Anworth Mortgage Asset Corporation (NYSE:ANH) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 01:00 pm ET


Anworth Mortgage Asset Corporation (NYSE:ANH) Q2 2020 Earnings Conference Call - Final Transcript


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Before we begin today's conference, I'd like to introduce Mr. John Hillman, Anworth's Director of Investor Relations, who will make a brief introductory statement.

John Hillman

Thank you, Jamie. 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 U.S. 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 the 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 a change in events, conditions, circumstances, or otherwise. Thank you.

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

Joseph E. McAdams

Thank you, John, and thank you for joining us on Anworth's Second Quarter 2020 Earnings Call. With me today on the call are Bistra Pashamova, Senior Vice President and Portfolio Manager; Brett Roth, Senior Vice President and Portfolio Manager; and Chuck Siegel, Anworth's CFO.

Yeah, in response to the significant market volatility and decline in valuations of our mortgage credit investments due to the effect of COVID-19 on the economy, we significantly reduced the size of our investment portfolio subsequent to the March 31st quarter-end. These sales took place during the month of April and as discussed on our last quarterly earnings call, allowed us to reduce repo borrowings and build back up both the over-collateralization levels on remaining borrowings and our excess liquidity and cash to levels, which we believe appropriate given the market uncertainties and volatility.

Since April, we've seen increases in the market value of our investment portfolio, particularly in mortgage credit investments, resulting