Ellington Financial Inc.
For the period ended Mar 31, 2026. Filed May 11, 2026.
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.
Mar 31, 2026 · Filed May 11, 2026
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 2025-09-30; filed 2025-11-10.
0001628280-25-051038
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001628280-26-033463
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 394 previous paragraphs and 341 current paragraphs.
177 unchanged; 131 reworded; 30 added; 58 removed; 28 previous and 3 current paragraphs rearranged.
Tables are not compared: 42 previous and 34 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
Strategic Investments
Current report
•After lowering its target range for the federal funds rate by 75 basis points to 3.50%–3.75% in the second half of 2025, the U.S. Federal Reserve (the "Federal Reserve") maintained that range at its January and March 2026 meetings. Across both meetings, the Federal Reserve noted that job gains had remained low, the unemployment rate had been little changed in recent months, and inflation remained somewhat elevated. In its March announcement, the Federal Reserve also noted that the implications for the U.S. economy of developments in the Middle East are uncertain.
Current report
•The first quarter began with the U.S. administration continuing trade negotiations with key partners. In February, the Supreme Court ruled that sweeping global tariffs could not be imposed under the International Emergency Economic Powers Act. The administration subsequently announced a temporary 10% global tariff under the Trade Act of 1974, sustaining uncertainty around U.S. trade policy.
Current report
•Interest rates were generally stable to slightly lower during the first two months of the year. However, interest rates increased significantly in March as escalating geopolitical tensions, particularly in the Middle East, contributed to a spike in oil prices, higher inflation expectations, and renewed uncertainty around the path of Federal Reserve monetary policy. Overall, the yield on the 2-year U.S. Treasury rose by 32 basis points to 3.79% in the first quarter, while the yield on the 10-year U.S. Treasury rose by 15 basis points to 4.32%.
Current report
•After declining significantly in 2025, interest rate volatility remained relatively low throughout January and February, before rising considerably in March. Overall, the MOVE Index increased more than 50% quarter over quarter.
Current report
•With mortgage rates declining to start the first quarter, the Mortgage Bankers Association’s Refinance Index increased to its highest level in four years in early March. However, refinance activity reversed course and declined commensurately as mortgage rates moved higher. Overall, the Mortgage Bankers Association’s Refinance Index increased by 8.5% quarter over quarter.
Current report
•U.S. real GDP expanded at an estimated annualized rate of 2.0% in the first quarter of 2026, after expanding at an annualized rate of 0.5% in the prior quarter. Meanwhile, the unemployment rate edged down from 4.4% at the start of the quarter to 4.3% by quarter end.
Current report
•After strong gains in 2025, U.S. equity markets declined in the first quarter, particularly in March amid heightened geopolitical uncertainty and rising energy prices. Overall for the quarter, the NASDAQ fell by 7.1%, the S&P 500 fell by 4.6%, and the Dow Jones Industrial Average fell by 3.6%. Meanwhile, London's FTSE 100 index rose by 2.5%, while the MSCI World global equity index fell by 3.9%. Energy-related sectors outperformed amid rising oil prices.
Current report
(4)Other residential mortgage loans include secondary market purchases of non-performing and re-performing mortgage loans.
Current report
(3)Includes our allocable portion of commercial mortgage loans, based on our ownership percentage, held in variable interest entities. Our equity investments in such variable interest entities are included in Investments in unconsolidated entities, at fair value on the Consolidated Balance Sheet.
Current report
(1)Includes our allocable portion of commercial mortgage loans, based on our ownership percentage, held in variable interest entities. Our equity investments in such variable interest entities are included in Investments in unconsolidated entities, at fair value on the Consolidated Balance Sheet.
Current report
(1)Includes our allocable portion of commercial mortgage loans, based on our ownership percentage, held in variable interest entities. Our equity investments in such variable interest entities are included in Investments in unconsolidated entities, at fair value on the Consolidated Balance Sheet.
Current report
(1)Includes our allocable portion of commercial mortgage loans, based on our ownership percentage, held in variable interest entities. Our equity investments in such variable interest entities are included in Investments in unconsolidated entities, at fair value on the Consolidated Balance Sheet.
Current report
(1)Other residential mortgage loans include secondary market purchases of non-performing and re-performing mortgage loans.
Current report
Positive results in our Agency strategy were driven by net interest income and net gains on interest rate hedges, due to the increase in interest rates quarter over quarter. These gains were partially offset by net losses on our Agency RMBS, with yield spreads on many Agency RMBS wider during the quarter.
Current report
Results for the quarter also reflect a significant unrealized gain on our unsecured debt, driven by credit spread widening during the quarter, partially offset by an incentive fee accrued during the first quarter.
Current report
(4)Other residential mortgage loans include secondary market purchases of non-performing and re-performing mortgage loans.
Current report
(1)See Note 16 of the notes to the consolidated financial statements for further details on management fee rebates.
Current report
(1)See Note 16 of the notes to the consolidated financial statements for further details on management fee rebates.
Current report
(2)Effective January 1, 2026, Agency IOs are included with credit assets.
Current report
(1)Amount includes the related net accretion and amortization of purchase discounts and premiums.
Current report
(1)Amount includes the related net accretion and amortization of purchase discounts and premiums.
Current report
Base Management Fees
Current report
Incentive Fees
Current report
Investment and Transaction Related Expenses
Current report
For the three-month period ended March 31, 2026, other income (loss) was $7.5 million, consisting primarily of net realized and unrealized gains of $26.6 million on our financial derivatives and net unrealized gains of $4.7 million on our Other secured borrowings, at fair value. These gains were partially offset by net realized and unrealized losses of $(17.0) million on our securities and loans, $(2.0) million on real estate owned, and $(4.8) million of Other, net. Net realized and unrealized gains of $26.6 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. Net realized and unrealized losses of $(17.0) million on our securities and loans were primarily on CLOs, non-QM loans, Agency-eligible loans, and closed-end second lien loans. These losses were partially offset by net realized and unrealized gains on non-QM and closed-end second lien retained tranches. Other, net of $(4.8) million consists primarily of net unrealized losses on loan purchase commitments and forward MSR-related investments, realized losses on foreign currency transactions, unrealized losses on foreign currency remeasurement, various origination and loan income, and rental income. We also recognized net unrealized gains of $4.7 million on our Other secured borrowings, at fair value for the three-month period ended March 31, 2026, related to debt tranches of our consolidated mortgage loan securitizations. Change in net unrealized gain (loss) on the loans underlying these consolidated mortgage loan securitizations for the three-month period ended March 31, 2026, was $(5.9) million, which is included in Unrealized gains (losses) on securities and loans, net.
