MFA Financial, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported a GAAP net loss to common stockholders and participating securities of $(122.4) million, or $(1.19) per basic and diluted share, for the quarter ended September 30, 2026.
• Distributable earnings (non-GAAP) were $26.4 million, or $0.26 per basic common share.
• Distributable earnings prior to realized credit losses (non-GAAP) were $45.3 million, or $0.44 per share.
• GAAP book value per common share was $11.12 at September 30, 2026.
• Economic book value per common share (non-GAAP) was $11.44 at September 30, 2026.
• Total economic return for the quarter was (10.6)%.
• Net interest income for the quarter was $61.4 million, up from $57.0 million in the prior year quarter.
• Total assets were $13.54 billion at September 30, 2026, compared to $13.05 billion at December 31, 2025.
• Total liabilities were $11.93 billion at September 30, 2026.
• Total stockholders' equity was $1.62 billion at September 30, 2026.
• Debt/Net Equity ratio was 7.1x, with recourse leverage at 3.4x.
• The company held $119.5 million in unrestricted cash and $241.2 million in unpledged Agency MBS.

Guidance and Future Outlook:

• Management expressed a forward-looking intent to deploy capital into a higher yielding environment.
• The company plans to continue reducing legacy multifamily exposure.
• No specific numerical forward guidance for revenue, earnings, or book value was provided in the release.

Business Segments and Product Lines:

• Residential Investment Portfolio: Total portfolio was $12.8 billion at September 30, 2026, down from $13.0 billion at June 30, 2026.
• Agency MBS: Purchased $884.2 million and sold $750.3 million; the position declined to $3.9 billion after runoff and market value changes. Forward contracts in the TBA market totaled $478.0 million.
• Non-QM Loans: Acquisitions totaled $480.5 million, bringing the portfolio to $5.8 billion. Net yield was 5.86% for the quarter.
• Lima One Capital: Funded $166.1 million in new business purpose loans and $88.4 million in draws on previously originated Transitional loans. Generated $7.4 million in mortgage banking income.
• Securitization: Completed one securitization collateralized by $446.5 million UPB, bringing total securitized debt to approximately $5.9 billion.
• Asset Dispositions: Sold $94.8 million of recently-originated single-family rental (SFR) loans for a $2.4 million gain; sold 62 REO properties for $20.5 million in net proceeds.
• Portfolio Runoff: Total runoff was $614.0 million.
• Delinquencies: 60+ day delinquencies decreased to 6.7% of UPB from 7.0% at June 30, 2026.
• Hedging: Added net $357.2 million of new interest rate hedges; net effective duration of the investment portfolio was 1.09 years.

Market and Competitive Landscape:

• The third quarter was characterized by Treasury yields spiking across the curve and heightened volatility causing spreads to widen.
• Management noted the ability to purchase Non-QM loans and Agency MBS at attractive levels despite market conditions.

Risks and Challenges:

• The release highlights risks associated with interest rate volatility, credit risks (default rates and loss severities), and the effectiveness of hedging transactions.
• Risks include the potential for reduced yields due to increased prepayment rates or lower forecasted cash flows due to decreased prepayment rates.
• Operational risks include the ability to borrow to finance assets and the terms of such borrowings.
• Specific risks relate to the Lima One subsidiary, including industry competition and unanticipated expenditures.

Management Commentary and Tone:

• Craig Knutson, CEO, described the quarter as "challenging" but noted the company was not immune to market movements while successfully purchasing assets at attractive levels.
• Bryan Wulfsohn, President and CIO, highlighted the acquisition of $1.6 billion of assets and the re-securitization of $447 million of seasoned NPL collateral, which unlocked $40 million of capital and additional financing capacity.
• The tone reflects a strategic focus on capital deployment and portfolio optimization in a volatile rate environment.

Other Key Points:

• Succession Plan: CEO Craig Knutson will retire effective June 30, 2027, remaining on the Board. Bryan Wulfsohn will join the Board on January 1, 2027, and become CEO on July 1, 2027. Andrew Kail will join as Senior Vice President and Chief Investment Officer on January 1, 2027.
• Dividend: A regular cash dividend of $0.36 per common share was paid on October 30, 2026.
• Webcast: An investor conference call was scheduled for November 4, 2026, at 11:00 a.m. Eastern Time.
• Re-securitization: The re-securitization of $447 million of seasoned NPL collateral after calling a prior issuance unlocked $40 million of capital.
• Share Count: 101.0 million shares of common stock were outstanding as of September 30, 2026.