Anworth Reports First Quarter Financial Results
SANTA MONICA, Calif.–(BUSINESS WIRE)–Anworth
Mortgage Asset Corporation (NYSE: ANH) (the “Company” or “Anworth”)
today reported its financial results for the first quarter ended March
31, 2019.
Earnings
The following table summarizes the Company’s core earnings, GAAP net
loss to common stockholders, and comprehensive income for the three
months ended March 31, 2019:
| Three Months Ended | ||||||||
| March 31, 2019 | ||||||||
| (unaudited) | ||||||||
| Earnings |
Per
Weighted Share |
|||||||
| (in thousands) | ||||||||
| Core Earnings | $ | 11,948 | $ | 0.12 | ||||
| GAAP net loss to common stockholders | $ | (22,267 | ) | $ | (0.23 | ) | ||
| Comprehensive income | $ | 20,476 | $ | 0.21 | ||||
Core earnings is a non-GAAP financial measure, which is explained and
reconciled to GAAP net loss to common stockholders in the section
entitled “Non-GAAP Financial Measures Related to Operating Results” near
the end of this earnings release. Comprehensive income is shown on the
consolidated statements of comprehensive income, which is included in
this earnings release. Comprehensive income consists of the net loss to
all stockholders (including the amounts paid to preferred stockholders)
and the change in other comprehensive income.
Portfolio
At March 31, 2019 and December 31, 2018, the composition of the
Company’s portfolio at fair value was as follows:
| March 31, 2019 | December 31, 2018 | |||||||||||
| Dollar Amount | Percentage | Dollar Amount | Percentage | |||||||||
| (in thousands) | ||||||||||||
| (unaudited) | ||||||||||||
| Agency MBS: | ||||||||||||
| ARMS and hybrid ARMs | $ | 1,424,495 | 24.2 | % | $ | 1,547,405 | 26.6 | % | ||||
| Fixed-rate Agency MBS | 2,320,596 | 39.3 | % | 2,001,314 | 34.3 | % | ||||||
| TBA Agency MBS | 721,391 | 12.0 | % | 906,016 | 15.6 | % | ||||||
| Total Agency MBS | $ | 4,466,482 | 75.5 | % | $ | 4,454,735 | 76.5 | % | ||||
| Non-Agency MBS | 768,597 | 13.0 | % | 795,203 | 13.7 | % | ||||||
| Residential mortgage loans(1) | 535,077 | 9.1 | % | 549,016 | 9.4 | % | ||||||
| Residential mortgage loans held-for-securitization | 129,583 | 2.2 | % | 11,660 | 0.2 | % | ||||||
| Residential real estate | 13,752 | 0.2 | % | 13,782 | 0.2 | % | ||||||
| Total Portfolio | $ | 5,913,491 | 100.0 | % | $ | 5,824,396 | 100.0 | % | ||||
| Total Assets(2) | $ | 6,063,120 | $ | 5,939,700 | ||||||||
| ____________________ | ||
| (1) |
Residential mortgage loans owned by consolidated variable interest entities (“VIEs”) can only be used to settle obligations and liabilities of the VIEs for which creditors do not have recourse to the Company. |
|
| (2) | Includes TBA Agency MBS. | |
Agency MBS
At March 31, 2019, the allocation of the Company’s agency
mortgage-backed securities (“Agency MBS”) was approximately 32%
adjustable-rate and hybrid adjustable-rate Agency MBS, 52% fixed-rate
Agency MBS, and 16% fixed-rate TBA Agency MBS. At December 31, 2018, the
allocation of the Company’s Agency MBS was approximately 35%
adjustable-rate and hybrid adjustable-rate Agency MBS, 45% fixed-rate
Agency MBS, and 20% fixed-rate TBA Agency MBS, both periods of which are
detailed below:
|
March 31,
2019 |
December 31,
2018 |
|||||||
| (dollar amounts in thousands) | ||||||||
| (unaudited) | ||||||||
| Fair value of Agency MBS and TBA Agency MBS | $ | 4,466,482 | $ | 4,454,735 | ||||
| Adjustable-rate Agency MBS coupon reset (less than 1 year) | 20 | % | 20 | % | ||||
| Hybrid adjustable-rate Agency MBS coupon reset (1-3 years) | 3 | 5 | ||||||
