MFA Mortgage Investments Inc. (MFA, Financial) filed Quarterly Report for the period ended 2009-06-30.
MFA Mortgage Investments Inc. operates as a real estate investment trust primarily engaged in the business of investing in mortgage-backed securities. The company also has indirect investment in Lealand Place a multifamily apartment property located in Lawrenceville Georgia. In addition it provides investment advisory services to a third-party institution with respect to their MBS portfolio investments. MFA Mortgage Investments Inc. has a market cap of $1.69 billion; its shares were traded at around $7.58 with a P/E ratio of 8.6 and P/S ratio of 4.1. The dividend yield of MFA Mortgage Investments Inc. stocks is 13.2%. MFA Mortgage Investments Inc. had an annual average earning growth of 17% over the past 5 years.
At June 30, 2009, approximately $8.646 billion, or 91.8%, of our MBS portfolio was in its contractual fixed-rate period and approximately $770.8 million, or 8.2%, was in its contractual adjustable-rate period. Our MBS in their contractual adjustable-rate period include MBS collateralized by Hybrids for which the initial fixed-rate period has elapsed and the current interest rate on such MBS is generally adjusted on an annual or semi-annual basis.
The current financial environment is driven by exceptional monetary easing with a federal funds target rate range of 0.0% to 0.25%. While funding through repurchase agreements has remained available to us at attractive rates, it continues to be our view that the financial industry remains fragile. We continue to maintain lower leverage in accordance with our reduced leverage strategy adopted in early 2008 and our recent emphasis on acquiring Senior MBS without the use of leverage. While the Senior MBS held through MFR are not currently leveraged, we expect that leverage for non-Agency MBS may become more available during the second half of 2009, creating the potential for higher returns on equity and asset appreciation. At June 30, 2009, we had borrowings under repurchase agreements with 18 counterparties and a resulting debt-to-equity multiple of 4.8 times. At June 30, 2009, our liquidity position was $652.5 million, consisting of $282.5 million of cash and cash equivalents, $274.7 million of unpledged Agency MBS and $95.3 of excess collateral. Excluding $363.5 million of equity used by us through MFR to fund unlevered purchases of Senior MBS, our leverage multiple was 6.2 times.
The market value of our Agency MBS continues to be positively impacted by the U.S. Federal Reserve s program to purchase $1.25 trillion of Agency MBS during 2009. These governmental purchases have increased market prices of Agency MBS, thereby reducing their yield. As a result, we did not purchase Agency MBS during the six months ended June 30, 2009. Instead, we opportunistically sold 20 of our longest time-to-reset 10/1 Agency MBS, with an amortized cost of $425.0 million, during the six months ended June 30, 2009. These sales, which resulted in gains of $13.5 million, were made to decrease our sensitivity to the impact of potential increases in market interest rates in the future. While our primary focus remains high quality, higher coupon Agency Hybrid MBS, as part of our strategy, through MFR, we increased our investments in Senior MBS. These Senior MBS, which represent the senior most tranches of residential MBS, were purchased at deep discounts to face (or par) value without the use of leverage. From MFR s inception in November 2008 through June 30, 2009, we acquired $340.7 million of Senior MBS at a weighted average purchase price of 51.1% of the face amount. At June 30, 2009, these Senior MBS had weighted average structural credit enhancement of 11.4%. During the three months ended June 30, 2009, we acquired Senior MBS at an aggregate cost of $265.6 million, at an average price to par value of 51.1%.
Unlike our Agency MBS, the yield on our Senior MBS may increase if their prepayment rates trend up, as purchase discounts are accreted into income. During the six months ended June 30, 2009, our Senior MBS portfolio earned $16.8 million, of which $8.5 million was attributable to the Senior MBS held through MFR. At June 30, 2009, $540.0 million, or 5.7%, of our MBS portfolio, including $353.0 million of MBS held through MFR, was invested in non-Agency MBS, of which $539.9 million were Senior MBS.
Read the The complete ReportMFA is in the portfolios of Arnold Schneider of Schneider Capital Management, David Dreman of Dreman Value Management.
