Annaly Capital Management, Inc. (NYSE: NLY) has released its financial results for the third quarter of 2025, showcasing robust performance amidst a dynamic economic backdrop. The company reported notable increases in both earnings and investment, reflecting strategic execution across its diversified portfolio.

1. Financial Highlights

Annaly's third-quarter results reveal impressive numbers that underline the company's effective management and investment strategies:

GAAP Net Income: The company reported a GAAP net income of $1.21 per average common share, a substantial improvement from the previous quarter.

Earnings Available for Distribution (EAD): EAD stood at $0.73 per average common share, consistent with the previous quarter's performance.

Economic Return: Annaly achieved an economic return of 8.1% for the quarter, bringing the year-to-date economic return to an impressive 11.5%.

Book Value: The book value per common share increased to $19.25.

Leverage Metrics: GAAP leverage remained steady at 7.1x, while economic leverage decreased slightly to 5.7x.

Dividends: The company declared a cash dividend of $0.70 per share for the third quarter, reflecting strong earnings performance.

2. Business Highlights

Investment and Strategy

Annaly's investment strategy is showing signs of strength, particularly in its Agency and Residential Credit portfolios:

Total Portfolio: The total portfolio reached $97.8 billion, with $87.3 billion in a highly liquid Agency portfolio. This Agency portfolio expanded by 10%, now accounting for 64% of dedicated capital.

Hedge Strategy: The company maintained a hedge ratio of 92%, with new hedges primarily focused on swaps, optimizing the portfolio's overall return.

Residential Credit Growth: The Residential Credit portfolio saw a 4% increase, totaling $6.9 billion, driven by record correspondent channel activity and a remarkable $4 billion in quarterly securitization issuance.

Mortgage Servicing Rights (MSR): Annaly also reported a 6% increase in its MSR portfolio, which is now valued at $3.5 billion, contributing to 19% of its dedicated capital.

Financing and Capital

Annaly's financing strategy has demonstrated resilience and growth potential:

Assets for Financing: The company reported $8.8 billion in total assets available for financing, including $5.9 billion in cash and unencumbered Agency MBS.

Securitizations: The Residential Credit Group executed eight securitizations totaling a record $3.9 billion during the quarter, reinforcing its position as a leading issuer in the market.

Cost of Liabilities: The average GAAP cost of interest-bearing liabilities declined to 4.73%, while the average economic cost slightly increased to 3.96%.

3. Corporate Responsibility & Governance

In tandem with its financial success, Annaly published its sixth Corporate Responsibility Report. This report highlights the company's commitment to supporting American homeownership and outlines broader corporate responsibility initiatives and achievements.

4. Outlook

David Finkelstein, Chief Executive Officer & Co-Chief Investment Officer, expressed optimism regarding Annaly's future performance. He noted, “We were pleased to generate an 8.1% economic return during the third quarter... We maintain our optimistic outlook as volatility continues to decline, and the Federal Reserve is positioned for additional rate cuts.” Finkelstein emphasized the company's commitment to prudently growing its portfolio while enhancing its investment and operational capabilities in housing finance.

Conclusion

Annaly Capital Management’s third-quarter results reflect a solid execution of its strategic initiatives, resulting in strong financial performance and a favorable outlook in the current economic climate. The company’s ability to adapt and thrive amidst changing market conditions positions it well for continued success in the future.

Original press release