Freddie Mac 2015 Annual Report Download - page 79
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Management's Discussion and Analysis Our Business Segments | Investments
Freddie Mac 2015 Form 10-K 77
securities to replace certain of those securities that paid down, the new securities have lower yields
due to an overall lower interest rate environment. The decline in average yield earned was also driven
by an increase in the amount of premium amortization recognized for loans held by consolidated
trusts due to higher borrower prepayments. The amortization of loan premiums is generally offset by
the amortization of the related debt premiums that were recognized upon the issuance of a PC.
However, while loan premiums are amortized into net interest income, the related debt premiums are
amortized into other non-interest income.
• We expect our net interest yield and average investments portfolio balance to continue to decline in
2016 as we manage the size of our mortgage-related assets.