Fannie Mae Stock Dips as 2025 Earnings Slip Despite Stronger Capital Base
13.02.2026 - 12:42:04
Fannie Mae, the government‑sponsored housing financier, came under selling pressure on Thursday, with the shares closing lower after the company published its fourth-quarter and full-year 2025 results. Investors focused on a drop in profitability even as the balance sheet continued to swell.
Key figures:
- Full-year 2025 net income: $14.4 billion (2024: $17.0 billion)
- Q4 2025 net income: $3.5 billion (Q4 2024: $4.1 billion)
- Equity: $109.0 billion (from $94.7 billion)
- Share price: down 7.6%
In the December quarter, Fannie Mae posted net revenues of about $7.3 billion, a level that held steady versus the prior year. Yet earnings contracted meaningfully. The primary driver was a larger cushion for credit losses in 2025, whereas the year-ago period benefited from releases of such reserves. This shift from a positive to a negative effect weighed on results.
Additionally, weaker fair-value gains in 2025 compared with 2024 contributed to the lower profitability. Taken together, these factors reduced overall earnings even as the core business remained largely stable.
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Balance sheet strengthens despite a dip in earnings
On the balance sheet, the company continued to fortify its capital. Fannie Mae’s equity rose to $109.0 billion by year-end, up from $94.7 billion a year earlier—an important gauge of financial resilience for an entity still under government oversight.
Concurrently, the lender reduced headcount by roughly 1,200 jobs over the past year as it seeks to align its cost structure with current market conditions and boost efficiency.
Market reaction and outlook
The quarterly and annual results prompted a selling response in the market. The stock dropped 7.6% on Thursday, reflecting investor concern about higher credit-reserve provisions and the path to earnings growth.
The earnings headlines come as the U.S. government nudges Fannie Mae and Freddie Mac to inject liquidity into the market for mortgage-backed securities in an effort to lower borrowing costs and support the housing market. In the near term, focus remains on how earnings trends evolve against that backdrop.
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