Earnings Rise at Fannie Mae

Fannie Mae, the nation’s largest mortgage finance company, said Thursday that its first-quarter earnings rose 12%, buoyed by a wave of homeowner refinancing.

Separately, SLM Holding Corp., better known as Sallie Mae, the financier of 1 in 3 U.S. student loans, said that first-quarter core earnings rose 17%, as its sales of loans packaged as securities grew.

Fannie Mae posted earnings of $824.2 million, or 77 cents a diluted share, matching analysts’ forecasts, compared with $734.1 million, or 67 cents, a year ago.

Net interest income at the government-sponsored company rose to $1.03 billion in the first quarter, from $949.7 million in January through March of 1997. Fannie Mae buys mortgages from banks and profits by packaging them into securities that it sells to investors.

Sallie Mae said its core earnings, which exclude government subsidies that keep the rates on student loans from falling below a given level, rose to $130.9 million, or 75 cents a share, from $112.1 million, or 60 cents, a year ago. The results matched analysts’ estimates.

Sallie Mae buys student loans from lenders and profits by packaging them into securities that it sells to investors.

The company managed $44.3 billion worth of loans at the end of the first quarter, up from $40.8 billion a year ago.