Core Insights - Ellington Financial reported Q3 CY2025 revenue of $82.76 million, exceeding analyst expectations by 4.9% and reflecting a year-on-year growth of 23.6% [6] - The company's non-GAAP profit was $0.53 per share, which was 20.7% above consensus estimates [6] - Management highlighted strong performance driven by loan portfolio expansion and an active securitization pipeline [3] Financial Performance - Revenue: $82.76 million vs analyst estimates of $78.87 million, representing a 23.6% year-on-year growth [6] - Adjusted EPS: $0.53 vs analyst estimates of $0.44, a 20.7% beat [6] - Adjusted Operating Income: $25.74 million with a 31.1% margin, showing a 60.4% year-on-year growth [6] - Market Capitalization: $1.38 billion [6] Strategic Initiatives - The company priced seven securitizations during the quarter, focusing on non-QM and closed-end second lien loans, enhancing liquidity [7] - Total portfolio holdings grew by 12%, with significant increases in non-QM, proprietary reverse mortgage, and commercial mortgage bridge loans [7] - A successful $400 million issuance of five-year senior unsecured notes reduced reliance on short-term repo financing, improving capital efficiency [7] Credit Quality and Risk Management - Management reported exceptionally low cumulative realized credit losses in both residential and commercial loans, attributed to disciplined underwriting and a focus on higher FICO borrowers [7] - The company emphasized the importance of risk controls, including personal guarantees on certain loan types [7] Technology and Operational Efficiency - Investments in proprietary technology have enabled more efficient loan origination and delivery, broadening the range of mortgage products [8]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP net income applicable to common stockholders of $2 million, or $0.05 per diluted share, with comprehensive income of $4.5 million, or $0.12 per diluted share [14][15] - Book value per common share increased to $3.36 from $3.34 as of June 30, 2025, reflecting a slight growth [5][15] - Earnings available for distribution (EAD) were $3.3 million, or $0.09 per share [15] Business Line Data and Key Metrics Changes - The MSR portfolio had an unpaid principal balance (UPB) of $16.2 billion and a market value of approximately $219 million, representing about 41% of equity capital [10] - The RMBS portfolio stood at approximately $782 million, up from $756 million in the previous quarter, indicating a strategic shift towards lower and middle-of-the-coupon stack mortgages [12] - The net interest spread for the RMBS portfolio was approximately 2.87%, higher than the previous quarter, driven by increased asset purchases [12] Market Data and Key Metrics Changes - The 10-year yield ended the quarter marginally lower at 4.15%, with mortgage rates hovering around 6% [4][7] - The average net CPR for the MSR portfolio was approximately 5.9%, consistent with the previous quarter, while the RMBS portfolio's prepayment speeds held steady at 6.1% CPR [10][11] Company Strategy and Development Direction - The company adjusted its dividend to $0.10 per share, aligning it with earnings power for sustainability [6] - A strategic partnership with Real Genius LLC was highlighted, focusing on enhancing the digital mortgage experience, which is expected to accelerate growth as mortgage rates decrease [6][8] - The company aims to monitor the economic environment closely while seeking investment opportunities that are accretive to its business [8] Management's Comments on Operating Environment and Future Outlook - Management noted a reduction in macro volatility and anticipated continued easing from the Fed, which could lead to higher prepayment speeds for high coupon mortgages [4][5] - The company expressed optimism regarding the potential for accelerated growth due to lower mortgage rates, which may encourage refinancing and home purchases [8] Other Important Information - Financial leverage remained consistent at 5.3 times, with $55 million of unrestricted cash, indicating a solid liquidity profile [5] - Operating expenses for the quarter were reported at $3.8 million [16] Q&A Session Summary Question: Regarding the Real Genius partnership, was it opportunistic, or can more partnerships be expected? - Management indicated that while they are not prepared to forecast, they are open to exploring interesting and creative opportunities that align with their skill set [19][20] Question: Thoughts on expenses going forward, particularly G&A and compensation? - Management acknowledged a 12.5% sequential rise in G&A and compensation, attributing it to personnel changes and professional fees, but anticipates costs to decrease moving forward [25][28] Question: Update on current book value? - Management reported that the book value per share as of October 31 was up about 1.2% from September 30, before any fourth-quarter dividend accrual [33]

