EFC Ellington Financial Inc

Ellington Financial Inc. (NYSE: EFC) ("we," "us," or "our") today reported financial results for the quarter ended December 31, 2023.

Highlights

• Net income attributable to common stockholders of $12.5 million, or $0.18 per common share.1
  • $27.3 million, or $0.38 per common share, from the investment portfolio.
    • $12.7 million, or $0.18 per common share, from the credit strategy.
    • $14.6 million, or $0.20 per common share, from the Agency strategy.
  • $(3.4) million, or $(0.04) per common share, from Longbridge.
• Adjusted Distributable Earnings2 of $18.9 million, or $0.27 per common share.
• Book value per common share as of December 31, 2023 of $13.83, including the effects of dividends of $0.45 per common share for the quarter.
• Management expects to recommend to our board of directors a reduction of the monthly dividend from $0.15 to $0.13 per share, beginning in March, which would imply a dividend yield of 12.8% based on the February 23, 2024 closing stock price of $12.16 per share.
• Recourse debt-to-equity ratio3 of 2.0:1 as of December 31, 2023, adjusted for unsettled purchases and sales. Including all non-recourse borrowings, which primarily consist of securitization-related liabilities, debt-to-equity ratio of 8.6:14.
• Cash and cash equivalents of $228.9 million as of December 31, 2023, in addition to other unencumbered assets of $416.3 million.
• Closed the merger with Arlington Asset Investment Corp. ("Arlington") on December 14, 2023, which was approximately 1.1% dilutive to book value per share.

Fourth Quarter 2023 Results

“In the fourth quarter, we reported net income of $0.18 per share and adjusted distributable earnings of $0.27 per share. From an economic return perspective, strong performance from our residential transition loan portfolio and our Agency and non-Agency MBS didn't quite offset merger-related dilution and expenses, and net losses from Longbridge and other positions, leading to a small negative economic return overall for the quarter,” said Laurence Penn, Chief Executive Officer and President.

“In December, we completed the merger with Arlington, immediately adding scale and further strengthening our balance sheet. We promptly got to work freeing up capital in the Arlington portfolio, both monetizing Arlington’s liquid assets in a constructive market and adding modest leverage to the MSR portfolio. Since then, we have been rotating that capital into higher-yielding investments, which we expect to drive incremental value to shareholders in 2024. Despite incremental expansion of the portfolio in the fourth quarter, our recourse leverage ratio actually ticked down sequentially after absorbing Arlington’s low-leverage capital structure. In addition, in recent months we’ve been choosing to sell much of our non-QM loan portfolio instead of securitizing it, to take advantage of strong whole loan bids in the marketplace.

“Our adjusted distributable earnings did drop during the quarter, but it should recover as Longbridge continues to build back towards profitability, as we work out a few nonperforming commercial mortgage loans and REO assets, and as we continue to deploy new capital and rotate capital into higher-yielding sectors. That said, management expects to recommend to the board a reduction of the monthly dividend from $0.15 to $0.13 per share, beginning in March. Notably, this is just $0.01 below the $0.14 per share monthly dividend level we set five years ago, when we first shifted from a quarterly to a monthly dividend.

“Looking ahead, our diversified capital base now includes the common equity, low-cost preferred equity and unsecured debt added through the merger. This diversified capital base, together with our ample liquidity and additional untapped borrowing capacity, should allow us to capitalize on the many attractive investment opportunities we are seeing, including high-yielding lending opportunities in our proprietary loan pipelines and distressed situations in commercial real estate debt.”

Financial Results

Investment Portfolio Summary

Our investment portfolio generated net income attributable to common stockholders of $27.3 million, consisting of $12.7 million from the credit strategy and $14.6 million from the Agency strategy.

Credit Performance

Our total long credit portfolio, excluding non-retained tranches of consolidated non-QM securitization trusts, increased by 10% to $2.74 billion as of December 31, 2023, from $2.48 billion as of September 30, 2023. The increase was driven primarily by the addition of Arlington's MSR-related portfolio and a larger residential transition loan portfolio, where net purchases exceeded principal paydowns. A portion of the increase was offset by smaller commercial bridge loan and non-QM loan portfolios, as loan paydowns (and in the case of non-QM, loan sales) exceeded new originations during the quarter.

Strong net interest income5 and net gains on our non-agency RMBS investments drove positive results in the credit strategy, with net losses on consumer loans, interest rate and credit hedges being the primary detractors. Our investments in loan originators generated a net positive gain overall as well. We saw a further uptick in delinquencies on our residential and commercial mortgage loan portfolios, and while those portfolios continue to experience low levels of realized credit losses and strong overall credit performance, we are monitoring developments closely and diligently working out a handful of nonperforming commercial mortgage assets.

During the quarter, the net interest margin6 on our credit portfolio declined to 2.66% from 2.95%, driven by lower asset yields (which includes the drag from nonperforming loans) and a higher cost of funds. We continued to benefit from positive carry on our interest rate swap hedges, where we overall receive a higher floating rate and pay a lower fixed rate.

Agency Performance

Our total long Agency RMBS portfolio decreased by 12% quarter over quarter to $853.2 million, as principal repayments and net sales exceeded net gains.

In October, interest rates and volatility increased, which drove yield spreads wider in most fixed income sectors, including Agency RMBS. Markets then reversed course, however, with interest rates and volatility declining, and yield spreads tightening, through year end. Overall for the fourth quarter, Agency RMBS outperformed U.S. Treasury securities and interest rate swaps, with lower and intermediate coupon RMBS exhibiting the most pronounced outperformance. As a result, significant net gains on our Agency RMBS portfolio (which was concentrated in those coupons) exceeded net losses on our interest rate hedges, which drove strong performance from our Agency RMBS strategy for the quarter.

Average pay-ups on our specified pools increased to 0.84% as of December 31, 2023, as compared to 0.75% as of September 30, 2023.

During the quarter, an increase in asset yields on our Agency strategy only partially offset an increase in cost of funds, which caused the net interest margin5 on our Agency RMBS, excluding the Catch-up Amortization Adjustment, to decrease to 0.69% from 1.05%. We continued to benefit from positive carry on our interest rate swap hedges, where we overall receive a higher floating rate and pay a lower fixed rate, although the extent of this benefit declined quarter over quarter.

