What does Ellington Credit do and what are its main business segments?

What is Ellington Credit's latest dividend and current dividend yield?

What guidance did Ellington Credit's management provide for the next earnings period?

What is the market's earnings forecast for Ellington Credit next quarter?

What is the revenue and EPS growth rate for Ellington Credit year over year?

What is Ellington Credit's gross profit margin?

What factors drove the changes in Ellington Credit's revenue and profit?

What were the key takeaways from Ellington Credit's earnings call?

- **Q4 Outperformance**: NAV down 9% vs. peer median -9%, driven by 70% mezzanine debt allocation and active trading (47 Q4 trades). 
- **Credit Hedge Expansion**: $175M hedges (90% of NAV) added to protect against corporate credit risks. 
- **2025 Transformation**: Built $370M CLO portfolio (+50%), executed 218 trades, and maintained stable earnings. 
- **2026 Strategy**: Focused on BB-rated mezzanine, exercising call options, and maintaining credit hedges despite 1-2% annual drag. 
- **Market Opportunity**: 15% loans priced above par (vs. 57% start of year), creating relative value for active traders. 


**【CEO Summary Section】**
- **Challenging Q4 Performance**: Despite a 9% NAV decline, EARN outperformed the peer set, with CLO equity median return at -9% for the quarter and -14% for the year. 
- **Strategic Shift to Mezzanine Debt**: 70% of CLO purchases from April to December were mezzanine debt, ending the year with 50% debt allocation (vs. 33% pre-conversion). 
- **Active Trading Mitigated Losses**: 47 unique CLO trades in Q4, including redeploying $66M in new purchases (60% debt, 40% equity) and $19M sales. 
- **Credit Hedge Expansion**: Increased credit hedge portfolio to $175M (90% of NAV) to protect against corporate credit risks. 
- **2025 Transformation**: Built CLO portfolio to $370M (up 50%), executed 218 trades, and maintained strong earnings stability. 

**【CFO Financial Commentary】**
- **Q4 Financial Results**: GAAP net loss of $0.56 per share, driven by CLO equity mark-to-market losses. 
- **Portfolio Yield**: 13.7% weighted average GAAP yield (down from 15.5% Q3). 
- **Portfolio Activity**: Ended Q4 with $370M CLO portfolio (-3% vs. Q3), 52% in equity (unchanged). 
- **Underlying Collateral**: 95% first lien loans, 44% in >$1.5B facilities, 4.3-year weighted average maturity. 

**【Portfolio Manager's Remarks】**
- **CLO Market Dynamics**: Q4 was one of the toughest quarters for CLO equity, with 15% loans priced above par (vs. 57% start of year). 
- **Mezzanine Resilience**: Mezzanine debt outperformed equity, with 40% of U.S. portfolio in deals with upcoming non-call periods. 
- **Selective New Issue Approach**: Only 1 new issue equity transaction since conversion, focusing on secondary market opportunities. 
- **2026 Outlook**: Actively adding BB-rated mezzanine positions, exercising call options, and maintaining substantial credit hedges. 

**【Q&A Highlights】**
- **Sector Diversification**: No single sector >11% exposure, with focus on statistical risk management vs. sector-specific views. 
- **Credit Hedge Cost**: ~1-2% annual drag, justified by protection against tail risks (e.g., software/AI disruption). 
- **Redemption Impact**: ETF outflows create trading opportunities, with CLOs less susceptible to liquidity-driven price declines. 
- **Default Recovery**: Historical 75bp annual par burn rate, with recoveries varying by deal specifics. 


Ellington Credit Company (EARN) Q4 2025 Earnings Call Transcript

- **Dividend Coverage Milestone**: Achieved full dividend coverage, signaling portfolio maturity and earnings stability.
- **Portfolio Growth & Quality**: 20% CLO portfolio expansion with 70% allocation to mezzanine debt, emphasizing credit quality and risk mitigation.
- **Active Trading Differentiation**: 92 Q3 trades highlight nimble portfolio management and secondary market advantage.
- **Comprehensive Risk Management**: $150M credit hedges (40% of NAV) provide buffer against corporate credit spread widening.
- **Market Outlook**: Cautious on new CLO issuance; AI-driven credit dispersion and prepayment risk remain key challenges.

**【CEO Summary Section】**
- Achieved full dividend coverage from net investment income in September, marking a key milestone in portfolio earnings power.
- CLO portfolio grew 20% to $380 million, with 70% of new purchases in mezzanine debt tranches, reflecting focus on higher credit quality.
- Active trading strategy executed 92 CLO trades in Q3, enabling repositioning for yield compression and risk management.
- Increased credit hedges to $150 million (high-yield CDX equivalents) by end of October, providing downside protection against market volatility.

