Welcome to the AG Mortgage Investment Trust First Quarter 2013 Earnings call. My name is Christine and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Lisa Yahr. You may begin.

Thanks, Christine. Good morning, everyone, and welcome to AG Mortgage Trust Q1 2013 earnings conference call. Joining me on today's call are David Roberts, our Chief Executive Officer; Jonathan Lieberman, our Chief Investment Officer; and Frank Stadelmaier, our Chief Financial Officer. Before we begin, I would like to review our Safe Harbor statement. Today's conference call and corresponding slide presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such statements are intended to be subject to the protection provided by the Reform Act. The Company's actual results may differ materially from those projected due to the impact of many factors beyond its control. All forward-looking statements included in this conference call and the slide presentation are based on our beliefs and expectations as of today, May 6, 2013. Additional information concerning the factors that could cause actual results to differ materially from those contained in the forward-looking statements are included in the risk factors section of the Company's periodic reports filed with the Securities and Exchange Commission. Copies of the reports are available on the SEC's website at www.SEC.gov. Finally, we disclaim any obligation to update our forward-looking statements unless required by law. With that I will turn the call over to David Roberts.

Good morning, everybody. This quarter AG Mortgage Investment Trust had core earnings of $0.75 per share, compared to $0.85 last quarter. Jonathan and Frank will discuss our portfolio strategy and performance in detail but I wanted to make three comments about our core earnings. First, we added materially to our hedges during the quarter, lowering our interest-rate exposure. Second, we purchased some very attractive credit positions, which had the effect of lowering our average leverage in the quarter. Third, we realized an after-tax gain of $0.14 per share in the quarter from selling one of those credit positions effectively bringing forward core earnings. Given the context of these factors, we are very pleased with our core earnings results. In terms of our dividend, based on current conditions and everything we see today, we do not anticipate a change in our dividend rate through the remainder of calendar 2013. Finally, we seek to create value for our shareholders not only through our dividend stream but through achieving a premium valuation. Accordingly, our strategy for 2013 is to continue to add resources to the Angelo, Gordon platform to take advantage of what we see as a long-lasting opportunity in whole loan residential mortgages, both in secondary trades and originations. With that I will turn it over to Chief Investment Officer, Jonathan Lieberman.

Thank you, David. I am going to be referring to our slide presentation, which has been posted to our website. So, first I’d just like to lead off with some highlights set forth on slide number three for Q1. For the quarter, as David mentioned, we generated $0.75 of core earnings and also retained undistributed taxable income of over $2.10 per share. As I’ve mentioned in previous calls, we believe that earnings retention provides the Company with two important sources of strength for our shareholders. It provides us with the cheapest source of capital for reinvestment and it also provides dividend durability. For the quarter, book value at quarter end stood at $23.16, a decline of a little over a 1% from year-end. The decline was primarily a function of soft performance in Agency MBS into quarter end. Book value has since nicely rebounded, as asset prices in both Agency MBS and credit appreciated into April and this past week, the first week of May. Agency values are up over about 1% and credit asset values are up from 2% to 4% over the past five weeks. As – moving to slide number four – sorry slide number five – as the slide will show our portfolio is approximately $5.1 billion. We continue to execute our strategy of systematically rotating more capital into credit assets, while paring back our overall Agency MBS exposure. Our investment portfolio grew from $4.9 billion to $5.1 billion over the quarter and we continue to shift the portfolio towards credit assets. As of March 31, approximately 26.5% of our portfolio is allocated to credit, with the remaining 73.5% deployed into Agency MBS. Prepayments speeds for Agency MBS continue to track with anticipated prepayments speeds. Our Agency book paid approximately 8.8% CPR for the quarter, with…

