Anworth Announces First Quarter 2013 Financial Results Business Wire SANTA MONICA, Calif. -- April 29, 2013 Anworth Mortgage Asset Corporation (NYSE: ANH) today reported core earnings available to common stockholders of $22.2 million, or $0.15 per diluted share, for the first quarter ended March 31, 2013. Core earnings consisted of $23.6 million of net income less $1.4 million of dividends paid to our preferred stockholders. This compares to core earnings of $21.9 million, or $0.15 per diluted share, for the fourth quarter ended December 31, 2012. “Core earnings” represents a non-GAAP financial measure, which we define as GAAP net income excluding impairment losses on mortgage-backed securities, or MBS. For the three months ended March31,2013, there were no impairment losses on MBS. On March 28, 2013, we declared a quarterly common stock dividend of $0.15 per share, which is payable on April 29, 2013 to holders of our common stock as of the close of business on April 8, 2013. At March 31, 2013, our book value was $7.04 per share, versus $7.14 per share at December 31, 2012. Our investments consist of Agency MBS, which constituted essentially our entire portfolio at March 31, 2013. At March 31, 2013 and December 31, 2012, the fair value of our Agency MBS portfolio and its allocation was approximately as follows: March 31, December 31, 2013 2012 Fair value of Agency MBS $9.52 billion $9.24 billion Adjustable-rate Agency MBS (less than 1 19 % 21 % year reset) Adjustable-rate Agency MBS (1-2 year 3 % 2 % reset) Adjustable-rate Agency MBS (2-5 year 39 % 45 % reset) Adjustable-rate Agency MBS (>5 year reset) 18 % 10 % 15-year fixed-rate Agency MBS 18 % 18 % 30-year fixed-rate Agency MBS 3 % 4 % 100 % 100 % March 31, December 31, 2013 2012 Weighted Average Coupon: Adjustable-rate Agency MBS 2.70 % 2.98 % Hybrid adjustable-rate Agency MBS 2.74 2.82 15-year fixed-rate Agency MBS 2.74 2.97 30-year fixed-rate Agency MBS 5.57 5.56 CMOs 1.01 1.01 Total Agency MBS: 2.82 % 2.98 % Average Amortized Cost: Adjustable-rate and hybrid 103.13 % 103.08 % adjustable-rate Agency MBS 15-year fixed-rate Agency MBS 103.27 103.46 30-year fixed-rate Agency MBS 100.92 100.88 Total Agency MBS: 103.08 % 103.07 % Current yield (weighted average coupon divided by average amortized 2.74 % 2.89 % cost) Unamortized premium $279.9 million $268.7 million Unamortized premium as a percentage 3.08 % 3.07 % of par value Premium amortization expense on $19.0 million $20.2 million Agency MBS March 31, December 31, 2013 2012 Fair value of Non-Agency MBS $0.2 million $0.4 million March 31, December 31, 2013 2012 Constant prepayment rate (CPR) of Agency MBS and 24 % 26 % Non-Agency MBS Constant prepayment rate (CPR) of adjustable-rate and hybrid adjustable-rate 24 % 25 % Agency MBS Weighted average term to next interest rate 43 months 37 months reset on Agency MBS and Non-Agency MBS March 31, December 31, 2013 2012 Repurchase Agreements: Outstanding repurchase agreement $8.025 billion $8.020 billion balance Average interest rate 0.41 % 0.47 % Average maturity 37 days 34 days Average interest rate after adjusting for interest rate swap 1.00 % 1.12 % transactions Average maturity after adjusting for interest rate swap 489 days 420 days transactions Fair value of Agency MBS pledged $8.56 billion $8.52 billion to counterparties Interest Rate Swap Agreements: Notional amount $3.30 billion $3.16 billion Percentage of outstanding 41 % 39 % repurchase agreement balance At March 31, 2013 and December 31, 2012, our swap agreements had the following notional amounts (in thousands), weighted average interest rates and remaining terms (in months): March 31, December 31, 2013 2012 Weighted Weighted Remaining Remaining Notional Average Notional Average Term in Term in Amount Interest Amount Interest Months Months Rate Rate Less than $ 200,000 2.85 % 8 $ 375,000 3.32 % 2 12 months 1 year to 2 410,000 2.00 17 410,000 2.07 16 years 2 years 730,000 2.06 30 680,000 2.07 30 to 3 years 3 years 1,145,000 1.66 40 1,045,000 1.93 41 to 4 years Over 4 815,000 1.09 60 650,000 1.11 56 years $ 3,300,000 1.72 % 38 $ 3,160,000 1.98 % 34 At March 31, 2013, our leverage multiple was 7.12x, which was a decrease from our leverage multiple of 7.13x at December 31, 2012. The leverage multiple is calculated by dividing our repurchase agreements outstanding by the aggregate of common stockholders’ equity plus preferred stock and junior subordinated notes. March 31, December 31, 2013 2012 Relative to Average Earning Assets During the Quarter: Interest income earned 2.81 % 2.92 % Amortization of premium 0.86 0.88 Average cost of funds on repurchase agreements 1.06 1.10 and derivative instruments Net interest rate spread 0.89 % 0.94 % At March 31, 2013, stockholders’ equity available to common stockholders was approximately $1.015 billion, or a book value of $7.04 per share, based on approximately 144 million shares of common stock outstanding at quarter end. The $1.015 billion equals total stockholders’ equity of $1.065 billion less the Series A Preferred Stock liquidating value of $48 million and less the difference between the SeriesB Preferred Stock liquidating value of $26.3 million and the proceeds from its sale of $25 million. At December 31, 2012, stockholders’ equity available to common stockholders was approximately $1.014 billion, or a book value of $7.14 per share, based on approximately 142 million shares of common stock outstanding at quarter end. The $1.014 billion equals total stockholders’ equity of $1.062 billion less the Series A Preferred Stock liquidating value