Exhibit 99.1

MFA FINANCIAL, INC.

One Vanderbilt Ave

New York, New York 10017

MFA Financial, Inc. Announces Second Quarter 2022 Financial Results

NEW YORK - MFA Financial, Inc. (NYSE:MFA) today provided its financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 financial results update:

Commenting on the second quarter, Craig Knutson, MFA’s CEO and President said, “The second quarter of 2022 was an extremely challenging period across all financial markets. The S&P 500 Index was down over 16% in the second quarter and posted its worst first half of the year in more than 50 years. Bond markets continued to sell off after a difficult first quarter and bond indices are generally down over 10% year-to-date. Mortgage spreads widened materially as did credit spreads, with high yield corporates wider by almost 300 basis points year-to-date. Through this difficult period, our team at MFA has protected book value and preserved capital as we wait for more favorable market conditions. Mortgage REIT book values are down substantially since the beginning of 2022, and while MFA has certainly not been immune to these forces, our book value performance has been better than most in the peer group. We proactively addressed these market challenges beginning late last year in an effort to hedge our exposure to interest rate risk and marshal liquidity. Our interest rate swap position, which was $900 million at the beginning of 2022, is now $3.2 billion as we actively managed our hedge position through the rate cycle, and the floating receive leg of these swaps now exceeds the fixed pay leg by over 50 basis points. Despite difficult market conditions, we have continued to execute securitizations, which fix and term out our financing for our loan portfolio while generating more liquidity. Lima One has been able to take advantage of market disruptions that have made it difficult for competitors who rely on loan sales to third-parties. The current origination pipeline has a weighted average coupon of approximately 8%. We slowed our new investment activity in Non-QM loans further in the second quarter, given the uncertainty around rates and credit spreads.

Mr. Knutson added, “During the quarter we maintained a substantial cash position and closed the quarter with nearly $400 million in unrestricted cash. Despite ongoing declines in residential loan valuations, our strategy of maintaining an under borrowing cushion on our mark-to-market financings resulted in minimal margin call requests. Overall leverage increased slightly, mainly due to declines in asset values, but remains relatively low at 3.3 times debt to equity. Excluding securitized debt, our recourse leverage is 1.8 times debt to equity. We reported a GAAP loss of ($1.06) per common share in the second quarter, as earnings were negatively impacted by market value decreases in our loan portfolio held at fair value. Our GAAP book value decreased $1.42, or 8.0%, to $16.42 per share, and our Economic book value declined $1.56 or 8.3% to $17.25 per share. Distributable Earnings, a non-GAAP metric intended to provide a measure of earnings that primarily eliminates non-cash, unrealized gains and losses that impact our GAAP earnings, were $47.2 million or $0.46 per common share.”

Q2 2022 Portfolio Activity

MFA’s residential mortgage investment portfolio decreased by $85.0 million during the second quarter. Loan acquisitions of $728.6 million, including $508.5 million of funded originations (including draws on Rehabilitation loans) of Business Purpose loans and $220.1 million of Non-QM loan acquisitions, were largely offset by portfolio run-off and asset valuation declines.

At June 30, 2022, our investments in residential whole loans totaled $8.2 billion. Of this amount, $6.8 billion are Purchased Performing Loans, $474.9 million are Purchased Credit Deteriorated Loans and $922.1 million are Purchased Non-performing Loans. During the quarter, we recognized approximately $102.4 million of Interest Income on residential whole loans in our consolidated statements of operations, representing a yield of 4.85%. Purchased Performing Loans generated a yield of 4.20%, Purchased Credit Deteriorated Loans generated a yield of 6.85% and Purchased Non-performing Loans generated a yield of 9.40%. Interest income from our residential whole loan portfolio increased on a sequential quarter basis by almost 3% and overall delinquency rates across all loan products in our Purchased Performing Loan portfolio were lower than the prior quarter. In addition, the amount of Purchased Credit Deteriorated Loans that were 90 or more days delinquent, measured as a percentage of the unpaid principal balance, decreased from 18.3% at March 31, 2022 to 17.7% at June 30, 2022. The percentage amount of Purchased Non-performing Loans that were 90 or more days delinquent decreased to 41.8% at June 30, 2022 from 43.0% at March 31, 2022.

Lima One had another strong quarter, funding more than $425.2 million of business purpose loans with a maximum loan amount of approximately $600 million, and generating approximately $10.7 million of origination, servicing, and other fee income.

For the second quarter, a provision for credit losses of $1.8 million was recorded on residential whole loans held at carrying value, primarily reflecting adjustments to lower future estimates of prepayment speeds given recent and expected future increases in market interest rates, partially offset by the run-off of loans held at carrying value. The total allowance for credit losses recorded on residential whole loans held at carrying value at June 30, 2022 was $36.9 million. In addition, we recorded an impairment charge in earnings of $28.6 million against the carrying value of our investment in one loan origination partner, bringing the net carrying value of our investment to zero at June 30, 2022.

During the second quarter we increased our position in interest rate swaps to a notional amount of $3.2 billion. At June 30, 2022, these swaps had a weighted average fixed pay interest rate of 1.69% and a weighted average variable receive interest rate of 1.50%. After including the impact of these swaps and other derivatives that have been entered into for economic hedging purposes, as well as the effect of securitized and other fixed rate debt, we estimate that the net effective duration of our investment portfolio at June 30, 2022 was 0.93.

Our Purchased Non-performing Loans and certain of our Purchased Performing Loans are measured at fair value as a result of the election of the fair value option at acquisition, with changes in the fair value and other non-interest related income from these loans recorded in Other income, net each period. For the second quarter, net losses of $216.4 million were recorded, primarily reflecting unrealized fair value changes in the underlying loans. These losses were partially offset by $47.8 million of gains on derivatives used for risk management purposes, as well as $84.6 million of mark-to-market gains on securitized debt held at fair value through earnings.

We also continued to take advantage of a strong housing market to reduce our REO portfolio, selling 124 properties in the second quarter for aggregate proceeds of $39.6 million and generating $7.3 million of gains. Our REO portfolio was $135.8 million at June 30, 2022, a 34% decrease since June 30, 2021.

At the end of the second quarter, MFA held $245.6 million of Securities, at fair value, including $152.9 million of MSR-related assets and $92.7 million of CRT securities.

General and Administrative and other expenses

For the three months ended June 30, 2022, MFA’s costs for compensation and benefits and other general and administrative expenses were $29.6 million. Expenses this quarter include $13.0 million of compensation and other general and administrative expenses recorded at Lima One.

Segment reporting

Included in this press release for the first time is information on our reportable segments, including GAAP Net Income and Distributable Earnings for each segment for the three month periods ended March 31 and June 30, 2022 and segment assets of December 31, 2021 and June 30, 2022.

The following table presents MFA’s asset allocation as of June 30, 2022, and the second quarter 2022 yield on average interest-earning assets, average cost of funds and net interest rate spread for the various asset types. 

Table 1 - Asset Allocation 

The following table presents the activity for our residential mortgage asset portfolio for the three months ended June 30, 2022: 

Table 2 - Investment Portfolio Activity Q2 2022

The following tables present information on our investments in residential whole loans.

Table 3 - Portfolio composition

Table 4 - Yields and average balances

Table 5 - Net Interest Spread

Table 6 - Allowance for Credit Losses

The following table presents a roll-forward of the allowance for credit losses on the Company’s Residential Whole Loans, at Carrying Value:

Table 7 - Credit related metrics/Residential Whole Loans

June 30, 2022

December 31, 2021

Table 8 - LTV 90+ Days Delinquencies

The following table presents certain information regarding the Company’s Residential whole loans that are 90 days or more delinquent:

Table 9 - Shock Table

The information presented in the following “Shock Table” projects the potential impact of sudden parallel changes in interest rates on the value of our portfolio, including the impact of Swaps and securitized debt, over the next 12 months based on the assets in our investment portfolio at June 30, 2022. Changes in portfolio value are measured as the percentage change when comparing the projected portfolio value to the base interest rate scenario at June 30, 2022.

Webcast

MFA Financial, Inc. plans to host a live audio webcast of its investor conference call on Thursday, August 4, 2022, at 11:00 a.m. (Eastern Time) to discuss its second quarter 2022 financial results. The live audio webcast will be accessible to the general public over the internet at http://www.mfafinancial.com through the “Webcasts & Presentations” link on MFA’s home page. To listen to the conference call over the internet, please go to the MFA website at least 15 minutes before the call to register and to download and install any needed audio software. Earnings presentation materials will be posted on the MFA website prior to the conference call and an audio replay will be available on the website following the call.

Cautionary Language Regarding Forward-Looking Statements

When used in this press release or other written or oral communications, statements which are not historical in nature, including those containing words such as “will,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “could,” “would,” “may,” the negative of these words or similar expressions, are intended to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, may involve known and unknown risks, uncertainties and assumptions. These forward-looking statements include information about possible or assumed future results with respect to our business, financial condition, liquidity, results of operations, plans and objectives.  Among the important factors that could cause our actual results to differ materially from those projected in any forward-looking statements we make are: changes in inflation and interest rates and the market (i.e., fair) value of MFA’s residential whole loans, MBS, securitized debt and other assets and liabilities accounted for at fair value through earnings, the effectiveness of hedging transactions; changes in the prepayment rates on residential mortgage assets, an increase of which could result in a reduction of the yield on certain investments in MFA’s portfolio and could require MFA to reinvest the proceeds received by it as a result of such prepayments in investments with lower coupons, while a decrease in which could result in an increase in the interest rate duration of certain investments in MFA’s portfolio making their valuation more sensitive to changes in interest rates and could result in lower forecasted cash flows; credit risks underlying MFA’s assets, including changes in the default rates and management’s assumptions regarding default rates on the mortgage loans in MFA’s residential whole loan portfolio; MFA’s ability to borrow to finance its assets and the terms, including the cost, maturity and other terms, of any such borrowings; implementation of or changes in government regulations or programs affecting MFA’s business; MFA’s estimates regarding taxable income, the actual amount of which is dependent on a number of factors, including, but not limited to, changes in the amount of interest income and financing costs, the method elected by MFA to accrete the market discount on residential whole loans and the extent of prepayments, realized losses and changes in the composition of MFA’s residential whole loan portfolios that may occur during the applicable tax period, including gain or loss on any MBS disposals and whole loan modifications, foreclosures and liquidations; the timing and amount of distributions to stockholders, which are declared and paid at the discretion of MFA’s Board and will depend on, among other things, MFA’s taxable income, its financial results and overall financial condition and liquidity, maintenance of its REIT qualification and such other factors as MFA’s Board deems relevant; MFA’s ability to maintain its qualification as a REIT for federal income tax purposes; MFA’s ability to maintain its exemption from registration under the Investment Company Act of 1940, as amended (or the “Investment Company Act”), including statements regarding the concept release issued by the Securities and Exchange Commission (“SEC”) relating to interpretive issues under the Investment Company Act with respect to the status under the Investment Company Act of certain companies that are engaged in the business of acquiring mortgages and mortgage-related interests; MFA’s ability to continue growing its residential whole loan portfolio, which is dependent on, among other things, the supply of loans offered for sale in the market; expected returns on MFA’s investments in nonperforming residential whole loans (“NPLs”), which are affected by, among other things, the length of time required to foreclose upon, sell, liquidate or otherwise reach a resolution of the property underlying the NPL, home price values, amounts advanced to carry the asset (e.g., taxes, insurance, maintenance expenses, etc. on the underlying property) and the amount ultimately realized upon resolution of the asset; targeted or expected returns on MFA’s investments in recently-originated loans, the performance of which is, similar to MFA’s other mortgage loan investments, subject to, among other things, differences in prepayment risk, credit risk and financing cost associated with such investments; risks associated with MFA’s investments in MSR-related assets, including servicing, regulatory and economic risks, risks associated with our investments in loan originators, risks associated with investing in real estate assets, including changes in business conditions and the general economy and risks associated with the integration and ongoing operation of Lima One Holdings, LLC (including, without limitation, unanticipated expenditures relating to or liabilities arising from the transaction and/or the inability to obtain, or delays in obtaining, expected benefits (including expected growth in loan origination volumes) from the transaction); and other risks, uncertainties and factors described in the annual, quarterly and current reports that MFA files with the SEC. All forward-looking statements are based on beliefs, assumptions and expectations of MFA’s future performance, taking into account all information currently available. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. New risks and uncertainties arise over time and it is not possible to predict those events or how they may affect MFA. Except as required by law, MFA is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

MFA FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS

MFA FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

Segment Reporting

At June 30, 2022, the Company’s reportable segments include (i) mortgage-related assets, (ii) Lima One, and (iii) Corporate. The Corporate segment primarily consists of corporate cash and related interest income, investments in loan originators and related economics, general and administrative expenses not directly attributable to Lima One, interest expense on unsecured convertible senior notes, securitization issuance costs, intangible assets and preferred stock dividends.

The following tables summarize segment financial information, which in total reconciles to the same data for the Company as a whole. MFA is not presenting comparable segment statements of operations for the three and six months ended June 30, 2021 because MFA did not consolidate Lima One during those periods.