Q - AG Mortgage Investment Trust,
For the period ended Jun 30, 2025. Filed Aug 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 5, 2025
MITT$4.45-10.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001514281-25-000062
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0001514281-25-000086
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 262 previous paragraphs and 300 current paragraphs.
197 unchanged; 55 reworded; 31 added; 10 removed; 0 previous and 17 current paragraphs rearranged.
Tables are not compared: 26 previous and 36 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
Second Quarter 2025 Executive Summary
Current report
•$10.39 Book Value per share;
Current report
•Subsequent to quarter end:
Current report
•On July 18, 2025, we paid off certain fixed-rate long-term financing arrangements which had an outstanding unpaid principal balance and accrued interest payable of $43.8 million. The financing was collateralized by certain of our retained interests in securitizations acquired from WMC. We pledged these assets under a recourse financing arrangement with mark-to-market margin calls with a balance of $82.9 million, providing us with net proceeds of $39.1 million.
Current report
•On July 29, 2025, we co-sponsored a rated Non-Agency securitization, in which Home Equity Loans with a total unpaid principal balance of $647.0 million were securitized.
Current report
Acquisition of AG Arc LLC
Current report
•On August 1, 2025, purchased an additional 21.4% interest in AG Arc LLC (“AG Arc”) from certain private funds managed by TPG Angelo Gordon. In connection with the acquisition, we issued 2,027,676 restricted shares of our common stock as consideration. Upon closing of the transaction on August 1, 2025 and giving effect to our acquisition of the additional 21.4% interest, we have an approximate 66.0% interest in AG Arc. Refer to “Item 5. Other Information” for additional information related to the transaction.
Current report
In the second quarter of 2025, financial markets generally delivered positive performance with equities rising modestly and bond prices increasing, particularly at the short end of the curve, though uncertainty around inflation, fiscal, and monetary policy persisted. The 2-year U.S. Treasury yield declined by 17 basis points to 3.72% and although the 10-year U.S. Treasury fluctuated, it ended the quarter relatively flat at 4.23%. Overall, the yield spread between the 2-year and 10-year U.S. Treasuries ended the quarter 51 basis points positive, steepening 19 basis points from the previous quarter end. Markets experienced a notable bout of volatility in April as tariff announcements by the U.S. presidential administration caused sharp declines in risk assets. The policy shift sparked a temporary risk-off environment, driving credit spreads wider and mark-to-market losses across corporate and structured credit portfolios. Although credit spreads tightened and asset prices partially recovered throughout the remainder of the quarter, geopolitical and trade policy risks continued to weigh on sentiment and forward visibility.
Current report
Throughout the second quarter of 2025, Federal Reserve Chair Jerome Powell emphasized a patient, data-dependent approach to monetary policy as inflation continued to moderate and labor market conditions gradually softened. The Federal Reserve acknowledged meaningful progress on inflation, with headline Consumer Price Index (“CPI”) declining to 2.7% and core CPI holding near 2.9% by June, however, components of inflation remained somewhat sticky, warranting caution. At the same time, the Federal Reserve observed certain signs of labor market cooling, with the unemployment rate at 4.2% and continuing weekly jobless claims remaining elevated. While the Federal Open Market Committee held the federal funds rate steady at 4.25% to
Current report
4.50% at its July 2025 meeting, they indicated openness to rate cuts later in the year, assuming continued disinflation and no major re-acceleration in growth, with the June Summary of Economic Projections indicating a median expectation for two rate cuts totaling 50 basis points in 2025.
Current report
The following table presents a summary of Net unrealized gain/(loss) for the three months ended June 30, 2025 and 2024 (in thousands). During the three months ended June 30, 2025, we recognized unrealized gains on our securitized debt, CMBS, and loan purchase commitments which were offset by unrealized losses on residential mortgage loans, commercial loans, and interest rate swaps.
Current report
Six Months Ended June 30, 2025 compared to the Six Months Ended June 30, 2024
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Interest income
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Interest expense
Current report
Net realized gain/(loss)
Current report
The following table presents a summary of Net realized gain/(loss) for the six months ended June 30, 2025 and 2024 (in thousands). The net realized loss during the six months ended June 30, 2025 was primarily driven by losses from unwinding certain pay-fix, receive-float interest rate swap agreements which were held at unrealized losses and losses recognized on the sale of non-agency loans and re- and non-performing loans.
Current report
Net unrealized gain/(loss)
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Management fee to affiliate
Current report
During the six months ended June 30, 2024, the base management fee was reduced by $1.2 million in connection with the WMC acquisition.
Current report
Non-investment related expenses
Current report
(1)For the six months ended June 30, 2024, the Manager agreed to waive its right to receive expense reimbursements of $0.6 million pursuant to the MITT Management Agreement Amendment executed in connection with the WMC acquisition.
Current report
(2)Estimated excise tax expense of $43 thousand was recognized during the six months ended June 30, 2025, which included $0.1 million related to an excise tax refund. We did not recognize any excise tax during the six months ended June 30, 2024.
Current report
Investment related expenses
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Transaction related expenses
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Transaction related expenses increased from the six months ended June 30, 2024 to the six months ended June 30, 2025 primarily due to increased expenses associated with securitizations.
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Dividends on Preferred Stock
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NM - Not Meaningful
Current report
(g)There are Legacy WMC Commercial Loans with an unpaid principal balance of $45.0 million and a fair value of $42.8 million which are on non-accrual status.
Current report
Equity Incentive Plans
Current report
Effective April 15, 2020 upon the approval of our stockholders at our 2020 annual meeting of stockholders, our 2020 Equity Incentive Plan (the "2020 Equity Incentive Plan") provided for a maximum of 666,666 shares of common stock to be issued.
