Annaly Capital Management Reports Improved Financial Performance for Q2 2025

Annaly Capital Management, Inc. reported significant financial performance improvements in its latest 10-Q filing for the quarter ending June 30, 2025. The company achieved a net income of $60.4 million, or $0.03 per share, compared to a net loss of $8.8 million, or $(0.09) per share, in the same quarter of the previous year. For the first half of 2025, net income totaled $190.7 million, down from $456.3 million in the first half of 2024. The decline in year-over-year profitability was attributed primarily to unfavorable changes in net gains on derivatives, despite increases in net interest income and servicing income.

Total revenue for the second quarter reached $1.42 billion, a 20.5% increase from $1.18 billion in the same quarter of 2024. Interest income rose to $1.42 billion, up from $1.18 billion, while interest expense also increased slightly to $1.15 billion from $1.12 billion. The net interest income for the quarter was $273.2 million, a substantial increase from $53.6 million in the prior year. The company’s total assets grew to $112.1 billion, up from $103.6 billion at the end of 2024, driven by increases in securities and cash reserves.

Strategically, Annaly has focused on expanding its Agency mortgage-backed securities (MBS) portfolio, which increased by nearly $5 billion during the quarter. The company maintained a conservative approach to leverage, with an economic leverage ratio of 5.8:1, consistent with its risk management framework. Annaly's capital allocation strategy has shifted slightly, with 62% of its investments now in Agency MBS, reflecting a response to market conditions and interest rate stabilization.

Operationally, Annaly's residential credit business remained stable, with a portfolio valued at $6.6 billion. The company also reported strong performance in its Onslow Bay platform, which closed $3.6 billion in securitizations during the quarter. The company’s mortgage servicing rights (MSR) portfolio saw minimal changes, with a fair value of $3.28 billion. Annaly's focus on maintaining a diversified investment strategy continues to be a priority, as it aims to enhance the stability of risk-adjusted returns for shareholders.

Looking ahead, Annaly anticipates continued challenges in the housing market, particularly regarding affordability due to elevated mortgage rates and home prices. However, the company remains optimistic about its positioning, citing a stable labor market and low consumer delinquencies as factors that could support its performance. The management emphasized its commitment to prudent capital management and risk mitigation strategies to navigate potential market volatility.