Angel Oak Mortgage REIT NYSE: AOMR reported first-quarter 2026 results that management said reflected continued operating earnings growth, offset by market-driven valuation declines tied to late-quarter volatility in rates and spreads.
Management cites supportive but volatile backdrop
CEO Sreeni Prabhu said the quarter began in a “global environment that was largely supportive,” but noted that uneven economic growth and geopolitical tensions, including renewed conflict in the Middle East, weighed on investor sentiment toward the end of the period. Prabhu added that inflation improved gradually and labor markets cooled modestly, while the Federal Reserve maintained a “measured data-driven approach” to policy decisions.
Against that backdrop, Prabhu said the company’s platform performed well, supported by “credit quality, funding discipline, and repeatable processes.” He also said securitization markets remained open through the quarter, with demand favoring high-quality collateral and experienced issuers even as spreads reflected headlines and rate volatility.
GAAP loss driven by unrealized marks; distributable earnings positive
CFO Brandon Filson said results were “in line with expectations” from an interest income and expense standpoint and extended the earnings growth trend established in 2025, including “another consecutive quarter of net interest income growth.” Filson attributed performance to asset additions and cost control, while noting that spread widening and rate increases associated with global tensions drove book value declines.
Angel Oak Mortgage REIT posted a GAAP net loss of $7.4 million, or ($0.30) per diluted common share. Filson said the loss was driven by unrealized valuation changes on securitized and unsecuritized loan portfolios tied to macro market volatility late in the quarter, which offset operating growth. In the first quarter of 2025, the company reported GAAP net income of $20.5 million, or $0.87 per diluted common share, which Filson said was attributable to unrealized valuation gains as well as operating income.
Distributable earnings were $4.6 million in the quarter. Filson said the difference versus GAAP results was primarily the removal of unrealized fair value movements. The company’s securitized loan portfolio and residential loan portfolio produced $13.1 million of unrealized losses, partially offset by $1.6 million of net unrealized gains in trading securities and hedge portfolios. Distributable earnings were $4.1 million in the first quarter of 2025.
Net interest income rises on portfolio growth
Filson reported interest income of $40.7 million and net interest income of $12.1 million for the quarter, compared with $32.9 million and $10.1 million, respectively, in the first quarter of 2025. He characterized that as 24% growth in interest income and 20% growth in net interest income year over year. Compared with the fourth quarter of 2025, interest income increased 4% and net interest income increased 11%.
Operating expenses totaled $5.2 million. Excluding non-cash stock compensation and securitization costs, operating expenses were $3.4 million. Filson said the increase from a year earlier and from the prior quarter was tied to professional service fees and loan diligence fees “associated with a larger overall balance and consistent purchases of target assets.” He said the company expects to maintain similar operating expense levels and to remain focused on efficiency.
Loan purchases, securitization activity, and portfolio metrics
Loan purchases in the quarter totaled $246.2 million. Filson said purchases reflected conservative credit profiles, moderate loan-to-value ratios, and “current market coupons that we believe remain attractive on a risk-adjusted basis.” The weighted average coupon on purchased loans was 7.3%, with a weighted average CLTV of 67% and a weighted average credit score of 759.
As of quarter-end, the company’s loans and securitization trust portfolio carried a weighted average coupon of 6.1% and a weighted average funding cost of about 4.5%. Filson said the company intends to continue accessing securitization markets through its “disciplined, methodical” strategy and expects to maintain a pace of about four securitizations per year, or roughly one per quarter.
During the quarter, the company completed the AOMT 2026-2 securitization in March. Prabhu said the deal was completed shortly before the onset of renewed conflict in the Middle East, which he described as underscoring the benefits of a repeatable approach. Filson said Angel Oak Mortgage REIT was the sole contributor to the transaction, which had:
- $272 million unpaid principal balance
- 7.1% weighted average coupon
- 757 weighted average non-QM credit score
- 70.7% weighted average CLTV
Filson added that the AAA-rated senior bonds priced at a 113 basis point spread over the Treasury curve.
Book value, liquidity, credit performance, and dividend
At quarter-end, the company reported GAAP book value per share of $10.31 and economic book value per share of $12.28, with Filson noting that economic book value reflects fair value on all non-recourse securitization obligations. Compared with year-end 2025, GAAP book value per share decreased 4% and economic book value decreased 3.3%. Filson said the change reflected operating income offset by the quarterly dividend payment and market-driven valuation decreases. He also said the company estimated book value had increased slightly since quarter-end due to accretive asset purchases and incremental earnings generation.
Filson said the balance sheet remained well-positioned, including $42 million of cash and recourse debt-to-equity of 1.3x. The company ended the quarter with unsecuritized residential whole loans at a fair value of $245.5 million financed with $192.2 million of warehouse debt, as well as $2.2 billion of residential mortgage loans and securitization trust and $238.3 million of RMBS. Filson said the company had about $1.1 billion of undrawn loan financing capacity with four lending partners.
Credit performance remained “solid,” Filson said, with portfolio-wide 90+ day delinquency of about 2.7%, which he said was materially flat versus the first quarter of 2025 but about 50 basis points higher than the fourth quarter of 2025. Three-month prepaid speeds on non-QM RMBS and securitized loan portfolios were 12% at quarter-end, compared with 11.2% in the prior quarter. Filson reiterated that the company models returns using historical prepayment speeds of roughly 20% to 30% and said mortgage rates would need to fall meaningfully to have a significant impact on returns given that much of the portfolio still carries coupons below newly originated coupon rates.
The company declared a $0.32 per share common dividend payable May 29, 2026, to shareholders of record as of May 22, 2026.
In the question-and-answer session, management said it was building its HELOC pipeline and anticipated another HELOC securitization “in the coming months.” Management also said it continued to monitor the potential to call legacy 2021 and 2022 securitizations, with decisions dependent on funding costs, capital structure considerations, and a reduction in rate-market volatility.
Asked about whole loan pricing, management said pricing “decreased quite a bit” in the quarter, with about a one-point decline in first-quarter whole loan pricing reflecting current spreads and Treasury rates. Management also said AAA securitization spreads were “probably” around 135 to 145 basis points, depending on timing and collateral.
About Angel Oak Mortgage REIT NYSE: AOMR
Angel Oak Mortgage REIT, Inc NYSE: AOMR is a real estate investment trust that specializes in a diversified portfolio of residential mortgage assets. The company primarily invests in non-agency residential mortgage-backed securities (RMBS), residential whole loans and credit risk transfer securities issued by government-sponsored enterprises. By focusing on these structured credit instruments, Angel Oak Mortgage REIT seeks to generate attractive risk-adjusted returns through a combination of net interest income and potential capital appreciation.
The firm employs leverage through repurchase financing facilities and actively manages duration and credit exposure to adapt to changing market conditions.
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