Good morning and welcome to the Annaly Capital Management Second Quarter 2020 Conference Call. Mr. Finkelstein was appointed as Chief Executive Officer and elected to serve on the Board of Directors in March 2020. I didn't in the prepared comments. Eric A. Reeves was elected to serve as an independent director of Annaly in March 2021. From 1991 through 2005, Ms. Bovich served as the U.S. Representative to the United Nations Investment Committee, which advised a global portfolio of approximately $30 billion. 2022 Non-agency securities across legacy CRT jumbo 2.0 and non-QN have seen substantial recovery. Annaly provides supplemental disclosures under the Sustainability Accounting Standards Board (SASB) standards and the Global Reporting Initiative (GRI) standards frameworks. Consequently, we reduced leverage during the quarter from 6.8 times to 6.4 times and made the prudent decision to set our quarterly dividend at $0.22. Learn More on David L. Finkelstein's trading history. It operates through the following investment groups: Agency, Residential Credit, and Mortgage Servicing Rights. You may also find the annual proxy statement by going directly to the company's website. NEW YORK--(BUSINESS WIRE)-- in Accounting from the University of Notre Dame and a M.B.A. from the Harvard Graduate School of Business. GAAP net income improved this quarter as a result of higher GAAP net interest income of $399 million, primarily due to lower interest expense from reduced repo rates and balances and we also experienced lower losses on our core portfolio of $92 million. However for a complete and definitive understanding of the pay practices of any company, users should refer directly to the actual, complete proxy statement. David Finkelstein, Annaly's Chief Executive Officer and Chief Investment Officer, commented: "Since 1997, Annaly has become the largest mortgage REIT in the world and delivered $24 billion in dividends to our shareholders in a variety of interest rate and economic conditions. biography. [Operator Instructions] Please note this event is being recorded. You can see the complete history of Mr Finkelstein stock trades at the bottom of the page. Mr. Reeves has also served as General Counsel & Secretary of The Duchossois Group, a family-owned holding company comprised of diversified operating companies and DCM, since 2007 and its Chief Administrative Officer since 2017. 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Annaly's principal business objective is to generate net income for distribution to its stockholders and to optimize its returns through prudent management of its diversified investment strategies. As an internally managed REIT, we look forward to demonstrating increased transparency and alignment with our shareholders who will benefit from our ability to be more nimble in the way we do business in order to generate long-term value. Our efficiency metrics changed modestly relative to Q1 being 2.1% of equity for the second quarter in comparison to 1.98%. Mr. Finkelstein was elected to serve as a director of Annaly in March 2020 and previously served as Chief Investment Officer. So given the slope of the curve, given the significant decrease in front end OIS rates to zero roughly, we took the opportunity to add hedges and move down the curve and better balance out the hedge profile to bring the average life to about half what it was at the end of the first quarter and it's still about twice the duration may be a little bit more than twice the duration of the asset portfolio currently, but at 40% hedge ratio being more -- a little bit over twice the duration you get to roughly 80% to 90% may be a little bit more interest rate protection assuming a parallel shift in the curve with a still slight steepening bias which we think is the appropriate approach. Additionally during the second quarter, we utilized our share buyback program and have now repurchased $175 million common stock year-to-date. This information is according to proxy statements filed for the 2021 fiscal year. In comparison our base case scenario was altered in a modest release of reserve, which we felt inappropriate given the continued economic uncertainty centered around the evolving pandemic. And prepay is obviously being the uncertainty and the risk which we I don't think you heard a lot about I'm sure this quarter and I think we managed prepay risk as well as anybody. We feel good about where pools are at. On average, Annaly Capital Management Inc executives and independent directors trade stock every 35 days with the average trade being worth of $908,853. Our book value per share was $8.39 for Q2, a 12% increase from Q1 and we generated core earnings per share excluding PAA of $0.27, a 30% increase from the prior quarter. Okay. Corporate Responsibility Committee (Chair)NCG CommitteeRisk Committee. Coronavirus Tips Working and Protection. The conference has now concluded. Participants on this morning's call include David Finkelstein, Chief Executive Officer and Chief Investment Officer; Serena Wolfe, Chief Financial Officer; Mike Fania, Head of Residential Credit; Tim Gallagher, Head of Commercial Real Estate; Tim Coffey, Chief Credit Officer and Ilker Ertas, Head of Securitized Products. No, it is not reflected in the funding cost. David Finkelstein, Annaly's Chief Executive Officer and Chief Investment Officer, commented: "Since 1997, Annaly has become the largest mortgage REIT in the world and delivered $24 billion in . Mr. Finkelstein was elected to serve as a director of Annaly in March 2020. 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 most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. In credit as we've said, we like our portfolio. Annaly Capital Management, Inc. (NYSE:NLY) Q1 2022 Earnings Conference Call April 28, 2022 9:00 AM ETCompany Participants. Comprehensive performance, salary and tenure analysis for the CEO, board and leadership team. Out treasury function is the best in the business and their expertise and exemplary market timing was a key component that helped us weather the market dislocation last quarter and our ability to deliver strong core earnings this quarter. Just had a curiosity what are some things that you are concerned about or really looking closely at, you kind of in the end and immediate term. ANNALY CAPITAL MANAGEMENT Compensation by Company. company's disclosure obligations under Regulation FD and to post and update investor presentations and some more materials on a regular basis. On the financing side, our weighted average cost of borrowing decreased by roughly 60 basis points to 2.7% driven largely by a reduction in LIBOR given the fed cuts. My No. Mr. Schaefer received a B.B.A. June 30, 2022 . David L. Finkelstein C.F.A. From September 2010 to December 2011, Mr. Haylon served as Head of Investment Product Management at General Re New England Asset Management. The economic slowdown brought on by the pandemic has obviously created considerable uncertainty and this is different kind of recession than that which we've experienced in the past, given the unprecedented speed and magnitude of the downturn. Zwirn & Co., L.P. with a focus on credit and debt restructuring. David you had in your comments suggested that Q3 earnings core earnings are on track to exceed the dividend again and I'm curious when you guys think about dividend policy, currently your ROEs are very high. David L. Finkelstein Chief Executive Officer, President and Director: And finally, the company has performed exceptionally well given the challenges faced from remote work and market uncertainty. We remain comfortable with our existing credit portfolios and the associated Cecil reserves and will continue to monitor specific asset performance and economic projections as we determine future reserves. While our allocation agency may increase modestly, we do continue to evaluate opportunities to deploy capital across our three credit businesses and we are beginning to develop the better lends into how each credit sector is evolving and we expect to shift to a more offensive posture in the coming months as we gain more clarity on the economic and real estate landscape. 2020. While at KPMG, Dr. Hannan also founded the KPMG Womens Advisory Board. Prior to Barclays, Mr. Hamilton held various Managing Director roles at Citigroup, Inc. and Salomon Brothers, Inc., where he began his career. Mr. Haylon has previously served on the boards of Aberdeen Asset Management and Phoenix Investment Partners. Mr. Schaefer served as a board member and chair of the audit committee of USI Holdings Corporation from 2008 through 2012. And to repo financing remains ample. from Loras College. Glenn A. Votek was elected to serve as a Director of Annaly in November 2019. So while implied volatility is very low and that's by design on part of the part of the fed and to the extent it continues to decline, it will be a more attractive hedge to our agency portfolio and I would say that in current levels, you should expect it to be a critical component of the portfolio going forward. Data Year: 2021. Annualized core return on average equity excluding PAA was 12.82% for the quarter in comparison to 9.27% for Q1. Most recently he exercised 31,721 units of NLY stock worth $179,224 on 30 June 2022. . Appreciate the color. So it's not an apples-to-apples comparison. Our goal has been to maintain optimal liquidity thresholds and to manage the portfolio within conservative risk parameters to produce the highest level of quality earnings in this market environment. Prior to joining Annaly in December 2019, Ms. Wolfe had served as a Partner at Ernst & Young LLP (E&Y) since 2011. I'm curious how you guys are looking at this and especially in light of having cut the dividend earlier in the year? David L. Finkelstein is President, Chief Executive Officer & Director at Annaly Capital Management, Inc. Thanks. Mr. Campbell received a B.B.A. Liquidity tools have sufficiently supported funding markets and credit facilities have opened channels to credit for businesses, households and local governments, the temporary adjustments to regulations have somewhat encouraged bank lending and most impactful to Annaly's portfolio the asset purchases have supported the smooth functioning of treasury and agency markets. Last updated: 2 February 2023 at 6:03pm EST. Thank you for attending today's presentation. Ms. Denahan has a B.S. Additional information on the Company can be found at www.annaly.com. We delivered an economic return of nearly 15% and achieved core earnings well in excess of our right size dividend. Press Releases | Annaly Capital, https://www.businesswire.com/news/home/20220609005206/en/. Thank you, David and good morning, everyone. While financial conditions have stabilized, there is still significant uncertainty around the long-term economic picture. Insiders at Annaly Capital Management own 0.3% of the company. 