AGNC Reports $2.02 Earnings Per Share and $20.76 Book Value Per Common Share
BETHESDA, Md.,
SECOND QUARTER 2009 HIGHLIGHTS
- Declared a dividend of $1.50 per common share
- $1.98 per share of taxable income
- $0.79 per share of undistributed taxable income as of June 30, 2009
- Net income of $30.4 million, or $2.02 per common share
- $1.48 per share excluding $0.18 of amortization expense related to terminated swaps and $0.72 per share of other income
- 39.8% annualized return on average stockholders' equity for the quarter
- 3.55% average net interest rate spread for the quarter
- $2.6 billion agency securities portfolio at fair value as of June 30, 2009
- 7.7x(1) leverage as of June 30, 2009
- $20.76 book value per common share as of June 30, 2009, an increase of 8%, or $1.50 per share, from March 31, 2009
- Effective July 1, 2009, completed organizational changes, transitioning certain dedicated employees to AGNC's management company
"Our results for the quarter benefited from several factors, including slower than expected prepayment speeds, a larger investment portfolio, lower funding costs and improved valuations on higher coupon agency securities," commented
SECOND QUARTER 2009 DIVIDEND DECLARATION
On
INVESTMENT PORTFOLIO
As of
CAPITAL GAINS
During the quarter, AGNC generated
ASSET YIELDS, COST OF FUNDS AND NET INTEREST RATE SPREAD
During the quarter, the annualized weighted average yield on average earning assets was 5.35% and the annualized average cost of funds was 1.80%, including 0.50% of amortization expense associated with the termination of interest rate swaps, which resulted in a net interest rate spread of 3.55%. Excluding the amortization expense, the net interest rate spread was 4.05%. As of
The actual constant prepayment rate ("CPR") for the Company's portfolio held in the second quarter was 17%, which was down from 20% in the first quarter of 2009. The Company's projected CPR for the remaining life of its investments as of
The weighted average cost basis of the investment portfolio was 103.1% as of
LEVERAGE AND HEDGING ACTIVITIES
As of
The Company's swap positions as of
Additionally, during the quarter the Company terminated five interest rate swaps with a combined notional amount of
As of
Financial highlights for the quarter are as follows:
AMERICAN CAPITAL AGENCY CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, March 31, December 31,
2009 2009 2008
-------- --------- ------------
(unaudited) (unaudited)
Assets:
Agency securities, at fair
value (including pledged
assets of $2,535,249 ,
$2,060,748 , and $1,522,001 ,
respectively) $2,631,893 $2,257,474 $1,573,383
Cash and cash equivalents 69,226 53,774 56,012
Restricted cash 5,203 25,168 18,692
Interest receivable 14,005 10,474 7,851
Derivative assets, at
fair value 3,257 - -
Receivable for agency
securities sold 73,505 38,148 -
Principal payments receivable 6,291 - -
Other assets 392 257 387
--- --- ---
Total assets $2,803,772 $2,385,295 $1,656,325
========== ========== ==========
Liabilities:
Repurchase arrangements $2,346,875 $1,849,473 $1,346,265
Payable for agency
securities purchased 110,872 207,220 -
Accrued interest payable 1,213 1,428 3,664
Derivative liabilities, at
fair value 9,839 24,441 29,277
Dividend payable 22,507 12,754 18,006
Due to Manager 607 665 714
Accounts payable and other
liabilities 416 353 248
--- --- ---
Total liabilities 2,492,329 2,096,334 1,398,174
--------- --------- ---------
Stockholders' equity:
Preferred stock, $0.01 par value;
10,000 shares authorized,
0 shares issued and
outstanding, respectively - - -
Common stock, $0.01 par value;
150,000 shares authorized,
15,005 shares issued and
outstanding, respectively 150 150 150
Additional paid-in capital 285,932 285,924 285,917
Retained earnings
(accumulated deficit) 9,106 1,247 (2,310)
Accumulated other comprehensive
income (loss) 16,255 1,640 (25,606)
------ ----- -------
Total stockholders' equity 311,443 288,961 258,151
------- ------- -------
Total liabilities and
stockholders' equity $2,803,772 $2,385,295 $1,656,325
========== ========== ==========
AMERICAN CAPITAL AGENCY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three months ended
------------------
June 30, March 31, December 31,
2009 2009 2008
-------- --------- ------------
Interest income:
Interest income $31,690 $22,351 $17,132
Interest expense 9,585 8,129 10,331
----- ----- ------
Net interest income 22,105 14,222 6,801
------ ------ -----
Other income:
Gain from sale of agency
securities, net 9,530 4,818 5
Gain (loss) from derivative
instruments, net 1,226 (358) 6,286
----- ---- -----
Total other income 10,756 4,460 6,291
Expenses:
Management fees 939 903 927
General and administrative
expenses 1,556 1,468 1,213
----- ----- -----
Total expenses 2,495 2,371 2,140
----- ----- -----
Net income $30,366 $16,311 $10,952
======= ======= =======
Net income per common share -
basic and diluted $2.02 $1.09 $0.73
Weighted average number of
common shares outstanding -
basic and diluted 15,005 15,005 15,005
Dividends declared per
common share $1.50 $0.85 $1.20
AMERICAN CAPITAL AGENCY CORP.
