Annaly’s NII Soars to $1.14B as Mortgage Rates Drop to 6.09%
Mortgage rates fell to 6.09% on Feb. 12 from 6.87% a year earlier, boosting Annaly’s net interest income to $1.14 billion in 2025 from $247.8 million. Its $104.7 billion portfolio (89% Agency MBS) and forward P/TB of 1.12X versus the 1.05X industry average reflect valuation strength.
1. Mortgage Rates and Earnings
Mortgage rates dropped to 6.09% on Feb. 12 from 6.87% a year earlier, lowering Annaly’s funding costs. This decline helped net interest income surge to $1.14 billion in 2025, up from $247.8 million in the prior year.
2. Portfolio and Liquidity Position
As of Dec. 31, 2025, Annaly’s $104.7 billion portfolio comprised $92.9 billion of highly liquid Agency Mortgage-Backed Securities, with the remainder in residential credit and mortgage servicing rights. A $9.4 billion liquidity buffer, including $6.1 billion in cash and unencumbered MBS, supports deployment flexibility.
3. Valuation and Capital Returns
The stock trades at a forward 12-month price-to-tangible book multiple of 1.12X, above the 1.05X industry average, reflecting valuation strength. A 12.14% dividend yield and a $1.5 billion share buyback authorization through 2029 underpin capital return prospects.