96% of the portfolio is in specified pools and we built that portfolio we'll over a number of years and we use the opportunity in March to reduce the pool holdings that we didn't find as attractive and what we're left with is a portfolio that is very high quality. This net worth evaluation does not reflect any other assets that Mr. Finkelstein may own. Prior to that, Mr. Finkelstein held senior Agency MBS trading positions at Salomon Smith Barney, Citigroup Inc. and Barclays PLC. Glenn has been an invaluable part of our leadership team and we thank him for his numerous contributions over the years and look forward to his continuing service on our board. Our next question comes from Rick Shane with JPMorgan. Click Here for Your Free Ultimate Dividend Package. For those interested in conducting a detailed compensation analysis, we recommend that you review the entire proxy statement. We do not undertake and specifically disclaim any obligation to update or revise this information. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. The report demonstrates Annaly's continued focus on setting and measuring progress on . Mr has made over 7 trades of the Annaly Capital Management Inc stock since 2016, according to the Form 4 filled with the SEC. As a reminder, the impending model introduced by the new Cecil is based on expected losses rather than incurred losses, which was the previous management for reserve historically. Mar 16, 2020. Okay. We encourage you to read the disclaimer in our earnings release in addition to our quarterly and annual filings. In addition, he makes $8,203,772 as Pres and CEO & Director at Annaly Capital . The proxy statement's main purpose is to alert shareholders to the annual meeting and provide them information about the issues that will be voted on during the annual meeting, including decisions such as electing directors, ratifying the selection of auditors, and other shareholder-related decisions, including shareholder-initiated initiatives. There was a depreciation in the amount on the balance sheet of MSR, half of which was amortization and the other half of which was the multiple compression. However for a complete and definitive understanding of the pay practices of any company, users should refer directly to the actual, complete proxy statement. Under the standard an entity recognizes its estimate of lifetime expected credit losses as an allowance, which the fed believes will result in more timely recognition of such losses and while changes in economic scenarios and asset performance in the future will impact Cecil reserves in subsequent quarters, current reserve levels should not be considered as a pervasive credit issue within the portfolio or an indication of what reserves may be recorded in the future. You may also find the annual proxy statement by going directly to the company's website. "Athlete | Empire" presents the in-depth, intimate stories of these businesses, as told by the players themselves. 2015. NEW YORK-(BUSINESS WIRE)-Annaly Capital Management, Inc. (NYSE: NLY) ("Annaly" or the "Company") today announced its financial results for the quarter ended March 31, 2022. So balance sheet leverage is incredibly inexpensive right now and abundantly available because of the reserves in the system and in the agency space it's more favorable than structural leverage through derivatives. We believe our focused industry-specific positioning within nondiscretionary defensive and mission-critical names will generate the outperformance for peers that will further differentiate our brand in the sector. Prior to joining Annaly in 2013, Mr. Votek was an Executive Vice President and Treasurer at CIT Group since 1999 and also President of Consumer Finance since 2012. is the Pres, CEO & Director at Annaly Capital Management Inc. As the Pres and CEO & Director of Annaly Capital Management Inc, the total compensation of Mr A at Annaly Capital Management Inc is $8,203,772. Annaly Capital Management, Inc. (NYSE:NLY) Q2 2020 Earnings Conference Call July 30, 2020 9:00 AM ET, David Finkelstein - CEO & Chief Investment Officer, Tim Gallagher - Head, Commercial Real Estate. This button displays the currently selected search type. Annaly is a leading diversified capital manager with investment strategies across mortgage finance. Nevertheless, financial conditions have improved considerably. Mr. Votek has over 30 years of experience in financial services. Dr. Hannan is a former Global Lead Partner, National Managing Partner and Vice Chairman of KPMG, LLP, the U.S. member firm of the global audit, tax and advisory services firm KPMG International. If the United States goes to war with another nuclear armed superpower, this could have a devastating impact on your retirement portfolio. David Finkelstein - President, CEO & Director. The Mortgage Servicing Rights group provides the right to service residential mortgage loans in exchange for a portion of the interest payments made on the loans. Most recently he exercised 7,989 units of NLY stock worth $50,490 on 29 January 2022. . Ms. Wolfe currently serves on the boards of Berkshire Grey, Inc. and Doma Holdings, Inc. Ms. Wolfe received a Bachelor of Commerce in Accounting from the University of Queensland. 