Ellington Residential Mortgage REIT (NYSE:EARN) Q4 2022 Earnings Call Transcript March 7, 2023 11:00 AM ET

Company Participants

Larry Penn - Chief Executive Officer

Chris Smernoff - Chief Financial Officer

Mark Tecotzky - Co-Chief Investment Officer

Conference Call Participants

Eric Hagen - BTIG

Crispin Love - Piper Sandler

Mikhail Goberman - JMP Securities

Jason Stewart - JonesTrading

Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Ellington Residential Mortgage REIT 2022 Fourth Quarter Financial Results Conference Call. Today's call is being recorded. At this time, all participants have been placed on a listen-only mode. The floor will be open for your questions following the presentation. [Operator Instructions]

It is now my pleasure to turn the floor over to [indiscernible] with Associate General Counsel. Sir, you may begin.

Unidentified Company Representative

Thank you. Before we begin, I would like to remind everyone that certain statements made during this conference call may constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature and are subject to a variety of risks and uncertainties that could cause the company's actual results to differ from its beliefs, expectations, estimates and projections.

Consequently, you should not rely on these forward-looking statements as predictions of future events. We strongly encourage you to review the information that we have filed with the SEC, including the earnings release and the Form 10-K for more information regarding these forward-looking statements and any related risks and uncertainties.

Unless otherwise noted, statements made during this conference call are made as of the date of this call. The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Joining me on the call today are Larry Penn, Chief Executive Officer of Ellington Residential; Mark Tecotzky, our Co-Chief Investment Officer; and Chris Smernoff, our Chief Financial Officer.

As described in our earnings press release, our fourth quarter earnings conference call presentation is available on our website, earnreit.com. Our comments this morning will track the presentation. Please note that any references to figures in this presentation are qualified in their entirety by the notes at the back of the presentation.

And with that, I will turn the call over to Larry.

Larry Penn

Thanks, Aladdin, and good morning, everyone. We appreciate your time and interest in Ellington Residential. During the fourth quarter, inflation continued to moderate, and the Federal Reserve ratcheted back the pace of its interest rate hikes. The market welcomed these developments and Agency RMBS rebounded sharply following three consecutive quarters of dismal performance. Volatility declined incrementally and investor demand for RMBS increased. Together, this drove nominal and option-adjusted yield spreads tighter, especially in November, and so the year ended on a more positive note.