UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported): February 4, 2015 (February 3, 2015)

 

ARLINGTON ASSET INVESTMENT CORP.

(Exact name of Registrant as specified in its charter)

 

 

Virginia   54-1873198   001-34374

(State or Other Jurisdiction

of Incorporation or Organization)

 

  (I.R.S. Employer Identification No.)   (Commission File Number)

 

1001 Nineteenth Street North

Arlington, VA 22209

(Address of principal executive offices) (Zip code)

 

(703) 373-0200

(Registrant’s telephone number including area code)

 

N/A

(Former name or former address, if changed from last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 2.02. Results of Operations and Financial Condition.

 

Arlington Asset Investment Corp. (the “Company”) issued a press release on February 3, 2015 announcing its financial results for the quarter and full year ended December 31, 2014. A copy of the press release is attached hereto as Exhibit 99.1.

 

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished pursuant to Item 9.01, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished pursuant to Item 9.01, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

On February 3, 2015, the Board of Directors (the “Board”) of Arlington Asset Investment Corp. (the “Company”) elected Anthony P. Nader to serve as a Director of the Company, whose term will begin March 1, 2015 and continue until the next annual meeting of the shareholders of the Company and until his successor is elected and qualified.   Mr. Nader, as a member of the Board, will be entitled to receive fees and restricted stock awards granted by the Company to its directors who are not employees of the Company beginning on a prorated basis on March 1, 2015. The Company previously disclosed the compensation of its directors in its 2014 Annual Meeting Proxy Statement.

 

Mr. Nader, age 51, is a Managing Director of SWaN & Legend Venture Partners, a principal investment firm that Mr. Nader co-founded in 2006, with investments in growth oriented companies as well as domestic and international real estate holdings. Mr. Nader also serves as Vice Chairman of Asurion, a privately held company with over 16,000 employees that provides technology protection to approximately 300 million customers worldwide. In 2008, Mr. Nader successfully merged his prior company, National Electronics Warranty (“NEW”) with Asurion. Mr. Nader joined NEW in 1990 as Chief Operating Officer, was named President in 1999 and Chief Executive Officer in 2006, a position he held until 2013. Under his leadership, NEW grew to be the largest global provider of extended service plans for the consumer electronics and appliance industry. Mr. Nader currently serves on the executive committee of the Inova Health System Board of Trustees. He is the past chairman of the Inova Health System Foundation Board. He also serves on the board of The Cranemere Group Limited, Optoro, Inc., La Lumiere, BigTeams and is an active advisor for KIND Healthy Snacks.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On February 3, 2015, the Board amended Section 2.2 of the Company’s Amended and Restated Bylaws (the “Bylaws”). The amendment fixed the number of directors of the Company at eight, effective as of March 1, 2015.  The Bylaws previously fixed the number of directors of the Company at seven.

 

The preceding summary is qualified in its entirety by reference to Amendment No. 1 to the Bylaws, which is attached hereto as Exhibit 3.1 and incorporated herein by reference.

 

Item 7.01. Regulation FD Disclosure

 

On February 3, 2015, the Company issued a press release announcing that Anthony P. Nader had been appointed to its Board of Directors to serve as a new independent director of the Company.  A copy of the press release is attached hereto as Exhibit 99.2.

 

The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 furnished pursuant to Item 9.01, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, the information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 furnished pursuant to Item 9.01, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended.

 

 
 

 

Forward-Looking Statements Disclaimer

 

This Current Report on Form 8-K contains “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including those relating to statements concerning future performance, the Company’s portfolio, funding capacity, liquidity, leverage portfolio allocation, portfolio hedging, migrating capital from the Company’s private-label mortgage-backed securities (“MBS”) portfolio to the agency-backed MBS portfolio, capital losses, market conditions, cash returns and earnings, dividends, book value, tax benefits, changes in the Company’s expense to capital ratio, and any other guidance on present or future periods constitute forward-looking statements that are subject to a number of factors, risks and uncertainties that might cause actual results to differ materially from stated expectations or current circumstances, forward settling transactions, forward yield, the effect of actions of the U.S. government, including the Federal Reserve, on our results, the impact of Mr. Nader on the Board and the Company’s execution of its strategy. Forward-looking statements typically are identified by use of the terms such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions. Forward-looking statements are based on the Company's beliefs, assumptions and expectations of the Company's future performance, taking into account all information currently available to the Company. The Company cannot assure you that actual results will not vary from the expectations contained in the forward-looking statements. All of the forward-looking statements are subject to numerous possible events, factors and conditions, many of which are beyond the control of the Company and not all of which are known to the Company, including, without limitation, market conditions and those described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and other documents which have been filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date on which they are made. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect us. Except as required by law, the Company is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits . The following exhibits are being filed herewith:

 

Exhibit No.

