Angel Oak Mortgage REIT (AOMR) reported a GAAP net loss of $7.4 million, or $0.30 per diluted share, for the first quarter of 2026. The loss reverses a $20.5 million profit recorded in the same quarter a year earlier. Interest income for the quarter was $40.7 million, while net interest income rose 20.1% year‑over‑year to $12.1 million, reflecting stronger loan performance despite a decline in overall revenue figures.
Distributable earnings for the quarter were $4.6 million, or $0.18 per diluted share, falling 43% below the consensus estimate of $0.3142. The miss was largely driven by a $14.3 million hit from net realized and unrealized losses on loans, securities, and derivatives, which offset the positive operating growth generated by the higher net interest income.
GAAP book value per share declined to $10.31 from $10.58 at the end of 2025, while economic book value fell to $12.28 from $12.58. The downward trend in book values reflects the valuation adjustments that contributed to the GAAP loss.
The loss was also impacted by higher interest expense and a one‑time restructuring charge related to portfolio reclassification. Management explained that the unrealized valuation changes on both securitized and unsecuritized loan portfolios, tied to macro‑economic market volatility toward the end of the quarter, largely offset the positive operating growth.
A dividend of $0.32 per share was declared, exceeding the reported distributable earnings and raising concerns among income‑focused investors about the sustainability of the payout.
The market reacted with a pre‑market decline of about 3% and a 2.2% drop at $9.03, driven primarily by the GAAP loss, the miss on distributable earnings, and the decline in book values. The growth in net interest income was insufficient to offset these negative factors.
CEO Sreeni Prabhu highlighted that the quarter “showcased our earnings engine in a variable macro environment, marking approximately 20% net interest income growth compared to the first quarter of 2025 and over 11% net interest income growth compared to the fourth quarter of 2025.” He added that the company will “continue to focus on what we can control, maintaining disciplined credit, expanding earnings, and consistent securitization market activity.” Prabhu also noted that the GAAP net loss was largely due to unrealized valuation changes tied to macro‑economic volatility.
In March 2026, Angel Oak completed a $272.3 million securitization (AOMT 2026‑2), reducing debt and providing cash for new loan purchases. The company aims for roughly four securitizations annually.
During the quarter, the company purchased $246.2 million in newly‑originated non‑qualified mortgage loans, with a weighted average coupon of 7.34%, a combined loan‑to‑value ratio of 67.1%, and an average credit score of 759.
No specific forward guidance was provided for the remainder of the year, leaving investors to monitor the company’s ability to generate positive cash flow from loan origination and securitization activities.
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