Annaly Mortgage Management, Inc. Reports 1st Quarter 2006 Core EPS of $0.16; Portfolio Repositioning Strengthens Performance Through Challenging Market.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Annaly Annaly (Irish Angaile) was a medieval lordship in central Ireland. Its territory roughly coincided with modern County Longford. It was associated with the O'Farrell family[1]. Mortgage Management, Inc. (NYSE NYSE See: New York Stock Exchange : NLY) today reported Core Earnings for the quarter ended March 31, 2006 of $23.9 million or $0.16 per average share available to common shareholders, as compared to Core Earnings of $58.8 million or $0.45 per average share available to common shareholders for the quarter ended March 31, 2005 and Core Earnings of $11.6 million or $0.06 per average share available to common shareholders for the quarter ended December December: see month. 31, 2005. "Core Earnings" is defined as net (loss) income excluding impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. losses and gains or losses on sales of securities. On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, the net loss for the quarter ended March 31, 2006 was $10.9 million or $0.12 basic net loss per average share related to common shareholders, as compared to net income of $59.3 million or $0.46 basic net income per average share available to common shareholders for the quarter ended March 31, 2005 and a net loss of $136.8 million or $1.14 basic net loss per average share related to common shareholders for the quarter ended December 31, 2005. The Company continued the portfolio rebalancing Rebalancing The process of realigning the weightings of one's portfolio of assets. Notes: For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting it began in the fourth quarter of 2005 and recognized non-cash impairment charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc certain securities in its portfolio which had been held in an unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. position. The rebalancing is being accomplished through asset sales and reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. into the market. During the first quarter $1.2 billion face amount of securities were sold, which were previously classified as other-than-temporarily impaired See assistive technology. , resulting in a realized loss Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. of $7.0 million, or $0.06 per share. In addition, the Company had a loss on other-than-temporarily impaired securities as of March 31, 2006 of $26.7 million, or $0.22 per share. Of the $26.7 million, $17.8 million resulted from further declines in value of securities classified as other-than-temporarily impaired at December 31, 2005 and $8.9 million from losses on additional securities that the Company determined to be other-than-temporarily impaired at March 31, 2006. The non-cash loss on the securities deemed other-than-temporarily impaired that remain in the Company's portfolio was reflected in the income statement based on the fair value of the securities on March 31, 2006, and recognition of such impairment charges will not reduce the taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. of the Company. Common dividends declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. for the quarter ended March 31, 2006 were $0.11 per share, as compared to $0.46 per share for the quarter ended March 31, 2005 and $0.10 per share for the quarter ended December 31, 2005. The annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. dividend yield on common stock for the quarter ended March 31, 2006, based on the March 31, 2006 closing price of $12.14, was 3.62%. On a Core Earnings basis, the Company provided an annualized return on average equity of 6.52% for the quarter ended March 31, 2006, as compared to 14.20% for the quarter ended March 31, 2005 and 3.04% for the quarter ended December 31, 2005. On a GAAP basis, the Company provided an annualized return on average equity of (2.98%) for the quarter ended March 31, 2006, as compared to 14.34% for the quarter ended March 31, 2005, and (35.71%) for the quarter ended December 31, 2005. As previously announced, subsequent to quarter-end the Company completed a public offering of common stock and Series B cumulative convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". . The estimated net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of the offering, including the exercise of the underwriters' over-allotment option, were approximately $549 million, before offering expenses. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. A.J. Farrell Farrell, city (1990 pop. 6,841), Mercer co., W central Pa., on the Shenango River at the Ohio line and adjoining Sharon, Pa.; inc. 1901. It is a railroad center, and its steel- and ironworks industries have declined. , Chairman, Chief Executive Officer and President of Annaly, commented on the quarter's results. "Our results in the first quarter represent an improvement over what they would have been had we not initiated our portfolio repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. . By selling lower-yielding assets largely acquired in the much lower yield environment of 2003 and 2004 and replacing them with assets reflecting today's yields, we have accelerated the natural process by which our portfolio of short duration mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. adjusts to changing interest rates. With the capital raised in the first week of the second quarter, we will be able to take further advantage of the investment opportunities that have been created at the front end of the yield curve. As a result, our company is better-positioned to perform should the Federal Reserve continue its current course of tightening monetary policy or should it stop. "In addition, we are gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. by the response to our just-concluded capital-raising," Mr. Farrell continued. "The market voiced its support for our efforts at Annaly and at FIDAC FIDAC Fixed Income Discount Advisory Company FIDAC Fireball Data Center FIDAC Federazione Italiana Dipendenti Aziende di Credito (Italian labor union) , and our team is committed to justifying that confidence. By continuing to stay focused on our strategy of investing in high-quality, short-duration assets in Annaly and growing the asset management business at FIDAC, we believe we can deliver the returns to which long-term investors Long-term investor A person who makes investments for a period of at least five years in order to finance his or her long-term goals. in Annaly have become accustomed." For the quarter ended March 31, 2006, the annualized yield on average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin was 4.70% and the annualized cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. on the average repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. balance was 4.38%, which equates to an interest rate spread of 0.32%. This is an 86 basis point decrease over the 1.18% annualized interest rate spread for the quarter ended March 31, 2005 and a 23 basis point increase over the 0.09% annualized interest rate spread for the quarter ended December 31, 2005. For the quarter ended March 31, 2005, the annualized yield on average earning assets was 3.75% and the annualized cost of funds on the average repurchase balance was 2.57%. For the quarter ended December 31, 2005, the annualized yield on average earning assets was 4.10% and the annualized cost of funds on the average repurchase balance was 4.01%. At March 31, 2006, the weighted average yield on assets was 5.03% and the cost of funds was 4.51%, which equates to an interest rate spread of 52 basis points. Leverage at March 31, 2006 was 10.2:1, in comparison to 10.8:1 at March 31, 2005 and 9.0:1 at December 31, 2005. Fixed rate securities comprised 52% of the Company's portfolio at March 31, 2006. The balance of the portfolio was comprised of 42% adjustable rate mortgages This article is about the US mortgage type. For an international perspective, see Variable rate mortgage. An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on an index. and 6% LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). floating rate collateralized mortgage obligations Collateralized mortgage obligation (CMO) A security backed by a pool of pass-through rates , structured so that there are several classes of bondholders with varying maturities, called tranches. . The Company has continued to avoid the introduction of credit risk into its portfolio. As of March 31, 2006, all of the assets in the Company's portfolio were FNMA FNMA abbr. Federal National Mortgage Association Noun 1. FNMA - a federally chartered corporation that purchases mortgages Fannie Mae, Federal National Mortgage Association , GNMA GNMA abbr. Government National Mortgage Association , FHLMC See Federal Home Loan Mortgage Corporation. mortgage-backed securities, which carry an actual or implied "AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. " rating. During the first quarter of 2006, the Company entered into additional swap transactions, pursuant to which the Company agrees to pay a fixed rate of interest and to receive a variable interest rate. The Company's swaps are designated as cash flow hedges A cash flow hedge is a hedge of the exposure to the variability of cash flow that
Also called base interest rate, it is the minimum interest rate investors will demand for investing in a non-Treasury security. It is also tied to the yield to maturity offered on the comparable-maturity treasury security that was most recently issued (on-the-run). risk associated with the Company's borrowings. The purpose of the swaps are to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the
risk of rising interest rates that affect our cost of funds. Since the
Company will be receiving a floating rate on the notional amount The notional amount (or notional principal amount or notional value) on a financial instrument is the nominal or face amount that is used to calculate payments made on that instrument. This amount generally does not change hands and is thus referred to as notional. of the
swaps, the effect of the swaps will be to enhance the earnings potential
of a portion of the fixed rate assets in the portfolio in a rising rate
environment."We continue to add higher yielding assets and floating rate exposure to the portfolio," said Wellington Wellington, city (1996 pop. 157,647; urban agglomeration 334,051), capital of New Zealand, extreme S North Island, on Port Nicholson, an inlet of Cook Strait. Denahan-Norris, Annaly's Vice Chairman, Chief Investment Officer and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "Giving effect to the swaps, our portfolio at March 31, 2006 was effectively comprised of 35% fixed-rate, 42% adjustable-rate and 23% floating-rate exposure. While we have made significant progress in managing through this challenging period, we will continue to use all of the tools at our disposal to position the portfolio to perform through a wide range of potential interest rate environments." The following table summarizes portfolio information for Annaly:
March 31, March 31, Dec. 31,
2006 2005 2005
Leverage at period-end 10.2:1 10.8:1 9.0:1
Fixed-rate mortgage-backed securities
as % of portfolio 52% 29% 39%
Adjustable-rate mortgage-backed securities
as % of portfolio 42% 63% 55%
Floating-rate mortgage-backed securities
as % of portfolio 6% 8% 6%
Notional amount of interest rate swaps
as % of portfolio 17% NA 3%
Annualized yield on average earning
assets during the quarter 4.70% 3.75% 4.10%
Annualized cost of funds on avg.
repurchase balance during the quarter 4.38% 2.57% 4.01%
Weighted average yield on assets at
period-end 5.03% 3.96% 4.68%
Weighted average cost of funds at
period-end 4.51% 3.69% 4.16%
The Constant Prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. Rate was 18% during the first quarter of 2006, as compared to 25% during the first quarter of 2005, and 28% during the fourth quarter of 2005. The weighted average purchase price of the portfolio was 101.6 at March 31, 2006, 102.3 at March 31, 2005 and 102.0 at December 31, 2005. The weighted average cost basis, after the Other-Than-Temporary Impairment Charge, was 101.1 at March 31, 2006. The net amortization of premiums and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of discounts on investment securities for the quarters ended March 31, 2006, March 31, 2005, and December 31, 2005 was $15.8 million, $36.1 million, and $31.9 million, respectively. The total net premium remaining unamortized at March 31, 2006, March 31, 2005, and December 31, 2005 was $173.7 million, $416.5 million, and $220.6 million, respectively. General and administrative expenses as a percentage of average assets were 0.18%, 0.14%, and 0.14% for the quarters ended March 31, 2006, March 31, 2005, and December 31, 2005, respectively. At March 31, 2006, March 31, 2005, and December 31, 2005, the Company had a common stock book value per share of $10.16, $11.81 and $10.73 respectively. At March 31, 2006, FIDAC, Annaly's wholly-owned registered investment advisor Registered Investment Advisor (RIA) is a designation obtainable in the United States by an individual who has registered with the U.S. Securities and Exchange Commission or state regulatory agency (where the primary business is situated or multiple States in some cases) in , had under management approximately $2.0 billion in net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. and $16.9 billion in gross assets, as compared to $2.3 billion in net assets and $18.6 billion in gross assets at March 31, 2005 and $2.3 billion in net assets and $18.7 billion in gross assets at December 31, 2005. For the quarter ended March 31, 2006, FIDAC earned investment advisory and service fees, net of fees paid to distributors, of $5.8 million, as compared to $4.7 million for the quarter ended March 31, 2005 and $6.9 million for the quarter ended December 31, 2005. FIDAC, organized as a taxable REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). subsidiary of Annaly, generally receives net investment advisory fees of approximately 10 to 20 basis points of the gross assets it manages, assists in managing or supervises. "FIDAC continues to demonstrate that it was a beneficial acquisition for Annaly shareholders," said Mr. Farrell. "Since its acquisition in June June: see month. 2004, FIDAC has virtually paid for itself out of cumulative net advisory and service fees. Assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. at FIDAC have trended down due to late-cycle mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. changes and redemptions in open-end o·pen-end adj. 1. Having no definite limit of duration or amount: an open-end contract. 2. structures, but we remain focused on our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. goal of growing the fee income stream from FIDAC through our core offerings and through diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. into new products and strategies." Annaly manages assets on behalf of institutional and individual investors worldwide through Annaly and through the funds managed by its wholly-owned registered investment advisor, FIDAC. The Company's principal business objective is to generate net income for distribution to investors from the spread between the interest income on its mortgage-backed securities and the cost of borrowing to finance their acquisition and from dividends Annaly receives from FIDAC, which earns investment advisory fee income. The Company, a Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). corporation that has elected to be taxed as a real estate investment trust ("REIT"), currently has 162,916,656 shares of common stock outstanding. The Company will hold the first quarter 2006 earnings conference call on May 2, 2006 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The number to call is 1-866-713-8563 for domestic calls and 617-597-5311 for international calls and the pass code is 85770262. The re-play number is 1-888-286-8010 for domestic calls and 617-801-6888 for international calls and the pass code is 49812631. The repay is available for 48 hours after the earnings call. There will be a web cast of the call on www.annaly.com. If you would like to be added to the e-mail distribution list, please visit www.annaly.com, click on E-Mail alerts, enter your e-mail address See Internet address. e-mail address - electronic mail address where indicated and click the Subscribe To sign up for a service. Contrast with unsubscribe. See opt-in and syndication format. (messaging) subscribe - To request to receive messages posted to a mailing list or newsgroup. In contrast to the mundane use of the word this is often free of charge. button. This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. terminology, such as "may," "will," "believe," "expect," "anticipate," "continue," or similar terms or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, changes in interest rates, changes in yield curve, changes in prepayment rates, the availability of mortgage-backed securities for purchase, the availability of financing and, if available, the terms of any financing, FIDAC's clients' removal of assets FIDAC manages, FIDAC's regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , and competition in the investment management business. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2005. We do not undertake, and specifically disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of such statements.
