8-K: Annaly Capital Management Reports Q2 2026 Results

Annaly Capital Management announced its second quarter 2026 financial results, reporting GAAP net income of $1.06 per share and increasing its common stock cash dividend to $0.75 per share.

Summary

• Annaly Capital Management reported its financial results for the second quarter ended June 30, 2026.
• GAAP net income was $1.06 per average common share, and Earnings Available for Distribution (EAD) was $0.79 per average common share.
• The company achieved an economic return of 5.5% for the quarter and reported a book value per common share of $20.15.
• GAAP leverage increased slightly to 7.4x, while economic leverage decreased to 5.6x.
• The common stock cash dividend was increased to $0.75 per share.
• The total portfolio stood at $109.4 billion, with $95.0 billion in the Agency portfolio.
• Annaly Residential Credit portfolio was $10.4 billion, and the MSR portfolio was $4.1 billion.
• The company raised $447 million through its at-the-market sales program.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, with an increased dividend, solid economic returns, and successful capital raising, despite a slight increase in GAAP leverage.

Positives

• Increased common stock cash dividend to $0.75 per share.
• Achieved a 5.5% economic return for the second quarter, contributing to a 6.9% economic return for the first half of 2026.
• EAD exceeded the dividend for the ninth consecutive quarter.
• Annaly's Agency portfolio increased by nearly $3 billion.
• Annaly Residential Credit Group issued a record thirteen securitizations totaling $6.8 billion.
• Raised $447 million of accretive capital through the at-the-market sales program.
• Average GAAP cost of interest-bearing liabilities decreased slightly to 4.28%.

Negatives

• GAAP leverage increased to 7.4x from 7.3x in the prior quarter.
• Net gains (losses) on investments and other were a loss of $318.5 million for the quarter.
• Net gains (losses) on derivatives were a gain of $552.4 million, but this can be volatile.

Risks

• The filing notes that actual results could differ materially from forward-looking statements due to significant risks and uncertainties.
• Factors that could cause actual results to differ are detailed in their most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.
• Elevated macro uncertainty led to a conservative hedge positioning.

Future Outlook

Management sees meaningful opportunities across all three investment strategies and believes its scale, liquidity, and disciplined capital allocation position it to continue delivering compelling risk-adjusted returns across market cycles. The company expects to continue delivering durable earnings power.

Management Comments

• "Annaly delivered another quarter of solid results, demonstrating the strength and breadth of our diversified housing finance platform, including a 5.5% economic return and EAD that exceeded the dividend for the ninth consecutive quarter."
• "These results contributed to a 6.9% economic return through the first half of 2026 and supported our decision to increase the quarterly common stock dividend to $0.75 per share, reflecting the durable earnings power of our portfolio."
• "Looking ahead, we see meaningful opportunities across all three of our investment strategies and believe our scale, liquidity and disciplined capital allocation position us to continue delivering compelling risk-adjusted returns across market cycles."

Industry Context

StockSavvy.ai notes that Annaly Capital Management's results reflect the ongoing dynamics within the mortgage REIT sector, characterized by a focus on managing interest rate risk and leveraging diversified portfolios. The increase in dividend and positive economic return suggest resilience in a complex market.

Comparison to Industry Standards

• Annaly's GAAP net income per share of $1.06 and EAD per share of $0.79 are key performance indicators within the mortgage REIT industry.
• The company's economic leverage of 5.6x is a critical metric for assessing risk appetite compared to peers.
• The dividend yield of 13.42% (based on closing price) is a significant factor for income-focused investors in this sector.
• Annaly's position as the largest non-bank issuer and second largest issuer overall of Prime Jumbo and Expanded Credit MBS highlights its competitive standing in securitization markets.

Stakeholder Impact

• Shareholders benefit from an increased common stock cash dividend of $0.75 per share.
• Investors may see continued value creation through economic returns and capital appreciation.
• Creditors and other financing partners are impacted by the company's leverage ratios and capital structure.

Next Steps

• Continue to invest accretive capital into higher coupon TBA securities and specified pools.
• Maintain conservative hedge positioning.
• Continue to focus on opportunities across all three investment strategies.
• Continue to deliver compelling risk-adjusted returns across market cycles.

Key Dates

Recommendation

The company delivered expected results with a dividend increase and solid economic performance. However, the slight increase in GAAP leverage and the inherent volatility in derivative gains/losses warrant a 'hold' recommendation pending further market clarity and sustained performance.

Keywords

Annaly Capital Management, 8-K, Financial Results, Q2 2026, Preferred Stock, Mortgage Servicing Rights, Securitization, Leverage