Angel Oak Mortgage REIT (AOMR) Q3 2024 earnings summary

Executive summary

• GAAP book value per share rose 10.3% to $11.28 and economic book value per share increased 6.5% to $14.02 compared to Q2 2024, driven by new loan purchases and valuation gains.

• Q3 2024 net income allocable to common stockholders was $31.2 million, up from $8.3 million in Q3 2023, supported by higher net interest income and unrealized gains.

• Net interest income for Q3 2024 was $9.0 million, up 22% year-over-year, with interest income growing 6% sequentially.

• Completed a $50 million senior unsecured notes offering, deploying proceeds into non-QM loan acquisitions and repurchasing 1.7 million shares for $20 million.

• Portfolio credit performance remains strong, with a 1.95% weighted average delinquency rate across the portfolio.

Financial highlights

• Q3 2024 GAAP net income was $31.2 million ($1.29 per diluted share); distributable earnings were a loss of $3.4 million ($0.14 per share) due to unrealized gains and realized hedge losses.

• Net realized and unrealized gains in Q3 2024 totaled $28.8 million, up from $5.3 million in Q3 2023.

• Purchased $264.8 million of loans in Q3 at a weighted average coupon of 7.74%, LTV of 70%, and credit score of 754.

• Operating expenses for Q3 2024 were $3.8 million, down from $4.4 million in Q3 2023.

• Declared a $0.32 per share dividend, payable November 27, 2024.

Outlook and guidance

• Management expects a constructive macroeconomic cycle, with net interest income growth driven by loan purchases, lower funding costs from Fed rate cuts, and additional securitizations.

• Targeting one securitization per quarter, with $200–$300 million in new loan originations and purchases per quarter.

• Asset yields expected to remain in the high 7% range in the near term, with potential for gradual decline as rates fall.

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

• Ongoing cost management and capital optimization remain priorities.