) 1Q15 4Q14 Variance 1Q15 1Q14 Variance

Single-Family Segment:

Guaranty fee income(1) $ 3,040 $ 2,994 $ 46 $ 3,040 $ 2,870 $ 170

Credit-related (expense) income (7) 94 (101) (7) 1,002 (1,009)

TCCA fees(1) (382) (367) (15) (382) (322) (60)

Other expense, net(2) (539) (508) (31) (539) (514) (25)

Income before federal income taxes 2,112 2,213 (101) 2,112 3,036 (924)

Provision for federal income taxes (581) (599) 18 (581) (927) 346

Net income $ 1,531 $ 1,614 $ (83) $ 1,531 $ 2,109 $ (578)

Multifamily Segment:

Guaranty fee income $ 340 $ 337 $ 3 $ 340 $ 311 $ 29

Credit-related income 67 3 64 67 34 33

Other(3) 146 154 (8) 146 (24) 170

Income before federal income taxes 553 494 59 553 321 232

(Provision) benefit for federal income taxes (70) (121) 51 (70) 9 (79)

Net income $ 483 $ 373 $ 110 $ 483 $ 330 $ 153

Capital Markets Segment:

Net interest income $ 1,602 $ 1,651 $ (49) $ 1,602 $ 1,830 $ (228)

Investment gains, net 1,509 1,878 (369) 1,509 1,285 224

Fair value losses, net (1,970) (2,706) 736 (1,970) (1,337) (633)

Other(4) (323) (277) (46) (323) 3,723 (4,046)

Income before federal income taxes 818 546 272 818 5,501 (4,683)

Provision for federal income taxes (219) (98) (121) (219) (1,666) 1,447

Net income $ 599 $ 448 $ 151 $ 599 $ 3,835 $ (3,236)

(1) Includes the impact of a 10 basis point guaranty fee increase implemented pursuant to the Temporary Payroll Tax Cut Continuation Act 

of 2011 (the “TCCA”), the incremental revenue from which must be remitted to Treasury. The resulting revenue is included in guaranty 

fee income and the expense is recognized in “TCCA fees.”

(2) Consists of administrative expenses and other expenses.

(3) Consists of gains from partnership investments, administrative expenses, and fee and other income.

(4) Consists of guaranty fee expense, administrative expenses, and fee and other income.

Single-Family Business

• Single-Family net income was $1.5 billion in the first quarter of 2015, compared with $1.6 billion in 

the fourth quarter of 2014. Net income in the first quarter of 2015 was driven primarily by guaranty 

fee income.

• Single-Family guaranty fee income was $3.04 billion in the first quarter of 2015, compared with $2.99 

billion in the fourth quarter of 2014. Single-Family guaranty fee income increased in the first quarter 

of 2015 compared with the fourth quarter of 2014 as loans with higher guaranty fees have become a 
First Quarter 2015 Results 6

larger part of the company’s Single-Family guaranty book of business due to the cumulative impact of 

guaranty fee price increases implemented in 2012. The Single-Family guaranty book of business was 

$2.84 trillion as of March 31, 2015, compared with $2.85 trillion as of December 31, 2014. 

• Single-Family credit-related expense was $7 million in the first quarter of 2015, compared with creditrelated income of $94 million in the fourth quarter of 2014. The shift to credit-related expense in the 

first quarter of 2015 from credit-related income in the fourth quarter of 2014 was due primarily to an 

increase in foreclosed property expense in the first quarter of 2015, partially offset by an increase in 

the benefit for credit losses in the first quarter of 2015. 

• Single-Family other expense, net was $539 million in the first quarter of 2015, compared with $508 

million in the fourth quarter of 2014. 

Multifamily Business

• Multifamily net income was $483 million in the first quarter of 2015, compared with $373 million in 

the fourth quarter of 2014. Net income in the first quarter of 2015 was driven primarily by guaranty 

fee income. 

• Multifamily guaranty fee income was $340 million for the first quarter of 2015, compared with $337 

million for the fourth quarter of 2014. Multifamily guaranty fee income increased in the first quarter of 

2015 compared with the fourth quarter of 2014 as loans with higher guaranty fees have become a 

larger part of the company’s Multifamily guaranty book of business, while loans with lower guaranty 

fees continue to liquidate. The Multifamily guaranty book of business was $206.7 billion as of 

March 31, 2015, compared with $203.3 billion as of December 31, 2014.

