Angel Oak Mortgage REIT, Inc.
For the period ended Sep 30, 2026. Filed Nov 3, 2026.
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.
Sep 30, 2026 · Filed Nov 3, 2026
AOMN$24.21-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001766478-26-000044
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-03.
0001766478-26-000068
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 263 previous paragraphs and 268 current paragraphs.
206 unchanged; 49 reworded; 10 added; 5 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 29 previous and 29 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 (10)
Current report
During the third quarter of 2026, the U.S. Federal Reserve Bank (the "Fed") shifted to a more hawkish monetary policy stance, raising the target range for the federal funds rate by 25 basis points in September to 3.75% - 4.00%, marking the first increase since 2023. The rate increase reflected continued concerns regarding inflationary pressures despite generally resilient economic growth and labor market conditions. Throughout the quarter, market expectations for monetary policy evolved as investors reassessed the likelihood that interest rates would remain elevated for a longer period than previously anticipated. As a result, fixed income markets experienced periods of increased volatility, with Treasury yields and mortgage rates responding to changing policy expectations, inflation data and broader macroeconomic developments. Despite these challenges, securitization markets remained active during the quarter, supported by continued investor demand and issuance activity, although asset prices and yields were influenced by interest rate volatility and spread movements. The macroeconomic environment during the quarter had a meaningful impact on mortgage asset valuations and whole loan financing costs across our portfolio as rates across the yield curve increased during the quarter.
Current report
U.S. Treasury yields and mortgage-related spreads remained sensitive to changing monetary policy expectations throughout the quarter. Following the Fed's September rate increase, market sentiment reflected a continued hawkish outlook, with market participants generally anticipating the possibility of additional monetary policy tightening before year end. In addition to monetary policy developments, Treasury yields were affected by geopolitical uncertainty, volatility in energy markets and ongoing Treasury issuance, each of which contributed to fluctuations in benchmark interest rates and broader fixed income market volatility. These factors, together with evolving inflation and economic growth expectations, contributed to continued volatility in mortgage rates, mortgage-related spreads and residential mortgage asset pricing during the quarter. Investor demand for residential mortgage credit remained an important driver of securitization spreads and asset valuations.
Current report
Residential mortgage rates, mortgage-related spreads and the cost to finance and securitize loans remain key drivers of the valuation and performance of our portfolio. Changes in interest rate expectations and spread levels during the quarter contributed to fluctuations in asset pricing across residential whole loans and loans held within securitization trusts. In addition, mortgage rates continued to influence borrower demand, refinancing activity and prepayment expectations. However, continued purchases of newly originated loans and ongoing securitization activity supported our portfolio’s growth during the quarter as compared to the comparable period for 2025, and we expect future movements in mortgage rates, spread levels and capital markets conditions to remain important factors affecting portfolio performance and securitization execution going forward.
Current report
•During the quarter ended September 30, 2026, we extended our loan financing facility with Global Investment Bank 3 to September 25, 2027. In addition, the interest rate pricing spread was reduced to a range from 1.35% to 4.75%; prior to this extension, the interest rate pricing spread was a range from 1.75% to 4.75%.
Current report
Nine Months Ended September 30, 2026 and 2025
Current report
(2) “DTI” means debt-to-income ratio, which is calculated as a borrower’s monthly debt payments, divided by the borrower’s month gross income.
Current report
Note: No state in “Other” represents more than a 2% concentration of the underlying collateral of our residential mortgage loans held in securitization trusts as of September 30, 2026. Numbers presented may add to more than 100% due to rounding.
Current report
Description of Existing Loan Financing Arrangements
Current report
We derecognized the mortgage loans sold in AOMT 2026-HB1 and recorded investments in RMBS and majority-owned affiliates (which is located within “other assets” on our consolidated balance sheet) as of September 30, 2026.
Current report
In July 2026, we were the sole participant in a securitization transaction of a pool of residential mortgage loans secured exclusively by first liens on one‑to‑four family residential properties. In the transaction, AOMT 2026-3 issued approximately $279.6 million in face value of bonds. We used the proceeds to repay outstanding debt of approximately $247.4 million and retained cash of $22.3 million, which was used for new loan purchases and operational purposes.
Removed paragraphs (5)
Previous report
During the second quarter of 2026, the U.S. Federal Reserve Bank (the “Fed”) maintained its target range for the federal funds rate at 3.50% - 3.75%, extending the neutral-to-restrictive policy stance that followed the easing cycle of late 2025. Monetary policy during the quarter remained highly data-dependent, as the Fed balanced solid economic activity and a relatively stable labor market against inflation that remained above its long-term objective. Market expectations shifted more hawkish over the course of the quarter, particularly following the June Federal Open Market Committee meeting, as updated projections reduced expectations for near-term rate cuts and increased attention on the potential for rates to remain higher for longer. Geopolitical uncertainty, including the conflict in Iran and related volatility in energy markets, continued to contribute to interest rate volatility during the quarter. Overall, while the interest rate environment remained more constructive for prospective homebuyers than the elevated levels observed in prior years, the second quarter was characterized by renewed uncertainty around the path of monetary policy and inflation. In parallel, securitization markets remained active, supported by continued investor demand, although execution levels were influenced by broader rate volatility and modest spread movements. Current expectations remain for a relatively stable, but more cautious, interest rate environment through the balance of 2026, assuming inflation moderates and economic growth remains resilient.