1 dividend stock for a LIFETIME of income. We add the incremental dollar role income to core income and then the outcome. The dividend represented 10.5% yield on our book value which is in line with our historical average while being competitive relative to our peers and various fixed income benchmarks. Mr. Finkelstein was elected to serve as a director of Annaly in March 2020. The corporate mailing address for Mr. Finkelstein and other Annaly Capital Management executives is 1211 AVENUE OF THE AMERICAS, NEW YORK NY, 10036. The report demonstrates Annalys continued focus on setting and measuring progress on environmental, social and governance (ESG) goals, as well as its commitment to providing increased disclosure and transparency. Financial Highlights. The oldest executive at Annaly Capital Management Inc is FrancineBovich, 68, who is the Independent Director. It's all dependent Rick on the attractiveness of the repurchase option relative to other options in our capital allocation policy. And as a consequence of that portfolio, we did see a fair amount of appreciation in those pools in the second quarter as markets stabilize and that is one of the risks I think going forward. Any forward-looking statements made during today's call are subject to certain risks and uncertainties including with respect to COVID-19 impacts, which are outlined in the risk factors section in our most recent annual and quarterly SEC filings. The average price of those shares was I believe $6.30 or meaningfully above that level now. Kathy Hopinkah Hannan, Ph.D., C.P.A. As we gain further clarity around the long-term implications of COVID, we are reassured by the stable and defensive nature of our portfolio and remain confident in its ability to withstand prolonged bouts of market volatility. Learn More on Annaly Capital Management's active insiders. The portfolio generated 188 points of NIM up Q1 of 118 basis points, driven primarily by the decrease in cost on funds that I mentioned a moment ago. From 1990 until 1994, he was Senior Vice President of Fixed-Income at Phoenix Home Life Insurance Company. With respect to the incremental benefit of the TBA position for the second quarter, I'll say I think the actual dollar contribution or in pennies was about $0.07 and with respect to the NIM contribution, Serena you can. Wondering if you could just provide a bit more color on your prepared remarks on the potential to increase agency allocation. Mr. Hamilton received a B.S. We've isolated around where we ended the quarter and right now as about last night it's up roughly 1%. Mr. Finkelstein received a B.A. Content referenced in today's call can be found in our second quarter 2020 investor presentation and second quarter 2020 financial supplement, both found under the Presentation section of our website. Mr. Reeves is a member of the Henry Crown Fellows at the Aspen Institute and was honored as a Chicago United Business Leader of Color. Prior to joining Annaly in 2013, Mr. Finkelstein served for four years as an Officer in the Markets Group of the Federal Reserve Bank of New York where he was the primary strategist and policy advisor for the MBS Purchase Program. In fact some of our industry concentrations have maturely benefited from the current environment. Audit CommitteeManagement Development and Compensation CommitteeRisk Committee. Our measured approach to weathering the crisis served us well we feel very good about our positioning as the recovery progresses as I'll get into more detail. This point was evidenced the quarter with the improvement in fair value measures and resulting improved book value. Okay. Get notified the next time David L. Finkelstein buys or sells Annaly Capital Management stock. David L. Finkelstein, who has been serving as Annaly's Chief Investment Officer, Agency and RMBS, has been named Annaly's . The stock was acquired at an average cost of $5.56 per share, with a total value of $1,112,000.00. Interim CEO Glenn Votek to Assume Role of Senior Advisor and Remain on the Board of Directors. A reconciliation of GAAP to non-GAAP measures is included in our earnings release. ANNALY CAPITAL MANAGEMENT annual reports of executive compensation and pay are most commonly found in the Def 14a documents. So thank you, guys. And with that I'll turn the call over to David. Signaling from a fed on continued low rates combined with considerable injection of additional reserves in the financial system through repo operation and asset purchases have led to very stable funding conditions with repo markets experiencing no signs of stress through the quarter even on pivotal month end and quarter end days 1.8. The housing market remained strong given long-term positive fundamentals, which we believe will help the ultimate recovery. Annaly Capital Management Inc executives and other stock owners filed with the SEC include: Track performance, allocation, dividends, and risks, Annotate, download XLSX & look up similar tables, Filter, compare, and track coins & tokens, insiders at Annaly Capital Management Inc, Stocks and cryptocurrency portfolio tracker. Dr. Hannan previously served as the Midwest Area Managing Partner for KPMGs Tax Services. Prior to that, Mr. Finkelstein held senior Agency MBS trading positions at Salomon Smith Barney, Citigroup Inc. and Barclays PLC. Most recently he exercised 6,186 units of NLY stock worth $125,761 on 1 February 2023. Ms. Wolfe held a variety of roles across industries since beginning her career at E&Y in 1998, including most recently as EYs Central Region Real Estate Hospitality & Construction leader since 2017. As the Pres and CEO & Director of Annaly Capital Management Inc, the total compensation of Mr A at Annaly Capital Management Inc is $8,203,772. From 1995 until 2002, he held the position of Executive Vice President of Phoenix Investment Partners, Ltd., a NYSE-listed company, and President of Phoenix Investment Counsel, where he was responsible for the management and oversight of $25 billion in closed-end and open-end mutual funds, corporate pension funds and insurance company portfolios. As I mentioned we out-earned the dividend by $0.05 this quarter and absent another market dislocation or other foreseen developments, we expect Q3 core canings to also the dividend. David L. Finkelstein has not been actively trading shares of Annaly Capital Management within the last three months.
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