Annaly Capital Management (NLY) Q1 2025 earnings summary

Executive summary

• Delivered a 3% economic return for Q1 2025, with a dividend increase to $0.70 per share and stable economic leverage at 5.7x, reflecting strong earnings momentum and prudent risk management.

• Portfolio totaled $84.9 billion, with $75.0 billion in Agency assets, which grew 6% quarter-over-quarter; diversified holdings and robust liquidity supported performance.

• Maintained a defensive hedge position and enhanced liquidity to navigate market volatility, with a 95% hedge ratio and low leverage.

• Raised $495.7 million in accretive common equity via at-the-market program, supporting capital position.

• Management highlights a strong balance sheet and diversified housing finance portfolio for navigating ongoing volatility.

Financial highlights

• Earnings available for distribution (EAD) per share held steady at $0.72, with annualized EAD return on average equity at 14.43%.

• Book value per share was $19.02, declining slightly from $19.15 in Q4 2024.

• GAAP net income per share was $0.15, down from $0.78 in Q4 2024 and $0.85 in Q1 2024.

• Net interest margin (excluding PAA) was 1.69% for Q1 2025.

• Dividend yield reached 13.8% based on Q1 2025 dividend and period-end price.

Outlook and guidance

• Management expects continued market volatility due to interest rate movements, MBS spread changes, and macroeconomic uncertainty.

• Positioned for ongoing bulk MSR activity, stable portfolio performance, and opportunistic capital deployment in Agency MBS, residential credit, and MSR segments.

• Anticipate regulatory reforms and supportive technical factors for Agency MBS in H2 2025.