Financial Performance - The company reported a total quarterly economic gain of 3.6%[5] - GAAP net income was $0.05 per share[5] - Earnings Available for Distribution (EAD) was $0.09 per share[5] - Book value per common share increased by 0.6% to $3.36, net of the quarterly dividend[7] - A dividend of $0.10 per share was declared and paid[7] Portfolio Metrics - The leverage ratio for the aggregate portfolio was 5.3x[6] - Net interest spread for RMBS was 2.9%[6] - RMBS experienced a Constant Prepayment Rate (CPR) of 6.1%[6] - MSRs had a net CPR of 5.9%[6] MSR Portfolio - Investments in MSRs totaled $218.7 million related to approximately $16.2 billion in UPB of underlying Fannie Mae and Freddie Mac loans as of September 30, 2025[20] - Recapture rate on conventional MSRs was 0.3% in the quarter[20] RMBS Portfolio - The RMBS portfolio had a fair market value of $781.539 million and a par amount of $781.032 million[26] - The weighted average coupon (GWAC) for the total RMBS portfolio was 5.8%[26] - The weighted average loan age (WALA) for the total RMBS portfolio was 25.39 months[26] - The RMBS portfolio experienced a 1-month CPR of 6.5% and a long-term CPR of 11.0%[26] Financing and Hedging - The average REPO cost was 4.3% with a weighted average days remaining to maturity of 27 days[35] - The company has borrowings with 14 financing counterparties[35] - The weighted average "haircut" on repurchase agreements was 4.4%[35] - The company utilized payer swaps with a total notional value of $712.7 million and a weighted average pay rate of 1.41%[38] - The company utilized receiver swaps with a total notional value of $116 million and a weighted average receive rate of 3.42%[38]

Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to ensure proper functionality and access to content [1] Group 1 - The article emphasizes that users may be blocked from proceeding if an ad-blocker is enabled [1]

Financial Performance - GAAP net loss was $95 million, or $007 per share[4] - Distributable loss was $215 million, or $015 per share[4] - Distributable earnings prior to realized gains and losses were $59 million, or $004 per share[4] Loan Portfolio - Total loan commitments were $45 billion as of September 30, 2025, compared to $50 billion as of June 30, 2025[6] - The weighted average all-in yield was 67%[6] - Floating rate loans comprised 97% of the portfolio[6] - Senior loans also represented 97% of the portfolio[6] Loan Resolution - During the quarter, four loans were resolved, totaling $7160 million of UPB[4] - Year-to-date, 18 loans were resolved, totaling $22 billion of UPB, with $808 million in partial loan repayments[4] Liquidity and Leverage - Total available liquidity increased to $385 million as of November 4, 2025, including $340 million in cash[4, 15] - Unfunded loan commitments decreased to $348 million as of September 30, 2025, an ~82% reduction from December 31, 2022[4, 21] - Net debt to equity ratio decreased to 19x[4] - Total leverage ratio decreased to 24x[4] Risk Management - Risk rated 5 loans had a total UPB of $978 million, with an average specific CECL reserve of 172%[4, 38] - Risk rated 4 loans had an average general CECL reserve of 99%[4, 41]

Third Quarter 2025 Earnings Call Invesco Mortgage Capital Inc. October 31, 2025 John Anzalone Kevin Collins Mark Gregson David Lyle Brian Norris Chief Executive Officer President Chief Financial Officer Chief Operating Officer Chief Investment Officer Cautionary Notice Regarding Forward-Looking Statements This presentation and comments made in the associated conference call, may include statements and information that constitute "forward-looking statements" within the meaning of the U.S. securities laws as ...

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment returns Group 1: Company Summaries - **PennyMac Mortgage Investment Trust (PMT)**: This real estate investment trust focuses on residential mortgage loans and related assets, with a 10.3% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] - **NatWest Group (NWG)**: A banking and financial services company offering a range of services including personal and business banking, with a 7.5% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [2] - **Phibro Animal Health (PAHC)**: A global diversified animal health and mineral nutrition company providing products for food animals, with a 4.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [3] - **Centene (CNC)**: A well-diversified healthcare company serving government-sponsored healthcare programs, with a 2.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [4] - **ACNB (ACNB)**: A provider of banking and financial services to individuals and businesses, also seeing a 2.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [4]

Group 1 - The article does not provide any specific information or data regarding companies or industries [1]

Core Insights - The article discusses the performance of Blackstone Mortgage Trust (BXMT) and highlights its ability to stabilize its book value, indicating a positive outlook for the fund [1]. Group 1: Company Performance - Blackstone Mortgage Trust has successfully stabilized its book value, which is a significant achievement for the fund [1]. - The article suggests that there are discounts to book value that may present investment opportunities [1]. Group 2: Investment Strategy - Binary Tree Analytics focuses on providing transparency and analytics in capital markets, particularly in closed-end funds (CEFs), exchange-traded funds (ETFs), and special situations [1]. - The firm aims to deliver high annualized returns with a low volatility profile, reflecting a strategic approach to investment [1].

Financial Data and Key Metrics Changes - The company recorded a comprehensive loss of $80.2 million, or $0.77 per share, including a litigation settlement expense of $175.1 million, which equates to $1.68 per share [16][17] - The return on book value was -0.63% including the litigation expense, while it would have been +7.6% excluding the expense [16] - Total economic return for the third quarter was -6.3%, and +7.6% without the litigation expense [9] Business Line Data and Key Metrics Changes - The RMBS portfolio decreased from $11.4 billion to $10.9 billion due to agency securities sales [6] - The company funded $49 million of UPB in first and second liens during the third quarter, with an additional $52 million UPB in the origination pipeline at quarter-end [12] - The company brokered $60 million UPB in second liens, a significant increase from $44 million in Q2 [12] Market Data and Key Metrics Changes - The Fed cut rates by 25 basis points in September, marking the first cut since November 2024, which positively impacted equity markets, with the S&P 500 up almost 8% by quarter-end [10] - The nominal spread for current coupon RMBS tightened by 26 basis points to 145 basis points to the swap curve [22] Company Strategy and Development Direction - The company aims to enhance and grow its servicing and origination activities while focusing on a MSR-focused investment strategy [9] - The company plans to redeem $262 million of outstanding convertible notes to reduce structural leverage to historical levels [8] - The company is optimistic about the investment opportunities available in the market, particularly in the MSR and MBS portfolio [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's liquidity and risk metrics following the litigation settlement [5] - The company sees no reason for its stock to trade at an 11% discount to book value, given the quality of its assets and the uncertainty created by the litigation now resolved [13] - Management highlighted the importance of technology investments to maintain growth in the direct-to-consumer origination platform [69] Other Important Information - The company has established a significant relationship with a new sub-servicing client, bringing the total sub-servicing UPB to approximately $40 billion [11] - The company is focused on improving efficiencies and lowering costs in light of the recent settlement payments [9] Q&A Session Summary Question: What are the key drivers of the increase in the EAD in the third quarter relative to the second quarter? - The increase in EAD is attributed to the decrease in financing costs, allowing asset yields to remain constant [34] Question: Can you give us an update on your book value quarter to date? - The book value was up about 1% as of last Friday [37] Question: Can you talk about the various risk metrics as you think about the size of the portfolio? - The company considers multiple risk metrics, including returns available on asset classes and the ideal mix in the current market context [41][43] Question: Does the return potential slide factor in potential cost savings? - The return potential slide reflects current costs, and there is potential upside as cost savings are realized [44][46] Question: Can you help us understand the strategy behind the coupon positioning? - The coupon exposure is managed based on how rates move and the current coupon's position relative to risk exposures [51][52] Question: Can you give us color on growth opportunities in the sub-servicing business? - The company is focused on developing relationships and attracting clients dissatisfied with their current sub-servicers [60] Question: How do you see MSR valuations responding to a further drop in interest rates? - MSR valuations are expected to remain stable, with strong demand for low gross WAC MSR despite potential declines in prices [87][88] Question: What is the valuation of the flow MSRs that you're originating versus your existing portfolio? - The price multiple for the entire portfolio is 5.8x, with variations based on coupon rates [99]