UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended September 30, 2004 |
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| 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: 1-13991
MFA MORTGAGE INVESTMENTS, INC.
(Exact name of
registrant as specified in its charter)
| Maryland | 13-3974868 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 350 Park Avenue, 21st Floor, New York, New York | 10022 |
| (Address of principal executive offices) | (Zip Code) |
(212)
207-6400
(Registrant’s telephone number, including area code)
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 þ
No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes þ
No o
80,636,239 shares of the registrant’s common stock, $0.01 par value (“Common Stock”), were outstanding as of October 29, 2004.
TABLE OF CONTENTS
TABLE OF CONTENTS
MFA
MORTGAGE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
| (In Thousands, Except Share and Per Share Amounts) | September
30, 2004 |
December
31, 2003 |
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| (Unaudited) | ||||||||
| Assets: | ||||||||
| Mortgage-backed securities (“MBS”) (Note 4) | $ | 6,103,930 | $ | 4,372,718 | ||||
| Cash and cash equivalents | 45,213 | 139,707 | ||||||
| Accrued interest receivable | 26,258 | 18,809 | ||||||
| Interest rate caps (“Caps” or “Cap Agreements”) (Note 5) | 1,391 | 276 | ||||||
| Equity interests in real estate investments (Note 6) | – | 2,802 | ||||||
| Real estate held for investment (Note 6) | 30,210 | 21,486 | ||||||
| Goodwill | 7,189 | 7,189 | ||||||
| Receivable under Discount Waiver, Direct Stock Purchase and | ||||||||
| Dividend Reinvestment Plan (“DRSPP”) (Note 9) | 3,393 | 705 | ||||||
| Prepaid and other assets | 1,491 | 1,238 | ||||||
| $ | 6,219,075 | $ | 4,564,930 | |||||
| Liabilities: | ||||||||
| Repurchase agreements (Note 7) | $ | 5,484,029 | $ | 4,024,376 | ||||
| Accrued interest payable | 19,742 | 7,239 | ||||||
| Mortgages payable on real estate | 22,734 | 16,161 | ||||||
| Interest rate swaps (“Swaps”) (Note 5) | 1,066 | – | ||||||
| Dividends payable | – | 15,923 | ||||||
| MBS purchase payable | – | 15,010 | ||||||
| Accrued expenses and other liabilities | 2,833 | 1,263 | ||||||
| 5,530,404 | 4,079,972 | |||||||
| Commitments and contingencies (Note 8) | – | – | ||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, $.01 par value; series A 8.50% cumulative redeemable; | ||||||||
| 5,000,000 shares authorized; 2,000,000 and 0 issued and outstanding at | ||||||||
| September 30, 2004 and December 31, 2003, respectively ($50,000 and | ||||||||
| $0 aggregate liquidation preference) (Note 9) | 20 | – | ||||||
| Common Stock, $.01 par value; 370,000,000 shares authorized; | ||||||||
| 79,788,932 and 63,201,224 issued and outstanding at | ||||||||
| September 30, 2004 and December 31, 2003, respectively | 798 | 632 | ||||||
| Additional paid-in capital | 717,039 | 512,199 | ||||||
| Accumulated earnings/(deficit) (Note 9) | 1,328 | (15,764 | ) | |||||
| Accumulated other comprehensive loss (Note 11) | (30,514 | ) | (12,109 | ) | ||||
| 688,671 | 484,958 | |||||||
| $ | 6,219,075 | $ | 4,564,930 | |||||
The accompanying notes are an integral part of the consolidated financial statements.
