OLD GREENWICH, Conn. - Ellington Financial Inc. (NYSE: NYSE:EFC), a $1.1 billion market cap financial firm currently trading below its InvestingPro Fair Value, has completed a $243 million securitization backed by a pool of proprietary reverse mortgage loans, the company announced today. The loans were originated by Longbridge Financial, LLC, a fully owned subsidiary of Ellington Financial, which will also continue to service the loans.
The debt tranches from the securitization received ratings from Morningstar DBRS, with the highest tranches achieving AAA(sf) ratings. In line with credit risk retention regulations, Ellington Financial has retained certain portions of the securitization.
Ellington Financial is known for its diverse investment portfolio, which includes various financial assets such as residential and commercial mortgage loans, mortgage-backed securities, and mortgage servicing rights. The company also holds consumer loans, asset-backed securities, collateralized loan obligations, and investments in loan origination companies, among other financial instruments. With a strong current ratio of 5.96 and a notable dividend yield of 12.7%, Ellington Financial has maintained dividend payments for 15 consecutive years. InvestingPro analysis reveals several additional positive indicators for investors seeking detailed insights.
Longbridge Financial, the originator of the loans backing this securitization, specializes in home equity conversion mortgage loans (HECMs), and is recognized as a Title II, non-supervised direct endorsement mortgagee by the U.S. Department of Housing and Urban Development (NS:HUDC). It is also an approved issuer of HECM-backed mortgage-backed securities. Longbridge offers proprietary reverse mortgage loan products, primarily jumbo loans in areas with high property values.
This transaction reflects Ellington Financial's ongoing strategy to invest in and manage a diverse range of financial assets, leveraging its subsidiary Longbridge Financial's expertise in originating and servicing reverse mortgage loans. Trading at an attractive P/E ratio of 9.14, the company maintains a FAIR financial health score according to InvestingPro comprehensive analysis, which offers investors access to detailed financial metrics and expert insights through its Pro Research Report.
The information in this article is based on a press release statement from Ellington Financial Inc.
In other recent news, Ellington Financial Corp reported a rise in its adjusted distributable earnings to $0.40 per share in the third quarter of 2024, up from $0.33 in the previous quarter. Significant contributions came from its reverse mortgage segment, Longbridge, which contributed $0.12 per share, and a 26% growth in the company's investment portfolio. Cash and unencumbered assets stood at $765 million, and its total loan credit portfolio increased by 19% to $3.25 billion.
These recent developments point to a solid performance for Ellington Financial, which completed three securitizations since July and has 16 non-QM securitizations since 2017. The company also expressed optimism about future securitizations and the performance of its credit portfolio, particularly in a declining interest rate environment.
Looking ahead, Ellington Financial plans to release its estimated book value per share for October and has outlined plans for four to six non-QM securitizations in the coming year, market conditions permitting. Despite slight increases in commercial mortgage delinquencies and write-downs in the consumer loan portfolio, the company remains positioned conservatively to mitigate post-election market volatility.
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