MFA’s Q3 Report Highlights Expanding Mortgage Portfolio and Strategic Progress

Strong Loan Acquisitions and Portfolio Growth Drive MFA’s Quarter

MFA Financial, Inc. (NYSE:MFA) delivered solid operational results for the third quarter of 2025, underscored by aggressive acquisition of residential mortgage assets and disciplined capital management. The company acquired $1.2 billion in residential mortgage assets during the period, boosting its total portfolio to $11.2 billion—up from $10.8 billion last quarter. This expansion included $453 million in Non-QM loans and $473 million in Agency MBS, with the Non-QM portfolio now standing at $5.1 billion.

GAAP net income attributable to common stockholders reached $37.3 million for the quarter, translating to $0.36 per basic share, while distributable earnings were $21 million, or $0.20 per basic share. MFA maintained a regular quarterly cash dividend of $0.36 per share and reported an economic book value of $13.69 per share at quarter end. Notably, total economic return was 2.6% for the period, and unrestricted cash on hand was a healthy $305.2 million.

Delinquency Rates Show Meaningful Decline Across the Portfolio

MFA continued to resolve legacy loan issues, resulting in a marked improvement in loan performance. The 60+ day delinquency rate across the entire residential loan portfolio fell to 6.8%, compared to 7.3% in the prior quarter, as $223 million of previously delinquent loans were resolved. This improvement underscores the effectiveness of MFA’s portfolio management strategy.

Portfolio Yields and Interest Spreads Remain Resilient

The company sustained competitive net yields across its main asset classes, with Non-QM loans producing a 5.95% yield, business purpose loans at 7.88%, and legacy RPL/NPL loans at 8.55% for Q3 2025. Overall, the residential whole loan portfolio maintained an average yield of 6.81%—reflecting steady earnings power in a challenging market environment. MFA’s net interest spread across all balance sheet assets for the quarter was 1.86%, down slightly from 1.98% last quarter, influenced primarily by swap carry impacts and competitive funding costs.

Securitizations and Capital Allocation Enhance Earnings Profile

MFA completed two new loan securitizations totaling $721.5 million in Non-QM loans, contributing to a total of $6.4 billion in securitized debt. This balance sheet efficiency is paired with active risk management, including a net addition of $284.1 million in new interest rate hedges. The company’s net effective portfolio duration was lowered slightly to 0.98, signaling tight duration control as interest rate uncertainty persists.

The Debt/Net Equity ratio stands at 5.5x, and recourse leverage is at 1.9x—levels that allow both operational flexibility and financial discipline. Nearly 500,000 shares of common stock were repurchased in the quarter, primarily at a significant discount to book value, reinforcing management’s capital stewardship focus.

Key Balance Sheet and Earnings Metrics Remain Robust

Scenario Analysis Reveals Limited Interest Rate Exposure

Stress tests of MFA’s portfolio indicate that a 100-basis-point increase in rates would result in an estimated 8.33% decline in stockholders’ equity, while a 100-basis-point decrease would result in a 4.66% increase. This measured sensitivity demonstrates prudent risk controls given ongoing macroeconomic uncertainties.

Takeaway: Signs of Improved Credit Quality and Earnings Stability

MFA’s third quarter results highlight improving credit trends, healthy yields, active risk management, and disciplined capital allocation—setting the stage for continued operational progress. Investors may want to monitor future impacts of the cost reduction program (expected to cut G&A expenses by up to 10%) and the deployment of excess liquidity into high-yielding asset classes. MFA’s webcast and presentation on November 6 will likely offer more insight into its evolving strategy and outlook.

For more detailed financials and discussion, visit MFA Financial’s Investor Relations.

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