Good morning. For the quarter, we reported net income of $13.4 million or $0.49 per fully diluted share. We reported core earnings of $20.5 million or $0.75 per fully diluted share versus $19.8 million or $0.85 per share in the prior quarter. The decrease in core earnings was primarily driven by increased costs from our hedging and the effect of levered return on our assets. The yield on our assets increased from 3.37% to 3.45%. This was primarily the result of an increase in our credit portfolio, where yields are higher, from 22.2% of assets to 26.5% of total assets. The weighted average cost of our swaps increased during the period from 0.35% to 0.49%. The increase came from the addition of $538 million of notional interest rate swap contracts. This increased our total cost of funds from 1.11% last quarter to 1.27% this quarter, and was the primary driver of the decrease in weighted average NIM from 2.26% to 2.18%. We used less leverage on our credit assets, which decreased our average leverage during the quarter to 5.37 times from 6.02 times. Our NIM at quarter end was 2.25 and our leverage at quarter was 5.38 times. In addition to the $0.75 of core earnings, our GAAP net income of $0.49 per share includes $0.10 per share of net realized gains and $0.36 per share in unrealized losses. The unrealized losses were primarily attributable to $1.15 per share mark to market losses on our Agency portfolio, offset by mark to market gains on our credit portfolio of $0.60 per share and $0.19 per share on our interest-rate swaps. There is a new line item on our income statement provision for income taxes. As we mentioned earlier, we disposed of an investment in whole loans recording a substantial gain. To comply with REIT dealer rules, we conducted this sale through a taxable REIT subsidiary. The provision relates predominantly to the tax on the gain on sale and is not recurring. US GAAP requires the gain and the related tax to be presented on two separate line items of our income statement. Throughout the presentation, where gains on sales are identified as net, the tax has been deducted from the gain. The net gain on this transaction was approximately $0.14 per share. Our G&A, as a percentage of equity continued to decrease changing from 1.26% in prior quarter to 1.15% this quarter. The business is at a point where the cost structure scales better and the decrease is primarily the result of the December capital raise being an average capital for a full quarter. We continue to maintain undistributed earnings. At quarter end, the amount stood at $2.12 per share. During the quarter, our taxable income and dividend per share were approximately the same. The per-share change in undistributed was primarily the result in new shares sold through our ATM program and warrant issuances. This concludes our prepared remarks and we would now like to open the call for questions.

Thank you. We will now begin the question-and-answer session. (Operator Instructions). And our first question is from Douglas Harter of Credit Suisse. Please, go ahead. Douglas Harter – Credit Suisse : Thanks. I was hoping you guys could talk a little bit more about the pipeline you have for either direct commercial loans or starting to put more residential – new production residential loans back on the balance sheet?

On the commercial side Angelo, Gordon has a large brick and mortar real estate team of over 30 professionals. And that team has been sourcing commercial loan opportunities for us. We have several we are looking at. It’s just difficult to determine the timing but we do hope in the next several months to begin to close several of the deals that we have been engaged and in dialogue and provided term sheets for execution. On the residential side, we have plugged in Jason Biegel and recently are propping up his business line with additional resources. We think over the next, say, 30 to 90 days, we’ll be in a position to start to basically put some more capital to work. We have taken some runs at several different assets, and we’ve been reluctant to rush things too rapidly before we have all of the nuts and bolts of the operation in place. But we are looking. We are active in the markets on a daily basis. We have been seeking out product, and we just don't have anything that is ready to cross the finish line at this moment. Douglas Harter – Credit Suisse : Great. I guess back on the commercial, would you continue to look towards mezzanine loans or would you do more senior? I guess how are you thinking about where the opportunities lie?

We would look at stretch senior, repositioning senior, and mezzanine credit. Douglas Harter – Credit Suisse : Great, thank you.

Thank you. Our next question is from Trevor Cranston of JMP Securities. Please, go ahead. Trevor Cranston – JMP Securities: Hi. Thanks. Just a follow-up on the last question a little bit. Is most of your new investment activity on the credit side really focused on the whole loan space right now? Are you still finding kind of attractive pockets of investments in the legacy security side also?

All of the assets that were added this past quarter were security or security like participations. They were a mix of new securitizations, legacy securitizations and some attractive kind of semiprivate securitizations. The whole loan activity, the only activity was the opportunistic sale of residential whole loans in the quarter. We did seek out several packages of whole loans but we did not achieve an execution at a level that was attractive to the REIT. Trevor Cranston – JMP Securities: Okay, that’s helpful. On the Agency side, you guys shifted a little bit away from the 15 years into some longer duration securities this quarter. Should we expect that kind of incremental shift to continue? Or are you kind of happy with the split you have in the Agency portfolio right now?

There may be some incremental paring of the 15s but I would say that the vast majority of the 15-year product that we exited, we exited for – either we thought that we were achieving attractive execution on that product or we anticipated we sold the product in anticipation of faster prepays on those individual assets. We also liked adding some duration to the Agency book and locking in hedges at the market levels. So, for the 30-year product we added, we like the timing, we like the ability to hedge and we like the specific assets that we were able to add to that Agency book. Trevor Cranston – JMP Securities: Okay. Just last one, you mentioned you sold some inverse IOs in the quarter. On page eight is the remaining interest only position you show there, is there still any inverse IO in that or is that just regular IO securities?

I would say probably the preponderance of it is still inverse IO. Trevor Cranston – JMP Securities: Okay.

And it’s – a lot of is story inverse IO, very – a loan balance, CQs, very, very stable prepayment profile, very, very good carry. We basically exited out of any sort of IO that we thought had material interest rate risk and special prepayment – sorry, prepayment risk, not interest-rate risk. And we – part of the rationale for also increasing our hedges was to make sure that we had some interest-rate protection against the inverse IO book. Trevor Cranston – JMP Securities: Okay, great. Thank you.

Thank you. Our next question is from Stephen Laws of Deutsche Bank. Please, go ahead. Stephen Laws – Deutsche Bank: Hi. Good morning and thanks for the detailed shareholder presentation on the website. I just wanted to touch base on the commercial loans. You know I know it was touched on earlier but can you talk about how big of a percentage you think the commercial loan will be at any point? And do you intend to put leverage on there? Are you working on any financing facilities that would enable you to add some leverage to that asset class?

Our expectation is that we would like to add certainly a material amount of capital, certainly somewhere 5% to maybe 15% of the portfolio in commercial loans. When we have added significant assets, it will give us the critical mass to put the proper financing arrangements around that asset class and create some accretive earnings for our shareholders. But it is a little bit of a chicken and egg that we have to accumulate sufficient volume and we can basically at that point work with our lenders to basically put those assets on – in a levered position. Stephen Laws – Deutsche Bank: Great. Thanks for the color. Appreciate it.

Thank you. Our next question is from the line of Mike Weidner of KBW. Please, go ahead. Mike Widner – Keefe, Bruyette & Woods: Hey, guys. Good morning. Let me just follow up on some of the comments you made about the credit environment. In particular, I guess, I think what you said was you expected the Obama administration to continue making credit more available to homeowners and just wondering if you could talk a little bit about how maybe that might work together with QRM rules, which arguably actually make it more difficult to get any sort of nongovernment mortgage going forward. But just wondering how you see that playing out, in particular, how you see your involvement in the reprivatization, as everyone calls it, of the mortgage market?

Look. I think the Administration, Treasury, the Fannie, Freddie, they would like to push credit or make sure that there is credit available to more than just 750 FICO and up borrowers. They’ve – we’ve seen them start to respond by the lack of credit availability for what they would consider still high credit quality borrowers, minorities and other interest groups, who seem to have less access to the market place, and they have done so by basically tailoring some of the rules. Recently, they elected not to increase the guaranty fee for Ginnie loans and that led to a selloff in the IO market for Ginnie but that is a direct response by HUD to basically make sure that credit is available at the cheapest possible cost to some of the lower income borrowers. The Consumer Protection Bureau elected not to codify a hard down payment number and instead concentrate on the ability of the borrower to be able to have income sufficient to pay the mortgage over its life. Once again, a response to different housing coalition members making sure that basically large down payments do not preclude different groups in society from getting financing. And then, you continue to see them press on on lenders to make credit available. So, our expectation is those trends will continue. To your point specifically about QRM, QM, I know there’s discussions about making the rules consistent. I think there’s maybe a desire in Congress to review and revisit those points specifically because they are finding it very, very difficult to implement. But I think that you are going to see a renewed focus there in trying to open up the credit box and push credit and you have seen members of the administration come out as well as the Fed come out and advocate for further opening the credit box and I think that they’re trying to come up with methods to balance that opening of the credit box to 700, 720 FICO, 680 FICO borrowers, keep the down payment under – somewhere under 20% and open up the market to different population groups like you see on the auto finance side. Mike Widner – Keefe, Bruyette & Woods: Yes, thank you for that. And I think with all of the conflicting sort of messages that the administration has sent to banks and lenders I guess it is probably continued slow progress but definitely appreciate your comments. I guess then the other question is, as you talk about continuing to sort of reallocate towards the credit side of the portfolio as the opportunities come about, do you see yourselves participating in the whole loan and securitization market and how do you see that part of the business progressing going forward?

When do you foresee ourselves participating in the whole loan market, we – securitization or some form of financing term financing would be part of the planned. We don't believe that we need to rush into the market place and stand up a vehicle and stand ourselves up in the marketplace. We believe that there is still time here to establish the right platform, the right brand, the right systems to basically access product in an efficient manner, and we don't want to get caught up in a rush into the market place and just be kind of a bid out there. Mike Widner – Keefe, Bruyette & Woods: Got you. Then, one final one, if I could. If maybe we could talk a little bit about the dividend. And you guys, I think, very clearly addressed that core earnings power is about $0.75, $0.10 of net gains realized gains on sales and that appears to be part of the strategy. But just wondering if you could comment a little bit on that and in particular how you see dividend policy with respect to core earnings versus the combination of core and other earnings like gain on sale and how you might see those going forward?

Sure. It’s David Roberts speaking. As we said before, over a longer period of time, we’d expect that core earnings and dividends will move in the same general direction. I think if you look at it, our core earnings have generally been above our dividend rate. This quarter they were a little bit below but as you pointed out and as I pointed out, some of that was moving gains or core earnings into gains. So, as we look at the storehouse we have of undistributed income, as we look at the portfolio, it is really what I said, based on everything we see now, we think the current dividend rate makes sense and it is our current intention to keep it for the remainder of the year. Mike Widner – Keefe, Bruyette & Woods: Well, great. Appreciate the comments and the clarity. Thanks.

Thank you. Our next question is from Dick Agrawal of Wells Fargo Securities. Please, go ahead.

Hi. Good morning, guys. I got a question on 5-5, you paint sort of a weaker economic environment with improvement in HPA. Can you talk about some of your thoughts around the weaker economy affecting the favorable housing outlook?

Sure. I mean the economy clearly is struggling to gain significant traction to accelerate growth at 3%, 4%, 5%, as it historically has. But the headwinds are fairly significant that you’re seeing US corporations struggle with earnings due to pressure in Europe. You’re seeing exports decelerating as our markets once again are struggling. You’re seeing China try to transition to an organic growth model, as opposed to an export model. And so, you’re left with predominately a domestic economy here in the United States that is trying to accept some level of austerity at the federal level. We’re not painting a picture of basically the US economy going into recession but what we are painting is an economy that is basically growing at an organic speed that is just much slower and that where basically you have significant headwinds and the fact that basically our citizens need to compete against basically wage levels that are now being set worldwide. And until there is meaningful increases in basically meeting an income in the United States and/or significant spending by corporations or government, you’re not going to see a picture of a robust US economy. That said, housing is in a different place because we have chewed through over 6 million units of surplus housing in the past four, five, six years. And now, supply and demand is actually returning to a synchronized level. They’re not building a tremendous number of new homes yet. Most of the building has occurred in the multifamily sector. You’re not seeing a dramatic pickup in purchase money and you’re seeing investors lead a charge to push home prices back to a level of basically attractive valuation. So, housing, we believe, has somewhere between 5 and 10 points of additional incremental gain. You have very low interest rates. You have organic growth; basically you have household formation has resumed. And you are now seeing people being able to move across the country to where jobs are. And so, all of that is very healthy, and we think that we have one to two to three years of healthy rebounding in the housing markets with low rates, good supply demand, no inflation that would help housing prices and no organic growth in median income. But generally speaking at least on the front of lower interest rates and supply demand, we think the markets are very healthy for housing.

So, I appreciate your comments. What would you think you would need to see in the economy to cause your outlook to ratchet down?

I think we would need to see a significant decline in consumer spending or some impact out of the Washington, DC. Those would be the two areas that we would keep a close eye on. But Washington, DC, probably being even the biggest driver here that if they engage in a much more forceful level of austerity beyond the sequester that you could see a significant abatement in demand and income levels.

Okay. Well, I appreciate your comments. Thank you.

Thank you. (Operator Instructions). And our next question is from Boris Pialloux of National Securities. Please, go ahead. Boris Pialloux – National Securities: Hi. Thank you for taking my questions. I have three quick questions. The first one is you have an investment in (inaudible) of $7.4 million, what is it exactly?

That’s a credit investment we made in commercial real estate lending that is done through a partnership with some other Angelo, Gordon entities. So, all of – think of it like a CMBS fund that’s held down below and all of the accounting flows up through core earnings the same.

Okay. The second is on your – on page 20 of your presentation, you mentioned that you’re expecting a much easier or an easing of capacity constraints. (Inaudible) how do you view that for your low prepayment pool investments? Would that have an impact, if some (technical difficulty) actually do more refinancing? And how would you mitigate this type of risk?

We do believe that there has been additional capacity put into the lending space. We do believe that basically there has been new entrants into the lending space that will lead to we believe higher levels of organic prepayments that will be more consistent with the way the mortgage market had traditionally operated. So, some of the ways you see this in the day to day is you see more and more lenders offering no-cost refinances. So, if you turn on your TV set or you go to websites, you will see more and more lenders offering to basically take on the cost of the refinancing on behalf of borrowers, given the record profitability. You’ll also see lenders increasingly target what I would call higher hanging fruit, low balance loans and other loans, which previously maybe they did not target as much because the profitability of those loans was not as great as some of the higher coupon product and some of the higher dollar price bonds. We have tried to mitigate some of that risk by going into new production that does not require as large a pay ups as, maybe some of the certain types of spec pools, where you could pay 1, 2 points in addition of premium to acquire pools that theoretically have better protection against refinance activity. Boris Pialloux – National Securities: Thank you. And the last question I had is how do you view the readings of the very low CPI, I mean, since the downtrend in the CPI numbers, is that – would that have an impact on the sale at one point if you end up with a CPI closer to zero?

Well, I mean, I think the Fed is specifically targeting a 2% inflation rate. It’s kind of – they’re kind of caught in between that they like the fact that there is little inflation in the marketplace and that the market seems to correct very nicely. But that shows you once again how tight household spending is that every time basically gasoline prices go up, the consumer decelerates their spending and then the economy comes back into kind of sync and then you see oil prices go down and then we go back the other way. That is actually very, very healthy that the consumer is watching their pocketbook. But at the same time, it is abundantly clear that the Fed would like to generate some level of inflation to basically make it easier for households and for the government to meet their debt service requirements and to pay back all of this debt with basically haircutted money. And so ,you –theoretically, if CPI continues to track down that would be very supportive of more QE and ultimately their goal is to create inflation. Boris Pialloux – National Securities: Okay. Thank you.

Thank you. We have no further questions at this time.

Thank you.