Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 Delaware 26-0489289 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-34 ...

Financial Data and Key Metrics Changes - Ellington Financial reported GAAP net income of $0.45 per share, with an annualized economic return of nearly 14% and book value per share increasing to $13.49 [4][15] - Adjusted distributable earnings (ADE) per share increased by $0.08 to $0.47, significantly exceeding the $0.39 dividends per share [4][10] - The total economic return for the second quarter was 3.3% non-annualized [15] Business Line Data and Key Metrics Changes - The Longbridge segment contributed $0.13 to ADE, driven by strong performance in origination profits and servicing income [7][12] - The credit portfolio saw net interest income grow sequentially, with positive results from equity investments and loan originators [11] - The adjusted long credit portfolio increased by 1% to $3.32 billion, with growth in commercial mortgage bridge loans and non-QM loans [13] Market Data and Key Metrics Changes - The agency portfolio experienced a modest loss due to volatile yield spreads, while the Longbridge portfolio decreased by 1% sequentially [11][14] - The weighted average borrowing rate on recourse borrowings decreased by two basis points to 6.07% [14] Company Strategy and Development Direction - The company is focused on vertical integration and expanding partnerships with mortgage originators to secure a steady pipeline of high-quality loans [18][19] - Ellington Financial aims to strengthen its liability structure through additional securitizations and increasing unsecured borrowings over time [29][68] - The company is exploring opportunities in new loan sectors as GSEs potentially shrink their footprint [22][79] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the third quarter, citing strong performance across investment portfolios and origination platforms [27] - There is a cautious outlook on home price appreciation, with expectations for muted growth nationally [42][43] - The company is monitoring economic indicators closely and adjusting lending guidelines in response to market conditions [25] Other Important Information - The company completed six securitizations in the second quarter, a record for Ellington Financial, enhancing the stability of its balance sheet [20] - The Longbridge HELOC for Seniors program was launched, which management believes could become a meaningful contributor to earnings [28][64] Q&A Session Summary Question: Outlook for Longbridge and impact of declining rates - Management indicated that declining rates would increase the attractiveness of reverse mortgages, leading to higher origination volumes [33][34] Question: Impact of increased volumes in other mortgage asset types - Management noted that originators are primarily focused on non-QM and residential transition lending, with potential shifts depending on market conditions [38] Question: Outlook on home prices and credit spreads - Management observed a broadening weakness in home prices and is pricing for risk accordingly, with expectations for muted home price appreciation [42][43] Question: Opportunities in mortgage originator space - Management is focused on making equity investments in platforms they know well, securing volume with smaller investments [48][49] Question: Credit quality and workouts - Management reported one significant workout remaining, with overall resolutions moving through the pipeline quickly and minimal drag on earnings [54][57] Question: Long-term run rate earnings contribution from Longbridge - Management expressed optimism about Longbridge's contributions exceeding previous expectations, particularly with the new HELOC product [63][64] Question: Thoughts on dividend trajectory - Management is confident that earnings will continue to cover the dividend, with potential for an increase in the future [100][102]

Financial Performance - Net income was $42.9 million, or $0.45 per share[11] - Economic return was 3.3% for the quarter (non-annualized)[11] - Adjusted Distributable Earnings were $45.0 million, or $0.47 per share[11] - The company declared total dividends of $0.39 for the quarter, resulting in a book value per common share of $13.49[11] Portfolio Composition and Strategy - The adjusted long credit portfolio increased by 1% to $3.32 billion as of June 30, 2025, compared to $3.30 billion as of March 31, 2025[11, 18] - The long Agency portfolio increased by 5% to $268.5 million, driven by net purchases[11, 26] - The Longbridge portfolio decreased by 1% to $545.6 million, as a securitization slightly exceeded new originations[11, 29] - 87% of deployed capital was allocated to credit, 2% to agency, and 11% to Longbridge[12] Leverage and Capital Structure - Recourse debt-to-equity ratio was 1.7:1[11] - Total debt-to-equity ratio was 8.7:1, including non-recourse borrowings[11] - Total stockholders' equity was $1.67 billion, including $1.33 billion of common equity and $332 million of preferred equity[11]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 21, 2025 ELLINGTON FINANCIAL INC. Registrant's telephone number, including area code: (203) 698-1200 (Exact name of registrant as specified in its charter) Delaware 001-34569 26-0489289 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No. ...

