NEW YORK--(BUSINESS WIRE)-- #creditratingagency--KBRA assigns preliminary ratings to eight classes of mortgage-backed certificates from Angel Oak Mortgage Trust 2025-11 (AOMT 2025-11), a $334.6 million non-prime RMBS transaction. The underlying collateral, comprised of 723 fixed rate residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. All the loans are either classified as non-qualified mortgages (Non-QM) (56.1%) or exempt (43. ...

NEW YORK--(BUSINESS WIRE)-- #creditratingagency--KBRA assigns preliminary ratings to eight classes of mortgage-backed certificates from Angel Oak Mortgage Trust 2025-10 (AOMT 2025-10), a $281.2 million non-prime RMBS transaction. The underlying collateral, comprised of 608 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. All the loans are either classified as exempt (54.1%) from the Ability-to-Repay/Qualified Mortgage rule d ...

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[PART I. FINANCIAL INFORMATION](index=2&type=section&id=Part%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for Angel Oak Mortgage REIT, Inc [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=2&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements of Angel Oak Mortgage REIT, Inc. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with comprehensive notes providing detailed disclosures on the company's financial position, performance, and accounting policies [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (%) | | :--------------------------------------- | :----------------------------- | :------------------------------- | :--------- | | Total Assets | $2,554,488 | $2,269,769 | 12.5% | | Residential mortgage loans - at fair value | $200,665 | $183,064 | 9.6% | | Residential mortgage loans in securitization trusts - at fair value | $1,902,721 | $1,696,995 | 12.1% | | RMBS - at fair value | $361,884 | $300,243 | 20.5% | | Total Liabilities | $2,308,099 | $2,030,802 | 13.7% | | Non-recourse securitization obligation | $1,767,929 | $1,593,612 | 11.0% | | Due to broker | $254,228 | $201,994 | 25.9% | | Total Stockholders' Equity | $246,389 | $238,967 | 3.9% | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------------------------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :----------- | :------------------------------------------- | :------------------------------------------- | :----------- | | Interest income | $35,094 | $25,902 | 35.5% | $67,961 | $51,114 | 33.0% | | Interest expense | $25,154 | $16,439 | 53.0% | $47,934 | $33,072 | 44.9% | | **NET INTEREST INCOME** | **$9,940** | **$9,463** | **5.0%** | **$20,027** | **$18,042** | **11.0%** | | TOTAL REALIZED AND UNREALIZED GAINS (LOSSES), NET | $(4,075) | $(4,112) | (0.9%) | $9,368 | $5,150 | 81.9% | | Total operating expenses | $5,098 | $5,482 | (7.0%) | $8,097 | $10,162 | (20.3%) | | **NET INCOME (LOSS) ALLOCABLE TO COMMON STOCKHOLDERS** | **$767** | **$(273)** | **(380.9%)** | **$21,298** | **$12,601** | **69.0%** | | Basic earnings (loss) per common share | $0.03 | $(0.01) | (400.0%) | $0.90 | $0.51 | 76.5% | | Diluted earnings (loss) per common share | $0.03 | $(0.01) | (400.0%) | $0.89 | $0.50 | 78.0% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Stockholders' equity as of Dec 31 | $238,967 | $256,106 | | Issuance of common stock, net of expenses | $1,994 | — | | Dividends paid on common stock | $(15,125) | $(15,989) | | Stock compensation | $533 | $1,260 | | Unrealized gain (loss) on RMBS and CMBS | $(1,186) | $1,828 | | Net income (loss) | $21,298 | $12,601 | | Stockholders' equity as of June 30 | $246,389 | $255,806 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :----------- | | Net income (loss) | $21,298 | $12,601 | 69.0% | | Purchases of residential mortgage loans from affiliates | $(82,757) | $(98,069) | (15.7%) | | Purchases of residential mortgage loans from non-affiliates | $(323,135) | $(60,635) | 432.9% | | NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $(181,103) | $16,014 | (1230.8%) | | NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | $(5,769) | $(11,061) | (47.9%) | | Proceeds from issuances of common stock, net of expenses | $1,994 | — | N/A | | Proceeds from securitization | $269,915 | $274,793 | (1.8%) | | Net proceeds from issuance of senior notes | $41,161 | — | N/A | | NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | $188,346 | $(3,347) | (5726.9%) | | CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | $1,474 | $1,606 | (8.2%) | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) - The notes are prepared in conformity with Article 10-01 of Regulation S-X for interim financial statements and should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2024[30](index=30&type=chunk) - Management's estimates, particularly for fair value, credit losses, and prepayment rates, are inherently subjective and actual results may differ materially[32](index=32&type=chunk) - The company operates in a single operating segment focused on acquiring, investing in, and financing mortgage-related assets[35](index=35&type=chunk) [Note 1. Organization and Basis of Presentation](index=9&type=section&id=Note%201.%20Organization%20and%20Basis%20of%20Presentation) - The company's primary strategy is to invest in newly-originated first lien non-QM loans, substantially sourced from its affiliate, Angel Oak Mortgage Lending[25](index=25&type=chunk) - Angel Oak Mortgage REIT, Inc. is externally managed by Falcons I, LLC, an affiliate of Angel Oak Capital, and has elected to be taxed as a REIT since December 31, 2019[29](index=29&type=chunk) [Note 2. Variable Interest Entities](index=11&type=section&id=Note%202.%20Variable%20Interest%20Entities) - The company uses VIEs for securitizing whole mortgage loans to obtain long-term non-recourse financing[38](index=38&type=chunk) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------------------------------------------------------------ | :----------------------------- | :------------------------------- | | Aggregate unpaid principal balance of residential whole loans sold | $1,949,994 | $1,781,311 | | Residential mortgage loans in securitization trusts, at fair value | $1,902,721 | $1,696,995 | | Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts | $1,767,929 | $1,593,612 | | Weighted average coupon rate for residential mortgage loans in securitization trusts | 5.80% | 5.56% | | Weighted average fixed rate for Non-recourse securitization obligation issued | 4.14% | 3.86% | - During Q2 2025, the company and its affiliates issued and sold bonds with a current face value of **$261.3 million** to third-party investors, generating **$271.7 million** in proceeds[40](index=40&type=chunk) [Note 3. Residential Mortgage Loans](index=12&type=section&id=Note%203.%20Residential%20Mortgage%20Loans) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------ | :----------------------------- | :------------------------------- | | Fair value | $200,665 | $183,064 | | Unpaid principal balance | $193,268 | $178,373 | | Weighted average interest rate | 8.37% | 7.39% | | Weighted average remaining contractual maturity (years) | 29 | 30 | | Delinquency Status | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Number of mortgage loans 90+ days past due | 1 | — | | Recorded investment in mortgage loans 90+ days past due | $1,367 | — | | Number of mortgage loans in foreclosure | 2 | — | | Recorded investment in mortgage loans in foreclosure | $917 | — | [Note 4. Investment Securities](index=13&type=section&id=Note%204.%20Investment%20Securities) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :----------------------------- | :------------------------------- | | AOMT RMBS (at fair value) | $104,332 | $98,791 | | Whole Pool Agency RMBS (at fair value) | $257,552 | $201,452 | | Total RMBS (at fair value) | $361,884 | $300,243 | - Whole Pool Agency RMBS as of June 30, 2025, were purchased from a broker, with approximately **$254 million** owed, payable upon settlement[56](index=56&type=chunk) [Note 5. Financing](index=15&type=section&id=Note%205.%20Financing) | Note Payable | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------- | :----------------------------- | :------------------------------- | | Multinational Bank 1 | $77,603 | $100,711 | | Global Investment Bank 2 | $143 | $15,111 | | Global Investment Bank 3 | $40,873 | $13,637 | | **Total Notes Payable** | **$118,619** | **$129,459** | | Senior Unsecured Notes | Principal Amount (in thousands) | Interest Rate | Maturity | Net Proceeds (in thousands) | | :--------------------- | :------------------------------ | :------------ | :------- | :-------------------------- | | 2030 Notes (issued May 2025) | $42,500 | 9.750% | June 1, 2030 | $40,600 | | 2029 Notes (issued July 2024) | $50,000 | 9.500% | July 30, 2029 | $47,500 | - The company's total unused borrowing capacity for whole loan financing lines was **$931.38 million** as of June 30, 2025[64](index=64&type=chunk) [Note 6. Due to Broker](index=17&type=section&id=Note%206.%20Due%20to%20Broker) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------- | :----------------------------- | :------------------------------- | | Due to broker | $254,228 | $201,994 | - The "Due to broker" balance reflects a timing difference between the trade date and settlement date for Whole Pool Agency RMBS purchases, which are excluded from cash flows until settled[76](index=76&type=chunk)[77](index=77&type=chunk) [Note 7. Securities Sold Under Agreements to Repurchase](index=18&type=section&id=Note%207.%20Securities%20Sold%20Under%20Agreements%20to%20Repurchase) | Repurchase Agreements | June 30, 2025 (in thousands) | Weighted Average Interest Rate | Weighted Average Remaining Maturity (Days) | December 31, 2024 (in thousands) | Weighted Average Interest Rate | Weighted Average Remaining Maturity (Days) | | :-------------------- | :----------------------------- | :----------------------------- | :--------------------------------------- | :------------------------------- | :----------------------------- | :--------------------------------------- | | AOMT RMBS | $68,062 | 5.85% | 11 | $50,555 | 5.76% | 19 | - Restricted cash for margin collateral on repurchase agreements was **$1.2 million** at both June 30, 2025, and December 31, 2024[79](index=79&type=chunk) [Note 8. Derivative Financial Instruments](index=18&type=section&id=Note%208.%20Derivative%20Financial%20Instruments) - The company uses interest rate futures and TBA securities as economic hedges to mitigate interest rate and prepayment risk on whole loan investments[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) | Derivative Type | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net Realized Gains (Losses) on Interest rate futures | $(1,064) | $290 | $(2,536) | $3,839 | | Net Realized Gains (Losses) on TBAs | $(3,016) | $1,818 | $(1,853) | $2,124 | | Net Change in Unrealized Appreciation (Depreciation) on Interest rate futures | $(199) | $844 | $(2,134) | $1,048 | | Net Change in Unrealized Appreciation (Depreciation) on TBAs | $(4,629) | $1,748 | $(3,737) | $1,988 | [Note 9. Fair Value Measurements](index=19&type=section&id=Note%209.%20Fair%20Value%20Measurements) - The fair value hierarchy prioritizes market inputs: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[88](index=88&type=chunk) | Asset/Liability (at fair value) | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | | :------------------------------------------------------------------------------------------------ | :--------------------- | :--------------------- | :--------------------- | :------------------- | | **Assets:** | | | | | | Residential mortgage loans | $— | $199,043 | $1,622 | $200,665 | | Residential mortgage loans in securitization trusts | $— | $1,872,751 | $29,970 | $1,902,721 | | AOMT RMBS | $— | $104,332 | $— | $104,332 | | Whole Pool Agency RMBS | $— | $257,552 | $— | $257,552 | | **Liabilities:** | | | | | | Non-recourse securitization obligation, collateralized by residential mortgage loans | $— | $1,401,980 | $— | $1,401,980 | | Unrealized depreciation on futures contracts | $1,147 | $— | $— | $1,147 | | Unrealized depreciation on TBAs | $3,208 | $— | $— | $3,208 | | Level 3 Asset | Fair Value (in thousands) | Unobservable Input | Range | Average | | :------------------------------------------ | :------------------------ | :------------------------- | :---------- | :---------- | | Residential mortgage loans | $1,622 | Prepayment rate (annual CPR) | 13% - 13% | 13.28% | | | | Default rate | 15% - 15% | 15.34% | | | | Loss severity | (25.00)% - 10.00% | (7.81)% | | Residential mortgage loans in securitization trust | $29,970 | Prepayment rate (annual CPR) | 5.51% - 22.76% | 10.44% | | | | Default rate | 7.36% - 39.21% | 16.35% | | | | Loss severity | (25.00)% - 25.00% | 0.28% | [Note 10. Related Party Transactions](index=23&type=section&id=Note%2010.