Ellington Credit Company Reports Preliminary Fourth Quarter 2024 Results and Provides Conversion Update
Ellington Credit Company (NYSE: EARN) has released preliminary Q4 2024 results, reporting an estimated book value per share of $6.52-$6.54, including $0.24 in quarterly dividends. The company posted an estimated net loss of $(0.08)-$(0.06) per share, while Adjusted Distributable Earnings are expected at $0.26-$0.28 per share.
Total shareholders' equity is estimated at $195 million as of December 31, 2024. The company's portfolio composition shows significant changes, with CLO allocation increasing to 72% from 58% in the previous quarter. The CLO portfolio reached approximately $170 million, while the MBS portfolio stood at $510 million.
The company is proceeding with its planned conversion to a Delaware registered closed-end fund, focusing on corporate CLO investments, with completion expected by April 1, 2025.
Ellington Credit Company (NYSE: EARN) ha pubblicato i risultati preliminari per il quarto trimestre del 2024, riportando un valore contabile per azione stimato tra $6,52 e $6,54, inclusi $0,24 di dividendi trimestrali. L'azienda ha registrato una perdita netta stimata di $(0,08) - $(0,06) per azione, mentre si prevede che gli Utili Distribuibili Rettificati si attestino tra $0,26 e $0,28 per azione.
Il patrimonio totale degli azionisti è stimato in $195 milioni al 31 dicembre 2024. La composizione del portafoglio dell'azienda mostra cambiamenti significativi, con l'allocazione CLO che è aumentata al 72% dal 58% del trimestre precedente. Il portafoglio CLO ha raggiunto circa $170 milioni, mentre il portafoglio MBS si è attestato a $510 milioni.
L'azienda sta procedendo con la sua prevista conversione in un fondo chiuso registrato nel Delaware, concentrandosi sugli investimenti corporate CLO, con completamento previsto entro il 1° aprile 2025.
Ellington Credit Company (NYSE: EARN) ha publicado resultados preliminares del cuarto trimestre de 2024, reportando un valor contable por acción estimado entre $6.52 y $6.54, incluyendo $0.24 en dividendos trimestrales. La compañía registró una pérdida neta estimada de $(0.08) - $(0.06) por acción, mientras que se espera que las Ganancias Distribuibles Ajustadas se sitúen entre $0.26 y $0.28 por acción.
El patrimonio total de los accionistas se estima en $195 millones a fecha del 31 de diciembre de 2024. La composición de la cartera de la empresa muestra cambios significativos, con la asignación de CLO aumentando al 72% desde el 58% del trimestre anterior. La cartera de CLO alcanzó aproximadamente $170 millones, mientras que la cartera de MBS se situó en $510 millones.
La compañía está avanzando con su conversión planeada a un fondo cerrado registrado en Delaware, centrándose en inversiones corporativas en CLO, con la finalización prevista para el 1 de abril de 2025.
엘링턴 크레딧 컴퍼니 (NYSE: EARN)는 2024년 4분기 prelimin 결과를 발표하며, 주당 추정 장부가치를 $6.52에서 $6.54 사이로, 분기 배당금을 $0.24 포함하여 보고했습니다. 회사는 주당 $(0.08)에서 $(0.06) 사이의 추정 순손실을 기록했으며, 조정 가능 배당 수익은 주당 $0.26에서 $0.28로 예상됩니다.
2024년 12월 31일 기준 총 주주 자본은 $195 백만으로 추정됩니다. 회사의 포트폴리오 구성은 CLO 비율이 이전 분기의 58%에서 72%로 증가하는 등 상당한 변화를 보여줍니다. CLO 포트폴리오는 약 $170 백만에 이르렀고, MBS 포트폴리오는 $510 백만에 달했습니다.
회사는 기업 CLO 투자에 집중하기 위해 델라웨어에 등록된 폐쇄형 펀드로의 계획된 전환을 진행하고 있으며, 2025년 4월 1일까지 완료될 것으로 예상됩니다.
Ellington Credit Company (NYSE: EARN) a publié des résultats préliminaires pour le quatrième trimestre 2024, rapportant une valeur comptable estimée par action entre $6,52 et $6,54, incluant $0,24 de dividendes trimestriels. L'entreprise a enregistré une perte nette estimée de $(0,08) à $(0,06) par action, tandis que les Bénéfices Distribuables Ajustés devraient se situer entre $0,26 et $0,28 par action.
Le capital total des actionnaires est estimé à $195 millions au 31 décembre 2024. La composition du portefeuille de l'entreprise montre des changements significatifs, avec une allocation de CLO augmentant à 72% contre 58% au trimestre précédent. Le portefeuille CLO a atteint environ $170 millions, tandis que le portefeuille MBS s'élevait à $510 millions.
L'entreprise procède à sa conversion prévue en un fonds fermé enregistré au Delaware, se concentrant sur les investissements en CLO corporatifs, avec une finalisation attendue d'ici le 1er avril 2025.
Ellington Credit Company (NYSE: EARN) hat vorläufige Ergebnisse für das vierte Quartal 2024 veröffentlicht und berichtet von einem geschätzten Buchwert pro Aktie zwischen $6,52 und $6,54, einschließlich $0,24 an vierteljährlichen Dividenden. Das Unternehmen verzeichnete einen geschätzten Nettoverlust von $(0,08) - $(0,06) pro Aktie, während die bereinigten verteilbaren Erträge voraussichtlich zwischen $0,26 und $0,28 pro Aktie liegen werden.
Das gesamte Eigenkapital der Aktionäre wird zum 31. Dezember 2024 auf $195 Millionen geschätzt. Die Zusammensetzung des Portfolios des Unternehmens zeigt erhebliche Veränderungen, da die CLO-Zuteilung von 58% im vorherigen Quartal auf 72% gestiegen ist. Das CLO-Portfolio erreichte etwa $170 Millionen, während das MBS-Portfolio bei $510 Millionen lag.
Das Unternehmen setzt seine geplante Umwandlung in einen in Delaware registrierten geschlossenen Fonds fort, der sich auf Corporate-CLO-Investitionen konzentriert, mit Abschluss bis zum 1. April 2025.
- Adjusted Distributable Earnings of $0.26-$0.28 per share exceed quarterly dividend of $0.24
- CLO portfolio allocation increased significantly from 58% to 72% quarter-over-quarter
- Strategic transformation to closed-end fund structure progressing as planned
- Net loss of $(0.08)-$(0.06) per share in Q4 2024
- Book value per share shows potential decline (subject to final audit)
Insights
The preliminary Q4 2024 results highlight Ellington Credit's strategic transformation, with several noteworthy developments requiring careful analysis:
Portfolio Transformation: The significant increase in CLO allocation from
Financial Performance Metrics: The contrast between the quarterly net loss of $(0.06)-$(0.08) per share and Adjusted Distributable Earnings of
Strategic Implications: The pending conversion to a closed-end fund structure by April 2025 could offer several advantages: 1) Enhanced flexibility in CLO investment strategy without REIT constraints 2) Potentially more stable asset values due to reduced mark-to-market impact 3) Simplified tax structure under RIC status. However, investors should monitor potential risks including reduced portfolio diversification and increased exposure to corporate credit markets.
-
Book value per common share is estimated to be in the range of
$6.52 $6.54 $0.24 -
Net income (loss) per common share is estimated to be in the range of
$(0.08) $(0.06) -
Adjusted Distributable Earnings1 per common share is estimated to be in the range of
$0.26 $0.28 -
Total shareholders’ equity is estimated to be
$195 million -
CLO portfolio and MBS portfolio increased to approximately
$170 million $510 million -
Capital allocation2 to CLOs was approximately
72% as of December 31, 2024 as compared to58% as of September 30, 2024. - Expected conversion to a closed-end fund on or before April 1, 2025.
As previously announced, our shareholders approved the conversion to a
The above financial information is preliminary and subject to completion, including the completion of customary financial statement closing and review procedures for the quarter and year ended December 31, 2024. As a result, the preliminary results set forth above reflect our preliminary estimate with respect to such information, based on information currently available to management. Our actual financial results for the quarter ended December 31, 2024 may differ materially from these preliminary financial results, and may be outside the estimated ranges where applicable. Further, these preliminary estimates are not a comprehensive statement or estimate of our financial results for the quarter ended December 31, 2024. These preliminary estimates should not be viewed as a substitute for full financial statements prepared in accordance with GAAP and they are not necessarily indicative of the results to be achieved in any future period. Accordingly, you should not place undue reliance on these preliminary estimates.
These preliminary estimates, which are the responsibility of our management team, were prepared by our management team and are based upon a number of assumptions. Additional items that may require adjustments to these preliminary estimates may be identified and could result in material changes to these preliminary estimates. Preliminary estimates of results are inherently uncertain and we undertake no obligation to update this information. The preliminary financial information included in this press release has been prepared by, and is the responsibility of, our management team. PricewaterhouseCoopers LLP has not audited, reviewed, examined, compiled, nor applied agreed-upon procedures with respect to this preliminary financial information. Accordingly, PricewaterhouseCoopers LLP does not express an opinion or provide any other form of assurance with respect thereto.
Reconciliation of Adjusted Distributable Earnings to Net Income (Loss)
We present herein an estimated range of Adjusted Distributable Earnings per common share for the quarter ended December 31, 2024. We calculate "Adjusted Distributable Earnings" as net income (loss) adjusted for: (i) net realized and change in net unrealized gains and (losses) on securities, financial derivatives, and foreign currency transactions; (ii) net realized and change in net unrealized gains (losses) associated with periodic settlements on interest rate swaps; (iii) other income or loss items that are of a non-recurring nature, if any (iv) Catch-up Amortization Adjustment (as defined below); and (v) provision for income taxes. The Catch-up Amortization Adjustment is a quarterly adjustment to premium amortization or discount accretion triggered by changes in actual and projected prepayments on our Agency RMBS (accompanied by a corresponding offsetting adjustment to realized and unrealized gains and losses). The adjustment is calculated as of the beginning of each quarter based on our then-current assumptions about cashflows and prepayments, and can vary significantly from quarter to quarter.
Adjusted Distributable Earnings is a supplemental non-GAAP financial measure. We believe that the presentation of Adjusted Distributable Earnings provides information useful to investors, because: (i) we believe that it is a useful indicator of both current and projected long-term financial performance, in that it excludes the impact of certain current-period earnings components that we believe are less useful in forecasting long-term performance and dividend-paying ability; (ii) we use it to evaluate the effective net yield provided by our portfolio, after the effects of financial leverage; and (iii) we believe that presenting Adjusted Distributable Earnings assists investors in measuring and evaluating our operating performance, and comparing our operating performance to that of our peers. Our calculation of Adjusted Distributable Earnings may differ from the calculation of similarly titled non-GAAP financial measures by our peers, with the result that these non-GAAP financial measures might not be directly comparable; Adjusted Distributable Earnings excludes certain items, such as most realized and unrealized gains and losses, that may impact the amount of cash that is actually available for distribution.
