Thank you for standing by, and welcome everyone to the Annaly Capital Management Second Quarter 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. At this time, I would like to turn the conference over to Sean Kensil, Director of Investor Relations. Please go ahead. Good morning, and welcome to the second quarter 2026 earnings call for Annaly Capital Management. Please note that this call is being recorded. As a reminder, materials for today's call are available on our website at www.annaly.com. Today's call may include forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially and refer to certain non-GAAP measures. Please see the notices in our earnings release for important information regarding forward-looking statements and non-GAAP measures. Participants on this morning's call include David Finkelstein, Chief Executive Officer and Co-Chief Investment Officer, Serena Wolfe, Chief Financial Officer, Mike Fania, Co-Chief Investment Officer and Head of Residential Credit, V.S Srinivasan, Head of Agency, and Ken Adler, Head of Mortgage Servicing Rights. With that, I'll turn the call over to David. Thank you, Sean. Good morning, everyone, thanks for joining us. Today, I'll open with a brief macro update for discussing our performance for the quarter. Then I'll provide further detail on each of our three investment strategies and finish with our outlook. Serena will then discuss our financials in more detail before opening up the call to Q&A. Starting with the macro landscape, the U.S. economy continued to display resiliency during the second quarter as healthy consumer spending and tech-related investment activity drove economic growth. Also, the labor market appears to have gained some momentum in recent months, which is a welcome shift from the softer trend seen in the second half of 2025. That said, Fed officials have become increasingly concerned about persistent elevated inflation, notwithstanding last week's softer CPI print. Price pressures have been driven by a confluence of factors, including the energy price shock from the conflict in the Middle East, residual effects from tariffs, and strong demand for computing equipment given the AI build-out. With policymakers more vocal about the potential to tighten policy, interest rates continue to rise, led by the front end of the yield curve. After pricing roughly two 25 basis point cuts earlier this year, current market pricing suggests the Fed to hike at least once in 2026. Despite this pressure on the bond market, lower rate volatility provided a tailwind for our portfolio this past quarter, and we delivered a 5.5% economic return, once again demonstrating the strong performance of our diversified housing finance model. Additionally, we generated $0.79 of earnings available for distribution, marking the ninth consecutive quarter that our EAD has exceeded the dividend. The reinforced durability of our earnings power helped inform our recent increase in our quarterly common dividend to $0.75 per share. Also to note, we continue to operate with conservative economic leverage of 5.6x, and we raised roughly $450 million in equity through our ATM program during the quarter. Turning to our investment strategies and beginning with the Agency sector, spreads tightened in the second quarter as de-escalation in the Middle East led to a decline in both realized and implied rate volatility and demand for Agency MBS remained strong, driven by healthy fixed income inflows, increased purchases from overseas investors, and a robust CMO market, which is absorbing roughly 30% of gross issuance and broadly distributing the risk to a diversified set of investors. Given this attractive environment, we grew our Agency portfolio by roughly $3 billion, ending the quarter at $95 billion in market value, which increased our capital allocation to Agency to 57%. As far as portfolio activity, we rotated slightly up in coupon by reducing our exposure to 4.5s in favor of 5.5s and 6s, and we invested capital raised primarily into production coupon MBS and Agency CMBS. Over the first half of the year, specified pools outperformed in spite of relatively benign rate volatility and a subdued prepayment outlook, which typically favors more generic collateral and TBAs. Notably, pool outperformance was largely driven by strong GSE demand, and we took advantage of these valuations and reduced our payup exposure by moving to lower payup pools and increasing our TBA holdings. Late in the second quarter, pool valuations became more attractive as GSE demand waned, as a consequence, we expect new investments to be more balanced across TBAs and specified pools. With respect to our hedge profile, we were conservative in managing our rate exposure and proactively added additional swap hedges to protect against rising rates. Our portfolio remains diversified across Treasury, futures, and swaps, with a preference for the latter given more attractive carry and comfort around balance sheet availability going forward. Moving to Residential Credit, our portfolio ended the second quarter at $10.4 billion in market value, virtually unchanged quarter-over-quarter and representing 22% of the firm's capital. Resi Credit spreads moved in tandem with broader fixed income markets, with AAAs ending the quarter approximately 10 basis points tighter. Our Onslow Bay correspondent channel produced another strong quarter of volume with $6.7 billion of locks and $5.1 billion of fundings. Including whole loan bulk purchases in our partnerships, Annaly purchased $7.1 billion of loans in Q2, which is a new quarterly record for the business. Despite record volumes, the credit quality of our loan pipeline continues to improve, best evidenced by the locked pipeline 765 FICO with 67% CLTV. Non-Agency gross securitization issuance totaled over $150 billion year to date, up approximately 50% year-over-year, putting the private-label market on pace for its largest gross issuance year since 2007. Annaly remains the largest issuer of Expanded Credit mortgages and the second largest issuer overall as we closed 13 deals for $6.8 billion in principal balance in the second quarter, creating approximately $780 million of proprietary investments. Year to date, the OBX platform has priced 25 transactions totaling $14.2 billion. Notably, we have securitized eight different forms of residential collateral, underscoring the depth and diversity of our platform. The OBX securitization program also had the distinction of closing the first billion-dollar new origination Non-QM transaction, demonstrating Annaly's leadership position in the non-agency market. This inaugural billion-dollar deal was well-received by investors, which allowed us to price a second equally sizable transaction approximately two weeks later. Our Residential Credit platform is well-positioned for continued growth of the non-agency market given the substantial investments we've made over the last number of years, which we believe is a key differentiator and should continue to result in Annaly manufacturing high-yielding proprietary investments difficult to duplicate and scale. Shifting to MSR, our portfolio was roughly unchanged at $4.1 billion in market value, with our allocation of the sector representing 21% of the firm's capital. During the quarter, we modestly rotated the portfolio higher in loan balance as we committed to purchase approximately $200 million in market value of MSR across our various sourcing channels, while also committing to sell two bulk pools with lower loan balances for $220 million in proceeds. These transactions capitalized on differing buyer economics across the MSR market, highlighting our relative value approach and portfolio flexibility. Moving into higher average loan balance MSR meaningfully enhances our return profile as our cost to service is contractually a fixed amount per loan, in contrast to in-house servicers with high fixed costs and a variable cost per incremental loan. Bulk supply in the second quarter decreased modestly from Q1, though we expect supply to remain healthy throughout the balance of the year given ongoing originator profitability constraints and industry consolidation. A minor note, our flow purchase channel is picking up with $31 million in market value purchased this quarter, and it should become an increasingly important avenue to acquire current coupon MSR and allows us to offset portfolio paydowns. Our MSR portfolio fundamentals remain compelling as prepayment speeds increase in line with seasonals to 5.2 CPR in Q2. They were still below our initial model projections, providing potential upside returns. The credit quality of the portfolio remains exceptional, with serious delinquencies range bound at approximately 50 basis points. At a weighted average note rate of 3.3%, the lowest among the 20 largest MSR holders, our portfolio continues to generate durable, predictable cash flows with meaningful prepayment protection. MSR valuations remain well supported in the current interest rate environment, and our multiple increased marginally to 5.97, largely driven by the increase in rates offset by a flatter curve. Finally, to touch on our outlook, we continue to see compelling opportunities across our three strategies underpinned by a healthy fixed income and housing finance investment environment. Agency spreads remain at attractive levels with mid-teens levered returns and very favorable technicals. We'll look to further deploy new capital in the sector balanced against relative value opportunities in our other businesses. Our Residential Credit platform continues to exhibit substantial growth supported by our loan sourcing and capital markets capabilities, long-standing originator relationships, and skilled platform. Our MSR business is performing well ahead of our expectations, anchored by a deliberately constructed portfolio, low note rate, high credit quality that would be difficult to replicate at scale in today's market. Importantly, Annaly offers investors a differentiated way to access value across the housing finance sector without assuming the operational intensity and volume dependency of a traditional origination model. We're not reliant on loan volumes to sustain the economics of our portfolios, which allows us to remain selective, invest with scale, and allocate capital to the opportunities offering the most attractive risk-adjusted returns. That is a structural advantage that transcends market cycles, and it has contributed to our ability to generate double-digit economic returns while operating with less leverage than our peers. In an environment that continues to challenge origination-dependent business models, the capital efficiency, scale, and flexibility of our platform meaningfully sets us apart. Now with that, I'll hand it over to Serena to discuss the financials. Thank you, David. Today, I will briefly review