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

The Company prepares a supplement to provide additional quarterly information for the benefit of its shareholders. The supplement can be found at the Company’s website in the Investor Relations section under “Quarterly Supplemental Information”.

The Company will hold the third quarter 2012 earnings conference call on Tuesday, November 6, 2012, at 11:00 a.m. ET. The number to call is 1-866-524-3160 for domestic calls, 1-412-317-6760 for international calls and 1-866-605-3852 for Canadian calls. There is no pass code; please reference CreXus Investment Corp. third quarter earnings. The replay number is 1-877-344-7529 for domestic calls and 1-412-317-0088 for international calls and the conference number is 10019912. The replay will be available at 1:00 p.m. ET through November 8, 2012 at 12:00 p.m. ET. There will be a web cast of the call on www.crexusinvestment.com. If you would like to be added to the e-mail distribution list, please visit www.crexusinvestment.com, click on Investor Relations, then E-Mail Alerts, enter your e-mail address where indicated and click the Submit button.

This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may,” “would,” “will” or similar expressions, or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, our business and strategy; our projected financial and operating results; our ability to obtain and maintain financing arrangements and the terms of such arrangements; financing and advance rates for our targeted assets; our continuing or future relationships with third parties; our ability to realize our expectations of advantages of acquiring assets; general volatility of the markets in which we acquire assets; the implementation, timing and impact of, and changes to, various government programs; our expected assets; changes in the value of our assets; interest rate mismatches between our assets and our borrowings used to fund such purchases; changes in interest rates and mortgage prepayment rates; effects of interest rate caps on our adjustable-rate assets; rates of default or decreased recovery rates on our assets; prepayments of the mortgage and other loans underlying our mortgage-backed or other asset-backed securities; the degree to which our hedging strategies may or may not protect us from interest rate volatility; changes in governmental regulations, tax law and rates, accounting guidance, and similar matters; availability of opportunities in real estate-related and other securities; availability of qualified personnel; estimates relating to our ability to make distributions to our stockholders in the future; our understanding of our competition; market trends in our industry, interest rates, the debt securities markets or the general economy; our ability to integrate and manage newly acquired assets into our portfolio; our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended; and our ability to maintain our qualification as a REIT for federal income tax purposes. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in our most recent annual report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. We do not undertake, and specifically disclaim all obligations, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

 
 
CREXUS INVESTMENT CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except share and per share data)
           
September 30, 2012 June 30, 2012 March 31, 2012 December 31, 2011 September 30, 2011
Assets: (unaudited) (unaudited) (unaudited) (1) (unaudited)
Cash and cash equivalents $ 105,575 $ 189,128 $ 257,490 $ 202,814 $ 47,233
Agency mortgage-backed securities, at fair value - - - - 200,335

Commercial mortgages net of allowance for loan losses

 ($0, $0, $0, $369 and $331, respectively)

Senior 146,437 123,845 200,878 374,348 323,850
Subordinate 38,837 38,720 38,527 71,517 71,041
Mezzanine 546,541 513,913 390,682 306,936 278,418

Preferred equity, net allowance for loan losses

 ($0, $0, $0, $0, and $38, respectively)

39,769 - - - 21,282
Real estate held for sale 41,514 44,071 52,800 - -
Investment in real estate, net 33,926 34,196 34,466 33,196 -
Intangible assets, net 5,201 5,306 5,412 - -
Rents receivable 221 154 87 32 -
Accrued interest receivable 5,116 4,140 3,509 2,608 3,861
Principal receivable from servicer - 11,429 - - -
Other assets   5,275   2,527   3,540   1,420     975
Total assets $ 968,412 $ 967,429 $ 987,391 $ 992,871   $ 946,995
 
Liabilities:
Mortgages payable $ 19,150 $ 19,150 $ 19,150 $ 16,600 $ -
Participation sold (non-recourse) - - 14,898 14,755 -
Accrued interest payable - - 48 6 -
Accounts payable and other liabilities 4,864 5,809 4,537 4,048 4,038
Dividends payable 24,523 20,692 20,688 26,817 22,986
Intangible liabilities, net 1,938 1,969 2,014 - -
Investment management fees payable to affiliate   3,450   3,426   3,470   3,488     3,373
Total liabilities   53,925   51,046   64,805   65,714     30,397
 
Stockholders' Equity:
Common stock, par value $0.01 per share, 1,000,000,000

authorized, 76,630,528, 76,630,528, 76,620,112, 76,620,112,

 and, 76,620,112 shares issued and outstanding, respectively

766 766 766 766 766
Additional paid-in-capital 890,862 890,862 890,757 890,757 890,757
Accumulated other comprehensive income - - - - 4,397
Retained earnings   22,859   24,755   31,063   35,634     20,678
Total stockholders' equity   914,487   916,383   922,586   927,157     916,598
Total liabilities and stockholders' equity $ 968,412 $ 967,429 $ 987,391 $ 992,871   $ 946,995
 

(1)

Derived from the audited consolidated statements of financial condition at December 31, 2011.

