Ellington Residential Mortgage REIT(EARN) - 2025 Q4 - Annual Results

Financial Performance - Net asset value (NAV) per share was $5.19 as of December 31, 2025, reflecting distributions of $0.24 per share for the quarter [8]. - GAAP net loss was $(21.1) million, or $(0.56) per share, indicating a significant drop in NAV due to challenges in the CLO equity market [8]. - Net investment income (NII) was $7.8 million, or $0.21 per share, with adjusted net investment income also reported at $7.8 million [8]. - For the quarter ended December 31, 2025, net investment income is $7,751,000, down from $8,485,000 in the previous quarter [30]. - Adjusted net investment income for the same quarter is $7,802,000, with an adjusted net investment income per share of $0.21 [30]. - The company incurred non-recurring expenses of $49,000 related to strategic transformation costs in the quarter ended December 31, 2025 [30]. Investment Portfolio - The CLO portfolio had a fair value of $369.5 million, with CLO debt investments totaling $176.9 million and CLO equity investments at $192.6 million [8]. - The company received $19.1 million in recurring cash distributions from the investment portfolio, equating to $0.51 per share [8]. - The investment portfolio generated negative results due to unrealized losses in CLO equity investments, with cash and cash equivalents of $24.3 million as of December 31, 2025 [20]. - The company executed 47 trades, purchasing $65.8 million of CLO investments and selling $17.4 million during the quarter [8]. - Total assets as of December 31, 2025, amount to $414,963,000, with investments at fair value of $369,885,000 [21]. Market Conditions and Strategy - The company plans to selectively increase its CLO equity position as market opportunities arise, following recent headwinds in the CLO equity market [5]. - Credit hedges amounted to $(174.8) million as of December 31, 2025, compared to $(90.6) million as of September 30, 2025 [11]. - The weighted average GAAP yield for the CLO portfolio was 13.7% for the quarter [8]. - The fund primarily invests in corporate collateralized loan obligations (CLOs), focusing on mezzanine debt and equity tranches [22]. - Forward-looking statements are subject to risks such as changes in interest rates and market volatility, which could impact future performance [24]. Shareholder Information - The weighted average shares outstanding for the quarter ended December 31, 2025, is 37,570,694 [30]. - Net asset value is reported at $195,034,000, resulting in a net asset value per common share of $5.19 [21]. - The company will host a conference call on March 5, 2026, to discuss financial results for the quarter ended December 31, 2025 [23]. - The company emphasizes the importance of adjusted net investment income as a useful indicator of long-term financial performance [27].