Angel Oak Mortgage, Inc. (NYSE: AOMR) (the “Company,” “we,”
and “our”), a leading 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, today reported
financial results for the quarter and six months ended June 30,
2021.
Second Quarter and Year-to-Date Highlights
- Completed initial public offering (“IPO”) and concurrent
private placement on June 21, 2021 with proceeds to the Company of
$176.8 million
- QTD GAAP net income of $2.2 million, or $0.13 per common
share
- YTD GAAP net income of $11.7 million, or $0.72 per common
share
- GAAP book value of $19.48 per share as of June 30, 2021, up
from $19.26 per share immediately following the completion of the
IPO
- GAAP return on equity of 2.7% for the second quarter and 8.1%
for the first half of 2021, in each case on an annualized
basis
- Declared dividend of $0.12 per share in the third quarter 2021,
related to June earnings and investment activity
- Distributable Earnings of $2.0 million for the quarter ended
June 30, 2021
Robert Williams, President and Chief Executive Officer of the
Company stated, “Our second quarter results were extremely strong,
continuing the trends from earlier in the year as we benefit from
the robust housing market and growing demand for non-QM loans. This
is a new and fresh investment opportunity and provides access to a
best-in-class mortgage originator that has been built over the past
12 years. The Angel Oak platform that supports our efforts
continues to produce high quality originations, and in the second
quarter, we acquired $395.5 million of new loans, with steady
yields even as interest rates have shifted. Finally, we were also
very pleased to have completed our IPO in June, in which we raised
$176.8 million of capital to fuel further growth in the coming
quarters, and we thank our investors and capital markets partners
for their support.”
Portfolio and Investment Activity
- Purchased $395.5 million of residential mortgage loans in the
second quarter, and an additional $186.0 million through August 12,
2021
- Purchased $500.7 million of other RMBS subsequent to the IPO to
quickly deploy the IPO capital into earning assets
- The Company did not complete any securitizations in the second
quarter
- Portfolio totaled $1.3 billion of residential mortgage loans
and other target assets as of June 30, 2021
Capital Markets Activity
On June 21, 2021, the Company completed its IPO and issued
7,200,000 shares of common stock at $19.00 per share for gross
proceeds of $136.8 million. Concurrent with the IPO, the Company
also completed a private placement of 2,105,263 shares of common
stock at $19.00 per share for gross proceeds of $40.0 million. The
transactions resulted in aggregate proceeds to the Company of
approximately $176.8 million, as all the offering costs and
underwriting discounts were paid for by Angel Oak Capital Advisors,
LLC (an affiliate of the Company’s external manager).
As of June 30, 2021, the Company was party to four financing
lines which permit borrowings in an aggregate amount of up to
$800.0 million.
We intend to continue financing with a variety of lenders to
ensure that during the time frame within which we are aggregating
whole loans in anticipation of a securitization transaction, any
effects of a liquidity or other event will be minimized to the
Company.
Balance Sheet
- $28.9 million of cash and cash equivalents as of June 30,
2021
- Debt to equity ratio of 2.2x as of June 30, 2021
- Held residential mortgage loans with a fair value of $529.3
million as of June 30, 2021
- Total liquidity of $513.9 million, including $484.9 million of
remaining capacity on the Company’s financing lines as of June 30,
2021
Dividend
On August 12, 2021, the Company’s Board of Directors declared a
common stock dividend of $0.12 per share for the third quarter of
2021. The dividend is payable on August 31, 2021 to common
stockholders of record as of August 23, 2021.
Conference Call and Webcast Information
The Company will host a live conference call and webcast today,
August 12, 2021 at 5:00 p.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: 1-877-407-9716
International: 1-201-493-6779
Conference Call Playback: Domestic: 1-844-512-2921
International: 1-412-317-6671 Passcode: 13722112 The playback can
be accessed through August 26, 2021.
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 GAAP, excluding (1) unrealized gains and losses on
our aggregate portfolio, and realized gains (losses) on
derivatives, (2) impairment losses, (3) extinguishment of debt, (4)
non-cash equity compensation expense, (5) the incentive fee earned
by our Manager, (6) realized gains or losses on swap terminations
and (7) certain other nonrecurring gains or losses. We believe that
the presentation of Distributable Earnings provides investors with
a useful measure to facilitate comparisons of financial performance
between our REIT peers, but has important limitations. We believe
Distributable Earnings 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 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 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 may not be comparable to similar measures
presented by other REITs.
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 and its financing needs and arrangements.
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” and
“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, their impact or the actual
effect of existing or future plans or strategies is inherently
uncertain, in particular due to the uncertainties created by the
COVID-19 pandemic, including the projected impact of the COVID-19
pandemic on the Company’s business, financial results and
performance. 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, Inc.
Angel Oak Mortgage, 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 U.S. mortgage market. 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. The Company is
externally managed and advised by an affiliate of Angel Oak Capital
Advisors, LLC, which, collectively with its affiliates, is a
leading alternative credit manager with a vertically integrated
mortgage origination platform. Additional information about the
Company is available at www.angeloakreit.com.
