• Sat. Nov 28th, 2020

Pharma Oracle

Evolving Today for better Tomorrow

Well maintained stock to review: MFA Financial, Inc. (NYSE: MFA)

On 25 March 2020, MFA Financial, Inc. stock identified change of 256.25% away from 52-week low price and recently located move of -85.91% off 52-week high price. It has market worth of $516.56M and dividend yield of 70.18%. MFA stock has been recorded -83.77% away from 50 day moving average and -84.46% away from 200 day moving average. Moving closer, we can see that shares have been trading -80.37% off 20-day moving average.

MFA Financial, Inc. (MFA) recently reported its financial results for the fourth quarter ended December 31, 2019.

Fourth Quarter 2019 and other highlights:

MFA generated fourth quarter GAAP net income of $96.9M, or $0.21 per ordinary share. Core earnings, a non-GAAP financial measure of MFA’s operating performance that is calculated by adjusting GAAP net income to exclude the impact of unrealized gains and losses on certain investments in residential mortgage securities and related hedges, was also $0.21 per ordinary share.

MFA purchased about $1.7B of residential mortgage assets in the fourth quarter, including $1.5B of residential whole loans. During 2019, residential whole loan acquisitions of about $4.3B drove net portfolio growth exceeding $1.0B.

Interest income on MFA’s purchased performing loan portfolio increased 15.6% from the previous quarter to $61.9M. For the full year, this portfolio generated $200.6M in interest income, over triple the previous year.

GAAP book value per ordinary share during the quarter continued to be stable and was $7.04 at December 31, 2019. GAAP book value reduced from $7.15 at December 31, 2018, primarily Because of discount accretion and realized gains on sales of Legacy Non-Agency MBS that were distributed as dividends.

Economic book value per ordinary share, a non-GAAP financial measure of MFA’s financial position that adjusts GAAP book value by the amount of unrealized mark to market gains on residential whole loans held at carrying value for GAAP reporting, was $7.44 at December 31, 2019. Economic book value increased marginally during the quarter and by about 1% during 2019.

On January 31, 2020, MFA paid its fourth quarter 2019 dividend of $0.20 per share of ordinary stock to shareholders of record as of December 30, 2019.

Economic return (a measure of changes in MFA’s GAAP book value plus dividends for a period) was 2.1% for the fourth quarter and 9.7% for the full year. When calculated using Economic book value, economic return was 3.1% for the fourth quarter and 12.1% for the full year.

MFA’s Legacy Non-Agency MBS had a face amount of $1.6B with an amortized cost of $1.0B and a net purchase discount of $526.6M at December 31, 2019.  This discount consists of a $436.6M credit reserve and other-than-temporary impairments and a $90.0M net accretable discount.  We believe this credit reserve appropriately factors in remaining uncertainties regarding underlying mortgage performance and the potential impact on future cash flows.  Including the impact of bond redemptions, this portfolio generated a yield of 14.76% for the quarter.  Eliminating the impact of these redemptions, the portfolio generated a yield in the fourth quarter of 10.60%.  The portfolio continues to outperform our credit assumptions and has underlying mortgage loans that are on average nearly fourteen years seasoned and only 10.5% are presently 60 or more days delinquent.

As of December 31, 2019, the Agency MBS portfolio totaled $1.7B, had an amortized cost basis of 103.9% of par and generated a yield of 2.38% for the fourth quarter.  At the end of the fourth quarter, MFA held about $635.0M of RPL/NPL MBS.  These securities had an amortized cost basis of 99.9% of par and generated a yield of 5.17% for the quarter.  In addition, our investments in MSR-related assets at December 31, 2019 totaled $1.2B and generated a yield of 4.88% for the fourth quarter.  Our investments in CRT securities totaled $255.4M at December 31, 2019, and generated a yield of 3.98% for the fourth quarter.  During the quarter we opportunistically sold residential mortgage securities for $169.8M , realizing gains of $12.0M .  Sale activity included $123.3M of CRT securities that realized gains of $3.0M , of which $2.5M had been recorded in previous periods as unrealized gains as we had elected fair value accounting on these securities.

For the three months ended December 31, 2019, MFA’s costs for compensation and benefits and other general and administrative expenses were $12.7M, or an annualized 1.50% of stockholders’ equity as of December 31, 2019.

MFA Financial, Inc. noticed change of 216.67% to $1.14 along volume of 227398896 shares in recent session compared to an average volume of 10278K. MFA’s shares are at -85.46% for the quarter and driving a -84.45% return over the course of the past year and is now at -85.10% since this point in 2018.

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