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Ownership and Acquisitions - As of March 31, 2025, Ellington Financial Inc. had an ownership interest of approximately 99.1% in its Operating Partnership[438]. - The company completed the acquisition of a controlling interest in Longbridge Financial, LLC on October 3, 2022, and a merger with Arlington Asset Investment Corp. on December 14, 2023[441]. Investment Portfolio - The Investment Portfolio Segment includes diverse financial assets such as residential and commercial mortgage loans, RMBS, CMBS, and CLOs[442]. - The targeted asset classes include Agency RMBS, CMBS, consumer loans, corporate CLOs, and non-agency RMBS, among others[446]. - The company has a history of investing in the Agency and credit markets through its external manager, Ellington Financial Management LLC[438]. - The company focuses on acquiring seasoned commercial mortgage loans, including non-performing and distressed loans, typically at a discount to their unpaid principal balances and underlying real estate values[455]. - The U.S. consumer loan portfolio includes unsecured loans and secured auto loans, with ongoing evaluations for new opportunities in the market[458]. - Non-Agency RMBS holdings include both performing and non-performing loans, with investment-grade and non-investment grade classes[462]. - The company is active in acquiring residential mortgage loans, including newly originated non-QM loans and residential transition loans, focusing on less-competitively-bid mixed legacy pools[466][468]. Longbridge Segment - The Longbridge Segment focuses on the origination and servicing of reverse mortgage loans, including HECM loans insured by the FHA[443]. - Longbridge, a subsidiary, consolidates reverse mortgage loans and has historically focused on home equity conversion mortgage loans (HECMs) insured by FHA[471]. - The Longbridge segment generated a small net loss for the quarter, as net losses on interest rate hedges exceeded positive contributions from originations and net gains on the HMBS MSR Equivalent[526]. - The total proprietary reverse mortgage loans increased to $866,425 as of March 31, 2025, compared to $728,959 as of December 31, 2024, indicating a growth of approximately 18.9%[523]. - The origination volume for the Longbridge segment decreased to $338,451 in the three-month period ended March 31, 2025, down from $419,904 in the previous quarter[527]. Financial Performance - The company aims to generate attractive, risk-adjusted total returns for stockholders by utilizing an opportunistic investment strategy[437]. - The company experienced higher net interest income and net gains from forward MSR-related investments, commercial mortgage loans, and non-QM retained tranches during the quarter[498]. - The company reported net income of $39.3 million for the period, contributing to the increase in equity[565]. - For the three-month period ended March 31, 2025, net income attributable to common stockholders was $31.6 million, an increase from $26.9 million in the same period of 2024[568]. - The company reported net income before income tax expense of $39.228 million for Q1 2025, compared to $34.105 million in Q1 2024, representing an increase of 15.5%[617]. Interest Income and Expenses - Interest income for the three-month period ended March 31, 2025, was $115.9 million, up from $101.5 million for the same period in 2024, reflecting an increase in coupon payments and interest on cash balances[569]. - Interest income from the investment portfolio segment increased to $93.3 million for the three-month period ended March 31, 2025, compared to $91.4 million in 2024[570]. - Interest income from the credit portfolio was $85.4 million for the three-month period ended March 31, 2025, compared to $80.6 million in 2024, driven by a larger average credit portfolio[572]. - Total interest expense for the three-month period ended March 31, 2025, was $72.7 million, slightly up from $70.5 million in 2024[578]. - Interest expense in the investment portfolio segment decreased to $51.6 million for the three-month period ended March 31, 2025, down from $57.3 million in 2024, due to lower financing rates[579]. Market Conditions - The S&P CoreLogic Case-Shiller US National Home Price NSA Index rose by 0.5% over the first two months of 2025, following a 3.9% increase in 2024[490]. - The Mortgage Bankers Association's Refinance Index rose by 80% quarter over quarter, indicating a pickup in refinancing activity amid slightly lower mortgage rates[490]. - U.S. real GDP contracted at an estimated annualized rate of 0.3% in the first quarter of 2025, after growing by 2.4% in the prior quarter[490]. - The unemployment