AG Mortgage Investment Trust(US:MITT)2024-08-06 20:42Financial Performance - Net Income/(Loss) Available to Common Stockholders per diluted common share is $(0.02) and Earnings Available for Distribution (EAD) per diluted common share is $0.21[199]. - The company declared a dividend of $0.19 per common share, representing a 5.6% increase over the prior quarter[199]. - Net income available to common stockholders for Q2 2024 was $(661,000), a decrease of 119.0% from $3,470,000 in Q2 2023[237]. - Net income available to common stockholders for the six months ended June 30, 2024, was $15,643,000, compared to $11,424,000 in the previous year, reflecting a 37.0% increase[261]. - The net unrealized gain for the six months ended June 30, 2024, was $788,000, compared to $8,511,000 in the prior year, indicating a decrease of 90.7%[270]. Investment Activity - Total investment activity includes purchases of $869.773 million and sales of $19.858 million during the quarter[200]. - The acquisition of Western Asset Mortgage Capital Corporation increased the investment portfolio by $1.2 billion, primarily consisting of Securitized Non-Agency Loans[207]. - The weighted average yield on the GAAP investment portfolio increased to 5.87% in Q2 2024 from 5.02% in Q2 2023, reflecting a rise of 0.85%[239]. - The weighted average yield on the GAAP investment portfolio improved to 5.89% for the six months ended June 30, 2024, up from 4.97% in the previous year, an increase of 0.92%[263]. - Total Investment Portfolio as of June 30, 2024, is $7,264,038, with a fair value of $6,872,177 and a yield of 6.09%[289]. Financing and Leverage - The company maintains a 12.2x GAAP Leverage Ratio and a 2.5x Economic Leverage Ratio[199]. - GAAP leverage as of June 30, 2024, was reported at 12.2x, with stockholders' equity at $533.5 million[320]. - Economic leverage was calculated at 2.5x as of June 30, 2024, indicating a total of $1.35 billion in economic leverage[320]. - The leverage ratio for the total investment portfolio is 2.3x[289]. - The company assumed liabilities of $1.1 billion through the acquisition of WMC, primarily consisting of securitized debt and financing arrangements[313]. Interest Income and Expenses - Net interest income for the three months ended June 30, 2024, was $16,381,000, an increase of 44.2% from $11,359,000 in the same period of 2023[237]. - Interest income rose to $99,815,000 in Q2 2024, up 64.2% from $60,788,000 in Q2 2023, primarily due to an increased investment portfolio from the WMC acquisition[238]. - Interest expense increased to $83,434,000 in Q2 2024, up 68.8% from $49,429,000 in Q2 2023, driven by higher financing costs associated with the WMC acquisition[240]. - Interest expense increased to $161,827,000 for the six months ended June 30, 2024, from $95,617,000 in the same period last year, a rise of 68.9%[264]. - The net interest component of interest rate swaps increased to $2,367,000 in Q2 2024, up 33.0% from $1,784,000 in Q2 2023[242]. Market Conditions - The S&P CoreLogic Case-Shiller U.S. National Home Price Index increased by 4% year-to-date and 6% year-over-year as of May 2024[225]. - Total existing home listings rose to 1.28 million in May 2024, the highest level since July 2022, but still below pre-pandemic levels[227]. - The effective mortgage rate outstanding held steady at 3.8% as of March 2024, reflecting low housing turnover and limited mortgage originations[226]. - RMBS spreads tightened by 10 to 20 basis points during Q2 2024, reflecting strong investor appetite for U.S. housing and mortgage credit[223]. - The 10-year U.S. treasury yield increased by approximately 48 basis points during April 2024 to 4.69%[221]. Risk Management - The company is subject to interest rate risk, which is influenced by various economic factors, and seeks to manage this risk through monitoring and hedging strategies[363]. - The majority of financing arrangements are short-term, with initial terms typically between 30 and 90 days, leading to increased borrowing costs during rising interest rates[364]. - A 75 basis point increase in interest rates could result in a 5.7% decrease in fair value as a percentage of GAAP equity[374]. - The company faces primary liquidity risk from financing long-maturity assets with shorter-term financing arrangements[376]. - A decrease in the fair value of mortgage loans or real estate securities pledged as collateral may lead to margin calls, adversely affecting liquidity[377]. Shareholder Activities - Approximately 9.2 million shares of common stock were issued to former WMC common stockholders, who now own approximately 31% of the common equity of the combined company[216]. - The company has approximately $1.5 million remaining authorized for future share repurchases under the 2022 Repurchase Program as of the date of the filing[331]. - The 2023 Repurchase Program has a full authorized amount of $15.0 million available for repurchase as of the date of the filing[332]. - The company has issued approximately 2.2 million shares of common stock under the Equity Distribution Agreements for gross proceeds of $48.3 million since inception[335]. - The management agreement amendment resulted in a waiver of $2.4 million in base management fees for the first four quarters following the merger, with $0.6 million remaining outstanding as of June 30, 2024[338].