Ellington Financial Inc. Common Stock

Thank you. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Alaael-Deen Shilleh, 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. The company undertakes no obligation to update these forward-looking statements. Joining me today are Larry Penn, Chief Executive Officer and President of Ellington Financial, Mark Tecotzky, Co-Chief Investment Officer, and J.R. Herlihy, Chief Financial Officer. Our 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, Ala-Deen. and good morning everyone. I'll begin on slide three of the presentation. In the third quarter, Ellington Financial delivered strong results despite a challenging market environment. We generated gap year income of 31 cents per share and an annualized economic return of 9.4%. Our adjusted distributable earnings of 45 cents per share again exceeded our 39 cent quarterly dividend. And we preserved book value per share even if interest rates moved sharply higher and yield spreads widened late in the quarter. Our interest rate and credit hedges cushioned the late quarter selloff, bolstering our already ample liquidity reserves and helping preserve book value. Meanwhile, our diversified investment portfolio and origination platforms provided multiple sources of earnings. Key earnings contributors for the quarter included our retained IOs from non-QM and agency eligible securitizations, which perform well when interest rates rise and repayments slow, along with commercial mortgage bridge loans, corporate credit, and our originator investments, particularly Lendsure, which delivered another standout quarter. Credit performance in our investment portfolio also strengthened in the quarter, with delinquencies declining and cumulative realized losses remaining low. JR will review the details. We continue to expand our asset sourcing capabilities. Our expanding residential loan portal generated $1.6 billion of loan purchases from 57 sellers during the quarter. Together with loan flow from Longbridge and our other channels, the portal supported net portfolio growth even as we continued to securitize loans. Meanwhile, Longbridge remained solidly profitable, supported by higher origination volumes and significant interest rate hedging gains. The quarter would have been even stronger at Longbridge But as interest rates rose sharply, a competitor temporarily held its offering rates down to defend its market share. Industry-wide origination margins compressed as a result. But with offering rates finally repricing higher, origination margins at Longbridge are improving so far in the fourth quarter. Although Longbridge's contribution to earnings declined from the prior quarter, that prior quarter was extraordinarily strong, with two proprietary reverse securitizations completed. Moving now to our capital structure. In September, we issued $150 million in an add-on to our existing 7.38% senior unsecured notes. The offering came shortly after Moody's revised EFC's rating outlook to positive. We had initially launched a $100 million deal, but we were able to upsize that by 50% thanks to strong institutional demand, and the offering was priced at a yield spread over treasuries It was approximately 70 basis points tighter than last year's issuance. The add-on brought the series to $550 million outstanding, and that larger issue size and broader investor base has already significantly improved secondary market liquidity in the issue. The offering provided us with additional investment capacity ahead of the late quarter sell-off and advanced our ongoing strategy to replace short-term mark-to-market repo with long-term unsecured debt. Our recent common equity activity has reflected the same capital management discipline. In the first two months of the quarter, we raised approximately $34 million through our ATM and approximately 100% of book value per share. Following quarter end, as our stock sold off, we repurchased common stock at approximately 85% of our most recently reported book value. The window was brief, so we purchased just under $4 million of our stock but the repurchases were accretive to book value per share. We expect to take advantage of similarly accretive opportunities should they arise again, subject to market conditions. Also in September, we completed the acquisition of a controlling interest in Statebridge, a relatively small but quite diversified loan servicer. At September 30, Statebridge serviced approximately 15,000 loans, totaling nearly $2 billion in unpaid principal balance. Our objective is to leverage Ellington's data and work-out experience to help Statebridge become the premier special servicer in the mortgage space. Agency servicing is dominated by a few players with massive scale. For those mega-servicers, special servicing revenue just doesn't move the needle. However, we see an emerging need and great potential demand for a more focused special servicer. And for Ellington Financial, Statebridge's strategic value goes well beyond our share of their servicing profits. If Statebridge can optimize EFC's outcomes on delinquent loans and REO, that will help us deliver superior returns across credit cycles. With that, I'll hand the call over to J.R. to walk through our financial results in more detail. J.R.?