NEW YORK--(BUSINESS WIRE)--AG Mortgage Investment Trust, Inc. (NYSE: MITT) today reported financial results for the year and quarter ending December 31, 2020. The Company is a hybrid mortgage REIT that opportunistically invests in a diversified risk-adjusted portfolio of Credit Investments and Agency RMBS. Our Credit Investments include Residential Investments and Commercial Investments.
Q4 2020 PERFORMANCE AND HIGHLIGHTS
- $1.16 of Net Income per diluted common share(1) for Q4 2020, as compared to $0.44 for Q3 2020
- $0.22 of Core Earnings per share(1) for Q4 2020
- $4.13 Book Value per share and $3.94 Adjusted Book Value per share as of December 31, 2020 as compared to $3.34 and $3.08 as of September 30, 2020, respectively(1)
- Adjusted Book Value gives effect to the liquidation preference of our preferred stock which does not reflect underwriting discounts and offering expenses incurred at issuance
- Increase from September 30, 2020 primarily due to mark-to-market gains on our Credit Investments and income generated at Arc Home
- Fourth Quarter Capital Activity
- Reinstated common dividend by declaring $0.03 per share paid in January 2021
- Declared and paid $14.9 million of accrued and unpaid preferred dividends during the quarter
- Redeemed 1.3 million shares of preferred stock in exchange for 4.6 million shares of common stock and $8.0 million of cash in two separate privately negotiated exchange offers
- Utilized ATM program to raise approximately $2.4 million in net proceeds through issuance of approximately 0.7 million shares of common stock
- Transactions Subsequent to Quarter End
- Sold two commercial real estate loans in February for total proceeds of $74.5 million, releasing unfunded commitments of approximately $28.8 million as of December 31, 2020
- Purchased $322.8 million of 2.0% and 2.5% fixed rate agency whole pools
- Purchased or entered into agreements to purchase $73.4 million of Non-QM Loans, $27.8 million of which were sourced from Arc Home
MANAGEMENT REMARKS
"I am pleased with our performance during the fourth quarter of 2020 as we continued to execute on our goals of increasing book value while also maintaining strong liquidity," said David Roberts, Chief Executive Officer. "During the quarter, adjusted book value increased by 28% benefiting from continued asset value recovery in our residential and CMBS portfolios, as well as strong performance from our mortgage origination affiliate Arc Home. Additionally, we are pleased that we have reinstated both the common and preferred dividends for our stockholders."
"We are excited to report that Arc Home finished 2020 with 136% year over year growth in origination volume delivering another strong quarter of performance for the Company," said T.J. Durkin, Chief Investment Officer. Mr. Durkin also noted, "We are encouraged by the sale of two commercial real estate investments subsequent to year end providing additional liquidity enabling us to reinvest capital into the residential sector."
PORTFOLIO UPDATE
Fourth Quarter Portfolio Update
- $1.4 billion Investment Portfolio and 1.5x Economic Leverage Ratio as of December 31, 2020, as compared to $1.1 billion and 0.9x, respectively, as of September 30, 2020(2),(3),(4)
- Investment portfolio and leverage increase driven by Agency RMBS purchases during the fourth quarter
- $580.1 million of MTM recourse financing and $466.3 million of non-MTM non-recourse financing as of December 31, 2020, as compared to $242.8 million and $476.0 million, respectively, as of September 30, 2020 (a)
- At December 31, 2020, MITT had total liquidity of $54.2 million inclusive of $47.9 million of cash and $6.3 million of unencumbered agency fixed rate securities, as compared to total liquidity of $82.4 million as of September 30, 2020
January Portfolio Update
- As of January 31, 2021, we had an investment portfolio of approximately $1.6 billion, consisting of approximately 44% Agency RMBS, 44% Residential Investments, and 12% Commercial Investments
- As of January 31, 2021, our MTM recourse financing and Economic Leverage Ratio increased to approximately $0.9 billion and 2.2x,(4) respectively
- Book Value per share and Adjusted Book Value per share as of January 31, 2021 are estimated to be in the range of $4.35 to $4.45 and $4.15 to $4.25, respectively(1)
(a) As of December 31, 2020, total financing of $1.0 billion includes financing arrangements of $680.8 million, collateralized by various asset types in our investment portfolio; securitized debt of $355.2 million, collateralized by Residential Investments; and a secured loan from the Manager of $10.4 million. As of September 30, 2020, total financing of $718.8 million includes financing arrangements of $349.5 million, securitized debt of $359.0 million, and a secured loan from the Manager of $10.3 million.(3)
