NEW YORK--(BUSINESS WIRE)--April 25, 2003--Annaly Mortgage
Management, Inc. (NYSE: NLY) today reported earnings for the quarter
ended March 31, 2003 of $50,775,000 or $0.60 per average share
outstanding, as compared to $50,426,000 or $0.60 per average share
outstanding for the quarter ended December 31, 2002 and $53,043,000 or
$0.69 per average share outstanding for the quarter ended March 31,
2002.
The Company was able to provide an annualized return on average
equity of 18.83% for the quarter ended March 31, 2003, as compared to
18.63% for the quarter ended December 31, 2002 and 25.32% for the
quarter ended March 31, 2002. Dividends declared for the quarter ended
March 31, 2003 were $0.60 per share, compared to $0.60 for the quarter
ended December 31, 2002 and $0.63 per share for the quarter ended
March 31, 2002. The annualized dividend yield for the quarter, based
on the March 31, 2003 closing price of $17.47, was 13.74%.
For the quarter ended March 31, 2003, the yield on average earning
assets was 3.23% and the cost of funds on the average repurchase
balance was 1.68%, which equates to an interest rate spread of 1.55%.
This is a 3 basis point decrease over the 1.58% interest rate spread
for the quarter ended December 31, 2002, when the yield on average
mortgage-backed securities was 3.56% and the cost of funds on the
average repurchase balance was 1.98%, and a 110 basis point decrease
over the 2.65% interest rate spread for the quarter ended March 31,
2002, when the yield on average mortgage-backed securities was 4.88%
and the cost of funds on the average repurchase balance was 2.23%.
The Constant Prepayment Rate was 41% during the first quarter of 2003,
as compared to 43% in the fourth quarter of 2002 and 28% for the
quarter ended March 31, 2002.
Subsequent to quarter end, the Company raised approximately $151.2
million in net proceeds through a secondary offering of 9,300,700
shares of common stock. Commented Annaly's Chairman, Chief Executive
Officer and President, Michael A.J. Farrell: "Record-low interest
rates have helped the average homeowner reduce his or her borrowing
costs to multi-decade lows and support our nation's economy. The
resulting record-setting prepayment speeds, however, have had a
continuing negative impact on the yield earned on the Company's
portfolio of mortgage-backed securities. For as long as this
environment continues, we will continue to see high levels of
amortization. Nevertheless, the current market presents numerous
opportunities and we feel confident that the new capital we have
recently raised will be profitably invested for the benefit of our
shareholders."
The weighted average purchase price of the portfolio at March 31,
2003 and March 31, 2002 was 102.6 and 102.0, respectively. For the
quarter ended March 31, 2003, the Company's gain on sale of assets was
$11.0 million as compared to $3.4 million for the same quarter in the
prior year. Leverage at March 31, 2003 was 9.5:1, compared to 9.4:1 at
December 31, 2002 and 8.3:1 at March 31, 2002.
General and administration expenses, as a percent of average
assets was 0.12% and 0.14% for the quarters ended March 31, 2003 and
2002, respectively. In addition, the Company's Dividend Efficiency
Ratio, calculated as general and administrative expenses divided by
dividends paid, was 7.3% and 6.2% for the quarters ended March 31,
2003 and 2002, respectively.
At March 31, 2003 and 2002, respectively, the Company had a book
value of $12.72 and $12.17. The Company classifies all investment
securities as "available for sale;" therefore requiring the Company to
record the entire portfolio at market value. Fixed rate securities
comprised approximately 38% of the Company's portfolio at March 31,
2003. The balance of the portfolio was comprised of 33% adjustable
rate mortgages and 29% LIBOR floating rate collateralized mortgage
obligations. The Company has continued to avoid the introduction of
credit risk into its portfolio. As of March 31, 2003, all of the
assets in the Company's portfolio were FNMA, GNMA, FHLMC
mortgage-backed securities, and FHLB debentures, which carry an actual
or implied "AAA" rating.
