-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NwjvIdcbN08SMQQOhloC3plMntsk6A09CKGsTi9e/Ju7Rm8MvWWQrtFQXdjnMBdn qleI8vysXxl04Uc4D/dLtw== 0001157523-04-003794.txt : 20040426 0001157523-04-003794.hdr.sgml : 20040426 20040426165011 ACCESSION NUMBER: 0001157523-04-003794 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040426 ITEM INFORMATION: FILED AS OF DATE: 20040426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANNALY MORTGAGE MANAGEMENT INC CENTRAL INDEX KEY: 0001043219 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 223479661 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13447 FILM NUMBER: 04754640 BUSINESS ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 212 696 0100 MAIL ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 8-K 1 a4625155.txt ANNALY MORTGAGE MANAGEMENT 8-K DOCUMENT _________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) April 26, 2004 Annaly Mortgage Management, Inc. ----------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Maryland 1-13447 22-3479661 ----------------------- ------- ------------ State or Other Jurisdiction (Commission (I.R.S. Employer Of Incorporation) File Number) Identification No.) 1211 Avenue of the Americas Suite 2902 New York, New York 10036 ------------------ ----- (Address of Principal Executive (Zip Code) Offices) Registrant's telephone number, including area code: (212) 696-0100 No Change ------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 12. Results of Operations and Financial Condition On April 26, 2003, Annaly Mortgage Management, Inc. issued a press release announcing its financial results for the fiscal quarter ended March 31, 2004. A copy of the press release is furnished as Exhibit 99.1 to this report. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ANNALY MORTGAGE MANAGEMENT, INC. By: /s/Kathryn Fagan ------------------------------------ Name: Kathryn Fagan Title: Chief Financial Officer Dated: April 26, 2004 EXHIBIT INDEX ------------- Exhibit No. Description - ----------- ----------- 99.1 Press Release, dated April 26, 2004, issued by Annaly Mortgage Management, Inc. EX-99.1 2 a4625155ex99.txt PRESS RELEASE 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 -----END PRIVACY-ENHANCED MESSAGE-----