the financial highlights for the quarter ended June 30, 2026. As in prior quarters, our earnings release discloses GAAP and non-GAAP earnings metrics, and my comments will focus on our non-GAAP EAD and related key performance metrics, which exclude PAA. As David noted, the second quarter was characterized by a constructive fixed-income investment environment, despite geopolitical uncertainty and rising yields. Against this backdrop, our diversified platform delivered strong performance. Elevated portfolio yields, tighter mortgage spreads, favorable hedge performance, and disciplined risk management supported both earnings and book value during the quarter. As of June 30, 2026, our book value per share increased by 1.7% from the prior quarter to $20.15. Including our $0.75 quarterly dividend, we generated a positive economic return of 5.5% for the quarter, bringing our economic return for the first half of the year to 6.9%. Earnings available for distribution per share increased by $0.03 to $0.79 per share, Exceeded our newly increased quarterly dividend of $0.75 per share. The increase was primarily driven by higher average yields on our Agency portfolio, as our weighted average coupon increased 11 basis points to 5.11%, as well as higher securitization volumes within our Residential Credit business and favorable funding costs, with average repo rates declining 6 basis points to 3.84% during the quarter. These benefits were partially offset by lower levels of swap income, reflecting lower average receive rates as SOFR declined during the quarter. Net interest margin increased 5 basis points to 1.76%, while net interest spread improved 8 basis points to 1.5%, with both measures benefiting from higher asset yields, which more than offset modest increases in economic funding costs. Our balance sheet remained conservatively positioned, with economic leverage declining slightly to 5.6x from 5.7x in the prior quarter, a reflection of the increase in our book value for Q2. Our reported ending repo rate decreased 2 basis points to 3.85%, while weighted average repo days to maturity ended the quarter at 33 days, down three days from the prior quarter. Our Residential Credit platform continued to demonstrate strong momentum, generating significant securitization activity during the quarter, as David discussed earlier. Additionally, to support continued growth across our Residential Credit and MSR businesses, total warehouse capacity increased to $8.3 billion, including $2.8 billion of committed capacity. We maintain ample available capacity in both businesses, with utilization rates of 61% for Residential Credit and 50% for MSR. We ended the second quarter with $8 billion in unencumbered assets, including $5.5 billion in cash and unencumbered Agency MBS. In addition, we had approximately $1.6 billion in fair value of MSR pledged to committed warehouse facilities, which remains undrawn and provides an additional source of liquidity subject to market advance rates. In total, we had $9.6 billion of total assets available for financing at quarter end, up approximately $580 million from the prior quarter. This represented approximately 57% of our total capital base and provides us with significant liquidity and financial flexibility to support portfolio growth while maintaining our conservative risk profile. Finally, our OpEx-to-equity ratio increased 11 basis points to 1.4% this quarter, bringing our year-to-date ratio to 1.34%. The increase was driven in part by elevated expenses incurred during the quarter, which we expect to moderate in future periods. Overall, the quarter highlighted the benefits of our diversified housing finance platform and disciplined risk management approach. We generated book value growth, a positive economic return, strong earnings, and maintained our conservative yet collectible balance sheet positioning. That concludes our remarks. We will now take questions. Thank you, Operator. Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We'll take our first question from Bose George at KBW. Hey, everyone. Good morning. Actually, first, a question just on the mark-to-market book value. Could we get an update? Sure, Bose. Good morning. As of Friday, book value was off a little over 1%, economic return off roughly 0.5%. Okay, great. Thanks. Then just wanted to ask about dividend coverage. Obviously, you raised the dividend, so clearly you're comfortable with it. But just can you just discuss the economic return of the portfolio relative to the required ROE that's needed to cover the dividend, which looks like it's a little under 15%? Sure. In terms of the economic return and the returns available in the market, we obviously show that depiction in the investor supplement with agency 14%-16% and upwards of 15% in resi and upwards of 13% for MSR funded through warehouse financing. The way we look at it is we have line of sight, I think into the near term using the forwards. When the board sets the dividend, they're very methodical, and we want to make sure that it is earnable. We don't take these decisions lightly. We were certainly encouraged by the fact that we feel like it's earnable over the foreseeable future, and we're on track to modestly out-earn the dividend this quarter, almost equal. In terms of the portfolio, where we own our assets is in a very good position, and it covers very well. Prepayments are relatively low, and we have assets locked in for