Ellington Financial Announces Estimated Book Value Per Common Share as of February 28, 2026Mar 24, 2026 4:55 PM Eastern Daylight TimeEllington Financial Announces Estimated Book Value Per Common Share as of February 28, 2026ShareOLD GREENWICH, Conn.--(BUSINESS WIRE)--Ellington Financial Inc. (NYSE: EFC) ("we") today announced an estimated book value per share of common stock of $13.47 as of February 28, 2026. This estimate includes the effect of the previously announced monthly dividend of $0.13 per share o ...

It’s easy for income investors to be attracted to Ellington Financial Inc. (EFC) and its big 13% yield. Even better, the company pays dividends monthly. But Ellington is a serial dividend cutter, cautions Marc Lichtenfeld, chief income strategist at Wealthy Retirement. To get your FREE copy of the complete MoneyShow 2026 Top Picks Report, click here. Ellington is a mortgage Real Estate Investment Trust, or REIT, that has been around for more than 30 years. It invests in both commercial and consumer mortg ...

Core Viewpoint - Ellington Financial Inc. announced an estimated book value per common share of $13.31 as of January 31, 2026, which includes the impact of a monthly dividend of $0.13 per share paid on February 27, 2026 [1][2] Financial Performance - For the quarter ended December 31, 2025, Ellington Financial reported a net income attributable to common stockholders of $14.7 million, equating to $0.14 per common share [1] - The investment portfolio contributed $42.2 million, or $0.39 per common share, while the credit strategy generated $38.1 million, or $0.35 per common share [1] Dividend Information - The Board of Directors declared a monthly dividend of $0.13 per share of common stock, payable on March 31, 2026, to stockholders of record as of February 27, 2026 [2]

Core Viewpoint - Ellington Financial Inc. (EFC) has experienced a downtrend with a 5.1% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround as analysts expect better earnings than previously predicted [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) is a momentum oscillator that indicates whether a stock is oversold, with readings below 30 typically signaling oversold conditions [2]. - EFC's current RSI reading of 28.97 suggests that heavy selling may be exhausting, indicating a possible bounce back towards equilibrium in supply and demand [5]. - Stocks oscillate between overbought and oversold regardless of their fundamentals, and the RSI helps identify potential reversal points for investors [3]. Group 2: Fundamental Analysis - There is strong consensus among sell-side analysts regarding EFC's earnings estimates, with a 0.5% increase in the consensus EPS estimate over the last 30 days, which often correlates with price appreciation [7]. - EFC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a near-term turnaround [8].

Company Overview - As of December 31, 2025, the company managed a diversified portfolio totaling approximately $4.9 billion[16]. - The company completed the merger with Arlington Asset Investment Corp. on December 14, 2023, enhancing its capital base and investment portfolio[24]. - Ellington, the company's external manager, had over 170 employees and approximately $20.1 billion in assets under management as of December 31, 2025[28]. - Longbridge had approximately 500 employees as of December 31, 2025[85]. - The company has two reportable operating segments: the Investment Portfolio Segment and the Longbridge Segment[21]. Investment Strategy - The company employs a credit-focused investment strategy, primarily investing in residential and commercial mortgage loans[16]. - The company utilizes an opportunistic strategy to seek attractive, risk-adjusted returns across various financial assets[29]. - The company invests in a wide range of asset classes, including Agency RMBS, CMBS, consumer loans, and corporate CLOs[22]. - Ellington focuses on structured products, seeking investments across various sectors without restrictions on ratings or capital structure, aiming for better and consistent returns for investors[33]. - The company targets underserved niche market segments for loans, leveraging industry relationships to source new investment opportunities, enhancing diversification across investment classes[34]. - The company leverages Ellington's analytical resources to enhance its investment and risk management processes[32]. REIT Qualification and Compliance - The company aims to maintain its qualification as a REIT, which requires distributing at least 90% of its REIT taxable income to stockholders[18]. - The company elected to be taxed as a REIT starting from the taxable year ended December 31, 2019, and must distribute at least 90% of its annual REIT taxable income to maintain this status[70]. - Failure to maintain REIT qualification could subject the company to federal income tax at corporate rates, impacting cash available for distribution[71]. - At least 55% of the entity's assets must consist of qualifying real estate assets to meet the requirements of Section 3(c)(5)(C) of the Investment