By Ann Saphir
March 14 (Reuters) - The Federal Reserve pumped $79.6 billion into the U.S. Treasury last year, audited results showed on Friday, a big payday for the government thanks to the central bank's massive bond-buying program.
The income derived largely from $90.4 billion in interest on Treasury bonds and mortgage-backed securities. Total Fed bank assets stood at $4 trillion at the end of last year, according to the results, audited by Deloitte.
Preliminary results released in January showed profits of $77.7 billion in 2013.
The central bank has bought trillions of dollars of Treasuries and mortgage-backed securities to boost investment and hiring.
Last December, in a nod to better growth, it decided to start drawing its latest bond-buying program to a close, reducing what had been $85 billion in bond purchases per month in small increments.
It now buys $65 billion in bonds a month and is set to reduce the monthly purchases by another $10 billion when Fed officials meet next week.
The Fed regularly transfers its profits, known as remittances, to the Treasury in what amounts to payments to U.S. taxpayers. Fed officials on Friday declined to speculate what will happen to profits as the Fed pares its bond-buying.
The total remitted to the Treasury in 2013 was less than the record $88.4 billion sent in the prior year, when the Fed earned money from sales of short-term debt under a program known as Operation Twist. That program wound up at the end of 2012.
As the recovery proceeds and interest rates rise in response, the Fed's assets may decline in value on paper, although the central bank would only generate losses from its portfolio if the assets were sold.
The U.S. central bank has made clear that it does not intend to sell the assets it has bought for quite some time, if at all.
The Fed had interest expenses on depository institutions' reserve balances totalling $5.2 billion in 2013, the statement showed Friday.
The Fed now pays banks interest of a quarter of a percentage point on the massive reserves they hold at the central bank, which are in turn a direct result of the Fed's bond-buying program.
Fed policymakers have said that when the time comes to tighten monetary policy, they will increase the rate paid on reserves to keep banks from drawing them down and flooding the financial system. When they do, the Fed's interest expense can be expected to rise, potentially reducing the Fed's payments to the government.
On Friday, Fed officials said the 2013 financial statements told a positive story and demonstrated that the central bank remains a responsible steward of taxpayer resources.