OLD GREENWICH, Conn.–(BUSINESS WIRE)–Ellington Financial Inc. (NYSE: EFC) (“we,” “us,” or “our”) today reported financial results for the quarter ended December 31, 2023.
Highlights
-
Net income attributable to common stockholders of $12.5 million, or $0.18 per common share.1
-
$27.3 million, or $0.38 per common share, from the investment portfolio.
- $12.7 million, or $0.18 per common share, from the credit strategy.
- $14.6 million, or $0.20 per common share, from the Agency strategy.
- $(3.4) million, or $(0.04) per common share, from Longbridge.
-
$27.3 million, or $0.38 per common share, from the investment portfolio.
- Adjusted Distributable Earnings2 of $18.9 million, or $0.27 per common share.
- Book value per common share as of December 31, 2023 of $13.83, including the effects of dividends of $0.45 per common share for the quarter.
- Management expects to recommend to our board of directors a reduction of the monthly dividend from $0.15 to $0.13 per share, beginning in March, which would imply a dividend yield of 12.8% based on the February 23, 2024 closing stock price of $12.16 per share.
- Recourse debt-to-equity ratio3 of 2.0:1 as of December 31, 2023, adjusted for unsettled purchases and sales. Including all non-recourse borrowings, which primarily consist of securitization-related liabilities, debt-to-equity ratio of 8.6:14.
- Cash and cash equivalents of $228.9 million as of December 31, 2023, in addition to other unencumbered assets of $416.3 million.
- Closed the merger with Arlington Asset Investment Corp. (“Arlington”) on December 14, 2023, which was approximately 1.1% dilutive to book value per share.
Fourth Quarter 2023 Results
“In the fourth quarter, we reported net income of $0.18 per share and adjusted distributable earnings of $0.27 per share. From an economic return perspective, strong performance from our residential transition loan portfolio and our Agency and non-Agency MBS didn’t quite offset merger-related dilution and expenses, and net losses from Longbridge and other positions, leading to a small negative economic return overall for the quarter,” said Laurence Penn, Chief Executive Officer and President.
“In December, we completed the merger with Arlington, immediately adding scale and further strengthening our balance sheet. We promptly got to work freeing up capital in the Arlington portfolio, both monetizing Arlington’s liquid assets in a constructive market and adding modest leverage to the MSR portfolio. Since then, we have been rotating that capital into higher-yielding investments, which we expect to drive incremental value to shareholders in 2024. Despite incremental expansion of the portfolio in the fourth quarter, our recourse leverage ratio actually ticked down sequentially after absorbing Arlington’s low-leverage capital structure. In addition, in recent months we’ve been choosing to sell much of our non-QM loan portfolio instead of securitizing it, to take advantage of strong whole loan bids in the marketplace.
“Our adjusted distributable earnings did drop during the quarter, but it should recover as Longbridge continues to build back towards profitability, as we work out a few nonperforming commercial mortgage loans and REO assets, and as we continue to deploy new capital and rotate capital into higher-yielding sectors. That said, management expects to recommend to the board a reduction of the monthly dividend from $0.15 to $0.13 per share, beginning in March. Notably, this is just $0.01 below the $0.14 per share monthly dividend level we set five years ago, when we first shifted from a quarterly to a monthly dividend.
“Looking ahead, our diversified capital base now includes the common equity, low-cost preferred equity and unsecured debt added through the merger. This diversified capital base, together with our ample liquidity and additional untapped borrowing capacity, should allow us to capitalize on the many attractive investment opportunities we are seeing, including high-yielding lending opportunities in our proprietary loan pipelines and distressed situations in commercial real estate debt.”
Financial Results
Investment Portfolio Summary
Our investment portfolio generated net income attributable to common stockholders of $27.3 million, consisting of $12.7 million from the credit strategy and $14.6 million from the Agency strategy.
Credit Performance
Our total long credit portfolio, excluding non-retained tranches of consolidated non-QM securitization trusts, increased by 10% to $2.74 billion as of December 31, 2023, from $2.48 billion as of September 30, 2023. The increase was driven primarily by the addition of Arlington’s MSR-related portfolio and a larger residential transition loan portfolio, where net purchases exceeded principal paydowns. A portion of the increase was offset by smaller commercial bridge loan and non-QM loan portfolios, as loan paydowns (and in the case of non-QM, loan sales) exceeded new originations during the quarter.
Strong net interest income5 and net gains on our non-agency RMBS investments drove positive results in the credit strategy, with net losses on consumer loans, interest rate and credit hedges being the primary detractors. Our investments in loan originators generated a net positive gain overall as well. We saw a further uptick in delinquencies on our residential and commercial mortgage loan portfolios, and while those portfolios continue to experience low levels of realized credit losses and strong overall credit performance, we are monitoring developments closely and diligently working out a handful of nonperforming commercial mortgage assets.
During the quarter, the net interest margin6 on our credit portfolio declined to 2.66% from 2.95%, driven by lower asset yields (which includes the drag from nonperforming loans) and a higher cost of funds. We continued to benefit from positive carry on our interest rate swap hedges, where we overall receive a higher floating rate and pay a lower fixed rate.
Agency Performance
Our total long Agency RMBS portfolio decreased by 12% quarter over quarter to $853.2 million, as principal repayments and net sales exceeded net gains.
In October, interest rates and volatility increased, which drove yield spreads wider in most fixed income sectors, including Agency RMBS. Markets then reversed course, however, with interest rates and volatility declining, and yield spreads tightening, through year end. Overall for the fourth quarter, Agency RMBS outperformed U.S. Treasury securities and interest rate swaps, with lower and intermediate coupon RMBS exhibiting the most pronounced outperformance. As a result, significant net gains on our Agency RMBS portfolio (which was concentrated in those coupons) exceeded net losses on our interest rate hedges, which drove strong performance from our Agency RMBS strategy for the quarter.
Average pay-ups on our specified pools increased to 0.84% as of December 31, 2023, as compared to 0.75% as of September 30, 2023.
During the quarter, an increase in asset yields on our Agency strategy only partially offset an increase in cost of funds, which caused the net interest margin5 on our Agency RMBS, excluding the Catch-up Amortization Adjustment, to decrease to 0.69% from 1.05%. We continued to benefit from positive carry on our interest rate swap hedges, where we overall receive a higher floating rate and pay a lower fixed rate, although the extent of this benefit declined quarter over quarter.
Longbridge Summary
Our Longbridge portfolio generated a net loss attributable to common stockholders of $(3.4) million for the fourth quarter as net losses in originations and on interest rate hedges exceeded net gains on proprietary loans, net gains on the HMBS MSR Equivalent7 and MSRs on reverse mortgage loans (“Reverse MSRs”), and servicing income. In originations, while lower volumes drove the net loss, tighter yield spreads and lower interest rates did improve gain-on-sale margins on both HECM and proprietary loans.
Our Longbridge portfolio increased by 13% sequentially to $552.4 million as of December 31, 2023, driven primarily by proprietary reverse mortgage loan originations.
Corporate/Other Summary
Our results for the quarter reflect a net gain, driven by the decline in interest rates, on the fixed receiver interest rate swaps that we use to hedge the fixed payments on both our unsecured long-term debt and our preferred equity.
Our results for the quarter also include the bargain purchase gain associated with the closing of the merger with Arlington, partially offset by merger-related transaction expenses including certain compensation and severance costs that had been previously negotiated as part of the merger agreement. Although the bargain purchase gain, net of the related expenses, contributed positively to net income during the quarter, the common shares issued as consideration for the merger were issued at a discount to our book value per share, and the transaction was dilutive to common shareholders overall by approximately 1.1%.
Finally, our results include the additional costs associated with the termination of our previously announced merger with Great Ajax Corp in October, including the initial markdown on the Great Ajax common shares we purchased in connection with that termination, partially offset by net gains on the fixed payer interest rate swaps that we held as a hedge prior to termination of the merger.
| _________________________ | |
|
1 |
Includes $(11.4) million of certain corporate/other income and expense items not attributed to either the investment portfolio or Longbridge segments. Such amount primarily includes the bargain purchase gain related to the Arlington Merger, certain compensation and benefits, certain professional fees, management fees, preferred dividends accrued, and certain realized and unrealized gains and losses on our Unsecured debt, at fair value. |
|
2 |
Adjusted Distributable Earnings is a non-GAAP financial measure. See “Reconciliation of Net Income (Loss) to Adjusted Distributable Earnings” below for an explanation regarding the calculation of Adjusted Distributable Earnings. |
|
3 |
Excludes U.S. Treasury securities and repo borrowings at certain unconsolidated entities that are recourse to us. Including such borrowings, our debt-to-equity ratio, adjusted for unsettled purchases and sales, based on total recourse borrowings was 2.1:1 as of December 31, 2023. |
|
4 |
Excludes U.S. Treasury securities. |
|
5 |
Excludes any interest income and interest expense items from interest rate hedges, net credit hedges and other activities, net. |
|
6 |
Net interest margin represents the weighted average asset yield less the weighted average secured financing cost of funds on such assets. It also includes the effect of actual and accrued periodic payments on interest rate swaps used to hedge the assets. |
|
7 |
HMBS assets are consolidated for GAAP reporting purposes, and HMBS-related obligations are accounted for on the balance sheet as secured borrowings. The fair value of HMBS assets less the fair value of the HMBS-related obligations approximate fair value of the HMBS MSR Equivalent. |
Credit Portfolio(1)
The following table summarizes our credit portfolio holdings as of December 31, 2023 and September 30, 2023:
|
|
|
December 31, 2023 |
|
September 30, 2023 |
||||||||
|
($ in thousands) |
|
Fair Value |
|
% |
|
Fair Value |
|
% |
||||
|
Dollar denominated: |
|
|
|
|
|
|
|
|
||||
|
CLOs(2) |
|
$ |
33,920 |
|
0.8 |
% |
|
$ |
29,294 |
|
0.8 |
% |
|
CMBS |
|
|
45,432 |
|
1.1 |
% |
|
|
20,587 |
|
0.5 |
% |
|
Commercial mortgage loans and REO(3)(4) |
|
|
330,296 |
|
7.9 |
% |
|
|
365,329 |
|
9.4 |
% |
|
Consumer loans and ABS backed by consumer loans(2) |
|
|
83,130 |
|
2.0 |
% |
|
|
90,474 |
|
2.3 |
% |
|
Other loans and ABS(5) |
|
|
10,314 |
|
0.3 |
% |
|
|
1,285 |
|
— |
% |
|
Corporate debt and equity and corporate loans |
|
|
29,720 |
|
0.7 |
% |
|
|
21,836 |
|
0.6 |
% |
|
Debt and equity investments in loan origination-related entities(6) |