• Multifamily credit-related income was $67 million for the first quarter of 2015, compared with $3 

million for the fourth quarter of 2014. The increase in Multifamily credit-related income in the first 

quarter of 2015 compared with the fourth quarter of 2014 was driven primarily by improvements in 

property valuations and loss severity trends.

• Multifamily other income was $146 million in the first quarter of 2015, compared with $154 million in 

the fourth quarter of 2014.

Capital Markets

• Capital Markets net income was $599 million in the first quarter of 2015, compared with $448 million

in the fourth quarter of 2014. Net income in the first quarter of 2015 was driven primarily by net 

interest income and investment gains, partially offset by fair value losses.

• Capital Markets net interest income was $1.6 billion for the first quarter of 2015, compared with $1.7 

billion for the fourth quarter of 2014. 

• Capital Markets net investment gains were $1.5 billion in the first quarter of 2015, compared with $1.9 

billion in the fourth quarter of 2014.

• Capital Markets net fair value losses were $2.0 billion in the first quarter of 2015, compared with $2.7 

billion in the fourth quarter of 2014. Net fair value losses for the first quarter of 2015 were due to fair 

value losses on risk management derivatives driven by declines in longer-term interest rates during the 

quarter.

• Capital Markets retained mortgage portfolio balance decreased to $411.7 billion as of March 31, 2015, 

compared with $413.3 billion as of December 31, 2014, resulting from purchases of $57.5 billion and 

sales and liquidations of $59.1 billion during the first quarter of 2015. 
First Quarter 2015 Results 7

BUILDING A SUSTAINABLE HOUSING FINANCE SYSTEM

In addition to continuing to provide liquidity and support to the mortgage market, Fannie Mae has 

invested significant resources toward helping to maintain a safer and sustainable housing finance system 

for today and build a safer and sustainable housing finance system for the future. The company is pursuing 

the strategic goals identified by its conservator, the Federal Housing Finance Agency (“FHFA”). These 

strategic goals are: maintain, in a safe and sound manner, credit availability and foreclosure prevention 

activities for new and refinanced mortgages to foster liquid, efficient, competitive, and resilient national 

housing finance markets; reduce taxpayer risk through increasing the role of private capital in the 

mortgage market; and build a new single-family securitization infrastructure for use by Fannie Mae and 

Freddie Mac and adaptable for use by other participants in the secondary market in the future. 

ABOUT FANNIE MAE’S CONSERVATORSHIP

Fannie Mae has operated under the conservatorship of FHFA since September 6, 2008. Fannie Mae has 

not received funds from Treasury since the first quarter of 2012. The funding the company has received 

under its senior preferred stock purchase agreement with Treasury has provided the company with the 

capital and liquidity needed to fulfill its mission of providing liquidity and support to the nation’s housing 

finance markets and to avoid a trigger of mandatory receivership under the Federal Housing Finance 

Regulatory Reform Act of 2008. For periods through March 31, 2015, Fannie Mae has requested 

cumulative draws totaling $116.1 billion and paid $136.4 billion in dividends to Treasury. Under the 

senior preferred stock purchase agreement, the payment of dividends does not offset prior draws. As a 

result, Treasury maintains a liquidation preference of $117.1 billion on the company’s senior preferred 

stock. 

Treasury Draws and Dividend Payments

(1) Treasury draw requests are shown in the period for which requested and do not include the initial $1.0 billion liquidation preference 

of Fannie Mae’s senior preferred stock, for which Fannie Mae did not receive any cash proceeds. The payment of dividends does 

not offset prior Treasury draws.

(2) Fannie Mae expects to pay a dividend for the second quarter of 2015 calculated based on the company’s net worth of $3.6 billion as 

of March 31, 2015 less a capital reserve amount of $1.8 billion.

(3) Amounts may not sum due to rounding.

