WASHINGTON — Freddie Mac's net income jumped to $4.8 billion in the fourth quarter, more than double what it earned a quarter earlier, while yearly earnings were also higher, the government-sponsored enterprise announced Thursday.

The solid earnings were driven primarily by market-related gains resulting from higher longer-term interest rates, Freddie said. Executives said the performance showed that Freddie, whose 2016 earnings rose 22% to $7.8 billion, was a "transformed company."

The loan guarantee business is "growing and flourishing as new products and capabilities are helping customers do business with us," Freddie CEO Donald Layton said in a conference call with reporters.

Freddie Mac CEO Donald Layton
The loan guarantee business is "growing and flourishing as new products and capabilities are helping customers do business with us," Freddie Mac CEO Donald Layton says. Bloomberg News

Freddie also benefited from higher single-family and multifamily guarantee fee income in 2016. Single-family loan purchases totaled $393 billion in 2016, up 12% from 2015, primarily driven by refinancings. Freddie also purchased a "record" $56.8 billion in multifamily loans during the year, a 20% increase from 2015.

Overall, the single-family mortgage business generated $6.1 billion in fee income in 2016, up from $5.2 billion in 2015, while the multifamily business generated $1 billion in guarantee fee income in 2016, nearly unchanged year over year.

The GSE also benefited from a big swing in derivative values, posting a $274 million loss for 2016, compared with a $2.7 billion loss in 2015.

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