MFA Financial Surges on Strong 2025 Earnings, Unveils $200M Buyback

NEW YORK, NY – February 18, 2026 – MFA Financial, Inc. (NYSE:MFA) today capped a year of significant strategic growth by announcing robust fourth-quarter and full-year 2025 financial results, highlighted by a substantial increase in net income and a new $200 million stock repurchase program. The news was met with positive sentiment from analysts, who noted the specialty finance company's successful portfolio repositioning and commitment to shareholder returns.

For the full year ended December 31, 2025, the real estate investment trust (REIT) reported GAAP net income available to common stockholders of $136.5 million, or $1.31 per share. This represents a remarkable 58% increase from the $86.4 million, or $0.83 per share, recorded in 2024. The company delivered a total economic return of 9.0% for the year, with a 3.1% return in the fourth quarter alone, underscoring a period of effective execution and asset management.

“We continued to execute on our strategic initiatives during the fourth quarter,” said Craig Knutson, MFA’s Chief Executive Officer, in the company's official statement. “We deployed approximately $100 million of excess cash on our balance sheet into our target asset classes... These efforts resulted in a total economic return of 3.1% for the quarter and 9.0% for the year.”

Portfolio Expansion and Risk Management

A key driver of MFA's 2025 success was the aggressive expansion and active management of its investment portfolio, which grew to $12.3 billion by year-end, up from $11.2 billion at the end of the third quarter. The company made approximately $4.8 billion of investments throughout the year, with a clear focus on its target asset classes.

Notably, MFA acquired $1.8 billion in Non-Qualified Mortgage (Non-QM) loans and purchased $2.1 billion of Agency mortgage-backed securities (MBS). This strategic pivot towards agency assets and newly originated loans was a focal point for analysts, who see it as a move to bolster the portfolio's quality and earnings potential. The Non-QM portfolio now stands at $5.3 billion, and the Agency MBS position has grown to $3.3 billion.

While expanding its holdings, MFA also navigated a complex credit environment. The company reported a decline in its 60+ day delinquency rate for the full year, which fell to 7.1% from 7.5% in 2024. However, the fourth quarter saw a slight uptick in delinquencies to 7.1% from 6.8% in the previous quarter. Management attributed this increase primarily to defaults within a legacy multifamily portfolio that is currently in runoff. The company is actively resolving these legacy assets, having unlocked significant capital from over $150 million of delinquent loans resolved in the fourth quarter.

Bryan Wulfsohn, President and Chief Investment Officer, acknowledged the challenges but remained optimistic. “Although our Distributable earnings this year were weighed down by credit losses realized on certain legacy business purpose loans, we believe our investment portfolio is well-positioned to deliver strong returns moving forward,” he stated.

A Focus on Shareholder Value

Underscoring management's confidence in the company's trajectory and intrinsic value, MFA's Board of Directors authorized a new $200 million stock repurchase program, effective through the end of 2028. This new authorization supersedes a prior program and provides a significant tool for enhancing shareholder value, particularly as the company's stock has been trading at a discount to its book value. For 2025, MFA already repurchased over one million shares of its common stock.

The company's capital allocation strategy also involves its dividend. MFA paid a quarterly dividend of $0.36 per common share throughout 2025. While its fourth-quarter non-GAAP distributable earnings were $0.27 per share, below the dividend level, management has expressed confidence that earnings will recover and realign with the dividend by the second half of 2026, driven by the deployment of excess cash and expanded production from its subsidiary, Lima One Capital.

Lima One, which originates and services business purpose loans for real estate investors, contributed $22.8 million in mortgage banking income for the year. In the fourth quarter, it funded $145.3 million in new loans and generated $5.7 million in mortgage banking income, demonstrating its continued importance to MFA's diversified strategy.

Hedging Against a Shifting Rate Environment

As a mortgage REIT, MFA's profitability is inherently sensitive to interest rate fluctuations. The company demonstrated a proactive approach to risk management throughout 2025. In the fourth quarter, it added a net $706.9 million of new interest rate hedges, a move designed to protect its portfolio from adverse rate movements.

This strategy has kept the estimated net effective duration of its investment portfolio low and stable at 0.98 years. A lower duration indicates that the portfolio's value is less sensitive to changes in interest rates. The company's own projections, detailed in its 'Shock Table', show that a 100-basis-point increase in interest rates would result in a manageable 1.35% decrease in its net portfolio value. Conversely, a 100-basis-point decrease is projected to increase portfolio value by 0.62%. With many economists forecasting one or two modest rate cuts from the Federal Reserve in 2026, MFA's disciplined hedging and strategic asset allocation appear to position it to navigate the evolving economic landscape.