ER.. results $3.34 share book value
AG Mortgage Investment Trust, Inc. Reports Third Quarter 2020 Results
6:30 AM ET 11/6/20 | Dow Jones
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NEW YORK--(BUSINESS WIRE)--November 06, 2020--
AG Mortgage Investment Trust, Inc. ("MITT," "we," the "Company" or "our") (NYSE: MITT) today reported financial results for the quarter-ended September 30, 2020. AG Mortgage Investment Trust, Inc. is a hybrid mortgage REIT that opportunistically invests in and manages a diversified risk-adjusted portfolio of Agency RMBS and Credit Investments. Our Credit Investments include Residential Investments and Commercial Investments.
THIRD QUARTER 2020 FINANCIAL SNAPSHOT
-- $0.44 of Net Income per diluted common share(1)
-- Record high quarterly profitability at Arc Home driven by strong
origination volumes and gain on sale margins
-- $3.34 Book Value per share(1) as of September 30, 2020, compared to $2.75
as of June 30, 2020
-- Book Value per share(1) would be $0.31 and $0.17 lower after
deduction of the accumulated and unpaid preferred dividends
outstanding as of September 30, 2020 and June 30, 2020,
respectively
-- $1.1 billion Investment Portfolio and 0.9x Economic Leverage Ratio as of
September 30, 2020 as compared to $1.0 billion and 0.8x, respectively, as
of June 30, 2020(2)(3)(4)
-- $242.8 million of MTM recourse financing and $476.0 million of non-MTM
non-recourse financing as of September 30, 2020 as compared to $278.7
million of MTM recourse financing and $409.6 million of non-MTM
non-recourse financing as of June 30, 2020(a)
-- At September 30, 2020, had total liquidity of $82.4 million
inclusive of $44.6 million of cash and $37.8 million of
unencumbered agency fixed rate securities as compared to total
liquidity of $68.2 million as of June 30, 2020
-- Capital Activity
-- Exchanged 516,300 shares of common stock for 103,260 shares of
preferred stock in the public Exchange Offer
-- Utilized ATM program to issue approximately 0.4 million shares of
common stock for net proceeds of approximately $1.2 million
-- Issued 1.4 million shares of common stock to the Manager in
satisfaction of deferred base management fees of approximately
$4.3 million
-- Shares issued to the Manager were valued at $3.15 per share
based on estimated book value per share as of August 31,
2020
(a) As of September 30, 2020, total financing of $718.8 million includes financing arrangements of $349.5 million, a secured loan from the Manager of $10.3 million and securitized debt of $359.0 million. As of June 30, 2020, total financing of $688.3 million includes financing arrangements of $469.2 million, secured loans from the Manager of $20.1 million and securitized debt of $199.0 million.(3)
MANAGEMENT REMARKS
"We are pleased with our Company's progression during the third quarter as we continue to focus on creating earnings power while maintaining adequate liquidity and increasing book value for our shareholders," said Chief Executive Officer, David Roberts. "During the quarter, we increased our book value per share from $2.75 at June 30, 2020 to $3.34 at September 30, 2020. We generated $0.44 of net income per diluted common share driven by strong performance from Arc Home."
"During the quarter, we were active in the market acquiring Agency whole pools and residential loans as well as completing two securitizations, inclusive of our second rated Non-QM deal in 2020, further transitioning our financing to non-MTM non-recourse from MTM recourse and lowering our cost of funds. We also continued to maintain a low Economic Leverage Ratio of 0.9x, compared to 0.8x at the end of the second quarter," noted Chief Investment Officer, T.J. Durkin.
Mr. Durkin added, "Arc Home continued to experience strong performance during the quarter, with another new record quarter in Agency volumes and gross production margins, expanding on its trend from the second quarter. This resulted in Arc Home achieving record profitability of $29.5 million, up from $16.9 million in the second quarter. As noted in the prior quarter, Arc Home was also one of the first originators to re-enter the Non-QM business and we are seeing the pipeline for that product continue to grow at a healthy pace."
THIRD QUARTER 2020 ACTIVITY AND FINANCING UPDATE
-- Asset Activity
-- Alongside other Angelo Gordon funds, sold our Ginnie Mae Excess
MSR portfolio generating proceeds of approximately $8.5 million,
representing our 45% ownership in the portfolio
-- Opportunistically sold one commercial loan for proceeds of $2.7
million, releasing unfunded commitments of approximately $22.6
million
-- Executed the sale of certain CMBS for proceeds of $36.5 million
-- Acquired an RPL/NPL residential mortgage loan portfolio for $60.2
million, which was simultaneously incorporated into the RPL/NPL
securitization described below
-- Purchased $250.1 million of 30 Year Fixed Rate agency securities
-- Financing Activity
-- Participated in a rated Non-QM securitization alongside other
Angelo Gordon funds, which termed out repo financing into lower
cost, fixed rate, long-term financing related to Non-QM loans with
a fair value of $226.0 million
-- Maintained exposure to the securitization through an
interest in the subordinated tranches
-- Securitized RPL/NPL residential mortgage loans with a fair value
of $199.6 million, entering into new lower cost, fixed rate
long-term financing, returning $3.3 million of equity to MITT
-- Maintained exposure to the securitization through an
interest in the subordinated tranches
-- Resolved and settled all deficiency claims with lenders as of
August 10th
ARC HOME UPDATE
-- MITT, alongside other Angelo Gordon funds, owns Arc Home(6), a fully
licensed mortgage originator
-- Record profitability in the third quarter of $29.5 million, up from $16.9
million in second quarter
-- Resulted in income of $13.4 million for MITT
-- Continued to experience record Agency Mortgage Loan Lock and Funding
volumes in the third quarter of 2020
($ in millions) 2019 FY 2020 Q1 2020 Q2 2020 Q3
------- ------- ------- -------
Lock Dollars $2,213 $911 $1,399 $1,677
Funding Dollars 1,573 415 854 1,253
-- Gross production margins remained at historic highs during the quarter
contributing to strong operating performance
-- Began to experience some normalization of margins as the industry
continues to build capacity to meet demand
-- Re-entered the Non-QM market during the third quarter
-- Expect modest near-term production volumes of Non-QM loans
-- Securitization market for Non-QM loans has returned to pre-COVID
levels
-- Opportunistically sold its GNMA MSR portfolio
KEY STATISTICS
($ in millions, except per share data) September 30, 2020
------------------
Investment portfolio(2) (3) $1,121.3
Financing arrangements(3) 349.5
Total Economic Leverage(4) 347.7
Stockholders' equity 390.5
GAAP Leverage Ratio 1.8x
Economic Leverage Ratio(4) 0.9x
Book value, per share(1) $3.34
Duration gap(5) 1.39
INVESTMENT PORTFOLIO
The following summarizes the Company's investment portfolio as of September 30, 2020(2)(3) :
Percent of Allocated Percent of
($ in millions) Fair Value Fair Value Equity(7) Equity
----------- ------------ ---------- ------------
Agency RMBS(a) $254.0 22.7% $59.5 15.2%
Residential
Investments(a) 690.2 61.6% 236.9 60.7%
Commercial
Investments 177.1 15.7% 94.1 24.1%
----------- ------------ ---------- ------------
Total $1,121.3 100.0% $390.5 100.0%
(a) As of September 30, 2020, the table above includes fair value of
$0.4 million of Agency RMBS and $217.2 million of Residential
Investments that are included in the "Investments in debt and equity
of affiliates" line item on our consolidated balance sheet.
DIVIDEND
The Company announced today that its Board of Directors (the "Board") has approved, and the Company has declared and set apart for payment on December 17, 2020, the next regular payment date, all accrued and unpaid cash dividends on its 8.25% Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock"), 8.00% Series B Cumulative Redeemable Preferred Stock (the "Series B Preferred Stock"), and 8.000% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock") that were in arrears as well as the full dividends payable on the preferred stock for the fourth quarter of 2020.
In accordance with the terms of its Series A Preferred Stock, the Board approved and the Company declared a cash dividend of $1.54689 per share on its Series A Preferred Stock.
In accordance with the terms of its Series B Preferred Stock, the Board approved and the Company declared a cash dividend of $1.50 per share on its Series B Preferred Stock.
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