| Hybrid adjustable-rate Agency MBS coupon reset (3-5 years) | 6 | 7 | ||||||
| Hybrid adjustable-rate Agency MBS coupon reset (greater than 5 years) | 3 | 3 | ||||||
| Total adjustable-rate Agency MBS | 32 | % | 35 | % | ||||
| 15-year fixed-rate Agency MBS | 8 | 20 | ||||||
| 15-year fixed-rate TBA Agency MBS | – | 10 | ||||||
| 20-year fixed-rate Agency MBS | 8 | 8 | ||||||
| 30-year fixed-rate Agency MBS | 36 | 17 | ||||||
| 30-year fixed-rate TBA Agency MBS | 16 | 10 | ||||||
| Total MBS | 100 | % | 100 | % | ||||
At March 31, 2019 and December 31, 2018, the summary statistics of the
Company’s Agency MBS portfolio were as follows:
|
March 31,
2019 |
December 31,
2018 |
|||||
| (unaudited) | ||||||
| Weighted Average Agency MBS Coupon: | ||||||
| Adjustable-rate Agency MBS | 4.34 | % | 4.09 | % | ||
| Hybrid adjustable-rate Agency MBS | 2.52 | 2.52 | ||||
| 15-year fixed-rate Agency MBS | 3.13 | 2.90 | ||||
| 15-year fixed-rate TBA Agency MBS | – | 3.57 | ||||
| 20-year fixed-rate Agency MBS | 3.70 | 3.69 | ||||
| 30-year fixed-rate Agency MBS | 4.05 | 4.04 | ||||
| 30-year fixed-rate TBA Agency MBS | 4.32 | 4.35 | ||||
| Total Agency MBS: | 3.84 | % | 3.54 | % | ||
| Average Amortized Cost: | ||||||
| Adjustable-rate Agency MBS | 102.67 | % | 102.65 | % | ||
| Hybrid adjustable-rate Agency MBS | 102.53 | 102.49 | ||||
| 15-year fixed-rate Agency MBS | 102.06 | 102.28 | ||||
| 15-year fixed-rate TBA Agency MBS | – | 100.47 | ||||
| 20-year fixed-rate Agency MBS | 104.02 | 104.48 | ||||
| 30-year fixed-rate Agency MBS | 102.73 | 102.90 | ||||
| 30-year fixed-rate TBA Agency MBS | 103.06 | 102.49 | ||||
| Total Agency MBS: | 102.79 | % | 102.47 | % | ||
|
Average asset yield (weighted average coupon divided by average amortized cost) |
3.74 | % | 3.45 | % | ||
| Unamortized premium | $99.7 million | $95.2 million | ||||
| Unamortized premium as a percentage of par value | 2.79 | % | 2.47 | % | ||
| Premium amortization expense on Agency MBS for the respective quarter | $5.9 million | $7.4 million | ||||
At March 31, 2019 and December 31, 2018, the constant prepayment rate
(“CPR”) and weighted average term to next interest rate reset of our
Agency MBS were as follows:
|
March 31,
2019 |
December 31,
2018 |
|||
| (unaudited) | ||||
| Constant prepayment rate (CPR) of Agency MBS | 13% | 14% | ||
|
Constant prepayment rate (CPR) of adjustable-rate and hybrid adjustable-rate Agency MBS |
19% | 21% | ||
| Weighted average term to next interest rate reset on Agency MBS | 24 months | 24 months | ||
Non-Agency MBS
The following tables summarize the Company’s Non-Agency MBS at March 31,
2019 and December 31, 2018:
| March 31, 2019 | ||||||||||||||||||
| Weighted Average | ||||||||||||||||||
| Portfolio Type |
Fair
Value |
Amortized
Cost |
Current
Principal |
Amortized
Cost |
Coupon | Yield | ||||||||||||
| (in thousands) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Legacy Non-Agency MBS (pre-2008) | $ | 551,428 | $ | 537,652 | $ | 719,254 | 74.75 |
% |
5.59 | % | 5.56 | % | ||||||
| Non-performing | 82,884 | 83,007 | 83,260 | 99.70 | 5.19 | 5.49 | ||||||||||||
| Credit Risk Transfer | 134,285 | 130,210 | 141,839 | 91.80 | 4.30 | 5.81 | ||||||||||||
| Total Non-Agency MBS | $ | 768,597 | $ | 750,869 | $ | 944,353 | 79.51 | % | 5.35 | % | 5.60 | % | ||||||
| December 31, 2018 | ||||||||||||||||||
| Weighted Average | ||||||||||||||||||
| Portfolio Type |
Fair
Value |
Amortized
Cost |
Current
Principal |
Amortized
Cost |
Coupon | Yield | ||||||||||||
