Ellington Financial Inc.
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
EFC$11.26-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001411342-25-000052
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0001411342-25-000077
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 333 previous paragraphs and 390 current paragraphs.
206 unchanged; 113 reworded; 30 added; 12 removed; 2 previous and 41 current paragraphs rearranged.
Tables are not compared: 33 previous and 42 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
•In early April, the U.S. administration announced its plans for broad-based tariffs. These announcements caused uncertainty in financial markets, contributing to heightened volatility and notable declines in major equity indices and widening of credit spreads in early April. However, financial markets recovered after a 90-day pause on most tariffs was announced on April 9th, except for tariffs on Chinese imports. Then in mid-May, the U.S. and China mutually agreed to reduce the minimum tariff rates on bilateral imports. By the end of the second quarter, multiple major equity indices had reached all-time highs.
Current report
•Interest rates were relatively volatile in the second quarter in response to economic uncertainty and evolving expectations around the path of monetary policy. The yield on the 2-year U.S. Treasury security traded within a 45-basis point range before ending the quarter down 16 basis points to 3.72%. The yield on the 10-year U.S. Treasury security traded within a 60-basis point range before ending the second quarter up just 2 basis points to 4.23%. Meanwhile, interest rate volatility, as measured by the MOVE Index, spiked in the early part of the quarter amid increased tariff uncertainty, before reversing course and finishing the quarter lower overall.
Current report
•Equity volatility spiked in early April, with the VIX reaching its highest level since the COVID-related highs of 2020, before reversing course and ending the quarter lower overall.
Current report
(2) Conformed to current period presentation.
Current report
(4)Also includes equity investments in unconsolidated entities holding commercial mortgage loans and REO and corporate loans secured by commercial mortgage loans.
Current report
(1)Excludes the assets of the European Mortgage Loan Securitization (see Note 13, Securitization Transactions—Residential Mortgage Loan Securitizations—European Residential Mortgage Loans), which is a consolidated VIE holding non-performing residential mortgage loans with an unpaid principal balance and fair value of $20.8 million and $19.3 million, respectively. The net fair value of the interest held by us in this VIE was $65 thousand.
Current report
Agency RMBS yield spreads widened in early April, driven in part by increased volatility due to tariff-related uncertainty. Yield spreads reversed course in May and June, tightening meaningfully, but still ended the quarter wider overall. Overall, we had a net loss in our Agency strategy for the quarter, driven by net losses on interest rate hedges.
Current report
Results for the quarter also reflect a decrease in incentive fees incurred, partially offset by net unrealized losses on our unsecured borrowings and an increase in income tax expense.
Current report
(2)Conformed to current period presentation.
Current report
For the three-month periods ended June 30, 2025 and 2024, Other investment related expenses in our investment portfolio segment were $5.5 million and $3.3 million, respectively. The increase in other investment related expenses was primarily due to an increase in due diligence expenses on newly originated loans we purchased as well as an increase in servicing expense on our larger average residential and commercial mortgage loan portfolios during the period.
Current report
Other operating expenses in our investment portfolio segment were $2.0 million for both of the three-month periods ended June 30, 2025 and 2024, respectively.
Current report
For the three-month periods ended June 30, 2025 and 2024, other operating expenses not allocable to either the investment portfolio segment or the Longbridge segment were $5.2 million and $5.1 million, respectively. The period-over-period increase in other operating expenses was primarily due to an increase in compensation and benefits expense partially offset by a decrease in other expenses.
Current report
For the three-month period ended June 30, 2025, other income (loss) was $7.0 million, consisting primarily of net realized and unrealized gains of $47.3 million on our securities and loans and $3.4 million of Other, net. These gains were partially offset by net unrealized losses of $(17.1) million on our Other secured borrowings, at fair value, $(23.4) million on our financial derivatives, and $(3.2) million on real estate owned, net. Net realized and unrealized gains of $47.3 million on our securities and loans were primarily on non-QM loans and retained tranches, Agency and non-Agency RMBS, closed-end second lien loans, HELOC loans, and other ABS. Net realized and unrealized losses of $(23.4) million on our financial derivatives were primarily related to net realized and unrealized losses on our credit hedges and interest rate swaps. The net loss on our interest rate swaps was driven by the decline in interest rates during the second quarter. Other, net of $3.4 million consists primarily of realized gains on foreign currency transactions, unrealized gains on foreign currency remeasurement, various origination and loan income, and rental income. We recognized net unrealized losses of $(17.1) million on our Other secured borrowings, at fair value for the quarter ended June 30, 2025, related to borrowings on our securitized non-QM loans. These securitized non-QM loans had net unrealized gains of $26.9 million, which are included in Unrealized gains (losses) on securities and loans, net.
Current report
For the three-month period ended June 30, 2024, other income (loss) was $27.6 million, consisting primarily of net realized and unrealized gains of $14.5 million on our securities and loans, $12.5 million on our financial derivatives, and $2.6 million of Other, net. These gains were partially offset by net unrealized losses of $(1.0) million on real estate owned, net and $(1.0) million on our Other secured borrowings, at fair value. Net realized and unrealized gains of $14.5 million on our securities and loans were primarily on non-QM loans, commercial mortgage loans, and non-Agency RMBS. These gains were partially offset by net realized and unrealized losses on non-Agency CMBS and Agency RMBS. Net realized and unrealized gains of $12.5 million on our financial derivatives were primarily related to net realized and unrealized gains, driven by higher interest rates, on our interest rate swaps, and to a lesser extent, our TBAs and our short positions in U.S. Treasury futures. Other, net of $2.6 million consisted primarily of various origination and loan income, rental income, and income and net realized and unrealized gains on our Forward MSR-related investment. We recognized net unrealized losses of $(1.0) million on our Other secured borrowings, at fair value for the three-month period ended June 30, 2024, related to borrowings on our securitized non-QM loans. These securitized non-QM loans had net unrealized gains of $6.0 million, which are included in Unrealized gains (losses) on securities and loans, net.
