Freddie Mac (FRE) reported first-quarter results that were skewed due to new accounting principles, and announced it would request $10.6 billion in additional aid from the Treasury Department.
The government-sponsored mortgage guarantor saw a first-quarter loss of $6.69 billion, down from $9.98 billion in the first quarter of last year. Yet due to accounting changes, the loss per share actually rose during the quarter, widening to $2.45 a share from $2.39 a share, which includes preferred-dividend payments to Treasury.
Credit-loss provisions came in at $5.4 billion, falling from $7 billion in the previous quarter.
The company said it has a net-worth deficit of $10.5 billion, due to the adverse impact of the changing accounting principles and requested an additional $10.6 billion in assistance from Treasury, which brings the total amount of Treasury assistance to $62.3 billion for Freddie Mac.
The company boasted that it had focused on improving credit quality and strengthening underwriting in the first quarter.
“In this difficult economic environment, the stability that Freddie Mac brings to the mortgage market is especially vital. Though more needs to be done, we are seeing some signs of stabilization in the housing market, including house prices and sales in some key geographic areas,” Chief Executive Officer Charles E. Haldeman, Jr. said in a release. “But as we have noted for many months now, housing in America remains fragile with historically high delinquency and foreclosure levels, and high unemployment among the key risks.”
Shares of Freddie Mac fell 3 cents or 2.05% during the regular session to close at $1.43 on Wednesday. The stock fell another 5 cents or 3.50% in electronic trading after the market closed.
Chubb Corp 1Q Beats EstimatesFreddie Mac seeks additional $10.6 billion in aid
