Annaly Reports Sharp Increase in Book Value, 12th Consecutive Quarter of Positive Earnings
NEW YORK--(BUSINESS WIRE)--October 19, 2000--Annaly Mortgage Management, Inc. (NYSE: NLY - news) today reported earnings for the quarter ended September 30, 2000 of $3,806,097 or $0.27 per average share outstanding. Earnings for the nine months ended September 30, 2000 were $12,493,415, or $0.89 per average share outstanding.
For the quarter ended September 30, 2000, the yield on average earning assets was 7.10% and the cost of funds on the average repurchase balance was 6.71%. Whereas, for the quarter ended September 30, 1999, the yield on average assets was 6.26% and the cost of funds on the average repurchase balance was 5.22%. The interest rate spread decreased to 0.39% for the third quarter of 2000 from 1.04% for the third quarter of 1999. The weighted average Constant Prepayment Rate, ``CPR,'' for the third quarter decreased to 12% from 18% for the third quarter of 1999. For the quarter ended September 30, 2000 and 1999, the Company's gain on sale of assets was $872,949 and $97,656, respectively. General and administration expenses, as a percent of average assets was 0.13% and 0.14% for the quarters ended September 30, 2000 and 1999, respectively. The annualized return on average equity was 13.29% for the quarter ended September 30, 2000. Dividends declared for the quarter were $0.25 per share. The annualized dividend yield for the quarter, based on the September 29, 2000 closing price of 9 1/8, was 10.96%.
At September 30, 2000, Annaly had a book value of $8.30, which was a 7% increase from the June 30, 2000 book value of $7.77. During the third quarter, the Company raised $767,479 in the dividend reinvestment and share purchase plan. The Company classifies all investment securities as ``available for sale.'' Consequently, the entire portfolio is recorded at market value, which is determined by the average price provided by three independent sources. The fair value of the Company's Mortgage-Backed Securities portfolio at September 30, 2000 was $1,664,136,333. Fixed rate Mortgage-Backed Securities comprised approximately 28% of the portfolio at September 30, 2000. The balance of the portfolio is comprised of 41% Adjustable Rate Mortgages (ARMS) and 31% LIBOR Floating Rate Collateralized Mortgage Obligations (CMO Floaters). The Company has continued to avoid the introduction of credit risk in its portfolio. All of the assets in the portfolio are FNMA, GNMA or FHLMC securities, which carry an implied ``AAA'' rating. No derivatives, interest rate swaps, swaptions, options, currency swaps, total rate of return swaps were acquired. All assets in the portfolio were REIT eligible assets.
We continued to create strong earnings without sacrificing asset quality. During the quarter Annaly was able to take advantage of the change in the near term interest outlook by re-positioning the portfolio to generate more sustainable earnings going forward. As a result, gains were taken on the liquidation of assets. Our investment strategy and low cost structure proved effective in providing an attractive dividend yield. As mentioned last quarter, the interest expense of the company has increased substantially over the same time period in 1999. Increased funding rates were in effect for the entire third quarter, while a portion of the adjustable rate assets continue to adjust to the new interest rate environment. High quality assets continue to provide attractive returns as we deploy new internally generated capital and re-position the portfolio. We maintain our outlook of sustainable earnings for the fourth quarter of 2000 and anticipate an appealing return in the current market.
Annaly Mortgage Management, Inc. a Maryland corporation owns and manages a portfolio of Mortgage-Backed Securities. The Company's principal business objective is to generate net income for distribution to stockholders from the spread between the interest income on its Mortgage-Backed Securities and the costs of borrowing to finance its acquisition of Mortgage-Backed Securities. The Company has elected to be taxed as a real estate investment trust (REIT) and currently has 14,299,433 shares of common stock outstanding.
The Company will hold a third quarter earnings conference call Friday October 20, 2000 at 2:00 p.m. EST. The number to call is 1-888-222-2994 (Reference: Annaly Mortgage Management). If you would like to be added to the e-mail distribution list, please email rmiller@annaly.com. |
