AOMR 8-K
Angel Oak Mortgage REIT, Inc. (AOMR)
8-K
2021-11-09
For: 2021-11-09
View Original
Added on
April 06, 2026
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): November 9, 2021
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
(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):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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 November 9, 2021, Angel Oak Mortgage, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2021. 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 November 9, 2021, the Company will hold a teleconference and audio webcast to discuss its financial results for the quarter ended September 30, 2021. 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 November 9, 2021
Exhibit 99.2 Supplementary Materials to be used during the webcast conference call on November 9, 2021
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: November 9, 2021 | ANGEL OAK MORTGAGE, INC. | |||||||
By: /s/ Brandon Filson | ||||||||
| Name: Brandon Filson | ||||||||
| Title: Chief Financial Officer and Treasurer | ||||||||
EXHIBIT 99.1
Angel Oak Mortgage, Inc. Reports Third Quarter 2021 Financial Results
ATLANTA – November 9, 2021 -- 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) | |||||||||||||||
Contacts
Investors:
855-502-3920
Media:
Bernardo Soriano, Gregory FCA for Angel Oak Mortgage, Inc.
914-656-3880
Company Contact:
Randy Chrisman, Chief Marketing & Corporate Investor Relations Officer, Angel Oak Capital Advisors
404-953-4969
Third Quarter 2021 Earnings Supplemental Angel Oak Mortgage, Inc.
Table of Contents 2 AOMR Overview 5 Third Quarter 2021 Earnings Results 7 Book Value 8 Securitization and Funding Update 9 Portfolio Overview 10 Investment Highlights 12 Appendix: Financial Statements 13
Important Notices 3 References in this presentation to “we,” “us,” “our,” “AOMR” and the “Company” refer to Angel Oak Mortgage, Inc., a Maryland corporation, its operating partnership and their respective subsidiaries; the term “Manager” refers to Falcons I, LLC, our external manager; the term “Angel Oak Capital” refers to Angel Oak Capital Advisors, LLC; the term “Angel Oak Mortgage Lending” refers collectively to Angel Oak Mortgage Solutions, Angel Oak Home Loans and Angel Oak Commercial Lending; the term “Angel Oak Mortgage Solutions” refers to Angel Oak Mortgage Solutions LLC; the term “Angel Oak Home Loans” refers to Angel Oak Home Loans LLC; the term “Angel Oak Commercial Lending” refers to Angel Oak Commercial Lending, LLC, Angel Oak Prime Bridge, Angel Oak Commercial Bridge and Cherrywood Mortgage; the term “Angel Oak Prime Bridge” refers to Angel Oak Prime Bridge, LLC; the term “Angel Oak Commercial Bridge” refers to Angel Oak Commercial Bridge, LLC; and the term “Cherrywood Mortgage” refers to Cherrywood Mortgage, LLC; the term “Angel Oak” refers collectively to Angel Oak Capital and its affiliates, including our Manager; and the term “AOMT” refers to Angel Oak Mortgage Trust I, LLC, Angel Oak’s securitization platform, including its subsidiaries and affiliates. This presentation has been prepared by the Company solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. The information contained in this presentation is provided to you as a summary as of the date of this presentation and is subject to change without notice. The Company does not undertake any obligation to update this presentation to reflect actual events, circumstances or changes in expectations. This presentation was prepared based upon information believed to be reliable. However, the Company does not make any representation or warranty with regard to the accuracy or completeness of the information herein and some of such information was obtained from published sources or other third parties without independent verification. This presentation contains certain forward-looking statements that are subject to various risks and uncertainties, including, without limitation, statements relating to the performance of our 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. Our ability to predict future events or conditions or 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 our business, financial results and performance. Although we believe 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. Factors that could have a material adverse effect on future results and performance relative to those set forth in or implied by the related forward-looking statements, as well as on our business, financial condition, liquidity, results of operations and prospects, include, but are not limited to (see next page):
Important Notices 4 the severity and duration of the COVID-19 pandemic, actions that have been taken and may be taken in the future by governmental authorities to contain the COVID-19 outbreak, including variants and resurgences thereof, or to mitigate its impact and the adverse impacts that the COVID-19 pandemic has had, and may continue to have, on the global economy and on our business, financial results and performance; the effects of adverse conditions or developments in the financial markets and the economy upon our ability to acquire non-QM loans sourced from Angel Oak’s proprietary mortgage lending platform, Angel Oak Mortgage Lending, and other target assets; the level and volatility of prevailing interest rates and credit spreads; changes in our industry, interest rates, the debt or equity markets, the general economy (or in specific regions) or the residential real estate finance and the real estate markets specifically; changes in our business strategies or target assets; general volatility of the markets in which we invest; changes in the availability of attractive loan and other investment opportunities, including non-QM loans sourced from Angel Oak Mortgage Lending platforms; the ability of our Manager to locate suitable investments for us, manage our portfolio, and implement our strategy; our ability to obtain and maintain financing arrangements on favorable terms, or at all; the adequacy of collateral securing our investments and a decline in the fair value of our investments; the timing of cash flows, if any, from our investments; our ability to profitably execute securitization transactions; the operating performance, liquidity, and financial condition of borrowers; increased rates of default and/or decreased recovery rates on our investments; changes in prepayment rates on our investments; the departure of any of the members of senior management of the Company, our Manager, or Angel Oak; the availability of qualified personnel; conflicts with Angel Oak, including our Manager, and its personnel, including our officers, and entities managed by Angel Oak; events, contemplated or otherwise, such as acts of God, including hurricanes, earthquakes, and other natural disasters, pandemics, acts of war and/or terrorism and others that may cause unanticipated and uninsured performance declines and/or losses to us or the owners and operators of the real estate securing our investments; impact of and changes in governmental regulations, tax laws and rates, accounting principles and policies and similar matters; the level of governmental involvement in the U.S. mortgage market; future changes with respect to government-sponsored enterprises (i.e., Fannie Mae or Freddie Mac) and related events, including the lack of certainty as to the future roles of these entities and the U.S. Government in the mortgage market and changes to legislation and regulations affecting these entities; effects of hedging instruments on our target assets and our returns, and the degree to which our hedging strategies may or may not protect us from interest rate volatility; our ability to make distributions to our stockholders in the future at the level contemplated by our stockholders or the market generally, or at all; our ability to qualify and maintain our qualification as a real estate investment trust for U.S. federal income tax purposes; and our ability to maintain our exclusion from regulation as an investment company under the Investment Company Act of 1940, as amended. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our management’s views only as of the date of this presentation. Actual results and performance may differ materially from those set forth in or implied by our forward-looking statements. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by applicable law, we assume no obligation, and do not intend to, update or otherwise revise any of our forward-looking statements, whether as a result of new information, future events or otherwise.
Differentiated Investment Strategy with True Scarcity Value 5 Angel Oak Mortgage, Inc. (“AOMR”) invests in high-quality non-QM assets created on a proprietary basis within the Angel Oak ecosystem Best in Class Credit Manager with Integrated Sourcing and Securitization Functions $1.0 billion loan portfolio1 $881 million of loan purchases in Q3 through November 8, 2021 Proprietary Pipeline of Non-QM Loans Tailored to Meet Desired Asset Profile Consistent access to specialty asset type through Angel Oak platform #1 non-bank non-QM originator2 Non-QM Provides an Attractive Long- Term Opportunity $150+ billion annual market opportunity3 Attractive risk-adjusted return profile Established Securitization Process Provides Low Cost of Funding $10.6 billion of cumulative securitizations on AOMT shelf Consistent issuer with strong institutional investor following 1. As of September 30, 2021 3. Expanded credit originations as reported by Inside Mortgage Finance from January 1, 2017 to December 31, 2020. 3. Source: Inside Mortgage Finance. Total residential mortgage originations volume from 2009 to 2020 has ranged from $1.3 trillion to $4.0 trillion, with an average of $2.0 trillion. Market opportunity estimated at 10% of the $1.5 trillion market. 10% represents Private Capital’s approximate historical share of total mortgage originations.