Current report
On May 5, 2025, following approval by stockholders at our annual stockholders meeting, our 2025 Equity Incentive Plan (the “2025 Equity Incentive Plan”) became effective. The maximum number of shares of our common stock that may be issued under the 2025 Equity Incentive Plan is 800,000 shares of common stock, plus 220,781 shares of common stock (which reflects the number of shares that remained available for issuance under the 2020 Equity Incentive Plan as of May 4, 2025), plus 130,000 shares of common stock that remain subject to outstanding awards under the 2020 Equity Incentive Plan but only to the extent that such shares become forfeited or otherwise lapse. As a result of the adoption of the 2025 Equity Incentive Plan, no additional awards will be granted under the 2020 Equity Incentive Plan (although awards previously made under the 2020 Equity Incentive Plan will remain in effect subject to the terms of the 2020 Equity Incentive Plan and the applicable award agreement). As of June 30, 2025, there were no shares or awards issued under the 2025 Equity Incentive Plan.
Removed paragraphs (10)
Previous report
First Quarter 2025 Executive Summary
Previous report
•$10.65 Book Value per share;
Previous report
(1)During the first quarter 2025, we co-sponsored a rated securitization collateralized by $491.8 million of unpaid principal balance of Home Equity Loans. As the co-sponsor, the Company retained an "eligible vertical interest" to comply with applicable risk retention rules. Upon evaluating our retained interest in the securitization trust, we determined we were not the primary beneficiary and, as a result, did not consolidate the securitization trust and recorded an investment of $26.0 million of Non-Agency RMBS.
Previous report
•In April 2025, the Company sold Agency-Eligible Loans for gross proceeds of $37.3 million. These loans were recorded within the "Residential mortgage loans, at fair value" line item on the consolidated balance sheets as of March 31, 2025.
Previous report
The financial markets had a strong start to 2025 with stock prices rising and risk assets performing well, but remain sensitive to uncertainty surrounding inflation, fiscal policy, and monetary policy. In 2024, the Federal Reserve reduced the Federal Funds Rate by 100 basis points across three consecutive rate reductions that started in September 2024. At the March 2025 Federal Open Market Committee (“FOMC”) meeting, the Federal Reserve maintained interest rates at 4.5%, following a January pause. The economy showed resilience in the first quarter, with a strong labor market and moderating inflation, although it remained above the 2% target. The March Consumer Price Index reported 2.4% year-over-year inflation, with a slight rise in the unemployment rate to 4.2%. The Federal Reserve continues to maintain a cautious, yet increasingly dovish stance, employing a “wait-and-see” posture to obtain further confirmation from economic data before adjusting rates. The updated Summary of Economic Projections (“SEP”) revised the 2025 growth forecasts downwards, increased inflation and unemployment forecasts, and maintained its projection of two rate cuts totaling 50 basis points in 2025. During the first quarter, the 10-year U.S. Treasury yield dropped by 37 basis points to 4.21%, and the 30-year mortgage rate decreased by 20 basis points to 6.65%. The yield spread between the 2-year and 10-year U.S. Treasuries ended the quarter at a positive 32 basis points, consistent with the previous quarter end. Late in the first quarter and early April 2025, tariff announcements by the U.S. presidential administration caused sharp declines in risk assets and U.S. Treasury prices, pushing the 10-year U.S. Treasury yield up by nearly 50 basis points. A subsequent announcement to delay the tariffs for 90 days provided temporary relief, but economic uncertainty remains extremely elevated, with market participants navigating volatility and assessing the potential ongoing impact of recent events.
Previous report
Share-based compensation
Previous report
The AG Mortgage Investment Trust, Inc. 2020 Equity Incentive Plan, which became effective on April 15, 2020 following the approval of our stockholders at our 2020 annual meeting of stockholders, provides for a maximum of 666,666 shares of common stock that may be issued under the plan. The maximum number of shares of common stock granted during a single fiscal year to any non-employee director, taken together with any cash fees paid to such non-employee director during any fiscal year, shall not exceed $300,000 in total value (calculating the value of any such awards based on the grant date fair value). As of March 31, 2025, 239,183 shares of common stock remained available to be awarded under the 2020 Equity Incentive Plan.
Previous report
Further, on December 18, 2024, we granted an aggregate of 130,000 restricted shares of common stock to certain employees of the Manager, including certain of our executive officers, under the 2020 Equity Incentive Plan. These awards vest ratably in three annual installments beginning in January 2026, subject to continued employment with the Manager.
Previous report
On May 5, 2025, our stockholders approved our Equity Incentive Plan (the “2025 Equity Incentive Plan”) at our 2025 annual meeting of stockholders (the “2025 Annual Meeting”). The 2025 Equity Incentive Plan replaces the Company’s 2020 Equity Incentive Plan. Refer to Note 14 to the “Notes to Consolidated Financial Statements (unaudited)” for additional details.
Previous report
The AG Mortgage Investment Trust, Inc. 2021 Manager Equity Incentive Plan (the "2021 Manager Plan"), which became effective on April 7, 2021 following the approval of our stockholders at our 2021 annual meeting of stockholders, provides for a maximum of 573,425 shares of common stock that may be subject to awards thereunder to our Manager. As of March 31, 2025, there were no shares or awards issued under the 2021 Manager Plan. Following the execution of the Third Amendment to our management agreement in November 2021 related to the incentive fee, our compensation committee no longer expects to continue its historical practice of making periodic equity grants to the Manager pursuant to the 2021 Manager Plan.
Reworded paragraphs (55)
Previous wording
•$0.21 of Net Income/(Loss) Available to Common Stockholders per diluted common share and $0.20 of Earnings Available for Distribution ("EAD") per diluted common share;
Current wording
•$(0.05) of Net Income/(Loss) Available to Common Stockholders per diluted common share and $0.18 of Earnings Available for Distribution ("EAD") per diluted common share;
Previous wording
•12.4x GAAP Leverage Ratio and 1.6x Economic Leverage Ratio; and
Current wording
•12.8x GAAP Leverage Ratio and 1.3x Economic Leverage Ratio; and
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•$0.20 dividend per common share declared in the first quarter 2025;
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•$0.21 dividend per common share declared in the second quarter 2025;
Previous wording
◦Increased our quarterly dividend from $0.19 per common share in the fourth quarter 2024, which represented a 5.3% increase.
Current wording
◦Increased our quarterly dividend from $0.20 per common share in the first quarter 2025, which represented a 5.0% increase.
Previous wording
•Executed a rated securitization of Agency-Eligible Loans with a total unpaid principal balance of $423.3 million, converting recourse financing with mark-to-market margin calls to non-recourse financing without mark-to-market margin calls.
Current wording
•On July 10, 2025, we co-sponsored a rated Non-Agency securitization, in which Home Equity Loans with a total unpaid principal balance of $301.3 million were securitized, converting recourse financing with mark-to-market margin calls to non-recourse financing without mark-to-market margin calls.
Previous wording
We focus our investment activities primarily on acquiring and securitizing newly-originated residential mortgage loans within the non-agency segment of the housing market. We obtain our assets through Arc Home, LLC ("Arc Home"), our residential mortgage loan originator in which we own an approximate 44.6% interest, and through other third-party origination partners. We finance our acquired loans through various financing lines on a short-term basis and utilize TPG Angelo Gordon's proprietary securitization platform to secure long-term, non-recourse, non-mark-to-market financing as market conditions permit. Through our ownership in Arc Home, we also have exposure to mortgage banking activities. Arc Home is a multi-channel licensed mortgage originator and servicer primarily engaged in the business of originating and selling residential mortgage loans while retaining the mortgage servicing rights associated with certain loans that it originates.
Current wording
We focus our investment activities primarily on acquiring and securitizing newly-originated residential mortgage loans within the non-agency segment of the housing market. We obtain our assets through Arc Home, LLC ("Arc Home"), our residential mortgage loan originator in which we owned an approximate 44.6% interest as of June 30, 2025, and through other third-party origination partners. We finance our acquired loans through various financing lines on a short-term basis and utilize TPG Angelo Gordon's proprietary securitization platform to secure long-term, non-recourse, non-mark-to-market financing as market conditions permit. Through our ownership in Arc Home, we also have exposure to mortgage banking activities. Arc Home is a multi-channel licensed mortgage originator and servicer primarily engaged in the business of originating and selling residential mortgage loans while retaining the mortgage servicing rights associated with certain loans that it originates.
Previous wording
On December 6, 2023, the Company acquired Western Asset Mortgage Capital Corporation ("WMC"), an externally managed mortgage REIT that focused on investing in, financing and managing a portfolio of residential mortgage loans, real estate related securities, and commercial real estate loans.
Current wording
On December 6, 2023, we acquired Western Asset Mortgage Capital Corporation ("WMC"), an externally managed mortgage REIT that focused on investing in, financing and managing a portfolio of residential mortgage loans, real estate related securities, and commercial real estate loans.
Previous wording
RMBS spreads were generally wider during the first quarter alongside broader risk markets and an influx of new issuance in March 2025. Senior Non-QM tranches widened by 25 basis points, while mezzanine and subordinate Non-QM tranches widened by 10 to 25 basis points. Senior prime jumbo spreads were 20 basis points wider while subordinate tranches tightened by 15 basis points as market participants sought out higher all-in yields available lower in the structure. Trends in credit spreads on credit risk transfer ("CRT") assets can serve as a proxy for market participants evaluating credit-related assets given the observability of transactions. CRT tranches were 5 to 35 basis points wider with tranches higher in the structure widening the most. Compared to year-ago levels, residential credit spreads are mostly tighter, except for AAA Non-QM which is roughly 15 basis points wider. Credit curves remain relatively flat as the demand for subordinate tranches of credit continue to be robust, particularly amid higher benchmark rates.
Current wording
Changes in RMBS spreads were mixed for the second quarter of 2025 depending on product and priority within the capital structure. Non-QM spreads were slightly wider for senior and mezzanine tranches while subordinate Non-QM tranches were wider by 35 basis points. Senior prime jumbo spreads were wider by 5 basis points. However, investment grade were more varied among the subordinate tranches as A and AA tranches were slightly tighter, BBB prime jumbo credit spreads widened moderately, and lower in the capital structure, non-rated tranches were roughly 35 basis points wider. Trends in credit spreads on credit risk transfer ("CRT") assets can serve as a proxy for market participants evaluating credit-related assets given the observability of transactions. CRT tranches were up to 20 basis points tighter with most of that coming higher in the capital structure. The CRT sector has benefited from some scarcity value as the GSEs have opted to retain more of the capital structure for their newly issued transactions. Compared to year-ago levels, residential credit spreads are mixed overall with CRT and senior prime jumbo up to 30 to 50 basis points tighter, Non-QM up to 20 basis points wider and below-investment grade prime jumbo up to 50 to 100 basis points wider. Some credit curves were steeper during the quarter, but overall residential credit curves remained relatively flat as broad demand for residential credit continues to be robust.
Previous wording
Primary RMBS market activity was notably higher during the first quarter, at $39 billion, an increase of 14% compared to the fourth quarter of 2024 and 32% from year-ago levels. As has often been the case, the Non-QM sector saw the sharpest growth, followed by the Second Lien and Home Equity Lines of Credit sector. The latter has received a lot of press for its growth potential with estimates of $17 trillion tappable home equity, including $2 trillion belonging to conventional mortgage borrowers. Issuance of Prime Jumbo RMBS also increased while CRT issuance was little changed year-over-year. At nearly $14 billion, the Non-QM sector remained the most active sector, followed by Prime Jumbo ($7.9 billion), Second Liens and Home Equity Lines of Credit ($5 billion) and CRT ($2.7 billion). Primary agency-eligible investor RMBS issuance was approximately $2.1 billion in the first quarter. This quarter was the most active first quarter since 2022 when almost $55 billion of RMBS was issued, $13 billion of which was Non-QM.
Current wording
Primary RMBS market activity edged higher during the second quarter of 2025 to $35 billion, a rise of 6% compared to year-ago levels but roughly 11% lower than the first quarter of 2025. Compared to year-ago levels, primary activity for Non-QM rose 57% to almost $16 billion but was offset by declines across most of the remaining residential market. Prime jumbo was relatively steady year-over-year at approximately $6 billion and the Second Lien and Home Equity Lines of Credit sector was marginally lower year-over-year at $2.8 billion. Primary agency-eligible investor RMBS was approximately $1.7 billion and CRT totaled $1.8 billion in the second quarter of 2025. On a year-to-date basis, primary RMBS activity totaled approximately $75 billion or 19% higher than year-ago levels. Almost 40% of this activity was in Non-QM, followed by prime jumbo at 18% and home equity at 11%. The home equity space has received a large amount of industry focus for its growth potential with estimates of $17 trillion tappable home equity, including $2 trillion belonging to conventional mortgage borrowers.
Previous wording
The S&P CoreLogic Case-Shiller U.S. National Home Price Index was 3.9% higher year-over-year in February 2025, the latest data available, but has been little changed since establishing a new peak in July 2024. Regional price variations continued to exist, and on an annual basis, regions in the Northeast and Midwest continued to lead gains. New York City area home prices grew almost 8% from February 2024 to February 2025, with Chicago, Cleveland and Boston following with increases ranging from 6 to 7%. On the other hand, regions in California appreciated by a softer 3 to 4%, Dallas increased by only 0.9% and Tampa home prices declined by 1.5% over the same period. Home price growth and available for-sale inventory have had a relatively strong inverse relationship as regions with inventory growth since baseline 2019 have had weaker home price gains, and vice versa. The average of the 2025 home price appreciation forecasts is approximately 1.5% to 2%, with a range of -2% to +3.4%.
Current wording
The S&P CoreLogic Case-Shiller U.S. National Home Price Index was 2.3% higher year-over-year in May 2025, the latest data available, establishing a new peak nationally amid decelerating growth overall. Regional price variations continued to exist, and on an annual basis, regions in the Northeast and Midwest continued to lead gains while regions in Florida, Texas and the Mountain West have been weaker. New York City area home prices grew over 7% from May 2024 to May 2025, with Chicago, Cleveland and Detroit following in the high-4% to 6% area. However, regions in California were weaker, with Los Angeles rising by 1.1% and San Francisco lower by 0.6% year-over-year. Denver was unchanged, Dallas declined 0.6%, and Tampa fell by 2.4% compared to May 2024 levels. Overall, home price growth and available for-sale inventory have had a relatively strong inverse relationship as regions with inventory growth since 2019 have had weak performance, and vice versa.
Previous wording
Prevailing mortgage rates held steady in January and most of February, hovering around high-6% to 7%, before declining to end the quarter at 6.65%, according to the Freddie Mac Primary Mortgage Market Survey. Amid market volatility following the April 2nd “Liberation Day” tariff announcements, mortgage rate locks fell to as low as 6.5% before reapproaching 7%, based on third party data. The effective mortgage rate outstanding continued to steadily inch higher, reaching 4.03% during the fourth quarter of 2024, the latest data available. This rate, which measures the rate on outstanding mortgage debt, is approximately 70 basis points higher than the low established at the end of the second quarter of 2022 but still remains well below prevailing rates, underscoring the stickiness of the “lock-in effect,” or disincentive for existing homeowners to sell their homes because their current mortgage rate is well below current market rates.
Current wording
During the second quarter of 2025, prevailing mortgage rates were steady in the high-6% area ending the quarter at 6.77%, according to the Freddie Mac Primary Mortgage Market Survey. Amid market volatility following the April 2nd “Liberation Day” tariff announcements, mortgage rate locks fell to as low as 6.5% before quickly resetting near 7% through most of the remainder of the quarter, based on third party data. After a slow climb throughout 2023 and 2024, the effective mortgage rate outstanding held steady at 4.05% as of the first quarter of 2025, the latest data available. This rate, which measures the rate on outstanding mortgage debt, is 74 basis points higher than the low established at the end of the first quarter of 2022 but remains well below prevailing rates, underscoring the stickiness of the “lock-in effect” or disincentive for existing homeowners to sell their homes because their current mortgage rate is well below current market rates.
Previous wording
Total existing home inventory was around 1.33 million units in March 2025, the latest data available, and the most available inventory at this point of the year since March 2020. The growth in inventory is positive for homebuyers, however when evaluating new listings, which are a timelier barometer of activity, inventory is slightly better year-over-year but remains 15% below average year-to-date listings in February from 2015 to 2022. This reduced level of activity follows an annual shortage of over 1 million new listings in each of 2023 and 2024 compared to annual activity in 2015 to 2019 as well as pandemic-affected 2020 to 2022, underscoring the limited supply theme.