Current report
Income tax expense (benefit) was $1.0 million for the three-month period ended March 31, 2026, as compared to $(0.1) million for the three-month period ended March 31, 2025.
Current report
Subsequent to March 31, 2026, we issued 744,601 shares of common stock under the Common ATM Program which provided $9.9 million of net proceeds after $65 thousand of agent commissions and $11 thousand of offering costs.
Current report
On January 28, 2026, we completed a follow-on offering of 8,775,000 shares of our common stock. The issuance and sale of such shares of common stock generated net proceeds of $117.2 million, after $0.9 million of underwriters' discounts and commissions and $0.3 million of offering costs.
Current report
On February 27, 2026, we redeemed all 4,600,000 outstanding shares of Series A Preferred Stock for $115.8 million, based on the liquidation preference of $25.00 per share, plus accrued and unpaid dividends.
Removed paragraphs (58)
Previous report
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 report
Strategic Equity Investments in Loan Originators
Previous report
•The U.S. Federal Reserve (the "Federal Reserve") maintained the target range for the federal funds rate at 4.25%–4.50% at its July meeting. However, at its September meeting, the Federal Reserve cut rates for the first time in 2025, reducing the target range by 25 basis points to 4.00%–4.25%, with one member preferring a larger 50 basis point rate cut. In its September announcement, the Federal Reserve noted: “In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
Previous report
•In the third quarter, the Federal Reserve continued to reinvest only principal payments that exceeded $35 billion on Agency RMBS and $5 billion on U.S. Treasury securities.
Previous report
Government Shutdown
Previous report
•A partial U.S. government shutdown began on October 1, 2025, following a lapse in federal appropriations due to disagreements over spending levels. Essential government functions continued to operate, but many agencies temporarily furloughed employees. The shutdown contributed to short-term uncertainty in financial markets and weighed modestly on near-term economic sentiment.
Previous report
•In the third quarter, the U.S. administration continued to amend the broad-based tariffs announced in early April and introduced additional tariffs affecting various countries and industries. Several trading partners, including the United Kingdom, the European Union, Japan, South Korea, and others, reportedly reached agreements with the U.S. to reduce tariff levels, although many details of these trade agreements have not yet been implemented. The administration also extended the pause on higher tariffs for Chinese imports, leaving the reduced minimum tariff rate in place.
Previous report
•Interest rates trended lower in the third quarter as expectations for potential additional Federal Reserve rate cuts, a weakening labor market, and the looming threat of a government shutdown put downward pressure on yields despite a modest rise in inflation. The yield on the 2-year U.S. Treasury security traded within a 47-basis point range before ending the quarter down 11 basis points at 3.61%. The yield on the 10-year U.S. Treasury traded within a similar range before ending the quarter down 8 basis points at 4.15%.
Previous report
•Interest rate volatility, as measured by the MOVE Index, declined quarter over quarter and reached its lowest level since December 2021 in mid-September.
Previous report
•Mortgage rates also declined, with the Freddie Mac survey 30-year mortgage rate falling from 6.77% on June 26th to 6.30% on September 25th.
Previous report
•The Mortgage Bankers Association’s Refinance Index remained relatively low for most of the third quarter before spiking near quarter end and reaching its highest level since March 2022, ending up 68% quarter over quarter.
Previous report
•The U.S. government shutdown delayed key data releases, including the third-quarter U.S. real GDP estimate and September unemployment. U.S. real GDP contracted by an estimated annualized rate of 0.6% in the first quarter before expanding by an estimated annualized rate of 3.8% in the second quarter. Meanwhile, the unemployment rate increased moderately during the first two months of the third quarter registering 4.2% in July and 4.3% in August.
Previous report
•U.S. equity markets rose steadily during the third quarter, with several major indices hitting record highs. Overall, the NASDAQ rose by 11.2%, the S&P 500 rose by 7.8%, and the Dow Jones Industrial Average rose by 5.2%. Meanwhile, London's FTSE 100 index rose by 6.7%, while the MSCI World global equity index increased by 7.0%.
Previous report
(4)Other residential mortgage loans include Agency-eligible mortgage loans and secondary market purchases of non-performing and re-performing mortgage loans.
Previous report
(3)Includes our allocable portion of commercial mortgage loans, based on our ownership percentage, held in variable interest entities. Our equity investments in such variable interest entities are included in Investments in unconsolidated entities, at fair value on the Condensed Consolidated Balance Sheet.
Previous report
(1)Includes our allocable portion of commercial mortgage loans, based on our ownership percentage, held in variable interest entities. Our equity investments in such variable interest entities are included in Investments in unconsolidated entities, at fair value on the Condensed Consolidated Balance Sheet.
Previous report
(1)Includes our allocable portion of commercial mortgage loans, based on our ownership percentage, held in variable interest entities. Our equity investments in such variable interest entities are included in Investments in unconsolidated entities, at fair value on the Condensed Consolidated Balance Sheet.
Previous report
(1)Includes our allocable portion of commercial mortgage loans, based on our ownership percentage, held in variable interest entities. Our equity investments in such variable interest entities are included in Investments in unconsolidated entities, at fair value on the Condensed Consolidated Balance Sheet.
Previous report
(1)Other residential mortgage loans include Agency-eligible mortgage loans and secondary market purchases of non-performing and re-performing mortgage loans.
Previous report
Net gains on our Agency RMBS and interest rate hedges drove the strong results in our Agency strategy. Interest rates and interest rate volatility declined in the quarter, while Agency yield spreads tightened, all of which were supportive of our portfolio.
Previous report
Results for the quarter also reflect an increase in the net unrealized loss on our unsecured borrowings partially offset by a decrease in income tax expense.
Previous report
(3)Other residential mortgage loans include Agency-eligible and secondary market purchases of non-performing and re-performing mortgage loans.
Previous report
Results of Operations for the Three-Month Periods Ended September 30, 2025 and 2024
Previous report
Other Investment Related Expenses
Previous report
Other operating expenses in our investment portfolio segment were $1.8 million and $1.4 million for the three-month periods ended September 30, 2025 and 2024, respectively.
