Before we start I’d like to remind everyone that certain statements made during this conference call including statements concerning future strategies, intentions and plans 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 can be identified by words such as belief, expect, anticipate, estimate, project, plan, should, or similar expressions or by reference to strategies plans, or intentions. As describe under item 1A or our annual report on Form 10-K, filed on March 15, 2013, forward-looking statements are subject to a variety of risks and uncertainties that could cause the company’s actual result differ from its belief, expectations, estimates and projections. Consequently, you should not rely on these forward-looking statements as predictions of future events. Statements made during this conference call are made as of the date of this call and the company undertakes no obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise. I have with me today on the call, Larry Penn, Chief Executive Officer of Ellington Financial; Mark Tecotzky, our Co-Chief Investment Officer; and Lisa Mumford our Chief Financial Officer.

Thanks Sara. As always, it is our pleasure to speak with our shareholders this morning as we release our first quarter 2013 results. We all appreciate your taking the time to participate on the call today. We will follow the same format as we have for the past several quarters. First, our CFO Lisa Mumford will run through our financial result. Then our Co-CIO Mark Tecotzky will discuss how the MBS market performed over the course of the quarter, how we positioned our portfolio, and what our market outlook is going-forward. Then, I’ll close our prepared remarks and we’ll take some questions. In addition to our earnings release, yesterday evening we posted a first quarter earnings conference call presentation to our website www.ellingtonfinancial.com. You will find it right on the, for our shareholders page or alternatively on the presentations page of the website. Lisa and Mark’s prepared remark will track the presentation. So, it will be helpful if you have this presentation in front of you, and turn to page three to follow along. While you are getting that in front of you, I’m going to turn it over to Lisa.

Thank you, Larry, and good morning every one. My remarks are based on the slides beginning with our P&L attribution table on page three and the two summary slides following it. Looking at the attribution table on page three, you can see that for the quarter, we earned $40.3 million or $1.94 per share which equates to a non-annualized return on equity of 7.8%. Our Non-Agency MBS strategy provided 98% of our total gross P&L for the quarter. In our non-agency strategy for the fifth consecutive quarter are, income here was driven by interest income as well as net realized and unrealized gains. During the quarter, we continued to augment yields earned on the portfolio with trading gains. Notably, net realized and unrealized gains contributed to combined I’m sorry to contribute $1.97 per share to our gross P&L for the quarter, returned over just under 20% of the portfolio during the quarter. Additionally, as of March 31, 2013, net unrealized in the portfolio were in excess of $66 million and as measured by value the bond portfolio grew to approximately $585 million as compared to approximately $557 million as of the end of 2012. Average holdings based on amortized costs, increased to $514.4 million at the end of March from $494.2 million at the end of the fourth quarter. Weighted average yields based on cost for the quarter was 9.4% compared to 9.7% in the fourth quarter. In our agency strategy, we earned gross P&L of $734,000 or $0.04 per share. Interest income of $0.30 per share was muted somewhat by net realized and unrealized losses on our agency specified pool as the price premium for these pools relative to generic pool contracted during the period. Our hedges blunted some of the impact of the decline adding $0.04 to agency…

Thanks Lisa. Two powerful forces drove our performance in the first quarter. First, was the strong risk-on-momentum that happened over the New Year’s holiday driven by the resolution of the fiscal cliff crisis. That risk-on-momentum carried on throughout the first quarter. The second factor was continued strong housing data that has been aggressively embraced by the market. In addition, we saw many opportunities to upgrade our portfolio in the first quarter that we took advantage of. We precede the big changes and the relative value of many sectors in the market. Our portfolio management effort attempted to sell securities that had cheap prices with no longer the most attractive asset on a risk reward basis, and replace them with securities that we believe have a better total return potential. We view our use of an active trading stall to capture incremental returns that’s critical to providing long-term return to shareholders. That is the point of active management, to capture returns above and beyond the market data. As we are now in a pricing regime, the amount of distress implied by asset prices is significantly less than a year ago, incremental returns become increasingly important. If you look on slide 10, let’s talk about how the portfolio evolved during the quarter. We added to our non-agency position, we believe that non-agency yields would compress as better housing data became firmly cemented in the psyche of the market. To conceive the green sector, we were able to other expand – as we added to our CLO positions. This has been a new initiative for us, we have added resources and we’ve been pleasantly surprised as some of the CLO opportunities that we have been able to take advantage of. You can see the market price to portfolio jumped almost nine points. Some…

Thanks Mark. As you know, our goal at Ellington Financial is to capture upside and good markets while controlling downside and rough markets. The first quarter of 2013 was actually a great example of this in a very interesting way. Namely, we captured the upside in our non-agency strategy, when non-agency RMBS performed very well during the quarter and we controlled the downside in our agency strategy and what was actually a rough quarter for agency RMBS. And as I’ll discuss in a moment, the way that we captured upside and controlled downside in these two markets is just by continuing to focus on those things that we think really differentiate Ellington Financial in the space, active trading, sector rotation, dynamic hedging and rotation of hedges, all informed by our extensive proprietary research and years of market experience. Let’s start in the non-agency strategy but we captured the upside during the quarter. Now, in non-agencies, we were positioned for prices to rise and they definitely did rise. But as usual, we didn’t just ride the tide. We generated lots of additional income by actively trading the portfolio. As we’ve noted before, big market moves often result in miss-pricings and therefore big moves often present great opportunities for us to rotate our portfolio. The big upward move we see in the last several months is no exception. Basically, we believe that many of the more distressed lower priced non-agency RMBS has risen too far relative to many of the less distressed, higher priced non-agency RMBS. So, as Mark mentioned, we actually took profits in lower priced securities during the quarter. I’d like to spend a moment to explain what our thinking is here. We believe that the burnout we’ve seen in the default rates of many non-agency pools will continue. After…

(Operator Instructions). Your first question comes from the line of Steve DeLaney of JMP Securities. Steve DeLaney – JMP Securities: Hi, good morning everyone and congratulations on an excellent first quarter.

Thanks, good morning Steve. Steve DeLaney – JMP Securities: So, I wanted to follow-up on the commentary about the non-agency market that specifically rather than the legacy paper, I’m sure you guys are tracking the new issue RMBS 2.0 market. And we’re seeing, we saw that market back-up pretty significantly in March and I guess we’ve got AAAs now about 170 over-swaps and I compared that to CMBS which you mentioned with AAAs or Super Seniors at 85 over-swaps. And I was curious, your thoughts about that disparity between those two markets. And if you think new issue is attractive, especially Larry as you tied this into your origination capability which may, cause you to have some of your own paper. But as you look at this market right now at 170, and sort of up and down the capital stack at 170 over, in addition to your general comments, do you see it as a more attractive place for you to be an investor or to potentially be an issuer given those spreads? Thanks.

Sure, hi Steve, it’s Mark. Steve DeLaney – JMP Securities: Yeah, Mark.

So, yeah, I would say, if you look at the non-agency market, if you look at the new origination in non-agency, it’s still – it’s still small but I think what’s interesting is that there are few redwood deals that priced at the end of the last year at really tight levels, small volume. And as they ramped up the volume a little bit, they weren’t able to clear deals at the same spread to swaps as they had been so that caused – that caused the widening. When we look at those bonds, our view is that we still see better opportunities in legacy non-agencies. And I think the primary driver is the pre-payment function. So if we look at the legacy non-agency market, especially some of the sectors we’ve been buying, there are loans that maybe the borrowers are a little bit under water but not significantly they’ve seen home price gains in the past year. They are chip and wait their loan balanced through amortization. But you can still buy those securities assuming very slow rates of voluntary pre-payments. On the jumbo side, if you look at the – if you look at what the historical speeds, if you go back to the earlier Redwood deals from, 2011, beginning of 2012, what you see is the pre-payment function that you’re basically buying into those deals generally on par. And what you get is a prepayment function which loans can pay very fast, 35, 40 CPR if there is a rally in mortgage rates. But if there is a sell-off in mortgage rates you can get extremely slow speeds. So that prepayment volatility is a function of rates on a per coupon bond gives it higher hedging cost and that’s why – even though – it obviously looks…

