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FANNIE MAE REPORTS SECOND QUARTER EARNINGS OF $402.0 MILLION, OR $1.47 PER SHARE; NET INCOME UP 21 PERCENT OVER SECOND QUARTER 1991

 FANNIE MAE REPORTS SECOND QUARTER EARNINGS OF $402.0 MILLION, OR $1.47 PER SHARE; NET INCOME UP 21 PERCENT OVER SECOND QUARTER 1991
 WASHINGTON, July 13 /PRNewswire/ -- The Federal National Mortgage Association (Fannie Mae) (NYSE: FNM) today reported net income for the second quarter of 1992 of $402.0 million, or $1.47 per share, fully diluted. This compares with earnings of $331.5 million or $1.21 per share for the second quarter of 1991 and $381.6 million or $1.39 per share for the first quarter of 1992.
 For the first six months of 1992 Fannie Mae's net income was $783.6 million, or $2.86 per share. This compares with $651.5 million or $2.40 per share for the same period of 1991.
 James A. Johnson, chairman and chief executive officer of Fannie Mae, said: "Our excellent second quarter performance demonstrates again the consistency and stability of Fannie Mae's earnings power. With a record $67 billion in combined portfolio purchases and mortgage-backed security issues, we were able to post an extremely strong earnings gain in spite of a decline in our net interest margin that resulted from increased refinancings in our mortgage portfolio."
 Lawrence M. Small, Fannie Mae's president and chief operating officer, said, "Business activity for the first six months of 1992 -- at $123 billion -- was only slightly lower than the 1991 full year total of $139 billion." Small added that as a result of these high volumes mortgage-backed securities outstanding rose to $413 billion, and the net mortgage portfolio grew to $140 billion.
 Commenting on credit measures, Small noted that the company's acquisition of foreclosed properties rose moderately to 2,391 in the second quarter from 2,238 in the first quarter, while charge-offs were $58.6 million compared with the first quarter's $56.7 million. Small also said that the serious delinquency rate for single-family loans fell to 0.60 percent in May 1992 -- the latest date for which figures are available -- down from 0.66 percent in February and equal to the rate in May 1991.
 Following are specific measures of Fannie Mae's performance for the second quarter of 1992:
 Investment Portfolio
 Net interest income rose to $518.2 million in the second quarter of 1992 from $488.9 million in the first quarter of 1992 and $437.4 million in the second quarter of 1991.
 The net interest margin averaged 139 basis points in the second quarter of 1992, compared with an average of 145 basis points in the first quarter of 1992 and 141 basis points in the second quarter of 1991.
 Fannie Mae's net investment balance -- mortgage loans held, less unamortized discount and deferred fees, plus other investments -- was $157 billion at the end of the second quarter of 1992, compared with $150 billion at the end of the first quarter of 1992 and $133 billion at the end of the second quarter of 1991.
 Fannie Mae's net mortgage portfolio was $140 billion at the end of the second quarter of 1992, compared with $134 billion at the end of the first quarter of 1992 and $120 billion at the end of the second quarter of 1991.
 Mortgage Commitments, Purchases and Sales
 Mandatory commitments issued to purchase mortgages from lenders, net of commitments to sell mortgages, were $8.7 billion in the second quarter of 1992, compared with $18.7 billion in the first quarter of 1992 and $7.7 billion in the second quarter of 1991.
 The company purchased a record $18.6 billion of mortgages in the second quarter of 1992, compared with $17.4 billion in the first quarter of 1992 and $10.5 billion in the second quarter of 1991. Mortgage sales were $4.2 billion in the second quarter of 1992, compared with $1.2 billion in the first quarter of 1992 and $2.0 billion in the second quarter of 1991. Purchases net of sales were $14.5 billion in the second quarter of 1992, compared with $16.2 billion in the first quarter of 1992 and $8.5 billion in the second quarter of 1991.
 MBS
 Lender-originated mortgage-backed securities issued were a record $48.3 billion in the second quarter of 1992. This compares with $38.2 billion in the first quarter of 1992 and $27.4 billion in the second quarter of 1991. Total mortgage-backed securities issued, which include MBS originated by Fannie Mae, were $53.8 billion in the second quarter of 1992, compared with $41.2 billion in the first quarter of 1992 and $29.7 billion in the second quarter of 1991.
 MBS outstanding at the end of the second quarter of 1992 totaled $413 billion, compared with $390 billion at the end of the first quarter of 1992 and $331 billion at the end of the second quarter of 1991.
 MBS guaranty fees increased to $203.8 million in the second quarter of 1992 from $193.6 million in the first quarter of 1992 and $163.6 million in the second quarter of 1991.
 Miscellaneous Income
 Miscellaneous income totaled $44.5 million for the second quarter of 1992, compared with $36.2 million for the first quarter of 1992 and $23.4 million for the second quarter of 1991.
 Other Income
 Second quarter results included a gain of $4.4 million on sales of mortgages, compared with a gain of $6.5 million in the first quarter of 1992 and a loss of $53.2 million in the second quarter of 1991. Losses from repurchase of debt were $13.0 million pre-tax ($8.7 million after tax) in the second quarter of 1992, compared with $9.7 million pre-tax ($6.3 million after tax) in the first quarter of 1992 and $130.6 million pre-tax ($86.2 million after tax) in the second quarter of 1991. There were no transactions in the second quarter of 1992 comparable to the $239.1 million of pre-tax income from a tax case settlement booked in the second quarter of 1991.
 Foreclosures and Inventory of Acquired Properties
 The company acquired 2,391 conventional single-family properties through foreclosure in the second quarter of 1992, compared with 2,238 properties in the first quarter of 1992 and 1,940 properties in the second quarter of 1991.
 The inventory of foreclosed property was 3,638 at the end of the second quarter of 1992, up from 3,544 at March 31, 1992, and 3,271 at June 30, 1991.
 Loan Charge-Offs and Provisions
 Charge-offs to Fannie Mae's allowance for loan losses were $58.6 million in the second quarter of 1992, compared with $56.7 million for the first quarter of 1992 and $51.1 million in the second quarter of 1991.
 The provision for losses was $80.0 million for both the second and first quarters of 1992 and $130.0 million for the second quarter of 1991. The allowance for loan losses was $748.7 million at June 30, 1992, compared with $727.3 million at March 31, 1992, and $651.5 million at June 30, 1991.
 Administrative Expenses
 Administrative expenses totaled $94.9 million for the second quarter of 1992, compared with $86.1 million for the first quarter of 1992 and $78.3 million for the second quarter of 1991.
 Capital
 Fannie Mae's capital, defined as shareholders' equity plus allowance for losses, was $6.9 billion at the end of the second quarter of 1992, compared with $6.6 billion at the end of the first quarter of 1992, and $5.6 billion at the end of the second quarter of 1991.
 Fannie Mae, the USA's Housing Partner, is a congressionally chartered, shareholder-owned company and the nation's largest investor in home mortgages.
 FEDERAL NATIONAL MORTGAGE ASSOCIATION
 Summary Statements of Operations
 Quarter Ended
 (Dollars in millions, except June 30, March 31, June 30,
 per share amounts) 1992 1992 1991
 Net interest income $ 518.2 $ 488.9 $ 437.4
 Guaranty fees 203.8 193.6 163.6
 Income from IRS settlement -- -- 239.1
 Gain (loss) on sales of mortgages 4.4 6.5 (53.2)
 Miscellaneous income, net 44.5 36.2 23.4
 Provision for losses (80.0) (80.0) (130.0)
 Administrative expenses (94.9) (86.1) (78.3)
 Income before federal income taxes 596.0 559.1 602.0
 Federal income taxes (185.3) (171.2) (184.3)
 Extraordinary loss-repurchase of
 debt (net of YTD taxes of
 $ 7.7 million) (8.7) (6.3) (86.2)
 Net income $ 402.0 $ 381.6 $ 331.5
 Earnings per share:
 Primary $ 1.47 $ 1.39 $ 1.21
 Fully diluted 1.47 1.39 1.21
 Cash dividends .34 .30 .26
 Average shares (fully diluted) in
 millions 274.2 274.5 274.1
 Six Months Ended
 (Dollars in millions, except June 30, June 30,
 per share amounts) 1992 1991
 Net interest income $1,007.1 $ 864.7
 Guaranty fees 397.4 319.0
 Income from IRS settlement -- 239.1
 Gain (loss) on sales of mortgages 10.9 (49.9)
 Miscellaneous income, net 80.7 42.1
 Provision for losses (160.0) (210.0)
 Administrative expenses (181.0) (150.1)
 Income before federal income taxes 1,155.1 1,054.9
 Federal income taxes (356.5) (317.2)
 Extraordinary loss-repurchase of
 debt (net of YTD taxes of
 $ 7.7 million) (15.0) (86.2)
 Net income $ 783.6 $ 651.5
 Earnings per share:
 Primary $ 2.86 $ 2.40
 Fully diluted 2.86 2.40
 Cash dividends .64 .48
 Average shares (fully diluted) in
 millions 274.4 272.0
 End of Period: June 30, March 31, June 30,
 1992 1992 1991
 Total assets $162,478.3 $155,165.0 $138,180.9
 Total investment
 portfolio (gross) 159,248.9 152,101.1 135,352.2
 Interest margin
 (last month average) 1.38 pct. 1.42 pct. 1.42 pct.
 Investment spread
 (last month average) .83 pct. .83 pct. .89 pct.
 Shareholders' equity $ 6,132.2 $ 5,829.6 $ 4,985.6
 Book value per share 22.46 21.35 18.28
 MBS outstanding 413,225.6 389,853.2 331,089.4
 Note: Shares outstanding at June 30, 1992, were 272,991,000.
 -0- 7/13/92
 /CONTACT: Tom Marder of the Federal National Mortgage Association, 202-752-7608/
 (FNM) CO: Federal National Mortgage Association ST: District of Columbia IN: FIN SU: E?RN


DC -- DC005 -- 8554 07/13/92 10:28 EDT
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