Q3 2023 Angel Oak Mortgage REIT Inc Earnings Call
[music].
Speaker 1: Good morning and welcome to the Angel Oak Mortgage 3rd quarter, 2023 Garnings call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After the day's presentation, there will be an opportunity to ask questions.
Good morning, and welcome to the Angel Oak mortgage third quarter 2023 earnings call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by <unk>.
<unk> Star then zero on your telephone keypad.
After todays presentation, there will be an opportunity to ask questions.
Speaker 1: to ask a question, you may press star, then one on your telephone keypad. To draw your question, press star, then two. Please note that this event is being recorded.
I ask a question you May press Star then one on your telephone keypad.
Try your question Press Star then two.
Please note that this event is being recorded.
Speaker 1: I would now like to turn the conference over to Randy Christmas. Please go ahead.
I'd now like to turn the conference over to Randy Christmas.
Please go ahead.
Good morning, Thank you for joining us today for Angel mortgage REIT third quarter 2023 earnings conference call.
Speaker 2: Good morning. Thank you for joining us today for Angelic Mortgage Reads third quarter 2023 earnings conference call.
Speaker 2: This morning, we follow a press release detailing these results, which is available in the investors section on our website at www.angelogreet.com.
This morning, we filed a press release detailing these results which is available in the investors section on our website at Www Dot Angel Dot com.
As a reminder remarks made on today's conference call May include forward looking statements forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today.
Speaker 2: As a reminder, remarks made on today's conference call may include forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to different materially from those discussed today.
Speaker 2: Would you not undertake any obligations to update our forward-looking statements in light of new information or future events?
We do not undertake any obligation to update our forward looking statements in light of new information or future events.
Speaker 2: For a more detailed discussion of the factors that may affect the company's results, please refer to our earnings release for this quarter and to our most recent SEC filing.
A more detailed discussion of the factors that may affect the company's results. Please refer to our earnings release for this quarter into our most recent SEC filings.
Speaker 2: During this call, we will be discussing certain non-GAAP financial measures. More information about these non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures are contained in our earnings release and SEC filing.
During this call we will be discussing certain non-GAAP financial measures.
More information about these non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures are contained in our earnings release and SEC filings.
Speaker 2: This morning's conference call is hosted by Angelou Morgadreets, Chief Executive Officer, Shrinni Prabhu, Chief Financial Officer, Brandon Wilson, and Angelou Capitals, Kosovo Namid Sinab.
This mornings conference call is hosted by Asia like mortgage REIT, Chief Executive Officer, trainee Providence, Chief Financial Officer, Brandon Filson, and major capitals co CIO knowledge.
Management will first lead off the call by making some prepared comments after which we will open up the call to your questions. Additionally.
Speaker 2: Management will first lead off the call by making some prepared comments after which we will open up the call to your questions.
Speaker 2: Additionally, we recommend reviewing our earning supplement posted on our website at www.angelocleed.com. Now, I will turn the call over to Streening.
Additionally, we recommend reviewing our earnings supplement posted on our website at Www Dot Angel locally Dot Com now I will turn the call over to screening.
Speaker 3: Thank you, Randy, and thank you everyone for joining us today.
Thank you Randy and thank you everyone for joining us today.
Speaker 3: Angel of starter of the second half of the year, very strong, with the results demonstrating the positive growth and the momentum we have built throughout the first half of the year.
Starting with the second half of the year very strong.
Demonstrating the positive growth and the momentum we have been throughout the first half of the year.
Speaker 3: Late last year and at the beginning of this year, we set out to reposition our portfolio to reduce risk and increase liquidity.
Late last year and at the beginning of this year.
We set out to reposition our portfolio to reduce risk and increase liquidity.
Speaker 3: We accomplished that and our emphasis then shifted to growth.
We accomplished that.
Then shifting to growth.
Speaker 3: You can see in this corner's results that we are on our way to accomplishing this goal as well. Our focus is on optimizing the owning levers that we can control such as growing netted despising and reducing operating expenses while managing risk and maintaining liquidity.
You can see in this quarter's results.
We are on our way to accomplishing this goal.
Our focus is on optimizing the earnings numbers.
Can control.
There's growing net interest margin and reducing operating expenses, while managing risk and maintaining liquidity.
Speaker 3: To that end, during the third quarter, we continued to pursue selective loan purchases at attractive rates and made further progress on reducing interest and operating expenses as we continue to grow the overall earnings power of our portfolio.
To that end during the third quarter, we continue to pursue selective loan purchases at attractive rates and made further progress on reducing interest and operating expenses as we continue to grow the overall earnings power of our portfolio.
Speaker 3: In the third quarter, we drove a step change improvement in net interest margin due to our strategic security and security and purchases of newly-originated current coupons. No.
In the third quarter.
It drove a step change improvement in net interest margin due to our strategic securitization activity and purchases of newly originated current coupon notes.
Speaker 3: As we stated in our second quarter earnings call, the reduction in interest expense driven by the AOMT 2023-4 securization was demonstrated in our third quarter results.
As we stated in our SEC.
Core earnings call production.
Reduction in interest expense.
Driven by the <unk> 2023 dashboard securitization was demonstrated in our third quarter results.
We have remained nimble securitization activity competing two commingled.
Speaker 3: We have remained nimble in our sequerization activity, completing two combingal deals, alongside other angelic entities, in addition to a standalone AOMR deal.
Alongside other Angel entities. In addition to a Standalone E O M Rd.
Speaker 3: the Angelok ecosystem affords us the ability to pursue securitization structures that provide the best strategic fit for the REIT. Thanks to John Cameron for the organisational to our audience and a mover from us.
The angel ecosystem affords us the ability to pursue securitization structures that provide the best strategic fit for.
For the REIT.
Third a coupon loans purchased during the quarter.
Speaker 3: buoyed net interest income despite lower unsecurized loan balance.
Buoyed net interest income.
Spike more unsecured loan balances.
Speaker 3: The weighted average coupon of our full loan portfolio grew 99 basis points in the third quarter, and including purchases and commitments to purchase since quarter end, currently set to approximately 6.37%. A further increase of 54 basis points since quarter end.
The weighted average coupon.
Loan portfolio grew 99 basis points in the third quarter.
And including purchases and commitments to purchase since cargo and.
Currently sits at approximately 6.37%. It's bought is there increased 54 basis points since quarter end.
Speaker 3: for context. These average coupons compared to 4.63% as of the end of Q1 2023.
For context.
These average coupons compared with $4 six 3%.
As of the end of Q1 'twenty two 'twenty three.
We are proud of the strategic progress we have made and we feel we can maintain the momentum and drive further NIM growth in the following quarters as we can.
Speaker 3: We are proud of the strategic progress we have made and we feel we can maintain the momentum and drive further nim growth in the falling quarters as we read the ploy capitol into assets with significantly higher yield.
Florida capital into assets with significantly high.
Speaker 3: This effort will be supported by our ability to evaluate opportunities within our desired risk and return characteristics and actively acquire high quality loans at attractive coupon rates.
This effort will be supported by our ability to evaluate opportunities within our desired risk and return characteristics.
And actually acquire high quality loans at attractive coupon rates.
After the reason partners, we have remain focused on managing our expenses to maximize the operating effectiveness of the ear market.
Speaker 3: As for the reason problems, we have remained focused on managing our expenses to maximize the operating effectiveness of AOMR.
Speaker 3: Throughout the first half of the year, we made significant progress, reducing our operating lifetime.
Throughout the first half of the year, we made significant progress reducing our operating expenses.
Speaker 3: In the total quarter, we captured additional savings, reducing operating expenses, excluding securitiesization, by 12.5% versus the second quarter.
In the fourth quarter, we captured additional savings, reducing operating expenses, excluding securitization by 12, 5% versus the second quarter.
We have also made efforts to optimize that financing in order to decrease our weighted average rate on our funding cost.
Speaker 3: We have also made efforts to optimize our financing in order to decrease our weighted average rate on our funding costs.
While there are signs that the fed is near the end of the interest rate hike.
Speaker 3: while there are signs that the Fed is near the end of the interest rate height.
Mortgage applications and originations continued to be muted.
Speaker 3: Morgge's applications and organizations continue to be mural with rates remaining elevated relative to recent years.
With rates remained elevated relative to recent years.
Our non QM loan origination volumes have been a bit more resilient than the GSE loans, but given general market uncertainty.
Speaker 3: but a non-QM loan organization volumes have been a bit more resilient than the GSE loans, but given general market uncertainty, we'll continue to manage our whole loan position and expect that a nominal value in whole loans will not exceed more than one and a half to two times the average nominal size of a securization transaction expectation.
Continue to manage a whole long position and expect that our nominal value with all loans will not exceed more than one.
Half to two times, the average nominal size that puts securitization transaction expectations.
We are proud to have reduced our overall greenhouse debt by 69% this year and 82% since the high point of June 2022.
Speaker 3: We are proud to have reduced our overall warehouse debt by 69% this year and 82% since the high point of June 2022.
Speaker 3: We are committed to maintaining liquidity while re-deploying capital into high quality high yield S.
Committed to maintaining liquidity, while redeploying capital into high quality high yielding assets.
Speaker 3: We are proud of our earnings growth. We have achieved this quarter. And though we are still dealing with elevated levels of market uncertainty, we believe that we have direct comparative advantage in our ability to assess and select where to allocate risk.
We are proud of our earnings growth, we have achieved this quarter.
And though we are still dealing with elevated levels of market uncertainty. We believe that we have direct comparative advantage in our ability to assess and select where to allocate risk.
Speaker 3: We feel we are in great position to continue to grow earnings while keeping our focus on adequate liquidity and a low expense profile establishing a very powerful earnings engine based on stable resilient portfolio. I will now turn the call over to Bram.
We feel we are in great position to continue to grow earnings while keeping our focus on adequate liquidity and a lower expense profile, establishing a very powerful earnings engine based on stable resilient portfolio.
I will now turn the call over to Brad.
Brent.
Thank you Sri.
Speaker 4: In the third quarter, we were able to showcase our ability to grow the earnings power of our portfolio as seen through the strong NIM and net income results.
In the third quarter, we were able to showcase our ability to grow the earnings power of our portfolio as seen through the strong NIM and net income results.
Speaker 4: We feel there is more room for growth than we are happy with how our portfolio is positioned from a risk and liquidity standpoint, especially given the current market environment.
We feel there is more room for growth and we are happy with how our portfolio is positioned from a risk and liquidity standpoint, especially given the current market environment.
Speaker 4: For the third quarter of 2023, we had GAAP net income of $8.3 million, or 33 cents per diluted common share. Distributable earnings were negative $8.6 million, or loss of 35 cents per share. The key difference between net income and distributable earnings is that distributed earnings do not include the offsetting unrealized gains, and the loss of $8.6 million.
For the third quarter of 2023, we had GAAP net income of $8 3 million or 33 cents per diluted common share distributable earnings were negative $8 $6 million or loss of 35 per share. The key difference between net income and distributable earnings is that true earnings do not include the offsetting unrealized gain.
On the <unk> 2023, dashed box securitization, excluding the accounting impact.
Speaker 4: on the AORT 2023-5 securitization, excluding the accounting impact.
The 2023 Dash five securitization distributable earnings would have been $4 $3 million.
Speaker 4: the 2023-5 securitization, distributable earnings would have been $4.3 million.
Interest income for the quarter was $23 $9 million and net interest margin was $7 $4 million, reflecting a 1 million dollar expansion versus the second quarter of 2023.
Speaker 4: Interest income for the quarter was $23.9 million and net interest margin was $7.4 million, reflecting a $1 million expansion versus the second quarter of 2023. As Shrini mentioned, net interest margin should continue to expand in the coming quarters as we grow our current coupon loan book with consistent purchases and future securitizations reduce our warehouse debt.
As <unk> mentioned net interest margin should continue to expand in the coming quarters as we grow our correct coupon loan book consistent purchases and future Securitizations reduce our warehouse staff.
Speaker 4: Total operating expenses were $4.4 million, $3.5 million excluding securitization cost and non-cash coppest.com.pacetation.
Total operating expenses were $4 4 million or $3 $5 million, excluding securitization costs and noncash stock compensation.
Speaker 4: This represents a savings of $3.5 million versus Q3 2022 and $800,000 versus the prior quarter. Year-to-date, we've achieved operating expense, excluding curitization costs and stock compensation savings of $8.6 million versus the first nine months of 2022. The largest factor driving our operating expense reduction efforts in the third quarter was lower DNA insurance premium and other vendor and resource management.
This represents a savings of $3 $5 million versus Q3, 2022 and $800000 versus the prior quarter year.
Year to date, we have achieved operating expense, excluding securitization kaufmann stock compensation savings of $8 $6 million versus the first nine months of 2022, the largest factor driving our operating expense reduction efforts in the third quarter was lower D&O insurance premiums and other vendor and resource management.
Turning to the balance sheet as of September 32023.
Speaker 4: Turning to the balance sheet as of September 30th, 2023.
Speaker 4: We get $41.9 million in cash, or about 18% of our total equity base.
We had $41 $9 million in cash or about 18% of our total equity base.
Speaker 4: Our strong cash position in a trailing nine months showcases our focus on maintaining healthy liquidity levels and expanding cash flow from the precinct yields lower overall funding costs and reduced expense.
Our strong cash position and a trailing nine months showcases our focus on maintaining healthy liquidity levels and expanding cash flow from decreasing yields lower overall funding costs and reduced expenses.
This additional liquidity provides us with the dry powder for sustained loan purchases that would grow net interest income improved cash flows and support securitization execution.
Speaker 4: This additional liquidity provides us with the direct hotter for sustained loan purchases that will grow net interest income and prove cash flows and support securitization execution.
Speaker 4: Additionally, we have over $120 million in unlovered assets on the bounce sheet. We can prohibit use increased leverage to drive additional net interest margin.
Additionally, we have over $120 million in Unlevered assets on the balance sheet, we can prudently use increased leverage to drive additional net interest margin.
Speaker 4: Recourse death equity ratio as of September 30th was 1.7 times. As of today's date, a recourse death equity ratio is one time, which reflects the maturity of repurchase obligations from short-term retest trade that matured in early October . This is a decrease of 0.2 times versus the comparable 1.2 times recourse death equity ratio as of last quarter's earnings fall and is down from 2.9 times at the end of 2022.
Our recourse debt to equity ratio as of September 30th was one seven times as of today's date, our recourse debt to equity ratio is one time, which reflects the maturity of repurchase obligations from short term recast trade that matured in early October. This was a decrease of one two times versus the comparable one point a few times recourse debt to equity.
The ratio as of last quarter's earnings call and is down from two nine times at the end of 2022.
Speaker 4: As we purchase additional loans, we are expecting this leverage to begin to increase, but to remain below 2.5 times in future periods.
As we purchase additional loans, we are expecting this leverage to begin to increase but to remain below two five times in future periods.
Speaker 4: We have $307 million of UPB residential holdings that have a fair value of $284.4 million financed with $197.8 million of warehouse debt.
$307 million of UCB.
<unk> residential whole loans that have a fair value of $284 4 million financed with $197 $8 million of warehouse debt.
$1.2 billion of residential mortgage loans in the securitization trust and $75 $3 million of RMB S from retained a O M T securities from off balance sheet securitization.
Speaker 4: $1.2 billion of residential mortgage loans and securitization trust and $75.3 million of RMBS from retained AOMP securities from off-balance sheet securitization. 90 plus day-to-linked fees to remain low at 1.9% across these portfolios with a weighted average LTV of 69.5%.
90, plus day delinquencies remained low at 1.9% across these portfolios with a weighted average LTV of 69, 5%.
These rates are slightly more favorable than in Q2 and to date, we have not seen any material change in credit performance of our loan our underlying securities portfolio.
Speaker 4: These rates are slightly more favorable than in Q2, and in a date, we have not seen any material change in credit performance of our loan or underlying securities portfolio.
Speaker 4: We finished the quarter with undrawn warehouse financing capacity of approximately $661 million.
We finished the quarter with Undrawn warehouse financing capacity of approximately $661 million.
In August we participated in the 2023 dash five securitization alongside other Angel oak entities contributing loans within approximately $94 million unpaid principal balance and releasing $63 $5 million of debt from our highest cost financing facility.
Speaker 4: In August , we participated in the 2023-5 Securitization alongside other angelic entities, contributing loans within approximately $94 million unpaid principal balance and releasing $63.5 million of debt from our highest cost financing facility.
Speaker 4: In total, AOMP 2023-5, consistent 531.
Total <unk> $2023 five consist of 530 loans.
Speaker 4: The Schedules Unpaid Principal Bounce $260.6 million.
The scheduled unpaid principal balance of $266 million.
Speaker 4: The securitization has an average original credit score of 735.
The securitization has an average original credit score of 735.
Speaker 4: original average loan devalued ratio of 71.9% at a non-zero debt income ratio of 32.9%.
Original average loan to value ratio of 71, 9% in a non zero debt to income ratio of 32, 9%.
Speaker 4: Gapbook Value per share was nearly flat at $9.29 as of September 30th, 2023, compared to $9.34 as of June 30th, 2023. New purchases supported the valuations for whole loan portfolio, and decreases in the valuation of our Securitized Loan Portfolio.
GAAP book value per share was nearly flat at $9.29 as of September 32023, compared to $9 34.
As of June 32023, new purchases supported the valuation our whole loan portfolio and decreases in the valuation of our securitized loan portfolio.
Were offset by decreases in the fair value of their corresponding liability.
Speaker 4: We're offset by decreases in the fair value of their corresponding liability.
Similarly, economic book value, which fair values, all the company's nonrecourse securitization obligations with.
Speaker 4: Similarly, economic book value, which fair values all the companies, non-reports, securitization obligations.
Speaker 4: $13.20 per share as of September 30th, 2023, compared to $13.16 per share as of June 30th, 2023. It increased, of course.
$13 20 per share as of September 32023, compared.
Compared to $13.16 per share as of June 30 of 2023, an increase of four cents.
As with last quarter, we expect valuation changes, resulting from interest rate and spread movement calls GAAP and economic book value to fluctuate supplemented by growth in net interest margin.
Speaker 4: As with last quarter, we expect valuation changes resulting from interest rate and spread movement to cause gap in economic book value to fluctuate, supplemented by growth and net interest margin.
Speaker 4: The weighted average coupon of our whole loan portfolio increased 99 basis points to 5.83% as of the end of the third quarter.
The weighted average coupon of our whole loan portfolio increased 99 basis points to 583% as of the end of the third quarter.
Speaker 4: This is also up from a low point in our portfolio of 4.63% as at the end of the first quarter this year, including loan purchases and commitments since the end of the third quarter our whole loan portfolio weighted average coupon is approximately 6.37% representing an increase of over 150 basis points.
This is also up from a low point in our portfolio of $4 six 3% as of the end of the first quarter of this year include.
Including loan purchases and commitments since the end of the third quarter, our whole loan portfolio weighted average coupon was approximately $6 three 7% representing.
An increase of over 150 basis points.
Speaker 4: Our loan purchases this year carry a weighted average coupon of 8.31 percent, weighted average LPB of 70.2 percent, and a weighted average FICO score of 752. We expect this increases to continue as additional loan purchases occur over the coming quarters.
Our loan purchases this year carry a weighted average coupon of $8 three 1% weighted average LTV of 72% and a weighted average FICO score of 752, we expect this increases to continue as additional loan purchases.
Occur over the coming quarters.
Speaker 4: Finally, the company is declared a 32 cent per share common dividend payable on November 30, 2023 to share holders of record at the November 22, 2023.
Finally, the company has declared a <unk> 32 per share common dividend.
Payable on November 32023 to shareholders of record as of November 22nd 2023.
This implies an annualized dividend of $1 28 per share or a yield of 14% to 15% as of the closing price.
Speaker 4: This implies an annualized dividend of $1.28 per share, or a yield of 14% to 15% as of the closing price on November 6, 2023.
On November six 2023.
For additional color on our financial results. Please review the earnings supplement are available on our website I will now turn it back to screening for closing remarks.
Speaker 4: For additional color on our financial results, please review the Learning Supplement Abailed Our website. I will now turn it back to screening for closing remarks.
Thank you Brandon before turning the call over to the operator for Q&A I'd like to conclude with some brief remarks.
Speaker 3: Thank you, Brandon. Before turning the call over to the operators for Q&A, I would like to conclude with some brief remarks.
We are pleased with our financial performance for the third quarter.
Speaker 3: We are pleased with our financial performance for the third quarter, as this is the first quarter that truly demonstrated the earnings impact of strategic actions that we have taken this past year. We have a strong balance.
This is the first quarter that truly demonstrated the earnings impact of strategic actions, we have taken this past year.
We have a strong balance sheet and liquidity position.
Speaker 3: and we are confident in what the future holds for our portfolio and its burnings generating ability.
And we are confident in what the future holds for our portfolio and its Tony generating ability.
Speaker 3: Additionally, the credit performance of her assets remains strong. Our focus on creating a resilient portfolio that generates growing and reliable earnings is ever.
Additionally, the credit performance of our assets remains strong.
Our focus on creating a resilient portfolio that generates growing and reliable earnings is that right.
Speaker 3: We are proud of what you have achieved despite had been from muted mortgage activity and rate volatility.
We're proud of what are you achieved despite headwinds from muted mortgage activity and rate volatility.
And we expect to continue to grow earnings.
Speaker 3: And we expect to continue to grow earnings while maintaining our liquidity position and risk profile.
While maintaining our liquidity position and risk profile.
We will now begin the question and answer session to ask a question you May press star one on your telephone keypad.
Speaker 1: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad.
Speaker 1: If you are using a speaker phone, please pick up your hands up before pressing the keys.
You are using a speaker phone please pick up your handset before pressing the keys.
Speaker 1: To draw your question, please press star then two.
Sure. Your question. Please press Star then two.
Our first question comes from Dan Fannon.
With Wells Fargo. Please go ahead.
Yes, you know it seems like the core business is kind of moving back to modest growth phase.
Speaker 4: Yes. You know, it seems like the core business is kind of moving back to modest growth phase. You've improved the funding profile significantly. I guess on credit, you know, it's continued to be very good. Do you have any thoughts on or concerns around the credit outlook based on what you're seeing in the economy and with mortgage rates so high?
Roof, the funding profile significantly I guess on credit.
It's continued to be very good do you have any thoughts or concerns around the crowded out what based on what you're seeing in the economy.
Mortgage rates so high.
Yeah, Hi, this is Amit I'm, sorry on the science side as we mentioned you know the the.
Speaker 5: Hi, this is Namit. So on the credit side, as we mentioned, you know, the credit performance looks very, very good.
Performance looks very very good and we haven't seen any evidence of anything.
Speaker 5: and we haven't seen any evidence of any deterioration there. Now, obviously anecdotally, there are certain sectors that we have heard about where there are increases in delicacy and loss, results, et cetera.
Any deterioration there.
Now obviously and.
Anecdotally there are certain sectors that you have heard.
What about bad debt or in pieces and delinquency and losses at the Tetra.
Speaker 5: But it is important to realize that the portfolio that we run is close to 740 average credit score.
But it is important to realize that the portfolio that can be done is close to 740 average credit score.
Speaker 5: and low 70s loan to value. That's not a credit profile that is the first to get impacted even in a slowdown or a recessionary environment. Like if we do go into a slowdown or a recession,
And low seventy's loan to value that is not a credit profile that is the first to get impacted even in a slowdown a recessionary environment like if if we do go into a slowdown or recession youre going to start seeing the impact more on the subprime as part of the portfolio mix.
Speaker 5: You're going to start seeing the impact more on the subprime-ish part of the portfolio mix, which we really do not do much of.
We really do not do much off so on overall portfolio delinquencies are expected to be muted even under a more stressful environment, but given that what we have seen so far we have had a very very good trade backdrop of home prices have been very resilient and the economy has held up generally really bad so odd portfolio.
Speaker 5: So our overall portfolio delinquencies are expected to be muted even under a more stressful environment, but given that what we have seen so far, we have had a very, very good credit backdrop, home prices have been very resilient and the economy has held up generally really well. So our portfolio credit performance has been pretty much part on.
Great performance has been pretty much spot on.
Speaker 4: Got it. In terms of future securitizations, do you plan on participating with other angel of entities or more stand alone? Or does it just depend on how the market develops?
Got it and in terms of future Securitizations.
Do you plan on participating with other angel up entities are more standalone or does it just depend on kind of how the market develops.
Yeah, Hey, Hey, Don.
Speaker 6: Yeah. Hey, Don. We use commingled versus standalone opportunistically, you know, in our thought process. Right now, I'd expect us to come out with about one more smaller commingled deal at some point in the future. And then after that, we'll probably be back to a standalone deal only once we
We use a co mingled versus Standalone opportunistically.
And our thought process.
Right now I'd expect us to come out with about one more smaller co mingled deal at some point.
Future and then after that we'll probably be back to a standalone deal only once we get that deal out.
Got it thanks.
Our next question comes from Chris Kotowski with Oppenheimer. Please go ahead.
Speaker 1: Her next question comes from Chris Kutowski with Oppenheimer. Please go ahead.
Speaker 7: Yeah, good morning and thank you. Brandon, you mentioned another distributable earnings calculation of I think 4.3 million you said. Can you take us through a little bit in detail exactly what that was and how it was calculated and how it differs from the, you know, distributable earnings that you've always reported.
Yeah. Good morning, and thank you Brendan you you mentioned a.
Another distributable earnings calculation of I think $4 3 million you said can you take us through a little bit in detail exactly what that was and how it was calculated and how it differs.
Differs from the disc.
Distributable earnings that you've always reported.
Speaker 6: Yeah, no, what I was trying to do is I was just trying to add clarity of the bridge between the GapNet income and distributive learnings. And as you know, distributive learnings eliminates unrealized gains and losses, but keeps in any realized gain or loss. So this quarter when we did the 2023-5 securitization.
No what I was trying to do is I was just trying to add clarity of the bridge between the GAAP net income.
And distributable earnings and as you know distributable earnings eliminates unrealized gains and losses, but keeps in any realized.
Gain or loss. So this quarter when we did 2023 dash five securitization.
Speaker 6: There was about a $13 million recovery of a previously recognized unrealized loss that's included in GapNet income.
There was about a 13 million dollar recovery of a previously recognized unrealized loss. That's included in GAAP net income.
But it's excluded from distributable earnings and with that.
Speaker 6: but it's excluded from distributable earnings. And with that, you know, that's the big driver in the delta between GAAP earnings and distributable earnings is that one particular thing. And that's just a one-off transactional based thing. So I wanted to highlight that because if you look at.
That's the big driver in the Delta between GAAP earnings and distributable earnings is that one particular thing and that's just a one off transactional base thing. So I wanted to highlight that because if you look at.
Speaker 6: You know net interest margin less cash expenses the quarter that you know that widened out about 1.8 million dollars
Net interest margin less cash expenses the quarter.
That widened out about $1 $8 million.
Speaker 6: And then what we have in the bank so far from new loan purchases we mentioned to taking our coupon up to 6.4% is around another million dollars kind of in the bank as of today for
And then you know what we have in the bank so far from new loan purchases, we mentioned, taking our coupon up to six point almost six 4% is around another $1 billion kind of in the bank as of today for this coming quarter.
Speaker 7: When you say another million dollars in the bank, you mean like if you're thinking about your all in net interest income of like 7.4 million, that the base level going into the fourth quarter is like 8.4? That's right. Okay.
When you say another million dollars in the bank, you're you mean like if you're thinking about your all in net interest income of like 7.4 million that the.
Base level going into the fourth quarter as like 8.4.
That's right okay.
Right.
Okay.
And Ed and presumably it impose a bit if theres another securitization before year end well it could improve with the securitization and really additional loan purchases for the last two months of the year Okay.
Speaker 6: and and presumably it imposes that if there's another securitization before year well it could improve the securitization and really additional loan purchases for the last two months of the year
Alrighty, that's it for me thank you.
Speaker 1: Again, if you have a question, please press star then one.
Again, if you have a question. Please press Star then one.
This concludes our question and answer session I would like to turn the conference back over to Brendan Nelson for any closing remark.
Speaker 1: This concludes our question and answer session. I would like to turn the conference back over to Brandon Filson for any closing remarks.
Thanks.
Speaker 6: Thank you everyone for your time and interest in Angel Oak Mortgage Read. We look forward to connecting with you again next quarter. In the meantime, if you have any additional questions, feel free to reach out to us. Have a great day.
Thank you everyone for your time and interest and Angel look mortgage REIT, we look forward to connecting with you again next quarter in the meantime, if you have any additional questions feel free to reach out to us have a great day.
Yeah.
Speaker 1: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.