Ellington Financial Inc. · NYSE:EFC
Ellington Financial — Merger or Acquisition (May 2023)
13 slides from Ellington Financial's merger presentation, May 31, 2023
Slide 1: Ellington Financial Inc. to Acquire Arlington Asset Investment Corp.
Ellington Financial Inc. to Acquire Arlington Asset Investment Corp. May 30, 2023
Slide 2: Additional Information About the Merger
ADDITIONAL INFORMATION ABOUT THE MERGER In connection with the proposed merger, Ellington Financial Inc. (“EFC”) intends to file a registration statement on Form S-4 with the SEC that will include a proxy statement of Arlington Asset Investment Corp. (“AAIC”) and a prospectus of EFC. This communicat
Slide 3: Transaction Overview
Transaction Overview 3 Transaction Summary • Ellington Financial Inc. (NYSE:EFC) has entered into an agreement to acquire Arlington Asset Investment Corp. (NYSE: AAIC) by issuing new common shares of EFC to AAIC’s stockholders using an exchange ratio of 0.3619(1) • AAIC stockholders would also recei
Slide 4: Transaction Highlights
Transaction Highlights 4 Meaningful Increase to Scale Unique Opportunity to Redeploy Capital Synergistic New Business Financially Compelling Transaction Desirable Target Capital Structure Estimated pro forma market capitalization of >$1 billion(1) Well positioned with increased scale and liquidi
Slide 5: Arlington Asset Investment Corp Overview
Solar ABS 5% AAA Rated CMBS 56% First Lien CRE Loan 25% BPL RMBS 14% MSR Financing Receivables 62% Credit Investments 12% Agency MBS 26% Arlington Asset Investment Corp Overview Summary Statistics $(mm) Company Internally Managed Mortgage REIT Headquarters McLean, VA Market Capitalization(1) $78.0 T
Slide 6: Anticipated Benefits of the Transaction
Anticipated Benefits of the Transaction Anticipated Benefits to AAIC Common StockholdersAnticipated Benefits to EFC Stockholders Increased scale and expanded market presence should enhance EFC’s ability to take advantage of the attractive investment environment Transaction is estimated to be earning
Slide 7: Ellington Financial Overview
Ellington Financial Overview 7 $3.7bn Diversified Investment Portfolio 8.5% Annualized Total Return Since Inception $1.4bn Total Equity $1.0bn Common Equity Hybrid mortgage REIT with diversified investment portfolio and income stream: residential and commercial mortgage, consumer /corporate loans, a
Slide 8: About Ellington Management Group
About Ellington Management Group 8 Ellington and its Affiliated Management Companies • External manager is part of the Ellington family of SEC-registered investment advisors(4) • Ellington Management Group and its affiliates manage Ellington Financial Inc. (EFC), Ellington Residential Mortgage REIT
Slide 9: EFC's Performance Since Inception
EFC’s Performance Since Inception EFC #7 #2 #3 #6 #4 #5 #8 #9 Note: EFC peers are other hybrid mortgage REITs. Above charts have been normalized for stock splits. Reflects data reported from EFC’s inception through March 31, 2023. 9 Cumulative Total Economic Return Since EFC’s Inception (110%) (60%)
Slide 10: EFC: Stable Returns During Financial Crises, including 2008
EFC: Stable Returns During Financial Crises, including 2008… 0% 25% 50% 75% 100% 125% 2007 2007 2008 2008 2008 2008 EFC Peer #2 Peer #3 Peer #4 Peer #5 EFC #2 #3 #4 #5 (100%) (75%) (50%) (25%) 0% 2007 2007 2008 2008 2008 2008 EFC Peer #2 Peer #3 Peer #4 Peer #5 EFC #2 #3 #4 #5 Note: EFC peers are ot
Slide 11: ...and 2020
(110%) (90%) (70%) (50%) (30%) (10%) 10% 2019 2020 2020 2020 2020 EFC Peer #2 Peer #3 Peer #4 Peer #5 Peer #6 Peer #7 Peer #8 Peer #9 …and 2020 EFC #7 #2 #3 #6 #4 #5 #8 #9 Note: EFC peers are other hybrid mortgage REITs. Above charts have been normalized for stock splits. Q1 2020 Q 2020 Q3 2020 Q4 2
Slide 12: Definitions of Terms Used in This Presentation
The following defines certain terms used in this presentation: • “ABS” refers to asset-backed securities • “Agency MBS” refers to mortgage-backed securities for which the principal and interest payments are guaranteed by a U.S. government agency, such as the Government National Mortgage Association,
Slide 13: Investor Relations Contact
Investors: Investor Relations Ellington Financial Inc. (203) 409-3575 Info@ellingtonfinancial.com Media: Amanda Shpiner or Sara Widmann Gasthalter & Co. for Ellington Financial Inc. (212) 257-4170 Ellington@gasthalter.com Ellington Financial Inc. 53 Forest Ave Old Greenwich, CT 06870 www.ellingtonfi
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