In August 2012, the terms governing the company’s dividend obligations on the senior preferred stock 

were amended. The amended senior preferred stock purchase agreement does not allow the company to 

build a capital reserve. Beginning in 2013, the required senior preferred stock dividends each quarter equal 

the amount, if any, by which the company’s net worth as of the end of the immediately preceding fiscal 
First Quarter 2015 Results 8

quarter exceeds an applicable capital reserve amount. The capital reserve amount is $1.8 billion for each 

quarter of 2015 and will be reduced by $600 million each year until it reaches zero in 2018. 

The amount of remaining funding available to Fannie Mae under the senior preferred stock purchase 

agreement with Treasury is currently $117.6 billion. If the company were to draw additional funds from 

Treasury under the agreement in a future period, the amount of remaining funding under the agreement 

would be reduced by the amount of the company’s draw. Dividend payments Fannie Mae makes to 

Treasury do not restore or increase the amount of funding available to the company under the agreement.

Fannie Mae is not permitted to redeem the senior preferred stock prior to the termination of Treasury’s 

funding commitment under the senior preferred stock purchase agreement. The limited circumstances 

under which Treasury’s funding commitment will terminate are described in “Business—Conservatorship 

and Treasury Agreements” in the company’s annual report on Form 10-K for the year ended December 31, 

2014.

CREDIT QUALITY

While continuing to make it possible for families to buy, refinance, or rent homes, Fannie Mae has 

maintained responsible credit standards. Since 2009, Fannie Mae has seen the effect of the actions it took, 

beginning in 2008, to significantly strengthen its underwriting and eligibility standards and change its 

pricing to promote sustainable homeownership and stability in the housing market. Single-family 

conventional loans acquired by Fannie Mae in the first three months of 2015 had a weighted average 

borrower FICO credit score at origination of 748 and a weighted average original loan-to-value ratio of 74

percent.

Fannie Mae’s single-family conventional guaranty book of business as of March 31, 2015 consisted of 

single-family loans acquired prior to 2009; non-Refi PlusTM loans acquired beginning in 2009; loans 

acquired through the Administration’s Home Affordable Refinance Program® (“HARP®”); and other loans 

acquired pursuant to the company’s Refi Plusinitiative, excluding HARP loans. The company’s Refi Plus 

initiative, which started in April 2009 and includes HARP, provides expanded refinance opportunities for 

eligible Fannie Mae borrowers, and may involve the refinance of existing Fannie Mae loans with high 

loan-to-value ratios, including loans with loan-to-value ratios in excess of 100 percent. 
First Quarter 2015 Results 9

The single-family serious delinquency rate for Fannie Mae’s book of business has declined for 20 

consecutive quarters since the first quarter of 2010, and was 1.78 percent as of March 31, 2015, compared 

with 5.47 percent as of March 31, 2010. This decline is primarily the result of home retention solutions, 

foreclosure alternatives and completed foreclosures, improved loan payment performance, as well as the 

company’s acquisition of loans with stronger credit profiles since the beginning of 2009. Although Fannie 

Mae’s single-family serious delinquency rate has declined, the pace of declines has slowed in recent 

months and the company expects this trend to continue. The company’s single-family serious delinquency 

rate and the period of time that loans remain seriously delinquent continue to be negatively impacted by 

the length of time required to complete a foreclosure in some states. High levels of foreclosures, changes 

in state foreclosure laws, new federal and state servicing requirements imposed by regulatory actions and 

legal settlements, and the need for servicers to adapt to these changes have lengthened the time it takes to 

foreclose on a mortgage loan in a number of states, particularly in New York, Florida, and New Jersey. 

Other factors such as the pace of loan modifications, the timing and volume of any sales the company 

makes of non-performing loans, changes in home prices, unemployment levels, and other macroeconomic 

conditions also influence serious delinquency rates. 

Total loss reserves, which reflect the company’s estimate of the probable losses the company has incurred 

in its guaranty book of business, including concessions it granted borrowers upon modification of their 

loans, decreased to $32.9 billion as of March 31, 2015 from $38.2 billion as of December 31, 2014. The 

decrease in the company’s total loss reserves during the first quarter of 2015 was significantly impacted by 

the company’s approach to adopting the charge-off provisions of FHFA’s Advisory Bulletin AB 2012-12, 

as well as the company’s implementation of a change in accounting policy related to the treatment of 

interest previously accrued, but not collected, at the date that loans are placed on nonaccrual status. 
First Quarter 2015 Results 10

PROVIDING LIQUIDITY AND SUPPORT TO THE MARKET

Liquidity

Fannie Mae provided approximately $124 billion in liquidity to the mortgage market in the first quarter of 

2015, through its purchases of loans and guarantees of loans and securities, which resulted in 

approximately:

• 190,000 home purchases 

• 320,000 mortgage refinancings 

• 134,000 units of multifamily housing 

The company remained the largest single issuer of single-family mortgage-related securities in the 

secondary market in the first quarter of 2015, with an estimated market share of new single-family 

mortgage-related securities issuances of 40 percent, unchanged from the fourth quarter of 2014 and down 

slightly from 41 percent in the first quarter of 2014.

Fannie Mae also remained a continuous source of liquidity in the multifamily market. As of December 31, 

2014 (the latest date for which information is available), the company owned or guaranteed approximately 

19 percent of the outstanding debt on multifamily properties.
First Quarter 2015 Results 11

Refinancing Initiatives

Through the company’s Refi Plus initiative, which offers refinancing flexibility to eligible Fannie Mae 

borrowers and includes HARP, the company acquired approximately 54,000 loans in the first quarter of 

2015. Refinancings delivered to Fannie Mae through Refi Plus in the first quarter of 2015 reduced 

borrowers’ monthly mortgage payments by an average of $177. The company expects the volume of 

refinancings under HARP to continue to decline, due to a decrease in the population of borrowers with 

loans that have high LTV ratios who are willing to refinance and would benefit from refinancing.

Home Retention Solutions and Foreclosure Alternatives

To reduce the credit losses Fannie Mae ultimately incurs on its book of business, the company has been 

focusing its efforts on several strategies, including reducing defaults by offering home retention solutions, 

such as loan modifications. 

For the Three Months Ended March 31,

2015 2014

Unpaid

Principal

Balance

Number of

Loans

Unpaid

Principal

Balance

Number of

Loans

(Dollars in millions)

Home retention strategies:

Modifications $ 4,415 26,700 $ 6,191 36,044

Repayment plans and forbearances completed 257 1,868 296 2,255

Total home retention strategies 4,672 28,568 6,487 38,299

Foreclosure alternatives:

Short sales 758 3,689 1,374 6,804

Deeds-in-lieu of foreclosure 304 1,968 528 3,323

Total foreclosure alternatives 1,062 5,657 1,902 10,127

Total loan workouts $ 5,734 34,225 $ 8,389 48,426

Loan workouts as a percentage of single-family guaranty book of business 0.81% 0.79% 1.17% 1.10%

Fannie Mae views foreclosure as a last resort. For homeowners and communities in need, the company 

offers alternatives to foreclosure. In dealing with homeowners in distress, the company first seeks home 

retention solutions, which enable borrowers to stay in their homes, before turning to foreclosure 

alternatives.
First Quarter 2015 Results 12

• Fannie Mae provided approximately 34,000 loan workouts during the first quarter of 2015

enabling borrowers to avoid foreclosure.

• Fannie Mae completed approximately 27,000 loan modifications during the first quarter of 2015.

FORECLOSURES AND REO

When there is no viable home retention solution or foreclosure alternative that can be applied, the 

company seeks to move to foreclosure expeditiously in an effort to minimize prolonged delinquencies that 

can hurt local home values and destabilize communities.

For the Three Months Ended March 31,

2015 2014

Single-family foreclosed properties (number of properties):

Beginning of period inventory of single-family foreclosed properties (REO) 87,063 103,229

Total properties acquired through foreclosure 24,316 31,896

Dispositions of REO (32,060) (32,727)

End of period inventory of single-family foreclosed properties (REO) 79,319 102,398

Carrying value of single-family foreclosed properties (dollars in millions) $ 8,915 $ 10,492

Single-family foreclosure rate 0.56% 0.73%

• Fannie Mae acquired 24,316 single-family REO properties, primarily through foreclosure, in the 

first quarter of 2015, compared with 25,265 in the fourth quarter of 2014. 