ARC HOME UPDATE
- MITT, alongside other Angelo Gordon funds, owns Arc Home,(7) a fully licensed mortgage originator. MITT indirectly owns approximately 44.6% of Arc Home
- Arc Home achieved 136% growth in origination volume in 2020
- Arc Home generated net income of $49.2 million in 2020 and $20.7 million in the fourth quarter
- Resulted in net income of $10.4 million for MITT in the fourth quarter
- Angelo Gordon's investment in Arc Home generated $14.5 million of liquidity, of which $6.5 million was distributed to MITT
- The table below provides a summary of Arc Home's performance throughout 2020 compared to 2019:
|
2019 FY |
2020 Q1 |
2020 Q2 |
2020 Q3 |
2020 Q4 |
2020 FY |
|||||||||||||
|
Origination Volume |
||||||||||||||||||
|
Lock Dollars $B |
2.2 |
0.9 |
1.4 |
1.6 |
1.4 |
5.3 |
||||||||||||
|
Funding Dollars $B |
1.6 |
0.4 |
0.9 |
1.3 |
1.2 |
3.8 |
||||||||||||
|
Funding by Channel(a) |
||||||||||||||||||
|
Retail/Direct |
20.7 |
% |
37.2 |
% |
35.8 |
% |
32.5 |
% |
27.0 |
% |
32.0 |
% |
||||||
|
Wholesale |
34.1 |
% |
34.7 |
% |
35.2 |
% |
34.3 |
% |
38.7 |
% |
35.9 |
% |
||||||
|
Correspondent |
45.2 |
% |
28.1 |
% |
29.0 |
% |
33.2 |
% |
34.3 |
% |
32.0 |
% |
||||||
|
Funding By Product(a) |
||||||||||||||||||
|
Conventional |
62.7 |
% |
58.3 |
% |
84.8 |
% |
84.7 |
% |
78.6 |
% |
79.8 |
% |
||||||
|
Government |
34.5 |
% |
22.8 |
% |
15.0 |
% |
14.7 |
% |
13.9 |
% |
15.4 |
% |
||||||
|
Non-Agency |
2.8 |
% |
18.9 |
% |
0.2 |
% |
0.6 |
% |
7.5 |
% |
4.8 |
% |
||||||
|
Gain on Sale Margin |
145bps |
(8bps) |
337bps |
356bps |
353bps |
310bps |
||||||||||||
(a) Represents the weighted average based on quarterly funding dollars for 2019 and 2020
KEY STATISTICS
|
($ in millions) |
December 31, 2020 |
|||
|
Investment portfolio(2) |
$ |
1,395.6 |
||
|
Financing arrangements(3) |
680.8 |
|||
|
Total Economic Leverage(3) |
629.7 |
|||
|
Stockholders’ equity |
409.7 |
|||
|
GAAP Leverage Ratio |
2.4x |
|||
|
Economic Leverage Ratio(4) |
1.5x |
|||
|
Book value, per share(1) |
$ |
4.13 |
||
|
Adjusted book value, per share(1) |
$ |
3.94 |
||
|
Dividend, per share(1) |
$ |
0.03 |
||
|
Duration Gap(5) |
0.58 |
|||
INVESTMENT PORTFOLIO
The following summarizes the Company’s investment portfolio as of December 31, 2020(2):
|
($ in millions) |
Fair Value |
Percent of Fair Value |
Allocated Equity(6) |
Percent of Equity |
||||
|
Agency RMBS(a) |
$521.8 |
37.4% |
$80.9 |
19.7% |
||||
|
Residential Investments(a) |
691.5 |
49.5% |
229.2 |
56.0% |
||||
|
Commercial Investments |
182.3 |
13.1% |
99.6 |
24.3% |
||||
|
Total |
$1,395.6 |
100.0% |
$409.7 |
100.0% |
(a) As of December 31, 2020, the table above includes fair value of $0.4 million of Agency RMBS and $217.5 million of Residential Investments that are included in the “Investments in debt and equity of affiliates” line item on our consolidated balance sheet.
DIVIDEND
On November 6, 2020, the Company's board of directors declared all dividends in arrears for the second and third quarters and declared fourth quarter dividends in the amount of $1.54689 per share on its 8.25% Series A Cumulative Redeemable Preferred Stock, $1.50 per share on its 8.00% Series B Cumulative Redeemable Preferred Stock and $1.50 per share on its 8.000% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock. The dividends were paid on December 17, 2020 to stockholders of record as of November 30, 2020.
On December 22, 2020, the Company’s board of directors declared a fourth quarter dividend of $0.03 per share of common stock that was paid on January 29, 2021 to stockholders of record as of December 31, 2020.
ABOUT AG MORTGAGE INVESTMENT TRUST, INC.
AG Mortgage Investment Trust, Inc. is a hybrid mortgage REIT that opportunistically invests in a diversified risk-adjusted portfolio of Credit Investments and Agency RMBS. Its Credit Investments include Residential Investments and Commercial Investments. AG Mortgage Investment Trust, Inc. is externally managed and advised by AG REIT Management, LLC, a subsidiary of Angelo, Gordon & Co., L.P., an SEC-registered investment adviser that specializes in alternative investment activities.
Additional information can be found on the Company’s website at www.agmit.com.
ABOUT ANGELO, GORDON & CO.
Angelo, Gordon & Co., L.P. is a privately held limited partnership founded in November 1988. The firm currently manages approximately $43 billion as of December 31, 2020 with a primary focus on credit and real estate strategies. Angelo Gordon has over 550 employees, including more than 200 investment professionals, and is headquartered in New York, with offices in the U.S., Europe and Asia. For more information, visit www.angelogordon.com.
