NEW YORK, August 05, 2026--(BUSINESS WIRE)--MFA Financial, Inc. (NYSE:MFA) today provided its financial results for the second quarter ended June 30, 2026:
Second Quarter 2026 Financial Results:
MFA generated GAAP net income to common stockholders and participating securities for the second quarter of $36.2 million, or $0.35 per basic common share and $0.34 per diluted common share.
Distributable earnings, a non-GAAP financial measure, were $12.2 million, or $0.12 per basic common share. Distributable earnings prior to realized credit losses, a non-GAAP financial measure, were $36.7 million, or $0.35 per basic common share.
GAAP book value at June 30, 2026 was $12.71 per common share. Economic book value, a non-GAAP financial measure, was $13.20 per common share.
Total economic return was 2.6% for the second quarter.
MFA closed the quarter with $141.2 million of unrestricted cash and $294.1 million of unpledged Agency MBS.
MFA paid a regular cash dividend of $0.36 per common share on July 31, 2026.
"We grew our investment portfolio, protected book value and made further progress on our strategic initiatives during the second quarter," said Craig Knutson, MFA's Chief Executive Officer. "Originations at Lima One grew by 44% to $316 million. We securitized or re-securitized over $800 million of loans. We resolved nearly $200 million of previously delinquent loans, driving our portfolio-wide default rate down to 7.0% from 7.8% at March 31. Although Distributable earnings were weighed down by realized losses incurred on several legacy multifamily loans, DE prior to realized credit losses rose to 35 cents, which we believe better reflects the underlying earnings power of our portfolio."
"We acquired over $1.6 billion of residential mortgage assets during the quarter," added Bryan Wulfsohn, President and Chief Investment Officer. "We purchased $462 million of Non-QM loans and increased our Agency MBS position to $4.1 billion. We sold $94 million of newly-originated SFR loans to third-party investors, generating $2.3 million in gain-on-sale income. Finally, we again repurchased over 500,000 shares of our common stock, bringing cumulative repurchases to 2 million shares since last year."
Q2 2026 Portfolio Activity
MFA's residential investment portfolio rose to $13.0 billion at June 30, 2026 from $12.5 billion at March 31, 2026.
MFA purchased $714.4 million of Agency MBS during the quarter, bringing its Agency MBS position to $4.1 billion. MFA also entered into forward contracts in the "to-be-announced" (TBA) market with a notional amount of $178.0 million to acquire additional Agency MBS, bringing its TBA position to a notional amount of $478.0 million at June 30, 2026.
Non-QM loan acquisitions totaled $462.3 million, bringing MFA's Non-QM portfolio to $5.7 billion at June 30, 2026.
Lima One funded $184.7 million of new business purpose loans with a maximum loan amount of $315.8 million. In addition, $84.9 million of draws were funded on previously originated Transitional loans. Lima One generated $8.4 million of mortgage banking income.
Portfolio runoff was $781.0 million. Asset dispositions included $94.5 million of newly-originated single-family rental (SFR) loans. MFA also sold 76 REO properties in the second quarter for aggregate net proceeds of $30.7 million.
60+ day delinquencies (measured as a percentage of UPB) for MFA's residential loan portfolio decreased to 7.0% at June 30, 2026 from 7.8% at March 31, 2026.
MFA completed two loan securitizations during the quarter collateralized by $817.4 million UPB of loans, bringing its total securitized debt to approximately $6.2 billion.
MFA added a net $538.1 million of new interest rate hedges and estimates the net effective duration of its investment portfolio was 0.94 years.
MFA's Debt/Net Equity Ratio was 6.6x while recourse leverage was 3.0x at June 30, 2026.
Webcast
MFA Financial, Inc. plans to host a live audio webcast of its investor conference call on Wednesday, August 5, 2026, at 11:00 a.m. (Eastern Time) to discuss its second quarter 2026 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.
About MFA Financial, Inc.
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 over $5 billion in dividends to stockholders since its initial public offering in 1998. MFA is an internally-managed, publicly-traded real estate investment trust.
The following tables present MFA's asset allocation as of June 30, 2026, and the yield on average interest-earning assets, average cost of funds, impact of net Swap carry and net interest rate spread for the various asset types.
Table 1 - Asset Allocation
At June 30, 2026 | Non-QM | Single-family | Single-family | Multifamily | Seasoned | Agency | Other, | Total | ||||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||||||||||||
Asset Amount | $ | 5,671 | $ | 1,153 | $ | 654 | $ | 321 | $ | 920 | $ | 4,091 | $ | 619 | $ | 13,429 | ||||||||||||||||
Financing Agreements with Non-mark-to-market Collateral Provisions | — | (16 | ) | (41 | ) | (14 | ) | — | — | — | (71 | ) | ||||||||||||||||||||
Financing Agreements with Mark-to-market Collateral Provisions | (683 | ) | (111 | ) | (314 | ) | (223 | ) | (78 | ) | (3,641 | ) | (115 | ) | (5,165 | ) | ||||||||||||||||
Securitized Debt | (4,356 | ) | (891 | ) | (200 | ) | — | (754 | ) | — | (2 | ) | (6,203 | ) | ||||||||||||||||||
Senior Notes and Other secured financing | — | — | — | — | — | — | (214 | ) | (214 | ) | ||||||||||||||||||||||
Net Equity Allocated | $ | 632 | $ | 135 | $ | 99 | $ | 84 | $ | 88 | $ | 450 | $ | 288 | $ | 1,776 | ||||||||||||||||
Debt/Net Equity Ratio (2) | 8.0 x | 7.5 x | 5.6 x | 2.8 x | 9.5 x | 8.1 x | 6.6 x |
(1) | Includes $141.2 million of cash and cash equivalents, $169.0 million of restricted cash, $56.0 million of other securities, $49.1 million of Other loans and $21.1 million of capital contributions made to loan origination partners, as well as other assets and other liabilities. | |
(2) | Total Debt/Net Equity ratio represents the sum of borrowings under our financing agreements as a multiple of net equity allocated. |
Table 2 - Net Interest Spread
For the Three-Month Period Ended | |||||||||
June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||
Non-QM Loans | |||||||||
Net Yield (1) | 5.79 | % | 5.90 | % | 5.79 | % | |||
Cost of Funding (2) | (5.09 | )% | (5.07 | )% | (5.14 | )% | |||
Impact of net Swap carry (3) | 0.28 | % | 0.36 | % | 0.70 | % | |||
Net Interest Spread | 0.98 | % | 1.19 | % | 1.35 | % | |||
Business Purpose Loans | |||||||||
Net Yield (1) | 7.12 | % | 7.12 | % | 7.99 | % | |||
Cost of Funding (2) | (5.42 | )% | (5.54 | )% | (6.07 | )% | |||
Impact of net Swap carry (3) | 0.29 | % | 0.32 | % | 0.42 | % | |||
Net Interest Spread | 1.99 | % | 1.90 | % | 2.34 | % | |||
Seasoned RPL/NPL Loans | |||||||||
Net Yield (1) | 7.74 | % | 7.93 | % | 8.69 | % | |||
Cost of Funding (2) | (4.26 | )% | (4.27 | )% | (4.29 | )% | |||
Impact of net Swap carry (3) | 0.36 | % | 0.36 | % | 0.40 | % | |||
Net Interest Spread | 3.84 | % | 4.02 | % | 4.80 | % | |||
Total Residential Whole Loans | |||||||||
Net Yield (1) | 6.30 | % | 6.42 | % | 6.85 | % | |||
Cost of Funding (2) | (5.08 | )% | (5.09 | )% | (5.35 | )% | |||
Impact of net Swap carry (3) | 0.29 | % | 0.35 | % | 0.58 | % | |||
Net Interest Spread | 1.51 | % | 1.68 | % | 2.08 | % | |||
Securities, at fair value | |||||||||
Net Yield (1) | 5.41 | % | 5.47 | % | 6.60 | % | |||
Cost of Funding (2) | (3.78 | )% | (3.84 | )% | (4.55 | )% | |||
Impact of net Swap carry (3) | 0.57 | % | 0.56 | % | 1.05 | % | |||
Net Interest Spread | 2.20 | % | 2.19 | % | 3.10 | % | |||
Total Balance Sheet | |||||||||
Net Yield (1) | 5.96 | % | 6.08 | % | 6.66 | % | |||
Cost of Funding (2) | (4.77 | )% | (4.84 | )% | (5.32 | )% | |||
Impact of net Swap carry (3) | 0.37 | % | 0.40 | % | 0.64 | % | |||
Net Interest Spread | 1.56 | % | 1.64 | % | 1.98 | % |
(1) | Reflects annualized interest income divided by average amortized cost. Excludes servicing costs. | |
(2) | Reflects annualized interest expense divided by average balance of agreements with mark-to-market collateral provisions (repurchase agreements), agreements with non-mark-to-market collateral provisions, and securitized debt. | |
(3) | Reflects the difference between Swap interest income received and Swap interest expense paid on our Swaps. While we have not elected hedge accounting treatment for Swaps, and, accordingly, net Swap carry is not presented in interest expense in our consolidated statement of operations, we believe it is appropriate to allocate net Swap carry by asset class to reflect the economic impact of our Swaps on the net interest spread shown in the table above. |
The following table presents the activity for our residential mortgage asset portfolio for the three months ended June 30, 2026:
Table 3 - Investment Portfolio Activity Q2 2026
(In Millions) | March 31, 2026 | Runoff (1) | Acquisitions & | Other (3) | June 30, 2026 | Change | |||||||||||||||
Residential whole loans and REO | $ | 8,922 | $ | (632 | ) | $ | 732 | $ | (126 | ) | $ | 8,896 | $ | (26 | ) | ||||||
Securities, at fair value | 3,586 | (149 | ) | 714 | (4 | ) | 4,147 | 561 | |||||||||||||
Total | $ | 12,508 | $ | (781 | ) | $ | 1,446 | $ | (130 | ) | $ | 13,043 | $ | 535 |
(1) | Primarily includes principal repayments and sales of REO. | |
(2) | Includes draws on previously originated Transitional loans. | |
(3) | Primarily includes sales of residential whole loans and securities, changes in fair value and changes in the allowance for credit losses. |
The following tables present information on our investments in residential whole loans:
Table 4 - Portfolio Composition/Residential Whole Loans
Held at Carrying Value | Held at Fair Value | Total | ||||||||||||||||||||
(Dollars in Thousands) | June 30, | December 31, | June 30, | December 31, | June 30, | December 31, | ||||||||||||||||
Non-QM loans | $ | 530,198 | $ | 593,213 | $ | 5,141,822 | $ | 4,753,480 | $ | 5,672,020 | $ | 5,346,693 | ||||||||||
Business purpose loans: | ||||||||||||||||||||||
Single-family rental loans | $ | 78,747 | $ | 88,112 | $ | 1,075,637 | $ | 1,147,234 | $ | 1,154,384 | $ | 1,235,346 | ||||||||||
Single-family transitional loans (1) | 7,044 | 7,051 | 648,719 | 711,294 | 655,763 | 718,345 | ||||||||||||||||
Multifamily transitional loans | — | — | 320,882 | 489,637 | 320,882 | 489,637 | ||||||||||||||||
Total Business purpose loans | $ | 85,791 | $ | 95,163 | $ | 2,045,238 | $ | 2,348,165 | $ | 2,131,029 | $ | 2,443,328 | ||||||||||
Seasoned RPL/NPL loans | 396,206 | 414,676 | 528,951 | 564,340 | 925,157 | 979,016 | ||||||||||||||||
Other loans | — | — | 49,054 | 51,022 | 49,054 | 51,022 | ||||||||||||||||
Allowance for Credit Losses | (9,393 | ) | (9,705 | ) | — | — | (9,393 | ) | (9,705 | ) | ||||||||||||
Total Residential whole loans | $ | 1,002,802 | $ | 1,093,347 | $ | 7,765,065 | $ | 7,717,007 | $ | 8,767,867 | $ | 8,810,354 | ||||||||||
Number of loans | 4,661 | 4,941 | 18,772 | 18,824 | 23,433 | 23,765 |
(1) | Includes $311.7 million and $300.2 million of loans collateralized by new construction projects at origination as of June 30, 2026 and December 31, 2025, respectively. |
Table 5 - Yields and Average Balances/Residential Whole Loans
For the Three-Month Period Ended | ||||||||||
June 30, 2026 | March 31, 2026 | June 30, 2025 | ||||||||
(Dollars in Thousands) | Interest | Average | Average | Interest | ... |