10-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

(Mark One)
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to            

Commission File Number: 001-34374

ARLINGTON ASSET INVESTMENT CORP.

(Exact name of registrant as specified in its charter)

Virginia	54-1873198
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1001 Nineteenth Street North
Arlington, VA 22209
(Address of Principal Executive Offices) (Zip Code)
(703) 373-0200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class of Securities	Name of Each Exchange on Which Registered
Class A Common Stock, Par Value $0.01	New York Stock Exchange
6.625% Senior Notes due 2023	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files): Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer o Accelerated Filer x Non-Accelerated Filer o Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):Yes o No x

The aggregate market value of the registrant’s Class A and Class B common stock held by non-affiliates computed by reference to the last reported price at which the registrant’s Class A common stock was sold on the New York Stock Exchange on June 30, 2014 was approximately $516 million. There is no public trading market for the registrant’s Class B common stock; however, the Class B common stock is convertible into Class A common stock on a share-for-share basis.

As of January 30, 2015, there were 22,860,922 shares of the registrant’s Class A common stock outstanding and 105,869 shares of the registrant’s Class B common stock outstanding.

Documents incorporated by reference: Portions of the registrant’s Definitive Proxy Statement for the 2015 Annual Meeting of Shareholders (to be filed with the Securities and Exchange Commission no later than 120 days after the end of the registrant’s fiscal year end) are incorporated by reference in this Annual Report on Form 10-K in response to Part II, Item 5 and Part III, Items 10, 11, 12, 13 and 14.

TABLE OF CONTENTS

		Page
EXPLANATORY NOTE		1
	PART II
ITEM 8.	Financial Statements and Supplementary Data	2
	PART IV
ITEM 15.	Exhibits and Financial Statement Schedules	3
Signatures		5
Index to Consolidated Financial Statements of Arlington Asset Investment Corp.		F-1

EXPLANATORY NOTE

On February 9, 2015, Arlington Asset Investment Corp. (the “Company”) filed its annual report on Form 10-K for the fiscal year ended December 31, 2014 (“2014 Form 10-K”).

This Form 10-K/A filing is made solely for the purpose of correcting the inadvertent omission of our auditor’s signature on its Report of Independent Registered Public Accounting Firm in Item 8. At the time of filing of the 2014 Form 10-K, we had on-hand a manually signed and dated Report of Independent Registered Public Accounting Firm. There are no other changes to the Company’s 2014 Form 10-K.

1

PART II.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item appears in a subsequent section of this report. See “Index to Consolidated Financial Statements of Arlington Asset Investment Corp.” on page F-1.

2

PART IV.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) (1) Financial Statements.  The Arlington Asset Investment Corp. consolidated financial statements for the year ended December 31, 2014, included in “Item 8 — Financial Statements and Supplementary Data”, of this Annual Report on Form 10-K/A, are incorporated by reference into this Part IV, Item 15:

• Report of Independent Registered Public Accounting Firm (page F-2)

• Consolidated Balance Sheets — Years ended 2014 and 2013 (page F-3)

• Consolidated Statements of Comprehensive Income — Years ended 2014, 2013 and 2012 (page F-4)

• Consolidated Statements of Changes in Equity — Years ended 2014, 2013 and 2012 (page F-5)

• Consolidated Statements of Cash Flows — Years ended 2014, 2013 and 2012 (page F-8)

• Notes to Consolidated Financial Statements (page F-9)

(2) Financial Statement Schedules.  All schedules are omitted because they are not required or because the information is shown in the financial statements or notes thereto.

(3) Exhibits

Exhibit Number	Exhibit Title
3.01	Amended and Restated Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed on November 9, 2009).
3.02	Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on July 28, 2011).
3.03	Amendment No. 1 to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 4, 2015).
4.01	Indenture dated as of May 1, 2013 between the Company and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed on May 1, 2013).
4.02	First Supplemental Indenture dated as of May 1, 2013 between the Company and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K filed on May 1, 2013).
4.03	Form of Subordinated Indenture (incorporated by reference to Exhibit 4.4 of the Registration Statement on Form S-3 (333-107731) filed by Friedman, Billings, Ramsey Group Inc. on August 7, 2003).
4.04	Form of Senior Note (incorporated by reference to the Registrant’s Registration Statement on Form S-3 (133-171537).
4.05	Form of 6.625% Senior Notes due 2023 (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on May 1, 2013).
4.06	Form of Certificate for Class A Common Stock (incorporated by reference to Exhibit 4.01 of the Annual Report on Form 10-K filed on February 24, 2010).
4.07	Shareholder Rights Agreement, dated June 5, 2009 (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed on June 5, 2009).
10.01	Friedman, Billings, Ramsey Group, Inc. 2004 Long-Term Incentive Plan (incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on April 29, 2004).*
10.02	Friedman, Billings, Ramsey Group, Inc. 1997 Stock and Annual Incentive Plan (incorporated by reference to Exhibit 10.06 to Amendment No. 2 to the Registration Statement on Form S-1 (File No. 333-39107) filed by Friedman, Billings, Ramsey Group, Inc. on December 19, 1997).*
10.03	Friedman, Billings, Ramsey Group, Inc. Non-Employee Director Stock Compensation Plan (incorporated by reference to Exhibit 10.07 to Amendment No. 2 to the Registration Statement on Form S-1 (File No. 333-39107) filed by Friedman, Billings, Ramsey Group, Inc. on December 19, 1997).*
10.04	Friedman, Billings, Ramsey Group, Inc. Amended and Restated Non-Employee Director Stock Compensation Plan (incorporated by reference to Exhibit 10.04 to the Registrant’s Annual Report on Form 10-K filed on February 23, 2012).*

3

Exhibit Number	Exhibit Title
10.05	Arlington Asset Investment Corp. 2011 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 6, 2011).*
10.06	Arlington Asset Investment Corp. 2014 Long-Term Incentive Plan (incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed on July 15, 2014).
10.07	Form of Restricted Stock Unit Agreement under Arlington Asset Investment Corp. 2014 Long-Term Incentive Plan (incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed on July 15, 2014).
10.08	Form of Restricted Stock Award Agreement under Arlington Asset Investment Corp. 2014 Long-Term Incentive Plan (incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed on July 15, 2014).
10.09	Form of Performance Share Unit Award Agreement under Arlington Asset Investment Corp. 2014 Long-Term Incentive Plan (incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed on July 15, 2014).
10.10	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.08 to the Registrant’s Annual Report on Form 10-K filed on February 23, 2012).*
10.11	Equity Distribution Agreement, dated May 24, 2013, by and between the Company and RBC Capital Markets, LLC (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed on May 28, 2013).
10.12	Equity Distribution Agreement, dated May 24, 2013, by and between the Company and JMP Securities LLC (incorporated by reference to Exhibit 1.2 to the Registrant’s Current Report on Form 8-K filed on May 28, 2013).
10.13	Equity Distribution Agreement, dated May 24, 2013, by and between the Company and Ladenburg Thalmann & Co. Inc. (incorporated by reference to Exhibit 1.3 to the Registrant’s Current Report on Form 8-K filed on May 28, 2013).
10.14	Equity Distribution Agreement, dated May 24, 2013, by and between the Company and MLV & Co. LLC (incorporated by reference to Exhibit 1.4 to the Registrant’s Current Report on Form 8-K filed on May 28, 2013).
11.01	Statement regarding Computation of Per Share Earnings (included in Part II, Item 8, and Note 2 to the Registrant’s Consolidated Financial Statements).†
12.01	Computation of Ratio of Earnings to Fixed Charges. (incorporated by reference to Exhibit 12.01 to the Registrant’s Annual Report on Form 10-K filed on February 9, 2015).
21.01	List of Subsidiaries of the Registrant. (incorporated by reference to Exhibit 21.01 to the Registrant’s Annual Report on Form 10-K filed on February 9, 2015).
23.01	Consent of PricewaterhouseCoopers LLP. (incorporated by reference to Exhibit 23.01 to the Registrant’s Annual Report on Form 10-K filed on February 9, 2015).
24.01	Power of Attorney (incorporated by reference to the signature page to the Registrant’s Annual Report on Form 10-K filed on February 9, 2015).
31.01	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†
31.02	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.†
32.01	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†
32.02	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†
101.INS	INSTANCE DOCUMENT**
101.SCH	SCHEMA DOCUMENT**
101.CAL	CALCULATION LINKBASE DOCUMENT**
101.LAB	LABELS LINKBASE DOCUMENT**
101.PRE	PRESENTATION LINKBASE DOCUMENT**
101.DEF	DEFINITION LINKBASE DOCUMENT**

† Filed herewith.

* Compensatory plan or arrangement.

** Submitted electronically herewith. Attached as Exhibit 101 are the following materials from the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at December 31, 2014 and December 31, 2013; (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012; (iii) Consolidated Statements of Changes in Equity for the years ended December 31, 2014, 2013 and 2012; and (iv) Consolidated Statements of Cash Flows for the years ended 2014, 2013 and 2012.

4

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ARLINGTON ASSET INVESTMENT CORP.
Date: February 20, 2015	By:	/s/ J. ROCK TONKEL, JR.
	J. Rock Tonkel, Jr.
	President and Chief Executive Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/    J. ROCK TONKEL, JR.	President, Chief Executive Officer and Director	February 20, 2015
J. ROCK TONKEL, JR.	(Principal Executive Officer)
/s/    KURT R. HARRINGTON	Executive Vice President, Chief Financial Officer and Treasurer	February 20, 2015
KURT R. HARRINGTON	(Principal Financial Officer)
*	Executive Chairman of the Board	February 20, 2015
ERIC F. BILLINGS
*	Director	February 20, 2015
DANIEL J. ALTOBELLO
*	Director	February 20, 2015
DANIEL E. BERCE
*	Director	February 20, 2015
DAVID W. FAEDER
*	Director	February 20, 2015
PETER A. GALLAGHER
*	Director	February 20, 2015
RALPH S. MICHAEL III
* By: /s/ KURT R. HARRINGTON	Attorney-in-Fact	February 20, 2015
KURT R. HARRINGTON

5

FINANCIAL STATEMENTS OF ARLINGTON ASSET INVESTMENT CORP.

Index to Arlington Asset Investment Corp. Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2014 and 2013		F-3
Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012		F-4
Consolidated Statements of Changes in Equity for the years ended December 31, 2014, 2013 and 2012		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012		F-8
Notes to Consolidated Financial Statements		F-9

F-1

Report of Independent Registered Public Accounting Firm

To The Board of Directors and Shareholders of

Arlington Asset Investment Corp.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of comprehensive income, of changes in equity and of cash flows present fairly, in all material respects, the financial position of Arlington Asset Investment Corp. and its subsidiaries at December 31, 2014 and December 31, 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP
McLean, Virginia

February 9, 2015

F-2

ARLINGTON ASSET INVESTMENT CORP.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

	December 31,
	2014			2013
ASSETS
Cash and cash equivalents	$	33,832		$	48,628
Receivables
Interest		10,701			5,173
Other		1,138			212
Mortgage-backed securities, at fair value
Available-for-sale		267,477			341,346
Trading		3,414,300			1,576,452
Other investments		1,837			2,065
Derivative assets, at fair value		1,267			8,424
Deferred tax assets, net		122,365			165,851
Deposits		160,427			45,504
Prepaid expenses and other assets		1,145			1,311
Total assets	$	4,014,489		$	2,194,966
LIABILITIES AND EQUITY
Liabilities:
Repurchase agreements	$	3,179,775		$	1,547,630
Interest payable		1,106			774
Accrued compensation and benefits		6,067			5,584
Dividend payable		20,195			14,630
Derivative liabilities, at fair value		124,308			33,129
Accounts payable, accrued expenses and other liabilities		1,006			1,391
Long-term debt		40,000			40,000
Total liabilities		3,372,457			1,643,138
Commitments and contingencies (Note 7)		—			—
Equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued and outstanding		—			—
Class A common stock, $0.01 par value, 450,000,000 shares authorized, 22,860,922 and 16,047,965 shares issued and outstanding, respectively		229			160
Class B common stock, $0.01 par value, 100,000,000 shares authorized, 105,869 and 554,055 shares issued and outstanding, respectively		1			6
Additional paid-in capital		1,897,027			1,727,398
Accumulated other comprehensive income, net of taxes of $4,745 and $9,436, respectively		42,793			53,190
Accumulated deficit		(1,298,018	)		(1,228,926	)
Total equity		642,032			551,828
Total liabilities and equity	$	4,014,489		$	2,194,966

The accompanying notes are an integral part of these consolidated financial statements.

F-3

ARLINGTON ASSET INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands except per share amounts)

	Year Ended December 31,
	2014			2013			2012
Interest income	$	123,547		$	87,019		$	64,154
Interest expense
Interest on short-term debt		9,181			6,899			4,475
Interest on long-term debt		2,210			1,630			490
Total interest expense		11,391			8,529			4,965
Net interest income		112,156			78,490			59,189
Other loss, net
Investment loss, net		(38,672	)		(47,745	)		(10,723	)
Other loss		(15	)		(15	)		(15	)
Total other loss, net		(38,687	)		(47,760	)		(10,738	)
Operating income before other expenses		73,469			30,730			48,451
Other expenses
Compensation and benefits		13,467			11,195			10,339
Professional services		1,529			2,561			4,118
Business development		253			145			136
Occupancy and equipment		422			427			467
Communications		201			191			202
Other operating expenses		2,197			2,072			2,184
Total other expenses		18,069			16,591			17,446
Income before income taxes		55,400			14,139			31,005
Income tax provision (benefit)		49,446			(35,322	)		(152,937	)
Net income	$	5,954		$	49,461		$	183,942
Basic earnings per share	$	0.30		$	3.09		$	18.02
Diluted earnings per share	$	0.29		$	3.06		$	17.96
Weighted-average shares outstanding (in thousands)
Basic		20,043			15,990			10,205
Diluted		20,397			16,189			10,242
Other comprehensive income, net of taxes
Unrealized gains (losses) for the period on available-for-sale securities (net of taxes of $432, $12,664, and $(1,215), respectively)	$	679		$	19,894		$	(1,909	)
Reclassification
Included in investment gain (loss), net, in the statement of comprehensive income related to sales of available-for-sale securities (net of taxes of $(5,293), $(4,162), and $(4,488), respectively)		(11,343	)		(6,537	)		(7,050	)
Included in investment gain (loss), net, in the statement of comprehensive income related to other-than-temporary charges on available-for-sale securities (net of taxes of $170, $527, and $6,110, respectively)		267			827			9,598
Comprehensive (loss) income	$	(4,443	)	$	63,645		$	184,581

The accompanying notes are an integral part of these consolidated financial statements.

F-4

ARLINGTON ASSET INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Dollars in thousands)

	Class A Common Stock (#)			Class A Amount  ($)		Class B Common  Stock (#)			Class B Amount  ($)		Additional Paid-In Capital			Accumulated Other Comprehensive Income		Accumulated Deficit			Total
Balances, December 31, 2011		7,099,336		$	71		566,112		$	6	$	1,508,713		$	38,367	$	(1,363,785	)	$	183,372
Net income		—			—		—			—		—			—		183,942			183,942
Conversion of Class B shares to Class A shares		12,057			—		(12,057	)		—		—			—		—			—
Issuance of Class A common stock		5,493,750			55		—			—		129,194			—		—			129,249
Repurchase of Class A common stock		(41,790	)		—		—			—		(786	)		—		—			(786	)
Forfeitures of Class A common stock		(2,383	)		—		—			—		(55	)		—		—			(55	)
Amortization of Class A common shares issued as stock-based awards		—			—		—			—		995			—		—			995
Other comprehensive income
Net change in unrealized gain on available-for-sale investment securities, (net of taxes of $407)		—			—		—			—		—			639		—			639
Dividends declared		—			—		—			—		—			—		(40,063	)		(40,063	)
Balances, December 31, 2012		12,560,970		$	126		554,055		$	6	$	1,638,061		$	39,006	$	(1,219,906	)	$	457,293

The accompanying notes are an integral part of these consolidated financial statements.

F-5

ARLINGTON ASSET INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY – (continued)

(Dollars in thousands)

	Class A Common Stock (#)			Class A Amount ($)		Class B Common Stock (#)		Class B Amount ($)		Additional Paid-In Capital			Accumulated Other Comprehensive Income		Accumulated Deficit			Total
Balances, December 31, 2012		12,560,970		$	126		554,055	$	6	$	1,638,061		$	39,006	$	(1,219,906	)	$	457,293
Net income		—			—		—		—		—			—		49,461			49,461
Issuance of Class A common stock		3,492,667			34		—		—		86,930			—		—			86,964
Forfeitures of Class A common stock		(5,672	)		—		—		—		(142	)		—		—			(142	)
Amortization of Class A common shares issued as stock-based awards		—			—		—		—		2,549			—		—			2,549
Other comprehensive income
Net change in unrealized gain on available-for-sale investment securities, (net of taxes of $9,029)		—			—		—		—		—			14,184		—			14,184
Dividends declared		—			—		—		—		—			—		(58,481	)		(58,481	)
Balances, December 31, 2013		16,047,965		$	160		554,055	$	6	$	1,727,398		$	53,190	$	(1,228,926	)	$	551,828

The accompanying notes are an integral part of these consolidated financial statements.

F-6

 ARLINGTON ASSET INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY – (continued)

(Dollars in thousands)

	Class A Common Stock (#)			Class A Amount ($)		Class B Common Stock (#)			Class B Amount ($)			Additional Paid-In Capital			Accumulated Other Comprehensive Income			Accumulated Deficit			Total
Balances, December 31, 2013		16,047,965		$	160		554,055		$	6		$	1,727,398		$	53,190		$	(1,228,926	)	$	551,828
Net income		—			—		—			—			—			—			5,954			5,954
Conversion of Class B shares to Class A shares		448,186			5		(448,186	)		(5	)		—			—			—			—
Issuance of Class A common stock		6,419,247			64		—			—			166,819			—			—			166,883
Forfeitures of Class A common stock		(54,476	)		—		—			—			(1,478	)		—			—			(1,478	)
Amortization of Class A common shares issued as stock-based awards		—			—		—			—			3,813			—			—			3,813
Other comprehensive income
Net change in unrealized gain on available-for-sale investment securities, (net of taxes of $(4,691))		—			—		—			—			—			(10,397	)		—			(10,397	)
Dividends declared		—			—		—			—			—			—			(75,046	)		(75,046	)
Income tax benefit from stock-based compensation		—			—		—			—			475			—			—			475
Balances, December 31, 2014		22,860,922		$	229		105,869		$	1		$	1,897,027		$	42,793		$	(1,298,018	)	$	642,032

The accompanying notes are an integral part of these consolidated financial statements.

F-7

ARLINGTON ASSET INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

	Year Ended December 31,
	2014			2013			2012
Cash flows from operating activities
Net income	$	5,954		$	49,461		$	183,942
Adjustments to reconcile net income to net cash provided by operating activities
Investment loss, net		38,672			47,745			10,723
Net discount accretion on mortgage-backed securities		(12,570	)		(9,302	)		(9,888	)
Deferred tax provision		48,177			70,727			7,884
Release of valuation allowance on deferred tax assets		—			(91,189	)		(162,281	)
Reversal of unrecognized tax benefit related to uncertain tax position and related accrued interest		—			(16,212	)		—
Other		2,336			2,460			614
Changes in operating assets
Interest receivable		(5,528	)		(304	)		(2,503	)
Other receivables		(906	)		432			(389	)
Prepaid expenses and other assets		(6,328	)		3,600			750
Changes in operating liabilities
Accounts payable, accrued expenses and other liabilities and interest payable		(340	)		(92	)		1,457
Accrued compensation and benefits		483			4,042			(4,634	)
Net cash provided by operating activities		69,950			61,368			25,675
Cash flows from investing activities
Purchases of available-for-sale mortgage-backed securities		—			(167,682	)		(54,709	)
Purchases of trading mortgage-backed securities		(2,030,995	)		(1,221,387	)		(1,359,536	)
Proceeds from sales of available-for-sale mortgage-backed securities		86,318			69,337			34,102
Proceeds from sales of trading mortgage-backed securities		65,251			914,155			352,437
Receipt of principal payments on available-for-sale mortgage-backed securities		2,378			5,238			6,628
Receipt of principal payments on trading mortgage-backed securities		212,049			165,056			83,038
(Payments for) proceeds from derivatives and deposits, net		(150,446	)		42,210			(29,814	)
Payments for purchased securities payable		—			—			(15,820	)
Proceeds from sold securities receivable		—			26,773			41,321
Other		412			132			1,668
Net cash used in investing activities		(1,815,033	)		(166,168	)		(940,685	)
Cash flows from financing activities
Proceeds from repurchase agreements, net		1,632,145			50,439			849,214
Proceeds from stock issuance, net		167,148			86,964			129,249
Proceeds from long-term debt issuance, net		—			24,038			—
Dividends paid		(69,481	)		(43,850	)		(46,848	)
Repurchase of common stock		—			—			(786	)
Excess tax benefits associated with stock-based awards		475			—			—
Net cash provided by financing activities		1,730,287			117,591			930,829
Net (decrease) increase in cash and cash equivalents		(14,796	)		12,791			15,819
Cash and cash equivalents, beginning of year		48,628			35,837			20,018
Cash and cash equivalents, end of year	$	33,832		$	48,628		$	35,837
Supplemental Cash Flow Information
Cash payments for interest	$	10,959		$	8,272		$	4,888
Cash payments for taxes	$	2,309		$	667		$	833

The accompanying notes are an integral part of these consolidated financial statements.

F-8

ARLINGTON ASSET INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Note 1. Organization and Nature of Operations:

Arlington Asset Investment Corp. and its consolidated subsidiaries (the Company or AAIC), formerly known as Friedman, Billings, Ramsey Group, Inc. (FBR Group), is a Virginia corporation. The Company acquires and holds mortgage-related and other assets. The Company’s portfolio consists primarily of agency-backed mortgage-backed securities (agency-backed MBS) and private-label residential mortgage-backed securities (private-label MBS).

Note 2. Summary of Significant Accounting Policies:

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in the consolidated financial statements and notes for prior periods have been reclassified to conform to the current year’s presentation. These reclassifications had no impact on the previously reported net income, other comprehensive income, total assets or total liabilities.

Use of Estimates

The preparation of the Company’s financial statements, in conformity with accounting principles generally accepted in the United States of America (GAAP), requires the Company to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although the Company based the estimates and assumptions on historical experience, when available, market information, and on various other factors that the Company believes to be reasonable under the circumstances, management exercises significant judgment in the final determination of the estimates. Actual results may differ from these estimates.

Cash Equivalents

Cash equivalents include demand deposits with banks, money market accounts and highly liquid investments with original maturities of three months or less that are not held for sale in the ordinary course of business. As of December 31, 2014 and 2013, approximately 99% and 89%, respectively, of the Company’s cash equivalents were invested in money market funds that invest primarily in U.S. Treasuries and other securities backed by the U.S. government.

Financial Instruments

MBS transactions are recorded as purchases and sales on the date the securities are settled unless the transaction qualifies as a regular-way trade, in which case the transactions are accounted for as purchases or sales on a trade date basis. Any amounts payable or receivable for unsettled trades are recorded as “sold securities receivable” or “purchased securities payable” in the consolidated balance sheets.

Investments in MBS and marketable equity securities, if any, are classified as either available-for-sale or trading investments pursuant to accounting principles related to accounting for certain investments in debt and equity securities. These investments are carried at fair value with resulting unrealized gains and losses on available-for-sale securities reflected in accumulated other comprehensive income (loss) in the consolidated balance sheets and unrealized gains and losses on trading securities reflected in investment gain (loss), net, in the consolidated statements of comprehensive income. Investments in equity securities of non-public companies are carried at cost.

Although the Company generally intends to hold its MBS until maturity, it may, from time to time, sell any of its MBS as part of the overall management of its business. The available-for-sale designation provides the Company with the flexibility to sell its MBS in order to act on potential market opportunities or changes in economic conditions to ensure future liquidity and to meet other general corporate purposes as they arise.

Impairments

The Company evaluates available-for-sale securities for other-than-temporary impairment (OTTI) charges at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. In general, when the fair value of an available-for-sale security is less than its amortized cost at the reporting date, the security is considered impaired. In evaluating these available-for-sale securities for OTTI charges, consideration is given to (1) the length of time and the extent to which the fair value has been lower than carrying value, (2) the severity of the decline in fair value, (3) the financial condition and near-term prospects of the issuer, (4) the Company’s intent to sell, and (5) whether it is more-likely-than-not the Company would be required to sell the security before anticipated recovery.

F-9

If the Company intends to sell an impaired security, or it is more-likely-than-not that it will be required to sell the impaired security before its anticipated recovery, then the Company must recognize OTTI charges through earnings equal to the entire difference between the investment security’s amortized cost and its fair value at the reporting date. If the Company does not expect to sell an other-than-temporarily impaired security, only the portion of the OTTI related to credit losses is recognized through charges to earnings with the remainder recognized through other accumulated comprehensive income/(loss) on the consolidated balance sheet. Impairments recognized through other comprehensive income/(loss) do not impact earnings. Following the recognition of an OTTI through earnings, a new cost basis is established for the investment security and may not be adjusted for subsequent recoveries in fair value through earnings. However, OTTI recognized through charges to earnings may be accreted back to the amortized cost basis of the investment security on a prospective basis through interest income. The determination as to whether an OTTI exists and, if so, the amount of credit impairment recognized in earnings is subjective, as such determination is based on factual information available at the time of assessment as well as the Company’s estimates of the future performance and cash flow projections. As a result, the timing and amount of OTTIs constitute material estimates that are susceptible to significant change.

For available-for-sale, agency-backed MBS, if it is determined that the impairment is other-than- temporary, then the amount that the fair value is below its amortized cost basis is recorded as an impairment charge and recorded through the Company’s earnings. For unrealized losses that are determined to be temporary, a further evaluation is performed to determine the credit portion of the OTTI and the credit portion is recorded through the Company’s statement of comprehensive income.

For available-for-sale, private-label MBS securities that have been acquired at discounts to face value due in part to credit deterioration since origination, the Company re-evaluates the undiscounted expected future cash flows and the changes in cash flows from those originally projected at the time of purchase or when last revised. The discount rate used to calculate the present value of expected future cash flows is the current yield used for income recognition purposes as compared to the discount rate used to calculate the fair value of the investment security is the current expected market rate. For those securities in an unrealized loss position, the difference between the carrying value and the net present value of expected future cash flows is recorded as OTTI charges through the Company’s statement of comprehensive income.

Fair Value of Financial Instruments

The accounting principles related to fair value measurements define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3) as described below:

Level 1 Inputs —   Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company;

Level 2 Inputs —   Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

Level 3 Inputs —   Unobservable inputs for the asset or liability, including significant assumptions of the Company and other market participants.

The Company determines fair values for the following assets and liabilities:

Mortgage-backed securities (MBS), at fair value — 

Agency-backed MBS — The Company’s mortgage-backed securities (MBS), the principal and interest payments on which are guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, agency-backed MBS), are generally classified within Level 2 of the fair value hierarchy as they are valued after considering quoted market prices provided by a broker or dealer, or alternative pricing sources with reasonable levels of price transparency. The Company reviews broker or pricing service quotes to determine whether the quotes are relevant, for example, whether an active market exists to provide price transparency or whether the quote is an indicative price or a binding offer. The independent brokers and dealers providing market prices are those who make markets in or specialists with expertise in the valuation of these financial instruments.

Private-label MBS — The Company classifies non-agency-backed, or private-label, MBS within Level 3 of the fair value hierarchy because they trade infrequently and, therefore, have little or no price transparency. The Company utilizes present value techniques based on estimated cash flows of the instrument taking into consideration various assumptions derived by management and other assumptions used by other market participants. These assumptions are corroborated by evidence such as historical data, risk characteristics, transactions in similar instruments, and completed or pending transactions, when available. The significant inputs in the Company’s valuation process include default rate, loss severity, prepayment rate and discount rate. In general, significant increases (decreases) in default rate, loss severity or discount rate, in isolation, would result in a significantly lower (higher) fair value measurement. However, significant increases (decreases) in prepayment rate may result in a significantly higher (lower) fair value measurement. It is difficult to generalize the interrelationships between these significant inputs as the actual results could differ considerably on an individual security basis. For example, an increase in the default rate may not increase the loss severity rate if actual losses are lower than the average. Also, changes in discount rates may be greatly influenced by market expectation at any given point based upon many variables not directly related to the MBS market. Therefore, each significant input is closely analyzed to ascertain the reasonableness for the Company’s valuation purposes.

F-10

Establishing fair value is inherently subjective given the volatile and sometimes illiquid markets for these private-label MBS and requires management to make a number of assumptions, including assumptions about the future of interest rates, prepayment rates, discount rates, credit loss rates, and the timing of cash flows and credit losses. The assumptions the Company applies are specific to each security. Although the Company relies on its internal calculations to compute the fair value of these private-label MBS, the Company requests and considers indications of value, or the mark, from third-party dealers and the actual sales of private-label MBS to assist in the valuation process and calibrate the Company’s model.

Other investments  — The Company’s other investments, which are classified within Level 3 of the fair value hierarchy, consist of investments in equity securities, investment funds and other MBS-related securities, such as interest-only MBS.

Derivative instruments  — In the normal course of the Company’s operations, the Company is a party to various financial instruments that are accounted for as derivatives in accordance with ASC 815, Derivatives and Hedging (ASC 815). The derivative instruments that trade in active markets or exchanges are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Other derivative instruments are generally classified within Level 2 of the fair value hierarchy because they are valued using broker or dealer quotations, which are model-based calculations based on market-based inputs, including, but not limited to, contractual terms, market prices, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs.

Other  — Cash and cash equivalents, interest receivable, deposits, other receivable, interest payable, accounts payable, accrued expenses and other liabilities are reflected in the consolidated balance sheets at their amortized cost (which approximates fair value because of the short term nature of these instruments) and classified within Level 1 of the fair value hierarchy, except for certain cash equivalents that are held in money market funds that are classified within Level 2 of the fair value hierarchy.

Sold securities receivable, repurchase agreements and purchased securities payable are reflected in the consolidated balance sheets at the cost basis, which approximates fair value because of the short term nature of these instruments, and classified within Level 2 of the fair value hierarchy.

Long-term debt represents remaining balances of trust preferred debt and senior debt issued by the Company. Trust preferred debt is classified within Level 3 of the fair value hierarchy as the fair value is determined after considering quoted market prices provided by a broker or dealer. The independent brokers or dealers providing market prices are those who make markets in or specialists with expertise in the valuation of these financial instruments. The Company’s senior debt, which is publicly traded on the New York Stock Exchange, is classified within Level 1 of the fair value hierarchy.

The estimated fair values of the Company’s financial instruments are as follows:

	December 31, 2014				December 31, 2013
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets
Cash and cash equivalents	$	33,832	$	33,832	$	48,628	$	48,628
Interest receivable		10,701		10,701		5,173		5,173
Other receivables		1,138		1,138		212		212
MBS
Agency-backed MBS		3,414,340		3,414,340		1,576,499		1,576,499
Private-label MBS
Senior securities		—		—		7,066		7,066
Re-REMIC securities		267,437		267,437		334,233		334,233
Derivative assets		1,267		1,267		8,424		8,424
Other investments		1,837		1,837		2,065		2,065
Deposits		160,427		160,427		45,504		45,504
Financial liabilities
Repurchase agreements		3,179,775		3,179,775		1,547,630		1,547,630
Interest payable		1,106		1,106		774		774
Long-term debt		40,000		39,200		40,000		36,620
Derivative liabilities		124,308		124,308		33,129		33,129
Accounts payable, accrued expenses and other liabilities		1,006		1,006		1,391		1,391

F-11

Repurchase Agreements

Securities sold under agreements to repurchase, which are treated as financing transactions for financial reporting purposes, are collateralized by MBS and are carried at their contractual amounts, including accrued interest, as specified in the respective agreements. Under the repurchase agreements, the Company pledges its securities as collateral to secure the borrowing, which is equal in value to a specified percentage of the fair value of the pledged collateral, while the Company retains beneficial ownership of the pledged collateral. At the maturity of a repurchase financing, the Company is required to repay the borrowing and receives back its pledged collateral from the counterparty. The counterparty to the repurchase agreements may require that the Company pledge additional securities or cash as additional collateral to secure borrowings when the value of the collateral declines.

Interest Income and Purchase Premiums and Discounts on MBS Securities

Interest income includes contractual coupon payments and the amortization of purchase premiums and accretion of discounts, if any, on the available-for-sale MBS portfolio. Interest income also includes contractual coupon payments on the trading MBS portfolio. Purchase premiums or discounts, if any, on the trading MBS portfolio are accounted for under mark-to-market accounting and the changes in value are recorded in investment gain (loss), net, on the statement of comprehensive income.

Interest income on the private-label MBS that were purchased at a discount to face value is recognized based on the security’s expected effective interest rate. At acquisition, the accretable yield is calculated as the difference between the undiscounted expected cash flows and the purchase price which is expected to be accreted into interest income over the remaining life of the security on a level-yield basis. The difference between the contractually required payments and the undiscounted expected cash flows represents the non-accretable difference. Based on actual payment activities and changes in estimates of undiscounted expected future cash flows, the accretable yield and the non-accretable difference can change over time. Significant increases in the amount or timing of undiscounted expected future cash flows are recognized prospectively as an adjustment to the accretable yield. As a result, the Company may recognize higher non-cash interest income over the security’s holding period and may not realize the level of interest income recognized using the higher accretion rates. In addition, the Company may be subject to more frequent and higher non-cash OTTI charges than actual losses realized on the security as a result.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with accounting principles related to share-based payment which requires fair value method of accounting. Under the fair value based method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. Expected forfeitures are included in determining share-based employee compensation cost. Share-based awards that do not require future services are expensed immediately.

Depending on the Company’s stock price at the time restricted stock units vest, the actual tax deduction benefit may be more or less than the carrying amount of the previously recorded deferred tax asset. An increase to the tax benefit (windfall) is generated when the tax deduction exceeds the recorded deferred tax asset. This incremental excess tax benefits are recorded as an increase to additional paid-in capital. Conversely, a decrease in tax benefit (shortfall) is generated when the tax deduction is below the recorded deferred tax asset. These incremental expense results in additional income tax expense, unless it can be offset by accumulated windfall tax benefit recorded in additional paid-in capital. The gross windfall tax benefit is presented in the consolidated statements of cash flows as financing cash inflows.

Performance-Based Long-Term Incentive Program

On August 13, 2012, the Compensation Committee of the Board of Directors of the Company (the Compensation Committee) adopted a performance-based long-term incentive program (Performance-based Program) that provides for the issuance of two types of performance share units (PSUs).

The Compensation Committee established performance goals under the Performance-based Program. Two types of PSUs may be awarded under the Performance-based Program: Book Value PSUs and Total Shareholder Return Units (TSR PSUs). The Book Value PSUs are eligible to vest based on the compound annualized growth in the Company’s book value per share (i.e., book value change with such adjustments as determined and approved by the Compensation Committee plus dividends on a reinvested basis) during the applicable performance period. The TSR PSUs are eligible to vest based on the Company’s compound annualized total shareholder return (i.e., share price change plus dividends on a reinvested basis) during the applicable performance period.

The Company accounts for the Performance-based Program in accordance with ASC 718. Therefore, the Book Value PSUs are valued at the grant date market value and the estimated compensation cost is recorded over the vesting period. The Company estimates the number of shares to be issued under the Book Value PSUs on a quarterly basis based on the actual and projected results for the remaining vesting period and any adjustments required are recognized retrospectively and over the remaining vesting period.

The TSR PSUs are also valued at the time of grant based on valuation model and the estimated compensation cost is recorded over the vesting period using straight-line basis. The valuation of the TSR PSUs is performed using Monte-Carlo simulation model (Model) using various assumptions including beginning average price, expected volatility, dividend equivalents, dividend yield, and risk-free rate of return. The Model projects stock prices on a daily basis assuming 250 trading days per year. The Model generates many future stock price paths to construct a distribution of where future stock prices might be. No remeasurement of compensation expense is required for the TSR PSUs.

The compensation costs are reversed if an employee is terminated prior to completing the required service period. The estimated shares to be granted under the Performance-based Program are included in the calculation of diluted Earnings Per Share.

F-12

Income Taxes

Income taxes are provided for using the asset and liability method. Deferred tax assets and liabilities represent the differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates. The measurement of net deferred tax assets is adjusted by a valuation allowance if, based on the Company’s evaluation, it is more-likely-than-not that they will not be realized. The Company recognizes tax positions in the financial statements only when it is more-likely-than-not that the position will be sustained upon examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more-likely-than-not be realized upon settlement. A liability is established for differences between positions taken in a tax return and the financial statements.

The Company is subject to federal alternative minimum tax (AMT) and state and local taxes on its taxable income and gains that are not offset by the net operating loss (NOL) and net capital loss (NCL) carry-forwards.

Other Comprehensive Income

Comprehensive income includes net income as currently reported by the Company on the consolidated statements of comprehensive income adjusted for other comprehensive income. Other comprehensive income for the Company represents changes in unrealized gains and losses related to the Company’s MBS and other mortgage related assets accounted for as available-for-sale with changes in fair value recorded through shareholders’ equity.

Earnings Per Share

Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted-average number of common shares outstanding for the respective period. Diluted earnings per share includes the impact of dilutive securities such as stock options, unvested shares of restricted stock and performance share units. The following table presents the computations of basic and diluted earnings per share for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
	2014				2013				2012
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Weighted average shares outstanding Common stock (in thousands)		20,043		20,043		15,990		15,990		10,205		10,205
Stock options, performance share units, and unvested restricted stock (in thousands)		—		354		—		199		—		37
Weighted average common and common equivalent shares outstanding (in thousands)		20,043		20,397		15,990		16,189		10,205		10,242
Net income applicable to common stock	$	5,954	$	5,954	$	49,461	$	49,461	$	183,942	$	183,942
Net income per common share	$	0.30	$	0.29	$	3.09	$	3.06	$	18.02	$	17.96

There were no outstanding options to purchase shares of common stock at December 31, 2014, 2013 and 2012. The diluted earnings per share for the years ended December 31, 2014, 2013 and 2012 did not include the antidilutive effect of 42,570, 26,218 and 27,808 shares, respectively, of awarded restricted stock units, stock options, and restricted stock.

Recent Accounting Pronouncements

On April 10, 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. This standard was effective for the Company on January 1, 2015. The Company does not expect significant impact to the financial statements upon implementation of ASU No. 2014-08.

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard will be effective for the Company on January 1, 2017. Early application is not permitted. The Company is currently evaluating the impact of ASU No. 2014-09.

On August 27, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is intended to define management’s responsibility to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern and to provide related footnote disclosures. This standard will be effective for the Company for the year ending on December 31, 2016. Early application is permitted. The Company is currently evaluating the impact of ASU No. 2014-15.

F-13

Note 3. Financial Instruments:

Fair Value Hierarchy

The following tables set forth financial instruments accounted for under ASC 820 by level within the fair value hierarchy as of December 31, 2014 and December 31, 2013. As required by ASC 820, assets and liabilities that are measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Financial Instruments Measured at Fair Value on a Recurring Basis

	December 31, 2014
	Total			Level 1			Level 2		Level 3
MBS, at fair value
Trading
Agency-backed MBS	$	3,414,300		$	—		$	3,414,300	$	—
Available-for-sale
Agency-backed MBS		40			—			40		—
Private-label MBS
Senior securities		—			—			—		—
Re-REMIC securities		267,437			—			—		267,437
Total available-for-sale		267,477			—			40		267,437
Total MBS		3,681,777			—			3,414,340		267,437
Derivative assets, at fair value		1,267			751			516		—
Derivative liabilities, at fair value		(124,308	)		(124,308	)		—		—
Interest-only MBS, at fair value		212			—			—		212
Total	$	3,558,948		$	(123,557	)	$	3,414,856	$	267,649

	December 31, 2013
	Total			Level 1			Level 2			Level 3
MBS, at fair value
Trading
Agency-backed MBS	$	1,576,452		$	—		$	1,576,452		$	—
Available-for-sale
Agency-backed MBS		47			—			47			—
Private-label MBS
Senior securities		7,066			—			—			7,066
Re-REMIC securities		334,233			—			—			334,233
Total available-for-sale		341,346			—			47			341,299
Total MBS		1,917,798			—			1,576,499			341,299
Derivative assets, at fair value		8,424			8,088			336			—
Derivative liabilities, at fair value		(33,129	)		(32,156	)		(973	)		—
Interest-only MBS, at fair value		298			—			—			298
Total	$	1,893,391		$	(24,068	)	$	1,575,862		$	341,597

The total financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $267,649, or 6.67% and $341,597, or 15.56%, of the Company’s total assets as of December 31, 2014 and 2013, respectively.

There were no transfers of securities in or out of Levels 1, 2 or 3 during the years ended December 31, 2014 and 2013.

Level 3 Financial Instruments Measured at Fair Value on a Recurring Basis

The fair value of the Company’s Level 3, available-for-sale, private-label MBS was $267,437 and $341,299 as of December 31, 2014 and 2013, respectively. The private-label MBS are primarily senior and re-REMIC tranches in securitization trusts issued between 2005 and 2010. The senior securities represent interests in securitizations that have the first right to cash flows and absorb losses last. The re-REMIC securities represent interests in re-securitizations of senior MBS and pro-rata mezzanine securities. For re-REMIC securities, the cash flows from, and any credit losses absorbed by, the underlying MBS are allocated among the re-REMIC securities issued in the re-securitization transactions based on the re-REMIC structure. For example, prime and non-prime residential senior securities have been resecuritized to create a two-tranche structure with a re-REMIC senior security and a re-REMIC subordinated security. In these re-REMIC securities, all principal payments from the underlying securities are directed to the re-REMIC senior security until the face value is fully paid off. Thereafter, all principal payments are directed to the re-REMIC subordinated security. For pro-rata mezzanine securities, principal payments from the underlying MBS are typically allocated concurrently and proportionally to the mezzanine securities along with senior securities. The re-REMIC subordinated and mezzanine securities absorb credit losses, if any, first; however, these credit losses occur only when credit losses exceed the credit protection provided to the underlying securities. Senior, re-REMIC and mezzanine securities receive interest while any face value is outstanding.

F-14

The Company’s private-label MBS were collateralized by residential prime and Alt-A mortgage loans and had the following weighted average characteristics, based on face value, as of the dates indicated:

	December 31,
	2014			2013
Original loan-to-value		68	%		69	%
Original FICO score		722			725
Three-month prepayment rate		11	%		14	%
Three-month loss severities		41	%		37	%
Weighted average coupon		2.96	%		3.34	%

The significant unobservable inputs for the valuation model include the following weighted-averages, based on face value, as of the dates indicated:

	December 31, 2014						December 31, 2013
	Senior Securities (1)			Re-REMIC Securities			Senior Securities			Re-REMIC Securities
Discount rate		—	%		5.55	%		6.00	%		6.55	%
Default rate		—	%		3.09	%		9.30	%		3.62	%
Loss severity rate		—	%		42.25	%		50.00	%		44.82	%
Prepayment rate		—	%		11.23	%		16.30	%		11.69	%

⁽¹⁾ The Company did not own any senior securities on December 31, 2014.

The ranges of the significant unobservable inputs for the valuation model were as follows as of the dates indicated:

	December 31, 2014						December 31, 2013
	Senior  Securities (1)			Re-REMIC Securities			Senior Securities			Re-REMIC Securities
Discount rate		—	%		5.15 – 10.00	%		6.00	%		6.00 – 10.00	%
Default rate		—	%		1.00 – 8.80	%		9.30	%		0.95 – 9.60	%
Loss severity rate		—	%		29.23 – 57.50	%		50.00	%		29.15 – 57.50	%
Prepayment rate		—	%		7.40 – 17.70	%		16.30	%		6.40 – 19.00	%

⁽¹⁾ The Company did not own any senior securities on December 31, 2014.

The tables below set forth a summary of changes in the fair value and gains and losses of the Company’s Level 3 financial assets and liabilities that are measured at fair value on a recurring basis for the years ended December 31, 2014 and 2013.

	Year Ended December 31, 2014
	Senior Securities			Re-REMIC Securities			Total
Beginning balance, January 1, 2014	$	7,066		$	334,233		$	341,299
Total net gains (losses)
Included in earnings		1,690			15,553			17,243
Included in other comprehensive income		(1,654	)		(13,437	)		(15,091	)
Purchases		—			—			—
Sales		(7,029	)		(79,289	)		(86,318	)
Payments, net		(319	)		(14,994	)		(15,313	)
Accretion of discount		246			25,371			25,617
Ending balance, December 31, 2014	$	—		$	267,437		$	267,437
The amount of net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$	—		$	(420	)	$	(420	)

F-15

	Year Ended December 31, 2013
	Senior Securities			Re-REMIC Securities			Total
Beginning balance, January 1, 2013	$	7,519		$	191,567		$	199,086
Total net gains (losses)
Included in earnings		—			16,526			16,526
Included in other comprehensive income		(254	)		23,469			23,215
Purchases		—			167,682			167,682
Sales		—			(69,337	)		(69,337	)
Payments, net		(1,092	)		(21,362	)		(22,454	)
Accretion of discount		893			25,688			26,581
Ending balance, December 31, 2013	$	7,066		$	334,233		$	341,299
The amount of net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$	—		$	(1,270	)	$	(1,270	)

Gains and losses included in earnings for the years ended December 31, 2014 and 2013 are reported in the following statement of comprehensive income line descriptions:

	Other Loss, Investment Loss, net
	2014			2013
Total gains (losses) included in earnings for the period	$	17,243		$	16,526
Change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$	(420	)	$	(1,270	)

Level 3 Financial Instruments Measured at Fair Value on a Non-Recurring Basis

The Company also measures certain financial assets at fair value on a non-recurring basis. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to impairments. Due to the nature of these financial assets, enterprise values are primarily used to value these financial assets. In determining the enterprise value, the Company analyzes various financial, performance and market factors to estimate fair value, including where applicable, market trading activity. As a result, these financial assets are classified within Level 3 of the fair value hierarchy. As of December 31, 2014 and 2013, these financial assets are classified within the other investments category, represent the Company’s interest in non-public equity securities and investment funds and are valued at $1,625 and $1,767, respectively. For the year ended December 31, 2013, the Company recorded a loss of $177 in the carrying value of these financial assets. For the year ended December 31, 2014, there were no changes to the carrying value of these financial assets.

MBS, at Fair Value

MBS, at fair value ⁽¹⁾⁽²⁾, consisted of the following as of the dates indicated:

	December 31, 2014											December 31, 2013
	Fair Value		Net Unamortized Premium (Discount)			Percent of Total Fair Value			Weighted Average Life		Weighted Average Rating (3)	Fair Value		Net Unamortized Premium (Discount)			Percent of Total Fair Value			Weighted Average Life		Weighted Average Rating (3)
Trading
Fannie Mae	$	2,064,465	$	—			56.07	%		8.1	AAA	$	997,488	$	—			52.01	%		9.4	AAA
Freddie Mac		1,349,835		—			36.66	%		8.2	AAA		578,964		—			30.19	%		9.6	AAA
Available-for-sale:
Agency-backed
Fannie Mae		40		—			—			4.9	AAA		47		—			—			5.8	AAA
Private-label
Senior securities		—		—			—			—	—		7,066		(4,789	)		0.37	%		4.8	C-
Re-REMIC securities		267,437		(133,333	)		7.27	%		10.4	NR		334,233		(202,450	)		17.43	%		11.4	NR
	$	3,681,777	$	(133,333	)		100.00	%				$	1,917,798	$	(207,239	)		100.00	%

⁽¹⁾ The Company’s MBS portfolio was primarily comprised of fixed-rate MBS at December 31, 2014 and 2013. The weighted-average coupon of the MBS portfolio at December 31, 2014 and 2013 was 3.93% and 3.90%, respectively.

⁽²⁾ As of December 31, 2014 and 2013, the Company’s MBS investments with a fair value of $3,376,025 and $1,673,911, respectively, were pledged as collateral for repurchase agreements.

F-16

⁽³⁾ The securities issued by Fannie Mae and Freddie Mac are not rated by any rating agency; however, they are commonly thought of as having an implied rating of “AAA.” There is no assurance, particularly given the downgrade of the U.S. credit rating to “AA+” by Standard & Poor’s during the quarter ended September 30, 2011 and Fitch Ratings Inc.’s announcement on October 15, 2013 that it had placed the U.S. credit rating on negative watch, that these securities would receive such a rating if they were ever rated by a rating agency. The weighted-average rating of the Company’s private-label senior securities is calculated based on face value of the securities.

The Company has generally purchased private-label MBS at a discount. The Company, at least on a quarterly basis, estimates the future expected cash flows based on the Company’s observation of current information and events and applies a number of assumptions related to prepayment rates, interest rates, default rates, loss severity rates, and the timing and amount of cash flows and credit losses. These assumptions are difficult to predict as they are subject to uncertainties and contingencies related to future events that may impact the Company’s estimates and its interest income.

Interest income on the private-label MBS that were purchased at a discount to face value is recognized based on the security’s expected effective interest rate. At acquisition, the accretable yield is calculated as the difference between the undiscounted expected cash flows and the purchase price which is expected to be accreted into interest income over the remaining life of the security on a level-yield basis. The difference between the contractually required payments and the undiscounted expected cash flows represents the non-accretable difference. Based on actual payment activities and changes in estimates of undiscounted expected future cash flows, the accretable yield and the non-accretable difference can change over time. Significant increases in the amount or timing of undiscounted expected future cash flows are recognized prospectively as an adjustment to the accretable yield.

The following table presents the changes in the accretable yield on available-for-sale, private-label MBS for the years ended December 31, 2014 and 2013:

	Year Ended December 31,
	2014			2013(1)
Beginning balance	$	326,330		$	207,853
Accretion of discount		(25,617	)		(26,581	)
Reclassifications, net		(21,848	)		62,141
Acquisitions		—			150,646
Sales		(76,757	)		(67,729	)
Ending balance	$	202,108		$	326,330

⁽¹⁾ The reclassification, net, and ending balance as of December 31, 2013 were revised from the previously reported balances of $46,319 and $310,508, respectively, to correct an immaterial error.

The Company acquired no available-for-sale, private-label MBS during 2014. For the available-for-sale, private-label MBS acquired during the year ended December 31, 2013, the contractually required payments receivable, the cash flow expected to be collected, and the fair value at the acquisition date were as follows:

	Year Ended December 31, 2013
Contractually required payments receivable	$	420,500
Cash flows expected to be collected		318,328
Basis in acquired securities		167,682

The Company’s available-for-sale MBS are carried at fair value in accordance with ASC 320, Debt and Equity Securities (ASC 320), the securities with resulting unrealized gains and losses reflected as other comprehensive income or loss. Gross unrealized gains and losses on these securities were the following as of the dates indicated:

	December 31, 2014
	Amortized Cost/Cost		Unrealized				Fair Value
	Basis (1)		Gains		Losses
Agency-backed MBS	$	36	$	4	$	—	$	40
Private-label MBS
Senior securities		—		—		—		—
Re-REMIC securities		219,904		47,533		—		267,437
Total	$	219,940	$	47,537	$	—	$	267,477

⁽¹⁾ The amortized cost of MBS includes unamortized net discounts of $133,333 at December 31, 2014.

F-17

	December 31, 2013
	Amortized Cost/Cost		Unrealized					Fair Value
	Basis (1)		Gains		Losses
Agency-backed MBS	$	43	$	4	$	—		$	47
Private-label MBS
Senior securities		5,412		1,654		—			7,066
Re-REMIC securities		273,264		60,970		(1	)		334,233
Total	$	278,719	$	62,628	$	(1	)	$	341,346

⁽¹⁾ The amortized cost of MBS includes unamortized net discounts of $207,239 at December 31, 2013.

For the years ended December 31, 2014 and 2013, the Company recorded other-than-temporary impairment charges of $420 and $1,270, respectively, as a component of investment loss, net, on the consolidated statements of comprehensive income related to deterioration in credit quality on available-for-sale, private-label MBS with a cost basis of $2,174 and $11,688, respectively, prior to recognizing the other-than-temporary impairment charges.

The following table presents a summary of other-than-temporary impairment charges included in earnings for the periods indicated and cumulative other-than-temporary impairment charges recognized on the MBS held as of the dates indicated:

	Year Ended December 31,
	2014			2013
Cumulative other-than-temporary impairment, beginning balance	$	23,663		$	23,768
Additions
Other-than-temporary impairments not previously recognized		420			380
Increases related to other-than-temporary impairments on securities with previously recognized other-than-temporary impairments		—			890
Reductions
Decreases related to other-than-temporary impairments on sold securities with previously recognized other-than-temporary impairments		(5,180	)		(1,375	)
Cumulative other-than-temporary impairment ending balance	$	18,903		$	23,663

The following table presents the results of sales of MBS for the periods indicated:

	Year Ended December 31,
	2014				2013
	Agency-Backed MBS		Private-Label MBS		Agency-Backed MBS		Private-Label MBS
Proceeds from sales	$	65,251	$	86,318	$	914,155	$	69,337
Gross gains		1,351		17,397		1,619		17,458
Gross losses		—		140		27,406		—

Other Investments

The Company’s other investments consisted of the following as of the dates indicated:

	December 31,
	2014		2013
Interest-only MBS	$	212	$	298
Non-public equity securities		975		975
Investments funds		650		792
Total other investments	$	1,837	$	2,065

For the years ended December 31, 2014 and 2013, the Company recorded other-than-temporary impairment charges of $29 and $84, respectively, as a component of investment loss, net, on the consolidated statements of comprehensive income on an investment in interest-only MBS.

F-18

Note 4. Borrowings:

Repurchase Agreements

The Company has entered into repurchase agreements to fund its investments in MBS. Securities sold under agreements to repurchase, which are treated as financing transactions for financial reporting purposes, are collateralized by MBS and are carried at their contractual amounts, including accrued interest, as specified in the respective agreements. Under the repurchase agreements, the Company pledges its securities as collateral to secure the borrowing, which is equal in value to a specified percentage of the fair value of the pledged collateral, while the Company retains beneficial ownership of the pledged collateral. The counterparty to the repurchase agreements may require that the Company pledge additional securities or cash as additional collateral to secure borrowings when the value of the collateral declines.

As of December 31, 2014 and December 31, 2013, the Company had no amount at risk with a single repurchase agreement counterparty or lender greater than 10% of equity. The following table provides information regarding the Company’s outstanding repurchase agreement borrowings as of the dates and periods indicated:

	December 31,
	2014			2013
Outstanding balance	$	3,179,775		$	1,547,630
Value of assets pledged as collateral
Agency-backed MBS		3,300,383			1,556,763
Private-label MBS		75,642			117,148
Net amount (1)		196,250			126,281
Weighted-average rate		0.40	%		0.45	%
Weighted-average term to maturity		14.1 days			13.2 days
Weighted-average outstanding balance during the year ended	$	2,438,479		$	1,515,137
Weighted-average rate during the year ended		0.37	%		0.45	%

⁽¹⁾ Net amount represents the value of collateral in excess of corresponding repurchase obligation. The amount of collateral at-risk is limited to the outstanding repurchase obligation and not the entire collateral balance.

Long-Term Debt

As of December 31, 2014 and 2013, the Company had $40,000 of outstanding long-term debentures. On May 1, 2013, the Company completed a public offering of $25,000 of its 6.625% Senior Notes due in 2023 and received net proceeds of $24,038 after payment of underwriting discounts and commissions and expenses. These Senior Notes will mature on May 1, 2023, and may be redeemed in whole or in part at any time and from time to time at the Company’s option on or after May 1, 2016, at a redemption price equal to the principal amount redeemed plus accrued and unpaid interest. The interest payments on these Senior Notes are payable quarterly on February 1, May 1, August 1, and November 1 of each year, beginning on August 1, 2013. These Senior Notes are publicly traded on the New York Stock Exchange under the ticker symbol “AIW”. The Company’s long-term debentures consisted of the following as of the dates indicated:

	December 31, 2014						December 31, 2013
	Senior Notes			Trust Preferred Debt			Senior Notes			Trust Preferred Debt
Outstanding Principal	$	25,000		$	15,000		$	25,000		$	15,000
Annual Interest Rate		6.625	%		LIBOR+2.25-3.00	%		6.625	%		LIBOR+2.25-3.00	%
Interest Payment Frequency		Quarterly			Quarterly			Quarterly			Quarterly
Weighted-Average Interest Rate		6.625	%		2.98	%		6.625	%		2.99	%
Maturity		May 1, 2023			2033 – 2035			May 1, 2023			2033 – 2035
Early Redemption Date		May 1, 2016			2008 – 2010			May 1, 2016			2008 – 2010

Note 5. Derivative Financial Instruments and Hedging Activities:

In the normal course of its operations, the Company is a party to financial instruments that are accounted for as derivative financial instruments in accordance with ASC 815. These instruments may include interest rate swaps, Eurodollar futures, swap futures, and U.S. Treasury futures contracts, put options and certain commitments to purchase and sell MBS. The exchange traded derivatives such as Eurodollar futures and swap futures are cash settled on a daily basis. The Company may be required to pledge collateral for margin requirements with third-party custodians in connection with certain derivative transactions. These transactions are not under master netting agreements. In addition, certain features of the securitization structures of the Company’s private-label MBS are considered derivatives under ASC 815. The Company determined that these embedded derivatives have de minimis value, if any.

F-19

During the years ended December 31, 2014 and 2013, the Company entered into various financial contracts to hedge certain MBS and related borrowings and other long-term debt. These financial contracts are not designated as hedges under ASC 815. The changes in fair value on these derivatives are recorded to net investment (loss) gain, net, in the statement of comprehensive income. For the years ended December 31, 2014 and 2013, the Company recorded net (losses) gains of $(140,353) and $58,003, respectively, on these derivatives. The Company held the following derivative instruments as of the dates indicated:

	December 31, 2014					December 31, 2013
	Notional Amount		Fair Value			Notional Amount		Fair Value
No hedge designation
Eurodollar futures
Derivative assets	$	2,445,000	$	751		$	8,758,000	$	4,361
Derivative liabilities		38,645,000		(76,848	)		6,787,000		(30,638	)
Total Eurodollar futures (1)		41,090,000		(76,097	)		15,545,000		(26,277	)
10-year swap futures
Derivative assets		—		—			635,500		3,727
Derivative liabilities		1,145,000		(47,460	)		31,000		(18	)
Total 10-year swap futures (2)		1,145,000		(47,460	)		666,500		3,709
5-year U.S. Treasury note futures		—		—			100,000		(1,500	)
Commitment to purchase MBS (3)		200,000		516			169,511		(973	)
Commitment to sell MBS		—		—			125,000		336

⁽¹⁾ The $41,090,000 total notional amount of Eurodollar futures contracts as of December 31, 2014 represents the accumulation of Eurodollar futures contracts that mature on a quarterly basis between 2015 and 2019. As of December 31, 2014, the Company maintained $96,147 as a deposit and margin against the open Eurodollar futures contracts.

⁽²⁾ The $1,145,000 represents the total notional amount of 10-year swap futures as of December 31, 2014, of which $780,000 of notional amount matures in March 2015 and $365,000 in notional amount matures in March 2024. As of December 31, 2014, the Company maintained $64,280 as a deposit and margin against the open 10-year swap futures contracts.

⁽³⁾ The total notional amount of commitment to purchase MBS represents forward commitments to purchase fixed-rate MBS securities.

Note 6. Income Taxes:

The Company is taxed as a C corporation for federal income tax purposes.

The provision (benefit) for income taxes from operations consists of the following for the years ended December 31, 2014, 2013 and 2012:

	2014		2013			2012
Federal	$	41,819	$	(20,075	)	$	(115,321	)
State		7,627		(15,247	)		(37,616	)
	$	49,446	$	(35,322	)	$	(152,937	)
Current	$	796	$	(14,860	)	$	1,889
Deferred		48,650		(20,462	)		(154,826	)
	$	49,446	$	(35,322	)	$	(152,937	)

F-20

Deferred tax assets and (liabilities) consisted of the following as of December 31, 2014 and 2013:

	2014			2013
Net operating loss carry-forward	$	57,225		$	71,214
Unrealized gains and losses on investments and derivatives, net		24,434			70,221
AMT credit		7,244			6,328
Accrued compensation		1,515			436
Realized gains and losses on designated derivatives, net		2,733			8,681
Other, net		582			4,303
Capital loss carry-forward		54,659			19,743
Valuation allowance on capital loss carry-forward		(26,027	)		(15,075	)
Net deferred tax asset	$	122,365		$	165,851

The provision (benefit) for income taxes results in effective tax rates that differ from the federal statutory rates. The reconciliation of the Company and its subsidiaries income tax attributable to net income computed at federal statutory rates to income tax expense was:

	December 31,
	2014			2013			2012
Federal income tax at statutory rate	$	19,390		$	4,949		$	10,852
State income taxes, net of federal benefit		2,161			849			1,813
Expiration of capital loss carryover		4,668			57,254			37,935
Reversal of unrecognized tax benefit related to uncertain tax position and related accrued interest, and related AMT credits		—			(11,028	)		—
Federal liability on state deferred tax assets		—			1,237			7,884
Losses on MBS acquired prior to 2012		(1,178	)		—			—
Tax basis adjustments		(1,656	)		—			—
Other, net		34			2,606			945
Valuation allowance		26,027			(91,189	)		(212,366	)
Total income tax provision (benefit)	$	49,446		$	(35,322	)	$	(152,937	)

During the year ended December 31, 2012, the Company recorded $152,937 of income tax benefit as a result of releasing $162,519 of valuation allowance previously provided for certain deferred tax assets. The amount of the valuation allowance released by the Company represents a portion of deferred tax assets that was deemed more-likely-than-not that the Company will realize the benefits based on the analysis where the positive evidences outweighed the negative evidences. The Company’s framework for assessing the recoverability of deferred tax assets required consideration of all available evidence, including: 

• the sustainability of recent operating profitability;

• the predictability of future operating profitability of the character necessary to realize the deferred tax assets; and

• the carry-forward periods for the net operating loss and capital loss carry-forwards.

The determination to release valuation allowance as of December 31, 2012 was based upon the Company meeting the criteria in the framework.

Effective December 31, 2013, the Company contributed 40 of its private-label MBS with $367,642 in face value in a taxable contribution (Contribution) to Rosslyn REIT Trust. Rosslyn REIT Trust (formerly known as FBR REIT Asset Trust) was formed on December 27, 2007 as a Maryland real estate investment trust and elected to be taxed as a REIT for U.S. federal income tax purposes effective January 1, 2014, upon filing its federal income tax return for that year. The Company owns all the common shares of Rosslyn REIT Trust and all of the preferred shares are owned by outside investors. The Contribution resulted in taxable capital gains of $68,041. The Company utilized net capital loss carry-forwards to offset the capital gain recognized on the Contribution for tax purposes.

With the completion of IRS examination of the Company’s tax years 2009 and 2010 without any adjustment and the expiration of the statute of limitation on 2009 state tax return, the Company reversed $12,810 of unrecognized tax benefits related to an uncertain tax position and $3,402 of related accrued interest during the year ended December 31, 2013. The Company also reversed deferred taxes associated with accrued interest and AMT credits of $5,184 related to the unrecognized tax benefits previously recorded.

As of December 31, 2014, the Company had an NCL carry-forward of $140,512 that can be used to offset future capital gains. $50,754 of capital losses expired in 2014. In addition, as of December 31, 2014, the Company had an NOL carry-forward of $147,107, which can be used to offset future taxable income. The NOL carry-forward will begin to expire in 2027. The valuation allowance relates to the estimated amount of NCLs that are more-likely-than-not to expire unused in 2019.

F-21

As of December 31, 2014 and 2013, the Company had no unrecognized tax benefits.

As of December 31, 2014, the Company has assessed the need for recording a provision for any uncertain tax position and has made the determination that such provision is not necessary.

The Company is subject to examination by the U.S. Internal Revenue Service (IRS), and state and local authorities in jurisdictions where the Company has significant business operations.

Note 7. Commitments and Contingencies:

Contractual Obligations

The Company has contractual obligations to make future payments in connection with borrowings and non-cancelable lease agreements and other contractual commitments. The following table sets forth these contractual obligations by fiscal year:

	2015		2016		2017		2018		2019		Thereafter		Total
Borrowings (1)	$	—	$	—	$	—	$	—	$	—	$	40,000	$	40,000
Minimum rental and other contractual commitments (2)		15		446		458		471		483		497		2,370
	$	15	$	446	$	458	$	471	$	483	$	40,497	$	42,370

⁽¹⁾ This table excludes interest payments to be made on the Company’s long-term debt securities. Based on the weighted average interest rate of 3.01%, approximately $113 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $15,000 of trust preferred debt. Interest on the trust preferred debt is based on the 3-month LIBOR; therefore, actual coupon interest will likely differ from this estimate. The trust preferred debt will mature beginning in October 2033 through July 2035. As of December 31, 2014, approximately $414 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $25,000 of Senior Notes. The Senior Notes have an annual interest rate of 6.625% and will mature on May 1, 2023.

⁽²⁾ Equipment and office rent expense for 2014, 2013 and 2012 was $249, $243 and $263, respectively.

The Company also has short-term repurchase agreement liabilities of $3,179,775 as of December 31, 2014. See Note 4 for further information.

Note 8. Shareholders’ Equity:

The Company has authorized share capital of 450,000,000 shares of Class A common stock, par value $0.01 per share; 100,000,000 shares of Class B common stock, par value $0.01 per share; and 25,000,000 shares of undesignated preferred stock. Holders of the Class A and Class B common stock are entitled to one vote and three votes per share, respectively, on all matters voted upon by the shareholders. Shares of Class B common stock convert to shares of Class A common stock at the option of the Company in certain circumstances including (i) upon sale or other transfer, (ii) at the time the holder of such shares of Class B common stock ceases to be affiliated with the Company and (iii) upon the sale of such shares in a registered public offering. The Company’s Board of Directors has the authority, without further action by the shareholders, to issue preferred stock in one or more series and to fix the terms and rights of the preferred stock. Such actions by the Board of Directors could adversely affect the voting power and other rights of the holders of common stock. Preferred stock could thus be issued quickly with terms that could delay or prevent a change in control of the Company or make removal of management more difficult. At present, the Company has no plans to issue any preferred stock.

Conversion of Class B Common Stock to Class A Common Stock

During the year ended December 31, 2014, several holders of the Company's Class B common stock converted an aggregate of 448,186 shares of Class B common stock into 448,186 shares of Class A common stock. There were no conversions of shares of Class B common stock into shares of Class A common stock during the year ended December 31, 2013. Holders of shares of Class A common stock are entitled to one vote for each share on all matters voted on by shareholders, and the holders of shares of Class B common stock are entitled to three votes per share on all matters voted on by shareholders. Under the Company's Articles of Incorporation, shares of Class B common stock are convertible into shares of Class A common stock on a one-for-one basis.

F-22

Share Repurchases

From time to time, the Company repurchases shares of its Class A common stock under a share repurchase program authorized by the Board of Directors in July 2010 (Repurchase Program), pursuant to which the Company is authorized to repurchase up to 500,000 shares of its Class A common stock.

Repurchases under the Repurchase Program may be made from time to time on the open market and in private transactions at management’s discretion in accordance with applicable federal securities laws. The timing of repurchases and the exact number of shares of Class A common stock to be repurchased will depend upon market conditions and other factors. The Repurchase Program is funded using the Company’s cash on hand and cash generated from operations. The Repurchase Program has no expiration date and may be suspended or terminated at any time without prior notice.

The Company had no share repurchase activities during the years ended December 31, 2014 and 2013. During the year ended December 31, 2012, the Company repurchased 41,790 shares of its Class A common stock with an average price of $18.79 per share, resulting in total cost of $786.

As of December 31, 2014, and 2013, 205,485 shares of Class A common stock remain available for repurchases under the Repurchase Program.

Equity Offerings

During the years ended December 31, 2014 and 2013, the Company completed public offerings as follows:

Closing date of the offering	March 13, 2013		March 28, 2014		September 8, 2014
Shares sold to public		3,000,000		2,750,000		2,750,000
Shares sold pursuant to the underwriter over-allotment		450,000		312,500		412,500
Total shares of Class A common stock		3,450,000		3,062,500		3,162,500
Public offering price per share	$	25.50	$	27.40	$	27.61
Net proceeds (1)	$	86,964	$	81,669	$	85,214

⁽¹⁾ Net of underwriting discounts and commissions and expenses.

Dividends

Pursuant to the Company’s variable dividend policy, the Board of Directors evaluates dividends on a quarterly basis and, in its sole discretion, approves the payment of dividends. The Company’s dividend payments, if any, may vary significantly from quarter to quarter. The Board of Directors has approved and the Company has declared the following dividends to date in 2014:

Quarter Ended	Dividend Amount		Declaration Date	Record Date	Pay Date
December 31	$	0.875	December 18	December 31	January 30, 2015
September 30		0.875	September 17	September 29	October 31
June 30		0.875	June 11	June 30	July 31
March 31		0.875	March 13	March 31	April 30

The Board of Directors has approved and the Company declared and paid the following dividends for 2013:

Quarter Ended	Dividend Amount		Declaration Date	Record Date	Pay Date
December 31	$	0.875	December 19	December 31	January 31, 2014
September 30		0.875	September 18	September 30	October 31
June 30		0.875	June 17	June 28	July 31
March 31		0.875	March 15	March 28	April 30

Long-Term Incentive Plan

On April 7, 2014, the Board of Directors adopted the Arlington Asset Investment Corp. 2014 Long-Term Incentive Plan (2014 Plan). The 2014 Plan was approved by the Company’s shareholders and became effective on July 15, 2014.

Under the 2014 Plan, a maximum number of 2,000,000 shares of Class A common stock of the Company, subject to adjustment as set forth in the 2014 Plan, were authorized for issuance and may be issued to employees, directors, consultants and advisors of the Company and its affiliates. As of December 31, 2014, 1,998,774 shares remained available for issuance under the 2014 Plan. The 2014 Plan replaced the Arlington Asset Investment Corp. 2011 Long-Term Incentive Plan (2011 Plan). No additional grants will be made under the 2011 Plan. However, previous grants under the 2011 Plan will remain in effect subject to the terms of the 2011 Plan and the applicable award agreement, and shares of Class A common stock may be issued under the 2011 Plan. The shares of Class A common stock to be issued under the 2011 Plan are subject to the achievement of performance measures and/or vesting. As of December 31, 2014 and December 31, 2013, 308,934 and 443,504 shares, respectively, remained available for issuance under the 2011 Plan.

F-23

Under the 2014 Plan, the Compensation Committee of the Company’s Board of Directors may grant options, stock appreciation rights (SARs), restricted stock and restricted stock units (RSUs), performance awards and/or other stock-based awards. However, no participant may be granted (i) options or SARs during any twelve month period covering more than 300,000 shares or (ii) restricted stock, RSUs, performance awards and/or other stock-based awards denominated in shares that are intended to qualify as performance based compensation under Section 162(m) that permit the participant to earn more than 300,000 shares for each twelve months in the vesting or period on which performance is measured (Performance Period). These share limits are subject to adjustment in the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, reverse stock split, spin-off, extraordinary cash dividend or similar transaction or other change in corporate structure affecting the share. In addition, during any calendar year no participant may be granted performance awards that are denominated in cash and that are intended to qualify as performance based compensation under Section 162(m) under which more than $10,000 may be earned for each twelve months in the Performance Period. Each of the individual award limits described in this paragraph will be multiplied by two during the first calendar year in which the participant commences employment with the Company and its affiliates. The 2014 Plan will terminate on the tenth anniversary of its effective date unless sooner terminated by the Board of Directors. The Company uses a fair value based measurement method in accounting for all share based payment transactions.

Performance-Based Long-Term Incentive Program

On August 13, 2012, the Compensation Committee of the Board of Directors of the Company adopted a performance-based long-term incentive program (Performance-based Program) that provides for the issuance of two types of performance share units (PSUs).

The Compensation Committee established performance goals under the Performance-based Program. Two types of PSUs may be awarded under the Performance-based Program: Book Value PSUs and Total Shareholder Return Units (TSR PSUs). The Book Value PSUs are eligible to vest based on the compound annualized growth in the Company’s book value per share (i.e., book value change with such adjustments as determined and approved by the Compensation Committee plus dividends on a reinvested basis) during the applicable performance period. The TSR PSUs are eligible to vest based on the Company’s compound annualized total shareholder return (i.e., share price change plus dividends on a reinvested basis) during the applicable performance period.

PSUs do not have any voting rights. No dividends are paid on outstanding PSUs during the applicable performance period. Instead, dividend equivalents are accrued on outstanding PSUs during the applicable performance period, deemed invested in shares of Class A common stock and are paid out in shares of Class A common stock at the end of the performance period to the extent that the underlying PSUs vest. Upon settlement, vested PSUs are converted into shares of the Company’s Class A common stock on a one-for-one basis. The PSUs and dividend equivalents are settled in whole shares of Class A common stock with a cash payment in lieu of any fractional share.

The right to receive shares of Class A common stock upon vesting of PSUs at the end of the applicable performance period is subject to both continued employment and the achievement of the Company performance goals established by the Compensation Committee. The employment requirement, but not the performance requirement, is waived in the event the awardee dies, becomes disabled or retires; provided, however, that if the awardee dies, becomes disabled or retires before the first anniversary of the grant date, the number of PSUs that are earned under the performance targets are pro-rated. If an awardee is terminated without “cause,” the Compensation Committee, in the exercise of its discretion, determines whether any of the PSUs have been earned, provided that the Compensation Committee may not approve a payout that exceeds the number of PSUs earned under the performance targets. In the event of a change of control, the number of PSUs that are earned for each performance period are determined immediately prior to the change of control based on actual performance and vests subject to continued employment for the remainder of the original performance period, subject to accelerated vesting in certain circumstances.

Except as described above or as the Compensation Committee at any time may otherwise determine, an awardee will forfeit the right to any PSUs if he or she terminates employment before the payment date.

The Compensation Committee of the Board of Directors of the Company approved the following grants to the participants in the Performance-based Program:

	Year Ended December 31,
	2012		2013		2014
Grant date	August 13, 2012		July 1, 2013		July 1, 2014
Shares granted
Book Value PSUs		30,177		34,221		35,126
TSR PSUs		41,735		34,567		35,593

F-24

For the grants made in 2012 (2012 PSU Grants), the Compensation Committee awarded PSUs with an aggregate grant date fair value equal to 75% of the awardee’s base salary, with 50% of the total grant date fair value represented by Book Value PSUs and 50% of the total grant date fair value represented by TSR PSUs. To facilitate the implementation of the Performance-based Program, the Compensation Committee established both a two-year and three-year performance period for the initial grant of PSUs. A portion of the Book Value PSUs and TSR PSUs are eligible for vesting at the end of the second year following the grant date, and a portion of the Book Value PSUs and TSR PSUs are eligible for vesting at the end of the third year following the grant date. The actual number of shares of Class A common stock that will be issued to each participant at the end of the applicable performance period will vary between 0% and 200% of the number of PSUs granted, depending on performance results. If the threshold level of performance goals are not achieved, no PSUs are earned. If the initial performance threshold is met, participants will be eligible to receive 50% of the granted PSUs for Company performance at the threshold level, 100% of the granted PSUs for Company performance at the target level and 200% of the granted PSUs for Company performance at the maximum level, with linear interpolation for achievement falling between the performance levels. During 2014, the Company issued 37,725 and 52,424 shares for the vesting of Book Value PSUs and TSR PSUs, respectively, related to the 2012 PSU Grants.

For the grants made in 2013 (2013 PSU Grants) and 2014 (2014 PSU Grants), the Compensation Committee awarded PSUs with an aggregate grant date fair value equal to 100% of the awardee’s base salary, with 50% of the total grant date fair value represented by Book Value PSUs and 50% of the total grant date fair value represented by TSR PSUs. The Compensation Committee established a three-year performance period. The Book Value PSUs and TSR PSUs will be eligible for vesting at the end of the third year following the respective grant dates. The actual number of shares of Class A common stock that will be issued to each participant at the end of the applicable performance period will vary between 0% and 250% of the number of PSUs granted, depending on performance results. If the threshold level of performance goals are not achieved, no PSUs are earned. If the initial performance threshold is met, participants will be eligible to receive 50% of the granted PSUs for Company performance at the threshold level, 100% of the granted PSUs for Company performance at the target level and 250% of the granted PSUs for Company performance at the maximum level, with linear interpolation for achievement falling between the performance levels.

The Company recorded $2,457 and $1,485 in compensation expenses related to the Performance-based Program during the years ended December 31, 2014 and 2013, respectively.

Restricted Stock

The Company grants restricted common shares to employees that vest ratably over a three year period or cliff-vest after two to four years for various purposes based on continued employment over these specified periods. As of December 31, 2014 and 2013, a total of 117,112 and 57,673 shares, respectively, of such restricted Class A common stock were outstanding with unamortized deferred compensation of $2,181 and $838, respectively. A summary of these unvested restricted stock awards is presented below:

	Number of Shares			Weighted-average Grant-date Fair Value		Weighted- average Remaining Vested Period
Share Balance as of December 31, 2011		15,206		$	35.40		2.0
Granted		25,500			22.99		—
Forfeitures		—			—		—
Vestitures		(5,871	)		47.60		—
Share Balance as of December 31, 2012		34,835			24.24		2.2
Granted		36,000			26.74		—
Forfeitures		—			—		—
Vestitures		(13,162	)		24.65		—
Share Balance as of December 31, 2013		57,673			25.71		2.0
Granted		84,602			26.84		—
Forfeitures		—			—		—
Vestitures		(25,163	)		25.64		—
Share Balance as of December 31, 2014		117,112			26.54		1.9

For the years ended December 31, 2014, 2013, and 2012, the Company recognized $927, $632 and $279, respectively, of compensation expense related to this restricted stock plan.

In addition, as part of the Company’s satisfaction of incentive compensation earned for past service under the Company’s variable compensation programs, employees may receive restricted Class A common stock in lieu of cash payments. These restricted Class A common stock shares are issued to an irrevocable trust and are not returnable to the Company. No such shares were issued in 2014, 2013 and 2012. As of December 31, 2014, 2013, and 2012, the Company had 9,155 vested shares with an weighted-average grant-date fair value of $310.40 of the undistributed restricted stock issued to the trust.

F-25

Director Stock Compensation Plan

The Company also grants options, stock or restricted stock units (RSUs) in lieu of or in addition to annual director fees to non-employee directors. The Board approved annual awards of RSUs equal in value to $80 to each director to be made in conjunction with the annual shareholders meeting. On June 6, 2014, the non-employee directors received an annual grant of an aggregate of 14,440 RSUs having an aggregate grant date fair value of $400 based on the closing sale price of the Class A common stock on the New York Stock Exchange on June 11, 2014 of $27.70. In addition to the annual grant of RSUs, the Company also granted 1,081 additional RSUs to the non-employee directors in lieu of certain cash payments for services as Lead Independent Director or as a chairman of one of the Board’s standing committees. Vested RSUs are convertible to Class A common stock upon the director ceasing to be a member of the Board. All options, stock and RSUs awarded to non-employee directors are non-transferable other than by will or the laws of descent and distribution. During 2014, 2013, and 2012, the Company granted 15,521, 15,616 and 20,204 RSUs, respectively. For the years ended December 31, 2014, 2013, and 2012, the Company recognized $430, $430 and $431, respectively, of director fees related to these RSUs.

Note 9. Financial Instruments with Off-Balance-Sheet Risk and Credit Risk:

As of December 31, 2014 and 2013, the Company had not entered into any transactions involving financial instruments that would expose the Company to significant related off-balance-sheet risk.

Note 10. Revisions to Previously Reported Financial Statements:

During the preparation of the 2013 consolidated financial statements, the Company concluded that the federal tax rate used to calculate deferred tax assets as of December 31, 2012 was incorrect and should have been lower than the statutory rate given the effects of recognizing a U.S. federal deferred income tax liability associated with state deferred tax assets. Although the impact of this change was not material to the consolidated financial statements as of and for the year ended December 31, 2012, the Company revised its previously reported consolidated financial statements and disclosures as of and for the year ended December 31, 2012. The following tables set forth the effected line items within the Company’s previously reported consolidated financial statements for the year ended December 31, 2012.

	Year Ended December 31, 2012
	As Previously Reported			Adjustment			As Revised
Consolidated Statement of Comprehensive Income
Income tax benefit	$	(160,821	)	$	7,884		$	(152,937	)
Net income		191,826			(7,884	)		183,942
Earnings per share – Basic		18.80			(0.78	)		18.02
Earnings per share – Diluted		18.73			(0.77	)		17.96
Other comprehensive income, net of taxes
Unrealized gains (losses) for the period on available-for-sale securities, net of taxes		(1,843	)		(66	)		(1,909	)
Comprehensive income		192,444			(7,863	)		184,581

	Year Ended December 31, 2012
	As Previously Reported			Adjustment			As Revised
Consolidated Statement of Changes in Equity
Net income	$	191,826		$	(7,884	)	$	183,942
Net change in unrealized gain on available-for-sale securities, net of taxes		618			21			639
Accumulated other comprehensive income, net of taxes		38,985			21			39,006
Accumulated deficit		(1,212,022	)		(7,884	)		(1,219,906	)
Total equity		465,156			(7,863	)		457,293

	Year Ended December 31, 2012
	As Previously Reported		Adjustment			As Revised
Consolidated Statement of Cash Flows
Net income	$	191,826	$	(7,884	)	$	183,942
Deferred tax provision		—		7,884			7,884

Note 11. Quarterly Data (Unaudited):

The following tables set forth selected information for each of the fiscal quarters during the years ended December 31, 2014 and 2013. The selected quarterly data is derived from unaudited financial statements of the Company and has been prepared on the same basis as the annual, audited financial statements to include, in the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for fair statement of the results for such periods.

Note: The sum of quarterly earnings per share amounts may not equal full year earnings per share amounts due to differing average outstanding shares amounts for the respective periods.

F-26

	Net Interest Income		Net Income (Loss)			Basic Earnings (Loss) Per Share			Diluted Earnings (Loss) Per Share
2014
First Quarter	$	21,582	$	7,033		$	0.42		$	0.41
Second Quarter		27,387		18,839			0.95			0.94
Third Quarter		30,325		12,847			0.62			0.61
Fourth Quarter		32,862		(32,765	)		(1.43	)		(1.43	)
Total Year	$	112,156	$	5,954			0.30			0.29

	Net Interest Income		Net Income			Basic Earnings Per Share		Diluted Earnings Per Share
2013
First Quarter	$	16,724	$	3,177		$	0.23	$	0.23
Second Quarter		20,925		3,194			0.19		0.19
Third Quarter		20,681		3,093			0.19		0.18
Fourth Quarter		20,160		39,997	(1)		2.40		2.36
Total Year	$	78,490	$	49,461			3.09		3.06

⁽¹⁾ Reflects $185 increase in net income as a result of an out of period adjustment (that is related to the immaterial revision as disclosed in Note 10, Revisions to Previously Reported Financial Statements) for the first three quarters of the year ended December 31, 2013.

F-27

EX-31.01

Exhibit 31.01

CERTIFICATION

I, J. Rock Tonkel, Jr., certify that:

1. I have reviewed this Annual Report on Form 10-K/A of Arlington Asset Investment Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control our financial reporting.

February 20, 2015	/s/ J. ROCK TONKEL, JR.
	J. Rock Tonkel, Jr.
	President and Chief Executive Officer

EX-31.02

Exhibit 31.02

CERTIFICATION

I, Kurt R. Harrington, certify that:

1. I have reviewed this Annual Report on Form 10-K/A of Arlington Asset Investment Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 20, 2015	/s/ KURT R. HARRINGTON
	Kurt R. Harrington
	Executive Vice President,
	Chief Financial Officer,
	and Treasurer
	(Principal Financial Officer)

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K/A of Arlington Asset Investment Corp. (the Company) for the year ended December 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, J. Rock Tonkel, Jr., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 20, 2015	/s/ J. ROCK TONKEL, JR.
	J. Rock Tonkel, Jr.
	President and Chief Executive Officer

EX-32.02

Exhibit 32.02

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K/A of Arlington Asset Investment Corp. (the Company) for the year ended December 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Kurt R. Harrington, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 20, 2015	/s/ KURT R. HARRINGTON
	Kurt R. Harrington
	Executive Vice President,
	Chief Financial Officer,
	and Treasurer
	(Principal Financial Officer)

XML

Financial Instruments (Details 6) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	$ 326,330	[1]	$ 207,853	[1]
Accretion of discount	(25,617)		(26,581)	[1]
Reclassifications, net	(21,848)		62,141	[1]
Acquisitions	0		150,646	[1]
Sales	(76,757)		(67,729)	[1]
Ending balance	$ 202,108		$ 326,330	[1]

[1] The reclassification, net, and ending balance as of December 31, 2013 were revised from the previously reported balances of $46,319 and $310,508, respectively, to correct an immaterial error.

XML

Income Taxes (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Line Items]
Income Tax Rate Reconciliation Previously Provided Deferred Tax Assets Valuation Allowance			$ 162,519
Taxable Capital Gains		68,041
Reversed Deferred Taxes Associated With Accrued Interest And Alternative Minimum Tax Credits		5,184
Other Tax Carryforward Expiration Date	2019
Operating Loss Carryforward Expiration Date	2027
Operating Loss Carryforwards	147,107
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued		3,402
Unrecognized Tax Benefits that Would Impact Effective Tax Rate		12,810
Deferred Tax Assets, Capital Loss Carryforwards	54,659	19,743
Net Capital Carryforward Amount Expired	50,754
NCL [Member]
Income Tax Disclosure [Line Items]
Deferred Tax Assets, Capital Loss Carryforwards	140,512
Rosslyn REIT Trust [Member] | Mortgage-backed Securities, Issued by Private Enterprises [Member]
Income Tax Disclosure [Line Items]
Private Label Mortgage Backed Securities		$ 367,642

XML

Borrowings (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Long-term Debt	$ 40,000	[1]	$ 40,000
Proceeds from Issuance of Long-term Debt	0		24,038	0
Senior Notes [Member]
Debt Instrument [Line Items]
Long-term Debt	25,000
Proceeds from Issuance of Long-term Debt			$ 24,038
Debt Instrument, Frequency of Periodic Payment	payable quarterly on February 1, May 1, August 1, and November 1 of each year, beginning on August 1, 2013.

[1] This table excludes interest payments to be made on the Company’s long-term debt securities. Based on the weighted average interest rate of 3.01%, approximately $113 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $15,000 of trust preferred debt. Interest on the trust preferred debt is based on the 3-month LIBOR; therefore, actual coupon interest will likely differ from this estimate. The trust preferred debt will mature beginning in October 2033 through July 2035. As of December 31, 2014, approximately $414 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $25,000 of Senior Notes. The Senior Notes have an annual interest rate of 6.625% and will mature on May 1, 2023.

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013	Dec. 31, 2012
Borrowings [Abstract]
2015	$ 0	[1]
2016	0	[1]
2017	0	[1]
2018	0	[1]
2019	0	[1]
Thereafter	40,000	[1]
Total	40,000	[1]	40,000
Minimum rental and other contractual commitments [Abstract]
2015	15	[2]
2016	446	[2]
2017	458	[2]
2018	471	[2]
2019	483	[2]
Thereafter	497	[2]
Total	2,370	[2]
Contractual Obligations [Abstract]
2015	15
2016	446
2017	458
2018	471
2019	483
Thereafter	40,497
Total	42,370
Weighted-average interest rate on borrowings	3.01%
Long-term debt interest payable due next quarter	113
Borrowings maturity date, start	October 2033
Borrowings maturity date, end	July 2035
Equipment and office rent expense	249		243	263
Repurchase agreement liabilities	3,179,775		1,547,630
Trust Preferrd Debt [Member]
Borrowings [Abstract]
Total	15,000
Senior Notes [Member]
Borrowings [Abstract]
Total	25,000
Contractual Obligations [Abstract]
Weighted-average interest rate on borrowings	6.625%		6.625%
Long-term debt interest payable due next quarter	$ 414
Debt Instrument, Maturity Date	May 01, 2023		May 01, 2023

[1] This table excludes interest payments to be made on the Company’s long-term debt securities. Based on the weighted average interest rate of 3.01%, approximately $113 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $15,000 of trust preferred debt. Interest on the trust preferred debt is based on the 3-month LIBOR; therefore, actual coupon interest will likely differ from this estimate. The trust preferred debt will mature beginning in October 2033 through July 2035. As of December 31, 2014, approximately $414 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $25,000 of Senior Notes. The Senior Notes have an annual interest rate of 6.625% and will mature on May 1, 2023.

[2] Equipment and office rent expense for 2014, 2013 and 2012 was $249, $243 and $263, respectively.

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Borrowings (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Repurchase Agreement Counterparty [Line Items]
Outstanding balance	$ 3,179,775		$ 1,547,630
Value of assets pledged as collateral
Net amount	196,250	[1]	126,281	[1]
Weighted-average rate	0.40%		0.45%
Weighted-average term to maturity (in days)	14.1 days		13.2 days
Weighted-average outstanding balance during the year ended	2,438,479		1,515,137
Weighted-average rate during the year ended	0.37%		0.45%
Agency Backed MBS [Member]
Value of assets pledged as collateral
Value of assets pledged as collateral	3,300,383		1,556,763
Private label MBS [Member]
Value of assets pledged as collateral
Value of assets pledged as collateral	$ 75,642		$ 117,148

[1] Net amount represents the value of collateral in excess of corresponding repurchase obligation. The amount of collateral at-risk is limited to the outstanding repurchase obligation and not the entire collateral balance.

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Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
MBS, at fair value
Trading, Agency-backed MBS	$ 3,414,300	$ 1,576,452
Available-for-sale
Agency-backed MBS	40	47
Private-label MBS
Senior securities	0	7,066
Re-REMIC securities	267,437	334,233
Total available-for-sale	267,477	341,346
Total MBS	3,681,777	1,917,798
Derivative assets, at fair value	1,267	8,424
Derivative liabilities, at fair value	(124,308)	(33,129)
Interest-only MBS, at fair value	212	298
Total	3,558,948	1,893,391
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
MBS, at fair value
Trading, Agency-backed MBS	0	0
Available-for-sale
Agency-backed MBS	0	0
Private-label MBS
Senior securities	0	0
Re-REMIC securities	0	0
Total available-for-sale	0	0
Total MBS	0	0
Derivative assets, at fair value	751	8,088
Derivative liabilities, at fair value	(124,308)	(32,156)
Interest-only MBS, at fair value	0	0
Total	(123,557)	(24,068)
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
MBS, at fair value
Trading, Agency-backed MBS	3,414,300	1,576,452
Available-for-sale
Agency-backed MBS	40	47
Private-label MBS
Senior securities	0	0
Re-REMIC securities	0	0
Total available-for-sale	40	47
Total MBS	3,414,340	1,576,499
Derivative assets, at fair value	516	336
Derivative liabilities, at fair value	0	(973)
Interest-only MBS, at fair value	0	0
Total	3,414,856	1,575,862
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
MBS, at fair value
Trading, Agency-backed MBS	0	0
Available-for-sale
Agency-backed MBS	0	0
Private-label MBS
Senior securities	0	7,066
Re-REMIC securities	267,437	334,233
Total available-for-sale	267,437	341,299
Total MBS	267,437	341,299
Derivative assets, at fair value	0	0
Derivative liabilities, at fair value	0	0
Interest-only MBS, at fair value	212	298
Total	$ 267,649	$ 341,597

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Shareholders' Equity (Details 1) (USD $)	3 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013
Dividends Payable [Line Items]
Dividend Amount (in dollars per share)	$ 0.875	$ 0.875	$ 0.875	$ 0.875	$ 0.875	$ 0.875	$ 0.875	$ 0.875
Declaration Date	Dec. 18, 2014	Sep. 17, 2014	Jun. 11, 2014	Mar. 13, 2014	Dec. 19, 2013	Sep. 18, 2013	Jun. 17, 2013	Mar. 15, 2013
Record Date	Dec. 31, 2014	Sep. 29, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 28, 2013	Mar. 28, 2013
Pay Date	Jan. 30, 2015	Oct. 31, 2014	Jul. 31, 2014	Apr. 30, 2014	Jan. 31, 2014	Oct. 31, 2013	Jul. 31, 2013	Apr. 30, 2013

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The provision (benefit) for income taxes from operations consists of the following for the years ended December 31, 2014, 2013 and 2012:

	2014		2013		2012
Federal	$	41,819	$	(20,075)	$	(115,321)
State		7,627		(15,247)		(37,616)
	$	49,446	$	(35,322)	$	(152,937)
Current	$	796	$	(14,860)	$	1,889
Deferred		48,650		(20,462)		(154,826)
	$	49,446	$	(35,322)	$	(152,937)

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Deferred tax assets and (liabilities) consisted of the following as of December 31, 2014 and 2013:

	2014		2013
Net operating loss carry-forward	$	57,225	$	71,214
Unrealized gains and losses on investments and derivatives, net		24,434		70,221
AMT credit		7,244		6,328
Accrued compensation		1,515		436
Realized gains and losses on designated derivatives, net		2,733		8,681
Other, net		582		4,303
Capital loss carry-forward		54,659		19,743
Valuation allowance on capital loss carry-forward		(26,027)		(15,075)
Net deferred tax asset	$	122,365	$	165,851

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The reconciliation of the Company and its subsidiaries income tax attributable to net income computed at federal statutory rates to income tax expense was:

	December 31,
	2014		2013		2012
Federal income tax at statutory rate	$	19,390	$	4,949	$	10,852
State income taxes, net of federal benefit		2,161		849		1,813
Expiration of capital loss carryover		4,668		57,254		37,935
Reversal of unrecognized tax benefit related to uncertain tax position and related accrued interest, and related AMT credits		—		(11,028)		—
Federal liability on state deferred tax assets		—		1,237		7,884
Losses on MBS acquired prior to 2012		(1,178)		—		—
Tax basis adjustments		(1,656)		—		—
Other, net		34		2,606		945
Valuation allowance		26,027		(91,189)		(212,366)
Total income tax provision (benefit)	$	49,446	$	(35,322)	$	(152,937)

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Derivative Financial Instruments and Hedging Activities (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Derivative [Line Items]
Deposit Assets	$ 160,427		$ 45,504
Gain (Loss) on Derivative Instruments, Net, Pretax	(140,353)		58,003
Eurodollar Futures [Member]
Derivative [Line Items]
Deposit Assets	96,147
Eurodollar Futures [Member] | No Hedge Designation [Member]
Derivative [Line Items]
Notional Amount	41,090,000	[1]	15,545,000	[1]
10-Year Swap Futures [Member]
Derivative [Line Items]
Deposit Assets	64,280
10-Year Swap Futures [Member] | No Hedge Designation [Member]
Derivative [Line Items]
Notional Amount	1,145,000	[2]	666,500	[2]
10-Year Swap Futures [Member] | No Hedge Designation [Member] | Matures In March 2015 [Member]
Derivative [Line Items]
Notional Amount	780,000
10-Year Swap Futures [Member] | No Hedge Designation [Member] | Matures In March 2024 [Member]
Derivative [Line Items]
Notional Amount	$ 365,000

[1] The $41,090,000 total notional amount of Eurodollar futures contracts as of December 31, 2014 represents the accumulation of Eurodollar futures contracts that mature on a quarterly basis between 2015 and 2019. As of December 31, 2014, the Company maintained $96,147 as a deposit and margin against the open Eurodollar futures contracts.

[2] The $1,145,000 represents the total notional amount of 10-year swap futures as of December 31, 2014, of which $780,000 of notional amount matures in March 2015 and $365,000 in notional amount matures in March 2024. As of December 31, 2014, the Company maintained $64,280 as a deposit and margin against the open 10-year swap futures contracts.

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Financial Instruments (Details 9) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Cumulative other-than-temporary impairment, beginning balance	$ 23,663	$ 23,768
Additions
Other-than-temporary impairments not previously recognized	420	380
Increases related to other-than-temporary impairments on securities with previously recognized other-than-temporary impairments	0	890
Reductions
Decreases related to other-than-temporary impairments on sold securities with previously recognized other-than-temporary impairments	(5,180)	(1,375)
Cumulative other-than-temporary impairment ending balance	$ 18,903	$ 23,663

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Financial Instruments (Details 4) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total gains (losses) included in earnings for the period	$ 17,243	$ 16,526
Change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$ (420)	$ (1,270)

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Income Taxes (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Components of Deferred Tax Assets and Liabilities [Abstract]
Net operating loss carry-forward	$ 57,225	$ 71,214
Unrealized gains and losses on investments and derivatives, net	24,434	70,221
AMT credit	7,244	6,328
Accrued compensation	1,515	436
Realized gains and losses on designated derivatives, net	2,733	8,681
Other, net	582	4,303
Capital loss carry-forward	54,659	19,743
Valuation allowance on capital loss carry-forward	(26,027)	(15,075)
Net deferred tax asset	$ 122,365	$ 165,851

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Revisions to Previously Reported Financial Statements (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended									12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013		Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Consolidated Statement of Comprehensive Income
Income tax benefit										$ 49,446	$ (35,322)	$ (152,937)
Net income	(32,765)	12,847	18,839	7,033	39,997	[1]	3,093	3,194	3,177	5,954	49,461	183,942
Earnings Per Share - Basic (in dollars per share)	$ (1.43)	$ 0.62	$ 0.95	$ 0.42	$ 2.40		$ 0.19	$ 0.19	$ 0.23	$ 0.30	$ 3.09	$ 18.02
Earnings per share-Diluted (in dollars per share)	$ (1.43)	$ 0.61	$ 0.94	$ 0.41	$ 2.36		$ 0.18	$ 0.19	$ 0.23	$ 0.29	$ 3.06	$ 17.96
Other comprehensive income, net of taxes
Unrealized gains (losses) for the period on available-for-sale securities, net of taxes										679	19,894	(1,909)
Comprehensive income										(4,443)	63,645	184,581
Consolidated Statement of Changes in Equity
Net income	(32,765)	12,847	18,839	7,033	39,997	[1]	3,093	3,194	3,177	5,954	49,461	183,942
Net change in unrealized gain on available-for-sale securities, net of taxes										(10,397)	14,184	639
Accumulated other comprehensive income, net of taxes	42,793				53,190					42,793	53,190	39,006
Accumulated deficit	(1,298,018)				(1,228,926)					(1,298,018)	(1,228,926)	(1,219,906)
Total equity	642,032				551,828					642,032	551,828	457,293	183,372
Consolidated Statement of Cash Flows
Net income	(32,765)	12,847	18,839	7,033	39,997	[1]	3,093	3,194	3,177	5,954	49,461	183,942
Deferred tax provision										48,177	70,727	7,884
Scenario, Previously Reported [Member]
Consolidated Statement of Comprehensive Income
Income tax benefit												(160,821)
Net income												191,826
Earnings Per Share - Basic (in dollars per share)												$ 18.80
Earnings per share-Diluted (in dollars per share)												$ 18.73
Other comprehensive income, net of taxes
Unrealized gains (losses) for the period on available-for-sale securities, net of taxes												(1,843)
Comprehensive income												192,444
Consolidated Statement of Changes in Equity
Net income												191,826
Net change in unrealized gain on available-for-sale securities, net of taxes												618
Accumulated other comprehensive income, net of taxes												38,985
Accumulated deficit												(1,212,022)
Total equity												465,156
Consolidated Statement of Cash Flows
Net income												191,826
Deferred tax provision												0
Scenario, Adjustment [Member]
Consolidated Statement of Comprehensive Income
Income tax benefit												7,884
Net income												(7,884)
Earnings Per Share - Basic (in dollars per share)												$ (0.78)
Earnings per share-Diluted (in dollars per share)												$ (0.77)
Other comprehensive income, net of taxes
Unrealized gains (losses) for the period on available-for-sale securities, net of taxes												(66)
Comprehensive income												(7,863)
Consolidated Statement of Changes in Equity
Net income												(7,884)
Net change in unrealized gain on available-for-sale securities, net of taxes												21
Accumulated other comprehensive income, net of taxes												21
Accumulated deficit												(7,884)
Total equity												(7,863)
Consolidated Statement of Cash Flows
Net income												(7,884)
Deferred tax provision												$ 7,884

[1] Reflects $185 increase in net income as a result of an out of period adjustment (that is related to the immaterial revision as disclosed in Note 10, Revisions to Previously Reported Financial Statements) for the first three quarters of the year ended December 31, 2013.

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Borrowings (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Weighted-Average Interest Rate	3.01%
Trust Preferred Debt [Member]
Debt Instrument [Line Items]
Outstanding Principal	$ 15,000	$ 15,000
Annual Interest Rate	LIBOR+2.25-3.00 %	LIBOR+2.25-3.00 %
Interest Payment Frequency	Quarterly	Quarterly
Weighted-Average Interest Rate	2.98%	2.99%
Maturity	2033 – 2035	2033 – 2035
Early Redemption Date	2008 – 2010	2008 – 2010
Senior Notes [Member]
Debt Instrument [Line Items]
Outstanding Principal	$ 25,000	$ 25,000
Annual Interest Rate	6.625%	6.625%
Interest Payment Frequency	Quarterly	Quarterly
Weighted-Average Interest Rate	6.625%	6.625%
Maturity	May 01, 2023	May 01, 2023
Early Redemption Date	May 01, 2016	May 01, 2016

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Organization and Nature of Operations

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Operations

Note 1. Organization and Nature of Operations:

Arlington Asset Investment Corp. and its consolidated subsidiaries (the Company or AAIC), formerly known as Friedman, Billings, Ramsey Group, Inc. (FBR Group), is a Virginia corporation. The Company acquires and holds mortgage-related and other assets. The Company’s portfolio consists primarily of agency-backed mortgage-backed securities (agency-backed MBS) and private-label residential mortgage-backed securities (private-label MBS).

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Quarterly Data (Unaudited) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended									12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013		Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Quarterly Financial Information Disclosure [Line Items]
Net Interest Income	$ 32,862	$ 30,325	$ 27,387	$ 21,582	$ 20,160		$ 20,681	$ 20,925	$ 16,724	$ 112,156	$ 78,490	$ 59,189
Net Income (Loss)	$ (32,765)	$ 12,847	$ 18,839	$ 7,033	$ 39,997	[1]	$ 3,093	$ 3,194	$ 3,177	$ 5,954	$ 49,461	$ 183,942
Basic Earnings (Loss) Per Share (in dollars per share)	$ (1.43)	$ 0.62	$ 0.95	$ 0.42	$ 2.40		$ 0.19	$ 0.19	$ 0.23	$ 0.30	$ 3.09	$ 18.02
Diluted Earnings (Loss) Per Share (in dollars per share)	$ (1.43)	$ 0.61	$ 0.94	$ 0.41	$ 2.36		$ 0.18	$ 0.19	$ 0.23	$ 0.29	$ 3.06	$ 17.96

[1] Reflects $185 increase in net income as a result of an out of period adjustment (that is related to the immaterial revision as disclosed in Note 10, Revisions to Previously Reported Financial Statements) for the first three quarters of the year ended December 31, 2013.

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Financial Instruments (Details 10) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Agency Backed MBS [Member]
Proceeds from Sales of Mortgage Backed Securities [Line Items]
Proceeds from sales	$ 65,251	$ 914,155
Gross gains	1,351	1,619
Gross losses	0	27,406
Private label MBS [Member]
Proceeds from Sales of Mortgage Backed Securities [Line Items]
Proceeds from sales	86,318	69,337
Gross gains	17,397	17,458
Gross losses	$ 140	$ 0

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Quarterly Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information [Table Text Block]

The sum of quarterly earnings per share amounts may not equal full year earnings per share amounts due to differing average outstanding shares amounts for the respective periods.

			Net		Basic Earnings		Diluted Earnings
	Net Interest Income		Income (Loss)		(Loss) Per Share		(Loss) Per Share
2014
First Quarter	$	21,582	$	7,033	$	0.42	$	0.41
Second Quarter		27,387		18,839		0.95		0.94
Third Quarter		30,325		12,847		0.62		0.61
Fourth Quarter		32,862		(32,765)		(1.43)		(1.43)
Total Year	$	112,156	$	5,954		0.30		0.29

			Net			Basic Earnings		Diluted Earnings
	Net Interest Income		Income			Per Share		Per Share
2013
First Quarter	$	16,724	$	3,177		$	0.23	$	0.23
Second Quarter		20,925		3,194			0.19		0.19
Third Quarter		20,681		3,093			0.19		0.18
Fourth Quarter		20,160		39,997	(1)		2.40		2.36
Total Year	$	78,490	$	49,461			3.09		3.06

⁽¹⁾ Reflects $185 increase in net income as a result of an out of period adjustment (that is related to the immaterial revision as disclosed in Note 10, Revisions to Previously Reported Financial Statements) for the first three quarters of the year ended December 31, 2013.

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Revisions to Previously Reported Financial Statements (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

The following tables set forth the effected line items within the Company’s previously reported consolidated financial statements for the year ended December 31, 2012.

	Year Ended December 31, 2012
	As Previously Reported		Adjustment		As Revised
Consolidated Statement of Comprehensive Income
Income tax benefit	$	(160,821)	$	7,884	$	(152,937)
Net income		191,826		(7,884)		183,942
Earnings per share – Basic		18.80		(0.78)		18.02
Earnings per share – Diluted		18.73		(0.77)		17.96
Other comprehensive income, net of taxes
Unrealized gains (losses) for the period on available-for-sale securities, net of taxes		(1,843)		(66)		(1,909)
Comprehensive income		192,444		(7,863)		184,581

	Year Ended December 31, 2012
	As Previously Reported		Adjustment		As Revised
Consolidated Statement of Changes in Equity
Net income	$	191,826	$	(7,884)	$	183,942
Net change in unrealized gain on available-for-sale securities, net of taxes		618		21		639
Accumulated other comprehensive income, net of taxes		38,985		21		39,006
Accumulated deficit		(1,212,022)		(7,884)		(1,219,906)
Total equity		465,156		(7,863)		457,293

	Year Ended December 31, 2012
	As Previously Reported		Adjustment		As Revised
Consolidated Statement of Cash Flows
Net income	$	191,826	$	(7,884)	$	183,942
Deferred tax provision		—		7,884		7,884

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Shareholders' Equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2014
Equity Offerings [Line Items]
Closing date of the offering	Mar. 13, 2013
Shares sold to public (in shares)	3,000,000
Shares sold pursuant to the underwriter over-allotment (in shares)	450,000
Total shares of Class A common stock (in shares)	3,450,000
Public offering price per share (in dollars per share)	$ 25.50
Net proceeds	$ 86,964	[1]
Public offering one [Member]
Equity Offerings [Line Items]
Closing date of the offering			Mar. 28, 2014
Shares sold to public (in shares)			2,750,000
Shares sold pursuant to the underwriter over-allotment (in shares)			312,500
Total shares of Class A common stock (in shares)			3,062,500
Public offering price per share (in dollars per share)			$ 27.40
Net proceeds			81,669	[1]
Public offering two [Member]
Equity Offerings [Line Items]
Closing date of the offering			Sep. 08, 2014
Shares sold to public (in shares)			2,750,000
Shares sold pursuant to the underwriter over-allotment (in shares)			412,500
Total shares of Class A common stock (in shares)			3,162,500
Public offering price per share (in dollars per share)			$ 27.61
Net proceeds			$ 85,214	[1]

[1] Net of underwriting discounts and commissions and expenses.

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Financial Instruments (Details 11) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Interest-only MBS	$ 212	$ 298
Non-public equity securities	975	975
Investments funds	650	792
Total other investments	$ 1,837	$ 2,065

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Summary of Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014		Dec. 31, 2013
Financial assets, Carrying Amount
Cash and cash equivalents, Carrying Amount	$ 33,832		$ 48,628
Interest receivable, Carrying Amount	10,701		5,173
Other receivables, Carrying Amount	1,138		212
MBS, Carrying Amount
Agency-backed MBS, Carrying Amount	3,414,340		1,576,499
Private-label MBS, Carrying Amount
Senior securities, Carrying Amount	0		7,066
Re-REMIC securities, Carrying Amount	267,437		334,233
Derivative assets, Carrying Amount	1,267		8,424
Other investments, Carrying Amount	1,837		2,065
Deposits, Carrying Amount	160,427		45,504
Financial liabilities, Carrying Amount
Repurchase agreements, Carrying Amount	3,179,775		1,547,630
Interest payable, Carrying Amount	1,106		774
Long-term debt, Carrying Amount	40,000	[1]	40,000
Derivative liabilities, Carrying Amount	124,308		33,129
Accounts payable, accrued expenses and other liabilities, Carrying Amount	1,006		1,391
Financial assets, Estimated Fair Value
Cash and cash equivalents, Estimated Fair Value	33,832		48,628
Interest receivable, Estimated Fair Value	10,701		5,173
Other receivables, Estimated Fair Value	1,138		212
MBS, Estimated Fair Value
Agency-backed MBS, Estimated Fair Value	3,414,340		1,576,499
Private-label MBS, Estimated Fair Value
Senior securities, Estimated Fair Value	0		7,066
Re-REMIC securities, Estimated Fair Value	267,437		334,233
Derivative assets, Estimated Fair Value	1,267		8,424
Other investments, Estimated Fair Value	1,837		2,065
Deposits, Estimated Fair Value	160,427		45,504
Financial liabilities, Estimated Fair Value
Repurchase agreements, Estimated Fair Value	3,179,775		1,547,630
Interest payable, Estimated Fair Value	1,106		774
Long-term debt, Estimated Fair Value	39,200		36,620
Derivative liabilities, Estimated Fair Value	124,308		33,129
Accounts payable, accrued expenses and other liabilities, Estimated Fair Value	$ 1,006		$ 1,391

[1] This table excludes interest payments to be made on the Company’s long-term debt securities. Based on the weighted average interest rate of 3.01%, approximately $113 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $15,000 of trust preferred debt. Interest on the trust preferred debt is based on the 3-month LIBOR; therefore, actual coupon interest will likely differ from this estimate. The trust preferred debt will mature beginning in October 2033 through July 2035. As of December 31, 2014, approximately $414 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $25,000 of Senior Notes. The Senior Notes have an annual interest rate of 6.625% and will mature on May 1, 2023.

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Summary of Significant Accounting Policies (Details 1) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Basic
Weighted-average shares outstanding common stock (in shares)									20,043	15,990	10,205
Stock options, performance share units, and unvested restricted stock (in shares)									0	0	0
Weighted-average common and common equivalent shares outstanding (in shares)									20,043	15,990	10,205
Net income applicable to common stock									$ 5,954	$ 49,461	$ 183,942
Net income per common share (in dollars per share)	$ (1.43)	$ 0.62	$ 0.95	$ 0.42	$ 2.40	$ 0.19	$ 0.19	$ 0.23	$ 0.30	$ 3.09	$ 18.02
Diluted
Weighted-average shares outstanding common stock (in shares)									20,043	15,990	10,205
Stock options, performance share units, and unvested restricted stock (in shares)									354	199	37
Weighted-average common and common equivalent shares outstanding (in shares)									20,397	16,189	10,242
Net income applicable to common stock									$ 5,954	$ 49,461	$ 183,942
Net income per common share (in dollars per share)	$ (1.43)	$ 0.61	$ 0.94	$ 0.41	$ 2.36	$ 0.18	$ 0.19	$ 0.23	$ 0.29	$ 3.06	$ 17.96

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities
Net income	$ 5,954	$ 49,461	$ 183,942
Adjustments to reconcile net income to net cash provided by operating activities
Investment loss, net	38,672	47,745	10,723
Net discount accretion on mortgage-backed securities	(12,570)	(9,302)	(9,888)
Deferred tax provision	48,177	70,727	7,884
Release of valuation allowance on deferred tax assets	0	(91,189)	(162,281)
Reversal of unrecognized tax benefit related to uncertain tax position and related accrued interest	0	(16,212)	0
Other	2,336	2,460	614
Changes in operating assets
Interest receivable	(5,528)	(304)	(2,503)
Other receivables	(906)	432	(389)
Prepaid expenses and other assets	(6,328)	3,600	750
Changes in operating liabilities
Accounts payable, accrued expenses and other liabilities and interest payable	(340)	(92)	1,457
Accrued compensation and benefits	483	4,042	(4,634)
Net cash provided by operating activities	69,950	61,368	25,675
Cash flows from investing activities
Purchases of available-for-sale mortgage-backed securities	0	(167,682)	(54,709)
Purchases of trading mortgage-backed securities	(2,030,995)	(1,221,387)	(1,359,536)
Proceeds from sales of available-for-sale mortgage-backed securities	86,318	69,337	34,102
Proceeds from sales of trading mortgage-backed securities	65,251	914,155	352,437
Receipt of principal payments on available-for-sale mortgage-backed securities	2,378	5,238	6,628
Receipt of principal payments on trading mortgage-backed securities	212,049	165,056	83,038
(Payments for) proceeds from derivatives and deposits, net	(150,446)	42,210	(29,814)
Payments for purchased securities payable	0	0	(15,820)
Proceeds from sold securities receivable	0	26,773	41,321
Other	412	132	1,668
Net cash used in investing activities	(1,815,033)	(166,168)	(940,685)
Cash flows from financing activities
Proceeds from repurchase agreements, net	1,632,145	50,439	849,214
Proceeds from stock issuance, net	167,148	86,964	129,249
Proceeds from long-term debt issuance, net	0	24,038	0
Dividends paid	(69,481)	(43,850)	(46,848)
Repurchase of common stock	0	0	(786)
Excess tax benefits associated with stock-based awards	475	0	0
Net cash provided by financing activities	1,730,287	117,591	930,829
Net (decrease) increase in cash and cash equivalents	(14,796)	12,791	15,819
Cash and cash equivalents, beginning of year	48,628	35,837	20,018
Cash and cash equivalents, end of year	33,832	48,628	35,837
Supplemental cash flow information
Cash payments for interest	10,959	8,272	4,888
Cash payments for taxes	$ 2,309	$ 667	$ 833

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Summary of Significant Accounting Policies (Details Textual)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	42,570	26,218	27,808
Cash Equivalents Percentage Held In Us Government Backed Securities	99.00%	89.00%

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Financial Instruments (Details 7) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contractually required payments receivable	$ 420,500
Cash flows expected to be collected	318,328
Basis in acquired securities	$ 167,682

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Income Taxes (Details 2) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Federal income tax at statutory rate	$ 19,390	$ 4,949	$ 10,852
State income taxes, net of federal benefit	2,161	849	1,813
Expiration of capital loss carryover	4,668	57,254	37,935
Reversal of unrecognized tax benefit related to uncertain tax position and related accrued interest, and related AMT credits	0	(11,028)	0
Federal liability on state deferred tax assets	0	1,237	7,884
Losses on MBS acquired prior to 2012	(1,178)	0	0
Tax basis adjustments	(1,656)	0	0
Other, net	34	2,606	945
Valuation allowance	26,027	(91,189)	(212,366)
Total income tax provision (benefit)	$ 49,446	$ (35,322)	$ (152,937)

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014		Dec. 31, 2013
ASSETS
Cash and cash equivalents	$ 33,832		$ 48,628
Receivables
Interest	10,701		5,173
Other	1,138		212
Mortgage-backed securities, at fair value
Available-for-sale	267,477		341,346
Trading	3,414,300		1,576,452
Other investments	1,837		2,065
Derivative assets, at fair value	1,267		8,424
Deferred tax assets, net	122,365		165,851
Deposits	160,427		45,504
Prepaid expenses and other assets	1,145		1,311
Total assets	4,014,489		2,194,966
Liabilities:
Repurchase agreements	3,179,775		1,547,630
Interest payable	1,106		774
Accrued compensation and benefits	6,067		5,584
Dividend payable	20,195		14,630
Derivative liabilities, at fair value	124,308		33,129
Accounts payable, accrued expenses and other liabilities	1,006		1,391
Long-term debt	40,000	[1]	40,000
Total liabilities	3,372,457		1,643,138
Commitments and contingencies (Note 7)	0		0
Equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued and outstanding	0		0
Additional paid-in capital	1,897,027		1,727,398
Accumulated other comprehensive income, net of taxes of $4,745 and $9,436, respectively	42,793		53,190
Accumulated deficit	(1,298,018)		(1,228,926)
Total equity	642,032		551,828
Total liabilities and equity	4,014,489		2,194,966
Common Class A [Member]
Equity:
Common stock	229		160
Common Class B [Member]
Equity:
Common stock	$ 1		$ 6

[1] This table excludes interest payments to be made on the Company’s long-term debt securities. Based on the weighted average interest rate of 3.01%, approximately $113 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $15,000 of trust preferred debt. Interest on the trust preferred debt is based on the 3-month LIBOR; therefore, actual coupon interest will likely differ from this estimate. The trust preferred debt will mature beginning in October 2033 through July 2035. As of December 31, 2014, approximately $414 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $25,000 of Senior Notes. The Senior Notes have an annual interest rate of 6.625% and will mature on May 1, 2023.

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Financial Instruments (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013		Dec. 31, 2012
Fair Value Inputs Assets Quantitative Information [Line Items]
Percentage of Total Asset Measured and Reported at Fair Value, Recurring Basis	6.67%	15.56%
Company's Interest in Non Public Equity Securities and Investment Funds	$ 1,625	$ 1,767
Fair Value Measured on Nonrecurring Basis, Gain (Loss) Included in Earnings		177
Weighted Average Coupon Rate for MBS Portfolio	3.93%	3.90%
Pledged Assets Separately Reported, Securities Pledged as Collateral, at Fair Value	3,376,025	1,673,911
Financial Instrument Unamortized Discount Premium Net	133,333	207,239
Other than Temporary Impairment Losses MBS	420	1,270
Cost Basis MBS Prior to Other than Temporary Impairment	2,174	11,688
Other than Temporary Impairment Losses, Investments, Portion in Other Comprehensive Loss, before Tax, Including Portion Attributable to Noncontrolling Interest, Available-for-sale Securities	29	84
Reclassification, net	(21,848)	62,141	[1]
Certain Loans Acquired in Transfer Accounted for as Available-for-sale Debt Securities, Accretable Yield	202,108	326,330	[1]	207,853	[1]
Scenario, Previously Reported [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Reclassification, net		46,319
Certain Loans Acquired in Transfer Accounted for as Available-for-sale Debt Securities, Accretable Yield		$ 310,508

[1] The reclassification, net, and ending balance as of December 31, 2013 were revised from the previously reported balances of $46,319 and $310,508, respectively, to correct an immaterial error.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock [Member] Common Class A [Member]	Common Stock [Member] Common Class B [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income [Member]	Accumulated Deficit [Member]
Beginning Balances at Dec. 31, 2011	$ 183,372	$ 71	$ 6	$ 1,508,713	$ 38,367	$ (1,363,785)
Beginning Balances (in shares) at Dec. 31, 2011		7,099,336	566,112
Net income	183,942	0	0	0	0	183,942
Conversion of Class B shares to Class A shares	0	0	0	0	0	0
Conversion of Class B shares to Class A shares (in shares)		12,057	(12,057)
Issuance of Class A common stock	129,249	55	0	129,194	0	0
Issuance of Class A common stock (in shares)		5,493,750	0
Repurchase of Class A common stock	(786)	0	0	(786)	0	0
Repurchase of Class A common stock (in shares)		(41,790)	0
Forfeitures of Class A common stock	(55)	0	0	(55)	0	0
Forfeitures of Class A common stock (in shares)		(2,383)	0
Amortization of Class A common shares issued as stock-based awards	995	0	0	995	0	0
Other comprehensive income
Net change in unrealized gain on available-for-sale investment securities, (net of taxes)	639	0	0	0	639	0
Dividends declared	(40,063)	0	0	0	0	(40,063)
Ending Balances at Dec. 31, 2012	457,293	126	6	1,638,061	39,006	(1,219,906)
Ending Balances (in shares) at Dec. 31, 2012		12,560,970	554,055
Net income	49,461	0	0	0	0	49,461
Issuance of Class A common stock	86,964	34	0	86,930	0	0
Issuance of Class A common stock (in shares)		3,492,667	0
Forfeitures of Class A common stock	(142)	0	0	(142)	0	0
Forfeitures of Class A common stock (in shares)		(5,672)	0
Amortization of Class A common shares issued as stock-based awards	2,549	0	0	2,549	0	0
Other comprehensive income
Net change in unrealized gain on available-for-sale investment securities, (net of taxes)	14,184	0	0	0	14,184	0
Dividends declared	(58,481)	0	0	0	0	(58,481)
Ending Balances at Dec. 31, 2013	551,828	160	6	1,727,398	53,190	(1,228,926)
Ending Balances (in shares) at Dec. 31, 2013		16,047,965	554,055
Net income	5,954	0	0	0	0	5,954
Conversion of Class B shares to Class A shares		5	(5)
Conversion of Class B shares to Class A shares (in shares)		448,186	(448,186)
Issuance of Class A common stock	166,883	64	0	166,819	0	0
Issuance of Class A common stock (in shares)		6,419,247	0
Forfeitures of Class A common stock	(1,478)	0	0	(1,478)	0	0
Forfeitures of Class A common stock (in shares)		(54,476)	0
Amortization of Class A common shares issued as stock-based awards	3,813	0	0	3,813	0	0
Other comprehensive income
Net change in unrealized gain on available-for-sale investment securities, (net of taxes)	(10,397)	0	0	0	(10,397)	0
Dividends declared	(75,046)	0	0	0	0	(75,046)
Income tax benefit from stock-based compensation	475	0	0	475	0	0
Ending Balances at Dec. 31, 2014	$ 642,032	$ 229	$ 1	$ 1,897,027	$ 42,793	$ (1,298,018)
Ending Balances (in shares) at Dec. 31, 2014		22,860,922	105,869

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Shareholders' Equity (Details 3) (Restricted Stock [Member], USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Number of Shares
Share Balance (in shares)	57,673	34,835	15,206
Granted (in shares)	84,602	36,000	25,500
Forfeitures (in shares)	0	0	0
Vestitures (in shares)	(25,163)	(13,162)	(5,871)
Share Balance (in shares)	117,112	57,673	34,835	15,206
Weighted-average Grant-date Fair Value
Balance (in dollars per share)	$ 25.71	$ 24.24	$ 35.40
Granted (in dollars per share)	$ 26.84	$ 26.74	$ 22.99
Forfeitures (in dollars per share)	$ 0	$ 0	$ 0
Vestitures (in dollars per share)	$ 25.64	$ 24.65	$ 47.60
Balance (in dollars per share)	$ 26.54	$ 25.71	$ 24.24	$ 35.40
Weighted-average remaining vested period (in years)	1 year 10 months 24 days	2 years	2 years 2 months 12 days	2 years
Common Class A [Member]
Number of Shares
Share Balance (in shares)	9,155	9,155	9,155

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Financial Instruments (Details 2)	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Senior Securities [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Discount rate	0.00%	[1]	6.00%
Default rate	0.00%	[1]	9.30%
Loss severity rate	0.00%	[1]	50.00%
Prepayment rate	0.00%	[1]	16.30%
Re-REMIC Securities [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Discount rate	5.55%		6.55%
Default rate	3.09%		3.62%
Loss severity rate	42.25%		44.82%
Prepayment rate	11.23%		11.69%
Re-REMIC Securities [Member] | Maximum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Discount rate	10.00%		10.00%
Default rate	8.80%		9.60%
Loss severity rate	57.50%		57.50%
Prepayment rate	17.70%		19.00%
Re-REMIC Securities [Member] | Minimum [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Discount rate	5.15%		6.00%
Default rate	1.00%		0.95%
Loss severity rate	29.23%		29.15%
Prepayment rate	7.40%		6.40%

[1] The Company did not own any senior securities on December 31, 2014.

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

Financial Instruments Measured at Fair Value on a Recurring Basis

	December 31, 2014
	Total		Level 1		Level 2		Level 3
MBS, at fair value
Trading
Agency-backed MBS	$	3,414,300	$	—	$	3,414,300	$	—
Available-for-sale
Agency-backed MBS		40		—		40		—
Private-label MBS
Senior securities		—		—		—		—
Re-REMIC securities		267,437		—		—		267,437
Total available-for-sale		267,477		—		40		267,437
Total MBS		3,681,777		—		3,414,340		267,437
Derivative assets, at fair value		1,267		751		516		—
Derivative liabilities, at fair value		(124,308)		(124,308)		—		—
Interest-only MBS, at fair value		212		—		—		212
Total	$	3,558,948	$	(123,557)	$	3,414,856	$	267,649

	December 31, 2013
	Total		Level 1		Level 2		Level 3
MBS, at fair value
Trading
Agency-backed MBS	$	1,576,452	$	—	$	1,576,452	$	—
Available-for-sale
Agency-backed MBS		47		—		47		—
Private-label MBS
Senior securities		7,066		—		—		7,066
Re-REMIC securities		334,233		—		—		334,233
Total available-for-sale		341,346		—		47		341,299
Total MBS		1,917,798		—		1,576,499		341,299
Derivative assets, at fair value		8,424		8,088		336		—
Derivative liabilities, at fair value		(33,129)		(32,156)		(973)		—
Interest-only MBS, at fair value		298		—		—		298
Total	$	1,893,391	$	(24,068)	$	1,575,862	$	341,597

Weighted Average Underlying Loan Characteristics Private Label MBS [Table Text Block]

The Company’s private-label MBS were collateralized by residential prime and Alt-A mortgage loans and had the following weighted average characteristics, based on face value, as of the dates indicated:

	December 31,
	2014			2013
Original loan-to-value		68	%		69	%
Original FICO score		722			725
Three-month prepayment rate		11	%		14	%
Three-month loss severities		41	%		37	%
Weighted average coupon		2.96	%		3.34	%

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The significant unobservable inputs for the valuation model include the following weighted-averages, based on face value, as of the dates indicated:

	December 31, 2014						December 31, 2013
				Re-REMIC						Re-REMIC
	Senior Securities  (1)			Securities			Senior Securities			Securities
Discount rate		—	%		5.55	%		6.00	%		6.55	%
Default rate		—	%		3.09	%		9.30	%		3.62	%
Loss severity rate		—	%		42.25	%		50.00	%		44.82	%
Prepayment rate		—	%		11.23	%		16.30	%		11.69	%

⁽¹⁾ The Company did not own any senior securities on December 31, 2014.

The ranges of the significant unobservable inputs for the valuation model were as follows as of the dates indicated:

	December 31, 2014						December 31, 2013
	Senior						Senior
	Securities  (1)			Re-REMIC Securities			Securities			Re-REMIC Securities
Discount rate		—	%		5.15 – 10.00	%		6.00	%	6.00 – 10.00	%
Default rate		—	%		1.00 – 8.80	%		9.30	%	0.95 – 9.60	%
Loss severity rate		—	%		29.23 – 57.50	%		50.00	%	29.15 – 57.50	%
Prepayment rate		—	%		7.40 – 17.70	%		16.30	%	6.40 – 19.00	%

⁽¹⁾ The Company did not own any senior securities on December 31, 2014.

Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Table Text Block]

The tables below set forth a summary of changes in the fair value and gains and losses of the Company’s Level 3 financial assets and liabilities that are measured at fair value on a recurring basis for the years ended December 31, 2014 and 2013.

	Year Ended December 31, 2014
			Re-REMIC
	Senior Securities		Securities		Total
Beginning balance, January 1, 2014	$	7,066	$	334,233	$	341,299
Total net gains (losses)
Included in earnings		1,690		15,553		17,243
Included in other comprehensive income		(1,654)		(13,437)		(15,091)
Purchases		—		—		—
Sales		(7,029)		(79,289)		(86,318)
Payments, net		(319)		(14,994)		(15,313)
Accretion of discount		246		25,371		25,617
Ending balance, December 31, 2014	$	—	$	267,437	$	267,437
The amount of net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$	—	$	(420)	$	(420)

	Year Ended December 31, 2013
			Re-REMIC
	Senior Securities		Securities		Total
Beginning balance, January 1, 2013	$	7,519	$	191,567	$	199,086
Total net gains (losses)
Included in earnings		—		16,526		16,526
Included in other comprehensive income		(254)		23,469		23,215
Purchases		—		167,682		167,682
Sales		—		(69,337)		(69,337)
Payments, net		(1,092)		(21,362)		(22,454)
Accretion of discount		893		25,688		26,581
Ending balance, December 31, 2013	$	7,066	$	334,233	$	341,299
The amount of net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$	—	$	(1,270)	$	(1,270)

Fair Value Measurement with Unobservable Inputs Reconciliation Recurring Basis, Gain (Loss) Included in Other Comprehensive Income (Loss) [Table Text Block]

Gains and losses included in earnings for the years ended December 31, 2014 and 2013 are reported in the following statement of comprehensive income line descriptions:

	Other Loss, Investment Loss, net
	2014		2013
Total gains (losses) included in earnings for the period	$	17,243	$	16,526
Change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$	(420)	$	(1,270)

Mortgage Backed Securities Fair Value [Table Text Block]

MBS, at fair value ⁽¹⁾⁽²⁾, consisted of the following as of the dates indicated:

	December 31, 2014								December 31, 2013
			Net								Net
			Unamortized		Percent of		Weighted	Weighted			Unamortized		Percent of		Weighted	Weighted
	Fair		Premium		Total Fair		Average	Average	Fair		Premium		Total Fair		Average	Average
	Value		(Discount)		Value		Life	Rating (3)	Value		(Discount)		Value		Life	Rating (3)
Trading
Fannie Mae	$	2,064,465	$	—	56.07	%	8.1	AAA	$	997,488	$	—	52.01	%	9.4	AAA
Freddie Mac		1,349,835		—	36.66	%	8.2	AAA		578,964		—	30.19	%	9.6	AAA
Available-for-sale:
Agency-backed
Fannie Mae		40		—	—		4.9	AAA		47		—	—		5.8	AAA
Private-label
Senior securities		—		—	—		—	—		7,066		(4,789)	0.37	%	4.8	C-
Re-REMIC securities		267,437		(133,333)	7.27	%	10.4	NR		334,233		(202,450)	17.43	%	11.4	NR
	$	3,681,777	$	(133,333)	100.00	%			$	1,917,798	$	(207,239)	100.00	%

⁽¹⁾ The Company’s MBS portfolio was primarily comprised of fixed-rate MBS at December 31, 2014 and 2013. The weighted-average coupon of the MBS portfolio at December 31, 2014 and 2013 was 3.93% and 3.90%, respectively.

⁽²⁾ As of December 31, 2014 and 2013, the Company’s MBS investments with a fair value of $3,376,025 and $1,673,911, respectively, were pledged as collateral for repurchase agreements.

⁽³⁾ The securities issued by Fannie Mae and Freddie Mac are not rated by any rating agency; however, they are commonly thought of as having an implied rating of “AAA.” There is no assurance, particularly given the downgrade of the U.S. credit rating to “AA+” by Standard & Poor’s during the quarter ended September 30, 2011 and Fitch Ratings Inc.’s announcement on October 15, 2013 that it had placed the U.S. credit rating on negative watch, that these securities would receive such a rating if they were ever rated by a rating agency. The weighted-average rating of the Company’s private-label senior securities is calculated based on face value of the securities.

Private Label MBS Available-for-sale Accretable Yield [Table Text Block]

The following table presents the changes in the accretable yield on available-for-sale, private-label MBS for the years ended December 31, 2014 and 2013:

	Year Ended December 31,
	2014		2013(1)
Beginning balance	$	326,330	$	207,853
Accretion of discount		(25,617)		(26,581)
Reclassifications, net		(21,848)		62,141
Acquisitions		—		150,646
Sales		(76,757)		(67,729)
Ending balance	$	202,108	$	326,330

⁽¹⁾ The reclassification, net, and ending balance as of December 31, 2013 were revised from the previously reported balances of $46,319 and $310,508, respectively, to correct an immaterial error.

Schedule of Available for Sale Private Label MBS Acquired [Table Text Block]

The Company acquired no available-for-sale, private-label MBS during 2014. For the available-for-sale, private-label MBS acquired during the year ended December 31, 2013, the contractually required payments receivable, the cash flow expected to be collected, and the fair value at the acquisition date were as follows:

	Year Ended December 31, 2013
Contractually required payments receivable	$	420,500
Cash flows expected to be collected		318,328
Basis in acquired securities		167,682

Unrealized Gain (Loss) on Investments [Table Text Block]

The Company’s available-for-sale MBS are carried at fair value in accordance with ASC 320, Debt and Equity Securities (ASC 320), the securities with resulting unrealized gains and losses reflected as other comprehensive income or loss. Gross unrealized gains and losses on these securities were the following as of the dates indicated:

	December 31, 2014
	Amortized Cost/Cost		Unrealized				Fair Value
	Basis  (1)		Gains		Losses
Agency-backed MBS	$	36	$	4	$	—	$	40
Private-label MBS
Senior securities		—		—		—		—
Re-REMIC securities		219,904		47,533		—		267,437
Total	$	219,940	$	47,537	$	—	$	267,477

⁽¹⁾ The amortized cost of MBS includes unamortized net discounts of $133,333 at December 31, 2014.

	December 31, 2013
	Amortized Cost/Cost		Unrealized				Fair Value
	Basis  (1)		Gains		Losses
Agency-backed MBS	$	43	$	4	$	—	$	47
Private-label MBS
Senior securities		5,412		1,654		—		7,066
Re-REMIC securities		273,264		60,970		(1)		334,233
Total	$	278,719	$	62,628	$	(1)	$	341,346

⁽¹⁾ The amortized cost of MBS includes unamortized net discounts of $207,239 at December 31, 2013.

Other than Temporary Impairment, Credit Losses Recognized in Earnings [Table Text Block]

The following table presents a summary of other-than-temporary impairment charges included in earnings for the periods indicated and cumulative other-than-temporary impairment charges recognized on the MBS held as of the dates indicated:

	Year Ended December 31,
	2014		2013
Cumulative other-than-temporary impairment, beginning balance	$	23,663	$	23,768
Additions
Other-than-temporary impairments not previously recognized		420		380
Increases related to other-than-temporary impairments on securities with previously recognized other-than-temporary impairments		—		890
Reductions
Decreases related to other-than-temporary impairments on sold securities with previously recognized other-than-temporary impairments		(5,180)		(1,375)
Cumulative other-than-temporary impairment ending balance	$	18,903	$	23,663

Realized Gain (Loss) on Investments [Table Text Block]

The following table presents the results of sales of MBS for the periods indicated:

	Year Ended December 31,
	2014				2013
	Agency-Backed MBS		Private-Label MBS		Agency-Backed MBS		Private-Label MBS
Proceeds from sales	$	65,251	$	86,318	$	914,155	$	69,337
Gross gains		1,351		17,397		1,619		17,458
Gross losses		—		140		27,406		—

Investment [Table Text Block]

The Company’s other investments consisted of the following as of the dates indicated:

	December 31,
	2014		2013
Interest-only MBS	$	212	$	298
Non-public equity securities		975		975
Investments funds		650		792
Total other investments	$	1,837	$	2,065

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Financial Instruments (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	$ 341,299	$ 199,086
Total net gains (losses)
Included in earnings	17,243	16,526
Included in other comprehensive income	(15,091)	23,215
Purchases	0	167,682
Sales	(86,318)	(69,337)
Payments, net	(15,313)	(22,454)
Accretion of discount	25,617	26,581
Ending balance	267,437	341,299
The amount of net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	(420)	(1,270)
Senior Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	7,066	7,519
Total net gains (losses)
Included in earnings	1,690	0
Included in other comprehensive income	(1,654)	(254)
Purchases	0	0
Sales	(7,029)	0
Payments, net	(319)	(1,092)
Accretion of discount	246	893
Ending balance	0	7,066
The amount of net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	0	0
Re-REMIC Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	334,233	191,567
Total net gains (losses)
Included in earnings	15,553	16,526
Included in other comprehensive income	(13,437)	23,469
Purchases	0	167,682
Sales	(79,289)	(69,337)
Payments, net	(14,994)	(21,362)
Accretion of discount	25,371	25,688
Ending balance	267,437	334,233
The amount of net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$ (420)	$ (1,270)

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Derivative Financial Instruments and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments [Table Text Block]

The Company held the following derivative instruments as of the dates indicated:

	December 31, 2014				December 31, 2013
			Fair				Fair
	Notional Amount		Value		Notional Amount		Value
No hedge designation
Eurodollar futures
Derivative assets	$	2,445,000	$	751	$	8,758,000	$	4,361
Derivative liabilities		38,645,000		(76,848)		6,787,000		(30,638)
Total Eurodollar futures (1)		41,090,000		(76,097)		15,545,000		(26,277)
10-year swap futures
Derivative assets		—		—		635,500		3,727
Derivative liabilities		1,145,000		(47,460)		31,000		(18)
Total 10-year swap futures (2)		1,145,000		(47,460)		666,500		3,709
5-year U.S. Treasury note futures		—		—		100,000		(1,500)
Commitment to purchase MBS (3)		200,000		516		169,511		(973)
Commitment to sell MBS		—		—		125,000		336

⁽¹⁾ The $41,090,000 total notional amount of Eurodollar futures contracts as of December 31, 2014 represents the accumulation of Eurodollar futures contracts that mature on a quarterly basis between 2015 and 2019. As of December 31, 2014, the Company maintained $96,147 as a deposit and margin against the open Eurodollar futures contracts.

⁽²⁾ The $1,145,000 represents the total notional amount of 10-year swap futures as of December 31, 2014, of which $780,000 of notional amount matures in March 2015 and $365,000 in notional amount matures in March 2024. As of December 31, 2014, the Company maintained $64,280 as a deposit and margin against the open 10-year swap futures contracts.

⁽³⁾ The total notional amount of commitment to purchase MBS represents forward commitments to purchase fixed-rate MBS securities.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net change in unrealized gain on available-for-sale investment securities, taxes	$ (4,691)	$ 9,029	$ 407

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Accumulated other comprehensive income, taxes (in dollars)	$ 4,745	$ 9,436
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	450,000,000	450,000,000
Common stock, shares issued (in shares)	22,860,922	16,047,965
Common stock, shares outstanding (in shares)	22,860,922	16,047,965
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	105,869	554,055
Common stock, shares outstanding (in shares)	105,869	554,055

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Financial Instruments with Off-Balance-Sheet Risk and Credit Risk

12 Months Ended

Dec. 31, 2014

Risks and Uncertainties [Abstract]

Financial Instruments with Off-Balance-Sheet Risk and Credit Risk

Note 9. Financial Instruments with Off-Balance-Sheet Risk and Credit Risk:

As of December 31, 2014 and 2013, the Company had not entered into any transactions involving financial instruments that would expose the Company to significant related off-balance-sheet risk.

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Document And Entity Information (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Jun. 30, 2014	Jan. 30, 2015
Document Information [Line Items]
Entity Registrant Name	Arlington Asset Investment Corp.
Entity Central Index Key	0001209028
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	AI
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2014
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float		$ 516
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding			22,860,922
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding			105,869

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Revisions to Previously Reported Financial Statements

12 Months Ended

Dec. 31, 2014

Accounting Changes and Error Corrections [Abstract]

Revisions to Previously Reported Financial Statements

Note 10. Revisions to Previously Reported Financial Statements:

During the preparation of the 2013 consolidated financial statements, the Company concluded that the federal tax rate used to calculate deferred tax assets as of December 31, 2012 was incorrect and should have been lower than the statutory rate given the effects of recognizing a U.S. federal deferred income tax liability associated with state deferred tax assets. Although the impact of this change was not material to the consolidated financial statements as of and for the year ended December 31, 2012, the Company revised its previously reported consolidated financial statements and disclosures as of and for the year ended December 31, 2012. The following tables set forth the effected line items within the Company’s previously reported consolidated financial statements for the year ended December 31, 2012.

	Year Ended December 31, 2012
	As Previously Reported		Adjustment		As Revised
Consolidated Statement of Comprehensive Income
Income tax benefit	$	(160,821)	$	7,884	$	(152,937)
Net income		191,826		(7,884)		183,942
Earnings per share – Basic		18.80		(0.78)		18.02
Earnings per share – Diluted		18.73		(0.77)		17.96
Other comprehensive income, net of taxes
Unrealized gains (losses) for the period on available-for-sale securities, net of taxes		(1,843)		(66)		(1,909)
Comprehensive income		192,444		(7,863)		184,581

	Year Ended December 31, 2012
	As Previously Reported		Adjustment		As Revised
Consolidated Statement of Changes in Equity
Net income	$	191,826	$	(7,884)	$	183,942
Net change in unrealized gain on available-for-sale securities, net of taxes		618		21		639
Accumulated other comprehensive income, net of taxes		38,985		21		39,006
Accumulated deficit		(1,212,022)		(7,884)		(1,219,906)
Total equity		465,156		(7,863)		457,293

	Year Ended December 31, 2012
	As Previously Reported		Adjustment		As Revised
Consolidated Statement of Cash Flows
Net income	$	191,826	$	(7,884)	$	183,942
Deferred tax provision		—		7,884		7,884

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Interest income	$ 123,547	$ 87,019	$ 64,154
Interest expense
Interest on short-term debt	9,181	6,899	4,475
Interest on long-term debt	2,210	1,630	490
Total interest expense	11,391	8,529	4,965
Net interest income	112,156	78,490	59,189
Other loss, net
Investment loss, net	(38,672)	(47,745)	(10,723)
Other loss	(15)	(15)	(15)
Total other loss, net	(38,687)	(47,760)	(10,738)
Operating income before other expenses	73,469	30,730	48,451
Other expenses
Compensation and benefits	13,467	11,195	10,339
Professional services	1,529	2,561	4,118
Business development	253	145	136
Occupancy and equipment	422	427	467
Communications	201	191	202
Other operating expenses	2,197	2,072	2,184
Total other expenses	18,069	16,591	17,446
Income before income taxes	55,400	14,139	31,005
Income tax provision (benefit)	49,446	(35,322)	(152,937)
Net income	5,954	49,461	183,942
Basic earnings per share (in dollars per share)	$ 0.30	$ 3.09	$ 18.02
Diluted earnings per share (in dollars per share)	$ 0.29	$ 3.06	$ 17.96
Weighted-average shares outstanding (in thousands)
Basic (in shares)	20,043	15,990	10,205
Diluted (in shares)	20,397	16,189	10,242
Other comprehensive income, net of taxes
Unrealized gains (losses) for the period on available-for-sale securities (net of taxes of $432, $12,664, and $(1,215), respectively)	679	19,894	(1,909)
Reclassification
Included in investment gain (loss), net, in the statement of comprehensive income related to sales of available-for-sale securities (net of taxes of $(5,293), $(4,162), and $(4,488), respectively)	(11,343)	(6,537)	(7,050)
Included in investment gain (loss), net, in the statement of comprehensive income related to other-than-temporary charges on available-for-sale securities (net of taxes of $170, $527, and $6,110, respectively)	267	827	9,598
Comprehensive (loss) income	$ (4,443)	$ 63,645	$ 184,581

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Borrowings

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Borrowings

Note 4. Borrowings:

Repurchase Agreements

The Company has entered into repurchase agreements to fund its investments in MBS. Securities sold under agreements to repurchase, which are treated as financing transactions for financial reporting purposes, are collateralized by MBS and are carried at their contractual amounts, including accrued interest, as specified in the respective agreements. Under the repurchase agreements, the Company pledges its securities as collateral to secure the borrowing, which is equal in value to a specified percentage of the fair value of the pledged collateral, while the Company retains beneficial ownership of the pledged collateral. The counterparty to the repurchase agreements may require that the Company pledge additional securities or cash as additional collateral to secure borrowings when the value of the collateral declines.

As of December 31, 2014 and December 31, 2013, the Company had no amount at risk with a single repurchase agreement counterparty or lender greater than 10% of equity. The following table provides information regarding the Company’s outstanding repurchase agreement borrowings as of the dates and periods indicated:

	December 31,
	2014			2013
Outstanding balance	$	3,179,775		$	1,547,630
Value of assets pledged as collateral
Agency-backed MBS		3,300,383			1,556,763
Private-label MBS		75,642			117,148
Net amount (1)		196,250			126,281
Weighted-average rate		0.40	%		0.45	%
Weighted-average term to maturity		14.1 days			13.2 days
Weighted-average outstanding balance during the year ended	$	2,438,479		$	1,515,137
Weighted-average rate during the year ended		0.37	%		0.45	%

⁽¹⁾ Net amount represents the value of collateral in excess of corresponding repurchase obligation. The amount of collateral at-risk is limited to the outstanding repurchase obligation and not the entire collateral balance.

Long-Term Debt

As of December 31, 2014 and 2013, the Company had $40,000 of outstanding long-term debentures. On May 1, 2013, the Company completed a public offering of $25,000 of its 6.625% Senior Notes due in 2023 and received net proceeds of $24,038 after payment of underwriting discounts and commissions and expenses. These Senior Notes will mature on May 1, 2023, and may be redeemed in whole or in part at any time and from time to time at the Company’s option on or after May 1, 2016, at a redemption price equal to the principal amount redeemed plus accrued and unpaid interest. The interest payments on these Senior Notes are payable quarterly on February 1, May 1, August 1, and November 1 of each year, beginning on August 1, 2013. These Senior Notes are publicly traded on the New York Stock Exchange under the ticker symbol “AIW”. The Company’s long-term debentures consisted of the following as of the dates indicated:

	December 31, 2014						December 31, 2013
	Senior Notes			Trust Preferred Debt			Senior Notes			Trust Preferred Debt
Outstanding Principal	$	25,000		$	15,000		$	25,000		$	15,000
Annual Interest Rate		6.625	%		LIBOR+2.25-3.00	%		6.625	%		LIBOR+2.25-3.00	%
Interest Payment Frequency		Quarterly			Quarterly			Quarterly			Quarterly
Weighted-Average Interest Rate		6.625	%		2.98	%		6.625	%		2.99	%
Maturity		May 1, 2023			2033 – 2035			May 1, 2023			2033 – 2035
Early Redemption Date		May 1, 2016			2008 – 2010			May 1, 2016			2008 – 2010

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Financial Instruments

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Financial Instruments

Note 3. Financial Instruments:

Fair Value Hierarchy

The following tables set forth financial instruments accounted for under ASC 820 by level within the fair value hierarchy as of December 31, 2014 and December 31, 2013. As required by ASC 820, assets and liabilities that are measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Financial Instruments Measured at Fair Value on a Recurring Basis

	December 31, 2014
	Total		Level 1		Level 2		Level 3
MBS, at fair value
Trading
Agency-backed MBS	$	3,414,300	$	—	$	3,414,300	$	—
Available-for-sale
Agency-backed MBS		40		—		40		—
Private-label MBS
Senior securities		—		—		—		—
Re-REMIC securities		267,437		—		—		267,437
Total available-for-sale		267,477		—		40		267,437
Total MBS		3,681,777		—		3,414,340		267,437
Derivative assets, at fair value		1,267		751		516		—
Derivative liabilities, at fair value		(124,308)		(124,308)		—		—
Interest-only MBS, at fair value		212		—		—		212
Total	$	3,558,948	$	(123,557)	$	3,414,856	$	267,649

	December 31, 2013
	Total		Level 1		Level 2		Level 3
MBS, at fair value
Trading
Agency-backed MBS	$	1,576,452	$	—	$	1,576,452	$	—
Available-for-sale
Agency-backed MBS		47		—		47		—
Private-label MBS
Senior securities		7,066		—		—		7,066
Re-REMIC securities		334,233		—		—		334,233
Total available-for-sale		341,346		—		47		341,299
Total MBS		1,917,798		—		1,576,499		341,299
Derivative assets, at fair value		8,424		8,088		336		—
Derivative liabilities, at fair value		(33,129)		(32,156)		(973)		—
Interest-only MBS, at fair value		298		—		—		298
Total	$	1,893,391	$	(24,068)	$	1,575,862	$	341,597

The total financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $267,649, or 6.67% and $341,597, or 15.56%, of the Company’s total assets as of December 31, 2014 and 2013, respectively.

There were no transfers of securities in or out of Levels 1, 2 or 3 during the years ended December 31, 2014 and 2013.

Level 3 Financial Instruments Measured at Fair Value on a Recurring Basis

The fair value of the Company’s Level 3, available-for-sale, private-label MBS was $267,437 and $341,299 as of December 31, 2014 and 2013, respectively. The private-label MBS are primarily senior and re-REMIC tranches in securitization trusts issued between 2005 and 2010. The senior securities represent interests in securitizations that have the first right to cash flows and absorb losses last. The re-REMIC securities represent interests in re-securitizations of senior MBS and pro-rata mezzanine securities. For re-REMIC securities, the cash flows from, and any credit losses absorbed by, the underlying MBS are allocated among the re-REMIC securities issued in the re-securitization transactions based on the re-REMIC structure. For example, prime and non-prime residential senior securities have been resecuritized to create a two-tranche structure with a re-REMIC senior security and a re-REMIC subordinated security. In these re-REMIC securities, all principal payments from the underlying securities are directed to the re-REMIC senior security until the face value is fully paid off. Thereafter, all principal payments are directed to the re-REMIC subordinated security. For pro-rata mezzanine securities, principal payments from the underlying MBS are typically allocated concurrently and proportionally to the mezzanine securities along with senior securities. The re-REMIC subordinated and mezzanine securities absorb credit losses, if any, first; however, these credit losses occur only when credit losses exceed the credit protection provided to the underlying securities. Senior, re-REMIC and mezzanine securities receive interest while any face value is outstanding.

The Company’s private-label MBS were collateralized by residential prime and Alt-A mortgage loans and had the following weighted average characteristics, based on face value, as of the dates indicated:

	December 31,
	2014			2013
Original loan-to-value		68	%		69	%
Original FICO score		722			725
Three-month prepayment rate		11	%		14	%
Three-month loss severities		41	%		37	%
Weighted average coupon		2.96	%		3.34	%

The significant unobservable inputs for the valuation model include the following weighted-averages, based on face value, as of the dates indicated:

	December 31, 2014						December 31, 2013
				Re-REMIC						Re-REMIC
	Senior Securities  (1)			Securities			Senior Securities			Securities
Discount rate		—	%		5.55	%		6.00	%		6.55	%
Default rate		—	%		3.09	%		9.30	%		3.62	%
Loss severity rate		—	%		42.25	%		50.00	%		44.82	%
Prepayment rate		—	%		11.23	%		16.30	%		11.69	%

⁽¹⁾ The Company did not own any senior securities on December 31, 2014.

The ranges of the significant unobservable inputs for the valuation model were as follows as of the dates indicated:

	December 31, 2014						December 31, 2013
	Senior						Senior
	Securities  (1)			Re-REMIC Securities			Securities			Re-REMIC Securities
Discount rate		—	%		5.15 – 10.00	%		6.00	%	6.00 – 10.00	%
Default rate		—	%		1.00 – 8.80	%		9.30	%	0.95 – 9.60	%
Loss severity rate		—	%		29.23 – 57.50	%		50.00	%	29.15 – 57.50	%
Prepayment rate		—	%		7.40 – 17.70	%		16.30	%	6.40 – 19.00	%

⁽¹⁾ The Company did not own any senior securities on December 31, 2014.

The tables below set forth a summary of changes in the fair value and gains and losses of the Company’s Level 3 financial assets and liabilities that are measured at fair value on a recurring basis for the years ended December 31, 2014 and 2013.

	Year Ended December 31, 2014
			Re-REMIC
	Senior Securities		Securities		Total
Beginning balance, January 1, 2014	$	7,066	$	334,233	$	341,299
Total net gains (losses)
Included in earnings		1,690		15,553		17,243
Included in other comprehensive income		(1,654)		(13,437)		(15,091)
Purchases		—		—		—
Sales		(7,029)		(79,289)		(86,318)
Payments, net		(319)		(14,994)		(15,313)
Accretion of discount		246		25,371		25,617
Ending balance, December 31, 2014	$	—	$	267,437	$	267,437
The amount of net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$	—	$	(420)	$	(420)

	Year Ended December 31, 2013
			Re-REMIC
	Senior Securities		Securities		Total
Beginning balance, January 1, 2013	$	7,519	$	191,567	$	199,086
Total net gains (losses)
Included in earnings		—		16,526		16,526
Included in other comprehensive income		(254)		23,469		23,215
Purchases		—		167,682		167,682
Sales		—		(69,337)		(69,337)
Payments, net		(1,092)		(21,362)		(22,454)
Accretion of discount		893		25,688		26,581
Ending balance, December 31, 2013	$	7,066	$	334,233	$	341,299
The amount of net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$	—	$	(1,270)	$	(1,270)

Gains and losses included in earnings for the years ended December 31, 2014 and 2013 are reported in the following statement of comprehensive income line descriptions:

	Other Loss, Investment Loss, net
	2014		2013
Total gains (losses) included in earnings for the period	$	17,243	$	16,526
Change in unrealized gains (losses) relating to Level 3 assets still held at the reporting date	$	(420)	$	(1,270)

Level 3 Financial Instruments Measured at Fair Value on a Non-Recurring Basis

The Company also measures certain financial assets at fair value on a non-recurring basis. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to impairments. Due to the nature of these financial assets, enterprise values are primarily used to value these financial assets. In determining the enterprise value, the Company analyzes various financial, performance and market factors to estimate fair value, including where applicable, market trading activity. As a result, these financial assets are classified within Level 3 of the fair value hierarchy. As of December 31, 2014 and 2013, these financial assets are classified within the other investments category, represent the Company’s interest in non-public equity securities and investment funds and are valued at $1,625 and $1,767, respectively. For the year ended December 31, 2013, the Company recorded a loss of $177 in the carrying value of these financial assets. For the year ended December 31, 2014, there were no changes to the carrying value of these financial assets.

MBS, at Fair Value

MBS, at fair value ⁽¹⁾⁽²⁾, consisted of the following as of the dates indicated:

	December 31, 2014								December 31, 2013
			Net								Net
			Unamortized		Percent of		Weighted	Weighted			Unamortized		Percent of		Weighted	Weighted
	Fair		Premium		Total Fair		Average	Average	Fair		Premium		Total Fair		Average	Average
	Value		(Discount)		Value		Life	Rating (3)	Value		(Discount)		Value		Life	Rating (3)
Trading
Fannie Mae	$	2,064,465	$	—	56.07	%	8.1	AAA	$	997,488	$	—	52.01	%	9.4	AAA
Freddie Mac		1,349,835		—	36.66	%	8.2	AAA		578,964		—	30.19	%	9.6	AAA
Available-for-sale:
Agency-backed
Fannie Mae		40		—	—		4.9	AAA		47		—	—		5.8	AAA
Private-label
Senior securities		—		—	—		—	—		7,066		(4,789)	0.37	%	4.8	C-
Re-REMIC securities		267,437		(133,333)	7.27	%	10.4	NR		334,233		(202,450)	17.43	%	11.4	NR
	$	3,681,777	$	(133,333)	100.00	%			$	1,917,798	$	(207,239)	100.00	%

⁽¹⁾ The Company’s MBS portfolio was primarily comprised of fixed-rate MBS at December 31, 2014 and 2013. The weighted-average coupon of the MBS portfolio at December 31, 2014 and 2013 was 3.93% and 3.90%, respectively.

⁽²⁾ As of December 31, 2014 and 2013, the Company’s MBS investments with a fair value of $3,376,025 and $1,673,911, respectively, were pledged as collateral for repurchase agreements.

⁽³⁾ The securities issued by Fannie Mae and Freddie Mac are not rated by any rating agency; however, they are commonly thought of as having an implied rating of “AAA.” There is no assurance, particularly given the downgrade of the U.S. credit rating to “AA+” by Standard & Poor’s during the quarter ended September 30, 2011 and Fitch Ratings Inc.’s announcement on October 15, 2013 that it had placed the U.S. credit rating on negative watch, that these securities would receive such a rating if they were ever rated by a rating agency. The weighted-average rating of the Company’s private-label senior securities is calculated based on face value of the securities.

The Company has generally purchased private-label MBS at a discount. The Company, at least on a quarterly basis, estimates the future expected cash flows based on the Company’s observation of current information and events and applies a number of assumptions related to prepayment rates, interest rates, default rates, loss severity rates, and the timing and amount of cash flows and credit losses. These assumptions are difficult to predict as they are subject to uncertainties and contingencies related to future events that may impact the Company’s estimates and its interest income.

Interest income on the private-label MBS that were purchased at a discount to face value is recognized based on the security’s expected effective interest rate. At acquisition, the accretable yield is calculated as the difference between the undiscounted expected cash flows and the purchase price which is expected to be accreted into interest income over the remaining life of the security on a level-yield basis. The difference between the contractually required payments and the undiscounted expected cash flows represents the non-accretable difference. Based on actual payment activities and changes in estimates of undiscounted expected future cash flows, the accretable yield and the non-accretable difference can change over time. Significant increases in the amount or timing of undiscounted expected future cash flows are recognized prospectively as an adjustment to the accretable yield.

The following table presents the changes in the accretable yield on available-for-sale, private-label MBS for the years ended December 31, 2014 and 2013:

	Year Ended December 31,
	2014		2013(1)
Beginning balance	$	326,330	$	207,853
Accretion of discount		(25,617)		(26,581)
Reclassifications, net		(21,848)		62,141
Acquisitions		—		150,646
Sales		(76,757)		(67,729)
Ending balance	$	202,108	$	326,330

⁽¹⁾ The reclassification, net, and ending balance as of December 31, 2013 were revised from the previously reported balances of $46,319 and $310,508, respectively, to correct an immaterial error.

The Company acquired no available-for-sale, private-label MBS during 2014. For the available-for-sale, private-label MBS acquired during the year ended December 31, 2013, the contractually required payments receivable, the cash flow expected to be collected, and the fair value at the acquisition date were as follows:

	Year Ended December 31, 2013
Contractually required payments receivable	$	420,500
Cash flows expected to be collected		318,328
Basis in acquired securities		167,682

The Company’s available-for-sale MBS are carried at fair value in accordance with ASC 320, Debt and Equity Securities (ASC 320), the securities with resulting unrealized gains and losses reflected as other comprehensive income or loss. Gross unrealized gains and losses on these securities were the following as of the dates indicated:

	December 31, 2014
	Amortized Cost/Cost		Unrealized				Fair Value
	Basis  (1)		Gains		Losses
Agency-backed MBS	$	36	$	4	$	—	$	40
Private-label MBS
Senior securities		—		—		—		—
Re-REMIC securities		219,904		47,533		—		267,437
Total	$	219,940	$	47,537	$	—	$	267,477

⁽¹⁾ The amortized cost of MBS includes unamortized net discounts of $133,333 at December 31, 2014.

	December 31, 2013
	Amortized Cost/Cost		Unrealized				Fair Value
	Basis  (1)		Gains		Losses
Agency-backed MBS	$	43	$	4	$	—	$	47
Private-label MBS
Senior securities		5,412		1,654		—		7,066
Re-REMIC securities		273,264		60,970		(1)		334,233
Total	$	278,719	$	62,628	$	(1)	$	341,346

⁽¹⁾ The amortized cost of MBS includes unamortized net discounts of $207,239 at December 31, 2013.

For the years ended December 31, 2014 and 2013, the Company recorded other-than-temporary impairment charges of $420 and $1,270, respectively, as a component of investment loss, net, on the consolidated statements of comprehensive income related to deterioration in credit quality on available-for-sale, private-label MBS with a cost basis of $2,174 and $11,688, respectively, prior to recognizing the other-than-temporary impairment charges.

The following table presents a summary of other-than-temporary impairment charges included in earnings for the periods indicated and cumulative other-than-temporary impairment charges recognized on the MBS held as of the dates indicated:

	Year Ended December 31,
	2014		2013
Cumulative other-than-temporary impairment, beginning balance	$	23,663	$	23,768
Additions
Other-than-temporary impairments not previously recognized		420		380
Increases related to other-than-temporary impairments on securities with previously recognized other-than-temporary impairments		—		890
Reductions
Decreases related to other-than-temporary impairments on sold securities with previously recognized other-than-temporary impairments		(5,180)		(1,375)
Cumulative other-than-temporary impairment ending balance	$	18,903	$	23,663

The following table presents the results of sales of MBS for the periods indicated:

	Year Ended December 31,
	2014				2013
	Agency-Backed MBS		Private-Label MBS		Agency-Backed MBS		Private-Label MBS
Proceeds from sales	$	65,251	$	86,318	$	914,155	$	69,337
Gross gains		1,351		17,397		1,619		17,458
Gross losses		—		140		27,406		—

Other Investments

The Company’s other investments consisted of the following as of the dates indicated:

	December 31,
	2014		2013
Interest-only MBS	$	212	$	298
Non-public equity securities		975		975
Investments funds		650		792
Total other investments	$	1,837	$	2,065

For the years ended December 31, 2014 and 2013, the Company recorded other-than-temporary impairment charges of $29 and $84, respectively, as a component of investment loss, net, on the consolidated statements of comprehensive income on an investment in interest-only MBS.

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Borrowings (Tables)

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Schedule of Repurchase Agreements [Table Text Block]

The following table provides information regarding the Company’s outstanding repurchase agreement borrowings as of the dates and periods indicated:

	December 31,
	2014			2013
Outstanding balance	$	3,179,775		$	1,547,630
Value of assets pledged as collateral
Agency-backed MBS		3,300,383			1,556,763
Private-label MBS		75,642			117,148
Net amount (1)		196,250			126,281
Weighted-average rate		0.40	%		0.45	%
Weighted-average term to maturity		14.1 days			13.2 days
Weighted-average outstanding balance during the year ended	$	2,438,479		$	1,515,137
Weighted-average rate during the year ended		0.37	%		0.45	%

⁽¹⁾ Net amount represents the value of collateral in excess of corresponding repurchase obligation. The amount of collateral at-risk is limited to the outstanding repurchase obligation and not the entire collateral balance.

Schedule of Long-term Debt Instruments [Table Text Block]

The Company’s long-term debentures consisted of the following as of the dates indicated:

	December 31, 2014						December 31, 2013
	Senior Notes			Trust Preferred Debt			Senior Notes			Trust Preferred Debt
Outstanding Principal	$	25,000		$	15,000		$	25,000		$	15,000
Annual Interest Rate		6.625	%		LIBOR+2.25-3.00	%		6.625	%		LIBOR+2.25-3.00	%
Interest Payment Frequency		Quarterly			Quarterly			Quarterly			Quarterly
Weighted-Average Interest Rate		6.625	%		2.98	%		6.625	%		2.99	%
Maturity		May 1, 2023			2033 – 2035			May 1, 2023			2033 – 2035
Early Redemption Date		May 1, 2016			2008 – 2010			May 1, 2016			2008 – 2010

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Quarterly Data (Unaudited)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Quarterly Data (Unaudited)

Note 11. Quarterly Data (Unaudited):

The following tables set forth selected information for each of the fiscal quarters during the years ended December 31, 2014 and 2013. The selected quarterly data is derived from unaudited financial statements of the Company and has been prepared on the same basis as the annual, audited financial statements to include, in the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for fair statement of the results for such periods.

Note: The sum of quarterly earnings per share amounts may not equal full year earnings per share amounts due to differing average outstanding shares amounts for the respective periods.

			Net		Basic Earnings		Diluted Earnings
	Net Interest Income		Income (Loss)		(Loss) Per Share		(Loss) Per Share
2014
First Quarter	$	21,582	$	7,033	$	0.42	$	0.41
Second Quarter		27,387		18,839		0.95		0.94
Third Quarter		30,325		12,847		0.62		0.61
Fourth Quarter		32,862		(32,765)		(1.43)		(1.43)
Total Year	$	112,156	$	5,954		0.30		0.29

			Net			Basic Earnings		Diluted Earnings
	Net Interest Income		Income			Per Share		Per Share
2013
First Quarter	$	16,724	$	3,177		$	0.23	$	0.23
Second Quarter		20,925		3,194			0.19		0.19
Third Quarter		20,681		3,093			0.19		0.18
Fourth Quarter		20,160		39,997	(1)		2.40		2.36
Total Year	$	78,490	$	49,461			3.09		3.06

⁽¹⁾ Reflects $185 increase in net income as a result of an out of period adjustment (that is related to the immaterial revision as disclosed in Note 10, Revisions to Previously Reported Financial Statements) for the first three quarters of the year ended December 31, 2013.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 7. Commitments and Contingencies:

Contractual Obligations

The Company has contractual obligations to make future payments in connection with borrowings and non-cancelable lease agreements and other contractual commitments. The following table sets forth these contractual obligations by fiscal year:

	2015		2016		2017		2018		2019		Thereafter		Total
Borrowings (1)	$	—	$	—	$	—	$	—	$	—	$	40,000	$	40,000
Minimum rental and other contractual commitments (2)		15		446		458		471		483		497		2,370
	$	15	$	446	$	458	$	471	$	483	$	40,497	$	42,370

⁽¹⁾ This table excludes interest payments to be made on the Company’s long-term debt securities. Based on the weighted average interest rate of 3.01%, approximately $113 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $15,000 of trust preferred debt. Interest on the trust preferred debt is based on the 3-month LIBOR; therefore, actual coupon interest will likely differ from this estimate. The trust preferred debt will mature beginning in October 2033 through July 2035. As of December 31, 2014, approximately $414 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $25,000 of Senior Notes. The Senior Notes have an annual interest rate of 6.625% and will mature on May 1, 2023.

⁽²⁾ Equipment and office rent expense for 2014, 2013 and 2012 was $249, $243 and $263, respectively.

The Company also has short-term repurchase agreement liabilities of $3,179,775 as of December 31, 2014. See Note 4 for further information.

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Shareholders' Equity (Details Textual) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended			0 Months Ended
	Dec. 31, 2012	Dec. 31, 2014	Dec. 31, 2013	Jun. 06, 2014	Dec. 31, 2011	Jun. 11, 2014	Apr. 07, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred Stock, Shares Authorized (In Shares)		25,000,000	25,000,000
Stock Repurchased and Retired During Period, Value	$ 786
Book Value PSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		37,725
Total Shareholder Units PSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		52,424
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	279	927	632
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	20,204	15,521	15,616
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Beginning Balance	34,835	117,112	57,673		15,206
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	431	430	430
Long Term Incentive Plan 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Maximum Value Of Awards To Single Participant Not Settled In Shares		10,000
Long Term Incentive Plan 2014 [Member] | Stock Options and SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee		300,000
Long Term Incentive Plan 2014 [Member] | Restricted Stock and Units And Performance Based Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee		300,000
Performance-Based Long-Term Incentive Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense		2,457	1,485
Non Employee Director Stock Compensation Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Equity Instrument Other Than Options Value Of Annual Grant Per Non Employee Director		80
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period For Services		1,081		14,440
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value				400
Common Class A [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Shares Authorized (In Shares)		450,000,000	450,000,000
Common Stock, Par or Stated Value Per Share		0.01	$ 0.01
Common Stock Voting Rights Per Share Owned		1
Stock Repurchase Program, Number of Shares Authorized to be Repurchased		500,000
Stock Repurchased During Period Average Price Per Share	$ 18.79
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased		205,485	205,485
Share Price						$ 27.70
Common Class A [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Employee Trust Restricted Stock Outstanding Weighted Average Grant Date Fair Value	$ 310.40	310.40	$ 310.40
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options		2,181	838
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Beginning Balance	9,155	9,155	9,155
Common Class A [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities	12,057	448,186
Stock Repurchased and Retired During Period, Shares	41,790
Stock Repurchased and Retired During Period, Value	0
Common Class A [Member] | Long Term Incentive Plan 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized							2,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		1,998,774
Common Class A [Member] | Long Term Incentive Plan 2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		308,934	443,504
Common Class B [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Shares Authorized (In Shares)		100,000,000	100,000,000
Common Stock, Par or Stated Value Per Share		0.01	$ 0.01
Common Stock Voting Rights Per Share Owned		3
Common Class B [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities	(12,057)	(448,186)
Stock Repurchased and Retired During Period, Shares	0
Stock Repurchased and Retired During Period, Value	$ 0

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Derivative Financial Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging Activities

Note 5. Derivative Financial Instruments and Hedging Activities:

In the normal course of its operations, the Company is a party to financial instruments that are accounted for as derivative financial instruments in accordance with ASC 815. These instruments may include interest rate swaps, Eurodollar futures, swap futures, and U.S. Treasury futures contracts, put options and certain commitments to purchase and sell MBS. The exchange traded derivatives such as Eurodollar futures and swap futures are cash settled on a daily basis. The Company may be required to pledge collateral for margin requirements with third-party custodians in connection with certain derivative transactions. These transactions are not under master netting agreements. In addition, certain features of the securitization structures of the Company’s private-label MBS are considered derivatives under ASC 815. The Company determined that these embedded derivatives have de minimis value, if any.

During the years ended December 31, 2014 and 2013, the Company entered into various financial contracts to hedge certain MBS and related borrowings and other long-term debt. These financial contracts are not designated as hedges under ASC 815. The changes in fair value on these derivatives are recorded to net investment (loss) gain, net, in the statement of comprehensive income. For the years ended December 31, 2014 and 2013, the Company recorded net (losses) gains of $(140,353) and $58,003, respectively, on these derivatives. The Company held the following derivative instruments as of the dates indicated:

	December 31, 2014				December 31, 2013
			Fair				Fair
	Notional Amount		Value		Notional Amount		Value
No hedge designation
Eurodollar futures
Derivative assets	$	2,445,000	$	751	$	8,758,000	$	4,361
Derivative liabilities		38,645,000		(76,848)		6,787,000		(30,638)
Total Eurodollar futures (1)		41,090,000		(76,097)		15,545,000		(26,277)
10-year swap futures
Derivative assets		—		—		635,500		3,727
Derivative liabilities		1,145,000		(47,460)		31,000		(18)
Total 10-year swap futures (2)		1,145,000		(47,460)		666,500		3,709
5-year U.S. Treasury note futures		—		—		100,000		(1,500)
Commitment to purchase MBS (3)		200,000		516		169,511		(973)
Commitment to sell MBS		—		—		125,000		336

⁽¹⁾ The $41,090,000 total notional amount of Eurodollar futures contracts as of December 31, 2014 represents the accumulation of Eurodollar futures contracts that mature on a quarterly basis between 2015 and 2019. As of December 31, 2014, the Company maintained $96,147 as a deposit and margin against the open Eurodollar futures contracts.

⁽²⁾ The $1,145,000 represents the total notional amount of 10-year swap futures as of December 31, 2014, of which $780,000 of notional amount matures in March 2015 and $365,000 in notional amount matures in March 2024. As of December 31, 2014, the Company maintained $64,280 as a deposit and margin against the open 10-year swap futures contracts.

⁽³⁾ The total notional amount of commitment to purchase MBS represents forward commitments to purchase fixed-rate MBS securities.

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Note 6. Income Taxes:

The Company is taxed as a C corporation for federal income tax purposes.

The provision (benefit) for income taxes from operations consists of the following for the years ended December 31, 2014, 2013 and 2012:

	2014		2013		2012
Federal	$	41,819	$	(20,075)	$	(115,321)
State		7,627		(15,247)		(37,616)
	$	49,446	$	(35,322)	$	(152,937)
Current	$	796	$	(14,860)	$	1,889
Deferred		48,650		(20,462)		(154,826)
	$	49,446	$	(35,322)	$	(152,937)

Deferred tax assets and (liabilities) consisted of the following as of December 31, 2014 and 2013:

	2014		2013
Net operating loss carry-forward	$	57,225	$	71,214
Unrealized gains and losses on investments and derivatives, net		24,434		70,221
AMT credit		7,244		6,328
Accrued compensation		1,515		436
Realized gains and losses on designated derivatives, net		2,733		8,681
Other, net		582		4,303
Capital loss carry-forward		54,659		19,743
Valuation allowance on capital loss carry-forward		(26,027)		(15,075)
Net deferred tax asset	$	122,365	$	165,851

The provision (benefit) for income taxes results in effective tax rates that differ from the federal statutory rates. The reconciliation of the Company and its subsidiaries income tax attributable to net income computed at federal statutory rates to income tax expense was:

	December 31,
	2014		2013		2012
Federal income tax at statutory rate	$	19,390	$	4,949	$	10,852
State income taxes, net of federal benefit		2,161		849		1,813
Expiration of capital loss carryover		4,668		57,254		37,935
Reversal of unrecognized tax benefit related to uncertain tax position and related accrued interest, and related AMT credits		—		(11,028)		—
Federal liability on state deferred tax assets		—		1,237		7,884
Losses on MBS acquired prior to 2012		(1,178)		—		—
Tax basis adjustments		(1,656)		—		—
Other, net		34		2,606		945
Valuation allowance		26,027		(91,189)		(212,366)
Total income tax provision (benefit)	$	49,446	$	(35,322)	$	(152,937)

During the year ended December 31, 2012, the Company recorded $152,937 of income tax benefit as a result of releasing $162,519 of valuation allowance previously provided for certain deferred tax assets. The amount of the valuation allowance released by the Company represents a portion of deferred tax assets that was deemed more-likely-than-not that the Company will realize the benefits based on the analysis where the positive evidences outweighed the negative evidences. The Company’s framework for assessing the recoverability of deferred tax assets required consideration of all available evidence, including:

• the sustainability of recent operating profitability;

• the predictability of future operating profitability of the character necessary to realize the deferred tax assets; and

• the carry-forward periods for the net operating loss and capital loss carry-forwards.

The determination to release valuation allowance as of December 31, 2012 was based upon the Company meeting the criteria in the framework.

Effective December 31, 2013, the Company contributed 40 of its private-label MBS with $367,642 in face value in a taxable contribution (Contribution) to Rosslyn REIT Trust. Rosslyn REIT Trust (formerly known as FBR REIT Asset Trust) was formed on December 27, 2007 as a Maryland real estate investment trust and elected to be taxed as a REIT for U.S. federal income tax purposes effective January 1, 2014 , upon filing its federal income tax return for that year. The Company owns all the common shares of Rosslyn REIT Trust and all of the preferred shares are owned by outside investors. The Contribution resulted in taxable capital gains of $68,041. The Company utilized net capital loss carry-forwards to offset the capital gain recognized on the Contribution for tax purposes.

With the completion of IRS examination of the Company’s tax years 2009 and 2010 without any adjustment and the expiration of the statute of limitation on 2009 state tax return, the Company reversed $12,810 of unrecognized tax benefits related to an uncertain tax position and $3,402 of related accrued interest during the year ended December 31, 2013. The Company also reversed deferred taxes associated with accrued interest and AMT credits of $5,184 related to the unrecognized tax benefits previously recorded.

As of December 31, 2014, the Company had an NCL carry-forward of $140,512 that can be used to offset future capital gains. $50,754 of capital losses expired in 2014. In addition, as of December 31, 2014, the Company had an NOL carry-forward of $147,107, which can be used to offset future taxable income. The NOL carry-forward will begin to expire in 2027. The valuation allowance relates to the estimated amount of NCLs that are more-likely-than-not to expire unused in 2019.

As of December 31, 2014 and 2013, the Company had no unrecognized tax benefits.

As of December 31, 2014, the Company has assessed the need for recording a provision for any uncertain tax position and has made the determination that such provision is not necessary.

The Company is subject to examination by the U.S. Internal Revenue Service (IRS), and state and local authorities in jurisdictions where the Company has significant business operations.

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Shareholders' Equity

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Shareholders' Equity

Note 8. Shareholders’ Equity:

The Company has authorized share capital of 450,000,000 shares of Class A common stock, par value $0.01 per share; 100,000,000 shares of Class B common stock, par value $0.01 per share; and 25,000,000 shares of undesignated preferred stock. Holders of the Class A and Class B common stock are entitled to one vote and three votes per share, respectively, on all matters voted upon by the shareholders. Shares of Class B common stock convert to shares of Class A common stock at the option of the Company in certain circumstances including (i) upon sale or other transfer, (ii) at the time the holder of such shares of Class B common stock ceases to be affiliated with the Company and (iii) upon the sale of such shares in a registered public offering. The Company’s Board of Directors has the authority, without further action by the shareholders, to issue preferred stock in one or more series and to fix the terms and rights of the preferred stock. Such actions by the Board of Directors could adversely affect the voting power and other rights of the holders of common stock. Preferred stock could thus be issued quickly with terms that could delay or prevent a change in control of the Company or make removal of management more difficult. At present, the Company has no plans to issue any preferred stock.

Conversion of Class B Common Stock to Class A Common Stock

During the year ended December 31, 2014, several holders of the Company's Class B common stock converted an aggregate of 448,186 shares of Class B common stock into 448,186 shares of Class A common stock. There were no conversions of shares of Class B common stock into shares of Class A common stock during the year ended December 31, 2013. Holders of shares of Class A common stock are entitled to one vote for each share on all matters voted on by shareholders, and the holders of shares of Class B common stock are entitled to three votes per share on all matters voted on by shareholders. Under the Company's Articles of Incorporation, shares of Class B common stock are convertible into shares of Class A common stock on a one-for-one basis.

Share Repurchases

From time to time, the Company repurchases shares of its Class A common stock under a share repurchase program authorized by the Board of Directors in July 2010 (Repurchase Program), pursuant to which the Company is authorized to repurchase up to 500,000 shares of its Class A common stock.

Repurchases under the Repurchase Program may be made from time to time on the open market and in private transactions at management’s discretion in accordance with applicable federal securities laws. The timing of repurchases and the exact number of shares of Class A common stock to be repurchased will depend upon market conditions and other factors. The Repurchase Program is funded using the Company’s cash on hand and cash generated from operations. The Repurchase Program has no expiration date and may be suspended or terminated at any time without prior notice.

The Company had no share repurchase activities during the years ended December 31, 2014 and 2013. During the year ended December 31, 2012, the Company repurchased 41,790 shares of its Class A common stock with an average price of $18.79 per share, resulting in total cost of $786.

As of December 31, 2014, and 2013, 205,485 shares of Class A common stock remain available for repurchases under the Repurchase Program.

Equity Offerings

During the years ended December 31, 2014 and 2013, the Company completed public offerings as follows:

Closing date of the offering		March 13, 2013		March 28, 2014		September 8, 2014
Shares sold to public		3,000,000		2,750,000		2,750,000
Shares sold pursuant to the underwriter over-allotment		450,000		312,500		412,500
Total shares of Class A common stock		3,450,000		3,062,500		3,162,500
Public offering price per share	$	25.50	$	27.40	$	27.61
Net proceeds (1)	$	86,964	$	81,669	$	85,214

⁽¹⁾ Net of underwriting discounts and commissions and expenses.