 

Description

3.1   Amendment No. 1 to the Amended and Restated Bylaws of the Company, as amended on February 3, 2015.
99.1   Press Release dated February 3, 2015 announcing the Company’s financial results for the quarter and full year ended December 31, 2014.
99.2   Press Release dated February 3, 2015 announcing the appointment of Anthony P. Nader to the Company’s Board of Directors.

 

 
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ARLINGTON ASSET INVESTMENT CORP.
   
   

Date: February 4, 2015

By:

/s/ Kurt R. Harrington
  Name:  Kurt R. Harrington
  Title: Executive Vice President, Chief Financial Officer and Treasurer

 

 
 

 

EXHIBIT INDEX

 

Exhibit No.

 

Description

3.1   Amendment No. 1 to the Amended and Restated Bylaws of the Company, as amended on February 3, 2015.
99.1   Press Release dated February 3, 2015 announcing the Company’s financial results for the quarter and full year ended December 31, 2014.
99.2   Press Release dated February 3, 2015 announcing the appointment of Anthony P. Nader to the Company’s Board of Directors.

 

 

 

Exhibit 3.1

 

Amendment No. 1

to the Amended and Restated Bylaws of

Arlington Asset Investment Corp.

 

Adopted on February 3, 2015

 

WHEREAS, Arlington Asset Investment Corp. (the “Corporation”) is governed, in part, by the Bylaws (the “Bylaws”); and

 

WHEREAS, pursuant to and in accordance with Section 7.5 of the Bylaws, the Board of Directors of the Corporation has authorized, approved and adopted this amendment to be effective as of March 1, 2015.

 

NOW, THEREFORE, BE IT RESOLVED THAT:

 

1. AMENDMENT

 

Section 2.2 of the Amended and Restated Bylaws of Arlington Asset Investment Corp. is hereby amended by deleting the following text:

 

“The number of directors of the Corporation shall be seven (7).”

 

and replacing it in its entirety with the following text:

 

“The number of directors of the Corporation shall be eight (8).”

 

2. NO FURTHER AMENDMENT

 

Except as herein amended, the provisions of the Bylaws shall remain in full force and effect.

 

 

 

Exhibit 99.1

 

 

Contacts :

Media: 703.373.0200 or ir@arlingtonasset.com  

Investors: Kurt Harrington at 703.373.0200 or ir@arlingtonasset.com

 

Arlington Asset Investment Corp. Reports Fourth Quarter and Full Year 2014 Financial Results

 

Non-GAAP core operating income of $1.40 per share (diluted) for the fourth quarter 2014 (1)

or $5.19 per share (diluted) for the year ended December 31, 2014

GAAP net loss of $32.8 million (includes $27.5 million of tax provision) for the fourth quarter 2014, or GAAP net income of $6.0 million (includes $49.4 million of tax provision) for the year ended December 31, 2014

Dividend of $0.875 per share for the fourth quarter 2014, paid on January 30, 2015

Annualized dividend yield of 13% (2) , 18% (3) on a tax adjusted basis

Book value per share at December 31, 2014 was $27.95

 

ARLINGTON, VA, February 3, 2015 – Arlington Asset Investment Corp. (NYSE: AI) (the “Company”) today reported non-GAAP core operating income of $32.6 million for the quarter ended December 31, 2014, or $1.40 per share (diluted). A reconciliation of non-GAAP core operating income to GAAP net income appears at the end of this press release. On a GAAP basis, the Company reported a net loss of $32.8 million for the quarter ended December 31, 2014, or $(1.43) per share (diluted), compared to net income of $12.8 million for the quarter ended September 30, 2014, or $0.61 per share (diluted), and net income of $40.0 million, or $2.36 per share (diluted), for the quarter ended December 31, 2013.

