MFA Financial, Inc Announces Fourth Quarter 2020 Financial Results.

NEW YORK: MFA Financial, Inc. (NYSE: MFA) today provided its financial results for the fourth quarter ended December 31, 2020.

Fourth Quarter 2020 financial results update:

MFA generated fourth quarter net income of $37.6 million, or $0.08 per common share.

MFA paid a regular cash dividend for the fourth quarter of $0.075 per share of common stock on January 29, 2021.

GAAP book value at December 31, 2020 was $4.54 per common share, while Economic book value, a non-GAAP financial measure of MFA's financial position that adjusts GAAP book value by the amount of unrealized market value changes in residential whole loans held at carrying value for GAAP reporting, was $4.92 per common share at quarter-end.

Markets for residential mortgage assets further stabilized following the disruptions experienced earlier in 2020. Earnings and changes in book value continued to be positively impacted by improvements in the values of residential mortgage assets. Income from residential whole loans at fair value included $30.9 million of market value gains, while changes in the fair value of loans held on our balance sheet at carrying value also resulted in an increase in Economic book value during the quarter of approximately $0.07 per common share. While MFA's fourth quarter financial results had fewer unusual items than prior periods, they were impacted by certain items that will not reoccur in future periods. In particular, fourth quarter net income included expenses totaling $25.3 million (or $0.06 per common share) recognized on the repayment of the senior secured term loan from Apollo and Athene and a $3.1 million non-cash charge (or $0.01 per common share) related to the redemption of our 8% Senior Notes (both items discussed further below).

Additionally, during the quarter, we completed two transactions with Apollo and Athene that eliminated potential future dilution from the warrants that were issued in connection with the loan. In the first transaction, the Company repurchased, for $33.7 million, approximately 48% of the warrants and in the second transaction, the remaining warrants were exercised by Apollo and Athene, resulting in MFA issuing approximately 12.3 million shares of common stock and receiving $6.5 million in cash. The combined impact of the warrant exercise and repurchase transactions decreased MFA's GAAP book value per common share by $0.18 and Economic book value per common share by $0.19, reflecting less than 4% dilution of previously reported book value.

We continued to make significant progress on initiatives to lower the cost of financing our investments with...