2023-04-26 16:35:46 ET
Annaly Capital Management ( NYSE: NLY ) stock gained 1.3% in Wednesday after-hours trading after Q1 earnings
Q1 EPS for distribution of $0.81 , topping the $0.75 consensus, fell from $0.89 in Q4 2022 and from $1.11 in Q1 2022.
Economic return of 3.0% narrowed from 8.7% in Q4. Economic leverage of 6.4x widened slightly from 6.3x in the prior quarter.
Book value per common share fell to $20.77 at March 31, 2023 from $20.79 at Dec. 31, 2022.
"As we noted at the start of the year, Annaly ( NLY ) was prepared for market turmoil with prudent leverage, substantial liquidity and optimal asset allocation," CEO and Chief Investment Officer David Finkelstein said. "This conservative positioning enabled us to preserve capital and liquidity during the quarter, while maintaining the flexibility to grow when opportunistic, including adding to our Agency portfolio through accretive issuance under our ATM early in the quarter."
During the quarter, Annaly ( NLY ) added swap hedges to correspond with assets purchased throughout the quarter to maintain a defensive duration position amid elevated volatility in yields.
Total assets of $85.5B included $77.6B in its highly liquid Agency portfolio. Its Mortgage Servicing Rights portfolio was relatively unchanged Q/Q with $1.8B in assets. And its Residential Credit Group grew assets modestly to $5.2B, representing 18% of dedicated equity capital.
Q1 net interest income of $19.5M dropped from $135.1M in Q4 and $580.9M in Q1 2022; net interest margin, excluding PAA, of 1.76% slipped from 1.90% in the prior quarter and from 2.04% in the year-ago period.
Q1 net interest spread, excluding PAA, was 1.62% vs. 1.71% in Q4 and 1.73% in Q1 2022.
Net servicing income of $76.4M vs. $74.4M in the prior quarter and $31.0M in the year-ago quarter.
Average economic cost of interest-bearing liabilities was 2.34% at March 31, 2023 vs. 2.11% at Dec. 31, 2022.
Total general and administrative expenses of $40.8M declined from $43.0M in the prior quarter and from $45.8M in the year-ago period.
Conference call on April 27 at 9:00 AM ET.
Earlier, Annaly Capital Management ( NLY ) non-GAAP EPS of $0.81 beats by $0.06
SA contributor Thomas Prescott recently discussed NLY's long-term performance and EFR
For further details see:
Annaly Capital Management Q1 earnings beat, manages 3% economic return