Financial Data and Key Metrics Changes - GAAP net income for Q3 2024 was $31.2 million, or $1.29 per diluted common share, while distributed earnings resulted in a loss of $3.4 million, or $0.14 per common share due to unrealized gains exclusion and realized losses on hedges [20][21] - Interest income increased to $27.4 million, a 6% increase from the prior quarter and a 15% increase compared to Q3 2023, driven by rapid capital deployment [21] - Net interest income was $9 million, showing a slight decrease from the prior quarter but a 22% improvement over Q3 2023 [23][29] - GAAP book value increased by 10.3% and economic book value increased by 6.5% compared to Q2 2024, reflecting significant valuation gains across the portfolio [29][30] Business Line Data and Key Metrics Changes - The company purchased $264.8 million of loans in Q3 2024, with a weighted average coupon of approximately 7.74% and a weighted average loan-to-value (LTV) of 70.0% [25] - The residential whole loan portfolio had a weighted average coupon of 7.73%, nearly a 200 basis point increase from Q3 2023 [25] - As of the end of Q3, the unsecuritized loan balance was just over $200 million, expected to grow for future securitization [26] Market Data and Key Metrics Changes - The company noted a constructive macroeconomic cycle for the mortgage REIT sector, with historical trends indicating potential for significant growth and heightened capital markets activity [14] - Delinquencies remained low, with the total portfolio weighted average percentage of loans 90 days delinquent at 1.95%, stable over the past six quarters [35] Company Strategy and Development Direction - The company is focused on a disciplined operational strategy aimed at delivering consistent and attractive investor returns, prioritizing sustainable earnings generation [10][13] - There is a commitment to high-quality loan acquisitions and disciplined capital management, with plans for future securitizations to enhance the balance sheet [34][41] - The management believes in capitalizing on new opportunities in the non-QM space, which is gaining positive momentum [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, anticipating meaningful net interest income growth due to recent Fed rate cuts and successful capital deployment [12][41] - The company expects to maintain its dividend level, supported by ongoing investments and anticipated net interest margin expansion [44][68] Other Important Information - The company declared a $0.32 per share common dividend, payable on November 27, 2024 [40] - The recent securitization (AOMT 2024-10) contributed to a reduction in funding costs by over 110 basis points, enhancing capital efficiency [32][80] Q&A Session Summary Question: Expectations for new investment volume in the next few quarters - Management expects mid $200 million in origination and purchases for the next few quarters [43] Question: Clarification on book value comments - Approximately half of the book value increase has been given back as of today [44] Question: Pace of securitizations - The company targets one securitization per quarter, expecting two in Q4 2024 [46] Question: Execution of recent securitization - The October securitization was executed well, with a significant portion of the capital structure sold and retained positions [48][49] Question: Opportunity for stock buybacks - Currently, stock buybacks are not on the table, but management monitors the situation closely [56][58] Question: Loan delinquencies and modification activity - Modification activity is low due to home price appreciation, with delinquencies remaining stable [59] Question: Recycling legacy securitizations - Management discussed the potential to recycle legacy securitizations into new production to enhance returns [66][68] Question: Securitization economics and competition - The current securitization economics are favorable, with a focus on consistency and service over price competition [71][73]