Angel Oak Mortgage, Inc. Condensed
Consolidated Statements of Operations and Comprehensive Income
(Loss) (Unaudited) (in thousands, except for share and per
share data)
Three Months Ended
Six Months Ended
June 30, 2021
June 30, 2020
June 30, 2021
June 30, 2020
INTEREST INCOME, NET
Interest income
$
12,143
$
12,926
$
22,177
$
22,543
Interest expense
1,846
3,711
2,678
6,665
NET INTEREST INCOME
10,297
9,215
19,499
15,878
REALIZED AND UNREALIZED GAINS (LOSSES),
NET
Net realized loss on derivative contracts,
RMBS, CMBS, and mortgage loans
(10,224
)
(2,847
)
(12,512
)
(15,616
)
Net unrealized gain (loss) on derivative
contracts and mortgage loans
4,813
24,009
9,330
(4,985
)
TOTAL REALIZED AND UNREALIZED GAINS
(LOSSES), NET
(5,411
)
21,162
(3,182
)
(20,601
)
EXPENSES
Operating and investment expenses
876
725
1,462
1,610
Operating expenses incurred with
affiliate
533
345
972
536
Securitization costs
—
2,094
—
2,094
Management fee incurred with affiliate
1,250
988
2,169
1,545
Total operating expenses
2,659
4,152
4,603
5,785
NET INCOME (LOSS)
$
2,227
$
26,225
$
11,714
$
(10,508
)
Preferred dividends
(4
)
(4
)
(8
)
(8
)
NET INCOME (LOSS) ALLOCABLE TO COMMON
STOCKHOLDER(S)
$
2,223
$
26,221
$
11,706
$
(10,516
)
Other comprehensive income (loss)
3,085
(944
)
3,615
(10,225
)
TOTAL COMPREHENSIVE INCOME
(LOSS)
$
5,308
$
25,277
$
15,321
$
(20,741
)
Basic earnings (loss) per common share
$
0.13
$
1.67
$
0.72
$
(0.67
)
Diluted earnings (loss) per common
share
$
0.13
$
1.67
$
0.72
$
(0.67
)
Weighted average number of common
shares outstanding:
Basic
16,746,606
15,724,050
16,238,153
15,724,050
Diluted
16,798,660
15,724,050
16,264,323
15,724,050
Angel Oak Mortgage, Inc. Condensed
Consolidated Balance Sheets (Unaudited) (in thousands, except
for share data)
As of:
June 30, 2021
December 31, 2020
ASSETS
Residential mortgage loans - at fair
value
$
529,329
$
142,030
Commercial mortgage loans - at fair
value
6,464
7,466
RMBS - at fair value
723,368
149,936
CMBS - at fair value
11,943
8,796
U.S. Treasury securities - at fair
value
274,992
149,995
Cash and cash equivalents
28,893
43,569
Restricted cash
4,135
2,404
Principal and interest receivable
18,445
5,072
Other assets
2,990
388
Total assets
$
1,600,559
$
509,656
LIABILITIES AND STOCKHOLDERS’
EQUITY
LIABILITIES
Notes payable
$
315,079
$
81,905
Securities sold under agreements to
repurchase
787,176
178,291
Unrealized depreciation on futures
contracts - at fair value
—
198
Accrued expenses
581
121
Accrued expenses payable to affiliate
574
732
Interest payable
368
100
Total liabilities
$
1,103,778
$
261,347
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Series A preferred stock, $0.01 par value,
12% cumulative, non-voting, 125 shares issued and outstanding as of
June 30, 2021 and December 31, 2020
101
101
Common stock, $0.01 par value. As of June
30, 2021: 350,000,000 shares authorized, 25,502,997 shares issued
and outstanding. As of December 31, 2020: 90,000,000 shares
authorized, 15,724,050 shares issued and outstanding.
255
157
Additional paid-in capital
479,542
246,489
Accumulated other comprehensive income
(loss)
2,576
(1,039
)
Retained earnings
14,307
2,601
Total stockholders’ equity
$
496,781
$
248,309
Total liabilities and stockholders’
equity
$
1,600,559
$
509,656
Angel Oak Mortgage, Inc. Reconciliation of
Net Income to Distributable Earnings (Unaudited) (in
thousands)
Three Months Ended
Six Months Ended
June 30, 2021
June 30, 2020
June 30, 2021
June 30, 2020
(in thousands)
Net income (loss) allocable to common
stockholder(s)
$
2,223
$
26,221
$
11,706
$
(10,516
)
Adjustments:
Net other-than-temporary credit impairment
losses
—
—
—
—
Net realized and unrealized (gains) losses
on derivatives
3,903
(1,169
)
2,294
176
Net unrealized (gains) losses on
residential loans
(4,062
)
(22,586
)
(6,954
)
2,839
Net unrealized (gains) losses on
commercial loans
(123
)
(254
)
(265
)
1,970
Net unrealized (gains) losses on financial
instruments at fair value
—
(8
)
—
10
(Gains) losses on extinguishment of
debt
—
—
—
—
Non-cash equity compensation expense
90
—
90
—
Inventive fee earned by our Manager
—
—
—
—
Realized gains (losses) on terminations of
interest rate swaps
—
—
—
—
Total other non-recurring (gains)
losses
—
—
—
—
Distributable Earnings
$
2,031
$
2,204
$
6,871
$
(5,521
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210812005675/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: Randy Chrisman, Chief Marketing & Corporate
Investor Relations Officer, Angel Oak Capital Advisors 404-953-4969
randy.chrisman@angeloakcapital.com
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