Lloyd McAdams - CEO Chuck Siegel - CFO Joe McAdams - Chief Investment Officer, President Brett Roth - Senior Vice President.

Douglas Harter - Credit Suisse Howard Henick - Scurlydog Capital Jack Marino - Colorado Wealth Management Arthur Lipson - Western Investment.

Good afternoon and welcome to the Anworth Mortgage Third Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions [Operator Instructions] Before we begin the call, I will make a brief introductory statement.

Statements made on this earnings call may contain forward-looking statements within the meaning of Section 27 (a) of the Securities Act of 1933 as amended and Section 21 (e) of the Securities Exchange Act of 1934 as amended, and we hereby claim the protection of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to any such forward-looking statements.

Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters.

You can generally identify forward-looking statements, as statements containing the words may, will, believe, expect, anticipate, intend, estimate, assume, continue or other similar terms or variations on those terms or the negative of those terms.

You should not rely on our forward-looking statements because the matters they describe are subject to assumptions, known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control.

Statements regarding the following subjects are forward-looking by their nature, our business and investment strategy, market trends and risks, assumptions regarding interest rates and assumptions regarding prepayment rates on the mortgage loans securing our mortgage-backed securities.

Our actual results may differ materially and adversely from those expressed in any forward-looking statements, as a result of various factors and uncertainties, including but not limited to, changes in interest rates, changes in the market value of our mortgage backed securities, changes in the yield curve, the availability of mortgage backed securities for purchase, increases in the prepayment rates on the mortgage loans securing our mortgage backed securities, our ability to use borrowings to finance our assets and, if available, the terms of any financing, risks associated with investing in mortgage-related assets, changes in business conditions in the general economy including the consequences of actions by the U.S.

government and other foreign governments to address the global financial crisis, implementation of or changes in government regulations affecting our business, our ability to maintain our qualification as a real estate investment trust for federal income tax purposes, our ability to maintain an exemption from the Investment Company Act of 1940 as amended, risks associated with our home rental business and the managers' ability to manage our growth.

These and other risks, uncertainties and factors, including those discussed under the heading Risk Factors in our annual report on Form 10-K and other reports that we file from time to time with the Securities and Exchange Commission, could cause our actual results to differ materially and adversely from those projected in any forward looking statements we make.

Our forward-looking statements speak only as of the date 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, we do not intend to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

Except as required by law, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements that may be made today or that reflect any change in our expectations or any change in events, conditions or circumstances based on which any such statements are made. Thank you.

Please note, this event is being recorded. I would now like to introduce Mr. Lloyd McAdams, Chairman and Chief Executive Officer of Anworth. Please go ahead, sir..

Thank you very much. I am Lloyd McAdams, and I welcome you to this call today where we'll discuss our third quarter operating results. I will now turn the call over to Joe McAdams, our Chief Investment Officer and President. Also with us today is Brett Roth, Senior Vice President; and Chuck Siegel, our Chief Financial Officer.

I will participate in the call later. Thank you very much..

Thanks. This is Joe McAdams. Turning to our third quarter financial results, it was another solid quarter for Anworth's investment portfolio.

We had core earnings of $12.1 million or $0.13 a share, which was down from $0.15 a share in the second quarter, but that reduction was more than offset by an increase in our comprehensive income to $34.2 million or $0.36 a share.

And again, comprehensive income includes not just the core earnings of the portfolio, but the net effect of all realized and unrealized gains on our investment portfolio.

The reduction in core earnings was driven primarily by expense related to higher prepayments on agency MBS during the quarter and reduction of average leverage on both our agency and mortgage credit investments.

And the increase in comprehensive income was driven by price appreciation on our mortgage credit investments as well as an increase in the value of agency MBS net of hedges. Turning to the allocation of our portfolio across different investment classes, our total portfolio stands at approximately $5.9 billion, down from $6.3 billion at June 30.

This was driven by a smaller agency MBS portfolio which now stands at approximately 75% of the total portfolio.

Looking a little closer at the agency MBS portfolio valued at $4.4 billion, including the notional balance of agency TBA positions, and you'll see there is an increase in currently resetting adjustable-rate mortgages, which is now up to 45% of our total agency MBS position.

