Replies to post #1 on Anworth Mortgage Asset Corporation (ANH)

[Tina]

Years Ended December 31, 2009 and 2008

For the year ended December 31, 2009, our net income was $130.2 million. Our net income available to common stockholders was $124.3 million, or $1.16 per diluted share, based on a weighted average of 108.9 million fully diluted shares outstanding. This includes net income of $130.2 million minus the payment of preferred dividends of $5.9 million. For the year ended December 31, 2008, our net income was $62.6 million. Our net income available to common stockholders was $56.7 million, or $0.69 per diluted share, based on a weighted average of 85.3 million fully diluted shares outstanding. This includes net income of $62.6 million minus the payment of preferred dividends of $5.9 million.

Net interest income for the year ended December 31, 2009 totaled $146.3 million or 51% of gross income, compared to $106.4 million, or 36% of gross income, for the year ended December 31, 2008. Net interest income is comprised of the interest income earned on mortgage investments (net of premium amortization expense) less interest expense from borrowings. Interest income net of premium amortization expense for the year ended December 31, 2009 was $262.0 million, compared to $287.7 million for the year ended December 31, 2008, a decrease of 9% due primarily to a decrease in average coupons and an increase in premium amortization expense. Interest expense for the year ended December 31, 2009 was $115.7 million, compared to $181.3 million for the year ended December 31, 2008, a decrease of 36.2%, which resulted from a decline in short-term interest rates.

The results of our operations are affected by a number of factors, many of which are beyond our control, and primarily depend on, among other things, the level of our net interest income, the market value of our MBS, the supply of, and demand for, MBS in the marketplace, and the terms and availability of financing. Our net interest income varies primarily as a result from changes in interest rates, the slope of the yield curve (the differential between long-term and short-term interest rates), borrowing costs (our interest expense) and prepayment speeds