Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 06, 2013 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Five Oaks Investment Corp. | ' |
Entity Central Index Key | '0001547546 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Trading Symbol | 'OAKS | ' |
Entity Common Stock, Shares Outstanding | ' | 7,389,250 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
ASSETS | ' | ' | ||
Available-for-sale securities, at fair value (includes pledged securities of $417,552,903 and $66,337,080 for September 30, 2013 and December 31, 2012, respectively) | $417,552,903 | $81,027,998 | ||
Linked transactions, net, at fair value | 23,205,354 | 8,612,753 | ||
Cash and cash equivalents | 16,344,488 | 3,608,759 | ||
Restricted cash | 13,691,658 | 1,933,390 | ||
Deferred offering costs | 0 | 1,664,796 | ||
Accrued interest receivable | 1,009,688 | 189,364 | ||
Paydown receivable | 238,679 | 0 | ||
Derivative assets, at fair value | 1,541,494 | 12,062 | ||
Other assets | 143,978 | 0 | ||
Total assets | 473,728,242 | 97,049,122 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' | ||
Repurchase agreements | 377,044,000 | [1] | 63,423,000 | [2] |
Derivative liabilities, at fair value | 4,509,929 | 283,754 | ||
Accrued interest payable | 108,167 | 65,820 | ||
Dividends payable | 0 | 220,833 | ||
Fees and expenses payable to Manager | 337,721 | 32,721 | ||
Other accounts payable and accrued expenses | 240,306 | 754,274 | ||
Total liabilities | 382,240,123 | 64,780,402 | ||
STOCKHOLDERS' EQUITY: | ' | ' | ||
Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 7,389,250 and 1,656,250 shares issued and outstanding, at September 30, 2013 and December 31, 2012, respectively | 73,563 | 265,000 | ||
Additional paid-in capital | 110,092,760 | 25,912,089 | ||
Accumulated other comprehensive income (loss) | -7,505,535 | 2,433,997 | ||
Cumulative distributions to stockholders | -8,475,901 | -1,161,672 | ||
Accumulated earnings (deficit) | -2,696,768 | 4,819,306 | ||
Total stockholders' equity | 91,488,119 | 32,268,720 | ||
Total liabilities and stockholders' equity | $473,728,242 | $97,049,122 | ||
[1] | At September 31, 2013, the Company had repurchase agreements of $42,548,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) | |||
[2] | At December 31, 2012, the Company had repurchase agreements of $13,989,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets [Parenthetical] (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Available-for-sale Securities Pledged as Collateral (in dollars) | $417,552,903 | $66,337,080 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 7,389,250 | 1,656,250 |
Common stock, shares outstanding | 7,389,250 | 1,656,250 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Revenues: | ' | ' | ' | ' |
Interest income | $4,341,602 | $730,101 | $888,321 | $14,934,355 |
Interest expense | -793,142 | -126,051 | -217,307 | -4,121,579 |
Net interest income | 3,548,460 | 604,050 | 671,014 | 10,812,776 |
Other income: | ' | ' | ' | ' |
Realized loss on sale of investments, net | -17,080,871 | -20,935 | -21,362 | -31,358,766 |
Unrealized gain (loss) and net interest income from Linked Transactions | -154,913 | 3,553,147 | 3,730,610 | 111,905 |
Realized gain (loss) on derivative contracts, net | 8,401,396 | -16,000 | -21,333 | 19,466,902 |
Unrealized loss on derivative contracts, net | -10,274,003 | -64,849 | -298,959 | -3,174,076 |
Total other income (loss) | -19,108,391 | 3,451,363 | 3,388,956 | -14,954,035 |
Expenses: | ' | ' | ' | ' |
Management fee | 413,164 | 98,164 | 146,718 | 941,166 |
General and administrative expenses | 229,324 | 36,167 | 44,417 | 529,436 |
Operating expenses reimbursable to Manager | 634,001 | 258,350 | 407,998 | 1,542,099 |
Other operating expenses | 103,919 | 6,571 | 18,936 | 202,921 |
Compensation expense | 74,229 | 0 | 0 | 159,193 |
Total expenses | 1,454,637 | 399,252 | 618,069 | 3,374,815 |
Net income (loss) | -17,014,568 | 3,656,161 | 3,441,901 | -7,516,074 |
Dividends to preferred stockholders | 0 | 0 | 0 | -2,326 |
Net income (loss) attributable to common stockholders | -17,014,568 | 3,656,161 | 3,441,901 | -7,518,400 |
Earnings per share: | ' | ' | ' | ' |
Net income (loss) attributable to common stockholders (basic and diluted) (in shares) | ($17,014,568) | $3,656,161 | $3,441,901 | ($7,518,400) |
Weighted average number of shares of common stock outstanding (in shares) | 7,360,350 | 1,656,250 | 1,656,250 | 5,695,881 |
Basic and diluted income (loss) per share (in dollars per share) | ($2.31) | $2.21 | $2.08 | ($1.32) |
Dividends declared per share of common stock (in dollars per share) | $0.48 | $0 | $0 | $1.28 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Net income (loss) | ($17,014,568) | $3,656,161 | $3,441,901 | ($7,516,074) |
Other comprehensive income (loss): | ' | ' | ' | ' |
Unrealized gain (loss) on available-for-sale securities, net | 16,495,823 | 2,850,768 | 3,008,004 | -9,939,532 |
Total other comprehensive income (loss) | 16,495,823 | 2,850,768 | 3,008,004 | -9,939,532 |
Less: Dividends to preferred stockholders | 0 | 0 | 0 | -2,326 |
Comprehensive income (loss) attributable to common stockholders | ($518,745) | $6,506,929 | $6,449,905 | ($17,457,932) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Stockholders' Equity (USD $) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Distributions in Excess of Net Income [Member] | Retained Earnings [Member] |
Balance at May. 15, 2012 | ' | ' | ' | ' | ' | ' | ' |
Balance (in shares) at May. 15, 2012 | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock, net | 26,177,089 | 0 | 16,563 | 26,160,526 | 0 | 0 | 0 |
Issuance of common stock, net (in shares) | ' | 0 | 1,656,250 | ' | ' | ' | ' |
Net income (loss) | 4,819,306 | 0 | 0 | 0 | 0 | 0 | 4,819,306 |
Other comprehensive income (loss) | 2,433,997 | 0 | 0 | 0 | 2,433,997 | 0 | 0 |
Common dividends declared | -1,161,672 | 0 | 0 | 0 | 0 | -1,161,672 | 0 |
Balance at Dec. 31, 2012 | 32,268,720 | 0 | 16,563 | 26,160,526 | 2,433,997 | -1,161,672 | 4,819,306 |
Balance (in shares) at Dec. 31, 2012 | ' | 0 | 1,656,250 | ' | ' | ' | ' |
Issuance of common stock, net | 84,000,000 | 0 | 57,000 | 83,943,000 | 0 | 0 | 0 |
Issuance of common stock, net (in shares) | ' | 0 | 5,700,000 | ' | ' | ' | ' |
Issuance of preferred stock, net | 10,041 | 1 | 0 | 10,040 | 0 | 0 | 0 |
Issuance of preferred stock, net (in shares) | ' | 100 | 0 | ' | ' | ' | ' |
Redemption of preferred stock, net | -110,000 | -1 | 0 | -109,999 | 0 | 0 | 0 |
Redemption of preferred stock, net (in shares) | ' | -100 | 0 | ' | ' | ' | ' |
Restricted stock compensation expense | 89,193 | 0 | 0 | 89,193 | 0 | 0 | 0 |
Restricted stock compensation expense (in shares) | ' | 0 | 33,000 | ' | ' | ' | ' |
Net income (loss) | -7,516,074 | 0 | 0 | 0 | 0 | 0 | -7,516,074 |
Other comprehensive income (loss) | -9,939,532 | 0 | 0 | 0 | -9,939,532 | 0 | 0 |
Common dividends declared | -7,311,903 | 0 | 0 | 0 | 0 | -7,311,903 | 0 |
Preferred dividends declared | -2,326 | 0 | 0 | 0 | 0 | -2,326 | 0 |
Balance at Sep. 30, 2013 | $91,488,119 | $0 | $73,563 | $110,092,760 | ($7,505,535) | ($8,475,901) | ($2,696,768) |
Balance (in shares) at Sep. 30, 2013 | ' | 0 | 7,389,250 | ' | ' | ' | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (USD $) | 5 Months Ended | 9 Months Ended |
Sep. 30, 2012 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net income (loss) | $3,441,901 | ($7,516,074) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' |
Amortization/accretion of available-for-sale securities premiums and discounts, net | -135,362 | -907,795 |
Realized loss on sale of investments, net | 21,362 | 33,708,977 |
Unrealized (gain) loss on Linked Transactions, net | -3,247,461 | 1,940,336 |
Realized (gain) loss on derivative contracts | 21,333 | -19,466,902 |
Unrealized loss on derivative contracts | 298,959 | 3,174,076 |
Net change in: | ' | ' |
Deferred offering costs | -762,166 | 0 |
Accrued interest receivable | -185,747 | -820,324 |
Other assets | 0 | -143,978 |
Paydown receivable | 0 | -238,679 |
Accrued interest payable | 33,251 | 42,347 |
Paydown payable | 270,609 | 0 |
Fees and expenses payable to Manager | 132,721 | 305,000 |
Other accounts payable and accrued expenses | 789,325 | 235,316 |
Net cash provided by operating activities | 678,725 | 10,312,300 |
Cash flows from investing activities: | ' | ' |
Purchase of available-for-sale securities | -78,095,506 | -1,084,963,739 |
Proceeds from sales of available-for-sale securities | 0 | 678,644,658 |
Purchase of derivative contracts | -64,000 | -50,816,532 |
Proceeds from sales of derivative contracts | 0 | 69,806,101 |
Principal payments from available-for-sale securities | 823,106 | 27,053,462 |
Restricted cash | -496,439 | -11,758,268 |
Net cash used in investing activities | -77,832,839 | -372,034,318 |
Cash flows from financing activities: | ' | ' |
Net proceeds from issuance of common stock | 26,177,089 | 84,000,000 |
Net proceeds from issuance of preferred stock | 0 | 10,041 |
Redemption of preferred stock | 0 | -110,000 |
Restricted stock compensation expense | 0 | 89,193 |
Change in deferred offering costs | 0 | 915,512 |
Dividends paid on common stock | 0 | -7,532,736 |
Dividends paid on preferred stock | 0 | -2,326 |
Proceeds from repurchase agreements | 262,703,000 | 3,332,278,000 |
Principal repayments of repurchase agreements | -199,074,000 | -3,018,657,000 |
Net cash paid on securities underlying Linked Transactions | -19,392,902 | -45,091,937 |
Cash received from repurchase agreements underlying Linked Transactions | 13,149,000 | 28,559,000 |
Net cash provided by financing activities | 83,562,187 | 374,457,747 |
Net increase in cash and cash equivalents | 6,408,073 | 12,735,729 |
Cash and cash equivalents, beginning of period | 0 | 3,608,759 |
Cash and cash equivalents, end of period | 6,408,073 | 16,344,488 |
Supplemental disclosure of cash flow information | ' | ' |
Cash paid for interest | 184,056 | 4,079,232 |
Non-cash investing and financing activities information | ' | ' |
Net change in unrealized gain (loss) on available-for-sale securities | $3,008,004 | ($9,939,532) |
ORGANIZATION_AND_BUSINESS_OPER
ORGANIZATION AND BUSINESS OPERATIONS | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS | |
Five Oaks Investment Corp. (the “Company”) is a Maryland corporation focused on investing primarily in residential mortgage-backed securities (“RMBS”) and other mortgage-related investments. The Company is externally managed by Oak Circle Capital Partners LLC, an asset management firm incorporated in Delaware. The Company’s common stock is listed on the NYSE under the symbol “OAKS.” | |
The Company was incorporated on March 28, 2012 and commenced operations on May 16, 2012. The Company began trading as a publicly traded company on March 22, 2013. | |
The Company has elected to be taxed as a real estate investment trust (“REIT”) and to comply with Sections 856 through 859 of the Internal Revenue Code of 1986, as amended, the ("Code"). Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. The Company invests in Agency RMBS, which are RMBS for which the principal and interest payments are guaranteed by a U.S. Government agency such as the Government National Mortgage Association or a U.S. Government-sponsored entity such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. The Company also invests in non-Agency RMBS, which are RMBS that are not guaranteed by a U.S. Government agency or a U.S. Government-sponsored entity, and may also invest in other mortgage-related investments. | |
On June 10, 2013, the Company established Five Oaks Acquisition Corp. (“FOAC”) as a wholly owned taxable REIT subsidiary, for the acquisition and disposition of residential mortgage loans. There was very limited activity within FOAC during the quarter, primarily focused on licensing and related matters. The Company consolidates its subsidiary under generally accepted accounting principles in the United States of America (“U.S. GAAP”). | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies [Text Block] | ' |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | |
The condensed balance sheet as of December 31, 2012 has been derived from audited financial statements. The condensed consolidated balance sheet as of September 30, 2013, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income (loss), the condensed consolidated statements of stockholders’ equity and the condensed consolidated statements of cash flows, for the three and nine months ended September 30, 2013, and for the three months ended September 30, 2012 and for the period May 16, 2012 (commencement of operations) to September 30, 2012, are unaudited. | |
The unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form S-11 for the period May 16, 2012 (commencement of operations) to December 31, 2012, which was filed with the Securities and Exchange Commission (“SEC”). | |
The condensed consolidated financial statements of the Company include the accounts of its subsidiary. | |
Variable Interest Entities | |
An entity is referred to as a variable interest entity ("VIE") if it lacks one or more of the following characteristics: (1) sufficient equity at risk to finance its activities without additional subordinated financial support provided by any parties, including the equity holders; (2) as a group the holders of the equity investment at risk have (a) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impacts the entity's economic performance, (b) the obligation to absorb the expected losses of the legal entity and (c) the right to receive the expected residual returns of the legal entity; and (3) the voting rights of these investors are proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected returns of their equity, or both, and whether substantially all of the entity's activities involve or are conducted on behalf of an investor that has disproportionately fewer voting rights. An investment that lacks one or more of the above three characteristics is considered to be a VIE. The Company reassesses its initial evaluation of an entity as a VIE based upon changes in the facts and circumstances pertaining to the VIE.. | |
VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE is determined to be the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses of the entity that could potentially be significant to, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. This determination may involve complex and subjective analyses. | |
The Company has evaluated its non-Agency RMBS investments to determine if each represents a variable interest in a VIE. The Company monitors these investments and analyzes them for potential consolidation. The Company's non-Agency RMBS investments represent variable interests in VIEs. At September 30, 2013 and December 31, 2012, no VIEs required consolidation as the Company was not the primary beneficiary of any of these VIEs. At September 30, 2013 and December 31, 2012, the maximum exposure of the Company to VIEs is limited to the fair value of its investments in non-Agency RMBS as disclosed in the consolidated balance sheets. | |
Use of Estimates | |
The financial statements have been prepared on the accrual basis of accounting in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities, amount and timing of credit losses, prepayment rates, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates (e.g., valuation changes due to supply and demand, credit performance, prepayments, interest rates, or other reasons) will occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ from its estimates and the differences may be material. | |
Cash and Cash Equivalents | |
Cash and cash equivalents include cash held on deposit with financial institutions and money market deposit accounts, all of which have original maturities of three months or less. The Company maintains its cash and cash equivalents in highly rated financial institutions, and at times these balances exceed insurable amounts. | |
Restricted Cash | |
Restricted cash represents the Company’s cash held by counterparties as collateral against the Company’s securities, derivatives and/or repurchase agreements, together with cash invested in FOAC to support a minimum capital requirement in connection with certain state licensing requirements. Cash held by counterparties as collateral is not available to the Company for general corporate purposes, but may be applied against amounts due to securities, derivatives or repurchase counterparties or returned to the Company when the collateral requirements are exceeded or, at the maturity of the derivative or repurchase agreement. | |
Deferred Offering Costs | |
In accordance with Accounting Standards Codification (“ASC”) Subtopic 505-10, the direct costs incurred to issue shares classified as equity, such as legal and accounting fees, should be deducted from the related proceeds and the net amount recorded as stockholders’ equity. Accordingly, payments made by the Company in respect of such costs related to the issuance of shares were recorded as an asset in the accompanying balance sheet in the line item “Deferred offering costs”, for subsequent deduction from the related proceeds upon closing of the offering. | |
To the extent that certain costs, in particular legal fees, are known to have been accrued but have not yet been invoiced and paid, they are included in “Other accounts payable and accrued expenses” on the accompanying condensed consolidated balance sheet. | |
Upon closing of the initial public offering and concurrent private placement of shares, all “Deferred offering costs” previously recorded as an asset on the Company’s condensed consolidated balance sheet have been reclassified. As further described in Note 9 – Related Party Transactions, an amount of $1,500,000 was deducted from proceeds of the related issuances, and the balance of offering costs in the amount of $1,139,703 was reimbursed to the Company by the Manager. | |
Repurchase Agreements | |
The Company finances the acquisition of certain of its mortgage-backed securities through the use of repurchase agreements. The repurchase agreements are generally short-term debt, which expire within one year. Borrowings under repurchase agreements generally bear interest rates at a specified margin over LIBOR and are generally uncommitted. In accordance with ASC 860 “Transfers and Servicing” the Company accounts for the repurchase agreements, other than those treated as Linked Transactions (see Note 3 – Accounting for Derivative Financial Instruments – Non-Hedging Activity/Linked Transactions below), as collateralized financing transactions and they are carried at their contractual amounts, as specified in the respective agreements. The contractual amounts approximate fair value due to their short-term nature. | |
Revenue Recognition, Premium Amortization, and Discount Accretion | |
Interest income on the Company’s portfolio is accrued based on the actual coupon rate and the outstanding principal balance of such securities. The Company recognizes interest income using the effective interest method for all securities. As such, premiums and discounts are amortized or accreted into interest income over the lives of the securities in accordance with ASC 310-20, “Nonrefundable Fees and Other Costs”, ASC 320-10, “Investments – Debt and Equity Securities” or ASC 325-40, “Beneficial Interests in Securitized Financial Assets”, as applicable. Total interest income will flow though the “Interest Income” line item on the condensed consolidated statement of operations. | |
On at least a quarterly basis for securities accounted for under ASC 320-10 and ASC 310-20 (generally Agency RMBS), prepayments of the underlying collateral must be estimated, which directly affect the speed at which the Company amortizes such securities. If actual and anticipated cash flows differ from previous estimates; the Company recognizes a “catch-up” adjustment in the current period to the amortization of premiums for the impact of the cumulative change in the effective yield through the reporting date. | |
Similarly, the Company also reassesses the cash flows on at least a quarterly basis for securities accounted for under ASC 325-40 (generally non-Agency RMBS). In estimating these cash flows, there are a number of assumptions that will be subject to uncertainties and contingencies. These include the rate and timing of principal and interest receipts (including assumptions of prepayments, repurchases, defaults and liquidations), the pass-through or coupon rate and interest rate fluctuations. In addition, interest payment shortfalls due to delinquencies on the underlying mortgage loans have to be judgmentally estimated. Differences between previously estimated cash flows and current actual and anticipated cash flows are recognized prospectively through an adjustment of the yield over the remaining life of the security based on the current amortized cost of the investment as adjusted for credit impairment, if any. | |
For investments purchased with evidence of deterioration of credit quality for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments receivable, the Company will apply the provisions of ASC 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality.” ASC 310-30 addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investor’s initial investment in loans or debt securities (loans) acquired in a transfer if those differences are attributable, at least in part, to credit quality. ASC 310-30 limits the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest and other cash flows (cash flows expected at acquisition to be collected) over the investor’s initial investment in the loan. ASC 310-30 requires that the excess of contractual cash flows over cash flows expected to be collected (nonaccretable difference) not be recognized as an adjustment of yield, loss accrual or valuation allowance. Subsequent increases in cash flows expected to be collected are generally recognized prospectively through adjustment of the loan’s yield over its remaining life. Decreases in cash flows expected to be collected are recognized as impairment. | |
The Company’s accrual of interest, discount and premium for U.S. federal and other tax purposes is likely to differ from the financial accounting treatment of these items as described above. | |
Gains and losses from the sale of available-for-sale securities (“AFS”) are recorded as realized gains (losses) within realized loss on sale of investments, net in the Company's condensed consolidated statement of operations. Upon the sale of a security, the Company will determine the cost of the security and the amount of unrealized gains or losses to reclassify out of accumulated other comprehensive income (loss) into earnings based on the specific identification method. Unrealized gains and losses on the Company’s AFS securities are recorded as unrealized gain (loss) on available-for-sale securities, net in the Company's condensed consolidated statement of comprehensive income (loss). | |
Impairment | |
The Company evaluates its RMBS, on a quarterly basis, to assess whether a decline in the fair value of an AFS security below the Company's amortized cost basis is an other-than-temporary impairment (“OTTI”). The presence of OTTI is based upon a fair value decline below a security's amortized cost basis and a corresponding adverse change in expected cash flows due to credit related factors as well as non-credit factors, such as changes in interest rates and market spreads. Impairment is considered other-than-temporary if an entity (i) intends to sell the security, (ii) will more likely than not be required to sell the security before it recovers in value or (iii) does not expect to recover the security's amortized cost basis, even if the entity does not intend to sell the security. Under these scenarios, the impairment is other-than-temporary and the full amount of impairment should be recognized currently in earnings and the cost basis of the investment security is adjusted. However, if an entity does not intend to sell the impaired debt security and it is more likely than not that it will not be required to sell before recovery, the OTTI should be separated into (i) the estimated amount relating to credit loss (“credit” component) and (ii) the amount relating to all other factors (“non-credit” component). Only the estimated credit loss amount is recognized currently in earnings, with the remainder of the loss amount recognized in other comprehensive income. The difference between the new amortized cost basis and the cash flows expected to be collected is accreted as interest income in accordance with the effective interest method. | |
Income Taxes | |
The Company has elected to be taxed as a REIT under the Code for U.S. federal income tax purposes, commencing with the Company’s short taxable period ended December 31, 2012. So long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes at least 90% of its net taxable income to shareholders and maintains its intended qualification as a REIT. | |
In addition to the Company’s election to be taxed as a REIT, the Company complies with Sections 856 through 859 of the Code. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. To maintain its qualification as a REIT, the Company must distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. The Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company believes it will meet all of the criteria to maintain the Company's REIT qualification for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods. | |
The Company does not have any material uncertain tax positions at this time. The Company's accounting policy with respect to interest and penalties is to classify these amounts as interest expense. The Company has not recognized any such amounts related to uncertain tax positions as of the balance sheet date. | |
Earnings per Share | |
The Company calculates basic and diluted earnings per share by dividing net income attributable to common stockholders for the period by the weighted-average shares of the Company’s common stock outstanding for that period. Diluted earnings per share takes into account the effect of dilutive instruments, such as warrants, stock options, and unvested restricted stock, but use the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. See Note 11 for details of the computation of basic and diluted earnings per share. | |
Stock-Based Compensation | |
The Company is required to recognize compensation costs relating to stock-based payment transactions in the financial statements. The Company accounts for share-based compensation issued to its Manager and non-management directors using the fair value based methodology prescribed by ASC 718, Share-Based Payment (“ASC 718”). Compensation cost related to restricted common stock issued to the Manager is initially measured at estimated fair value at the grant date, and is remeasured on subsequent dates to the extent the awards are unvested. Additionally, compensation cost related to restricted common stock issued to the non-management directors is measured at its estimated fair value at the grant date and amortized and expensed over the vesting period. See Note 9 for details of stock-based awards issuable under the Manager Equity Plan. | |
Comprehensive Income (Loss) | |
Comprehensive income (loss) is comprised of net income (loss), as presented in the condensed consolidated statement of comprehensive income (loss), adjusted for changes in unrealized gain or loss on AFS securities. | |
Recent Accounting Pronouncements Adopted | |
In December 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-11, which amends ASC 210, “Balance Sheet”. The amendments in this ASU enhance disclosures required by U.S. GAAP by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with ASC 210, Balance Sheet or ASC 815, Other Presentation Matters or (2) subject to an enforceable master netting arrangement or similar agreement. ASU No. 2011-11 is effective for the first interim or annual period beginning on or after January 1, 2013. The Company adopted ASU No. 2011-11 for the nine months ended September 30, 2013 and this had no material impact on the Company’s financial condition or results of operations other than enhanced disclosure in the condensed consolidated notes to financial statements. | |
In January 2013, FASB issued ASU No. 2013-01, which amends ASU No. 2011-11. The amendments clarify that the scope of ASU No. 2011-11 applies to derivatives accounted for in accordance with ASC 815, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are offset in accordance with ASC 210 or subject to an enforceable master netting arrangement or similar agreements. ASU No. 2013-01 is effective the same date as ASU No. 2011-11. The Company adopted ASU No. 2013-01 for the nine months ended September 30, 2013 and this had no material impact on the Company’s financial condition or results of operations other than enhanced disclosure in the condensed consolidated notes to financial statements. | |
In February 2013, FASB issued ASU No. 2013-02, which amends FASB ASC 220 “Comprehensive Income”. The amendments in this ASU require an entity to provide information about any amounts reclassified out of accumulated other comprehensive income by component. An entity is required to present, either on the face of the statement where net income is presented or in the condensed consolidated notes to financial statements, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU No. 2013-02 is effective for reporting periods beginning after December 15, 2012 for public entities. The Company adopted ASU No. 2013-02 for the nine months ended September 30, 2013 and this had no material impact on the Company’s financial condition or results of operations. | |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2013 | |
Fair Value Disclosures [Abstract] | ' |
Fair Value Disclosures [Text Block] | ' |
NOTE 3 – FAIR VALUE MEASUREMENTS | |
The Company discloses the fair value of its financial instruments according to a fair value hierarchy (Levels 1, 2 and 3, as defined). In accordance with U.S. GAAP, the Company is required to provide enhanced disclosures regarding instruments in the Level 3 category (which require significant management judgment), including a separate reconciliation of the beginning and ending balances for each major category of assets and liabilities. | |
Additionally, U.S. GAAP permits entities to choose to measure many financial instruments and certain other items at fair value (the “fair value option”), and the election of such choice is irrevocable. Unrealized gains and losses on items for which the fair value option has been elected are irrevocably recognized in earnings at each subsequent reporting date. | |
Securities | |
The Company currently invests in Agency RMBS and non-Agency RMBS. | |
Designation | |
The Company classifies its RMBS securities as AFS investments. Although the Company generally intends to hold most of its investment securities until maturity, it may, from time to time, sell any of its investment securities as part of the overall management of its portfolio. All assets classified as AFS are reported at estimated fair value, with unrealized gains and losses, excluding other than temporary impairments, included in accumulated other comprehensive income, a separate component of shareholders' equity, on an after-tax basis. | |
Determination of RMBS Fair Value | |
The Company determines the fair values for the Agency RMBS and non-Agency RMBS in its portfolio based on obtaining a valuation for each Agency and non-Agency RMBS from third-party pricing services, and may also obtain dealer quotes, as described below. The third-party pricing services use common market pricing methods that may include pricing models that may incorporate such factors as coupons, prepayment speeds, spread to the Treasury curves and interest rate swap curves, duration, periodic and life caps and credit enhancement, as applicable. The dealers incorporate common market pricing methods, including a spread measurement to the Treasury curve or interest rate swap curve as well as underlying characteristics of the particular security, including coupon, periodic and life caps, collateral type, rate reset period and seasoning or age of the security, as applicable. | |
The Company obtains pricing data from a primary third-party pricing service for each Agency and non-Agency RMBS. If other available market data indicates that the pricing data from the primary third-party service is materially inaccurate, or pricing data is unavailable from the primary third-party pricing service, the Company shall undertake a review of other available prices and shall take additional steps to determine fair value. In all cases, the Company validates its understanding of methodology and assumptions underlying the fair value used. | |
The Company reviews all pricing of Agency and non-Agency RMBS used to ensure that current market conditions are properly represented. This review includes, but is not limited to, comparisons of similar market transactions or alternative third-party pricing services, dealer quotes and comparisons to a pricing model. Values obtained from the third-party pricing service for similar instruments are classified as Level 2 securities if the pricing methods used are consistent with the Level2 definition. If quoted prices for a security are not reasonably available from the pricing service, but dealer quotes are, the Company classifies the security as a Level 2 security. If neither is available, the Company determines the fair value based on characteristics of the security that are received from the issuer and based on available market information received from dealers and classifies it as a Level 3 security. | |
Accounting for Derivative Financial Instruments | |
In accordance with FASB guidance ASC 815 “Derivatives and Hedging”, all derivative financial instruments, whether designated for hedging relationships or not, are recorded at fair value on the condensed consolidated balance sheet as assets or liabilities. The Company obtains valuation information for each derivative financial instrument from the related derivative counterparty or the relevant exchange, as applicable. The fair value of futures contracts is based on quoted prices from the exchange on which they trade. If other available market data indicates that the valuation information from a counterparty is materially inaccurate, or pricing data is unavailable from the counterparty, the Company undertakes a review of other available valuation information, including third party pricing services and/or dealers, and shall take additional steps to determine fair value. The Company reviews all valuations of derivative financial instruments used to ensure that current market conditions are properly represented. This review includes, but is not limited to, comparisons of similar market transactions or alternative third-party pricing services, dealer quotes and comparisons to a pricing model. Values obtained from the derivative counterparty, the third-party pricing service or dealers, as appropriate, for similar instruments are classified as Level 2 valuations if the pricing methods used are consistent with the Level2 definition. If none of these sources is available, the Company determines the fair value based on characteristics of the instrument and based on available market information received from dealers and classifies it as a Level 3 valuation. | |
At the inception of a derivative contract, the Company determines whether or not the instrument will be part of a qualifying hedge accounting relationship. Due to the volatility of the credit markets and difficulty in effectively matching pricing or cash flows, the Company has elected to treat all current derivative contracts as trading instruments. The changes in fair value of derivatives accounted for as trading instruments are reported in the condensed consolidated statement of operations as unrealized loss on derivative contracts, net. | |
The Company enters into interest rate derivative contracts for a variety of reasons, including minimizing significant fluctuations in earnings or market values on certain assets or liabilities that may be caused by changes in interest rates. The Company may, at times, enter into various forward contracts, including short securities, Agency to-be-announced securities (“TBAs”), options, futures, swaps and caps. Due to the nature of these instruments, they may be in a receivable/asset position or a payable/liability position at the end of an accounting period. Amounts payable to, and receivable from, the same party under contracts may be offset as long as the following conditions are met: (a) each of the two parties owes the other determinable amounts; (b) the reporting party has the right to offset the amount owed with the amount owed by the other party; (c) the reporting party intends to offset; and (d) the right of offset is enforceable by law. If the aforementioned conditions are not met, amounts payable to and receivable from are presented by the Company on a gross basis in the balance sheet. | |
Non-Hedging Activity – Linked Transactions | |
It is presumed that the initial transfer of a financial asset (i.e. the purchase of an RMBS by the Company) and contemporaneous repurchase financing of such RMBS with the same counterparty are considered part of the same arrangement, or a “linked transaction”, unless certain criteria are met. The two components of a linked transaction (RMBS purchase and repurchase financing) are accounted for on a net basis and recorded as a forward purchase (derivative) contract (each a Linked Transaction) at fair value on the Company’s balance sheet in the line item “Linked Transactions, net, at fair value”. Changes in the fair value of the assets and liabilities underlying linked transactions and associated interest income and expense are reported as “Unrealized gain and net interest income from Linked Transactions”, on the Company’s condensed consolidated statement of operations. When or if a transaction is no longer considered to be linked, the RMBS and repurchase financing will be reported on a gross basis. In this case, the fair value of the RMBS at the time the transactions are no longer considered linked will become the cost basis of the RMBS, and the income recognition yield for such RMBS will be calculated prospectively using this new cost basis. (See Notes 7 and 8). | |
See Note 7 for specific disclosures regarding the location and amounts of derivative instruments in the financial statements and the accounting for derivative instruments and related hedged items. | |
AVAILABLEFORSALE_SECURITIES
AVAILABLE-FOR-SALE SECURITIES | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||||||
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | ' | |||||||||||||||||||
NOTE 4 – AVAILABLE-FOR-SALE SECURITIES | ||||||||||||||||||||
Non-Agency RMBS that are accounted for as components of Linked Transactions are not reflected in the tables set forth in this Note, as they are accounted for as derivatives. (See Notes 7 and 8). | ||||||||||||||||||||
The following table presents the Company’s AFS investment securities by collateral type at fair value as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
Agency | ||||||||||||||||||||
Federal Home Loan Mortgage Corporation | $ | 151,331,577 | $ | 49,765,271 | ||||||||||||||||
Federal National Mortgage Association | 208,518,840 | 20,208,333 | ||||||||||||||||||
Non-Agency | 57,702,486 | 11,054,394 | ||||||||||||||||||
Total mortgage-backed securities | $ | 417,552,903 | $ | 81,027,998 | ||||||||||||||||
The following tables present the amortized cost and fair value of the Company’s AFS investment securities by collateral type as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Agency | Non-Agency | Total | ||||||||||||||||||
Face Value | $ | 357,111,292 | $ | 93,841,342 | $ | 450,952,634 | ||||||||||||||
Unamortized premium | 12,854,666 | - | 12,854,666 | |||||||||||||||||
Unamortized discount | ||||||||||||||||||||
Designated credit reserve | - | -15,967,512 | -15,967,512 | |||||||||||||||||
Net, unamortized | -1,614,616 | -21,166,734 | -22,781,350 | |||||||||||||||||
Amortized Cost | 368,351,342 | 56,707,096 | 425,058,438 | |||||||||||||||||
Gross unrealized loss | -8,500,925 | 995,390 | -7,505,535 | |||||||||||||||||
Fair Value | $ | 359,850,417 | $ | 57,702,486 | $ | 417,552,903 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Agency | Non-Agency | Total | ||||||||||||||||||
Face Value | $ | 65,310,197 | $ | 18,507,380 | $ | 83,817,577 | ||||||||||||||
Unamortized premium | 3,193,345 | - | 3,193,345 | |||||||||||||||||
Unamortized discount | ||||||||||||||||||||
Designated credit reserve | - | -4,882,582 | -4,882,582 | |||||||||||||||||
Net, unamortized | - | -3,534,339 | -3,534,339 | |||||||||||||||||
Amortized Cost | 68,503,542 | 10,090,459 | 78,594,001 | |||||||||||||||||
Gross unrealized gain | 1,470,062 | 963,935 | 2,433,997 | |||||||||||||||||
Fair Value | $ | 69,973,604 | $ | 11,054,394 | $ | 81,027,998 | ||||||||||||||
The following tables present a summary of the Company’s net realized gain (loss) from the sale of Agency and non-Agency RMBS for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||||
Agency and non-Agency RMBS sold, at cost | $ | 348,566,209 | $ | - | ||||||||||||||||
Proceeds from Agency and non-Agency RMBS sold | 331,913,127 | - | ||||||||||||||||||
Net realized gain (loss) on sale of Agency and non-Agency RMBS | $ | -16,653,082 | $ | - | ||||||||||||||||
Nine Months Ended | Period May 16, 2012 | |||||||||||||||||||
September 30, 2013 | to September 30, 2012 | |||||||||||||||||||
Agency and non-Agency RMBS sold, at cost | $ | 717,350,126 | $ | - | ||||||||||||||||
Proceeds from Agency and non-Agency RMBS sold | 687,252,011 | - | ||||||||||||||||||
Net realized gain (loss) on sale of Agency and non-Agency RMBS | $ | -30,098,115 | $ | - | ||||||||||||||||
The following tables present the fair value of AFS investment securities by rate type as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Agency | Non-Agency | Total | ||||||||||||||||||
Adjustable rate | $ | 139,130,999 | $ | 57,702,486 | $ | 196,833,485 | ||||||||||||||
Fixed rate | 220,719,418 | - | 220,719,418 | |||||||||||||||||
Total | $ | 359,850,417 | $ | 57,702,486 | $ | 417,552,903 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Agency | Non-Agency | Total | ||||||||||||||||||
Adjustable rate | $ | - | $ | 11,054,394 | $ | 11,054,394 | ||||||||||||||
Fixed rate | 69,973,604 | - | 69,973,604 | |||||||||||||||||
Total | $ | 69,973,604 | $ | 11,054,394 | $ | 81,027,998 | ||||||||||||||
As described in Note 3, when the Company purchases a credit-sensitive AFS security at a significant discount to its face value, the Company generally does not amortize into income a significant portion of this discount that the Company is entitled to earn because it does not expect to collect it due to the inherent credit risk of the security. The Company may also record an OTTI for a portion of its investment in the security to the extent the Company believes that the amortized cost will exceed the present value of expected future cash flows. The amount of principal that the Company does not amortize into income is designated as an off balance sheet credit reserve on the security, with unamortized net discounts or premiums amortized into income over time to the extent realizable. | ||||||||||||||||||||
Actual maturities of AFS securities are affected by the contractual lives of the associated mortgage collateral, periodic payments of principal, and prepayments of principal. Therefore actual maturities of available-for-sale securities are generally shorter than stated contractual maturities. Stated contractual maturities are generally greater than ten years. | ||||||||||||||||||||
The following tables present the changes for the nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to December 31, 2012 of the unamortized net discount and designated credit reserves on non-Agency AFS securities. | ||||||||||||||||||||
30-Sep-13 | ||||||||||||||||||||
Designated | Unamortized | |||||||||||||||||||
credit reserve | net discount | Total | ||||||||||||||||||
Acquisitions | $ | -18,378,288 | $ | -24,450,562 | $ | -42,828,850 | ||||||||||||||
Accretion of net discount | - | 1,663,450 | 1,663,450 | |||||||||||||||||
Realized gain on paydowns | - | 5,762 | 5,762 | |||||||||||||||||
Realized credit losses | 1,755,001 | - | 1,755,001 | |||||||||||||||||
Release of credit reserves | 655,775 | - | 655,775 | |||||||||||||||||
Ending balance at September 30, 2013 | $ | -15,967,512 | $ | -22,781,350 | $ | -38,748,862 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Designated | Unamortized | |||||||||||||||||||
credit reserve | net discount | Total | ||||||||||||||||||
Acquisitions | $ | -5,363,444 | $ | -3,997,817 | $ | -9,361,261 | ||||||||||||||
Accretion of net discount | - | 463,478 | 463,478 | |||||||||||||||||
Realized credit losses | 480,862 | - | 480,862 | |||||||||||||||||
Ending balance at December 31, 2012 | $ | -4,882,582 | $ | -3,534,339 | $ | -8,416,921 | ||||||||||||||
Gains and losses from the sale of AFS securities are recorded within realized gain (loss) on sale of investments, net in the Company's condensed consolidated statements of operations. | ||||||||||||||||||||
Unrealized gains and losses on the Company’s AFS securities are recorded as unrealized gain (loss) on available-for-sale securities, net in the Company's condensed consolidated statement of comprehensive income (loss). For the three and nine months ended September 30, 2013, the Company had unrealized gains (losses) on AFS securities of $16,495,823 and $(9,939,532), respectively. | ||||||||||||||||||||
The following tables present components of interest income on the Company’s Agency RMBS and non-Agency RMBS for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||||||||||||||
Three Months Ended September 30, 2013 | Three Months Ended September 30, 2012 | |||||||||||||||||||
Net (premium | Net (premium | |||||||||||||||||||
Coupon | amortization)/ | Interest | Coupon | amortization)/ | Interest | |||||||||||||||
interest | discount accretion | income | interest | discount accretion | income | |||||||||||||||
Agency | $ | 3,472,373 | $ | -58,281 | $ | 3,414,092 | $ | 535,560 | $ | -73,451 | $ | 462,109 | ||||||||
Non-Agency | 45,010 | 879,346 | 924,356 | 28,859 | 225,528 | 254,387 | ||||||||||||||
Total | $ | 3,517,383 | $ | 821,065 | $ | 4,338,448 | $ | 564,419 | $ | 152,077 | $ | 716,496 | ||||||||
Nine Months Ended September 30, 2013 | Period May 16, 2012 to September 30, 2012 | |||||||||||||||||||
Net (premium | Net (premium | |||||||||||||||||||
Coupon | amortization)/ | Interest | Coupon | amortization)/ | Interest | |||||||||||||||
interest | discount accretion | income | interest | discount accretion | income | |||||||||||||||
Agency | $ | 13,878,581 | $ | -713,094 | $ | 13,165,487 | $ | 710,165 | $ | -90,166 | $ | 619,999 | ||||||||
Non-Agency | 138,050 | 1,620,889 | 1,758,939 | 28,859 | 225,528 | 254,387 | ||||||||||||||
Total | $ | 14,016,631 | $ | 907,795 | $ | 14,924,426 | $ | 739,024 | $ | 135,362 | $ | 874,386 | ||||||||
RESTRICTED_CASH
RESTRICTED CASH | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Cash and Cash Equivalents [Abstract] | ' | |||||||
Restricted Cash and Cash Equivalents Disclosure [Text Block] | ' | |||||||
NOTE 5 – RESTRICTED CASH | ||||||||
As of September 30, 2013, the Company is required to maintain certain cash balances with counterparties for broker activity and collateral for the Company's repurchase agreements in non-interest bearing accounts. | ||||||||
The following table presents the Company's restricted cash balances as of September 30, 2013 and December 31, 2012: | ||||||||
Restricted cash balance held by: | ||||||||
Broker counterparties for derivatives trading | $ | 11,936,026 | $ | 570,247 | ||||
Repurchase counterparties as restricted collateral | 1,725,632 | 1,363,143 | ||||||
FOAC as minimum required capital | 30,000 | - | ||||||
Total | $ | 13,691,658 | $ | 1,933,390 | ||||
REPURCHASE_AGREEMENTS
REPURCHASE AGREEMENTS | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure Of Repurchase Agreements [Abstract] | ' | |||||||||||||
Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block] | ' | |||||||||||||
NOTE 6 – REPURCHASE AGREEMENTS | ||||||||||||||
The Company has entered into repurchase agreements to finance its portfolio of investments. The repurchase agreements bear interest at a contractually agreed rate. The repurchase obligations mature and typically reinvest every thirty days to one year and have a weighted average aggregate interest rate of 0.56% at September 30, 2013. Repurchase agreements are being accounted for as secured borrowings since the Company maintains effective control of the financed assets. The following table summarizes certain characteristics of the Company’s repurchase agreements at September 30, 2013 and December 31, 2012: | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Weighted | Weighted | |||||||||||||
Amount | average | Amount | average | |||||||||||
outstanding | interest rate | outstanding | interest rate | |||||||||||
Agency | $ | 338,846,000 | 0.39 | % | $ | 59,616,000 | 0.48 | % | ||||||
Non-Agency(1) | 38,198,000 | 2.09 | % | 3,807,000 | 2.31 | % | ||||||||
Total | $ | 377,044,000 | 0.56 | % | $ | 63,423,000 | 0.59 | % | ||||||
(1) At September 30, 2013 and December 31, 2012, the Company had repurchase agreements of $42,548,000 and $13,989,000, respectively, that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3). | ||||||||||||||
At September 30, 2013 and December 31, 2012, the repurchase agreements had the following remaining maturities: | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
< 30 days | $ | 315,000,000 | $ | 59,616,000 | ||||||||||
31 to 60 days | 62,044,000 | 3,807,000 | ||||||||||||
Total | $ | 377,044,000 | $ | 63,423,000 | ||||||||||
(1) At September 30, 2013 and December 31, 2012, the Company had repurchase agreements of $42,548,000 and $13,989,000, respectively, that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3). | ||||||||||||||
Under the repurchase agreements, the respective lender retains the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets would require the Company to provide additional collateral or fund margin calls. In addition, the repurchase agreements are subject to certain financial covenants. The Company is in compliance with these covenants as of September 30, 2013. | ||||||||||||||
The following tables summarize certain characteristics of the Company’s repurchase agreements at September 30, 2013 and December 31, 2012: | ||||||||||||||
September 30, 2013 | ||||||||||||||
Amount | Percent of total | Weighted average | Company RMBS | |||||||||||
Repurchase Agreement Counterparties | Outstanding(1) | amount outstanding | days to maturity | held as collateral | ||||||||||
North America | $ | 184,744,000 | 49 | % | 18 | $ | 196,351,333 | |||||||
Asia (2) | 81,235,000 | 21.54 | % | 34 | 86,361,215 | |||||||||
Europe (2) | 53,791,000 | 14.27 | % | 23 | 61,033,655 | |||||||||
Nomura Securities International, Inc. | 45,577,000 | 12.09 | % | 20 | 56,260,079 | |||||||||
Citigroup Global Markets, Inc. | 11,697,000 | 3.1 | % | 33 | 17,546,621 | |||||||||
Total | $ | 377,044,000 | 100 | % | 23 | $ | 417,552,903 | |||||||
(1) At September 31, 2013, the Company had repurchase agreements of $42,548,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3). | ||||||||||||||
(2) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. | ||||||||||||||
December 31, 2012 | ||||||||||||||
Amount | Percent of total | Weighted average | Company RMBS | |||||||||||
Repurchase Agreement Counterparties | Outstanding(1) | amount outstanding | days to maturity | held as collateral | ||||||||||
North America | $ | 52,874,000 | 83.37 | % | 17 | $ | 55,462,506 | |||||||
Asia (2) | 10,549,000 | 16.63 | % | 18 | 10,874,574 | |||||||||
Total | $ | 63,423,000 | 100 | % | 17 | $ | 66,337,080 | |||||||
(1) At December 31, 2012, the Company had repurchase agreements of $13,989,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3). | ||||||||||||||
(2) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. | ||||||||||||||
DERIVATIVE_INSTRUMENTS_HEDGING
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Derivative Instrument Detail [Abstract] | ' | |||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | ' | |||||||||||||||||||
NOTE 7 – DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES | ||||||||||||||||||||
The Company enters into a variety of derivative instruments in connection with its risk management activities. The Company's primary objective for executing these derivatives and non-derivative instruments is to mitigate the Company's economic exposure to future events that are outside its control. The Company's derivative financial instruments are utilized principally to manage market risk and cash flow volatility associated with interest rate risk (including associated prepayment risk) related to certain assets and liabilities. As part of its risk management activities, the Company may, at times, enter into various forward contracts, including short securities, Agency to-be-announced securities, or TBAs, options, futures, swaps and caps. In executing on the Company's current risk management strategy, the Company has entered into interest rate swap, swaption agreements, TBAs and futures contracts. Amounts receivable and payable under interest rate swap agreements are accounted for as unrealized gain (loss) on derivative contracts, net in the condensed consolidated statement of operations. Premiums on swaptions are amortized on a straight line basis between trade date and expiration date and are recognized in the condensed consolidated statement of operations as a realized loss on derivative contracts. In addition, as set out in Note 3, the Company records Linked Transactions as a forward purchase (derivative) contract at fair value on the balance sheet. Although Linked Transactions are accounted for as derivative instruments, they are not entered into as part of the Company’s risk management activities and are not designated as hedging instruments. | ||||||||||||||||||||
The following summarizes the Company's significant asset and liability derivatives, the risk exposure for these derivatives and the Company's risk management activities used to mitigate certain of these risks. While the Company uses derivative instruments to achieve the Company's risk management activities, it is possible that these instruments will not effectively mitigate all or a substantial portion of the Company's market rate risk. In addition, the Company might elect, at times, not to enter into certain hedging arrangements in order to maintain compliance with REIT requirements. | ||||||||||||||||||||
Balance Sheet Presentation | ||||||||||||||||||||
The following tables present the gross fair value and notional amounts of the Company’s derivative financial instruments as of September 30, 2013 and December 31, 2012. The Company’s Linked Transactions are evaluated on a combined basis. | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||
Fair value | Notional | Fair value | Notional | |||||||||||||||||
Interest rate swaps | $ | - | - | $ | -4,630,242 | 338,000,000 | ||||||||||||||
Swaptions | 1,541,494 | 25,000,000 | - | - | ||||||||||||||||
Futures | 120,313 | 20,000,000 | - | - | ||||||||||||||||
Linked transactions | 23,205,354 | - | - | - | ||||||||||||||||
Total | $ | 24,867,161 | 45,000,000 | $ | -4,630,242 | 338,000,000 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||
Fair value | Notional | Fair value | Notional | |||||||||||||||||
Interest rate swaps | $ | - | - | $ | -283,754 | 35,000,000 | ||||||||||||||
Swaptions | 12,062 | 5,000,000 | - | - | ||||||||||||||||
Linked transactions | 8,612,753 | - | - | - | ||||||||||||||||
Total | $ | 8,624,815 | 5,000,000 | $ | -283,754 | 35,000,000 | ||||||||||||||
The following tables present the average fixed pay rate and average maturity for the Company’s interest rate swaps (excludes interest rate swaptions) as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Notional | Fair | Fixed Pay | Maturity | Forward | ||||||||||||||||
Current Maturity Date | Amount | Value | Rate | Years | Starting | |||||||||||||||
3 years or less | $ | 35,000,000 | $ | -149,933 | 0.66 | % | 2.4 | 0 | % | |||||||||||
Greater than 5 years and less than 7 years | 151,000,000 | -1,914,141 | 1.66 | % | 4.9 | 0 | % | |||||||||||||
Greater than 7 years and less than 10 years | 95,000,000 | -1,599,897 | 2.85 | % | 7.9 | 100 | % | |||||||||||||
Greater than 10 years | 57,000,000 | -966,271 | 3.29 | % | 10.9 | 100 | % | |||||||||||||
Total | $ | 338,000,000 | $ | -4,630,242 | 2.17 | % | 6.5 | 45 | % | |||||||||||
December 31, 2012 | ||||||||||||||||||||
Notional | Fair | Fixed Pay | Maturity | Forward | ||||||||||||||||
Current Maturity Date | Amount | Value | Rate | Years | Starting | |||||||||||||||
3 years or less | $ | 15,000,000 | $ | -53,437 | 0.51 | % | 2.6 | 0 | % | |||||||||||
Greater than 3 years and less than 5 years | 20,000,000 | -230,317 | 0.78 | % | 3.5 | 0 | % | |||||||||||||
Total | $ | 35,000,000 | $ | -283,754 | 0.66 | % | 3.1 | 0 | % | |||||||||||
Offsetting of Financial Assets and Liabilities | ||||||||||||||||||||
The Company’s repurchase agreements are governed by underlying agreements that provide for a right of setoff in the event of default of either counterparty to the agreement. The Company also has in place with its counterparties ISDA Master Agreements (“Master Agreements”) for its derivative contracts. In accordance with the Master Agreements to each counterparty, if on any date amounts would otherwise be payable in the same currency and in respect of the same transaction by each party to the other, then, on such date, each party’s obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount. The Company has pledged financial collateral as restricted cash to its counterparties for its derivative contracts and repurchase agreements. See Note 2 for specific details on the terms of restricted cash with counterparties and Note 5 for the amounts of restricted cash outstanding. | ||||||||||||||||||||
Under GAAP, if the Company has a valid right of setoff, it may offset the related asset and liability and report the net amount. The Company presents repurchase agreements subject to Master Agreements or similar agreements on a gross basis, and derivative assets and liabilities subject to such arrangements on a net basis, based on derivative type and counterparty, in its condensed consolidated balance sheets. Separately, the company presents cash collateral subject to such arrangements on a net basis, based on counterparty, in its condensed consolidated balance sheets. However, the Company does not offset financial assets and liabilities with the associated cash collateral on its condensed consolidated balance sheets. | ||||||||||||||||||||
The below tables provide a reconciliation of these assets and liabilities that are subject to Master Agreements or similar agreements and can be potentially offset on the Company’s condensed consolidated balance sheets as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Gross amounts not offset | ||||||||||||||||||||
in the Balance Sheet (1) | ||||||||||||||||||||
Net amounts | ||||||||||||||||||||
Gross amounts | Gross amounts | of assets | Cash collateral | |||||||||||||||||
of recognized | offset in the | presented in the | Financial | (Received)/ | Net | |||||||||||||||
Description | assets | Balance Sheet | Balance Sheet | instruments | Pledged | amount | ||||||||||||||
Linked transactions(2) | $ | 65,825,235 | $ | -42,619,881 | $ | 23,205,354 | $ | -23,205,354 | $ | - | $ | - | ||||||||
Swaptions | 1,541,494 | - | 1,541,494 | - | - | 1,541,494 | ||||||||||||||
Futures | 120,313 | -120,313 | - | - | - | - | ||||||||||||||
Total | $ | 67,487,042 | $ | -42,740,194 | $ | 24,746,848 | $ | -23,205,354 | $ | - | $ | 1,541,494 | ||||||||
September 30, 2013 | ||||||||||||||||||||
Gross amounts not offset | ||||||||||||||||||||
in the Balance Sheet (1) | ||||||||||||||||||||
Net amounts | ||||||||||||||||||||
Gross amounts | Gross amounts | of liabilities | Cash collateral | |||||||||||||||||
of recognized | offset in the | presented in the | Financial | (Received)/ | Net | |||||||||||||||
Description | liabilities | Balance Sheet | Balance Sheet | instruments | Pledged | amount | ||||||||||||||
Repurchase agreements | $ | -377,044,000 | $ | - | $ | -377,044,000 | $ | 377,044,000 | $ | - | $ | - | ||||||||
Linked transactions(2) | -42,619,881 | 42,619,881 | - | - | - | - | ||||||||||||||
Interest rate swaps | -4,630,242 | - | -4,630,242 | - | 4,630,242 | - | ||||||||||||||
Futures | - | 120,313 | 120,313 | - | -120,313 | - | ||||||||||||||
Total | $ | -424,294,123 | $ | 42,740,194 | $ | -381,553,929 | $ | 377,044,000 | $ | 4,509,929 | $ | - | ||||||||
December 31, 2012 | ||||||||||||||||||||
Gross amounts not offset | ||||||||||||||||||||
in the Balance Sheet (1) | ||||||||||||||||||||
Net amounts | ||||||||||||||||||||
Gross amounts | Gross amounts | of assets | Cash collateral | |||||||||||||||||
of recognized | offset in the | presented in the | Financial | (Received)/ | Net | |||||||||||||||
Description | assets | Balance Sheet | Balance Sheet | instruments | Pledged | amount | ||||||||||||||
Linked transactions(2) | $ | 22,636,490 | $ | -14,023,737 | $ | 8,612,753 | $ | -8,612,753 | $ | - | $ | - | ||||||||
Swaptions | 12,062 | - | 12,062 | - | - | 12,062 | ||||||||||||||
Total | $ | 22,648,552 | $ | -14,023,737 | $ | 8,624,815 | $ | -8,612,753 | $ | - | $ | 12,062 | ||||||||
December 31, 2012 | ||||||||||||||||||||
Gross amounts not offset | ||||||||||||||||||||
in the Balance Sheet (1) | ||||||||||||||||||||
Net amounts | ||||||||||||||||||||
Gross amounts | Gross amounts | of liabilities | Cash collateral | |||||||||||||||||
of recognized | offset in the | presented in the | Financial | (Received)/ | Net | |||||||||||||||
Description | liabilities | Balance Sheet | Balance Sheet | instruments | Pledged | amount | ||||||||||||||
Repurchase agreements | $ | -63,423,000 | $ | - | $ | -63,423,000 | $ | 63,423,000 | $ | - | $ | - | ||||||||
Linked transactions(2) | -14,023,737 | 14,023,737 | - | - | - | - | ||||||||||||||
Interest rate swaps | -283,754 | - | -283,754 | - | 283,754 | - | ||||||||||||||
Total | $ | -77,730,491 | $ | 14,023,737 | $ | -63,706,754 | $ | 63,423,000 | $ | 283,754 | $ | - | ||||||||
(1) Amounts presented are limited in total to the net amount of assets or liabilities presented in the condensed consolidated balance sheets by instrument. Excess cash collateral or financial assets that are pledged to counterparties may exceed the financial liabilities subject to Master Arrangements or similar agreements, or counterparties may have pledged excess cash collateral to the Company that exceed the corresponding financial assets. These excess amounts are excluded from the tables above. | ||||||||||||||||||||
(2) RMBS securities within a linked transaction serve as collateral for the linked transaction. See Note 3 “Non-Hedging Activity – Linked Transactions” for information on linked transaction arrangements. | ||||||||||||||||||||
Linked Transactions | ||||||||||||||||||||
The Company’s Linked Transactions are accounted for on a net basis and recorded as forward purchase (derivative) contracts at fair value on the Company’s condensed consolidated balance sheet. The fair value of Linked Transactions reflects the value of the underlying Non-Agency RMBS, the linked repurchase borrowings and accrued interest receivable/payable on such instruments. The Company’s Linked Transactions are not designated as hedging instruments and, as a result, the change in fair value and net interest income is reported as “Unrealized gain (loss) and net interest income from Linked Transactions” in other income on the Company’s condensed consolidated statement of operations. | ||||||||||||||||||||
The following tables present certain information concerning the Non-Agency RMBS and repurchase financings underlying the Company’s Linked Transactions as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
Linked Non-Agency RMBS | ||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||
Face Value | $ | 106,674,886 | $ | 38,320,365 | ||||||||||||||||
Unamortized premium | - | - | ||||||||||||||||||
Unamortized discount | ||||||||||||||||||||
Designated credit reserve | -16,904,123 | -12,929,231 | ||||||||||||||||||
Net, unamortized | -26,009,442 | -6,721,749 | ||||||||||||||||||
Amortized Cost | 63,761,321 | 18,669,385 | ||||||||||||||||||
Gross unrealized gains | 2,042,807 | 3,950,157 | ||||||||||||||||||
Fair Value | $ | 65,804,128 | $ | 22,619,542 | ||||||||||||||||
The following tables present the changes for the nine months ended September 30, 2013 and for the period May 16, 2012 (commencement of operations) to December 31, 2012 of the unamortized net discount and designated credit reserves on Non-Agency RMBS underlying Linked Transactions: | ||||||||||||||||||||
30-Sep-13 | ||||||||||||||||||||
Designated | Unamortized | |||||||||||||||||||
credit reserve | net discount | Total | ||||||||||||||||||
Acquisitions | $ | -24,122,429 | $ | -28,179,701 | $ | -52,302,130 | ||||||||||||||
Accretion of net discount | - | 2,170,259 | 2,170,259 | |||||||||||||||||
Realized credit losses | 7,218,306 | - | 7,218,306 | |||||||||||||||||
Ending balance at September 30, 2013 | $ | -16,904,123 | $ | -26,009,442 | $ | -42,913,565 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Designated | Unamortized | |||||||||||||||||||
credit reserve | net discount | Total | ||||||||||||||||||
Acquisitions | $ | -13,934,657 | $ | -7,592,017 | $ | -21,526,674 | ||||||||||||||
Accretion of net discount | - | 870,268 | 870,268 | |||||||||||||||||
Realized credit losses | 1,005,426 | - | 1,005,426 | |||||||||||||||||
Ending balance at December 31, 2012 | $ | -12,929,231 | $ | -6,721,749 | $ | -19,650,980 | ||||||||||||||
Linked Repurchase Agreements | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Amount | Percent of total | Weighted average | Company RMBS | |||||||||||||||||
Repurchase Agreement Counterparties | Outstanding | amount outstanding | days to maturity | held as collateral | ||||||||||||||||
Citigroup Global Markets, Inc. | $ | 18,322,000 | 43.06 | % | 37 | $ | 26,391,996 | |||||||||||||
North America | 16,085,000 | 37.8 | % | 21 | 25,384,276 | |||||||||||||||
Asia (1) | 3,691,000 | 8.68 | % | 9 | 6,714,351 | |||||||||||||||
Europe | 3,284,000 | 7.72 | % | 11 | 5,670,285 | |||||||||||||||
