Angel Oak Mortgage REIT, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm (KPMG LLP, Atlanta, GA, Auditor Firm ID: 185 ) 87 Consolidated Balance Sheets 89 Consolidated Statements of Operations and Comprehensive Income (Loss) 90 Consolidated Statements of Changes in Stockholder s ’ Equity 91 Consolidated Statements of Cash Flows 92 Notes to the Consolidated Financial Statements 94 Note 1. Organization 94 Note 2. Summary of Significant Accounting Policies 94 Note 3. Variable Interest Entities 100 Note 4. Residential Mortgage Loans 102 Note 5. Investment Securities 103 Note 6. Financing 104 Note 7. Due to Broker 107 Note 8 . Derivative Financial Instruments 107 Note 9 . Fair Value Measurements 108 Note 1 0 . Income Taxes 114 Note 1 1 . Related Party Transactions 115 Note 1 2 . Commitments and Contingencies 116 Note 1 3 . Accumulated Other Comprehensive Income /(Loss) 117 Note 1 4 . Other Assets 117 Note 1 5 . Stockholders ’ Equity 118 Note 1 6 . Earnings per Share 118 Note 1 7 . Equity Compensation Plan 119 Note 1 8 . Subsequent Events 119 86 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Angel Oak Mortgage REIT, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Angel Oak Mortgage REIT, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Assessment of the valuation of residential mortgage loans at fair value As discussed in Notes 2, 3, 4, and 9 to the consolidated financial statements, the Company records performing residential mortgage loans and residential mortgage loans in securitization trusts (together, residential mortgage loans) at fair value on its consolidated balance sheet as a result of electing the fair value option at the time of acquisition. As of December 31, 2025, the recorded balance of the Company’s residential mortgage loans was $2.4 billion. The Company estimates the fair value of its residential mortgage loans using price information provided by third-party pricing services. These services determine price information predominately based on trading activity observed in the marketplace, using both market comparable information and discounted cash flow modeling techniques. We identified the assessment of the valuation of residential mortgage loans as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, was involved in evaluating the third-party pricing services’ valuation techniques and models as well as determining certain of the underlying valuation assumptions, including the prepayment rate, default rate, loss severity rate, and discount rate, which are subject to significant measurement uncertainty. The evaluation of these assumptions to 87 determine the fair value of residential mortgage loans required subjective and complex auditor judgment since the assumptions used were sensitive to variation. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of certain internal controls related to the Company’s residential mortgage loan valuation process, including controls related to the evaluation of pricing service information and assumptions used in residential mortgage loan valuations. We evaluated the Company’s process to develop the residential mortgage loans valuation by testing certain sources of data and assumptions that the Company used and considered the relevance and reliability of such data and assumptions. We involved valuation professionals with specialized skills and knowledge who assisted in: ◦ evaluating the design of the Company’s internal controls specific to the assessment of the third-party pricing services’ valuation techniques and models ◦ evaluating that the methodology used by the Company in determining residential mortgage loan fair value is in accordance with U.S. GAAP ◦ assessing the third-party pricing services’ valuation techniques and models through comparison to industry practices ◦ recalculating the fair value of a selection of residential mortgage loans using the Company’s assumptions and comparing the results of our recalculation to the Company’s fair value estimate ◦ developing an independent fair value estimate for a selection of residential mortgage loans at fair value based on independently developed valuation models and assumptions and comparing the results to the Company’s fair value estimate /s/ KPMG, LLP We have served as the Company’s auditor since 2018. Charlotte, North Carolina March 3, 2026 88 Angel Oak Mortgage REIT, Inc. Consolidated Balance Sheets (in thousands, except for share data) As of: December 31, 2025 December 31, 2024 ASSETS Residential mortgage loans - at fair value $ 294,134 $ 183,064 Residential mortgage loans in securitization trusts - at fair value 2,076,776 1,696,995 RMBS - at fair value 280,005 300,243 Cash and cash equivalents 41,619 40,762 Restricted cash 3,666 2,131 Principal and interest receivable 10,354 8,141 TBA securities and interest rate futures contracts - at fair value 240 1,515 Other assets 42,984 36,918 Total assets $ 2,749,778 $ 2,269,769 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Notes payable $ 218,757 $ 129,459 Non-recourse securitization obligations, collateralized by residential mortgage loans in securitization trusts (see Note 3) 1,915,321 1,593,612 Securities sold under agreements to repurchase 54,041 50,555 Senior unsecured notes 89,023 47,740 TBA securities and interest rate futures contracts - at fair value 32 — Due to broker 198,191 201,994 Accrued expenses 2,021 2,291 Accrued expenses payable to affiliate 783 766 Interest payable 3,423 934 Income taxes payable — 2,785 Management fee payable to affiliate 663 666 Total liabilities $ 2,482,255 $ 2,030,802 Commitments and contingencies STOCKHOLDERS’ EQUITY Common stock, $ 0.01 par value. As of December 31, 2025: 350,000,000 shares authorized, 24,914,647 shares issued and outstanding. As of December 31, 2024: 350,000,000 shares authorized, 23,500,175 shares issued and outstanding. 249 234 Additional paid-in capital 474,577 461,057 Accumulated other comprehensive income (loss) ( 1,314 ) ( 3,475 ) Retained earnings (deficit) ( 205,989 ) ( 218,849 ) Total stockholders’ equity $ 267,523 $ 238,967 Total liabilities and stockholders’ equity $ 2,749,778 $ 2,269,769 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. 89 Angel Oak Mortgage REIT, Inc. Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except for share and per share data) For the Years Ended December 31, 2025 December 31, 2024 INTEREST INCOME, NET Interest income $ 143,655 $ 110,427 Interest expense 102,555 73,502 NET INTEREST INCOME 41,100 36,925 REALIZED AND UNREALIZED GAINS (LOSSES), NET Net realized gain (loss) on mortgage loans, derivative contracts, RMBS, and CMBS ( 10,863 ) ( 9,228 ) Net unrealized gain (loss) on trading securities, mortgage loans, portion of debt at fair value option, and derivative contracts 30,758 23,761 TOTAL REALIZED AND UNREALIZED GAINS (LOSSES), NET 19,895 14,533 EXPENSES Operating expenses 5,004 6,786 Operating expenses incurred with affiliate 1,901 1,845 Stock compensation 1,354 2,041 Securitization costs 3,569 3,799 Management fee incurred with affiliate 4,612 4,976 Total operating expenses 16,440 19,447 INCOME (LOSS) BEFORE INCOME TAXES 44,555 32,011 Income tax expense (benefit) 531 3,261 NET INCOME (LOSS) ALLOCABLE TO COMMON STOCKHOLDERS $ 44,024 $ 28,750 Other comprehensive income (loss) 2,161 1,500 TOTAL COMPREHENSIVE INCOME (LOSS) $ 46,185 $ 30,250 Basic earnings (loss) per common share $ 1.85 $ 1.18 Diluted earnings (loss) per common share $ 1.80 $ 1.17 Weighted average number of common shares outstanding: Basic 23,682,302 24,179,039 Diluted 24,314,625 24,396,851 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. 90 Angel Oak Mortgage REIT, Inc. Consolidated Statements of Changes in Stockholders’ Equity (in thousands) Common Stock at Par Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Deficit) Total Equity Stockholders’ equity as of December 31, 2023 $ 249 $ 477,068 $ ( 4,975 ) $ ( 216,236 ) $ 256,106 Issuance of common stock, net of issuance costs 2 1,881 — — $ 1,883 Repurchase of shares of common stock ( 17 ) ( 19,933 ) — — $ ( 19,950 ) Dividends paid on common stock (1) — — — ( 31,037 ) $ ( 31,037 ) Dividends accrued on unvested performance shares — — — ( 326 ) $ ( 326 ) Stock compensation — 2,041 — — $ 2,041 Unrealized gain (loss) on RMBS and CMBS — — 1,500 — $ 1,500 Net income (loss) — — — 28,750 28,750 Stockholders’ equity as of December 31, 2024 $ 234 $ 461,057 $ ( 3,475 ) $ ( 218,849 ) $ 238,967 Issuance of common stock, net of issuance costs 15 12,166 — — 12,181 Dividends paid on common stock (2) — — — ( 30,937 ) ( 30,937 ) Dividends accrued on unvested performance shares — — — ( 227 ) ( 227 ) Stock compensation — 1,354 — — 1,354 Unrealized gain (loss) on RMBS and CMBS — — 2,161 — 2,161 Net income (loss) — — — 44,024 44,024 Stockholders’ equity as of December 31, 2025 $ 249 $ 474,577 $ ( 1,314 ) $ ( 205,989 ) $ 267,523 (1) Dividends paid on common stock for the year ended December 31, 2024 at $ 0.32 per share of common stock on February 29, 2024, May 31, 2024, August 30, 2024, and November 27, 2024. (2) Dividends paid on common stock for the year ended December 31, 2025 at $ 0.32 per share of common stock on February 28, 2025, May 30, 2025, August 29, 2025, and November 26, 2025. The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. 91 Angel Oak Mortgage REIT, Inc. Consolidated Statements of Cash Flows (in thousands) For the Years Ended December 31, 2025 December 31, 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 44,024 $ 28,750 Adjustments to reconcile net income (loss) to net cash provided or (used in) operating activities: Net realized (gain) loss on mortgage loans, derivative contracts, RMBS, and CMBS 10,863 9,228 Net unrealized (gain) loss on trading securities, mortgage loans, portion of debt at fair value option, and derivative contracts ( 30,758 ) ( 23,761 ) Amortization of debt issuance costs 788 462 Net amortization of premiums and discounts on mortgage loans 3,739 2,797 Accretion of non-recourse securitized obligation discount 4,327 4,544 Amortization of RMBS premium/discount 267 291 Accretion of discount on U.S. Treasury securities ( 61 ) ( 565 ) Stock compensation 1,354 2,041 Purchases of residential mortgage loans from affiliates ( 164,888 ) ( 255,368 ) Purchases of residential mortgage loans from non-affiliates ( 700,653 ) ( 431,707 ) Sale of residential mortgage loans 6,392 5,981 Sale of residential mortgage loans into affiliate's securitization trust 145,427 235,903 Principal payments on residential mortgage loans 38,684 18,009 Principal payments on residential mortgage loans in securitization trusts 249,497 170,468 Net change in: TBA securities and interest rate futures contracts ( 4,985 ) 11,221 Principal and interest receivable on residential mortgage loans ( 2,213 ) ( 640 ) Other assets ( 8,160 ) ( 1,051 ) Management fee payable to affiliate ( 3 ) ( 727 ) Accrued expenses ( 540 ) 980 Accrued expenses payable to affiliate 17 18 Income tax payable ( 2,561 ) 1,544 Interest payable 2,489 114 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES ( 406,954 ) ( 221,468 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments in RMBS, available for sale ( 11,261 ) ( 19,015 ) Purchases of investments in whole pool agency RMBS, trading ( 912,283 ) ( 1,130,561 ) Sale of investments in RMBS, available for sale 27,726 — Sale of investments in whole pool agency RMBS, trading 913,060 1,121,001 Purchase of investments in U.S. Treasury securities ( 74,939 ) ( 349,595 ) Investments in majority-owned affiliates ( 4,100 ) ( 4,051 ) Principal payments on RMBS and CMBS securities 448 2,736 Maturities of U.S. Treasury securities 75,000 500,000 Principal payments on commercial mortgage loans 12 33 NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 13,663 120,548 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. 92 Angel Oak Mortgage REIT, Inc. Consolidated Statements of Cash Flows (in thousands) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuances of common stock, net of issuance costs 12,181 1,883 Dividends paid to common stockholders ( 30,937 ) ( 31,037 ) Principal payments on non-recourse securitization obligation ( 249,373 ) ( 170,468 ) Cash paid for debt issuance costs ( 666 ) ( 1,045 ) Proceeds from securitizations 530,533 575,761 Net proceeds from (repurchases of) securities sold under agreements to repurchase 3,486 ( 143,101 ) Net proceeds from (payments on) notes payable 89,298 ( 161,151 ) Net proceeds from issuance of senior notes 41,161 48,425 Repurchase of common stock — ( 19,950 ) NET CASH PROVIDED BY FINANCING ACTIVITIES 395,683 99,317 CHANGE IN CASH AND RESTRICTED CASH 2,392 ( 1,603 ) CASH AND RESTRICTED CASH, beginning of period 42,893 44,496 CASH AND RESTRICTED CASH, end of period $ 45,285 $ 42,893 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for interest $ 94,895 $ 66,310 Cash paid during the period for income tax expense $ 3,275 $ 1,717 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. 93 Angel Oak Mortgage REIT, Inc. Notes to the Consolidated Financial Statements 1. Organization Angel Oak Mortgage REIT, Inc. (together with its subsidiaries the “Company,” “we,” “our” or “us”) is a real estate finance company focused on acquiring and investing in first and second lien non-qualified residential mortgage (“non-QM”) loans and other mortgage‑related assets in the U.S. mortgage market. The Company’s strategy is to make credit-sensitive investments primarily in newly-originated non-QM loans and other mortgage assets that are primarily made to higher-quality borrowers and sourced from the proprietary mortgage lending platform of its affiliate, Angel Oak Mortgage Solutions LLC (together with other non-operational affiliated originators “Angel Oak Mortgage Lending”) and other originators through our relationship with Angel Oak Capital Advisors, LLC (“Angel Oak Capital”). The Company may also invest in other residential mortgage loans, residential mortgage‑backed securities (“RMBS”), and other mortgage‑related assets. 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 a Maryland corporation incorporated on March 20, 2018. The Company achieves certain of its investment objectives by investing a portion of its assets in its wholly‑owned taxable REIT subsidiary, Angel Oak Mortgage REIT TRS, LLC, a Delaware limited liability company formed on March 21, 2018, which invests its assets in Angel Oak Mortgage Fund TRS, a Delaware statutory trust formed on June 15, 2018. The Company’s common stock is traded on the New York Stock Exchange under the ticker symbol AOMR. The Operating Partnership On February 5, 2020, the Company formed Angel Oak Mortgage Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), through which substantially all of its assets are held and substantially all of its operations are conducted, either directly or through subsidiaries. The Company holds all of the limited partnership interests in the Operating Partnership and indirectly holds the sole general partnership interest in the Operating Partnership through the general partner, which is the Company’s wholly-owned subsidiary. The Company’s Manager and REIT status The Company is externally managed and advised by Falcons I, LLC (the “Manager”), a registered investment adviser with the Securities and Exchange Commission and an affiliate of Angel Oak Capital. The Company has elected to be taxed as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2019. 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its wholly‑owned subsidiaries. All significant inter‑company balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements requires the Company to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities, amounts and timing of credit losses, prepayment rates, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reported periods. It is likely that changes in these estimates (e.g., valuation changes due to supply and demand, credit performance, prepayments, interest rates, or other reasons) will occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ from the Company’s estimates and the differences could be material. Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”). There were no recent ASUs that are expected to have a significant impact on the Company's consolidated financial statements when adopted or had a significant impact on the Company's consolidated financial statements upon adoption. Variable Interest Entities A variable interest entity (“VIE”) is defined as an entity in which equity investors (i) do not have the characteristics of a controlling financial interest, and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated by its primary beneficiary, which is defined as the party that has both (i) the power to control the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb 94 Angel Oak Mortgage REIT, Inc. Notes to the Consolidated Financial Statements losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. For VIEs that do not have substantial on-going activities, the power to direct the activities that most significantly impact the VIE’s economic performance may be determined by an entity’s involvement with the design and structure of the VIE. The Company’s securitization trusts are structured as VIEs that receive principal and interest on the underlying collateral and distribute those payments to the security holders. The assets held by the securitization entities are restricted in that they can only be used to fulfill the obligations of the securitization entity. The Company’s risks associated with its involvement with these VIEs are limited to its risks and rights as a holder of the security it has retained as well as certain associated risks which may occur when the Company acts as either the sponsor and/or depositor of and the seller, directly or indirectly to, the securitization entities. Determining the primary beneficiary of a VIE requires judgment. The Company determined that for the securitizations it consolidates, its ownership provides the Company with the obligation to absorb losses or the right to receive benefits from the VIE that could be significant to the VIE. In addition, the Company has the power to direct the activities that most significantly impact the VIE’s economic performance. As of December 31, 2025 and December 31, 2024, the Company was considered to be a primary beneficiary in certain VIEs which held certain interests in the assets held by consolidated securitization vehicles which were created under the purview of its wholly-owned securitization shelf, Angel Oak Mortgage Trust (“AOMT”) II, LLC. These securitization vehicles are consolidated on the Company’s consolidated balance sheet, and are restricted by the structural provisions of the associated securitization trusts. The recovery of the Company’s investment in the securitization vehicles, if any, will be limited by each securitization vehicle’s distribution provisions. The liabilities of the securitization vehicles, which are also consolidated on the Company’s consolidated balance sheets as of December 31, 2025 and December 31, 2024, are non-recourse to the Company, and can only be satisfied using proceeds from each securitization vehicle’s respective asset pool. The assets of securitization entities are comprised of RMBS or residential mortgage loans. See Note 3 - Variable Interest Entities for further discussion of the characteristics of the securities and loans in the Company’s portfolio relating to asset pools arising from securitization transactions. The Company performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE would cause the Company’s consolidation conclusion to change. Segment Reporting Operating segments are defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. The Company’s CODM is its Chief Executive Officer, Mr. Sreeniwas Prabhu. The Company has determined it currently operates in a single operating segment and has one reportable segment, which is to acquire, invest in, and finance mortgage‑related assets. The CODM reviews net income, net interest income (interest income less interest expense) earned on its portfolio of residential mortgage loans, residential mortgage loans in securitization trusts, RMBS, and other assets as presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Net interest income as used by the CODM in this context is consistent with that presented within the Company’s consolidated financial statements. Segment assets are reflected on the accompanying Balance Sheet as “total assets” and significant segment expenses are listed on the accompanying statement of operations. Cash and Cash Equivalents Cash represents cash deposits held at financial institutions. Cash equivalents include short‑term highly liquid investments of sufficient credit quality that are readily convertible to known amounts of cash and have maturities of three months or less at acquisition. The Company maintains its cash and cash equivalents with major financial institutions. Accounts at these institutions are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 for each bank. The Company is exposed to credit risk for amounts held in excess of the FDIC limit. The Company does not anticipate nonperformance by these financial institutions. Restricted Cash Restricted cash represents cash held at financial institutions for margin on whole loans required by certain counterparties, margin on futures trading activity, and short-term cash collateral for repurchase agreements. A reconciliation of the amounts of cash and cash equivalents and restricted cash in the consolidated balance sheets to the amount in the consolidated statements of cash flows is as follows: 95 Angel Oak Mortgage REIT, Inc. Notes to the Consolidated Financial Statements December 31, 2025 December 31, 2024 Cash and cash equivalents $ 41,619 $ 40,762 Restricted cash 3,666 2,131 Cash, cash equivalents and restricted cash as show in the statement of cash flows $ 45,285 $ 42,893 Fair Value Measurements The Company reports various investments at fair value in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurement . A fair value measurement represents the price at which an orderly transaction would occur between willing market participants at the measurement date. This definition of fair value focuses on exit price and prioritizes the use of market‑based inputs over entity‑specific inputs when determining fair value. In addition, the framework for measuring fair value establishes a three‑level hierarchy for fair value measurements based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. See Note 9, Fair Value Measurements for further discussion on fair value measurements. The Company accounts for any purchases or sales of Investment Securities on a trade date basis. At the time of disposition, realized gains or losses on sales of Investment Securities are determined based on a specific identification basis and are a component of “net realized gain (loss) on mortgage loans, derivative contracts, RMBS, and CMBS” in the consolidated statements of operations and comprehensive income (loss). RMBS, CMBS, and U.S. Treasury Securities (“Investment Securities”), at Fair Value; and Purchase and Sale of Investment Securities The Company classifies its investments in RMBS, CMBS, and U.S. Treasury Securities as either trading or available-for-sale (“AFS”). Trading Investment Securities are carried at their estimated fair values and coupon interest is recognized as interest income when earned and deemed collectible. Changes in fair value are reported in current earnings in “net unrealized gain (loss) on trading securities, mortgage loans, portion of debt at fair value option, and derivative contracts” in the consolidated statements of operations and comprehensive income (loss). Available-for-sale Investment Securities are carried at their estimated fair value with unrealized gains and losses reported in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss). Residential Mortgage Loans, Residential Mortgage Loans in Securitization Trusts, and Commercial Mortgage Loans, at Fair Value The Company’s investments in residential mortgage loans, including those held in securitization trusts, and commercial loans are recorded using the fair value option in ASC Topic 825 - Financial Instruments , and therefore recorded at fair value in the consolidated balance sheets. Changes in fair value are reported in current earnings in “net unrealized gain (loss) on trading securities, mortgage loans, portion of debt at fair value option, and derivative contracts” in the consolidated statements of operations and comprehensive income (loss). Residential and commercial mortgage loans include loans that the Company may be marketing for sale to third parties, including transfers to securitization entities with either solely contributed loans or with loans contributed to securitization entities along with other Angel Oak entities. When the Company obtains possession of real property in connection with a foreclosure or similar action, the Company de-recognizes the associated mortgage loan. The Company is deemed to have received physical possession of real estate property collateralizing a mortgage loan when it obtains legal title to the property upon completion of a foreclosure or when the borrower conveys all interest in the property to it through a deed in lieu of foreclosure or similar legal agreement. The Company’s cost basis in REO is equal to the lower of cost or fair value of the real estate associated with the foreclosed mortgage loan, less expected costs to sell. The fair value of such REO is typically based on management’s estimates which generally use information including general economic data, broker opinions of value, recent sales, property appraisals, and bids, and takes into account the expected costs to sell the property. REO recorded at fair value on a non-recurring basis are classified as Level 3. Non-recourse securitization obligations, collateralized by residential mortgage loans (a portion of which is at Fair Value) The portion of this obligation for which we have elected the fair value option uses the prices of the underlying bonds securing the related residential mortgage loans in securitization trusts to determine fair value. Changes in fair value are reported in current earnings in “net unrealized gain (loss) on trading securities, mortgage loans, portion of debt at fair value option, and derivative contracts” in the consolidated statements of operations and comprehensive income (loss). The Company also discloses fair value for the portion of this obligation for which we have elected to hold at amortized cost. See Note 9, Fair Value Measurements. 