Tag Archives: Quarterly Earnings

JPMorgan Chase kicked off the earnings reporting season for major U.S. lenders on Friday with its announcement that the company earned a record profit of $19 billion for the 2011 fiscal year. The numbers still failed to meet analysts' expectations, and details of the earnings data show the company continues to struggle with legacy issues stemming from the housing downturn. The company doled out more than $3 billion in 2011 to cover legal proceedings related to its mortgage business.

The nation's largest mortgage company says it lost $5.1 billion during the third quarter of this year. That combined with a $2.5 billion dividend payment to Treasury for past bailout money left Fannie Mae with a $7.8 billion hole to fill. Upon receipt of those funds, Fannie Mae's total debt obligation to U.S. taxpayers will be $112.6 billion. The GSE held 122,616 single-family REO properties as of the end of September, and completed 87,533 foreclosure prevention actions during the quarter.

Recording a slight decrease in delinquencies in its preliminary third quarter estimate, Trepp predicts full market recovery will not occur for years. Residential mortgage delinquencies fell 0.3 percent in the third quarter to 12 percent, according to Trepp's preliminary data. This is down 1.1 percent from last year. The research firm says the slow rate of improvement reflects the high volume of foreclosures and weak price trends that still plague the nation's housing markets.

The nation's second largest mortgage company is asking the U.S. Treasury for another $6 billion in capital support after posting its largest quarterly loss in over a year. Freddie Mac says it recorded a net loss of $4.4 billion for the quarter ended September 30, 2011, after shouldering a $4.8 billion loss on derivatives and a $3.6 billion provision for credit losses related to high levels of mortgage refinancing and lower mortgage insurance recoveries. The GSE's REO operations expense skyrocketed to $221 million in the third quarter, compared to $27 million for the second quarter.

Ally Financial's CEO Michael Carpenter told investors Wednesday that his company ""would not settle for the kind of numbers being bandied about"" as recompense for mishandled foreclosure paperwork. Ally's GMAC Mortgage was the first servicer to admit to robo-signing issues and affidavit errors related to foreclosure processing last fall. Analysts estimate the company could be on the hook for $2.5 billion of state attorneys general's $25 billion settlement proposal. Carpenter says it should be a ""small fraction"" of that amount.

Bank of America reported Tuesday that it saw a profit of $6.2 billion during the third quarter of this year, compared to a loss of $7.3 billion a year ago. Perhaps the biggest headline-grabber gleaned from BofA's third-quarter numbers is that the company lost its position as the largest U.S. bank by assets. On the mortgage side of the business, BofA says it has successfully implemented the rollout of a single point of contact for default servicing. Provisions for credit losses declined 37 percent from the year-ago quarter.

Citigroup reported Monday that it brought in net income of $3.8 billion during the third quarter of this year. That's up 74 percent from a year earlier. Third quarter revenues increased, thanks to a $1.9 billion accounting adjustment that allowed Citi to record a gain based on the risk associated with its credit holdings. The company said in its earnings presentation to investors that it remains highly focused on risk management, particularly as it relates to U.S. mortgage exposure.

Wells Fargo reported net income of $4.1 billion over the July-to-September period. The company called it a ""record"" quarter, but even with profits up 21 percent from the prior year, the numbers were overshadowed by the fact that Q3 results missed market expectations. It's the first time in more than two years that Wells Fargo didn't meet analysts' forecasts. A decline in loan charge-offs and nonperforming assets, as well as an $800 million reduction in loan loss reserves helped to counter declining revenue.

JPMorgan Chase used its third-quarter earnings call with investors Thursday to rein in expectations about when a mortgage servicing settlement might be reached with state officials. CEO Jamie Dimon described the settlement talks as ""getting bogged down"" because of the many varying demands of each of the state attorneys general. Dimon said he thinks it'd be good for everyone involved to come to an agreement and move on, but he was quick to add, only if the settlement is ""reasonable.""

Bad real estate loans from the heyday of the boom have weighed heavy on banks' balance sheets, forcing 365 FDIC-insured institutions to close up shop over the last two-and-a-half years. The FDIC keeps a list of banks it considers to have a high-risk of failure. This so-called ""Problem List"" has declined for the first time since the third quarter of 2006. The number of ""problem"" institutions under the FDIC's watchful eye fell from 888 at the end of the first quarter to 865 at the end of the second.