NEW YORK, May 7, 2019 /PRNewswire/ -- MFA Financial,
Inc. (NYSE: MFA) today announced its financial results for the
first quarter ended March 31, 2019.
First Quarter 2019 and other
highlights:
- MFA generated first quarter GAAP net income of $85.1 million, or $0.19 per common share.
- As of March 31, 2019, book value
per common share was $7.11.
- GAAP Net Income per common share was $0.06 higher than the fourth quarter of 2018,
primarily due to partial recovery of unrealized losses in our
residential mortgage securities portfolio, particularly CRT
securities.
- Core earnings was $77.6 million,
or $0.17 per common share in the
first quarter. Core earnings is a non-GAAP measure of MFA's
financial performance that is calculated by adjusting GAAP net
income to exclude the impact of unrealized gains and losses on
certain of our investments. Core earnings was lower than GAAP
earnings in the first quarter due to the exclusion of unrealized
gains on residential mortgage securities and related swap
hedges measured at fair value through earnings.
- Continued success in growing the investment portfolio, for the
sixth consecutive quarter. MFA added approximately $1.2 billion of residential mortgage assets in
the first quarter, including $875
million of residential whole loans, increasing the total
investment portfolio by $369
million.
- Net interest income on MFA's residential whole loan portfolio
increased 21.4% from the prior quarter to $17.6 million, due to the acquisition of
Purchased Performing Loans, including Non-QM loans, rehabilitation
or "fix and flip" loans and single family rental loans.
- On April 30, 2019, MFA paid its
first quarter 2019 dividend of $0.20
per share of common stock to shareholders of record as of
March 29, 2019.
Craig Knutson, MFA's CEO and
President, said, "MFA continued to grow our investment portfolio in
the first quarter of 2019, acquiring $1.2
billion of new assets during the quarter. Our
residential whole loan and REO portfolio increased by $595 million, largely due to investments in
purchased performing loans. In addition, MSR-related assets
increased by $213 million. Our
growth in purchased performing whole loans was driven by the
acquisition of Non-QM loans, fix and flip loans and single family
rental loans. We continue to gain traction on these new
acquisition efforts, which involve relationships cultivated over
the past two years. Through our willingness and ability to
explore and enter into various arrangements, including flow
agreements, strategic alliances and also minority equity
investments, we have been able to partner with originators to
source attractive new investments, while enabling them to grow with
support from MFA as a reliable provider of capital."
"MFA is introducing this quarter a Core earnings financial
measure that we consider to be more useful to understanding the
economic earnings generated by our portfolio. Core earnings
adjusts GAAP net income by excluding unrealized gains and losses of
certain assets that arise due to market pricing disruptions that
may be caused by technical factors rather than fundamental or cash
flow-related changes. In addition, Core earnings serves as a
consideration for our Board of Directors in the determination of
our dividend."
Mr. Knutson added, "Through our asset selection and hedging
strategy, our estimated net effective duration, a gauge of our
portfolio's sensitivity to interest rates, remained relatively low
and measured 1.07 at quarter-end. Our portfolio continues to
deliver book value stability. MFA's book value per common
share slightly decreased to $7.11
from $7.15 as of December 31, 2018. Leverage, which reflects
the ratio of our financing obligations to equity, was 2.7:1 at
quarter-end."
At March 31, 2019, our investments in residential whole
loans totaled $5.2 billion. Of
this amount, $3.7 billion is recorded
at carrying value and generated a yield of 5.89% during the
quarter, and $1.5 billion is recorded
at fair value on our consolidated balance sheet. We recorded gains
for the quarter on residential whole loans measured at fair value
of approximately $25.3 million,
primarily reflecting coupon interest payments and other cash
received during the quarter together with changes in the fair value
of the underlying loans. In addition, as of the end of the
quarter, we held approximately $291
million of REO properties. MFA's proactive asset
management team has been able to shorten liquidation timelines and
increase property sale proceeds, leading to improved outcomes and
better returns.
