Atlanta, Georgia – Angel Oak Mortgage REIT, Inc. held its fourth-quarter 2023 earnings conference call on March 4, 2024. The call featured key executives like Chief Executive Officer and President, Sreeni Prabhu, and Chief Financial Officer and Treasurer, Brandon Filson, discussing the company’s financial results and strategic decisions over the past year. During the call, they highlighted the company’s focus on reducing balance sheet risk, improving liquidity, and expanding net interest income amid a challenging economic backdrop.

Prabhu emphasized the importance of strategic decision-making in navigating the economic uncertainties of 2023. The company reported improvements in its net interest margin, showcasing the success of tactical moves made over the past 18 months to strengthen the company’s financial position for sustainable growth. As interest rates rose to the highest level in over two decades, Angel Oak Mortgage REIT was able to position itself for continued growth by increasing the earnings power of its portfolio.

The company’s financial performance for the fourth quarter of 2023 included a GAAP net income of $28.6 million and distributable earnings of negative $6.5 million. Despite these figures, there was an 11% improvement in net interest income over the previous quarter and a 28% improvement over the second quarter. The company also highlighted its focus on optimizing its cost structure and reducing operating expenses while seeking opportunities for savings.

Angel Oak Mortgage REIT’s balance sheet as of December 31, 2023, showed $41.6 million in cash and a recourse debt to equity ratio of 1.9x. The company reported residential whole loans at a fair value of $380 million and participation in securitizations totaling over $660 million across four deals during the year. Moving forward, the company plans to maintain momentum and further drive net interest income growth by redeploying capital into high-yielding assets.

Prabhu also addressed the company’s underwriting strategies and credit risk management, highlighting the continued focus on maintaining underwriting standards while adapting to changing market conditions. The company aims to continue its strategic approach to credit selection and loan purchases to optimize the return on equity of its portfolio.

Overall, the call emphasized Angel Oak Mortgage REIT’s commitment to delivering stable returns to its shareholders while navigating the complexities of the current economic landscape. The company looks forward to harnessing its operational strengths and strategic initiatives to drive further growth in the future.