| (in thousands) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Legacy Non-Agency MBS (pre-2008) | $ | 561,940 | $ | 553,292 | $ | 738,210 | 74.95 | % | 5.56 | % | 5.57 | % | ||||||
| Non-performing | 101,744 | 102,450 | 102,760 | 99.70 | 5.14 | 5.42 | ||||||||||||
| Credit Risk Transfer | 131,519 | 129,898 | 141,839 | 91.58 | 4.30 | 5.72 | ||||||||||||
| Total Non-Agency MBS | $ | 795,203 | $ | 785,640 | $ | 982,809 | 79.94 | % | 5.34 | % | 5.58 | % | ||||||
Residential Mortgage Loans Held-for-Investment
The following table summarizes the Company’s residential mortgage loans
held-for-investment at March 31, 2019 and December 31, 2018:
| March 31, | December 31, | |||||
| 2019 | 2018 | |||||
| (in thousands) | ||||||
| (unaudited) | ||||||
| Residential mortgage loans held-for-investment | $ | 535,077 | $ | 549,016 | ||
| Asset-backed securities issued by securitization trusts | 525,712 | 539,651 | ||||
| Retained interest in loans held in securitization trusts | $ | 9,365 | $ | 9,365 | ||
Residential Mortgage Loans Held-for-Securitization
The following table summarizes the Company’s residential mortgage loans
held-for-securitization at March 31, 2019 and December 31, 2018:
| March 31, | December 31, | |||||
| 2019 | 2018 | |||||
| (in thousands) | ||||||
| (unaudited) | ||||||
| Residential mortgage loans held-for-securitization | $ | 129,583 | $ | 11,660 | ||
| Amount outstanding on warehouse line of credit | $ | 15,442 | $ | – | ||
| Payable for purchased loans | $ | 112,316 | $ | 11,660 | ||
Residential Properties Portfolio
At March 31, 2019 and December 31, 2018, Anworth Properties Inc. owned
86 and 86 single-family residential rental properties, respectively,
located in Southeastern Florida that were carried at a total cost, net
of accumulated depreciation, of $13.8 million and $13.8 million,
respectively.
MBS Portfolio Financing
| March 31, 2019 | |||||||||
|
Agency
MBS |
Non-Agency
MBS |
Total
MBS |
|||||||
| (dollar amounts in thousands) | |||||||||
| (unaudited) | |||||||||
| Repurchase Agreements: | |||||||||
| Outstanding repurchase agreement balance | $ 3,215,000 | $ 545,634 | $ 3,760,634 | ||||||
| Average interest rate | 2.68 | % | 3.60 | % | 2.81 | % | |||
| Average maturity | 33 days | 18 days | 31 days | ||||||
| Average interest rate after adjusting for interest rate swaps | 2.32 | % | |||||||
| Average maturity after adjusting for interest rate swaps | 1,222 days | ||||||||
| December 31, 2018 | |||||||||
|
Agency
MBS |
Non-Agency
MBS |
Total
MBS |
|||||||
| (dollar amounts in thousands) | |||||||||
| (unaudited) | |||||||||
| Repurchase Agreements: | |||||||||
| Outstanding repurchase agreement balance | $ 3,235,000 | $ 576,627 | $ 3,811,627 | ||||||
| Average interest rate | 2.52 | % | 3.55 | % | 2.67 | % | |||
| Average maturity | 35 days | 13 days | 32 days | ||||||
| Average interest rate after adjusting for interest rate swaps | 2.23 | % | |||||||
| Average maturity after adjusting for interest rate swaps | 1,217 days | ||||||||
Portfolio Leverage
At March 31, 2019, the Company’s leverage multiple was 6.05x. The
leverage multiple is calculated by dividing the Company’s repurchase
agreements and credit line outstanding by the aggregate of common
stockholders’ equity plus preferred stock and junior subordinated notes.
The Company’s effective leverage, which includes the effect of TBA
dollar roll financing, was 7.18x at March 31, 2019. At December 31,
2018, the Company’s leverage multiple was 6.16x and the effective
leverage was 7.63x.
