Mfa Financial, Inc. · NYSE:MFA
Mfa Financial — Q1 2025 Earnings Presentation
27 slides from Mfa Financial's earnings presentation, May 6, 2025
Slide 1: Company Update First Quarter 2025
Company Update FIRST QUARTER 2025
Slide 2: Forward-looking statements
Q3 2022 Financial Snapshot Forward-looking statements When used in this presentation or other written or oral communications, statements that are not historical in nature, including those containing words such as “will,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “s
Slide 3: MFA at a glance
MFA at a glance Leading hybrid mortgage REIT with extensive experience in managing residential mortgage assets through economic cycles Total assets Total equity Dividend yield $11.5B as of March 31, 2025 $1.8Bv as of March 31, 2025 14.4% as of May 2, 2025 Listed on NYSE in Common dividends Loans acq
Slide 4: Q1 2025 financial snapshot
Q1 2025 financial snapshot GAAP Economic Distributable GAAP net income3 book value book value2 earnings4 $13.28 $13.84 $0.32 per common share $0.29 per common share per common share per common share Total economic Recourse leverage5 Unrestricted cash Q1 dividend return6 1.8x $254M $0.36 1.9% per com
Slide 5: Q1 2025 Company Highlights
Total economic return of 1.9% for the first quarter Q1 2025 Economic book value declined slightly by 0.6% as lower rates were offset by wider credit spreads Company Increased quarterly dividend to $0.36 per share, reflecting increasing earnings power of portfolio Highlights Acquired $383M of
Slide 6: Q1 2025 Investment Activity
Acquired $875M of residential loans and securities, growing MFA’s Investment Portfolio at March 319 Q1 2025 investment portfolio by $225M to $10.7B Other $0.4B Investment Purchased $383M of non-qualified mortgage (Non-QM) loans Agency MBS $1.6B Activity Lima One funded $223M8 of new business p
Slide 7: Q1 2025 Liability Highlights
Liabilities ($B) at March 31 Continued emphasis on non-mark-to-market (non-MTM)10 borrowing $10.0 Q1 2025 83% of our loan-based financing and 70% of all liabilities are non-MTM $9.0 Agency Repo Liability Effective cost of funds rose to 4.68% primarily due to expiration of MTM $8.0 MTM Highligh
Slide 8: Q1 2025 Interest Rate Hedges
Added $602M of longer-dated swaps, bringing swap position to $3.4B Q1 2025 Weighted average fixed pay rate of 2.66% and variable receive rate of 4.41%11 at March 31 Interest Rate Generated net positive carry of $15M Hedges $550M of swaps matured during Q1 and $125M will mature in Q2 Net po
Slide 9: Q1 2025 Portfolio Credit
LTV by Loan Product Type12 LTV Distribution12 Q1 2025 $5B Portfolio 69% 65% $4B Credit 60% 59% 57% $3B Metrics 51% $2B $1B Non-QM Loans SFR Loans Single-family Multifamily Legacy RPL/NPL Total - Transitional Loans Transitional Loans Loans <60% 60-70% 70-80% 80-90% 90-100% >100 % Portfolio 60+ Delinq
Slide 10: Q1 2025 Lima One Highlights
Continued progress augmenting Lima One’s sales force and enhancing technology Q1 2025 platform, including a new borrower portal Lima One Hired key executives to strengthen senior leadership team Highlights Added 16 new loan officers year-to-date Origination volume was $213M7 Single-family
Slide 11: Q1 2025 Non-QM Loans
Portfolio statistics 3/31/25 12/31/24 1 Non-QM loan portfolio grew to $4.6B UPB 1 Q1 2025 Acquired $383M of new loans with average LTV of 65% and UPB ($M) $4,608 $4,4091 Average loan balance $509K $509K1 Non-QM average coupon of 7.8% Gross coupon 6.74% 6.65%1 Loans Issued our 17th Non-QM secur
Slide 12: Q1 2025 Single-family Rental Loans
Portfolio statistics 3/31/25 12/31/24 SFR loan portfolio remained stable at $1.4B UPB 1 1 Q1 2025 Lima One originated $56M UPB of loans with average LTV of UPB ($M) $1,356 $1,4171 Average loan balance $226K $227K1 Single-family 67% and average coupon of 7.68% Gross coupon 6.38% 6.39%1 Rental Loa
Slide 13: Q1 2025 Single-family Transitional
Portfolio statistics 3/31/25 12/31/24 Single-family transitional loan portfolio declined to $1B UPB 1 1 Q1 2025 Lima One originated $157M of new loans, offset by $249M in 7 UPB ($M) $1,006 $1,1071 Maximum loan balance ($M) $1,292 $1,427 Single-family loan repayments 1 Average loan balance $553K
Slide 14: Q1 2025 Multifamily Transitional
Multifamily loan portfolio declined to $875M UPB Portfolio statistics 3/31/25 12/31/24 1 1 Q1 2025 $106M of loan repayments during the quarter UPB $875M $977M1 Maximum loan balance ($M) $923M $1,0351 Multifamily New originations at Lima One remain paused Average loan balance $3.4M $3.4M1 Trans