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 cost of borrowing to finance their
acquisition. The Company has elected to be taxed as a real estate
investment trust ("REIT") and currently has 93,969,451 shares of
common stock outstanding.
The Company will hold the first quarter 2003 earnings conference
call on Monday, April 28, 2003 at 4:00 p.m. EST. The number to call is
1-800-915-4836. The re-play number is 1-800-428-6051 and the pass code
is 291732. There will be a web cast of the call on www.annaly.com. If
you would like to be added to the e-mail distribution list, please
visit www.annaly.com, click on E-Mail alerts, enter your e-mail
address where indicated and click the Subscribe button.
This news release and our public documents to which we refer
contain or incorporate by reference certain forward-looking statements
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 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 for the fiscal year ended December
31, 2002. We do not undertake, and specifically disclaim 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 after the date of
such statements.
ANNALY MORTGAGE MANAGEMENT, INC.
STATEMENTS OF FINANCIAL CONDITION
MARCH 31, DECEMBER 31,
2003 2002
(Unaudited)
(dollars in thousands)
-------------------------
ASSETS
Cash and cash equivalents $ 945 $ 726
Mortgage-Backed Securities, at fair value 11,674,910 11,551,857
Federal Home Loan Bank Debentures, at fair
value 643,160 -
Receivable for Mortgage-Backed Securities
sold 304,766 55,954
Accrued interest receivable 50,087 49,707
Other assets 873 840
------------ ------------
Total assets $12,674,741 $11,659,084
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements $10,192,049 $10,163,174
Payable for Mortgage-Backed Securities
purchased 1,335,427 338,691
Accrued interest payable 15,915 14,935
Dividends payable 50,789 57,499
Other liabilities 2,816 2,812
Accounts payable 1,033 1,907
------------ ------------
Total liabilities 11,598,029 10,579,018
------------ ------------
Stockholders' Equity:
Common stock: par value $.01 per share;
500,000,000 authorized, 84,647,484 and
84,569,206 shares issued and
outstanding, respectively 846 846
Additional paid-in capital 1,004,370 1,003,200
Accumulated other comprehensive gain 71,000 75,511
Retained earnings 496 509
------------ ------------
Total stockholders' equity 1,076,712 1,080,066
------------ ------------
Total liabilities and stockholders' equity $12,674,741 $11,659,084
============ ============
ANNALY MORTGAGE MANAGEMENT, INC
STATEMENTS OF OPERATIONS
(Unaudited)
For the For the
Quarter Quarter
Ended Ended
March 31, March 31,
2003 2002
(dollars in the
thousands, except per
share data)
-----------------------
INTEREST INCOME $ 87,500 $ 92,900
INTEREST EXPENSE 44,048 40,012
----------- -----------
NET INTEREST INCOME 43,452 52,888
GAIN ON SALE OF MORTGAGE-BACKED SECURITIES 11,020 3,410
GENERAL AND ADMINISTRATIVE EXPENSES 3,697 3,255
----------- -----------
NET INCOME 50,775 53,043
----------- -----------
OTHER COMPREHENSIVE INCOME
Unrealized gain (loss) on available-for-sale
securities 6,509 (4,257)
Less: reclassification adjustment
for net gains included in net income (11,020) (3,410)
----------- -----------
Other comprehensive loss (4,511) (7,667)
----------- -----------
COMPREHENSIVE INCOME $ 46,264 $ 45,376
=========== ===========
NET INCOME PER SHARE:
Basic $ 0.60 $ 0.69
=========== ===========
Diluted $ 0.60 $ 0.69
=========== ===========
AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic 84,606,786 76,709,836
=========== ===========
Diluted 84,837,390 77,017,431
=========== ===========
CONTACT: Annaly Mortgage Management, Inc.
Investor Relations
1- (888) 8Annaly
www.annaly.com
SOURCE: Annaly Mortgage Management, Inc.