 
 
CREXUS INVESTMENT CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands, except share and per share data)
     
For the Quarter ended

September 30,

2012

(unaudited)

 

June 30, 2012

(unaudited)

 

March 31,

2012

(unaudited)

 

December 31,

2011

(unaudited)

 

September 30,

2011

(unaudited)

 
Net interest income:
Interest income $ 26,841 $ 17,678 $ 23,226 $ 41,568 $ 44,174
Interest expense (187 ) (310 ) (360 ) (75 ) (21 )
Servicing fee   (149 )   (114 )   (115 )   (142 )   (213 )
Net interest income   26,505     17,254     22,751     41,351     43,940  
 
Other income:
Realized loss on sale of loan - (525 ) - - -
Realized gains on sales of investments - - - 4,556 -
Miscellaneous fee income 126 127 515 511 217
Rental income   809     811     712     238     -  
Total other income   935     413     1,227     5,305     217  
 
Other expenses:
Provision for loan losses - - 2,803 - -
Management fees to affiliate 3,446 3,426 3,471 3,560 3,373
General and administrative expenses 1,327 1,180 2,710 1,269 848
Amortization Expense 105 106 123 - -
Depreciation expense   271     270     275     54     -  
Total other expenses   5,149     4,982     9,382     4,883     4,221  
 
Net income before income tax 22,291 12,685 14,596 41,773 39,936
Income tax   6     32     1    

(1)

    -  
Net income from continuing operations   22,285     12,653     14,595     41,774     39,936  
 

Net income (loss) from discontinued operations (net of tax expense

 of $425, $1,564, $295, $0 and $0, respectively)

2,903 (46 ) 1,522 - -
Gain on sale from discontinued operations - 1,774 - - -
Impairment charges   (2,560 )   -     -     -     -  
Total income from discontinued operations   343     1,728     1,522     -     -  
 
Net Income $ 22,628   $ 14,381   $ 16,117   $ 41,774   $ 39,936  
 
Net income per share-basic and diluted, continuing operations $ 0.29 $ 0.17 $ 0.19 $ 0.55 $ 0.52
Total income per share-basic and diluted, discontinued operations   0.01     0.02     0.02     -     -  
Net income per share-basic and diluted $ 0.30   $ 0.19   $ 0.21   $ 0.55   $ 0.52  
Dividend declared per share of common stock $ 0.32   $ 0.27   $ 0.27   $ 0.35   $ 0.30  
Weighted average number of shares outstanding-basic and diluted   76,630,528     76,624,462     76,620,112     76,620,112     76,620,112  
Comprehensive income:
Net income $ 22,628   $ 14,381   $ 16,117   $ 41,774   $ 39,936  
Other comprehensive income (loss):
Unrealized gains on securities available-for-sale - - - 159 1,649
Reclassification adjustment for realized gains included in net income   -     -     -     (4,556 )   -  
Total other comprehensive (loss) income   -     -     -     (4,397 )   1,649  
Comprehensive income $ 22,628   $ 14,381   $ 16,117   $ 37,377   $ 41,585  

     
 
CREXUS INVESTMENT CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands, except share and per share data)
               
For the Nine Months Ended

September 30,

2012

September 30,

2011

(unaudited) (unaudited)
 
Net interest income:
Interest income $ 67,745 $ 64,672
Interest expense (857 ) (2,295 )
Servicing fees   (378 )   (429 )
Net interest income   66,510     61,948  
 
Other income:
Realized loss on sale of loan (525 ) -
Realized gains on sales of investments - 13,925
Miscellaneous fee income 768 217
Rental income   2,332     -  
Total other income   2,575     14,142  
 
Other expenses:
Provision for loan losses, net 2,803 127
Management fees to affiliate 10,343 7,398
General and administrative expenses 5,217 1,942
Amortization expense 334 -
Depreciation expense   816     -  
Total other expenses   19,513     9,467  
 
Net income before income tax 49,572 66,623
Income tax   39     1  
Net income from continuing operations   49,533     66,622  
 

Net income from discontinued operations

 (net of tax expense of $2,284 and $0, respectively)

4,379 -
Gain on sale from discontinued operations 1,774 -
Impairment changes   (2,560 )   -  
Total income from discontinued operations   3,593     -  
 
Net Income $ 53,126   $ 66,622  
 
Net income per share-basic and diluted, continuing operations $ 0.65 $ 1.15
Total income per share-basic and diluted, discontinued operations   0.04     -  
Net income per share-basic and diluted $ 0.69   $ 1.15  
Dividend declared per share of common stock $ 0.86   $ 0.78  
Weighted average number of shares outstanding-basic and diluted   76,625,054     57,887,511  
Comprehensive income:
Net income $ 53,126   $ 66,622  
Other comprehensive income:
Unrealized gains on securities available-for-sale - 7,847
Reclassification adjustment for realized gains included in net income   -     (13,925 )
Total other comprehensive income (loss)   -     (6,078 )
Comprehensive income $ 53,126   $ 60,544  




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