Annaly Q3 2020 Earnings Report
Key Takeaways
Annaly Capital Management reported a GAAP net income of $0.70 per average common share, a core earnings (excluding PAA) of $0.32 per average common share, and an economic return of 6.3%. The company's book value per common share increased to $8.70, and economic leverage decreased to 6.2x. They completed two residential whole loan securitizations totaling $1.0 billion and repurchased $209 million of common stock year-to-date.
GAAP net income of $0.70 per average common share, up from $0.58 in the prior quarter.
Core earnings (excluding PAA) of $0.32 per average common share, up 18.5% from the prior quarter.
Book value per common share of $8.70, up 3.7% from the prior quarter.
Economic leverage of 6.2x, down from 6.4x in the prior quarter.
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Annaly Revenue by Segment
Forward Guidance
The CEO is optimistic about the operating environment for Agency MBS due to low-interest rate volatility, strong carry, and low financing costs.
Positive Outlook
- Low interest rate volatility.
- Strong carry.
- Lowest financing costs in the last decade.
- Enhanced cost of capital and liquidity profile through securitizations.
- Proactive management of portfolio increased book value.
Challenges Ahead
- Risks and uncertainties related to the COVID-19 pandemic.
- Changes in interest rates.
- Changes in the yield curve.
- Changes in prepayment rates.
- Availability of mortgage-backed securities for purchase.