|
|
38,528 |
|
0.9 |
% |
|
|
37,947 |
|
1.0 |
% |
|
Non-Agency RMBS |
|
|
253,522 |
|
6.1 |
% |
|
|
259,543 |
|
6.7 |
% |
|
Non-QM loans and retained non-QM RMBS(7) |
|
|
2,037,914 |
|
48.9 |
% |
|
|
2,060,036 |
|
53.0 |
% |
|
Residential transition loans and other residential mortgage loans and REO(3) |
|
|
1,113,816 |
|
26.8 |
% |
|
|
975,667 |
|
25.1 |
% |
|
Forward MSR-related investments |
|
|
163,336 |
|
3.9 |
% |
|
|
— |
|
— |
% |
|
Non-Dollar denominated: |
|
|
|
|
|
|
|
|
||||
|
CLOs(2) |
|
|
4,234 |
|
0.1 |
% |
|
|
1,578 |
|
0.1 |
% |
|
Corporate debt and equity |
|
|
189 |
|
— |
% |
|
|
177 |
|
— |
% |
|
RMBS(8) |
|
|
19,674 |
|
0.5 |
% |
|
|
19,608 |
|
0.5 |
% |
|
Total long credit portfolio |
|
$ |
4,164,025 |
|
100.0 |
% |
|
$ |
3,883,361 |
|
100.0 |
% |
|
Less: Non-retained tranches of consolidated securitization trusts |
|
|
1,424,804 |
|
|
|
|
1,398,748 |
|
|
||
|
Total long credit portfolio excluding non-retained tranches of consolidated securitization trusts |
|
$ |
2,739,221 |
|
|
|
$ |
2,484,613 |
|
|
||
|
(1) |
This information does not include U.S. Treasury securities, securities sold short, or financial derivatives. |
|
(2) |
Includes equity investments in securitization-related vehicles. |
|
(3) |
In accordance with U.S. GAAP, REO is not considered a financial instrument and as a result is included at the lower of cost or fair value. |
|
(4) |
Includes equity investments in unconsolidated entities holding commercial mortgage loans and REO. |
|
(5) |
Includes equity investment in an unconsolidated entity which purchases certain other loans for eventual securitization. |
|
(6) |
Includes corporate loans to certain loan origination entities in which we hold an equity investment. |
|
(7) |
Retained non-QM RMBS represents RMBS issued by non-consolidated Ellington-sponsored non-QM loan securitization trusts, and interests in entities holding such RMBS. |
|
(8) |
Includes an equity investment in an unconsolidated entity holding European RMBS. |
Agency RMBS Portfolio(1)
The following table summarizes our Agency RMBS portfolio holdings as of December 31, 2023 and September 30, 2023:
|
|
|
December 31, 2023 |
|
September 30, 2023 |
||||||||
|
($ in thousands) |
|
Fair Value |
|
% |
|
Fair Value |
|
% |
||||
|
Long Agency RMBS: |
|
|
|
|
|
|
|
|
||||
|
Fixed rate |
|
$ |
798,211 |
|
93.5 |
% |
|
$ |
914,262 |
|
94.8 |
% |
|
Floating rate |
|
|
5,130 |
|
0.6 |
% |
|
|
5,154 |
|
0.5 |
% |
|
Reverse mortgages |
|
|
37,171 |
|
4.4 |
% |
|
|
33,529 |
|
3.5 |
% |
|
IOs |
|
|
12,712 |
|
1.5 |
% |
|
|
11,341 |
|
1.2 |
% |
|
Total long Agency RMBS |
|
$ |
853,224 |
|
100.0 |
% |
|
$ |
964,286 |
|
100.0 |
% |
|
(1) |
This information does not include U.S. Treasury securities, securities sold short, or financial derivatives. |
Longbridge Portfolio(1)