a very long time. Generally, we feel very good about dividend coverage on a go-forward basis. Okay, great. Thanks. Thank you, Bose. We'll move next to Crispin Love at Piper Sandler. Thank you. Good morning. David, can you, just kind of building on that prior question, just give us a little bit of a view of where you're looking to add incremental capital across your three strategies, looking at slide seven and the returns you referenced. The returns are pretty stable with last quarter, or are stable with last quarter. Last quarter, you seem to be leaning a little bit more into Resi Credit. Just curious on any shifts that you have, kind of where you're most interested in putting the incremental dollar across the three strategies, especially as Agency technicals remain strong. Sure, Crispin. Both Agency technicals and MSR technicals are very strong. As strong as we've seen in quite some time. However, Residential Credit, we believe, exhibits the best risk-adjusted returns. Yes, we would like to incrementally add to Residential Credit, but we have to be responsible as it relates to the underlying credit. We're making a lot of progress. We've priced four transactions already in July, and we're in the market with another deal as we speak. We do expect to add in Resi Credit. Agency is certainly very investable, particularly when you consider the technicals and how broad the demand is. We feel it's a safe place to invest. Vol has come down, notwithstanding the recent turbulence geopolitically. We feel good about it. I'd say, the marginal dollar will probably go into Agency with Resi Credit as we can add. MSR is still right there. As a matter of fact, we added a package just yesterday. We purchased an MSR package with a sub 3% note rate that we feel very good about with a strong OAS. That's it. When it comes to raising capital, Crispin, investing it, I think we would like to just take a second here and talk about what we've accomplished over the past couple of years when we started raising capital again beginning in the third quarter of 2024. We raised $5.4 billion in capital in the last two years, including our preferred last summer. It's been very intentional. Price to book has to be accretive. Assets have to be attractive. To your question, we have to be able to nurture these other businesses, namely Resi and MSR. When you look at the capital allocation associated with those raises, we added $2.6 billion in capital to both Residential Credit and MSR over the past two years, that's helped grow those businesses. The capital raising has fostered the development of these businesses and has been very accretive. We've generated nearly $280 million in accretion. It's added considerable scale, enabled us to develop more partnerships, really been a game changer for us. As a consequence, over the past two years, we've generated just over a 33% economic return since starting to raise capital again. The shareholder has noticed, we've delivered a 53% TSR in those eight quarters. We feel really good about what we've accomplished, both from a capital allocation standpoint as well as a capital raising standpoint. Great, David. I appreciate that. Just one last question from me, just on the administration, FHFA, GSEs. From your seat, how do you think they've been acting, just the impacts of the mortgage markets and spreads? They were definitely very vocal earlier in the year. Would you expect additional actions in the balance of the year, or do you think it's enough for the GSEs to continue buying Agency MBS, which they have been doing in what seems to be a pretty prudent way with definitely some more room to go in the coming months? Yes. We can't say whether there'll be more action, whether it be raising the caps or anything otherwise. They do have plenty of dry powder left. I think through May, they've settled roughly $45 billion in pools. Obviously, the mandate was $200 billion. What I'd say about the GSEs and their approach broadly is it's been very constructive for the Agency market. In January, when spreads tightened as much as they did on the announcement, we were obviously quite concerned about being crowded out. What it feels like today is they are acting much like a relative value market participant. When spreads are wider, they provide support and add, and they slow down the pace or stop buying when spreads tighten. That's served to help stabilize mortgage spreads, and it's made it an easier investment environment, and we welcome their participation. When it's all said and done, let's say they get to the $200 billion, and that's it. We expect them to be a generally responsible participant. They're very good. We know the people there. A lot of them are from prior lives that we worked with in the past, and we respect them a great deal. We're welcoming their participation, and we expect them to be a positive force in the Agency market. Great. Thank you, David. Thanks, Crispin. We'll move next to Marissa Lobo at UBS. Thank you, and good morning. Just looking at current coupon spreads compared to prior periods of Fed leadership transitions, do you feel that today's mortgage market is pricing in a larger uncertainty premium than normal, or how much of the current coupon spread do you think reflects the uncertainty? Thanks, Marissa. I think when you look at mortgages today, what's really driving it is realized and implied volatility is very low and the supply-demand fundamentals are very strong. Since David mentioned after the Iran crisis, we saw after the de-escalation and now we saw both realized and implied vol come down and the basis tighten. The supply has been more muted than what we expected at the beginning of the year, with most people expecting net supply around $160 billion for 2026 compared to what we had penciled in at around $200 billion at the beginning of the year. Fixed income flows have been really strong. 30% of gross issuance is going into CMOs, which is distributed to a wide range of accounts. I think market pricing is really not looking at the uncertainty from the Fed. They're basically looking at where markets pricing volatility. Markets basically pricing volatility like there is not a lot of uncertainty from the Fed. That's helpful. Thank you. Just shifting to growth in the other segments. You've spoken about scale being a competitive advantage, and as you grow Resi Credit and MSRs, where do you still see the greatest opportunities for operating leverage here? Well, look, when it comes to operating leverage, we are an operating light company, and it's served us very well. I talked in the prepared remarks about the lack of origination and servicing, and we feel like we can scale these businesses with the current operating leverage, and it's been beneficial for us. We're not obligated to invest in any one sector because we don't have a lot of operating leverage. Relying on partnerships has been a distinct advantage, particularly in times like these. We're here ready with capital to deploy it. To the extent there's an opportunity to add operating leverage, we'll look at it. For the time being a capital participant has served us very well. Given where we're at in the cycle, we think it'll continue to for the foreseeable future, Marissa. Great. Thank you for the answers. Thank you, Marissa. We'll take our next question from Doug Harter at BTIG. Thanks. Good morning. Can you talk a little bit about, on the Resi Credit side the ability to source the magnitude of loans and the diversity of loans? In talking to others across the industry, it definitely seems like sourcing enough volume is a challenge. Can you sort of talk about where you're seeing the volume coming from, the advantages you have there, and kind of how that translates into the returns of the portfolio? Sure. Thanks, Doug. This is Mike. I think that there's a number of key advantages that we have. One is that we've been in this market. We've been buying Non-QM and DSCR loans for over 10 years. We've been doing it through the correspondent channel for over five years. Annaly has, given the capital that we've raised, we've always delivered consistent pricing. I think that's something that not all of our peers and competitors can say. A lot of our peers are private equity. There are certain times where they're not able to deliver a rate sheet that is competitive because they are raising capital or in a different component of the fund's life. I think, having that stability, having that capital, the reputation that we've earned, I think has been well-earned. I think it's been hard-earned. We've been buying loans during COVID, where we've honored commitments that others have not done. Originators don't always have short memories, I think that there's a lot of goodwill that's been built up through time. On the operational side, we are much deeper than a lot of our competitors and a lot of our peers. We face, at this point now, over 350 correspondents. When you look at a lot of the other correspondent channels that we're competing against, they may be trying to face the top 50 originators. We have gone much further down the chain. We also recently expanded into non-delegated correspondent. We did that in the beginning of the year. That's added significant volume, and it's added volume that's a little bit more price-insensitive than the delegated channel. The service level is very strong. We have a fully staffed scenario desk. We have a fully staffed exception desk. We've invested a lot, as David mentioned, in terms of technology infrastructure. The ability to face 350 originators is very challenging. Lastly, I'll say that our execution on the back end is better than our peers and better than our competitors. We are pricing larger deals, which is able to spread fixed costs and have lower fixed costs because it's a larger balance. Our variable costs, including underwriting fees, are lower than our peers because of the size of the deals that we're able to bring. We're also pricing tighter than the majority of other issuers. That means at the same level of margin as some of our peers and competitors, we're able to offer a higher price, right? We're getting the same ROE at a higher price given some of that secondary execution. There's a lot of new entrants, and the market is competitive. Our lock volume actually decreased quarter-over-quarter. It was $6.7 billion. It's actually down 9%-10%. Part of that is because, as David mentioned, we're looking to earn mid-teens ROEs. We're not just going to be out in the market and leading with pricing and leading with the rate sheet. We'll be diligent. I think the infrastructure that we've built, the number of originators, the relationships that we had, the pricing advantages, that has allowed us to source these assets at a greater clip than a lot of our competitors. Great. Appreciate that, Mike. Then just one clarification. You talked about in