Nomura Securities International, Inc. | 1,166,000 | 2.74 | % | 9 | 1,643,221 | |||||||||||||||
Total | $ | 42,548,000 | 100 | % | 26 | $ | 65,804,129 | |||||||||||||
(1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Amount | Percent of total | Weighted average | Company RMBS | |||||||||||||||||
Repurchase Agreement Counterparties | Outstanding | amount outstanding | days to maturity | held as collateral | ||||||||||||||||
North America | $ | 9,277,000 | 66.32 | % | 41 | $ | 13,714,701 | |||||||||||||
Asia (1) | 4,712,000 | 33.68 | % | 12 | 8,904,841 | |||||||||||||||
Total | $ | 13,989,000 | 100 | % | 31 | $ | 22,619,542 | |||||||||||||
(1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. | ||||||||||||||||||||
At September 30, 2013, Linked Transactions also included $21,207 of associated accrued interest receivable and $71,881 of accrued interest payable. | ||||||||||||||||||||
Income Statement Presentation | ||||||||||||||||||||
The Company has not applied hedge accounting to its current derivative portfolio held to mitigate the interest rate risk associated with its debt portfolio. As a result, the Company is subject to volatility in its earnings due to movement in the unrealized gains and losses associated with its interest rate swaps, swaptions and any other derivative instruments. | ||||||||||||||||||||
The following table summarizes the underlying hedged risks and the amount of gains and losses on derivative instruments reported net in the condensed consolidated statement of operations as realized gain (loss) on derivative contracts, net and unrealized loss on derivative contracts, net for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||||||||||
Amount of realized | Amount of unrealized | |||||||||||||||||||
Primary underlying risk | gain (loss) | appreciation (depreciation) | Total | |||||||||||||||||
Interest rate: | ||||||||||||||||||||
Interest rate swaps | $ | 8,874,459 | $ | -10,401,243 | $ | -1,526,784 | ||||||||||||||
Swaptions | -84,000 | 6,927 | -77,073 | |||||||||||||||||
Futures | -84,375 | 120,313 | 35,938 | |||||||||||||||||
TBAs | -304,688 | - | -304,688 | |||||||||||||||||
Total | $ | 8,401,396 | $ | -10,274,003 | $ | -1,872,607 | ||||||||||||||
Three Months Ended September 30, 2012 | ||||||||||||||||||||
Amount of realized | Amount of unrealized | |||||||||||||||||||
Primary underlying risk | gain (loss) | appreciation (depreciation) | Total | |||||||||||||||||
Interest rate: | ||||||||||||||||||||
Interest rate swaps | $ | - | $ | -55,175 | $ | -55,175 | ||||||||||||||
Swaptions | -16,000 | -9,674 | -25,674 | |||||||||||||||||
Total | $ | -16,000 | $ | -64,849 | $ | -80,849 | ||||||||||||||
Nine Months Ended September 30, 2013 | ||||||||||||||||||||
Amount of realized | Amount of unrealized | |||||||||||||||||||
Primary underlying risk | gain (loss) | appreciation (depreciation) | Total | |||||||||||||||||
Interest rate: | ||||||||||||||||||||
Interest rate swaps | $ | 20,050,632 | $ | -4,346,488 | $ | 15,704,144 | ||||||||||||||
Swaptions | -194,667 | 1,052,099 | 857,432 | |||||||||||||||||
Futures | -84,375 | 120,313 | 35,938 | |||||||||||||||||
TBAs | -304,688 | - | -304,688 | |||||||||||||||||
Total | $ | 19,466,902 | $ | -3,174,076 | $ | 16,292,826 | ||||||||||||||
Period May 16, 2012 to September 30, 2012 | ||||||||||||||||||||
Amount of realized | Amount of unrealized | |||||||||||||||||||
Primary underlying risk | gain (loss) | appreciation (depreciation) | Total | |||||||||||||||||
Interest rate: | ||||||||||||||||||||
Interest rate swaps | $ | - | $ | -281,431 | $ | -281,431 | ||||||||||||||
Swaptions | -21,333 | -17,528 | -38,861 | |||||||||||||||||
Total | $ | -21,333 | $ | -298,959 | $ | -320,292 | ||||||||||||||
The following table presents certain information about the components of the unrealized net gain (loss) and net interest income from Linked Transactions included in the Company’s condensed consolidated statement of operations for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||||
Interest income attributable to RMBS underlying Linked Transactions | $ | 1,343,494 | $ | 497,268 | ||||||||||||||||
Interest expense attributable to linked repurchase agreement | -204,940 | -70,378 | ||||||||||||||||||
borrowings underlying Linked Transactions | ||||||||||||||||||||
Change in fair value of Linked Transactions included in earnings | -1,293,467 | 3,126,257 | ||||||||||||||||||
Unrealized gain (loss) and net interest income from Linked Transactions | $ | -154,913 | $ | 3,553,147 | ||||||||||||||||
Nine Months Ended | Period May 16, 2012 to | |||||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||||
Interest income attributable to RMBS underlying Linked Transactions | $ | 2,408,250 | $ | 552,089 | ||||||||||||||||
Interest expense attributable to linked repurchase agreement | -388,995 | -85,217 | ||||||||||||||||||
borrowings underlying Linked Transactions | ||||||||||||||||||||
Change in fair value of Linked Transactions included in earnings | -1,907,350 | 3,263,738 | ||||||||||||||||||
Unrealized gain (loss) and net interest income from Linked Transactions | $ | 111,905 | $ | 3,730,610 | ||||||||||||||||
FINANCIAL_INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||
Financial Instruments Disclosure [Text Block] | ' | |||||||||||||
NOTE 8 – FINANCIAL INSTRUMENTS | ||||||||||||||
U.S. GAAP defines fair value and provides a consistent framework for measuring fair value under U.S. GAAP. ASC 820 “Fair Value Measurement” expands fair value financial statement disclosure requirements. ASC 820 does not require any new fair value measurements and only applies to accounting pronouncements that already require or permit fair value measures, except for standards that relate to share-based payments. | ||||||||||||||
Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels are defined as follows: | ||||||||||||||
• | Level 1 Inputs – Quoted prices for identical instruments in active markets. | |||||||||||||
• | Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. | |||||||||||||
• | Level 3 Inputs – Instruments with primarily unobservable value drivers. | |||||||||||||
The following tables summarize the valuation of the Company’s assets and liabilities at fair value within the fair value hierarchy levels as of September 30, 2013 and December 31, 2012: | ||||||||||||||
Quoted prices in | Significant | |||||||||||||
active markets | other observable | Unobservable | ||||||||||||
for identical assets | inputs | inputs | Balance as of | |||||||||||
Level 1 | Level 2 | Level 3 | September 30, 2013 | |||||||||||
Assets: | ||||||||||||||
Residential mortgage-backed securities (a) | $ | - | $ | 417,552,903 | $ | - | $ | 417,552,903 | ||||||
Linked transactions (b) | - | 23,205,354 | - | 23,205,354 | ||||||||||
Swaptions | - | 1,541,494 | - | 1,541,494 | ||||||||||
Futures | 120,313 | - | - | 120,313 | ||||||||||
Total | $ | 120,313 | $ | 442,299,751 | $ | - | $ | 442,420,064 | ||||||
Liabilities: | ||||||||||||||
Interest rate swaps | $ | - | $ | -4,630,242 | $ | - | $ | -4,630,242 | ||||||
Total | $ | - | $ | -4,630,242 | $ | - | $ | -4,630,242 | ||||||
Quoted prices in | Significant | |||||||||||||
active markets | other observable | Unobservable | ||||||||||||
for identical assets | inputs | inputs | Balance as of | |||||||||||
Level 1 | Level 2 | Level 3 | December 31, 2012 | |||||||||||
Assets: | ||||||||||||||
Residential mortgage-backed securities (a) | $ | - | $ | 81,027,998 | $ | - | $ | 81,027,998 | ||||||
Linked transactions (b) | - | 8,612,753 | - | 8,612,753 | ||||||||||
Swaptions | - | 12,062 | - | 12,062 | ||||||||||
Total | $ | - | $ | 89,652,813 | $ | - | $ | 89,652,813 | ||||||
Liabilities: | ||||||||||||||
Interest rate swaps | $ | - | $ | -283,754 | $ | - | $ | -283,754 | ||||||
Total | $ | - | $ | -283,754 | $ | - | $ | -283,754 | ||||||
(a) For more detail about the fair value of the Company’s RMBS and type of securities, see Note 3 and Note 4. | ||||||||||||||
(b) For more detail about the fair value of the Company’s Linked Transactions, see Note 3 and Note 7. | ||||||||||||||
During the nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to December 31, 2012, the Company did not have any transfers between any of the levels of the fair value hierarchy. Transfers between levels are deemed to take place on the last day of the reporting period in which the transfer takes place. | ||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company did not have any Level 3 securities. | ||||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
NOTE 9 – RELATED PARTY TRANSACTIONS | |
Management Fee | |
The Company is externally managed and advised by Oak Circle Capital Partners LLC (the “Manager”). Pursuant to the terms of the management agreement, the Company pays the Manager a management fee equal to 1.5% per annum, calculated and payable monthly in arrears. For purposes of calculating the management fee, the Company’s shareholders’ equity means the sum of the net proceeds from all issuances of the Company’s equity securities since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus the Company’s retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less any amount that the Company pays for repurchases of the Company’s common stock since inception, and excluding any unrealized gains, losses or other items that do not affect realized net income (regardless of whether such items are included in other comprehensive income or loss, or in net income). This amount will be adjusted to exclude one-time events pursuant to changes in GAAP and certain non-cash items after discussions between the Manager and the Company’s independent directors and approval by a majority of the Company’s independent directors. To the extent asset impairment reduces the Company’s retained earnings at the end of any completed calendar quarter, it will reduce the management fee for such quarter. The Company’s shareholders’ equity for the purposes of calculating the management fee could be greater than the amount of shareholders’ equity shown on the financial statements. The initial term of the management agreement expires on May 16, 2014, with automatic, one-year renewals at the end of the initial term and each year thereafter. | |
For the three months ended September 30, 2013, the Company incurred management fees of $413,164 of which $137,721 was accrued but had not been paid. | |
For the nine months ended September 30, 2013, the Company incurred management fees of $941,166 of which $137,721 was accrued but had not been paid. | |
Expense Reimbursement | |
Pursuant to the management agreement, the Company is required to reimburse the Manager for operating expenses related to the Company incurred by the Manager, including accounting services, auditing and tax services, technology and office facilities, operations, compliance, legal and filing fees, and miscellaneous general and administrative costs, including the cost of non-investment management personnel of the Manager who spend all or a portion of their time managing the Company’s affairs. | |
For the three months ended September 30, 2013, the Company incurred reimbursable expenses of $634,001. | |
For the nine months ended September 30, 2013, the Company incurred reimbursable expenses of $1,542,099. The Manager incurred additional reimbursable expenses of $227,341 for which it has permanently waived its right to seek reimbursement from the Company. | |
Pursuant to an Expense Reimbursement Agreement dated March 12, 2013, the Manager agreed to reimburse the Company for offering expenses in excess of $1,500,000 incurred in connection with the Company’s initial public offering (“IPO”). The Manager has agreed permanently to waive any right to seek future reimbursement for such expenses paid by it to the Company. As further described in Note 10, the Company closed its IPO in March 2013. Accordingly, the Manager reimbursed to the Company an amount of $1,139,703 during the second quarter. | |
Manager Equity Plan | |
The Company has adopted a Manager Equity Plan under which the Company may compensate the Manager or, at the direction of the Manager and as determined in its sole discretion, directly to its directors, officers, employees or consultants. The Manager will make all determinations concerning the eligible persons employed or otherwise engaged by it who may receive awards under the Manager Equity Plan, which form the awards will take, and the terms and conditions of the awards. The Company will be able to issue under the Manager Equity Plan up to 3.0% of the total number of issued and outstanding shares of common stock (on a fully diluted basis) at the time of each award. | |
Stock based compensation arrangements may include incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock awards and other awards based on the Company’s common stock. | |
Under the Manager Equity Plan, the Company’s independent directors, as part of their compensation for serving as independent directors, are eligible to receive 1,500 shares of restricted stock annually vesting in full on the anniversary of each grant date. As of the closing of the IPO, the Company’s board of directors granted to each of the three independent directors 1,500 shares of restricted common stock (4,500 shares in total), each of which vest in full on the first anniversary of the grant date. The grant date fair value of these restricted shares was $65,250 based on the closing price of the Company’s common stock on March 27, 2013 of $14.50. | |
As of the closing of the IPO described in Note 10, the Company’s board of directors granted the Manager 28,500 shares of restricted common stock. One-third of these restricted common stock shares vest on each of the first, second and third anniversaries of the grant date. The fair value of these restricted shares was $324,045 based on the closing price of the Company’s common stock on September 30, 2013 of $11.37. The Company accounts for the restricted common stock shares based on their aggregate fair value at the measurement dates and as this value subsequently changes, a cumulative adjustment is made in the current period for prior compensation cost expenses recorded to date. | |
For the three and nine months ended September 30, 2013, the Company recognized compensation expense related to restricted common stock of $39,229 and $89,193, respectively. The Company has unrecognized compensation expense of $300,102 as of September 30, 2013 for unvested shares of restricted common stock. As of September 30, 2013, the weighted average period for which the unrecognized compensation expense will be recognized is 16.3 months. | |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | |||||||||||
NOTE 10 – STOCKHOLDERS’ EQUITY | ||||||||||||
Private Placements of Common Stock | ||||||||||||
On May 16, 2012, the Company completed a private offering in which the Company sold 1,500,000 shares of common stock to the Manager at a price of $1.00 per share and sold 25,000,000 shares to XL Investments Ltd., at a price of $1.00 per share. The net proceeds to the Company from this private offering were $26,177,089 after payment of $322,911 in direct costs of the offering. The Company did not pay any underwriting discounts or commissions in connection with the private offering. | ||||||||||||
Immediately prior to the IPO described below, the Company completed a one-for-16 reverse stock split of the 26,500,000 issued and outstanding shares of common stock, thereby reducing the amount of issued and outstanding shares of common stock to 1,656,250 prior to the IPO. | ||||||||||||
Concurrently with the IPO, XL Investments Ltd. purchased 1,666,667 shares of common stock at the IPO price of $15 per share in an aggregate amount of $25,000,000 as a private placement. | ||||||||||||
Ownership and Warrants | ||||||||||||
As a result of the May 2012 and March 2013 private offerings of common stock described above, XL Investments Ltd., an indirectly wholly owned subsidiary of XL Group plc, owns a significant minority investment in the Company. Pursuant to the terms of the May 2012 private offering, the Company agreed to issue to XL Investments Ltd. warrants to purchase the Company’s common stock. The warrants were subsequently issued, effective as of September 29, 2012, and entitle XL Investments, commencing on July 25, 2013 (120 days following the closing of our IPO) to purchase an aggregate of 3,125,000 shares of our common stock at a per share exercise price equal to 105% of the $15.00 IPO price, or $15.75. XL Global, Inc., a subsidiary of XL Group plc, holds a minority stake in the Manager. | ||||||||||||
Initial Public Offering of Common Stock | ||||||||||||
On March 27, 2013, the Company issued 4,033,333 shares of common stock for $15.00 per share for an aggregate offering price of $60,500,000. Net proceeds to the Company were $59,000,000, net of issuance costs of $1,500,000 million. | ||||||||||||
The Manager paid the underwriters at closing of the IPO $0.60 per share for each share sold in the IPO, representing the full underwriting discount payable with respect to the shares sold in the IPO. The underwriters did not receive any discount on the shares purchased in the concurrent private placement by XL Investments Ltd. | ||||||||||||
Preferred Stock | ||||||||||||
On January 22, 2013, the Company issued 100 shares of 12.5% Cumulative Non-Voting Redeemable Preferred Stock (“preferred stock”), to 100 investors at $1,000 per share in connection with the Company’s REIT qualification under the Internal Revenue Code. The net proceeds to the Company from this issuance were $67,500 after the deduction of initial set-up, funding and administration fees. The preferred stock was not convertible into common stock and was subject to redemption at any time by the Company at $1,100 per share (plus all accrued and unpaid dividends), provided that the preferred stock is redeemed prior to December 31, 2014. | ||||||||||||
The preferred stock was fully redeemed on March 28, 2013 by the Company at $1,100 per share, or $110,000 in aggregate, and $2,326 was paid by the Company in accrued dividends through the date of redemption. | ||||||||||||
Distributions to stockholders | ||||||||||||
For the 2013 taxable year, the Company has declared dividends to common stockholders totaling $7,311,903, or $1.28 per share. The following table presents cash dividends declared by the Company on its common stock for the nine months ended September 30, 2013: | ||||||||||||
Declaration Date | Record Date | Payment Date | Dividend Amount | Cash Dividend Per Share | ||||||||
15-Feb-13 | 15-Feb-13 | 27-Feb-13 | $ | 219,950 | $ | 0.03853 | ||||||
12-Mar-13 | 12-Mar-13 | 28-Mar-13 | $ | 219,950 | $ | 0.03853 | ||||||
22-Apr-13 | 22-Apr-13 | 29-Apr-13 | $ | 960,603 | $ | 0.16825 | ||||||
22-Apr-13 | 15-May-13 | 30-May-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
22-Apr-13 | 14-Jun-13 | 27-Jun-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
17-Jun-13 | 15-Jul-13 | 30-Jul-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
17-Jun-13 | 15-Aug-13 | 29-Aug-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
17-Jun-13 | 16-Sep-13 | 27-Sep-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
For the 2013 taxable year, the Company has declared dividends to preferred stockholders totaling $2,326, or $23.26 per share. | ||||||||||||
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Earnings Per Share [Text Block] | ' | |||||||
NOTE 11 – EARNINGS PER SHARE | ||||||||
In accordance with ASC 260, outstanding instruments that contain rights to nonforfeitable dividends are considered participating securities. The Company is required to apply the most dilutive of either the two-class method or the treasury stock method of computing basic and diluted earnings per share when there are participating securities outstanding. The Company has determined that outstanding unvested restricted shares issued under the Manager Equity Plan are participating securities. The following table provides additional disclosure regarding the computation for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||
Three Months Ended | Three Months Ended | |||||||
September 30, 2013 | September 30, 2012 | |||||||
Numerator (Income): | ||||||||
Net income (loss) available to common shareholders | $ | -17,014,568 | $ | 3,656,161 | ||||
Dilutive net income (loss) attributable to common shareholders | $ | -17,014,568 | $ | 3,656,161 | ||||
Denominator (Weighted Average Shares): | ||||||||
Basic Earnings: | ||||||||
Shares available to common shareholders | 7,356,250 | 1,656,250 | ||||||
Effect of dilutive securities: | ||||||||
Restricted share awards | 4,100 | - | ||||||
Dilutive shares | 7,360,350 | 1,656,250 | ||||||
Nine Months Ended | Period May 16, 2012 | |||||||
September 30, 2013 | to September 30, 2012 | |||||||
Numerator (Income): | ||||||||
Net income (loss) available to common shareholders | $ | -7,518,400 | $ | 3,441,901 | ||||
Dilutive net income (loss) attributable to common shareholders | $ | -7,518,400 | $ | 3,441,901 | ||||
Denominator (Weighted Average Shares): | ||||||||
Basic Earnings: | ||||||||
Shares available to common shareholders | 5,685,920 | 1,656,250 | ||||||
Effect of dilutive securities: | ||||||||
Restricted share awards | 9,961 | - | ||||||
Dilutive shares | 5,695,881 | 1,656,250 | ||||||
The following potential common shares were excluded from basic and diluted earnings per share for the three months ended September 30, 2013 as the Company had a net loss for the period: 28,900 for Restricted Stock Awards. | ||||||||
No adjustment was required for the calculation of diluted earnings per share for the warrants described in Note 9 because the warrants’ exercise price is greater than the average market price of the common shares for the period, and thereby anti-dilutive. | ||||||||
SEGMENT_REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2013 | |
Segment Reporting [Abstract] | ' |
Segment Reporting Disclosure [Text Block] | ' |
NOTE 12 – SEGMENT REPORTING | |
The Company invests in a portfolio comprised of mortgage-backed securities which operates as a single reporting segment. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation | |
The condensed balance sheet as of December 31, 2012 has been derived from audited financial statements. The condensed consolidated balance sheet as of September 30, 2013, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income (loss), the condensed consolidated statements of stockholders’ equity and the condensed consolidated statements of cash flows, for the three and nine months ended September 30, 2013, and for the three months ended September 30, 2012 and for the period May 16, 2012 (commencement of operations) to September 30, 2012, are unaudited. | |
The unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form S-11 for the period May 16, 2012 (commencement of operations) to December 31, 2012, which was filed with the Securities and Exchange Commission (“SEC”). | |
The condensed consolidated financial statements of the Company include the accounts of its subsidiary. | |
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | ' |
Variable Interest Entities | |
An entity is referred to as a variable interest entity ("VIE") if it lacks one or more of the following characteristics: (1) sufficient equity at risk to finance its activities without additional subordinated financial support provided by any parties, including the equity holders; (2) as a group the holders of the equity investment at risk have (a) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impacts the entity's economic performance, (b) the obligation to absorb the expected losses of the legal entity and (c) the right to receive the expected residual returns of the legal entity; and (3) the voting rights of these investors are proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected returns of their equity, or both, and whether substantially all of the entity's activities involve or are conducted on behalf of an investor that has disproportionately fewer voting rights. An investment that lacks one or more of the above three characteristics is considered to be a VIE. The Company reassesses its initial evaluation of an entity as a VIE based upon changes in the facts and circumstances pertaining to the VIE.. | |
VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE is determined to be the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses of the entity that could potentially be significant to, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. This determination may involve complex and subjective analyses. | |
The Company has evaluated its non-Agency RMBS investments to determine if each represents a variable interest in a VIE. The Company monitors these investments and analyzes them for potential consolidation. The Company's non-Agency RMBS investments represent variable interests in VIEs. At September 30, 2013 and December 31, 2012, no VIEs required consolidation as the Company was not the primary beneficiary of any of these VIEs. At September 30, 2013 and December 31, 2012, the maximum exposure of the Company to VIEs is limited to the fair value of its investments in non-Agency RMBS as disclosed in the consolidated balance sheets. | |
Use of Estimates, Policy [Policy Text Block] | ' |
Use of Estimates | |
The financial statements have been prepared on the accrual basis of accounting in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities, amount and timing of credit losses, prepayment rates, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates (e.g., valuation changes due to supply and demand, credit performance, prepayments, interest rates, or other reasons) will occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ from its estimates and the differences may be material. | |
Cash and Cash Equivalents, Policy [Policy Text Block] | ' |
Cash and Cash Equivalents | |
Cash and cash equivalents include cash held on deposit with financial institutions and money market deposit accounts, all of which have original maturities of three months or less. The Company maintains its cash and cash equivalents in highly rated financial institutions, and at times these balances exceed insurable amounts. | |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | ' |
Restricted Cash | |
Restricted cash represents the Company’s cash held by counterparties as collateral against the Company’s securities, derivatives and/or repurchase agreements, together with cash invested in FOAC to support a minimum capital requirement in connection with certain state licensing requirements. Cash held by counterparties as collateral is not available to the Company for general corporate purposes, but may be applied against amounts due to securities, derivatives or repurchase counterparties or returned to the Company when the collateral requirements are exceeded or, at the maturity of the derivative or repurchase agreement. | |
Deferred Offering Costs, Policy [Policy Text Block] | ' |
Deferred Offering Costs | |
In accordance with Accounting Standards Codification (“ASC”) Subtopic 505-10, the direct costs incurred to issue shares classified as equity, such as legal and accounting fees, should be deducted from the related proceeds and the net amount recorded as stockholders’ equity. Accordingly, payments made by the Company in respect of such costs related to the issuance of shares were recorded as an asset in the accompanying balance sheet in the line item “Deferred offering costs”, for subsequent deduction from the related proceeds upon closing of the offering. | |
To the extent that certain costs, in particular legal fees, are known to have been accrued but have not yet been invoiced and paid, they are included in “Other accounts payable and accrued expenses” on the accompanying condensed consolidated balance sheet. | |
Upon closing of the initial public offering and concurrent private placement of shares, all “Deferred offering costs” previously recorded as an asset on the Company’s condensed consolidated balance sheet have been reclassified. As further described in Note 9 – Related Party Transactions, an amount of $1,500,000 was deducted from proceeds of the related issuances, and the balance of offering costs in the amount of $1,139,703 was reimbursed to the Company by the Manager. | |
Repurchase and Resale Agreements Policy [Policy Text Block] | ' |
Repurchase Agreements | |
The Company finances the acquisition of certain of its mortgage-backed securities through the use of repurchase agreements. The repurchase agreements are generally short-term debt, which expire within one year. Borrowings under repurchase agreements generally bear interest rates at a specified margin over LIBOR and are generally uncommitted. In accordance with ASC 860 “Transfers and Servicing” the Company accounts for the repurchase agreements, other than those treated as Linked Transactions (see Note 3 – Accounting for Derivative Financial Instruments – Non-Hedging Activity/Linked Transactions below), as collateralized financing transactions and they are carried at their contractual amounts, as specified in the respective agreements. The contractual amounts approximate fair value due to their short-term nature. | |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue Recognition, Premium Amortization, and Discount Accretion | |
Interest income on the Company’s portfolio is accrued based on the actual coupon rate and the outstanding principal balance of such securities. The Company recognizes interest income using the effective interest method for all securities. As such, premiums and discounts are amortized or accreted into interest income over the lives of the securities in accordance with ASC 310-20, “Nonrefundable Fees and Other Costs”, ASC 320-10, “Investments – Debt and Equity Securities” or ASC 325-40, “Beneficial Interests in Securitized Financial Assets”, as applicable. Total interest income will flow though the “Interest Income” line item on the condensed consolidated statement of operations. | |
On at least a quarterly basis for securities accounted for under ASC 320-10 and ASC 310-20 (generally Agency RMBS), prepayments of the underlying collateral must be estimated, which directly affect the speed at which the Company amortizes such securities. If actual and anticipated cash flows differ from previous estimates; the Company recognizes a “catch-up” adjustment in the current period to the amortization of premiums for the impact of the cumulative change in the effective yield through the reporting date. | |
Similarly, the Company also reassesses the cash flows on at least a quarterly basis for securities accounted for under ASC 325-40 (generally non-Agency RMBS). In estimating these cash flows, there are a number of assumptions that will be subject to uncertainties and contingencies. These include the rate and timing of principal and interest receipts (including assumptions of prepayments, repurchases, defaults and liquidations), the pass-through or coupon rate and interest rate fluctuations. In addition, interest payment shortfalls due to delinquencies on the underlying mortgage loans have to be judgmentally estimated. Differences between previously estimated cash flows and current actual and anticipated cash flows are recognized prospectively through an adjustment of the yield over the remaining life of the security based on the current amortized cost of the investment as adjusted for credit impairment, if any. | |
For investments purchased with evidence of deterioration of credit quality for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments receivable, the Company will apply the provisions of ASC 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality.” ASC 310-30 addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investor’s initial investment in loans or debt securities (loans) acquired in a transfer if those differences are attributable, at least in part, to credit quality. ASC 310-30 limits the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest and other cash flows (cash flows expected at acquisition to be collected) over the investor’s initial investment in the loan. ASC 310-30 requires that the excess of contractual cash flows over cash flows expected to be collected (nonaccretable difference) not be recognized as an adjustment of yield, loss accrual or valuation allowance. Subsequent increases in cash flows expected to be collected are generally recognized prospectively through adjustment of the loan’s yield over its remaining life. Decreases in cash flows expected to be collected are recognized as impairment. | |
The Company’s accrual of interest, discount and premium for U.S. federal and other tax purposes is likely to differ from the financial accounting treatment of these items as described above. | |
Gains and losses from the sale of available-for-sale securities (“AFS”) are recorded as realized gains (losses) within realized loss on sale of investments, net in the Company's condensed consolidated statement of operations. Upon the sale of a security, the Company will determine the cost of the security and the amount of unrealized gains or losses to reclassify out of accumulated other comprehensive income (loss) into earnings based on the specific identification method. Unrealized gains and losses on the Company’s AFS securities are recorded as unrealized gain (loss) on available-for-sale securities, net in the Company's condensed consolidated statement of comprehensive income (loss). | |
Property, Plant and Equipment, Impairment [Policy Text Block] | ' |
Impairment | |
The Company evaluates its RMBS, on a quarterly basis, to assess whether a decline in the fair value of an AFS security below the Company's amortized cost basis is an other-than-temporary impairment (“OTTI”). The presence of OTTI is based upon a fair value decline below a security's amortized cost basis and a corresponding adverse change in expected cash flows due to credit related factors as well as non-credit factors, such as changes in interest rates and market spreads. Impairment is considered other-than-temporary if an entity (i) intends to sell the security, (ii) will more likely than not be required to sell the security before it recovers in value or (iii) does not expect to recover the security's amortized cost basis, even if the entity does not intend to sell the security. Under these scenarios, the impairment is other-than-temporary and the full amount of impairment should be recognized currently in earnings and the cost basis of the investment security is adjusted. However, if an entity does not intend to sell the impaired debt security and it is more likely than not that it will not be required to sell before recovery, the OTTI should be separated into (i) the estimated amount relating to credit loss (“credit” component) and (ii) the amount relating to all other factors (“non-credit” component). Only the estimated credit loss amount is recognized currently in earnings, with the remainder of the loss amount recognized in other comprehensive income. The difference between the new amortized cost basis and the cash flows expected to be collected is accreted as interest income in accordance with the effective interest method. | |
Income Tax, Policy [Policy Text Block] | ' |
Income Taxes | |
The Company has elected to be taxed as a REIT under the Code for U.S. federal income tax purposes, commencing with the Company’s short taxable period ended December 31, 2012. So long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes at least 90% of its net taxable income to shareholders and maintains its intended qualification as a REIT. | |
In addition to the Company’s election to be taxed as a REIT, the Company complies with Sections 856 through 859 of the Code. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. To maintain its qualification as a REIT, the Company must distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. The Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company believes it will meet all of the criteria to maintain the Company's REIT qualification for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods. | |
The Company does not have any material uncertain tax positions at this time. The Company's accounting policy with respect to interest and penalties is to classify these amounts as interest expense. The Company has not recognized any such amounts related to uncertain tax positions as of the balance sheet date. | |
Earnings Per Share, Policy [Policy Text Block] | ' |
Earnings per Share | |
The Company calculates basic and diluted earnings per share by dividing net income attributable to common stockholders for the period by the weighted-average shares of the Company’s common stock outstanding for that period. Diluted earnings per share takes into account the effect of dilutive instruments, such as warrants, stock options, and unvested restricted stock, but use the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. See Note 11 for details of the computation of basic and diluted earnings per share. | |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' |
Stock-Based Compensation | |
The Company is required to recognize compensation costs relating to stock-based payment transactions in the financial statements. The Company accounts for share-based compensation issued to its Manager and non-management directors using the fair value based methodology prescribed by ASC 718, Share-Based Payment (“ASC 718”). Compensation cost related to restricted common stock issued to the Manager is initially measured at estimated fair value at the grant date, and is remeasured on subsequent dates to the extent the awards are unvested. Additionally, compensation cost related to restricted common stock issued to the non-management directors is measured at its estimated fair value at the grant date and amortized and expensed over the vesting period. See Note 9 for details of stock-based awards issuable under the Manager Equity Plan. | |
Comprehensive Income, Policy [Policy Text Block] | ' |
Comprehensive Income (Loss) | |
Comprehensive income (loss) is comprised of net income (loss), as presented in the condensed consolidated statement of comprehensive income (loss), adjusted for changes in unrealized gain or loss on AFS securities. | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
Recent Accounting Pronouncements Adopted | |
In December 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-11, which amends ASC 210, “Balance Sheet”. The amendments in this ASU enhance disclosures required by U.S. GAAP by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with ASC 210, Balance Sheet or ASC 815, Other Presentation Matters or (2) subject to an enforceable master netting arrangement or similar agreement. ASU No. 2011-11 is effective for the first interim or annual period beginning on or after January 1, 2013. The Company adopted ASU No. 2011-11 for the nine months ended September 30, 2013 and this had no material impact on the Company’s financial condition or results of operations other than enhanced disclosure in the condensed consolidated notes to financial statements. | |
In January 2013, FASB issued ASU No. 2013-01, which amends ASU No. 2011-11. The amendments clarify that the scope of ASU No. 2011-11 applies to derivatives accounted for in accordance with ASC 815, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are offset in accordance with ASC 210 or subject to an enforceable master netting arrangement or similar agreements. ASU No. 2013-01 is effective the same date as ASU No. 2011-11. The Company adopted ASU No. 2013-01 for the nine months ended September 30, 2013 and this had no material impact on the Company’s financial condition or results of operations other than enhanced disclosure in the condensed consolidated notes to financial statements. | |
In February 2013, FASB issued ASU No. 2013-02, which amends FASB ASC 220 “Comprehensive Income”. The amendments in this ASU require an entity to provide information about any amounts reclassified out of accumulated other comprehensive income by component. An entity is required to present, either on the face of the statement where net income is presented or in the condensed consolidated notes to financial statements, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU No. 2013-02 is effective for reporting periods beginning after December 15, 2012 for public entities. The Company adopted ASU No. 2013-02 for the nine months ended September 30, 2013 and this had no material impact on the Company’s financial condition or results of operations. | |
AVAILABLEFORSALE_SECURITIES_Ta
AVAILABLE-FOR-SALE SECURITIES (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||||||
Available-for-sale Securities [Table Text Block] | ' | |||||||||||||||||||
The following table presents the Company’s AFS investment securities by collateral type at fair value as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
Agency | ||||||||||||||||||||
Federal Home Loan Mortgage Corporation | $ | 151,331,577 | $ | 49,765,271 | ||||||||||||||||
Federal National Mortgage Association | 208,518,840 | 20,208,333 | ||||||||||||||||||
Non-Agency | 57,702,486 | 11,054,394 | ||||||||||||||||||
Total mortgage-backed securities | $ | 417,552,903 | $ | 81,027,998 | ||||||||||||||||
Schedule Of Available-For-Sale Securities Reconciliation [Table Text Block] | ' | |||||||||||||||||||
The following tables present the amortized cost and fair value of the Company’s AFS investment securities by collateral type as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Agency | Non-Agency | Total | ||||||||||||||||||
Face Value | $ | 357,111,292 | $ | 93,841,342 | $ | 450,952,634 | ||||||||||||||
Unamortized premium | 12,854,666 | - | 12,854,666 | |||||||||||||||||
Unamortized discount | ||||||||||||||||||||
Designated credit reserve | - | -15,967,512 | -15,967,512 | |||||||||||||||||
Net, unamortized | -1,614,616 | -21,166,734 | -22,781,350 | |||||||||||||||||
Amortized Cost | 368,351,342 | 56,707,096 | 425,058,438 | |||||||||||||||||
Gross unrealized loss | -8,500,925 | 995,390 | -7,505,535 | |||||||||||||||||
Fair Value | $ | 359,850,417 | $ | 57,702,486 | $ | 417,552,903 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Agency | Non-Agency | Total | ||||||||||||||||||
Face Value | $ | 65,310,197 | $ | 18,507,380 | $ | 83,817,577 | ||||||||||||||
Unamortized premium | 3,193,345 | - | 3,193,345 | |||||||||||||||||
Unamortized discount | ||||||||||||||||||||
Designated credit reserve | - | -4,882,582 | -4,882,582 | |||||||||||||||||
Net, unamortized | - | -3,534,339 | -3,534,339 | |||||||||||||||||
Amortized Cost | 68,503,542 | 10,090,459 | 78,594,001 | |||||||||||||||||
Gross unrealized gain | 1,470,062 | 963,935 | 2,433,997 | |||||||||||||||||
Fair Value | $ | 69,973,604 | $ | 11,054,394 | $ | 81,027,998 | ||||||||||||||
Schedule of Realized Gain (Loss) [Table Text Block] | ' | |||||||||||||||||||
The following tables present a summary of the Company’s net realized gain (loss) from the sale of Agency and non-Agency RMBS for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||||
Agency and non-Agency RMBS sold, at cost | $ | 348,566,209 | $ | - | ||||||||||||||||
Proceeds from Agency and non-Agency RMBS sold | 331,913,127 | - | ||||||||||||||||||
Net realized gain (loss) on sale of Agency and non-Agency RMBS | $ | -16,653,082 | $ | - | ||||||||||||||||
Nine Months Ended | Period May 16, 2012 | |||||||||||||||||||
September 30, 2013 | to September 30, 2012 | |||||||||||||||||||
Agency and non-Agency RMBS sold, at cost | $ | 717,350,126 | $ | - | ||||||||||||||||
Proceeds from Agency and non-Agency RMBS sold | 687,252,011 | - | ||||||||||||||||||
Net realized gain (loss) on sale of Agency and non-Agency RMBS | $ | -30,098,115 | $ | - | ||||||||||||||||
Schedule Of Available For Sale Securities By Rate Type [Table Text Block] | ' | |||||||||||||||||||
The following tables present the fair value of AFS investment securities by rate type as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Agency | Non-Agency | Total | ||||||||||||||||||
Adjustable rate | $ | 139,130,999 | $ | 57,702,486 | $ | 196,833,485 | ||||||||||||||
Fixed rate | 220,719,418 | - | 220,719,418 | |||||||||||||||||
Total | $ | 359,850,417 | $ | 57,702,486 | $ | 417,552,903 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Agency | Non-Agency | Total | ||||||||||||||||||
Adjustable rate | $ | - | $ | 11,054,394 | $ | 11,054,394 | ||||||||||||||
Fixed rate | 69,973,604 | - | 69,973,604 | |||||||||||||||||
Total | $ | 69,973,604 | $ | 11,054,394 | $ | 81,027,998 | ||||||||||||||
Schedule Of Investments In Debt and Marketable Equity Securities and Certain Trading Assets Disclosure [Table Text Block] | ' | |||||||||||||||||||
The following tables present the changes for the nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to December 31, 2012 of the unamortized net discount and designated credit reserves on non-Agency AFS securities. | ||||||||||||||||||||
30-Sep-13 | ||||||||||||||||||||
Designated | Unamortized | |||||||||||||||||||
credit reserve | net discount | Total | ||||||||||||||||||
Acquisitions | $ | -18,378,288 | $ | -24,450,562 | $ | -42,828,850 | ||||||||||||||
Accretion of net discount | - | 1,663,450 | 1,663,450 | |||||||||||||||||
Realized gain on paydowns | - | 5,762 | 5,762 | |||||||||||||||||
Realized credit losses | 1,755,001 | - | 1,755,001 | |||||||||||||||||
Release of credit reserves | 655,775 | - | 655,775 | |||||||||||||||||
Ending balance at September 30, 2013 | $ | -15,967,512 | $ | -22,781,350 | $ | -38,748,862 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Designated | Unamortized | |||||||||||||||||||
credit reserve | net discount | Total | ||||||||||||||||||
Acquisitions | $ | -5,363,444 | $ | -3,997,817 | $ | -9,361,261 | ||||||||||||||
Accretion of net discount | - | 463,478 | 463,478 | |||||||||||||||||
Realized credit losses | 480,862 | - | 480,862 | |||||||||||||||||
Ending balance at December 31, 2012 | $ | -4,882,582 | $ | -3,534,339 | $ | -8,416,921 | ||||||||||||||
Investment Income [Table Text Block] | ' | |||||||||||||||||||
The following tables present components of interest income on the Company’s Agency RMBS and non-Agency RMBS for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||||||||||||||
Three Months Ended September 30, 2013 | Three Months Ended September 30, 2012 | |||||||||||||||||||
Net (premium | Net (premium | |||||||||||||||||||
Coupon | amortization)/ | Interest | Coupon | amortization)/ | Interest | |||||||||||||||
interest | discount accretion | income | interest | discount accretion | income | |||||||||||||||
Agency | $ | 3,472,373 | $ | -58,281 | $ | 3,414,092 | $ | 535,560 | $ | -73,451 | $ | 462,109 | ||||||||
Non-Agency | 45,010 | 879,346 | 924,356 | 28,859 | 225,528 | 254,387 | ||||||||||||||
Total | $ | 3,517,383 | $ | 821,065 | $ | 4,338,448 | $ | 564,419 | $ | 152,077 | $ | 716,496 | ||||||||
Nine Months Ended September 30, 2013 | Period May 16, 2012 to September 30, 2012 | |||||||||||||||||||
Net (premium | Net (premium | |||||||||||||||||||
Coupon | amortization)/ | Interest | Coupon | amortization)/ | Interest | |||||||||||||||
interest | discount accretion | income | interest | discount accretion | income | |||||||||||||||
Agency | $ | 13,878,581 | $ | -713,094 | $ | 13,165,487 | $ | 710,165 | $ | -90,166 | $ | 619,999 | ||||||||
Non-Agency | 138,050 | 1,620,889 | 1,758,939 | 28,859 | 225,528 | 254,387 | ||||||||||||||
Total | $ | 14,016,631 | $ | 907,795 | $ | 14,924,426 | $ | 739,024 | $ | 135,362 | $ | 874,386 | ||||||||
RESTRICTED_CASH_Tables
RESTRICTED CASH (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Cash and Cash Equivalents [Abstract] | ' | |||||||
Schedule of Restricted Cash and Cash Equivalents [Table Text Block] | ' | |||||||
The following table presents the Company's restricted cash balances as of September 30, 2013 and December 31, 2012: | ||||||||
Restricted cash balance held by: | ||||||||
Broker counterparties for derivatives trading | $ | 11,936,026 | $ | 570,247 | ||||
Repurchase counterparties as restricted collateral | 1,725,632 | 1,363,143 | ||||||
FOAC as minimum required capital | 30,000 | - | ||||||
Total | $ | 13,691,658 | $ | 1,933,390 | ||||
REPURCHASE_AGREEMENTS_Tables
REPURCHASE AGREEMENTS (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure Of Repurchase Agreements [Abstract] | ' | |||||||||||||
Schedule of Repurchase Agreements [Table Text Block] | ' | |||||||||||||
The following table summarizes certain characteristics of the Company’s repurchase agreements at September 30, 2013 and December 31, 2012: | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Weighted | Weighted | |||||||||||||
Amount | average | Amount | average | |||||||||||
outstanding | interest rate | outstanding | interest rate | |||||||||||
Agency | $ | 338,846,000 | 0.39 | % | $ | 59,616,000 | 0.48 | % | ||||||
Non-Agency(1) | 38,198,000 | 2.09 | % | 3,807,000 | 2.31 | % | ||||||||
Total | $ | 377,044,000 | 0.56 | % | $ | 63,423,000 | 0.59 | % | ||||||
(1) At September 30, 2013 and December 31, 2012, the Company had repurchase agreements of $42,548,000 and $13,989,000, respectively, that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3). | ||||||||||||||
Schedule Of Remaining Maturities Under Repurchase Agreement [Table Text Block] | ' | |||||||||||||
At September 30, 2013 and December 31, 2012, the repurchase agreements had the following remaining maturities: | ||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
< 30 days | $ | 315,000,000 | $ | 59,616,000 | ||||||||||
31 to 60 days | 62,044,000 | 3,807,000 | ||||||||||||
Total | $ | 377,044,000 | $ | 63,423,000 | ||||||||||
(1) At September 30, 2013 and December 31, 2012, the Company had repurchase agreements of $42,548,000 and $13,989,000, respectively, that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3). | ||||||||||||||
Schedule of Repurchase Agreement Counterparties with Whom Repurchase Agreements Exceed 10 Percent of Stockholders' Equity [Table Text Block] | ' | |||||||||||||
The following tables summarize certain characteristics of the Company’s repurchase agreements at September 30, 2013 and December 31, 2012: | ||||||||||||||
September 30, 2013 | ||||||||||||||
Amount | Percent of total | Weighted average | Company RMBS | |||||||||||
Repurchase Agreement Counterparties | Outstanding(1) | amount outstanding | days to maturity | held as collateral | ||||||||||
North America | $ | 184,744,000 | 49 | % | 18 | $ | 196,351,333 | |||||||
Asia (2) | 81,235,000 | 21.54 | % | 34 | 86,361,215 | |||||||||
Europe (2) | 53,791,000 | 14.27 | % | 23 | 61,033,655 | |||||||||
Nomura Securities International, Inc. | 45,577,000 | 12.09 | % | 20 | 56,260,079 | |||||||||
Citigroup Global Markets, Inc. | 11,697,000 | 3.1 | % | 33 | 17,546,621 | |||||||||
Total | $ | 377,044,000 | 100 | % | 23 | $ | 417,552,903 | |||||||
(1) At September 31, 2013, the Company had repurchase agreements of $42,548,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3). | ||||||||||||||
(2) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. | ||||||||||||||
December 31, 2012 | ||||||||||||||
Amount | Percent of total | Weighted average | Company RMBS | |||||||||||
Repurchase Agreement Counterparties | Outstanding(1) | amount outstanding | days to maturity | held as collateral | ||||||||||
North America | $ | 52,874,000 | 83.37 | % | 17 | $ | 55,462,506 | |||||||
Asia (2) | 10,549,000 | 16.63 | % | 18 | 10,874,574 | |||||||||
Total | $ | 63,423,000 | 100 | % | 17 | $ | 66,337,080 | |||||||
(1) At December 31, 2012, the Company had repurchase agreements of $13,989,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3). | ||||||||||||||
(2) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. | ||||||||||||||
DERIVATIVE_INSTRUMENTS_HEDGING1
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
Derivative Instrument Detail [Abstract] | ' | |||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | ' | |||||||||||||||||||
The following tables present the gross fair value and notional amounts of the Company’s derivative financial instruments as of September 30, 2013 and December 31, 2012. The Company’s Linked Transactions are evaluated on a combined basis. | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||
Fair value | Notional | Fair value | Notional | |||||||||||||||||
Interest rate swaps | $ | - | - | $ | -4,630,242 | 338,000,000 | ||||||||||||||
Swaptions | 1,541,494 | 25,000,000 | - | - | ||||||||||||||||
Futures | 120,313 | 20,000,000 | - | - | ||||||||||||||||
Linked transactions | 23,205,354 | - | - | - | ||||||||||||||||
Total | $ | 24,867,161 | 45,000,000 | $ | -4,630,242 | 338,000,000 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||
Fair value | Notional | Fair value | Notional | |||||||||||||||||
Interest rate swaps | $ | - | - | $ | -283,754 | 35,000,000 | ||||||||||||||
Swaptions | 12,062 | 5,000,000 | - | - | ||||||||||||||||
Linked transactions | 8,612,753 | - | - | - | ||||||||||||||||
Total | $ | 8,624,815 | 5,000,000 | $ | -283,754 | 35,000,000 | ||||||||||||||
Derivatives Instruments Average Fixed Pay Rate And Average Maturity [Table Text Block] | ' | |||||||||||||||||||
The following tables present the average fixed pay rate and average maturity for the Company’s interest rate swaps (excludes interest rate swaptions) as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Notional | Fair | Fixed Pay | Maturity | Forward | ||||||||||||||||
Current Maturity Date | Amount | Value | Rate | Years | Starting | |||||||||||||||
3 years or less | $ | 35,000,000 | $ | -149,933 | 0.66 | % | 2.4 | 0 | % | |||||||||||
Greater than 5 years and less than 7 years | 151,000,000 | -1,914,141 | 1.66 | % | 4.9 | 0 | % | |||||||||||||
Greater than 7 years and less than 10 years | 95,000,000 | -1,599,897 | 2.85 | % | 7.9 | 100 | % | |||||||||||||
Greater than 10 years | 57,000,000 | -966,271 | 3.29 | % | 10.9 | 100 | % | |||||||||||||
Total | $ | 338,000,000 | $ | -4,630,242 | 2.17 | % | 6.5 | 45 | % | |||||||||||
December 31, 2012 | ||||||||||||||||||||
Notional | Fair | Fixed Pay | Maturity | Forward | ||||||||||||||||
Current Maturity Date | Amount | Value | Rate | Years | Starting | |||||||||||||||
3 years or less | $ | 15,000,000 | $ | -53,437 | 0.51 | % | 2.6 | 0 | % | |||||||||||
Greater than 3 years and less than 5 years | 20,000,000 | -230,317 | 0.78 | % | 3.5 | 0 | % | |||||||||||||
Total | $ | 35,000,000 | $ | -283,754 | 0.66 | % | 3.1 | 0 | % | |||||||||||
Schedule of Derivative Instruments [Table Text Block] | ' | |||||||||||||||||||
The below tables provide a reconciliation of these assets and liabilities that are subject to Master Agreements or similar agreements and can be potentially offset on the Company’s condensed consolidated balance sheets as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Gross amounts not offset | ||||||||||||||||||||
in the Balance Sheet (1) | ||||||||||||||||||||
Net amounts | ||||||||||||||||||||
Gross amounts | Gross amounts | of assets | Cash collateral | |||||||||||||||||
of recognized | offset in the | presented in the | Financial | (Received)/ | Net | |||||||||||||||
Description | assets | Balance Sheet | Balance Sheet | instruments | Pledged | amount | ||||||||||||||
Linked transactions(2) | $ | 65,825,235 | $ | -42,619,881 | $ | 23,205,354 | $ | -23,205,354 | $ | - | $ | - | ||||||||
Swaptions | 1,541,494 | - | 1,541,494 | - | - | 1,541,494 | ||||||||||||||
Futures | 120,313 | -120,313 | - | - | - | - | ||||||||||||||
Total | $ | 67,487,042 | $ | -42,740,194 | $ | 24,746,848 | $ | -23,205,354 | $ | - | $ | 1,541,494 | ||||||||
September 30, 2013 | ||||||||||||||||||||
Gross amounts not offset | ||||||||||||||||||||
in the Balance Sheet (1) | ||||||||||||||||||||
Net amounts | ||||||||||||||||||||
Gross amounts | Gross amounts | of liabilities | Cash collateral | |||||||||||||||||
of recognized | offset in the | presented in the | Financial | (Received)/ | Net | |||||||||||||||
Description | liabilities | Balance Sheet | Balance Sheet | instruments | Pledged | amount | ||||||||||||||
Repurchase agreements | $ | -377,044,000 | $ | - | $ | -377,044,000 | $ | 377,044,000 | $ | - | $ | - | ||||||||
Linked transactions(2) | -42,619,881 | 42,619,881 | - | - | - | - | ||||||||||||||
Interest rate swaps | -4,630,242 | - | -4,630,242 | - | 4,630,242 | - | ||||||||||||||
Futures | - | 120,313 | 120,313 | - | -120,313 | - | ||||||||||||||
Total | $ | -424,294,123 | $ | 42,740,194 | $ | -381,553,929 | $ | 377,044,000 | $ | 4,509,929 | $ | - | ||||||||
December 31, 2012 | ||||||||||||||||||||
Gross amounts not offset | ||||||||||||||||||||
in the Balance Sheet (1) | ||||||||||||||||||||
Net amounts | ||||||||||||||||||||
Gross amounts | Gross amounts | of assets | Cash collateral | |||||||||||||||||
of recognized | offset in the | presented in the | Financial | (Received)/ | Net | |||||||||||||||
Description | assets | Balance Sheet | Balance Sheet | instruments | Pledged | amount | ||||||||||||||
Linked transactions(2) | $ | 22,636,490 | $ | -14,023,737 | $ | 8,612,753 | $ | -8,612,753 | $ | - | $ | - | ||||||||
Swaptions | 12,062 | - | 12,062 | - | - | 12,062 | ||||||||||||||
Total | $ | 22,648,552 | $ | -14,023,737 | $ | 8,624,815 | $ | -8,612,753 | $ | - | $ | 12,062 | ||||||||
December 31, 2012 | ||||||||||||||||||||
Gross amounts not offset | ||||||||||||||||||||
in the Balance Sheet (1) | ||||||||||||||||||||
Net amounts | ||||||||||||||||||||
Gross amounts | Gross amounts | of liabilities | Cash collateral | |||||||||||||||||
of recognized | offset in the | presented in the | Financial | (Received)/ | Net | |||||||||||||||
Description | liabilities | Balance Sheet | Balance Sheet | instruments | Pledged | amount | ||||||||||||||
Repurchase agreements | $ | -63,423,000 | $ | - | $ | -63,423,000 | $ | 63,423,000 | $ | - | $ | - | ||||||||
Linked transactions(2) | -14,023,737 | 14,023,737 | - | - | - | - | ||||||||||||||
Interest rate swaps | -283,754 | - | -283,754 | - | 283,754 | - | ||||||||||||||
Total | $ | -77,730,491 | $ | 14,023,737 | $ | -63,706,754 | $ | 63,423,000 | $ | 283,754 | $ | - | ||||||||
(1) Amounts presented are limited in total to the net amount of assets or liabilities presented in the condensed consolidated balance sheets by instrument. Excess cash collateral or financial assets that are pledged to counterparties may exceed the financial liabilities subject to Master Arrangements or similar agreements, or counterparties may have pledged excess cash collateral to the Company that exceed the corresponding financial assets. These excess amounts are excluded from the tables above. | ||||||||||||||||||||
(2) RMBS securities within a linked transaction serve as collateral for the linked transaction. See Note 3 “Non-Hedging Activity – Linked Transactions” for information on linked transaction arrangements. | ||||||||||||||||||||
Schedule Of Derivative Non-Agency Rmbs and Repurchase Financings Underlying [Table Text Block] | ' | |||||||||||||||||||
The following tables present certain information concerning the Non-Agency RMBS and repurchase financings underlying the Company’s Linked Transactions as of September 30, 2013 and December 31, 2012: | ||||||||||||||||||||
Linked Non-Agency RMBS | ||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||
Face Value | $ | 106,674,886 | $ | 38,320,365 | ||||||||||||||||
Unamortized premium | - | - | ||||||||||||||||||
Unamortized discount | ||||||||||||||||||||
Designated credit reserve | -16,904,123 | -12,929,231 | ||||||||||||||||||
Net, unamortized | -26,009,442 | -6,721,749 | ||||||||||||||||||
Amortized Cost | 63,761,321 | 18,669,385 | ||||||||||||||||||
Gross unrealized gains | 2,042,807 | 3,950,157 | ||||||||||||||||||
Fair Value | $ | 65,804,128 | $ | 22,619,542 | ||||||||||||||||
Schedule Of Unamortized Net Discount And Designated Credit Reserves On Non Agency Rmbs Underlying Linked Transactions [Table Text Block] | ' | |||||||||||||||||||
The following tables present the changes for the nine months ended September 30, 2013 and for the period May 16, 2012 (commencement of operations) to December 31, 2012 of the unamortized net discount and designated credit reserves on Non-Agency RMBS underlying Linked Transactions: | ||||||||||||||||||||
30-Sep-13 | ||||||||||||||||||||
Designated | Unamortized | |||||||||||||||||||
credit reserve | net discount | Total | ||||||||||||||||||
Acquisitions | $ | -24,122,429 | $ | -28,179,701 | $ | -52,302,130 | ||||||||||||||
Accretion of net discount | - | 2,170,259 | 2,170,259 | |||||||||||||||||
Realized credit losses | 7,218,306 | - | 7,218,306 | |||||||||||||||||
Ending balance at September 30, 2013 | $ | -16,904,123 | $ | -26,009,442 | $ | -42,913,565 | ||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Designated | Unamortized | |||||||||||||||||||
credit reserve | net discount | Total | ||||||||||||||||||
Acquisitions | $ | -13,934,657 | $ | -7,592,017 | $ | -21,526,674 | ||||||||||||||
Accretion of net discount | - | 870,268 | 870,268 | |||||||||||||||||
Realized credit losses | 1,005,426 | - | 1,005,426 | |||||||||||||||||
Ending balance at December 31, 2012 | $ | -12,929,231 | $ | -6,721,749 | $ | -19,650,980 | ||||||||||||||
Schedule Of Linked Repurchase Agreement Counterparties With Whom Repurchase Agreements Exceed 10 Percent Of Stockholders Equity [Table Text Block] | ' | |||||||||||||||||||
Linked Repurchase Agreements | ||||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||
Amount | Percent of total | Weighted average | Company RMBS | |||||||||||||||||
Repurchase Agreement Counterparties | Outstanding | amount outstanding | days to maturity | held as collateral | ||||||||||||||||
Citigroup Global Markets, Inc. | $ | 18,322,000 | 43.06 | % | 37 | $ | 26,391,996 | |||||||||||||
North America | 16,085,000 | 37.8 | % | 21 | 25,384,276 | |||||||||||||||
Asia (1) | 3,691,000 | 8.68 | % | 9 | 6,714,351 | |||||||||||||||
Europe | 3,284,000 | 7.72 | % | 11 | 5,670,285 | |||||||||||||||
Nomura Securities International, Inc. | 1,166,000 | 2.74 | % | 9 | 1,643,221 | |||||||||||||||
Total | $ | 42,548,000 | 100 | % | 26 | $ | 65,804,129 | |||||||||||||
(1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Amount | Percent of total | Weighted average | Company RMBS | |||||||||||||||||
Repurchase Agreement Counterparties | Outstanding | amount outstanding | days to maturity | held as collateral | ||||||||||||||||
North America | $ | 9,277,000 | 66.32 | % | 41 | $ | 13,714,701 | |||||||||||||
Asia (1) | 4,712,000 | 33.68 | % | 12 | 8,904,841 | |||||||||||||||
Total | $ | 13,989,000 | 100 | % | 31 | $ | 22,619,542 | |||||||||||||
(1) Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. | ||||||||||||||||||||
Schedule of Price Risk Derivatives [Table Text Block] | ' | |||||||||||||||||||
The following table summarizes the underlying hedged risks and the amount of gains and losses on derivative instruments reported net in the condensed consolidated statement of operations as realized gain (loss) on derivative contracts, net and unrealized loss on derivative contracts, net for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||||||||||
Amount of realized | Amount of unrealized | |||||||||||||||||||
Primary underlying risk | gain (loss) | appreciation (depreciation) | Total | |||||||||||||||||
Interest rate: | ||||||||||||||||||||
Interest rate swaps | $ | 8,874,459 | $ | -10,401,243 | $ | -1,526,784 | ||||||||||||||
Swaptions | -84,000 | 6,927 | -77,073 | |||||||||||||||||
Futures | -84,375 | 120,313 | 35,938 | |||||||||||||||||
TBAs | -304,688 | - | -304,688 | |||||||||||||||||
Total | $ | 8,401,396 | $ | -10,274,003 | $ | -1,872,607 | ||||||||||||||
Three Months Ended September 30, 2012 | ||||||||||||||||||||
Amount of realized | Amount of unrealized | |||||||||||||||||||
Primary underlying risk | gain (loss) | appreciation (depreciation) | Total | |||||||||||||||||
Interest rate: | ||||||||||||||||||||
Interest rate swaps | $ | - | $ | -55,175 | $ | -55,175 | ||||||||||||||
Swaptions | -16,000 | -9,674 | -25,674 | |||||||||||||||||
Total | $ | -16,000 | $ | -64,849 | $ | -80,849 | ||||||||||||||
Nine Months Ended September 30, 2013 | ||||||||||||||||||||
Amount of realized | Amount of unrealized | |||||||||||||||||||
Primary underlying risk | gain (loss) | appreciation (depreciation) | Total | |||||||||||||||||
Interest rate: | ||||||||||||||||||||
Interest rate swaps | $ | 20,050,632 | $ | -4,346,488 | $ | 15,704,144 | ||||||||||||||
Swaptions | -194,667 | 1,052,099 | 857,432 | |||||||||||||||||
Futures | -84,375 | 120,313 | 35,938 | |||||||||||||||||
TBAs | -304,688 | - | -304,688 | |||||||||||||||||
Total | $ | 19,466,902 | $ | -3,174,076 | $ | 16,292,826 | ||||||||||||||
Period May 16, 2012 to September 30, 2012 | ||||||||||||||||||||
Amount of realized | Amount of unrealized | |||||||||||||||||||
Primary underlying risk | gain (loss) | appreciation (depreciation) | Total | |||||||||||||||||
Interest rate: | ||||||||||||||||||||
Interest rate swaps | $ | - | $ | -281,431 | $ | -281,431 | ||||||||||||||
Swaptions | -21,333 | -17,528 | -38,861 | |||||||||||||||||
Total | $ | -21,333 | $ | -298,959 | $ | -320,292 | ||||||||||||||
Schedule Of Unrealized Gain and Net Interest Income From Derivatives [Table Text Block] | ' | |||||||||||||||||||
The following table presents certain information about the components of the unrealized net gain (loss) and net interest income from Linked Transactions included in the Company’s condensed consolidated statement of operations for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||||
Interest income attributable to RMBS underlying Linked Transactions | $ | 1,343,494 | $ | 497,268 | ||||||||||||||||
Interest expense attributable to linked repurchase agreement | -204,940 | -70,378 | ||||||||||||||||||
borrowings underlying Linked Transactions | ||||||||||||||||||||
Change in fair value of Linked Transactions included in earnings | -1,293,467 | 3,126,257 | ||||||||||||||||||
Unrealized gain (loss) and net interest income from Linked Transactions | $ | -154,913 | $ | 3,553,147 | ||||||||||||||||
Nine Months Ended | Period May 16, 2012 to | |||||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||||
Interest income attributable to RMBS underlying Linked Transactions | $ | 2,408,250 | $ | 552,089 | ||||||||||||||||
Interest expense attributable to linked repurchase agreement | -388,995 | -85,217 | ||||||||||||||||||
borrowings underlying Linked Transactions | ||||||||||||||||||||
Change in fair value of Linked Transactions included in earnings | -1,907,350 | 3,263,738 | ||||||||||||||||||
Unrealized gain (loss) and net interest income from Linked Transactions | $ | 111,905 | $ | 3,730,610 | ||||||||||||||||
FINANCIAL_INSTRUMENTS_Tables
FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block] | ' | |||||||||||||
The following tables summarize the valuation of the Company’s assets and liabilities at fair value within the fair value hierarchy levels as of September 30, 2013 and December 31, 2012: | ||||||||||||||
Quoted prices in | Significant | |||||||||||||
active markets | other observable | Unobservable | ||||||||||||
for identical assets | inputs | inputs | Balance as of | |||||||||||
Level 1 | Level 2 | Level 3 | September 30, 2013 | |||||||||||
Assets: | ||||||||||||||
Residential mortgage-backed securities (a) | $ | - | $ | 417,552,903 | $ | - | $ | 417,552,903 | ||||||
Linked transactions (b) | - | 23,205,354 | - | 23,205,354 | ||||||||||
Swaptions | - | 1,541,494 | - | 1,541,494 | ||||||||||
Futures | 120,313 | - | - | 120,313 | ||||||||||
Total | $ | 120,313 | $ | 442,299,751 | $ | - | $ | 442,420,064 | ||||||
Liabilities: | ||||||||||||||
Interest rate swaps | $ | - | $ | -4,630,242 | $ | - | $ | -4,630,242 | ||||||
Total | $ | - | $ | -4,630,242 | $ | - | $ | -4,630,242 | ||||||
Quoted prices in | Significant | |||||||||||||
active markets | other observable | Unobservable | ||||||||||||
for identical assets | inputs | inputs | Balance as of | |||||||||||
Level 1 | Level 2 | Level 3 | December 31, 2012 | |||||||||||
Assets: | ||||||||||||||
Residential mortgage-backed securities (a) | $ | - | $ | 81,027,998 | $ | - | $ | 81,027,998 | ||||||
Linked transactions (b) | - | 8,612,753 | - | 8,612,753 | ||||||||||
Swaptions | - | 12,062 | - | 12,062 | ||||||||||
Total | $ | - | $ | 89,652,813 | $ | - | $ | 89,652,813 | ||||||
Liabilities: | ||||||||||||||
Interest rate swaps | $ | - | $ | -283,754 | $ | - | $ | -283,754 | ||||||
Total | $ | - | $ | -283,754 | $ | - | $ | -283,754 | ||||||
(a) For more detail about the fair value of the Company’s RMBS and type of securities, see Note 3 and Note 4. | ||||||||||||||
(b) For more detail about the fair value of the Company’s Linked Transactions, see Note 3 and Note 7. | ||||||||||||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||||
Schedule of Dividends Payable [Table Text Block] | ' | |||||||||||
For the 2013 taxable year, the Company has declared dividends to common stockholders totaling $7,311,903, or $1.28 per share. The following table presents cash dividends declared by the Company on its common stock for the nine months ended September 30, 2013: | ||||||||||||
Declaration Date | Record Date | Payment Date | Dividend Amount | Cash Dividend Per Share | ||||||||
15-Feb-13 | 15-Feb-13 | 27-Feb-13 | $ | 219,950 | $ | 0.03853 | ||||||
12-Mar-13 | 12-Mar-13 | 28-Mar-13 | $ | 219,950 | $ | 0.03853 | ||||||
22-Apr-13 | 22-Apr-13 | 29-Apr-13 | $ | 960,603 | $ | 0.16825 | ||||||
22-Apr-13 | 15-May-13 | 30-May-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
22-Apr-13 | 14-Jun-13 | 27-Jun-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
17-Jun-13 | 15-Jul-13 | 30-Jul-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
17-Jun-13 | 15-Aug-13 | 29-Aug-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
17-Jun-13 | 16-Sep-13 | 27-Sep-13 | $ | 1,182,280 | $ | 0.20708 | ||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method [Table Text Block] | ' | |||||||
The following table provides additional disclosure regarding the computation for the three months ended September 30, 2013 and September 30, 2012, nine months ended September 30, 2013 and the period May 16, 2012 (commencement of operations) to September 30, 2012: | ||||||||
Three Months Ended | Three Months Ended | |||||||
September 30, 2013 | September 30, 2012 | |||||||
Numerator (Income): | ||||||||
Net income (loss) available to common shareholders | $ | -17,014,568 | $ | 3,656,161 | ||||
Dilutive net income (loss) attributable to common shareholders | $ | -17,014,568 | $ | 3,656,161 | ||||
Denominator (Weighted Average Shares): | ||||||||
Basic Earnings: | ||||||||
Shares available to common shareholders | 7,356,250 | 1,656,250 | ||||||
Effect of dilutive securities: | ||||||||
Restricted share awards | 4,100 | - | ||||||
Dilutive shares | 7,360,350 | 1,656,250 | ||||||
Nine Months Ended | Period May 16, 2012 | |||||||
September 30, 2013 | to September 30, 2012 | |||||||
Numerator (Income): | ||||||||
Net income (loss) available to common shareholders | $ | -7,518,400 | $ | 3,441,901 | ||||
Dilutive net income (loss) attributable to common shareholders | $ | -7,518,400 | $ | 3,441,901 | ||||
Denominator (Weighted Average Shares): | ||||||||
Basic Earnings: | ||||||||
Shares available to common shareholders | 5,685,920 | 1,656,250 | ||||||
Effect of dilutive securities: | ||||||||
Restricted share awards | 9,961 | - | ||||||
Dilutive shares | 5,695,881 | 1,656,250 | ||||||
ORGANIZATION_AND_BUSINESS_OPER1
ORGANIZATION AND BUSINESS OPERATIONS (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Operations Commenced Date | 16-May-12 |
Entity Incorporation, State Country Name | 'Maryland |
Entity Incorporation, Date of Incorporation | 28-Mar-12 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Increase (Decrease) in Due from Related Parties, Total | $1,500,000 |
Proceeds from Related Party Debt | $1,139,703 |
AVAILABLEFORSALE_SECURITIES_De
AVAILABLE-FOR-SALE SECURITIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Mortgage-backed securities: | $417,552,903 | $81,027,998 |
Agency [Member] | ' | ' |
Mortgage-backed securities: | 359,850,417 | 69,973,604 |
Agency [Member] | Federal Home Loan Mortgage Corporation Certificates and Obligations (FHLMC) [Member] | ' | ' |
Mortgage-backed securities: | 151,331,577 | 49,765,271 |
Agency [Member] | Federal National Mortgage Association Certificates and Obligations (FNMA) [Member] | ' | ' |
Mortgage-backed securities: | 208,518,840 | 20,208,333 |
Non Agency [Member] | ' | ' |
Mortgage-backed securities: | $57,702,486 | $11,054,394 |
AVAILABLEFORSALE_SECURITIES_De1
AVAILABLE-FOR-SALE SECURITIES (Details 1) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Face Value | $450,952,634 | $83,817,577 |
Unamortized premium | 12,854,666 | 3,193,345 |
Unamortized discount | ' | ' |
Designated credit reserve | -15,967,512 | -4,882,582 |
Net, unamortized | -22,781,350 | -3,534,339 |
Amortized Cost | 425,058,438 | 78,594,001 |
Gross unrealized loss | -7,505,535 | 2,433,997 |
Fair Value | 417,552,903 | 81,027,998 |
Agency [Member] | ' | ' |
Face Value | 357,111,292 | 65,310,197 |
Unamortized premium | 12,854,666 | 3,193,345 |
Unamortized discount | ' | ' |
Designated credit reserve | 0 | 0 |
Net, unamortized | -1,614,616 | 0 |
Amortized Cost | 368,351,342 | 68,503,542 |
Gross unrealized loss | -8,500,925 | 1,470,062 |
Fair Value | 359,850,417 | 69,973,604 |
Non Agency [Member] | ' | ' |
Face Value | 93,841,342 | 18,507,380 |
Unamortized premium | 0 | 0 |
Unamortized discount | ' | ' |
Designated credit reserve | -15,967,512 | -4,882,582 |
Net, unamortized | -21,166,734 | -3,534,339 |
Amortized Cost | 56,707,096 | 10,090,459 |
Gross unrealized loss | 995,390 | 963,935 |
Fair Value | $57,702,486 | $11,054,394 |
AVAILABLEFORSALE_SECURITIES_De2
AVAILABLE-FOR-SALE SECURITIES (Details 2) (Agency and Non-Agency Residential Mortgage Backed Securities [Member], USD $) | 3 Months Ended | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Agency and Non-Agency Residential Mortgage Backed Securities [Member] | ' | ' | ' | ' |
Agency and non-Agency RMBS sold, at cost | $348,566,209 | $0 | $0 | $717,350,126 |
Proceeds from Agency and non-Agency RMBS sold | 331,913,127 | 0 | 0 | 687,252,011 |
Net realized gain (loss) on sale of Agency and non-Agency RMBS | ($16,653,082) | $0 | $0 | ($30,098,115) |
AVAILABLEFORSALE_SECURITIES_De3
AVAILABLE-FOR-SALE SECURITIES (Details 3) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Available-for-sale Securities, Total | $417,552,903 | $81,027,998 |
Adjustable Rate [Member] | ' | ' |
Available-for-sale Securities, Total | 196,833,485 | 11,054,394 |
Fixed Rate [Member] | ' | ' |
Available-for-sale Securities, Total | 220,719,418 | 69,973,604 |
Agency [Member] | ' | ' |
Available-for-sale Securities, Total | 359,850,417 | 69,973,604 |
Agency [Member] | Adjustable Rate [Member] | ' | ' |
Available-for-sale Securities, Total | 139,130,999 | 0 |
Agency [Member] | Fixed Rate [Member] | ' | ' |
Available-for-sale Securities, Total | 220,719,418 | 69,973,604 |
Non Agency [Member] | ' | ' |
Available-for-sale Securities, Total | 57,702,486 | 11,054,394 |
Non Agency [Member] | Adjustable Rate [Member] | ' | ' |
Available-for-sale Securities, Total | 57,702,486 | 11,054,394 |
Non Agency [Member] | Fixed Rate [Member] | ' | ' |
Available-for-sale Securities, Total | $0 | $0 |
AVAILABLEFORSALE_SECURITIES_De4
AVAILABLE-FOR-SALE SECURITIES (Details 4) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Designated credit reserve, Acquisitions | ($18,378,288) | ($5,363,444) |
Designated credit reserve, Accretion of net discount | 0 | 0 |
Designated credit reserve, Realized gain on paydowns | 0 | ' |
Designated credit reserve, Realized credit losses | 1,755,001 | 480,862 |
Designated credit reserve, Release of credit reserves | 655,775 | ' |
Designated credit reserve, Ending balance | -15,967,512 | -4,882,582 |
Unamortized net discount, Acquisitions | -24,450,562 | -3,997,817 |
Unamortized net discount, Accretion of net discount | 1,663,450 | 463,478 |
Unamortized net discount, Realized gain on paydowns | 5,762 | ' |
Unamortized net discount, Realized credit losses | 0 | 0 |
Unamortized net discount, Release of credit reserves | 0 | ' |
Unamortized net discount, Ending balance | -22,781,350 | -3,534,339 |
Acquisitions, Total | -42,828,850 | -9,361,261 |
Accretion of net discount, Total | 1,663,450 | 463,478 |
Realized gain on paydowns, Total | 5,762 | ' |
Realized credit losses, Total | 1,755,001 | 480,862 |
Release of credit reserves, Total | 655,775 | ' |
Ending balance,Total | ($38,748,862) | ($8,416,921) |
AVAILABLEFORSALE_SECURITIES_De5
AVAILABLE-FOR-SALE SECURITIES (Details 5) (USD $) | 3 Months Ended | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Coupon interest | $3,517,383 | $564,419 | $739,024 | $14,016,631 |
Net (premium amortization)/ discount accretion | 821,065 | 152,077 | 135,362 | 907,795 |
Interest income | 4,338,448 | 716,496 | 874,386 | 14,924,426 |
Agency [Member] | ' | ' | ' | ' |
Coupon interest | 3,472,373 | 535,560 | 710,165 | 13,878,581 |
Net (premium amortization)/ discount accretion | -58,281 | -73,451 | -90,166 | -713,094 |
Interest income | 3,414,092 | 462,109 | 619,999 | 13,165,487 |
Non Agency [Member] | ' | ' | ' | ' |
Coupon interest | 45,010 | 28,859 | 28,859 | 138,050 |
Net (premium amortization)/ discount accretion | 879,346 | 225,528 | 225,528 | 1,620,889 |
Interest income | $924,356 | $254,387 | $254,387 | $1,758,939 |
AVAILABLEFORSALE_SECURITIES_De6
AVAILABLE-FOR-SALE SECURITIES (Details Textual) (USD $) | 3 Months Ended | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Unrealized loss on available-for-sale securities, net | $16,495,823 | $2,850,768 | $3,008,004 | ($9,939,532) |
RESTRICTED_CASH_Details
RESTRICTED CASH (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Restricted cash | $13,691,658 | $1,933,390 |
Broker Counterparties For Derivatives Trading [Member] | ' | ' |
Restricted cash | 11,936,026 | 570,247 |
Repurchase Counterparties As Restricted Collateral [Member] | ' | ' |
Restricted cash | 1,725,632 | 1,363,143 |
FOAC As Minimum Required Capital [Member] | ' | ' |
Restricted cash | $30,000 | $0 |
REPURCHASE_AGREEMENTS_Details
REPURCHASE AGREEMENTS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Repurchase agreements | $377,044,000 | [1] | $63,423,000 | [2] |
Repurchase Agreements Weighted Average Interest Rate | 0.56% | 0.59% | ||
Agency [Member] | ' | ' | ||
Repurchase agreements | 338,846,000 | 59,616,000 | ||
Repurchase Agreements Weighted Average Interest Rate | 0.39% | 0.48% | ||
Non Agency [Member] | ' | ' | ||
Repurchase agreements | $38,198,000 | [3] | $3,807,000 | [3] |
Repurchase Agreements Weighted Average Interest Rate | 2.09% | [3] | 2.31% | [3] |
[1] | At September 31, 2013, the Company had repurchase agreements of $42,548,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) | |||
[2] | At December 31, 2012, the Company had repurchase agreements of $13,989,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) | |||
[3] | At September 30, 2013 and December 31, 2012, the Company had repurchase agreements of $42,548,000 and $13,989,000, respectively, that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) |
REPURCHASE_AGREEMENTS_Details_
REPURCHASE AGREEMENTS (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Repurchase agreements | $377,044,000 | [1] | $63,423,000 | [2] |
Maturity up to 30 days [Member] | ' | ' | ||
Repurchase agreements | 315,000,000 | 59,616,000 | ||
Maturity 30 To 60 Days [Member] | ' | ' | ||
Repurchase agreements | $62,044,000 | $3,807,000 | ||
[1] | At September 31, 2013, the Company had repurchase agreements of $42,548,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) | |||
[2] | At December 31, 2012, the Company had repurchase agreements of $13,989,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) |
REPURCHASE_AGREEMENTS_Details_1
REPURCHASE AGREEMENTS (Details 2) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | |||
Repurchase Agreement Counterparties, Amount Outstanding | $377,044,000 | [1] | $63,423,000 | [2] |
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 100.00% | 100.00% | ||
Repurchase Agreement Counterparties, weighted average days to maturity | '23 days | '17 days | ||
Repurchase Agreement Counterparties, Company RMBS held as collateral | 417,552,903 | 66,337,080 | ||
North America [Member] | ' | ' | ||
Repurchase Agreement Counterparties, Amount Outstanding | 184,744,000 | [1] | 52,874,000 | [2] |
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 49.00% | 83.37% | ||
Repurchase Agreement Counterparties, weighted average days to maturity | '18 days | '17 days | ||
Repurchase Agreement Counterparties, Company RMBS held as collateral | 196,351,333 | 55,462,506 | ||
Asia [Member] | ' | ' | ||
Repurchase Agreement Counterparties, Amount Outstanding | 81,235,000 | [1],[3] | 10,549,000 | [2],[3] |
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 21.54% | [3] | 16.63% | [3] |
Repurchase Agreement Counterparties, weighted average days to maturity | '34 days | [3] | '18 days | [3] |
Repurchase Agreement Counterparties, Company RMBS held as collateral | 86,361,215 | [3] | 10,874,574 | [3] |
Europe [Member] | ' | ' | ||
Repurchase Agreement Counterparties, Amount Outstanding | 53,791,000 | [1],[3] | ' | |
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 14.27% | [3] | ' | |
Repurchase Agreement Counterparties, weighted average days to maturity | '23 days | [3] | ' | |
Repurchase Agreement Counterparties, Company RMBS held as collateral | 61,033,655 | [3] | ' | |
Nomura Securities International Inc [Member] | ' | ' | ||
Repurchase Agreement Counterparties, Amount Outstanding | 45,577,000 | [1] | ' | |
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 12.09% | ' | ||
Repurchase Agreement Counterparties, weighted average days to maturity | '20 days | ' | ||
Repurchase Agreement Counterparties, Company RMBS held as collateral | 56,260,079 | ' | ||
Citigroup Global Markets Inc [Member] | ' | ' | ||
Repurchase Agreement Counterparties, Amount Outstanding | 11,697,000 | [1] | ' | |
Repurchase Agreement Counterparties, Percentage of total amount outstanding | 3.10% | ' | ||
Repurchase Agreement Counterparties, weighted average days to maturity | '33 days | ' | ||
Repurchase Agreement Counterparties, Company RMBS held as collateral | $17,546,621 | ' | ||
[1] | At September 31, 2013, the Company had repurchase agreements of $42,548,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) | |||
[2] | At December 31, 2012, the Company had repurchase agreements of $13,989,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) | |||
[3] | Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. |
REPURCHASE_AGREEMENTS_Details_2
REPURCHASE AGREEMENTS (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Repurchase agreements | $377,044,000 | [1] | $63,423,000 | [2] |
Repurchase Agreements Weighted Average Interest Rate | 0.56% | 0.59% | ||
Non Agency Linked Transactions [Member] | ' | ' | ||
Repurchase agreements | $42,548,000 | $13,989,000 | ||
[1] | At September 31, 2013, the Company had repurchase agreements of $42,548,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) | |||
[2] | At December 31, 2012, the Company had repurchase agreements of $13,989,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) |
DERIVATIVE_INSTRUMENTS_HEDGING2
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Derivative Financial Instruments, Fair value | $24,867,161 | $8,624,815 |
Derivative Asset, Notional Amount | 45,000,000 | 5,000,000 |
Derivative Liabilities, Fair value | -4,630,242 | -283,754 |
Derivative Liability, Notional Amount | 338,000,000 | 35,000,000 |
Interest Rate Swap [Member] | ' | ' |
Derivative Financial Instruments, Fair value | 0 | 0 |
Derivative Asset, Notional Amount | 0 | 0 |
Derivative Liabilities, Fair value | -4,630,242 | -283,754 |
Derivative Liability, Notional Amount | 338,000,000 | 35,000,000 |
Swaption [Member] | ' | ' |
Derivative Financial Instruments, Fair value | 1,541,494 | 12,062 |
Derivative Asset, Notional Amount | 25,000,000 | 5,000,000 |
Derivative Liabilities, Fair value | 0 | 0 |
Derivative Liability, Notional Amount | 0 | 0 |
Linked Tansactions [Member] | ' | ' |
Derivative Financial Instruments, Fair value | 23,205,354 | 8,612,753 |
Derivative Asset, Notional Amount | 0 | 0 |
Derivative Liabilities, Fair value | 0 | 0 |
Derivative Liability, Notional Amount | 0 | 0 |
Futures [Member] | ' | ' |
Derivative Financial Instruments, Fair value | 120,313 | ' |
Derivative Asset, Notional Amount | 20,000,000 | ' |
Derivative Liabilities, Fair value | 0 | ' |
Derivative Liability, Notional Amount | $0 | ' |
DERIVATIVE_INSTRUMENTS_HEDGING3
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 1) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Derivative Financial Instruments, Notional Amount | $45,000,000 | $5,000,000 |
Derivative Financial Instruments, Fair value | 24,867,161 | 8,624,815 |
Derivative Financial Instruments, Notional Amount | 338,000,000 | 35,000,000 |
Derivative Financial Instruments, Fair value | -4,630,242 | -283,754 |
Interest Rate Swap [Member] | ' | ' |
Derivative Financial Instruments, Notional Amount | 0 | 0 |
Derivative Financial Instruments, Fair value | 0 | 0 |
Derivative Financial Instruments, Notional Amount | 338,000,000 | 35,000,000 |
Derivative Financial Instruments, Fair value | -4,630,242 | -283,754 |
Derivative Financial Instruments, Fixed Pay Rate | 2.17% | 0.66% |
Derivative Financial Instruments, Maturity Years | '6 years 6 months | '3 years 1 month 6 days |
Derivative Financial Instruments, Forward Starting | 45.00% | 0.00% |
Interest Rate Swap [Member] | Less than 3 years [Member] | ' | ' |
Derivative Financial Instruments, Notional Amount | 35,000,000 | ' |
Derivative Financial Instruments, Fair value | -149,933 | ' |
Derivative Financial Instruments, Notional Amount | ' | 15,000,000 |
Derivative Financial Instruments, Fair value | ' | -53,437 |
Derivative Financial Instruments, Fixed Pay Rate | 0.66% | 0.51% |
Derivative Financial Instruments, Maturity Years | '2 years 4 months 24 days | '2 years 7 months 6 days |
Derivative Financial Instruments, Forward Starting | 0.00% | 0.00% |
Interest Rate Swap [Member] | Greater than 3 years and less than 5 years [Member] | ' | ' |
Derivative Financial Instruments, Notional Amount | ' | 20,000,000 |
Derivative Financial Instruments, Fair value | ' | -230,317 |
Derivative Financial Instruments, Fixed Pay Rate | ' | 0.78% |
Derivative Financial Instruments, Maturity Years | ' | '3 years 6 months |
Derivative Financial Instruments, Forward Starting | ' | 0.00% |
Interest Rate Swap [Member] | Greater than 5 years and less than 7 years [Member] | ' | ' |
Derivative Financial Instruments, Notional Amount | 151,000,000 | ' |
Derivative Financial Instruments, Fair value | -1,914,141 | ' |
Derivative Financial Instruments, Fixed Pay Rate | 1.66% | ' |
Derivative Financial Instruments, Maturity Years | '4 years 10 months 24 days | ' |
Derivative Financial Instruments, Forward Starting | 0.00% | ' |
Interest Rate Swap [Member] | Greater than 7 years and less than 10 years [Member] | ' | ' |
Derivative Financial Instruments, Notional Amount | 95,000,000 | ' |
Derivative Financial Instruments, Fair value | -1,599,897 | ' |
Derivative Financial Instruments, Fixed Pay Rate | 2.85% | ' |
Derivative Financial Instruments, Maturity Years | '7 years 10 months 24 days | ' |
Derivative Financial Instruments, Forward Starting | 100.00% | ' |
Interest Rate Swap [Member] | Greater than 10 years [Member] | ' | ' |
Derivative Financial Instruments, Notional Amount | 57,000,000 | ' |
Derivative Financial Instruments, Fair value | ($966,271) | ' |
Derivative Financial Instruments, Fixed Pay Rate | 3.29% | ' |
Derivative Financial Instruments, Maturity Years | '10 years 10 months 24 days | ' |
Derivative Financial Instruments, Forward Starting | 100.00% | ' |
DERIVATIVE_INSTRUMENTS_HEDGING4
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Gross amounts of recognized assets | $67,487,042 | $22,648,552 | ||
Gross amounts offset in the Balance Sheet | -42,740,194 | -14,023,737 | ||
Net amounts of assets presented in the Balance Sheet | 24,746,848 | 8,624,815 | ||
Net amounts of assets, Financial instruments | -23,205,354 | [1] | -8,612,753 | [1] |
Net amounts of assets, Cash collateral (Received) / Pledged | 0 | [1] | 0 | [1] |
Net amounts of assets, Net amount | 1,541,494 | 12,062 | ||
Gross amounts of recognized liabilities | -424,294,123 | -77,730,491 | ||
Gross amounts offset in the Balance Sheet | 42,740,194 | 14,023,737 | ||
Net amounts of liabilities presented in the Balance Sheet | -381,553,929 | -63,706,754 | ||
Net amounts of liabilities, Financial instruments | 377,044,000 | [1] | 63,423,000 | [1] |
Net amounts of liabilities, Cash collateral (Received) / Pledged | 4,509,929 | [1] | 283,754 | [1] |
Net amounts of liabilities, Net amount | 0 | 0 | ||
Repurchase Agreements [Member] | ' | ' | ||
Gross amounts of recognized liabilities | -377,044,000 | -63,423,000 | ||
