JAVELIN Mortgage Investment Corp. Reports 15.5% Annualized ROE From Taxable
REIT Income for the Quarter Ended March 31, 2013
VERO BEACH, Fla., May 6, 2013 (GLOBE NEWSWIRE) -- JAVELIN Mortgage Investment
Corp. (NYSE:JMI) ("JAVELIN" or the "Company") today announced financial
results for the quarter ended March 31, 2013.
First Quarter 2013 Highlights and Financial Information
*Estimated taxable REIT income of approximately $5.8 million ($0.77 per
Common share) represents 15.5% annualized yield on paid-in capital
*Common dividends of $5.2 million ($0.69 per Common share) were paid
*GAAP income was approximately $11.0 million or $1.46 per Common share
*Average yield on assets was 2.99% and average net interest margin was
*As of March 31, 2013, there were 7,500,050 Common shares outstanding
*Book Value (shareholders' equity) as of March 31, 2013 was $138.0 million
or $18.40 per Common share outstanding
*Paid-in capital as of March 31, 2013 was $150.0 million or $20.00 per
Common share outstanding
*The JAVELIN monthly "Company Update" can be found at www.javelinreit.com
Q1 2013 Results
Taxable REIT Income and Core Income
Estimated taxable REIT income for the quarter ended March 31, 2013 was
approximately $5.8million, which represents an annualized return on paid-in
capital of 15.5%. The Company distributes dividends based on its estimate of
taxable earnings per Common share, not based on earnings calculated in
accordance with Generally Accepted Accounting Principles ("GAAP"). Taxable
REIT income and GAAP earnings will differ primarily because of the non-taxable
unrealized changes in the value of the Company's Non-Agency Securities
portfolio and the Company's derivatives, which the Company uses as economic
hedges. These unrealized gains/losses are included in GAAP earnings, whereas
unrealized valuation changes are not included in taxable income.
For the purposes of computing GAAP net income, the changes in fair value of
the Company's Agency Securities are excluded and instead reflected in other
For the quarter ended March 31, 2013, the Company paid dividends of $0.23 per
Common share outstanding for each month of the quarter resulting in payments
of $5.2 million. The Company had estimated taxable REIT income available to
pay dividends of $5.8 million in Q1 2013.
Per Share Amounts
Calculations of per Common share amounts are based on 7,500,050 Common shares
outstanding, which remained unchanged throughout the quarter.
As of March 31, 2013, the Company's Agency Securities portfolio consisted of
fixed rate Fannie Mae, Freddie Mac and Ginnie Mae mortgage securities valued
at $1.1 billion. The Company's Non-Agency Securities portfolio was valued at
$136.8 million at quarter end. The annualized yield on average assets was
2.99%, and the annualized cost of funds on average liabilities (including
realized cost of hedges) was 1.03% resulting in a net interest margin of
Portfolio Financing, Leverage and Interest Rate Hedges
As of March 31, 2013, the Company financed its portfolio with approximately
$1.1 billion of borrowings under repurchase agreements with a weighted average
maturity of 29 days.
The Company's debt to equity ratio, as measured against paid-in capital, was
7.39 to 1, and its ratio of debt to total shareholder equity was 8.04 to 1,
each as of March 31, 2013.
The Company had a notional amount of $475.0 million of various maturities of
interest rate swap contracts with a weighted average swap rate of 1.6%. The
Company had a notional amount of $130.0 million of various maturities of
swaptions with a weighted average swap rate of 1.9%.
JAVELIN's management fee is 1.5% (per annum) of gross equity raised up to $1
billion and 1.0% (per annum) of gross equity raised above $1.0 billion.
Regulation G Reconciliation
Taxable REIT income is calculated according to the requirements of the
Internal Revenue Code rather than GAAP. JAVELIN plans to distribute at least
90% of its taxable REIT income in order to maintain its tax qualification as a
REIT. JAVELIN believes that taxable REIT income is useful to investors because
it is directly related to the amount of dividends the Company is required to
distribute in order to maintain its REIT tax qualification status. However,
because taxable REIT income is an incomplete measure of the Company's
financial performance and involves differences from net income computed in
accordance with GAAP, taxable REIT income should be considered as
supplementary to, and not as a substitute for, JAVELIN's net income computed
in accordance with GAAP as a measure of the Company's financial
performance.The following table reconciles JAVELIN's results from operations
to estimated taxable REIT income for the quarter ended March 31, 2013:
Net income $ 10,976
Net book/tax differences on Non-Agency Securities (1,726)
Unrealized change in derivatives (3,444)
Income tax expense 2
Estimated taxable income $ 5,808
JAVELIN Mortgage Investment Corp.
JAVELIN is a Maryland corporation that invests primarily in fixed rate Agency
and fixed rate and hybrid adjustable rate non-Agency residential
mortgage-backed securities. JAVELIN is externally managed and advised by
ARMOUR Residential Management LLC, an investment advisor registered with the
Securities and Exchange Commission ("SEC"). JAVELIN Mortgage Investment Corp.
will elect to be taxed as a real estate investment trust ("REIT") for U.S.
Federal income tax purposes, commencing with JAVELIN's taxable year ended
December 31, 2012.
This press release includes "forward-looking statements" within the meaning of
the safe harbor provisions of the United States Private Securities Litigation
Reform Act of 1995. Actual results may differ from expectations, estimates and
projections and, consequently, you should not rely on these forward looking
statements as predictions of future events. Words such as "expect,"
"estimate," "project," "budget," "forecast," "anticipate," "intend," "plan,"
"may," "will," "could," "should," "believes," "predicts," "potential,"
"continue," and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements involve
significant risks and uncertainties that could cause the actual results to
differ materially from the expected results. Additional information concerning
these and other risk factors are contained in the Company's most recent
filings with the SEC. All subsequent written and oral forward-looking
statements concerning the Company are expressly qualified in their entirety by
the cautionary statements above. The Company cautions readers not to place
undue reliance upon any forward-looking statements, which speak only as of the
date made. The Company does not undertake or accept any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements to reflect any change in their expectations or any
change in events, conditions or circumstances on which any such statement is
Additional Information and Where to Find It
Investors, security holders and other interested persons may find additional
information regarding the Company at the SEC's Internet site at
http://www.sec.gov/, or the Company website www.javelinreit.com, or by
directing requests to: JAVELIN Mortgage Investment Corp., 3001 Ocean Drive,
Suite 201, Vero Beach, Florida 32963, Attention: Investor Relations.
CONTACT: James R. Mountain
Chief Financial Officer
JAVELIN Mortgage Investment Corp.
JAVELIN Mortgage Investment Corp. Logo
Press spacebar to pause and continue. Press esc to stop.