Financial Performance - Angel Oak Mortgage REIT, Inc. reported a net interest margin (NIM) increase in Q3 2024 compared to Q3 2023, driven by higher interest income from target assets [134]. - Distributable Earnings for the three months ended September 30, 2024, was a loss of $3.4 million, compared to a loss of $8.6 million for the same period in 2023 [148]. - Net income allocable to common stockholders for the three months ended September 30, 2024, was $31.2 million, up from $8.3 million in 2023 [156]. - Interest income for the three months ended September 30, 2024, was $27.4 million, compared to $23.9 million in 2023 [156]. - Net interest income for the three months ended September 30, 2024, was $9.0 million, an increase from $7.4 million in 2023 [156]. - Total comprehensive income for the three months ended September 30, 2024, was $33.9 million, compared to $6.7 million in 2023 [156]. - Total realized and unrealized gains for the three months ended September 30, 2024, were $28.8 million, compared to $5.3 million in the same period of 2023, with gains on securitization being a significant contributor [159]. Asset Management - The company purchased $264.8 million of newly-originated non-QM residential mortgage loans in Q3 2024, with a weighted average coupon of 7.74%, a weighted average loan-to-value ratio (LTV) of 70.0%, and a weighted average credit score of 754 [137]. - The company executed the AOMT 2024-10 securitization in October 2024, contributing approximately $316.8 million in scheduled unpaid principal balance of residential mortgage loans [141]. - The weighted average price of the residential whole loans portfolio increased by approximately 261 basis points since the end of Q2 2024 [132]. - As of September 30, 2024, the portfolio consisted of approximately $2.2 billion in residential mortgage loans, RMBS, and other target assets [177]. - The total whole loan portfolio fair value was $1.88 billion as of September 30, 2024, with allocated capital of $195.0 million, representing 73.6% of total capital [178]. - The weighted average interest rate of residential mortgage loans in the portfolio was 7.73% as of September 30, 2024, with a range from 3.63% to 11.88% [182]. Financing and Liquidity - Total borrowing capacity was $1.1 billion as of September 30, 2024 [142]. - The company has identified various sources of financing, including securitizations and public or private offerings, to meet both short-term and long-term liquidity needs [219]. - The company’s minimum liquidity requirement was $10 million as of September 30, 2024 [221]. - Total unused borrowing capacity as of September 30, 2024, is $1,050 million, with $716.958 million available for financing [246]. - The company has short-term repurchase agreements totaling $102.876 million as of September 30, 2024, with a weighted average interest rate of 5.65% and a remaining maturity of 11 days [248]. - The total drawn amount across all financing facilities as of September 30, 2024, was $333.04 million, compared to $290.61 million as of December 31, 2023 [243]. Operational Efficiency - Operating expenses for the three months ended September 30, 2024, decreased to $1.3 million from $1.4 million in the same period of 2023 due to cost-saving measures [160]. - Management fees incurred with affiliates decreased to $1.2 million for the three months ended September 30, 2024, from $1.4 million in the same period of 2023, attributed to a reduction in average equity [165]. - Operating expenses for the nine months ended September 30, 2024, totaled $13.98 million, a decrease from $15.58 million in the same period of 2023, indicating effective cost management [166]. - Stock compensation expense rose to $0.6 million for the three months ended September 30, 2024, compared to $0.4 million in the same period of 2023, reflecting an increase in performance-based awards [163]. Market Conditions - Following the Federal Reserve's rate cut of 50 basis points in September 2024, the average 30-year fixed mortgage rate decreased by 78 basis points to 6.08% [132]. - As of the end of September 2024, inflation was reported at 2.4%, down from 2.9% at the end of June 2024, but still above the Fed's target [131]. Securitization Activities - The company participated in multiple securitizations throughout 2024, including AOMT 2024-3, AOMT 2024-4, and AOMT 2024-6, contributing significant amounts to each [138][139][140]. - The company expects to continue participating in securitization transactions to manage its mortgage-related assets effectively [218]. - The company participated in a securitization transaction in June 2024, issuing approximately $479.6 million in bonds and repaying $15.8 million in outstanding debt [255]. Risk Management - The company expects to utilize various derivative instruments to mitigate interest rate and credit risks [270]. - The company is subject to various financial covenants, including maintaining a minimum tangible net worth and a maximum ratio of total indebtedness to tangible net worth not exceeding 5:1 [221].

