Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) MFA Financial reported a net income of $277.5 million for the nine months ended September 30, 2019, with total assets increasing to $13.1 billion driven by residential whole loans Financial Indicator | Financial Indicator | Sep 30, 2019 (Unaudited) | Dec 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Residential mortgage securities | $4,589,554 | $6,509,333 | | Residential whole loans, at carrying value | $4,969,414 | $3,016,715 | | Residential whole loans, at fair value | $1,453,169 | $1,665,978 | | Cash and cash equivalents | $154,193 | $51,965 | | Total Assets | **$13,104,821** | **$12,420,327** | | **Liabilities & Equity** | | | | Repurchase agreements | $8,571,422 | $7,879,087 | | Total Liabilities | $9,701,395 | $9,004,226 | | Total Stockholders' Equity | $3,403,426 | $3,416,101 | | Total Liabilities and Stockholders' Equity | **$13,104,821** | **$12,420,327** | Income Statement (In Thousands, Except Per Share) | (In Thousands, Except Per Share) | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $56,898 | $58,554 | $178,715 | $161,689 | | Other Income, net | $62,429 | $48,359 | $170,460 | $137,025 | | **Net Income** | **$95,599** | **$87,132** | **$277,496** | **$240,922** | | Net Income Available to Common Stock | $91,849 | $83,382 | $266,246 | $229,672 | | **Basic EPS** | **$0.20** | **$0.19** | **$0.59** | **$0.56** | | **Diluted EPS** | **$0.20** | **$0.19** | **$0.58** | **$0.56** | Cash Flow (In Thousands) | (In Thousands) | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $153,596 | $90,250 | | Net cash used in investing activities | ($564,347) | ($1,613,054) | | Net cash provided by financing activities | $515,233 | $1,170,415 | | **Net increase/(decrease) in cash** | **$104,482** | **($352,389)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=57&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MFA continued its residential mortgage asset investment strategy in Q3 2019, with net income increasing to $91.8 million despite net interest spread compression, maintaining a stable GAAP book value - As of September 30, 2019, total assets were approximately **$13.1 billion**, with the portfolio composed of **49% residential whole loans** ($6.4 billion), **35% residential mortgage securities** ($4.6 billion), and **9% MSR-related assets** ($1.2 billion)[291](index=291&type=chunk) - In Q3 2019, the company expanded loan initiatives, acquiring **$918 million** in Purchased Performing Loans and contributing **$100 million** to loan origination partners[302](index=302&type=chunk)[304](index=304&type=chunk) - GAAP book value per common share was **$7.09** as of September 30, 2019, with Economic book value at **$7.41** per share[310](index=310&type=chunk) - The company's debt-to-equity multiple was **2.8 times** at September 30, 2019, with access to over **$234.7 million** in liquidity[311](index=311&type=chunk) [Results of Operations](index=73&type=section&id=Results%20of%20Operations) Net income available to common stock increased to $91.8 million in Q3 2019, while net interest spread compressed to 1.82% due to higher borrowing costs Income Metrics (In Thousands) | (In Thousands) | Q3 2019 | Q3 2018 | | :--- | :--- | :--- | | Net Income to Common Stockholders | $91,569 | $83,141 | | Basic EPS | $0.20 | $0.19 | | Core Earnings | $89,412 | $87,684 | | Core Earnings per Share | $0.20 | $0.21 | Net Interest Metrics | Metric | Q3 2019 | Q3 2018 | | :--- | :--- | :--- | | Net Interest Spread | 1.82% | 2.41% | | Net Interest Margin | 2.19% | 2.82% | - The decrease in Q3 net interest spread was primarily due to increased funding costs from higher average borrowings and Federal Reserve rate increases[312](index=312&type=chunk) - For the nine months ended September 30, 2019, net interest income increased by **$17.0 million (10.5%)** to **$178.7 million**, primarily from residential whole loans and MSR-related assets[410](index=410&type=chunk) [Asset Portfolio Details](index=62&type=section&id=Information%20About%20Our%20Assets) As of September 30, 2019, MFA's $13.0 billion asset portfolio was primarily composed of residential whole loans, financed mainly through repurchase agreements with a 2.8x debt-to-net equity ratio Asset Class Details (Millions) | Asset Class | Fair Value/Carrying Value (Millions) | Net Equity Allocated (Millions) | Debt/Net Equity Ratio | | :--- | :--- | :--- | :--- | | Agency MBS | $1,814 | $138 | 12.1x | | Legacy Non-Agency MBS | $1,570 | $338 | 3.6x | | RPL/NPL MBS | $828 | $185 | 3.5x | | Residential Whole Loans, at Carrying Value | $4,969 | $1,724 | 1.9x | | Residential Whole Loans, at Fair Value | $1,453 | $307 | 3.7x | | MSR Related Assets | $1,164 | $246 | 3.7x | | **Total** | **$12,961** | **$3,403** | **2.8x** | - Residential Whole Loans at carrying value include **$4.3 billion** in Purchased Performing Loans and **$718.2 million** in Purchased Credit Impaired Loans[306](index=306&type=chunk)[318](index=318&type=chunk) - The Legacy Non-Agency MBS portfolio included a **$462.1 million** purchase discount designated as Credit Reserve and OTTI[337](index=337&type=chunk)[339](index=339&type=chunk) [Liquidity and Capital Resources](index=88&type=section&id=Liquidity%20and%20Capital%20Resources) MFA's liquidity sources exceeded $234.7 million as of September 30, 2019, primarily from cash and unpledged assets, with a debt-to-equity ratio of 2.8x, relying on diverse repurchase agreements - As of September 30, 2019, the company had access to over **$234.7 million** in liquidity, including **$154.2 million** in cash and equivalents, excluding **$1.1 billion** of unencumbered residential whole loans[456](index=456&type=chunk) - The debt-to-equity multiple increased to **2.8x** at September 30, 2019, with total borrowings under repurchase agreements at **$8.6 billion**[459](index=459&type=chunk) Collateral Haircuts | Collateral Type | Weighted Average Haircut | | :--- | :--- | | Agency MBS | 4.42% | | Legacy Non-Agency MBS | 20.57% | | RPL/NPL MBS | 21.89% | | CRT securities | 19.25% | | Residential whole loans | 14.85% | | MSR-related assets | 21.00% | - During the nine months ended September 30, 2019, the company paid **$271.0 million** in common stock dividends and **$11.3 million** in preferred stock dividends[464](index=464&type=chunk) [Non-GAAP Financial Measures](index=86&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Financial%20Measures) MFA presents non-GAAP Core Earnings and Economic Book Value, with Q3 2019 Core Earnings at $89.4 million and Economic Book Value at $7.41 per share as of September 30, 2019 EPS Comparison (per share) | (per share) | Q3 2019 | Q3 2018 | | :--- | :--- | :--- | | GAAP EPS | $0.20 | $0.19 | | Core Earnings Per Share | $0.20 | $0.21 | Book Value Comparison (per share) | (per share) | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | GAAP Book Value | $7.09 | $7.15 | | Economic Book Value | $7.41 | $7.35 | - Core Earnings are utilized by management for portfolio performance evaluation, dividend determination, and capital allocation[440](index=440&type=chunk) - Economic Book Value provides investors with a measure reflecting fair value changes for all residential mortgage investments, irrespective of GAAP accounting[443](index=443&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=92&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) MFA Financial manages interest rate, credit, and liquidity risks, maintaining a low net effective duration of 1.14 and mitigating credit risk through portfolio diversification and discounts Interest Rate Sensitivity | Change in Interest Rates | % Change in Net Interest Income | % Change in Portfolio Value | | :--- | :--- | :--- | | +100 Basis Points | (4.90)% | (1.38)% | | +50 Basis Points | (2.65)% | (0.63)% | | -50 Basis Points | 0.36% | 0.50% | | -100 Basis Points | 1.05% | 0.87% | - The company's estimated net effective duration was **1.14** as of September 30, 2019, indicating low sensitivity to interest rate changes[313](index=313&type=chunk)[491](index=491&type=chunk) - Credit risk is concentrated in Legacy Non-Agency MBS and residential whole loan portfolios, mitigated by a **$462.1 million** credit reserve and discounted purchase prices[492](index=492&type=chunk)[493](index=493&type=chunk)[502](index=502&type=chunk)[503](index=503&type=chunk) - The largest geographic concentration for Legacy Non-Agency MBS and residential whole loan portfolios is California, at **42.7%** and **37.0%** of unpaid principal balance, respectively[499](index=499&type=chunk)[507](index=507&type=chunk) [Controls and Procedures](index=100&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2019[516](index=516&type=chunk) - No material changes to internal control over financial reporting occurred during Q3 2019[517](index=517&type=chunk) Part II [Other Information](index=101&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material legal proceedings or changes to risk factors, and no common stock repurchases were made in Q3 2019, with 6.6 million shares remaining authorized - No material pending legal proceedings exist for the company[520](index=520&type=chunk) - No material changes occurred to the risk factors previously disclosed in the 2018 Annual Report on Form 10-K[521](index=521&type=chunk) - The company did not repurchase common stock in Q3 2019, with approximately **6.6 million** shares remaining authorized under its **10.0 million** share program[522](index=522&type=chunk)[523](index=523&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 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: 1-13991 MFA FINANCIAL, INC. (Exact nam ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 or o 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: 1-13991 MFA FINANCIAL, INC. (Exact name of registrant as specified ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR o 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: 1-13991 MFA FINANCIAL, INC. (Exact name of registrant as specified in its charter) Maryland (State or other jurisdiction of incorporatio ...