Q2 2024 Ellington Credit Co Earnings Call Transcript
Key Points
- Ellington Credit Co (EARN) has successfully ramped up its CLO portfolio to $108 million, accounting for roughly half of its total capital allocation.
- The company's net interest margin expanded to 4.24%, driven by the growth of CLOs.
- Ellington Credit Co (EARN) reported adjusted distributable earnings (ADE) of $0.36 per share, an increase of $0.09 per share sequentially.
- The strategic transformation into a CLO-focused closed-end fund is on track, with anticipated benefits including better projected risk-adjusted returns and enhanced access to capital markets.
- The company has maintained a strong liquidity position with $163 million in cash and unencumbered assets.
- Ellington Credit Co (EARN) reported a net loss of $0.04 per share for the second quarter.
- The remaining MBS portfolio contributed a modest $0.05 per share net loss for the quarter due to intra-quarter interest rate volatility.
- The company expects the impact of positive carry on interest rate swaps to decline in future quarters as some swaps expire.
- Book value per share decreased to $6.91 at June 30 from $7.21 at March 31, resulting in a negative economic return of 0.8% for the quarter.
- The recent market volatility has led to mark-to-market losses on some of EARN's CLO equity tranches.
Good morning, ladies and gentlemen. And thank you for standing by. Welcome to the Ellington Credit Company 2024 second quarter financial results conference call. Today's call is being recorded. (Operator Instructions)
It is now my pleasure to turn the floor over to Alaael-Deen Shilleh, Associate General Counsel. Sir, you may begin.
Thank you. Before we begin, I would like to remind everyone that certain statements made during this conference call may constitute forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Reform Act of 1995. Forward-looking statements are not historical in nature, as described under Item 1A of our Annual Report on Form 10-K and Part 2 Item 1A of our quarterly report on Form 10-Q.
Forward-looking statements are subject to a variety of risks and uncertainties that could cause the Company's actual results to differ from its beliefs, expectations, estimates and projections.
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