Printer Friendly

FANNIE MAE REPORTS RECORD EARNINGS FOR 1991 OF $1.363 BILLION, OR $4.98 PER SHARE; NET INCOME UP 16 PERCENT OVER 1990

FANNIE MAE REPORTS RECORD EARNINGS FOR 1991 OF $1.363 BILLION, OR
 $4.98 PER SHARE; NET INCOME UP 16 PERCENT OVER 1990
 WASHINGTON, Jan. 13 /PRNewswire/ -- Federal National Mortgage Association (Fannie Mae) (NYSE: FNM) today reported net income for 1991 of $1.363 billion, or $4.98 per share, fully diluted. This compares with earnings of $1.173 billion or $4.49 per share for 1990. Earnings per share in 1991 reflect the impact of the exercise of equity warrants during the first quarter of 1991.
 "In a year of severe credit shortages in other parts of the economy, Fannie Mae supported the middle- to low- income housing market more than at any other time in the company's history, serving 1.7 million families and doing $139 billion in total business. With record earnings and volumes, our lowest rate of loan charge-offs in eight years, and the addition of $1.8 billion to our capital base -- we had a very good year," said James A. Johnson, chairman and chief executive officer of Fannie Mae.
 Roger E. Birk, Fannie Mae's president and chief operating officer, said that the company's performance in 1991 was fueled primarily by growth in outstanding Mortgage-Backed Securities (MBS) and the company's net mortgage portfolio. Specifically, 1991 net income increased due to:
 -- a 24 percent increase in the outstanding
 balance of MBS, to $372 billion;
 -- an 11 percent increase in the size of the
 company's net mortgage portfolio, to $126.5
 billion; and
 -- a 3 basis point increase in the net interest
 margin on investments, to an annual average
 of 142 basis points.
 Birk noted that Fannie Mae acquired 7,450 foreclosed properties in 1991, down from 8,006 properties in 1990, and that loan charge- offs fell to $205.3 million, down from $233.5 million the previous year. Birk said, "The reduction in loan losses coupled with a higher provision brought our loss reserve to $704 million, up $164.7 million from the end of 1990 and over three times 1991 charge-offs."
 Net income for the fourth quarter of 1991 was $361.0 million, or $1.31 per share. This compares with earnings of $350.7 million or $1.28 per share for the third quarter of 1991 and $307.7 million, or $1.19 per share, for the fourth quarter of 1990.
 Fourth quarter results included $16.8 million of gains on sales of mortgages, of which $11.3 million resulted from Fannie Mae's accommodation of customer requests. These gains were significantly offset by a $9.2 million pre-tax loss on the repurchase of debt, and a $5 million special contribution to the Fannie Mae Foundation.
 Following are specific measures of Fannie Mae's performance for 1991:
 Investment Portfolio
 For this year, the company's net interest income was $1.778 billion, an increase of $185.1 million, or 12 percent, from the $1.593 billion earned in 1990.
 In the fourth quarter of 1991, net interest income totaled $456.9 million, compared with $456.0 million for the third quarter of 1991. Net interest income for the fourth quarter of 1990 was $414.5 million.
 The net interest margin on the average investment portfolio during 1991 was 142 basis points, compared with 139 basis points during 1990. The net interest margin averaged 142 basis points in the fourth quarter of 1991, compared with an average of 144 basis points in the third quarter of 1991 and 141 basis points in the fourth quarter of 1990.
 Fannie Mae's net investment balance -- mortgage loans held, less unamortized discount and deferred fees, plus other investments -- was $140.7 billion at the end of 1991, compared with $134.0 billion at the end of the third quarter of 1991 and $128.1 billion at the end of 1990.
 Fannie Mae's net mortgage portfolio was $126.5 billion at the end of 1991, compared with $122.3 billion at the end of the third quarter of 1991 and $113.9 billion at the end of 1990.
 Mortgage Commitments, Purchases and Sales
 Mandatory commitments issued to purchase mortgages from lenders, net of commitments to sell mortgages, increased to $32.4 billion in 1991 from $18.4 billion in 1990. In the fourth quarter of 1991, mandatory commitments issued, net of commitments to sell, were $11.6 billion, compared with $6.4 billion in the third quarter of 1991 and $6.3 billion in the fourth quarter of 1990.
 The company purchased $37.2 billion of mortgages in 1991, compared with $24.0 billion in 1990. Mortgage sales were $7.2 billion in 1991, compared with $5.8 billion in 1990. Purchases net of sales in the fourth quarter of 1991 totaled $9.7 billion, compared with $6.4 billion in the third quarter of 1991 and $5.7 billion in the fourth quarter of 1990.
 MBS
 The company issued a record $112.9 billion of MBS in 1991, of which lenders originated $102.1 billion. In 1990, total MBS issues were $96.7 billion of which $91.2 billion was lender originated. In the fourth quarter of 1991, MBS issued totaled $33.1 billion, compared with $31.9 billion in the third quarter of 1991 and $24.3 billion in the fourth quarter of 1990.
 MBS outstanding at the end of 1991 totaled $372.0 billion, compared with $351.9 billion at the end of the third quarter of 1991 and $299.8 billion at the end of 1990.
 MBS guaranty fees increased to $674.9 million in 1991 from $536.2 million in 1990. In the fourth quarter of 1991, guaranty fees increased to $182.7 million from $173.2 million in the third quarter of 1991 and $148.5 million in the fourth quarter of 1990.
 Foreclosures and Inventory of Acquired Properties
 The company acquired 7,450 conventional single-family properties through foreclosure in 1991, compared with 8,006 properties in 1990. Acquisitions were 1,905 in the fourth quarter of 1991, compared with 1,913 in the third quarter and 1,952 in the fourth quarter of 1990.
 The inventory of acquired property stood at 3,295 at the end of the fourth quarter of 1991, down from 3,306 at September 30, 1991, and 3,585 at the end of December 1990.
 Loan Charge-Offs and Provisions
 Charge-offs to Fannie Mae's allowance for loan losses were $205.3 million in 1991, compared with $233.5 million in 1990. Fannie Mae's charge-off rate -- charge-offs divided by average portfolio and MBS outstanding -- was 5 basis points in 1991, down from 6 basis points in 1990 and the lowest since 1983. Charge-offs in the fourth quarter of 1991 were $52.2 million compared with $55.3 million for the third quarter and $56.7 million in the fourth quarter of 1990.
 The company recorded a provision for losses in 1991 of $370.0 million, compared with $310.0 million for 1990. The provision for losses was $80.0 million for both the fourth and third quarters of 1991 and the fourth quarter of 1990. The allowance for loan losses was $704.0 million at Dec. 31, 1991, compared with $539.3 million at Dec. 31, 1990.
 Capital
 Fannie Mae's capital, defined as shareholder's equity plus allowance for losses, was $6.3 billion at the end of the fourth quarter of 1991, compared with $5.9 billion at the end of the third quarter of 1991 and $4.5 billion at the end of the fourth quarter of 1990.
 Shares used in computing 1991 fully diluted earnings per share were 274.0 million compared with 261.3 million in 1990.
 Administrative Expenses
 Administrative expenses totaled $319.2 million in 1991, compared with $285.8 million in 1990. For the fourth quarter of 1991, administrative expenses were $87.6 million, compared with $81.5 million for the third quarter of 1991. Administrative expenses were $77.1 million for the fourth quarter of 1990.
 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 Dec. 31, Sept. 30, Dec. 31,
 per share amounts) 1991 1991 1990
 Net interest income $456.9 $456.0 $414.5
 Guaranty fees 182.7 173.2 148.5
 Income from IRS settlement -- -- --
 Gain (loss) on sales of
 mortgages 16.8 5.1 2.3
 Miscellaneous income, net 36.3 28.1 24.5
 Provision for losses (80.0) (80.0) (80.0)
 Administrative expenses (87.6) (81.5) (77.1)
 Income before federal income
 taxes 525.1 500.9 432.7
 Federal income taxes (158.1) (150.2) (125.0)
 Extraordinary loss-repurchase
 of debt (net of YTD taxes of
 $47.6 million) (6.0) -- --
 Net income $361.0 $350.7 $307.7
 Earnings per share:
 Primary $1.31 $1.28 $1.20
 Fully diluted 1.31 1.28 1.19
 Cash dividends 0.30 0.26 0.22
 Average shares (fully diluted)
 in millions 275.0 274.4 259.4
 Twelve Months Ended
 (Dollars in millions, except Dec. 31, Dec. 31,
 per share amounts) 1991 1990
 Net interest income $1,777.6 $1,592.5
 Guaranty fees 674.9 536.2
 Income from IRS settlement 239.1 --
 Gain (loss) on sales of
 mortgages (28.0) 7.0
 Miscellaneous income, net 106.5 107.6
 Provision for losses (370.0) (310.0)
 Administrative expenses (319.2) (285.8)
 Income before federal income
 taxes 2,080.9 1,647.5
 Federal income taxes (625.5) (474.1)
 Extraordinary loss-repurchase
 of debt (net of YTD taxes of
 $47.6 million) (92.2) --
 Net income $1,363.2 $1,173.4
 Earnings per share:
 Primary $4.99 $4.50
 Fully diluted 4.98 4.49
 Cash dividends 1.04 0.72
 Average shares (fully diluted)
 in millions 274.0 261.3
 Dec. 31, Sept. 30, Dec. 31,
 End of period: 1991 1991 1990
 Total assets $147,072.1 $139,619.0 $133,112.9
 Total investment
 portfolio (gross) 142,999.3 136,442.9 130,625.2
 Interest margin
 (last month average) 1.40 pct. 1.42 pct. 1.40 pct.
 Investment spread
 (last month average) 0.84 pct. 0.86 pct. 0.94 pct.
 Shareholders' equity $5,547.1 $5,267.4 $3,941.3
 Book value per share 20.32 19.30 16.54
 MBS outstanding 371,984.3 351,917.5 299,832.7
 Note: Shares outstanding at Dec. 31, 1991, were 272,988,000.
 -0- 1/13/92
 /CONTACT: Tom Marder of Fannie Mae, 202-752-7608/
 (FNM) CO: Federal National Mortgage Association ST: District of Columbia IN: FIN SU: ERN


