Q3 2025 Annaly Capital Management Inc Earnings Call Transcript
Key Points
- Annaly Capital Management Inc (NLY) generated an economic return of 8.1% for the third quarter and 11.5% year-to-date, marking eight consecutive quarters of positive economic returns.
- The company raised $1.1 billion of accretive equity in Q3, including $800 million through its ATM program, and reopened the mortgage re preferred market with its first preferred issuance since 2019.
- Annaly's agency portfolio ended the quarter at over $87 billion in market value, with a 10% increase quarter over quarter, benefiting from lower interest rate volatility and improved supply-demand dynamics.
- The residential credit portfolio increased to $6.9 billion in economic market value, with Annaly being a top issuer in the residential credit market, having priced 24 transactions year-to-date.
- The MSR portfolio increased by $215 million in market value to $3.5 billion, with Annaly forming a new partnership with Penny Mac Financial Services to enhance its servicing capabilities.
- The labor market conditions weakened, with hiring slowing to 30,000 jobs per month, and sentiment around future hiring deteriorating.
- Inflation remained elevated near 3% during the quarter, with potential risks from higher tariffs.
- The company's hedge positions experienced losses due to marginally lower interest rates during the quarter.
- The housing market is experiencing relatively flat year-over-year home price appreciation, with potential for further depreciation during the winter season.
- Annaly's risk appetite appears tempered, with a decline in spread and rate sensitivity, reflecting a cautious approach in the current macroeconomic environment.
Good morning and welcome to the Q3 2025 annually Capital Management earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0.
After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad.
To withdraw your question, please press star then 2.
Please note this event is being recorded.
I would now like to turn the conference over to Sean Kentel, director of investor relations.
Please go ahead.
Good morning and welcome to the 3rd quarter, 2025 earnings call for Annaly Capital Management.
Any forward-looking statements made during today's call are subject to certain risks and uncertainties which are outlined in the risk factors section in our most recent annual and quarterly FEC filings.
Actual events and results may differ
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