Company: MFAN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001055160-25-000018
Chunk: 108

Company: MFA FINANCIAL, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 108
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OIn the third quarter of 2024, the Company received 75% and 49% interests, respectively, in two VIEs through foreclosure of a multifamily property and a senior living facility underlying delinquent commercial mortgage loans. Each of these entities was determined to be a VIE but the Company was not determined to be the primary beneficiary; as a result, the investments in the entities are considered equity method investments. Each entity accounts for its respective commercial REO property (the “Commercial REO”) similarly to the manner in which the Company accounts for its residential REO.  The entities generally do not own any other significant assets or carry any significant liabilities, except that the two entities contain properties encumbered by third-party financing. The properties foreclosed in 2024 were considered held-for-investment. During the nine months ended September 30, 2025, the two properties were transferred to held-for-sale status.

(b) Goodwill and Intangible Assets On July 1, 2021, the Company completed the acquisition of Lima One.  In connection with the acquisition of Lima One, the Company identified and recorded goodwill of $61.1 million and finite-lived intangible assets totaling $28.0 million.  For the Lima One reporting unit, as of the most recent testing date (October 1, 2024), the estimated fair value of the reporting unit exceeded its carrying value. Key assumptions used in the valuation included loan origination volume, expense levels, discount rates and capitalization multiples, all of which are subject to variability in the current market.The amortization period for each of the finite lived intangible assets and the activity for the nine months ended September 30, 2025 is summarized in the table below:(Dollars in Thousands)Carrying Value at December 31, 2024Amortization  Nine months ended September 30, 2025Carrying Value at September 30, 2025Amortization Period (Years) (1)Trademarks / Trade Names$2,600 $(300)$2,300 10Customer Relationships1,000 (1,000)— 4Internally Developed Software1,200 (600)600 5Total Identified Intangibles$4,800 $(1,900)$2,900 (1) Amortization is calculated on a straight-line basis over the amortization period, except for Customer Relationships, where amortization is calculated based on expected levels of customer attrition