Core Viewpoint - Annaly Capital Management offers a high dividend yield of over 14%, significantly higher than the S&P 500, and has recently increased its dividend despite past cuts [1][2]. Investment Strategy - The company employs a three-pronged investment strategy, utilizing leverage to invest in additional mortgages and profiting from the spread between interest paid and income earned [4]. - Annaly's investment portfolio includes Agency MBS, mortgage servicing rights (MSRs), and residential credit, with a focus on prime jumbo mortgages [5]. Financial Performance - Annaly generated $0.72 per share of earnings available for distribution (EAD) for two consecutive quarters, indicating a recovery in earnings after previous declines [5][7]. - The company raised its quarterly dividend from $0.65 to $0.70 per share, marking a partial reversal of a previous cut from $0.88 to $0.65 earlier in 2023 [7]. Portfolio Composition - As of early 2023, Annaly had an $85.5 billion investment portfolio, which decreased to $84.9 billion by the first quarter of the current year, with improved returns across its investment strategies [9]. - The company has shifted some capital towards residential credit and MSRs, allowing for less leverage while still achieving higher returns [9][10]. Market Outlook - The CEO expressed confidence in the company's diversified housing finance portfolio, suggesting it can deliver superior risk-adjusted returns over the long term [11]. - The mortgage investment strategy is characterized as high-risk but potentially lucrative, appealing to risk-tolerant investors [12].

Core Viewpoint - Annaly Capital Management, Inc. reported strong adjusted earnings for the first quarter of 2025, with a notable increase in average yield on interest-earning assets, although there was a decline in book value per share. Financial Performance - Adjusted earnings available for distribution (EAD) per average share were 72 cents, exceeding the Zacks Consensus Estimate of 71 cents and up from 64 cents in the same quarter last year [1] - Net interest income (NII) was $219.9 million, missing the Zacks Consensus Estimate by 46.2%, compared to a negative NII of $6.45 million in the prior-year quarter [2] - Total assets at the end of the first quarter were $105.1 billion, reflecting a 1.5% increase from the previous quarter [2] Yield and Margins - The average yield on interest-earning assets (excluding premium amortization adjustment) was 5.23%, up from 4.87% in the prior-year quarter [3] - The average economic costs of interest-bearing liabilities increased to 3.88% from 3.78% year-over-year [3] - Net interest spread (excluding PAA) improved to 1.35%, up from 1.09% in the prior-year quarter, while the net interest margin (excluding PAA) rose to 1.69% from 1.43% [3] Book Value and Capital Ratios - Book value per share (BVPS) was $19.02 as of March 31, 2025, down 3.6% from $19.73 in the prior-year quarter [4] - The economic capital ratio remained stable at 14.6% compared to the prior-year quarter [4] - Economic leverage increased to 5.7X from 5.6X year-over-year [4] Return on Equity - Annaly generated an annualized EAD return on average equity of 14.43%, an increase from 12.63% in the prior-year quarter [5] Strategic Outlook - The company's first-quarter results were bolstered by rising average yield and total assets, with prudent asset selection expected to drive future performance [6] - However, the decline in book value per share raises concerns, and achieving solid returns may face challenges due to increasing market uncertainties [6]

Financial Data and Key Metrics Changes - The economic return for Q1 2025 was 3%, consistent with the previous quarter, with earnings available for distribution per share at $0.72 [18][19] - Book value per share slightly declined to $19.02, a decrease of less than 1% quarter over quarter [19][22] - The common stock dividend was increased from $0.65 to $0.70 per share, reflecting earnings momentum [7][19] Business Line Data and Key Metrics Changes - The Agency portfolio saw a notional growth of $3.5 billion, driven by purchases of intermediate coupon TBAs [10][11] - The Residential Credit portfolio decreased by $340 million quarter over quarter, ending at $6.6 billion in market value [12][13] - The Mortgage Servicing Rights (MSR) portfolio remained relatively unchanged at $3.3 billion in market value [15][16] Market Data and Key Metrics Changes - Economic leverage increased modestly to 5.7 turns, remaining at the low end of the historical range [9][19] - The housing market showed signs of regional disparity, with home price appreciation slowing down due to increased inventory and affordability issues [13][60] - Inventory levels increased by 18% year over year, impacting existing home sales, which were at their lowest since February [57][58] Company Strategy and Development Direction - The company aims to maintain a conservative leverage approach amidst market volatility while focusing on agency investments due to attractive returns [17][37] - The strategic alignment with industry-leading sub-servicing partners is expected to create competitive advantages in the MSR business [15][16] - The company is optimistic about the potential for regulatory reforms that could positively impact the market dynamics [32][71] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment remains uncertain, with volatility expected to persist [9][17] - The outlook for the housing market is stable in the long term, supported by low delinquencies and tight underwriting standards, despite short-term pullbacks [60][61] - The company is prepared for potential market fluctuations with a diversified and actively managed portfolio [17][22] Other Important Information - The company has approximately $7.5 billion in assets available for financing, reflecting a $600 million increase compared to the previous quarter [22] - The weighted average repo days extended to 50 days, indicating a strategic shift in financing [21] Q&A Session Summary Question: Update on book value quarter to date - The book value was off roughly 3.5% as of the latest update, improving from a 4.5% decline post-Easter [25] Question: Outlook for spreads and regulatory impacts - Swap spreads have tightened due to volatility, and regulatory reforms are anticipated to positively influence market conditions [26][32] Question: Thoughts on leverage amidst spread widening - The company is balancing the opportunity to increase leverage against the risks posed by high volatility [36][37] Question: Housing price moderation and systemic risks - Housing price increases are regional, with some areas experiencing declines, but overall, the market remains stable due to strong borrower equity [60][61] Question: Agency portfolio supply-demand dynamics - Demand from fixed income funds was strong before recent volatility, with banks and REITs also showing reasonable demand [85] Question: Impact of rate and spread volatility on loan acquisitions - The company is adopting a more defensive posture in response to increased spreads, but lock volumes remain stable [90]

