Annaly Capital Management, Inc. Announces Recent Corporate Responsibility Initiatives and Enhancements

NEW YORK--(BUSINESS WIRE)--Annaly Capital Management, Inc. (NYSE:NLY) (the “Company” or “Annaly”), a leading diversified capital manager, continues to demonstrate industry leadership across Environmental, Social and Governance (“ESG”) practices with recent initiatives, achievements and enhancements in its ongoing corporate responsibility efforts.

“Annaly has a long-standing commitment to best-in-class management and governance practices that have positive impacts on shareholders, the Company, employees and society. We continue to proactively build on our existing policies across the dimensions of corporate responsibility and ESG that have been crucial to the success and shared values of our business,” said Kevin Keyes, Chairman, Chief Executive Officer and President. “Included in my highest priorities upon becoming CEO in 2015 was to enhance Annaly’s governance, corporate and financial disclosure and meaningfully increase dialogue with our shareholders. I am grateful for the thoughtful and supportive feedback we have received, which has further validated Management’s continuing efforts and Annaly’s overall leadership around corporate responsibility,” Mr. Keyes continued. “I take pride in our focus on these critical initiatives and what they represent for the future of Annaly.”

Corporate Responsibility Highlights

Annaly continually focuses on integrating the following six key areas of corporate responsibility into the Company’s overall strategy: corporate governance, human capital, responsible investments, risk management, ethics and integrity and the environment.

Corporate Governance

• Today the Board of Directors of the Company (“the Board”) appointed Dr. Kathy Hopinkah Hannan, PhD, CPA, as a new Independent Director, representing the third female Independent Director added to the Board since the beginning of 2018. A former Global Lead Partner, National Managing Partner and Vice Chairman of KPMG, Dr. Hannan brings over 30 years of financial, governance and corporate advisory experience to the Board.
• The Company’s Board now consists of 12 members, of whom 83% are Independent, 42% are women and 25% have tenure of less than five years.
• In the fourth quarter of 2018, Annaly’s Board unanimously approved a bylaw amendment to declassify itself and also adopted an enhanced Board refreshment policy with both a mandatory retirement age and a tenure limit.
• Annaly expanded the reach of corporate responsibility across the Company and the Board with the appointment of Tanya Rakpraja as Head of Corporate Responsibility and Government Relations in 2018, and the establishment of the Public Responsibility Committee of the Board in 2017. Ms. Rakpraja has nearly 20 years of experience in roles spanning community development, finance and public policy, most recently at Capital Impact Partners (“Capital Impact”) where she was Senior Director of Strategic Lending Initiatives.

Human Capital

• In January 2019, Annaly was recognized in the Bloomberg Gender-Equality Index for the second consecutive year.
• Annaly remains committed to advancing women in the workplace, evidenced by women representing 40% of Managing Director promotions and 50% of additions to Annaly’s Operating Committee since 2015.
• Annaly’s strong ownership culture is demonstrated by the fact that 100% of the senior employees subject to the Company’s voluntary Stock Ownership Guidelines meet, or are on track to meet, such guidelines, and that 53% of employees across the Firm own shares of Annaly common stock, an increase of over 50% since 2015.
• Annaly’s Women’s Interactive Network (“WIN”) continues to expand on initiatives that are focused on championing diversity across the Company, including: professional development, mentorship and internal employee engagement.
• Results of the annual employee engagement survey showed 85% responded favorably across the questionnaire in 2018, representing the third consecutive year of score improvement and an increase of over 25% in positive support from 2015.¹
• Annaly’s 2018 voluntary turnover rate of 7% compares favorably to the financial services sector voluntary turnover rate of 17% in 2018.²

Responsible Investments

• Across its investment strategies, Annaly has financed approximately 750,000 homes for Americans and their families across 50 states³ and invested over $1.5 billion in middle market businesses and commercial real estate that support key pillars of the U.S. economy.⁴
• In January 2019, Annaly and Capital Impact announced a second social impact partnership bringing combined commitments supporting urban and rural communities across the country to $50 million.⁵ The second joint venture invests in affordable housing and community development projects in Washington, D.C.

Risk Management

• In 2018, the Board and senior management further enhanced the risk committee framework, deepening the comprehensive oversight across the Firm.
• Annaly has significantly expanded the capabilities and expertise of its Risk function, doubling the number of professionals since 2015, while maintaining independent oversight and approval of investment guidelines and credit decisions.

Ethics & Integrity

• In the fourth quarter of 2018, the Company implemented an enhanced corporate compliance function responsible for the oversight of the Company’s regulatory compliance.
• A newly appointed Chief Compliance Officer, Miki Kamijyo, has reporting lines to the Board Audit Committee and leads the Corporate Compliance Group. Ms. Kamijyo has over 10 years of senior management experience in legal, regulatory and compliance matters, and was most recently the Chief Compliance Officer and Legal Counsel at GreenOak Real Estate.

Environment

• In 2018, Annaly launched an internal Company-wide campaign to raise awareness and engagement with employees around sustainability and conserving resources at its corporate headquarters.
• The focus on operating responsibly within Annaly’s headquarters also resulted in an extensive energy audit to more thoroughly track and monitor the Company’s impact and energy use.
• Annaly has invested nearly $430 million in environmentally friendly buildings and businesses.⁶

Annaly encourages visitors to view the new Corporate Responsibility section of its website, which features a detailed narrative providing transparency and disclosure around Annaly’s leading principles and efforts, at www.annaly.com/corporate-responsibility.

About Annaly

Annaly is a leading diversified capital manager that invests in and finances residential and commercial assets. Annaly’s principal business objective is to generate net income for distribution to its stockholders and to preserve capital through prudent selection of investments and continued management of its portfolio. Annaly has elected to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. Annaly is externally managed by Annaly Management Company LLC. Additional information on the Company can be found at www.annaly.com.

Forward-Looking Statements

This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements which are based on various assumptions (some of which are beyond our control) and may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “anticipate,” “continue,” or similar terms or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability of mortgage-backed securities and other securities for purchase; the availability of financing and, if available, the terms of any financings; changes in the market value of our assets; changes in business conditions and the general economy; our ability to grow our commercial real estate business; our ability to grow our residential credit business; our ability to grow our middle market lending business; credit risks related to our investments in credit risk transfer securities, residential mortgage-backed securities and related residential mortgage credit assets, commercial real estate assets and corporate debt; risks related to investments in mortgage servicing rights; our ability to consummate any contemplated investment opportunities; changes in government regulations or policy affecting our business; our ability to maintain our qualification as a REIT for U.S. federal income tax purposes; and our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. We do not undertake, and specifically disclaim any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law.

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¹ Survey results based on 2018 Annaly internal survey conducted by Perceptyx. Score represents average of underlying questions for each category / item across the entire 50-question, 12-category survey.

² Financial Services Sector data per United States Department of Labor, Bureau of Labor Statistics, “Job Openings and Labor Turnover Summary”, using 2018 total.

³ Financial data as of December 31, 2018. Represents the estimated number of homes financed by Annaly’s holdings of Agency MBS, residential whole loans and securities, as well as multi-family commercial real estate loans, securities and equity investments. The number includes all homes related to securities and loans wholly-owned by Annaly and a pro-rata share of homes in securities or equity investments that are partially owned by Annaly.

⁴ Represents the cumulative commitment value at investment date of Annaly’s middle market lending and commercial real estate investments in health care, data and technology, sustainable environment and economic opportunities across communities, including current and prior investments, through December 31, 2018.

⁵ Initial (November 2017) Joint Venture: Annaly’s investment represents $20 million and Capital Impact’s investment represents $5 million. Second (January 2019) Joint Venture: Annaly’s commitment represents $20 million and Capital Impact’s commitment represents $5 million.

⁶ Represents the cumulative commitment value at investment date of Annaly’s commercial investments, including current and prior investments.