NLY · Annaly Capital Management, Inc.

Annaly Capital Management delivered positive economic returns of 1.5% for Q1 2026, marking its tenth consecutive quarter of gains, driven by a diversified housing finance platform amid elevated rate volatility. GAAP net income of $0.33 per share reflected an annualized return on equity of 7.15%, down from 26.14% in the prior quarter due to unrealized losses, while non-GAAP EAD of $0.76 per share yielded a robust 14.58% annualized return, comfortably covering the $0.70 dividend. Net interest margin expanded to 1.41% (GAAP) and 1.71% excluding PAA, supported by average yield on interest earning assets of 5.36% and declining GAAP cost of funds to 4.29%, down 20 basis points quarter-over-quarter.

Strategically, the Company shifted capital toward non-Agency assets, growing Residential Credit 30% to $10.3 billion through record whole loan production and $4.7 billion in securitizations, positioning it as the largest non-bank issuer of Prime Jumbo MBS. MSR portfolio expanded 9% to $4.2 billion via bulk and flow purchases, bolstered by Onslow Bay's industry-leading servicing performance, including a 2025 Gold SHARP award from Freddie Mac. Agency portfolio remained dominant at $92.2 billion with a conservative 87% hedge ratio and supportive technicals. Leverage ticked up modestly to 7.3x GAAP and 5.7x economic, with $9.0 billion in financing availability including $5.0 billion cash and unencumbered Agency MBS. CEO David Finkelstein highlighted accretive $509 million capital raise via ATM program and disciplined management, expressing confidence in opportunities across Agency, Residential Credit, and MSR strategies to sustain shareholder value.