Angel Oak Mortgage REIT, Inc. (NYSE:AOMR) is included among the 14 Best Up and Coming Dividend Stocks to Buy. UBS Adjusts Target on Angel Oak REIT (AOMR) Following Portfolio and Cost Optimizations Photo by Annie Spratt on Unsplash On November⁠ 18, UBS analyst Dou‌g⁠ Ha⁠rter trimm‍ed h‌is price targ⁠et o⁠n Angel Oak Mortgage REIT, Inc. (NYSE:AOMR) to‌ $9.75⁠ from $10 while maintai‍ni⁠ng a Neutral rating‌, as reported by The Fly. In its Q3 2025 u⁠pdate, Angel Oak Mortgage REIT, Inc. (NYSE:AOMR) noted tha ...

Core Viewpoint - KBRA has assigned preliminary ratings to eight classes of mortgage-backed certificates from Angel Oak Mortgage Trust 2025-12, which is a $322.0 million non-prime RMBS transaction [1] Summary by Relevant Categories Transaction Overview - The transaction involves a total of $322.0 million in mortgage-backed certificates [1] - It consists of 609 residential mortgages as the underlying collateral [1] Loan Characteristics - A significant concentration of the loans is underwritten using alternative income documentation [1] - 66.1% of the loans are classified as non-qualified mortgages (Non-QM) [1] - 33.9% of the loans are exempt from the Ability-to-Repay rule [1]

Financial Performance - In Q3 2025, net interest income increased by 12.9% compared to Q3 2024, driven by a $9.2 million rise in interest income and an $8.1 million increase in interest expense, resulting in a net growth of $1.2 million[149]. - Distributable Earnings for the three months ended September 30, 2025, were a gain of $0.5 million, compared to a loss of $3.4 million for the same period in 2024[159]. - Total comprehensive income for the three months ended September 30, 2025, was $15.1 million, compared to $33.9 million for the same period in 2024[166]. - Total comprehensive income for the nine months ended September 30, 2025, was $35.2 million, compared to $48.3 million in 2024[175]. - Cash flows used in operating activities were $354.5 million for the nine months ended September 30, 2025, compared to $196.4 million for the same period in 2024, primarily due to increased residential mortgage loan purchases[283]. Interest Income and Expense - Interest income for the three months ended September 30, 2025, was $36.7 million, an increase from $27.4 million in the same period of 2024[166]. - Total interest income for the nine months ended September 30, 2025, was $104.6 million, up from $78.6 million in 2024, while total interest expense increased to $74.4 million from $51.5 million[177]. - Total interest expense for the three months ended September 30, 2025, was $2.4 million, compared to $993,399 for the same period in 2024[274]. Asset Valuation and Portfolio - The 30-year fixed residential conforming mortgage rates decreased by 47 basis points to 6.30% by the end of Q3 2025, positively impacting the valuation of the company's portfolio[148]. - The weighted average price of the residential whole loans portfolio increased by approximately 63 basis points in Q3 2025 compared to Q2 2025, indicating a positive trend in asset pricing[148]. - The fair value of residential mortgage loans in securitization trusts was $1.862 billion as of September 30, 2025, with an unpaid principal balance of $1.893 billion and a weighted average loan coupon of 5.78%[203]. - As of September 30, 2025, the total portfolio consisted of approximately $2.5 billion in residential mortgage loans, RMBS, and other target assets, with a significant portion located in disaster-prone states[186]. Equity and Book Value - Total stockholders' equity increased to $264.2 million as of September 30, 2025, up from $239.0 million as of December 31, 2024[163]. - Book value per share of common stock rose to $10.60 as of September 30, 2025, compared to $10.17 as of December 31, 2024[163]. - Economic book value per share of common stock decreased to $12.72 as of September 30, 2025, from $13.10 as of December 31, 2024[165]. Financing and Borrowing - The company entered into a $200.0 million repurchase facility with Global Investment Bank 4 on October 6, 2025[155]. - The company maintained a total borrowing capacity of $1.1 billion as of September 30, 2025[155]. - The total unused borrowing capacity as of September 30, 2025, was $707.4 million, with specific lines having available financing of $347.9 million, $249.9 million, and $109.6 million respectively[254]. - The company utilized loan financing lines to acquire mortgage loans pending securitization, locking in funding costs through fixed-rate term securitization[226]. Securitization Activities - The company issued AOMT 2025-10, a securitization backed by residential mortgage loans with an unpaid principal balance of approximately $274.3 million, using proceeds to repay $237.4 million in outstanding debt[259]. - In the securitization transaction AOMT 2025-6, the company retained approximately $8.1 million, including a premium of $2.7 million, and repaid $73.1 million in outstanding debt[260]. - The company incurred securitization costs of $1.9 million for the nine months ended September 30, 2025, compared to $1.6 million in the same period of 2024[184]. Delinquency and Credit Quality - The percentage of loans 90+ days delinquent based on unpaid principal balance was 1.7% for residential mortgage loans held in securitization trusts as of September 30, 2025[203]. - The 90+ day delinquency rate as a percentage of UPB dropped to 0.2% in 2025, down from 2.3% in 2024[211]. - The weighted average credit score at loan origination for residential mortgage loans was 757 as of September 30, 2025[189]. Management and Operating Expenses - Operating expenses for the quarter ended September 30, 2025, decreased to $1.1 million from $1.5 million in 2024, attributed to lower acquisition costs of whole loans[171]. - Operating expenses for the nine months ended September 30, 2025, decreased to $3.7 million from $5.3 million in 2024, reflecting a reduction of approximately 30% due to cost-saving measures[181]. - Management fees incurred with affiliates remained stable at $1.2 million for both the quarter ended September 30, 2025, and 2024[174]. Future Outlook - The company expects to continue purchasing newly originated loans and HELOCs to support overall portfolio valuations and securitization execution going forward[148]. - The company anticipates two more interest rate cuts in 2025, although the recent government shutdown has introduced uncertainty regarding future rate paths[146].

