Freddie Mac announced fourth quarter 2008 and full year results today, after the closing bell. It made me curious to see what was the company’s current stock price. It closed at 42 cents a share today. It fell 2 cents to 40 cents a share in after hours trading.
If the company doesn’t raise its share price above a dollar soon its stock may be delisted. You may have read past blog entries about the promises that Freddie Mac made to financial regulators.
Anyway, the results that Freddie Mac released today don’t look promising. Outgoing CEO David Moffett attributed the losses to “mark-to-market items and credit-related losses,” but insisted that Freddie Mac provided liquidity (cash) to the housing market.
Here are some numbers:
Fourth quarter 2008 net loss of $23.9 billion, or $7.37 per diluted common share, compared to a net loss of $25.3 billion, or $19.44 per diluted common share, in the third quarter of 2008. Losses were driven primarily by net mark-to-market declines on the company’s derivative portfolio, guarantee asset and trading securities; increased credit-related expenses; and security impairments. The company also recognized an additional valuation allowance against its net deferred tax assets.
Full-year 2008 net loss of $50.1 billion, or $34.60 per diluted common share, compared to a net loss of $3.1 billion, or $5.37 per diluted common share, for the full-year 2007.
Net interest income of $2.6 billion in the fourth quarter of 2008, up $781 million from $1.8 billion in the third quarter of 2008. Net interest income for the full-year 2008 was $6.8 billion, up from $3.1 billion in 2007.
Freddie Mac’s Conservator has submitted a request to the U.S. Department of the Treasury (Treasury) for an additional $30.8 billion in funding for the company under the Senior Preferred Stock Purchase Agreement (Purchase Agreement) with Treasury.
And perhaps some bright spots:
In 2008, Freddie Mac purchased or guaranteed more than $460 billion in mortgage loans and mortgage-related securities, helping to finance more than 1.7 million single-family homes and 620,000 units of rental housing.
Freddie Mac’s foreclosure-prevention efforts enabled approximately 88,000 borrowers facing financial hardship to stay in their homes or sell their properties in 2008.
Full-year 2008 total administrative expenses declined by 10 percent from 2007 as the company took actions to reduce spending.
March 11, 2009.