(EFC) ...

Dragon ClawsEllington Financial (EFC) is a mortgage REIT that invests in residential and commercial mortgages. The company also carries a portfolio of consumer loans. Over a year ago, I wrote about the attractive investment in Ellington’s Series A preferred shares (NYSE:EFC.PR.A). Today, I’m suggesting that investors consider switching from the Series A shares to the Series E preferred shares (NYSE:EFC.PR.E). Other than the company’s common shares, Ellington Financial has seven different income securiti ...

OLD GREENWICH, Conn.--(BUSINESS WIRE)--Ellington Financial Inc. (NYSE: EFC) (the "Company") today announced that its Board of Directors has declared the following: (i) a monthly dividend of $0.13 per share of common stock, payable on April 25, 2024 to common stockholders of record as of March 29, 2024; (ii) a quarterly dividend of $0.421875 per share on the Company's 6.750% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, payable on April 30, 2024 to Series A preferred stockholders of ...

Assets and Management - As of December 31, 2023, Ellington had approximately $10.3 billion in assets under management, with $7.2 billion attributed to the company and Ellington Residential Mortgage REIT[27]. - As of December 31, 2023, the majority of Ellington's recourse borrowings consisted of repurchase agreements, primarily collateralized by Agency RMBS and residential mortgage loans[45]. - As of December 31, 2023, Ellington managed approximately $8.7 billion in assets, including $3.1 billion in accounts that do not employ financial leverage[63]. - The company has a commitment to fund additional borrowing capacity of $1.9 billion for HECM loans as of December 31, 2023[198]. Business Strategy and Operations - The company completed the merger with Arlington Asset Investment Corp. on December 14, 2023, enhancing its capital base and investment portfolio[21]. - The company has two reportable segments: the Investment Portfolio Segment and the Longbridge Segment, following the acquisition of a controlling stake in Longbridge in October 2022[18]. - Longbridge is engaged in originating, purchasing, selling, and servicing Home Equity Conversion Mortgages (HECM) and proprietary reverse mortgage products[19]. - The company utilizes an opportunistic strategy to generate attractive, risk-adjusted returns across various asset classes, including mortgage-related and consumer-related assets[28]. - The company aims to maintain its qualification as a REIT and its exclusion from registration under the Investment Company Act, adapting its strategy to changing market conditions[29]. - The company targets underserved niche market segments for loans, capitalizing on reduced bank origination and ownership due to post-2008 regulations, creating better investment opportunities[33]. Risk Management - Ellington's risk management infrastructure includes a proprietary portfolio management system, "ELLiN," used across all departments for comprehensive risk assessment[40]. - The company employs a diverse range of hedging instruments and derivative contracts to manage risks while maintaining REIT qualification[35]. - The company believes its manager's extensive experience in fixed income securities and loans provides a steady flow of favorable investment opportunities[34]. - The investment and risk management committee oversees investment policies and portfolio compliance, ensuring alignment with the company's strategic goals[37]. Financial Performance and Fees - The base management fee is set at 1.50% per annum of the 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]. - The incentive fee calculation includes a "Hurdle Amount" based on a minimum of 9% or 3% plus the 10-year U.S. Treasury rate, impacting the financial performance metrics[58]. Regulatory Compliance - The company must monitor its compliance with the Investment Company Act to avoid being classified as an investment company, which would impose significant operational restrictions[79]. - The company is actively monitoring the regulatory landscape, particularly regarding the SEC's review of the Investment Company Act exclusions[78]. - Regulatory compliance is extensive, with Longbridge subject to various federal, state, and local regulations impacting mortgage loan origination and servicing[81]. - The company is impacted by the CFPB's evolving regulations, which affect mortgage servicing and origination practices[83]. Market Risks - The company faces competitive risks that may hinder its ability to achieve business goals, despite having access to industry expertise and strategic equity investments[71]. - Difficult conditions in the mortgage and residential and commercial real estate markets may adversely affect the value of the assets in which the company invests[101]. - The federal conservatorship of Fannie Mae and Freddie Mac could materially adversely affect the company's business, financial condition, and results of operations[102]. - The principal and interest payments on non-Agency RMBS and CRTs are not guaranteed, exposing the company to increased credit risk[101]. - Increases in interest rates could negatively affect the value of the company's assets and increase the risk of default[101]. - The company may face challenges in acquiring targeted assets due to changes in market conditions affecting issuance volumes[101]. - The company is subject to risks associated with third-party service providers, including mortgage servicers, which could disrupt its operations[99]. - The lack of liquidity in the company's assets may materially adversely affect its financial condition and ability to pay dividends[99]. Investment Risks - The company's investments in distressed debt and equity carry significant risk of loss, which may involve large costs to protect these investments[99]. - The company faces increased risks related to mortgage loans due to potential seller defaults on defective loans, which could lead to higher delinquency and default rates, adversely affecting investment returns[143]. - The company has invested in subordinated and lower-rated securities, which generally carry a higher risk of loss compared to senior securities, potentially impacting financial performance and dividend payments[144]. - The performance of non-Agency RMBS may be adversely affected by higher delinquency rates associated with less stringent underwriting guidelines[117]. - Changes in prepayment rates can adversely affect the performance of the company's assets, impacting profitability[122]. - The value of mortgage servicing rights (MSRs) declines with higher prepayment rates, adversely impacting expected future cash flows[127]. Economic and Financial Conditions - The company may encounter challenges in securing financing on favorable terms, which could adversely affect its operations and ability to pay dividends to stockholders[182]. - The company's lenders are primarily large global financial institutions, and any financial difficulties experienced by these lenders could impact the availability and cost of financing[183]. - The company is exposed to various risks associated with real estate assets, including economic downturns, changes in laws, and environmental liabilities, which could materially affect its financial condition[175]. - The Federal Reserve's interest rate hikes have raised the target range for the federal funds rate to 5.25%-5.50% as of January 31, 2024, creating uncertainty in future interest rate movements[151]. Management and Governance - The management agreement with the Manager has a current term expiring on December 31, 2024, with automatic one-year renewals unless a non-renewal notice is given 180 days prior[60]. - The company does not maintain an office or employ personnel directly, relying on the Manager for operational resources and incurring all direct operating expenses[59]. - The management agreement allows for cross transactions, which may create potential conflicts of interest, requiring prior approval from independent directors[65]. - The company has not adopted a policy prohibiting its directors and officers from having a pecuniary interest in transactions involving the company, but it has a conflicts of interest policy in place[68].