Financial Data and Key Metrics Changes - The company reported earnings available for distribution per share of $0.72, consistent with the prior quarter, driven by lower average repo rates of 4.56% compared to 4.93% in the previous quarter [18] - The book value per share was $19.02, reflecting a modest decline of less than 1% quarter over quarter [18] - The economic return for Q1 was 3%, with individual business segments contributing positively despite a challenging macro environment [18] Business Line Data and Key Metrics Changes - The Agency portfolio saw a notional growth of $3.5 billion, driven by purchases of intermediate coupon TBAs [9] - The Residential Credit portfolio ended the quarter at $6.6 billion in market value, with a decrease of $340 million quarter over quarter due to opportunistic sales and increased securitizations [11] - The Mortgage Servicing Rights (MSR) portfolio remained relatively unchanged at $3.3 billion in market value, with $28 billion in principal balance settled during Q1 [14] Market Data and Key Metrics Changes - Economic leverage increased modestly to 5.7 turns, remaining at the low end of the historical range [6] - The housing market is showing signs of increased regional disparity, with some areas experiencing a modest reversal in home price appreciation trends [12] - Inventory levels have increased, with a year-over-year rise of 18%, impacting the spring selling season [58] Company Strategy and Development Direction - The company aims to maintain a conservative leverage approach amidst market volatility, balancing the opportunity to increase leverage with the risks associated with high volatility [38] - The focus remains on agency investments as spreads have cheapened, while also continuing to grow the OBX platform for loan acquisition and securitization [76] - The company is strategically aligned with industry-leading sub-servicing partners to enhance efficiency and technological investment in the mortgage industry [15] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the impact of U.S. trade policy on consumer and business confidence, which may affect economic growth [7] - Despite the uncertain outlook, the company believes its diversified and actively managed portfolio positions it well to perform across various economic scenarios [17] - The management remains optimistic about the housing market's long-term stability due to low delinquencies and tight underwriting standards, despite short-term pullbacks in certain regions [62] Other Important Information - The company increased its common stock dividend to $0.70 per share, underscoring earnings momentum [6] - The total assets available for financing increased to approximately $7.5 billion, reflecting enhanced liquidity [22] Q&A Session Summary Question: Update on book value quarter to date - The book value was off roughly 3.5% as of Tuesday evening, improving from a 4.5% decline post-Easter [26] Question: Outlook for spreads and regulatory impacts - Swap spreads have tightened due to volatility, and regulatory reforms are anticipated to positively impact market conditions in the future [27][33] Question: Thoughts on leverage given current market conditions - The company is maintaining a conservative leverage approach due to high volatility, despite wider spreads suggesting a potential increase in risk [37][39] Question: Supply-demand dynamics in the agency portfolio - There was strong demand from fixed income funds and banks, but foreign demand, particularly from Asian accounts, remains limited [87][88] Question: Impact of housing price moderation on the market - Housing prices have increased significantly since 2019, but recent inventory increases may lead to short-term pullbacks in certain regions [58][62]

Annaly Capital Management (NLY) came out with quarterly earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.71 per share. This compares to earnings of $0.64 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.41%. 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 $0.72, delivering a surprise of 7.46%.Over the last ...

