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 ended March 31,
2022.
First Quarter Highlights
- Q1 2022 GAAP net loss of $43.5 million, or $(1.77) per diluted
share of common stock.
- Q1 2022 Distributable Earnings of $37.3 million, or $1.49 per
diluted share of common stock.
- Declared dividend of $0.45 per share of common stock for the
first quarter of 2022, payable on May 31, 2022, to common
stockholders of record as of May 23, 2022.
- GAAP book value of $16.80 per share as of March 31, 2022, down
from $19.47 per share as of December 31, 2021.
Robert Williams, President and Chief Executive Officer of the
Company, commented, “The first quarter of 2022 was challenging with
historic volatility both in nominal interest rates and in the
widening of interest rate spreads. This affected unrealized
mark-to-market valuations of our whole loan portfolio, securitized
loans, and retained RMBS, driving a negative impact to our book
value. Despite these challenges, AOMR generated Distributable
Earnings of $1.49 per fully diluted share of common stock,
demonstrating an effective interest rate hedging strategy and the
income-generating power of the portfolio. In the coming quarters,
we expect our loan portfolio to begin to reflect higher coupon loan
purchases and we will methodically and judiciously use the
securitization market to reduce liquidity risk and interest rate
risk, enabling us to continue to deliver on our core business
model.”
Portfolio and Investment Activity
- Purchased $676.0 million of non-QM residential mortgage loans
in the first quarter 2022.
- Completed $537.6 million residential non-QM securitization at a
3.06% weighted average cost of funding.
- Portfolio total $2.7 billion of residential mortgage loans and
other target assets as of March 31, 2022.
Capital Markets Activity
As of March 31, 2022, the Company was party to six financing
lines which permit borrowings in an aggregate amount of up to $1.3
billion. During the quarter ended March 31, 2022, we extended the
maturity date with respect to multiple facilities. Subsequent to
the quarter ended March 31, 2022, we added $340.0 million of
additional financing capacity. We intend to continue financing with
warehouse facilities of varied maturities, sizes, and counterparty
types to manage our exposure to any individual counterparty.
Balance Sheet
- $90.4 million of cash and cash equivalents as of March 31,
2022.
- Recourse debt to equity ratio of 3.4x as of March 31,
2022.
- Held residential mortgage loans with a fair value of $1.1
billion as of March 31, 2022.
Dividend
On May 12, 2022, the Company declared a dividend of $0.45 per
share of common stock for the first quarter of 2022. The dividend
is payable on May 31, 2022 to common stockholders of record as of
May 23, 2022.
Conference Call and Webcast Information
The Company will host a live conference call and webcast today,
May 12, 2022 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: 13729197 The playback can
be accessed through May 26, 2022.
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, (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.
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.
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
March 31, 2022
March 31, 2021
INTEREST INCOME, NET
Interest income
$
27,109
$
10,033
Interest expense
10,170
832
NET INTEREST INCOME
16,939
9,201
REALIZED AND UNREALIZED (LOSSES) GAINS,
NET
Net realized gain (loss) on mortgage
loans, derivative contracts, RMBS, and CMBS
26,416
(2,288
)
Net unrealized (loss) gain on mortgage
loans and derivative contracts
(80,181
)
4,518
TOTAL REALIZED AND UNREALIZED (LOSSES)
GAINS, NET
(53,756
)
2,230
EXPENSES
Operating expenses
3,784
523
Operating expenses incurred with
affiliate
855
439
Due diligence and transaction costs
770
64
Stock compensation
871
—
Securitization costs
2,019
—
Management fee incurred with affiliate
1,873
918
Total operating expenses
10,172
1,944
INCOME BEFORE INCOME TAXES
(46,998
)
9,487
Income tax benefit
(3,457
)
—
NET (LOSS) INCOME
$
(43,541
)
$
9,487
Preferred dividends
(4
)
(4
)
