Earnings Call Contradictions: Analyzing the Divergent Narratives on Swap Runoff, Asset Returns, and Loan Performance

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Fixed Income Market Performance:
- MFA Financial's portfolio delivered a total economic return of 1.9% for the first quarter of 2025, with an economic book value decline of 0.6%.
- The constructive fixed income market environment, with the 10-year yield rallying from 4.79% to 4.20%, contributed to this performance.

Dividend Increase and Earnings Power:
- MFA Financial increased its quarterly dividend to $0.36 per share, reflecting the earnings power of its portfolio.
- The increase was driven by the growth in net interest income, positive yield curve slope, and wider spreads on assets.

Securitization and Non-Mark-to-Market Financing:
- MFA experienced total margin calls of under $20 million during market disruptions, demonstrating the effectiveness of its strategic emphasis on securitization and non-mark-to-market financing.
- The company's ability to manage volatility was due to 83% of loan financing and 70% of all liabilities being non-mark-to-market.

Portfolio Growth and Asset Allocation:
- MFA sourced $875 million of loans and securities, growing its portfolio net of runoff and sales to $10.7 billion from $10.5 billion at year-end.
- The growth was focused on non-QM, Agency MBS, and business-purpose loans to achieve mid to high-teens ROEs.

Credit Performance and Risk Management:
- 60-plus day delinquencies for MFA's entire loan portfolio remained stable at 7.5%, with exception in the single-family transitional portfolio.
- Effective risk management measures, including strategic asset allocation and credit underwriting standards, contributed to maintaining low delinquency rates.