Ellington Financial Inc. (NYSE: EFC) reported strong Q4 2025 results, highlighting portfolio expansion and liability improvements through aggressive securitizations and strategic moves.
Key Financial Results
The company posted adjusted distributable earnings (ADE) of $0.47 per common share, surpassing the quarterly dividend of $0.39 per share. Net income reached $14.7 million, or $0.14 per common share. Book value stood at $13.16 per common share as of December 31, 2025, factoring in the dividend payout.
Revenue climbed 31.4% year-over-year to $140.26 million, exceeding expectations. Economic return annualized at 4.6% for the quarter.
Portfolio Expansion
The adjusted long credit portfolio grew 15% to $4.11 billion from $3.56 billion. Executives noted acquisition of $2.40 billion in loans, including $1.52 billion in non-QM loans. Despite seven securitizations, the overall portfolio expanded 9% after deploying proceeds from recent financings.
Long Agency RMBS held steady at $218.4 million, while the Longbridge portfolio (excluding non-retained tranches) measured $617.2 million, down 18% amid high originations offset by securitizations.
Financing Achievements
Ellington Financial completed seven securitizations and issued $400 million in senior unsecured notes. Recourse debt-to-equity rose slightly to 1.9:1, with overall debt-to-equity at 9.0:1. Liquidity remained robust, with $201.9 million in cash and $1.57 billion in unencumbered assets.
A new servicer deal supports ongoing operations.
Strategic Outlook for 2026
CEO Laurence Penn stated, “Ellington Financial closed out 2025 on a high note, capping a year of consistently strong performance, portfolio growth and liability optimization.”
Executives emphasized plans to scale securitizations, boost loan origination market share, and optimize capital structure by raising common equity to retire high-cost preferred shares and increasing long-term, non-mark-to-market financings. “As we move into 2026, we remain focused on maintaining strong credit performance and disciplined portfolio growth, while increasing market share in loan originations and scaling our securitization platform,” management affirmed.
