Business

MFA Financial, Inc. Announces Fourth Quarter and Full Year 2024 Financial Results

NEW YORK, February 19, 2025--MFA Financial, Inc. (NYSE:MFA) today provided its financial results for the fourth quarter and full year ended December 31, 2024:

Mfa Financial, Inc.February 19, 20259
MFA Financial, Inc. Announces Fourth Quarter and Full Year 2024 Financial Results

About this update from Mfa Financial, Inc.

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(NYSE:MFA) today provided its financial results for the fourth quarter and full year ended December 31, 2024:","length":175,"tagName":"p"},{"type":"text","content":" Fourth Quarter 2024 Financial Results: ","length":38,"tagName":"p","attribs":{}},{"type":"list","items":[{"val":[{"type":"text","content":"MFA generated GAAP net income to common stockholders and participating securities for the fourth quarter of $(2.3) million, or $(0.02) per basic and diluted common share.","length":170,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Distributable earnings, a non-GAAP financial measure, were $40.8 million, or $0.39 per basic common share. MFA paid a regular cash dividend of $0.35 per common share on January 31, 2025.","length":186,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"GAAP book value at December 31, 2024 was $13.39 per common share. Economic book value, a non-GAAP financial measure, was $13.93 per common share.","length":145,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Total economic return was (1.2)% for the fourth quarter.","length":56,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"MFA closed the quarter with unrestricted cash of $338.9 million.","length":64,"tagName":"p","attribs":{}}]}],"tagName":"ul","bulletedList":true,"length":621,"olType":false},{"type":"text","content":" Full Year 2024 Highlights: ","length":26,"tagName":"p","attribs":{}},{"type":"list","items":[{"val":[{"type":"text","content":"GAAP net income to common stockholders and participating securities was $86.4 million, or $0.83 per basic common share and $0.82 per diluted common share, up from $47.3 million, or $0.46 per basic and diluted common share, in 2023.","length":231,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Distributable earnings were $1.57 per basic common share in 2024, down from $1.62 per share in 2023.","length":100,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"MFA paid quarterly dividends of $0.35 per common share throughout 2024, totaling $1.40 per common share.","length":104,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Total economic return was 5.2% for 2024.","length":40,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Asset yield averaged 6.64% in 2024, up from 6.16% in 2023.","length":58,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Interest income rose to $724.0 million from $605.6 million in 2023.","length":67,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Loan acquisition activity of $2.6 billion during 2024 included $1.2 billion of Non-QM loans, $991.5 million of Single-family transitional loans (including draws), $331.7 million of Single-family rental (SFR) loans and $145.0 million of Multifamily transitional loans (including draws).","length":285,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"MFA added $932.2 million of Agency MBS throughout 2024.","length":55,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"MFA completed eight securitizations in 2024 collateralized by $2.4 billion unpaid principal balance (UPB) of loans, including $1.1 billion UPB of Non-QM loans, $699.2 million UPB of Legacy RPL/NPL loans, and $599.0 million UPB of Transitional loans.","length":249,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Lima One mortgage banking income totaled $32.9 million.","length":55,"tagName":"p","attribs":{}}]}],"tagName":"ul","bulletedList":true,"length":1244,"olType":false},{"type":"text","content":""Our total economic return was (1.2)% in the fourth quarter to cap another volatile year for fixed-income investors," stated Craig Knutson, MFA’s Chief Executive Officer. "Although sharply higher Treasury yields negatively impacted our book value during the quarter, we took advantage of market conditions to acquire $1.2 billion of loans and securities at attractive levels. This included $470 million of Non-QM residential loans at an average coupon of 7.8% and average LTV of 67%. Lima One originated $236 million of new business purpose loans. In addition, we purchased $463 million of Agency MBS at spreads that remain historically wide, bringing that portfolio to $1.4 billion at year-end."","length":716,"tagName":"p"},{"type":"readMore"},{"type":"text","content":"Reflecting on the year, Mr. Knutson added: "Although our total economic return was a relatively modest 5.2%, 2024 was an important year as we positioned the company for the future. We announced key leadership changes at both MFA and Lima One, issued $190 million of senior unsecured notes to replace our maturing convertible notes, completed eight loan securitizations, significantly expanded our Agency MBS position and initiated programmatic sales of newly-originated SFR loans to third-party investors. We made over $3.5 billion of investments throughout the year at compelling yields without meaningfully increasing our exposure to recourse or mark-to-market borrowing. We believe the normalization of the yield curve should benefit us and other mortgage investors in 2025 and beyond."","length":799,"tagName":"p"},{"type":"text","content":" Q4 2024 Portfolio Activity ","length":26,"tagName":"p"},{"type":"list","items":[{"val":[{"type":"text","content":"Non-QM loan acquisitions totaled $470.1 million, growing MFA’s Non-QM portfolio to $4.4 billion at December 31, 2024.","length":117,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Lima One funded $151.1 million of new business purpose loans with a maximum loan amount of $235.9 million. Further, $108.1 million of draws were funded on previously originated Transitional loans. Lima One generated $8.5 million of mortgage banking income.","length":256,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"MFA added $462.9 million of Agency MBS during the quarter, bringing its Agency MBS portfolio to $1.4 billion.","length":109,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"Asset dispositions included $141.2 million of seasoned Non-QM loans and $110.9 million of newly originated SFR loans. MFA also sold 63 REO properties in the fourth quarter for aggregate proceeds of $17.1 million.","length":212,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"60+ day delinquencies (measured as a percentage of UPB) for MFA’s residential loan portfolio increased to 7.5% from 6.7% in the third quarter.","length":142,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"MFA completed three loan securitizations during the quarter, collateralized by over $1.0 billion UPB of Non-QM, Transitional and Legacy RPL/NPL loans, bringing its total securitized debt to approximately $5.8 billion.","length":217,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"MFA added $277.5 million of interest rate swaps and $450.0 million of swaps matured, bringing its swap position to a notional amount of $3.3 billion. At December 31, 2024, these swaps had a weighted average fixed pay interest rate of 2.20% and a weighted average variable receive interest rate of 4.49%.","length":303,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"MFA estimates the net effective duration of its investment portfolio at December 31, 2024 declined to 1.02 from 1.16 at September 30, 2024.","length":139,"tagName":"p","attribs":{}}]},{"val":[{"type":"text","content":"MFA’s Debt/Net Equity Ratio was 5.0x while recourse leverage was 1.7x at December 31, 2024.","length":91,"tagName":"p","attribs":{}}]}],"tagName":"ul","bulletedList":true,"length":1586,"olType":false},{"type":"text","content":" Webcast ","length":7,"tagName":"p"},{"type":"text","content":"MFA Financial, Inc. plans to host a live audio webcast of its investor conference call on Wednesday, February 19, 2025, at 11:00 a.m. (Eastern Time) to discuss its fourth quarter 2024 financial results. The live audio webcast will be accessible to the general public over the internet at http://www.mfafinancial.com . Earnings presentation materials will be posted on the MFA website prior to the conference call and an audio replay will be available on the website following the call.","length":484,"tagName":"p"},{"type":"text","content":" About MFA Financial, Inc. ","length":25,"tagName":"p"},{"type":"text","content":"MFA Financial, Inc. (NYSE: MFA) is a leading specialty finance company that invests in residential mortgage loans, residential mortgage-backed securities and other real estate assets. Through its wholly-owned subsidiary, Lima One Capital, MFA also originates and services business purpose loans for real estate investors. MFA has distributed $4.8 billion in dividends to stockholders since its initial public offering in 1998. MFA is an internally-managed, publicly-traded real estate investment trust.","length":502,"tagName":"p"},{"type":"text","content":"The following table presents MFA’s asset allocation as of December 31, 2024, and the fourth quarter 2024 yield on average interest-earning assets, average cost of funds and net interest rate spread for the various asset types.","length":226,"tagName":"p"},{"type":"text","content":" Table 1 - Asset Allocation ","length":26,"tagName":"p"},{"type":"table","headerItems":[],"items":[{"val":[{"colspan":"1","rowspan":"1","style":"vertical-align:bottom;border-bottom:solid black 1.0pt;padding-left:0.0px;width:22%;","val":[{"type":"text","content":" At December 31, 2024 ","length":20,"tagName":"p","attribs":{}}]},{"colspan":"1","rowspan":"1","style":"vertical-align:bottom;padding-left:0.0px;width:1%;","val":[{"type":"text","content":" ","length":6,"tagName":"p","attribs":{}}]},{"colspan":"3","rowspan":"1","style":"vertical-align:bottom;border-bottom:solid black 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