NLY - Earnings call transcript Q3 2024 | Annaly Capital Management, Inc.

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Operator

Good morning, and welcome to the Third Quarter 2024 Earnings Call for Annaly Capital Management. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Sean Kensil, Investor Relations. Please go ahead.

Sean Kensil

Good morning, and welcome to the Third Quarter 2024 Earnings Call for Annaly Capital Management. annual during which are Risk are in most made risks to Factors statements filings. our uncertainties, SEC and outlined recent forward-looking today's subject call certain section Any quarterly and in the Actual events from statements. differ these forward-looking results and may materially encourage disclaimer our in read earnings annual filings. the quarterly to our and to you release We in addition

undertake any the Additionally, is accurate that to the time-sensitive date We revise contain hereof. information this content disclaim of may this and do or update not as obligation conference of specifically call information. only

quarter may section this call, non-GAAP quarter third both During of our in in Presentations financial non-GAAP information, XXXX measures. supplemental included XXXX third can is reconciliation we earnings found our to investor present GAAP presentation call under GAAP Content the referenced found today's and and of release. website. both in A be measures our

on Finkelstein, Credit; Investment Ken Please recorded. Chief of being Srinivasan, also call Head Participants Fania, Residential Mike and Wolfe, and Investment of Agency; Chief Head Rights. morning's V.S. Adler, this Mortgage Officer Deputy Officer David Head event note Officer; Servicing Financial Officer; Executive of this include Chief Serena and is Chief

to I'll David. that, call turn with the And over

David Finkelstein

our end businesses up financials, Thank Then during our us on after quarter. I'll Quarter with all X Earnings call open of market the Serena and we'll the to with update will I'll Good briefly and everyone. provide Call. discuss review which an outlook. our for you, Q&A. then our each performance Sean. for Thank along you environment Today, morning, joining our Third the macro

to continue ending beginning long exhibited continued pace from as to cutting the signaled both anticipated in respect short-term all are will in basis as U.S. with time current the macro that and interest ease growth markets restrictive. well starting rates policymakers landscape. Fed, were as of as turn, the policy lowered rates Federal the of With benefited Reserve plus XX months the they rates economy. XX remain September Now the by robust by cycle points aware, over X% Financial

economic With of the pace dependent extent data. easing and on

the driven as normalization better as both the market slowed was PCE as into over labor X% well with moving balance above Now summer only core for of run hiring quarter. the annualized monetary in by the likely inflation, change policy the third slightly continued to

pricing MBS In attractiveness of the market's assets. led a rate income of yield The additional in has curve, Agency cuts to fixed particular. steeper increasing

addition, banking roughly the the In March the economic onset it levels. since quarter. in second been 'XX X% estimates for in Meanwhile, has annualized declined with above line QX remains pre-COVID expansion GDP the interest lowest to rate volatility average the the level quarter growth of with seen regional over crisis, resilient though meaningfully

housing our Now year-to-date quarter. term. proposition capital common ATM value program. And Annaly's generated $X.X our the in equity to have slightly proceeds market environment the attractive, investment of of these return we diversified XX.X% seen X.X through been The quarter demand. quarter-over-quarter. all negotiated increased from raise billion remains our the near business strategies to our an and our inquiries, allowed the X were developments accretive deploy the performance and following us maintaining investor underscoring earnings the XX% value on reverse third the of lines Economic Notably, institutional and also associated of available since of the of beginning again constructive sales exceeded model roughly to backdrop raised ticked dividend. as of We for to supportive over our and turns, for for leverage note, performance we which anticipate QX X.X% down and the distribution economic delivered

our raise, Agency appreciation. with beginning the price market billion capital and by to over notional attributable portfolios with just our to in remaining grew turning value the In of increase Agency Now portfolio MBS. $X light

the quarter, protection on coupons, declined weighed coupons rates mortgage prepayment generic outperformed. As concerns and over pools specified higher while with prepayment lower

was focus concern coupon the of on for less migration as X up specified has in a methodical of this our past years high-quality pools. us over Now been the

pools and of Xs X/X we seen collateral in example, collateral higher by a the our have selection For our what approximately prepayment were fraction and prepayment our portfolio. within of generic would only as roughly small high-quality these and the represent And of benefits XX% coupons, protection backed best latest report. our characterize are

