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

November 02, 2012 | About:
10qk

10qk

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Arlington Asset Investment Corp. (AI) filed Quarterly Report for the period ended 2012-09-30.

Atrium Mortgage Investment Corp has a market cap of $210.3 million; its shares were traded at around $0 with a P/E ratio of 4.9 and P/S ratio of 6.3. The dividend yield of Atrium Mortgage Investment Corp stocks is 16.1%.

Highlight of Business Operations:

In addition to the financial results reported in accordance with generally accepted accounting principles as consistently applied in the United States (GAAP), we calculated non-GAAP core operating income for the three and nine months ended September 30, 2012. Our core operating income for the three and nine months ended September 30, 2012 was $13.5 million and $33.7 million, respectively. In determining core operating income, we excluded certain costs and the following non-cash expenses: (1) compensation costs associated with stock-based awards, (2) accretion of MBS purchase discounts adjusted for principal repayments in excess of proportionate invested capital, (3) unrealized mark-to-market adjustments on the trading MBS and hedge instruments and (4) other-than-temporary impairment charges recognized. This non-GAAP measurement is used by management to analyze and assess the operating results and dividends. We believe that this non-GAAP measurement assists investors in understanding the impact of these non-core items and non-cash expenses on our performance and provides additional clarity around our forward earnings capacity and trend. A limitation of utilizing this non-GAAP measure is that the GAAP accounting effects of these events do in fact reflect the underlying financial results of our business and these effects should not be ignored in evaluating and analyzing our financial results. Therefore, we believe net income on a GAAP basis and core operating income on a non-GAAP basis should be considered together.

During the three months ended September 30, 2012, the Company received $1.0 million from the sales of $4.9 million in face value of available-for-sale MBS recognizing a net gain of $49.2 thousand. During the three months ended September 30, 2011, the Company received $5.9 million from the sales of $7.5 million in face value of available-for-sale MBS recognizing a net gain of $1.0 million.

The gains on trading investments, net, recognized for the three months ended September 30, 2012 were primarily the result of net mark-to-market gain adjustments of $9.1 million and net gains of $1.5 million from sales of trading investments. The gains on trading investments, net, recognized for the three months ended September 30, 2012, also reflects net realized gains of $7.5 million on the sold securities from the acquisition price and changes in net unrealized mark-to-market gain adjustments of $3.1 million during the three months ended September 30, 2012. The gain on trading investments, net, recognized for the three months ended September 30, 2011 was the result of net mark-to-market gain adjustments of $15.9 million.

During the nine months ended September 30, 2012, the Company received $1.0 million from the sales of $4.9 million in face value of MBS recognizing a net gain of $49.2 thousand. During the nine months ended September 30, 2011, the Company received $79.2 million from the sale of $119.0 million in face value of MBS recognizing a net gain of $13.1 million and realized net gains from the sale of other investments of $1.9 million.

The gains on trading investments, net, recognized for the nine months ended September 30, 2012 were primarily the result of net mark-to-market gain adjustments of $22.6 million and net gains of $3.8 million from sales of trading investments. The gains on trading investments, net, recognized for the nine months ended September 30, 2012, also reflects net realized gains of $10.2 million on the sold securities from the acquisition price and changes in net unrealized mark-to-market gain adjustments of $16.2 million during the nine months ended September 30, 2012. The gain on trading investments, net, recognized for the nine months ended September 30, 2011 were primarily the result of net gains of $0.4 million from sales and net mark-to-market gain adjustments of $28.4 million. The gains on trading investments, net, recognized for the nine months ended September 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 $29.0 million during the same time period.

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