Angel Oak Mortgage REIT fell 12.2% after earnings, with investors likely focused on a sharp reversal to a GAAP loss as rising rates drove valuation losses and pressured book value. Stable credit performance and higher distributable earnings were positives, but net interest income was flat year over year and management said higher rates had compressed returns on new investments.
- Reported a GAAP net loss of $16.7 million, or $0.72 per diluted share, versus net income of $11.4 million, or $0.46 per share, in Q3 2025. A $24.4 million net realized and unrealized loss tied to the securitization portfolio was the primary driver.
- Distributable Earnings were $6.4 million, or $0.28 per share, versus $0.5 million, or $0.02 per share, in the prior-year quarter.
- Interest income rose 16% to $42.5 million, but net interest income remained flat at $10.2 million year over year.
- Higher rates pressured asset valuations and book value; management also cited lower non-QM origination volumes and temporarily compressed returns on new investments. It said underlying credit performance remained stable, with low delinquencies.
- Loan purchases totaled $233.1 million. The company completed two securitizations during the quarter and another in October, while renewing and extending several financing facilities at reduced spreads.
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