Ellington Financial Inc. Reports First Quarter 2021 Results
OLD GREENWICH, Connecticut—May 5, 2021
Ellington Financial Inc. (NYSE: EFC) (the "Company") today reported financial results for the quarter ended March 31, 2021.
•Net income of $37.9 million, or $0.86 per common share.
•Core Earnings1 of $18.8 million, or $0.43 per share.
•Book value per common share as of March 31, 2021 of $18.16, including the effects of dividends of $0.30 per common share for the quarter.
•Credit strategy gross income of $50.7 million for the quarter, or $1.14 per share.
•Agency strategy gross income of $40 thousand for the quarter.
•Dividend yield of 9.4% based on the May 4, 2021 closing stock price of $17.80 per share, and dividend of $0.14 per common share declared on April 4, 2021, which was an increase of 40% compared to the previous dividend amount.
•Debt-to-equity ratio of 3.1:1 and recourse debt-to-equity ratio of 2.0:12 as of March 31, 2021. Adjusted for unsettled purchases and sales, these ratios were 3.2:1 and 2.0:1, respectively as of March 31, 2021.
•Cash and cash equivalents of $149.4 million as of March 31, 2021, in addition to other unencumbered assets of $467.3 million.
First Quarter 2021 Results
"In the first quarter, Ellington Financial's Core Earnings and book value increased substantially, as we used our strong balance sheet to drive the growth of our high-yielding loan portfolios and opportunistically rotate capital allocations," said Laurence Penn, Chief Executive Officer and President. "During the quarter, we increased the combined size of our small balance commercial mortgage, residential transition, and consumer loan portfolios by a considerable 21%. We also took advantage of trading opportunities in securities, monetizing substantial gains in our CMBS and CLO portfolios. Finally, we capitalized on increased yield spread widening in the Agency RMBS market to add to our portfolio there, which increased our leverage incrementally. For the quarter, Core Earnings per share grew by 16% sequentially to $0.43, and we generated an annualized economic return of 21.3%.
"During the first quarter, in addition to substantial gains in our CMBS and CLO portfolios, we also had notably strong performance from our non-QM loan business, where we successfully completed our first securitization of the new year, as well as from our consumer loan, residential transition loan, and non-Agency RMBS portfolios.
"With the growth of our loan portfolios and Core Earnings, we were well positioned for a substantial dividend increase. Last month, the Board increased our monthly dividend by 40% to $0.14 per share, which was our third dividend increase in the last year. Given the earnings power of our current portfolio, including the significant contribution from our equity stakes in originators, along with additional dry powder to deploy, we remain confident that we can continue to grow the dividend from here.
"The year is off to a great start for Ellington Financial. As the economy continues to reopen but market volatility returns, our focus continues to be on the dual mandate of growing the portfolio and earnings, while staying disciplined on risk and liquidity management to preserve book value across market cycles."
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 2.0:1 as of March 31, 2021.
The following information was filed by Ellington Financial Llc (EFC) on Wednesday, May 5, 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.