Ellington Financial Inc. Reports Second Quarter 2021 Results
Highlights
-
Net income of
$32.7 million , or$0.75 per common share. -
Core Earnings1 of
$22.3 million , or$0.51 per share. -
Book value per common share as of
June 30, 2021 of$18.47 , including the effects of dividends of$0.44 per common share for the quarter. -
Credit strategy gross income of
$55.3 million for the quarter, or$1.25 per share. -
Agency strategy gross loss of
$(1.2) million for the quarter, or$(0.03) per share. -
Dividend yield of 9.9% based on the
August 4, 2021 closing stock price of$18.12 per share, and monthly dividend of$0.15 per common share declared onAugust 4, 2021 . Increased monthly dividend by a cumulative 50% during the quarter. -
Debt-to-equity ratio of 3.2:1 and recourse debt-to-equity ratio of 1.9:12 as of
June 30, 2021 . -
Cash and cash equivalents of
$134.7 million as ofJune 30, 2021 , in addition to other unencumbered assets of$511.0 million .
Second Quarter 2021 Results
"
"Our loan origination businesses again drove earnings this past quarter. In the non-QM space, LendSure had another record quarter for origination volume, while Longbridge continued to deliver tremendous results in the reverse mortgage space. We also closed on our second non-QM securitization of the year, and had excellent performance across our short-duration loan portfolios. Our results also reflect significant contributions from our CLO, CMBS, and non-Agency RMBS strategies. Finally, our Agency strategy only generated modest losses in what was a challenging quarter for Agency RMBS.
"Our loan portfolios steadily expanded during the second quarter, specifically non-QM, small-balance commercial mortgage, and residential transition loans. In addition, in the second quarter and through July we closed on two small but strategic equity investments in mortgage originators, thus further expanding and diversifying our loan sourcing channels. Finally, to support the continuing growth of our loan portfolios, we accessed the capital markets shortly after quarter end, raising approximately
Financial Results
The Company's total long credit portfolio3 increased by 5% in the second quarter, to
The Company's total long Agency RMBS portfolio decreased slightly to
The Company's debt-to-equity ratio was unchanged at 3.2:1 as of
During the second quarter, the Company's credit strategy generated total gross income of
The Company benefited from strong performance in all of its primary credit strategies during the second quarter. Similar to the prior quarter, higher sequential net interest income4 and substantial net realized and unrealized gains drove results. The increase in net interest income was primarily driven by larger small balance commercial mortgage, residential transition, and non-QM loan portfolios, as well as by lower financing costs. Net interest income also increased due to several small balance commercial asset resolutions that included the payment of past-due interest. The substantial net realized and unrealized gains occurred mainly in the Company's CMBS, CLO, non-Agency RMBS, and non-QM strategies, as well as the Company's equity investments in loan originators. Finally, the Company's credit hedges detracted from results, as credit yield spreads continued to tighten during the quarter.
