MFA Mortgage misses by $0.02
8:34 AM 8/6/2012 - Briefing.com
Reports Q2 (Jun) earnings of $0.20 per share, $0.02 worse than the Capital IQ Consensus Estimate of $0.22. MFA's REIT taxable income exceeded Core Earnings in the first half of 2012, primarily due to the fact that for Non-Agency MBS acquired at a discount, Core Earnings are reduced by credit reserves for estimated future losses while taxable income is reduced by realized losses only when they actually occur. MFA typically distributes annually approximately 100% of its REIT taxable income and consequently, dividends exceeded Core Earnings in the first two quarters of 2012. MFA currently anticipate that MFA's REIT taxable income and Core Earnings will trend closer together in the second half of 2012.
At quarter-end debt to equity ratio (including the liabilities underlying our Linked Transactions) was 3.6:1. In this low interest rate environment, core earnings per share was $0.20 versus $0.21 in the first quarter. Agency portfolio had an average amortized cost basis of 102.9% of par as of June 30, 2012, and generated a 2.95% yield in the second quarter. Non-Agency portfolio had an average amortized cost of 73.0% of par as of June 30, 2012, and generated a loss-adjusted yield of 6.75% in the second quarter (Non-Agency average cost and loss-adjusted yield are adjusted for the impact of MBS Linked Transactions).
MFA's $4.741 billion fair market value of Non-Agency MBS had a face amount of $6.360 billion, an amortized cost of $4.643 billion and a net purchase discount of $1.718 billion (all amounts adjusted for the impact of MBS Linked Transactions) at June 30, 2012.
