0001766478false00017664782024-08-062024-08-060001766478us-gaap:CommonStockMember2024-08-062024-08-060001766478aomr:A9.500SeniorNotesDue2029Member2024-08-062024-08-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 6, 2024

Angel Oak Mortgage REIT, Inc.
(Exact name of registrant as specified in its charter)
Maryland
001-40495
37-1892154
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)

3344 Peachtree Road Northeast, Suite 1725, Atlanta, Georgia 30326
(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: (404) 953-4900

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par value per shareAOMRNew York Stock Exchange
9.500% Senior Notes due 2029AOMNNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐



Item 2.02.    Results of Operations and Financial Condition.

On August 6, 2024, Angel Oak Mortgage REIT, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this current report on Form 8-K and incorporated herein by reference.

Also on August 6, 2024, the Company will hold a teleconference and audio webcast to discuss its financial results for the quarter ended June 30, 2024. A copy of the supplementary materials that will be referred to on the teleconference and webcast, and which will be posted to the Company’s website, is furnished as Exhibit 99.2 to this current report on Form 8-K and incorporated herein by reference.

The information contained in this Item 2.02 and the attached Exhibits 99.1 and 99.2 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 2.02 and the attached Exhibits 99.1 and 99.2 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, unless it is specifically incorporated by reference therein.

Item 9.01.    Financial Statements and Exhibits.
(d)    Exhibits
Exhibit No.
Exhibit 99.1    Press Release dated August 6, 2024
Exhibit 99.2    Supplementary Materials to be used during the webcast conference call on August 6, 2024
Exhibit 104    Cover Page Interactive Data File (embedded within the Inline XBRL document).





SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




Date: August 6, 2024
ANGEL OAK MORTGAGE REIT, INC.
By: /s/ Brandon Filson
Name: Brandon Filson
Title: Chief Financial Officer and Treasurer




image_0a.jpg

Angel Oak Mortgage REIT, Inc. Reports Second Quarter 2024 Financial Results

ATLANTA – August 6, 2024 -- Angel Oak Mortgage REIT, 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 second quarter of 2024.

Second Quarter and Year-to-Date Highlights
•Q2 2024 net interest income of $9.5 million, an increase of 47% versus Q2 2023.
•Net interest income of $18.0 million in the first six months of 2024, an increase of 36% versus net interest income of $13.3 million in the first six months of 2023.
•Q2 2024 GAAP net loss of ($0.3) million, or ($0.01) per diluted share of common stock.
•Q2 2024 Distributable Earnings loss of ($2.3) million, or ($0.09) per diluted share of common stock.
•GAAP book value of $10.23 per share of common stock as of June 30, 2024, down from $10.55 per share of common stock as of March 31, 2024.
•Economic book value of $13.16 per share of common stock as of June 30, 2024, down from $13.78 per share of common stock as of March 31, 2024.
•Declared dividend of $0.32 per share of common stock, to be paid on August 30, 2024 to common stockholders of record as of August 22, 2024.

Sreeni Prabhu, Chief Executive Officer and President of Angel Oak Mortgage REIT, Inc., said "We are proud to mark our fourth consecutive quarter of net interest income expansion with growth of 47% from the second quarter of 2023 to the second quarter of 2024, and a 36% increase from the first six months of 2023 to the first six months of 2024. This performance underscores the momentum we carry as we deploy the proceeds of our $50 million senior unsecured notes issuance in July, which we expect to catalyze the next phase of growth for AOMR. With this additional capital, we intend to deliver further net interest income and earnings accretion, enabled by the purchase of additional newly-originated loans and the subsequent execution of profitable securitizations while maintaining our vigilant and methodical capital allocation and liquidity management strategy. We have demonstrated our ability to deliver consistent, sustained value creation and effectively manage capital, and we look forward to beginning our next phase of growth in the second half of 2024.”

