Arlington Asset Investment (AI) Tops Q1 EPS by 2c

Arlington Asset Investment (NYSE: AI) reported Q1 EPS of $0.17, $0.02 better than the analyst estimate of $0.15.

First Quarter 2020 Financial Highlights

• $2.59 per diluted common share of GAAP net loss
• $0.17 per diluted common share of non-GAAP core operating income
• $5.28 per common share of book value
• 1.5 to 1 "at risk" short term secured financing to investable capital ratio

"During the first quarter, the global health crisis caused by the COVID-19 pandemic rapidly led to an unprecedented forced shutdown of large portions of the global economy. Given the health concerns, the Company continues to focus on the safety and well-being of our staff and stakeholders. The uncertainty surrounding the magnitude and length of the economic impact associated with the pandemic quickly led to a significant risk-off move as liquidity and cash positions were prioritized leading to substantial liquidity strains in the financial markets. The resulting extreme market volatility and dislocations led to agency mortgage spreads widening significantly until actions by the Federal Reserve to aggressively resume purchases of Treasury securities and agency mortgage-backed securities ("MBS") improved liquidity and functioning of the financial markets. Severe dislocations in the market for non-agency MBS along with uncertainty surrounding the size of potential credit losses led to substantial declines in the market prices of non-agency MBS during the quarter," said J. Rock Tonkel, Jr., the Company's President and Chief Executive Officer. "Having elected to substantially reduce risk throughout the first quarter by materially lowering leverage and significantly increasing liquidity, we see a spectrum of appealing investment opportunities now and arising over time as the full ramifications of the current economic shock likely follow an uncertain and inconsistent path forward. With its current financial flexibility and liquidity position, the Company is positioned to capture the benefit of current and developing dislocations across sectors. We are actively investing in and pursing attractive return opportunities to deploy capital through both non-proprietary and proprietary investments with existing and new partners."

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

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