TPG Mortgage Investment Trust, Inc.
For the period ended Dec 31, 2025. Filed Feb 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 25, 2026
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-K
Period ended 2024-12-31; filed 2025-03-04.
0001514281-25-000026
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-25.
0001628280-26-011775
Item 7. 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 268 previous paragraphs and 260 current paragraphs.
135 unchanged; 78 reworded; 43 added; 51 removed; 4 previous and 4 current paragraphs rearranged.
Tables are not compared: 26 previous and 27 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 (43)
Current report
•$10.48 Book Value per share;
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Acquisition of Additional Interest in AG Arc LLC
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•On August 1, 2025, purchased an additional 21.4% interest in AG Arc LLC (“AG Arc”) from certain private funds managed by an affiliate of TPG. 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 Note 10 to the "Notes to Consolidated Financial Statements" for additional information related to the transaction.
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•The table below summarizes the rated securitizations executed during the year ended December 31, 2025 (in millions).
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•Paid off certain Legacy WMC fixed-rate long-term financing arrangements collateralized by certain retained interests in securitizations acquired from WMC. Generated total net proceeds of $55.4 million by pledging these assets under a recourse financing arrangement with mark-to-market margin calls and issuing additional securitized debt;
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•Pledged Home Equity Loans with a fair value of $69.7 million and an unpaid principal balance of $66.8 million, in which we have no outstanding financing but have the ability to borrow at an advance rate of 87.5% of unpaid principal balance pledged as collateral. As of December 31, 2025, $50 million of this available financing is contractually committed;
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•Amended a financing arrangement to convert financing on our residential mortgage loans with a total borrowing capacity of $400 million from financing with mark-to-market margin calls to financing without mark-to-market margin calls; and
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•Exercised our optional redemption right related to a 2022 vintage Non-Agency securitization, paying down $275.0 million of securitized debt.
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During the fourth quarter of 2025 and through January of 2026, Federal Reserve Chair Jerome Powell adopted a more cautious posture as the central bank sought to balance a labor market showing early signs of softening with persistent inflation. Although the unemployment rate edged higher to 4.4% by the end of 2025, core inflation remained near 3%. In response to these shifting dynamics, the Federal Open Market Committee delivered two additional 25 basis point interest rate cuts at its October and December meetings, bringing the target Fed Funds range to 3.50% to 3.75%. However, at the January 2026 meeting, the Federal Reserve elected to hold rates steady, whereby Chair Powell maintained that while risks to the dual mandate had diminished, current policy was not significantly restrictive, signaling a patient, meeting-by-meeting approach to further easing while under his chairmanship. The Treasury market reflected this "higher-for-longer" concern even as the Federal Reserve cut short-term rates. This resulted in a further steepening of the yield curve. By quarter-end, the yield spread between 2-year and 10-year U.S. Treasuries widened to approximately 70 basis points, remaining around that level through January 2026. Despite elevated long-term Treasury yields, the 30-year fixed mortgage rate declined by 15 to 20 basis points over the course of the fourth quarter to the low 6% area, reflecting modest easing in long-term borrowing costs for consumers. On January 30, 2026, Kevin Warsh was nominated to succeed Jerome Powell as the Federal Reserve Chair in May 2026 and after some initial market volatility, markets subsequently stabilized as investors assessed the potential implications of the nomination on monetary policy.
Current report
RMBS credit spreads were broadly tighter during the fourth quarter of 2025, particularly lower in the capital structure. Senior Non-QM spreads trended slightly tighter by a few basis points while mezzanine and subordinate tranches were 20 to 25 basis points tighter. Similarly, senior prime jumbo spreads were mixed while the subordinate tranches tightened by 20 to 35 basis points. Closed-end second lien spreads were flat to slightly wider higher in the capital structure while mezzanine tranches were flat to approximately 10 basis points tighter. 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. Credit spreads on lower priority CRT tranches continued to tighten as market participants sought higher-yielding assets backed by seasoned mortgage credit. These tranche profiles have benefitted from some scarcity value as the GSEs have opted to retain more of the capital structure for their newly issued transactions amid favorable underlying collateral fundamentals. Higher priority CRT tranches were flat to slightly tighter during the fourth quarter of 2025. Non-QM credit curves continued to flatten amid robust demand for residential credit. Overall, credit spread changes for the full-year 2025 were broadly similar to the fourth quarter, with credit spreads on senior tranches mixed, while spreads on lower tranches in the capital structure were tighter by up to 25 to 30 basis points.
Current report
During the fourth quarter, primary RMBS market activity declined by 6% to $51 billion as compared to prior quarter. However, fourth quarter issuance volume was 27% higher than year-ago levels and brought the full-year 2025 primary issuance to over $200 billion, a 37% increase against 2024. Growth in the Non-QM sector was the primary driver of the annual increase, rising by approximately $35 billion, nearly doubling the volume in 2024. In addition, Home Equity issuance increased by over $13 billion, also nearly double 2024, and Prime Jumbo and Agency-Eligible issuance increased by a combined $10 billion. For the full-year 2025, Non-QM was roughly 40% of the year’s total issuance, followed by Prime Jumbo and Agency, collectively about 22%, and Home Equity at 14%. Residential transition loans, also known as fix-and-flip, comprised 4% of total issuance. Other sectors such as Single-Family Rental, CRT and Re/Non-performing loans comprised the balance.
Current report
The S&P CoreLogic Case-Shiller U.S. National Home Price Index was 1.3% higher year-over-year in December 2025, the latest data available, about 1% below the peak established in June 2025. Regional price variations continued to exist, and on an annual basis, metros in the Northeast and Midwest continued to lead gains while regions in Florida, Texas and the Mountain West have been weaker. Chicago area home prices led annual gains, rising by 5.3% from December 2024 to December 2025, and New York followed nearby at 5.1%. Cleveland home prices rose 4.0% and Boston was 1% higher over the year. California regions hovered around flat as Los Angeles and San Diego home price growth was inside of 1% while San Francisco fell by 10 basis points. Denver fell by 2.1% and Dallas home prices were 1.5% lower. In Florida, Miami home prices fell by 1.5% and Tampa was 2.9% lower against year-ago readings. Home price growth and available for-sale inventory have had a relatively strong inverse relationship as regions with inventory growth using 2019 as a baseline, have had weaker home price gains, and vice versa.
