BETHESDA, Md. Feb. 6, 2012 /PRNewswire/ -- American Capital
Agency Corp. ("AGNC" or the "Company") (Nasdaq: AGNC) today
reported net income and comprehensive income for the fourth quarter
of 2011 of $208.7 million and
$476.8 million, respectively, or
$0.99 per share and $2.27 per share, respectively, and net book value
of $27.71 per share. Economic
return, defined as dividends plus the change in net book value, for
the year was $9.07 per share, or
37%.
FOURTH QUARTER 2011 FINANCIAL HIGHLIGHTS
- $2.27 comprehensive income per
share, comprised of:
- $0.99 net income per share
- $1.28 other comprehensive income
per share
- $0.98 net spread income per share
- Comprised of interest income, net of cost of funds (including
interest rate swaps) and operating expenses
- Impacted by timing of fourth quarter equity raise, higher
year-end repo rates and higher projected constant prepayment rates
("CPR")
- $1.01 per share, excluding
$0.03 per share "true-up" of
estimated premium amortization cost due to changes in projected
CPR
- $1.61 estimated taxable income
per share
- $1.40 dividend declared per
share
- $0.80 estimated undistributed
taxable income per share as of December 31,
2011
- Increased $24 million from
$156 million as of September 30, 2011 to $180
million as of December 31,
2011
- On a per share basis, decreased $0.05 from $0.85
per share as of September 30,
2011
- $27.71 net book value per share
as of December 31, 2011
- Increased $0.81 per share from
$26.90 per share as of
September 30, 2011
- 33% annualized economic return
- Comprised of $1.40 dividend per
share and $0.81 increase in net book
value per share
OTHER FOURTH QUARTER HIGHLIGHTS
- $55 billion investment portfolio
as of December 31, 2011
- 7.9x leverage as of December 31, 2011, including net
payable for unsettled securities
- 7.6x average leverage for the quarter
- 9% actual CPR for securities held during the quarter
- 14% average projected life CPR as of December 31, 2011
- 1.90% annualized net interest rate spread for the quarter
- 1.94% net interest rate spread as of December 31, 2011
- $1.1 billion of net proceeds
raised in a follow-on equity offering
- Equity issuance was accretive to net book value at the time of
the offering
2011 FULL YEAR FINANCIAL HIGHLIGHTS
- $7.50 comprehensive income per
share, comprised of:
- $5.02 net income per share
- $2.48 other comprehensive income
per share
- $4.66 net spread income per
share
- $6.70 estimated taxable income
per share
- $5.60 dividends declared per
share
- Estimated undistributed taxable income increased from
$0.60 per share as of December 31, 2010 to $0.80 per share as of December 31, 2011
- $3.47 per share, or 14%, increase
in net book value from $24.24 per
share as of December 31, 2010 to
$27.71 per share as of December 31, 2011
- 37% economic return
- $5.60 dividends per share and
$3.47 increase in net book value per
share
"Last year was another challenging year, with significant
volatility in both interest rates and prepayments," commented
Gary Kain, President and Chief
Investment Officer. "Despite this backdrop, AGNC was able to
produce an economic (or mark-to-market) return of 37% for the year
through the combination of dividends totaling $5.60 per share and book value growth of
$3.47 per share."
"As we enter 2012, we continue to be very optimistic about the
future of our business," added Mr. Kain. "The Federal Reserve
recently stated that it expects short term interest rates to remain
extremely low through at least late 2014. In addition, we
continue to believe our portfolio remains very well positioned for
the current environment, as evidenced by the favorable prepayment
performance of our specific mortgage holdings and the composition
of our hedge book. In aggregate, while margins have certainly
compressed, the durability of very attractive investment returns
has been enhanced."
"This quarter, following our discontinuation of hedge accounting
for GAAP as of the end of last quarter, we have chosen to add
Comprehensive Income to our financial highlights," continued Mr.
Kain. "We believe this is the most appropriate GAAP measure
of our earnings performance since it reflects not only the income
and gains we generated from our portfolio, net of any financing and
economic hedging costs, but also the change in market value of our
assets and derivative instruments."
"This was another excellent year for American Capital Agency,"
commented Malon Wilkus, Chief
Executive Officer. "Gary and the team continue to deliver
excellent returns and with the support of its shareholders, AGNC
has emerged as one of the leading mortgage investment franchises.
Since its beginning in 2008, with an equity base of
$300 million, AGNC has grown to over
$6 billion in equity and has paid out
$1.3 billion in dividends to its
shareholders, producing approximately a 35% annualized rate of
return. AGNC is a great example of how private capital can
support the U.S. housing market."
INVESTMENT PORTFOLIO
As of December 31, 2011, the
Company's investment portfolio totaled $54.7
billion of agency securities, at fair value, comprised of
$51.5 billion of fixed-rate
securities, $2.8 billion of
adjustable-rate securities and $0.4
billion of collateralized mortgage obligations ("CMOs")
backed by fixed and adjustable-rate securities, including principal
and interest-only strips. As of December 31, 2011, the Company's fixed-rate
investment portfolio was comprised of $20.2
billion