Angel Oak Mortgage REIT, Inc. Reports Second Quarter 2023 Financial Results
Company focuses on growth after successful portfolio de-risking and repositioning
Second Quarter Highlights
-
Q2 2023 GAAP net loss of
( , or$3.7) million $(0.15) -
Q2 2023 Distributable Earnings of
$(3.9) million $(0.16) -
GAAP book value of
$9.34 -
Economic book value of
$13.16 -
Declared dividend of
$0.32
“We are pleased to have accelerated purchases of newly originated, higher-coupon loans in the second quarter, which we expect to have a compounding positive effect on net interest income and securitization execution going forward. We believe our results in the first half of the year have demonstrated the resilience and adaptability of our business model, and now our focus is on growth,” said Sreeni Prabhu, Chief Executive Officer and President of Angel Oak Mortgage REIT. “Credit continues to perform well across the portfolio, and we will remain judicious with our approach and diligent in credit selection as we expand new purchases. Though the macroeconomic landscape remains uncertain, our improved balance sheet and increased liquidity have positioned the Company for success. As we head into the second half of the year, our emphasis is on executing our growth strategy and delivering attractive returns for our shareholders.”
Second Quarter Portfolio and Investment Activity
-
In June 2023, the Company priced AOMT 2023-4, an approximately
$284.5 million 45.6% versus the end of Q1 2023, bringing the total reduction in the Company’s whole loan warehouse debt since the end of Q3 2022 to approximately73.7% . -
The securitization released over
$35 million -
Since the end of Q1 2023, AOMR has purchased and locked for purchase approximately
$50 million 8.4% , a weighted average original loan-to-value ratio of72% , and a weighted average original FICO score of 754.
Capital Markets Activity
-
Executed the AOMT 2023-4 securitization with a
$284.5 million -
As of June 30, 2023, the Company was party to three financing lines which permit borrowings in an aggregate amount of up to
$929 million -
Our total financing capacity as of June 30, 2023 stands at
$929 million $234 million $695 million
Balance Sheet
-
Target assets totaled
$2.03 billion -
Held residential mortgage whole loans with fair value of
$296.5 million - Recourse debt to equity ratio was 2.5x as of June 30, 2023. As of today’s date, our recourse debt to equity ratio was 1.2x, reflecting the maturity of US Treasury repurchase agreements on July 13, 2023.
Dividend
On August 8, 2023, the Company declared a dividend of
Conference Call and Webcast Information
The Company will host a live conference call and webcast today, August 8, 2023 at 8:30 a.m. Eastern time. To listen to the live webcast, go to the Investors section of the Company’s website at www.angeloakreit.com at least 15 minutes prior to the scheduled start time in order to register and install any necessary audio software.
To Participate in the Telephone Conference Call:
Dial in at least 15 minutes prior to start time.
Domestic: 1-844-826-3033
International: 1-412-317-5185
Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Passcode: 10179283
The playback can be accessed through August 22, 2023.
Non-GAAP Metrics
Distributable Earnings is a non‑GAAP measure and is defined as net income (loss) allocable to common stockholders as calculated in accordance with generally accepted accounting principles in
Distributable Earnings Return on Average Equity is a non-GAAP measure and is defined as annual or annualized Distributable Earnings divided by average total stockholders’ equity. We believe that the presentation of Distributable Earnings Return on Average Equity provides investors with a useful measure to facilitate comparisons of financial performance among our REIT peers, but has important limitations. Additionally, we believe Distributable Earnings Return on Average Equity provides investors with additional detail on the Distributable Earnings generated by our invested equity capital. We believe Distributable Earnings Return on Average Equity as described above helps evaluate our financial performance without the impact of certain transactions but is of limited usefulness as an analytical tool. Therefore, Distributable Earnings Return on Average Equity should not be viewed in isolation and is not a substitute for net income computed in accordance with GAAP. Our methodology for calculating Distributable Earnings Return on Average Equity may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, our Distributable Earnings Return on Average Equity may not be comparable to similar measures presented by other REITs.
