Mfa Financial, Inc. · NYSE:MFA
Mfa Financial — Investor Presentation (November 2010)
17 slides from Mfa Financial's investor presentation, Nov 23, 2010
Slide 1: MFA Financial, Inc. November 2010
November 2010 MFA FINANCIAL, INC.
Slide 2: Forward Looking Statements
Forward Looking Statements Peet, ie When used in this presentation or other written or oral communications, statements which are not historical in nature, including those containing words such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue.” “intend,” “should,” “may” or similar
Slide 3: MFA is positioned with the requisite expertise for Agency and Non-Agency MBS
MFA is positioned with the requisite expertise to benefit from investment in Agency and Non-Agency Residential MBS
Slide 4: Experienced Management Team Focused on Residential MBS Opportunities
Experienced Management Team Focused on Residential MBS Opportunities >» Non-Agency MBS remain available at deep discounts to par value. >» Agency MBS continue to benefit from a steep yield curve. > Our goal remains to generate double-digit ROEs with appropriate levels of leverage.
Slide 5: Solid Long Term Results
Solid Long Term Results FINANCIAL, 16.4% Annual Return Since January 2000 500 400 300 200 100 -100 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 _—MFA —S&P —SaP Fin Source: Bloomberg 5 *Includes reinvestment of dividends through November 5, 2010
Slide 6: Growth in Book Value Per Share
Growth in Book Value Per Share FINANCIAL, INC. 48% Growth in Book Value per Common Share Dollars Per Share over the last 21 Months $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 December 31, 2008 December 31, 2009 September 30, 2010
Slide 7: MFA Asset Allocation Strategy
MFA Asset Allocation Strategy FINANCIAL, INC Investment in Residential MBS Including Both Agency MBS and Non-Agency MBS Non-Agency AtSeptember 30, 2010 Agency MBS MBS (1) Cash Other, net Total (Sin Millions) Amortized cost $ 5.960 § 2147S 3122S 0 S$ 8.459 Asset fair value $ 6181S 2351S 3122S 0S 8.88
Slide 8: MFA Investment Strategy
MFA Investment Strategy FINANCIAL, INC Higher Yielding Non-Agency MBS generated approximately 60% of MFA’s Third Quarter Core Net Interest Income* HiNon-Agency MBS: $41.438 Agency MBS: $28.192 Cash: $121 Dollars in Thousands * Core Net Interest Income includes $9.5 million interest income on Non-Age
Slide 9: Strategically Positioning Agency MBS Portfolio
MFA Strategy - Agency MBS FINANCIAL, Strategically Positioning Agency MBS Portfolio MFA Agency Portfolio $120 wsi02 $100 4 ¢ = $8.0 a S62 = | s6o4 5 sao $2.04 $0.0 June 2008 September 2010 9
Slide 10: MFA is acquiring Agency MBS to replace runoff
MFA Strategy — Agency MBS MPA MFA is acquiring Agency MBS to replace runoff >» The majority of our assets will continue to be whole-pool Agency MBS due to the attractiveness of the asset class. » The yield curve remains steep and incremental spreads on Agency MBS remain attractive. > Tighter underwr
Slide 11: Strategically Increasing Non-Agency MBS Portfolio
MFA Strategy — Non-Agency MBS Fevers ike Strategically Increasing Non-Agency MBS Portfolio MFA continues to identify high-yielding Non-Agency MBS at discounted prices MFA Non-Agency Portfolio* gz500 52.351 $2,000 $1,500 $1,000 5 $500 S204 = so December 2008 September 2010 *Includes $546 million fair
Slide 12: Non-Agency MBS
MFA Strategy - Non-Agency MBS* MPA >MFA owns $2.4 billion market value of Non- Agency MBS. These Non-Agency MBS have an average amortized cost of 68% of par. >In the Third Quarter of 2010, these assets generated a loss adjusted yield of 9.3% on an unlevered basis. >These high yielding assets are les
Slide 13: Non-Agency MBS: Credit Risk Mitigation
MFA Strategy — Non-Agency MBS FinaNcr Deeply discounted purchase price, substantial credit reserve and credit enhancement mitigate credit risk Non-Agency Portfolio Current Face As of September 30, 2010* $3,150,662 = om ee $21,587 —— 1% Dollars in Thousands 13 “Includes $546 million fair value of Non
Slide 14: October 2010 Re-securitization
MFA Strategy — Non-Agency MBS FINANCIAL, INC October 2010 Re-securitization >MFA completed a $985.2 million re-securitization in October. >$246.3 million of the AAA rated bonds issued to third party investors at 1Mo LIBOR + 125 bps. >$374.4 million face amount of multiple mezzanine classes acquired
Slide 15: October 2010 Re-securitization: Borrowing Availability
MFA Strategy — Non-Agency MBS MEA inc October 2010 Re-securitization > Borrowing availability increased 17% for the related assets after re-securitization. Borrowings by Pledged Collateral = Permanent IG Rated e = NonIG+NR $200 SU $ Before” After** “Borrowings assume the maximum utilization of avail
Slide 16: MFA is positioned with the requisite expertise
MFA is positioned with the requisite expertise to benefit from investment in Agency and Non-Agency Residential MBS
Slide 17: MFA Financial, Inc.
MFA FINANCIAL, INC.
MFA Financial — Investor Presentation (November 2010) on 6ix