Freddie Reports $1.3B Profit in 1Q

Freddie Mac chairman and chief executive Richard Syron says he is pleased with the mortgage company's first-half business results, including a $1.3 billion profit in the first quarter."We have increased our credit guarantee business by about 10% in the first half," Mr. Syron said during a teleconference late Tuesday. He noted that the portfolio growth was less than 4%, but said "we have not seen consistent opportunities for growth at attractive spreads." Freddie Mac just agreed to limit the growth of its portfolio to 2% a year. Freddie estimates that first-quarter earnings came it at $1.3 billion and says they would have been higher except that the mortgage company took a $300 million adjustment as part of a correction due to its 2005 audited results. "Business results have been pretty good," Mr. Syron said. Freddie Mac executives said the company had a fair value return on equity of 10% in the first quarter and can generate annual returns in the low to mid-teens without portfolio growth. Freddie Mac can be found online at http://www.freddiemac.com.