Current report
During the quarter, prevailing mortgage rates hovered between 6.2% and 6.3% and ended the quarter at 6.15%, according to the Freddie Mac Primary Mortgage Market Survey, last approaching these levels in the late third and early fourth quarter of 2024. Conforming mortgage interest rate locks remained in the low 6% area through December 2025 and held there at the start of January 2026. After a slow climb throughout 2023 and 2024, the effective mortgage rate outstanding (the rate on outstanding mortgage debt) continued to inch higher to 4.2% as of the third quarter of 2025, the latest data available, roughly 200 basis points lower than prevailing rates. This rate is almost 90 basis points higher than its low of 3.31% in the first quarter of 2022. While this suggests some softening of the mortgage lock-in effect, or disincentive for existing homeowners to sell their homes because their current mortgage rate is well below current market rates, this rate is up only 17 basis points from the start of the year, showing the stickiness of low-rate borrowers staying in place and reduced housing activity.
Current report
Total existing home inventory fell in December 2025 to 1.18 million, the latest data available. The reading follows the May to October period when inventory was approximately 1.5 million. Existing home inventory in 2025 hovered at its highest levels since 2020, averaging 1.3 to 1.5 million for most of the year, however these levels hardly breach the typical inventory levels of 1.5 to 2 million units that prevailed from 2016 to 2019 and remain well below the 1.7 to 2.5 million range seen between 2000 to 2004, periods with a smaller count of U.S. households. When evaluating new listings, which are a timelier barometer of home sale activity, 2025 inventory was 4.1 million units, the lowest since 2011. This figure is 3% lower year-over-year and is 24% below average year-to-date listings through November 2025 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.
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Results of Operations
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(2) During the year ended December 31, 2025, we recorded a reduction in excise tax expense of $0.1 million related to an excise tax refund.
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The following table presents a summary of our investment related expenses for the years ended December 31, 2025 and 2024 (in thousands). These expenses increased from the year ended December 31, 2024 to the year ended December 31, 2025 primarily due to an increase in our GAAP residential mortgage loan portfolio.
Current report
During the year ended December 31, 2025, we recorded transaction related expenses of $5.2 million on the purchase and securitization of residential mortgage loans, $0.8 million related to refinancing our fixed-rate long-term financing arrangements, $0.9 million related to our acquisition of an additional 21.4% interest in AG Arc, and $0.4 million of legal expenses on our Legacy WMC Commercial Loans.
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(1) Effective August 1, 2025, our allocation of AG Arc’s earnings is 66.0%. For all prior periods, our allocation of AG Arc’s earnings was 44.6%.
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(1)Represents items included in Earnings Available for Distribution. Refer to the “Earnings Available for Distribution” section below for further detail.
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(2)Primarily represents earnings/(loss) from our investment in MATT Non-QM Securities.
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(3)Net operating income/(loss) from AG Arc represents income/(loss) related to Arc Home's lending and servicing operations, net of operating expenses and related current tax expense or benefit. Other income/(loss) from AG Arc represents realized and unrealized changes in the fair value of Arc Home's mortgage servicing rights, transaction related expenses, and other asset impairments, net of related tax expense or benefit.
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Income tax expense
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Income tax expense for the year ended December 31, 2025 resulted from an increase in taxable income within our taxable REIT subsidiary primarily related to gains on residential mortgage loan securitization activity. During the year ended December 31, 2024, tax expense represented minimum state and local tax filing fees.
Current report
(1)The following table presents additional detail related to transaction related expenses excluded from EAD (in thousands). The interest expense line item relates to the amortization of deferred financing costs and the income tax expense line item relates to taxes incurred on items excluded from EAD, as defined above.
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(2)The following table presents additional detail related to EAD from equity method investments (in thousands). Refer to the “Equity in earnings/(loss) from affiliates” section within the “Results of Operations” above for additional detail.
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NM - Not Meaningful
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(f)The financing arrangements on Non-Agency Loans includes financing arrangements on other assets.
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(h)The Legacy WMC Commercial Loans are on non-accrual or cost-recovery status
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Securitized Non-Agency Loans and Home Equity Loans
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As noted above, our investment activities primarily include acquiring and securitizing newly-originated residential mortgage loans. Non-Agency VIEs are collateralized by Non-Agency and Agency-Eligible Loans. Home Equity VIEs are collateralized by revolving lines of credit and closed-end loans secured primarily by a second lien on a residential mortgaged property. Refer to Notes 2 and 3 to the “Notes to Consolidated Financial Statements” for additional information on the assets and liabilities of our consolidated Non-Agency VIEs and Home Equity VIEs.
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Securitized Debt
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As explained in the “Investment Activities” section above, our investment strategy focuses on acquiring and securitizing newly originated residential mortgage loans. In each securitization transaction, a pool of loans is transferred into a newly formed securitization trust. This trust issues Certificates, and we typically sell the senior classes of these Certificates to unrelated third parties. We record “Securitized debt" on our consolidated balance sheet in accordance with U.S. GAAP when we determine that we are the primary beneficiary of the securitization transaction. The proceeds from securitization transactions are used to repay any outstanding financing arrangements initially employed to acquire newly originated residential mortgage loans, replacing recourse financing with mark-to-market margin calls with securitized debt. Securitized debt is generally long-term in nature, non-recourse to us and is not subject to mark-to-market margin calls. Additionally, generally the holders of the securitized debt have no recourse to the general credit of the Company and we have no obligation to provide any other explicit or implicit support to the securitization trusts.
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(1) Securitized debt, at fair value is non-recourse to the Company.
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(2) Financing arrangements and senior unsecured notes are recourse to the Company.
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Acquisition of additional interest in AG Arc
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On August 1, 2025, in connection with the acquisition of an additional 21.4% interest in AG Arc, we issued 2,027,676 restricted shares of common stock (the “Holder Shares”) to certain funds managed by an affiliate of TPG (the “Holders”) as consideration. Refer to Note 10 of the "Notes to Consolidated Financial Statements" for additional information. Pursuant to the registration rights agreement we entered into with the Holders, in August 2025, we filed a resale shelf registration statement on Form S-3 registering the resale of all the Holder Shares (the “Resale Shelf”), which was declared effective by the Securities and Exchange Commission in August 2025.
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Equity Incentive Plans
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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 could be issued under the 2025 Equity Incentive Plan was 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 equity incentive plan approved in 2020 (the “2020 Equity Incentive Plan”) as of May 4, 2025), plus 130,000 shares of common stock that remained 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).
Current report
As of December 31, 2025, we have 12,981 restricted stock units and 2,919 associated dividend equivalent units outstanding, all of which are fully vested and held by one of our independent directors. These units will be settled on a one-for-one basis in shares of our common stock upon the director's separation from service with us.
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Removed paragraphs (51)
Previous report
On December 6, 2023 (the "Closing Date"), we completed the acquisition of Western Asset Mortgage Capital Corporation ("WMC"), a Delaware corporation and 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. On the Closing Date, WMC merged with and into AGMIT Merger Sub, LLC, a Delaware limited liability company and our wholly owned subsidiary ("Merger Sub"), with Merger Sub continuing as the surviving company (the "Merger"). Refer to "Item 1—WMC Acquisition" and the section entitled "WMC Acquisition" in Note 1 to the "Notes to Consolidated Financial Statements" for further information related to the Merger.
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•$10.64 Book Value per share;
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◦Book value per common share is calculated using stockholders’ equity less the liquidation preference of $228.0 million on our issued and outstanding preferred stock divided by all outstanding common shares as of quarter-end;
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◦Increased our quarterly dividend per common share from $0.18 per common share in the first quarter 2024 to $0.19 per common share beginning the second quarter 2024, which represented a 5.6% increase.
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(1)Includes sales of $27.3 million, $1.5 million and $0.8 million of Non-Agency RMBS, CMBS and Other Securities, respectively, sold from the legacy portfolio acquired in the WMC acquisition.
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•Repurchased $7.1 million of principal amount of the Legacy WMC Convertible Notes during the first quarter of 2024 and paid off the remaining $79.1 million principal amount outstanding at maturity in September 2024; and
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•Issued $99.5 million principal amount of Senior Unsecured Notes in public offerings generating net proceeds of approximately $95.2 million.
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The financial markets have been, and will likely continue to remain, volatile given the overall market uncertainty related to inflation, fiscal policies of the incoming administration, and the path of monetary policy and interest rates. Throughout 2024, markets have displayed a high level of sensitivity to the Federal Reserve’s interest rate decisions. On December 18, 2024, the Federal Reserve lowered the target range for the Federal Funds Rate by an additional 25 basis points to 4.25% to 4.50%, for a cumulative 100 basis points of reduction in all of 2024. The Federal Reserve noted that the decrease was supported by their belief that the risks to both price stability and maximum employment are roughly in balance, but the stance of monetary policy remains restrictive. In its updated Summary of Economic Projections (“SEP”), the Federal Reserve increased its 2025 growth and inflation forecasts, reduced its unemployment rate forecast, and reduced the total amount of policy rate easing it anticipates for all of 2025 from 100 basis points to 50 basis points. As of December 2024, the Consumer Price Index report indicated headline inflation was 2.9% year over year with the unemployment rate remaining at 4.1%. During the fourth quarter, the 10-year U.S. Treasury yield increased by approximately 79 basis points to 4.58% and the 30-year mortgage rate increased by approximately 77 basis points to 6.85%. The quarter ended with the spread between the 2-year and 10-year U.S. Treasury yields at approximately 33 basis points positive sloping. There has been more mixed economic data and increasing policy uncertainty from the new administration as it pertains to inflation and growth, which have continued to drive volatility in benchmark rates so far in the first quarter 2025.
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RMBS spreads were mostly tighter and credit curves were relatively flat during the fourth quarter. Throughout 2024, market participants have sought RMBS and residential mortgage credit exposure to access strong underlying fundamentals such as high quality underwriting, rising home values and a persistently strong supply/demand technical. 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 to 25 basis points tighter during the fourth quarter. Investment grade prime jumbo RMBS spreads tightened by 30 basis points during the quarter, with spreads on BBB-rated risk finishing the year in the mid-200 basis points. Senior Non-QM tranches tightened by 10 to15 basis points while non-investment grade Non-QM spreads were 40 to 60 basis points tighter. Year-to-date, RMBS sectors have seen considerable spread tightening, particularly in the subordinate tranches of structures. Over the course of the year, non-investment grade prime jumbo spreads were 150 to 300 basis points tighter and non-investment grade Non-QM spreads were 100 to 200 basis points tighter, leaving credit curves sharply flatter in 2024.
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Primary RMBS market activity decreased slightly during the fourth quarter, totaling approximately $34 billion, a decline of 6% quarter-over-quarter, however issuance approximately doubled year-over-year. The annual growth was most pronounced in the Non-QM and Prime Jumbo sectors, which collectively grew by $8 billion year-over-year to nearly $18 billion. Other growth sectors included second liens and Home Equity Loans, up over 120%. For the full year 2024, primary RMBS activity rose over 90% to $134 billion. Most of the growth was again in the Prime Jumbo and Non-QM sectors, which rose 165% and 51% to $26 billion and $43 billion, respectively. Issuance for the second liens and Home Equity Loans sector grew by an impressive 200% to $13.5 billion as originators and deal sponsors become more focused on this asset class.
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The S&P CoreLogic Case-Shiller U.S. National Home Price Index seasonally fell, albeit just slightly, from its peak in July. The Index was higher by 3.9% during 2024. Regional price variations continue to exist, however, as West Coast, Midwest and Northeast regions recording the highest gains. 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. National home price expectations from third party research currently forecasts 2025 home price appreciation to be approximately 1.5% to 2%, with a range of -2% to +4.4%.
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Prevailing mortgage rates rose sharply in the fourth quarter after a brief decline in September with the 30-year fixed rate mortgage ending the quarter at 6.85%, according to the Freddie Mac Primary Mortgage Market Survey. The effective mortgage rate outstanding was slightly higher, from 3.98% to 4.02% as of December 2024 and remains well below prevailing rates. However, the “lock-in effect,” or disincentive for existing homeowners to sell their homes because their current mortgage rate is well below current market rates, is starting to show signs of decay as the effective mortgage rate has risen approximately 72 basis points since March 2022 and 23 basis points through 2024.
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Total existing home listings ticked down going into the end of the year. New listings continue to run well short of annual activity in 2015 to 2019 as well as pandemic-affected 2020 to 2022. Throughout 2024, approximately 4.2 million new listings came to market, a gap of over 1.1 million fewer listings than an average year over 2015 to 2022.
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Results of Operations for the Fiscal Years 2024 and 2023
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(1)The weighted average financing rates are presented based on the amortized cost of the underlying securities.
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Net interest component of interest rate swaps represents the net interest income received or expense paid on our interest rate swaps.
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Bargain purchase gain
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Per ASC 805, "Business Combinations," a bargain purchase gain is recognized in current earnings when the aggregate fair value of the consideration transferred is less than the fair value of the identifiable net asset acquired. In connection with the WMC acquisition in 2023, we recorded a bargain purchase gain of $30.2 million, which represents the amount by which the fair value of the net assets we acquired in the acquisition of $81.4 million exceeded the fair value of the shares of MITT common stock issued as consideration of $51.2 million. As a result of macroeconomic factors and interest rate volatility, the price per share of common stock of certain companies within the mortgage REIT industry have traded at discounts to book values per share in recent periods, which contributed to the bargain purchase gain recorded on the WMC acquisition.
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(2)Estimated excise tax expense of $0.1 million was recognized during the year ended December 31, 2024. The Company did not recognize any excise tax during the year ended December 31, 2023.
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Historically, transaction related expenses have included expenses primarily associated with purchasing and securitizing residential mortgage loans as well as certain other transaction and performance related fees associated with assets we invest in. During the year ended December 31, 2024 we completed four securitizations as compared to three securitizations during the year ended December 31, 2023. However, transaction related expenses for the year ended December 31, 2024 decreased primarily due to $6.0 million of transaction related expenses incurred during the year ended December 31, 2023 in connection with the WMC acquisition.
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(1) The earnings within MATT for the year ended December 31, 2024 were primarily the result of net interest income of $2.9 million offset by unrealized losses of $(1.4) million and expenses of $(0.2) million. The earnings within MATT for the year ended December 31, 2023 were primarily the result of net interest income of $3.5 million and unrealized gains of $0.7 million offset by other expenses of $(0.2) million.
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(2) Throughout the year ended December 31, 2023, Land Related Financing continued to pay down and paid off in full during the fourth quarter 2023.
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(3) Refer to the table below for additional detail on the earnings/(loss) generated from our investment in AG Arc.
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(1)The earnings/(loss) at AG Arc during the year ended December 31, 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 $(0.9) million of losses related to Arc Home's lending and servicing operations. The earnings/(loss) at AG Arc during the year ended December 31, 2023 were primarily the result of $(3.8) million related to changes in the fair value of the MSR portfolio held by Arc Home coupled with $(0.2) million of losses related to Arc Home's lending and servicing operations.
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(4)During the year ended December 31, 2023, Other operating expenses included certain expenses incurred related to the Land Related Financing assets held within LOTS which paid off in full during the fourth quarter 2023.
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(1)For the years ended December 31, 2024 and 2023, total transaction related expenses and deal related performance fees included $3.2 million and $11.1 million, respectively, recorded within the "Transaction related expenses" line item and $0.1 million and $0.1 million, respectively, recorded within the "Interest expense" line item, which relates to the amortization of deferred financing costs.
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(2)For the years ended December 31, 2024 and 2023, $1.8 million or $0.06 per share and $(0.3) million or $(0.01) per share, respectively, of realized and unrealized changes in the fair value of Arc Home's net mortgage servicing rights, changes in the fair value of corresponding derivatives, and other asset impairments were excluded from EAD, net of deferred tax expense. Additionally, for the years ended December 31, 2024 and 2023, $2.6 million or $0.09 per share and $(1.5) million or $(0.07) per share, respectively, of unrealized changes in the fair value of our investment in Arc Home were excluded from EAD.
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(3)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 years ended December 31, 2024 and 2023, we eliminated $1.1 million or $0.04 per share and $1.4 million or $0.07 per share of intra-entity profits recognized by Arc Home, respectively, and also decreased the cost basis of the underlying loans we purchased by the same amount. Refer to Note 2 to the "Notes to Consolidated Financial Statements" for more information on this accounting policy.
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In December 2023, through our acquisition of WMC, we increased our investment portfolio by $1.2 billion, which primarily consisted of Securitized Non-Agency Loans. For more information on the WMC acquisition, refer to "Item 1—WMC Acquisition" and the section entitled "WMC Acquisition" in Note 1 to the "Notes to Consolidated Financial Statements."
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(b)As of December 31, 2024, the weighted average yields are presented based on the amortized cost of the underlying loans and securities. The weighted average yield of the Company's investment portfolio based on the fair value of the underlying loans and securities as of December 31, 2024 was 6.20%.
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(f)Substantially all of our Non-Agency Loans were sold during January 2025.
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(k)Refer to the "Financing activities" section below for an aggregate breakout of leverage.
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Securitized Non-Agency Loans
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As noted above, our investment activities primarily include acquiring and securitizing newly-originated residential mortgage loans. These securitization trusts ("Non-Agency VIEs"), as defined in Note 2 of the consolidated financial statements, are collateralized by Non-Agency and Agency-Eligible Loans.
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(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. As of December 31, 2024, the notional value of interest only classes included in the GCAT Non-Agency RMBS Interest Only, MATT Non-QM Securities, Re/Non-Performing Securities, and Non-Agency RMBS Interest Only line items was $85.6 million, $264.6 million, and $1.0 million, and $242.0 million, respectively.
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The following table presents certain characteristics of our Non-Agency RMBS and Legacy WMC CMBS portfolio as of December 31, 2024 ($ in thousands).
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In December 2023, through our acquisition of WMC, we assumed liabilities of $1.1 billion, which primarily consisted of securitized debt, financing arrangements, and convertible senior unsecured notes. For more information on the acquisition of WMC, refer to "Item 1—WMC Acquisition" and the section entitled "WMC Acquisition" in Note 1 to the "Notes to Consolidated Financial Statements."
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We also use securitized debt to finance our loan portfolio. Securitized debt is generally non-mark-to-market with respect to margin calls and non-recourse to us.
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Legacy WMC Convertible Notes
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Through our acquisition of WMC, we assumed the Legacy WMC Convertible Notes. During the first quarter of 2024, we repurchased $7.1 million of principal amount of the Legacy WMC Convertible Notes and paid off the remaining $79.1 million principal amount outstanding at maturity in September 2024. See Note 6 to the "Notes to Consolidated Financial Statements" for additional information on the Legacy WMC Convertible Notes.
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Reworded paragraphs (78)
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 Angelo, Gordon & Co., L.P.'s ("TPG Angelo Gordon") 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 own an approximate 66.0% 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 Inc.'s ("TPG") 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
Our investment portfolio (which excludes our ownership in Arc Home) primarily includes Residential Investments and Agency RMBS. Currently, our Residential Investments primarily consist of newly originated Non-Agency Loans, Agency-Eligible Loans and Home Equity Loans, which we refer to as our target assets. In addition, we may also invest in other types of residential mortgage loans and other mortgage related assets. Our investment portfolio also includes commercial loans and commercial-mortgage backed securities ("CMBS") (collectively, the "Legacy WMC Commercial Investments") that were acquired in the WMC acquisition. We expect to either hold the Legacy WMC Commercial Investments until maturity or opportunistically exit these investments.