Interest Rate Swaps
At March 31, 2019 and December 31, 2018, the Company’s interest rate
swaps agreements (“Swaps”) had the following notional amounts, weighted
average fixed rates, and remaining terms:
| March 31, 2019 | ||||||||||
| Maturity |
Notional
Amount |
Weighted
Average Fixed Rate |
Remaining
Term in Months |
Remaining
Term in Years |
||||||
| (in thousands) | ||||||||||
| (unaudited) | ||||||||||
| Less than 12 months | $ | 650,000 | 1.61 | % | 6 | 0.5 | ||||
| 1 year to 2 years | 666,000 | 1.76 | 18 | 1.5 | ||||||
| 2 years to 3 years | 300,000 | 1.87 | 30 | 2.5 | ||||||
| 3 years to 4 years | 270,000 | 2.09 | 44 | 3.7 | ||||||
| 4 years to 5 years | 355,000 | 2.39 | 57 | 4.7 | ||||||
| 5 years to 7 years | 525,000 | 2.48 | 75 | 6.3 | ||||||
| 7 years to 10 years | 590,000 | 2.82 | 104 | 8.7 | ||||||
| $ | 3,356,000 | 2.13 | % | 47 | 3.9 | |||||
| December 31, 2018 | ||||||||||
| Maturity |
Notional
Amount |
Weighted
Average Fixed Rate |
Remaining
Term in Months |
Remaining
Term in Years |
||||||
| (in thousands) | ||||||||||
| (unaudited) | ||||||||||
| Less than 12 months | $ | 725,000 | 1.60 | % | 7 | 0.6 | ||||
| 1 year to 2 years | 591,000 | 1.70 | 19 | 1.6 | ||||||
| 2 years to 3 years | 400,000 | 1.96 | 30 | 2.5 | ||||||
| 3 years to 4 years | 220,000 | 1.92 | 43 | 3.6 | ||||||
| 4 years to 5 years | 205,000 | 2.27 | 57 | 4.8 | ||||||
| 5 years to 7 years | 475,000 | 2.41 | 73 | 6.1 | ||||||
| 7 years to 10 years | 690,000 | 2.83 | 104 | 8.7 | ||||||
| $ | 3,306,000 | 2.10 | % | 47 | 3.9 | |||||
Effective Net Interest Rate Spread
|
March 31,
2019 |
December 31,
2018 |
|||||
| (unaudited) | ||||||
| Average asset yield, including TBA dollar roll income | 3.66 | % | 3.56 | % | ||
| Effective cost of funds | 2.52 | 2.52 | ||||
| Effective net interest rate spread | 1.14 | % | 1.04 | % | ||
Certain components of the effective net interest rate spread are
non-GAAP financial measures, which are explained and reconciled to the
nearest comparable GAAP financial measures in the section entitled
“Non-GAAP Financial Measures Related to Operating Results” at the end of
this earnings release.
Dividend
On March 14, 2019, the Company declared a quarterly common stock
dividend of $0.13 per share for the first quarter ended March 31, 2019.
Based upon the closing price of $4.04 on March 31, 2019, the annualized
dividend yield on the Company’s common stock at March 31, 2019 was 12.9%.
Book Value per Common Share
At March 31, 2019, the Company’s book value was $4.76 per share of
common stock, which was an increase of $0.05 from $4.71 in the prior
quarter.
The $0.13 quarterly dividend plus the $0.05 increase in book value per
common share from the prior quarter resulted in a return on book value
per common share of 3.8% for the quarter ended March 31, 2019.
Subsequent Events
On April 1, 2019, the conversion rate of our Series B Preferred Stock
increased from 5.2588 to 5.3539 shares of our common stock based upon
the common stock dividend of $0.13 per share that was declared on March
14, 2019.
On April 30, 2019, we settled on an aggregate of approximately $74.5
million (including premium and accrued interest) of Non-QM residential
mortgage loans that we acquired during the quarter ended March 31, 2019.