Dividends

Pursuant to the Company’s variable dividend policy, the Board of Directors evaluates dividends on a quarterly basis and, in its sole discretion, approves the payment of dividends. The Company’s dividend payments, if any, may vary significantly from quarter to quarter. The Board of Directors has approved and the Company has declared the following dividends to date in 2014:

Quarter Ended	Dividend Amount		Declaration Date	Record Date	Pay Date
December 31	$	0.875	December 18	December 31	January 30, 2015
September 30		0.875	September 17	September 29	October 31
June 30		0.875	June 11	June 30	July 31
March 31		0.875	March 13	March 31	April 30

The Board of Directors has approved and the Company declared and paid the following dividends for 2013:

Quarter Ended	Dividend Amount		Declaration Date	Record Date	Pay Date
December 31	$	0.875	December 19	December 31	January 31, 2014
September 30		0.875	September 18	September 30	October 31
June 30		0.875	June 17	June 28	July 31
March 31		0.875	March 15	March 28	April 30

Long-Term Incentive Plan

On April 7, 2014, the Board of Directors adopted the Arlington Asset Investment Corp. 2014 Long-Term Incentive Plan (2014 Plan). The 2014 Plan was approved by the Company’s shareholders and became effective on July 15, 2014.

Under the 2014 Plan, a maximum number of 2,000,000 shares of Class A common stock of the Company, subject to adjustment as set forth in the 2014 Plan, were authorized for issuance and may be issued to employees, directors, consultants and advisors of the Company and its affiliates. As of December 31, 2014, 1,998,774 shares remained available for issuance under the 2014 Plan. The 2014 Plan replaced the Arlington Asset Investment Corp. 2011 Long-Term Incentive Plan (2011 Plan). No additional grants will be made under the 2011 Plan. However, previous grants under the 2011 Plan will remain in effect subject to the terms of the 2011 Plan and the applicable award agreement, and shares of Class A common stock may be issued under the 2011 Plan. The shares of Class A common stock to be issued under the 2011 Plan are subject to the achievement of performance measures and/or vesting. As of December 31, 2014 and December 31, 2013, 308,934 and 443,504 shares, respectively, remained available for issuance under the 2011 Plan.

Under the 2014 Plan, the Compensation Committee of the Company’s Board of Directors may grant options, stock appreciation rights (SARs), restricted stock and restricted stock units (RSUs), performance awards and/or other stock-based awards. However, no participant may be granted (i) options or SARs during any twelve month period covering more than 300,000 shares or (ii) restricted stock, RSUs, performance awards and/or other stock-based awards denominated in shares that are intended to qualify as performance based compensation under Section 162(m) that permit the participant to earn more than 300,000 shares for each twelve months in the vesting or period on which performance is measured (Performance Period). These share limits are subject to adjustment in the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, reverse stock split, spin-off, extraordinary cash dividend or similar transaction or other change in corporate structure affecting the share. In addition, during any calendar year no participant may be granted performance awards that are denominated in cash and that are intended to qualify as performance based compensation under Section 162(m) under which more than $10,000 may be earned for each twelve months in the Performance Period. Each of the individual award limits described in this paragraph will be multiplied by two during the first calendar year in which the participant commences employment with the Company and its affiliates. The 2014 Plan will terminate on the tenth anniversary of its effective date unless sooner terminated by the Board of Directors. The Company uses a fair value based measurement method in accounting for all share based payment transactions.

Performance-Based Long-Term Incentive Program

On August 13, 2012, the Compensation Committee of the Board of Directors of the Company adopted a performance-based long-term incentive program (Performance-based Program) that provides for the issuance of two types of performance share units (PSUs).

The Compensation Committee established performance goals under the Performance-based Program. Two types of PSUs may be awarded under the Performance-based Program: Book Value PSUs and Total Shareholder Return Units (TSR PSUs). The Book Value PSUs are eligible to vest based on the compound annualized growth in the Company’s book value per share (i.e., book value change with such adjustments as determined and approved by the Compensation Committee plus dividends on a reinvested basis) during the applicable performance period. The TSR PSUs are eligible to vest based on the Company’s compound annualized total shareholder return (i.e., share price change plus dividends on a reinvested basis) during the applicable performance period.

PSUs do not have any voting rights. No dividends are paid on outstanding PSUs during the applicable performance period. Instead, dividend equivalents are accrued on outstanding PSUs during the applicable performance period, deemed invested in shares of Class A common stock and are paid out in shares of Class A common stock at the end of the performance period to the extent that the underlying PSUs vest. Upon settlement, vested PSUs are converted into shares of the Company’s Class A common stock on a one-for-one basis. The PSUs and dividend equivalents are settled in whole shares of Class A common stock with a cash payment in lieu of any fractional share.

The right to receive shares of Class A common stock upon vesting of PSUs at the end of the applicable performance period is subject to both continued employment and the achievement of the Company performance goals established by the Compensation Committee. The employment requirement, but not the performance requirement, is waived in the event the awardee dies, becomes disabled or retires; provided, however, that if the awardee dies, becomes disabled or retires before the first anniversary of the grant date, the number of PSUs that are earned under the performance targets are pro-rated. If an awardee is terminated without “cause,” the Compensation Committee, in the exercise of its discretion, determines whether any of the PSUs have been earned, provided that the Compensation Committee may not approve a payout that exceeds the number of PSUs earned under the performance targets. In the event of a change of control, the number of PSUs that are earned for each performance period are determined immediately prior to the change of control based on actual performance and vests subject to continued employment for the remainder of the original performance period, subject to accelerated vesting in certain circumstances.

Except as described above or as the Compensation Committee at any time may otherwise determine, an awardee will forfeit the right to any PSUs if he or she terminates employment before the payment date.

The Compensation Committee of the Board of Directors of the Company approved the following grants to the participants in the Performance-based Program:

	Year Ended December 31,
	2012	2013	2014
Grant date	August 13, 2012	July 1, 2013	July 1, 2014
Shares granted
Book Value PSUs	30,177	34,221	35,126
TSR PSUs	41,735	34,567	35,593

For the grants made in 2012 (2012 PSU Grants), the Compensation Committee awarded PSUs with an aggregate grant date fair value equal to 75% of the awardee’s base salary, with 50% of the total grant date fair value represented by Book Value PSUs and 50% of the total grant date fair value represented by TSR PSUs. To facilitate the implementation of the Performance-based Program, the Compensation Committee established both a two-year and three-year performance period for the initial grant of PSUs. A portion of the Book Value PSUs and TSR PSUs are eligible for vesting at the end of the second year following the grant date, and a portion of the Book Value PSUs and TSR PSUs are eligible for vesting at the end of the third year following the grant date. The actual number of shares of Class A common stock that will be issued to each participant at the end of the applicable performance period will vary between 0% and 200% of the number of PSUs granted, depending on performance results. If the threshold level of performance goals are not achieved, no PSUs are earned. If the initial performance threshold is met, participants will be eligible to receive 50% of the granted PSUs for Company performance at the threshold level, 100% of the granted PSUs for Company performance at the target level and 200% of the granted PSUs for Company performance at the maximum level, with linear interpolation for achievement falling between the performance levels. During 2014, the Company issued 37,725 and 52,424 shares for the vesting of Book Value PSUs and TSR PSUs, respectively, related to the 2012 PSU Grants.

For the grants made in 2013 (2013 PSU Grants) and 2014 (2014 PSU Grants), the Compensation Committee awarded PSUs with an aggregate grant date fair value equal to 100% of the awardee’s base salary, with 50% of the total grant date fair value represented by Book Value PSUs and 50% of the total grant date fair value represented by TSR PSUs. The Compensation Committee established a three-year performance period. The Book Value PSUs and TSR PSUs will be eligible for vesting at the end of the third year following the respective grant dates. The actual number of shares of Class A common stock that will be issued to each participant at the end of the applicable performance period will vary between 0% and 250% of the number of PSUs granted, depending on performance results. If the threshold level of performance goals are not achieved, no PSUs are earned. If the initial performance threshold is met, participants will be eligible to receive 50% of the granted PSUs for Company performance at the threshold level, 100% of the granted PSUs for Company performance at the target level and 250% of the granted PSUs for Company performance at the maximum level, with linear interpolation for achievement falling between the performance levels.

The Company recorded $2,457 and $1,485 in compensation expenses related to the Performance-based Program during the years ended December 31, 2014 and 2013, respectively.

Restricted Stock

The Company grants restricted common shares to employees that vest ratably over a three year period or cliff-vest after two to four years for various purposes based on continued employment over these specified periods. As of December 31, 2014 and 2013, a total of 117,112 and 57,673 shares, respectively, of such restricted Class A common stock were outstanding with unamortized deferred compensation of $2,181 and $838, respectively. A summary of these unvested restricted stock awards is presented below:

		Weighted-average		Weighted-
		Grant-date Fair		average Remaining
	Number of Shares	Value		Vested Period
Share Balance as of December 31, 2011	15,206	$	35.40		2.0
Granted	25,500		22.99		—
Forfeitures	—		—		—
Vestitures	(5,871)		47.60		—
Share Balance as of December 31, 2012	34,835		24.24		2.2
Granted	36,000		26.74		—
Forfeitures	—		—		—
Vestitures	(13,162)		24.65		—
Share Balance as of December 31, 2013	57,673		25.71		2.0
Granted	84,602		26.84		—
Forfeitures	—		—		—
Vestitures	(25,163)		25.64		—
Share Balance as of December 31, 2014	117,112		26.54		1.9

For the years ended December 31, 2014, 2013, and 2012, the Company recognized $927, $632 and $279, respectively, of compensation expense related to this restricted stock plan.

In addition, as part of the Company’s satisfaction of incentive compensation earned for past service under the Company’s variable compensation programs, employees may receive restricted Class A common stock in lieu of cash payments. These restricted Class A common stock shares are issued to an irrevocable trust and are not returnable to the Company. No such shares were issued in 2014, 2013 and 2012. As of December 31, 2014, 2013, and 2012, the Company had 9,155 vested shares with an weighted-average grant-date fair value of $310.40 of the undistributed restricted stock issued to the trust.

Director Stock Compensation Plan

The Company also grants options, stock or restricted stock units (RSUs) in lieu of or in addition to annual director fees to non-employee directors. The Board approved annual awards of RSUs equal in value to $80 to each director to be made in conjunction with the annual shareholders meeting. On June 6, 2014, the non-employee directors received an annual grant of an aggregate of 14,440 RSUs having an aggregate grant date fair value of $400 based on the closing sale price of the Class A common stock on the New York Stock Exchange on June 11, 2014 of $27.70. In addition to the annual grant of RSUs, the Company also granted 1,081 additional RSUs to the non-employee directors in lieu of certain cash payments for services as Lead Independent Director or as a chairman of one of the Board’s standing committees. Vested RSUs are convertible to Class A common stock upon the director ceasing to be a member of the Board. All options, stock and RSUs awarded to non-employee directors are non-transferable other than by will or the laws of descent and distribution. During 2014, 2013, and 2012, the Company granted 15,521, 15,616 and 20,204 RSUs, respectively. For the years ended December 31, 2014, 2013, and 2012, the Company recognized $430, $430 and $431, respectively, of director fees related to these RSUs.

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Quarterly Data (Unaudited) (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2013
Quarterly Financial Information Disclosure [Line Items]
Increase In Net Income	$ 185

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Financial Instruments (Details 1)	Dec. 31, 2014 Scores	Dec. 31, 2013 Scores
Underlying Collateral Quantitative Disclosures [Line Items]
Original loan-to-value	68.00%	69.00%
Original FICO score	722	725
Three-month prepayment rate	11.00%	14.00%
Three-month loss severities	41.00%	37.00%
Weighted average coupon	2.96%	3.34%

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Line Items]
Federal	$ 41,819	$ (20,075)	$ (115,321)
State	7,627	(15,247)	(37,616)
Income tax (benefit) provision for federal and state	49,446	(35,322)	(152,937)
Income Tax Expense (Benefit), Continuing Operations [Abstract]
Current	796	(14,860)	1,889
Deferred	48,650	(20,462)	(154,826)
Income tax (benefit) provision for current and deferred	$ 49,446	$ (35,322)	$ (152,937)

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

The estimated fair values of the Company’s financial instruments are as follows:

	December 31, 2014				December 31, 2013
			Estimated Fair				Estimated
	Carrying Amount		Value		Carrying Amount		Fair Value
Financial assets
Cash and cash equivalents	$	33,832	$	33,832	$	48,628	$	48,628
Interest receivable		10,701		10,701		5,173		5,173
Other receivables		1,138		1,138		212		212
MBS
Agency-backed MBS		3,414,340		3,414,340		1,576,499		1,576,499
Private-label MBS
Senior securities		—		—		7,066		7,066
Re-REMIC securities		267,437		267,437		334,233		334,233
Derivative assets		1,267		1,267		8,424		8,424
Other investments		1,837		1,837		2,065		2,065
Deposits		160,427		160,427		45,504		45,504
Financial liabilities
Repurchase agreements		3,179,775		3,179,775		1,547,630		1,547,630
Interest payable		1,106		1,106		774		774
Long-term debt		40,000		39,200		40,000		36,620
Derivative liabilities		124,308		124,308		33,129		33,129
Accounts payable, accrued expenses and other liabilities		1,006		1,006		1,391		1,391

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table presents the computations of basic and diluted earnings per share for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
	2014				2013				2012
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Weighted average shares outstanding Common stock (in thousands)		20,043		20,043		15,990		15,990		10,205		10,205
Stock options, performance share units, and unvested restricted stock (in thousands)		—		354		—		199		—		37
Weighted average common and common equivalent shares outstanding (in thousands)		20,043		20,397		15,990		16,189		10,205		10,242
Net income applicable to common stock	$	5,954	$	5,954	$	49,461	$	49,461	$	183,942	$	183,942
Net income per common share	$	0.30	$	0.29	$	3.09	$	3.06	$	18.02	$	17.96

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block]

The Company has contractual obligations to make future payments in connection with borrowings and non-cancelable lease agreements and other contractual commitments. The following table sets forth these contractual obligations by fiscal year:

	2015		2016		2017		2018		2019		Thereafter		Total
Borrowings (1)	$	—	$	—	$	—	$	—	$	—	$	40,000	$	40,000
Minimum rental and other contractual commitments (2)		15		446		458		471		483		497		2,370
	$	15	$	446	$	458	$	471	$	483	$	40,497	$	42,370

⁽¹⁾ This table excludes interest payments to be made on the Company’s long-term debt securities. Based on the weighted average interest rate of 3.01%, approximately $113 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $15,000 of trust preferred debt. Interest on the trust preferred debt is based on the 3-month LIBOR; therefore, actual coupon interest will likely differ from this estimate. The trust preferred debt will mature beginning in October 2033 through July 2035. As of December 31, 2014, approximately $414 in accrued interest on the current outstanding principal will be paid for the quarter ending March 31, 2015 on the $25,000 of Senior Notes. The Senior Notes have an annual interest rate of 6.625% and will mature on May 1, 2023.

⁽²⁾ Equipment and office rent expense for 2014, 2013 and 2012 was $249, $243 and $263, respectively.

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Derivative Financial Instruments and Hedging Activities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014		Dec. 31, 2013
Derivative [Line Items]
Derivative assets, Fair Value	$ 1,267		$ 8,424
Derivative liabilities, Fair Value	(124,308)		(33,129)
No Hedge Designation [Member] | Eurodollar Futures Asset [Member]
Derivative [Line Items]
Derivative asset, Notional Amount	2,445,000		8,758,000
Derivative assets, Fair Value	751		4,361
No Hedge Designation [Member] | Eurodollar Futures Liabilities [Member]
Derivative [Line Items]
Derivative liabilities, Notional Amount	38,645,000		6,787,000
Derivative liabilities, Fair Value	(76,848)		(30,638)
No Hedge Designation [Member] | Eurodollar Futures [Member]
Derivative [Line Items]
Notional Amount	41,090,000	[1]	15,545,000	[1]
Fair Value	(76,097)	[1]	(26,277)	[1]
No Hedge Designation [Member] | 10-Year Swap Futures Asset [Member]
Derivative [Line Items]
Derivative asset, Notional Amount	0		635,500
Derivative assets, Fair Value	0		3,727
No Hedge Designation [Member] | 10-Year Swap Futures Liablities [Member]
Derivative [Line Items]
Derivative liabilities, Notional Amount	1,145,000		31,000
Derivative liabilities, Fair Value	(47,460)		(18)
No Hedge Designation [Member] | 10-Year Swap Futures [Member]
Derivative [Line Items]
Notional Amount	1,145,000	[2]	666,500	[2]
Fair Value	(47,460)	[2]	3,709	[2]
No Hedge Designation [Member] | 5-year U.S. Treasury note futures [Member]
Derivative [Line Items]
Notional Amount	0		100,000
Fair Value	0		(1,500)
No Hedge Designation [Member] | Commitment to Purchase MBS [Member]
Derivative [Line Items]
Notional Amount	200,000	[3]	169,511	[3]
Fair Value	516	[3]	(973)	[3]
No Hedge Designation [Member] | Commitment to Sell MBS [Member]
Derivative [Line Items]
Notional Amount	0		125,000
Fair Value	$ 0		$ 336

[1] The $41,090,000 total notional amount of Eurodollar futures contracts as of December 31, 2014 represents the accumulation of Eurodollar futures contracts that mature on a quarterly basis between 2015 and 2019. As of December 31, 2014, the Company maintained $96,147 as a deposit and margin against the open Eurodollar futures contracts.

[2] The $1,145,000 represents the total notional amount of 10-year swap futures as of December 31, 2014, of which $780,000 of notional amount matures in March 2015 and $365,000 in notional amount matures in March 2024. As of December 31, 2014, the Company maintained $64,280 as a deposit and margin against the open 10-year swap futures contracts.

[3] The total notional amount of commitment to purchase MBS represents forward commitments to purchase fixed-rate MBS securities.

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Financial Instruments (Details 8) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost/Cost Basis	$ 219,940	[1]	$ 278,719	[2]
Unrealized Gains	47,537		62,628
Unrealized Losses	0		(1)
Fair Value	267,477		341,346
Agency Backed MBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost/Cost Basis	36	[1]	43	[2]
Unrealized Gains	4		4
Unrealized Losses	0		0
Fair Value	40		47
Private-label MBS Senior Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost/Cost Basis	0	[1]	5,412	[2]
Unrealized Gains	0		1,654
Unrealized Losses	0		0
Fair Value	0		7,066
Private-label MBS Re-REMIC Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost/Cost Basis	219,904	[1]	273,264	[2]
Unrealized Gains	47,533		60,970
Unrealized Losses	0		(1)
Fair Value	$ 267,437		$ 334,233

[1] The amortized cost of MBS includes unamortized net discounts of $133,333 at December 31, 2014.

[2] The amortized cost of MBS includes unamortized net discounts of $207,239 at December 31, 2013.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Unrealized gains (losses) for the period on available-for-sale securities, taxes	$ 432	$ 12,664	$ (1,215)
Included in investment gains (loss), net, in the statement of comprehensive income related to sales of available-for-sale securities, taxes	(5,293)	(4,162)	(4,488)
Included in investment gain (loss), net, in the statement of comprehensive income related to other-than-temporary impairment charges on available-for-sale securities, taxes	$ 170	$ 527	$ 6,110

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies:

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in the consolidated financial statements and notes for prior periods have been reclassified to conform to the current year’s presentation. These reclassifications had no impact on the previously reported net income, other comprehensive income, total assets or total liabilities.

Use of Estimates

The preparation of the Company’s financial statements, in conformity with accounting principles generally accepted in the United States of America (GAAP), requires the Company to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although the Company based the estimates and assumptions on historical experience, when available, market information, and on various other factors that the Company believes to be reasonable under the circumstances, management exercises significant judgment in the final determination of the estimates. Actual results may differ from these estimates.

Cash Equivalents

Cash equivalents include demand deposits with banks, money market accounts and highly liquid investments with original maturities of three months or less that are not held for sale in the ordinary course of business. As of December 31, 2014 and 2013, approximately 99% and 89%, respectively, of the Company’s cash equivalents were invested in money market funds that invest primarily in U.S. Treasuries and other securities backed by the U.S. government.

Financial Instruments

MBS transactions are recorded as purchases and sales on the date the securities are settled unless the transaction qualifies as a regular-way trade, in which case the transactions are accounted for as purchases or sales on a trade date basis. Any amounts payable or receivable for unsettled trades are recorded as “sold securities receivable” or “purchased securities payable” in the consolidated balance sheets.

Investments in MBS and marketable equity securities, if any, are classified as either available-for-sale or trading investments pursuant to accounting principles related to accounting for certain investments in debt and equity securities. These investments are carried at fair value with resulting unrealized gains and losses on available-for-sale securities reflected in accumulated other comprehensive income (loss) in the consolidated balance sheets and unrealized gains and losses on trading securities reflected in investment gain (loss), net, in the consolidated statements of comprehensive income. Investments in equity securities of non-public companies are carried at cost.

Although the Company generally intends to hold its MBS until maturity, it may, from time to time, sell any of its MBS as part of the overall management of its business. The available-for-sale designation provides the Company with the flexibility to sell its MBS in order to act on potential market opportunities or changes in economic conditions to ensure future liquidity and to meet other general corporate purposes as they arise.

Impairments

The Company evaluates available-for-sale securities for other-than-temporary impairment (OTTI) charges at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. In general, when the fair value of an available-for-sale security is less than its amortized cost at the reporting date, the security is considered impaired. In evaluating these available-for-sale securities for OTTI charges, consideration is given to (1) the length of time and the extent to which the fair value has been lower than carrying value, (2) the severity of the decline in fair value, (3) the financial condition and near-term prospects of the issuer, (4) the Company’s intent to sell, and (5) whether it is more-likely-than-not the Company would be required to sell the security before anticipated recovery.

If the Company intends to sell an impaired security, or it is more-likely-than-not that it will be required to sell the impaired security before its anticipated recovery, then the Company must recognize OTTI charges through earnings equal to the entire difference between the investment security’s amortized cost and its fair value at the reporting date. If the Company does not expect to sell an other-than-temporarily impaired security, only the portion of the OTTI related to credit losses is recognized through charges to earnings with the remainder recognized through other accumulated comprehensive income/(loss) on the consolidated balance sheet. Impairments recognized through other comprehensive income/(loss) do not impact earnings. Following the recognition of an OTTI through earnings, a new cost basis is established for the investment security and may not be adjusted for subsequent recoveries in fair value through earnings. However, OTTI recognized through charges to earnings may be accreted back to the amortized cost basis of the investment security on a prospective basis through interest income. The determination as to whether an OTTI exists and, if so, the amount of credit impairment recognized in earnings is subjective, as such determination is based on factual information available at the time of assessment as well as the Company’s estimates of the future performance and cash flow projections. As a result, the timing and amount of OTTIs constitute material estimates that are susceptible to significant change.

For available-for-sale, agency-backed MBS, if it is determined that the impairment is other-than- temporary, then the amount that the fair value is below its amortized cost basis is recorded as an impairment charge and recorded through the Company’s earnings. For unrealized losses that are determined to be temporary, a further evaluation is performed to determine the credit portion of the OTTI and the credit portion is recorded through the Company’s statement of comprehensive income.

For available-for-sale, private-label MBS securities that have been acquired at discounts to face value due in part to credit deterioration since origination, the Company re-evaluates the undiscounted expected future cash flows and the changes in cash flows from those originally projected at the time of purchase or when last revised. The discount rate used to calculate the present value of expected future cash flows is the current yield used for income recognition purposes as compared to the discount rate used to calculate the fair value of the investment security is the current expected market rate. For those securities in an unrealized loss position, the difference between the carrying value and the net present value of expected future cash flows is recorded as OTTI charges through the Company’s statement of comprehensive income.

Fair Value of Financial Instruments

The accounting principles related to fair value measurements define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3) as described below:

Level 1 Inputs —  Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company;

Level 2 Inputs —  Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

Level 3 Inputs —  Unobservable inputs for the asset or liability, including significant assumptions of the Company and other market participants.

The Company determines fair values for the following assets and liabilities:

Mortgage-backed securities (MBS), at fair value — 

Agency-backed MBS — The Company’s mortgage-backed securities (MBS), the principal and interest payments on which are guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, agency-backed MBS), are generally classified within Level 2 of the fair value hierarchy as they are valued after considering quoted market prices provided by a broker or dealer, or alternative pricing sources with reasonable levels of price transparency. The Company reviews broker or pricing service quotes to determine whether the quotes are relevant, for example, whether an active market exists to provide price transparency or whether the quote is an indicative price or a binding offer. The independent brokers and dealers providing market prices are those who make markets in or specialists with expertise in the valuation of these financial instruments.

Private-label MBS — The Company classifies non-agency-backed, or private-label, MBS within Level 3 of the fair value hierarchy because they trade infrequently and, therefore, have little or no price transparency. The Company utilizes present value techniques based on estimated cash flows of the instrument taking into consideration various assumptions derived by management and other assumptions used by other market participants. These assumptions are corroborated by evidence such as historical data, risk characteristics, transactions in similar instruments, and completed or pending transactions, when available. The significant inputs in the Company’s valuation process include default rate, loss severity, prepayment rate and discount rate. In general, significant increases (decreases) in default rate, loss severity or discount rate, in isolation, would result in a significantly lower (higher) fair value measurement. However, significant increases (decreases) in prepayment rate may result in a significantly higher (lower) fair value measurement. It is difficult to generalize the interrelationships between these significant inputs as the actual results could differ considerably on an individual security basis. For example, an increase in the default rate may not increase the loss severity rate if actual losses are lower than the average. Also, changes in discount rates may be greatly influenced by market expectation at any given point based upon many variables not directly related to the MBS market. Therefore, each significant input is closely analyzed to ascertain the reasonableness for the Company’s valuation purposes.

Establishing fair value is inherently subjective given the volatile and sometimes illiquid markets for these private-label MBS and requires management to make a number of assumptions, including assumptions about the future of interest rates, prepayment rates, discount rates, credit loss rates, and the timing of cash flows and credit losses. The assumptions the Company applies are specific to each security. Although the Company relies on its internal calculations to compute the fair value of these private-label MBS, the Company requests and considers indications of value, or the mark, from third-party dealers and the actual sales of private-label MBS to assist in the valuation process and calibrate the Company’s model.

Other investments  — The Company’s other investments, which are classified within Level 3 of the fair value hierarchy, consist of investments in equity securities, investment funds and other MBS-related securities, such as interest-only MBS.

Derivative instruments  — In the normal course of the Company’s operations, the Company is a party to various financial instruments that are accounted for as derivatives in accordance with ASC 815, Derivatives and Hedging (ASC 815). The derivative instruments that trade in active markets or exchanges are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Other derivative instruments are generally classified within Level 2 of the fair value hierarchy because they are valued using broker or dealer quotations, which are model-based calculations based on market-based inputs, including, but not limited to, contractual terms, market prices, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs.

Other  — Cash and cash equivalents, interest receivable, deposits, other receivable, interest payable, accounts payable, accrued expenses and other liabilities are reflected in the consolidated balance sheets at their amortized cost (which approximates fair value because of the short term nature of these instruments) and classified within Level 1 of the fair value hierarchy, except for certain cash equivalents that are held in money market funds that are classified within Level 2 of the fair value hierarchy.

Sold securities receivable, repurchase agreements and purchased securities payable are reflected in the consolidated balance sheets at the cost basis, which approximates fair value because of the short term nature of these instruments, and classified within Level 2 of the fair value hierarchy.

Long-term debt represents remaining balances of trust preferred debt and senior debt issued by the Company. Trust preferred debt is classified within Level 3 of the fair value hierarchy as the fair value is determined after considering quoted market prices provided by a broker or dealer. The independent brokers or dealers providing market prices are those who make markets in or specialists with expertise in the valuation of these financial instruments. The Company’s senior debt, which is publicly traded on the New York Stock Exchange, is classified within Level 1 of the fair value hierarchy.

The estimated fair values of the Company’s financial instruments are as follows:

	December 31, 2014				December 31, 2013
			Estimated Fair				Estimated
	Carrying Amount		Value		Carrying Amount		Fair Value
Financial assets
Cash and cash equivalents	$	33,832	$	33,832	$	48,628	$	48,628
Interest receivable		10,701		10,701		5,173		5,173
Other receivables		1,138		1,138		212		212
MBS
Agency-backed MBS		3,414,340		3,414,340		1,576,499		1,576,499
Private-label MBS
Senior securities		—		—		7,066		7,066
Re-REMIC securities		267,437		267,437		334,233		334,233
Derivative assets		1,267		1,267		8,424		8,424
Other investments		1,837		1,837		2,065		2,065
Deposits		160,427		160,427		45,504		45,504
Financial liabilities
Repurchase agreements		3,179,775		3,179,775		1,547,630		1,547,630
Interest payable		1,106		1,106		774		774
Long-term debt		40,000		39,200		40,000		36,620
Derivative liabilities		124,308		124,308		33,129		33,129
Accounts payable, accrued expenses and other liabilities		1,006		1,006		1,391		1,391

Repurchase Agreements

Securities sold under agreements to repurchase, which are treated as financing transactions for financial reporting purposes, are collateralized by MBS and are carried at their contractual amounts, including accrued interest, as specified in the respective agreements. Under the repurchase agreements, the Company pledges its securities as collateral to secure the borrowing, which is equal in value to a specified percentage of the fair value of the pledged collateral, while the Company retains beneficial ownership of the pledged collateral. At the maturity of a repurchase financing, the Company is required to repay the borrowing and receives back its pledged collateral from the counterparty. The counterparty to the repurchase agreements may require that the Company pledge additional securities or cash as additional collateral to secure borrowings when the value of the collateral declines.

Interest Income and Purchase Premiums and Discounts on MBS Securities

Interest income includes contractual coupon payments and the amortization of purchase premiums and accretion of discounts, if any, on the available-for-sale MBS portfolio. Interest income also includes contractual coupon payments on the trading MBS portfolio. Purchase premiums or discounts, if any, on the trading MBS portfolio are accounted for under mark-to-market accounting and the changes in value are recorded in investment gain (loss), net, on the statement of comprehensive income.

Interest income on the private-label MBS that were purchased at a discount to face value is recognized based on the security’s expected effective interest rate. At acquisition, the accretable yield is calculated as the difference between the undiscounted expected cash flows and the purchase price which is expected to be accreted into interest income over the remaining life of the security on a level-yield basis. The difference between the contractually required payments and the undiscounted expected cash flows represents the non-accretable difference. Based on actual payment activities and changes in estimates of undiscounted expected future cash flows, the accretable yield and the non-accretable difference can change over time. Significant increases in the amount or timing of undiscounted expected future cash flows are recognized prospectively as an adjustment to the accretable yield. As a result, the Company may recognize higher non-cash interest income over the security’s holding period and may not realize the level of interest income recognized using the higher accretion rates. In addition, the Company may be subject to more frequent and higher non-cash OTTI charges than actual losses realized on the security as a result.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with accounting principles related to share-based payment which requires fair value method of accounting. Under the fair value based method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. Expected forfeitures are included in determining share-based employee compensation cost. Share-based awards that do not require future services are expensed immediately.

Depending on the Company’s stock price at the time restricted stock units vest, the actual tax deduction benefit may be more or less than the carrying amount of the previously recorded deferred tax asset. An increase to the tax benefit (windfall) is generated when the tax deduction exceeds the recorded deferred tax asset. This incremental excess tax benefits are recorded as an increase to additional paid-in capital. Conversely, a decrease in tax benefit (shortfall) is generated when the tax deduction is below the recorded deferred tax asset. These incremental expense results in additional income tax expense, unless it can be offset by accumulated windfall tax benefit recorded in additional paid-in capital. The gross windfall tax benefit is presented in the consolidated statements of cash flows as financing cash inflows.

Performance-Based Long-Term Incentive Program

On August 13, 2012, the Compensation Committee of the Board of Directors of the Company (the Compensation Committee) adopted a performance-based long-term incentive program (Performance-based Program) that provides for the issuance of two types of performance share units (PSUs).

The Compensation Committee established performance goals under the Performance-based Program. Two types of PSUs may be awarded under the Performance-based Program: Book Value PSUs and Total Shareholder Return Units (TSR PSUs). The Book Value PSUs are eligible to vest based on the compound annualized growth in the Company’s book value per share (i.e., book value change with such adjustments as determined and approved by the Compensation Committee plus dividends on a reinvested basis) during the applicable performance period. The TSR PSUs are eligible to vest based on the Company’s compound annualized total shareholder return (i.e., share price change plus dividends on a reinvested basis) during the applicable performance period.

The Company accounts for the Performance-based Program in accordance with ASC 718. Therefore, the Book Value PSUs are valued at the grant date market value and the estimated compensation cost is recorded over the vesting period. The Company estimates the number of shares to be issued under the Book Value PSUs on a quarterly basis based on the actual and projected results for the remaining vesting period and any adjustments required are recognized retrospectively and over the remaining vesting period.

The TSR PSUs are also valued at the time of grant based on valuation model and the estimated compensation cost is recorded over the vesting period using straight-line basis. The valuation of the TSR PSUs is performed using Monte-Carlo simulation model (Model) using various assumptions including beginning average price, expected volatility, dividend equivalents, dividend yield, and risk-free rate of return. The Model projects stock prices on a daily basis assuming 250 trading days per year. The Model generates many future stock price paths to construct a distribution of where future stock prices might be. No remeasurement of compensation expense is required for the TSR PSUs.

The compensation costs are reversed if an employee is terminated prior to completing the required service period. The estimated shares to be granted under the Performance-based Program are included in the calculation of diluted Earnings Per Share.

Income Taxes

Income taxes are provided for using the asset and liability method. Deferred tax assets and liabilities represent the differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates. The measurement of net deferred tax assets is adjusted by a valuation allowance if, based on the Company’s evaluation, it is more-likely-than-not that they will not be realized. The Company recognizes tax positions in the financial statements only when it is more-likely-than-not that the position will be sustained upon examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more-likely-than-not be realized upon settlement. A liability is established for differences between positions taken in a tax return and the financial statements.

The Company is subject to federal alternative minimum tax (AMT) and state and local taxes on its taxable income and gains that are not offset by the net operating loss (NOL) and net capital loss (NCL) carry-forwards.

Other Comprehensive Income

Comprehensive income includes net income as currently reported by the Company on the consolidated statements of comprehensive income adjusted for other comprehensive income. Other comprehensive income for the Company represents changes in unrealized gains and losses related to the Company’s MBS and other mortgage related assets accounted for as available-for-sale with changes in fair value recorded through shareholders’ equity.

Earnings Per Share

Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted-average number of common shares outstanding for the respective period. Diluted earnings per share includes the impact of dilutive securities such as stock options, unvested shares of restricted stock and performance share units. The following table presents the computations of basic and diluted earnings per share for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
	2014				2013				2012
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Weighted average shares outstanding Common stock (in thousands)		20,043		20,043		15,990		15,990		10,205		10,205
Stock options, performance share units, and unvested restricted stock (in thousands)		—		354		—		199		—		37
Weighted average common and common equivalent shares outstanding (in thousands)		20,043		20,397		15,990		16,189		10,205		10,242
Net income applicable to common stock	$	5,954	$	5,954	$	49,461	$	49,461	$	183,942	$	183,942
Net income per common share	$	0.30	$	0.29	$	3.09	$	3.06	$	18.02	$	17.96

There were no outstanding options to purchase shares of common stock at December 31, 2014, 2013 and 2012. The diluted earnings per share for the years ended December 31, 2014, 2013 and 2012 did not include the antidilutive effect of 42,570, 26,218 and 27,808 shares, respectively, of awarded restricted stock units, stock options, and restricted stock.

Recent Accounting Pronouncements

On April 10, 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. This standard was effective for the Company on January 1, 2015. The Company does not expect significant impact to the financial statements upon implementation of ASU No. 2014-08.

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard will be effective for the Company on January 1, 2017. Early application is not permitted. The Company is currently evaluating the impact of ASU No. 2014-09.

On August 27, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is intended to define management’s responsibility to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern and to provide related footnote disclosures. This standard will be effective for the Company for the year ending on December 31, 2016. Early application is permitted. The Company is currently evaluating the impact of ASU No. 2014-15.

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Shareholders' Equity (Details 2) (Performance Shares [Member])	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date	Jul. 01, 2014	Jul. 01, 2013	Aug. 13, 2012
Book Value PSUs [Member]
Shares granted
Shares granted (in shares)	35,126	34,221	30,177
TSR PSUs [Member]
Shares granted
Shares granted (in shares)	35,593	34,567	41,735

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Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Equity Offerings [Table Text Block]

During the years ended December 31, 2014 and 2013, the Company completed public offerings as follows:

Closing date of the offering		March 13, 2013		March 28, 2014		September 8, 2014
Shares sold to public		3,000,000		2,750,000		2,750,000
Shares sold pursuant to the underwriter over-allotment		450,000		312,500		412,500
Total shares of Class A common stock		3,450,000		3,062,500		3,162,500
Public offering price per share	$	25.50	$	27.40	$	27.61
Net proceeds (1)	$	86,964	$	81,669	$	85,214

⁽¹⁾ Net of underwriting discounts and commissions and expenses.

Schedule of Dividends Payable [Table Text Block]

The Board of Directors has approved and the Company has declared the following dividends to date in 2014:

Quarter Ended	Dividend Amount		Declaration Date	Record Date	Pay Date
December 31	$	0.875	December 18	December 31	January 30, 2015
September 30		0.875	September 17	September 29	October 31
June 30		0.875	June 11	June 30	July 31
March 31		0.875	March 13	March 31	April 30

The Board of Directors has approved and the Company declared and paid the following dividends for 2013:

Quarter Ended	Dividend Amount		Declaration Date	Record Date	Pay Date
December 31	$	0.875	December 19	December 31	January 31, 2014
September 30		0.875	September 18	September 30	October 31
June 30		0.875	June 17	June 28	July 31
March 31		0.875	March 15	March 28	April 30

Share Based Compensation Performance Shares Grants Activity [Table Text Block]

The Compensation Committee of the Board of Directors of the Company approved the following grants to the participants in the Performance-based Program:

	Year Ended December 31,
	2012	2013	2014
Grant date	August 13, 2012	July 1, 2013	July 1, 2014
Shares granted
Book Value PSUs	30,177	34,221	35,126
TSR PSUs	41,735	34,567	35,593

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

The Company grants restricted common shares to employees that vest ratably over a three year period or cliff-vest after two to four years for various purposes based on continued employment over these specified periods. As of December 31, 2014 and 2013, a total of 117,112 and 57,673 shares, respectively, of such restricted Class A common stock were outstanding with unamortized deferred compensation of $2,181 and $838, respectively. A summary of these unvested restricted stock awards is presented below:

		Weighted-average		Weighted-
		Grant-date Fair		average Remaining
	Number of Shares	Value		Vested Period
Share Balance as of December 31, 2011	15,206	$	35.40		2.0
Granted	25,500		22.99		—
Forfeitures	—		—		—
Vestitures	(5,871)		47.60		—
Share Balance as of December 31, 2012	34,835		24.24		2.2
Granted	36,000		26.74		—
Forfeitures	—		—		—
Vestitures	(13,162)		24.65		—
Share Balance as of December 31, 2013	57,673		25.71		2.0
Granted	84,602		26.84		—
Forfeitures	—		—		—
Vestitures	(25,163)		25.64		—
Share Balance as of December 31, 2014	117,112		26.54		1.9

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Financial Instruments (Details 5) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value	$ 3,681,777	[1],[2]	$ 1,917,798	[1],[2]
Net Unamortized Premium (Discount)	(133,333)		(207,239)
Percentage of Total Fair Value	100.00%		100.00%
Trading, Fannie Mae [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value	2,064,465	[1],[2]	997,488	[1],[2]
Net Unamortized Premium (Discount)	0		0
Percentage of Total Fair Value	56.07%		52.01%
Weighted Average Life	8 years 1 month 6 days		9 years 4 months 24 days
Weighted Average Rating	AAA	[3]	AAA	[3]
Trading, Freddie Mac [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value	1,349,835	[1],[2]	578,964	[1],[2]
Net Unamortized Premium (Discount)	0		0
Percentage of Total Fair Value	36.66%		30.19%
Weighted Average Life	8 years 2 months 12 days		9 years 7 months 6 days
Weighted Average Rating	AAA	[3]	AAA	[3]
Available-for-sale, Agency-backed, Fannie Mae [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value	40	[1],[2]	47	[1],[2]
Net Unamortized Premium (Discount)	0		0
Percentage of Total Fair Value	0.00%		0.00%
Weighted Average Life	4 years 10 months 24 days		5 years 9 months 18 days
Weighted Average Rating	AAA	[3]	AAA	[3]
Private-label, Senior Securities [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value	0	[1],[2]	7,066	[1],[2]
Net Unamortized Premium (Discount)	0		(4,789)
Percentage of Total Fair Value	0.00%		0.37%
Weighted Average Life	0 years		4 years 9 months 18 days
Weighted Average Rating	—	[3]	C-	[3]
Private-label, Re-REMIC Securities [Member]
Fair Value Inputs Assets Quantitative Information [Line Items]
Fair Value	267,437	[1],[2]	334,233	[1],[2]
Net Unamortized Premium (Discount)	$ (133,333)		$ (202,450)
Percentage of Total Fair Value	7.27%		17.43%
Weighted Average Life	10 years 4 months 24 days		11 years 4 months 24 days
Weighted Average Rating	NR	[3]	NR	[3]

[1] The Company’s MBS portfolio was primarily comprised of fixed-rate MBS at December 31, 2014 and 2013. The weighted-average coupon of the MBS portfolio at December 31, 2014 and 2013 was 3.93% and 3.90%, respectively.

[2] As of December 31, 2014 and 2013, the Company’s MBS investments with a fair value of $3,376,025 and $1,673,911, respectively, were pledged as collateral for repurchase agreements.

[3] The securities issued by Fannie Mae and Freddie Mac are not rated by any rating agency; however, they are commonly thought of as having an implied rating of “AAA.” There is no assurance, particularly given the downgrade of the U.S. credit rating to “AA+” by Standard & Poor’s during the quarter ended September 30, 2011 and Fitch Ratings Inc.’s announcement on October 15, 2013 that it had placed the U.S. credit rating on negative watch, that these securities would receive such a rating if they were ever rated by a rating agency. The weighted-average rating of the Company’s private-label senior securities is calculated based on face value of the securities.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in the consolidated financial statements and notes for prior periods have been reclassified to conform to the current year’s presentation. These reclassifications had no impact on the previously reported net income, other comprehensive income, total assets or total liabilities.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of the Company’s financial statements, in conformity with accounting principles generally accepted in the United States of America (GAAP), requires the Company to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although the Company based the estimates and assumptions on historical experience, when available, market information, and on various other factors that the Company believes to be reasonable under the circumstances, management exercises significant judgment in the final determination of the estimates. Actual results may differ from these estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents

Cash equivalents include demand deposits with banks, money market accounts and highly liquid investments with original maturities of three months or less that are not held for sale in the ordinary course of business. As of December 31, 2014 and 2013, approximately 99% and 89%, respectively, of the Company’s cash equivalents were invested in money market funds that invest primarily in U.S. Treasuries and other securities backed by the U.S. government.

Marketable Securities, Policy [Policy Text Block]

Financial Instruments

MBS transactions are recorded as purchases and sales on the date the securities are settled unless the transaction qualifies as a regular-way trade, in which case the transactions are accounted for as purchases or sales on a trade date basis. Any amounts payable or receivable for unsettled trades are recorded as “sold securities receivable” or “purchased securities payable” in the consolidated balance sheets.

Investments in MBS and marketable equity securities, if any, are classified as either available-for-sale or trading investments pursuant to accounting principles related to accounting for certain investments in debt and equity securities. These investments are carried at fair value with resulting unrealized gains and losses on available-for-sale securities reflected in accumulated other comprehensive income (loss) in the consolidated balance sheets and unrealized gains and losses on trading securities reflected in investment gain (loss), net, in the consolidated statements of comprehensive income. Investments in equity securities of non-public companies are carried at cost.

Although the Company generally intends to hold its MBS until maturity, it may, from time to time, sell any of its MBS as part of the overall management of its business. The available-for-sale designation provides the Company with the flexibility to sell its MBS in order to act on potential market opportunities or changes in economic conditions to ensure future liquidity and to meet other general corporate purposes as they arise.

Impairments [Policy Text Block]

Impairments

The Company evaluates available-for-sale securities for other-than-temporary impairment (OTTI) charges at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. In general, when the fair value of an available-for-sale security is less than its amortized cost at the reporting date, the security is considered impaired. In evaluating these available-for-sale securities for OTTI charges, consideration is given to (1) the length of time and the extent to which the fair value has been lower than carrying value, (2) the severity of the decline in fair value, (3) the financial condition and near-term prospects of the issuer, (4) the Company’s intent to sell, and (5) whether it is more-likely-than-not the Company would be required to sell the security before anticipated recovery.

If the Company intends to sell an impaired security, or it is more-likely-than-not that it will be required to sell the impaired security before its anticipated recovery, then the Company must recognize OTTI charges through earnings equal to the entire difference between the investment security’s amortized cost and its fair value at the reporting date. If the Company does not expect to sell an other-than-temporarily impaired security, only the portion of the OTTI related to credit losses is recognized through charges to earnings with the remainder recognized through other accumulated comprehensive income/(loss) on the consolidated balance sheet. Impairments recognized through other comprehensive income/(loss) do not impact earnings. Following the recognition of an OTTI through earnings, a new cost basis is established for the investment security and may not be adjusted for subsequent recoveries in fair value through earnings. However, OTTI recognized through charges to earnings may be accreted back to the amortized cost basis of the investment security on a prospective basis through interest income. The determination as to whether an OTTI exists and, if so, the amount of credit impairment recognized in earnings is subjective, as such determination is based on factual information available at the time of assessment as well as the Company’s estimates of the future performance and cash flow projections. As a result, the timing and amount of OTTIs constitute material estimates that are susceptible to significant change.

For available-for-sale, agency-backed MBS, if it is determined that the impairment is other-than- temporary, then the amount that the fair value is below its amortized cost basis is recorded as an impairment charge and recorded through the Company’s earnings. For unrealized losses that are determined to be temporary, a further evaluation is performed to determine the credit portion of the OTTI and the credit portion is recorded through the Company’s statement of comprehensive income.

For available-for-sale, private-label MBS securities that have been acquired at discounts to face value due in part to credit deterioration since origination, the Company re-evaluates the undiscounted expected future cash flows and the changes in cash flows from those originally projected at the time of purchase or when last revised. The discount rate used to calculate the present value of expected future cash flows is the current yield used for income recognition purposes as compared to the discount rate used to calculate the fair value of the investment security is the current expected market rate. For those securities in an unrealized loss position, the difference between the carrying value and the net present value of expected future cash flows is recorded as OTTI charges through the Company’s statement of comprehensive income.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

The accounting principles related to fair value measurements define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3) as described below:

Level 1 Inputs —  Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company;

Level 2 Inputs —  Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

Level 3 Inputs —  Unobservable inputs for the asset or liability, including significant assumptions of the Company and other market participants.

The Company determines fair values for the following assets and liabilities:

Mortgage-backed securities (MBS), at fair value — 

Agency-backed MBS — The Company’s mortgage-backed securities (MBS), the principal and interest payments on which are guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, agency-backed MBS), are generally classified within Level 2 of the fair value hierarchy as they are valued after considering quoted market prices provided by a broker or dealer, or alternative pricing sources with reasonable levels of price transparency. The Company reviews broker or pricing service quotes to determine whether the quotes are relevant, for example, whether an active market exists to provide price transparency or whether the quote is an indicative price or a binding offer. The independent brokers and dealers providing market prices are those who make markets in or specialists with expertise in the valuation of these financial instruments.

Private-label MBS — The Company classifies non-agency-backed, or private-label, MBS within Level 3 of the fair value hierarchy because they trade infrequently and, therefore, have little or no price transparency. The Company utilizes present value techniques based on estimated cash flows of the instrument taking into consideration various assumptions derived by management and other assumptions used by other market participants. These assumptions are corroborated by evidence such as historical data, risk characteristics, transactions in similar instruments, and completed or pending transactions, when available. The significant inputs in the Company’s valuation process include default rate, loss severity, prepayment rate and discount rate. In general, significant increases (decreases) in default rate, loss severity or discount rate, in isolation, would result in a significantly lower (higher) fair value measurement. However, significant increases (decreases) in prepayment rate may result in a significantly higher (lower) fair value measurement. It is difficult to generalize the interrelationships between these significant inputs as the actual results could differ considerably on an individual security basis. For example, an increase in the default rate may not increase the loss severity rate if actual losses are lower than the average. Also, changes in discount rates may be greatly influenced by market expectation at any given point based upon many variables not directly related to the MBS market. Therefore, each significant input is closely analyzed to ascertain the reasonableness for the Company’s valuation purposes.

Establishing fair value is inherently subjective given the volatile and sometimes illiquid markets for these private-label MBS and requires management to make a number of assumptions, including assumptions about the future of interest rates, prepayment rates, discount rates, credit loss rates, and the timing of cash flows and credit losses. The assumptions the Company applies are specific to each security. Although the Company relies on its internal calculations to compute the fair value of these private-label MBS, the Company requests and considers indications of value, or the mark, from third-party dealers and the actual sales of private-label MBS to assist in the valuation process and calibrate the Company’s model.

Other investments  — The Company’s other investments, which are classified within Level 3 of the fair value hierarchy, consist of investments in equity securities, investment funds and other MBS-related securities, such as interest-only MBS.

Derivative instruments  — In the normal course of the Company’s operations, the Company is a party to various financial instruments that are accounted for as derivatives in accordance with ASC 815, Derivatives and Hedging (ASC 815). The derivative instruments that trade in active markets or exchanges are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Other derivative instruments are generally classified within Level 2 of the fair value hierarchy because they are valued using broker or dealer quotations, which are model-based calculations based on market-based inputs, including, but not limited to, contractual terms, market prices, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs.

Other  — Cash and cash equivalents, interest receivable, deposits, other receivable, interest payable, accounts payable, accrued expenses and other liabilities are reflected in the consolidated balance sheets at their amortized cost (which approximates fair value because of the short term nature of these instruments) and classified within Level 1 of the fair value hierarchy, except for certain cash equivalents that are held in money market funds that are classified within Level 2 of the fair value hierarchy.

Sold securities receivable, repurchase agreements and purchased securities payable are reflected in the consolidated balance sheets at the cost basis, which approximates fair value because of the short term nature of these instruments, and classified within Level 2 of the fair value hierarchy.

Long-term debt represents remaining balances of trust preferred debt and senior debt issued by the Company. Trust preferred debt is classified within Level 3 of the fair value hierarchy as the fair value is determined after considering quoted market prices provided by a broker or dealer. The independent brokers or dealers providing market prices are those who make markets in or specialists with expertise in the valuation of these financial instruments. The Company’s senior debt, which is publicly traded on the New York Stock Exchange, is classified within Level 1 of the fair value hierarchy.

The estimated fair values of the Company’s financial instruments are as follows:

	December 31, 2014				December 31, 2013
			Estimated Fair				Estimated
	Carrying Amount		Value		Carrying Amount		Fair Value
Financial assets
Cash and cash equivalents	$	33,832	$	33,832	$	48,628	$	48,628
Interest receivable		10,701		10,701		5,173		5,173
Other receivables		1,138		1,138		212		212
MBS
Agency-backed MBS		3,414,340		3,414,340		1,576,499		1,576,499
Private-label MBS
Senior securities		—		—		7,066		7,066
Re-REMIC securities		267,437		267,437		334,233		334,233
Derivative assets		1,267		1,267		8,424		8,424
Other investments		1,837		1,837		2,065		2,065
Deposits		160,427		160,427		45,504		45,504
Financial liabilities
Repurchase agreements		3,179,775		3,179,775		1,547,630		1,547,630
Interest payable		1,106		1,106		774		774
Long-term debt		40,000		39,200		40,000		36,620
Derivative liabilities		124,308		124,308		33,129		33,129
Accounts payable, accrued expenses and other liabilities		1,006		1,006		1,391		1,391

Repurchase Agreements, Collateral, Policy [Policy Text Block]

Repurchase Agreements

Securities sold under agreements to repurchase, which are treated as financing transactions for financial reporting purposes, are collateralized by MBS and are carried at their contractual amounts, including accrued interest, as specified in the respective agreements. Under the repurchase agreements, the Company pledges its securities as collateral to secure the borrowing, which is equal in value to a specified percentage of the fair value of the pledged collateral, while the Company retains beneficial ownership of the pledged collateral. At the maturity of a repurchase financing, the Company is required to repay the borrowing and receives back its pledged collateral from the counterparty. The counterparty to the repurchase agreements may require that the Company pledge additional securities or cash as additional collateral to secure borrowings when the value of the collateral declines.

Interest Income [Policy Text Block]

Interest Income and Purchase Premiums and Discounts on MBS Securities

Interest income includes contractual coupon payments and the amortization of purchase premiums and accretion of discounts, if any, on the available-for-sale MBS portfolio. Interest income also includes contractual coupon payments on the trading MBS portfolio. Purchase premiums or discounts, if any, on the trading MBS portfolio are accounted for under mark-to-market accounting and the changes in value are recorded in investment gain (loss), net, on the statement of comprehensive income.

Interest income on the private-label MBS that were purchased at a discount to face value is recognized based on the security’s expected effective interest rate. At acquisition, the accretable yield is calculated as the difference between the undiscounted expected cash flows and the purchase price which is expected to be accreted into interest income over the remaining life of the security on a level-yield basis. The difference between the contractually required payments and the undiscounted expected cash flows represents the non-accretable difference. Based on actual payment activities and changes in estimates of undiscounted expected future cash flows, the accretable yield and the non-accretable difference can change over time. Significant increases in the amount or timing of undiscounted expected future cash flows are recognized prospectively as an adjustment to the accretable yield. As a result, the Company may recognize higher non-cash interest income over the security’s holding period and may not realize the level of interest income recognized using the higher accretion rates. In addition, the Company may be subject to more frequent and higher non-cash OTTI charges than actual losses realized on the security as a result.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with accounting principles related to share-based payment which requires fair value method of accounting. Under the fair value based method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. Expected forfeitures are included in determining share-based employee compensation cost. Share-based awards that do not require future services are expensed immediately.

Depending on the Company’s stock price at the time restricted stock units vest, the actual tax deduction benefit may be more or less than the carrying amount of the previously recorded deferred tax asset. An increase to the tax benefit (windfall) is generated when the tax deduction exceeds the recorded deferred tax asset. This incremental excess tax benefits are recorded as an increase to additional paid-in capital. Conversely, a decrease in tax benefit (shortfall) is generated when the tax deduction is below the recorded deferred tax asset. These incremental expense results in additional income tax expense, unless it can be offset by accumulated windfall tax benefit recorded in additional paid-in capital. The gross windfall tax benefit is presented in the consolidated statements of cash flows as financing cash inflows.

Performance-Based Long-Term Incentive Program

On August 13, 2012, the Compensation Committee of the Board of Directors of the Company (the Compensation Committee) adopted a performance-based long-term incentive program (Performance-based Program) that provides for the issuance of two types of performance share units (PSUs).

The Compensation Committee established performance goals under the Performance-based Program. Two types of PSUs may be awarded under the Performance-based Program: Book Value PSUs and Total Shareholder Return Units (TSR PSUs). The Book Value PSUs are eligible to vest based on the compound annualized growth in the Company’s book value per share (i.e., book value change with such adjustments as determined and approved by the Compensation Committee plus dividends on a reinvested basis) during the applicable performance period. The TSR PSUs are eligible to vest based on the Company’s compound annualized total shareholder return (i.e., share price change plus dividends on a reinvested basis) during the applicable performance period.

The Company accounts for the Performance-based Program in accordance with ASC 718. Therefore, the Book Value PSUs are valued at the grant date market value and the estimated compensation cost is recorded over the vesting period. The Company estimates the number of shares to be issued under the Book Value PSUs on a quarterly basis based on the actual and projected results for the remaining vesting period and any adjustments required are recognized retrospectively and over the remaining vesting period.

The TSR PSUs are also valued at the time of grant based on valuation model and the estimated compensation cost is recorded over the vesting period using straight-line basis. The valuation of the TSR PSUs is performed using Monte-Carlo simulation model (Model) using various assumptions including beginning average price, expected volatility, dividend equivalents, dividend yield, and risk-free rate of return. The Model projects stock prices on a daily basis assuming 250 trading days per year. The Model generates many future stock price paths to construct a distribution of where future stock prices might be. No remeasurement of compensation expense is required for the TSR PSUs.

The compensation costs are reversed if an employee is terminated prior to completing the required service period. The estimated shares to be granted under the Performance-based Program are included in the calculation of diluted Earnings Per Share.

Income Tax, Policy [Policy Text Block]

Income Taxes

Income taxes are provided for using the asset and liability method. Deferred tax assets and liabilities represent the differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates. The measurement of net deferred tax assets is adjusted by a valuation allowance if, based on the Company’s evaluation, it is more-likely-than-not that they will not be realized. The Company recognizes tax positions in the financial statements only when it is more-likely-than-not that the position will be sustained upon examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more-likely-than-not be realized upon settlement. A liability is established for differences between positions taken in a tax return and the financial statements.

The Company is subject to federal alternative minimum tax (AMT) and state and local taxes on its taxable income and gains that are not offset by the net operating loss (NOL) and net capital loss (NCL) carry-forwards.

Comprehensive Income, Policy [Policy Text Block]

Other Comprehensive Income

Comprehensive income includes net income as currently reported by the Company on the consolidated statements of comprehensive income adjusted for other comprehensive income. Other comprehensive income for the Company represents changes in unrealized gains and losses related to the Company’s MBS and other mortgage related assets accounted for as available-for-sale with changes in fair value recorded through shareholders’ equity.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share

Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted-average number of common shares outstanding for the respective period. Diluted earnings per share includes the impact of dilutive securities such as stock options, unvested shares of restricted stock and performance share units. The following table presents the computations of basic and diluted earnings per share for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
	2014				2013				2012
	Basic		Diluted		Basic		Diluted		Basic		Diluted
Weighted average shares outstanding Common stock (in thousands)		20,043		20,043		15,990		15,990		10,205		10,205
Stock options, performance share units, and unvested restricted stock (in thousands)		—		354		—		199		—		37
Weighted average common and common equivalent shares outstanding (in thousands)		20,043		20,397		15,990		16,189		10,205		10,242
Net income applicable to common stock	$	5,954	$	5,954	$	49,461	$	49,461	$	183,942	$	183,942
Net income per common share	$	0.30	$	0.29	$	3.09	$	3.06	$	18.02	$	17.96

There were no outstanding options to purchase shares of common stock at December 31, 2014, 2013 and 2012. The diluted earnings per share for the years ended December 31, 2014, 2013 and 2012 did not include the antidilutive effect of 42,570, 26,218 and 27,808 shares, respectively, of awarded restricted stock units, stock options, and restricted stock.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

On April 10, 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. This standard was effective for the Company on January 1, 2015. The Company does not expect significant impact to the financial statements upon implementation of ASU No. 2014-08.

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard will be effective for the Company on January 1, 2017. Early application is not permitted. The Company is currently evaluating the impact of ASU No. 2014-09.

On August 27, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is intended to define management’s responsibility to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern and to provide related footnote disclosures. This standard will be effective for the Company for the year ending on December 31, 2016. Early application is permitted. The Company is currently evaluating the impact of ASU No. 2014-15.