Everything about Hatteras Financial Corp. (NYSE:HTS)’s operations


Dallas, Texas 09/10/2013 (Financialstrend) – The Hatteras Financial Corp. (NYSE:HTS) shares opened at a price of $18.33 on Monday, touched an intraday high of $18.45 and closed at $18.21. Approximately 0.800 million shares exchanged hands on Monday while the average volume of HTS shares that were traded over a 30 day period was 1.23 million. The company has a market price of $2.01 billion.

Hatteras Financial Corp. (NYSE:HTS) was formed on 19 September 2007. It is an externally-managed REIT. The company primarily invests in single family residential-mortgage securities. These mortgage securities are either issued or guaranteed by a U.S government agency such as Ginnie Mae- the Government National Mortgage Association. The securities could also be backed by Fannie Mae- Federal National Mortgage Association, the U.S government sponsored entity or even by Freddie Mac. This company is advised and externally managed by Atlantic Capital Advisors LLC, its manager.

The focal point

HTS is focused on various agency securities. These agency securities consist of numerous mortgage loans that have very short durations. The agency securities are made up of mortgages that have interest and principle payments that have been guaranteed by Federal National Mortgage Association, Government National Mortgage Association or Freddie Mac.  The company invests in adjustable rate agency securities as well as fixed rate securities. ARM’s or adjustable rate mortgages are those mortgages that work on floating interest rates. These interest rates get reset according to a certain time schedule such as annual, quarterly or on a monthly basis.

These are based on an index that has been specified. This could be a 12 month moving-average of a 1-year constant maturity U.S Treasury rate or the LIBOR which is the London Interbank Offered Rate. The ARM’s that the company generally invests in are sometimes called hybrid ARMS. These have interest rates that are steady for the initial period. This could typically be 3, 5, 7 or 10 years. Post that it gets reset to an increment over the pre-determined interest-rate index.