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- **Record ADE Growth**: $0.53 per share driven by securitization gains and strong credit performance.
- **Portfolio Expansion**: 12% QoQ growth in non-QM, reverse, and commercial loans.
- **Capital Shift**: 20% of borrowings now unsecured, reducing repo reliance.
- **Strategic Securitization**: 20 deals YTD, enhancing liquidity and capital efficiency.
- **Credit Resilience**: Cumulative realized losses of 13/47 basis points on residential/commercial portfolios.


**【CEO Summary Section】**
- Reported GAAP net income of $0.29 per share and Adjusted Diluted Earnings (ADE) of $0.53 per share, driven by higher net interest income and securitization gains.
- Portfolio growth of 12% quarter-over-quarter, led by non-QM loans, proprietary reverse mortgages, and commercial bridge loans.
- Completed 7 securitizations during the quarter, with 20 total year-to-date, enhancing liquidity and capital efficiency.
- Priced $400 million of 5-year senior unsecured notes at a 363 basis point spread, reducing reliance on short-term repo financing.

**【CFO Financial Commentary】**
- GAAP net income of $0.29 per share, with ADE of $0.53 per share, exceeding expectations due to strong credit performance and securitization gains.
- Credit portfolio realized losses of 13 basis points on $14.7 billion in residential loans, and 47 basis points on $2 billion in commercial loans, reflecting disciplined underwriting.
- Agency RMBS portfolio decreased by 18% to $221 million due to net sales, while Longbridge segment grew 37% to $750 million in retained tranches.
- Recourse debt-to-equity ratio improved to 1.8:1, with 20% of borrowings now unsecured.

**【Q&A Highlights】**
- **Credit Performance**: Cumulative realized losses of 13 basis points on residential loans and 47 basis points on commercial loans, with annualized rates near 0%.
- **Securitization Strategy**: 7 Q3 securitizations and 20 year-to-date, reducing repo reliance and enhancing capital efficiency.
- **Unsecured Debt Issuance**: $400 million 5-year notes priced at 7.3%, lowering cost of funds by 17 basis points.
- **Originator Valuations**: Affiliate loan originators' stakes valued at trailing 12-month earnings multiples, with book value growth driving liquidity.
- **Market Risk Management**: Hedging strategies mitigate prepayment and interest rate risks, with 30% of loans carrying prepayment penalties.
- **Regulatory Outlook**: Stable HPA assumptions and no material regulatory changes impacting reverse mortgage residuals.


Ellington Financial Inc. (EFC) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

EFC

EFC fundamentals

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