Annaly posts loss of $1.36 a share, earnings available for distribution of $0.80

Key Facts

Annaly Capital Management, which specializes in mortgage finance investments, reported an accounting loss of $1.36 per share for the third quarter of 2026, according to its earnings release issued on October 20. Earnings available for distribution, meanwhile, totaled $0.80 per share for the same period, a measure the company calculates on a non-GAAP basis. The measure rose from $0.79 per share in the second quarter, according to the company's disclosure of its previous results. The increase in earnings available for distribution coincided with a negative economic return of 7.6% in the third quarter, according to the earnings release. The quarterly increase in earnings available for distribution was thus accompanied by a loss under accounting standards, alongside the loss recorded by the company's economic return measure.

On funding, the average economic cost of interest-bearing liabilities rose to 4.03% in the third quarter, according to figures Annaly released with its results. The company had reported an average economic cost of funding of 3.96% in the second quarter of the same year, according to its previous disclosure. Economic leverage also rose to 5.9 times at the end of the third quarter, compared with 5.6 times at the end of the previous quarter, according to the latest earnings release. In its hedging management, the company said it primarily added Treasury futures to counter duration extension caused by market movements during the period. The hedge ratio stood at 100% at quarter-end, alongside increases in both economic leverage and average funding costs from their second-quarter levels.

On assets, Annaly's total portfolio stood at $106.5 billion at the end of the third quarter of 2026, according to investment portfolio details in the company's release. The agency portfolio accounted for $91.8 billion of that total, making up the largest portion of the investment portfolio at the end of the period. In residential credit, the portfolio's value was roughly unchanged at $10.4 billion at quarter-end, according to the company's description of activity in the business. The market value of the mortgage servicing rights portfolio rose to $4.3 billion at the end of the same period, according to the disclosure. The company's investments were thus spread across the agency, residential credit and mortgage servicing rights portfolios, with residential credit almost entirely stable and the value of servicing rights rising.

In its loan business, financing through the whole-loan purchase channel reached a record $5.8 billion in the third quarter, according to Annaly's release. This activity formed part of the company's mortgage finance operations, alongside its existing investments in the portfolios whose values it reported at period-end. Residential credit securitization issuance also reached a record $7.4 billion during the same quarter, according to the disclosure. On capital, the company raised $757 million through its at-the-market share sale program during the third quarter of 2026. The amount represents capital raised net of offering commissions and expenses, according to the company, which announced the proceeds alongside the record levels of loan financing and securitization issuance.

Annaly internally manages its mortgage finance investments and has elected tax treatment as a real estate investment trust, according to the description in the company's announcement of its earnings discussion. On book value, the company ended September 2026 at $17.86 per share, according to its third-quarter earnings release. That compares with a book value of $20.15 per share at the end of June of the same year, according to its second-quarter earnings disclosure. In its previous release, the company had described that level as "book value per common share of $20.15," before the decline recorded in the latest period. The decrease occurred between the end of June and the end of September, the period covering the transition from second-quarter results to the announced third-quarter results.

Annaly is scheduled to hold a call to discuss its results on October 21, 2026, according to the date the company set in its earlier announcement of the earnings release. The call begins at 9:00 a.m. U.S. Eastern Time, following the disclosure of third-quarter performance. At a later date, payment will fall due for the third-quarter common stock cash dividend announced by the company, according to its dividend release. Annaly set the dividend at $0.75 per share, payable on October 30, 2026. The dividend is for common shareholders of record on September 30, 2026, according to the terms the company announced when approving the cash payment.