the presentation how the economic assets and residential credit were relatively flat. How do I square that with the level of activity that you talked about? What are the puts and takes there? If you look at the actual portfolio, loans are effectively flat quarter-over-quarter. It's $4.7 billion of residential loans. This is on an economic basis. Those are loans that are held on balance sheet that have yet to be securitized. When you look at our OBX portfolio on an economic basis, obviously we report GAAP, but when you look at an economic basis, the OBX portfolio was up $400 million. That's through retained securities. The third-party securities portfolio was down a little over $350 million. We sold $260 million of AAA CRE CLOs as they tightened in. We took advantage of redeploying that into agency. Then our CRT portfolio was also down close to $65 million. Credit spreads did tighten, and especially across third-party securities, we have the ability to monetize that. That's really why you see the flattish portfolio quarter-over-quarter. Doug, just to add, OBX and whole loans represent over 80% of the Resi Credit balance sheet, and that's been the objective. We've used third-party securities to generate yield over time. Manufactured securities in-house are higher-returning assets. The objective is to have the portfolio predominantly characterized by OBX-related assets. Great. Appreciate it. Thank you, guys. Thanks, Doug. We'll move to our next question from Harsh Hemnani at Green Street. Thank you. I guess given what we've seen happen with rates recently, prepayment risk in the market has certainly decreased. We're sort of seeing weighted average coupons move up again across mortgage rate portfolios. How are you sort of balancing that against maybe your outlook for prepayments going forward? I know you added some Agency CMBS, but is there anything we should be thinking about on how you may see drawdowns in the other directions and deal with them? Our strategy for the last two or three years has been that when we move up in coupon, we prefer to do it in quality specified pools. If you look at on page 11 of our investor presentation, we disclose the quality of our pools by coupon. We have a lot of call protection in most of our 6s and 6.5 coupons. On 5.5s, we kind of will tactically take on some generic pools or some TBAs, then when pricing is attractive, convert them into specified pools. Our main strategy to decrease prepayment risk is to buy pools with call protection. That's sort of how we have built, constructed this portfolio for the last three years, and it was very deliberate. That's why it took us a while to go up in coupon, because we didn't want to be exposed to a sharp rally in rates and be in TBA space. We'll continue that strategy. It's just that in the first half of this year, with GSE participation, spec pool valuations went up. Well, spec pools were pretty tight, if you noticed in the first half of the year, we went down in coupon. In the first quarter, we actually went down in coupon into 4.5s because we didn't want to add a lot of TBA 5.5s. Over the second quarter, we kind of moved up in coupon and spec pool valuations are starting to look more attractive. We will continue to add spec pools there. Again, Harsh, from another big-picture standpoint, if you look at the overall prepayment risk and where we take it, we're taking prepayment risk in the Agency portfolio with higher note rate collateral, obviously, but we're taking virtually no prepayment risk in the MSR portfolio. The reason being is you want your prepayment risk in more liquid securities because you can trade around them easier when there are surprises. Then the MSR portfolio being very stable, we don't have to worry about prepayment risk nearly to that extent. Got it. That's helpful. Thank you. Thanks, Harsh. We'll go next to Jason Stewart at Compass Point. Hey, thanks. A question on the MSR market. It sounds like activity was pretty consistent, and the market remains relatively liquid throughout the second quarter. Can you just give us some more color on whether there are any opportunities to be opportunistic? I mean, to your point about originators needing or being more reliant on selling MSR for tech, has that created any idiosyncratic opportunities or any impact from that trend? Yeah. Hi, this is Ken. Thanks for the question. Our model as Dave mentioned in the comments, being operational light and kind of working with partners and being primarily variable cost, has really allowed us to kind of participate in a way most others can't. Those MSR holders who service their own loans, when they need liquidity, if they sell MSR to another buyer who also services their own loans, not only do they have the gain or loss from selling the MSR, but they're left often with stranded costs. Our model is pretty unique because we're operating at this scale and utilizing sub-servicers. We're generally the favored buyer because we're not competing for those units on our platform. That's been a real niche that we've been able to capitalize. We have this portfolio of not just sub-servicers, but many of them are also MSR sellers to us. In those situations, we're really not competing with the bulk of the buyers. I think another niche is in the flow market. Dave mentioned we kind of picked up some activity there. What's going on there is we're also an opportunistic buyer there, and we're not forced to generically