Fannie Mae 2006 Annual Report Download - page 116

Capital Classification Measures
The table below shows our core capital, total capital and other capital classification measures as of
December 31, 2006 and 2005.
Table 27: Regulatory Capital Surplus
2006
(1)
2005
As of December 31,
(Dollars in millions)
Core capital
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $41,950 $39,433
Statutory minimum capital
(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,359 28,233
Surplus of core capital over required minimum capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,591 11,200
Surplus of core capital percentage over required minimum capital
(4)
........................ 42.9% 39.7%
Core capital
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $41,950 $39,433
OFHEO-directed minimum capital
(5)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,166 36,703
Surplus of core capital over OFHEO-directed minimum capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,784 2,730
Surplus of core capital percentage over OFHEO-directed minimum capital
(6)
. . . . . . . . . . . . . . . . . . 9.9% 7.4%
Total capital
(7)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $42,703 $40,091
Statutory risk-based capital
(8)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,870 12,636
Surplus of total capital over required risk-based capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,833 $27,455
Surplus of total capital percentage over required risk-based capital
(9)
. . . . . . . . . . . . . . . . . . . . . . . 58.9% 217.3%
Core capital
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $41,950 $39,433
Statutory critical capital
(10)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,149 14,536
Surplus of core capital over required critical capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26,801 $24,897
Surplus of core capital percentage over required critical capital
(11)
. . . . . . . . . . . . . . . . . . . . . . . . . 176.9% 171.3%
(1)
Except for statutory risk-based capital amounts, all amounts represent estimates that will be resubmitted to OFHEO
for their certification. Statutory risk-based capital amounts represent previously announced results by OFHEO.
OFHEO may determine that results require restatement in the future based upon analysis provided by us.
(2)
The sum of (a) the stated value of our outstanding common stock (common stock less treasury stock); (b) the stated
value of our outstanding non-cumulative perpetual preferred stock; (c) our paid-in capital; and (d) our retained
earnings. Core capital excludes AOCI.
(3)
Generally, the sum of (a) 2.50% of on-balance sheet assets; (b) 0.45% of the unpaid principal balance of outstanding
Fannie Mae MBS held by third parties; and (c) up to 0.45% of other off-balance sheet obligations, which may be
adjusted by the Director of OFHEO under certain circumstances (See 12 CFR 1750.4 for existing adjustments made
by the Director of OFHEO).
(4)
Defined as the surplus of core capital over statutory minimum capital expressed as a percentage of statutory
minimum capital.
(5)
This requirement was effective as of September 30, 2005, and is defined as a 30% surplus over the statutory
minimum capital requirement. We are currently required to maintain this surplus under the OFHEO consent order
until such time as the Director of OFHEO determines that the requirement should be modified or allowed to expire,
taking into account factors such as the resolution of accounting and internal control issues.
(6)
Defined as the surplus of core capital over the OFHEO-directed minimum capital expressed as a percentage of the
OFHEO-directed minimum capital.
(7)
The sum of (a) core capital and (b) the total allowance for loan losses and reserve for guaranty losses, less (c) the
specific loss allowance (that is, the allowance required on individually-impaired loans). The specific loss allowance
totaled $106 million and $66 million as of December 31, 2006 and 2005, respectively.
(8)
Defined as the amount of total capital required to be held to absorb projected losses flowing from future adverse
interest rate and credit risk conditions specified by statute (see 12 CFR 1750.13 for conditions), plus 30% mandated
by statute to cover management and operations risk.
(9)
Defined as the surplus of total capital over statutory risk-based capital expressed as a percentage of statutory risk-
based capital.
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