MFA Financial (MFA) Tops Q4 EPS by 1c

February 23, 2021 8:33 AM EST

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MFA Financial (NYSE: MFA) reported Q4 EPS of $0.08, $0.01 better than the analyst estimate of $0.07. Revenue for the quarter came in at $37.6 million versus the consensus estimate of $34.8 million.

Commenting on the fourth quarter 2020 results, Craig Knutson, MFA's CEO and President said, "MFA's fourth quarter financial results were a continuation of a return to normal, as we put the capital transactions necessary to emerge from our COVID-19 pandemic-induced distress behind us. The Apollo/Athene debt was fully paid off during the fourth quarter, and the associated warrants have been extinguished through a combination of repurchases and exercise. While the warrant settlement was mildly dilutive, a strong quarter and the impact of accretive common stock repurchases mitigated this dilution, with GAAP book value down just 1.5% and Economic book value flat compared to September 30. The net impact of the warrant transactions decreased reported book value amounts by roughly 3.9%."

Mr. Knutson added, "We continued to make substantial progress on multiple initiatives by seizing market opportunities in the fourth quarter that we believe should have a significant positive impact on our results as we enter 2021. With interest rates at historic lows and robust demand for mortgage credit, particularly rated mortgage credit, we executed two new securitizations in the fourth quarter and another subsequent to year-end. This brings our aggregate securitizations to just over $1.5 billion since September. These transactions substantially reduce our interest costs and also generate significant additional liquidity. In addition to paying off expensive debt (including our 8% Senior Notes that we redeemed in early January), we also deployed capital to repurchase MFA common stock at levels well below book value."

Mr. Knutson continued, "We also took advantage of a strong housing market to materially reduce our REO portfolio in 2020, selling over 1,000 properties for aggregate proceeds of $271 million, which was nearly 2.5 times the proceeds realized in 2019. These properties sold for an average of 105.9% of carrying value, generating gains on disposal of $15.1 million."

For earnings history and earnings-related data on MFA Financial (MFA) click here.

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