Portfolio Composition and Capital Structure - As of December 31, 2024, the portfolio composition included 87% Agency assets, 9% Residential Credit, and 4% Mortgage Servicing Rights (MSR) with respective capital allocations of 59%, 22%, and 19%[25]. - The company had $65.7 billion in repurchase agreements outstanding as of December 31, 2024, indicating significant leverage in financing its investments[34]. - The economic leverage ratio was 5.5:1 as of December 31, 2024, compared to 5.7:1 in 2023, reflecting a conservative approach to leverage management[40]. - The capital structure includes a mix of debt and equity funding, with a focus on maintaining liquidity and meeting financial obligations during market stress[32]. - The company aims to maintain an economic leverage ratio no greater than 10:1, with actual ratios consistently below 8:1 since the financial crisis[38]. Investment and Risk Management - The company issued 21 OBX securitizations backed by $11.0 billion of residential whole loans during the year ended December 31, 2024, demonstrating active capital market engagement[37]. - The company targets a diverse range of assets, including Agency MBS, residential mortgage loans, and MSR, to optimize risk-adjusted returns[31]. - The risk management framework includes a firm-wide risk appetite statement, focusing on income generation and capital preservation[26]. - The company is committed to effective risk management, focusing on identifying, measuring, and controlling key risks[44]. Human Capital and Diversity - As of December 31, 2024, Annaly Capital Management had 191 employees[51]. - 57% of the Operating Committee and 61% of the overall population identified as either female and/or racially/ethnically diverse[56]. - The company has hosted over 50 community building events in 2024 to promote diversity and inclusion[56]. - Annaly's employee compensation program includes base salary, annual incentive bonuses, and stock-based awards[58]. - The company offers a range of benefits including health coverage, 401(k) plans, and mental health support initiatives[60]. Regulatory and Compliance Risks - The company is subject to complex and evolving legal and regulatory requirements, which expose it to increased compliance and legal risks[89]. - The company has submitted a claim for no-action relief from the Commodity Pool Operator registration requirement, believing it meets the criteria set forth by the CFTC[72]. - The company operates as a licensed mortgage aggregator and master servicer, complying with various federal and state regulations[71]. - The company is subject to numerous federal and state data privacy laws, including the Gramm Leach Bliley Act, which regulates customer information confidentiality[150]. - The SEC has established a task force to address climate-related disclosures, which may impact the company's reporting and compliance obligations[146]. Financial Performance and Market Conditions - The company may incur substantial losses if borrowing costs increase due to its leverage strategy, which is fundamental to its investment approach[95]. - A significant portion of the company's assets are longer-term, fixed-rate interest earning assets, while a significant portion of its borrowings are shorter-term, floating-rate borrowings, which can adversely affect profitability during rising interest rates[106]. - Volatile market conditions for mortgages and mortgage-related assets can materially affect the company's results of operations and financial condition[102]. - The profitability of securitization transactions is significantly influenced by the prices investors are willing to pay for mortgage-backed securities, which are affected by market forces[123]. REIT Qualification and Tax Implications - The company intends to distribute at least 90% of its REIT taxable income to stockholders to maintain REIT status, aiming for 100% to avoid taxation[78]. - The company must maintain its qualification as a REIT, requiring at least 75% of gross income to come from real estate sources and 90% of REIT taxable income to be distributed to stockholders[160][164]. - Failure to maintain REIT status could result in significant income taxes, reducing available funds for investments and distributions, adversely affecting equity value[162]. - The company may face adverse tax consequences if it fails to maintain its qualification as a REIT[89]. Strategic Initiatives and Future Outlook - The company may enter into new lines of business or engage in strategic initiatives, including acquisitions[93]. - The company expects to increase its exposure to MSR-related investments in 2025, which are highly illiquid and subject to numerous restrictions[199]. - The company may experience volatility in its periodic net income due to accounting elections related to fair value changes of certain instruments[132]. - The company may be unable to profitably execute future securitization transactions due to competition and market conditions affecting mortgage loan pricing[122].

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Core Viewpoint - Mortgage REITs, particularly Annaly Capital Management, are experiencing fundamental improvements in investment spreads and have a positive investment outlook due to anticipated federal fund rate cuts in 2025 [1] Group 1 - Annaly Capital Management (NYSE: NLY) is highlighted as a key player in the mortgage REIT sector [1] - The investment outlook for mortgage REITs is favorable, driven by expected reductions in federal fund rates [1] - The improvements in investment spreads are a significant factor contributing to the positive outlook for these companies [1]

Group 1 - Annaly Capital Management, Inc. (NYSE: NLY) stands to benefit from lower interest rates projected for 2025 due to its portfolio of Agency mortgage-backed securities [1] - A recent shift in central bank policy may impact the financial landscape, influencing investment strategies [1] Group 2 - The article emphasizes the importance of monitoring high-tech and early growth companies for potential investment opportunities [1]

Core Viewpoint - Annaly Capital Management (NLY) reported its fourth-quarter 2024 results, with adjusted earnings surpassing estimates but revenue falling short, highlighting its resilience amid economic uncertainties [1][2][6]. Financial Performance - Adjusted earnings available for distribution (EAD) per average share were 72 cents, up from 68 cents year-over-year [6]. - Net interest income (NII) reached $187.3 million, a significant recovery from a negative NII of $53.6 million in the prior-year quarter [6]. - As of December 31, 2024, the book value per share was $19.15, down 1.5% from $19.44 a year earlier [7]. Investment Strategy & Portfolio Diversification - Annaly's investment portfolio totaled $80.9 billion, including residential credit, mortgage servicing rights (MSR), and agency mortgage-backed securities (MBS), aimed at reducing volatility and interest rate sensitivity [9][10]. - The company exited its Middle Market Lending portfolio and commercial real estate business to focus on its core housing finance strategy [10]. - The inclusion of MSRs is significant as they tend to increase in value with rising interest rates, providing a hedge against declines in agency MBS values [11]. Liquidity Position & Capital Distribution - Annaly maintained a strong liquidity position with an unencumbered asset portfolio of $5.8 billion, enhancing its ability to respond to market conditions [12][13]. - The company boasts a dividend yield of 13.06%, higher than the industry average of 11.39%, with a payout ratio of 98% [13]. Market Outlook - The outlook for agency MBS is improving, with management optimistic about favorable dynamics in 2025, including attractive returns and a better supply-demand balance [16][17]. - The Federal Reserve's interest rate cuts in 2024 positively impacted NII, which rose to $247.8 million from a negative NII of $111.4 million in 2023 [19]. - Mortgage rates are expected to decline gradually, which may enhance purchase originations and refinancing activities, benefiting Annaly's book value [20][22]. Valuation - Annaly is currently trading at a premium with a forward price-to-tangible book (P/TB) multiple of 0.93X, compared to the industry average of 0.88X [23]. - Despite premium valuation, the company's strong growth potential and favorable outlook make it an attractive investment for long-term returns [26][28].

Core Viewpoint - Annaly Capital Management, Inc. (NLY) reported strong fourth-quarter 2024 adjusted earnings, surpassing estimates, but faced a decline in annual earnings compared to the previous year. Financial Performance - Fourth-quarter adjusted earnings available for distribution (EAD) per share was 72 cents, exceeding the Zacks Consensus Estimate of 67 cents and up from 68 cents in the same quarter last year [1] - For the full year 2024, adjusted EAD per share was $2.7, beating the Zacks Consensus Estimate of $2.66, but down from $2.86 in the previous year [2] - Net interest income (NII) for the fourth quarter was $187.3 million, missing the Zacks Consensus Estimate of $242 million, and significantly improved from a negative $53.6 million in the prior-year quarter [3] - Total assets at the end of the fourth quarter were $103.6 billion, reflecting a 2% increase from the prior quarter [3] Yield and Margins - The average yield on interest-earning assets (excluding premium amortization adjustment) was 5.26%, up from 4.64% in the prior-year quarter [4] - The net interest spread (excluding PAA) increased to 1.47% from 1.22% in the prior-year quarter, while the net interest margin (excluding PAA) rose to 1.71% compared to 1.58% in the fourth quarter of 2023 [4] Book Value and Capital Ratios - Book value per share (BVPS) was $19.15 as of December 31, 2024, down 1.5% from $19.44 in the prior-year quarter [5] - The economic capital ratio improved to 14.6%, up from 14% in the previous year [5] - Economic leverage was 5.5X as of December 31, 2024, a decrease from 5.7X sequentially and year-over-year [5] Returns and Rankings - Annaly generated an annualized EAD return on average equity of 14.27% in the fourth quarter, an increase from 13.76% in the prior-year quarter [6] - The company currently holds a Zacks Rank 2 (Buy) [6]

Financial Performance - Annaly generated a ~12% economic return for the year with earnings available for distribution in excess of the dividend[8] - Earnings available for distribution was $0.72 per average common share for the quarter[9] - Book value per common share was $19.15[9] - Declared quarterly common stock cash dividend of $0.65 per share[9] - Economic return was 1.3% for the fourth quarter and 11.9% for the full year 2024[9] Portfolio Composition and Performance - Total portfolio was $80.9 billion, including $70.6 billion in highly liquid Agency MBS strategy, which represents 87% of total assets and 59% of dedicated capital[9] - Annaly's Residential Credit portfolio increased to $7.0 billion, representing a 17% increase year-over-year[9] - Annaly's MSR portfolio increased 24% year-over-year to $3.3 billion in market value, now representing 19% of dedicated capital[9] Financing and Liquidity - Economic leverage was 5.5x, down from 5.7x in the third quarter[9] - $6.9 billion of total assets were available for financing, including cash and unencumbered Agency MBS of $3.9 billion[9] - Financing costs decreased quarter-over-quarter with average GAAP cost of interest-bearing liabilities of 4.96%, down 46 basis points quarter-over-quarter, and average economic cost of interest-bearing liabilities of 3.79%, down 14 basis points quarter-over-quarter[9]

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or ...

Annaly Capital Management (NLY) came out with quarterly earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.67 per share. This compares to earnings of $0.68 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 7.46%. A quarter ago, it was expected that this real estate investment trust would post earnings of $0.67 per share when it actually produced earnings of $0.66, delivering a surprise of -1.49%.Over the las ...

ANNALY CAPITAL MANAGEMENT, INC. REPORTS 4th QUARTER 2024 RESULTS NEW YORK—January 29, 2025—Annaly Capital Management, Inc. (NYSE: NLY) ("Annaly" or the "Company") today announced its financial results for the quarter and year ended December 31, 2024. Financial Highlights Business Highlights Fourth Quarter 2024 Highlights Full-Year 2024 Highlights Investment and Strategy Financing and Capital • Annaly's Agency portfolio increased by nearly $5 billion throughout 2024; increased the weighted average coupon of ...