Core Viewpoint - Annaly Capital Management is a significant entity in the REIT sector, focusing on mortgage-backed securities, with recent financial performance showing strong earnings but challenges in revenue expectations [1][2][3]. Financial Performance - Annaly reported quarterly earnings of $0.74 per share, exceeding the Zacks Consensus Estimate of $0.72, marking a +3.25% earnings surprise and an improvement from $0.72 per share in the same quarter last year [2]. - The company reported revenues of $366.58 million for the quarter ending December 2025, which fell short of the Zacks Consensus Estimate by 21.84%, although this represents a significant increase from $187.29 million in revenues from the same period last year [3]. Stock Performance - Currently, NLY's stock is priced at $23.84, reflecting a decrease of 1.69% or $0.41, with a trading range between a low of $23.72 and a high of $24.25 during the day [4]. - Over the past year, NLY has reached a high of $24.52 and a low of $16.60, with a market capitalization of approximately $16.28 billion and a trading volume of 4,775,668 shares on the NYSE [4]. Analyst Ratings - On January 29, 2026, Wells Fargo maintained an "Overweight" rating for NLY, with a "hold" action, and raised its price target from $23 to $25 [1].

Core Insights - Annaly Capital Management, Inc. (NLY) reported fourth-quarter 2025 earnings available for distribution (EAD) per average share of 74 cents, exceeding the Zacks Consensus Estimate of 72 cents and up from 72 cents in the same quarter last year [1][9] - For the full year 2025, EAD per share was $2.92, surpassing the Zacks Consensus Estimate of $2.90 and showing an increase from $2.70 in the previous year [2] Financial Performance - Net interest income (NII) for the fourth quarter was $366.6 million, missing the Zacks Consensus Estimate by 21.8%, compared to $187.3 million in the prior-year quarter [3] - For the full year 2025, NII totaled $1.13 billion, falling short of the Zacks Consensus Estimate of $1.24 billion, with a reported NII of $247.8 million in 2024 [3] Asset and Yield Metrics - Total assets at the end of the fourth quarter reached $135.6 billion, reflecting a 7.7% increase from the prior quarter [3] - The average yield on interest-earning assets (excluding premium amortization adjustment) was 5.44%, up from 5.26% in the prior-year quarter [4] - The average economic costs of interest-bearing liabilities increased to 3.95% from 3.79% in the year-ago quarter [4] - The net interest spread (excluding PAA) was 1.49%, slightly up from 1.47% in the prior-year quarter, while the net interest margin (excluding PAA) was 1.69%, down from 1.71% in the fourth quarter of 2024 [4] Book Value and Capital Ratios - Book value per share (BVPS) as of December 31, 2025, was $20.21, an increase from $19.15 in the prior-year quarter [5][9] - The economic capital ratio stood at 14.9%, up from 14.8% in the prior-year quarter [5] - Economic leverage was 5.6X as of December 31, 2025, compared to 5.5X in the year-ago quarter [5] Return on Equity - Annaly generated an annualized EAD return on average equity of 14.28% in the fourth quarter, slightly increasing from 14.27% in the prior-year quarter [6] Market Outlook - The fourth-quarter results were bolstered by higher average yields and growth in total assets, with prudent asset selection expected to drive future performance [7] - Despite the increase in book value per share, ongoing market uncertainty may present challenges for achieving consistent returns [7]

Financial Data and Key Metrics Changes - The company's book value per share increased by 5% from $19.25 in the prior quarter to $20.21 as of December 31, 2025 [23] - Earnings Available for Distribution (EAD) rose by $0.01 to $0.74, exceeding the dividend for the quarter [24] - Economic return for Q4 was 8.6%, bringing the full-year economic return to 20.2% [23][24] - Economic leverage decreased to 5.6 turns, down from the previous quarter [8][25] Business Line Data and Key Metrics Changes - The agency portfolio ended 2025 at $93 billion, an increase of nearly $6 billion quarter-over-quarter and $22 billion year-over-year, representing 62% of the firm's capital [9] - The residential credit portfolio reached $8 billion, up $1.1 billion quarter-over-quarter, representing approximately 19% of the firm's capital [13] - The mortgage servicing rights (MSR) portfolio ended at $3.8 billion, a $280 million increase