MFA's Legacy Non-Agency MBS had a face amount of $2.0 billion with an amortized cost of
$1.4 billion and a net purchase
discount of $632.1 million at
March 31, 2019. This discount consists of a $502.7 million credit reserve and
other-than-temporary impairments and a $129.4 million net accretable discount. We
believe this credit reserve appropriately factors in remaining
uncertainties regarding underlying mortgage performance and the
potential impact on future cash flows. Our Legacy Non-Agency
MBS generated a yield of 10.45% for the quarter. The
portfolio continues to outperform our credit assumptions and has
underlying mortgage loans that are on average approximately
thirteen years seasoned and only 11.2% are currently 60 or more
days delinquent.
As of March 31, 2019, the Agency MBS portfolio totaled
$2.5 billion, had an amortized cost
basis of 103.9% of par and generated a yield of 2.77% for the first
quarter. At the end of the first quarter, MFA held approximately
$1.3 billion of RPL/NPL MBS.
These securities had an amortized cost basis of 99.96% of par and
generated a yield of 4.90% for the quarter. In addition, our
investments in MSR-related assets at March
31, 2019 totaled $825.4
million and generated a yield of 5.39% for the first
quarter. Our investments in CRT securities totaled
$423.7 million at March 31,
2019, and generated a yield of 5.62% for the first quarter.
During the quarter we opportunistically sold residential mortgage
securities for $209.5 million,
realizing gains of $24.6 million
($5.5 million of which had previously
been recorded as unrealized gains on CRT securities for which we
had elected fair value accounting). We realized a loss of
$7.8 million on termination of swap
hedges in connection with managing our investment in 30-Year Agency
MBS, as a sharp rally in rates led to a shortening of these assets
and a reduction in their duration.
For the three months ended March 31,
2019, MFA's costs for compensation and benefits and other
general and administrative expenses were $13.2 million, or an annualized 1.55% of
stockholders' equity as of March 31, 2019.
The following table presents MFA's asset allocation as of
March 31, 2019, and the first quarter 2019 yield on average
interest-earning assets, average cost of funds and net interest
rate spread for the various asset types.
Table
1
|
|
ASSET
ALLOCATION
|
|
At March 31,
2019
|
Agency
MBS
|
Legacy
Non-
Agency
MBS
|
RPL/NPL
MBS
|
Credit
Risk
Transfer
Securities
|
Residential
Whole
Loans, at
Carrying
Value
(1)
|
Residential
Whole
Loans,
at Fair
Value
|
MSR-
Related
Assets
|
Other,
net
(2)
|
|
Total
|
($ in Millions)
|
|
|
|
|
|
|
|
|
|
|
Fair Value/Carrying
Value
|
$
|
2,547
|
$
|
1,814
|
$
|
1,285
|
$
|
424
|
$
|
3,724
|
$
|
1,512
|
$
|
825
|
$
|
540
|
|
$
|
12,671
|
Less Repurchase
Agreements
|
(2,353)
|
(1,360)
|
(1,009)
|
(339)
|
(2,151)
|
(596)
|
(648)
|
(54)
|
|
(8,510)
|
Less Securitized
Debt
|
—
|
—
|
—
|
—
|
(155)
|
(504)
|
—
|
—
|
|
(659)
|
Less Senior
Notes
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(97)
|
|
(97)
|
Net Equity
Allocated
|
$
|
194
|
$
|
454
|
$
|
276
|
$
|
85
|
$
|
1,418
|
$
|
412
|
$
|
177
|
$
|
389
|
|
$
|
3,405
|
Debt/Net Equity Ratio
(3)
|
12.1x
|
3.0x
|
3.7x
|
4.0x
|
1.6x
|
2.7x
|
3.7x
|
|
|
2.7x
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter
Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
Yield on Average
Interest
Earning Assets (4)
|
2.77%
|
10.45%
|
4.90%
|
5.62%
|
5.89%
|
N/A
|
5.39%
|
|
|
5.47%
|
Less Average Cost
of
Funds (5)
|
(2.53)
|
(3.30)
|
(3.43)
|
(3.38)
|
(4.21)
|
(4.13)
|
(3.56)
|
|
|
(3.49)
|
Net Interest Rate
Spread
|
0.24%
|
7.15%
|
1.47%
|
2.24%
|
1.68%
|
N/A
|
1.83%
|
|
|
1.98%
|
|
|
(1)
|
Includes $1.9
billion of Non-QM loans, $621.3 million of Rehabilitation loans,
$227.5 million of Single-family rental loans, $215.4 million of
seasoned performing loans and $773.9 million of purchased credit
impaired loans. At March 31, 2019, the total fair value
of these loans is estimated to be approximately $3.8
billion.
