Annaly Mortgage Management, Inc. Announces 1st Quarter 2003 Earnings
BUSINESS WIRE - April 25, 2003 17:00
NEW YORK, Apr 25, 2003 (BUSINESS WIRE) -- Annaly Mortgage Management, Inc. (NYSE: NLY) today reported earnings for the quarter ended March 31, 2003 of $50,775,000 or $0.60 per average share outstanding, as compared to $50,426,000 or $0.60 per average share outstanding for the quarter ended December 31, 2002 and $53,043,000 or $0.69 per average share outstanding for the quarter ended March 31, 2002.
The Company was able to provide an annualized return on average equity of 18.83% for the quarter ended March 31, 2003, as compared to 18.63% for the quarter ended December 31, 2002 and 25.32% for the quarter ended March 31, 2002. Dividends declared for the quarter ended March 31, 2003 were $0.60 per share, compared to $0.60 for the quarter ended December 31, 2002 and $0.63 per share for the quarter ended March 31, 2002. The annualized dividend yield for the quarter, based on the March 31, 2003 closing price of $17.47, was 13.74%.
For the quarter ended March 31, 2003, the yield on average earning assets was 3.23% and the cost of funds on the average repurchase balance was 1.68%, which equates to an interest rate spread of 1.55%. This is a 3 basis point decrease over the 1.58% interest rate spread for the quarter ended December 31, 2002, when the yield on average mortgage-backed securities was 3.56% and the cost of funds on the average repurchase balance was 1.98%, and a 110 basis point decrease over the 2.65% interest rate spread for the quarter ended March 31, 2002, when the yield on average mortgage-backed securities was 4.88% and the cost of funds on the average repurchase balance was 2.23%. The Constant Prepayment Rate was 41% during the first quarter of 2003, as compared to 43% in the fourth quarter of 2002 and 28% for the quarter ended March 31, 2002.
Subsequent to quarter end, the Company raised approximately $151.2 million in net proceeds through a secondary offering of 9,300,700 shares of common stock. Commented Annaly's Chairman, Chief Executive Officer and President, Michael A.J. Farrell: "Record-low interest rates have helped the average homeowner reduce his or her borrowing costs to multi-decade lows and support our nation's economy. The resulting record-setting prepayment speeds, however, have had a continuing negative impact on the yield earned on the Company's portfolio of mortgage-backed securities. For as long as this environment continues, we will continue to see high levels of amortization. Nevertheless, the current market presents numerous opportunities and we feel confident that the new capital we have recently raised will be profitably invested for the benefit of our shareholders."
The weighted average purchase price of the portfolio at March 31, 2003 and March 31, 2002 was 102.6 and 102.0, respectively. For the quarter ended March 31, 2003, the Company's gain on sale of assets was $11.0 million as compared to $3.4 million for the same quarter in the prior year. Leverage at March 31, 2003 was 9.5:1, compared to 9.4:1 at December 31, 2002 and 8.3:1 at March 31, 2002.
General and administration expenses, as a percent of average assets was 0.12% and 0.14% for the quarters ended March 31, 2003 and 2002, respectively. In addition, the Company's Dividend Efficiency Ratio, calculated as general and administrative expenses divided by dividends paid, was 7.3% and 6.2% for the quarters ended March 31, 2003 and 2002, respectively.
At March 31, 2003 and 2002, respectively, the Company had a book value of $12.72 and $12.17. The Company classifies all investment securities as "available for sale;" therefore requiring the Company to record the entire portfolio at market value. Fixed rate securities comprised approximately 38% of the Company's portfolio at March 31, 2003. The balance of the portfolio was comprised of 33% adjustable rate mortgages and 29% LIBOR floating rate collateralized mortgage obligations. The Company has continued to avoid the introduction of credit risk into its portfolio. As of March 31, 2003, all of the assets in the Company's portfolio were FNMA, GNMA, FHLMC mortgage-backed securities, and FHLB debentures, which carry an actual or implied "AAA" rating.
The Company is a Maryland corporation which 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 cost of borrowing to finance their acquisition. The Company has elected to be taxed as a real estate investment trust ("REIT") and currently has 93,969,451 shares of common stock outstanding.
The Company will hold the first quarter 2003 earnings conference call on Monday, April 28, 2003 at 4:00 p.m. EST. The number to call is 1-800-915-4836. The re-play number is 1-800-428-6051 and the pass code is 291732. There will be a web cast of the call on www.annaly.com. If you would like to be added to the e-mail distribution list, please visit www.annaly.com, click on E-Mail alerts, enter your e-mail address where indicated and click the Subscribe button. |