%20Related%20Party%20Transactions) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :----------------------------- | :------------------------------- | | Amount of Loans Purchased from Affiliates (YTD) | $82,757 | $255,368 | | Number of Loans Purchased from Affiliates (YTD) | 194 | 558 | - The management fee is **1.5%** per annum of the Company's Equity, payable quarterly in arrears[112](index=112&type=chunk) - An incentive fee may be earned based on Distributable Earnings, calculated as **15%** of the excess of Distributable Earnings over **8%** of the Company's Equity for the previous 12-month period; no incentive fee has been earned to date[113](index=113&type=chunk)[115](index=115&type=chunk) [Note 11. Commitments and Contingencies](index=24&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) - No material legal claims or unfunded commitments as of June 30, 2025[117](index=117&type=chunk) | Commitment Type | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------- | :---------------------------- | :------------------------------ | | Total purchase commitments | $181.0 | $152.6 | [Note 12. Accumulated Other Comprehensive Income/(Loss)](index=24&type=section&id=Note%2012.%20Accumulated%20Other%20Comprehensive%20Income%2F(Loss)) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------------------- | :------------------------------------------ | :------------------------------------------ | | AOCI balance, beginning of period | $(3,475) | $(4,975) | | Net unrealized gain/(loss) on AFS securities | $(1,186) | $1,828 | | AOCI balance, end of period | $(4,661) | $(3,147) | [Note 13. Other Assets](index=25&type=section&id=Note%2013.%20Other%20Assets) | Other Asset Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :----------------------------- | :------------------------------- | | Investments in Majority-Owned Affiliates | $20,992 | $20,680 | | Commercial Mortgage Loans, at fair value | $5,201 | $5,214 | | CMBS, at fair value | $5,297 | $5,593 | | Deferred tax asset | $3,457 | $3,457 | | Prepaid expenses | $2,447 | $1,095 | | Total other assets | $38,015 | $36,918 | - Investments in MOAs are accounted for as equity method investments and held at amortized cost, tested for impairment annually[122](index=122&type=chunk) [Note 14. Equity](index=25&type=section&id=Note%2014.%20Equity) - The company issued **215,622 shares** of common stock through its ATM Program for net proceeds of **$2.2 million** during the three and six months ended June 30, 2025[124](index=124&type=chunk)[269](index=269&type=chunk) - Approximately **$71 million** of gross proceeds remained available under the ATM Program as of June 30, 2025[269](index=269&type=chunk) [Note 15. Earnings per Share ("EPS")](index=25&type=section&id=Note%2015.%20Earnings%20per%20Share%20(%22EPS%22)) | EPS Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) to common stockholders - basic | $729 | $(302) | $21,226 | $12,547 | | Basic weighted average common shares outstanding | 23,524,735 | 24,810,021 | 23,460,798 | 24,792,918 | | Basic earnings (loss) per common share | $0.03 | $(0.01) | $0.90 | $0.51 | | Diluted earnings (loss) per common share | $0.03 | $(0.01) | $0.89 | $0.50 | [Note 16. Subsequent Events](index=26&type=section&id=Note%2016.%20Subsequent%20Events) - A dividend of **$0.32** per common share was declared on August 5, 2025, payable on August 29, 2025[128](index=128&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and key performance drivers for the periods presented. It covers the macroeconomic environment, recent strategic developments, non-GAAP financial metrics, detailed analysis of income and expenses, portfolio composition and characteristics, and liquidity and capital resources, including financing arrangements and cash flow analysis [General](index=29&type=section&id=General) - The company's strategy focuses on credit-sensitive investments, primarily newly-originated first lien non-QM loans sourced from Angel Oak Mortgage Lending[134](index=134&type=chunk) - The company benefits from Angel Oak's vertically integrated platform, providing proprietary access to non-QM loans and expertise in structured credit investments[136](index=136&type=chunk)[138](index=138&type=chunk) - A strategic transaction between Angel Oak Companies and Brookfield Asset Management Ltd. is expected to close in Q3 2025, with no material changes anticipated to the company's investment objectives or management team[139](index=139&type=chunk) [Trends and Recent Developments](index=31&type=section&id=Trends%20and%20Recent%20Developments) - Q2 2025 saw market volatility due to tariff announcements and inflation concerns, with Treasury yields decreasing for 2- and 5-year terms, and 30-year fixed mortgage rates increasing to **6.77%**[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - The company issued **$42.5 million** in **9.750%** Senior Notes due 2030 in May 2025, with net proceeds of **$40.6 million** used for general corporate purposes and asset acquisition[145](index=145&type=chunk) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :--------------------------------------- | :--------------------- | :--------------------- | :----------- | | Net Interest Income | $9,940 | $9,463 | 5.0% | | Net realized gain (loss) | $(2,499) | $(6,770) | (63.1%) | | Net unrealized gain (loss) | $(1,576) | $2,658 | (159.3%) | - During Q2 2025, the company purchased **$146.6 million** of newly-originated non-QM residential mortgage loans, Closed-End Seconds, and HELOCs, with a weighted average coupon of **8.68%**[149](index=149&type=chunk) - The company issued AOMT 2025-4 (**$284.3 million**) and participated in AOMT 2025-6 (**$349.7 million**) securitizations in Q2 2025, using proceeds to repay debt and for new loan purchases/operations[150](index=150&type=chunk)[151](index=151&type=chunk) [Key Financial Metrics](index=33&type=section&id=Key%20Financial%20Metrics) - Distributable Earnings is a non-GAAP measure used to evaluate financial performance and is a factor in dividend declarations, excluding unrealized gains/losses, impairment losses, and non-cash equity compensation[154](index=154&type=chunk) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net income (loss) allocable to common stockholders (GAAP) | $767 | $(273) | $21,298 | $12,601 | | **Distributable Earnings (Non-GAAP)** | **$2,639** | **$(2,301)** | **$6,782** | **$519** | | Distributable Earnings Return on Average Equity | 4.2% | (3.5%) | 5.5% | 0.4% | | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Total stockholders' equity (GAAP, in thousands) | $246,389 | $238,967 | | Book value per share of common stock (GAAP) | $10.37 | $10.17 | | Economic book value per share of common stock (Non-GAAP) | $12.97 | $13.10 | [Results of Operations](index=35&type=section&id=Results%20of%20Operations) [Three Months Ended June 30, 2025 and 2024](index=35&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :--------------------------------------- | :--------------------- | :--------------------- | :----------- | | Interest income | $35,094 | $25,902 | 35.5% | | Interest expense | $25,154 | $16,439 | 53.0% | | **NET INTEREST INCOME** | **$9,940** | **$9,463** | **5.0%** | | TOTAL REALIZED AND UNREALIZED GAINS (LOSSES), NET | $(4,075) | $(4,112) | (0.9%) | | Total operating expenses | $5,098 | $5,482 | (7.0%) | | NET INCOME (LOSS) ALLOCABLE TO COMMON STOCKHOLDERS | $767 | $(273) | (380.9%) | - Operating expenses decreased due to reduced fees associated with whole loan acquisition, while stock compensation decreased due to vesting of IPO awards. Securitization costs increased due to AOMT 2025-4 and AOMT 2025-6 securitizations[169](index=169&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) [Six Months Ended June 30, 2025 and 2024](index=38&type=section&id=Six%20Months%20Ended%20June%2030%2C%202024%20and%202024) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------------------------------------------------------------ | :------------------------------------------- | :------------------------------------------- | :----------- | | Interest income | $67,961 | $51,114 | 33.0% | | Interest expense | $47,934 | $33,072 | 44.9% | | **NET INTEREST INCOME** | **$20,027** | **$18,042** | **11.0%** | | TOTAL REALIZED AND UNREALIZED GAINS (LOSSES), NET | $9,368 | $5,150 | 81.9% | | Total operating expenses | $8,097 | $10,162 | (20.3%) | | NET INCOME (LOSS) ALLOCABLE TO COMMON STOCKHOLDERS | $21,298 | $12,601 | 69.0% | - Operating expenses decreased due to cost savings actions, in-sourcing of accounting functions, and vendor contract negotiations. Stock compensation decreased due to vesting of IPO awards[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) [Our Portfolio](index=42&type=section&id=Our%20Portfolio) - The total portfolio value was approximately **$2.5 billion** as of June 30, 2025, comprising residential mortgage loans, RMBS, and other target assets[184](index=184&type=chunk) | Portfolio Component | Fair Value (in thousands) | Collateralized Debt (in thousands) | Allocated Capital (in thousands) | % of Total Capital | | :--------------------------------------- | :------------------------ | :------------------------------- | :------------------------------- | :----------------- | | Residential mortgage loans | $200,665 | $118,619 | $82,046 | 33.3% | | Residential mortgage loans in securitization trust | $1,902,721 | $1,767,929 | $134,792 | 54.7% | | RMBS | $361,884 | $68,062 | $293,822 | 119.3% | | Total investment portfolio | $2,486,262 | $1,954,610 | $531,652 | 215.8% | [Residential Mortgage Loans](index=43&type=section&id=Residential%20Mortgage%20Loans) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Weighted average interest rate | 8.37% | 7.4% | | FICO score at loan origination (average) | 755 | 752 | | CLTV at loan origination (average) | 68.6% | 71.7% | | Percentage of first lien loans | 72.9% | 96.7% | | Percentage of loans 90+ days delinquent (based on UPB) | 1.1% | 0% | [Residential Mortgage Loans Held in Securitization Trusts](index=50&type=section&id=Residential%20Mortgage%20Loans%20Held%20in%20Securitization%20Trusts) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------- | :----------------------------- | :------------------------------- | | UPB | $1,949,994 | $1,781,311 | | Fair Value | $1,902,721 | $1,696,995 | | Number of loans | 4,564 | 4,183 | | Weighted average loan coupon | 5.80% | 5.6% | | Weighted average credit score at loan origination and deal date | 744 | 743 | | Current 3-month constant prepayment rate ("CPR") | 9.9% | 7.4% | | Percentage of loans 90+ days delinquent (based on UPB) | 1.4% | 2.0% | [RMBS](index=54&type=section&id=RMBS) | RMBS Type | June 30, 2025 Fair Value (in thousands) | December 31, 2024 Fair Value (in thousands) | | :-------------------- | :-------------------------------------- | :-------------------------------------- | | AOMT RMBS | $104,332 | $98,791 | | Third Party RMBS (Whole Pool) | $257,552 | $201,452 | | **Total RMBS** | **$361,884** | **$300,243** | | AOMT Securitization Vintage | UPB of loans (in thousands) | Weighted average loan coupon | Weighted average credit score | 90+ day delinquency (% of UPB) | | :-------------------------- | :-------------------------- | :--------------------------- | :---------------------------- | :------------------------------ | | 2019 | $266,418 | 7.14% | 708 | 9.2% | | 2020 | $141,846 | 5.81% | 720 | 2.3% | | 2023 | $1,033,497 | 5.21% | 732 | 3.6% | | 2024 | $1,092,647 | 5.75% | 736 | 2.0% | | 2025 | $348,086 | 7.65% | 751 | 0% | [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary financing sources include principal/interest payments, unused borrowing capacity from loan financing lines and repurchase facilities, securitizations, and the ATM Program[223](index=223&type=chunk) - The company maintains three warehouse loan financing lines with an aggregate borrowing capacity of up to **$1.1 billion** as of June 30, 2025[227](index=227&type=chunk) | Financing Line | Borrowing Capacity (in thousands) | Drawn Amount (in thousands) | Available Financing (in thousands) | | :----------------------- | :-------------------------------- | :-------------------------- | :--------------------------------- | | Multinational Bank 1 | $600,000 | $77,603 | $522,397 | | Global Investment Bank 2 | $250,000 | $143 | $249,857 | | Global Investment Bank 3 | $200,000 | $40,873 | $159,127 | | **Total** | **$1,050,000** | **$118,619** | **$931,381** | - The company issued **$42.5 million** in **9.750%** Senior Notes due 2030 in May 2025 and **$50 million** in **9.500%** Senior Notes due 2029 in July 2024 to fund asset acquisitions and for general corporate purposes[267](index=267&type=chunk)[268](index=268&type=chunk) - Cash and cash equivalents were **$40.5 million** and restricted cash was **$3.9 million** as of June 30, 2025, deemed sufficient to meet liquidity covenants and potential margin