Virginia
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54-1873198
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000-50230
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(State or Other Jurisdiction
of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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(Commission File Number)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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99.1
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Arlington Asset Investment Corp. Press Release dated October 26, 2011.
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ARLINGTON ASSET INVESTMENT CORP.
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Date: October 26, 2011
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By:
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/s/ Kurt R. Harrington | |
Name: | Kurt R. Harrington | ||
Title: |
Executive Vice President, Chief Financial Officer and Chief Accounting Officer
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Exhibit No.
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Description
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99.1
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Arlington Asset Investment Corp. Press Release dated October 26, 2011.
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Total Private-Label MBS
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Fair market value
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$183
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Fair market value (as a % of face value)
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65.3%
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Quarterly yield (as a % of amortized cost)
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16.5%
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Average cost (as a % of face value)
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48.8%
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Weighted average coupon
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5.4%
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Face value
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$281
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Amortized cost
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$140
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Purchase discount
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$134
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60+ delinquent
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20.0%
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Credit enhancement
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7.7%
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Severity (3-month)
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47.9%
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Constant prepayment rate (3-month)
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14.4%
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(1)
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Non-GAAP Financial Measures
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GAAP net loss
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$ | (11,643 | ) | |
Adjustments
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||||
Adjusted expenses(a)
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518 | |||
Stock compensation
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176 | |||
Net unrealized mark-to-market loss on trading MBS and hedge instruments
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20,675 | |||
Adjusted interest related to purchase discount accretion
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(1,048 | ) | ||
Non-GAAP core operating income
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$ | 8,678 | ||
Non-GAAP core operating income per share (diluted)
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$ | 1.12 |
(a)
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Adjusted expenses represents certain professional fees and income taxes that are not considered representative of routine activities of the Company.
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(2)
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Based on the annualized third quarter 2011 dividend and a Class A common stock closing price on the NYSE of $24.69 on October 26, 2011.
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(3)
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The Company's dividends are eligible for the 15% federal income tax rate on qualified dividend income, whereas dividends paid by a REIT are generally subject to the higher 35% tax rate on ordinary income. To provide the same return after payment of federal income tax as the Company, a REIT would be required to pay dividends providing a 19% yield.
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ARLINGTON ASSET INVESTMENT CORP.
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(Dollars in thousands, except per share data)
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Three Months Ended
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Nine Months Ended
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(Unaudited)
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September 30,
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September 30,
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||||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
INTEREST INCOME
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$ | 13,061 | $ | 10,150 | $ | 38,818 | $ | 29,401 | ||||||||
INTEREST EXPENSE
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Interest on short-term debt
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542 | 178 | 1,336 | 405 | ||||||||||||
Interest on long-term debt
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115 | 146 | 345 | 423 | ||||||||||||
Total interest expense
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657 | 324 | 1,681 | 828 | ||||||||||||
Net interest income
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12,404 | 9,826 | 37,137 | 28,573 | ||||||||||||
OTHER (LOSS) INCOME, NET
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||||||||||||||||
Investment (loss) gain, net
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(20,195 | ) | (2,089 | ) | (17,455 | ) | 642 | |||||||||
Other loss
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(4 | ) | (3 | ) | (11 | ) | (10 | ) | ||||||||
Total other (loss) income, net
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(20,199 | ) | (2,092 | ) | (17,466 | ) | 632 | |||||||||
Operating (loss) income before other expenses
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(7,795 | ) | 7,734 | 19,671 | 29,205 | |||||||||||
OTHER EXPENSES
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Compensation and benefits
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2,537 | 2,365 | 7,543 | 7,664 | ||||||||||||
Professional services
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441 | 233 | 1,125 | 993 | ||||||||||||
Business development
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19 | 19 | 98 | 58 | ||||||||||||
Occupancy and equipment
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93 | 90 | 281 | 294 | ||||||||||||
Communications
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51 | 44 | 147 | 156 | ||||||||||||
Other operating expenses
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448 | 387 | 1,168 | 1,684 | ||||||||||||
Total other expenses
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3,589 | 3,138 | 10,362 | 10,849 | ||||||||||||
(Loss) income before income taxes
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(11,384 | ) | 4,596 | 9,309 | 18,356 | |||||||||||
Income tax provision (benefit)
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259 | (560 | ) | 1,076 | (199 | ) | ||||||||||
Net (loss) income
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$ | (11,643 | ) | $ | 5,156 | $ | 8,233 | $ | 18,555 | |||||||
Basic (loss) earnings per share
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$ | (1.50 | ) | $ | 0.66 | $ | 1.07 | $ | 2.39 | |||||||
Diluted (loss) earnings per share
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$ | (1.50 | ) | $ | 0.65 | $ | 1.06 | $ | 2.35 | |||||||
Weighted average shares outstanding - basic (in thousands)
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7,748 | 7,755 | 7,711 | 7,768 | ||||||||||||
Weighted average shares outstanding - diluted (in thousands)
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7,748 | 7,887 | 7,737 | 7,904 |
ARLINGTON ASSET INVESTMENT CORP.
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||||||||
CONSOLIDATED BALANCE SHEETS
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(Dollars in thousands, except per share amounts)
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||||||||
(Unaudited)
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||||||||
ASSETS
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September 30, 2011
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December 31, 2010
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||||||
Cash and cash equivalents
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$ | 20,295 | $ | 12,412 | ||||
Receivables
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||||||||
Interest
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3,648 | 2,345 | ||||||
Other
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404 | 219 | ||||||
Mortgage-backed securities, at fair value
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||||||||
Available-for-sale
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183,509 | 252,909 | ||||||
Trading
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665,337 | 174,055 | ||||||
Other investments
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3,195 | 8,287 | ||||||
Derivative assets, at fair value
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246 | - | ||||||
Deposits
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71,305 | 4,748 | ||||||
Prepaid expenses and other assets
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739 | 358 | ||||||
Total assets
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$ | 948,678 | $ | 455,333 | ||||
LIABILITIES AND EQUITY
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Liabilities:
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||||||||
Repurchase agreements
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$ | 655,987 | $ | 190,220 | ||||
Interest payable
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283 | 187 | ||||||
Accrued compensation and benefits
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7,288 | 7,201 | ||||||
Dividend payable
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6,788 | 4,655 | ||||||
Derivative liabilities, at fair value
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61,845 | 2,398 | ||||||
Purchased securities payable
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- | 2,555 | ||||||
Accounts payable, accrued expenses and other liabilities
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16,048 | 16,373 | ||||||
Long-term debt
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15,000 | 15,000 | ||||||
Total liabilities
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763,239 | 238,589 | ||||||
Equity:
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||||||||
Common stock
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77 | 77 | ||||||
Additional paid-in capital
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1,506,050 | 1,505,971 | ||||||
Accumulated other comprehensive income, net of taxes
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43,252 | 63,495 | ||||||
Accumulated deficit
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(1,363,940 | ) | (1,352,799 | ) | ||||
Total equity
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185,439 | 216,744 | ||||||
Total liabilities and equity
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$ | 948,678 | $ | 455,333 | ||||
Book Value per Share
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$ | 23.93 | $ | 28.46 | ||||
Shares Outstanding (in thousands)
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7,748 | 7,617 |
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