Printer Friendly

FANNIE MAE REPORTS THIRD QUARTER EARNINGS OF $477.2 MILLION, OR $1.74 PER SHARE; NET INCOME UP 16 PERCENT OVER THIRD QUARTER 1992

 WASHINGTON, Oct. 12 /PRNewswire/ -- The Federal National Mortgage Association (Fannie Mae) (NYSE: FNM) today reported net income for the third quarter of 1993 of $477.2 million, or $1.74 per share fully diluted. This compares with earnings of $412.9 million or $1.51 per share for the third quarter of 1992, and $458.8 million or $1.67 per share for the second quarter of 1993.
 For the first nine months of 1993, Fannie Mae's net income was $1.380 billion, or $5.02 per share, compared with $1.197 billion or $4.36 per share for the same period of 1992.
 James A. Johnson, chairman and chief executive officer of Fannie Mae, said, "Our third quarter results showed strength in virtually all key areas. Interest income was up significantly due to rapid growth in our mortgage portfolio, we had a healthy gain in guaranty fees, and booked record REMIC income." Johnson added that the company's strong results were achieved in spite of the effect of an increase in the corporate tax rate, retroactive to January 1993.
 Lawrence M. Small, Fannie Mae's president and chief operating officer, said that the company's performance in the third quarter was fueled by record business volumes. Small said, "Portfolio purchases and Mortgage-Backed Securities issues totaled $83 billion in the third quarter, and we now expect total business volume for all of 1993 to be close to $300 billion."
 Small noted that the third quarter results included $50.6 million in after-tax losses, consisting of $19.1 million from the call of debt at a premium and $31.5 million from the repurchase of high coupon debt. Small explained that the losses from high coupon debt buybacks were offset in part by increases in float and REMIC income stemming from the current high level of refinances. Small added that the buybacks would help reduce the negative effect of refinances on the company's interest margin.
 Small also said that while acquisitions of foreclosed single-family properties rose to 3,206 in the third quarter from 2,790 in the second quarter, the serious delinquency rate for single-family loans fell to a 14-year low of 0.56 percent. Small said that total credit-related expenses declined in the third quarter, and that multifamily charge-offs for the first nine months of 1993 were at their lowest level in six years.
 Following are specific measures of Fannie Mae's performance for the third quarter of 1993:
 Investment Portfolio
 Net interest income was $661.7 million in the third quarter of 1993 compared with $632.1 million in the second quarter of 1993 and $506.9 million in the third quarter of 1992.
 The net interest margin averaged 140 basis points in the third quarter of 1993, compared with an average of 145 basis points in the second quarter of 1993 and 133 basis points in the third quarter of 1992.
 Fannie Mae's net investment balance -- mortgage loans held, less unamortized discount and deferred fees, plus other investments -- was $206 billion at the end of the third quarter of 1993, compared with $187 billion at the end of the second quarter of 1993 and $164 billion at the end of the third quarter of 1992.
 Fannie Mae's net mortgage portfolio was $179 billion at the end of the third quarter of 1993, up at an annual rate of 22 percent compared with $170 billion at the end of the second quarter of 1993 and up by 25 percent compared with $143 billion at the end of the third quarter of 1992.
 Mortgage Commitments, Purchases and Sales
 Mandatory commitments issued to purchase mortgages from lenders, net of commitments to sell mortgages, were $23.1 billion in the third quarter of 1993 compared with $23.8 billion in the second quarter of 1993 and $18.6 billion in the third quarter of 1992.
 The company purchased $24.9 billion of mortgages in the third quarter of 1993 compared with $23.4 billion in the second quarter of 1993 and $14.6 billion in the third quarter of 1992. Mortgage sales were $2.5 billion in the third quarter of 1993, compared with $0.4 billion in the second quarter of 1993 and $3.1 billion in the third quarter of 1992.
 MBS
 Lender-originated mortgage-backed securities issued were a record $58.4 billion in the third quarter of 1993. This compares with $48.5 billion in the second quarter of 1993 and $38.2 billion in the third quarter of 1992. Total mortgage-backed securities issued, which include MBS originated by Fannie Mae, were $62.3 billion in the third quarter of 1993, compared with $50.4 billion in the second quarter of 1993 and $41.3 billion in the third quarter of 1992.
 MBS outstanding at the end of the third quarter of 1993 totaled $482 billion, compared with $465 billion at the end of the second quarter of 1993 and $430 billion at the end of the third quarter of 1992.
 MBS guaranty fees increased to $242.9 million in the third quarter of 1993 from $234.8 million in the second quarter of 1993 and $214.9 million in the third quarter of 1992.
 Miscellaneous Income
 Miscellaneous income totaled $66.2 million for the third quarter of 1993, compared with $49.4 million for the second quarter of 1993 and $51.3 million for the third quarter of 1992.
 REMIC fees, which are included in miscellaneous income, were a record $37.8 million in the third quarter of 1993, compared with $26.1 million in the second quarter of 1993 and $28.6 million in the third quarter of 1992.
 Other Income
 Third quarter results included $3.5 million of gains on sales of mortgages, compared with $0.8 million of losses in the second quarter of 1993 and $13.4 million of gains in the third quarter of 1992. Losses from the call or repurchase of debt were $79.7 million pre-tax ($50.6 million after tax) in the third quarter of 1993, compared with $60.3 million pre-tax ($39.8 million after tax) in the second quarter of 1993 and $14.2 million pre-tax ($9.3 million after tax) in the third quarter of 1992.
 Debt called or repurchased in the third quarter of 1993 totaled $5.6 billion, compared with $3.6 billion in the second quarter of 1993 and $2.7 billion in the third quarter of 1992.
 Foreclosures and Inventory of Acquired Properties
 The company acquired 3,206 conventional single-family properties through foreclosure in the third quarter of 1993, compared with 2,790 properties in the second quarter of 1993 and 2,470 properties in the third quarter of 1992.
 The inventory of foreclosed property was 5,459 at the end of the third quarter of 1993, up from 4,952 at June 30, 1993, and 4,001 at Sept. 30, 1992.
 Credit-Related Expenses and Loan Charge-Offs
 The 1993 results reflect the adoption of a new AICPA standard related to the accounting for foreclosed assets. Under this new standard, foreclosure, holding and disposition costs, which were previously charged against the loss allowance, are recorded as foreclosed property expenses.
 Total credit-related expenses, which include foreclosed property expenses and the provision for loan losses, were $76.2 million in the third quarter of 1993 compared with $81.5 million in the second quarter of 1993. Credit related expenses were $80.0 million in the third quarter of 1992.
 Charge-offs under the new standard were $28.5 million in the third quarter of 1993, compared with $32.4 million in the second quarter of 1993. Charge-offs under the previous standard (all foreclosure-related costs) were $62.9 million in the third quarter of 1992.
 The allowance for loan losses was $824 million at Sept. 30, 1993, compared with $808 million at June 30, 1993 and $766 million at Sept. 30, 1992.
 Administrative Expenses
 Administrative expenses totaled $110.0 million for the third quarter of 1993, compared with $106.5 million for the second quarter of 1993 and $96.9 million for the third quarter of 1992.
 Federal Income Taxes
 Third quarter results reflect additional federal income taxes of $9.2 million resulting from the increase in the corporate income tax rate from 34 to 35 percent retroactive to Jan. 1, 1993, as provided for in the Omnibus Budget Reconciliation Act of 1993. This amount is net of a deferred tax benefit of $9.3 million.
 Capital
 Fannie Mae's capital, defined as shareholders' equity plus allowance for losses, was $8.5 billion at the end of the third quarter of 1993, compared with $8.2 billion at the end of the second quarter of 1993, and $7.2 billion at the end of the third quarter of 1992.
 During the third quarter of 1993, the company repurchased 0.4 million shares of common stock. The shares were purchased to offset the dilutive effect of shares previously issued or anticipated to be issued under employee stock related benefit plans. As of Sept. 30, 1993, Fannie Mae had 273 million shares outstanding.
 At Sept. 30, 1993, Fannie Mae met the applicable capital standards established by the Federal Housing Enterprises Safety and Soundness Act of 1992.
 Fannie Mae is a congressionally chartered, shareholder-owned company and the nation's largest source of funds for home mortgages.
 FANNIE MAE
 Summary Statements of Operations
 (Dollars in millions, except per share amounts)
 Quarter Ended
 Sept. 30, June 30, Sept. 30
 1993 1993 1992
 Net interest income $ 661.7 $ 632.1 $ 506.9
 Guaranty fees 242.9 234.8 214.9
 Gain (loss) on sales
 of mortgages 3.5 (0.8) 13.4
 Miscellaneous income, net 66.2 49.4 51.3
 Provision for losses (45.0) (45.0) (80.0)
 Foreclosed property
 expenses (31.2) (36.5) --
 Administrative expenses (110.0) (106.5) (96.9)
 Income before federal
 income taxes 788.1 727.5 609.6
 Federal income taxes (260.3) (228.9) (187.4)
 Extraordinary loss --
 repurchase of debt (net
 of 1993 YTD taxes of
 $70.3 million) (50.6) (39.8) (9.3)
 Net income $ 477.2 $ 458.8 $ 412.9
 Earnings per share:
 Primary $ 1.74 $ 1.67 $ 1.51
 Fully diluted 1.74 1.67 1.51
 Cash dividends 0.46 0.46 0.34
 Average shares
 (fully diluted) in millions 274.2 274.9 274.8
 End of period: Sept. 30, June 30, Sept. 30,
 1993 1993 1992
 Total assets $211,441.6 $192,042.6 $170,055.2
 Total investment
 portfolio (gross) 207,119.8 88,243.4 166,386.9
 Interest margin
 (last month average) 1.34 pct. 1.45 pct. 1.29 pct.
 Investment spread
 (last month average) 0.80 pct. 0.91 pct. 0.71 pct.
 Shareholders' equity $ 7,719.1 $ 7,398.6 $ 6,453.2
 Book value per share 28.31 27.10 23.63
 MBS outstanding 481,879.8 465,219.8 429,935.0
 Nine Months Ended
 Sept. 30, Sept. 30
 1993 1992
 Net interest income $ 1,897.7 $ 1,514.0
 Guaranty fees 708.1 612.3
 Gain (loss) on sales
 of mortgages 6.3 24.3
 Miscellaneous income, net 162.6 132.0
 Provision for losses (135.0) (240.0)
 Foreclosed property
 expenses (100.3) --
 Administrative expenses (320.1) (277.9)
 Income before federal
 income taxes 2,219.3 1,764.7
 Federal income taxes (709.2) (543.9)
 Extraordinary loss --
 repurchase of debt (net
 of 1993 YTD taxes of
 $70.3 million) (130.5) (24.3)
 Net income $ 1,379.6 $ 1,196.5
 Earnings per share:
 Primary $ 5.02 $ 4.36
 Fully diluted 5.02 4.36
 Cash dividends 1.32 0.98
 Average shares
 (fully diluted) in millions 274.8 274.4
 NOTE: Shares outstanding at Sept. 30, 1993, were 272,651,000.
 -0- 10/12/93
 /CONTACT: Tom Marder of Fannie Mae, 202-752-7608/
 (FNM)


CO: Federal National Mortgage Association ST: District of Columbia IN: FIN SU: ERN

IH-MH -- DC004 -- 0986 10/12/93 10:06 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 12, 1993
Words:1995
Previous Article:SUDBURY, INC. RELEASES FIRST QUARTER RESULTS
Next Article:REPUBLIC BANCORP INC. REPORTS RECORD EARNINGS
Topics:

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