Shares
of

Ellington
Financial
Inc.
were
pressured
after
the
mortgage
real
estate
investment
trust
reported
a
drop
in
quarterly
earnings,
although
its
reverse
mortgage
subsidiary, Longbridge
Financial,
turned
in
another
strong
performance.

Ellington
reported
lower
fourth-quarter
2025
earnings,
even
as
its
adjusted
results
topped
its
dividend
payout.
Meanwhile,
Longbridge
generated
net
income
of
$16.4
million
in
the
quarter
ending
Dec.
31,
nearly
doubling
its
profit
of
$8.6
million
in
the

third
quarter.

Ellington’s
filing
with
the

Securities
and
Exchange
Commission
(SEC)
shows
that
Longbridge
had
a
“positive
contribution
from
originations,
supported
by
sequentially
higher
overall
origination
volumes,
continued
strong
origination
margins
and
net
gains
related
to
the

proprietary
reverse
mortgage
loan
securitizations
completed
during
the
quarter.”

Longbridge’s
results
also
benefited
from
servicing
income
and
a
net
gain
on
its
mortgage
servicing
rights
(MSR)
equivalent
through
the
HECM
Mortgage-Backed
Securities
(HMBS)
channel,
reflecting
improved
profitability
from
tail
securitizations.

New
loan
origination
volume
rose
to
$529.7
million
in
the
fourth
quarter,
up
from
$498.6
million
in
the
third
quarter.
Total
originations
increased
during
the
period
from
2,224
to
2,492
loans,
with

wholesale
and

correspondent
channels
accounting
for
about
72%
of
volume
and
retail
making
up
the
remaining
28%.

The
Longbridge
portfolio,
excluding
nonretained
securitization
tranches,
declined
18%
from
the
prior
quarter
to
$617.2
million,
as
two
securitizations
reduced
its
balance-sheet
assets
despite
continued
growth
in
proprietary
reverse
mortgage
originations.

Proprietary
reverse
mortgages
totaled
$1.69
billion
at
the
end
of
Q4
2025,
up
from
$1.39
billion
three
months
earlier.
Unsecuritized
Home
Equity
Conversion
Mortgages
(HECMs)
also
increased
sequentially.

Overall,
the
Longbridge
segment
was
a
key
contributor
to
Ellington’s
fourth-quarter
performance.
Its
$14.6
million
in
adjusted
distributable
earnings
underscored
the
growing
role
of
reverse
mortgage
originations
and
servicing
in
the
company’s

earnings
mix.

Ellington’s
performance

Ellington’s
net
interest
income
rose
to
$53.6
million
in
Q4
2025,
up
from
$49.7
million
in
Q3
2025.
Other
income
totaled
$24.6
million,
down
from
$33
million
in
the
prior
period.
Quarterly
expenses
increased
from
$57
million
to
$72.5
million,
driven
in
part
by

debt
issuance
costs
tied
to
a
$400
million
unsecured
notes
offering
completed
in
October.

“On
October
6th,
we
closed
a
$400
million
unsecured
notes
offering
—
our
largest
such
offering
to
date,”
Laurence
Penn,
CEO
and
president
of
Ellington
Financial,
said
in
a
statement.
“During
the
quarter,
we
continued
to
fortify
our
balance
sheet
by
utilizing
a
portion
of
the
proceeds
from
that
offering
to
replace
short-term
repo
financing,
while
maintaining
a
robust
and
consistent
pace
of
securitization
activity.
This
activity
was
highlighted
by
the
completion
of
our
inaugural
securitization
of
residential
transition
loans
and,
subsequent
to
year-end,
our
first
securitization
of
Agency-eligible
loans.

“As
a
result
of
these
actions,
our
balance
sheet
metrics
strengthened
meaningfully,”
he
added.
“The
proportion
of
total
recourse
borrowings
represented
by
long-term,
non-mark-to-market
borrowings
almost
doubled
quarter
over
quarter,
while
unencumbered
assets
expanded
by
more
than
$500
million,
collectively
demonstrating
the
enhanced
strength
and
flexibility
of
our
balance
sheet.”

Penn
noted
that
the
Connecticut-based
company
also
used
the
notes
offering
to
actively
deploy
capital
into
new
investments,
expanding
its
portfolio
by
9%
even
after
accounting
for
securitizations.

“Our
portfolio
continues
to
benefit
from
strong
origination
and
acquisition
activity
across

non-QM
loans,
Agency-eligible
loans,
closed-end
second
lien
loans,
proprietary
reverse
mortgage
loans,
and
commercial
mortgage
bridge
loans.
By
year
end,
we
had
largely
deployed
the
proceeds
from
the
notes
offering,”
he
said.