Annaly Highlights Residential Credit Sourcing Scale and Larger Non-QM Deals in Q2 2026

Management commentary on Residential Credit (Resi Credit) sourcing and origination scale

1) Scale of loan sourcing: they emphasize relationships, “correspondent depth,” and operational infrastructure

Management characterized Resi Credit origination/sourcing as a competitive advantage driven by infrastructure and the ability to access volume through a deep correspondent network. They stated they have exposure to over 350 correspondents, whereas some competitors focus on only the “top 50 originators,” and they also expanded into non-delegated correspondent earlier in the year to add significant volume. ¹

They also tied sourcing scale to their operational platform, noting a fully staffed scenario desk and fully staffed exception desk, plus investment in technology infrastructure, explicitly arguing that “the ability to face 350 originators is very challenging.” ¹

2) Pipeline/lock volume: they reported a quarterly decrease, but framed it around disciplined return targets

While management highlighted their ability to source assets “at a greater clip than a lot of our competitors,” they also disclosed that their lock volume decreased quarter-over-quarter to $6.7 billion, down 9%–10%. ²

In the same discussion, they connected the lock-volume decrease to their return discipline: they are looking to earn mid-teens ROEs and described not “leading with pricing” or “leading with the rate sheet,” but instead being “diligent.” ²

3) Deal size / origination scale: management highlighted “bigger deals” and programmatic capacity

Management consistently argued that scale is not only about volume but also about deal size. They said they are pricing larger deals, which helps spread fixed costs and lowers fixed costs due to a larger balance, and they claimed variable costs (including underwriting fees) are lower versus peers because of the size of the deals they can bring. ²

They explicitly quantified origination-scale execution through Non-QM transactions and their securitization program:

• They said they had priced 25 deals totaling $14.2 billion year-to-date, and 70% of those deals are Non-QM and DSCR (core collateral). ³⁴
• They stated they did $1 billion deal(s) in the Non-QM area (e.g., “non-QM8” and then another “$1 billion deal within two weeks,” “non-QM9”), framing this as growth in the market and their ability to bring larger deals. ³
• They described the OBX securitization program as having closed the first billion-dollar new origination Non-QM transaction, then pricing a second equally sizable transaction ~two weeks later. ⁵
• They said they are averaging 3.5 deals per month and want to move toward a “programmatic issuance” approach of $1 billion+ transactions. ⁶

4) Where the volume comes from: correspondent channels + whole-loan / bulk buying adds scale

Management indicated Resi Credit volume comes through multiple origination and acquisition pathways:

• They quantified securitization/correspondent activity: their Onslow Bay correspondent produced $6.7 billion of locks and $5.1 billion of fundings in the quarter. ⁴
• They also stated that including whole loan bulk purchases in partnerships, Annaly purchased $7.1 billion of loans in Q2, which they called a new quarterly record for the business. ⁴

Additionally, management described their broader strategy: OBX securitizations and manufacturing in-house are intended to be the core of the portfolio (vs. third-party securities over time). They said their objective is for the balance sheet to be “predominantly characterized by OBX-related assets,” and that OBX and whole loans represent over 80% of the Resi Credit balance sheet. ⁷

5) How origination scale translates to economics/returns: cost structure and ability to price competitively

Management connected scale to lower fixed and variable costs and to competitive pricing economics:

• They argued that larger deals spread fixed costs and lower fixed costs, and that underwriting/variable costs are lower due to deal size; they also said they price tighter than the majority of other issuers. ²
• They explained that this enables them to offer a higher price while maintaining the same ROE, referencing their ability to get “the same ROE at a higher price” as a function of secondary execution and scale. ²

They also provided returns/scale context for the origination platform in terms of deal throughput and investor participation:

• They said their Non-QM average deal size “this year” has been over $900 million and emphasized they want to transition to $1 billion+ issuance. ⁶
• They stated they have had over 250 investors participate in the OBX securitization platform since 2018, and that their average non-QM transaction has 45–50 different investors—which supports scale and distribution. ⁶

Bottom line (what management is effectively saying)

Management’s view is that Resi Credit sourcing/origination scale is enabled by (1) correspondent reach and depth (350+ correspondents plus non-delegated expansion), (2) operational infrastructure (scenario/exception desks and technology), and (3) a disciplined approach to targeting mid-teens ROEs even when lock volumes fluctuate. ²¹

They further emphasized that scale manifests not just in lock volume but in their ability to execute and securitize larger Non-QM deals, including multiple $1B transactions and a push toward programmatic $1B+ issuance, with execution supported by their OBX/whole-loan manufacturing emphasis (OBX and whole loans >80% of Resi Credit balance sheet). ³⁶⁷⁵