Current wording
Total existing home inventory continues to grow, reaching 1.54 million units in May 2025, the latest data available. This is the largest level of inventory since June 2020 but only just approaches the typical inventory levels of 1.5 to 2 million units from 2016 through 2019 and well below the range of 1.7 to 2.5 million units from 2000 through 2004. When evaluating new listings, which are a timelier barometer of activity, year-to-date inventory is just 3% higher year-over-year and is 16% below average year-to-date listings through May from 2015 through 2022. This reduced level of activity follows an annual shortage of over 1 million new listings in each of 2023 and 2024 compared to annual activity in 2015 through 2019 as well as pandemic-affected 2020 through 2022, underscoring the limited supply theme.
Previous wording
The following table presents a summary of Net realized gain/(loss) for the three months ended March 31, 2025 and 2024 (in thousands). During the three months ended March 31, 2025, there were gains on unwinding pay-fix, receive-variable interest rate swaps which were held at unrealized gains, offset by losses on the sales of residential mortgage loans.
Current wording
The following table presents a summary of Net realized gain/(loss) for the three months ended June 30, 2025 and 2024 (in thousands). During the three months ended June 30, 2025, net realized losses primarily related to unwinding certain pay-fix, receive-float interest rate swap agreements which were held at unrealized losses.
Previous wording
(2)Estimated excise tax expense of $0.1 million was recognized during the three months ended March 31, 2025. We did not recognize any excise tax during the three months ended March 31, 2024.
Current wording
(2)Estimated excise tax benefit of $(46) thousand was recognized during the three months ended June 30, 2025 which included $0.1 million related to an excise tax refund. We did not recognize any excise tax during the three months ended June 30, 2024.
Previous wording
Transaction related expenses primarily include expenses associated with purchasing and securitizing residential mortgage loans. Transaction related expenses were relatively consistent from the three months ended March 31, 2024 to the three months ended March 31, 2025 as we executed one securitization in each period.
Current wording
Transaction related expenses primarily include expenses associated with purchasing and securitizing residential mortgage loans. Transaction related expenses increased from the three months ended June 30, 2024 to the three months ended June 30, 2025 primarily due to increased expenses associated with securitizations.
Previous wording
(1)For the three months ended March 31, 2025, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $0.6 million and net unrealized losses of $(0.7) million. For the three months ended March 31, 2024, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $0.8 million, net unrealized gains of $1.5 million, and other expenses of $(0.1) million.
Current wording
(1)For the three months ended June 30, 2025, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $0.7 million, net unrealized losses of $(0.3) million, and expenses of $(0.1) million. For the three months ended June 30, 2024, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $0.8 million and net unrealized losses of $(1.6) million.
Previous wording
(3)As of March 31, 2025, the fair value of our investment in Arc Home was calculated using a valuation multiple of 1.00x of book value, which increased from 0.95x of book value as of December 31, 2024. As of March 31, 2024, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.89x of book value, which was consistent with the valuation multiple as of December 31, 2023.
Current wording
(2)As of June 30, 2025, the fair value of our investment in Arc Home was calculated using a valuation multiple of 1.00x of book value, which was consistent with the valuation multiple as of March 31, 2025. As of June 30, 2024, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.94x of book value which increased from 0.89x of book value as of March 31, 2024.
Previous wording
(2)The earnings recognized by AG Arc do not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Current wording
(3)The earnings recognized by AG Arc do not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Previous wording
The following table presents a summary of Net unrealized gain/(loss) for the three months ended March 31, 2025 and 2024 (in thousands). During the three months ended March 31, 2025, there were unrealized gains on our residential mortgage loans and Non-Agency RMBS which were offset by unrealized losses on securitized debt, commercial loans, and interest rate swaps.
Current wording
The following table presents a summary of Net unrealized gain/(loss) for the six months ended June 30, 2025 and 2024 (in thousands). During the six months ended June 30, 2025, we recognized unrealized gains on our residential mortgage loans, CMBS, and non-agency RMBS, which were offset by unrealized losses on securitized debt, interest rate swaps, and commercial loans.
Previous wording
(1)The earnings/(loss) at AG Arc during the three months ended March 31, 2025 were the result of $0.2 million of income related to Arc Home's lending and servicing operations, offset by $(0.1) million of losses related to changes in the fair value of the MSR portfolio held by Arc Home. The earnings/(loss) at AG Arc during the three months ended March 31, 2024 were primarily the result of $(0.2) million of losses related to Arc Home's lending and servicing operations, offset by $0.1 million related to changes in the fair value of the MSR portfolio held by Arc Home.
Current wording
(1)The earnings/(loss) at AG Arc during the six months ended June 30, 2025 were primarily the result of $0.2 million of income related to Arc Home's lending and servicing operations, offset by $(0.2) million related to changes in the fair value of the MSR portfolio held by Arc Home. The earnings/(loss) at AG Arc during the six months ended June 30, 2024 were primarily the result of $0.7 million related to changes in the fair value of the MSR portfolio held by Arc Home, offset by $(0.5) million of losses related to Arc Home's lending and servicing operations.
Previous wording
A reconciliation of "Net Income/(loss) available to common stockholders" to EAD for three months ended March 31, 2025 and 2024 is set forth below (in thousands, except per share data).
Current wording
A reconciliation of "Net Income/(loss) available to common stockholders" to EAD for three and six months ended June 30, 2025 and 2024 is set forth below (in thousands, except per share data).
Previous wording
(1)For the three months ended March 31, 2025 and 2024, total transaction related expenses and deal related performance fees included $1.1 million and $1.0 million, respectively, recorded within the "Transaction related expenses" line item and $83 thousand and $24 thousand, respectively, recorded within the "Interest expense" line item, which relates to the amortization of deferred financing costs.
Current wording
(1)For the three months ended June 30, 2025 and 2024, total transaction related expenses and deal related performance fees included $3.0 million and $0.5 million, respectively, recorded within the "Transaction related expenses" line item and $61 thousand and $22 thousand, respectively, recorded within the "Interest expense" line item, which relates to the amortization of deferred financing costs. For the six months ended June 30, 2025 and 2024, total transaction related expenses and deal related performance fees included $4.1 million and $1.5 million, respectively, recorded within the "Transaction related expenses" line item and $0.1 million and $46 thousand, respectively, recorded within the "Interest expense" line item, which relates to the amortization of deferred financing costs.
Previous wording
(2)For the three months ended March 31, 2025 and 2024, $(49.0) thousand or $0.00 per share and $0.9 million or $0.03 per share, respectively, of realized and unrealized changes in the fair value of Arc Home's mortgage servicing rights, transaction related expenses, and other asset impairments were excluded from EAD, net of deferred tax expense or benefit.
Current wording
(2)For the three months ended June 30, 2025 and 2024, $0.1 million or $0.00 per share and $0.7 million or $0.02 per share, respectively; and for the six months ended June 30, 2025 and 2024, $44 thousand or $0.00 per share and $1.6 million or $0.05 per share, respectively, of realized and unrealized changes in the fair value of Arc Home's mortgage servicing rights, transaction related expenses, and other asset impairments were excluded from EAD, net of deferred tax expense or benefit.
Previous wording
(3)For the three months ended March 31, 2025 and 2024, $1.4 million or $0.05 per share and $44 thousand or $0.00 per share, respectively, of unrealized changes in the fair value of our investment in Arc Home were excluded from EAD.
Current wording
(3)For the three months ended June 30, 2025, there were no unrealized changes in the fair value of our investment in Arc Home to exclude from EAD. For the three months ended June 30, 2024, $1.7 million or $0.06 per share; and for the six months ended June 30, 2025 and 2024, $1.4 million or $0.05 per share and $1.7 million or $0.06 per share, respectively, of unrealized changes in the fair value of our investment in Arc Home were excluded from EAD.
Previous wording
(4)EAD recognized by AG Arc does not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. For the three months ended March 31, 2025 and 2024, we eliminated $88.0 thousand or $0.00 per share and $0.2 million or $0.01 per share, respectively, of intra-entity profits recognized by Arc Home, and also decreased the cost basis of the underlying loans we purchased by the same amount. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Current wording
(4)EAD recognized by AG Arc does not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. For the three months ended June 30, 2025, there were no intra-entity profits in connection with the sale of residential mortgage loans to us recognized by Arc Home. For the three months ended June 30, 2024, we eliminated $0.4 million or $0.01 per share of intra-entity profits recognized by Arc Home, and also decreased the cost basis of the underlying loans we purchased by the same amount. For the six months ended June 30, 2025 and 2024, we eliminated $0.1 million or $0.00 per share and $0.6 million or $0.02 per share, respectively, of intra-entity profits recognized by Arc Home, and also decreased the cost basis of the underlying loans we purchased by the same amount. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Previous wording
(c)The cost of funds related to the financing on our investment portfolio inclusive of the benefit of 0.04% from our interest rate hedges was 5.26%. When including our Senior Unsecured Notes, the total cost of funds was 5.34%.
Current wording
(c)The cost of funds related to the financing on our investment portfolio inclusive of the benefit of 0.05% from our interest rate hedges was 5.29%. When including our Senior Unsecured Notes, the total cost of funds was 5.36%.
Previous wording
(g)There are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $6.5 million which are on non-accrual or cost recovery status.
Current wording
(h)There are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $7.0 million which are on non-accrual or cost recovery status.
Previous wording
(h)Cash and cash equivalents may include a portion of cash invested in money market funds. The yield represents the interest earned on money market funds as of period end.
Current wording
(i)Cash and cash equivalents may include a portion of cash invested in money market funds. The yield represents the interest earned on money market funds as of period end.
Previous wording
(i)Interest rate swaps represents the sum of the net fair value of interest rate swaps and the margin posted on interest rate swaps as of period end. Yield on interest rate swaps represents the weighted average net receive/(pay) rate as of period end. The impact of the net interest component of interest rate swaps on the cost of funds is included within the respective investment portfolio asset line items.
Current wording
(j)Interest rate swaps represents the sum of the net fair value of interest rate swaps and the margin posted on interest rate swaps as of period end. Yield on interest rate swaps represents the weighted average net receive/(pay) rate as of period end. The impact of the net interest component of interest rate swaps on the cost of funds is included within the respective investment portfolio asset line items.
Previous wording
(1)Interest Only securities have no principal balances and bear interest based on a notional value. The notional value is used solely to determine interest distributions on the interest only classes of securities. The Securitized debt in Non-Agency VIEs and Interest Only/Excess Servicing Bonds line items include interest only classes with a notional value of $1.8 billion and $12.1 billion, respectively.
Current wording
(1)Interest Only securities have no principal balances and bear interest based on a notional value. The notional value is used solely to determine interest distributions on the interest only classes of securities. The Securitized debt in Non-Agency VIEs and Interest Only/Excess Servicing Bonds line items include interest only classes with a notional value of $2.0 billion and $12.0 billion, respectively.
Previous wording
(2)Represents the fair value of real estate owned within Non-Agency VIEs. We record real estate owned at the lower of cost or fair value less estimated costs to sell. We recorded real estate owned within our Non-Agency VIEs at $3.7 million.
Current wording
(2)Represents the fair value of real estate owned within Non-Agency VIEs. We record real estate owned at the lower of cost or fair value less estimated costs to sell. We recorded real estate owned within our Non-Agency VIEs at $4.5 million.
Previous wording
(4)Our equity at risk included bonds with a fair value of $456.1 million held in order to comply with Risk Retention Rules. We are generally required to hold the Required Credit Risk until the later of (i) the fifth anniversary of the securitization closing date and (ii) the date on which the aggregate unpaid principal balance of the mortgage loans has been reduced to 25% of the aggregate unpaid principal balance of the mortgage loans as of the securitization closing date, but no longer than the seventh anniversary of the closing date.
Current wording
(4)Our equity at risk included bonds with a fair value of $472.4 million held in order to comply with Risk Retention Rules. We are generally required to hold the Required Credit Risk until the later of (i) the fifth anniversary of the securitization closing date and (ii) the date on which the aggregate unpaid principal balance of the mortgage loans has been reduced to 25% of the aggregate unpaid principal balance of the mortgage loans as of the securitization closing date, but no longer than the seventh anniversary of the closing date.
Previous wording
(5)A portion of our equity at risk included bonds exposed to the first loss of the securitization with a fair value of $108.6 million.
Current wording
(5)A portion of our equity at risk included bonds exposed to the first loss of the securitization with a fair value of $106.4 million.
Previous wording
(6)Excludes net other asset/(liabilities) held within the VIEs of $7.6 million.
Current wording
(6)Excludes net other asset/(liabilities) held within the VIEs of $7.5 million.
Previous wording
(7)As the sponsor and depositor of each securitization, we may purchase all of the outstanding Certificates (an "Optional Redemption") following the earlier of (1) an applicable anniversary date (typically two or three years) of the respective securitization or (2) the date at which the unpaid principal balance of the applicable collateral has declined below a certain percentage (typically 10% to 30%) of the principal balance originally contributed to the securitization. As of March 31, 2025, there were seven securitizations with an unpaid principal balance of $1.4 billion that met the criteria for an Optional Redemption.
Current wording
(7)As the sponsor and depositor of each securitization, we may purchase all of the outstanding Certificates (an "Optional Redemption") following the earlier of (1) an applicable anniversary date (typically two or three years) of the respective securitization or (2) the date at which the unpaid principal balance of the applicable collateral has declined below a certain percentage (typically 10% to 30%) of the principal balance originally contributed to the securitization. As of June 30, 2025, there were 8 securitizations with an unpaid principal balance of $1.8 billion that met the criteria for an Optional Redemption.
Previous wording
(3)Interest Only securities have no principal balances and bear interest based on a notional value. The notional value is used solely to determine interest distributions on the interest only classes of securities. The notional value of interest only classes included in the Non-QM Loans, Agency-Eligible Loans, Home Equity Loans, Prime Jumbo Loans, and Re- and Non-Performing Loans line items was $336.1 million, $48.7 million, $181.4 million, $27.4 million, and $0.8 million, respectively.
Current wording
(3)Interest Only securities have no principal balances and bear interest based on a notional value. The notional value is used solely to determine interest distributions on the interest only classes of securities. The notional value of interest only classes included in the Non-QM Loans, Agency-Eligible Loans, Home Equity Loans, Prime Jumbo Loans, and Re- and Non-Performing Loans line items was $322.2 million, $46.0 million, $171.9 million, $26.5 million, and $0.8 million, respectively.
Previous wording
(4)There are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $6.5 million which are on non-accrual or cost recovery status.
Current wording
(4)There are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $7.0 million which are on non-accrual or cost recovery status.
Previous wording
(1) Non-recourse financing arrangements include securitized debt, at fair value and $46.7 million of other non-recourse financing arrangements.
Current wording
(1) Non-recourse financing arrangements include securitized debt, at fair value and $43.4 million of other non-recourse financing arrangements.
Previous wording
During the three months ended March 31, 2025, the Company declared common stock dividends of $0.20 per share. During the same period, the Company declared and paid preferred stock dividends on its Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock of $0.51563, $0.50, and $0.693062, respectively.
Current wording
During the six months ended June 30, 2025, the Company declared common stock dividends of $0.41 per share. During the same period, the Company declared and paid preferred stock dividends on its Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock of $1.03126, $1.00, and $1.397926, respectively.
Previous wording
Our principal sources of cash consist of borrowings under securitized debt and financing arrangements, principal and interest payments we receive on our investment portfolio, cash generated from our operating results, proceeds from the sale of investments, and proceeds from capital market transactions. We typically use cash to repay principal and interest on our securitized debt, financing arrangements and senior unsecured notes, to purchase loans, real estate securities, and other real estate related assets, to make dividend payments on our capital stock, to repurchase our capital stock, and to fund our operations. We may also generate liquidity when restricted cash that was pledged as collateral for clearing and executing trades, derivatives, and financing arrangements becomes unrestricted when the related collateral requirements are exceeded or at the maturity of the derivative or financing arrangement. Refer to "—Margin requirements" below discussing instances where we may use liquidity to meet margin requirements. At March 31, 2025, we had $132.5 million of liquidity, which consisted of $115.5 million of cash and cash equivalents and $17.0 million of unencumbered Agency RMBS available to support our liquidity needs. Refer to the "Contractual obligations" section of this Item 2 for additional obligations that could impact our liquidity.
Current wording
Our principal sources of cash consist of borrowings under securitized debt and financing arrangements, principal and interest payments we receive on our investment portfolio, cash generated from our operating results, proceeds from the sale of investments, and proceeds from capital market transactions. We typically use cash to repay principal and interest on our securitized debt, financing arrangements and senior unsecured notes, to purchase loans, real estate securities, and other real estate related assets, to make dividend payments on our capital stock, to repurchase our capital stock, and to fund our operations. We may also generate liquidity when restricted cash that was pledged as collateral for clearing and executing trades, derivatives, and financing arrangements becomes unrestricted when the related collateral requirements are exceeded or at the maturity of the derivative or financing arrangement. Refer to "—Margin requirements" below discussing instances where we may use liquidity to meet margin requirements. At June 30, 2025, we had $89.7 million of liquidity, which consisted of $88.7 million of cash and cash equivalents and $1.0 million of unencumbered Agency RMBS available to support our liquidity needs. Refer to the "Contractual obligations" section of this Item 2 for additional obligations that could impact our liquidity.
Showing the first 40 of 55 pairs. Open the source sections for the rest.
Rearranged current paragraphs (17)
Current report — wording carried from elsewhere
•Executed a rated securitization of Agency-Eligible Loans with a total unpaid principal balance of $331.4 million.
Current report — wording carried from elsewhere
(1)The earnings/(loss) at AG Arc during the three months ended June 30, 2025 were primarily the result of changes in the fair value of the MSR portfolio held by Arc Home. The earnings/(loss) at AG Arc during the three months ended June 30, 2024 were primarily the result of $0.6 million related to changes in the fair value of the MSR portfolio held by Arc Home, offset by $(0.3) million of losses related to Arc Home's lending and servicing operations.
Current report — wording carried from elsewhere
The table below presents certain information from our consolidated statements of operations for the six months ended June 30, 2025 and 2024 (in thousands).
Current report — wording carried from elsewhere
Interest income increased from the six months ended June 30, 2024 to the six months ended June 30, 2025 primarily as a result of purchases of residential mortgage loans and non-agency RMBS during the period and an increase in the weighted average yield of our investment portfolio. The following table presents a summary of the weighted average amortized cost of and the weighted average yield on our GAAP investment portfolio ($ in millions).
Current report — wording carried from elsewhere
Interest expense increased from the six months ended June 30, 2024 to the six months ended June 30, 2025 due to an increase in the GAAP financing balance outstanding resulting from the issuance of securitized debt and Senior Unsecured Notes during the period, offset by the repayment of the Legacy WMC Convertible Notes upon maturity in September 2024. Additionally, there was an increase in the weighted average financing rate. The following table presents a summary of the weighted average financing balance and the weighted average financing rate on our GAAP investment portfolio ($ in millions).
Current report — wording carried from elsewhere
Net interest component of interest rate swaps
Current report — wording carried from elsewhere
We recorded income on the net interest component of interest rate swaps during the six months ended June 30, 2025 and 2024 as a result of our swap portfolio being in a net receive position. The decrease in income from the six months ended June 30, 2024 to the six months ended June 30, 2025 was the result of a decrease in the notional balance outstanding during the period and a decrease in the weighted average receive rate. The following table presents a summary of our interest rate swap portfolio as of June 30, 2025 and 2024 ($ in millions).
Current report — wording carried from elsewhere
The following table presents a summary of our non-investment related expenses (in thousands).
Current report — wording carried from elsewhere
Investment related expenses are primarily comprised of servicing fees, asset management fees, trustee fees, and certain investment related expenses reimbursable to the Manager or its affiliates. We are required to reimburse our Manager or its affiliates for operating expenses incurred by our Manager or its affiliates on our behalf associated with our investment portfolio. The following table presents a summary of our investment related expenses (in thousands).
Current report — wording carried from elsewhere
Equity in earnings/(loss) from affiliates
Current report — wording carried from elsewhere
The below tables summarize the components of the "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
Current report — wording carried from elsewhere
(1)For the six months ended June 30, 2025, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $1.3 million, net unrealized losses of $(1.0) million, and other expenses of $(0.1) million. For the six months ended June 30, 2024, the earnings/(loss) generated from our investment in MATT Non-QM Securities consisted of interest income of $1.6 million, net unrealized losses of $(0.1) million, and other expenses of $(0.1) million.
Current report — wording carried from elsewhere
(2)Refer to the table below for additional detail on the earnings/(loss) generated from our investment in AG Arc.
Current report — wording carried from elsewhere
The below table further disaggregates our "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
Current report — wording carried from elsewhere
(2)As of June 30, 2025, the fair value of our investment in Arc Home was calculated using a valuation multiple of 1.00x of book value, which increased from 0.95x of book value as of December 31, 2024. As of June 30, 2024, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.94x of book value, which increased from 0.89x of book value as of December 31, 2023.
Current report — wording carried from elsewhere
(3)The earnings recognized by AG Arc do not include our portion of gains recorded by Arc Home in connection with the sale of residential mortgage loans to us. Refer to Note 10 to the "Notes to Consolidated Financial Statements (unaudited)" for more information on this accounting policy.
Current report — wording carried from elsewhere
Holders of our Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock are entitled to receive cumulative cash dividends at their respective rates per annum on the $25.00 per share liquidation preference for each series. Our Series A Preferred Stock and Series B Preferred Stock have fixed rates of 8.25% and 8.00%, respectively. The initial dividend rate for our Series C Preferred Stock, from issuance through September 16, 2024, was 8.000%. On and after September 17, 2024, dividends on the Series C Preferred Stock accumulate at an annual floating rate of three-month CME Term SOFR (plus a tenor spread adjustment of 0.26161%) plus a spread of 6.476%.