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Document Preview Anthracite Capital, Inc. Operating Earnings Increase 39% to $0.43 from $0.31 In the Prior Year Period |
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Title: |
Anthracite Capital, Inc. Operating Earnings Increase 39% to $0.43 from $0.31 In the Prior Year Period |
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2002 |
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$41 |
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#333320 |
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FOR IMMEDIATE RELEASE
Contact: Richard Shea or Robert Friedberg
COO and CFO Vice-President & Controller
Anthracite Capital, Inc. Anthracite Capital, Inc.
Tel: (212) 754-5579 Tel: (212) 409-3333
ANTHRACITE CAPITAL, INC. Operating Earnings
Increase 39% to $0.43 from $0.31
In The Prior Year Period
Earnings including realized gains and losses and before SFAS 142 Goodwill
adjustment increased 13% to a record $0.44 per quarter up from
$0.39 in the prior year period.
Total earnings including realized gains and losses and SFAS 142 Goodwill
adjustment were $0.58.
New York, NY -May 8, 2002, - Anthracite Capital, Inc. (the "Company")
(NYSE: AHR) today reported total income before adjustment for SFAS 142 for
the first quarter of $0.44 per share versus $0.39 for the year earlier
quarter. Income from the operating portfolio for the quarter was $0.43 per
share versus $0.31 for the year earlier quarter. Income from the operating
portfolio is net interest income after operating expenses and preferred
dividends but before realized gains and losses. Based on the $0.35 per
share dividend declared on March 14, 2002, and the May 7, 2002 closing
price of $11.71, Anthracite's annualized dividend yield is 12.0%.
In addition to operating earnings of $0.43, included in total earnings are
gains from active trading of $0.06, a loss attributable to net other gains
and losses of $0.05, and income of $0.14 due to implementation of SFAS 142.
The Company was required to implement SFAS 142 on January 1, 2002. The
cumulative effect of implementing this new accounting standard resulted in
the unamortized balance of negative goodwill of $6,327,000 being recognized
in income during the first quarter of 2002.
Hugh Frater, president and CEO of the Company, stated "We are very pleased
with the year-over-year increase in the Company's quarterly operating
earnings to levels over twenty percent in excess of our current quarterly
dividend. Our principal goal in 2002 continues to be enhancing the
stability of our operating earnings by issuing non-recourse, secured debt
to match fund our credit sensitive assets. The Company is actively engaged
in executing such a transaction which, if successful, would reduce the
Company's interest rate and financing risks and free up liquidity for
additional investments. We believe this meaningful reduction of risk can be
achieved with no impact on dividends and limited impact, if any, on
operating earnings."
The Company's first quarter operating results represent an annualized
return on the quarter's average common stock equity (Annualized ROE) of
21.9% and net interest margin of 5.01%. Annualized ROE for the year earlier
period was 16.7% and the net interest margin was 5.04%. The significant
year-over-year increase in ROE was due to the reinvestment of proceeds from
the three equity raises in 2001, declining borrowing costs and declining
expense ratios. The slight decrease in net interest margin over the year is
attributable to the greater allocation of equity to higher credit quality
assets versus the year earlier period. The components of other gains and
losses includes $1,175,000 of hedge ineffectiveness reclassified from
interest expense to other gain (losses); the hedge ineffectiveness resulted
in a decrease in first quarter total earnings per share of $0.02.
Over the quarter, the Company's weighted average credit rating of invested
equity remained unchanged from BB-. Aggregate leverage declined from 4.8:1
to 4.0:1 as the Company reduced its allocation to residential mortgage
backed securities (RMBS). Leverage on credit sensitive positions was
unchanged. The Company's exposure to changes in short-term interest rates
was reduced modestly over the quarter, resulting in somewhat higher hedging
expenses.
The Company reports GAAP earnings on its commercial mortgage backed
securities portfolio net of expected losses over the life of the portfolio.
Actual losses remained unchanged during the first quarter but delinquencies
on the collateral underlying the Company's CMBS portfolio increased to
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