calls[8](index=8&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk) [Overview](index=61&type=section&id=Overview) - Liquidity sources include principal/interest payments, unused borrowing capacity, securitizations, and the ATM Program[223](index=223&type=chunk) - The company uses loan financing lines for short-term asset acquisition and fixed-rate term securitization funding for long-term financing[224](index=224&type=chunk) - The company may raise additional capital through public or private offerings of equity, equity-related, or debt securities[223](index=223&type=chunk) [Description of Existing Financing Arrangements](index=61&type=section&id=Description%20of%20Existing%20Financing%20Arrangements) - The company had three warehouse loan financing lines with an aggregate borrowing capacity of up to **$1.1 billion** as of June 30, 2025[227](index=227&type=chunk) - Financing facilities are subject to advance rates (**60%-92%**) and restrictive covenants, including minimum tangible net worth, maximum debt-to-tangible net worth (**5:1**), and minimum liquidity (**$10.0 million**)[228](index=228&type=chunk) - The Multinational Bank 1 facility was renewed through December 25, 2025, with an interest rate spread of **1.65%-2.10%** over average daily SOFR[231](index=231&type=chunk)[232](index=232&type=chunk) - The Global Investment Bank 2 facility was updated in March 2024 and extended through March 27, 2026, with an interest rate spread of **1.75%-3.35%** over 1-month Term SOFR[237](index=237&type=chunk)[238](index=238&type=chunk) - The Global Investment Bank 3 facility's termination date was extended to November 1, 2025, with an interest rate spread of **1.90%-4.75%** over Compound SOFR[244](index=244&type=chunk) [Short-Term Repurchase Facilities](index=65&type=section&id=Short-Term%20Repurchase%20Facilities) - Short-term repurchase facilities are used to borrow against U.S. Treasury securities, AOMT securities, and other securities to add leverage and increase asset yield[252](index=252&type=chunk)[254](index=254&type=chunk) | Repurchase Agreements | June 30, 2025 (in thousands) | Weighted Average Interest Rate | Weighted Average Remaining Maturity (Days) | | :-------------------- | :----------------------------- | :----------------------------- | :--------------------------------------- | | AOMT RMBS | $68,062 | 5.85% | 11 | | Quarter | Quarter End Balance (in thousands) | Average Balance in Quarter (in thousands) | Highest Month-End Balance in Quarter (in thousands) | | :------ | :--------------------------------- | :---------------------------------------- | :-------------------------------------------------- | | Q2 2025 | $68,062 | $71,980 | $148,467 | | Q1 2025 | $148,467 | $62,631 | $148,467 | | Q4 2024 | $50,555 | $53,412 | $51,843 | [Securitization Transactions](index=66&type=section&id=Securitization%20Transactions) - In May 2025, the company participated in AOMT 2025-6, a **$349.7 million** securitization, contributing **$87.2 million** in loans and receiving **$9.2 million** cash after repaying **$73.1 million** debt[255](index=255&type=chunk) - In April 2025, the company was the sole participant in AOMT 2025-4, a **$284.3 million** securitization, using proceeds to repay **$242.4 million** debt and retaining **$24.7 million** cash[256](index=256&type=chunk) - The company consolidated AOMT 2024-10 and AOMT 2024-4 securitizations on its balance sheet, maintaining the residential mortgage loans and related financing obligations[260](index=260&type=chunk)[264](index=264&type=chunk) [Notes Offerings](index=67&type=section&id=Notes%20Offerings) - Issued **$42.5 million** in **9.750%** Senior Notes due 2030 in May 2025, with net proceeds of **$40.6 million**[267](index=267&type=chunk) - Issued **$50 million** in **9.500%** Senior Notes due 2029 in July 2024, with net proceeds of **$47.5 million**[268](index=268&type=chunk) - Both 2029 and 2030 Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Operating Partnership[267](index=267&type=chunk)[268](index=268&type=chunk) [ATM Program](index=67&type=section&id=ATM%20Program) - The ATM Program allows for the sale of up to **$75 million** in common stock[269](index=269&type=chunk) - **215,622 shares** were sold for **$2.2 million** net proceeds during the three and six months ended June 30, 2025[269](index=269&type=chunk) - Approximately **$71 million** of gross proceeds remained available under the ATM Program as of June 30, 2025[269](index=269&type=chunk) [Leverage and Hedging Strategies](index=67&type=section&id=Leverage%20and%20Hedging%20Strategies) - The company uses a prudent amount of leverage, adjusted based on portfolio characteristics, financing availability, and market conditions[270](index=270&type=chunk) - Derivative instruments like interest rate swaps, futures, and options are used to mitigate interest rate and credit risks, subject to REIT qualification and Investment Company Act exclusion[271](index=271&type=chunk) [Cash Availability](index=67&type=section&id=Cash%20Availability) | Cash Type | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $40,500 | $40,762 | | Restricted cash | $3,867 | $2,131 | - Cash balance is sufficient to meet liquidity covenants and potential margin calls; no margin collateral was required as of June 30, 2025, or December 31, 2024[272](index=272&type=chunk) - Restricted cash primarily comprises interest rate futures margin collateral (**$2.7 million**) and margin collateral for securities sold under repurchase agreements (**$1.2 million**) as of June 30, 2025[273](index=273&type=chunk) [Cash Flows](index=68&type=section&id=Cash%20Flows) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :----------- | | Cash flows provided by (used in) operating activities | $(181,103) | $16,014 | (1230.8%) | | Cash flows provided by (used in) investing activities | $(5,769) | $(11,061) | (47.9%) | | Cash flows provided by financing activities | $188,346 | $(3,347) | (5726.9%) | - Residential loan activity is classified as operating cash flow, while commercial mortgage loan activity is classified as investing cash flow[278](index=278&type=chunk) [Critical Accounting Policies and Estimates](index=68&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Critical accounting policies and estimates, including fair value, credit losses, and prepayment rates, have not materially changed since December 31, 2024[279](index=279&type=chunk) - The company expects quarter-to-quarter GAAP earnings volatility, particularly from fair value changes of consolidated assets and liabilities[280](index=280&type=chunk) [Recent Accounting Pronouncements](index=68&type=section&id=Recent%20Accounting%20Pronouncements) - No recent ASUs are expected to have a significant impact on the condensed consolidated financial statements[34](index=34&type=chunk)[281](index=281&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Angel Oak Mortgage REIT, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[283](index=283&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they were effective. There have been no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[284](index=284&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter[285](index=285&type=chunk) [PART II. OTHER INFORMATION](index=70&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity security sales, defaults on senior securities, other information, and a list of exhibits [ITEM 1. LEGAL PROCEEDINGS](index=70&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings during the quarter ended June 30, 2025 - No legal proceedings were reported[286](index=286&type=chunk) [ITEM 1A. RISK FACTORS](index=70&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the principal risk factors previously disclosed in the Annual Report on Form 10-K. The risks outlined in the 10-K remain relevant, and additional unknown risks may also affect the business - No material changes to principal risk factors from the Annual Report on Form 10-K[287](index=287&type=chunk) - Readers should refer to Item 1A. "Risk Factors" in the Annual Report on Form 10-K for a comprehensive discussion of potential risks[130](index=130&type=chunk)[287](index=287&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or issuer purchases of equity securities during the quarter ended June 30, 2025 - No unregistered sales of equity securities or issuer purchases of equity securities occurred during the quarter[288](index=288&type=chunk)[289](index=289&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=70&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the quarter ended June 30, 2025 - No defaults upon senior securities were reported[290](index=290&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=70&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[291](index=291&type=chunk) [ITEM 5. OTHER INFORMATION](index=70&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025[292](index=292&type=chunk) [ITEM 6. EXHIBITS](index=71&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents, indentures for senior notes, certifications (CEO, CFO), and XBRL-related documents - The exhibits include Articles of Amendment, Supplemental Indentures for Senior Notes, CEO and CFO certifications (Sarbanes-Oxley Act), and XBRL documents[293](index=293&type=chunk) [Signatures](index=72&type=section&id=Signatures) The report is duly signed on behalf of Angel Oak Mortgage REIT, Inc. by Sreeniwas Prabhu, Chief Executive Officer and President, and Brandon R. Filson, Chief Financial Officer and Treasurer, as of August 6, 2025 - The report is signed by Sreeniwas Prabhu (CEO and President) and Brandon R. Filson (CFO and Treasurer) on August 6, 2025[297](index=297&type=chunk)

Core Viewpoint - Angel Oak Mortgage (AOMR) reported quarterly earnings of $0.11 per share, missing the Zacks Consensus Estimate of $0.27 per share, and compared to a loss of $0.09 per share a year ago, indicating a significant earnings surprise of -59.26% [1] Financial Performance - The company posted revenues of $35.09 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.95%, and showing an increase from year-ago revenues of $25.9 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Performance - Angel Oak shares have added about 1.6% since the beginning of the year, underperforming the S&P 500's gain of 7.6% [3] - The current status translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.32 on $38.4 million in revenues, and $1.10 on $147.52 million in revenues for the current fiscal year [7] - The estimate revisions trend for Angel Oak was mixed ahead of the earnings release, which could change following the company's report [6] Industry Context - The REIT and Equity Trust industry is currently in the top 38% of the Zacks industries, suggesting that the outlook for the industry can materially impact stock performance [8]

[Company Overview](index=1&type=section&id=Company_Overview) Angel Oak Mortgage REIT, Inc. (AOMR) is a real estate finance company focused on non-QM loans, with the CEO highlighting Q2 2025 capital market activities and expected net interest income growth [Company Introduction](index=1&type=section&id=Company_Introduction) Angel Oak Mortgage REIT, Inc. (AOMR) is a real estate finance company specializing in acquiring and investing in first lien non-QM loans and other mortgage-related assets in the U.S. mortgage market, aiming for attractive risk-adjusted returns - **Angel Oak Mortgage REIT, Inc. (AOMR)** is a real estate finance company focused on acquiring and investing in first lien non-QM loans and other mortgage-related assets in the U.S. mortgage market[1](index=1&type=chunk)[15](index=15&type=chunk) - The Company's objective is to generate **attractive risk-adjusted returns** for its stockholders through cash distributions and capital appreciation across interest rate and credit cycles[15](index=15&type=chunk) [CEO Commentary](index=1&type=section&id=CEO_Commentary) The CEO highlighted an active Q2 2025, marked by two securitizations and a **$42.5 million** senior unsecured notes issuance, supporting strategic goals of earnings growth and diligent capital deployment - Completed two securitizations and issued **$42.5 million of senior unsecured notes** in Q2 2025[3](index=3&type=chunk) - Capital from senior unsecured notes was quickly deployed into **high-quality, current market coupon non-QM loans** and other target assets[3](index=3&type=chunk) - Expects to resume **quarterly sequential net interest income growth** in the next quarter, demonstrating commitment to growing long-term shareholder value[3](index=3&type=chunk) [Second Quarter 2025 and Year-to-Date Highlights](index=1&type=section&id=Second_Quarter_2025_and_Year-to-Date_Highlights) Q2 2025 highlights include **$0.8 million** GAAP net income, significant securitization and debt issuance, and a **$0.32 per share** dividend [Financial Performance Highlights](index=1&type=section&id=Financial_Performance_Highlights) Q2 2025 saw GAAP net income of **$0.8 million** and