What changed in this filing

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Item 9A. Controls and Procedures

2021-03-16 compared with 2020-03-12 · 50 added, 27 removed, 84 unchanged (48% of the section changed)

17 unchanged sentences

Based on our assessment and those criteria, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.

The Company's independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the Company's internal control over financial reporting as of December 31, 2019.

Their report appears on page 65 of this Annual Report on Form 10-K.

Other Information

ADDITIONAL MATERIAL U.S.

FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain additional material U.S.

federal income tax considerations that you, as a shareholder, may consider relevant.

This summary supplements and, to the extent inconsistent, supersedes the discussion under “Material U.S.

Federal Income Tax Considerations” in the prospectus, effective as of December 30, 2020 (the “Prospectus”), as part of a registration statement on Form S-3 (No.

333-251141) filed with the SEC on December 4, 2020.

We have made an election under Section 475(f) of the Code to mark our securities to market effective as of January 1, 2021.

There are limited authorities under Section 475(f) of the Code as to what constitutes a trader for U.S.

federal income tax purposes.

Under other sections of the Code, the status of a trader in securities depends on all of the facts and circumstances, including the nature of the income derived from the taxpayer’s activities, the frequency, extent and regularity of the taxpayer’s securities transactions, and the taxpayer’s investment intent.

There can be no assurance that we will continue to qualify as a trader in securities eligible to make the mark-to-market election.

We have not received, nor are we seeking, an opinion from counsel or a ruling from the IRS regarding our qualification as a trader.

If our qualification for, or our application of, the mark-to-market election were successfully challenged by the IRS, in whole or in part, it could, depending on the circumstances, result in retroactive (or prospective) changes in the amount or timing of gross income we recognize.

As a result of our election under Section 475(f) of the Code, we will be required each year to mark-to-market certain securities that we hold, and thereby recognize gain or loss as if we had sold those securities for their fair market value.

As part of the transition to a mark-to-market election, we will take into account under Section 481(a) of the Code unrealized gains and losses existing at December 31, 2021 with respect to such securities.

The mark-to-market election also requires us to recognize any accrued market discount on our debt securities held at the end of each year.

Because we will be required to recognize gain or loss each year, we may have income without any corresponding cash (unless we actually sell the security).

While there is limited analogous authority, we intend to treat any of our mark-to-market gains as qualifying income for purposes of the 75% gross income test to the extent that the gain is recognized with respect to a qualifying real estate asset, based on an opinion of Hunton Andrews Kurth LLP substantially to the effect that any such gains recognized with respect to assets that would produce qualifying income for purposes of the 75% and/or 95% gross income test, as applicable, if they were actually sold should be treated as qualifying income to the same extent for purposes of the 75% and/or 95% gross income test, as applicable.

The opinion of Hunton Andrews Kurth LLP is based on various assumptions related to our election under Section 475(f) of the Code and is conditioned on fact-based representations and covenants.

No assurance can be given that the IRS would not assert that any mark-to-market gains were not qualifying income.

Furthermore, the law is unclear as to the treatment of mark-to-market gains and losses under the various REIT tax rules, including, among others, the prohibited transaction and qualified liability hedging rules.

There are limited and, in some cases, no authorities on the interaction of a REIT engaged in the trade or business of trading in securities, the election under Section 475(f) of the Code, the qualified liability hedging rules and the REIT tax rules.

If the IRS were to successfully treat our mark-to-market gains as subject to the prohibited transaction tax or to successfully challenge the treatment or timing of recognition of our mark-to-market gains or losses with respect to our qualified liability hedges, our distribution requirement could increase, or we could owe a material penalty tax.

See "—Failure to Qualify" in the Prospectus.

Directors, Executive Officers and Corporate Governance

2 unchanged sentences

Any waiver of our Code of Business Conduct and Ethics of our executive officers or trustees may be made only by our Board of Trustees or one of its committees.

officer, principal accounting officer or controller or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K by posting such information on our website at www.earnreit.com under the, "For Our Shareholders-Corporate Governance" section of the website.

We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers from any provision of our Code of Business Conduct and Ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K by posting such information on our website at www.earnreit.com under the, "For Our Shareholders-Corporate Governance" section of the website.

Executive Compensation

12 unchanged sentences

All financial statement schedules not included have been omitted because they are either inapplicable or the information required is provided in our Financial Statements and Notes thereto, included in Part II, Item 8, of this Annual Report on Form 10-K.

Exhibit Description

3.1 Articles of Amendment and Restatement of Ellington Residential Mortgage REIT filed on May 3, 2013 (incorporated by reference to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2013).

2 unchanged sentences

333-187662), filed on April 23, 2013).

Description of Securities

4.2 Description of Securities (incorporated by reference to the Company's annual report on Form 10-K filed on March 12, 2020).

10.1+ Fifth Amended and Restated Management Agreement between Ellington Residential Mortgage REIT and Ellington Residential Mortgage Management LLC, dated as of March 13, 2018 (incorporated by reference to the Company's annual report on Form 10-K (File No.

16 unchanged sentences

333-187662), filed on April 23, 2013).

Exhibit Description

21.1 List of Subsidiaries

7 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes – Oxley Act of 2002

The following financial information from Ellington Residential Mortgage REIT's Annual Report on Form 10-K for the year ended December 31, 2019, formatted in XBRL (Extensible Business Reporting Language):

(i) Consolidated Balance Sheet, (ii) Consolidated Statement of Operations, (iii) Consolidated Statement of Shareholders' Equity, (iv) Consolidated Statement of Cash Flows and (v) Notes to Consolidated Financial Statements.

101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB Inline XBRL Taxonomy Extension Label Linkbase

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Furnished herewith.

These certifications are not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Compensatory plan or arrangement.

+ Management or compensatory plan or arrangement.

Form 10-K Summary

1 unchanged sentence

ELLINGTON RESIDENTIAL MORTGAGE REIT

March 12, 2020

March 16, 2021 By:

/s/ L AURENCE P ENN

5 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and dates indicated.

/s/ L AURENCE P ENN

Chief Executive Officer, President and Trustee (Principal Executive Officer)

Signature Title Date

/s/ LAURENCE PENN Chief Executive Officer, President and Trustee (Principal Executive Officer)

March 16, 2021

LAURENCE PENN

/s/ C HRISTOPHER S MERNOFF

Chief Financial Officer (Principal Financial and Accounting Officer)

/s/ CHRISTOPHER SMERNOFF Chief Financial Officer (Principal Financial and Accounting Officer)

March 16, 2021

CHRISTOPHER SMERNOFF

/s/ M ICHAEL W.

March 12, 2020

/s/ T HOMAS F.

Chairman of the Board

March 12, 2020

/s/ R ONALD I.

March 12, 2020

/s/ R OBERT B.

A LLARDICE , III

March 12, 2020

/s/ MICHAEL W.

VRANOS Trustee March 16, 2021

/s/ ROBERT B.

ALLARDICE, III Chairman of the Board March 16, 2021

ALLARDICE, III

/s/ M ENES O.

March 12, 2020

/s/ D AVID M ILLER

March 12, 2020

/s/ RONALD I.

SIMON PH.D Trustee March 16, 2021

Trustee March 16, 2021

/s/ DAVID MILLER Trustee March 16, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures