CEO Anzalone: Q4 Book Value Per Share Increases to $8.72
CEO John Anzalone said, "During Q4, financial conditions improved, underpinned by two interest rate cuts from the Federal Reserve, robust corporate earnings and strong economic growth. This supportive backdrop, along with lower interest rate volatility and broadening investor demand, drove notable outperformance in Agency RMBS relative to Treasuries across the coupon stack. Additionally, swap spreads continued their widening trend, providing an additional positive contribution to performance. These factors led to a 3.7% increase in book value per common share to $8.72 at quarter end, and when combined with our increased dividend of 36c, resulted in a positive economic return of 8.0% for the quarter. We modestly increased our debt-to-equity ratio to 7.0x as of quarter end, up from 6.7x as of September 30, 2025, reflecting the improved investment environment and enabling the company to further benefit from positive Agency RMBS performance...Given the meaningful decline in interest rate volatility, we remain constructive on Agency RMBS, though we view near-term risks as balanced following the sector's strong performance, reinforced by the recent announcements that Fannie Mae and Freddie Mac will purchase $200B in Agency RMBS. In addition, Agency CMBS continues to offer attractive risk-adjusted yields and diversification benefits, given its stable cash flow profile and lower sensitivity to interest rate fluctuations. Longer term, the environment for Agency MBS investments is likely to remain favorable given reduced interest rate volatility and expectations for broadening investor demand and a steeper yield curve."
