NEW YORK--(BUSINESS WIRE)--AG Mortgage Investment Trust, Inc. (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

• 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

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.

In accordance with the terms of its Series C Preferred Stock, the Board approved and the Company declared a cash dividend of $1.50 per share on its Series C Preferred Stock.

Dividends for the Series A Preferred Stock, the Series B Preferred Stock, and the Series C Preferred Stock are payable on December 17, 2020 to preferred shareholders of record on November 30, 2020.

As of September 30, 2020, the Company's book value does not include any accrual of accumulated, unpaid, or undeclared dividends on its Cumulative Redeemable Preferred Stock. As such, the Company's book value as of September 30, 2020 will decrease by the amount of the dividends declared during the fourth quarter. The Company's book value per share as of September 30, 2020 would be $0.31 lower after deducting the accumulated and unpaid preferred dividends outstanding as of September 30, 2020.

STOCKHOLDER CALL

The Company invites stockholders, prospective stockholders and analysts to participate in MITT’s third quarter earnings conference call on November 6, 2020 at 8:30 am Eastern Time. The stockholder call can be accessed by dialing (888) 424-8151 (U.S. domestic) or (847) 585-4422 (international). Please enter code number 9327650.

A presentation will accompany the conference call and will be available on the Company’s website at www.agmit.com. Select the Q3 2020 Earnings Presentation link to download the presentation in advance of the stockholder call.

For those unable to listen to the live call, an audio replay will be available promptly following the conclusion of the call on November 6, 2020, through December 6, 2020. To access the replay, please go to https://onlinexperiences.com/Launch/QReg/ShowUUID=518CCB8D-400C-4FC5-AF9B-FF42E683B028&LangLocaleID=1033. The replay passcode is 50008110.

For further information or questions, please e-mail ir@agmit.com.

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 of Agency RMBS and Credit Investments. 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

Angelo, Gordon & Co., L.P. is a privately held limited partnership founded in November 1988. The firm manages approximately $41 billion as of September 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.