Companies

Angel Oak's Second-Quarter Net Interest Income Growth Slows

The Tip Desk · August 4, 2026 · 3 min read

Net interest income was $10.7 million in the quarter ended June 30, 2026, up 8% from a year earlier, after 20.1% year-over-year growth in the first quarter.

Angel Oak Mortgage REIT, Inc. (AOMR), a real estate finance company focused on first and second lien non-QM loans, reported net interest income of $10.7 million for the quarter ended June 30, 2026, an 8% increase from $9.9 million a year earlier. That year-over-year pace slowed from the first quarter, when net interest income of $12.1 million was up 20.1% from $10.1 million in the year-ago period.

Interest income was $41.4 million, up 18% from $35.1 million a year earlier. Interest expense was $30.7 million. Chief Executive Officer and President Sreeni Prabhu said second-quarter results showed resilience in an uncertain macroeconomic environment, citing year-to-date growth of 21% in interest income and 14% in net interest income. Net interest income for the six months ended June 30, 2026, was $22.9 million, up 14.1% from $20.0 million in the six months ended June 30, 2025.

GAAP net income was $3.4 million, or $0.14 a share, versus $0.77 million, or $0.03 a share, a year earlier. The company said net income was driven by operating results offset by unrealized valuation decreases in residential loan and securitized loan portfolios. Distributable Earnings were $9.0 million, or $0.37 a share. The company declared a $0.32 a share common dividend, matching the $0.32 a share dividends declared in the first quarter of 2026 and fourth quarter of 2025.

GAAP book value was $10.13 a share and economic book value $12.24 a share at June 30, 2026, down 1.7% and 0.3% from March 31, 2026. Those declines were milder than the first-quarter drops of 4.0% and 3.3% from year-end 2025. The company attributed the second-quarter book-value declines to unrealized valuation headwinds.

The company purchased $204 million of newly originated, current-market-coupon non-QM residential mortgage loans and home equity lines of credit in the quarter, with a weighted average coupon of 7.34%, weighted average combined loan-to-value ratio of 70.5% and weighted average non-zero credit score of 759. The weighted average coupon of the residential whole loans portfolio was 7.51% at June 30, 2026. Target assets totaled $2.9 billion. Residential mortgage whole loans awaiting securitization had a fair value of $438.8 million, up from $245.5 million at March 31, 2026. Recourse debt to equity was 2.3x at June 30, 2026.

Prabhu said the company monetized delevered retained bonds from a legacy securitization and redeployed that capital into higher-yielding newly originated loans, repurchased approximately $15 million of common stock from a pre-IPO investor at accretive levels, and secured additional spread reductions on its largest warehouse financing facility. Common shares outstanding were 23.2 million at June 30, 2026, versus 24.9 million at December 31, 2025.

Loan financing lines permitted borrowings of up to $1.3 billion, of which about $365 million was drawn, leaving about $0.9 billion of capacity. Notes payable were $364.6 million at June 30, 2026, versus $218.8 million at December 31, 2025.

Subsequent to the quarter, in July 2026, the company issued AOMT 2026-3, a $279.6 million scheduled unpaid principal balance securitization as sole contributor, using proceeds to repay about $247.4 million of debt and releasing $22.3 million of cash for new loan purchases and operations. In August 2026 it participated in AOMT 2026-HB1, a $221.4 million HELOC securitization, contributing loans with a scheduled unpaid principal balance of $71.2 million. The company said its recourse debt to equity ratio decreased to 1.0x following those two securitizations. Prabhu said the company remains focused on maintaining disciplined credit, expanding earnings, and staying active in the securitization market.

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