Ellington Financial Inc. Reports Fourth Quarter 2020 Results
OLD GREENWICH, Connecticut—February 18, 2021
Ellington Financial Inc. (NYSE: EFC) (the "Company") today reported financial results for the quarter ended December 31, 2020.
•Net income of $63.2 million, or $1.44 per common share; full year 2020 net income of $17.2 million, or $0.39 per common share.
•Core Earnings1 of $16.0 million, or $0.37 per share.
•Book value per common share as of December 31, 2020 of $17.59, including the effects of dividends of $0.29 per common share for the quarter.
•Credit strategy gross income of $75.0 million for the quarter, or $1.69 per share.
•Agency strategy gross income of $6.3 million for the quarter, or $0.13 per share.
•Dividend yield of 7.5% based on the February 17, 2021 closing stock price of $15.92 per share, and dividend of $0.10 per common share declared on February 5, 2021.
•Debt-to-equity ratio of 2.6:1 and recourse debt-to-equity ratio of 1.6:12 as of December 31, 2020.
•Cash and cash equivalents of $111.6 million as of December 31, 2020, in addition to other unencumbered assets of $442.5 million.
Fourth Quarter 2020 Results
"Ellington Financial fired on all cylinders in the fourth quarter, with broad-based contributions across our diversified credit and Agency portfolios. EFC generated Core Earnings of $0.37 per share, and a non-annualized quarterly economic return of 8.7% for the quarter," said Laurence Penn, Chief Executive Officer and President. "The fourth quarter's strong results brought our economic return and net income positive for the full year, despite the extreme volatility encountered earlier in the year. I am extremely proud of this result, which I believe confirms yet again the importance and effectiveness of our risk and liquidity management. Notably, EFC is one of the only publicly traded hybrid mortgage REITs to post a profit in 2020.
"During the fourth quarter, our loan origination businesses again led the way. In the non-QM space, our affiliate LendSure had a record quarter for origination volume, and our affiliate Longbridge concluded an outstanding year in the reverse mortgage space. We also closed on our second non-QM securitization of the year, and we securitized a pool of our unsecured consumer loans. We had strong performance across our short-duration loan portfolios, particularly residential transition mortgage loans, consumer loans, and small-balance commercial mortgage loans. In addition, our credit securities performed very well, most notably CLOs, CMBS, non-Agency RMBS, and European RMBS, as prices continued to recover from the March selloff. Finally, our Agency portfolio delivered another quarter of excellent results.
"Moving into 2021, our focus continues to be on growing our proprietary loan origination businesses, including potentially adding more strategic equity investments and loan flow purchase agreements. We will also continue to be opportunistic in our securities strategies, and plan to continue to extend and diversify our financings. We still hold ample liquidity and employ low leverage, which means that we have plenty of dry powder to add assets and grow earnings. As always, our disciplined hedging and risk management should continue to be critical in protecting book value, as we tackle the challenges and opportunities of the year ahead."
1 Core Earnings is a non-GAAP financial measure. See "Reconciliation of Net Income (Loss) to Core Earnings" below for an explanation regarding the calculation of Core Earnings.
2 Excludes repo borrowings at certain unconsolidated entities that are recourse to us. Including such borrowings, the Company's debt-to-equity ratio based on total recourse borrowings was 1.6:1 as of December 31, 2020.
The following information was filed by Ellington Financial Llc (EFC) on Thursday, February 18, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.