Conference Call
The Company will host a conference call on Monday, May 6, 2019 at 1:00
PM Eastern Time, 10:00 AM Pacific Time, to discuss its first quarter
2019 results. The dial-in number for the conference call is 877-504-2731
for U.S. callers (international callers should dial 412-902-6640 and
Canadian callers should dial 855-669-9657). When dialing in,
participants should ask to be connected to the Anworth Mortgage earnings
call. Replays of the call will be available for a 7-day period
commencing at 3:00 PM Eastern Time on May 6, 2019. The dial-in number
for the replay is 877-344-7529 for U.S. callers (Canadian callers should
dial 855-669-9658 and international callers should dial 412-317-0088)
and the conference number is 10131180. The conference call will also be
webcast live over the Internet, which can be accessed on the Company’s
website at http://www.anworth.com
through the corresponding link located at the top of the home page.
Investors interested in participating in the Company’s Dividend
Reinvestment and Stock Purchase Plan (the “DRP Plan”) or receiving a
copy of the DRP Plan’s prospectus may do so by contacting the Plan
Administrator, American Stock Transfer & Trust Company, at 877-248-6410.
For more information about the Plan, interested investors may also visit
the Plan Administrator’s website at http://www.amstock.com/investpower/new_dp.asp
or the Company’s website at http://www.anworth.com.
About Anworth Mortgage Asset Corporation
We are an externally-managed mortgage real estate investment trust
(“REIT”). We invest primarily in mortgage-backed securities that are
either rated “investment grade” or are guaranteed by federally sponsored
enterprises, such as Fannie Mae or Freddie Mac. We seek to generate
income for distribution to our shareholders primarily based on the
difference between the yield on our mortgage assets and the cost of our
borrowings. We are managed by Anworth Management LLC (our “Manager”),
pursuant to a management agreement. Our Manager is subject to the
supervision and direction of our Board and is responsible for (i) the
selection, purchase, and sale of our investment portfolio; (ii) our
financing and hedging activities; and (iii) providing us with portfolio
management, administrative, and other services and activities relating
to our assets and operations as may be appropriate. Our common stock is
traded on the New York Stock Exchange under the symbol “ANH.” Anworth
Mortgage Asset Corporation is a component of the Russell 2000® Index.
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995
This news release may contain forward-looking statements within the
meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are based upon
our current expectations and speak only as of the date hereof.
Forward-looking statements, which are based on various assumptions (some
of which are beyond our control) may be identified by reference to a
future period or periods or by the use of forward-looking terminology,
such as “may, ” “will, ” “believe, ” “expect, ” “anticipate, ” “assume,”
“estimate,” “intend,” “continue, ” or other similar terms or variations
on those terms or the negative of those terms. Our actual results may
differ materially and adversely from those expressed in any
forward-looking statements as a result of various factors and
uncertainties, including but not limited to, changes in interest rates;
changes in the market value of our mortgage-backed securities; changes
in the yield curve; the availability of mortgage-backed securities for
purchase; increases in the prepayment rates on the mortgage loans
securing our mortgage-backed securities; our ability to use borrowings
to finance our assets and, if available, the terms of any financing;
risks associated with investing in mortgage-related assets; changes in
business conditions and the general economy; implementation of or
changes in government regulations affecting our business; our ability to
maintain our qualification as a real estate investment trust for federal
income tax purposes; our ability to maintain an exemption from the
Investment Company Act of 1940, as amended; risks associated with our
home rental business; and the Manager’s ability to manage our growth.
Our Annual Report on Form 10-K and other SEC filings discuss the most
significant risk factors that may affect our business, results of
operations and financial condition. We undertake no obligation to revise
or update publicly any forward-looking statements for any reason.
| ANWORTH MORTGAGE ASSET CORPORATION AND SUBSIDIARIES | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (in thousands, except per share amounts) | ||||||
|
|
March 31, |
|
December 31, |
|||
|
|
2019 |
|
2018 |
|||
|
|
(audited) |
|||||
| ASSETS | ||||||
|
Agency MBS at fair value (including $3,421,455 and $3,433,252 pledged to counterparties at March 31, 2019 and December 31, 2018, respectively) |
$ | 3,745,091 | $ | 3,548,719 | ||
|
Non-Agency MBS at fair value (including $700,391 and $726,428 pledged to counterparties at March 31, 2019 and December 31, 2018, respectively) |
768,597 | 795,203 | ||||
| Residential mortgage loans held-for-securitization | 129,583 | 11,660 | ||||
|
Residential mortgage loans held-for-investment through consolidated securitization trusts(1) |
535,077 | 549,016 | ||||
| Residential real estate | 13,752 | 13,782 | ||||
| Cash and cash equivalents | 21,997 | 3,165 | ||||
| Reverse repurchase agreements | — | 20,000 | ||||
| Restricted cash | 75,513 | 30,296 | ||||
| Interest and dividends receivable | 17,539 | 16,872 | ||||
| Derivative instruments at fair value | 27,396 | 46,207 | ||||
| Right to use asset-operating lease | 1,660 | 1,794 | ||||
| Prepaid expenses and other | 5,524 | 2,986 | ||||
| Total Assets | $ | 5,341,729 | $ | 5,039,700 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Liabilities: | ||||||
| Accrued interest payable | $ | 16,084 | $ | 24,828 | ||
| Repurchase agreements | 3,760,634 | 3,811,627 | ||||
| Warehouse line of credit | 15,442 | — | ||||
| Asset-backed securities issued by securitization trusts(1) | 525,712 | 539,651 | ||||
| Junior subordinated notes | 37,380 | 37,380 | ||||
| Derivative instruments at fair value | 36,261 | 15,901 | ||||
| Dividends payable on preferred stock | 2,297 | 2,297 | ||||
| Dividends payable on common stock | 12,813 | 12,803 | ||||
| Payable for purchased MBS | 227,997 | — | ||||
| Payable for purchased loans | 112,316 | 11,660 | ||||
| Derivative counterparty margin | 5,238 | — | ||||
| Accrued expenses and other | 1,045 | 654 | ||||
| Long-term lease obligation | 1,660 | 1,794 | ||||
| Total Liabilities | $ | 4,754,879 | $ | 4,458,595 | ||
|
Series B Cumulative Convertible Preferred Stock: par value $0.01 per share; liquidating preference $25.00 per
share ($19,494 and $19,494, respectively); 780 and 780 shares December 31, 2018, respectively) |
$ | 19,455 | $ | 19,455 | ||
| Stockholders’ Equity: | ||||||
|
Series A Cumulative Preferred Stock: par value $0.01 per share; liquidating preference $25.00 per share
($47,984 and $47,984, respectively); 1,919 and 1,919 shares issued and December 31, 2018, respectively) |
$ | 46,537 | $ | 46,537 | ||
|
Series C Cumulative Preferred Stock: par value $0.01 per share; liquidating preference $25.00 per share
($50,257 and $50,257, respectively); 2,010 and 2,010 shares issued and December 31, 2018, respectively) |
48,944 | 48,944 | ||||
|
Common Stock: par value $0.01 per share; authorized 200,000 shares, 98,565 and 98,483 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively) |
986 | 985 | ||||
| Additional paid-in capital | 982,344 | 981,964 | ||||
|
Accumulated other comprehensive (loss) income consisting of unrealized gains and losses |
9,654 | (30,792) | ||||
| Accumulated deficit | (521,070) | (485,988) | ||||
| Total Stockholders’ Equity | $ | 567,395 | $ | 561,650 | ||
| Total Liabilities and Stockholders’ Equity | $ | 5,341,729 | $ | 5,039,700 | ||
| ____________________ | ||
| (1) |
The consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations and liabilities of the VIEs for which creditors do not have recourse to the Company. At March 31, 2019 and December 31, 2018, total assets of the consolidated VIEs were $537 million and $551 million (including accrued interest receivable of $1.8 million and $1.8 million), respectively (which is recorded above in the line item “Interest and dividends receivable”), and total liabilities were $527 million and $541 million (including accrued interest payable of $1.7 million and $1.7 million), respectively (which is recorded above in the line item “Accrued interest payable”). |
|
| ANWORTH MORTGAGE ASSET CORPORATION AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (in thousands, except for per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
|
|
2019 |
|
2018 |
|||||
| (unaudited) | ||||||||
| Interest and other income: | ||||||||
| Interest-Agency MBS | $ | 25,711 | $ | 24,044 | ||||
| Interest-Non-Agency MBS | 10,466 | 10,021 | ||||||
| Interest-residential securitized mortgage loans | 5,368 | 6,238 | ||||||
| Interest-residential mortgage loans held-for-securitization | 86 | — | ||||||
| Other interest income | 19 | 28 | ||||||
| 41,650 | 40,331 | |||||||
| Interest expense: | ||||||||
| Interest expense on repurchase agreements | 27,136 | 19,093 | ||||||
| Interest expense on asset-backed securities | 5,200 | 6,070 | ||||||
| Interest expense on warehouse line of credit | 234 | — | ||||||
| Interest expense on junior subordinated notes | 547 | 447 | ||||||
| 33,117 | 25,610 | |||||||
| Net interest income | 8,533 | 14,721 | ||||||
| Operating expenses: | ||||||||
| Management fee to related party | (1,724 | ) | (1,737 | ) | ||||
| Rental properties depreciation and expenses | (355 | ) | (386 | ) | ||||
| General and administrative expenses | (967 | ) | (1,110 | ) | ||||
| Total operating expenses | (3,046 | ) | (3,233 | ) | ||||
| Other (loss): | ||||||||
| Income-rental properties | 436 | 451 | ||||||
| Realized net (loss) on sales of available-for-sale MBS | (6,147 | ) | (11,987 | ) | ||||
| Realized (loss) on sales of Agency MBS held as trading investments | (7,363 | ) | (7,327 | ) | ||||
| Unrealized gain (loss) on Agency MBS held as trading investments | 14,906 | (8,890 | ) | |||||
| (Loss) gain on derivatives, net | (27,289 | ) | 13,412 | |||||
| Total other (loss) | (25,457 | ) | (14,341 | ) | ||||
| Net (loss) | $ | (19,970 | ) | $ | (2,853 | ) | ||
| Dividends on preferred stock | (2,297 | ) | (2,297 | ) | ||||
| Net (loss) to common stockholders | $ | (22,267 | ) | $ | (5,150 | ) | ||
| Basic (loss) per common share | $ | (0.23 | ) | $ | (0.05 | ) | ||
| Diluted (loss) per common share | $ | (0.23 | ) | $ | (0.05 | ) | ||
| Basic weighted average number of shares outstanding | 98,537 | 98,185 | ||||||
| Diluted weighted average number of shares outstanding | 98,537 | 98,185 | ||||||
| ANWORTH MORTGAGE ASSET CORPORATION AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||
| (in thousands, except for per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| (unaudited) | ||||||||
| Net (loss) | $ | (19,970 | ) | $ | (2,853 | ) | ||
| Available-for-sale Agency MBS, fair value adjustment | 25,109 | (35,481 | ) | |||||
|
Reclassification adjustment for loss on sales of Agency MBS included
in net (loss) |
6,169 | 11,945 | ||||||
| Available-for-sale Non-Agency MBS, fair value adjustment | 8,187 | 667 | ||||||
|
Reclassification adjustment for (gain) loss on sales of Non-Agency MBS included in net (loss) |
(22 | ) | 42 | |||||
|
Amortization of unrealized gains on interest rate swaps remaining in
other comprehensive income |
1,003 | 940 | ||||||
|
Reclassification adjustment for interest (income) on interest rate swaps included in net (loss) |
– | (194 | ) | |||||
| Other comprehensive income (loss) | 40,446 | (22,081 | ) | |||||
| Comprehensive income (loss) | $ | 20,476 | $ | (24,934 | ) | |||
Non-GAAP Financial Measures Related to Operating Results
In addition to the Company’s operating results presented in accordance
with GAAP, the following tables include the following non-GAAP financial
measures: Core Earnings (including per common share), total interest
income and average asset yield, including TBA dollar roll income,
paydown expense on Agency MBS and effective total interest expense and
effective cost of funds. The first table below reconciles the Company’s
“net loss to common stockholders” for the three months ended March 31,
2019 to “Core Earnings” for the same period. Core Earnings represents
“net loss to common stockholders” (which is the nearest comparable GAAP
measure), adjusted for the items shown in the table below. The second
table below reconciles the Company’s total interest and other income for
the three months ended March 31, 2019 (which is the nearest comparable
GAAP measure) to the total interest income and average asset yield,
including TBA dollar roll income, and shows the annualized amounts as a
percentage of the Company’s average earning assets and also reconciles
the Company’s total interest expense (which is the nearest comparable
GAAP measure) to the effective total interest expense and effective cost
of funds and shows the annualized amounts as a percentage of the
Company’s average borrowings.
Contacts
Anworth Mortgage Asset Corporation
John T. Hillman
1299 Ocean
Avenue, 2nd Floor
Santa Monica, CA 90401
(310) 255-4438 or
(310) 255-4493
Email: jhillman@anworth.com
Web
site: http://www.anworth.com