Company was able to weather volatility thanks to non-QM strategic plan
Non-QM lender Angel Oak Mortgage REIT has announced a net profit of $530,000 in the first quarter after taking an $8.8 million loss in the prior quarter.
Sreeni Prabhu, president and CEO, commented, "The first quarter of 2023 has shown signs of stabilization compared to 2022; however, volatility remains in rates and securitization markets as uncertainty regarding future Fed policy decisions, unemployment and recession concerns, and the failure of several regional banks have fueled investor apprehension."
According to the REIT, the result was thanks to its strategic shift to concentrate on non-QM.
"Fortunately, our execution in late-2022 in accordance with our strategic plan to reposition our portfolio, improve liquidity, and reduce risk, allowed AOMR to weather the continued volatility," Prabhu said in the company's financial report. "We are pleased with our results."
During the quarter, Angel Oak achieved a 3.3% increase in GAAP book value and a 2.1% increase in economic book value compared to the previous quarter.
"We were able to take advantage of the stronger securitization market in January to participate in the closing of the AOMT 2023-1 securitization, which drove positive economics and strengthened our portfolio, and we look forward to executing our next securitization shortly," Prabhu added.
"Additionally, I am pleased to say that we have resumed purchasing newly originated, higher-coupon loans. I am confident in our strategy and our team, and I look forward to demonstrating the earnings power of our portfolio in the coming quarters."
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