AG Mortgage Investment Trust Reports Second Quarter 2020 Results

8/10/20

NEW YORK--(BUSINESS WIRE)--AG Mortgage Investment Trust, Inc. (NYSE: MITT) today reported financial results for the quarter-ended June 30, 2020. AG Mortgage Investment Trust, Inc. is a hybrid mortgage REIT that opportunistically invests in and manages a diversified risk-adjusted portfolio of Residential and Commercial Investments.

SECOND QUARTER 2020 FINANCIAL SNAPSHOT

  • $(0.08) of Net Income/(Loss) per diluted common share(1)
  • $2.75 Book Value per share(1) as of June 30, 2020, compared to an estimated range of $1.80 to $1.90 at April 30, 2020 and $2.63 as of March 31, 2020
  • $278.7 million of MTM recourse financing and $409.6 million of non-MTM non-recourse financing as of June 30, 2020 as compared to $1.2 billion of MTM recourse financing and $197.2 million of non-MTM non-recourse financing as of March 31, 2020(a)
    • Cash of $68.2 million as of June 30, 2020
  • $1.0 billion Investment Portfolio with a 0.8x Economic Leverage Ratio as of June 30, 2020 as compared to $1.6 billion and 3.3x, respectively, as of March 31, 2020(2)(3)(4)
  • Issued approximately 1.4 million shares of common stock for net proceeds of approximately $4.8 million through our ATM program(b)

(a) As of June 30, 2020, total includes financing arrangements of $469.2 million, secured loans from the Manager of $20.1 million, and securitized debt of $199.0 million. As of March 31, 2020, total includes financing arrangements of $1.2 billion and securitized debt of $197.2 million.(3)(b) Of the 1.4 million shares issued and $4.8 million of net proceeds, approximately 0.4 million and $1.2 million settled in July, respectively.

MANAGEMENT REMARKS

"We are pleased with how the second quarter ended for MITT," said Chief Executive Officer, David Roberts. "During the quarter, we successfully exited forbearance and were able to increase our book value per share from the estimated range of $1.80 to $1.90 at April 30, 2020 to $2.75 at June 30, 2020. Additionally, we utilized our ATM program in June, raising approximately $4.8 million and issuing 1.4 million shares of common stock, which contributed to our strong cash balance as of quarter end."

"During the quarter, we were able to transition some of our financing away from mark-to-market, recourse financing. We ended the quarter with an Economic Leverage Ratio of 0.8x, compared with 3.3x at the end of the first quarter," Chief Investment Officer, T.J. Durkin noted. "We were also able to reduce our financing counterparties from 18 at March 31, 2020 to 6 at June 30, 2020."

Mr. Durkin added, "Additionally, Arc Home performed especially well during the quarter, with record high Agency volumes and gross production margins. This resulted in Arc recording profitability of $16.9 million in the second quarter.(a) Looking forward, Arc Home expects to continue to enjoy higher margins on Agency products in the near term, and has also re-entered the non-QM origination market to take advantage of long-term opportunities in the space."

(a) MITT owns approximately 44.6% of Arc Home.

SECOND QUARTER 2020 ACTIVITY AND FINANCING UPDATE

  • Activity
    • From March 23, 2020 through June 30, 2020, sold residential and commercial mortgage assets generating proceeds of approximately $1 billion, comprised of approximately $725 million of residential investments, $250 million of commercial investments and $45 million of Agency MBS collateralized mortgage obligations
    • Did not declare quarterly dividends on our common or preferred stock and, based on current conditions for the Company, we do not anticipate paying dividends on our common or preferred stock for the foreseeable future
    • Manager made secured loans totaling $20 million to the Company, of which $10 million was repaid when due subsequent to quarter end
    • Manager deferred payment of management fees and expense reimbursements through September 30, 2020
    • Subsequent to quarter end, sold certain CMBS positions for proceeds of approximately $24.4 million
  • Financing Update
    • Entered into multiple forbearance agreements with financing counterparties beginning on April 10th; exited forbearance on June 10th having satisfied all outstanding margin calls
    • Through asset sales and repo consolidation, reduced the number of counterparties with debt outstanding down from 30 as of December 31, 2019 to 18 as of March 31, 2020 and 6 as of June 30, 2020
    • As of August 10th, MITT has resolved and settled all deficiency claims with lenders
    • Participated in a term securitization alongside another Angelo Gordon fund in June which refinanced previously securitized primarily re-performing mortgage loans into a new lower cost, fixed rate long-term financing, returning $6.3 million of equity to MITT
      • MITT maintained exposure to the securitization through an interest in the subordinated tranches
    • Subsequent to quarter end, participated in rated Non-QM securitization alongside other Angelo Gordon funds, which termed out repo financing into lower cost, fixed rate, long-term financing

ARC HOME UPDATE

  • MITT, alongside other Angelo Gordon funds, owns Arc Home, a fully licensed mortgage originator
  • Record profitability in the second quarter of $16.9 million
  • Experienced record high Agency Mortgage Loan Lock and Funding volumes in the second quarter of 2020

ABOUT AG MORTGAGE INVESTMENT TRUST, INC.

AG Mortgage Investment Trust, Inc. is a hybrid mortgage REIT that opportunistically invests in and manages a diversified risk-adjusted portfolio Residential 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

Angelo, Gordon & Co., L.P. is a privately held limited partnership founded in November 1988. The firm manages approximately $39 billion as of June 30, 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.