Slide 15: Q1 2025 Legacy RPL/NPL
Legacy RPL/NPL portfolio remained stable at $1.2B UPB Portfolio statistics 3/31/25 12/31/24 1 1 Q1 2025 95% of loans purchased between 2014-2019 were performing, paid UPB ($M) $1,196 $1,2221 in full (PIF), REO or liquidated at Dec. 31 Average loan balance $193K $195K1 Legacy Gross coupon 5.15% 5
Slide 16: Q1 2025 Agency MBS
Portfolio statistics 3/31/25 12/31/24 Added $268M of Agency MBS, growing portfolio to $1.6B 1 1 Q1 2025 Purchases consisted primarily of low pay-up (premium to TBA Current face ($M) $1,642 $1,4041 Fair value ($M) $1,648 $1,3931 Agency price) pools that provide some prepayment protection Coupon 5
Slide 17: Appendix
Appendix 17with Houses James Casebere, Landscape (Dutchess County, NY) #2, 2010 (detail)
Slide 18: MFA Financial Overview
MFA Financial, Inc. (NYSE: MFA) is an internally managed real estate investment trust (REIT) that invests in U.S. residential mortgage loans and mortgage-backed securities MFA Financial MFA focuses primarily on mortgage subsectors in which it tries to avoid direct competition with banks and gove
Slide 19: Lima One: Leading Nationwide BPL Originator and Servicer
Lima One: Leading Nationwide BPL Originator and Servicer Fully Integrated BPL Platform Product Offerings Lima One is an industry-leading business purpose lender wholly- Lima One offers a diverse selection of both short-term and long-term owned by MFA and headquartered in Greenville, S.C. financi
Slide 20: Book Value Potential Upside
Book Value Potential Upside Economic book value has $1.28 per share of potential upside Potential Upside in Economic Book Value19 $18 Many of our fixed-rate Non-QM and SFR loans are marked at $4.84 a discount to par due to the impact of higher interest rates $16 $(1.34) $2.62 $1.28 potential W
Slide 21: MFA-Issued Securitizations Outstanding
MFA-Issued Securitizations Outstanding Original Collateral Current Collateral Original UPB Sold Outstanding Balance of Weighted Average Coupon (WAC) WAC of Securitization Name Loan Product Type Settlement Date Bonds Sold ($M) Callable Date UPB ($M)20 UPB ($M)20 (%)21 Bonds Sold ($M) of Outstanding B
Slide 22: Select Financial Metrics
Select Financial Metrics Asset Yield Net Interest Spread Distributable Earnings vs. Dividend 2.50% 6.79% 6.71% $0.50 7.00% 6.58% 6.46% 6.52% 2.16% 2.18% 2.06% 1.99% 6.00% 2.00% 1.84% $0.40 5.00% 1.50% $0.30 4.00% 3.00% 1.00% $0.20 2.00% 0.50% $0.10 1.00% 0.00% 0.00% $- Q1 2024 Q2 2024 Q3 2024 Q4 202
Slide 23: Reconciliation of GAAP net income to non-GAAP Distributable earnings
Reconciliation of GAAP net income to non-GAAP Distributable earnings “Distributable earnings” is a non-GAAP financial measure of our operating performance, within the meaning of Regulation G and Item 10(e) of Regulation S-K, as promulgated by the Securities and Exchange Commission. Distributable ear
Slide 24: Reconciliation of GAAP Book Value to Economic Book Value
Reconciliation of GAAP Book Value to Economic Book Value “Economic book value” is a non-GAAP financial measure of our financial position. To calculate our Economic book value, our portfolios of Residential whole loans and securitized debt held at carrying value are adjusted to their fair value, rath
Slide 25: Book Value and Economic Book Value Rollforward
Book Value and Economic Book Value Rollforward GAAP Economic Book value per common share as of 12/31/24 $13.39 $13.93 Net income available to common shareholders 0.32 0.32 Common stock dividends declared (0.36) (0.36) Fair value changes attributable to residential mortgage securities and other (0.07
Slide 26: GAAP Segment Reporting
GAAP Segment Reporting (Dollars in millions) Mortgage- Related Assets Lima One Corporate Totald Three months ended March 31, 2025 Interest Income $ 112.8 $ 65.3 $ 2.4 $ 180.51 Interest Expense 77.4 41.1 4.5 123.01 Net Interest Income/(Expense) $ 35.4 $ 24.2 $ (2.1) $ 57.51 (Provision)/Reversal of Pr
Slide 27: Endnotes
1) Purchased value of all residential whole loans acquired by MFA since 2014. 2) Economic book value is a non-GAAP financial measure. Refer to slide 24 for further information regarding the calculation of this measure and a reconciliation to GAAP book value. Endnotes 3) 4) GAAP net income presented