KEY PORTFOLIO CHARACTERISTICS*
(unaudited)
(in thousands, except per share data)
Three months ended
------------------
June 30, March 31, December 31,
2009 2009 2008
-------- --------- ------------
Average agency securities $2,367,303 $1,738,321 $1,604,087
Average total assets $2,676,006 $1,968,190 $1,662,882
Average repurchase agreements $2,139,402 $1,537,798 $1,355,267
Average stockholders' equity $305,866 $274,278 $263,970
Fixed rate agency securities
- as of period end $1,203,261 $1,387,278 $1,573,383
Adjustable rate agency
securities - as of period end $1,307,430 $870,196 $-
CMO agency securities
- as of period end $121,202 $- $-
Average asset yield (1) 5.35% 5.13% 4.24%
Average cost of funds (2) 1.30% 2.03% 3.05%
Average cost of funds -
terminated swap amortization
expense (3) 0.50% 0.08% 0.00%
Average net interest rate
spread (4) 3.55% 3.02% 1.19%
Net return on average
equity (5) 39.82% 24.12% 16.46%
Leverage (average during the
period) (6) 7.0:1 5.6:1 5.1:1
Leverage (as of period
end) (7) 7.7:1 7.0:1 5.2:1
Annualized expenses % of
average assets (8) 0.37% 0.49% 0.51%
Annualized expenses % of
average equity (9) 3.27% 3.51% 3.22%
Book value per common
share as of period end (10) $20.76 $19.26 $17.20
* All percentages are annualized.
(1) Weighted average asset yield for the period was calculated by
dividing our average interest income on agency securities less
average amortization of premiums and discounts by our average agency
securities.
(2) Weighted average cost of funds for the period was calculated by
dividing our total interest expense by our weighted average
repurchase agreements. Total interest expense excludes amortization
expense related to the fair value of terminated swaps during the
periods presented.
(3) Represents amortization expense associated with the termination of
interest rate swaps of $2.7 million in the second quarter of 2009,
$0.3 million in the first quarter of 2009 and $0.0 million for the
fourth quarter of 2008.
(4) Average net interest rate spread for the period was calculated by
subtracting our weighted average cost of funds, net of interest rate
swaps and terminated swap amortization expense, from our weighted
average asset yield.
(5) Net return on average stockholders' equity for the period was
calculated by dividing our net income by our average stockholders'
equity.
(6) Leverage during the period was calculated by dividing our average
repurchase agreements outstanding by our average stockholders'
equity.
(7) Leverage at period end was calculated by dividing the amount
outstanding under our repurchase agreements and net liabilities for
unsettled agency securities by our total stockholders' equity at
period end.
(8) Annualized expenses as a % of average total assets was calculated by
dividing our total expenses by our average total assets.
(9) Annualized expenses as a % of average stockholders' equity was
calculated by dividing our total expenses by our average
stockholders' equity.
(10) Book value per common share was calculated by dividing our total
stockholders' equity by our number of common shares outstanding.
STOCKHOLDER CALL
AGNC invites stockholders, prospective stockholders and analysts to attend the AGNC stockholder call on
A slide presentation will accompany the call and will be available at www.AGNC.com. Select the Q2 2009 Earnings Presentation link to download and print the presentation in advance of the Stockholder Call.
An archived audio of the stockholder call combined with the slide presentation will be made available on our website after the call on
For further information or questions, please do not hesitate to call our
ABOUT AGNC
AGNC is a REIT that invests exclusively in agency pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by a U.S. Government agency or a U.S. Government-sponsored entity. The Company is externally managed and advised by an affiliate of
ABOUT AMERICAN CAPITAL
American Capital is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products. Founded in 1986, American Capital has
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements. Forward-looking statements are based on estimates, projections, beliefs and assumptions of management of the Company at the time of such statements and are not guarantees of future performance. Forward-looking statements involve risks and uncertainties in predicting future results and conditions. Actual results could differ materially from those projected in these forward-looking statements due to a variety of factors, including, without limitation, changes in interest rates, changes in the yield curve, changes in prepayment rates, the availability and terms of financing, changes in the market value of our assets, general economic conditions, market conditions, conditions in the market for agency securities, and legislative and regulatory changes that could adversely affect the business of the Company. Certain factors that could cause actual results to differ materially from those contained in the forward-looking statements, are included in the Company's periodic reports filed with the
(1) Leverage calculated as total repurchase agreements outstanding plus payable for agency securities purchased but not yet settled less receivable for agency securities sold but not yet settled over total stockholders' equity as of
(2) Economic return equals
(3) As of
SOURCE:
CONTACT:
Investors
+1-301-968-9300
or
Media
+1-301-968-9400
both of
Web Site:
http://www.AGNC.com