Annaly Capital Management (NLY) Q4 2025 earnings summary

Executive summary

• Achieved an economic return of 20.2% for 2025 and 8.6% for Q4, with a total shareholder return of 40% for the year.

• Portfolio grew nearly 30% year-over-year to $104.7 billion, driven by capital deployment across Agency MBS, Residential Credit, and MSR strategies.

• Book value per share increased to $20.21 as of December 31, 2025.

• Maintained a conservative leverage profile, with economic leverage decreasing to 5.6x.

• All business segments—Agency, Residential Credit, and MSR—contributed solid returns and double-digit growth.

Financial highlights

• Q4 2025 GAAP net income per share was $1.40; full year was $2.92.

• Earnings Available for Distribution (EAD) per share was $0.74 for Q4, exceeding the $0.70 dividend.

• Net interest margin (excluding PAA) was 1.69% in Q4 and 1.7% for the year.

• Dividend yield stood at 12.5% for Q4, with a declared dividend of $0.70 per share.

• Average GAAP cost of interest-bearing liabilities was 4.49% for Q4, down 24 bps sequentially.

Outlook and guidance

• Management expects continued strong results in 2026, supported by favorable market conditions and robust origination channels.

• Agency MBS expected to deliver low to mid-teen prospective returns due to lower volatility and hedging costs.

• Non-agency market anticipated to grow, with Onslow Bay positioned for robust loan acquisitions and securitizations.

• MSR portfolio expected to expand, leveraging strong sub-servicing and recapture relationships.

• Capital allocation likely to favor increased exposure to residential credit and MSR, targeting a long-term mix of 50% agency, 30% RESI, 20% MSR.