Longbridge Summary

Our Longbridge portfolio generated a net loss attributable to common stockholders of $(3.4) million for the fourth quarter as net losses in originations and on interest rate hedges exceeded net gains on proprietary loans, net gains on the HMBS MSR Equivalent7 and MSRs on reverse mortgage loans ("Reverse MSRs"), and servicing income. In originations, while lower volumes drove the net loss, tighter yield spreads and lower interest rates did improve gain-on-sale margins on both HECM and proprietary loans.

Our Longbridge portfolio increased by 13% sequentially to $552.4 million as of December 31, 2023, driven primarily by proprietary reverse mortgage loan originations.

Corporate/Other Summary

Our results for the quarter reflect a net gain, driven by the decline in interest rates, on the fixed receiver interest rate swaps that we use to hedge the fixed payments on both our unsecured long-term debt and our preferred equity.

Our results for the quarter also include the bargain purchase gain associated with the closing of the merger with Arlington, partially offset by merger-related transaction expenses including certain compensation and severance costs that had been previously negotiated as part of the merger agreement. Although the bargain purchase gain, net of the related expenses, contributed positively to net income during the quarter, the common shares issued as consideration for the merger were issued at a discount to our book value per share, and the transaction was dilutive to common shareholders overall by approximately 1.1%.

Finally, our results include the additional costs associated with the termination of our previously announced merger with Great Ajax Corp in October, including the initial markdown on the Great Ajax common shares we purchased in connection with that termination, partially offset by net gains on the fixed payer interest rate swaps that we held as a hedge prior to termination of the merger.

_________________________

1

Includes $(11.4) million of certain corporate/other income and expense items not attributed to either the investment portfolio or Longbridge segments. Such amount primarily includes the bargain purchase gain related to the Arlington Merger, certain compensation and benefits, certain professional fees, management fees, preferred dividends accrued, and certain realized and unrealized gains and losses on our Unsecured debt, at fair value.

2

Adjusted Distributable Earnings is a non-GAAP financial measure. See "Reconciliation of Net Income (Loss) to Adjusted Distributable Earnings" below for an explanation regarding the calculation of Adjusted Distributable Earnings.

3

Excludes U.S. Treasury securities and repo borrowings at certain unconsolidated entities that are recourse to us. Including such borrowings, our debt-to-equity ratio, adjusted for unsettled purchases and sales, based on total recourse borrowings was 2.1:1 as of December 31, 2023.

4

Excludes U.S. Treasury securities.

5

Excludes any interest income and interest expense items from interest rate hedges, net credit hedges and other activities, net.

6

Net interest margin represents the weighted average asset yield less the weighted average secured financing cost of funds on such assets. It also includes the effect of actual and accrued periodic payments on interest rate swaps used to hedge the assets.

7

HMBS assets are consolidated for GAAP reporting purposes, and HMBS-related obligations are accounted for on the balance sheet as secured borrowings. The fair value of HMBS assets less the fair value of the HMBS-related obligations approximate fair value of the HMBS MSR Equivalent.

Credit Portfolio(1)

The following table summarizes our credit portfolio holdings as of December 31, 2023 and September 30, 2023:

 

 

December 31, 2023

 

September 30, 2023

($ in thousands)

 

Fair Value

 

%

 

Fair Value

 

%

Dollar denominated:

 

 

 

 

 

 

 

 

CLOs(2)

 

$

33,920

 

0.8

%

 

$

29,294

 

0.8

%

CMBS

 

 

45,432

 

1.1

%

 

 

20,587

 

0.5

%

Commercial mortgage loans and REO(3)(4)

 

 

330,296

 

7.9

%

 

 

365,329

 

9.4

%

Consumer loans and ABS backed by consumer loans(2)

 

 

83,130

 

2.0

%

 

 

90,474

 

2.3

%

Other loans and ABS(5)

 

 

10,314

 

0.3

%

 

 

1,285

 

—

%

Corporate debt and equity and corporate loans

 

 

29,720

 

0.7

%

 

 

21,836

 

0.6

%

Debt and equity investments in loan origination-related entities(6)

 

 

38,528

 

0.9

%

 

 

37,947

 

1.0

%

Non-Agency RMBS

 

 

253,522

 

6.1

%

 

 

259,543

 

6.7

%

Non-QM loans and retained non-QM RMBS(7)

 

 

2,037,914

 

48.9

%

 

 

2,060,036

 

53.0

%

Residential transition loans and other residential mortgage loans and REO(3)

 

 

1,113,816

 

26.8

%

 

 

975,667

 

25.1

%

Forward MSR-related investments

 

 

163,336

 

3.9

%

 

 

—

 

—

%

Non-Dollar denominated:

 

 

 

 

 

 

 

 

CLOs(2)

 

 

4,234

 

0.1

%

 

 

1,578

 

0.1

%

Corporate debt and equity

 

 

189

 

—

%

 

 

177

 

—

%

RMBS(8)

 

 

19,674

 

0.5

%

 

 

19,608

 

0.5

%

Total long credit portfolio

 

$

4,164,025

 

100.0

%

 

$

3,883,361

 

100.0

%

Less: Non-retained tranches of consolidated securitization trusts

 

 

1,424,804

 

 

 

 

1,398,748

 

 

Total long credit portfolio excluding non-retained tranches of consolidated securitization trusts

 

$

2,739,221

 

 

 

$

2,484,613

 

 

(1)

This information does not include U.S. Treasury securities, securities sold short, or financial derivatives.

(2)

Includes equity investments in securitization-related vehicles.

(3)

In accordance with U.S. GAAP, REO is not considered a financial instrument and as a result is included at the lower of cost or fair value.

(4)

Includes equity investments in unconsolidated entities holding commercial mortgage loans and REO.

(5)

Includes equity investment in an unconsolidated entity which purchases certain other loans for eventual securitization.

(6)

Includes corporate loans to certain loan origination entities in which we hold an equity investment.

(7)

Retained non-QM RMBS represents RMBS issued by non-consolidated Ellington-sponsored non-QM loan securitization trusts, and interests in entities holding such RMBS.

(8)

Includes an equity investment in an unconsolidated entity holding European RMBS.

Agency RMBS Portfolio(1)

The following table summarizes our Agency RMBS portfolio holdings as of December 31, 2023 and September 30, 2023:

 

 

December 31, 2023

 

September 30, 2023

($ in thousands)

 

Fair Value

 

%

 

Fair Value

 

%

Long Agency RMBS:

 

 

 

 

 

 

 

 

Fixed rate

 

$

798,211

 

93.5

%

 

$

914,262

 

94.8

%

Floating rate

 

 

5,130

 

0.6

%

 

 

5,154

 

0.5

%

Reverse mortgages

 

 

37,171

 

4.4

%

 

 

33,529

 

3.5

%

IOs

 

 

12,712

 

1.5

%

 

 

11,341

 

1.2

%

Total long Agency RMBS

 

$

853,224

 

100.0

%

 

$

964,286

 

100.0

%

(1)

This information does not include U.S. Treasury securities, securities sold short, or financial derivatives.

Longbridge Portfolio(1)

Longbridge originates reverse mortgage loans, including home equity conversion mortgage loans, or "HECMs," which are insured by the FHA and which are eligible for inclusion in GNMA-guaranteed HECM-backed MBS, or "HMBS." Upon securitization, the HECMs remain on our balance sheet under GAAP, and Longbridge retains the mortgage servicing rights associated with the HMBS, or the "HMBS MSR Equivalent." Longbridge also originates "proprietary reverse mortgage loans," which are not insured by the FHA, and Longbridge has typically retained the associated MSRs. The following table summarizes Longbridge's loan-related assets as of December 31, 2023 and September 30, 2023:

 

 

December 31, 2023

 

September 30, 2023

 

 

(In thousands)

HMBS assets(2)

 

$

8,511,682

 

 

$

8,256,881

 

Less: HMBS liabilities

 

 

(8,423,235

)

 

 

(8,181,922

)

HMBS MSR Equivalent

 

 

88,447

 

 

 

74,959

 

Unsecuritized HECM loans(3)

 

 

102,553

 

 

 

135,061

 

Proprietary reverse mortgage loans

 

 

329,576

 

 

 

247,021

 

Reverse MSRs

 

 

29,580

 

 

 

29,653

 

Unsecuritized REO

 

 

2,218

 

 

 

1,484

 

Total

 

$

552,374

 

 

$

488,178

 

(1)

This information does not include financial derivatives or loan commitments.

(2)

Includes HECM loans, related REO, and claims or other receivables.

(3)

As of December 31, 2023, includes $6.9 million of active HECM buyout loans, $10.2 million of inactive HECM buyout loans, and $4.9 million of other inactive HECM loans. As of September 30, 2023, includes $7.3 million of active HECM buyout loans, $12.1 million of inactive HECM buyout loans, and $4.7 million of other inactive HECM loans.

The following table summarizes Longbridge's origination volumes by channel for the three-month periods ended December 31, 2023 and September 30, 2023:

($ In thousands)

 

December 31, 2023

 

September 30, 2023

Channel

 

Units

 

New Loan Origination Volume(1)

 

% of New Loan Origination Volume

 

Units

 

New Loan Origination Volume(1)

 

% of New Loan Origination Volume

Retail

 

363

 

$

47,868

 

18

%

 

384

 

$

55,576

 

18

%

Wholesale and correspondent

 

1,223

 

 

214,314

 

82

%

 

1,367

 

 

251,215

 

82

%

Total

 

1,586

 

$

262,182

 

100

%

 

1,751

 

$

306,791

 

100

%

(1)

Represents initial borrowed amounts on reverse mortgage loans.

Financing

Our recourse debt-to-equity ratio2, excluding U.S. Treasury securities and adjusted for unsettled purchases and sales, decreased to 2.0:1 at December 31, 2023 from 2.3:1 at September 30, 2023. The decline was primarily driven by a significant increase in shareholders' equity upon closing of the Arlington merger, only partially offset by increased borrowings related to our larger portfolio. Our overall debt-to-equity ratio, excluding U.S. Treasury securities and adjusted for unsettled purchases and sales, also decreased during the quarter, to 8.4:1 as of December 31, 2023, as compared to 9.4:1 as of September 30, 2023.

The following table summarizes our outstanding borrowings and debt-to-equity ratios as of December 31, 2023 and September 30, 2023:

 

 

December 31, 2023

 

September 30, 2023

 

 

Outstanding Borrowings(1)

 

Debt-to-Equity Ratio(2)

 

Outstanding Borrowings(1)

 

Debt-to-Equity Ratio(2)

 

 

(In thousands)

 

 

 

(In thousands)

 

 

Recourse borrowings(3)(4)

 

$

3,510,945

 

2.3:1

 

$

3,084,174

 

2.3:1

Non-recourse borrowings(4)

 

 

9,847,903

 

6.4:1

 

 

9,586,489

 

7.2:1

Total Borrowings

 

$

13,358,848

 

8.7:1

 

$

12,670,663

 

9.5:1

Total Equity

 

$

1,535,612

 

 

 

$

1,337,417

 

 

Recourse borrowings excluding U.S. Treasury securities, adjusted for unsettled purchases and sales

 

 

 

2.0:1

 

 

 

2.3:1

Total borrowings excluding U.S. Treasury securities, adjusted for unsettled purchases and sales

 

 

 

8.4:1

 

 

 

9.4:1

(1)

Includes borrowings under repurchase agreements, other secured borrowings, other secured borrowings, at fair value, and unsecured debt, at par.

(2)

Overall debt-to-equity ratio is computed by dividing outstanding borrowings by total equity. The debt-to-equity ratio does not account for liabilities other than debt financings.

(3)

Excludes repo borrowings at certain unconsolidated entities that are recourse to us. Including such borrowings, our debt-to-equity ratio based on total recourse borrowings is 2.4:1 as of both December 31, 2023 and September 30, 2023.

(4)

All of our non-recourse borrowings are secured by collateral. In the event of default under a non-recourse borrowing, the lender has a claim against the collateral but not any of the other assets held by us or our consolidated subsidiaries. In the event of default under a recourse borrowing, the lender's claim is not limited to the collateral (if any).

The following table summarizes our operating results by strategy for the three-month period ended December 31, 2023:

 

 

Investment Portfolio

 

Longbridge

 

Corporate/Other

 

Total

 

Per Share

(In thousands except per share amounts)

 

Credit

 

Agency

 

Investment Portfolio Subtotal

 

 

 

 

Interest income and other income (1)

 

$

74,769

 

 

$

11,580

 

 

$

86,349

 

 

$

10,930

 

 

$

1,996

 

 

$

99,275

 

 

$

1.38

 

Interest expense

 

 

(43,503

)

 

 

(12,923

)

 

 

(56,426

)

 

 

(7,819

)

 

 

(3,454

)

 

 

(67,699

)

 

 

(0.94

)

Realized gain (loss), net(2)

 

 

(19,064

)

 

 

(11,075

)

 

 

(30,139

)

 

 

(27

)

 

 

28,175

 

 

 

(1,991

)

 

 

(0.03

)

Unrealized gain (loss), net

 

 

28,364

 

 

 

57,043

 

 

 

85,407

 

 

 

15,661

 

 

 

(5,604

)

 

 

95,464

 

 

 

1.32

 

Net change from reverse mortgage loans and HMBS obligations

 

 

—

 

 

 

—

 

 

 

—

 

 

 

28,903

 

 

 

—

 

 

 

28,903

 

 

 

0.40

 

Earnings in unconsolidated entities

 

 

2,547

 

 

 

—

 

 

 

2,547

 

 

 

—

 

 

 

—

 

 

 

2,547

 

 

 

0.04

 

Interest rate hedges and other activity, net(3)

 

 

(20,238

)

 

 

(30,067

)

 

 

(50,305

)

 

 

(25,684

)

 

 

9,730

 

 

 

(66,259

)

 

 

(0.92

)

Credit hedges and other activities, net(4)

 

 

(4,525

)

 

 

—

 

 

 

(4,525

)

 

 

—

 

 

 

1,463

 

 

 

(3,062

)

 

 

(0.04

)

Income tax (expense) benefit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(129

)

 

 

(129

)

 

 

—

 

Investment related expenses

 

 

(3,169

)

 

 

—

 

 

 

(3,169

)

 

 

(6,386

)

 

 

—

 

 

 

(9,555

)

 

 

(0.13

)

Other expenses(5)

 

 

(1,877

)

 

 

—

 

 

 

(1,877

)

 

 

(18,940

)

 

 

(37,352

)

 

 

(58,169

)

 

 

(0.81

)

Net income (loss)

 

 

13,304

 

 

 

14,558

 

 

 

27,862

 

 

 

(3,362

)

 

 

(5,175

)

 

 

19,325

 

 

 

0.27

 

Dividends on preferred stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(6,104

)

 

 

(6,104

)

 

 

(0.08

)

Net (income) loss attributable to non-participating non-controlling interests

 

 

(586

)

 

 

—

 

 

 

(586

)

 

 

6

 

 

 

(5

)

 

 

(585

)

 

 

(0.01

)

Net income (loss) attributable to common stockholders and participating non-controlling interests

 

 

12,718

 

 

 

14,558

 

 

 

27,276

 

 

 

(3,356

)

 

 

(11,284

)

 

 

12,636

 

 

 

0.18

 

Net (income) loss attributable to participating non-controlling interests

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(139

)

 

 

(139

)

 

 

0.00

 

Net income (loss) attributable to common stockholders

 

$

12,718

 

 

$

14,558

 

 

$

27,276

 

 

$

(3,356

)

 

$

(11,423

)

 

$

12,497

 

 

$

0.18

 

Net income (loss) attributable to common stockholders per share of common stock

 

$

0.18

 

 

$

0.20

 

 

$

0.38

 

 

$

(0.04

)

 

$

(0.16

)

 

$

0.18

 

 

 

Weighted average shares of common stock and convertible units(6) outstanding

 

 

 

 

 

 

 

 

 

 

 

 

72,136

 

 

 

Weighted average shares of common stock outstanding

 

 

 

 

 

 

 

 

 

 

 

 

71,338

 

 

 

(1)

Other income primarily consists of rental income on real estate owned, loan origination fees, and servicing income.

(2)

In Corporate/Other, represents the $28.2 million bargain purchase gain related to the Arlington Merger.

(3)

Includes U.S. Treasury securities, if applicable.

(4)

Other activities include certain equity and other trading strategies and related hedges, and net realized and unrealized gains (losses) on foreign currency.

(5)

In Corporate/Other, includes Arlington merger-related expenses of $22.1 million.

(6)

Convertible units include Operating Partnership units attributable to participating non-controlling interests.

The following table summarizes our operating results by strategy for the three-month period ended September 30, 2023:

 

 

Investment Portfolio

 

Longbridge

 

Corporate/Other

 

Total

 

Per Share

(In thousands except per share amounts)

 

Credit

 

Agency

 

Investment Portfolio Subtotal

 

 

 

 

Interest income and other income (1)

 

$

77,809

 

 

$

10,490

 

 

$

88,299

 

 

$

9,593

 

 

$

1,581

 

 

$

99,473

 

 

$

1.45

 

Interest expense

 

 

(43,791

)

 

 

(11,619

)

 

 

(55,410

)

 

 

(7,540

)

 

 

(3,117

)

 

 

(66,067

)

 

 

(0.96

)

Realized gain (loss), net

 

 

(10,226

)

 

 

(6,007

)

 

 

(16,233

)

 

 

—

 

 

 

—

 

 

 

(16,233

)

 

 

(0.24

)

Unrealized gain (loss), net

 

 

(9,205

)

 

 

(33,034

)

 

 

(42,239

)

 

 

19,201

 

 

 

(4,410

)

 

 

(27,448

)

 

 

(0.40

)

Net change from reverse mortgage loans and HMBS obligations

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(15,800

)

 

 

—

 

 

 

(15,800

)

 

 

(0.23

)

Earnings in unconsolidated entities

 

 

(978

)

 

 

—

 

 

 

(978

)

 

 

—

 

 

 

—

 

 

 

(978

)

 

 

(0.01

)

Interest rate hedges and other activity, net(2)

 

 

16,516

 

 

 

29,639

 

 

 

46,155

 

 

 

23,948

 

 

 

11,082

 

 

 

81,185

 

 

 

1.18

 

Credit hedges and other activities, net(3)

 

 

(1,141

)

 

 

—

 

 

 

(1,141

)

 

 

—

 

 

 

(235

)

 

 

(1,376

)

 

 

(0.02

)

Income tax (expense) benefit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(224

)

 

 

(224

)

 

 

—

 

Investment related expenses

 

 

(2,330

)

 

 

—

 

 

 

(2,330

)

 

 

(7,273

)

 

 

—

 

 

 

(9,603

)

 

 

(0.14

)

Other expenses

 

 

(1,441

)

 

 

—

 

 

 

(1,441

)

 

 

(18,046

)

 

 

(10,362

)

 

 

(29,849

)

 

 

(0.44

)

Net income (loss)

 

 

25,213

 

 

 

(10,531

)

 

 

14,682

 

 

 

4,083

 

 

 

(5,685

)

 

 

13,080

 

 

 

0.19

 

Dividends on preferred stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(5,980

)

 

 

(5,980

)

 

 

(0.09

)

Net (income) loss attributable to non-participating non-controlling interests

 

 

(438

)

 

 

—

 

 

 

(438

)

 

 

12

 

 

 

(3

)

 

 

(429

)

 

 

(0.01

)

Net income (loss) attributable to common stockholders and participating non-controlling interests

 

 

24,775

 

 

 

(10,531

)

 

 

14,244

 

 

 

4,095

 

 

 

(11,668

)

 

 

6,671

 

 

 

0.10

 

Net (income) loss attributable to participating non-controlling interests

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(80

)

 

 

(80

)

 

 

Net income (loss) attributable to common stockholders

 

$

24,775

 

 

$

(10,531

)

 

$

14,244

 

 

$

4,095

 

 

$

(11,748

)

 

$

6,591

 

 

$

0.10

 

Net income (loss) attributable to common stockholders per share of common stock

 

$

0.37

 

 

$

(0.16

)

 

$

0.21

 

 

$

0.06

 

 

$

(0.17

)

 

$

0.10

 

 

 

Weighted average shares of common stock and convertible units(4) outstanding

 

 

 

 

 

 

 

 

 

 

 

 

68,605

 

 

 

Weighted average shares of common stock outstanding

 

 

 

 

 

 

 

 

 

 

 

 

67,790

 

 

 

(1)

Other income primarily consists of rental income on real estate owned, loan origination fees, and servicing income.

(2)

Includes U.S. Treasury securities, if applicable.

(3)

Other activities include certain equity and other trading strategies and related hedges, and net realized and unrealized gains (losses) on foreign currency.

(4)

Convertible units include Operating Partnership units attributable to participating non-controlling interests.

About Ellington Financial

Ellington Financial invests in a diverse array of financial assets, including residential and commercial mortgage loans and mortgage-backed securities, reverse mortgage loans, mortgage servicing rights and related investments, consumer loans, asset-backed securities, collateralized loan obligations, non-mortgage and mortgage-related derivatives, debt and equity investments in loan origination companies, and other strategic investments. Ellington Financial is externally managed and advised by Ellington Financial Management LLC, an affiliate of Ellington Management Group, L.L.C.

Conference Call

We will host a conference call at 11:00 a.m. Eastern Time on Tuesday, February 27, 2024, to discuss our financial results for the quarter ended December 31, 2023. To participate in the event by telephone, please dial (800) 225-9448 at least 10 minutes prior to the start time and reference the conference ID EFCQ423. International callers should dial (203) 518-9708 and reference the same conference ID. The conference call will also be webcast live over the Internet and can be accessed via the "For Our Shareholders" section of our web site at www.ellingtonfinancial.com. To listen to the live webcast, please visit www.ellingtonfinancial.com at least 15 minutes prior to the start of the call to register, download, and install necessary audio software. In connection with the release of these financial results, we also posted an investor presentation, that will accompany the conference call, on our website at www.ellingtonfinancial.com under "For Our Shareholders—Presentations."

A dial-in replay of the conference call will be available on Tuesday, February 27, 2024, at approximately 2:00 p.m. Eastern Time through Tuesday, March 5, 2024 at approximately 11:59 p.m. Eastern Time. To access this replay, please dial (800) 839-5103. International callers should dial (402) 220-2687. A replay of the conference call will also be archived on our web site at www.ellingtonfinancial.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties. Our actual results may differ from our beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as "believe," "expect," "anticipate," "estimate," "project," "plan," "continue," "intend," "should," "would," "could," "goal," "objective," "will," "may," "seek" or similar expressions or their negative forms, or by references to strategy, plans, or intentions. Forward-looking statements are based on our beliefs, assumptions and expectations of our future operations, business strategies, performance, financial condition, liquidity and prospects, taking into account information currently available to us. These beliefs, assumptions, and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations and strategies may vary materially from those expressed or implied in our forward-looking statements. The following factors are examples of those that could cause actual results to vary from our forward-looking statements: changes in interest rates and the market value of our investments, market volatility, changes in mortgage default rates and prepayment rates, our ability to borrow to finance our assets, changes in government regulations affecting our business, our ability achieve the cost savings and efficiencies, operating efficiencies, synergies and other benefits, including the increased scale, and avoid potential business disruption from our recently completed merger with Arlington Asset Investment Corp., our ability to maintain our exclusion from registration under the Investment Company Act of 1940, our ability to maintain our qualification as a real estate investment trust, or "REIT," and other changes in market conditions and economic trends, such as changes to fiscal or monetary policy, heightened inflation, slower growth or recession, and currency fluctuations. Furthermore, forward-looking statements are subject to risks and uncertainties, including, among other things, those described under Item 1A of our Annual Report on Form 10-K, which can be accessed through our website at www.ellingtonfinancial.com or at the SEC's website (www.sec.gov). Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports we file with the SEC, including reports on Forms 10-Q, 10-K and 8-K. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

 

ELLINGTON FINANCIAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

Three-Month Period Ended

 

Year Ended

 

December 31, 2023

 

September 30, 2023

 

December 31, 2023

(In thousands, except per share amounts)

 

 

 

 

 

NET INTEREST INCOME

 

 

 

 

 

Interest income

$

98,690

 

 

$

96,216

 

 

$

370,172

 

Interest expense

 

(70,699

)

 

 

(68,702

)

 

 

(262,451

)

Total net interest income

 

27,991

 

 

 

27,514

 

 

 

107,721

 

Other Income (Loss)

 

 

 

 

 

Realized gains (losses) on securities and loans, net

 

(22,475

)

 

 

(17,362

)

 

 

(93,993

)

Realized gains (losses) on financial derivatives, net

 

9,437

 

 

 

26,283

 

 

 

40,054

 

Realized gains (losses) on real estate owned, net

 

(3,773

)

 

 

(155

)

 

 

(5,229

)

Unrealized gains (losses) on securities and loans, net

 

147,273

 

 

 

(63,850

)

 

 

171,296

 

Unrealized gains (losses) on financial derivatives, net

 

(81,957

)

 

 

55,794

 

 

 

(15,060

)

Unrealized gains (losses) on real estate owned, net

 

2,710

 

 

 

(1,712

)

 

 

2,177

 

Unrealized gains (losses) on other secured borrowings, at fair value, net

 

(52,687

)

 

 

18,660

 

 

 

(51,554

)

Unrealized gains (losses) on unsecured borrowings, at fair value

 

(1,954

)

 

 

(4,410

)

 

 

146

 

Net change from reverse mortgage loans, at fair value

 

208,661

 

 

 

99,929

 

 

 

503,831

 

Net change related to HMBS obligations, at fair value

 

(179,758

)

 

 

(115,729

)

 

 

(451,598

)

Bargain purchase gain

 

28,175

 

 

 

—

 

 

 

28,175

 

Other, net

 

2,988

 

 

 

28,772

 

 

 

40,954

 

Total other income (loss)

 

56,640

 

 

 

26,220

 

 

 

169,199

 

EXPENSES

 

 

 

 

 

Base management fee to affiliate, net of rebates

 

5,660

 

 

 

4,890

 

 

 

20,419

 

Investment related expenses:

 

 

 

 

 

Servicing expense

 

5,328

 

 

 

5,261

 

 

 

20,364

 

Other

 

4,227

 

 

 

4,342

 

 

 

16,860

 

Professional fees

 

12,411

 

 

 

3,847

 

 

 

26,164

 

Compensation and benefits

 

33,173

 

 

 

14,675

 

 

 

78,434

 

Other expenses

 

6,925

 

 

 

6,437

 

 

 

25,469

 

Total expenses

 

67,724

 

 

 

39,452

 

 

 

187,710

 

Net Income (Loss) before Income Tax Expense (Benefit) and Earnings from Investments in Unconsolidated Entities

 

16,907

 

 

 

14,282

 

 

 

89,210

 

Income tax expense (benefit)

 

129

 

 

 

224

 

 

 

457

 

Earnings (losses) from investments in unconsolidated entities

 

2,547

 

 

 

(978

)

 

 

(855

)

Net Income (Loss)

 

19,325

 

 

 

13,080

 

 

 

87,898

 

Net Income (Loss) Attributable to Non-Controlling Interests

 

724

 

 

 

509

 

 

 

3,814

 

Dividends on Preferred Stock

 

6,104

 

 

 

5,980

 

 

 

23,182

 

Net Income (Loss) Attributable to Common Stockholders

$

12,497

 

 

$

6,591

 

 

$

60,902

 

Net Income (Loss) per Common Share:

 

 

 

 

 

Basic and Diluted

$

0.18

 

 

$

0.10

 

 

$

0.89

 

Weighted average shares of common stock outstanding

 

71,338

 

 

 

67,790

 

 

 

68,252

 

Weighted average shares of common stock and convertible units outstanding

 

72,136

 

 

 

68,605

 

 

 

69,063

 

 

ELLINGTON FINANCIAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

As of

(In thousands, except share and per share amounts)

December 31, 2023

 

September 30, 2023

 

December 31, 2022(1)

ASSETS

 

 

 

 

 

Cash and cash equivalents

$

228,927

 

 

$

174,664

 

 

$

217,053

 

Restricted cash

 

1,618

 

 

 

1,604

 

 

 

4,816

 

Securities, at fair value

 

1,518,377

 

 

 

1,502,049

 

 

 

1,459,465

 

Loans, at fair value

 

12,306,636

 

 

 

11,920,872

 

 

 

11,626,008

 

Loan commitments, at fair value

 

2,584

 

 

 

3,752

 

 

 

3,060

 

Forward MSR-related investments, at fair value

 

163,336

 

 

 

—

 

 

 

—

 

Mortgage servicing rights, at fair value

 

29,580

 

 

 

29,653

 

 

 

8,108

 

Investments in unconsolidated entities, at fair value

 

116,414

 

 

 

113,474

 

 

 

127,046

 

Real estate owned

 

22,085

 

 

 

23,570

 

 

 

28,403

 

Financial derivatives–assets, at fair value

 

143,996

 

 

 

198,023

 

 

 

132,518

 

Reverse repurchase agreements

 

173,145

 

 

 

175,197

 

 

 

226,444

 

Due from brokers

 

51,884

 

 

 

38,870

 

 

 

36,761

 

Investment related receivables

 

480,249

 

 

 

167,447

 

 

 

139,413

 

Other assets

 

77,099

 

 

 

95,866

 

 

 

76,791

 

Total Assets

$

15,315,930

 

 

$

14,445,041

 

 

$

14,085,886

 

LIABILITIES

 

 

 

 

 

Securities sold short, at fair value

$

154,303

 

 

$

163,832

 

 

$

209,203

 

Repurchase agreements

 

2,967,437

 

 

 

2,573,043

 

 

 

2,609,685

 

Financial derivatives–liabilities, at fair value

 

61,776

 

 

 

38,520

 

 

 

54,198

 

Due to brokers

 

62,442

 

 

 

80,180

 

 

 

34,507

 

Investment related payables

 

37,403

 

 

 

36,641

 

 

 

49,323

 

Other secured borrowings

 

245,827

 

 

 

301,131

 

 

 

276,058

 

Other secured borrowings, at fair value

 

1,424,668

 

 

 

1,404,567

 

 

 

1,539,881

 

HMBS-related obligations, at fair value

 

8,423,235

 

 

 

8,181,922

 

 

 

7,787,155

 

Unsecured borrowings, at fair value(2)

 

272,765

 

 

 

189,735

 

 

 

191,835

 

Base management fee payable to affiliate

 

5,660

 

 

 

4,890

 

 

 

4,641

 

Dividend payable

 

11,528

 

 

 

14,343

 

 

 

12,243

 

Interest payable

 

22,933

 

 

 

20,078

 

 

 

22,452

 

Accrued expenses and other liabilities

 

90,341

 

 

 

98,742

 

 

 

73,819

 

Total Liabilities

 

13,780,318

 

 

 

13,107,624

 

 

 

12,865,000

 

EQUITY

 

 

 

 

 

Preferred stock, par value $0.001 per share, 100,000,000 shares authorized; 14,757,222, 13,420,421 and 9,420,421 shares issued and outstanding, and $368,931, $335,511, and $235,511 aggregate liquidation preference, respectively

 

355,551

 

 

 

323,920

 

 

 

227,432

 

Common stock, par value $0.001 per share, 200,000,000, 200,000,000, and 100,000,000 shares authorized, respectively; 83,000,488, 68,234,160, and 63,812,215 shares issued and outstanding, respectively(3)

 

83

 

 

 

68

 

 

 

64

 

Additional paid-in-capital

 

1,514,797

 

 

 

1,323,124

 

 

 

1,259,352

 

Retained earnings (accumulated deficit)

 

(353,360

)

 

 

(333,622

)

 

 

(290,881

)

Total Stockholders' Equity

 

1,517,071

 

 

 

1,313,490

 

 

 

1,195,967

 

Non-controlling interests

 

18,541

 

 

 

23,927

 

 

 

24,919

 

Total Equity

 

1,535,612

 

 

 

1,337,417

 

 

 

1,220,886

 

TOTAL LIABILITIES AND EQUITY

$

15,315,930

 

 

$

14,445,041

 

 

$

14,085,886

 

SUPPLEMENTAL PER SHARE INFORMATION:

 

 

 

 

 

Book Value Per Common Share (4)

$

13.83

 

 

$

14.33

 

 

$

15.05

 

(1)

Derived from audited financial statements as of December 31, 2022.

(2)

Conformed to current period presentation. Includes the Company's senior notes, issued and outstanding prior to the Arlington Merger, and various senior and subordinated debt assumed as a result of the Arlington Merger.

(3)

Common shares issued and outstanding at December 31, 2023 include 11,040,704 shares of common stock issued as a result of the Arlington Merger, 3,640,904 shares of common stock issued under our ATM program, and 84,720 shares of common stock issued as a result of LTIP Unit conversions.

(4)

Based on total stockholders' equity less the aggregate liquidation preference of our preferred stock outstanding.

Reconciliation of Net Income (Loss) to Adjusted Distributable Earnings

We calculate Adjusted Distributable Earnings as U.S. GAAP net income (loss) as adjusted for: (i) realized and unrealized gain (loss) on securities and loans, REO, mortgage servicing rights, financial derivatives (excluding periodic settlements on interest rate swaps), any borrowings carried at fair value, and foreign currency transactions; (ii) incentive fee to affiliate; (iii) Catch-up Amortization Adjustment (as defined below); (iv) non-cash equity compensation expense; (v) provision for income taxes; (vi) certain non-capitalized transaction costs; and (vii) other income or loss items that are of a non-recurring nature. For certain investments in unconsolidated entities, we include the relevant components of net operating income in Adjusted Distributable Earnings. The Catch-up Amortization Adjustment is a quarterly adjustment to premium amortization or discount accretion triggered by changes in actual and projected prepayments on our Agency RMBS (accompanied by a corresponding offsetting adjustment to realized and unrealized gains and losses). The adjustment is calculated as of the beginning of each quarter based on our then-current assumptions about cashflows and prepayments, and can vary significantly from quarter to quarter. Non-capitalized transaction costs include expenses, generally professional fees, incurred in connection with the acquisition of an investment or issuance of long-term debt. For the contribution to Adjusted Distributable Earnings from Longbridge, we adjust Longbridge's contribution to our net income in a similar manner, but we include in Adjusted Distributable Earnings certain realized and unrealized gains (losses) from Longbridge's origination business ("gain-on-sale income").

Adjusted Distributable Earnings is a supplemental non-GAAP financial measure. We believe that the presentation of Adjusted Distributable Earnings provides information useful to investors, because: (i) we believe that it is a useful indicator of both current and projected long-term financial performance, in that it excludes the impact of certain current-period earnings components that we believe are less useful in forecasting long-term performance and dividend-paying ability; (ii) we use it to evaluate the effective net yield provided by our investment portfolio, after the effects of financial leverage and by Longbridge, to reflect the earnings from its reverse mortgage origination and servicing operations; and (iii) we believe that presenting Adjusted Distributable Earnings assists investors in measuring and evaluating our operating performance, and comparing our operating performance to that of our residential mortgage REIT and mortgage originator peers. Please note, however, that: (I) our calculation of Adjusted Distributable Earnings may differ from the calculation of similarly titled non-GAAP financial measures by our peers, with the result that these non-GAAP financial measures might not be directly comparable; and (II) Adjusted Distributable Earnings excludes certain items that may impact the amount of cash that is actually available for distribution.

In addition, because Adjusted Distributable Earnings is an incomplete measure of our financial results and differs from net income (loss) computed in accordance with U.S. GAAP, it should be considered supplementary to, and not as a substitute for, net income (loss) computed in accordance with U.S. GAAP.

Furthermore, Adjusted Distributable Earnings is different from REIT taxable income. As a result, the determination of whether we have met the requirement to distribute at least 90% of our annual REIT taxable income (subject to certain adjustments) to our stockholders, in order to maintain our qualification as a REIT, is not based on whether we distributed 90% of our Adjusted Distributable Earnings.

In setting our dividends, our Board of Directors considers our earnings, liquidity, financial condition, REIT distribution requirements, and financial covenants, along with other factors that the Board of Directors may deem relevant from time to time.

The following table reconciles, for the three-month periods ended December 31, 2023 and September 30, 2023, our Adjusted Distributable Earnings to the line on our Condensed Consolidated Statement of Operations entitled Net Income (Loss), which we believe is the most directly comparable U.S. GAAP measure:

 

 

Three-Month Period Ended

 

 

December 31, 2023

 

September 30, 2023

(In thousands, except per share amounts)

 

Investment Portfolio

 

Longbridge

 

Corporate/Other

 

Total

 

Investment Portfolio

 

Longbridge

 

Corporate/Other

 

Total

Net Income (Loss)

 

$

27,862

 

 

$

(3,362

)

 

$

(5,175

)

 

$

19,325

 

 

$

14,682

 

 

$

4,083

 

 

$

(5,685

)

 

$

13,080

 

Income tax expense (benefit)

 

 

—

 

 

 

—

 

 

 

129

 

 

 

129

 

 

 

—

 

 

 

—

 

 

 

224

 

 

 

224

 

Net income (loss) before income tax expense (benefit)

 

 

27,862

 

 

 

(3,362

)

 

 

(5,046

)

 

 

19,454

 

 

 

14,682

 

 

 

4,083

 

 

 

(5,461

)

 

 

13,304

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized (gains) losses, net(1)

 

 

22,001

 

 

 

—

 

 

 

(2,166

)

 

 

19,835

 

 

 

4,409

 

 

 

—

 

 

 

840

 

 

 

5,249

 

Unrealized (gains) losses, net(2)

 

 

(7,904

)

 

 

—

 

 

 

(6,210

)

 

 

(14,114

)

 

 

22,946

 

 

 

—

 

 

 

(8,230

)

 

 

14,716

 

Unrealized (gains) losses on reverse MSRs, net of hedging (gains) losses(3)

 

 

—

 

 

 

3,178

 

 

 

—

 

 

 

3,178

 

 

 

—

 

 

 

(7,974

)

 

 

—

 

 

 

(7,974

)

Negative (positive) component of interest income represented by Catch-up Amortization Adjustment

 

 

(530

)

 

 

—

 

 

 

—

 

 

 

(530

)

 

 

(349

)

 

 

—

 

 

 

—

 

 

 

(349

)

Non-capitalized transaction costs and other expense adjustments(4)

 

 

105

 

 

 

731

 

 

 

5,019

 

 

 

5,855

 

 

 

995

 

 

 

881

 

 

 

1,486

 

 

 

3,362

 

Bargain purchase (gain) net of expenses related to the Arlington Merger(5)

 

 

—

 

 

 

—

 

 

 

(6,058

)

 

 

(6,058

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

(Earnings) losses from investments in unconsolidated entities

 

 

(2,547

)

 

 

—

 

 

 

—

 

 

 

(2,547

)

 

 

978

 

 

 

—

 

 

 

—

 

 

 

978

 

Adjusted distributable earnings from investments in unconsolidated entities(6)

 

 

429

 

 

 

—

 

 

 

—

 

 

 

429

 

 

 

2,179

 

 

 

—

 

 

 

—

 

 

 

2,179

 

Total Adjusted Distributable Earnings

 

$

39,416

 

 

$

547

 

 

$

(14,461

)

 

$

25,502

 

 

$

45,840

 

 

$

(3,010

)

 

$

(11,365

)

 

$

31,465

 

Dividends on preferred stock

 

 

—

 

 

 

—

 

 

 

6,104

 

 

 

6,104

 

 

 

—

 

 

 

—

 

 

 

5,980

 

 

 

5,980

 

Adjusted Distributable Earnings attributable to non-controlling interests

 

 

280

 

 

 

2

 

 

 

211

 

 

 

493

 

 

 

2,661

 

 

 

(12

)

 

 

318

 

 

 

2,967

 

Adjusted Distributable Earnings Attributable to Common Stockholders

 

$

39,136

 

 

$

545

 

 

$

(20,776

)

 

$

18,905

 

 

$

43,179

 

 

$

(2,998

)

 

$

(17,663

)

 

$

22,518

 

Adjusted Distributable Earnings Attributable to Common Stockholders, per share

 

$

0.55

 

 

$

0.01

 

 

$

(0.29

)

 

$

0.27

 

 

$

0.64

 

 

$

(0.05

)

 

$

(0.26

)

 

$

0.33

 

(1)

Includes realized (gains) losses on securities and loans, REO, financial derivatives (excluding periodic settlements on interest rate swaps), and foreign currency transactions which are components of Other Income (Loss) on the Condensed Consolidated Statement of Operations.

(2)

Includes unrealized (gains) losses on securities and loans, REO, financial derivatives (excluding periodic settlements on interest rate swaps), borrowings carried at fair value, and foreign currency transactions which are components of Other Income (Loss) on the Condensed Consolidated Statement of Operations.

(3)

Represents net change in fair value of the HMBS MSR Equivalent and Reverse MSRs attributable to changes in market conditions and model assumptions. This adjustment also includes net (gains) losses on certain hedging instruments, which are components of realized and/or unrealized gains (losses) on financial derivatives, net on the Condensed Consolidated Statement of Operations.

(4)

For the three-month period ended December 31, 2023, includes $4.9 million of expenses related to our previously announced merger with Great Ajax Corp. which was terminated in October 2023, $0.4 million of non-capitalized transaction costs, $0.3 million of non-cash equity compensation expense, and $0.3 million of various other expenses. For the three-month period ended September 30, 2023, includes $0.4 million of expenses related to our pending merger with Arlington Asset Investment Corp., $1.0 million of expenses related to our previously announced merger with Great Ajax Corp. which was terminated in October 2023, $0.8 million of non-capitalized transaction costs, $0.3 million of non-cash equity compensation expense, and $0.9 million of various other expenses.

(5)

Represents the reversal of the bargain purchase gain of $28.2 million net of the reversal of expenses related to the Arlington Merger of $22.1 million.

(6)

Includes net interest income and operating expenses for certain investments in unconsolidated entities.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240226977077/en/

Investors: Ellington Financial Inc. Investor Relations (203) 409-3575 info@ellingtonfinancial.com

or

Media: Amanda Shpiner/Sara Widmann Gasthalter & Co. for Ellington Financial (212) 257-4170 Ellington@gasthalter.com