AG Mortgage Investment Trust(MITT) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Earnings Overview The company reported its second quarter 2025 financial results, highlighting management's strategic remarks and key financial and operational performance metrics Management Remarks Management highlighted strong second quarter results, including a dividend increase, modest book value decline, and a strategic acquisition of Arc Home expected to be accretive to EAD - Common dividend increased by 5%, and book value declined by a modest 2.4%[4] - Acquired an additional 21.4% interest in Arc Home, increasing total ownership to 66.0%[4][8] - The Arc Home transaction is expected to be accretive to Earnings Available for Distribution (EAD) in 2026, with minimal ~2% dilution to book value[4][8] Second Quarter Financial and Operational Highlights The company reported key financial metrics including book value, economic return, EAD, and detailed its investment portfolio, financing, and liquidity positions Key Financial Metrics This section presents a summary of the company's core financial performance indicators for the quarter Key Financial Metrics (as of June 30, 2025) | Metric | Value (as of June 30, 2025) | | :---------------------------------------------------------------- | :-------------------------- | | Book Value per share | $10.39 | | Quarterly economic return on equity | (0.5)% | | Net Income/(Loss) Available to Common Stockholders per diluted common share | $(0.05) | | Earnings Available for Distribution ("EAD") per diluted common share | $0.18 | | Dividend per common share declared (Q2 2025) | $0.21 (5.0% increase over Q1 2025) | Investing and Financing Highlights This section details the company's investment portfolio, financing structure, leverage ratios, and liquidity position Investing and Financing Highlights (as of June 30, 2025) | Metric | Value (as of June 30, 2025) | | :------------------------------------------ | :-------------------------- | | Investment Portfolio | $7.3 billion | | Net Interest Margin | 0.6% (includes 0.05% benefit from interest rate swaps) | | Investment in Arc Home | $32.2 million (valued at 1.00x book value) | | Total Financing | $6.9 billion | | Non-recourse financing | $6.0 billion | | Recourse financing | $0.9 billion | | GAAP Leverage Ratio | 12.8x | | Economic Leverage Ratio | 1.3x | | Total Liquidity | $89.7 million | Acquisition of Additional Interest in AG ARC LLC The company increased its ownership in Arc Home, a strategic move expected to enhance future earnings and expand product offerings - On August 1, 2025, acquired an additional 21.4% interest in Arc Home, a residential mortgage originator, from certain private funds managed by TPG Angelo Gordon[8] - Increased ownership in Arc Home to 66.0% from 44.6% by issuing approximately 2.0 million common shares as consideration[8] - The acquisition is expected to enhance earnings potential as Arc Home scales and expands product offerings, be accretive to EAD in 2026, and result in minimal ~2% dilution to book value[8] Dividends and Investor Information This section outlines the company's dividend declarations for common and preferred stock, along with details for the investor conference call Dividend Declarations The company declared a second quarter common dividend of $0.21 per share and quarterly cash dividends for its Series A, B, and C Preferred Stock Dividend Declarations | Dividend Type | Amount per Share | Declaration Date | Payable Date | Record Date | | :-------------------------------- | :--------------- | :--------------- | :----------- | :---------- | | Common Stock (Q2 2025) | $0.21 | June 17, 2025 | N/A | N/A | | Series A Preferred Stock | $0.51563 | July 31, 2025 | September 17, 2025 | August 29, 2025 | | Series B Preferred Stock | $0.50 | July 31, 2025 | September 17, 2025 | August 29, 2025 | | Series C Preferred Stock | $0.706042 | July 31, 2025 | September 17, 2025 | August 29, 2025 | Stockholder Conference Call and Presentation The company hosted its second quarter earnings conference call on August 1, 2025, with presentation materials and an audio replay available online - Q2 2025 earnings conference call held on Friday, August 1, 2025, at 8:30 a.m. Eastern Time, with Conference ID MITTQ225[9][10] - Live webcast available at https://event.on24.com/wcc/r/5005699/B02EC3F7A49E21DED7559DD94BDBCD24[10](index=10&type=chunk) - An earnings presentation detailing financial results and an audio replay are available on the Company's website, www.agmit.com[11](index=11&type=chunk) About the Company and Advisor This section provides an overview of AG Mortgage Investment Trust, Inc. and its external advisor, TPG Angelo Gordon About AG Mortgage Investment Trust, Inc. AG Mortgage Investment Trust, Inc. (MITT) is a residential mortgage REIT investing in diversified U.S. residential mortgage-related assets, externally managed by AG REIT Management, LLC - AG Mortgage Investment Trust, Inc. is a residential mortgage REIT[12] - Focuses on investing in a diversified risk-adjusted portfolio of residential mortgage-related assets in the U.S. mortgage market[12] - Externally managed and advised by AG REIT Management, LLC, a subsidiary of Angelo, Gordon & Co., L.P. (TPG Angelo Gordon)[12] About TPG Angelo Gordon TPG Angelo Gordon, founded in 1988, is a diversified credit and real estate investing platform within TPG, managing approximately $92 billion across various strategies - Founded in 1988, Angelo, Gordon & Co., L.P. ("TPG Angelo Gordon") is a diversified credit and real estate investing platform within TPG[14] - The platform currently manages approximately $92 billion across a broad range of credit and real estate strategies[14] Forward-Looking Statements This section contains cautionary forward-looking statements, subject to risks and uncertainties, with actual results potentially differing materially from expectations - The press release includes "forward-looking statements" intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[15] - Forward-looking statements are based on beliefs, assumptions, and expectations of future operations and are not guarantees of future performance[15] - Important factors that could cause actual results to differ materially include changes in general economic or market conditions, government regulations, the Company's ability to grow its residential loan portfolio, and financing needs[15][17] Non-GAAP Financial Measures This section defines and reconciles key non-GAAP financial measures, including Earnings Available for Distribution (EAD) and Economic Leverage Ratio Earnings Available for Distribution (EAD) EAD is a non-GAAP measure, defined as Net Income/(loss) available to common stockholders adjusted for specific non-recurring items, totaling $5,351 thousand or $0.18 per diluted share for Q2 2025 - EAD is a non-GAAP financial measure, defined as Net Income/(loss) available to common stockholders excluding specific items like unrealized/realized gains/losses, transaction-related expenses, and deferred taxes[19][26] Reconciliation of GAAP Net Income/(loss) to EAD (Three Months Ended June 30, 2025) | Item | Amount (in thousands) | Per Diluted Share | | :------------------------------------------ | :-------------------- | :---------------- | | Net Income/(loss) available to common stockholders | $(1,376) | $(0.05) | | Add (Deduct): | | | | Net realized (gain)/loss | 3,494 | 0.12 | | Net unrealized (gain)/loss | 40 | — | | Transaction related expenses and deal related performance fees | 3,079 | 0.10 | | Equity in (earnings)/loss from affiliates | (231) | (0.01) | | EAD from equity method investments | 456 | 0.02 | | Dollar roll income/(loss) | (111) | — | | Earnings available for distribution | $5,351 | $0.18 | Economic Leverage Ratio The Economic Leverage Ratio is a non-GAAP metric adjusting GAAP leverage by excluding non-recourse financing and including net TBA positions, resulting in 1.3x compared to 12.8x GAAP leverage - Economic Leverage Ratio is a non-GAAP metric, defined as GAAP leverage exclusive of fully non-recourse financing arrangements, plus the net TBA position[23][30] Reconciliation of GAAP Leverage to Economic Leverage (June 30, 2025) | Item | Leverage (in thousands) | Stockholders' Equity (in thousands) | Leverage Ratio | | :------------------------------------------ | :---------------------- | :-------------------------- | :------------- | | Securitized debt, at fair value | $5,937,637 | | | | Financing arrangements | 843,537 | | | | Senior unsecured notes | 96,080 | | | | Restricted cash posted on Financing arrangements | (2,208) | | | | Payable on unsettled trades | 114 | | | | GAAP Leverage | $6,875,160 | $536,407 | 12.8x | | (a) Non-recourse financing arrangements | (5,981,082) | | | | Net TBA (receivable)/payable adjustment | (194,855) | | | | Economic Leverage | $699,223 | $536,407 | 1.3x | Footnotes This section provides detailed definitions and explanations for key financial terms and calculations, ensuring clarity and transparency for investors - Book value is calculated using stockholders' equity less the liquidation preference of cumulative redeemable preferred stock ($228.0 million)[25] - EAD (non-GAAP) definition includes specific exclusions like unrealized/realized gains/losses, transaction expenses, and deferred taxes, and includes net interest income and other income on a yield-adjusted basis[26] - Investment Portfolio consists of Residential Investments, Agency RMBS, and Legacy WMC Commercial Investments, held at fair value, and includes securities owned through equity method affiliates and long TBA positions[27]