of $46.9 million and less the difference between the SeriesB Preferred Stock liquidating value of $26.7 million and the proceeds from its sale of $25.2 million. We will host a conference call on Tuesday, April 30, 2013 at 1:00 PM Eastern Time, 10:00 AM Pacific Time, to discuss first quarter 2013 results. The dial-in number for the conference call is 888-317-6016 for U.S. callers (international callers should dial 412-317-6016 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 April26, 2013. The dial-in number for the replay is 877-344-7529 for U.S. callers (international and Canadian callers should dial 412-317-0088) and the conference number is 10028241. The conference call will also be webcast live over the Internet, which can be accessed on our website at http://www.anworth.com through the corresponding link located on the home page. Investors interested in participating in our Dividend Reinvestment and Stock Purchase Plan, or the Plan, or receiving a copy of the 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.investpower.com or our website at http://www.anworth.com. About Anworth Mortgage Asset Corporation Anworth is an externally-managed mortgage real estate investment trust. We invest primarily in securities guaranteed by the U.S. Government, such as Ginnie Mae, or 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, or the Manager, pursuant a management agreement. The Manager is subject to the supervision and direction of our Board of Directors 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 management services 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.” 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," "continue," or 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 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, changes in the market value of our assets, risks associated with investing in mortgage-related assets, changes in business conditions and the general economy, including the consequences of actions by the U.S. government and other foreign governments to address the global financial crisis, 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, 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 BALANCE SHEETS (in thousands, except per share amounts) March 31, December 31, 2013 2012 (unaudited) ASSETS Agency MBS: Agency MBS pledged to counterparties at fair $ 8,564,021 $ 8,523,557 value Agency MBS at fair value 909,158 668,366 Paydowns receivable 44,163 52,410 9,517,342 9,244,333 Non-Agency MBS at fair value 249 360 Cash and cash equivalents 1,245 2,910 Interest and dividends receivable 25,219 25,839 Derivative instruments at fair value 397 111 Prepaid expenses and other 11,369 11,552 Total Assets: $ 9,555,821 $ 9,285,105 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accrued interest payable $ 20,041 $ 20,376 Repurchase agreements 8,025,000 8,020,000 Junior subordinated notes 37,380 37,380 Derivative instruments at fair value 83,767 96,144 Dividends payable on Series A Preferred 1,018 1,011 Stock Dividends payable on Series B Preferred 436 414 Stock Dividends payable on common stock 21,628 21,302 Payable for securities purchased 274,572 0 Accrued expenses and other 2,195 761 Total Liabilities: $ 8,466,037 $ 8,197,388 Series B Cumulative Convertible Preferred Stock: par value $0.01 per share; liquidating preference $25.00 per share ($26,341 and $26,652, respectively); 1,054 and 1,066 shares issued and outstanding at $ 24,968 $ 25,222 March 31, 2013 and December 31, 2012, respectively Stockholders' Equity: Series A Cumulative Preferred Stock: par value $0.01 per share; liquidating preference $25.00 per share ($47,984 and $ 46,537 $ 45,447 $46,935, respectively); 1,919 and 1,877 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively Common Stock: par value $0.01 per share; authorized 200,000 shares, 144,185 and 1,442 1,420 142,013 issued and outstanding at March 31, 2013 and December 31, 2012, respectively Additional paid-in capital 1,211,091 1,197,793 Accumulated other comprehensive income 67,148 79,776 consisting of unrealized gains and losses Accumulated deficit (261,402 ) (261,941 ) Total Stockholders' Equity: $ 1,064,816 $ 1,062,495 Total Liabilities and Stockholders' Equity: $ 9,555,821 $ 9,285,105 ANWORTH MORTGAGE ASSET CORPORATION STATEMENTS OF INCOME (in thousands, except for per share amounts) (unaudited) Three Months Ended March, 31, 2013 2012 Interest income: Interest on Agency MBS $ 43,444 $ 53,225 Interest on Non-Agency MBS 6 24 Other income 17 14 43,467 53,263 Interest expense: Interest expense on repurchase agreements 20,902 20,574 Interest expense on junior subordinated notes 320 345 21,222 20,919 Net interest income 22,245 32,344 Gain on sales of Agency MBS 5,170 0 Recovery on Non-Agency MBS 129 623 Expenses: Management fee to related party (2,998 ) (2,821 ) Other expenses (922 ) (1,024 ) Total expenses (3,920 ) (3,845 ) Net income $ 23,624 $ 29,122 Dividend on Series A Cumulative Preferred Stock (1,034 ) (1,011 ) Dividend on Series B Cumulative Convertible (412 ) (450 ) Preferred Stock Net income to common stockholders $ 22,178 $ 27,661 Basic earnings per common share $ 0.16 $ 0.20 Diluted earnings per common share $ 0.15 $ 0.20 Basic weighted average number of shares 142,903 135,064 outstanding Diluted weighted average number of shares 146,945 139,292 outstanding Contact: Anworth Mortgage Asset Corporation John T. Hillman (310) 255-4438 or (310) 255-4493 email@example.com http://www.anworth.com
Anworth Announces First Quarter 2013 Financial Results
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