Arlington Asset Investment

Arlington Asset Investment Corp. is a mortgage real estate investment trust headquartered in McLean, Virginia.

Arlington Asset Investment Corp.
TypePublic company
NYSE: AAIC (Class A)
Russell 2000 Index component
IndustryReal estate investment trust
Founded1989 (1989)
HeadquartersMcLean, Virginia, United States
Key people
J. Rock Tonkel, Jr., President & CEO
Richard E. Konzmann, CFO
Daniel E. Berce, Chairman
Revenue $123 million (2019)
$11 million (2019)
Total assets $4.000 billion (2019)
Total equity $327 million (2019)
Number of employees
11 (2019)
Websitewww.arlingtonasset.com
Footnotes / references
[1]

The company borrows money, primarily via short term repurchase agreements, and reinvests the proceeds in asset-backed securities. As of December 31, 2019, 94.2% of the company's assets were mortgage-backed securities issued by either Fannie Mae or Freddie Mac. The company generates profits from the net interest spread between the interest earned from its assets and its borrowing costs, which is amplified from the use of leverage. As of December 31, 2019, the company had a debt-to-equity ratio of 11.2. As of December 31, 2019, the weighted average days to maturity of its repurchase agreements was 23.7 days.

History

The company was founded as Friedman, Billings, Ramsey Group Inc. in 1989 by Emmanuel Friedman, Eric Billings, and Russ Ramsey.

In 1997, the company became a public company via an initial public offering, raising $206 million.[2]

Ramsey left the company in 2001. Following the early 2000s recession, FBR Group invested heavily in subprime mortgages. During the subprime mortgage crisis, the company incurred severe losses related to its underperforming mortgage origination platform and widespread problems in subprime mortgage lending, which led to a sale of ownership in FBR's subprime subsidiary, First NLC Financial Services, in the summer of 2007.[3]

Friedman left FBR Group in 2005.[3]

In June 2007, FBR Capital Markets was formed through a corporate spin-off from FBR Group.[4]

From its founding through 2008, FBR Group was taxed as a real estate investment trust. Starting in 2009, the company converted to a C corporation to use its net operating loss carry-forwards and net capital loss carry-forwards to shield substantially all of its income from income taxes.

In May 2009, FBR Group sold a portion of its investment in FBR Capital Markets for $72.5 million.[5] In October 2009, the remaining investment in FBR Capital Markets was sold for $84.1 million.[6]

In June 2009, the company changed its name to Arlington Asset Investment Corp.[7][8]

In October 2010, the company settled a shareholder lawsuit in which it was accused of paying substantial bonuses to executives despite poor performance.[9]

In June 2014, Eric Billings stepped down as CEO and J. Rock Tonkel, Jr. was appointed CEO with Billings continuing as Executive Chairman. Tonkel previously served as the company's President and Chief Operating Officer.[3]

Effective in 2019, the company converted back to a real estate investment trust after it had used its net operating loss carry-forwards.[10]

Effective December 31, 2019, Eric Billings retired.[11]

Sponsorship

The company sponsored the Phoenix Open PGA golf tournament held in Scottsdale, Arizona from 2004 until 2009.[12]

References
  1. "Arlington Asset Investment Corp. 2019 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. Heath, Thomas (December 23, 2008). "Last of FBR's Founders to Retire as CEO". The Washington Post.
  3. Bhattarai, Abha (June 12, 2014). "FBR co-founder steps down as CEO". The Washington Post.
  4. Lazo, Alejandro (June 8, 2007). "Spinoff From FBR Gains 6% In Debut". The Washington Post.
  5. "Arlington Asset Investment Corp. Closes Sale of FBR Capital Markets Stock" (Press release). PR Newswire. May 20, 2009.
  6. "Arlington Asset Investment Corp. Announces Closing of FBR Capital Markets Stock Sale" (Press release). PR Newswire. October 28, 2009.
  7. Ruiz Switzky, Bryant (June 10, 2011). "FBR Capital Markets changes name — again". American City Business Journals.
  8. "Arlington Asset Investment Corp. Announces Shareholder Rights Plan and Reports Results of Annual Shareholders' Meeting" (Press release). PR Newswire. June 5, 2009.
  9. Ruiz Switzky, Bryant (October 11, 2010). "Arlington Asset Investment settles shareholder lawsuit". American City Business Journals.
  10. "Arlington Asset Investment Corp. to Elect REIT Status" (Press release). PR Newswire. December 27, 2018.
  11. "Form 8-K". U.S. Securities and Exchange Commission.
  12. Casacchia, Chris (December 9, 2009). "Waste Management taking over FBR Open sponsorship". American City Business Journals.
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