• As of March 31, 2015, the company’s inventory of single-family REO properties was 79,319, 

compared with 87,063 as of December 31, 2014. The carrying value of the company’s singlefamily REO was $8.9 billion as of March 31, 2015.

• The company’s single-family foreclosure rate was 0.56 percent for the three months ended March 

31, 2015. This reflects the annualized total number of single-family properties acquired through 

foreclosure or deeds-in-lieu of foreclosure as a percentage of the total number of loans in Fannie 

Mae’s single-family guaranty book of business.

Fannie Mae’s financial statements for the first quarter of 2015 are available in the accompanying Annex; 

however, investors and interested parties should read the company’s First Quarter 2015 Form 10-Q, which 

was filed today with the Securities and Exchange Commission and is available on Fannie Mae’s Web site, 

www.fanniemae.com. The company provides further discussion of its financial results and condition, 

credit performance, and other matters in its First Quarter 2015 Form 10-Q. Additional information about 

the company’s credit performance, the characteristics of its guaranty book of business, its foreclosureprevention efforts, and other measures is contained in the “2015 First Quarter Credit Supplement” at 

www.fanniemae.com.

# # #

In this release, the company has presented a number of estimates, forecasts, expectations, and other forward-looking statements, including 

statements regarding: its future dividend payments to Treasury; the level and sources of its future revenues; the company’s future profitability; 

the level of the company’s earnings in 2015 and future years as compared with 2014; the drivers of the expected decline in the company’s 

earnings in 2015 and future years; the factors that will affect the company’s future financial results; the company’s future single-family 

serious delinquency rates; the future volume of its HARP refinancings; the future fair value of the company’s securities and derivatives; and 

the impact of the company’s actions to reduce credit losses. These estimates, forecasts, expectations, and statements are forward-looking 

statements based on the company’s current assumptions regarding numerous factors, including future interest rates and home prices, the 

future performance of its loans and the future guaranty fee rates applicable to the loans the company acquires. Actual results, and future 
First Quarter 2015 Results 13

projections, could be materially different from what is set forth in the forward-looking statements as a result of: home price changes; interest 

rate changes; unemployment rates; other macroeconomic and housing market variables; the company’s future serious delinquency rates; the 

company’s future guaranty fee pricing, and the impact of that pricing on the company’s guaranty fee revenues and competitive environment; 

government policy; credit availability, borrower behavior, including increases in the number of underwater borrowers who strategically 

default on their mortgage loan; the volume of loans it modifies; the effectiveness of its loss mitigation strategies and activities; significant 

changes in modification and foreclosure activity; the volume and pace of future nonperforming loan sales and their impact on the company’s 

results and serious delinquency rates; management of its real estate owned inventory and pursuit of contractual remedies; changes in the fair 

value of its assets and liabilities; future legislative or regulatory requirements or changes that have a significant impact on the company’s 

business, such as a requirement that the company implement a principal forgiveness program or the enactment of housing finance reform 

legislation; the company’s reliance on and future updates to the company’s models relating to loss reserves, including the assumptions used by 

these models; changes in generally accepted accounting principles; changes to the company’s accounting policies; whether the company’s 

counterparties meet their obligations in full; effects from activities the company takes to support the mortgage market and help borrowers; 

the company’s future objectives and activities in support of those objectives, including actions the company may take to reach additional 

underserved creditworthy borrowers; actions the company may be required to take by FHFA, as its conservator or as its regulator, such as 

changes in the type of business the company does or the implementation of a single GSE security; the conservatorship and its effect on the 

company’s business; the investment by Treasury and its effect on the company’s business; the uncertainty of the company’s future; challenges 

the company faces in retaining and hiring qualified employees; the deteriorated credit performance of many loans in the company’s guaranty 

book of business; a decrease in the company’s credit ratings; defaults by one or more institutional counterparties; resolution or settlement 

agreements the company may enter into with its counterparties; operational control weaknesses; changes in the fiscal and monetary policies 

of the Federal Reserve, including any change in the Federal Reserve’s policy toward the reinvestment of principal payments of mortgagebacked securities or any future sales of such securities; changes in the structure and regulation of the financial services industry; the 

company’s ability to access the debt markets; disruptions in the housing, credit, and stock markets; government investigations and litigation; 

the company’s reliance on and the performance of the company’s servicers; conditions in the foreclosure environment; global political risk; 

natural disasters, terrorist attacks, pandemics, or other major disruptive events; information security breaches; and many other factors, 

including those discussed in the “Risk Factors” section of and elsewhere in the company’s annual report on Form 10-K for the year ended 

December 31, 2014 and the company’s quarterly report on Form 10-Q for the quarter ended March 31, 2015, and elsewhere in this release.

Fannie Mae provides Web site addresses in its news releases solely for readers’ information. Other content or information appearing on these 

Web sites is not part of this release. 

Fannie Mae enables people to buy, refinance, or rent homes.

Visit us at www.fanniemae.com/progress

Follow us on Twitter: http://twitter.com/FannieMae
First Quarter 2015 Results 14

ANNEX

FANNIE MAE

(In conservatorship)

Condensed Consolidated Balance Sheets — (Unaudited)

(Dollars in millions, except share amounts)

As of

March 31, December 31,

2015 2014

ASSETS

Cash and cash equivalents $ 23,860 $ 22,023

Restricted cash (includes $36,921 and $27,515, respectively, related to consolidated trusts) 41,439 32,542

Federal funds sold and securities purchased under agreements to resell or similar arrangements 20,230 30,950

Investments in securities:

Trading, at fair value 31,286 31,504

Available-for-sale, at fair value (includes $468 and $596, respectively, related to consolidated trusts) 27,732 30,654

Total investments in securities 59,018 62,158

Mortgage loans:

Loans held for sale, at lower of cost or fair value 613 331

Loans held for investment, at amortized cost:

Of Fannie Mae 265,700 272,360

Of consolidated trusts (includes $15,570 and $15,629, respectively, at fair value) 2,778,623 2,782,344

Total loans held for investment 3,044,323 3,054,704

Allowance for loan losses (31,820) (35,541)

Total loans held for investment, net of allowance 3,012,503 3,019,163

Total mortgage loans 3,013,116 3,019,494

Accrued interest receivable, net (includes $7,259 and $7,169, respectively, related to consolidated trusts) 7,990 8,193

Acquired property, net 9,518 10,618

Deferred tax assets, net 41,983 42,206

Other assets 20,959 19,992

Total assets $ 3,238,113 $ 3,248,176

LIABILITIES AND EQUITY

Liabilities:

Accrued interest payable (includes $8,223 and $8,282, respectively, related to consolidated trusts) $ 10,324 $ 10,232

Federal funds purchased and securities sold under agreements to repurchase 87 50

Debt:

Of Fannie Mae (includes $7,920 and $6,403, respectively, at fair value) 448,740 460,443

Of consolidated trusts (includes $21,373 and $19,483, respectively, at fair value) 2,763,891 2,761,712

Other liabilities (includes $437 and $503, respectively, related to consolidated trusts) 11,475 12,019

Total liabilities 3,234,517 3,244,456

Commitments and contingencies — —

Fannie Mae stockholders’ equity:

Senior preferred stock, 1,000,000 shares issued and outstanding 117,149 117,149

Preferred stock, 700,000,000 shares are authorized—555,374,922 shares issued and outstanding 19,130 19,130

Common stock, no par value, no maximum authorization—1,308,762,703 shares issued and 1,158,082,750 shares

outstanding 687 687

Accumulated deficit (127,651) (127,618)

Accumulated other comprehensive income 1,641 1,733

Treasury stock, at cost, 150,679,953 shares (7,401) (7,401)

Total Fannie Mae stockholders’ equity 3,555 3,680

Noncontrolling interest 41 40

Total equity 3,596 3,720

Total liabilities and equity $ 3,238,113 $ 3,248,176

See Notes to Condensed Consolidated Financial Statements in the First Quarter 2015 Form 10-Q
First Quarter 2015 Results 15

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Operations and Comprehensive Income — (Unaudited)

(Dollars and shares in millions, except per share amounts)

For the Three Months

Ended March 31,

2015 2014

Interest income:

Trading securities $ 115 $ 127

Available-for-sale securities 376 440

Mortgage loans (includes $24,622 and $25,954, respectively, related to consolidated trusts) 27,044 28,588

Other 33 24

Total interest income 27,568 29,179

Interest expense:

Short-term debt 29 20

Long-term debt (includes $20,515 and $22,076, respectively, related to consolidated trusts) 22,472 24,421

Total interest expense 22,501 24,441

Net interest income 5,067 4,738

Benefit for credit losses 533 774

Net interest income after benefit for credit losses 5,600 5,512

Investment gains, net 342 95

Fair value losses, net (1,919) (1,190)

Debt extinguishment gains, net 8 —

Fee and other income 308 4,355

Non-interest (loss) income (1,261) 3,260

Administrative expenses:

Salaries and employee benefits 351 325

Professional services 271 242

Occupancy expenses 43 50

Other administrative expenses 58 55

Total administrative expenses 723 672

Foreclosed property expense (income) 473 (262)

Temporary Payroll Tax Cut Continuation Act of 2011 (“TCCA”) fees 382 322

Other expenses, net 3 131

Total expenses 1,581 863

Income before federal income taxes 2,758 7,909

Provision for federal income taxes (870) (2,584)

Net income 1,888 5,325

Other comprehensive income:

Changes in unrealized gains on available-for-sale securities, net of reclassification adjustments and taxes (91) 372

Other (1) —

Total other comprehensive (loss) income (92) 372

Total comprehensive income attributable to Fannie Mae $ 1,796 $ 5,697

Net income attributable to Fannie Mae 1,888 5,325

Dividends available for distribution to senior preferred stockholder (1,796) (5,692)

Net income (loss) attributable to common stockholders $ 92 $ (367)

Earnings (loss) per share:

Basic 0.02 (0.06)

Diluted 0.02 (0.06)

Weighted-average common shares outstanding:

Basic 5,762 5,762

Diluted 5,893 5,762

See Notes to Condensed Consolidated Financial Statements in the First Quarter 2015 Form 10-Q
First Quarter 2015 Results 16

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Cash Flows— (Unaudited)

(Dollars in millions)

For the Three Months

Ended March 31,

2015 2014

Net cash used in operating activities $ (1,249) $ (1,321)

Cash flows provided by investing activities:

Proceeds from maturities and paydowns of trading securities held for investment 296 333

Proceeds from sales of trading securities held for investment 483 486

Proceeds from maturities and paydowns of available-for-sale securities 1,232 1,446

Proceeds from sales of available-for-sale securities 2,171 35

Purchases of loans held for investment (44,460) (24,486)

Proceeds from repayments and sales of loans acquired as held for investment of Fannie Mae 5,348 6,217

Proceeds from repayments and sales of loans acquired as held for investment of consolidated trusts 124,849 80,610

Net change in restricted cash (8,897) 4,412

Advances to lenders (30,804) (20,501)

Proceeds from disposition of acquired property and preforeclosure sales 5,490 6,329

Net change in federal funds sold and securities purchased under agreements to resell or similar arrangements 10,720 26,225

Other, net 154 (385)

Net cash provided by investing activities 66,582 80,721

Cash flows used in financing activities:

Proceeds from issuance of debt of Fannie Mae 114,467 69,086

Payments to redeem debt of Fannie Mae (126,608) (117,058)

Proceeds from issuance of debt of consolidated trusts 68,943 58,216

Payments to redeem debt of consolidated trusts (118,409) (87,643)

Payments of cash dividends on senior preferred stock to Treasury (1,920) (7,191)

Other, net 31 18

Net cash used in financing activities (63,496) (84,572)

Net increase (decrease) in cash and cash equivalents 1,837 (5,172)

Cash and cash equivalents at beginning of period 22,023 19,228

Cash and cash equivalents at end of period $ 23,860 $ 14,056

Cash paid during the period for:

Interest $ 26,235 $ 26,567

Income taxes — 425

See Notes to Condensed Consolidated Financial Statements in the First Quarter 2015 Form 10-Q