AOMR Overview AOMR leverages Angel Oak’s broader infrastructure to acquire and invest in high quality non-QM assets 6 Since inception, AOMR has: • Purchased $2.3 billion2 of non-QM and commercial real estate (“CRE”) loans • Retained $150 million2 of RMBS from 4 securitizations to which loans were contributed Key Financial Metrics: Stockholders’ equity: $501 million2 Target investment portfolio: $1.7 billion2 Financing line limits: $1.25 billion2 High-quality loans underlying our Proprietary AOMT RMBS and Securitized Loan portfolio2: • W.A. FICO: 717 • W.A. LTV: 75% Angel Oak Mortgage, Inc. (NYSE: AOMR) Manages1 AOMR and provides deep investment, financial, and operational resources 1. An affiliate of Angel Oak Capital, Falcons I, LLC, is AOMR's external manager. 2. As of September 30, 2021. • Sources target assets to meet AOMR’s investment strategy with consistency and scale • Over $500 million of loan purchases in Q3 2021
Third Quarter 2021 Key Metrics • GAAP Net Income of $6.3 million, or $0.25 per share • Distributable Earnings of $4.9 million • Book value of $19.72 per share as of September 30, 2021, up from $19.48 as of June 30, 2021 • Return on equity of 5.1% for the second quarter and 6.7% for the first nine months of 2021. • $52 million of cash and cash equivalents as of September 30, 2021 • Recourse Debt to equity ratio of 2.1x as of September 30, 2021 • Total liquidity of $749 million, including $699 million of remaining capacity on financing lines as of September 30, 2021 • Purchased $543M of loans in Q3 2021 and an additional $334M to November 8, 2021 • The company completed one securitization in the third quarter, a $317M securitization that placed 96% of the capital structure at a weighed average cost of 1.12%. The WAC of the loans in the securitization was 5.24% • Robust pipeline of loan purchases for Q4 • $1.7 billion portfolio consisting of RMBS, whole loans, and commercial mortgage securities • Weighted average FICO of 738 and weighted average LTV of 70% of Residential Loan Portfolio • Delinquency rates have reverted to historical averages post COVID peaks • Declared dividend of $0.36 per share for the third quarter 2021 • 7.8% annualized dividend yield based on November 5, 2021 closing price 7 3Q 2021 and beyond Investment Activity Portfolio Dividend Earnings Results Balance Sheet
Investments Support Book Value Appreciation 8
Securitization and Funding Strategy 9 Securitization Date Amount WA Cost of Funding WA Credit Score WA LTV WA DTI Senior Tranche Credit Rating AOMR 2021-4 8/25/2021 $316.6M 1.12% 739 73.8% 33.3% AAA (Fitch) AAA (Kroll) Completed one securitization in Q3 2021 totaling $316.6 million Expanded loan financing facilities in Q3 2021 by $450 million to $1.25B Facility Lender Borrowing Capacity Advance Rate Maturity Pricing MTM Terms Nomura $300M 65%-85% Aug. 2022 Base: 3-month LIBOR+ 1.70% - 3.50% FV MTM Banc of California $50M 75%-97% Mar. 2022 Base: 1-month LIBOR+ 2.50% - 3.13% Non-MTM for 12 Months Deutsche Bank $250M 60%-92% Feb. 2022 Base: 1-month LIBOR+ 2.00% - 3.25% FV MTM Goldman Sachs $200M 75%-85% Mar. 2022 Base: 3-month LIBOR+ 2.25% FV MTM Veritex Community Bank $50M 80%-93% Aug. 2023 Base: 1-month LIBOR+ 2.30%-3.13% Non-MTM Barclays $400M 87%-92% Sept. 2022 Base: 1- or 3-month LIBOR+ (asset dependent) 1.70%-3.50% FV MTM Total $1,250M
RMBS Portfolio Overview 10 Asset Allocation Total Target Portfolio: $1.7 bn AOMR has utilized its originator model to quickly build a scaled portfolio of non-QM RMBS and whole loans Total RMBS: $622 mm Bond Type Metrics of Securitized PortfolioCapital Allocation Total Capital allocated to portfolio: $433 mm LTV 75% Credit Score 717 WAC 5.6 90 Day DLQ 4.7%
Whole Loan Portfolio Overview 11 Portfolio Range Portfolio Weighted Average Unpaid principal balance (“UPB”) $29 - $3,535 $415 Interest rate 2.75% - 9.88% 4.74% Maturity date 1/1/2038 - 9/1/2061 6/16/2051 FICO score at loan origination 521 - 823 738 LTV at loan origination 39% - 90% 70% DTI at loan origination 1.60% - 50.48% 32% Percentage of first lien loans N/A 99.94% Percentage of loans 90+ days delinquent (based on UPB) N/A 1.39% (As of September 30, 2021) Other 37% CA 30% FL 20% TX 7% GA 6% Characteristics of Residential Mortgage Loan Portfolio as of September 30, 2021
Proprietary Access to Angel Oak Mortgage Lending In Place Portfolio Demonstrates Execution of Strategy “Best-in-Class” Mortgage Credit Manager Integrated with Sourcing and Securitization Function Leading Management Team with Extensive Experience Target Assets Provide Opportunity for Attractive Risk-Adjusted Returns Investment Highlights Attractive Long-term Market Opportunity 12
Appendix 13
Appendix: Consolidated Income Statement 14
Appendix: Consolidated Balance Sheet 15
Appendix: GAAP Reconciliations 16 1. Distributable earnings is calculated as net income (loss) allocable to common stockholders, excluding (1) unrealized gains, (2) impairment losses, (3) extinguishment of debt, (4) non-cash equity compensation expense, (5) incentive fee, (6) realized gains or losses on swap terminations and (7) certain other non-recurring gains or losses.