96 Angel Oak Mortgage REIT, Inc. Notes to the Consolidated Financial Statements Derivative Financial Instruments, at Fair Value The Company uses a variety of derivative instruments to economically hedge a portion of its exposure to market risks, including interest rate risk and prepayment risk. Derivatives are accounted for in accordance with ASC 815, Derivatives and Hedging , which requires recognition of all derivatives as either assets or liabilities at fair value on the consolidated balance sheets. These derivative financial instrument contracts are not designated as hedges for U.S. GAAP purposes; therefore, all changes in fair value are recognized in earnings. See Note 8, Derivative Financial Instruments for further information. Revenue Recognition Investment Securities Interest income on investment securities is recognized based on outstanding principal balances and contractual terms. Premiums and discounts are generally amortized into interest income over the life of such securities using the effective yield method. Adjustments to premium amortization are made for actual prepayments and impact net realized gains (losses). Residential and Commercial Mortgage Loans Interest income on residential mortgage loans and commercial mortgage loans is recognized using the effective interest method over the life of the loans. The amortization of any premiums and discounts is included in interest income. Interest income recognition is suspended when residential mortgage loans or commercial mortgage loans are placed on non-accrual status. Generally, residential mortgage loans and commercial mortgage loans are placed on non-accrual status when delinquent for more than ninety (90) days or when determined not to be probable of full collection. Interest accrued, but not collected, at the date residential mortgage loans or commercial mortgage loans are placed on non-accrual status is reversed against interest income and subsequently recognized only to the extent it is received in cash or until it qualifies for return to accrual status. Interest received after the loan becomes past due or impaired is used to reduce the outstanding loan principal balance. Repurchase Agreements At times, the Company finances purchases of residential and commercial mortgage loans and Investment Securities through the use of repurchase agreements. The repurchase agreements are treated as collateralized financing transactions, which expire within approximately one year or less and are carried at their contractual amounts, including accrued interest as specified in the respective agreements. Interest paid and accrued in accordance with repurchase agreements is recorded as interest expense. Earnings Per Share The Company computes earnings per share (“EPS”) using the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared and participation rights in undistributed earnings. Basic net income (loss) per share is computed by dividing net income (loss) allocable to common stockholders by the weighted‑average number of shares of common stock outstanding during the period. Diluted EPS is calculated by dividing net income (loss) allocable to common stockholders by the weighted average number of shares of common stock outstanding plus the additional dilutive effect of common stock equivalents and dividends related to unvested share-based awards, during each period, unless anti-dilutive. Share-Based Compensation The Company amortizes the fair value of previously granted share-based awards to expense over the vesting period using the straight line method. The initial cost of share-based awards is established at the Company’s closing share price on the grant date of the award, and, in the case of performance-based restricted stock unit awards (“PSUs”), factoring in the probability of achieving the underlying market-based vesting conditions. The Company recognizes adjustments for forfeitures as they occur. The Company has made annual grants of PSUs, which vest 50 % after a three-year period and vest 50 % after a four-year period, subject to both continued service and the achievement of certain performance criteria during a three-year performance period. Features of the performance criteria constitute a “market condition,” which may impact the amount of compensation expense recognized for these awards. 97 Angel Oak Mortgage REIT, Inc. Notes to the Consolidated Financial Statements Income Taxes The Company has elected to be taxed as a REIT under the Code starting with its taxable year ended December 31, 2019. Accordingly, the Company will generally not be subject to corporate U.S. federal income tax to the extent that the Company makes qualifying distributions to stockholders, and provided that the Company satisfies, on a continuing basis, through actual investment and operating results, the REIT requirements, including certain asset, income, distribution, and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal, state, and any applicable local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which the Company lost its REIT qualification. Accordingly, the failure to qualify as a REIT could have a material adverse impact on the Company’s results of operations and amounts available for distribution to stockholders. The dividends paid deduction for qualifying dividends paid to stockholders is computed using the Company’s taxable income as opposed to net income reported in the consolidated statements of operations and comprehensive income (loss). Taxable income will generally differ from net income reported in the consolidated statements of operations and comprehensive income (loss) because the determination of taxable income is based on tax regulations and not U.S. GAAP. The Company has created and elected to treat AOMR TRS as a taxable REIT subsidiary (“TRS”). In general, a TRS may hold assets and engage in activities that the Company cannot hold or engage in directly and generally may engage in any real estate or non‑real estate‑related business. A domestic TRS is subject to U.S. federal, state, and local corporate income taxes, and the value of the securities of the TRS together with the value of the securities of any other TRS owned by the Company may not exceed 25% (20% for periods prior to 2026) of the value of the Company’s total assets. If the TRS generates net income, it may declare dividends to the Company, which will be included in the Company’s taxable income and may necessitate a distribution to its stockholders to satisfy distribution requirements and to avoid U.S. federal income and excise tax. Conversely, if the Company retains earnings at the TRS level, no distribution is required. Effective for tax years beginning after December 31, 2022, the Inflation Reduction Act, which was signed into law on August 16, 2022, imposes a 15% alternative minimum tax (“AMT”) on the adjusted financial statement income (“AFSI”) of “Applicable Corporations”. The term “Applicable Corporations” does not include REITs but does include TRSs whose three-year average AFSI exceeds $1 billion. Current and deferred taxes are recorded on earnings (losses) recognized by AOMR TRS. Deferred income tax assets and liabilities are calculated based upon temporary differences between the Company’s U.S. GAAP consolidated financial statements and the U.S. federal and state tax basis of assets and liabilities as of the consolidated balance sheet date. If any deferred tax assets exist, the Company evaluates the realizability of such, and subsequently may recognize a valuation allowance if, based on available evidence, it is more likely than not that some or all of its deferred tax assets will not be realized. In evaluating the realizability of a deferred tax asset, the Company will consider expected future taxable income, existing and projected book to tax differences, and any tax planning strategies. Such an analysis is inherently subjective, as it is based on forecast earnings and business and economic activity. See Note 10 — Income Taxes , for further details regarding the Company’s deferred tax assets. As a REIT, if the Company fails to distribute in any calendar year (subject to specific timing rules for certain dividends paid in January) at least the sum of (i) 85% of its ordinary income for such year, (ii) 95% of its capital gain net income for such year, and (iii) any undistributed taxable income from the prior year, the Company would be subject to a nondeductible 4% excise tax on the excess of such required distribution over the sum of (i) the amounts actually distributed and (ii) the amounts of income retained and on which the Company has paid U.S. federal corporate income tax. Risks and Uncertainties Credit Risk The Company assumes credit risk through its investments in mortgage loans and other mortgage‑related assets. Credit losses on mortgage loans can occur for many reasons, including: fraud; poor underwriting; poor servicing practices; weak economic conditions; increases in payments required to be made by borrowers; declines in the value of real estate; declining rents on single‑ and multi‑family residential rental properties; natural disasters, including the effects of climate change (including flooding, drought, wildfires, and severe weather), and other natural events; uninsured property loss; over‑leveraging of the borrower; costs of remediation of environmental conditions, such as indoor mold; changes in zoning or building codes and the related costs of compliance; acts of war or terrorism; changes in legal protections for lenders and other changes in law or regulation; and personal events affecting borrowers, such as reduction in income, job loss, divorce, or health problems. In addition, the amount and timing of credit losses could be affected by loan modifications, delays in the liquidation process, documentation errors, and other action by servicers. Weakness in the U.S. economy or the housing market could cause the Company’s credit losses to increase. In addition, rising interest rates may increase the credit risk associated with certain residential mortgage loans. For example, the interest rate is adjustable for many of the loans held by the Company or within the securitization entities in which the Company participates. In addition, a portion of the loans the Company has pledged to secure loan financing lines have adjustable interest rates. Accordingly, when short‑term interest rates rise, required monthly payments from homeowners will rise under the terms of these adjustable‑rate mortgages, and this may increase borrowers’ delinquencies and defaults. 98 Angel Oak Mortgage REIT, Inc. Notes to the Consolidated Financial Statements Credit losses on commercial mortgage loans can occur for many of the reasons noted above for residential mortgage loans. Moreover, these types of real estate loans may not be fully amortizing and, therefore, the borrower’s ability to repay the principal when due may depend upon the ability of the borrower to refinance or sell the property at maturity. Business purpose real estate loans are particularly sensitive to conditions in the rental housing market and to demand for rental residential properties. Within a securitization of residential, multi‑family, or business purpose real estate loans, various securities are created, each of which has varying degrees of credit risk. The Company may own the securities in which there is more (or the most) concentrated credit risk associated with the underlying real estate loans. In general, losses on an asset securing a loan or loan included as collateral to a securitization will be borne first by the owner of the property (i.e., the owner will first lose any equity invested in the property) and, thereafter, by the first loss security holder, and then by holders of more senior securities. In the event the losses incurred upon default on the loan exceed any classes in which the Company invests, the Company may not be able to recover all of its investment in the securities it holds. In addition, if the underlying properties have been overvalued by the originating appraiser or if the values subsequently decline and, as a result, less collateral is available to satisfy interest and principal payments due on the related security, then the first‑loss securities may suffer a total loss of principal, followed by losses on the second‑loss and then third‑loss securities (or other residential and commercial securities that the Company owns). In addition, with respect to residential securities the Company owns, the Company may be subject to risks associated with the determination by a loan servicer to discontinue servicing advances (advances of mortgage interest payments not made by a delinquent borrower) if they deem continued advances to be unrecoverable, which could reduce the value of these securities or impair the Company’s ability to project and realize future cash flows from these securities. Investments in subordinated RMBS and CMBS involve greater credit risk than the senior classes of the issue or series. Many of the default‑related risks of whole loan mortgages will be magnified in subordinated securities. Default risks may be further pronounced in the case of RMBS and CMBS by, or evidencing an interest in, a relatively small or less diverse pool of underlying mortgage loans. Certain subordinated securities absorb all losses from default before any other class of securities is at risk, particularly if such securities have been issued with little or no credit enhancement or equity. In addition, principal payments on subordinated securities may be subject to a “lock-out” period in which some or all of the principal payments are directed to the related senior securities. This lock‑out period may be for a set period of time and/or may be determined based on pool performance criteria such as losses and delinquencies. Such securities therefore possess some of the attributes typically associated with equity investments. Interest Rate Risk Interest rate risk is highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond the Company’s control. A significant portion of the Company’s financial assets and liabilities, including the Company’s whole loan investments (which include residential mortgage loans, residential mortgage loans held in securitization trusts, and commercial loans), investment securities, loan financing facilities, and security repurchase facilities, are interest earning or interest bearing and, as a result, the Company is subject to risks arising from fluctuations in the prevailing levels of market interest rates. In addition, all of the Company’s warehouse loan financing arrangements (notes payable) have a variable rate component or include rates which reset monthly and add additional risk due to fluctuations in market interest rates. Any excess cash and cash equivalents of the Company are invested in instruments earning short‑term market interest rates. Subject to maintaining its qualification as a REIT and maintaining its exclusion from regulation as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), the Company may utilize various derivative instruments and other hedging instruments to mitigate interest rate risk. Liquidity Risk An insufficient secondary market may prevent the liquidation of an asset or limit the funds that can be generated from selling an asset. A portion of the Company’s financial assets are considered to be illiquid and may be subject to high liquidity risk. Furthermore, the Company’s use of financial leverage exposes the Company to increased liquidity risks from margin calls and potential breaches of the financial covenants under its borrowing facilities, which could result in the Company being required to immediately repay all outstanding amounts borrowed under these facilities and these facilities being unavailable to use for future financing needs, as well as triggering cross-defaults under other debt agreements. Prepayment Risk The frequency at which prepayments occur on loans held and loans underlying RMBS and CMBS will be affected by a variety of factors including the prevailing level of interest rates as well as economic, demographic, tax, social, legal, and other factors. Generally, mortgage obligors tend to prepay their mortgages when prevailing mortgage rates fall below the interest rates on their mortgage loans. Generally, whole loans, RMBS, and CMBS purchased at a premium are adversely affected by faster than anticipated prepayments; and whole loans, RMBS, and CMBS purchased at a discount are adversely affected by slower than anticipated prepayments. The adverse effects of prepayments may impact the Company in two ways. First, particular investments may experience outright losses, as in the case of an interest‑only security in an environment of faster actual or anticipated prepayments. Second, particular investments may underperform 99 Angel Oak Mortgage REIT, Inc. Notes to the Consolidated Financial Statements relative to the financial instruments that the Company’s Manager may have constructed to reduce specific financial risks for these investments, resulting in a loss to the Company. In particular, prepayments (at par) may limit the potential upside of many whole loans, RMBS, and CMBS to their principal or par amounts, whereas their corresponding hedges, if any, often have the potential for unlimited loss. Extension Risk The Company’s Manager computes the projected weighted average life of the Company’s investments based on assumptions regarding the rate at which the borrowers will prepay the underlying mortgage loans. In general, when fixed rate, adjustable rate, or hybrid mortgage loans or other mortgage‑related assets are acquired via borrowings, the Company may, but is not required to, enter into an interest rate swap agreement or other economic hedging instrument that attempts to fix the Company’s borrowing costs for a period close to the anticipated average life of the fixed rate portion of the related assets, in each case subject to maintaining the Company’s qualification as a REIT and maintaining the Company’s exclusion from regulation as an investment company under the Investment Company Act. This strategy is designed to protect the Company from rising interest rates, as the borrowing costs are managed to maintain a net interest spread for the duration of the fixed rate portion of the related assets. However, if prepayment rates decrease in a rising interest rate environment, the life of the fixed rate portion of the related assets could extend beyond the term of the swap agreement or other hedging instrument. This could have an adverse impact on the Company’s earnings, as borrowing costs would no longer be fixed after the end of the hedging instrument, while the income earned on the fixed rate, adjustable rate, or hybrid assets would remain fixed. In extreme situations, the Company may be forced to sell assets to maintain adequate liquidity, which could cause the Company to incur losses. 3. Variable Interest Entities Since its inception, the Company has utilized VIEs for the purpose of securitizing whole mortgage loans to obtain long-term non-recourse financing. The Company evaluates its interest in each VIE to determine if it is the primary beneficiary. VIEs for Which the Company is the Primary Beneficiary The Company entered into securitization transactions that resulted in the Company consolidating the VIEs used to facilitate these transactions. See Note 2 Summary of Significant Accounting Policies - Variable Interest Entities for a discussion of the accounting policies applied to the consolidation of VIEs and transfers of financial assets in connection with financing transactions. 100 Angel Oak Mortgage REIT, Inc. Notes to the Consolidated Financial Statements The retained beneficial interest in VIEs for which the Company is the primary beneficiary is the subordinated tranches of the securitization and further interests in additional interest‑only tranches. The following table summarizes the key details of the Company’s loan securitization transactions currently outstanding as of December 31, 2025 and December 31, 2024: As of: December 31, 2025 December 31, 2024 ($ in thousands) Aggregate unpaid principal balance of residential whole loans sold $ 2,090,583 $ 1,781,311 Fair value adjustment for residential mortgage loans in securitization trusts ( 13,807 ) ( 84,316 ) Residential mortgage loans in securitization trusts, at fair value $ 2,076,776 $ 1,696,995 Outstanding amount of non-recourse securitization obligation, at amortized cost $ 1,915,389 $ 1,630,083 Fair value adjustment for the portion of non-recourse securitization obligation, at fair value option ( 68 ) ( 36,471 ) Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts $ 1,915,321 $ 1,593,612 Weighted average fixed rate for non-recourse securitization obligation issued 4.25 % 3.86 % Weighted average contractual maturity of Senior Bonds 45 years 45 years For the period ended: December 31, 2025 December 31, 2024 ($ in thousands) Aggregate unpaid principal balance of residential whole loans sold, at deal date $ 2,885,625 $ 2,326,980 Face amount of Non-recourse securitization obligation issued by the VIE and purchased by third-party investors, at deal date 2,725,486 2,194,774 Face amount of Senior Support Certificates received by the Company, at deal date 160,139 132,206 Cash received, at deal date 320,116 273,266 During the years ended December 31, 2025 and December 31, 2024, the Company and its affiliates issued and sold bonds with a face value of $ 530.7 million and $ 575.0 million to third-party investors for proceeds of $ 533.0 million and $ 578.0 million, respectively, before offering costs and accrued interest. The sold bonds issued during the years ended December 31, 2025 and December 31, 2024 are included in “Non-recourse securitization obligations, collateralized by residential mortgage loans in securitization trusts” on the Company’s consolidated balance sheets. As of December 31, 2025 and December 31, 2024, as a result of the transactions described above, securitized loans with outstanding principal balance of approximately $ 2.1 billion and $ 1.8 billion are included in “Residential mortgage loans in securitization trusts” on the Company’s consolidated balance sheets, respectively. As of December 31, 2025 and December 31, 2024, the aggregate carrying value of bonds issued by consolidated VIEs was $ 1.9 billion and $ 1.6 billion, respectively. These bonds issued are disclosed as “Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts” on the Company’s consolidated balance sheets. The holders of the securitized debt have no recourse to the general credit of the Company, but the Company does have the obligation, under certain circumstances, to repurchase assets from the VIE upon the breach of certain representations and warranties with respect to the residential whole loans sold to the VIE. In the absence of such a breach, the Company has no obligation to provide any other explicit or implicit support to any VIE. The Company concluded that the entities created to facilitate the loan securitization transactions are VIEs. The Company completed an analysis of whether each VIE created to facilitate the securitization transactions should be consolidated by the Company, based on consideration of its involvement in each VIE and whether its involvement reflected a controlling financial interest that resulted in the Company being deemed the primary beneficiary of each VIE. In determining whether the Company would be considered the primary beneficiary, the following factors were assessed: • whether the Company has both the power to direct the activities that most significantly impact the economic performance of the VIE; and • whether the Company has a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE. 101 Angel Oak Mortgage REIT, Inc. Notes to the Consolidated Financial Statements Based on its evaluation of the factors discussed above, including its involvement in the purpose and design of the entity, the Company determined that it was required to consolidate each VIE created to facilitate the loan securitization transactions. VIEs for Which the Company is Not the Primary Beneficiary The Company sponsored or participated along with other affiliates and entities managed by Angel Oak Capital in the formation of various entities that were considered to be VIEs. These VIEs were formed to facilitate securitization issuances that were comprised of secured residential whole loans and/or small balance commercial loans contributed to securitization trusts. These securities were issued as a result of the unconsolidated securitizations where the Company retained bonds from the issuances of securitizations issued by a depositor that the Company does not control. The Company determined that it was not then and is not now the primary beneficiary of any of these securitization entities, and thus has not consolidated the operating results or statements of financial position of any of these entities. The Company performs ongoing reassessments of all VIEs in which the Company has participated since its inception as to whether changes in the facts and circumstances regarding the Company’s involvement with a VIE would cause the Company’s consolidation conclusion to change, and the Company’s assessment of these VIEs remains unchanged. The securities received in the securitization transactions for which the Company is not the primary beneficiary are either classified as “available for sale” upon receipt and are included in “RMBS - at fair value”, or are classified as “Other assets” and held at amortized cost on the consolidated balance sheets as of December 31, 2025 and December 31, 2024, and details on the accounting treatment and fair value methodology of the securities can be found in Note 9 — Fair Value Measurements . See also Note 5 — Investment Securities , for the fair value of AOMT securities held by the Company, and Note 14 - Other Assets , for investments that are majority-owned by affiliates (“MOAs”), as of December 31, 2025 and December 31, 2024 that were retained by the Company as a result of these securitization transactions. 4. Residential Mortgage Loans Residential mortgage loans are measured at fair value. The following table sets forth the cost, fair value, weighted average interest rate, and weighted average remaining maturity of the Company’s residential mortgage loan portfolio as of December 31, 2025 and December 31, 2024: As of: December 31, 2025 December 31, 2024 ($ in thousands) Cost $ 291,089 $ 183,149 Unpaid principal balance $ 282,348 $ 178,373 Net premium on mortgage loans purchased 8,742 4,776 Change in fair value 3,044 ( 85 ) Fair value $ 294,134 $ 183,064 Weighted average interest rate 7.38 % 7.39 % Weighted average remaining contractual maturity (years) 29.5 30 The following table sets forth data regarding the number of consumer mortgage loans secured by residential real property 90 or more days past due and also those in formal foreclosure proceedings, and the recorded investment and unpaid principal balance of such loans as of December 31, 2025 and December 31, 2024: As of: December 31, 2025 December 31, 2024 ($ in thousands) Number of mortgage loans 90 or more days past due — — Recorded investment in mortgage loans 90 or more days past due $ — $ — Unpaid principal balance of loans 90 or more days past due $ — $ — Number of mortgage loans in foreclosure 1 — Recorded investment in mortgage loans in foreclosure $ 1,166 $ — Unpaid principal balance of loans in foreclosure $ 1,113 $ — 102 5. Investment Securities As of December 31, 2025, Investment Securities were comprised of non‑agency RMBS and Freddie Mac and Fannie Mae “whole pool agency RMBS” (together, “RMBS”) and CMBS. As of December 31, 2024, Investment Securities were comprised of RMBS, CMBS, and U.S. Treasury Securities. The U.S. Treasury Securities held by the Company as of December 31, 2024 matured on January 9, 2024. The following table sets forth a summary of RMBS at cost as of December 31, 2025 and December 31, 2024: December 31, 2025 December 31, 2024 (in thousands) AOMT RMBS $ 82,705 $ 101,801 Whole Pool Agency RMBS $ 198,191 $ 201,994 The following table sets forth certain information about the Company’s investment in RMBS as of December 31, 2025: December 31, 2025 Real Estate Securities at Fair Value Securities Sold Under Agreements to Repurchase Allocated Capital (in thousands) AOMT RMBS (1) Mezzanine 13,252 ( 6,993 ) 6,259 Subordinate 59,587 ( 12,354 ) 47,233 Interest Only/Excess 9,301 — 9,301 Retained RMBS in VIEs (2) — ( 34,694 ) ( 34,694 ) Total AOMT RMBS $ 82,140 $ ( 54,041 ) $ 28,099 Whole Pool Agency RMBS (3) Fannie Mae $ 56,412 $ — 56,412 Freddie Mac 141,453 — 141,453 Total Whole Pool Agency RMBS $ 197,865 $ — $ 197,865 Total RMBS $ 280,005 $ ( 54,041 ) $ 225,964 (1) AOMT RMBS held as of December 31, 2025 included both retained tranches of AOMT securitizations in which the Company participated and additional AOMT securities purchased in secondary market transactions. (2) A portion of repurchase debt includes borrowings against retained bonds received from on-balance sheet securitizations (i.e., consolidated VIEs). These bonds, with a fair value of $ 198.9 million, are not reflected in the consolidated balance sheets, as the Company reflects the assets of the VIE (residential mortgage loans in securitization trusts - at fair value) on its consolidated balance sheets. (3) The whole pool RMBS presented as of December 31, 2025 were purchased from a broker to whom the Company owes approximately $ 198.2 million, payable upon the settlement date of the trade. See Note 7 - Due to Broker . 103 The following table sets forth certain information about the Company’s investment in RMBS as of December 31, 2024: December 31, 2024 Real Estate Securities at Fair Value Securities Sold Under Agreements to Repurchase Allocated Capital (in thousands) AOMT RMBS (1) Mezzanine $ 12,735 $ ( 5,440 ) $ 7,295 Subordinate 73,548 ( 19,829 ) 53,719 Interest Only/Excess 12,508 — 12,508 Retained RMBS in VIEs (2) — ( 25,286 ) ( 25,286 ) Total AOMT RMBS $ 98,791 $ ( 50,555 ) $ 48,236 Other Non-Agency RMBS Subordinate $ — $ — $ — Interest Only/Excess — — — Total Other Non-Agency RMBS $ — $ — $ — Whole Pool Agency RMBS (3) Fannie Mae $ 161,878 $ — $ 161,878 Freddie Mac 39,574 — 39,574 Whole Pool Total Agency RMBS $ 201,452 $ — $ 201,452 Total RMBS $ 300,243 $ ( 50,555 ) $ 249,688 (1) AOMT RMBS held as of December 31, 2024 included both retained tranches of AOMT securitizations in which the Company participated and additional AOMT securities purchased in secondary market transactions. (2) A portion of repurchase debt includes borrowings against retained bonds received from on-balance sheet securitizations (i.e., consolidated VIEs). These bonds, with a fair value of $ 163.9 million, are not reflected in the consolidated balance sheets, as the Company reflects the assets of the VIE (residential mortgage loans in securitization trusts - at fair value) on its consolidated balance sheets. (3) The whole pool RMBS presented as of December 31, 2024 were purchased from a broker to whom the Company owes approximately $ 202.0 million, payable upon the settlement date of the trade. See Note 7 - Due to Broker . 6. Financing The Company has the ability to finance residential whole loans and lines of credit and commercial whole loans, utilizing lines of credit (notes payable) from various counterparties, as further described below. Outstanding borrowings bear interest at floating rates depending on the lending counterparty, the collateral pledged, and the rate in effect for each interest period, as the same may change from time to time at the end of each interest period. Some loans include upfront fees, exit or withdrawal fees, covenants and concentration limits on types of collateral pledged, many of which vary based on the counterparty. Occasionally, a lender may require certain margin collateral to be posted on a warehouse line of credit. There was no margin collateral required as of December 31, 2025 or December 31, 2024. The following table sets forth the details of the Company’s financing as of December 31, 2025 and December 31, 2024 ($ in thousands): 104 December 31, 2025 December 31, 2024 Current Face Carrying Value Stated Maturity Base/Fixed Interest Rate Interest Rate Pricing Spread Carrying Value Notes payable Multinational Bank 1 (1) $ 125,091 $ 125,091 June 2026 Average Daily SOFR 1.65 % - 2.10 % $ 100,711 Global Investment Bank 2 (2) — — March 2026 1 Month Term SOFR 1.65 % - 2.40 % 15,111 Global Investment Bank 3 (3) 60,263 60,263 September 2026 Compound SOFR 1.75 % - 4.75 % 13,637 Global Investment Bank 4 (4) 33,403 33,403 October 2027 Term SOFR 1.60 % — Total Notes Payable Financing $ 218,757 $ 218,757 $ 129,459 Non-recourse securitization obligation $ 1,915,390 $ 1,915,321 N/A 4.51 % $ 1,593,612 Securities sold under agreements to repurchase $ 54,041 $ 54,041 October 2025 5.44 % $ 50,555 Senior Unsecured Notes June 2030 Senior Unsecured Notes $ 42,500 $ 40,784 June 2030 9.75 % $ — July 2029 Senior Unsecured Notes 50,000 48,239 July 2029 9.50 % 47,740 Total Senior Unsecured Notes $ 92,500 $ 89,023 $ 47,740 Total Financing $ 2,280,688 $ 2,277,142 $ 1,821,366 (1) On December 26, 2025, this financing facility was extended through June 25, 2026 in accordance with the terms of the agreement, which contemplates rolling three-month renewals. The interest rate pricing spread remained unchanged from the prior extension at a range from 1.65 % to 2.10 %. (2) On March 28, 2024, the Company and two of its subsidiaries terminated the existing facility with Global Investment Bank 2 and the Company and two different subsidiaries entered into a new facility with Global Investment Bank 2 wherein the Company is guarantor, one of the subsidiaries is seller and Global Investment Bank 2 is buyer. This updated facility has been extended through March 27, 2026. On October 10, 2025, the facility was amended to reduce the interest rate pricing spread to a range of 1.65 % to 2.40 %; prior to this amendment, the interest rate pricing spread was a range of 1.75 % to 3.35 %. (3) On September 26, 2025, the facility’s termination date was extended to September 26, 2026. In addition, the interest rate pricing spread was reduced to a range from 1.75 % to 4.75 %; prior to this extension, the interest rate pricing spread was a range from 1.90 % to 4.75 %. (4) On October 6, 2025, the Company and one of its subsidiaries entered into a $ 200.0 million repurchase facility with a global investment bank (“Global Investment Bank 4”) through the execution of a Master Repurchase Agreement and Securities Contract (the “Global Investment Bank 4 Master Repurchase Agreement”). The amount expected to be advanced by Global Investment Bank 4 is generally in line with other similar agreements that the Company has entered into. Additionally, the rates, terms, events of default, and remedies for such events of default contained within the Master Repurchase Agreement are generally in line with other similar agreements that the Company has entered into. The interest rate is equal to the sum of (1) a spread of 1.60 %, and (2) Term SOFR. The Master Repurchase Agreement expires on October 6, 2027, unless terminated earlier pursuant to the terms of the Global Investment Bank 4 Master Repurchase Agreement. The following table sets forth the total unused borrowing capacity of each financing line as of December 31, 2025: 105 Note Payable Borrowing Capacity Balance Outstanding Available Financing (in thousands) Multinational Bank 1 $ 600,000 $ 125,091 $ 474,909 Global Investment Bank 2 250,000 — 250,000 Global Investment Bank 3 200,000 60,263 139,737 Global Investment Bank 4 200,000 33,403 166,597 Total $ 1,250,000 $ 218,757 $ 1,031,243 Although available financing is uncommitted for each of these lines of credit, the Company’s unused borrowing capacity is available if it has eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements. Senior Unsecured Notes The Company’s Senior Unsecured Notes consist of $ 42.5 million principal amount of its 9.75 % Senior Notes due June 2030 (the “2030 Notes”) and $ 50.0 million principal amount of its 9.50 % Senior Notes due July 2029 (the “2029 Notes” and, together with the 2030 Notes, the “Senior Unsecured Notes”). The 2030 Notes were issued in May 2025 in a public offering for net proceeds of approximately $ 40.6 million and the 2029 Notes were issued in July 2024 in a public offering for net proceeds of approximately $ 47.5 million. The below table provides a summary of the Senior Unsecured Notes as of December 31, 2025 ($ in thousands). Carrying Value Senior Unsecured Notes (1) Principal Amount December 31, 2025 December 31, 2024 Maturity Date (2) Redemption Date (3) Rate (4) June 2030 Senior Unsecured Notes $ 42,500 $ 40,784 $ — June 2030 June 2027 9.75 % July 2029 Senior Unsecured Notes $ 50,000 $ 48,239 $ 47,740 July 2029 July 2026 9.50 % $ 92,500 $ 89,023 $ 47,740 (1) The Senior Unsecured Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Operating Partnership, including the due and punctual payment of principal, premium, if any, and interest on the Senior Unsecured Notes, whether at stated maturity, upon acceleration, call for redemption or otherwise. (2) The Company has the option to redeem the Senior Unsecured Notes earlier than the maturity date. (3) The Company may redeem the Senior Unsecured Notes in whole or in part at any time on or after the optional redemption date, at a redemption price equal to 100 % of the outstanding principal amount of the Senior Unsecured Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. Upon the occurrence of certain events relating to a change of control of the Company, the Company must make an offer to repurchase all outstanding Senior Unsecured Notes at a price in cash equal to 101 % of the principal amount of the Senior Unsecured Notes, plus accrued and unpaid interest to, but excluding, the repurchase date. (4) The 2030 Notes bear interest at a rate equal to 9.75 % per year, payable in cash quarterly in arrears on March 1, June 1, September 1, and December 1 of each year, beginning on September 1, 2025. The 2029 Notes bear interest at a rate equal to 9.50 % per year, payable in cash quarterly in arrears on January 30, April 30, July 30 and October 30 of each year. The below table details the total interest expense incurred on the Senior Unsecured Notes during the years ended December 31, 2025 and December 31, 2024 ($ in thousands). December 31, 2025 December 31, 2024 Coupon interest expense $ 7,298 $ 2,072 Amortization expense 840 462 Total interest expense $ 8,138 $ 2,534 At December 31, 2025 and December 31, 2024, the accrued interest payable on the Senior Unsecured Notes was $ 2.2 million and $ 0.8 million, respectively. At December 31, 2025 and December 31, 2024, the unamortized deferred debt issuance cost was $ 1.2 million and $ 1.4 million, respectively. The unamortized debt issuance costs will be amortized until maturity. 106 Securities Sold Under Agreements to Repurchase Transactions involving securities sold under agreements to repurchase are treated as collateralized financing transactions, and are recorded at their contracted repurchase amounts. Margin (if required) for securities sold under agreements to repurchase represents margin collateral amounts held to ensure that the Company has sufficient coverage for securities sold under agreements to repurchase in case of adverse price changes. Restricted cash of margin collateral for securities sold under agreements to repurchase was $ 1.2 million and $ 1.2 million as of December 31, 2025 and December 31, 2024, respectively. The following table summarizes certain characteristics of the Company’s repurchase agreements as of December 31, 2025 and December 31, 2024: December 31, 2025 Repurchase Agreements Amount Outstanding Weighted Average Interest Rate Weighted Average Remaining Maturity (Days) ($ in thousands) AOMT RMBS (1) $ 54,041 5.44 % 16 December 31, 2024 Repurchase Agreements Amount Outstanding Weighted Average Interest Rate Weighted Average Remaining Maturity (Days) ($ in thousands) AOMT RMBS (1) $ 50,555 5.76 % 19 (1) A portion of repurchase debt outstanding as of December 31, 2025 and December 31, 2024 includes borrowings against retained bonds received from on-balance sheet securitizations (i.e., consolidated VIEs). See Note 5 - Investment Securities . Although the transactions under repurchase agreements represent committed borrowings until maturity, the lenders retain the right to mark the underlying collateral at fair value. A reduction in the value of pledged assets would require the Company to provide additional collateral or fund margin calls. 7. Due to Broker The “Due to broker” account on the consolidated balance sheet as of December 31, 2025 and December 31, 2024 in the amount of $ 198 million and $ 202 million, respectively, relates to the purchase of Whole Pool Agency RMBS. Purchases are accounted for on a trade date basis; and, at times, there may be a timing difference between the trade date and the settlement date of a trade. The trade date of this purchase was prior to the applicable year-end dates. These trades settled in January 2025 and 2024, respectively, at which time these assets were simultaneously sold. The purchase transactions of these Whole Pool Agency RMBS are excluded from the consolidated statements of cash flows until settled. 8. Derivative Financial Instruments In the normal course of business, the Company enters into derivative financial instruments to manage its exposure to market risk, including interest rate risk and prepayment risk on its whole loan investments. The derivatives in which the Company invests, and the market risk that the economic hedge is intended to mitigate are further discussed below. Derivative instruments as of December 31, 2025 and December 31, 2024 included interest rate futures contracts. Restricted cash relating to interest rate futures margin collateral in interest rate futures accounts as of December 31, 2025 and December 31, 2024 included $ 2.5 million and $ 0.9 million, respectively. The Company uses interest rate futures as economic hedges to hedge a portion of its interest rate risk exposure. Interest rate risk is sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, as well as other factors. The Company’s credit risk with respect to economic hedges is the risk of default on its investments that result from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments. The Company may at times hold To-Be-Announced (“TBA”) securities in order to mitigate its interest rate risk on certain specified mortgage-backed securities. Amounts or obligations owed by or to the Company are subject to the right of set-off with the TBA counterparty. As part of executing these trades, the Company may enter into agreements with its TBA counterparties that govern the transactions for the TBA purchases or sales made, including margin maintenance, payment and transfer, events of default, settlements, and various other provisions. 107 Changes in the value of derivatives designed to protect against mortgage-backed securities fair value fluctuations, or economic hedging gains and losses, are reflected in the tables below. All realized and unrealized gains and losses on derivative contracts are recognized in earnings, in “net realized gain (loss) on mortgage loans, derivative contracts, RMBS, and CMBS” for realized gains and losses, and “net unrealized gain (loss) on trading securities, mortgage loans, portion of debt at fair value option, and derivative contracts” for unrealized gains and losses. The Company considers the notional amounts, categorized by primary underlying risk, to be representative of the volume of its derivative activities. The following table sets forth the derivative instruments presented on the consolidated balance sheets and notional amounts as of December 31, 2025 and December 31, 2024: Notional Amounts As of: Derivatives Not Designated as Hedging Instruments Number of Contracts Assets Liabilities Long Exposure Short Exposure ($ in thousands) December 31, 2025 Interest rate futures 3,143 $ — $ 32 $ — $ 314,300 December 31, 2025 TBAs N/A $ 240 $ — $ — $ 198,600 December 31, 2024 Interest rate futures 2,800 $ 987 $ — $ — $ 280,000 December 31, 2024 TBAs N/A $ 528 $ — $ — $ 213,400 The gains and losses arising from these derivative instruments in the consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2025, and December 31, 2024 are set forth as follows: As of: Derivatives Not Designated as Hedging Instruments Net Realized Gains (Losses) on Derivative Instruments Net Change in Unrealized Appreciation (Depreciation) on Derivative Instruments (in thousands) December 31, 2025 Interest rate futures $ ( 3,108 ) $ ( 1,019 ) December 31, 2025 TBAs $ ( 1,877 ) $ ( 289 ) December 31, 2024 Interest rate futures $ 5,847 $ 1,827 December 31, 2024 TBAs $ 5,374 $ 1,022 9. Fair Value Measurements Definition and Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable or unobservable: • Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. • Unobservable inputs are inputs that reflect the reporting entity’s own assumptions A fair value hierarchy for inputs is implemented in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs are used when available. The availability of valuation techniques and the ability to attain observable inputs can vary from investment to investment and are affected by a wide variety of factors, including the type of investment, whether the investment is newly issued and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction. The fair value hierarchy is categorized into three broad levels based on the inputs as follows: Level 1 - Valuations based on unadjusted, quoted prices in active markets for identical assets and liabilities. Level 2 - Valuations based on quoted prices in an inactive market, or whose values are based on models - but the inputs to those models are observable either directly or indirectly for substantially the full term of the assets and liabilities. Level 2 inputs include the following: 108 a) Quoted prices for similar assets and liabilities in active markets (e.g. restricted stock); b) Quoted prices for identical or similar assets and liabilities in non‑active markets (e.g. corporate and municipal bonds); c) Pricing models whose inputs are observable for substantially the full term of the assets and liabilities (e.g. over‑the‑counter derivatives); and d) Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability, (e.g. residential and commercial mortgage‑related assets, including whole loan securities and derivatives). Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Valuation of these assets is typically based on the Company’s Manager’s own assumptions or expectations based on the best information available. The degree of judgment exercised by the Company’s Manager in determining fair value is greatest for investments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the actual level is determined based on the level of inputs that is most significant to the fair value measurement in its entirety. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Company’s Manager in determining fair value is greatest for investments categorized in Level 3. Transfers, if any, between levels are determined by the Company on the first day of the reporting period. Valuation Techniques and Inputs Following are descriptions of the valuation methodologies used to measure the Company’s assets and liabilities measured at fair value: Investment Securities - U.S. Government and Agency Securities (“U.S. Treasury Securities” and “whole pool agency RMBS”) are valued based on unadjusted, quoted prices for identical or similar assets or liabilities in an active market. U.S. Treasury Securities are generally categorized as Level 1 securities while whole pool agency RMBS are generally classified as Level 2 securities. Futures Contracts - Futures contracts that are traded on an exchange are valued at their last reported sales price as of the valuation date. Listed futures contracts are categorized in Level 1 of the fair value hierarchy. Non‑Agency Residential Mortgage‑Backed Securities (“Non‑Agency”) - The Company utilizes Price Serve , Bank of America’s independent fixed income pricing service, as the primary valuation source for the investments. Price Serve obtains its price quotes from actual sales or quotes for sale of the same or similar securities and/or provides model‑based valuations that consider inputs derived from recent market activity including default and prepayment assumptions which can incorporate historical collateral performance, sector level market projections and market conventions. Assumptions can also be adjusted as needed to reflect updated collateral performance data, a changing economic environment, and as market views dictate. These quotes are most reflective of the price that would be achieved if the security was sold to an independent third party on the date of the consolidated financial statements. Non‑Agencies are categorized in Level 2 of the fair value hierarchy. Commercial Mortgage Loans - Commercial mortgage loans, including in Other Assets, are recognized at fair value. The fair value of commercial mortgage loans at fair value is predominately based on trading activity observed in the marketplace, provided by a third‑party pricing service. The pricing service obtains comparative pricing from banks, brokers, hedge funds, REITs and from its own brokerage business. The pricing service also maintains a spread matrix created from trading levels observed in the secondary market and from indications of holding values in client investments. The spreads are meant to depict the required spread demanded by investors in the current environment. The performing commercial mortgage loans are generally categorized as Level 2 securities in the fair value hierarchy, while non-performing loans are categorized as Level 3 given their limited marketability and availability of observable valuation inputs. Residential Mortgage Loans (including Residential Mortgage Loans in Securitization Trusts) - The Company recognizes residential mortgage loans at fair value. The fair value of the residential mortgage loans is predominantly based on trading activity observed in the marketplace, provided by a third‑party pricing service. The third‑party pricing service obtains comparative pricing from banks, brokers, hedge funds, REITs and from its own brokerage business. The third‑party pricing service also maintains a spread matrix created from trading levels observed in the secondary market and from indications of holding values in client investments. The spreads are meant to depict the required spread demanded by investors in the current environment. The matrix is segregated by loan structure type (hybrid arm, fixed rate, home equity line of credit, second lien, pay option arm, etc.), delinquency status, and loan to value strata. Significant matrix inputs are analyzed at the loan level. The performing residential mortgage loans are categorized as Level 2 in the fair value hierarchy, while non‑performing loans 109 are categorized as Level 3 given their limited marketability and availability of observable valuation inputs. Both Level 2 and Level 3 loans matrix inputs include collateral behavioral models including prepayment rates, default rates, loss severity, and discount rates. Non-recourse securitization obligations, collateralized by residential mortgage loans - The portion of this obligation for which we have elected the fair value option uses the prices of the underlying bonds securing the related residential mortgage loans in securitization trusts to determine fair value. The Company utilizes PriceServe, which obtains its price quotes from actual sales or quotes for sale of the same or similar securities and/or provides model-based valuations that consider inputs derived from recent market activity including default rates, conditional prepayment rates, loss severity, expected yield to maturity, baseline discount margin/yield, recovery assumptions, tranche type, collateral coupon, age and loan size, and other inputs specific to each security. We believe that these quotes are most reflective of the price that would be achieved if the bonds were sold to an independent third party on the date of the consolidated financial statements. The portion of this liability for which we have elected the fair value option is categorized as Level 2 in the fair value hierarchy. Other assets and liabilities - The fair value of cash, restricted cash, principal and interest receivable, other assets (principally consisting of prepaid assets), notes payable, securities sold under obligation to repurchase, amounts due to broker and accrued expenses (including those payable to an affiliate and management fees payable to an affiliate), and interest payable approximate their carrying values due to the nature of these assets and liabilities. Valuation Processes The Company’s Manager establishes valuation processes and procedures to ensure that the valuation techniques are fair and consistent, and valuation inputs are verifiable. The valuation committee of the Company’s Manager (the “Committee”) oversees the valuation process of the Company’s investments. The Committee is comprised of various personnel of the Company’s Manager, including those that are separate from the Company’s portfolio management and trading functions. The Committee is responsible for developing the Company’s written valuation processes and procedures, conducting periodic reviews of the valuation policies, and evaluating the overall fairness and consistent application of the valuation policies. The Committee meets on a monthly basis, or more frequently as needed, to review the valuations of the Company’s investments. If a security does not have a pricing source which is available or reliable, the Company’s Manager considers all appropriate factors relevant to determine the fair value of the security. Valuations determined by the Company’s Manager are required to be supported by market data, third‑party pricing sources, and industry accepted pricing models. 110 The following table sets forth information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2025: Level 1 Level 2 Level 3 Total (in thousands) Assets, at fair value Residential mortgage loans $ — $ 293,141 $ 993 $ 294,134 Residential mortgage loans in securitization trusts — 2,046,609 30,167 2,076,776 Investments in securities AOMT RMBS (1) — 82,140 — 82,140 Whole Pool Agency RMBS — 197,865 — 197,865 Unrealized depreciation on TBAs 240 — — 240 Other Assets, at fair value (2) — 9,893 1,897 11,790 Total assets, at fair value $ 240 $ 2,629,648 $ 33,057 $ 2,662,945 Liabilities, at fair value Non-recourse securitization obligation, collateralized by residential mortgage loans (3) $ — $ 1,572,934 $ — $ 1,572,934 Unrealized depreciation on futures contracts 32 — — 32 Total liabilities, at fair value $ 32 $ 1,572,934 $ — $ 1,572,966 (1) Non‑Agency RMBS held as of December 31, 2025 included both retained tranches of AOMT securitizations in which the Company participated, additional AOMT securities purchased in secondary market transactions, and other RMBS purchased in secondary market transactions. All AOMT CMBS held as of December 31, 2025 was comprised of a small-balance commercial loan securitization issuance in which the Company participated. (2) Includes Commercial Loans, AOMT CMBS assets, and loans held for sale. All AOMT CMBS held as of December 31, 2025 was comprised of a small-balance commercial loan securitization issuance in which the Company participated. (3) Only the portion subject to fair value measurement, as adjusted for fair value, is presented above. See below in “Assets and Liabilities Held at Amortized Cost - Fair Value Disclosure” for the disclosure of the full debt at fair value. All unrealized gains and losses arising from valuation changes in residential and commercial mortgage loans, TBAs, and futures contracts are recognized in net income for the periods presented. Transfers from Level 2 to Level 3 were comprised of residential loans more than 90 days overdue (including those in foreclosure) in special servicing or otherwise considered “non‑performing” by the Company’s third‑party valuation providers. Transfers between Levels are deemed to take place on the first day of the reporting period in which the transfer has taken place. The following table presents additional information for the years ended December 31, 2025 and December 31, 2024 about the Company’s Level 3 assets measured at fair value on a recurring basis: December 31, 2025 December 31, 2024 (in thousands) Balance at beginning of period $ 32,074 $ 19,299 Loans held for sale 1,897 — Loans sold ( 5,397 ) ( 8,689 ) Transfers to performing loans ( 8,582 ) ( 3,570 ) Principal payments ( 304 ) ( 776 ) Changes in fair value recorded in Net unrealized gain (loss) on mortgage loans ( 4,224 ) 813 Additions to non-performing loans 17,593 24,997 Balance at end of period $ 33,057 $ 32,074 111 We use third‑party valuation firms who utilize proprietary methodologies to value our residential and commercial loans. These firms generally use both market comparable information and discounted cash flow modeling techniques to determine the fair value of our assets. Use of these techniques requires determination of relevant input and assumptions, some of which represent significant unobservable inputs such as anticipated credit losses, prepayment rates, default rates, or other valuation assumptions. Accordingly, a significant increase or decrease in any of these inputs in isolation may result in a significantly lower or higher fair value measurement. The following table sets forth information regarding the Company’s significant Level 3 inputs as of December 31, 2025: Input Values Asset Fair Value Unobservable Input Range Average Residential mortgage loans, at fair value $ 993 Prepayment rate (annual CPR) — % - — % — % Default rate — % - — % — % Loss severity ( 9.30 )% - ( 9.30 )% ( 9.30 )% Expected remaining life 2.6 - 2.6 years 2.67 years Residential mortgage loans in securitization trust, at fair value $ 30,167 Prepayment rate (annual CPR) 2.92 % - 21.31 % 10.05 % Default rate 0.38 % - 26.12 % 14.40 % Loss severity ( 23.91 )% - 28.63 % ( 3.21 )% Expected remaining life 0.6 - 10.75 years 3.56 years Assets and Liabilities Held at Amortized Cost - Fair Value Disclosure Portion of Non-Recourse Securitization Obligations, Collateralized by Residential Mortgage Loans - Held at Amortized Cost To determine the fair value of the Company’s non-recourse securitization obligations, collateralized by residential mortgage loans, net, held at amortized cost, the Company uses the same method of valuation as described previously in the discussion of Valuation Techniques and Inputs for both the portion of the obligation measured at fair value and the portion of the obligation held at amortized cost, for which fair value is disclosed, as below. As of December 31, 2025, the total amortized cost basis and fair value of our non-recourse securitization obligations was $ 1.95 billion and $ 1.87 billion, respectively, a difference of approximately $ 79.0 million (which includes AOMT 2022-1, AOMT 2022-4, AOMT 2023-4, AOMT 2024-4, AOMT 2024-10, and AOMT 2025-10 which are marked to fair value; and AOMT 2021-7 and AOMT 2021-4, which are carried at amortized cost, as the fair value option was not elected at the time of the creation of these obligations). The fair value solely attributable to AOMT 2021-4 and 2021-7 is approximately $ 48.8 million less than the amortized cost. The difference between the amortized cost basis value and the fair value is derived from the difference between the period-end market pricing of the underlying bonds, as referred to above, and the amortized cost of the obligation. The fair value of the non-recourse securitization debt is not indicative of the amounts at which we could settle this debt. As of December 31, 2024, the total amortized cost basis and fair value of our non-recourse securitization obligations was $ 1.65 billion and $ 1.52 billion, respectively, a difference of approximately $ 124.3 million (which includes AOMT 2022-1, AOMT 2022-4, and AOMT 2023-4, which are marked to fair value; and AOMT 2021-7 and AOMT 2021-4, which are carried at amortized cost, as the fair value option was not elected at the time of the creation of these obligations). The fair value solely attributable to AOMT 2021-4 and 2021-7 is approximately $ 68.8 million less than the amortized cost. The difference between the amortized cost basis value and the fair value is derived from the difference between the period-end market pricing of the underlying bonds, as referred to above, and the amortized cost of the obligation. The fair value of the non-recourse securitization debt is not indicative of the amounts at which we could settle this debt. Investments in Majority-Owned Affiliates To determine the fair value of the Company’s investments in majority-owned affiliates, which are held at amortized cost and included in “other assets”, the Company uses the prices of the underlying bonds in the investments to determine fair value. The Company utilizes PriceServe, Bank of America’s independent fixed income pricing service, as the primary valuation source for these bonds. PriceServe obtains its price quotes from actual sales or quotes for sale of the same or similar securities and/or provides model‑based valuations that consider inputs derived from recent market activity including default rates, conditional prepayment rates, loss severity, expected yield to maturity, baseline discount margin/yield, recovery assumptions, tranche type, collateral coupon, age and loan size, and other inputs specific to each security. We believe that these quotes are most reflective of the price that would be achieved if the bonds were sold to an independent third party on the date of the consolidated financial statements. The amortized cost and fair value of these investments as of December 31, 2025 was approximately $ 25.5 million and $ 20.5 million, respectively. The amortized cost and fair value of these investments as of December 31, 2024 was approximately $ 20.6 million and $ 16.6 million, respectively. 112 Senior Unsecured Notes The Company’s Senior Unsecured Notes trade actively in the secondary market. To determine the fair value of the Company’s Senior Unsecured Notes, the Company multiplies the number of outstanding Senior Unsecured Notes by their closing price as of December 31, 2025. The fair value of the Senior Unsecured Notes as of December 31, 2025 and December 31, 2024 was $ 93.9 million and $ 50.8 million, respectively. The Company holds the Senior Unsecured Notes on its balance sheet at their balance net of amortized discount and debt issuance cost. The carrying value of the Senior Unsecured Notes as of December 31, 2025 and December 31, 2024 was $ 89.0 million and $ 47.7 million. The difference between the balance net of amortized discount and debt issuance cost and the fair value as of December 31, 2025 and December 31, 2024 is $ 4.9 million and $ 3.0 million, respectively. The following table sets forth information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2024 (1) : Level 1 Level 2 Level 3 Total (in thousands) Assets, at fair value Residential mortgage loans $ — $ 183,064 $ — $ 183,064 Residential mortgage loans in securitization trusts — 1,664,921 32,074 1,696,995 Investments in securities AOMT RMBS (1) — 98,791 — 98,791 Whole Pool Agency RMBS — 201,452 — 201,452 U.S. Treasury Securities — — — — Unrealized depreciation on futures contracts 987 — — 987 Unrealized depreciation on TBAs 528 — — 528 Other Assets, at fair value (2) — 10,807 — 10,807 Total assets, at fair value $ 1,515 $ 2,159,035 $ 32,074 $ 2,192,624 Liabilities, at fair value Non-recourse securitization obligation, collateralized by residential mortgage loans (3) $ — $ 1,524,828 $ — $ 1,524,828 Total liabilities, at fair value $ — $ 1,524,828 $ — $ 1,524,828 (1) Non‑Agency RMBS held as of December 31, 2024 included both retained tranches of AOMT securitizations in which the Company participated, additional AOMT securities purchased in secondary market transactions, and other RMBS purchased in secondary market transactions. All AOMT CMBS held as of December 31, 2024 was comprised of a small-balance commercial loan securitization issuance in which the Company participated. (2) Includes Commercial Loans and AOMT CMBS assets. All AOMT CMBS held as of December 31, 2024 was comprised of a small-balance commercial loan securitization issuance in which the Company participated. (3) Only the portion subject to fair value measurement, as adjusted for fair value, is presented above. See below in “Assets and Liabilities Held at Amortized Cost - Fair Value Disclosure” for the disclosure of the full debt at fair value. All unrealized gains and losses arising from valuation changes in residential and commercial mortgage loans, TBAs, and futures contracts are recognized in net income for the periods presented. We use third‑party valuation firms who utilize proprietary methodologies to value our residential and commercial loans. These firms generally use both market comparable information and discounted cash flow modeling techniques to determine the fair value of our assets. Use of these techniques requires determination of relevant inputs and assumptions, some of which represent significant unobservable inputs such as anticipated credit losses, prepayment rates, default rates, or other valuation assumptions. Accordingly, a significant increase or decrease in any of these inputs in isolation may result in a significantly lower or higher fair value measurement. The following table sets forth information regarding the Company’s significant Level 3 inputs as of December 31, 2024: 113 Input Values Residential mortgage loans in securitization trust, at fair value $ 32,074 Prepayment rate (annual CPR) 3.64 % - 19.83 % 8.48 % Default rate 6.94 % - 42.76 % 16.77 % Loss severity ( 23.04 )% - 16.94 % ( 1.96 )% Expected remaining life 1.33 - 5.92 years 2.68 years 10. Income Taxes The Company has elected to be taxed as a REIT commencing with its taxable year ended December 31, 2019. As long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes its REIT taxable income to stockholders and does not engage in prohibited transactions (as further described below). Income tax (benefit) items arise at the Company’s TRS level. Certain sales by the group consisting of the Company and its subsidiaries may give rise to gain that could be treated as derived from “prohibited transactions” if carried out by the Company directly. Such transactions involve the purchase of residential mortgage loans and the subsequent sale of those mortgage loans or interests therein through the secondary whole loan market or the securitization markets. The Company has designated AOMR TRS to conduct such transactions rather than Angel Oak Mortgage REIT, Inc. The Company files separate U.S. federal and state corporate income tax returns for Angel Oak Mortgage REIT, Inc. and AOMR TRS. AOMR TRS is taxed as a standalone U.S. C‑corporation on all of its separately computed taxable income. The Company’s federal income tax returns for 2019 and forward are subject to examination. The Company’s state income tax returns are generally subject to examination for 2019 and forward. The following table sets forth the income tax provision (benefit) as recorded in the Company’s consolidated statements of comprehensive income (loss) for the years ended December 31, 2025 and December 31, 2024: December 31, 2025 December 31, 2024 (in thousands) Current Federal $ 494 $ 6,474 State 37 848 Total current income tax expense 531 7,322 Deferred Federal ( 149 ) ( 3,382 ) State ( 30 ) ( 679 ) Total deferred income tax expense (benefit) ( 179 ) ( 4,061 ) Total income tax expense (benefit) $ 352 $ 3,261 Deferred Tax Assets (“DTAs”) and Assessing the Realizability of the Company’s DTAs Realization of the Company’s DTAs as of December 31, 2025, is dependent on many factors, including generating sufficient taxable income prior to the expiration of net operating loss (“NOL”) carryforwards (where applicable). The Company determines the extent to which realization of its deferred assets is not assured and establishes a valuation allowance accordingly. As the Company’s TRS incurred a NOL during the year ended December 31, 2022, the Company closely analyzed its estimate of the realizability of its net DTAs in whole and in part. The NOLs incurred in 2022 can be carried forward indefinitely, until fully utilized. The Company evaluates its DTAs each period to determine if a valuation allowance is required based on whether it is “more likely than not” that some portion of the DTAs would not be realized. This evaluation requires significant judgment, and changes to the Company’s assumptions could result in a material change in the valuation allowance. The ultimate realization of these DTAs is dependent upon the generation of sufficient taxable income during future periods. The Company conducts its evaluation by considering, among other things, all available positive and negative evidence, historical operating results and cumulative earnings analysis, forecasts of future profitability, and the duration of statutory carryforward periods. Based on this analysis, the Company continues to believe it is more likely than not that it will not fully realize its federal and state DTAs in future periods. Therefore, the Company has recorded a valuation allowance against the majority of its DTAs, as set forth in the table, below. The Company’s estimate of net DTAs could change in future periods to the extent that actual or revised estimates of future taxable income during the carryforward periods change from current expectations. The Company assessed its tax positions for all open tax years and concluded that it had no uncertain tax positions that resulted in material unrecognized tax benefits. The tax effects of temporary differences 114 that give rise to significant portions of the net DTA recorded at the TRS entity as of December 31, 2025 and December 31, 2024 are set forth in the following table: December 31, 2025 December 31, 2024 (in thousands) DTA Net operating loss carryforward $ 29,981 $ 37,455 Utilization of operating loss carryforwards ( 179 ) ( 4,026 ) Valuation allowance ( 26,528 ) ( 29,972 ) Total DTA 3,274 3,457 Reconciliation of Statutory Tax Rate to Effective Tax Rate The difference between the Company’s reported provision for income taxes and the U.S. federal statutory rate of 21% is set forth as follows for the years ended December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Federal statutory rate 21.00 % 21.00 % State statutory rate, net of federal tax effect 4.26 % 4.26 % Change in valuation allowance ( 0.40 ) % ( 12.58 ) % Non-taxable REIT income ( 21.34 ) % ( 5.91 ) % Total provision 3.52 % 6.77 % 11. Related Party Transactions Residential Mortgage Loan Purchases The Company has residential mortgage loan purchase agreements with various affiliates of the Company. The purchase price of the loans is generally equal to the outstanding principal of the mortgage, adjusted by a premium or discount, depending on market conditions. The Company purchases the mortgage loans on a servicing retained basis. The residential mortgage loans are on residences located in various states with a concentration in California and Florida. The following table sets forth certain financial information pertaining to whole loan activity purchased from affiliates during the years ended and as of December 31, 2025 and December 31, 2024: As of and for the Year Ended: Amount of Loans Purchased from Affiliates during the Year Number of Loans Purchased from Affiliates during the Year Number of Loans Purchased from Affiliates, Owned and Held at December 31 (1) : ($ in thousands) December 31, 2025 $ 164,888 364 120 December 31, 2024 $ 255,368 558 83 (1) Excludes loans held in consolidated securitizations. Management Fee The Company and the Operating Partnership have entered into a Management Agreement with the Manager, dated as of October 1, 2025 (the “Management Agreement”). Per the Management Agreement, on a quarterly basis in arrears, the Company shall pay its Manager an aggregate, fixed management fee equal to 1.5 % per annum of the Company’s Equity (as defined in the Management Agreement). Incentive Fee Under the Management Agreement, the Manager is also entitled to an incentive fee, which is calculated and payable in cash with respect to each calendar quarter (or part thereof that the Management Agreement is in effect) in arrears in an amount, not less than zero , equal to the excess of (1) the product of (a) 15 % and (b) the excess of (i) the Company’s Distributable Earnings (as defined in the Management Agreement) for the previous 12-month period, over (ii) the product of (A) the Company’s Equity in the previous 12-month period, and (B) 115 8 % per annum, over (2) the sum of any incentive fee earned by the Manager with respect to the first three calendar quarters of such previous 12-month period. To date, the incentive fee has not been earned. Operating Expense Reimbursements The Company is also required to pay the Manager reimbursements for certain general and administrative expenses pursuant to the Management Agreement. Accrued expenses payable to affiliate and operating expenses incurred with affiliate are substantially comprised of payroll reimbursements. 12. Commitments and Contingencies The Company, from time to time, may be party to litigation relating to claims arising in the normal course of business. As of December 31, 2025, the Company was not aware of any legal claims that could materially impact its financial condition. As of December 31, 2025, the Company had no unfunded commitments. The Company has entered into forward purchase commitments with counterparties whereby the Company commits to purchasing residential mortgage loans at a particular price, provided the residential mortgage loans close with the counterparties. As of December 31, 2025, the Company has total purchase commitments of $ 179.1 million related to both Angel Oak Mortgage Lending and third parties. These commitments represent off-balance sheet risk where the Company may be required to extend credit. As of December 31, 2024, the Company has total purchase commitments of $ 152.6 million related to both Angel Oak Mortgage Lending and third parties. 116 13. Accumulated Other Comprehensive Income/(Loss) The following table sets forth the net unrealized gain/(loss) on AFS securities for the fiscal year ended December 31, 2025 and December 31, 2024, which is the s ole component of the changes in the Company’s Accumulated Other Comprehensive Income/(Loss) (“AOCI”) for the fiscal year concluded on December 31, 2025 and December 31, 2024: December 31, 2025 December 31, 2024 (in thousands) AOCI balance, beginning of period $ ( 3,475 ) $ ( 4,975 ) Net unrealized gain/(loss) on AFS securities 2,161 1,500 AOCI balance, end of period $ ( 1,314 ) $ ( 3,475 ) 14. Other Assets The following table sets forth the detail of other assets included in the consolidated balance sheets as of December 31, 2025 and December 31, 2024: December 31, 2025 December 31, 2024 ($ in thousands) Investments in Majority-Owned Affiliates $ 25,474 $ 20,680 Commercial Mortgage Loans, at fair value 5,189 5,214 CMBS, at fair value 4,703 5,593 Deferred tax asset 3,274 3,457 Prepaid expenses 1,553 1,095 Loans held for sale 1,897 0 Other assets 894 879 Total other assets $ 42,984 $ 36,918 Investments in Majority-Owned Affiliates (“MOA”) The Company has participated in securitization transactions which involved MOAs in which the Company received investments in each case proportional to its share of the unpaid principal balance of the residential whole loans contributed to the securitizations. The purpose of the MOAs is to retain and hold risk retention bonds issued by the securitization trust. Each MOA is a limited liability company and is accounted for as an equity method investment and held at amortized cost and tested for impairment at least annually utilizing undiscounted cash flows of the underlying bonds. See Note 9 — Fair Value Measurements . Commercial Mortgage Loans Commercial mortgage loans are measured at fair value. As of December 31, 2025 and December 31, 2024, the cost and unpaid principal balance of the assets was $ 5.5 million and $ 5.6 million, with a fair value of $ 5.2 million and $ 5.2 million, respectively. The weighted average interest rate was 6.24 % with a weighted average maturity of P10Y , as of December 31, 2025. There were no commercial mortgage loans more than 90 days past due or in foreclosure as of December 31, 2025 or December 31, 2024. Commercial Mortgage Backed Securities CMBS are held at fair value. As of December 31, 2025 and December 31, 2024, the cost of these assets were $ 5.4 million and $ 6.1 million, with a fair value of $ 4.7 million and $ 5.6 million, respectively. There was no repurchased debt held against these assets at December 31, 2025 or December 31, 2024. Loans Held for Sale As of December 31, 2025, loans held for sale were $ 1.9 million. Loans held for sale consist of non-performing loans that are classified as held for sale and recorded in other assets. See Note 9 — Fair Value Measurements . 117 15. Stockholders’ Equity During the years ended December 31, 2025 and December 31, 2024, the Company issued and sold 1,277,812 and 188,456 shares, respectively, of its common stock through its at-the-market equity offering program (the “ATM Program”) resulting in proceeds of $ 12.3 million and $ 2.3 million, respectively, net of commissions and fees. These shares of common stock were issued in SEC registered transactions off the Company’s shelf registration statement. Per the terms of our ATM Program, we may offer and sell shares of our common stock having aggregate gross proceeds of up to $ 75.0 million from time to time, of which $ 60.2 million is available. On July 25, 2024 the Company repurchased 1,707,922 shares of 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 following the issuance of $ 50 million in aggregate principal amount of the 2029 Notes. For the year ended December 31, 2025, the Company paid $ 30.9 million of dividends on common stock of which 64.8 % was taxable as ordinary income and 35.2 % was taxable as return of capital. For the year ended December 31, 2024, the Company paid $ 31.0 million of dividends on common stock of which 44.9 % was taxable as ordinary income and 55.1 % was taxable as return of capital. 16. Earnings per Share (“EPS”) In the calculations of basic and diluted earnings per common share for the years ended December 31, 2025 and December 31, 2024, the Company included participating securities, which are certain equity awards that have non-forfeitable dividend participation rights. Dividends and undistributed earnings allocated to participating securities under the basic and diluted earnings per share calculations require specific shares to be included that may differ in certain circumstances, and the Company determined that this difference was not material. For the year ended December 31, 2025, there were 157,299 outstanding restricted stock awards included in the diluted weighted average common shares outstanding. For the year ended December 31, 2024, there were 110,146 outstanding restricted stock awards included in the diluted weighted average common shares outstanding. The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2025 and December 31, 2024: December 31, 2025 December 31, 2024 (in thousands, except share and per share data) Basic Earnings per Common Share: Net income allocable to common stockholders $ 44,024 $ 28,750 Dividends allocated to participating securities ( 172 ) ( 155 ) Net income (loss) to common stockholders - basic 43,852 28,595 Basic weighted average common shares outstanding 23,682,302 24,179,039 Basic earnings per common share $ 1.85 $ 1.18 Diluted Earnings per Common Share: Net income (loss) to common stockholders - basic $ 44,024 $ 28,750 Dividends allocated to participating securities ( 172 ) ( 155 ) Net income (loss) to common stockholders - diluted 43,852 28,595 Basic weighted average common shares outstanding 23,682,302 24,179,039 Net effect of dilutive equity awards 632,323 217,812 Diluted weighted average common shares outstanding 24,314,625 24,396,851 Diluted earnings per common share $ 1.80 $ 1.17 118 17. Equity Compensation Plan On June 21, 2021, the Company established its sole equity compensation plan, the 2021 Equity Incentive Plan (the “Plan”), with 2,125,000 shares initially available for grant. As of December 31, 2025, 1,000,942 shares of common stock were available for grant under the Plan, which shares available are reduced by a target of 291,059 shares of common stock that may be issued upon the achievement of certain performance conditions under outstanding PSUs (as further described below) and 157,300 of time-based restricted stock awards that will vest upon the participants’ meeting the service-based vesting conditions under such awards. Compensation expense for the years ended December 31, 2025 and December 31, 2024 related to these awards was approximately $ 0.7 million and $ 1.3 million, respectively. The unamortized compensation expense of the restricted stock awards issued under the Plan totaled approximately $ 0.9 million as of December 31, 2025. This cost will be recognized over a weighted average period of 2.0 years. Restrictions on the restricted stock awards outstanding lapse through July 1, 2029, as service conditions are completed and the awards vest accordingly. Holders of unvested restricted stock awards receive non-forfeitable dividends along with other common stockholders. Restricted Stock Awards The following table summarizes activity for our restricted stock awards during the years ended December 31, 2025 and December 31, 2024: Number of awards Weighted average grant date fair market value Outstanding as of December 31, 2023 196,353 $ 12.86 Granted 65,464 12.51 Vested ( 140,575 ) 13.66 Forfeited ( 11,096 ) 12.33 Outstanding as of December 31, 2024 110,146 11.69 Granted 146,781 9.67 Vested ( 89,505 ) 11.33 Forfeited ( 10,122 ) 10.62 Outstanding as of December 31, 2025 157,300 $ 10.08 PSUs The Board of Directors have awarded a total of 408,467 PSUs, at a weighted average grant date fair value of $ 9.68 per share, to certain employees of the Manager and its affiliates, of which 291,059 PSUs remained outstanding as of December 31, 2025 (based on target performance), due to forfeitures of 75,352 PSUs. If the performance criteria are met, the PSUs shall vest 50 % on the third anniversary of the awards and 50 % on the fourth anniversary of the awards. The number of shares vested is based on the achievement of the performance goals set forth in the applicable award agreements over the relative performance periods. Dividend Equivalents Relating to PSUs A dividend equivalent is a right to receive a distribution equal to the dividend distributions that would be paid on a share of the Company’s common stock. Dividend equivalents may be granted as a separate instrument or may be a right associated with the grant of another award (e.g., a PSU) under the Plan. Should the performance criteria for these shares be met and the shares vest, the number of shares subject to the PSU awards shall increase by (i) the product of the total number of shares subject to the PSU award immediately prior to such dividend date multiplied by the dollar amount of the cash dividend paid per share of stock by the Company on such dividend date, divided by (ii) the fair market value of a share of stock on such dividend date (i.e., would be subject to dividend equivalents for any dividends paid between the grant date and the vesting date of the PSUs). Any such additional shares subject to the PSUs as a result of the dividend equivalents are subject to the same vesting conditions and payment terms applicable to the PSUs to which they relate. As of December 31, 2025, we have accrued an estimated $ 0.2 million for earned dividends equivalents payable for PSUs upon vesting. 18. Subsequent Events Subsequent events of significance for disclosure purposes only (i.e., subsequent events that are not recognized in the financial statements as of and for the year ended December 31, 2025) are as follows: 119 On February 5, 2026, the Company declared a dividend of $ 0.32 per share of common stock, that was paid on February 27, 2026 to common stockholders of record as of February 20, 2026. On March 3, 2026, the Company issued AOMT 2026-2, an approximately $ 272.3 million scheduled unpaid principal balance securitization backed by a pool of residential mortgage loans. The Company issued AOMT 2026-2 as the sole contributor in the securitization. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.