1
MFA MORTGAGE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF INCOME
| Three
Months Ended September 30, |
Nine
Months Ended September 30, |
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| 2004 | 2003 | 2004 | 2003 | |||||||||||
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| (In Thousands, Except Per Share Amounts) | (Unaudited) | |||||||||||||
| Interest Income: | ||||||||||||||
| MBS income | $ | 42,210 | $ | 26,290 | $ | 120,954 | $ | 88,997 | ||||||
| Interest income on temporary cash investments | 205 | 192 | 543 | 463 | ||||||||||
| Total Interest Income | 42,415 | 26,482 | 121,497 | 89,460 | ||||||||||
| Interest Expense | 21,959 | 13,386 | 57,052 | 43,053 | ||||||||||
| Net Interest Income | 20,456 | 13,096 | 64,445 | 46,407 | ||||||||||
| Other Income: | ||||||||||||||
| Loss from equity interests in real estate | – | (227 | ) | – | (369 | ) | ||||||||
| Revenue from operations of real estate | 1,031 | 723 | 3,068 | 1,944 | ||||||||||
| Gain (loss) on sale of securities | 371 | (599 | ) | 371 | (265 | ) | ||||||||
| Gain on sale of real estate and equity investments in | ||||||||||||||
| real estate, net | – | 1,080 | – | 1,701 | ||||||||||
| Miscellaneous other income | 7 | – | 181 | – | ||||||||||
| Total Other Income | 1,409 | 977 | 3,620 | 3,011 | ||||||||||
| Operating and Other Expense: | ||||||||||||||
| Compensation and benefits | 1,368 | 1,002 | 4,187 | 2,882 | ||||||||||
| Real estate operating expense | 739 | 466 | 2,156 | 1,298 | ||||||||||
| Mortgage interest on real estate | 426 | 301 | 1,273 | 801 | ||||||||||
| Other general and administrative expense | 684 | 541 | 2,196 | 1,923 | ||||||||||
| Total Operating and Other Expense | 3,217 | 2,310 | 9,812 | 6,904 | ||||||||||
| Net Income | $ | 18,648 | $ | 11,763 | $ | 58,253 | $ | 42,514 | ||||||
| Less: Preferred Stock Dividends | 1,062 | – | 1,818 | – | ||||||||||
| Net Income Available to Common Stockholders | $ | 17,586 | $ | 11,763 | $ | 56,435 | $ | 42,514 | ||||||
| Income Per Share Available to Common Stockholders: | ||||||||||||||
| Net income per share – basic | $ | 0.22 | $ | 0.21 | $ | 0.76 | $ | 0.82 | ||||||
| Weighted average shares outstanding – basic | 78,607 | 57,248 | 74,591 | 51,634 | ||||||||||
| Net income per share – diluted | $ | 0.22 | $ | 0.21 | $ | 0.76 | $ | 0.82 | ||||||
| Weighted average shares of Common Stock and common | ||||||||||||||
| stock equivalents outstanding – diluted | 78,653 | 57,337 | 74,640 | 51,696 | ||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
2
MFA
MORTGAGE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
|
Nine Months Ended September 30, 2004 |
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| |
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| (In Thousands, Except Per Share Amounts) | (Unaudited) | ||||
| 8.50%
Series A Cumulative Redeemable Preferred Stock (Par Value $.01 – Liquidation
Preference $25.00)(“Preferred Stock”) |
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| Balance at December 31, 2003 | $ | – | |||
| Issuance of shares | 20 | ||||
| Balance at September 30, 2004 | 20 | ||||
| Common Stock (Par Value $.01): | |||||
| Balance at December 31, 2003 | 632 | ||||
| Issuance of shares | 166 | ||||
| Balance at September 30, 2004 | 798 | ||||
| Additional Paid-in Capital: | |||||
| Balance at December 31, 2003 | 512,199 | ||||
| Issuance of Common Stock, net of expenses | 156,158 | ||||
| Issuance of Preferred Stock, net of expenses | 48,265 | ||||
| Exercise of Common Stock options | – | ||||
| Compensation expense for Common Stock options | 417 | ||||
| Balance at September 30, 2004 | 717,039 | ||||
| Accumulated Income/(Deficit): | |||||
| Balance at December 31, 2003 | (15,764 | ) | |||
| Net income | 58,253 | ||||
| Dividends declared on Common Stock | (39,343 | ) | |||
| Dividends declared on Preferred Stock | (1,818 | ) | |||
| Balance at September 30, 2004 | 1,328 | ||||
| Accumulated Other Comprehensive Loss: | |||||