Core Viewpoint - Angel Oak Mortgage reported a quarterly loss of $0.14 per share, missing the Zacks Consensus Estimate of $0.21, and showing an earnings surprise of -166.67% [1][2] Financial Performance - The company posted revenues of $27.44 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 7.60%, compared to $23.9 million in the same quarter last year [2] - Over the last four quarters, Angel Oak has not surpassed consensus EPS estimates and has topped revenue estimates only once [2] Stock Performance - Angel Oak shares have declined approximately 14.7% since the beginning of the year, while the S&P 500 has gained 21.2% [3] - The current Zacks Rank for Angel Oak is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.25 on revenues of $32.6 million, and for the current fiscal year, it is $0.48 on revenues of $113.4 million [7] - The trend of estimate revisions for Angel Oak is mixed, which may change following the recent earnings report [6] Industry Context - The Financial - Mortgage & Related Services industry is currently in the top 8% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Financial Performance - Q3 2024 net interest income was $9.0 million, a 22% increase from $7.4 million in Q3 2023[2] - Year-to-date net interest income for the first nine months of 2024 reached $27.1 million, up 31% from $20.7 million in the same period of 2023[3] - Q3 2024 GAAP net income was $31.2 million, or $1.29 per diluted share[3] - Net income allocable to common stockholders for the three months ended September 30, 2024, was $31,204,000, up from $8,273,000 in the same period of 2023[22] - The company reported a distributable earnings return on average equity of (5.2)% for the three months ended September 30, 2024, compared to (14.8)% in the same period of 2023[23] Assets and Liabilities - The Company held total assets of $2.2 billion as of September 30, 2024[8] - Total assets as of September 30, 2024, were $2,303,866,000, slightly down from $2,308,011,000 as of December 31, 2023[20] - The total liabilities as of September 30, 2024, were $2,038,768,000, a decrease from $2,051,905,000 as of December 31, 2023[19] Shareholder Value - As of September 30, 2024, GAAP book value per share increased to $11.28, a 10.3% rise from $10.23 as of June 30, 2024[3] - The book value per share of common stock as of September 30, 2024, was $11.28, an increase from $9.29 as of September 30, 2023[24] - A dividend of $0.32 per share was declared on November 6, 2024, to be paid on November 27, 2024[10] Operational Highlights - The Company executed a securitization in October 2024, contributing loans with a scheduled unpaid principal balance of approximately $316.8 million[5] - During Q3 2024, the Company purchased $264.8 million of newly-originated non-QM residential mortgage loans with a weighted average coupon of 7.74%[5] - The company incurred total operating expenses of $3,821,000 for the three months ended September 30, 2024, down from $4,392,000 in the same period of 2023[18] Market Performance - Total realized and unrealized gains for the three months ended September 30, 2024, were $28,837,000, compared to $5,255,000 in the same period of 2023, reflecting a significant increase[18] - The fair value adjustment for securitized debt held at amortized cost was $64,522,000 as of September 30, 2024[24] Debt and Equity - As of September 30, 2024, the recourse debt to equity ratio was 1.8x, expected to remain below 2.5x[9] - The Company issued $50 million of senior unsecured notes with a 9.50% coupon on July 25, 2024, primarily for acquiring non-QM loans[7] - The weighted average number of common shares outstanding for the three months ended September 30, 2024, was 23,757,039, compared to 24,768,921 in the same period of 2023[18]

Welcome to another installment of our Preferreds Market Weekly Review, where we discuss preferred stock and baby bond market activity from both the bottom-up, highlighting individual news and events, as well as top-down, providing an overview of the broader market. We also try to addCheck out Systematic Income and explore our Income Portfolios, engineered with both yield and risk management considerations. Use our powerful Interactive Investor Tools to navigate the BDC, CEF, OEF, preferred and baby bond ma ...

gorodenkoff CDx3 Investor New offering summaries: Angel Oak Mortgage REIT (AOMR) priced an offering of $50 million worth of new exchange traded senior notes due 2029, offering a fixed coupon of 9.5%. The new notes, which may be redeemed by the company at par starting July 30, 2026, will provide funding for the company’s acquisition of residential mortgage investments as well as potential common stock repurchases. The new notes trade on the Nasdaq under symbol AOMN, where they were changing hands slight ...

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $0.3 million or a loss of $0.01 per common share for Q2 2024, while distributable earnings resulted in a loss of $2.3 million or $0.09 per common share [11] - Net interest income expanded for the fourth consecutive quarter, growing nearly 50% compared to Q2 2023, with interest income for the quarter at $25.9 million and net interest income at $9.5 million [12][13] - GAAP book value per share decreased 3% to $10.23 as of June 30, down from $10.55 in the first quarter, while economic book value decreased 4.5% to $13.16 per share [19] Business Line Data and Key Metrics Changes - The weighted average coupon of the residential whole loan portfolio increased to 7.71% as of the end of Q2 2024, a 60 basis point increase since the end of Q1 2024 [20] - The company purchased $114.4 million of loans with a weighted average coupon of approximately 7.9% during the quarter [19] Market Data and Key Metrics Changes - The weighted average 90-day delinquency rate across the portfolio was 1.7%, slightly down from 1.8% at the end of Q1 2024, indicating stable credit quality [9] - The company expects to maintain a recourse debt-to-equity ratio below 2.5 times on a long-term basis, with a current ratio of approximately 0.9 times [15] Company Strategy and Development Direction - The company plans to utilize the $750 million shelf registration for future capital raises and has already issued $50 million in senior unsecured notes to fund growth [7][21] - The strategy includes disciplined capital allocation, credit underwriting, and liquidity management, with a focus on acquiring high-quality, newly originated loans [10][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for a more accommodative rate environment, which could lead to reduced financing costs and increased portfolio valuations [22] - Concerns about potential economic downturns and heightened credit risk were acknowledged, but management believes their credit risk management capabilities provide a competitive advantage [23] Other Important Information - The company declared a $0.32 per share common dividend, payable on August 30, 2024 [21] - The company successfully closed a $50 million offering of senior unsecured notes due 2029, intended to support growth [20] Q&A Session Summary Question: Can you talk about maintaining the current dividend level with increasing NII? - Management indicated that they expect to maintain the dividend level, with coverage improving to about 80% this quarter [26] Question: What is your economic book value in July and August? - Management noted that they have not calculated the economic book value since the recent rate moves but expect it to be flat or up compared to June 30 [28] Question: How much growth do you think the unsecured issuance can provide net of the repurchase? - Management estimated that the net proceeds from the issuance could support approximately $1 billion in residential loan purchases over the next several quarters [31][45] Question: Are you seeing competition in the non-QM space? - Management stated that they consider themselves a leader in the non-QM space, with limited competition from the REIT industry, primarily facing competition from insurance companies [47]

Financial Performance - Angel Oak Mortgage REIT, Inc. reported a net interest margin (NIM) increase due to higher yields on target assets, despite holding fewer assets compared to Q2 2023[144]. - Distributable Earnings for Q2 2024 were a loss of $2.3 million, compared to a loss of $3.9 million in Q2 2023[153]. - Net interest income for Q2 2024 was $9.463 million, an increase from $6.452 million in Q2 2023[165]. - Interest income for Q2 2024 was $25.902 million, up from $23.763 million in Q2 2023[165]. - Net interest income for the three months ended June 30, 2024, was $9.5 million, an increase from $6.5 million in the same period of 2023, primarily due to higher asset yields despite lower average balances[168]. - Total interest income for the six months ended June 30, 2024, was $51.1 million, compared to $47.5 million for the same period in 2023, reflecting an increase in interest income from residential mortgage loans[180]. - The company reported a net income of $12.6 million for the six months ended June 30, 2024, compared to a net loss of $3.2 million in the same period of 2023[180]. - Total realized and unrealized gains (losses) for the six months ended June 30, 2024, resulted in a net gain of $5.2 million, compared to a loss of $(4.4) million for the same period in 2023[185]. Asset Management - The company purchased $114.4 million of newly-originated non-QM residential mortgage loans with a weighted average coupon of 7.93%, LTV of 70.4%, and credit score of 757 in Q2 2024[147]. - The weighted average price of the residential whole loans portfolio increased by approximately 216 basis points since the end of Q1 2024[142]. - The weighted average coupon of the