- Management expressed optimism about the 2026 issuance environment, citing more tailwinds than headwinds.
- Factors include very tight spreads, Fed easing, and a pickup in M&A activity, which could boost issuance.
- The company expects M&A to be a significant contributor, with an upward revision of 15-20% for full-year issuance.
- Management highlighted digital infrastructure and data centers as deep currents likely to sustain growth.
- Overall, Moody's sees a constructive outlook for debt issuance and market activity into 2026, barring major disruptions.
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- Achieved full-year plan to grow commercial loans by approximately $3 billion in 2025, with backlogs in institutional and middle market segments continuing to build.
- Commercial loan growth was broad-based across industries and regions, driven by new client acquisitions.
- Loan growth is expected to be supported by strong pipelines and active client engagement, with a focus on sectors like renewables, affordable housing, healthcare, and public sector.
- Guidance anticipates continued C&I loan growth, with some offset from CRE and residential mortgage paydowns, and potential upside from CapEx and bonus depreciation.
- Annaly has maintained a diversified housing finance strategy that has delivered a 13% annualized economic return over the past three years.
- The company's portfolio includes Agency MBS, Residential Credit, and MSR, which collectively contributed to positive results in Q3 2025.
- Annaly's approach involves actively managing convexity and spread risks across different asset classes to optimize returns.
- The firm raised $1.1 billion of equity in Q3, including $800 million through ATM programs, highlighting strong investor confidence.
- Annaly's strategic focus on low note rate MSRs and proprietary assets has helped sustain cash flow stability amid market fluctuations.
- Management highlighted positive signals from the White House, Treasury, and FHFA affirming the preservation of implicit guarantees for Agency MBS amid potential GSE privatization.
- President Trump's statement emphasized that the U.S. government will maintain its implicit guarantees, strengthening investor confidence in the credit quality of $8 trillion of Agency MBS.
- Key policymakers' 'do-no-harm' approach and commitment to stability suggest that credit support for Agency MBS remains robust, potentially leading to tighter spreads over time.
- Management emphasized confidence in achieving ambitious performance targets for 2025, citing ongoing positive trends and acceleration in business performance.
- No specific guidance slide was provided for H2 2025, but management indicated that recent trends support continued confidence.
- Management highlighted that their performance improvement has exceeded internal expectations, reinforcing their optimistic outlook.
- Net interest margin increased by 21 basis points to 3.83%, primarily due to improved loan yields and lower deposit costs.
- Most of the margin expansion was organic, with only a small contribution from the CenterBank acquisition and macro swap roll-offs.
- Macro swaps maturing in 2026 are expected to support margin stability, with a forecast of NIM staying above 4% in 2026 despite potential rate cuts.
- The company is exploring acquisitions in boutique firms and large teams in core markets, with ongoing discussions showing encouraging signs.
- New opportunities have emerged in the advisory and valuation space, which complement existing finance and brokerage operations.
- Management notes improved market confidence and optimism for return to normalcy in valuation and investment markets.
- Discussions focus on bolt-on acquisitions that can leverage lender relationships and enhance service offerings.
- The firm is actively evaluating opportunities that align with its strategic growth and diversification goals.
- Quarterly loan balances increased by $76 million, or 7.6% annualized, with notable growth in C&I, multifamily, and agricultural production loans.
- Loan pipeline for the next 90 days is strong at $224 million, up from $163 million in March and $157 million a year ago.
- Despite strong pipeline, expected higher prepayment activity in the upcoming quarter, especially in nonowner-occupied CRE, may temper net loan growth.
Dafinchi