Annaly Capital Management (NLY) posted a second-quarter GAAP net income of $900.1 million, or $0.93 per average common share, compared to a GAAP net loss of $476.5 million, or $0.52 loss per average common share, for the quarter ended March 31, 2015.
This is also up from a GAAP net loss of $335.5 million, or $0.37 loss per average common share, for the quarter ended June 30, 2014.
Annaly attributed the quarterly increase to favorable changes in realized and unrealized losses on its interest rate swaps given the higher interest rate environment.
Core earnings for the quarter hit $411.1 million, or $0.41 per average common share, compared to $254.1 million, or $0.25 per average common share, for the quarter ended March 31, 2015, and $300.4 million, or $0.30 per average common share, for the quarter ended June 30, 2014.
Earnings per share beat analyst estimates of $0.41 by $0.14.
“Our quarterly results are a strong reminder of the positive impacts higher rates can have on our earnings. We are very comfortable with our portfolio and look forward to the opportunities ahead,” said Wellington Denahan, Annaly’s CEO and incoming executive chairman.
Separately, Annaly announced that its board of directors authorized the repurchase of up to $1 billion of its outstanding common shares through Dec. 31, 2016.
“I want to congratulate our investment teams for their performance in the quarter. While we believe our diversification strategy uniquely positions us to generate attractive risk-adjusted returns, we also feel it is prudent to have a share repurchase program in place as a capital allocation option as we approach periods of increased volatility tied to a potential shift in monetary policy,” said Kevin Keyes, president and incoming CEO of Annaly.