There was a decrease conversely in fixed rate MBS from 26% of the portfolio at June 30 to 24% -- 15 years, went from 26% to 24% at September 30. While the fed funds target rate has not increased this year, although we certainly have an expectation that we will by the end of the year.

The anticipation of future increase in short-term rates has moved one-year LIBOR approximately half a percent during the year. So our agency ARM securities are already seeing interest rate increases and you'll notice on the quarter, the coupon of our adjustable rate agency MBS increased 9 basis points to 2.75% at September 30.

Overall, our agency portfolio has an average coupon of 2.68% and an average cost of 102.95. Premium amortization expense decreased to $7.1 million on the quarter. This is the gap premium amortization expense that can fluctuate based on expectations of future prepayments.

However, the paydown expense reflected in core earnings, which is related to the actual prepayment activity during the quarter, increased from $7.7 million last quarter to $8.8 million during the third quarter, as the portfolio CPR increased from 19% to 24% annualized.

So far during the fourth quarter, we've seen a decrease in prepayment activity with an average CPR of 21% reported in the first month of the quarter.

We would expect these lower prepayments to persist in the near term, both because we've seen an increase in mortgage rates recently as well as typical seasonal effects, which the repayment rates decline from summer months into the fall. With that, I turn the call over to Brett Roth to discuss our non-agency MBS and mortgage credit investments..

Thanks, Joe. I'll start off in general talking about the non-agency market. During the quarter, we saw the non-agency spreads tighten. The appetite for fixed rate assets remains very strong. And since the quarter end, we have continued to see an aggressive bid for fixed rate assets, in particular, which has led to a continued tightening of spreads.

Thus, the non-agency market as well as our portfolio had and continued to benefit from spread tightening. During the quarter, we continue to selectively add positions to the non-agency portfolio, specifically within the alt A sector of the portfolio.

Overall, the non-agency portfolio is benefiting from the credit performance of its underlying assets as well as experiencing strong voluntary prepayment activity. Net net, the portfolio paydowns outsize reinvestment activities, which led to the reduction in the size of the non-agency portfolio.

Turning to the loan portfolio, you will see that the retained interest in loans held in securitization trusts declined approximately $10 million. The main reason for the decline was due to the strategic decision to take advantage of the tighter market conditions and selectively sell some of our lower yielding credit pieces.

On the funding side, we continue to add new counterparties to our mix of lenders. We are able to aggressively manage our financing and therefore our cost of funds, plus our active management of funding has been a part of why we have been able to lower our overall leverage.

That said, active management has allowed us to reduce the leverage amount with minimal impact on our levered returns. Looking forward, we feel we're in a good position to take advantage of investment opportunities as they arise in the current market.

We continue to look to find attractive assets to add to the portfolio across all sectors that we participate in within non-agencies. Thanks, Joe..

Okay. So if we turn next to the financing of our agency and non-agency portfolio and overall portfolio leverage, you'll see in the release that the average cost of our repo borrowing increased slightly on the quarter from 83 to 85 basis points.

However, the increase in the LIBOR rate that we receive on our interest rate swaps resulted in an overall reduction in the hedged interest rate to 1.16%, down from 1.2% the prior quarter. Leverage decreased slightly overall from 5.8 times total capital to 5.5 times total capital as of September 30.

If you include the implied sort of synthetic financing in an agency TBA dollar roll position, our overall effective economic leverage stood at 6 times total capital at September 30. The interest rate swap position I discussed has a balance of just over $2 billion.

It's a reduction on the quarter, due primarily to the maturity of some shorter term swaps as well as the termination of additional swaps with maturities from zero to three years.

Given the increase we've seen in our fully indexed ARM portfolio as well as the continued shortening of the fixed period of our hybrid ARMs has resulted in a reduced need for the shorter swaps to effectively hedge our ARM portfolio. We have maintained the longer-term swaps that are generally hedging against our fixed rate positions.

Likewise, we saw a reduction in euro-dollar positions, which hedge LIBOR inside of one year. In total, our hedged borrowings, including swaps and euro-dollars, have an effective maturity of approximately 1.3 years.

Our total portfolio duration is approximately 1.5 years, so our asset liability gap remains very narrow inside of 3 months at September 30.

The effective net interest rate spread decreased slightly as the lower cost of borrowings we discussed was offset largely due to the effect of higher paydown expense from agency prepayments, while reproducing the average asset yield as well, still resulting in a 1.2% net interest rate spread on average for the quarter.

We declared a $0.15 dividend during the quarter that resulted in a dividend yield on the quarter end closing stock price of 12.2%. Our book value per share, as I discussed, increase solidly from $6.06 to $6.25 per share at quarter end.

If you include the dividend declared as well as the $0.19 increase in book value, that resulted in a return on equity to common shareholders of 5.6% on the quarter and brought the year-to-date return on equity to 7.5% through nine months unannualized. During the quarter, we issued just under $1 million of Series C preferred stock.

We also repurchased 340,000 shares of common stock during the quarter at an average price of $4.84, which, because they were repurchased at a discount to book, added approximately half a cent per share to the common book value. With that, I would turn the call over to Lloyd for his comments and to wrap up the call..

number one, they expect that over the period that they intend to own the shares, they will earn above average yield relative to the 3% to 6% that is currently available from corporate bonds.

I should point out that when you buy a corporate bond, the maximum yield you can get is the coupon, there is no opportunity for increases in coupon rates on corporate bonds, as there are opportunities for that to happen when you buy stocks.

And number two, they will expect there will be no permanent decline in the book value of the company due to the permanent losses when assets are sold at significant losses. Before I go too far here, I want to briefly describe how I view permanent losses and how they occur when using leverage to acquire debt securities.

To simply put, when bonds are purchased using the bonds themselves as collateral for the loan, then the bonds decline in value, the lender will require additional collateral to offset the decline in the bonds value.

If the owners of bonds that, in this case will be Anworth, if we do not deliver the collateral or do not have the collateral, the lender sells the bonds, making this temporary decline in value a permanent loss. Such a permanent loss of book value, if it were to occur, poses considerable risk to investors.

Number one, there will be less equity capital on which to earn the income to pay dividends. So without this lost income earning capital, dividend rate is almost certain or certainly likely to decline and probably permanently.

Second, risk is declined in the annual dividend per share, should result in a lower stock price to maintain the same dividend percentage yield that investors have been receiving. And thirdly, a permanent decline in book value usually results in a permanently lower stock price.

Whenever a potential investor expects the permanent decline in book value, the logical investment decision that investor would make would be to either, one, not purchase the stock or two, purchase a stock at a price sufficiently below the current book value.

So when the expected permanent book value decline does turn, cost basis to shares will be comparable to the new lower book value per share. Clearly having some concept of the magnitude of a permanent decline in book value in the future is an important analytical asset here.

If you accept this logic, and I assume that some, if not many people may not accept it, then the most straightforward way to explain the stock price discount to its current book value is to, first, assume that the book value is expected to decline by approximately the amount of the discount and two, then understand the ways that this decline might actually happen.

So, [indiscernible] shares currently trade at 20% discount to its current book value. My first step in determining whether this discount is appropriate is devaluate each of the company's assets to determine the likelihood that combined, they would cause a 20% or in our case $120 million permanent decline in the company's common stock book value.

As noted in our press release, on the tables on page 2 of the press release, Anworth has seven types of assets, about which each investor can do their own analysis to estimate for each of the assets, the potential of permanent declines in value.

As Joe has noted, but I'll repeat them for continuity here, these categories and the percentages of our $6.238 billion portfolio of mortgage and real estate assets are -- categories one and two are the fully indexed ARMs and other agency hybrid ARMs fully indexed represent 31% of portfolio and the other agency hybrid ARMs represent 20% of portfolio, that makes 51%.

I guess, that's what all the presidential candidates are looking forward to. These are the low-duration assets in our portfolio. I believe that most investors will conclude that the potential for ARMs to result in significant permanent losses is among the portfolio is lowest, though a permanent loss definitely could occur.

The next two categories are the 15-year fixed rate agency mortgage-backed securities, which is 14% as mentioned and 15-year TBA agency fixed rates, which are 12%. Now, interest rate swaps on hedges play a very important role in determining the potential permanent loss potential for a fixed rate mortgage-backed security.

As noted in our press release, our swap position is $2 billion or 33% of the total assets as described on page 2 of press release. And finally, there is a third group of assets 5, 6 and 7. The non-agency mortgage-backed securities represent 10% of the portfolio, residential mortgage loans represent 13% of the portfolio.

So I should point out they're financed with almost a similar amount of non-recourse financing. And lastly, less than 1% of the portfolio is the residential real estate portfolio. Now, the valuations of these assets that might be subject to a permanent loss are importantly related to house prices in addition to interest rates.

As we know from the past decade, house prices can decline and impair the collateral value that supports these types of mortgages. So conversely, house prices can increase and improve the collateral value and increase the value of these assets.

I believe that most investors would conclude that new government mortgage regulations have reduced to some probably considerable degree the potential for large declines in house prices like those which occurred during the past decade. And as I noted above, there is also the ace component of our portfolio, which is our hedges.

And as noted earlier, $2 billion of interest rate swap hedges are a part of our portfolio to further reduce the likelihood of any of these assets having a permanent loss in our mortgage backed portfolio due to interest rate increases.

So, I'll conclude by summarizing that well, certainly, my belief here might not be totally accurate or something else could be more relevant.

It is my view that most investors who carefully analyze potential of permanent losses in any mortgage REIT and Anworth in particular, will likely conclude that the risk for Anworth is considerably less than the 20% discount to book. Permanent losses, I would expect, could be less than that given what I see over a relatively near term period of time.

If people who make that decision are correct, the dividend yield on shares bought today should over time exceed the return on equity that we earn in our portfolio because these shares were bought at a 20% discount to the book value per share.

I believe that most investors would consider having a dividend yield exceeding the return on equity to be a very subtle return if they were achieving two objectives that I mentioned at the very beginning in my comments.

I should also add that I fully understand that they're are knowledgeable investors who expect that future permanent losses in Anworth could be greater than 20 [Indiscernible] on the call, obviously, interesting to hear their perspective. But with that, we'll turn the call over to our operator, Gary.

And we look forward to answering any questions or elaborate on comments that we've made. Thank you very much..

[Operator Instructions] The first question comes from Douglas Harter with Credit Suisse. Please go ahead..

As you look at reinvesting pay downs that you get, I guess, how are you thinking about stock buyback versus agency versus credit assets today?.

Sure, Doug. This is Joe. We have been reinvesting our pay downs we received in the third quarter. We did have a slight reduction in leverage. So I guess you could say between the combination of the appreciation of the assets as well as not reinvesting all the pay downs sort of resulted in that decrease in leverage.

We are, on the agency side, looking for opportunities to increase some of our hybrid or 15 year fixed positions. We're also, as Brett mentioned, reinvesting some of our lower -- not only reinvesting the paydowns, but selling a few of our lower yielding positions and looking for some higher yielding opportunities with them in the credit space.

So we do have our leverage at a level where I think we're sort of at or a little below where we would target it moving into year end. We're certainly positioned to opportunistically look to add positions if we see weakness in prices, especially given that we've had a good several quarters of appreciation on the residential credit side.

As far as stock repurchase activity, which is another use of the cash we receive in the portfolio, we did have a lower repurchase activity during the third quarter. Most of it was early in the quarter when the stock price and the discount to book was lower. The stock price was definitely higher for the bulk of the quarter.

And obviously, in the last month, we've moved back to a level that's closer to a 20% discount to book. So that stock repurchase right now looks more attractive than it did on balance during the third quarter. So, I think we should weigh all those factors, but that's how we got to where we were on September 30..

The next question comes from Howard Henick with Scurlydog Capital. Please go ahead..

To follow up on the last question, some of your competitors are pointing out that the money market reform has caused agency repo collateral to be very highly valued. And together with that, the increase in LIBOR has made agency funding more attractive.

And in light of that and the strong rally in non-agency and credit-type securities, are you leaning a little more heavily towards agencies or no?.

I guess so to where we've been, we're remaining a little more heavily. So we had virtually, all of our incremental purchases over the past 12 months had been moving towards mortgage credit. We have been making some incremental agency investments during the third quarter and into the fourth quarter.

Although, I think, the trend of LIBOR versus agency repo, which has been positive so far, year-end financing is always a little bit of a challenge. So, we've seen repo rates move up after the end of the quarter and haven't necessarily seen a commensurate increase in LIBOR. So, I think there's definitely some volatility.

And maybe I wouldn't expect it to be the fourth quarter to be as strong for agency repo as it was in the third quarter, but I think we're moving to a more balanced approach between agency and mortgage credit, whereas really for the last several quarters of 2015 and first few quarters of this year, all of the incremental reinvestment had been moving into mortgage credit..

Okay. So now you are saying at the most of 100% mortgage credit, you'll do some fraction of that a little more balance.

That's what your point is, did I hear it correctly?.

Yes. We talked about a point where if you look not just at the asset side, but sort of the net equity investment in the various strategies, we're at roughly a 60%, 40% mix between the agency sort of interest rate-driven investment and the mortgage credit investment, whether it's loans or agency, non-agency MBS.

So I think, for the near term, we see that 60/40 mix as sort of where we're looking to maintain..

And on the stock buyback issue, it looks like you guys are trading roughly 77% of tangible book value right now, where some of your competitors are more anywhere from the low to mid 80s to low 90s.

Do you consider them below 80 where you are now is something where aggressive stock buybacks make more sense, and are there any limitations you have in terms of stock buybacks?.

Yes. I'll give you my thoughts. I mean, clearly when you have the stock trading below 80%, there is a significant accretive opportunity when you buy stock back.

So relative to where we were in August and September when the stock price was performing pretty well and there was definitely a pretty good bid in the market for it, we'd be certainly more aggressive in buying stock back where it's trading now than where it was for the majority of the third quarter.

In terms of limitations we have, I mean, it really comes back to Doug Harter's question of looking not only at the short-term opportunities of where our incremental investments in agency and mortgage credit, but also in looking at sort of more intermediate horizon opportunities in terms of looking for ways to get more involved in the loan and securitization business and making sure we have ample additional available capital to move into those businesses with the appropriate scale.

So, I think we're going to continue -- as you know, we've been pretty active over the years in repurchasing our shares. We don't anticipate that changing, obviously, when the stock trades below 80%, if there is a strong case to be made to increase our share repurchases unless there is some really compelling other investment opportunities..

Aren't you locked out for certain periods around the earnings and stuff like that? Don't you have like you can't buy before and right after -- a couple days after or is that incorrect?.

Oh, yes. There are some technical restrictions, I guess, I mean, in the big picture. We're not buying stock back today..

I don't think you can buy tomorrow or the next day probably either, right? I don't know what your internal rules are, but that's some of the banks I've been on that. It's kind of three weeks or four and a couple days after kind of thing..

Yes. I will rather not get into like the day-by-day trading activity. But in terms of the volume that we're allowed to purchase on a daily basis, there are certain days, you're right, that we're not going to be repurchasing stock.

But in general, certainly given the level of repurchase activity we've had in the past, we've been able to work around those constraints where necessary..

And my last question is you may not know this off the top of your head, but what is your roughly -- when you add in all the money you're paying the external manager, what is your roughly expenses as a percentage of total equity, not even common, common plus preferred equity? Do you know what that number is? Is it like 1%, 2%, 3%, do you have any idea what your numbers are so I can compare them with other people?.

Well, we can certainly look at the income statement that we report, and I guess, we could -- it's not --..

It's a function of your total expenses over all your equity common and preferred, including what you pay the external manager?.

So if you look for the nine months ended September 30 on the income statement, we have $10.7 million of total operating expenses, and you'll see that a little under $6 million is the management fee and $4.7 million, $4.8 million are other general and administrative expenses.

So we could certainly annualize that to $13 million, $14 million and then divide by total capital. So, you're in the 2% neighborhood..

The next question comes from Jack Marino with Colorado Wealth Management. Please go ahead..

Yes, I got a strategic question for you guys.

Can you talk a little bit about your [indiscernible] relative to the legacy non-agency RMBS?.

Okay. So I mean, we broke up a little bit there.

I'm sorry, but I think the first part of your question had to do with credit risk transfer securities, is that correct?.

Yes.

How would you compare the attractiveness on the CRTs relative to the legacy non-agency RMBS?.

These credit risk transfer securities, especially the ones issued by Fannie Mae and Freddie Mac, are in general lower yielding in some cases than some of the legacy non-agency securities.

So they would require additional repo financing, right, incremental leverage relative to what we currently have to we currently choose to use when we buy legacy non-agency RMBS. On the other side, to date, the sorts of credit risk transfer securities have been created are not good lead assets the way the legacy RMBS are as well.

So, our investment in those would have to be limited. But in terms of looking forward, and I guess the nature of your question being strategic, it certainly is an area we're focused on because I think that the one thing that we know is happening is the pool of legacy RMBS is getting smaller.

And the second thing that's happening is we know there's a lot of interest in looking for ways to the structured credit risk transfer that will be attractive assets for REITs. So, it certainly is something we're focused on. With your second part of the question or maybe I could have Brett give you more insight into that if you like..

I think Joe did a pretty good gave you a pretty good explanation of what's going on in the market. I mean, obviously, the credit risk transfer market is a continuing to grow market and in a way to be involved in mortgage credit on a going forward basis.

Both Fannie and Freddie, as Joe just discussed looking at ways to create these assets in a way that will make the assets good assets for REITs in order to encourage more REIT participation currently, although some REITs are involved, it's on a very limited basis.

But again, within the idea that toward being an investor in mortgage credit, the credit risk transfer assets is definitely a growing part of the market and a part of the market that we're looking at. Also, some of the larger banks, for example, JPMorgan has done some securitization within the credit risk transfer space as well.

So, I think that, that is a trend that is going to continue from the private banks moving forward. So again, I think we do see this as an interesting asset class for us to be involved with, and it is an asset class that we are closely monitoring for in order to be involved with it..

Okay.

So, next question was as the credit risk transfer is away from the GSEs, do you see any risk that the Federal Reserve becomes less accommodative of mortgage rates, because it seems like the pressure they put lowering mortgage rates caused house prices to go up and improve the performance of non-agency RMBS?.

It's certainly a good question. I don't hope I have an answer any better than you would. I think the idea of bringing private capital into the residential mortgage market is a goal certainly that's been stated. I guess you can pick the case that the more private capital there is, that somehow the fed might care less about the risk to that capital.

I don't see that as really a pressing risk, but I certainly understand that perspective, but it's not something that at this stage I would have a lot of concern about..

And then, I noticed you guys have been issuing new shares of ANHC and with the dividend yield on those running 1% lower than ANHA the possibility of a call on ANHA within the next few quarters?.

This is Lloyd. First, we don't comment about calling securities. Hope you can appreciate that's not something we do, we do it through a press release if it were ever to be done.

We're issuing the Series C preferred shares primarily because they have a lower cost of capital than our common stock right now, and they're clearly accretive to the income of the common stockholders. They do add a little bit of leverage increase embedded in the capital structure.

But as been said, even issuing Series C preferred shares and repurchasing common stock is an accretive transaction for our common shareholders.

So on the whole, we will continue to issue and if you've read the aftermarket perspective supplement, which we have filed in, I guess back in April, we will be continuing to issue Series C shares whenever we think the price is attractive and accretive to the common stockholders..

The next question comes from Arthur Lipson with Western Investment. Please go ahead..

I'm really kind of concerned about the drop-off in the share repurchases. If you go back to June 2014, the book value was 6.26, it's now 6.25 basically unchanged, but I think the accretive value of repurchases is $0.34. So if those repurchases hadn't been in place, we'd have a significant drop in book value.

Secondly, I think they show real commitment on the part of management, which I appreciate, to repurchase shares at discount and to attempt to narrow the discount. I'm hoping that the repurchase activity will go back to previous levels.

Also, I know the comments about mood swing that the discount increased during the past month, but yet there was only 80,000 shares repurchased in the past month, a really negligible level compared to the 2 million shares a quarter or 7 million shares a quarter that were done in earlier quarters. Thank you. That's the comments..

[Operator Instructions] Showing no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Lloyd McAdams for any closing remarks..

Everybody on the call, thank you very much. And those of you who have dialed in to listen to the call later or over the next several weeks, we thank you for participating also. We look forward to for being with us next quarter. And for those of you who are reading the transcript, if you have questions, please let us know.

And with that, we thank you very much for your participation in our presentation and for your support to Anworth. We appreciate all your suggestions. Thanks very much. Have a good day..

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..