And I’d like to just add one thing to that which is that, in addition to the much worse prepayment characteristics, the greater risk of extension payment on the new issue. We have to also realize that the new issues, they get ratings, they get fresher ratings right and it’s meant for banks, right. Banks and other people that are basically going to buy and hold them and they need that rating in order to buy them. A lot of the legacy stuff is never going to have the type of rating, just by virtue of the way that the rating agencies look at it, it is never going to have the kind of rating that a bank is going to need to be able to hold that in portfolios. So, if we buy something at a price of 80, right and we think you’re going to return $0.95 on the $1 but that’s not $0.100 on the $1 so the rating agencies are not going to give that the rating that someone needs. So there is always that – what I would call artificial aspect to it as well. Which is for us again draws us to the legacy where there is greater value. Steve DeLaney – JMP Securities: And that’s very helpful and I just a short follow-up. On the yield that you indicate on page 11, for your non-agency portfolio, using Europe HPA forecast. You’re in a north of 6%. We see a lot of fixed income research every week, or just a weekly structured finance pieces and everybody is kind of talking 3%, 4%, 5% type of yields on legacy non-agency. What’s the big difference there is it really just the scenario you have for defaults and severity versus what’s probably the dealers or pricing into their bonds? Hello?

Yes, sorry, we’re just thinking, I’m just going to take the call. So, yes, I think Mark..

I would say Steve that, we typically, we don’t just buy the market as a whole. If you look at our holdings they’re not representative of the markets. We have very little option arms. We’ve move around our sort of 06, 07 subprime exposure a lot. So I think when we look at the market. We look at where security head over time. We typically are involved in maybe 1% to 3% of what Jades in the given quarter and we’re selecting the 1%, 2% 3% that we think a couple of 100 basis points wider in the market. So, I think that’s it. Steve DeLaney – JMP Securities: Okay. It’s really just a specific asset selection and you just, you’re looking at it so granularly. You think you can find basically some hidden gems on their rather than just with the generic yield indication might be.

The research that you’re seeing certainly doesn’t cover things like manufactured housings, certainly doesn’t cover things like legacy CDOs and those are the two of the... Steve DeLaney – JMP Securities: Correct.

Asset class... Steve DeLaney – JMP Securities: Yes. Just generic-born AAA pass-throughs, yes. All right, well thank you so much for the comments and again great quarter.

Thank you, Steve.

Thanks, Steve.

(Operator Instructions). The next question comes from the line of Mike Widner of KBW. Michael Widner – KBW: Good morning, guys. I’m wondering if you could talk maybe a little bit more about kind of the things you threw out there on getting into mortgage originations, and I guess just specific couple of questions on that. Where would you see the infrastructure from that being sort of the house from a legal structure? Is that inside of EFC or is that back at the parent company or how might that work and it’s a little different being an operator than it is being a portfolio company and I guess we’ve always thought of you as a portfolio company. So, should that change our thinking at all?

Yes. No, I mean, I think – look, obviously this is all exploratory at this point, but from a structural standpoint, that’s one of the things that’s great about our structure. It is flexible. We can do things like this. But to preserve our PTP status, our past due tax treatment, we would house this in a corporate subsidiary, right? So any business like this would have to be housed in a corporate subsidiary. Of course, assets that are produced could be upstreams to the parent, but the actual operations would be in a corporate sub. So that’s I think the first sequential structure. And then just in terms of being an operating company, obviously, we would look to where we to do this. We would look to hook up with the best people in the space and I really can’t say more at this time. That’s really all that at this point. We’re just talking and exploring, but it’s something that we think the long range makes a lot of sense for us and as I mentioned for many different reasons. Michael Widner – KBW: Got you. I appreciate that. And let me just ask you a little bit, I mean you talked about some of these on the agency side but just maybe looking for some more current thoughts. I mean one of the best trades we see or at least most attractive yield opportunities we see, some of the other mortgage REITs talking about right now are sort of the TBA dollar roll market, foreign purchases, whatever on the low coupon Fannie 30s. And just wondering how you view that on a risk-adjusted return basis. I mean is that something that – I mean it’s hard to play that. I guess intuitively, it seems hard to play that as a hedge. I mean you’re already sure a bunch TBAs but I’m just wondering if you could talk a little bit how that trade, if you will, might fit into your strategy.

