Annaly posts strong Q2 return as loan acquisitions reach a record

Transcript intelligence

What changed

Compared with the prior-quarter analysis, Q2 showed a higher 5.5% economic return, a dividend increase to $0.75 per share, agency MBS growth to $95 billion, a record $7.1 billion of quarterly loan acquisitions, and a stable $4.1 billion MSR portfolio with a higher-loan-balance focus. The supplied analysis also notes roughly $450 million of ATM equity raised, 5.6x economic leverage, and 13 non-agency deals totaling $6.8 billion.

Guidance delta

Maintained; the supplied analysis does not identify a change to guidance sentiment.

Key takeaways

• Q2 economic return was 5.5%, with earnings available for distribution exceeding the dividend for the ninth consecutive quarter.
• The quarterly dividend increased to $0.75 per share.
• Agency MBS assets grew to $95 billion, representing 57% of capital.
• Residential credit recorded a quarterly loan-acquisition record of $7.1 billion.
• The MSR portfolio was stable at $4.1 billion, with a shift toward higher-loan-balance assets.

Management priorities

• Deploy incremental capital primarily to residential credit while maintaining agency investments.
• Continue selective MSR purchases, focusing on higher-loan-balance pools.
• Expand non-QM and DSCR exposure and pursue additional billion-dollar securitizations.
• Maintain conservative leverage and increase warehouse capacity to support growth.
• Use partnerships and the sub-servicer network to pursue opportunistic MSR acquisitions.