in intermediate higher coupons the a particularly September. as the coupon lagged to We coupons and an into third Now X% relative rotate collateral basis. higher value quarter did rally, additional of the unfolded from portfolio on

relates rate our the it conservative portfolio, Now steepening from quarter, to we interest benefiting while maintained throughout exposure hedge a bias. as

fourth rallied, mortgage with the sell-off duration quarter quarter for unfolded. managed contracted rates we As us proactively rate minimal exposure helping the our the recent as ended has but durations prepare as thus

platform QX The value the quarter-over-quarter, The value of ended economic $X.X to at growth of portfolio the residential by market increased billion representing equity. shifting portfolio market firm's the driven capital continued in $X.X our of in providing Now correspondent credit. were increasing range by and XX% non-QM for basis of our with dedicated billion during AAA million $XXX quarter backdrop the supportive OBX issue bound securitization retained trading a with XX with securities point securitization whole by spreads million. OBX range $XXX Residential new platform. loan our portfolio the credit

creation and on Year-to-date, led retained XXXX, firmness billion the Bay, XX% totaling in since on $X.X deployed XX priced totaling in in $X.X of transactions with market third of we nonbank over maintaining market have second in the Annaly to projected of venture billion spreads, sponsor these the value the quarter X have overall. billion to largest UPB XX%. credit ROEs capital securities Onslow priced credit of securitizations joint the and now the largest beginning OBX across residential and $X.X capitalizing in Now organic our securitizations

again have now months per record we of And consecutive billion, across XX fundings and month. volumes produced channel in and $X.X $X.X locks of volume expanded correspondent respectively. excess in both billion $X achieved credit lock QX Our billion at

current QX billion with into average we LTV. continued lock characteristics channel have limited a $X.X a the of and layer FICO as weighted XXX of momentum and the a strong credit XX pipeline representing risk And

risk in ability X.X%. rate And serious proactive the sound nominal across focus very resi of well on Our given business the has all Bay's ever-growing our at across spread manufacture asset underwriting GAAP high-yielding our the disciplined portfolio under entire And assets and the positioned our having market. correspondent and to led environments. channel is delinquency optionality remains delinquencies management credit securitizations issuers lowest our on the to while top Onslow XX non-QM overall the

moving MSR Now business. to the

firm's Our in portfolio representing utilizing $X.X market quarter billion at ended third the equity of $X.X the in XX% billion capital. value,

including notwithstanding decline durability close rates we unsettled the value, basis XXX up before of holdings, MSR one to a points point And minimally expect valuation of highlighting modestly portfolio acquisitions, the a portfolio multiple, quarter, we $XXX to that mortgage as year-end. on in is MSR the purchase which the committed bulk X.X transaction to on our decreased basis money. Our out the were in market million comprising XX

income formulating serious strong Fundamental X.X% X-month the performance delinquencies Deposit shape remains to participants And be should of increased quarter. the partnerships a MSR, like on on Annaly. history basis elevated of to related points. of and was long competition strategic with portfolio display financial are front given of in and curve Annaly's value-add the subservicing the mere the market benefit XX continues this CPR again

agency our October. of size capital helped announced in relationship, Mortgage and sub-servicing the MSR this a subservicing stability Rocket's pleased early we first As Annaly's partnership and partner. we're with be Rocket develop to

to of capabilities allows refinanced and it cyclicality as December, Rocket agreements, in Annaly allow increase to Rocket And new and existing with to Annaly we partners our helping Rocket's gain the expect our servicing preserve early to existing sale expected our in is participate collaboration leverage for competitiveness agreements recapture to portfolio. without recapture an loans conjunction allow begin new to of partnership subservicing us should and best-in-class from Annaly best-in-class should benefit This purchasing agreement leverage our the loan to MSR. earnings industry as on on operational our similar originator. taking and in protect this the

our for Fed's investor relates Agency We our however, the Now the landing. cutting model technical of We MBS portfolio curve presidential officially lastly, the in environment cycle underway Fed's a elevated now the concerning a to and leverage, and disciplined exposure meeting-to-meeting duration as improving do, given optimistic is upcoming business with and management positioned given outlook, dependence the steeper well that remain attractive remain very we an backdrop. soft remain potential yield a it inflows, our realization in of liquidity in election.

allows and Our in channel has market. Onslow proprietary the to Bay us not create bring volume correspondent available assets continued broader record to to loan home

within And partnerships Our and ability past finance place return industry-leading the WACC advantages. realized portfolio years. have across stable the pieces collectively, MSR our we in over returns deliver gross businesses all our as have housing our to residential by to demonstrated XX% low economic created create differentiated X

it to to Serena financials. And now over with that, I'll the hand discuss

Serena Wolfe

exclude while XXXX. Today, Thank our with I quarters, for my performance EAD will earnings non-GAAP our highlights on prior non-GAAP the earnings PAA. disclosures third you, related ended September quarter and metrics, which release David. and provide GAAP comments key Consistent XX, metrics, will brief focus financial

half an to share $XX.XX $XX.XX. of for added our in economic As performance including across our increased businesses prior have QX. to When all economic of XX.X% for to book return XXXX. September Strong year-to-date return, contributed first of of per generated the XXXX, the quarter dividend our value our XX, we X.X% a realization $X.XX performance, from

quarter Lower gains volatility Agency $X.XX lower in MBS share. modestly our the per rates, of treasury portfolio with interest combined rate on resulted during

these on higher of add the increase the to and to absolute count outpaced fixed on I XX, in for to dividend per distribution as with per June QX, said, lower expense. dividend adversely modestly share the assets to $X.XX share. from by XXXX, available earnings due in distribution coupon yield Our on in to Series values rotation $X.XX increased the hedging for impacted slightly the an of sourced Due coupon portfolio quarter share Onslow value, our basis channel. and gains through floating XXXX. rates securitization Bay our the preferred share by exceeded losses Earnings agency quarter related MSR portfolio to for changing preferred That resi an continued of mainly available up our third book and agency returns, contributing portfolio $X.XX. the additional on the correspondent to compared provided decreased though continued income portfolio higher per Together

X declined income basis X for securitizations points QX. of points marginal asset in the XX to were was during quarter. by average quarter. X increase economic that Average securitized repo partly the increased offset rates of offset debt Increased the coupon in higher points basis the our yields expense basis funds Consequently, X.XX% by a cost during but quarter, ex-PAA from closed

benefited ex-PAA, throughout Our the points basis EAD actively interest component as improved quarter to earlier during swap we on the the rally. X hedge the Based book rates X.XX%. managed net our market factors, by interest spread

Our to net X that the not interest margin to ex-PAA nuances declined NIM. due are X.XX%, primarily of NIM points apparent in in by calculation basis

interest-earning denominator For of in from average example, of assets. income an the interest-earning indicator not notional decline impact TBA a and of the in higher assets

on financing. details to Turning

and We continue to nonagency demand agency our for for security strong portfolios. see funding

quarters with take with advantage position dates Fed to Our considered of around book is meeting repo prior look any rate future we strategy cuts. the

XX reported weighted we in days, QX. our QX average our repo to our businesses. result, down disciplined diversifying were approach X maintained to Today, our days days options funding credit a have compared As

facility increased billion. availability. quarter, which the billion warehouse MBS cash to added third Post million, $X.X to $X.X credit, credit residential the implemented second we in end, $XXX of assets $X.X our of capacity our $XXX rate substantial billion warehouse adding both MSR as businesses and with brings billion $X.X in for warehouse including an of September million XX. across for XX% additional quarter to unencumbered compared capacity a to Agency total Annaly's of utilization quarter We unencumbered

value fair and can undrawn been in rates. market committed million that MSR remain placed $XXX cash, to that has approximately to quickly facilities, warehouse converted advanced have subject of we addition, be In to

$X.X up We last have for quarter. compared approximately $X.X billion to financing, of assets available billion

turning expenses. to Finally,

year-to-date costs remains balances. resulted improved ratio quarter. equity average decreasing quarter ratio other higher OpEx our Our X.XX% to in a X.XX%. to G&A basis, in efficiency points lower to for due basis line ratios XX during equity the historical This our OpEx the On at amounts with to and equity

That concludes our prepared remarks.

now open Thank will line We the questions. you, for operator.

Operator

Shane from be And the Richard from question JPMorgan. [Operator Instructions] first will

Richard Shane

started risks It's known are you widening, when you Look, going get, rates unexpected you go of suggests light us that little rates the are experienced down. has the up tell It's quarter higher of that bit greatest weeks? base a REITs they political they pretty going going next go rates when you are mortgage you're Can the down, particularly the how risks. over in volatility. and manageable. history and that uncertainty turmoil. about with Fourth think you It's up, the managing up spreads X.X that think

David Finkelstein

Rick, thank actually to kick here. you. question That's good call off a the

you So we with heading our that shots, down mentioned at our prepared our I leverage came rate And quarter. a as was the rate look into that no the if virtually quarter risk, notion. in reinforces remarks. into And touch

sold Agency ball portfolio rate managed quarter, off. in at which $X given we're the the in a market we've roughly We which October. got payrolls, of month approximately XX-year stronger we billion sold in the of comfortable half the onset portfolio the expected, But today, year the proactively equivalents the probably here, election was higher and managed certainly the billion perfectly as And uncertainty. a has over We're risk MBS, course operating $X actively extended. of at with little the has rates. notwithstanding than duration, pickup the we nevertheless, and selling Now over

or X-year XXX look basis a X% market, the GX, the at back XXX, we reasonable. and which to yields perfectly as above OIS just the above today of short reasonable of sitting real XXX X% When looks proxy a future with fair. for at yields here, is looks And step looks the on X% XX-year we're take XX-year rates here nominal it note approaching points which rest thereabouts here, or us. the rates

Now a of points rate is from encouraging. carry and at, the were which in it sat funds strong. respectful didn't been in XX we where is the than that's quite why which basis pricing, rich, terminal looked at that's reversal we rate mid-September, certainly is where risk. Market data, XXXs, as a and higher has Fed any before, the we We're big

warrants the And And so we And position. materialized. volatility as that's point very you it maintaining is and center. obviously, election front understand the a out, conservative

couple sold managing here weeks, we go here. a the position position. our has going -- the our leverage about and that see as get I may a points we feel going a be this big to too very we through rate Given little rate we'll we're plays we're made We red is close -- look about risk and wave, And the maintained help? to leverage maintained because good now, we've next we're We mortgages, risk it. then about unknown. our for of basis to things But If that basis disciplined keeping and pricing, out. home. that like manage that where optimistic, do our Does market how exposure

Operator

from will be Bose question KBW. George next The from

Bose George

with just an value? asking start for book Can I update on

David Finkelstein

in Friday, value. accrual. Bose. a off pre-dividend were X% That's Sure, little just over book we Through

it's consider roughly you off. accrual, If dividend X.X% the

Bose George

in I you guess Okay. then, 'XX. mean, dividend, Any 'XX, you ready outlook discuss I about the sort terms that -- dividend? you've of Great. you're commented comfortable And into to of how are feel the through

David Finkelstein

bit little feel earn expect place Well, as today, We're do in QX. the fourth to modestly we good in quarter, We more a we sit safe than dividend. here. quarter about a here the this

lot we increases play going. our direction understand have where over to there's been can others expect low the to not But was the We very market's We were our of from last look, NIM contextual dividend that with number or modestly. direction, how approaching is the we sector, to the the some Obviously, course get dividend months see and currently. in but understand levels so Fed's really coming to increase levels to low the a out. of need of essentially dividend that things before

out into certainly a I can market focused making But much sure that solid economic deliver And XX.X%. and XX.X% think, on a book, policy return yield the It's and we're get goes. plays dividend. dividend our and heading the return and of on it as in, roughly the posture we more certainly XXXX, do a business and we're and tailwind that that we we we'll cuts that the see EAD, provides to lot of do priced are aspects a recognize hopeful Fed's how

Operator

next the And question from Harter UBS. is from Doug

Douglas Harter

Can you that for talk allocation, change about kind X allocation businesses rate scenarios your different allocation? capital might of how you're capital thinking how about to appetite equity the and

David Finkelstein

as generate my across at cycle of sequence of in given the at look, we're right here, beginning agency in rate noted all look our can X businesses best. We And prepared X does returns where the growing. Sure. businesses. weren't remarks, good the I cuts, the But of

Now market is but we high, are in more understand the supportive. the volatility agency that and become technicals much have of spreads considerate

margin, at see better. in majority that agency the capital at our quarter into the sector. agency vast And So go did we the raise bit allocation looks capital, as little end a you can

get to to look the But want returns do have you that how acquired we the when business at certainly. securitization resi in business, through materialize. credit We'll Now from higher, got point do credit keep want at through here loans respect originations expect our but we be or to correspondent we and that, in at channel, this responsible cycle. to the to to growing credit with we see so,

it, So to we'll do though. is the margin, we'll be overall, dollar where and keep is materializes. agency it come that at certainly the like to to But MSR, in like grow and going, marginal and going. packages tend see balanced market, which as extent keep we'll would we does feel can that we that episodic. again, We, be the then engine And to aggressive

