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Annaly Capital (NLY) Q3 2026 Earnings Report
NLY Q3 2026 EPS Results
- Actual EPS
- $0.80
- Consensus EPS
- $0.77
- Beat/Miss
- Beat by +$0.03
- One Year Ago EPS
- $0.73
NLY Q3 2026 Revenue Results
- Actual Revenue
- $2.31B
- Expected Revenue
- $637.41M
- Beat/Miss
- Beat by +$1.67B
- YoY Revenue Growth
- +41.55%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/20/2026
- Time
- After Close
- Conference Call
- Tuesday, October 20, 2026
Annaly Capital's next earnings date is estimated for February 10, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call was broadly constructive despite a difficult third quarter for fixed income markets. Management reported a negative 7.6% economic return and an 11.4% decline in book value per share, but earnings remained above the dividend, liquidity and financing access remained substantial, credit performance was strong, and management identified attractive prospective returns across Agency, residential credit, and MSR. The company also expressed confidence in its conservative positioning, dividend coverage, and ability to deploy capital as volatility moderates.
Annaly expects to outearn its $0.75 quarterly dividend in Q4, with the current portfolio delivering the dividend, while 2027 will depend on how it evolves; capital allocation is residential credit first, close second Agency, and then not far behind is MSR, with room to grow and maintain a 20% capital allocation to the sector. Agency new money returns are in the mid to high teens, residential credit returns are 13%-16%, residential loans can earn mid-teens returns, and certain BB non-QM bonds could provide 16%, 17%; the company expects non-QM origination this year to be $150 billion to $175 billion, total mortgage origination of $1.9 trillion to $2 trillion, and non-QM to remain 8%-9% of originations. Annaly expects 2026 to be a post GFC record in transaction volume, continues to see ample liquidity and balance sheet capacity to put capital to work, and believes spreads and volatility provide an opportunity to increase leverage tactically, although current leverage generates the returns needed. If mortgage rates stay at 7.375% to 7.5% for an extended period of time, housing can go negative by a couple points nationally, or down 2%-3%, 3%-4%.
- Earnings Exceeded DividendEarnings available for distribution increased by $0.01 to $0.80 per share, exceeding the quarterly dividend of $0.75 per share for the quarter.
- Strong Mark-to-Market Recovery in OctoberAs of the Friday before the call, book value was up about 2% excluding the dividend accrual and closer to 3% inclusive of the dividend, and had been sideways since.
- Conservative Capital StructureAnnaly redeemed its $443 million Series I floating-rate preferred stock during the quarter. Management said the redemption supports a very conservative capital structure, while repo financing remained readily available and residential credit and MSR warehouse terms continued to improve.
- Successful Common Equity IssuanceThe company issued $757 million in common equity through its ATM program, using the proceeds to fund the preferred stock redemption and invest across its portfolios.
- Agency Portfolio Maintained With Selective AdditionsThe Agency portfolio decreased modestly to $92 billion in market value, representing 55% of the firm's capital, while the company added approximately $2 billion notional of MBS, focused primarily on higher-coupon specified pools, including five and a halfs and sixes.
- Agency Portfolio Positioning and RotationThe company entered the quarter with conservative duration exposure and historically low leverage. In early Q4, it monetized outperformance by rotating over $2 billion of primarily seasoned pools into higher-coupon TBAs, which management said should benefit more from declining volatility.
- Residential Credit Origination RecordThe Onslow Bay correspondent channel delivered $7 billion of lock volume and $5.8 billion of fundings, its highest quarterly funding volume since inception more than five years ago. The current locked pipeline had an average FICO of 766 and average LTV of 67%, with management stating that growth had not come at the expense of credit discipline.
- Expanded Credit Securitization LeadershipAnnaly settled $7.4 billion of transactions in Q3 and priced an additional $2.2 billion in October. It remained the market's largest expanded credit sponsor and had priced more than $21 billion of securitizations in 2026 across 37 deals.
- Resilient Non-Agency and Non-QM MarketsManagement said the private-label market remained resilient and expected 2026 to be a post-GFC record in transaction volume. Non-QM issuance was up nearly 60% year to date, with approximately $95 billion issued during the year versus $80 billion for all of the prior year.
- MSR Portfolio Growth and Market Share GainsThe MSR portfolio increased to $4.3 billion in market value, representing 22% of the firm's capital. The company settled one bulk package of roughly $140 million and generated just over $50 million of flow-channel volume, a new quarterly high as it continued gaining market share in the co-issue sector. Annaly remained the largest purchaser of bulk MSR year to date.
- Strong MSR Credit and Prepayment CharacteristicsMSR prepayment speeds decreased to 4.8 CPR, reflecting the portfolio's low average note rate, seasonal factors, and higher mortgage rates. Serious delinquencies remained below 60 basis points, supporting what management described as a predictable cash-flow profile.
- Liquidity and Financing CapacityTotal warehouse capacity across residential credit and MSR remained $8.3 billion, including $2.8 billion of committed capacity. Utilization was approximately 57% for residential credit and 50% for MSR. The company ended the quarter with $6.9 billion of unencumbered assets, including $4.2 billion of cash and unencumbered Agency MBS, and approximately $8.5 billion of assets available for financing.
- Lower Operating ExpensesThe operating-expense-to-equity ratio decreased 11 basis points to 1.29% for the quarter, while expenses moderated from the elevated second-quarter level due to lower compensation and other general and administrative expenses.
- Residential Credit Return OpportunitiesManagement identified several residential credit opportunities producing mid-teens or potentially higher returns, including 13%-16% returns on retained securitization equity, 15%-16% returns on residential loans financed through non-mark-to-market facilities, and approximately 16%-17% potential returns on certain BB non-QM bonds.
- Historical Credit PerformanceAcross approximately $67 billion of securitizations issued over the life of the program, realized losses inside the trusts were around $6 million, or less than one basis point. Management said credit modeling had outperformed initial expectations.
- Housing Portfolio Credit ResilienceManagement said the residential credit portfolio had an average borrower equity level close to $400,000, a 64 mark-to-market LTV, D60-plus delinquencies of 160 basis points, and limited layered risk. The portfolio primarily targeted upper-middle-class borrowers.
- MSR Diversification and Hedging BenefitsManagement said MSR provides standalone returns as well as diversification against Agency MBS through convexity, prepayment-model, and short-rate hedging. Higher short rates increase escrow float income, while MSR has historically performed well when rates sell off and Agency MBS spreads come under pressure.
- Attractive Agency Spread ReturnsAgency spreads widened approximately 20 basis points during the quarter, while the company's preferred coupons were approximately 10 basis points wider relative to the prior quarter. Management said this equated to a more than 100 basis point increase in prospective returns, reaching approximately 15%-17%.
- Dividend Coverage and Capital Allocation ConfidenceManagement stated that the company outearned its dividend in Q3, expected to outearn it in Q4, and believed the current portfolio delivered the dividend. Residential credit was identified as the first priority for responsible growth, followed closely by Agency and then MSR.
NLY Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 10, 2027 | 2026 (Q4) | 0.79- | 0.74 | ― | ― |
| Oct 20, 2026 | 2026 (Q3) | 0.770.80 | 0.73 | 9.59% (+0.07) | |
| Jul 21, 2026 | 2026 (Q2) | 0.750.79 | 0.73 | 8.22% (+0.06) | |
| Apr 21, 2026 | 2026 (Q1) | 0.740.76 | 0.72 | 5.56% (+0.04) | |
| Jan 28, 2026 | 2025 (Q4) | 0.730.74 | 0.72 | 2.78% (+0.02) | |
| Oct 22, 2025 | 2025 (Q3) | 0.720.73 | 0.66 | 10.61% (+0.07) | |
| Jul 23, 2025 | 2025 (Q2) | 0.710.73 | 0.68 | 7.35% (+0.05) | |
| Apr 30, 2025 | 2025 (Q1) | 0.700.72 | 0.64 | 12.50% (+0.08) | |
| Jan 29, 2025 | 2024 (Q4) | 0.670.72 | 0.68 | 5.88% (+0.04) | |
| Oct 23, 2024 | 2024 (Q3) | 0.670.66 | 0.66 | 0.00% (+0.00) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
