MFA's Book Value Drops After a Third-Quarter Loss

The Tip Desk · November 11, 2026 · 3 min read

GAAP book value fell to $11.12 a share as the specialty finance company posted a $122.4 million loss, or $1.19 a share, while distributable earnings were $26.4 million, or $0.26 a share.

MFA Financial, Inc. (MFA) swung to a GAAP net loss of $122.4 million, or $1.19 a share, for the third quarter ended September 30, 2026, from net income of $36.2 million, or $0.35 a share, in the second quarter.

The specialty finance company said Treasury yields spiked across the curve and volatility widened spreads. Chief Executive Officer Craig Knutson said the firm was not immune to those market moves.

GAAP book value fell to $11.12 a share from $12.71 a share at June 30. Economic book value, a non-GAAP measure, was $11.44 a share. Total economic return was (10.6)%.

Distributable earnings, a non-GAAP measure, were $26.4 million, or $0.26 a share. Distributable earnings prior to realized credit losses were $45.3 million, or $0.44 a share.

Net interest income was $61.4 million. Net interest spread on the total balance sheet was 1.63%. Non-QM net interest spread was 1.01%.

The residential investment portfolio declined to $12.8 billion from $13.0 billion at June 30, reversing the second-quarter increase to $13.0 billion from $12.5 billion.

MFA purchased $884.2 million of Agency MBS and sold $750.3 million, including a $750 million rotation into higher-coupon bonds. After runoff and market-value changes, the Agency MBS position declined to $3.9 billion from $4.1 billion.

Non-QM acquisitions totaled $480.5 million, bringing the Non-QM portfolio to $5.8 billion.

Lima One funded $166.1 million of new business purpose loans, with a maximum loan amount of $287.8 million, and $88.4 million of Transitional draws. Mortgage banking income was $7.4 million.

Multifamily transitional loans were $263 million at September 30, down from $490 million at December 31, 2025. Knutson said the company further reduced legacy multifamily exposure.

60+ day delinquencies on the residential loan portfolio decreased to 6.7% of unpaid principal balance from 7.0% at June 30.

Portfolio runoff was $614.0 million. One securitization collateralized by $446.5 million of unpaid principal balance brought total securitized debt to approximately $5.9 billion.

MFA added a net $357.2 million of new interest-rate hedges and estimated net effective duration at 1.09 years. The Debt/Net Equity Ratio was 7.1x; recourse leverage was 3.4x.

Unrestricted cash was $119.5 million and unpledged Agency MBS was $241.2 million.

Knutson said the company purchased Non-QM loans and Agency MBS at attractive levels and looks forward to deploying capital into a higher-yielding environment. President and Chief Investment Officer Bryan Wulfsohn said MFA acquired $1.6 billion of assets during the quarter and re-securitized $447 million of seasoned NPL collateral after calling a prior issuance, unlocking $40 million of capital.

As previously announced, Knutson will retire as chief executive officer effective June 30, 2027. Wulfsohn will join the board on January 1, 2027 and become chief executive officer on July 1, 2027. Andrew Kail will join as senior vice president and chief investment officer on January 1, 2027.

MFA paid a regular cash dividend of $0.36 a share on October 30, 2026.