Ellington Financial Inc.

Longbridge Segment

The Longbridge segment reported net income attributable to common stockholders of $12.5 million, compared with $30.2 million in the second quarter. Adjusted Distributable Earnings were $8.6 million, compared with $28.9 million in the second quarter. The sequential decline primarily reflected narrower origination margins and reduced proprietary reverse mortgage securitization gains.

Longbridge originated $676.3 million of loans during the quarter, up 36% year over year, contributing to a 59% sequential increase in the net Longbridge portfolio 5 to $1.0 billion as of September 30, 2026. Much of this increase was reversed upon the October settlement of a proprietary reverse mortgage loan securitization that priced in September.

Key Highlights 6:

•Positive contribution from originations, driven by sequentially higher origination volumes and net gains from a proprietary reverse mortgage loan securitization priced during the quarter, partially offset by origination margin compression amid higher interest rates.

•Positive contribution from servicing, reflecting strong tail securitization executions, steady base servicing net income, and gains on MSR-related hedges, partially offset by a mark-to-market loss on the HMBS MSR.

•Significant net gains on "enterprise" interest-rate hedges intended to mitigate the potential impact of higher interest rates on origination profits.

•Net unrealized loss on the retained tranches of consolidated proprietary reverse mortgage loan securitization trusts, driven by revised home price projections.

•Achieved a quarterly record HMBS market share of 31%, ranking as the second-largest issuer in the market, according to Bloomberg.