Meanwhile, the Company's Agency strategy generated a small net loss for the quarter. In a reversal from the prior quarter, interest rates declined and the yield curve flattened. Faced with declining interest rates and continued elevated prepayment rates, along with concerns that the
Average pay-ups on the Company's specified pools increased to 1.10% as of
During the quarter, the Company continued to hedge interest rate risk, primarily through the use of interest rate swaps, short positions in TBAs,
_______________________________
| 1 |
Core Earnings is a non-GAAP financial measure. See "Reconciliation of Net Income (Loss) to Core Earnings" below for an explanation regarding the calculation of Core Earnings. |
|
| 2 |
Excludes repo borrowings at certain unconsolidated entities that are recourse to us. Including such borrowings, the Company's debt-to-equity ratio based on total recourse borrowings was 2.0:1 as of |
|
| 3 |
Includes REO at the lower of cost or fair value. Excludes hedges and other derivative positions, as well as tranches of the Company's consolidated non-QM securitization trusts that were sold to third parties, but that are consolidated for |
|
| 4 |
Excludes any interest income and interest expense items from Interest rate hedges, net and Credit hedges and other activities, net. |
|
| 5 |
Ten-year equivalents for a group of positions represent the amount of 10-year |
The following tables summarize the Company's investment portfolio holdings as of
Credit Portfolio(1)
|
|
|
|
|
|
||||||||||
|
($ in thousands) |
|
Fair Value |
|
% of Total
|
|
Fair Value |
|
% of Total
|
||||||
|
Dollar Denominated: |
|
|
|
|
|
|
|
|
||||||
|
CLOs(2) |
|
$ |
69,053 |
|
|
2.9 |
% |
|
$ |
104,201 |
|
|
4.8 |
% |
|
CMBS |
|
45,872 |
|
|
2.0 |
% |
|
45,073 |
|
|
2.1 |
% |
||
|
Commercial mortgage loans and REO(3)(4) |
|
316,010 |
|
|
13.5 |
% |
|
308,368 |
|
|
14.1 |
% |
||
|
Consumer loans and ABS backed by consumer loans(2) |
|
138,471 |
|
|
5.9 |
% |
|
134,441 |
|
|
6.1 |
% |
||
|
Corporate debt and equity and corporate loans |
|
27,939 |
|
|
1.2 |
% |
|
22,840 |
|
|
1.0 |
% |
||
|
Debt and equity investments in loan origination entities |
|
106,159 |
|
|
4.5 |
% |
|
82,482 |
|
|
3.8 |
% |
||
|
Non-Agency RMBS |
|
158,798 |
|
|
6.8 |
% |
|
175,213 |
|
|
8.0 |
% |
||
|
Residential mortgage loans and REO(3) |
|
1,447,202 |
|
|
61.8 |
% |
|
1,282,450 |
|
|
58.6 |
% |
||
|
Non-Dollar Denominated: |
|
|
|
|
|
|
|
|
||||||
|
CLOs(2) |
|
3,804 |
|
|
0.2 |
% |
|
4,313 |
|
|
0.2 |
% |
||
|
Consumer loans and ABS backed by consumer loans |
|
166 |
|
|
— |
% |
|
224 |
|
|
— |
% |
||
|
Corporate debt and equity |
|
26 |
|
|
— |
% |
|
27 |
|
|
— |
% |
||
|
RMBS(5) |
|
28,717 |
|
|
1.2 |
% |
|
27,470 |
|
|
1.3 |
% |
||
|
Total Long Credit Portfolio |
|
$ |
2,342,217 |
|
|
100.0 |
% |
|
$ |
2,187,102 |
|
|
100.0 |
% |
|
Less: Non-retained tranches of consolidated securitization trusts |
|
982,984 |
|
|
|
|
888,509 |
|
|
|
||||
|
Total Long Credit Portfolio excluding non-retained tranches of consolidated securitization trusts |
|
$ |