rate increased from 4.0% in January to 4.2% in March 2025[490]. - The percentage of delinquent loans in the residential mortgage loan portfolio increased moderately during the quarter, while the commercial mortgage loan portfolio remained stable[499]. Debt and Liquidity - The total outstanding borrowings under repos and other secured borrowings were $4.8 billion as of March 31, 2025, with approximately 4% related to Agency RMBS holdings[531]. - The debt-to-equity ratio based on total recourse borrowings was 1.9:1 as of March 31, 2025, compared to 2.0:1 as of December 31, 2024[532]. - The overall debt-to-equity ratio decreased to 8.7:1 as of March 31, 2025, from 8.8:1 as of December 31, 2024[535]. - The company expects its liquidity sources, including cash flow from investments and borrowings, to be sufficient to meet both short-term and long-term liquidity needs[621]. Adjusted Distributable Earnings - Adjusted Distributable Earnings is calculated as U.S. GAAP net income adjusted for various factors, including realized and unrealized gains on securities and loans[610]. - The company believes Adjusted Distributable Earnings is a useful indicator of long-term financial performance and dividend-paying ability[612]. - For the three-month period ended March 31, 2025, total adjusted distributable earnings were $51.074 million, compared to $49.248 million for the same period in 2024, reflecting a year-over-year increase of 3.7%[617]. - The adjusted distributable earnings attributable to common stockholders for Q1 2025 were $50.701 million, compared to $49.032 million in Q1 2024, reflecting a year-over-year increase of 3.4%[617].

Financial Data and Key Metrics Changes - The company reported GAAP net income of $0.35 per share and adjusted distributable earnings (ADE) of $0.39 per share, which continue to cover dividends [5][13] - The recourse debt to equity ratio decreased to 1.7:1 from 1.8:1 quarter over quarter, indicating improved leverage [10][18] - Book value per common share stood at $13.44, with a total economic return for the first quarter of 9.5% annualized [19] Business Line Data and Key Metrics Changes - The adjusted long credit portfolio decreased by 4% to $3.3 billion due to securitizations and a smaller residential transitional loan portfolio [17] - The Longbridge portfolio increased by 31% sequentially to $549 million, driven by proprietary reverse mortgage loan originations [17] - The agency RMBS portfolio declined by 14% to $256 million as the company rotated capital into higher yielding opportunities [17] Market Data and Key Metrics Changes - The weighted average borrowing rate on recourse borrowings decreased by 12 basis points to 6.09% [18] - The net interest margin (NIM) on the credit portfolio decreased by 12 basis points, while the NIM on agency increased by 24 basis points [18] Company Strategy and Development Direction - The company is focused on establishing joint ventures to secure consistent access to high-quality loans at attractive pricing [10] - The management emphasized the importance of dynamic hedging strategies and a diversified portfolio to protect book value during market volatility [30][32] - The company is tightening underwriting guidelines to focus on higher FICO borrowers and loans with more extensive underwriting [23] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning to take advantage of heightened market volatility and recharged opportunities [34] - The company noted that the current environment is well-suited to its core strengths, with short-duration loan portfolios steadily returning principal [30] - Management highlighted the ongoing positive contributions from the mortgage servicing rights (MSR) portfolio, despite not expecting the same mark-to-market gains as in the previous quarter [20][22] Other Important Information - The company completed five new securitization deals in the first quarter, taking advantage of tight spreads [7] - The company sold a variety of credit-sensitive securities to lock in gains and enhance liquidity [9] - The company is actively developing proprietary tools to support loan origination [28] Q&A Session Summary Question: Have you been able to deploy a material amount of capital in attractive trading opportunities? - Management indicated that while there was not material growth in April, the portfolio has grown net relative to March 31, with growth in non-QM and opportunistic securities [38][39] Question: Can you provide more detail on the resolutions of commercial bridge loans? - Management explained that one was a discounted payoff, another an REO sale, and one is in active CapEx and lease-up, freeing up $20 million to $25 million for reinvestment [44][46] Question: Does the high level of spread volatility impact your near-term appetite for loan acquisitions? - Management noted that heightened volatility allows for opportunities to buy securities and loans, with a balanced market of buyers and sellers [56][58] Question: Can you share timing and size on potential joint ventures with originators? - Management stated that the investments would be under $5 million in total, aimed at diversifying sourcing channels [68][70] Question: Is the increased value on consumer relationships a reflection of the current lock-in effect? - Management believes it reflects a broader trend in the mortgage space, emphasizing the importance of maintaining customer relationships over time [75][80]

Financial Data and Key Metrics Changes - The company reported GAAP net income of $0.35 per share and adjusted distributable earnings (ADE) of $0.39 per share, which continue to cover dividends [5][13] - The recourse debt to equity ratio decreased to 1.7:1 from 1.8:1 quarter over quarter, indicating improved leverage management [10][18] - Book value per common share stood at $13.44, with a total economic return for the first quarter of 9.5% annualized [19] Business Line Data and Key Metrics Changes - The adjusted long credit portfolio decreased by 4% to $3.3 billion due to securitizations and a smaller residential transitional loan portfolio [17] - The Longbridge portfolio increased by 31% sequentially to $549 million, driven by proprietary reverse mortgage loan originations [17] - The agency RMBS portfolio declined by 14% to $256 million as the company rotated capital into higher yielding opportunities [18] Market Data and Key Metrics Changes - The weighted average borrowing rate on recourse borrowings decreased by 12 basis points to 6.09% [18] - The net interest margin (NIM) on the credit portfolio decreased by 12 basis points, while the NIM on agency increased by 24 basis points [18] Company Strategy and Development Direction - The company is focused on establishing joint ventures to secure consistent access to high-quality loans at attractive pricing [10] - The company is tightening underwriting guidelines to focus on higher FICO borrowers and loans with more extensive underwriting [23] - The company is actively developing proprietary tools to support loan origination and enhance operational efficiency [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning to take advantage of heightened market volatility and recharged opportunity sets [30][34] - The company anticipates ongoing meaningful contributions to ADE from its mortgage servicing rights (MSR) portfolio [21] - Management noted that the current high levels of volatility are creating compelling trading opportunities [30] Other Important Information - The company completed five new securitization deals in the first quarter, taking advantage of tight spreads [7] - The company sold a variety of credit-sensitive securities to lock in gains and enhance liquidity [9] - The company expects to resolve remaining significant workout assets by the end of the second quarter [10] Q&A Session Summary Question: Have you been able to deploy a material amount of capital in attractive trading opportunities? - Management indicated that while there was not material growth in April, the portfolio has grown net relative to March 31, with growth in non-QM and non-agency MBS [38][39] Question: Can you provide more detail on the resolutions of commercial bridge loans? - Management clarified that one was a discounted payoff and another was an REO sale, freeing up $20 million to $25 million for reinvestment [44][46] Question: Does the high level of spread volatility impact your near-term appetite for loan acquisitions? - Management noted that they have been diligent about hedging spread widening risk and have found opportunities to buy loans as spreads tightened [56][58] Question: Can you share timing and size on potential joint ventures with originators? - Management stated that the investments would be under $5 million in total and are expected to close in the next quarter or two [69][74] Question: Is the $0.9 earnings run rate for the Longbridge segment still achievable? - Management confirmed that the $0.9 run rate is still achievable, with seasonal trends affecting volumes [86][89] Question: Can you discuss current performance and dynamics in the CLO market? - Management indicated that CLOs represent a small part of the portfolio and recent negative performance was due to spread widening rather than underlying credit issues [91][92]

