MFA - Earnings call transcript Q3 2017

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the MFA Financial Inc.

Third Quarter Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. to conference like host, to now Schwartz. Harold would turn over the your I

Harold Schwartz

Good The similar performance to morning, this operator. as file reflect you, that Thank those everyone. materially and expectations When implied exchange uncertainties These XX-K and today MFA Inc, forward-looking various assumptions contain management's which regarding beliefs, makes. conference MFA's information unknown and ended risks, may These or operations. statements, to anticipate, risks, the it refer nature, are reports such as future words forward-looking statements used, made. are forward-looking including securities actual estimate, the annual Financial could, statements which statements and forward-looking assumptions in year only XXXX, those the known call in should, including on discussed statements that intended are date as not containing expressions would on report All to types statements. of or other believe, factors identify historical MFA's expect, described and on for are may expressed time-to-time December it or MFA's in Form and commission. speak those to cause well, projected, subject XX, results other uncertainties, from and they factors, any with could from differ of other the

the disclosure to time. Officer, to Thank regarding like information release results. Chief I call in relevant additional MFA's MFA's For Knutson. press this over now the third statements, use turn would forward-looking your Craig XXXX Executive see announcing of for you financial MFA's quarter please

Craig Knutson

to XXXX CFO; Results Senior Senior Vice Good me Management. are and Webcast. Financial Third to Vice Yarad, President; and Vice Harold. MFA's President you members General morning, Wolfson, welcome Thank Steve Senior other Brian Schwartz, Hal everyone. Counsel; of Senior With today I'd Kristjansson, President; Gudmundur like you, Quarter

Bill us can an to of strong big kind support third attractively the the and us. and to and Gorin August. we're quarter pricing on equity personally, acknowledge loss to is We by I'd team. mortgage in of analyst the provided like active to MFA assets. our it all the team transacted to suspended we had move and comfort XXXX, other find to presentation. and now universe. multiple begin, mortgage absence the is monetary passing challenging to within us investors, the continued With Bill's Before as After you and MFA management shareholders, credit assets, successfully residential priced grateful to Fed fronts a

Our investment team has find worked opportunities, and while price tirelessly to maintaining discipline.

$X.XX Our $X.XX per the earnings from down X due was third primarily in quarter, share, to quarter second factors.

prices, nearly as to million possible is income income in damage this was $XX Harvey, $X modest, were quarter, to second quarter. the price in by about option, the million. approximately But which value hurricane Irma. and and CRP caused The largely concerns negatively the in first August, these assets again due fair account price for September, under impacted This property second was since decline a million loss compares significant our $X statement is of the Furthermore, these our statement. decline in in a reflected increase as price this game assets for same a reflected in which

of dividend. earnings dividend, MFA's from active we which one-time declaration of a Mr. is book of $X.XX. second depth $X.XX low our exceeds process, The levels. the the $XXX have a been quarter, consecutive $X.XX was to X% selection with is paid incurred expense $X.XX the from due Book to very that primarily the from XXth This a which high value value $X.XX. impacted to due quarter slightly of quarter, million quarter We remain company was by investment the modest has second leverage in in purchase committing for that negatively with the in coupled stable, $X.XX of ranged factors Gorin. earnings connection third declines pursuant This last market quarters, obligation This contractual less very the investing assets. low in high. value in to range nearly or book remarkably asset X to than to has to of a third $X.XX

billion but runoff again And expected second quarter. $X approximately down fourth the quarter. level runoff billion, Our of in in trend was the continue will was portfolio third we the quarter, our $X.XX portfolio in unprecedented from to lower high the

and September X, please. as ago. undistributed share. nearly turn our and long-term per XX returns operations began interest strong If XXXX, volatile to Finally, has January we've of income cycles. rates shareholder And we consistent investors markets credit estimated in company through various annualized through XX%. of returns could the Since MFA XX, of generated $X.XX was XXXX, Page approximately taxable to years generated