In addition, because Adjusted Distributable Earnings is an incomplete measure of our financial results and differs from net income (loss) computed in accordance with
The following table reconciles, for the quarter ended December 31, 2024, our estimated range of Adjusted Distributable Earnings per common share to our estimated net income per common share, which we believe is the most directly comparable
|
|
Three-Month Period Ended December 31, 2024 |
||||||
|
|
Estimated Lower Bound |
|
Estimated Upper Bound |
||||
Net Income (Loss) |
|
$ |
(0.08 |
) |
|
$ |
(0.06 |
) |
Income tax expense (benefit) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
Net Income (Loss) before income taxes |
|
|
(0.09 |
) |
|
|
(0.07 |
) |
Adjustments: |
|
|
|
|
||||
Realized and unrealized (gains) losses, net(1) |
|
|
0.29 |
|
|
|
0.31 |
|
Strategic transformation costs and other adjustments(2) |
|
|
0.04 |
|
|
|
0.06 |
|
Adjusted Distributable Earnings |
|
$ |
0.26 |
|
|
$ |
0.28 |
|
(1) |
Includes realized and unrealized (gains) losses on securities and financial derivatives (excluding periodic settlements on interest rate swaps). |
|
(2) |
Includes strategic transformation costs, other expense adjustments as well as negative (positive) component of interest income represented by Catch-up Amortization Adjustment. |
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties. Actual results may differ from our beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are based on our beliefs, assumptions and expectations of our future operations, business strategies, performance, financial condition, liquidity and prospects, taking into account information currently available to us. These beliefs, assumptions, and expectations are subject to numerous risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations and strategies may vary materially from those expressed or implied in our forward-looking statements or from our beliefs, expectations, estimates and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as "believe," "expect," "anticipate," "estimate," "project," "plan," "continue," "intend," "should," "would," "could," "goal," "objective," "will," "may," "seek," or similar expressions or their negative forms, or by references to strategy, plans, or intentions. The following factors are examples of those that could cause actual results to vary from those stated or implied by our forward-looking statements: changes in interest rates and the market value of our investments, market volatility, changes in mortgage default rates and prepayment rates, our ability to borrow to finance our assets, our ability to pivot our investment strategy to focus on CLOs, a deterioration in the CLO market, our ability to utilize our net operating loss carryforwards, our ability to convert to a closed end fund/RIC, changes in government regulations affecting our business, our ability to maintain our exclusion from registration under the Investment Company Act of 1940, and other changes in market conditions and economic trends, such as changes to fiscal or monetary policy, heightened inflation, slower growth or recession, and currency fluctuations. Furthermore, as stated above, forward-looking statements are subject to risks and uncertainties, including, among other things, those described under Item 1A of our Annual Report on Form 10-K, which can be accessed through the link to our SEC filings under "For Investors" on our website (at www.ellingtoncredit.com) or at the SEC's website (www.sec.gov). Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected or implied may be described from time to time in reports we file with the SEC, including reports on Forms 10-Q, 10-K, and 8-K. New risks and uncertainties emerge from time to time, and it is not possible for us to predict or assess the impact of every factor that may cause our actual results to differ from those contained in any forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
This press release is not an offer to sell any securities and is not soliciting an offer to buy any securities. The information contained in this press release does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.
In addition, this press release is not a solicitation of votes or proxies. Any such solicitation will only be made pursuant to a proxy statement or other appropriate proxy materials filed with the SEC and labeled as such.
About Ellington Credit Company
Ellington Credit Company (the "Company"), formerly known as Ellington Residential Mortgage REIT, was initially formed as a real estate investment trust ("REIT") that invested primarily in residential mortgage-backed securities ("MBS"). On March 29, 2024, the Company's Board of Trustees approved a strategic transformation of the Company's investment strategy to focus on corporate CLOs, with an emphasis on mezzanine debt and equity tranches. In connection with this transformation, the Company revoked its election to be taxed as a REIT (and therefore to be taxed as a C-Corp) effective January 1, 2024, and rebranded as Ellington Credit Company. At a special meeting on January 17, 2025, shareholders overwhelmingly approved the Company's conversion to a
__________________________
1 Adjusted Distributable Earnings is a non-GAAP financial measure. See "Reconciliation of Adjusted Distributable Earnings to Net Income (Loss)" below for an explanation regarding the calculation of Adjusted Distributable Earnings.
2 Percentages shown are of net assets, as opposed to gross assets deployed.
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Investors:
Ellington Credit Company
Investor Relations
(203) 409-3773
info@ellingtoncredit.com
or
Media:
Amanda Shpiner/Grace Cartwright
Gasthalter & Co.
for Ellington Credit Company
(212) 257-4170
Ellington@gasthalter.com
Source: Ellington Credit Company
FAQ
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What is EARN's estimated Adjusted Distributable Earnings for Q4 2024?
