Mfa Financial, Inc. · NYSE:MFA
Mfa Financial — MFA Mortgage Investments — Investor Presentation (September 2006)
12 slides from Mfa Financial's investor presentation, Sep 19, 2006
Slide 1: MFA Mortgage Investments, Inc.
MIA MORTGAGEINVESTMENTS, INC. September 15, 2006
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
MEA Overview MFA MEA invests on a leveraged basis in high-quality hybrid and adjustable-rate mortgage-backed securities.
Slide 4: Current Interest Rate Environment
Current Interest Rate Environment MFA - On August 8, 2006, the Fed kept its target federal funds rate at 5.25%. + Previously, the Fed had increased the target federal funds rate by 25 basis points at each of its last 17 meetings. + FOMC minutes of August 8, 2006 meeting indicated that while members
Slide 5: Flattening Yield Curve
Flattening Yield Curve MFA U.S. Treasury Curves 3Month 6 Month 2 Year 3Year 5 Year Maturity — 12/30/2005 9/14/2006 10 Year Source: Bloomberg
Slide 6: Refinancing Index chart
-9007/T/6 “e PI00T/T/L Source: Bloomberg P900T/T/S P9007/T/€ r9007/7/T rsooc/c/ TT PSO00T/T/6 PSOOC/T/L pSO0T/T/S REFI Index SA pSO0T/T/E rSooc/z/T prooc/c/11 PrO00T/T/6 POOT/T/L 3000, 2800 2600 2400 2200 2000 1800 1600 1400 1200 R -— = ovo E > iS = o mt a o en S op -— = - MFA
Slide 7: Investment Strategy
Investment Strategy * Approximately 99% of the Company’s assets are issued or guaranteed by Fannie Mac, Freddie Mac or Ginnie Mae, rated “AAA”, related receivables or cash ‘? ¢ Assets are liquid and easy to finance High credit quality ¢ Coupons reset based on short-term interest rates Hybrid and one
Slide 8: Current MBS Assets
Current MBS Assets Assets by Time to Reset or Prepayment* (as of August 31, 2006) 60 Months 37 to 60 Months <I% 16% 25 to 36 Months 9% hapa 15 13 to 24 Months Within 12 12% Months 63% “Applying a 25% constant prepayment rate (“CPR”) MFA 7
Slide 9: MFA Interest Spread Over Time
MEA Interest Spread Over Time MFA sees Sssgssges8 sse2eee $68 252 8 5 8 22 33 See 888 B38 2278 FESS7 ERR 283 2528 gas ‘Net Yield on Interest Earning Assets ‘Cost of Funds
Slide 10: Playbook for Fed Tightening and a Flattening Yield Curve
Playbook for Fed Tightening and a Flattening Yield Curve - If available spreads are not compelling, reduce the MBS portfolio size. 7.0 6.5 6.0 © 55 g 5 5.0 oa 45 Aug- 4.0 06 3.5 3.0 Dec-04 Mar05 = Jun-O5 — Sep-05 = Dec-05 = Mar-06 = Jun-06 MFA 9
Slide 11: Playbook for Fed Tightening and a Flattening Yield Curve
Playbook for Fed Tightening and a Flattening Yield Curve - We anticipate non-agency MBS bonds will be negatively impacted as housing price increases moderate or possibly decline. «As mortgage bonds are impacted by increased delinquencies, defaults and credit losses, bond investors will demand higher
Slide 12: MFA Mortgage Investments, Inc.
MORTGAGEINVESTMENTS, INC.
MFA Mortgage Investments — Investor Presentation (September 2006) on 6ix