Annaly Increases Earnings and Book Value During the Quarter.Business Editors NEW YORK--(BUSINESS WIRE)--April 16, 2001 Annaly Mortgage Management, Inc. (NYSE NYSE See: New York Stock Exchange : NLY) (the "Company") today reported earnings for the quarter ended March 31, 2001 of $8,330,273 or $0.38 per average share outstanding, as compared to $4,848,362, or $0.35 per average share outstanding for the quarter ended March 31, 2000. Weighted average shares outstanding were 21,851,481 and 13,660,539 for the quarters ended March 31, 2001 and 2000, respectively. As previously reported, the Company completed offerings of common stock during the quarter issuing an aggregate of 11,150,000 shares, with aggregate net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $99.3 million. For the quarter ended March 31, 2001, the yield on average earnings assets was 6.78% 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 re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. balance was 5.68%. For the quarter ended March 31, 2000, the yield on average assets was 6.80% and the cost of funds on the average repurchase balance was 5.80%. The interest rate spread increased to 1.10% in the quarter ended March 31, 2001 from 1.00% for the quarter ended March 31, 2000. The interest spread this quarter increased by 0.65% over the fourth quarter of 2000. For the quarter ended March 31, 2001, the Company's gain on sale of assets was $269,478, as compared to the prior year of $106,853. General and administrative expenses, as a percent of average assets was 0.13% and 0.16% for the quarters ended March 31, 2001 and 2000, respectively. The Company was able to provide a return on average equity of 17.20% for the quarter ended March 31, 2001. Dividends declared for the quarter were $0.30 per share. The dividend yield for the quarter, based on the March 30, 2001 closing price of $11.26, was 10.66%. At March 31, 2001, the Company had a book value of $9.80, which was a 25% increase from the March 31, 2000 book value of $7.84. The book value increased by approximately 5% from the December 31, 2000 book value of $9.34. The Company classifies all investment securities as "available for sale." Consequently, the entire portfolio is recorded at market value. Fixed rate mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. comprised approximately 28% of the Company's portfolio at March 31, 2001. The balance of the portfolio was comprised of 55% 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. and 17% 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. . The Company has continued to avoid the introduction of credit risk in its portfolio. As of March 31, 2001, all of the assets in the Company's portfolio were 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 derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. , 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. As of March 31, 2001, all assets in the portfolio were REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). eligible assets. We increased our earnings per share by 36% from the fourth quarter of 2000, while increasing book value per share by 5%. We were able to use the inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. of equity to effectively grow the balance sheet of the Company and ultimately increase distributions to stockholders. In addition to the inflow of capital, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. interest spreads allowed us to increase net interest income. General and administrative expenses also declined as a percentage of average assets. Due to the larger asset base, we were able to take advantage of economies of scale. 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 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 25,701,458 shares of common stock outstanding. The Company will hold the quarterly earnings conference call Monday April 16, 2001 at 11:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The number to call is 1-800-388-8975. If you would like to be added to the e-mail distribution list, please email rmiller@annaly.com. This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "anticipate," "continue," or similar terms or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, changes in interest rates, changes in yield curve, changes in prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. rates, the availability of mortgage-backed securities for purchase, the availability of financing and, if available, the terms of any financing. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see "Risk factors" in our Annual Report on 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. for the fiscal year ended December 31, 2000. We do not undertake, and specifically disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of such statements.
ANNALY MORTGAGE MANAGEMENT, INC.
BALANCE SHEETS
MARCH 31,
2001 DECEMBER 31,
(Unaudited) 2000
------------- ------------
ASSETS
Cash and cash equivalents $43,183 $113,061
Mortgage-Backed Securities, at
fair value 3,500,609,873 1,978,219,376
Receivable for Mortgage-Backed
Securities sold - 44,933,631
Accrued interest receivable 22,104,991 11,502,482
Other assets 323,179 260,238
-------------- -------------
Total assets $3,523,081,226 $2,035,028,788
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements $3,118,300,000 $1,628,359,000
Payable for Mortgage-Backed
Securities purchased 129,913,257 258,798,138
Accrued interest payable 14,694,685 8,314,414
Dividends payable 7,710,437 3,630,745
Accounts payable 579,765 284,105
-------------- -------------
Total liabilities 3,271,198,144 1,899,386,402
-------------- -------------
Stockholders' Equity:
Common stock: par value $.01
per share; 100,000,000
authorized, 25,701,458 and
14,522,978 shares issued
and outstanding, respectively 257,015 145,230
Additional paid-in capital 247,158,796 147,844,861
Accumulated other comprehensive
loss 3,150,882 (13,044,259)
Retained earnings 1,316,389 696,554
-------------- -------------
Total stockholders' equity 251,883,082 135,642,386
-------------- -------------
Total liabilities and
stockholders' equity $3,523,081,226 $2,035,028,788
============== =============
ANNALY MORTGAGE MANAGEMENT, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Quarter For the Quarter
Ended March 31, Ended March 31,
2001 2000
--------------- ---------------
INTEREST INCOME FROM
MORTGAGE-BACKED
SECURITIES AND CASH $42,434,421 $24,616,782
INTEREST EXPENSE ON REPURCHASE
AGREEMENTS 33,453,077 19,292,954
--------------- ---------------
NET INTEREST INCOME 8,981,344 5,323,828
GAIN ON SALE OF MORTGAGE-BACKED
SECURITIES 269,478 106,853
GENERAL AND ADMINISTRATIVE
EXPENSES 920,549 582,319
---------------- ---------------
NET INCOME $8,330,273 $4,848,362
---------------- ---------------
OTHER COMPREHENSIVE INCOME
Unrealized gain on
available-for-sale securities 16,464,619 3,362,139
Less: reclassification adjustment
for net gains included in
net income (269,478) (106,853)
---------------- ----------------
Other comprehensive gain $16,195,141 $3,255,286
---------------- ----------------
COMPREHENSIVE INCOME $24,525,414 $8,103,648
================ ================
NET INCOME PER SHARE:
Basic $0.38 $0.35
================ ================
Diluted $0.37 $0.35
================ ================
AVERAGE NUMBER OF SHARES
OUTSTANDING:
Basic 21,851,481 13,660,539
================ ================
Diluted 22,443,094 13,971,112
================ ================
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