Earnings Volatility From Mark-to-marketNet income is exposed to mark-to-market swings on mortgage securities and hedges, which can drive volatile results even when core interest income remains stable.
Premium Valuation Limits UpsideTrading at a premium to tangible book value suggests much of valuation improvement may be priced in, reducing scope for further share appreciation without additional fundamentals.
Regulatory And Market-volatility RiskRegulatory changes that affect prepayment behavior and speculation about policy or currency intervention could increase interest-rate and mortgage spread volatility, posing downside risk to performance.