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Annaly Q1 Earnings Surpass Estimates, Book Value Declines Y/Y
AnnalyAnnaly(US:NLY) ZACKSยท2025-05-01 17:10

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]