MFA Financial, Inc.

Thank you for standing by, and welcome to the MFA third quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. If you should require assistance during the call, please press star, then zero. As a reminder, today's conference is being recorded. I would now like to turn the conference over to our first speaker, Mr. Hal Schwartz. Please go ahead.

Thank you, operator, 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 31st, 2023, 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, expressed, or implied in any forward-looking statements it makes. For additional information regarding MFA's use of forward-looking statements, please see the relevant disclosure in the press release announcing MFA's third quarter 2024 financial results. Thank you for your time. I would now like to turn this call over to MFA's CEO, Craig Knutson.

Thank you, Hal. Good morning, everyone. And thank you for joining us for MFA Financial's third quarter 2024 earnings call. With me today are Brian Wolfson, our president and chief investment officer, Mike Roper, our CFO, and other members of our senior management team. I'll begin with a high-level review of the third quarter market environment, touch on some of our results, activities, and opportunities, and then I'll turn the call over to Mike to review our financials in more detail, followed by Brian, who will review the portfolio, financing, Lima One, and risk management before we open up the call for questions. The Federal Reserve Board decreased the federal funds rate target by 50 basis points at their meeting on September 18th. This rate cut While more than the 25 basis points expected by many market participants was most noteworthy as a clear signal that the Fed has now embarked on an easing cycle. For levered fixed income investors, this is a welcome development after a very challenging two and a half year period of restrictive monetary policy and the accompanying inverted yield curve. Economic and labor market data has been somewhat mixed over the last few months, which suggests that the easing cycle may proceed more slowly than originally anticipated. But Chair Powell has been clear that a recalibration is merited and a return to a neutral level of Fed funds is in order. Although it remains to be seen how long this easing cycle lasts and how much the Fed ultimately cuts rates, this is a clear and refreshing tailwind for our business. During the third quarter, we announced some management changes, naming Brian Wilson President of MFA, in addition to his role as Chief Investment Officer, and naming Lori Samuels as Chief Loan Operations Officer. Both Brian and Lori joined MFA in 2010 and have played many key roles over the last 15 years. These important promotions are very much deserved and are also a testament to our deep and talented bench of senior executives. MFA turned in solid results in the third quarter of 2024 with distributable earnings of 37 cents, book value that was up about 1%, and an economic return of 3.3%. We acquired over 550 million of loans with an average coupon of 9.4% and added just shy of 300 million agencies at quite attractive yields. We continue to utilize securitizations to fund our assets, closing two deals in the third quarter and two additional deals subsequent to the end of Q3. Our most recent deal, priced just last week, was our first rated deal for residential transition loans originated by Lima One. This rated construct materially improves our funding costs for these high-yielding assets. At Lima One, now led by new CEO Josh Woodward, some recent management changes, together with a refocus away from multifamily originations and some sales channel consolidation, have had a not unexpected impact on origination volume as we funded $329 million of business purpose loans in the third quarter. Non-QM acquisitions in Q3 were relatively flat to Q2, but we added more agencies in Q3, and it turns out that our total asset acquisitions for the third quarter were almost identical to the second quarter. The management team in Lima 1 is working hard to fill some personnel vacancies, including sales positions. And MFA's asset management team is actively engaged with Lima's servicing group, to work through some of the delinquent loans, evaluate underwriting guidelines, and institute process improvements to strengthen the platform for the future. As we have said repeatedly, Lima One is an important differentiator for MFA, as it provides us with the ability to organically create our own high-yielding assets in the business purpose space. Lima One underwrites our loans and borrowers, services the loans, and manages construction draws on transitional loans. This is another important differentiator because we are not reliant on third parties to resolve loans that go delinquent. And finally, we have a unique and instant feedback loop with loan originations at Lima One. Because we are intimately involved with the securitization markets and more recently a few loan sales to third parties, we were able to adjust loan pricing in real time to reflect market developments. In this welcome new period of lower rates and a steepening yield curve, we are optimistic about our business model and excited about the opportunities it will generate for Lima One and MFA. And I'll now turn the call over to Mike Roper to discuss our financial results. Thanks, Craig.