What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-06 compared with 2024-11-07 · 185 added, 280 removed, 485 unchanged (49% of the section changed)

3 unchanged sentences

(in thousands, except for share data)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Residential mortgage loans - at fair value $ 439,460 $ 183,064

5 unchanged sentences

Principal and interest receivable 9,823 8,141

Unrealized appreciation on TBAs and interest rate futures contracts - at fair value 1,651 —

TBA derivatives and interest rate futures derivatives - at fair value 1,421 1,515

Other assets 36,941 36,918

4 unchanged sentences

Securities sold under agreements to repurchase 148,467 50,555

Senior unsecured notes 47,616 —

Unrealized depreciation on TBAs and interest rate futures contracts - at fair value — 1,334

Interest rate futures derivatives - at fair value 947 —

Due to broker 302,619 201,994

Senior unsecured notes 47,865 47,740

Accrued expenses 2,539 2,291

6 unchanged sentences

Common stock, $ 0.01 par value.

As of September 30, 2024:

As of March 31, 2025:

350,000,000 shares authorized, 23,500,175 shares issued and outstanding.

10 unchanged sentences

(in thousands, except for share and per share data)

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Three Months Ended

March 31, 2025 March 31, 2024

INTEREST INCOME, NET

8 unchanged sentences

Operating expenses incurred with affiliate 416 515

Due diligence and transaction costs 254 115 663 136

Stock compensation 237 630

16 unchanged sentences

(in thousands)

Three Months Ended September 30, 2024

Three Months Ended March 31, 2025

Common Stock at Par Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Retained Earnings (Deficit) Total Stockholders’ Equity

Stockholder's equity as of June 30, 2024 $ 249 $ 478,328 $ ( 3,147 ) $ ( 219,624 ) $ 255,806

Issuance of common stock, net of expenses $ 2 $ 2,250 $ — $ — 2,252

Repurchase of shares of common stock $ ( 17 ) $ ( 19,933 ) $ — $ — ( 19,950 )

Dividends paid on common stock

$ — $ — $ — $ ( 7,524 ) ( 7,524 )

Stock compensation $ — $ 604 $ — $ — 604

Unrealized gain (loss) on RMBS and CMBS $ — $ — $ 2,706 $ — 2,706

Net income (loss) $ — $ — $ — $ 31,204 31,204

Stockholders' equity as of September 30, 2024 $ 234 $ 461,249 $ ( 441 ) $ ( 195,944 ) $ 265,098

Three Months Ended September 30, 2023

Common Stock at Par Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Deficit) Total Stockholders’ Equity

Stockholders’ equity as of June 30, 2023 $ 249 $ 476,127 $ ( 6,565 ) $ ( 237,135 ) $ 232,676

Dividends paid on common stock

Stockholders' equity as of December 31, 2024 $ 234 $ 461,057 $ ( 3,475 ) $ ( 218,849 ) $ 238,967

Dividends paid on common stock ($ 0.32 per share)

— — — ( 7,520 ) ( 7,520 )

Dividends accrued on performance shares — — — ( 40 ) ( 40 )

Stock compensation — 237 — — 237

Unrealized gain (loss) on RMBS and CMBS — — ( 695 ) — ( 695 )

Net income (loss) $ — $ — $ — $ 8,273 $ 8,273

Stockholders’ equity as of September 30, 2023 $ 249 $ 476,574 $ ( 8,172 ) $ ( 236,849 ) $ 231,802

The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of this statement.

Angel Oak Mortgage REIT, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(in thousands)

Nine Months Ended September 30, 2024

Net income — — — 20,531 20,531

Stockholders' equity as of March 31, 2025 $ 234 $ 461,294 $ ( 4,170 ) $ ( 205,878 ) $ 251,480

Three Months Ended March 31, 2024

Common Stock at Par Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Deficit) Total Stockholders’ Equity

Stockholders’ equity as of December 31, 2023 $ 249 $ 477,068 $ ( 4,975 ) $ ( 216,236 ) $ 256,106

Issuance of common stock, net of expenses $ 2 $ 2,250 $ — $ — $ 2,252

Repurchase of shares of common stock $ ( 17 ) $ ( 19,933 ) $ — $ — $ ( 19,950 )

Dividends paid on common stock

Dividends paid on common stock ($ 0.32 per share)

— — — ( 7,989 ) ( 7,989 )

Non-cash equity compensation $ — $ 1,864 $ — $ — $ 1,864

Stock compensation — 630 — — 630

Unrealized gain (loss) on RMBS and CMBS

Net income (loss) $ — $ — $ — $ 43,806 $ 43,806

Stockholders’ equity as of September 30, 2024

— — 1,703 — 1,703

Nine Months Ended September 30, 2023

Common Stock at Par Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Deficit) Total Stockholders’ Equity

Stockholders’ equity as of December 31, 2022 $ 249 $ 475,379 $ ( 21,127 ) $ ( 218,022 ) 236,479

Dividends paid on common stock

— — — ( 23,942 ) ( 23,942 )

Non-cash equity compensation — 1,195 — — $ 1,195

Unrealized gain (loss) on RMBS and CMBS — — 12,955 — 12,955

Net income (loss) — — — $ 5,115 5,115

Stockholders’ equity as of September 30, 2023 $ 249 $ 476,574 $ ( 8,172 ) $ ( 236,849 ) $ 231,802

Net income — — — 12,874 12,874

Stockholders’ equity as of March 31, 2024 $ 249 $ 477,698 $ ( 3,272 ) $ ( 211,351 ) $ 263,324

The accompanying Notes to the Condensed Consolidated Financial Statements are an integral part of this statement.

2 unchanged sentences

(in thousands)

Nine Months Ended

September 30, 2024 September 30, 2023

Three Months Ended

March 31, 2025 March 31, 2024

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) $ 20,531 $ 12,874

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Net realized (gain) loss on mortgage loans, derivative contracts, RMBS, and CMBS 3,182 1,422

5 unchanged sentences

Treasury securities ( 38 ) ( 224 )

Non-cash equity compensation 1,864 1,195

Stock compensation 237 630

Net change in:

1 unchanged sentence

Purchases of residential mortgage loans from non-affiliates ( 182,291 ) ( 12,283 )

Sale of residential mortgage loans 3,118 —

Sale of residential mortgage loans into affiliate’s securitization trust — 45,994

1 unchanged sentence

Principal payments on residential mortgage loans in securitization trusts 43,211 22,794

Margin received from interest rate futures contracts and TBAs 4,618 12,602

Margin received from (paid on) interest rate futures contracts and TBAs ( 309 ) 3,855

Principal and interest receivable on residential mortgage loans ( 1,682 ) ( 3,093 )

10 unchanged sentences

(in thousands)

Nine Months Ended

September 30, 2024 September 30, 2023

CASH FLOWS FROM INVESTING ACTIVITIES

1 unchanged sentence

Purchases of investments in RMBS, trading ( 203,181 ) ( 392,639 )

Sale of investments in RMBS, available for sale — 1,006,196

Sale of investments in RMBS, trading 201,994 392,362

Purchase of investments in U.S.

Purchase of investment in U.S.

Treasury securities ( 74,939 ) ( 149,741 )

3 unchanged sentences

Treasury securities — 150,000

Sale of commercial mortgage loans to third parties — 4,326

Principal payments on commercial mortgage loans 6 12

2 unchanged sentences

Dividends paid to common stockholders ( 7,520 ) ( 7,989 )

Repurchase of common stock ( 19,950 ) —

Proceeds from issuances of common stock, net of expenses 2,252 —

Proceeds from securitization 274,793 —

Principal payments on non-recourse securitization obligation ( 43,211 ) ( 22,794 )

Cash paid for debt issuance costs — ( 125 )

Proceeds from non-recourse securitization obligations — 233,319

Net proceeds from (repurchases of) securities sold under agreements to repurchase

97,912 ( 163 )

Net proceeds from issuance of senior notes 48,425 —

Net proceeds from (payments on) notes payable 231,011 ( 6,608 )

12 unchanged sentences

Angel Oak Mortgage REIT, Inc.

(together with its subsidiaries the “Company”, “we” or “our”) is a real estate finance company focused on acquiring and investing in first lien non-qualified residential mortgage (“non-QM”) loans and other mortgage‑related assets in the U.S.

(together with its subsidiaries the “Company,” “we,” “our” or “us”) is a real estate finance company focused on acquiring and investing in first 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 first lien non‑QM loans that are primarily made to higher‑quality non‑QM loan borrowers and primarily 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”), which currently operates primarily through a wholesale channel and has a national origination footprint.

The Company’s strategy is to make credit-sensitive investments primarily in newly-originated first lien non‑QM loans that are primarily made to higher‑quality non‑QM loan borrowers and substantially 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”).

The Company may also invest in other residential mortgage loans, residential mortgage‑backed securities (“RMBS”), and other mortgage‑related assets.

2 unchanged sentences

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

2 unchanged sentences

The Company’s Manager and REIT status

The Company is externally managed and advised by Falcons I, LLC (the “Manager”), a Securities and Exchange Commission-registered investment adviser and an affiliate of Angel Oak Capital Advisors, LLC (“Angel Oak Capital”).

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 Advisors, LLC (“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.

12 unchanged sentences

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

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

Reclassifications

Certain comparative period amounts in the condensed consolidated financial statements have been reclassified for consistency with current period presentation.

These reclassifications had no effect on the reported results of operations.

Specifically, certain cash flows previously presented as cash flows from operating activities on the condensed consolidated statements of cash flows for the nine months-ended September 30, 2023, have been reclassified to cash flows from investing activities as Purchases of investments in majority-owned affiliates.

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 condensed consolidated financial statements when adopted or had a significant impact on the Company's condensed consolidated financial statements upon adoption.

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 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.

Summary of Significant Accounting Policies

7 unchanged sentences

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 loan securitization transactions for which the Company is the primary beneficiary currently outstanding as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

The following table summarizes the key details of the Company’s loan securitization transactions for which the Company is the primary beneficiary currently outstanding as of March 31, 2025 and December 31, 2024:

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2025

December 31, 2024

($ in thousands)

1 unchanged sentence

Fair value adjustment for residential mortgage loans in securitization trusts ( 65,910 ) ( 84,316 )

( 59,815 ) ( 113,896 )

Residential mortgage loans in securitization trusts, at fair value $ 1,672,189 $ 1,696,995

$ 1,452,907 $ 1,221,067

Outstanding amount of Non-recourse securitization obligation, at amortized cost $ 1,587,805 $ 1,630,083

Fair value adjustment for the portion of Non-recourse securitization obligation, at fair value option ( 31,730 ) ( 36,471 )

Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts $ 1,353,758 $ 1,169,155

Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts at fair value $ 1,556,075 $ 1,593,612

Weighted average fixed rate for Non-recourse securitization obligation issued 3.85 % 3.86 %

For the period ended:

September 30, 2024 December 31, 2023

March 31, 2025

December 31, 2024

($ in thousands)

Aggregate unpaid principal balance of residential whole loans sold, at deal date $ 2,326,980 $ 2,326,980

$ 2,010,214 $ 1,710,381

Face amount of Non-recourse securitization obligation issued by the VIE and purchased by third-party investors, at deal date 2,194,774 2,194,774

1,893,847 1,619,051

Face amount of Senior Support Certificates received by the Company, at deal date 132,206 132,206

Aggregate cash received, at deal date 273,266 273,266

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

During the three months ended September 30, 2024, the Company did not issue and retain bonds on our consolidated balance sheets for any securitization transaction for which the Company was the primary beneficiary.

For the nine months ended September 30, 2024 the Company and its affiliates issued and sold bonds with a current face value of $ 274.8 million to third-party investors for proceeds of $ 274.8 million, before offering costs and accrued interest.

The sold bonds are included in “Non-recourse securitization obligations, collateralized by residential mortgage loans in securitization trusts” on the Company’s condensed consolidated balance sheets.

As of September 30, 2024 and December 31, 2023, as a result of the transactions described above, securitized loans with outstanding principal balance of approximately $ 1.5 billion and $ 1.3 billion are included in “Residential mortgage loans in securitization trusts” on the Company’s condensed consolidated balance sheets, respectively.

As of September 30, 2024 and December 31, 2023, the aggregate carrying value of sold bonds issued by consolidated VIEs was $ 1.4 billion and $ 1.2 billion, respectively.

These sold bonds are disclosed as “Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts” on the Company’s condensed consolidated balance sheets.

During the three months ended March 31, 2025, the Company had no securitization transactions.

As of March 31, 2025 and December 31, 2024, as a result of the transactions described above, securitized loans with outstanding principal balance of approximately $ 1.7 billion and $ 1.8 billion are included in “Residential mortgage loans in securitization trusts” on the Company’s condensed consolidated balance sheets, respectively.

As of March 31, 2025 and December 31, 2024, the aggregate carrying value of bonds issued by consolidated VIEs was $ 1.6 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 condensed 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.

9 unchanged sentences

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.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

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.

1 unchanged sentence

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 we are not the primary beneficiary were classified as “available for sale” upon receipt and are included in “RMBS - at fair value” and “Other Assets” on the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, 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 4 — Investment Securities , for the fair value of AOMT securities held by the Company, and Note 13 - Other Assets , for investments in majority-owned affiliates (“MOAs”), as of September 30, 2024 and December 31, 2023 that were retained by the Company as a result of these securitization transactions.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

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 condensed consolidated balance sheets as of March 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 4 — Investment Securities , for the fair value of Angel Oak Mortgage Trust (“AOMT”) securities held by the Company, and Note 13 - Other Assets , for investments in majority-owned affiliates (“MOAs”), as of March 31, 2025 and December 31, 2024 that were retained by the Company as a result of these securitization transactions.

Residential Mortgage Loans

Residential mortgage loans are measured at fair value.

The following table sets forth the cost, unpaid principal balance, net premium on mortgage loans purchased, fair value, weighted average interest rate, and weighted average remaining contractual maturity of the Company’s residential mortgage loan portfolio as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

($ in thousands)

8 unchanged sentences

See Note 5 — Financing .

The following table sets forth data regarding the number of consumer mortgage loans secured by residential real property ninety (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 September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

The following table sets forth data regarding the number of residential mortgage loans secured by residential real property ninety (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 March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

($ in thousands)

5 unchanged sentences

Unpaid principal balance of loans in foreclosure $ — $ —

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

Investment Securities

As of September 30, 2024, investment securities were comprised of:

As of March 31, 2025, investment securities were comprised of:

(i) non‑agency RMBS (“AOMT RMBS”) and (ii) Freddie Mac and Fannie Mae whole pool agency RMBS (“Whole Pool Agency RMBS”, and together with AOMT RMBS, “RMBS”), and (iii) U.S.

Treasury securities.

Treasury securities held by the Company as of September 30, 2024 subsequently matured on October 3, 2024.

The following table sets forth a summary of RMBS at cost as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

Treasury securities held by the Company as of March 31, 2025 subsequently matured in April 2025.

The following table sets forth a summary of RMBS at cost as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

(in thousands)

1 unchanged sentence

Whole Pool Agency RMBS $ 302,619 $ 201,994

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The following tables sets forth certain information about the Company’s investments in RMBS at fair value as of September 30, 2024 and December 31, 2023:

Real Estate Securities at Fair Value Securities Sold Under Agreements to Repurchase Allocated Capital

September 30, 2024:

The following table sets forth certain information about the Company’s investments in RMBS at fair value as of March 31, 2025:

Real Estate Securities at Fair Value Repurchase Debt Allocated Capital

March 31, 2025:

(in thousands)

9 unchanged sentences

Freddie Mac 174,886 — 174,886

Total Whole Pool Agency RMBS

$ 194,364 $ — $ 194,364

Whole Pool Total Agency RMBS $ 301,062 $ — $ 301,062

$ 398,272 $ ( 73,903 ) $ 324,369

(1) AOMT RMBS held as of September 30, 2024 included both retained tranches of AOMT securitizations in which the Company participated and additional AOMT securities purchased in secondary market transactions.

(1) AOMT RMBS held as of March 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 $ 143.5 million, are not reflected in the condensed 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 September 30, 2024 were purchased from a broker to whom the Company owes approximately $ 195 million, payable upon the settlement date of the trade.

These bonds, with a fair value of $ 160.8 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 condensed consolidated balance sheets.

(3) The whole pool RMBS presented as of March 31, 2025 were purchased from a broker to whom the Company owes approximately $ 302.6 million, payable upon the settlement date of the trade.

See Note 6 - Due to Broker .

There was no margin collateral required as of September 30, 2024.

December 31, 2023 Real Estate Securities at Fair Value Securities Sold Under Agreements to Repurchase Allocated Capital

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The following table sets forth certain information about the Company’s investments in RMBS at fair value as of December 31, 2024:

December 31, 2024 Real Estate Securities at Fair Value Repurchase Debt Allocated Capital

(in thousands)

9 unchanged sentences

Freddie Mac 39,574 — 39,574

Total Whole Pool Agency RMBS

$ 392,362 $ — $ 392,362

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.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

(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 $ 124.1 million, are not reflected in the condensed 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.

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.

1 unchanged sentence

The following table sets forth certain information about the Company’s investments in U.S.

Treasury securities as of September 30, 2024 and December 31, 2023:

Date Face Value Unamortized Discount, net Amortized Cost Unrealized Gain/(Loss)

Fair Value Net Effective Yield

Treasury securities as of March 31, 2025 and December 31, 2024:

Date Face Value Unamortized Discount, net Amortized Cost Unrealized Gain/(Loss) Fair Value Net Effective Yield

($ in thousands)

September 30, 2024 $ 50,000 $ 16 $ 49,984 $ ( 13 ) $ 49,971 3.89 %

March 31, 2025 $ 75,000 $ 23 $ 74,977 $ ( 18 ) $ 74,959 3.68 %

December 31, 2024 $ — $ — $ — $ — $ — — %

Notes Payable

The Company has the ability to finance residential and commercial whole loans, utilizing lines of credit (notes payable) from various counterparties, as further described below.

2 unchanged sentences

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 September 30, 2024 or December 31, 2023.

The following table sets forth the details of the Company’s notes payable and drawn amounts for whole loan purchases as of September 30, 2024 and December 31, 2023:

There was no margin collateral required as of March 31, 2025 or December 31, 2024.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The following table sets forth the details of all the lines of credit available to the Company for whole loan purchases as of March 31, 2025 and December 31, 2024, and the drawn amounts as of March 31, 2025 and December 31, 2024:

Spread Drawn Amount

Note Payable Base Interest Rate September 30, 2024 December 31, 2023

Note Payable Base Interest Rate March 31, 2025 December 31, 2024

($ in thousands)

8 unchanged sentences

89,385 13,637

Institutional Investors A and B (4)

1 month Term SOFR 3.50 % N/A —

Regional Bank 1 (5)

1 month SOFR 2.50 % - 3.50 %

Total $ 360,470 $ 129,459

(1) On September 25, 2024, this financing facility was extended through March 25, 2025 in accordance with the terms of the agreement, which contemplates six-month renewals.

(2) On March 28, 2024 the amended and restated Master Repurchase Agreement was terminated and replaced with a new $ 250 million Master Repurchase Agreement which has a termination date of March 27, 2026.

On October 25, 2024, this facility was amended, reducing the interest rate pricing spread to a range from 1.75 % to 3.35 %, based on loan status, dwell time and other factors.

Prior to this extension the interest rate pricing spread ranged from 2.10 % to 3.35 % (See Note 16 — Subsequent Events ).

(3) On November 1, 2024, this facility was amended to (i) reduce the interest rate pricing spread to a range from 1.90 % to 4.75 %, based on loan status, dwell time and other factors, (ii) eliminate the 20 basis point index spread adjustment, and (iii) extend the facility’s termination date to November 1, 2025.

(See note 16 — Subsequent Events ).

(4) These master repurchase agreements expired by their terms on January 4, 2023.

(5) This agreement expired by its terms on March 16, 2023.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The following table sets forth the total unused borrowing capacity of each financing line as of September 30, 2024:

(1) On March 25, 2025, this financing facility was extended through September 25, 2025 in accordance with the terms of the agreement, which contemplates six-month renewals.

In addition, the interest rate pricing spread was reduced to a range from 1.65 % to 2.10 %;

prior to this extension, the interest rate pricing spread was a range from 1.75 % 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 is extended through March 27, 2026.

On October 25, 2024, the facility was amended to, among other changes, reduced the pricing spread to a range from 1.75 % and 3.35 %;

prior to this amendment, the interest rate pricing spread was a range from 2.10 % and 3.45 %.

(3) On November 1, 2024, the facility’s termination date was extended to November 1, 2025.

In addition, the base interest rate spread was reduced to a range from 1.90 % to 4.75 % and the index spread adjustment of 20 basis points was eliminated;

prior to this extension, the base interest rate pricing spread was a range from 2.00 % to 4.50 %.

The following table sets forth the total unused borrowing capacity of each financing line as of March 31, 2025:

Note Payable Borrowing Capacity Balance Outstanding Available Financing

1 unchanged sentence

Multinational Bank 1 $ 600,000 $ 232,431 $ 367,569

$ 600,000 $ 292,060 $ 307,940

Global Investment Bank 2 250,000 38,654 211,346

250,000 — 250,000

Global Investment Bank 3 200,000 89,385 110,615

200,000 40,982 159,018

Total $ 1,050,000 $ 360,470 $ 689,530

2 unchanged sentences

On July 25, 2024, the Company closed an underwritten public offering and sale of, and issued, $ 50.0 million in aggregate principal amount of its 9.500 % Senior Notes due 2029 (the “Notes”).

The Notes bear interest at a rate of 9.500 % per annum, payable quarterly in arrears on January 30, April 30, July 30 and October 30 of each year, commencing on October 30, 2024.

The Notes bear interest at a rate of 9.500 % per annum, payable quarterly in arrears on January 30, April 30, July 30 and October 30 of each year.

The Notes will mature on July 30, 2029, unless earlier redeemed or repurchased by the Company and are held at amortized cost.

3 unchanged sentences

The Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Operating Partnership, including the due and punctual payment of principal of, premium, if any, and interest on the Notes, whether at stated maturity, upon acceleration, call for redemption or otherwise.

At September 30, 2024, the outstanding principal amount of these notes was $ 50 million and the accrued interest payable on the Notes was $ 0.9 million.

At September 30, 2024, the unamortized deferred debt issuance cost was $ 1.5 million, and the net interest expense was $ 1.0 million.

At March 31, 2025, the outstanding principal amount of these Notes was $ 50.0 million and the accrued interest payable on the Notes was $ 0.8 million.

At March 31, 2025, the unamortized deferred debt issuance cost was $ 1.3 million, and the net interest expense

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

recognized in the quarter ended March 31, 2025 was $ 1.3 million.

The unamortized deferred debt issuance costs will be amortized until maturity, which will be no later than July 30, 2029.

At December 31, 2024, the outstanding principal amount of these Notes was $ 50.0 million and the accrued interest payable on the Notes was $ 0.8 million.

At December 31, 2024, the unamortized deferred debt issuance cost was $ 1.4 million, and the net interest expense recognized in 2024 was $ 2.2 million.

The unamortized deferred debt issuance costs will be amortized until maturity, which will be no later than July 30, 2029.

Due to Broker

The “Due to broker” account on the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively, in the amounts of $ 195 million and $ 392 million relates to the purchase of Whole Pool Agency RMBS at quarter-end in the third and fourth quarters of 2024 and 2023, respectively.

The “Due to broker” account on the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively, in the amounts of $ 302.6 million and $ 202.0 million relates to the purchase of Whole Pool Agency RMBS at quarter-end in the first and fourth quarters of 2025 and 2024, respectively.

Purchases are accounted for on a trade date basis, and, at times, there may be a timing difference between accounting periods for the trade date and the settlement date of a trade.

The trade dates of these purchases were prior to the applicable quarter-end dates.

These trades settled on October 15, 2024 and January 16, 2024, respectively, at which time these assets were simultaneously sold.

The purchase transactions of these Whole Pool Agency RMBS are excluded from the condensed consolidated statements of cash flows until settled.

These trades settled during April 2025 and January 2025, respectively, at which time these assets were simultaneously sold.

The purchase transactions of these Whole Pool Agency RMBS are excluded from the condensed consolidated statements of cash flows until settled as they are noncash transactions.

Securities Sold Under Agreements to Repurchase

1 unchanged sentence

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 $ 0.3 million as of September 30, 2024 and December 31, 2023, respectively.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The following table summarizes certain characteristics of the Company’s repurchase agreements as of September 30, 2024 and December 31, 2023:

September 30, 2024

Restricted cash of margin collateral for securities sold under agreements to repurchase was $ 1.2 million and $ 1.2 million as of March 31, 2025 and December 31, 2024, respectively.

The following table summarizes certain characteristics of the Company’s repurchase agreements as of March 31, 2025 and December 31, 2024:

March 31, 2025

Repurchase Agreements Amount Outstanding Weighted Average Interest Rate Weighted Average Remaining Maturity (Days)

7 unchanged sentences

Treasury securities $ — — % 0

$ 149,013 5.57 % 10

AOMT RMBS (1)

1 unchanged sentence

Total $ 50,555 5.76 % 19

(1) A portion of repurchase debt outstanding as of both September 30, 2024 and December 31, 2023 includes borrowings against retained bonds received from on-balance sheet securitizations (i.e., consolidated VIEs).

(1) A portion of repurchase debt outstanding as of both March 31, 2025 and December 31, 2024 includes borrowings against retained bonds received from on-balance sheet securitizations (i.e., consolidated VIEs).

See Note 4 - Investment Securities.

4 unchanged sentences

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 September 30, 2024 and December 31, 2023 included both To-Be-Announced (“TBA”) securities and interest rate futures contracts.

Restricted cash relating to interest rate futures margin collateral in interest rate futures accounts under the Company’s sole control as of September 30, 2024 and December 31, 2023 included $ 2.3 million and $ 2.5 million, respectively.

There was no TBA margin collateral required as of either September 30, 2024 or December 31, 2023.

For the three and nine months ended September 30, 2024, we recognized income tax expense and a corresponding liability related to income from our TBAs.

Derivative instruments as of March 31, 2025 and December 31, 2024 included interest rate futures contracts.

Restricted cash relating to interest rate futures margin collateral in interest rate

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

futures accounts under the Company’s sole control as of March 31, 2025 and December 31, 2024 included $ 3.6 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.

1 unchanged sentence

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 TBAs in order to mitigate its interest rate risk on certain specified mortgage-backed securities.

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.

3 unchanged sentences

The Company considers the notional amounts, categorized by primary underlying risk, to be representative of the volume of its derivative activities.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The following table sets forth the derivative instruments presented on the condensed consolidated balance sheets and notional amounts as of September 30, 2024 and December 31, 2023:

The following table sets forth the derivative instruments presented on the condensed consolidated balance sheets and notional amounts as of March 31, 2025 and December 31, 2024:

Notional Amounts

1 unchanged sentence

($ in thousands)

September 30, 2024 Interest rate futures 2,404 $ 1,392 $ — $ — $ 240,400

September 30, 2024 TBAs N/A $ 259 $ — $ — $ 203,400

March 31, 2025 Interest rate futures 3,605 $ — $ 947 $ — $ 360,500

March 31, 2025 TBAs N/A $ 1,421 $ — $ — $ 307,200

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 condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2024 and September 30, 2023 are set forth as follows:

Derivatives Not Designated as Hedging Instruments Net Realized Gains (Losses) on Derivative Instruments Net Change in Unrealized Appreciation (Depreciation) on Derivative Instruments

(in thousands)

Three Months Ended September 30, 2024 Interest rate futures $ ( 4,461 ) $ 1,184

Three Months Ended September 30, 2024 TBAs $ 3,115 $ ( 1,235 )

Three Months Ended September 30, 2023 Interest rate futures $ 2,828 $ ( 364 )

Three Months Ended September 30, 2023 TBAs $ 7,421 $ 4,927

The gains and losses arising from these derivative instruments in the condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2025 and March 31, 2024 are set forth as follows:

Derivatives Not Designated as Hedging Instruments Net Realized Gains (Losses) on Derivative Instruments Net Change in Unrealized Appreciation (Depreciation) on Derivative Instruments

(in thousands)

Nine Months Ended September 30, 2024 Interest rate futures $ ( 622 ) $ 2,232

Nine Months Ended September 30, 2024 TBAs $ 5,238 $ 753

Nine Months Ended September 30, 2023 Interest rate futures $ 8,599 $ ( 2,416 )

Nine Months Ended September 30, 2023 TBAs $ 4,900 $ ( 5,379 )

Three Months Ended March 31, 2025 Interest rate futures $ ( 1,473 ) $ ( 1,935 )

Three Months Ended March 31, 2025 TBAs $ 1,163 $ 893

Three Months Ended March 31, 2024 Interest rate futures $ 3,549 $ 204

Three Months Ended March 31, 2024 TBAs $ 306 $ 241

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

Fair Value Measurements

7 unchanged sentences

Our assessment of the significance of a particular input requires judgment and considers factors specific to the asset or liability being measured.

As of September 30, 2024, our valuation policy and processes had not changed from those described in our consolidated financial statements for the year ended December 31, 2023 included in the Annual Report on Form 10-K.

As of March 31, 2025, our valuation policy and processes had not changed from those described in our consolidated financial statements for the year ended December 31, 2024 included in the Annual Report on Form 10-K.

Included in Note 10 — Fair Value Measurements to the Consolidated Financial Statements for the year ended December 31, 2024 included in the Annual Report on Form 10-K is a detailed description of our other financial instruments measured at fair value and their significant inputs, as well as the general classification of such instruments pursuant to the Level 1, Level 2, and Level 3 valuation hierarchy.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The fair value of cash, restricted cash, principal and interest receivable, other assets (excluding investments in MOAs), notes payable, securities sold under agreements 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.

1 unchanged sentence

The fair value of these assets and liabilities is disclosed further below in the section titled “ Assets and Liabilities Held at Amortized Cost - Fair Value Disclosure ”.

The following table sets forth information about the Company’s financial assets and liabilities measured at fair value as of September 30, 2024:

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The following table sets forth information about the Company’s financial assets and liabilities measured at fair value as of March 31, 2025:

Level 1 Level 2 Level 3 Total

8 unchanged sentences

Treasury Securities 74,959 — — 74,959

49,971 — — 49,971

Unrealized appreciation on TBAs 1,421 — — 1,421

Other Assets, at fair value (2)

— 10,965 — 10,965

Unrealized appreciation on futures contracts

1,392 — — 1,392

Unrealized appreciation on TBAs

Total assets, at fair value $ 76,380 $ 2,494,796 $ 26,090 $ 2,597,266

2 unchanged sentences

$ — $ 1,178,727 $ — $ 1,178,727

Unrealized depreciation on futures contracts 948 — — 948

Total liabilities, at fair value $ 948 $ 1,178,727 $ — $ 1,179,675

(1) AOMT RMBS held as of September 30, 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.

(1) AOMT RMBS held as of March 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.

(2) Includes Commercial Loans and AOMT commercial mortgage backed securities (“CMBS”) assets.

All AOMT CMBS held as of September 30, 2024 was comprised of a small-balance commercial loan securitization issuance in which the Company participated.

All AOMT CMBS held as of March 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 for the disclosure of the full debt at fair value.

Transfers from Level 2 to Level 3 were comprised of residential loans more than 90 days overdue (including those in foreclosure).

Transfers from Level 2 to Level 3 were comprised of residential loans more than 90 days overdue (including those in foreclosure) and commercial mortgage loans 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.

These transfers were not material.

These transfers were not deemed material.

We use third‑party valuation firms who utilize proprietary methodologies to value our residential and commercial loans.

4 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

The following table sets forth information regarding the Company’s significant Level 3 inputs as of September 30, 2024:

The following table sets forth information regarding the Company’s significant Level 3 inputs as of March 31, 2025:

Asset Fair Value Unobservable Input Range Average

11 unchanged sentences

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 in the Annual Report on Form 10-K, Note 10 — Fair Value Measurements 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 below.

As of September 30, 2024, the total amortized cost basis and fair value of our non-recourse securitization obligations was $ 1.38 billion and $ 1.29 billion, respectively, a difference of approximately $ 87.0 million (which includes AOMT 2022-1, AOMT 2022-4, AOMT 2023-4, and AOMT 2024-4, which are marked to fair value;

and AOMT 2021-4 and AOMT 2021-7, which are carried at amortized cost, as the fair value option was not elected at the time of the creation of these obligations).

As of March 31, 2025, the total amortized cost basis and fair value of our non-recourse securitization obligations was $ 1.59 billion and $ 1.49 billion, respectively, a difference of approximately $ 95.3 million (we have elected to hold our non-recourse securitization obligations at fair value, with the exception of 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 difference between the amortized cost and fair value solely attributable to AOMT 2021-4 and 2021-7 is approximately $ 63.6 million.

1 unchanged sentence

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, 2023, the total amortized cost basis and fair value of our non-recourse securitization obligations was $ 1.24 billion and $ 1.09 billion, respectively, a difference of approximately $ 156.4 million (which includes AOMT 2022-1, AOMT 2022-4, and AOMT 2023-4, which are marked to fair value;

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, AOMT 2023-4, AOMT 2024-4, and AOMT 2024-10, 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).

7 unchanged sentences

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 condensed consolidated financial statements.

The amortized cost and fair value of this investment as of September 30, 2024 was approximately $ 18.7 million and $ 17.0 million, respectively.

The amortized cost and fair value of this investment as of March 31, 2025 was approximately $ 20.8 million and $ 16.8 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.

11 unchanged sentences

Whole Pool Agency RMBS — 201,452 — 201,452

Treasury Securities.

149,927 — — 149,927

Unrealized depreciation on futures contracts 987 — — 987

Unrealized depreciation on TBAs 528 — — 528

Other Assets, at fair value (2)

4 unchanged sentences

$ — $ 1,524,828 $ — $ 1,524,828

Unrealized depreciation on futures contracts

( 840 ) — — ( 840 )

Unrealized depreciation on TBAs

( 494 ) — — ( 494 )

Total liabilities, at fair value $ — $ 1,524,828 $ — $ 1,524,828

(1) AOMT RMBS held as of December 31, 2023 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.

(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.

(2) Includes Commercial Loans and AOMT CMBS assets.

1 unchanged sentence

(3) Only the portion subject to fair value measurement, as adjusted for fair value, is presented above.

See below 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.

2 unchanged sentences

Transfers between Level 2 and Level 3 were immaterial for the year ended December 31, 2024.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

We use third‑party valuation firms who utilize proprietary methodologies to value our residential and commercial loans.

2 unchanged sentences

Accordingly, a significant increase or decrease in any of these inputs in isolation may result in a significantly lower or higher fair value measurement.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The following table sets forth information regarding the Company’s significant Level 3 inputs as of December 31, 2024:

Asset Fair Value Unobservable Input Range Average

Residential mortgage loans, at fair value $ 6,036 Prepayment rate (annual CPR) 6.86 % - 19.93 %

Default rate 12.69 % - 13.64 %

Loss severity ( 25.00 )% - 40.13 %

Expected remaining life 0.67 - 4.09 years

Residential mortgage loans in securitization trust, at fair value $ 32,074 Prepayment rate (annual CPR) 3.64 % - 19.83 %

4 unchanged sentences

Residential Mortgage Loan Purchases

The Company has residential loan purchase agreements with various affiliates of the Company.

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 released basis.

The following table sets forth certain financial information pertaining to whole loan activity purchased from affiliates during the period and year ended as of September 30, 2024 and December 31, 2023:

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 period and year ended as of March 31, 2025 and December 31, 2024, respectively:

As of and for the Year-to-Date/Year Ended:

Amount of Loans Purchased from Affiliates during the Year-to-Date/Year Ended (in thousands)

Number of Loans Purchased from Affiliates during the Year-to-Date/Year Ended

Number of Loans Purchased from Affiliates, Owned and Held as of Year-to-Date/Year Ended (1) :

September 30, 2024 $ 182,200 405 380

Amount of Loans Purchased from Affiliates during the Year-to-Date/Year Number of Loans Purchased from Affiliates during the Year-to-Date/Year Number of Loans Purchased from Affiliates, Owned and Held as of Year-to-Date/Year End (1) :

($ in thousands)

March 31, 2025 $ 76,697 177 248

December 31, 2024 $ 255,368 558 83

4 unchanged sentences

Management Fee

The Company’s management agreement, effective as of June 21, 2021 and amended and restated on May 1, 2024, by and among the Company, the Operating Partnership, and the Manager (as amended and restated, the “Management Agreement”), provides that the Company will pay the Manager, in arrears, on a quarterly basis, an aggregate fixed management fee equal to 1.5 % per annum of the Company’s Equity (as is defined in the Management Agreement).

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

The Company and the Operating Partnership have entered into an Amended and Restated Management Agreement with the Manager, dated as of May 1, 2024 (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 (as defined in the Management Agreement) in the previous 12-month period, and (B) 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 and no expense has been recognized in the Company’s financial statements.

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) 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 to an affiliate of the Manager.

Accrued expenses payable to affiliate and operating expenses incurred with affiliate are substantially comprised of payroll reimbursements .

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

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 September 30, 2024, the Company was not aware of any legal claims that could materially impact its financial condition.

As of September 30, 2024, the Company had no unfunded commitments.

As of March 31, 2025, the Company was not aware of any legal claims that could materially impact its financial condition.

As of March 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 September 30, 2024, the Company has a total purchase commitments of $ 93.3 million related to both Angel Oak Mortgage Lending and third parties.

As of March 31, 2025, the Company had total purchase commitments of $ 108.6 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 had total purchase commitments of $ 152.6 million related to both Angel Oak Mortgage Lending and third parties.

Accumulated Other Comprehensive Income/(Loss)

The following table sets forth the net unrealized gain/(loss) on available-for-sale (“AFS”) securities for the three and nine months ended September 30, 2024 and 2023, which is the sole component of the changes in the Company’s Accumulated Other Comprehensive Income/(Loss) (“AOCI”) for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

(in thousands)

AOCI balance, beginning of period $ ( 3,147 ) $ ( 6,565 )

Net unrealized gain/(loss) on AFS securities 2,706 ( 1,607 )

AOCI balance, end of period $ ( 441 ) $ ( 8,172 )

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

The following table sets forth the net unrealized gain/(loss) on available-for-sale (“AFS”) securities for the three months ended March 31, 2025 and 2024, which is the sole component of the changes in the Company’s Accumulated Other Comprehensive Income/(Loss) (“AOCI”) for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

(in thousands)

4 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

The following table sets forth the detail of other assets included in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

The following table sets forth the detail of other assets included in the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

($ in thousands)

Investments in Majority-Owned Affiliates $ 20,828 $ 20,680

$ 18,720 $ 16,232

Commercial Mortgage Loans, at fair value

CMBS, at fair value

Commercial Mortgage Loans 5,207 5,214

CMBS 5,757 5,593

Deferred tax asset 3,457 3,457

3 unchanged sentences

Investments in Majority-Owned Affiliates (“MOA”)

In 2023 and the first three quarters of 2024, the Company participated in securitization transactions AOMT 2023-1, AOMT 2023-5, AOMT 2023-7, AOMT 2024-3, and AOMT 2024-6, which involved MOAs in which the Company received investments of 41.21 %, 34.42 %, 10.35 %, 10.98 %, and 4.51 % respectively, in each case proportional to its share of the unpaid principal balance of the residential whole loans contributed to the securitizations.

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.

The investment will be tested for impairment at least annually utilizing undiscounted cash flows of the underlying bonds.

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 .

1 unchanged sentence

Commercial mortgage loans are measured at fair value.

As of September 30, 2024 and December 31, 2023, the cost and unpaid principal balance of the assets was $ 5.6 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 11 years, as of September 30, 2024.

There were no commercial mortgage loans more than ninety (90) days past due or in foreclosure as of September 30, 2024 or December 31, 2023.

As of March 31, 2025 and December 31, 2024, the cost and unpaid principal balance of the assets was $ 5.6 million and $ 5.6 million, with a fair value of $ 5.2 million and $ 5.2 million, respectively.

The weighted average interest rate was 6.23 % with a weighted average maturity of 11 years, as of March 31, 2025.

There were no commercial mortgage loans more than ninety (90) days past due or in foreclosure as of March 31, 2025 or December 31, 2024.

Commercial Mortgage Backed Securities

CMBS are held at fair value.

As of September 30, 2024 and December 31, 2023, the cost of these assets were $ 6.1 million and $ 6.3 million, with a fair value of $ 5.9 million and $ 6.6 million, respectively.

There was no repurchase debt held against these assets at September 30, 2024 or December 31, 2023.

As of September 30, 2024, we had 6,973,959 shares of our common stock remaining available for sale from time to time in at-the-market equity offering program (the “ATM Program”).

These shares are registered with the SEC under our shelf registration statement.

During the three-months and nine-months ended September 30, 2024, the Company issued and sold 188,456 shares of common stock through the ATM Program for proceeds of $ 2.3 million, net of $ 45 thousand in commissions and fees.

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 Notes.

Earnings per Share (“EPS”)

In the calculations of basic and diluted earnings per common share for the three and nine months ended September 30, 2024 and 2023, 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.

For the three and nine month periods ended September 30, 2024, there were approximately 120,000 dilutive outstanding restricted stock awards and approximately 200,000 dilutive performance-based restricted stock units.

To date we have expensed $ 0.7 million related to the performance-based restricted stock units based on current market conditions.

As of March 31, 2025 and December 31, 2024, the cost of these assets were $ 6.0 million and $ 6.1 million, with a fair value of $ 5.8 million and $ 5.6 million, respectively.

There was no repurchase debt held against these assets at March 31, 2025 or December 31, 2024.

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

For the three and nine month periods ended September 30, 2023, there were 186,645 anti-dilutive outstanding restricted stock awards and 95,832 performance shares, although the market-based “total stockholder return” conditions for performance share units had not been achieved and thus these units were not 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 three months ended September 30, 2024 and 2023:

September 30, 2024 September 30, 2023

(in thousands, except share and per share data)

Basic Earnings (Loss) per Common Share:

Net income (loss) to common stockholders $ 31,204 $ 8,273

Dividends allocated to participating securities ( 38 ) ( 60 )

Net income (loss) to common stockholders - basic $ 31,166 $ 8,213

Basic weighted average common shares outstanding 23,757,039 24,768,921

Basic earnings (loss) per common share $ 1.31 $ 0.33

Diluted Earnings (Loss) per Common Share:

Net income (loss) to common stockholders - basic $ 31,204 $ 8,273

Dividends allocated to participating securities ( 38 ) ( 60 )

Net income (loss) to common stockholders - diluted $ 31,166 $ 8,213

Basic weighted average common shares outstanding 23,757,039 24,768,921

Net effect of dilutive equity awards 322,208 188,747

Diluted weighted average common shares outstanding 24,079,247 24,957,668

Diluted earnings (loss) per common share $ 1.29 $ 0.33

The following table sets forth the calculation of basic and diluted earnings per share for the nine months ended September 30, 2024 and 2023:

September 30, 2024 September 30, 2023

Equity and Earnings per Share (“EPS”)

In the calculations of basic and diluted earnings per common share for the three months ended March 31, 2025 and 2024, the Company included participating securities, which are certain equity awards that have non-forfeitable dividend participation rights.

The following table sets forth the calculation of basic and diluted earnings per share for the three months ended March 31, 2025 and 2024:

March 31, 2025 March 31, 2024

(in thousands, except share and per share data)

13 unchanged sentences

Diluted earnings (loss) per common share $ 0.87 $ 0.51

Angel Oak Mortgage REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

Subsequent Events

On October 16, 2024, the Company securitized residential mortgage loans with a scheduled unpaid principal balance of approximately $ 316.8 million in the issuance of AOMT 2024-10.

Similar to certain previous securitization transactions, the Company will consolidate the VIE used to facilitate this transaction.

See Note 2 — 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.

On October 25, 2024, the Company amended its loan financing facility with Global Investment Bank 2 to, among other changes, reduce the interest rate pricing spread to a range from 1.75 % to 3.35 %, based on collateral type, loan status, dwell time and other factors.

See Note 5 — Financing for a further discussion related to this financing facility.

On November 1, 2024, the Company amended its loan financing facility with Global Investment Bank 3 to, among other changes, (i) extend the termination date to November 1, 2025;

(ii) reduce the interest rate pricing spread to a range from 1.90 % to 4.75 % based on collateral type, loan status, dwell time and other factors;

and (iii) eliminate the 20 basis point index spread adjustment.

See Note 5 — Financing for a further discussion related to this financing facility.

On November 6, 2024, the Company declared a dividend of $ 0.32 per share of common stock, to be paid on November 27, 2024 to common stockholders of record as of November 19, 2024.

On April 11, 2025 the Company securitized residential mortgage loans with an unpaid principal balance of $ 284.3 million in the issuance of AOMT 2025-4.

On May 5, 2025, the Company declared a dividend of $ 0.32 per share of common stock, to be paid on May 30, 2025 to common stockholders of record as of May 22, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements