Non-QM loan acquisitions and lower costs drive sharp turnaround from last quarter's loss
Non-QM lender Angel Oak Mortgage REIT reported a solid $20.5 million profit for the first quarter of 2025, reversing its $15.1 million loss from the final quarter of 2024.
In its earnings announcement Monday, the REIT credited the turnaround to acquiring nearly $260 million in non-QM loans during the first quarter and maintaining savings on operating expenses. Angel Oak sources funded residential loans both from its affiliated originations arm and from third-party lenders.
Net interest income came in at $10.1 million for the quarter, up slightly from $9.9 million in the prior period. The company reported a GAAP book value of $10.70 per share and an economic book value of $13.41 per share as of March 31, reflecting quarterly increases of 5.2% and 2.4%, respectively.
Angel Oak also declared distributable earnings of $4.1 million, or $0.17 per diluted share, and announced a $0.32 per-share dividend to be paid on May 30 to stockholders of record as of May 22.
The company’s total assets reached $2.5 billion by the end of March, including $439.5 million in residential mortgage whole loans. Angel Oak’s recourse debt-to-equity ratio stood at approximately 2.3x as of March 31.
However, following its post-quarter securitization (AOMT 2025-4), the company used proceeds to pay down $242.4 million in debt, reducing the recourse debt-to-equity ratio to approximately 1.3x by replacing it with non-recourse leverage.
Angel Oak’s earnings per share (EPS) of $0.87 significantly exceeded the expected $0.29, delivering a surprise performance of around 200%. This beat was attributed to higher interest income and improved operational efficiency, marking a notable upswing compared to previous quarters.
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Looking ahead, Angel Oak aims to continue growing earnings through further loan purchases supported by capital from recent securitizations.
“Despite recent volatility caused by broad uncertainty around tariffs, we look to continue expanding earnings through additional loan purchases with the capital made available by our post-quarter-end securitization,” Angel Oak CEO Sreeni Prabhu said in a press release.
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