Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  Bank of America Corp    BAC

Delayed Quote. Delayed  - 10/21 10:00:39 pm
16.67 USD   +0.66%
10/22 BANK OF AMERICA : Advocacy group concerned about Bank of America bra..
10/22 BANK OF AMERICA : FBI Seeks Serial Bank Robbed Dubbed Scruffy Faced ..
10/21 BANK OF AMERICA : Partners with Digital Payments Firm
News SummaryMost relevantAll newsSector news 

Fannie Swings To 4Q Loss On Rise In Credit-Related Expenses

share with twitter share with LinkedIn share with facebook
share via e-mail
02/29/2012 | 08:36pm CEST

--Fannie Mae will request another $4.6 billion in U.S. government aid

--Fight with Bank of America may lead to additional aid requests

--Fannie Mae says it ended agreement with Bank of America in January

(Updated with annual-report comment from Bank of America in paragraph 6 and details about fight over repurchase requests throughout.)

By Andrew R. Johnson


Fannie Mae (>> Federal National Mortgage Association) will request another $4.6 billion in U.S. government aid after posting a $2.41 billion loss in the fourth quarter, the mortgage-finance company said Wednesday.

The company also warned it could have to request additional aid stemming from an escalating battle with Bank of America Corp. (>> Bank of America Corp) over mortgage-repurchase requests for faulty loans.

Bank of America said last week in a regulatory filing it had stopped selling most mortgages to Fannie Mae because of a "mutual" end to an agreement between the two companies. But Fannie Mae said Wednesday it decided not to renew the agreement at the end of January after the bank resisted requests to repurchase soured loans.

"If Fannie Mae collects less than the amount it expects from Bank of America, Fannie Mae may be required to seek additional funds from Treasury," Fannie Mae said.

A spokesman for Bank of America on Wednesday referred to the bank's filing when contacted for comment.

The "nonrenewal" of the agreement between Bank of America and Fannie Mae was partly the result of "our ongoing differences with [Fannie Mae]" over repurchase claims, the Charlotte, N.C., bank said in its annual report last week.

The volume of Fannie Mae's outstanding repurchase requests with Bank of America "increased substantially" as a result of the bank slowing its loan buybacks, according to Fannie Mae.

Bank of America accounted for the largest portion, about 52%, of Fannie Mae's outstanding repurchase requests as of Dec. 31. The other banks that accounted for large amounts of outstanding requests are J.P. Morgan Chase & Co. (>> JPMorgan Chase & Co.), Citigroup Inc. (>> Citigroup Inc.), Wells Fargo & Co. (>> Wells Fargo & Company) and SunTrust Banks Inc. (>> SunTrust Banks, Inc.).

Bank of America can still deliver loans to Fannie Mae under certain refinancing programs. Fannie Mae said it doesn't expect the issue to have a material impact on its results.

The mortgage-finance company blamed its quarterly loss primarily on pre-2009 loans and declines in home prices, which pushed up the company's credit-related expenses.

In the fourth quarter of 2010, Fannie Mae posted a slight profit to snap a streak of 13 straight quarterly losses, though the company resumed its place in the red in the following quarter and every one since.

Fannie Mae and sister company Freddie Mac (>> Federal Home Loan Mortgage Corp) don't lend to consumers. Rather, they buy and guarantee home loans that meet their standards and package them into securities.

The two firms were taken over by the government in 2008 at the height of the financial crisis. The companies' shares began trading on the over-the-counter market in 2010 after regulators ordered them to delist from the New York Stock Exchange because they no longer met listing standards.

Including its most recent request from the U.S. Treasury Department, Fannie Mae has borrowed more than $116 billion from taxpayers and paid back $19.6 billion in dividends. Freddie Mac, which hasn't yet reported its latest quarter of earnings, has received more than $71 billion in government aid and paid back about $15 billion as of the third quarter.

The net cost to taxpayers for the rescues of both companies stands at more than $152 billion.

Fannie's annual net loss of $16.9 billion exceeded its year-earlier loss of $14 billion largely because falling interest rates triggered write-downs of certain derivative investments that are used to hedge against swings in interest rates.

Company officials said lower rates of mortgage delinquency had allowed the company to set aside less cash for loan losses during the second half of 2011. "That's a good indication that we believe we now have most of the losses already recognized," said Susan McFarland, Fannie's chief financial officer, in an interview.

For the fourth quarter, Fannie posted a loss of $2.41 billion, compared with a year-earlier profit of $73 million. Net revenue declined 7.3% to $4.53 billion.

The firm's credit-related expenses totaled $5.51 billion in the fourth quarter, compared with $4.32 billion a year earlier and $4.88 billion in the third quarter.

-By Andrew R. Johnson, Dow Jones Newswires; 212-416-3214; andrew.r.johnson@dowjones.com

--Mia Lamar, Nick Timiraos and Matthias Rieker contributed to this article.

share with twitter share with LinkedIn share with facebook
share via e-mail
10/22 BANK OF AMERICA : Advocacy group concerned about Bank of America branch closing
10/22 BANK OF AMERICA : FBI Seeks Serial Bank Robbed Dubbed Scruffy Faced Bandit
10/21 BANK OF AMERICA : Partners with Digital Payments Firm
10/21 BANK OF AMERICA : ARA announces new CEO
10/21DJROYAL BANK OF CANADA : Chief Financial Officer to Retire
10/21 BANK OF AMERICA : Expands Affordable Loan Program
10/21 BANK OF AMERICA : NAACP to hold annual banquet
10/21 BANK OF AMERICA : doubles down on 3% down mortgages without insurance
10/21 BANK OF AMERICA : expands partnership with Self-Help to $1 billion
10/21 BANK OF AMERICA : expands partnership with Self-Help to $1 billion
More news
Sector news : Banks - NEC
06:50p Italy's front line in fight to save banks - a storage room
10/22 Nordea chairman says merger with ABN Amro would create 'fine bank'
10/21DJWELLS FARGO : Head of Wells Fargo Fund Division Karla Rabusch to Retire in Comin..
10/21DJJUMBO MORTGAGES : Big Banks Still Love Them
10/21 BARCLAYS : Russia links BBC to row over Russian TV channel's UK accounts
More sector news : Banks - NEC
News from SeekingAlpha
10/21 BANK OF AMERICA Q3 BLOWOUT : Key Takeaways
10/21 What To Buy After U.S Elections And December Interest Rate Hike; Longs & Shor..
10/21 Turn A Rate Hike Into A Gain With This Stock
10/20 BANK OF AMERICA : The Future Just Got Brighter
Financials ($)
Sales 2016 84 665 M
EBIT 2016 24 947 M
Net income 2016 15 099 M
Debt 2016 -
Yield 2016 1,50%
P/E ratio 2016 11,97
P/E ratio 2017 10,67
Capi. / Sales 2016 2,01x
Capi. / Sales 2017 1,97x
Capitalization 170 114 M
More Financials
Duration : Period :
Bank of America Corp Technical Analysis Chart | BAC | US0605051046 | 4-Traders
Full-screen chart
Technical analysis trends BANK OF AMERICA CORP
Short TermMid-TermLong Term
Technical analysis
Income Statement Evolution
More Financials
Mean consensus OUTPERFORM
Number of Analysts 33
Average target price 17,8 $
Spread / Average Target 6,9%
Consensus details
EPS Revisions
More Estimates Revisions
Brian T. Moynihan Chairman, President & Chief Executive Officer
Thomas Kell Montag Chief Operating Officer
Paul M. Donofrio Chief Financial Officer
Thomas J. May Independent Director
Frank P. Bramble Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
JPMORGAN CHASE & CO.3.73%247 385
WELLS FARGO & CO-17.05%227 504
More Results