MFA Mortgage Investments Inc. operates as a real estate investment trust primarily engaged in the business of investing in mortgage-backed securities. The company also has indirect investment in Lealand Place a multifamily apartment property located in Lawrenceville Georgia. In addition it provides investment advisory services to a third-party institution with respect to their MBS portfolio investments. MFA Mortgage Investments Inc. has a market cap of $1.69 billion; its shares were traded at around $7.58 with a P/E ratio of 8.6 and P/S ratio of 4.1. The dividend yield of MFA Mortgage Investments Inc. stocks is 13.2%. MFA Mortgage Investments Inc. had an annual average earning growth of 17% over the past 5 years.
Highlight of Business Operations:
At June 30, 2009, we had total assets of approximately $9.806 billion, of which $9.417 billion, or 96.0%, represented our MBS portfolio. At June 30, 2009, our MBS portfolio was comprised of $8.877 billion of Agency MBS, $539.9 million of Senior MBS, and $151,000 of other non-Agency MBS (which were not Senior MBS). The remainder of our investment-related assets was primarily comprised of cash and cash equivalents, restricted cash, MBS-related receivables, and an investment in a multi-family apartment property.At June 30, 2009, approximately $8.646 billion, or 91.8%, of our MBS portfolio was in its contractual fixed-rate period and approximately $770.8 million, or 8.2%, was in its contractual adjustable-rate period. Our MBS in their contractual adjustable-rate period include MBS collateralized by Hybrids for which the initial fixed-rate period has elapsed and the current interest rate on such MBS is generally adjusted on an annual or semi-annual basis.
The current financial environment is driven by exceptional monetary easing with a federal funds target rate range of 0.0% to 0.25%. While funding through repurchase agreements has remained available to us at attractive rates, it continues to be our view that the financial industry remains fragile. We continue to maintain lower leverage in accordance with our reduced leverage strategy adopted in early 2008 and our recent emphasis on acquiring Senior MBS without the use of leverage. While the Senior MBS held through MFR are not currently leveraged, we expect that leverage for non-Agency MBS may become more available during the second half of 2009, creating the potential for higher returns on equity and asset appreciation. At June 30, 2009, we had borrowings under repurchase agreements with 18 counterparties and a resulting debt-to-equity multiple of 4.8 times. At June 30, 2009, our liquidity position was $652.5 million, consisting of $282.5 million of cash and cash equivalents, $274.7 million of unpledged Agency MBS and $95.3 of excess collateral. Excluding $363.5 million of equity used by us through MFR to fund unlevered purchases of Senior MBS, our leverage multiple was 6.2 times.
The market value of our Agency MBS continues to be positively impacted by the U.S. Federal Reserve s program to purchase $1.25 trillion of Agency MBS during 2009. These governmental purchases have increased market prices of Agency MBS, thereby reducing their yield. As a result, we did not purchase Agency MBS during the six months ended June 30, 2009. Instead, we opportunistically sold 20 of our longest time-to-reset 10/1 Agency MBS, with an amortized cost of $425.0 million, during the six months ended June 30, 2009. These sales, which resulted in gains of $13.5 million, were made to decrease our sensitivity to the impact of potential increases in market interest rates in the future. While our primary focus remains high quality, higher coupon Agency Hybrid MBS, as part of our strategy, through MFR, we increased our investments in Senior MBS. These Senior MBS, which represent the senior most tranches of residential MBS, were purchased at deep discounts to face (or par) value without the use of leverage. From MFR s inception in November 2008 through June 30, 2009, we acquired $340.7 million of Senior MBS at a weighted average purchase price of 51.1% of the face amount. At June 30, 2009, these Senior MBS had weighted average structural credit enhancement of 11.4%. During the three months ended June 30, 2009, we acquired Senior MBS at an aggregate cost of $265.6 million, at an average price to par value of 51.1%.
Unlike our Agency MBS, the yield on our Senior MBS may increase if their prepayment rates trend up, as purchase discounts are accreted into income. During the six months ended June 30, 2009, our Senior MBS portfolio earned $16.8 million, of which $8.5 million was attributable to the Senior MBS held through MFR. At June 30, 2009, $540.0 million, or 5.7%, of our MBS portfolio, including $353.0 million of MBS held through MFR, was invested in non-Agency MBS, of which $539.9 million were Senior MBS.
Read the The complete ReportMFA is in the portfolios of Arnold Schneider of Schneider Capital Management, David Dreman of Dreman Value Management.