Economic book value is a non-GAAP financial measure of our financial position. To calculate our economic book value, the portions of our non-recourse financing obligation held at amortized cost are adjusted to fair value. These adjustments are also reflected in our end of period total stockholders’ equity. Management considers economic book value to provide investors with a useful supplemental measure to evaluate our financial position as it reflects the impact of fair value changes for our legally held retained bonds, irrespective of the accounting model applied for GAAP reporting purposes. Economic book value does not represent and should not be considered as a substitute for book value per share of common stock or stockholders’ equity, as determined in accordance with GAAP, and our calculation of this measure may not be comparable to similarly titled measures reported by other companies.
Forward-Looking Statements
This press release contains certain forward-looking statements that are subject to various risks and uncertainties, including, without limitation, statements relating to the performance of the Company’s investments. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “believe,” “could,” “project,” “predict,” “continue,” or by the negative of these words and phrases or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe existing or future plans and strategies, contain projections of results of operations, liquidity and/or financial condition, or state other forward-looking information. The Company’s ability to predict future events or conditions or their impact or the actual effect of existing or future plans or strategies is inherently uncertain. Although the Company believes that such forward-looking statements are based on reasonable assumptions, actual results and performance in the future could differ materially from those set forth in or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward‐looking statements, which reflect the Company’s views only as of the date of this press release. Additional information concerning factors that could cause actual results and performance to differ materially from these forward-looking statements is contained from time to time in the Company’s filings with the Securities and Exchange Commission. Except as required by applicable law, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward‐looking statements. The Company does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.
About Angel Oak Mortgage REIT, Inc.
Angel Oak Mortgage REIT, Inc. is a real estate finance company focused on acquiring and investing in first lien non-QM loans and other mortgage-related assets in the
Angel Oak Mortgage REIT, Inc.
|
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
||||||||
INTEREST INCOME, NET |
|
|
|
|
|
|
|
||||||||
Interest income |
$ |
23,763 |
|
|
$ |
29,702 |
|
|
$ |
47,503 |
|
|
$ |
56,811 |
|
Interest expense |
|
17,311 |
|
|
|
13,271 |
|
|
|
34,252 |
|
|
|
23,441 |
|
NET INTEREST INCOME |
|
6,452 |
|
|
|
16,431 |
|
|
|
13,251 |
|
|
|
33,370 |
|
|
|
|
|
|
|
|
|
||||||||
REALIZED AND UNREALIZED GAINS (LOSSES), NET |
|
|
|
|
|
|
|
||||||||
Net realized gain (loss) on mortgage loans, derivative contracts, RMBS, and CMBS |
|
(4,169 |
) |
|
|
12,718 |
|
|
|
(15,012 |
) |
|
|
39,133 |
|
Net unrealized gain (loss) on trading securities, mortgage loans, debt at fair value option, and derivative contracts |
|
379 |
|
|
|
(73,985 |
) |
|
|
10,569 |
|
|
|
(154,166 |
) |
TOTAL REALIZED AND UNREALIZED GAINS (LOSSES), NET |
|
(3,790 |
) |
|
|
(61,267 |
) |
|
|
(4,443 |
) |
|
|
(115,033 |
) |
|
|
|
|
|
|
|
|
||||||||
EXPENSES |
|
|
|
|
|
|
|
||||||||
Operating expenses |
|
2,214 |
|
|
|
2,977 |
|
|
|
4,418 |
|
|
|
6,723 |
|
Operating expenses incurred with affiliate |
|
607 |
|
|
|
838 |
|
|
|
1,073 |
|
|
|
1,838 |
|
Due diligence and transaction costs |
|
21 |
|
|
|
519 |
|
|
|
21 |
|
|
|
1,182 |
|
Stock compensation |
|
207 |
|
|
|
968 |
|
|
|
748 |
|
|
|
1,839 |
|
Securitization costs |
|
1,027 |
|
|
|
- |
|
|
|
1,910 |
|
|
|
2,019 |
|
Management fee incurred with affiliate |
|
1,493 |
|
|
|
2,006 |
|
|
|
3,015 |
|
|
|
3,879 |
|
Total operating expenses |
|
5,569 |
|
|
|
7,308 |
|
|
|
11,185 |
|
|
|
17,480 |
|
|
|
|
|
|
|
|
|
||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
|
(2,907 |
) |
|
|
(52,144 |
) |
|
|
(2,377 |
) |
|
|
(99,143 |
) |
Income tax benefit |
|
781 |
|
|
|
- |
|
|
|
781 |
|
|
|
(3,457 |
) |
NET INCOME (LOSS) |
$ |
(3,688 |
) |
|
$ |
(52,144 |
) |
|
$ |
(3,158 |
) |
|
$ |
(95,686 |
) |
Preferred dividends |
|
- |
|
|
|
(4 |
) |
|
|
- |
|
|
|
(8 |
) |
NET INCOME (LOSS) ALLOCABLE TO COMMON STOCKHOLDERS |
$ |
(3,688 |
) |
|
$ |
(52,148 |
) |
|
$ |
(3,158 |
) |
|
$ |
(95,694 |
) |
Other comprehensive income (loss) |
|
(242 |
) |
|
|
11,235 |
|
|
|
14,562 |
|
|
|
(1,752 |
) |
TOTAL COMPREHENSIVE INCOME (LOSS) |
$ |
(3,930 |
) |
|
$ |
(40,913 |
) |
|
$ |
11,404 |
|
|
$ |
(97,446 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per common share |
$ |
(0.15 |
) |
|
$ |
(2.13 |
) |
|
$ |
(0.13 |
) |
|
$ |
(3.90 |
) |
Diluted earnings (loss) per common share |
$ |
(0.15 |
) |
|
$ |
(2.13 |
) |
|
$ |
(0.13 |
) |
|
$ |
(3.90 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
24,686,881 |
|
|
|
24,458,015 |
|
|
|
24,674,875 |
|
|
|
24,549,977 |
|
Diluted |
|
24,686,881 |
|
|
|
24,458,015 |
|
|
|
24,674,875 |
|
|
|
24,549,977 |
|
Angel Oak Mortgage REIT, Inc.
|
|||||||
|
As of: |
||||||
|
June 30, 2023 |
|
December 31, 2022 |
||||
ASSETS |
|
|
|
||||
Residential mortgage loans - at fair value |
$ |
296,529 |
|
|
$ |
770,980 |
|
Residential mortgage loans in securitization trusts - at fair value |
|
1,241,994 |
|
|
|
1,027,442 |
|
Commercial mortgage loans - at fair value |
|
9,589 |
|
|
|
9,458 |
|
RMBS - at fair value |
|
459,972 |
|
|
|
1,055,338 |
|
CMBS - at fair value |
|
6,853 |
|
|
|
6,111 |
|
|
|
299,581 |
|
|
|
— |
|
Cash and cash equivalents |
|
59,140 |
|
|
|
29,272 |
|
Restricted cash |
|
9,577 |
|
|
|
10,589 |
|
Principal and interest receivable |
|
9,836 |
|
|
|
17,497 |
|
Unrealized appreciation on TBAs and interest rate futures contracts - at fair value |
|
3,294 |
|
|
|
14,756 |
|
Other assets |
|
17,418 |
|
|
|
4,767 |
|
Total assets |
$ |
2,413,783 |
|
|
$ |
2,946,212 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
LIABILITIES |
|
|
|
||||
Notes payable |
$ |
233,970 |
|
|
$ |
639,870 |
|
Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts |
|
1,211,441 |
|
|
|
1,003,485 |
|
Securities sold under agreements to repurchase |
|
340,701 |
|
|
|
52,544 |
|
Due to broker |
|
390,380 |
|
|
|
1,006,022 |
|
Accrued expenses |
|
1,372 |
|
|
|
1,288 |
|
Accrued expenses payable to affiliate |
|
1,055 |
|
|
|
2,006 |
|
Interest payable |
|
705 |
|
|
|
2,551 |
|
Management fee payable to affiliate |
|
1,483 |
|
|
|
1,967 |
|
Total liabilities |
$ |
2,181,107 |
|
|
$ |
2,709,733 |
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
||||
|
|
|
|
||||
STOCKHOLDERS’ EQUITY |
|
|
|
||||
Common stock, |
|
249 |
|
|
|
249 |
|
Additional paid-in capital |
|
476,127 |
|
|
|
475,379 |
|
Accumulated other comprehensive income |
|
(6,565 |
) |
|
|
(21,127 |
) |
Retained (deficit) earnings |
|
(237,135 |
) |
|
|
(218,022 |
) |
Total stockholders’ equity |
$ |
232,676 |
|
|
$ |
236,479 |
|
Total liabilities and stockholders’ equity |
$ |
2,413,783 |
|
|
$ |
2,946,212 |
|
Angel Oak Mortgage REIT, Inc.
|
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
||||||||
|
(in thousands) |
||||||||||||||
Net income (loss) allocable to common stockholders |
$ |
(3,688 |
) |
|
$ |
(52,148 |
) |
|
$ |
(3,158 |
) |
|
$ |
(95,694 |
) |
Adjustments: |
|
|
|
|
|
|
|
||||||||
Net unrealized (gains) losses on derivatives |
|
(12,179 |
) |
|
|
24,692 |
|
|
|
12,357 |
|
|
|
9,366 |
|
Net unrealized (gains) losses on trading securities |
|
3,882 |
|
|
|
— |
|
|
|
2,277 |
|
|
|
— |
|
Net unrealized (gains) losses on residential loans in securitization trusts and non-recourse securitization obligation |
|
4,777 |
|
|
|
10,266 |
|
|
|
11,104 |
|
|
|
40,476 |
|
Net unrealized (gains) losses on residential loans |
|
3,278 |
|
|
|
38,538 |
|
|
|
(36,159 |
) |
|
|
103,125 |
|
Net unrealized (gains) losses on commercial loans |
|
(136 |
) |
|
|
489 |
|
|
|
(147 |
) |
|
|
985 |
|
Non-cash equity compensation expense |
|
207 |
|
|
|
968 |
|
|
|
748 |
|
|
|
1,839 |
|
Distributable Earnings |
$ |
(3,859 |
) |
|
$ |
22,805 |
|
|
$ |
(12,978 |
) |
|
$ |
60,097 |
|
Angel Oak Mortgage REIT, Inc.
|
||||||
|
June 30, 2023 |
March 31, 2023 |
December 31, 2022 |
|||
|
|
|||||
GAAP total stockholders’ equity |
$ |
232,676 |
$ |
244,378 |
$ |
236,479 |
Adjustments: |
|
|
|
|||
Fair value adjustment for securitized debt held at amortized cost |
|
95,326 |
|
89,284 |
|
90,348 |
Stockholders’ equity including economic book value adjustments |
$ |
328,002 |
$ |
333,662 |
$ |
326,827 |
|
|
|
|
|||
Number of shares of common stock outstanding at period end |
|
24,924,886 |
|
24,925,357 |
|
24,925,357 |
Book value per share of common stock |
$ |
9.34 |
$ |
9.80 |
$ |
9.49 |
Economic book value per share of common stock |
$ |
13.16 |
$ |
13.39 |
$ |
13.11 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230808904351/en/
Investors:
investorrelations@angeloakreit.com
855-502-3920
Media:
Bernardo Soriano, Gregory FCA for Angel Oak Mortgage, Inc.
914-656-3880
bernardo@gregoryfca.com
Company Contact:
KC Kelleher, Head of Corporate Finance & Investor Relations
404-528-2684
kc.kelleher@angeloakcapital.com
Source: Angel Oak Mortgage REIT, Inc.