quarter-over-quarter and a 15% increase year-over-year [17] Market Data and Key Metrics Changes - Fixed income markets showed strong performance, with the U.S. aggregate bond index registering the highest total return since 2020 [7] - The yield curve steepened during the quarter as short-term yields fell while long-term yields rose modestly [7] - The agency market experienced significant spread tightening following GSE's MBS purchase announcements [20] Company Strategy and Development Direction - The company aims to increase capital allocation to residential credit and MSR, targeting a long-term equity allocation of 50% Agency MBS, 30% RESI, and 20% MSR [78][79] - The diversified housing finance model is expected to continue performing well for shareholders, with a focus on maintaining market leadership across various strategies [21][22] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains solid, with the labor market showing signs of softness but limited layoffs [5][6] - Management expressed confidence in the durability of the swaps market as a hedge and the overall stability of the agency market [31][32] - The company anticipates continued growth in the non-agency market and is well-positioned to benefit from increased liquidity in the non-QM market [20][21] Other Important Information - The company raised $560 million of common equity in Q4, bringing total equity raised in 2025 to $2.9 billion [9] - The efficiency ratio improved to 1.31% for Q4, with a full-year ratio of 1.42% [27] Q&A Session Summary Question: Update on mark-to-market book values - Management reported a 4% increase in book value, inclusive of dividend accrual [30] Question: Portfolio returns and comfort level with dividend in 2026 - Management expressed confidence in achieving mid-teens returns and stated the dividend is safe [31][32] Question: Insights on MSR portfolio and current coupon MSR - Management discussed the infrastructure set up for active participation in the MSR market and the potential for increased origination [36][40] Question: Impact of G-fee cuts on prepayment environment - Management indicated that a G-fee cut on purchase loans could be beneficial, but broad cuts might negatively impact the MBS market [46] Question: Risks that could change the low-risk environment - Management identified global fiscal risks and asset market euphoria as potential concerns [60][61] Question: Attractiveness of buying lower-coupon MBS - Management noted that valuations on low-coupon MBS are tight, and better ways to manage risk exist [68] Question: Likelihood of GSE portfolio caps being increased - Management stated uncertainty regarding the increase of caps but noted the GSEs have significant capacity [84]

Financial Data and Key Metrics Changes - The company's book value per share increased by 5% from $19.25 in the prior quarter to $20.21 as of December 31, 2025 [23] - Economic return for Q4 was 8.6%, bringing the full-year economic return to 20.2% [23][24] - Earnings Available for Distribution (EAD) per share rose by $0.01 to $0.74, exceeding the dividend for the quarter [24] - Economic leverage ratio decreased to 5.6x, down from the previous quarter [25] Business Line Data and Key Metrics Changes - Agency portfolio ended 2025 at $93 billion, increasing by nearly $6 billion quarter-over-quarter and $22 billion year-over-year [9] - Residential credit portfolio reached $8 billion, up $1.1 billion quarter-over-quarter [13] - Mortgage Servicing Rights (MSR) portfolio increased to $3.8 billion, a $280 million increase quarter-over-quarter [17] Market Data and Key Metrics Changes - Fixed income markets showed strong performance, with the U.S. aggregate bond index registering the highest total return since 2020 [7] - The yield curve steepened as short-term yields fell while long-term yields rose modestly [7] - Swap spreads widened due to a shift from Quantitative Tightening to balance sheet expansion by the Fed [8] Company Strategy and Development Direction - The company aims to increase capital allocation to residential credit and MSR while maintaining agency as the anchor of the portfolio [21][77] - The non-QM market is expected to grow, providing competitive advantages in loan selection and execution [20] - The company plans to remain patient and opportunistic in capital allocation, focusing on diversified housing finance strategies [22] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains solid, with