Previous report
For the three-month period ended September 30, 2025, other income (loss) was $(2.1) million, consisting primarily of net unrealized losses of $(8.6) million on our Other secured borrowings, at fair value, net realized and unrealized losses of $(7.2) million on our financial derivatives, $(2.6) million on real estate owned, net, and $(5.2) million on Other, net. These losses were partially offset by net realized and unrealized gains of $21.6 million on our securities and loans. Net realized and unrealized gains of $21.6 million on our securities and loans were primarily on non-QM loans, Agency RMBS, residential transition loans, and other ABS. Net realized and unrealized losses of $(7.2) million on our financial derivatives were primarily related to net realized and unrealized losses, driven by lower interest rates, on our interest rate swaps, and to a lesser extent, our TBAs. Other, net of $(5.2) million consists primarily of net realized and unrealized losses on our Forward MSR-related investments, various origination and loan income, rental income, realized gains on foreign currency transactions, and unrealized losses on foreign currency remeasurement. We recognized net unrealized losses of $(8.6) million on our Other secured borrowings, at fair value for the quarter ended September 30, 2025, related to borrowings on our securitized non-QM loans. These securitized non-QM loans had net unrealized gains of $5.6 million, which are included in Unrealized gains (losses) on securities and loans, net.
Previous report
For the three-month period ended September 30, 2024, other income (loss) was $6.5 million, consisting primarily of net realized and unrealized gains of $98.5 million on our securities and loans, partially offset by net realized and unrealized losses of $(58.0) million on our Other secured borrowings, at fair value, $(31.0) million on our financial derivatives, $(1.8) million of Other, net, and $(1.2) million on real estate owned, net. Net realized and unrealized gains of $98.5 million on our securities and loans were primarily on non-QM loans, non-Agency RMBS, closed-end second lien loans, and non-Agency CMBS, all primarily driven by lower interest rates. These gains were partially offset by net realized and unrealized losses on commercial mortgage bridge loans and consumer loans. We recognized net unrealized losses of $(58.0) million on our Other secured borrowings, at fair value for the three-month period ended September 30, 2024, related to borrowings on our securitized non-QM loans. These securitized non-QM loans had net unrealized gains of $62.5 million, which are included in Unrealized gains (losses) on securities and loans, net. Net realized and unrealized losses of $(31.0) million on our financial derivatives were primarily related to net realized and unrealized losses, driven by lower interest rates, on our interest rate swaps, and to a lesser extent, on our TBAs and on our short positions in U.S. Treasury futures. Other, net of $(1.8) million consisted primarily of net realized and unrealized losses on our Forward MSR-related investments, partially offset by various origination and loan income, and rental income.
Previous report
For the three-month period ended September 30, 2024, other income (loss) from the Longbridge segment was $30.6 million, consisting primarily of gains from Net change from HECM reverse mortgage loans, at fair value of $158.6 million, net realized and unrealized gains of $16.1 million on securities and loans, other income of $3.4 million, and net unrealized gains of $1.9 million on Other Secured borrowings, at fair value. These gains were partially offset by Net change related to HMBS obligations, at fair value of $(133.8) million and net realized and unrealized losses of $(15.5) million on financial derivatives. Gains from Net change from HECM reverse mortgage loans at fair value of $158.6 million primarily consisted of $149.2 million of coupon income on HECM loans and net realized and unrealized gains of $10.3 million on HECM loans. The net realized and unrealized gains on HECM loans were primarily driven by a decline in interest rate quarter over quarter. Losses from Net change related to HMBS obligations, at fair value of $(133.8) million primarily consisted of $(140.4) million of interest expense on the HMBS obligations and net unrealized gains of $6.5 million on the HMBS obligations, which partially offset the interest income on HECM loans and net realized and unrealized gains on HECM loans. Net gains of $16.1 million on securities and loans were primarily driven by tighter yield spreads on proprietary reverse mortgage loans. Other income, included in Other, net of $3.4 million, is primarily related to $2.1 million of servicing fees and $2.5 million of origination fees, partially offset by net realized and unrealized losses of $(0.7) million on MSRs.
Previous report
For the three-month period ended September 30, 2025, other income (loss) was $(3.3) million, consisting primarily of net losses on our Unsecured borrowings, at fair value, and related hedges. For the three-month period ended September 30, 2024, other income (loss) was $(3.8) million, consisting primarily of a net realized and unrealized losses on our Unsecured borrowings, at fair value.
Previous report
Income tax expense (benefit) was $1.1 million for the three-month period ended September 30, 2025, as compared to $12 thousand for the three-month period ended September 30, 2024.
Previous report
For the three-month period ended September 30, 2024, Earnings (losses) from investments in unconsolidated entities of $7.3 million primarily consisted of net realized and unrealized gains on investments in loan originators, investments in entities holding commercial mortgage loans and REO, in which we co-invest with other Ellington affiliates, and investments in risk retention vehicles related to non-QM securitizations
Previous report
Results of Operations for the Nine-Month Periods Ended September 30, 2025 and 2024
Previous report
For the nine-month period ended September 30, 2025 we had net income (loss) attributable to common stockholders of $104.1 million, compared to $95.4 million for the nine-month period ended September 30, 2024. The increase in our results of operations was primarily due to increases in net interest income and earnings from investments in unconsolidated entities partially offset by increases in total expenses and a decline in total other income.
Previous report
Interest Income
Previous report
Interest income from our investment portfolio segment for the nine-month-period ended September 30, 2025 increased to $273.8 million, as compared to $271.4 million for the nine-month period ended September 30, 2024.
Previous report
For the nine-month period ended September 30, 2025, interest income from our credit portfolio was $255.2 million, as compared to $239.5 million for the nine-month period ended September 30, 2024. This period-over-period increase was primarily driven by a larger average credit portfolio and by slightly higher average asset yields for the nine-month period ended September 30, 2025.
Previous report
For the nine-month period ended September 30, 2025 and 2024, interest income from our Agency RMBS was $9.9 million and $19.4 million, respectively. This period-over-period decrease was due to a significantly smaller Agency portfolio in the current period, partially offset by higher average asset yields for the nine-month period ended September 30, 2025.
Previous report
For the nine-month periods ended September 30, 2025 and 2024, interest income from the Longbridge segment was $75.5 million and $32.6 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 nine-month period ended September 30, 2025.
Previous report
Interest Expense
Previous report
The table below summarizes the components of interest expense in the Longbridge segment for the nine-month periods ended September 30, 2025 and 2024.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Reworded paragraphs (131)
Previous wording
Forward-looking statements are based on our beliefs, assumptions, and expectations of our future operations, business strategies, performance, financial condition, liquidity and prospects, taking into account information currently available to us. These beliefs, assumptions, and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations and strategies may vary materially from those expressed or implied in our forward-looking statements. The following factors are examples of those that could cause actual results to vary from our forward-looking statements: changes in interest rates and the market value of our securities or our investments; market volatility; changes in the prepayment rates on the mortgage loans owned by us, or underlying the securities owned by us; increased rates of default and/or decreased recovery rates on our assets; our ability to borrow to finance our assets and the available terms for such borrowings; changes in government regulations affecting our business; our ability to maintain our exclusion from registration under the Investment Company Act of 1940, as amended (the "Investment Company Act"); our ability to maintain our qualification as a real estate investment trust ("REIT"); and risks associated with investing in real estate assets, including changes in business conditions and the general economy such as changes to fiscal or monetary policy, heightened inflation, slower growth or recession, and currency fluctuations. These and other risks, uncertainties and factors, including the risk factors described under Item 1A of this Annual Report on Form 10-K, could cause our actual results to differ materially from those projected or implied in any forward-looking statements we make. All forward-looking statements 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 us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Current wording
Forward-looking statements are based on our beliefs, assumptions, and expectations of our future operations, business strategies, performance, financial condition, liquidity and prospects, taking into account information currently available to us. These beliefs, assumptions, and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations and strategies may vary materially from those expressed or implied in our forward-looking statements. The following factors are examples of those that could cause actual results to vary from our forward-looking statements: changes in interest rates and the market value of our securities or our investments; market volatility; changes in the prepayment rates on the mortgage loans owned by us, or underlying the securities owned by us; increased rates of default and/or decreased recovery rates on our assets; our ability to borrow to finance our assets and the available terms for such borrowings; changes in government regulations affecting our business; our ability to maintain our exclusion from registration under the Investment Company Act of 1940, as amended (the "Investment Company Act"); our ability to maintain our qualification as a real estate investment trust ("REIT"); and risks associated with investing in real estate assets, including changes in business conditions and the general economy such as changes to fiscal or monetary policy, heightened inflation, slower growth or recession, and currency fluctuations. These and other risks, uncertainties and factors, including the risk factors described under Item 1A of our Annual Report on Form 10-K, could cause our actual results to differ materially from those projected or implied in any forward-looking statements we make. All forward-looking statements 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 us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Previous wording
We conduct all of our operations and business activities through the Operating Partnership. As of September 30, 2025, we had an ownership interest of approximately 99.1% in the Operating Partnership. The remaining ownership interest of approximately 0.9% in the Operating Partnership represents the interests in the Operating Partnership that are owned by an affiliate of our Manager, our current and certain former directors, and certain current and former Ellington employees and their related parties, and is reflected in our financial statements as a non-controlling interest. We are externally managed and advised by our Manager, an affiliate of Ellington. Ellington is a registered investment adviser with a 30-year history of investing in the Agency and credit markets.
Current wording
We conduct all of our operations and business activities through the Operating Partnership. As of March 31, 2026, we had an ownership interest of approximately 98.9% in the Operating Partnership. The remaining ownership interest of approximately 1.1% in the Operating Partnership represents the interests in the Operating Partnership that are owned by an affiliate of our Manager, our current and certain former directors, and certain current and former Ellington employees and their related parties, and is reflected in our financial statements as a non-controlling interest. We are externally managed and advised by our Manager, an affiliate of Ellington. Ellington is a registered investment adviser with a 31-year history of investing in the Agency and credit markets.
Previous wording
Our Agency RMBS assets are typically concentrated in specified pools. Specified pools are fixed-rate Agency pools consisting of mortgages with special characteristics, such as mortgages with low loan balances, mortgages backed by investor properties, mortgages originated through the government-sponsored "Making Homes Affordable" refinancing programs, and mortgages with various other characteristics. Our Agency strategy also includes RMBS that are backed by ARMs or Hybrid ARMs and reverse mortgages, and CMOs, including IOs, POs, and IIOs.
Current wording
Our Agency RMBS assets are typically concentrated in specified pools. Specified pools are fixed-rate Agency pools consisting of mortgages with special characteristics, such as mortgages with low loan balances, mortgages backed by investor properties, mortgages originated through the government-sponsored "Making Homes Affordable" refinancing programs, and mortgages with various other characteristics. We maintain our portfolio of Agency RMBS in part to help maintain our qualification as a REIT and to help maintain our exclusion from registration as an investment company under the Investment Company Act.
Previous wording
We are also active in the market for residential NPLs and RPLs. The market for large residential NPL and RPL pools has remained highly concentrated, with the great majority having traded to only a handful of large players who typically securitize the residential NPLs and RPLs that they purchase. As a result, we have continued to focus our acquisitions on less-competitively-bid, and more attractively-priced mixed legacy pools sourced from motivated sellers.
Current wording
We are active in the market for residential NPLs and RPLs. The market for large residential NPL and RPL pools has remained highly concentrated, with the great majority having traded to only a handful of large players who typically securitize the residential NPLs and RPLs that they purchase. As a result, we have continued to focus our acquisitions on less-competitively-bid, and more attractively-priced mixed legacy pools sourced from motivated sellers.
Previous wording
We also acquire HELOCs and closed-end second lien loans, which are loans made to homeowners collateralized by the existing equity in their homes. Closed-end second lien loans allow the borrower to take a one-time lump sum and are subordinate to the rights of the first lien mortgage holder as well as other potential senior liens. A HELOC is a line of credit that allows the borrower to draw down on their available line of credit as needed, and is subordinate to the rights of the first lien mortgage holder and to the rights of any other lien-holder on the home.
Current wording
We acquire HELOCs and closed-end second lien loans, which are loans made to homeowners collateralized by the existing equity in their homes. Closed-end second lien loans allow the borrower to take a one-time lump sum and are subordinate to the rights of the first lien mortgage holder as well as other potential senior liens. A HELOC is a line of credit that allows the borrower to draw down on their available line of credit as needed, and is subordinate to the rights of the first lien mortgage holder and to the rights of any other lien-holder on the home.
Previous wording
Longbridge also originates HELOCs designed for homeowners aged 62 or older. These loans are typically interest only, first or second lien loans that do not require principal payments as long as the borrower remains in compliance with specific terms of the loan such as related to owner-occupancy, payment of property taxes, and keeping insurance coverage and interest payments current. They differ from traditional HELOCs in that the principal is deferred until the borrower dies, sells the home, or becomes delinquent on property taxes or homeowners insurance.
Current wording
In addition to originating reverse mortgage loans, Longbridge also originates HELOCs designed for homeowners aged 62 or older. These loans are typically interest only, first or second lien loans that do not require principal payments as long as the borrower remains in compliance with specific terms of the loan such as related to owner-occupancy, payment of property taxes, and keeping insurance coverage and interest payments current. They differ from traditional HELOCs in that the principal is deferred until the borrower dies, sells the home, or becomes delinquent on property taxes or homeowners insurance.
Previous wording
We have made, and in the future may make additional, equity investments in loan originators and other related entities; historically, our investments have generally represented non-controlling interests, although we are not restricted from holding controlling interests in such entities. We have also acquired debt investments and/or warrants in certain of these loan originators. We have also entered into various other arrangements, such as entering into flow agreements or providing guarantees or financing lines, with certain of the loan originators in which we have invested.
Current wording
We have made, and in the future may make additional, equity and/or debt investments in loan originators, loan servicers, and other mortgage-related operating companies. Our investments may either be controlling interests (as is the case with Longbridge), or non-controlling interests (as is the case with our other investments in these types of operating companies). We have also acquired debt investments and/or warrants in certain of these loan originators. `We have also entered into various other arrangements, such as entering into flow agreements or providing guarantees or financing lines, with certain of the loan originators in which we have invested.
Previous wording
Our other investment assets include real estate, including residential and commercial real property, strategic equity and/or debt investments in entities related to our business, corporate debt and equity securities, corporate loans, which can include litigation finance loans, and other non-mortgage-related derivatives. We do not typically purchase real property directly; rather, our real estate ownership usually results from foreclosure activity with respect to our acquired residential and commercial loans.
Current wording
Our other investment assets include real estate, including residential and commercial real property, corporate debt and equity securities, corporate loans, loans collateralized by accounts receivable, litigation finance assets, and non-mortgage-related derivatives. We do not typically purchase real property directly; rather, our real estate ownership usually results from foreclosure activity with respect to our residential and commercial mortgage loans.
Previous wording
•Secured Overnight Financing Rates (“SOFR”) declined quarter over quarter. The one-month SOFR rate fell 19 basis points to 4.13%, while the three-month SOFR rate decreased 32 basis points to 3.98%. SOFR rates drive many of our financing costs.
Current wording
•Secured Overnight Financing Rates (“SOFR”) were largely unchanged in the first quarter. The one-month SOFR rate fell by 2 basis points to 3.66%, while the three-month SOFR rate increased by 3 basis points to 3.68%. SOFR rates drive many of our financing costs.
Previous wording
•The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index rose by 2.1% year to date through August. Meanwhile, the National Association of Realtors Housing Affordability Index increased by 3.5% year to date through September.
Current wording
•After falling during the second half of 2025, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index rose by 0.1% during the first two month of 2026. Meanwhile, the National Association of Realtors Housing Affordability Index rose by 1.9% through the end of March, reflecting slightly improved housing affordability.
Previous wording
•Mortgage prepayment speeds remained low with the Fannie Mae 30-year MBS registering CPRs of 7.4, 7.3, and 7.9, in July, August, and September, respectively.
Current wording
•Mortgage prepayment speeds remained low, with the Fannie Mae 30-year MBS registering CPRs of 7.6, 8.8, and 10.6, in January, February, and March, respectively.
Previous wording
•Inflation, as measured by the 12-month change in the Consumer Price Index for All Urban Consumers ("CPI-U"), not seasonally adjusted, increased during the quarter, registering 2.7% July, 2.9% August, and 3.0% in September. This compares to the 12-month changes of 2.3% in April, 2.4% in May, and 2.7% in June 2025.
Current wording
•Inflation, as measured by the 12-month change in the Consumer Price Index for All Urban Consumers ("CPI-U"), not seasonally adjusted, registered 2.4% in both January and February, before increasing to 3.3% in March, driven by rising fuel costs. This compares to the 12-month changes of 2.7% in both November and December 2025.
Previous wording
•For the third quarter, the Bloomberg U.S. MBS Index posted a return of 2.53% and an excess return (on a duration-adjusted basis) of 0.86% relative to the Bloomberg U.S. Treasury Index.
Current wording
•For the first quarter, the Bloomberg U.S. MBS Index posted a return of 0.40% and an excess return (on a duration-adjusted basis) of 0.16% relative to the Bloomberg U.S. Treasury Index.
Previous wording
•The Bloomberg U.S. Corporate Bond Index generated a return of 2.70% and an excess return of 1.02% for the quarter, while the Bloomberg U.S. Corporate High Yield Bond Index generated a return of 2.65% and an excess return of 1.36%. Corporate credit spreads were tighter quarter over quarter, with spreads on the Markit CDX North America Investment Grade and High Yield Indices falling by 3 and 17 basis points, respectively.
Current wording
•The Bloomberg U.S. Corporate Bond Index generated a negative return of (0.54%) and a negative excess return of (0.49%) for the quarter. The Bloomberg U.S. Corporate High Yield Bond Index generated a negative return of (0.50%) and a negative excess return of (0.73%). Corporate credit spreads were wider quarter over quarter, with spreads on the Markit CDX North America Investment Grade and High Yield Indices increasing by 13 and 69 basis points, respectively.
Previous wording
•Equity volatility was relatively low throughout the third quarter.
Current wording
•Equity volatility was relatively low throughout January and February before rising in March amid heightened investor concerns.
Previous wording
Our total adjusted long credit portfolio increased by 11% to $3.56 billion as of September 30, 2025, compared to $3.22 billion as of June 30, 2025. The increase was driven by net purchases of non-QM loans, commercial mortgage bridge loans, other residential mortgage loans, and CLOs; and a larger portfolio of retained non-QM RMBS. These increases were partially offset by the impact of loans sold into securitizations, net sales of non-Agency RMBS, and a smaller residential transition loan portfolio, with principal paydowns in that portfolio exceeding new purchases.
Current wording
Our total adjusted long credit portfolio increased by 4% sequentially to $4.27 billion as of March 31, 2026. The increase was driven by purchases of non-QM loans, Agency-eligible loans, and residential transition loans; and a larger portfolio of retained RMBS. These increases were partially offset by the impact of loans sold into securitizations.
Previous wording
Overall positive performance was driven by higher net interest income in the credit portfolio, and net realized and unrealized gains from residential transition loans and other loans and ABS. We also benefitted from strong credit performance across our loan businesses and positive results from our equity investments in loan originators. Partially offsetting higher net interest income were net realized and unrealized losses on non-QM retained tranches, CLOs, forward MSR-related investments, and residential REO.
Current wording
The overall positive performance was driven by higher net interest income in the credit portfolio and net realized and unrealized gains on non-QM loans and retained tranches, closed-end second lien loans and retained tranches, and Agency-eligible loans; along with unrealized gains on commercial REO, and certain other investments. We also benefitted from excellent overall results from our equity investments in loan originators and strong credit performance across our loan businesses. Partially offsetting higher net interest income were net realized and unrealized losses on CLOs, non-Agency RMBS, non-performing and re-performing residential mortgage loans, and residential REO.
Previous wording
The percentage of delinquent loans in our residential mortgage loan portfolio decreased quarter over quarter, while the percentage of delinquent loans in our commercial mortgage loan portfolio (including loans accounted for as equity method investments) increased during the quarter. Both of these portfolios continue to experience low levels of realized credit losses and strong overall credit performance, though we continue to work out several non-performing assets.
Current wording
The percentages of delinquent loans in our residential and commercial mortgage loan portfolios (including loans accounted for as equity method investments) declined quarter over quarter. Both of these portfolios continue to experience low levels of realized credit losses and strong overall credit performance, though we continue to work out several non-performing assets.
Previous wording
During the quarter, the net interest margin on our credit portfolio increased to 3.65% from 3.11%, driven by an increase in asset yields and 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.
Current wording
During the quarter, the net interest margin on our credit portfolio increased modestly to 3.46% from 3.38%, as slightly higher asset yields were partially offset by a slightly higher cost of funds (including actual and accrued periodic payments on interest rate swaps). 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
The following tables provide supplemental information to, and should be read in conjunction with, the notes to our financial statements. See Note 5—Investments in Loans, Note 7—Forward MSR-related Investments, and Note 8—Investments in Unconsolidated Entities, of the Notes to Condensed Consolidated Financial Statements included in Item 8 of this Quarterly Report on Form 10-Q.
Current wording
The following tables provide supplemental information to, and should be read in conjunction with, the notes to our financial statements. See Note 5—Investments in Loans, Note 7—Forward MSR-related Investments, and Note 8—Investments in Unconsolidated Entities, of the Notes to Consolidated Financial Statements.
Previous wording
(1)Excludes commercial mortgage loans in non-accrual status, with a fair value of $103.7 million.
Current wording
(1)Excludes commercial mortgage loans in non-accrual status, with a fair value of $69.8 million.
Previous wording
(2)As discussed in Note 2 and Note 5 of the Notes to Condensed Consolidated Financial Statements, commercial loans that are 90 days or more delinquent are considered non-performing.
Current wording
(2)As discussed in Note 2 and Note 5 of the Notes to Consolidated Financial Statements, commercial loans that are 90 days or more delinquent are considered non-performing.
Previous wording
As of September 30, 2025, we held two commercial REO properties with a fair value of $17.5 million. Additionally, as of September 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 $39.1 million.
Current wording
As of March 31, 2026, we held four commercial REO properties with a fair value of $36.7 million. Additionally, as of March 31, 2026, unconsolidated variable interest entities in which we co-invest with other Ellington affiliates held two commercial REO properties; the fair value of our allocable portion of such REOs was approximately $49.0 million.
Previous wording
(2)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 condensed consolidated financial statements.
Current wording
(2)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
(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 $20.7 million and $15.3 million, respectively. The net fair value of the interest held by us in this VIE was $64 thousand.
Current wording
(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 $20.5 million and $14.0 million, respectively. The net fair value of the interest held by us in this VIE was $63 thousand.
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 $53.6 million as of September 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 September 30, 2025:
Current wording
As discussed in Note 16 of the notes to our 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 Consolidated Balance Sheet, was $53.7 million as of March 31, 2026. 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, 2026:
Previous wording
(1)Excludes charged-off consumer loans with an aggregate unpaid principal balance and fair value of $93.6 million and $0.4 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.
Current wording
(1)Excludes consumer loans with an aggregate unpaid principal balance and fair value of $100.2 million and $0.4 million, respectively, for which we have determined that it is probable the servicer will not be able to collect any more principal or interest.
Previous wording
(1)Conformed to current period methodology.
Current wording
(1)Conformed to current period presentation.
Previous wording
Our total long Agency RMBS portfolio decreased by 18% quarter over quarter to $220.7 million as of September 30, 2025, compared to $268.5 million as of June 30, 2025, driven by net sales.
Current wording
Our total long Agency RMBS portfolio decreased by 3% sequentially to $197.3 million as of March 31, 2026.
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 long TBA position on a duration-weighted basis associated with the Agency strategy.
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.
Previous wording
The net interest margin on our Agency portfolio, excluding the Catch-up Amortization Adjustment, decreased slightly to 2.27% as of September 30, 2025, from 2.29% as of June 30, 2025. 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 1.47% as of March 31, 2026, from 1.90% as of December 31, 2025, driven by a higher cost of funds. We continued to benefit from positive carry on our interest rate swap hedges, where we overall receive a higher floating rate and pay a lower fixed rate, but that benefit declined during the quarter, contributing to the higher cost of funds.
Previous wording
As discussed in Note 13 of the Notes to the Condensed Consolidated Financial Statements, when Longbridge pools HECM loans into HMBS, such transfers do not qualify as sales under U.S. GAAP, and as a result, such transactions are treated as secured borrowings on our Condensed Consolidated Balance Sheet. The pooled HECM loans are included in Loans, at fair value, and the related liabilities are reflected as HMBS-related obligations, at fair value. After pooling the HECM loans into HMBS, Longbridge retains the mortgage servicing rights associated with such HMBS, which we refer to as the "HMBS MSR Equivalent."
Current wording
As discussed in Note 13 of the Notes to the Consolidated Financial Statements, when Longbridge pools HECM loans into HMBS, such transfers do not qualify as sales under U.S. GAAP, and as a result, such transactions are treated as secured borrowings on our Consolidated Balance Sheet. The pooled HECM loans are included in Loans, at fair value, and the related liabilities are reflected as HMBS-related obligations, at fair value. After pooling the HECM loans into HMBS, Longbridge retains the mortgage servicing rights associated with such HECM loans, which we refer to as the "HMBS MSR."
Previous wording
(3)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 condensed consolidated financial statements.
Current wording
(3)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)As of September 30, 2025, includes $19.6 million of active HECM Buyout Loans, $17.3 million of inactive HECM Buyout Loans, and $5.7 million of other inactive HECM loans. 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.
Current wording
(4)As of March 31, 2026, includes $21.7 million of active HECM Buyout Loans, $19.9 million of inactive HECM Buyout Loans, and $6.6 million of other inactive HECM loans. As of December 31, 2025, includes $28.5 million of active HECM Buyout Loans, $19.0 million of inactive HECM Buyout Loans, and $6.1 million of other inactive HECM loans.
Previous wording
(5)As of September 30, 2025, includes $953.2 million of securitized proprietary reverse mortgage loans, $19.2 million of cash held in a securitization reserve fund, and $6.6 million of investment related receivables. 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.
Current wording
(5)As of March 31, 2026, includes $1.6 billion of securitized proprietary reverse mortgage loans and related REO, $26.2 million of cash held in a securitization reserve fund, and $13.9 million of investment related receivables. As of December 31, 2025, includes $1.4 billion of securitized proprietary reverse mortgage loans and related REO, and $26.0 million of cash held in a securitization reserve fund, and $19.9 million of investment related receivables.
Previous wording
Our Longbridge segment reported a net gain for the third quarter, with positive contributions from both originations and servicing. The positive contribution from originations was driven by higher origination volumes of proprietary reverse mortgage loans, higher origination margins for HECM loans, and net gains related to a proprietary reverse mortgage loan securitization completed during the quarter. Strong positive contributions from servicing reflected base servicing net income, strong tail securitization executions, and a net gain on the HMBS MSR Equivalent, driven primarily by tighter HMBS yield spreads. These gains were partially offset by a net unrealized loss on the retained tranches of consolidated proprietary reverse mortgage loan securitization trusts, due to faster prepayment speed assumptions, lower HPA projections, and higher applied discount rates.
Current wording
Our Longbridge segment reported excellent results for the first quarter, with strong contributions from both originations and servicing. The strong contribution from originations was driven by continued robust origination volumes and margins, and net gains related to the proprietary reverse mortgage loan securitization completed during the quarter. The strong contribution from servicing reflected: (i) strong tail securitization executions; (ii) a net gain on the HMBS MSR, driven primarily by tighter HMBS yield spreads; and (iii) steady base servicing net income. Longbridge also had income related to the settlement of a lawsuit, pursuant to which Longbridge received a payment of $17.0 million, and net gains on interest rate hedges.
Previous wording
Our Longbridge portfolio, excluding non-retained tranches of consolidated securitization trusts, increased by 37% sequentially to $750.0 million as of September 30, 2025, driven by a record quarter of proprietary reverse mortgage loan originations at Longbridge, partially offset by the impact of a securitization of proprietary reverse mortgage loans completed during the quarter.
Current wording
Our Longbridge portfolio, excluding non-retained tranches of consolidated securitization trusts, increased by 13% sequentially to $695.1 million as of March 31, 2026, driven by continued strong proprietary reverse mortgage loan origination volumes, partially offset by the impact of a securitization of proprietary reverse mortgage loans completed during the quarter. Longbridge originated $515.4 million of new loans during the quarter, which was a 52% increase from the same period in 2025.
Previous wording
We have various financing arrangements in place as of September 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 HMBS, we account for HMBS-related obligations as secured borrowings. Finally, as of September 30, 2025, we had $262.8 million of outstanding Unsecured borrowings including: (i) senior notes of $210.0 million, maturing in April 2027 and bearing an interest rate of 5.875%, and (ii) senior notes of $37.8 million, maturing in August 2026 and bearing an interest rate of 6.00% (collectively, the "Senior Notes"); as well as $15.0 million of unregistered junior subordinated unsecured debt securities (the "Trust Preferred Debt"). The indentures governing the outstanding Senior Notes contain a number of covenants, including several financial covenants. See Note 14 of the Notes to the Condensed Consolidated Financial Statements for additional details on our Unsecured borrowings.
Current wording
We have various financing arrangements in place as of March 31, 2026, 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 residential mortgage loans, proprietary reverse mortgage loans, and consumer loans. Additionally, as an issuer of HMBS, we account for HMBS-related obligations as secured borrowings. Finally, as of March 31, 2026, we had $662.8 million of outstanding Unsecured borrowings including: (i) senior notes of $400.0 million, maturing in September 2030 and bearing an interest rate of 7.375%, (ii) senior notes of $210.0 million, maturing in April 2027 and bearing an interest rate of 5.875%, and (iii) senior notes of $37.8 million, maturing in August 2026 and bearing an interest rate of 6.00% (collectively, the "Senior Notes"); as well as $15.0 million of unregistered junior subordinated unsecured debt securities (the "Trust Preferred Debt"). The indentures governing the outstanding Senior Notes contain a number of covenants, including several financial covenants. See Note 14 of the Notes to the Consolidated Financial Statements for additional details on our Unsecured borrowings.
Previous wording
As of September 30, 2025, outstanding borrowings under repos and Total other secured borrowings (which include Other secured borrowings and Other secured borrowings, at fair value, as presented on our Condensed Consolidated Balance Sheet) were $5.2 billion, of which approximately 3%, or $175.6 million, related to our Agency RMBS holdings. The remaining outstanding borrowings related to our credit portfolio and Longbridge. Additionally, we had $10.1 billion of HMBS-related obligations.
Current wording
As of March 31, 2026, outstanding borrowings under repos and Total other secured borrowings (which include Other secured borrowings and Other secured borrowings, at fair value, as presented on our Consolidated Balance Sheet) were $6.3 billion, of which approximately 3%, or $188.3 million, related to our Agency RMBS holdings. The remaining outstanding borrowings related to our credit portfolio and Longbridge. Additionally, we had $10.8 billion of HMBS-related obligations.
Previous wording
(1)For unsettled purchases and sales, assumes associated borrowings are subject to haircuts of 5.8% and 5.7% as of both September 30, 2025 and June 30, 2025, respectively.
Current wording
(1)For unsettled purchases and sales, assumes associated borrowings are subject to haircuts of 5.8% as of both March 31, 2026 and December 31, 2025, respectively.
Showing the first 40 of 131 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Our overall debt-to-equity ratio, based on total recourse and non-recourse borrowings excluding borrowings collateralized by U.S. Treasury securities, adjusted for unsettled purchases and sales, was 9.0:1 as of both March 31, 2026 and December 31, 2025.
Current report — wording carried from elsewhere
(2)Conformed to current period presentation.
Current report — wording carried from elsewhere
On May 7, 2026, the Board of Directors approved a dividend in the amount of $0.13 per share of common stock payable on June 30, 2026 to stockholders of record as of May 29, 2026.
Rearranged previous paragraphs (28)
Previous report — wording carried elsewhere
Total interest expense in our investment portfolio segment decreased to $46.6 million for the three-month period ended September 30, 2025, as compared to $55.3 million for the three-month period ended September 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 and U.S. Treasury securities.
Previous report — wording carried elsewhere
The following tables summarizes our results of operations by segment (as applicable) for the nine-month periods ended September 30, 2025 and 2024:
Previous report — wording carried elsewhere
Net Income (Loss) Attributable to Common Stockholders
Previous report — wording carried elsewhere
Interest income was $354.2 million for the nine-month period ended September 30, 2025, as compared to $309.3 million for the nine-month period ended September 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.
Previous report — wording carried elsewhere
The following table details our interest income, average holdings of yield-bearing assets, and weighted average yield based on amortized cost for the nine-month periods ended September 30, 2025 and 2024:
Previous report — wording carried elsewhere
(1)Amounts exclude interest income on cash and cash equivalents (including when posted as margin) and long positions in U.S. Treasury securities.
Previous report — wording carried elsewhere
Some of the variability in our interest income and portfolio yields is due to the Catch-up Amortization Adjustment. For the nine-month period ended September 30, 2025 we had a positive Catch-up Amortization Adjustment of $0.9 million which increased our interest income. Comparatively, for the nine-month period ended September 30, 2024 we had a negative Catch-up Amortization Adjustment of $(0.1) 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 4.23% and 7.36%, respectively, for the nine-month period ended September 30, 2025. Excluding the Catch-up Amortization Adjustment, the weighted average yield of our Agency portfolio and our total portfolio was 4.21% and 7.05%, respectively, for the nine-month period ended September 30, 2024.
Previous report — wording carried elsewhere
In addition, we had $5.4 million and $9.8 million of interest income related to long U.S. Treasury securities and reverse repo on short U.S. Treasury securities for the nine-month periods ended September 30, 2025 and 2024, respectively, which we generally use to hedge our exposure to changes in interest rates.
Previous report — wording carried elsewhere
For the nine-month periods ended September 30, 2025 and 2024, interest income not allocable to either the investment portfolio segment or the Longbridge segment was $5.0 million and $5.3 million, respectively, primarily related to interest income earned on cash balances and cash collateral held by counterparties.
Previous report — wording carried 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 nine-month periods ended September 30, 2025 and 2024, we had total interest expense of $217.9 million and $211.0 million, respectively.
Previous report — wording carried elsewhere
The table below summarizes the components of interest expense in our Investment Portfolio for the nine-month periods ended September 30, 2025 and 2024.
Previous report — wording carried elsewhere
The following table summarizes our aggregate secured borrowings, including repos and Total other secured borrowings, for the nine-month periods ended September 30, 2025 and 2024.
Previous report — wording carried elsewhere
(1)Excludes U.S. Treasury securities.
Previous report — wording carried 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 4.21% and 4.40% for the nine-month periods ended September 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 3.15% and 2.65% for the nine-month periods ended September 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.
Previous report — wording carried elsewhere
Interest expense in the Longbridge segment primarily relates to Other secured borrowings and repurchase agreements. For the nine-month periods ended September 30, 2025 and 2024, interest expense in the Longbridge segment was $58.5 million and $31.0 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 rates for the nine-month period ended September 30, 2025.
Previous report — wording carried 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 $12.4 million and $13.7 million for the nine-month periods ended September 30, 2025 and 2024, respectively.
Previous report — wording carried elsewhere
The table below summarizes the components of interest expense not included in either segment for the nine-month periods ended September 30, 2025 and 2024.
Previous report — wording carried elsewhere
For the nine-month period ended September 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 $18.5 million as compared to $17.6 million for the nine-month period ended September 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 three 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.
Previous report — wording carried 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. For the nine-month period ended September 30, 2025, we incurred an incentive fee of $4.5 million. No incentive fee was incurred for the nine-month period ended September 30, 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.
Previous report — wording carried 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 nine-month periods ended September 30, 2025 and 2024, other investment related expenses were $50.1 million and $40.0 million, respectively.
Previous report — wording carried 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 nine-month periods ended September 30, 2025 and 2024, Other investment related expenses were $36.1 million and $29.6 million, respectively. The increase in Other investment related expenses in the Longbridge segment was primarily due to an increase in various loan origination expenses and servicing expenses resulting from our larger originations and holdings of reverse mortgage loans, partially offset by a decline in debt issuance costs related to other secured borrowings, at fair value.
Previous report — wording carried 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 $92.9 million for the nine-month period ended September 30, 2025 as compared to $80.0 million for the nine-month period ended September 30, 2024.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
Earnings (Losses) from Investments in Unconsolidated Entities
Previous report — wording carried elsewhere
(1)Conformed to current period methodology.
Previous report — wording carried 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.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
(5)Represents the effect of replacing mortgage loan interest income (net of securitization debt expense) with interest income of the retained tranches.