Douglas Harter

an raising think continued how in businesses all comment with investment, guess do on this your about that I kind capital X environment? comment, warrant just of that you

David Finkelstein

said, we've it's assets are if only as appropriately. priced capital raise Look, always Sure. accretive if we'll and

we to -- ample So line -- we'll liquidity. those But the we stars that, up, it. that have extent consider are

the at our billion look minds generate more our businesses for without We to need where in ability lot liquid to in don't in the the you have as If we justification operating for of it capital. assets, be raising our make we A to like things also I'd offensive capital other was as ratio. things channel resources where mentioned, correspondent raise And scale and as feel $X.X about good impacting able the to box to Agency capital technology broadening accretive but we MBS now and Serena feel investments in scale. because is, expense like greater resi as efforts cash. raise obviously well the these characterize

can businesses, of clearly we XXX equity. We're basis generate raise mix investments are a about But points the is broad the of across -- make shareholder OpEx to and long these term. does are X running it in for we equity businesses appropriate most that has so who we efficient will market ultimately fully this our among benefit skilled help the anybody that the to more initiatives business the to over

thought just a is us we'll that's so, of if to consider around telling process raising don't it. But little thought our -- need little market a So to. the We capital. do

Operator

JonesTrading. is Jason And the Weaver next question from from

Jason Weaver

anything kind you're like of to. indicate any period provide and pays, there out input just I maybe given securitization first-time data David, early your delinquencies, slow Mike stress in that was might wondering visibility grace the seeing can some maximization? if

Michael Fania

question. the Jason, is Thanks Mike. this Yes. for

a lower to of we're income with consistent the on the more -- commentary type the low That's that the medium terms not the consumer, lending borrower around it's borrower. consumer, of the in think lot I end of to. focused

average non-QM that's XX, LTV, we $XXX,XXX So $XXX,XXX that size on at the if transaction that loan is look latest XX value. property you priced

$XXX,XXX borrower makes year. per Our average about

the real very So think borrowers type it's of when estate we're self-employed investors. professional about borrowers, sophisticated lending you to, it's

are like auto. consumer not are that that stress necessarily lower-end subprime seeing We like other seeing like that cards, products credit

part XXX the mentioned the portfolio. call, it's it David non-QM, we our but the DSCR You're portfolio, And the basis in look not at earlier the the it's when entire of portfolio, within DXX+ seeing X%. just around points. of

feel very specifically we with we're type the credit we're of that think borrowers, I and good the So targeting. that originating

Jason Weaver

greater when back That's any into quality. more the competition partnership? if just wondering any some helpful. subservicers. seeing that there's I'm among then any But economics not. change higher Rocket product or partnership, to And a Annaly are credit that seeing I better online persistence that going expect on pricing comes And subservicing mentioned it on to we had your Should like in favorable more take sounds you level that in remarks expense the to macro think sense,

David Finkelstein

Yes, we'll one. have on sure. Jason, that Ken

Ken Adler

the last loans for sub-servicers who thanks as short, has trading as amount leaving few question. substantial service MSR going Jason, their In the to the in material. MSR, absolutely, been years, own been there's and owners

the in there's a share overall that's So handled servicing of been mortgage contraction subservicers by rights lot a and created market. in the of competition

are So lower pricing seeing we and better economic.

Operator

And from is the from Eric BTIG. next question Hagen

Eric Hagen

when at book portfolio, the has bond So higher premium. value look by been the historically we a consumed

on the at lot agency versus now a premium characterized in the value down, risk I and how going so you've the differently your you X leverage think the capital portfolio and more the is premium exposure past drives versus lot the allocation like to any be in like might in X/X sheet. guys feel a and how prepayment philosophy managed dialed of you that, book was forward? point, should expect around balance Do way, manage we

David Finkelstein

how we is think about average I leverage. Well, portfolio certainly, agency the think, now, about going the convexity is inform to Right of agency profile the coupon, XXX.

par. So below we're

nevertheless, little a methodically as has bit the gone up a in have has I obviously exposure convexity now the portfolio convexity the -- overall elaborate the think the standpoint. feel increased, agency we Srini it's free how consideration. to or and about. little bit now managing coupon, is it's talked about off from a We And selloff, on with And portfolio better it but -- it

V.S. Srinivasan

as stayed of opening about specified we our in pools his up high-quality portfolio XX% extent, pools. in alluded to coupon, but fairly mean, gone David is I we remarks large have in have a to Yes. high-quality in

amount if generic in if same -- duration the have don't are we of quality drift that you would you lower pools. So have you're in

price So is costs your are lower, higher liquidity. means the it you or of more -- need which the quarter durations are the rates given dollar rally, the as hedges your amount creates generally them hedging and that for against lower,

Eric Hagen

that That's helpful Yes, a Okay. helpful. little was non-QM to Returning explanation. a the bit.

guys think mean non-QM? active been you rates? maybe there. the that Fed lower have you benefits will catalyze And I You how rates do really think do cutting portfolio from originators more to create

David Finkelstein

We of remarks. and certainly if hope correspondent happy We've we pretty obviously, housing will so. the activity been are in as the the more channel to could you lower like with feels benefit spur growth Oftentimes, in rates, the it get discussed more certainly is Presumably, come prepared the focused grow as do rates down. environment, the rate a agency do healthy a market originators market, should non-QM. on and in place lower but it

Eric Hagen

like from I feel benefit cutting do book, back respect rates portfolio? back a rate the how Fed you mean, the fixed non-QM Yes. book it's the And to with of might since

Michael Fania

the Yes. About About on -- and on in the basis. portfolio majority basis. terms a look level but yield They're MSR spread agency BBB. not that of on it do We're portfolio think hedging the portfolio as at investors basis do macro investors the down well. is necessarily the a of to non-QM that of with looking AAA that with I we at portfolio Mike. a rate, this a look and at Eric, hedge fixed the XX% is

we put of these So we spreads and some volumes securitization higher. I continue these extent think spread election there's rates to events, of Hopefully, that a the volumes once Fed it does And cuts, do rally a realization to origination it fall the I think from past non-QM puts specifically perspective, tighten. that do think get up. could

the So a rally as for see a do I here kind conducive the market little bit predicts the ease it's extent to from environment of rates. you and in Fed does us think

Operator

Harsh The from next be Green will question Street. Hemnani from

Harsh Hemnani

on the lower coupon viewing also MSRs the Rocket to the of versus in MSR with the the you the MSRs of value coupon but the opportunities the between light desire relative in and currently partnership into grow you're portfolio? year. perhaps higher sort comment end Maybe Could book of are that recaptured Mortgage how

David Finkelstein

retention recapture, absolutely partnership, valuation. partners. We're Yes, Rocket and a our about and partners of work customer portfolio rates great has And recapture the the leading subservicing strategies absolutely. their our of to satisfaction. approaches component Each also been the and of just excited It's with with Look, that's to team. Rocket another recapture. it's customer addition differing opportunity, subservicing and given to

they our note the higher this note just to portfolio, capacity. the we're bid opportunistically prepared on So and of part or adds are and to lower rate on rate building our infrastructure

Operator

Montgomery is The question from Janney next Jason Stewart from Scott.

Jason Stewart

you whether pull that there you're about if us and to how leverage maybe leverage signpost those would concept that's I just another and capital thinking that signpost issues election. wanted maybe you together in for you're raising the to pull X at? could, of lead could in offensive other leverage take Or to take together pin up looking the And up? And then if you David, a a put those?

David Finkelstein

Yes.

that's up capital, don't in MBS our need way taking you events advantageous because is if to look up raising to was to now. The horizon. raise been of raise leverage. leverage right like at do but alternative lever mind really it relates you you capital, a MBS, to these all it capital the than on Agency raise We it as So better more like Agency we all

to we quarter. thus on we about cheapened weeks a take calms X we couple X if X get of fast market the imminently the in have certainly forward leverage could after far outcome an up Now the Tuesday, weeks because election and from down, and basis mortgages points now

we out. opportunity like a things even or But to up. earning so, but perfectly we look we don't certainly it. We're of is have an be if but reasonable, to how And to return. high, capacity play intermediate-term there's we tactical to see got to need leverage adequate more feel They so, opportunity take respectful wall and we've do have do the certainly

