Annaly Q4 Earnings Surpass Estimates, Book Value Improves Y/Y

Annaly Capital Management, Inc. NLY reported fourth-quarter 2025 earnings available for distribution (EAD) per average share of 74 cents, which beat the Zacks Consensus Estimate of 72 cents. The figure increased from 72 cents in the year-ago quarter.

NLY’s average yield on interest-earning assets improved in the reported quarter. Notably, the year-over-year increase in book value per share (BVPS) was also encouraging.

For 2025, EAD per share was $2.92, which beat the Zacks Consensus Estimate of $2.90. This compares favorably with $2.70 reported in the prior year.

Inside Annaly’s Headlines

Net interest income (NII) was $366.6 million in the reported quarter, which missed the Zacks Consensus Estimate by 21.8%. In the prior-year quarter, the company reported a NII of $187.3 million.

In 2025, NII was $1.13 billion, which missed the Zacks Consensus Estimate of $1.24 billion. It reported NII of $247.8 million in 2024.

At the fourth-quarter end, Annaly had $135.6 billion of total assets, rising 7.7% from the prior quarter.

In the reported quarter, the average yield on interest-earning assets (excluding premium amortization adjustment or PAA) was 5.44%, up from the prior-year quarter’s 5.26%. The average economic costs of interest-bearing liabilities were 3.95%, up from 3.79% in the year-ago quarter.

Net interest spread (excluding PAA) of 1.49% in the fourth quarter increased from 1.47% in the prior-year quarter. Also, the net interest margin (excluding PAA) was 1.69% compared with 1.71% in the fourth quarter of 2024.

Annaly’s BVPS was $20.21 as of Dec. 31, 2025, up from $19.15 in the prior-year quarter. At the end of the reported quarter, the company’s economic capital ratio was 14.9%, up from 14.8% in the prior-year quarter.

In the fourth quarter, the weighted average actual constant prepayment rate was 9.7%, up from 8.7% in the year-ago quarter.

Economic leverage was 5.6X as of Dec. 31, 2025, up from 5.5X in the year-ago quarter.

Annaly generated an annualized EAD return on average equity of 14.28% in the fourth quarter, which increased from the prior-year quarter’s 14.27%.

Our Take on NLY

Annaly’s fourth-quarter results benefited from higher average yields and growth in total assets. Its prudent asset selection will continue to drive performance in the upcoming period. While book value per share rose year over year, ongoing market uncertainty may continue to pose challenges to achieving consistent returns.

Annaly Capital Management Inc Price, Consensus and EPS Surprise

Annaly Capital Management Inc price-consensus-eps-surprise-chart | Annaly Capital Management Inc Quote

NLY currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Release Dates of Annaly’s Peers

Redwood Trust, Inc. RWT is expected to report fourth-quarter 2025 results on Feb. 11.

The Zacks Consensus Estimate for RWT’s quarterly earnings has been revised upward to 23 cents per share over the past seven days.

Starwood Property Trust, Inc. STWD is slated to post fourth-quarter 2025 results on Feb. 25.

The Zacks Consensus Estimate for STWD’s quarterly earnings has remained unchanged at 41 cents per share over the past seven days.

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This article originally published on Zacks Investment Research (zacks.com).

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