Angel Oak(AOMR) - 2025 Q2 - Quarterly Results

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 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][15] - 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] 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] - Capital from senior unsecured notes was quickly deployed into high-quality, current market coupon non-QM loans and other target assets[3] - Expects to resume quarterly sequential net interest income growth in the next quarter, demonstrating commitment to growing long-term shareholder value[3] 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 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 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] - 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] - Purchased $146.6 million of newly-originated non-QM residential mortgage loans and HELOCs with a weighted average coupon of 8.68%[6] - 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] 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] - 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] - The Company's recourse debt to equity ratio was approximately 1.1x as of June 30, 2025[11] 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][8] 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 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] - 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] 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] - 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] 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] - 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] 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) 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 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 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 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 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 This section provides Q2 2025 conference call details, forward-looking statement disclaimers, and essential investor relations contact information 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] - Dial-in and webcast access details were provided for participants, along with a playback option available until August 19, 2025[9][10] 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] - Actual results and performance could differ materially from these statements, and readers are cautioned not to place undue reliance on them[14] - The company does not undertake any obligation to update forward-looking statements due to new information or future events[14] 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] - Specific contacts include Nick Teves or Joseph Caminiti from Alpha IR Group and KC Kelleher, Head of Corporate Finance & Investor Relations[25]