MFA Financial, Inc.

Greetings and welcome to the MSA Financial fourth quarter 2024 earnings conference call and webcast. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Hal Schwartz, General Counsel. 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 reflects 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, 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 fourth quarter 2024 financial results. Thank you for your time. I would now like to turn this call over to MFA's CEO, Craig Knudson.

Thank you, Hal. Good morning, everyone, and thank you for joining us for MFA Financial's fourth quarter 2024 earnings call. With me today are Brian Wilson, 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 fourth quarter market environment and then review 2024 highlights. Following my prepared remarks, I'll turn the call over to Mike to review our financial results in more detail, followed by Brian, who will review our portfolio, financing, Lima One, and risk management before we open up the call for questions. Fixed income markets reversed direction in the fourth quarter of 2024 after rallying strongly at the end of the third quarter following the Fed's long-awaited rate cut of 50 basis points on September 18th. Despite two additional 25 basis point rate reductions in November and December, yields ground steadily higher during the fourth quarter, with only a short-lived rally after the election in November. Thankfully, the yield curve steepened in the fourth quarter, with two-year yields rising 60 basis points, while 10-year rates rose nearly 80 basis points. The economy has remained resilient, the labor market continues to show strength, and inflation The labor market continues to show strength, and inflation, while down materially from the highs, still exhibits a persistent stickiness. A shift in tone from the Fed in the face of this data, together with market concerns about deficits and anticipated Treasury supply, pushed rates higher in the fourth quarter. This sell-off in rates led to a modest economic book value decline for MFA in Q4 of a little less than 4%. we remained active during the quarter, adding over $700 million in loans, non-QM and BPL, and over $450 million of agencies. We executed three securitizations in Q4 on over $1 billion of loans, including RTL, non-QM, and NPL loans. On a sad note, we mourn the sudden and unexpected passing of Board Member Frank Ulrich on December 2nd. Our management team and board members will miss Frank's valuable insights, sage advice, and quick wit. He was a trusted colleague and a dear friend of mine for over 40 years. Our deepest sympathies are with his wife Mary and their large family. For the year 2024, we grew our assets from $10.8 billion to $11.4 billion, including an increase in our agency book of over $800 million, ending the year at $1.4 billion. We believe that this agency position provides an attractive return profile while increasing our liquidity and enabling us to easily complement the volume and timing of our loan acquisitions, which can vary month to month and quarter to quarter. Our recourse leverage remained at 1.7 times at year end, same as at the end of 2023. This is primarily due to our reliance on securitization, which provides fixed and term non-recourse financing. On page 21 in the appendix of our earnings deck, we show all of our outstanding securitizations, including outstanding amounts, weighted average coupon on sold bonds, and the callability of each deal. We believe that this is an underappreciated optionality that we have to call these securitizations when it makes sense to unlock additional liquidity and increase ROEs. We also issued two $25 par bonds early in 2024, totaling $190 million at an average coupon of just under 9%. These are five-year bonds, but they're callable at par after two years, specifically February and August of 2026. We also paid $1.40 in common dividends in 2024, which is the same as 2023. And the tax treatment of a substantial portion of these dividends is somewhat unique and we believe confers a material benefit to shareholders, which Mike Roper will explain in more detail. Finally, as we discussed on our third quarter earnings call in November, we affected some management changes both at Lima One and at MFA during 2024, and we are excited and confident in our leadership team for 2025 and the years ahead. And I'll now turn the call over to Mike Roper to talk about financial results.