MTGE Investment Corp. Announces Third Quarter 2017 Financial Results

As of September 30, 2017, the Company's fixed rate agency investments were comprised of $0.5 billion 15 year MBS, $0.1 billion 20 year MBS, $3.0 billion 30 year MBS, $0.3 billion net long 15 year TBA securities and $1.6 billion net long 30 year TBA securities.  As of September 30, 2017, 15 year fixed rate investments represented 14% of the Company's agency investment portfolio, consistent with June 30, 2017, and 30 year fixed rate investments represented 82% of the Company's agency portfolio, consistent with June 30, 2017.

As of September 30, 2017, the Company's net long TBA mortgage portfolio had a fair value and cost basis of approximately $1.9 billion, with a net carrying value of $(4.4) million reported in derivative assets/(liabilities) on the Company's consolidated balance sheet.  The Company accounts for TBA securities as derivative instruments and recognizes dollar roll income and other realized and unrealized gains and losses on TBA securities in other gains (losses), net on the Company's consolidated statements of operations.

As of September 30, 2017, the Company's agency fixed rate assets, inclusive of the net long TBA position, had a weighted average coupon of 3.55%, down from 3.57% at June 30, 2017, comprised of the following weighted average coupons:

• 3.10% for 15 year securities;
• 3.29% for 20 year securities; and
• 3.64% for 30 year securities.

As of September 30, 2017, the Company's $0.9 billion non-agency portfolio was comprised of approximately 36% Alt-A, 33% credit risk transfer, 16% prime, 11% option ARM, 2% subprime and 2% commercial mortgage backed securities ("CMBS").

CONSTANT PREPAYMENT RATES
The CPR for the Company's agency portfolio during the third quarter of 2017 was 10.5%, up from 9.2% in the second quarter.  The weighted average projected CPR for the remaining life of the Company's agency securities held as of September 30, 2017 was 8.5%, down from 8.8% as of June 30, 2017 largely due to the mix of assets acquired during the third quarter. 

The Company amortizes and accretes premiums and discounts associated with purchases of agency securities into interest income over the estimated life of such securities based on actual and projected CPRs using the effective yield method.  As such, slower actual and projected prepayments can have a meaningful positive impact, while faster actual or projected prepayments can have a meaningful negative impact on the Company's agency asset yields.

The weighted average cost basis of the Company's agency securities was 105.3% of par and the unamortized agency net premium was $187.7 million as of September 30, 2017.  The amortization of premiums (net of any accretion of discounts) on the agency portfolio for the quarter was $7.0 million, which includes "catch-up" premium amortization expense of $0.7 million due to changes in the Company's projected CPR estimates for securities acquired prior to the third quarter. This compares to net premium amortization cost for the prior quarter of $6.6 million including a "catch-up" premium amortization expense of $0.7 million.

NON-AGENCY ACCRETION INCOME
The weighted average cost basis of the Company's non-agency portfolio was 85.1% of par as of September 30, 2017.  Accretion income on the non-agency portfolio for the quarter was $4.2 million.  The total net discount remaining was $141.1 million as of September 30, 2017, with $88.7 million designated as credit reserves.

ASSET YIELDS, COST OF FUNDS AND NET INTEREST RATE SPREAD
The Company's average annualized net interest rate spread on its balance sheet and TBA securities for the third quarter was 1.72% compared to 1.91% in the second quarter.  Excluding estimated "catch-up" premium amortization due to changes in projected CPR, the Company's average annualized net interest rate spread was 1.76% for the third quarter, compared to 1.96% in the second quarter.

The Company's average agency and non-agency securities asset yield excluding TBAs was 3.35% for the third quarter, compared to 3.40% for the second quarter and 3.47% as of September 30, 2017, down 1 bp from 3.45% as of June 30, 2017.

The Company's average cost of funds was 1.72% for the third quarter, compared to 1.65% for the second quarter.  The Company's average cost of funds includes the cost of effective interest rate swaps, including those used to hedge the Company's TBA assets. The Company's average cost of funds as of September 30, 2017 was 1.63%, compared to 1.54% as of June 30, 2017.

The Company recognized $0.50 per common share of net spread and dollar roll income excluding "catch-up" premium amortization (a non-GAAP financial measure) for the third quarter, compared to $0.54 for the prior quarter.  Net spread and dollar roll income for the third quarter included $0.19 per common share of dollar roll income, compared to $0.21 for the prior quarter.  A reconciliation of the Company's net interest income to net spread and dollar roll income and additional information regarding the Company's use of non-GAAP measures are included later in this release.

LEVERAGE
The Company uses repurchase agreements to fund purchases of agency and non-agency securities. Including TBA securities, the Company's "at risk" leverage ratio for agency and non-agency securities was 6.3x as of September 30, 2017 and averaged 6.2x during the third quarter.

The $3.8 billion borrowed under repurchase agreements as of September 30, 2017 included $1.7 billion with remaining maturities of one month or less and all but $0.3 billion with remaining maturities of less than twelve months.

As of September 30, 2017, the Company's agency and non-agency repurchase agreements had an average of 113 days remaining to maturity, up from 94 days as of June 30, 2017.

HEDGING ACTIVITIES
As of September 30, 2017, 81% of the Company's funding and net TBA balance was hedged through a combination of interest rate swaps, interest rate swaptions and short positions in U.S. Treasury securities, consistent with June 30, 2017.

The Company's interest rate swap positions as of September 30, 2017 totaled $3.6 billion in notional amount, and had a weighted average fixed pay rate of 1.54%, a weighted average receive rate of 1.31% and a weighted average maturity of 4.0 years.  The Company enters into interest rate swaps with longer maturities with the intention of protecting its net book value and longer term earnings potential. 

The Company utilizes interest rate swaptions to mitigate the Company's exposure to larger, more rapid increases in interest rates.  As of September 30, 2017, the Company held payer swaption contracts with a total notional amount of $350.0 million and a weighted average expiration of 2.3 years.  These swaptions have an underlying weighted average interest rate swap term of 8.0 years and a weighted average pay rate of 2.94% as of September 30, 2017.

The Company held a $(0.8) billion net short position in U.S. Treasury securities as of September 30, 2017.

HEALTHCARE REAL ESTATE INVESTMENTS
The Company's wholly owned subsidiary, Capital Healthcare Investments, LLC ("CHI"), held real estate assets of $282 million, financed with $187 million of secured notes payable with a weighted average interest rate of 4.49% as of September 30, 2017.  During the third quarter, CHI recorded lease and rental revenues of $7.7 million and expenses of $5.7 million, including $2.0 million of depreciation expense on real estate assets. 

The Company's real estate assets are accounted for at historical cost, net of accumulated depreciation, as applicable.

SERVICING
During the third quarter, the Company's servicing subsidiary Residential Credit Solutions ("RCS") recorded a net servicing loss of $1.2 million, down from $1.8 million during the second quarter, related to the wind-down of servicing operations.

OTHER GAINS (LOSSES), NET
The Company has elected to record all agency and non-agency securities at fair value with all changes in fair value recorded in current GAAP earnings as other gains (losses).  In addition, the Company has not designated any derivatives as hedges for GAAP accounting purposes and therefore all changes in the fair value of derivatives are recorded in current GAAP earnings as other gains (losses).

During the third quarter, the Company recorded $32.9 million in other gains (losses), net, or $0.72 per common share.  Other gains (losses), net, for the quarter are comprised of:

• $1.2 million of net realized gain on agency and non-agency securities;
• $8.8 million of net unrealized gain on agency securities;
• $9.0 million of net unrealized gain on non-agency securities;
• $(1.4) million of net realized loss on periodic settlements of interest rate swaps;
• $18.2 million of net realized gain on other derivatives and securities; and
• $(2.9) million of net unrealized loss on other derivatives and securities.

THIRD QUARTER 2017 DIVIDEND DECLARATION
On September 13, 2017, the Board of Directors of the Company declared a third quarter dividend on its common stock of $0.45 per share, which was paid on October 27, 2017 to common stockholders of record as of September 29, 2017.  Since its August 2011 initial public offering, the Company has declared and paid a total of $643.3 million in common stock dividends, or $15.00 per common share.

On September 13, 2017, the Board of Directors of the Company declared a third quarter dividend on its 8.125% Series A Cumulative Redeemable Preferred Stock ("Series A Preferred Stock") of $0.5078125 per share. The dividend was paid on October 16, 2017 to preferred stockholders of record as of October 1, 2017.  Since the May 2014 Series A Preferred Stock offering, the Company has declared and paid a total of $15.0 million in Series A Preferred Stock dividends, or $6.9006125 per share.

STOCK REPURCHASE PROGRAM
The Board of Directors of the Company has authorized an extension of the Company's existing stock repurchase plan through December 31, 2018. Under the stock repurchase plan, the Company is authorized to repurchase up to $100 million of its outstanding shares of common stock. The Company has not made any repurchases under the current plan.

FINANCIAL STATEMENTS, OPERATING PERFORMANCE AND PORTFOLIO STATISTICS
The following tables include certain measures of operating performance, such as net spread income and estimated taxable income, which are non-GAAP financial measures.  Please refer to "Use of Non-GAAP Financial Information" later in this release for further discussion of non-GAAP measures.

MTGE INVESTMENT CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
		September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016
		(unaudited)		(unaudited)		(unaudited)				(unaudited)
Assets:
Agency securities, at fair value		$       3,686,634		$       3,657,947		$       2,997,725		$       2,803,168		$       2,952,851
Non-agency securities, at fair value		896,147		884,986		948,495		1,134,469		1,285,266
U.S. Treasury securities, at fair value		-		-		-		20,209		4,995
Land		16,641		16,641		7,374		5,646		4,383
Buildings, furniture, fixtures and equipment, net of   accumulated depreciation		242,239		244,159		105,915		81,780		59,492
Cash and cash equivalents		129,927		155,541		130,084		123,640		122,872
Restricted cash		45,422		40,424		34,442		13,005		44,608
Interest receivable		13,632		12,667		10,593		9,767		10,006
Derivative assets, at fair value Werbung Mehr Nachrichten zur American Capital Mortgage Investment Corporation Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 05:32 - PR Newswire Capital Gearing Trust Plc - Quarterly Report 02:00 - PR Newswire BlackRock Energy and Resources Income Trust Plc - Total Voting Rights 23.04.24 - ARIVA.DE Redaktion Aktienmarkt: Nasdaq 100 mit leichten Zugewinnen (17.388 Pkt.) Solarboom 2024:    5 Gründe die für diese Aktie sprechen… weiterlesen» Anzeige wo-site-teaser-box-16746_site-teaser-box_2024-04-24_08%253A00%253A00_2024-04-25_09%253A00%253A59