Financial Data and Key Metrics Changes - The economic book value decreased by 1% to $13.69 per share, while GAAP book value also fell by 1% to $13.12 per share [14] - Distributable earnings (DE) for the quarter were $0.24 per share, down from $0.29 per share in the previous quarter, primarily due to credit losses [17] - GAAP earnings were $33.2 million or $0.22 per basic common share, driven by an increase in net interest income to $61.3 million [14][15] Business Line Data and Key Metrics Changes - The company sourced $876 million in loans and securities, including $500 million in non-QM loans and $217 million in business purpose loans [12][20] - The delinquency rate for loans over 60 days decreased from 7.5% to 7.3% [15][24] - Lima One originated $217 million in business purpose loans, with an increase in mortgage banking income from $5.4 million to $6.1 million [23] Market Data and Key Metrics Changes - The market for securitized mortgage credit assets continues to deepen, with increased liquidity and strong investor appetite [6][9] - Mortgage credit spreads widened in April but retraced to levels seen at the end of Q1 by the end of the second quarter [6][22] - The company completed its eighteenth non-QM securitization in May, selling $291 million of bonds at an average coupon of 5.76% [21] Company Strategy and Development Direction - The company aims to continue focusing on non-QM loans, business purpose loans, and agency securities, with plans to grow the business purpose loan originations [20][23] - The management is optimistic about the economic return potential of the portfolio, indicating that the economic earnings power is closer to a 10% dividend yield [29] - The company is actively resolving non-performing loans and expects to utilize additional loan sales to accelerate the resolution of underperforming assets [16] Management's Comments on Operating Environment and Future Outlook - The management noted that the economic and macro environments appear clearer as the year progresses, with resilient growth despite slower than expected rates [8][9] - There is a consensus for two rate cuts later this year, which is favorable for mortgage REITs [9] - The management expressed confidence in the current earnings power of the portfolio and the sustainability of the common dividend [18] Other Important Information - The company expects to lower its G&A expenses by 7% to 10% per year from 2024 levels due to ongoing expense reduction initiatives [18] - Subsequent to the quarter end, the economic book value is estimated to have increased by approximately 1% to 2% [19] Q&A Session Summary Question: Economic return for the portfolio - Management discussed the economic return of the portfolio and indicated that the economic earnings power is much closer to a 10% dividend yield, with potential upside as capital is redeployed from troubled loans [28][29] Question: New loan officers at Lima One - The new hires are focused on the West and Midwest, with expectations for aggressive growth in the latter half of the year as they ramp up [40][41] Question: Capital allocation trends - Management indicated that they would continue to deploy capital across non-QM, HC, and business purpose loans, with a preference for increasing business purpose loan originations [33][49] Question: Distribution potential for new transitional loans - Management noted that they have been selling rental loans and expect to grow originations, with a balance between securitization financing and loan sales [56] Question: Execution risk for developers - Management stated that they are not seeing material pressure on rental income and exit prices, tracking these metrics month to month [65][66] Question: Relative risk of loan vintages - Management indicated that the 2023 vintage for multifamily loans was tougher, but overall LTVs are low, minimizing concerns about losses [67] Question: Callability of non-QM portfolio - Management explained that lower interest rates could lead to more callable deals, but the impact would be marginal due to offsetting swaps [70][72]

