Company: MFAN
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001055160-25-000007
Chunk: 126

Company: MFA FINANCIAL, INC.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 126
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 distributed and the Company’s associated liability for such deferrals at March 31, 2025 and December 31, 2024: March 31, 2025December 31, 2024(In Thousands)Undistributed Income Deferred (1) Liability Under Deferred PlansUndistributed Income Deferred (1) Liability Under Deferred PlansNon-employee directors$2,498 $2,434 $2,734 $2,561 Total$2,498 $2,434 $2,734 $2,561 (1)  Represents the cumulative amounts that were deferred by participants through March 31, 2025 and December 31, 2024, which had not been distributed through such respective date.

13.    Fair Value of Financial Instruments 

 GAAP requires the categorization of fair value measurements into three broad levels that form a hierarchy.  A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  The three levels of valuation hierarchy are defined as follows: Level 1 — Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 — Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The following describes the valuation methodologies used for the Company’s financial instruments measured at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy. 

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Table of ContentsMFA FINANCIAL, INC.NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSMARCH 31, 2025

Residential Whole Loans, at Fair Value The Company determines the fair value of its residential whole loans held at fair value after considering valuations obtained from third-parties that specialize in providing valuations of residential mortgage loans.  The valuation approach applied generally depends on whether the loan is considered performing or non-performing at the date the valuation is performed.  For performing loans, estimates of fair value are derived using a discounted cash flow approach, where estimates of cash flows are determined from the scheduled payments, adjusted using forecasted prepayment, default and loss given