Anworth Mortgage Asset Corporation (NYSE:ANH) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 01:00 pm ET


Anworth Mortgage Asset Corporation (NYSE:ANH) Q3 2019 Earnings Conference Call - Final Transcript


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Before we begin the call, I would like to introduce Mr. John Hillman, Anworth's Director of Investor Relations. He will make a brief introductory statement.

John Hillman

Thank you, Danielle. Statements made on this earnings call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended, and we hereby claim the protection of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to any such forward-looking statements.

Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You should not rely on our forward-looking statements because the matters they describe are subject to assumptions, known and unknown risks, uncertainties, and other unpredictable factors, many of which are beyond our control.

Statements regarding the following subjects are forward looking by their nature, our business and investment strategy, market trends and risks, assumptions regarding interest rates and assumptions regarding prepayment rates on the mortgage loans securing our mortgage-backed securities.

Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties. Certain risks, uncertainties and factors, including those discussed under the heading Risk Factors in our Annual Report on Form 10-K and other reports that we file from time to time with the Securities and Exchange Commission could cause our actual results to differ materially and adversely from those projected in any forward-looking statements that we make.

All forward-looking statements speak only as of date they are made. New risks and uncertainties arise over time and it is not possible to predict those events or how they may affect us. Except as required by law, we do not intend to publicly update or revise any forward-looking statements whether as a result of new information or expectations or change in events, conditions or circumstances, or otherwise. Thank you.

I would now like to introduce Joe McAdams, our Chief Executive Officer.

Joseph E. McAdams

Thank you, John. Also with me today are Bistra Pashamova, and Brett Roth, both Senior Vice Presidents and Portfolio Managers, as well as Chuck Siegel, Anworth's Chief Financial Officer. The third quarter saw a continuation of the economic uncertainty market volatility and falling long-term interest rates that have persisted for much of this year. This resulted in a continued price underperformance of our Agency MBS assets in particular, as well as heightened expectations for more rapid prepayments due to refinancing.

We had reduced our portfolio leverage during the second quarter. So although our overall balance sheet expanded somewhat during the third quarter, our earning assets were lower on average during the quarter relative to Q2. This smaller portfolio was the primary driver for core earnings declining $0.02 per share to $0.08, or $7.6 million on the quarter. GAAP income was a loss of $0.20 for the quarter, but only includes unrealized gains and losses on our swap hedges