Angel Oak Mortgage, Inc. ((AOMR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Angel Oak Mortgage, Inc. recently held its earnings call, showcasing a strong financial performance marked by growth in net interest income, successful securitization activities, and reduced operating expenses. Despite facing challenges such as a decline in economic book value and increased market competition, the company demonstrated robust operational strategy and execution, reflecting effective financial management.
Net Interest Income Growth
The company reported a notable 13% growth in net interest income compared to the third quarter of 2024, and a 2% increase from the second quarter of 2025. This growth underscores the company’s ability to enhance its income streams effectively, contributing to its overall financial health.
Successful Securitization Activities
Angel Oak Mortgage executed the AOMT 2025-10 securitization, a $274 million deal, which facilitated the repayment of $237 million in warehouse financing and released $22 million of cash for redeployment. This strategic move highlights the company’s adeptness in managing its financial resources and optimizing its capital structure.
Operating Expense Reduction
The company achieved a 13% reduction in operating expenses, excluding securitization costs and stock compensation, compared to the third quarter of 2024, and a 5% decrease from the second quarter of 2025. This reduction indicates effective cost management strategies, enhancing profitability.
GAAP Book Value Increase
The GAAP book value per share increased by 2.2% to $10.60 as of September 30, 2025, from $10.37 as of June 30, 2025. This increase reflects the company’s successful efforts in enhancing its portfolio valuation and overall financial position.
Active Credit Management
The portfolio ended the quarter with a total weighted average percentage of loans 90-plus days delinquent at 2.2%, a decrease of 15 basis points from the second quarter of 2025. This improvement demonstrates the company’s effective credit management practices.
Economic Book Value Decline
Despite positive financial metrics, the economic book value per share declined by 1.9% to $12.72 as of September 30, 2025, from $12.97 as of June 30, 2025. This decline points to challenges in maintaining asset valuations amidst market fluctuations.
Competition in the Market
Increased competition in the non-QM space was noted, potentially impacting the company’s ability to source loans as opportunistically as in the past. This competitive pressure underscores the need for strategic adaptability in loan sourcing.
Forward-Looking Guidance
Angel Oak Mortgage REIT’s forward-looking guidance emphasizes disciplined execution and strategic advancements. The company achieved a 13% increase in net interest income and a GAAP book value per share increase of over 2% from the previous quarter. Key initiatives included retiring legacy securitization deals and extending credit facilities at favorable rates. The securitization market’s strength supported portfolio growth and earnings, with a $274 million securitization completed in October. The firm maintained a low delinquency rate and declared a $0.32 per share common dividend, reflecting its commitment to shareholder value.
In summary, Angel Oak Mortgage, Inc.’s earnings call conveyed a positive sentiment with strong financial performance and strategic advancements. Despite challenges such as economic book value decline and market competition, the company’s robust operational strategy and effective financial management were evident. The forward-looking guidance suggests continued focus on capital reallocation and high-yield assets, aiming to sustain growth and shareholder value.