Mortgage insurer Fannie Mae reported a net income of $4.6 billion for the second quarter (April through June), a big move up from $3.7 billion a year ago. Analysts note that higher interest rates produced some nice profits on the investments the GSE uses to hedge rate swings.

Second-quarter results made public on Thursday, August 6th highlighted the 14th straight profitable quarter for Fannie Mae.

Also of note, Fannie announced it plans to pay a dividend of $4.4 billion to the U.S. Treasury in September. Including next month’s payment, Fannie will have paid out a total more than $142.5 billion in dividends since its inception.

More on Fannie Mae’s second quarter report

Fannie reported it gained $2.6 billion in the second quarter on derivatives, the investments it uses to hedge against swings in interest rates. The company said it expects to remain profitable for the foreseeable future, but that earnings for this year and future years likely will be “substantially lower” than in 2014. Fannie earned $14.2 billion last year. Among the factors in the anticipated reduced earnings is a continued decline in interest income from mortgages held by the company, Fannie said.

The GSE’s net income attributable to common stockholders for the second quarter was $281 million ($0.05 per share), compared to net loss of $46 million (-$0.01 per share) in the second quarter last year.

Fannie Mae’s net income for the quarter surged to $4.64 billion from only $3.67 billion in the second quarter of the prior year.

Net revenues for the quarter topped out above $6.23 billion, a nice increase from $5.29 billion in the year-ago quarter.

Fannie’s net interest income for the quarter moved up to $5.68 billion from around $4.90 billion in 2Q the year before. Of interest, non-interest income was $3.68 billion, compared to a non-interest loss of $30 million a year ago.

Fannie Mae and Freddie Mac dominate the mortgage market in this country as they guarantee about half of all U.S. mortgages, which totals up to around $5 trillion. Together with other federal agencies, the two major mortgage GSEs back close to 90% of new home loans in the U.S. What “to do” with the GSE giants has been a hot topic among hedge funds, policy makers and the public.

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