Financial Performance - Ellington Financial reported net income of $31649 million, or $035 per share[11] - Adjusted Distributable Earnings were $35493 million, or $039 per share[11] - The economic return for the quarter was 23%, non-annualized[11] Portfolio Composition and Strategy - The adjusted long credit portfolio decreased by 4% to $330 billion[11, 18] - The long Agency portfolio decreased by 14% to $2561 million[11, 26] - The Longbridge portfolio increased by 31% to $5490 million, driven by proprietary reverse mortgage loan originations[11, 29] Leverage and Capital Structure - The recourse debt-to-equity ratio was 17:1[11] - The total debt-to-equity ratio, including non-recourse borrowings, was 87:1[11] - Total stockholders' equity was $161 billion, including $128 billion of common equity and $332 million of preferred equity[11]

Financial Performance - Ellington Financial generated net income of $31.6 million, or $0.35 per common share, and adjusted distributable earnings of $35.5 million, or $0.39 per common share for Q1 2025[8]. - Longbridge's net income attributable to common stockholders for the three-month period ended March 31, 2025, was $31,649, compared to a net loss of $24,443 for the previous period[30]. - Net income for the three-month period ended March 31, 2025, was $39,324 thousand, a significant recovery from a loss of $995 thousand in the previous quarter[50]. - Common stockholders reported earnings per share of $0.55, a decrease of 21% compared to the previous period's $0.70[51]. Investment Portfolio - The investment portfolio segment produced net income of $57.4 million, with $53.2 million from the credit strategy and $4.2 million from the Agency strategy[7]. - The total adjusted long credit portfolio decreased by 4% to $3.30 billion as of March 31, 2025, compared to $3.42 billion as of December 31, 2024[9]. - The long Agency RMBS portfolio decreased by 14% quarter over quarter to $256.1 million as of March 31, 2025, driven by net sales[10]. - The company reported a total unrealized loss of $22,631,000, primarily due to market fluctuations in its investment portfolio[32]. - The company’s financial derivatives included realized and unrealized gains and losses, impacting overall financial performance[52]. Longbridge Segment - The Longbridge segment reported a net loss of $(1.0) million for Q1 2025, while the Longbridge portfolio increased by 31% sequentially to $549.0 million[11]. - As of March 31, 2025, Longbridge's HMBS assets increased to $9,597,451, up from $9,245,834 as of December 31, 2024, representing a growth of approximately 3.8%[23]. - The total volume of proprietary reverse mortgage loans increased to $866,425 as of March 31, 2025, from $728,959 as of December 31, 2024[23]. - The net change from reverse mortgage loans and HMBS obligations contributed $20,080,000 to the total income for the quarter[32]. Cash and Assets - Cash and cash equivalents totaled $203.3 million as of March 31, 2025, alongside other unencumbered assets of $650.2 million[8]. - Total assets increased to $16,644,228 thousand as of March 31, 2025, up from $16,317,028 thousand on December 31, 2024, representing a growth of 2%[42]. - Cash and cash equivalents rose to $203,288 thousand, compared to $192,387 thousand, reflecting an increase of approximately 5%[42]. Equity and Liabilities - The recourse debt-to-equity ratio was 1.7:1 as of March 31, 2025, while the total debt-to-equity ratio, including all borrowings, was 8.7:1[8]. - The total outstanding borrowings as of March 31, 2025, were $14,521,393, with a debt-to-equity ratio of 8.9:1, unchanged from December 31, 2024[27]. - Longbridge's total equity increased to $1,637,616 as of March 31, 2025, compared to $1,590,822 as of December 31, 2024[27]. - Total liabilities increased to $15,006,612 thousand as of March 31, 2025, up from $14,726,206 thousand, marking an increase of approximately 2%[42]. Dividends and Earnings - Book value per common share as of March 31, 2025, was $13.44, including dividends of $0.39 per common share for the quarter[8]. - The dividend yield was 12.2% based on the closing stock price of $12.75 per share on May 6, 2025[8]. - Adjusted Distributable Earnings for the three-month period ended March 31, 2025, was $43,260 thousand, compared to $53,941 thousand for the previous quarter, indicating a decrease of about 20%[50]. Market Conditions and Risks - Forward-looking statements indicate potential risks including changes in interest rates and market conditions that could affect future performance[36]. - The net change in fair value of the HMBS MSR Equivalent and Reverse MSRs was influenced by market conditions and model assumptions[54]. Conference Call - The company plans to host a conference call on May 8, 2025, to discuss financial results for the quarter ended March 31, 2025[35].