Financial Performance - Q3 2025 GAAP net income was $11.4 million, or $0.46 per diluted share, showing a significant recovery from previous quarters[5]. - Net income allocable to common stockholders for the three months ended September 30, 2025, was $11,410, compared to $31,204 for the same period in 2024, indicating a decline of 63.5%[22]. - Distributable Earnings for Q3 2025 were $0.5 million, or $0.02 per diluted share[5]. - Distributable earnings for the nine months ended September 30, 2025, were $7,310, compared to a loss of $2,844 for the same period in 2024[22]. - Annualized distributable earnings for the three months ended September 30, 2025, were $2,116, compared to a loss of $13,460 for the same period in 2024[22]. Assets and Liabilities - Total assets were valued at $2.5 billion as of September 30, 2025[12]. - Total assets increased to $2,638,110, up from $2,269,769 as of December 31, 2024, representing a growth of approximately 16.2%[20]. - Total liabilities rose to $2,373,945, an increase from $2,030,802 as of December 31, 2024, reflecting a growth of approximately 16.9%[20]. - Cash and cash equivalents increased to $51,598 from $40,762 as of December 31, 2024, representing a growth of 26.5%[20]. Equity and Book Value - The GAAP book value per share was $10.60, reflecting a 2.2% increase from the previous quarter[5]. - Book value per share of common stock was $10.60 as of September 30, 2025, compared to $10.17 as of December 31, 2024, showing an increase of 4.23%[25]. - Economic book value per share of common stock decreased to $12.72 as of September 30, 2025, from $14.02 as of September 30, 2024, a decline of 9.2%[25]. - Retained earnings improved to a deficit of $209,242 as of September 30, 2025, compared to a deficit of $218,849 as of December 31, 2024, indicating a reduction in the deficit of approximately 4.4%[20]. Interest and Loans - Net interest income for Q3 2025 reached $10.2 million, an increase of 12.9% compared to Q3 2024 and a 2.4% increase from Q2 2025[5]. - As of September 30, 2025, the weighted average interest rate of the residential whole loans portfolio was 7.98%[7]. - The company purchased $237.6 million of newly-originated non-QM residential mortgage loans during Q3 2025, with a weighted average coupon of 7.74%[6]. Securitization and Debt - The company executed the AOMT 2025-10 securitization post-quarter, with an approximate $274.3 million scheduled unpaid principal balance[6]. - As of September 30, 2025, the company had a recourse debt to equity ratio of approximately 1.9x[12]. Dividends and Stock - The company declared a dividend of $0.32 per share, payable on November 26, 2025, to stockholders of record as of November 18, 2025[5][9]. - Common stock outstanding increased to 24,914,035 shares as of September 30, 2025, from 23,500,175 shares as of December 31, 2024[20].

Core Viewpoint - Angel Oak Mortgage (AOMR) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for November 6, and if the reported figures exceed expectations, the stock may experience an upward movement; conversely, a miss could lead to a decline [2]. - The consensus estimate for quarterly earnings is projected at $0.28 per share, reflecting a year-over-year increase of 300%, while revenues are expected to reach $37.25 million, marking a 35.8% increase from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 2.84%, indicating a reassessment by analysts regarding the company's earnings outlook [4]. - The Most Accurate Estimate for Angel Oak is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +7.14%, suggesting a bullish sentiment among analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - Angel Oak currently holds a Zacks Rank of 3, which, in conjunction with the positive Earnings ESP, suggests a likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Angel Oak was expected to post earnings of $0.27 per share but only achieved $0.11, resulting in a surprise of -59.26% [13]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [14]. Conclusion - While the potential for an earnings beat exists, other factors may also influence stock performance, making it essential for investors to consider the broader context beyond just earnings results [15][17].

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Core Insights - KBRA has assigned preliminary ratings to eight classes of mortgage-backed certificates from Angel Oak Mortgage Trust 2025-11, which is a $334.6 million non-prime RMBS transaction [1] - The underlying collateral consists of 723 fixed-rate residential mortgages, with a significant concentration of loans underwritten using alternative income documentation [1] - The loans are classified as either non-qualified mortgages (Non-QM) at 56.1% or exempt at 43.9% [1]

Core Insights - KBRA has assigned preliminary ratings to eight classes of mortgage-backed certificates from Angel Oak Mortgage Trust 2025-10, which is a $281.2 million non-prime RMBS transaction [1] - The underlying collateral consists of 608 residential mortgages, with a significant concentration of loans underwritten using alternative income documentation [1] - A notable 54.1% of the loans are classified as exempt from the Ability-to-Repay/Qualified Mortgage rule [1]

Group 1 - The focus is on income-producing asset classes such as REITs, ETFs, Preferreds, and 'Dividend Champions' that target premium dividend yields up to 10% [1] - iREIT®+HOYA Capital is highlighted as a premier income-focused investing service that offers sustainable portfolio income, diversification, and inflation hedging [2] - The Federal Reserve cut its benchmark interest rate by 25 basis points in September, marking the first cut since December, with indications of more cuts likely this year [3]