Ellington Financial : EFC First Quarter 2025 Earnings Conference Call Presentation

Published: 2025-05-07 21:09:07 ET EFC

Published on 05/07/2025 at 21:09

Earnings Conference Call

Q 1 2025 EARNINGS

May 8, 2025

2025

Overall Results

Net income: $31.6 million or $0.35 per share(2)

Economic return:(3) 2.3% for the quarter, non-annualized

Adjusted Distributable Earnings:(4) $35.5 million or $0.39 per share

Investment Portfolio Segment

Net income: $57.1 million or $0.63 per share

Credit strategy:

Net income: $52.9 million or $0.58 per share

Adjusted long credit portfolio: $3.30 billion(5)(6), a 4% decrease from the prior quarter

Agency strategy:

Net income: $4.2 million or $0.05 per share

Long Agency portfolio: $256.1 million, a 14% decrease from the prior quarter

Longbridge Financial Segment

Net loss: $(1.0) million or $(0.01) per share

Loss driven by interest rate hedges given sharp decline in interest rates during the quarter

Longbridge portfolio(7): $549.0 million, a 31% increase from the prior quarter

Equity & BVPS

Total stockholders' equity: $1.61 billion, comprising common equity of $1.28 billion and preferred equity of $332

million(8)

Book value per common share: $13.44 after total dividends declared of $0.39 for the quarter

Dividends

Dividend yield of 12.2% based on the May 6, 2025 closing stock price of $12.75 per share, and monthly dividend of $0.13 per common share declared on May 7, 2025

Leverage Below

Sector Average

Recourse debt-to-equity ratio(9): 1.7:1

Total debt-to equity ratio(10): 8.7:1, including all non-recourse borrowings, which primarily consist of securitization-

related liabilities

Priced 5 securitizations: 3 of closed-end second lien loans and 2 of non-QM loans

Cash and cash equivalents of $203.3 million, in addition to other unencumbered assets of $650.2 million

Allocated Fair Value

Average Price

WAVG Mkt

Equity and Asset Allocation by Strategy

Debt and Equity Investments in Loan Origination Entities(14)

59,791

N/A

CLOs

27,958

59.0

3.8

22.3%

Corporate Debt and Equity and Corporate Loans

24,915

56.4

2.5

18.7%

Non-Dollar MBS, ABS, CLO and Other(9)(13)(15)

20,080

94.0

2.8

13.7%

Other investments(16)

58,134

88.8

3.1

18.3%

Total - Credit

86%

$ 3,296,520

95.7

2.5

9.3%

13%

Assets

81%

12%

Equity

86%

Residential transition loans and other residential mortgage loans(8) consist of residential transition loans ($923.3mm), other residential loans ($50.3mm), and REO ($28.7mm)

Non-QM loans and retained RMBS(8)(9)(10) consist of non-QM loans ($583.6mm), retained non-QM tranches ($184.3mm), and REO ($1.2mm)

Debt and Equity Investments in Loan Origination Entities(13) consist of LendSure ($31.5mm) and other loan origination entities ($28.3mm)

Credit

Equity(2) ($ in $1,000s)

(%)(3)(7)

WAVG Life(5)(7)

Yield(6)(7)

Residential Transition Loans and Other Residential Mortgage Loans(8)

$ 1,002,345

99.3

1.0

10.2%

Non-QM Loans and Retained RMBS(8)(9)(10)

769,123

92.6

4.1

7.9%

Commercial Mortgage Loans and CMBS(8)(11)

542,004

95.3

1.2

9.7%

Home Equity Line of Credit and Closed-End Second Lien Loans and Retained RMBS(10)(13)

341,196

104.4

3.8

7.2%

Non-Agency RMBS

183,099

87.0

4.1

7.9%

Forward MSR-related investments(12)

180,703

N/A

7.9

8.8%

Consumer Loans and ABS backed by Consumer Loans(13)87,172 -(4) 1.5

10.5%

Agency

Fixed-Rate Specified Pools

241,580

93.8

7.2

5.1%

Reverse Mortgage Pools

1,499

98.5

1.8

5.3%

IOs

13,016

N/A

6.5

8.8%

Total - Agency

$ 256,095

93.8

7.2

5.2%

Longbridge(17)

Proprietary reverse mortgage loans(9)

282,739

Unsecuritized HECM loans(18)

131,883

HMBS MSR Equivalent(19)

102,319

Reverse MSRs and Unsecuritized REO

32,025

Total - Longbridge

12%

$ 548,966

Debt-to-Equity Ratio by Strategy and Overall(20)

Credit

1.6x 3.0x

Agency

5.4x 5.4x

Longbridge

1.8x 50.9x

Recourse Total

Overall 1.7x(21)8.7x(22)

(In thousands, except per share amounts)

Credit

Investment Portfolio

Agency Subtotal

Longbridge

Corporate/ Other

Total

Total Per Share

Interest income and other income (1)

$ 87,077

$ 4,140

$ 91,217

$ 23,056

$ 1,714

$ 115,987

$ 1.25

Interest expense

(46,503)

(2,498)

(49,001)

(13,745)

(4,481)

(67,227)

(0.73)

Realized gain (loss), net

(12,421)

(1,190)

(13,611)

(1,383)

(14,994)

(0.16)

Unrealized gain (loss), net

24,059

5,673

29,732

4,408

1,027

35,167

0.38

Net change from reverse mortgage loans and

HMBS obligations

29,519

0.32

Earnings in unconsolidated entities

8,304

0.09

Interest rate hedges and other activity, net(2)

(5,917)

(1,908)

(7,825)

(12,273)

1,284

(18,814)

(0.20)

Credit hedges and other activities, net(3)

3,616

(394)

3,222

0.03

Income tax (expense) benefit

Investment related expenses

(2,770)

(10,810)

(13,580)

(0.14)

Other expenses

(2,259)

(20,756)

(15,341)

(38,356)

(0.41)

Net income (loss)

$ 53,186

$ 4,217

$ 57,403

$ (995)

$ (17,084)

$ 39,324

$ 0.43

Dividends on preferred stock

(7,035)

(0.08)

Net (income) loss attributable to non-

participating non-controlling interests

(316)

(3)

(319)

Net income (loss) attributable to common stockholders and participating non-controlling

interests

$ 52,870

$ 4,217

$ 57,087

$ (995)

$ (24,122)

$ 31,970

$0.35

Net (income) loss attributable to participating

non-controlling interests

(321)

Net income (loss) attributable to common

stockholders

$ 52,870

$ 4,217

$ 57,087

$ (995)

$ (24,443)

$ 31,649

$ 0.35

Net income (loss) attributable to common

stockholders per share of common stock

$ 0.58

$ 0.05

$ 0.63

$ (0.01)

$ (0.27)

$ 0.35

Weighted average shares of common stock

and convertible units(4)outstanding

92,529

Weighted average shares of common stock

outstanding

91,601

Disclaimer

Ellington Financial Inc. published this content on May 08, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 08, 2025 at 01:08 UTC.