Previous report
U.S. Treasury yields during the second quarter of 2026 reflected a more volatile and increasingly hawkish policy outlook. Short- and intermediate-term Treasury yields generally moved higher as markets repriced the likelihood of future Fed easing and incorporated the possibility that policy rates could remain elevated for a longer period. Longer-term yields also fluctuated during the quarter, influenced by inflation expectations, energy-market developments, Treasury supply, and changing views on economic growth. The yield curve flattened at points during the quarter as front-end yields responded more directly to Fed communications, while longer maturities remained sensitive to shifting inflation risk premiums and geopolitical developments.
Previous report
Residential mortgage rates moved broadly in line with Treasury yields during the second quarter of 2026, with periods of volatility limiting the pace of improvement in affordability. Mortgage market activity continued to show signs of stabilization, supported by greater borrower engagement relative to the prior year, although rate sensitivity remained an important factor for loan demand and prepayment expectations. Residential mortgage rates, along with securitization spreads, remain key benchmarks for the valuation of our portfolio; as such, volatility and spread movements throughout the quarter created generally negative valuation impacts. Continued purchases of newly originated loans supported interest income growth in the second quarter, and we expect to continue to acquire newly originated loans throughout 2026, which should further support portfolio performance and securitization execution.
Previous report
Six Months Ended June 30, 2026 and 2025
Previous report
Description of Existing Financing Arrangements
Reworded paragraphs (49)
Previous wording
Net Interest Margin (“NIM”). We generated $6.3 million greater interest income for the quarter ended June 30, 2026 compared to the comparable period for 2025, driven by increases in the amount of our target assets. Interest expense increased by $5.5 million for the quarter ended June 30, 2026 compared to the comparable period for 2025, due to new asset purchases and securitizations, collateralized by residential mortgage loans in securitization trusts as well as our 9.750% Senior Notes due 2030 (“2030 Notes”) issued in May 2025. Overall, the increase in our interest income outpaced the increase in interest expense and drove a 8%, or $0.8 million, increase in net interest income for the quarter ended June 30, 2026 compared to the comparable period for 2025.
Current wording
Net Interest Margin (“NIM”). We generated $5.8 million greater interest income for the quarter ended September 30, 2026 compared to the comparable period for 2025, driven by increases in the amount of our target assets. Interest expense increased by $5.7 million for the quarter ended September 30, 2026 compared to the comparable period for 2025, due to new asset purchases and securitizations, collateralized by residential mortgage loans in securitization trusts, and the overall rates we pay when financing purchases which increased during the quarter as SOFR and other rates that our financing is tied to increased. These increases in borrowing costs were partially offset by lower spreads on newly extended loan financing facilities. Overall, the increase in our interest income outpaced the increase in interest expense and resulted in a small increase in net interest income for the quarter ended September 30, 2026 as compared to the comparable period for 2025.
Previous wording
Net unrealized loss. Our net unrealized loss for the quarter ended June 30, 2026 was primarily due to a decrease in the valuation of our loans in securitization trust, net of non-recourse securitization obligation and residential whole loans portfolios, as well as unrealized losses associated with our hedging activity as of the end of the quarter ended June 30, 2026.
Current wording
Net unrealized loss. Our net unrealized loss for the quarter ended September 30, 2026 was primarily due to a decrease in the valuation our loans in securitization trust, net of non-recourse securitization obligation and residential whole loans portfolios, offset by gains in the hedging portfolios as of the end of the quarter ended September 30, 2026.
Previous wording
During the quarter ended June 30, 2026, we purchased $204 million of newly-originated, current market coupon non-QM residential mortgage loans and home equity lines of credit (“HELOCs”), with a weighted average coupon of 7.34%, weighted average combined loan-to-value ratio (“CLTV”) of 70.5% and weighted average credit score of 759.
Current wording
During the quarter ended September 30, 2026, we purchased $233 million of newly-originated, current market coupon non-QM residential mortgage loans and home equity lines of credit (“HELOCs”), with a weighted average coupon of 7.29%, weighted average combined loan-to-value ratio (“CLTV”) of 69.8% and weighted average credit score of 758.
Previous wording
Additionally, subsequent to the quarter ended June 30, 2026, in August 2026, we and other Angel Oak affiliates participated in AOMT 2026-HB1, an approximately $221.4 million scheduled unpaid principal balance securitization backed by a pool of residential mortgage loans secured by second lien HELOCs on one‑to‑four family residential properties. We contributed HELOCs with a scheduled unpaid principal balance of $71.2 million to the deal.
Current wording
In August 2026, we and other Angel Oak affiliates participated in AOMT 2026-HB1, an approximately $221.4 million scheduled unpaid principal balance securitization backed by a pool of residential mortgage loans secured by second lien HELOCs on one‑to‑four family residential properties. We contributed HELOCs with a scheduled unpaid principal balance of $71.4 million to the deal. We used the proceeds of the securitization transaction to repay outstanding debt of approximately $53.0 million and released cash of $13.5 million, which was used for new loan purchases and operational purposes.
Previous wording
Subsequent to the quarter ended June 30, 2026, in July 2026, we issued AOMT 2026-3, a $279.6 million scheduled unpaid principal balance securitization backed by a pool of residential mortgage loans. We issued AOMT 2026-3 as the sole contributor in the securitization. We used the proceeds to repay outstanding debt of approximately $247.4 million, and the $22.3 million of cash released was used for new loan purchases and operational purposes.
Current wording
In July 2026, we issued AOMT 2026-3, a $279.6 million scheduled unpaid principal balance securitization backed by a pool of residential mortgage loans. We issued AOMT 2026-3 as the sole contributor in the securitization. We used the proceeds to repay outstanding debt of approximately $247.4 million, and the $22.3 million of cash released was used for new loan purchases and operational purposes.
Previous wording
We continuously evaluate our lender base and may enter into new agreements and / or exit agreements as we deem prudent, in accordance with our core financial strategy of purchasing whole loans and financing them until securitized. See “Liquidity and Capital Resources” below for a full description of our financing arrangements. Our total borrowing capacity was $1.3 billion as of June 30, 2026. Highlights of whole loan financing facilities activity over the second quarter of 2026 are as follows:
Current wording
We continuously evaluate our lender base and may enter into new agreements and / or exit agreements as we deem prudent, in accordance with our core financial strategy of purchasing whole loans and financing them until securitized. See “Liquidity and Capital Resources” below for a full description of our financing arrangements. Our total borrowing capacity was $1.3 billion as of September 30, 2026. Highlights of whole loan financing facilities activity over the third quarter of 2026 are as follows:
Previous wording
•During the quarter ended June 30, 2026, we renewed our loan financing facility with Multinational Bank 1 in accordance with the terms of the agreement, which contemplates rolling three-month renewals. This financing facility was extended through September 25, 2026. In addition, the interest rate pricing spread was reduced to a range from 1.30% to 2.10%; prior to this extension, the interest rate pricing spread was a range from 1.65% to 2.10%.
Current wording
•During the quarter ended September 30, 2026, we renewed our loan financing facility with Multinational Bank 1 in accordance with the terms of the agreement, which contemplates rolling three-month renewals. This financing facility was extended through December 28, 2026. In addition, the interest rate pricing spread was reduced to a range from 1.20% to 2.10%; prior to this extension, the interest rate pricing spread was a range from 1.30% to 2.10%.
Previous wording
Distributable Earnings were a gain of $9.0 million and a gain of $2.6 million for the three months ended June 30, 2026 and 2025, respectively. The primary drivers of the difference of Distributable Earnings as compared to GAAP net income in the quarter ended June 30, 2026 were adjustments to remove unrealized losses on residential loans, residential loans in securitization trusts and non-recourse securitization obligation, and derivatives portfolios. For the quarter ended June 30, 2025, the primary driver of the difference between Distributable Earnings and GAAP net income was the adjustment to remove losses on our residential loans portfolio. For the six months ended June 30, 2026 and June 30, 2025, the primary drivers of the difference between Distributable Earnings and GAAP net income were adjustments to remove unrealized losses on residential loans and residential loans in securitization trusts and non-recourse securitization obligation, and adjustments to remove unrealized gains on residential loans in securitization trusts and non-recourse securitization obligation, respectively.
Current wording
Distributable Earnings was $6.4 million and $0.5 million for the three months ended September 30, 2026 and 2025, respectively. The primary drivers of the difference of Distributable Earnings as compared to GAAP net income in the quarter ended September 30, 2026 were adjustments to remove unrealized losses on residential loans, residential loans in securitization trusts and non-recourse securitization obligation, and derivatives portfolios. For the quarter ended September 30, 2025, the primary driver of the difference between Distributable Earnings and GAAP net income was the adjustment to remove unrealized losses on our residential loans portfolio. For the nine months ended September 30, 2026 and September 30, 2025, the primary drivers of the difference between Distributable Earnings and GAAP net income were adjustments to remove unrealized losses on residential loans and residential loans in securitization trusts and non-recourse securitization obligation, and adjustments to remove unrealized gains on residential loans in securitization trusts and non-recourse securitization obligation, respectively.
Previous wording
The table below sets forth a reconciliation of net income (loss) allocable to common stockholders, calculated in accordance with GAAP, to Distributable Earnings for the three and six months ended June 30, 2026 and 2025:
Current wording
The table below sets forth a reconciliation of net income (loss) allocable to common stockholders, calculated in accordance with GAAP, to Distributable Earnings for the three and nine months ended September 30, 2026 and 2025:
Previous wording
Distributable Earnings Return on Average Equity is a non-GAAP measure and is defined as annual or annualized Distributable Earnings divided by average total stockholders’ equity. We believe that the presentation of Distributable Earnings Return on Average Equity provides investors with a useful measure to facilitate comparisons of financial performance among our REIT peers, but has important limitations. Additionally, we believe Distributable Earnings Return on Average Equity provides investors with additional detail on the Distributable Earnings generated by our invested equity capital. We believe Distributable Earnings Return on Average Equity as described above helps evaluate our financial performance without the impact of certain transactions but is of limited usefulness as an analytical tool. Therefore, Distributable Earnings Return on Average Equity should not be viewed in isolation and is not a substitute for net income computed in accordance with GAAP. Our methodology for calculating Distributable Earnings Return on Average Equity may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, our Distributable Earnings Return on Average Equity may not be comparable to similar measures presented by other REITs. Set forth below is our computation of Distributable Earnings Return on Average Equity for the three and six months ended June 30, 2026 and 2025:
Current wording
Distributable Earnings Return on Average Equity is a non-GAAP measure and is defined as annual or annualized Distributable Earnings divided by average total stockholders’ equity. We believe that the presentation of Distributable Earnings Return on Average Equity provides investors with a useful measure to facilitate comparisons of financial performance among our REIT peers, but has important limitations. Additionally, we believe Distributable Earnings Return on Average Equity provides investors with additional detail on the Distributable Earnings generated by our invested equity capital. We believe Distributable Earnings Return on Average Equity as described above helps evaluate our financial performance without the impact of certain transactions but is of limited usefulness as an analytical tool. Therefore, Distributable Earnings Return on Average Equity should not be viewed in isolation and is not a substitute for net income computed in accordance with GAAP. Our methodology for calculating Distributable Earnings Return on Average Equity may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, our Distributable Earnings Return on Average Equity may not be comparable to similar measures presented by other REITs. Set forth below is our computation of Distributable Earnings Return on Average Equity for the three and nine months ended September 30, 2026 and 2025:
Previous wording
We generated $6.3 million greater interest income for the quarter ended June 30, 2026 compared to the comparable period for 2025, driven by increases in the amount of our target assets. Interest expense increased by $5.5 million for the quarter ended June 30, 2026 compared to the comparable period for 2025, due to new asset purchases and securitizations, collateralized by residential mortgage loans in securitization trusts as well as our 2030 Notes issued in May 2025. Overall, the increase in our interest income outpaced the increase in interest expense and drove an 8%, or $0.8 million, increase in net interest income for the quarter ended June 30, 2026 compared to the comparable period for 2025.
Current wording
We generated $5.8 million greater interest income for the quarter ended September 30, 2026 compared to the comparable period for 2025, driven by increases in the amount of our target assets. Interest expense increased by $5.7 million for the quarter ended September 30, 2026 compared to the comparable period for 2025, due to new asset purchases and securitizations, collateralized by residential mortgage loans in securitization trusts, our 2030 Notes issued in May 2025 and the overall rates we pay when financing purchases which increased during the quarter as SOFR and other rates that our financing is tied to increased. These increases in borrowing costs were partially offset by lower spreads on newly extended loan financing facilities. Overall, the increase in our interest income outpaced the increase in interest expense and resulted in a small increase in net interest income for the quarter ended September 30, 2026 as compared to the comparable period for 2025.
Previous wording
For the three months ended June 30, 2026 and 2025, total realized and unrealized gains and (losses), net resulted in net losses of $(3.7) million and $(4.1) million, respectively. During the three months ended June 30, 2026, the $(4.1) million of realized and unrealized loss on securitization, net of unrealized gain (loss) on non-recourse securitization obligation was the primary driver of the overall loss. This loss is substantially comprised of unrealized loss due to valuation decreases and realized loss associated with the loss of unamortized premiums in the aforementioned portfolio. This was partially offset by a realized gain on RMBS of $0.5 million, which was primarily driven by the sale of retained bonds from the AOMT 2020-3 securitization. During the three months ended June 30, 2025, the $(1.1) million of realized and unrealized loss on securitization, net of unrealized gain (loss) on non-recourse securitization obligation, the $(1.1) million of realized loss on interest rate futures, and the $(1.2) million of realized and unrealized losses on residential mortgage loans were the key drivers of the overall loss.
Current wording
For the three months ended September 30, 2026 and 2025, total realized and unrealized gains and (losses), net resulted in net losses of $(20.9) million and gains of $4.7 million, respectively. During the three months ended September 30, 2026, the $(24.4) million of realized and unrealized loss on securitization, net of unrealized gain (loss) on non-recourse securitization obligation was the primary driver of the overall loss. This loss is substantially comprised of unrealized loss due to valuation decreases and realized loss associated with the loss of unamortized premiums in the aforementioned portfolio. During the three months ended September 30, 2025, the $2.7 million of realized and unrealized gain on securitization, net of unrealized gain (loss) on non-recourse securitization obligation, the $(3.1) million of realized loss on interest rate futures, and the $4.1 million of realized and unrealized gain on residential mortgage loans were the key drivers of the overall gain.
Previous wording
For the three months ended June 30, 2026 and 2025, our operating expenses were $1.6 million and $1.3 million, respectively. Our operating expenses increased compared to the comparative period due to increases in audit and loan diligence fees associated with a larger overall balance in our target portfolio.
Current wording
For the three months ended September 30, 2026 and 2025, our operating expenses were $2.1 million and $1.1 million, respectively. Our operating expenses increased compared to the comparative period due to increases in loan diligence fees associated with a larger overall balance in our target portfolio.
Previous wording
For the three months ended June 30, 2026 and 2025, our stock compensation expense was $0.4 million and $0.3 million, respectively. Our stock compensation expense increased for the three months ended June 30, 2026 due to the issuance of new performance-based stock awards after the three months ended June 30, 2025.
Current wording
For the three months ended September 30, 2026 and 2025, our stock compensation expense was $0.5 million and $0.4 million, respectively. Our stock compensation expense increased for the three months ended September 30, 2026 due to the issuance of new performance-based stock awards after the three months ended September 30, 2025.
