Ellington Residential Mortgage ( (EARN) ) has released its Q3 earnings. Here is a breakdown of the information Ellington Residential Mortgage presented to its investors.
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Ellington Credit Company, formerly Ellington Residential Mortgage REIT, is a financial company focused on investing in corporate collateralized loan obligations (CLOs), emphasizing mezzanine debt and equity tranches, reflecting a strategic shift from its previous concentration on mortgage-backed securities.
In its third-quarter 2024 earnings report, Ellington Credit Company announced a net income of $5.4 million, translating to $0.21 per share, alongside adjusted distributable earnings of $7.2 million, or $0.28 per share. The company has also seen an increase in its CLO portfolio and a dividend yield of 14.5% based on recent stock prices.
The company’s financial performance highlights include a significant increase in its CLO portfolio to $144.5 million, reflecting a strategic capital shift. The net interest margin was reported at 5.22%, with the credit portfolio showing a margin of 9.65%. The debt-to-equity ratio improved to 2.5:1, indicating reduced leverage. The company also reported a decrease in Agency RMBS holdings by 13%, aligning with its strategic focus on CLOs.
Ellington Credit Company’s strategic transformation is evident as it continues its transition towards a CLO-focused investment strategy, with plans to convert into a closed-end fund, subject to shareholder approval. The management’s outlook suggests optimism towards finding value and opportunities in the CLO market, leveraging its expertise to capitalize on market inefficiencies.
