Fannie Mae, the nation's third-largest financial institution, said its second-quarter earnings grew to $957.6 million (91 cents a share), up 12.9 percent from $848 million (80 cents) in the second quarter of 1998.

For the first six months of 1999, the company, which buys home loans from banks and other mortgage lenders, earned $1.88 billion ($1.79), up 12.6 percent from $1.67 billion ($1.58) for the first half of 1998.

The District-based company said quarterly earnings gains were driven largely by an increase in interest income from home loans. The company said the home loans it holds -- rather than those it bundles and resells as mortgage-backed securities -- increased $117 billion in the second quarter.

Total interest income rose to $1.17 billion for the second quarter, from $1.03 billion for the same quarter a year ago.

Fannie Mae stock closed yesterday at $68.12 1/2, up 31 1/4 cents a share, on the New York Stock Exchange.

SLM Holding Corp., known as Sallie Mae, said earnings for the second quarter fell to $124 million (76 cents), down 13.9 percent from earnings of $144 million (69 cents) for the second quarter of 1998.

Sallie Mae, which is based in Reston and buys student loans, bought $3.5 billion of student loans in the second quarter, up almost 99 percent from $1.76 billion for the same quarter a year ago.

The company said that earnings for the first half of 1999 were $237 million ($1.44), down 16.3 percent from earnings of $283 million ($1.64) for the first half of 1998.

Those results are reported on the basis of generally accepted accounting principles, which treat the securitization of student loans as a sale.

SLM also reports its earnings on a cash basis, which treats the securitization of student loans as a financing. Under cash-basis accounting, the company said its earnings rose $124 million (75 cents) for the second quarter, up from $113 million (66 cents) for the second quarter of 1998.

SLM stock closed at $46.25, down $1.06 1/4 a share, on the New York Stock Exchange.

CAPTION: Fannie Mae (This graphic was not available)