Previous wording
For the three months ended June 30, 2026, we incurred no securitization costs. In the three months ended June 30, 2025, we incurred $1.9 million of securitization costs. We did not have any securitizations in the three months ended June 30, 2026. The expense in the three months ended June 30, 2025 is due to expenses associated with the AOMT 2025-4 and AOMT 2025-6 securitizations.
Current wording
For the three months ended September 30, 2026 and 2025, we incurred $1.8 million of securitization costs and no securitization costs, respectively. The expense for the three months ended September 30, 2026 is due to expenses associated with the AOMT 2026-3 and AOMT 2026-HB1 securitizations.
Previous wording
For the three months ended June 30, 2026 and 2025, our management fee incurred with affiliate was $1.1 million and $1.1 million, respectively. These expenses, which were flat for the three months ended June 30, 2026 versus the comparative period, are driven by our average Equity (as defined in the Management Agreement).
Current wording
For the three months ended September 30, 2026 and 2025, our management fee incurred with affiliate was $1.1 million and $1.2 million, respectively. These expenses, decreased for the three months ended September 30, 2026 versus the comparative period, and were driven by decreases in our average Equity (as defined in the Management Agreement).
Previous wording
The following table sets forth a summary of our results of operations for the six months ended June 30, 2026 and 2025:
Current wording
The following table sets forth a summary of our results of operations for the nine months ended September 30, 2026 and 2025:
Previous wording
The following table sets forth the components of net interest income for thesix months ended June 30, 2026 and 2025:
Current wording
The following table sets forth the components of net interest income for the nine months ended September 30, 2026 and 2025:
Previous wording
We generated $14.1 million greater interest income in the six months ended June 30, 2026 as compared to the same period in 2025, primarily driven by increases in the amount of our target assets. Interest expense increased by $11.3 million in the six months ended June 30, 2026 as compared to the same period in 2025, due to new asset purchases and securitizations, collateralized by residential mortgage loans in securitization trusts as well as our 2030 Notes issued in May 2025. Overall, the increase in our interest income outpaced the increase in interest expense and drove a 14%, or $2.8 million, increase in net interest income for the six months ended June 30, 2026 compared to the comparable period for 2025.
Current wording
We generated $19.9 million greater interest income in the nine months ended September 30, 2026 as compared to the same period in 2025, primarily driven by increases in the amount of our target assets. Interest expense increased by $17.0 million in the nine months ended September 30, 2026 as compared to the same period in 2025, due to new asset purchases and securitizations, collateralized by residential mortgage loans in securitization trusts, our 2030 Notes issued in May 2025 and the overall rates we pay when financing purchases which increased during the period as SOFR and other rates that our financing is tied to increased. These increases in borrowing costs were partially offset by lower spreads on newly extended loan financing facilities. Overall, the increase in our interest income outpaced the increase in interest expense and drove a 10%, or $2.9 million, increase in net interest income for the nine months ended September 30, 2026 as compared to the comparable period for 2025.
Previous wording
The components of total realized and unrealized gains (losses), net for thesix months ended June 30, 2026 and 2025 are set forth as follows:
Current wording
The components of total realized and unrealized gains (losses), net for the nine months ended September 30, 2026 and 2025 are set forth as follows:
Previous wording
For thesix months ended June 30, 2026 and 2025, total realized and unrealized gains (losses), net resulted in a net loss of $(18.1) million and a net gain of $9.4 million, respectively. During thesix months ended June 30, 2026, the $(15.4) million of realized and unrealized loss on securitization, net of non-recourse securitization obligation and the $(6.1) million of realized and unrealized loss on our residential mortgage loan portfolio were the primary drivers of the net loss, partially offset by $4.2 million of realized gain on interest rate futures. These losses are substantially associated with valuation decreases in the aforementioned portfolios, as well as realized losses associated with the loss of unamortized premiums in these portfolios; the offsetting gain in interest rate futures is the result of our hedging portfolio mitigating the impact of valuation changes to our residential mortgage loan portfolio. In thesix months ended June 30, 2025, the $13.4 million of realized and unrealized gain on securitization, net of non-recourse securitization obligation and the $1.8 million of realized and unrealized gain on our residential mortgage loan portfolio were the primary drivers of the net gain, partially offset by $(2.1) million of realized loss on interest rate futures.
Current wording
For the nine months ended September 30, 2026 and 2025, total realized and unrealized gains (losses), net resulted in a net loss of $(38.9) million and a net gain of $14.1 million, respectively. During the nine months ended September 30, 2026, the $(39.7) million of realized and unrealized loss on securitization, net of unrealized gain (loss) on non-recourse securitization obligation and the $(9.9) million of realized and unrealized loss on our residential mortgage loan portfolio were the primary drivers of the net loss, partially offset by $8.2 million of realized gain on interest rate futures. These losses are substantially associated with valuation decreases in the aforementioned portfolios, as well as realized losses associated with the loss of unamortized premiums in these portfolios; the offsetting gain in interest rate futures is the result of our hedging portfolio mitigating the impact of valuation changes to our residential mortgage loan portfolio. In the nine months ended September 30, 2025, the $16.1 million of realized and unrealized gain on securitization, net of unrealized gain (loss) on non-recourse securitization obligation and the $5.8 million of realized and unrealized gain on our residential mortgage loan portfolio were the primary drivers of the net gain, partially offset by $(5.6) million of realized loss on interest rate futures.
Previous wording
For thesix months ended June 30, 2026 and 2025, our operating expenses were $3.2 million and $2.5 million, respectively. Our operating expenses increased during the six months ended June 30, 2026 as compared to the comparative period due to increases in audit and loan diligence fees associated with a larger overall balance in our target portfolio.
Current wording
For the nine months ended September 30, 2026 and 2025, our operating expenses were $5.3 million and $3.7 million, respectively. Our operating expenses increased during the nine months ended September 30, 2026 as compared to the comparative period due to increases in loan diligence fees associated with a larger overall balance in our target portfolio.
Previous wording
For thesix months ended June 30, 2026 and 2025, our operating expenses incurred with affiliate were $1.1 million and $0.9 million, respectively. These expenses, which are substantially comprised of payroll reimbursements to our Manager, increased versus the comparative period due to standard annual compensation increases.
Current wording
For the nine months ended September 30, 2026 and 2025, our operating expenses incurred with affiliate were $1.7 million and $1.4 million, respectively. These expenses, which are substantially comprised of payroll reimbursements to our Manager, increased versus the comparative period due to standard annual compensation increases.
Previous wording
For thesix months ended June 30, 2026 and 2025 our stock compensation expense was $0.8 million and $0.5 million, respectively. Stock compensation expense increased for thesix months ended June 30, 2026 due to the issuance of new performance based stock awards after the six months ended June 30, 2025.
Current wording
For the nine months ended September 30, 2026 and 2025 our stock compensation expense was $1.3 million and $0.9 million, respectively. Stock compensation expense increased for the nine months ended September 30, 2026 due to the issuance of new performance based stock awards after the nine months ended September 30, 2025.
Previous wording
Securitization costs of $1.4 million were incurred for thesix months ended June 30, 2026 in connection with the AOMT 2026-2 securitization in March 2026. The $1.9 million of securitization costs in the comparable period in 2025 were incurred in connection with the AOMT 2025-4 and AOMT 2025-6 securitizations.
Current wording
Securitization costs of $3.2 million were incurred for the nine months ended September 30, 2026 in connection with the closing of AOMT 2026-2, AOMT 2026-3 and AOMT 2026-HB1 securitizations. The $1.9 million of securitization costs in the comparable period in 2025 were incurred in connection with the AOMT 2025-4 and AOMT 2025-6 securitizations.
Previous wording
For thesix months ended June 30, 2026 and 2025, our management fee incurred with affiliate was $2.2 million and $2.3 million, respectively. These expenses, which decreased slightly in thesix months ended June 30, 2026 versus the comparative period, are driven by our average Equity (as defined in the Management Agreement).
Current wording
For the nine months ended September 30, 2026 and 2025, our management fee incurred with affiliate was $3.3 million and $3.5 million, respectively. These expenses, which decreased slightly in the nine months ended September 30, 2026 versus the comparative period, were driven by deceases in our average Equity (as defined in the Management Agreement).
Previous wording
As of June 30, 2026, our portfolio consisted of approximately $2.9 billion of residential mortgage loans, RMBS, and other target assets. Certain of these portfolio assets are located in states such as Florida and California where natural disasters such as hurricanes, wildfires and earthquakes may occasionally occur. We require all of our collateral to be adequately insured.
Current wording
As of September 30, 2026, our portfolio consisted of approximately $2.8 billion of residential mortgage loans, RMBS, and other target assets. Certain of these portfolio assets are located in states such as Florida and California where natural disasters such as hurricanes, wildfires and earthquakes may occasionally occur. We require all of our collateral to be adequately insured.
Previous wording
(2) Other assets and liabilities presented is calculated as a net liability substantially comprised of $255.9 million due to broker for our quarter-end purchase of certain Freddie Mac and Fannie Mae-issued Whole Pool Agency RMBS, and excluding the portion of “other assets” which includes our investment in Majority-Owned Affiliates, which is considered a target asset.
Current wording
(2) Other assets and liabilities presented is calculated as a net liability substantially comprised of $154.7 million due to broker for our quarter-end purchase of certain Freddie Mac and Fannie Mae-issued Whole Pool Agency RMBS, and excluding the portion of “other assets” which includes our investment in Majority-Owned Affiliates, which is considered a target asset.
Previous wording
The following charts illustrate the distribution of the credit scores and interest rates by the number of loans in our residential mortgage loan portfolio as of June 30, 2026:
Current wording
The following charts illustrate the distribution of the credit scores and interest rates by the percentage of loans in our residential mortgage loan portfolio as of September 30, 2026:
Previous wording
The following charts illustrate the distribution of the credit scores and interest rates by the number of loans in our residential mortgage loan portfolio as of December 31, 2025:
Current wording
The following charts illustrate the distribution of the credit scores and interest rates by the percentage of loans in our residential mortgage loan portfolio as of December 31, 2025:
Previous wording
During the three months ended June 30, 2026, the Company sold its investment in AOMT 2020-3 non-agency RMBS. As such, there are no remaining RMBS from AOMT 2020 securitizations.
Current wording
Note: During the three months ended September 30, 2026, the Company sold its investment in AOMT 2020-3 non-agency RMBS. As such, there are no remaining RMBS from AOMT 2020 securitizations.
Previous wording
(2)The whole pool RMBS presented as of June 30, 2026 were purchased from a broker to whom the Company owed approximately $255.9 million, payable upon the settlement date of the trade. See Note 6 —Due to Brokerin our unaudited condensed consolidated financial statements included in this report.
Current wording
(2)The whole pool RMBS presented as of September 30, 2026 were purchased from a broker to whom the Company owed approximately $154.7 million, payable upon the settlement date of the trade. See Note 6 —Due to Brokerin our unaudited condensed consolidated financial statements included in this report.
Previous wording
(3)A portion of repurchase debt includes borrowings against retained bonds received from on-balance sheet securitizations (i.e., consolidated VIEs). These bonds, with a fair value of $215.1 million, are not reflected in the condensed consolidated balance sheets, as the Company reflects the assets of the VIE (residential mortgage loans in securitization trusts - at fair value) on its condensed consolidated balance sheets.
Current wording
(3)A portion of repurchase debt includes borrowings against retained bonds received from on-balance sheet securitizations (i.e., consolidated VIEs). These bonds, with a fair value of $220.1 million, are not reflected in the condensed consolidated balance sheets, as the Company reflects the assets of the VIE (residential mortgage loans in securitization trusts - at fair value) on its condensed consolidated balance sheets.
Previous wording
Note: No state in “Other” represents more than a 4% concentration of the loans underlying our portfolio of RMBS issued in AOMT securitization transactions as of December 31, 2025. Numbers presented may add to more than 100% due to rounding.
Current wording
Note: No state in “Other” represents more than a 4% concentration of the loans underlying our portfolio of RMBS issued in AOMT
Previous wording
As of June 30, 2026, we were a party to four warehouse loan financing lines, which permitted borrowings in an aggregate amount of up to $1.3 billion. During the quarter ended June 30, 2026, we renewed our loan financing facility with Multinational Bank 1 in accordance with the terms of the agreement, which contemplates rolling three-month renewals. Borrowings under warehouse loan financing lines (in general, each a “loan financing facility”) may be used to purchase whole loans for securitization or loans purchased for long‑term investment purposes.
Current wording
As of September 30, 2026, we were a party to four warehouse loan financing lines, which permitted borrowings in an aggregate amount of up to $1.3 billion. During the quarter ended September 30, 2026, we extended our loan financing facilities with Multinational Bank 1 and Global Investment Bank 3. Borrowings under warehouse loan financing lines (in general, each a “loan financing facility”) may be used to purchase whole loans for securitization or loans purchased for long‑term investment purposes.
Previous wording
The amount expected to be paid by Multinational Bank 1 for each eligible mortgage loan is based on an advance rate as a percentage of either the outstanding principal balance of the mortgage loan or the market value of the mortgage loan, whichever is less. Pursuant to the agreement, Multinational Bank 1 retains the right to determine the market value of the mortgage loans in its sole commercially reasonable discretion. The loan financing line is marked‑to‑market. Additionally, Multinational Bank 1 is under no obligation to purchase the eligible mortgage loans we offer to sell to them. The interest rate on any outstanding balance under the master repurchase agreement that the applicable subsidiary is required to pay Multinational Bank 1 is generally in line with other similar agreements that the Company or one or more of its subsidiaries has entered into, where the interest rate is equal to the sum of (1) a pricing spread from 1.30% - 2.10% and (2) the average SOFR for each U.S. Government Securities Business Day (as defined in the master repurchase agreement) until two U.S. Government Securities Business Days prior to the date the applicable loan is repurchased by the applicable subsidiary.
Current wording
The amount expected to be paid by Multinational Bank 1 for each eligible mortgage loan is based on an advance rate as a percentage of either the outstanding principal balance of the mortgage loan or the market value of the mortgage loan, whichever is less. Pursuant to the agreement, Multinational Bank 1 retains the right to determine the market value of the mortgage loans in its sole commercially reasonable discretion. The loan financing line is marked‑to‑market. Additionally, Multinational Bank 1 is under no obligation to purchase the eligible mortgage loans we offer to sell to them. The interest rate on any outstanding balance under the master repurchase agreement that the applicable subsidiary is required to pay Multinational Bank 1 is generally in line with other similar agreements that the Company or one or more of its subsidiaries has entered into, where the interest rate is equal to the sum of (1) a pricing spread from 1.20% - 2.10% and (2) the average SOFR for each U.S. Government Securities Business Day (as defined in the master repurchase agreement) until two U.S. Government Securities Business Days prior to the date the applicable loan is repurchased by the applicable subsidiary.
Previous wording
On October 24, 2018, two of our subsidiaries entered into a master repurchase agreement with a global investment bank (“Global Investment Bank 3”) for which we serve as guarantor of our subsidiaries’ obligations. Our subsidiaries are each considered a “Seller” under this agreement. Pursuant to the initial agreement, our subsidiaries could sell to Global Investment Bank 3, and later repurchase, up to $200.0 million aggregate borrowings on mortgage loans. On September 26, 2025, the facility’s termination date was extended to September 26, 2026.
