Exhibit 99.1
[LOGO OF ANWORTH]
NEWS RELEASE
For release February 4, 2003
Contact: John T. Hillman @ 310/255-4438 or 310/255-4493
ANWORTH MORTGAGE ASSET CORPORATION
REPORTS EARNINGS OF $0.48 PER SHARE
FOR FOURTH QUARTER OF 2002
SANTA MONICA, California – February 4, 2003—For the fourth quarter ended December 31, 2002 and based on a weighted average of 24,560,743 fully diluted shares outstanding, Anworth Mortgage Asset Corporation (AMEX: ANH) today reported unaudited net income of $11,807,236, or $0.48 per share. For the year ended December 31, 2002, Anworth’s earnings were $31,669,740, or $1.80 per share, based on a weighted average of 17,590,888 fully diluted shares outstanding for 2002, after taking into account a non-cash expense of $3,475,000, or $0.20 per share, related to the June 13, 2002 merger with the Company’s former adviser.
Mortgage assets held at December 31, 2002 were approximately $2.4 billion and were allocated as follows: 36% Agency ARMS, 46% Agency hybrid ARMS, 14% Agency fixed-rate MBS, and 4% Agency floating-rate CMO. Approximately 70% of the assets were invested in FNMA securities with the balance invested in FHLMC and GNMA securities.
At December 31, 2002, the weighted average coupon of the mortgage assets was 5.2% and the unamortized premium was $61 million, or 2.6% of the par value of the mortgage assets. During the quarter ended December 31, 2002, the CPR of the mortgage assets was 33% and the CPR of the adjustable rate MBS was 36%. For the ARM and hybrid assets, the weighted average term to the next interest rate reset date was 16 months.
At December 31, 2002, the outstanding repurchase agreement balance was $2.15 billion, with a weighted average interest rate of 1.92% and a weighted average maturity of 166 days.
For the fourth quarter, the yield on average earning assets after amortization of premium was 4.08% while the cost of funds on average borrowings was 2.04% resulting in interest rate spread of 2.04%.
The book value on December 31, 2002 was $266 million, or $10.48 per share, based on 25,346,025 shares outstanding on that date.
Average shareholder equity for the fourth quarter was $262 million. The return on average equity for the fourth quarter was 4.51%, and 17.51% for 2002.
Commenting on the Company’s operations, Lloyd McAdams, Chairman and CEO, stated, “We are pleased that the Company’s agency assets continue to produce income and earned dividends which we believe compares favorably with most traditional income investments such as corporate bonds and preferred stocks. We also believe that the current yield curve and interest rate spread environment remains favorable.”
About Anworth Mortgage Asset Corporation
Anworth is a mortgage real estate investment trust (REIT) which invests in mortgage assets, including mortgage pass-through certificates, collateralized mortgage obligations, mortgage loans and other real estate securities. Anworth generates income for distribution to shareholders based on the difference between the yield on its mortgage assets and the cost of its borrowings.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including increases in the prepayment rates on the mortgage loans securing our mortgage-backed securities, our ability to use borrowings to finance our assets, risks associated with investing in mortgage-related assets, including changes in business conditions and the general economy, our ability to maintain our qualification as a real estate investment trust for federal income tax purposes, and management’s ability to manage our growth. Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Forms 8-K, and other SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
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ANWORTH MORTGAGE ASSET CORPORATION
BALANCE SHEETS
(in thousands)
(unaudited)
December 31, 2002 | December 31, 2001 | |||||||
ASSETS | ||||||||
Mortgage backed securities |
| 2,430,103 |
|
| 420,214 |
| ||
Other marketable securities |
| 0 |
|
| 1,803 |
| ||
Cash and cash equivalents |
| 906 |
|
| 290 |
| ||
Accrued interest and dividend receivable |
| 12,673 |
|
| 2,293 |
| ||
Prepaid expenses and other |
| 202 |
|
| 10 |
| ||
$ | 2,443,884 |
| $ | 424,610 |
| |||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Liabilities | ||||||||
Reverse repurchase agreements | $ | 2,153,870 |
| $ | 325,307 |
| ||
Payable for purchase of mortgage-backed securities |
| — |
|
| 40,819 |
| ||
Accrued interest payable |
| 9,944 |
|
| 1,293 |
| ||
Dividends payable |
| 12,673 |
|
| 1,329 |
| ||
Accrued expenses and other |
| 1,875 |
|
| 865 |
| ||
| 2,178,362 |
|
| 369,613 |
| |||
STOCKHOLDERS’ EQUITY | ||||||||
Unearned Restricted Stock |
| (754 | ) |
| — |
| ||
Preferred stock, par value $.01 per share; authorized 20,000 shares; no shares issued and outstanding |
| — |
|
| — |
| ||
Common stock; par value $.01 per share; authorized 100,000 shares; 25,396 and 7,001 issued and 25,346 and 6,951 outstanding respectively |
| 253 |
|
| 70 |
| ||
Additional paid in capital |
| 256,610 |
|
| 54,324 |
| ||
Accumulated other comprehensive income, unrealized gain (loss) on available for sale securities |
| 14,860 |
|
| 705 |
| ||
Retained earnings |
| (5,218 | ) |
| 127 |
| ||
Treasury stock at cost (50 shares) |
| (229 | ) |
| (229 | ) | ||
| 265,522 |
|
| 54,997 |
| |||
$ | 2,443,884 |
| $ | 424,610 |
| |||
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ANWORTH MORTGAGE ASSET CORPORATION
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
For the Quarter Ended December 31, 2002 | For the Quarter Ended December 31, 2001 | For the Year Ended December 31, 2002 | For the Year Ended December 31, 2001 | |||||||||||||
Interest and dividend income net of amortization of premium and discount | $ | 23,659 |
| $ | 3,130 |
| $ | 66,855 |
| $ | 10,768 |
| ||||
Interest expense |
| (10,978 | ) |
| (1,389 | ) |
| (29,576 | ) |
| (6,363 | ) | ||||
Net interest income |
| 12,681 |
|
| 1,741 |
|
| 37,279 |
|
| 4,405 |
| ||||
Gain on sale of securities |
| 1,215 |
|
| 113 |
|
| 4,709 |
|
| 430 |
| ||||
Expenses: | ||||||||||||||||
External management fee |
| — |
|
| (60 | ) |
| (400 | ) |
| (208 | ) | ||||
External Incentive fee |
| — |
|
| (280 | ) |
| (1,741 | ) |
| (598 | ) | ||||
Compensation and benefits |
| (333 | ) |
| — |
|
| (551 | ) |
| — |
| ||||
Incentive Compensation |
| (1,303 | ) |
| — |
|
| (3,055 | ) |
| — |
| ||||
Cost to acquire external manager |
| — |
|
| — |
|
| (3,475 | ) |
| — |
| ||||
Other expense |
| (453 | ) |
| (70 | ) |
| (1,096 | ) |
| (323 | ) | ||||
Net Income | $ | 11,807 |
| $ | 1,444 |
| $ | 31,670 |
| $ | 3,706 |
| ||||
Basic earnings per share | $ | 0.48 |
| $ | 0.54 |
| $ | 1.81 |
| $ | 1.52 |
| ||||
Average number of shares outstanding |
| 24,431 |
|
| 2,674 |
|
| 17,461 |
|
| 2,442 |
| ||||
Diluted earnings per share | $ | 0.48 |
| $ | 0.53 |
| $ | 1.80 |
| $ | 1.50 |
| ||||
Average number of diluted shares outstanding |
| 24,561 |
|
| 2,725 |
|
| 17,591 |
|
| 2,467 |
| ||||
Dividends declared per share | $ | 0.50 |
| $ | 0.55 |
| $ | 2.00 |
| $ | 1.64 |
| ||||
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