Ellington Financial Stock Earnings Reports

Ellington Financial reported a strong Q1 2026: GAAP net income of $0.78 per share, ADE of $0.55 per share, and an annualized economic return of 26%. Management raised ADE guidance to roughly $0.45 per quarter (well above the $0.39 dividend run rate). Longbridge (reverse mortgage origination and servicing) was a standout, delivering near‑record origination volumes, strong gain‑on‑sale margins, lowest‑ever PropReverse funding costs, a one‑time $17 million litigation settlement, and a disproportionately large contribution to ADE and net income. Securitization activity accelerated—seven EFMT transactions totaling $2.8 billion (average non‑QM securitization size ~$508 million), supporting scale benefits, improved margins, and a shift toward match‑funded, non‑mark‑to‑market financing. The credit portfolio performed well: portfolio grew ≈4% (net of securitizations), 90‑day delinquencies declined for a second quarter, realized losses remain minimal, and several short‑duration portfolios delivered significant paydowns. Balance sheet moves included a $117 million common equity raise used to redeem high‑cost Series A preferred stock (reducing funding cost), stable leverage (recourse debt/equity 1.9x; total debt/equity 9x), increased unencumbered assets (~$1.9B), and ongoing plans to opportunistically issue more unsecured notes. Management is advancing an acquisition of a residential mortgage servicer (regulatory approval pending). Key risks noted: market volatility and credit spread widening can materially affect book value (they saw a ~$(0.13) per share estimated impact from remarking liabilities in April), and persistent macro pressures (energy prices, consumer income stress, housing price dynamics) are being monitored closely.