$NLY · ANNALY CAPITAL MANAGEMENT INC
Annaly Capital Management filed its Q3 2026 10-Q, reporting a GAAP net loss available to common stockholders of $1.04 billion (-$1.36 per share) versus a $791 million profit in Q3 2025. The loss was driven by $4.72 billion in net losses on investments and other, partially offset by $3.07 billion in derivative gains. Net interest income nearly doubled to $544 million, and net servicing income rose 24% to $156 million. Total assets grew to $146.1 billion, while stockholders' equity declined to $15.8 billion from $16.1 billion at year-end.
- Q3 GAAP net loss available to common stockholders: $1.04B, or -$1.36 per share, vs. +$791M profit in Q3 2025
- Other income (loss) swung to -$1.63B from +$484M YoY, driven by $4.72B net losses on investments
- Net interest income nearly doubled YoY to $544M (from $276M) on higher interest income of $1.97B
- Net servicing income rose 24% YoY to $156M, with MSR assets growing to $4.2B
- Total assets expanded to $146.1B from $135.6B at year-end 2025; book value per common share declined
Extended-hours trading shows NLY essentially flat at $18.29 (+0.08% since filing), suggesting the large GAAP loss was largely anticipated given the rate-driven mark-to-market nature of Agency MBS portfolios.
The $1.04B loss at the largest Agency mREIT signals how even hedged portfolios suffer when rate-driven MBS markdowns outpace derivative gains — a warning for the entire mortgage REIT sector.
Annaly's results reflect the broader mREIT sector's vulnerability to rate-driven book value erosion. The near-doubling of net interest income shows improving carry, but the $1.04B comprehensive loss underscores that Agency MBS portfolios remain highly sensitive to interest rate moves even with hedging.
The $4.72B net loss on investments and other signals severe mark-to-market pressure on the Agency MBS portfolio amid rate volatility. Derivative gains of $3.07B partially offset but did not fully hedge the investment losses, highlighting basis risk. Accumulated deficit deepened to $14.8B.