Anworth Declares a $0.14 Per Share First Quarter 2014 Common Stock Dividend and Announces Corporate Actions

  Anworth Declares a $0.14 Per Share First Quarter 2014 Common Stock Dividend
  and Announces Corporate Actions

  *Dividend increases significantly due to benefit of discontinued hedges
  *Board appoints Strategic Review Committee to oversee new initiatives
  *Formation of new subsidiary to participate in real estate-related
    activities
  *Nomination of new director to replace retiring founding director

Business Wire

SANTA MONICA, Calif. -- March 21, 2014

Anworth Mortgage Asset Corporation (NYSE: ANH) announced today that its Board
of Directors declared, on March 20, 2014 a quarterly common stock dividend of
$0.14 per share for the first quarter of 2014. The common stock dividend is
payable on April 29, 2014 to common stockholders of record as of the close of
business on March 31, 2014.

During the current quarter, the Company elected to discontinue hedge
accounting for certain of its interest rate swaps, as it determined these
swaps were no longer necessary or effective components of the Company’s
asset/liability management strategy. In particular, the assets which these
swaps were intended to hedge now have substantially lower principal balances
and lessened sensitivity to unexpected rises in short-term interest rates than
originally anticipated. These interest rate swaps remain in effect and have
not been terminated.

In determining the current quarterly common stock dividend, the Company
decided to declare a dividend relative to its current earnings excluding the
cost of these discontinued hedges and intends to continue to do so in the
future. The cost of these discontinued hedges will be approximately $8 million
for the quarter ended March 31, 2014. The interest rate swaps for which hedge
accounting has been discontinued carry a notional balance of approximately
$1.7 billion, an average pay-fixed interest rate of 2.13% and an average
maturity of September, 2015. At December 31, 2013, these swaps had a negative
fair value of approximately $ -47 million which was reflected in the Company’s
book value.

Commenting on the increase in the dividend rate, Lloyd McAdams, the Company’s
Chief Executive Officer, noted that, “By increasing the dividend to $0.14 per
share, shareholders will receive a distribution that reflects the full earning
power of the Company’s current portfolio of assets and related active hedges.
Also, since the negative fair value of these legacy swaps is already reflected
in book value, the increase in dividend distribution should not affect future
book value, as it is expected to be offset by an equivalent increase in the
swaps’ fair value as they approach maturity.”

Strategic Review Committee

The Company also announced that its Board of Directors has formed a Strategic
Review Committee consisting of solely independent directors. The immediate
role of this Committee is to identify individuals and organizations which will
participate in the management and execution of the Company’s recently
announced diversification program to invest in other types of mortgage and
real estate assets through its Qualified REIT Subsidiary and its Taxable REIT
Subsidiary.

Taxable REIT Subsidiary

The Company also announced the incorporation of Anworth Property Services,
Inc., a Taxable REIT Subsidiary (“TRS”) that is wholly-owned by the Company.
The Company’s TRS will provide the entity through which the Company may
participate in various real estate-related activities which would earn profits
that the IRS considers to be taxable income. Unlike a REIT, a TRS pays
standard corporate taxes on its income earned from these activities in the
mortgage and real estate markets which include most real estate related
activities other than receiving rent on properties owned and collecting
interest on real estate mortgages owned. Examples of these other activities
include: the securitization of mortgage loans; mortgage origination; leasing
and managing rental properties; and owning properties acquired through the
foreclosure process.

Appointment of Director

The Company also announced that Mr. Charles H. Black, an independent and
founding Director on the Company’s Board of Directors (the “Board”), has
informed the Board that he will not be standing for re-election to the Board
at the Company’s 2014 Annual Meeting of Stockholders due to personal health
reasons and not because of a disagreement with the Company. During the past
sixteen years, the Company has greatly benefitted from Mr. Black’s wise and
experienced advice and he will be missed as a Director.

Accordingly, our Board has appointed Mr. Mark S. Maron as a Director Nominee
for election at the Company’s 2014 Annual Meeting of Stockholders to fill the
vacancy created by Mr. Black not standing for re-election to our Board.

Mr. Maron, 58, is a partner with Acre Corporation, a private equity commercial
real estate firm located in Pleasanton, California. From September 2005 to
December 2007, Mr. Maron was a founding principal of Birchmont Capital
Advisors, LLC (“Birchmont”), a real estate private equity firm focused on
multi-family properties. Prior to forming Birchmont, Mr. Maron spent 23 years
as an investment banker, including 18 years at Credit Suisse, where he ran the
firm’s Investment Banking Division in Los Angeles. Mr. Maron served on the
board of directors of True Religion Brand Jeans until its sale to a private
equity firm in July 2013. Mr. Maron holds a Bachelor of Arts degree from
McGill University in Montreal, Canada, and holds a Master of Business
Administration degree in Finance from the Wharton School of Business.

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.” Anworth 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, including the consequences of actions by the U.S. government and
other foreign governments to address the global financial crisis;
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; 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.

Contact:

Anworth Mortgage Asset Corporation
John T. Hillman
310-255-4438
310-255-4493
jhillman@anworth.com
http://www.anworth.com
 
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