Company Announcements

NEW YORK--(BUSINESS WIRE)--Feb. 18, 2026-- MFA Financial, Inc. (NYSE:MFA) today provided its financial results for the fourth quarter and full year ended December 31, 2025:

Fourth Quarter 2025 Financial Results:

• MFA generated GAAP net income to common stockholders and participating securities for the fourth quarter of $43.6 million, or $0.42 per basic and diluted common share.
• Distributable earnings, a non-GAAP financial measure, were $27.8 million, or $0.27 per basic common share. MFA paid a regular cash dividend of $0.36 per common share on January 30, 2026.
• GAAP book value at December 31, 2025 was $13.20 per common share. Economic book value, a non-GAAP financial measure, was $13.75 per common share.
• Total economic return was 3.1% for the fourth quarter.
• MFA closed the quarter with unrestricted cash of $213.2 million.

Full Year 2025 Highlights:

• GAAP net income to common stockholders and participating securities was $136.5 million, or $1.31 per basic common share and $1.30 per diluted common share, up from $86.4 million, or $0.83 per basic common share and $0.82 per diluted common share, in 2024.
• Distributable earnings, a non-GAAP financial measure, were $104.0 million, or $1.00 per common share in 2025. MFA paid quarterly dividends of $0.36 per common share throughout 2025, totaling $1.44 per share.
• Total economic return was 9.0% for 2025.
• Loan acquisition activity of $2.7 billion during 2025 included $1.8 billion of Non-QM loans, $655.7 million of Single-family transitional loans (including draws), $235.4 million of Single-family rental (SFR) loans and $14.8 million of draws on previously originated Multifamily transitional loans.
• MFA completed five securitizations in 2025 collateralized by $1.8 billion unpaid principal balance (UPB) of Non-QM loans.
• 60+ day delinquencies (measured as a percentage of UPB) for MFA’s residential loan portfolio declined to 7.1% at December 31, 2025 from 7.5% at December 31, 2024.
• MFA purchased $2.1 billion of Agency MBS throughout 2025.
• Net interest income rose to $231.1 million from $202.7 million in 2024.
• Lima One mortgage banking income totaled $22.8 million.
• MFA repurchased 1,026,117 shares of common stock during 2025.

“We continued to execute on our strategic initiatives during the fourth quarter,” said Craig Knutson, MFA’s Chief Executive Officer. “We acquired $1.2 billion of Agency MBS and $443 million of Non-QM loans, and Lima One originated $226 million of new business purpose loans. We deployed approximately $100 million of excess cash on our balance sheet into our target asset classes. In addition, we continued to reduce operating expenses, resolve non-performing loans, grow the Lima One sales force and repurchase our common stock at accretive levels. These efforts resulted in a total economic return of 3.1% for the quarter and 9.0% for the year.”

Reflecting on the year, Bryan Wulfsohn, President and Chief Investment Officer, added: “We made approximately $4.8 billion of investments in our target asset classes throughout 2025. We significantly grew our Non-QM loan and Agency MBS portfolios, and we profitably sold $219 million of newly-originated rental term loans to third-party investors. Although our Distributable earnings this year were weighed down by credit losses realized on certain legacy business purpose loans, we believe our investment portfolio is well-positioned to deliver strong returns moving forward.”

Q4 2025 Portfolio Activity

• MFA’s residential investment portfolio rose to $12.3 billion at December 31, 2025 from $11.2 billion at September 30, 2025.
• MFA added $1.2 billion of Agency MBS during the quarter, bringing its Agency MBS position to $3.3 billion.
• Non-QM loan acquisitions totaled $443.5 million, bringing MFA’s Non-QM portfolio to $5.3 billion at December 31, 2025.
• Lima One funded $145.3 million of new business purpose loans with a maximum loan amount of $226.4 million. Further, $69.5 million of draws were funded on previously originated Transitional loans. Lima One generated $5.7 million of mortgage banking income.
• Portfolio runoff was $735.0 million. Asset dispositions included $45.4 million of newly-originated SFR loans, $24.6 million of credit risk transfer (CRT) securities and $4.0 million of delinquent Transitional loans. MFA also sold 114 REO properties in the fourth quarter for aggregate net proceeds of $22.4 million.
• 60+ day delinquencies (measured as a percentage of UPB) for MFA’s residential loan portfolio increased to 7.1% at December 31, 2025 from 6.8% at September 30, 2025.
• MFA completed one loan securitization during the quarter collateralized by $445.9 million UPB of Non-QM loans, bringing its total securitized debt to approximately $6.3 billion.
• MFA added a net $706.9 million of new interest rate hedges, maintaining the estimated net effective duration of its investment portfolio at 0.98 years.
• MFA’s Debt/Net Equity Ratio was 6.0x while recourse leverage was 2.5x at December 31, 2025.

New Stock Repurchase Program

MFA also announced today that its Board of Directors has authorized a new $200 million stock repurchase program for the Company’s common stock, which will be in effect through the end of 2028. The new program supersedes the Company’s prior repurchase program, which expired at the end of 2025.

The new stock repurchase program does not require the purchase of any minimum number of shares. The timing and extent to which MFA repurchases its shares will depend upon, among other things, market conditions, share price, liquidity, regulatory requirements and other factors, and repurchases may be commenced or suspended at any time without prior notice. Acquisitions under the stock repurchase program may be made in the open market, through privately negotiated transactions or block trades or other means, in accordance with applicable securities laws (including, in MFA’s discretion, through the use of one or more plans adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended).

