Annaly's (NLY) Q4 Earnings Beat Estimates On Improving NII
Zacks Investment Research | Feb 13, 2020 12:14AM ET
Annaly Capital Management, Inc. (NYSE:NLY) reported fourth-quarter 2019 core earnings, excluding premium amortization adjustment (PAA), of 26 cents per share, beating the Zacks Consensus Estimate of 24 cents and the prior quarter’s 21 cents. However, the figure compares unfavorably with the year-ago tally of 29 cents.
Net interest income (NII) came in at $454.2 million, marking a surge from the prior quarter’s $152.4 million as well as the year-ago period’s $272.9 million.
Notably, the company’s capital allocation to credit increased to 26% from 23%, driven by $1.8 billion in new credit assets.
For full-year 2019, core earnings, excluding PAA, per share came in at $1.00 compared with the $1.20 reported in the prior year.
Moreover, following the end of the quarter, definitive agreements were signed, per which Annaly will acquire its external manager, Annaly Management Company LLC, and change to being an internally-managed REIT.
Quarter in Detail
During the fourth quarter, Annaly Residential Credit Group accomplished a $465.5-million residential whole loan securitization as well as purchased $957 million of residential whole loans. Further, $596 million in new investments were closed by Annaly Commercial Real Estate Group, leading the tally of total assets to $2.3 billion, denoting a rise of 31% from the prior quarter. Moreover, Annaly Middle Market Lending Group closed $238.7 million of loans in the quarter.
In the reported quarter, average yield on interest-earning assets (excluding PAA) was 3.25%, slightly down from the prior quarter’s 3.26%.
However, net interest spread (excluding PAA) of 1.24% for the fourth quarter increased from the 0.98% reported in the prior quarter. Net interest margin (excluding PAA) in the quarter came in at 1.41% compared with the 1.10% witnessed in third-quarter 2019.
Also, Annaly’s book value per share came in at $9.66 as of Dec 31, 2019, up from $9.21 as of the prior-quarter end. Additionally, book value per share compared favorably with $9.39 as of Dec 31, 2018. At the end of the December-end quarter, the company’s capital ratio was 12%, up from the 11.2% reported at the end of third-quarter 2019.
Leverage was 7.1:1 as of Dec 31, 2019, compared with 7.3:1 as of Sep 30, 2019. The company offered an annualized core return on an average equity (excluding PAA) of 10.56% in the October-December period, up from the prior quarter’s 8.85%.
Annaly Capital currently carries a Zacks Rank #2 (Buy). You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.