Sure, I think, there are definitely times when those trades makes sense in size because the fed – because of the size of its purchases and the fact that it creates a lot of short squeezes but then they’re using the mortgage market as the transmission mechanism of fed policy. They’re not like every other investors trying to make money so it created these short squeeze but they don’t monetize it so it opens the door for others to monetize it. So I think those trades can definitely make some sense part of a portfolio. I think that people need to realize that it is the premise of those trades and the attractiveness of those trades, our premise on people’s expectations of how long QE3 is going to stay in place potentially. So if you had a crystal ball and you knew when QE3 was going to end, that would definitely inform your opinion of that trade. We don’t have that crystal ball. So that’s why I think when it makes sense, it would make sense for us in – as part of a portfolio strategy but not the dominant one. I also think that those trades can get people away from their core competence and that we have a lot of prepayment data here. We think we understand a lot about how services behave. We understand a lot about how credit scores impact borrower’s ability to prepay, how LTVs impact borrower’s ability to prepay, how loan level price adjustments increase, impact borrower’s ability to prepay. When you get into the TBA market, you’re no longer leveraging that base of knowledge or that experience. So that’s another reason why for us, I think it can make sense, but as part of a portfolio, not as a dominant thing because it’s a commoditized trade. There’s no barrier to entry in it. The things that we have put a lot of our resources into and research about, trying to be thoughtful in understanding the payments, they don’t come to bear in that trade. I definitely think that they can look attractive and they make sense, but for us, because those – because of the fact that is very much – that attractiveness that’s very much contingent on the length of QE3, which we don’t have insight above and beyond market participant and the fact that it doesn’t leverage off any prepayment expertise would cause to keep it in a relatively small size. Michael Widner – KBW: That makes a lot of sense. And then, in essence, your – it’s like a paraphrase, I mean you’re sort of going into mindless trade that just happens to be generating great yields and great effect of returns right now but it’s just too unpredictable to make it a core part of the strategy in this particular vehicle?

I don’t think it’s mindless at all. I think there’s lots of ways to be a good manager in the space. But predicting interest rates, predicting Fed behavior, that’s not something where Ellington has put significant resources. So we don’t want to take significant risk on trades that the outcome is largely determined by those factors. I think they’re definitely managers in the space that put a lot more – general mortgage managers, that put a lot of resources into being thoughtful about direction of interest rate, shape of the yield curve, Fed policy activity. And I think if you put resources there and you have a good track record of doing it, I don’t consider it mindless. I just think that we haven’t built of our resources to predict Fed behavior the way we built up our resources to understand prepayment. And so for that reason while it looks attractive, we would limit the size of it. Michael Widner – KBW: Yes. Well, so I didn’t mean to be as integrating as it might have sounded with the term mindless but just really purely from the standpoint that it’s hard to find anything at all. And I’m not sure there is anything at all in the agency MBS space that month-to-month assuming the Fed’s going to continue QE Infinity that I just don’t see anywhere else you’re getting that kind of yield. So it’s a less complicated place to get month-to-month yield I think than trying to be very selective about specified pools and so on and so forth. To mindless just from the standpoint that it’s easy, it’s just you don’t know when it’s going to end.

Right. Michael Widner – KBW: Look, I appreciate the thoughts and comments as always, guys, and congrats on a solid quarter.

Thank you.

There are no further questions at this time. I would now like to turn the floor back to Larry Penn for any closing remarks.

Okay. Thanks, operator. Look everyone, we had a really strong first quarter building on our actual results in 2012. And as you can tell, there’s no shortage of interesting things to do in this market and we’re very excited about how the rest of 2013 is shaping up. So thanks everyone for participating on the call

Ladies and gentlemen, this concludes today’s Ellington Financial first quarter 2013 financial results conference call. Please disconnect your lines at this time and have a wonderful day.