EARN - Ellington Residential Mortgage Q4 earnings beat as inflation outlook eases

2023-03-06 16:40:24 ET

Ellington Residential Mortgage REIT ( NYSE: EARN ) stock gained 4.4% in Monday after-hours trading after the market for Agency residential mortgage-backed securities improved due to a calmer inflation outlook.

Q4 adjusted distributable EPS of $0.25,  topping the analyst estimate of $0.22, rose from $0.23 in Q3.

"Driven by a more benign outlook on inflation and Fed monetary policy, Agency RMBS rebounded sharply in the fourth quarter, following three consecutive quarters of underperformance," said CEO and President Laurence Penn. "Incrementally lower volatility and greater investor demand drove yield spreads tighter, particularly in November, and the year ended on a more positive note."

Book value of $8.40 per share at Dec. 31, 2022, which includes the effects of dividends of $0.24 per share in the quarter, vs. $7.78 at Sept. 30.

Q4 net interest margin of 1.37% increased from 1.28% in Q3.

Weighted average constant prepayment rate for the fixed-rate Agency specified pool portfolio of 6.1% vs. 9.8% in the prior quarter.

Cash and cash equivalents increased to $34.8M as of Dec. 31, 2022 compared with $25.4M as of Sept. 30. Other unencumbered assets of $2.9M increased from $2.6M as of Sept. 30.

Conference call on March 7 at 11:00 AM ET.

Earlier, Ellington Residential Mortgage REIT ( EARN ) non-GAAP EPS of $0.25 beats by $0.03.

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