Q2 2024 Ellington Financial Inc Earnings Call Transcript
Key Points
- Ellington Financial Inc (EFC) generated an economic return of 4.5% non-annualized for the second quarter.
- The company increased its adjusted distributable earnings per share by $0.05 to $0.33 per share.
- Strong performance in the non-QM loan business, including a successful securitization in April, contributed significantly to the results.
- Longbridge, EFC's reverse mortgage platform, delivered robust earnings driven by strong origination volumes and proprietary reverse mortgage loans.
- EFC's diversified credit strategies, including residential transition loans, commercial mortgage loans, and non-agency RMBS, performed well and contributed to the overall positive results.
- Gain on sale margins for Longbridge's HECM business compressed due to wider yield spreads in the HMBS securitization markets.
- The percentage of delinquent loans in the residential mortgage loan portfolio increased slightly quarter over quarter.
- Loans in non-accrual status and REO expenses continued to weigh on adjusted distributable earnings (ADE) in the second quarter.
- The total long credit portfolio decreased by 2.5% to $2.73 billion as of June 30, driven by net sales of non-agency RMBS and non-QM loans.
- The total long agency RMBS portfolio declined by 31% in the quarter to $458 million, reflecting a strategic shift away from lower-yielding sectors.
Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Ellington Financial second quarter 2024 earnings conference call. Today's call is being recorded. (Operator Instructions)
I'd now like to turn the call over to Alaael-Deen Shilleh. Please go ahead.
Thank you. Before we start, 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 Litigation Reform Act of 1995. Forward-looking statements are non-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.
Consequently, you should not
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