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CreXus Investment Corp. Reports Results For The 3rd Quarter 2012

Stocks in this article: CXS

The weighted average yield on commercial real estate debt and preferred equity was 10.29%, 16.80% and 11.27% at September 30, 2012, September 30, 2011 and June 30, 2012, respectively. The yield on the Company’s real estate portfolio, which includes real estate held for sale, as of the quarters ended September 30, 2012, and June 30, 2012 was 9.44% and 9.50%, respectively. The Company held no real estate properties at September 30, 2011.

The following table summarizes segmented investment portfolio information for the Company:

           

Quarter ended

September 30,

2012

   

Quarter ended

September 30,

2011

    Quarter ended

June 30, 2012

 
Commercial Real Estate Debt and Preferred Equity Portfolio   (dollars in thousands)  
Debt investment portfolio at period-end $ 731,815     $ 873,644     $ 676,478
Preferred equity portfolio at period-end 39,769 21,282 -
Fixed-rate investments as percentage of portfolio 65% 50% 65%
Adjustable-rate investments as percentage of portfolio 35% 50% 35%
Fixed-rate investments
Agency mortgage-backed securities as percentage of fixed-rate assets - 38% -
Commercial mortgage loans as percentage of fixed-rate assets 92% 58% 100%
Commercial preferred equity as percentage of fixed-rate assets 8% 4% -
Adjustable-rate investments
Commercial mortgage loans as percentage of adjustable-rate assets 100% 100% 100%
Weighted average yield on commercial real estate debt and preferred equity at period-end 10.29% 16.80% 11.27%
Real Estate Properties Portfolio including Real Estate Held for Sale
Real estate investment at period-end (1) 78,703 - 81,604
Annualized yield on real estate investment portfolio at period end (2) 9.44% -

9.50%

Mortgages payable on real estate 19,150 - 19,150
Net equity in investments in real estate 59,553 - 62,454
Annualized yield on net equity in investments in real estate (2) 11.28% -

11.32%

Weighted average cost of funds on real estate investment financing (3) 3.49% - 3.49%
     

(1)

 

Includes $41.5 million and $44.1 million in real estate held for sale at September 30, 2012 and June 30, 2012, respectively.

Also includes related net intangible assets in excess of liabilities associated with purchase price allocation.

(2)

Impairment charge and gain on sale related to discontinued operations were not annualized for purposes of determining the yield on equity.

(3)

Interest expense includes net payments related to the interest rate swap and excludes change in market value.

 

The following table summarizes select characteristics for each of the Company’s asset classes:

            Quarter ended     Quarter ended       Quarter ended  
  September 30, 2012     September 30, 2011       June 30, 2012  
 

Commercial

Loans

 

Preferred

Equity

 

Real

Estate

     

Commercial

Loans

 

Preferred

Equity

 

Agency

MBS

     

Commercial

Loans

 

Real

Estate

   
Weighted average amortized cost basis $ 98.9   $ 100.0   - 85.6   93.8   104.7 $ 97.0   -
Weighted average coupon 9.63% 11.00% - 5.40% 10.09% 4.77% 9.50% -
Fixed-rate percentage of asset class 64% 100% - 37% 100% 100% 65% -
Adjustable-rate percentage of asset class 36% 100% - 63% - - 35% -
Weighted average yield on assets at period-end 10.24% 11.35% 9.44% 19.97% 17.28% 3.39% 11.27%

9.50%

Weighted average cost of funds at period-end - - 3.49%

 (1)

- - - - 3.49%

 (1)

     

(1)

 

Interest expense includes net payments related to the interest rate swap and excludes change in market value.

 

At September 30, 2012, the Company’s commercial mortgage loan portfolio included one loan on non-accrual status. At September 30, 2011 the Company had two loans relating to one group of underlying properties that were 30 days or more delinquent. At June 30, 2012, the Company’s commercial mortgage loan portfolio had no delinquent loans. At September 30, 2012, the Company had no allowance for loan losses. At September 30, 2012 the Company classified two loans as Watch List. The Company had two loans classified as Workout at September 30, 2011 and one loan classified as Watch List at June 30, 2012.

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