AG Mortgage Investment Trust(MITT) - 2025 Q1 - Quarterly Results

Company Overview Focuses on MITT's core strategy as a residential mortgage REIT and its approach to Non-Agency loan securitizations Business Strategy AG Mortgage Investment Trust, Inc. (MITT) positions itself as a pure-play residential mortgage REIT focused on generating attractive risk-adjusted returns - MITT's core business model is the aggregation and securitization of Non-Agency residential loans to generate long-term returns[9] - The company's strategic pillars include maintaining a high-quality portfolio, having sufficient liquidity, a disciplined approach to securitization and leverage, and accessing investment opportunities with a credit-first mindset[10] Q1 2025 Financial & Performance Highlights Summarizes MITT's Q1 2025 financial position, including book value, portfolio growth, and key performance metrics like EAD and dividend Q1 2025 Financial Position As of Q1 2025, the company reported a stable book value per share of $10.65, an investment portfolio of $7.1 billion, and maintained a low economic leverage ratio of 1.6x Key Financial Metrics (Q1 2025 vs Q4 2024) | Metric | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Book Value per Share | $10.65 | $10.64 | | Investment Portfolio | $7.1 billion | $6.7 billion | | Total Equity | $543.9 million | - | | Liquidity | $132.5 million | - | | Economic Leverage Ratio | 1.6x | - | - The investment portfolio grew from $6.7 billion in Q4 2024 to $7.1 billion in Q1 2025, primarily driven by an increase in securitized loans[14] - The financing profile is predominantly composed of non-recourse debt, which increased to $6.7 billion from $6.4 billion in the prior quarter[14] Q1 2025 Performance In Q1 2025, MITT reported Earnings Available for Distribution (EAD) of $0.20 per share, supporting a 5.3% increase in the common dividend to $0.20 per share Q1 2025 Earnings and Dividend Summary | Metric | Value | | :--- | :--- | | Net Interest Income | $19.6 million | | GAAP Earnings per Share | $0.21 | | EAD per Share | $0.20 | | Dividend per Share | $0.20 | - The company remained active in its securitization strategy, executing a securitization of $423.3 million UPB of Agency-Eligible Loans[17] - MITT continued to grow its Home Equity Loan portfolio, purchasing $128.2 million in Q1 and an additional $52.4 million in April[17] - Arc Home's performance improved, reaching breakeven due to strong volumes and better margins, which enhanced its EAD contribution to MITT[18] Investment Portfolio Analysis Provides a detailed breakdown of MITT's investment portfolio, securitization activities, loan composition, and the role of Arc Home Securitization Activity MITT operates as a programmatic issuer of Non-Agency securitizations, a core strategy to generate attractive equity returns - The company's securitization strategy involves three steps: acquiring loans, securitizing them through its "GCAT" shelf or partnerships, and retaining bonds to reinvest[24] - Since 2021, MITT has acquired over $9 billion in residential mortgage loans and completed 24 securitizations[24] - The securitized loan portfolio has shown significant growth, as depicted by the portfolio growth chart[25] Loan Portfolio Composition The loan portfolio is predominantly composed of Non-Agency Loans, which make up 82.3% of the equity invested, with a total fair value of $6.7 billion - The majority of equity ($331.0 million) is invested in Non-Agency Loans (82.3%), followed by Home Equity Loans (12.5%) and Re/Non-Performing Loans (5.2%)[29][33] Non-Agency Loan Portfolio Characteristics | Metric | Value | | :--- | :--- | | Unpaid Principal Balance | $6.7 billion | | Coupon | 5.7% | | FICO | 765 | | Current LTV | 59% | | 90+ Days DQ % | 1.3% | Home Equity Loan Portfolio Characteristics | Metric | Value | | :--- | :--- | | Unpaid Principal Balance | $214.7 million | | Coupon | 10.3% | | FICO | 750 | | CLTV | 63% | | 90+ Days DQ % | 0.0% | Legacy WMC Commercial Investments The legacy WMC commercial portfolio, acquired via merger, constitutes a small portion of the overall business, representing 1.7% of the investment portfolio and 10.5% of total equity - This legacy portfolio has a fair value of $119.8 million, with collateral primarily in Multifamily (49.5%) and Office (40.5%) properties[38] - The two remaining commercial loans are first mortgages, collateralized by hotel and retail properties, with borrowers current on payments[39] - The CMBS portfolio has a weighted average unlevered yield of 17.2% and a weighted average price of 54%, offering potential book value upside[39] Arc Home: Proprietary Origination Channel Arc Home serves as MITT's proprietary mortgage origination channel, with its Q1 2025 contribution to MITT's EAD turning positive due to increased lock volume and improved margins - MITT's investment in Arc Home was valued at $32.2 million, representing 5.9% of MITT's total equity as of March 31, 2025[43] - Arc Home's lock volume increased by 48% from Q1 2024, indicating strong origination activity[43] - Arc Home's contribution to MITT's EAD per share improved from negative $(0.02) in Q4 2024 to breakeven ($0.00) in Q1 2025[43] - In Q1 2025, MITT purchased $715.9 million (UPB) of loans from Arc Home[43] Detailed Investment Portfolio Table The total investment portfolio of $7.1 billion is financed with $6.8 billion in debt, resulting in $471.8 million of invested equity and an economic leverage of 1.6x Q1 2025 Investment Portfolio Summary | Metric | Value | | :--- | :--- | | Total Asset FMV | $7,115.0 million | | Total Financing | $6,823.2 million | | Total Economic Equity | $471.8 million | | Portfolio Yield | 6.0% | | Portfolio Cost of Funds | 5.3% | | Portfolio Economic Leverage | 1.6x | | Portfolio ROE | 18.3% | - Securitized Non-Agency Loans are the largest component, with $6.4 billion in fair value and generating a 17.5% ROE[46] - Higher-yielding assets include Home Equity Loans (20.9% ROE), Securitized RPL/NPL Loans (26.7% ROE), and Legacy WMC CMBS (26.8% ROE)[46] Financing & Capital Structure Details MITT's financing profile, emphasizing securitized debt and low economic leverage, along with book value reconciliation Q1 2025 Financing Profile MITT's investment portfolio is primarily financed through term, non-mark-to-market securitized debt, which comprises $5.8 billion of the total $6.7 billion in GAAP financing GAAP Financing Breakdown (Q1 2025) | Financing Type | Amount (in millions) | Cost of Funds | | :--- | :--- | :--- | | Securitized Debt | $5,836.7 | 5.2% | | Residential Bond Financing | $520.3 | 5.6% | | Residential Loan Financing | $223.0 | 6.3% | | Legacy WMC Commercial Financing | $62.5 | 7.2% | | Senior Unsecured Notes | $95.9 | 10.6% | | Total GAAP Financing | $6,739.1 | 5.3% | - The company maintains a low economic leverage ratio of 1.6x, with the majority of leverage attributed to securitized debt (0.9x) and residential bond financing (0.4x)[52] Book Value Roll-Forward The company's book value per share experienced a slight increase of $0.01 during Q1 2025, moving from $10.64 to $10.65 Q1 2025 Book Value Per Share Reconciliation | Description | Per Diluted Share | | :--- | :--- | | 12/31/2024 Book Value | $10.64 | | Common dividend | ($0.20) | | Earnings available for distribution ("EAD") | $0.20 | | Net realized/unrealized gains & other | ($0.01) | | 3/31/2025 Book Value | $10.65 | | Change in Book Value | $0.01 | Appendix & Reconciliations Offers supplementary financial details, including reconciliations for EAD and economic leverage, and condensed financial statements EAD Reconciliation For Q1 2025, GAAP Net Income available to common stockholders was $6.2 million ($0.21 per share), with EAD totaling $6.0 million ($0.20 per share) after adjustments Reconciliation of GAAP Net Income to EAD (Q1 2025) | Description (in thousands) | Amount | Per Diluted Share | | :--- | :--- | :--- | | Net Income available to common stockholders | $6,173 | $0.21 | | Adjustments (unrealized gains, transaction costs, etc.) | ($191) | ($0.01) | | Earnings Available for Distribution (EAD) | $5,982 | $0.20 | - The primary components of EAD were Net Interest Income of $19.6 million, offset by total operating expenses of $14.4 million[57] Economic Leverage Reconciliation The company reconciles its GAAP leverage of $6.7 billion to its non-GAAP Economic Leverage of $850.7 million, resulting in a GAAP Leverage Ratio of 12.4x and an Economic Leverage Ratio of 1.6x Leverage Ratio Reconciliation (as of March 31, 2025) | Metric | Value | | :--- | :--- | | GAAP Leverage | $6,734.1 million | | Less: Non-recourse financing | ($5,883.4 million) | | Economic Leverage | $850.7 million | | GAAP Stockholders' Equity | $543.9 million | | GAAP Leverage Ratio | 12.4x | | Economic Leverage Ratio | 1.6x | Condensed Financial Statements The condensed consolidated balance sheet shows total assets grew to $7.32 billion, while the statement of operations reported a Net Income of $11.5 million for Q1 2025 - Total assets increased to $7.32 billion as of March 31, 2025, from $6.91 billion as of December 31, 2024[64] - Total stockholders' equity remained stable at $543.9 million[64] Condensed Statement of Operations (Q1 2025 vs Q1 2024) | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Net Interest Income | $18,849 | $17,179 | | Total Other Income/(Loss) | $1,549 | $10,811 | | Total Expenses | $10,106 | $9,137 | | Net Income/(Loss) | $11,477 | $20,890 |