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Jun 30, 2022
Annaly Q2 2022 Earnings Report
Announced financial results for the quarter ended June 30, 2022.
Key Takeaways
Annaly Capital Management reported a GAAP net income of $0.55 per average common share and Earnings Available for Distribution (EAD) of $0.30 per average common share for the second quarter of 2022. The company's Agency portfolio decreased modestly, while the MSR platform grew assets by 41% to $1.7 billion. The sale of the Middle Market Lending portfolio was completed during the quarter, transitioning Annaly to a dedicated housing finance REIT.
GAAP net income of $0.55 per average common share for the quarter.
Earnings available for distribution (“EAD”) of $0.30 per average common share for the quarter; up $0.02 from the prior quarter with dividend coverage of over 135%.
Annaly's Agency portfolio decreased modestly during the quarter, while capital allocation was roughly unchanged at 71%.
Annaly's Mortgage Servicing Rights ("MSR") platform grew assets by 41% to $1.7 billion during the second quarter with MSR representing 15% of dedicated equity capital, up from 9% in the prior quarter.
Forward Guidance
Annaly remains constructive on the outlook for Agency MBS, citing attractive new investment returns and increased clarity from the Federal Reserve. The company expects that progresses in Residential Credit and Mortgage Servicing Rights businesses will enhance the durability and quality of returns.
Positive Outlook
- Historically attractive new investment returns in Agency MBS.
- Increased clarity from the Federal Reserve on interest rate hikes and quantitative tightening.
- Continued growth in Residential Credit business.
- Continued growth in Mortgage Servicing Rights business.
- Progress towards long-term strategic objectives.
Challenges Ahead
- Challenging operating environment due to spread widening and rate volatility.
- Intensifying concerns about global economic growth contributing to risk-off sentiment.
- Pressures on book value.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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