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CreXus Investment Corp. Reports Results For The 4th Quarter And Year Ended 2012

Stocks in this article: CXS

CreXus Investment Corp. (NYSE: CXS), today reported GAAP net income for the quarter ended December 31, 2012 of $17.9 million or $0.23 per average share, as compared to $41.8 million or $0.55 per average share for the quarter ended December 31, 2011, and $22.6 million or $0.30 per average share for the quarter ended September 30, 2012.

GAAP net income for the year ended December 31, 2012 was $71.0 million or $0.93 per average share as compared to GAAP net income of $108.4 million or $1.73 per average share for the year ended December 31, 2011.

Common dividends declared for the quarters ended December 31, 2012, December 31, 2011, and September 30, 2012, were $0.32, $0.35 and $0.32 per common share, respectively. The Company distributes dividends based on its current estimate of taxable earnings per common share, not GAAP earnings. Taxable and GAAP earnings will typically differ due to items such as differences in premium amortization and discount accretion, non-taxable unrealized and realized gains and losses, provision for loan losses, and non-deductible general and administrative expenses. The annualized dividend yield on the Company’s common stock for the quarter ended December 31, 2012, based on the December 31, 2012 closing price of $12.25, was 10.45%.

On a GAAP basis the Company provided a return on average equity of 7.86%, 18.12%, and 9.83%, for the quarters ended December 31, 2012, December 31, 2011, and September 30, 2012, respectively. On a GAAP basis, the Company provided a return on average equity of 7.76%, and 12.03% for the years ended December 31, 2012, and 2011, respectively.

The weighted average yield on commercial real estate loans and preferred equity was 10.56%, 29.86% and 10.29% at December 31, 2012, December 31, 2011 and September 30, 2012, respectively.

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

 

December 31,

 

December 31,

 

September 30,

2012

 

2011

 

2012

Commercial Real Estate Debt and Preferred Equity Portfolio (dollars in thousands)
Commercial real estate loans $ 729,822 $ 752,801 $ 731,815
Preferred equity 39,769 - 39,769
Fixed-rate investments as percentage of portfolio 71 % 38 % 65 %
Adjustable-rate investments as percentage of portfolio 29 % 62 % 35 %
Fixed-rate investments
Commercial mortgage loans as percentage of fixed-rate assets 93 % 100 % 92 %
Preferred equity as percentage of fixed-rate assets 7 % - 8 %
Adjustable-rate investments
Commercial mortgage loans as percentage of adjustable-rate assets 100 % 100 % 100 %

Weighted average yield on commercial real estate loans and preferred equity

10.56 % 29.86 % 10.29 %
Real Estate Properties Portfolio including Real Estate Held for Sale
Real estate investment at period-end (1) 70,354 33,196 78,703
Annualized yield on real estate investment portfolio at period end (2) 9.55 % 7.67 % 9.44 %
Mortgages payable on real estate 19,150 16,600 19,150
Net equity in investments in real estate 51,204 16,596 59,553
Annualized yield on net equity in investments in real estate (2) 11.28 %

7.96

% 11.28 %
Weighted average cost of funds on real estate investment financing (3) 3.49 % 3.50 % 3.49 %

(1)

 

Includes $33.5 million and $41.5 million in real estate held for sale at December 31, 2012 and September 30, 2012, respectively.

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

(2)

Based on average assets for the calendar year 2012. Impairment charge and gain on sale related to real estate held for sale were not annualized for purposes of determining the yield.

(3)

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

 

The following table summarizes characteristics for each asset class:

  December 31, 2012     December 31, 2011   September 30, 2012  

Commercial

 

Preferred

 

Real

 

Commercial

 

Real

 

Commercial

 

Preferred

 

Real

Loans

 

Equity

 

Estate

   

Loans

 

Estate

 

Loans

 

Equity

 

Estate

 
Weighted average amortized cost basis $ 99.0 $ 100.0 - $ 90.0 - $ 98.9 $ 100.0 -
Weighted average coupon 9.87 % 11.00 % - 5.94 % - 9.63 % 11.00 % -
Fixed-rate percentage of asset class 70 % 100 % - 38 % - 64 % 100 % -
Adjustable-rate percentage of asset class 30 % - - 62 % - 36 % - -
Weighted average yield on assets at period-end 10.52 % 11.35 % 9.55 % 29.86 % 7.67 % 10.24 % 11.35 % 9.44 %
Weighted average cost of funds at period-end - - 3.49 %

(1)

- 3.50 % - - 3.49 %

(1)

 
(1) Interest expense includes net payments related to the interest rate swap and excludes changes in the market value of the interest rate swap.
 

At December 31, 2012 and September 30, 2012, the Company’s commercial real estate loan portfolio included one loan on non-accrual status. At December 31, 2011 the Company had two loans relating to one group of underlying properties that were 30 days or more delinquent. During the quarters ended December 31, 2012, December 31, 2011 and September 30, 2012, the Company did not record an additional provision for loan losses.

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