The Company’s operating expenses were $5.3 million, or 1.33% of average net assets, for the second quarter of 2012, compared to $5.1 million, or 1.46% of average net assets, for the first quarter of 2012. The increase in operating expenses was primarily the result of an increase in compensation and benefits. However, expenses as a percentage of net assets decreased as a result of the larger asset base.
|(dollars in thousands)||Three Months Ended|
|June 30, 2012||March 31, 2012|
|Average Agency RMBS (1)||$||10,737,980||$||9,238,905|
|Average repurchase agreements (2)||$||9,497,267||$||8,194,067|
|Average net assets (3)||$||1,591,432||$||1,406,049|
|Average common shares outstanding (4)||116,881||104,620|
|Average yield on Agency RMBS (5)||2.62%||2.78%|
|Average cost of funds and hedge (6)||0.91%||0.90%|
|Interest rate spread net of hedge (7)||1.71%||1.88%|
|Operating expense ratio (8)||1.33%||1.46%|
|Leverage ratio (at period end) (9)||7.6:1||7.7:1|
(1) The Company's average Agency RMBS for the period was calculated by averaging the month end cost basis of settled Agency RMBS during the period.
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