Annaly Delivers 8.6% Q4 Economic Return, $1.40 EPS and $104.7B Portfolio
Annaly reported GAAP net income of $1.40 per share and EAD of $0.74 in Q4 2025, delivering an 8.6% economic return and book value of $20.21. For full-year 2025, the firm achieved a 20.2% economic return, expanded its portfolio to $104.7 billion, and paid a $0.70 quarterly dividend.
1. Strong Q4 Earnings Performance
Annaly Capital Management reported GAAP net income of $1.40 per average common share for Q4 2025, up from $0.78 in the year-ago quarter. Earnings available for distribution (EAD) were $0.74 per share, exceeding both the prior quarter’s $0.73 and last year’s $0.72. Economic return for the quarter reached 8.6%, while net interest margin improved to 1.18% on a GAAP basis and 1.69% on an economic basis, driven by a higher average yield on interest-earning assets of 5.42% and a lower economic cost of interest-bearing liabilities of 3.95%.
2. Portfolio Growth and Composition
Total portfolio size expanded to $104.7 billion, with the highly liquid Agency portfolio growing 6% sequentially to $92.9 billion, representing 62% of dedicated capital. Residential Credit assets rose 16% to $8.0 billion, fueled by record correspondent channel activity, while the MSR portfolio climbed 8% to $3.8 billion in market value, accounting for 19% of dedicated capital. Unencumbered assets and cash stood at $6.1 billion, supporting liquidity and funding flexibility.
3. Leverage, Funding and Capital Deployment
GAAP leverage edged up to 7.2x from 7.1x in Q3, while economic leverage declined slightly to 5.6x. The weighted average cost of liabilities fell by 24 basis points to 4.49%. Repurchase agreement maturities shortened to an average of 35 days. During Q4, Annaly raised accretive capital primarily through its at-the-market equity program and a preferred stock issuance, deploying proceeds into 5.0% coupon TBA, higher-coupon specified pools and Agency CMBS to capture favorable carry and spread tightening.
4. Full-Year 2025 Highlights and Outlook
For the full year, Annaly delivered GAAP net income of $2.92 per share and EAD of $2.92, achieving a 20.2% economic return and 40% total shareholder return. The Agency portfolio expanded by $22 billion, a 32% increase, while Residential Credit lock volume reached $23.1 billion with $16.5 billion in fundings. The company closed a record $15.2 billion of securitizations and grew financing capacity by $1.8 billion across its credit and MSR businesses. Management expects continued spread improvement and strong production in 2026, positioning Annaly to sustain attractive risk-adjusted returns.