Angel Oak(AOMR)2025-03-04 15:19Financial Data and Key Metrics Changes - The company reported a GAAP net loss of 0.65 per common share for Q4 2024, while for the full year, GAAP net income was 1.17 per diluted common share [17][19] - Distributable earnings for Q4 were 0.42 per diluted common share, with full-year distributable earnings at 31.9 million, marking a 30% improvement compared to Q4 2023, and net interest income was 10.17 as of December 31, 2024, down from 855 million in scheduled unpaid principal balance [22][23] - The weighted average coupon of the residential whole loan portfolio increased by 61 basis points to 7.39% by year-end 2024 [21] Market Data and Key Metrics Changes - The total portfolio weighted average percentage of loans 90 days plus delinquent increased to 2.4% from 1.85% at the end of Q3 2024 [27] - The company noted that the securitization market remains active and receptive with tight spreads, indicating a favorable environment for capital recycling [12][23] Company Strategy and Development Direction - The company focuses on long-term earnings accretion, disciplined decision-making, and risk management to create shareholder value [7][8] - The capital deployment strategy is adaptive and flexible, aligning with evolving market dynamics to maximize returns [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term backdrop of the business, despite experiencing a decline in book value due to interest rate volatility [8][11] - The company expects interest income to continue growing through effective portfolio management and securitization execution [21] Other Important Information - The company declared a $0.32 per share common dividend, paid on February 28, 2025 [32] - The company has a small exposure to the California mortgage market, with minimal impact from recent wildfires [30][31] Q&A Session Summary Question: How insulated are the '21 to '23 vintages regarding prepayments? - Management indicated that significant declines in rates would be needed to trigger prepayments, estimating a drop of 150 to 200 basis points [37] Question: Can you discuss the outlook for net interest income (NII) in the next quarter? - Management confirmed a strong pipeline and expected continued growth in NII throughout 2025 [50][51] Question: What are the expectations for delinquencies moving forward? - Management anticipates a return to normalized levels of 2% to 3% for 90-day delinquencies, indicating a healthy credit environment [64] Question: What is the company's stance on repurchasing stock? - Management expressed a preference for building equity over stock buybacks, citing higher returns on incremental capital compared to the current dividend yield [59][60]