Webcast

MFA Financial, Inc. plans to host a live audio webcast of its investor conference call on Wednesday, February 18, 2026, at 11:00 a.m. (Eastern Time) to discuss its fourth quarter 2025 financial results. The live audio webcast will be accessible to the general public over the internet at http://www.mfafinancial.com. Earnings presentation materials will be posted on the MFA website prior to the conference call and an audio replay will be available on the website following the call.

About MFA Financial, Inc.

MFA Financial, Inc. (NYSE: MFA) is a leading specialty finance company that invests in residential mortgage loans, residential mortgage-backed securities and other real estate assets. Through its wholly-owned subsidiary, Lima One Capital, MFA also originates and services business purpose loans for real estate investors. MFA has distributed over $5 billion in dividends to stockholders since its initial public offering in 1998. MFA is an internally-managed, publicly-traded real estate investment trust.

The following tables present MFA’s asset allocation as of December 31, 2025, and the yield on average interest-earning assets, average cost of funds, impact of net Swap carry and net interest rate spread for the various asset types.

Table 1 - Asset Allocation

Table 2 - Net Interest Spread

The following table presents the activity for our residential mortgage asset portfolio for the three months ended December 31, 2025:

Table 3 - Investment Portfolio Activity Q4 2025

The following tables present information on our investments in residential whole loans:

Table 4 - Portfolio Composition/Residential Whole Loans

Table 5 - Yields and Average Balances/Residential Whole Loans

Table 6 - Credit-related Metrics/Residential Whole Loans

Table 7 - Shock Table

The information presented in the following “Shock Table” projects the potential impact of sudden parallel changes in interest rates on our portfolio, including the impact of Swaps and securitized debt and other fixed rate debt, based on the assets in our investment portfolio as of December 31, 2025. All changes in value are measured as the percentage change from the projected portfolio value under the base interest rate scenario as of December 31, 2025.

Segment Reporting

At December 31, 2025, the Company’s reportable segments include (i) mortgage-related assets and (ii) Lima One. The Corporate column in the table below primarily consists of corporate cash and related interest income, investments in loan originators and related economics, general and administrative expenses not directly attributable to Lima One, interest expense on unsecured senior notes, securitization issuance costs, and preferred stock dividends.

The following tables summarize segment financial information, which in total reconciles to the same data for the Company as a whole:

Reconciliation of GAAP Net Income to non-GAAP Distributable Earnings

“Distributable earnings” is a non-GAAP financial measure of our operating performance, within the meaning of Regulation G and Item 10(e) of Regulation S-K, as promulgated by the Securities and Exchange Commission. Distributable earnings is determined by adjusting GAAP net income/(loss) by removing certain unrealized gains and losses, primarily on residential mortgage investments, associated debt, and hedges that are, in each case, accounted for at fair value through earnings, certain realized gains and losses, as well as certain non-cash expenses and securitization-related transaction costs. Realized gains and losses arising from loans sold to third-parties by Lima One shortly after the origination of such loans are included in Distributable earnings. The transaction costs are primarily comprised of costs only incurred at the time of execution of our securitizations and include costs such as underwriting fees, legal fees, diligence fees, bank fees and other similar transaction related expenses. These costs are all incurred prior to or at the execution of our securitizations and do not recur. Recurring expenses, such as servicing fees, custodial fees, trustee fees and other similar ongoing fees are not excluded from Distributable earnings. Management believes that the adjustments made to GAAP earnings result in the removal of (i) income or expenses that are not reflective of the longer term performance of our investment portfolio, (ii) certain non-cash expenses, and (iii) expense items required to be recognized solely due to the election of the fair value option on certain related residential mortgage assets and associated liabilities. Distributable earnings is one of the factors that our Board of Directors considers when evaluating distributions to our shareholders. Accordingly, we believe that the adjustments to compute Distributable earnings specified below provide investors and analysts with additional information to evaluate our financial results.

Distributable earnings should be used in conjunction with results presented in accordance with GAAP. Distributable earnings does not represent and should not be considered as a substitute for net income or cash flows from operating activities, each as determined in accordance with GAAP, and our calculation of this measure may not be comparable to similarly titled measures reported by other companies.

The following table provides a reconciliation of our GAAP net income/(loss) used in the calculation of basic EPS to our non-GAAP Distributable earnings for the quarterly periods below:

Reconciliation of GAAP Book Value per Common Share to non-GAAP Economic Book Value per Common Share

“Economic book value” is a non-GAAP financial measure of our financial position. To calculate our Economic book value, our portfolios of Residential whole loans and securitized debt held at carrying value are adjusted to their fair value, rather than the carrying value that is required to be reported under the GAAP accounting model applied to these financial instruments. These adjustments are also reflected in the table below in our end of period stockholders’ equity. Management considers that Economic book value provides investors with a useful supplemental measure to evaluate our financial position as it reflects the impact of fair value changes for all of our investment activities, irrespective of the accounting model applied for GAAP reporting purposes. Economic book value does not represent and should not be considered as a substitute for Stockholders’ Equity, as determined in accordance with GAAP, and our calculation of this measure may not be comparable to similarly titled measures reported by other companies.

The following table provides a reconciliation of our GAAP book value per common share to our non-GAAP Economic book value per common share as of the quarterly periods below: