THORNBURG MORTGAGE REPORTS $0.25 SECOND QUARTER E.P.S.; DECLARES $0.23 DIVIDEND
SANTA FE, N.M.--(BUSINESS WIRE)--July 18, 2000--
-- Q2 EPS of $0.25, equal to year-ago Q2
-- Q2 dividend maintained at $0.23 per share
-- Solid earnings despite rising interest rates during quarter
-- Asset quality remains excellent at 97% AA rated or better
Thornburg Mortgage, Inc. (NYSE: TMA) today reported net income of
$6,967,000 for the quarter ended June 30, 2000, or $0.25 per common
share. These results compare to net income of $7,034,000, or $0.25 per
common share for the quarter ended June 30, 1999 and $7,513,000, or
$0.27 per common share for the quarter ended March 31, 2000. The
company had 21,490,000 average common shares outstanding as of June
30, 2000 and June 30, 1999. Taxable income for the quarter also
totaled $0.25 per common share.
Simultaneous with the earnings announcement, the board of
directors declared a second quarter dividend of $0.23 per common
share, payable on August 17, 2000 to shareholders of record on August
4, 2000.
Larry A. Goldstone, president and chief operating officer of the
company, commented, "We produced solid earnings for the quarter,
despite the Federal Reserve's 75 basis point increase in short term
interest rates since late March. And, as our adjustable-rate mortgage
(ARM) assets continue to reset higher in response to higher short term
interest rates, we anticipate seeing improved interest income over the
coming quarters. Nevertheless, we decided not to increase the dividend
in the second quarter because of continuing uncertainty regarding
future Fed policy. We have seen the Federal Reserve raise the federal
funds rate six times in the last year, from 4.75% in June of 1999 to
6.50% in May of this year."
During the second quarter, the company's ARM portfolio yield
increased 0.23%, to an average of 6.73% from 6.50% in the first
quarter of 2000. The portfolio prepayment rate averaged 16% Constant
Prepayment Rate (CPR) for the second quarter, up slightly from 15% CPR
in the previous quarter, but down significantly from 26% CPR in the
second quarter of 1999. The company's cost of funds increased 0.30%
during the quarter, to an average of 6.50% from 6.20% in the previous
quarter, also in response to higher short term interest rates.
Despite the increase in funding costs, the company's portfolio
margin declined only slightly, to 0.81% in the second quarter from
0.83% in the first quarter. Net interest income declined slightly to
$8,752,000 in the second quarter from $9,317,000 in the first quarter
of 2000.
Total assets at June 30, 2000 decreased to $4.1 billion from $4.5
billion at March 31, 2000. During the second quarter, the company
elected to reduce its portfolio, rather than reinvesting its quarterly
cash flow. Additionally, the company re-securitized $94 million of its
less-than-AA-rated assets and sold $68 million of the newly created AA
and AAA rated securities into the market. This transaction helped the
company improve its liquidity, reduce its portfolio size, and improve
the quality of its overall portfolio. Asset quality improved, with 97%
of the company's assets rated AA, AAA or guaranteed by an agency of
the federal government. At the end of the second quarter, the
company's liquidation value was $10.37 per common share. Excluding
market value adjustments, book value was $15.33 per common share. |
