Freddie Mac's second quarter net income surged 61% to $3.8B, driven by a significant credit reserve release.

Freddie Mac reported second quarter net revenues of $6.0 billion, up 1% year-over-year, and net income of $3.8 billion, a 61% increase from the prior-year period. Earnings per share was reported as $0.00, compared to analyst expectations of $0.89.

Key Highlights

• Net income jumped 61% year-over-year to $3.8 billion, driven by a substantial swing in credit loss provisions.
• The company recorded a benefit for credit losses of $0.9 billion, compared to a provision of $0.8 billion in the same quarter last year, primarily due to a credit reserve release in the Single-Family segment.
• Net interest income increased 13% year-over-year to $6.0 billion, driven by continued mortgage portfolio growth.
• Net worth grew to $78 billion as of quarter-end, up 20% from $64.8 billion a year prior, as the company continues to build capital.