Ellington Financial Inc. Common Stock

Good morning, ladies and gentlemen. Welcome to the Ellington Financial second quarter 2026 earnings call. Today's call is being recorded and 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. And lastly, if you should require operator assistance, please press star zero. I will now turn the call over to Mr. Ala-Deen Shilleh, Associate General Counsel and Secretary. Please go ahead, Mr. Shilleh.

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. The company undertakes no obligation to update these forward-looking statements. Joining me today are Larry Penn, Chief Executive Officer of Ellington Financial, Mark Tecotzky, 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 endnotes in the presentation. With that, I'll hand it over to Larry.

Thanks, Ala-Deen. Good morning, everyone, and thank you for joining us today. I'll begin on slide three of the presentation. Ellington Financial delivered yet another terrific quarter, continuing the momentum we have built over the past several years. Strong performance across our diversified platform once again drove strong GAAP earnings, adjusted distributable earnings well above our dividend, and also drove a further increase in book value per share. For the quarter, we generated GAAP net income of 43 cents per share, ADE of 60 cents per share, and an annualized economic return of 13.6%. These results reflected excellent securitization execution continued outstanding results at Longbridge, solid contributions from our other loan origination partners, and continued strong credit performance across our loan portfolios. Meanwhile, the financing spreads on our credit lines continue to narrow, which is providing an additional tailwind to our results. Importantly, all these drivers reinforce one another. Strong Loan Sourcing supports capital deployment and securitization volume. Through our securitization executions, we create attractive retained investments that help build our future earnings power, we release capital for redeployment, and we replace short-term financing with more stable non-mark-to-market funding. Moreover, our securitizations benefit greatly from increasing scale, as our larger and more frequent transactions continue to expand our investor base and have improved our execution levels over time. Meanwhile, strong loan credit performance supports the yields on our retained investments and also sustains and broadens the institutional investor demand for our securitizations. Finally, the profitability and market share growth of our originator affiliates contribute directly to our earnings while also expanding the flow of loans available to our investment portfolio. We saw this dynamic play out repeatedly during the quarter. Ellington's proprietary residential loan portal, where we lock in loans for more than 40 unique sellers, is now generating more than $15 million of loan purchases per day for a pace of around $4 billion annually. This portal supplied a significant portion of the approximately $2 billion of loans we securitized during the quarter. And of course, we have Longbridge, which supplies their expanding pipeline of proprietary reverse mortgage loans for our investment and securitization. Foundational to all of this is Ellington's well-known and long-standing focus on proprietary research, data, and modeling capabilities. A full 20% of Ellington's employees are dedicated to research and technology, and recent advances in AI are further enhancing the output of that team. Ellington's research and analytics help shape the loans we originate The underwriting standards and loan programs we support, the risks we choose to retain and those we choose to offload or hedge, and the way we manage our liquidity. Some of this is clearly visible in our credit statistics, as shown on slide 14. As you can see on that slide, inception to date cumulative realized credit losses were a mere 17 basis points on approximately $20.4 billion of residential mortgage loan fundings. and just 39 basis points on more than $2.5 billion of commercial mortgage bridge loan originations. Keep in mind, these are cumulative loss amounts with the annualized ratios being far lower. This credit performance spans multiple market cycles, including COVID, the 2022 interest rate sell-off and the more recent commercial real estate downturn and reflect not only the quality of our underwriting at loan origination, but also the effectiveness of our asset management and loan workout capabilities. The same discipline is evident in our securitizations. Our EFMT non-QM shelf has continued to rank among the strongest in its cohort for both low delinquencies and controlled prepayment speeds. These drivers enhance the yields on the retained tranches we invest in while also helping reinforce the liquidity and reputation of the EFMT franchise. They also demonstrate how Ellington's competitive advantage in research and underwriting can translate into stronger credit outcomes and better investment performance. Longbridge had another standout quarter. Originations were up 38% year over year, margins remained healthy, securitization executions improved, and servicing continued to add meaningfully to the bottom line. Longbridge remains one component of EFC's much broader platform, but its performance demonstrates the value that can be created when sourcing, analytics, financing, securitization, and servicing all work together. With that, please turn to slide five, and I'll hand the call over to JR to walk through our financial results in more detail.