Angel Oak(AOMR) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Results First Quarter 2025 Highlights Angel Oak Mortgage REIT (AOMR) reported strong Q1 2025 results, highlighted by a GAAP net income of $20.5 million ($0.87 per diluted share) and a 17.6% year-over-year increase in net interest income to $10.1 million. The company saw growth in both GAAP book value to $10.70 per share and economic book value to $13.41 per share, driven by the acquisition of nearly $260 million in high-quality non-QM loans and sustained operational efficiency Q1 2025 Key Financial Metrics | Metric | Q1 2025 Value | Change vs. Q4 2024 | Change vs. Q1 2024 | | :--- | :--- | :--- | :--- | | GAAP Net Income | $20.5 million | - | - | | Diluted EPS | $0.87 | - | - | | Net Interest Income | $10.1 million | +2.3% | +17.6% | | GAAP Book Value/Share | $10.70 | +5.2% | - | | Economic Book Value/Share | $13.41 | +2.4% | - | | Distributable Earnings | $4.1 million ($0.17/share) | - | - | | Declared Dividend/Share | $0.32 | - | - | - The CEO attributed earnings growth to the acquisition of nearly $260 million in high-quality non-QM loans and maintained operating expense savings. The company plans to continue expanding earnings through further loan purchases, funded by a post-quarter end securitization[3] Operational and Financial Details During Q1 2025, the company purchased $259.0 million in non-QM loans, increasing the portfolio's weighted average coupon. Post-quarter, AOMR executed a $284.3 million securitization, which significantly reduced its recourse debt to equity ratio from 2.3x to approximately 1.3x and freed up $24.7 million in cash. As of quarter-end, the company had $690 million in available borrowing capacity for new loan acquisitions Portfolio and Investment Activity The company acquired $259.0 million in non-QM loans in Q1 2025, increasing the portfolio's weighted average coupon to 7.55% - In Q1 2025, the company purchased $259.0 million of newly-originated non-QM residential mortgage loans[7] Q1 2025 Loan Purchase Characteristics | Metric | Value | | :--- | :--- | | Weighted Average Coupon | 7.67% | | Weighted Average LTV | 70.0% | | Weighted Average Credit Score | 751 | - The weighted average coupon of the residential whole loan portfolio increased by 44 basis points year-over-year to 7.55% as of March 31, 2025[7] Capital Markets Activity Post-quarter, AOMR completed a $284.3 million securitization, reducing recourse debt and freeing up cash for new loan acquisitions - In April 2025, after the quarter ended, the company executed the AOMT 2025-4 securitization, contributing loans with an unpaid principal balance of approximately $284.3 million[7] - This securitization reduced the company's debt by approximately $242.4 million and released $24.7 million in cash for new loan purchases and other operational purposes[7] - As of March 31, 2025, the company had three loan financing lines with an aggregate capacity of up to $1.1 billion, of which approximately $690 million was available for new loan purchases[8] Balance Sheet Target assets reached $2.5 billion as of March 31, 2025, with the recourse debt to equity ratio significantly reduced post-securitization - Target assets totaled $2.5 billion as of March 31, 2025[13] - The company's recourse debt to equity ratio was approximately 2.3x at quarter-end. Subsequent to quarter-end, this ratio was reduced to approximately 1.3x following the AOMT 2025-4 securitization[13] Dividend The company declared a $0.32 per share common stock dividend payable on May 30, 2025 - On May 5, 2025, the company declared a dividend of $0.32 per share of common stock, payable on May 30, 2025, to stockholders of record as of May 22, 2025[9] Consolidated Financial Statements Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the three months ended March 31, 2025, the company reported a net income of $20.5 million, a significant increase from $12.9 million in the same period of 2024. This improvement was primarily driven by a 17.6% rise in net interest income to $10.1 million and a substantial reduction in total operating expenses from $4.7 million to $3.0 million year-over-year Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | NET INTEREST INCOME | $10,087 | $8,579 | | TOTAL REALIZED AND UNREALIZED GAINS, NET | $13,443 | $9,262 | | Total operating expenses | $2,999 | $4,680 | | INCOME BEFORE INCOME TAXES | $20,531 | $13,161 | | NET INCOME ALLOCABLE TO COMMON STOCKHOLDERS | $20,531 | $12,874 | | Diluted earnings per common share | $0.87 | $0.51 | Condensed Consolidated Balance Sheets As of March 31, 2025, total assets increased to $2.68 billion from $2.27 billion at the end of 2024, largely due to a significant rise in residential mortgage loans held at fair value. Total liabilities also grew to $2.43 billion from $2.03 billion, while total stockholders' equity increased to $251.5 million from $239.0 million over the same period Balance Sheet Highlights (in thousands) | Line Item | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Residential mortgage loans - at fair value | $439,460 | $183,064 | | Cash and cash equivalents | $38,696 | $40,762 | | Total assets | $2,676,535 | $2,269,769 | | Notes payable | $360,470 | $129,459 | | Non-recourse securitization obligation | $1,556,075 | $1,593,612 | | Total liabilities | $2,425,055 | $2,030,802 | | Total stockholders' equity | $251,480 | $238,967 | Non-GAAP Financial Measures Definitions of Non-GAAP Metrics The company provides three non-GAAP metrics to supplement its GAAP results. 'Distributable Earnings' adjusts net income for non-cash items like unrealized gains/losses to show a measure of financial performance comparable to REIT peers. 'Distributable Earnings Return on Average Equity' measures the return generated by invested equity capital. 'Economic Book Value' adjusts stockholders' equity to reflect the fair value of all assets and liabilities, offering a supplemental view of the company's financial position - Distributable Earnings is a non-GAAP measure that excludes items such as unrealized gains and losses, impairment losses, and non-cash equity compensation from GAAP net income[12] - Economic Book Value is a non-GAAP measure that adjusts GAAP stockholders' equity by marking the company's non-recourse financing obligations to fair value, providing a supplemental measure of financial position[16] Reconciliation of Net Income to Distributable Earnings For Q1 2025, GAAP Net Income of $20.5 million was reconciled to Distributable Earnings of $4.1 million, primarily by excluding $16.6 million in net unrealized gains. This resulted in a Distributable Earnings Return on Average Equity of 6.6%, a notable increase from 4.3% in Q1 2024, when Distributable Earnings were $2.8 million Reconciliation to Distributable Earnings (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (loss) allocable to common stockholders | $20,531 | $12,874 | | Net unrealized (gains) losses (Total Adjustments) | $(16,624) | $(10,614) | | Stock compensation | $237 | $630 | | Distributable Earnings | $4,144 | $2,820 | | Distributable Earnings Return on Average Equity | 6.6% | 4.3% | Reconciliation of Stockholders' Equity to Economic Book Value As of March 31, 2025, the company's GAAP book value per share was $10.70. After a positive fair value adjustment of $63.6 million for securitized debt, the Economic Book Value per share was calculated at $13.41. This represents a sequential increase from $13.10 at the end of Q4 2024 Book Value Reconciliation (per share) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Book value per share of common stock (GAAP) | $10.70 | $10.17 | | Economic book value per share of common stock (Non-GAAP) | $13.41 | $13.10 | Other Information Conference Call and Webcast Information The company scheduled a live conference call and webcast for May 5, 2025, at 8:30 a.m. Eastern time to discuss its Q1 2025 financial results. Access details for both the live event and a playback option available through May 19, 2025, were provided - A conference call and webcast to discuss results was held on May 5, 2025, at 8:30 a.m. Eastern time[10] - Playback of the conference call is available through May 19, 2025, using passcode 10198623[11] Forward-Looking Statements This section serves as a legal disclaimer, cautioning that the press release contains forward-looking statements based on current assumptions and expectations. It warns that actual results could differ materially from these statements due to various risks and uncertainties and advises against placing undue reliance on them - The press release contains forward-looking statements subject to risks and uncertainties, and actual results could differ materially. The company does not undertake any obligation to update these statements[17] About Angel Oak Mortgage REIT, Inc. Angel Oak Mortgage REIT, Inc. is a real estate finance company that invests in first lien non-QM loans and other U.S. mortgage-related assets. Its objective is to deliver attractive risk-adjusted returns to stockholders. The company is externally managed by an affiliate of Angel Oak Capital Advisors, LLC, a prominent alternative credit manager - The company 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[18]