Current report
For the three-month period ended June 30, 2025, other income (loss) from the Longbridge segment was $44.0 million, consisting primarily of gains from Net change from HECM reverse mortgage loans, at fair value of $168.8 million, net gains of
Current report
For the three-month period ended June 30, 2024, other income (loss) from the Longbridge segment was $29.9 million, consisting primarily of gains from Net change from HECM reverse mortgage loans, at fair value of $146.7 million, other income of $5.1 million, net realized and unrealized gains of $3.5 million on financial derivatives and $2.8 million on securities and loans. These gains were partially offset by Net change related to HMBS obligations, at fair value of $(127.7) million and net unrealized losses of $(0.5) million on Other Secured borrowings, at fair value. Gains from Net change from HECM reverse mortgage loans at fair value of $146.7 million primarily consisted of interest income on HECM loans of $144.9 million, net realized and unrealized gains on HECM loans of $8.5 million, and net realized and unrealized losses on the HMBS MSR Equivalent of $(6.7) million. The net realized and unrealized gains on the HECM loans were primarily driven by tighter yield spreads on seasoned HECM loans quarter over quarter. The losses on HMBS MSR Equivalent were driven by higher interest rates and runoff during the quarter. Other income, included in Other, net of $5.1 million, is primarily related to servicing fees of $2.0 million, origination fees of $2.2 million, and a net gain of $1.7 million on loan commitments, which is partially offset by net realized and unrealized losses on MSRs of $(0.4) million. Losses from Net change related to HMBS obligations, at fair value of $(127.7) million primarily consisted of interest expense on the HMBS obligations of $(136.4) million and net unrealized gains on the HMBS obligations of $8.8 million, which partially offset the interest income on HECM loans and net realized and unrealized gains on HECM loans.
Current report
For the six-month period ended June 30, 2025 we had net income (loss) attributable to common stockholders of $74.6 million, compared to $79.3 million for the six-month period ended June 30, 2024. The decline in our results of operations was primarily due to a decrease in total other income and an increase in total expenses, partially offset by increases in net interest income and earnings from investments in unconsolidated entities.
Current report
Interest Income
Current report
Interest income from our investment portfolio segment for the six-month-period ended June 30, 2025 increased to $183.0 million, as compared to $180.2 million for the six-month period ended June 30, 2024.
Current report
For the six-month period ended June 30, 2025, interest income from our credit portfolio was $169.5 million, as compared to $158.9 million for the six-month period ended June 30, 2024. This period-over-period increase was primarily driven by a larger average credit portfolio, partially offset by slightly lower average asset yields for the six-month period ended June 30, 2025.
Current report
Interest Expense
Current report
The table below summarizes the components of interest expense in the Longbridge segment for the six-month periods ended June 30, 2025 and 2024.
Current report
Other Investment Related Expenses
Current report
For the six-month periods ended June 30, 2025 and 2024, Other investment related expenses in our investment portfolio segment were $8.3 million and $6.3 million, respectively. The increase in other investment related expenses was primarily due to an increase in due diligence expenses on newly originated loans we purchased as well as an increase in servicing expense on our larger average residential and commercial mortgage loan portfolios during the period.
Current report
Other Operating Expenses
Current report
Other Income (Loss)
Current report
Income Tax Expense (Benefit)
Current report
Income tax expense (benefit) was $1.4 million for the six-month period ended June 30, 2025, as compared to $0.2 million for the six-month period ended June 30, 2024.
Current report
We have elected the fair value option for our equity investments in unconsolidated entities. Earnings (losses) from investments in unconsolidated entities was $25.4 million for the six-month period ended June 30, 2025, as compared to $14.3 million for the six-month period ended June 30, 2024. For the six-month period ended June 30, 2025, Earnings (losses) from investments in unconsolidated entities of $25.4 million primarily consisted of net realized and unrealized gains on investments in loan originators, investments in unconsolidated entities related to risk retention related vehicles related to non-QM loan securitizations, and investments in entities holding commercial mortgage loans and REO, in which we co-invest with other Ellington affiliates.
Current report
For the six-month period ended June 30, 2024, Earnings (losses) from investments in unconsolidated entities of $14.3 million primarily consisted of realized and unrealized gains on investments in loan originators and on investments in entities holding commercial mortgage loans and REO, in which we co-invest with other Ellington affiliates, partially offset by unrealized losses on investments in unconsolidated entities related to risk retention related vehicles related to non-QM securitizations.
Removed paragraphs (12)
Previous report
•During the first quarter of 2025, the administration announced a new round of tariffs, primarily on imports from China, Canada, and Mexico, along with additional tariffs on certain goods and sectors. The administration also announced plans for broad “reciprocal” tariffs aimed at matching the tariff rates that other countries impose on U.S. exports. These announcements caused volatility to increase in financial markets, contributing to notable declines in major equity indices during the final weeks of the first quarter.
Previous report
•After rising sharply in the fourth quarter of 2024, interest rates declined significantly in the first quarter, with yields on the 2- and 10-year U.S. Treasury securities falling by 36 basis points quarter over quarter, ending at 3.88% and 4.21%, respectively. Meanwhile, interest rate volatility—as measured by the MOVE Index—declined in the early part of the quarter before reversing course and finishing slightly higher overall.
Previous report
•Equity volatility rose during the first quarter, with the VIX spiking in mid-March amid heightened investor concerns.
Previous report
(1)Fair value excludes accrued deferred performance-based fees to loan originator of $19 thousand.
Previous report
Agency RMBS yield spreads tightened in January and February, before reversing course and widening in March, driven in part by rising volatility related to uncertain tariff policies. Overall for the first quarter, the U.S. Agency MBS Index generated a negative excess return of (0.07)%. However, net gains on our Agency RMBS, driven by strong results in January and February, exceeded hedging-related losses, which delivered positive results in the Agency strategy overall for the quarter.
Previous report
With interest rates lower during the quarter, we had gains on the fixed receiver interest rate swaps used to hedge the fixed payments on our unsecured notes and preferred equity. These gains exceeded net losses on our unsecured notes, which included a mark-to-market loss on our unsecured notes driven by lower interest rates, as well as a realized loss related to the par redemption of our 6.75% notes that we had carried at a slight discount to par.
Previous report
(1)See Note 16 of the notes to the condensed consolidated financial statements for further details on management fee rebates.
Previous report
(1)See Note 16 of the notes to the condensed consolidated financial statements for further details on management fee rebates.
Previous report
Base Management Fees
Previous report
Incentive Fees
Previous report
For the three-month periods ended March 31, 2025 and 2024, Other investment related expenses in our investment portfolio segment were $2.8 million and $3.0 million, respectively. The decrease in Other investment related expenses was primarily due to a decrease in expenses on our non-performing commercial mortgage loans, partially offset by an increase in servicing expense on our larger residential mortgage loan portfolio.
Previous report
On February 6, 2023, we issued 4,000,000 shares of Series C Fixed-Rate Reset Cumulative Redeemable Preferred Stock, $0.001 par value per share ("Series C Preferred Stock"), for proceeds of $96.5 million, net of underwriting discounts and commissions and offering costs of $3.5 million. Holders of the Series C Preferred Stock are entitled to receive cumulative cash dividends from and including the original issue date to, but excluding, April 30, 2028 (the "First Reset Date"), at a fixed rate equal to 8.625% per annum of the $25.00 per share liquidation preference. The applicable fixed rate resets on the First Reset Date and again on the fifth anniversary of the preceding reset date (each a "Reset Date"), at a rate equal to the five-year treasury rate as measured three business days prior to the Reset Date plus 5.13% per annum of the $25.00 per share liquidation preference. Dividends are payable quarterly in arrears on or about the 30th day of each January, April, July, and October.
Reworded paragraphs (113)
Previous wording
On October 3, 2022, we completed the acquisition of a controlling interest in Longbridge Financial, LLC ("Longbridge"), a reverse mortgage loan originator and servicer (the "Longbridge Transaction"). As a result of the Longbridge Transaction, we consolidate Longbridge's financial results. On December 14, 2023, we completed a merger between Arlington Asset Investment Corp., a Virginia corporation ("Arlington"), and our subsidiary EF Merger Sub Inc., a Virginia corporation (such transaction, the "Arlington Merger").
Current wording
On December 14, 2023, we completed a merger between Arlington Asset Investment Corp., a Virginia corporation ("Arlington"), and our subsidiary EF Merger Sub Inc., a Virginia corporation (such transaction, the "Arlington Merger").
Previous wording
Our Longbridge Segment is focused on the origination and servicing of, and investment in, reverse mortgage loans, including associated financial assets, financing, hedging, and allocated expenses. Longbridge originates home equity conversion mortgage loans ("HECM loans"), which are insured by the Federal Housing Administration ("FHA"), and non-FHA-insured reverse mortgage loans, which we refer to as "proprietary reverse mortgage loans." HECM loans are generally eligible for securitization into HECM-backed MBS ("HMBS"), which are guaranteed by the Government National Mortgage Association ("GNMA").
Current wording
Our Longbridge Segment is focused on the origination and servicing of, and investment in, reverse mortgage loans, including associated financial assets, financing, hedging, and allocated expenses. Longbridge Financial, LLC ("Longbridge") originates home equity conversion mortgage loans ("HECM loans"), which are insured by the Federal Housing Administration ("FHA"), and non-FHA-insured reverse mortgage loans, which we refer to as "proprietary reverse mortgage loans." HECM loans are generally eligible for securitization into HECM-backed MBS ("HMBS"), which are guaranteed by the Government National Mortgage Association ("GNMA").
Previous wording
As a result of the Arlington Merger, the Company, through certain of its subsidiaries, is party to various agreements that enable the Company to participate in the economic returns of a portfolio of forward MSRs. The mortgage loans underlying such Forward MSR-related investments consist solely of residential mortgage loans guaranteed by Fannie Mae or Freddie Mac.
Current wording
As a result of the Arlington Merger, we, through certain of our subsidiaries, are party to various agreements that enable us to participate in the economic returns of a portfolio of forward MSRs. The mortgage loans underlying such Forward MSR-related investments consist solely of residential mortgage loans guaranteed by Fannie Mae or Freddie Mac.
Previous wording
As a result of the Longbridge Transaction, we consolidate Longbridge, which acquires reverse mortgage loans both through its origination activities and through secondary market purchases. Historically, the majority of loans acquired by Longbridge have been home equity conversion mortgage loans ("HECMs"), which are insured by FHA and eligible for inclusion in GNMA-guaranteed HECM-backed MBS ("HMBS"). Longbridge is an approved issuer of HMBS, and it pools and securitizes the majority of its HECM loans into HMBS, which it then sells in the secondary market while retaining the servicing rights on the underlying HECM loans. In addition, Longbridge opportunistically acquires, in the secondary market, HECM loans that have been mandatorily repurchased from HMBS pools ("HECM Buyout Loans") by other HECM servicers upon the outstanding principal balance of such loans reaching or exceeding 98% of their respective maximum claim amount. Depending on their status, HECM Buyout Loans are either eligible to be assigned to HUD in connection with an FHA insurance claim ("assignable buyout loans," or "ABOs"), or ineligible to be assigned to HUD ("non-assignable buyout loans," or "NABOs").
Current wording
We consolidate Longbridge, which acquires reverse mortgage loans both through its origination activities and through secondary market purchases. Historically, the majority of loans acquired by Longbridge have been home equity conversion mortgage loans ("HECMs"), which are insured by FHA and eligible for inclusion in GNMA-guaranteed HECM-backed MBS ("HMBS"). Longbridge is an approved issuer of HMBS, and it pools and securitizes the majority of its HECM loans into HMBS, which it then sells in the secondary market while retaining the servicing rights on the underlying HECM loans. In addition, Longbridge opportunistically acquires, in the secondary market, HECM loans that have been mandatorily repurchased from HMBS pools ("HECM Buyout Loans") by other HECM servicers upon the outstanding principal balance of such loans reaching 98% of their respective maximum claim amount. Depending on their status, HECM Buyout Loans are either eligible to be assigned to HUD in connection with an FHA insurance claim ("assignable buyout loans," or "ABOs"), or ineligible to be assigned to HUD ("non-assignable buyout loans," or "NABOs").
Previous wording
•After lowering its target range for the federal funds rate by a full percentage point to 4.25%–4.50% in the second half of 2024, the U.S. Federal Reserve (the "Federal Reserve") maintained that range at its January and March 2025 meetings. In its March announcement, the Federal Reserve noted that “uncertainty around the economic outlook has increased.”
Current wording
•The U.S. Federal Reserve (the "Federal Reserve") maintained the target range for the federal funds rate at 4.25%–4.50% at both its May and June 2025 meetings. After noting that economic uncertainty had increased further at its May meeting, the Federal Reserve’s June announcement noted that “uncertainty about the economic outlook has diminished but remains somewhat elevated.”
Previous wording
•The Federal Reserve announced that it would further reduce the pace of its balance sheet contraction, beginning in April, by lowering the cap on portfolio runoff of U.S. Treasury securities from $25 billion to $5 billion, while maintaining the $35 billion cap on Agency RMBS runoff.
Current wording
•As announced at its March meeting, the Federal Reserve further reduced the pace of its balance sheet contraction in April by lowering the cap on portfolio runoff of U.S. Treasury securities from $25 billion to $5 billion, while maintaining the $35 billion cap on Agency RMBS runoff.
Previous wording
•Mortgage rates rose at the beginning of the first quarter, with the Freddie Mac survey 30-year mortgage rate increasing from 6.85% at the start of the year to 7.04% by mid-January. However, mortgage rates subsequently declined, with the 30-year mortgage rate falling to 6.65% by the end of the quarter.
Current wording
•Mortgage rates increased quarter over quarter with the Freddie Mac survey 30-year mortgage rate increasing from 6.65% as of March 27th to 6.77% as of June 26th.
Previous wording
•Secured Overnight Financing Rates (“SOFR”) were largely unchanged over the quarter. The one-month SOFR rate declined by 1 basis point to 4.32%, while the three-month SOFR rate declined by 2 basis points to 4.29% at quarter end. SOFR rates drive many of our financing costs.
Current wording
•Secured Overnight Financing Rates (“SOFR”) were generally unchanged quarter over quarter. The one-month SOFR rate remained at 4.32%, while the three-month SOFR rate remained at 4.29%. SOFR rates drive many of our financing costs.
Previous wording
•Following a 3.9% increase in 2024, the S&P CoreLogic Case-Shiller US National Home Price NSA Index rose by 0.5% over the first two months of 2025. Meanwhile, the National Association of Realtors Housing Affordability Index increased by 1.3% during the first two months of 2025, reflecting a modest improvement in affordability with lower mortgage rates.
Current wording
•Following a 3.9% increase in 2024, the S&P CoreLogic Case-Shiller US National Home Price NSA Index rose by 2.4% over the first five months of 2025. Meanwhile, the National Association of Realtors Housing Affordability Index declined by 3.7% during the first five months of 2025, as higher mortgage rates and elevated home prices stressed housing affordability.
Previous wording
•The Mortgage Bankers Association’s Refinance Index, while still low by historical standards, rose by 80% quarter over quarter, indicating a pickup in refinancing activity amid slightly lower mortgage rates.
Current wording
•The Mortgage Bankers Association’s Refinance Index, while still low by historical standards, rose by 6.9% quarter over quarter.
Previous wording
•Mortgage prepayment speeds also increased but remained low overall, with Fannie Mae 30-year MBS registering CPRs of 5.2 in January, 5.1 in February, and 6.6 in March.
Current wording
•Mortgage prepayment speeds also remained low overall, with Fannie Mae 30-year MBS registering CPRs of 7.4 in both April and May and 7.2 in June.
Previous wording
•U.S. real GDP contracted at an estimated annualized rate of 0.3% in the first quarter of 2025, after growing by 2.4% in the prior quarter. Meanwhile, the unemployment rate edged higher, rising from 4.0% in January to 4.1% in February and 4.2% in March.
Current wording
•U.S. real GDP expanded at an estimated annualized rate of 3.0% in the second quarter, after contracting by 0.5% in the prior quarter. Meanwhile, unemployment remained steady at 4.2% in both April and May, before falling slightly to 4.1% in June.
Previous wording
•Inflation, as measured by the 12-month change in the Consumer Price Index for All Urban Consumers (“CPI-U"), not seasonally adjusted, registered 3.0% in January, 2.8% in February, and 2.4% in March 2025. This compares to 12-month changes of 2.6% in October, 2.7% in November, and 2.9% in December 2024.
Current wording
•Inflation, as measured by the 12-month change in the Consumer Price Index for All Urban Consumers (“CPI-U"), not seasonally adjusted, increased in the second quarter, registering 2.3% in April, 2.4% in May, and 2.7% in June 2025. This compares to 12-month changes of 3.0% in January, 2.8% in February, and 2.4% in March 2025.
Previous wording
•For the first quarter, the Bloomberg U.S. MBS Index posted a positive return of 3.06% but a negative excess return (on a duration-adjusted basis) of (0.07%) relative to the Bloomberg U.S. Treasury Index.
Current wording
•For the second quarter, the Bloomberg U.S. MBS Index posted a return of 1.17% and an excess return (on a duration-adjusted basis) of 0.18% relative to the Bloomberg U.S. Treasury Index.
Previous wording
•The Bloomberg U.S. Corporate Bond Index generated a positive return of 2.31% but a negative excess return of (0.85%), while the Bloomberg U.S. Corporate High Yield Bond Index generated a positive return of 1.00% but a negative excess return of (1.13%), for the quarter. Corporate credit spreads widened during the quarter, with spreads on the Markit CDX North America Investment Grade and High Yield Indices rising by 65 and 12 basis points quarter-over-quarter, respectively.
Current wording
•The Bloomberg U.S. Corporate Bond Index generated a return of 1.87% and an excess return of 1.06% for the quarter, while the Bloomberg U.S. Corporate High Yield Bond Index generated a return of 3.56% and an excess return of 2.17%. Corporate credit spreads tightened during the quarter, with spreads on the Markit CDX North America Investment Grade and High Yield Indices decreasing by 58 and 10 basis points quarter-over-quarter, respectively.
Previous wording
•After strong gains in 2024, U.S. equity markets declined in the first quarter, with some indices recording their worst quarterly performance since 2022, driven largely by growing uncertainty around trade policy. In the first quarter, the NASDAQ fell by 10.4%, the S&P 500 fell by 4.6%, and the Dow Jones Industrial Average fell by 1.3%. In contrast, London's FTSE 100 index rose by 5.0%, while the MSCI World global equity index fell by 2.1%.
Current wording
•After sharp declines in early April driven largely by fears around trade policy, U.S. equity markets rallied to generate excellent performance in the second quarter. Overall, the NASDAQ rose by 17.7%, the S&P 500 rose by 10.6%, and the Dow Jones Industrial Average rose by 5.0%, with both the NASDAQ and S&P 500 finishing the quarter at all-time highs. Meanwhile, London's FTSE 100 index rose by 2.1%, while the MSCI World global equity index increased by 11.0%.
Previous wording
(2)Also includes related REO. 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, as discussed in Note 2 of the notes to consolidated financial statements.
Current wording
(3)Also includes related REO. 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, as discussed in Note 2 of the notes to consolidated financial statements.
Previous wording
(4)Also includes equity investments in securitization-related vehicles.
Current wording
(5)Also includes equity investments in securitization-related vehicles.
Previous wording
(5)Also includes corporate loans to certain loan origination entities in which we hold an equity investment.
Current wording
(6)Also includes corporate loans to certain loan origination entities in which we hold an equity investment.
Previous wording
(6)Retained RMBS represents RMBS issued by non-consolidated Ellington-sponsored loan securitization trusts, and interests in entities holding such RMBS.
Current wording
(7)Retained RMBS represents RMBS issued by non-consolidated Ellington-sponsored loan securitization trusts, and interests in entities holding such RMBS.
Previous wording
(7)Also includes equity investment in Ellington affiliate.
Current wording
(8)Also includes equity investment in Ellington affiliate.
Previous wording
(8)Includes equity investment in an unconsolidated entity which purchases certain other loans for eventual securitization.
Current wording
(9)Includes equity investment in an unconsolidated entity which purchases certain other loans for eventual securitization.
Previous wording
(9)Includes an investment in an unconsolidated entity holding European RMBS.
Current wording
(10)Includes an investment in an unconsolidated entity holding European RMBS.
Previous wording
(10)We participate in the economic returns of a portfolio of forward MSRs under various agreements with a licensed mortgage servicer holding such MSRs. Under such agreements, we can direct the servicer to finance the MSRs and distribute the proceeds of such financings to us. Forward MSR-related investments, at fair value are presented on our Condensed Consolidated Balance Sheet net of any such financing; as of both March 31, 2025 and December 31, 2024, such borrowings were $93.5 million.
Current wording
(11)We participate in the economic returns of a portfolio of forward MSRs under various agreements with a licensed mortgage servicer holding such MSRs. Under such agreements, we can direct the servicer to finance the MSRs and distribute the proceeds of such financings to us. Forward MSR-related investments, at fair value are presented on our Condensed Consolidated Balance Sheet net of any such financing; as of both June 30, 2025 and March 31, 2025, such borrowings were $93.5 million.
Previous wording
Our total adjusted long credit portfolio decreased by 4% to $3.30 billion as of March 31, 2025, from $3.42 billion as of December 31, 2024. The decline was due to the impact of securitizations completed during the quarter, as well as a smaller residential transition loan portfolio, with principal paydowns in that portfolio exceeding new purchases, and net sales of CLOs. Offsetting a portion of the decline were larger commercial mortgage bridge and non-QM loan portfolios, driven by net purchases.
Current wording
Our total adjusted long credit portfolio increased by 1% to $3.32 billion as of June 30, 2025, compared to $3.30 billion as of March 31, 2025. Our portfolios of commercial mortgage bridge loans, non-QM loans, and non-Agency RMBS all expanded, driven by net purchases. These increases were largely offset by the impact of securitizations, tactical sales of HELOC and non-QM loans, and a smaller residential transition loan portfolio, with principal paydowns in that portfolio exceeding new purchases.
Previous wording
Higher net interest income and net gains from forward MSR-related investments, commercial mortgage loans, closed-end second lien loans, and non-QM retained tranches drove the positive performance of our credit portfolio during the quarter. We also benefited from positive results from our equity investments in loan originators. Partially offsetting the higher net interest income were net realized and unrealized losses on consumer loans, CLOs, non-QM loans, and residential transition loans; as well as losses on residential and commercial REO.
Current wording
Higher net interest income and net realized and unrealized gains from non-QM loans and retained tranches, closed-end second lien loans and retained tranches, and other loans and ABS drove positive performance in our credit portfolio during the quarter. We also benefited from positive results from our equity investments in loan originators. Partially offsetting the higher net interest income were net unrealized losses on forward MSR-related investments, as well as losses on commercial and residential REO.
Previous wording
The percentage of delinquent loans in our residential mortgage loan portfolio increased moderately during the quarter, while the percentage of delinquent loans in our commercial mortgage loan portfolio (including loans accounted for as equity method investments) was roughly unchanged. Both our residential and commercial mortgage loan portfolios continue to experience low levels of realized credit losses and strong overall credit performance, though we continue to work out several non-performing commercial assets. We successfully resolved one of these non-performing commercial assets during the quarter.
Current wording
The percentage of delinquent loans in our residential mortgage loan portfolio and commercial mortgage loan portfolio (including loans accounted for as equity method investments) increased during the quarter. Both our residential and commercial mortgage loan portfolios continue to experience low levels of realized credit losses and strong overall credit performance, though we continue to work out a few non-performing commercial assets. We successfully resolved one of these non-performing commercial assets during the quarter, and now have only one significant workout remaining.
Previous wording
During the quarter, the net interest margin on our credit portfolio, including the effect of actual and accrued periodic payments on interest rate swaps used to hedge the assets, was 2.90%, down from 3.02% for the prior quarter, as a higher cost of funds more than offset higher asset yields. 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.
Current wording
During the quarter, the net interest margin on our credit portfolio increased to 3.11% from 2.90%, primarily driven by a lower 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.
Previous wording
(1)Excludes commercial mortgage loans in non-accrual status, with a fair value of $41.3 million.
Current wording
(1)Excludes commercial mortgage loans in non-accrual status, with a fair value of $58.5 million.
Previous wording
Delinquencies in our commercial loan portfolio (including loans accounted for as equity method investments) were roughly unchanged during the first quarter. As of March 31, 2025, we held three commercial REO properties with a fair value of $31.7 million. Additionally, as of March 31, 2025, an unconsolidated variable interest entity in which we co-invest with other Ellington affiliates held a commercial REO property; the fair value of our allocable portion of such REO was approximately $33.6 million.
Current wording
As of June 30, 2025, we held two commercial REO properties with a fair value of $17.3 million. Additionally, as of June 30, 2025, an unconsolidated variable interest entity in which we co-invest with other Ellington affiliates held a commercial REO property; the fair value of our allocable portion of such REO was approximately $36.9 million.
Previous wording
As discussed in Note 16 of the notes to our condensed consolidated financial statements, we, through a wholly-owned trust subsidiary, purchase automobile loans under agreements with a consumer loan originator. We have beneficial interests in the loan cash flows, which are net of servicing-related fees and expenses including a deferred performance-based fee to the consumer loan originator, in which we have a non-controlling equity interest. The total fair value of these investments, which are included in Securities, at fair value on the Condensed Consolidated Balance Sheet, was $56.3 million as of March 31, 2025. The table below provides additional information about the automobile loans underlying these participation certificates, which comprise our investments in ABS backed by consumer loans, as of March 31, 2025:
Current wording
As discussed in Note 16 of the notes to our condensed consolidated financial statements, we, through a wholly-owned trust subsidiary, purchase automobile loans under agreements with a consumer loan originator. We have beneficial interests in the loan cash flows, which are net of servicing-related fees and expenses including a deferred performance-based fee to the consumer loan originator, in which we have a non-controlling equity interest. The total fair value of these investments, which are included in Securities, at fair value on the Condensed Consolidated Balance Sheet, was $54.6 million as of June 30, 2025. The table below provides additional information about the automobile loans underlying these participation certificates, which comprise our investments in ABS backed by consumer loans, as of June 30, 2025:
Previous wording
(2)Excludes charged-off consumer loans with an aggregate unpaid principal balance and fair value of $86.9 million and $0.8 million, respectively, for which the Company has determined that it is probable the servicer will be able to collect principal and interest. See Note 5 of the Notes to Condensed Consolidated Financial Statements for additional details on charged-off consumer loans.
Current wording
(1)Excludes charged-off consumer loans with an aggregate unpaid principal balance and fair value of $90.2 million and $0.6 million, respectively, for which we have determined that it is probable the servicer will be able to collect principal and interest. See Note 5 of the Notes to Condensed Consolidated Financial Statements for additional details on charged-off consumer loans.
Previous wording
Our total long Agency RMBS portfolio decreased by 14% quarter over quarter to $256.1 million, driven by net sales.
Current wording
Our total long Agency RMBS portfolio increased by 5% quarter over quarter to $268.5 million, driven by net purchases.
Previous wording
During the quarter, we continued to hedge interest rate risk through the use of interest rate swaps and short positions in TBAs, U.S. Treasury securities and futures. We ended the quarter with a net short TBA position on a notional basis but a net long TBA position on a duration-weighted basis.
Current wording
During the quarter, we continued to hedge interest rate risk through the use of interest rate swaps and short positions in TBAs, U.S. Treasury securities and futures. We ended the quarter with a net long TBA position on a duration-weighted basis associated with the Agency strategy.
Previous wording
For the three-month period ended March 31, 2025, the net interest margin on our Agency RMBS, excluding the Catch-up Amortization Adjustment, was 2.46%, up from 2.22%, driven by a lower cost of funds. As with our credit portfolio, 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.
Current wording
The net interest margin on our Agency portfolio, excluding the Catch-up Amortization Adjustment, decreased to 2.29% as of June 30, 2025 from 2.46% as of March 31, 2025, driven primarily by a higher cost of funds. As with our credit portfolio, 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.
Previous wording
As of March 31, 2025 and December 31, 2024, the weighted average net pass-through rate on our fixed-rate specified pools was 4.0% and 4.1%, respectively.
Current wording
As of June 30, 2025 and March 31, 2025, the weighted average net pass-through rate on our fixed-rate specified pools was 3.9% and 4.0%, respectively.
Previous wording
(3)As of March 31, 2025, includes $14.0 million of active HECM Buyout Loans, $14.1 million of inactive HECM Buyout Loans, and $5.2 million of other inactive HECM loans. As of December 31, 2024, includes $7.8 million of active HECM Buyout Loans, $11.1 million of inactive HECM Buyout Loans, and $5.0 million of other inactive HECM loans.
Current wording
(3)As of June 30, 2025, includes $11.9 million of active HECM Buyout Loans, $17.7 million of inactive HECM Buyout Loans, and $5.3 million of other inactive HECM loans. As of March 31, 2025, includes $14.0 million of active HECM Buyout Loans, $14.1 million of inactive HECM Buyout Loans, and $5.2 million of other inactive HECM loans
Previous wording
(4)As of March 31, 2025, includes $615.3 million of securitized proprietary reverse mortgage loans and $12.4 million of cash held in securitization reserve funds. As of December 31, 2024, includes $606.8 million of securitized proprietary reverse mortgage loans and $15.0 million of cash held in securitization reserve funds.
Current wording
(4)As of June 30, 2025, includes $828.4 million of securitized proprietary reverse mortgage loans, $18.0 million of cash held in a securitization reserve fund, and $7.5 million of investment related receivables. As of March 31, 2025, includes $615.3 million of securitized proprietary reverse mortgage loans and $12.4 million of cash held in securitization reserve funds.
Previous wording
Our Longbridge segment generated a small net loss for the quarter, as net losses on interest rate hedges exceeded a positive contribution from originations and a net gain on the HMBS MSR Equivalent. In originations, higher origination margins for proprietary reverse mortgage loans and steady margins for HECM drove the positive results, despite lower origination volumes quarter over quarter. Meanwhile, tighter HMBS yield spreads drove the net gain on the HMBS MSR Equivalent.
Current wording
Our Longbridge segment reported a net gain for the second quarter with positive contributions from both originations and servicing. In originations, higher origination volumes in both HECM and proprietary reverse loans, steady origination margins for both products, and net gains related to a proprietary reverse mortgage loan securitization drove results. Meanwhile, MSR-related income, strong tail securitization executions, and a net gain on the HMBS MSR Equivalent, primarily due to tighter HMBS yield spreads, drove the positive contribution from servicing. These gains were partially offset by net losses on interest rate hedges.
Previous wording
Our Longbridge portfolio, excluding non-retained tranches of consolidated securitization trusts, increased by 31% sequentially to $549.0 million as of March 31, 2025, driven by proprietary reverse mortgage loan originations.
Current wording
Our Longbridge portfolio, excluding non-retained tranches of consolidated securitization trusts, decreased by 1% sequentially to $545.6 million as of June 30, 2025, as the impact of the securitization of proprietary reverse mortgage loans completed during the quarter slightly exceeded the impact of new originations in that sector.
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Current report — wording carried from elsewhere
The table(1) below provides additional details for residential mortgage loans that are 90 days or more past due as of June 30, 2025:
Current report — wording carried from elsewhere
We have various financing arrangements in place as of June 30, 2025, including both secured and unsecured borrowings. We use repos, secured lines of credit, and various other secured borrowings to finance our portfolios, each of which we account for as collateralized borrowings. We have also obtained, through the securitization markets, term financing for non-QM loans, proprietary reverse mortgage loans, closed-end second lien mortgage loans, and consumer loans. Additionally, as an issuer of
Current report — wording carried from elsewhere
For the three-month period ended June 30, 2025 and 2024, interest income from our Agency RMBS was $2.8 million and $6.9 million, respectively. This period-over-period decrease was due to a significantly smaller Agency portfolio in the current period and lower average asset yields for the three-month period ended June 30, 2025.
Current report — wording carried from elsewhere
In addition to the base management fee, our Manager is also entitled to a quarterly incentive fee if our performance (as measured by adjusted net income, as defined in the management agreement) over the relevant rolling four quarter calculation period (including any opening loss carryforward) exceeds a defined return hurdle for the period. No incentive fee was incurred for either of the three-month periods ended June 30, 2025 and 2024 since our income did not exceed the prescribed hurdle amount on a rolling four quarter basis. Because our operating results can vary materially from one period to another, incentive fee expense can be highly variable.
Current report — wording carried from elsewhere
Other investment related expenses in the Longbridge segment primarily consist of servicing expense related to reverse mortgage loans and various loan origination expenses. For the three-month periods ended June 30, 2025 and 2024, Other investment related expenses were $13.2 million and $7.8 million, respectively. The increase in Other investment related expenses in the Longbridge segment was primarily due to debt issuance costs incurred in connection with
Current report — wording carried from elsewhere
a securitization of proprietary reverse mortgage loans during the three-month period ended June 30, 2025, and an increase in servicing and various loan origination expenses resulting from our larger holdings and originations of reverse mortgage loans.
Current report — wording carried from elsewhere
$19.4 million on securities and loans, and $8.9 million of Other, net, which were partially offset by Net change related to HMBS obligations, at fair value of $(142.2) million, net losses of $(8.8) million on Other secured borrowings, at fair value, and net losses of $(2.6) million on financial derivatives. Net change from HECM reverse mortgage loans at fair value of $168.8 million primarily consisted of $149.6 million of coupon income on HECM loans, as well as net realized and unrealized gains of $23.0 million on HECM loans primarily driven by profitable new originations and tail fundings, as well as tighter yield spreads. Net change related to HMBS obligations, at fair value of $(142.2) million primarily consisted of $(139.1) million of interest expense on the HMBS obligations and net unrealized losses of $(3.1) million on the HMBS obligations, which partially offset the interest income and net realized and unrealized gains on HECM loans. Other, net of $8.9 million is primarily related to $5.6 million of origination fees and $2.0 million of servicing fees. Net gains of $19.4 million on securities and loans were primarily driven by unrealized gains on proprietary reverse mortgage loans, including gains related to a securitization of proprietary reverse mortgage loans.
Current report — wording carried from elsewhere
For the three-month period ended June 30, 2025, other income (loss) was $(1.8) million, consisting primarily of net losses on our Unsecured borrowings, at fair value, and related hedges. For the three-month period ended June 30, 2024, other income (loss) was $0.1 million, consisting primarily of a net gain on our Unsecured borrowings, at fair value, driven by the increase in interest rates. This gain was mostly offset by net losses 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, also driven by the increase in interest rates.
Current report — wording carried from elsewhere
Results of Operations for the Six-Month Periods Ended June 30, 2025 and 2024
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The following tables summarizes our results of operations by segment (as applicable) for the six-month periods ended June 30, 2025 and 2024:
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Net Income (Loss) Attributable to Common Stockholders
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Interest income was $231.4 million for the six-month period ended June 30, 2025, as compared to $202.0 million for the six-month period ended June 30, 2024. Interest income includes coupon payments received and accrued on our holdings, the net accretion and amortization of purchase discounts and premiums on various holdings, and interest on our cash balances, including those balances held by our counterparties as collateral.
Current report — wording carried from elsewhere
The following table details our interest income, average holdings of yield-bearing assets, and weighted average yield based on amortized cost for the six-month periods ended June 30, 2025 and 2024:
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(1)Amounts exclude interest income on cash and cash equivalents (including when posted as margin) and long positions in U.S. Treasury securities.
Current report — wording carried from elsewhere
Some of the variability in our interest income and portfolio yields is due to the Catch-up Amortization Adjustment. For the six-month period ended June 30, 2025 we had a positive Catch-up Amortization Adjustment of $0.9 million which increased our interest income. Comparatively, for the six-month period ended June 30, 2024 we had a negative Catch-up Amortization Adjustment of $(0.6) million which decreased our interest income. Excluding the Catch-up Amortization Adjustment, the weighted average yield of our Agency portfolio and our total portfolio was 4.20% and 7.26%, respectively, for the six-month period ended June 30, 2025. Excluding the Catch-up Amortization Adjustment, the weighted average yield of our Agency portfolio and our total portfolio was 4.21% and 7.04%, respectively, for the six-month period ended June 30, 2024.
Current report — wording carried from elsewhere
In addition, we had $4.0 million and $5.6 million of interest income related to long U.S. Treasury securities and reverse repo on short U.S. Treasury securities for the six-month periods ended June 30, 2025 and 2024, respectively, which we generally use to hedge our exposure to changes in interest rates.
Current report — wording carried from elsewhere
For the six-month periods ended June 30, 2025 and 2024, interest income from the Longbridge segment was $45.0 million and $18.0 million, respectively. The increase was primarily related to a larger portfolio of proprietary reverse mortgage loans period over period, as well as an increase in interest income related to reverse repo on short positions in U.S. Treasury securities for the six-month period ended June 30, 2025.
Current report — wording carried from elsewhere
For the six-month periods ended June 30, 2025 and 2024, interest income not allocable to either the investment portfolio segment or the Longbridge segment was $3.4 million and $3.8 million, respectively, primarily related to interest income earned on cash balances and cash collateral held by counterparties.
Current report — wording carried from elsewhere
Interest expense primarily includes interest on funds borrowed under repos and Total other secured borrowings, interest on our unsecured borrowings, coupon interest on securities sold short, the related net accretion and amortization of purchase discounts and premiums on those short holdings, and interest on our counterparties' cash collateral held by us. For the six-month periods ended June 30, 2025 and 2024, we had total interest expense of $144.8 million and $137.3 million, respectively.
Current report — wording carried from elsewhere
Total interest expense in our investment portfolio segment decreased to $100.4 million for the six-month period ended June 30, 2025, as compared to $110.9 million for the six-month period ended June 30, 2024. The decline in interest expense was primarily the result of a decline in financing rates and a decline in average borrowings on our smaller Agency RMBS portfolio. These declines were partially offset by an increase in borrowings on our larger credit portfolio.
Current report — wording carried from elsewhere
The table below summarizes the components of interest expense in our Investment Portfolio for the six-month periods ended June 30, 2025 and 2024.
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The following table summarizes our aggregate secured borrowings, including repos and Total other secured borrowings, for the six-month periods ended June 30, 2025 and 2024.
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(1)Excludes U.S. Treasury securities.
Current report — wording carried from elsewhere
Among other instruments, we use interest rate swaps to hedge against the risk of rising interest rates. If we were to include as a component of our cost of funds the actual and accrued periodic payments on our interest rate swaps used to hedge our assets, our total average cost of funds would decrease to 4.30% and 4.35% for the six-month periods ended June 30, 2025 and 2024, respectively. Excluding the Catch-up Amortization Adjustment, our net interest margin, defined as the average yield on our portfolio of yield-bearing targeted assets less the average cost of funds on our secured borrowings (including actual and accrued periodic payments on interest rate swaps as described above), was 2.96% and 2.68% for the six-month periods ended June 30, 2025 and 2024, respectively. These metrics do not include costs associated with any unsecured debt or costs associated with other instruments that we use to hedge interest rate risk, such as TBAs and futures.
Current report — wording carried from elsewhere
Interest expense in the Longbridge segment primarily relates to Other secured borrowings and repurchase agreements. For the six-month periods ended June 30, 2025 and 2024, interest expense in the Longbridge segment was $36.0 million and $17.2 million, respectively. The increase in interest expense in the current period was primarily due to a significant increase in our average borrowings as well as an increase in interest expense on securities sold short, partially offset by a decrease in financing costs for the six-month period ended June 30, 2025.
Current report — wording carried from elsewhere
For the six-month period ended June 30, 2025, our average borrowings in the Longbridge segment were $1.1 billion and our average cost of funds was 5.68%. This compares to average borrowings of $421.5 million and an average cost of funds of 8.17% for the six-month period ended June 30, 2024.
Current report — wording carried from elsewhere
Certain items of interest expense are not allocable to either the investment portfolio segment or the Longbridge segment, such as interest expense on our Unsecured borrowings and certain cash collateral held by us. Total interest expense not allocable to either the investment portfolio segment or the Longbridge segment was $8.5 million and $9.2 million for the six-month periods ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
The table below summarizes the components of interest expense not included in either segment for the six-month periods ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
For the six-month period ended June 30, 2025, the net base management fee, which is based on total equity at the end of each quarter less any applicable rebates our Manager credited us, was $12.4 million as compared to $11.5 million for the six-month period ended June 30, 2024. The increase in the net base management fee period over period was due to a larger capital base at the end of each of the first two fiscal quarters of 2025, as compared to 2024. See Note 16 of the notes to our condensed consolidated financial statements for further detail on management fee rebates.
Current report — wording carried from elsewhere
Other investment related expenses consist of servicing fees on our mortgage and consumer loans, as well as various other expenses and fees directly related to our financial assets and certain financial liabilities carried at fair value. For the six-month periods ended June 30, 2025 and 2024, other investment related expenses were $32.3 million and $24.3 million, respectively.
Current report — wording carried from elsewhere
Other operating expenses consist of professional fees, compensation and benefit expenses related to our dedicated or partially dedicated personnel, and various other operating expenses necessary to run our business. Other operating expenses exclude management and incentive fees, interest expense, and other investment related expenses. Other operating expenses were $59.9 million for the six-month period ended June 30, 2025 as compared to $50.8 million for the six-month period ended June 30, 2024.
Current report — wording carried from elsewhere
For the six-month periods ended June 30, 2025 and 2024, other operating expenses in the Longbridge segment were $45.7 million and $37.9 million, respectively. These expenses primarily consist of compensation and benefits expense, and consist to a lesser extent of various overhead costs including rent expense, licensing fees, expenses related to office equipment, and amortization of intangible assets. The period-over-period increase was primarily due to an increase in compensation and benefits expenses and professional fees.
Current report — wording carried from elsewhere
Other income (loss) consists of net realized and unrealized gains (losses) on securities and residential mortgage, commercial mortgage, consumer, and corporate loans, financial derivatives, and real estate owned, unrealized gains (losses) on other secured borrowings, at fair value and Unsecured borrowings, at fair value, net change from HECM reverse mortgage loans, at fair value, and net change related to HMBS obligations, at fair value. Other, net, another component of Other income (loss), includes rental income and income related to loan originations, as well as income on MSRs and Forward MSR-related investments, unrealized gains (losses) on loan commitments, realized gains (losses) on foreign currency transactions, and unrealized gains (losses) on foreign currency remeasurement.
Current report — wording carried from elsewhere
Earnings (Losses) from Investments in Unconsolidated Entities
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(6)For the three-month period ended June 30, 2025, includes $1.6 million of non-capitalized transaction costs, $1.3 million of non-cash equity compensation and depreciation expense, and $0.2 million of various other expenses. For the three-month period ended June 30, 2024, includes $1.1 million of non-capitalized transaction costs, $0.3 million of non-cash equity compensation expense, and $0.2 million of various other expenses.
Current report — wording carried from elsewhere
(1)Conformed to current period methodology.
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(2)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.
Current report — wording carried from elsewhere
(3)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.
Current report — wording carried from elsewhere
(4)Represents net change in fair value of HMBS MSR Equivalent and mortgage servicing rights related to proprietary mortgage loans attributable to changes in market conditions and model assumptions. This adjustment also includes net (gains) losses on certain hedging instruments (including interest rate swaps, futures, and short U.S. Treasury securities), which are components of realized and/or unrealized gains (losses) on financial derivatives, net, realized and/or unrealized gains (losses) on securities and loans, net, interest income, and interest expense on the Condensed Consolidated Statement of Operations.
Current report — wording carried from elsewhere
(5)Represents the effect of replacing mortgage loan interest income (net of securitization debt expense) with interest income of the retained tranches.
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(3)Also includes equity investments in unconsolidated entities holding commercial mortgage loans and REO.
Previous report — wording carried elsewhere
distributions to us. The additional adjusted distributable earnings related to our equity investments in certain loan originators was $1.9 million for the three-month period ended March 31, 2024.