Company Act[75]. - The SEC is reviewing the Section 3(c)(5)(C) exclusion, which may impact the company's operations and strategy[76]. - Compliance with the Investment Company Act could require significant changes to the company's strategy, adversely affecting its business and financial condition[78]. Financial Performance and Risks - The company is exposed to significant credit risks through investments in residential and commercial mortgage loans, MBS, CRTs, and CLOs, with borrower delinquencies and defaults potentially leading to losses[91]. - Interest rate mismatches between assets and liabilities could negatively impact net interest income, particularly in rising interest rate environments[91]. - The valuation of investments is inherently uncertain, with many assets being illiquid and subject to significant fluctuations due to market volatility and changing credit conditions[91]. - The performance of MSR-related investments is highly sensitive to interest rates, with falling rates potentially accelerating mortgage prepayments and reducing future servicing income[94]. - Economic downturns, high unemployment, and elevated inflation may impair borrowers' ability to repay mortgage loans, leading to higher delinquency rates and defaults[107]. - The company faces risks associated with due diligence on potential assets, which may not reveal all weaknesses, potentially leading to losses[145]. Management and Fees - The base management fee is set at 1.50% per annum of the total equity of the Operating Partnership, calculated at the end of each fiscal quarter[54]. - Incentive fees are calculated as 25% of the excess of Adjusted Net Income over specified hurdle amounts for the incentive calculation period[55]. - Adjusted Net Income excludes non-cash equity compensation expenses and is adjusted for one-time events as per U.S. GAAP[56]. - The management agreement is set to expire on December 31, 2026, with automatic annual renewals unless a non-renewal notice is given 270 to 180 days prior[60]. - The company may terminate the management agreement for cause with 30 days' notice, and if terminated without cause, a fee equal to three times the average annual management and incentive fees will be required[61]. Market and Economic Conditions - Difficult conditions in the mortgage and real estate markets, including elevated interest rates and declining property values, could adversely affect the value of investments and financial performance[91]. - The company competes with larger mortgage REITs and financial institutions, which may have lower costs of funds and better access to capital[68]. - The instability of the banking system due to regional bank failures could adversely impact the company's commercial mortgage loans and overall financial condition[166]. - Distress in the commercial real estate sector is negatively impacting markets, with potential declines in rental rates and occupancy levels due to factors like remote work policies and workforce reductions[168]. Financing and Liquidity Risks - The company is currently party to short-term borrowings in the form of repos, with no assurance of continuous renewal, which may lead to asset disposals at depressed prices if financing cannot be secured[190]. - A contraction in overall financing availability could significantly increase financing costs or collateral requirements imposed by lenders, impacting profitability[191]. - The amount of financing received is directly related to lenders' valuations of financed assets, which can lead to margin calls if asset values decrease[192]. - Significant margin calls and increased repo haircuts could adversely affect the company's liquidity and ability to distribute dividends to stockholders[194]. - The company has a commitment to fund additional borrowing capacity of $2.3 billion as of December 31, 2025, which could strain liquidity if not managed properly[205]. Regulatory and Legal Risks - The company is subject to extensive regulations including the Truth in Lending Act and the Fair Credit Reporting Act, impacting its mortgage loan origination and servicing activities[80]. - The CFPB has rulemaking authority over federal consumer protection laws applicable to mortgage servicers, affecting the company's operations[81]. - Regulatory changes aimed at preventing foreclosures may reduce the value of MSRs and mortgage loans, impacting overall financial performance[135]. - The company must monitor its 3(c)(5)(C) subsidiaries regularly to maintain the exclusion from registration under the Investment Company Act[76]. Asset Management and Servicing Risks - The company relies on third-party mortgage servicers, and any servicing failures could negatively impact asset values and cash flows[94]. - The quality and effectiveness of mortgage servicers are critical, as inadequate performance can lead to increased servicing costs and negatively impact financial results[141]. - The company relies on third-party service providers for various services related to MSRs and mortgage loans, exposing it to risks associated with their performance[133].

