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Annaly (NLY) Q1 Earnings Top Estimates, NII & Book Value Slide

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Annaly Capital Management, Inc. (NLY - Free Report) reported first-quarter 2022 earnings available for distribution (EAD) per share of 28 cents, which surpassed the Zacks Consensus Estimate of 23 cents. The figure, however, compared unfavorably with the year-ago quarter’s 29 cents.

NLY registered a year-over-year decline in book value per share (BVPS) and the average yield on interest-earning assets.

The net interest income (NII) was $580.9 million, surpassing the Zacks Consensus Estimate of $341 million. The figure declined 15.5% year over year.

Inside the Headlines

At the first-quarter end, Annaly had $84.4 billion of total assets, with $76.1 billion invested in the Agency portfolio. At the end of the quarter, unencumbered assets stood at $7.2 billion.

In the reported quarter, the average yield on interest-earning assets (excluding premium amortization adjustment or PAA) was 2.62%, down from the prior-year quarter’s 2.71%. Average economic costs of interest-bearing liabilities were 0.89%, increasing from 0.87%.

Net interest spread (excluding PAA) of 1.73% for the first quarter fell from 1.84% in the prior-year quarter. Nonetheless, the net interest margin (excluding PAA) in the reported quarter was 2.04% compared with 1.91% witnessed in first-quarter 2021.

Annaly’s BVPS was $6.77 as of Mar 31, 2022, sequentially down from $7.97. Moreover, BVPS compared unfavorably with $8.95 as of Mar 31, 2021. At the end of the reported quarter, Annaly’s economic capital ratio was 13.1%, declining from 13.7% in the prior-year quarter.

For the March-end quarter, the weighted average actual constant prepayment rate was 16.7%, sequentially down from 21.4%.

Economic leverage was 6.4X as of Mar 31, 2022, up from 5.7X (sequentially) and 6.1X in the prior-year quarter. Annaly generated an annualized EAD return on average equity (excluding PAA) of 14.01% in the first quarter, up from the prior-year quarter’s 12.53%.

Annaly Capital Management Inc Price, Consensus and EPS Surprise


Annaly Capital Management Inc Price, Consensus and EPS Surprise

Annaly Capital Management Inc price-consensus-eps-surprise-chart | Annaly Capital Management Inc Quote

Annaly currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Competitive Landscape

We now look forward to the earnings releases of other mortgage REITs, such as Starwood Property Trust (STWD - Free Report) and AGNC Investment Corp.  (AGNC - Free Report) .

STWD and AGNC are scheduled to report results on May 5 and May 2, respectively.

Starwood Property and AGNC Investment carry a Zacks Rank #3 (Hold) at present.

In-Depth Zacks Research for the Tickers Above

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AGNC Investment Corp. (AGNC) - free report >>


Annaly Capital Management Inc (NLY) - free report >>