- Early April tariffs, known as Liberation Day, caused significant market chaos, forcing deleveraging and concern over dollar sanctity and capital flight.
- The company was well-positioned with high cash and low leverage, limiting deleveraging to less than 10%.
- Bought back 1.1 million shares at a discount, maintaining a defensive stance during market turmoil.
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- Ellington Financial (EFC) generated a GAAP net income of $0.45 per share in Q2, with an annualized return of nearly 14%.
- The company had a large credit hedge portfolio coming into the quarter, which helped stabilize book value during widening credit spreads amid tariff-related uncertainty.
- During the April sell-off, EFC's credit hedges not only stabilized book value but also enhanced liquidity by providing daily access to mark-to-market gains, enabling the company to capitalize on attractively priced securities.
- Market dislocation in April led to a strategic pause in securitization issuance, which was resumed after spreads stabilized, resulting in six securitizations in Q2 at attractive levels.
- Overall portfolio size remained roughly unchanged, with securitizations, tactical sales, and principal repayments offset by opportunistic purchases and growth in non-QM, reverse, and commercial mortgage bridge loans.
- Consolidated pretax operating income increased to $267.5 million from $253.8 million in 2Q 2024.
- Net premiums earned in specialty insurance grew by 14.6%, and pretax operating income was $253.7 million, up from $202.5 million.
- Title insurance premiums and fees earned increased by 5.2%, but pretax operating income declined from $46 million to $24.2 million due to market conditions.
- Book value per share increased over 12.6% to $25.14, driven by strong operating earnings and higher investment valuations.
- Favorable prior year loss reserve development continued, benefiting the consolidated loss ratio by 2.1 percentage points.
- Net investment income increased 2.4% due to higher bond yields despite a lower invested asset base after a $500 million special dividend.
- Net operating income was $209 million for the quarter, up from $202 million last year, with earnings per share increasing 9% to $0.83 from $0.76.
- Old Republic International produced $267.5 million of consolidated pretax operating income in Q2 2025, up from $253.8 million in Q2 2024.
- Regular cash dividends of $71 million were paid, with minimal share repurchases during the quarter.
- Specialty Insurance net premiums earned grew 14.6% with pretax operating income of $253.7 million, up from $202.5 million last year, and a combined ratio improvement to 90.7 from 92.4.
- The consolidated combined ratio was 93.6 compared to 93.5 in the prior year quarter.
- Title Insurance premiums and fees earned grew 5.2% to $698 million, but pretax operating income declined to $24.2 million from $46 million, with the combined ratio rising to 99 from 95.4.
Dafinchi