Q3 2024 MFA Financial Inc Earnings Call Transcript
Key Points
- MFA Financial Inc (MFA) reported solid third-quarter results with distributable earnings of $0.37 per share and an economic return of 3.3%.
- The company acquired over $550 million in loans with an average coupon of 9.4%, enhancing its portfolio with high-yielding assets.
- MFA successfully utilized securitization to fund assets, closing multiple deals, including its first rated deal for residential transition loans, which improved funding costs.
- The Federal Reserve's rate cut is seen as a positive development, providing a tailwind for MFA's business model in a lower rate environment.
- MFA's management changes, including the promotion of Bryan Wulfsohn to President, reflect a strong and experienced leadership team poised for future growth.
- MFA's economic book value decreased by approximately 3% to 4% post-quarter due to higher market interest rates.
- The company experienced a decline in Lima One's origination volume, attributed to recent management changes and a shift away from multifamily lending.
- MFA reported an increase in 60-plus day delinquencies, particularly in its Non-QM and multifamily loan portfolios.
- The third quarter saw $0.07 of realized credit losses, primarily on transitional loans, impacting distributable earnings.
- Non-recurring separation, severance, and retirement-related charges of approximately $3.3 million affected the company's general and administrative expenses.
And ladies and gentlemen, thank you for standing by. Welcome to the MFA third-quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, today's conference is being recorded.
I would now like to turn the conference over to our first speaker, Mr. Hal Schwartz. Please go ahead.
Thank you, operator, and good morning, everyone. The information discussed on this conference call today may contain or refer to forward-looking statements regarding MFA Financial Inc., which reflect management's beliefs, expectations, and assumptions as to MFA's future performance and operations. When used, statements that are not historical in nature, including those containing words such as, will, believe, expect, anticipate, estimate, should, could, would, or similar expressions are intended to identify forward-looking
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