Annaly Q4 Earnings Surpass Estimates, Book Value Declines Y/Y

Zacks Equity Research

Thu, Jan 30, 2025, 7:50 AM 3 min read

Annaly Capital Management, Inc. NLY reported fourth-quarter 2024 adjusted earnings available for distribution (EAD) per average share of 72 cents, which beat the Zacks Consensus Estimate of 67 cents. The figure increased from 68 cents reported in the year-ago quarter.

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For 2024, adjusted EAD per share was $2.7, which beat the Zacks Consensus Estimate of $2.66. This compares unfavorably with $2.86 reported in the year-ago quarter.

NLY recorded a year-over-year decline in book value per share (BVPS). Nonetheless, the company’s average yield on interest-earning assets improved in the reported quarter.

Inside Annaly’s Headlines

Net interest income (NII) was $187.3 million in the reported quarter, which missed the Zacks Consensus Estimate of $242 million. In the prior-year quarter, the company reported a negative $53.6 million in NII.

In 2024, NII was $247.8 million, which missed the Zacks Consensus Estimate of $302.5 million. It reported NII of negative $111.4 million in 2023.

At the fourth-quarter end, Annaly had $103.6 billion of total assets, up 2% from the prior quarter.

In the reported quarter, the average yield on interest-earning assets (excluding premium amortization adjustment or PAA) was 5.26%, up from the prior-year quarter’s 4.64%. The average economic costs of interest-bearing liabilities were 3.79%, up from 3.42% in the year-ago quarter.

Net interest spread (excluding PAA) of 1.47% in the fourth quarter increased from 1.22% in the prior-year quarter. Also, the net interest margin (excluding PAA) was 1.71% compared with 1.58% in the fourth quarter of 2023.

Annaly’s BVPS was $19.15 as of Dec. 31, 2024, down 1.5% from $19.44 reported in the prior-year quarter. At the end of the reported quarter, the company’s economic capital ratio was 14.6%, up from 14% in the prior-year quarter.

In the fourth quarter, the weighted average actual constant prepayment rate was 8.7%, up from 6.3% in the year-ago quarter.

Economic leverage was 5.5X as of Dec. 31, 2024, down from 5.7X sequentially and year over year.

Annaly generated an annualized EAD return on average equity of 14.27% in the fourth quarter, which increased from the prior-year quarter’s 13.76%.