Ellington Financial, Inc. (NYSE:EFC) Q4 2023 Earnings Conference Call February 27, 2024 11:00 AM ET Company Participants Alaael-Deen Shilleh - Associate General Counsel and Secretary Laurence Penn - President and CEO Mark Tecotzky - Co-Chief Investment Officer JR Herlihy - CFO Conference Call Participants Crispin Love - Piper Sandler Trevor Cranston - JMP Securities Bose George - Keefe, Bruyette and Woods Lee Cooperman - Omega Family Office Matthew Howlett - B. Riley Securities Operator Good morning, ladies ...

The residential transition loan portfolio expanded, as net purchases exceeded paydowns. 7 85% 9% 3% 1% 1% $964.3 mm 30-Year Fixed 20-Year Fixed 15-Year Fixed RM Fixed ARMs Fixed IOs 1% Longbridge Portfolio D: Other • Upon securitization, the HECMs remain on our balance sheet under GAAP, and Longbridge retains the mortgage servicing rights associated with the HMBS. • In addition, Longbridge originates proprietary reverse mortgage loans, which are not insured by the FHA, and has typically retained the associa ...

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) mill ...

Exhibit 99.1 Ellington Financial Inc. Reports Fourth Quarter 2023 Results OLD GREENWICH, Connecticut—February 26, 2024 Ellington Financial Inc. (NYSE: EFC) ("we," "us," or "our") today reported financial results for the quarter ended December 31, 2023. Highlights 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 portf ...

OLD GREENWICH, Conn.--(BUSINESS WIRE)--Ellington Financial Inc. (NYSE: EFC) (the "Company") today announced that it will release financial results for the quarter ended December 31, 2023 after market close on Monday, February 26, 2024. The Company will host a conference call to discuss its financial results at 11:00 a.m. Eastern Time on Tuesday, February 27, 2024. To participate in the event by telephone, please dial (800) 225-9448 at least 10 minutes prior to the start time and reference the conference cod ...

OLD GREENWICH, Conn.--(BUSINESS WIRE)--Ellington Financial Inc. (NYSE: EFC) (the "Company") today announced that its Board of Directors has declared a monthly dividend of $0.15 per share of common stock, payable on March 25, 2024 to stockholders of record as of February 29, 2024. Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-lo ...