buy flow. Now we've increased and we're seeing that volume increase because we've grown our network of sellers. We're now up to close to 200, over 175. What we're seeing there is we're utilizing very granular pricing. We're the only large MSR holder who also maintains a large specified pool portfolio. All the analytics that go into our specified pool pricing goes into very granular MSR pricing that we don't really see others doing. We're able to pick up better OAS, better convexity in that way, we think we're very differentiated there as well. Yeah, Jason, another way to characterize it is we don't want to compete with banks do have demand for MSR in the current environment, particularly considering the capital rule proposals. The way we operate, the channel in which we operate using sub-servicers and buying MSR servicing retained, we're not competing in that channel, that enables us to extract better value than that which appears to be apparent in the market and headline pricing. Yeah. Okay. That makes sense. Then a follow-up to Doug's question, Mike, on Resi Credit. To the extent pricing on the origination side changes, is there, in theory, a point at which you would find, I guess I understand this is completely theoretical, a point you would find secondary security opportunities more attractive, if it were, would you pivot back to securities rather than organically created assets? Yeah, Thanks, Jason. I think that we did show that in Q1 where there was significant growth. Part of the CRE CLO portfolio that got to be $395 million was a reallocation from Agency MBS tightening early in January given the GSE announcement. As that has tightened 5-10 basis points, we've subsequently taken that off and redeployed. In the first quarter, we also were active in buying Non-QM B1s from third-party shelves. We were also active buying unrated A2s and NPL/RPLs, which at the time were like 13%-14% ROEs. Most of the third-party securities that we see, they're closer to 11%-12% ROEs. Q2 is actually a really good environment to show how important it is to have a manufacturing entity. When you look at actual spreads, AAA spreads, as Dave mentioned on the call, they were 10 basis points tighter quarter-over-quarter on the AAA level. On the BBB level, spreads were actually 25 basis points tighter. The credit curve actually flattened. I think this quarter was a reflection of our ability to move out of third-party securities and continue to invest in the proprietary assets that we have better line of sight, and we also have the ability to set those margins. Yes, I think that we have a flexible capital allocation model, both on the actual three businesses, but then also within the three businesses. If that becomes an opportunity, we certainly have the acumen and the personnel to be able to capitalize on it. Got it. Okay. Thanks a lot. Thanks, Jason. We'll go next to Hongliang Zhang at J.P. Morgan. Yeah. Hey, guys. I guess, how do you guys think about your ability to tap the equity markets at your current stock price? Well, look, the three criteria, obviously price to book, assets need to be attractive, as I mentioned earlier, we need to be able to feed the businesses. When we look at the stock price, we certainly think it warrants a premium given what we've created and the franchise value and the fact that nobody can replicate what we can do in our track record. We've just completed the 11th straight quarter of a positive economic return, and investors are valuing it. Our premium isn't very high. It's modest. We think it's actually low given the value creation and what we've built and the proprietary ability to acquire assets and manage those. As we look at raising capital, we want to be gentle with the market. We did raise nearly $450 million last quarter. We were very soft with respect to our footprint. We weren't in the market on days when the stock wasn't performing well. We were a very low percentage of volume. In fact, the overall capital raise was a little over 2.5% of the outstanding, which relative to some participants in the space is very low as a percentage of overall capital. That's how we'll behave. We don't want to disrupt the stock price. We need to make sure we can buy assets, and we need to make sure we can generate positive returns. To the extent that's available and we're gentle and we respect the stock, we'll continue to do so. Got it. Thank you. Thank you, Hongliang. Give Rick our best, please. Will do. We'll move to our next question from Trevor Cranston at Citizens JMP. Hey, thanks. One more question on the Residential Credit side. You guys mentioned that you were able to price a couple of large Non-QM transactions. I was curious, as you look ahead to the second half of the year, if there's any particular collateral type that you guys are focused on as the best opportunity to deploy capital. Generally, if you see much kind of dispersion in risk-adjusted returns available across the different collateral types that you guys are focused on. Thanks. Yeah. Thanks, Trevor. This is Mike. As Dave mentioned, we've priced 25 deals, $14.2 billion. Of that number, 70% is Non-QM and DSCR. That will continue to remain the core collateral that Annaly is well-suited to purchase. We still believe that that actually is the highest ROE, but it's also the highest capital that you can commit relative to some of these other products. Owner-occupied Agency loans, investor loans, HELOCs, close in seconds, they are not as scalable at this point in time. A lot of it is just our competitive advantage is the infrastructure. It is facing those 350 originators. Our cost base is lower because we're able to buy that much deeper in the chain. I think the point we're trying to make is that we have the ability to flex into other areas of the Residential Credit market. Non-QM and DSCR really will remain the core competency of the company. In terms of some of our goals for this year, it really was to bring larger deals. Dave mentioned it again on the script, but we did $1 billion deal. It was non-QM8, and then subsequently, we did another $1 billion deal within two weeks, non-QM9. A lot of that is just a reflection of the growth in the market itself. There's already been $65 billion of Non-QM issuance this year. It'll probably be north of $100 billion, so it's 40% of the entire Residential Credit market. A lot of it is a reflection of our team's hard work in terms of the OBX securitizations. We treat our investors as business partners. We have a long-term view in terms of trying to increase demand towards our securitizations, which has led to us being able to do those billion-dollar deals. We certainly want best economics for our shareholders, but I think we act in a little bit more equitable way than some of our peers. We're not trying to tighten and test every single deal that we bring. We want both our investors and ourselves to walk away from these transactions and feel good about the process and the experience. The reason is because we're averaging 3.5 deals per month. It doesn't benefit us to have our investors not have really strong experiences. I think that we feel really good with where we're positioned. The average deal size within Non-QM this year, it's been over $900 million. There's no other company that can say that. We really would like to move to a programmatic issuance where we are doing $1 billion+ transactions. The increase in the Non-QM market, and then also our investor base has also increased. We've had over 250 investors participate in the OBX securitization platform since 2018. Our average deal, I'll say that we probably have between 45- 50 different investors participate on our Non-QM transactions. That is where we see the bulk of the opportunity, but we can pivot to other collateral types, as we've shown here this quarter. Got it. Okay. Very helpful color. Thank you. Thanks, Trevor. Next, we'll go to Kenneth Lee at RBC Capital Markets. Hey, good morning, and thanks for taking my question. Just one more on the recent dividend increase here. Wanted to get your thoughts around the resiliency or how you think about the resiliency of the earnings power, especially in the context of any continued geopolitical uncertainty and the flattening yield curve. Thanks. Sure. As I mentioned earlier, Ken, we take the dividend decision very seriously, and our board is very thoughtful about it, and we do stress the environment to make sure that the dividend is earnable. We expect to be able to cover the dividend over a period of time. There will be quarters where we'll out-earn it, and maybe we might be on top or even a touch below. Over a longer period of time, with all the information we have today, we expect to earn the dividend, and that's what informed the decision to increase it. Now, there is a lot of uncertainty. We're still living beneath the lion's paw, so to speak, as it relates to the geopolitical environment and volatility. Generally speaking, we feel good about it. We made the decision and we expect it to be a good one. Got it. Very helpful there. Just one follow-up, if I may. You mentioned the prepared remarks modestly rotating into higher loan balances within the MSRs. Wondering if you could just talk a little bit more about that, some of the motivations behind that. Thanks. Yeah. As is mentioned again, we're on pretty much a completely variable cost model. We pay a fixed cost per loan to have our collateral sub-serviced. That impact on the yield changes with the actual average loan size being serviced. It has less impact on higher loan balance than it does on lower loan balance. What we found is the costs we're paying are really the best in class of the industry's marginal cost plus a marginal profit margin, as opposed to something closer to the average cost of the industry. Our cost to service our portfolio is, we believe, materially lower than the average cost in the industry through using sub-servicers, again, because we're priced at marginal cost plus a profit margin. When portfolios come out for the market, those participants that service their own loans, they model things at their marginal cost. They're much more aggressive on low loan balance collateral. Selling low loan balance and buying high loan balance is a total pickup in economics and yield for us, where when you service your own loans, you really need to keep units on the platform, right? We can be an opportunistic buyer where these other participants are forced buyers. Does that make sense? Yep, that makes sense. Very helpful there. Thanks again. Thank you, Ken. That concludes our Q&A session. I will now turn the conference back over to David for closing remarks. Much appreciated, Audra. Thank you everybody for joining us. Enjoy the rest of your summer. We'll talk to you soon. This concludes today's conference call. Thank you for your participation. You may now disconnect.