MFA Financial, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>MFA Financial, Inc. filed its 2023 10-K report detailing financial performance and key instruments.</b>

AI Summary

MFA FINANCIAL, INC. (MFAO) filed a Annual Report (10-K) with the SEC on February 22, 2024. MFA Financial, Inc. reported its 2023 fiscal year-end results on December 31, 2023. The company's fiscal year runs from January 1 to December 31. Key financial instruments include Common Stock, Series B Preferred Stock, Series C Preferred Stock, and 8.875% Senior Notes Due 2029. Assets pledged as collateral with right and without right were reported as of December 31, 2023, and December 31, 2022. The filing includes data on Variable Interest Entity Primary Beneficiary for both 2023 and 2022.

Why It Matters

For investors and stakeholders tracking MFA FINANCIAL, INC., this filing contains several important signals. This 10-K filing provides a comprehensive overview of MFA Financial's financial position and operations for the fiscal year 2023, crucial for investors to assess performance and future outlook. The detailed breakdown of financial instruments, including preferred stock and senior notes, along with pledged assets, offers insights into the company's capital structure and risk management strategies.

Risk Assessment

Risk Level: medium — MFA FINANCIAL, INC. shows moderate risk based on this filing. The filing is a 10-K, which is a standard annual report, but the specific financial details and market conditions for a mortgage REIT can introduce medium-level risks related to interest rate sensitivity and asset valuation.

Analyst Insight

Investors should review the detailed financial statements and risk factors within the 10-K to understand MFA Financial's exposure to interest rate fluctuations and its portfolio's performance.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-22 — Filing Date (Date of submission)
• 6798 — SIC Code (Standard Industrial Classification)
• 133974868 — IRS Number (Company identifier)
• 001-13991 — SEC File Number (SEC identifier)

Key Players & Entities

• MFA FINANCIAL, INC. (company) — Filer
• 2023 (date) — Fiscal year end
• 2024-02-22 (date) — Filing date
• 350 PARK AVENUE (address) — Business address
• MD (state) — State of incorporation
• MFA MORTGAGE INVESTMENTS (company) — Former company name
• AMERICA FIRST MORTGAGE INVESTMENTS INC (company) — Former company name
• 8.875% Senior Notes Due 2029 (debt) — Key financial instrument

FAQ

Industry Context

MFA Financial, Inc. operates as a real estate investment trust (REIT), specifically focusing on mortgage investments. This sector is sensitive to interest rate changes and housing market conditions.

Regulatory Implications

As a publicly traded company and REIT, MFA Financial is subject to SEC regulations and specific tax requirements for REITs, including rules regarding income distribution and asset composition.

What Investors Should Do

1. Analyze the company's balance sheet and income statement for the fiscal year ended December 31, 2023.
2. Review the details of preferred stock and senior notes, including terms and interest rates.
3. Examine disclosures related to pledged assets and variable interest entities for potential risks.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-02-22: Filing Date — Date the 10-K report was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial 10-K filing for the fiscal year 2023. Previous filings would be for prior fiscal years.

Key Financial Figures

• $0.01 — ich Registered Common Stock, par value $0.01 per share MFA New York Stock Exchange
• $3.0 billion — . During 2023 we acquired approximately $3.0 billion of residential whole loans. This includ
• $2.1 billion — residential whole loans. This includes $2.1 billion of loans originated by our wholly-owned
• $4.9 billion — y, Lima One, which has funded more than $4.9 billion of loans since July 2021, when we fully
• $9.0 b — assets were comprised of the following: $9.0 billion, or approximately 90%, of residen
• $7.5 b — of residential whole loans (compared to $7.5 billion, or 92%, at December 31, 2022); $
• $746.1 m — billion, or 92%, at December 31, 2022); $746.1 million, or 7%, of residential mortgage s
• $333.4 m — ential mortgage securities (compared to $333.4 million, or 4%, at December 31, 2022); an
• $327.1 m — lion, or 4%, at December 31, 2022); and $327.1 million, or 3%, of remaining 1 Table o
• $315.0 m — d loan-related receivables (compared to $315.0 million, or 4% at December 31, 2022). R
• $456.7 million — During 2023 we opportunistically added $456.7 million of Agency MBS. Going forward, we may co

