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Arlington Asset Investment Corp. Reports Operating Results (10-Q)

August 03, 2012 | About:
10qk

10qk

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Arlington Asset Investment Corp. (AI) filed Quarterly Report for the period ended 2012-06-30.

Arlington Asset Investment Corp has a market cap of $217.7 million; its shares were traded at around $22.32 with a P/E ratio of 4.8 and P/S ratio of 6.5. The dividend yield of Arlington Asset Investment Corp stocks is 15.6%.

Highlight of Business Operations:

For the six months ended June 30, 2012, our net income was $12.9 million compared to net income of $19.9 million for the three months ended June 30, 2011. Our net income includes net interest income of $27.5 million and other net loss of $5.9 million for the six months ended June 30, 2012 compared to net interest income of $24.7 million and other net income of $2.7 million for the six months ended June 30, 2011. The increase in net interest income is due primarily to an increase in the average balance of our agency-backed MBS portfolio. The decrease in other net income is due primarily to limited MBS sales activity during the six months ended June 30, 2012 as compared to $12.6 million in net gain recognized from the MBS sales activity during the six months ended June 30, 2011. Our other expenses increased to $7.9 million during the six months ended June 30, 2012 compared to $6.8 million for the six months ended June 30, 2011, primarily as a result of increases in legal expenses offset by a decrease in variable compensation and related expenses.

For the six months ended June 30, 2012, our net income was $12.9 million compared to net income of $19.9 million for the three months ended June 30, 2011. Our net income includes net interest income of $27.5 million and other net loss of $5.9 million for the six months ended June 30, 2012 compared to net interest income of $24.7 million and other net income of $2.7 million for the six months ended June 30, 2011. The increase in net interest income is due primarily to an increase in the average balance of our agency-backed MBS portfolio. The decrease in other net income is due primarily to limited MBS sales activity during the six months ended June 30, 2012 as compared to $12.6 million in net gain recognized from the MBS sales activity during the six months ended June 30, 2011. Our other expenses increased to $7.9 million during the six months ended June 30, 2012 compared to $6.8 million for the six months ended June 30, 2011, primarily as a result of increases in legal expenses offset by a decrease in variable compensation and related expenses.

The gains on trading investments, net, recognized for the three months ended June 30, 2012 were primarily the result of net mark-to-market gain adjustments of $12.6 million and net gains of $0.1 million from sales of trading investments. The gains on trading investments, net, recognized for the three months ended June 30, 2012, also reflects net realized gains of $2.2 million on the sold securities from the acquisition price and changes in net unrealized mark-to-market gain adjustments of $10.5 million during the three months ended June 30, 2012. The gain on trading investments, net, recognized for the three months ended June 30, 2011 were primarily the result of net mark-to-market gain adjustments of $10.7 million and net gains of $0.9 million from sales of trading investments. The gain on trading investments, net, recognized for the three months ended June 30, 2011, also reflects net realized gains of $0.7 million on the sold securities from the acquisition price and changes in net unrealized mark-to-market gain adjustments of $10.9 million during the same time period.

There were no sales of available-for-sale investments during the six months ended June 30, 2012. During the six months ended June 30, 2011, the Company received $73.3 million from the sale of $111.5 million in face value of MBS recognizing a net gain of $12.2 million and realized net gains from the sale of other investments of $1.8 million.

The gains on trading investments, net, recognized for the six months ended June 30, 2012 were primarily the result of net mark-to-market gain adjustments of $15.7 million and net gains of $0.1 million from sales of trading investments. The gains on trading investments, net, recognized for the six months ended June 30, 2012, also reflects net realized gains of $2.7 million on the sold securities from the acquisition price and changes in net unrealized mark-to-market gain adjustments of $13.1 million during the six months ended June 30, 2012. The gain on trading investments, net, recognized for the six months ended June 30, 2011 were primarily the result of net gains of $0.4 million from sales and net mark-to-market gain adjustments of $12.5 million. The gain on trading investments, net, recognized for the six months ended June 30, 2011, also reflects net realized losses of $0.2 million on the sold securities from the acquisition price and changes in net unrealized mark-to-market gain adjustments of $13.1 million during the same time period.

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