Financial Performance - GAAP Book Value was $1312 per common share and Economic Book Value was $1369 per common share[4] - GAAP Net Income was $022 per common share and Distributable Earnings was $024 per common share[4] - Quarterly Dividend was $036 per common share, resulting in a Dividend Yield of 158%[4] Portfolio Activity - Acquired $876 million of residential mortgage loans and securities, growing the investment portfolio to $108 billion[7] - Purchased $503 million of Non-QM loans[4, 8] - Lima One originated $217 million of new business purpose loans (BPLs)[4, 8] - Added $131 million of Agency MBS[4, 8] Liability Management - Overall leverage rose to 52x, while recourse leverage remained 18x[9] - Issued the 18th Non-QM securitization in May, collateralized by $318 million UPB of loans[11, 23] - Effective cost of funds remained stable at 468%[11] Lima One Highlights - Lima One originated $217 million in total origination volume, with an average coupon of 102% for Q2 originations[4, 12] - New Construction Loans were $72 million, New Rehab Loans were $63 million, and New Bridge Loans were $32 million[12] - Rental Loans Originated were $50 million, and Rental Loans Sold were $38 million, generating $11 million in Gain-on-sale Income with an average coupon of 75%[12] Loan Portfolio Credit Metrics - Non-QM Loans UPB is $488 billion, with an average loan balance of $514K and an LTV of 59%[6, 21] - Single-family Rental Loans UPB is $132 billion, with an average loan balance of $226K and an LTV of 60%[6, 21] - Single-family Transitional Loans UPB is $886 million, with an average loan balance of $540K and an LTV of 68%[6, 21]

Group 1 - MFA Financial reported quarterly earnings of $0.24 per share, missing the Zacks Consensus Estimate of $0.28 per share, and down from $0.44 per share a year ago, representing an earnings surprise of -14.29% [1] - The company posted revenues of $61.28 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.41%, compared to year-ago revenues of $53.49 million [2] - MFA Financial shares have lost about 10% since the beginning of the year, while the S&P 500 has gained 7.1% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.30 on revenues of $57.44 million, and for the current fiscal year, it is $1.18 on revenues of $234.18 million [7] - The Zacks Industry Rank indicates that the REIT and Equity Trust sector is currently in the bottom 37% of over 250 Zacks industries, suggesting potential underperformance compared to the top 50% of ranked industries [8] Group 3 - The estimate revisions trend for MFA Financial was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - Another stock in the same industry, Ready Capital, is expected to report a quarterly loss of $0.01 per share, reflecting a year-over-year change of -114.3% [9]

Core Insights - David A. Johnson is the founder and principal of Endurance Capital Management, specializing in various investment vehicles including stocks, bonds, options, ETFs, REITs, real estate, closed-end funds, hedge funds, and private credit [1] Group 1 - David A. Johnson has over 30 years of experience in investing and holds a Master of Science (MS) Degree in Finance with a concentration in Investment Analysis from Boston University [1] - He also possesses a Certificate in Financial Planning and an MBA from Fordham University [1]

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Total assets reached $11.52 billion by March 31, 2025, with Q1 2025 net income increasing to $41.2 million and basic EPS to $0.32 Consolidated Balance Sheet Highlights (Unaudited) | (in billions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$11.52** | **$11.41** | | Residential whole loans, net | $8.78 | $8.81 | | Securities, at fair value | $1.79 | $1.54 | | **Total Liabilities** | **$9.68** | **$9.57** | | Financing agreements | $9.37 | $9.16 | | **Total Stockholders' Equity** | **$1.84** | **$1.84** | Consolidated Statements of Operations Highlights (Unaudited) | (in millions, except per share) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Interest Income | $57.54 | $47.81 | | Other Income/(Loss), net | $24.51 | $22.40 | | **Net Income** | **$41.18** | **$23.21** | | Net Income Available to Common Stock | $32.96 | $15.00 | | **Basic Earnings per Common Share** | **$0.32** | **$0.14** | | **Diluted Earnings per Common Share** | **$0.31** | **$0.14** | Consolidated Statements of Cash Flows Highlights (Unaudited) | (in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | $(14.56) | $53.47 | | Net cash provided by/(used in) investing activities | $(251.55) | $(91.40) | | Net cash provided by/(used in) financing activities | $138.09 | $78.90 | | **Net increase/(decrease) in cash, cash equivalents and restricted cash** | **$(128.02)** | **$40.96** | [Notes to the Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, fair value elections, and VIE consolidation, highlighting the $8.8 billion residential loan portfolio and $5.9 billion securitized debt - The company has elected to be treated as a REIT and must distribute at least **90%** of its annual REIT taxable income to stockholders. Certain subsidiaries are treated as taxable REIT subsidiaries (TRS)[22](index=22&type=chunk) - Since the second quarter of 2021, the company has elected the fair value option for all originated or acquired residential whole loans. Loans acquired before this period and not elected for fair value are held at carrying value[26](index=26&type=chunk) Residential Whole Loan Portfolio by Type (March 31, 2025) | Loan Type | Carrying/Fair Value (in billions) | | :--- | :--- | | Non-QM loans | $4.54 | | Single-family rental loans | $1.31 | | Legacy RPL/NPL loans | $1.06 | | Single-family transitional loans | $0.99 | | Multifamily transitional loans | $0.84 | | **Total** | **$8.78** | Financing Agreements Breakdown (March 31, 2025) | Financing Type | Carrying/Fair Value (in billions) | | :--- | :--- | | Securitized debt | $5.87 | | Agreements with mark-to-market collateral provisions | $2.89 | | Agreements with non-mark-to-market collateral provisions | $0.42 | | Senior Notes | $0.18 | | **Total** | **$9.37** | Segment Net Income (Three Months Ended March 31, 2025) | Segment | Net Income/(Loss) (in millions) | | :--- | :--- | | Mortgage-Related Assets | $56.18 | | Lima One | $5.38 | | Corporate | $(20.39) | | **Total Net Income** | **$41.18** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=63&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 performance includes GAAP EPS of $0.32, Distributable Earnings of $0.29, $875 million in new assets, and a dividend increase to $0.36 - The company's principal business objective is to deliver shareholder value through distributable income and asset performance linked to residential mortgage credit fundamentals[251](index=251&type=chunk) - In Q1 2025, the company added approximately **$875 million** of target assets, including **$383 million** of Non-QM loans, **$223 million** of Business purpose loans, and **$268 million** of Agency MBS[262](index=262&type=chunk) - The dividend on common stock was increased from **$0.35** to **$0.36** per share during the quarter, reflecting the Board's confidence in the portfolio's earnings power[263](index=263&type=chunk) Q1 2025 Performance Summary | Metric | Value | | :--- | :--- | | GAAP EPS (basic) | $0.32 | | Distributable Earnings per share (non-GAAP) | $0.29 | | GAAP Book Value per share | $13.28 | | Economic Book Value per share (non-GAAP) | $13.84 | Net Interest Spread and Margin (Including Swaps) | Quarter Ended | Net Interest Spread | Net Interest Margin | | :--- | :--- | :--- | | March 31, 2025 | 1.84% | 2.63% | | December 31, 2024 | 1.99% | 2.76% | | March 31, 2024 | 2.06% | 2.88% | [Reconciliation of GAAP and Non-GAAP Financial Measures](index=86&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Financial%20Measures) Reconciliation details non-GAAP Distributable Earnings ($0.29 per share) and Economic Book Value ($13.84 per share), offering supplemental financial insights - Distributable earnings is a non-GAAP measure that adjusts GAAP net income by removing unrealized gains/losses on investments, debt, and hedges, as well as certain non-cash expenses and one-time securitization costs[351](index=351&type=chunk) - Economic book value is a non-GAAP measure that adjusts GAAP book value by marking the portfolios of residential whole loans and securitized debt held at carrying value to their respective fair values[356](index=356&type=chunk) Reconciliation to Distributable Earnings (Q1 2025) | (in millions, except per share) | Amount | | :--- | :--- | | GAAP Net income used in basic EPS | $32.75 | | Total adjustments | $(2.18) | | **Distributable earnings** | **$30.58** | | GAAP earnings per basic common share | $0.32 | | **Distributable earnings per basic common share** | **$0.29** | Reconciliation to Economic Book Value (March 31, 2025) | (in millions, except per share) | Amount | | :--- | :--- | | GAAP Stockholders' Equity for book value per common share | $1,363.4 | | Fair value adjustments (Loans & Debt) | $56.8 | | **Economic book value** | **$1,420.2** | | GAAP book value per common share | $13.28 | | **Economic book value per common share** | **$13.84** | [Quantitative and Qualitative Disclosures about Market Risk](index=92&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to interest rate, credit, liquidity, and prepayment risks, managed through derivatives and underwriting, with interest rate sensitivity detailed - The company is exposed to interest rate risk as borrowing costs on financing agreements typically change more quickly than yields on its assets. Swaps are used to mitigate this risk[381](index=381&type=chunk) Interest Rate Sensitivity Analysis (Shock Table) as of March 31, 2025 | Change in Interest Rates | Change