Exhibit 99.1
Annaly Mortgage Management, Inc. Announces 1st Quarter 2004 Earnings
NEW YORK--(BUSINESS WIRE)--April 26, 2004--Annaly Mortgage
Management, Inc. (NYSE: NLY) today reported earnings for the quarter
ended March 31, 2004 of $58,843,000 or $0.52 basic earnings per share,
as compared to $50,775,000 or $0.60 earnings per share for the quarter
ended March 31, 2003 and $42,697,000 or $0.44 per average share
outstanding for the quarter ended December 31, 2003.
The Company was able to provide an annualized return on average
equity of 16.59% for the quarter ended March 31, 2004, as compared to
18.83% for the quarter ended March 31, 2003 and 14.88% for the quarter
ended December 31, 2003. Dividends declared for the quarter ended
March 31, 2004 were $0.50 per share, compared to $0.60 per share for
the quarter ended March 31, 2003 and $0.47 for the quarter ended
December 31, 2003. The annualized dividend yield for the quarter,
based on the March 31, 2004 closing price of $19.55, was 10.23%.
Michael A.J. Farrell, Chairman, Chief Executive Officer and
President of Annaly, said, "We are pleased with our solid performance
in the first quarter as the portfolio benefited from slower prepayment
speeds and an improved spread between the yield on our assets and the
cost to finance them. Interest rates fell in the period, which
resulted in a corresponding increase in the Mortgage Bankers
Association Refinancing Index as homeowners took advantage of cheaper
financing opportunities. While the effects of this pickup in
refinancing activity will be felt in the portfolio during the second
quarter, the recent backup in rates should lead to positive
fundamentals thereafter."
For the quarter ended March 31, 2004, the yield on average earning
assets was 3.16% and the cost of funds on the average repurchase
balance was 1.48%, which equates to an interest rate spread of 1.68%.
This is a 13 basis point increase over the 1.55% interest rate spread
for the quarter ended March 31, 2003 and a 16 basis point increase
over the 1.52% interest rate spread for the quarter ended December 31,
2003. For the quarter ended March 31, 2004, the Company's gain on sale
of a Mortgage-Backed Securities was $595,000 as compared to $11.0
million for the quarter ended March 31, 2003 and zero gains in the
prior quarter.
General and administrative expenses, as a percentage of average
assets were 0.15%, 0.12%, and 0.13% for the quarters ended March 31,
2004, March 31, 2003, and December 31, 2003, respectively. In
addition, the Company's Dividend Efficiency Ratio, calculated as
general and administrative expenses divided by dividends declared, was
9.8%, 7.3% and 9.4% for the quarters ended March 31, 2004, March 31,
2003, and December 31, 2003, respectively.
The Constant Prepayment Rate decreased to 31% during the first
quarter of 2004, as compared to 41% during the first quarter of 2003,
and 37% during the fourth quarter of 2003. The weighted average
purchase price of the portfolio was 102.5 at March 31, 2004, 102.6 at
March 31, 2003 and 102.5 at December 31, 2003. The total amount of
amortization for the quarters ended March 31, 2004, March 31, 2003,
and December 31, 2003 was $41,501,000, $48,519,000, and $38,390,000,
respectively. Leverage at March 31, 2004 was 8.7:1, in comparison to
9.5:1 at March 31, 2003 and 9.6:1 at December 31, 2003.
At March 31, 2004, March 31, 2003, and December 31, 2003, the
Company had a common stock book value of $13.45, $12.72, and $11.96,
respectively. 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 26% of the Company's portfolio at March 31, 2004. The
balance of the portfolio was comprised of 62% adjustable rate
mortgages and 12% LIBOR floating rate collateralized mortgage
obligations. The Company has continued to avoid the introduction of
credit risk into its portfolio. As of March 31, 2004, all of the
assets in the Company's portfolio were FNMA, GNMA, FHLMC
mortgage-backed securities, and agency debentures, which carry an
actual or implied "AAA" rating.
"Our portfolio composition and our leverage ratio reflect a number
of market realities," said Wellington Denahan, Annaly's Vice Chairman
and Chief Investment Officer. "Bonds continue to be volatile and
despite the recent backup interest rates are still near historical
lows. With this backdrop, we believe our prudence and our strong
capital base leave us well-positioned to take advantage of future
opportunities. Our investment philosophy has always been to manage the
portfolio for the long-term--to generate a consistent dividend stream
for shareholders over time."
During the quarter ended March 31, 2004, the Company (i) announced
that it signed a definitive agreement to acquire Fixed Income Discount
Advisory Company upon shareholder approval; (ii) raised approximately
$363.5 million in net proceeds through a follow-on offering of
20,700,000 shares of common stock; and (iii) raised approximately
$102.9 million in net proceeds through an offering of 4,250,000 shares
of 7.875% Series A Cumulative Redeemable Preferred Stock.
"The path to growth for a REIT is paved with accretive, sequential
capital raises,"said Mr. Farrell. "The success of our offerings this
quarter has been an affirmation by the market of the strength of our
business model and the consistency of our track record, through a wide
range of interest rate environments."
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 117,884,862 shares of
common stock outstanding.
The Company will hold the first quarter 2004 earnings conference
call on April 27, 2004 at 10:00 a.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 353447. 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, 2003. 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
(dollars in thousands)
MARCH 31, DEC. 31, SEPT. 30,
2004 2003 2003
(Unaudited) (Unaudited)
--------------------------------
ASSETS
Cash and cash equivalents $ 738 $ 247 $ 3,381
Mortgage-Backed Securities, at fair
value 17,046,117 11,956,512 11,628,271
Agency Debentures, at fair value 1,033,481 978,167 976,814
Receivable for preferred stock
proceeds 102,903 - -
Receivable for Mortgage-Backed
Securities sold 81,200 - 177,304
Accrued interest receivable 71,446 53,743 53,955
Other assets 2,808 1,617 1,233
------------------------------------
Total assets $18,338,693 $12,990,286 $12,840,958
====================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements $14,689,300 $11,012,903 $11,201,897
Payable for Mortgage-Backed
Securities purchased 1,873,813 761,115 445,148
Accrued interest payable 21,299 14,989 13,868
Dividends payable 58,942 45,155 26,876
Other liabilities 4,664 4,017 4,294
Accounts payable 2,087 2,887 3,147
------------------------------------
Total liabilities 16,650,105 11,841,066 11,695,230
------------------------------------
Stockholders' Equity:
7.875% Series A Cumulative
Redeemable Preferred
Stock: 4,250,000 shares 102,870 - -
Common stock: par value $.01 per
share;
500,000,000 authorized,
117,866,932, 96,074,096,
95,964,915, 94,030,753, and
84,647,484
shares issued and outstanding,
respectively 1,179 961 960
Additional paid-in capital 1,578,778 1,194,159 1,192,819
Accumulated other comprehensive
income (loss) 4,500 (47,261) (51,870)
Retained earnings 1,261 1,361 3,819
------------------------------------
Total stockholders' equity 1,688,588 1,149,220 1,145,728
------------------------------------
Total liabilities and stockholders'
equity $18,338,693 $12,990,286 $12,840,958
====================================
JUNE 30, MARCH 31,
2003 2003
(Unaudited) (Unaudited)
--------------------------------
ASSETS
Cash and cash equivalents $ 304 $ 945
Mortgage-Backed Securities, at fair
value 12,887,495 11,674,910
Agency Debentures, at fair value 1,375,980 643,160
Receivable for preferred stock
proceeds - -
Receivable for Mortgage-Backed
Securities sold 387,218 304,766
Accrued interest receivable 58,026 50,087
Other assets 1,104 873
--------------------------------
Total assets $14,710,127 $12,674,741
================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements $12,162,333 $10,192,049
Payable for Mortgage-Backed
Securities purchased 1,306,238 1,335,427
Accrued interest payable 16,788 15,915
Dividends payable 56,420 50,789
Other liabilities 4,708 2,816
Accounts payable 2,202 1,033
--------------------------------
Total liabilities 13,548,689 11,598,029
--------------------------------
Stockholders' Equity:
7.875% Series A Cumulative
Redeemable Preferred
Stock: 4,250,000 shares - -
Common stock: par value $.01 per
share;
500,000,000 authorized,
117,866,932, 96,074,096,
95,964,915, 94,030,753, and
84,647,484
shares issued and outstanding,
respectively 940 846
Additional paid-in capital 1,157,092 1,004,370
Accumulated other comprehensive
income (loss) 1,190 71,000
Retained earnings 2,216 496
--------------------------------
Total stockholders' equity 1,161,438 1,076,712
--------------------------------
Total liabilities and stockholders'
equity $14,710,127 $12,674,741
================================
ANNALY MORTGAGE MANAGEMENT, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Quarters Ended
March December September June March
31, 31, 30, 30, 31,
2004 2003 2003 2003 2003
--------------------------------------------------------
Interest Income $114,341 $89,186 $66,855 $93,892 $87,500
Interest Expense 50,303 42,264 43,922 51,770 44,048
----------------------------------------------------
Net Interest
Income 64,038 46,922 22,933 42,122 43,452
Gain on Sale of
Mortgage-Backed
Securities 595 - 9,656 20,231 11,020
General and
Administrative
Expenses 5,790 4,225 4,110 4,201 3,697
---------------------------------------------------
Net Income 58,843 42,697 28,479 58,152 50,775
---------------------------------------------------
Comprehensive
Income (Loss):
Unrealized gain
(loss) on
available-for-
sale securities 52,356 4,609 (43,405) (49,579) 6,509
Less:
reclassification
adjustment for
net gains
included
in net income (595) - (9,656) (20,231) (11,020)
---------------------------------------------------
Other
comprehensive
income (loss) 51,761 4,609 (53,061) (69,810) (4,511)
---------------------------------------------------
Comprehensive
Income (Loss) $110,604 $47,306 ($24,582) ($11,658) $46,264
===================================================
Net Income Per
Share:
Basic $0.52 $0.44 $0.30 $0.62 $0.60
===================================================
Diluted $0.52 $0.44 $0.30 $0.62 $0.60
========================================================
Weighted Average
Number of Shares
Outstanding:
Basic 112,506,206 96,027,468 94,685,685 93,384,128 84,606,786
========================================================
Diluted 113,259,307 96,232,899 95,500,486 93,588,024 84,837,390
========================================================
CONTACT: Investor Relations
Annie Montoya, 1-(888)8Annaly
www.annaly.com