Annaly二季度EAD覆盖股息并将季度普通股股息提高至0.75美元

Earnings Call Insights: Annaly Capital Management (NLY) Q2 2026
Management View
- "Lower rate volatility provided a tailwind for our portfolio this past quarter, and we delivered a 5.5% economic return" (CEO, Co-Chief Investment Officer & Director David Finkelstein). "We generated $0.79 of earnings available for distribution, marking the ninth consecutive quarter that our EAD has exceeded the dividend" and "our recent increase in our quarterly common dividend to $0.75 per share" was informed by that durability (CEO Finkelstein).
- "We continue to operate with conservative economic leverage of 5.6 turns, and we raised roughly $450 million in equity through our ATM program during the quarter" (CEO Finkelstein). On capital allocation, he said, "we grew our Agency portfolio by roughly $3 billion, ending the quarter at $95 billion in market value," lifting Agency to "57%" of capital (CEO Finkelstein).
- "As of June 30, 2026, our book value per share increased by 1.7% from the prior quarter to $20.15" (Chief Financial Officer Serena Wolfe). "Net interest margin increased 5 basis points to 1.76%" and "net interest spread improved 8 basis points to 1.5%" (CFO Wolfe).
- "Annaly purchased $7.1 billion of loans in Q2, which is a new quarterly record for the business" (CEO Finkelstein). He also said, "we closed 13 deals for $6.8 billion in principal balance in the second quarter, creating approximately $780 million of proprietary investments" (CEO Finkelstein).
Outlook
- "We continue to see compelling opportunities across our 3 strategies" (CEO Finkelstein). He said, "Agency spreads remain at attractive levels with mid-teens levered returns and very favorable technicals, and we'll look to further deploy new capital in the sector balanced against relative value opportunities in our other businesses" (CEO Finkelstein).
- On dividend sustainability, management said, "we want to make sure that it is earnable" and "we feel like it's earnable over the foreseeable future" (CEO Finkelstein). He added, "we're on track to modestly outearn the dividend this quarter, all else equal" (CEO Finkelstein).
- Compared with last quarter’s more “balanced view” language, management now emphasized that "Residential Credit, we believe, exhibits the best risk-adjusted returns" while "the marginal dollar will probably go into agency with Resi Credit as we can add" (CEO Finkelstein).
Financial Results
- "As of June 30, 2026, our book value per share increased by 1.7% from the prior quarter to $20.15" and "including our $0.75 quarterly dividend, we generated a positive economic return of 5.5%" (CFO Wolfe).
- "Earnings available for distribution per share increased by $0.03 to $0.79 per share" (CFO Wolfe). She attributed the change primarily to "higher average yields on our Agency portfolio" as "our weighted average coupon increased 11 basis points to 5.11%," plus "higher securitization volumes" and "average repo rate declining 6 basis points to 3.84%" (CFO Wolfe).
- Liquidity and funding capacity increased as "total warehouse capacity increased to $8.3 billion" and Annaly ended with "$8 billion in unencumbered assets" (CFO Wolfe). She also said, "our OpEx-to-equity ratio increased 11 basis points to 1.4%" and that elevated expenses "we expect to moderate in future periods" (CFO Wolfe).
Q&A
- Bose George, KBW: "Could we get an update?" on mark-to-market book value; CEO Finkelstein: "as of Friday, book value was off a little over 1%."
- Bose George, KBW: asked about dividend coverage and required ROE; CEO Finkelstein: "we want to make sure that it is earnable" and "we feel very good about dividend coverage on a go-forward basis."
- Crispin Love, Piper Sandler: asked where to add incremental capital across strategies; CEO Finkelstein: "Residential Credit, we believe, exhibits the best risk-adjusted returns" but "the marginal dollar will probably go into agency with Resi Credit as we can add."
- Crispin Love, Piper Sandler: asked about FHFA/GSE actions; CEO Finkelstein: "we can't say whether there'll be more action" but "they are acting much like a relative value market participant."
- Ameeta Lobo Nelson, UBS: asked if current coupon spreads reflect Fed-transition uncertainty; management response: "market pricing is really not looking at the uncertainty from the Fed" (Unknown Executive). Ameeta Lobo Nelson, UBS: asked where operating leverage remains; CEO Finkelstein: "we are an operating-light company" and "we feel like we can scale these businesses with the current operating leverage."
- Douglas Harter, BTIG: asked about sourcing advantages in Resi Credit; Co-Chief Investment Officer & Head of Residential Credit Michael Fania: "we face at this point now over 350 correspondents" and "we'll be diligent" as lock volume "decreased quarter-over-quarter" to "$6.7 billion."
- Harsh Hemnani, Green Street: asked about balancing higher coupons vs prepayment outlook; management response: "our main strategy to decrease prepayment risk is to buy pools with call protection" (Unknown Executive), while CEO Finkelstein added, "we're taking virtually no prepayment risk in the MSR portfolio."
- Jason Stewart, Compass Point: asked about opportunistic MSR opportunities; Head of Mortgage Servicing Rights & Portfolio Analytics Ken Adler: "we're generally the favorite buyer" given subservicer model and "we're utilizing very granular pricing."
- Hong Zhang, JPMorgan: asked about tapping equity markets at current price; CEO Finkelstein: "the 3 criteria" are "price to book, assets need to be attractive" and "we need to be able to feed the businesses."
- Trevor Cranston, Citizens JMP: asked which collateral types are most attractive ahead; Michael Fania: "70% is non-QM and DSCR" and "non-QM and DSCR really will remain the core competency of the company."
- Kenneth Lee, RBC: asked about earnings resiliency amid geopolitical uncertainty and a flat curve; CEO Finkelstein: "we do stress the environment to make sure that the dividend is earnable" and "we expect to earn the dividend." Kenneth Lee, RBC: asked about higher-loan-balance MSR rotation; Ken Adler: "our selling low loan balance and buying high loan balance is a total pickup in economics and yield for us."
Sentiment Analysis
- Analysts tone was neutral to slightly skeptical, with repeated checks on near-term marks, dividend coverage, and funding/capital access, including "Could we get an update?" (Bose George, KBW) and "how do you guys think about your ability to tap the equity markets" (Hong Zhang, JPMorgan).
- Management tone was slightly positive in prepared remarks and more assertive in Q&A, highlighting confidence phrases such as "we feel like it's earnable" and "we feel very good about dividend coverage" (CEO Finkelstein), alongside operational detail on sourcing and execution from Mike Fania and Ken Adler.
- Versus Q1, management’s tone shifted from navigating volatility (Q1: "the war in the Middle East ruptured the calm") to emphasizing a "constructive fixed income investment environment" and dividend durability (CFO Wolfe; CEO Finkelstein), while analysts continued to focus on book value updates (Q1: "we were up 4%"; Q2: "off a little over 1%").
Quarter-over-Quarter Comparison
- Dividend policy shifted as Q2 referenced "our recent increase in our quarterly common dividend to $0.75 per share" (CEO Finkelstein) versus Q1’s "$0.70 dividend" (CFO Wolfe).
- Portfolio and capital allocation emphasis moved: Q1 described raising "$510 million" and deploying "the majority" into Residential Credit and MSR after January Agency tightening (CEO Finkelstein), while Q2 highlighted growing Agency by "roughly $3 billion" to "$95 billion" and said the marginal dollar "will probably go into agency" (CEO Finkelstein).
- Residential Credit production scaled from Q1 "$6.7 billion" acquired and "8 securitizations for $4.7 billion" (CEO Finkelstein) to Q2 "purchased $7.1 billion of loans" and "closed 13 deals for $6.8 billion" (CEO Finkelstein).
Risks and Concerns
- Management flagged macro risks from "persistent elevated inflation" and "the energy price shock from the conflict in the Middle East" (CEO Finkelstein), adding that "interest rates continue to rise" and markets now suggest the Fed "to hike at least once in 2026" (CEO Finkelstein).
- Operating cost pressure was noted as "OpEx-to-equity ratio increased 11 basis points to 1.4%" with elevated expenses that "we expect to moderate" (CFO Wolfe).
- In Residential Credit, management acknowledged competition and said, "there's a lot of new entrants and the market is competitive" and emphasized return discipline: "we're looking to earn mid-teens ROEs" (Michael Fania).
Final Takeaway
Annaly’s management framed Q2 as a quarter where lower volatility and tighter spreads supported "a 5.5% economic return" and "$0.79" of EAD while lifting the common dividend to "$0.75" (CEO Finkelstein). The call emphasized scaling and capital allocation across Agency, Residential Credit, and MSR—highlighting Agency growth to "$95 billion" market value, a Residential Credit purchase record of "$7.1 billion" loans, and an MSR rotation strategy aimed at improving economics through higher loan balances—while reiterating conservative leverage and liquidity positioning (CEO Finkelstein; CFO Wolfe).
Read the full Earnings Call Transcript