Gross amounts offset in the Balance Sheet | 0 | 0 | ||
Net amounts of liabilities presented in the Balance Sheet | -377,044,000 | -63,423,000 | ||
Net amounts of liabilities, Financial instruments | 377,044,000 | [1] | 63,423,000 | [1] |
Net amounts of liabilities, Cash collateral (Received) / Pledged | 0 | [1] | 0 | [1] |
Net amounts of liabilities, Net amount | 0 | 0 | ||
Linked Tansactions [Member] | ' | ' | ||
Gross amounts of recognized assets | 65,825,235 | [2] | 22,636,490 | [2] |
Gross amounts offset in the Balance Sheet | -42,619,881 | [2] | -14,023,737 | [2] |
Net amounts of assets presented in the Balance Sheet | 23,205,354 | [2] | 8,612,753 | [2] |
Net amounts of assets, Financial instruments | -23,205,354 | [1],[2] | -8,612,753 | [1],[2] |
Net amounts of assets, Cash collateral (Received) / Pledged | 0 | [1],[2] | 0 | [1],[2] |
Net amounts of assets, Net amount | 0 | [2] | 0 | [2] |
Gross amounts of recognized liabilities | -42,619,881 | [2] | -14,023,737 | [2] |
Gross amounts offset in the Balance Sheet | 42,619,881 | [2] | 14,023,737 | [2] |
Net amounts of liabilities presented in the Balance Sheet | 0 | [2] | 0 | [2] |
Net amounts of liabilities, Financial instruments | 0 | [1],[2] | 0 | [1],[2] |
Net amounts of liabilities, Cash collateral (Received) / Pledged | 0 | [1],[2] | 0 | [1],[2] |
Net amounts of liabilities, Net amount | 0 | [2] | 0 | [2] |
Interest Rate Swap [Member] | ' | ' | ||
Gross amounts of recognized liabilities | -4,630,242 | -283,754 | ||
Gross amounts offset in the Balance Sheet | 0 | 0 | ||
Net amounts of liabilities presented in the Balance Sheet | -4,630,242 | -283,754 | ||
Net amounts of liabilities, Financial instruments | 0 | [1] | 0 | [1] |
Net amounts of liabilities, Cash collateral (Received) / Pledged | 4,630,242 | [1] | 283,754 | [1] |
Net amounts of liabilities, Net amount | 0 | 0 | ||
Swaption [Member] | ' | ' | ||
Gross amounts of recognized assets | 1,541,494 | 12,062 | ||
Gross amounts offset in the Balance Sheet | 0 | 0 | ||
Net amounts of assets presented in the Balance Sheet | 1,541,494 | 12,062 | ||
Net amounts of assets, Financial instruments | 0 | [1] | 0 | [1] |
Net amounts of assets, Cash collateral (Received) / Pledged | 0 | [1] | 0 | [1] |
Net amounts of assets, Net amount | 1,541,494 | 12,062 | ||
Futures [Member] | ' | ' | ||
Gross amounts of recognized assets | 120,313 | ' | ||
Gross amounts offset in the Balance Sheet | -120,313 | ' | ||
Net amounts of assets presented in the Balance Sheet | 0 | ' | ||
Net amounts of assets, Financial instruments | 0 | [1] | ' | |
Net amounts of assets, Cash collateral (Received) / Pledged | 0 | [1] | ' | |
Net amounts of assets, Net amount | 0 | ' | ||
Gross amounts of recognized liabilities | 0 | ' | ||
Gross amounts offset in the Balance Sheet | 120,313 | ' | ||
Net amounts of liabilities presented in the Balance Sheet | 120,313 | ' | ||
Net amounts of liabilities, Financial instruments | 0 | [1] | ' | |
Net amounts of liabilities, Cash collateral (Received) / Pledged | -120,313 | [1] | ' | |
Net amounts of liabilities, Net amount | $0 | ' | ||
[1] | Amounts presented are limited in total to the net amount of assets or liabilities presented in the condensed consolidated balance sheets by instrument. Excess cash collateral or financial assets that are pledged to counterparties may exceed the financial liabilities subject to Master Arrangements or similar agreements, or counterparties may have pledged excess cash collateral to the Company that exceed the corresponding financial assets. These excess amounts are excluded from the tables above. | |||
[2] | RMBS securities within a linked transaction serve as collateral for the linked transaction. See Note 3 "Non-Hedging Activity - Linked Transactions" for information on linked transaction arrangements. |
DERIVATIVE_INSTRUMENTS_HEDGING5
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 3) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Unamortized discount | ' | ' |
Fair Value | $23,205,354 | $8,612,753 |
Non Agency [Member] | ' | ' |
Face Value | 106,674,886 | 38,320,365 |
Unamortized premium | 0 | 0 |
Unamortized discount | ' | ' |
Designated credit reserve | -16,904,123 | -12,929,231 |
Net, unamortized | -26,009,442 | -6,721,749 |
Amortized Cost | 63,761,321 | 18,669,385 |
Gross unrealized gains | 2,042,807 | 3,950,157 |
Fair Value | $65,804,128 | $22,619,542 |
DERIVATIVE_INSTRUMENTS_HEDGING6
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 4) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Designated credit reserve, Acquisitions | ($24,122,429) | ($13,934,657) |
Designated credit reserve, Accretion of net discount | 0 | 0 |
Designated credit reserve, Realized credit losses | -7,218,306 | -1,005,426 |
Designated credit reserve, Ending balance | -16,904,123 | -12,929,231 |
Unamortized net discount, Acquisitions | -28,179,701 | -7,592,017 |
Unamortized net discount, Accretion of net discount | 2,170,259 | 870,268 |
Unamortized net discount, Realized credit losses | 0 | 0 |
Unamortized net discount, Ending balance | -26,009,442 | -6,721,749 |
Acquisitions, Total | -52,302,130 | -21,526,674 |
Accretion of net discount, Total | 2,170,259 | 870,268 |
Realized credit losses, Total | 7,218,306 | 1,005,426 |
Ending balance, Total | ($42,913,565) | ($19,650,980) |
DERIVATIVE_INSTRUMENTS_HEDGING7
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 5) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | |||
Secured Debt, Repurchase Agreements | $377,044,000 | [1] | $63,423,000 | [2] |
Repurchase Agreement Percentage Of Total Amount Outstanding | 100.00% | 100.00% | ||
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '23 days | '17 days | ||
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 417,552,903 | 66,337,080 | ||
Linked Repurchase Agreements [Member] | ' | ' | ||
Secured Debt, Repurchase Agreements | 42,548,000 | 13,989,000 | ||
Repurchase Agreement Percentage Of Total Amount Outstanding | 100.00% | 100.00% | ||
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '26 days | '31 days | ||
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 65,804,129 | 22,619,542 | ||
Linked Repurchase Agreements [Member] | Citigroup Global Markets Inc [Member] | ' | ' | ||
Secured Debt, Repurchase Agreements | 18,322,000 | ' | ||
Repurchase Agreement Percentage Of Total Amount Outstanding | 43.06% | ' | ||
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '37 days | ' | ||
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 26,391,996 | ' | ||
Linked Repurchase Agreements [Member] | Nomura Securities International Inc [Member] | ' | ' | ||
Secured Debt, Repurchase Agreements | 1,166,000 | ' | ||
Repurchase Agreement Percentage Of Total Amount Outstanding | 2.74% | ' | ||
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '9 days | ' | ||
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 1,643,221 | ' | ||
North America [Member] | ' | ' | ||
Secured Debt, Repurchase Agreements | 184,744,000 | [1] | 52,874,000 | [2] |
Repurchase Agreement Percentage Of Total Amount Outstanding | 49.00% | 83.37% | ||
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '18 days | '17 days | ||
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 196,351,333 | 55,462,506 | ||
North America [Member] | Linked Repurchase Agreements [Member] | ' | ' | ||
Secured Debt, Repurchase Agreements | 16,085,000 | 9,277,000 | ||
Repurchase Agreement Percentage Of Total Amount Outstanding | 37.80% | 66.32% | ||
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '21 days | '41 days | ||
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 25,384,276 | 13,714,701 | ||
Asia [Member] | ' | ' | ||
Secured Debt, Repurchase Agreements | 81,235,000 | [1],[3] | 10,549,000 | [2],[3] |
Repurchase Agreement Percentage Of Total Amount Outstanding | 21.54% | [3] | 16.63% | [3] |
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '34 days | [3] | '18 days | [3] |
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 86,361,215 | [3] | 10,874,574 | [3] |
Asia [Member] | Linked Repurchase Agreements [Member] | ' | ' | ||
Secured Debt, Repurchase Agreements | 3,691,000 | [3] | 4,712,000 | [3] |
Repurchase Agreement Percentage Of Total Amount Outstanding | 8.68% | [3] | 33.68% | [3] |
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '9 days | [3] | '12 days | [3] |
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 6,714,351 | [3] | 8,904,841 | [3] |
Europe [Member] | ' | ' | ||
Secured Debt, Repurchase Agreements | 53,791,000 | [1],[3] | ' | |
Repurchase Agreement Percentage Of Total Amount Outstanding | 14.27% | [3] | ' | |
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '23 days | [3] | ' | |
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | 61,033,655 | [3] | ' | |
Europe [Member] | Linked Repurchase Agreements [Member] | ' | ' | ||
Secured Debt, Repurchase Agreements | 3,284,000 | ' | ||
Repurchase Agreement Percentage Of Total Amount Outstanding | 7.72% | ' | ||
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements | '11 days | ' | ||
Fair Value of Securities Received as Collateral that Can be Resold or Repledged | $5,670,285 | ' | ||
[1] | At September 31, 2013, the Company had repurchase agreements of $42,548,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) | |||
[2] | At December 31, 2012, the Company had repurchase agreements of $13,989,000 that were linked to Non-Agency RMBS purchases and were accounted for as Linked Transactions, and as such, the linked repurchase agreements are not included in the above table. (See Note 3) | |||
[3] | Counterparties domiciled in Europe and Asia, or their U.S. subsidiaries. |
DERIVATIVE_INSTRUMENTS_HEDGING8
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 6) (USD $) | 3 Months Ended | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Interest rate: | ' | ' | ' | ' |
Amount of realized gain (loss) | $8,401,396 | ($16,000) | ($21,333) | $19,466,902 |
Amount of unrealized appreciation (depreciation) | -10,274,003 | -64,849 | -298,959 | -3,174,076 |
Total | -1,872,607 | -80,849 | -320,292 | 16,292,826 |
Interest Rate Swap [Member] | ' | ' | ' | ' |
Interest rate: | ' | ' | ' | ' |
Amount of realized gain (loss) | 8,874,459 | 0 | 0 | 20,050,632 |
Amount of unrealized appreciation (depreciation) | -10,401,243 | -55,175 | -281,431 | -4,346,488 |
Total | -1,526,784 | -55,175 | -281,431 | 15,704,144 |
Swaptions [Member] | ' | ' | ' | ' |
Interest rate: | ' | ' | ' | ' |
Amount of realized gain (loss) | -84,000 | -16,000 | -21,333 | -194,667 |
Amount of unrealized appreciation (depreciation) | 6,927 | -9,674 | -17,528 | 1,052,099 |
Total | -77,073 | -25,674 | -38,861 | 857,432 |
Futures [Member] | ' | ' | ' | ' |
Interest rate: | ' | ' | ' | ' |
Amount of realized gain (loss) | -84,375 | ' | ' | -84,375 |
Amount of unrealized appreciation (depreciation) | 120,313 | ' | ' | 120,313 |
Total | 35,938 | ' | ' | 35,938 |
TBAs [Member] | ' | ' | ' | ' |
Interest rate: | ' | ' | ' | ' |
Amount of realized gain (loss) | -304,688 | ' | ' | -304,688 |
Amount of unrealized appreciation (depreciation) | 0 | ' | ' | 0 |
Total | ($304,688) | ' | ' | ($304,688) |
DERIVATIVE_INSTRUMENTS_HEDGING9
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details 7) (USD $) | 3 Months Ended | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Change in fair value of Linked Transactions included in earnings | $8,401,396 | ($16,000) | ($21,333) | $19,466,902 |
Unrealized gain (loss) and net interest income from Linked Transactions | -154,913 | 3,553,147 | 3,730,610 | 111,905 |
Linked Tansactions [Member] | ' | ' | ' | ' |
Interest income attributable to RMBS underlying Linked Transactions | 1,343,494 | 497,268 | 552,089 | 2,408,250 |
Interest expense attributable to linked repurchase agreement borrowings underlying Linked Transactions | -204,940 | -70,378 | -85,217 | -388,995 |
Change in fair value of Linked Transactions included in earnings | -1,293,467 | 3,126,257 | 3,263,738 | -1,907,350 |
Unrealized gain (loss) and net interest income from Linked Transactions | ($154,913) | $3,553,147 | $3,730,610 | $111,905 |
Recovered_Sheet1
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Accrued interest receivable | $1,009,688 | $189,364 |
Accrued interest payable | 108,167 | 65,820 |
Linked Tansactions [Member] | ' | ' |
Accrued interest receivable | 21,207 | ' |
Accrued interest payable | $71,881 | ' |
FINANCIAL_INSTRUMENTS_Details
FINANCIAL INSTRUMENTS (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | $442,420,064 | $89,652,813 | ||
Liabilities: | ' | ' | ||
Liabilities, Fair Value Disclosure | -4,630,242 | -283,754 | ||
Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 120,313 | 0 | ||
Liabilities: | ' | ' | ||
Liabilities, Fair Value Disclosure | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 442,299,751 | 89,652,813 | ||
Liabilities: | ' | ' | ||
Liabilities, Fair Value Disclosure | -4,630,242 | -283,754 | ||
Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 0 | 0 | ||
Liabilities: | ' | ' | ||
Liabilities, Fair Value Disclosure | 0 | 0 | ||
Residential Mortgage Backed Securities [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 417,552,903 | [1] | 81,027,998 | [1] |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 0 | [1] | 0 | [1] |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 417,552,903 | [1] | 81,027,998 | [1] |
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 0 | [1] | 0 | [1] |
Commodity Index Linked Notes [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 23,205,354 | [2] | 8,612,753 | [2] |
Commodity Index Linked Notes [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 0 | [2] | 0 | [2] |
Commodity Index Linked Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 23,205,354 | [2] | 8,612,753 | [2] |
Commodity Index Linked Notes [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 0 | [2] | 0 | [2] |
Interest Rate Swap [Member] | ' | ' | ||
Liabilities: | ' | ' | ||
Liabilities, Fair Value Disclosure | -4,630,242 | -283,754 | ||
Interest Rate Swap [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Liabilities: | ' | ' | ||
Liabilities, Fair Value Disclosure | 0 | 0 | ||
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Liabilities: | ' | ' | ||
Liabilities, Fair Value Disclosure | -4,630,242 | -283,754 | ||
Interest Rate Swap [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Liabilities: | ' | ' | ||
Liabilities, Fair Value Disclosure | 0 | 0 | ||
Swaption [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 1,541,494 | 12,062 | ||
Swaption [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 0 | 0 | ||
Swaption [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 1,541,494 | 12,062 | ||
Swaption [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 0 | 0 | ||
Futures [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 120,313 | ' | ||
Futures [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 120,313 | ' | ||
Futures [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | 0 | ' | ||
Futures [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Assets, Fair Value Disclosure | $0 | ' | ||
[1] | For more detail about the fair value of the Company's RMBS and type of securities, see Note 3 and Note 4. | |||
[2] | For more detail about the fair value of the Company's Linked Transactions, see Note 3 and Note 7. |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | 3 Months Ended | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Management Fee Percentage | ' | ' | ' | 1.50% |
Management fee | ($413,164) | ($98,164) | ($146,718) | ($941,166) |
Management Fee Payable | 137,721 | ' | ' | 137,721 |
Operating expenses reimbursable to Manager | 634,001 | 258,350 | 407,998 | 1,542,099 |
Additional Cost Of Reimbursable Expense Waived | ' | ' | ' | 227,341 |
Reimbursement Revenue Terms | ' | ' | ' | 'the Manager agreed to reimburse the Company for offering expenses in excess of $1,500,000 incurred in connection with the Companys initial public offering (IPO). |
Due from Manager | 1,139,703 | ' | ' | 1,139,703 |
Restricted stock compensation expense | ' | ' | 0 | 89,193 |
Manager Equity Plan [Member] | ' | ' | ' | ' |
Percentage Of Shares Issued | ' | ' | ' | 3.00% |
Restricted stock compensation expense | 39,229 | ' | ' | 89,193 |
Manager Equity Plan [Member] | Restricted Stock Units (Rsus) [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Share-based Awards Other than Options | $300,102 | ' | ' | $300,102 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | ' | ' | ' | '16 years 3 months 18 days |
Manager Equity Plan [Member] | Independent Director One [Member] | Restricted Stock Units (Rsus) [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | ' | ' | ' | 1,500 |
Manager Equity Plan [Member] | Independent Director Two [Member] | Restricted Stock Units (Rsus) [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | ' | ' | ' | 1,500 |
Manager Equity Plan [Member] | Independent Director Three [Member] | Restricted Stock Units (Rsus) [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | ' | ' | ' | 1,500 |
Manager Equity Plan [Member] | Independent Director [Member] | Restricted Stock Units (Rsus) [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | ' | ' | ' | 4,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | ' | ' | ' | 'the Companys independent directors, as part of their compensation for serving as independent directors, are eligible to receive 1,500 shares of restricted stock annually vesting in full on the anniversary of each grant date. |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | ' | ' | ' | $65,250 |
Common Stock Purchase Price | ' | ' | ' | $14.50 |
Manager Equity Plan [Member] | Manager [Member] | Restricted Stock Units (Rsus) [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | ' | ' | ' | 28,500 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | ' | ' | ' | $324,045 |
Common Stock Purchase Price | ' | ' | ' | $11.37 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | ' | ' | ' | 'One-third of these restricted common stock shares vest on each of the first, second and third anniversaries of the grant date. |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Distribution One [Member] | Distribution Two [Member] | Distribution Three [Member] | Distribution Four [Member] | Distribution Five [Member] | Distribution Six [Member] | Distribution Seven [Member] | Distribution Eight [Member] | |||
Declaration Date | ' | ' | 15-Feb-13 | 12-Mar-13 | 22-Apr-13 | 22-Apr-13 | 22-Apr-13 | 17-Jun-13 | 17-Jun-13 | 17-Jun-13 |
Record Date | ' | ' | 15-Feb-13 | 12-Mar-13 | 22-Apr-13 | 15-May-13 | 14-Jun-13 | 15-Jul-13 | 15-Aug-13 | 16-Sep-13 |
Payment Date | ' | ' | 27-Feb-13 | 28-Mar-13 | 29-Apr-13 | 30-May-13 | 27-Jun-13 | 30-Jul-13 | 29-Aug-13 | 27-Sep-13 |
Dividend Amount | $0 | $220,833 | $219,950 | $219,950 | $960,603 | $1,182,280 | $1,182,280 | $1,182,280 | $1,182,280 | $1,182,280 |
Cash Dividend Per Share (in dollars per share) | ' | ' | $0.04 | $0.04 | $0.17 | $0.21 | $0.21 | $0.21 | $0.21 | $0.21 |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS' EQUITY (Details Textual) (USD $) | 0 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | 8 Months Ended | 9 Months Ended | 8 Months Ended | 9 Months Ended | ||
Jul. 25, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | |
Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Preferred Stock [Member] | |||||
IPO [Member] | Manager [Member] | Xl Investments Ltd [Member] | ||||||||
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | 26,500,000 | ' | 4,033,333 | 1,500,000 | 25,000,000 | 100 |
Stock Issued During Period Offer Price New Issues | ' | ' | ' | ' | ' | ' | $15 | $1 | $1 | $1,000 |
Proceeds from Issuance of Private Placement | ' | ' | ' | ' | $26,177,089 | ' | $59,000,000 | ' | ' | ' |
Payments of Stock Issuance Costs | ' | ' | ' | ' | 322,911 | ' | 1,500,000 | ' | ' | ' |
Stockholders Equity, Reverse Stock Split | ' | ' | ' | ' | 'one-for-16 | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Reverse Stock Splits | ' | ' | ' | ' | 1,656,250 | ' | ' | ' | 1,666,667 | ' |
Stock Issued During Period Offer Price Reverse Stock Splits | ' | ' | ' | ' | ' | ' | ' | ' | $15 | ' |
Stock Issued During Period, Value, New Issues | ' | ' | ' | ' | ' | ' | 60,500,000 | ' | 25,000,000 | ' |
Preferred Stock, Dividend Rate, Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.50% |
Proceeds from Issuance of Preferred Stock and Preference Stock | ' | 0 | 10,041 | ' | ' | ' | ' | ' | ' | 67,500 |
Preferred Stock, Redemption Price Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,100 |
Preferred Stock, Redemption Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 110,000 |
Preferred dividends declared | ' | ' | -2,326 | ' | ' | 0 | ' | ' | ' | 0 |
Preferred Stock, Dividend Rate, Per-Dollar-Amount | ' | ' | $23.26 | ' | ' | ' | ' | ' | ' | ' |
Dividends Payable | ' | ' | $0 | $220,833 | ' | ' | ' | ' | ' | $7,311,903 |
Dividends Payable, Amount Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.28 |
Underwriters Payment Per Share Value | ' | ' | ' | ' | ' | ' | $0.60 | ' | ' | ' |
Common Stock Purchase Price | ' | ' | ' | ' | ' | ' | $15 | ' | ' | ' |
Warrants Exercise Price As Percentage Of IPOs Price | ' | ' | ' | 105.00% | ' | ' | ' | ' | ' | ' |
Warrants To Purchase Commonstock | ' | ' | ' | 3,125,000 | ' | ' | ' | ' | ' | ' |
Commonstock Exercise Price Description | 'at a per share exercise price equal to 105% of the $15.00 IPO price, or $15.75. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Numerator (Income): | ' | ' | ' | ' |
Net income (loss) available to common shareholders | ($17,014,568) | $3,656,161 | $3,441,901 | ($7,518,400) |
Dilutive net income (loss) attributable to common shareholders | ($17,014,568) | $3,656,161 | $3,441,901 | ($7,518,400) |
Denominator (Weighted Average Shares): | ' | ' | ' | ' |
Shares available to common shareholders | 7,356,250 | 1,656,250 | 1,656,250 | 5,685,920 |
Effect of dilutive securities: | ' | ' | ' | ' |
Restricted share awards | 4,100 | 0 | 0 | 9,961 |
Dilutive shares | 7,360,350 | 1,656,250 | 1,656,250 | 5,695,881 |
EARNINGS_PER_SHARE_Details_Tex
EARNINGS PER SHARE (Details Textual) (Restricted Stock Awards [Member]) | 3 Months Ended |
Sep. 30, 2013 | |
Restricted Stock Awards [Member] | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 28,900 |