X last summarized current total over residential Investor And appreciation the The interest-rate benefit assets. sensitivity. as well, assets, growth credit XX%. our to we credit-sensitive X, of have our XX-year acquired so discount, last repaired return our prepayment were exceeded from positively and months, XX a As of to has and can We strategy. actually mortgage we increases In purchased turn they credit XXXX, On on shareholder we primarily over be X, rates. perform Page periods. assets the and economic home-price borrower profiles. in improved investment page we've continued have have impacted short-term to expectations Many in tend please. credit continued have at therefore nature assets sensitive less focused

for While own, in return more these higher invest profiles. assets in new makes the challenging by mortgage they result pricing are risk altering that we positive trends

sometimes price we don't which lend have means maintained and We bids. discipline,

exploring has opportunities. been While as which continuously about classes, talk MFA's be will shortly. opportunity asset our evaluating existing well as related such One investments, new

disruptions a us attractive and investment take which assets, Our strategy opportunities. and power, distressed ability gives quickly us market invest positions does to in in require staying less the should way, long-term hold create advantage liquid to meaningful

are portfolio assets short debt-to-equity our amount equity attractive with has gives to liquidity ability we marks. accommodate we us ratio opportunities. the potential capital, significant from in loan up performance. invest runoff focus a as declines We to combined investment on identify invest And our long-term permitted And with

credit hold they supply Page Turning That only sale. is The to when sensitive is for sporadic. of them are residential X. we can buy

opposed appears which billion from we in due spread much hurricanes X assets CRT million nearly falls becomes As But did of runoff securities and bought be sold We made our Portfolio overreaction purchase of in day. widening that September. in spreads the as or to some likely environment, challenging of to $X concern the concerns to quarter was second investment quarter. is third the third quite available, agency $XXX high, $X.XX in marketably or and billion MBS, a that committed land can slowed This purchased this quarter. still data an while every through August see recovered. more it in

Now I'm Yarad, Steve third further going results for quarter. the call to will on to who the the over details turn provide

Stephen Yarad

Thanks, Craig.

quarter has Craig hired results value in book financial As through ability. third earlier dividend's outlined and by this and MFA's for were year-to-date presentation. the

summary be were to analysis we've net Page for nonagency net this legacy reviewing However,, income, X such second lower MBS the overall and turn value we our One, to MBS. each runoff than attributable to securities. the elect including in where income. Please agency you during MPO that quarters. liability to present income. directly fair discussed of quarter The quarter. in income we MBS, X, our we we net income of items in the in prior results has generate In asset call impacting March, assets of increasing account MP to and interest earnings continue the When see key the Two, to continues the period option, contribution in presentation value the acquisition value factors. so other primarily and that shared irons other fair of whole-ones following RPO, asset, as CRT optional the the changes the present we fair assets QX

loans, liquidated income we this payoff. net required the would impacted income present while increase rather to reported are in income costs, higher increases, due period that spread. of had else this to as recent reduces For the asset. from includes three, queue the noted, Further, NPL interest remaining that other expect income interest wise whole-on or the gains we costs And grow, payments to would income mismatch as net net we primarily funding interest MPO in in equal. typically other reporting which Consequently, the MPO our and Reserve expense continues contribution whole for cost to this portfolio for overall on portfolio cash and is of as humming which occurred see and income, whole just Federal during reflecting from funding has

as During of net to the see XXXX, compared quarter of the shift, interest declined continued income the to impact third we second quarter. this

noted the CRT unrealized discussed. income this late and level contribution Overall quarter's result primarily Having Craig our Other also said price as earnings a $X.XX this recorded approximately be approximately terms, $XX income to in securities, other The noted call, should August can This principally income in September. XX, due decline for this million. and If In concerns option in hurricanes volatility of overall fair addition, of represents overall including our declined, securities that fluctuations $XX.X second gains quarter is the that, from quarter, in per earnings, decreases portfolio, unrealized we gain quarters. future earnings, exhibited it compares the to we On at million September in in an unrealized the from quarter, in on that option. a unrealized net market which show sequential CRT in has value due CRT overall value the XXXX, in gains of increased fair a accounted on losses EPS portfolio share. million. afford second to of MFA's common MFA's $X.X in quarter.

