This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

MFA Financial's Management Presents At The Morgan Stanley Financials Conference (Transcript)

Stocks in this article: MFA

So since January of 2000 we’ve put up a 15.2% annual return, that’s assuming reinvestment of dividends. So we are pretty proud of that.

So, this is what we call our asset allocation table and this is how we look at the company. So yes, we are invested in Agency and Non-Agency RMBS and so you could look across our entire company and look at our balance sheet and say it looks like you are about three-and-a half times levered. But the reality is we think it makes more sense to split out the two businesses solely for the purposes of equity allocation and leverage. So you can see the first column here is Agency MBS, and then you can see that debt to equity ratio is 6.87. So again, probably fairly typically on our space, six to seven or six to eight times leverage is what you typically see on Agencies. On the Non-Agency side, you can see that our debt to equity ratio is a little less than two times. So again, three-and-a half maybe is the whole company, but – and so that would be people to say, you are lower leveraged than most other REITS. We really think that you have to split out the two different components.

But if you look across the bottom at the yield on average earning assets, and this is for the first quarter of this year, you can see that in Agencies, our average yield on interest earning assets was 3.15, which is actually pretty high and is extraordinarily high if you consider the fact that we don’t own any 30-year of fixed rate mortgages.

The primary reason for that is that many of those are older securities that we bought some time ago that have generated higher yields. However, the next line that average cost of funds on our Agency you see is 1.71, that’s actually very high and the primary reason for that is again, we have a legacy book and we have a legacy book of interest rate flops and many of those interest rate flops that are at very high cost rates will be rolling off.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs