Notes:  07/12/2016 -- Annaly Capital Management, Inc. (NYSE:NLY), announced today that it has completed the previously announced exchange offer for all of the outstanding shares of common stock of Hatteras Financial Corp. (NYSE:HTS). The exchange offer to acquire all of the outstanding shares of Hatteras common stock expired at 5:00 p.m., Eastern Time, on July 11, 2016. The depositary for the exchange offer has informed Annaly that a total of 70,066,823 shares of Hatteras common stock, representing approximately 74.12% of Hatteras’ outstanding common stock, were validly tendered and not validly withdrawn in the exchange offer. All shares that were validly tendered and not validly withdrawn have been accepted for payment in accordance with the terms of the exchange offer and applicable law. Of the shares tendered into the exchange offer, 19,132,243 shares made an election to receive the mixed consideration, 3,000,559 shares made an election to receive the all-cash consideration, and 47,934,021 shares made an election to receive the all-stock consideration. Hatteras common stockholders who elected to receive the mixed consideration or tendered without a valid election will receive the mixed consideration, which consists of $5.55 in cash and 0.9894 shares of Annaly common stock per share of Hatteras common stock; Hatteras common stockholders who elected to receive the all-cash consideration will receive $15.85 in cash per share of Hatteras common stock; and Hatteras common stockholders who elected to receive the all-stock consideration will be subject to proration at a rate of approximately 69%, and will receive their consideration in the form of $15.85 in cash for each share not accepted for the all-stock election due to proration and 1.5226 shares of Annaly common stock per share of Hatteras common stock for shares that were accepted for the all-stock election. Hatteras common stockholders will receive cash in lieu of fractional shares of Annaly common stock. Pursuant to the merger agreement, dated as of April 10, 2016, among Annaly, Hatteras and Ridgeback Merger Sub Corporation, a wholly owned subsidiary of Annaly (“Merger Sub”), Annaly intends to complete the acquisition of Hatteras through a second-step merger of Hatteras with and into Merger Sub without a vote of Hatteras’ stockholders, pursuant to Section 3-106.1 of the Maryland General Corporation Law (the “Merger”). In accordance with Maryland law, the Merger is expected to be consummated on July 12, 2016. Upon consummation of the Merger, Hatteras will become a wholly owned subsidiary of Annaly. In connection with the Merger, all shares of Hatteras common stock not validly tendered into the exchange offer will be cancelled and converted into the right to receive merger consideration in the same amounts offered in the exchange offer. Holders of these shares will have the opportunity to elect among the mixed consideration, the all-cash consideration and the all-stock consideration, subject to proration, as described in the prospectus/offer to exchange, dated July 8, 2016, filed by Annaly with the Securities and Exchange Commission in connection with the transaction. In addition, upon consummation of the Merger, all of the outstanding shares of Hatteras 7.625% Series A Cumulative Redeemable Preferred Stock (the “Hatteras Series A Preferred Stock”) will be cancelled and converted into the right to receive one newly issued share of Annaly’s 7.625% Series E Cumulative Redeemable Preferred Stock, which will have substantially the same terms as the existing terms of the Hatteras Series A Preferred Stock. As a result of the acquisition, shares of Hatteras common stock and Hatteras Series A Preferred Stock will cease to be traded on the NYSE.

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Address:   110 Oakwood Drive, Suite 340, Winston Salem, NC 27103
Main Phone Number	336-760-9347
Fax Number	336-760-9391
Investor Contact (CFO)   Kenneth A. Steele	336-760-9331
Toll Free Phone Number	Unknown

CEO - Michael R. Hough

CFO - Kenneth A. Steele