Financial Performance - Annaly increased the dividend to $0.70 per share, highlighting the strong performance of its diversified housing finance portfolio[10] - Earnings available for distribution were $0.72 per average common share for the quarter[11] - The book value per common share was $19.02[11] - The company's economic return for the first quarter was 3.0%[11] Portfolio Composition and Performance - The total portfolio was $84.9 billion, including $75.0 billion in highly liquid Agency MBS, representing 88% of total assets and 61% of dedicated capital[11] - The Agency portfolio increased by 6% during the quarter, focusing on allocating capital into intermediate coupon TBA securities[11] - The Residential Credit portfolio decreased 5% to $6.6 billion, driven by securitization and sales of third-party securities[11] - The MSR portfolio remained relatively unchanged at $3.3 billion in market value, representing 21% of dedicated capital[11] Financing and Liquidity - Economic leverage was 5.7x, up from 5.5x in the fourth quarter[11] - Total assets available for financing were $7.5 billion, including cash and unencumbered Agency MBS of $4.7 billion[11] - The average GAAP cost of interest-bearing liabilities was 4.77%, down 19 basis points quarter-over-quarter, while the average economic cost of interest-bearing liabilities was 3.88%, up 9 basis points quarter-over-quarter[11]

Financial Performance - GAAP net income of $0.15 per average common share for Q1 2025, down from $0.78 in Q4 2024[5] - Net income attributable to Annaly for Q1 2025 was $124.22 million, compared to $482.05 million in Q4 2024, indicating a decline of 74.2%[16] - Comprehensive income attributable to common stockholders for Q1 2025 was $317.35 million, up from $137.87 million in Q4 2024, reflecting a growth of 130%[16] - GAAP net income for Q1 2025 was $130,305,000, compared to $473,076,000 in Q4 2024 and $465,174,000 in Q1 2024[27] - Earnings available for distribution for Q1 2025 were $461,857,000, up from $447,015,000 in Q4 2024 and $357,962,000 in Q1 2024, representing a 28.9% year-over-year increase[27] Earnings and Dividends - Earnings available for distribution (EAD) of $0.72 per average common share, consistent with Q4 2024[5] - The dividend declared per common share increased to $0.70 from $0.65 in the previous quarter and the same amount a year ago, resulting in an annualized dividend yield of 13.79%[18] - Dividends on preferred stock decreased to $37.16 million in Q1 2025 from $38.70 million in Q4 2024, a reduction of 3.9%[16] Portfolio and Assets - Total portfolio valued at $84.9 billion, including $75.0 billion in highly liquid Agency portfolio, which increased by 6%[5] - Total assets increased to $105.12 billion as of March 31, 2025, up from $103.56 billion at December 31, 2024, representing a growth of 1.52%[14] - As of March 31, 2025, the total investment portfolio reached $101.96 billion, an increase from $98.19 billion as of December 31, 2024, and $87.48 billion as of March 31, 2024[20] Leverage and Debt - GAAP leverage improved to 6.8x from 7.1x in the prior quarter; economic leverage increased to 5.7x from 5.5x[5] - Total liabilities stood at $92.03 billion as of March 31, 2025, compared to $90.86 billion at the end of 2024, an increase of 1.29%[14] - Total GAAP debt as of March 31, 2025, was $88,629,051,000, slightly down from $89,605,046,000 as of December 31, 2024[38] Interest Income and Expenses - Net interest income for Q1 2025 was $219.97 million, a significant increase from $187.29 million in Q4 2024, marking a rise of 17.5%[16] - Interest income for Q1 2025 was $1.32 billion, slightly down from $1.34 billion in Q4 2024, reflecting a decrease of 0.57%[16] - Economic interest expense for Q1 2025 was $892,748, an increase from $879,287 in Q4 2024 and $770,790 in Q1 2024[44] - The average yield on interest-earning assets was 5.18%, slightly down from 5.36% in the previous quarter but up from 4.88% a year ago[18] Economic Metrics - Economic return of 3.0% for Q1 2025, supported by all three investment strategies[5] - The annualized GAAP return on average equity significantly decreased to 4.04% from 15.00% in the previous quarter and 16.29% a year ago[18] - The economic capital ratio remained stable at 14.6% for the quarters ended March 31, 2025, December 31, 2024, and March 31, 2024[18] Securitization and Sales - Annaly priced eight securitizations totaling $4.2 billion since the beginning of 2025, including its inaugural HELOC securitization[5] - Annaly's Residential Credit portfolio decreased to $6.6 billion due to securitization issuance and opportunistic sales[5] Cash and Equivalents - The company’s cash and cash equivalents rose to $1.83 billion as of March 31, 2025, compared to $1.49 billion at December 31, 2024, a growth of 23.1%[14]

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Annaly Capital Management (NLY) closed the most recent trading day at $18.92, moving +1.39% from the previous trading session. This change lagged the S&P 500's 2.03% gain on the day. Meanwhile, the Dow experienced a rise of 1.23%, and the technology-dominated Nasdaq saw an increase of 2.74%.The the stock of real estate investment trust has fallen by 11.77% in the past month, lagging the Finance sector's loss of 3.37% and the S&P 500's loss of 5.07%.Investors will be eagerly watching for the performance of A ...

Annaly Capital Management Inc. (NLY) is scheduled to report first-quarter 2025 results on April 30, after market close. The company’s results are expected to reflect year-over-year growth in net interest income (NII) and earnings in the quarter to be reported.NLY's peer AGNC Investment (AGNC) announced its quarterly numbers on April 21, whereas Arbor Realty Trust (ABR) is expected to release its performance details on May 2.In the last reported quarter, Annaly’s adjusted earnings available for distribution ...