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Financial Data and Key Metrics Changes - For Q4 2025, the company reported GAAP net income of $0.14 per share and adjusted distributable earnings (ADE) of $0.47 per share, exceeding dividends of $0.39 per share [5][13] - The economic return for Q4 was 4.6% annualized, with book value per share at $13.16 [21][29] - The weighted average borrowing rate on recourse borrowings decreased by 32 basis points to 5.67% [18] Business Line Data and Key Metrics Changes - The credit portfolio saw net interest income increase sequentially, with contributions from non-QM retained tranches and forward MSR-related investments [14] - The Longbridge segment reported strong origination profits driven by higher origination volumes and margins, alongside positive contributions from servicing [15] - The adjusted long credit portfolio increased by 15% to $4.1 billion quarter-over-quarter [16] Market Data and Key Metrics Changes - The agency-eligible loan strategy added approximately $250 million in loans during the second half of 2025, reflecting a shift towards sectors where GSEs are reducing their footprint [10] - The total long agency RMBS portfolio slightly decreased to $218 million, while the Longbridge portfolio decreased by 18% to $617 million due to securitizations [17] Company Strategy and Development Direction - The company aims to optimize its capital structure and enhance resilience by increasing the proportion of long-term, non-mark-to-market borrowings [11][20] - The focus is on expanding loan origination market share while maintaining strong credit performance, supported by a robust securitization platform [38] - The acquisition of a small residential mortgage servicer is expected to enhance in-house servicing capabilities, particularly for delinquent assets [37] Management's Comments on Operating Environment and Future Outlook - Management noted that the housing market shows broader signs of weakness, with more borrowers struggling to stay current, but they maintain significant credit hedges [28] - The company is optimistic about the long-term opportunities in the agency-eligible sector, especially as policymakers are more receptive to private capital [10] - The economic environment remains uncertain, with potential changes in government policies impacting prepayment speeds and the attractiveness of private label versus GSE execution [25][64] Other Important Information - The company completed 25 securitizations in 2025, a significant increase from seven in 2024, and issued $400 million in unsecured notes [29] - Unencumbered assets grew by 45% to $1.77 billion, representing about 95% of total equity [20] Q&A Session Summary Question: Can you discuss the decision to buy the servicer and its implications? - Management highlighted the consolidation in the servicing industry and the need for best-in-class protocols to handle borrowers facing challenges, emphasizing the importance of in-house servicing capabilities [42][44] Question: Will the servicer be used for third-party clients or just the Ellington portfolio? - The servicer will be owned within EFC and initially focused on optimizing the existing portfolio, with potential future opportunities for third-party clients [47][49] Question: How are current repo conditions for retained tranches? - Management noted that the repo market functioned well, but they prefer to operate conservatively regarding leverage on retained tranches due to inherent price volatility [53][54] Question: What are the implications of potential changes to bank capital standards? - Management expressed uncertainty about the impact of capital regulations on bank activity in the mortgage market, noting that significant bank buying was underwhelming in 2025 [77] Question: What are the top priorities for 2026? - Key priorities include integrating the mortgage servicer, increasing long-term financing, and monitoring the preferred market for potential refinancing opportunities [81][84]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported GAAP net income of $0.14 per share and adjusted distributable earnings (ADE) of $0.47 per share, exceeding dividends of $0.39 per share [4][12] - The economic return for the fourth quarter was 4.6% annualized, with book value per share at $13.16 [19][40] - The weighted average borrowing rate on recourse borrowings decreased by 32 basis points to 5.67% [16] Business Line Data and Key Metrics Changes - The credit portfolio saw net interest income increase sequentially, with contributions from non-QM retained tranches and forward MSR-related investments [12][13] - The Longbridge segment reported strong origination profits driven by higher origination volumes and margins, alongside positive contributions from servicing [13][14] - The adjusted long credit portfolio increased by 15% to $4.1 billion quarter-over-quarter, with growth in non-QM loans, agency-eligible loans, and commercial mortgage bridge loans [14][15] Market Data and Key Metrics Changes - The agency-eligible loan strategy added approximately $250 million in loans during the second half of 2025, reflecting a shift towards sectors where GSEs are reducing their footprint [8][9] - The company completed seven securitizations in Q4 2025, expanding its securitization platform to include various loan types [20][21] - The total long agency RMBS portfolio decreased slightly to $218 million, while the Longbridge portfolio decreased by 18% to $617 million due to securitizations [15] Company Strategy and Development Direction - The company aims to optimize its capital structure and enhance balance sheet resilience by increasing the proportion of long-term, non-mark-to-market borrowings [10][18] - The focus is on growing loan origination market share while maintaining strong credit performance, supported by a robust securitization platform [38] - The company is in contract to acquire a small residential mortgage servicer to enhance in-house servicing capabilities, particularly for delinquent assets [36] Management's Comments on Operating Environment and Future Outlook - Management noted that the housing market shows broader signs of weakness, with more borrowers struggling to stay current, but they maintain significant credit hedges [27] - The company is optimistic about the long-term opportunities in the agency-eligible sector, especially as policymakers are more receptive to private capital [9] - The economic environment remains uncertain, with potential government policy changes impacting the mortgage market [24][66] Other Important Information - The company completed 25 securitizations in 2025, significantly up from seven in 2024, indicating a strong focus on enhancing its funding profile [29] - The company has maintained low realized credit losses, reflecting strong underwriting discipline and asset management capabilities [30] Q&A Session Summary Question: Discussion on the decision to buy the servicer - Management highlighted the consolidation in the servicing industry and the need for best-in-class protocols to handle borrowers facing challenges, emphasizing the importance of in-house capabilities [42][43] Question: Conditions for applying repo to retained tranches - Management noted that the repo market functioned well, with low financing spreads, but they prefer to operate conservatively and avoid adding more leverage to retained tranches due to inherent price volatility [53][55] Question: Approach to the agency-eligible market amid potential changes - Management indicated that while there are risks associated with potential changes in LLPAs and g-fees, current execution remains favorable for private label markets, and they are monitoring these developments closely [62][66] Question: Current competition and margins in origination activity - Management described the competitive landscape as challenging but not cutthroat, with margins remaining attractive due to favorable pricing structures [71][73]

Earnings Conference Call February 26, 202 6 Q4 2025 Q4 2025 EARNINGS Important Notice Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties. Our actual results may differ from our beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as pre ...

Financial Performance - Net income attributable to common stockholders was $14.7 million, or $0.14 per common share, with $42.2 million from the investment portfolio and $16.4 million from Longbridge[5]. - Adjusted Distributable Earnings reached $51.4 million, or $0.47 per common share, driven by $66.4 million from the investment portfolio and $14.6 million from Longbridge[5]. - Net income attributable to common stockholders for the three months ended December 31, 2025, was $38,051, compared to a loss of $43,850 for the previous quarter[28]. - Longbridge's net income for the quarter was $22,614, translating to earnings per share of $0.21, compared to a loss per share of $(0.40) in the previous quarter[28]. - Net income for the three-month period ended December 31, 2025, was $42,961,000, compared to $47,697,000 for the period ended September 30, 2025, reflecting a decrease of 9.5%[50]. - The company reported a net income (loss) of $37,758,000, which includes a realized gain of $8,548,000 and an unrealized loss of $8,261,000[31]. - The company reported total other income of $24,601,000 for the three-month period ended December 31, 2025, down from $33,036,000 in the previous quarter, reflecting a decline of 25.5%[39]. - The company reported unrealized gains of $16,277,000 for the three-month period ended December 31, 2025, compared to unrealized losses of $194,000 for the previous period[50]. Assets and Liabilities - Cash and cash equivalents stood at $201.9 million, alongside unencumbered assets totaling $1.57 billion as of December 31, 2025[5]. - Total assets as of December 31, 2025, reached $19,352,910,000, up from $17,844,548,000 as of September 30, 2025, indicating an increase of 8.4%[41]. - The company’s total liabilities increased to $17,481,755,000 as of December 31, 2025, from $16,048,728,000 as of September 30, 2025, reflecting an increase of 8.9%[41]. - The debt-to-equity ratio was 9.0:1 when including all recourse and non-recourse borrowings[5]. - The overall debt-to-equity ratio increased to 9.0:1 as of December 31, 2025, compared to 8.6:1 as of September 30, 2025[27]. Investment Portfolio - The investment portfolio generated $91,076,000 in income, while interest expense totaled $69,774,000, resulting in a net income from the investment portfolio of $21,302,000[31]. - The company reported interest income and other income of $146,653 for the three months ended December 31, 2025, compared to $102,348 for the previous quarter, indicating a significant increase of approximately 43.25%[28]. - The company incurred total expenses of $39,199,000, which included $17,813,000 in investment and transaction-related expenses[31]. - The net change from reverse mortgage loans and HMBS obligations added $34,954,000 to the income, highlighting the importance of this segment[31]. - The company reported a total of $10,655,000 in adjusted distributable earnings from investments in unconsolidated entities for the three-month period ended December 31, 2025[50]. - The company experienced a loss of $18,203,000 from investments in unconsolidated entities for the three-month period ended December 31, 2025, compared to a loss of $13,074,000 for the previous period[50]. Capital Structure and Strategy - The company plans to optimize its capital structure and balance sheet while increasing market share in loan originations and scaling its securitization platform[4]. - The proportion of total recourse borrowings represented by long-term, non-mark-to-market borrowings almost doubled quarter over quarter[4]. - The company incurred $4,550,000 in non-capitalized transaction costs for the three-month period ended December 31, 2025, compared to $1,758,000 for the previous period, indicating an increase of 158.5%[51]. Longbridge Segment Performance - Longbridge segment reported net income of $16.4 million, with a portfolio decrease of 18% to $617.2 million as of December 31, 2025[9]. - Longbridge's total origination volume for new loans was $529,732 for the three months ended December 31, 2025, compared to $498,577 for the three months ended September 30, 2025, marking an increase of approximately 6.24%[23]. - Longbridge's proprietary reverse mortgage loans increased to $1,687,801 as of December 31, 2025, from $1,387,511 as of September 30, 2025, representing a growth of about 21.63%[21]. - As of December 31, 2025, Longbridge's HMBS assets increased to $10,524,652, up from $10,232,166 as of September 30, 2025, representing a growth of approximately 2.86%[21]. - The long Agency RMBS portfolio decreased slightly to $218.4 million as of December 31, 2025, from $220.7 million as of September 30, 2025[8]. Market Outlook and Risks - Forward-looking statements highlight potential risks including changes in interest rates and market conditions, which could impact future performance[35]. - The company plans to host a conference call on February 26, 2026, to discuss financial results for the quarter ended December 31, 2025, indicating ongoing transparency with investors[34]. Shareholder Information - The weighted average shares of common stock outstanding were 102,726,000, indicating a slight increase in shares compared to previous periods[31]. - The weighted average shares of common stock outstanding increased to 108,491,000 as of December 31, 2025, compared to 101,589,000 in the previous quarter, marking a 6.3% increase[39]. - The book value per common share decreased to $13.16 as of December 31, 2025, down from $13.40 as of September 30, 2025[41]. - Earnings per share attributable to common stockholders for the three-month period ended December 31, 2025, was $0.61, compared to $0.59 for the previous period, reflecting a growth of 3.4%[50].