Longbridge originates reverse mortgage loans, including home equity conversion mortgage loans, or “HECMs,” which are insured by the FHA and which are eligible for inclusion in GNMA-guaranteed HECM-backed MBS, or “HMBS.” Upon securitization, the HECMs remain on our balance sheet under GAAP, and Longbridge retains the mortgage servicing rights associated with the HMBS, or the “HMBS MSR Equivalent.” Longbridge also originates “proprietary reverse mortgage loans,” which are not insured by the FHA, and Longbridge has typically retained the associated MSRs. The following table summarizes Longbridge’s loan-related assets as of December 31, 2023 and September 30, 2023:
|
|
|
December 31, 2023 |
|
September 30, 2023 |
||||
|
|
|
(In thousands) |
||||||
|
HMBS assets(2) |
|
$ |
8,511,682 |
|
|
$ |
8,256,881 |
|
|
Less: HMBS liabilities |
|
|
(8,423,235 |
) |
|
|
(8,181,922 |
) |
|
HMBS MSR Equivalent |
|
|
88,447 |
|
|
|
74,959 |
|
|
Unsecuritized HECM loans(3) |
|
|
102,553 |
|
|
|
135,061 |
|
|
Proprietary reverse mortgage loans |
|
|
329,576 |
|
|
|
247,021 |
|
|
Reverse MSRs |
|
|
29,580 |
|
|
|
29,653 |
|
|
Unsecuritized REO |
|
|
2,218 |
|
|
|
1,484 |
|
|
Total |
|
$ |
552,374 |
|
|
$ |
488,178 |
|
|
(1) |
This information does not include financial derivatives or loan commitments. |
|
(2) |
Includes HECM loans, related REO, and claims or other receivables. |
|
(3) |
As of December 31, 2023, includes $6.9 million of active HECM buyout loans, $10.2 million of inactive HECM buyout loans, and $4.9 million of other inactive HECM loans. As of September 30, 2023, includes $7.3 million of active HECM buyout loans, $12.1 million of inactive HECM buyout loans, and $4.7 million of other inactive HECM loans. |
The following table summarizes Longbridge’s origination volumes by channel for the three-month periods ended December 31, 2023 and September 30, 2023:
|
($ In thousands) |
|
December 31, 2023 |
|
September 30, 2023 |
||||||||||||
|
Channel |
|
Units |
|
New Loan Origination Volume(1) |
|
% of New Loan Origination Volume |
|
Units |
|
New Loan Origination Volume(1) |
|
% of New Loan Origination Volume |
||||
|
Retail |
|
363 |
|
$ |
47,868 |
|
18 |
% |
|
384 |
|
$ |
55,576 |
|
18 |
% |
|
Wholesale and correspondent |
|
1,223 |
|
|
214,314 |
|
82 |
% |
|
1,367 |
|
|
251,215 |
|
82 |
% |
|
Total |
|
1,586 |
|
$ |
262,182 |
|
100 |
% |
|
1,751 |
|
$ |
306,791 |
|
100 |
% |
|
(1) |
Represents initial borrowed amounts on reverse mortgage loans. |
Financing
Our recourse debt-to-equity ratio2, excluding U.S. Treasury securities and adjusted for unsettled purchases and sales, decreased to 2.0:1 at December 31, 2023 from 2.3:1 at September 30, 2023. The decline was primarily driven by a significant increase in shareholders’ equity upon closing of the Arlington merger, only partially offset by increased borrowings related to our larger portfolio. Our overall debt-to-equity ratio, excluding U.S. Treasury securities and adjusted for unsettled purchases and sales, also decreased during the quarter, to 8.4:1 as of December 31, 2023, as compared to 9.4:1 as of September 30, 2023.
The following table summarizes our outstanding borrowings and debt-to-equity ratios as of December 31, 2023 and September 30, 2023:
|
|
|
December 31, 2023 |
|
September 30, 2023 |
||||||
|
|
|
Outstanding Borrowings(1) |
|
Debt-to-Equity Ratio(2) |
|
Outstanding Borrowings(1) |
|
Debt-to-Equity Ratio(2) |
||
|
|
|
(In thousands) |
|
|
|
(In thousands) |
|
|
||
|
Recourse borrowings(3)(4) |
|
$ |
3,510,945 |
|
2.3:1 |
|
$ |
3,084,174 |
|
2.3:1 |
|
Non-recourse borrowings(4) |
|
|
9,847,903 |
|
6.4:1 |
|
|
9,586,489 |
|
7.2:1 |
|
Total Borrowings |
|
$ |
13,358,848 |
|
8.7:1 |
|
$ |
12,670,663 |
|
9.5:1 |
|
Total Equity |
|
$ |
1,535,612 |
|
|
|
$ |
1,337,417 |
|
|
|
Recourse borrowings excluding U.S. Treasury securities, adjusted for unsettled purchases and sales |
|
|
|
2.0:1 |
|
|
|
2.3:1 |
||
|
Total borrowings excluding U.S. Treasury securities, adjusted for unsettled purchases and sales |
|
|
|
8.4:1 |
|
|
|
9.4:1 |
||
|
(1) |
Includes borrowings under repurchase agreements, other secured borrowings, other secured borrowings, at fair value, and unsecured debt, at par. |
|
(2) |
Overall debt-to-equity ratio is computed by dividing outstanding borrowings by total equity. The debt-to-equity ratio does not account for liabilities other than debt financings. |
|
(3) |
Excludes repo borrowings at certain unconsolidated entities that are recourse to us. Including such borrowings, our debt-to-equity ratio based on total recourse borrowings is 2.4:1 as of both December 31, 2023 and September 30, 2023. |
|
(4) |
All of our non-recourse borrowings are secured by collateral. In the event of default under a non-recourse borrowing, the lender has a claim against the collateral but not any of the other assets held by us or our consolidated subsidiaries. In the event of default under a recourse borrowing, the lender’s claim is not limited to the collateral (if any). |
The following table summarizes our operating results by strategy for the three-month period ended December 31, 2023:
|
|
|
Investment Portfolio |
|
Longbridge |
|
Corporate/Other |
|
Total |
|
Per Share |
||||||||||||||||||
|
(In thousands except per share amounts) |
|
Credit |
|
Agency |
|
Investment Portfolio Subtotal |
|
|
|
|
||||||||||||||||||
|
Interest income and other income (1) |
|
$ |
74,769 |
|
|
$ |
11,580 |
|
|
$ |
86,349 |
|
|
$ |
10,930 |
|
|
$ |
1,996 |
|
|
$ |
99,275 |
|
|
$ |
1.38 |
|
|
Interest expense |
|
|
(43,503 |
) |
|
|
(12,923 |
) |
|
|
(56,426 |
) |
|
|
(7,819 |
) |
|
|
(3,454 |
) |
|
|
(67,699 |
) |
|
|
(0.94 |
) |
|
Realized gain (loss), net(2) |
|
|
(19,064 |
) |
|
|
(11,075 |
) |
|
|
(30,139 |
) |
|
|
(27 |
) |
|
|
28,175 |
|
|
|
(1,991 |
) |
|
|
(0.03 |
) |
|
Unrealized gain (loss), net |
|
|
28,364 |
|
|
|
57,043 |
|
|
|
85,407 |
|
|
|
15,661 |
|
|
|
(5,604 |
) |
|
|
95,464 |
|
|
|
1.32 |
|
|
Net change from reverse mortgage loans and HMBS obligations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
28,903 |
|
|
|
— |
|
|
|
28,903 |
|
|
|
0.40 |
|
|
Earnings in unconsolidated entities |
|
|
2,547 |
|
|
|
— |
|
|
|
2,547 |
|
|
|
— |
|
|
|
— |
|
|
|
2,547 |
|
|
|
0.04 |
|
|
Interest rate hedges and other activity, net(3) |
|
|
(20,238 |
) |
|
|
(30,067 |
) |
|
|
(50,305 |
) |
|
|
(25,684 |
) |
|
|
9,730 |
|
|
|
(66,259 |
) |
|
|
(0.92 |
) |
|
Credit hedges and other activities, net(4) |
|
|
(4,525 |
) |
|
|
— |
|
|
|
(4,525 |
) |
|
|
— |
|
|
|
1,463 |
|
|
|
(3,062 |
) |
|
|
(0.04 |
) |
|
Income tax (expense) benefit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(129 |
) |
|
|
(129 |
) |
|
|
— |
|
|
Investment related expenses |
|
|
(3,169 |
) |
|
|
— |
|
|
|
(3,169 |
) |
|
|
(6,386 |
) |
|
|
— |
|
|
|
(9,555 |
) |
|
|
(0.13 |
) |
|
Other expenses(5) |
|
|
(1,877 |
) |
|
|
— |
|
|
|
(1,877 |
) |
|
|
(18,940 |
) |
|
|
(37,352 |
) |
|
|
(58,169 |
) |
|
|
(0.81 |
) |
|
Net income (loss) |
|
|
13,304 |
|
|
|
14,558 |
|
|
|
27,862 |
|
|
|
(3,362 |
) |
|
|
(5,175 |
) |
|
|
19,325 |
|
|
|
0.27 |
|
|
Dividends on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,104 |
) |
|
|
(6,104 |
) |
|
|
(0.08 |
) |
|
Net (income) loss attributable to non-participating non-controlling interests |
|
|
(586 |
) |
|
|
— |
|
|
|
(586 |
) |
|
|
6 |
|
|
|
(5 |
) |
|
|
(585 |
) |
|
|
(0.01 |
) |
|
Net income (loss) attributable to common stockholders and participating non-controlling interests |
|
|
12,718 |
|
|
|
14,558 |
|
|
|
27,276 |
|
|
|
(3,356 |
) |
|
|
(11,284 |
) |
|
|
12,636 |
|
|
|
0.18 |
|
|
Net (income) loss attributable to participating non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(139 |
) |
|
|
(139 |
) |
|
|
0.00 |
|
|
Net income (loss) attributable to common stockholders |
|
$ |
12,718 |
|
|
$ |
14,558 |
|
|
$ |
27,276 |
|
|
$ |
(3,356 |
) |
|
$ |
(11,423 |
) |
|
$ |
12,497 |
|
|
$ |
0.18 |
|
|
Net income (loss) attributable to common stockholders per share of common stock |
|
$ |
0.18 |
|
|
$ |
0.20 |
|
|
$ |
0.38 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.16 |
) |
|
$ |
0.18 |
|
|
|
||
|
Weighted average shares of common stock and convertible units(6) outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
72,136 |
|
|
|
||||||||||||
|
Weighted average shares of common stock outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
71,338 |
|
|
|
||||||||||||
|
(1) |
Other income primarily consists of rental income on real estate owned, loan origination fees, and servicing income. |
|
(2) |
In Corporate/Other, represents the $28.2 million bargain purchase gain related to the Arlington Merger. |
|
(3) |
Includes U.S. Treasury securities, if applicable. |
|
(4) |
Other activities include certain equity and other trading strategies and related hedges, and net realized and unrealized gains (losses) on foreign currency. |
|
(5) |
In Corporate/Other, includes Arlington merger-related expenses of $22.1 million. |
|
(6) |
Convertible units include Operating Partnership units attributable to participating non-controlling interests. |
The following table summarizes our operating results by strategy for the three-month period ended September 30, 2023:
|
|
|
Investment Portfolio |
|
Longbridge |
|
Corporate/Other |
|
Total |
|
Per Share |
||||||||||||||||||
|
(In thousands except per share amounts) |
|
Credit |
|
Agency |
|
Investment Portfolio Subtotal |
|
|
|
|
||||||||||||||||||
|
Interest income and other income (1) |
|
$ |
77,809 |
|
|
$ |
10,490 |
|
|
$ |
88,299 |
|
|
$ |
9,593 |
|
|
$ |
1,581 |
|
|
$ |
99,473 |
|
|
$ |
1.45 |
|
|
Interest expense |
|
|
(43,791 |
) |
|
|
(11,619 |
) |
|
|
(55,410 |
) |
|
|
(7,540 |
) |
|
|
(3,117 |
) |
|
|
(66,067 |
) |
|
|
(0.96 |
) |
|
Realized gain (loss), net |
|
|
(10,226 |
) |
|
|
(6,007 |
) |
|
|
(16,233 |
) |
|
|
— |
|
|
|
— |
|
|
|
(16,233 |
) |
|
|
(0.24 |
) |
|
Unrealized gain (loss), net |
|
|
(9,205 |
) |
|
|
(33,034 |
) |
|
|
(42,239 |
) |
|
|
19,201 |
|
|
|
(4,410 |
) |
|
|
(27,448 |
) |
|
|
(0.40 |
) |
|
Net change from reverse mortgage loans and HMBS obligations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(15,800 |
) |
|
|
— |
|
|
|
(15,800 |
) |
|
|
(0.23 |
) |
|
Earnings in unconsolidated entities |
|
|
(978 |
) |
|
|
— |
|
|
|
(978 |
) |
|
|
— |
|
|
|
— |
|
|
|
(978 |
) |
|
|
(0.01 |
) |
|
Interest rate hedges and other activity, net(2) |
|
|
16,516 |
|
|
|
29,639 |
|
|
|
46,155 |
|
|
|
23,948 |
|
|
|
11,082 |
|
|
|
81,185 |
|
|
|
1.18 |
|
|
Credit hedges and other activities, net(3) |
|
|
(1,141 |
) |
|
|
— |
|
|
|
(1,141 |
) |
|
|
— |
|
|
|
(235 |
) |
|
|
(1,376 |
) |
|
|
(0.02 |
) |
|
Income tax (expense) benefit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(224 |
) |
|
|
(224 |
) |
|
|
— |
|
|
Investment related expenses |
|
|
(2,330 |
) |
|
|
— |
|
|
|
(2,330 |
) |
|
|
(7,273 |
) |
|
|
— |
|
|
|
(9,603 |
) |
|
|
(0.14 |
) |
|
Other expenses |
|
|
(1,441 |
) |
|
|
— |
|
|
|
(1,441 |
) |
|
|
(18,046 |
) |
|
|
(10,362 |
) |
|
|
(29,849 |
) |
|
|
(0.44 |
) |
|
Net income (loss) |
|
|
25,213 |
|
|
|
(10,531 |
) |
|
|
14,682 |
|
|
|
4,083 |
|
|
|
(5,685 |
) |
|
|
13,080 |
|
|
|
0.19 |
|
|
Dividends on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,980 |
) |
|
|
(5,980 |
) |
|
|
(0.09 |
) |
|
Net (income) loss attributable to non-participating non-controlling interests |
|
|
(438 |
) |
|
|
— |
|
|
|
(438 |
) |
|
|
12 |
|
|
|
(3 |
) |
|
|
(429 |
) |
|
|
(0.01 |
) |
|
Net income (loss) attributable to common stockholders and participating non-controlling interests |
|
|
24,775 |
|
|
|
(10,531 |
) |
|
|
14,244 |
|
|
|
4,095 |
|
|
|
(11,668 |
) |
|
|
6,671 |
|
|
|
0.10 |
|
|
Net (income) loss attributable to participating non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(80 |
) |
|
|
(80 |
) |
|
|
||
|
Net income (loss) attributable to common stockholders |
|
$ |
24,775 |
|
|
$ |
(10,531 |
) |
|
$ |
14,244 |
|
|
$ |
4,095 |
|
|
$ |
(11,748 |
) |
|
$ |
6,591 |
|
|
$ |
0.10 |
|
|
Net income (loss) attributable to common stockholders per share of common stock |
|
$ |
0.37 |
|
|
$ |
(0.16 |
) |
|
$ |
0.21 |
|
|
$ |
0.06 |
|
|
$ |
(0.17 |
) |
|
$ |
0.10 |
|
|
|
||
|
Weighted average shares of common stock and convertible units(4) outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
68,605 |
|
|
|
||||||||||||
|
Weighted average shares of common stock outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
67,790 |
|
|
|
||||||||||||
Contacts
Investors:
Ellington Financial Inc.
Investor Relations
(203) 409-3575
[email protected]
or
Media:
Amanda Shpiner/Sara Widmann
Gasthalter & Co.
for Ellington Financial
(212) 257-4170
[email protected]