Filing Documents

• mfa-20231231.htm (10-K) — 5052KB
• exhibit41-descriptionofthe.htm (EX-4.1) — 359KB
• exhibit103amendno2datedaso.htm (EX-10.3) — 10KB
• exhibit108agreemententered.htm (EX-10.8) — 92KB
• exhibit109amendedandrestat.htm (EX-10.9) — 96KB
• aex1016xformoftrsuawardagmt.htm (EX-10.16) — 40KB
• aex1017xformofprsuawardagmt.htm (EX-10.17) — 77KB
• exhibit21subsidiariesofthe.htm (EX-21) — 7KB
• exhibit231consentofkpmg123.htm (EX-23.1) — 3KB
• exhibit311certificationofc.htm (EX-31.1) — 14KB
• exhibit312certificationofc.htm (EX-31.2) — 14KB
• exhibit321certificationofc.htm (EX-32.1) — 7KB
• exhibit322certificationofc.htm (EX-32.2) — 7KB
• exhibit971-mfafinancialinc.htm (EX-97.1) — 51KB
• 0001055160-24-000005.txt (&nbsp;) — 24373KB
• mfa-20231231.xsd (EX-101.SCH) — 133KB
• mfa-20231231_cal.xml (EX-101.CAL) — 119KB
• mfa-20231231_def.xml (EX-101.DEF) — 780KB
• mfa-20231231_lab.xml (EX-101.LAB) — 1298KB
• mfa-20231231_pre.xml (EX-101.PRE) — 1005KB
• mfa-20231231_htm.xml (XML) — 5258KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 5 Item 1B. Unresolved Staff Comments 34 I tem 1C. C ybersecurity 34 Item 2.

Properties

Properties 35 Item 3.

Legal Proceedings

Legal Proceedings 35 Item 4. Mine Safety Disclosures 35 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 36 Item 6. [Reserved] 38 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 39 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 62 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 68 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 138 Item 9A.

Controls and Procedures

Controls and Procedures 138 Item 9B. Other Information 141 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevents Inspections 141 PART III Item 10. Directors, Executive Officers and Corporate Governance 142 Item 11.

Executive Compensation

Executive Compensation 142 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 142 Item 13. Certain Relationships and Related Transactions and Director Independence 143 Item 14. Principal Accountant Fees and Services 143 PART IV Item 15. Exhibits and Financial Statement Schedules 144 Item 16. Form 10-K Summary 149

Signatures

Signatures 150 Table of Contents In this Annual Report on Form 10-K, references to "we," "us," "our" or "the Company" refer to MFA Financial, Inc. and its subsidiaries unless specifically stated otherwise or the context otherwise indicates. The following defines certain of the commonly used terms in this Annual Report on Form 10-K: Purchased Performing Loans refer to loans that may include: (i) loans to finance (or refinance) one-to-four family residential properties that are not considered to meet the definition of a "Qualified Mortgage" in accordance with guidelines adopted by the Consumer Financial Protection Bureau ("Non-QM loans"), (ii) short-term business purpose loans collateralized by residential and multi-family properties made to non-occupant borrowers that intend to rehabilitate and refinance or sell the properties ("Transitional loans") (also sometimes referred to as "Rehabilitation loans" or "Fix and Flip loans"), (iii) loans to finance (or refinance) non-owner occupied one-to four-family residential properties that are rented to one or more tenants ("Single-family rental loans"), (iv) loans on investor properties that conform to the standards for purchase by a federally chartered corporation, such as the Federal National Mortgage Association ("Fannie Mae") or the Federal Home Loan Mortgage Corporation ("Freddie Mac") ("Agency eligible investor loans" ), and ( v) previously originated loans secured by residential real estate that is generally owner occupied ("Seasoned performing loans") . Purchased Credit Deteriorated Loans refer to loans that are typically characterized by borrowers who had previously experienced payment delinquencies and the amount owed may have exceeded the value of the property pledged as collateral at the time of acquisition. Purchased Non-performing Loans refer to loans that are typically characterized by borrowers who have defaulted on their obligations and/or have payment delinquencies of 60 days or more at the time we acqu

Business

Item 1. Business. GENERAL We are a specialty finance company that invests in and finances residential mortgage assets. Our targeted investments include principally the following: Residential whole loans, including Purchased Performing Loans, Purchased Credit Deteriorated and Purchased Non-performing Loans, which we acquire and hold through certain trusts that are consolidated on our balance sheet for financial reporting purposes. Through our wholly-owned subsidiary, Lima One Capital, LLC (or Lima One), a leading nationwide originator and servicer of business purpose loans (or BPLs), which we acquired on July 1, 2021, we originate and service BPLs for real estate investors. We also own real estate (or REO), which is typically acquired as a result of the foreclosure or other liquidation of delinquent whole loans in connection with our loan investment activities. Residential mortgage securities, including Agency MBS, Non-Agency MBS, CRT securities and MSR-related assets, which include term notes backed directly or indirectly by MSRs. Our principal business objective is to deliver shareholder value through the generation of distributable income and through asset performance linked to residential mortgage credit fundamentals. We selectively invest in residential mortgage assets with a focus on credit analysis, projected prepayment rates, interest rate sensitivity and expected return. We are an internally-managed real estate investment trust (or REIT). 2023 was another challenging year for fixed income, as investors faced significant volatility as markets balanced aggressive monetary policy tightening, inflationary pressures, and increasing geopolitical uncertainty along with resilient macroeconomic data, the probability of a recession, and expectations regarding the timing of a potential monetary policy shift. We addressed these challenges by prioritizing liquidity, prudently hedging our exposure to interest rates, and using loan securitizations to replace flo

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View this 10-K filing on SEC EDGAR