The following is a summary of the Ellington Credit Company (EARN) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Ellington Credit Company reported an adjusted distributable earnings of $0.27 per share for Q1 2024, exceeding dividends of $0.24.

• The company's overall net interest margin expanded from 2.19% to 3.03% quarter-over-quarter, largely due to growth of CLOs.

• Ellington's net income for Q1 2024 was $0.20 per share.

• The company's debt to equity ratio has decreased to 4.8 to 1 at quarter end, from 5.3 to 1 at year-end.

Business Progress:

• The company, making a transformative shift, is now focusing majorly on corporate CLOs.

• Ellington's CLO investment has generated good returns with a portfolio value of over $60 million.

• The company plans to revoke its REIT election and prepare for transition to a closed-end fund, designed to enhance access to the capital market and potential growth.

• Despite revoking REIT status, Ellington will continue to offset most of its federal taxable income by using net operating loss carry forwards.

• Ellington anticipates growing the CLO portfolio over $100 million while maintaining a core portfolio of liquid Agency MBS to maintain exemption from the 1940 Act.

• The company foresees potential upside in its current portfolio given the current market dynamics.

• The company has shown positive economic returns in Q2 so far and is transitioning from an agency to CLO-focused portfolio, which has reduced its debt to equity ratio to approximately 4.4 to 1.

More details: Ellington Credit IR

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