Annaly Capital Management (NLY) Q4 2024 earnings summary

Executive summary

• Achieved a 1.3% economic return for Q4 and up to 12% for full year 2024, with all business segments contributing positively and EAD per share exceeding dividends.

• Book value per share ended at $19.15, with a declared $0.65 quarterly dividend and prudent leverage at 5.5x.

• Portfolio totaled $80.9B, with $70.6B in Agency MBS, and strong growth in Residential Credit and MSR segments.

• Raised $1.6B in accretive equity through at-the-market sales in 2024.

• Maintained conservative leverage and liquidity, supporting a stable dividend outlook for 2025.

Financial highlights

• Q4 2024 GAAP net income per share: $0.78; EAD per share: $0.72; full-year GAAP net income: $1.01B.

• Book value per share: $19.15, down from $19.54 in Q3.

• Dividend per share: $0.65; annualized dividend yield: 14.2%.

• Net interest margin (ex. PAA): 1.71% in Q4, up from 1.52% in Q3.

• Economic leverage: 5.5x; total stockholders' equity: $12.6B.

Outlook and guidance

• Confident in maintaining current dividend level for 2025, with earnings run rate expected to remain consistent with Q4.

• Agency MBS, Residential Credit, and MSR businesses are well-positioned for growth, with expectations for non-QM origination market expansion in 2025.

• Volatility expected to be more contained in 2025, with agency market technicals improved and spread volatility at multi-year lows.

• Fed's slower easing cycle and persistent inflation may moderate rate cut expectations in 2025.

• Company remains prepared for volatility with low leverage, ample liquidity, and dynamic hedging.