Ellington Financial Inc. released its third‑quarter 2025 financial results on November 5, 2025, reporting GAAP net income of $0.29 per share and adjusted distributable earnings (ADE) of $0.53 per share. The ADE beat consensus estimates of $0.44 by $0.09, while the GAAP EPS fell short of the $0.38 estimate by $0.09, reflecting a mix shift toward lower‑margin loan products and a modest increase in operating expenses.
Total revenue for the quarter reached $82.76 million, up 5.6% from $78.87 million in Q3 2024 and 1.2% from $81.90 million in Q2 2025. The growth was driven by a 12% sequential rise in portfolio holdings, largely from new securitizations and a 37% expansion in the Longbridge reverse‑mortgage segment, which contributed $8.6 million to net income.
Net interest margin expanded to 3.65% from 3.11% in the prior quarter, driven by higher asset yields and favorable interest‑rate swap hedges. The margin improvement offset a 0.4 percentage‑point decline in the loan‑to‑value ratio of the company’s mortgage portfolio, indicating disciplined risk management amid tightening credit conditions.
Ellington priced seven securitizations during the quarter, bringing the year‑to‑date total to 20. The activity reduced recourse leverage by 3.5 percentage points and lowered funding costs, supporting the company’s strategy to shift from short‑term repo financing to long‑term unsecured debt. On November 6, the company closed a $400 million, five‑year senior unsecured note offering at a 7.375% coupon, further strengthening its balance sheet and providing dry powder for future growth.
Management emphasized that the combination of robust securitization activity, a strong Longbridge segment, and the new unsecured debt positions Ellington to maintain dividend coverage and pursue additional portfolio expansion. CEO Laurence Penn noted, “Our shift toward long‑term unsecured financing and securitization financing is a fundamental evolution of our capital structure that fortifies our balance sheet, enhances risk management, and supports earnings stability.”
The company did not provide new forward guidance for the remainder of 2025, but the results suggest confidence in sustaining dividend coverage and a steady pace of securitizations. Analysts noted that the ADE beat and margin expansion signal effective cost control and a favorable mix of high‑yield assets, while the GAAP EPS miss highlights the impact of lower‑margin loan growth and higher operating costs.
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