On Tuesday, June 19, after the markets closed, Annaly Capital Management (NLY) reported that it will pay a Q2 2012 common stock dividend of $0.55 per share. This is in line with Annaly's dividend for the first quarter of 2012, but ten cents below its Q2 2011 dividend. The dividend is payable July 26, to shareholders of record on June 29, with an ex-dividend date of June 27.
Annaly is unlikely to report Q2 results until around the start of August, but the second quarter should have been generally positive for Annaly's portfolio. Annaly last reported its annualized yield on average interest-earning assets was 3.23% during Q1, while its cost of funds was 1.52%. As a result, Annaly had an average interest rate spread of 1.71%, which is the same spread it had during Q4 of 2011 and a 46 basis point decrease from the 2.17% spread it had during Q1 of 2011. Annaly also noted that at the end of Q1, its average yield on investment securities was 3.21% and the average cost of funds on borrowings was 1.51%, for a spread of 1.70%. Annaly also reported that its book value at the end of Q1 was $16.18, a twelve-cent increase from the end of 2011.
According to Jeremy Diamond, Managing Director, Head of Research and Corporate Communications for Annaly, who gave a presentation last week, Annaly often must choose between selling appreciating agency paper and harvesting possible gains, or keeping that paper and potentially losing the premium if the agency calls it.
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