Company Overview - Ellington Financial Inc. (NYSE: EFC) is a mortgage REIT that manages a portfolio of loans and mortgage securities [1] - The company currently offers a yield of 11%, which is attractive to income investors [1] Investment Philosophy - The investment approach focuses on long-term ownership rather than short-term price predictions [1] - The analyst emphasizes valuations over target prices and has shifted to a simplified "Buy or Don't Buy" strategy [1] Historical Context - The company has a history of dividend cuts, which may be a concern for potential investors [1]

Mergers and Acquisitions - Ellington Financial Inc. completed the merger with Arlington Asset Investment Corp. on December 14, 2023, enhancing its capital base and investment portfolio[22]. Asset Management - As of December 31, 2024, Ellington managed approximately $13.7 billion in assets, with $7.4 billion in leveraged accounts and $6.2 billion in non-leveraged accounts[27]. - As of December 31, 2024, Ellington manages approximately $12.1 billion in assets, including $6.2 billion in accounts that do not employ financial leverage[61]. - The company has consolidated Longbridge, resulting in two reportable segments: the Investment Portfolio Segment and the Longbridge Segment[19]. Investment Strategy - Ellington's strategy focuses on generating attractive, risk-adjusted returns through investments in mortgage-related, consumer-related, corporate-related, and other financial assets[28]. - The credit portfolio, excluding Agency RMBS, has historically driven risk and return, and this trend is expected to continue in the near to medium term[23]. - Ellington focuses on structured products, seeking investments across various sectors without restrictions on ratings or capital structure, aiming for better and more consistent returns for investors[32]. - The company emphasizes opportunistic investments in underserved niche market segments, leveraging deep industry relationships to source new loan investments[33]. - Ellington's investment strategy is supported by a management team with extensive experience in trading and analyzing complex structured products and loans[34]. Risk Management - The company utilizes derivatives and hedging instruments to manage interest rate risk, yield spread risk, credit risk, and foreign currency risk[18]. - The company employs a variety of hedging instruments to manage risks, including interest rate swaps and credit hedging positions, to protect against adverse credit events[39][41]. - Ellington's risk management infrastructure includes a proprietary portfolio management system, enhancing its ability to assess both portfolio and operational risks[39]. - The company uses leverage to enhance returns, which increases potential losses during adverse market conditions, particularly with rising interest rates[88]. - The company employs various hedging strategies to mitigate risks from credit events, interest rate changes, and foreign currency fluctuations, but these strategies may not prevent losses or eliminate value fluctuations in the portfolio[197]. Management and Operations - The management team is responsible for day-to-day operations, including asset selection, financing, and risk management activities[48]. - The company does not maintain an office or personnel but relies on the Manager for operations, paying all direct operating expenses except those borne by the Manager[57]. - The management agreement includes a base management fee of 1.50% per annum of the equity of the Operating Partnership, calculated at the end of each fiscal quarter[51]. - The management agreement with the Manager expires on December 31, 2025, and will automatically renew annually unless a non-renewal notice is given 180 days prior[58]. Financial Performance and Incentives - The incentive fee structure allows for a payment equal to 25% of the excess of Adjusted Net Income over specified hurdle amounts, incentivizing performance[52]. - The incentive fee calculation includes a Hurdle Amount based on a combination of a 9% or 3% threshold plus the 10-year U.S. Treasury rate, weighted average gross proceeds per share, and retained earnings[55]. - The payment of the incentive fee will be in a combination of common shares and cash, with at least 10% of any quarterly payment made in common shares[56]. Regulatory Environment - 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[77]. - The CFPB has rulemaking authority over federal consumer protection laws applicable to mortgage servicers, which directly affects the company's operations[79]. - The company must comply with various federal and state laws, including the California Consumer Privacy Act and anti-money laundering provisions, which impose additional operational requirements[85]. - The company faces risks related to maintaining its exclusion from registration as an investment company, which could materially affect its business and financial condition[75]. - The company is actively monitored for compliance with evolving regulations, particularly in response to the COVID-19 pandemic and related forbearance programs[81]. Market Risks - Challenging 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[88]. - Significant credit risks are present through investments in residential and commercial mortgage loans, MBS, CRTs, and CLOs, with borrower delinquencies and defaults potentially leading to losses[88]. - The performance of MSR-related investments is highly sensitive to interest rates, with falling rates potentially accelerating mortgage prepayments and reducing future servicing income[90]. - Access to financing is contingent on the creditworthiness of collateral and lender willingness, with disruptions in capital markets potentially restricting investment funding[88]. - The valuation of investments is uncertain, as many assets are illiquid and subject to significant fluctuations due to market volatility and changing credit conditions[88]. Economic Factors - Economic factors such as high unemployment and elevated inflation may impair borrowers' abilities to repay mortgage loans, leading to increased defaults[104]. - Several regional bank failures in the U.S. during 2023 may lead to a recessionary environment, adversely impacting commercial mortgage loans and the company's ability to pay dividends[157]. - Distress in the commercial real estate sector has led to low occupancy rates and tenant defaults, potentially impacting the company's commercial mortgage loans and CMBS[159]. Loan Performance and Risks - The company may incur losses if securities or loans are prepaid faster than expected, leading to adverse impacts on profitability[116]. - The company’s portfolio includes residential mortgage whole loans that do not conform to Fannie Mae or Freddie Mac underwriting guidelines, increasing credit risk exposure[103]. - Legislative changes may make the foreclosure process more difficult and expensive, impacting the company's anticipated returns on foreclosed mortgage loans[105]. - The company may need to foreclose on loans, which can be a lengthy and costly process, potentially leading to losses if liquidation proceeds do not cover the cost basis[164]. Financing and Capital Structure - The company utilizes leverage to finance its assets, with no set minimum or maximum leverage requirements, allowing for flexibility in its investment strategy[46]. - The company may need to rely on additional equity issuances to meet capital and financing needs, which could be dilutive to stockholders[184]. - The company is currently party to short-term borrowings and may face difficulties in rolling these borrowings continuously, which could lead to asset disposals at depressed prices[180]. - The company bears the risk of losses on retained interests in securitizations, which could be less liquid than the underlying assets[188]. Derivative and Hedging Risks - The market value of the company's derivative contracts may decline, leading to margin calls and potential liquidity issues[182]. - Derivative instruments used for hedging may not be traded on regulated exchanges, exposing the company to risks and costs that could lead to material losses[201]. - Hedging transactions can limit potential gains if portfolio values increase and may result in significant losses if not managed correctly[198].

Financial Data and Key Metrics Changes - In Q4 2024, the company reported net income of $0.25 per share and adjusted distributable earnings (ADE) of $0.45 per share, an increase of $0.05 per share sequentially, comfortably covering quarterly dividends of $0.39 per share [7][19][44] - The adjusted loan credit portfolio increased by 5% to $3.42 billion, driven by net purchases of various loan types [24] - The total weighted average borrowing rate on recourse borrowings decreased by 56 basis points to 6.21% [25] Business Line Data and Key Metrics Changes - The Longbridge reverse mortgage segment performed excellently, contributing $0.30 per share to net income, with originations increasing 18% sequentially [19][21] - The credit portfolio generated $0.32 per share in net income, driven by higher net interest income and net gains from various investments [19][20] - The agency strategy reported a modest loss due to rising interest rates and market volatility [22] Market Data and Key Metrics Changes - The company noted an uptick in residential loan delinquencies, particularly in the non-QM portfolio, attributed to larger loan sizes and higher mortgage rates [38] - The commercial mortgage sector faced challenges, with three significant loans in default, but progress is being made towards resolution [36] Company Strategy and Development Direction - The company aims to continue expanding its loan portfolios and sourcing channels while strengthening its financing and balance sheet [6][14] - Strategic use of securitizations is viewed as a core competitive advantage, expected to drive strong earnings and cover dividends [14][58] - The focus remains on vertical integration and partnerships with mortgage originators to enhance loan quality and market share [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum heading into 2025, with expectations for continued growth in adjusted distributable earnings [43][44] - The company is cautious about rising delinquencies but believes most loans are well-secured and manageable [39][46] - Diversification across various mortgage sectors is emphasized as a key to mitigating risks and enhancing performance [46][48] Other Important Information - The company completed four securitization transactions in Q4, capitalizing on favorable market conditions [10][12] - The total economic return for Q4 was reported at 1.8% non-annualized [27] Q&A Session Summary Question: Can you talk about originator investments and appetite for non-QM given delinquencies? - Management discussed their strategy of making small investments in platforms with aligned credit quality and underwriting standards, noting that delinquencies have increased but are manageable [62][66] Question: Contextualize Longbridge's earnings expectations moving forward? - Management indicated a target of around $0.09 per share per quarter from Longbridge, with recent performance exceeding this expectation [68][70] Question: Why isn't the agency portfolio more attractive at current valuations? - The company prefers a credit-focused strategy, believing it offers better long-term returns compared to agency investments, which are seen as less capital-intensive [76][80] Question: Is there an expectation to buy loans out of the securitization trust due to delinquencies? - Management clarified that they expect to work through the loans in the securitization rather than buy them out, maintaining risk retention [82][84] Question: What is the outlook for net interest income going forward? - Management believes the current net interest income is a good run rate, supported by ongoing improvements in liability management [88][92] Question: Any impact from HUD staffing cuts on Longbridge? - Management acknowledged the uncertainty but emphasized that the proprietary business is driving earnings, and they will monitor the situation closely [121][123]

Financial Data and Key Metrics Changes - In Q4 2024, the company reported net income of $0.25 per share and adjusted distributable earnings (ADE) of $0.45 per share, which comfortably covered the quarterly dividend of $0.39 per share [7][19] - The ADE increased from $0.28 per share in Q1 2024 to $0.45 per share in Q4 2024, reflecting a 25% year-over-year growth in the credit portfolio [44] Business Line Data and Key Metrics Changes - The Longbridge reverse mortgage segment performed excellently, contributing $0.30 per share to net income, while the credit portfolio generated $0.32 per share [19] - The credit portfolio increased by 5% to $3.42 billion, driven by net purchases of closed-end seconds, HELOCs, commercial mortgage bridge loans, and non-agency RMBS [24] - The Longbridge portfolio decreased by 15% sequentially to $420 million due to the impact of proprietary reverse mortgage securitization [25] Market Data and Key Metrics Changes - The agency strategy generated a modest loss due to rising interest rates and volatility around the presidential election, impacting Agency RMBS performance [22] - The overall debt-to-equity ratio increased to 8.8:1 from 8.3:1, while the recourse debt-to-equity ratio remained unchanged at 1.8:1 [26] Company Strategy and Development Direction - The company aims to continue leveraging its vertical integration to grow its loan origination business and maintain a focus on credit investments rather than agency securities [30][79] - The strategic use of securitizations is viewed as a core competitive advantage, expected to drive strong earnings and support dividend coverage [14][58] Management's Comments on Operating Environment and Future Outlook - Management noted an uptick in residential loan delinquencies, particularly in the non-QM portfolio, but does not expect material losses due to strong underlying real estate security [39] - The company remains optimistic about the demand for proprietary reverse mortgage products and anticipates continued ADE growth to cover dividends moving forward [45] Other Important Information - The company completed four securitization transactions in Q4, capitalizing on favorable market conditions, which included two non-QM deals and a proprietary reverse mortgage securitization [10][12] - The total weighted average borrowing rate on recourse borrowings decreased by 56 basis points to 6.21% due to lower short-term interest rates and tighter financing spreads [25] Q&A Session Summary Question: Can you talk about some of the originator investments and the appetite for non-QM given the commentary around delinquencies? - Management indicated that they have been making small investments in platforms where they have established relationships and can help lower warehousing costs and improve underwriting processes [63][64] Question: Can you contextualize the earnings expectations for Longbridge? - Management suggested a long-term run rate target of approximately $0.09 per share per quarter for Longbridge, with Q4 exceeding this expectation [68][70] Question: Why isn't the agency portfolio more attractive at current valuations? - Management explained that while the agency sector has been good, they believe their capital can be better utilized in credit-focused investments that leverage their vertical integration [76][79] Question: Is there an expectation from investors to buy loans out of the securitization trust? - Management clarified that they expect to work out and resolve loans while they remain in the securitization, rather than buying them out [84] Question: What is the current run rate for net interest income? - Management indicated that the net interest income seen in Q4 is a good run rate moving forward, supported by ongoing improvements in liability management [91][92] Question: What is the impact of staffing cuts at HUD on Longbridge? - Management acknowledged the uncertainty but emphasized that their proprietary business has been driving earnings, and they will have to wait and see how regulatory changes unfold [121][123]

Earnings Conference Call February 28, 2025 Q4 2024 Q4 2024 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 pred ...

Financial Performance - Net income attributable to common stockholders was $22.4 million, or $0.25 per common share, with $25.3 million from the investment portfolio[6] - Net income attributable to common stockholders was $29,343 thousand for the three-month period ended December 31, 2024, compared to a loss of $4,006 thousand for the previous period, indicating a substantial turnaround[28] - Net income for the three-month period ended December 31, 2024, was $25,664,000, compared to $44,115,000 for the period ended September 30, 2024, representing a decrease of 41.8%[50] - Net income attributable to common stockholders for the three-month period was $22,392,000, compared to $16,175,000 in the previous quarter, reflecting a 38.5% increase[39] Earnings and Dividends - Adjusted distributable earnings increased by $0.05 per share sequentially to $0.45, covering the quarterly dividend of $0.39 per share[3] - Total adjusted distributable earnings for the three-month period ended December 31, 2024, were $47,444,000, compared to $47,398,000 for the previous period, showing a slight increase of 0.1%[50] - Adjusted distributable earnings attributable to common stockholders were $46,938,000 for the three-month period ended December 31, 2024, down from $47,193,000 in the prior period, a decrease of 0.5%[50] - Dividend yield was 11.7% based on the closing stock price of $13.33 per share on February 26, 2025[6] Asset and Liability Management - Total assets as of December 31, 2024, reached $16,317,028,000, up from $15,953,290,000 as of September 30, 2024, marking a 2.3% increase[41] - Total liabilities as of December 31, 2024, were $14,726,206,000, up from $14,327,641,000, indicating a 2.8% increase[41] - Total equity decreased to $1,590,822 thousand as of December 31, 2024, from $1,625,649 thousand on September 30, 2024, a decline of about 2.1%[24] - Cash and cash equivalents totaled $192.4 million as of December 31, 2024, alongside unencumbered assets of $619.8 million[6] Loan and Portfolio Growth - Closed-end second/HELOC mortgage, proprietary reverse mortgage, and commercial mortgage loan portfolios grew by 39% during the quarter, excluding securitization impacts[4] - New loan origination volume for the three-month period ended December 31, 2024, was $419,904 thousand, a significant increase from $354,740 thousand for the period ended September 30, 2024, marking a growth of approximately 18.4%[23] - Proprietary reverse mortgage loans increased to $728,959 thousand as of December 31, 2024, up from $597,093 thousand on September 30, 2024, representing a growth of approximately 22%[21] - Unsecuritized HECM loans rose to $140,709 thousand as of December 31, 2024, compared to $127,625 thousand on September 30, 2024, reflecting an increase of approximately 10.3%[21] Interest Income and Expenses - Net interest income for the three-month period ended December 31, 2024, was $38,130,000, an increase from $33,627,000 for the previous quarter, representing a 14.9% growth[39] - Interest expense totaled $68,846,000, resulting in a per share expense of $0.78[31] - The company reported interest income and other income of $108,014 thousand for the three-month period ended December 31, 2024, compared to $86,106 thousand for the previous period, an increase of about 25.5%[28] Debt Management - Recourse debt-to-equity ratio was 1.8:1 as of December 31, 2024, with an overall debt-to-equity ratio of 8.8:1 including all borrowings[6] - The overall debt-to-equity ratio increased to 8.9:1 from 8.5:1 during the quarter, indicating a rise in borrowings from consolidated proprietary reverse mortgage loan securitizations[27] - Total borrowings rose to $14,220,213 thousand as of December 31, 2024, compared to $13,828,974 thousand on September 30, 2024, reflecting an increase of about 2.8%[24] Market Performance - The long Agency RMBS portfolio decreased by 25% quarter over quarter to $296.7 million, primarily due to net sales[9] - The company reported a net unrealized gain of $54,783,000, contributing $0.62 per share[31] - The company reported realized losses of $11,876,000 for the three-month period ended December 31, 2024, compared to realized gains of $63,515,000 in the prior period[50] Conference and Future Outlook - The company will host a conference call on February 28, 2025, to discuss financial results for the quarter ended December 31, 2024[35]

I believe in fundamental analysis and disciplined market research. I have strong quant background with a Ph.D. (Chemical Engineering, University of California, Santa Barbara) in model predictive control and an MBA (Jones School of Business, Rice University). My primary focus is to identify 1) small cap companies with strong fundamentals and growth potential, 2) large cap companies going through temporary set-backs, and 3) stable companies with solid dividend yields and growth potential.Analyst’s Disclosure: ...

Ownership and Acquisitions - As of September 30, 2024, Ellington Financial Inc. had an ownership interest of approximately 99.3% in its Operating Partnership[454]. - 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[457]. Investment Portfolio - The investment portfolio includes a diverse array of financial assets such as residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), and collateralized loan obligations (CLOs)[458]. - Agency RMBS assets primarily consist of whole pool and partial pool pass-through certificates, guaranteed by U.S. government agencies[464]. - The company focuses on maintaining its qualification as a REIT and its exclusion from registration under the Investment Company Act[452]. - The U.S. consumer loan portfolio includes unsecured loans and secured auto loans, with ongoing purchases of newly originated and seasoned consumer loans[473]. - The company has consolidated Longbridge, which acquires reverse mortgage loans and pools them into HMBS, retaining servicing rights[486]. - The company actively participates in the market for residential non-performing loans (NPLs) and re-performing loans (RPLs), focusing on less-competitively bid mixed legacy pools[483]. Investment Strategies - The company employs strategies to capitalize on market opportunities, adjusting asset allocations based on credit and liquidity trends[460]. - The investment strategy includes opportunistic hedging of credit risk, interest rate risk, and foreign currency risk, depending on market conditions[460]. - The company aims to generate attractive, risk-adjusted total returns for stockholders through an opportunistic investment strategy[453]. Financial Performance - Net income attributable to common stockholders for the three-month period ended September 30, 2024, was $16.2 million, up from $6.6 million for the same period in 2023, driven by increases in total other income and net interest income[582]. - Interest income for the three-month period ended September 30, 2024, was $107.3 million, compared to $96.2 million for the same period in 2023, reflecting higher coupon payments and accrued interest[583]. - The company reported total other income of $135.4 million for the nine-month period ended September 30, 2024, with realized and unrealized gains on securities and loans contributing $120.3 million[619]. - Net income attributable to common stockholders for the nine-month period ended September 30, 2024, was $95.4 million, with a net income per common share of $1.12[619]. Borrowings and Debt Management - As of September 30, 2024, total outstanding borrowings under repos and other secured borrowings amounted to $4.7 billion, with approximately 7.3% or $346.2 million related to Agency RMBS holdings[542]. - The total recourse borrowings increased to $3.22 billion as of September 30, 2024, compared to $2.82 billion as of June 30, 2024[543]. - The overall debt-to-equity ratio based on total recourse and non-recourse borrowings, excluding U.S. Treasury securities, increased to 8.3:1 as of September 30, 2024, compared to 8.2:1 as of June 30, 2024[546]. - Unsecured borrowings totaled $297.7 million as of September 30, 2024, with senior notes maturing in April 2027 bearing an interest rate of 5.875%[541]. Interest Rates and Economic Indicators - The U.S. Federal Reserve reduced the federal funds rate by 50 basis points to a range of 4.75%–5.00% in September, marking the first rate cut in four years[501]. - The yield on the 2-year U.S. Treasury decreased by 111 basis points to 3.64%, while the 10-year U.S. Treasury yield declined by 62 basis points to 3.78% in the third quarter[502]. - The Freddie Mac survey 30-year mortgage rate decreased from 6.86% at the end of June to 6.08% on September 26th[502]. Asset Valuation and Performance Metrics - The total long credit portfolio, excluding non-retained tranches of consolidated securitization trusts, increased by 19% to $3.25 billion as of September 30, 2024, from $2.73 billion as of June 30, 2024[505]. - The net interest margin on the credit portfolio decreased to 2.64% from 2.76%[509]. - The fair value of the total commercial mortgage loans was $593,075,000, with performing loans valued at $506,534,000 and non-performing loans at $86,541,000[512]. - The total unpaid principal balance of residential mortgage loans was $3,720,774,000, with non-QM loans at $2,256,738,000 and residential transition loans at $1,174,062,000[517]. Operating Expenses and Management Fees - Total expenses for the three-month period ended September 30, 2024, were $50.9 million, reflecting an increase compared to the previous year[579]. - The gross base management fee for the three-month period ended September 30, 2024, was $6.1 million, up from $5.0 million in 2023, attributed to a larger capital base[602]. - Other investment related expenses increased to $15.7 million for the three-month period ended September 30, 2024, from $9.6 million in 2023, reflecting higher servicing fees and legal expenses[603]. Longbridge Segment Performance - Longbridge's net loss attributable to common stockholders was driven by net losses on interest rate hedges, partially offset by positive results in originations[536]. - New loan origination volume for Longbridge was $354.74 million for the three-month period ended September 30, 2024, up from $304.54 million in the previous quarter[538]. - Interest income from the Longbridge segment increased significantly to $14.6 million for the three-month period ended September 30, 2024, up from $5.2 million in 2023, driven by larger average holdings of proprietary reverse mortgage loans[591].

Ellington Financial, Inc. (NYSE:EFC) Q3 2024 Earnings Conference Call November 7, 2024 11:00 AM ET Company Participants Alaael-Deen Shilleh - Associate General Counsel and Secretary Larry Penn - Chief Executive Officer Mark Tecotzky - Co-Chief Investment Officer JR Herlihy - Chief Financial Officer Conference Call Participants Trevor Cranston - Citizens JMP Francesco Labetti - KBW Matthew Erdner - Jones Trading Eric Hagen - BTIG Matthew Howlett - B. Riley Operator Good morning, ladies and gentlemen, an ...

Financial Performance - Net income attributable to common stockholders for Q3 2024 was $16.2 million, or $0.19 per common share, with $44.0 million from the investment portfolio[1]. - Adjusted Distributable Earnings increased to $34.5 million, or $0.40 per common share, covering dividends[2]. - Net income attributable to common stockholders for the three-month period ended September 30, 2024, was $39,198,000, compared to $4,801,000 for the same period in 2023[24]. - The company reported a net income of $60,072,000 after accounting for preferred stock dividends and other expenses[25]. - Net income attributable to common stockholders was $67,996,000, resulting in a per share amount of $0.80[26]. - Total net income for the same period was $23,323,000, compared to $60,072,000 in the prior quarter, reflecting a decrease of approximately 61%[32]. - The net income (loss) for the same period was $23.323 million, a decrease from $60.072 million in the prior quarter, indicating a decline of about 61.2%[43]. Investment Portfolio - The investment portfolio expanded by 26%, driven by growth in non-QM loans, residential transition loans, and commercial mortgage bridge loans[3]. - Total interest income and other income for the investment portfolio was $104,348,000, with a per share amount of $1.22[25]. - The company’s investment portfolio generated a net income of $44.115 million for the three-month period ended September 30, 2024, down from $69.476 million in the previous quarter, a decrease of about 36.5%[43]. Assets and Liabilities - Total assets increased to $15,953,290,000 as of September 30, 2024, up from $15,092,653,000 at the end of the previous quarter, representing a growth of approximately 5.7%[34]. - Total liabilities increased to $14,327,641,000, up from $13,518,794,000 in the previous quarter, marking a rise of approximately 6%[34]. - Loans at fair value rose to $13,519,786,000, compared to $12,846,106,000 in the prior quarter, indicating an increase of about 5.2%[34]. Equity and Shares - The total equity increased to $1,625,649,000 as of September 30, 2024, from $1,573,859,000 on June 30, 2024[23]. - The weighted average shares of common stock outstanding were 88,039,000 as of September 30, 2024[24]. - The weighted average shares of common stock outstanding increased to 87,198,000 from 85,045,000 in the previous quarter[32]. - The book value per common share decreased to $13.66 from $13.92 in the previous quarter[35]. Dividends - The dividend yield was 13.1% based on the closing stock price of $11.95 per share on November 5, 2024[2]. - The company’s Board of Directors considers earnings, liquidity, financial condition, and REIT distribution requirements when setting dividends[41]. - The total dividends on preferred stock for the three-month period ended September 30, 2024, were $6.833 million, consistent with the previous quarter[44]. Loan Performance - The percentage of delinquent loans in the residential mortgage loan portfolio decreased, while the commercial mortgage loan portfolio saw an increase[9]. - The Longbridge segment reported $8,890,459,000 in HMBS assets as of September 30, 2024, compared to $8,926,658,000 on June 30, 2024[19]. - New loan origination volume for the Longbridge segment was $354,740,000 for the three-month period ended September 30, 2024, up from $304,538,000 for the period ended June 30, 2024[20]. Interest and Expenses - The net interest margin on the credit portfolio decreased to 2.64% from 2.76%[10]. - Interest expense totaled $63,123,000, indicating a significant cost associated with financing[25]. - Investment-related expenses were reported at $11,087,000, impacting overall profitability[25]. - The company incurred $5.418 million in non-capitalized transaction costs and other expense adjustments for the three-month period ended September 30, 2024[43]. Forward-Looking Statements - Forward-looking statements indicate potential risks including changes in interest rates and market conditions that could affect future performance[30]. Conference Call - The conference call to discuss financial results for the quarter ended September 30, 2024, is scheduled for November 7, 2024[29].