Ellington Credit Company (NYSE: EARN) is a mortgage finance company that invests primarily in Agency residential mortgage-backed securities (Agency RMBS) and credit assets including collateralized loan obligations (CLOs). It earns income from the spread between the yield on its mortgage and credit portfolio and the cost of short-term repo financing used to fund those assets. The company is externally managed by an affiliate of Ellington Management Group, which had approximately $14.9 billion in assets under management as of March 31, 2025. For the year ended December 31, 2024, the weighted average yield on the Agency RMBS and credit portfolios was 6.57%, the total adjusted average cost of funds was 2.21%, producing a net interest margin of 4.37%. For the three-month period ended March 31, 2025, the net interest margin widened to 5.27%, with a portfolio yield of 8.58% against a cost of funds of 3.31%. The company pays monthly dividends, set at $0.08 per share throughout 2024 and into 2025, and finances its portfolio predominantly through repurchase agreements.

Revenue model

Net interest income generated from the spread between yields on Agency RMBS and CLO/credit assets and the cost of repo borrowings used to finance those assets. Management fees are paid to the external adviser, calculated quarterly on shareholders' equity, totaling approximately $2.5 million for the year ended December 31, 2024.

Products and services

Agency residential mortgage-backed securities (Agency RMBS); collateralized loan obligations (CLOs); non-Agency RMBS (held historically); repurchase agreement financing; interest rate swap hedging instruments; short U.S. Treasury securities positions used for rate hedging.

Customers and end markets

Institutional and retail equity investors seeking monthly dividend income from mortgage and structured credit assets. End market demand is driven by residential mortgage origination volumes and credit markets for CLOs.

Value-chain role

Portfolio investor and asset manager in the secondary market for Agency RMBS and structured credit. The company acquires, holds, and manages mortgage-related securities rather than originating loans directly. External investment management is provided by an Ellington affiliate under a management agreement.

Geographic exposure

Primarily U.S.-focused through Agency RMBS and CLO investments. The filing notes some exposure to non-U.S. assets and foreign currency risk, with hedging applied to the majority of foreign currency exposure.

Source: SEC 10-K, filed 2025-06-23

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