Ellington Financial to acquire Longbridge Financial

OLD GREENWICH, Connecticut & MAHWAH, NJ–(BUSINESS WIRE)–Ellington Financial Inc. (NYSE: EFC) (“Ellington Financial”), a real estate investment trust investing in a wide range of financial assets, including residential and commercial mortgages, and Longbridge Financial, LLC (“ Longbridge”), an industry-leading national reverse mortgage originator and manager, today announced that Ellington Financial has entered into a definitive agreement to purchase an additional 49.6% stake in Longbridge from Home Point Capital Inc. for approximately $75 million. Following the closing of the transaction, Ellington Financial, which has been an investor in Longbridge since 2014, will own substantially all of the shares of Longbridge.

Founded in 2012, Longbridge creates and offers reverse mortgages to help the growing number of American homeowners aged 55 and over manage their retirement and improve their financial future. From 2019 to 2021, Longbridge more than tripled its annual lending volume to $2.2 billion and increased its net income fivefold. As of November 2021, Longbridge ranks third among reverse mortgage lenders, both by FHA approvals and by volume of new loan securitization by HMBS (where it has an 18% market share). Additionally, Longbridge is one of only two companies to have received Morningstar’s ‘MOR RVO2’ rating for origination of reverse mortgages.

Laurence Penn, CEO and President of Ellington Financial, said:Longbridge has cemented its position as a thought leader in the reverse mortgage space, with a proven track record, strong operations and a commitment to highly ethical practices and first-class service. Significant synergies exist between the businesses of Longbridge and Ellington Financial, and we are confident in our ability to work with Longbridge to develop new proprietary products and programs and significantly expand its platform in the years to come. We are delighted to continue to support Longbridge through the next phase of its development and, together, to help create long-term shareholder value. »

Building on its eight years of experience with Ellington Financial, Longbridge will continue to leverage Ellington Financial’s data analytics and modeling capabilities, securitization and financial markets expertise and permanent capital . These will prove invaluable as Longbridge expands its business, operational resources and extensive customer relationships, all of which have seen considerable growth and profitability in recent years. The transaction will also strengthen Ellington Financial’s presence in the reverse mortgage market, while continuing to grow Ellington Financial’s loan origination business and further diversifying its revenue streams.

Chris Mayer, CEO of Longbridge, said:We are extremely pleased that Ellington Financial has increased its commitment to Longbridge – a testament not only to the growth and strength of our business, but also to the opportunities ahead in the reverse mortgage industry. With house prices steadily rising, reverse mortgages are giving the growing population of older homeowners, many of whom are struggling with higher debt repayments and rising expenses, access to more than 10.2 trillions of dollars in home equity. Ellington Financial’s strategic and financial support, coupled with its deep understanding of the industry and capital markets, has helped Longbridge grow from start-up to leading reverse mortgage lender to the fastest growing industry today. . Following this transaction, we will work even more closely with the Ellington Financial team to capture additional market share and deliver innovative, compliant and cost-effective products and solutions to our customers and partners while opportunistically executing strategic initiatives. .

The transaction is expected to close in the second quarter of 2022, subject to customary closing conditions, including regulatory approvals.

About Longbridge Financial, LLC

Longbridge Financial is a highly rated national reverse mortgage lender and manager that helps seniors responsibly use their hard-earned home equity to improve their retirement and address the financial challenges that affect so many older Americans. Founded in 2012 and led by an Ivy League professor, Longbridge works every day to expand the reverse mortgage market by educating homeowners on how they can take advantage of this powerful financial instrument. The company is committed to serving its customers with transparency, unparalleled expertise and efficiency, the highest level of personalized service and industry-leading prices. For more information about Longbridge Financial, visit www.longbridge-financial.com.

About Ellington Financial Inc.

Ellington Financial invests in a wide range of financial assets, including residential and commercial mortgages, residential and commercial mortgage-backed securities, consumer loans and consumer loan-backed asset-backed securities , secured loan obligations, non-mortgage and mortgage-related derivatives, equity investments in loan origination companies and other strategic investments. Ellington Financial is externally managed and advised by Ellington Financial Management LLC, a subsidiary of Ellington Management Group, LLC. For more information, please visit www.ellingtonfinancial.com.

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