the labor market showing signs of softness but limited layoffs [5][6] - Management expressed confidence in the durability of the swaps market as a hedge and the overall strength of the diversified housing finance model [32][21] - Risks include global fiscal issues and potential complacency in asset markets, which could lead to increased volatility [60][61] Other Important Information - The company raised $560 million of common equity in Q4, totaling $2.9 billion for the year [9] - The efficiency ratio improved to 1.31% for Q4, with a full-year ratio of 1.42% [27] Q&A Session Summary Question: Update on mark-to-market book values - The book value was up 4%, inclusive of dividend accrual, with a slight increase noted after the call [30] Question: Portfolio returns and comfort level with dividends - The company expects mid-teens returns and feels confident about the dividend's safety for 2026 [31][32] Question: MSR portfolio insulation from lower interest rates - The company is set up to be active in the current coupon MSR market and expects origination to pick up [36][40] Question: Impact of G-fee cuts on prepayment environment - A G-fee cut on purchase loans is seen as appropriate, but broad cuts could damage the MBS market [46] Question: Attractiveness of raising capital in different spread environments - Wider spreads are more attractive for raising capital, but current stability provides confidence [51][52] Question: Risks that could change the low-risk environment - Global fiscal issues and asset market euphoria are noted as significant risks [60][61] Question: Opportunities in low-coupon MBS - The valuation on low-coupon MBS is tight, and better ways to manage risk are available [67] Question: Likelihood of GSE portfolio caps being increased - Uncertainty remains regarding the increase of portfolio caps, with no clear answer available [82]

Financial Data and Key Metrics Changes - The company's book value per share increased by 5% from $19.25 in the prior quarter to $20.21 as of December 31, 2025 [19] - Earnings Available for Distribution (EAD) rose marginally to $0.74, exceeding the dividend for the quarter [7][20] - Economic return for Q4 was 8.6%, bringing the full-year economic return to 20.2% [19][20] Business Line Data and Key Metrics Changes - The agency portfolio ended 2025 at $93 billion in market value, an increase of nearly $6 billion quarter-over-quarter and $22 billion year-over-year [8] - The residential credit portfolio reached $8 billion in market value, up $1.1 billion quarter-over-quarter, representing approximately 19% of the firm's capital [10] - The mortgage servicing rights (MSR) portfolio ended the fourth quarter at $3.8 billion in market value, a nearly $280 million increase quarter-over-quarter and a 15% increase year-over-year [13] Market Data and Key Metrics Changes - Fixed income markets exhibited strong performance, contributing to the highest total return in the U.S. aggregate bond index since 2020 [5] - The yield curve steepened during the quarter as short-term yields fell while long-term yields rose modestly [5] - Swap spreads continued to widen, supported by a shift from Quantitative Tightening to balance sheet expansion by the Fed [6] Company Strategy and Development Direction - The company aims to increase its allocation to residential credit and MSR, targeting a long-term weighting of 50% agency, 30% residential credit, and 20% MSR [46][47] - The diversified housing finance model is expected to continue performing well for shareholders, with a focus on opportunistic investments in the current coupon MSR market [18] - The company remains well-positioned to benefit from growth in the non-QM market and the broader non-agency market [13][17] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains solid, with the labor market showing signs of softness but limited layoffs [4] - The company anticipates continued strong results from its investment strategies in 2026, supported by favorable market conditions [16][18] - Risks include global fiscal challenges and potential changes in housing policy that could impact the agency markets [39][40] Other Important Information - The company raised $560 million of common equity through its ATM in Q4, bringing total equity raised in 2025 to $2.9 billion [8] - The economic leverage ratio remained low at 5.6x, down from the previous quarter [22] - Total assets available for financing reached