Distributable Earnings of **$2.6 million**, with net interest income increasing 5.0% year-over-year but slightly decreasing quarter-over-quarter, and minor declines in book values per share Q2 2025 Key Financial Metrics (in millions) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | Q1 2025 | Change (QoQ) | | :-------------------------------- | :------ | :------ | :----------- | :------ | :----------- | | GAAP Net Income | $0.8 | | | | | | Diluted EPS (GAAP) | $0.03 | | | | | | Net Interest Income | $9.9 | $9.5 | +5.0% | $10.1 | -1.5% | | Net Interest Income (YTD) | $20.0 | $18.0 | +11% | | | | Distributable Earnings | $2.6 | | | | | | Diluted EPS (Distributable) | $0.11 | | | | | Book Value per Share (as of June 30, 2025) | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | | :-------------------- | :------------ | :------------- | :----------- | | GAAP Book Value | $10.37 | $10.70 | -3.1% | | Economic Book Value | $12.97 | $13.41 | -3.3% | [Portfolio and Investment Activity](index=1&type=section&id=Portfolio_and_Investment_Activity) The company completed two securitizations in Q2 2025, AOMT 2025-4 (**$284.3 million**) and AOMT 2025-6 (contributed **$87.2 million**), using proceeds to repay debt and for new loan purchases, including **$146.6 million** of non-QM residential mortgage loans - Issued AOMT 2025-4, a **$284.3 million securitization**, using proceeds to repay **$242.4 million debt** and releasing **$24.7 million cash** for new loan purchases and operations[6](index=6&type=chunk) - Participated in AOMT 2025-6, contributing **$87.2 million in loans** to a **$349.7 million securitization**, repaying **$73.1 million debt** and releasing **$9.2 million cash** for operations[6](index=6&type=chunk) - Purchased **$146.6 million of newly-originated non-QM residential mortgage loans and HELOCs** with a **weighted average coupon of 8.68%**[6](index=6&type=chunk) - Weighted average coupon of the residential whole loans portfolio increased by **66 basis points to 8.37%** as of June 30, 2025, compared to June 30, 2024[6](index=6&type=chunk) [Capital Markets Activity](index=2&type=section&id=Capital_Markets_Activity) In May 2025, the company issued **$42.5 million** in 9.750% Senior Notes due 2030, generating net proceeds of approximately **$40.6 million** for general corporate purposes, and maintained **$931.4 million** in available borrowing capacity - Issued **$42.5 million in 9.750% Senior Notes due 2030**, with net proceeds of approximately **$40.6 million** used for general corporate purposes, including non-QM loan acquisitions[11](index=11&type=chunk) - As of June 30, 2025, the Company had **$931.4 million in available capacity** across three loan financing lines, with total target assets of **$2.5 billion**[11](index=11&type=chunk) - The Company's **recourse debt to equity ratio was approximately 1.1x** as of June 30, 2025[11](index=11&type=chunk) [Dividend Declaration](index=1&type=section&id=Dividend_Declaration) A dividend of **$0.32 per share** of common stock was declared on August 5, 2025, payable on August 29, 2025, to stockholders of record as of August 22, 2025 - Declared a **dividend of $0.32 per share of common stock**, payable on August 29, 2025, to stockholders of record as of August 22, 2025[5](index=5&type=chunk)[8](index=8&type=chunk) [Non-GAAP Metrics Definitions](index=2&type=section&id=Non-GAAP_Metrics_Definitions) This section defines key non-GAAP measures including Distributable Earnings and Economic Book Value, outlining their calculation, utility for peer comparison, and limitations [Distributable Earnings Definition](index=2&type=section&id=Distributable_Earnings_Definition) Distributable Earnings is a non-GAAP measure derived from GAAP net income (loss) by excluding specific items, intended to facilitate REIT peer comparisons despite its inherent limitations - **Distributable Earnings** is a non-GAAP measure, calculated by adjusting GAAP net income (loss) for common stockholders by excluding specific items like unrealized gains/losses, impairment losses, and non-cash equity compensation[10](index=10&type=chunk) - This metric is intended to facilitate comparisons among REIT peers but should not be viewed in isolation or as a substitute for GAAP net income due to its inherent limitations[10](index=10&type=chunk) [Distributable Earnings Return on Average Equity Definition](index=3&type=section&id=Distributable_Earnings_Return_on_Average_Equity_Definition) Distributable Earnings Return on Average Equity is a non-GAAP measure calculated as annual or annualized Distributable Earnings divided by average total stockholders' equity, providing additional insight for peer comparisons but not substituting GAAP net income - **Distributable Earnings Return on Average Equity** is a non-GAAP measure defined as annual or annualized Distributable Earnings divided by average total stockholders' equity[12](index=12&type=chunk) - This measure offers additional insight into the Distributable Earnings generated by invested equity capital and is useful for peer comparisons, but it is not a substitute for GAAP net income[12](index=12&type=chunk) [Economic Book Value Definition](index=3&type=section&id=Economic_Book_Value_Definition) Economic book value is a non-GAAP measure that adjusts GAAP total stockholders' equity by fair valuing portions of non-recourse financing obligations held at amortized cost, offering a supplemental view of financial position without replacing GAAP book value - **Economic book value** is a non-GAAP measure that adjusts GAAP total stockholders' equity by fair valuing portions of non-recourse financing obligations held at amortized cost[13](index=13&type=chunk) - It provides a supplemental view of financial position by reflecting fair value changes for retained bonds, regardless of GAAP accounting, but should not be considered a substitute for GAAP book value[13](index=13&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed_Consolidated_Financial_Statements) This section presents condensed consolidated statements of operations and balance sheets, detailing Q2 2025 net interest income, net income, and total assets of **$2.55 billion** [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Condensed_Consolidated_Statements_of_Operations_and_Comprehensive_Income_Loss) For Q2 2025, net interest income was **$9.94 million**, up from **$9.46 million** in Q2 2024, with net income allocable to common stockholders significantly improving to **$0.77 million** from a loss of **$0.27 million** in Q2 2024 Condensed Consolidated Statements of Operations (Selected Items) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest income | $35,094 | $25,902 | $67,961 | $51,114 | | Interest expense | $25,154 | $16,439 | $47,934 | $33,072 | | **NET INTEREST INCOME** | **$9,940** | **$9,463** | **$20,027** | **$18,042** | | Total realized and unrealized gains (losses), net | $(4,075) | $(4,112) | $9,368 | $5,150 | | Total operating expenses | $5,098 | $5,482 | $8,097 | $10,162 | | **NET INCOME (LOSS) ALLOCABLE TO COMMON STOCKHOLDERS** | **$767** | **$(273)** | **$21,298** | **$12,601** | | Basic earnings (loss) per common share | $0.03 | $(0.01) | $0.90 | $0.51 | | Diluted earnings (loss) per common share | $0.03 | $(0.01) | $0.89 | $0.50 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed_Consolidated_Balance_Sheets) As of June 30, 2025, total assets increased to **$2.55 billion** from **$2.27 billion** at December 31, 2024, driven by growth in residential mortgage loans and RMBS, while total liabilities rose to **$2.31 billion** and total stockholders' equity grew to **$246.39 million** Condensed Consolidated Balance Sheets (Selected Items) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------ | :---------------- | | Residential mortgage loans - at fair value | $200,665 | $183,064 | | Residential mortgage loans in securitization trusts - at fair value | $1,902,721 | $1,696,995 | | RMBS - at fair value | $361,884 | $300,243 | | **Total assets** | **$2,554,488** | **$2,269,769** | | Non-recourse securitization obligation | $1,767,929 | $1,593,612 | | Senior unsecured notes | $88,601 | $47,740 | | **Total liabilities** | **$2,308,099** | **$2,030,802** | | **Total stockholders' equity** | **$246,389** | **$238,967** | [Non-GAAP Reconciliations](index=6&type=section&id=Non-GAAP_Reconciliations) This section reconciles GAAP net income to Distributable Earnings and stockholders' equity to Economic Book Value, detailing adjustments and key non-GAAP financial metrics [Reconciliation of Net Income (Loss) to Distributable Earnings](index=6&type=section&id=Reconciliation_of_Net_Income_Loss_to_Distributable_Earnings) For Q2 2025, Net Income allocable to common stockholders was **$0.77 million**, which, after various adjustments, resulted in Distributable Earnings of **$2.64 million**, a significant improvement from a Distributable Earnings loss of **$2.30 million** in Q2 2024 Reconciliation of Net Income (Loss) to Distributable Earnings | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) allocable to common stockholders | $767 | $(273) | $21,298 | $12,601 | | Adjustments (Net unrealized gains/losses, stock comp) | $1,872 | $(2,028) | $(14,516) | $(12,083) | | **Distributable Earnings** | **$2,639** | **$(2,301)** | **$6,782** | **$519** | | Annualized Distributable Earnings | $10,556 | $(9,204) | $13,564 | $1,038 | | Average total stockholders' equity | $248,934 | $259,565 | $245,612 | $258,412 | | Distributable Earnings Return on Average Equity | 4.2% | (3.5)% | 5.5% | 0.4% | [Reconciliation of Stockholders' Equity to Economic Book Value](index=7&type=section&id=Reconciliation_of_Stockholders_Equity_to_Economic_Book_Value) As of June 30, 2025, GAAP total stockholders' equity was **$246.39 million**, which, after a fair value adjustment for securitized debt of **$61.85 million**, resulted in an Economic Book Value per share of **$12.97**, compared to a GAAP book value of **$10.37 per share** Reconciliation of Stockholders' Equity to Economic Book Value | Metric (in thousands, except per share) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | GAAP total stockholders' equity | $246,389 | $251,480 | $238,967 | $265,098 | $255,806 | | Fair value adjustment for securitized debt | $61,846 | $63,593 | $68,784 | $64,522 | $73,053 | | **Stockholders' equity including economic book value adjustments** | **$308,235** | **$315,073** | **$307,751** | **$329,620** | **$328,859** | | Book value per share of common stock | $10.37 | $10.70 | $10.17 | $11.28 | $10.23 | | Economic book value per share of common stock | $12.97 | $13.41 | $13.10 | $14.02 | $13.16 | [Additional Information](index=2&type=section&id=Additional_Information) This section provides Q2 2025 conference call details, forward-looking statement disclaimers, and essential investor relations contact information [Conference Call and Webcast Information](index=2&type=section&id=Conference_Call_and_Webcast_Information) Angel Oak Mortgage REIT, Inc. hosted a live conference call and webcast on **August 5, 2025**, at **8:30 a.m. Eastern time** to discuss financial results, with details provided for live access and playback - A live conference call and webcast were hosted on **August 5, 2025, at 8:30 a.m. Eastern time** to discuss the financial results[9](index=9&type=chunk) - Dial-in and webcast access details were provided for participants, along with a playback option available until **August 19, 2025**[9](index=9&type=chunk)[10](index=10&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking_Statements) The press release contains forward-looking statements subject to various risks and uncertainties, and actual results may differ materially from projections, with readers cautioned against undue reliance as the company does not undertake to update them - The press release includes **forward-looking statements** regarding the company's investments, which are subject to various risks and uncertainties[14](index=14&type=chunk) - Actual results and performance could differ materially from these statements, and readers are cautioned not to place undue reliance on them[14](index=14&type=chunk) - The company does not undertake any obligation to update forward-looking statements due to new information or future events[14](index=14&type=chunk) [Contacts](index=10&type=section&id=Contacts) Contact information is provided for investors, including a dedicated investor relations email and phone number, an IR agency contact, and the company's Head of Corporate Finance & Investor Relations - Contact details are provided for investors, including **investorrelations@angeloakreit.com** and **855-502-3920**[25](index=25&type=chunk) - Specific contacts include Nick Teves or Joseph Caminiti from Alpha IR Group and KC Kelleher, Head of Corporate Finance & Investor Relations[25](index=25&type=chunk)

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