residential whole loans portfolio rose by 60 basis points to 7.71% as of the end of Q2 2024[142]. - As of June 30, 2024, the portfolio consisted of approximately $1.9 billion in residential mortgage loans, RMBS, and other target assets[193]. - The weighted average interest rate of residential mortgage loans in the portfolio as of June 30, 2024, was 7.71%[200]. - The percentage of loans 90+ days delinquent based on unpaid principal balance (UPB) was 1.5% as of June 30, 2024[200]. - The portfolio's LTV (Loan-to-Value) at loan origination averaged 70.7% as of June 30, 2024[200]. Financing Activities - The company closed a public offering of $50 million in 9.500% Senior Notes due 2029, with proceeds intended for general corporate purposes and acquisition of non-QM loans[143]. - Total borrowing capacity was $1.1 billion as of June 30, 2024[149]. - The company has three warehouse loan financing lines allowing borrowings up to $1.1 billion as of June 30, 2024[250]. - The total unused borrowing capacity across all financing lines as of June 30, 2024, was $948.8 million[271]. - The financing facility with Multinational Bank 1 has an interest rate pricing spread of 1.75% as of June 25, 2024, and is set to expire on December 26, 2024[268]. - Global Investment Bank 2 has a new master repurchase agreement with a borrowing capacity of $250.0 million, set to terminate on March 27, 2026[257]. - The total drawn amount as of June 30, 2024 was $101.2 million, down from $290.6 million as of December 31, 2023[268]. Operational Efficiency - Operating expenses for the three months ended June 30, 2024, decreased to $1.3 million from $2.2 million in the same period of 2023, due to cost-saving measures[172]. - Operating expenses decreased to $3.3 million for the six months ended June 30, 2024, down from $4.4 million in 2023, due to cost-saving measures[186]. - The management fee incurred with affiliates decreased to $1.3 million for the three months ended June 30, 2024, from $1.5 million in the same period of 2023, attributed to a decrease in average equity[177]. - Management fees incurred with affiliates decreased to $2.6 million for the six months ended June 30, 2024, from $3.0 million in 2023[191]. Securitization Activities - Angel Oak executed the AOMT 2024-4 securitization, contributing approximately $300 million in scheduled unpaid principal balance of residential mortgage loans[142]. - The company participated in the AOMT 2024-6 securitization, contributing approximately $22.9 million in scheduled unpaid principal balance of residential mortgage loans[148]. - The company participated in a securitization transaction in June 2024, issuing approximately $479.6 million in face value of bonds, with a retained investment of approximately $2.5 million[278]. - Securitization costs for the three months ended June 30, 2024, were $1.4 million, an increase from $1.0 million in the same period of 2023, reflecting proportional allocations related to securitizations[176]. Risk Management - The company expects to utilize various derivative instruments and hedging strategies to mitigate interest rate and credit risks[288]. - The company expects quarter-to-quarter GAAP earnings volatility due to changes in the fair values of consolidated assets and liabilities[298]. - Margin call provisions are included in the agreements, allowing lenders to require cash transfers to eliminate margin deficits due to declines in market value[256]. Cash Flow and Liquidity - The cash flows provided by operating activities for the six months ended June 30, 2024, were $16,014,000, a significant decrease from $292,025,000 for the same period in 2023[292]. - The financing cash flows used for the six months ended June 30, 2024, were $(3,347,000), compared to $54,962,000 provided for the same period in 2023[295]. - The cash and cash equivalents as of June 30, 2024, were sufficient to meet liquidity covenants under financing facilities, with restricted cash of approximately $2.1 million[290].

Angel Oak Mortgage REIT, Inc. Second Quarter 2024 Earnings Supplement Important Notices References herein to our "Company," "ADWR," "we," "us," or "our" refer to Angel Oak Mortgage REIT, Inc. and its subsidiaries, including Angel Oak Mortgage Operating Partne "Operating Partnership"), unless the context requires otherwise. Unleas otherwise indicated, the term "Angel Oak" refers collectively to Angel Oak Captal Advisors, LLC ("# lts affillates, including Fakcons I, LLC, our external manager (our "Manager"), ...

Angel Oak Mortgage (AOMR) came out with a quarterly loss of $0.09 per share versus the Zacks Consensus Estimate of $0.13. This compares to loss of $0.16 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -169.23%. A quarter ago, it was expected that this real estate finance company would post earnings of $0.18 per share when it actually produced earnings of $0.11, delivering a surprise of -38.89%.Over the last four quarters, the ...