Ellington Residential Mortgage REIT(US:EARN)2024-05-14 21:26Financial Performance - Ellington Credit Company reported net income of $4.0 million, or $0.20 per share, and adjusted distributable earnings of $5.3 million, or $0.27 per share for Q1 2024[6]. - For the three-month period ended March 31, 2024, total net income was $3,961,000, or $0.20 per share, compared to $12,439,000, or $0.75 per share for the period ended December 31, 2023[26]. - Net income for the first quarter of 2024 was $3,961,000, a decrease of 68.2% from $12,439,000 in the previous quarter[36]. - Adjusted Distributable Earnings for the three-month period ended March 31, 2024, was $5,312,000, up from $4,558,000 for the period ended December 31, 2023, representing a 16.5% increase[36]. Portfolio Growth - The company's CLO portfolio grew to $45.1 million as of March 31, 2024, more than doubling from $17.4 million at the end of 2023[10]. - The company plans to grow its CLO portfolio above $100 million while maintaining a core portfolio of liquid Agency MBS pools during the transition[7]. Income and Expenses - Total interest income for the quarter was $10,379,000, down from $11,888,000 in the previous quarter, while total interest expense decreased from $11,511,000 to $10,100,000[26]. - Total expenses for the quarter were $1,627,000, up from $1,374,000 in the previous quarter, with management fees increasing to $538,000 from $512,000[26]. Asset and Liability Management - Total assets increased to $963,956,000 as of March 31, 2024, compared to $945,690,000 as of December 31, 2023, reflecting a growth of 1.3%[29]. - Total liabilities rose to $821,039,000 as of March 31, 2024, compared to $809,452,000 as of December 31, 2023, indicating a 1.6% increase[29]. Shareholder Information - The book value per share was reported at $7.21 as of March 31, 2024, which includes dividends of $0.24 per share for the quarter[6]. - Book value per share decreased to $7.21 as of March 31, 2024, down from $7.32 as of December 31, 2023[29]. - Common shares outstanding increased to 19,819,610 as of March 31, 2024, from 18,601,464 shares as of December 31, 2023, due to the issuance of 1,218,146 shares during the first quarter[30]. - The weighted average shares outstanding for the first quarter of 2024 was 19,548,408, compared to 16,662,407 in the previous quarter[36]. Strategic Changes - The strategic transformation to focus on corporate CLOs was approved by the Board of Trustees on March 29, 2024, with plans to convert to a closed-end fund later in the year[3]. - The company has transformed its investment strategy to focus on corporate CLOs, revoking its REIT status effective January 1, 2024[21]. - The company plans to convert to a closed-end fund later in 2024, subject to shareholder approval[21]. Profitability by Segment - The total profit from Credit strategies was $3,499,000, significantly up from $772,000 in the previous quarter, with a notable increase in CLO profit to $2,250,000 from $313,000[26]. - Non-Agency RMBS profit increased to $1,249,000 from $459,000, driven by net interest income and mark-to-market gains[26]. - Agency RMBS generated a profit of $2,027,000, down from $12,419,000, impacted by higher interest rates and negative excess returns[26]. Financial Ratios - The debt-to-equity ratio decreased to 4.9:1 as of March 31, 2024, down from 5.3:1 at the end of 2023, reflecting higher shareholders' equity[11]. - The net mortgage assets-to-equity ratio was reported at 5.4:1 as of March 31, 2024, down from 5.8:1 at the end of 2023[11]. Cash and Equivalents - As of March 31, 2024, cash and cash equivalents totaled $22.4 million, alongside other unencumbered assets of $57.1 million[6].