Fannie Mae Net Rose 97% to $120.7 Million
WASHINGTON -- Federal National Mortgage Association's second-quarter profit rose 97% to $120.7 million, or $1.52 a share, primarily because of higher net interest income.</br></br>The strong results demonstrate "the company's reduced sensitivity to (fluctuations in) interest rates," said Chairman David O. Maxwell. Fannie Mae, as the company is known, has tried to protect itself against interest-rate shifts by generally matching the duration of its assets and its liabilities. "We expect the company's strong earnings to continue," Mr. Maxwell said.</br></br>Fannie Mae is a federally chartered, publicly traded concern that buys mortgages from lenders, holds some in its portfolio and packages the rest for sale as mortgage-backed securities.</br></br>The company's net interest income rose to $209.2 million in the second quarter from $111.2 million a year earlier, when net income was $61.3 million, or 74 cents a share.</br></br>Fannie Mae's mortgage portfolio stood at $99.2 billion at the end of the second quarter, compared with $90.3 billion a year earlier. The yield on the portfolio at the end of the quarter was 9.81%, compared with 10% at the end of the 1987 period.