MFA Financial Reveals $10.8B Residential Asset Portfolio

MFA Financial has recently released its 10-K report, disclosing its operations as a real estate investment trust in the United States. The company focuses on investing in residential mortgage assets, including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities, as well as originating and servicing business purpose loans for real estate investors through its subsidiary, Lima One.

The company reported total assets of approximately $10.8 billion as of December 31, 2023, with residential whole loans representing 84% of the total. Additionally, it held approximately $746.1 million in investments in securities, including Agency MBS, Term notes backed by MSR collateral, CRT securities, and Non-Agency MBS, which comprised approximately 3% of its total assets.

In 2023, MFA Financial faced challenging market conditions, including significant volatility in fixed income markets due to factors such as aggressive monetary policy tightening, inflationary pressures, and geopolitical uncertainty. Despite these challenges, the company managed to add $3.4 billion of target assets at increasingly attractive yields, including funded originations of business purpose loans, Non-QM loans, and Agency MBS.

The company's financial performance for the year ended December 31, 2023, included generating GAAP earnings per share (EPS) of $0.46 per common share and Distributable Earnings of $1.59 per common share, while declaring dividends of $1.40 per common share. It executed eight securitizations, issuing $1.8 billion of securitized debt, and repurchased over $20 million of its 6.25% convertible notes due in June 2024 at a discount to their unpaid principal balance.

The residential mortgage asset portfolio for MFA Financial as of December 31, 2023, was approximately $9.9 billion, compared to $8.0 billion at December 31, 2022, reflecting a significant increase in acquisitions. The company's total recorded investment in residential whole loans and REO was $9.2 billion, with loan acquisition activity of $3.0 billion during 2023, including business purpose loans and Non-QM loans. The effective yield on residential whole loans generated by the company was 6.15%, with Purchased Non-performing Loans generating an effective yield of 9.44%.

Overall, MFA Financial's 10-K report indicates its ability to navigate challenging market conditions and expand its asset portfolio, while also maintaining its focus on generating distributable income and delivering shareholder value. The market has reacted to these announcements by moving the company's shares -0.7% to a price of $11.1. For more information, read the company's full 10-K submission here.

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