Angel Oak Mortgage REIT (AOMR) Q2 2024 earnings summary

Executive summary

• Net interest income rose 47% year-over-year to $9.5 million in Q2 2024, marking the fourth consecutive quarterly increase, driven by profitable loan acquisitions and effective securitization execution.

• GAAP net loss was ($0.3) million ($0.01 per share) and distributable earnings loss was ($2.3) million ($0.09 per share) for Q2 2024, both improved from the prior year.

• Declared a $0.32 per share dividend, payable August 30, 2024.

• Completed a $50 million senior unsecured notes offering and repurchased $20 million in shares, supporting future growth and capital flexibility.

• Credit performance remained strong with a 1.7% ninety-day delinquency rate across residential portfolios.

Financial highlights

• Q2 2024 net interest income was $9.5 million, up from $6.5 million in Q2 2023; interest income reached $25.9 million and interest expense was $16.4 million.

• Operating expenses (excluding certain items) were $3.4 million, down $400,000 sequentially and $900,000 year-over-year; total operating expenses were $5.5 million in Q2 2024.

• Net realized and unrealized losses totaled ($4.1) million in Q2 2024, primarily from securitizations and RMBS.

• Cash and cash equivalents were $44.0 million as of June 30, 2024.

• Total assets as of June 30, 2024, were $2.11 billion; total liabilities were $1.86 billion.

Outlook and guidance

• Optimistic about capitalizing on accretive loan purchases in the second half of 2024, with $1 billion in loan acquisitions targeted over the next few quarters.

• Proceeds from the $50 million notes are expected to drive further net interest income and earnings accretion.

• Recourse debt-to-equity ratio is expected to remain below 2.5x as new loan purchases continue.

• Projecting one securitization per quarter, with the next likely in late Q3 or early Q4.

• Management anticipates continued asset expansion and earnings growth in the second half of 2024.