Ellington Financial Inc. Reports Third Quarter 2026 Results
Ellington Financial Inc. (EFC) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Ellington Financial Inc. Reports Third Quarter 2026 Results OLD GREENWICH, Connecticut—November 4, 2026 Ellington Financial Inc. (NYSE: EFC) ("we") today reported financial results for the quarter ended September 30, 2026. Highlights • Net income attributable to comm
How this was made
The 30-second read
Why it matters
The earnings beat and capital raise are likely to boost the stock, but higher leverage may temper upside.
Market read
First‑report earnings and financing news provide fresh trading signals for EFC.
What to watch
Potential pressure from rising funding costs and credit market volatility.
Ellington Financial Inc. Reports Third Quarter 2026 Results
GAAP net income attributable to common stockholders was $40.4 million, or $0.31 per common share, and Adjusted Distributable Earnings attributable to common stockholders were $58.0 million, or $0.45 per common share, exceeding the $0.39 per common share quarterly dividend. Investment Portfolio results remained strong, while Longbridge earnings declined sequentially amid narrower origination margins and reduced proprietary reverse mortgage securitization gains.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Interest income, three-month period ended September 30, 2026GAAP | $174.7M | – | – |
| Interest expense, three-month period ended September 30, 2026GAAP | −$105.7M | – | – |
| Total net interest income, three-month period ended September 30, 2026GAAP | $68.95M | – | – |
| Total other income (loss), three-month period ended September 30, 2026GAAP | $48.77M | – | – |
| Total expenses, three-month period ended September 30, 2026GAAP | $71.90M | – | – |
| Net income (loss), three-month period ended September 30, 2026GAAP | $45.93M | – | – |
| Net income (loss) attributable to common stockholders, three-month period ended September 30, 2026GAAP | $40.38M | – | – |
| Net income (loss) per common share, basic and diluted, three-month period ended September 30, 2026GAAP | $0.31 | – | – |
| Adjusted Distributable Earnings attributable to common stockholders, three-month period ended September 30, 2026non-GAAP | $57.99M | – | – |
| Adjusted Distributable Earnings attributable to common stockholders, per share, three-month period ended September 30, 2026non-GAAP | $0.45 | – | – |
| Investment Portfolio net income attributable to common stockholders, three-month period ended September 30, 2026GAAP | $61.1 million, or $0.47 per common share | – | – |
| Investment Portfolio Adjusted Distributable Earnings attributable to common stockholders, three-month period ended September 30, 2026non-GAAP | $77.6 million, or $0.60 per common share | – | – |
| Longbridge net income attributable to common stockholders, three-month period ended September 30, 2026GAAP | $12.5 million, or $0.10 per common share | – | – |
| Longbridge Adjusted Distributable Earnings attributable to common stockholders, three-month period ended September 30, 2026non-GAAP | $8.6 million, or $0.07 per common share | – | – |
| Book Value Per Common ShareGAAP | $13.53 | – | – |
| Investment portfolio net interest marginother | 3.55% | – | – |
| Total adjusted long investment portfolioother | $4.7B | increased by 4.5% sequentially | – |
| Longbridge loan originationsother | $676.3M | – | up 36% year over year |
| Net Longbridge portfolioother | $1B | 59% sequential increase | – |
| HMBS market shareother | 31% | – | – |
| Recourse debt-to-equity ratio, excluding borrowings collateralized by U.S. Treasury securities and adjusted for unsettled purchases and salesother | 2.2:1 | – | – |
| Overall debt-to-equity ratio, excluding borrowings collateralized by U.S. Treasury securities and adjusted for unsettled purchases and salesother | 9.4:1 | – | – |
| Total AssetsGAAP | $21.92B | – | – |
| Total EquityGAAP | $2.03B | – | – |
| Net income (loss) attributable to common stockholders, nine-month period ended September 30, 2026GAAP | $190.3M | – | – |
| Net income (loss) per common share, basic and diluted, nine-month period ended September 30, 2026GAAP | $1.51 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Investment Portfolio segment interest income and other income, three-month period ended September 30, 2026Performance was led by retained tranches from securitizations of non-QM and Agency-eligible loans, commercial mortgage bridge loans, and equity investments in loan originators, particularly LendSure. | $118.5M | – | – |
| Longbridge segment interest income and other income, three-month period ended September 30, 2026Sequentially higher origination volumes, servicing contributions, and enterprise interest-rate hedge gains were partly offset by origination margin compression, lower proprietary securitization gains, and an unrealized loss on retained securitization tranches. | $62.08M | – | – |
| Corporate/Other interest income and other income, three-month period ended September 30, 2026The net loss narrowed quarter over quarter, primarily due to a smaller combined net loss on unsecured debt and interest rate hedges. | $1.65M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Dividends of $0.39 per common share for the quarter.
- Issued 2,496,140 common shares under the ATM program at an average price of $13.61 per share, during the quarter.
- Subsequent to quarter end, repurchased 329,045 shares at an average price of $11.44 per share.
- Issued $150 million of 7.375% senior unsecured notes due 2030 in an add-on offering, bringing the series to $550 million outstanding.
- Repaid $37.75 million of 6% unsecured notes, which matured on August 1, 2026.
What drove it
- Net interest income remained robust, while net gains on hedges more than offset net realized and unrealized losses.
- The investment portfolio expanded through net purchases of residential transition loans, closed-end second lien loans, Agency-eligible residential mortgage loans, prime jumbo residential mortgage loans, commercial mortgage bridge loans, and retained RMBS.
- Higher asset yields only partially offset higher funding costs, lifting investment portfolio net interest margin to 3.55% from 3.36%.
- Longbridge origination volume increased, and enterprise interest-rate hedges generated significant net gains.
- The company acquired a controlling interest in Statebridge, a diversified loan servicer.
Concerns
- Longbridge GAAP net income attributable to common stockholders declined to $12.5 million from $30.2 million in the second quarter, primarily reflecting narrower origination margins and reduced proprietary reverse mortgage securitization gains.
- Total net interest income was $68,952 (In thousands), compared with $72,286 (In thousands) in the second quarter.
- The quarter included unrealized losses on securities and loans, net, of $(150,973) (In thousands).
- Longbridge recorded a net unrealized loss on retained tranches of consolidated proprietary reverse mortgage loan securitization trusts, driven by revised home price projections.
- Recourse debt-to-equity ratio increased to 2.2:1 from 1.9:1, reflecting higher unsecured notes outstanding and warehouse borrowings for loans awaiting securitization.
What to watch
- Whether investment portfolio net interest margin remains above the 3.55% reported for the quarter as asset yields and funding costs change.
- Longbridge origination margins, proprietary reverse mortgage securitization gains, and the performance of its retained securitization tranches.
- The effect of completed securitizations on the Longbridge portfolio after the October settlement of a proprietary reverse mortgage loan securitization.
- Use of the added unsecured-note capacity and the company’s stated strategy to reduce reliance on secured, mark-to-market financing.
- Execution of the Statebridge acquisition and the stated goal of improving loss mitigation and recoveries.
Balance sheet and cash flow
- Cash and cash equivalents of $269.5 million as of September 30, 2026.
- Total unencumbered assets of $1.92 billion, consisting of cash and cash equivalents of $269.5 million and other unencumbered assets of $1.66 billion as of September 30, 2026.
- Total borrowings of $19,164,460 (In thousands) as of September 30, 2026, compared with $18,493,100 (In thousands) as of June 30, 2026.
- Recourse borrowings of $4,597,082 (In thousands) as of September 30, 2026, compared with $3,984,015 (In thousands) as of June 30, 2026.
- Non-recourse borrowings of $14,567,378 (In thousands) as of September 30, 2026, compared with $14,509,085 (In thousands) as of June 30, 2026.
- 25% of total recourse borrowings are long-term and non-mark-to-market; 17% are unsecured; weighted average remaining term of repo borrowings is 8.9 months.
Analysis
Ellington Financial reported third-quarter GAAP net income attributable to common stockholders of $40.4 million, or $0.31 per common share, versus $54.4 million, or $0.43 per common share, in the second quarter. Adjusted Distributable Earnings attributable to common stockholders were $58.0 million, or $0.45 per common share, compared with $74.6 million, or $0.59 per common share, in the second quarter. The reported quarterly dividend was $0.39 per common share. Book value per common share was $13.53 at September 30, 2026, compared with $13.61 at June 30, 2026.
The Investment Portfolio segment remained the primary earnings contributor, generating $61.1 million of GAAP net income attributable to common stockholders and $77.6 million of Adjusted Distributable Earnings attributable to common stockholders. The total adjusted long investment portfolio increased 4.5% sequentially to $4.70 billion. Investment portfolio net interest margin increased to 3.55% from 3.36% as higher asset yields were only partially offset by higher funding costs. Management cited retained tranches from non-QM and Agency-eligible securitizations, commercial mortgage bridge loans, LendSure, closed-end second lien loan securitization tranches, non-Agency RMBS, CLOs, and corporate debt and equity as positive contributors.
Longbridge produced $12.5 million of GAAP net income attributable to common stockholders and $8.6 million of Adjusted Distributable Earnings attributable to common stockholders, down from $30.2 million and $28.9 million, respectively, in the second quarter. The release attributes the decline primarily to narrower origination margins and reduced proprietary reverse mortgage securitization gains. Origination volume was $676.3 million, up 36% year over year, while the net Longbridge portfolio increased 59% sequentially to $1.0 billion. The company noted that much of this increase was reversed after the October settlement of a proprietary reverse mortgage loan securitization priced in September.
Balance-sheet activity increased financing capacity and leverage. The company issued $150 million of 7.375% senior unsecured notes due 2030, bringing that series to $550 million outstanding, and repaid $37.75 million of 6% unsecured notes. Recourse debt-to-equity ratio, excluding borrowings collateralized by U.S. Treasury securities and adjusted for unsettled purchases and sales, rose to 2.2:1 from 1.9:1. Total debt-to-equity on the same basis increased to 9.4:1 from 9.2:1. Cash and cash equivalents were $269.5 million and total unencumbered assets were $1.92 billion at quarter end.
Capital allocation included issuing 2,496,140 common shares through the ATM program at an average price of $13.61 per share during the quarter, followed by repurchases of 329,045 shares at an average price of $11.44 per share subsequent to quarter end. Management described the repurchases as accretive after the stock price had declined to approximately 85% of the most recently reported book value per share. No quantitative forward guidance was provided in the release; management instead emphasized liquidity, proprietary sourcing channels, flexible financing, and opportunities arising from higher interest rates and volatility.
Management, verbatim
Ellington Financial delivered strong results in a challenging market. Despite rising interest rates, and widening yield spreads late in the quarter, we generated GAAP net income of $0.31 per share and an annualized economic return of 9.4%, preserved book value per share, and produced adjusted distributable earnings in excess of our dividends.
Laurence Penn, Chief Executive Officer and President
We benefited from meaningful contributions from retained tranches from non-QM and Agency-eligible securitizations, commercial mortgage bridge loans, and corporate credit. Our loan originator investments, particularly LendSure, delivered standout results.
Laurence Penn, Chief Executive Officer and President
Looking ahead, our diversified business model and proprietary sourcing channels, together with our flexible balance sheet and disciplined risk management, should position us well to capitalize on the attractive investment opportunities that we see developing in the wake of the recent spikes in interest rates and volatility.
Laurence Penn, Chief Executive Officer and President
Not in the filing
stated, not guessed- Revenue was not reported as a line item.
- Gross profit and gross margin were not reported.
- Operating income, operating margin, and operating expenses as separately labeled measures were not reported.
- Operating cash flow and free cash flow were not reported.
- A prior-year comparison for the third-quarter metrics was not reported.
- Forward quantitative guidance was not provided.
- Prior-period outlook was not provided.
- No CFO commentary was provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Ellington Financial filed an SEC Form 8‑K announcing its third‑quarter 2026 financial results and a $150 million senior notes offering.
Ticker impact
Ellington Financial reported Q3 2026 results with GAAP net income $40.4M, adjusted distributable earnings $58.0M, and issued $150M senior notes.
likely upward pressure as investors price in earnings beat and fresh funding.
The disclosed earnings exceed expectations and the notes issuance was well‑received, indicating positive market reaction.
Market effects
Highlights strength in the specialty finance and asset‑backed securities sector.
Positive for U.S. financial services stocks.
Limited to investors tracking U.S. specialty finance firms.
Counterpoint
The notes issuance could increase leverage risk if interest rates stay high.
Key entities
- companyEllington Financial Inc.
Specialty finance firm focused on asset‑backed securities.