**【CFO Financial Commentary】**
- GAAP net income of $0.11 per share and net investment income of $0.23 per share, driven by 15.5% weighted average yield on CLO portfolio.
- Portfolio breakdown: 51% in CLO equity, 14% in European CLOs, and 95% of underlying assets in first lien floating-rate loans.
- Underlying loan collateral diversified across tech (11%), financial services (10%), and healthcare (10%), with weighted average maturity of 4.2 years.

**【Portfolio Manager Insights】**
- CLO equity performance muted due to prepayments and default dispersion, while mezzanine tranches outperformed with structural protections.
- Secondary market trading volumes surged (79 trades in Q2 to 92 in Q3), supporting confident portfolio valuation and NAV accuracy.
- Credit hedges now cover 40% of NAV, balancing risk/reward through synthetic short positions in corporate credit.

**【Q&A Highlights】**
- Hedge expansion driven by portfolio growth and repo financing needs, not market timing; hedges are 'tail risk' focused, not directional bets.
- Leverage appetite constrained by '40 Act rules, targeting ~2:1 asset-to-equity ratio with unsecured debt issuance pending market conditions.
- CLO supply outlook cautious, with focus on refinancing/repricing rather than new issuance; AI-driven credit dispersion expected to persist.


Ellington Credit Company (EARN) Q3 2025 Earnings Call Transcript

- **Record Q2 Performance**: 19.7% annualized NAV return and 27% CLO portfolio growth, driven by timely asset redeployment.
- **Strong Yield Metrics**: 15.6% yield on U.S. CLO portfolio and $0.18 per share net gains from active trading.
- **Strategic Shifts**: Increased focus on secondary market CLO mezzanine and credit hedges to mitigate tariff-related risks.
- **Leverage Expansion**: Plans to issue debt to accelerate portfolio growth to $400 million by year-end.

**【CEO Summary Section】**
Ellington Credit Company reported a strong start to its new fiscal year with a 19.7% annualized NAV return and a 27% quarter-over-quarter growth in its CLO portfolio to $317 million. The company opportunistically sold its legacy mortgage assets in early April, redeploying capital into CLOs at market lows. Performance was driven by CLO equity and mezzanine investments, with net investment income exceeding expectations. Management highlighted the benefits of the closed-end fund structure, including tax efficiency and enhanced investment flexibility. The company projects monthly net investment income to cover its $0.08 distribution starting in September.

**【CFO Financial Commentary】**
GAAP net income was $0.27 per share, with adjusted net investment income of $0.18 per share. The U.S. CLO portfolio yielded 15.6%, driven by strong performance across debt and equity tranches. Net realized and unrealized gains totaled $0.18 per share, including par redemptions of mezzanine positions purchased at discounts. European CLO equity underperformed due to wider credit dispersion, but the portfolio remained well-diversified with 95% exposure to senior secured loans. The company maintained $36.6 million in cash, supporting its active trading strategy.

**【Q&A Key Highlights】**
1. **CLO Market Dynamics**: Greg Borenstein explained that AAA spreads lagged loan price recoveries due to reduced demand from ETFs and foreign buyers. The company shifted focus to secondary market opportunities, executing 79 unique CLO trades in Q2. 
2. **Tariff Impact**: CEO Larry Penn noted tariffs create sector-specific risks, making mezzanine tranches less sensitive to macro volatility compared to equity. The company added credit hedges at improved entry points.
3. **NAV Update**: As of July 31, NAV was $6.16 per share, up from $6.12 at quarter-end. The company plans to issue long-term unsecured debt to boost leverage and earnings growth.


Ellington Credit Company (EARN) Q2 2025 Earnings Call Transcript

- **Closed-End Fund Transition**: 28% of capital (formerly in Agency RMBS) will be redeployed into CLOs post-April 1 conversion, targeting 0.5x leverage.
- **CLO Growth**: CLO portfolio expanded 10x in 2024, with 72% allocation by year-end. European CLOs outperformed U.S. peers, driving diversification benefits.
- **Financial Resilience**: Q4 ADE of $0.27 covered the dividend, despite a $0.07 net loss. Short TBA positions mitigated interest rate risk, reducing net mortgage exposure to near zero.
- **Market Opportunity**: Recent credit volatility creates inefficiencies, with CLO equity offering wide net interest margins. Post-conversion, fresh capital deployment may drive Q2 ADE recovery.
- **Risk Management**: Liquidity remains strong at $111M, and debt-to-equity ratio stayed below 3:1. Post-conversion, the company will no longer hold Agency RMBS, focusing solely on CLOs.


**【CEO Summary Section】**
- **Conversion Progress**: Shareholders approved the transition to a closed-end fund, set to complete on April 1, 2025. The CLO portfolio grew by 18% to $171 million in Q4, with 58% allocated to CLO equity. By year-end, the net mortgage assets-to-equity ratio dropped to 2.6:1, nearing zero post-year-end due to TBA short positions.
- **Financial Performance**: Adjusted distributable earnings (ADE) of $0.27 per share covered the $0.24 dividend. Despite a $0.07 net loss, CLO mezzanine debt and equity contributed positively, offsetting Agency RMBS underperformance.
- **Risk Management**: Short TBA positions hedged interest rate risk, reducing net mortgage exposure. Liquidity remained strong with $111 million in cash and unencumbered assets.
- **Future Outlook**: Post-conversion, 28% of capital (previously in Agency RMBS) will be deployed into CLOs, targeting a 0.5x leverage ratio. Full ramp-up of the CLO portfolio is expected by mid-2025.

**【CFO Financial Commentary】**
- **Q4 Results**: Net loss of $0.07 per share vs. ADE of $0.27. CLO mezzanine debt net interest income grew, with gains from tighter spreads and redemptions. CLO equity showed modest returns, while Agency RMBS underperformed due to rate volatility.
- **Balance Sheet**: Debt-to-equity ratio at 2.9x, below the 3:1 threshold. Liquidity metrics remain robust, with no corporate income tax liability post-conversion.
- **Portfolio Shifts**: CLO allocation rose to 72% (from 11% in 2024), with 14% in European CLOs. Agency RMBS holdings decreased to $512 million, prioritizing liquidity ahead of conversion.

**【CIO & Portfolio Manager Insights】**
- **CLO Market Dynamics**: Mezzanine tranches performed well on spread tightening, while equity faced headwinds from loan refinancing and coupon compression. European CLOs outperformed U.S. peers, highlighting diversification benefits.
- **Agency Strategy**: Short TBA positions offset long Agency RMBS, reducing market risk. Post-conversion, Agency pools will be sold, freeing capital for CLOs.
- **Market Volatility**: Recent credit market volatility creates inefficiencies, offering opportunities for active management. Long-term risks include corporate stress from elevated rates.

**【Q&A Highlights】**
- **Capital Deployment**: ~28% of equity (~$171 million) will be redeployed post-conversion, targeting CLO equity with wide net interest margins. ADE may temporarily dip in Q2 but recover by Q3.
- **Market Reaction**: CLO equity prices reflect technical factors (discount rate widening) more than fundamental credit deterioration. Mezzanine tranches remain attractive at discounts.
- **Leverage Target**: Initial leverage of 0.5x (e.g., $150M CLOs per $100M equity) may expand as the portfolio stabilizes, leveraging closed-end fund capital market access.


Ellington Residential Mortgage REIT (EARN)-13 Mar 25-2024 Q4 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-13 Nov 24-2024 Q3 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-13 Aug 24-2024 Q2 Earnings call transcript

Ellington Credit (EARN)-15 May 24-2024 Q1 Earnings call transcript

- **Strategic Shift to CLOs**: 17% equity allocation to CLOs, with 70% growth in 2024 Q1, targeting 15-20% returns.
- **Financial Performance**: Q4 net income $0.75/share, ADE $0.27/share, NIM 2.19% (vs. 1.34% prior quarter).
- **Market Trends**: Agency MBS spreads wide (150-200bps), CLOs benefit from corporate credit tightening and leveraged loan refinancing.
- **Leverage Strategy**: 5-6x CLO leverage vs. 8-9x agency MBS, reducing rate risk exposure.
- **Fed Rate Cuts Catalyst**: Agency MBS demand growth if rates decline 100-200bps for refinancing eligibility.

**【CEO Summary Section】**
- The company reported net income of $0.75 per share and adjusted distributable earnings (ADE) of $0.27 per share for Q4 2023. The CEO emphasized the strategic pivot to corporate loan obligations (CLOs), which now account for 17% of total equity allocation. The CLO portfolio grew by $13.6 million in Q4 and an additional 70% in early 2024, driven by high-yield returns (15-20%) and lower leverage compared to agency MBS. The CEO highlighted the stability and growth potential of CLOs amid market volatility and the expected Federal Reserve rate cuts.

**【CFO Financial Commentary】**
- Q4 net income was $0.75 per share, with ADE of $0.27 per share, up from $0.24 in the prior quarter. The net interest margin (NIM) expanded to 2.19% (from 1.34%), driven by higher asset yields and lower funding costs. The CLO portfolio's NIM of 6.28% (up from 4.55%) outperformed agency MBS (2.02% NIM) and non-agency RMBS (4.55%). The debt-to-equity ratio declined to 5.3x (from 7.3x), reflecting reduced leverage on CLOs.

**【CIO Market Insights】**
- Agency MBS spreads remain wide (historically 150-200bps), supported by low supply, benign prepayment risk, and inflows into fixed-income funds. CLOs benefit from corporate credit tightening (high-yield spreads down 100bps in Q4) and leveraged loan refinancing. Seasoned CLO mezzanine tranches are expected to deleverage faster due to higher prepayment speeds, driving returns for EARN's discounted investments.

**【Q&A Highlights】**
- **Leverage Strategy**: Management aims to balance agency MBS volatility with stable CLO returns, targeting 5-6x leverage for CLOs. 
- **Prepayment Risk**: Most owned coupons require 100-200bps rate declines for refinancing, with affordable prepayment protection for agency pools.
- **Fed Policy Impact**: Rate cuts could boost Agency MBS demand, while CLOs benefit from corporate credit recovery and leveraged loan inflows.
- **Market Liquidity**: CLOs offer higher NIM (6-7x vs. 8-9x for agency), with less delta hedging cost exposure.

**【2024 Outlook】**
- CLOs to drive ADE growth, with agency MBS performance dependent on rate cuts timing. The company expects continued CLO portfolio expansion and reduced leverage on agency MBS. The leveraged loan market's 40%+ par trading incentivizes refinancing, supporting CLO cash flows and deleveraging.

Ellington Residential Mortgage REIT (EARN)-7 Mar 24-2023 Q4 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-13 Nov 23-2023 Q3 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-11 Aug 23-2023 Q2 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-12 May 23-2023 Q1 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-7 Mar 23-2022 Q4 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-10 Nov 22-2022 Q3 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-12 Aug 22-2022 Q2 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-3 May 22-2022 Q1 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-8 Mar 22-2021 Q4 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-3 Nov 21-2021 Q3 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-3 Aug 21-2021 Q2 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-8 May 21-2021 Q1 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-17 Feb 21-2020 Q4 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-8 Nov 20-2020 Q3 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-8 Aug 20-2020 Q2 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-9 May 20-2020 Q1 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-11 Feb 20-2019 Q4 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-5 Nov 19-2019 Q3 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-2 Aug 19-2019 Q2 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-3 May 19-2019 Q1 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-12 Feb 19-2018 Q4 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-6 Nov 18-2018 Q3 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-3 Aug 18-2018 Q2 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-4 May 18-2018 Q1 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-9 Feb 18-2017 Q4 Earnings call transcript

Ellington Residential Mortgage REIT (EARN)-3 Nov 17-2017 Q3 Earnings call transcript

Actual															0.27	0.26	0.39	0.34	0.31	0.37	0.31	0.28	0.3	0.28	0.23	0.25	0.21	0.17	0.21	0.27	0.27	0.18	0.23	0.21
Forecast															0.255	0.248	0.2854	0.3479	0.326	0.3165	0.3333	0.3141	0.3059	0.2538	0.2266	0.2185	0.2395	0.2206	0.24	0.2325	0.2993	0.2387	0.2232	0.2498
Surprise	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	+5.88%	+4.84%	+36.65%	-2.27%	-4.91%	+16.90%	-6.99%	-10.86%	-1.93%	+10.32%	+1.50%	+14.42%	-12.32%	-22.94%	-12.50%	+16.13%	-9.79%	-24.59%	+3.05%	-15.93%

Actual	--	--	--	--	--	--	--	--	--	--	--	--	--	--	3.78M	1.16M	6.96M	5.46M	5.75M	9.21M	4.91M	5.76M	5.43M	7.12M	5.19M	2.45M	-372.00K	-1.62M	-1.10M	377.00K	6.14M	9.87M	11.88M	11.12M
Forecast	--	--	--	--	--	--	--	--	--	--	--	--	--	--	4.37M	4.12M	5.18M	5.86M	5.49M	5.31M	5.77M	5.79M	5.60M	4.85M	3.83M	3.55M	3.79M	1.86M	-626.00K	2.41M	7.34M	12.91M	11.41M	12.71M
Surprise	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	-13.49%	-71.90%	+34.38%	-6.86%	+4.83%	+73.38%	-14.86%	-0.41%	-2.99%	+46.74%	+35.51%	-30.89%	-109.81%	-186.66%	-75.08%	-84.38%	-16.32%	-23.53%	+4.16%	-12.48%

EARN

EARN fundamentals

EARN Q3 2026 Earnings

Earnings Call

You can ask Aime

EARN

EARN fundamentals

EARN Q3 2026 Earnings

Earnings Call

EARN Earnings Call Summary for Q3/202612:00 PM on Mar 5, 2026

EARN Earnings Call Summary for Q2/202611:00 AM on Nov 20, 2025

EARN Earnings Call Summary for Q1/202611:00 AM on Aug 20, 2025

EARN Earnings Call Summary for Q4/2025 Mar 26, 2026

EARN Earnings Call Summary for Q4/202411:00 AM on Mar 13, 2025

You can ask Aime