Ellington Financial Inc. Common Stock

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Ellington Financial second quarter 2025 earnings conference call. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode. The floor will be open for your questions following the presentation. If you would like to ask a question during that time, simply press star, then the number one on your telephone. If at any time your question has been answered, you may remove yourself from the queue by pressing star two. Lastly, if you should require operator assistance, please press star zero at any time. Now, at this time, it is my pleasure to turn the call over to Aladin Chalet, Associate General Counsel. Please go ahead, sir.

Thank you. Before we begin, I'd like to remind everyone that this conference call may include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical in nature and involve risks and uncertainties detailed in our annual and quarterly reports filed with the SEC. Actual results may differ materially from these statements, so they should not be considered to be predictions of future events. We undertake no obligation to update these forward-looking statements. Joining me today are Larry Penn, Chief Executive Officer of Allentine Financial, Mark Takosky, Co-Chief Investment Officer, and J.R. Herlihy. Chief Financial Officer. Our second quarter earnings conference call presentation is available on our website, ellingtonfinancial.com. Today's call will track that presentation, and all statements and references to figures are qualified by the important notice and end notes in the presentation. With that, I'll hand it over to Larry.

Thanks, Aladin. Good morning, everyone, and thank you for joining us today. We'll begin on slide three of the presentation. Ellington Financial delivered an excellent second quarter with broad-based contributions from both our diversified investment portfolio and our loan origination platforms. For the quarter, Ellington Financial generated gap net income of $0.45 per share, equating to an annualized economic return of nearly 14%, with book value per share increasing quarter over quarter to $13.49. Meanwhile, Our adjusted distributable earnings per share increased sequentially by 8 cents to 47 cents, significantly exceeding our 39 cents of dividends per share. In a volatile but opportunity-rich second quarter, Ellington Financial once again demonstrated the strength and adaptability of its platform. Early in the quarter, as credit spreads widened amid tariff-related uncertainty, we were very well-positioned as we had a large credit hedge portfolio coming into the quarter. In recent periods, we have tended to increase our corporate credit hedges somewhat in response to tighter corporate credit spreads, and then monetize some of those credit hedges if spreads widen. During market-wide negative credit shocks, such as we saw in early April, our corporate credit hedges not only help stabilize our book value, but they also bolster our liquidity as we have daily access in cash to the mark-to-market gains on these positions. During the April sell-off, with markets dislocated and our liquidity position strong, we were well positioned to capitalize on the environment by adding attractively priced securities. That early April market volatility also helped guide our securitization activity. Following a first quarter in which we executed five well-timed securitizations, We temporarily paused issuance during early April, and then we resumed activity only after spreads had stabilized. Our patient approach was rewarded as we ended up completing a full six securitizations over the course of the second quarter at attractive levels. As a result of all this activity, our overall portfolio size remained roughly unchanged quarter over quarter. Securitizations, tactical sales, and steady principal repayments from our short-term loans were largely offset by opportunistic purchases and growth in our mortgage loan portfolios, particularly in non-QM, proprietary reverse, and commercial mortgage bridge. Turning back to our adjusted distributable earnings, as I noted, we reported a terrific 8-cent increase this quarter to 47 cents per share. That very strong result reflected both steady credit performance from our loan portfolio, as well as standout contributions from our loan origination platforms, most notably 13 cents in ADE contributions from Longbridge. Longbridge's strong quarter was driven by solid performance across all components of its business. Origination profits, driven by volume growth and stable margins in both HECM and proprietary reverse, securitization gains, reflecting a successful proper verse securitization transaction in May, and servicing income, driven by recurring MSR revenue and strong tail securitizations. We also benefited from notably strong performance from our non-QM originator affiliates, Lendsure and American Heritage, underpinned in each case by high origination volumes and continued solid operating margins. Given our equity stakes in these originators, their profitability contributed nicely to EFC's bottom line for the quarter. But more importantly, we continue to earn robust net interest income from the non-QM loans and retained non-QM tranches we hold on balance sheet, many of which continue to be sourced from these two affiliates of ours. Meanwhile, we continue to expand our strategic originator partnerships. During the quarter, we closed on another equity investment in a non-QM and RTL originator. This strategic investment was accompanied by our typical forward flow agreement with that originator, consistent with our strategy of securing ongoing access to high-quality loans at attractive pricing and on a predictable timeline. With that, I'll turn the call over to JR to walk through our financial results in more detail.