Current wording
On October 24, 2018, two of our subsidiaries entered into a master repurchase agreement with a global investment bank (“Global Investment Bank 3”) for which we serve as guarantor of our subsidiaries’ obligations. Our subsidiaries are each considered a “Seller” under this agreement. Pursuant to the initial agreement, our subsidiaries could sell to Global Investment Bank 3, and later repurchase, up to $200.0 million aggregate borrowings on mortgage loans. As of September 30, 2026, the facility’s termination date was September 25, 2027.
Previous wording
The loan financing line is marked‑to‑market at fair value, where Global Investment Bank 3 retains the right to determine the market value of the mortgage loan collateral in its sole good faith discretion and in a commercially reasonable manner and is under no obligation to purchase the eligible mortgage loans we offer to sell to them. Further, the principal amount paid by Global Investment Bank 3 for each eligible mortgage loan is based on a percentage of the outstanding principal balance of the mortgage loan or the market value of the mortgage loan, whichever is less. Upon any subsidiary’s repurchase of the mortgage loan, such subsidiary is required to repay Global Investment Bank 3 the principal amount related to such mortgage loan plus accrued and unpaid interest at a rate based on the sum of (1) Compound SOFR and (2) a pricing spread generally ranging from 1.75% - 4.75%.
Current wording
The loan financing line is marked‑to‑market at fair value, where Global Investment Bank 3 retains the right to determine the market value of the mortgage loan collateral in its sole good faith discretion and in a commercially reasonable manner and is under no obligation to purchase the eligible mortgage loans we offer to sell to them. Further, the principal amount paid by Global Investment Bank 3 for each eligible mortgage loan is based on a percentage of the outstanding principal balance of the mortgage loan or the market value of the mortgage loan, whichever is less. Upon any subsidiary’s repurchase of the mortgage loan, such subsidiary is required to repay Global Investment Bank 3 the principal amount related to such mortgage loan plus accrued and unpaid interest at a rate based on the sum of (1) Compound SOFR and (2) a pricing spread generally ranging from 1.35% - 4.75%.
Previous wording
(1)On June 25, 2026, this financing facility was extended through September 25, 2026 in accordance with the terms of the agreement, which contemplates rolling three-month renewals. In addition, the interest rate pricing spread was reduced to a range from 1.30% to 2.10%; prior to this extension, the interest rate pricing spread was a range from 1.65% to 2.10%.
Current wording
(1)On September 25, 2026, this financing facility was extended through December 28, 2026 in accordance with the terms of the agreement, which contemplates rolling three-month renewals. In addition, the interest rate pricing spread was reduced to a range from 1.20% to 2.10%; prior to this extension, the interest rate pricing spread was a range from 1.30% to 2.10%.
Previous wording
(3) On September 26, 2025, the facility’s termination date was extended to September 26, 2026. In addition, the interest rate pricing spread was reduced to a range from 1.75% to 4.75%; prior to this extension, the interest rate pricing spread was a range from 1.90% to 4.75%.
Current wording
(3) On September 25, 2026, the facility’s termination date was extended to September 25, 2027. In addition, the interest rate pricing spread was reduced to a range from 1.35% to 4.75%; prior to this extension, the interest rate pricing spread was a range from 1.75% to 4.75%.
Showing the first 40 of 49 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Note: No state in “Other” represents more than a 3% concentration of the loans underlying our portfolio of RMBS issued in AOMT securitization transactions as of December 31, 2025. Numbers presented may add to more than 100% due to rounding.
Current report — wording carried from elsewhere
In August 2026, we and other affiliated entities participated in a securitization transaction of a pool of residential mortgage loans secured by second lien HELOCs (an open or closed end home equity revolving line of credit, secured by a mortgage, deed of trust or other instrument creating a first or junior lien on a residential property, which lien secures the related line of credit) on one‑to‑four family residential properties. In the transaction, AOMT 2026-HB1 issued approximately $221.4 million in face value of bonds. Our proportionate share of 32.1% of the retained bonds and investments in MOAs was approximately $8.4 million, including a retained discount on issuance of approximately $0.1 million. We used the proceeds of the securitization transaction to repay outstanding debt of approximately $53.0 million and released cash of $13.5 million, which was used for new loan purchases and operational purposes.
Current report — wording carried from elsewhere
We are the sole member of the depositor and also own and hold the call rights on the XS tranche of bonds, which is the “controlling class” of the bonds. We have consolidated the AOMT 2025-4 securitization on our consolidated balance sheet, maintaining the residential mortgage loans held in the securitization trust and the related financing obligation thereto on our consolidated balance sheets as of September 30, 2026.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Note: No state in “Other” represents more than a 3% concentration of the underlying collateral of our residential mortgage loans held in securitization trusts as of December 31, 2025. Numbers presented may add to more than 100% due to rounding.
Previous report — wording carried elsewhere
Note: No state in “Other” represents more than a 3% concentration of the loans underlying our portfolio of RMBS issued in AOMT
Previous report — wording carried elsewhere
Restricted cash of approximately $3.4 million as of June 30, 2026 was comprised of: $2.2 million in interest rate futures margin collateral for the interest rate futures under our sole control; and margin collateral for securities sold under agreements to repurchase of $1.2 million. Our counterparties did not require any margin collateral for TBAs as of June 30, 2026.