Portfolio and Investment Activity
•During the quarter, the Company executed the AOMT 2024-4 securitization as the sole contributor of loans. The Company contributed loans with a scheduled unpaid principal balance of approximately $299.8 million and a 7.4% weighted average coupon. This securitization reduced the Company’s whole loan warehouse debt by $235.9 million and reduced financing costs by approximately 100 basis points compared to the financing cost prior to securitization.
•Additionally, the Company participated in the AOMT 2024-6 securitization during the second quarter. AOMT 2024-6 was an approximately $479.6 million scheduled unpaid principal balance securitization backed by a pool of residential mortgage loans, to which the Company contributed loans with a scheduled unpaid principal balance of approximately $22.9 million.
•As of June 30, 2024, the weighted average coupon of our residential whole loans portfolio increased to 7.71%, 60 basis points higher than at the end of the first quarter 2024 and 287 basis points higher than at the end of the second quarter of 2023.








Capital Markets Activity
•Subsequent to the end of the second quarter, on July 25, 2024, the Company issued $50 million of senior unsecured notes due 2029 with a coupon of 9.50%. This issuance is intended to be accretive, driving incremental asset expansion and earnings growth. The Company intends to use the majority of the net proceeds from the offering for general corporate purposes, which may include the acquisition of non-qualified residential mortgage loans and other target assets primarily sourced from the Company's affiliated proprietary mortgage lending platform or other target assets through the secondary market in a manner consistent with the Company's strategy and investment guidelines. Additionally, the Company used the net proceeds from the offering to repurchase 1,707,922 shares of the Company's common stock owned by Xylem Finance, LLC, an affiliate of Davidson Kempner Capital Management LP, for an aggregate repurchase price of approximately $20.0 million.
•As of June 30, 2024, the Company was a party to three loan financing lines which permit borrowings in an aggregate amount of up to $1.1 billion, of which approximately $101 million is drawn, leaving capacity of approximately $950 million for new loan purchases.

Balance Sheet
•Target assets totaled $1.9 billion as of June 30, 2024.
•The Company held residential mortgage whole loans with fair value of $158.9 million as of June 30, 2024.
•The recourse debt to equity ratio was 1.2x as of June 30, 2024.
oAs of today’s date, our recourse debt to equity ratio is approximately 0.9x. This reflects the maturity of short-term U.S. Treasuries and their corresponding repurchase agreements held at the end of the second quarter, as well as the subsequent issuance of $50 million of senior unsecured notes and $20 million share repurchase.
oOur recourse debt to equity ratio is expected to increase as current-market coupon loans are purchased, but is expected to remain below 2.5x.

Dividend
On August 6, 2024, the Company declared a dividend of $0.32 per share of common stock, which will be paid on August 30, 2024, to common stockholders of record as of August 22, 2024.

Conference Call and Webcast Information
The Company will host a live conference call and webcast today, August 6, 2024 at 8:30 a.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: 1-844-826-3033
International: 1-412-317-5185

Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Pass code: 10190401



The playback can be accessed through August 20, 2024.



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 generally accepted accounting principles in the United States of America (“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 Falcons I, LLC, our external manager (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 among our real estate investment trust (“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.

Economic book value is a non-GAAP financial measure of our financial position. To calculate our economic book value, the portions of our non-recourse financing obligation held at amortized cost are adjusted to fair value. These adjustments are also reflected in our end of period total stockholders’ equity. Management considers economic book value to provide investors with a useful supplemental measure to evaluate our financial position as it reflects the impact of fair value changes for our legally held retained bonds, irrespective of the accounting model applied for GAAP reporting purposes. Economic book value does not represent and should not be considered as a substitute for book value per share of common stock or stockholders’ equity, as determined in accordance with GAAP, and our calculation of this measure may not be comparable to similarly titled measures reported by other companies.

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. 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,” “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 or their impact or the actual effect of existing or future plans or strategies is inherently uncertain. 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 REIT, Inc.
Angel Oak Mortgage REIT, 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 REIT, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(in thousands, except for share and per share data)

Three Months EndedSix Months Ended
June 30, 2024June 30, 2023June 30, 2024June 30, 2023
INTEREST INCOME, NET
Interest income$25,902 $23,763 $51,114 $47,503 
Interest expense16,439 17,311 33,072 34,252 
NET INTEREST INCOME$9,463 $6,452 $18,042 $13,251 
REALIZED AND UNREALIZED GAINS (LOSSES), NET
Net realized gain (loss) on mortgage loans, derivative contracts, RMBS, and CMBS$(6,770)$(4,169)$(8,192)$(15,012)
Net unrealized gain (loss) on trading securities, mortgage loans, portion of debt at fair value option, and derivative contracts2,658 379 13,342 10,569 
TOTAL REALIZED AND UNREALIZED GAINS (LOSSES), NET$(4,112)$(3,790)$5,150 $(4,443)
EXPENSES
Operating expenses
$1,333 $2,214 $3,333 $4,418 
Operating expenses incurred with affiliate456 607 971 1,073 
Due diligence and transaction costs359 21 409 21 
Stock compensation630 207 1,260 748 
Securitization costs1,410 1,027 1,583 1,910 
Management fee incurred with affiliate1,294 1,493 2,606 3,015 
Total operating expenses$5,482 $5,569 $10,162 $11,185 
INCOME (LOSS) BEFORE INCOME TAXES$(131)$(2,907)$13,030 $(2,377)
     Income tax expense142 781 429 781 
NET INCOME (LOSS) ALLOCABLE TO COMMON STOCKHOLDERS$(273)$(3,688)$12,601 $(3,158)
Other comprehensive income (loss)125 (242)1,828 14,562 
TOTAL COMPREHENSIVE INCOME (LOSS)$(148)$(3,930)$14,429 $11,404 
Basic earnings (loss) per common share$(0.01)$(0.15)$0.51 $(0.13)
Diluted earnings (loss) per common share$(0.01)$(0.15)$0.50 $(0.13)
Weighted average number of common shares outstanding:
Basic24,810,021 24,686,881 24,792,918 24,674,875 
Diluted24,810,021 24,686,881 24,973,501 24,674,875 


Angel Oak Mortgage REIT, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except for share and per share data)
As of:
June 30, 2024December 31, 2023
ASSETS
Residential mortgage loans - at fair value$158,940 $380,040 
Residential mortgage loans in securitization trusts - at fair value1,447,901 1,221,067 
RMBS - at fair value 266,752 472,058 
U.S. Treasury securities - at fair value 149,957 149,927 
Cash and cash equivalents43,956 41,625 
Restricted cash2,146 2,871 
Principal and interest receivable6,174 7,501 
Unrealized appreciation on TBAs and interest rate futures contracts - at fair value1,702 — 
Other assets36,246 32,922 
Total assets$2,113,774 $2,308,011 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Notes payable$101,200 $290,610 
Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts 1,372,272 1,169,154 
Securities sold under agreements to repurchase201,051 193,656 
Unrealized depreciation on TBAs and interest rate futures contracts - at fair value— 1,334 
Due to broker181,847 391,964 
Accrued expenses653 985 
Accrued expenses payable to affiliate397 748 
Interest payable460 820 
Income taxes payable78 1,241 
Management fee payable to affiliate10 1,393 
Total liabilities$1,857,968 $2,051,905 
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value. As of June 30, 2024: 350,000,000 shares authorized, 24,998,549 shares issued and outstanding. As of December 31, 2023: 350,000,000 shares authorized, 24,965,274 shares issued and outstanding.$249 $249 
Additional paid-in capital478,328 477,068 
Accumulated other comprehensive income (loss)(3,147)(4,975)
Retained earnings (deficit) (219,624)(216,236)
Total stockholders’ equity$255,806 $256,106 
Total liabilities and stockholders’ equity$2,113,774 $2,308,011 



Angel Oak Mortgage REIT, Inc.
Reconciliation of Net Income (Loss) to Distributable Earnings
and Distributable Earnings Return on Average Equity
(Unaudited)








Three Months EndedSix Months Ended
June 30, 2024June 30, 2023June 30, 2024June 30, 2023
(in thousands)
Net income (loss) allocable to common stockholders$(273)$(3,688)$12,601 $(3,158)
Adjustments:
Net unrealized (gains) losses on trading securities1,813 3,882 1,814 2,277 
Net unrealized (gains) losses on derivatives(2,592)(12,179)(3,037)12,357 
Net unrealized (gains) losses on residential loans in securitization trusts and non-recourse securitization obligation 2,579 4,777 (2,568)11,104 
Net unrealized (gains) losses on residential loans(4,431)3,278 (9,502)(36,159)
Net unrealized (gains) losses on commercial loans(27)(136)(49)(147)
Non-cash equity compensation expense630 207 1,260 748 
Distributable Earnings$(2,301)$(3,859)$519 $(12,978)



Three Months EndedSix Months Ended
June 30, 2024June 30, 2023June 30, 2024June 30, 2023
($ in thousands)
Annualized Distributable Earnings $(9,204)$(15,436)$1,038$(25,956)
Average total stockholders’ equity$259,565$239,991$258,412$238,345
Distributable Earnings Return on Average Equity(3.5)%(6.4)%0.4%(10.9)%










Angel Oak Mortgage REIT, Inc.
Reconciliation of Stockholders’ Equity to Stockholders’ Equity Including Economic Book Value Adjustments
and Economic Book Value per Share of Common Stock
(Unaudited)

June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
(in thousands, except for share and per share data)
GAAP total stockholders’ equity$255,806 $263,324 $256,106 $231,802 $232,676 
Adjustments:
Fair value adjustment for securitized debt held at amortized cost73,053 80,599 81,942 97,592 95,326 
Stockholders’ equity including economic book value adjustments$328,859 $343,923 $338,048 $329,394 $328,002 
Number of shares of common stock outstanding at period end24,998,549 24,965,274 24,965,274 24,955,566 24,924,886 
Book value per share of common stock$10.23 $10.55 $10.26 $9.29 $9.34 
Economic book value per share of common stock$13.16 $13.78 $13.54 $13.20 $13.16 


































































































    


















































Contacts

Investors:
investorrelations@angeloakreit.com
855-502-3920

IR Agency Contact:
Nick Teves or Joseph Caminiti, Alpha IR Group
312-445-2870
AOMR@alpha-ir.com

Company Contact:
KC Kelleher, Head of Corporate Finance & Investor Relations
404-528-2684
kc.kelleher@angeloakcapital.com


 

 
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0 50 100 # of L oa ns Credit Score 0 40 80 120 160 200 # o f Lo a n s Coupon Rate (%)

 
Investor Loans, 36% Just Missed Prime, 26% Loans Made to Bank Statement Borrowers, 38%

 
FL, 22% CA, 35% TX, 7% GA, 3% Other, 34%

 
FL, 21% CA, 36% TX, 8%GA, 4% Other, 31%

 

 

 
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Cover
Aug. 06, 2024
Document Information [Line Items]  
Entity Central Index Key 0001766478
Amendment Flag false
Document Type 8-K
Document Period End Date Aug. 06, 2024
Entity Registrant Name Angel Oak Mortgage REIT, Inc.
Entity Incorporation, State or Country Code MD
Entity File Number 001-40495
Entity Tax Identification Number 37-1892154
Entity Address, Address Line One 3344 Peachtree Road Northeast
Entity Address, Address Line Two Suite 1725
Entity Address, City or Town Atlanta
Entity Address, State or Province GA
Entity Address, Postal Zip Code 30326
City Area Code 404
Local Phone Number 953-4900
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Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Common stock, $0.01 par value per share
Trading Symbol AOMR
Security Exchange Name NYSE
9.500% Senior Notes Due 2029  
Document Information [Line Items]  
Title of 12(b) Security 9.500% Senior Notes due 2029
Trading Symbol AOMN
Security Exchange Name NYSE
Angel Oak Mortgage REIT (NYSE:AOMR)
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