Annaly Capital Management Reports $827.8 Million Net Income in Q2 2026

Annaly Capital Management, Inc. reported significant financial performance for the second quarter of 2026, with net income reaching $827.8 million, or $1.06 per share, compared to $60.4 million, or $0.03 per share, in the same period last year. The company’s total revenue for the quarter was $1.8 billion, driven by a notable increase in net interest income, which rose to $488.2 million from $273.2 million year-over-year. This growth was attributed to higher interest income from agency mortgage-backed securities and residential mortgage loans, alongside a favorable shift in net gains on derivatives, which amounted to $552.4 million, a stark contrast to the losses of $388.8 million reported in the previous year.

In terms of operational changes, Annaly's total assets increased to $143.7 billion as of June 30, 2026, up from $135.6 billion at the end of 2025. This growth was primarily driven by a $6.2 billion increase in securitized residential whole loans and a $2.3 billion rise in residential mortgage loans. The company also reported a significant increase in its common stock outstanding, with 750.6 million shares issued as of June 30, 2026, compared to 707.0 million shares at the end of the previous year. The increase in shares was part of the company's ongoing at-the-market sales program, which raised approximately $447 million during the quarter.

Strategically, Annaly continued to enhance its portfolio by shifting its exposure towards higher coupon securities, reducing its holdings in lower coupon assets. The company also closed 13 securitizations totaling $6.8 billion in unpaid principal balance during the quarter, further solidifying its position as a leading issuer in the residential credit market. The correspondent channel produced $6.7 billion of locks and $5.1 billion of fundings, marking a record for the company. Additionally, Annaly's mortgage servicing rights portfolio decreased slightly to $4.1 billion, reflecting ongoing market dynamics.

Looking ahead, Annaly's management expressed optimism about the economic environment, which is characterized by robust growth and improving labor market conditions. However, they acknowledged the potential for interest rate hikes by the Federal Reserve, which could impact future earnings. The company aims to maintain a conservative leverage ratio, with an economic leverage ratio of 5.6:1 as of June 30, 2026, consistent with its risk management framework. Annaly's focus remains on optimizing returns while navigating the complexities of the mortgage finance landscape, with a commitment to maintaining its REIT status and delivering value to shareholders.