Annaly Capital Management reported first‑quarter 2026 results that included a net income of $0.33 per share and earnings available for distribution of $0.76 per share. The company’s earnings per share beat analyst expectations of $0.74, a $0.02 or 2.7% surprise, while the reported revenue of $452.7 million fell short of the consensus estimate of $592.03 million by nearly 24%.
Revenue for the quarter was $452.7 million, down from $220.0 million in Q1 2025 and $366.6 million in Q4 2025. The miss reflects a combination of lower agency‑originated income and a slowdown in the legacy mortgage servicing segment, which together offset gains in the company’s higher‑margin non‑agency businesses.
Segment performance highlighted a 30% expansion of the Residential Credit portfolio to $10.3 billion, driven by record whole‑loan production, and a 9% increase in the Mortgage Servicing Rights (MSR) portfolio to $4.2 billion, supported by bulk and flow market opportunities. The Agency segment remained relatively flat, underscoring the company’s strategic shift toward higher‑yielding non‑agency assets.
Net interest income rose by $1.14 billion and net servicing income increased by $0.52 billion, contributing to a net interest margin of 1.71%—up from 1.69% in the prior quarter. The margin expansion reflects tighter cost control and a favorable interest‑rate environment that allowed the company to maintain pricing power across its diversified portfolio.
"The first quarter of 2026 marked Annaly's tenth consecutive quarter of positive economic returns as our diversified housing finance platform further demonstrated its ability to deliver superior risk‑adjusted returns across a range of market environments," said CEO and Co‑Chief Investment Officer David Finkelstein. He added, "Earnings again exceeded our dividend, and we grew the portfolio through accretive capital raising and disciplined portfolio management." Finkelstein also noted that the company increased capital allocation to non‑Agency businesses, citing compelling relative value, and highlighted the resilience of its hedging strategy amid market volatility.
Market reaction was modest, with the stock edging up 0.1% in after‑hours trading. The slight lift was driven by the EPS beat and the company’s record of positive economic returns, which outweighed the impact of the revenue miss.
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