Mfa Financial, Inc. · NYSE:MFA
Mfa Financial — MFA Mortgage Investments — Investor Presentation (December 2008)
15 slides from Mfa Financial's investor presentation, Dec 1, 2008
Slide 1: Slide 1
Slide 2: Forward Looking Statements
MPA Forward Looking Statements ——— ‘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 provides attractive returns through appropriately leveraged investments
MFA provides attractive returns through appropriately leveraged investments in high- quality hybrid and adjustable- rate mortgage-backed securities
Slide 4: MFA Overview
MFA Overview? MEA @ Proven Management and Investment Strategy » Strategically positioned portfolio with appropriate leverage » Greater than 99% of assets are Agency MBS, AAA Rated MBS, related receivables and cash » Hybrids and ARMs limit duration risk Significant Market Dislocation has Enhanced Inv
Slide 5: Historical Performance
MEA Historical Performance Consistent Outperformance wien aes
Slide 6: September 30, 2008 Financial Results
30, 2008 Financial Results September 30, 2008 Book Value: September 30, 2008 Debt-to-Equity Multi September 30, 2008 Liquidity Posit Third Quarter 2008 EP: Third Quarter 2008 Dividend Per Share: $438 million Cash $163 million Unpledged MBS $601 million $0.24 $0.22
Slide 7: Investment Opportunity
MEA Investment Opportunity Yield Cur 1.0% CAEP EA OP OLE EPOEL EA STOW Tensuny 2 Vi Teasury —Nel interest Spread]
Slide 8: Market Spreads Remain High
Opportunity Market Spreads Remain High Third Quarter Asset Yield Third Quarter Borrowing Cost Third Quarter Net Interest Rate Spread Net Interest Spread 50% 1.60% 1.70% 15.00 15.60 16.30 15.70 1640.17.10 1650 17.20 18.00 1720 18.00 18.80 Leverage | |
Slide 9: Investment Performance
Investment Performance Net Inter nd Dividend Growth MPA $0.40 $0.90 $0.10 30.00 LPP PSS PESEPOE fees Dividends Paid — Net interest Spresa
Slide 10: Investment Strategy
MEA Investment Strategy Remains Hig @ More than 99% of MI assets are Agency MBS, AAA = rated MBS, related receivables and cash” @ Assets remain liquid and can be financed with multiple finding providers through repurchase agreements @ Repurchase agreements with 16 total counterparties 10
Slide 11: Investment Strategy: Built Around Hybrid and ARM MBS
MFA Investment Strategy id and ARM MBS Strategy Built Around Hybr Within 12 @ After initial fixed term, Greater than 60 coupons reset based on Months Monts 21% 23% short-term interest rates © Less price risk due to adjustability of coupon 13 t0 60 Months 56% Effective Duration: 1.69 "4 ng a constant
Slide 12: RMBS Yields High Relative to Fed Funds Rate
Sr1tAdata Wed 5.00% 4.50% 2.50% + y RMBS Yields High Relative to Fed Funds Rate 5.5% 5/1 Hybrid Yield vs. Fed Funds Target Rate | 5.00% | 2.00% 4 2.00% 1.00% 0.00% May-04 Nov04 May-05 Nov05 May-06 Nov06 May-07 Nov07 May-08 03105 [57 Viet — Fed Funds Target Rate] i z 3 £ z 12
Slide 13: Portfolio Yield Near 5.1%, Cost of Funds in Downward Trend
MEA While MFA Portfolio Yield Remains Near 5.1%, Cost of Funds is in a Downward Trend L g Declining LIBOR
Slide 14: Summary
Sram sy MEA @ Greater than 99% of MFA’s assets are Agency MBS, AAA rated MBS, related receivables and cash* @ Strategically positioned portfolio to maintain appropriate leverage and liquidity in current environment @ MFA can generate attractive returns with less leverage 14
Slide 15: Slide 15
MFA Mortgage Investments — Investor Presentation (December 2008) on 6ix