in Estimated Net Portfolio Value ($ in millions) | Percentage Change in Total Stockholders' Equity | | :--- | :--- | :--- | | +100 Basis Point Increase | $(147.49) | (8.02)% | | +50 Basis Point Increase | $(64.93) | (3.53)% | | -50 Basis Point Decrease | $47.29 | 2.57% | | -100 Basis Point Decrease | $76.94 | 4.19% | - Credit risk is present in the residential whole loan portfolio. It is managed through underwriting, low LTV ratios, and acquiring distressed loans at significant discounts[394](index=394&type=chunk)[395](index=395&type=chunk) - Liquidity risk stems from financing long-maturity assets with shorter-term borrowings and potential margin calls. As of March 31, 2025, the company had **$253.7 million** in cash and cash equivalents, plus **$156.0 million** in unencumbered residential whole loans and Agency MBS[405](index=405&type=chunk)[406](index=406&type=chunk) [Controls and Procedures](index=97&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during Q1 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[410](index=410&type=chunk) - No material changes in the company's internal control over financial reporting occurred during the quarter ended March 31, 2025[411](index=411&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=97&type=section&id=Item%201.%20Legal%20Proceedings) There are no material pending legal proceedings involving the company or its assets - There are no material pending legal proceedings[413](index=413&type=chunk) [Risk Factors](index=97&type=section&id=Item%201A.%20Risk%20Factors) No material changes from the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - There are no material changes from the risk factors set forth in the 2024 Form 10-K[414](index=414&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=97&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A $200 million stock repurchase program was authorized, with no shares repurchased in Q1 2025, but shares were withheld for employee equity tax obligations - A **$200 million** stock repurchase program was authorized on February 29, 2024, and remains fully available as of March 31, 2025[415](index=415&type=chunk)[417](index=417&type=chunk) - No shares were repurchased under the publicly announced program in Q1 2025. However, **482,079 shares** were withheld to satisfy tax obligations from employee equity plan settlements[418](index=418&type=chunk)[419](index=419&type=chunk) [Defaults Upon Senior Securities](index=98&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities - None[421](index=421&type=chunk) [Mine Safety Disclosures](index=98&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - None[422](index=422&type=chunk) [Other Information](index=98&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[423](index=423&type=chunk) [Exhibits](index=98&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed, including CEO/CFO certifications and Interactive Data Files (iXBRL) - The exhibits filed include CEO/CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act and iXBRL data files[428](index=428&type=chunk)

Financial Data and Key Metrics Changes - For the first quarter, the company generated GAAP earnings of $41.2 million or $0.32 per basic common share, driven by growth in net interest income to $57.5 million and modest net mark to market gains [12][13] - GAAP book value was $13.28 per share and economic book value was $13.84 per share, each down less than 1% since December [12][16] - Distributable earnings for the quarter were $30.5 million or $0.29 per basic common share, down from $0.39 in the fourth quarter [15] Business Line Data and Key Metrics Changes - Lima One contributed $5.4 million of mortgage banking income for the quarter, a decline from $8.5 million in the fourth quarter, driven by lower origination volumes and a decline in gains on sales of single-family rental loans [13][21] - The company sourced $875 million of loans and securities, growing the portfolio to $10.7 billion from $10.5 billion at year-end [17] - The company issued its seventeenth non-QM securitization in March, selling $283 million of bonds at an average coupon of 5.58% [18] Market Data and Key Metrics Changes - Fixed income markets were generally constructive throughout the first quarter, with the ten-year yield closing the quarter at 4.2% [6] - Credit spreads tightened somewhat over January and February but widened modestly in March as the market anticipated trade policy announcements [7] - The company experienced total margin calls of just under $20 million, satisfied with $18.5 million of cash and $1.3 million of unpledged agency bonds [10] Company Strategy and Development Direction - The company emphasized its investment strategy, risk management, and financing rigor to weather market volatility [9][11] - The focus remains on three strategies: Non-QM, BPL, and Agency MBS, with plans to continue growing the Agency MBS segment as long as spreads remain attractive [17][20] - The company expects to see ample opportunities to add target assets at mid to high teen ROEs, which are seen as a proxy for current earnings power [14] Management's Comments on Operating Environment and Future Outlook - Management noted that increased uncertainty and volatility are not favorable for fixed income, particularly for mortgages, but highlighted the benefits of the company's strategic emphasis on securitization and diversification [9][10] - The company anticipates that distributable earnings will be increasingly volatile and less indicative of current earnings power over the next several quarters due to short-term headwinds [15][16] - Management estimates that economic book value is down approximately 2% to 4% since the end of the first quarter, primarily due to wider spreads [16] Other Important Information - The company hired nine loan officers in Q1 and seven so far in Q2 to improve volume growth at Lima One [22] - Delinquency rates for the entire loan portfolio remained stable at 7.5%, with some increases in specific segments due to repayments outpacing origination volume [22][23] Q&A Session Summary Question: Impact from the swap and runoff - The impact for the second quarter is expected to be about $0.02 in terms of Q1 versus Q2 impact [25] Question: Quantifying loan resolutions - Timing for resolutions is difficult to predict, but the majority of the multifamily transitional book is in foreclosure [26][27] Question: Returns breakdown between agencies and other asset classes - Mid to high teens returns are achievable in both agencies and non-QM, with BPL potentially above 20% [28][29] Question: Loan resolutions relative to marks - Resolutions have generally occurred at or near the mark, with comfort in current valuations [33][34] Question: Focus on new BPL originations - The focus remains on ground-up bridge and fix-and-flip transactions, with opportunities in ground-up projects [36] Question: Changes in book value in the second quarter - Economic book value is expected to be down 2% to 4% net of dividend accrual [40][42] Question: Number of approved loan sellers for NQM - The number of approved loan sellers varies from four to eight, with deeper relationships with fewer counterparties [43] Question: Demand for loan products and competitive environment - Strong demand from insurance companies remains, with no significant shakeout in the competitive environment [51][52] Question: Convexity risk in the portfolio - Convexity risk is driven by both the agency MBS and non-QM portfolios, with a conservative approach to calculations [59][60] Question: Nature of defaults in the Lima One portfolio - Defaults are driven by various factors, including high interest expenses and project delays, but tariffs are not expected to have a material impact [61][63]

Financial Data and Key Metrics Changes - For the first quarter of 2025, the company reported GAAP earnings of $41.2 million or $0.32 per basic common share, driven by growth in net interest income to $57.5 million and modest net mark-to-market gains [10][11] - Economic book value was down 0.6% to $13.84 per share, while GAAP book value was also down less than 1% [10][11] - Distributable earnings for the quarter were $30.5 million or $0.29 per basic common share, down from $0.39 in the fourth quarter [12][13] Business Line Data and Key Metrics Changes - Lima One contributed $5.4 million of mortgage banking income for the quarter, a decline from $8.5 million in the fourth quarter, attributed to lower origination volumes and a decrease in sales of single-family rental loans [11][19] - The company sourced $875 million of loans and securities, growing the investment portfolio to $10.7 billion from $10.5 billion at year-end [15] - Non-QM loans sourced during the quarter totaled $383 million with an average coupon of 7.8% and a weighted average LTV of 65% [16] Market Data and Key Metrics Changes - Fixed income markets were generally constructive throughout the first quarter, with the ten-year yield closing at 4.2% [5] - Credit spreads tightened in January and February but widened modestly in March due to anticipated trade policy announcements [6] - The company experienced total margin calls of just under $20 million, satisfied with $18.5 million in cash and $1.3 million in unpledged agency bonds [8] Company Strategy and Development Direction - The company emphasized its investment strategy, risk management, and financing rigor to navigate market volatility [8] - The focus remains on three strategies: Non-QM, Business Purpose Loans (BPL), and Agency MBS, with plans to continue growing the Agency MBS segment as long as spreads remain attractive [15][18] - The company expects to see ample opportunities to add target assets at mid to high teen ROEs, indicating confidence in long-term earnings power [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainty and volatility in the market, particularly affecting fixed income and mortgage sectors [8] - The company anticipates short-term increases in realized credit losses as it works through challenged assets, but believes these headwinds are temporary [12][13] - Economic book value is estimated to be down approximately 2% to 4% since the end of the first quarter, primarily due to wider spreads [14] Other Important Information - The company declared an increased dividend of $0.36 per common share for the first quarter, reflecting confidence in the portfolio's earnings power [11] - The company issued its seventeenth non-QM securitization in early March, selling $283 million of bonds at an average coupon of 5.58% [16] Q&A Session Summary Question: Impact from the swap and runoff - The impact for the second quarter is expected to be about $0.02 in terms of Q1 versus Q2 impact due to remaining runoff [24] Question: Quantifying loan resolutions - Timing for loan resolutions is difficult to predict, but the majority of credit discounts are expected to flush out over the next year [25][26] Question: Returns breakdown between asset classes - Mid to high teens returns are achievable in both agencies and non-QM, with BPL potentially above 20% [27] Question: Loan resolutions relative to marks - Resolutions have generally occurred at or near the mark, with comfort in the current valuations [30][31] Question: Focus on new BPL originations - The focus remains on ground-up bridge and fix-and-flip projects, with opportunities in the current market [34] Question: Changes in book value - Economic book value is expected to be down 2% to 4% net of dividend accrual [38][40] Question: Number of approved loan sellers - The number of approved loan sellers varies from four to eight, with deeper relationships with fewer counterparties [42] Question: Securitization pricing in the current market - Recent deals have priced between 160 and 170, indicating strong demand despite wider spreads [46] Question: Demand for loan products and competitive environment - Demand from insurance companies remains strong, and there has not been a significant shakeout in the competitive environment [51][52]

Financial Performance - The company reported a total economic return of 1.9% for Q1 2025[7] - Distributable earnings were $0.29 per common share[7] - The company's economic book value was $13.84 per common share[7] - The company increased its quarterly dividend to $0.36 per share[7, 9] Investment Activity - The company acquired $383 million of Non-QM loans and $268 million of Agency MBS[8] - The company's investment portfolio grew by $225 million to $10.7 billion[13] - The average coupon on all loans acquired in Q1 2025 was 8.7%[13] Portfolio Metrics - Non-QM Loans: Portfolio grew to $4.6 billion UPB, with an average LTV of 65% and an average coupon of 7.8%[28] - Single-Family Rental Loans: Portfolio remained stable at $1.4 billion UPB, with a delinquency rate of 4.0%[33, 34] - Single-Family Transitional Loans: Portfolio declined to $1 billion UPB, with a delinquency rate of 11.7%[38, 39]

Core Viewpoint - MFA Financial (MFA) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Recent Performance and Projections - MFA Financial is projected to earn $1.64 per share for the fiscal year ending December 2025, representing a year-over-year increase of 4.5% [8]. - Over the past three months, the Zacks Consensus Estimate for MFA Financial has increased by 4%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating [9][10]. - The upgrade of MFA Financial to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - MFA Financial, Inc. (NYSE: MFA) is rated as a Hold for income-focused investors interested in mortgage real estate investment trusts (mREITs) [1] Group 1 - The analysis is influenced by various factors, including the company's performance and market conditions [1] - David A. Johnson, the founder of Endurance Capital Management, has over 30 years of investment experience and holds advanced degrees in finance and business administration [1]