Annaly Continues to Provide Solid Earnings.NEW YORK--(BUSINESS WIRE)--April 23, 1999-- Annaly Mortgage Management Inc. (NYSE NYSE See: New York Stock Exchange : 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 Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. 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 Cardiopulmonary Resuscitation (CPR) Definition Cardiopulmonary resuscitation (CPR) is a procedure to support and maintain breathing and circulation for a person who has stopped breathing (respiratory arrest) and/or whose heart has stopped (cardiac ," 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 annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. 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 Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. 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 This article is about the US mortgage type. For an international perspective, see Variable rate mortgage. An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on an index. (ARMS) and 25% LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). Floating Rate Collateralized Mortgage Obligations Collateralized mortgage obligation (CMO) A security backed by a pool of pass-through rates , structured so that there are several classes of bondholders with varying maturities, called tranches. (CMO CMO See: Collateralized mortgage obligation CMO See collateralized mortgage obligation (CMO). Floaters floaters /float·ers/ (flo´ters) “spots before the eyes”; deposits in the vitreous of the eye, usually moving about and probably representing fine aggregates of vitreous protein occurring as a benign degenerative change. ). The Company has continued to avoid the introduction of credit risk in its portfolio. All of the assets in the portfolio are FNMA FNMA abbr. Federal National Mortgage Association Noun 1. FNMA - a federally chartered corporation that purchases mortgages Fannie Mae, Federal National Mortgage Association , GNMA GNMA abbr. Government National Mortgage Association or FHLMC See Federal Home Loan Mortgage Corporation. securities, which carry an implied "AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. " rating. No derivatives, interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. , swaptions, options, currency swaps Currency Swap A swap that involves the exchange of principal and interest in one currency for the same in another currency. Notes: Currency swaps were originally done to get around the problem of exchange controls. , total rate of return swaps were acquired. All assets in the portfolio were REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (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 grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. to see how well our investment policies are performing." 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 12,697,298 shares of common stock outstanding. This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve known and unknown risks, uncertainties of other factors, which may cause actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. For more complete information concerning factors which could affect the Company's results, see "Risk Factors" in the Company's Registration Statements and Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . -0-
ANNALY MORTGAGE MANAGEMENT INC.
BALANCE SHEETS
March 31, 1999 Dec. 31, 1998
ASSETS
CASH AND CASH EQUIVALENTS $ 329,334 $ 69,020
MORTGAGE-BACKED SECURITIES,
At fair value 1,547,618,299 1,520,288,762
ACCRUED INTEREST RECEIVABLE 7,419,163 6,782,043
OTHER ASSETS 231,631 212,214
TOTAL ASSETS $ 1,555,598,427 $ 1,527,352,039
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Repurchase agreements $ 1,371,856,000 $ 1,280,510,000
Payable for Mortgage-Backed
Securities purchased 43,023,234 111,921,205
Accrued interest payable 9,582,673 5,052,626
Dividends payable 4,190,108 3,857,663
Accounts payable 329,904 139,236
Total liabilities 1,428,981,919 1,401,480,730
STOCKHOLDERS' EQUITY:
Common stock: par value $.01 per
share; 100,000,000 authorized;
12,806,898 and 12,758,024 shares
issued and outstanding,
respectively 128,069 127,580
Additional paid-in capital 132,965,182 132,770,175
Accumulated other comprehensive
income (5,982,920) (6,404,275)
Treasury stock at cost (109,600
shares) (903,163) (903,163)
Retained earnings 409,340 280,992
Total stockholders' equity 126,616,508 125,871,309
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 1,555,598,427 $ 1,527,352,039
-0-
ANNALY MORTGAGE MANAGEMENT INC.
STATEMENTS OF OPERATIONS
For The For The
Quarter Ended Quarter Ended
March 31, 1999 March 31, 1998
INTEREST INCOME:
Mortgage-Backed Securities $ 22,014,921 $ 20,078,691
Money market account 20 30
Total interest income 22,014,941 20,078,721
INTEREST EXPENSE:
Repurchase agreements 17,151,041 16,313,474
NET INTEREST INCOME 4,863,900 3,765,247
GAIN ON SALE OF MORTGAGE-BACKED
SECURITIES 64,560 1,427,084
GENERAL AND ADMINISTRATIVE EXPENSES 610,004 484,181
NET INCOME 4,318,456 4,708,150
OTHER COMPREHENSIVE INCOME
Unrealized gain (loss) on
available-for-sale securities 421,985 (4,112,308)
Less: reclassification adjustment
for gains included in net income (64,560) (1,427,084)
Other comprehensive loss 357,425 (5,539,392)
COMPREHENSIVE INCOME $ 4,675,881 $ (831,242)
NET INCOME PER SHARE:
Basic $0.34 $0.37
Diluted $0.33 $0.36
AVERAGE NUMBER OF SHARES OUTSTANDING
Basic 12,657,884 12,727,405
Diluted 12,952,822 12,923,195
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion