Ellington Financial (EFC) Q2 2026 earnings summary

Executive summary

• Net income attributable to common stockholders was $54.4 million ($0.43 per share) for Q2 2026, with adjusted distributable earnings (ADE) of $75.5 million ($0.60 per share), and annualized economic return of 13.6% for the quarter and 20% for the first half of 2026.

• Book value per common share increased to $13.61 after $0.39 per share in dividends, marking eight consecutive quarters of dividend coverage.

• The investment portfolio grew 1% sequentially to $4.50 billion, while Longbridge portfolio declined 7% to $649.3 million due to securitizations.

• Robust performance was driven by diversified loan origination, strong securitization execution, and outstanding results from Longbridge.

• Continued investment in research, technology, and risk management, with 20% of employees dedicated to research and technology.

Financial highlights

• Net interest income rose significantly quarter-over-quarter to $72.3 million, with a net interest margin of 3.36%.

• Total stockholders' equity stood at $1.97 billion, with common equity of $1.75 billion and preferred equity of $220.9 million.

• Total unencumbered assets were $1.86 billion, including $247.5 million in cash.

• Securitization activity robust, with $4 billion UPB securitized in the first half of 2026 and $1.87 billion UPB through seven transactions in Q2.

• Cumulative realized credit losses were only 17 basis points on $20.4 billion of residential mortgage fundings and 39 basis points on $2.5 billion of commercial mortgage bridge loans.

Outlook and guidance

• Management expects to sustain momentum and generate attractive risk-adjusted returns, supported by strong credit performance, stable funding, and a robust loan pipeline.

• Dynamic hedging and portfolio diversification are expected to continue reducing earnings volatility.

• Guidance for ADE remains in the high $0.40s per share, with potential upward pressure on the dividend if strong ADE persists.

• Capital resources and liquidity are expected to be sufficient for both short- and long-term needs.

• Longbridge submissions and originations are trending positively into Q3, with July marking record levels for proprietary reverse mortgage originations.