1,359,233 |
|
|
|
|
$ |
1,298,593 |
|
|
|
||
| (1) |
This information does not include |
|
| (2) |
Includes equity investments in securitization-related vehicles. |
|
| (3) |
In accordance with |
|
| (4) |
Includes equity investments in unconsolidated entities holding small balance commercial mortgage loans and REO. |
|
| (5) |
Includes an equity investment in an unconsolidated entity holding European RMBS. |
Agency RMBS Portfolio
|
|
|
|
|
|
||||||||||
|
($ in thousands) |
|
Fair Value |
|
% of |
|
Fair Value |
|
% of |
||||||
|
Long Agency RMBS: |
|
|
|
|
|
|
|
|
||||||
|
Fixed Rate |
|
$ |
1,333,676 |
|
|
90.4 |
% |
|
$ |
1,340,448 |
|
|
90.1 |
% |
|
Floating Rate |
|
27,093 |
|
|
1.8 |
% |
|
5,807 |
|
|
0.4 |
% |
||
|
Reverse Mortgages |
|
75,934 |
|
|
5.1 |
% |
|
92,476 |
|
|
6.2 |
% |
||
|
IOs |
|
39,045 |
|
|
2.7 |
% |
|
49,051 |
|
|
3.3 |
% |
||
|
Total Long Agency RMBS |
|
$ |
1,475,748 |
|
|
100.0 |
% |
|
$ |
1,487,782 |
|
|
100.0 |
% |
The following table summarizes the Company's operating results for the three-month periods ended
|
|
|
Three-
|
|
Per
|
|
Three-
|
|
Per
|
|
Six-Month
|
|
Per
|
||||||||||||||||||
|
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Credit: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Interest income and other income(1) |
|
$ |
36,511 |
|
|
|
$ |
0.82 |
|
|
|
$ |
34,289 |
|
|
|
$ |
0.77 |
|
|
|
$ |
70,800 |
|
|
|
$ |
1.59 |
|
|
|
Realized gain (loss), net |
|
2,009 |
|
|
|
0.05 |
|
|
|
4,188 |
|
|
|
0.09 |
|
|
|
6,197 |
|
|
|
0.14 |
|
|
||||||
|
Unrealized gain (loss), net |
|
12,791 |
|
|
|
0.29 |
|
|
|
17,575 |
|
|
|
0.40 |
|
|
|
30,366 |
|
|
|
0.68 |
|
|
||||||
|
Interest rate hedges, net(2) |
|
(1,202 |
) |
|
|
(0.03 |
) |
|
|
1,727 |
|
|
|
0.04 |
|
|
|
525 |
|
|
|
0.01 |
|
|
||||||
|
Credit hedges and other activities, net(3) |
|
1,303 |
|
|
|
0.03 |
|
|
|
1,085 |
|
|
|
0.02 |
|
|
|
2,388 |
|
|
|
0.06 |
|
|
||||||
|
Interest expense(4) |
|
(9,856 |
) |
|
|
(0.22 |
) |
|
|
(9,944 |
) |
|
|
(0.22 |
) |
|
|
(19,800 |
) |
|
|
(0.44 |
) |
|
||||||
|
Other investment related expenses |
|
(4,831 |
) |
|
|
(0.11 |
) |
|
|
(4,855 |
) |
|
|
(0.11 |
) |
|
|
(9,686 |
) |
|
|
(0.22 |
) |
|
||||||
|
Earnings (losses) from investments in unconsolidated entities |
|
18,602 |
|
|
|
0.42 |
|
|
|
6,635 |
|
|
|
0.15 |
|
|
|
25,237 |
|
|
|
0.57 |
|
|
||||||
|
Total Credit profit (loss) |
|
55,327 |
|
|
|
1.25 |
|
|
|
50,700 |
|
|
|
1.14 |
|
|
|
106,027 |
|
|
|
2.39 |
|
|
||||||
|
Agency RMBS: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Interest income |
|
11,328 |
|
|
|
0.25 |
|
|
|
6,752 |
|
|
|
0.15 |
|
|
|
18,080 |
|
|
|
0.41 |
|
|
||||||
|
Realized gain (loss), net |
|
(3,982 |
) |
|
|
(0.09 |
) |
|
|
2 |
|
|
|
— |
|
|
|
(3,980 |
) |
|
|
(0.09 |
) |
|
||||||
|
Unrealized gain (loss), net |
|
(2,815 |
) |
|
|
(0.06 |
) |
|
|
(21,974 |
) |
|
|
(0.49 |
) |
|
|
(24,789 |
) |
|
|
(0.56 |
) |
|
||||||
|
Interest rate hedges and other activities, net(2) |
|
(4,754 |
) |
|
|
(0.11 |
) |
|
|
16,199 |
|
|
|
0.36 |
|
|
|
11,445 |
|
|
|
0.26 |
|
|
||||||
|
Interest expense(4) |
|
(939 |
) |
|
|
(0.02 |
) |
|
|
(939 |
) |
|
|
(0.02 |
) |
|
|
(1,878 |
) |
|
|
(0.04 |
) |
|
||||||
|
Total Agency RMBS profit (loss) |
|
(1,162 |
) |
|
|
(0.03 |
) |
|
|
40 |
|
|
|
0.00 |
|
|
|
(1,122 |
) |
|
|
(0.02 |
) |
|
||||||
|
Total Credit and Agency RMBS profit (loss) |
|
54,165 |
|
|
|
1.22 |
|
|
|
50,740 |
|
|
|
1.14 |
|
|
|
104,905 |
|
|
|
2.37 |
|
|
||||||
|
Other interest income (expense), net |
|
38 |
|
|
|
— |
|
|
|
7 |
|
|
|
— |
|
|
|
45 |
|
|
|
— |
|
|
||||||
|
Income tax (expense) benefit |
|
(3,140 |
) |
|
|
(0.07 |
) |
|
|
(2,017 |
) |
|
|
(0.05 |
) |
|
|
(5,157 |
) |
|
|
(0.12 |
) |
|
||||||
|
Other expenses |
|
(7,437 |
) |
|
|
(0.17 |
) |
|
|
(7,474 |
) |
|
|
(0.17 |
) |
|
|
(14,911 |
) |
|
|
(0.34 |
) |
|
||||||
|
Net income (loss) (before incentive fee) |
|
43,626 |
|
|
|
0.98 |
|
|
|
41,256 |
|
|
|
0.92 |
|
|
|
84,882 |
|
|
|
1.91 |
|
|
||||||
|
Incentive fee |
|
(7,157 |
) |
|
|
(0.16 |
) |
|
|
— |
|
|
|
— |
|
|
|
(7,157 |
) |
|
|
(0.16 |
) |
|
||||||
|
Net income (loss) |
|
$ |
36,469 |
|
|
|
$ |
0.82 |
|
|
|
$ |
41,256 |
|
|
|
$ |
0.92 |
|
|
|
$ |
77,725 |
|
|
|
$ |
1.75 |
|
|
|
Less: Dividends on preferred stock |
|
1,940 |
|
|
|
0.04 |
|
|
|
1,941 |
|
|
|
0.04 |
|
|
|
3,881 |
|
|
|
0.09 |
|
|
||||||
|
Less: Net income (loss) attributable to non-participating non-controlling interests |
|
1,369 |
|
|
|
0.03 |
|
|
|
882 |
|
|
|
0.02 |
|
|
|
2,251 |
|
|
|
0.05 |
|
|
||||||
|
Net income (loss) attributable to common stockholders and participating non-controlling interests |
|
33,160 |
|
|
|
0.75 |
|
|
|
38,433 |
|
|
|
0.86 |
|
|
|
71,593 |
|
|
|
1.61 |
|
|
||||||
|
Less: Net income (loss) attributable to participating non-controlling interests |
|
505 |
|
|
|
|
|
577 |
|
|
|
|
|
1,082 |
|
|
|
|
||||||||||||
|
Net income (loss) attributable to common stockholders |
|
$ |
32,655 |
|
|
|
$ |
0.75 |
|
|
|
$ |
37,856 |
|
|
|
$ |
0.86 |
|
|
|
$ |
70,511 |
|
|
|
$ |
1.61 |
|
|
|
Weighted average shares of common stock and convertible units(5) outstanding |
|
44,460 |
|
|
|
|
|
44,448 |
|
|
|
|
|
44,454 |
|
|
|
|
||||||||||||
|
Weighted average shares of common stock outstanding |
|
43,782 |
|
|
|
|
|
43,782 |
|
|
|
|
|
43,782 |
|
|
|
|
||||||||||||
| (1) |
Other income primarily consists of rental income on real estate owned and loan origination fees. |
|
| (2) |
Includes |
|
| (3) |
Other activities include certain equity and other trading strategies and related hedges, and net realized and unrealized gains (losses) on foreign currency. |
|
| (4) |
Includes allocable portion of interest expense on the Company's Senior notes. |
|
| (5) |
Convertible units include |
About
Conference Call
The Company will host a conference call at
A dial-in replay of the conference call will be available on
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. Actual results may differ from the Company's 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. Examples of forward-looking statements in this press release include without limitation management's beliefs regarding the current economic and investment environment and the Company's ability to implement its investment and hedging strategies, performance of the Company's investment and hedging strategies, the Company's exposure to prepayment risk in its Agency portfolio, and statements regarding the drivers of the Company's returns. The Company's results can fluctuate from month to month and from quarter to quarter depending on a variety of factors, some of which are beyond the Company's control and/or are difficult to predict, including, without limitation, changes in interest rates and the market value of the Company's investments, changes in mortgage default rates and prepayment rates, the Company's ability to borrow to finance its assets, changes in government regulations affecting the Company's business, the Company's ability to maintain its exclusion from registration under the Investment Company Act of 1940; the Company's ability to qualify and maintain its qualification as a real estate investment trust, or "REIT"; and other changes in market conditions and economic trends, including changes resulting from the ongoing spread and economic effects of the novel coronavirus (COVID-19) pandemic, and associated responses to the pandemic. Furthermore, forward-looking statements are subject to risks and uncertainties, including, among other things, those described under Item 1A of the Company's Annual Report on Form 10-K, as amended, which can be accessed through the Company's website at www.ellingtonfinancial.com or at the
|
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) |
||||||||||||||
|
|
Three-Month Period Ended |
|
Six-Month
|
|||||||||||
|
|
|
|
|
|
||||||||||
|
(In thousands, except per share amounts) |
|
|
|
|
|
|||||||||
|
NET INTEREST INCOME |
|
|
|
|
|
|||||||||
|
Interest income |
$ |
45,890 |
|
|
|
$ |
40,079 |
|
|
|
$ |
85,970 |
|
|
|
Interest expense |
(11,166 |
) |
|
|
(11,342 |
) |
|
|
(22,508 |
) |
|
|||
|
Total net interest income |
34,724 |
|
|
|
28,737 |
|
|
|
63,462 |
|
|
|||
|
Other Income (Loss) |
|
|
|
|
|
|||||||||
|
Realized gains (losses) on securities and loans, net |
(2,009 |
) |
|
|
4,276 |
|
|
|
2,268 |
|
|
|||
|
Realized gains (losses) on financial derivatives, net |
425 |
|
|
|
5,795 |
|
|
|
6,220 |
|
|
|||
|
Realized gains (losses) on real estate owned, net |
(74 |
) |
|
|
61 |
|
|
|
(13 |
) |
|
|||
|
Unrealized gains (losses) on securities and loans, net |
10,000 |
|
|
|
(1,781 |
) |
|
|
8,218 |
|
|
|||
|
Unrealized gains (losses) on financial derivatives, net |
(5,683 |
) |
|
|
10,711 |
|
|
|
5,028 |
|
|
|||
|
Unrealized gains (losses) on real estate owned, net |
(1,314 |
) |
|
|
(792 |
) |
|
|
(2,107 |
) |
|
|||
|
Other, net |
4,363 |
|
|
|
1,960 |
|
|
|
6,323 |
|
|
|||
|
Total other income (loss) |
5,708 |
|
|
|
20,230 |
|
|
|
25,937 |
|
|
|||
|
EXPENSES |
|
|
|
|
|
|||||||||
|
Base management fee to affiliate (Net of fee rebates of |
3,355 |
|
|
|
3,277 |
|
|
|
6,633 |
|
|
|||
|
Incentive fee to affiliate |
7,157 |
|
|
|
— |
|
|
|
7,157 |
|
|
|||
|
Investment related expenses: |
|
|
|
|
|
|||||||||
|
Servicing expense |
974 |
|
|
|
986 |
|
|
|
1,960 |
|
|
|||
|
Debt issuance costs related to Other secured borrowings, at fair value |
2,039 |
|
|
|
1,665 |
|
|
|
3,704 |
|
|
|||
|
Other |
1,818 |
|
|
|
2,204 |
|
|
|
4,022 |
|
|
|||
|
Professional fees |
1,037 |
|
|
|
1,198 |
|
|
|
2,235 |
|
|
|||
|
Compensation expense |
1,412 |
|
|
|
1,420 |
|
|
|
2,831 |
|
|
|||
|
Other expenses |
1,633 |
|
|
|
1,579 |
|
|
|
3,212 |
|
|
|||
|
Total expenses |
19,425 |
|
|
|
12,329 |
|
|
|
31,754 |
|
|
|||
|
Net Income (Loss) before Income Tax Expense (Benefit) and Earnings from Investments in Unconsolidated Entities |
21,007 |
|
|
|
36,638 |
|
|
|
57,645 |
|
|
|||
|
Income tax expense (benefit) |
3,140 |
|
|
|
2,017 |
|
|
|
5,157 |
|
|
|||
|
Earnings (losses) from investments in unconsolidated entities |
18,602 |
|
|
|
6,635 |
|
|
|
25,237 |
|
|
|||
|
Net Income (Loss) |
36,469 |
|
|
|
41,256 |
|
|
|
77,725 |
|
|
|||
|
Net Income (Loss) Attributable to Non-Controlling Interests |
1,874 |
|
|
|
1,459 |
|
|
|
3,333 |
|
|
|||
|
Dividends on Preferred Stock |
1,940 |
|
|
|
1,941 |
|
|
|
3,881 |
|
|
|||
|
Net Income (Loss) Attributable to Common Stockholders |
$ |
32,655 |
|
|
|
$ |
37,856 |
|
|
|
$ |
70,511 |
|
|
|
Net Income (Loss) per Common Share: |
|
|
|
|
|
|||||||||
|
Basic and Diluted |
$ |
0.75 |
|
|
|
$ |
0.86 |
|
|
|
$ |
1.61 |
|
|
|
Weighted average shares of common stock outstanding |
43,782 |
|
|
|
43,782 |
|
|
|
43,782 |
|
|
|||
|
Weighted average shares of common stock and convertible units outstanding |
44,460 |
|
|
|
44,448 |
|
|
|
44,454 |
|
|
|||
|
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) |
||||||||||||||
|
|
As of |
|||||||||||||
|
(In thousands, except share amounts) |
|
|
|
|
|
|||||||||
|
ASSETS |
|
|
|
|
|
|||||||||
|
Cash and cash equivalents |
$ |
134,695 |
|
|
|
$ |
149,350 |
|
|
|
$ |
111,647 |
|
|
|
Restricted cash |
175 |
|
|
|
175 |
|
|
|
175 |
|
|
|||
|
Securities, at fair value |
1,860,990 |
|
|
|
1,909,127 |
|
|
|
1,514,185 |
|
|
|||
|
Loans, at fair value |
1,742,701 |
|
|
|
1,582,516 |
|
|
|
1,453,480 |
|
|
|||
|
Investments in unconsolidated entities, at fair value |
178,979 |
|
|
|
147,684 |
|
|
|
141,620 |
|
|
|||
|
Real estate owned |
35,295 |
|
|
|
35,557 |
|
|
|
23,598 |
|
|
|||
|
Financial derivatives–assets, at fair value |
13,028 |
|
|
|
23,082 |
|
|
|
15,479 |
|
|
|||
|
Reverse repurchase agreements |
160,412 |
|
|
|
96,783 |
|
|
|
38,640 |
|
|
|||
|
Due from brokers |
76,396 |
|
|
|
91,814 |
|
|
|
63,147 |
|
|
|||
|
Investment related receivables |
75,781 |
|
|
|
67,338 |
|
|
|
49,317 |
|
|
|||
|
Other assets |
4,229 |
|
|
|
3,499 |
|
|
|
2,575 |
|
|
|||
|
Total Assets |
$ |
4,282,681 |
|
|
|
$ |
4,106,925 |
|
|
|
$ |
3,413,863 |
|
|
|
LIABILITIES |
|
|
|
|
|
|||||||||
|
Securities sold short, at fair value |
$ |
145,374 |
|
|
|
$ |
96,398 |
|
|
|
$ |
38,642 |
|
|
|
Repurchase agreements |
1,916,749 |
|
|
|
1,909,511 |
|
|
|
1,496,931 |
|
|
|||
|
Financial derivatives–liabilities, at fair value |
14,171 |
|
|
|
19,438 |
|
|
|
24,553 |
|
|
|||
|
Due to brokers |
2,130 |
|
|
|
5,337 |
|
|
|
5,059 |
|
|
|||
|
Investment related payables |
29,457 |
|
|
|
40,836 |
|
|
|
4,754 |
|
|
|||
|
Other secured borrowings |
86,374 |
|
|
|
64,506 |
|
|
|
51,062 |
|
|
|||
|
Other secured borrowings, at fair value |
1,003,037 |
|
|
|
911,256 |
|
|
|
754,921 |
|
|
|||
|
Senior notes, net |
85,693 |
|
|
|
85,627 |
|
|
|
85,561 |
|
|
|||
|
Base management fee payable to affiliate |
3,355 |
|
|
|
3,277 |
|
|
|
3,178 |
|
|
|||
|
Incentive fee payable to affiliate |
7,157 |
|
|
|
— |
|
|
|
— |
|
|
|||
|
Dividend payable |
7,963 |
|
|
|
5,740 |
|
|
|
5,738 |
|
|
|||
|
Interest payable |
3,000 |
|
|
|
1,915 |
|
|
|
3,233 |
|
|
|||
|
Accrued expenses and other liabilities |
23,117 |
|
|
|
19,708 |
|
|
|
18,659 |
|
|
|||
|
Total Liabilities |
3,327,577 |
|
|
|
3,163,549 |
|
|
|
2,492,291 |
|
|
|||
|
EQUITY |
|
|
|
|
|
|||||||||
|
Preferred stock, par value
6.750% Series A Fixed-to-Floating Rate Cumulative Redeemable; 4,600,000 shares issued and outstanding, respectively ( |
111,034 |
|
|
|
111,034 |
|
|
|
111,034 |
|
|
|||
|
Common stock, par value (43,781,684, 43,781,684, and 43,781,684 shares issued and outstanding, respectively) |
44 |
|
|
|
44 |
|
|
|
44 |
|
|
|||
|
Additional paid-in-capital |
915,817 |
|
|
|
915,577 |
|
|
|
915,658 |
|
|
|||
|
Retained earnings (accumulated deficit) |
(103,409 |
) |
|
|
(116,799 |
) |
|
|
(141,521 |
) |
|
|||
|
Total Stockholders' Equity |
923,486 |
|
|
|
909,856 |
|
|
|
885,215 |
|
|
|||
|
Non-controlling interests |
31,618 |
|
|
|
33,520 |
|
|
|
36,357 |
|
|
|||
|
Total Equity |
955,104 |
|
|
|
943,376 |
|
|
|
921,572 |
|
|
|||
|
TOTAL LIABILITIES AND EQUITY |
$ |
4,282,681 |
|
|
|
$ |
4,106,925 |
|
|
|
$ |
3,413,863 |
|
|
|
SUPPLEMENTAL PER SHARE INFORMATION: |
|
|
|
|
|
|||||||||
|
Book Value Per Common Share(2) |
$ |
18.47 |
|
|
|
$ |
18.16 |
|
|
|
$ |
17.59 |
|
|
| (1) |
Derived from audited financial statements as of |
|
| (2) |
Based on total stockholders' equity less the aggregate liquidation preference of the Company's preferred stock outstanding. |
Reconciliation of Net Income (Loss) to Core Earnings
The Company calculates Core Earnings as
Core Earnings is a supplemental non-GAAP financial measure. The Company believes that the presentation of Core Earnings provides a consistent measure of operating performance by excluding the impact of gains and losses and other adjustments listed above from operating results. The Company believes that Core Earnings provides information useful to investors because it is a metric that the Company uses to assess its performance and to evaluate the effective net yield provided by its portfolio. In addition, the Company believes that presenting Core Earnings enables its investors to measure, evaluate, and compare its operating performance to that of its peers. However, because Core Earnings is an incomplete measure of the Company's financial results and differs from net income (loss) computed in accordance with
The following table reconciles, for the three-month periods ended
|
|
|
Three-Month Period Ended |
|
Six-Month
|
|||||||||||
|
(In thousands, except per share amounts) |
|
|
|
|
|
||||||||||
|
Net Income (Loss) |
|
$ |
36,469 |
|
|
|
$ |
41,256 |
|
|
|
$ |
77,725 |
|
|
|
Income tax expense (benefit) |
|
3,140 |
|
|
|
2,017 |
|
|
|
5,157 |
|
|
|||
|
Net income (loss) before income tax expense |
|
39,609 |
|
|
|
43,273 |
|
|
|
82,882 |
|
|
|||
|
Adjustments: |
|
|
|
|
|
|
|||||||||
|
Realized (gains) losses on securities and loans, net |
|
2,009 |
|
|
|
(4,276 |
) |
|
|
(2,268 |
) |
|
|||
|
Realized (gains) losses on financial derivatives, net |
|
(425 |
) |
|
|
(5,795 |
) |
|
|
(6,220 |
) |
|
|||
|
Realized (gains) losses on real estate owned, net |
|
74 |
|
|
|
(61 |
) |
|
|
13 |
|
|
|||
|
Unrealized (gains) losses on securities and loans, net |
|
(10,000 |
) |
|
|
1,781 |
|
|
|
(8,218 |
) |
|
|||
|
Unrealized (gains) losses on financial derivatives, net |
|
5,683 |
|
|
|
(10,711 |
) |
|
|
(5,028 |
) |
|
|||
|
Unrealized (gains) losses on real estate owned, net |
|
1,314 |
|
|
|
792 |
|
|
|
2,107 |
|
|
|||
|
Other realized and unrealized (gains) losses, net(1) |
|
(2,166 |
) |
|
|
(602 |
) |
|
|
(2,768 |
) |
|
|||
|
Net realized gains (losses) on periodic settlements of interest rate swaps |
|
77 |
|
|
|
(816 |
) |
|
|
(739 |
) |
|
|||
|
Net unrealized gains (losses) on accrued periodic settlements of interest rate swaps |
|
(709 |
) |
|
|
410 |
|
|
|
(299 |
) |
|
|||
|
Incentive fee to affiliate |
|
7,157 |
|
|
|
— |
|
|
|
7,157 |
|
|
|||
|
Non-cash equity compensation expense |
|
244 |
|
|
|
229 |
|
|
|
473 |
|
|
|||
|
Negative (positive) component of interest income represented by Catch-up Premium Amortization Adjustment |
|
(3,041 |
) |
|
|
87 |
|
|
|
(2,954 |
) |
|
|||
|
Debt issuance costs related to Other secured borrowings, at fair value |
|
2,039 |
|
|
|
1,665 |
|
|
|
3,704 |
|
|
|||
|
Non-recurring expenses |
|
248 |
|
|
|
— |
|
|
|
248 |
|
|
|||
|
(Earnings) losses from investments in unconsolidated entities(2) |
|
(16,313 |
) |
|
|
(4,178 |
) |
|
|
(20,491 |
) |
|
|||
|
Total Core Earnings |
|
$ |
25,800 |
|
|
|
$ |
21,798 |
|
|
|
$ |
47,599 |
|
|
|
Dividends on preferred stock |
|
1,940 |
|
|
|
1,941 |
|
|
|
3,881 |
|
|
|||
|
Core Earnings attributable to non-controlling interests |
|
1,609 |
|
|
|
1,045 |
|
|
|
2,655 |
|
|
|||
|
Core Earnings Attributable to Common Stockholders |
|
$ |
22,251 |
|
|
|
$ |
18,812 |
|
|
|
$ |
41,063 |
|
|
|
Core Earnings Attributable to Common Stockholders, per share |
|
$ |
0.51 |
|
|
|
$ |
0.43 |
|
|
|
$ |
0.94 |
|
|
| (1) |
Includes realized and unrealized gains (losses) on foreign currency and unrealized gain (loss) on other secured borrowings, at fair value, included in Other, net, on the Condensed Consolidated Statement of Operations. |
|
| (2) |
Adjustment represents, for certain investments in unconsolidated entities, the net realized and unrealized gains and losses of the underlying investments of such entities. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210805006066/en/
Investors:
Investor Relations
(203) 409-3575
info@ellingtonfinancial.com
or
Media:
for
(212) 257-4170
Ellington@gasthalter.com
Source: