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 nine months ended September
30, 2021.
Third Quarter and Year-to-Date Highlights
- QTD GAAP net income of $6.3 million, EPS of $0.25.
- YTD GAAP net income of $18.1 million, EPS of $0.93.
- GAAP book value of $19.72 per share as of September 30, 2021,
up from $19.48 per share as of June 30, 2021.
- GAAP return on equity of 5.1% for the third quarter and 6.7%
for the nine months of 2021, in each case on an annualized
basis.
- Declared dividend of $0.36 per share for the third quarter
2021, payable on November 30, 2021.
- Distributable Earnings of $4.9 million for the quarter ended
September 30, 2021, and $11.8 million for the nine months ended
September 30, 2021.
Robert Williams, President and Chief Executive Officer of the
Company, commented, “We were very active on the investment front
this quarter, taking advantage of strong volumes from our
origination partners to deploy capital. We purchased $534.0 million
of loans through our proprietary origination channels, bringing our
total loan portfolio to over $1.0 billion. Additionally, we
completed our first non-QM securitization since our IPO, executing
it at very strong pricing and with high quality underlying
collateral. On the financing side, we expanded our credit lines by
$450.0 million to a total of $1.25 billion, providing us with
enhanced capacity to continue funding loan investments and future
securitizations. Lastly, we declared a dividend that we believe
represents a highly attractive risk-adjusted yield in today’s
world. As we look ahead to the balance of 2021 and beyond, we
remain focused on continuing to grow our asset base and providing
our shareholders with the benefits of unparalleled access to high
quality loan investments within the non-QM loan market.”
Portfolio and Investment Activity
- Purchased $543.0 million of residential mortgage loans in the
third quarter 2021.
- As of November 8, 2021, purchased an additional $338.0 million
residential mortgage loans, with an additional strong pipeline of
loans to close out the year.
- Completed $316.6 million residential non-QM securitization at a
1.12% weighted average cost of funding.
- Portfolio totaled $1.7 billion of residential mortgage loans
and other target assets as of September 30, 2021.
Capital Markets Activity
In the third quarter, the Company added two financing lines
totaling $450.0 million in borrowing capacity, one of which is a
committed borrowing facility. As of September 30, 2021, the Company
was party to six financing lines which permit borrowings in an
aggregate amount of up to $1.25 billion.
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
- $49.2 million of cash and cash equivalents as of September 30,
2021.
- Recourse debt to equity ratio of 2.1x as of September 30,
2021.
- Held residential mortgage loans with a fair value of $1.0
billion as of September 30, 2021.
- Total liquidity of $749.0 million, including $699.0 million of
remaining capacity on the Company’s financing lines as of September
30, 2021.
Dividend
On November 8, 2021, the Company declared a common stock
dividend of $0.36 per share for the third quarter of 2021. The
dividend is payable on November 30, 2021 to common stockholders of
record as of November 22, 2021.
Conference Call and Webcast Information
The Company will host a live conference call and webcast today,
November 9, 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:
13723736 The playback can be accessed through November 23,
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
Nine Months Ended
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
INTEREST INCOME, NET
Interest income
$
15,587
$
9,387
$
37,763
$
31,929
Interest expense
2,599
788
5,277
7,454
NET INTEREST INCOME
12,988
8,599
32,486
24,475
REALIZED AND UNREALIZED GAINS (LOSSES),
NET
Net realized loss on derivative contracts,
RMBS, CMBS, and mortgage loans
(7,144)
(3,102)
(19,656)
(18,717)
Net unrealized gain (loss) on derivative
contracts and mortgage loans
6,821
616
16,151
(4,369)
TOTAL REALIZED AND UNREALIZED GAINS
(LOSSES), NET
(323)
(2,486)
(3,505)
(23,086)
EXPENSES
Operating and investment expenses
3,830
347
5,293
1,957
Operating expenses incurred with
affiliate
645
566
1,617
1,101
Securitization costs
—
—
—
2,094
Management fee incurred with affiliate
1,846
958
4,015
2,503
Total operating expenses
6,321
1,871
10,925
7,655
NET INCOME (LOSS)
$
6,344
$
4,242
$
18,056
$
(6,266)
Preferred dividends
(4)
(4)
(11)
(11)
NET INCOME (LOSS) ALLOCABLE TO COMMON
STOCKHOLDER(S)
$
6,340
$
4,238
$
18,045
$
(6,277)
Other comprehensive income (loss)
1,818
5,171
5,433
(5,054)
TOTAL COMPREHENSIVE INCOME
(LOSS)
$
8,158
$
9,409
$
23,478
$
(11,331)
Basic earnings (loss) per common share
$
0.25
$
0.27
$
0.94
$
(0.40)
Diluted earnings (loss) per common
share
$
0.25
$
0.27
$
0.93
$
(0.40)
Angel Oak Mortgage,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(in thousands, except for share
data)
As of:
September 30, 2021
December 31, 2020
ASSETS
Residential mortgage loans - at fair
value
$
723,139
$
142,030
Residential mortgage loans in
securitization trust - at fair value
319,812
—
Commercial mortgage loans - at fair
value
7,936
7,466
RMBS - at fair value
621,670
149,936
CMBS - at fair value
11,349
8,796
U.S. Treasury securities - at fair
value
80,000
149,995
Cash and cash equivalents
49,177
43,569
Restricted cash
3,093
2,404
Principal and interest receivable
12,313
5,072
Other assets
7,113
388
Total assets
$
1,835,602
$
509,656
LIABILITIES AND STOCKHOLDERS’
EQUITY
LIABILITIES
Notes payable
$
550,752
$
81,905
Non-recourse securitization obligation,
collateralized by residential mortgage loans
290,529
—
Securities sold under agreements to
repurchase
489,287
178,291
Unrealized depreciation on futures
contracts - at fair value
—
198
Accrued expenses
770
121
Accrued expenses payable to affiliate
749
732
Interest payable
608
100
Management fee payable to affiliate
1,845
—
Total liabilities
$
1,334,540
$
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
September 30, 2021 and December 31, 2020
101
101
Common stock, $0.01 par value. As of
September 30, 2021: 350,000,000 shares authorized, 25,405,544
shares issued and outstanding. As of December 31, 2020:
90,000,000 shares authorized, 15,724,050 shares issued and
outstanding.
254
157
Additional paid-in capital
478,723
246,489
Accumulated other comprehensive income
(loss)
4,394
(1,039)
Retained earnings
17,590
2,601
Total stockholders’ equity
$
501,062
$
248,309
Total liabilities and stockholders’
equity
$
1,835,602
$
509,656
Angel Oak Mortgage,
Inc.
Reconciliation of Net Income
to Distributable Earnings
(Unaudited)
(in thousands)
Three Months Ended
Nine Months Ended
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
(in thousands)
Net income (loss) allocable to common
stockholder(s)
$
6,340
$
4,238
$
18,045
$
(6,277)
Adjustments:
Net other-than-temporary credit impairment
losses
—
—
—
—
Net realized and unrealized (gains) losses
on derivatives
3,837
(101)
6,130
75
Net unrealized (gains) losses on
residential loans
(6,157)
(429)
(13,112)
2,410
Net unrealized (gains) losses on
commercial loans
43
(86)
(221)
1,884
Net unrealized (gains) losses on financial
instruments at fair value
—
—
—
10
(Gains) losses on extinguishment of
debt
—
—
—
—
Non-cash equity compensation expense
833
—
924
—
Inventive fee earned by our Manager
—
—
—
—
Realized gains (losses) on terminations of
interest rate swaps
—
—
—
—
Total other non-recurring (gains)
losses
—
—
—
—
Distributable Earnings
$
4,896
$
3,622
$
11,766
$
(1,898)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211109006455/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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