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FANNIE MAE REPORTS FIRST QUARTER EARNINGS OF $381.6 MILLION, OR $1.39 PER SHARE; NET INCOME UP 19 PERCENT OVER FIRST QUARTER 1991

 FANNIE MAE REPORTS FIRST QUARTER EARNINGS OF $381.6 MILLION, OR $1.39 PER SHARE; NET INCOME UP 19 PERCENT OVER FIRST QUARTER 1991
 WASHINGTON, April 9 /PRNewswire/ -- Federal National Mortgage Association (Fannie Mae) (NYSE: FNM) today reported net income for the first quarter of 1992 of $381.6 million, or $1.39 per share, fully diluted. This compares with earnings of $320.0 million or $1.19 per share, for the first quarter of 1991 and $361.0 million or $1.31 per share, for the fourth quarter of 1991.
 James A. Johnson, chairman and chief executive officer of Fannie Mae, said: "In addition to a record earnings performance, the first quarter saw us far surpass our previous high in business volume. Our combined volume of portfolio purchases and mortgage-backed securities issues reached $55.6 billion, well above our previous high of $41.7 billion in the fourth quarter of last year and more than double the $23.3 billion in business we did in the first quarter of 1991."
 Lawrence M. Small, Fannie Mae's president and chief operating officer, said that the increase in net income in the first quarter compared with the fourth quarter of 1991 reflected:
 -- Growth of $32.0 million in net interest income, stemming from
 a $5.8 billion increase in the average net mortgage balance
 and a three basis point increase in the net interest margin on
 investments to 145 basis points.
 -- A $10.9 million increase in Mortgage-Backed Security guaranty
 fee income, reflecting a $17.4 billion increase in average MBS
 outstandings to $365.8 billion.
 Small noted that the strong first quarter increase in the net mortgage balance occurred despite high levels of refinancing that resulted in mortgage portfolio liquidations of $8.7 billion. The first quarter's annualized mortgage portfolio liquidation rate of 26.3 percent was only slightly below the previous high liquidation rate of 26.9 percent set in the third quarter of 1986.
 Small also noted that the company's acquisition of foreclosed properties rose to 2,238 in the first quarter of 1992 from 1,905 in the fourth quarter of 1991, reflecting higher acquisitions in the Northeast. Small said charge-offs to Fannie Mae's allowance for loan losses were $56.7 million in the first quarter, up slightly from $52.2 million in the fourth quarter of 1991.
 Following are specific measures of Fannie Mae's performance for the first quarter of 1992:
 Investment Portfolio
 Net interest income improved to $488.9 million in the first quarter of 1992 from $456.9 million in the fourth quarter of 1991 and $427.3 million in the first quarter of 1991.
 The net interest margin averaged 145 basis points in the first quarter of 1992, compared with an average of 142 basis points in the fourth quarter of 1991 and 140 basis points in the first quarter of 1991.
 Fannie Mae's net investment balance -- mortgage loans held, less unamortized discount and deferred fees, plus other investments -- was $149.9 billion at the end of the first quarter of 1992, compared with $140.7 billion at the end of the fourth quarter of 1991 and $130.7 billion at the end of the first quarter of 1991.
 Fannie Mae's net mortgage portfolio was $134.1 billion at the end of the first quarter of 1992, compared with $126.5 billion at the end of the fourth quarter of 1991 and $116.5 billion at the end of the first quarter of 1991.
 Mortgage Commitments, Purchases and Sales
 Mandatory commitments issued to purchase mortgages from lenders, net of commitments to sell mortgages, increased to $18.9 billion in the first quarter of 1992 from $11.6 billion in the fourth quarter of 1991 and $6.6 billion in the first quarter of 1991.
 The company purchased a record $17.4 billion of mortgages in the first quarter of 1992, compared with $11.8 billion in the fourth quarter of 1991 and $5.6 billion in the first quarter of 1991. Mortgage sales were $1.2 billion in the first quarter of 1992, compared with $2.1 billion in the fourth quarter of 1991 and $0.1 billion in the first quarter of 1991.
 MBS
 Lender-originated mortgage-backed securities issued were a record $38.2 billion in the first quarter of 1992. This compares with $29.9 billion in the fourth quarter of 1991 and $17.7 billion in the first quarter of 1991. Total mortgage-backed securities issued, which include MBS originated by Fannie Mae, were $41.2 billion in the first quarter of 1992, compared with $33.1 billion in the fourth quarter of 1991 and $18.2 billion in the first quarter of 1991.
 MBS outstanding at the end of the first quarter of 1992 totaled $389.9 billion, compared with $372.0 billion at the end of the fourth quarter of 1991 and $312.1 billion at the end of the first quarter of 1991.
 MBS guaranty fees increased to $193.6 million in the first quarter of 1992 from $182.7 million in the fourth quarter of 1991 and $155.4 million in the first quarter of 1991.
 Miscellaneous Income
 Miscellaneous income totaled $36.2 million for the first quarter of 1992, compared with $36.3 million for the fourth quarter of 1991 and $18.7 million for the first quarter of 1991.
 Other Income
 First quarter results included $6.5 million of gains on sales of mortgages, compared with $16.8 million in the fourth quarter of 1991 and $3.3 million in the first quarter of 1991. Losses from the repurchase of debt were $9.7 million pre-tax ($6.3 million after tax) in the first quarter, compared with $9.2 million pre-tax ($6.0 million after tax) in the fourth quarter of 1991. There were no losses from debt repurchases in the first quarter of 1991.
 Foreclosures and Inventory of Acquired Properties
 The company acquired 2,238 conventional single-family properties through foreclosure in the first quarter of 1992, compared with 1,905 properties in the fourth quarter of 1991 and 1,692 properties in the first quarter of 1991.
 The inventory of foreclosed property was 3,544 at the end of the first quarter of 1991, up from 3,295 at December 31, 1991, and 3,404 at March 31, 1991.
 Loan Charge-Offs and Provisions
 Charge-offs to Fannie Mae's allowance for loan losses were $56.7 million in the first quarter of 1992, compared with $52.2 million for the fourth quarter of 1991 and $46.7 million in the first quarter of 1991.
 The provision for losses was $80.0 million for the first quarter 1992 and for both the fourth and first quarters of 1991. The allowance for loan losses was $727.3 million at March 31, 1992, compared with $704.0 million at December 31, 1991 and $572.6 million at March 31, 1991.
 Administrative Expenses
 Administrative expenses totaled $86.1 million for the first quarter of 1992, compared with $87.6 million for the fourth quarter of 1991 and $71.8 million for the first quarter of 1991.
 Capital
 Fannie Mae's capital, defined as shareholders' equity plus allowance for losses, was $6.6 billion at the end of the first quarter of 1992, compared with $6.3 billion at the end of the fourth quarter of 1991, and $5.3 billion at the end of the first 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 March 31, Dec. 31, March 31,
 per share amounts) 1992 1991 1991
 Net interest income $488.9 $456.9 $427.3
 Guaranty fees 193.6 182.7 155.4
 Gain on sales of
 mortgages 6.5 16.8 3.3
 Miscellaneous income, net 36.2 36.3 18.7
 Provision for losses (80.0) (80.0) (80.0)
 Administrative expenses (86.1) (87.6) (71.8)
 Income before federal income
 taxes 559.1 525.1 452.9
 Federal income taxes (171.2) (158.1) (132.9)
 Extraordinary loss-repurchase
 of debt (net of taxes of
 $3.4 million in March 1992,
 and $3.2 million in
 December 1991) (6.3) (6.0) --
 Net income $381.6 $361.0 $320.0
 Earnings per share:
 Primary $1.39 $1.31 $1.19
 Fully diluted 1.39 1.31 1.19
 Cash dividends 0.30 0.30 0.22
 Average shares (fully diluted)
 in millions 274.5 275.0 269.5
 March 31, Dec. 31, March 31,
 End of period: 1992 1991 1991
 Total assets $155,165.0 $147,072.1 $135,410.8
 Total investment
 portfolio (gross) 152,101.1 142,999.3 133,195.6
 Interest margin
 (last month average) 1.42 pct. 1.40 pct. 1.39 pct.
 Investment spread
 (last month average) 0.83 0.84 0.89
 Shareholders' equity $5,829.6 $5,547.1 $4,724.2
 Book value per share 21.35 20.32 17.33
 MBS outstanding 389,853.2 371,984.3 312,100.7
 Note: Shares outstanding at March 31, 1992, were 273,089,000.
 -0- 4/9/92
 /CONTACT: Tom Marder of Fannie Mae, 202-752-7608/
 (FNM) CO: Federal National Mortgage Association ST: District of Columbia IN: FIN SU: ERN


SB -- DC004 -- 6635 04/09/92 09:36 EDT
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