Current wording
Our investment portfolio (which excludes our ownership in Arc Home) primarily includes Residential Investments and Agency RMBS. Currently, our Residential Investments primarily consist of Non-Agency Loans, Agency-Eligible Loans, Home Equity Loans and Non-Agency RMBS collateralized by these loan types, which we refer to as our target assets. In addition, we may also invest in other types of residential mortgage loans and other mortgage related assets. Our investment portfolio also includes commercial loans and commercial-mortgage backed securities ("CMBS") (collectively, the "Legacy WMC Commercial Investments") that were acquired in the WMC acquisition. We expect to either hold the Legacy WMC Commercial Investments until maturity or opportunistically exit these investments.
Previous wording
We were incorporated in Maryland on March 1, 2011 and commenced operations in July 2011. We conduct our operations to qualify and be taxed as a REIT for U.S. federal income tax purposes. Accordingly, we generally will not be subject to U.S. federal income taxes on our taxable income that we distribute to our stockholders as long as we maintain our intended qualification as a REIT, with the exception of business conducted in our domestic taxable REIT subsidiaries ("TRSs") which are subject to corporate income tax. We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act.
Current wording
We were incorporated in Maryland on March 1, 2011 and commenced operations in July 2011. We conduct our operations to qualify and be taxed as a REIT for U.S. federal income tax purposes. Accordingly, we generally will not be subject to U.S. federal income taxes on our taxable income that we distribute currently to our stockholders as long as we maintain our intended qualification as a REIT, with the exception of business conducted in our domestic taxable REIT subsidiaries ("TRS") which are subject to corporate income tax. We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act.
Previous wording
We are externally managed by our Manager, an affiliate of TPG Angelo Gordon, pursuant to a management agreement. Our Manager has delegated to TPG Angelo Gordon, a diversified credit and real estate investing platform within TPG Inc. ("TPG"), the overall responsibility of its day-to-day duties and obligations arising under the management agreement. TPG (Nasdaq: TPG) is a leading global alternative asset management firm.
Current wording
We are externally managed by our Manager, a wholly-owned subsidiary of TPG, pursuant to a management agreement. Our Manager has delegated to Angelo, Gordon & Co., L.P. ("TPG Angelo Gordon"), an affiliate of TPG, the overall responsibility of its day-to-day duties and obligations arising under our management agreement. TPG (NASDAQ: TPG) is a leading global alternative asset management firm.
Previous wording
•$1.23 of Net Income/(Loss) Available to Common Stockholders per diluted common share and $0.76 of Earnings Available for Distribution ("EAD") per diluted common share for the year ended December 31, 2024;
Current wording
•$0.90 of Net Income/(Loss) Available to Common Stockholders per diluted common share and $0.86 of Earnings Available for Distribution ("EAD") per diluted common share for the year ended December 31, 2025;
Previous wording
•11.6x GAAP Leverage Ratio and 1.4x Economic Leverage Ratio;
Current wording
•14.4x GAAP Leverage Ratio and 1.6x Economic Leverage Ratio; and
Previous wording
•$0.75 dividend per common share declared during the year; and
Current wording
•$0.85 dividend per common share declared during the year;
Previous wording
(2)During the year, we co-sponsored two rated securitizations collateralized by $729.9 million of Agency-Eligible Loans. As the co-sponsor, the Company retained an "eligible vertical interest" to comply with risk retention rules which consists of at least 5% of each class of securities issued in the securitizations. Upon evaluating our retained interest in the securitization trusts, we determined we were not the primary beneficiary and, as a result, did not consolidate the securitization trusts and recorded an investment of $69.1 million of Non-Agency RMBS.
Current wording
(1)During the year, we partnered with mortgage originators and executed three rated securitizations collateralized by $1.5 billion of Home Equity Loans. As the co-sponsor, the Company retained an "eligible vertical interest" to comply with risk retention rules which consists of at least 5% of each class of securities issued in the securitizations. Upon evaluating our retained interest in the securitization trusts, we determined we were not the primary beneficiary and, as a result, did not consolidate the securitization trusts, which resulted in us recording an investment in Non-Agency RMBS.
Previous wording
•Executed four rated securitizations of Agency-Eligible Loans with a total unpaid principal balance of $1.4 billion, converting recourse financing with mark-to-market margin calls to non-recourse financing without mark-to-market margin calls;
Current wording
(1) Converted recourse financing with mark-to-market margin calls to non-recourse financing without mark-to-market margin calls.
Previous wording
◦"Residential mortgage loans" or "Loans" refer to our Non-Agency Loans, Agency-Eligible Loans, Home Equity Loans, and Re/Non-Performing Loans (exclusive of retained tranches from unconsolidated securitizations) and Land Related Financing.
Current wording
◦"Residential mortgage loans" or "Loans" refer to our Non-Agency Loans, Agency-Eligible Loans, Home Equity Loans, and Re/Non-Performing Loans (exclusive of retained tranches from unconsolidated securitizations).
Previous wording
•"Real estate securities" refers to our Non-Agency RMBS and Agency RMBS, inclusive of TBAs, as well as Legacy WMC CMBS and Other Securities that were acquired in the WMC acquisition.
Current wording
•"Real estate securities" refers to our Non-Agency RMBS and Agency RMBS, inclusive of TBAs, as well as Legacy WMC CMBS that were acquired in the WMC Acquisition.
Previous wording
•Our"GAAP Investment portfolio" includes our GAAP Residential Investments, Agency RMBS, and Legacy WMC Commercial Investments and Other Securities.
Current wording
•Our"GAAP Investment portfolio" includes our GAAP Residential Investments, Agency RMBS, and Legacy WMC Commercial Investments.
Previous wording
Our operating results can be affected by a number of factors and primarily depend on the size and composition of our investment portfolio, the level of our net interest income, the fair value of our assets and the supply of, and demand for, our investments in residential mortgage loans in the marketplace, among other things, which can be impacted by unanticipated credit events, such as defaults, liquidations or delinquencies, experienced by borrowers whose residential mortgage loans are included in our investment portfolio and other unanticipated events in our markets. Our primary source of net income or loss available to common stockholders is our net interest income, inclusive of our cost or benefit of hedging, which represents the difference between the interest earned on our investment portfolio and the costs of financing and economic hedges in place on our investment portfolio, as well as any income or losses from our equity investments in affiliates.
Current wording
Our operating results can be affected by a number of factors and primarily depend on the size and composition of our investment portfolio, the level of our net interest income, the fair value of our assets and the supply of, and demand for, our investments in residential mortgage loans in the marketplace, among other things, which can be impacted by unanticipated credit events experienced by borrowers whose residential mortgage loans are included in our investment portfolio, such as defaults, liquidations or delinquencies, and other unanticipated events in our markets. Our primary source of net income or loss available to common stockholders is our net interest income, inclusive of our cost or benefit of hedging, which represents the difference between the interest earned on our investment portfolio and the costs of financing and economic hedges in place on our investment portfolio, as well as any income or losses from our equity investments in affiliates which includes operating income/(loss) from Arc Home.
Previous wording
Interest income increased from December 31, 2023 to December 31, 2024 primarily as a result of an increased investment portfolio resulting from the WMC acquisition in December 2023 along with purchases of residential mortgage loans and real estate securities during the year 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 for the years ended December 31, 2024 and 2023 ($ in millions).
Current wording
Interest income increased from the year ended December 31, 2024 to the year ended December 31, 2025 primarily as a result of purchases of residential mortgage loans and Non-Agency RMBS 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 for the years ended December 31, 2025 and 2024 ($ in millions).
Previous wording
Interest expense is inclusive of our financing cost related to our financing arrangements on our GAAP investment portfolio, securitized debt, Legacy WMC Convertible Notes, and Senior Unsecured Notes.
Current wording
Interest expense is inclusive of our financing cost related to our financing arrangements on our GAAP investment portfolio, securitized debt, Senior Unsecured Notes, and, for the year ended December 31, 2024, Legacy WMC Convertible Notes.
Previous wording
Interest expense increased from December 31, 2023 to December 31, 2024 due to an increase in the GAAP financing balance outstanding resulting from the assumption of financing through the WMC acquisition in December 2023 along with the issuance of securitized debt and Senior Unsecured Notes during the year. 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 for the years ended December 31, 2024 and 2023 ($ in millions).
Current wording
Interest expense increased from the year ended December 31, 2024 to the year ended December 31, 2025 due to a higher weighted average GAAP financing balance outstanding resulting primarily from the issuance of securitized debt during the periods and the issuance of Senior Unsecured Notes in January and May of 2024, 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 for the years ended December 31, 2025 and 2024 ($ in millions).
Previous wording
We recorded income on the net interest component of interest rate swaps during the years ended December 31, 2024 and 2023 as a result of our swap portfolio being in a net receive position during the entire year. The following table presents a summary of our interest rate swap portfolio as of December 31, 2024 and 2023 ($ in millions).
Current wording
We recorded income on the net interest component of interest rate swaps during the years ended December 31, 2025 and 2024 as a result of our swap portfolio being in a net receive position during each of the entire periods. The decrease in income from the year ended December 31, 2024 to the year ended December 31, 2025 was the result of a decrease in the weighted average receive rate and weighted average notional balance. The following table presents a summary of the weighted average notional value of and the weighted average (pay)/receive rate on our interest rate swap portfolio for the years ended of December 31, 2025 and 2024 ($ in millions).
Previous wording
The following table presents a summary of Net realized gain/(loss) for the years ended December 31, 2024 and 2023 (in thousands). The realized loss during the year ended December 31, 2024 was primarily driven by losses from unwinding pay-fix, receive-variable interest rate swaps which were held at unrealized losses. This was offset by realized gains on sales of residential mortgage loans and real estate securities.
Current wording
The following table presents a summary of Net realized gain/(loss) for the years ended December 31, 2025 and 2024 (in thousands). See Note 3, Note 4, and Note 7 to the "Notes to Consolidated Financial Statements" for additional information on realized gains/(losses).
Previous wording
The following table presents a summary of Net unrealized gain/(loss) for the years ended December 31, 2024 and 2023 (in thousands). During the year ended December 31, 2024, there were unrealized gains on our residential mortgage loans and interest rate swaps offset by unrealized losses on our securitized debt.
Current wording
The following table presents a summary of Net unrealized gain/(loss) for the years ended December 31, 2025 and 2024 (in thousands).
Previous wording
Our management fee is based upon a percentage of our Stockholders’ Equity. See the "Contractual obligations" section of this Part II, Item 7 for further detail on the calculation of our management fee and for the definition of Stockholders’ Equity. In connection with the WMC acquisition, we and our Manager entered into the MITT Management Agreement Amendment pursuant to which the base management fee was reduced by $0.6 million for the first four quarters following the transaction closing, beginning with the fiscal quarter in which the transaction closing occurred (i.e., resulting in an aggregate $2.4 million waiver of base management fees). As a result of the transaction closing on December 6, 2023, the base management fee was reduced by $0.6 million during the year ended December 31, 2023 and $1.8 million during the year ended December 31, 2024.
Current wording
Our management fee is based upon a percentage of our Stockholders’ Equity. See the "Contractual obligations" section of this Part II, Item 7 for further detail on the calculation of our management fee and for the definition of Stockholders’ Equity. In connection with the WMC Acquisition, we and our Manager entered into the MITT Management Agreement Amendment pursuant to which the base management fee was reduced by $0.6 million for the first four quarters following the transaction closing, beginning with the fiscal quarter in which the transaction closing occurred (i.e., resulting in an aggregate $2.4 million waiver of base management fees). As a result, during the year ended December 31, 2024, the base management fee was reduced by $1.8 million.
Previous wording
Non-investment related expenses are primarily comprised of professional fees, directors’ and officers’ ("D&O") insurance, directors’ compensation, and certain non-investment related expenses reimbursable to our 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, including certain compensation expenses and other expenses relating to legal, accounting, and other services. Refer to the "Contractual obligations" section below for more detail on certain expenses reimbursable to our Manager or its affiliates. The following table presents a summary of our non-investment related expenses for the years ended December 31, 2024 and 2023 (in thousands).
Current wording
The following table presents a summary of our non-investment related expenses for the years ended December 31, 2025 and 2024 (in thousands).
Previous wording
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 for the years ended December 31, 2024 and 2023 (in thousands).
Current wording
(1) 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.
Previous wording
Equity in earnings/(loss) from affiliates represents our share of earnings and profits of investments held within affiliated entities. These investments are comprised of real estate securities, loans, and our investment in AG Arc which holds our investment in Arc Home. 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 wording
The below tables summarize the components of the "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
Previous wording
The below table further disaggregates our "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
Current wording
The below table breaks out the components in the "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
Previous wording
(2)As of December 31, 2024, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.95x book value, which increased from 0.89x book value as of December 31, 2023. As of December 31, 2022, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.94x book value.
Current wording
(4)As of December 31, 2025, the fair value of our investment in Arc Home was calculated using a valuation multiple of 1.025x of book value, which increased from 0.95x of book value as of December 31, 2024. As of December 31, 2024, the valuation multiple of 0.95x of book value, which increased from 0.89x of book value as of December 31, 2023.
Previous 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 2 and Note 10 to the "Notes to Consolidated Financial Statements" for more information on this accounting policy.
Current wording
(5)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" for more information on this accounting policy.
Previous wording
One of our objectives is to generate net income from net interest margin on the portfolio, and management uses EAD, as one of several metrics, to help measure our performance against this objective. Management believes that this non-GAAP measure, when considered with our GAAP financial statements, provides supplemental information useful for investors to help evaluate our financial performance. However, management also believes that our definition of EAD has important limitations as it does not include certain earnings or losses our management team considers in evaluating our financial performance. Our presentation of EAD may not be comparable to similarly-titled measures of other companies, who may use different calculations. This non-GAAP measure should not be considered a substitute for, or superior to, Net Income/(loss) available to common stockholders or Earnings/(loss) per diluted common share calculated in accordance with GAAP. Our GAAP financial results and the reconciliations from these results should be carefully evaluated.
Current wording
One of our objectives is to generate net income from net interest margin on our portfolio, and management uses EAD, as one of several metrics, to help measure our performance against this objective. Management believes that this non-GAAP measure, when considered with our GAAP financial statements, provides supplemental information useful for investors to help evaluate our financial performance. However, management also believes that our definition of EAD has important limitations as it does not include certain earnings or losses our management team considers in evaluating our financial performance. Our presentation of EAD may not be comparable to similarly-titled measures of other companies, who may use different calculations. This non-GAAP measure should not be considered a substitute for, or superior to, Net Income/(loss) available to common stockholders or Net income/(loss) per diluted common share calculated in accordance with GAAP. Our GAAP financial results and the reconciliations from these results should be carefully evaluated.
Previous wording
Arc, and (b) net realized gains/(losses) on the sale or termination of such instruments, (ii) any transaction related expenses incurred in connection with the acquisition, disposition, or securitization of our investments as well as transaction related expenses incurred in connection with the WMC acquisition, (iii) accrued deal-related performance fees payable to third party operators to the extent the primary component of the accrual relates to items that are excluded from EAD, such as unrealized and realized gains/(losses), (iv) realized and unrealized changes in the fair value of Arc Home's net mortgage servicing rights and the derivatives intended to offset changes in the fair value of those net mortgage servicing rights, (v) deferred taxes recognized at our taxable REIT subsidiaries, if any, (vi) any bargain purchase gains recognized, and (vii) certain other nonrecurring gains or losses. Items (i) through (vii) above include any amount related to those items held in affiliated entities. Transaction related expenses referenced in (ii) above are primarily comprised of costs incurred prior to or at the time of executing our securitizations and acquiring or disposing of residential mortgage loans. These costs are nonrecurring and may include underwriting fees, legal fees, diligence fees, and other similar transaction related expenses. Recurring expenses, such as servicing fees, custodial fees, trustee fees and other similar ongoing fees are not excluded from earnings available for distribution. Management considers the transaction related expenses to be similar to realized losses incurred at the acquisition, disposition, or securitization of an asset and does not view them as being part of its core operations. Management views the exclusion described in (iv) above to be consistent with how it calculates EAD on the remainder of its portfolio. Management excludes all deferred taxes because it believes deferred taxes are not representative of current operations. EAD includes the net interest income and other income earned on our investments on a yield adjusted basis, including TBA dollar roll income/(loss) or any other investment activity that may earn or pay net interest or its economic equivalent.
Current wording
We define EAD, a non-GAAP financial measure, as Net Income/(loss) available to common stockholders excluding (i) (a) unrealized gains/(losses) on loans, real estate securities, derivatives and other investments, inclusive of our investment in AG Arc and Arc Home's net mortgage servicing rights, and (b) net realized gains/(losses) on the sale or termination of such instruments, (ii) any transaction related expenses incurred in connection with the acquisition, disposition, or securitization of our investments, (iii) the income tax effect on non-EAD income/(loss) items, and (iv) certain other nonrecurring gains or losses. Items (i) through (iv) above include any amount related to those items held in affiliated entities. EAD includes the net interest income and other income earned on our investments on a yield adjusted basis, including the net interest component of interest rate swaps, TBA dollar roll income/(loss), or any other investment activity that may earn or pay net interest or its economic equivalent. Additionally, EAD includes the net operating income/(loss) from Arc Home.
Previous wording
GAAP net interest margin and non-GAAP net interest margin, a non-GAAP financial measure, are calculated by subtracting the weighted average cost of funds from the weighted average yield for our GAAP investment portfolio and our investment portfolio, respectively. The weighted average yield represents an effective interest rate on our cost basis, which utilizes all estimates of future cash flows and adjusts for actual prepayment and cash flow activity as of quarter-end. The calculation of weighted average yield is weighted on amortized cost at year end. The weighted average cost of funds is the sum of the weighted average funding costs on total financing arrangements outstanding at quarter-end, including all non-recourse financing arrangements, and our weighted average hedging cost or benefit, which is the weighted average of the net pay or receive rates on our interest rate swaps. GAAP and non-GAAP cost of funds are weighted by the outstanding financing arrangements on our GAAP investment portfolio and our investment portfolio, respectively, and the amortized cost of securitized debt and senior unsecured notes at year end.
Current wording
GAAP net interest margin and non-GAAP net interest margin, a non-GAAP financial measure, are calculated by subtracting the weighted average cost of funds from the weighted average yield for our GAAP investment portfolio and our investment portfolio, respectively. The weighted average yield represents an effective interest rate on our cost basis, which utilizes all estimates of future cash flows and adjusts for actual prepayment and cash flow activity as of quarter-end. The calculation of weighted average yield is weighted on amortized cost at quarter-end. The weighted average cost of funds is the sum of the weighted average funding costs on total financing arrangements outstanding at quarter-end, including all non-recourse financing arrangements, and our weighted average hedging cost or benefit, which is the weighted average of the net pay or receive rates on our interest rate swaps. GAAP and non-GAAP cost of funds are weighted by the outstanding financing arrangements on our GAAP investment portfolio and our investment portfolio, respectively, and the amortized cost of securitized debt and senior unsecured notes at quarter-end.
Previous wording
(1)The weighted average yields are presented based on the amortized cost of the underlying loans.
Current wording
(b)The weighted average yields are calculated based on the amortized cost of the underlying loans and securities.
Previous 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 5.24%. When including our Senior Unsecured Notes, the total cost of funds was 5.31%.
Current wording
(c)The cost of funds related to the financing on our investment portfolio inclusive of the benefit of 0.03% from our interest rate hedges was 5.35%. When including our Senior Unsecured Notes, the total cost of funds was 5.41%.
Previous wording
(d)Allocated equity represents the investment fair value less the associated securitized debt at fair value and financing arrangements, where applicable.
Current wording
(d)Allocated equity represents the investment fair value less the associated securitized debt fair value and financing arrangements, where applicable.
Previous wording
(h)As of December 31, 2024, there are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $6.0 million which are on non-accrual or cost recovery status.
Current wording
(i)There are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $6.3 million which are on non-accrual or cost recovery status.
Previous 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.
Current wording
(j)Cash and cash equivalents may include a portion of cash invested in money market funds. The net interest margin represents the interest earned on money market funds as of period end.
Previous 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.
Current wording
(k)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. Net interest margin 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
In each securitization transaction, we transfer a pool of loans to a wholly-owned subsidiary and the loans are deposited into a newly created securitization trust. The securitization trust issues various classes of mortgage pass-through certificates backed by the cash flows from the underlying residential mortgage loans (the "Certificates"). When we sponsor a residential mortgage loan securitization, we are generally required to retain at least 5% of the fair value of the Certificates issued in the securitization ("Risk Retention Rules"). We can retain either an "eligible vertical interest" (which consists of at least 5% of each class of securities issued in the securitization), an "eligible horizontal residual interest" (which is the most subordinate class of securities with a fair value of at least 5% of the aggregate credit risk) or a combination of both totaling 5% (the "Required Credit Risk"). In order to comply with the Risk Retention Rules in each securitization transaction, we generally purchase the most subordinated classes of Certificates and the excess cash flow Certificates. We also purchase the Certificates entitled to excess servicing fees and may purchase other Certificates issued by the securitization trust, while typically selling the senior classes of Certificates to unrelated third parties.
Current wording
In each securitization transaction, a pool of loans is transferred into a newly formed securitization trust. The securitization trust issues various classes of mortgage pass-through certificates backed by the cash flows from the underlying residential mortgage loans (the "Certificates"). When we sponsor a residential mortgage loan securitization, we are generally required to retain at least 5% of the fair value of the Certificates issued in the securitization ("Risk Retention Rules"). We can retain either an "eligible vertical interest" (which consists of at least 5% of each class of securities issued in the securitization), an "eligible horizontal residual interest" (which is the most subordinate class of securities with a fair value of at least 5% of the aggregate credit risk) or a combination of both totaling 5% (the "Required Credit Risk"). We typically sell the senior classes of Certificates to unrelated third parties. When we choose to retain aneligible horizontal residual interest, we generally purchase the most subordinated classes of Certificates and the excess cash flow Certificates. When we choose to retain aneligible vertical interest, we purchase a 5% interest in each class of Certificates issued. We also may purchase the Certificates entitled to excess servicing fees and other Certificates not required to meet Risk Retention Rules.
Previous wording
If we are determined to be the primary beneficiary of these securitization transactions, we consolidate the respective VIE created to facilitate the transaction and record "Securitized residential mortgage loans" and "Securitized debt" on the consolidated balance sheets in accordance with U.S. GAAP. However, as noted above, our equity at risk represents certain Certificates from each securitization which we retain.
Current wording
If we are determined to be the primary beneficiary of these securitization transactions, we consolidate the respective VIE created to facilitate the transaction and record "Securitized residential mortgage loans" and "Securitized debt" on the consolidated balance sheets in accordance with U.S. GAAP. However, our equity at risk represents certain Certificates from each securitization which we retain.
Previous wording
The following table summarizes our Securitized residential mortgage loans and Securitized debt, as well as the economic interest on retained Certificates related to our Non-Agency VIEs (in thousands).
Current wording
The following table summarizes our Securitized residential mortgage loans and Securitized debt, as well as the economic interest on retained Certificates related to our Non-Agency VIEs and Home Equity VIEs as of December 31, 2025 (in thousands).
Previous wording
(1)Interest Only 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. As of December 31, 2024 the Securitized debt in Non-Agency VIEs line item includes interest only classes with notional balances of $1.2 billion. As of December 31, 2024 the notional balance on Interest Only / Excess Servicing Bonds was $12.2 billion.
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 the Non-Agency VIEs and Interest Only/Excess Servicing Bonds line items include interest only classes with a notional value of $3.7 billion and $11.2 billion, respectively. The Securitized debt in the Home Equity VIEs and Interest Only/Excess Servicing Bonds line items include interest only classes with a notional value of $295.4 million and $579.3 million, 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. As of December 31, 2024, we recorded real estate owned within our Non-Agency VIEs at $1.1 million.
Current wording
(2)For Non-Agency VIEs, represents the fair value of real estate owned within the 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 $2.1 million as of December 31, 2025. For Home Equity VIEs, represents cash held in reserve accounts within the Home Equity VIEs and included within our restricted cash.
Showing the first 40 of 78 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
◦Increase of 13.3% from $0.75 dividend per common share declared during 2024.
Current report — wording carried from elsewhere
(1) We are required to reimburse our Manager or its affiliates for operating expenses incurred by our Manager or its affiliates on our behalf, including certain compensation expenses and other expenses relating to legal, accounting, and other services. See the "Contractual obligations" section of this Part II, Item 7 for further detail. For the year ended December 31, 2024, the Manager agreed to waive its right to receive expense reimbursements of $1.1 million pursuant to the MITT Management Agreement Amendment executed in connection with the WMC Acquisition.
Current report — wording carried from elsewhere
Transaction related expenses are primarily comprised of costs incurred prior to or at the time of executing our securitizations and acquiring or disposing of residential mortgage loans. These costs are nonrecurring and may include underwriting fees, legal fees, diligence fees, and other similar transaction related expenses. Recurring expenses, such as servicing fees, custodial fees, trustee fees and other similar ongoing fees are not excluded from earnings available for distribution. Management considers the transaction related expenses and income taxes related to non-EAD income/(loss) items to be similar to realized losses incurred at the acquisition, disposition, or securitization of an asset and does not view them as being part of its core operations.
Current report — wording carried from elsewhere
3(c)(5)(C) of the Investment Company Act, each a "3(c)(5)(C) subsidiary."
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
(1) For the years ended December 31, 2024 and 2023, the Manager agreed to waive its right to receive expense reimbursements of $1.1 million and $1.7 million, respectively.
Previous report — wording carried elsewhere
We define EAD, a non-GAAP financial measure, as Net Income/(loss) available to common stockholders excluding (i) (a) unrealized gains/(losses) on loans, real estate securities, derivatives and other investments, inclusive of our investment in AG
Previous report — wording carried elsewhere
Federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT ordinary taxable income, without regard to the deduction for dividends paid and excluding net capital gains and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income. Before we pay any dividend, whether for U.S.
Previous report — wording carried elsewhere
Series B Preferred Stock, and Series C Preferred Stock having an aggregate value of up to $20.0 million. No share repurchases under the Preferred Repurchase Program have been made since its authorization.