in In CRT exhibited less tightened tight prices addition, volatility, quarter-end, have have the levels. again are fact approaching previous since

earnings lower of performance expenses $X.XX In company's over impact other to that were to state than the non-recurring addition income, obligation presenter G&A share. impacted Jensen, portfolio call net to will details with The of investment now Bill higher like Gorin. contractual turn expenses more provide to activity the reduced to quarter. - the usual also recorded, approximately and additional this the due aforementioned of the EPS I'd by per the And the by impacted who our impact Chris other quarter, common

Unidentified Company Representative

Thank you, Steve.

all and loss. RPL/NPL we MSR million RPL/NPL our X. related investments loan, Turning whole nearly to most We're and quarter, third show approximately $XXX opportunities in Page asset in of less MBS activity than found quarter the our With Where assets. classes. in

in remained from and of $X Assets approximately quarter elevated second quarter. the runoff declined third billion the

due so asset reinvestment related to decline We've to backed our the dependent an of Their the rights. on $XXX to on REIT the service of by expect rights. We and importantly, mortgage the growing continue price rates. MSR is assets table servicing substantially excess run-off and than million. underlying But servicing structural loans features fourth asset is to lower and performance volatility REIT in and quarter. over performance collateralization, underlying added the investment, securities in these

interest despite assets stable, relatively to increases view Turning on persistent and a spread X. and earning Page net interest and recent rate MFA environment. satisfying lower remain attractive

whole quarter. due assets, a assets less higher fact Our the have AB quarter last year replacing we that levered that lower this ago, second in with the for leverage so large CMBS, bit the penthouse leverage. of to just than utilize or of the was changed been a loans is And

Turning Page XX. to

Here funds spreads and the for more cost significant yield, holdings. of we show

occurred classes, each with marketplace, that in for believe of appropriate seeing assets, the generate amount the our leverage our asset shareholders. attractive and we yield in we're in of will yield to continue we Given our the of returns

to Turning Page XX.

review interest's will we sensitivity. Here MFA's

to the asset as a the our unchanged. tames points, our relatively billion. was portfolio unchanged was asset from points interphase Our third in allocation quarter X duration at declining soft quarter, Besides basis of basis little XXX $X.XX

at to over basis points our short the heads approximately duration XX XXX points, and basis minus While naturally swap, time. declined

about agreement. the hatched third of And XX value unchanged addition during our basis currently quarter this X/X market net was to our interphase at In duration points. protection, repurchase swaps

on long-term In duration, of net have rates. credit And very emphasis company's seasonal the addition limited it nature exposure that emphasize to portfolio, important sensitive to is we to due interest our assets. low to the

value we risk Turning book to quarter-over-quarter shift stability. rate value Limiting limiting has interest XX. of change consistently book experienced. Page strategy the delivered in MFA have

in largest few fact change the change the quarter-over-quarter In being than value in X%. book last X% years, average less of the with

change to low In continues value addition rates. our to book sensitivity portfolio in to stability, prepayment exhibit

MBS non-agency agency ABP to impact is legacy MBS's the on discount a of and MBS MBS continues time. premium As in portfolio average on diminished XX amortization the the accretion premium the primarily our MBS much discount agency over is purchase larger the than portfolio amortization our to our earnings has dramatically due the outpace legacy This point that fact, average on portfolio. point non-agency purchase MBS X

appreciation legacy In to for non-agency price addition, non-agency home our borrowers credit and to better strong continue on support prepayments legacy MBS. access

portfolio continue our factors, earnings While the fixed seasoning credit long-terms to change the call Wulfsohn, discuss assets to rates. more over MBS prepayment With rapid as that, our will for MBS sensitive to insensitive volatility turn MFA's agency turn MBS believe to we continues the will prepayment develop lower in in Bryan detail. who I'll and on Due agency our our of agency holdings. to XX-year these limit

Bryan Wulfsohn

you, Gudmundur. Thank

XX. market rate rates X.X% year rates support. historical standards. number a both mortgage remain And by a Estimated to continues to Turning low year-ago. negative in The credit from versus down X.X% continues to fundamental fall. homes and The at September unemployment with mortgage equity and technical X.X% the enjoy Page to X.X% ago. residential Interest is of

tend X.X% equity home Now that delinquencies released to nonperformance of a has are According drop MFA payments. versus to to CoreLogic their October, make X.X% the mortgage rate employed, the supported year-ago. they in people insight the in report

Turning to Page XX.

sheet to be and Again, to of We packages expectations and continue outcomes. a and continue nonperforming billion the fair in better we is at This $X.X held believe Typically, our ask decision at acquisition. elect sensitive and on residential $XXX acquiring value, settled in in We produces value of third and economic time credit for whole made balance carrying loans, of our servicing lines, line $XXX X% over X value adding if X%. permanent value, loans over million for loans billion. loans reminder quarter. you assets our caring a Returns management are fair active on portfolio to is with held access of election to the nonperforming reperforming reperforming loans. as

with Turning to owned the And that in XXXX, third month-end to September for of than either be slide results to [ph]. of show inflation XX. at either outperformed for year. in purchased delinquent XX% more outcomes another This modification, we that initial of modifications liquidated loans purchases out have prior our as and for the the in phone since or performance fair of therefore full. loans REO are have performing our over X stone or liquidated are Page now expectation market paid were paid X/X or We're reperformance. pleased performing These full. our

tightening. MBS X% demand strong the Turning The The yields our X% the market current spread once tighter lower the yields for to for existing to third be reissued The spreads. in asset the in leading With and purchases yields getting XX. AX. appetite to of around unlevered to callable and RPL/NPL continue buyers from driver Page scaled-back, at for approximately AX quarter. classes

credit right-hand the XX. delinquent future the of amortizing. our improve. most legacy loans, loans distribution the are a LTV illustrate are metrics are represent defaulting in transitioning on our principal continue to page, These loans, than LTV. about, because to depreciation current borrowers September home on at-risk our XX delinquencies Page XX%. The this price the the homeowner's are amortization, now underwater. portfolio. worth. of side underlying XXX% under the we on our XX-plus loans for and loans the as On with we bars The is of to owes red portfolio together where to nonagency worry property This underlying continues were nonagency the legacy Turning the reduce portfolio day Delinquencies curing. portfolio, mortgage more in the

attractive even and can have gone note, amortization can XX-year bars you and offer today Please combination large XX% substantially lower. loans today the the bars with term rates see, the the monthly payments. below these almost and or refinancing A term XX-year XX% XX% As Loans left are on black lower red candidates, of of available low are current loans disappearing versus - also remaining on LTV homeowner at a entirely. XX% increasingly side. LTVs

our call course, now when the very underlying happy we're the And loans Of to Craig. back discounted price over assets, given deeply prepay. I'd these turn purchase of like to

Craig Knutson

you, Thank Bryan.

we've So in market. summary, remain active the in investment

We too aware lend our so maintained can we that for sometimes of have We're in suboptimal pricing lock which discipline long-term, keenly don't returns. approach, investing for investments reaching means much the we are years bids.

to than attractive to opportunities. be. team ever predict new next we're investment we what in that the and We at working classes always the Our please But opportunity the Operator, diligence to reevaluate cannot call structure to and presentation. will concludes ample various feed our will table, the confident asset invest the quite harder you an able is size. This investment have capital up the meaningful understand questions. for expertise transaction, could open

Operator

[Operator Instructions].

of question Douglas Suisse. Harter the comes first Your line from Crédit from

Unidentified Analyst

in Doug This is Choe actually for Sam filling Harter.

So on into a and And that through into I next reserves, how was trending of the nonagency legacy believe quality you you elaborate see was you quarter mentioned guys reduction credit XXXX? kind there credit more in walk on assets. wondering, decision? if wheels can I that

Stephen Yarad

Sam. Sure,

book probably had I years X know, every I we in for reduction - reserve credit know, think maybe don't I can think so. your legacy similar I So to quarter or it question. But last, a probably X,X on is the answer the we

So all evaluation subset legacy take process those bonds. a is basically of to

looked year. at at once bond per gets every least So approximately

so LTV. such updating thing include analysis will as mark-to-market that And the

that the we expectation each on basically million, the we past, And most we the those is reserve evaluating increase bottom cash the the And top us yield on were are look those of value at the bonds. accreting then effect assumptions yield assumptions just our in improved. trend XX%, $XX on let's amount of those those on of Looking that flow But impacts XX%, of comes that and on bonds, no or for no perspectively credit assets, seen prepayment changed out again, bond. we're that creating that way future if has book effect increases process initial recent review to so at of - delinquency say, are and we've rates, it begin the has earnings. to, will and

Unidentified Analyst

Got it.

at guess? earnings, perspective your looking I it instead So of from

Stephen Yarad

said. Craig this, To clarify has as

the future, As will on increases result it it yield, income in increased interest that.

in Okay. doesn't period reserve make credit impact the It which change. we the

Unidentified Analyst

Got current. it, the

Okay. And one-time How perspective, we should then items there on a lot modelling level? be about from the I expenses. the are thinking mean, expense operating normalized a of

Stephen Yarad

Choe, this is Yarad. Steve

to at or we've little X.X% the X range, sort changed the G&A And around a you G&A $XX equates has include and be it of $X in way you we to grown of $XX of in million if somewhere forward. should I If in of that's to move business million past of been to value X which the thinking think kind as compensation equity as bit, quarter. G&A look even about X.X% set quarters the

Operator

next Levi-Ribner from of Jessica the comes Your from line question FBR.

Jessica Levi-Ribner

this you The guess, CRTs. in spreads The one if more to fears active the on would've market, overblown. were hurricanes we quarter, the especially, first be expected I out

some did in the do how we you think maybe And about given marks spread about think quarter So fourth normalization? this that? how

Craig Knutson

the buying widened opportunistically spread sell most were widens. holders those as were few very levels. but Unfortunately, spreads of these reluctant far as to the trades, at So there

we're a by since of So basis probably very XX What analysis. was little little And that tights. but the is have then much there the - volume transacted. from you to seen happened of marks just They points bit going overreaction. widened that were was truthfully lower

lot XX%, delinquencies immediately you X.X% I significantly. the come In affected sales ultimately, if of had borrowers, and estimates a instance, but how ultimately few could those for after look X.X%, initially. been So a areas initial think GSEs It Katrina, estimate even and though tight about than delinquencies areas, changed we're delinquencies we're gone But months spikes well. less were defaulted. those as out than value less the down come have as from for

X.X%. think I X.X% X.X%. projected they initially, revised data of expected And made revised exposure down the which X.X% So They the initially, then to to to the use Irma, they with exposure Harvey.

recovered. happened of is lot irrational which of So and street estimates a firms seen that is is sort the and and come some then as since GSEs the out largely excitement little of very you've these price What of trading. have

So in very that that for in have don't I were final CRT yet. million October, the wide third back and probably our But quarter prices say made the have would we we down $X numbers numbers, October. that

Jessica Levi-Ribner

Okay.

full So almost reversal? a

Craig Knutson

Correct.

Jessica Levi-Ribner

versus they competition you How the you over market? you market page Can whole And RPL? And about the think bit how clean on shifting many you loan do talk a - like The little earlier at about acquisition. that are looking that the X in how - NPL are in competition? X? about think

Stephen Yarad

- place, the handle assets. side, needs because all the less over the grow, those the the be a be sort competition of to a of of on sort buyers bit is static competition seen in continues and we've time types just infrastructure of pool have just to where space. able work especially in the We little of in that on seen to nonperforming reperforming

assume because where And There's tend we the better on you we to a think it's returns better I than can So spreads. little more where nonperforming have active. and see returns than bit perspective that side.

Operator

of JMP line from The Delaney Steven the next comes question from Securities.

Steven Delaney

with can to if that just could, on might be undistributed IRS? start would there's you're I'm going be able Slide taxable Or I If - into XXXX? timing Steve the the the with X. we carry income to curious, requirements

Stephen Yarad

have X distributed just into XXXX, the that income. access until months taxable of X you Thanks, Steve. Yes, delay approximately

And a then would use would that, expect that we XXXX. little we balance in carried So be substantially bit.

Steven Delaney

Okay.

Is So be of tax, distribution about bid, items that stems think the just way can maybe XXXX the from to 'XX? largely it? September delayed as your as late

Stephen Yarad

yes. Steve, much, Pretty

Steven Delaney

on to focused And I be apologize, if that Obviously, loans. MSR, for you coupons that MSR-related the being some you Okay. opportunity to more proprietary, term I the how the want suggest a appeared opportunity? obviously, at and like quarter I'm be I'm the repeat some don't to obviously, - market that curious that last - to found related X%, some collateral asking that high but you not little is just very not must that had investment that a there the for on asset because opportunity? class. would about ROE that We a to disclose there could the leverage just it's hear

Craig Knutson

Steve Del, out I'll miss talk address more that. to [indiscernible] figure to last a it little exceedingly want bit that the generally. related have any you get quarter can we And to have By investor. have we been way, then anything difficult if into you details, didn't MSR would because

Steven Delaney

you it? kind buried It buried of Yes, quarter? last was

Craig Knutson

standpoint, So first first this such we've this that we competitive want initially. a from of This these they year-ago. bit quarter. year. in-depth But We we a market the over actually out actually - size, a is a to our involved time frankly publicize for for have been in broke almost didn't little a it are the didn't lot in

we've own been we've a might own to because class. asset at XX-year as MSRs they the bought had it fixed-rate we possible have as hard rate MSR, Over agencies. agencies. about these, pretty we be fixed we don't We complementary never XX-year years, And choose asked looked while

leverage we finally, our addition, because process some ultimately, very to against licensed that, obtain repo work [indiscernible] MSRs. on at we on complication operational had can But innovative we're leverage that the It the market. own because somewhat then structure also on encountered in table [indiscernible], to obtain is develop such In the And that discovered would've in a difficult MSRs we MSRs. we seed to MSRs. it's the that off, before, structure paid is borrow the also we as not own it would said

vehicles our So it flows. our is flow cash backed by But the backed floating cash LIBOR-based. over With is our MSR also issuer. rate investors by collateralized,

you maybe, underlying a that is the about than files MSRs. bit So if of the and of of value the more future our And talk much want opportunities value to investment the market? little stable

Stephen Yarad

Steve. Yes,

we It opportunity. space. And interesting MSR it. and was then, played complicated around end year. of And assets out, learned spent MSR the at finance we've an the last time illiquid it's Craig So of as kind somewhat

creative and you so in you transactions nature. And understand and figure actually we doing it's have bit complicated idolize a a volatile underlying have servicer payments And view. in in point case structure which involved the this then, to within some as asset, a as asset all how And - is is to But the And as a partner creativity. have well. you the know reason really got underlying some to because there. you the look have this why few you they're from it's out company MSR of

definitely rates interest understand which to sea. because fixed going as the and maturity think X there's coupon. quarter. at provide there's large space where you the floating-rate it transactions nature it underlying the per threads the moment idly loan the the MSR, or definitely be work there's note structure sensitive obviously MSRs our post based there's know understand so importantly, is the just of change you to for it as in definitely to And It's So happened rates. probably has where coupon rate low in and the has some Maybe a quite to upon a interest some attractive a also creative being about not it's instrument done you is interesting high is asset. and a opportunity as there as or sensitivity clear, Interest numerous transactions that. And collateral have the forward of X that is but

Steven Delaney

to a get opportunity. on That's just offline follow very Or helpful that better background. little the understanding maybe up we'll about more, a

in plugged But hear hear actually I And believe think longer-end. on opportunity. surprised that the corporate identified to we've kind MSRs, the rates are just your wondering still. glad by year, to to we that that capital structure. looking transaction in. tightness going We're think, all this thing, I Not is a where pleased the And last securitization, Genie was MSRs. at we're MFA you've X market a - go Mae backed of but saw earlier debt that seeing just that given

you you sheet, redemption X% look that's and bonds, blended at your your returns, at you lower those when capital, When versus last cost you wondering of investment Just coupons for see to, maybe, there at question? opportunity and to partial look your look baby X.X% balance my per. any do you're

Craig Knutson

Sure, Steve.

securities. that. preferred or So whether we at Understand baby as Those are look structure. yes, structured do that the retail it's bond

issue. they're X% pretty typically issue. So expensive to to cost They over

just simple it's comparing companies have the corporate as as aware of as even and preferred not as we're light the very your for been done coupons quite much So well the space. bonds we jump-ons where but

Operator

of Your comes question from line Bose KBW. next from the George

Bose George

guys then, little about I bit a your like capital runoff deploying? mean, MSR detail portfolio Can you time? going envision to see excess actually forward? and the you would how And more give how just grow over big you

Craig Knutson

Sure.

growth of class So still I asset is think loans. our credit-sensitive

I will as think the Bryan moment. said, weep for it

classes. continually I think Said sort change prepared classes, of that can skewed loans. then all of in I we tried spreads change. think obviously, probable to remarks, But as across nonperforming all more asset the to asset my it's reperforming re-examine market our

relative years seen probably active So X would RPL/NPL market X ago. securities, legacy relative months been in better now are the some the in a period the And in agencies or spread as at probably than very or agency on that tightening did of X they moment. the haven't or But we've of some agencies to an time, for really so. tight example, we in

undertake classes. So that loan-related I'm that agencies. all opportunities out new well. we some are at of that possibly to by not cross can run look But we to asset we're going as do our There suggesting process

So I But environment asset. sown to tough is structures market find analyze where been we're in a we in cheap somewhat capital. pretty have that past creative It active. the that think, ability we our differently significant commit - that have innovated

that grow love So first be the Maybe able as news far the first MSR up, get first classes. when call, the we new to typically the asset X asset, is, awaited as good does X And - calls. quarter. more one I think the to something a or come we'd deals of

billions year later. hundreds XXX assets We the had we invested a But a that that cold over could it's was deal deal first in having not that actually but type bought it's we millions. of actually So of certainly see now.

down So XXX actually could now been grow maybe over XXX well. quarter, by XXX, remember changed. that a it's XXX But was and quarter, goal very it going a

Bose George

And Yes. that more every modeling and should quarters. your we then an couple to feel like forward, I from back the particularly is about gains monetizing pace answer. always a were of But of we perspective, Craig. that That's Thanks, just that a think question turned just course? helpful going unrealized this of

Craig Knutson

So yes.

of portfolio strategy the of some characterize Fortunately, our the I your nonagency legacy of perspective. think paying And very share I Typically, part details. But as specifics we chart see, modeling all of you the third details I'll of management a these I'll managing opportunistic. portfolio. really give but these I But of was don't consistent quarter discuss some also sales.

$XX market below were those million sold about was X XX XX comprised positions position $X positions. value quarter, sized million. of just of different this we advance So

know you to our round sure a I have at had I'm positions So trade often up. discount

So X low prudent bonds. bonds these position, our are our think these bonds, are loan the the we we some on pricing XX lot sales. of hit multiple obviously round can of of X achieve XX categories.

factor XXX of fewer happens And the loans. in low few them loans that have is what pool. and So bonds down curve there is loan with the

and that can fall or the leave of a think XXX. part And we price significant the We only realized the those just bond sold And process idiosyncratic. that type we the a of these the this currently approved very which Again, concession. million the monetize prepayment bonds, it's of and what part. we short is XXX.X will part you do as color hopefully, of the And the as the sales. obviously we a also with slightly our sort goes very over limited of over we current have We give opportunistic sale of But little if bit [indiscernible] price traded price execute are see ex-extent into that To managing sales. at bond X sold then finally, a callable those monthly that base was X very upside. bonds, positionally the for $XX which bond as concession your be on this can quarter you most position, said. again, because traded sold the portfolio. further was in we round depreciation, cases percentages

Operator

there further And time, Instructions]. at questions. this no [Operator are

Craig Knutson

next we today. would to quarter. And speaking All with you like joining forward thank look right. for to us I everyone

Operator

this and replay available conference Ladies be X:XX X. today February Eastern through will for time after gentlemen,

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MFA Financial (MFA) 2 Nov 172017 Q3 Earnings call transcript