|
(2)
|
Includes cash and
cash equivalents and restricted cash, other assets and other
liabilities.
|
(3)
|
Represents the sum
of borrowings under repurchase agreements, securitized debt and
payable for unsettled purchases as a multiple of net equity
allocated. The numerator of our Total Debt/Net Equity Ratio
also includes Senior Notes.
|
(4)
|
Yields reported on
our interest earning assets are calculated based on the interest
income recorded and the average amortized cost for the quarter of
the respective asset. At March 31, 2019, the amortized
cost of our interest earning assets were as follows: Agency MBS -
$2.6 billion; Legacy Non-Agency MBS - $1.4 billion; RPL/NPL MBS -
$1.3 billion; Credit Risk Transfer securities - $413.8 million; and
Residential Whole Loans at carrying value - $3.7 billion. In
addition, the yield for residential whole loans at carrying value
was 5.80%, net of 9 basis points of servicing fee expense incurred
during the quarter. For GAAP reporting purposes, such
expenses are included in Loan servicing and other related operating
expenses in our statement of operations. Interest payments
received on residential whole loans at fair value is reported in
Other Income as Net gain on residential whole loans measured at
fair value though earnings in our statement of operations.
Accordingly, no yield is presented as such loans are not included
in interest earning assets for reporting purposes.
|
(5)
|
Average cost of
funds includes interest on repurchase agreements, the cost of
swaps, Senior Notes and securitized debt. Agency MBS cost of
funds is reduced by 13 basis points and Legacy Non-Agency MBS cost
of funds is reduced by 20 basis points associated with swaps to
hedge interest rate sensitivity on these assets. Residential
Whole Loans at Carrying Value cost of funds includes 6 basis points
associated with swaps to hedge interest rate sensitivity on these
assets.
|
At March 31, 2019, MFA's $4.4
billion of Agency and Legacy Non-Agency MBS were backed by
hybrid, adjustable and fixed-rate mortgages. Additional
information about these MBS, including average months to reset and
three-month average CPR, is presented below:
Table
2
|
|
|
|
Agency
MBS
|
|
Legacy Non-Agency
MBS (1)
|
|
Total
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time to
Reset
|
|
Fair Value
(2)
|
Average
Months
to Reset
(3)
|
3 Month
Average CPR
(4)
|
|
Fair Value
|
Average
Months
to Reset
(3)
|
3 Month
Average CPR
(4)
|
|
Fair Value
(2)
|
Average
Months
to Reset
(3)
|
3 Month
Average CPR
(4)
|
($ in
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
< 2 years
(5)
|
|
$
|
962
|
5
|
19.2%
|
|
$
|
1,115
|
5
|
14.2%
|
|
$
|
2,077
|
5
|
16.4%
|
2-5 years
|
|
113
|
39
|
4.0
|
|
—
|
—
|
—
|
|
113
|
39
|
4.0
|
> 5
years
|
|
10
|
75
|
3.5
|
|
—
|
—
|
—
|
|
10
|
75
|
3.5
|
ARM-MBS
Total
|
|
$
|
1,085
|
9
|
17.5%
|
|
$
|
1,115
|
5
|
14.2%
|
|
$
|
2,200
|
7
|
15.7%
|
15-year fixed
(6)
|
|
$
|
747
|
|
9.0%
|
|
$
|
1
|
|
31.6%
|
|
$
|
748
|
|
9.0%
|
30-year fixed
(6)
|
|
715
|
|
12.6
|
|
648
|
|
10.3
|
|
1,363
|
|
11.4
|
40-year fixed
(6)
|
|
—
|
|
—
|
|
47
|
|
11.0
|
|
47
|
|
11.0
|
Fixed-Rate
Total
|
|
$
|
1,462
|
|
10.7%
|
|
$
|
696
|
|
10.4%
|
|
$
|
2,158
|
|
10.6%
|
MBS Total
|
|
$
|
2,547
|
|
13.6%
|
|
$
|
1,811
|
|
12.7%
|
|
$
|
4,358
|
|
13.2%
|
|
|
(1)
|
Excludes $1.3
billion of RPL/NPL MBS.
|
(2)
|
Does not include
principal payments receivable of $524,000.
|
(3)
|
Months to Reset is
the number of months remaining before the coupon interest rate
resets. At reset, the MBS coupon will adjust based upon the
underlying benchmark interest rate index, margin and periodic or
lifetime caps. Months to Reset does not reflect scheduled
amortization or prepayments.
|
(4)
|
3 month average
CPR weighted by positions as of beginning of each month in the
quarter.
|
(5)
|
Includes
floating-rate MBS that may be collateralized by fixed-rate
mortgages.
|
(6)
|
Information
presented based on data available at time of loan
origination.
|
Webcast
MFA Financial, Inc. plans to host a live audio webcast of its
investor conference call on Tuesday, May 7, 2019, at
10:00 a.m. (Eastern Time) to discuss
its first quarter 2019 financial results. The live audio webcast
will be accessible to the general public over the internet at
http://www.mfafinancial.com through the "Webcasts &
Presentations" link on MFA's home page. To listen to the
conference call over the internet, please go to the MFA website at
least 15 minutes before the call to register and to download and
install any needed audio software. 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.
Cautionary Language Regarding Forward-Looking
Statements
When used in this press release or other written or oral
communications, statements which are not historical in nature,
including those containing words such as "will," "believe,"
"expect," "anticipate," "estimate," "plan," "continue," "intend,"
"should," "could," "would," "may" or similar expressions, are
intended to identify "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and, as such, may involve known and unknown risks, uncertainties
and assumptions. Statements regarding the following subjects, among
others, may be forward-looking: changes in interest rates and the
market (i.e., fair) value of MFA's MBS, residential whole loans,
CRT securities and other assets; changes in the prepayment rates on
residential mortgage assets, an increase of which could result in a
reduction of the yield on certain investments in our portfolio and
could require us to reinvest the proceeds received by us as a
result of such prepayments in investments with lower coupons, while
a decrease in which could result in an increase in the interest
rate duration of certain investments in our portfolio making their
valuation more sensitive to changes in interest rates and could
result in lower forecasted cash flows or, in certain circumstances,
other-than-temporary impairment on certain Legacy Non-Agency MBS
purchased at a discount; credit risks underlying MFA's assets,
including changes in the default rates and management's assumptions
regarding default rates on the mortgage loans securing MFA's
Non-Agency MBS and relating to MFA's residential whole loan
portfolio; MFA's ability to borrow to finance its assets and the
terms, including the cost, maturity and other terms, of any such
borrowings; implementation of or changes in government regulations
or programs affecting MFA's business; MFA's estimates regarding
taxable income, the actual amount of which is dependent on a number
of factors, including, but not limited to, changes in the amount of
interest income and financing costs, the method elected by MFA to
accrete the market discount on Non-Agency MBS and residential whole
loans and the extent of prepayments, realized losses and changes in
the composition of MFA's Agency MBS, Non-Agency MBS and residential
whole loan portfolios that may occur during the applicable tax
period, including gain or loss on any MBS disposals and whole loan
modifications, foreclosures and liquidations; the timing and amount
of distributions to stockholders, which are declared and paid at
the discretion of MFA's Board of Directors and will depend on,
among other things, MFA's taxable income, its financial results and
overall financial condition and liquidity, maintenance of its REIT
qualification and such other factors as MFA's Board of Directors
deems relevant; MFA's ability to maintain its qualification as a
REIT for federal income tax purposes; MFA's ability to maintain its
exemption from registration under the Investment Company Act of
1940, as amended (or the "Investment Company Act"), including
statements regarding the concept release issued by the Securities
and Exchange Commission ("SEC") relating to interpretive issues
under the Investment Company Act with respect to the status under
the Investment Company Act of certain companies that are engaged in
the business of acquiring mortgages and mortgage-related interests;
MFA's ability to continue growing its residential whole loan
portfolio, which is dependent on, among other things, the supply of
loans offered for sale in the market; expected returns on our
investments in nonperforming residential whole loans ("NPLs"),
which are affected by, among other things, the length of time
required to foreclose upon, sell, liquidate or otherwise reach a
resolution of the property underlying the NPL, home price values,
amounts advanced to carry the asset (e.g., taxes, insurance,
maintenance expenses, etc. on the underlying property) and the
amount ultimately realized upon resolution of the asset; targeted
or expected returns on MFA's investments in recently-originated
loans, the performance of which is, similar to MFA's other mortgage
loan investments, subject to, among other things, prepayment risk,
credit risk and financing cost associated with such investments;
risks associated with our investments in MSR-related assets,
including servicing, regulatory and economic risks, and risks
associated with investing in real estate assets, including changes
in business conditions and the general economy. These and other
risks, uncertainties and factors, including those described in the
annual, quarterly and current reports that MFA files with the SEC,
could cause MFA's actual results to differ materially from those
projected in any forward-looking statements it makes. All
forward-looking statements are based on beliefs, assumptions and
expectations of MFA's future performance, taking into account all
information currently available. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date on which they are made. New risks and
uncertainties arise over time and it is not possible to predict
those events or how they may affect MFA. Except as required by law,
MFA is not obligated to, and does not intend to, update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
MFA FINANCIAL,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
(In
Thousands, Except Per Share Amounts)
|
|
March 31,
2019
|
|
December 31,
2018
|
|
|
(Unaudited)
|
|
|
Assets:
|
|
|
|
|
Residential mortgage
securities:
|
|
|
|
|
Agency MBS, at fair
value ($2,524,612 and $2,575,331 pledged as collateral,
respectively)
|
|
$
|
2,546,597
|
|
$
|
2,698,213
|
Non-Agency MBS, at
fair value ($3,068,294 and $3,248,900 pledged as collateral,
respectively)
|
|
3,099,272
|
|
3,318,299
|
Credit Risk Transfer
("CRT") securities, at fair value ($419,877 and $480,315 pledged as
collateral,
respectively)
|
|
423,702
|
|
492,821
|
Residential whole
loans, at carrying value ($2,441,975 and $1,645,372 pledged as
collateral, respectively) (1)
|
|
3,724,146
|
|
3,016,715
|
Residential whole
loans, at fair value ($822,235 and $738,638 pledged as collateral,
respectively) (1)
|
|
1,512,337
|
|
1,665,978
|
Mortgage servicing
rights ("MSR") related assets ($825,363 and $611,807 pledged as
collateral, respectively)
|
|
825,363
|
|
611,807
|
Cash and cash
equivalents
|
|
76,579
|
|
51,965
|
Restricted
cash
|
|
41,999
|
|
36,744
|
Other
assets
|
|
551,618
|
|
527,785
|
Total
Assets
|
|
$
|
12,801,613
|
|
$
|
12,420,327
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
Repurchase
agreements
|
|
$
|
8,509,713
|
|
$
|
7,879,087
|
Other
liabilities
|
|
887,369
|
|
1,125,139
|
Total
Liabilities
|
|
$
|
9,397,082
|
|
$
|
9,004,226
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Preferred stock, $.01
par value; 7.50% Series B cumulative redeemable; 8,050 shares
authorized;
8,000 shares
issued and outstanding ($200,000 aggregate liquidation
preference)
|
|
80
|
|
80
|
Common stock, $.01
par value; 886,950 shares authorized; 450,483 and 449,787 shares
issued
and
outstanding, respectively
|
|
4,505
|
|
4,498
|
Additional paid-in
capital, in excess of par
|
|
3,622,636
|
|
3,623,275
|
Accumulated
deficit
|
|
(637,286)
|
|
(632,040)
|
Accumulated other
comprehensive income
|
|
414,596
|
|
420,288
|
Total Stockholders'
Equity
|
|
$
|
3,404,531
|
|
$
|
3,416,101
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
12,801,613
|
|
$
|
12,420,327
|
|
|
(1)
|
Includes
approximately $202.7 million and $209.4 million of Residential
whole loans, at carrying value and $647.0 million and $694.7
million of Residential whole loans, at fair value transferred to
consolidated VIEs at March 31, 2019 and December 31,
2018, respectively. Such assets can be used only to settle the
obligations of each respective VIE.
|
MFA FINANCIAL,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
Three Months
Ended
March 31,
|
(In Thousands, Except Per Share Amounts)
|
|
2019
|
|
2018
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Interest
Income:
|
|
|
|
|
Agency MBS
|
|
$
|
18,441
|
|
$
|
15,293
|
Non-Agency
MBS
|
|
54,001
|
|
56,102
|
CRT
securities
|
|
6,200
|
|
9,496
|
Residential whole
loans held at carrying value
|
|
49,620
|
|
14,329
|
MSR-related
assets
|
|
10,620
|
|
7,623
|
Cash and cash
equivalent investments
|
|
764
|
|
909
|
Other
interest-earning assets
|
|
1,306
|
|
—
|
Interest
Income
|
|
$
|
140,952
|
|
$
|
103,752
|
|
|
|
|
|
Interest
Expense:
|
|
|
|
|
Repurchase
agreements
|
|
$
|
70,809
|
|
$
|
45,717
|
Other interest
expense
|
|
8,217
|
|
4,837
|
Interest
Expense
|
|
$
|
79,026
|
|
$
|
50,554
|
|
|
|
|
|
Net Interest
Income
|
|
$
|
61,926
|
|
$
|
53,198
|
|
|
|
|
|
Other Income,
net:
|
|
|
|
|
Net gain on
residential whole loans measured at fair value through
earnings
|
|
$
|
25,267
|
|
$
|
38,498
|
Net realized gain on
sales of residential mortgage securities
|
|
24,609
|
|
8,817
|
Net unrealized
gain/(loss) on residential mortgage securities measured at fair
value through earnings
|
|
8,672
|
|
(880)
|
Net loss on Swaps not
designated as hedges for accounting purposes
|
|
(8,944)
|
|
—
|
Other, net
|
|
1,565
|
|
1,225
|
Other Income,
net
|
|
$
|
51,169
|
|
$
|
47,660
|
|
|
|
|
|
Operating and
Other Expense:
|
|
|
|
|
Compensation and
benefits
|
|
$
|
8,554
|
|
$
|
6,748
|
Other general and
administrative expense
|
|
4,645
|
|
3,832
|
Loan servicing and
other related operating expenses
|
|
11,039
|
|
6,883
|
Operating and
Other Expense
|
|
$
|
24,238
|
|
$
|
17,463
|
|
|
|
|
|
Net
Income
|
|
$
|
88,857
|
|
$
|
83,395
|
Less Preferred Stock
Dividends
|
|
3,750
|
|
3,750
|
Net Income
Available to Common Stock and Participating
Securities
|
|
$
|
85,107
|
|
$
|
79,645
|
|
|
|
|
|
Earnings per
Common Share - Basic and Diluted
|
|
$
|
0.19
|
|
$
|
0.20
|
|
|
|
|
|
Dividends Declared
per Share of Common Stock
|
|
$
|
0.20
|
|
$
|
0.20
|
Reconciliation of GAAP net income available to common stock
and participating securities to non-GAAP Core earnings
"Core earnings" is a non-GAAP financial measure of our operating
performance, within the meaning of Regulation G and Item 10(e) of
Regulation S-K, as promulgated by the Securities and Exchange
Commission. Core earnings excludes certain unrealized gains
and losses that we are required to include in GAAP Net Income each
period because management believes that these items, which to date
have typically resulted from short-term market volatility or other
market technical factors and not due to changes in fundamental
asset cash flows, are not reflective of the economic income
generated by our investment portfolio. Accordingly, we
believe that the adjustments to compute Core earnings specified
below better allow investors and analysts to evaluate our financial
results, including by analyzing changes in our Core earnings
between periods. In addition to using Core earnings in
the evaluation of investment portfolio performance over time,
Management considers estimates of periodic Core earnings as an
input to the determination of the level of quarterly dividends to
common shareholders that are recommended to the Board of Directors
for approval and in its forecasting and decision-making processes
relating to the allocation of capital between different asset
classes.
We believe that Core earnings provides useful supplemental
information to both management and investors in evaluating our
financial results. Core earnings should be used in
conjunction with results presented in accordance with GAAP.
Core earnings does not represent and should not be considered as a
substitute for Net Income or Cash Flows from Operating Activities,
each as determined in accordance with GAAP, and our calculation of
this measure may not be comparable to similarly titled measures
reported by other companies.
The following table provides a reconciliation of our GAAP net
income available to common stock and participating securities to
our non-GAAP Core earnings for the three months ended
March 31, 2019 and December 31, 2018:
|
|
Three Months
Ended
|
(In Thousands, Except Per Share
Amounts)
|
|
March
31,
2019
|
|
December 31,
2018
|
|
|
(Unaudited)
|
|
(Unaudited)
|
GAAP Net Income
Available to Common Stock and Participating Securities
|
|
$
|
85,107
|
|
$
|
57,129
|
Adjustments:
|
|
|
|
|
Unrealized
(gain)/loss on CRT securities measured at fair value through
earnings
|
|
(2,690)
|
|
27,246
|
Unrealized
net (gain)/loss on Agency MBS measured at fair value through
earnings and related
swaps that are not accounted for as
hedging transactions
|
|
(4,840)
|
|
11,758
|
Total
adjustments
|
|
$
|
(7,530)
|
|
$
|
39,004
|
Core
earnings
|
|
$
|
77,577
|
|
$
|
96,133
|
|
|
|
|
|
GAAP earnings per
common share
|
|
$
|
0.19
|
|
$
|
0.13
|
Core earnings per
common share
|
|
$
|
0.17
|
|
$
|
0.21
|
Weighted average
common shares for earnings per share
|
|
450,358
|
|
449,559
|
INVESTOR
CONTACT:
|
InvestorRelations@mfafinancial.com
|
|
212-207-6488
|
|
www.mfafinancial.com
|
|
|
MEDIA
CONTACT:
|
Abernathy
MacGregor
|
|
Tom
Johnson
|
|
212-371-5999
|
View original
content:http://www.prnewswire.com/news-releases/mfa-financial-inc-announces-first-quarter-2019-financial-results-300844616.html
SOURCE MFA Financial, Inc.