Angel Oak Mortgage REIT's Q2 2025: Key Contradictions in Securitization, Non-QM Market, and Dividend Coverage

Securitization timing and market conditions, non-QM loan market dynamics and competition, dividend coverage and NII growth, securitization plans and frequency, competitive dynamics in the non-QM market are the key contradictions discussed in Angel Oak Mortgage REIT's latest 2025Q2 earnings call.



Securitization and Capital Markets Activity:
- Angel Oak Mortgage REIT completed 2 securitizations during the quarter and issued $42.5 million of unsecured debt.
- The capital released and raised by these transactions was deployed into high-quality loans expected to drive incremental earnings, with new issuances anticipated to be accretive within the next quarter.

Loan Portfolio and Yield:
- The weighted average coupon of the residential whole loan portfolio increased to 8.37% by the end of the quarter, an expansion of 82 basis points from the end of the first quarter.
- This increase was driven by purchases of home equity line of credits (HELOCs) with high coupons, averaging nearly 11%, which are expected to be securitized separately.

Dividend and Cash Flow:
- The company declared a $0.32 per share common dividend, payable on August 29, 2025.
- The dividend is supported by stable cash flow and dividend coverage, expected to resume growth trends driven by earnings from assets purchased during and after the quarter.

Credit Performance and Delinquency Rates:
- The total portfolio weighted average percentage of loans 90+ days delinquent decreased to 2.35% by the end of the quarter, a decrease of 44 basis points from the first quarter.
- The improvement was attributed to a reduction in delinquency rates for loans securitized in the past two years, demonstrating the expertise of the company's credit management in reducing defaults and losses.

Securitization Market and Strategy:
- The securitization market remained active and accretive amid uncertain international trade and tariff activity, with traditional and new participants actively engaged.
- The company plans to continue leveraging this market through a disciplined, methodical securitization strategy to maximize expected returns for shareholders.