ANNALY MORTGAGE MANAGEMENT, INC. AND SUBSIDIARY
STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
March 31, December 31, September 31,
2006 2005 2005
(Unaudited) (Unaudited)
-----------------------------------------
ASSETS
Cash and cash equivalents $ 2,403 $ 4,808 $ 1,684
Mortgage-Backed Securities,
at fair value 16,176,348 15,929,864 18,697,385
Agency Debentures, at fair
value - - 258,616
Receivable for Mortgage-
Backed Securities sold 139,491 13,449 788
Accrued interest receivable 75,092 71,340 83,806
Receivable for advisory and
service fees 3,805 3,497 4,579
Intangible for customer
relationships 13,851 15,183 15,367
Goodwill 22,966 23,122 23,122
Interest rate swaps, at fair
value 36,470 - -
Other assets 2,281 2,159 1,218
-------------------------------------
Total assets $16,472,707 $16,063,422 $19,086,565
=====================================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Repurchase agreements $14,629,883 $13,576,301 $17,038,226
Payable for Mortgage-Backed
Securities purchased 354,312 933,051 429,502
Accrued interest payable 37,738 27,994 34,171
Dividends payable 13,607 12,368 16,079
Other liabilities - 305 625
Accounts payable and other
liabilities 3,238 8,837 8,602
Interest rate swaps, at fair
value - 543 -
-------------------------------------
Total liabilities 15,038,778 14,559,399 17,527,205
-------------------------------------
Stockholders' Equity:
7.875% Series A Cumulative
Redeemable Preferred
Stock: 7,637,500
authorized, 7,412,500
shares issued and
outstanding respectively 177,088 177,088 177,088
Common stock: par value $.01
per share; 500,000,000
authorized, 123,701,656,
123,684,931, 123,684,931,
122,554,831 and 121,277,698
shares issued and
outstanding, respectively 1,237 1,237 1,237
Additional paid-in capital 1,679,904 1,679,452 1,679,452
Accumulated other
comprehensive loss (249,459) (207,117) (304,555)
Retained (deficit) earnings (174,841) (146,637) 6,138
-------------------------------------
Total stockholders' equity 1,433,929 1,504,023 1,559,360
-------------------------------------
Total liabilities and
stockholders' equity $16,472,707 $16,063,422 $19,086,565
=====================================
June 30, March 31,
2005 2005
(Unaudited) (Unaudited)
------------------------
ASSETS
Cash and cash equivalents $ 3,669 $ 2,417
Mortgage-Backed Securities, at fair value 19,165,744 18,702,470
Agency Debentures, at fair value 391,092 388,593
Receivable for Mortgage-Backed Securities
sold - -
Accrued interest receivable 87,960 80,172
Receivable for advisory and service fees 4,334 2,883
Intangible for customer relationships 15,552 15,613
Goodwill 23,122 23,122
Interest rate swaps, at fair value - -
Other assets 1,472 1,873
------------------------
Total assets $19,692,945 $19,217,143
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements $17,251,594 $17,438,609
Payable for Mortgage-Backed Securities
purchased 659,325 75,165
Accrued interest payable 29,654 33,770
Dividends payable 44,120 54,575
Other liabilities 1,241 1,569
Accounts payable and other liabilities 6,523 4,079
Interest rate swaps, at fair value - -
------------------------
Total liabilities 17,992,457 17,607,767
------------------------
Stockholders' Equity:
7.875% Series A Cumulative Redeemable
Preferred Stock: 7,637,500 authorized,
7,412,500 shares issued and outstanding
respectively 177,088 177,077
Common stock: par value $.01 per share;
500,000,000 authorized, 123,701,656,
123,684,931, 123,684,931, 122,554,831 and
121,277,698 shares issued and outstanding,
respectively 1,226 1,213
Additional paid-in capital 1,662,347 1,638,911
Accumulated other comprehensive loss (144,853) (213,280)
Retained (deficit) earnings 4,680 5,455
------------------------
Total stockholders' equity 1,700,488 1,609,376
------------------------
Total liabilities and stockholders'
equity $19,692,945 $19,217,143
========================
ANNALY MORTGAGE MANAGEMENT, INC. AND SUBSIDARY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(dollars in thousands)
For the Quarters Ending
March 31, December 31, September 30,
2006 2005 2005
-------------------------------------
Interest income $ 194,882 $ 179,688 $ 177,474
