Annaly Continues to Provide Solid Earnings
NEW YORK--(BUSINESS WIRE)--April 23, 1999--Annaly Mortgage
Management Inc. (NYSE: NLY) today reported earnings for the quarter
ended March 31, 1999 of $4,318,456, or $0.34 per average share
outstanding.
For the quarter ended March 31, 1998, net income totaled
$4,708,150, or $0.37 per average share outstanding. For the quarter
ended March 31, 1999, the yield on average assets was 5.87% and the
cost of funds on the average repurchase balance was 4.97%. Whereas,
for the quarter ended March 31, 1998, the yield on average assets was
6.15% and the cost of funds on the average repurchase balance was
5.59%. Consequently, the interest rate spread increased to 0.90% for
the first quarter of 1999 from 0.56% for the first quarter of 1998.
The weighted average Constant Prepayment Rate, "CPR," for the first
quarter decreased to 23% from 27% for the quarter ended Dec. 31,
1998. Additionally, the cost of funds decreased substantially from the
previous quarter's rate of 5.21%. For the quarter ended March 31, 1999
and 1998, the Company's gain on sale of assets was $64,560 and
$1,427,084, respectively. Income for the first quarter of 1999
reflects a greater emphasis on net interest income and less dependence
on gains on disposition of assets, when compared to the first quarter
of 1998. Net interest income increased because of lower funding cost
for the period. This increase was partially offset by lower yields on
assets. General and administration expenses, as a percent of average
assets was 0.16% and 0.15% for the quarters ended March 31, 1999 and
1998, respectively. This equates to an annualized return on average
equity of 13.71% and 13.97% for the quarters ended March 31, 1999 and
1998. The leverage ratio was 10.8:1 at March 31, 1999. Annaly has
maintained its optimal leverage range of 10:1 to 12:1. Dividends
declared for the quarter were $0.33 per average share. The annualized
dividend yield for the quarter, based on the March 31, 1999 closing
price of $10.00, was 13.20%.
At March 31, 1999, Annaly had a book value of $9.97, which was
materially unchanged from the Dec. 31, 1998 book value of $9.95. 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 March 31, 1999 was $1,547,618,299 and at Dec. 31, 1998
was $1,520,288,762. Fixed rate Mortgage-Backed Securities comprised
approximately 32% of the portfolio at March 31, 1999. The balance of
the portfolio is comprised of 43% Adjustable Rate Mortgages (ARMS) and
25% 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. As evidenced in the income
statement, Management continues to focus on attaining favorable
lending rates and maintaining a large base of lenders. The Company
maintains lines of credit with 23 high quality banks and
broker-dealers.
In reviewing the quarter's results, Michael A.J. Farrell,
Chairman and Chief Executive Officer stated; "The first quarter of
1999 was extremely volatile for interest rate sensitive companies.
Annaly's continued focus on high quality assets, active liability
management and a disciplined approach towards portfolio composition
all contributed to this quarter's positive results. As we enter our
third year of operations, it is gratifying to see how well our
investment policies are performing." |
