Arlington Asset Investment (AI) Misses Q3 EPS by 2c

Arlington Asset Investment (NYSE: AI) reported Q3 EPS of $0.64, $0.02 worse than the analyst estimate of $0.66.

"During the third quarter, the Company's tangible book value experienced a recovery of capital through the outperformance of its interest rate hedges relative to its agency MBS portfolio, benefiting from rising interest rates, lower volatility and a narrowing of investment spreads," said J. Rock Tonkel, Jr., the Company's President and Chief Executive Officer. "Ongoing low rates and steady home price appreciation continued to drive high mortgage refinancing volumes, resulting in elevated prepayment speeds and lower asset yields during the third quarter on the Company's agency MBS portfolio. Despite the impact of elevated prepayment speeds, the Company generated non-GAAP core operating income of $0.64 per diluted share and delivered a $0.625 per share dividend to shareholders. During the third quarter, the Company increased its agency investment allocation of TBA securities to take advantage of higher risk adjusted returns in the TBA dollar roll income market compared to specified agency MBS funded with repurchase agreement financing. In addition, as the Company's private-label MBS investments have generally reached their expected investment returns and performance has plateaued, the Company has continued to redeploy its appreciated private-label MBS into agency MBS at expected higher relative returns."

For earnings history and earnings-related data on Arlington Asset Investment (AI) click here.

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