 

“2014 was a positive year for Arlington with increased core operating income per share year-over-year, expanded and diversified financing facilities, broadened access to capital, a 13% total economic return for the year and 29% for the last two years.   Continued favorable performance in the Company’s private-label mortgage-backed securities portfolio and expanded spread income contributed to fourth quarter results,” said J. Rock Tonkel, Jr., the Company's President and Chief Executive Officer.  “While recent market volatility and lower rates resulted in a non-cash tax allowance and mark-to-market charges during the quarter, the Company’s substantial liquidity and moderate leverage permit Arlington to maintain the flexible portfolio structure that has produced consistent results for an extended period, and benefit from the expanded spread opportunity and low hedge cost available under current market conditions.  As extension and prepay risks are renewed factors in the current low rate environment, the Company continues to benefit from prepayment protections on 100% of its agency mortgage-backed securities, a substantial hedge position, 39% of capital allocated to private-label mortgage-backed securities and approximately $288 million of ongoing tax benefits.”

 

As of February 3, 2015, the Company’s agency-backed mortgage-backed securities (“MBS”) portfolio had a net fair value of approximately $3.4 billion. On a mark-to-market basis, the estimated hedged cost of funds associated with the Euro Dollar futures is 1.50% on a weighted average basis over 5 years starting in March 2015, with an average balance over that period of $2.2 billion. The Company also has $0.8 billion in notional 10-year interest rate swap futures resulting in a combined hedged notional amount of approximately $3.0 billion. Since year-end, the Company sold private-label MBS for net proceeds of approximately $21 million.

 

Fourth Quarter Highlights

 

Net interest income for the fourth quarter was $32.9 million, including non-cash accretion on private-label MBS of $0.9 million required under GAAP. The three-month constant prepayment rate (“CPR”) for the Company’s agency-backed MBS as of December 31, 2014 was 6.33%. The Company’s debt to equity ratio at December 31, 2014 was approximately 5 to 1.

 

 
 

 

 

 

As of December 31, 2014, the Company’s agency-backed MBS portfolio consisted of $3.2 billion in face value with a cost basis and a fair value of $3.4 billion. As of December 31, 2014, all of the Company’s agency-backed MBS were fixed-rate 30-year MBS specifically selected for their prepayment protections with a weighted average coupon of 4.03%, a weighted average cost of 106.08, a weighted average market price of 107.24, and had a weighted average cost of repo funding of 38 basis points. On a mark-to-market basis, the Company had an average of $2.2 billion in Eurodollar futures associated with the agency-backed MBS portfolio starting in March 2015 and ending in September 2019 with a rate of 1.87% and an equivalent funding cost through December 2019 of approximately 1.77%. The Company also had $1.1 billion in notional 10-year interest rate swap futures with a marked rate of approximately 2.30% resulting in a combined hedged notional amount of approximately $3.3 billion.

 

As of December 31, 2014, the Company’s private-label MBS portfolio consisted of $353.2 million in face value with an amortized cost basis of $219.9 million and a fair value of $267.4 million. The following table presents certain statistics of the Company’s private-label MBS portfolio as of or for the quarter ended December 31, 2014 (dollars in millions):

 

    Total Private-
Label MBS 		 
       
Fair market value   $ 267.4  
Fair market value (as a % of face value)     75.7 %
Quarterly cash yield (as a % of average fair market value, excluding GAAP non-cash accretion)     5.9 %
         
Quarterly unlevered yield (GAAP, as a % of amortized cost)     9.0 %
Quarterly unlevered cash yield (as a % of average amortized cost excluding GAAP non-cash accretion)     7.4 %
Average cost (as a % of face value)     53.2 %
Weighted average coupon     3.0 %
         
Face value   $ 353.2  
Amortized cost   $ 219.9  
Purchase discount   $ 133.3  
         
60+ days delinquent     14.9 %
Credit enhancement     0.2 %
Severity (3-month)     40.9 %
Constant prepayment rate (3-month)     11.4 %

 

Dividend

 

The Company’s Board of Directors approved a $0.875 dividend for the fourth quarter of 2014. The dividend was paid on January 30, 2015 to shareholders of record as of December 31, 2014. This represented a 13% annualized dividend yield based on the Class A common stock closing price on the New York Stock Exchange (NYSE) of $26.96 on February 3, 2015.

 

 

 
 

 

 

 

(1) Non-GAAP Financial Measures

 

In addition to the financial results reported in accordance with generally accepted accounting principles as consistently applied in the United States (GAAP), the Company calculated non-GAAP core operating income for the three months ended December 31, 2014. In determining core operating income, the Company excluded certain legacy litigation expenses and the following non-cash expenses: (1) compensation costs associated with stock-based awards, (2) accretion of MBS purchase discounts adjusted for contractual interest and principal repayments in excess of proportionate invested capital, (3) other-than-temporary impairment charges recognized, (4) non-cash income tax provisions, and (5) benefit from the reversal of previously accrued federal and state tax liability and accrued interest related to uncertain tax positions. Additionally, starting in 2014, the Company has excluded both realized and unrealized gains and losses on the agency-backed MBS and all related hedge instruments, and has presented prior periods on a consistent basis. These adjustments are only for the purpose of calculating the Company’s non-GAAP core operating income; therefore, they do not change the Company’s GAAP book value or net (loss) income as reported.

 

The Company’s portfolio strategy on the Company’s agency-backed MBS portfolio is to generate a net interest margin on the leveraged assets and hedge the market value of the assets, expecting that the fluctuations in the market value of the agency-backed MBS and related hedges should largely offset each other over time. As a result, the Company excludes both the realized and unrealized fluctuations in the gains and losses in the assets and hedges on its hedged, agency-backed MBS portfolio when assessing the underlying core operating income of the Company. However, the Company’s portfolio strategy on the Company’s private-label MBS portfolio is to generate a total cash return comprised of both interest income and the cash return realized when the private-label MBS are sold that equals the difference between the sale price and the discount to par paid at acquisition. Therefore, the Company excludes non-cash accretion of private-label MBS purchase discounts from non-GAAP core operating income, but includes realized cash gains or losses on its private-label MBS portfolio in core operating income to reflect the total cash return on those securities over their holding period.

 

This non-GAAP core operating income measurement is used by management to analyze and assess the Company’s operating results on its portfolio and assist with the determination of the appropriate level of dividends. The Company believes that this non-GAAP measurement assists investors in understanding the impact of these non-core items and non-cash expenses on our performance and provides additional clarity around our earnings capacity and trends. A limitation of utilizing this non-GAAP measure is that the GAAP accounting effects of these events do in fact reflect the underlying financial results of our business and these effects should not be ignored in evaluating and analyzing our financial results. Therefore, the Company believes net income on a GAAP basis and core operating income on a non-GAAP basis should be considered together.

 

The following is a reconciliation of GAAP net income to non-GAAP core operating income for the three months ended December 31, 2014 and 2013 (dollars in thousands):

                   
    Three Months Ended December 31,  
    2014     2013
Revised 		    2013
As Previously Reported 		 
GAAP net (loss) income   $ (32,765 )   $ 39,997     $ 39,997  
Adjustments                        
Legacy litigation expenses (a)     —       510       510  
Non-cash income tax provisions     27,054       66,669       66,669  
Stock compensation     833       879       879  
Non-cash interest income related to purchase discount accretion (b)     (862 )     (1,651 )     (1,651 )
Net realized and unrealized loss on trading MBS and hedge instruments     38,022       15,960       13,591  
Release of valuation allowance on deferred tax assets     —       (91,189 )     (91,189 )
Benefit from the reversal of tax liability and accrued interest related to uncertain tax position     —       (12,467 )     (12,467 )
Other-than-temporary impairment charges     298       84       84  
Non-GAAP core operating income   $ 32,580     $ 18,792     $ 16,423  

 

 
 

 

 

 

(a) Legacy litigation expenses relate to legal matters pertaining to events related to business activities the Company completed or exited in or prior to 2009 — primarily debt extinguishment, sub-prime mortgage origination and securitization and broker/dealer operations.
(b) Non-cash interest income related to purchase discount accretion represents interest income recognized in excess of cash receipts related to contractual interest income and principal repayments in excess of proportionate invested capital.

 

(2) Based on the annualized fourth quarter 2014 dividend and the Class A common stock closing price on the NYSE of $26.96 on February 3, 2015.
(3) The Company's dividends are eligible for the 23.8% federal income tax rate on qualified dividend income, whereas dividends paid by a REIT are generally subject to the higher 43.4% tax rate on ordinary income.  To provide the same return after payment of federal income tax as the Company, a REIT would be required to pay dividends providing an 18% yield.

 

About the Company

 

Arlington Asset Investment Corp. (NYSE: AI) is a principal investment firm that currently invests primarily in mortgage-related and other assets. The Company is headquartered in the Washington, D.C. metropolitan area. For more information, please visit www.arlingtonasset.com .

 

Statements concerning future performance, the Company’s portfolio, funding capacity, liquidity, leverage portfolio allocation, portfolio hedging, migrating capital from the private-label MBS portfolio to the agency-backed MBS portfolio, capital losses, market conditions, cash returns and earnings, dividends, book value, tax benefits, changes in the Company’s expense to capital ratio, and any other guidance on present or future periods constitute forward-looking statements that are subject to a number of factors, risks and uncertainties that might cause actual results to differ materially from stated expectations or current circumstances. These factors include, but are not limited to, changes in interest rates, increased costs of borrowing, decreased interest spreads, changes in political and monetary policies, changes in default rates, changes in the CPR for the Company’s MBS, changes in the Company’s operating efficiency, changes in the Company’s returns, changes in the use of the Company’s tax benefits, maintenance of the Company’s low leverage posture, changes in the agency-backed MBS asset yield, changes in the Company’s monetization of net operating loss carry-forwards, changes in the Company’s ability to generate cash earnings and dividends, preservation and utilization of our net operating loss and net capital loss carry-forwards, impacts of changes to and changes by Fannie Mae and Freddie Mac, actions taken by the U.S. Federal Reserve and the U.S. Treasury, availability of opportunities that meet or exceed the Company’s risk adjusted return expectations, ability and willingness to make future dividends, ability to generate sufficient cash through retained earnings to satisfy capital needs, changes in and the effects on the Company of mortgage prepayment speeds, ability to realize book value growth through reflation of private-label MBS, and general economic, political, regulatory and market conditions. These and other material risks are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and any other documents filed by the Company with the SEC from time to time, which are available from the Company and from the SEC, and you should read and understand these risks when evaluating any forward-looking statement.

 

 
 

 

 

ARLINGTON ASSET INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

(Unaudited)

 

    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2014     2013     2014     2013  
INTEREST INCOME   $ 36,316     $ 22,551     $ 123,547     $ 87,019  
                                 
INTEREST EXPENSE                                
Interest on short-term debt     2,901       1,838       9,181       6,899  
Interest on long-term debt     553       553       2,210       1,630  
Total interest expense     3,454       2,391       11,391       8,529  
Net interest income     32,862       20,160       112,156       78,490  
                                 
OTHER LOSS, NET                                
Investment loss, net     (33,693 )     (11,863 )     (38,672 )     (47,745 )
Other loss     (4 )     (4 )     (15 )     (15 )
Total other loss, net     (33,697 )     (11,867 )     (38,687 )     (47,760 )
Operating (loss) income before other expenses     (835 )     8,293       73,469       30,730  
                                 
OTHER EXPENSES                                
Compensation and benefits     3,326       3,161       13,467       11,195  
Professional services     328       588       1,529       2,561  
Business development     121       38       253       145  
Occupancy and equipment     96       99       422       427  
Communications     55       49       201       191  
Other operating expenses     554       930       2,197       2,072  
Total other expenses     4,480       4,865       18,069       16,591  
                                 
(Loss) income before income taxes     (5,315 )     3,428       55,400       14,139  
                                 
Income tax provision (benefit)     27,450       (36,569 )     49,446       (35,322 )
                                 
Net (loss) income   $ (32,765 )   $ 39,997     $ 5,954     $ 49,461  
                                 
                                 
Basic (loss) earnings per share   $ (1.43 )   $ 2.40     $ 0.30     $ 3.09  
                                 
Diluted (loss) earnings per share   $ (1.43 )   $ 2.36     $ 0.29     $ 3.06  
                                 
Weighted average shares outstanding - basic (in thousands)     22,973       16,671       20,043       15,990  
Weighted average shares outstanding - diluted (in thousands)     23,316       16,949       20,397       16,189  

 

 
 

 

 

ARLINGTON ASSET INVESTMENT CORP.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

(Unaudited)

 

ASSETS   December 31, 2014     December 31, 2013  
             
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  
                 
Equity:                
Common stock     230       166  
Additional paid-in capital     1,897,027       1,727,398  
Accumulated other comprehensive income, net of taxes     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  
                 
 Book Value per Share   $ 27.95     $ 33.10  
                 
 Shares Outstanding (in thousands)     22,973       16,671  

 

 

 

Exhibit 99.2

 

 

 

Contacts :

Media: 703.373.0200 or ir@arlingtonasset.com  

Investors: Kurt Harrington at 703.373.0200 or ir@arlingtonasset.com

 

Arlington Asset Investment Corp. Appoints

Anthony P. Nader as New Independent Director

 

ARLINGTON, VA , February 3, 2015 – Arlington Asset Investment Corp. (NYSE: AI) (the “Company”) today announced that its Board of Directors has appointed Anthony P. Nader to serve as a new independent director of the Company, whose term will begin March 1, 2015. Mr. Nader will stand for election at the Company’s next annual meeting. Mr. Nader’s appointment brings the number of the Company’s directors to eight.

 

Mr. Nader, age 51, is a Managing Director of SWaN & Legend Venture Partners, a principal investment firm that Mr. Nader co-founded in 2006, with investments in growth oriented companies as well as domestic and international real estate holdings. Mr. Nader also serves as Vice Chairman of Asurion, a privately held company with over 16,000 employees that provides technology protection to approximately 300 million customers worldwide. In 2008, Mr. Nader successfully merged his prior company, National Electronics Warranty (“NEW”) with Asurion. Mr. Nader joined NEW in 1990 as Chief Operating Officer, was named President in 1999 and Chief Executive Officer in 2006, a position he held until 2013. Under his leadership, NEW grew to be the largest global provider of extended service plans for the consumer electronics and appliance industry. Mr. Nader currently serves on the executive committee of the Inova Health System Board of Trustees. He is the past chairman of the Inova Health System Foundation Board. He also serves on the board of The Cranemere Group Limited, Optoro, Inc., La Lumiere, BigTeams and is an active advisor for KIND Healthy Snacks.

 

“We are excited about Tony’s appointment to our Board of Directors. NEW’s leadership position in the technology protection industry and successful merger with Asurion are a testament to Tony’s leadership, judgment and acumen. Also, we expect his investment insight as a founder of SWaN & Legend Venture Partners to positively complement the strengths and experience of our current Board of Directors and senior management team as we continue to execute Arlington’s strategy,” said J. Rock Tonkel, Jr., President and Chief Executive Officer.

 

About the Company

 

Arlington Asset Investment Corp. (NYSE: AI) is a principal investment firm that currently invests primarily in mortgage-related and other assets. The Company is headquartered in the Washington, D.C. metropolitan area. For more information, please visit www.arlingtonasset.com .

 

Statements concerning the impact of Mr. Nader on the Company’s Board of Directors and the Company’s execution of its strategy constitute forward-looking statements that are subject to a number of factors, risks and uncertainties that might cause actual results to differ materially from stated expectations or current circumstances. These factors include, but are not limited to, uncertainties surrounding the impact that Mr. Nader will have on the Company’s Board of Directors, changes in interest rates, increased costs and reduced availability of borrowing, decreased interest spreads, preservation of our net operating loss and net capital loss carry-forwards, impacts of regulatory changes and changes to Fannie Mae and Freddie Mac, availability of opportunities that meet or exceed our risk adjusted return expectations, ability to generate sufficient cash through retained earnings to satisfy capital needs, competition for business and personnel, and general economic, political, regulatory and market conditions. These and other risks are described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that are available from the Company and from the SEC, and you should read and understand these risks when evaluating any forward-looking statement.