Interest expense 167,512 165,766 155,043
-------------------------------------
Net interest income 27,370 13,922 22,431
-------------------------------------
Other income
Investment advisory and
service fees 6,997 8,702 10,945
(Loss) gain on sale of
Mortgage-Backed Securities (7,006) (65,285) 32
-------------------------------------
Total other (loss) income (9) (56,583) 10,977
-------------------------------------
Expenses
Distribution fees 1,170 1,850 2,414
General and administrative
expenses 7,177 6,359 6,455
-------------------------------------
Total expenses 8,347 8,209 8,869
-------------------------------------
Impairment of intangible for
customer relationships 1,148 - -
-------------------------------------
Loss on other-than-temporarily
impaired securities 26,730 83,098 -
-------------------------------------
(Loss) income before income
taxes (8,864) (133,968) 24,539
Income taxes 2,085 2,791 3,353
-------------------------------------
Net (loss) income (10,949) (136,759) 21,186
Dividend on preferred stock 3,648 3,649 3,648
-------------------------------------
Net (loss) income (related)
available to common
shareholders ($14,597) ($140,408) $ 17,538
=====================================
Net (loss) income per share
(related) available to common
shareholders:
Basic ($0.12) ($1.14) $ 0.14
=====================================
Diluted ($0.12) ($1.14) $ 0.14
=====================================
Weighted average number of
shares outstanding:
Basic 123,693,851 123,684,931 123,169,910
=====================================
Diluted 123,693,851 123,684,931 123,330,645
=====================================
Net (loss) income ($10,949) ($136,759) $ 21,186
-------------------------------------
Comprehensive (loss) income
Unrealized (loss) gain on
available-for-sale securities (113,091) (50,402) (159,670)
Unrealized gain (loss) on
interest rate swaps 37,013 (543) -
Reclassification adjustment
for net losses (gains)
included in net loss or
income 33,736 148,383 (32)
-------------------------------------
Other comprehensive (loss)
income (42,342) 97,438 (159,702)
-------------------------------------
Comprehensive (loss) income ($53,291) ($39,321) ($138,516)
=====================================
For the Quarters Ending
June 30, March 31,
2005 2005
------------------------
Interest income $ 171,595 $ 176,289
Interest expense 133,758 113,993
------------------------
Net interest income 37,837 62,296
------------------------
Other income
Investment advisory and service fees 9,669 6,309
(Loss) gain on sale of Mortgage-Backed
Securities 11,435 580
------------------------
Total other (loss) income 21,104 6,889
------------------------
Expenses
Distribution fees 2,126 1,610
General and administrative expenses 6,800 6,664
------------------------
Total expenses 8,926 8,274
------------------------
Impairment of intangible for customer
relationships - -
------------------------
Loss on other-than-temporarily impaired
securities - -
------------------------
(Loss) income before income taxes 50,015 60,911
Income taxes 3,022 1,578
------------------------
Net (loss) income 46,993 59,333
Dividend on preferred stock 3,648 3,648
------------------------
Net (loss) income (related) available to
common shareholders $ 43,345 $ 55,685
========================
Net (loss) income per share (related)
available to common shareholders:
Basic $ 0.36 $ 0.46
========================
Diluted $ 0.36 $ 0.46
========================
Weighted average number of shares
outstanding:
Basic 121,740,256 121,270,867
========================
Diluted 122,013,050 121,564,320
========================
Net (loss) income $ 46,993 $ 59,333
------------------------
Comprehensive (loss) income
Unrealized (loss) gain on available-for-
sale securities 79,862 (91,900)
Unrealized gain (loss) on interest rate
swaps - -
Reclassification adjustment for net losses
(gains) included in net loss or income (11,435) (580)
------------------------
Other comprehensive (loss) income 68,427 (92,480)
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Comprehensive (loss) income $ 115,420 ($33,147)
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