Operator

The from Fargo. next question is from Wells Fandetti Don

Donald Fandetti

about they're we're MBS in maybe case I you while? more spreads. wide you you for sort Can of the Or come still thinking I a and mean versus of that your a little you sort subscribe banks range bound is to on Agency talk a the bull think that? little and are view Do tightening. bit some see historical could

Sean Kensil

stepping inflation. policy So -- picture now and back, the restrictive been monetary with is just labor has along that for has a normalizing big is while that markets

to all today see perspective, fundamental I the curve $XXX XXXX. volatility for interest this a from of And time rate to MBS shed year. are have any than decline, XXXX you're which you added in modestly likely the which Banks, technicals supply-demand about are MBS. what since think Agency So to, better alluded and up positive yield billion steepen

So coming if in demand, continues I we bank market. think and expect increase the should as we foreign Fed Fed or into forward, as cutting the we cycle the expects should looking MBS buyers an see also see Agency

So the MBS the pretty market. for technical also looks Agency good

current XXX last We've trading in some been trading for to XXX spread the numbers X, X blended it. curve range -- months. we've basis -- coupon to range been the So on put point treasury

basis with were tighten pre-COVID go the basis and XXX actively election to, don't say, What the points we'll that see saw closer that spreads, when past to get price expect to the we we as volatility point to subsides, to both involved. XX spread Fed range. think I could is we was And XX we back which XXX

could today. those down basis the tighten -- I points but by wide moved XX has XX think range we of to we another are from where definitely we will remain levels,

Operator

from next Instructions] is Citizens Cranston [Operator The from question Trevor JMP.

Trevor Cranston

non-QM about terms what participants of recently you large in and There about get space. overall guys asset in bit in a and are space. the mean what economics market seeing news move Could a maybe the little was involved into guys the for manager you making landscape talk to some competitive coming that might a non-QM new generally

Michael Fania

funded we you I platforms right where $X entities Trevor. really resources the With spot little good where it's that a Thanks, have now. significant October, bit think opposite are of would we're at, that billion of Sure. include with already in dedication scaled actually if year-to-date. loans say fully a we've of

up statement lot it of about non-QM you towards roll income. pin XX new We're A at signing when resources that origination But The We've is we're underwrite a putting additional to to experiencing about, a helping XX% of we we're Now David volume lot quarter. market correspondents. that to put share at market per actual loans. A out bank improve signing each look think correspondents is XX% up originator that in we're the what continues to DSCR. tools, started capital is anywhere funding the velocity and hard share. increase. within ability the a of raise the the talked to of those lot market,

that we I and margins feel on a the the share say, our Like increasing. we're that basis is actually market we it's little opposite, Trevor. So actually are bit to of would daily out where continue putting gain rate a sheet

place, we in architecture you'll have that we managers that and pricing to have. XXX-plus certainly to put buy to at that without those same infrastructure, hard participants ability correspondents, So assets the product, asset in the the phase this while it's always without the want extensive participate

been of So we've since XXXX. XXXX. been the ahead buying in game. We I launched think XXXX, correspondent loans non-QM We've this

than a with we've and lot think feel really kind earlier think the of identified we I where we're I opportunity So good others, at.

David Finkelstein

of XXXX, barriers a a have durable hit around in been correspondent we said, Mike just relationships very in I'll originators, in there this -- lot And in originator consistent, We entry XXXX. non-QM committed volatility and channel Trevor, a we've space. then And been been And in we've to them. partner Yes. We've established to started we everything as We've efforts the add, markets as COVID. XXXX. are the huge amongst in a We the consequence for originator in deep position. precarious we're we community. were funded there community through capital to since

a our consequence, originator our the competitive is the good brand white infrastructure very glove partners, service as durable have leads through as community to better spreads. us. and from gets anybody's. and as commitments provide We we Our pricing And securitization more to distribution that

a in good like feel we place. So we're

Operator

closing And like I to Finkelstein for concludes session. any to back this question-and-answer ladies our and turn over conference remarks. gentlemen, David would the

David Finkelstein

thanks Thank to We'll you joining soon. us, you, talk everybody. Chad, for and

Operator

now conference you for sir. The presentation. attending concluded. Thank thank today's And you, has

You may now disconnect.

Annaly Capital Management (NLY) 24 Oct 242024 Q3 Earnings call transcript