MK-TW -- DC012 -- 9076 01/13/92 12:04 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jan 13, 1992
Words:1782
Previous Article:SINGAPORE AIRLINES GIVES BOEING ITS FIRST 1992 ORDER
Next Article:RAYTHEON UNIT WINS PHILADELPHIA ELECTRIC CONTRACTS VALUED AT UP TO $140 MILLION


Related Articles
SALLIE MAE REPORTS FOURTH QUARTER, FULL 1991 RESULTS
XEROX 1991 INCOME EVEN WITH YEAR AGO BEFORE SPECIAL ITEMS
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
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 THIRD QUARTER EARNINGS OF $412.9 MILLION, OR $1.51 PER SHARE; NET INCOME UP 18 PERCENT OVER THIRD QUARTER 1991
FANNIE MAE REPORTS RECORD 1992 EARNINGS PER SHARE OF $5.91, UP 19 PERCENT OVER $4.98 IN 1991.
FANNIE MAE REPORTS RECORD 1993 EARNINGS PER SHARE OF $6.82, UP 15 PERCENT OVER $5.91 IN 1992
Fannie Mae Reports Tenth Consecutive Year of Record Earnings; 1996 Earnings of $2.725 Billion and $2.48 Per Common Share
Fannie mae reports record 3Q financial results. (Business alert).

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters