Wednesday, April 13, 2016

Documents Undercut U.S. Case for Taking Mortgage Giant Fannie Mae’s Profits

On a Friday in August 2012, the federal government changed the terms of its bailout of Fannie Mae and Freddie Mac, sending all the mortgage finance giants’ profits to the Treasury. The surprise decision prompted a lawsuit from shareholders, who argued that the collection of profits was an improper taking of private property without compensation.

As the lawsuit proceeds through Federal Claims Court, documents unsealed in the case on Monday undermine an important defense made by the United States government. Lawyers for the Justice Department maintained early on in the litigation that Fannie and Freddie were in a death spiral and financially weak. Funneling all their profits to the Treasury was a way to protect taxpayers from future losses at the government-sponsored enterprises, the Justice Department said.
In a deposition taken last July, for example, Susan McFarland, Fannie’s former chief financial officer, said she told high-level officials at the Treasury on Aug. 9, 2012, that the company was, in fact, “now in a sustainable profitability, that we would be able to deliver sustainable profits over time.”
The mortgage finance giants Fannie Mae and Freddie Mac remain wards of the state years after the credit crisis receded into memory. Under their original rescue, in 2008, they were required to pay a 10 percent dividend on the money they had drawn from the Treasury.
The revised deal, under which their profits are swept every quarter into the Treasury’s general fund, prompted shareholders to sue in Federal Claims Court. Fairholme Funds, a mutual fund company that owns shares in Fannie and Freddie, filed the suit in 2013.
Among the documents unsealed by Margaret M. Sweeney, the judge presiding over the litigation, are excerpts from three depositions taken in the case by lawyers for Fairholme. Those depositions center on what the government knew about Fannie’s and Freddie’s financial position in 2012; this is an important question because the government had justified the taking of profits as a way to protect taxpayers who had extended bailout money to the companies.
In addition to telling Treasury officials in early August 2012 that Fannie would be able to sustain profits, Ms. McFarland said that Fannie could soon reap about $50 billion in income because of the reversal of an accounting entry, known as a deferred tax asset, required under accounting rules when the company began earning profits again.
A copy of the presentation that Ms. McFarland made to the Treasury was also unsealed. It contains 10 years of internal financial projections from Fannie, indicating that the company would not require further assistance from taxpayers.
A little over a week after her meeting with the officials, the Treasury announced the profit plan with the Federal Housing Finance Agency, the overseer of Fannie and Freddie.
In her deposition, Ms. McFarland said that she believed her conversation with the Treasury propelled the government to change the terms of the bailout to seize Fannie’s and Freddie’s profits. “When the amendment went into place,” Ms. McFarland testified, “part of my reaction was they did that in response to my communication of our forecasts and the implication of those forecasts, that it was probably a desire not to allow capital to build up within the enterprises and not to allow the enterprises to recapitalize themselves.”
A spokeswoman for the Justice Department did not immediately respond to a request for comment.
The unsealing of the documents casts a spotlight on a legal proceeding that has been shrouded in secrecy from the start. The court granted the government’s request for confidential treatment of thousands of pages of materials produced in the case; Justice Department lawyers have asserted presidential privilege in 45 documents.
Last year, The New York Times filed an amicus curiae brief asking that the judge unseal two of the depositions in the case. She released excerpts from one of those depositions on Monday.
Further testimony unsealed on Monday came from Mario Ugoletti, a former Treasury official who was a former special adviser to the director of the Federal Housing Finance Agency, the conservator overseeing Fannie and Freddie. In December 2013, Mr. Ugoletti signed an affidavit for the case stating unequivocally that neither the Treasury nor the Federal Housing Finance Agency envisioned that the companies’ deferred tax assets were about to be reversed in the months leading up to the profit sweep, generating huge profits. He also said that the move was not intended to “increase compensation to Treasury.”
But in the deposition in May, Mr. Ugoletti said he did not know whether the Treasury or the Federal Housing Finance Agency officials knew about the potential for the profits at Fannie and Freddie at the time of the sweep.
Mr. Ugoletti, who left government in the fall could not be reached for comment.
A document produced by Grant Thornton, the accounting firm hired by the government to do financial analysis on the companies, casts additional doubt on the government’s contention that it considered Fannie and Freddie to be in a dire financial condition in 2012, when it changed the terms of the bailout. The document, unsealed on Monday, shows Freddie’s financial results through the first quarter of 2012 alongside handwritten notes from an unknown Grant Thornton employee. That employee noted how Freddie’s profits would require that it reverse the accounting entry, known as releasing the valuation allowance.
The notes on the document state: “3 yrs. of cum. profits, you start to think about releasing the valuation allow. The valuation allow. When probably 2013, 2014.”
Since Fannie and Freddie returned to profitability in 2012, they have sent to the Treasury more than $50 billion over the amount they drew down in the bailout. Their profits continue to be funneled to the Treasury each quarter.

Sunday, June 7, 2015

The BB&T Corporation ( Branch Banking & Trust ) Financial History


BB&T footprint map
BB&T dates back to 1872, when Alpheus Branch and Thomas Jefferson Hadleyfounded the "Branch and Hadley" merchant bank in their small hometown ofWilson, North Carolina. After many transactions, mostly with local farmers, Branch bought out Hadley's shares in 1887 and renamed the company to "Branch and Company, Bankers." Two years later, Branch, his father-in-law Gen. Joshua Barnes, Hadley, and three other men, secured a charter from theNorth Carolina General Assembly to operate the "Wilson Banking and Trust Company." After numerous additional name changes, the company finally settled on the name "Branch Banking and Trust Company". Branch remained an active member in the company until his death in 1893.
BB&T sold Liberty Bonds during World War I and grew to have more than $4 million in assets by 1923. An insurance division was added in 1922, followed by a mortgage division in 1923. As banks across the nation failed as a result of the1929 Stock Market Crash, BB&T survived; it was the only one to do so in the town of Wilson.
World War II revived BB&T. BB&T's prosperity continued into the 1960s and 1970s, as mergers and acquisitions grew the company to $343 million in assets with new branches in 35 cities. By 1994, BB&T had become North Carolina's largest bank with more than $10.3 billion in assets and 263 offices in 138 cities in the Carolinas, though it has since slipped to second behind Bank of America.
In 1995, BB&T and Southern National Bank, another bank with roots in the eastern part of the state, completed a "merger of equals." In an unusual arrangement, the holding company retained the Southern National name for a few years, but all of its banks took the BB&T name. This gave the new BB&T 437 branches in 220 cities in the Carolinas and Virginia. The bank continued to expand nationwide through the 1990s, purchasing Fidelity Financial Bankshares, First Financial of Petersburg, Maryland Federal Bancorp and Franklin Bancorporation in the Virginia/Maryland area. In 1999, BB&T acquired MainStreet Financial Corp. of Martinsville, Va., and Mason-Dixon Bancshares of Westminster, Md., and further expanded into Georgiaand West Virginia after purchasing First Liberty of Macon, Ga., and Matewan Bancshares. The latter deal made BB&T the largest bank in West Virginia, a position it has held on to since.[3]
Typical branch office. Located inLexington, North Carolina
BB&T Headquarters in Winston-Salem, NC

BB&T building in downtown Tampa, Florida
Atypical branch in Douglas, GA
From 2000 to 2005, BB&T acquired numerous smaller banks, expanding intoTennesseeKentucky, and even Florida. By Dec. 31, 2005, BB&T Corporation had secured $109.2 billion in assets; operated more than 1,500 banking offices in 11 states and the District of Columbia; and had more than 28,000 employees.
In early 2007 BB&T acquired Coastal Federal Bank which is primarily located in Myrtle Beach, South Carolina. It has been one of the Carolinas' fastest growing banks. After BB&T's announcement of an opportunity for a "merger of equals" it was speculated that it would be a merger with either Regions Financial of Birmingham orFifth Third of Cincinnati.
In late 2008 the bank accepted $3.1 billion in bailout money through the sale of its preferred shares to the U.S. Treasury's Troubled Asset Relief Program. The bank said in June 2009 that it had received approval to repurchase the shares.[4] Also in June 2009, its chairman, John A. Allison IV delivered a keynote address to a meeting of the Competitive Enterprise Institute, where he claimed to show how government regulation caused the 2007–2009 financial collapse.[5][6]
On August 14, 2009, it was announced that the deposits and loan accounts of theColonial Bank were being transferred to BB&T as part of Colonial Bank's receivership by the FDIC.[7] This acquisition added more than 340 branches inAlabamaFlorida, Georgia, Nevada and Texas along with approximately $22 billion in assets. This moved BB&T Corporation to the 10th largest commercial bank in the United States based on assets. BB&T quickly flipped the Nevada branch to U.S. Bancorp (dropping it to 10th overall), but hung on to its Texas branches, despite the Texas branches being outside of its historical footprint. As of November 1, 2011, In acquiring BankAtlantic, BB&T acquired approximately $2.1 billion in loans and assume approximately $3.3 billion in deposits.

The BB&T Corporation ( Branch Banking & Trust ) BBT

BB&T Corporation
Traded asNYSEBBT
S&P 500 Component
IndustryFinanceInvestments, andInsurance
HeadquartersWinston-Salem, North CarolinaUnited States
Area served
North CarolinaSouth CarolinaVirginiaMaryland,West VirginiaKentucky,TennesseeGeorgiaFlorida,AlabamaIndianaTexas,Washington, D.C.
Key people
Kelly S. King (Chairman and CEO)
ProductsCommercial and Consumer banking, Investment banking,InsuranceMortgage
RevenueDecrease US$8.9 billion (FY 2014)[1]
Increase $2.151 billion (FY 2014)
Total assetsIncrease $186.8 billion (FY 2014)[2]
Total equityIncrease $24.426 billion (FY 2014)[1]
Number of employees
33,400 (February 2015)[1]

The BB&T Corporation (Branch Banking & Trust) is one of the largest financial services holding companies in the U.S. with $184.7 billion in assets and market capitalization of $28.9 billion, as of March 31, 2014. Based inWinston-Salem, N.C., the company operates 1,824 financial centers in 12 states (including North CarolinaSouth CarolinaVirginiaMarylandWest VirginiaKentuckyTennesseeGeorgiaFloridaAlabamaIndianaTexas, withOhioNew Jersey and Pennsylvania being added after pending transactions) and Washington, D.C., and offers a full range of consumer and commercial banking, securities brokerage, asset management, mortgage, and insuranceproducts and services. A Fortune 500 company, BB&T is consistently recognized for outstanding client satisfaction by J.D. Power and Associates, the U.S. Small Business Administration, Greenwich Associates and others.

BB&T footprint map

Saturday, January 26, 2013


The International Builders' Show is organized by the National Association of Home Builders (NAHB) and is the largest light construction building industry tradeshow in the United States.[1][2] It is the only event of its kind, focusing specifically on the needs, concerns, and opportunities that face builders. In 1944, the NAHB held its first annual convention and exposition, later becoming the International Builders' Show in 1998. From its early start, the show has grown to attract more than 100,000 attendees. Known as IBS in the building industry, the show has alternated its location since 2003 between the Orange County Convention Center in Orlando, Florida and the Las Vegas Convention Center in Las Vegas, Nevada.'_Show

Bank of America Corp NYSE: BAC - Jan 25 $11.62

Bank of America Corp
NYSE: BAC - Jan 25 4:00pm ET
11.62+0.09‎ (0.78%‎)

99-cents Stores the discount retail chain was bought

99 Cents Only Stores' family management team departs

A year after the discount retail chain was bought, Eric Schiffer, Jeff Gold and Howard Gold are out. Richard Anicetti becomes interim CEO and Michael Fung interim chief administrative officer.

99 Cents Only Stores Inc. said its family management team has left the deep discounter, one year after the family-run business was acquired.
Los Angeles private equity firm Ares Management and the Canada Pension Plan Investment Board bought the retailer in a deal that closed in January 2012 and took the firm private. When the chain announced the deal, valued at about $1.6 billion, it said the family management team would remain in place.
But the City of Commerce company said this week that Chief Executive Eric Schiffer, Chief Administrative Officer Jeff Gold and Executive Vice President of Special Projects Howard Gold "are no longer employed by the company."
Reached on his cellphone, Jeff Gold said he could not comment on his departure or the changes at the company.
Richard Anicetti, who has served on the board of directors for eight months, has been named interim CEO. Michael Fung, former chief financial officer for Wal-Mart Stores Inc.'s U.S. operations, is joining the company as interim chief administrative officer.
Anicetti also previously served as president and CEO of Food Lion grocery stores.
"The board of directors thanks Eric, Jeff, Howard and the rest of the Gold/Schiffer family for their contribution and is looking forward to working with Rick, Mike and our dedicated '99ers' to continue our growth trajectory while providing our customers with excellent value as well as a fun and exciting shopping experience," David Kaplan, chairman of the 99 Cents Only board and senior partner at Ares Management, said in a statement.
The company, founded in 1982, has benefited from bargain-hungry shoppers during the tough economy. The management changes were made to "execute on the company's previously announced accelerated growth strategy," the discounter said.
99 Cents Only Stores operates 311 stores in California, Texas, Arizona and Nevada. That's 22 more than when the acquisition deal was announced. For the quarter that ended Dec. 29, the discounter said net sales rose to $439.5 million, up 8.8% from the same period a year earlier. Same-store sales, a common industry measurement of sales at stores open at least a year, rose 4.3% when "calculated on a comparable 13-week period," the company said.,0,3155991.story

Monday, January 7, 2013

FannieMae and Bank of America January-07-2013

Bank of America has reached a $10.3 billion settlement with Fannie Mae to deal with questionable home loans it sold to the government-backed mortgage financer during the housing bubble.