Ellington Financial Reports $54.4M Profit on Longbridge Growth

Ellington Financial Inc. reported a net income of $54.4 million attributable to common stockholders for the second quarter of 2026, a performance significantly boosted by robust loan credit and expanding reverse mortgage production from its Longbridge Financial subsidiary. The Connecticut-based real estate investment trust also announced adjusted distributable earnings (ADE) of $75.5 million, equating to 60 cents per share, which surpassed its quarterly dividend of 39 cents per share. As of June 30, 2026, the company's book value per common share saw an increase to $13.61, accounting for dividends distributed during the quarter. The company's financial report detailed substantial contributions from its two primary segments: the investment portfolio segment generated $74.2 million in net income attributable to common stockholders, while the Longbridge reverse mortgage segment contributed $30.2 million. In terms of adjusted distributable earnings, the investment portfolio segment yielded $75.7 million, and Longbridge added $28.9 million. Laurence Penn, Ellington's CEO and president, highlighted the company's strong performance, stating in a company release, "Ellington Financial delivered another standout quarter, with continued book value growth and adjusted distributable earnings well in excess of our dividends, reflecting the strength and increasing momentum of our platform." The growth in reverse mortgages at Longbridge was a key driver for the quarter. Longbridge reported a net income of $30.2 million attributable to common stockholders for the second quarter of 2026. Crucially, Longbridge originated $589.7 million in reverse mortgages between April and June 2026, marking a significant 38% increase compared to the same period in 2025. During the quarter, the company successfully completed two proprietary reverse mortgage securitizations. Despite the increased origination volumes, the Longbridge portfolio experienced a 7% sequential decline, settling at $649.3 million as of June 30, 2026. This reduction in portfolio size is attributed to the securitized loans being removed from the balance sheet. Ellington attributed Longbridge's strong performance to several factors, including significant gains from originations, which were supported by net gains linked to proprietary reverse securitizations and consistently robust profit margins. Additionally, positive servicing income was driven by successful "strong tail securitization executions" and stable base servicing results. Longbridge also recorded a notable increase in its servicing portfolio, which grew by 14% to $11.1 billion in unpaid principal balance as of June 30, 2026, compared to $9.7 billion at the end of the first quarter of 2026. This expansion in the servicing portfolio is a testament to the growing volume of loans managed by Longbridge. The company's strategic focus on reverse mortgages, particularly through its Longbridge subsidiary, appears to be a successful avenue for growth and profitability, contributing substantially to Ellington Financial's overall financial health and exceeding shareholder expectations for the second quarter of 2026.