Ellington Financial Reports $39.3 Million Net Income in Q1 2025, Driven by Increased Interest Income

Ellington Financial Inc. reported a net income of $39.3 million for the first quarter of 2025, an increase from $34.1 million in the same period of the previous year. The company attributed this growth to a rise in net interest income, which reached $43.3 million, up from $31.1 million year-over-year. Interest income rose to $115.9 million, compared to $101.5 million in the prior year, while interest expenses increased slightly to $72.7 million from $70.5 million. The increase in interest income was primarily driven by a larger average credit portfolio, despite a decrease in average asset yields.

Total assets for Ellington Financial as of March 31, 2025, stood at $16.6 billion, a modest increase from $16.3 billion at the end of 2024. The company's liabilities also rose to $15.0 billion from $14.7 billion, resulting in total stockholders' equity of $1.6 billion, up from $1.6 billion at the end of the previous year. The company’s debt-to-equity ratio remained stable at 8.9:1, indicating a consistent leverage level. The increase in equity was primarily due to net proceeds from the issuance of common stock amounting to $50.8 million, alongside contributions from non-controlling interests.

Strategically, Ellington Financial has continued to expand its operations, particularly through its Longbridge segment, which focuses on reverse mortgage loans. The company completed a merger with Arlington Asset Investment Corp. in December 2023, further consolidating its position in the reverse mortgage market. As of March 31, 2025, the Longbridge segment generated $20.9 million in interest income, significantly up from $8.2 million in the previous year, reflecting a larger portfolio of proprietary reverse mortgage loans.

Operationally, the company reported a total of 1,821 reverse mortgage loans originated during the first quarter, with a total origination volume of $338.5 million. This was a decrease from the previous quarter's origination volume of $419.9 million, attributed to lower overall market activity. The company also noted a slight increase in delinquency rates across its residential mortgage loan portfolio, although overall credit performance remained strong with low levels of realized credit losses.

Looking ahead, Ellington Financial remains focused on generating attractive risk-adjusted returns for its shareholders. The company plans to continue adjusting its investment strategies in response to changing market conditions, with an emphasis on maintaining its qualification as a real estate investment trust (REIT). The management expressed confidence in its ability to navigate the current economic landscape, leveraging its diversified portfolio and strategic partnerships to enhance performance.