NET (LOSS) INCOME ALLOCABLE TO COMMON
STOCKHOLDER(S)
$
(43,545
)
$
9,483
Other comprehensive (loss) income
(12,987
)
529
TOTAL COMPREHENSIVE (LOSS)
INCOME
$
(56,532
)
$
10,012
Basic (loss) earnings per common share
$
(1.77
)
$
0.60
Diluted (loss) earnings per common
share
$
(1.77
)
$
0.60
Weighted average number of common
shares outstanding:
Basic
24,642,961
15,724,050
Diluted
24,642,961
15,724,050
Angel Oak Mortgage,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(in thousands, except for share
data)
As of:
March 31, 2022
December 31, 2021
ASSETS
Residential mortgage loans - at fair
value
$
1,103,773
$
1,061,912
Residential mortgage loans in
securitization trusts - at fair value
1,077,967
667,365
Commercial mortgage loans - at fair
value
20,704
18,664
RMBS - at fair value
491,287
485,634
CMBS - at fair value
10,055
10,756
U.S. Treasury securities - at fair
value
349,992
249,999
Cash and cash equivalents
90,445
40,801
Restricted cash
5,448
11,508
Principal and interest receivable
28,012
25,984
Unrealized appreciation on TBAs and
interest rate futures contracts - at fair value
17,027
2,428
Other assets
3,491
2,878
Total assets
$
3,198,201
$
2,577,929
LIABILITIES AND STOCKHOLDERS’
EQUITY
LIABILITIES
Notes payable
$
956,165
$
853,408
Non-recourse securitization obligation,
collateralized by residential mortgage loans - at fair value
1,031,200
616,557
Securities sold under agreements to
repurchase
477,422
609,251
Unrealized depreciation on TBAs and
interest rate futures contracts - at fair value
—
728
Due to broker
298,654
—
Collateral due to counterparties
8,024
—
Accrued expenses
530
442
Accrued expenses payable to affiliate
1,204
1,425
Interest payable
1,709
1,283
Income taxes payable
—
1,600
Management fee payable to affiliate
1,857
1,845
Total liabilities
$
2,776,765
$
2,086,539
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Series A preferred stock, $0.01 par value,
12% cumulative, non-voting, 125 shares issued and outstanding as of
March 31, 2022 and December 31, 2021
101
101
Common stock, $0.01 par value. As of March
31, 2022: 350,000,000 shares authorized, 25,085,796 shares issued
and outstanding. As of December 31, 2021: 350,000,000 shares
authorized, 25,227,328 shares issued and outstanding.
252
252
Additional paid-in capital
463,088
476,510
Accumulated other comprehensive (loss)
income
(9,987
)
3,000
Retained (deficit) earnings
(32,018
)
11,527
Total stockholders’ equity
$
421,436
$
491,390
Total liabilities and stockholders’
equity
$
3,198,201
$
2,577,929
Angel Oak Mortgage,
Inc.
Reconciliation of Net Income
(Loss) to Distributable Earnings
and Distributable Earnings
Return on Average Equity
(Unaudited)
(in thousands)
Three Months Ended
March 31, 2022
March 31, 2021
(in thousands)
Net (loss) income allocable to common
stockholder(s)
$
(23,101
)
$
9,483
Adjustments:
Net other-than-temporary credit impairment
losses
—
—
Net unrealized (gains) losses on
derivatives
(15,326
)
(1,610
)
Net unrealized (gains) losses on
residential loans in securitization trusts and non-recourse
securitization obligation
30,210
—
Net unrealized (gains) losses on
residential loans
64,587
(2,892
)
Net unrealized (gains) losses on
commercial loans
496
(142
)
Net unrealized (gains) losses on financial
instruments at fair value
—
—
(Gains) losses on extinguishment of
debt
—
—
Non-cash equity compensation expense
871
—
Incentive fee earned by the Manager
—
—
Realized gains (losses) on terminations of
interest rate swaps
—
—
Total other non-recurring (gains)
losses
—
—
Distributable Earnings
$
37,293
$
4,839
Three Months Ended
March 31, 2022
March 31, 2021
($ in thousands)
Annualized Distributable Earnings
$
149,171
$
19,356
Average total stockholder(s)’ equity
$
456,415
$
281,481
Distributable Earnings Return on Average
Equity
32.7
%
6.9
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512006031/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: Randy Chrisman, Chief Marketing &
Corporate Investor Relations Officer, Angel Oak Capital Advisors
404-953-4969 randy.chrisman@angeloakcapital.com
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