approximately $9.4 billion, providing significant liquidity and flexibility [23] Q&A Session Summary Question: Update on mark-to-market book values - The book value was up 4%, inclusive of the dividend accrual, with a slight increase noted [25] Question: Portfolio returns and comfort level with the dividend in 2026 - The company expects mid-teens returns and feels confident about the durability of the swaps market as a hedge [26] Question: Insights on the MSR portfolio and current coupon MSR - The company is now active in the MSR exchange platforms and is well-positioned to manage recapture effectively [27][29] Question: Impact of potential G-fee cuts on prepayment environment - A G-fee cut on purchase loans is seen as appropriate, but broad cuts could negatively impact the MBS market [31] Question: Factors that could change the current low-risk environment - Risks include global fiscal issues and asset market euphoria, which could lead to corrections [39] Question: Attractiveness of buying lower-coupon MBS - The valuation on low-coupon MBS is tight, and better ways to manage risk are available [41] Question: Likelihood of GSE portfolio caps being increased - The current capacity is far from hitting caps, and future increases remain uncertain [48]

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Fourth Quarter 2025 Investor Presentation January 28, 2026 Important Notices This presentation is issued by Annaly Capital Management, Inc. ("Annaly"), an internally-managed, publicly traded company that has elected to be taxed as a real estate investment trust for federal income tax purposes, and is being furnished in connection with Annaly's Fourth Quarter 2025 earnings release. This presentation is provided for investors in Annaly for informational purposes only and is not an offer to sell, or a solicita ...

分组1 - Annaly Capital Management reported quarterly earnings of $0.74 per share, exceeding the Zacks Consensus Estimate of $0.72 per share, and showing an increase from $0.72 per share a year ago, resulting in an earnings surprise of +3.25% [1] - The company posted revenues of $366.58 million for the quarter ended December 2025, which missed the Zacks Consensus Estimate by 21.84%, compared to revenues of $187.29 million in the same quarter last year [2] - Annaly has surpassed consensus EPS estimates for the last four quarters but has not been able to beat consensus revenue estimates during the same period [2] 分组2 - The stock has gained approximately 8.9% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.75 on revenues of $472 million, and for the current fiscal year, it is $2.92 on revenues of $1.9 billion [7] 分组3 - The Zacks Industry Rank indicates that the REIT and Equity Trust sector is currently in the bottom 29% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for Annaly was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expectations of underperformance in the near future [6]

Financial Performance - GAAP net income of $1.40 per average common share for Q4 2025, and $2.92 for the full year 2025[5] - Earnings available for distribution (EAD) of $0.74 per average common share for Q4 2025, and $2.92 for the full year 2025[5] - Economic return of 8.6% for Q4 2025 and 20.2% for the full year 2025[5] - For the quarter ended December 31, 2025, net interest income increased to $366,579 thousand from $275,750 thousand in the previous quarter, representing a growth of 32.9%[18] - For the year ended December 31, 2025, net interest income was $1,135,500 thousand, significantly up from $247,796 thousand in 2024, marking a year-over-year increase of 357.5%[19] - The company reported net income attributable to Annaly of $1,013,494 thousand for the quarter ended December 31, 2025, compared to $832,445 thousand in the previous quarter, an increase of 21.7%[18] - Basic net income per share available to common stockholders for the quarter ended December 31, 2025, was $1.40, up from $1.21 in the previous quarter, reflecting a 15.7% increase[18] - For the year ended December 31, 2025, comprehensive income attributable to common stockholders was $2,398,447 thousand, compared to $1,165,073 thousand in 2024, representing a growth of 105.5%[19] - GAAP net income for the year ended December 31, 2025, was $2,051,690, compared to $1,011,768 for the year ended December 31, 2024, representing a 102.9% increase[32] - Earnings available for distribution for the year ended December 31, 2025, totaled $2,024,863, up from $1,564,625 in 2024, reflecting a 29.4% growth[32] Portfolio and Assets - Total portfolio increased to $104.7 billion, with a 6% increase in the Agency portfolio, representing 62% of dedicated capital[5] - Annaly's Residential Credit portfolio increased by 16% to $8.0 billion, driven by record correspondent channel activity[5] - Total assets increased to $135.61 billion as of December 31, 2025, up from $125.86 billion at September 30, 2025, representing a growth of 7.0%[16] - Securities held rose to $91.29 billion, an increase of 7.5% from $85.06 billion in the previous quarter[16] - As of December 31, 2025, the total investment portfolio reached $132.05 billion, up from $122.10 billion as of September 30, 2025, and $98.19 billion as of December 31, 2024[22] Liabilities and Equity - Total liabilities increased to $119.45 billion, up from $110.86 billion, reflecting a rise of 7.1%[16] - Stockholders' equity grew to $16.09 billion, compared to $14.91 billion in the prior quarter, marking an increase of 8.0%[16] - Total GAAP debt increased to $116.19 billion as of December 31, 2025, up from $107.02 billion in the previous quarter and $89.61 billion a year ago[43] - Total equity increased to $16.16 billion as of December 31, 2025, compared to $14.99 billion in the previous quarter and $12.70 billion a year ago[43] Interest and Expenses - Average GAAP cost of interest-bearing liabilities decreased to 4.49%, down 24 basis points quarter-over-quarter[5] - The company reported a net interest margin of 1.18% for the quarter ended December 31, 2025, up from 0.97% in the previous quarter and 0.75% a year ago[20] - Economic interest expense for the quarter was $1.16 billion, an increase from $1.05 billion in the previous quarter and $879.29 million a year ago[52] - Total general and administrative expenses for the year ended December 31, 2025, were $199,629 thousand, up from $171,356 thousand in 2024, reflecting a 16.5% increase[19] Capital and Investments - Annaly raised $2.9 billion of accretive capital throughout 2025, including $2.6 billion of common equity[5] - The company closed eight securitizations totaling a record $4.6 billion during Q4 2025[5] - The company has made significant investments in mortgage servicing rights, which increased to $3.65 billion from $3.48 billion, a rise of 4.9%[16] - The company reported a net interest component of interest rate swaps totaling $716.5 million for the year ended December 31, 2025, compared to $1.2 billion in 2024[33] Market Presence and Future Plans - The company is focused on expanding its market presence and enhancing its product offerings, as indicated in its investor presentation[13] - The company plans to hold its fourth quarter 2025 earnings conference call on January 29, 2026, at 9:00 a.m. Eastern Time[13]

Core Viewpoint - Annaly Capital Management Inc. (NLY) is set to report its fourth-quarter 2025 results on January 28, with expectations of a significant year-over-year increase in net interest income (NII) while earnings are projected to remain unchanged [1][8]. Financial Performance - The consensus estimate for fourth-quarter NII is $469 million, indicating a rise from the previous year's NII of $187.3 million [3]. - Earnings per share (EPS) estimates have remained unchanged at 72 cents, reflecting no change from the year-ago quarter [3]. Market Conditions - The Federal Reserve's two interest rate cuts in the fourth quarter have led to a decrease in mortgage rates, resulting in increased refinancing activities and origination volumes [4]. - A significant portion of NLY's mortgage-backed securities (MBS) holdings is expected to have experienced elevated prepayment rates, positively impacting net premium amortization and supporting growth in interest income and average asset yield [5]. Servicing Income - Slower prepayment speeds are likely to have positively affected the company's mortgage servicing rights portfolio, which is anticipated to increase servicing fees in the upcoming quarter [6]. - The Zacks Consensus Estimate for net servicing income is projected at $137.4 million, representing a year-over-year increase of 18.9% [6]. Earnings Surprise Potential - The current model indicates that an earnings beat is unlikely for NLY, as it lacks the necessary combination of a positive Earnings ESP and a Zacks Rank higher than 3 [7]. - Annaly currently holds a Zacks Rank of 3, indicating a hold position [9].