MFA Financial, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the MFA Financial, Inc. Fourth Quarter Earnings Conference call. At this point, all the participant lines are in a listen-only mode. However, there will be an opportunity for your questions. If you'd like to ask a question, please press 1 then 0 at any point during the call. As a reminder, today's call is being recorded. I'll turn the call now to Mr. Harold Schwartz. Please go ahead, sir.

Thank you, John, and good morning, everyone. The information discussed on this conference call today may contain or refer to forward-looking statements regarding MFA Financial, Inc., which reflect management's beliefs, expectations, and assumptions as to MFA's future performance and operations. When used, statements that are not historical in nature, including those containing words such as will, believe, expect, anticipate, estimate, should, could, would, or similar expressions are intended to identify forward-looking statements. All forward-looking statements speak only as of the date on which they are made. These types of statements are subject to various known and unknown risks, uncertainties, assumptions, and other factors, including those described in MFA's annual report on Form 10-K for the year ended December 31, 2019, and other reports that it may file from time to time with the Securities and Exchange Commission. These risks, uncertainties, and other factors could cause MFA's actual results to differ materially from those projected Thank you for your time. I would now like to turn this call over to MFA's CEO and President, Craig Knutson. Thank you, Hal. Good morning, everyone.

I would like to thank you for your interest in and welcome you to MFA Financial's fourth quarter 2020 financial results webcast. Also dialed in with me today are Steve Yared, our CFO, Gudmundur Christiansen, and Bryan Wulfsohn, our co-chief investment officers, and other members of senior management. Before we begin, I want to again recognize our entire MFA team. 2020 was obviously a very challenging year on many levels. and our team powered through the adversity and persevered. There is no quit in this group. And I think we made extraordinary progress in the second half of 2020 and particularly in the fourth quarter. So the fourth quarter of 2020 on a macro level was very much an extension of the third quarter. Interest rate volatility was again muted and accommodative Fed monetary policy continued to provide support for risk assets with little indication that this will change materially in 2021. The short end of the curve remains firmly anchored, consistent with the lower for longer narrative. Two-year rates inched into the high teens very briefly in mid-November, but are barely in double digits so far in 2021. The yield curve does continue to surreptitiously steepen as the 10-year backed up 23 basis points in the fourth quarter and another almost 45 since year-end. With twos, tens, and approximately 125 basis points, This hardly qualifies as a steep yield curve by historical standards, but it has steepened by about 45 basis points since the end of the year.