HATTERAS FINL CPRP (HTS, Financial) filed Quarterly Report for the period ended 2011-09-30.
Hatteras Financial has a market cap of $1.97 billion; its shares were traded at around $26.23 with a P/E ratio of 6.51 and P/S ratio of 7.44. The dividend yield of Hatteras Financial stocks is 15.25%.
Our annualized yield on average assets for the quarter ended September 30, 2011 was 2.72% as compared to 3.70% for the quarter ended September 30, 2010. After coupon rate, the yield on our assets is most directly affected by the rate of repayments on our agency securities. Our annualized rate of portfolio repayment for the three months ended September 30, 2011 was 28.55%, which was lower than the rate of 33.91% for the three months ended September 30, 2010. The rate for the quarter ended September 30, 2010 was elevated as compared to the current quarter primarily due to the impact of Fannie Mae and Freddie Mac repurchasing delinquent mortgages from existing MBS, which was a one-time event. Historically, the prepayment rate of mortgages has been most affected by the increase or decrease of interest rates. However, the current condition of the U.S. economy and housing market has inhibited, and may continue to inhibit, some homeowners ability to purchase a new home or refinance an existing mortgage, keeping prepayment rates slower than expected. The U.S. Government continues to be active in the mortgage market, and their ability to influence the market poses a risk to the sustainability of our current earnings.
In general, most of the items influencing our operating results for the nine month periods ended September 30, 2011 and 2010 were similar as the items affecting the quarterly results described above. For the nine month period ended September 30, 2011 we had interest income of $311.3 million compared to $197.0 million for the same period in 2010. Due to investing the proceeds of our common stock offerings, our portfolio was significantly larger during this period, as we had average earning assets of $14.0 billion for the nine months ended September 30, 2011 compared to $6.7 billion for the nine months ended September 30, 2010. Offsetting this increase in earning assets was a lower yield on the portfolio. Our yield dropped from 3.88% for the nine months ended September 30, 2010 to 2.95% for the nine months ended September 30, 2011. This was the result of buying lower coupon MBS with our offering proceeds and replacing repayments of principal on our MBS. The portfolio prepayment rate decreased on an annualized basis, from 38.26% for the first nine months of 2010 to 23.37% for the same period in 2011. The Fannie Mae and Freddie Mac delinquent loan repurchase program, as mentioned above, were the primary cause of our faster rate of repayment in 2010.
Our net interest income for the nine months ended September 30, 2011 was $208.9 million, and our spread was 1.89%. For the nine months ended September 30, 2010, our net interest income was $125.8 million and our spread was 2.35%. We incurred expenses for the nine months ended September 30, 2011 and 2010 of $12.9 million and $9.8 million, respectively. We earned net income of $213.7 million or $3.05 per weighted average share for the nine months ended September 30, 2011. For the nine months ended September 30, 2010, we earned net income of $123.8 million or $3.33 per weighted average share. Our per share income for the nine months ended September 30, 2011 was lower than the nine months ended September 30, 2010 due to two main factors. First, we had lower spread in the first nine months of 2011 due to lower overall mortgage rates. Second, we were investing the proceeds from our common stock offerings in January and March 2011. Our investment process generally takes from one to three months to complete, and therefore, we were not at our typical run-rate of earnings until the third quarter of 2011.
During the three months ended September 30, 2011, we issued 1,295,000 shares of common stock in at-the-market transactions at an average price of $27.95 per share raising net proceeds, after sales commissions and expenses, of approximately $35.7 million. We paid $0.5 million in sales commissions to Cantor during the three months ended September 30, 2011. The shares of common stock issuable pursuant to the CEO Program are registered with the SEC on our Registration Statement on Form S-3 (No. 333-159145), which became effective upon filing on October 9, 2009.
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Hatteras Financial has a market cap of $1.97 billion; its shares were traded at around $26.23 with a P/E ratio of 6.51 and P/S ratio of 7.44. The dividend yield of Hatteras Financial stocks is 15.25%.
Highlight of Business Operations:
While our operations are affected in many ways by the issuance of additional shares, a significant earnings impact may be that we are not able to invest all of the proceeds immediately. Depending on market conditions, and considering the fact that normal trade settlement on agency securities is not based on the trade date, on average, we have invested the proceeds from these offerings in approximately two months from the date of these offerings. Since each capital raise was individually significant to the size of our portfolio, our results from operations, and some statistics regarding such results, may not be meaningful or portray the underlying fundamentals of our investment portfolio.Our annualized yield on average assets for the quarter ended September 30, 2011 was 2.72% as compared to 3.70% for the quarter ended September 30, 2010. After coupon rate, the yield on our assets is most directly affected by the rate of repayments on our agency securities. Our annualized rate of portfolio repayment for the three months ended September 30, 2011 was 28.55%, which was lower than the rate of 33.91% for the three months ended September 30, 2010. The rate for the quarter ended September 30, 2010 was elevated as compared to the current quarter primarily due to the impact of Fannie Mae and Freddie Mac repurchasing delinquent mortgages from existing MBS, which was a one-time event. Historically, the prepayment rate of mortgages has been most affected by the increase or decrease of interest rates. However, the current condition of the U.S. economy and housing market has inhibited, and may continue to inhibit, some homeowners ability to purchase a new home or refinance an existing mortgage, keeping prepayment rates slower than expected. The U.S. Government continues to be active in the mortgage market, and their ability to influence the market poses a risk to the sustainability of our current earnings.
In general, most of the items influencing our operating results for the nine month periods ended September 30, 2011 and 2010 were similar as the items affecting the quarterly results described above. For the nine month period ended September 30, 2011 we had interest income of $311.3 million compared to $197.0 million for the same period in 2010. Due to investing the proceeds of our common stock offerings, our portfolio was significantly larger during this period, as we had average earning assets of $14.0 billion for the nine months ended September 30, 2011 compared to $6.7 billion for the nine months ended September 30, 2010. Offsetting this increase in earning assets was a lower yield on the portfolio. Our yield dropped from 3.88% for the nine months ended September 30, 2010 to 2.95% for the nine months ended September 30, 2011. This was the result of buying lower coupon MBS with our offering proceeds and replacing repayments of principal on our MBS. The portfolio prepayment rate decreased on an annualized basis, from 38.26% for the first nine months of 2010 to 23.37% for the same period in 2011. The Fannie Mae and Freddie Mac delinquent loan repurchase program, as mentioned above, were the primary cause of our faster rate of repayment in 2010.
Our net interest income for the nine months ended September 30, 2011 was $208.9 million, and our spread was 1.89%. For the nine months ended September 30, 2010, our net interest income was $125.8 million and our spread was 2.35%. We incurred expenses for the nine months ended September 30, 2011 and 2010 of $12.9 million and $9.8 million, respectively. We earned net income of $213.7 million or $3.05 per weighted average share for the nine months ended September 30, 2011. For the nine months ended September 30, 2010, we earned net income of $123.8 million or $3.33 per weighted average share. Our per share income for the nine months ended September 30, 2011 was lower than the nine months ended September 30, 2010 due to two main factors. First, we had lower spread in the first nine months of 2011 due to lower overall mortgage rates. Second, we were investing the proceeds from our common stock offerings in January and March 2011. Our investment process generally takes from one to three months to complete, and therefore, we were not at our typical run-rate of earnings until the third quarter of 2011.
During the three months ended September 30, 2011, we issued 1,295,000 shares of common stock in at-the-market transactions at an average price of $27.95 per share raising net proceeds, after sales commissions and expenses, of approximately $35.7 million. We paid $0.5 million in sales commissions to Cantor during the three months ended September 30, 2011. The shares of common stock issuable pursuant to the CEO Program are registered with the SEC on our Registration Statement on Form S-3 (No. 333-159145), which became effective upon filing on October 9, 2009.
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