Mfa Financial, Inc. · NYSE:MFA
Mfa Financial — MFA Mortgage Investments — 2007 FBR Capital Markets Investor Conference
16 slides from Mfa Financial's conference presentation, Nov 26, 2007
Slide 1: MFA Mortgage Investments, Inc. 2007 FBR Capital Markets Investor Conference
MEA MORTGAGE INVESTMENTS, INC. 2007 FBR Capital Markets Investor Conference
Slide 2: Forward-Looking Statements
Forward-Looking Statements MFA When used in this presentation or other written or oral communications, statements which are not historical in nature, including those containing words such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend” and similar expressions, are intended to id
Slide 3: MFA Overview
MFA Overview MFA invests on a leveraged basis in high-quality hybrid and adjustable-rate mortgage-backed securities MFA
Slide 4: MFA Overview
MFA Overview MFA’s spreads remain below its historical average due to... ¢ Delayed impact of prior Fed Funds increases from 1.00% to 5.25% ¢ Initial fixed rate period for hybrid MBS MFA’s spread and common dividend have trended up in each of the last four quarters Net Interest Spread Dividend = Ch)
Slide 5: Yield Curve Steepens
Yield Curve Steepens U.S. Treasury Curves = = S z 2 3Month 6Month 2Year 3Year 5 Year 10 Year Maturity 1/2/2007 — 11/14/2007
Slide 6: Investment Strategy
Investment Strategy High credit quality ¢ Approximately 99% of MFA’s assets are agency MBS, AAA rated MBS, related receivables and cash” ¢ Assets are liquid and can be financed with multiple funding providers through repurchase agreements. Outstanding balances with 14 separate counterparties ° MS (1
Slide 7: Investment Strategy
Investment Strategy Hybrid and ARM MBS ¢ After initial fixed term, coupons reset based on short-term interest rates ¢ Less price risk due to adjustability of coupon ¢ Repricing gap between assets and liabilities is approximately 10 months assuming a prepayment rate of 20% CPR” NINN (1) As of Septemb
Slide 8: Investment Strategy
Investment Strategy Maintain conservative t-to-equity ratio ¢ Asset-to-equity of 9.3:1" * Leverage limits set by discipline ¢ Low leverage allows MFA to respond to potential changes in the marketplace NINN (1) As of September 30, 2007
Slide 9: Current MBS Assets
urrent MBS Assets MBS by Time to Reset or Prepayment* Greater than 60 19% Reset Months 16% Estimated Prepays 13% AVithin 12 Months 35% 37 to 60 Months 28% 13 to 24Months 13% 25 to 36 Months 11% () As of September 30, 2007 * Applying a 20% constant prepayment rate ("CPR") MFA
Slide 10: Interest Spread Over Time
Interest Spread Over Time ro0% 4 ‘Net Spreads: eel High: 2.15% = Low: 003% 00% | _\_* Average: 1.01% 4.0% 00% 200% 1.00% 00% SF PF DDD DM GH M SHO GG .D sh ch sh MG HH oh of oh Poh sh PF PFIM III SLIM GILG I IES PILLS PIS SES. ‘Net Yield on ineres Earning Aveta MFA ;
Slide 11: Fourth Quarter Equity Raises
Fourth Quarter Equity Raises ¢ Raised $60.2 million net equity proceeds from October 5, 2007 offering at $7.90 per share. ¢ Raised $130.0 million net equity proceeds from November 2, 2007 offering at $7.95 per share. ¢ Both offerings are expected to be accretive. MFA |i
Slide 12: Market Opportunities
1) Market Opportunities — + Yields and spreads remain attractive ¢ Return on newly-invested capital is accretive Net Int Assumed Lev Net Inte Ri Spread fro e e Portfolio d on Unlevera cremental Yield on New Equity 13.60% (2) Week of Novernber 12, 2007. MFA 7
Slide 13: Housing Price Index Shows Home Prices Are Declining
Housing Price Index Shows Home Prices Are Declining hiller Home Price Index 87 BB 89 90 91 92 93 94 95 96 97 98 99 00 O1 O2 O3 04 OS 06 07) — Year-over-Year Growth —3-Month Growth (annualized) (L) As of August 30, 2007 MFA
Slide 14: Inventory of Vacant Homes for Sale is Increasing, Further Pressuring Home Prices
Inventory of Vacant Homes for Sale is Increasing, Further Pressuring Home Prices U.S. Homeowner Vacancy Rates Source: U. $ Census Bureau MFA
Slide 15: Investment Highlight Summary
Investment Highlight Summary 99% Agency and AAA Portfolio ¢ Asset yields and spreads on MFA’s existing portfolio are expected to increase ¢ Higher spread investments are currently available ¢ Conservatively managed from a leverage and liquidity standpoint MFA Ty
Slide 16: MFA Mortgage Investments, Inc.
MEA MORTGAGEINVESTMENTS, INC.
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